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LLC v. Zarnegar

United States District Court, Ninth Circuit

September 3, 2013

THE 704 GROUP, LLC, Plaintiff,
v.
MARINA G. ZARNEGAR AKA MARINA ZARNEGAR; AND DOES 1-10, INCLUSIVE, Defendants.

ORDER GRANTING PETITIONER'S MOTION TO REMAND

MARGARET M. MORROW, District Judge.

Plaintiff, The 704 Group, LLC ("704 Group") filed this action in Los Angeles Superior Court against Marina G. Zarnegar a/k/a Marina Zarnegar and certain fictitious defendants on January 16, 2013.[1] Defendant removed the action to this court on March 7, 2013, invoking the court's federal question jurisdiction.[2] On September 9, 2013, Plaintiff filed a motion to remand the case to state court, asserting that the complaint does not raise a federal question on its face.[3] Defendant opposes the motion.[4]

Pursuant to Rule 78 of the Federal Rules of Civil Procedure and Local Rule 7-15, the court finds the matter appropriate for decision without oral argument and vacates the hearing scheduled for September 9, 2013.

I. FACTUAL BACKGROUND

The 704 Group alleges that Zarnegar became indebted to Chase Bank USA, N.A. ("Chase") within the past four years on an open book account/account stated for money paid to her in the amount of $5, 019.43.[5] Although demand for payment was made, Zarnegar has allegedly failed to pay any portion of the amount owed.[6] Through a lengthy chain of assignments, the 704 Group acquired all right and title to the open book account from Chase.[7] It seeks to recover $5, 019.43 plus interest, as well as its costs of suit.[8]

II. DISCUSSION

A. Legal Standard Regarding Removal Jurisdiction

The right to remove a case to federal court is entirely a creature of statute. See Libhart v. Santa Monica Dairy Co., 592 F.2d 1062, 1064 (9th Cir. 1979). The removal statute, 28 U.S.C. § 1441, provides: "Except as otherwise expressly provided by Act of Congress, 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." 28 U.S.C. § 1441(a). "If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, [however, ] the case shall be remanded." 28 U.S.C. § 1447(c).

A suit may be removed to federal court under § 1441(a) only if it could have been filed there originally. See Franchise Tax Bd. v. Construction Laborers Vacation Trust, 463 U.S. 1, 10 (1983). The Ninth Circuit "strictly construe[s] the removal statute against removal jurisdiction." Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (citing Boggs v. Lewis, 863 F.2d 662, 663 (9th Cir. 1988), and Takeda v. Northwestern Nat'l Life Ins. Co., 765 F.2d 815, 818 (9th Cir. 1985)). Thus, "[f]ederal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance." Id. (citing Libhart, 592 F.2d at 1064). "The strong presumption' against removal jurisdiction means that the defendant always has the burden of establishing that removal is proper." Id. (citing Nishimoto v. Federman-Bachrach & Assocs., 903 F.2d 709, 712 n. 3 (9th Cir. 1990), and Emrich v. Touche Ross & Co., 846 F.2d 1190, 1195 (9th Cir. 1988)). For the reasons discussed below, the court lacks subject matter jurisdiction to hear this action and must remand the case to Los Angeles Superior Court.

B. Federal Question Jurisdiction

1. Legal Standard Governing Federal Question Jurisdiction

Under 28 U.S.C. § 1331, district courts "have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States." Federal question jurisdiction is presumed absent unless defendant, as the party seeking to invoke the court's jurisdiction, shows that plaintiff has either alleged a federal cause of action, American Well Works Co. v. Layne & Bowler Co., 241 U.S. 257, 260 (1916) ("a suit arises under the law that creates the action"), a state cause of action that turns on a substantial dispositive issue of federal law, Franchise Tax Bd., 463 U.S. at 9; Smith v. Kansas City Title & Trust Co., 255 U.S. 180, 199 (1921), or a state cause of action that Congress has transformed into an inherently federal cause of action by completely preempting the field of its subject matter, Avco Corp. v. Aero Lodge No. 735, 390 U.S. 557, 560 (1968); see also Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 65 (1987).

Whether a claim "arises under" federal law must be determined by reference to the "well-pleaded complaint." Franchise Tax Bd., 463 U.S. at 9-10. Since a defendant may remove a case under 28 U.S.C. § 1441(b) only if the claim could have been brought in federal court, the existence of removal jurisdiction must also be determined by reference to the "well-pleaded complaint." Merrell Dow Pharmaceuticals, Inc. v. Thompson, 478 U.S. 804, 808 (1986). The well-pleaded complaint rule makes plaintiff the "master of the claim" for purposes of removal jurisdiction. Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987). Where a plaintiff could assert claims under both federal and state law, therefore, it can prevent removal by ignoring the federal claim and alleging only state law claims. Rains v. Criterion Systems, Inc., 80 F.3d 339, 344 (9th Cir. 1996).

For federal question jurisdiction to attach, "a right or immunity created by the Constitution or laws of the United States must be an element, and an essential one, of the plaintiff's cause of action." Gully v. First Nat'l Bank in Meridian, 299 U.S. 109, 112 (1936). Only where the "right to relief under state law requires resolution of a substantial question of federal law in dispute between the parties" does a state law cause of action "arise under" the laws of the United States. Franchise Tax Bd., 463 U.S. at 13. A claim does not present a "substantial question" of federal law merely because a federal question is an "ingredient" of the cause of action. Indeed, ...


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