Clement Holdings, LLC v. Reece

Opinion

1 2 3 6 7 CLEMENT HOLDINGS, LLC, Case No. 24-cv-04024-JST

8 Plaintiff, ORDER ADOPTING REPORT AND 9 v. RECOMMENDATION AND REMANDING TO STATE COURT Re: ECF No. 6 Defendant. 11

12 13 The Court has reviewed Magistrate Judge Kandis A. Westmore’s report and 14 recommendation, ECF No. 6, to remand this case to state court. Defendant, who is not a CM/ECF 15 participant, was served via First Class Mail to his address of record on July 26, 2024. See ECF 16 No. 6. No objections were filed within the 14-day period, which expired on August 12, 2024. See 17 Fed. R. Civ. P. 72(b)(2) (setting 14-day period for objections); Fed. R. Civ. P. 6(d) (allowing three 18 additional days when service is by mail). 19 Defendant Winford Reece filed a late objection to the report and recommendation, styled 20 as an “Ex Parte Motion for Reconsideration,” on August 16, 2024. ECF No. 10. The same day, 21 Defendant also filed a complaint asserting counterclaims1 against Plaintiff Clement Holdings, 22 LLC, and claims against third-party Wyoming Investments, LLC. ECF No. 11. Defendant argues 23 that these claims, some of which arise under federal law, provide the court with supplemental 24 jurisdiction over the original complaint. See ECF No. 10 at 7. 25 Defendant’s motion for reconsideration is denied. “A counterclaim—which appears as 26

27 1 Although Defendant labels his claims as “crossclaims,” the filing consists of counterclaims 1 part of the defendant’s answer, not as part of the plaintiff’s complaint—cannot serve as the basis 2 || for ‘arising under’ jurisdiction.” Holmes Group v. Vornado Air Circulation Sys., Inc., 535 U.S. 3 826, 831 (2002); see also Takeda v. Nw. Nat. Life Ins. Co., 765 F.2d 815, 822 (9th Cir. 1985) 4 || (‘The federal question defendants raise in their counterclaims does not provide a basis for 5 removal.”). The same rule applies to the third-party claims against Wyoming Investments, LLC. 6 “Federal question jurisdiction exists only if the plaintiff’s complaint states a federal cause of 7 action; permitting a defendant to create federal subject matter jurisdiction by casting a third-party 8 || complaint in terms of a federal cause of action would impermissibly expand the jurisdiction of the 9 federal courts beyond that conferred by Congress.” Cross Country Bank v. McGraw, 321 F. Supp. 10 2d 816, 820-21 (S.D.W. Va. 2004); see 6 Charles A. Wright, Arthur R. Miller, & Mary Kay Kane, 11 Federal Practice & Procedure § 1444 (“[W]hen there is no subject-matter jurisdiction over the 12 || original action between plaintiff and defendant, it cannot be created by adding a third-party claim 13 over which there is jurisdiction.”). Because the Court has no jurisdiction over the original 14 || complaint in this case, it also lacks jurisdiction over Defendant’s counterclaims and third-party 3 15 claims. a 16 The Court finds Judge Westmore’s report to be correct, well-reasoned, and thorough, and 3 17 adopts it in every respect. This case is remanded to state court. 19 || Dated: August 21, 2024 . 20 JON S. TIGAR 2] ited States District Judge 22 23 24 25 26 27 28