PMT NPL Financing 2015-1 v. Lee et al

Filing 13

ORDER OF REMAND re plaintiff's 10 Motion to Remand. This matter is hereby REMANDED to the Superior Court of Washington State in and for the County of King. No later than ten (10) days from the date of this Order, plaintiff may file an affidav it stating the reasonable fees and costs incurred. Within thirty (30) days from the date of this Order, defendant Thomas C. Lee shall SHOW CAUSE as to why this Court should not impose sanctions. Signed by Judge Robert S. Lasnik. The Clerk of Court is directed to immediately transfer this case to state court, which shall have immediate and full jurisdiction over this matter notwithstanding the on-going sanction proceedings in this Court. (SWT) (cc: Thomas Lee via USPS)

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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

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PMT NPL FINANCING 2015-1,
Plaintiff,

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Case No. C17-01376RSL
v.
ORDER OF REMAND
THOMAS C. LEE, an individual, and DOES 1
though 10, inclusive,
Defendants.

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Plaintiff PMT NPL Financing 2015-1 filed this unlawful detainer action in state court. On

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April 6, 2017, defendant Thomas C. Lee removed the case to federal court pursuant to 28 U.S.C.

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§§ 1441(a)–1446, with particular reference to 28 U.S.C. § 1443(1). Mr. Lee alleges that federal

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jurisdiction arises from his Fourteenth Amendment defense and diversity of citizenship. On June

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30, 2017, The Honorable Ricardo S. Martinez ordered this same litigation remanded to the

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Superior Court of Washington State in and for the County of King on the ground that the court

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lacked subject matter jurisdiction because defendant cannot create a federal question by asserting

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a federal defense and because defendant failed to establish the $75,000 threshold for diversity

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jurisdiction. The court found that the defendant did not have an objectively reasonable basis for

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removal and invited plaintiff to file a supplemental motion for attorneys’ fees. Plaintiff did not

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file such a motion. See PMT NPL Financing 2015-1 v. Lee, C17-535RSM (W.D. Wash. June 30,

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2017). On September 13, 2017, defendant once again removed the case to federal court, again

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alleging that the Court has jurisdiction based on the Fourteenth Amendment and diversity of
ORDER OF REMAND - 1

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citizenship, using a functionally identical Notice of Removal (Dkt. #1).1
The removal statute, 28 U.S.C. § 1441, is construed restrictively: any doubts regarding
the removability of a case will be resolved in favor of remanding the matter to state court. See,
e.g., Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09 (1941); Durham v. Lockheed
Martin Corp., 445 F.3d 1247, 1252 (9th Cir. 2006); Hawaii ex rel. Louie v. HSBC Bank Nev.,
N.A., 761 F.3d 1027, 1034 (9th Cir. 2014). When a case is filed in state court, removal is
typically proper if the case could have originally been brought in federal court, i.e., if the
complaint raises a federal question or there is diversity of citizenship and the amount in
controversy exceeds $75,000. 28 U.S.C. §§ 1331, 1332(a), 1441; Wash. v. Chimei Innolux
Corp., 659 F.3d 842, 847 (9th Cir. 2011). Certain civil rights cases may also be removed. 28
U.S.C. § 1443. The burden of establishing federal jurisdiction is on the removing party. Hunter
v. Philip Morris USA, 582 F.3d 1039, 1042 (9th Cir. 2009). It is therefore defendant’s burden to
show there is a federal question, that the requirements for diversity jurisdiction are met, or that
this removal meets the narrow standard that applies to civil rights cases.
Federal question jurisdiction exists only when the plaintiff’s well-pleaded complaint
presents a federal question on its face. A “defense based upon federal law is insufficient to
support jurisdiction.” Wayne v. DHL Worldwide Express, 294 F.3d 1179, 1183 (9th Cir. 2002)
(citing Franchise Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 10–12 (1983)); accord
Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987). As the plaintiff’s complaint rests entirely
on state law, there is no federal question jurisdiction. The defendant cannot create federal
question jurisdiction by the virtue of his own federal constitutional defenses.
In order to establish diversity jurisdiction, the defendant must show that the plaintiff

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The only distinction between the first Notice of Removal and the second Notice of Removal is
the second contains the following addition: “Diversity in the instant case exists due to the diverse
domiciles contained herein: Plaintiff’s domicile is Washington state, whereas Defendant’s domicile is in
Florida.”
ORDER OF REMAND - 2

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claims damages greater than the jurisdictional requirement. This is satisfied if the plaintiff claims
a sum greater than $75,000, or, if the plaintiff’s damages sought are unclear, the defendant must
provide the facts to prove the jurisdictional amount. Gaus v. Miles, Inc., 980 F.2d 564, 566–67
(9th Cir. 1992). In its complaint, plaintiff does not seek damages but rather a writ of restitution
to restore possession of the premises and a decree “that any personal property left on the subject
property by the Defendant . . . be deemed abandoned and valueless and authorizing the Plaintiff
to take possession of such property or discard or destroy said property, as the Plaintiff shall see
fit.” Defendant provides no additional facts to prove the jurisdictional amount. There is no
adequate basis for the Court to find that the jurisdictional amount is satisfied.2
The defendant also cites 28 U.S.C. § 1443(1) as a basis for removal. As a threshold

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matter, this statute requires that “the civil right allegedly denied must arise under a federal law

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‘providing for specific civil rights stated in terms of racial equality.’” California v. Dawodu, 122

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F. App'x 884, 885 (9th Cir. 2004) (citing Johnson v. Mississippi, 421 U.S. 213, 219–20 (1975);

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Georgia v. Rachel, 384 U.S. 780 (1966)); accord City of Greenwood v. Peacock, 384 U.S. 808

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(1966). Defendant’s Equal Protection and Due Process allegations do not satisfy this threshold

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because the clauses are “phrased in terms of general application available to all persons or

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citizens, rather than in the specific language of racial equality that §1443 demands.” Georgia v.

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Rachel, 384 U.S. 780, 792 (1966); accord California v. Dawodu, 122 F. App'x 884, 885 (9th Cir.

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2004). Removal under 28 U.S.C. § 1443(1) is improper.3

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“An order remanding the case may require payment of just costs and any actual expenses,

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It also appears that defendant is domiciled in Washington (Dkt. #1).

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Even assuming that the unlawful detainer action violated defendant’s right to racial equality,
defendant’s removal under 28 U.S.C. § 1443(1) would still be improper. He has failed to establish that
the state court could not enforce his right to racial equality because a Washington statute or
constitutional provision purported to command the state court to ignore his federal right. Accord U.S.
Bank Nat. Ass’n v. Azam, 582 F. App’x 710, 710–11 (9th Cir. 2014) (unlawful detainer case).
ORDER OF REMAND - 3

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including attorney fees, incurred as a result of the removal.” 28 U.S.C. § 1447(c). “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.” Martin v. Franklin
Capital Corp., 546 U.S. 132, 141 (2005). At the time of the first order to remand, Judge Martinez
found that the defendant did not have an objectively reasonable basis for removal as there was
no case law supporting removal of a state unlawful detainer action or removal of an action based
on federal law defenses. Defendant removes now on the same grounds as before, and no new
case law supporting such removal has arisen in the months since the first removal and remand.
Defendant therefore lacks an objectively reasonable basis for removal, and costs and fees to
plaintiff incurred as a result of this second removal are appropriate.
In addition, bad faith litigation misconduct is sanctionable under the Court’s inherent

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powers, Local Civil Rule 11(c), and Fed. R. Civ. P. 11. See Fink v. Gomez, 239 F.3d 989,

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991–92 (9th Cir. 2001). The Court has the inherent authority “to sanction a party . . . if it acts in

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‘willful disobedience of a court order . . . or when the losing party has acted in bad faith,

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vexatiously, wantonly, or for oppressive reasons,’ as well as for ‘willful[ ] abuse [of the] judicial

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processes.’” Gomez v. Vernon, 255 F.3d 1118, 1133-34 (9th Cir. 2001) (citing Roadway

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Express, Inc. v. Piper, 447 U.S. 752, 766 (1980)), cert. denied, 534 U.S. 1066, (2001). The

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Court has authority under Local Civil Rule 11(c) to sanction a party who “presents to the court

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unnecessary motions or unwarranted opposition . . ., or who otherwise so multiplies or obstructs

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the proceedings in a case.” LCR 11(c); Cf. 28 U.S.C. § 1927. Rule 11 also provides a basis for

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sanctions where “a filing is frivolous, legally unreasonable, or without factual foundation, or is

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brought for an improper purpose.” Siddiqui v. AG Commc'n Sys. Corp., 233 F. App'x 610, 613

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(9th Cir. 2007) (citing Estate of Blue v. County of Los Angeles, 120 F.3d 982, 985 (9th Cir.

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1997)). When faced with litigation abuses by a pro se party, a court “cannot . . . decline to

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impose a sanction, where a violation has arguably occurred, simply because plaintiff is

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proceeding pro se.” Warren v. Guelker, 29 F.3d 1386, 1390 (9th Cir. 1994).
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The sanctions that may be imposed under any or all of the above authorities include

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monetary sanctions and/or the imposition of a standing bar order that limits defendant’s abilities
to remove or file actions pro se. There being no objectively reasonable basis for the removal of
an unlawful detainer action, much less a second removal in the same case, the Court finds and
ORDERS that:
1.

There is no basis for the exercise of federal jurisdiction. This matter is hereby

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REMANDED to the Superior Court of Washington State in and for the County of King.

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The Clerk of Court is directed to immediately transfer this case to state court, which shall

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have immediate and full jurisdiction over this matter notwithstanding the on-going
sanction proceedings in this Court.

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2.

Plaintiff is entitled to an award of fees and costs associated with bringing this second

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Motion for Remand (Dkt. #10). No later than ten (10) days from the date of this Order,

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plaintiff may file an affidavit stating the reasonable fees and costs incurred.

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3.

Within thirty (30) days from the date of this Order, defendant Thomas C. Lee shall

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SHOW CAUSE as to why this Court should not impose sanctions, including the

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imposition of a pre-filing review procedure on any future attempts to remove this action

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from state court.

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Dated this 10th day of January, 2018.

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A
Robert S. Lasnik

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United States District Judge

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ORDER OF REMAND - 5

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