Smith et al v. Bayview Loan Servicing, LLC

Filing 2

ORDER Sua Sponte Remanding Action to State Court. Signed by Judge Michael M. Anello on 4/10/2014.(All non-registered users served via U.S. Mail Service-Certified copy sent to Superior Court)(vam)

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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CHARLES R. SMITH, et al.,

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CASE NO. 14-cv-836-MMA (KSC)
Plaintiffs,

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vs.

ORDER SUA SPONTE
REMANDING ACTION TO STATE
COURT

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BAYVIEW LOAN SERVICING,
LLC,
Defendant.

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[Doc. No. 1]

On February 13, 2014, Plaintiffs Charles and Patricia Smith (collectively,
“Plaintiffs”) filed a complaint in Small Claims Court of the Superior Court of
California, County of San Diego, seeking to recover their refunded taxes in the
amount of $2,647.96 from Defendant Bayview Loan Servicing, LLC (“Defendant”).
See Doc. No. 1-2. On April 8, 2014, Defendant, proceeding through counsel, filed a
notice of removal based on federal question jurisdiction. Having reviewed
Defendant’s notice of removal, the Court finds it does not have subject matter
jurisdiction over this action. The Court therefore REMANDS this action to the, San
Diego County Superior Court, Case No. 37-2014-00300314-SC-SC-NC.
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14cv836-MMA (KSC)

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DISCUSSION
The federal court is one of limited jurisdiction and possesses only that power

3 authorized by the Constitution or a statute. See Lowdermilk v. U.S. Bank Nat’l
4 Ass’n, 479 F.3d 994, 997 (9th Cir. 2007); Bender v. Williamsport Area Sch. Dist.,
5 475 U.S. 534, 541, 106 S. Ct. 1326 (1986). The federal court is constitutionally
6 required to raise issues related to federal subject matter jurisdiction and may do so
7 sua sponte. Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 93-94 (1998); see
8 Indus. Tectonics, Inc. v. Aero Alloy, 912 F.2d 1090, 1092 (9th Cir. 1990).
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Removal jurisdiction is governed by 28 U.S.C. § 1441 et seq. A defendant

10 can only remove a state court action if the plaintiff could have originally filed the
11 action in federal court. Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987);
12 Duncan v. Stuetzle, 76 F.3d 1480, 1485 (9th Cir. 1996). Thus, for a defendant to
13 remove an action on the basis of federal question jurisdiction, the complaint must
14 establish either that federal law creates the cause of action or that the plaintiff’s right
15 to relief necessarily depends on the resolution of substantial questions of federal law.
16 Franchise Tax Board of Cal. v. Construction Laborers Vacation Trust for Southern
17 Cal., 463 U.S. 1, 10-11 (1983). Additionally, a federal court also has jurisdiction
18 over an action involving citizens of different states when the amount in controversy
19 exceeds $75,000. 28 U.S.C. § 1332.
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“The burden of establishing federal jurisdiction is on the party seeking

21 removal, and the removal statute is strictly construed against removal jurisdiction.”
22 Nishimoto v. Federman-Bachrach & Assoc., 903 F.2d 709, 712 n.3 (9th Cir. 1990).
23 “Federal jurisdiction must be rejected if there is any doubt as to the right of removal
24 in the first instance.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). The
25 well-pleaded complaint rule governs whether federal jurisdiction exists. Caterpillar,
26 482 U.S. at 392. The well-pleaded complaint rule is a “powerful doctrine [that]
27 severely limits the number of cases in which state law ‘creates the cause of action’
28 that may be initiated in or removed to federal district court . . . .” Franchise Tax Bd.,
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1 463 U.S. at 9-10. Under this rule, the federal question must be “presented on the
2 face of the plaintiff’s properly pleaded complaint.” Id.; accord Wayne v. DHL
3 Worldwide Express, 294 F.3d 1179, 1183 (9th Cir. 2002).
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Here, Defendant indicates on the civil cover sheet that jurisdiction in this

5 Court is based on a federal question, specifically a claim under the Real Estate
6 Settlement Procedures Act (“RESPA”), 12 U.S.C. § 2601, et seq. Doc. No. 1-1.
7 However, in looking to Plaintiff’s complaint, the Court finds that a federal question
8 is not presented on the face of Plaintiff’s small claims court complaint. See Doc.
9 No. 1-2. Instead, the allegations in the complaint state in their entirety “Bayview
10 erroneously paid our taxes to the San Diego tax collector. The SD tax collector
11 confirms that it returned our $2,647.96 to Bayview in January 2013 by bulk wire
12 transfer. Bayview has not refunded us despite calls and faxes.” See Doc. No. 1-2 at
13 4. Thus, contrary to Defendant’s assertions in the notice of removal, the complaint
14 does not assert a claim related to costs and disclosures under RESPA.
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Moreover, to the extent Defendant has removed based on anticipated defenses

16 under RESPA or other federal statutes, removal is also improper. Defendant’s
17 anticipated defenses or counterclaims cannot establish federal jurisdiction. See
18 Takeda v. Nw. Nat’l Life Ins. Co., 765 F.2d 815, 822 (9th Cir. 1985) (holding a
19 defendant’s counterclaim presenting a federal question does not make a case
20 removable). As such, this Court does not have subject matter jurisdiction on the
21 basis of federal question.
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This leaves diversity of citizenship as the only available basis of jurisdiction

23 in this Court. As noted above, a federal court has jurisdiction over an action
24 involving citizens of different states when the amount in controversy exceeds
25 $75,000. 28 U.S.C. § 1332. The removing party has the burden of establishing
26 removal jurisdiction. Lowdermilk, 479 F.3d at 997; see Abrego Abrego v. The Dow
27 Chem. Co, 443 F.3d 676, 682-83 (9th Cir. 2006) (the removing defendant has
28 “‘always’ borne the burden of establishing federal jurisdiction, including any
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1 applicable amount in controversy requirement”) (quoting Gaus, 980 F.2d at 566)
2 (“Normally, this burden is satisfied if the plaintiff claims a sum greater than the
3 jurisdictional requirement.”). Courts determine the amount in controversy at the
4 time of removal and based on the allegations in the operative pleading. Lowdermilk,
5 479 F.3d at 994.
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Although diversity of citizenship may exist between the parties—Plaintiffs are

7 citizens of California and Defendant is a citizen of Illinois and/or Florida—the
8 amount of controversy is $2,647.96 and therefore does not exceed the requisite
9 $75,000. Thus, the Court does not have diversity jurisdiction in this matter.
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Defendant has not shown that the state court action could have originally been

11 brought in federal court; therefore, the Court must remand this action.
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CONCLUSION

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Having carefully reviewed the notice of removal and the accompanying

14 documents, the Court finds and concludes that it does not have subject matter
15 jurisdiction over this action. Accordingly, the Court REMANDS the above
16 captioned Case No. 37-2014-00300314-SC-SC-NC to the Small Claims Court of the
17 Superior Court of California, County of San Diego. The Clerk of Court shall return
18 the case to the state court forthwith and close this action.
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IT IS SO ORDERED.

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21 DATED: April 10, 2014
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Hon. Michael M. Anello
United States District Judge

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