U.S. Bank Trust, N.A. v. Myron Hale, 2:20-cv-07947

Plaintiff U.S. Bank Trust N.A., as Trustee for LSF9 Master Participation Trust, filed an unlawful detainer action in Los Angeles County Superior Court seeking possession and related relief against defendants including Myron Hale.
Defendant Hale removed the action to federal court alleging federal-question jurisdiction under 28 U.S.C. §§ 1331 and 1441 and sought to proceed in forma pauperis.
The complaint on its face asserted only an unlawful detainer claim; no federal cause of action was pleaded.
Defendant asserted as a defense that Plaintiff violated 12 U.S.C. § 3708 and relied on that federal law to justify removal.
The district court emphasized the duty to assess subject-matter jurisdiction, the defendant’s burden to prove removability, and the strong presumption against removal.
The court concluded there was no federal-question jurisdiction (federal defenses do not support removal) and remanded the case to state court on September 3, 2020.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the case "arises under" federal law such that removal under § 1441/§ 1331 is proper	Complaint raises only unlawful detainer (state law); no federal claim pled	Removal justified because federal question exists or arises from defenses and alleged violation of federal statute	Remand — no federal-question jurisdiction; complaint presents only state-law unlawful detainer
Whether a federal defense (alleged violation of 12 U.S.C. § 3708) permits removal	Federal defenses cannot transform a state claim into a federal cause of action	Federal statutory violation as defense supplies the federal question for removal	Held against removal — federal defenses (even if dispositive) do not authorize removal (Caterpillar rule)

Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375 (1994) (federal courts are courts of limited jurisdiction; jurisdiction must be established)
Arbaugh v. Y & H Corp., 546 U.S. 500 (2006) (court must always ensure it has subject-matter jurisdiction)
Scholastic Entm’t, Inc. v. Fox Entm’t Grp., Inc., 336 F.3d 982 (9th Cir. 2003) (notice/response requirements differ when dismissing for lack of jurisdiction)
Scott v. Breeland, 792 F.2d 925 (9th Cir. 1986) (defendant removing bears burden of proving federal jurisdiction)
Gaus v. Miles, Inc., 980 F.2d 564 (9th Cir. 1992) (strong presumption against removal jurisdiction)
Caterpillar Inc. v. Williams, 482 U.S. 386 (1987) (federal defense does not create federal-question jurisdiction)