County of Santa Clara v. Wang ( 2020 )

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION 7 COUNTY OF SANTA CLARA, et al., 8 Case No. 5:20-cv-05823-EJD Plaintiffs, 9 ORDER REMANDING CASE v. 10 Re: Dkt. No. 29 KE “JASON” WANG, et al., 11 Defendants. 12 13 The People of the State of California (the “State”) and County of Santa Clara (the 14 “County” and together with the State, “Plaintiffs”) brought this public nuisance action against 15 Defendants Ke “Jason” Wang, Chunyan “Cathy” Ge, Woodside Capital LLC, Walnut Venture 16 LLC, and Morgan Venture LLC (collectively, “Defendants”) in the Superior Court of the State of 17 California for the County of Santa Clara (the “Superior Court”). On August 17, 2020, Defendants 18 filed a Notice of Removal in this Court. On August 25, 2020, Plaintiffs filed a Motion to Remand 19 the case to Superior Court. For the reasons stated below, the Court sua sponte remands the case to 20 the Superior Court. 21 I. Background 22 Plaintiffs allege that Defendants have created or allowed a myriad of public nuisances on 23 five separate properties (the “Properties”) in unincorporated Morgan Hill in Santa Clara County. 24 Plaintiffs allege that Defendants illegally converted four of the Properties from protected 25 agricultural land into illegal, polluted junkyards, trucking facilities, and RV parks. In particular, 26 Plaintiffs allege that Defendant has graded prime agricultural land and caused severe and 27 potentially irreversible damage to the topsoil by paving it with gravel and base rock, installed 1 unsafe electrical systems, built and altered structures without permits, failed to comply with fire 2 codes, and stored disabled vehicles and hazardous materials. Plaintiffs allege that Defendants 3 violated multiple County Zoning Ordinances, grading provisions, building provisions, state codes, 4 environmental health provisions, and fire protection provisions of the County Ordinance Code. 5 Plaintiffs filed their Complaint in the Superior Court on July 9, 2020. Dkt. No. 2-1. On 6 July 24, 2020, Plaintiffs filed an Ex Parte Motion for a Restraining Order, requesting that the court 7 temporarily restrain Defendants from maintaining the alleged public nuisances on the Properties. 8 Dkt. No. 3. Defendants filed opposition briefs on July 27, 2020. Dkt. Nos. 8, 8-1, 8-2. The 9 Honorable Peter H. Kirwan held an ex parte hearing on July 28, 2020, after which he granted 10 Plaintiffs’ application in full and issued a temporary restraining order (“TRO”). Dkt. No. 8-3. 11 Judge Kirwan further issued an Order to Show Cause Regarding a Preliminary Injunction and 12 scheduled a hearing for September 8, 2020. Ibid. The TRO remains in effect until September 8, 13 2020. 14 On August 13, Defendants filed a Notice of Removal in the Superior Court. They later 15 filed a Notice of Removal in this Court on August 17, 2020. On August 25, 2020, Plaintiffs filed a 16 Motion to Remand in this Court. Dkt. No. 29. That motion is scheduled to be heard on November 17 12, 2020. On August 31, 2020, Plaintiffs filed an Administration Motion to Extend the Temporary 18 Restraining Order Pending This Court’s Decision on Plaintiffs’ Motion to Remand. Dkt. No. 30. 19 The Administrative Motion indicated that Defendants intend to oppose that motion. Ibid. 20 II. Legal Standard 21 “Federal courts are courts of limited jurisdiction” and may only hear cases falling within 22 their jurisdiction. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). 23 Generally, a defendant may remove a civil action filed in state court if the action could have been 24 filed originally in federal court. 28 U.S.C. § 1441. The removal statutes are construed 25 restrictively so as to limit removal jurisdiction. Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 26 100, 108-09 (1941). The Ninth Circuit recognizes a “strong presumption against removal.” Gaus 27 v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (internal quotation marks omitted). Any doubts 1 as to removability should be resolved in favor of remand. Matheson v. Progressive Specialty Ins. 2 Co., 319 F.3d 1089, 1090 (9th Cir. 2003). 3 The burden is on the removing defendant to establish the basis for the federal court’s 4 jurisdiction. Shizuko Nishimoto v. Federman-Bachrach & Assocs., 903 F.2d 709, 712 (9th Cir. 5 1990). When plaintiffs raise a factual attack on the defendants’ jurisdictional allegations, the 6 defendants “must support [their] allegations with competent proof.” Leite v. Crane Co., 749 F.3d 7 1117, 1122 (9th Cir. 2014). In doing so, Defendants must prove by a preponderance of the 8 evidence that the jurisdictional bases are satisfied. See id. (citing Valdez v. Allstate Ins. Co., 372 9 F.3d 1115, 1117 (9th Cir. 2004)). 10 A federal court has an independent duty to ascertain its jurisdiction and may remand a case 11 sua sponte for lack of subject matter jurisdiction. 28 U.S.C. § 1447(c) (“If at any time before final 12 judgment it appears that the district court lacks subject matter jurisdiction, the case shall be 13 remanded.”); see also Gaus, 980 F.2d at 566. 14 III. Discussion 15 Defendants removed this case on the basis of diversity jurisdiction, citing 28 U.S.C. § 16 1332(a)(3). A federal court has diversity jurisdiction over “all civil actions where the matter in 17 controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between . . 18 . citizens of different States.” 28 U.S.C. § 1332(a). The rule requires complete diversity; every 19 plaintiff must be diverse from every defendant. Hunter v. Philip Morris USA, 582 F.3d 1039, 20 1043 (9th Cir. 2009). “[A]n LLC is a citizen of every state of which its owners/members are 21 citizens.” Johnson v. Columbia Props. Anchorage, LP, 437 F.3d 894, 899 (9th Cir. 2006). A 22 court ordinarily looks to the face of the complaint to determine whether diversity of citizenship 23 exists. Miller v. Grgurich, 763 F.2d 372, 373 (9th Cir. 1985). 24 Defendants claim to be citizens of, and to be domiciled in, the People’s Republic of China. 25 Defendants further assert that the only members of the LLC defendants are citizens of the People’s 26 Republic of China. Defendants thus assert that there is complete diversity because Plaintiffs are 27 citizens of California. Plaintiffs argue in their Motion to Remand that Defendants are domiciled in 1 California and that Defendants have failed to provide evidence to the contrary. 2 Regardless of where Defendants are located, Defendants’ assertion that Plaintiffs are 3 || citizens of California is incorrect as a matter of law. “Public nuisance actions are .. . brought on 4 || the People’s behalf.” People of the State of Cal. v. Purdue Pharma L.P., No. SACV 14-1080-JLS 5 (DFMx), 2014 WL 6065907, at *2 (C.D. Cal. Nov. 12, 2014). Thus, Plaintiffs bring this public 6 || nuisance action on behalf of the People of the State of California and the real party in interest is 7 the State itself. See id. at *2 (granting plaintiff State of California’s motion to remand and holding 8 it was the real party in interest in action brought by the Offices of County Counsel for both Orange 9 County and Santa Clara County); People ex rel. Gallo v. Acuna, 14 Cal. 4th 1090, 1109, 60 Cal. 10 || Rptr. 2d 277, 929 P.2d 596 (Cal. 1997) (noting that public nuisance actions are brought to 11 vindicate “the community’s exercise and enjoyment of rights common to the public”); People v. 12 || Lim, 18 Cal. 2d 872, 87 (Cal. 1941) (noting that such actions are “on behalf of the state”). 13 A state is not a citizen of itself and thus cannot be party to a diversity action. Fifty Assocs. 14 v. Prudential Ins. Co., 446 F.2d 1187, 1191 (9th Cir. 1970). Because the State of California is the 15 real party in interest in this nuisance action, diversity jurisdiction does not exist in this matter. 16 || Defendants do not assert any other grounds for removal jurisdiction. Because the court does not 3 17 have subject-matter jurisdiction over this case, sua sponte remand is appropriate. 18 IV. Conclusion 19 The case shall be remanded to Superior Court for lack of federal subject-matter 20 || jurisdiction. Plaintiffs’ pending Motion to Remand (Dkt. No. 29) and Administrative Motion 21 (Dkt. No. 30) are TERMINATED as moot. 22 IT IS SO ORDERED. 23 Dated: September 1, 2020 24 EDWARD J. DAVILA 25 United States District Judge 26 27 28 || Case No.: 5:20-cv-05823-EJD ORDER REMANDING CASE