Martingale Investments LLC v. John Frausto et al

Filing 10

ORDER GRANTING PLAINTIFF'S MOTION TO REMAND by Judge S. James Otero. The Court GRANTS Plaintiff's Motion and REMANDS this action to the Superior Court of California, County of Los Angeles ("Los Angeles County Superior Court"). Case number 13U08446 Case Terminated. Made JS-6 (Attachments: # 1 Remand letter) (bp)

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL

DATE: October 17, 2013

CASE NO.: CV 13-06871 SJO (MRWx)
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Martingale Investments, LLC v. John Frausto

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PRESENT: THE HONORABLE S. JAMES OTERO, UNITED STATES DISTRICT JUDGE
Victor Paul Cruz
Courtroom Clerk

Not Present
Court Reporter

COUNSEL PRESENT FOR PLAINTIFF:

COUNSEL PRESENT FOR DEFENDANT:

Not Present

Not Present

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PROCEEDINGS (in chambers): ORDER GRANTING PLAINTIFF'S MOTION TO REMAND
CASE [Docket No. 4]
This matter is before the Court on Plaintiff Martingale Investments, LLC's ("Plaintiff") Motion to
Remand Case ("Motion"), filed September 25, 2013. Defendant John Frausto ("Defendant") has
not filed an opposition. The Court found this matter suitable for disposition without oral argument
and vacated the hearing set for October 21, 2013. See Fed. R. Civ. P. 78(b). For the following
reasons, the Court GRANTS Plaintiff's Motion and REMANDS this action to the Superior Court
of California, County of Los Angeles ("Los Angeles County Superior Court").
I.

FACTUAL AND PROCEDURAL BACKGROUND

Plaintiff initiated this present action for unlawful detainer on July 16, 2013, in Los Angeles County
Superior Court based on Defendant's failure to vacate property acquired by Plaintiff in a Trustee's
Sale conducted pursuant to California Civil Code section 2924, et seq., on June 24, 2013. (See
generally Notice of Removal ("Notice"), Ex. 1 ("Compl."), ECF No. 1.) Defendant filed a Notice of
Removal on September 18, 2013, more than sixty days after the state court action was filed. (See
generally Notice.)
II.

DISCUSSION

The Ninth Circuit has held that courts must "strictly construe the removal statute against removal
jurisdiction" and reject federal jurisdiction "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). "The strong presumption
against removal jurisdiction means that the defendant always has the burden of establishing that
removal is proper." Id. (quotation marks omitted).
Here, it is not clear on what basis Defendant seeks to remove. For example, Defendant states
that removal is pursuant to 28 U.S.C. § 1443(1) because "under California Civil Code he is denied
or cannot enforce his equal rights to contract for and secure his property rights in the Superior
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL

DATE: October 17, 2013

CASE NO.: CV 13-06871 SJO (MRWx)

Courts of California." (Notice 7; see also Notice 13-15.) Furthermore, Defendant asserts that
removal is proper because there is a federal question involving " fair housing, retaliatory evictions,
and related racial discrimination." (Notice 9.) Defendant also claims that "[t]he federal question
law is the violation of civil rights that has associated Federal Claims of the SEC, securities issues
and violations of federal banking laws in alleged property transfers." (Notice 16.) Finally,
Defendant appears to justify removal by citing to 28 U.S.C. § 1332, which grants federal courts
diversity jurisdiction. (Notice 1, 9.) However, despite his citations to the diversity jurisdiction
statute, Defendant also explicitly states that "[removal] is not based on grounds of diversity of
citizenship" because the "amount in controversy in excess of $75,000 does not apply." (Notice
9 (emphasis removed).) The Court will therefore consider only whether removal is proper under
28 U.S.C. § 1441 on federal question grounds and whether removal is proper under 28 U.S.C. §
1443, which provides for the removal of certain civil rights cases.
A.

Federal Question Jurisdiction

28 U.S.C. § 1331 provides federal courts with jurisdiction over cases where a plaintiff asserts a
claim or right "arising under the Constitution, laws, or treaties of the United States." 28 U.S.C.
§ 1331. A case "arises under" federal law if a plaintiff's "well-pleaded complaint establishes either
that federal law creates the cause of action or that the plaintiff's right to relief necessarily depends
on resolution of a substantial question of federal law." Empire Healthchoice Assurance, Inc. v.
McVeigh, 547 U.S. 677, 690 (2006) (internal quotation marks omitted). Pursuant to the
well-pleaded complaint rule, federal question exists under § 1331 "only when a federal question
is presented on the face of a plaintiff's properly pleaded complaint." Caterpillar, Inc. v. Williams,
482 U.S. 386, 392 (1987). Because the well-pleaded complaint rule makes a plaintiff the "master
of the claim," a plaintiff may avoid federal jurisdiction by pleading exclusively state law claims. Id.
A defendant cannot establish "arising under" jurisdiction by asserting either a federal defense or
a federal counterclaim. Holmes Grp., Inc. v. Vornado Air Circulation Sys., Inc., 535 U.S. 826, 831
(2002).
Here, the Complaint asserts only one cause of action, unlawful detainer. (Compl. 1.) Unlawful
detainer is an exclusively state law claim that does not require the resolution of any substantial
question of federal law. Defendant appears to try to raise either defenses or counterclaims that
involve federal law. For example, Defendant states that "he is being denied or discriminated for
whistleblowing re banking fraud and/or unsafe housing and cannot enforce his rights to equal
protection of the discriminatory laws of the state of California . . . ." (Notice 8.) However, these
allegations do not appear on the face of Plaintiff's well-pleaded Complaint, so Defendant cannot
use them to establish "arising under" jurisdiction. Because Plaintiff's cause of action arises under
the laws of the state of California and not the United States, Defendant cannot, without more,
establish federal question jurisdiction.

C.

Civil Rights Removal
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL

DATE: October 17, 2013

CASE NO.: CV 13-06871 SJO (MRWx)

Pursuant to 28 U.S.C. § 1443, a defendant may remove a civil action to federal court if the
defendant "is denied or cannot enforce in the courts of such State a right under any law providing
for the equal civil rights of citizens of the United States." 28 U.S.C. § 1443(1). District courts in
the Central District of California have articulated the test for removal pursuant to § 1443 as
requiring satisfaction of two elements: (1) the party must "assert a right under federal law
protecting civil rights in terms of racial equality (rather than general constitutional or statutory
provisions of general acceptability or under statutes not protecting against racial discrimination)";
and (2) "it must appear that the party seeking removal cannot enforce the specified federal right
in the state courts because of a state statute or constitutional provision that purports to command
the state courts to ignore the federal rights." Aurora Loan Servs., LLC v. Harrison, No. CV 106715, 2010 WL 3814884, at *1 (C.D. Cal. Sept. 27, 2010) (internal quotation marks and emphasis
omitted).
Defendant asserts that the state of California's statutory scheme governing unlawful detainer is
unconstitutional and removal is therefore proper on civil rights grounds. Specifically, Defendant
alleges that "the California Civil Code procedures authorizing evictions violate 42 U.S.C. §§ 19811982." (Notice 7.) Defendant argues that this statutory scheme "both on its face and as applied
discriminates unfairly against Ethnic-Surname Americans." (Notice 7.) Furthermore, Defendant
argues that there is "an official program and pattern of linguistic and therefore racial discrimination
in the California Superior Courts . . . violat[ing] the guarantees to due process found in the Fifth
and Fourteenth Amendments." (Notice 14.)
The Court finds Harrison instructive. In Harrison, the defendants removed an unlawful detainer
complaint to the Central District on civil rights grounds, claiming that "the statutes were enacted
with express discriminatory intent." Harrison, 2010 WL 3814884, at *2 (internal quotation marks
omitted). The court remanded the case to state court in part because the defendants did not
"point to anything which commands the state courts to ignore federal rights." Id. Similarly, here,
Defendant does not point to a California statute or constitutional provision that commands state
courts to discriminate against parties with ethnic surnames or otherwise discriminate on linguistic
or racial grounds. Instead, Defendant raises broad allegations of discrimination without showing
why state courts are compelled to ignore Defendant's federal rights. Therefore, like the
defendants in Harrison, Defendant fails to establish that the Court has subject matter jurisdiction.
III.

RULING

For the foregoing reasons, the Court GRANTS Plaintiff's Motion and REMANDS this case to the
Superior Court of California, County of Los Angeles. This action shall close.
IT IS SO ORDERED.

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