Verduzco et al v. Indymac Bank Home Loan Servicing et al, No. 2:2009cv02371 - Document 60 (E.D. Cal. 2010)
Court Description: ORDER GRANTING DEFENDANTS' MOTIONS TO DISMISS signed by Judge Garland E. Burrell, Jr. on 5/27/2010 ORDERING that Pltfs' TILA and RESPA claims are DISMISSED with prejudice and Pltfs' remaining state law claims are DISMISSED without prejudice under 28 U.S.C. § 1367(c)(3). CASE CLOSED. (Engbretson, K.)
Download PDF
<![CDATA[
Verduzco et al v. Indymac Bank Home Loan Servicing et al Doc. 60 1 2 3 4 5 6 7 IN THE UNITED STATES DISTRICT COURT 8 FOR THE EASTERN DISTRICT OF CALIFORNIA 9 10 ARTURO VERDUZCO and DELILA VERDUZCO, 11 Plaintiffs, 12 v. 13 14 15 INDYMAC MORTGAGE SERVICES, a division of ONE WEST BANK FSB; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.; SIERRA PACIFIC MORTGAGE; WBJ, INC.; DANIEL RUPP, 16 Defendants. 17 18 ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) 2:09-cv-02371-GEB-KJN ORDER GRANTING DEFENDANTS’ MOTIONS TO DISMISS PLAINTIFFS’ FEDERAL CLAIMS AND DECLINING TO EXERCISE SUPPLEMENTAL OVER PLAINTIFFS’ REMAINING STATE CLAIMS* Defendants IndyMac Mortgage Services, a division of One West 19 Bank FSB (“IndyMac”) and Mortgage Electronic Registration Systems, 20 Inc. (“MERS”) filed a motion to dismiss Plaintiffs’ first amended 21 complaint under Federal Rule of Civil Procedure 12(b)(6), for failure 22 to state a claim upon which relief can be granted. 23 Pacific Mortgage (“Sierra”) also filed a motion to dismiss under Rule 24 12(b)(6). Plaintiffs oppose each motion.1 Defendant Sierra For the reasons stated 25 * 26 27 28 argument. This matter is deemed suitable for decision without oral E.D. Cal. R. 230(g). 1 Plaintiffs filed their opposition briefs late, thus indicating Plaintiffs are willing to risk being sanctioned for failure to comply (continued...) 1 Dockets.Justia.com 1 below, Plaintiffs’ federal claims are dismissed with prejudice and 2 Plaintiffs’ state claims are dismissed without prejudice under 28 3 U.S.C. § 1367(c)(3). 4 I. 5 LEGAL STANDARD A Rule 12(b)(6) motion “challenges a complaint’s compliance 6 with . . . pleading requirements.” 7 Servicing, LP, No. S-09-1316 LKK/DAD, 2009 WL 3429622, at *1 (E.D. 8 Cal. Oct. 22, 2009). 9 statement of the claim showing that the pleader is entitled to relief Champlaie v. BAC Home Loans A pleading must contain “a short and plain 10 . . . .” 11 defendant fair notice of what the [plaintiff’s] claim is and the 12 grounds upon which relief rests . . . .” 13 Twombly, 550 U.S. 544, 555 (2007). 14 labels and conclusions or a formulaic recitation of the elements of a 15 cause of action will not do. 16 tenders naked assertions devoid of further factual enhancement.” 17 Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). 18 Fed. R. Civ. P. 8(a)(2). The complaint must “give the Bell Atlantic Corp. v. Further, “[a] pleading that offers Nor does a complaint suffice if it To avoid dismissal, a plaintiff must allege “only enough 19 facts to state a claim to relief that is plausible on its face.” 20 Twombly, 550 U.S. at 547. 21 plaintiff pleads factual content that allows the court to draw the 22 reasonable inference that the defendant is liable for the misconduct 23 alleged.” 24 more than “a sheer possibility that a defendant has acted unlawfully.” 25 Id. 26 defendant’s liability, it stops short of the line between possibility “A claim has facial plausibility when the Iqbal, 129 S. Ct. at 1949. Plausibility, however, requires “When a complaint pleads facts that are merely consistent with a 27 28 1 (...continued) with the filing deadline in the applicable local rule. 2 1 and plausibility of entitlement to relief.” 2 citation omitted). 3 Id. (quotations and In evaluating a dismissal motion under Rule 12(b)(6), the 4 court “accept[s] as true all facts alleged in the complaint, and 5 draw[s] all reasonable inferences in favor of the plaintiff.” 6 v. Ashcroft, 580 F.3d 949, 956 (9th Cir. 2009). 7 conclusory statements nor legal conclusions are entitled to a 8 presumption of truth. 11 However, neither See Iqbal, 129 S. Ct. at 1949-50. 9 II. 10 Al-Kidd A. BACKGROUND Plaintiffs’ Allegations Plaintiffs allege that in July 2005, Defendant Daniel Rupp 12 represented that he was a loan officer for Defendant WBJ, Inc. and 13 solicited Plaintiffs to refinance the loan on their residence, located 14 at 425 South Sixth Street in Oakdale, Sacramento County, California. 15 (First Amended Compl. (“FAC”) ¶¶ 7, 39.) 16 told them “he could get the ‘best deal’ and the ‘best interest rates’ 17 available on the market.” 18 Rupp overstated their income on their loan applications without their 19 knowledge or permission. 20 (Id. ¶ 41.) Plaintiffs allege that Rupp Plaintiffs also allege that (Id. ¶ 42.) Plaintiffs allege that on October 7, 2005 they obtained a 21 $256,000 loan. 22 home equity line of credit. 23 terms of the loans were memorialized in two Promissory Notes, which 24 was secured by two Deeds of Trust on the Property. 25 identified Greenhead Investments, Inc. as Trustee, and Defendant 26 Sierra as Lender.” (Id. ¶ 50.) 27 28 (Id. ¶ 43, 50.) Plaintiffs also obtained a $32,000 (Id.) Plaintiffs allege: “The The Deeds of Trust Plaintiffs allege they “were not given a copy of any of the loan documents prior to [the] closing as required” and “were only 3 1 given a few minutes to sign the documents.” 2 also allege they “did not receive the required copies of a proper 3 notice of cancellation.” 4 “[w]hen the loan was consummated, [they] did not receive the required 5 documents and disclosures, including, but not limited to the TILA 6 disclosure, and the required number of copies of the Notice of Right 7 to Cancel stating the date that the rescission period expires.” 8 ¶ 65.) 9 B. (Id.) (Id. ¶ 48.) Plaintiffs Plaintiffs further allege that (Id. Procedural Background 10 Plaintiffs filed their initial complaint in this federal 11 court on August 25, 2009, alleging eleven claims under federal and 12 California law against eight named defendants. 13 MERS; Sierra; and WBJ, Inc. and Daniel Rupp each filed dismissal 14 motions on October 1, 10, and 23, 2009, respectively. 15 motions, however, were mooted when Plaintiffs filed their now 16 operative, first amended complaint on November 10, 2009. 17 first amended complaint is the subject of each Defendants’ now pending 18 dismissal motion. 19 a Truth in Lending Act claim alleged against Sierra; and (2) a Real 20 Estate Settlement Procedures Act claim alleged against Sierra and 21 IndyMac. 24 III. 25 26 A. 1. These dismissal Plaintiffs’ Plaintiffs’ only remaining federal claims are: (1) 22 23 Defendants IndyMac and DISCUSSION Defendants’ Dismissal Motion Federal Claims a. Truth in Lending Act Sierra argues Plaintiffs’ Truth in Lending Act (“TILA”) 27 claims for damages and rescission should be dismissed since they are 28 time-barred by the applicable statute of limitations. 4 (Sierra Mot. to 1 Dismiss 5:1-7:13.) 2 filed because the doctrine of equitable tolling suspends the 3 prescribed statute of limitations periods. 4 Mot. 9:7-10:14.) Plaintiffs respond that their claims are timely (Plts.’ Opp’n to Sierra 5 i. 6 Plaintiffs allege Sierra “violated TILA by”: 7 failing to provide required disclosures prior to consummation of the transaction as required by 15 U.S.C. § 1638, fail[ing] to make required disclosures clearly and conspicuously in writing as required by 15 U.S.C. § 1632(a), 12 C.F.R § 226.5(a)(1), fail[ing] to timely deliver to Plaintiffs TILA notices as required by 15 U.S.C. § 1638(b), and fail[ing] to disclose all finance charge details, the annual percentage rate based upon properly calculated and disclosed finance charges and amounts financed as defined by 15 U.S.C. § 1602(u). 8 9 10 11 12 TILA Damages Claim 13 14 (FAC ¶ 84.) 15 [their] loan transactions were purposefully hidden to prevent 16 Plaintiffs from discovering the true nature of the transactions” and 17 “[the] [f]acts surrounding these transactions continue to be hidden 18 from the Plaintiffs to this day.” 19 Plaintiffs further allege that “[t]he facts surrounding (FAC ¶ 49.) TILA “requires creditors . . . provide borrowers with clear 20 and accurate disclosures of terms [of their loan including] . . . 21 finance charges, annual percentage rates of interest, and the 22 borrower’s rights.” 23 (1998) (citing 15 U.S.C. §§ 1631, 1632, 1635, 1638)). 24 satisfy TILA’s disclosure requirements subjects a lender to “statutory 25 and actual damages traceable to a lender’s failure to make the 26 requisite disclosures . . . .” 27 TILA, however, imposes a one-year statute of limitations within which 28 a claim for damages “may be brought.” Beach v. Ocwen Fed. Bank, 523 U.S. 410, 412 Failure to Id. (citing 15 U.S.C. § 1640(e)). 5 15 U.S.C. § 1640(e). “[A]s a 1 general rule[,] [this] limitations period starts [to run] at the 2 consummation of the transaction.” 3 915 (9th Cir. 1986). 4 “the time that a consumer becomes contractually obligated on a credit 5 transaction.” 6 1009 (9th Cir. 2003) (quoting 12 C.F.R. § 226.2(a)(13)). 7 King v. California, 784 F.2d 910, “Consummation” is defined under the statute as Grimes v. New Century Mortgage Corp., 340 F.3d 1007, Plaintiffs allege they became “contractually obligated on a 8 credit transaction” on October 7, 2005, when they entered their loans. 9 (FAC ¶ 50.) The statute of limitations for bringing their TILA 10 damages claim, therefore, expired on October 7, 2006. 11 however, did not file their original complaint in this case until 12 August 25, 2009. 13 limitations should be equitably tolled because “Sierra failed to 14 provide the requisite disclosures to the Plaintiffs at the inception 15 of the loan.” 16 further argue they “were not given a copy of any of the loan documents 17 prior to closing” nor were they “allowed to review the documents [or] 18 explained the terms of the loan.” 19 Plaintiffs, Nonetheless, Plaintiffs argue the statute of (Plts.’ Opp’n to Sierra Mot. 10:6-7.) Plaintiffs (Id. 9:23-25.) The doctrine of equitable tolling may “suspend the 20 limitations period” “in certain circumstances,” such as when the 21 borrower did not have reasonable opportunity to discover the alleged 22 fraud or nondisclosures that form the basis of the their TILA claim. 23 King v. California, 784 F.3d 910, 915 (9th Cir. 1986). 24 tolling focuses on whether there was excusable delay by the plaintiff 25 and may be applied if, despite all due diligence, a plaintiff is 26 unable to obtain vital information bearing on the existence of his 27 claim.” 28 Cir. 2006) (quotations and citations omitted) (emphasis in original). “Equitable Huseman v. Icicle Seafoods, Inc., 471 F.3d 1116, 1120 (9th 6 1 “Because the applicability of [equitable tolling] often depends upon 2 matters outside the pleadings, it is not generally amendable to 3 resolution on a Rule 12(b)(6) motion.” 4 United States, 68 F.3d 1204, 1206 (9th Cir. 1995) (quotations and 5 citation omitted). 6 facts demonstrating that the alleged TILA violations could not have 7 been discovered by due diligence during the one-year statutory period, 8 equitable tolling should not be applied and dismissal at the pleading 9 stage is appropriate. Supermail Cargo, Inc. v. However, when a plaintiff fails to allege any See Meyer v. Ameriquest Mortgage Co., 342 F.3d 10 899, 902 (9th Cir. 2003) (dismissing TILA claim, despite request for 11 equitable tolling, because plaintiff was in possession of all loan 12 documents and did not allege any concealment or other conduct that 13 would have prevented discovery of the alleged TILA violations during 14 the one year limitations period). 15 Plaintiffs’ allegations are wholly insufficient to justify 16 equitably tolling the statute of limitations period applicable to 17 their TILA damages claim. 18 complain occurred at or prior to the closing of Plaintiffs’ loan 19 transaction in October 2005, nearly four years prior to the 20 commencement of this lawsuit. 21 they were prevented from discovering Sierra’s alleged TILA violations 22 within the one year statutory period. 23 Servicing, Inc., No. CIV 2:09-578 WBS DAD, 2009 WL 4674904, at *3 24 (E.D. Cal. Dec. 4, 2009) (finding equitable tolling inapplicable where 25 plaintiff did not explain “what prevented her from later reviewing the 26 loan documents, which she admittedly was given at closing”). 27 // 28 // The TILA violations about which Plaintiffs Plaintiffs have failed to explain why 7 See Blanco v. Am. Home Mortg. 1 Nothing indicates that, at the time of the closing, [P]laintiffs were unaware of the fact that they had been prevented from reviewing [their loan] documents, or that [P]laintiffs were somehow unable to bring a claim based on this purported wrongdoing. Similarly, a failure to make disclosures does not itself prevent a borrower from learning that the disclosures should have been made . . . . 2 3 4 5 6 Baldain v. Am. Home Mortgage Servicing, Inc., No. CIV S-09-0931 7 LKK/GGH, 2010 WL 56143, at *9 (E.D. Cal. Jan. 5, 2010). 8 Since Plaintiffs have not alleged sufficient facts to invoke 9 the doctrine of equitable tolling, their TILA damages claim is time10 barred. Further, Sierra’s initial dismissal motion notified 11 Plaintiffs that their claim was barred by the statute of limitations. 12 However, Plaintiffs failed to allege sufficient facts in their first 13 amended complaint to justify drawing the inference that the doctrine 14 of equitable tolling suspends the applicable statute of limitations 15 period. Nor does Plaintiffs’ opposition brief provide a basis for 16 allowing Plaintiffs an additional opportunity to amend their equitable 17 tolling allegations. Therefore, Plaintiffs’ TILA damages claim is 18 dismissed with prejudice. 19 ii. TILA Rescission Claim 20 Plaintiffs also allege that they “have a continuing right to 21 rescind [their] loan[s] . . . pursuant to 15 U.S.C. § 1635(a) and (f) 22 and 12 C.F.R. § 226.23(b)(5).” (FAC ¶ 83.) Under 15 U.S.C. § 23 1635(a), a borrower has until midnight on the third business day 24 following the consummation of the loan to rescind the transaction. A 25 borrower’s right to rescind the loan transaction, however, is extended 26 to three years if the lender either fails to deliver to the borrower 27 “all material disclosures” or “the notice of right to rescind.” 28 8 12 1 C.F.R. §§ 226.23(a)(3), (b)(1). 2 rescission “expire[s] three years after the date of the consummation 3 of the transaction . . . .” 4 limitations period “represents an absolute limitation on rescission 5 actions [and] bars any claims filed more than three years after the 6 consummation of the transaction. 7 repose, depriving the courts of subject matter jurisdiction when a § 8 1635 claim is brought outside of the three-year limitation period.” 9 Miguel v. Country Funding Corp., 309 F.3d 1161, 1164 (9th Cir. 2002) 10 Nonetheless, a borrower’s right to 15 U.S.C. § 1635(f). This three-year Therefore, § 1635(f) is a statute of (quotations and citation omitted). 11 Since Plaintiffs’ consummated their loans on October 7, 12 2005, the three-year statute of limitations period expired on October 13 7, 2008. 14 this case until August 25, 2009. 15 of rescission by and through [the filing of their] First Amended 16 Complaint.” 17 rescind . . . within the three-year limitation period, [their] right 18 to rescind [has] expired” and the court lacks subject matter 19 jurisdiction over their TILA rescission claim. 20 1164-65. 21 with prejudice. 22 23 b. Plaintiffs, however, did not file their initial complaint in (FAC ¶ 83.) Plaintiffs allege they “give notice “Because [Plaintiffs] did not attempt to Miguel, 309 F.3d at Therefore, Plaintiffs’ TILA rescission claim is dismissed Real Estate Settlement Procedures Act Defendants Sierra and IndyMac each argue Plaintiffs’ Real 24 Estate Settlement Procedures Act (“RESPA”) claims should be dismissed. 25 These Defendants contend Plaintiffs have not sufficiently pled a 26 violation of RESPA; their claim under 12 U.S.C. § 2607 is barred by 27 the one-year statute of limitations; and Plaintiffs failed to allege 28 actual damages. (Sierra Mot. to Dismiss 9:26-11:13; IndyMac Mot. to 9 1 Dismiss 13:5-15:2.) 2 RESPA caused them damage.” 3 17:11.) 4 limitations period should be equitably tolled. 5 Sierra Mot. 14:6-19.) Plaintiffs rejoin that Defendants’ “violations of (Plts.’ Opp’n to IndyMac Mot. 16:27- 6 Further, Plaintiffs argue that any applicable statute of (Plts.’ Opp’n to Plaintiffs allege in their complaint that Defendants 7 violated various provisions of 12 U.S.C. § 2605 by failing to provide 8 Plaintiffs with notice of the assignment, sale or transfer of the 9 servicing rights to Plaintiffs’ loan and by failing to provide a 10 proper response to a qualified written request sent by Plaintiffs. 11 (FAC ¶¶ 116-118, 120, 122.) 12 violated “12 U.S.C. § 2607 by receiving ‘kickbacks’ or referral fees 13 disproportional to the work performed.” 14 allege that as a result of Defendants’ RESPA violations, Plaintiffs 15 “have suffered and continue to suffer damages and costs of suit.” 16 (Id. ¶ 124.) 17 a. 18 Plaintiffs also allege these Defendants (Id. ¶ 119.) Plaintiffs Section 2605 Claims Section 2605(f) imposes liability on loan servicers for 19 actual and statutory damages for any failure to comply with the 20 requirements of section 2605. 21 provides: 22 23 24 25 26 12 U.S.C. § 2605(f). Section 2605(f) Whoever fails to comply with any provision of [section 2605] shall be liable to the borrower for each such failure to the following amounts . . . . In the case of any action by an individual, an amount equal to the sum of – (A) any actual damages to the borrower as a result of the failure; and (B) any additional damages, as the court may allow, in the case of a pattern or practice of noncompliance with the requirements of this section, in an amount not to exceed $1,000. 27 28 10 1 12 U.S.C. § 2605(f)(1)(A),(B). 2 explicitly make a showing of damages part of the pleading standard, a 3 number of courts have read the statute as requiring a showing of 4 pecuniary damages in order to state a claim [for actual damages under 5 section 2605 of RESPA].” 6 No. CIV 2:09-2385 WBS EFB, 2010 WL 476674, at *5 (E.D. Cal. Feb. 3, 7 2010) (quoting Allen v. United Fin. Mortgage Corp., No. 09-2507 SC, 8 2009 WL 2984170, at *5 (N.D. Cal. Sept. 15, 2009)). 9 breach of RESPA duties alone does not state a claim . . . . While section 2605(f)(1)(A) “does not Pok v. Am. Home Mortgage Servicing, Inc., “[A]lleging a 10 Plaintiff[s] must, at a minimum, also allege that the breach resulted 11 in actual damages.” 12 Bank FSB, 410 F. Supp. 2d 374, 383 (D.N.J. 2006)); see also Lal v. Am. 13 Home Servicing, Inc., 680 F. Supp. 2d 1218, 1223 (E.D. Cal. 2010) 14 (finding that plaintiff alleging a RESPA claim under section 2605 must 15 allege a loss related to the alleged violation); Allen, 660 F. Supp. 16 2d at 1097 (requiring plaintiff to allege pecuniary loss to state a 17 RESPA claim for actual damages); Singh v. Washington Mut. Bank, No. C- 18 09-2771 MMC, 2009 WL 2588885, at *5 (N.D. Cal. Aug. 19, 2009) 19 (dismissing RESPA claim since “plaintiffs have failed to allege they 20 suffered any actual damages as a result” of defendants’ alleged RESPA 21 violation). 22 liberally. 23 09-1504 LKK/KJM, 2009 WL 2880393, at *15 (E.D. Cal. Sept. 3, 2009). 24 Nonetheless, “the loss alleged must be related to the RESPA violation 25 itself.” 26 file suit [does not suffice] as a harm warranting actual damages. 27 such were the case, every RESPA suit would inherently have a claim for 28 damages built in.” Id. (quoting and citing Hutchinson v. Del. Sav. This pleading requirement, however, is interpreted Yulaeva v. Greenpoint Mortgage Funding, Inc., No. CIV S- Lal, 680 F. Supp. 2d at 1223. Id. 11 Further, “simply having to If 1 Plaintiffs merely allege that as a result of Defendants’ 2 alleged RESPA violations, they “have suffered and continue to suffer 3 damages and costs of suit.” 4 pleading standard for harm, this level of generality fails.” 5 2010 WL 476674, at *5 (finding same allegation of harm insufficient to 6 state a section 2605 claim for actual damages); see also Lal, 680 F. 7 Supp. 2d at 1223 (stating that “simply having to file suit [does not] 8 suffice” to state a section 2605 claim for actual damages). 9 (FAC ¶ 124.) “Even under a liberal Pok, IndyMac’s initial dismissal motions alerted Plaintiffs to 10 this defect in their section 2605 claim. 11 amended complaint includes the same deficient allegation. 12 allowing amendment would be futile and Plaintiffs’ section 2605 claim 13 is dismissed with prejudice. However, Plaintiffs’ first Therefore, 14 ii. 15 Section 2614 provides that a section 2607 claim “may be Section 2607 Claim 16 brought . . . [within] 1 year . . . from the date of the occurrence of 17 the violation . . . .” 18 2607 is designed to remedy is the potential for unnecessarily high 19 settlement charges, . . . caused by kickbacks, fee-splitting, and 20 other practices that suppress price competition for settlement 21 services. 22 tainted service, typically at the closing.” 23 Serv. Corp., No. 09-CV-01789 OWW-DLB, --- F. Supp. 2d ----, 2010 WL 24 1136005, at *10 (E.D. Cal. Mar. 22, 2010) (quoting Snow v. First Am. 25 Title Ins. Co., 332 F.3d 356, 359-60 (5th Cir. 2003)). 26 “[b]arring extenuating circumstances, the date of the occurrence of 27 the violation is the date on which the loan closed.” 28 Savings Bank, FSB, 616 F. Supp. 2d 1007, 1020 (C.D. Cal. 2009) 12 U.S.C. § 2614. “The primary ill that § This ill occurs, if at all, when the plaintiff pays for the 12 Jensen v. Quality Loan Therefore, Ayala v. World 1 (quoting Bloom v. Martin, 865 F. Supp. 1386-87 (N.D. Cal. 1994), aff’d 2 by, 77 F.3d 318 (9th Cir. 1996)); see also Jensen, 2010 WL 1136005, at 3 *10 (stating that “courts have considered the ‘occurrence of the 4 violation’ as the date the loan closed.”); Finley v. LaSalle Bank Nat. 5 Ass’n, No. C 09-2965 SI, 2009 WL 3401453, at *2 n.3 (N.D. Cal. Oct. 6 20, 2009) (noting that the one-year statute of limitations period for 7 a section 2607 claim began to run when plaintiff signed loan 8 documents). 9 Here, Plaintiffs’ loans “closed” on October 7, 2005. (FAC ¶ 10 50.) 11 October 7, 2006. 12 complaint in this case until August 25, 2009. 13 motion, arguing in their opposition briefs that the doctrine of 14 equitable tolling should apply to their RESPA claim. 15 Plaintiffs’ complaint nor their opposition briefs explain why 16 Plaintiffs could not have discovered, with due diligence, IndyMac and 17 Sierra’s alleged violation of section 2607 within the one-year 18 statutory period. 19 doctrine of equitable tolling applies to their section 2607 claim. 20 Therefore, the one-year statute of limitations expired on However, Plaintiffs did not file their original Plaintiffs counter the However, neither Plaintiffs, therefore, have not shown that the Plaintiffs were alerted to this defect in their section 2607 21 claim by Sierra’s initial dismissal motion, yet Plaintiffs’ first 22 amended complaint includes the same deficient allegation. 23 Plaintiffs have already been provided with the opportunity to amend 24 this claim once and were unable to cure the identified deficiency, 25 Plaintiffs’ section 2607 claim is dismissed with prejudice. 26 27 28 B. Since Supplemental Jurisdiction Over Plaintiffs’ State Law Claims Since Plaintiffs’ TILA and RESPA claims have been dismissed, only state claims remain pending. The Court, therefore, may sua 13 1 sponte decide whether to continue exercising supplemental jurisdiction 2 over the state law claims. 3 999, 1001 n.3 (9th Cir. 1997) (en banc) (suggesting that a district 4 court may, but need not, sua sponte decide whether to continue 5 exercising supplemental jurisdiction under 28 U.S.C. § 1367(c)(3) 6 after all federal law claims have been dismissed). 7 See Acri v. Varian Assocs., Inc., 114 F.3d Under 28 U.S.C. § 1367(c)(3), a district court “may decline 8 to exercise supplemental jurisdiction over a [state law] claim” when 9 “all claims over which it has original jurisdiction” have been 10 dismissed. 11 convenience, fairness and comity as delineated by the Supreme Court in 12 United Mine Workers of Am. v. Gibbs, 383 U.S. 715, 726 (1996). 13 114 F.3d at 1001. This decision should be informed by the values of economy, Acri , 14 Comity weighs in favor of declining supplemental 15 jurisdiction since state courts have the primary responsibility for 16 developing and applying state law. 17 (stating that “in the usual case in which all federal-law claims are 18 eliminated before trial, the balance of factors will point towards 19 declining to exercise jurisdiction over the remaining state-law 20 claims” (quotations and citation omitted)); Curiel v. Barclays Capital 21 Real Estate Inc., No. S-09-3074 FCD/KJM, 2010 WL 729499, at *1 (E.D. 22 Cal. Mar. 2, 2010) (stating “primary responsibility for developing and 23 applying state law rests with the state courts” and declining to 24 exercise supplemental jurisdiction after dismissal of the federal 25 claims). 26 supplemental jurisdiction over Plaintiffs’ remaining state law claims 27 in this case. See Acri, 114 F.3d at 1001 Further, none of the other Gibbs factors favor retaining Therefore, the court declines to exercise supplemental 28 14 1 jurisdiction over Plaintiffs’ state law claims and those claims are 2 dismissed without prejudice under 28 U.S.C. § 1367(c)(3). 3 IV. 4 CONCLUSION For the reasons stated above, Plaintiffs’ TILA and RESPA 5 claims are dismissed with prejudice and Plaintiffs’ remaining state 6 law claims are dismissed without prejudice under 28 U.S.C. § 7 1367(c)(3). 8 Dated: May 27, 2010 9 10 11 GARLAND E. BURRELL, JR. United States District Judge 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 15
]]>
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You
should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google
Privacy Policy and
Terms of Service apply.
