Lisa Stone-Molloy v. Midland Funding, LLC

Filing 7

ORDER REMANDING ACTION by Judge Otis D. Wright, II: Case remanded to Los Angeles Superior Court, Northwest District, Van Nuys, Case number 15 V 07688 Case Terminated. Made JS-6 (lc). Modified on 10/20/2015 (lc).

O
JS-6

1
2
3
4
5
6
7

United States District Court
Central District of California

8
9
10
11

LISA STONE-MOLLOY,
Plaintiff,

12

v.

13
14

Case № 2:15-cv-08017-ODW (AJWx)
ORDER REMANDING ACTION

MIDLAND FUNDING LLC,
Defendant.

15
16
17

I.

INTRODUCTION

On October 13, 2015, Defendant Midland Funding LLC timely removed this

18
19

action to federal court based on arising-under jurisdiction.

20

Defendant’s Notice of Removal, it does not appear that Plaintiff Lisa Stone-Molloy’s

21

claims arise under federal law, and thus the Court lacks subject matter jurisdiction.

22

Consequently, this action is REMANDED to state court.1

23

II.

BACKGROUND

On September 2, 2015, Plaintiff filed her Complaint in the Los Angeles

24
25

After reviewing

Superior Court’s small claims division.

(ECF No. 1-1.)

The sole substantive

26
27
28

1

After carefully considering Defendant’s Notice of Removal and the documents filed in
support thereof, the Court deems the matter appropriate for sua sponte decision. United Inv’rs Life
Ins. Co. v. Waddell & Reed Inc., 360 F.3d 960, 967 (9th Cir. 2004).

1

allegation in the Complaint is as follows: “re-age of actual first date of delinquency to

2

a new account-opened date 20 months newer.”

3

damages in the amount of $2,500, which she attributes to “credit decline actual

4

damages.” (Id. ¶ 3c.) Plaintiff served Defendant with the Complaint on September

5

14, 2015. (Not. of Removal ¶ 2.) On October 13, 2015, Defendant timely removed

6

the action to this Court. (ECF No. 1.)

7

III.

(Compl. ¶ 3a.)

Plaintiff seeks

LEGAL STANDARD

8

Federal courts have subject matter jurisdiction only as authorized by the

9

Constitution and Congress. U.S. Const. art. III, § 2, cl. 1; see also Kokkonen v.

10

Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). A suit filed in state court

11

may be removed to federal court only if the federal court would have had original

12

jurisdiction over the suit. 28 U.S.C. § 1441(a).

13

jurisdiction where an action arises under federal law, id. § 1331, or where each

14

plaintiff’s citizenship is diverse from each defendant’s citizenship and the amount in

15

controversy exceeds $75,000, id. § 1332(a).

Federal courts have original

16

The removal statute is strictly construed against removal, and “[f]ederal

17

jurisdiction must be rejected if there is any doubt as to the right of removal in the first

18

instance.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). The party seeking

19

removal bears the burden of establishing federal jurisdiction. Durham v. Lockheed

20

Martin Corp., 445 F.3d 1247, 1252 (9th Cir. 2006). The court may remand the action

21

sua sponte “[i]f at any time before final judgment it appears that the district court

22

lacks subject matter jurisdiction.” 28 U.S.C. § 1447(c); see also United Inv’rs Life

23

Ins. Co. v. Waddell & Reed Inc., 360 F.3d 960, 967 (9th Cir. 2004).

24

IV.

DISCUSSION

25

Defendant asserts two bases for arising-under jurisdiction: (1) Plaintiff’s claim

26

arises under the federal Fair Credit Reporting Act (FCRA), and (2) Plaintiff’s claim

27

contains a substantial federal ingredient because the FCRA preempts any state law

28

claim that Plaintiff might be alleging. (Not. of Removal ¶¶ 5–7.) The Court is not

2

1

convinced by either argument.

2

As to the first basis, it is far from clear that Plaintiff is stating a claim under the

3

FCRA. “The presence or absence of federal-question jurisdiction is governed by the

4

‘well-pleaded complaint rule,’ which provides that federal jurisdiction exists only

5

when a federal question is presented on the face of the plaintiff’s properly pleaded

6

complaint. The rule makes the plaintiff the master of the claim; he or she may avoid

7

federal jurisdiction by exclusive reliance on state law.” Caterpillar Inc. v. Williams,

8

482 U.S. 386, 392 (1987) (citation omitted). Plaintiff does not cite a federal statute or

9

use language that substantially tracks the language of a federal statute, and thus it is

10

not clear that she is trying to state a claim under federal law. Plaintiff could be

11

attempting to state, for example, a negligence claim. That FCRA preemption may

12

ultimately require Plaintiff to bring her claims under federal law does not mean that

13

the Complaint as currently pleaded states a claim under federal law.

14

Washington v. Direct Gen. Ins. Agency, 130 F. Supp. 2d 820, 824 (S.D. Miss.

15

2000) is distinguishable. There, the plaintiff purported to assert a claim under the

16

“Fair Faith and Credit Act.” The court found that this was actually a claim under the

17

FCRA because there was “no Mississippi nor federal statute known as the ‘Fair Faith

18

and Credit Act’ [and] a review of the provisions of the FCRA makes it obvious that

19

the complaint seeks to assert a claim under the FCRA.” Id. In contrast, Plaintiff here

20

does not identify any statute (real or not), and the sparse allegations in her Complaint

21

make it impossible to determine with any certainty what governing law she relies on.

22

To the extent Washington holds that removal is proper because the claim must

23

ultimately be brought under the FCRA, this Court declines to follow it—such a rule

24

would run afoul of the Supreme Court’s characterization of the plaintiff as the “master

25

of the claim.” Caterpillar Inc., 482 U.S. at 392.

26

As to the second basis, a case is not removable simply because a defendant

27

intends to assert a defense of federal preemption to a state law claim. “[I]t is now

28

settled law that a case may not be removed to federal court on the basis of a federal

3

1

defense, including the defense of pre-emption, . . . even if both parties concede that

2

the federal defense is the only question truly at issue.” Id. at 393. The narrow

3

exception to this rule is the “complete preemption” doctrine, which “‘occurs only

4

when Congress intends not merely to preempt a certain amount of state law, but also

5

intends to transfer jurisdiction of the subject matter from state to federal court.’”

6

Ansley v. Ameriquest Mortgage Co., 340 F.3d 858, 862 (9th Cir. 2003) (citation

7

omitted). “Complete preemption, however, arises only in ‘extraordinary’ situations,”

8

and the Supreme Court has identified only three federal statutes that qualify under this

9

doctrine—and the FCRA is not one of them. Id. Indeed, the fact that the FCRA’s

10

preemption clause, 15 U.S.C. § 1681t(b)(1)(F), contains two savings clauses—

11

including one for claims under California Civil Code section 1785.28(a)—counsels

12

strongly against complete preemption, and may even exempt Plaintiff’s claim from

13

preemption altogether.

14

jurisdiction.

FCRA preemption thus does not confer arising-under

15

V.

CONCLUSION

16

When a case is removed from state court to federal court, the federal court must

17

resolve all ambiguities in favor of remanding the case. Here, there are sufficient

18

reasons to doubt the propriety of removal. Thus, the Court REMANDS the action to

19

the small claims division of the Los Angeles Superior Court, Van Nuys, Case No.

20

15V07688. The Clerk of the Court shall close the case.

21

IT IS SO ORDERED.

22
23

October 19, 2015

24
25
26
27

____________________________________
OTIS D. WRIGHT, II
UNITED STATES DISTRICT JUDGE

28

4