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Prather v. Insurance Services Offices, Inc.

United States District Court, D. Nevada

December 4, 2017




         Defendant Insurance Services Offices, Inc. (ISO) removed this case to federal court on September 14, 2017, invoking this court's diversity and federal question jurisdiction. ECF No. 1. Plaintiff Myesha Prather, appearing pro se, moves to remand the case to state court, disputing that this court can assert subject matter jurisdiction. ECF No. 12. Had Prather properly pleaded her Third Amended Complaint, no federal question would arise. And her newly-filed Fourth Amended Complaint drops the only purported federal claim. Moreover, because her claims do not plausibly suggest that over $75, 000 is at issue, this court cannot assert diversity jurisdiction. I therefore grant Prather's motion to remand.

         I. ANALYSIS

         "Only state-court actions that originally could have been filed in federal court may be removed to federal court by the defendant." Caterpillar Inc. v. Williams, 482 U.S. 386, 392, (1987). Federal courts are courts of limited jurisdiction. Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365, 374 (1978). "A federal court is presumed to lack jurisdiction in a particular case unless the contrary affirmatively appears." Stock West, Inc. v. Confederated Tribes of the Colville Res., 873 F.2d 1221, 1225 (9th Cir. 1989). "Federal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance." Gaits v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (citing Libhart v. Santa Monica Dairy Co., 592 F.2d 1062, 1064 (9th Cir. 1979)). Thus, courts "strictly construe the removal statute against removal jurisdiction." Id. "The 'strong presumption' against removal jurisdiction means that the defendant always has the burden of establishing that removal is proper." Id. Remand is required if the court lacks subject matter jurisdiction. 28 U.S.C. § 1447(c); see also Aguon-Schulte v. Guam Election Comm'n, 469 F.3d 1236, 1240 (9th Cir. 2006) ("[R]emand may be ordered either for lack of subject matter jurisdiction or for 'any defect' in the removal procedure.").

         A. Federal Question Jurisdiction.

         At the time ISO removed this case, Prather's Third Amended Complaint was the operative pleading. That pleading asserted 12 state-law causes of action and one claim purportedly arising under the federal Fair Credit Reporting Act. ECF No. 12. ISO contends this court has federal question jurisdiction because of that one brief reference to FCRA.

         On November 16, 2017, Prather filed a Fourth Amended Complaint. ECF No. 26. Although Prather did not seek court permission to do so, ISO consented to the filing in writing. See ECF No. 22 ("Plaintiff has represented that she will file a Fourth Amended Complaint by November 10, 2017. To avoid the unnecessary costs of responding to an inoperative complaint, Plaintiff agreed to Defendant's counsel's request to extend the time for Defendant to file its responsive pleading through and including November 30, 2017."); see also ECF No. 28 (stipulation for extension of time to respond to Fourth Amended Complaint). Thus, the Fourth Amended Complaint was properly filed under Federal Rule of Civil Procedure 15(a)(2).

         The Fourth Amended Complaint eliminates the purported FCRA claim. Because the only purported federal question has been dropped, I have discretion to remand. Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350 (1988) ("[W]hen the federal-law claims have dropped out of the lawsuit in its early stages and only state-law claims remain, the federal court should decline the exercise of jurisdiction by dismissing the case without prejudice.").

         Even if I were to disregard the Fourth Amended Complaint and consider only Prather's Third Amended Complaint, remand would be appropriate. In that pleading, Prather's Thirteenth Cause of Action, in totality, states: "(Fcra (sic) Violations) 19. Plaintiff restates all preceeding (sic) and subsequent allegations as though fully set forth herein." ECF No. 12 at 13. Although Prather was presumably referencing the federal Fair Credit Reporting Act, she made no reference to any particular statute. In her motion to remand, she admits that her Third Amended Complaint was not well-pleaded, and it was not her intent to assert a claim under the FCRA. Id. at 3. The entirety of that pleading confirms that.

         'The presence or absence of federal-question jurisdiction is governed by the 'well-pleaded complaint rule, ' which provides that federal 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 (emphasis added). See also, Gully v. First Nat"I Bank in Meridian, 299 U.S. 109, 113 (1936) (The federal issue cannot be "merely a possible or conjectural one . . . ."). One exception to the well-pleaded complaint rule is the artful-pleading doctrine: plaintiffs cannot "avoid removal jurisdiction by artfully casting their essentially federal law claims as state-law claims." Federated Dep'tStores, Inc. v. Moitie, 452 U.S. 394, 397 n. 2, (1981).

         Where it appears that the plaintiff may have carefully crafted her complaint to circumvent federal jurisdiction, courts "consider whether the facts alleged in the complaint actually implicate a federal cause of action." Mikulski v. Centerior Energy Corp., 501 F.3d 555, 561 (6th Cir. 2007). So too where, as here, the plaintiff appears to have incorrectly included a reference to a federal statute, the court should consider the facts alleged in the complaint to determine whether a federal cause of action truly exists.

         Prather's Third Amended Complaint alleges that ISO falsely accused her of being involved with an insurance fraud ring and similar wrongdoing. ECF No. 12 at 11. She asserts slander, libel, defamation, and other similar claims. She admits she did not intend to assert a claim under the FCRA, and her allegations, while not the most articulate, back that up. The allegations of a complaint filed by se plaintiff, "however inartfully pleaded are held to less stringent standards than formal pleadings drafted by lawyers." Hughes v. Rowe, 449 U.S. 5, 9 (1980) (quotations omitted). Had Prather properly pleaded her allegations and claims, no federal law would be implicated. That is confirmed by her subsequent Fourth Amended Complaint. Because her true causes of action do not arise under the Constitution, laws, or treaties of the United States, no federal question jurisdiction exists. 28 U.S.C. § 1331.

         B. Diversity Jurisdiction.

         "[I]n cases where a plaintiffs state court complaint does not specify a particular amount of damages, the removing defendant bears the burden of establishing, by a preponderance of the evidence, that the amount in controversy exceeds [$75, 000]. Under this burden, the defendant must provide evidence establishing that it is 'more likely than not' that the amount in controversy exceeds that amount." Sanchez v. Monumental Life Ins. Co.,102 F.3d 398, 404 (9th Cir. 1996). Broad allegations that the jurisdictional amount is met, "although attempting to recite some magical incantation, neither overcome[ ] the strong presumption against removal jurisdiction, nor satisf[y][the defendant's burden of setting forth, in the removal petition itself, the underlying facts supporting its assertion that the amount in controversy exceeds $75, 000." Abrego Abrego v. The Dow Chem. Co., 443 F.3d 676, 689 (9th Cir. 2006) (emphasis and quotation omitted); see also ...

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