Baldini Real Estate, Inc. v. Torres
Filing
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Order by Magistrate Judge Laurel Beeler granting in part and denying in part 6 Motion to Remand. The court remands the case to the Superior Court of California, County of San Mateo. The court denies the plaintiff's requests to designa te the defendant a vexatious litigant, impose a prefiling order, order sanctions, and consider the decision final for purposes of collateral estoppel. (lblc1S, COURT STAFF) (Filed on 12/20/2016) (Additional attachment(s) added on 12/20/2016: # 1 Certificate/Proof of Service) (lsS, COURT STAFF).
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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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San Francisco Division
United States District Court
Northern District of California
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BALDINI REAL ESTATE, INC.,
Case No. 16-cv-06771-LB
Plaintiff,
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ORDER GRANTING IN PART THE
PLAINTIFF’S MOTION TO REMAND
v.
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ERMELIZA S. TORRES,
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Defendant.
Re: ECF No. 6
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INTRODUCTION & BACKGROUND
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This is an unlawful-detainer case removed by the defendant-possessor.1 Baldini Real Estate,
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Inc. bought a piece of Daly City, California property in a foreclosure sale after Ermeliza Torres
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defaulted on the deed of trust.2 Baldini served Ms. Torres with a three-day notice to quit.3 Ms.
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Torres, however, is still in possession of the property, and so Baldini filed an unlawful-detainer
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complaint in state court.4 Baldini demands damages of $100 per day from the notice-to-quit
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See Notice of Removal — ECF No. 1. Record citations refer to material in the Electronic Case File
(“ECF”); pinpoint citations are to the ECF-generated page numbers at the top of documents.
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Compl. — ECF No. 1 at 8–11, ¶ 6.
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Id. ¶¶ 8, 10.
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Id. ¶ 10.
ORDER — No. 16-cv-06771-LB
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expiration date (starting on October 3, 2016) through the date of judgment; so far, approximately
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$7,800.5
Ms. Torres then removed the case to this court.6 She asserts that removal was proper and that
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the court has federal-question subject-matter jurisdiction.7 But Baldini disagrees: it moves to
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remand the case because Mr. Torres did not comply with required removal procedures and the
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court lacks jurisdiction.8 Baldini also asks the court to declare Ms. Torres a vexatious litigant and
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impose sanctions.9
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On Baldini’s motion, the court moved the hearing date from January 5, 2017 to December 22,
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2016.10 The deadline for Ms. Torres’s opposition brief remained December 15, but she did not file
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one. Ms. Torres did, however, consent to the undersigned’s jurisdiction.11
United States District Court
Northern District of California
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The court can decide the matter without oral argument and vacated the hearing. See N.D. Cal.
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Civ. L.R. 7-1(b).12 Because the court lacks subject-matter jurisdiction, the court remands the case
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to the Superior Court of California, County of San Mateo. The court denies Baldini’s request to
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declare Ms. Torres a vexatious litigant and impose a prefiling order and sanctions.
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ANALYSIS
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1. Removal Was Improper Because the Court Does Not Have Subject-Matter Jurisdiction
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1.1 Removal Jurisdiction Legal Standard
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A defendant in state court may remove an action to federal court if the action could have been
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filed originally in federal court. 28 U.S.C. § 1441(b). The defendant has the burden of proving the
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basis for the federal court’s jurisdiction, and, generally, “the removal statute is strictly construed
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Id. ¶¶ 8–10, 12, Prayer ¶ 2.
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See generally Notice of Removal.
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Id. ¶ 3.
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Motion to Remand — ECF No. 6 at 6–8.
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Id. at 8–10.
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Order — ECF No. 16.
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Consent — ECF No. 17.
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Clerk’s Notice — ECF No. 18.
ORDER — No. 16-cv-06771-LB
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against removal jurisdiction.” Nishimoto v. Federman–Bachrach & Assocs., 903 F.2d 709, 712 n.3
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(9th Cir. 1990); see also Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108–09 (1941).
Original jurisdiction may be based on diversity or a federal question. See Caterpillar Inc. v.
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Williams, 482 U.S. 386, 392 (1987). For diversity jurisdiction, the opposing parties must be
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citizens of different states and the amount in controversy must exceed $75,000. 28 U.S.C.
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§ 1332(a). There will be federal-question jurisdiction if the case “aris[es] under the Constitution,
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laws, or treaties of the United States.” 28 U.S.C. § 1331. The “well-pleaded complaint” rule
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requires a federal question to be presented on the face of the plaintiff’s complaint at the time of
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removal for federal-question jurisdiction to exist. Metropolitan Life Ins. Co. v. Taylor, 481 U.S.
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58, 63 (1987); Duncan v. Stuetzle, 76 F.3d 1480, 1485 (9th Cir. 1996). An actual or anticipated
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United States District Court
Northern District of California
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federal defense is not sufficient to confer jurisdiction. Franchise Tax Bd. of Cal. v. Constr.
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Laborers Vacation Trust, 463 U.S. 1, 10 (1983); Hunter v. Phillip Morris USA, 582 F.3d 1039,
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1042–43 (9th Cir. 2009). Similarly, federal-question jurisdiction cannot rest upon an actual or
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anticipated counterclaim. Vaden v. Discover Bank, 556 U.S. 49, 60 (2009). That said, a plaintiff
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may not defeat removal by omitting necessary federal questions from his or her complaint.
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Franchise Tax Bd. of Cal., 463 U.S. 1 at 22.
If there is a defect in the removal procedure or in the court’s jurisdiction, the plaintiff may
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move to remand the case to state court. 28 U.S.C. § 1447(c).
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1.2 The Court Lacks Diversity Jurisdiction
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Ms. Torres does not claim that this case exhibits diversity jurisdiction.
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Ms. Torres resides in California.13 She alleges that Baldini Real Estate is licensed to do
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business in the State of California and does business here.14 It is unclear if the parties are diverse
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but they probably are not. Moreover, because Ms. Torres lives in California, she is likely a
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Notice of Removal ¶ 1
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Id. ¶¶ 2–3.
ORDER — No. 16-cv-06771-LB
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California citizen and cannot remove a case from California state court on the basis of diversity
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jurisdiction. See 28 U.S.C. § 1441(b)(2).
In any event, the amount in controversy is not satisfied. In unlawful detainer actions, the right
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to possession of the property is contested, not title to the property, and the plaintiff may collect
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only damages that are incident to that unlawful possession. See Litton Loan Servicing, L.P. v.
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Villegas, No. C 10-5478 PJH, 2011 WL 204322, at *2 (N.D. Cal. Jan. 21, 2011) (citing Evans v.
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Superior Court, 67 Cal. App. 3d 162, 170 (1977)). Here, with damages accumulating at a rate of
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$100 per day beginning on October 3, 2016, (totaling approximately $7,800 to date), the amount
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in controversy is not satisfied.15 There is no diversity jurisdiction.
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United States District Court
Northern District of California
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1.3 The Court Lacks Federal-Question Jurisdiction
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Ms. Torres does invoke federal-question jurisdiction.16 The notice of removal states: “This
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court . . . has jurisdiction under 28 U.S.C. § 1331 pursuant to 12 U.S.C. § 2605.13.”17 And in the
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notice of removal, Ms. Torres asserts that Baldini violated the Real Estate Settlement Procedures
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Act (“RESPA”).18 But this does not confer federal jurisdiction: the complaint asserts only a claim
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for unlawful detainer.19 Unlawful detainer claims do not arise under federal law and, without
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more, the court lacks federal-question jurisdiction. See, e.g., GMAC Mortg., LLC v. Rosario, No.
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C 11-1894 PJH, 2011 WL 1754053, at *2 (N.D. Cal. May 9, 2011); Fed. Nat’l Mortg. Assoc. v.
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Lopez, No. C 11-00451 WHA, 2011 WL 1465678, at *1 (N.D. Cal. Apr. 15, 2011); Wescom
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Credit Union v. Dudley, No. CV 10-8203 GAF (SSx), 2010 WL 4916578, at *2 (C.D. Cal. Nov.
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22, 2010). Ms. Torres’s RESPA argument — whether raised as a defense or counterclaim — does
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not change this outcome. See Vaden, 556 U.S. at 60.
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Compl. ¶¶ 8–12.
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Notice of Removal ¶ 3.
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Id.
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Id. ¶ 6.
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See generally Compl.
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ORDER — No. 16-cv-06771-LB
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The court does not have diversity or federal-question jurisdiction. The court therefore remands
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the case to the San Mateo County Superior Court.
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2. The Court Denies Baldini’s Request to Designate Ms. Torres as a Vexatious Litigant, to
Require a Bond, and to Impose Sanctions
2.1 Vexatious Litigant and Prefiling Order
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Baldini asks the court to declare Ms. Torres a vexatious litigant, pointing to California Civil
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Procedure Code section 391(b)(3)’s definition of a vexatious litigant as “a person who . . . [i]n any
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litigation while acting in propria persona, repeatedly files unmeritorious motions, pleadings, or
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other papers, conducts unnecessary discovery, or engages in other tactics that are frivolous or
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United States District Court
Northern District of California
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solely intended to cause unnecessary delay.”20 It asks for a prefiling order to prevent Ms. Torres
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from again removing the case.21
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The district court has inherent power under the All Writs Act, 28 U.S.C. § 1651(a), to issue
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writs (such as the requested prefiling order) “necessary and appropriate” in aid of its jurisdiction to
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prevent litigants who file frivolous lawsuits from continuing to do so. See Molski v. Evergreen
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Dynasty Corp., 500 F.3d 1047, 1057 (9th Cir. 2007) (citing Weissman v. Quail Lodge Inc., 179
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F.3d 1194, 1197 (9th Cir. 1999)).
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“Flagrant abuse of the judicial process cannot be tolerated because it enables one person to
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preempt the use of judicial time that properly could be used to consider the meritorious claims of
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other litigants.” De Long v. Hennessey, 912 F.2d 1144, 1148 (9th Cir. 1990). Nonetheless, “pre-
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filing orders should rarely be filed” because such orders could impose a “substantial burden on the
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free-access guarantee” under the First Amendment, which is “one of the most precious of the
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liberties safeguarded by the Bill of Rights.” Ringgold-Lockhart v. Cnty. of Los Angeles, 761 F.3d
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1057, 1061–62 (9th Cir. 2014) (internal citations omitted and quotations omitted). Prefiling orders
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are therefore an extreme remedy and “courts should not enter [them] with undue haste.” Molski,
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Motion to Remand at 8–9.
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Id. at 9–10.
ORDER — No. 16-cv-06771-LB
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500 F.3d at 1057 (citations omitted). “A court should enter a pre-filing order constraining a
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litigant’s scope of actions in future cases only after a cautious review of the pertinent
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circumstances.” Id.
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Accordingly, “orders restricting a person’s access to the courts must be based on adequate
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justification supported in the record and narrowly tailored to address the abuse perceived.” De
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Long, 912 F.2d at 1149. A prefiling “injunction cannot issue merely upon a showing of
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litigiousness.” Moy v. United States, 906 F.2d 467, 470 (9th Cir. 1990). “The plaintiff’s claims
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must not only be numerous, but also be patently without merit.” See id.
Before entering a prefiling order, district courts must comply with the procedural and
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substantive requirements set forth in De Long, 912 F.2d at 1147–48. See Ringgold-Lockhart, 761
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United States District Court
Northern District of California
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F.3d at 1062. Under De Long, a district court must:
(1) give litigants notice and “an opportunity to oppose the order before it [is]
entered”; (2) compile an adequate record for appellate review, including “a listing
of all the cases and motions that led the district court to conclude that a vexatious
litigant order was needed”; (3) make substantive findings of frivolousness or
harassment; and (4) tailor the order narrowly so as “to closely fit the specific vice
encountered.”
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Ringgold-Lockhart, 761 F.3d at 1062 (quoting De Long, 912 F.2d at 1147–48).
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2.1.1 Notice
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The litigant must be provided with an opportunity to oppose the order before it is entered. See
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De Long, 912 F.2d at 1147. “Due process requires notice and an opportunity to be heard.” Id.
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(quoting In re Powell, 851 F.2d 427, 431 (D.C. Cir. 1988)).
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Here, Baldini filed its motion and served Ms. Torres.22 Baldini initially noticed the motion’s
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hearing date for January 5, 2017, but then asked to shorten the briefing schedule and move the
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hearing date to December 15, 2016.23 Baldini served Ms. Torres with its motion to shorten time.24
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Motion to Remand; Certificate of Service — ECF No. 9.
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See Motion to Remand; Motion to Shorten Time — ECF No. 10 at 2.
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Certificates of Service — ECF Nos. 12, 15.
ORDER — No. 16-cv-06771-LB
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The court granted Baldini’s motion in part: it moved the hearing date to December 22, 2016 and
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kept the opposition deadline as originally set for December 15.25
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But Ms. Torres did not file an opposition. She did, however, consent to the undersigned’s
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jurisdiction, indicating that she received the Clerk’s Notice regarding magistrate jurisdiction, and
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thus likely received the court’s order regarding the opposition deadline. Although she did not
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respond, and although the court did not hold a hearing on the matter, the notice requirement has
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been satisfied. See Pac. Harbor Capital, Inc. v. Carnival Airlines, Inc., 210 F.3d 1112, 1118 (9th
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Cir. 2000) (holding that the opportunity to be heard does not require an oral or evidentiary hearing
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and instead, due process is satisfied by the opportunity to brief the issue).
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2.1.2 Adequate record for review
United States District Court
Northern District of California
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The district court must create a record for review which includes “a listing of all the cases and
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motions that led [it] to conclude that a vexatious litigant order was needed.” De Long, 912 F.2d at
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1147. The record must at least show, in some manner, “that the litigant’s activities were numerous
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or abusive. Id.
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In Baldini Real Estate, Inc. v. Cruz, an unlawful detainer case, the court imposed a prefiling
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order requiring the defendant to seek leave before again removing the case. No. 15-cv-04231-JCS,
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2015 WL 6725079 at *4–*5 (N.D. Cal. Oct. 16, 2015), report and recommendation adopted by
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No. 15-cv-04231-YGR, 2015 WL 6692272 (N.D. Cal. Nov. 3, 2015). There, the defendant had
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removed the case once before. Id. at *1. On that first removal, the court remanded the case
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because removal was not timely and the court lacked subject-matter jurisdiction. Id. But the
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defendant again removed the case. Id. at *2. On the second removal, the court found that “there
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[was] an adequate record of abuse of the removal procedure” to impose a prefiling order. Id. at *4.
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The court reasoned: first, the “second Notice of Removal fail[ed] to adequately respond to the
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reasons” for the initial remand; second, the defendant stated at the hearing “that he intended to
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Order — ECF No. 16.
ORDER — No. 16-cv-06771-LB
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delay the action to allow himself more time to obtain a lawyer”; and third, “there [was] a record of
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[the defendant] submitting numerous improper bankruptcy filings for the purpose of delay.” Id.
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Here, unlike Cruz, the record does not support a prefiling order. Unlike Cruz, this is the first
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time that Ms. Torres removed the case and she has not declared an intent to delay the proceedings.
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The current record therefore does not demonstrate Ms. Torres’s abuse of the removal procedure
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and does not warrant a prefiling order. Cf. Cruz, 2015 WL 6725079 at *1, *4 (declaring the
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defendant a vexatious litigant where the defendant had removed the case once before); PNC Bank
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Nat’l Assoc. v .Ahluwali, No. 3:15-cv-01264-LB (N.D. Cal. May 28, 2015), report and
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recommendation adopted by No. C 15-01264 WHA, 2015 WL 3866892 (N.D. Cal. June 22, 2015)
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(finding the defendant a vexatious litigant where the defendant removed the case five times); Bank
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United States District Court
Northern District of California
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of New York Mellon v. Brewer, No. C-12-03179 RMW, 2012 WL 3904342 (N.D. Cal. Sept. 7,
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2012) (concluding that the defendants were vexatious litigants where they removed the case three
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times).
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Baldini, however, argues that Ms. Torres’s removal is just one of several steps intended to
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delay the foreclosure proceeding.26 For example, it argues that like Cruz, Ms. Torres has used the
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bankruptcy system to delay and avoid foreclosure. She transferred the Daly City property to a
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“company that had filed bankruptcy in order to obtain the protection of the [bankruptcy’s]
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automatic stay” even though the company in bankruptcy “did not have any ties to the subject
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property” or Ms. Torres.27 She also “filed for bankruptcy herself in an attempt to stop the
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foreclosure sale,” but the bankruptcy judge dismissed Ms. Torres’s case because she did not
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comply with one of the court’s orders.28 This was just one of Ms. Torres’s three bankruptcy suits:
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the first was in March 2011, which was dismissed for failing to make payments; the second was in
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January 2012, which was discharged.29 And separately, without following proper “meet and
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See Motion to Remand at 4–5, 8–9.
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Kenny Decl. — ECF No. 7, ¶ 6, Ex. E.
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Id. ¶ 7, Ex. F.
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Id. ¶ 8, Ex. G.
ORDER — No. 16-cv-06771-LB
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confer” and notice procedures in state court, Ms. Torres filed a demurrer, which the court
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overruled.30
Ms. Torres’s use of the bankruptcy system may or may not be an attempt to delay the
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foreclosure. Unlike in Cruz, however, there is no existing prefiling order that requires Ms. Torres
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to obtain leave of court before filing new bankruptcy actions. See 2015 WL 6725079 at *3. And
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more importantly, there is no evidence that Ms. Torres’s removal was an abuse of the system
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designed to delay the case. This conclusion may change, however, if Ms. Torres again removes the
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case (without any basis justifying its propriety).
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2.1.3 Substantive findings of frivolousness or harassment
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United States District Court
Northern District of California
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The district court must make “substantive findings as to the frivolous or harassing nature of the
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litigant’s actions.” De Long, 912 F.2d at 1148 (quoting In re Powell, 851 F.2d at 431). It must find
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the litigant's claims to be frivolous after looking at “both the number and content of the filings as
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indicia of the frivolousness,” or, alternatively, find that the claims show a pattern of harassment.
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Id. (quoting In re Powell, 851 F.2d at 431) (internal quotations omitted).
Here, Ms. Torres improperly removed the case, wrongfully asserting federal-question
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jurisdiction (see above). Ms. Torres’s misunderstanding of removal jurisdiction, as a pro se
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litigant, may be understandable. But the well-pleaded-complaint rule is well defined and clear, and
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the court warns her that future removals on the same basis may result in a prefiling order and
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sanctions. See Cruz, 2015 WL 6725079 at *5 (noting that “a pro se litigant’s misunderstanding of
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the law may in some circumstances be understandable” but that the plaintiff there could not “claim
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ignorance as to his second removal after receiving the Court’s order remanding the case after his
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first removal”).
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Id. ¶¶ 11–13.
ORDER — No. 16-cv-06771-LB
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2.1.4 Breadth of the order
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The order “must be narrowly tailored to closely fit the specific vice encountered.” De Long,
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912 F.2d at 1148. An order preventing a litigant from filing any further actions without leave of
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court is overly broad and cannot stand. See id.; Moy, 906 F.2d at 470–71. So too is an order that
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states that the court will not allow a new action to be initiated unless the court deems the action
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“meritorious,” which is not possible to determine from pleadings alone; such an order “is not
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narrowly tailored to address the particular concern that [plaintiff] will continue to pursue frivolous
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litigation.” Ringgold-Lockhart, 761 F.3d at 1066.
Here, a narrowly tailored prefiling order would necessarily be directed only at future removals
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by Ms. Torres. But as described above, the record does not indicate repeated, abusive use of the
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United States District Court
Northern District of California
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removal procedure and thus the court does not think such an order is appropriate at this time.
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In sum, the record does not support a prefiling order. As described above, though, if Ms.
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Torres attempts to remove the case on the same basis, a prefiling order may be appropriate.
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2.2 Sanctions (Rule 11 and § 1447(c))
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Baldini asks the court to sanction Ms. Torres under Rule 11 to send “a strong message that
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such impermissible conduct will not be tolerated by this Court” and to “deter any future abuse.”31
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It asks for $3,150 in attorney’s fees.32
A defendant who removes a case improperly may be sanctioned under Rule 11 and 28 U.S.C.
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§ 1447. In particular, § 1447(c) provides that “[a]n order remanding the case may require payment
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of just costs and any actual expenses, including attorney fees, incurred as a result of the removal.”
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Here, the record does not warrant sanctions. This is the first time that Ms. Torres removed the case
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and, although wrong, she may reasonably have believed that RESPA would support federal-
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Motion to Remand at 10.
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Kenny Decl. ¶ 14; Proposed Order — ECF No. 13 at 2.
ORDER — No. 16-cv-06771-LB
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question jurisdiction. But the court warns Ms. Torres that if she removes the case again on the
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same basis she risks being sanctioned. See Benson v. SI Handling Sys., Inc., 188 F.3d 780, 783
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(7th Cir. 1999) (“Multiple removals could encounter problems — could even lead to sanctions —
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if nothing of significance changes between the first and second tries.”) (internal citation omitted).
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The court denies Baldini’s request for sanctions.
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3. Collateral Estoppel
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Baldini argues that the court’s remand order “should be considered a final judgment on the
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issue of whether [Ms. Torres] can remove the Unlawful Detainer action” and should bar future
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attempts under the doctrine of collateral estoppel.33
United States District Court
Northern District of California
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“The doctrine of collateral estoppel prevents parties from relitigating issues that have been
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resolved in an earlier action between the same parties or their privies.” Peterson v. Clark Leasing
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Corp., 451 F.2d 1291, 1292 (9th Cir. 1971). “Collateral estoppel applies if: (1) the issue sought to
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be relitigated is identical to one necessarily decided in a previous proceeding; (2) the previous
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proceeding resulted in a final judgment on the merits; and (3) the party against whom collateral
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estoppel is asserted was a party (or was in privity with a party) in the prior proceeding.” E. Bay
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Law v. Ford Motor Co., No. 15-CV-04257-TEH, 2015 WL 7571809, at *2 (N.D. Cal. Nov. 25,
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2015) (citing People v. Taylor, 12 Cal. 3d 686, 692 (1974)).
Here, the issue of collateral estoppel is premature. Ms. Torres could remove the case on a new
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or different basis that this court has not considered. And Baldini cites no authority for the
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proposition that a court remanding for lack of subject-matter jurisdiction should consider the
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matter final for purposes of collateral estoppel. See, e.g., Fed. R. Civ. P. 41(b) (dismissal for lack
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of subject-matter jurisdiction is not an adjudication on the merits); E. Bay Law, 2015 WL 7571809
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at *3 (“The dismissal of a prior federal case for failure to plead jurisdiction does not bar removal
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of a subsequent state case, so long as the jurisdictional defects are cured in the second suit.”); but
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Motion to Remand at 9.
ORDER — No. 16-cv-06771-LB
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see Hohu v. Hatch, 940 F. Supp. 2d 1161, 1169 (N.D. Cal. 2013) (applying collateral estoppel to
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dismiss a complaint for lack of subject-matter jurisdiction). The court therefore denies this request.
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CONCLUSION
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The court remands the case to the Superior Court of California, County of San Mateo. The
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court denies Baldini’s requests to designate Ms. Torres a vexatious litigant, impose a prefiling
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order, order sanctions, and consider the decision final for purposes of collateral estoppel.
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IT IS SO ORDERED.
Dated: December 20, 2016
______________________________________
LAUREL BEELER
United States Magistrate Judge
United States District Court
Northern District of California
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ORDER — No. 16-cv-06771-LB
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