Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_15-cv-00210/USCOURTS-cand-5_15-cv-00210-0/pdf.json

Nature of Suit Code: 290
Nature of Suit: Other Real Property Actions
Cause of Action: 28:1444 Petition for Removal- Foreclosure

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Case No. 15-cv-00210 NC 

ORDER RE: SUBJECT 

MATTER JURISDICTION

UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

JAMES YTURRALDE, an individual, 

 Plaintiff, 

 v. 

AZTEC FORECLOSURE 

CORPORATION, a corporation; 

SABADELL UNITED BANK, N.A., a 

national association; LYDIAN 

MORTGAGE, a corporation; and DOES 1 

through 50, inclusive, 

 Defendants. 

Case No. 15-cv-00210 NC

ORDER TO SHOW CAUSE RE: 

SUBJECT MATTER 

JURISDICTION 

Re: Dkt. No. 1 

The Court issues this order on its own motion, to address concerns regarding the 

apparent lack of subject matter jurisdiction. Defendant Sabadell United Bank removed the 

case to this Court. See Dkt. No. 1 at 3-6. While the notice of removal asserts that removal 

is proper based on federal question jurisdiction, there appears to be no basis for this Court’s 

jurisdiction. The Court orders Sabadell United Bank to show cause why this case should 

not be remanded to state court for lack of subject matter jurisdiction. 

Federal courts are courts of limited jurisdiction and are presumptively without 

jurisdiction. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). 

Removal of a state court action to federal court is appropriate only if the federal court 

would have had original subject matter jurisdiction over the suit. See 28 U.S.C. § 1441(a). 

A federal district court must remand a removed case to state court “[i]f at any time before 

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Case No. 15-cv-00210 NC 

ORDER RE: SUBJECT 

MATTER JURISDICTION

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the final judgment it appears that the district court lacks subject matter jurisdiction.” Id. 

§ 1447(c); see also Maniar v. FDIC, 979 F.2d 782, 784-85 (9th Cir. 1992) (noting that 

section 1447(c) permits a district court to remand on its own motion for lack of subject 

matter jurisdiction). In deciding whether removal was proper, courts strictly construe the 

removal statute against finding jurisdiction, and the party invoking federal jurisdiction 

bears the burden of establishing that removal was appropriate. Provincial Gov’t of 

Marinduque v. Placer Dome, Inc., 582 F.3d 1083, 1087 (9th Cir. 2009) (citations omitted). 

Where doubt exists regarding the right to remove an action, it should be resolved in favor 

of remand to state court. Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 

(9th Cir. 2003). 

District courts have federal question jurisdiction over “all civil actions arising under 

the Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331. A case “arises 

under” federal law if the complaint establishes “either that federal law creates the cause of 

action or that the plaintiff’s right to relief necessarily depends on resolution of a substantial 

question of federal law.” Proctor v. Vishay Intertechnology Inc., 584 F.3d 1208, 1219 (9th 

Cir. 2009) (citations omitted). Federal jurisdiction exists only when a federal question is 

presented on the face of the plaintiff’s properly pleaded complaint. Provincial Gov’t of 

Marinduque, 582 F.3d at 1091. “[T]he federal question on which jurisdiction is premised 

cannot be supplied via a defense; rather, the federal question must ‘be disclosed upon the 

face of the complaint, unaided by the answer.’” See id. at 1086 (citation omitted). 

Original federal jurisdiction may be available where “some substantial, disputed 

question of federal law is a necessary element of one of the well-pleaded state claims.” 

Franchise Tax Bd. of State of Cal. v. Constr. Laborers Vacation Trust for S. California, 

463 U.S. 1, 13 (1983). “[T]he question is, does a state-law claim necessarily raise a stated 

federal issue, actually disputed and substantial, which a federal forum may entertain 

without disturbing any congressionally approved balance of federal and state judicial 

responsibilities.” Grable & Sons Metal Products, Inc. v. Darue Eng’g & Mfg., 545 U.S. 

308, 314 (2005). “When a claim can be supported by alternative and independent 

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Case No. 15-cv-00210 NC 

ORDER RE: SUBJECT 

MATTER JURISDICTION

 3 

theories—one of which is a state law theory and one of which is a federal law theory—

federal question jurisdiction does not attach because federal law is not a necessary element 

of the claim.” Rains v. Criterion Sys., Inc., 80 F.3d 339, 346 (9th Cir. 1996). See also

Easton v. Crossland Mortgage Corp., 114 F.3d 979, 982 (9th Cir. 1997) (“[T]e mere 

reference of a federal statute in a pleading will not convert a state law claim into a federal 

cause of action if the federal statute is not a necessary element of the state law claim and no 

preemption exists.”). 

In this case, plaintiff alleges that defendants “fraudulently and wrongfully 

encumbered, hypothecated, and caused the unlawful non-judicial foreclosure of Plaintiffs’ 

real property.” Dkt. No. 1 at 14 ¶ 3. The complaint contains the following state law causes 

of action for: (1) wrongful foreclosure; (2) injunctive relief; (3) fraud in the concealment; 

(4) fraud in the inducement; (5) intentional infliction of emotional distress; (6) slander of 

title; (7) quiet title; (8) declaratory relief; and (9) rescission. See generally id. The 

complaint asserts that this action arises under California law. Id. at 14 ¶ 3. 

Sabadell United Bank’s contention that the Court has federal question jurisdiction 

over this action appears to lack merit. The notice of removal asserts that the state law 

causes of action “in whole or in part, arise out of or are predicated on alleged violations by 

Sabadell of the Truth in Lending Act (‘TILA’), 15 U.S.C. § 1601, et seq. and/or the Real 

Estate Settlement Procedures Act (‘RESPA’), 12 U.S.C. § 2601 et seq. and the Federal Fair 

Debt Collections Practices Act (‘FDCPA’), 15 U.S.C. §§ 16923, et seq.” Dkt. No. 1 at 5. 

The notice of removal, however, provides no explanation for why the state law claims 

should be deemed to arise out of or be predicated on alleged violations of federal law. The 

Court orders Sabadell United Bank to show cause in writing by March 11, 2015, why this 

case should not be remanded to state court for lack of subject matter jurisdiction. 

Additionally, Sabadell United Bank’s response to the order to show cause must 

address whether defendant Lydian Mortgage consents to the removal. See 28 U.S.C. 

§ 1446(b)(2)(A) (“When a civil action is removed solely under section 1441(a), all 

defendants who have been properly joined and served must join in or consent to the 

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Case No. 15-cv-00210 NC 

ORDER RE: SUBJECT 

MATTER JURISDICTION

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removal of the action.”). Here, the notice of removal states that defendant Aztec 

Foreclosure Corporation has consented to removal but that no consent has been obtained 

from Lydian Mortgage which Sabadell United Bank “is informed and believes” is no 

longer in operation. Dkt. No. 1 at 4. On February 17, 2015, however, the Federal Deposit 

Insurance Corporation specially appeared as a receiver for Lydian Private Bank, N.A., 

erroneously sued as Lydian Mortgage. Dkt. No. 11. Accordingly, Sabadell United Bank’s 

response must explain whether the Federal Deposit Insurance Corporation consents to the 

removal or explain why such consent is not necessary. 

If Sabadell United Bank fails to respond to the order to show cause by March 11, 

2015, the Court will remand this action to state court. 

IT IS SO ORDERED. 

Date: February 24, 2015 _________________________ Nathanael M. Cousins United States Magistrate Judge 

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