Baldini Real Estate, Inc. v. Torres

BALDINI REAL ESTATE, INC., Plaintiff, v. ERMELIZA S. TORRES, Defendant.

Case No. 16-cv-06771-LB

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA San Francisco Division

December 20, 2016

ORDER GRANTING IN PART THE PLAINTIFF'S MOTION TO REMAND

Re: ECF No. 6

INTRODUCTION & BACKGROUND

This is an unlawful-detainer case removed by the defendant-possessor.¹ Baldini Real Estate, Inc. bought a piece of Daly City, California property in a foreclosure sale after Ermeliza Torres defaulted on the deed of trust.² Baldini served Ms. Torres with a three-day notice to quit.³ Ms. Torres, however, is still in possession of the property, and so Baldini filed an unlawful-detainer complaint in state court.⁴ Baldini demands damages of $100 per day from the notice-to-quitexpiration date (starting on October 3, 2016) through the date of judgment; so far, approximately $7,800.⁵

Ms. Torres then removed the case to this court.⁶ She asserts that removal was proper and that the court has federal-question subject-matter jurisdiction.⁷ But Baldini disagrees: it moves to remand the case because Mr. Torres did not comply with required removal procedures and the court lacks jurisdiction.⁸ Baldini also asks the court to declare Ms. Torres a vexatious litigant and impose sanctions.⁹

On Baldini's motion, the court moved the hearing date from January 5, 2017 to December 22, 2016.¹⁰ The deadline for Ms. Torres's opposition brief remained December 15, but she did not file one. Ms. Torres did, however, consent to the undersigned's jurisdiction.¹¹

The court can decide the matter without oral argument and vacated the hearing. See N.D. Cal. Civ. L.R. 7-1(b).¹² Because the court lacks subject-matter jurisdiction, the court remands the case to the Superior Court of California, County of San Mateo. The court denies Baldini's request to declare Ms. Torres a vexatious litigant and impose a prefiling order and sanctions.

ANALYSIS

1. Removal Was Improper Because the Court Does Not Have Subject-Matter Jurisdiction

1.1 Removal Jurisdiction Legal Standard

A defendant in state court may remove an action to federal court if the action could have been filed originally in federal court. 28 U.S.C. § 1441(b). The defendant has the burden of proving the basis for the federal court's jurisdiction, and, generally, "the removal statute is strictly construedagainst removal jurisdiction." Nishimoto v. Federman-Bachrach & Assocs., 903 F.2d 709, 712 n.3 (9th Cir. 1990); see also Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09 (1941).

Original jurisdiction may be based on diversity or a federal question. See Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987). For diversity jurisdiction, the opposing parties must be citizens of different states and the amount in controversy must exceed $75,000. 28 U.S.C. § 1332(a). There will be federal-question jurisdiction if the case "aris[es] under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331. The "well-pleaded complaint" rule requires a federal question to be presented on the face of the plaintiff's complaint at the time of removal for federal-question jurisdiction to exist. Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 63 (1987); Duncan v. Stuetzle, 76 F.3d 1480, 1485 (9th Cir. 1996). An actual or anticipated federal defense is not sufficient to confer jurisdiction. Franchise Tax Bd. of Cal. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 10 (1983); Hunter v. Phillip Morris USA, 582 F.3d 1039, 1042-43 (9th Cir. 2009). Similarly, federal-question jurisdiction cannot rest upon an actual or anticipated counterclaim. Vaden v. Discover Bank, 556 U.S. 49, 60 (2009). That said, a plaintiff may not defeat removal by omitting necessary federal questions from his or her complaint. Franchise Tax Bd. of Cal., 463 U.S. 1 at 22.

If there is a defect in the removal procedure or in the court's jurisdiction, the plaintiff may move to remand the case to state court. 28 U.S.C. § 1447(c).

1.2 The Court Lacks Diversity Jurisdiction

Ms. Torres does not claim that this case exhibits diversity jurisdiction.

Ms. Torres resides in California.¹³ She alleges that Baldini Real Estate is licensed to do business in the State of California and does business here.¹⁴ It is unclear if the parties are diverse but they probably are not. Moreover, because Ms. Torres lives in California, she is likely aCalifornia citizen and cannot remove a case from California state court on the basis of diversity jurisdiction. See 28 U.S.C. § 1441(b)(2).

In any event, the amount in controversy is not satisfied. In unlawful detainer actions, the right to possession of the property is contested, not title to the property, and the plaintiff may collect only damages that are incident to that unlawful possession. See Litton Loan Servicing, L.P. v. Villegas, No. C 10-5478 PJH, 2011 WL 204322, at *2 (N.D. Cal. Jan. 21, 2011) (citing Evans v. Superior Court, 67 Cal. App. 3d 162, 170 (1977)). Here, with damages accumulating at a rate of $100 per day beginning on October 3, 2016, (totaling approximately $7,800 to date), the amount in controversy is not satisfied.¹⁵ There is no diversity jurisdiction.

1.3 The Court Lacks Federal-Question Jurisdiction

Ms. Torres does invoke federal-question jurisdiction.¹⁶ The notice of removal states: "This court . . . has jurisdiction under 28 U.S.C. § 1331 pursuant to 12 U.S.C. § 2605.13."¹⁷ And in the notice of removal, Ms. Torres asserts that Baldini violated the Real Estate Settlement Procedures Act ("RESPA").¹⁸ But this does not confer federal jurisdiction: the complaint asserts only a claim for unlawful detainer.¹⁹ Unlawful detainer claims do not arise under federal law and, without more, the court lacks federal-question jurisdiction. See, e.g., GMAC Mortg., LLC v. Rosario, No. C 11-1894 PJH, 2011 WL 1754053, at *2 (N.D. Cal. May 9, 2011); Fed. Nat'l Mortg. Assoc. v. Lopez, No. C 11-00451 WHA, 2011 WL 1465678, at *1 (N.D. Cal. Apr. 15, 2011); Wescom Credit Union v. Dudley, No. CV 10-8203 GAF (SSx), 2010 WL 4916578, at *2 (C.D. Cal. Nov. 22, 2010). Ms. Torres's RESPA argument — whether raised as a defense or counterclaim — does not change this outcome. See Vaden, 556 U.S. at 60.* * *

The court does not have diversity or federal-question jurisdiction. The court therefore remands the case to the San Mateo County Superior Court.

2. The Court Denies Baldini's Request to Designate Ms. Torres as a Vexatious Litigant, to Require a Bond, and to Impose Sanctions

2.1 Vexatious Litigant and Prefiling Order

Baldini asks the court to declare Ms. Torres a vexatious litigant, pointing to California Civil Procedure Code section 391(b)(3)'s definition of a vexatious litigant as "a person who . . . [i]n any litigation while acting in propria persona, repeatedly files unmeritorious motions, pleadings, or other papers, conducts unnecessary discovery, or engages in other tactics that are frivolous or solely intended to cause unnecessary delay."²⁰ It asks for a prefiling order to prevent Ms. Torres from again removing the case.²¹

The district court has inherent power under the All Writs Act, 28 U.S.C. § 1651(a), to issue writs (such as the requested prefiling order) "necessary and appropriate" in aid of its jurisdiction to prevent litigants who file frivolous lawsuits from continuing to do so. See Molski v. Evergreen Dynasty Corp., 500 F.3d 1047, 1057 (9th Cir. 2007) (citing Weissman v. Quail Lodge Inc., 179 F.3d 1194, 1197 (9th Cir. 1999)).

"Flagrant abuse of the judicial process cannot be tolerated because it enables one person to preempt the use of judicial time that properly could be used to consider the meritorious claims of other litigants." De Long v. Hennessey, 912 F.2d 1144, 1148 (9th Cir. 1990). Nonetheless, "pre-filing orders should rarely be filed" because such orders could impose a "substantial burden on the free-access guarantee" under the First Amendment, which is "one of the most precious of the liberties safeguarded by the Bill of Rights." Ringgold-Lockhart v. Cnty. of Los Angeles, 761 F.3d 1057, 1061-62 (9th Cir. 2014) (internal citations omitted and quotations omitted). Prefiling orders are therefore an extreme remedy and "courts should not enter [them] with undue haste." Molski,500 F.3d at 1057 (citations omitted). "A court should enter a pre-filing order constraining a litigant's scope of actions in future cases only after a cautious review of the pertinent circumstances." Id.

Accordingly, "orders restricting a person's access to the courts must be based on adequate justification supported in the record and narrowly tailored to address the abuse perceived." De Long, 912 F.2d at 1149. A prefiling "injunction cannot issue merely upon a showing of litigiousness." Moy v. United States, 906 F.2d 467, 470 (9th Cir. 1990). "The plaintiff's claims must not only be numerous, but also be patently without merit." See id.

Before entering a prefiling order, district courts must comply with the procedural and substantive requirements set forth in De Long, 912 F.2d at 1147-48. See Ringgold-Lockhart, 761 F.3d at 1062. Under De Long, a district court must:

(1) give litigants notice and "an opportunity to oppose the order before it [is] entered"; (2) compile an adequate record for appellate review, including "a listing of all the cases and motions that led the district court to conclude that a vexatious litigant order was needed"; (3) make substantive findings of frivolousness or harassment; and (4) tailor the order narrowly so as "to closely fit the specific vice encountered."

Ringgold-Lockhart, 761 F.3d at 1062 (quoting De Long, 912 F.2d at 1147-48).

2.1.1 Notice

The litigant must be provided with an opportunity to oppose the order before it is entered. See De Long, 912 F.2d at 1147. "Due process requires notice and an opportunity to be heard." Id. (quoting In re Powell, 851 F.2d 427, 431 (D.C. Cir. 1988)).

Here, Baldini filed its motion and served Ms. Torres.²² Baldini initially noticed the motion's hearing date for January...