U.S. Bank National Association v. Chang

          REMAND ORDER

          Troy L. Nunley United States District Judge.

         This matter is before the Court pursuant to Defendants Daryl C. Chang, Sr. and Cheri D. Chang's (hereafter, “Defendants”) Notice of Removal Under 28 U.S.C. § 1446, filed on May 9, 2019. (ECF No. 1.) Defendants simultaneously filed a motion to proceed in forma pauperis. (ECF No. 2.) For the reasons set forth below, the Court REMANDS this case to the Superior Court of California, County of San Joaquin (ECF No. 1), and GRANTS Defendant's motion to proceed without payment of costs (ECF No. 2).

         I. Factual and Procedural Background

         In May 2018, Plaintiff U.S. Bank National Association, as Trustee for Lehman XS Trust Mortgage Pass-Through Certificates, Series 2006-18N (hereafter, “Plaintiff”), purchased the real property located at 3938 Zeally Lane, Stockton, California, 95206 at a trustee's foreclosure sale. (ECF No. 1 at 15.) Plaintiff served Defendants with a three-day notice to quit the premises in early September 2018. (ECF No. 1 at 22-25.) Plaintiff thereafter filed a Verified Complaint for Unlawful Detainer on September 14, 2018 in the Superior Court of California for the County of San Joaquin (hereafter, “Complaint”), which was assigned the case number STK-CV-LUDRF-2018-11549. (ECF No. 1 at 15-16.)

         Defendants filed the instant notice of removal on May 9, 2019. (ECF No. 1 at 1.) The accompanying Civil Cover Sheet explicitly asserts that the Court's jurisdiction to hear the removed unlawful detainer action rests on diversity jurisdiction. (ECF No. 1 at 30.) Defendants' removal notice also appears to raise the argument that the Court has federal question jurisdiction over the removed action by operation of the Seventh Amendment. (See, e.g., ECF No. 1 at 2.) A short-form application to proceed in forma pauperis accompanied Defendant's notice of removal. (ECF No. 2.)

         II. Standard of Law

         Civil actions originally brought in state court may be removed “to the district court of the United States for the district and division embracing the place where such action is pending, ” so long as “the district courts of the United States have original jurisdiction” over the action. 28 U.S.C. § 1441(a). “Only state-court actions that originally could have been filed in federal court may be removed to federal court by the defendant.” Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987).

         Of course, one category of cases over which the federal district courts have original jurisdiction is that set of cases presenting a federal question “arising under the Constitution, laws, or treaties of the United States.” 28 U.S.C § 1331. “The presence or absence of federal-question jurisdiction is governed by the ‘well-pleaded complaint rule,' which provides that federal jurisdiction exists only when a federal question is presented on the face of the plaintiff's properly pleaded complaint.” Caterpillar Inc., 482 U.S. at 392 (citing Gully v. First Nat'l Bank, 299 U.S. 109, 112-13 (1936)); see also Vaden v. Discover Bank, 556 U.S. 49, 54 (2009) (restating “the established rule that federal-court jurisdiction cannot be invoked on the basis of a defense or counterclaim”). At the same time, federal question jurisdiction can also exist where “a state-law claim necessarily raise[s] a stated federal issue, actually disputed and substantial, which a federal forum may entertain without disturbing any congressionally approved balance of federal and state judicial responsibilities.” Grable & Sons Metal Prods., Inc. v. Darue Eng'g & Mfg., 545 U.S. 308, 314 (2005).

         Another category of cases over which the federal district courts have original jurisdiction is that set of cases where (i) the matter in controversy exceeds $75, 000 exclusive of interest and costs, and (ii) the controversy is between citizens of different states. 28 U.S.C. § 1332(a). Where it is “not facially evident from the complaint that more than $75, 000” is in controversy, a defendant seeking to invoke a district court's diversity jurisdiction is required to prove by a preponderance of the evidence that the amount in controversy meets that jurisdictional threshold. Valdez v. Allstate Ins. Co., 372 F.3d 1115, 1117 (9th Cir. 2004) (quoting Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003) (per curiam)).

         Finally, “[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded.” 28 U.S.C. § 1447(c). “Removal statutes are to be ‘strictly construed' against removal jurisdiction.” Nevada v. Bank of Am. Corp., 672 F.3d 661, 667 (9th Cir. 2012) (quoting Syngenta Crop Prot., Inc. v. Henson, 537 U.S. 28, 32 (2002)). Indeed, district courts strictly construe the removal statutes against removal jurisdiction because “[f]ederal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (per curiam) (citing Libhart v. Santa Monica Dairy Co., 592 F.2d 1062, 1064 (9th Cir. 1979)). “[T]he defendant always has the burden of establishing that removal is proper.” Id. (citing Nishimoto v. Federman-Bachrach & Assocs., 903 F.2d 709, 712 n.3 (9th Cir. 1990); Emrich v. Touche Ross & Co., 846 F.2d 1190, 1195 (9th Cir. 1988)).

         III. Analysis

         A. Federal Question Jurisdiction

         i. Well-Pleaded Complaint Rule

         Pursuant to the well-pleaded complaint rule, the Court must look to the face of the Complaint in order to determine whether it presents a federal question that would establish the Court's subject-matter jurisdiction. Caterpillar Inc., 482 U.S. at 392. The right to relief relied upon in the Complaint arises under section 1161a of California's Code of Civil Procedure. (ECF No. 1 at 15.) That section of state law provides that after certain approved sales of real property have been duly perfected, “a person who holds over and continues in possession of . . . real property after a three-day written notice to quit the property has been served upon the person . . . may be removed therefrom.” Cal. Civ. Proc. Code § ...