Community Fund LLC v. Clayton

Northern District of California, cand-4:2015-cv-01814

ORDER GRANTING APPLICATION TO PROCEED IN FORMA PAUPERIS; REFERRAL FOR REASSIGNMENT; REPORT AND RECOMMENDATION TO REMAND re {{1}} Notice of Removal filed by Gloria Y. Clayton. Objections due by 5/12/2015. Signed by Magistrate Judge Jacqueline Scott Corley on 4/27/2015.

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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 COMMUNITY FUND LLC, 7 Case No. 15-cv-01814-JSC Plaintiff, 8 v. ORDER GRANTING APPLICATION 9 TO PROCEED IN FORMA PAUPERIS; GLORIA Y. CLAYTON, REFERRAL FOR REASSIGNMENT; 10 REPORT AND RECOMMENDATION Defendant. TO REMAND 11 Re: Dkt. No. 1, 2 12 Northern District of California United States District Court 13 Defendant Gloria Y. Clayton ("Defendant"), proceeding pro se and in forma pauperis, 14 removed this unlawful detainer action to federal court. Young invokes federal subject matter 15 jurisdiction and diversity jurisdiction under 28 U.S.C. § 1331 and asserts that removal is proper 16 under 28 U.S.C. §§ 1441 and 1446. As neither party has consented to the jurisdiction of a 17 magistrate judge under 28 U.S.C. § 636(c), the Court does not have authority to make a dispositive 18 ruling in this case. Accordingly, the Court orders that this case be REASSIGNED to a District 19 Judge. 20 The Court lacks subject matter jurisdiction over this action because the single claim in the 21 complaint arises exclusively under state law and the amount in controversy is less than $10,000. 22 Accordingly, the Court RECOMMENDS that the District Court REMAND this action to state 23 court. 24 BACKGROUND 25 Plaintiff Community Fund, LLC ("Plaintiff") initiated this residential unlawful detainer 26 action in Contra Costa County Superior Court on February 26, 2015. (Dkt. No. 1 at 5.) The 27 complaint alleges that Plaintiff is the owner of property located at 35 Las Moradas Circle, San 28 1 Pablo, CA 94806. (Id. at 6.) Plaintiff alleges that on or about August 14, 2013, Defendant agreed 2 to rent the premises for a one-year term at a rate of $1,400.00 per month. (Id.) Defendant signed a 3 written lease agreement with Plaintiff's agent. (Id.) The state court complaint alleges that a copy 4 of this written agreement was included as an exhibit, but no agreement is included on the docket 5 for this case. (See generally id.) Plaintiff further alleges that Defendant has failed to surrender 6 possession of the property despite being personally served with a 3-day notice to pay rent or quit 7 on February 20, 2015. (Id.) Plaintiff seeks possession of the property, forfeiture of the lease 8 agreement, holdover damages at a rate of $46.67 per day, and all costs and fees incurred in this 9 action deemed just and proper by the court, including reasonable attorneys' fees. (Id. at 7.) 10 Defendant filed a demurrer to the complaint on March 24, 2015 on the grounds that the 11 notice to pay rent or quit failed to include the information required by law and therefore no action 12 for unlawful detainer lies. (See id. at 8-9.) According to Defendant, the Superior Court did not Northern District of California United States District Court 13 sustain her demurrer. (Id. at 2.) Defendant removed the case to federal court on April 22, 2015. 14 (Dkt. No. 1.) 15 DISCUSSION 16 A. IFP Application 17 Defendant moves to proceed in forma pauperis ("IFP") under 28 U.S.C. § 1915. (Dkt. No. 18 2.) The Court finds that Defendant has shown good cause that she is unable to pay the filing fee 19 associated with removing a complaint. Accordingly, the Court GRANTS Defendant's request to 20 proceed IFP. 21 B. Subject Matter Jurisdiction 22 Having granted Defendant's request to proceed IFP, under 28 U.S.C. § 1915(e)(2) the 23 Court is required to dismiss an in forma pauperis complaint that lacks subject matter jurisdiction. 24 Pratt v. Sumner, 807 F.2d 817, 819 (9th Cir. 1987). Even aside from Section 1915 review, the 25 Court has an independent duty to ascertain its jurisdiction and may remand a case sua sponte for 26 lack of subject matter jurisdiction. See 28 U.S.C. § 1447(c); Gaus v. Miles, Inc., 980 F.2d 564, 27 566 (9th Cir. 1992). The party seeking removal bears the burden of proving that subject matter 28 jurisdiction is proper. Abrego v. Dow Chem. Co., 443 F.3d 676, 683-85 (9th Cir. 2006). For the 2 1 reasons explained below, Defendant has failed to establish federal subject matter jurisdiction in 2 this case. 3 Defendant alleges that removal is proper under the federal question statute, 28 U.S.C. 4 § 1331, and 28 U.S.C. §§ 1441 and 1446. (Dkt. No. 1 at 2.) Defendant's removal of Plaintiff's 5 unlawful detainer action to federal court lacks merit because the court does not have subject matter 6 or diversity jurisdiction over the claims. It is well settled that federal courts do not have federal 7 question jurisdiction over unlawful detainer actions, where federal law does not create the cause of 8 action and the plaintiff's right to relief as to its claims does not depend on a resolution of a 9 question of federal law. JP Morgan Chase Bank, N.A. v. Chavez, No. C 11-5129 PSG, 2011 WL 10 6760349, at *1 (N.D. Cal. Dec. 5, 2011) (citations omitted), report & recommendation adopted by 11 2011 WL 6749057 (N.D. Cal. Dec. 23, 2011); see also, e.g., Eden Housing Mgmt. v. Muhammad, 12 No. C 07-4325 SBA, 2007 WL 4219397, at *2-3 (N.D. Cal. Nov. 28, 2007) (no federal question Northern District of California United States District Court 13 jurisdiction on the face of an unlawful detainer complaint); Citibank N.A. v. Ortiz, No. 08-cv-1301 14 LAB, 2008 WL 4771932, at *1 (S.D. Cal. Oct. 28, 2008) (same). 15 Although Defendant alleges in her removal papers that her demurrer to the unlawful 16 detainer at issue relates to violations of her rights and Plaintiff's duties arising under federal law 17 (see Dkt. No. 1 at 2-3), "removability cannot be created by defendant pleading a counter-claim 18 presenting a federal question." Eden Housing Mgmt., 2007 WL 4219397, at *2 (quoting Takeda v. 19 Northwestern Nat'l Life Ins. Co., 765 F.2s 815, 822 (9th Cir. 1985)); Wayne v. DHL Worldwide 20 Express, 294 F.3d 1179, 1183 (9th Cir. 2002) ("Neither allegations or affirmative defenses in an 21 Answer nor in the petition for removal can create federal jurisdiction."); see, e.g., Chavez, 2011 22 WL 6760349, at *1 (remanding unlawful detainer action where defendant sought to establish 23 federal question jurisdiction through federal statutory counterclaim); Fed. Home Loan Mortg. 24 Corp. v. Pinzon, No. 12-cv-03450 NC, 2012 WL 3527232, at *2 (N.D. Cal. July 12, 2012), report 25 & recommendation adopted by 2012 WL 3536761 (N.D. Cal. Aug. 15, 2012). In other words, 26 because the complaint on its face presents no federal question, and a defendant cannot bootstrap 27 federal jurisdiction by pleading a defense or counterclaim, the instant unlawful detainer action 28 must be remanded for determination by the state court. 3 1 The Court further finds that there is no diversity jurisdiction based on Plaintiff's unlawful 2 detainer action, which was filed in the superior court as a "limited" civil case amounting to less 3 than $10,000 in controversy. (See Dkt. No. 1 at 5.) For the reasons already discussed, any 4 damages related to Defendant's purported federal rights counterclaim is not part of the amount-in- 5 controversy calculation. See Chavez, 2011 WL 6760349, at *1. In addition, only non-resident 6 defendants can effect removal based on diversity jurisdiction. See 28 U.S.C. § 1441(b); Spencer v. 7 U.S. Dist. Ct. for Northern Dist. (Altec Indus., Inc.), 393 F.3d 86, 870 (9th Cir. 2004). Once any 8 "local defendant (a citizen of the forum state) has been served, the action cannot be removed by 9 that defendant, or by any other defendant." Republic W. Ins. Co. v. Int'l Ins. Co., 765 F. Supp. 10 628, 629 (N.D. Cal. 1991). Here, the complaint alleges that Defendant resides at the subject 11 property, located in San Pablo, California, and is therefore a citizen of California. (Dkt. No. 1 at 12 6.) As Clayton is a "local" defendant, removal is improper on this basis as well. Northern District of California United States District Court 13 CONCLUSION 14 The Court GRANTS Clayton's IFP application. However, as the Court lacks subject 15 matter jurisdiction over this action, the Court recommends that this action be REMANDED to the 16 Contra Costa County Superior Court. Any party may object to this recommendation within 17 fourteen days of the filing date of this order. See Fed. R. Civ. P. 72(b). 18 IT IS SO ORDERED. 19 Dated: April 27, 2015 20 21 ________________________ JACQUELINE SCOTT CORLEY 22 United States Magistrate Judge 23 24 25 26 27 28 4