Deutsche Bank National Trust C v. James Harding, Jr.

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
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No. 15-1442
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DEUTSCHE BANK NATIONAL TRUST CO.,
as Trustee for WaMu Mortgage Pass-Through Certificates Series 2005-AR11-Trust
v.
JAMES W. HARDING, JR., his heirs, devisees, and personal representatives
and his/her, their, or any of their successors in right, title and interest;
MRS. HARDING, wife of James W. Harding, Jr., her heirs, devisees, and
personal representatives and his/her, their, or any of their successors in
right, title and interest; JOHN OLMO, his heirs, devisees, and personal
representatives and his/her, their, or any of their successors in right, title
or interest; CARALEE OLMO, his wife, her heirs, devisees, and personal
representatives and his/her, their, or any of their successors in right,
title and interest; WINDING CREEK AT OLD TAPPAN
CONDOMINIUM ASSOCIATION INC.
James W. Harding, Jr.; John J. Olmo; Caralee Olmo,
Appellants
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On Appeal from the United States District Court
for the District of New Jersey
(D.C. Civ. No. 3-13-cv-02960)
Honorable Peter G. Sheridan, District Judge
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Submitted under Third Circuit LAR 34.1(a)
June 14, 2016
BEFORE: AMBRO, JORDAN, and GREENBERG, Circuit Judges
(Filed: July 22, 2016)
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OPINION*
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GREENBERG, Circuit Judge.
Plaintiff-appellee originally filed this foreclosure action in a New Jersey state
court, but defendants-appellants filed an answer with counterclaims and thereafter
removed the case to the District Court. Clearly, plaintiff did not object to the removal as
it did not move to remand the case to the state court. Ultimately, the parties filed cross-
motions for summary judgment and, after the District Court granted plaintiff’s motion
and denied defendants’ motion in a January 20, 2015 order, defendants appealed. We do
not reach the merits of the issues raised on this appeal because in examining the District
Court’s jurisdiction, see, e.g., In re Guild & Gallery Plus, Inc., 72 F.3d 1171, 1176 (3d
Cir. 1996), we conclude that the District Court lacked subject matter jurisdiction and
therefore the removal was improper. Accordingly, we will vacate the District Court’s
order on the summary judgment motions and will remand the case to that Court so that it,
in turn, can remand the case to the state court where it should have remained. See 28
U.S.C. § 1447(c).
Pursuant to 28 U.S.C. § 1441(a), “any civil action brought in a State court of
which the district courts of the United States have original jurisdiction, may be removed
by the defendant or the defendants, to the district court of the United States for the district
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*This disposition is not an opinion of the full court and pursuant to I.O.P. 5.7
does not constitute binding precedent.
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and division embracing the place where such action is pending.” The statute thus
authorizes the removal of a civil action from state court to federal court only “when the
state-court action is one that could have been brought, originally, in federal court.”
Lincoln Prop. Co. v. Roche, 546 U.S. 81, 81, 126 S.Ct. 606, 608 (2005). In their notice
of removal, defendants contended that this action originally could have been brought in a
federal court because “the resolution of Plaintiffs’ claims will require adjudication of
disputed questions of federal law.” (A407 (citing 28 U.S.C. § 1331)). Nevertheless, the
record on appeal and the parties’ briefs make clear that there is no federal question
jurisdiction in this matter. Moreover, the parties do not contend that there is diversity of
citizenship between the plaintiff and the defendants. Therefore, the case must be
remanded to the state court.
The Supreme Court has explained that a court determines if there is federal
question jurisdiction in removal cases by use of the well-pleaded complaint rule, which
provides that there is federal question jurisdiction only when the face of a properly
pleaded complaint asserts a federal question. Caterpillar, Inc. v. Williams, 482 U.S. 386,
392, 107 S.Ct. 2425, 2429 (1987). The face of the complaint in this case does not contain
a basis on which federal question jurisdiction may be predicated. Indeed, defendants,
now appellants, assert in their brief that the federal question on which they rely for
removal purposes “was presented . . . by way of a counterclaim that was filed by
Appellants in response to the state court foreclosure complaint . . . .” Appellants’ br. at 1;
(A441-44). But, as is well established, a federal question cannot be predicated on a
defense or a counterclaim. Vaden v. Discover Bank, 556 U.S. 49, 60, 129 S.Ct. 1262,
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1272 (2009); Holmes Grp., Inc. v. Vornado Air Circulation Sys., Inc., 535 U.S. 826, 830,
122 S.Ct. 1889, 1893 (2002); see also Oak Knoll Vill. Condo. Owners’ Ass’n v. Jaye,
No. 15-CV-5303, 2015 WL 4603715, at *2 (D.N.J. July 30, 2015) (“It is well-settled that
a federal question appearing in a counterclaim is insufficient to establish federal question
jurisdiction before this Court.”).
Inasmuch as the complaint in this case is a straightforward state-law foreclosure
complaint, it does not provide a basis for federal question jurisdiction and thus this action
could not have originally been brought in federal court. Consequently, it was not
removable under 28 U.S.C. § 1441(a). We recognize, of course, that the parties have
expended a considerable amount of time and resources litigating this case in the District
Court. Nevertheless, “subject-matter delineations must be policed by the courts on their
own initiative even at the highest level.” Ruhrgas AG v. Marathon Oil Co., 526 U.S.
574, 583, 119 S.Ct. 1563, 1570 (1999). Moreover, we have explained that “the party
asserting federal jurisdiction in a removal case bears the burden of showing, at all stages
of the litigation, that the case is properly before the federal court.” Frederico v. Home
Depot, 507 F.3d 188, 193 (3d Cir. 2007); see also Abels v. State Farm Fire & Cas. Co.,
770 F.2d 26, 29 (3d Cir. 1985) (explaining that a “lack of [subject matter] jurisdiction
would make any decree in the case void and the continuation of the litigation in federal
court futile”).
Thus, even though the parties have expressed a desire for us to permit this case to
remain in federal court, we cannot do so because there is not “a firm bedrock of
jurisdiction” for this case. Carlsberg Res. Corp. v. Cambria Sav. & Loan Ass’n, 554 F.2d
41254, 1256 (3d Cir. 1977). The case must be remanded to the state court from which it
was removed. See Steel Co. v. Citizens for a Better Env’t., 523 U.S. 83, 94, 118 S.Ct.
1003, 1012 (1998). Accordingly, we will vacate the judgment of the District Court and
will remand the case to that Court so that it can remand the case to the state court.
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