Federal National Mortgage Association v. Guevara et al

Filing 5

REPORT AND RECOMMENDATION that this action be remanded to Minnesota state district court. Objections to R&R due by 1/16/2014. Signed by Magistrate Judge Jeffrey J. Keyes on 1/2/14. (akl)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA

Federal National Mortgage Association,

Civ. No. 13-3603 (JNE/JJK)

Plaintiff,
v.
Hector Marquez Guevara, John Doe,
and Mary Roe,

REPORT AND
RECOMMENDATION

Defendants.

Gary Joseph Evers, Esq., Shapiro & Zielke, LLP, counsel for Plaintiff.
William B. Butler, Esq., Butler Liberty Law, LLC, counsel for Defendant Guevara.

INTRODUCTION
This matter is before the Court, United States Magistrate Judge Jeffrey J.
Keyes, on sua sponte consideration of remand. This eviction action was
originally initiated by Plaintiff Federal National Mortgage Association (“Fannie
Mae”) in Minnesota District Court, Dakota County, on December 12, 2013.
Defendants are the former owners of the property located at 2090 Carnelian
Lane, Eagan, Minnesota. The property was previously the subject of a mortgage
foreclosure sale on May 9, 2013.
On December 23, 2013, Defendant Guevara removed this action from
Minnesota state court on the basis that this Court has jurisdiction over the matter

pursuant to 28 U.S.C. §§ 1345 and 1349 asserting that Plaintiff is deemed a
federal agency.
This case is similar to numerous other eviction actions that have been
removed from state court to this court in recent months. The District Court has
referred all dispositive and non-dispositive matters to the Magistrate Judge under
28 U.S.C. § 636. (Doc. No. 3.) It is this Court’s determination that sua sponte
remand is appropriate.
Federal courts are courts of limited jurisdiction. Thomas v. Basham, 931
F.2d 521, 522 (8th Cir. 1991). Therefore, the Court may raise sua sponte issues
of subject-matter jurisdiction and abstention from exercising jurisdiction, even if
the parties concede the issues. Id. at 523; MCC Mortg. LP v. Office Depot, Inc.,
685 F. Supp. 2d 939, 942 (D. Minn. 2010) (noting that the court raised the issue
of abstention sua sponte). The district court must strictly construe the removal
statute against removal jurisdiction and resolve all doubts as to the propriety of
federal jurisdiction in favor of state court jurisdiction. 28 U.S.C. § 1447(c);
Masepohl v. Am. Tobacco Co., Inc., 974 F. Supp. 1245, 1249 (D. Minn. 1997)
(internal citation omitted).
Without deciding whether this action was properly removed under 28
U.S.C. § 1441 and 28 U.S.C. § 1345, this Court is persuaded that abstention from
exercising jurisdiction is appropriate in this instance. This Court has abstained
from exercising jurisdiction over substantially similar cases. See Fed. Home
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Loan Mtg. Corp. v. Contreras, No. 13-cv-897, Doc. No. 25 (ADM/AJB) (D. Minn.
Aug. 29, 2013) (citing cases), adopted at Doc. No. 29 (D. Minn. October 1, 2013).
Federal courts may decline to exercise jurisdiction in “exceptional
circumstances.” Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 716 (1996)
(quotation omitted). Abstention involves weighing principles of federalism and
comity against the federal interest in retaining jurisdiction. See id. at 716, 728–
29, 733–34. Federal courts exercise discretion to “restrain their authority
because of scrupulous regard for the rightful independence of the state
governments and for the smooth working of the federal judiciary.” Burford v. Sun
Oil Co., 319 U.S. 315, 317–34 (1943) (citations omitted).
In MCC Mortgage LP v. Office Depot, Inc., 685 F. Supp. 2d 939 (D. Minn.
2010), a district court in this District determined that it could abstain from hearing
an eviction action removed from Minnesota state court, citing Burford v. Sun Oil
Co., 319 U.S. 315, 317–34 (1943). MCC Mortg., 685 F. Supp. 2d at 947. Under
Burford, abstention is appropriate where the action involves “difficult questions of
state law bearing on policy problems of substantial public import,” or where the
exercise of federal review “would be disruptive of state efforts to establish a
coherent policy with respect to a matter of substantial public concern.”
Quackenbush, 517 U.S. at 726–27 (quoting Colorado River Water Conservation
Dist. v. United States, 424 U.S. 800, 814 (1976)). The court in MCC Mortgage
noted that “even where jurisdiction otherwise exists, courts often abstain from
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hearing eviction matters to avoid ‘completely emasculat[ing] the state structure for
dealing with such disputes.’” 1 685 F. Supp. 2d at 946–47 (quoting MRM Mgmt.
Co. v. Ali, No. 97-cv-1029, 1997 WL 285043, at *1 (E.D.N.Y. May 27, 1997)); see
also, e.g., Homesales Inc., of Delaware v. Greene, No. CV 10-3024-CL, 2010 WL
1630469, at *2–3 (D. Or. March 25, 2010) (stating that because unlawful detainer
actions involve a state regulatory statute and important state policy issues, the
federal court should abstain and remand the matter to state court) (report and
recommendation adopted by district court on other grounds, 2010 WL 1630468
(D. Or. April 19, 2010 2); CPG Finance I, L.L.C. v. Shopro, Inc., No. 06-3015-CVS-RED, 2006 WL 744275, at *4 (W.D. Mo. March 22, 2006) (noting that policy
objectives underlying abstention support remand of removed dispossessory
action) (quoting Quackenbush v. Allstate Ins. Co., 517 U.S. at 716) (“[A]bstention
is warranted by considerations of proper constitutional adjudication, regard for
federal-state relations, or wise judicial administration.”)); Glen 6 Assocs. v. Dedaj,
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Although the court in MCC Mortgage LP v. Office Depot, Inc., 685 F. Supp.
2d 939 (D. Minn. 2010), declined to abstain from jurisdiction, that case is
factually-distinguishable from this action, which involves a post-foreclosure
eviction of a former mortgagor. Further, this Court is cognizant that this action is
one of numerous post-foreclosure eviction actions that have been removed to this
court in the last several months on the same removal grounds Defendant invokes
here, which further distinguishes the present action and the Court’s ability to
efficiently and expediently handle such summary eviction proceedings.
2

In Homesales Inc. of Delaware, the district court found that the court had
no subject-matter jurisdiction over the unlawful detainer action, and therefore did
not reach the issue of abstention in adopting the magistrate judge’s
(Footnote Continued on Next Page)
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770 F. Supp. 225, 228–29 (S.D.N.Y. 1991) (finding that principles of comity and
federalism dictate abstaining from eviction matter and noting that accepting
removal of eviction proceedings to federal court would overburden the federal
system).
Although “abstention ‘is the exception, not the rule,’” MCC Mortg., 685 F.
Supp. 2d at 947 (quoting Colorado River Water Conservation Dist. v. United
States, 424 U.S. 800, 813 (1976)), this Court concludes that abstention is proper
in this instance. This post-foreclosure eviction action is a summary proceeding
created by Minnesota state law (Minn. Stat. § 504B), the enforcement of which is
tasked to Minnesota law enforcement personnel. See generally Minn. Stat.
§§ 504B.001, subd. 4, 504B.365; see also Homesales Inc., of Delaware, 2010
WL 1630469, at *2–3 (noting that unlawful detainer “is a special statutory
proceeding” regulated by state law, which provides such action be brought in
state circuit courts). Eviction actions are fundamentally a matter of state law.
See MCC Mortg., 685 F. Supp. 2d at 946. There is no federal interest in retaining
the proceedings or federal right at stake, and there is no apparent prejudice in the
action proceeding in state court. See, e.g., Glen 6 Assocs., 770 F. Supp. at 228.
Minnesota state district courts and the various County Housing Courts have a
superior ability to handle efficiently the large volume of post-foreclosure eviction
(Footnote Continued from Previous Page)
recommendation of remand. 2010 WL 1630468, at *1 (D. Or. April 19, 2010).
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cases to which Fannie Mae is a party. As the district court in Fed. Home Loan
Mortg. Corp. v. Matassino (N.D. Ga. Dec. 3, 2012) noted: “The court is very
aware that dispossessory actions are now, and have always been, primarily state
court matters. State courts are highly familiar with dispossessory procedure, and
federal courts are ill-equipped to adjudicate these actions.” Fed. Home Loan
Mortg. Corp. v. Matassino, No. 1:11-CV-3895-CAP, 2012 WL 6622607, at *8
(N.D. Ga. Dec. 3, 2012). Considering principles of comity, federalism, and
judicial economy, this Court recommends abstaining from this matter and finds
that remand is warranted.
RECOMMENDATION
Based on the foregoing and all of the files, records, and proceedings
herein, IT IS HEREBY RECOMMENDED that:
1.

This action be remanded to Minnesota state district court.

Date: January 2, 2014
s/ Jeffrey J. Keyes
JEFFREY J. KEYES
United States Magistrate Judge

Under Local Rule 72.2(b) any party may object to this Report and
Recommendation by filing with the Clerk of Court, and serving all parties by
January 16, 2014, a writing which specifically identifies those portions of this
Report to which objections are made and the basis of those objections. Failure to
comply with this procedure may operate as a forfeiture of the objecting party's
right to seek review in the Court of Appeals. A party may respond to the
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objecting party's brief within fourteen days after service thereof. All briefs filed
under this rule shall be limited to 3500 words. A judge shall make a de novo
determination of those portions of the Report to which objection is made. This
Report and Recommendation does not constitute an order or judgment of the
District Court, and it is therefore not appealable directly to the Circuit Court of
Appeals.

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