Federal National Mortgage Association v. Luna

Filing 14

ORDER by Judge Edward M. Chen Granting 3 Defendant Luna's Application to Proceed In Forma Pauperis; and Granting 8 Plaintiff's Motion to Remand. (Attachments: # 1 Certificate of Service). (emcsec, COURT STAFF) (Filed on 2/5/2013)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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FEDERAL NATIONAL MORTGAGE
ASSOCIATION,

No. C-12-6432 EMC

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Plaintiff,
v.
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For the Northern District of California

United States District Court

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MANUEL LUNA, et al.,

ORDER GRANTING DEFENDANT
LUNA’S APPLICATION TO PROCEED
IN FORMA PAUPERIS; AND
GRANTING PLAINTIFF’S MOTION TO
REMAND

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Defendants.
___________________________________/

(Docket Nos. 3, 8)

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Plaintiff Federal National Mortgage Association (“FNMA”) initiated an unlawful detainer

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action against Rosalia Garcia in San Joaquin County Superior Court. In August 2012, Defendant

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Manuel Luna removed the case to federal court, asserting that he is a tenant at the real property at

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issue. See Federal Nat’l Mortg. Ass’n v. Garcia, No. C-12-4253 SI (N.D. Cal.) (Docket No. 1) (Not.

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of Removal ¶ 1). Judge Illston remanded the case after concluding that there was no subject matter

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jurisdiction over the case. See id. (Docket No. 20) (order). Subsequently, in December 2012, Mr.

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Luna removed the same unlawful detainer case to federal court a second time – a removal which

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gave raise to the current case. Mr. Luna asks for leave to proceed in forma pauperis with respect to

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this lawsuit. Although FNMA has not yet been formally served with a copy of the complaint in this

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action, it has filed a motion to remand, which is also currently pending.1

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The Court notes that, in both Judge Illston’s case and in this case, Mr. Luna removed the
state court case to the Northern District of California. However, given that the state court case
originated in San Joaquin Superior Court, removal should have been made to the Eastern District of
California. See 28 U.S.C. § 1446(a) (providing that “[a] defendant or defendants desiring to remove

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Having considered the papers filed, as well as all other evidence of record,2 the Court finds both

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matters suitable for disposition without oral argument and VACATES the hearing set for February

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7, 2012. For the reasons discussed below, the Court GRANTS Mr. Luna’s motion to proceed in

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forma pauperis but also GRANTS FNMA’s motion to remand.

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I.
A.

DISCUSSION

Application to Proceed In Forma Pauperis

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When presented with an application to proceed in forma pauperis, a court must first

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determine if the applicant satisfies the economic eligibility requirement of 28 U.S.C. § 1915(a). See

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Franklin v. Murphy, 745 F.2d 1221, 1226 n.5 (9th Cir. 1984). Section 1915(a) does not require an
applicant to demonstrate absolute destitution. See McCone v. Holiday Inn Convention Ctr., 797 F.2d

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For the Northern District of California

United States District Court

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853, 854 (10th Cir. 1982) (citing Adkins v. E.I. Du Pont de Nemours & Co., Inc., 335 U.S. 331,

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339(1948)). Having reviewed Mr. Luna’s financial affidavit, the Court is satisfied that he has

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demonstrated that he meets the economic eligibility requirement and, accordingly, grants his

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application to proceed in forma pauperis.

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Although the Court grants the application, it has a sua sponte obligation to ensure that it has

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subject matter jurisdiction over a case. See, e.g., Corporate Mgmt. Advisors, Inc. v. Artjen

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Complexus, Inc., 561 F.3d 1294, 1296 (11th Cir. 2009) (stating that “[a] district court may remand a

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case sua sponte for lack of subject matter jurisdiction at any time”); Maniar v. Federal Deposit Ins.

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Corp., 979 F.2d 782, 784-85 (9th Cir. 1992) (noting that a district court has power to remand a case

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sua sponte when it lacks subject matter jurisdiction); Khan v. Bhutto, No. C-93-4165 MHP, 1993

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U.S. Dist. LEXIS 17678, at *1 (N.D. Cal. Dec. 6, 1993) (stating that “[a] court may deny in forma

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pauperis status under 28 U.S.C. § 1915(d) and dismiss sua sponte a claim . . . over which the court

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lacks subject matter jurisdiction”). Moreover, in its motion to remand, FNMA argues, inter alia,

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that subject matter jurisdiction is lacking. For the reasons discussed below, the Court agrees with

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any civil action from a State court shall file in the district court of the United States for the district
and division within which such action is pending a notice of removal”) (emphasis added).
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Mr. Luna failed to file an opposition to FNMA’s motion to remand.

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FNMA that it does not have subject matter jurisdiction over the case, and therefore a remand to the

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state court is warranted.

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B.

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Motion to Remand
FNMA argues first in favor of a remand because, previously, Mr. Luna removed the same

jurisdiction. FNMA acknowledges that, in the Judge Illston case, Mr. Luna seemed to remove on a

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different basis (i.e., federal question jurisdiction in the Judge Illston case as opposed to diversity

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jurisdiction here)3; it contends, however, that, as a general matter, a defendant is allowed to remove

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only one time and that “[a] second removal may be justified [only] by a change of circumstances.”

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Mot. at 4; see also Knudsen v. Liberty Mut. Ins. Co., 435 F.3d 755, 757 (7th Cir. 2006) (stating that

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For the Northern District of California

state court action to federal court, and Judge Illston remanded the case for lack of subject matter

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United States District Court

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“[a] second removal is proper when based on a new development”); S.W.S. Erectors v. Infax, Inc.,

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72 F.3d 489, 493 (5th Cir. 1996) (indicating that a second removal is appropriate “‘when subsequent

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pleadings or events reveal a new and different ground for removal’”) (emphasis omitted). See, e.g.,

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Nexbank, SSB v. BAC Home Loan Serv’g, LP, 2011 U.S. Dist. LEXIS 125897, at *15-16 (N.D. Tex.

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Oct. 28, 2011) (stating that, “[b]ecause Defendants clearly could have but did not raise this ‘new’

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improper or fraudulent pleading ground when they removed the case the first time in March 2010, it

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cannot serve as a basis for Defendants second removal in February 2011, and the case must be

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remanded”). The Court agrees with FNMA’s that Mr. Luna’s second removal is not justified. At

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the time of the first removal, Mr. Luna knew or should have been aware of the alleged facts giving

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rise to diversity jurisdiction. Therefore, this second attempt at removal (based on diversity

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jurisdiction instead of federal question jurisdiction) is improper.

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But even if the Court were to find no procedural bar to Mr. Luna’s second removal, he would

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fare no better. Even if the Court were to assume complete diversity among the parties, 28 U.S.C. §

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1332 requires that “the matter in controversy exceed[] the sum or value of $ 75,000.” 28 U.S.C. §

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1332(a). Mr. Luna has not made any showing that the damages sought by FNMA would exceed that

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Because Mr. Luna failed to file an opposition to the motion to remand, the Court looks to
his notice of removal to determine the basis for the claimed subject matter jurisdiction. The notice
of removal indicates that Mr. Luna is asserting diversity jurisdiction in the instant case.

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amount; in fact, the caption of the complaint (under the jurisdiction section) expressly states that

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FNMA seeks damages not to exceed $10,000. The fact that the property at issue may be worth more

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than $75,000 is irrelevant. If FNMA prevails in its action, Mr. Luna’s “liability will be measured by

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the fair rental value of the property for the time [he] unlawfully occupied it.” Bank United v. Peters,

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No. C 11-1756 PJH, 2011 U.S. Dist. LEXIS 54884, at *4 (N.D. Cal. May 23, 2011) (also stating that

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“the amount in controversy is not the assessed value or the sales value of the property”).

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Finally, the Court notes that, even if there were no jurisdictional bar, Mr. Luna’s removal

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was not timely effectuated and therefore a remand is appropriate. Under 28 U.S.C. § 1446, “[t]he

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notice of removal of a civil action or proceeding shall be filed within thirty days after the receipt by
the defendant, through service or otherwise, of a copy of the initial pleading . . . .” 28 U.S.C. §

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For the Northern District of California

United States District Court

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1446(b)(1). Here, papers attached to the notice of removal indicate that Mr. Luna had received the

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state court complaint before June 2012. See Docket No. 1 (Not. of Removal) (including as an

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attachment a copy of the answer to the complaint filed by Mr. Luna in state court). Mr. Luna,

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however, did not file the notice of removal in this case until approximately six months later (i.e.,

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December 2012). Even Mr. Luna’s first removal, which led to the case before Judge Illston, was

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untimely as it was not filed until August 2012. See Garcia, No. 12-4253 SI (N.D. Cal.) (Docket No.

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1) (notice of removal).

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II.

CONCLUSION

For the foregoing reasons, the Court grants Mr. Luna’s application to proceed in forma

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pauperis but also grants FNMA’s motion to remand. The case is hereby remanded to the San

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Joaquin County Superior Court.

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This order disposes of Docket Nos. 3 and 8.

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IT IS SO ORDERED.

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Dated: February 5, 2013

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_________________________
EDWARD M. CHEN
United States District Judge

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