Federal National Mortgage Association v. Jesus Mendoza et al

Filing 9

MINUTES OF PLAINTIFF'S MOTION FOR ORDER REMANDING CASE TO STATE COURT; REQUEST FOR SANCTIONS AGAINST DEFENDANT SALVADOR VASQEZ (filed 05/04/12) by Judge George H Wu. Plaintiffs' motion to remand is GRANTED. The request for sanctions is DENIED. The above-entitled action is remanded to the Los Angeles County Superior Court for the State of California (12U00126). Made JS-6 (bp) . Court Reporter: Wil Wilcox

REMAND/MADE JS-6

. UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

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CIVIL MINUTES- GENERAL
Case No.

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n~!~:;:l June ___:._2012
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CV 12-2947-GW(AJWx)

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Javier Gonzalez

Court Reporter I Recorder

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Wil Wilcox

Deputy Clerk

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Tape No.

Attorneys Present for Plaintiffs:

. Attorneys Present for Defendants:

Valerie Lynn Hanna

None Present

PROCEEDINGS:

PLAINTIFF'S MOTION FOR ORDER REMANDING CASE TO
STATE COURT; REQUEST FOR SANCTIONS AGAINST
DEFENDANT SALVADOR VASQUEZ (filed 05/04/12)

Defendant Jesus Mendoza, prose, is not present. The Tentative circulated and attached hereto, is
adopted as the Court's finalruling. Plaintiffs' motion to remand is GRANTED. The request for
sanctions is DENIED. The above-entitled action is remanded to the Los Angeles County Superior
Court for the State of California (12U00126).

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Initials ofPreparer
CV-90 (06/04)

CIVIL MINUTES- GENERAL

JG
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Fed. Nat'l Mortg. Ass'n v. Mendoza, et al., Case No. CV-12-2947
Tentative Ruling on Motion for Order Remanding Case to State Court; Request for
Sanctions Against Defendant Salvador Vasquez

Defendant Salvador Vasquez ("Defendant") removed an unlawful detainer action
from state court to this Court, in pro per, asserting that this Court has federal question
jurisdiction over this action because of the effect of the Protecting Tenants at Foreclosure
Act ("PTF A"). Plaintiff Federal National Mortgage Association ("Fannie Mae") moves
to remand this action, arguing that the Court lacks subject matter jurisdiction and that
Defendant's removal was untimely. Fannie Mae also seeks an award of attorney's fees.
The Court will grant the motion to remand both because 1) Fannie Mae timely challenged
the untimeliness of the removal and Defendant has not demonstrated any error in that
argument and 2) Defendant has not demonstrated that the Court has subject matter
jurisdiction over this case. However, the Court will decline to award attorney's fees.
Fannie Mae asserts that it served the Complaint in this matter on January 27,
2012. See Docket No.7, at 5:10-11. Defendant's notice of removal states only that
Defendant effected removal within 30 days of"discovering" that this case was ripe for
removal. Notice of Removal~ 15. Yet, there was nothing that changed about this case
from the time it was first filed and (apparently 1) served upon Defendant. Thus, if what
Defendant means is that he removed the case within 30 days of realizing that the case
was removable, that assertion would not matter. The 30-day period runs from when he
should have been aware, from the face of the Complaint, that the case was removable.
See 28 U.S.C. § 1446(b). Defendant asserts it is removable because of the effect of the
PTFA, which would have been applicable, if at all, from the onset of the case.
Defendant asserts in his Notice of Removal- he has not opposed this motion, 2 so
1

Fannie Mae has not actually evidenced its January 27, 2012, service of the Complaint upon Defendant.
However, it has asserted such a service date in its moving papers, Defendant has not responded, and
Defendant's attempted compliance with the requirement that he allege that his removal was timely was
itself deficient because he did not actually attempt to state when he was served with the Complaint. That is
itself a procedural defect. In any event, because this Court lacks subject matter jurisdiction, even in the
absence of the procedural defect discussed herein, the case would be remanded.
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See C.D. Cal. L.R. 7-12 ("The failure to file any required paper, or the failure to file it within the deadline,
may be deemed consent to the granting or denial of the motion.").

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he offers no argument- that Fannie Mae has actually filed a "Federal Question action"
because of the PTF A and that the PTFA preempts state law with respect to the eviction of
residential tenants of foreclosed landlords. See Notice ofRemoval ~~5-6. Thus,
Defendant contends that Fannie Mae artfully pled its unlawful detainer claim and should
have instead filed a federal claim for "ejectment." See id.

~~

10, 14. Defendant also

argues that Fannie Mae's unlawful detainer claim "necessarily depends on resolution of a
substantial question of Federal law" and fits within the exception recognizing federal
jurisdiction over a state law claim the Supreme Court enunciated in Grable & Sons Metal
Prods., Inc. v. Darue Eng'g & Mfg., 545 U.S. 308, reh'g denied, 545 U.S. 1158 (2005). 3
See Notice of Removal~~ 8-9.

The Complaint, on its face (to which a federal court is ordinarily limited in
assessing the existence of subject matter jurisdiction), clearly does not state a federal
claim for "ejectment." To the extent Defendant believes the PTFA preempts Fannie
Mae's state law unlawful detainer claim, "[o]rdinary" preemption by federal law is not a
basis for finding federal jurisdiction over a case that has been removed from state to
federal court. Only complete preemption serves that purpose. See, e.g., Moore- Thomas
v. Alaska Airlines, Inc., 553 F.3d 1241, 1243-45 (9th Cir. 2009); Valles v. Ivy Hill Corp.,

410 F.3d 1071, 1075 (9th Cir. 2005). The Court has found no case within the Ninth
Circuit(nor any court of appeals decision outside the Ninth Circuit) that has concluded
that the PTFA completely preempts any state's unlawful detainer procedure. A number
of cases have specifically rejected that contention. See, e.g., Fed. Nat 'l Mortg. Ass 'n v.
Watkins, No. CV-12-577-PHX-GMS, 2012 U.S. Dist. LEXIS 38800, *3-4 (D. Ariz. Mar.

22, 2012); Aurora Loan Servs. LLC v. Torres, No. 5:11-CV-03061-EJD, 2011 U.S. Dist.
LEXIS 112917, *3 (N.D. Cal. Sept. 30, 2011); PNC Bank, Nat'/ Ass 'n v. Branch, No. CV
11-596-PHX-JAT, 2011 U.S. Dist. LEXIS 80441, *2 (D. Ariz. July 22, 2011); Fed. Nat'/
Mortg. Ass'n v. Hammond, No. CV 11-00867 GAF (OPx), 2011 U.S. Dist. LEXIS 67321,

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To the extent Defendant asserts that he has a private right of action under the PTFA (and that assertion is
made outside the context ofhis attempted Grable showing), see Notice ofRemoval ~~ 11-12,
counterclaims (like defenses, which Defendant emphasizes he is not raising as a basis for subject matter
jurisdiction here, see id ~ 13) cannot serve as the basis for subject matter jurisdiction in the absence of a
basis for subject matter jurisdiction in the Complaint itself. See Holmes Group, Inc. v. Varnado Air
Circulation Sys., Inc., 535 U.S. 826, 830-32 (2002); Takeda v. Northwestern Nat'! Life Ins. Co., 765 F.2d
815, 822 (9th Cir. 1985).

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*4-6 (C.D. Cal. June 22, 2011); BDA Inv. Props. LLC v. Sosa, No. CV 11-03684 GAF
(RZx), 2011 U.S. Dist. LEXIS 54524, *4-5 (C.D. Cal. May 12, 2011). This Court
likewise reaches that same conclusion.
The Court similarly has found no case recognizing the PTFA as giving rise to
federal jurisdiction under Grable's discussion for how such jurisdiction might come
about or any case concluding that an unlawful detainer claim necessarily depends upon
the resolution of a substantial question of federal law under the PTFA . See Grable, 5455
U.S. at 314 (" [T]he question is, does a state-law claim necessarily raise 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."); see also Hammond, 2011 U.S. Dist. LEXIS 67321, at *6-7; BDA Inv.,
2011 U.S. Dist. LEXIS 54524, at *5-7 (citing Grable and rejecting federal jurisdiction
because of lack of private right of action under PTFA); US. Nat'/ BankAss'n v. Garcia,
No. CV 09-8501 AHM (CTx), 2009 U.S. Dist. LEXIS 112825, *2-3 (C.D. Cal. Nov. 20,
2009) (rejecting Grable as a basis for federal jurisdiction simply because of complaint's
reference to PTFA). This Court will not be the first to do so.
Notwithstanding the above conclusions that subject matter jurisdiction is lacking
and that Defendant's removal was procedurally defective, the Court will not award any
attorney's fees in connection with this motion. 28 U.S.C. § 1447(c) provides that "[a]n
order remanding the case may require payment of just costs and any actual expenses,
including attorney fees, incurred as a result of the removal." "[T]he standard for
awarding fees [under section 1447(c)] should tum on the reasonableness of the removal."

Martin v. Franklin Capital Corp., 546 U.S. 132, 141 (2005). Unless there are special
circumstances, "courts may award attorney's fees under§ 1447(c) only where the
removing party lacked an objectively reasonable basis for seeking removal." !d. This
does not equate to awarding fees whenever a removing party loses on a motion to
remand. See Lussier v. Dollar Tree Stores, Inc., 518 F.3d 1062, 1065 (9th Cir. 2008).
When determining whether special circumstances apply, "[t]he appropriate test for
awarding fees under§ 1447(c) should recognize the desire to deter removals sought for
the purpose of prolonging litigation and imposing costs on the opposing party, while not
undermining Congress' basic decision to afford defendants a right to remove as a general

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matter, when the statutory criteria are satisfied." Martin, 546 U.S. at 140.
First, although this Court believes - along with a number of other District Courts
-that the PTFA does not give rise to federal jurisdiction in the manner Defendant argues,
Defendant's assertion has not yet been addressed by any authoritative decision in this
Circuit. The lack of controlling authority on point would make it difficult for the Court
to conclude that Defendant could not have had an "objectively reasonable basis" for
removal. Martin, 546 U.S. at 141.
In addition, Defendant may have had a different basis to remove the case. Some
federal courts have concluded that there is federal subject matter jurisdiction over any
case in which Fannie Mae is a party. See Pirelli Armstrong Tire Corp. Retiree Med

Benefits Trust ex rel. Fed Nat'! Mortg. Ass'n v. Raines, 534 F.3d 779,784-88 (D.C. Cir.
2008); Perpetual Building & Loan Ass 'n v. Series Directors of Equitable Building &

Loan Ass 'n, 217 F.2d 1, 6 (4th Cir. 1954). But see, e.g., Rincon del Sol, LLC v. Lloyd's of
London, 709 F.Supp.2d 517, 522-25 (S.D. Tex. 2010). In fact, in at least some cases,
Fannie Mae itselfhas argued that federal jurisdiction exists for reasons addressed by the

Pirelli court. See, e.g., Knuckles v. RBMG, Inc., 481 F.Supp.2d 559, 562-65 (S.D. W.
Va. 2007); Rodriguez v. Fed Nat'! Mortg. Ass'n, 268 F.Supp.2d 87, 87-89 (D. Mass.
2003). The courts are split on this issue, but rulings confronting and deciding it in this
District have concluded that Fannie Mae's presence in an action does not automatically
create federal jurisdiction. See Fed Nat 'l Mortg. Ass 'n v. Hammond, No. CV 11-00867
GAP (OPx), 2011 U.S. Dist. LEXIS 67321, *8-9 (C.D. Cal. June 22, 2011); Fed Nat'!

Mortg. Ass'n v. De-Savineau, No. EDCV 10-01106,2010 U.S. Dist. LEXIS 97099, *2-3
(C.D. Cal. Aug. 25, 2010).
Finally, even if the Court would conclude that the procedural defect in
Defendant's removal could provide a basis for a section 1447(c) attorney's fee award, the
Court would decline to award such a fee given (at a minimum) Fannie Mae's own failure
to actually present evidence backing up its assertion that it served the Complaint on
Defendant on January 27,2012.
The Court grants the motion, remanding the case to state court, but denies Fannie
Mae's request for attorneys' fees.

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