Wells Fargo Bank, N.A. v. Robinson

Background

Wells Fargo’s case arose from its foreclosure of a home in which Defendant Russell A. Robinson possessed a four percent interest. During the foreclosure proceedings, Defendant Equaan D. Smith conveyed that interest to Robinson, who was her attorney. Wells Fargo later brought state-law claims for declaratory relief, cancellation of an instrument, quiet title, and slander of title. The parties agreed to resolve the action, and the Alameda County Superior Court entered a stipulated judgment in May 2022.

After the defendants were unable to repurchase the property, Wells Fargo sought to enforce the stipulation in state court. Robinson opposed that effort and moved to set aside and vacate the state-court judgment. He removed the case to federal court after a state-court tentative ruling, and the federal court remanded the case because it lacked subject-matter jurisdiction. Robinson then filed a second notice of removal on the morning of a rescheduled state-court hearing on his motion.

Wells Fargo moved to remand the case, moved to dismiss Robinson’s supplemental counterclaim and first amended supplemental counterclaim, and asked the court to prevent Robinson from filing further notices of removal.

Remand

The court held that federal-question jurisdiction did not exist. Federal-question jurisdiction generally requires a federal issue to appear on the face of the plaintiff’s properly pleaded complaint. Wells Fargo’s complaint asserted only state-law claims.

The court rejected Robinson’s argument that the dispute involved a substantial federal issue concerning possession of real property. The court concluded that Wells Fargo’s claims did not fit the narrow exception allowing federal jurisdiction over certain state-law claims that necessarily raise substantial and disputed federal issues.

The court also held that Robinson’s supplemental counterclaim could not create removal jurisdiction. The counterclaim was filed after removal, and a counterclaim cannot ordinarily serve as the basis for federal-question removal jurisdiction under the well-pleaded complaint rule.

Because there was no federal removal jurisdiction, the court granted the motion to remand and sent the case to the Alameda County Superior Court. The court did not need to decide Wells Fargo’s additional arguments that Robinson had waived removal or that his removal notice contained procedural defects.

Motions to Dismiss

The court denied the motions to dismiss without prejudice because it had determined that it lacked subject-matter jurisdiction. The order does not decide the merits of the claims or counterclaims.

Order to Show Cause

The court considered Wells Fargo’s request to restrict future removals. It explained that federal courts may enter narrowly tailored pre-filing orders against vexatious litigants, but only after providing notice and an opportunity to respond, creating an adequate record, making substantive findings of harassment or frivolousness, and tailoring the order to the specific conduct.

The court stated that Robinson had twice removed the same underlying action on the same jurisdictional basis, that the court had already found the basis improper, and that the record indicated an intent to disrupt the state-court litigation and impede enforcement of the stipulated judgment. The court also noted that Robinson was a disbarred attorney and that his statements at oral argument left open the possibility of another removal.

Judge Jacqueline Scott Corley therefore ordered Robinson to show cause by February 27, 2024, why he should not be prohibited from removing the underlying state-court case again without prior federal-court approval. The court warned that failure to respond could result in entry of a vexatious-litigant order. The order itself did not yet impose that prohibition.