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LA WAVE, LLC v. 55 Trading Corp.

United States District Court, C.D. California

June 19, 2017

LA WAVE, LLC, Plaintiff,
v.
55 TRADING CORP.; YU KIM, Defendants.

         ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S EX PARTE APPLICATIONS

         OTIS D. WRIGHT, II UNITED STATES DISTRICT JUDGE.

         I. INTRODUCTION

         Before the Court are Plaintiff LA Wave, LLC's unopposed ex parte applications to remand and for Federal Rule of Civil Procedure 11 sanctions in two related unlawful detainer actions. (ECF Nos. 9 (in case ending with 4173), 10 (case ending in 4151).) For the following reasons, the Court GRANTS in PART and DENIES in PART Plaintiff's applications.

         II. FACTUAL BACKGROUND

         Plaintiff initiated these unlawful detainer actions in the California Superior Court on November 22, 2016, after Defendants 55 Trading Corporation and Yu Kim failed to make certain rental payments under two separate lease agreements for commercial property located on South La Brea Avenue in Los Angeles.[1] (See generally Compl., ECF No. 2-1.)[2] Defendants admit they received notice of the actions on November 28, 2016. (Not. of Rem. ¶ 2, ECF No. 2.)

         III. DEFENDANTS REMOVED THE ACTIONS TO FEDERAL COURT ON JUNE 5, 2017, CLAIMING FEDERAL QUESTION JURISDICTION PURSUANT TO 28 U.S.C. § 1331. (ID. ¶ 3.) ON JUNE 9, 2017, PLAINTIFF NOTIFIED DEFENDANTS' COUNSEL OF ITS INTENT TO FILE THE INSTANT EX PARTE APPLICATIONS FOR REMAND AND SANCTIONS. (HEANEY DECL. ¶ 9.) ON JUNE 15, 2017, PLAINTIFF FILED THE PENDING APPLICATIONS, ARGUING THAT DEFENDANTS FRIVOLOUSLY REMOVED THESE ACTIONS TO FEDERAL COURT. (APPL. 5-7, ECF NO. 10.) PLAINTIFF ALSO SEEKS RULE 11 SANCTIONS IN THE FORM OF ATTORNEYS' FEES AND COSTS ASSOCIATED WITH THESE “FRIVOLOUS” REMOVALS. (ID. AT 8.) DEFENDANTS' OPPOSITION TO THE APPLICATIONS WAS DUE ON JUNE 16, 2017, BUT NONE WAS FILED. (SEE COURT'S STANDING ORDER (PROVIDING THAT ANY OPPOSITION TO AN EX PARTE APPLICATION MUST BE FILED WITHIN TWENTY-FOUR HOURS) LEGAL STANDARD

         A civil action may be removed from state court if the district court would have had original jurisdiction over the action. 28 U.S.C. § 1441(a). District courts strictly construe removal statutes against federal 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 showing that it has complied with the procedural requirements for removal. Peace v. Estate of Sorensen, No. CV08-2880-CAS(PLAX), 2008 WL 2676367, at *1-2 (C.D. Cal. June 30, 2008).

         IV. DISCUSSION

         A. No Basis for Federal Subject Matter Jurisdiction

         Defendants assert that these cases arise under the Constitution, laws, or treaties of the United States. (Not. of Rem. ¶ 3.) Specifically, Defendants assert that these cases arise under “U.S.C.§362” and/or “15 U.S.C. §1667.” (Id.)

         The Court examines each of the two statutes in turn. First, as Plaintiff points out in its application, “U.S.C.§362” is an incomplete citation. (Appl. 7.) However, it is fair to assume that “U.S.C.§362” references 11 U.S.C. § 362, the statute governing bankruptcy stays, as Defendants were recently involved in bankruptcy proceedings. (Id.) Even assuming that this is the case, § 362 cannot serve as the basis for federal question jurisdiction. To begin, defenses may not serve as a basis for federal jurisdiction. Caterpillar Inc. v. Williams, 482 U.S. 386, 393 (1987) (“[I]t is now settled law that a case may not be removed to federal court on the basis of a federal defense, including the defense of pre-emption, even if the defense is anticipated in the plaintiff's complaint.” (emphasis in original)). Further, to the extent that Defendants intend to seek a stay pursuant to § 362, this Court would not have jurisdiction to enforce it. Swartz v. Nationstar Mortg., LLC, No. CV 14-08649 BRO JCX, 2015 WL 846789, at *8 (C.D. Cal. Feb. 26, 2015) (collecting cases for the general proposition that district courts do not have jurisdiction over issues related to bankruptcy stays); Minichino v. Piilani Homeowners Ass'n, No. CV 16-00461 DKW-RLP, 2016 WL 7093431, at *5 (D. Haw. Dec. 2, 2016) (same); C.D. Cal. General Order 13-05 (noting that all matters relating to Title 11 of the United States Code are to be addressed in bankruptcy court and that district court involvement in bankruptcy matters is limited to bankruptcy court appeals).

         Second, 15 U.S.C. § 1667 is a definitional statute, not a cause of action. Merely because § 1667 provides definitions of the terms “consumer lease, ” “lessee, ” and “lessor, ” which bear some tangential relationship to the subject matter at issue here, does not mean this statute provides a basis for federal question jurisdiction.

         At the end of the day, these are two simple unlawful detainer actions. Such actions are not appropriate for federal court. Wescom Credit Union v. Dudley, No. CV 10-8203 GAF SSX, 2010 WL 4916578, at *2 (C.D. Cal. Nov. 22, 2010) (“An unlawful detainer action does not arise under federal law.”); Indymac Federal Bank, F.S.B. v. Ocampo, No. 09-2337, 2010 WL 234828, *2 (C.D. Cal. Jan.13, 2010) (finding no subject matter jurisdiction where sole claim was for unlawful detainer). Thus, Defendants have failed to meet their burden and these actions must be remanded for lack of subject matter jurisdiction.

         B. ...


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