Alfred McZeal v. EMC Mortgage Corporation et al

Filing 5

MINUTE ORDER (IN CHAMBERS) Order to Show Cause Why Action Should Not Be Dismissed for Lack of Jurisdiction by Judge Margaret M. Morrow. re: Complaint - (Discovery), 1 ....The court appears to lack subject matter jurisdiction over McZeal's cla ims. Accordingly, the court orders McZeal to show cause on or before November 15, 2013 why the action should not be dismissed for lack of subject matter jurisdiction or why the court should not transfer his case to a federal court sitting in Harris County, Texas. Failure to respond by November 15, 2013 will result in immediate dismissal of the action. (PLEASE REVIEW DOCUMENT FOR FULL AND COMPLETE DETAILS) ( Response to Order to Show Cause due by 11/15/2013.) (lw)

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL

Case No.

CV 13-07220 MMM (CWx)

Date November 4, 2013

Title McZeal v. EMC Mortgage Corporation et al.

Present: The Honorable

MARGARET M. MORROW

ANEL HUERTA

N/A

Deputy Clerk

Court Reporter

Attorneys Present for Plaintiffs:

Attorneys Present for Defendants:

None

None

Proceedings:

Order to Show Cause Why Action Should Not Be Dismissed for Lack of
Jurisdiction
I. BACKGROUND

On September 30, 2013, Alfred McZeal filed this pro se action against EMC Mortgage
Corporation (“EMC”), Jack O’Boyle & Associates (“O’Boyle”), Mackie Wolf Zientz & Mann, P.C.
(“Wolf”), Christopher S. Ferguson, Michael Wayne Zientz, Israel Saucedo, all persons claiming any
legal or equitable right, title, estate, lien, or interest in the property described in the complaint, and
various fictitious defendants.1 The complaint alleges that McZeal owns or owned real property
located at 7307 Crescent Bridge Court, Humble, Texas 77396. The property is located in Harris
County, Texas.2 McZeal pleads twenty-one causes of action against defendants, specifically (1) quiet
title and adverse possession; (2) fraud; (3) violation of the Racketeer Influence Corrupt Organizations
Act (“RICO”), 18 U.S.C. § 1961; (4) violation of the Fair Debt Collection Practices Act
(“FDCPA”), 15 U.S.C. § 1961 et seq; (5) violation of the Consumer Credit Protection Act
(“CCPA”), 15 U.S.C. § 1601 et seq; (6) violation of equal rights under the law, 42 U.S.C. § 1981;
1

Complaint, Docket No. 1 (Sept. 30, 2013).

2

Id. at 1, ¶ 32. It is unclear from the complaint whether a foreclosure sale has already
occurred. (Compare id., ¶ 24 (alleging that defendants “fraudulently stag[ed] a false foreclosure
sale”) with id., ¶ 161 (requesting the court enjoin defendants from “selling or taking possession of
the property”).

(7) deprivation of rights under the law, 42 U.S.C. § 1983; (8) conspiracy to interfere with civil rights,
42 U.S.C. § 1985; (9) conspiracy against rights, 18 U.S.C. § 241; (10) breach of the duty of good
faith and fair dealing; (11) breach of contract; (12) tortious interference with business contracts; (13)
violation of California Deceptive Trade Practices laws; (14) invasion of privacy in violation of the
federal and California constitutions; (15) trespass; (16) civil conspiracy; (17) unjust enrichment; (18)
negligent misrepresentation; (19) cancellation of fraudulent mortgage, deed, and fake liens; (20)
temporary/permanent injunction;3 and (21) declaratory judgment.4 McZeal seeks injunctive relief,
in the form of an order “compelling said Defendants . . . to transfer legal title and possession of the
subject property to [him].”5 He also seeks a declaration that he is the rightful holder of title to the
property and that defendants have no title or interest in it.6 Finally, he seeks $19,381,000.00 in
actual, treble, and punitive damages.7 It appears that defendants have not yet been served.8

3

Under Local Rule 65-1, McZeal must file a separate application for temporary restraining
order (“TRO”). The application must identify the TRO and proposed order to show cause why a
preliminary injunction should not issue that McZeal seeks. CA CD L.R. 65-1. Only in rare
circumstances can a federal court issue a TRO without written or oral notice to the adverse party.
FED.R.CIV.PROC. 65(b). Should McZeal wish to have the court issue a TRO without proof of notice
to defendants, his application must satisfy the requirements of Rule 65(b) by setting forth “specific
facts in an affidavit or a verified complaint clearly show[ing] that immediate and irreparable injury,
loss, or damage will result to the movant before the adverse party can be heard in opposition; and . . .
certif[ying] in writing any efforts made to give notice and the reasons why it should not be required.”
See Granny Goose Foods, Inc. v. Brotherhood of Teamsters, 415 U.S. 423, 438-39 (1974) (“The
stringent restrictions imposed . . . by Rule 65 on the availability of ex parte temporary restraining
orders reflect the fact that our entire jurisprudence runs counter to the notion of court action taken
before reasonable notice and an opportunity to be heard has been granted both sides of a dispute”).
The court further notes that it is difficult to determine from the contradictory statements in McZeal’s
complaint whether his property has already been sold, and therefore whether he is likely to suffer
irreparable harm in the absence of a TRO. Any application McZeal submits must therefore show first
that the court has jurisdiction to hear the action, and then provide evidence showing that his property
has not yet been sold, such that it is appropriate for him to seek an injunction restraining a foreclosure
sale.
4

Id. at 1.

5

Id., ¶ 1 (Prayer).

6

Id., ¶ 2 (Prayer).

7

Id., ¶ 175.

8

Although McZeal asserts that service has been perfected, (id., ¶ 17), his complaint also
includes a “request for service” that states “[p]lease serve defendants at the following addresses” (id.
at 56). McZeal requested a 21-day summons, but has not filed a proof of service and defendants have

II. DISCUSSION
McZeal’s claims all relate to real property located in Texas. It therefore appears that the local
action doctrine applies to his case. The local action doctrine is a relic of English common law
imported into this country by Chief Justice Marshall while sitting as a circuit judge in Livingston v.
Jefferson, 15 Fed. Cas. 660 (C.C.D. Va. 1811) (No. 8,411). Under the doctrine, “[a] local action
involving real property can only be brought within the territorial boundaries of the state where the
land is located.” Fowler v. Wells Fargo Bank, N.A., No. 10–3933–EDL, 2011 WL 175506, *4
(N.D. Cal. Jan. 18, 2011) (quoting Hayes v. Gulf Oil Corp., 821 F.2d 285, 287 (5th Cir. 1987)); see
also Justo v. Charter Capital Corp., No. 5:11–CV–00670 EJD, 2012 WL 359738, *3 (N.D. Cal.
Feb. 2, 2012) (“The local action doctrine requires actions involving real property to be brought in the
state where the property is located”); Diaz–Barba v. Kismet Acquisition, LLC, No. 08–1446, 2010
WL 2079738, *4 (S.D. Cal. May 20, 2010) (“The local-action doctrine is a common-law doctrine
that prevents federal courts from exercising subject-matter jurisdiction over certain actions involving
out-of-state real property. . . . Local actions are essentially actions in rem and may only be
prosecuted ‘where the thing on which they are founded is situated,’” quoting Casey v. Adams, 102
U.S. 66, 68 (1880)); Prawato v. PrimeLending, 720 F.Supp.2d 1149, 1156 (C.D. Cal. 2010)
(“[B]ecause the local action doctrine vests exclusive jurisdiction over actions involving land in the
forum where the land is located, a federal court not sitting in that forum cannot exercise supplemental
jurisdiction over such a claim”); 14D Wright, Miller & Cooper, FEDERAL PRACTICE AND PROCEDURE
§ 3822 (3d ed. 2011) (“[T]his concept . . . is established firmly in federal jurisprudence . . . that local
actions can be brought only where the property involved in the action is located”).
The local action doctrine prohibits a court from exercising subject matter jurisdiction over a
case where it applies. Columbia River Packers’ Association v. McGowan, 219 F. 365, 377 (9th Cir.
1914) (“[W]here the suit is strictly local, the subject-matter is specific property, and the relief when
granted is such that it must act directly upon the subject-matter, and not upon the person of the
defendant[,] the jurisdiction must be exercised in the state where the subject-matter is situated”); see
also United States v. Byrne, 291 F.3d 1056, 1060 (9th Cir. 2002) (“The federal district courts’
jurisdiction over actions concerning real property is generally coterminous with the states’ political
boundaries”); Eldee-K Rental Props., LLC v. DIRECTV, Inc., No. C 11–02416 CRB, 2011 WL
5600507, *3 n. 6 (N.D. Cal. Nov. 17, 2011) (“Ninth Circuit case law . . . supports the view that the
local action doctrine pertains to subject matter jurisdiction,” citing Diaz–Barba, 2010 WL 2079738
at *4 n. 1 (“The Ninth Circuit . . . has treated the issue as affecting subject-matter jurisdiction”);
Kingsborough v. Sprint Comm. Co., 673 F.Supp.2d 24, 35 (D. Mass. 2009) (reviewing the case law,
including the Ninth Circuit’s decision in Byrne, and concluding, “after careful consideration . . . that
the doctrine impacts jurisdiction rather than venue”)).9

not yet filed a response to the complaint.
9

Although at least one federal court has treated the local action doctrine as a venue question,
see Fisher v. Virginia Electric & Power Co., 243 F.Supp.2d 538, 557 (E.D. Va. 2003) (concluding

Because the local action doctrine vests exclusive jurisdiction over actions involving real
property in the forum where the land is located, a federal court in whose district real property is not
located cannot exercise supplemental jurisdiction over such a claim; once a federal court determines
the state that has exclusive jurisdiction over a local action, it must dismiss or transfer the action to a
court sitting in that state. Prawoto, 720 F.Supp.2d at 1156-57 (citing, inter alia, Durfee v. Duke, 375
U.S. 106, 115 (1963) (noting the Court’s “emphatic expressions of the doctrine that courts of one
State are completely without jurisdiction directly to affect title to land in other States”); Voda v.
Cordis Corp., 476 F.3d 887, 901 (Fed. Cir. 2007) (“[T]he local action doctrine informs us that
exercising supplemental jurisdiction in this case appears to violate our own norms of what sovereigns
ordinarily expect”); Gulf Oil Corp., 821 F.2d at 287 (“Following Livingston, the Supreme Court has
consistently recognized that a local action must be brought within the state where the land is located,”
and this rule “is so fundamental that state courts are not obligated to give full faith and credit to
judgments from either federal or state courts sitting outside the local state’s territorial boundaries”);
Asociacion de Reclamantes v. United Mexican States, 735 F.2d 1517, 1522 (D.C. Cir. 1984) (Scalia,
J.) (“[T]he local action rule . . . makes the locality’s power exclusive and deprives other courts of
jurisdiction to settle questions involving real estate”); Humble Oil & Refining Co. v. Copeland, 398
F.2d 364, 367 (4th Cir. 1968) (“Texas courts, or federal courts sitting in Texas, have exclusive
jurisdiction over actions to determine title to realty within Texas, and neither the decision of the South
Carolina Supreme Court nor a decision of the United States District Court for the District of South
Carolina would be res judicata in a suit brought in a Texas court”); Kingsborough, 673 F.Supp.2d
at 35 (“The Supreme Court has repeatedly recognized that exclusive jurisdiction over title to real
property is vested in the courts of the state in which the property at issue is located”)).
The court applies state law to determine whether the action is local or transitory.10 See

that the local action doctrine affects venue, not subject matter jurisdiction, but describing the issue
as an “unsettled question”), McGowan is controlling precedent in the Ninth Circuit, and establishes
that the local action doctrine is a question of subject matter jurisdiction. Although the Supreme Court
has not specifically considered the distinction, it has used the term “jurisdiction” rather than “venue”
when referring to the local action doctrine. See, e.g., Underwriters National Assurance Co. v. North
Carolina Life and Accident and Health Insurance Guaranty Association, 455 U.S. 691, 706 n.
11(1982) (noting the “exclusive jurisdiction each State has to control the administration of real
property within its borders”). Thus, although the Jurisdiction and Venue Clarification Act, which
became effective on January 6, 2012, amended the venue provisions of 28 U.S.C. § 1391(a)(2) to
state that they apply “without regard to whether the action is local or transitory in nature,” the
classification of an action as local or transitory is still relevant to – and determinative of – a federal
court’s subject matter jurisdiction inquiry.
10

The court does not, however, apply state law to determine where venue lies when a local
action is joined with a transitory action. See Prawoto, 720 F.Supp.2d at 1156. Where a local action
is joined with a transitory action, California courts ask two questions: first, is there a local action
within the definition of the statute; and second, is there also a transitory action such that venue is

Prawoto, 720 F.Supp.2d at 1154-55 (citing Josevig-Kennecott Copper Co. v. James F. Howarth Co.,
261 F. 567, 569 (9th Cir. 1919) (“It is admitted that the question whether the action is local or
transitory is to be determined by the law of the state”)); see also Eldee-K Rental Props., 2011 WL
5600507 at *3 (“[T]he Court will apply California law and rely on § 392 and its related case law to
determine whether this action is local”).
Under California law, an action is local if it seeks the recovery of real property, an interest
therein, or any determination of a right or interest in real property. Id. at 1155 (citing
CAL.CODECIV.PROC. § 392(a)). McZeal seeks, inter alia, cancellation of defendants’ mortgage,
deed, and lien instruments, an order compelling defendants to transfer legal title and possession of
the property to him and enjoining them from selling the property and claiming any right or title in the
property in the future, and a declaration that McZeal is the rightful holder of title to the property and
that defendants do not have any right or title in or to it.11 The subject matter of McZeal’s claims
therefore pertains to real property and the relief requested, if granted, “is such that it must act directly
upon the subject-matter [of the action], and not upon the person of the defendant.” McGowan, 219
F. at 377. The action therefore appears to be local. See CAL. CODE CIV. PROC. § 392(a); see also
Justo, 2012 WL 359738 at *3 (“A plaintiff seeking rescission of her mortgage in order to avoid
foreclosure [is] subject to the local action doctrine”); Fowler, 2011 WL 175506 at *3 (same);
Prawoto, 720 F.Supp.2d at 1158 (“Prawoto seeks a combination of money damages and rescission
or other termination of a contract granting PrimeLending a security interest in the Texas property,
due primarily to a threat that PrimeLending will foreclose on the property. The main relief sought
is the vesting of title to the property in Prawoto free of liens. Indeed, in the opening paragraphs of
Prawoto’s complaint, she notes that ‘there is a threat of foreclosure on her home.’ Prawoto’s action,
therefore, is local”). Consequently, it appears that the court lacks subject matter jurisdiction to hear
McZeal’s claims.
III. CONCLUSION
The court appears to lack subject matter jurisdiction over McZeal’s claims. Accordingly, the
court orders McZeal to show cause on or before November 15, 2013 why the action should not be
dismissed for lack of subject matter jurisdiction or why the court should not transfer his case to a
federal court sitting in Harris County, Texas. Failure to respond by November 15, 2013 will result
in immediate dismissal of the action.

proper in more than one forum. Id. Because the local action doctrine vests exclusive jurisdiction in
the state where the real property is situated, federal courts do not ask the second question, because
they cannot exercise supplemental jurisdiction over the local claim. Id.; see also id. at 1157 (“Federal
courts simply do not recognize the form of ‘pendent venue’ available under California law”). If a
federal court determines that another state has exclusive jurisdiction over a local action, it must
dismiss or transfer the action to a court sitting in that state.
11

Complaint, ¶¶ 1-5 (Prayer).

CV-90 (12/02)

CIVIL MINUTES - GENERAL

Initials of Deputy Clerk AH