Roberto Modero v. Norada Equity, Inc.

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES – GENERAL

Case No. 8:25-cv-00574-DOC-KES Date: September 12, 2025

Title: Roberto Medero et al. v. Norada Capital Management et al.

PRESENT:

THE HONORABLE DAVID O. CARTER, JUDGE

Karlen Dubon Not Present

Courtroom Clerk Court Reporter

ATTORNEYS PRESENT FOR ATTORNEYS PRESENT FOR

PLAINTIFF: DEFENDANT:

None Present None Present

PROCEEDINGS (IN CHAMBERS): ORDER GRANTING PLAINTIFFS’

MOTION TO REMAND [52] AND

DENYING DEFENDANTS’ MOTION

TO AMEND NOTICE OF

REMOVAL [57]

Before the Court are Plaintiffs Roberto Medero and Triage Capital Management’s

Motion to Remand (“Mot. Remand”) (Dkt. 52) and Defendants Norada Capital

Management, Norada Fund Management, Norada Equity, Inc., Norada Capital

Ecommerce Fund I, Norada Capital Crypto Fund I, Norada Theatrical Productions,

Norada Real Estate Funding, Norada Capital Real Estate Fund I, Marco Santarelli,

Michael Johnson, Ronald Fossum, Jr., and Does 1 through 100’s Motion to Amend

Notice of Removal (“Mot. Amend”) (Dkt. 57) . The Court finds this matter appropriate

for resolution without oral argument. See Fed. R. Civ. P. 78; C.D. Cal. R. 7-15. After

considering the moving papers and the arguments made therein, the Court GRANTS

Plaintiffs’ Motion and DENIES Defendants’ Motion.

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I. BACKGROUND

A. Facts

This is a securities action. The following facts are taken from Plaintiffs’ First

Amended Complaint (“FAC”) (Dkt. 37). Plaintiffs allege nine causes of action against

Defendants Norada Capital Management (“Norada Capital”), Norada Fund Management,

Norada Equity, Inc., Norada Capital Ecommerce Fund I, Norada Capital Crypto Fund I,

Norada Theatrical Productions, Norada Real Estate Funding, Norada Capital Real Estate

Fund I, Marco Santarelli, Michael Johnson, Ronald Fossum, Jr., and Does 1 through 100

(collectively “Defendants”). See generally FAC.

In February 2023, Defendants began soliciting Plaintiffs for an investment through

misleading marketing materials that promised high interest returns and omitted key risks.

Id. ¶¶ 30-31. These marketing materials included fabricated statements on the

profitability and stability of the investments and fund portfolio, while omitting Defendant

Fossum’s prior conviction for misappropriation of funds and permanent bar by the SEC

from acting as a broker or investment advisor. Id. ¶¶ 24-25, 35-36. Further, Defendants

never provided Plaintiffs with a Private Placement Memorandum, a “fundamental

investment documentation” used for risk disclosure. Id. ¶ 39.

On October 17, 2023, Plaintiffs invested $200,000 into a promissory note (“Note”)

issued by Defendant Norada Capital. Id. ¶ 30. Defendants made payments on the Note

from November 1, 2023, through May 1, 2024. Id. ¶ 40. On June 20, 2024, Defendant

Santarelli emailed Plaintiffs to notify them that Defendant Norada Capital unilaterally

suspended distribution payments on all promissory notes. Id. Plaintiffs allege that

attempts to convert the Note to equity were unauthorized, unvalued, and unsupported by

a financial disclosure. Id. ¶ 47. Plaintiffs allege that they were unaware of Defendants’

misrepresentations and omissions and justifiably relied on Defendants to believe the

investment was secure and compliant. Id. ¶¶ 45-46.

Plaintiffs bring the following claims against Defendants: (1) Unqualified Sale of

Securities in Violation of Cal. Corp. Code § 25503; (2) Misleading Statements in

Violation of Cal. Corp. Code § 25501; (3) Sale by Unlicensed Broker-Dealer in Violation

of Cal. Corp. Code § 25501.5; (4) Negligent Misrepresentation; (5) Breach of Fiduciary

Duty; (6) Aiding and Abetting Under Cal. Corp Code §§ 25504, 25504.1; (7) Fraud; (8)

Fraudulent Business Acts in Violation of Cal. Bus. & Prof. Code § 17200, et seq.; and (9)

Set Aside Fraudulent Transfer of Assets. Id. ¶¶ 51-121.

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B. Procedural History

On December 18, 2024, Plaintiffs filed the Complaint against Defendants in

Orange County Superior Court. Notice of Removal (“NOR”) (Dkt. 1). The Complaint

alleged eleven causes of action, including violations of the Securities and Exchange Act.

See generally Complaint (“Compl.”) (Dkt. 1-10). By February 24, 2025, the Summons

and Complaint were served to each of the Defendants, excluding Defendants Johnson and

Fossum who were served separately. Not. at 3. On March 24, 2025, Defendants removed

the action to this Court asserting federal question jurisdiction and supplemental

jurisdiction. Id. at 2.

On June 11, 2025, Plaintiffs filed a First Amended Complaint (“FAC”) (Dkt. 37).

The FAC removed Plaintiffs’ two federal claims originally pled in the Complaint. See

generally FAC. On July 9, 2025, Plaintiffs filed a Motion to Remand (“Remand Mot.”)

(Dkt. 52). Defendants filed their Opposition to Plaintiffs’ Motion on August 15, 2025

(“Remand Opp.”) (Dkt. 58). Plaintiffs filed a Reply (“Remand Reply”) on September 2,

2025 (Dkt. 67).

On August 15, 2025, Defendants filed a Motion to Amend Notice of Removal

(“Amend. Mot.”) (Dkt. 57). Plaintiffs filed their Opposition to Defendants’ Motion on

August 25, 2025 (“Amend. Opp.”) (Dkt. 59). Defendants filed a Reply (“Amend. Reply”)

on September 1, 2025 (Dkt. 64).

II. LEGAL STANDARD

“If at any time before final judgment it appears that the district court lacks subject

matter jurisdiction, the case shall be remanded.” 28 U.S.C. § 1447(c). Removal of a case

from state court to federal court is governed by 28 U.S.C. § 1441, which provides in

relevant part that “any civil action brought in a State court of which the district courts of

the United States have original jurisdiction, may be removed . . . to the district court of

the United States for the district and division embracing the place where such action is

pending.” 28 U.S.C. § 1441. This statute “is strictly construed against removal

jurisdiction,” and the party seeking removal “bears the burden of establishing federal

jurisdiction.” Ethridge v. Harbor House Rest., 861 F.2d 1389, 1393 (9th Cir. 1988)

(emphasis added) (citations omitted).

Federal district courts have original jurisdiction over actions that present a federal

question or those based on diversity jurisdiction. See Wayne v. DHL Worldwide Express,

294 F.3d 1179, 1183 & n.2 (9th Cir. 2002). Federal district courts have federal question

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jurisdiction over “all civil actions arising under the Constitution, laws or treaties of the

United States.” 28 U.S.C. § 1331. Federal question jurisdiction is governed by the well-

pleaded complaint rule, which provides that the basis for federal jurisdiction must appear

on the face of the properly pleaded complaint, either because the complaint directly raises

an issue of federal law or because the plaintiff's “right to relief under state law requires

resolution of a substantial question of federal law in dispute between the

parties.” Franchise Tax Bd. of Cal. v. Constr. Laborers Vacation Trust for S. Cal., 463

U.S. 1, 13 (1983). “[A] case may not be removed to federal court on the basis of a federal

defense ..., even if the defense is anticipated in the plaintiff's complaint ....” Caterpillar

Inc. v. Williams, 482 U.S. 386, 393 (1987) (citation omitted).

If the court lacks subject matter jurisdiction, any action it takes is ultra vires and

void. See Gonzalez v. Crosby, 545 U.S. 524, 534 (2005); Steel Co. v. Citizens for a Better

Env’t, 523 U.S. 83, 94, 101–02 (1998). The lack of subject matter jurisdiction may be

raised at any time by either the parties or the court. Fed. R. Civ. P. 12(h)(3). If subject

matter jurisdiction is found to be lacking, the court must dismiss the action, id., or

remand pursuant to 28 U.S.C. § 1447(c). A court may raise the question of subject matter

jurisdiction sua sponte. See Snell v. Cleveland, Inc., 316 F.3d 822, 826 (9th Cir. 2002).

III. DISCUSSION

The Court will first assess the merits of Plaintiffs’ Motion to Remand. Then the

Court will turn to Defendants Motion to Amend and determine whether that will alter the

calculus in terms of whether this case should be remanded.

A. Motion to Remand

Usually, federal question jurisdiction is invoked when plaintiffs plead a cause of

action created by federal law. Grable & Sons Metal Products, Inc. v. Darue Engineering

& Manufacturing, 545 U.S. 308, 312 (2005). However, there is a “special” and “small”

category of cases in which federal-question jurisdiction will lie over state-law claims that

implicate significant federal issues. See id. A state-law claim “arises under” federal law

only if it “necessarily raise[s] a stated federal issue, actually disputed and substantial,

which a federal forum may entertain without disturbing any congressionally approved

balance of federal and state judicial responsibilities.” Id. at 314. In other words, “federal

jurisdiction over a state law claim will lie if a federal issue is: (1) necessarily raised, (2)

actually disputed, (3) substantial, and (4) capable of resolution in federal court without

disrupting the federal-state balance approved by Congress.” Gunn v. Minton, 568 U.S.

251, 258 (2013).

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Here, Plaintiffs’ initial complaint pled two federal causes of action under the

Securities Exchange Act. Compl. ¶¶ 36-46. Defendants’ Notice of Removal provided

only one basis for federal question jurisdiction: the presence of federal causes of action

under the Securities Exchange Act. NOR ¶¶ 1-4. However, after Defendants removed this

case, Plaintiffs filed a First Amended Complaint as a matter of right removing these two

federal causes of actions and leaving nine causes of action under California statutory and

common law. See FAC at 1-2 n.1. Thus, the basis for removal under the Notice of

Removal is no longer effective under the First Amended Complaint.

“If the complaint does not already disclose a sufficient factual basis for

jurisdiction, such facts must appear in the notice of removal.” Kanter v. Warner-Lambert

Co., 52 F. Supp. 2d 1126, 1129 (N.D. Cal. 1999). In addition, the Supreme Court recently

ruled that when a plaintiff amends the complaint after removal to eliminate any federal

law claims that originally permitted removal, a court loses jurisdiction. Royal Canin U. S.

A., Inc. v. Wullschleger, 604 U.S. 22, 30 (2025). “With the loss of federal-question

jurisdiction, the court loses as well its supplemental jurisdiction over the state claims.” Id.

Therefore, the Court does not have discretion to exercise supplemental jurisdiction over

the remaining state claims here and declines supplemental jurisdiction.

Here, the First Amended complaint “does not already disclose a sufficient factual

basis for jurisdiction,” see Kanter, 52 F. Supp. 2d at 112, and Plaintiffs “amend[ed] the

complaint after removal to eliminate any federal law claims that originally permitted

removal,” see Royal Canin, 604 U.S. at 30. Thus, the Court no longer retains jurisdiction

over the action and must remand the case, unless Defendants’ Motion to Amend the

Notice of Removal renders this calculus otherwise.

A. Motion to Amend

Defendants generally have 30 days after service to remove a case and state the

grounds for removal. 28 U.S.C. § 1446(a)-(b). After these 30 days, a notice of removal

“cannot be amended to add a separate basis for removal jurisdiction.” O'Halloran v.

Univ. of Washington, 856 F.2d 1375, 1381 (9th Cir. 1988). “However, a defendant may

amend the Notice of Removal after the thirty day window has closed to correct a

‘defective allegation of jurisdiction.’” ARCO Env't Remediation, L.L.C. v. Dep't of Health

& Env't Quality of Montana, 213 F.3d 1108, 1117 (9th Cir. 2000) (quoting 28 U.S.C. §

1653); see also 16 Moore's Federal Practice § 107.30[2][a][iv] (“[A]mendment may be

permitted after the 30–day period if the amendment corrects defective allegations of

jurisdiction, but not to add a new basis for removal jurisdiction.”).

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Here, Defendants’ original Notice of Removal provided only one basis for federal

question jurisdiction: Plaintiffs’ two federal causes of action under the under the

Securities Exchange Act. NOR ¶¶ 1-4. Now, Defendants seek to file an amended Notice

of Removal which provides a different basis for federal question jurisdiction: that the

litigation of Plaintiffs’ California causes of action will call for a determination of whether

the investments at issue qualify for an exemption under federal securities laws. Proposed

Amended NOR (“Prop. NOR”) (Dkt. 57-3). This is an entirely different basis for federal

question jurisdiction than the one put forth in the original Notice of Removal and thus

amendment will not be permitted.

Defendants’ citation to Good v. Google LLC is inapposite. No. 22-CV-05622-JSC,

2022 WL 17436482 (N.D. Cal. Dec. 6, 2022). In Good, the court stated that “[a]

defendant may amend its notice of removal to correct defective jurisdictional

allegations—such as the failure to specify a party's citizenship—so long as the basis for

removal (e.g., diversity jurisdiction) remains the same as in the original notice of

removal.” Id. at *4. The Good court’s reasoning is in line with this Court. There is only

one basis for diversity jurisdiction: that there is complete diversity and the amount in

controversy threshold has been met. In contrast, there are multiple bases under which

federal question jurisdiction may attach. Here, Defendants seek to change the basis of

removal from the pleading of a federal cause of action to the application the limited

Grable exception for Plaintiffs’ state law claims. Defendants’ complete pivot of basis—

or theory—is not contemplated under 28 U.S.C. § 1653, and the Court will not permit

such amendment. Good contemplates the curing of “defective jurisdictional

allegations”—such as perhaps a reference to wrong statute or missing element in an

already-pled theory. 2022 WL 17436482 at *4. The complete pivot Defendants seek to

effect here is not permitted.

The Court also declines to consider Defendants’ new federal question arguments

on the basis that they were raised in the remand briefing. Rader v. Sun Life Assur. Co. of

Canada, 941 F. Supp. 2d 1191, 1196 (N.D. Cal. 2013) (declining to consider new

arguments raised in motion to remand briefing).

In any case, the Court also concludes that Defendants’ proposed amendment

would be futile. As detailed above, the First Amended Complaint does not include any

remaining federal claims. Thus, the only way the Court will have jurisdiction over the

remaining claims is under the “special” and “small” category of cases that fall under the

limited Grable exception. 545 U.S. at 312, 314.

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Here, Plaintiffs’ claims arise under state, not federal, law. Nevertheless,

Defendants argue that “several of Plaintiffs’ state-law claims necessarily depend on

resolution of a federal question – whether Defendants are entitled to an exemption under

the federal securities laws pursuant to [SEC Rule 506 of SEC] Regulation D.” Amend.

Mot. at 5; Prop. NOR ¶ 7. Defendants contend that this issue applies to Plaintiffs’ first,

second, fourth, sixth, and seventh causes of action, but focus their efforts on the first

cause of action because they contend that is the best example. Amend. Mot. at 6-7;

Remand Opp. at 5, 14. The Court disagrees.

The critical issue here is whether a potential application of the National Securities

Markets Improvement Act (“NSMIA”) of 1996 to some of Plaintiffs’ claims provides for

federal question jurisdiction. See 15 U.S.C.S. § 77r. The NSMIA prohibits states from

requiring the registration or qualification of a “covered security,” if, among other things,

that security is exempt from registration under Regulation D. See id. Thus, if the

securities are exempt under Regulation D, the NSMIA applies and preempts California

state law. See Consol. Mgmt. Grp., LLC v. Dep’t of Corps., 162 Cal. App. 4th 598, 606

(2008).

However, “it is now settled law that a case may not be removed to federal court on

the basis of a federal defense, including the defense of pre-emption, even if the defense is

anticipated in the plaintiff's complaint, and even if both parties concede that the federal

defense is the only question truly at issue.” Caterpillar Inc. v. Williams, 482 U.S. 386,

393 (1987) (emphasis added). Here, the Court concludes that the securities at issue must

“actually qualify for a valid federal securities registration exemption in order to enjoy

NSMIA preemption.” Consol. Mgmt. Grp, 162 Cal. App. 4th at 608 (quoting Brown v.

Earthboard Sports USA, Inc., 481 F.3d 901, 910 (6th Cir. 2007)). Thus, Defendants bear

the burden of establishing that the securities at issue are exempt in order for NSMIA

preemption to apply.

This renders the NSMIA preemption argument an affirmative defense. Calise v.

Meta Platforms, Inc., 103 F.4th 732, 738 (9th Cir. 2024) (“The burden is always on the

party advancing an affirmative defense to establish its validity.” (cleaned up)). This also

lines up with caselaw specifically addressing NSMIA preemption. Consol. Mgmt. Grp.,

162 Cal. App. 4th at 607-09; Apollo Capital Fund LLC v. Roth Capital Partners, LLC,

158 Cal. App. 4th 226, 251-52 (2007). To say otherwise would essentially allow any state

securities defendant to remove their case to federal court by waving their hands and

claiming that NSMIA preemption applies. This would effectively strip state courts of any

jurisdiction over securities cases.

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In addition, the fact that Plaintiffs’ eighth claim for a violation of California’s

Unfair Competition Law can proceed on alternative theories, one of which references

federal law and others that do not, is of no consequence. See Lippitt v. Raymond James

Fin. Servs., Inc., 340 F.3d 1033, 1043 (9th Cir. 2003); Nevada v. Bank of America Corp.,

672 F.3d 661, 6775 (9th Cir. 2012).

Finally, it does not matter that the First Amended Complaint references federal

regulations in its allegations. See, e.g., FAC ¶¶ 25, 58. Mere references to federal law do

not transform state-law claims into federal law claims. Nevada v. Bank of Am. Corp., 672

F.3d 661, 674-675 (9th Cir. 2012).

IV. DISPOSITION

For the reasons set forth above, the Court hereby REMANDS this case to the

Orange County Superior Court. All pending motions and proceedings are hereby

VACATED.

The Clerk shall serve this minute order on the parties.

MINUTES FORM 11 Initials of Deputy Clerk: kdu

CIVIL-GEN