Kokhanovski v. TD Bank USA, N.A.

• Court: District Court, E.D. California
• Decided: August 21, 2023
• Docket: 1:22-cv-01552
• Status: Unknown

Opinion

1 2 3

4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10

11 ELENA KOKHANOVSKI, Case No. 1:22-cv-01552-JLT-CDB

12 Plaintiff, ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF’S MOTION TO REMAND 13 v. AND DENY AS MOOT DEFENDANT’S MOTION FOR MORE DEFINITE STATEMENT 14 TD BANK USA, N.A., et al. (Docs. 7-8) 15 Defendants. 16

17 Pending before the Court is Defendant TD Bank USA, N.A.’s (“TD Bank”) motion for more

18 definite statement and Plaintiff Elena Kokhanovski’s (“Plaintiff”) motion to remand. (Docs. 7-8).1 In 19 addition to the motions, the Court has received and considered the parties’ oppositions and replies to 20 the aforementioned motions. (Docs. 13, 15, 19-20). For the foregoing reasons, the Court will grant 21 Plaintiff’s motion to the extent of remanding the action, deny Plaintiff’s motion to award costs and 22 fees, and deny as moot Defendant’s motion for more definite statement. 23 Background 24 On October 18, 2022, Plaintiff filed a complaint in Kern County Superior Court against 25 Defendants TD Bank and Patenaude & Felix A Professional Corporation (hereinafter collectively 26

27 1 On May 22, 2023, Plaintiff’s motion to remand (Doc. 8), and Defendant’s motion for more definite statement (Doc. 7) were assigned for decision to the undersigned following the parties’ filing 28 of forms acknowledging their consent to the jurisdiction of a magistrate judge, pursuant to 28 U.S.C. § 636(c)(1). (Doc. 25). 1 “Defendants”). (Doc. 1-1). Plaintiff raised the following claims: (1) violation of the Rosenthal Fair 2 Debt Collection Practices Act (“RFDCPA”), (2) violation of the unfair competition law, (3) violation 3 of the California Consumer Credit Reporting Agencies Act (“CCRAA”), and (4) violation of the 4 California Identity Theft Law. Id. at 1, 11-16) (citing Cal. Civ. Code §§ 1785.25(a), 1788, et seq., 5 1798.92, et seq. and Cal. Bus. & Prof. Code § 17200, et seq.) 6 Plaintiff’s complaint also alleges “Defendant” violated the Federal Credit Reporting Act 7 (“FCRA”). Id. at ¶¶ 35-36, 43 (citing 15 U.S.C. §§ 1681c, 1681n, 1681o, and 1681s-2(b)). 8 Specifically, Plaintiff claims “Defendant” violated the FCRA by willfully, knowingly, and negligently: 9 (1) continuing to furnish and disseminate inaccurate and derogatory credit, account, and other information concerning Plaintiff to credit reporting agencies and other entities despite 10 knowing that said information was inaccurate;

11 (2) failing to comply with the requirements of § 1681s-1; 12 (3) failing “to follow reasonable procedures to assure maximum possible accuracy”, in the 13 preparation of a consumer report concerning Plaintiff;

14 (4) failing to correct, after receiving ample notice, information about Plaintiff, that Defendant 15 knew, or should have known was incomplete and/or inaccurate;

16 (5) failing to correct and/or delete the incomplete and inaccurate information in Plaintiff’s file after conducting an investigation; 17

18 (6) failing to conduct an adequate investigation of Plaintiff’s complaints and failing to implement corrective actions “once the outcome of such investigations was known, or 19 that should have been known;

20 (7) failing to provide subsequent users of Plaintiff’s credit report with the Plaintiff’s statement of dispute or a summary thereof; 21

22 (8) furnishing "negative and inaccurate credit information to credit reporting agencies;

23 (9) failing to place a fraud alert on Plaintiff’s credit files, as required by § 1681c-1;

24 (10) failing to put a block on the identity theft account or accounts, as required by § 1681s-2; 25 (11) failing to provide such information to the credit bureaus including the full nature, 26 reasons, and extent of Plaintiff’s dispute, and thus causing the credit reports to the credit bureaus be inaccurate and incomplete. 27

28 1 Id. at ¶ 35. Plaintiff alleges “Defendant’s conduct was a direct and proximate cause, as well as a 2 substantial factor, in causing the injuries, damages, and harm to Plaintiff that are outlined more fully 3 above.” Id. at ¶ 36. Plaintiff asserts she has suffered economic and emotional harm and seeks 4 recompense from “Defendant” for its numerous and egregious violations of federal and state law, 5 including the FCRA. Id. at ¶ 43. Pursuant to the CCRAA, Plaintiff asks for the following relief: 6 (1) actual damages; (2) statutory damages for all violations as well as for willful and negligent violations; (3) exemplary and punitive damages as determined by the Court or 7 finder of fact; (4) costs and reasonable attorney’s fees; and (5) for such other and further relief as may be just and proper. 8

9 Id. at 15. On November 1, 2022, TD Bank “received the complaint by service by email.” (Doc. 1 at ¶ 10 4). On November 30, 2022, TD Bank timely removed this case to federal court. Id. at ¶ 5. TD Bank 11 asserts federal question jurisdiction under 28 U.S.C. §§ 1441(a) and 1446, due to the Complaint’s 12 reference to the FCRA. Id. at ¶¶ 3, 7. 13 On December 7, 2022, TD Bank filed a motion for more definite statement pursuant to Fed. R. 14 Civ. P. 12(e). (Doc. 7). On December 10, 2022, Plaintiff filed the instant motion, requesting the 15 Court remand this action to the Kern County Superior Court and award Plaintiff their attorney’s fees. 16 (Doc. 8). Both motions have been fully briefed. (Docs. 13, 15, 19-20). 17 Legal Standard 18 Under 28 U.S.C. § 1441(a), a civil action may be removed to the district court where the action 19 is pending if the district court has original jurisdiction over the action. Generally, federal courts have 20 original jurisdiction over civil actions arising under federal law as well as those between citizens of 21 different states in which the alleged damages exceed $75,000. 28 U.S.C. §§ 1331, 1332. 22 “The party invoking the removal statute bears the burden of establishing federal jurisdiction.” 23 Marin Gen. Hosp. v. Modesto & Empire Traction Co., 581 F.3d 941, 944 (9th Cir. 2009) (citing 24 Toumajian v. Frailey, 135 F.3d 648, 652 (9th Cir. 1998)). There is a “strong presumption against 25 removal jurisdiction,” and courts must reject it “if there is any doubt as to the right of removal in the 26 first instance.” Geographic Expeditions, Inc. v. Estate of Lhotka ex rel. Lhotka, 599 F.3d 1102, 1107 27 (9th Cir. 2010) (quoting Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (per curiam)). 28 1 The Court may award the plaintiff costs and attorney fees incurred when remanding a case to 2 state court. 28 U.S.C. §§ 1447(c). The court possesses broad discretion to award costs and fees 3 whenever it finds that removal was wrong as a matter of law. Balcorta v. Twentieth-Century Fox Film 4 Corp., 208 F.3d 1102, 1106 n.6 (9th Cir. 2000). 5 Discussion and Analysis 6 TD Bank removed this action based on federal question jurisdiction under 28 U.S.C. § 1441(a). 7 (Doc. 1). Federal question jurisdiction is governed by 28 U.S.C. § 1331, which provides that “[t]he 8 district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws or 9 treaties of the United States.” Generally, “[a] case ‘arises under’ federal law either where federal law 10 creates the cause of action or ‘where the vindication of a right under state law necessarily turn[s] on 11 some construction of federal law.’” Republican Party of Guam v. Gutierrez, 277 F.3d 1086, 1088-89 12 (9th Cir. 2002) (quoting Franchise Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 8-9 13 (1983)). “The presence or absence of federal-question jurisdiction is governed by the well-pleaded 14 complaint rule, which provides that federal jurisdiction exists only when a federal question is 15 presented on the face of the plaintiff’s properly pleaded complaint.” Caterpillar Inc. v. Williams, 482 16 U.S. 386, 392 (1987) (internal quotation marks and citation omitted). 17 In general, the plaintiff is the “master of the complaint,” and may choose “not to plead 18 independent federal claims” in a complaint asserting state law causes of action. ARCO Envtl. 19 Remediation, L.L.C. v. Department of Health & Envtl. Quality, 213 F.3d 1108, 1114 (9th Cir. 2000). 20 Federal question jurisdiction does not arise from the “mere presence of a federal issue in a state cause 21 of action.” Merrell Dow Pharms., Inc. v. Thompson, 478 U.S. 804, 813 (1986); see Grable & Sons 22 Metal Prods., Inc. v. Darue Eng’g & Mfg., 545 U.S. 308, 314 (2005) (the Supreme Court does not 23 treat “federal issues as a password opening federal courts to any state action embracing a point of 24 federal law”). However, “a plaintiff may not avoid federal jurisdiction by ‘omitting from the 25 complaint federal law essential to his claim, or by casting in state law terms a claim that can be made 26 only under federal law.’” Rains v. Criterion Sys., 80 F.3d 339, 344 (9th Cir. 1996) (citing Olguin v. 27 Inspiration Consol. Cooper Co., 740 F.2d 1468, 1472 (9th Cir. 1984)). 28 1 TD Bank asserts this Court has federal question jurisdiction based on Plaintiff’s allegations 2 that “Defendant” violated the FCRA. (Doc. 13). TD Bank argues Plaintiff has alleged more than a 3 passing reference to federal law. See id. at 6 (“But nearly two pages of federal law in a complaint, 4 including an explicit claim of multiple violations of federal law without any reference to state law, is 5 more than a ‘passing reference,’ and cannot be dismissed as ‘an erratum.’”). Instead, TD Bank 6 contends Plaintiff’s invocation of “Sections 1681n and 1681o of the FCRA” and request for relief for 7 which federal law provides, establishes federal question jurisdiction. See id. at 7-9 (“There is no 8 plausible reason to cite either statute other than to assert the liability and to seek the remedies for 9 which sections 1681n and 1681o provide.”). Further, TD Bank avers Plaintiff’s complaint alleges 10 “almost a dozen specific acts that allegedly violate the [FCRA]” and are independent of her CCRAA 11 claim. Id. at 10-12. 12 While Plaintiff’s complaint references the FCRA and asserts that Defendant’s conduct in 13 violation of FCRA caused Plaintiff to suffer damages (Doc. 1-1 at ¶¶ 35-36, 43), mere references to 14 federal statutes are not enough to establish federal jurisdiction. See id. at 13-16; see also Alan v. 15 Equifax, No. CV 1906588-DMG (ASX), 2019 WL 5801891, at *2 (C.D. Cal. Nov. 6, 2019) 16 (defendant’s alleged violations of Sections 1681n and 1681o set forth in seven paragraphs of the 17 complaint did not create a federal cause of action) (emphasis added). 18 TD Bank asks the Court to look at “the facts alleged,” and “the substance” of Plaintiff’s 19 complaint to find an FCRA claim. (Doc. 13 at 11) (quoting N. River Ins. Co. v. H.K. Constr. Corp., 20 462 F. Supp. 3d 1080, 1087 (D. Haw. 2020), J.M. v. L.A. Unified Sch. Dist., No. 18-cv-1134-CBM- 21 FFMx, 2019 WL 2871144, at *3 n. 5 (C.D. Cal. March 13, 2019)). The Court acknowledges that 22 Plaintiff generally refers to a laundry list of statutes in asking for “recompense” under “the RFDCPA, 23 FDCPA, FCRA, CA CCRAA and The California Identity Theft Law.” (Doc. 1-1 at ¶ 43).2 However, 24 the balance of Plaintiff’s complaint asserts only state-based claims against Defendants. Id. at 12-16. 25 Unlike the complaint in one of the cases cited by Defendant in opposition to remand, Plaintiff here 26 does not assert causes of action under the FCRA or otherwise plead for a remedy that is uniquely 27

28 2 Plaintiff argues this reference to the FCRA is “mere erratum.” (Doc. 8 at 8-9); see (Doc. 20 at 5) 1 available under FCRA. See (Doc. 13 at 6) (citing Tailford v. Experian Information Solutions, Inc., No. 2 SACV 19-02191JVS(KESx), 2020 WL 2464797, at *1 (C.D. Cal. May 12, 2020)). Plaintiff’s 3 avoidance of asserting any claim under FCRA or seeking relief uniquely available under FCRA 4 suggests that Plaintiff, as “master of her compliant…[pled] to avoid federal jurisdiction.” Lowdermilk 5 v. United States Bank Nat’l Assoc., 479 F.3d 994, 998-99 (9th Cir. 2007); see, e.g. Chinitz v. Experian 6 Info. Sols., Inc., No. 5:17-cv-06515-EJD, 2017 WL 5560653, at *1-2 (N.D. Cal. Nov. 20, 2017) 7 (remanding action after finding that “the CCRAA and its federal counterpart, the Fair Credit Reporting 8 Act, co-exist as separate statutory schemes … although a federal law is noted in the allegations, the 9 mere reference does not convert a state law claim into a federal cause of action.”). 10 TD Bank’s contention that Plaintiff is “engaging in artful pleading” to avoid federal 11 jurisdiction is unavailing. (Doc. 13 at 10-11). “[A]lthough [a] plaintiff is master of his [pleadings], he 12 may not avoid federal jurisdiction by omitting from the complaint allegations of federal law that are 13 essential to the establishment of his claim.” Paige v. Henry J. Kaiser Co., 826 F.2d 857, 860 (9th Cir. 14 1987). This is known as the “artful pleading doctrine,” and it applies when “a plaintiff articulates an 15 inherently federal claim in state-law terms.” Brennan v. SW. Airlines Co., 134 F.3d 1405, 1409 (9th 16 Cir. 1998). The doctrine allows courts to delve beyond the face of the state court complaint and find 17 federal question jurisdiction by recharacterizing a plaintiff’s state-law claim as a federal claim. Lippitt 18 v. Raymond James Fin. Servs., Inc., 340 F.3d 1033, 1041 (9th Cir. 2003) (internal quotation marks and 19 citations omitted). “Courts should invoke the doctrine only in limited circumstances as it raises 20 difficult issues of state and federal relationships and often yields unsatisfactory results.” Id. (internal 21 quotation marks and citation omitted). 22 Generally, courts have used the artful pleading doctrine in two broad categories of cases: (1) 23 complete pre-emption cases; and (2) substantial federal question cases. Lippitt, 340 F.3d at 1041 24 (internal citations omitted). “Subsumed within this second category are those cases where the claim is 25 necessarily federal in character, or where the right to relief depends on the resolution of a substantial, 26 disputed federal question.” Id. at 1042 (citing Brennan, 134 F.3d at 1409, Merrell Dow, 487 U.S. at 27 814). 28 1 Here, TD Bank does not (and cannot) argue that Plaintiff’s claims are completely pre-empted 2 by federal law. (Doc. 13 at 13); See Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147, 1169 (9th 3 Cir. 2009) (noting the FCRA’s pre-emption provision expressly exempts the CCRAA); Chinitz, 2017 4 WL 5560653, at *2 (“there is no basis to invoke the artful pleading doctrine under these circumstances 5 when Plaintiff has validly brought claims under a state statute [CCRAA] that is not supplanted by 6 federal law [FCRA].”). Plaintiff’s claims also do not necessarily turn on the construction of 7 substantial, disputed federal questions. While the “relief that the complaint seeks in count III is relief 8 of the kind for which the [FCRA] provides” (Doc. 13 at 9), Plaintiff’s claims do not exclusively give 9 rise to such violations. In fact, Plaintiff asks for relief that can be provided independently under state 10 law. See (Doc. 1-1 at 15) (Plaintiff requests actual, statutory, and punitive damages); Cal. Civ. Code § 11 1785.31 (the CCRAA provides for actual, statutory and punitive damages). Thus, because Plaintiff 12 need not prove Defendants violated the FCRA to obtain the relief requested, the complaint does not 13 turn on the construction of a substantial, disputed federal question, and does not confer federal 14 jurisdiction over this action. 15 Having found removal here was improper, the Court declines to grant Plaintiff’s request for 16 attorney fees. When remanding a case, the Court “may require payment of just costs and any actual 17 expenses, including attorney fees, incurred as a result of the removal.” 28 U.S.C. § 1447(c). “Absent 18 unusual circumstances, courts may award attorney’s fees under § 1447(c) only where the removing 19 party lacked an objectively reasonable basis for seeking removal.” Martin v. Franklin Capital Corp., 20 546 U.S. 132, 141 (2005). “Conversely, when an objectively reasonable basis exists, fees should be 21 denied.” Id. Generally, whether to award attorney’s fees pursuant to § 1447(c) is a matter left to the 22 Court’s discretion. Patel v. Del Taco, Inc., 446 F.3d 996, 999 (9th Cir. 2006). 23 While the Court has found that removal jurisdiction was not warranted in this case and that 24 removal was improper as a matter of law, the Court does not find that TD Bank’s position was 25 objectively unreasonable. It was not so inconceivable that TD Bank could presume a federal question 26 existed when Plaintiff referenced the FCRA in three paragraphs of her complaint and erroneously 27 requested relief under said statute. (Doc. 1-1 at ¶¶ 35-36, 43); (Doc. 8 at 8-9); (Doc. 20 at 5). 28 1 || Conclusion 2 For the foregoing reasons, IT IS HEREBY ORDERED that Plaintiff's motion to remand (Dox 3 is GRANTED IN PART AND DENIED IN PART: 4 1. Plaintiffs motion is GRANTED to the extent of remanding this action to the □□□□□□□□ 5 Court of the State of California, County of Kern; 6 2. Plaintiff’s motion is DENIED to the extent of awarding costs and fees; 7 3. TD Bank’s motion for more definite statement (Doc. 7) is DENIED AS MOOT; and 8 4. The Clerk of Court is DIRECTED to close this case. ? IS SO ORDERED. 10 | } ) Bo Dated: _ August 18, 2023 11 UNITED STATES MAGISTRATE JUDGE 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28