Opinion
Case No. 5:14-cv-02457 HRL
07-14-2014
NGA INVESTMENT, LLC, Plaintiff, v. REUBEN BERONILLA, MARIA V. BERONILLA, and DOES 1-5, inclusive, Defendants.
ORDER THAT CASE BE REASSIGNED
TO A DISTRICT JUDGE; ORDER
FINDING AS MOOT APPLICATION TO
PROCEED IN FORMA PAUPERIS
REPORT AND RECOMMENDATION
THAT PLAINTIFF'S MOTION FOR
REMAND AND SANCTIONS BE
GRANTED
This is the fourth time defendants Reuben and Maria Beronilla have removed this unlawful detainer action from the Santa Clara County Superior Court, despite prior orders from three different judges telling them that there is no federal question or diversity jurisdiction over this matter. They also seek leave to proceed in forma pauperis (IFP). Plaintiff moves for an order remanding this action to state court, as well as an order imposing sanctions—i.e., a pre-filing order prohibiting defendants from removing this case without first obtaining the court's permission. Defendants have filed a written opposition, maintaining that they "properly removed the action to this Court on the basis of diversity jurisdiction and because the amount in controversy exceeds $75,000." (Dkt. 8 at 1). The matter was deemed submitted on the papers without oral argument. (Dkt. 7). For the reasons stated below, the undersigned deems the IFP application moot and recommends that plaintiff's motion for remand and for sanctions be granted.
See NGA Investment, LLC v. Beronilla, Case No. 5:14-cv-01357 PSG (Dkt. 11); NGA Investment, LLC v. Beronilla, Case No. 5:14-cv-01842 BLF (HRL) (Dkt. 4 and 7); and NGA Investment, LLC v. Beronilla, Case No. C14-cv-02227 PSG (Dkt. 7 and 9).
A. Defendants' IFP Application
A court may authorize the commencement of a civil action in forma pauperis ("IFP") if the court is satisfied that the applicant cannot pay the requisite filing fees. 28 U.S.C § 1915(a)(1). In evaluating such an application, the court should "gran[t] or den[y] IFP status based on the applicant's financial resources alone and then independently determin[e] whether to dismiss the complaint on the grounds that it is frivolous." Franklin v. Murphy, 745 F.2d 1221, 1226-27 n.5 (9th Cir. 1984). A court may dismiss a case filed without the payment of the filing fee whenever it determines that the action "(i) is frivolous or malicious; (ii) fails to state a claim on which relief may be granted; or (iii) seeks monetary relief against a defendant who is immune from such relief." 28 U.S.C. § 1915(e)(2)(B)(i)-(iii).
Here, as in previous cases, only Reuben Beronilla filed a financial affidavit. That affidavit is identical to one he filed in an earlier iteration of the Beronillas' removals and which this court found insufficient. (See Case No. 5:14-cv-01840BLF (HRL), Dkt. 2 and 4). The affidavit is ambiguous in that Mr. Beronilla indicates that he currently is employed, but fails to provide his gross and net salary information. (Dkt. 2 at 1). He goes on, however, to suggest that the date of his last employment was October 13, 2013. (Id. at 2). Additionally, while Mr. Beronilla continues to state, under penalty of perjury, that the instant action does not raise claims that have been presented in other lawsuits, this is the fourth time they have removed the same unlawful detainer action here. As this court previously ruled, the undersigned might have, under different circumstances, required Reuben Beronilla to re-submit a complete application and required Maria Beronilla to file a separate financial affidavit. However, defendants' IFP application is deemed moot because, for the reasons discussed below, this court concludes that there is no federal subject matter jurisdiction anyway.
B. Plaintiff's Motion for Remand
Removal to federal court is proper where the federal court would have original subject matter jurisdiction over the complaint. 28 U.S.C. § 1441. The removal statutes are strictly construed against removal and place the burden on the defendant to demonstrate that removal was proper. Moore-Thomas v. Alaska Airlines, Inc., 553 F.3d 1241, 1244 (9th Cir. 2009) (citing Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992)). Additionally, the court has a continuing duty to determine whether it has subject matter jurisdiction. Fed. R. Civ. P. 12(h). A case must be remanded to the state court if it appears at any time before final judgment that the court lacks subject matter jurisdiction. 28 U.S.C. § 1447(c).
As the Beronillas repeatedly have been told:
There is no federal question jurisdiction because the complaint contains no claim arising under federal law. See Vaden v. Discovery Bank, 129 S. Ct. 1262, 1272 (2009) (A claim "arises under" federal law if, based on the "well-pleaded complaint rule," the plaintiff alleges a federal claim for relief). Allegations in a removal notice or in a response to the complaint cannot provide this court with federal question jurisdiction.
Nor is there any basis for diversity jurisdiction. Federal district courts have jurisdiction over civil actions in which the matter in controversy exceeds the sum or value of $75,000 (exclusive of interest and costs) and is between citizens of different states. 28 U.S.C. §1332. In their opposition, the Beronillas insist that diversity jurisdiction exists "because the amount in controversy exceeds $75,000." (Dkt. 8 at 1). However, the undersigned previously pointed out why that cannot be the case: plaintiff's complaint indicates that the amount in controversy does not exceed $10,000. (See Case No. 5:14-cv-01842 BLF (HRL), Dkt. 4, 7). Moreover, defendants have not established that the amount in controversy exceeds $75,000—nor is it apparent that they can do so. Unlawful detainer actions involve the right to possession alone, not title to the property. So, the fact that the subject property may be worth more than $75,000 is irrelevant. MOAB Investment Group, LLC v. Moreno, No. C14-0092EMC, 2014 WL 523092 at *1 (N.D. Cal., Feb. 6, 2014); Maxwell Real Estate Investment LLC v. Bracho, No. C12-02774RMW, 2012 WL 2906762 at *1 (N.D. Cal., July 13, 2012). In any event, the record presented indicates that defendants are California citizens (see Dkt. 1-1, Section III), and they previously have been told that as California defendants, they are prohibited from removing the unlawful detainer action to this court. 28 U.S.C. § 1441(b)(2) (stating that an action may not be removed on the basis of diversity "if any of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought."); Spencer v. U.S. Dist. Ct., 393 F.3d 867, 870 (9th Cir. 2004) ("It is thus clear that the presence of a local defendant at the time removal is sought bars removal.").
See Case No. 5:14-cv-01357 PSG (Dkt. 11); Case No. 5:14-cv-01842 BLF (HRL) (Dkt. 4 and 7)).
Plaintiff's motion for remand should be granted.
C. Plaintiff's Motion for Sanctions
There being no basis for federal jurisdiction over plaintiff's unlawful detainer action, the continued removal of this case was and is improper. Indeed, the Beronillas were warned that continued attempts to remove this matter may result in sanctions. (See Case No. 5:14-cv-01842BLF, Dkt. 4 and 7). Plaintiff now requests an order imposing sanctions—namely, a pre-filing order prohibiting them from ever removing this action again without a court order authorizing the removal.
As discussed below, Judge Grewal has also issued an order finding defendants' third removal to be frivolous and directing them to show cause why they should not be sanctioned. (See Case No. 5:14-cv-02227 PSG, Dkt. 9). That matter remains pending.
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"Federal courts have the inherent power 'to regulate the activities of abusive litigants by imposing carefully tailored restrictions under the appropriate circumstances,'" including the issuance of pre-filing orders. Bridgewater v. Hayes Valley Ltd. Partnership, No. 10-03022 CW, 2011 WL 635268 at *4 (N.D. Cal., Feb. 11, 2011) (quoting DeLong v. Hennessey, 912 F.2d 1144, 1147 (9th Cir.1990)). Pre-filing orders are rarely used and "cannot issue merely upon a showing of litigiousness." Moy v. United States, 906 F.2d 467, 470 (9th Cir. 1990). Nevertheless, "district courts 'bear an affirmative obligation to ensure that judicial resources are not needlessly squandered on repeated attempts by litigants to misuse the courts.'" Bridgewater, 2011 WL 635268 at *4 (quoting O'Loughlin v. Doe, 920 F.2d 614, 618 (9th Cir.1990)). And, "'[f]lagrant abuse of the judicial process cannot be tolerated because it enables one person to preempt the use of judicial time that properly could be used to consider the meritorious claims of other litigants." Molski v. Evergreen Dynasty Corp., 500 F.3d 1047, 1057 (9th Cir. 2007) (quoting De Long, 912 F.2d at 1148)). In determining whether a pre-filing order should issue, courts must (1) give the litigant notice and an opportunity to be heard; (2) compile and adequate record for review; (3) make substantive findings about the frivolous or harassing nature of the litigant's filings; and (4) narrowly tailor any resulting order to fit the specific vice encountered. Id.
The Beronillas have been given adequate notice. The docket reflects that plaintiff served its motion on defendants. Moreover, that motion is virtually identical to the one plaintiff previously filed and served in the Beronillas' third removal action. (See Case No. 5:14-cv-02227 PSG, Dkt. 5). Defendants filed an opposition, evidencing that they had notice of both the instant motion and the undersigned's order directing them to respond to the motion in writing. An opportunity to be heard does not require an oral or evidentiary hearing, and due process is satisfied by the opportunity to brief the issue. Molski, 500 F.3d at 1058-59 (citing Pac. Harbor Capital, Inc. v. Carnival Air Lines, Inc., 210 F.3d 1112, 1118 (9th Cir 2000)).
Defendants' litigation history establishes a troubling record of repeated removals of the same unlawful detainer action, in apparent disregard of the orders issued by no less than three judges of this district:
• Case No. 5:14-cv-01357 PSG: Defendants filed the first removal notice on March 25, 2014, two days before plaintiff says that the unlawful detainer action was set for trial. Plaintiff moved to remand. There is no indication that defendants filed any opposition to that motion, and they made no appearance at the motion hearing. (Dkt. 10). On April 23, 2014, Judge Grewal granted plaintiff's motion for remand, specifically telling defendants that the complaint contained no federal claim and that, as California defendants, the Beronillas could not remove the case based on
diversity. (Dkt. 11).
• Case No. 5:14-cv-01842 BLF (HRL): Meanwhile, on April 22, 2014 (one day before Judge Grewal issued his remand order in the first removal action), the Beronillas filed a second removal notice as to the same unlawful detainer case. The matter originally was assigned to this court, which issued a Report and Recommendation (R&R) on April 24 for remand to state court. (Dkt. 4). The R&R—which again advised defendants that there was no basis for federal question or diversity jurisdiction and also warned the Beronillas that further attempts to remove the same matter may result in sanctions---was fully adopted by Judge Freeman on May 12, 2014, and the case was remanded. (Dkt. 7).
• Case No. 5:14-cv-02227 PSG: Two days later, on May 14, 2014, the Beronillas filed a third removal notice as to the same unlawful detainer action. Plaintiff moved for remand and asked for an order imposing sanctions in the form of a pre-filing order. (Dkt. 5). Finding this third attempt at removal to be frivolous, Judge Grewal denied defendants' IFP application and directed them to pay the requisite filing fee. (Dkt. 7). Defendants evidently did not comply with that order. And, on May 28, Judge Grewal issued an order remanding the case and directing defendants to show cause why they should not be sanctioned for removing the unlawful detainer case for the third time without justification. (Dkt. 9). The docket indicates that defendants never responded to that show cause order, and the deadline for their response has passed.
• Case No. 5:14-cv-02457 HRL: On May 28, 2014 (the same day Judge Grewal issued his order to show cause in the third removal action), the Beronillas filed a fourth removal notice as to the same unlawful detainer case, resulting in the instant action currently assigned to this court.
The Beronillas' serial duplicative removals are frivolous and harassing. As demonstrated by the court's records, defendants have repeatedly removed the same unlawful detainer action despite being told by three different judges that there is no basis whatsoever for federal jurisdiction. Defendants made minimal effort (or no effort) to respond to plaintiff's motions for remand and sanctions. Nor did they respond to Judge Grewal's order to show cause in the third removal case. That conduct, coupled with the timing of defendants' removal notices, suggest that defendants continue to remove this same unlawful detainer case---not because they actually believe removal to be proper---but because they seek to avoid trial and judgment in the state court where this action belongs. Unlawful detainer cases are meant to be processed in an expedited manner. Bank of New York Mellon v. Brewer, No. C12-03179 RMW, 2012 WL 3904342 at *4 (N.D. Cal., Sept. 12, 2012) (citing Cal. Code Civ. Proc. § 1179a). Yet, plaintiff's unlawful detainer action remains pending, and plaintiff's counsel avers that he has been forced to continue the trial six times due to defendants' repeated removals. (Dkt. 5-1, Paris Decl. ¶ 7). Defendants' unfounded removal notices have required plaintiff to spend time and resources in filing motions to remand. They have impaired the state court's ability to properly manage its cases. And, they have wasted the limited resources of this court—judicial time that could be used to consider the meritorious claims of other cases that properly are here. The Beronillas' filings therefore have had significant disruptive effect. See Brewer, 2012 WL 3904342 at *4 (concluding that defendant's three removals of the same unlawful detainer action were frivolous and harassing). "Frivolous and harassing claims crowd out legitimate ones and need not be tolerated repeatedly by the district courts." O'Loughlin, 920 F.2d at 618.
In its motion, plaintiff expresses concern that monetary sanctions will do no good. Given their claim to be impecunious, it is unclear whether defendants would be in a position to pay any such sanctions. Moreover, Judge Grewal's prior order directing them to pay the filing fee in the third removal case went unheeded. And, as discussed above, defendants have continued to file one removal notice after the other, despite multiple court orders explaining that removal was improper and warning them that further removal attempts may be sanctioned. Defendants fail to address any of plaintiff's arguments that they have filed no less than four successive and unfounded removal notices as to the same unlawful detainer case. Thus, without an order deeming defendants to be vexatious litigants, it seems likely that they will continue to pursue baseless removals of the underlying unlawful detainer suit.
The requested pre-filing order is narrowly tailored to the underlying unlawful detainer action. See, e.g., Brewer, 2012 WL 3904342 at *4 (finding that a pre-filing review order was narrowly tailored because it concerned only the removal of a particular unlawful detainer action); Bridgewater, 2011 WL 635268 at *7 (finding that the requested pre-filing review order was narrowly tailored where the moving party objected only to the filing of frivolous lawsuits based on the same underlying unlawful detainer action).
Accordingly, the undersigned finds that defendants are vexatious litigants and that the issuance of a pre-filing order, while drastic, is warranted.
Because the parties have yet to consent to the undersigned's jurisdiction, this court ORDERS the Clerk of the Court to reassign this case to a District Judge. The undersigned RECOMMENDS that the newly assigned judge (1) grant plaintiff's motion for remand to the Santa Clara County Superior Court; (2) grant plaintiff's motion for sanctions; and (3) issue a pre-filing order instructing the Clerk of the Court not to accept any further removal filings pertaining to Santa Clara County Superior Court case number 114CV261245, unless defendants obtain and present a prior order from a judge of this district allowing them to file the removal papers.
The undersigned further RECOMMENDS that the pre-filing order provide as follows: "IT IS HEREBY ORDERED that before filing any further notices of removal of Santa Clara County Superior Court case number 114CV261245, Reuben Beronilla and Maria V. Beronilla must first apply to the court for, and obtain from the court, an order authorizing them to do so. They must attach the following documents to any such application: (1) a copy of Judge Lloyd's Report and Recommendation issued in this case, (2) a copy of this order, and (3) a copy of the proposed filing. The Clerk of the Court shall not accept for filing any further notices of removal of Santa Clara County Superior Court case number 114CV261245, unless defendants obtain and present a prior order from a judge of this district allowing them to file the removal papers."
Any party may serve and file objections to this Report and Recommendation within fourteen days after being served. Fed. R. Civ. P. 72.
__________
HOWARD R. LLOYD
UNITED STATES MAGISTRATE JUDGE
5:14-cv-02457-HRL Notice has been electronically mailed to: Daniel Thomas Paris parislaw1@msn.com 5:14-cv-02457-HRL Notice sent by U.S. Mail to: Reuben Beronilla
2904 Winwood Way
San Jose, CA 95148
Maria Beronilla
2904 Winwood Way
San Jose, CA 95148