Spotted Bull Trust #29552 v. Pamela Stein et al

Filing 4

MINUTE ORDER IN CHAMBERS by Judge Cormac J. Carney: ORDER remanding case to Superior Court of California, Orange County for Lack of Subject Matter Jurisdiction, Case number 30-02013-00665738. Case Terminated. Made JS-6 (twdb)

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

JS-6

CIVIL MINUTES – GENERAL
Case No. SACV 13-01625-CJC(JPRx)

Date: October 22, 2013

Title: SPOTTED BULL TRUST #29552, SOUTHLAND HOMES REAL ESTATE AND
INVESTMENT AS TRUSTEE V. PAMELA STEIN, ET AL.

PRESENT:
HONORABLE CORMAC J. CARNEY, UNITED STATES DISTRICT JUDGE
Michelle Urie
Deputy Clerk
ATTORNEYS PRESENT FOR PLAINTIFF:

None Present

N/A
Court Reporter
ATTORNEYS PRESENT FOR DEFENDANT:

None Present

PROCEEDINGS: (IN CHAMBERS) ORDER REMANDING CASE FOR LACK
OF SUBJECT MATTER JURISDICTION
Plaintiff Spotted Bull Trust #29552, Southland Homes Real Estate and Investment
As Trustee (“Southland”) filed this state law action for unlawful detainer against
Defendants Pamela and Richard Stein in Orange County Superior Court on July 31, 2013,
seeking less than $10,000 in damages. (Dkt. No. 1 [Notice of Removal], Compl. for
Unlawful Detainer [“Compl.”].) Southland seeks possession of the property at 29552
Spotted Bull Ln., San Juan Capistrano, California, which was sold to Southland at a
Trustee’s Sale on July 24, 2013. (Compl. ¶¶ 5−6.) On October 17, 2013, Ms. Stein,
acting pro se, removed the action to federal court, alleging both federal question and
diversity jurisdiction. (Notice of Removal.) In her Notice of Removal, Ms. Stein asserts
counterclaims against Southland for violation of the Real Estate Settlement Procedures
Act, 12 U.S.C. § 2601 et seq. (Notice of Removal at 2.) For the reasons discussed
below, the Court, on its own motion, REMANDS this action to Orange County Superior
Court.
Whether subject matter jurisdiction exists may be raised by the Court sua sponte at
any time. See Fed. R. Civ. P. 12(h)(3) (“If the court determines at any time that it lacks
subject-matter jurisdiction, the court must dismiss the action.”). A defendant may
remove a civil action filed in state court to a federal district court if the federal court may
exercise original jurisdiction over the action. 28 U.S.C. § 1441(b). A federal court can

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. SACV 13-01625-CJC(JPRx)

Date: October 22, 2013
Page 2

assert subject matter jurisdiction over cases that (1) involve questions arising under
federal law or (2) are between diverse parties and involve an amount in controversy that
exceeds $75,000. 28 U.S.C. §§ 1331, 1332. The defendant removing the action to
federal court bears the burden of establishing that the district court has subject matter
jurisdiction over the action, and the removal statute is strictly construed against removal
jurisdiction. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (“Federal jurisdiction
must be rejected if there is any doubt as to the right of removal in the first instance.”).
Federal question jurisdiction is determined under the “well-pleaded complaint
rule,” under which “federal jurisdiction exists only when a federal question is presented
on the face of plaintiff’s properly pleaded complaint.” Caterpillar, Inc. v. Williams, 482
U.S. 386, 392 (1987). Thus, “[t]he rule makes the plaintiff the master of the claim; he or
she may avoid federal jurisdiction by exclusive reliance on state law.” Id. Here, Ms.
Stein has failed to meet her burden of establishing federal question jurisdiction. This
case appears to be a straightforward action for unlawful detainer, a state law claim.
Southland does not bring a single cause of action arising under federal law, and the
federal statute cited by Ms. Stein is entirely absent from Southland’s Complaint. Ms.
Stein appears to invoke federal question jurisdiction by way of her counterclaim against
Southland under the federal Real Estate Settlement Procedures Act, but a counterclaim
cannot form the basis for federal question jurisdiction. See Holmes Grp., Inc. v. Vornado
Air Circulation Sys., Inc., 535 U.S. 826, 832 (2002); Sullivan v. First Affiliated Sec., Inc.,
813 F.2d 1368, 1371 (9th Cir. 1987). Because there are no federal questions on the face
of Southland’s well-pleaded Complaint, there is no federal question jurisdiction.
Ms. Stein also appears to invoke diversity jurisdiction.1 A district court has
original “diversity” subject matter jurisdiction over all “civil actions where the matter in
controversy exceeds the sum or value of $75,000, exclusive of interests and cost,” and the
action is “between citizens of different States.” 28 U.S.C. § 1332(a)(1). The district
court has jurisdiction only if there is “complete diversity” between the parties, meaning
that each plaintiff is a citizen of a different state from each defendant. See id.;
Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 (1996) (citing Strawbridge v. Curtiss, 3
Cranch. 267 (1806)). “[W]here it is unclear or ambiguous from the face of a state-court
1

Although the Notice of Removal’s Venue and Jurisdiction section invokes only federal
question jurisdiction under 28 U.S.C. § 1331, the Notice of Removal’s Prayer for Relief invokes
jurisdiction under 28 U.S.C. § 1332(a) and alleges that the amount in controversy exceeds
$75,000.

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. SACV 13-01625-CJC(JPRx)

Date: October 22, 2013
Page 3

complaint whether the requisite amount in controversy is pled[,] . . . [a federal court]
appl[ies] a preponderance of the evidence standard. Guglielmino v. McKee Foods Corp.,
506 F.3d 696, 699 (9th Cir. 2007) (citing Sanchez v. Monumental Life Ins. Co., 102 F.3d
398, 404 (9th Cir. 1996)). There is no binding precedent in the Ninth Circuit, however,
as to the evidentiary standard to be applied where, as here, the complaint affirmatively
alleges that the amount in controversy is less than the jurisdictional threshold.2
Ms. Stein has failed to satisfy either of the two basic elements of diversity
jurisdiction. First, she has failed to demonstrate complete diversity of the parties. Her
Notice of Removal asserts that all Defendants reside in Orange County, California and
that Southland “is a corporation that is licensed to do business in the state of California or
otherwise conducts business in the state of California.” (Notice of Removal ¶¶ 1−4.)
Nowhere does the Notice of Removal assert that Southland is a citizen of a state other
than California. Further, Ms. Stein has failed to demonstrate that the amount in
controversy exceeds $75,000. Southland’s Complaint alleges that the amount of
controversy is under $10,000, (Compl. at 1), and Ms. Stein offers no evidence to support
the Notice of Removal’s conclusory allegation that the amount in controversy exceeds
$75,000. Thus, Ms. Stein has failed to demonstrate that the amount in controversy
exceeds the jurisdictional threshold either by a preponderance of the evidence or to a
legal certainty. Accordingly, this Court lacks diversity jurisdiction.
//
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2

In Lowdermilk v. U.S. Bank Nat’l Ass’n, 479 F.3d 994 (9th Cir.2007), the Ninth Circuit
adopted “legal certainty” as the standard of proof in CAFA cases where a state court complaint
affirmatively alleges that the amount in controversy is less than CAFA’s jurisdictional minimum.
In its recent decision in Rodriguez v. AT&T Mobility Services LLC, however, the Ninth Circuit
held that Lowdermilk has been effectively overruled by the Supreme Court’s decision in
Standard Fire Insurance Co. v. Knowles, __ U.S. __, 133 S. Ct. 1345 (2013). 728 F.3d 975, 977
(9th Cir. 2013). Standard Fire’s reasoning was limited to the class action context; thus, it did not
foreclose use of the legal certainty standard in cases invoking ordinary diversity jurisdiction
under 28 U.S.C. § 1332(a). See Standard Fire, 133 S. Ct. at 1349. In any event, because the
Court finds that Ms. Stein has failed to satisfy even the less demanding “preponderance of the
evidence” standard, the Court need not decide which standard applies in this case.

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. SACV 13-01625-CJC(JPRx)

Date: October 22, 2013
Page 4

For the foregoing reasons, the Court REMANDS this action to Orange County
Superior Court.

jcm
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CIVIL-GEN

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