Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_09-cv-02656/USCOURTS-caed-2_09-cv-02656-0/pdf.json

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

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28 This matter is deemed suitable for decision without oral *

argument. E.D. Cal. R. 230(h).

1

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

ANNA MICELI FENSKE, )

)

Plaintiff, ) 2:09-cv-02656-GEB-KJM

)

v. ) ORDER GRANTING PLAINTIFF’S

) MOTION TO REMAND*

WELLS FARGO BANK, N.A., WELLS )

FARGO HOME MORTGAGE, INC., and )

DOES 1-10, inclusive, )

)

Defendants. )

) 

Plaintiff filed a motion to remand this case to the Nevada

County Superior Court in California from which it was removed, arguing

that the federal court lacks removal subject matter jurisdiction. 

Defendant Wells Fargo Bank, N.A. (“Defendant”) filed a Notice of

Removal in which it argues federal question jurisdiction exists under

28 U.S.C. § 1331 since Plaintiff’s claims arise under the Federal

Truth in Lending Act (“TILA”), and the Real Estate Settlement

Procedures Act (“RESPA”). (Not. of Removal at 1:27-2:1.) 

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Plaintiff alleges in her Complaint five causes of action

against Defendants Wells Fargo Bank, N.A. and Wells Fargo Home

Mortgage, Inc., all of which concern a foreclosure proceeding

involving Plaintiff’s residence; only Plaintiff’s second and fifth

causes of action are asserted as bases for the removal.

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. The

plaintiff is the ‘master’ of [her] complaint[.]” Ultramar Am. Ltd. v.

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

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 [that 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, actually disputed and substantial 

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

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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., 2009 WL 4048861, *2 (C.D. Cal. 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., 2006 WL 2669045,

*4 (N.D. Cal. 2006) (remanding case after finding that incorporation

of TILA violation into claim for violation of § 17200 does not “arise

under” federal law).

II. ANALYSIS

Defendant argues Plaintiff’s second cause of action provides

removal jurisdiction since it alleges federal TILA and RESPA claims. 

Specifically, Defendant relies on Paragraph 30 of that cause of action

in which Plaintiff alleges:

In making the loan for which defendants claim

plaintiff and her husband are liable, defendant

Wells Fargo Bank committed numerous violations of

the Truth in Lending Act, 15 U.S.C. § 1601 et seq.,

of Regulation Z pursuant thereto (12 C.F.R. ch.

226), and of the Real Estate Settlement Procedures

Act, 12 U.S.C. § 2601 et seq., and failed to

observe or follow fiduciary standards applicable to

such loans.

(FAC ¶ 30.) Paragraph 30 is under the heading, “Second Cause of

Action – Fraud and Statutory Violations,” and TILA and RESPA are the

only statutes listed in the paragraph. (FAC 7:7 (emphasis added).) 

Defendant argues Plaintiff’s use of the word “and” in the heading

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“clearly demonstrates” Plaintiff has asserted federal claims under

TILA and RESPA. (Def.’s Opp’n 2: 14-21.) 

Plaintiff rejoins the “second cause of action is for fraud,

in which the federal statutory violations are adduced as additional

breaches of the fiduciary standard of care owed by defendant to

plaintiff.” (Plt.’s Mot. to Remand 4:2-4.) Plaintiff’s remaining

eight paragraphs in the “second cause of action” are couched in terms

of a state fraud claim, and do not mention RESPA or TILA or refer to

paragraph 30. (Plt.’s Compl. ¶¶ 27-29, 31-35.) Further, Plaintiff

does not seek in her prayer for relief rescission under TILA,

statutory damages and attorneys’ fees under RESPA, or any other

specific relief under either statute. Construing Plaintiff’s second

cause of action under the well-pleaded complaint rule, “this court

cannot say that [Plaintiff’s] right to relief necessarily depends upon

construction of a substantial question of any federal law.” Ultramar

Am., 900 F.2d at 1414. 

Defendant also argues federal removal jurisdiction exists 

since Plaintiff’s right to relief in her fifth cause action

“necessarily depends on the resolution of substantial federal

questions” pointing to the following allegations in that cause of

action: “The foregoing widespread fraudulent practices on the part of

[Defendants] including their multiple and manifold statutory

violations aforesaid, constituted unfair and deceptive trade practices

within the meaning of California Business and Professions Code section

17200 et seq.” (Def.’s Opp’n to Mot. to Remand 4:18-19; Plt.’s Compl.

¶ 48.) Defendant contends since “relief under section 17200 is

predicated on federal statutory violations” (Opp’n 4:26-27) “remand

would be improper” (Opp’n 5:13).

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However, the alleged federal statutory violations are not 

“necessary element[s] of the [section 17200] claim” since Plaintiff

also alleges “alternative and independent theories-one of which is a

state-law theory” alleging fraud as a predicate act for Plaintiff’s

section 17200 claim, and also has other alternatives under section

17200 to attempt to prove the portion of her claim that references

RESPA and TILA. Rains, 80 F.3d at 346; Plt.’s Compl. ¶ 48.

Because . . . section 17200 is written in the

disjunctive, it establishes three varieties of

unfair competition-acts or practices which are

unlawful, or unfair, or fraudulent. A practice is

prohibited as ‘unfair’ or ‘deceptive’ even if not

‘unlawful’ or vice versa. Therefore, [Plaintiff]

does not have to rely on a violation of the [RESPA

or TILA] to bring a [section 17200] claim in

California state court. [She] merely has to allege

that Defendants' conduct was either unfair or

fraudulent.

Lippitt v. Raymond James Fin. Serv., Inc., 340 F.3d 1033, 1043 (9th

Cir. 2003) (citing Saunders v. Superior Court, 27 Cal. App. 4th 832,

839 (1994) (“Unfair simply means any practice whose harm to the victim

outweighs its benefits. Fraudulent . . . requires a showing that

members of the public are likely to be deceived.”); and Day v. AT&T

Corp., 63 Cal. App. 4th 325 (1998) (section 17200 prohibits businesses

“from engaging in . . . practices which are potentially misleading to

the public.”)) (internal citations, quotations, and parentheticals are

omitted). Thus, in light of the alternative ways Plaintiff has to

attempt to prove her section 17200 claim, “[t]here is no ‘basic’ or

‘pivotal’ federal question that impinges on [her] right to relief.” 

Lippitt, 340 F.3d at 1046. Therefore, Plaintiff’s claims do not

“arise under” federal law, and Plaintiff’s motion to remand is

GRANTED.

Finally, Plaintiff requests attorneys’ fees under 28 U.S.C. 

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§ 1447(c) since removal was improper. “[T]he standard for awarding

fees should turn on the reasonableness of the removal. Absent unusual

circumstances, courts may award attorneys fees under § 1447(c) only

where the removing party lacked an objectively reasonable basis for

seeking removal.” Martin v. Franklin Capital Corp., 546 U.S. 132, 141

(2005). Here, although Defendant’s arguments ultimately lack merit,

they are not objectively unreasonable. Accordingly, Plaintiff’s

request for attorneys’ fees is DENIED.

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

County Superior Court in California 

Dated: January 12, 2010

 

GARLAND E. BURRELL, JR.

United States District Judge

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