Wilburn et al v. Indymac Bank, FSB et al
Filing
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MEMORANDUM AND ORDER REMANDING CASE signed by Judge William B. Shubb on 5/31/11; case remanded to Superior Court of the State of California in and for the County of Shasta. Copy of remand order sent to other court. CASE CLOSED. (Meuleman, A)
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UNITED STATES DISTRICT COURT
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EASTERN DISTRICT OF CALIFORNIA
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AARON M. WILBURN; ANNA L.
WILBURN,
NO. CIV. 2:10-3384 WBS CMK
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MEMORANDUM AND ORDER RE:
REMAND OF ACTION
Plaintiffs,
v.
INDYMAC BANK, F.S.B.; NDEX
WEST, L.L.C.; INDYMAC FEDERAL
BANK FSB SUCCESSOR BY MERGER
TO INDYMAC BANK, F.S.B.;
ONEWEST BANK, FSB; DEUTSCHE
BANK NATIONAL TRUST COMPANY,
AS TRUSTEE OF THE INDYMAC INDX
MORTGAGE LOAN TRUST 2005-AR7
UNDER THE POOLING AND
SERVICING AGREEMENT DATED
APRIL 1, 2005; DEUTSCHE BANK
NATIONAL TRUST COMPANY, AS
TRUSTEE OF THE INDYMAC INDX
MORTGAGE LOAN TRUST 2005-AR7,
MORTGAGE PASS-THROUGH
CERTIFICATES, SERIES 2005-AR7
UNDER THE POOLING AND
SERVICING AGREEMENT DATED
APRIL 1, 2005; and DOES 1
through 50, inclusive,
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Defendants.
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Plaintiffs filed this action in state court on May 14,
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2010, alleging ten state law claims relating to a residential
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loan.
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Corporation (“FDIC”), as receiver for defendant IndyMac Federal
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Bank, FSB,1 removed the action from state court pursuant to 28
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U.S.C. 1441(b) and 12 U.S.C. § 1819(b)(2)(B).
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1441(b) (providing that actions may be removed that arise under
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federal law); 12 U.S.C. § 1819(b)(2)(A) (deeming actions in which
On December 20, 2010, the Federal Deposit Insurance
See 28 U.S.C. §
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the FDIC is a party as arising under federal law); 12 U.S.C. §
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1819(b)(2)(B) (providing that the FDIC may remove actions against
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it).
Following the voluntary dismissal without prejudice of
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this action as against the FDIC, (Docket No. 8.), the court
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requested briefing from the parties addressing whether this
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action should be remanded to state court pursuant to 28 U.S.C. §
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1367(c)(3).
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support of remand, (Docket No. 15), and defendants OneWest Bank,
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FSB, and Deutsche Bank National Trust Company filed a brief
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opposing remand.
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argue that some of the state law claims against them are
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preempted by the Home Owners’ Loan Act (“HOLA”), 12 U.S.C. §§
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1461-1470, and that this court has original jurisdiction because
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of their preemption defense.
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supplemental jurisdiction even if the court finds that it no
(Docket No. 13.)
Plaintiffs filed a brief in
(Docket No. 16.)
In their brief, defendants
They also urge the court to retain
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The FDIC, as receiver for defendant Indymac Federal
Bank, FSB, was substituted in for defendants IndyMac Bank,
F.S.B., and IndyMac Federal Bank, FSB, successor by merger to
IndyMac Bank, F.S.B., on December 27, 2010. (Docket No. 6.)
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longer has original jurisdiction.
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A defendant may remove an action filed in state court
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to federal court if the federal court would have original subject
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matter jurisdiction over the action.
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courts have original subject matter jurisdiction over “all civil
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actions arising under the Constitution, laws, or treaties of the
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United States.”
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based original jurisdiction on federal question jurisdiction, as
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the FDIC was a party.
28 U.S.C. § 1331.
28 U.S.C. § 1441.
Federal
Here, the Notice of Removal
See 12 U.S.C. § 1819(b)(2)(A).
Following
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the voluntary dismissal of the FDIC, this ground for original
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jurisdiction ceased to exist.
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No. 2:10-cv-00516 WBS JFM, 2010 WL 5204305, at *1 n.1 (E.D. Cal.
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Dec. 15, 2010); Vivo v. IndyMac Bank, FSB, No. CV 09-2555, 2009
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WL 1635135, at *4 (C.D. Cal. June 10, 2009); Turner v. Wells
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Fargo Bank, No. C 05-1126, 2005 WL 1865421, at *3 (N.D. Cal. Aug.
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5, 2005).
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unless another ground for jurisdiction exists.
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See Schwartz v. Indymac Fed. Bank,
Thus, the court no longer has original jurisdiction
“In determining federal question jurisdiction, the
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well-pleaded complaint rule ‘provides that federal jurisdiction
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exists only when a federal question is presented on the face of
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the plaintiff’s properly pleaded complaint.’”
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Morris USA, 582 F.3d 1039, 1042 (9th Cir. 2009) (quoting Fisher
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v. NOS Commc’ns (In re NOS Commc’ns), 495 F.3d 1052, 1057 (9th
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Cir. 2007)).
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to federal court on the basis of a federal defense, including the
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defense of preemption . . . .’”
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Franchise Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1,
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14 (1983)) (emphasis added); see Franchise Tax Bd., 463 U.S. at
Hunter v. Philip
“It is ‘settled law that a case may not be removed
Id. at 1042-43 (quoting
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10 n.9 (“The well-pleaded complaint rule applies to the original
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jurisdiction of the district courts as well as to their removal
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jurisdiction.”).
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The doctrine of “complete preemption” provides a narrow
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exception to the rule that defenses are irrelevant to
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jurisdiction.
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federal statute wholly displaces the state-law cause of action
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through complete pre-emption,” the claim, although pleaded in
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terms of state law, is in actuality based on federal law and is
Under the complete preemption doctrine, when “a
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therefore removable to federal court.
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Anderson, 539 U.S. 1, 8 (2003).
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arises only in ‘extraordinary’ situations.”
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Mortg. Co., 340 F.3d 858, 862 (9th Cir. 2003) (quoting Wayne v.
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DHL Worldwide Express, 294 F.3d 1179, 1183-84 (9th Cir. 2002)).
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It is a narrow exception that applies only “when Congress intends
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not merely to preempt a certain amount of state law, but also
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intends to transfer jurisdiction of the subject matter from state
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to federal court.”
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Beneficial Nat’l Bank v.
“Complete preemption, however,
Ansley v. Ameriquest
Wayne, 294 F.3d at 1183.
Through HOLA, Congress gave the Office of Thrift
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Supervision (“OTS”) broad authority to issue regulations
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governing thrifts.
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for federal savings associations, OTS promulgated a preemption
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regulation, providing that “OTS hereby occupies the entire field
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of lending regulation for federal savings associations.”
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C.F.R. § 560.2(a).
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inter alia, those governing terms of credit; loan-related fees;
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disclosure and advertising; processing, origination, servicing,
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sale and purchase of, or investment or participation in,
12 U.S.C. § 1464.
As the principal regulator
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The types of state laws preempted include,
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mortgages; and disbursements and repayments.
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(5), (9)-(11).
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Id. § 560.2(b)(4),
“District courts within the Ninth Circuit that have
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considered this question have concluded that HOLA and its
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implementing regulation do not have the effect of complete
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preemption.”2
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566804, at *4 (N.D. Cal Feb. 14, 2011) (citing Sarzaba v. Aurora
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Loan Servs., No. 10cv1569, 2010 WL 3385062, at *3 (S.D. Cal. Aug.
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26, 2010); Pazos v. Wachovia Mortg., No. CV 10-2732, 2010 WL
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3171082, at *3-4 (C.D. Cal. Aug. 10, 2010); Caampued v. First
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Fed. Bank of Cal., No. C 10-0008, 2010 WL 963080, at *2 n.1 (N.D.
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Cal. Mar. 16, 2010); Bolden v. KB Home, 618 F. Supp. 2d 1196,
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1205 (C.D. Cal. 2008)).
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cases.
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court does not have jurisdiction on the basis of defendants’
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preemption defense.
Bazan v. U.S. Bancorp, No. 10-CV-03265, 2011 WL
This court follows the holdings in those
Because HOLA does not completely preempt state law, the
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Even though the court no longer has original
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jurisdiction, federal courts have “supplemental jurisdiction over
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all other claims that are so related to claims in the action
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within such original jurisdiction that they form part of the same
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case or controversy under Article III of the United States
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Silvas v. E*Trade Mortgage Corporation, 514 F.3d 1001
(9th Cir. 2008), does not dictate a contrary result.
Silvas discussed 12 C.F.R. § 560.2(a) in terms of field
preemption, not complete preemption. See id. at 1005. “The
‘dispositive question’ for complete preemption is not simply
whether HOLA preempts state law by occupying a field of
regulation.” Barela v. Down Sav. & Loan Ass’n, F.A., No. CV 093757, 2009 WL 2578889, at *3 (C.D. Cal. Aug. 18, 2009) (emphasis
added). Rather, complete preemption turns on whether the federal
statute provides the “exclusive cause of action” for the claims
asserted. Beneficial Nat’l Bank v. Anderson, 539 U.S. 1, 9
(2003).
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Constitution.”
28 U.S.C. § 1367(a).
However, a district court
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“may decline to exercise supplemental jurisdiction . . . [if] the
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district court has dismissed all claims over which it has
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original jurisdiction.”
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Varian Assocs., Inc., 114 F.3d 999, 1001 n.3 (9th Cir. 1997) (en
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banc) (explaining that a district court may decide sua sponte to
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decline to exercise supplemental jurisdiction).
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Court has stated that “in the usual case in which all federal-law
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claims are eliminated before trial, the balance of factors to be
28 U.S.C. § 1367(c); see also Acri v.
The Supreme
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considered under the pendent jurisdiction doctrine--judicial
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economy, convenience, fairness, and comity--will point toward
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declining to exercise jurisdiction over the remaining state-law
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claims.”
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(1988).
Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350 n.7
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The court can find no reason that this is not a usual
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case in which all federal claims are eliminated well in advance
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of trial.
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supplemental jurisdiction because all the claims in the Complaint
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are state law claims.
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case and may have a better understanding of the relevant state
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law.
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Comity weighs in favor of declining to exercise
The state court is competent to hear the
As for judicial economy, this action is still in the
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early stages.
The Complaint was filed in state court on May 14,
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2010, and removed to this court on December 20, 2010.
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No. 1.)
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Scheduling) Order and has not ruled on any motions.
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activity in federal court has involved substituting the FDIC as a
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party and approving the parties’ stipulation to dismiss the FDIC.
(Docket
This court has not yet issued a Status (Pretrial
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The primary
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(Docket Nos. 6, 8.)
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favor of exercising supplemental jurisdiction.
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Judicial economy thus does not weigh in
Lastly, convenience and fairness do not weigh in favor
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of exercising supplemental jurisdiction.
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fora are equally convenient for the parties.
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to doubt that the state court will provide an equally fair
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adjudication of the Complaint.
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remand this action to state court.
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The state and federal
There is no reason
Accordingly, the court will
IT IS THEREFORE ORDERED that this action be, and the
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same hereby is, REMANDED to Superior Court of the State of
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California in and for the County of Shasta.
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before this court are hereby VACATED.
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DATED:
May 31, 2011
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All pending dates
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