DRFF II REO Owner LLC v. Fung et al

Filing 5

ORDER TO SHOW CAUSE. Signed by Judge Jeffrey S. White on 5/3/17. Show Cause Response due by 5/19/2017. (Attachments: # 1 Certificate/Proof of Service)(jjoS, COURT STAFF) (Filed on 5/3/2017)

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IN THE UNITED STATES DISTRICT COURT
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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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DRRF II REO OWNER, LLC,
Plaintiff,

For the Northern District of California

United States District Court

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No. C 17-02503 JSW

v.
ORDER TO SHOW CAUSE

STERYLING FUNG, ET AL,
Defendants.

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Federal courts have a duty to raise and decide issues of subject matter jurisdiction sua sponte

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at any time it appears subject matter jurisdiction may be lacking. Fed. R. Civ. P. 12; Augustine v.

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United States, 704 F.2d 1074, 1077 (9th Cir. 1983). It appears that this Court lacks jurisdiction to

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hear this matter.

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On January 13, 2017, Plaintiff filed a complaint for unlawful detainer in Superior Court for

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the County of Alameda Fung (the “State Court action”) against Defendants Sterlyng, Claire and

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Sathi (“Defendants”). (See Notice of Removal.) On May 2, 2017, Defendants removed the State

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Court action on the basis that jurisdiction is premised upon a federal question. (See id.) “[A]ny civil

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action brought in a State court of which the district courts of the United States have original

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jurisdiction, may be removed by the defendant . . . 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.” Franchise Tax Bd. v.

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Constr. Laborers Vacation Trust, 463 U.S. 1, 7-8 (1983) (citation omitted); see also 28 U.S.C. §

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1441.

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However, federal courts are courts of limited jurisdiction. See, e.g., Kokkonen v. Guardian

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Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). Accordingly, the burden of establishing federal

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jurisdiction for purposes of removal is on the party seeking removal, and the removal statute is

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strictly construed against removal jurisdiction. Valdez v. Allstate Ins. Co., 372 F.3d 1115, 1117 (9th

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Cir. 2004); see also Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). “Federal jurisdiction

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must be rejected if there is any doubt as to the right of removal in the first instance.” Gaus, 980 F.2d

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at 566.

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“The presence or absence of federal-question jurisdiction is governed by the ‘well-pleaded
complaint rule.’” Caterpillar Inc. v. Williams, 482 U.S. 382, 392 (1987). The well-pleaded
complaint rule recognizes that the plaintiff is the master of his or her claim. “[H]e or she may avoid

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For the Northern District of California

United States District Court

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federal jurisdiction by exclusive reliance on state law.” Id. Thus, under the well-pleaded complaint

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rule, federal-question jurisdiction arises where the “complaint establishes either that federal law

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creates the cause of action or that the plaintiff’s right to relief necessarily depends on resolution of a

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substantial question of federal law.” Franchise Tax Bd., 463 U.S. 1, 27-28 (1983).

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The State Court action is an unlawful detainer action and, thus, federal law does not create

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the cause of action. Moreover, the Court finds that the claim will not necessarily depend upon the

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resolution of a substantial question of federal law, because Plaintiff need not prove compliance with

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the federal law relied upon by Defendants to establish its claim. See, e.g., Grable & Sons Metal

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Prods. v. Darue Eng. & Mfg., 545 U.S. 308, 314-15 (2005).

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Furthermore, a court cannot exercise removal jurisdiction on the ground that the complaint

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gives rise to a potential or an anticipated defense that might raise a federal question, even if the

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defense is the only question truly at issue in the case. Franchise Tax Board, 463 U.S. at 10, 14; see

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also Caterpillar, 482 U.S. at 393 (“[I]t is now settled law that a case may not be removed to federal

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court on the basis of a federal defense, including the defense of preemption, even if the defense is

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anticipated in the plaintiff’s complaint, and even if both parties concede that the federal defense is

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the only question truly at issue.”) (emphasis in original). Therefore, the Court finds that it lacks

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subject matter jurisdiction to hear this matter as currently pled and must remand to the state court.

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See 28 U.S.C. § 1447(c); see also Maniar v. FDIC, 979 F.2d 782, 785 (9th Cir. 1992).
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In addition, Defendants also failed to remove within thirty days of being served with the

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complaint which serves as a bar to federal jurisdiction. See 28 U.S.C. § 1446 (“[t]he notice of

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removal of a civil action or proceeding shall be filed within thirty days, by the receipt of the

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Defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for

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relief”).

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Accordingly, the Court HEREBY ISSUES this order to show cause to Defendants to respond

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in writing by no later than May 19, 2017 why this case should not be remanded to the Superior

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Court of the State of California for the County of Alameda. Should Defendants fail to respond, this

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case shall be remanded for lack of subject matter jurisdiction.

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For the Northern District of California

United States District Court

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IT IS SO ORDERED.
Dated: May 3, 2017
JEFFREY S. WHITE
UNITED STATES DISTRICT JUDGE

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