Moshe Yhudai v. Mortgage Electronic Registration Systems, Inc. et al

Filing 27

MINUTES (IN CHAMBERS) Order GRANTING Plaintiff's Motion to Remand and RENDERING MOOT Defendants' Motion to Dismiss by Judge Philip S. Gutierrez finding as moot 7 MOTION to Dismiss Case; granting 15 MOTION to Remand Case to State Court: In light of the foregoing, the Court GRANTS Plaintiff's motion and REMANDS the action to state court. Defendants' motion to dismiss is hereby RENDERED MOOT. (see document for further details) MD JS-6. Case Terminated. (bm)

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

JS-6

CIVIL MINUTES - GENERAL
Case No.

CV 17-3063 PSG MRW

Title

Moshe Yhudai v. Mortgage Electronic Registration Systems, Inc. et al.

Present: The Honorable

Date

July 18, 2017

Philip S. Gutierrez, United States District Judge

Wendy Hernandez

Not Reported

Deputy Clerk

Court Reporter

Attorneys Present for Plaintiff(s):

Attorneys Present for Defendant(s):

Not Present

Not Present

Proceedings (In Chambers):

Order GRANTING Plaintiff’s Motion to Remand and
RENDERING MOOT Defendants’ Motion to Dismiss

Before the Court is Plaintiff Moshe Yhudai’s motion to remand. Dkt. # 15 (“Mot.”).
Also before the Court is Defendants’ motion to dismiss the complaint. Dkt. # 7. The Court finds
the matters appropriate for decision without oral argument. Fed. R. Civ. P. 78; Local R. 7-15.
After considering the papers submitted by the parties, the Court GRANTS the motion to remand
and RENDERS MOOT Defendants’ motion to dismiss.
I.

Background

On March 22, 2017, Plaintiff Moshe Yhudai (“Plaintiff”) filed this suit in California state
court against Defendants Mortgage Electronic Registration Systems, Inc. (“MERS”), Select
Portfolio Servicing, Inc. (“SPS”); Deutsche Bank National Trust Company as trustee, on behalf
of the holders of the Impac Secured Assets Corp. Mortgage Pass-Through Certificates Series
2007-2 (“Deutsche Bank”), and Recontrust Company N.A. See Dkt. # 1-1 (“Complaint” or
“Compl.”). This suit is based on allegations that Defendants engaged in unlawful lending and
foreclosure practices in connection with a mortgage obtained by Plaintiff. See id. The
Complaint lists the following causes of action: (1) violation of the Rosenthal Fair Debt
Collection Practices Act, Cal. Civ. Code § 1788.17(a); (2) fraud-intentional misrepresentation;
(3) violation of California Corporations Code §§ 2100 et seq.; (4) fraud-concealment; (5) fraudviolation of California Penal Code § 115.5; (6) quiet title; and (7) declaratory and injunctive
relief. Id.
On April 24, 2017, pursuant to provisions of 28 U.S.C. § 1441(b), MERS, SPS, and
Deutsche Bank (together, “Defendants”) removed the case to this Court on the basis of federal
jurisdiction under 28 U.S.C. § 1331. See Dkt. # 1, Notice of Removal (“NOR”) ¶ 3. Defendants
assert that Plaintiff’s “first causes of action, beginning at paragraph 16 and ending at paragraph
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 17-3063 PSG MRW

Date

July 18, 2017

Title

Moshe Yhudai v. Mortgage Electronic Registration Systems, Inc. et al.

33, arise out of alleged violations of federal law.” Id. ¶ 4. Shortly thereafter, Defendants filed a
motion to dismiss the Complaint. Dkt. # 7. On May 24, 2017, Plaintiff filed a motion to remand
the case to state court on grounds that removal was improper because no federal question
appears on the face of the Complaint. See Mot. 5. For the reasons stated below, the Court finds
it lacks subject matter jurisdiction over this case and remands it to state court.
II.

Legal Standard

Federal courts are courts of limited jurisdiction. See Gunn v. Minton, 133 S. Ct. 1059,
1064 (2013). Under 28 U.S.C. § 1441, a defendant may remove a civil action from state court to
federal district court only if the federal court has subject matter jurisdiction over the case. See
Chicago v. Int’l Coll. of Surgeons, 522 U.S. 156, 163 (1997) (“The propriety of removal thus
depends on whether the case originally could have been filed in federal court.”). The case shall
be remanded to state court if at any time before final judgment it appears a removing court lacks
subject matter jurisdiction. See 28 U.S.C. § 1447(c); Int’l Primate Prot. League v. Adm’rs of
Tulane Educ. Fund, 500 U.S. 72, 87 (1991). There is a strong presumption against removal
jurisdiction, so the party seeking removal always has the burden of establishing that removal is
proper. See Geographic Expeditions, Inc. v. Estate of Lhotka ex rel. Lhotka, 599 F.3d 1102,
1107 (9th Cir. 2010) (citing Gaus v. Miles, Inc., 980 F.2d 564, 567 (9th Cir. 1992)). If there is
any doubt as to the propriety of removal, federal jurisdiction must be rejected. Gaus, 980 F.2d at
567.
III.

Discussion

Plaintiff asserts only state causes of action in his complaint, including an alleged
violation of California’s Fair Debt Collections Practices Act, known as the Rosenthal Act
(“State FDCPA”). See Compl. ¶¶ 16–33; Mot. 8. Defendants contend that Plaintiff’s claims
nonetheless “arise under” federal law because Plaintiff’s first cause of action for violation of the
State FDCPA includes allegations that Defendant violated the federal Fair Debt Collection
Practices Act (the “Federal FDCPA”). See Dkt. # 20 (“Opp.”) at 3.
To determine whether a claim made under a state law cause of action nevertheless “arises
under” federal law, a court must consider whether the claim “necessarily raise[s] a stated federal
issue, actually disputed and substantial, which a federal forum may entertain without disturbing
any congressionally approved of federal and state judicial responsibilities.” See Grable & Sons
Metal Prods. v. Eng’g & Mfg., 545 U.S. 308, 314 (2005). A “substantial” federal question is one
that “involves the interpretation of a federal statute that actually is in dispute in the litigation and
is so important that it ‘sensibly belongs in federal court.’” Eastman v. Marine Mech. Corp., 438
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 17-3063 PSG MRW

Date

July 18, 2017

Title

Moshe Yhudai v. Mortgage Electronic Registration Systems, Inc. et al.

F.3d 544, 552 (6th Cir. 2006) (quoting Grable & Sons, 545 U.S. at 314). Thus, as the Supreme
Court has noted, “federal issue” is not “a password opening federal courts to any state action
embracing a point of federal law.” Grable & Sons, 545 U.S. at 314.
As Plaintiff rightly notes, the State FDCPA creates state law liability for violations of the
Federal FDCPA. See Mot. 7–8; Cal. Civ. Code § 1788.17. It also incorporates by reference the
statutory remedies provided for under the Federal FDCPA. See id. As a result, where a party
has violated the Federal FDCPA, it has generally also violated the State FDCPA and is subject to
an additional award of the statutory damages described in the Federal FDCPA. See id. Here, it
is apparent from the manner in which Plaintiff has pleaded his first cause of action that he is
alleging State FDCPA liability and refers to federal law only to the extent that it has been
incorporated by reference in the State FDCPA. The Complaint does not appear to involve the
interpretation of a federal statute, and Defendants do not argue otherwise. Above all, perhaps,
the Court cannot say that the claim implicates federal issues in such a manner that Plaintiff’s suit
“sensibly belongs in federal court.” Eastman, 438 F.3d 544 at 552 (internal quotation omitted).
Therefore, because there is no “substantial” federal question raised by Plaintiff’s claims, this suit
should be remanded to state court for lack of federal subject matter jurisdiction.1
IV.

Conclusion

In light of the foregoing, the Court GRANTS Plaintiff’s motion and REMANDS the
action to state court. Defendants’ motion to dismiss is hereby RENDERED MOOT.
IT IS SO ORDERED.

1

In his motion to remand, Plaintiff explicitly states that “all seven (7) causes of action are based
on state law.” Mot. 8. To the extent Plaintiff’s Complaint may not have been clear that the
violations of the Federal FDCPA were only incorporated by reference into the State FDCPA, the
Court notes that Plaintiff is a pro se litigant and his pleadings are thus held to “less stringent
standards.” Haines v. Kerner, 404 U.S. 519, 520 (1972); see also Draper v. Coombs, 792 F.2d
915, 924 (9th Cir. 1986) (stating that “in the case of a pro se litigant, the law requires the Court
to act with ‘great leniency’ litigant when evaluating his compliance with the technical rules of
civil procedure.”). Therefore, the Court finds that Plaintiff asserted a state cause of action only.
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