Chingon International, LLC v. Guzman Pardo Family Trust #2 et al

Filing 20

ORDER GRANTING 9 Motion to Remand; all other pending 6 , 12 , 15 , 16 motions are DISMISSED. Signed by Judge Sam Sparks. (kkc)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
AUSTIN DIVISION

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CHINGON INTERNATIONAL, LLC,
Plaintiff,

Case No. A-14-CA-632-SS
GUZMAN PARDO FAMILY TRUST #2; MAYO
JOVITA'S INC.; AMANDA PARDO; and
OLIVIA RUIZ,
Defendants.

ORDER
BE IT REMEMBERED on this day the Court reviewed the file in the above-styled cause, and
specifically Plaintiff Chingon International, LLC's Motion to Remand [#9], and Defendants'

Response [#14]. Having reviewed the documents, the governing law, and the file as a whole, the
Court now enters the following opinion and orders GRANTING the motion to remand and
DISMISSING all other pending motions.

Background
Plaintiff Chingon International filed this lawsuit in Texas state court, alleging state-law
claims regarding Defendants' refusal to honor a contract to sell a parcel of real property. The
property was forfeited as a result of the criminal convictions of Defendant Amanda Pardo and others

for their involvement in a substantial heroin trafficking operation. Despite signing a contract to sell

the property to Chingon International and representing in this Court they want the property sold,
Defendants refused to attend the closing and continue to refuse to complete the sale. Defendants

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removed to this Court on the alleged basis of federal question jurisdiction. Chingon International
now moves to remand.

Analysis
I.

Legal Standard
"[T]he burden of establishing federal jurisdiction is placed upon the party seeking removal."

Willy v. Coastal Corp., 855 F.2d 1160, 1164(5th Cir. 1988). Moreover, because removal jurisdiction

raises significant federalism concerns, courts must strictly construe removal jurisdiction. Id. District
courts have federal question jurisdiction over "all civil actions arising under the Constitution, laws,
or treaties of the United States." 28 U.S.C.

II.

§

1331.

Application
Defendants allege federal question jurisdiction exists in this case. This lawsuit raises purely

state-law claims, such as breach of contract and tortious interference. In their Response, Defendants

suggest this case is analogous to Grable & Sons Metal Prods., Inc.

v.

Darue Eng 'g & Mfg., 545 U.S.

308 (2005). A cursory review of Grable puts that notion to rest.

Grable involved the rare instance in which "federal-questionjurisdiction {exists] over statelaw claims that implicate significant federal issues." Id. at 312. Specifically, Grable had brought a
state-law quiet title claim based on an allegation it did not receive proper statutory notice from the
IRS prior to the sale of the property to satisfy a tax delinquency. Id. at 310. The Supreme Court

found the exercise of federal question jurisdiction was proper, explaining: "Whether Grable was

given notice within the meaning of the federal statute is an essential element of its quiet title claim,
and the meaning of the federal statute is actually in dispute; it appears to be the only legal or factual

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issue contested in the case. The meaning of the federal tax provision is an important issue of federal

law that sensibly belongs in a federal court." Id. at 315.
This case is different in kind from Grable. Defendants have not identified any federal statute

which the state court will be required to interpret. See Am. Airlines, Inc.

v.

Sabre, Inc., 694 F.3d 539,

543 (5th Cir. 2012) ("Here, in contrast [to Grable], the state court would not be obligated to interpret

a federal statute, like the federal notice statute in Grable.. . because American's claims arise solely

under [state law]."); see also Singh v. Duane Morris LLP, 538 F.3d 334,339(5th Cir. 2008) (holding
federal question jurisdiction did not exist under Grable where the case "involve[d] no important
issue of federal law").

Defendants suggest the resolution of Chingon International's claims will turn upon a

determination of ownership of the forfeited property, but "Grable directs courts to examine the statelaw claim itself, not whether legal or factual determinations included in the state-law claim may also
be implicated in a parallel federal proceeding." Am. Airlines, 694 F.3d at 544. Whether Defendants

breached the contract they signed, or whether they tortiously interfered with that contract, does not
depend on the resolution of any "substantial federal question." See Grable, 545 U.s. at 313. At most,

the "federal issue" Defendants have identified is an alleged federal defense (an invalid forfeiture of
the property), which is insufficient to conferjurisdiction. See Venable v. La. Workers 'Comp. Corp.,
740 F.3d 937, 942-43 (5th Cir. 2013) ("[A]lthough the parties may ultimately litigate a federal issue

in their case, that fact does not show that the suit.

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arises under the Constitution or laws of the

United States." (internal quotation marks omitted)). Remand is therefore appropriate.

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Conclusion
The Court lacks subject-matter jurisdiction over the claims made in this case, and remand
is therefore required. However, the parties are no doubt concerned about, and knowledgeable of, the

position ofthe United States in the parallel federal litigation. Specifically, the United States contends
the property at issue in this case has been (or will be) confiscated because of its use in drug
trafficking. Alternatively, there is also the possibility the United States will have a claim to at least
50% ownership in the property, and the Defendants in this case may not ultimately have any lawful

ownership interest to grant.

Accordingly,
IT IS ORDERED that Plaintiff Chingon International, LLC's Motion to Remand [#9]
is GRANTED;

IT IS FURTHER ORDERED that all other pending motions are DISMISSED;

IT IS FURTHER ORDERED that this case is REMANDED to the 98th Judicial

District Court of Travis County, Texas, where it originated as Cause Number D-1-GN-14001860;
IT IS FINALLY ORDERED that the Clerk of Court shall provide the Travis County

District Court with a certified copy of this order.
SIGNED this the

day of September 2014.

Cf
SAM SPARKS
UNITED STATES DISTRICT JUDGE

632 remand ord kkt.frm