Mission Property Partners LLC v. Thelma D Taylor et al

Filing 11

MINUTE ORDER IN CHAMBERS REMANDING CASE TO LOS ANGELES SUPERIOR COURT FOR LACK OF SUBJECT MATTER JURISDICTION by Judge Margaret M. Morrow. Taylor has failed to carry her burden of showing that the court has subject matter jurisdiction to hear this a ction. As a consequence, the clerk is directed to remand the case to Los Angeles Superior Court forthwith. Remanding case to Los Angeles Superior Court, Case number 13F07192 Case Terminated. Made JS-6 (ah) (Additional attachment(s) added on 12/30/2013: # 1 Memorandum) (ah).

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 13-08475 MMM (PJWx)

Date December 30, 2013

Title Mission Property Partners LLC v. Thelma D. Taylor et al.

Present: The Honorable

MARGARET M. MORROW

ANEL HUERTA

N/A

Deputy Clerk

Court Reporter

Attorneys Present for Plaintiffs:

Attorneys Present for Defendants:

None

None

Proceedings:

Order Remanding Case to Los Angeles Superior Court for Lack of
Subject Matter Jurisdiction
I. FACTUAL BACKGROUND

Plaintiff Mission Property Partners LLC (“Mission”) filed this unlawful detainer action in Los
Angeles Superior Court against Thelma Taylor and certain fictitious defendants on September 13,
2013.1 Defendants are allegedly holdover occupants in possession of real property located in Carson,
California (“the property”).2 Plaintiff acquired ownership of and title to the property at a trustee sale,
and it has allegedly perfected its title pursuant to California Civil Code §§ 2924 et seq.3
Plaintiff alleges that on September 6, 2013, it served a written three day notice to quit on
defendants, which expired on September 9, 2013.4 It asserts that defendants remained in possession
of the property after the notice to quit expired, without its consent and despite its demands for

1

Notice of Removal, Docket No. 1 (Nov. 15, 2013), Complaint.

2

Id., ¶¶ 2, 3, 9.

3

Id., ¶¶ 5, 7.

4

Id., ¶ 8.

immediate possession.5
Plaintiff seeks possession of the property, damages of $50.00 per day from September 9, 2013
until the date judgment is entered, and costs of suit.6
On November 15, 2013, Taylor removed the action to this court, invoking the court’s
jurisdiction under 28 U.S.C. §§ 1331 and 1332(a).7 On December 9, 2013, plaintiff filed a motion
to remand.8
II. DISCUSSION
A.

Legal Standard Regarding Removal Jurisdiction

Federal courts have a duty to examine their subject matter jurisdiction whether or not the
parties raise the issue. See United Investors Life Ins. Co. v. Waddell & Reed, Inc., 360 F.3d 960,
966 (9th Cir. 2004) (“[A] district court’s duty to establish subject matter jurisdiction is not contingent
upon the parties’ arguments,” citing Mitchell v. Maurer, 293 U.S. 237, 244 (1934)); see also
Attorneys Trust v. Videotape Computer Products, Inc., 93 F.3d 593, 594-95 (9th Cir. 1996) (lack of
subject matter jurisdiction may be raised at any time by either party or by the court sua sponte);
Thiara v. Kiernan, No. C06-03503 MJJ, 2006 WL 3065568, *2 (N.D. Cal. Oct. 25, 2006) (“A
district court has an independent obligation to examine whether removal jurisdiction exists before
deciding any issue on the merits”).
Where a case has been removed, the court may remand for lack of subject matter jurisdiction
at any time before final judgment. See 28 U.S.C. § 1447(c) (“If at any time before final judgment
it appears that the district court lacks subject matter jurisdiction, the case shall be remanded”). The
court may – indeed must – remand an action sua sponte if it determines that it lacks subject matter
jurisdiction. See Kelton Arms Condominium Owners Ass’n v. Homestead Ins. Co., 346 F.3d 1190,
1192 (9th Cir. 2003) (“[W]e have held that the district court must remand if it lacks jurisdiction,”
citing Sparta Surgical Corp. v. Nat’l Ass’n Sec. Dealers, Inc., 159 F.3d 1209, 1211 (9th Cir. 1998)).
For the reasons discussed below, the court lacks subject matter jurisdiction and the action must be

5

Id., ¶ 9.

6

Id. at 2-3 (prayer).

7

Id., ¶ 3; id. at 6 (prayer).

8

Motion to Remand, Docket No. 5 (Dec. 9, 2013).
2

remanded to Los Angeles Superior Court.9
B.

Federal Question Jurisdiction
1.

Legal Standard Governing Federal Question Jurisdiction

Under 28 U.S.C. § 1331, district courts “have original jurisdiction of all civil actions arising
under the Constitution, laws, or treaties of the United States.” Federal question jurisdiction is
presumed absent unless defendant, as the party seeking to invoke the court’s jurisdiction, shows that
plaintiff has either alleged a federal cause of action, American Well Works Co. v. Layne & Bowler
Co., 241 U.S. 257, 260 (1916) (“a suit arises under the law that creates the action”), a state cause
of action that turns on a substantial dispositive issue of federal law, Franchise Tax Bd. v. Construction
Laborers Vacation Trust, 463 U.S. 1, 9 (1983); Smith v. Kansas City Title & Trust Co., 255 U.S.
180, 199 (1921), or a state cause of action that Congress has transformed into an inherently federal
cause of action by completely preempting the field of its subject matter, Avco Corp. v. Aero Lodge
No. 735, 390 U.S. 557, 560 (1968); Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 65 (1987).
Whether a claim “arises under” federal law must be determined by reference to the “wellpleaded complaint.” Franchise Tax Bd., 463 U.S. at 9-10. Since a defendant may remove a case
under 28 U.S.C. § 1441(b) only if the claim could have been brought in federal court, the existence
of removal jurisdiction must also be determined by reference to the “well-pleaded complaint.”
Merrell Dow Pharmaceuticals, Inc. v. Thompson, 478 U.S. 804, 808 (1986). The well-pleaded
complaint rule makes plaintiff the “master of the claim” for purposes of removal jurisdiction.
Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987). Where a plaintiff could maintain claims
under both federal and state law, therefore, plaintiff can prevent removal by ignoring the federal claim
and alleging only state law causes of action. Rains v. Criterion Systems, Inc., 80 F.3d 339, 344 (9th
Cir. 1996).
For federal question jurisdiction to attach, “a right or immunity created by the Constitution or
laws of the United States must be an element, and an essential one, of the plaintiff’s cause of action.”
Gully v. First Nat’l Bank in Meridian, 299 U.S. 109, 112 (1936). Only where the “right to relief
under state law requires resolution of a substantial question of federal law in dispute between the
parties” does a state law cause of action “arise under” the laws of the United States. Franchise Tax
Bd., 463 U.S. at 13 (1983). A claim does not present a “substantial question” of federal law merely
because a federal question is an “ingredient” of the cause of action. Indeed, “the mere presence of
a federal issue in a state cause of action does not automatically confer federal question jurisdiction.”
Merrell Dow Pharmaceuticals, 478 U.S. at 813.

9

Because the court determines sua sponte that it must remand the action for lack of subject
matter jurisdiction, it need not consider plaintiff’s motion to remand and denies the motion (Docket
No. 5) as moot.
3

Likewise, it is not enough for removal purposes that a federal question may arise during the
litigation in connection with a defense or counterclaim. “[F]ederal 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. See also Louisville & Nashville R. Co. v. Mottley, 211 U.S. 149, 152 (1908).
“A defense is not part of a plaintiff’s properly pleaded statement of his or her claim.” Rivet v.
Regions Bank of La., 522 U.S. 470, 475 (1998). See also Taylor, 481 U.S. at 63; Gully, 299 U.S.
at 112 (“To bring a case within the [federal question removal] statute, a right or immunity created by
the Constitution or laws of the United States must be an element, and an essential one, of the
plaintiff’s cause of action”). Thus, “a case may not be removed to federal court on the basis of a
federal defense, . . . even if the defense is anticipated in the plaintiff’s complaint, and even if both
parties admit that the defense is the only question truly at issue in the case.” Franchise Tax Bd., 463
U.S. at 14.
2.

Whether Federal Question Jurisdiction Exists

There is no federal question apparent on the face of plaintiff’s complaint, which alleges only
an unlawful detainer cause of action. See Wells Fargo Bank v. Lapeen, No. C 11–01932 LB, 2011
WL 2194117, *3 (N.D. Cal. June 6, 2011) (“an unlawful detainer action, on its face, does not arise
under federal law but is purely a creature of California law,” citing Wescom Credit Union v. Dudley,
No. CV 10-8203 GAF (SSx), 2010 WL 4916578, *2 (C.D. Cal. Nov. 22, 2010)); IndyMac Federal
Bank, F.S.B. v. Ocampo, No. EDCV 09-2337 PA (DTBx), 2010 WL 234828, *2 (C.D. Cal. Jan.
13, 2010) (remanding an action to state court for lack of subject matter jurisdiction where plaintiff’s
complaint contained only an unlawful detainer claim); U.S. Bank N.A. v. Lopez, NO. C09-05985
HRL, 2009 WL 5218006, *1 (N.D. Cal. Dec. 31, 2009) (same); Galileo Financial v. Miin Sun Park,
No. EDCV 09-1660 PSG, 2009 WL 3157411, *1 (C.D. Cal. Sept. 24, 2009) (“Here, the complaint
only asserts a claim for unlawful detainer, a cause of action that is purely a matter of state law. Thus,
from the face of the complaint, it is clear that no basis for federal question jurisdiction exists”).
Taylor asserts the court has federal question jurisdiction because she has alleged a counterclaim
for violation of the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. § 2605. Defenses
and counterclaims do not give rise to federal question jurisdiction if the complaint does not allege a
federal question. “[F]ederal 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; see also Mottley,
211 U.S. at 152. See Redevelopment Agency of City of San Bernardino v. Alvarez, 288 F.Supp.2d
1112, 1115 (C.D. Cal. 2003) (“For both removal and original jurisdiction, the federal question must
be presented by the plaintiff’s complaint as it stands at the time of removal. Removal, therefore,
cannot be based on a counterclaim or cross-claim raising a federal question,” citing Metro Ford Truck
Sales, Inc. v. Ford Motor Co., 145 F.3d 320, 327 (5th Cir. 1998)). Because plaintiff’s complaint
does not present a federal question, either on its face or as artfully pled, the court lacks jurisdiction
under 28 U.S.C. § 1331.

4

C.

Whether Diversity Jurisdiction Exists
1.

Legal Standard Governing Diversity Jurisdiction

“The district courts shall have original jurisdiction of all civil actions where the matter in
controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between . . .
citizens of different states.” 28 U.S.C. § 1332(a); see also Matheson v. Progressive Specialty Ins.
Co., 319 F.3d 1089, 1090 (9th Cir. 2003) (“[J]urisdiction founded on [diversity] requires that the
parties be in complete diversity and the amount in controversy exceed $75,000”). In any case where
subject matter jurisdiction is premised on diversity, there must be complete diversity, i.e., all
plaintiffs must have citizenship different than all defendants. See Strawbridge v. Curtis , 7 U.S. (3
Cranch) 267 (1806); see also Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 n. 3 (1996).
2.

Whether Diversity Jurisdiction Exists
a.

Amount in Controversy

The court first examines whether the amount in controversy exceeds $75,000. “[W]hen a
complaint filed in state court alleges on its face an amount in controversy sufficient to meet the federal
jurisdictional threshold, [the amount in controversy] requirement is presumptively satisfied unless it
appears to a ‘legal certainty’ that the plaintiff cannot actually recover that amount.” Guglielmino v.
McKee Foods Corp., 506 F.3d 696, 699 (9th Cir. 2007). See also St. Paul Mercury Indem. Co. v.
Red Cab Co., 303 U.S. 283, 288-89 (1938) (stating that “the sum claimed by the plaintiff controls
if the claim is apparently made in good faith,” and that “[i]t must appear to a legal certainty that the
claim is really for less than the jurisdictional amount to justify dismissal”). Where, by contrast, “it
is unclear or ambiguous from the face of a state-court complaint whether the requisite amount in
controversy is pled[,] . . . [courts] apply a preponderance of the evidence standard.” Guglielmino,
506 F.3d at 699. Finally, “when a state-court complaint affirmatively alleges that the amount in
controversy is less than the jurisdictional threshold, the ‘party seeking removal must prove with legal
certainty that [the] jurisdictional amount is met.’” Id. (quoting Lowdermilk v. U.S. Bank Nat’l Ass’n,
479 F.3d 994, 1000 (9th Cir. 2007)).
In its complaint, plaintiff expressly states that the amount demanded does not exceed $10,000.10
Taylor does not argue that the amount in controversy is higher than $10,000. Consequently, she has
failed to demonstrate to a legal certainty that the amount in controversy requirement is met. As a
result, the court lacks diversity jurisdiction to hear the action.11
10

Complaint at 1.

11

In addition to the fact that plaintiff specifically limited the damages sought, it is unlikely that
daily holdover damages of $50.00 would exceed the jurisdictional minimum. For that to occur,
judgment would have to be entered on or after October 18, 2017. As unlawful detainer is a summary
5

b.

Complete Diversity

Taylor alleges that she is a California resident.12 A party’s residency, however, does not
determine his or her citizenship for purposes of diversity jurisdiction. Kanter v. Warner-Lambert
Co., 265 F.3d 853, 857 (9th Cir. 2001) (“[T]he diversity jurisdiction statute, 28 U.S.C. § 1332,
speaks of citizenship, not of residency. To be a citizen of a state, a natural person must first be a
citizen of the United States. The natural person’s state citizenship is then determined by her state of
domicile, not her state of residence. . . . A person residing in a given state is not necessarily
domiciled there, and thus is not necessarily a citizen of that state”); see also Weible v. United States,
244 F.2d 158, 163 (9th Cir. 1957) (“Residence is physical, whereas domicile is generally a compound
of physical presence plus an intention to make a certain definite place one’s permanent abode, though,
to be sure, domicile often hangs on the slender thread of intent alone, as for instance where one is a
wanderer over the earth. Residence is not an immutable condition of domicile”). Taylor also alleges
that Mission “is doing business in the State of California.”13 Because Mission is a limited liability
company, Taylor must allege the citizenship of each of its members or owners to show that diversity
exists. Johnson v. Columbia Props. Anchorage, LP, 437 F.3d 894, 899 (9th Cir. 2006) (“[A]n LLC
is a citizen of every state of which its owners/members are citizens”). Taylor has not alleged the
citizenship of Mission’s members. Because Taylor has not adequately alleged her own citizenship or
the citizenship of Mission’s members, the court is unable to conclude that § 1332(a)’s complete
diversity requirement has been met.
III. CONCLUSION
“The ‘strong presumption’ against removal jurisdiction means that the defendant always has
the burden of establishing that removal is proper.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir.
1992). For the reasons stated, Taylor has failed to carry her burden of showing that the court has
subject matter jurisdiction to hear this action. As a consequence, the clerk is directed to remand the
case to Los Angeles Superior Court forthwith.

proceeding, it is unlikely that judgment would be entered some four years after the action was filed.
12

Notice of Removal, ¶ 1.

13

Id., ¶ 2.

CV-90 (12/02)

CIVIL MINUTES - GENERAL

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Initials of Deputy Clerk AH