Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_10-cv-01302/USCOURTS-caed-2_10-cv-01302-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 28:1441 Petition for Removal

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IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

RYAN FLEENOR,

 Plaintiff,

 v.

COMMUNITY ONE FINANCIAL; DOWNEY

SAVINGS AND LOAN ASSOCIATION,

F.A.; U.S. BANK, N.A., DSL

SERVICE COMPANY; FCI LENDER

SERVICES, Inc.; AND DOES 1-50,

inclusive, 

 Defendants.

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2:10-cv-01302-GEB-DAD

ORDER SUA SPONTE REMANDING

CASE

This case will be remanded sua sponte to the Superior Court

of California, County of Sacramento, from which it was removed since

this Court lacks subject matter jurisdiction over Plaintiff’s

complaint and removal was improper. “A court may sua sponte remand a

case to state court for lack of subject matter jurisdiction without

briefing or hearing if the lack of jurisdiction is clear.” Cortes v.

Bank of Am., N.A., No. CV 09-7457 AHM (FFMx), 2009 WL 4048861, at *1

(C.D. Cal. Nov. 20, 2009) (citations omitted); see also Cooper v.

Washington Mutual Bank, No. C03-554 VRW, 2003 WL 1563999, at *2 (N.D.

Cal. Mar. 19, 2003) (same).

Plaintiff alleges in his complaint the following fifteen

claims under state law: fraud, misrepresentation, breach of fiduciary

duty, breach of warranty of good faith and fair dealing, civil

Case 2:10-cv-01302-GEB-DAD Document 15 Filed 07/21/10 Page 1 of 6
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conspiracy, violation of California Civil Code sections 2923.5 and

2923.6, violation of California Business and Professions Code section

17200, unconscionability, unjust enrichment, accounting, declaratory

relief, set aside trustee’s sale, cancellation of trustee’s deed,

quiet title and injunctive relief. Defendants U.S. Bank N.A. and DSL

Service Company (collectively, “Defendants”), however, removed this

case to federal court on the basis of federal question jurisdiction. 

Defendants argue federal question jurisdiction exists since Plaintiff

has “artfully [pled]” his fraud and misrepresentation claims, and his 

claim alleged under California Business and Professions Code section

17200 (“section 17200").

Federal courts have jurisdiction over claims “arising under”

federal law. 28 U.S.C. § 1331. “The presence or absence of federal

question jurisdiction is governed by the ‘well-pleaded complaint

rule,’ which 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] rule makes the plaintiff the master of [his]

claim[s]; he may avoid federal jurisdiction by exclusive reliance on

state law.” Catepillar, Inc. v. Williams, 482 U.S. 386, 392 (1987).

Further, “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, 1041 (9th

Cir. 2003) (quotations and citations omitted). Moreover, “[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 -

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federal question jurisdiction does not attach . . . .” Rains v.

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

Even when “the face of [a Plaintiff's] complaint does not

present a claim arising under federal law to warrant subject matter

jurisdiction, [the] inquiry does not end there.” Lippitt 340 F.3d at

1041. This is because a “corollary” to the well-pleaded complaint

rule is the artful pleading doctrine, which “provides that although

the plaintiff is master of his own pleadings, he may not avoid federal

jurisdiction by omitting from the complaint allegations of federal law

that are essential to the establishment of his claim.” Id.

(quotations and citations omitted). “The artful pleading doctrine

allows courts to delve beyond the face of the state court complaint

and find federal question jurisdiction by recharacterizing a

plaintiff’s state-law claim as a federal claim.” Id. (quotations and

citations omitted). The doctrine “is a useful procedural sieve to

detect traces of federal subject matter jurisdiction in a particular

case” and is used when questioning: “whether [Plaintiff] has artfully

phrased a federal claim by dressing it in state law attire.” Id. 

“[C]ourts have used the artful pleading doctrine in: (1) complete

preemption cases, and (2) substantial federal question cases. 

Subsumed within this second category are those cases where the claim

is necessarily federal in character, or where the right to relief

depends on the resolution of a substantial, disputed federal

question.” Id. at 1041-42 (citations omitted). Therefore,

“‘[a]rising 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

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Operating Eng’rs v. County of Plumas, 559 F.3d 1041, 1045 (9th Cir. 2009).

I. Plaintiff’s Fraud and Misrepresentation Claims Are Not Artfully

Pled Federal Claims

Defendants contend Plaintiff’s fraud and misrepresentation

claims are artfully pled federal claims that allege violations of the

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

Procedures Act (“RESPA”). (Not. of Removal ¶¶ 5-6.)

Plaintiff alleges in his fraud claim that Defendants Downey

Savings and Loan Association, F.A. (“Downey”) and Community One

Financial (“Community One”) “committed several deceitful acts with the

intention of inducing Plaintiff into proceeding with the loan

transaction . . . includ[ing]: (1) encouraging Plaintiff to enter

[into] the [note] while simultaneously hiding the YSP, inferior

interest rates, and other unfavorable terms; [and] (2) failing to

properly underwrite the [note].” (Compl. ¶ 37.) Plaintiff alleges in

his misrepresentation claim that Community “made several

misrepresentations to Plaintiff . . . including:(1) telling Plaintiff

that he would be approved for the terms of [his] loan . . . ; (2)

[Community’s] failure to disclose a YSP; and (3) [Community’s] failure

to act in Plaintiff’s best interest by placing him in a loan under

which foreclosure was foreseeable and likely.” (Id. ¶ 47.)

Plaintiff’s fraud and misrepresentation claims do not refer

to or invoke federal law, nor do they raise any substantial and

disputed federal question. Therefore, these state claims are not

artfully pled and do not arise under federal law. Accordingly,

Plaintiff’s fraud and misrepresentation claims do not confer federal

question removal jurisdiction.

///

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II. Plaintiff’s Section 17200 Claim is Not an Artfully Pled Federal

Claim

Defendants also argue Plaintiff’s section 17200 claim is an

artfully pled “federal claim that pleads violations of federal

statutes including TILA, RESPA and the Equal Credit Opportunity Act.” 

(Not. of Removal ¶ 7.)

Plaintiff alleges in his section 17200 claim that Defendants

engaged in “unfair competition” by violating California Civil Code

sections 2923.5 and 2923.6, RESPA, TILA, the Equal Credit Opportunity

Act (“ECOA”), and by not disclosing a YSP Defendant Downey allegedly

paid to Defendant Community. (Compl. ¶¶ 91-95.)

However, Plaintiff’s alleged violations of federal law “just

shape [the] court's interpretation” of his section 17200 claim. Int’l

Union of Operating Eng’rs, 559 F.3d at 1045. Further, Plaintiff’s

“reference to the alleged RESPA, EOCA and TILA violations” does not

cause these alleged federal law violations to be a necessary element

of Plaintiff’s § 17200 claim “because [P]laintiff could prevail on

that claim by showing any ‘unlawful, unfair, or fraudulent practice’

independent of the federal law allegations.” Montoya v. Mortgageit

Inc., No. C 09-05889 SI, 2010 WL 546891, at *3 (N.D. Cal.2010); see

also California v. H *& R Block, Inc., No. C06-2058-SC, 2006 WL

2669045, at *4 (N.D. Cal. Sept. 18, 2006) (finding that incorporation

of TILA violation into section 17200 claim does not confer “arising

under” jurisdiction). Therefore, this claim does not confer federal

question removal jurisdiction.

Since the federal court lacks jurisdiction, this case is remanded

to the Superior Court of California, County of Sacramento, from which 

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it was removed.

Dated: July 21, 2010

 

GARLAND E. BURRELL, JR.

United States District Judge

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