Next Petroleum LLC v. Ramirez

Background

Next Petroleum LLC filed an unlawful-detainer action against Steven Ramirez and Titans Auto Detailing LLC in the Superior Court of California for Santa Clara County. The complaint alleged that the defendants possessed premises at 1025 S. Winchester Blvd., San Jose, California. The complaint identified Next Petroleum as a California limited liability company.

Ramirez removed the case to the U.S. District Court for the Northern District of California, asserting diversity jurisdiction under 28 U.S.C. § 1332(a)(1). After the court ordered the parties to explain why the case should not be sent back to state court, Ramirez said that he resided in California but was moving his business and personal residence to Nevada and intended to live there permanently. He did not state Titans Auto’s citizenship. He also asserted, without supporting evidence or a calculation, that the claims likely exceeded the $75,000 jurisdictional threshold. Ramirez separately argued that his anticipated counterclaims under the Fair Housing Act and Title VI of the Civil Rights Act raised federal questions.

Diversity Jurisdiction

The court explained that diversity jurisdiction requires complete diversity—each plaintiff must be a citizen of a different state from each defendant—and an amount in controversy exceeding $75,000, excluding interest and costs. The party seeking removal bears the burden of proving that federal jurisdiction exists.

The court found that Ramirez failed to prove complete diversity. He did not identify Titans Auto’s domicile, which the court held was fatal to his diversity argument. The court also concluded that Ramirez remained a California citizen when the lawsuit was filed. His statement that he was in the process of moving to Nevada did not establish a new domicile because he had not shown both physical presence in Nevada and an intention to remain there permanently. Because Next Petroleum was also treated as a California citizen, complete diversity was lacking.

The court separately found that Ramirez failed to prove that the amount in controversy exceeded $75,000. His statement that the claims likely surpassed the threshold was conclusory and unsupported. The court noted that Next Petroleum argued the amount would not exceed $10,000 because it was not seeking attorney’s fees and the dispute arose from a verbal, month-to-month rental agreement.

Federal-Question Jurisdiction

The court rejected Ramirez’s argument that his proposed federal counterclaims created federal-question jurisdiction. Federal-question jurisdiction generally must appear on the face of the plaintiff’s properly pleaded complaint. The complaint did not mention the Fair Housing Act or Title VI, and federal jurisdiction cannot be based on an actual or anticipated counterclaim, even if that counterclaim might be legally viable.

Disposition

The court held that the defendants failed to meet their burden of showing that removal was proper. It remanded the case to state court for lack of subject-matter jurisdiction, ordered the clerk to transmit the case to state court, and closed the federal file.