“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.”
How later courts described this case
- “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.”
Written by the judges who cited it.
The opinion
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7 UNITED STATES DISTRICT COURT
8 SOUTHERN DISTRICT OF CALIFORNIA
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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,
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Defendant.
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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
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1 On November 1, 2019, Melina Hall mistakenly filed her answer and counterclaim as a Complaint in
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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
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27 3 Telephone Consumer Protection Act.
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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
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