Kevin Gregory Hand, appearing pro se, faced foreclosure and ejectment actions in the Court of Common Pleas of Philadelphia County. The City of Philadelphia had foreclosed on his property for unpaid taxes, and KRR Capital LLC, which purchased the property at a sheriff's sale, sought to eject Hand and other occupants. Hand removed both actions to the United States District Court for the Eastern District of Pennsylvania, arguing that the City of Philadelphia acted under federal land patent authority and that he had expatriated to establish diversity jurisdiction. The District Court sua sponte remanded the case to state court, determining that the underlying actions were run-of-the-mill state law disputes lacking federal questions and that diversity jurisdiction was absent because the City of Philadelphia is a citizen of Pennsylvania. Hand appealed the remand order and the denial of his motion for reconsideration.
The Third Circuit reviewed the District Court's remand order de novo, focusing on whether federal subject matter jurisdiction existed. First, the court addressed Hand's claim of federal question jurisdiction under 42 U.S.C. § 1983 and 28 U.S.C. § 1331. The court reiterated the well-established principle that federal jurisdiction must arise from the face of the plaintiff's properly pleaded complaint, not from a defendant's anticipated defenses or counterclaims. Citing Holmes Grp., Inc. v. Vornado Air Circulation Sys., Inc. and Vaden v. Discover Bank, the court explained that Hand's assertion of federal defenses could not create federal jurisdiction where the underlying state law foreclosure and ejectment claims did not inherently involve federal questions. Second, the court rejected Hand's diversity jurisdiction argument. While Hand claimed to be a non-citizen, the presence of the City of Philadelphia as a co-defendant defeated complete diversity. The court clarified that under Moor v. Alameda County, a political subdivision of a state is a citizen of that state for diversity purposes unless it is merely an arm of the state. Since both Hand and the City of Philadelphia were citizens of Pennsylvania, complete diversity was lacking. Finally, the court noted that the federal officer removal statute, 28 U.S.C. § 1442(a)(1), did not apply because the City was not acting under color of federal office or authority in its tax foreclosure proceedings.
The case returns to the Pennsylvania state court system for resolution of the foreclosure and ejectment disputes. The decision reinforces the strict pleading requirements for establishing federal jurisdiction and confirms that municipalities are citizens of their respective states for diversity analysis. No federal court review of the underlying state law claims is available under these circumstances, and the District Court's denial of reconsideration stands.
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