Opinion
Case No. 2:13-cv-01153-APG-PAL
03-25-2016
SFR INVESTMENTS POOL 1, LLC, Plaintiff, v. WELLS FARGO BANK, N.A., et al., Defendants.
ORDER REMANDING CASE TO STATE COURT FOR LACK OF SUBJECT MATTER JURISDICTION
This action originally was filed in Nevada state court. (Dkt. #1-2.) The complaint alleges that plaintiff SFR Investments Pool 1, LLC is a Nevada limited liability company, but it does not allege the citizenship of SFR's members. See Johnson v. Columbia Properties Anchorage, LP, 437 F.3d 894, 899 (9th Cir. 2006) (stating that "an LLC is a citizen of every state of which its owners/members are citizens"); see also, Americold Realty Trust v. Conagra Foods, Inc., --- S. Ct. ----, 2016 WL 854159, at *3-5 (Mar. 7, 2016) (stating that for diversity purposes, an unincorporated entity "possesses its members' citizenship").
Defendant Wells Fargo Bank, N.A. removed the case to this court based on diversity jurisdiction. In its removal petition, Wells Fargo asserted that it is a citizen of South Dakota and Delaware. Wells Fargo believes that defendants Sonja Palmer and Joseph Holmes are Nevada residents but Wells Fargo contends these two defendants were fraudulently joined because the homeowners association foreclosure sale would have extinguished their interests. However, Wells Fargo seeks to void that foreclosure sale, which may re-vest these defendants with an interest in the property. (Dkt. #88.) Thus, some question remains about whether these two defendants have an interest in the property.
Because the parties' citizenship was unclear, I ordered Wells Fargo to show cause why this action should not be remanded to state court. (Dkt. #97.) Wells Fargo responded that it does not oppose remand. (Dkt. #98.) As the party seeking to invoke this Court's jurisdiction, Wells Fargo bears the burden of establishing jurisdiction exits. See Naffe v. Frey, 789 F.3d 1030, 1040 (9th Cir. 2015). It has not done so. I therefore remand this action to state court.
Federal courts are courts of limited jurisdiction. Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365, 374 (1978). "A federal court is presumed to lack jurisdiction in a particular case unless the contrary affirmatively appears." Stock West, Inc. v. Confederated Tribes of the Colville Res., 873 F.2d 1221, 1225 (9th Cir. 1989). "Federal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance." Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (citing Libhart v. Santa Monica Dairy Co., 592 F.2d 1062, 1064 (9th Cir. 1979)). Thus, courts "strictly construe the removal statute against removal jurisdiction." Id. "The 'strong presumption' against removal jurisdiction means that the defendant always has the burden of establishing that removal is proper." Id. Remand is required if the court lacks subject matter jurisdiction. 28 U.S.C. § 1447(c); see also Aguon-Schulte v. Guam Election Comm'n, 469 F.3d 1236, 1240 (9th Cir. 2006) ("remand may be ordered either for lack of subject matter jurisdiction or for 'any defect' in the removal procedure").
Removal jurisdiction under 28 U.S.C. § 1441(a) gives federal district courts jurisdiction over "any civil action brought in a State court of which the district courts of the United States have original jurisdiction." Federal district courts have original jurisdiction over civil actions in diversity cases "where the matter in controversy exceeds the sum or value of $75,000" and where the matter is between "citizens of different States." 28 U.S.C. § 1332(a). "Section 1332 requires complete diversity of citizenship; each of the plaintiffs must be a citizen of a different state than each of the defendants." Morris v. Princess Cruises, Inc., 236 F.3d 1061, 1067 (9th Cir. 2001).
Here, Wells Fargo has not shown the citizenship of the plaintiff or of two of the defendants. Wells Fargo therefore has not established that removal based on diversity jurisdiction was proper. Consequently, I remand this case to state court. //// //// ////
IT IS THEREFORE ORDERED the case is remanded to the state court from which it was removed for all further proceedings. The Clerk of the Court is instructed to close this case.
DATED THIS 25th day of March, 2016.
/s/_________
ANDREW P. GORDON
UNITED STATES DISTRICT JUDGE