Opinion
No. C 12-0135 RS
05-23-2012
MICHAEL T. O'BRIEN, et al., Plaintiffs, v. AURORA LOAN SERVICES, LLC, et al., Defendants.
ORDER RE JURISDICTIONAL ISSUE
Defendants removed this action from Contra Costa County Superior Court, asserting diversity of citizenship. There is no dispute, however, that defendant Cal-Western Reconveyance Corporation is a citizen of California, and that therefore removal jurisdiction would be lacking unless it was fraudulently joined or its presence in this litigation otherwise can be disregarded. Even in the absence of a motion to remand, the Court has an obligation to ensure that subject matter jurisdiction exists prior to reaching any issue going to the merits. See Valdez v. Allstate Ins. Co., 372 F.3d 1115, 1116 (9th Cir. 2004).
Assertions like those made by Aurora here as to why Cal-Western does not defeat diversity have been rejected in other similar cases. See, e.g. Albert v. Wells Fargo Bank, N.A. 2012 WL 1213718 (N.D.Cal., April 11, 2012); Garnett v. Aurora Loan Services, LLC, 2012 WL 1440920 (C.D.Cal., April 25, 2012). The party asserting the fraudulent joinder bears the burden of proof, and remand must be granted unless the defendant can show that there is no possibility that the plaintiff could prevail on any cause of action it brought against the non-diverse defendant. See Levine v. Allmerica Fin. Life Ins. & Annuity Co., 41 F.Supp.2d 1077, 1078 (C.D.Cal.1999). "The strong presumption against removal jurisdiction means that the defendant always has the burden of establishing that removal is proper." Gaus v. Miles, 980 F.2d 564, 566 (9th Cir.1992) (internal quotations omitted). "Courts should resolve doubts as to removability in favor of remanding the case to state court." Id.
In light of this issue, the hearing on the pending motion to dismiss and cross-motions for summary judgment is vacated. No later than June 1, 2012, defendants shall file a supplemental brief, not to exceed 15 pages, addressing the question of whether this action should be remanded to state court for lack of removal jurisdiction. Plaintiffs may file a response, also not to exceed 15 pages, no later than June 8, 2012. The matter will then be taken under submission. In the event the case is not remanded, the motions to dismiss and for summary judgment will then either be reset for hearing or decided without oral argument, as may appear appropriate at that juncture. IT IS SO ORDERED.
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RICHARD SEEBORG
UNITED STATES DISTRICT JUDGE