Schendel et al v. Aurora Loan Services, LLC et al, No. 2:2011cv02779 - Document 34 (E.D. Cal. 2012)
Court Description: ORDER denying 9 Motion to Remand signed by Judge John A. Mendez on 2/13/12. (Kaminski, H)
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Schendel et al v. Aurora Loan Services, LLC et al Doc. 34 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 12 DENNIS SCHENDEL, an individual, and CATHERINE SCHENDEL, an individual; 13 Plaintiffs, 14 15 16 v. ACE MORTGAGE FUNDING, LLC., et al.; Defendants. 17 ) ) ) ) ) ) ) ) ) ) ) ) ) Case No. 2:11-CV-02779 JAM-JFM ORDER DENYING PLAINTIFFS MOTION TO REMAND TO STATE COURT PURSUANT TO 28 U.S.C. §§ 1441 and 1446 This matter is before the Court on Plaintiffs Dennis Schendel 18 19 and Catherine Schendel s (“Plaintiffs”) Motion to Remand to State 20 Court pursuant to 28 U.S.C. §§ 1441 and 1446 (Doc. #9).1 21 Defendants Aurora Loan Services, LLC and Mortgage Electronic 22 Registration Systems, Inc. (“Defendants”) oppose the motion (Doc. 23 #25). 24 I. 25 This action arises out of a dispute concerning the real 26 27 28 FACTUAL ALLEGATIONS AND PROCEDURAL BACKGROUND 1 This motion was determined to be suitable for decision without oral argument. E.D. Cal. L.R. 230(g). The hearing was originally scheduled on January 25, 2012. 1 Dockets.Justia.com 1 property located at 8720 Pathfinder Court, Orangevale, California 2 (the “Property”). 3 Property and later defaulted. 4 the mortgage, instituted a non-judicial foreclosure on the Property 5 on September 23, 2010. 6 Trustee s Sale on March 25, 2011. 7 Plaintiffs continue to occupy the Property, and an eviction action 8 is proceeding before the Superior Court of California, Sacramento 9 County. 10 In short, Plaintiffs obtained a mortgage on the Defendants, claiming an interest in The Property was subsequently sold at a The parties indicate that The procedural background of this action involves three 11 different lawsuits. The first action concerning the Property was 12 filed before this Court by Plaintiffs on May 25, 2011. 13 complaint alleged several federal causes of action, which gave this 14 Court jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1367. 15 unlawful detainer action was then filed against Plaintiffs in state 16 court. 17 state court, which was largely duplicative of their first federal 18 complaint except that it did not explicitly include any federal 19 causes of action. That The On October 5, 2011, Plaintiffs filed a second action in 20 On October 6, 2011, Plaintiffs moved to consolidate the 21 unlawful detainer action with their new state court lawsuit. 22 Before the motion to consolidate was decided, Defendants removed 23 Plaintiff s second action on the basis of federal question 24 jurisdiction to the Eastern District of California and it was 25 assigned to District Judge Mueller. 26 Court denied the motion to consolidate because Plaintiffs second 27 action had been removed to federal court. 28 Plaintiffs voluntarily dismissed their first action. 2 Subsequently, the Superior On November 15, 2011, The next day, 1 Plaintiffs filed the present motion to remand the second action to 2 state court. 3 first and reassigned to this Court on December 23, 2011. 4 Plaintiffs first action filed in federal court is dismissed, 5 Plaintiffs second action that was filed in state court is 6 presently before the Court after its removal, and the unlawful 7 detainer action filed against Plaintiffs is still before the state 8 court. 9 10 Their second action was then deemed related to the Thus, As stated above, Defendants claim that this Court has jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1367. 11 12 II. OPINION 13 A. Legal Standard 14 As this is a motion to remand pursuant to 28 U.S.C. 15 § 1447(c),2 the issue to be decided is the Court s subject matter 16 jurisdiction or lack thereof. 17 time before final judgment it appears that the district court lacks 18 subject matter jurisdiction, the case shall be remanded.”). 19 court must remand an action sua sponte if it determines that it 20 lacks subject matter jurisdiction. 21 Owners Ass'n v. Homestead Ins. Co., 346 F.3d 1190, 1192 (9th 22 Cir.2003) (“[W]e have held that the district court must remand if 23 it lacks jurisdiction,” citing Sparta Surgical Corp. v. Nat'l Ass'n 24 Sec. Dealers, Inc., 159 F.3d 1209, 1211 (9th Cir.1998)). 25 /// See 28 U.S.C. § 1447(c) (“If at any The See Kelton Arms Condominium The 26 2 27 28 Although the title to Plaintiffs motion does not include a reference to 28 U.S.C. § 1447, the statute that governs remand proceedings, that statute is properly cited and addressed in the body of their motion. 3 1 2 3 4 5 6 7 removal statute explains when removal is proper: Except as otherwise expressly provided by Act of Congress, any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending. 28 U.S.C. § 1441(a). The Ninth Circuit “strictly construe[s] the removal statute 8 against removal jurisdiction.” Gaus v. Miles, Inc., 980 F.2d 564, 9 566 (9th Cir.1992) (citing Boggs v. Lewis, 863 F.2d 662, 663 (9th 10 Cir.1988), and Takeda v. Northwestern National Life Insurance Co., 11 765 F.2d 815, 818 (9th Cir.1985)). 12 must be rejected if there is any doubt as to the right of removal 13 in the first instance.” 14 Co., 592 F.2d 1062, 1064 (9th Cir.1979)). 15 presumption against removal jurisdiction means that the defendant 16 always has the burden of establishing that removal is proper.” 17 (citing Nishimoto v. Federman-Bachrach & Associates, 903 F.2d 709, 18 712 n. 3 (9th Cir.1990), and Emrich v. Touche Ross & Co., 846 F.2d 19 1190, 1195 (9th Cir.1988)). Thus, “[f]ederal jurisdiction Id. (citing Libhart v. Santa Monica Dairy “The „strong Id. 20 B. Discussion 21 Plaintiffs seek remand on the grounds that their first action 22 was voluntarily dismissed, leaving only the second action which 23 they argue contains no federal claims. 24 there are no federal claims, Defendants only stated basis for 25 removal, 28 U.S.C. § 1331 federal question jurisdiction, is not 26 valid. 27 determined at the time the action is removed, meaning that the 28 first action s related federal claims should be considered. Plaintiffs argue that if Defendants respond by arguing that jurisdiction is 4 1 Federal question jurisdiction is presumed to be absent unless 2 a defendant, as the party seeking removal, shows that the plaintiff 3 has alleged (1) a federal claim, American Well Works Co. v. Layne & 4 Bowler Co., 241 U.S. 257, 260 (1916), (2) a state cause of action 5 that requires resolution of a substantial issue of federal law, 6 Grable & Sons Metal Products., Inc. v. Darue Engineering & 7 Manufacturing, 545 U.S. 308, 313 (2005), or (3) a state cause of 8 action that Congress has transformed into an inherently federal 9 claim by completely preempting the field, Avco Corp. v. Aero Lodge 10 No. 735, 390 U.S. 557, 560 (1968); Metropolitan Life Insurance Co. 11 v. Taylor, 481 U.S. 58, 65 (1987). 12 Defendants argue that the Court has subject matter 13 jurisdiction because Plaintiffs first complaint alleged federal 14 claims, and their second complaint contains a claim under 15 California Financial Code § 50505 (“Section 50505”) that 16 necessarily depends on substantial questions of federal law. 17 Section 50505 states: 18 Any person who violates any provision of any of the following federal acts or regulations violates this division: (a) The federal Real Estate Settlement Procedures Act [“RESPA”], as amended (12 U.S.C. Sec. 2601 et seq.). (b) The federal Truth in Lending Act [“TILA”], as amended (15 U.S.C. Sec. 1601 et seq.). (c) The federal Home Ownership Equity Protection Act [“HOEPA”] (15 U.S.C. Sec. 1639). (d) Any regulation promulgated under any of the federal acts in subdivision (a), (b), or (c). 19 20 21 22 23 24 25 26 27 28 Cal. Fin. Code § 50505. Here, not only did the complaint in the first federal action allege federal claims, but Plaintiff s § 50505 claim necessarily depends on resolution of substantial questions of federal law. 5 The 1 claim specifically requires the Court to make a determination of 2 whether the defendants violated TILA, HOPEA, and RESPA, which are 3 federal statutes. 4 under those federal statutes. 5 has subject matter pursuant to 28 U.S.C. § 1331. 6 545 U.S. at 313. 7 assert jurisdiction over the remaining state law claims pursuant to 8 28 U.S.C. § 1367. Further, Plaintiff seeks remedies available Accordingly, the Court finds that it Grable & Sons, The Court also finds that it is appropriate to 9 10 11 III. ORDER After careful consideration of all of the papers submitted 12 with regard to this motion by all parties, the Court finds that it 13 has subject matter jurisdiction over this action pursuant to 28 14 U.S.C. § 1331, making remand improper. 15 jurisdiction pursuant to 28 U.S.C. § 1367 over the additional state 16 law claims. 17 its entirety. 18 19 The Court also asserts Accordingly, Plaintiffs Motion to Remand is DENIED in IT IS SO ORDERED. ____________________________ JOHN A. MENDEZ, UNITED STATES DISTRICT JUDGE Dated: February 13, 2012 20 21 22 23 24 25 26 27 28 6
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