Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_09-cv-03596/USCOURTS-caed-2_09-cv-03596-0/pdf.json

Nature of Suit Code: 371
Nature of Suit: Truth in Lending
Cause of Action: 28:1441 Petition for Removal

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IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

NIKOLAY MARTYNOV and TATYANA )

MARTYNOV, )

)

Plaintiffs, ) 2:09-cv-03596-GEB-GGH

)

v. ) ORDER REMANDING CASE

) TO STATE COURT

COUNTRYWIDE FINANCIAL CORPORATION, )

et al., )

)

Defendants. )

)

Defendants removed this case from Placer County Superior 

Court in California on December 29, 2009, based on the following

argument in their Notice of Removal: “This action . . . may be removed

. . . in that Plaintiffs’ state-law claims allege violations arising

from the Truth in Lending Act (“TILA”), 15 U.S.C. § 1601, et seq., its

corresponding Regulation Z, 12 C.F.R. Part 226, and the Real Estate

Settlement Procedures Act (“RESPA”), 12 U.S.C. § 2601, et seq., and

its corresponding Regulation X, 24 C.F.R. 3500, et seq.

Interpretation of the federal right is thus necessary to resolve this

case.” (Notice of Removal ¶ 12.) Plaintiffs allege in their

complaint thirteen causes of action against Defendants, all of which

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concern a foreclosure proceeding involving Plaintiffs’ residence. 

Review of the complaint reveals that Defendants only assert

Plaintiffs’ first and third causes of action are the bases for 

removal. However, since it is evident that there is no substantial

federal question in Plaintiffs’ complaint, this case will be remanded

to Placer County Superior Court for lack of subject matter

jurisdiction.

I. LEGAL STANDARD

“Ordinarily, the existence of federal question jurisdiction

is determined from the face of the complaint. Whether the complaint

states a claim ‘arising under’ federal law must be ascertained by the

legal construction of the plaintiff's allegations, and not by the

effect attributed to those allegations by the adverse party.

[P]laintiff[s] [are] the ‘master’ of [their] complaint[.]” Ultramar

Am. Ltd. v. Dwelle, 900 F.2d 1412, 1414 (9th Cir. 1990) (citations and

quotations omitted). “Claims brought under state law may ‘arise

under’ federal law if vindication of the state right necessarily turns

upon construction of a substantial question of federal law, i.e., if

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

Id.

“[A] case arises under . . . [federal law when] a right

. . . created by [federal law is] an element, and an essential one, of

the plaintiff’s cause of action.” Int’l Union of Operating Eng’rs v.

County of Plumas, 559 F.3d 1041, 1044 (9th Cir. 2009) (quoting Gully

v. First Nat’l Bank, 299 U.S. 109, 112-13 (1936)). Specifically, a

state-law claim presents a federal question when it “necessarily

raise[s] a stated federal issue, [which is] actually disputed and

substantial . . . .” Grable & Sons Metal Prod., Inc. v. Darue Eng’g &

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Mfg., 545 U.S. 308, 314 (2005). “‘Arising under’ federal jurisdiction

only arises, then, when the federal law does more than just shape a

court’s interpretation of state law; the federal law must be at

issue.” Int’l Union of Operating Eng’rs, 559 F.3d at 1045 (emphasis

in original). In addition, “[w]hen 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 v. Criterion Sys., Inc., 80 F.3d 339,

346 (9th Cir. 1996); see also Cortes v. Bank of Am., N.A., No. CV 09-

7457 AHM (FFMx), 2009 WL 4048861, *2 (C.D. Cal. Nov. 20, 2009)

(remanding case after finding that references to TILA violations in

claim for violation of § 17200 do not present claims that “arise

under” federal law); California v. H & R Block, Inc., No. C 06-2058

SC, 2006 WL 2669045, *4 (N.D. Cal. Sept. 18, 2006) (remanding case

after finding that incorporation of TILA violation into claim for

violation of § 17200 does not “arise under” federal law).

II. ANALYSIS

Defendants’ Notice of Removal reveals Defendants rely on 

Plaintiffs’ first and third causes of action as the basis for removal, 

based on Defendants argument that these claims necessarily require

interpretation of TILA and RESPA. Specifically, Defendants rely on

paragraphs 9, 41, and 62. Paragraph 9 is under the heading,

“Background and Parties.” Plaintiffs allege in paragraph 9,

“Defendants . . . are and were subject to and must comply with [TILA]

and [RESPA].” (Compl. ¶ 9.) Paragraph 41 is under the heading,

“First Cause of Action - Breach of Covenant of Good Faith and Fair

Dealing.” Plaintiffs allege in paragraph 41, “Defendants willfully

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breached their implied covenant of good faith and fair dealing with

Plaintiffs when Defendants . . . [f]ailed to provide all the proper

disclosures . . . .” (Compl. ¶ 41.) Paragraph 62 is under the

heading, “Third Cause of Action - Violation of California’s Unfair

Competition Law [(“UCL”)], Bus. & Prof. Code § 17200 et. seq.” 

Plaintiffs allege in paragraph 62, “the conduct of Defendants . . .

threatens an incipient violation of various consumer protection

statutes, or which violate the policy and spirit of such laws,

including [several California statutes] and [TILA].” (Compl. ¶ 62.) 

The remaining allegations in Plaintiffs’ first and third “causes of

action” are couched in terms of California UCL and breach of the

implied covenant of good faith and fair dealing claims, and do not

mention RESPA or TILA. Further, Plaintiffs do not seek in their

prayer for relief rescission under TILA, statutory damages and

attorneys’ fees under RESPA, or any other specific relief under either

statute. Construing Plaintiffs’ first and third causes of action

under the well-pleaded complaint rule, “this court cannot say that

[Plaintiffs’] right to relief necessarily depends upon construction of

a substantial question of any federal law.” Ultramar Am., 900 F.2d at

1414. 

Additionally, a violation of TILA and RESPA is not a 

“necessary element of the [state] claim[s]” since Plaintiffs also

allege “alternative and independent theories-[several] of which [are]

state-law theor[ies]” to attempt to prove the portion of their claims

that reference TILA and RESPA. Rains, 80 F.3d at 346. Thus, in light

of the alternative ways Plaintiffs have to attempt to prove their

first and third claims, “[t]here is no ‘basic’ or ‘pivotal’ federal

question that impinges on [their] right to relief.” Lippitt, 340 F.3d

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at 1046. Therefore, Plaintiffs’ claims do not “arise under” federal

law and this Court lacks subject matter jurisdiction over the action. 

For the stated reasons, this case is remanded to the Placer

County Superior Court in California.

Dated: April 20, 2010

 

GARLAND E. BURRELL, JR.

United States District Judge

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