PMI Waterford Park, LLC v. Carter

Background

PMI Waterford Park, LLC filed an unlawful-detainer action against Tommy Carter and Lisa Willis in Santa Clara County Superior Court on November 3, 2023. The opinion states that Carter and Willis were proceeding without lawyers. On January 4, 2024, they removed the case to the U.S. District Court for the Northern District of California, invoking federal-question jurisdiction.

The originally assigned magistrate judge issued an order asking why the case should not be returned to state court, noting that the court could not identify a basis for federal jurisdiction. Lisa Willis responded that the case should remain in federal court because federal COVID-era housing-relief funds were allegedly mishandled by opposing counsel and others. PMI Waterford Park then moved to remand, meaning to return the action to state court. The defendants did not oppose the motion by the deadline.

Court’s Analysis

Federal-question jurisdiction generally requires that a federal issue appear on the face of the plaintiff’s properly pleaded complaint. The court reviewed the state-court complaint and found that it asserted a single unlawful-detainer claim based solely on California law.

The court explained that the defendants did not identify a federal question in their notice of removal or response to the order to show cause. To the extent they argued that the unlawful-detainer case was defective because management had not properly applied federal housing assistance to their rent balance, the court held that an anticipated defense or counterclaim cannot create federal-question jurisdiction. The federal source of the housing assistance also did not convert the California eviction case into a federal case.

The court additionally considered diversity jurisdiction and concluded that it was unavailable because the parties were both California citizens and the amount in controversy was $10,000.

Ruling

The court found that no federal question appeared on the face of the complaint and that it therefore lacked subject-matter jurisdiction. Judge Haywood S. Gilliam, Jr. granted PMI Waterford Park’s motion to remand and remanded the action to Santa Clara County Superior Court.

The order also addressed the defendants’ application to proceed without paying filing fees. At the beginning, the court said it was terminating the application as moot; in the conclusion, it said the application was denied as moot. The Clerk was directed to close the federal case.