Federal National Mortgage Association v. Espinoza et al

Filing 5

ORDER denying as moot 2 MOTION for Leave to Proceed in forma pauperis; ORDER That Case Be Reassigned to a District Judge; REPORT AND RECOMMENDATIONS re 1 Remand to State Court. Objections due by 5/20/2013. Signed by Magistrate Judge Howard R. Lloyd on 5/1/2013. (hrllc2, COURT STAFF) (Filed on 5/1/2013)

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*E-FILED: May 1, 2013*

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NOT FOR CITATION

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION

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For the Northern District of California

United States District Court

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No. C13-01928 HRL

FEDERAL NATIONAL MORTGAGE
ASSOCIATION, A/K/A FANNIE MAE,

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ORDER DENYING AS MOOT
APPLICATION TO PROCEED IN
FORMA PAUPERIS

Plaintiff,
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v.
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ORDER THAT CASE BE REASSIGNED
TO A DISTRICT JUDGE

JESUS A ESPINOZA; MICAELA LOYA
MORENO; and DOES 1 to 10, inclusive,
Defendants.

REPORT AND RECOMMENDATION RE
REMAND TO STATE COURT

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[Re: Docket No. 2]
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Defendant Jesus A. Espinoza removed this unlawful detainer action from the Monterey

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County Superior Court. He also seeks leave to proceed in forma pauperis (IFP). For the

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reasons stated below, the undersigned denies as moot Espinoza’s IFP application and

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recommends that this matter be remanded to state court.

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A court may authorize the commencement of a civil action in forma pauperis (“IFP”) if

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the court is satisfied that the would-be plaintiff cannot pay the filing fees necessary to pursue

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the action. 28 U.S.C § 1915(a)(1). In evaluating such an application, the court should “gran[t]

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or den[y] IFP status based on the plaintiff’s financial resources alone and then independently

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determin[e] whether to dismiss the complaint on the grounds that it is frivolous.” Franklin v.

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Murphy, 745 F.2d 1221, 1226-27 n.5 (9th Cir. 1984). A court may dismiss a case

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filed without the payment of the filing fee whenever it determines that the action “(i) is

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frivolous or malicious; (ii) fails to state a claim on which relief may be granted; or (iii) seeks

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monetary relief against a defendant who is immune from such relief.” 28 U.S.C. §

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1915(e)(2)(B)(i)-(iii). Having reviewed Espinoza’s financial affidavit, the court is not prepared

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to grant his application because defendant Moreno (Espinoza’s wife) did not submit a separate

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financial affidavit attesting to her income and financial assets. Ordinarily, this court would

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require Moreno to do so. That will be unnecessary here, however, because for the reasons

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discussed below, the court lacks subject matter jurisdiction over the complaint anyway.

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Removal to federal court is proper where the federal court would have original subject
matter jurisdiction over the complaint. 28 U.S.C. § 1441. The removal statutes are strictly

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For the Northern District of California

United States District Court

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construed against removal and place the burden on the defendant to demonstrate that removal

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was proper. Moore-Thomas v. Alaska Airlines, Inc., 553 F.3d 1241, 1244 (9th Cir. 2009)

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(citing Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992)). Additionally, the court has a

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continuing duty to determine whether it has subject matter jurisdiction. FED. R. CIV. P. 12(h).

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A case must be remanded to the state court if it appears at any time before final judgment that

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the court lacks subject matter jurisdiction. 28 U.S.C. § 1447(c).

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Federal courts have original jurisdiction over civil actions “arising under the

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Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331. A claim “arises under”

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federal law if, based on the “well-pleaded complaint rule,” the plaintiff alleges a federal claim

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for relief. Vaden v. Discovery Bank, 129 S. Ct. 1262, 1272 (2009). Defenses and

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counterclaims asserting a federal question do not satisfy this requirement. Id. Here, plaintiff’s

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complaint presents claims arising only under state law. It does not allege any federal claims

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whatsoever. Allegations in a removal notice or in a response to the complaint cannot provide

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this court with federal question jurisdiction.

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Additionally, defendant fails to show that diversity jurisdiction exists. Federal district

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courts have jurisdiction over civil actions in which the matter in controversy exceeds the sum or

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value of $75,000 (exclusive of interest and costs) and is between citizens of different states. 28

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U.S.C. §1332. The complaint indicates that the amount demanded does not exceed $10,000.
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Moreover, the notice of removal indicates that defendants are California residents. As such, the

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complaint cannot be removed on the basis of diversity. 28 U.S.C. § 1441(b)(2) (an action may

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not be removed “if any of the parties in interest properly joined and served as defendants is a

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citizen of the State in which such action is brought.”); see also Spencer v. U.S. Dist. Ct., 393

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F.3d 867, 870 (9th Cir. 2004) (“It is thus clear that the presence of a local defendant at the time

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removal is sought bars removal.”).

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Because not all parties have consented to the undersigned’s jurisdiction, this court

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ORDERS the Clerk of the Court to reassign this case to a District Judge. The undersigned

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further RECOMMENDS that the newly assigned judge remand the case to the Monterey
County Superior Court. Any party may serve and file objections to this Report and

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For the Northern District of California

United States District Court

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Recommendation within fourteen days after being served. 28 U.S.C. § 636(b)(1); FED. R. CIV.

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P. 72.

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Dated: May 1, 2013

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HOWARD R. LLOYD
UNITED STATES MAGISTRATE JUDGE

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5:13-cv-01928-HRL Notice has been electronically mailed to:

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Tracey Lynn Merrell

[e-mail]

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5:13-cv-01928-HRL Notice sent by U.S. Mail on May 1, 2013 to:

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Jesus A. Espinoza
111 Eagle Drive
Salinas, CA 93905

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For the Northern District of California

United States District Court

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