Arcs Aligned, LLC v. Combined Capital Investment, LLC

Filing 16

ORDER AND REASONS granting in part and denying in part 10 Motion to Remand and for Attorney's Fees. This matter is remanded to state court, and Plaintiff's request for attorney's fees is denied, as set forth herein. Signed by Judge Jane Triche Milazzo on 03/07/2025. (ko) (Additional attachment(s) added on 3/7/2025: # 1 Remand Letter) (ko).

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
ARCS ALIGNED, LLC

CIVIL ACTION

VERSUS

NO.: 24-01475

COMBINED CAPITAL INVESTMENTS, LLC

SECTION H

ORDER AND REASONS
Before the Court is Plaintiff ARCS Aligned, LLC’s Motion to Remand
and for Attorney’s Fees (Doc. 10). For the following reasons, the Motion is
GRANTED IN PART.
BACKGROUND
On April 29, 2024, Plaintiff ARCS Aligned, LLC filed an action to
quiet title by acquisitive prescription in the Civil District Court for the
Parish of Orleans against Defendant Combined Capital Investments, LLC.
The property at issue is located at 1815 2nd St., New Orleans, Louisiana.
Plaintiff alleges that on January 29, 2010, a state tax sale deed conveyed tax
sale title to a 1% interest in the property to Second Suite LLC, and Second
Suite LLC transferred its interest to Plaintiff on August 17, 2022.
Defendant acquired or may have acquired an interest in the property by
quitclaim deed. Plaintiff alleges that it is the owner of 1% interest in the
property and is unwilling to continue ownership of the property with
Defendant. Plaintiff brought this suit seeking to partition the property and
order a judicial sale.
On June 9, 2024, Defendant removed this action to this Court on the
1

basis of federal question jurisdiction. Plaintiff has moved to remand the
matter, arguing that the Court does not have subject matter jurisdiction.
Defendant opposes.
LEGAL STANDARD
Generally, a defendant may remove a civil state court action to federal
court if the federal court has original jurisdiction over the action. 1 The
burden is on the removing party to show “that federal jurisdiction exists and
that removal was proper.” 2 When determining whether federal jurisdiction
exists, courts consider “the claims in the state court petition as they existed
at the time of removal.” 3
LAW AND ANALYSIS
Plaintiff moves to remand this action back to state court, arguing that
the Court does not have subject matter jurisdiction. Defendant asserts
original jurisdiction under 28 U.S.C. § 1331 based on a due process violation
of the Fourteenth Amendment. Defendant alleges that pursuant to Grable
& Sons Metal Products, Inc. v. Darue Engineering & Manufacturing,
Plaintiff has alleged a state law claim that necessarily raises a disputed
and substantial issue of federal law. 4 Specifically, Defendant contends that
the tax sale upon which Plaintiff asserts its interest in the subject property
is an absolute nullity because of a due process violation and cannot be “just
title.” Plaintiff rebuts that any due process issues have been raised by
Defendant in defense and therefore cannot create federal question
1 28 U.S.C. § 1441.

2 Barker v. Hercules Offshore, Inc., 713 F.3d 208, 212 (5th Cir. 2013) (quoting Manguno v.

Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 722 (5th Cir. 2002)).
3 Manguno, 276 F.3d at 723.
4 Grable & Sons Metal Prods., Inc. v. Darue Eng’g & Mfg., 545 U.S. 308 (2005).

2

jurisdiction.
Section 1441 provides that “any civil action brought in a state court of
which the district courts of the United States have original jurisdiction, may
be removed by the defendant.” The well-pleaded complaint rule governs the
existence of federal question jurisdiction. 5 Under this “well-pleaded
complaint” rule, a federal court has original or removal jurisdiction only if a
federal question appears on the face of the plaintiff’s well-pleaded
complaint. 6 The fact that federal law may provide a defense to a state claim
is insufficient to establish federal question jurisdiction. 7 Indeed, even an
inevitable federal defense does not provide a basis for removal jurisdiction.8
Accordingly, the issue then is whether a question of federal law appears on
the face of Plaintiff’s well-pleaded complaint or merely as a defense. 9
It cannot seriously be argued that Plaintiff’s claims “arise under”
federal law. Instead, Defendant argues that Plaintiff’s state law claims
have embedded federal issues. Defendant argues that for Plaintiff to
succeed on its claim for acquisitive prescription, it must show that it has
“just title,” and a tax sale that is absolutely null due to failure to comply
with due process requirements cannot support “just title.” Therefore, it
argues, compliance with due process is an essential element of Plaintiff’s
claim.
In support of its position that the federal question appears on the face
of Plaintiff’s Complaint, Defendant relies on the Supreme Court’s decision

5 Hoskins v. Bekins Van Lines, 343 F.3d 769, 772 (5th Cir. 2003).

6 Bernhard v. Whitney Nat. Bank, 523 F.3d 546, 551 (5th Cir. 2008).

E.g., Hart v. Bayer Corp., 199 F.3d 239, 244 (5th Cir. 2000); Merrell Dow Pharmaceuticals,
Inc. v. Thompson, 478 U.S. 804, 808 (1986).
8 Hoskins, 343 F.3d at 772 (quoting Carpenter v. Wichita Falls Ind. School Dist., 44 F.3d
362, 366 (5th Cir. 1995).
9 Elam v. Kan. City S. Ry., 635 F.3d 796, 803 (5th Cir. 2011).
7

3

in Grable. 10 In that case, the Court held that a state law claim can give
rise to federal question jurisdiction if the state law claim “necessarily
stated a federal issue, actually disputed and substantial, which a federal
forum may entertain without disturbing a congressionally approved
balance of federal and state judicial responsibilities.” 11 A substantial
question is one that implicates important national interests that are
appropriate for resolution in federal court. 12 A disputed issue raises a
serious controversy about a federal law’s meaning, validity, or effect. 13
Additionally, Congress’s preferred division of responsibility between state
and federal courts is transgressed if deciding the case would invite too
many similar state law cases into federal court. 14
In Grable, the Plaintiff brought a claim for quiet title in state court,
claiming that the title held by the purchaser of his property was invalid
because the IRS had failed to give him notice of the sale as required by
federal law. 15 The Court held that the case warranted federal jurisdiction
where the state title claim was premised on the IRS’s failure to give
adequate notice as defined by federal law. 16 Plaintiff’s claim therefore made
the issue of notice—which required analysis of a federal tax provision—an
essential element of his claim. 17 The Court also noted that “[t]he meaning of
the federal tax provision is an important issue of federal law that sensibly
belongs in federal court.” 18 Further, the Court explained that the notice
issue would only effect a small number of cases thereby not disrupting the
Grable, 545 U.S. at 308.
Id.
12 Id. at 313.
13 Id. at 309.
14 Id. at 308.
15 Id. at 315–16.
16 Id.
17 Id.
18 Id. at 315.
10
11

4

federal-state division of labor. 19
Plaintiff’s claim here is easily distinguishable from the one at issue in
Grable. First and foremost, Plaintiff’s Complaint does not state a federal
issue. “[I]n cases such as Grable, the underlying state-law claim expressly
stated its dependence on legal standards defined by federal law.” 20 Here,
Plaintiff claims it holds a state tax sale deed that is “just title” and supports
ownership of 1% interest in the property “as a result of acquisitive
prescription of ten years under state law.” 21 “The requisites for the
acquisitive prescription of ten years are: possession of ten years, good faith,
just title, and a thing susceptible of acquisition by prescription.” 22 Plaintiff
has not premised its claim on any issue of federal law. Instead, the Court
will be tasked with considering whether Plaintiff has met the state law
requirements for acquisitive prescription.
Defendant raises the issue of due process as an affirmative defense to
just one of these requirements—“just title.” Specifically, Defendant alleges
that the tax sale is absolutely null for lack of sufficient pre-sale and postsale notice to the owner or interested parties of the property at the time of
the tax sale pursuant to state law, the Louisiana Constitution, and the
United States Constitution. Accordingly, the court will indeed be tasked
with considering whether the notice given before and after the state tax
sale complied with the requirements of both state and federal due process.
That said, the ultimate issues required for resolution of Plaintiff’s claims—
including whether the tax sale is an absolute nullity and whether an
absolute nullity can constitute “just title”—will be decided under state

19

Id.

20 Gromer v. Mack, 799 F. Supp. 2d 704, 709 (N.D. Tex. 2011).
21 Doc. 10-1 at 2.

22 LA. CIV. CODE art. 3475.

5

law. 23 “[T]he mere presence of a federal issue in a state cause of action does
not automatically confer federal-question jurisdiction.” 24 Further, the
federal issue of whether Defendant received adequate due process does not
raise a serious controversy about a federal law’s meaning, validity, or effect;
rather, it appears to be predominately an issue of fact. 25 Finally, federal
courts do not have a strong interest in litigating the due process required
for a state law tax sale. Accordingly, Defendant has not shown that this
Court has federal question jurisdiction, and removal was improper.
Plaintiff also requests attorney’s fees incurred in the filing of this
Motion to Remand. Pursuant to 28 U.S.C. § 1447, “[a]n order remanding
the case may require payment of just costs and any actual expenses,
including attorney fees, incurred as a result of the removal.” The Supreme
Court has held that “the standard for awarding fees should turn on the
reasonableness of the removal. Absent unusual circumstances, courts may
award attorney’s fees under § 1447(c) only where the removing party lacked
an objectively reasonable basis for seeking removal. Conversely, when an
objectively reasonable basis exists, fees should be denied.” 26 While
Defendant was ultimately incorrect on its interpretation of Plaintiff’s
Complaint, the Court finds that it had an objectively reasonable and good
faith basis for removal. The Court declines to award attorney’s fees.

23

See LA. CIV. CODE art. 3483 cmt. (“[A]n absolutely null juridical act does not constitute a

just title.”).
24
25

Merrell Dow Pharms. Inc., 478 U.S. at 813.
Grable, 545 U.S. at 309.

26 Martin v. Franklin Cap. Corp., 546 U.S. 132, 141 (2005).

6

CONCLUSION
For the foregoing reasons, the Motion is GRANTED IN PART. This
matter is REMANDED to state court, and Plaintiff’s request for attorney’s
fees is DENIED.

New Orleans, Louisiana, this 7th day of March, 2025

JANE TRICHE MILAZZO
UNITED STATES DISTRICT JUDGE

7