Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_11-cv-02526/USCOURTS-casd-3_11-cv-02526-0/pdf.json

Nature of Suit Code: 290
Nature of Suit: Other Real Property Actions
Cause of Action: 28:1441 Petition for Removal

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11cv2526

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

SHANNON M. MOLLOY,

Plaintiff,

v.

FIRST GUARANTY FINANCIAL

CORPORATION, et al.,

Defendants.

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Civil No. 11cv2526 L (WMC)

ORDER REMANDING ACTION

Plaintiff filed this action in the Superior Court for the State of California, County of San

Diego, alleging eight state law causes of action relating to a mortgage loan transaction.

Defendants JP Morgan Chase Bank, N.A., JP Morgan Chase Bank, N.A., as successor in interest

to EMC Mortgage LLC and Mortgage Electronic Registration Systems, Inc. removed this action.

The notice of removal is based on federal question jurisdiction under 28 U.S.C. Sections 1331

and 1441(b).

“Federal courts are courts of limited jurisdiction. They possess only that power

authorized by Constitution or a statute, which is not to be expanded by judicial decree. It is to be

presumed that a cause lies outside this limited jurisdiction and the burden of establishing the

contrary rests upon the party asserting jurisdiction.” Kokkonen v. Guardian Life Ins. Co. of Am.,

511 U.S. 375, 377 (1994); see also Abrego Abrego v. The Dow Chem. Co., 443 F.3d 676, 684

(9th Cir. 2006). 

Case 3:11-cv-02526-L-WMC Document 4 Filed 11/01/11 Page 1 of 4
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Consistent with the limited jurisdiction of federal courts, the removal statute is strictly

construed against removal jurisdiction. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992);

see also Sygenta Crop Prot. v. Henson, 537 U.S. 28, 32 (2002); O’Halloran v. University of

Wash., 856 F.2d 1375, 1380 (9th Cir. 1988). “The strong presumption against removal

jurisdiction means that the defendant always has the burden of establishing that removal is

proper.” Gaus, 980 F.2d at 566; see also Nishimoto v. Federman-Bachrach & Assoc., 903 F.2d

709, 712 n.3 (9th Cir. 1990); O’Halloran, 856 F.2d at 1380. “The traditional rule of burden

allocation in determining removal jurisdiction was meant to comport with what the Supreme

Court has termed ‘[t]he dominant note in the successive enactments of Congress relating to

diversity jurisdiction,’ that is, ‘jealous restriction, of avoiding offense to state sensitiveness, and

of relieving the federal courts of the overwhelming burden of business that intrinsically belongs

to the state courts in order to keep them free for their distinctive federal business.’” Abrego

Abrego, 443 F.3d at 685, quoting Indianapolis v. Chase Nat’l Bank, 314 U.S. 63, 76 (1941). 

Defendants point to plaintiff’s sixth cause of action that alleges a violation of California's

Unfair Competition Law (“UCL”), California Business and Professions Code section 17200 et

seq., as the basis for its contention that federal question removal jurisdiction exists under 28

U.S.C. § 1331. Specifically, defendants contend the violation of § 17200 has as its sole

predicate claim a violation of Regulation Z of the federal Truth in Lending Act (“TILA”).

28 U.S.C. § 1331 provides: “The district courts shall have original jurisdiction of all civil

actions arising under the Constitution, laws, or treaties of the United States.” “Most

federal-question jurisdiction cases are those in which federal law creates a cause of action. A

case may also arise under federal law where it appears that some substantial, disputed question

of federal law is a necessary element of one of the well-pleaded state claims.” Wander v. Kaus,

304 F.3d 856, 858 (9th Cir. 2002) (citations and internal quotation marks omitted). “The ...

‘well-pleaded complaint rule’ ... provides that federal jurisdiction exists only when a federal

question is presented on the face of the plaintiff's properly pleaded complaint.” California v.

United States, 215 F.3d 1005, 1014 (9th Cir. 2000) (quoting Audette v. Int'l Longshoremen's &

Warehousemen's Union, 195 F.3d 1107, 1111 (9th Cir. 1999)). “The [well-pleaded complaint]

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rule makes the plaintiff the master of [his] claim[s]; he ... may avoid federal jurisdiction by

exclusive reliance on state law.” Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987).

“‘Arising under’ federal jurisdiction only arises ... 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 v. County of Plumas, 559 F.3d 1041, 1045 (9th Cir. 2009). “[A] case arises

under ... [federal law when] a right ... created by [that law is] an element, and an essential one, of

the plaintiff's cause of action.” Id. at 1044. But “the mere presence of a federal issue in a state

cause of action does not automatically confer federal-question jurisdiction.” Lippitt v. Raymond

James Fin. Servs., Inc., 340 F.3d 1033, 1040 (9th Cir. 2003). Further, “[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 theory – federal question jurisdiction does not attach [.]” Rains v. Criterion

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

The UCL claim in plaintiff’s complaint states that defendants “have engaged in unlawful,

fraudulent, or unfair actions ... within the meaning of Section 17200 of the Business and

Professions Code. Defendants’ acts or practices include, but are not limited to: . . . violation of

Regulation Z.” (Comp. at ¶ 99(emphasis added.)) Plaintiff’s alleged federal statutory violation in

her UCL claim is not a “necessary element of [her] claim” because plaintiff also alleges

“alternative and independent theories – one of which is a state-law theory” alleging violations of

California law as a predicate act for their UCL claim. Rains, 80 F.3d at 346. In light of the

alternative ways plaintiff has pleaded her UCL claim, “[t]here is no ‘basic’ or ‘pivotal’ federal

question that impinges on [her] right to relief.” Lippitt, 340 F.3d at 1046. Because plaintiff’s

UCL claim does not “arise under” federal law, this Court lacks subject matter jurisdiction. 

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“If at any time before final judgment it appears that the district court lacks subject matter

jurisdiction, the case shall be remanded.” 28 U.S.C. § 1447(c). Based on the foregoing, IT IS

ORDERED remanding this action to the Superior Court for the State of California, County of

San Diego. 

IT IS SO ORDERED.

DATED: November 1, 2011

M. James Lorenz

United States District Court Judge

COPY TO: 

HON. WILLIAM MCCURINE, JR.

UNITED STATES MAGISTRATE JUDGE

ALL PARTIES/COUNSEL

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