Catamount Properties 2018, LLC v. Paed

Background

Catamount Properties 2018, LLC filed a state-court lawsuit against Cecille Q. Paed in July 2019. The lawsuit asserted one claim for unlawful detainer. In October 2019, the state court entered a default judgment for Catamount. About two months later, Paed filed a notice seeking to remove the state-court case to federal court. Catamount moved to send the case back to state court. Paed did not oppose the motion.

The court vacated the hearing and decided the motion based on the written submissions. It noted that the removal might have been untimely because the complaint was filed in July 2019 and federal law generally gives a defendant 30 days after receiving the initial pleading to remove a case. The court also discussed authority stating that removal generally is not possible after a state court has entered a final judgment. But the court said it did not need to definitively decide either issue.

Reasons for the Ruling

The court held that removal was improper for independent jurisdictional reasons. A defendant generally may remove a state-court case only if the federal district court would have had original jurisdiction over it.

For diversity jurisdiction, the amount in controversy generally must exceed $75,000, and the parties must be completely diverse. Catamount’s complaint identified damages of $6,250 per month beginning around June 29, 2019. The court found that Paed had not shown that the amount in controversy exceeded $75,000. The court also stated that, even if the amount and complete-diversity requirements were satisfied, Paed appeared to be a California citizen and therefore could not remove based on diversity jurisdiction under the provision the court cited.

For federal-question jurisdiction, the federal issue generally must appear on the face of the plaintiff’s complaint. Catamount asserted only a state-law unlawful-detainer claim and no federal claim. The court held that Paed could not create federal-question jurisdiction by relying on a federal defense. It also stated that a federal counterclaim would not create federal-question jurisdiction.

Disposition

Judge Edward M. Chen granted Catamount’s motion to remand. The clerk was ordered to remand the case to the state court from which it had been removed and to close the federal file. The order disposed of Docket No. 5.