United States District Court, M.D. Louisiana
RULING AND ORDER
A. JACKSON, CHIEF JUDGE
this Court is the United States Magistrate Judge's
Report and Recommendation (Doc. 21) pursuant
to 28 U.S.C. § 636(b)(1). The Report and Recommendation
addresses the Motion to Remand (Doc. 6) filed by Plaintiff,
which was opposed. (Doc. 10). This case involves a Petition
for Mortgage Foreclosure by Executory Process with Appraisal
filed by Plaintiff in state court. (Doc. 1-2). Plaintiff
alleges that Defendants defaulted on a promissory note
secured by certain real property in East Baton Rouge Parish,
and requests the principal amount of $296, 975.14, along with
other damages. (Doc. 21 at pp. 2-3). Plaintiff, a citizen of
New York, has exercised its option to accelerate payment on
the amounts owed by way of executory process against
Defendants, citizens of Louisiana, in Louisiana state court.
(Doc. 21 at pp. 2, 8). However, Defendants seek removal to
federal court on the basis of federal question jurisdiction
pursuant to 42 U.S.C § 1983 and the Fifth and Fourteenth
Amendments under 28 U.S.C. § 1331, diversity
jurisdiction under 28 U.S.C. § 1332, and Rule 5.1 of the
Federal Rules of Civil Procedure. (Id. at p. 3).
Magistrate Judge recommended that Plaintiffs Motion to Remand
be granted. (Id. at pp. 2, 14). Although Plaintiffs
Motion to Remand was untimely, given that Plaintiffs motion
was filed thirty-four days after the Notice of Removal,
untimeliness of the motion only waived procedural defects.
(Id. at p. 4-5). Therefore, the Magistrate Judge was
left to analyze whether the Court had subject matter
jurisdiction. (Doc. 21 at p. 6).
addressing this Court's federal question jurisdiction
pursuant to § 1331, the Magistrate Judge concluded that
Defendants' arguments under § 1983 and the Fifth and
Fourteenth Amendments are defenses to the foreclosure
proceeding. (Id. at p. 7). Defendants' argument
is not that Plaintiff stated a federal question in its state
court petition warranting removal to federal court, but
rather that Defendants raise federal defenses and
counterclaims to Plaintiffs petition. (Id.).
According to the "well-pleaded complaint rule, "
federal jurisdiction is conferred only when a federal
question appears on the face of the plaintiffs complaint, not
in a defendant's pleadings. Caterpillar Inc. v.
Williams, 482 U.S. 386, 392 (1987); see also PCI
Transp., Inc. v. Fort Worth & Western R. Co., 418
F.3d 535, 543 (5th Cir. 2005) ('Potential defenses .
. . do not provide a basis for removal").
addressing this Court's diversity jurisdiction pursuant
to § 1332, the Magistrate Judge concluded that although
diversity jurisdiction exists between Defendants and
Plaintiff, given that there is a controversy between citizens
of different states (Louisiana and New York) and the
requisite amount in controversy is met (Plaintiff seeks $296,
975.14 along with other damages), the foreclosure proceeding
should nonetheless be remanded to state court. (Doc. 21 pp.
8-9). A conflict arises between the right to use executory
process under Louisiana law with the federal judiciary's
obligation to exercise the original jurisdiction provided to
(Doc. 21 at p. 9). The Magistrate Judge concluded that,
"where a plaintiff has a 'right to use'
executory process, and executory process is not available to
a litigant in federal court, and that litigant has neither
consented nor converted the case to an ordinary proceeding, a
federal court does not have original jurisdiction."
(Id. at p. 10). It follows that:
A federal court cannot issue a writ of seizure and sale in an
executory proceeding because the lack of a requirement of
citation and judgment before seizure and sale of property
does not comply with Rules 4(b) and 12(a) of the Federal
Rules of Civil Procedure, which require that a summons and
complaint be served on the defendant to answer within 20
days. See FDIC v. Saxena, 1994 WL 202364
(E.D.La.1994) (unpublished). Seizure of the property became
available in federal court when the action was converted to
an ordinary proceeding, which comports with the federal
rules. See id.
First Bank & Tr. v. Swope, 2008 WL 4059860, at
*2 (E.D. La. Aug. 25, 2008); see also Midsouth Bank, N.A.
v. McZeal, 2011 WL 2173655, at *l-2 (W.D. La. June 1,
2011) ("not only is an executory proceeding predicated
on state law, see, e.g., La. Rev. Stat. Ann. §
9:5555, it cannot be prosecuted under federal law.");
Leggette v. Wash, Mut. Bank. FA, 2005 WL 2679699, at
*3-5 (N.D. Tex. Oct. 19, 2005) ("[e]xercising federal
jurisdiction over home foreclosure disputes typically
governed by private contract and state law portends a
significant transfer of judicial responsibilities from state
to federal courts."). "Litigating state-law
foreclosure lawsuits ... in a federal forum
thus!threaten[s] to affect . . . the normal
currents of litigation, ' in which foreclosure
proceedings are generally litigated in state courts."
Leggette, 2005 WL 2679699, at *4 (citing Grable
& Sons Metal Prod., Inc. v. Dante Eng'g &
Mfg., 545 U.S. 308, 319 (2005); (Doc. 21 at pp. 12-13).
This Court is therefore satisfied that the Magistrate Judge
articulated the correct legal standard.
Report and Recommendation notified the parties that, pursuant
to 28 U.S.C. § 636(b)(1), they had fourteen (14) days
from the date they received the Report and Recommendation to
file written objections to the proposed findings of fact,
conclusions of law, and recommendations therein.
(Id. at p. 1). Defendants timely filed an opposition
(Doc. 22). Plaintiff did not respond.
object to the Report and Recommendation and argue that the
challenges they have raised regarding the constitutionality
of Louisiana's executory process are "not [defenses]
as the court posits, but more precisely an attack on a
corrupt judicial proceeding inherently flawed. [Defendants]
attack the right to foreclose under the theory, as
unconstitutional versus raising a defense to the
proceeding." (Doc. 22 at p. 5). However, such
contentions are unsupported by law or legal authority.
Furthermore, Defendants object to the Magistrate Judge's
finding that foreclosure proceedings should not be litigated
in federal courts because such proceedings do not comport
with federal law. (Doc. 22 at p. 6; Doc. 21 at pp. 9-10).
Defendants support their objection by arguing
thatfi[w]hile such [executory] proceedings
sounding in foreclosure may ... in the federal context be
'subject to dismissal/ they in no way are mandated to be
dismissed from the federal system . . . ." (Doc 22 at
pp. 6-7). Defendants attempt to distinguish the Magistrate
Judge's citation to F.D.I.C v. Saxena by noting
that although an executory proceeding under Louisiana law
does not comport with the requirements of the Federal Rules
of Civil Procedure, nothing in the text of F.D.I.C v.
Saxena states that foreclosure cases cannot be litigated
in a federal court. This Court agrees with this contention.
Indeed, there is no absolute bar to litigating foreclosure
proceedings in federal court; however, to be litigated in
federal court a foreclosure proceeding must be converted from
executory process to ordinary process by the plaintiff or
upon his consent. Therefore, the Court is satisfied that the
Magistrate Judge applied the correct legal standard.
carefully considered the underlying Complaint, the instant
motions, and related filings, the Court approves the
Magistrate Judge's Report and Recommendation, and hereby
adopts its findings of fact, conclusions of law, and
IT IS ORDERED that the Magistrate
Judge's Report and Recommendation (Doc. 21) is
ADOPTED as the Court's opinion herein.
IS FURTHER ORDERED that Plaintiffs Motion to
Remand (Doc. 6) is GRANTED.