Genius Fund I ABC, LLC v. Gary I. Shinder

• Court: District Court, C.D. California
• Decided: May 26, 2021
• Docket: 2:21-cv-03765
• Status: Unknown

Opinion

JS-6 1 UNITED STATES DISTRICT COURT 2 CENTRAL DISTRICT OF CALIFORNIA

3 4 5 Genius Fund I ABC, LLC, 6 Plaintiff, 2:21-cv-03765-VAP (MAAx) 7 v. Order GRANTING Motion to 8 Gary I. Shinder, Heli Holdings, Remand 9 LLC, Joseph Ohayon, Evan (Dkt. No. 21)

10 Kagan, and Yohanah Glam, 11 Defendants. 12

13 Before the Court is Plaintiff Genius Fund I ABC, LLC’s (“Plaintiff”) 14 “Motion to Remand” (“Motion”), filed on May 14, 2021. Having considered 15 the papers filed in support of, and in opposition to, the Motion, the Court 16 finds this matter appropriate for resolution without a hearing and VACATES 17 the hearing set on May 28, 2021 at 2:00 p.m. The Court GRANTS the 18 Motion for the following reasons. 19

20 I. BACKGROUND 21 Plaintiff initiated this action by filing a Complaint against Defendants 22 Gary I. Shinder, Heli Holdings, LLC, Joseph Ohayon, Evan Kagan, and 23 Yohanah Glam (collectively “Defendants”) in the Los Angeles Superior Court 24 on October 13, 2020. (See Compl.) The Complaint alleged the following 25 claims: (1) avoidance of preferential transfers pursuant to California Code of 26 1 1 Civil Procedure § 1800; (2) fraudulent transfer in violation of California Civil 2 Code § 3439.04(a)(1); and (3) breach of fiduciary duty. 3 On February 4, 2021, Plaintiff filed a First Amended Complaint 4 (“FAC”) against Defendants alleging the following claims: (1) avoidance of 5 preferential transfers; (2) fraudulent transfer, in violation of California Civil 6 Code § 3439.04(a)(1); (3) fraudulent transfer, in violation of California Civil 7 Code § 3439.04(a)(2)(B); (4) fraudulent transfer, in violation of California 8 Civil Code § 3439.05; (5) breach of fiduciary duty; (6) conversion; (7) unjust 9 enrichment; (8) breach of contract; (9) breach of implied duty of good faith 10 and fair dealing; (10) civil conspiracy; and (11) declaratory relief. (See 11 FAC.) 12 On May 4, 2021, Defendant Gary I. Shinder (“Defendant Shinder”) 13 removed the action to this Court on the basis of federal question jurisdiction, 14 28 U.S.C. § 1331, although the FAC did not allege any federal claims. In 15 the Notice of Removal, Defendant Shinder asserted Plaintiff’s first claim, 16 brought pursuant to California Code of Civil Procedure § 1800(b) 17 (hereinafter “Section 1800”), and fraudulent transfer claims have been 18 preempted by the federal Bankruptcy Code, as discussed in Sherwood 19 Partners, Inc. v. Lyons, 394 F.3d 1198, 1206 (9th Cir. 2005), which he 20 claimed raised a federal question and satisfied the Court’s federal question 21 subject matter jurisdiction. (See Not. of Removal ¶¶ 1-3, 8.) Defendant 22 Shinder also claimed in the Notice of Removal that removal was timely 23 because the federal question was not apparent on the face of the FAC. (Id. 24 ¶¶ 4, 10.) He also stated that although he was served personally with the 25 Complaint in October 2020, he was served improperly with the FAC by mail, 26 so removal was timely. (Id. ¶ 11 (“Under California law, there being no 2 1 service currently obligating Gary to even appear in [this] [a]ction, it is 2 inconceivable that his time to remove th[is] [a]ction would already have 3 expired.”).) 4 Also in the Notice of Removal, Defendant Shinder attested he had 5 attached “true and correct copies of all process, pleadings, and orders 6 served upon [him] in th[is] [a]ction,” as required by 28 U.S.C. § 1446(a). (Id. 7 ¶ 7.) Defendant Shinder attached three exhibits to the Declaration of Paul F. 8 Rafferty: (1) the Complaint which he received through personal service on 9 October 26, 2020 (Rafferty Decl. ¶ 2); (2) the FAC which he received by mail 10 on February 4, 2021 (Id. ¶ 3); and (3) a request for entry of default judgment 11 which he received by mail on March 19, 2021 (Id. ¶ 4). 12 On May 10, 2021, Plaintiff filed an ex parte application for an order 13 extending the duration of a temporary restraining order entered by the Los 14 Angeles Superior Court before removal and for an order shortening time for 15 hearing on Plaintiff’s forthcoming motion for remand. Defendants filed 16 opposition to Plaintiff’s ex parte application. On May 13, 2021, the Court 17 granted the ex parte application, extended the Superior Court’s temporary 18 restraining order (“TRO”) until May 28, 2021, and set a shortened briefing 19 schedule on the motion for remand. 20 Plaintiff filed the instant Motion on May 14, 2021. Defendant Shinder 21 filed opposition thereto on May 20, 2021, as did Defendant Heli Holdings 22 LLC, separately. Also on May 20, 2021, Defendants Yohanan Glam and 23 Joseph Ohayon filed a joinder to the opposition filed by Heli Holdings LLC. 24 Plaintiff filed a Reply to the opposition briefs on May 24, 2021. 25 26 3 1 II. LEGAL STANDARD 2 A defendant may remove any civil action from state court to federal 3 court if the federal court has original jurisdiction. 28 U.S.C. § 1441(a). “The 4 removal statute is strictly construed, and any doubt about the right of 5 removal requires resolution in favor of remand.” Moore-Thomas v. Alaska 6 Airlines, Inc., 553 F.3d 1241, 1244 (9th Cir. 2009) (citing Gaus v. Miles, Inc., 7 980 F.2d 564, 566 (9th Cir. 1992)). The presumption against removal 8 means that “the defendant always has the burden of establishing that 9 removal is proper.” Id. Moreover, the district court must remand any case 10 previously removed from a state court “if at any time before final judgment it 11 appears that the district court lacks subject matter jurisdiction.” 28 U.S.C. § 12 1447(c). 13 14 III. DISCUSSION 15 Plaintiff argues this matter should be remanded to the Los Angeles 16 Superior Court for several reasons. First, it claims this matter was removed 17 for the improper purpose of interfering with and frustrating the purpose of 18 the Superior Court’s temporary restraining order and preliminary injunction 19 proceedings in this case. Plaintiff further contends removal was untimely, as 20 Defendant Shinder was served with the Complaint through personal service 21 on October 26, 2020, yet he waited to remove this action until May 5, 2021. 22 Plaintiff points out Defendant Shinder failed to attach to the Notice of 23 Removal all the documents he had received in connection with this action, 24 including the Superior Court’s TRO. Finally, Plaintiff contends the Court 25 lacks subject matter jurisdiction because no federal question has been 26 4 1 presented and there is no other basis to satisfy the Court’s subject matter 2 jurisdiction. 3 In his Opposition, Defendant Shinder argues his removal of this action 4 to federal court was timely, Plaintiff’s entire action is preempted by federal 5 law, and his failure to attach copies of the Superior Court’s OSC is not a 6 basis for remand. He also argues the Court should “confront California’s 7 disregard of Ninth Circuit law” and “send California a message” by finding 8 Plaintiff’s claims are preempted by bankruptcy law. (Shinder Opp’n at 19.) 9 In its Opposition, Defendant Heli Holdings LLC argues Plaintiff’s 10 Section 1800 claim is completely preempted and thus the Court has subject 11 matter jurisdiction. Defendant Heli Holdings LLC also opposes Plaintiff’s 12 request for another extension of the Superior Court’s TRO and claims 13 Plaintiff has not demonstrated good cause for the request. 14 In the Reply, Plaintiff argues the Notice of Removal was untimely, 15 Defendant Shinder failed to establish the Court’s subject matter jurisdiction, 16 and the TRO should be extended. Plaintiff also argues, in the event the 17 Court denies the instant Motion, supplemental jurisdiction should not be 18 exercised over Plaintiff’s remaining claims. 19 The Court has considered all the papers submitted by the parties and 20 concludes the only issue to be addressed here is whether the Court has 21 subject matter jurisdiction in this case. For the following reasons, the Court 22 concludes it does not, so it need not and will not reach the remaining 23 arguments Plaintiff raises in support of the remand of this action back to the 24 Los Angeles Superior Court. 25 26 5 1 A. Subject Matter Jurisdiction 2 Federal courts are courts of limited jurisdiction. See Kokkonen v. 3 Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). A determination of 4 subject matter jurisdiction must be made before the merits of a case can be 5 addressed. Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 94 (1998). 6 If at any time before final judgment the Court determines that it is without 7 subject matter jurisdiction, a removed action must be remanded to the state 8 court in which it was originally filed. 28 U.S.C. § 1447(c). 9 Federal district courts have original federal question jurisdiction over 10 “all civil actions arising under the Constitution, laws, or treaties of the United 11 States.” 28 U.S.C. § 1331. Under the “‘well-pleaded complaint rule,’ federal 12 jurisdiction exists only when a federal question is presented on the face of 13 the plaintiff's properly pleaded complaint.” Caterpillar Inc. v. Williams, 482 14 U.S. 386, 392 (1987). “A defense is not part of a plaintiff’s properly pleaded 15 statement of his or her claim.” Rivet v. Regions Bank of La., 522 U.S. 470, 16 475 (1998). “Although federal preemption is ordinarily a defense, ‘[o]nce an 17 area of state law has been completely pre-empted, any claim purportedly 18 based on that pre-empted state-law claim is considered, from its inception, a 19 federal claim, and therefore arises under federal law.’” Id. at 476. In effect, 20 under this very limited circumstance, the pleaded state law claim is 21 recharacterized as a federal claim and is removable. See Franchise Tax Bd. 22 v. State of Cal. v. Constr. Laborers Vacation Tr. for S. Cal., 463 U.S. 1, 23-24 23 (1983). 24 Complete preemption occurs when “Congress [has] so completely 25 pre-empt[ed] a particular area that any civil complaint raising this select 26 group of claims is necessarily federal in character.” Metro. Life Ins. Co. v. 6 1 Taylor, 481 U.S. 58, 63 (1987). “Complete preemption (a jurisdictional 2 issue) converts a well-pleaded state law claim into an inherently federal 3 claim for jurisdictional purposes; defensive preemption (a substantive issue) 4 does not enable removal.” Hall v. N. Am. Van Lines, Inc., 476 F.3d 683, 689 5 n.8 (9th Cir. 2007). Complete preemption arises only in “extraordinary” 6 situations. “[B]ecause complete preemption is rare, [m]any federal 7 statutes—far more than support complete preemption—will support a 8 defendant’s argument that because federal law preempts state law, the 9 defendant cannot be held liable under state law.” Retail Prop. Tr. v. United 10 Bhd. of Carpenters & Joiners of Am., 768 F.3d 938, 948 (9th Cir. 2014) 11 (citation omitted). The Supreme Court “has identified only three federal 12 statutes that satisfy this test: (1) Section 301 of the Labor-Management 13 Relations Act, 29 U.S.C. § 185; (2) Section 502 of the Employee Retirement 14 Income Security Act of 1974, 29 U.S.C. § 1132; and (3) the usury provisions 15 of the National Bank Act, 12 U.S.C. §§ 85, 86.” Ansley v. Ameriquest 16 Mortgage Co., 340 F.3d 858, 862 (9th Cir. 2003) (citing Beneficial Nat'l Bank 17 v. Anderson, 539 U.S. 1 (2003)). 18 Complete preemption is distinct from other forms of preemption. See 19 Retail Prop. Tr., 768 F.3d at 946-61 (explaining the differences between 20 complete and defensive preemption doctrines); see also In re Google Inc. 21 St. View Elec. Comm'ns Litig., 794 F. Supp. 2d 1067, 1084 (N.D. Cal. 2011) 22 (quoting Ting v. AT&T, 319 F.3d 1126, 1135 (9th Cir. 2003)). Complete 23 preemption is “a doctrine applicable to removal jurisdiction only; it is not a 24 doctrine of defensive preemption.” Retail Prop. Tr., 768 F.3d at 948. 25 Defensive preemption takes three forms: express preemption, field 26 preemption, and conflict preemption. Id. Express preemption exists where 7 1 Congress enacts an explicit statutory command that state law be displaced.” 2 Ting, 319 F.3d at 1135. Field preemption may be found “when the federal 3 statutory scheme is sufficiently comprehensive to infer that Congress left no 4 room for supplementary regulation by the states.” Public Utility Dist. No. 1 5 of Grays Harbor City Wash. v. IDACORP, Inc., 379 F.3d 641, 647 (9th Cir. 6 2004). Conflict preemption occurs when the state law claims directly conflict 7 with federal law. Retail Prop. Tr., 768 F.3d at 960-61. Although they “bear a 8 number of similarities,” “field preemption and complete preemption are not 9 co-extensive” because they each “serve distinct purposes and should be 10 kept clear and separate . . . .” Id. at 949. In all cases, congressional intent 11 to preempt state law must be clear and manifest.” In re Cybernetic Servs., 12 Inc., 252 F.3d 1039, 1046 (9th Cir. 2001). “[O]nly complete preemption 13 confers federal question jurisdiction.” Lane v. CBS Broad., 612 F. Supp. 2d 14 623, 636 (E.D. Pa. 2009). 15 Here, Defendants argue Plaintiff’s Section 1800 claim1 is preempted 16 by federal law, as stated in Sherwood Partners, Inc. v. Lycos, Inc., 394 F.3d 17

18 1 The Court points out Defendant Shinder argues Plaintiff’s Section 1800 claim and fraudulent transfer claims are preempted by federal bankruptcy 19 law, whereas Defendant Heli Holdings LLC contends only Plaintiff’s 20 Section 1800 claim is preempted. As discussed herein, the Court rejects Defendants’ arguments that Plaintiff’s Section 1800 claim is preempted 21 completely by bankruptcy law. The Court also rejects Defendant Shinder’s arguments that Plaintiff’s fraudulent transfer claims, which notably were 22 not at issue in Sherwood Partners, Inc., also are preempted by federal bankruptcy law. He has presented no authority to suggest all state 23 fraudulent transfer laws are completely preempted by federal law, nor is 24 the Court aware of any. Cf. In re JTS Corp., 617 F.3d 1102, 1111 (9th Cir. 2010) (discussing the legislative history of the Bankruptcy Code, including 25 its amendments and how Congress did not intend to preempt state fraudulent transfer laws when passing and enacting the Bankruptcy 26 Code). 8 1 1198 (9th Cir. 2005), the claim should be considered as a federal claim, and 2 it satisfies the Court’s subject matter jurisdiction. 3 In Sherwood Partners, Inc., the Ninth Circuit held Section 1800(b)2 “is 4 preempted by the Bankruptcy Code.” Sherwood Partners, Inc., 394 F.3d 5 1206. The plaintiff in that action, an assignee of a debtor, filed suit in 6 California state court for recovery under Section 1800 of a $1 million 7 payment the debtor had made previously to the defendant. Id. at 1200. The 8 defendant removed the action to federal court on diversity grounds and 9 moved to dismiss the action by arguing the Section 1800 claim was 10 preempted by the Bankruptcy Code. Id. The district court denied the 11 motion to dismiss and eventually granted the motion for summary judgment. 12 Id. On appeal, the Ninth Circuit reversed and remanded, directing the 13 14 2 Section 1800(b) states the following: 15 Except as provided in subdivision (c), the assignee of any general 16 assignment for the benefit of creditors, as defined in Section 493.010, may recover any transfer of property of the assignor that is all of the 17 following: 18 (1) To or for the benefit of a creditor. 19 (2) For or on account of an antecedent debt owed by the assignor before the transfer was made. 20 (3) Made while the assignor was insolvent. 21 (4) Made on or within 90 days before the date of the making of the 22 assignment or made between 90 days and one year before the date of making the assignment if the creditor, at the time of the transfer, was an 23 insider and had reasonable cause to believe the debtor was insolvent at 24 the time of the transfer. (5) Enables the creditor to receive more than another creditor of the 25 same class. 26 Cal. Code Civ. Proc. § 1800(b). 9 1 district court to dismiss the action because the Section 1800 claim was 2 preempted. Id. at 1200, 1206. 3 The Ninth Circuit observed Chapter 7 of the Bankruptcy Code 4 provides for the equitable distribution of a debtor’s assets among competing 5 creditors and “the power to avoid preferential transfers” is given to the 6 bankruptcy trustee upon a filing of a bankruptcy petition. Id. at 1203-04 7 (citing 11 U.S.C. § 547(b)). The court emphasized the Bankruptcy Code 8 “embodies two ideals: (1) giving the individual debtor a fresh start, by giving 9 him a discharge of most of his debts; and (2) equitably distributing a 10 debtor’s assets among competing creditors.” Id. at 1203. The court 11 reasoned a Section 1800 claim was preempted because it implicated the 12 second goal by altering the “equitable distribution” of a debtor’s remaining 13 assets. Id. As the court explained, “if a state assignee under § 1800 14 recovers a preferential transfer and distributes its proceeds to creditors, this 15 will preclude a federal trustee from recovering the same sum under the 16 federal preferential statute if a federal bankruptcy proceeding is begun.” Id. 17 at 1204. The court further explained Congress, in enacting the Bankruptcy 18 Code, had “carefully delineate[d] the circumstances under which federal 19 bankruptcy proceedings are to be initiated,” and that Section 1800(b) 20 interfered with the “statutory incentives” in a manner Congress had not 21 “contemplated.” Id. at 1205 (noting that once Section 1800(b) proceedings 22 are instituted, they “will affect the incentives of various parties as to whether 23 they wish to avail themselves of federal bankruptcy law”). The Ninth Circuit 24 reasoned because Section 1800 “give[s] state assignees or trustees 25 avoidance powers beyond those that may be exercised by individual 26 creditors,” it “trench[es] too close upon the exercise of the federal 10 1 bankruptcy power.” Id. at 1205-06. The court found Section 1800(b) could 2 not “peacefully coexist” with the Bankruptcy Code. Id. at 1202, 1206. 3 The Court does not read the Ninth Circuit’s decision in Sherwood 4 Partners, Inc. as supporting subject matter jurisdiction in this case, for 5 several reasons. 6 First, Sherwood Partners, Inc. did not address whether a Section 7 1800 claim is completely preempted and satisfies federal question subject 8 matter jurisdiction in an action removed to federal court on that basis. 9 Instead, as stated supra, Sherwood Partners, Inc. was a case removed to 10 federal court based on diversity jurisdiction and addressed preemption as a 11 defense raised by the defendant. As discussed supra, there are distinct 12 forms of preemption and only complete preemption would satisfy the Court’s 13 subject matter jurisdiction here. 14 Second, the Ninth Circuit acknowledged that not all state laws that 15 overlap with bankruptcy law are subject to preemption. “[F]ederal law 16 coexists peaceably with, and often expressly incorporates, state laws 17 regulating the rights and obligations of debtors (or their assignees) and 18 creditors.” Sherwood Partners, Inc., 394 F.3d at 1201. Notably, in an 19 opinion issued after Sherwood Partners, Inc., the Ninth Circuit clarified: 20 We do not hold that all state actions related to bankruptcy 21 proceedings are subject to the complete preemption doctrine. We 22 recognize that because the common law of the various states 23 provides much of the legal framework for the operation of the 24 bankruptcy system, it cannot be said that Congress has completely 25 preempted all state regulation which may affect the actions of parties 26 in bankruptcy court. 11 1 In re Miles, 430 F.3d 1083, 1092 (9th Cir. 2005) (quotations and citations 2 omitted). 3 Third, by its own terms, Sherwood Partners, Inc. was limited to a 4 narrow question, i.e., whether a Section 1800(b) claim conflicted directly 5 with the Bankruptcy Code. The limited holding in Sherwood Partners, Inc. is 6 inconsistent with a finding of complete preemption as defined in Retail Prop. 7 Tr., 768 F.3d at 946-61. This is not one of the “extraordinary” situations 8 where Congress clearly manifested an intention to convert into federal 9 questions all state law claims arising out of the power of a debtor’s assignee 10 to avoid preferential transfers. See In re Cybernetic Servs., Inc., 252 F.3d at 11 1046; Anderson, 539 U.S. at 8. 12 Fourth, despite Defendants’ arguments to the contrary, the Court finds 13 persuasive the reasoning in two opinions that have addressed the exact 14 issue facing the Court here. See Viz Media LLC v. Steven M. Spector PC, 15 No. C07-00660 MJJ, 2007 WL 1068203 (N.D. Cal. Apr. 10, 2007); Spector v. 16 Zuffa, LLC, No. 2:07-CV-00463-KJD-RJJ, 2007 WL 9734332 (D. Nev. Dec. 17 12, 2007). Both cases concluded a Section 1800 claim is not preempted 18 completely by the Bankruptcy Code and, despite Sherwood Partners, Inc., a 19 Section 1800 claim cannot be recharacterized as a federal claim to satisfy 20 the Court’s subject matter jurisdiction. 21 In Viz Media LLC, the plaintiff filed a declaratory judgment action 22 seeking a determination that the defendant, an assignee of a debtor who 23 was seeking to recover a preferential payment made by the debtor to the 24 plaintiff, had no power to do so pursuant to Section 1800 because it was 25 preempted by bankruptcy law. Viz Media LLC, 2007 WL 1068203 at *1. 26 The defendant moved to dismiss the complaint on the basis that the court 12 1 lacked subject matter jurisdiction and the dispute had to be resolved in a 2 pending parallel state court proceeding. Id. Simultaneously, the plaintiff 3 moved for summary judgment, arguing a declaratory judgment was 4 warranted in light of the Ninth Circuit’s opinion in Sherwood Partners, Inc. 5 Id. The court granted the motion to dismiss and denied the motion for 6 summary judgment as moot. Id. 7 In granting the motion to dismiss, the Viz Media LLC court concluded 8 it did not have subject matter jurisdiction over the action, as diversity 9 jurisdiction was not satisfied, nor was federal question jurisdiction. The 10 court explained the plaintiff’s preemption claim was raised as a defense to 11 the defendant’s state law claim, which did not create federal question 12 subject matter jurisdiction. Id. at *3. Addressing the plaintiff’s claim that the 13 Section 1800 claim was completely preempted by bankruptcy law, the court 14 considered the reach of Sherwood Partners, Inc., and stated it was “unable 15 to conclude that Congress intended, by passage of the United States 16 Bankruptcy Act, to fully occupy the area of the exercise of preference 17 avoidance powers by creditors or assignees such that ‘complete 18 preemption’ exists here.” Id. at *5. The Viz Media LLC court determined the 19 issue decided in Sherwood Partners, Inc. was limited to deciding “whether 20 the specific avoidance rights granted to the assignee conflicted with federal 21 law” and did not support a finding of complete preemption. Id. The court 22 noted Sherwood Partners, Inc. made clear “the Bankruptcy Code will 23 preempt certain preference avoidance powers granted to assignees under 24 state statutes when those same powers are not granted to individual 25 creditors under state law, but still permits some state law preference 26 avoidance powers if granted in equal measure to individual creditors.” Id. at 13 1 *6 (citing Sherwood Partners, Inc., 394 F.3d at 1204 n.6). In other words, as 2 transfer avoidance laws can coexist with bankruptcy law if granted to all 3 creditors, the court concluded “the Bankruptcy Code does not provide the 4 exclusive private remedies available to assignees (for creditors) for 5 avoidance of preferential transfers, and does not evidence an intent of 6 Congress to ‘push aside any state law claims in the area’ nor make all 7 claims for avoidance of preferential transfers arise solely under federal law.” 8 Id. (citations omitted). 9 The Court is persuaded by and adopts the reasoning in Viz Media 10 LLC here. In particular, the explanation in Sherwood Partners, Inc., on 11 which the Viz Media LLC court focused, regarding there being no “federal 12 concern when the assignee has no special avoidance rights,” 394 F.3d at 13 1204 n.6, as compared to other creditors, makes clear the opinion did not 14 conclude a Section 1800 claim is completely preempted by bankruptcy law. 15 Instead, contrary to Defendants’ arguments, Sherwood Partners, Inc. 16 considered and found conflict preemption only. 17 Likewise, the Court follows the reasoning in Spector v. Zuffa, LLC, 18 2007 WL 9734332 at *2-3, which also followed Viz Media LLC. The 19 procedural posture here is the same as in Spector, in which an assignee of 20 a debtor filed a complaint in state court seeking to void preferential 21 payments made by the debtor under Section 1800, and the defendants 22 removed the action to federal court on the basis that the Section 1800 claim 23 “assert[ed] federal question jurisdiction pursuant to the Ninth Circuit’s 24 decision in Sherwood Partners, Inc. [].” Spector, 2007 WL 9734332 at *1. 25 The plaintiff filed a motion to remand and the court granted the motion. Id. 26 14 1 The court found it did not have subject matter jurisdiction based on 2 complete preemption. Id. Following Viz Media LLC, the Spector court found 3 “Sherwood does not suggest that Congress intended to assert authority 4 over the exercise of preference avoidance powers to such a degree that any 5 claim in that area should be deemed federal in character, or to require that 6 all such claims arise solely under federal law.” Id. at *3. The Court agrees. 7 For the same reasons the Viz Media LLC and Spector courts 8 concluded a Section 1800 claim is not completely preempted by federal 9 bankruptcy law, the Court rejects Defendants’ arguments that Plaintiff’s 10 Section 1800 claim is preempted completely and confers federal question 11 subject matter jurisdiction here. 12 In its Opposition, Defendant Heli Holdings LLC also points to two 13 cases from the Central District of California to support its contention that 14 Sherwood Partners, Inc. should be construed as endorsing a view that 15 Section 1800 claims are completely preempted by the Bankruptcy Code. 16 (See Heli Holdings Opp’n at 7-9 (discussing Am. Furniture Rentals, Inc. v. 17 DSI Assignments, LLC, No. CV 18-5599 PA (AGRx) (C.D. Cal. Dec. 3, 2018) 18 and DSI Assignments, LLC v. Labor Ready, Inc., No. CV 18-7500 PA 19 (AGRx) (C.D. Cal. Dec. 3, 2018).) Each is distinguishable from the instant 20 case. In both cases, the complaint alleging a Section 1800 claim either was 21 filed directly in federal court, in the case of Am. Furniture Rentals, Inc. v. DSI 22 Assignments, LLC, or removed to federal court, in the case of DSI 23 Assignments, LLC v. Labor Ready, Inc., on the basis of diversity jurisdiction, 24 and the court dismissed the claim because it was preempted pursuant to 25 Sherwood Partners, Inc. Neither case was removed to federal court on the 26 basis of federal question jurisdiction pursuant to a preemption defense, nor 15 1 did either case address whether the Section 1800 claim was preempted 2 completely by bankruptcy law to confer federal question subject matter 3 jurisdiction. Accordingly, these opinions are of no assistance to Defendant 4 Heli Holdings LLC here. 5 Finally, to the extent Defendant Heli Holdings LLC argues removal 6 was appropriate pursuant to the “dominant” federal interest doctrine set forth 7 in Grable & Sons Metal Prods., Inc. v. Darou Eng’g & Mfg., 545 U.S. 308, 8 312 (2005), it is mistaken. (See Heli Holdings Opp’n at 6 n.3.) As 9 discussed in Viz Media LLC, the issue Defendant Heli Holdings LLC raises, 10 is done so defensively and “Grable provides no basis for finding federal 11 jurisdiction on the basis of [a] federal defense alone.” Viz Media LLC, 2007 12 WL 1068203 at *3. Accordingly, the Court rejects this argument. 13 As discussed herein, the Court concludes Defendants have failed to 14 meet their burden of demonstrating removal was proper. See Moore- 15 Thomas v. Alaska Airlines, Inc., 553 F.3d at 1244. The Court is without 16 subject matter jurisdiction and must remand this action to the Los Angeles 17 Superior Court. See 28 U.S.C. § 1447(c). 18 19 B. Extension of the Temporary Restraining Order 20 As mentioned supra, Plaintiff moves the Court to extend the Superior 21 Court’s TRO for an additional seven days following remand, to allow it to 22 move to re-set preliminary injunction proceedings. Presently, the TRO is set 23 to expire on May 28, 2021. 24 The Court finds good cause for this request. See Fed. R. Civ. P. 25 65(b)(2). Plaintiff has shown it risks suffering irreparable harm if the TRO is 26 permitted to lapse. Extending the TRO continues to preserve the status quo 16 1 | among the parties. The TRO will be extended only for a seven-day period, 2 | for the purpose of allowing Plaintiff sufficient time to reinstitute preliminary 3 | injunction proceedings before the Superior Court. Accordingly, the request 4 | for a further extension of the Superior Court's TRO is granted. 5 6 IV. CONCLUSION 7 For the foregoing reasons, the Court GRANTS the Motion and 8 | remands this action to the Los Angeles Superior Court. The Court GRANTS 9 | Plaintiff's request to extend the Superior Court’s TRO. The TRO, under the ~ 10 | terms originally ordered by the Superior Court, shall remain in full force and 11 | effect until June 4, 2021. 12 13 IT 1S SO ORDERED.

15 Dated: 5/26/21 Vip w. A, Phiw ; A 16 Virginia A. Phillips 17 United States District Judge 18 19 20 21 22 23 24 25 26