Legacy Investments, L.P. v. Kartoon et al

Filing 10

ORDER FOR CLERK OF COURT TO REASSIGN CASE WITH REPORT AND RECOMMENDATIONS re 1 Notice of Removal, 5 MOTION to Remand. Objections due by 1/11/2016. Signed by Judge Maria-Elena James on 12/28/2015. (cdnS, COURT STAFF) (Filed on 12/28/2015)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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LEGACY INVESTMENTS, L.P.,

Case No. 15-cv-05950-MEJ

Plaintiff,
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ORDER FOR CLERK OF COURT TO
REASSIGN CASE

v.
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DERON KARTOON, et al.,

REPORT & RECOMMENDATION

Defendants.

United States District Court
Northern District of California

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INTRODUCTION

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On December 22, 2015, Defendants removed this unlawful detainer action from Marin

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County Superior Court. However, as it appears that jurisdiction is lacking, this case should be

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remanded to state court. As Defendants did not yet consent to magistrate judge jurisdiction, the

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Court ORDERS the Clerk of Court to reassign this case to a district judge with the

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recommendation that the case be remanded to Marin County Superior Court.

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LEGAL STANDARD
Subject matter jurisdiction is fundamental and cannot be waived. Billingsly v. C.I.R., 868

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F.2d 1081, 1085 (9th Cir. 1989). Federal courts can adjudicate only those cases which the

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Constitution and Congress authorize them to adjudicate – those involving diversity of citizenship

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or a federal question, or those to which the United States is a party. Kokkonen v. Guardian Life

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Ins. Co. of Am., 511 U.S. 375, 377 (1994); see also Chen-Cheng Wang ex rel. United States v.

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FMC Corp., 975 F.2d 1412, 1415 (9th Cir. 1992) (federal courts have no power to consider claims

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for which they lack subject-matter jurisdiction).

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Pursuant to 28 U.S.C. § 1441(a), “any civil action brought in a State court of which the
district courts of the United States have original jurisdiction, may be removed by the defendant or

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the defendants, to the district court of the United States for the district and division embracing the

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place where such action is pending.” However, the removal statutes are construed restrictively so

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as to limit removal jurisdiction. Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09

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(1941); see also Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003).

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The burden of establishing federal jurisdiction for purposes of removal is on the party seeking

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removal. Valdez v. Allstate Ins. Co., 372 F.3d 1115, 1117 (9th Cir. 2004). The district court must

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remand the case if it appears before final judgment that the court lacks subject matter jurisdiction.

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28 U.S.C. § 1447(c); Albingia Versicherungs A.G. v. Schenker Int’l, Inc., 344 F.3d 931, 936 (9th

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Cir. 2003).

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Subject matter jurisdiction is determined from the face of the complaint. Toumajian v.

United States District Court
Northern District of California

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Frailey, 135 F.3d 648, 653 n.2 (9th Cir. 1998) (“[f]or removal to be appropriate, a federal question

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must appear on the face of the complaint”); see also Caterpillar, Inc. v. Williams, 482 U.S. 386,

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392 (1987) (federal question must be presented on face of plaintiff’s properly pleaded complaint);

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Fifty Assocs. v. Prudential Ins. Co. of Am., 446 F.2d 1187, 1189-90 (9th Cir. 1970) (existence of

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diversity jurisdiction must be sufficient on the face of the complaint). Jurisdiction may not be

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based on a claim raised as a defense or a counterclaim. K2 Am. Corp. v. Roland Oil & Gas, LLC,

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653 F.3d 1024, 1029 (9th Cir. 2011).

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DISCUSSION

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Here, the face of the complaint, which asserts only one state law claim for unlawful

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detainer, does not provide any ground for removal. An unlawful detainer action, on its face, does

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not arise under federal law but is purely a creature of California law. Wells Fargo Bank v. Lapeen,

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2011 WL 2194117, at *3 (N.D. Cal. June 6, 2011); Wescom Credit Union v. Dudley, 2010 WL

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4916578, at *2 (C.D. Cal. Nov. 22, 2010).

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Further, even if Defendants alleged diversity jurisdiction, Plaintiff brought this action in

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California, as the property at issue is located in the state. Where diversity is cited as a basis for

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jurisdiction, removal is not permitted if a defendant in the case is a citizen of the state in which the

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plaintiff originally brought the action, even if the opposing parties are diverse. 28 U.S.C. §

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1441(b); Homesales, Inc. v. Amora, 2012 WL 2061923, at * 1 (N.D. Cal. June 5, 2012) (citing 28
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U.S.C. § 1441(b)(2) (stating that a civil action “removable solely on the basis of the jurisdiction

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under section 1332(a) . . . may not be removed if any of the parties in interest properly joined and

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served as defendants is a citizen of the State in which such action is brought”); Lincoln Prop. Co.

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v. Roche, 546 U.S. 81, 89 (2005)) (granting plaintiff’s motion to remand unlawful detainer case

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because defendants were California citizens and action had originally been brought in California

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state court).

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Moreover, the amount in controversy requirement does not appear to be met because the

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damages claim in this case is under $10,000. Under 28 U.S.C. § 1332(a), a district court has

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original jurisdiction over civil actions only where the amount in controversy, exclusive of interest
and costs, exceeds $75,000. In unlawful detainer actions, the amount of damages sought in the

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United States District Court
Northern District of California

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complaint, not the value of the subject real property, determines the amount in controversy, and,

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pursuant to California Code of Civil Procedure section 86(a)(4), an unlawful detainer is a limited

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civil action where the “whole amount of damages claimed” must be “twenty-five thousand dollars

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($25,000) or less.” Cal. Civ. Pro. § 86(a)(4). Thus, even where an unlawful detainer action

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involves foreclosure on a mortgage that exceeds $75,000, the amount of the mortgage does not

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satisfy the amount in controversy requirement. Deutsche Bank Nat’l Trust v. Heredia, 2012 WL

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4747157, at *2 (N.D. Cal. Oct. 3, 2012) (holding that the amount in controversy requirement was

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not met even where the mortgage was valued at over $75,000).

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Finally, an anticipated federal defense or counterclaim is not sufficient to confer

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jurisdiction. See Holmes Group v. Vornado Air Circulation Sys., Inc., 535 U.S. 826, 831 (2002);

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Franchise Tax Bd. of Ca. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 10 (1983). “A case may

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not be removed to federal court on the basis of a federal defense, . . . even if the defense is

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anticipated in the plaintiff’s complaint.” ARCO Envtl. Remediation, LLC v. Dept. of Health and

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Envtl. Quality of the State of Montana, 213 F.3d 1108, 1113 (9th Cir. 2000); see also Valles v. Ivy

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Hill Corp., 410 F.3d 1071, 1075 (9th Cir. 2005) (“A federal law defense to a state-law claim does

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not confer jurisdiction on a federal court, even if the defense is that of federal preemption and is

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anticipated in the plaintiff’s complaint.”). Thus, any anticipated defense is not a valid ground for

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removal. See e.g., Nguyen v. Bui, 2012 WL 762156, at *2 (N.D. Cal. Feb. 21, 2012) (holding that
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affirmative defenses based upon Federal Truth in Lending Act and Real Estate Settlement

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Procedures Act do not confer federal jurisdiction upon state unlawful detainer claim); Aurora

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

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asserting plaintiff violated the Protecting Tenants at Foreclosure Act does not confer federal

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jurisdiction over unlawful detainer claim).

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CONCLUSION

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As jurisdiction appears to be lacking, the hereby RECOMMENDS that this case be

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remanded to Marin County Superior Court. The Clerk of Court shall reassign this case to a district

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court judge.

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United States District Court
Northern District of California

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Pursuant to Federal Rule of Civil Procedure 72, any party may serve and file objections to
this report and recommendation within 14 days after being served with a copy.
IT IS SO ORDERED AND RECOMMENDED.

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Dated: December 28, 2015
______________________________________
MARIA-ELENA JAMES
United States Magistrate Judge

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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LEGACY INVESTMENTS, L.P.,

Case No. 15-cv-05950-MEJ

Plaintiff,
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v.

CERTIFICATE OF SERVICE

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DERON KARTOON, et al.,
Defendants.

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United States District Court
Northern District of California

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I, the undersigned, hereby certify that I am an employee in the Office of the Clerk, U.S.
District Court, Northern District of California.
That on December 28, 2015, I SERVED a true and correct copy(ies) of the attached, by
placing said copy(ies) in a postage paid envelope addressed to the person(s) hereinafter listed, by
depositing said envelope in the U.S. Mail, or by placing said copy(ies) into an inter-office delivery
receptacle located in the Clerk's office.

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Cindy Stratton Kartoon
Deron Kartoon
3 Sir Francis Drake Blvd
Ross, CA 94957

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Dated: December 28, 2015
Richard W. Wieking
Clerk, United States District Court

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By: ___________________________
Chris Nathan, Deputy Clerk to the
Honorable MARIA-ELENA JAMES

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