St. Vincent de Paul Society of Lane County v. Culpepper

Filing 9

OPINION AND ORDER: Plaintiff's Motion to Remand to State Court 4 is GRANTED. Signed on 1/2/2018 by Judge Ann L. Aiken. (ck)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
EUGENE DIVISION

ST. VINCENT de PAUL SOCIETY OF
LANE COUNTY, an Oregon nonprofit
Corporation,

Case No. 6:17-cv-01221-AA
OPINION AND ORDER

Plaintiff,
vs.
KELLY RAE CULPEPPER,
Defendants.

AIKEN, Judge:
In this case, plaintiff St. Vincent de Paul Society of Lane County ("St. Vincent") moves
for an order remanding this matter back to state comt.

Defendant Kelly Rae Culpepper

("Culpepper") argues that this matter should remain before this Court. Based on the reason set
forth below, plaintiffs Motion to Remand to State Comt (doc. 4) is GRANTED.
BACKGROUND

This case originated in Oregon State Court as a Forcible Entry and Detainer ("FED")
action. On July 25, 2017, plaintiff filed this action in the Circuit Coutt of the State of Oregon for
Lane County to evict defendant for alleged repeated violations of plaintiffs policies for tenants
Page 1 - OPINION AND ORDER

leasing units. On July 31, 2017, defendant filed an answer and provided an affirmative defense,
discriminatmy conduct under Or. Rev. Stat. § 90.390, and four counterclaims: (1) retaliatory
conduct by landlord under Or. Rev. Stat. § 90.385, (2) discrimination and retaliatory conduct
under the Fair Housing Act ("FHA"), (3) defamation, and (4) slander per se. (doc. 1) On August
7, 2017, defendant filed a Notice of Removal (doc. 1) to federal court relying on the FHA
counterclaim as the basis for removal to federal court.
Plaintiff now moves the Court for an order remanding this case back to state court
arguing that (1) Oregon law does not allow defendant to include a FHA counterclaim in an FED
proceeding, (2) defendant's civil rights are protected under Oregon statutes, and (3) defendant
has the right to pursue damages under the FHA in a separate action.
STANDARD OF REVIEW

The right to remove a case to federal comi is entirely a creature of statute. See Libhart v.

Santa Monica Dairy Co., 592 F.2d 1062, 1064 (9th Cir.1979). The Ninth Circuit "strictly
construe[s] the removal statute against removal jurisdiction," and "[flederal jurisdiction must be
rejected ifthere is any doubt as to the right of removal in the first instance." Gaus v. lvii/es, Inc.,
980 F.2d 564, 566 (9th Cir.1992).

Counterclaims in a state-comi action, even if they rely

exclusively on federal substantive law, do not qualify a case for federal-court cognizance. Vaden

v. Discover Bank, 556 U.S. 49, 61-62 (2009). 28 U.S.C. § 1447(c) authorizes the comi to
remand a case for lack of subject matter jurisdiction. See Brockman v. lvlerabank, 40 F.3d 1013,
1015 (9th Cir.1994). A district comi may also remand a case for lack of an objective reasonable
basis for removal under 28 U.S.C. § 1443. See Patel v. Del Taco, Inc., 446 F.3d 996, 999 (9th
Cir. 2006).

II!

Page 2 - OPINION AND ORDER

DISCUSSION

Defendant's basis for removal to federal comt is based on two statutes: (1) 28 U.S.C. §
1331 - federal question and (2) 28 U.S.C. § 1443 - civil rights cases.

l

28 U.S. C. § i 33 i - Federal Question
a. Federal Jurisdiction based on a Counterclaim

Defendant relies upon 28 U.S.C. § 1331, which vests in federal district courts jurisdiction
over "all civil actions arising under the Constitution, laws, or treaties of the United States." 28
U.S.C. § 1331

"Under the established well-pleaded complaint rule, however, a suit 'arises

under' federal law 'only when the plaintiff's statement of his own cause of action shows that it is
based upon [federal law]."' Vaden, 556 U.S. at 61-62 (emphasis added) (quoting Louisville &
Nashville R. Co. v. 1'1ottley, 211U.S.149, 152 (1908)).

Therefore, federal jurisdiction cannot rest upon an actual or anticipated counterclaim.
Holmes Gip., inc. v. Vornado Air Circulation Sys., inc., 535 U.S. 826, 832 (2002); ARCO Envtl.
Remediation, LLC v. Dep't ofHealth & Envtl. Quality oflvfontana, 213 F.3d 1108, 1113 (9th Cir.

2000) ("[T]he existence of federal jurisdiction depends solely on the plaintiffs claims for relief
and not on anticipated defenses to those claims."). Counterclaims in state-comt action, even if
they rely exclusively on federal substantive law, do not qualify a case for federal-court
cognizance. Vaden, 556 U.S. at 61-62.
There are of course exceptions to the well-pleaded complaint rule. For instance, under
the "artful pleading rule," a plaintiff may not avoid removal through the omission of necessary
federal questions in the complaint. ARCO Envtl. Remediation, LLC, 213 F.3d at 1114. Another
exception to the well-pleaded complaint rule is complete preemption.

Caterpillar Inc. v.

Williams, 482 U.S. 386, 393 (1987). "Once an area of state law has been completely pre-empted,

Page 3 - OPINION AND ORDER

any claim purp01iedly based on that pre-empted state law is considered, from its inception, a
federal claim, and therefore arises under federal law." Id.
Defendant asserts that this Court has jurisdiction under 28 U.S.C. § 1331. Defendant
concedes, however, that plaintiffs complaint does not contain a federal cause of action.
Defendant instead asserts that "the removable claim is [d]efendant's [counter] claim for
discriminatory and retaliatory conduct in violation of the Federal Fair Housing Act, 42 U.S.C. §
3604." (doc. 1 at 3)
In this case, defendant may not assert federal jurisdiction based upon her counterclaim.
Plaintiffs complaint does not contain a federal cause of action, and defendant may not base
federal jurisdiction outside of the plaintiffs "well-pleaded complaint." Allowing defendant to
base federal jurisdiction on her counterclaim would be contrary to the well-established policies
and precedent. 1
Additionally, the exceptions to the well-pleaded complaint rule do not apply here.
Plaintiff does not mifully plead to avoid removal, and complete preemption does not apply. The
Oregon FED Statute states that the "person entitled to the premises may maintain in the county
where the property is situated an action to recover the possession of the premises in the circuit
comi or before any justice of the peace of the county." Or. Rev. Stat. Ann.§ 105.110. Because

1

The Supreme Court in Holmes gave three reasons why allowing counterclaims to
establish "arising under" jurisdiction would contravene longstanding policies and precedent.
Holmes Gip., Inc., 535 U.S. at 831-32. First, the plaintiff is the master of the complaint and has
the ability to eschew claims based on federal law to be heard in state comi. Id at 831. Second,
allowing counterclaims to establish "arising under" jurisdiction would confer power upon the
defendant that would have the effect of radically expanding the class of removable cases. Id. at
832. Third, "allowing responsive pleadings by the defendant to establish "arising under"
jurisdiction would unde1mine the clarity and ease of administration of the well-pleadedcomplaint doctrine, which serves as a "quick rule of thumb" for resolving jurisdictional
conflicts." Id. (internal citations omitted).
Page 4 - OPINION AND ORDER

there is no federal law providing the same cause of action as this cause of action under Oregon
law, the complaint does not necessarily arise under federal law and is therefore not preempted.

b. FED Statute Limitation on Counterclaims
Plaintiff fmther argues that removal in this case is inappropriate because Oregon's FED
statute does not allow a counterclaim based on the Fair Housing Act.
Oregon law states that [n]o person named as a defendant in an action brought under
[Oregon's forcible entry and wrongful detainer statutes] may asse11 a counterclaim unless the
right to do so is otherwise provided by statute. Or. Rev. Stat. Ann. § 105.132. Comts have
required strict construction of laws that define the FED process. See Teresi v. Gina Belmonte

Corp., 572 P2d 647, 649 (Or. Ct. App. 1977) ("An FED action is a special statutory proceeding,
summary in its nature; it is in derogation of the common law and must be strictly construed.").
Defendant's counterclaim based on the FHA is not one of those counterclaims pennitted
by statute. However, defendant argues that there are exceptions to the strict statutory language
of Or. Rev. Stat. Ann. § 105.132, and those exceptions should be extended to include a
counterclaim under the FHA.
Defendant identifies two possible exceptions to the specified counterclaims under Or.
Rev. Stat. Ann. § 105.132: (1) counterclaims for negligence actions and (2) counterclaims under
the Oregon Unfair Trade Practices Act ("UTPA").

Even if there is an exception to Or. Rev.

Stat. Ann. § 105.132 for negligence claims, which is unlikely, I am not persuaded that such an
exception should extend to counterclaims under the FHA. 2 Oregon law is clear that the Oregon

2

Defendant cites four cases in suppo11 of her contention that there is an exception for
negligence actions under the specified claims rule in Or. Rev. Stat. Ann. § 105.132: Waldner v.
Stephens, 162 P.3d 342 (Or. Ct. App. 2007); Davis v. Campbell, 965 P.2d 1017 (Or. 1998); Jones
v. Bierek, 743 P.2d 1153 (Or. Ct. App. 1987); Coulter Property kfanagement, Inc. v. James, 970
P.2d 209 (Or. 1998). However, the first three cases originated as non-FED proceedings and Or.
Page 5 - OPINION AND ORDER

FED statutes should be strictly construed, and, under that standard, there 1s no exception
extended to counterclaims under the FHA.
Defendant's contention that counterclaims under the UTPA is an exception to Or. Rev.
Stat. Ann.§ 105.132 is misplaced. Counterclaims under the UTPA are allowed under Or. Rev.
Stat. Ann. § 105.132 because they are specifically permitted by statute. Or. Rev. Stat. Ann. §
646.638(6) "provides the authority for the filing of a UTPA counterclaim in an action for
possession under the FED statutes." Hoffer v. Szumski, 877 P.2d 128, 130 (Or. Ct. App. 1994).
Because federal jurisdiction under 28 U.S.C. § 1331 cannot be based on a counterclaim,
and defendant's counterclaim under the FHA is not pe1mitted by the Oregon FED statute,
removal under 28 U.S.C. § 1331 is not permitted.
11

28 US. C. § 1443 - Civil Rights

The second question before the Court is whether there is an objective reasonable basis for
removal under 28 U.S.C. § 1443, that is, whether the defendant has been denied or cannot
enforce her rights in state court.
A petition for removal under § 1443(1) must satisfy the two-pmt test articulated by the
Supreme Court in Georgia v. Rachel, 384 U.S. 780, 788-92, 794-804 (1966) and City of
Greenwood, lvfiss. v. Peacock, 384 U.S. 808, 824-28 (1966). "First, the petitioners must assert,

as a defense to the prosecution, rights that are given to them by explicit statutory enactment
Rev. Stat. Ann.§ 105.132 is therefore not applicable. Waldner, 162 P.3d at 343-44 (case
originated as a common-law t01t claim and a claim under the Oregon Residential Landlord
Tenant Act); Davis, 965 P.2d at 1017 (case originated as a claim under the Oregon Residential
Landlord Tenant Act); Jones, 743 P.2d at 1154 (case originated as a common-law t01t claim and
defendant raised a defense under the Oregon Residential Landlord Tenant Act). The fourth case,
Coulter Property lvfanagement, did originate as an FED proceeding and the defendant asserted
counterclaims, one of which was a common-law negligence claim. Coulter Property
i\!fanagement, Inc., 970 P.2d at 210. There the court did not give an explanation of how Or. Rev.
Stat. Ann. § 105.132 did or did not apply. Id. One possible reason is that the plaintiff dismissed
the FED action and the jury proceedings only involved the counterclaims. Id.
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protecting equal racial civil rights." California v. Sandoval, 434 F.2d 635, 636 (9th Cir.1970).
"Second, petitioners must assert that the state comts will not enforce that right, and that
allegation must be supp01ted by reference to a state statute or a constitutional provision that
purpo1ts to command the state comts to ignore the federal rights." Id.
Here defendant does not point to a formal expression of Oregon state law that prohibits
her from enforcing her civil rights.

Additionally, defendant does not point to any facts or

allegations to suggest that the state court would not enforce her civil rights in the state cou1t
proceedings. Thus, defendant has not been denied and is able to enforce her civil rights in state
court. See Or. Rev. Stat. Ann. § 90.390. Therefore, this is not a proper basis for removal.
CONCLUSION

For the reasons set f01th above, removal in this case 1s not proper.
plaintiffs Motion to Remand to State Court (doc. 4) is GRANTED.
IT IS SO ORDERED.
Dated

this~ay of January 2018.

rlL~A ~

AnnAiken
United States District Judge

Page 7 ~OPINION AND ORDER

Accordingly,