Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_15-cv-01875/USCOURTS-caed-2_15-cv-01875-0/pdf.json

Parties Involved:
Alpine Holdings, Inc.
Plaintiff
Hyalite Investments, Inc.
Plaintiff
Anne Sprague
Defendant

Document Text:

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

1

UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

HYALITE INVESTMENTS, INC. AND 

ALPINE HOLDINGS, INC.,

Plaintiffs,

v.

GEOFF SPRAGUE AND ANNE 

SPRAGUE, 

Defendant.

No. 2:15-cv-1875-TLN-GGH

SUA SPONTE REMAND ORDER

This matter is before the Court pursuant to Defendants Geoff Sprague and Anne Sprague’s 

(“Defendants”) Notice of Removal and Motion to Proceed in Forma Pauperis. (ECF Nos. 1–2.) 

For the reasons set forth below, Defendants’ Motion to Proceed in Forma Pauperis is GRANTED. 

The Court hereby remands the action to the Superior Court of California, County of Amador, due 

to lack of subject-matter jurisdiction.

I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY

On or about June 16, 2015, Plaintiffs Hyalite Investments, Inc. and Alpine Holdings, Inc.

(“Plaintiffs”) brought an action against Defendants for possession of the real property known as 

21480 Consolation Street, Volcano, California (“the Property”). (Notice of Removal, ECF No. 1

at 10.) The Complaint alleges that Defendants were the foreclosed upon owners of the Property

and continued to occupy the Property despite having no ownership or possessory interest in the 

Case 2:15-cv-01875-TLN-GGH Document 3 Filed 09/09/15 Page 1 of 4
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

2

Property. (ECF No. 1 at 10.) Plaintiffs assert that Defendants were served a “Notice to Quit after

Foreclosure Sale” and continued to occupy the property. (ECF No. 1 at 10.)

On September 4, 2015, Defendants filed a Notice of Removal removing this unlawful 

detainer action from the Amador County Superior Court. (ECF No. 1.) 

II. STANDARD OF LAW

28 U.S.C. § 1441 permits the removal to federal court of any civil action over which “the 

district courts of the United States have original jurisdiction.” 28 U.S.C. § 1441(a). “Removal is 

proper only if the court could have exercised jurisdiction over the action had it originally been 

filed in federal court.” Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987). 

Courts “strictly construe the removal statute against removal jurisdiction,” and “the 

defendant always has the burden of establishing that removal is proper.” Gaus v. Miles, Inc., 980 

F.2d 564, 566 (9th Cir. 1992) (per curiam). Furthermore, “[i]f the district court at any time 

determines that it lacks subject matter jurisdiction over the removed action, it must remedy the 

improvident grant of removal by remanding the action to state court.” California ex rel. Lockyer 

v. Dynegy, Inc., 375 F.3d 831, 838, as amended, 387 F.3d 966 (9th Cir. 2004), cert. denied 544 

U.S. 974 (2005).

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.” Caterpillar, 482 U.S. at 386. 

Removal cannot be based on a defense, counterclaim, cross-claim, or third party claim raising a 

federal question, whether filed in state court or federal court. See Vaden v. Discover Bank, 556 

U.S. 49 (2009); Hunter v. Philip Morris USA, 582 F.3d 1039, 1042–43 (9th Cir. 2009). 

III. ANALYSIS

Defendants removed this case to this Court on the basis of federal question jurisdiction. 

Defendants argue that the Protecting Tenants at Foreclosure Act of 2009 (“PTFA”) gives rise to a

federal question by identifying two ways in which the statute is drawn into controversy in the 

instant case. 

Defendants state that Plaintiffs’ claim is based upon a notice which expressly references 

Case 2:15-cv-01875-TLN-GGH Document 3 Filed 09/09/15 Page 2 of 4
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

3

and incorporates the PTFA of 2009, 12 U.S.C. §§ 5220. (ECF No. 1 at ¶ 8.) However, the 

Complaint itself contains only a single claim for unlawful detainer. (ECF No. 1 at 9–10.) Under 

the well-pleaded complaint rule, “federal [question] jurisdiction exists only when a federal 

question is presented on the face of the plaintiff’s properly pleaded complaint.” Caterpillar, 482 

U.S. at 386. The instant Complaint relies solely on California state law and does not mention 

expressly or impliedly 12 U.S.C. §§ 5201, et. seq. The Complaint does not state claims under the 

PTFA or any other federal law. The well-pleaded complaint rule makes the plaintiff the master of 

his claim, so he may avoid federal jurisdiction by basing his claim exclusively on state law, as is 

the case here. Caterpillar, 482 U.S. at 392.

It seems Defendants mean to assert subject matter jurisdiction by alleging Plaintiffs

violated the PTFA.

1

 However, removal cannot be based on a defense, counterclaim, cross-claim, 

or third party claim raising a federal question, whether filed in state court or federal court. See 

Vaden, 556 U.S. at 49; Hunter v. Philip Morris USA, 582 F.3d at 1042–43. While Defendants

contend in the notice of removal that Plaintiffs have violated a federal law, this assertion relates 

only to an affirmative defense or potential counterclaim, which is not considered in evaluating 

whether a federal question appears on the face of a plaintiff’s complaint. See Vaden, 556 U.S. at 

60-62. “[A] counterclaim – which appears as part of the defendant’s answer, not as part of the 

plaintiff’s complaint – cannot serve as the basis for ‘arising under’ jurisdiction.” Holmes Group, 

Inc. v. Vornado Air Circulation Sys., Inc., 535 U.S. 826, 831 (2002).

In summary, the state court Complaint indicates that the only cause of action is one for 

unlawful detainer, which arises solely under state law and not under federal law. Thus, this action 

does not arise under federal law and no other grounds for federal jurisdiction are apparent. 

Therefore, it is appropriate to remand this case, sua sponte, for lack of federal jurisdiction. See 

United Investors Life Ins. Co. v. Waddell & Reed Inc., 360 F.3d 960, 967 (9th Cir. 2004) (“the 

district court ha[s] a duty to establish subject matter jurisdiction over the removed action sua 

 

1

In any event, the Ninth Circuit has held that no private right of action exists under the 

PTFA. Logan v. U.S. Nat. Assoc., 722 F.3d 1163, 1173 (9th Cir. 2013). Further, “the PTFA is 

framed in terms of ‘protections’ for tenants, suggesting that it was intended to provide a defense 

in state eviction proceedings rather than a basis for offensive suits in federal courts.” Id. at 1173.

Case 2:15-cv-01875-TLN-GGH Document 3 Filed 09/09/15 Page 3 of 4
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

4

sponte, whether the parties raised the issue or not.”).

IV. CONCLUSION

Thus for the reasons stated above, Defendants’ motion to proceed in forma pauperis (ECF 

No. 2) is GRANTED, and the Court hereby remands this action to the Superior Court of 

California, County of Amador.

IT IS SO ORDERED.

Dated: September 7, 2015

Case 2:15-cv-01875-TLN-GGH Document 3 Filed 09/09/15 Page 4 of 4