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Brown v. Citibank USA, N.A.

United States District Court, Central District of California

November 7, 2014

MICHAEL BROWN ET AL.
v.
CITIBANK USA, N.A. ET AL.

(IN CHAMBERS); PLAINTIFFS’ MOTION TO REMAND (Dkt.9, filed October 13, 2014)

Honorable CHRISTINA A. SNYDER

The Court finds this motion appropriate for decision without oral argument. Fed.R.Civ.P. 78; Local Rule 7–15. Accordingly, the hearing currently scheduled for November 10, 2014 is hereby vacated, and the matter is taken under submission.

I. INTRODUCTION & BACKGROUND

On July 8, 2014, plaintiff Michael Brown, joined by 71 individuals, filed a complaint in the Los Angeles County Superior Court alleging the following state law claims against defendants Citibank and Citimortgage: (1) Fraud; (2) Conspiracy to Commit Fraud; (3) Conversion; (4) Conspiracy to Convert; (5) Violation of Rosenthal Fair Debt Collection Practices Act, Cal. Civ. Code § 1788, et seq.; (6) Unfair Business Practices, Cal. Bus. & Prof. Code §17200, et seq.; and (7) Unjust Enrichment. Dkt. 1. In brief, plaintiffs allege that defendants are acting as servicers of their residential mortgages absent any authority to do so.

The complaint explains that defendants and other lenders securitize residential mortgages, including plaintiffs’ mortgages, and pool them together to be sold as residential mortgage-backed securities (“RMBSs”). In turn, these RMBSs are subject to a series of tax laws pursuant to the Real Estate Mortgage Investments Conduit Act (“REMIC”), as well as the terms of contracts known as pooling services agreements (“PSAs”). However, plaintiffs assert that they are not challenging the right of defendants to securitize their loans; rather, they assert that defendants violated the terms of the relevant PSAs and state recording laws. As a result of these violations, plaintiffs allege that defendants are not the true holders of plaintiffs’ mortgages and thus have no right to collect mortgage payments from plaintiffs.

On October 3, 2014, defendants removed the action to this Court pursuant to 28 U.S.C. §§1331 and 1332. Dkt. 1. In the notice of removal, defendants assert that the Court has subject matter jurisdiction over this action because it involves a dispute among parties of diverse citizenship, as well as an alleged amount in controversy exceeding $75, 000. Id. Alternatively, defendants contend that the Court has jurisdiction because the complaint raises a federal question. Id. On October 13, 2014, plaintiffs filed a motion to remand, as well as a request for attorney’s fees incurred in bringing this motion. Dkt. 9. Defendants opposed the motion on October 20, 2014, dkt. 15, and plaintiffs replied on October 27, 2014, dkt. 17. Having carefully considered the parties’ arguments, the Court finds and concludes as follows.

II. LEGAL STANDARD

A motion for remand is the proper procedure for challenging removal. Remand may be ordered either for lack of subject matter jurisdiction or for any defect in removal procedure. See 28 U.S.C. § 1447(c). The Court strictly construes the removal statutes against removal jurisdiction, and jurisdiction must be rejected if there is any doubt as to the right of removal. See Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). The party seeking removal bears the burden of establishing federal jurisdiction. See Prize Frize, Inc. v. Matrix, Inc., 167 F.3d 1261, 1265 (9th Cir. 1999). The defendant also has the burden of showing that it has complied with the procedural requirements for removal. Judge William W. Schwarzer, et al., California Practice Guide: Federal Civil Procedure Before Trial § 2:609 (The Rutter Group 2007).

Under 28 U.S.C. § 1446(b), the defendant must file the notice of removal within 30 days after being served with a complaint alleging a basis for removal. When there are multiple defendants, all defendants named in the complaint and who have been properly joined and served in the action must also join in the removal. Hewitt v. City of Stanton, 798 F.2d 1230, 1232 (9th Cir. 1986). This is known as the rule of unanimity. See Chicago, Rock Island & Pac. Ry. v. Martin, 178 U.S. 245, 20 S.Ct. 854 (1900); see also Schwarzer, supra, § 2:905.2.

If the defendant's removal notice fails to meet the procedural requirements of § 1446(b), the court may remand the action based on the plaintiff's timely motion. McAnally Enters., Inc. v. McAnally, 107 F.Supp.2d 1223, 1226 (C.D. Cal. 2000). Pursuant to 28 U.S.C. § 1447(c), a motion to remand based on any defect other than subject matter jurisdiction must be made within 30 days after the filing of the notice of removal.

III. DISCUSSION

A. Diversity Jurisdiction

Federal jurisdiction founded on diversity requires the existence of complete diversity of citizenship between the parties and an amount in controversy exceeding $75, 000. Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003); see 28 U.S.C. § 1332(a)(1).

Plaintiffs argue that diversity jurisdiction is lacking because the complaint clearly alleges that the total monetary relief sought by each of the seventy-two plaintiffs is less than $75, 000. See Mot. Remand. Specifically, plaintiffs argue that each claim arises out of a different mortgage and are therefore “separate and distinct” claims which cannot be aggregated for purposes of satisfying the amount in controversy requirement. Plaintiffs identify several ...


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