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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1 2 3 4 5 IN THE UNITED STATES DISTRICT COURT 6 FOR THE NORTHERN DISTRICT OF CALIFORNIA 7 8 9 DRRF II REO OWNER, LLC, Plaintiff, For the Northern District of California United States District Court 10 11 12 No. C 17-02503 JSW v. ORDER TO SHOW CAUSE STERYLING FUNG, ET AL, Defendants. 13 / 14 15 Federal courts have a duty to raise and decide issues of subject matter jurisdiction sua sponte 16 at any time it appears subject matter jurisdiction may be lacking. Fed. R. Civ. P. 12; Augustine v. 17 United States, 704 F.2d 1074, 1077 (9th Cir. 1983). It appears that this Court lacks jurisdiction to 18 hear this matter. 19 On January 13, 2017, Plaintiff filed a complaint for unlawful detainer in Superior Court for 20 the County of Alameda Fung (the “State Court action”) against Defendants Sterlyng, Claire and 21 Sathi (“Defendants”). (See Notice of Removal.) On May 2, 2017, Defendants removed the State 22 Court action on the basis that jurisdiction is premised upon a federal question. (See id.) “[A]ny civil 23 action brought in a State court of which the district courts of the United States have original 24 jurisdiction, may be removed by the defendant . . . to the district court of the United States for the 25 district and division embracing the place where such action is pending.” Franchise Tax Bd. v. 26 Constr. Laborers Vacation Trust, 463 U.S. 1, 7-8 (1983) (citation omitted); see also 28 U.S.C. § 27 1441. 28 1 However, federal courts are courts of limited jurisdiction. See, e.g., Kokkonen v. Guardian 2 Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). Accordingly, the burden of establishing federal 3 jurisdiction for purposes of removal is on the party seeking removal, and the removal statute is 4 strictly construed against removal jurisdiction. Valdez v. Allstate Ins. Co., 372 F.3d 1115, 1117 (9th 5 Cir. 2004); see also Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). “Federal jurisdiction 6 must be rejected if there is any doubt as to the right of removal in the first instance.” Gaus, 980 F.2d 7 at 566. 8 9 “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 11 For the Northern District of California United States District Court 10 federal jurisdiction by exclusive reliance on state law.” Id. Thus, under the well-pleaded complaint 12 rule, federal-question jurisdiction arises where the “complaint establishes either that federal law 13 creates the cause of action or that the plaintiff’s right to relief necessarily depends on resolution of a 14 substantial question of federal law.” Franchise Tax Bd., 463 U.S. 1, 27-28 (1983). 15 The State Court action is an unlawful detainer action and, thus, federal law does not create 16 the cause of action. Moreover, the Court finds that the claim will not necessarily depend upon the 17 resolution of a substantial question of federal law, because Plaintiff need not prove compliance with 18 the federal law relied upon by Defendants to establish its claim. See, e.g., Grable & Sons Metal 19 Prods. v. Darue Eng. & Mfg., 545 U.S. 308, 314-15 (2005). 20 Furthermore, a court cannot exercise removal jurisdiction on the ground that the complaint 21 gives rise to a potential or an anticipated defense that might raise a federal question, even if the 22 defense is the only question truly at issue in the case. Franchise Tax Board, 463 U.S. at 10, 14; see 23 also Caterpillar, 482 U.S. at 393 (“[I]t is now settled law that a case may not be removed to federal 24 court on the basis of a federal defense, including the defense of preemption, even if the defense is 25 anticipated in the plaintiff’s complaint, and even if both parties concede that the federal defense is 26 the only question truly at issue.”) (emphasis in original). Therefore, the Court finds that it lacks 27 subject matter jurisdiction to hear this matter as currently pled and must remand to the state court. 28 See 28 U.S.C. § 1447(c); see also Maniar v. FDIC, 979 F.2d 782, 785 (9th Cir. 1992). 2 1 In addition, Defendants also failed to remove within thirty days of being served with the 2 complaint which serves as a bar to federal jurisdiction. See 28 U.S.C. § 1446 (“[t]he notice of 3 removal of a civil action or proceeding shall be filed within thirty days, by the receipt of the 4 Defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for 5 relief”). 6 Accordingly, the Court HEREBY ISSUES this order to show cause to Defendants to respond 7 in writing by no later than May 19, 2017 why this case should not be remanded to the Superior 8 Court of the State of California for the County of Alameda. Should Defendants fail to respond, this 9 case shall be remanded for lack of subject matter jurisdiction. 11 For the Northern District of California United States District Court 10 IT IS SO ORDERED. Dated: May 3, 2017 JEFFREY S. WHITE UNITED STATES DISTRICT JUDGE 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3

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