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NGA Investment, LLC v. Beronilla

United States District Court, N.D. California, San Jose Division

July 14, 2014

NGA INVESTMENT, LLC, Plaintiff,
v.
REUBEN BERONILLA, MARIA
v.
BERONILLA, and DOES 1-5, inclusive, Defendants.

ORDER THAT CASE BE REASSIGNED TO A DISTRICT JUDGE; ORDER FINDING AS MOOT APPLICATION TO PROCEED IN FORMA PAUPERIS REPORT AND RECOMMENDATION THAT PLAINTIFF'S MOTION FOR REMAND AND SANCTIONS BE GRANTED

HOWARD R. LLOYD, Magistrate Judge.

This is the fourth time defendants Reuben and Maria Beronilla have removed this unlawful detainer action from the Santa Clara County Superior Court, despite prior orders from three different judges telling them that there is no federal question or diversity jurisdiction over this matter.[1] They also seek leave to proceed in forma pauperis (IFP). Plaintiff moves for an order remanding this action to state court, as well as an order imposing sanctions-i.e., a pre-filing order prohibiting defendants from removing this case without first obtaining the court's permission. Defendants have filed a written opposition, maintaining that they "properly removed the action to this Court on the basis of diversity jurisdiction and because the amount in controversy exceeds $75, 000." (Dkt. 8 at 1). The matter was deemed submitted on the papers without oral argument. (Dkt. 7). For the reasons stated below, the undersigned deems the IFP application moot and recommends that plaintiff's motion for remand and for sanctions be granted.

A. Defendants' IFP Application

A court may authorize the commencement of a civil action in forma pauperis ("IFP") if the court is satisfied that the applicant cannot pay the requisite filing fees. 28 U.S.C § 1915(a)(1). In evaluating such an application, the court should "gran[t] or den[y] IFP status based on the applicant's financial resources alone and then independently determin[e] whether to dismiss the complaint on the grounds that it is frivolous." Franklin v. Murphy , 745 F.2d 1221, 1226-27 n.5 (9th Cir. 1984). A court may dismiss a case filed without the payment of the filing fee whenever it determines that the action "(i) is frivolous or malicious; (ii) fails to state a claim on which relief may be granted; or (iii) seeks monetary relief against a defendant who is immune from such relief." 28 U.S.C. § 1915(e)(2)(B)(i)-(iii).

Here, as in previous cases, only Reuben Beronilla filed a financial affidavit. That affidavit is identical to one he filed in an earlier iteration of the Beronillas' removals and which this court found insufficient. (See Case No. 5:14-cv-01840BLF (HRL), Dkt. 2 and 4). The affidavit is ambiguous in that Mr. Beronilla indicates that he currently is employed, but fails to provide his gross and net salary information. (Dkt. 2 at 1). He goes on, however, to suggest that the date of his last employment was October 13, 2013. (Id. at 2). Additionally, while Mr. Beronilla continues to state, under penalty of perjury, that the instant action does not raise claims that have been presented in other lawsuits, this is the fourth time they have removed the same unlawful detainer action here. As this court previously ruled, the undersigned might have, under different circumstances, required Reuben Beronilla to re-submit a complete application and required Maria Beronilla to file a separate financial affidavit. However, defendants' IFP application is deemed moot because, for the reasons discussed below, this court concludes that there is no federal subject matter jurisdiction anyway.

B. Plaintiff's Motion for Remand

Removal to federal court is proper where the federal court would have original subject matter jurisdiction over the complaint. 28 U.S.C. § 1441. The removal statutes are strictly construed against removal and place the burden on the defendant to demonstrate that removal was proper. Moore-Thomas v. Alaska Airlines, Inc. , 553 F.3d 1241, 1244 (9th Cir. 2009) (citing Gaus v. Miles, Inc. , 980 F.2d 564, 566 (9th Cir. 1992)). Additionally, the court has a continuing duty to determine whether it has subject matter jurisdiction. Fed.R.Civ.P. 12(h). A case must be remanded to the state court if it appears at any time before final judgment that the court lacks subject matter jurisdiction. 28 U.S.C. § 1447(c).

As the Beronillas repeatedly have been told:

There is no federal question jurisdiction because the complaint contains no claim arising under federal law. See Vaden v. Discovery Bank , 129 S.Ct. 1262, 1272 (2009) (A claim "arises under" federal law if, based on the "well-pleaded complaint rule, " the plaintiff alleges a federal claim for relief). Allegations in a removal notice or in a response to the complaint cannot provide this court with federal question jurisdiction.

Nor is there any basis for diversity jurisdiction. Federal district courts have jurisdiction over civil actions in which the matter in controversy exceeds the sum or value of $75, 000 (exclusive of interest and costs) and is between citizens of different states. 28 U.S.C. §1332. In their opposition, the Beronillas insist that diversity jurisdiction exists "because the amount in controversy exceeds $75, 000." (Dkt. 8 at 1). However, the undersigned previously pointed out why that cannot be the case: plaintiff's complaint indicates that the amount in controversy does not exceed $10, 000. (See Case No. 5:14-cv-01842 BLF (HRL), Dkt. 4, 7). Moreover, defendants have not established that the amount in controversy exceeds $75, 000-nor is it apparent that they can do so. Unlawful detainer actions involve the right to possession alone, not title to the property. So, the fact that the subject property may be worth more than $75, 000 is irrelevant. MOAB Investment Group, LLC v. Moreno, No. C14-0092EMC, 2014 WL 523092 at *1 (N.D. Cal., Feb. 6, 2014); Maxwell Real Estate Investment LLC v. Bracho, No. C12-02774RMW, 2012 WL 2906762 at *1 (N.D. Cal., July 13, 2012). In any event, the record presented indicates that defendants are California citizens (see Dkt. 1-1, Section III), and they previously have been told that as California defendants, they are prohibited from removing the unlawful detainer action to this court.[2] 28 U.S.C. § 1441(b)(2) (stating that an action may not be removed on the basis of diversity "if any of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought."); Spencer v. U.S. Dist. Ct. , 393 F.3d 867, 870 (9th Cir. 2004) ("It is thus clear that the presence of a local defendant at the time removal is sought bars removal.").

Plaintiff's motion for remand should be granted.

C. Plaintiff's Motion for Sanctions

There being no basis for federal jurisdiction over plaintiff's unlawful detainer action, the continued removal of this case was and is improper. Indeed, the Beronillas were warned that continued attempts to remove this matter may result in sanctions. (See Case No. 5:14-cv-01842BLF, Dkt. 4 and 7).[3] Plaintiff now requests an order imposing sanctions-namely, a pre-filing order prohibiting them from ever removing this action again without a court order authorizing the removal.

"Federal courts have the inherent power to regulate the activities of abusive litigants by imposing carefully tailored restrictions under the appropriate circumstances, '" including the issuance of pre-filing orders. Bridgewater v. Hayes Valley Ltd. Partnership, No. 10-03022 CW, 2011 WL 635268 at *4 (N.D. Cal., Feb. 11, 2011) (quoting DeLong v. Hennessey , 912 F.2d 1144, 1147 (9th Cir.1990)). Pre-filing orders are rarely used and "cannot issue merely upon a showing of litigiousness." Moy v. United States , 906 F.2d 467, 470 (9th Cir. 1990). Nevertheless, "district courts bear an affirmative obligation to ensure that judicial resources are not needlessly squandered on repeated attempts by litigants to misuse the courts.'" Bridgewater, 2011 WL 635268 at *4 (quoting O'Loughlin v. Doe , 920 F.2d 614, 618 (9th Cir.1990)). And, "[f]lagrant abuse of the judicial process cannot be tolerated because it enables one person to preempt the use of judicial time that properly could be used to consider the meritorious claims of other litigants." Molski v. Evergreen Dynasty Corp. , 500 F.3d 1047, 1057 (9th Cir. 2007) (quoting De Long , 912 F.2d at 1148)). In determining whether a pre-filing order should ...


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