Cason v. California Check Cashing Stores

Filing 16

ORDER VACATING JUDGMENT IN CASE NO. C-13-03388 JCS AND REMANDING CASE NO. C-14-00630 JCS TO STATE COURT. Signed by Judge Joseph C. Spero on April 4, 2014. (jcslc1, COURT STAFF) (Filed on 4/4/2014)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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JAMES K. CASON,

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Plaintiff,

Case No. C-14-00630 JCS
Related Case No. C-13-03388 JCS

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v.
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CALIFORNIA CHECK CASHING
STORES,

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Defendant.

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United States District Court
Northern District of California

ORDER VACATING JUDGMENT IN
CASE NO. C-13-03388 JCS AND
REMANDING CASE NO. C-14-00630
JCS TO STATE COURT

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I.

INTRODUCTION
On February 28, 2014, Defendant California Check Cashing Stores filed a Motion to

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Dismiss Plaintiff‟s Complaint under Rule 12(b)(6) for Failure to State a Claim (“Motion to

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Dismiss”) seeking dismissal of Plaintiff‟s complaint with prejudice. Subsequently, the

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undersigned issued an Order to Show Cause why it should not vacate the judgment it previously

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entered in Related Case No. C-13-03388 JCS on the basis that the judgment in that case was

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entered in error and remand Case No. C-14-00630 to state court. A hearing was held on Friday,

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April 4, 2014 at 2:00 p.m. For the reasons stated below, the Court vacates the judgment that was

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entered in Related Case No. C-13-03388 JCS [Docket No. 10] and remands Case No. C-14-00630

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JCS to the Alameda County Superior Court.1 The Court does not rule on Defendant‟s Motion to

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Dismiss.

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II.

This case is related to an earlier case, Case No. C-13-03388 JCS (“Cason I”). In Cason I,

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BACKGROUND

Plaintiff asserted jurisdiction on the basis of diversity; he did not check the box for “federal

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The parties have consented to the jurisdiction of the undersigned United States Magistrate Judge
pursuant to 28 U.S.C. § 636(c).

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question jurisdiction” on his form complaint.2 On October 11, 2013, the Court issued an order

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(“the October 11 Dismissal Order”) dismissing Plaintiff‟s complaint in Cason I. The undersigned

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found that there was no subject matter jurisdiction over Plaintiff‟s claims because the amount-in-

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controversy requirement for diversity jurisdiction was not met. Case No. C-13-3388 JCS, Docket

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No. 9. Although there was a passing reference to “15 USC Chapter 41, Consumer Credit

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Protection” in a Notice of Intent that was attached as an exhibit to the Complaint (hereinafter,

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“Notice of Intent”), the Court noted that Plaintiff did not assert any specific claim under the

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Consumer Credit Protection Act in his complaint. Therefore, the Court did not address the

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question of whether Plaintiff might be able to establish subject matter jurisdiction on the basis of a
federal question. Because the Court lacked subject matter jurisdiction, the Court did not address

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United States District Court
Northern District of California

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whether any of Plaintiff‟s claims were sufficiently pled under Rule 12(b)(6) of the Federal Rules

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of Civil Procedure. The Court dismissed the complaint with leave to amend within 30 days. Mr.

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Cason did not amend the complaint. On December 3, 2013, this Court erroneously entered final

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judgment against Plaintiff in Cason I. 3
On December 31, 2013, Plaintiff filed another action (“Cason II”), in Alameda Superior

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Court, based on the same events as were at issue in Cason I. The form complaint listed the

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following (state law) claims: breach of contract, breach of warranty, coercion, negligent infliction

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of emotional distress and intentional infliction of emotional distress. The same Notice of Intent

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(discussed above) was attached as an exhibit to the complaint in the state court action – along with

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many other exhibits. Invoking the reference to “15 USC Chapter 41, Consumer Credit Protection”

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in the Notice of Intent, Defendant removed the action to federal court on the basis of federal

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question jurisdiction. Defendant subsequently brought the instant Motion to Dismiss asserting

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that: 1) Plaintiff‟s complaint was barred under the doctrine of res judicata because judgment had

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been entered in Cason I; 2) Plaintiff‟s complaint lacks a cognizable federal action; and 3) the state

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The factual allegations in Cason I are set forth in the Court‟s October 11, 2013 order dismissing
that case and therefore are not repeated here.
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Defendant suggests the Court may have entered judgment as a sanction under its inherent powers
for failure to prosecute. In fact, the entry of judgment in Case No. C-13-03388 JCS was not
intended as a sanction for failure to prosecute but was merely a clerical error.
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law claims are insufficiently pled.
On March 28, 2014, the Court issued an Order to Show Cause why: 1) the judgment in

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Cason I should not be vacated; and 2) Cason II should not be remanded to state court. Defendant

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filed a response on April 2, 2014. Defendant responded that the judgment in Cason I was proper

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to the extent it was entered as a sanction based on Plaintiff‟s failure to amend his complaint in the

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earlier action. Defendant further argued that Cason II should not be remanded because Plaintiff

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asserts a claim under the Consumer Credit Protection Act even if it is not sufficiently alleged.

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III.

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ANALYSIS
A.

Whether the Court Should Vacate the Judgment in Cason I

The Ninth Circuit has held that it is “well settled that a judgment is void if the court that

United States District Court
Northern District of California

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considered it lacked jurisdiction of the subject matter. . . .” Watts v. Pinckney, 752 F.2d 406, 409

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(9th Cir. 1985) (quotations and citations omitted). Further, where the court discovers that a

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judgment is void, it may vacate the judgment, sua sponte, pursuant to Rule 60(b) of the Federal

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Rules of Civil Procedure, so long as the party that obtained the judgment is first given notice and

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an opportunity to be heard. Kingvision Pay-Per-View Ltd. v. Lake Alice Bar, 168 F.3d 347, 352

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(9th Cir. 1999). In the October 11 Dismissal Order, the Court specifically found that it lacked

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subject matter jurisdiction over Cason I. Accordingly, the Court did not have the authority to

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enter judgment against Plaintiff. Having considered Defendant‟s response to the Court‟s Order to

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Show Cause, the Court concludes that the judgment in Cason I is void and therefore VACATES

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the judgment that was entered in that action under Rule 60(b) of the Federal Rules of Civil

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Procedure.

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B.

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“Except as otherwise expressly provided by Act of Congress, any civil action brought in a

Whether the Court Should Remand Cason II to State Court

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State court of which the district courts of the United States have original jurisdiction, may be

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removed by the defendant or the defendants, to the district court of the United States for the

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district and division embracing the place where such action is pending.” 28 U.S.C. § 1441(a).

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The Ninth Circuit “strictly construe[s] the removal statute against removal jurisdiction.” Gaus v.

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Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (citations omitted). Thus, “[f]ederal jurisdiction
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must be rejected if there is any doubt as to the right of removal in the first instance.” Id. (citations

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omitted). “The „strong presumption‟ against removal jurisdiction means that the defendant always

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has the burden of establishing that removal is proper.” Id. (citations omitted). Where removal

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jurisdiction is lacking, the district court must remand the action to state court. 28 U.S.C. §

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1447(b) (“[i]f at any time before final judgment it appears that the district court lacks subject

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matter jurisdiction, the case shall be remanded”).

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Removal jurisdiction may be based on diversity of citizenship or on the existence of a
federal question. 28 U.S.C. § 1441. Whether removal jurisdiction exists must be determined by

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reference to the well-pleaded complaint. Merrell Dow Pharms., Inc. v. Thompson, 478 U.S. 804,

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808 (1986). “Federal courts have repeatedly held that vague, ambiguous, or passing references to

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United States District Court
Northern District of California

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federal law in a complaint are not sufficient to support removal based on federal question

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jurisdiction.” Shelley's Total Body Works v. City of Auburn, 2007 WL 765205, at *2 (W.D.Wash.,

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March 9, 2007) (citing Casey v. Midwest Title Serv., Inc., 2006 WL 2862457 at *2 (N.D .Okla.

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Oct. 4, 2006) (“Vague references to federal law in the complaint and notice of removal will not

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suffice to create federal question jurisdiction”); Patterson v. Campbell, 2006 WL 354974 at *3

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(M.D.Tenn. Feb. 14, 2006) (“ambiguity defeats removal”); Maguire v. Telcom Global Solutions,

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2003 WL 124475 at *3 (N.D.Tex. Jan. 10, 2003) (“vague reference to federal law is simply

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insufficient to satisfy [Defendant's] burden of establishing that this case involves a federal

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question”); Matthews v. Stewart, 207 F.Supp.2d 496, 499 (M.D.La.2001) (“In this court of limited

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jurisdiction, a passing reference to federal laws is insufficient to confer jurisdiction”); Rabinowitz

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v. Benson, 1992 WL 309808 at *1 (S.D.N.Y.1992) (removal improper where “complaint made

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only a vague reference to federal law, without specifically alleging a cause of action” under

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federal law)).

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Defendant removed Cason II from state court on the basis that Plaintiff asserted a federal

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claim. It is clear from the face of the complaint, however, that Plaintiff asserted only state law

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claims. “Jurisdiction may not be sustained on a theory that the plaintiff has not advanced.”

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Merrell Dow Pharm. Inc. v. Thompson, 478 U.S. 804, 809 n. 6 (1986). The only reference to any

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federal statute is the passing reference to “15 USC Chapter 41, Consumer Credit Protection” in an
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exhibit to the complaint. As discussed above, however, the existence of a federal question is

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determined from the face of the complaint. Further, the reference is so vague and ambiguous that

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it would not give rise to federal question jurisdiction even if it were contained in the body of the

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complaint rather than an exhibit. Accordingly, the Court concludes that there is no removal

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jurisdiction of this action, which must be remanded to the state court where it was originally filed.

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IV.

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CONCLUSION
For the reasons stated above, the Court VACATES the judgment previously entered in

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Related Case No. C-13-03388 JCS, Docket No. 10. The Court REMANDS Case No. C-14-00630

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JCS to the Superior Court for the County of Alameda.

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IT IS SO ORDERED.

United States District Court
Northern District of California

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Dated: April 4, 2014

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______________________________________
JOSEPH C. SPERO
United States Magistrate Judge

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