Sheffield Financial v. Robinson

          FINDINGS AND RECOMMENDATIONS AND ORDER STAYING THE CASE

          KENDALL J. NEWMAN UNITED STATES MAGISTRATE JUDGE

         Presently before the court is defendant Cameron Robinson's^[1] motion to dismiss. (ECF No. 5.) In opposition, plaintiff Sheffield Financial argues that the case should be remanded to state court.^[2] (ECF No. 7.) The undersigned recommends remanding this matter, and therefore denying defendant's motion to dismiss (ECF No. 5) and motion to proceed in forma pauperis (ECF No. 2) as moot.

         BACKGROUND

         Plaintiff, Sheffield Financial, filed this action in the Superior Court of California for the County of Stanislaus, alleging breach of contract and conversion as a result of defendant defaulting on a trailer loan in the amount of $9, 041.94. (ECF No. 1 at 4-6.) Defendant removed this action on November 25, 2019, and filed a motion to dismiss the same day. (ECF Nos. 1, 3.) Defendant filed a second motion to dismiss after the court directed defendant to properly schedule his hearing.^[3] (ECF No. 5.)

         Defendant's motion to dismiss alleges that the contract attached to plaintiff's complaint is a forgery, and as a result plaintiff's complaint should be dismissed in its entirety. (ECF No. 6 at 1-2.)

         Plaintiff's opposition argues that the court lacks subject matter jurisdiction, and therefore the case should be remanded to state court. (ECF No. 7.) In the alternative, plaintiff argues defendant's motion should be denied because it is deficient on its face. (Id.) Plaintiff also requests attorneys' fees. (Id.)

         DISCUSSION

         Subject Matter Jurisdiction and Removal

         Plaintiff is correct that the court lacks subject matter jurisdiction over this case, necessitating remand.

         Federal courts derive their subject matter jurisdiction from 28 U.S.C. §§ 1331 and 1332. Section 1331 provides for federal-question jurisdiction, and Section 1332 for diversity jurisdiction. Because it is unclear which bases defendant is asserting in his removal, the court briefly discusses both.

         Federal courts are courts of limited jurisdiction and are obligated to consider sua sponte whether they have subject matter jurisdiction. Allstate Ins. Co. v. Hughes, 358 F.3d 1089, 1093 (9th Cir.2004). Even if the district court lacks jurisdiction, appellate courts have jurisdiction to correct the error. Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003)

         Federal-question jurisdiction exists when a federal question is presented on the face of the plaintiff's complaint. ARCO Envtl. Remediation, L.L.C. v. Dep't of Health & Envtl. Quality of Montana, 213 F.3d 1108, 1113 (9th Cir. 2000). Thus, federal jurisdiction cannot be derived from anticipated affirmative defenses. Effects Assocs., Inc. v. Cohen, 817 F.2d 72, 73 (9th Cir. 1987).

         “For a federal court to exercise diversity jurisdiction under § 1332(a), the amount in controversy must exceed $75, 000, and the parties must be citizens of different states.” Corral v. Select Portfolio Servicing, Inc., 878 F.3d 770, 774 (9th Cir. 2017). Defendants seeking removal must prove by a preponderance of the evidence that these jurisdictional requirements are met. Valdez v. Allstate Ins. Co., 372 F.3d 1115, 1117 (9th Cir. 2004).

         The removal statute is strictly construed against removal jurisdiction. Syngenta Crop Prot., Inc. v. Henson, 537 U.S. 28, 32 (2002); California ex rel. Lockyer v. Dynegy, Inc., 375 F.3d 831, 838 (9th Cir.2004). The ...