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Ellis v. Wells Fargo Bank, N.A.

United States District Court, S.D. California

February 14, 2014

RICHARD E. ELLIS, et al., Plaintiffs,
WELLS FARGO BANK, N.A., et al., Defendants.


THOMAS J. WHELAN, District Judge.

Pending before the Court is a motion to remand filed by Plaintiffs Richard E. Ellis and Sharie M. Ellis. Plaintiffs seek to remand this case to the San Diego Superior Court. Defendant Wells Fargo Bank, N.A., opposes.

The Court decides the matter on the papers submitted and without oral argument. See Civ.L.R. 7.1(d.1). For the reasons stated below, the Court GRANTS Plaintiffs' motion [Doc. 6].


Plaintiffs reside in La Jolla, California, and are citizens of California. ( Compl. [Doc 1-1], ¶ 6.) Defendant Wells Fargo Bank, N.A. ("Wells Fargo") is a national banking association, with its principal place of business in San Francisco, California and its main office in South Dakota. ( Compl., ¶ 7; Opp. [Doc. 9], 2:2-4.)

In August 2006, Plaintiffs purchased property located at 5448 La Jolla Blvd., Unit F101, La Jolla, CA 92037 (the "Residence"). ( Compl., ¶ 17.) "Plaintiffs executed a series of documents, including but not limited to, a Note and Deed of Trust, securing the Note in the amount of $680, 000 on the Residence." (Id.) Wells Fargo is the original mortgage broker, lender and servicer used to purchase the loan. ( Id., ¶ 7.)

On March 11, 2013, Plaintiffs filed a Complaint against Defendants in the San Diego Superior Court alleging seven state-based causes of action. On June 3, 2013, Wells Fargo removed the lawsuit to this Court based on diversity jurisdiction. Plaintiffs now seek remand on the basis that Wells Fargo is a California citizen since its principal place of business is in San Francisco. Wells Fargo opposes arguing that as a national bank, it is only a citizen of South Dakota, where its main office is located.


An action is removable to federal court only if it might have been brought here originally. See 28 U.S.C. §1441(a). The removal statute is "strictly construe[d]... against removal jurisdiction." Gaus v. Miles, Inc. , 980 F.2d 564, 566 (9th Cir. 1992)(per curiam). "Federal jurisdiction must be rejected if there is any doubt as to the right of removal." Id . "Th[is] strong presumption' against removal jurisdiction means that the defendant always has the burden of establishing that removal is proper." Id.

Diversity jurisdiction exists where the amount in controversy exceeds $75, 000 and the suit is between citizens of different States. 28 U.S.C. §1332(a)(1). For purposes of diversity jurisdiction, corporations are generally considered citizens of the state of incorporation and principal place of business. 28 U.S.C. § 1332(c)(1). However, a national bank's citizenship for purposes of diversity jurisdiction is governed by 28 U.S.C. § 1348. This section provides:

All national banking associations shall, for the purposes of all other actions by or against them, be deemed citizens of the States in which they are receptively located.

28 U.S.C. § 1348. Thus, whether diversity jurisdiction exists in this case depends on if the term "located" includes 28 U.S.C. § 1332(c)(1)'s principal-place-of-business test. If it does, because Wells Fargo's principal place of business is in California, diversity jurisdiction would not exist.

As an initial matter, this Court recognizes that there is considerable disagreement regarding the interpretation of "located" in section 1348. While Wells Fargo argues that most published decisions have interpreted "located" to only include a national bank's main office, there is also a significant number of cases that have interpreted the term to also include a bank's principal place of business.[1] Moreover, there appears to be a growing number of cases in this district that have found the principal-place-of-business test applicable to national banks. See Ortiz v. Wells Fargo Bank, N.A. 2013 U.S. Dist. LEXIS 5661 (2013); Bickoff v. Wells Fargo Bank, N.A., 2013 U.S. Dist. LEXIS 2293 (S.D. Cal. Jan. 4, 2013); Uriarte v. Wells Fargo Bank, N.A. , 2011 U.S. Dist. LEXIS 127497 (S.D. Cal. Nov. 3, 2011); Saberi v. Wells Fargo Home Mortg. , 2011 U.S. Dist. LEXIS 5286 (S.D. Cal. Jan. 20, 2011). Wells Fargo nevertheless argues that under Wachovia Bank v. Schmidt , 546 U.S. 303 (2006), national banks are only citizens of the state in which the main office is located and that Schmidt "rejected" application of the principal-place-of-business test to national banks.

In Schmidt, a national bank filed a diversity action against several South Carolina citizens. After judgment was entered in favor of the defendants, the Court of Appeal evaluated whether diversity jurisdiction existed. The court found that because the bank had a branch office in South Carolina, the bank was "located" in South Carolina and, therefore, was a South Carolina citizen for purposes of diversity. Accordingly, ...

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