United States District Court, D. New Jersey
REPORT & RECOMMENDATION
L. WALDOR UNITED STATES MAGISTRATE JUDGE.
matter comes before the Court by way of referral from the
Honorable Susan D. Wigenton to issue a Report and
Recommendation regarding Plaintiff M&T Bank's Motion
to Remand (ECF No. 7). The Court declined to hear oral
argument pursuant to Federal Rule of Civil Procedure 78, and,
for the reasons set forth below, the Court recommends that
the Motion to Remand be GRANTED.
M&T Bank first filed this foreclosure action against
Defendants H. Scott Gurvey and Amy Gurvey in the Superior
Court of New Jersey, Essex County, on July 5, 2018. (Compl.,
ECF No. 1-1 at p. 7-15). On August 13, 2018, Defendants
removed this case on the basis of federal question
jurisdiction pursuant to 28 U.S.C. § 1441(a). (ECF No.
1). Defendants then filed an Answer and asserted numerous
affirmative defenses and counterclaims under federal and
state law against M&T Bank and several other counterclaim
defendants. (ECF No. 5).
January 18, 2019, M&T Bank filed its Motion to Remand.
(ECF No. 7). M&T Bank asserts that Defendants'
removal of this action was improper, because the Court lacks
subject matter jurisdiction over the Complaint. (Pl.'s
Br., ECF No. 7-2, at p. 6). M&T Bank also moves for an
award of attorneys' fees and costs pursuant to 28 U.S.C.
§ 1447(c). (Id. at p. 7). Defendants oppose
Plaintiff's Motion to Remand and cross-move to dismiss
the Complaint. (ECF No. 8). Defendants argue that their
federal counterclaims confer federal question jurisdiction
over this matter, and that Plaintiff's foreclosure action
should be dismissed because it is unlawful and fraudulent.
(Id. at p. 2-3).
28 U.S.C. § 1441, a defendant may remove a state court
action to federal court if there is federal jurisdiction over
the matter. A defendant must file a notice of removal within
thirty days of receiving a copy, “through service or
otherwise, ” of the initial pleading. 28 U.S.C. §
1446(b)(1). There are two bases for federal subject matter
jurisdiction. Federal courts have diversity jurisdiction over
cases between “citizens of different states” in
which the amount in controversy exceeds $75, 000. 26 U.S.C.
§ 1332(a)(1). Federal district courts also have original
jurisdiction over “all civil actions arising under
the… laws, or treaties of the United States.” 28
U.S.C. § 1331; see also Parrish v. ARC of Morris
Cty., LLC, 193 F.Supp.3d 425, 430 (D.N.J. 2016).
removing party “bears the burden of showing at all
stages of the litigation that subject matter jurisdiction is
proper in the federal court.” DeJoseph v.
Cont'l Airlines, Inc., 18 F.Supp.3d 595, 597 (D.N.J.
2014). The federal removal statute should be “strictly
construed against removal…[and] all doubts should be
resolved in favor of remand.” Id. There is a
“presum[ption] that federal courts lack jurisdiction
unless the contrary appears affirmatively from the
record.” Id. at 598 (quoting Renne v.
Geary, 501 U.S. 312, 316 (1991)). When determining
whether removal was proper, the “Court must analyze
whether the action was removable as pending in the state
court.” United States Express Lines, Ltd. v.
Higgins, 281 F.3d 383, 389 (3d Cir. 2002).
SUBJECT MATTER JURISDICTION
Court recommends that this matter be remanded for lack of
federal subject matter jurisdiction. Defendants removed the
Complaint based on federal question jurisdiction under 28
U.S.C. § 1331. (Notice of Removal, ECF No. 1, at p. 3).
However, Defendants have not met their burden of establishing
that the Court has federal question jurisdiction over this
action. “Under the well-pleaded complaint rule, a court
determines whether a claim ‘arises under' federal
law from a plaintiff's complaint.” Wood v.
Prudential Ins. Co. of Am., 207 F.3d 674, 678 (3d Cir.
2000) (citing Metropolitan Life v. Taylor, 481 U.S.
58, 62, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987)). Here,
Plaintiff M&T Bank pled exclusively state law causes of
action in its Complaint, which includes one foreclosure count
and one count for the possession of the mortgaged premises.
Accordingly, this matter does not arise under federal law.
removing this action to federal court, Defendants filed
federal counterclaims and allege that M&T Bank violated,
among other statutes, the Fair Debt Collection Practices Act,
the Fair Credit Reporting Act, and the Real Estate Settlement
Procedures Act. (Def.'s Answer, ECF No. 5, ¶¶
103-124, 131-139, 171-186). In their Opposition, Defendants
argue that these federal counterclaims “confer federal
subject matter upon this Court and also allow the Court to
assume jurisdiction of pendent state claims under 28 USC
1367[.]” (Def.'s Opp., ECF No. 8, at p. 5).
However, under the well-pleaded complaint rule,
“federal jurisdiction may not rest on a federal
counterclaim, even when compulsory.” Palmer v.
Univ. of Med. & Dentistry of New Jersey,
605 F.Supp.2d 624, 631 (D.N.J. 2009) (citing Holmes
Group, Inc. v. Vornado Air Circulation Sys.,
Inc., 535 U.S. 826, 830-830, 122 S.Ct. 1889, 153 L.Ed.2d
have likewise failed to demonstrate that the Court has
diversity jurisdiction under 26 U.S.C. § 1332(a)(1). In
their Notice of Removal, Defendants did not assert diversity
jurisdiction as a basis for removal, nor did they assert any