LVNV Funding LLC v. Hall ( 2019 )

1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 SOUTHERN DISTRICT OF CALIFORNIA 9 10 LVNV FUNDING LLC, Case No.: 19-cv-2099-GPC(RBB) 11 Plaintiff, ORDER SUA SPONTE REMANDING 12 v. CASE TO STATE COURT FOR LACK OF SUBJECT MATTER 13 MELINA C. HALL, and individual; and JURISDICTION DOES 1 through 10, inclusive, 14 Defendant. 15 16 17 On November 4, 2019, Defendant Melina C. Hall, proceeding pro se, filed a notice 18 of removal.1 (Dkt. No. 4.) Based on the reasoning below, the Court sua sponte remands 19 the case to state court for lack of subject matter jurisdiction. 20 Discussion 21 On September 10, 2019, Plaintiff LVNV Funding LLC filed a complaint against 22 Defendant Melina C Hall in the San Diego Superior Court for account stated and open 23 book account seeking damages in the amount of $5,456.78. (Dkt. No. 4 at 72.) On 24 November 4, 2019, Defendant filed a notice of removal asserting the Court’s diversity 25 26 1 On November 1, 2019, Melina Hall mistakenly filed her answer and counterclaim as a Complaint in 27 this Court. (Dkt. No. 1.) Three days later, she corrected her filing with a notice of removal. (Dkt. No. 28 4.) 1 and federal question jurisdiction based on allegations in her counterclaim. Her 2 counterclaim alleges violations of the TCPA3, FCRA4 and FDCPA5 and seeks statutory 3 damages in the amount of $84,000. (Dkt. No. 1.) Defendant claims that the Court has 4 subject matter jurisdiction over the case because her counterclaim alleges violations of 5 federal law and she seeks over $75,000. (Dkt. No. 4 at 2-3.) 6 “Federal courts are courts of limited jurisdiction.” Kokkonen v. Guardian Life Ins. 7 Co. of Am., 511 U.S. 375, 377 (1994). “It is to be presumed that a cause lies outside this 8 limited jurisdiction, and the burden of establishing the contrary rests upon the party 9 asserting jurisdiction.” Id. It is well-established that a federal court cannot reach the 10 merits of any dispute until it confirms that it retains subject matter jurisdiction to 11 adjudicate the issues presented. Steel Co. v. Citizens for a Better Environ., 523 U.S. 83, 12 94-95 (1988). 13 Federal subject matter jurisdiction may be based on (1) federal question 14 jurisdiction under 28 U.S.C. § 1331 or (2) diversity jurisdiction under 28 U.S.C. § 1332. 15 The complaint must establish either that federal law creates the cause of action or that the 16 plaintiff’s right to relief necessarily depends on the resolution of substantial questions of 17 federal law. Franchise Tax Board of Cal. v. Construction Laborers Vacation Trust for 18 Southern Cal., 463 U.S. 1, 10–11 (1983). Alternatively, a federal court may have 19 diversity jurisdiction over an action involving citizens of different states where the 20 amount in controversy exceeds $75,000. 28 U.S.C. § 1332. 21 The presence or absence of federal question jurisdiction “is governed by the ‘well- 22 pleaded complaint rule,’ which provides that federal jurisdiction exists only when a 23 federal question is presented on the face of plaintiff’s properly pleaded complaint.” 24 Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987). It is well settled that a “case may 25 not be removed to federal court on the basis of a federal defense . . . even if the defense is 26 27 3 Telephone Consumer Protection Act. 28 4 Fair Credit Reporting Act. 1 || anticipated in the plaintiff's complaint, and even if both parties concede that the federal 2 || defense is the only question truly at issue.” Id. at 393. Moreover, a counterclaim cannot 3 || be a basis for federal question jurisdiction under 28 U.S.C. § 1331. Holmes Grp., Inc. v. 4 || Vornado Air Circulation Sys., Inc., 535 U.S. 826, 831-32 (2002) (“allowing responsive 5 || pleadings by the defendant to establish ‘arising under’ jurisdiction would undermine the 6 || clarity and ease of administration of the well-pleaded-complaint doctrine, which serves as 7 ‘quick rule of thumb’ for resolving jurisdictional conflicts.”). The more than $75,000 8 |}amount in controversy must also be evident from the complaint and not counterclaim. 9 e.g., Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 10 || 2003). Here, Defendant improperly relies solely on the allegations in the counterclaim to 11 ||seek the Court’s diversity and federal question jurisdiction. Accordingly, Defendant has 12 || failed to demonstrate the Court has subject matter jurisdiction over the complaint and the 13 ||}case must be remanded to state court. 14 Conclusion 15 Based on the reasoning above, the Court SUA SPONTE remands the case to state 16 court. 17 IT IS SO ORDERED. 18 Dated: November 22, 2019 (2 opto Cs A / 19 Hon. Gonzalo P. Curiel 20 United States District Judge 21 22 23 24 25 26 27 28