Dean v Springleaf Financial Services
Filing
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ORDER and FINDINGS and RECOMMENDATIONS signed by Magistrate Judge Dale A. Drozd on 7/25/2011 RECOMMENDING that the 6 Motion to Dismiss be GRANTED for lack of subject matter jurisdiction and that this action be CLOSED; Referred to Judge Frank C. Damrell, Jr.; DENYING without prejudice 6 Motion to Declare Plaintiff a Vexatious Litigant. Objections to F&R due within 14 days.
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IN THE UNITED STATES DISTRICT COURT
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FOR THE EASTERN DISTRICT OF CALIFORNIA
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MICHAEL DEAN,
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Plaintiff,
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No. CIV S-11-1037 FCD DAD (TEMP) PS
vs.
SPRINGLEAF FINANCIAL SERVICES,
INC.,
ORDER AND
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Defendant.
FINDINGS AND RECOMMENDATIONS
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Defendant’s motion to dismiss and to declare plaintiff a vexatious litigant came
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on regularly for hearing on July 22, 2011. Plaintiff Michael Dean, who is proceeding pro se,
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appeared on his own behalf. Attorney Austin Kenney appeared for defendant. Upon review of
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the documents in support and opposition, upon hearing the arguments of plaintiff and counsel,
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and good cause appearing therefor, the undersigned will recommend that defendant’s motion to
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dismiss be granted.
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In this action, plaintiff alleges state law claims arising out of charges that were
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incurred in connection with his residential mortgage and a sale under a deed of trust. Defendant
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moves to moves to dismiss under Federal Rule of Civil Procedure 12(b)(6). Although the court
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finds that defendant’s motion is well taken, more fundamentally, this court lacks jurisdiction to
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proceed on plaintiff’s claims.
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Federal district courts are courts of limited jurisdiction that “may not grant relief
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absent a constitutional or valid statutory grant of jurisdiction,” and “[a] federal court is presumed
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to lack jurisdiction in a particular case unless the contrary affirmatively appears.” A-Z Int’l v.
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Phillips, 323 F.3d 1141, 1145 (9th Cir. 2003). See also Fed. R. Civ. P. 12(h)(3) (“If the court
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determines at any time that it lacks subject matter jurisdiction, the court must dismiss the
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action.”). Generally, original federal subject matter jurisdiction may be premised on two
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grounds: (1) federal question jurisdiction, or (2) diversity jurisdiction. District courts have
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federal question jurisdiction over “all civil actions that arise under the Constitution, laws, or
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treaties of the United States.” 28 U.S.C. § 1331. “A case ‘arises under’ federal law either where
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federal law creates the cause of action or ‘where the vindication of a right under state law
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necessarily turn[s] on some construction of federal law.’” Republican Party of Guam v.
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Gutierrez, 277 F.3d 1086, 1088-89 (9th Cir. 2002) (modification in original) (citing Franchise
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Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 8-9 (1983)). “[T]he presence or absence
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of federal-question jurisdiction is governed by the ‘well-pleaded complaint rule,’ which provides
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that federal jurisdiction exists only when a federal question is presented on the face of the
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plaintiff’s properly pleaded complaint.” Provincial Gov’t of Marinduque v. Placer Dome, Inc.,
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582 F.3d 1083, 1091 (9th Cir. 2009). District courts have diversity jurisdiction over “all civil
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actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of
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interest and costs,” and the action is between: “(1) citizens of different States; (2) citizens of a
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State and citizens or subjects of a foreign state; (3) citizens of different States and in which
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citizens or subjects of a foreign state are additional parties; and (4) a foreign state . . . as plaintiff
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and citizens of a State or of different States.” 28 U.S.C. § 1332.
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By order filed April 29, 2011, plaintiff was previously advised of the deficiencies
in his complaint and advised of the requirement that any amended complaint he elected to file
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must set forth the jurisdictional grounds upon which the court’s jurisdiction depends. Plaintiff’s
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amended complaint fails to cure this deficiency. Only state law claims are pled in the amended
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complaint and those claims are ambiguous inasmuch as they appear to be employment claims
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where there is no allegation of an employment relationship between plaintiff and defendant. The
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first amended complaint does not cure the deficiencies evident in plaintiff’s pleadings and
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plaintiff proffers no argument or evidence in the opposition to the motion to dismiss that would
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suggest plaintiff can cure the jurisdictional defect. Because it appears amendment would be
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futile, the complaint should be dismissed with prejudice for lack of subject matter jurisdiction.
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As noted above, defendant has also moved to have plaintiff declared a vexatious
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litigant. The Ninth Circuit has acknowledged the “inherent power of federal courts to regulate
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the activities of abusive litigants by imposing carefully tailored restrictions under the appropriate
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circumstances.” De Long v. Hennessey, 912 F.2d 1144, 1146 (9th Cir.1990) (discussing
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requirements, pursuant to the All Writs Act, 28 U.S.C. § 1651(a), for issuing an order requiring
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a litigant to seek permission from the court prior to filing any future suits). See also Molski v.
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Evergreen Dynasty Corp., 500 F.3d 1047, 1057-62 (9th Cir. 2007). Local Rule 151(b) provides:
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“The provisions of Title 3A, part 2, of the California Code of Civil Procedure, relating to
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vexatious litigants, are hereby adopted as a procedural rule of this Court on the basis of which the
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Court may order the giving of security, bond, or undertaking, although the power of the court
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shall not be limited thereby.” California Code of Civil Procedure, Title 3A, part 2, commences
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with § 391. A vexatious litigant is, inter alia, a person acting pro per who repeatedly files
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unmeritorious motions, pleadings, or other papers or engages in other tactics that are frivolous or
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solely intended to cause unnecessary delay. California Code Civil Procedure § 391(b)(3). Under
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subsection (b)(4) a vexatious litigant is also a person acting in propria persona, who has
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previously been declared to be a vexatious litigant by a state court in any action based upon
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substantially similar facts, transaction, or occurrence.
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Pre-filing review orders, in which a complainant is required to obtain approval
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from a United States Magistrate or District Judge prior to filing a complaint, can be appropriate
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in certain occasions but “should rarely be filed.” DeLong v. Hennessey, 912 F.2d 1144, 1147
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(9th Cir.1990). See also Molski, 500 F.3d at 1057. The court in DeLong articulated that the
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following four conditions must be met before the court enter such an order: (1) plaintiff must be
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given adequate notice to oppose the order; (2) the court must provide an adequate record for
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review, listing the pleadings that led the court to conclude that a vexatious litigant order was
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warranted; (3) the court must make substantive findings as to the frivolous or harassing nature of
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the litigant's actions; and (4) the order must be narrowly tailored. Id. at 1147-48. See also
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Molski, 500 F.3d at 1057-58.
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Plaintiff has previously filed three state court actions, all involving the same
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claims. On March 10, 2011, the Sacramento County Superior Court declared plaintiff a
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vexatious litigant. Plaintiff also has filed a Chapter 13 bankruptcy. On April 18, 2011, plaintiff
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filed the instant action. Plaintiff has also filed two other lawsuits against defendant Springleaf
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Financial Services in the Eastern District subsequent to his filing of the instant action: Case No.
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11-1192 KJM CMK (TEMP) PS and Case No. 11-1758 JAM KJN PS. In those two actions,
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plaintiff’s pleadings are virtually identical to those filed in the instant action.
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It appears that plaintiff’s conduct is bordering on vexatious. However, given the
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lack of prior notice, the court will at this time decline to enter a vexatious litigant order. Plaintiff
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was cautioned at the hearing on this matter, and is again cautioned by this written order, that his
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conduct may transgress the vexatious litigant provisions and that the continued filing of
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frivolous, unmeritorious, and duplicative pleadings may result in limitations being imposed on
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his future filings and a vexatious litigant order being imposed on plaintiff.
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Accordingly, IT IS HEREBY ORDERED that defendant’s motion to declare
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plaintiff a vexatious litigant is denied without prejudice; and
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IT IS HEREBY RECOMMENDED that:
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1. This action be dismissed for lack of subject matter jurisdiction; and
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2. This action be closed.
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These findings and recommendations are submitted to the United States District
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Judge assigned to the case, pursuant to the provisions of Title 28 U.S.C. § 636(b)(l). Within
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fourteen days after being served with these findings and recommendations, any party may file
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written objections with the court and serve a copy on all parties. Such a document should be
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captioned "Objections to Magistrate Judge's Findings and Recommendations." Any reply to the
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objections shall be served and filed within seven days after service of the objections. The parties
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are advised that failure to file objections within the specified time may waive the right to appeal
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the District Court's order. Martinez v. Ylst, 951 F.2d 1153 (9th Cir. 1991).
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DATED: July 25, 2011.
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JMM
dean1037.oah.dad
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