1197 West 39th Street, LLC v. Seterus, Inc. et al

Filing 26

MINUTES (In Chambers) Order Remanding Action by Judge Fernando M. Olguin: IT IS ORDERED that:(1) Plaintiff Motion to Remand (Document No. 14 ) is GRANTED in part and DENIED in part. The Motion is granted to the extent it seeks remand of the action to state court. The Motion is denied to the extent plaintiff seeks fees and costs. (2) The above-captioned action shall be remanded to the Superior Court of the State of California for the County of Los Angeles, 111 North Hill St., Los Angeles, CA 90012, for lack of subject matter jurisdiction pursuant to 28 USC 1447(c). (3) The Clerk shall send a certified copy of this Order to the state court. (MD JS-6. Case Terminated.) (jp)

JS-6

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

CV 17-1845 FMO (AFMx)

Title

1197 West 39th Street, LLC v. Seterus, Inc., et al.

Present: The Honorable

Date

April 10, 2017

Fernando M. Olguin, United States District Judge

Vanessa Figueroa

None

None

Deputy Clerk

Court Reporter / Recorder

Tape No.

Attorney Present for Plaintiff:

Attorney Present for Defendants:

None Present

None Present

Proceedings:

(In Chambers) Order Remanding Action

On February 24, 2017, 1197 West 39th Street, LLC (“plaintiff”) filed the operative Second
Amended Complaint (“SAC”) in the Los Angeles County Superior Court against Seterus, Inc.
(“Seterus”) and the Federal National Mortgage Association, Inc. (“Fannie Mae”) (collectively,
“defendants”), asserting state-law claims for: (1) declaratory relief; and (2) violation of California
Civil Code § 2943. (See Dkt. 1, Notice of Removal of Action (“NOR”) at 3; Dkt. 1-9, SAC at ¶¶ 148). The instant action arises out of plaintiff’s purchase of real property and its efforts to obtain
information about the loan from defendants. (See Dkt. 1-9, SAC at ¶¶ 4-48). On March 8, 2017,
defendants removed the instant action on federal question jurisdiction grounds pursuant to 28
U.S.C. §§ 1331 and 1441. (See Dkt. 1, NOR at ¶ 3). On March 31, 2017, plaintiff filed a Motion
to Remand to State Court and for an Award of Attorney’s Fees (Dkt. 14, “Motion”). Having
reviewed the pleadings and the briefing with respect to the Motion, the court hereby remands this
action to state court for lack of subject matter jurisdiction. See 28 U.S.C. §§ 1447(c).
LEGAL STANDARD
“Federal courts are courts of limited jurisdiction. They possess only that power authorized
by Constitution and statute[.]” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377, 114
S.Ct. 1673, 1675 (1994). The courts are presumed to lack jurisdiction unless the contrary appears
affirmatively from the record. See DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 342 n. 3, 126
S.Ct. 1854, 1861 (2006). Federal courts have a duty to examine jurisdiction sua sponte before
proceeding to the merits of a case, see Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 583, 119
S.Ct. 1563, 1569 (1999), “even in the absence of a challenge from any party.” Arbaugh v. Y&H
Corp., 546 U.S. 500, 514, 126 S.Ct. 1235, 1244 (2006).
“The right of removal is entirely a creature of statute and a suit commenced in a state court
must remain there until cause is shown for its transfer under some act of Congress.” Syngenta
Crop Protection, Inc. v. Henson, 537 U.S. 28, 32, 123 S.Ct. 366, 369 (2002) (internal quotation
marks omitted). Where Congress has acted to create a right of removal, those statutes, unless

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

CV 17-1845 FMO (AFMx)

Date

Title

1197 West 39th Street, LLC v. Seterus, Inc., et al.

April 10, 2017

otherwise stated, are strictly construed against removal jurisdiction.1 See id. Unless otherwise
expressly provided by Congress, “any civil action brought in a State court of which the district
courts of the United States have original jurisdiction, may be removed by the defendant or the
defendants, to the district court[.]” 28 U.S.C. § 1441(a); see Dennis v. Hart, 724 F.3d 1249, 1252
(9th Cir. 2013) (same). A removing defendant bears the burden of establishing that removal is
proper. See Abrego Abrego v. The Dow Chem. Co., 443 F.3d 676, 684 (9th Cir. 2006) (per
curiam) (noting the “longstanding, near-canonical rule that the burden on removal rests with the
removing defendant”); 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.”) (internal quotation marks omitted). Moreover, if there is any
doubt regarding the existence of subject matter jurisdiction, the court must resolve those doubts
in favor of remanding the action to state court. See Gaus, 980 F.2d at 566 (“Federal jurisdiction
must be rejected if there is any doubt as to the right of removal in the first instance.”).
“Under the plain terms of § 1441(a), in order properly to remove [an] action pursuant to that
provision, [the removing defendant] must demonstrate that original subject-matter jurisdiction lies
in the federal courts.” Syngenta Crop Protection, 537 U.S. at 33, 123 S.Ct. at 370. Failure to do
so requires that the case be remanded, as “[s]ubject matter jurisdiction may not be waived, and.
. . the district court must remand if it lacks jurisdiction.” Kelton Arms Condo. Owners Ass’n, Inc.
v. Homestead Ins. Co., 346 F.3d 1190, 1192 (9th Cir. 2003). Indeed, “[i]f at any time before final
judgment it appears that the district court lacks subject matter jurisdiction, the case shall be
remanded.” 28 U.S.C. § 1447(c); see Emrich v. Touche Ross & Co., 846 F.2d 1190, 1194 n. 2
(9th Cir. 1988) (“It is elementary that the subject matter jurisdiction of the district court is not a
waivable matter and may be raised at anytime by one of the parties, by motion or in the
responsive pleadings, or sua sponte by the trial or reviewing court.”); Washington v. United Parcel
Serv., Inc., 2009 WL 1519894, *1 (C.D. Cal. 2009) (a district court may remand an action where
the court finds that it lacks subject matter jurisdiction either by motion or sua sponte).
For purposes of removal based on federal question jurisdiction, the well-pleaded complaint
rule “provides that federal jurisdiction exists only when a federal question is presented on the face
of the plaintiff’s properly pleaded complaint.” Smallwood v. Allied Van Lines, Inc., 660 F.3d 1115,
1120 (9th Cir. 2011) (quoting Caterpillar Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 2429
(1987)). “As the master of the complaint, a plaintiff may defeat removal by choosing not to plead
independent federal claims.” ARCO Envt’l Remediation, L.L.C. v. Dep’t of Health & Envt’l Quality
of Montana, 213 F.3d 1108, 1114 (9th Cir. 2000).

1

For example, an “antiremoval presumption” does not exist in cases removed pursuant to the
Class Action Fairness Act (“CAFA”), 28 U.S.C. § 1332(d). See Dart Cherokee Basin Operating
Co., LLC v. Owens, 135 S.Ct. 547, 554 (2014).
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 17-1845 FMO (AFMx)

Date

Title

1197 West 39th Street, LLC v. Seterus, Inc., et al.

April 10, 2017

DISCUSSION
I.

SUBJECT MATTER JURISDICTION.

Based on the court’s review of the NOR and the briefing on the Motion, the court finds that
it lacks subject matter jurisdiction over the instant matter. In other words, plaintiff could not have
originally brought this action in federal court, in that plaintiff does not competently allege facts
supplying federal question jurisdiction, and therefore removal was improper. See 28 U.S.C. §
1441(a);2 Caterpillar Inc., 482 U.S. at 392, 107 S.Ct. at 2429 (“Only state-court actions that
originally could have been filed in federal court may be removed to federal court by the
defendant.”) (footnote omitted).
The SAC asserts only two state-law claims, including one pursuant to California Civil Code
§ 2943 (“§ 2943"), which requires a beneficiary to provide a copy of the note and other information
within 21 days of receipt of a written demand. See Cal. Civ. Code § 2943(b); (see also Dkt. 1-9,
SAC at ¶ 32) (alleging that Fannie Mae, as holder of the Deed of Trust, was required to provide
information within 21 days of demand). Defendants, however, assert that federal question
jurisdiction exists because the SAC also asserts a claim under the Real Estate Settlement
Procedures Act (“RESPA”), 12 U.S.C. §§ 2601, et. seq. (See Dkt. 1, NOR at ¶ 3; see also Dkt.
20, [Defendants’] Opposition to Plaintiff’s Motion to Remand Action to State Court and Request
for Attorney’s Fees (“Opp.”) at 4-5). According to defendants, plaintiff asserted a RESPA claim
when it alleged that Fannie Mae’s3 conduct violated § 2943, and that its “actions (and omissions)
also constitute a violation of [RESPA].” (See Dkt. 1, NOR at ¶ 3 (citing Dkt. 1-9, SAC at ¶ 39); Dkt.
20, Opp. at 5). However, such a fleeting reference to RESPA buried in a cause of action under
§ 2943 is insufficient to confer federal question jurisdiction. Federal law, specifically, RESPA,
does not create the cause of action; nor does plaintiff’s right to relief depend on its resolution.4
See, e.g., Franchise Tax Bd. of the State of California v. Construction Laborers Vacation Trust for
Southern California, 463 U.S. 1, 27-28, 103 S.Ct. 2841, 2856 (1983), superseded by statute on

2

Title 28 U.S.C. § 1441(a) provides that:
Except as otherwise expressly provided by Act of Congress, any civil action
brought in a State court of which the district courts of the United States have
original jurisdiction, may be removed by the defendant or the defendants, to
the district court of the United States for the district and division embracing
the place where such action is pending.

3

This claim is asserted only against Fannie Mae. (See Dkt. 1-9, SAC at ¶¶ 31-48) (“By Plaintiff
Against All Defendants except Seterus for Violation of Civil Code Section 2943”).
4

Nor does plaintiff’s cause of action for declaratory relief necessary rely on RESPA. (See,
e.g., Dkt. 20, Opp. at 2-4).
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 17-1845 FMO (AFMx)

Date

Title

1197 West 39th Street, LLC v. Seterus, Inc., et al.

April 10, 2017

other grounds, as recognized in DB Healthcare, LLC v. Blue Cross Blue Shield of Arizona, Inc.,
2017 WL 1075050, *4 (9th Cir. 2017) (“Congress has given the lower federal courts jurisdiction
to hear, originally or by removal from state court, only those cases in which a 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.”).
In short, given that any doubt regarding the existence of subject matter jurisdiction must be
resolved in favor of remanding the action to state court, see Gaus, 980 F.2d at 566, the court is
not persuaded, under the circumstances here, that defendants have met their burden. Therefore,
there is no basis for federal question jurisdiction. See 28 U.S.C. § 1331.
II.

COSTS AND FEES.

Plaintiff seeks an award of attorney’s fees and costs in connection with its Motion. (See
Dkt. 14, Motion at 10-11). Section 1447(c) provides in relevant part 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.” 28 U.S.C. § 1447(c). “Absent unusual circumstances, courts may
award attorney’s fees under § 1447(c) only where the removing party lacked an objectively
reasonable basis for seeking removal.” Martin v. Franklin Capital Corp., 546 U.S. 132, 141, 126
S.Ct. 704, 711 (2005). Here, the court finds that defendants did not lack an objectively reasonable
basis for removal.
This order is not intended for publication. Nor is it intended to be included in or
submitted to any online service such as Westlaw or Lexis.
CONCLUSION
Based on the foregoing, IT IS ORDERED that:
1. Plaintiff’s Motion to Remand (Document No. 14) is granted in part and denied in part.
The Motion is granted to the extent it seeks remand of the action to state court. The Motion is
denied to the extent plaintiff seeks fees and costs.
2. The above-captioned action shall be remanded to the Superior Court of the State of
California for the County of Los Angeles, 111 North Hill St., Los Angeles, CA 90012, for lack of
subject matter jurisdiction pursuant to 28 U.S.C. § 1447(c).
3. The Clerk shall send a certified copy of this Order to the state court.
Initials of Preparer

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