Court Opinion

ID: 53586
Source: CourtListenerOpinion
Date Created: 2010-04-26 01:24:57+00
Date Added: 2024-06-11T12:32:28.641532
License: Public Domain

IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT United States Court of Appeals
                                                   Fifth Circuit

                                                                            FILED
                                                                         November 1, 2007

                                     No. 07-20470                     Charles R. Fulbruge III
                                   Summary Calendar                           Clerk

ALI SAADAT

                                                  Plaintiff-Appellant
v.

LANDSAFE FLOOD DETERMINATION INC;
COUNTRYWIDE HOME LOANS INC

                                                  Defendants-Appellees

                   Appeal from the United States District Court
                        for the Southern District of Texas
                                 No. 4:06-CV-2423

Before REAVLEY, SMITH, and BARKSDALE, Circuit Judges.
PER CURIAM:*
       Ali Saadat filed suit in state court against Landsafe Flood Determination,
Inc., and Countrywide Home Loans, Inc., alleging that the defendants
erroneously informed him that his property was located in a flood zone, which
necessitated flood insurance. Following the defendants’ removal of the suit to
federal court, the district court granted the defendants’ FED. R. CIV. P. 12(b)(6)

       *
         Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
                                  No. 07-20470

motion, and Saadat now appeals. Concluding that there was no basis for federal
removal jurisdiction, we vacate the district court’s dismissal of Saadat’s claims
and remand the case to the district court with instructions to remand the case
to state court.
      On August 30, 2005, Saadat closed on a real estate transaction in
Magnolia, Texas. He was informed at that time that the property he had
purchased was not in a flood zone. Countrywide subsequently acquired Saadat’s
mortgage. Two months after the closing, Countrywide sent Saadat a letter
informing him that his property was located within a Special Flood Hazard Area
(“SFHA”) and that he would be required to purchase flood insurance pursuant
to the National Flood Insurance Act (“NFIA”). Saadat alleged that he then
incurred unnecessary costs to purchase flood insurance and to retain an attorney
and consultants to refute Countrywide’s SFHA determination. He also alleged
that Countrywide’s letter caused him to suffer stress and chest pains. He filed
suit alleging claims for deceptive trade practices, common law fraud, fraud in a
real estate transaction, and negligent misrepresentation.
      Although the parties have not explicitly addressed the issue of subject
matter jurisdiction, we are required to examine sua sponte whether jurisdiction
was proper in the district court.      Sandy Creek Investors, Ltd. v. City of
Jonestown, 325 F.3d 623, 626 (5th Cir. 2003). A defendant may remove a case
to federal court based on the presence of a federal question when a plaintiff
asserts “a claim or right arising under the Constitution, treaties or laws of the
United States.” 28 U.S.C. § 1441(b). Under the well-pleaded complaint rule,
“there is generally no federal jurisdiction if the plaintiff properly pleads only a
state law cause of action.” MSOF Corp. v. Exxon Corp., 295 F.3d 485, 490 (5th
Cir. 2002). A plaintiff may not avoid removal jurisdiction by simply failing to
plead a necessary federal question in the complaint. Franchise Tax Bd. v.
Constr. Laborers Vacation Trust, 463 U.S. 1, 22, 103 S. Ct. 2841, 2853 (1983).

                                        2
                                   No. 07-20470

         Saadat’s complaint does not invoke federal law and alleges only state law
claims for fraud and negligence arising from Countrywide’s notification that his
property was in a flood zone when it either knew or should have known that the
property was not in a SFHA. The defendants contend that Saadat’s complaint
necessarily stems directly from the NFIA because his claimed damages resulted
from the NFIA notification letter, which they sent pursuant to their duties under
the statute. They argue that the complaint was properly dismissed because
there is no private right of action for alleged violations of the NFIA. A complaint
that alleges a violation of a federal statute as an element of a state cause of
action, when there is no private cause of action under the statute, does not state
a claim conferring federal question jurisdiction. Merrell Dow Pharmaceuticals,
Inc. v. Thompson, 478 U.S. 804, 817, 106 S. Ct. 3229, 3237 (1986). Furthermore,
the defendants’ arguments sound as a defense to Saadat’s claims, which is
insufficient to justify removal to federal court. See Carpenter v. Wichita Falls
Ind. Sch. Dist., 44 F.3d 362, 366 (5th Cir. 1995) (“A defendant may not remove
on the basis of an anticipated or even inevitable federal defense, but instead
must show that a federal right is an element, and an essential one, of the
plaintiff’s cause of action.”) (internal quotation and citation omitted). We see no
complete preemption present in order to avoid the well-pleaded complaint rule,
and the resolution of Saadat’s claims does not turn on the answer to a federal
question. See MSOF Corp., 295 F.3d at 490–91.
         Because Saadat’s complaint alleged only state law claims, the district
court improperly exercised removal jurisdiction over this case. Accordingly, the
district court’s dismissal of Saadat’s claims is VACATED, and the case is
REMANDED to the district court with instructions to remand the case to state
court.

                                         3