Avalonbay Communities, Inc. v. Larosa

Background

Avalonbay Communities, Inc. filed an unlawful-detainer case against Owen Larosa in Santa Clara County Superior Court. Larosa removed the case to federal court on May 20, 2024. He claimed that federal-question jurisdiction existed because the CARES Act completely preempted state law.

Jurisdiction analysis

Federal courts have limited subject-matter jurisdiction, meaning they may hear only cases authorized by federal law. A case generally may be removed from state court only if the federal court could have heard it originally. Federal-question jurisdiction ordinarily must appear from the plaintiff’s own claim; a federal defense usually is not enough.

The court explained that complete preemption is a narrow exception. In a limited group of cases, federal law can replace a state-law claim so completely that the claim is treated as federal and may be removed. But the court noted that ordinary federal preemption usually does not permit removal.

The court concluded that Larosa had raised only potential federal defenses under the CARES Act. He had not shown that Avalonbay’s complaint itself arose under that Act. The court cited other federal decisions remanding unlawful-detainer cases where defendants relied on the CARES Act without showing that the plaintiff’s complaint was based on it.

Order

The court ordered Larosa to address the jurisdictional deficiency in writing by June 28, 2024. Avalonbay could reply by July 5, 2024. The order stated that failure to respond could result in a recommendation for remand. It also cautioned that a remand order could require payment of costs and expenses, including attorney’s fees, caused by the removal.

The opinion is an order to show cause; it does not itself state that the case was remanded. The court entered the order on June 18, 2024, through Nathanael M. Cousins, United States Magistrate Judge.