HSBC Bank USA v. Valencia et al, No. 1:2009cv01260 - Document 16 (E.D. Cal. 2010)
Court Description: MEMORANDUM DECISION AND ORDER GRANTING 9 Plaintiff's Motion to Remand and DIRECTING Plaintiff to Submit a Form of Order Consistent With This Decision Within Five (5) Days, signed by Judge Oliver W. Wanger on 2/10/2010. Filing Deadline: 2/17/2010. (Jessen, A)
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1 UNITED STATES DISTRICT COURT 2 EASTERN DISTRICT OF CALIFORNIA 3 4 5 6 7 HSBC BANK USA, NA, AS TRUSTEE ON BEHALF OF ACE SECURITIES CORP. HOME EQUITY LOAN TRUST AND FOR THE REGISTERED HOLDERS OF ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2007-ASAP1 ASSET BACKED PASS-THROUGH CERTIFICATES 09-CV-1260-OWW-JLT MEMORANDUM DECISION AND ORDER RE: PLAINTIFF S MOTION TO REMAND (Doc. 9) Plaintiff, 8 9 v. 10 ERIC VALENCIA, HILDA VALENCIA, Defendants. 11 12 I. 13 14 15 16 17 18 19 20 21 INTRODUCTION Before the court is a motion to remand brought by Plaintiff HSBC Bank USA, NA, As Trustee on Behalf of Ace Securities Corp. Home Equity Loan Trust and for the Registered Holders of Ace Securities Corp. Home Equity Loan Trust, Series 2007-ASAP1 Asset Backed Pass-Through Certificates ( Plaintiff ). Defendants Eric Valencia and Hilda Valencia ( Defendants ), who removed this case, have not filed an opposition. The following background facts are taken from Plaintiff s submissions in connection with this motion and other documents on file in this case. 22 23 24 25 26 27 II. A. BACKGROUND Procedural History On July 21, 2009, Defendants filed a notice of removal (Doc. 1) which purports to remove an unlawful detainer action that Plaintiff filed against Defendants in Kern County Superior Court. 28 1 1 The notice of removal includes a copy of the state court complaint. 2 (Doc. 1, Ex. A.) The complaint is entitled Verified Complaint For 3 Unlawful Detainer, and, on its face, specifically requests less 4 than $10,000 in recovery. (Id.) 5 and asserts only one state law claim for unlawful detainer. 6 federal claims are pled. The complaint is two pages long No 7 In their notice of removal, Defendants assert that removal is 8 proper by virtue of federal question jurisdiction and diversity 9 jurisdiction. With respect to diversity, in their notice of 10 removal, Defendants state that their current residence is that of 11 the State of California and [f]rom the allegations set forth in 12 the State Court Complaint, they [b]elieve that the amount of 13 controversy exceeds $75,000. (Doc. 1 at 2.) 14 B. Plaintiff s Motion To Remand 15 On November 11, 2009, Plaintiff filed its motion to remand 16 (Doc. 9) in which Plaintiff argues that federal subject matter 17 jurisdiction is lacking. 18 question nor diversity jurisdiction exist. Plaintiff contends that neither federal 19 III. 20 STANDARD OF DECISION 21 A defendant may remove an action to federal court based on 22 federal question jurisdiction or diversity jurisdiction. Hunter v. 23 Philip Morris USA, 582 F.3d 1039, 1042 (9th Cir. 2009) (citing 28 24 U.S.C. § 1441). 25 outside [the] limited jurisdiction [of the federal courts] and the 26 burden of establishing the contrary rests upon the party asserting 27 jurisdiction. Id. (alterations in original) (internal quotation 28 marks omitted). It is presumed, however, that a cause lies 2 1 Federal jurisdiction must be rejected if there is any doubt 2 as to the right of removal in the first instance. Gaus v. Miles, 3 Inc., 980 F.2d 564, 566 (9th Cir. 1992). 4 bears the burden of establishing that removal is proper and the 5 court resolves all ambiguity in favor of remand. Hunter, 582 F.3d 6 at 1042. 7 ha[s] a duty to establish subject matter jurisdiction over the 8 removed action sua sponte. United Investors Life Ins. Co. v. 9 Waddell & Reed Inc., 360 F.3d 960, 967 (9th Cir. 2004). The defendant always Even absent a formal motion to remand, a district court A district 10 court must remand a removed case if at any time before final 11 judgment it appears that the district court lacks subject matter 12 jurisdiction. 28 U.S.C. § 1447(c); Bruns v. Nat l Credit Union 13 Admin, 122 F.3d 1251, 1257-58 (9th Cir. 1997). 14 A. Removal Based On Federal Question Jurisdiction 15 To determine whether removal is proper based on federal 16 question jurisdiction, the well-pleaded complaint rule provides 17 that federal jurisdiction exists only when a federal question is 18 presented 19 complaint. Hunter, 582 F.3d at 1042 (internal quotation marks 20 omitted). 21 jurisdiction attaches only when the plaintiff's statement of his 22 own cause of action shows that it is based upon [federal law]. 23 Vaden v. Discover Bank, __ U.S. __, 129 S. Ct. 1262, 1272 (2009) 24 (alteration in original) (internal quotation marks omitted). 25 specifically, 26 well-pleaded complaint establishes either that [1] federal law 27 creates the cause of action or that [2] the plaintiff's right to 28 relief necessarily depends on resolution of a substantial question on the face of the plaintiff's properly pleaded Under the well-pleaded complaint rule, federal question federal question 3 jurisdiction exists More if a 1 of federal law. Armstrong v. Northern Mariana Islands, 576 F.3d 2 950, 955 (9th Cir. 2009) (internal quotation marks omitted). Consistent 3 with the well-pleaded complaint rule, a 4 counterclaim, even if completely preempted by federal law, cannot 5 provide the basis for federal question jurisdiction and support 6 removal. Holmes Group, Inc. v. Vornado Air Circulation Sys., Inc., 7 535 U.S. 826, 830-32 & n.2 (2002); Vaden v. Discover Bank, __ 8 U.S.__, 129 S. Ct. 1262, 1273, 1276 (2009). 9 jurisdiction be predicated on an actual or anticipated defense. 10 Vaden, 129 S. Ct. at 1272. In removed cases, federal jurisdiction 11 must be analyzed on the basis of the pleadings filed at the time of 12 removal 13 Surgical Corp. v. Nat l Ass n of Sec. Dealers, Inc., 159 F.3d 1209, 14 1213 (9th Cir. 1998); see also Williams v. Costco Wholesale Corp., 15 471 F.3d 975, 976 (9th Cir. 2006) ( [P]ost-removal amendments to 16 the pleadings cannot affect whether a case is removable, because 17 the propriety of removal is determined solely on the basis of the 18 pleadings filed in state court. ). 19 B. without reference to subsequent Nor can federal amendments. Sparta Removal Based On Diversity Jurisdiction 20 As to diversity jurisdiction, federal district courts have 21 subject matter jurisdiction over suits for more than $75,000 where 22 the citizenship of each plaintiff is different from that of each 23 defendant. 24 Section 1441(b) limits removal in diversity cases to those where 25 none of the parties in interest properly joined and served as 26 defendants is a citizen of the State in which such action is 27 brought. In other words, § 1441(b) confines removal on the basis 28 of diversity jurisdiction to instances where no defendant is a 28 U.S.C. § 1332(a); see also Hunter, 582 F.3d at 1043. 4 1 citizen of the forum state. Lively v. Wild Oats Markets, Inc., 456 2 F.3d 933, 3 citizenship and the amount in controversy can be determined from 4 the complaint or from other sources, including statements made in 5 the notice of removal. See Kanter v. Warner-Lambert Co., 265 F.3d 6 853, 857 (9th Cir. 2001) (examining complaint and notice of removal 7 for citizenship determination); Valdez v. Allstate Ins. Co., 372 8 F.3d 9 amount-in-controversy 939 (9th Cir. 2006). 1115, 1117 (9th The status of the parties Cir. 2004); inquiry in ( [W]e the reiterate removal that context is the not 10 confined to the face of the complaint. ); Cohn v. Petsmart, Inc., 11 281 F.3d 837, 839-40 & n.2 (9th Cir. 2002) (considering settlement 12 demand letter for purposes of determining amount in controversy). 13 For removal purposes, diversity jurisdiction is analyzed and must 14 exist as of the time the complaint is filed and removal is 15 effected. Strotek Corp. v. Air Transport Ass n of Am., 300 F.3d 16 1129, 1131 (9th Cir. 2002). 17 IV. DISCUSSION AND ANALYSIS 18 19 After reviewing Plaintiff s complaint and Defendants notice 20 of removal, neither federal question jurisdiction nor diversity 21 jurisdiction exist. 22 case must be remanded. 23 A. 24 Because federal jurisdiction is lacking, this Federal Question On its face, the complaint does not show it is based on 25 federal law. The removed complaint contains only one state law 26 cause of action for unlawful detainer. 27 in the complaint, and there is no indication that Plaintiff's right 28 to relief necessarily depends on the resolution of a substantial 5 No federal claims are pled 1 question of federal law (or any question of federal law for that 2 matter). 3 In their notice of removal, Defendants support their assertion 4 of federal question jurisdiction by citing to a document Defendants 5 drafted and attached to their notice of removal. (Doc. 1 at 2.) 6 This 7 Opportunity to Cure, And Counterclaim. 8 reads UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF 9 CALIFORNIA document and is entitled the words Affidavit In Of Negative Averment, The top of the document Admiralty appear next to the 10 caption. The document purports to be some sort of federal pleading 11 containing a counterclaim. 12 nothing to do with admiralty; rather, it concerns Defendants 13 mortgage. 14 support removal on the basis of federal question jurisdiction. 15 Upon examination, the document has For several reasons, this document does not and cannot First, this document is not part of Plaintiff s complaint; 16 rather, 17 Defendants 18 removal. 19 confer, or be considered for purposes of determining, federal 20 question jurisdiction. See Vaden, 129 S. Ct. at 1272 (federal 21 question jurisdiction exists "only when the plaintiff's statement 22 of his own cause of action shows that it is based upon [federal 23 law]") (emphasis added) (alteration in original); California ex 24 rel. Lockyer v. Dynegy, Inc., 375 F.3d 831, 838 (9th Cir. 2004) 25 (the federal question must be disclosed upon the face of the 26 complaint, unaided by the answer or by the petition for removal ) 27 (emphasis added) (internal quotation marks omitted). 28 it is and some type submitted of in responsive connection pleading with their drafted by notice of Under the well-pleaded complaint, this document cannot Second, considering this document would not only violate the 6 1 well-pleaded complaint rule, but also the rule that jurisdiction 2 must be analyzed on the basis of the pleadings filed at the time of 3 removal." Sparta Surgical Corp, 159 F.3d at 1213. 4 was not part of the pleadings at the time of removal; rather, 5 Defendants filed this document in federal court with their notice 6 of removal. 7 solely on the basis of the pleadings filed in state court," 8 Williams, 471 F.3d at 976, this document cannot confer, or be 9 considered 10 This document [B]ecause the propriety of removal is determined for purposes of determining, federal question jurisdiction. Federal question jurisdiction is lacking and removal cannot be 11 12 justified on this basis. 13 B. 14 Diversity As for diversity jurisdiction, there are at least four reasons 15 why it cannot justify removal. First, there are no allegations in 16 the complaint or in the notice of removal about Defendants state 17 of citizenship. 18 As for the complaint, it merely alleges that each Defendant is 19 a natural person who, at a given point in time, occupied 20 certain premises in California. (Doc. 1, Ex. A. 1-2.) 21 allegation of mere physical occupancy is not equivalent to, and 22 falls short of, an allegation of citizenship. See Kanter, 265 F.3d 23 at 857 (recognizing that a person s physical location is not 24 determinative of their state of citizenship); see also Lew v. Moss, 25 797 F.2d 747, 750 (9th Cir. 1986) (same). The complaint s lack of 26 allegations understandable. 27 citizenship of the parties or the corporation's principal place of 28 business or its state of incorporation normally will not be set regarding citizenship 7 is This The 1 forth in a complaint filed in a state court so that that pleading 2 therefore will not reveal the existence of diversity of citizenship 3 jurisdiction. Harris v. Bankers Life & Cas. Co., 425 F.3d 689, 693 4 (9th Cir. 2005) (internal quotation marks omitted). 5 Like Plaintiff s complaint, Defendants notice of removal is 6 also deficient with respect to citizenship allegations. 7 notice of removal, Defendants state only that their current 8 residence is that of the State of California. (Doc. 1 at 2.) 9 explained in Kanter, however, allegations of residency are not 10 equivalent to allegations of citizenship which support diversity 11 jurisdiction: 12 13 14 15 16 17 18 19 20 21 In the As Plaintiffs' complaint and Pfizer's notice of removal both state that Plaintiffs were residents of California. But the diversity jurisdiction statute, 28 U.S.C. § 1332, speaks of citizenship, not of residency. To be a citizen of a state, a natural person must first be a citizen of the United States. The natural person's state citizenship is then determined by her state of domicile, not her state of residence. A person's domicile is her permanent home, where she resides with the intention to remain or to which she intends to return. A person residing in a given state is not necessarily domiciled there, and thus is not necessarily a citizen of that state. In this case, neither Plaintiffs' complaint nor Pfizer's notice of removal made any allegation regarding Plaintiffs' state citizenship. Since the party asserting diversity jurisdiction bears the burden of proof, Pfizer's failure to specify Plaintiffs' state citizenship was fatal to Defendants' assertion of diversity jurisdiction. 22 265 F.3d at 857-58 (internal citations omitted); see also Harris, 23 425 F.3d at 695 ( The face of Harris' initial pleading did not 24 affirmatively 25 diversity jurisdiction because the initial pleading only stated 26 Brown's 1972 residency, not his citizenship . . . . ). 27 Kanter, neither the notice of removal nor the complaint include any reveal information 28 8 to trigger removal based on Here, as in 1 allegations regarding Defendants state of citizenship. 2 fatal to their assertion of diversity jurisdiction. 3 Second, the notice of removal alleges that This is Defendants 4 current residence is in California. (Doc. 1 at 2.) 5 removal on diversity grounds, diversity of citizenship must exist 6 as of the filing of the complaint. Harris, 425 F.3d at 695-96. 7 The current residence of Defendants does not demonstrate that they 8 were residents, let alone citizens, of California as of the filing 9 of the complaint.1 10 To justify Third, there is nothing in the complaint or in the notice of 11 removal about Plaintiff s state of citizenship. 12 merely states that Plaintiff is a national association qualified 13 to do business in California and nothing more. (Doc. 1., Ex. A. at 14 1.) Defendants notice of removal provides no further information. 15 The notice of removal does not include any allegations regarding 16 Plaintiff s 17 allegations about Plaintiff s state of citizenship.2 The complaint status as an association or any The complaint corresponding 18 19 20 21 22 23 24 1 Even if Defendants were citizens of California, this would have barred their ability to remove on the basis of diversity because "§ 1441(b) confines removal on the basis of diversity jurisdiction to instances where no defendant is a citizen of the forum state." Lively, 456 F.3d at 939. However, the Ninth Circuit has concluded that this limitation, also called the forum defendant rule, is procedural or non-jurisdictional in nature and, accordingly, is waived unless timely raised. Id. at 939, 942. Plaintiff does not mention the forum defendant rule and appears to have waived the issue. 25 2 26 27 28 Plaintiff s state of citizenship depends upon what type of entity it is. See Johnson v. Columbia Props. Anchorage, LP, 437 F.3d 894, 899 (9th Cir. 2006) (explaining that, for purposes of diversity jurisdiction, a trust has the citizenship of its trustees, an unincorporated association has the citizenship of its 9 1 and the notice of removal fail to indicate Plaintiff s state of 2 citizenship, and this too is fatal to Defendants assertion of 3 diversity jurisdiction. Fourth, 4 apart from citizenship issues, the amount in 5 controversy requirement is not satisfied. In order to remove the 6 unlawful detainer action, Defendants must show that the matter in 7 controversy exceeds the sum or value of $75,000, exclusive of 8 interest and costs. Valdez, 372 F.3d at 1116 (internal quotation 9 marks omitted). The state court complaint, on its face, expressly 10 requests less than $10,000. 3 11 monetary threshold necessary to invoke diversity jurisdiction. This amount is far below the Plaintiff, citing Guglielmino v. McKee Foods Corp., 506 F.3d 12 13 696, 699 (9th Cir. 2007), argues that because it expressly 14 requested less than the jurisdictional amount in its state court 15 complaint, to justify removal Defendants must prove to a legal 16 certainty that [P]laintiff s claim exceeds $75,000. 17 Circuit, depending upon the allegations in the complaint, there are 18 different burdens of proof placed upon removing parties with 19 respect to establishing the requisite amount in controversy. See 20 Guglielmino, 506 F.3d at 699. In the Ninth 21 In Guglielmino the Ninth Circuit discussed one of its recent 22 removal cases, Lowdermilk v. U.S. Bank National Ass n, 479 F.3d 994 23 24 25 members, and a corporation is deemed a citizen of the state in which it is incorporated and of the state where it has its principal place of business). 26 27 28 3 In addition, the Civil Case Cover Sheet accompanying the complaint indicates that it is a "Limited" civil case in which the "[a]mount demanded is $26,000 or less." 10 1 (9th Cir. 2007), which dealt with a removal in a case involving the 2 Class 3 discussed its holding in Lowdermilk, stating we held in the CAFA 4 context that when a state-court complaint affirmatively alleges 5 that the amount in controversy is less than the jurisdictional 6 threshold, 7 certainty that CAFA's jurisdictional amount is met. Guglielmino, 8 506 F.3d at 699 (quoting Lowdermilk, 479 F.3d at 1000) (emphasis 9 added). Action Fairness the party Act ( CAFA ). seeking The removal must Guglielmino prove court with legal In a footnote, the Guglielmino court discussed and left 10 open the question whether the Lowdermilk legal certainty standard 11 applies only in the CAFA context. 506 F.3d at 700 n.3. 12 Guglielmino court then determined that the state court complaint at 13 issue failed to allege a sufficiently specific total amount in 14 controversy, 506 F.3d at 701, and therefore the legal certainty 15 standard, even if it applied outside the CAFA context, was not 16 implicated. The Guglielmino court then analyzed the case under the 17 preponderance of the evidence standard. 18 when it is not evident from the face of the state court complaint 19 whether the requisite amount in controversy is pled. Guglielmino, 20 506 F.3d at 699. 21 evident 22 controversy, the removing party must prove, by a preponderance of 23 the 24 jurisdictional threshold. Matheson v. Progressive Speciality Ins. 25 Co., 319 F.3d 1089, 1090 (9th Cir. 2003); see also Valdez, 372 F.3d 26 at 1117. 27 defendant bears the burden of actually proving the facts to support 28 jurisdiction, including the jurisdictional amount. from evidence, The This standard applies More specifically, [w]here it is not facially the complaint that the that amount more in than $75,000 controversy is meets in the Under this preponderance of the evidence standard, the 11 Sanchez v. 1 Monumental Life Ins. Co., 102 F.3d 398, 403 (9th Cir. 1996) 2 (internal quotation marks omitted). 3 evidence establishing that it is more likely than not that the 4 amount in controversy exceeds $75,000. Valdez, 372 F.3d at 1117 5 (internal quotation marks omitted). The defendant must provide Here, it need not be determined whether the Lowdermilk legal 6 7 certainty standard applies. Even under the more lenient 8 preponderance of the evidence standard, Defendants have not met 9 their burden of proof. The notice of removal states that Defendants [b]elieve the 10 11 amount of controversy exceeds $75,000. (Doc. 1 at 2.) 12 enough. 13 such as this, are insufficient. Matheson, 319 F.3d at 1090-91. 14 In addition, information and belief hardly constitutes proof by a 15 preponderance of the evidence. Valdez, 372 F.3d at 1117 (emphasis 16 added) 17 provided no other evidence and have not proved, by a preponderance 18 of the evidence, that it is more likely than not that the amount in 19 controversy exceeds $75,000. Conclusory allegations as to the amount in controversy, (internal quotation marks omitted). Defendants have For all these reasons, diversity jurisdiction is lacking and 20 21 This is not removal cannot be justified on this basis. 22 V. 23 CONCLUSION Defendants have not shown that removal was proper. 24 Neither 25 federal question nor diversity jurisdiction supports removal in 26 this 27 Plaintiff s motion to remand is GRANTED and this case is ORDERED 28 remanded to the Kern County Superior Court. case. Because subject matter 12 jurisdiction is lacking, Within five (5) days following electronic service of this 1 2 Memorandum Decision Plaintiff 3 shall submit a form consistent with this decision. 4 5 6 IT IS SO ORDERED. 7 Dated: 9i274f February 10, 2010 /s/ Oliver W. Wanger UNITED STATES DISTRICT JUDGE 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 13 of order
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