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Rt Financial Inc v. Alberto Zamora

September 27, 2012

RT FINANCIAL INC.,
PLAINTIFF,
v.
ALBERTO ZAMORA, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Sheila K. Oberto United States Magistrate Judge

ORDER DENYING DEFENDANTS' REQUEST FOR REMOVAL AND REMANDING ACTION TO STANISLAUS COUNTY SUPERIOR COURT (Docket No. 1) ORDER DENYING AS MOOT DEFENDANTS' APPLICATION TO PROCEED IN FORMA PAUPERIS (Docket No. 5)

I. INTRODUCTION

On September 26, 2012, Defendants Alberto Zamora and Laura Zamora ("Defendants") filed a document entitled "NOTICE OF REMOVAL" (the "Removal Notice"). (Doc. 1.) The Removal Notice alleges that removal is proper because the suit arises under federal law pursuant to 28 U.S.C. §§ 1331, 1441(a). (Doc. 1, 2:24-3-13.) Although Defendants do not clearly set forth the federal question at issue, it appears that they are asserting that Plaintiff RT Financial ("Plaintiff") violated 12 U.S.C. § 5220, the Assistance to Homeowners under the Troubled Assets Relief Program. Defendants further assert that their demurrer filed in Stanislaus Superior Court raised federal questions and that California's foreclosure "scheme" violates their equal protection rights. (Doc. 1, 3:5-9.) Defendants also filed an application to proceed without the prepayment of fees. (Doc. 5.)

For the reasons set forth below, Defendants' request for removal is DENIED and the action is REMANDED to the Stanislaus County Superior Court. As such, Defendants' application to proceed in forma pauperis is DENIED AS MOOT.

II. DISCUSSION

A. Legal Standard

Pursuant to Title 28 U.S.C. Section 1441(a), "any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending." A district court has "a duty to establish subject matter jurisdiction over the removed action sua sponte, whether the parties raised the issue or not." United Investors Life Ins. Co. v. Waddell & Reed, Inc., 360 F.3d 960, 967 (9th Cir. 2004). "If at any time prior to judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded." 28 U.S.C. § 1447(c).

The removal statute is strictly construed against removal jurisdiction. Geographic Expeditions, Inc. v. Estate of Lhotka, 599 F.3d 1102, 1107 (9th Cir. 2010); Provincial Gov't of Marinduque v. Placer Dome, Inc., 582 F.3d 1083, 1087 (9th Cir. 2009). The court presumes that a case lies outside the limited jurisdiction of the federal courts, and the burden of establishing the contrary rests upon the party asserting jurisdiction. Geographic Expeditions, 599 F.3d at 1106-07; Hunter v. Philip Morris USA, 582 F.3d 1039, 1042 (9th Cir.2009).

B. This Court Lacks Subject Matter Jurisdiction

1. No Federal Question Jurisdiction Pursuant to Title 28 U.S.C. Section 1331

The Removal Notice provides a copy of the complaint that is the subject of this removal. (Doc. 1, pp. 6-18.) The complaint contains a single claim for unlawful detainer filed by Plaintiff. (Doc. 1, pp. 6-18.)

Title 28 U.S.C. Section 1331 provides jurisdiction for federal question claims and states that "district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States." Defendants' Removal Notice appears to assert a defense of violations of 12 U.S.C. § 5220, the Assistance to Homeowners under the Troubled Assets Relief Program. (Doc. 1, 3:3-5.) Defendants filed a demurrer in state court that purportedly raised defenses under federal law and further contend that California's non-judicial foreclosure "scheme" "fail[s] to provide Defendant[s] the same equal protection of law as a historical mortgage defendant." (Doc. 1, 3:5-9, pp. 20-25.)

Removal, however, cannot be based on a defense, counterclaim, cross-claim, or third-party claim raising a federal question, whether filed in state or federal court. See Vaden v. Discover Bank, 556 U.S. 49, 59-60 (2009); Hunter, 582 F.3d at 1042-43; Metro Ford Truck Sales, Inc. v. Ford Motor Co., 145 F.3d 320, 327 (5th Cir. 1998); Preciado v. Ocwen Loan Servicing, No. CV 11-1487 CAS (VBKx), 2011 WL 977819, at *1 (C.D. Cal. Mar. 18, 2011); Fed. Nat'l Mortg. Ass'n. v. Bridgeman, No. 2:10-cv-02619 JAM KJN PS, 2010 WL 5330499, at *4 (E.D.Cal. Dec. 20, 2010) (stay denied NO. 2:10-CV-01457 JAM, 2:10-CV-02619 JAM, 2011 WL 398862, at *1-*2 (E.D. Cal. Feb. 3, 2011). Plaintiff's complaint indicates that the only cause of action is one for unlawful detainer, which arises ...


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