Federal Home Loan Mortgage v. Dodd

Filing 4

FINDINGS and RECOMMENDATIONS signed by Magistrate Judge Gregory G. Hollows on 2/28/12 RECOMMENDING that 1 Notice of Removal be remanded to the Sacramento County Superior Court, 2 MOTION to PROCEED IN FORMA PAUPERIS be denied; the Clerk be directe d to serve a certified copy of this order on the Clerk of the Sacramento County Superior Court, and reference the state case number (11UD05445) in the proof of service; and be directed to close this case. Referred to Judge John A. Mendez; Objections to F&R due 14 days after being served with these findings and recommendations. (Meuleman, A)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE EASTERN DISTRICT OF CALIFORNIA

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FEDERAL HOME LOAN MORTGAGE,

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Plaintiff,

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CIV. NO. S-12-0500 JAM GGH PS

vs.

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RUSSELL DODD,
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Defendant.

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FINDINGS AND RECOMMENDATIONS
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This is an unlawful detainer action that was removed by pro se defendant Russell

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Dodd from Sacramento County Superior Court on February 27, 2012. (Dkt. No. 1.) It was

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referred to the undersigned pursuant to E.D. Cal. L.R. 302(c)(21).

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Plaintiff has requested leave to proceed in forma pauperis pursuant to 28 U.S.C.

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§ 1915. (See Dkt. No. 2.) Pursuant to 28 U.S.C. § 1915(e)(2), the court is directed to dismiss the

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case at any time if it determines the allegation of poverty is untrue, or if the action is frivolous or

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malicious, fails to state a claim on which relief may be granted, or seeks monetary relief against

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an immune defendant. After reviewing the notice of removal and its accompanying documents,

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the court concludes that it lacks subject matter jurisdiction over the action.

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Removal jurisdiction statutes are strictly construed against removal. See Libhart

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v. Santa Monica Dairy Co., 592 F.2d 1062, 1064 (9th Cir. 1979). “Federal jurisdiction must be

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rejected if there is any doubt as to the right of removal in the first instance.” Gaus v. Miles, Inc.,

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980 F.2d 564, 566 (9th Cir. 1992). “The burden of establishing federal jurisdiction falls on the

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party invoking removal.” Harris v. Provident Life and Accident Ins. Co., 26 F.3d 930, 932 (9th

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Cir. 1994).

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A defendant may remove a civil action from state court to federal district court

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only if the district court has original jurisdiction over the action, i.e. if the action originally could

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have been filed in federal court. See 28 U.S.C. § 1441(a). A district court has original

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jurisdiction over a civil action when: (1) a federal question is presented in an action “arising

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under the Constitution, laws, or treaties of the United States” or (2) there is complete diversity of

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citizenship and the amount in controversy exceeds $75,000. 28 U.S.C. §§ 1331, 1332(a).

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In regards to federal question jurisdiction, federal courts have “jurisdiction to

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hear, originally or by removal from a state court, only those cases in which a well-pleaded

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complaint establishes either that federal law creates the cause of action, or that the plaintiff’s

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right to relief necessarily depends on resolution of a substantial question of federal law.”

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Franchise Tax Board v. Construction Laborers Vacation Trust, 463 U.S. 1, 27-28 (1983). Mere

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reference to federal law is insufficient to permit removal. See Smith v. Industrial Valley Title

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Ins. Co., 957 F.2d 90, 93 (3d Cir. 1992). Also, defenses and counterclaims cannot provide a

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sufficient basis to remove an action to federal court. See Berg v. Leason, 32 F.3d 422, 426 (9th

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Cir. 1994); Takeda v. Northwestern Nat. Life Ins. Co., 765 F.2d 815, 821-22 (9th Cir. 1985); FIA

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Card Servs. v. McComas, 2010 WL 4974113 (S.D. Cal. Dec. 2, 2010).

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Here, removal cannot be based on federal question jurisdiction. The removal

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notice establishes that the state court action is nothing more than a simple unlawful detainer

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action. (See Dkt. No. 1 at 1-3. ) This court has no jurisdiction over unlawful detainer actions,

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which are strictly within the province of the state court.
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Defendant contends that federal question jurisdiction exists because defendant’s

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state court demurrer, which was apparently not sustained, depended on the determination of

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defendant’s rights and plaintiff’s duties under federal law, in particular the Protecting Tenants at

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Foreclosure Act (“PTFA”). See Pub. L. No. 111-22, § 702, 123 Stat. 1632 (2009). A state court

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demurrer is essentially the equivalent of a motion to dismiss in federal court. However,

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plaintiff’s complaint itself is strictly an action based on the California unlawful detainer statutes.

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Thus, defendant’s reference to the PTFA is best characterized as a potential defense or

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counterclaim, neither of which is considered in evaluating whether a federal question appears on

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the face of a plaintiff’s complaint.

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Any defenses based on federal law must generally be raised in the state court

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action and do not provide a basis for removal. “A case may not be removed to federal court on

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the basis of a federal defense,...even if the defense is anticipated in the plaintiff’s complaint, and

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even if both parties admit that the defense is the only question truly at issue in the case.” ARCO

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Environmental Remediation, LLC v. Dept. of Health and Environmental Quality of the State of

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Montana, 213 F.3d 1108, 1113 (9th Cir. 2000); see also Valles v. Ivy Hill Corp., 410 F.3d 1071,

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1075 (9th Cir. 2005) (“A federal law defense to a state-law claim does not confer jurisdiction on

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a federal court, even if the defense is that of federal preemption and is anticipated in the

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plaintiff’s complaint.”) Indeed, several federal district courts in California have specifically held

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that a defense based on the PTFA cannot serve as the basis for removal jurisdiction. See e.g.

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Aurora Loan Services, LLC v. Montoya, 2011 WL 5508926, at *4 (E.D. Cal. Nov. 9, 2011); SD

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Coastline LP v. Buck, 2010 WL 4809661, at **2-3 (S.D. Cal. Nov. 19, 2010); Wescom Credit

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Union v. Dudley, 2010 WL 4916578, at **2-3 (C.D. Cal. Nov. 22, 2010); Aurora Loan Services,

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LLC v. Martinez, 2010 WL 1266887, at *1 (N.D. Cal. March 29, 2010).

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Nor can the action be removed on grounds of diversity jurisdiction. Defendant is

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a citizen of California and therefore cannot remove the action from a California state court on the

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basis of diversity jurisdiction. See 28 U.S.C. § 1441(b) (“Any civil action of which the district
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courts have original jurisdiction founded on a claim or right arising under the Constitution,

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treaties or laws of the United States shall be removable without regard to the citizenship or

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residence of the parties. Any other such action shall be removable only if none of the parties in

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interest properly joined and served as defendants is a citizen of the State in which such action is

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brought.”)

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Based on the aforementioned analysis, the court finds that remand is appropriate,

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because there is no subject matter jurisdiction. In light of the above, defendant’s request to

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proceed in forma pauperis will also be denied.

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IT IS HEREBY RECOMMENDED THAT:

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1. Defendant’s request to proceed in forma pauperis (dkt. no. 2) be denied.

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2. The action be remanded to the Sacramento County Superior Court;

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3. The Clerk be directed to serve a certified copy of this order on the Clerk of the

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Sacramento County Superior Court, and reference the state case number (11UD05445) in the

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proof of service; and

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4. The Clerk be directed to close this case.

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These findings and recommendations are submitted to the United States District

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Judge assigned to the case, pursuant to the provisions of Title 28 U.S.C. § 636(b)(l). Within

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fourteen (14) days after being served with these findings and recommendations, defendant may

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file written objections with the court. Such a document should be captioned “Objections to

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Magistrate Judge’s Findings and Recommendations.” Defendant is advised that failure to file

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objections within the specified time may waive the right to appeal the District Court’s order.

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Martinez v. Ylst, 951 F.2d 1153 (9th Cir. 1991).

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DATED: 02/28/12

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/s/ Gregory G. Hollows
U.S. MAGISTRATE JUDGE
GGH/wvr
Dodd.500.ifp-fr.remand.wpd

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