United States District Court, D. Oregon, Portland Division
OPINION AND ORDER
MICHAEL W. MOSMAN Chief United States District Judge.
14, 2013, a foreclosure case was brought against Plaintiffs
Tim and Deborah Shannon in Oregon state court (“the
foreclosure case”). The foreclosure case brought only
state-law claims against Mr. and Mrs. Shannon. On June 6,
2016, Mr. and Mrs. Shannon filed a case in this Court
(“the federal case”) against Bayview Loan
Servicing, LLC (“Bayview”) and JP Morgan Chase
Bank. In the Complaint  for the federal case, Mr. and Mrs.
Shannon claim I have subject matter jurisdiction based on
diversity and federal-question jurisdiction. Two days after
bringing the federal case, on June 8, 2016, Mr. and Mrs.
Shannon removed the foreclosure case to this Court under the
same case number for the federal case. On July 8, 2016,
Defendant Bayview filed a Motion to Remand  the
foreclosure case to state court. Mr. and Mrs. Shannon oppose
reasons explained below, I have determined that the
foreclosure case was improperly removed to federal court, and
I REMAND the case back to the Clackamas County Circuit Court.
defendant may remove to federal court only state-court
actions that could have originally been filed in federal
court. 28 U.S.C. § 1441(a) (2011); Caterpillar Inc.
v. Williams, 482 U.S. 386, 392 (1987). A case could have
originally been filed in federal court if the court has
diversity jurisdiction or federal-question jurisdiction over
the case. 28 U.S.C. § 1331 (1980); 28 U.S.C. § 1332
(2011); Caterpillar, 482 U.S. at 392. There is a
“strong presumption against removal, ” however,
and the defendant has the “burden of establishing that
removal is proper.” Geographic Expeditions, Inc. v.
Estate of Lhotka, 599 F.3d 1102, 1107 (9th Cir. 2010)
the notice of removal must “be filed within 30 days
after the receipt by the defendant . . . of a copy of the
initial pleading setting forth the claim for relief upon
which such action or proceeding is based.” 28 U.S.C.
§ 1446(b)(1) (2011). In addition, if the case is not
initially removable, “a notice of removal may be filed
within 30 days after receipt by the defendant . . . of a copy
of an amended pleading, motion, order or other paper from
which it may first be ascertained that the case is one which
is or has become removable.” 28 U.S.C. §
1446(b)(3) (2011). But, a case cannot be removed on the basis
of diversity jurisdiction “more than 1 year after
commencement of the action, ” unless the court finds
bad faith on the part of the plaintiff. 28 U.S.C. §
jurisdiction is generally determined from the face of the
complaint. Gould v. Mut. Life Ins. Co. of N.Y., 790
F.2d 769, 773 (9th Cir. 1986) (citation omitted). An action
is not removable based on diversity jurisdiction if the
action was originally brought in the forum state where one or
more of the defendants reside. 28 U.S.C. § 1441(b)(2);
Lively v. Wild Oats Mkts., Inc., 456 F.3d 933, 939
(9th Cir. 2006). This is known as the “forum defendant
rule.” Lively, 456 F.3d at 939. If a defendant
removes an action in violation of the forum defendant rule,
the action may be remanded to state court if the plaintiff
moves to remand the action within thirty days of its removal
to federal court. Id. at 940.
federal-question jurisdiction “exists only when a
federal question is presented on the face of the
plaintiff's properly pleaded complaint.”
Caterpillar, 482 U.S. at 392 (explaining that this
“rule makes the plaintiff the master of the claim,
” allowing her to “avoid federal jurisdiction by
exclusive reliance on state law”). Thus, in order for
this Court to have subject matter jurisdiction based on
federal-question jurisdiction, the federal question must be
presented by the plaintiff's complaint as it existed at
the time of removal by the defendant. Metro Ford Truck
Sales, Inc. v. Ford Motor Co., 145 F.3d 320, 326-27 (5th
Cir. 1998). A “federal question alleged in the
defendant's third-party claim does not, in and of itself,
confer jurisdiction upon the federal court” and
federal-question jurisdiction does not exist simply because a
“federal question has been raised as a matter of
defense or as a counterclaim.” Id. (citation
omitted); see also Burke v. Ortmayer, No.
CV-04-1610-HU, 2004 WL 2966915, at *3 (D. Or. Dec. 20, 2004).
subject matter jurisdiction is established, federal courts
may exercise supplemental jurisdiction over state claims
“that are so related to claims in the [federal] action
. . . that they form part of the same case or controversy
under Article III.” 28 U.S.C. § 1367(a) (1990).
But, federal courts “may decline to exercise
supplemental jurisdiction” if the state law claim
“substantially predominates over the claim or claims
over which the district court has original jurisdiction,
” or if “there are other compelling reasons for
declining jurisdiction.” 28 U.S.C. § 1367(c)
case, Bayview moves to remand the foreclosure case for two
reasons. First, Bayview argues that removal was untimely.
Second, Bayview argues that removal based on federal-question
jurisdiction was improper because there were no federal
claims brought in the state foreclosure case. Mr. and Mrs.
Shannon's response is a bit difficult to decipher. They
appear to argue that the claims alleged in the federal case
provide this court with federal-question jurisdiction over
the foreclosure case. In addition, they argue that their
removal of the foreclosure case is timely because they did so
within a year of Bayview's filing its motion for summary
judgment in state court. They argue that Bayview's motion
for summary judgment gave rise to federal claims. Finally,
they claim Bayview may not have standing to pursue the
foreclosure case in state court.
clear that Mr. and Mrs. Shannon removed the foreclosure case
more than a year after it was filed in state court. They do
not assert any bad faith on the part of the plaintiff in the
state court foreclosure case to surmount diversity
jurisdiction. Accordingly, removing the foreclosure case on
the basis of diversity jurisdiction was improper.
See 28 U.S.C. § 1446(c)(1) (2011).
equally clear that the plaintiff's complaint in the
foreclosure case asserted only state-law claims. Thus, there
were no federal claims on the face of that complaint. Indeed,
in the Amended Notice of Removal , Mr. and Mrs. Shannon
claim I have federal-question jurisdiction under 28 U.S.C.
§ 1331 because they “now assert federal
defenses” to the foreclosure case. They claim they
identified the federal defenses based on a motion for summary
judgment filed in state court. Federal defenses, however, do
not provide this Court with federal- question jurisdiction.
Even if Bayview's state-court motion for summary judgment
was the operative pleading for determining whether there were
federal issues in the case, those federal questions are
raised by Mr. and Mrs. Shannon in their defense against the
foreclosure case. Accordingly, I do not have subject matter
jurisdiction over the foreclosure case on the basis of
federal-question jurisdiction, and removing the foreclosure
case on that basis was improper.
extent Mr. and Mrs. Shannon assert that I have supplemental
jurisdiction over the foreclosure case pursuant to 28 U.S.C.
§ 1367, which they claim in the Amended Notice of
Removal , I do not agree. Here, the state-law foreclosure
case substantially predominates over the federal claims that
Mr. and Mrs. Shannon raise in the federal case. Further,
there are compelling reasons for declining supplemental
jurisdiction over the foreclosure case. Namely, Mr. and Mrs.
Shannon removed the case on the eve of trial, after it had
already progressed in state court for several years. The
timing of the federal case suggests that they filed it in
order to circumvent the fact that I did not otherwise have
subject matter jurisdiction over the foreclosure case.
Respect for the authority of state court compels ...