Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_16-cv-00146/USCOURTS-casd-3_16-cv-00146-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1446bc Notice of Removal - Breach of Contract

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

ALEXANDRA HERNANDEZ,

Plaintiff,

CASE NO. 16cv146-LAB (MDD)

ORDER OF REMAND

vs.

POINT LOMA CREDIT UNION,

Defendant.

This action was removed from the Superior Court of California for the County of San

Diego. Although the complaint raised claims under state law only the notice of removal

identified the presence of a federal question as the basis for the Court’s jurisdiction.

The Court issued an order (Docket no. 6, “OSC”) requiring Defendant Point Loma

Credit Union (“PLCU”) to show cause why this action should not be remanded for lack of

jurisdiction, and permitting Plaintiff Alexandra Hernandez to file briefing if she wished. The

OSC’s analysis is incorporated by reference into this order, and is not repeated here except

as necessary. Both parties have now filed their briefs.

All causes of action in the complaint arise under state law, specifically, California’s

Unfair Competition Law (UCL), Cal. Bus. & Prof. Code §§ 17200, et seq., and various state

contract and tort theories. The notice of removal, however, argued that the UCL claim was

premised solely on a violation of federal law, and therefore a federal question was squarely

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presented. The Court’s order, however, noted that the UCL claim was based both on

alleged violations of federal law and on “unfairness” as defined by state law. A business

practice can be “unfair,” and thus actionable under the UCL, even if it does not violate any

law. See Lippitt v. Raymond James Fin. Servs., Inc., 340 F.3d 1033, 1043 (9 Cir. 2003) th

(explaining that practices are actionable under the UCL if they are unfair or deceptive, even

if they are not also unlawful); Saunders v. Superior Court, 27 Cal. App. 4th 832, 839 (1994)

(“‘Unfair’ simply means any practice whose harm to the victim outweighs its benefits.”)

Because Hernandez’s UCL claim relies on alternative theories, one federal and one

state, it did not appear that a federal question was present. See Rains v. Criterion Systems,

Inc., 80 F.3d 339, 346 (9 Cir. 1996).

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Hernandez, in her response, agreed with the OSC that jurisdiction is lacking. She also

argued the removal was untimely and requested remand for that reason as well. 

PLCU’s response to the OSC does not show that the Court can exercise jurisdiction

over this matter. According to PLCU, Hernandez admitted in her motion for class certification

that her UCL was based solely on violations of federal law. But, with exceptions inapplicable

here, the well-pleaded complaint rule requires the Court to look only at the face of the

complaint. See Caterpillar v. Williams, 482 U.S. 386, 392 (1987). Hernandez’s

characterization of her claims in a motion does not create federal question jurisdiction. But

even if it did, the Court has reviewed her motion and it does not characterize her claim the

way PLCU believes it does. All it says is that assessing overdraft fees in the way PLCU did

is a per se violation of federal law; it does not say this is this the sole UCL theory. (See

PLCU’s Response, Ex. B (Docket no. 8-3), at 2:13–28, 13:1–18.) And in fact, the wording

suggests her claim is not solely federal; it says her “primary claim” arises from a violation of

federal law, implying she has a secondary claim. (See id. at 13:1.)

Here, Hernandez’s UCL claim is based on two alternative theories, one state and one

federal. Admittedly, the name of the one of the two putative classes — the Regulation E

Class — suggests that a federal question is squarely presented. But as the OSC noted, this

class’s claims are also based on state law principles of unfairness. (OSC, 2:24–3:1.) 

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Hernandez and the Regulation E Class could prevail merely by showing PLCU’s practices

were unfair, without also showing that they violate federal law. 

“When a claim can be supported by alternative and independent 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, 80 F.3d at 346. That is the case here. 

“The strong presumption against removal jurisdiction means that the defendant

always has the burden of establishing that removal is proper, and that the court resolves all

ambiguity in favor of remand to state court.” Hunter v. Philip Morris USA, 582 F.3d 1039,

1042 (9 Cir. 2009) (quoting Gaus v. Miles, Inc., 980 F.2d 564, 566 (9 Cir. 1992)) (internal

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quotation marks omitted). Because PLCU has not met its burden to show why this action

should not be remanded, the Court need not reach the timeliness issue. This action is

ORDERED remanded to the Superior Court of California for the County of San Diego. 

IT IS SO ORDERED.

DATED: February 18, 2016

HONORABLE LARRY ALAN BURNS

United States District Judge

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