Avalonbay Communities, Inc. v. Larosa

Background

AvalonBay Communities, Inc. brought an unlawful-detainer action against Owen LaRosa. LaRosa, who represented himself, removed the case from state court to the federal district court and invoked federal-question jurisdiction. He argued that because the property was a covered dwelling under the federal CARES Act, the action arose under the Act’s notice requirements, 15 U.S.C. § 9058(c), rather than California law.

Magistrate Judge Nathanael M. Cousins recommended remanding the case to state court for lack of subject-matter jurisdiction and declining to award attorney’s fees. The recommendation concluded that LaRosa was raising potential federal defenses under the CARES Act, and it also questioned whether the Act applied to the property. LaRosa objected, arguing that the CARES Act created an implied cause of action that completely preempted state law and that the property was covered by the Act. The opinion also states that LaRosa later filed a suggestion of bankruptcy, which automatically paused the case, and that the pause was terminated to allow AvalonBay to pursue remedies to obtain possession of the property.

Court’s Analysis

The court overruled LaRosa’s objection. It held that AvalonBay’s claim did not arise under the CARES Act because unlawful detainer is created by California law and LaRosa’s contention that AvalonBay failed to satisfy the Act’s notice requirements was a defense. The court explained that a federal question supporting removal cannot be supplied by a defense. It further stated that a federal right or immunity must be an essential element of the plaintiff’s claim and must appear from the face of the complaint.

Disposition

After independently reviewing the record, Judge Donato adopted Magistrate Judge Cousins’ report and recommendation. The court ordered the case remanded to the Superior Court of California for the County of Santa Clara. It terminated AvalonBay’s pending motions to remand as moot and declined AvalonBay’s request for attorney’s fees. This was a jurisdictional ruling about whether the case could remain in federal court; the opinion did not decide the underlying unlawful-detainer dispute.