Keading v. Keading

Background

Kenton Keading removed a dispute from the Contra Costa County Superior Court’s Probate Division to the U.S. District Court for the Northern District of California. He claimed that the federal court had authority because the case raised federal constitutional issues under the federal-question statute. He also asserted that the state court had lacked subject-matter and personal jurisdiction. Earth Island Institute, Inc. purported to join the removal, but the court said it saw no clear indication that the company had properly joined as a defendant.

The state proceeding began when Hilja Keading filed a petition concerning the Keading Family Trust. The petition sought to remove Kenton Keading from the trust and asserted state-law claims involving elder abuse, fraud, and intentional interference with an expected inheritance. It also involved claims under California Probate Code sections 850 and 859 concerning property allegedly taken from the trust. The state court appointed a professional fiduciary as successor trustee, ordered that trustee to have immediate possession of the elder Keadings’ residence, and later found Kenton Keading liable for elder abuse. The state court had entered judgment before the removal.

Jurisdictional standards

The court explained that a defendant may generally remove a state case only if the federal court has diversity jurisdiction or federal-question jurisdiction. The defendant who removes the case bears the burden of establishing federal jurisdiction, and federal courts strictly interpret the removal statute because they have limited authority.

For diversity jurisdiction, the opposing parties must be citizens of different states, every plaintiff must be a citizen of a different state from every defendant, and the amount in controversy must exceed $75,000. For a corporation, citizenship includes its state of incorporation and the state containing its principal place of business, meaning its main center of direction and control.

Federal-question jurisdiction generally requires a federal issue to appear on the face of the plaintiff’s own complaint or petition. A federal defense or federal counterclaim ordinarily does not create federal-question jurisdiction.

The court also discussed two possible limits on jurisdiction. The probate exception generally prevents federal courts from taking control of property held by a state probate court or administering an estate. The Rooker-Feldman doctrine generally prevents lower federal courts from acting as appellate courts over state-court judgments. The court noted uncertainty about whether that doctrine applies in the same way when a case is removed from state court.

Application and order

The court concluded that the state-court petition did not present a federal question on its face. It also said that the filings did not make clear whether the requirements for diversity jurisdiction were satisfied. Even if those requirements were met, the court said the probate exception or the Rooker-Feldman doctrine might still prevent federal jurisdiction because the dispute involved trust assets and challenges to the state probate judge’s handling of the case.

The court therefore ordered Kenton Keading to show cause—meaning to explain—why the case should not be remanded to the Contra Costa County Superior Court for lack of subject-matter jurisdiction. It set July 12 for his opening brief, July 19 for Hilja Keading’s response, and July 24 for an optional reply. It also converted the existing August 10 hearing into a show-cause hearing instead of a hearing on the pending motion to vacate the state court’s judgment. The opinion did not itself state that the case was remanded or finally decide the jurisdiction issue.