Lew v. U.S. Bank National Association et al

Filing 27

ORDER DENYING MOTION TO REMAND. Signed by Judge Richard Seeborg on 11/7/11. (Attachments: # 1 Appendix Certificate of Service)(cl, COURT STAFF) (Filed on 11/7/2011)

*E-Filed 11/7/11*

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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SAN FRANCISCO DIVISION

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No. C 11-04546 RS

JEFFREY LEW,

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For the Northern District of California

United States District Court

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ORDER DENYING MOTION TO
REMAND

Plaintiff,
v.
U.S. BANK NATIONAL ASSOCIATION,
FCI LENDER SERVICES, AND DOES 1
through 100, inclusive,
Defendants.
____________________________________/

I. INTRODUCTION
Plaintiff filed this action in the Contra Costa County Superior Court alleging violations of

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the federal Truth in Lending Act (TILA), 15 U.S.C. § 1601, and various state laws. Defendants

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removed the case to this court. Plaintiff, appearing pro se at least for purposes of removal, filed a

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document styled as an “Objection to Removal,” to which defendants replied with an opposition

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brief. Pursuant to Civil Local Rule 7-1(b), the motion is suitable for disposition without oral

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argument, and for the reasons stated below, is denied.

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II. BACKGROUND
Plaintiff Jeffery Lew filed this action on September 9, 2011, in the Contra Costa County

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Superior Court against U.S. Bank National Association and FCI Lender Services, advancing claims

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for relief for: (1-2) declaratory and injunctive relief; (3) violations of the Truth in Lending Act under

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California Financial Code § 4970 and 15 U.S.C. § 1601; (4) fraudulent omissions; (5) violations of
NO. C 11-04546 RS
ORDER DENYING MOTION TO REMAND

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California Business & Professions Code § 17200; and (6) an accounting. On September 13, 2011,

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defendants filed a notice of removal on the eve of a hearing on Lew’s motion to restrain defendants

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temporarily from proceeding with an anticipated foreclosure sale. The notice of removal deprived

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the Superior Court of jurisdiction and precluded plaintiff from obtaining temporary injunctive relief.

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The next day, Lew’s home was sold at auction. On October 13, 2011, plaintiff filed a document

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entitled “Objection to Removal,” but failed to notice it properly, as required by Local Rule 7-2

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(Notice and Supporting Papers). On October 26, defendants filed an opposition brief.
III. LEGAL STANDARD

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the district courts of the United States have original jurisdiction.” 28 U.S.C. § 1441(a). See also id.

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For the Northern District of California

A defendant may remove to federal court “any civil action brought in a State court of which

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United States District Court

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at § 1446(b) (defendant must file a notice of removal within 30 days after receiving the original

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pleading), and Provincial Gov’t of Marinduque v. Placer Dome, Inc., 582 F.3d 1083, 1087 (9th Cir.

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2009) (courts strictly construe the removal statute against finding jurisdiction and the defendant

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bears the burden of establishing the basis for removal). Removal is appropriate if a case originally

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filed in state court presents a federal question “arising under” the Constitution, treaties, or laws of

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the United States. Id. at § 1331. Caterpillar, Inc v. Williams, 482 U.S. 386, 392 (1987). Under the

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well-pleaded complaint rule, the existence of a federal question is ordinarily determined by

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reference to the face of the plaintiff’s complaint. Sparta Surgical Corp. v. Assoc. of Sec. Dealers,

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159 F.3d 1209, 1211 (9th Cir. 1998). However, the exercise of federal question jurisdiction is also

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appropriate if “it appears that some substantial, disputed question of federal law is a necessary

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element of one of the well-pleaded state claims.” Franchise Tax Bd. of State of Cal. v. Construction

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Laborers Vacation Trust for So. Cal., 436 U.S. 1, 13 (1983). But see Rains v. Criterion Sys., Inc.,

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80 F.3d 339, 346 (9th Cir. 1996) (“when a claim can be supported by alternative and independent

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[state and federal] theories federal question jurisdiction does not attach because federal law is not a

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necessary element of the claim”).

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When a plaintiff asserts both state and federal claims, “the entire case may be removed and

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the district court may determine all issue therein, or, in its discretion, may remand all matters in

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which State law predominates.” Id. at § 1441(c). Under § 1367(a), the Ninth Circuit has
NO. C 11-04546 RS
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emphasized, “the district courts shall have supplemental jurisdiction over all other claims that are so

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related to claims in the action within such original jurisdiction that they form part of the same case

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or controversy under Article III of the United States Constitution.” Executive Software North

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America, Inc. v. U.S. Dist. Court for Central District of California, 24 F.3d 1545, 1557 (9th Cir.

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1994) (emphasis in original), citing § 1367(a). Thus, the district courts may only decline to exercise

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supplemental jurisdiction over state law claims that arise from the same case or controversy if: “(1)

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the claim raises a novel or complex issue of State law, (2) the claim substantially predominates over

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the claim or claims over which the district court has original jurisdiction, (3) the district court has

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dismissed all claims over which it has original jurisdiction, or (4) in exceptional circumstances,
there are other compelling reasons for declining jurisdiction.” Id. at § 1367(c). These provisions,

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For the Northern District of California

United States District Court

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sometimes referred to as the Gibbs factors, are interpreted and applied so as to promote judicial

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“economy, convenience, fairness, and comity.” Executive Software, 24 F.3d at 1557, quoting

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United Mine Workers of America v. Gibbs, 383 U.S. 715, 726 (1966).

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IV. DISCUSSION
As a threshold matter, plaintiff’s “Objection to Removal,” filed pro se, is properly construed

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as a motion to remand under 28 U.S.C. § 1447(c). See Abassi v. I.N.S., 305 F.3d 1028, 1032 (9th

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Cir. 2002) (“we have consistently held that procedural requirements should be more liberally

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construed for pro se litigants”). Such a construction is particularly appropriate in present

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circumstances given the Court’s own ongoing duty to ensure that the values of judicial economy,

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convenience, fairness, and comity are served by the exercise of supplemental jurisdiction over

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related state law claims. Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350 (1988).

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Turning to the merits of Lew’s objections to removal, his third claim for relief, by its own

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express terms, accuses defendants of violating TILA, 15 U.S.C. § 1601, and related administrative

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regulations. Such a claim, squarely based on federal law, suffices to create a federal question for

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removal purposes under § 1441(a). Although the heading of plaintiff’s third claim for relief cites

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both TILA and California Financial Code § 4970, the content of his complaint forecloses the

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possibility that he has alleged “alternative and independent” state and federal bases for relief. Rains,

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80 F.3d at 346. First, apart from that single title reference to state law, the paragraphs that follow
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address federal law and administrative regulations exclusively. Second, this is not the exceptional

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case where, despite the complaint’s repeated references to, and extended discussion of, federal law,

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Lew’s claims for relief actually sound in state law. Id. at 343 (no federal question jurisdiction where

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state law claim for violation of public policy was predicated on state and federal law, alternatively).

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Further, plaintiff is simply mistaken in asserting that removal is proper only if his complaint asserts

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claims exclusively arising under federal law. The rule is, rather, that if even a single claim for relief

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sounds in federal law, §§ 1441(c) and 1367(a) potentially confer supplemental jurisdiction over the

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entire case. It follows that the Court possesses original jurisdiction over at least plaintiff’s third

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claim for relief.
Lew’s other claims are closely related to his third claim for relief. His factual allegations,

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For the Northern District of California

United States District Court

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according to the complaint, apply “to all causes of actions,” and are incorporated by reference into

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each claim. More fundamentally, there is no doubt that each of Lew’s claims concerns the

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defendants’ alleged failure to disclose adequately the terms of his loan. In other words, plaintiff’s

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“state and federal claims derive from a common nucleus of operative fact and are the types of claims

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the Court would ordinarily be expected to try together in one proceeding.” Executive Software, 24

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F.3d at 1563. Accordingly, the exercise of supplemental jurisdiction over plaintiff’s state law

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claims is mandated by the Ninth Circuit’s interpretation of § 1367(a), as set forth in Executive

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Software. Id. at 1557.

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The Gibbs factors do not justify remand. See § 1367(c)(1)-(4). First, plaintiff’s claims do

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not present novel or complex issues of state law. Rather, the questions presented by this case are,

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sadly, all too familiar to state and federal courts awash in foreclosure-related litigation. Second,

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without prejudging the merits of the case, it is apparent that Lew’s TILA claim is likely to be the

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most substantial of all, in terms of the complexity and scope of the issues presented. Therefore it

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cannot be said that his state law claims “substantially predominate.” The third Gibbs factor is

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inapplicable. As for the fourth factor, the Ninth Circuit has severely limited the scope of the district

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court’s discretion under § 1367(c)(4). Executive Software, 24 F.3d at 1557-60. In particular, a court

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may decline to exercise supplemental jurisdiction over related state law claims only if there is: (1) a

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predicate finding of “exceptional circumstances,” and (2) a rationale for declination (e.g., “other
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compelling reasons”) that is directed to promoting “economy, convenience, fairness, and comity.”

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Id. at 1557-60. As noted above, there is little exceptional about the circumstances of this case.

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Moreover, because plaintiff’s various claims all arise from the same set of facts, it is clear that

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judicial economy and the convenience of the parties are best served by exercising supplemental

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jurisdiction over the entire case. Finally, although the defendants in this case have, in a sense,

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pulled the rug out from the plaintiff by divesting the state court of jurisdiction at the last moment, a

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review of the relevant authority indicates that such strategic maneuvering is not the kind of

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unfairness to which § 1367(c)(4) is directed. See, e.g., Arista Records LLC v. Lime Group LLC, 532

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F. Supp. 2d 556, 585 (S.D.N.Y. 2007) (declining to exercise supplemental jurisdiction to discourage
strategic filing of attenuated counterclaims). Accordingly, plaintiff’s motion to remand must be

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For the Northern District of California

United States District Court

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denied as to all claims.
V. CONCLUSION

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For all of the reasons discussed above, plaintiff’s motion to remand is denied.

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IT IS SO ORDERED.

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Dated: 11/7/11
RICHARD SEEBORG
UNITED STATES DISTRICT JUDGE

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NO. C 11-04546 RS
ORDER DENYING MOTION TO REMAND

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