Dollaga v. Specialized Loan Servicing LLC
- Jacquelyn Corley
- 3:20-cv-07472
- U.S. District Court · Northern District of California
- 6
In Dollaga v. Specialized Loan Servicing LLC, Judge Corley remanded the case because it raised only state-law claims and denied dismissal as moot.
Judith Dollaga’s case was returned to Alameda County Superior Court. The defendants did not obtain federal jurisdiction, their motion to dismiss was denied as moot, and no attorneys’ fees were awarded to Dollaga.
What happened
In Dollaga v. Specialized Loan Servicing LLC, Judith Dollaga sued in Alameda County Superior Court over the servicing of her home loan, asserting nine state-law claims. The defendants moved the case to federal court, arguing that the complaint raised a federal question because one claim referred to the federal Fair Debt Collection Practices Act.
The court rejected that argument because a reference to the federal law within a claim under California’s Rosenthal Fair Debt Collection Practices Act did not create federal jurisdiction. The court also declined to consider the defendants’ alternative diversity-jurisdiction argument because they had not included it in their notice of removal. The court denied Dollaga’s request for attorneys’ fees because the defendants’ removal argument was not objectively unreasonable.
Judge Jacquelyn Corley granted Dollaga’s motion to remand, sending the action back to Alameda County Superior Court. The court denied the defendants’ motion to dismiss as moot because the federal court lacked jurisdiction.
The detailed version
- Dollaga v. Specialized Loan Servicing LLC · No. 3:20-cv-07472
- Jacquelyn Corley
- Dec. 11, 2020
Background
Judith Dollaga filed the action in Alameda County Superior Court on August 31, 2020. The complaint asserted nine claims under state law concerning the servicing of her home loan: breach of contract, breach of the implied covenant of good faith and fair dealing, intentional interference with contract, unfair business practices under California Business and Professions Code section 17200, fraud, negligence, false promise, negligent misrepresentation, and violation of the Rosenthal Fair Debt Collection Practices Act.
Specialized Loan Servicing LLC and Gulf Harbor Investments Corporation removed the action to federal court. Their notice of removal relied on federal-question jurisdiction under 28 U.S.C. § 1331, asserting that the complaint alleged claims arising under the federal Fair Debt Collection Practices Act. The defendants later moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which concerns whether a complaint states a legally sufficient claim. Dollaga moved to remand, meaning to send the case back to state court.
Federal-Question Jurisdiction
The court explained that federal-question jurisdiction ordinarily must appear from the face of the complaint. Dollaga’s complaint pleaded only state-law causes of action. Although the Rosenthal Act claim referred to and incorporated some requirements and remedies from the federal Fair Debt Collection Practices Act, the court held that this reference did not create federal-question jurisdiction. The court relied on consistent Ninth Circuit district-court decisions rejecting federal jurisdiction based merely on such a reference.
The defendants also argued in their opposition to remand that diversity jurisdiction supported removal. The court did not consider that additional basis because the defendants had not amended their notice of removal within the 30-day period to add it. The court therefore concluded that federal subject-matter jurisdiction was lacking.
Attorneys’ Fees
Dollaga requested attorneys’ fees under 28 U.S.C. § 1447(c), which allows a court to award certain costs and expenses resulting from an improper removal. The court declined to award fees. Although it found the defendants’ jurisdictional arguments unpersuasive, it concluded that the arguments were not objectively unreasonable under the circumstances.
Disposition
The court vacated the scheduled hearing, granted Dollaga’s motion to remand, and remanded the action to Alameda County Superior Court. It denied the defendants’ motion to dismiss as moot because the federal court lacked jurisdiction. The order was issued by Judge Jacquelyn Scott Corley.
Read the full 6-page opinion on CourtListener, the free public archive maintained by the Free Law Project.