Chinitz v. Experian Information Solutions, Inc
Filing
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ORDER REMANDING CASE. The Clerk shall therefore remand this case to Santa Cruz County Superior Court and close the file. Signed by Judge Edward J. Davila on 11/20/2017. (ejdlc1S, COURT STAFF) (Filed on 11/20/2017)
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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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SAN JOSE DIVISION
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RONALD CHINITZ, on behalf of himself
and all others similar situated,
Plaintiff,
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United States District Court
Northern District of California
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Case No. 5:17-cv-06515-EJD
ORDER REMANDING CASE
v.
EXPERIAN INFORMATION SOLUTIONS,
INC.,
Defendant.
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The instant putative class action was removed to this court by Defendant Experian
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Information Solutions, Inc. on the “grounds of federal question in that Plaintiff’s claims
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substantially implicate the laws of the United States, and the Plaintiff’s right to relief necessarily
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depends on resolution of substantial questions of federal law.” But after reviewing the Complaint,
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the court was left with serious doubt that Plaintiff’s causes of action would, in fact, implicate a
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substantial federal question and ordered Defendant show cause why the action should not be
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summarily remanded. Dkt. No. 11. Defendant responded to the order by filing an amended
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Notice of Removal. Dkt. No. 13. The court now examines that document to determine whether
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Defendant has adequately established a basis for subject matter jurisdiction. See Henderson v.
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Shinseki, 562 U.S. 428, 434 (2011) (“[F]ederal courts have an independent obligation to ensure
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that they do not exceed the scope of their jurisdiction, and therefore they must raise and decide
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jurisdictional questions that the parties either overlook or elect not to press.”); see also Snell v.
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Cleveland, Inc., 316 F.3d 822, 826 (9th Cir. 2002) (“[A] court may raise the question of subject
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matter jurisdiction, sua sponte, at any time during the pendency of the action, even on appeal.”). It
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Case No.: 5:17-cv-06515-EJD
ORDER REMANDING CASE
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still has not.
As the court previously noted, none of Plaintiff’s causes of action are created by federal
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law; each arises under provisions of the California Civil Code and California Business and
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Professions Code. And although a federal law is noted in the allegations, “the mere reference”
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does not “convert a state law claim into a federal cause of action.” Easton v. Crossland Mortg.
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Corp., 114 F.3d 979, 982 (9th Cir. 1997); accord Grable & Sons Metal Prods., Inc. v. Darue Eng’g
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& Mfg., 545 U.S. 308, 314 (2005) (explaining that § 1331 “is invoked by and large by plaintiffs
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pleading a cause of action created by federal law”) (“Grable”).
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Moreover, the amended Notice of Removal does not make it any more apparent that
Plaintiff’s causes of action implicate significant federal issues, such that removal is condoned by
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United States District Court
Northern District of California
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Grable and another case in the same line of authority - Merrell Dow Pharmaceuticals Inc. v.
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Thompson, 478 U.S. 804 (1986). Defendant was obligated to fit this case into the “special and
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small category” embraced by Grable pursuant to the court’s instructions. Empire Healthchoice
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Assurance, Inc. v. McVeigh, 547 U.S. 677, 699 (2006). Those cases are properly identified by
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answering the following question: “does a state law claim necessarily raise a stated federal issue,
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actually disputed and substantial, which a federal forum may entertain without disturbing any
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congressionally approved balance of federal and state judicial responsibility.” Grable, 545 U.S. at
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314. “Recast as elements, the proponent of a ‘substantial federal question’ must show: (1) that the
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state law claim necessarily raises the federal issues identified, (2) that the federal issue is disputed
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and substantial, and if (1) and (2) are established, then (3) that it is appropriate in the balance of
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state and federal responsibility for the federal court to hear the claim.” Quildon v. Intuit, Inc., No.
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5:12-cv-00859 EJD, 2012 WL 1902021, at *4 (N.D. Cal. May 25, 2012).
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Defendant’s jurisdictional presentation fails. Defendant argues that determining Plaintiff’s
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right to relief necessarily implicates the interpretation of a federal regulation, namely 12 C.F.R. §
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1022.123, which as detailed in the Complaint merely provides a list of methods that can prove a
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consumer’s identity. But it is not clear that any of Plaintiff’s causes of action “necessarily raise”
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the interpretation of that regulation, as opposed to simply the application of that regulation. Here,
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Case No.: 5:17-cv-06515-EJD
ORDER REMANDING CASE
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Plaintiff’s allegations do not dispute the meaning of § 1022.123; instead, he actually
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acknowledges its requirements and alleges he could not obtain a free credit report even when he
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provided identification satisfying the federal standard.
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If anything, the Complaint necessarily raises the interpretation of a state statute, California
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Civil Code § 1785.15(c), and its “proper identification” standard. Such interpretation may be done
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in reference to federal statutes and regulations, but such incidental reference is not enough to
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support jurisdiction in federal court because the ultimate determination of Defendant’s liability
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will be a matter of state law. See Berg v. Leason, 32 F.3d 422, 424 (1994) (holding that federal
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jurisdiction does not exist simply because federal is an “ingredient” of a state law claim).
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Moreover, Defendant’s case citations are inapposite. Defendant has not cited in its
United States District Court
Northern District of California
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amended Notice of Removal an exclusive jurisdiction provision, as was discussed in Sparta
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Surgical Corporation v. National Association of Securities Dealers, Inc., 159 F.3d 1209 (1998).
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Defendant also overlooks the key difference between Plaintiff’s causes of action and the state-law
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unfair competition claims at issue in National Credit Reporting Association, Inc. v. Experian
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Information Solutions, Inc., No. C04-01661 WHA, 2004 WL 1888769 (N.D. Cal. July 21, 2004),
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and Brennan v. Southwest Airlines Company, 134 F.3d 1405 (1998). As opposed the California
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Consumer Credit Reporting Agencies Act (“CCRAA”), the state’s Unfair Competition Law
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(“UCL”), California Business and Professions Code § 172000 et. seq., is uniquely amenable to
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removal under Grable since it “borrows” violations from other laws, which are sometimes federal,
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and adopts them as violations of the UCL. See Cal-Tech Commc’ns, Inc. v. L.A. Cellular Tel.
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Co., 20 Cal. 4th 163, 180 (1999).
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Finally, there is no basis to invoke the artful pleading doctrine under these circumstances
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when Plaintiff has validly brought claims under a state statute that is not supplanted by federal
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law. See Hunter v. United Van Lines, 746 F.2d 635, 643 (9th Cir. 1984) (“[R]emoval is improper
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when federal law simply displaces state law without replacing the state cause of action with a
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federal one. When federal law displaces state law without supplanting it, a plaintiff cannot be
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deemed to be attempting to avoid a federal cause of action.”). Here, the CCRAA and its federal
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Case No.: 5:17-cv-06515-EJD
ORDER REMANDING CASE
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counterpart, the Fair Credit Reporting Act, co-exist as separate statutory schemes.
Because Plaintiff’s causes of action are not created by federal law, and because Defendant
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has not convincingly shown they arise under or raise a substantial issue of federal law, the court
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still seriously doubts this action was properly removed. Given the “need for careful judgments
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about the exercise of federal judicial power in an area of uncertain jurisdiction” (Merrell Dow, 478
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U.S. at 814), the court finds that it lacks subject matter jurisdiction over this action. The Clerk
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shall therefore remand this case to Santa Cruz County Superior Court and close the file.
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IT IS SO ORDERED.
Dated: November 20, 2017
______________________________________
EDWARD J. DAVILA
United States District Judge
United States District Court
Northern District of California
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Case No.: 5:17-cv-06515-EJD
ORDER REMANDING CASE
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