Equity Trust v. Gillott ( 2022 )

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION 7 8 EQUITY TRUST, et al. Case No. 22-cv-07826-VKD 9 Plaintiffs, ORDER GRANTING APPLICATION TO PROCEED IN FORMA PAUPERIS v. 10 11 ORDER FOR REASSIGNMENT TO DISTRICT JUDGE; REPORT AND 12 JAMES JOHNSON GILLOTT, et al., RECOMMENDATION RE REMAND 13 Defendants. Re: Dkt. No. 3 14 15 Defendant Kathleen Gillott removed this unlawful detainer action from the Monterey 16 County Superior Court.1 She also seeks leave to proceed in forma pauperis (“IFP”). For the 17 reasons stated below, the undersigned grants the IFP application, but nonetheless recommends that 18 this matter be remanded to the state court for lack of federal subject matter jurisdiction. 19 A court may grant IFP status and authorize the commencement of a civil action if the court 20 is satisfied that the applicant cannot pay the requisite filing fees. 28 U.S.C § 1915(a)(1). In 21 evaluating an IFP application, the court should “gran[t] or den[y] IFP status based on the 22 applicant’s financial resources alone and then independently determin[e] whether to dismiss the 23 complaint on the grounds that it is frivolous.” Franklin v. Murphy, 745 F.2d 1221, 1226-27 n.5 24 (9th Cir. 1984), abrogated on other grounds by Neitzke v. Williams, 490 U.S. 319 (1989). A court 25 may dismiss a case filed without the payment of the filing fee whenever it determines that the 26 27 1 Ms. Gillott’s notice of removal states that all other defendants—James Johnson Gillott, Beau 1 action “(i) is frivolous or malicious; (ii) fails to state a claim on which relief may be granted; or 2 (iii) seeks monetary relief against a defendant who is immune from such relief.” 28 U.S.C. 3 § 1915(e)(2)(B)(i)-(iii). 4 The pending IFP application indicates that Ms. Gillott qualifies financially for IFP status. 5 The Court therefore will grant the IFP application. Even so, this action cannot proceed in this 6 court because there is no federal subject matter jurisdiction over this matter. 7 Removal to federal court is proper where the federal court would have original subject 8 matter jurisdiction over the complaint. 28 U.S.C. § 1441. The removal statutes are strictly 9 construed against removal and place the burden on the defendant to demonstrate that removal is 10 proper. Moore-Thomas v. Alaska Airlines, Inc., 553 F.3d 1241, 1244 (9th Cir. 2009) (citing Gaus 11 v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992)). Additionally, the Court has a continuing duty to 12 determine whether it has subject matter jurisdiction. Fed. R. Civ. P. 12(h). A case must be 13 remanded to the state court if it appears at any time before final judgment that the court lacks 14 subject matter jurisdiction. 28 U.S.C. § 1447(c). 15 Ms. Gillott fails to show that removal is proper based on any federal law. Federal courts 16 have original jurisdiction over civil actions “arising under the Constitution, laws, or treaties of the 17 United States.” 28 U.S.C. § 1331. A claim “arises under” federal law if, based on the “well- 18 pleaded complaint rule,” the plaintiff alleges a federal claim for relief. Vaden v. Discovery Bank, 19 556 U.S. 49, 60 (2009). Defenses and counterclaims asserting a federal question do not satisfy 20 this requirement. Id. Here, plaintiffs’ complaint presents a claim arising only under state law. It 21 does not allege any federal claims whatsoever. See Dkt. Nos. 1-1, 1-2. Although Ms. Gillott’s 22 notice of removal contends that plaintiffs’ unlawful detainer action is improper for a number of 23 reasons, allegations in a removal notice or in a response to the complaint cannot provide this Court 24 with federal question jurisdiction. See Vaden, 556 U.S. at 60. Accordingly, plaintiffs’ unlawful 25 detainer action does not arise under federal law. 26 This Court further finds that there is no basis for diversity jurisdiction. Federal district 27 courts have jurisdiction over civil actions in which the matter in controversy exceeds the sum or 1 U.S.C. § 1332. Unlawful detainer actions involve the right to possession alone, not title to the 2 || property. The fact that the subject property may be worth more than $75,000 is irrelevant. MOAB 3 Investment Group, LLC vy. Moreno, No. C14-0092 EMC, 2014 WL 523092 at *1 (N.D. Cal., Feb. 4 6, 2014); Maxwell Real Estate Investment LLC v. Bracho, No. C12-02774 RMW, 2012 WL 5 2906762 at *1 (N.D. Cal., July 13, 2012). Even assuming Ms. Gillott could establish that the 6 $75,000 threshold is satisfied, the record indicates that all of the defendants are “permanent 7 residents of California.” Dkt. No. 1 at 1. Thus, this action cannot be removed on the basis of 8 diversity. See 28 U.S.C. § 1441(b)(2) (stating that an action may not be removed on the basis of 9 || diversity “if any of the parties in interest properly joined and served as defendants is a citizen of 10 the State in which such action is brought.”); see also Spencer v. U.S. Dist. Ct., 393 F.3d 867, 870 11 (9th Cir. 2004) (“It is thus clear that the presence of a local defendant at the time removal is sought 12 || bars removal.”). 5 13 Based on the foregoing, the removal of this case was improper. Defendants are advised 14 || that future attempts to remove this matter may result in sanctions. 3 15 Because the parties have yet to consent to the undersigned’s jurisdiction, this Court 16 ORDERS the Clerk of the Court to reassign this case to a District Judge. The undersigned further 3 17 RECOMMENDS that the newly assigned judge remand the case to the Monterey County Superior 18 Court. Any party may serve and file objections to this Report and Recommendation within 19 fourteen days after being served. Fed. R. Civ. P. 72. 20 IT IS SO ORDERED. 21 Dated: December 12, 2022 22 VIRGINIA K. DEMARCH United States Magistrate Judge 25 26 27 28