United States District Court, N.D. California
GREGG S. WALSH, et al., Plaintiffs,
PROBIOTIC SODA, LLC, et al., Defendants.
ORDER FOR REASSIGNMENT TO A DISTRICT COURT JUDGE
ORDER GRANTING IFP APPLICATION REPORT AND RECOMMENDATION RE
REMAND TO STATE COURT
R. LLOYD United States Magistrate Judge
Kelly Elley (“Elley”) removed this unlawful
detainer action from the Santa Cruz County Superior Court.
Dkt. No. 1. Elley also seeks leave to proceed in forma
pauperis (IFP). Dkt. No. 2. Additionally, Plaintiffs Greg
Walsh and Lori Walsh moved to remand this case to state
court, and Elley did not oppose this motion. Dkt. Nos. 5, 17.
As this matter is suitable for determination without oral
argument, the undersigned vacates the hearing on the motion
for remand. Civil L.R. 7-1(b). For the reasons stated below,
the undersigned grants the IFP application, but nonetheless
recommends that this matter be remanded to the state court
for lack of federal subject matter jurisdiction.
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). Elley qualifies
financially for IFP status, and the IFP application therefore
is granted. Even so, Elley may not proceed in this court
because there is no federal subject matter jurisdiction over
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 is 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 the final judgment that the court lacks subject matter
jurisdiction. 28 U.S.C. § 1447(c).
fails to show that removal is proper based on any federal
law. Federal courts have original jurisdiction over civil
actions “arising under the Constitution, laws, or
treaties of the United States.” 28 U.S.C. § 1331.
A claim “arises under” federal law if, based on
the “well-pleaded complaint rule, ” the plaintiff
alleges a federal claim for relief. Vaden v. Discovery
Bank, 129 S.Ct. 1262, 1272 (2009). Defenses and
counterclaims asserting a federal question do not satisfy
this requirement. Id. Here, Plaintiffs'
complaint presents a claim arising only under state law. It
does not allege any federal claims whatsoever. Allegations in
a removal notice or in a response to the complaint cannot
provide this court with federal question jurisdiction.
contends that Plaintiffs have artfully plead their unlawful
detainer claim to avoid stating a federal claim for relief
under the Protecting Tenants at Foreclosure Act of 2009
(“PTFA”). “[U]nder the artful pleading
rule, ‘a plaintiff may not defeat removal by omitting
to plead necessary federal questions in a
complaint.'” Arco Environmental Remediation,
LLC v. Dep't of Health & Environmental Quality of the
State of Montana, 213 F.3d 1108, 1114 (9th Cir. 2000)
(quoting Franchise Tax Bd. of California v. Construction
Laborers Vacation Trust for S. California, 463 U.S. 1,
22, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983)). Thus, a state law
claim for relief may be deemed to arise under federal law
where (1) federal law completely preempts state law; (2) the
claim is necessarily federal in character; or (3) the right
to relief depends on the resolution of a substantial,
disputed federal question. Id. The artful pleading
rule is, however, limited in scope, “for it is
‘long-settled . . . that the mere presence of a federal
issue in a state cause of action does not automatically
confer federal-question jurisdiction.'” Wise v.
Suntrust Mortgage, Inc., No. C11-01360LHK, 2011 WL
1466153 *2 (N.D. Cal., Apr. 18, 2011) (quoting Merrell
Dow Pharmaceuticals, Inc. v. Thompson, 478 U.S. 804,
813, 106 S.Ct. 3229, 92 L.Ed.2d 650 (1986)). Moreover,
“the ‘mere need to apply federal law in a
state-law claim' does not ‘suffice to open the
arising under door' to federal jurisdiction.”
Id. (quoting Grable & Sons Metal Products,
Inc. v. Darue Eng'g & Mfg., 545 U.S. 308, 313,
125 S.Ct. 2363, 162 L.Ed.2d 257 (2005)).
unlawful detainer claim is one of state law; nothing about it
is federal in nature. And there is no basis for complete
preemption here. “Preempted state law claims may be
removed to federal court only in the rare instances where
Congress has chosen to regulate the entire field.”
Arco Environmental Remediation, LLC, 213 F.3d at
1114. “Complete preemption, however, arises only in
‘extraordinary' situations. The test is whether
Congress clearly manifested an intent to convert state law
claims into federal question claims.” Ansley v.
Ameriquest Mortgage Co., 340 F.3d 858, 862 (9th
Cir.2003) (citations omitted). The PTFA is not a recognized
area of complete preemption, and this doctrine will not
justify removal. BDA Investment Props. LLC v. Sosa,
No. CV 11-03684 GAF (RZx), 2011 WL 1810634, at *2 (C.D. Cal.
May 12, 2011).
there a substantial federal question that would give rise to
jurisdiction. Defendant suggests that Plaintiffs were
required to have stated a claim under the PTFA in order to
carry out an eviction. Dkt. No. 1. Defendant further argues
that Plaintiffs did not comply with the PTFA by failing to
give 90-days' notice and unlawfully seeking to evict
“a bona fide residential tenant of a foreclosed
landlord.” Id. However, courts have held that
the PTFA's 90-day notice requirement is a defense to
defeat an unlawful detainer action. Wells Fargo Bank v.
Lapeen, No. C11-01932 LB, 2011 WL 2194117 at *4-5 (N.D.
Cal., June 6, 2011) (citations omitted). As discussed above,
a federal defense does not give rise to federal question
jurisdiction. In any event, the PTFA cannot raise a
substantial federal question because it does not create a
private right of action. Wells Fargo Bank v. Lapeen,
No. C 11-01932 LB, 2011 WL 2194117 (N.D. Cal. June 6, 2011)
(concluding, in a similar circumstance, that the PTFA does
not create a federal claim allowing evictions); BDA
Investment Props. LLC v. Sosa, No. CV 11-03684 GAF
(RZx), 2011 WL 1810634, at *2 (C.D. Cal. May 12, 2011);
Perez v. Nidek Co. Ltd., 657 F.Supp.2d 1156, 1161
(S.D. Cal. 2009) (“When there is no private right of
action under a federal statute . . ., ‘the presence of
a claimed violation of the statute as an element of a state
cause of action is insufficiently ‘substantial' to
confer federal-question jurisdiction.”) (quoting
Merrell Dow Pharmaceuticals Inc. v. Thompson, 478
U.S. 804, 815 (1986)).
the PTFA does not provide a basis for federal question
jurisdiction because it expired December 31, 2014, and the
events at issue in this action occurred long after that date.
Thawani v. Robertson, No. 16-cv-03732-JCS, 2016 WL
4472986, *1-2 (N.D. Cal. July 18, 2016) (“[E]ven if the
PTFA had once provided a basis for removal-which it did
not-it would be of no use to [plaintiff] here.”).
the notice of removal does not assert that the court has
jurisdiction on the basis of diversity of citizenship, the
court nevertheless addresses this issue. 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. Defendant fails to
identify the citizenship of each party. But this is of no
import, since the complaint indicates that the amount in
controversy does not exceed $25, 000. Moreover, 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).
being no basis for federal jurisdiction over Plaintiffs'
unlawful detainer action, the removal of this case was
improper. If a case is improperly removed, the court may
award Plaintiffs costs and fees incurred as a result of the
removal. 28 U.S.C. § 1447(c). Such an award may be
appropriate where the removing party had no objective basis
for removal and acted “for the purpose of prolonging
litigation and imposing costs on the opposing party.”
Martin v. Franklin Capital Corp., 542 U.S. 132,
removal here was objectively unreasonable. Elley, however, is
indigent and unrepresented, and there is no indication that
this removal attempt is part of a pattern of improper delay.
The undersigned thus recommends that the court decline to
require Elley to pay Plaintiffs' attorney fees. Elley is
advised that future attempts to remove this matter may result
Elley has yet to consent to the undersigned's
jurisdiction, this court ORDERS the Clerk of the Court to
reassign this case to a District Judge. The undersigned
further RECOMMENDS that the newly assigned judge remand the
case to the Santa Clara County Superior Court. Any party may
serve and file ...