HBK-Willow, LLC v. Veggie Creations, Inc et al

Filing 37

(IN CHAMBERS) ORDER REMANDING CIVIL ACTION TO SUPERIOR COURT by Judge R. Gary Klausner. The above-entitled case is ordered REMANDED to the Superior Court (Case number MVC1601977) for all further proceedings for lack of subject matter jurisdiction. Case Terminated. Made JS-6 (Attachments: # 1 Letter) (ah)

JS-6

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

CV 16-1256-RGK (AJWx)

Title

HBK-WILLOW, LLC v. VEGGIE CREATIONS, INC. et al

Present: The
Honorable

Date

July 20, 2016

R. GARY KLAUSNER, U.S. DISTRICT JUDGE

Sharon L. Williams (not present)

Not Reported

N/A

Deputy Clerk

Court Reporter / Recorder

Tape No.

Attorneys Present for Plaintiffs:

Attorneys Present for Defendants:

Not Present

Not Present

Proceedings:

(IN CHAMBERS) ORDER REMANDING CIVIL ACTION TO
SUPERIOR COURT

On June 14, 2016, Defendant Veggie Creations, Inc. (“Defendant”) removed this action from
state court to federal court on the ground of diversity jurisdiction.
Removal jurisdiction is governed by statute. See 28 U.S.C. §§ 1441, et seq. The Ninth Circuit
has held unequivocally that the removal statute is construed strictly against removal. Ethridge v. Harbor
House Rest., 861 F.2d 1389, 1393 (9th Cir. 1988). 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) (citing Nishimoto v. Federman-Bachrach & Assocs., 903 F.2d
709, 712 n.3 (9th Cir. 1990)); see also In re Ford Motor Co./Citibank (South Dakota), N.A., 264 F.3d
952, 957 (9th Cir. 2001) (“The party asserting federal jurisdiction bears the burden of proving the case is
properly in federal court.”).
The Court’s review of the Complaint filed by HBK-Willow, LLC (“Plaintiff”) on June 7, 2016,
shows a discrete action for unlawful detainer, an action which exclusively invokes authority pursuant to
California statute. Federal Jurisdiction based on complete diversity requires that all parties to the action
are completely diverse in citizenship, and that the amount in controversy exceeds $75,000. In an
unlawful detainer action, where the plaintiff seeks only possession of rented property, the amount in
controversy is based solely on the rental value for the period in which the defendant is in wrongful
possession of the property. Where the plaintiff seeks possession of the rented property and forfeiture of
a lease, the amount in controversy includes not just the damages arising from wrongful possession, but
also the value of the leasehold. The value of the leasehold is generally equivalent to one year’s rent. See
Farina Focaccia & Cucina Italiana, LLC v. 700 Valencia Street LLC, 2016 WL 524805 *6 (N.D. Cal.
Feb. 10, 2016); see also Bally Total Fitness Corp. v. Contra Costa Retail Ctr., 384 B.R. 566, 571
(Bankr. N.D. Cal. 2008).
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Here, Plaintiff indicates in its Complaint that it demands possession of the premises because of
expiration of a fixed-term lease. There is no request for forfeiture of the lease. Therefore, the amount in
controversy in this action is calculated based only the rental value for the period in which Defendant is
allegedly in wrongful possession of the property. While the Complaint indicates that the amount
demanded exceeds $25,000, Defendant has failed to meet its burden of showing that the amount in
controversy exceeds $75,000.
For the foregoing reasons, the above-entitled case is ordered REMANDED to the Superior
Court for all further proceedings for lack of subject matter jurisdiction.
IT IS SO ORDERED.

:
Initials of Preparer

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