Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_09-cv-01962/USCOURTS-casd-3_09-cv-01962-0/pdf.json

Nature of Suit Code: 220
Nature of Suit: Foreclosure
Cause of Action: 15:1601 Truth in Lending

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09cv1962

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

U.S. FINANCIAL L.P.,

Plaintiff,

v.

JERRY L. BERNEATHY,

Defendant.

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Civil No. 09cv1962 L(WMc)

ORDER REMANDING ACTION TO

STATE COURT

On September 8, 2009, defendant Jerry L. Berneathy, appearing pro se, removed this

action from the Superior Court for the State of California, County of San Diego, North County

Division. In his notice of removal, defendant contends that the action is properly removed on

the basis of federal question, diversity, and the Court’s admiralty jurisdiction. For the reasons

which follow, the action is REMANDED.

DISCUSSION

“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). “Except as otherwise expressly provided by Act of Congress, any

civil action brought in a State court of which the district courts of the United States have original

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jurisdiction, may be removed by the defendant or the defendants, to the district court of the

United States for the district and division embracing the place where such action is pending." 28

U.S.C. §1441(a). 

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). “Federal jurisdiction must be rejected if there is

any doubt as to the right of removal in the first instance.” Gaus, 980 F.2d at 566. “The strong

presumption against removal jurisdiction means that the defendant always has the burden of

establishing that removal is proper.” Id.; see also Nishimoto v. Federman-Bachrach & Assoc.,

903 F.2d 709, 712 n.3 (9th Cir. 1990); O’Halloran, 856 F.2d at 1380; Rockwell Int’l Credit

Corp. v. U.S. Aircraft Ins. Group, 823 F.2d 302, 304 (9th Cir. 1987), overruled on other

grounds, Partington v. Gedan, 923 F.2d 686 (9th Cir. 1991). “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 v. The Dow Chem. Co., 443 F.3d 676, 685 (9th Cir. 2006) (quoting Indianapolis v.

Chase Nat’l Bank, 314 U.S. 63, 76 (1941)). 

1. FEDERAL QUESTION 

"Any civil action of which the district courts have original jurisdiction founded on a claim

or right arising under the Constitution, treaties or laws of the United States shall be removable

without regard to the citizenship or residence of the parties." 28 U.S.C. § 1441(b). 

The Court has consistently interpreted jurisdictional statutes with an

"arising under" qualification . . . as "giv[ing] the lower federal courts

jurisdiction to hear, originally or by removal from a state court, only those

cases in which a well-pleaded complaint establishes either that [1] federal

law creates the cause of action or that [2] the plaintiff's right to relief

necessarily depends on resolution of a substantial question of federal law." 

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Williston Basin Interstate Pipeline Co. v. An Exclusive Gas Storage Leasehold and Easement,

524 F.3d 1090, 1100 (9th Cir. 2008)(quoting Franchise Tax Bd. v. Constr. Laborers Vacation

Trust, 463 U.S. 1, 27-28 (1983)); see also Empire Healthchoice Assurance, Inc. v. McVeigh, 547

U.S. 677, 690 (2006). 

Defendant contends “the state court complaint pleads and alleges claims ‘arising under’

Federal Law and there is no absolute expressed prohibition against removal of the federal claims

set for [sic] therein.” (Notice of Removal at 2.) A review of the complaint does not bear out the

claim of federal question jurisdiction. Plaintiff U.S. Financial is the owner of certain real

property located in California that was purchased at a trustee’s sale following foreclosure

proceedings. Defendant, the prior owner of the property, has remained on the property without

plaintiff’s consent or authorization. Plaintiff seeks to have defendant removed.

Without question, federal law does not create the purely state law claim of unlawful

detainer asserted in U.S. Financial’s complaint.

"[F]or a state law claim to provide a basis for federal jurisdiction, the state law claim must

‘turn on substantial questions of federal law,’ and ‘really and substantially involv[e] a dispute or

controversy respecting the validity, construction or effect of [federal] law.’" Williston Basin

Interstate Pipeline, 524 F.3d at 1102 (quoting Grable & Sons Metal Prods., Inc. v. Darue Eng’g

& Mfg., 545 U.S. 308, 312 (2005)). Here, plaintiff alleges a single cause of action based

exclusively on state court law – unlawful detainer. Neither the complaint nor defendant’s notice

of removal provides any indication that the unlawful detainer claim involves a dispute or

controversy regarding the validity, construction or effect of federal law.

Based on the foregoing, defendant fails to meet his burden of establishing federal

question jurisdiction. This action is therefore remanded to the San Diego County Superior

Court.

2. DIVERSITY JURISDICTION

Original jurisdiction exists in cases of complete diversity where each of the plaintiffs is a

citizen of a different state than each of the defendants, and the amount in controversy exceeds

$75,000. 28 U.S.C. §1332; Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 (1996).

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The Court is constitutionally required to raise issues related to federal subject matter

jurisdiction and may do so sua sponte. Steel Co. v. Citizens for a Better Env't, 523 U.S. 83,

93-94 (1998); see Indus. Tectonics, Inc. v. Aero Alloy, 912 F.2d 1090, 1092 (9th Cir. 1990). A

federal court must satisfy itself of its jurisdiction over the subject matter before proceeding to the

merits of the case. Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 577, 583 (1999). 

In the context of removal, the defendant bears the burden of demonstrating that

jurisdiction is properly before the court. See Thornhill Publ’g Co. v. General Tel. & Elec. Corp.,

594 F.2d 730, 733 (9th Cir. 1979). As part of that burden, defendant must affirmatively allege

the state of citizenship of each party. Bautista v. Pan Am. World Airlines, Inc., 828 F.2d 546,

551 (9th Cir. 1987); see also Kanter v. Warner-Lambert, Co., 265 F.3d 853 (9th Cir. 2001). 

For diversity purposes, “a corporation shall be deemed to be a citizen of any State by

which it has been incorporated and of the State where it has its principal place of business . . ..” 

28 U.S.C. § 1332(c)(1). Here, defendant does not make any allegation concerning the

citizenship of plaintiff U.S. Financial L.P.

Defendant alleges he is a California resident. However, for diversity purposes, a person

is a citizen of a state in which he or she is domiciled. Kanter, 265 F.3d at 857. Plaintiff does not

allege where he is domiciled. “[T]he diversity jurisdiction statute, 28 U.S.C. § 1332, speaks of

citizenship, not of residency.” Id. “A person residing in a given state is not necessarily

domiciled there, and thus is not necessarily a citizen of that state.” Id. Accordingly, plaintiff has

failed to adequately allege his own citizenship for purposes of diversity jurisdiction. See id. 

Finally, the complaint does not allege damages in excess of $75,000. To determine

whether the amount in controversy has been met on removal, “[t]he district court may consider

whether it is ‘facially apparent’ from the complaint that the jurisdictional amount is in

controversy.” Abrego Abrego, 443 F.3d at 690, quoting Singer v. State Farm Mut. Auto. Ins.

Co., 116 F.3d 373, 377 (9th Cir. 1997). Based on the allegations in the complaint, this is not

“facially apparent.” See Valdez v. Allstate Ins. Co., 372 F.3d 1115, 1117 (9th Cir. 2004) (when

the complaint falls short of seeking the threshold amount, it is not facially apparent that the

amount in controversy requirement has been met.) In the present case, the complaint specifically

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states that it is a limited civil case with damages under $10,000.

Because the complaint does not allege the facts necessary to establish minimal diversity

as required by 28 U.S.C. § 1332(d)(2)(A), the complaint is remanded to state court for lack of

subject matter jurisdiction. 

3. ADMIRALTY JURISDICTION

In response to the complaint, defendant filed in the state court what he called an “Answer

in Affidavit in Negative Averment, Opportunity to Cure and Counterclaim in Admiralty.” It

appears that defendant somehow believes that by labeling a document as arising “in Admiralty,”

he has invoked the Court’s admiralty jurisdiction. Defendant is incorrect and such an averment

is frivolous.

The United States Constitution grants original jurisdiction to federal courts to hear

admiralty claims. See U.S. CONST. art. III, § 2, cl. 1. This jurisdiction, codified at 28 U.S.C. §

1333(1), allows the filing of claims related to maritime contracts and maritime torts. A party

seeking to invoke federal admiralty jurisdiction “over a tort claim must satisfy both a location

test and a connection test.” Gruver v. Lesman Fisheries Inc., 489 F.3d 978, 982 (9th Cir. 2007)

(citing Jerome B. Grubart, Inc. v. Great Lakes Dredge & Dock Co., 513 U.S. 527, 534 (1995)).

The tort must occur on navigable waters and bear a “significant relationship to traditional

maritime activity.” Foremost Ins. Co. v. Richardson, 457 U.S. 668, 674 (1982). Thus the

“location” prong focuses on “whether the tort occurred on navigable water or whether injury

suffered on land was caused by a vessel on navigable water.” Grubart, 513 U.S. at 534. The

“connection” or “nexus” test “raises two issues.” Id. “A court, first, must ‘assess the general

features of the type of incident involved’ to determine whether the incident has ‘a potentially

disruptive impact on maritime commerce.’” Id. (quoting Sisson v. Ruby, 497 U.S. 358, 363

(1990)). “Second, a court must determine whether ‘the general character’ of the ‘activity giving

rise to the incident’ shows a ‘substantial relationship to traditional maritime activity.’ ” Id.

(quoting Sisson, 497 U.S. at 364 & n. 2, 365).

There is absolutely nothing in the complaint or defendant’s “Answer” that remotely

suggests any type of incident occurred on navigable waters or has any relationship to maritime

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activities. Indeed, plaintiff’s unlawful detainer action concerns real property located in Valley

Center, California. Under these circumstances, it is beyond disingenuous to attempt to invoke

the Court’s admiralty jurisdiction. Accordingly, the case must be remanded to state court for

lack of subject matter jurisdiction.

CONCLUSION

Defendant has failed to meet his burden of establishing removal jurisdiction. “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). Accordingly, this action is REMANDED to the

Superior Court of the State of California for the County of San Diego.

IT IS SO ORDERED. 

DATED: September 10, 2009

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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