The People of the State of California v. Rish Investments, Inc.

[8] UNITED STATES DISTRICT COURT [9] CENTRAL DISTRICT OF CALIFORNIA [10] 11 THE PEOPLE OF THE STATE OF Case No.: CV 24-3276-CBM-(MRWx) CALIFORNIA, [12] ORDER RE: PLAINTIFF’S Plaintiff, 13 v. MOTION TO REMAND [14] [JS-6] 14 RISH INVESTMENTS, INC. et al., 15 Defendants. [17] 18 The matter before the Court is Plaintiff The People of the State of 19 California’s (“Plaintiff’s”) Motion to Remand. (Dkt. No. 14 (the “Motion”).) The 20 matter is fully briefed. (Dkt. Nos. 17, 18.) 21 I. BACKGROUND 22 On August 4, 2023, Plaintiff filed a complaint for abatement and injunction 23 with the Los Angeles Superior Court against Defendants Rish Investments, Inc., 24 Gazi Monirul Islam a/k/a Gazi M. Islam and Gazi Islam d/b/a New Gage Motel 25 (collectively, “Defendants”). (The People of the State of California v. Rish 26 Investments, Inc., Case No. 23STCV18514 (Los Angeles Super. Ct.).) The 27 Complaint asserts three causes of action: (1) violation of the Red Light 28 Abatement Law, Cal. Pen. Code §§ 11225 et seq.; (2) violation of Cal. Civ. Code 1 § 3479 et seq. (public nuisance); and (3) violation of California Unfair 2 Competition Law, Cal. Bus. & Prof. Code § 17204 . (Dkt. No. 1-1.) On 3 September 19, 2023, Defendant Rish Investments, Inc. (“Rish”) filed an Answer 4 to the Complaint in the Los Angeles Superior Court action. (See id.) On April 21, 5 2024, Defendant Rish removed this action on the basis of federal question 6 jurisdiction. (Dkt. No. 1.) On May 10, 2024, Plaintiff timely filed its Motion to 7 Remand. (Dkt. No. 14.)1 8 II. STATEMENT OF THE LAW [9] 28 U.S.C. § 1441 provides: “Except as otherwise expressly provided by 10 Act of Congress, any civil action brought in a State court of which the district 11 courts of the United States have original jurisdiction, may be removed by the 12 defendant or the defendants, to the district court of the United States for the 13 district and division embracing the place where such action is pending.” “Only 14 state-court actions that originally could have been filed in federal court may be 15 removed to federal court by the defendant.” Caterpillar Inc. v. Williams, 482 U.S. 16 386, 392 (1987). There is a “strong presumption against removal jurisdiction,” 17 and “the court resolves all ambiguity in favor of remand to state court.” Hunter v. 18 Philip Morris USA, 582 F.3d 1039, 1042 (9th Cir. 2009) (citation omitted); see 19 also Provincial Gov’t of Marinduque v. Placer Dome, Inc., 582 F.3d 1083 , 1087 20 (9th Cir. 2009); Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). Defendant 21 bears the burden of establishing removal is proper. Hunter, 582 F.3d at 1042 . “If 22 at any time before final judgment it appears that the district court lacks subject 23 matter jurisdiction, the case shall be remanded.” 28 U.S.C. § 1447 (c). “An order 24 remanding the case may require payment of just costs and any actual expenses, 25 including attorney fees, incurred as a result of the removal.” Id. 26 III. DISCUSSION [27] 1 A motion to remand must be filed “within 30 days after the filing of the notice of 28 removal.” 28 U.S.C. § 1447 (c). 1 A. Timeliness 2 Under 28 U.S.C. § 1446 (b), a defendant must file a notice of removal within 3 30 days “after the receipt by the defendant, through service or otherwise,” of (1) a 4 copy of the initial pleading” which is removable on its face; or (2) “a copy of an 5 amended pleading, motion, order or other paper from which it may first be 6 ascertained that the case is one which is or has become removable.” Thus, “[t]he 7 statute provides two thirty-day windows during which a case may be removed— 8 during the first thirty days after the defendant receives the initial pleading or 9 during the first thirty days after the defendant receives a paper “from which it may 10 first be ascertained that the case is one which is or has become removable” if “the 11 case stated by the initial pleading is not removable.” Harris v. Bankers Life & 12 Cas. Co., 425 F.3d 689, 692 (9th Cir. 2005); see also Owens v. Westwood Coll. 13 Inc., 2013 WL 4083624 , at *2 (C.D. Cal. Aug. 12, 2013). 14 Here, Plaintiff filed a copy of the proof of service of the Summons and 15 Complaint on Defendant Rish Investments, Inc. on August 8, 2023. (Forman16 Echols Decl., Ex. 1.) However, Defendant did not file the Notice of Removal 17 until April 21, 2024. (Dkt. No. 1.) Accordingly, to the extent it was ascertainable 18 that the Complaint was removable on its face, Defendant’s Removal was untimely 19 because Defendant did not remove this action within 30 days of service of the 20 summons and Complaint. 28 U.S.C. § 1446 (b). 21 Defendant contends “[t]here was no ‘unequivocally clear and certain’ 22 amended pleading, motion, or other paper in which the Defendant was placed on 23 notice after the initial 30 day period under Section 1446(b)(3) that required 24 removal.” However, 28 U.S.C. § 1446 (b) provides that removal must be made 25 within 30 days of receipt by Defendant of “a copy of an amended pleading, 26 motion, order or other paper from which it may first be ascertained that the case is 27 one which is or has become removable.” 28 At the hearing, defense counsel identified a November 2023 news report 1 regarding this case after which defense counsel conducted research and contends 2 he discovered the case was removable. However, a news report and defense 3 counsel’s own research does not constitute an “amended pleading, motion order or 4 other paper” for purposes of removal under 28 U.S.C. § 1446 (b). Therefore, 5 Defendant fails to identify any “amended pleading, motion, order or other paper” 6 exists which made it first ascertainable that the case was removable pursuant to § 7 1446(b). Moreover, the Notice of Removal alleges this Court has jurisdiction 8 because the Complaint “implicates federal jurisdiction” based on various federal 9 statutes including 42 U.S.C. § 1982 and 42 U.S.C. § 3604 . (Notice of Removal ¶¶ 10 7, 10.) Defendant raised 42 U.S.C. § 1982 and 42 U.S.C. § 3604 in its affirmative 11 defenses in Defendant’s Answer to the Complaint filed on September 19, 2023 in 12 state court. (Answer ¶¶ 20, 21.) Therefore, Defendant was aware of the grounds 13 it raised in its Notice of Removal based on 42 U.S.C. § 1982 and 42 U.S.C. § 3604 14 in September 2023, but did not remove this action until April 21, 2024.2 15 Accordingly, Defendant’s removal was untimely. See 28 U.S.C. § 1446 (b); 16 Peng v. Li, 2021 WL 3077452 , at *4 (C.D. Cal. July 21, 2021). 17 B. Federal Question Jurisdiction 18 The Complaint asserts three state law causes of action for (1) violation of 19 the Red Light Abatement Law, Cal. Pen. Code §§ 11225 et seq.; (2) violation of [20] Cal. Civ. Code § 3479 et seq. (public nuisance); and (3) violation of California 21 Unfair Competition Law, Cal. Bus. & Prof. Code § 17204 . (Dkt. No. 1-1.) No 22 federal claims are asserted, and no federal statutes are referenced in the 23 Complaint. However, Defendant contends the “validity of the claims” in the 24 Complaint “is inextricably bound up with the federal question of whether such an [25] 2 While Defendant identifies 42 U.S.C. § 1982 and 42 U.S.C. § 3604 as a basis for 26 its removal which were included in its affirmative defenses, “a case may not be removed to federal court on the basis of a federal defense . . . even if the defense is 27 anticipated in the plaintiff’s complaint.” Franchise Tax Bd. v. Constr. Laborers Vacation Tr. for S. Cal., 463 U.S. 1, 14 (1983); see also Caterpillar, 482 U.S.C. at 28 393. 1 action is preempted by the federal Victim of Trafficking Victims and Violence 2 Protection Act of 2000” and “the construction and effect of the TVPA and other 3 Congressional enactment dealing with abatement of interstate sex trafficking, and 4 in its construction and effect to this cases, implicates federal jurisdiction.” (Notice 5 of Removal ¶¶ 4, 10.) 6 “The general rule, referred to as the ‘well-pleaded complaint rule,’ is that a 7 civil action arises under federal law for purposes of § 1331 when a federal 8 question appears on the face of the complaint.” City of Oakland v. BP PLC, 969 9 F.3d 895, 903 (9th Cir. 2020) (citing Caterpillar, 482 U.S. at 392). Complete 10 preemption is “an exception to the well-pleaded complaint rule,” which “allows 11 removal where federal law completely preempts a plaintiff’s state-law claim.” 12 Saldana v. Glenhaven Healthcare LLC, 27 F.4th 679, 686 (9th Cir. 2020) 13 (citations omitted). However, Defendant fails to demonstrate the TVPA is a 14 completely preemptive statute. Courts have found the TVPA is not the exclusive 15 statute for hearing torture claims, which demonstrates the TVPA is not a 16 completely preemptive statute. See Sosa v. Alvarez-Machain, 542 U.S. 692 , 728 17 (2004); Aldana v. Del Monte Fresh Produce, N.A., Inc., 416 F.3d 1242 , 1251 18 (11th Cir. 2005); Mujica v. Occidental Petroleum Corp., 381 F. Supp. 2d 1164 , 19 1179 n.13 (C.D. Cal. 2005); Wiwa v. Royal Dutch Petroleum, 2002 WL 319887 20 (S.D.N.Y. Feb. 28, 2002); Beanal v. Freeport-McMoRan, Inc., 969 F. Supp. 362 , 21 380 (E.D. La. 1997), aff’d, 197 F.3d 161 (5th Cir. 1999).3 22 The Supreme Court has recognized an exception to the well-pleaded 23 complaint rule for a “‘special and small category’ of state law claims that arise 24 under federal law for purposes of § 1331 ‘because federal law is ‘a necessary 25 element of the . . . claim for relief.’” City of Oakland, 969 F.3d at 904 (quoting [26] 27 3 Despite Defendant’s reference to preemption in its papers, Defendant represented to the Court at the hearing that it does not contend the TVPA is a completely 28 preemptive statute. 1 Empire Healthchoice Assur., Inc. v. McVeigh, 547 U.S. 677, 699 (2006)). In 2 determining whether this exception to the well-pleaded complaint rule applies, the 3 Court must determine whether the state law claims “necessarily raise a stated 4 federal issue, actually disputed and substantial, which a federal forum may 5 entertain without disturbing any congressionally approved balance of federal and 6 state judicial responsibilities.” Grable & Sons Metal Prod., Inc. v. Darue Eng’g & 7 Mfg., 545 U.S. 308, 314 (2005). Here, there is no showing by Defendant that any 8 of the state law claims asserted in the Complaint arise under federal law because 9 Defendant does not show the TVPA or any federal issue is “necessarily raised” by 10 the state claims, that any federal issue is “actually disputed and substantial,” or 11 that this district court may preside over the state law claims without disturbing the 12 balance of federal and state judicial responsibilities. See id. 13 Therefore, Defendant’s removal based on federal question jurisdiction was 14 improper. 15 C. 28 U.S.C. § 1443 16 Defendant also contends removal was proper pursuant to 28 U.S.C. § 1443 17 on the basis the state procedure does not provide for a right to a jury trial, whereas 18 defenses raised under federal law and federal civil rights claims do provide a right 19 to jury trials and references the Seventh Amendment. 20 Removal pursuant to 28 U.S.C. § 1443 must satisfy a two-part test: “First, 21 the petitioners must assert, as a defense to the prosecution, rights that are given to 22 them by explicit statutory enactment protecting equal racial civil rights.” Patel v. 23 Del Taco, Inc., 446 F.3d 996 , 998–99 (9th Cir. 2006) (citing California v. 24 Sandoval, 434 F.2d 635, 636 (9th Cir. 1970)). “Second, petitioners must assert 25 that the state courts will not enforce that right, and that allegation must be 26 supported by reference to a state statute or a constitutional provision that purports 27 to command the state courts to ignore the federal rights.” Id. Here, Defendant 28 fails to identify it will be deprived of any civil rights regarding racial equality. See 1 || State of Ga. v. Rachel, 384 U.S. 780, 792 (1966); Azam v. U.S. Bank, N.A., 690 F. 2 | App’x 484, 486 (9th Cir. 2017) (citing Patel, 446 F.3d at 999 ); Clark v. Kempton, 3 | 593 F. App’x 667, 668 (9th Cir. 2015); City of Greenwood, Miss. v. Peacock, 384 4 | U.S. 808, 825 (1966). Defendant also fails to identify a state statute or 5 | constitutional provision that “purports to commend the state courts to ignore the 6 | federal rights.” Patel, 446 F.3d at 998-99 . Therefore, Defendant’s removal 7 | pursuant to 28 U.S.C. § 1443 was improper. 8 | D. Fees and Costs Incurred as a Result of the Removal 9 Plaintiff seeks an award of fees and costs based on Defendant’s improper 10 | removal. The Court finds there was no objectively reasonable basis for 11 | Defendant’s untimely removal and Defendant’s removal based on federal question 12 | jurisdiction or pursuant to 28 U.S.C. § 1443 . Therefore, an award of “just costs 13 | and any actual expenses, including attorney fees, incurred as a result of the 14 | removal” is warranted here. 28 U.S.C. § 1447 (c); see also Patel, 446 F.3d at 999 . 15 IV. CONCLUSION 16 Accordingly, the Court GRANTS Plaintiff's Motion to Remand based on 17 | Defendant untimely and improper removal. Therefore, this action is remanded to 18 | state court. 19 Because “[t]he award of fees pursuant to section 1447(c) is collateral to the 20 | decision to remand,” this Court “retain[s] jurisdiction after the remand to entertain 21 | Plaintiff[’s] [request] for attorney’s fees.” Moore v. Permanente Med. Grp., Inc., 22 || 981 F.2d 443 , 445 (9th Cir. 1992). Plaintiff shall file evidence regarding the 23 | reasonable fees and actual costs incurred as a result of the removal no later than 24 | July 18, 2024. 25 IT IS SO ORDERED. [26] 27 | DATED: June 18, 2024. Ce = 28 UNITED STATES DISTRICT JUDGE