Guinasso v. Pacific First Federal Sav. and Loan Ass'n, No. 80-3099

CourtUnited States Courts of Appeals. United States Court of Appeals (9th Circuit)
Writing for the CourtBefore WRIGHT, CHOY and FERGUSON; WRIGHT
PartiesCharles B. GUINASSO and Rosario V. Guinasso, husband and wife, Plaintiffs- Appellants, v. PACIFIC FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION, a federal savings and loan association, Defendant-Appellee.
Decision Date19 November 1981
Docket NumberNo. 80-3099

Page 1364

656 F.2d 1364
Charles B. GUINASSO and Rosario V. Guinasso, husband and
wife, Plaintiffs- Appellants,
v.
PACIFIC FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION, a
federal savings and loan association, Defendant-Appellee.
No. 80-3099.
United States Court of Appeals,
Ninth Circuit.
Argued and Submitted July 16, 1981.
Decided Sept. 21, 1981.
Rehearing and Rehearing En Banc Denied Nov. 19, 1981.

Page 1365

Phil Goldsmith (argued), Henry A. Carey, Henry A. Carey, P.C., Portland, Or., for plaintiffs-appellants.

Peter G. Voorhies (argued), John M. Cowden, Wood, Tatum, Mosser, Brooke & Holden, Portland, Or., for defendant-appellee.

Appeal from the United States District Court for the District of Oregon.

Before WRIGHT, CHOY and FERGUSON, Circuit Judges.

WRIGHT, Circuit Judge:

INTRODUCTION

The Guinassos assumed a home loan financed by Pacific First Federal Savings and Loan Association. 1 Pursuant to a regulation promulgated by the Federal Home Loan Bank Board, 12 C.F.R. § 545.6-11 (1975), Pacific created escrow accounts with funds collected from mortgagors for taxes and insurance. When the Guinassos' deed of trust was executed, the regulation did not state whether associations were required to pay interest on such accounts. 2 Pacific paid none.

This suit is a class action by the Guinassos for themselves and others similarly situated to recover interest on the funds held in escrow. The complaint was for breach of contract, violation of duties as a trustee, and unjust enrichment. It was filed in state court and phrased wholly in terms of state law. It presented a recognized cause of action under the common law of Oregon. See Derenco, Inc. v. Benjamin Franklin Federal Savings & Loan Ass'n, 281 Or. 533, 577 P.2d 477, 491, cert. denied, 439 U.S. 1051, 99 S.Ct. 733, 58 L.Ed.2d 712 (1978).

Pacific removed the action to federal district court, arguing that federal law preempted the Oregon claim. The district court held that it had jurisdiction under 28 U.S.C. § 1337, 3 and it agreed that the state claim was preempted. After denying the plaintiffs' motion to remand, it certified the case for interlocutory appeal under 28 U.S.C. § 1292(b). We granted leave to appeal.

REMOVAL JURISDICTION

A suit can be removed to federal court under 28 U.S.C. § 1441(a) only if it could have been brought there originally. Snow v. Ford Motor Co., 561 F.2d 787, 789 (9th Cir. 1977). This suit could have been brought in federal court if it arose under federal law, or under an act of Congress regulating commerce. See note 3 supra.

A suit arises under federal law within 28 U.S.C. § 1331 if the complaint, properly pleaded, presents a substantial dispute

Page 1366

over the effect of federal law, and the result turns on the federal question. See Spokane County Legal Services, Inc. v. Legal Services Corp., 614 F.2d 662, 667 (9th Cir. 1980); Standage Ventures, Inc. v. Arizona, 499 F.2d 248, 249 (9th Cir. 1974).

Similarly, a suit arises under an act of Congress regulating commerce within 28 U.S.C. § 1337 if it seeks relief granted or implied by the act or "hinges on" the act's interpretation. Garrett v. Time-D.C., Inc., 502 F.2d 627, 629 (9th Cir. 1974), cert. denied, 421 U.S. 913, 95 S.Ct. 1569, 43 L.Ed.2d 778 (1975).

A substantial proposition of federal law must form "a direct and essential element of the plaintiff's cause of action." Smith v. Grimm, 534 F.2d 1346, 1350 (9th Cir.), cert. denied, 429 U.S. 980, 97 S.Ct. 493, 50 L.Ed.2d 589 (1976). 4 Jurisdiction may not rest on propositions that merely anticipate a federal defense. United Air Lines v. Division of Industrial Safety, 633 F.2d 814, 816 (9th Cir. 1980).

Federal preemption is ordinarily a matter to be raised in defense. See Gully v. First Nat'l Bank, 299 U.S. 109, 116, 57 S.Ct. 96, 99, 81 L.Ed. 70 (1936). Taken alone, it is not a basis for removal. Washington v. American League of Professional Baseball Clubs, 460 F.2d 654, 660 (9th Cir. 1972).

These principles indicate that the district court lacked jurisdiction.

Pacific maintains that jurisdiction is proper under Meyers v. Beverly Hills Federal Savings & Loan Ass'n, 499 F.2d 1145 (9th Cir. 1974). In Meyers, the plaintiffs sought to have declared invalid under California law prepayment penalties that were imposed by federal savings and loan associations. Id. at 1145-46. The suit was brought in state court and removed to federal court. Id. Affirming the district court, we held that Congress had preempted state regulation of prepayment penalties imposed by federal associations. Id. at 1147.

We described the case's procedural history but did not comment on the propriety of removal. See id. at 1146-47. Pacific contends that Meyers implicitly authorizes removal of all preempted claims against federal savings and loan associations. Because the jurisdictional issue was not explicitly decided and the First Circuit has reached a contrary result, we are not bound by such an implication. 5

Pacific relies also on Johnson v. England, 356 F.2d 44 (9th Cir.), cert. denied, 384 U.S. 961, 86 S.Ct. 1587, 16 L.Ed.2d 673 (1966). The complaint in Johnson invoked state law in a labor dispute. Id. at 45. We found removal proper because § 301 of the Labor Management Relations Act "operated to preempt this field of law." Id. at 48. "(A) fair construction of the complaint ... must be that it is necessarily one pursuant to § 301(a) ...." Id.

Pacific's reliance on Johnson is misplaced. Johnson merely applied Textile Workers Union v. Lincoln Mills, 353 U.S. 448, 77 S.Ct. 912, 1 L.Ed.2d 972 (1957), in which the Supreme Court held that federal common law developed by the federal courts governs the entire subject matter of § 301(a). Id. at 456, 77 S.Ct. at 917.

"(T)his interpretation ... obviates...

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49 practice notes
  • Hunter v. United Van Lines, No. 83-5911
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • January 29, 1985
    ...Garibaldi v. Lucky Food Stores, Inc., 726 F.2d 1367 (9th Cir.1984); Guinasso v. Pacific First Federal Savings and Loan Association, 656 F.2d 1364 (9th Cir.1981), cert. denied, 455 U.S. 1020, 102 S.Ct. 1716, 72 L.Ed.2d 138 (1982). We recognize defendants' very real and, in our view, substant......
  • Begay v. Kerr-McGee Corp., KERR-M
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • June 11, 1982
    ...de Corp., No. 80-4338, --- F.2d ---- at ---- (9th Cir. April 23, 1982). See Guinasso v. Pacific First Federal Savings & Loan Ass'n, 656 F.2d 1364, 1366 (9th Cir. 1981). We therefore affirm the district court's dismissal, for lack of jurisdiction, of those portions of the fourth amended comp......
  • Garibaldi v. Lucky Food Stores, Inc., No. 83-5686
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • February 27, 1984
    ...v. Nalore, 455 U.S. 1021, 102 S.Ct. 1719, 72 L.Ed.2d 140 (1982); Guinasso v. Pacific First Federal Savings & Loan Association, 656 F.2d 1364, 1367 (9th Cir.1981), cert. denied, 455 U.S. 1020, 102 S.Ct. 1716, 72 L.Ed.2d 138 (1982); Washington v. American League of Professional Baseball Clubs......
  • Martin v. WILKES-BARRE PUB. CO., Civ. No. 83-0680.
    • United States
    • United States District Courts. 3th Circuit. United States District Court of Middle District of Pennsylvania
    • July 1, 1983
    ...Cir.1981), cert. denied, 455 U.S. 1021, 102 S.Ct. 1719, 72 L.Ed.2d 140 (1982); Guinasso v. Pacific First Federal Savings & Loan Assoc., 656 F.2d 1364 (9th Cir.1981), cert. denied, 455 U.S. 1020, 102 S.Ct. 1716, 72 L.Ed.2d 138 (1982); Madsen v. Prudential Federal Savings & Loan Assoc., 635 F......
  • Request a trial to view additional results
49 cases
  • Hunter v. United Van Lines, No. 83-5911
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • January 29, 1985
    ...Garibaldi v. Lucky Food Stores, Inc., 726 F.2d 1367 (9th Cir.1984); Guinasso v. Pacific First Federal Savings and Loan Association, 656 F.2d 1364 (9th Cir.1981), cert. denied, 455 U.S. 1020, 102 S.Ct. 1716, 72 L.Ed.2d 138 (1982). We recognize defendants' very real and, in our view, substant......
  • Begay v. Kerr-McGee Corp., KERR-M
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • June 11, 1982
    ...de Corp., No. 80-4338, --- F.2d ---- at ---- (9th Cir. April 23, 1982). See Guinasso v. Pacific First Federal Savings & Loan Ass'n, 656 F.2d 1364, 1366 (9th Cir. 1981). We therefore affirm the district court's dismissal, for lack of jurisdiction, of those portions of the fourth amended comp......
  • Garibaldi v. Lucky Food Stores, Inc., No. 83-5686
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • February 27, 1984
    ...v. Nalore, 455 U.S. 1021, 102 S.Ct. 1719, 72 L.Ed.2d 140 (1982); Guinasso v. Pacific First Federal Savings & Loan Association, 656 F.2d 1364, 1367 (9th Cir.1981), cert. denied, 455 U.S. 1020, 102 S.Ct. 1716, 72 L.Ed.2d 138 (1982); Washington v. American League of Professional Baseball Clubs......
  • Martin v. WILKES-BARRE PUB. CO., Civ. No. 83-0680.
    • United States
    • United States District Courts. 3th Circuit. United States District Court of Middle District of Pennsylvania
    • July 1, 1983
    ...Cir.1981), cert. denied, 455 U.S. 1021, 102 S.Ct. 1719, 72 L.Ed.2d 140 (1982); Guinasso v. Pacific First Federal Savings & Loan Assoc., 656 F.2d 1364 (9th Cir.1981), cert. denied, 455 U.S. 1020, 102 S.Ct. 1716, 72 L.Ed.2d 138 (1982); Madsen v. Prudential Federal Savings & Loan Assoc., 635 F......
  • Request a trial to view additional results

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