United States District Court, D. Nevada
ORDER PLAINTIFF'S MOTION TO REMAND (ECF NO.
RICHARD F. BOULWARE, II UNITED STATES DISTRICT JUDGE.
this Court comes Plaintiff / Counterdefendant Hollyvale
Rental Holdings, LLC (“Hollyvale”)'s Motion
to Remand (ECF No. 39). For the reasons stated below, the
Motion to Remand is DENIED.
November 22, 2016, Hollyvale filed a Complaint in the Eighth
Judicial District Court of Clark County, Nevada. (ECF No
1-2). Hollyvale filed a First Amended Complaint in the state
court on December 9, 2016. (ECF No. 1-5). Hollyvale brought
the following causes of action: (1) quiet title, against all
Defendants; (2) declaratory relief, against all Defendants;
and (3) injunctive relief, against Federal National Mortgage
Association and Quality Loan Service Corporation. Defendant
Federal National Mortgage Association (“Fannie
Mae”) filed a Petition for Removal on December 14,
2016. (ECF No. 1). Fannie Mae asserted in the Petition:
“The ground for this removal is federal question
jurisdiction over claims brought against Fannie Mae. Fannie
Mae owns the loan secured by the first Deed of Trust recorded
against the subject property and is the beneficiary of record
of the Deed of Trust. Pursuant to 28 U.S.C. 1331,
‘[t]he district courts shall have original jurisdiction
of all civil actions arising under the Constitution, laws, or
treaties of the United States.' Fannie Mae's federal
corporate charter confers federal question jurisdiction over
claims brought against Fannie Mae. Lightfoot v. Cendant
Mortg. Corp., 769 F.3d 681 (9th Cir. 2014).” On
January 3, 2017, Fannie Mae filed an Answer and Counterclaim.
(ECF No. 6). In the Counterclaim, Fannie Mae asserted the
following causes of action: (1) declaratory relief under 12
U.S.C. § 4617(j)(3); (2) quiet title under 12 U.S.C.
§ 4617(j)(3); (3) declaratory relief under the Fifth and
Fourteenth Amendments; (4) quiet title under the Fifth and
Fourteenth Amendments; (5) permanent and preliminary
injunction; and (6) unjust enrichment. Hollyvale filed an
Answer to the Counterclaim on January 12, 2017. (ECF No. 7).
August 21, 2017, Hollyvale filed the instant Motion to
Remand. (ECF No. 39). Fannie Mae filed its Response on
September 5, 2017. (ECF No. 43). Hollyvale filed its Reply on
September 8, 2017. (ECF No. 44). On August 23, 2017, the
Court entered a minute order staying the case pending a
decision on a question certified to the Nevada Supreme Court,
and setting a hearing on the Motion to Remand. (ECF No. 41).
Also on August 23, Hollyvale filed its Second Amended
Complaint, adding Red Rock Financial Services and Villas at
Terra Linda Homeowners Association as Defendants. (ECF No.
42). On October 6, 2017, the Court held a hearing on the
matter and took the motion under submission. (ECF No. 55).
U.S.C. § 1441(a) grants federal district courts
jurisdiction over state court actions that originally could
have been brought in federal court. “Removal and
subject matter jurisdiction statutes are strictly construed,
and a defendant seeking removal has the burden to establish
that removal is proper and any doubt is resolved against
removability.” Hawaii ex rel. Louie v. HSBC Bank
Nevada, N.A., 761 F.3d 1027, 1034 (9th Cir. 2014)
(citation and quotation marks omitted).
Federal Question Jurisdiction
district court has “original jurisdiction of all civil
actions arising under the Constitution, laws, or treaties of
the United States.” 28 U.S.C. § 1331. An action
“arises under” federal law when “federal
law creates the cause of action.” Merrell Dow
Pharm. Inc. v. Thompson, 478 U.S. 804, 808 (1986). But
even where a claim finds its origins in state rather than
federal law, the Supreme Court has identified a
“special and small category” of cases in which
federal question jurisdiction still exists. Empire
Healthchoice Assurance, Inc., v. McVeigh, 547 U.S. 677,
699 (2006). Federal jurisdiction over a state law claim may
lie if a federal issue is: (1) necessarily raised, (2)
actually disputed, (3) substantial, and (4) capable of
resolution in federal court without disrupting the
federal-state balance approved by Congress. See Grable
& Sons Metal Prods., Inc. v. Darue Eng'g &
Mfg., 545 U.S. 308, 314 (2005) (explaining that the
“the question is, does a state-law claim necessarily
raise a stated federal issue, actually disputed and
substantial, which a federal forum may entertain without
disturbing any congressionally approved balance of federal
and state judicial responsibilities.”). Grable
does not provide a per se “test” for federal
question jurisdiction. However, the presence of all four
Grable factors suggests that federal jurisdiction is
proper because there is a “serious federal interest in
claiming the advantages thought to be inherent in a federal
forum, ” which can be vindicated without disrupting
Congress's intended division of labor between state and
federal courts. Id. at 313 (citations omitted).
Initial Grounds for Removal
Petition for Removal, Fannie Mae asserted as the grounds for
removal the Ninth Circuit's decision in Lightfoot v.
Cendant Mortg. Corp., 769 F.3d 681 (2014). In that case,
the Ninth Circuit held that the “sue-and-be-sued”
clause of 12 U.S.C. § 1723a(a) (“the Fannie Mae
charter”) grants federal courts jurisdiction over cases
in which Fannie Mae is a party. Lightfoot, 769 F.3d
at 683. The statute specifically allows Fannie Mae to
“in its corporate name, to sue and to be ...