Milyakov et al v. JP Morgan Chase Bank, N.A. et al
Filing
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ORDER DENYING MOTION TO REMAND by Hon. William Alsup denying 58 Motion to Remand.(whalc2, COURT STAFF) (Filed on 12/1/2011)
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IN THE UNITED STATES DISTRICT COURT
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FOR THE NORTHERN DISTRICT OF CALIFORNIA
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For the Northern District of California
United States District Court
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Plaintiffs,
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No. C 11-2066 WHA
EMIL P. MILYAKOV; MAGDALENA A.
APOSTOLOVA,
ORDER DENYING
MOTION TO REMAND
v.
JP MORGAN CHASE, N.A.; HSBC BANK USA,
N.A.; CALIFORNIA RECONVEYANCE
COMPANY; PAUL FINANCIAL, LLC;
MORTGAGE ELECTRONIC REGISTRATION
SYSTEMS, INC.
Defendants.
/
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INTRODUCTION
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In this foreclosure action, pro se plaintiffs move to remand this case to San Francisco
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County Superior Court. For the reasons stated below, the motion to remand is DENIED.
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STATEMENT
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Pro se plaintiffs Emil Milyakov and Magdalena Apostolova filed this action in San
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Francisco County Superior Court on April 20, 2011. The complaint alleges federal and state
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claims all arising from the same set of operative facts relating to defendants’ alleged failure to
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disclose the details of a mortgage loan. Defendants JP Morgan Chase Bank, N.A., California
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Reconveyance Company, and Mortgage Electronic Registration Systems, Inc., removed the action
to federal court on April 27, 2011, based on federal-question jurisdiction, pursuant to 28 U.S.C.
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1331, and supplemental jurisdiction pursuant to 28 U.S.C. 1367(a). Plaintiffs’ first, seventh, and
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eighth claims for relief state claims under the Truth in Lending Act, 15 U.S.C. 1601–66, and the
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Home Ownership and Equity Protection Act, 15 U.S.C. 1639. Claims two, three, four, five, six,
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and nine state claims under California law, arising from the same set of operative facts as the
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federal claims.
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On June 29, 2011, plaintiffs filed a first amended complaint containing seven state claims
on August 2. By order dated September 2, the motion to dismiss was granted in part and denied
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in part (Dkt. No. 35). Plaintiffs’ claims for slander of title and injunctive relief were dismissed.
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Plaintiffs’ claims for violation of California Civil Code Section 2923.5 and Section 17200 of the
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For the Northern District of California
and no federal claims. Defendants filed a motion to dismiss plaintiffs’ first amended complaint
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United States District Court
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California Business and Professions Code survived. The order converted defendants’ motion to
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dismiss plaintiffs’ claims for wrongful foreclosure, cancellation of deed instrument, and unjust
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enrichment into a motion for summary judgment and gave plaintiffs ten weeks from the date of
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the order to “take expedited discovery or make some showing in which to defeat defendants’
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demonstration of the right to foreclose and the chain of title” (Dkt. No. 35 at 8).
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Plaintiffs took discovery. Defendants produced approximately 1900 pages of documents
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related to the loan, including a copy of the original promissory note (Dkt. No. 69-1 at ¶ 6).
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On September 23, 2011, plaintiffs filed a motion for leave to file a second amended
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complaint. And on October 27, 2011, plaintiffs filed a motion to remand.
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ARGUMENT
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A defendant may remove a civil action from state court to federal court if original
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jurisdiction would have existed at the time the complaint was filed, without reference to
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subsequent amendment to the complaint. 28 U.S.C. 1441(a); see Sparta Surgical Corp. v. Nat’l
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Ass’n of Securities Dealers, Inc., 159 F.3d 1209, 1213 (9th Cir. 1998) (stating “a plaintiff may not
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compel remand by amending a complaint to eliminate the federal question upon which removal
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was based”). If jurisdiction existed at the time of removal, a “district court retains discretion
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whether to exercise supplemental jurisdiction over state law claims even after all federal claims
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are dismissed.” Lacey v. Maricopa Cnty., 649 F.3d 1118, 1137 (9th Cir. 2011).
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A district court that has subject-matter jurisdiction over an action may decline to exercise
supplemental jurisdiction over that action if one of the factors enumerated in 28 U.S.C. 1367(c)
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exists. Acri v. Varian Assoc., Inc. 114 F.3d 999, 1000 (9th Cir. 1997). When considering
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whether to exercise supplemental jurisdiction, a court may consider judicial economy,
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convenience and fairness to litigants, and comity. Carnegie-Mellon Univ. v. Cohill, 484 U.S 343,
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349–50 (1998); United Mine Workers of America v. Gibbs, 383 U.S. 715, 726 (1966). A district
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court may also “consider whether the plaintiff has engaged in any manipulative tactics when it
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decides whether to remand a case . . . [such as] deleting all federal-law claims from the complaint
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and requesting that the district court remand the case.” Carnegie-Mellon Univ., 484 U.S. at 357.
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This Court has subject-matter jurisdiction over this action under 28 U.S.C. 1331. At the
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For the Northern District of California
United States District Court
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time the complaint was filed, it alleged claims under the Truth in Lending Act, 15 U.S.C.
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1601–66, and the Home Ownership and Equity Protection Act, 15 U.S.C. 1639 (Compl. ¶¶ 36–39,
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61–67). Subject-matter jurisdiction remains, even in light of plaintiffs’ amendment to the
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complaint to omit all federal claims. Pursuant to 28 U.S.C. 1367(a), at the time of removal, the
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Court also had supplemental jurisdiction over the related state claims which arose from the same
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set of operative facts relating to the alleged failure to properly disclose the details of the mortgage
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loan.
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The question, then, is whether supplemental jurisdiction should be exercised over the
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remaining state claims, given that no federal claims remain. Judicial economy and convenience
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and fairness are served by this Court’s retention of jurisdiction. The undersigned judge is already
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familiar with the facts and legal issues involved in this case and has already issued a ruling on the
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merits. Two claims were dismissed; two claims survived, and defendants’ motion to dismiss
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three claims was converted into a motion for summary judgment. That motion is currently
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pending. Plaintiffs were permitted to take expedited discovery for a ten-week period,
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commencing on September 2, 2011. Plaintiffs have taken discovery. Defendants have submitted
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a declaration stating they spent “approximately 70 hours and billed almost $17,000.00 in fees
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reviewing and responding to plaintiffs’ discovery requests” (Dkt. No. 69-1 at ¶ 9).
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Plaintiffs urge that judicial economy, fairness and convenience do not weigh in favor of
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retaining jurisdiction because the state court is competent to address the legal issues involved, the
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majority of discovery propounded by plaintiffs has been objected to by defendants, and the case is
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only six months old (Br. 4). The order disagrees. Judicial economy will best be served by
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resolving the pending motion for summary judgment, the facts and legal argument, of which are
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already familiar to the undersigned judge and not allowing the resources expended during the
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period of expedited discovery to go to waste. This will also facilitate a timely resolution of the
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action. If the action is remanded, the state judge will have to start all over again at square one.
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Moreover, the undersigned is concerned that plaintiffs’ effort to remand this action after a
ruling on the motion to dismiss, discovery, and filing of a second amended complaint, may be a
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For the Northern District of California
United States District Court
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strategic attempt to avoid an adverse decision on the pending dispositive motion. This would be
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improper and a waste of scarce judicial resources. The principle of comity is not violated, when,
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as here, the balance of factors of judicial economy, fairness, and convenience tip in favor of
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retaining jurisdiction.
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For the foregoing reasons, the motion to remand is DENIED.
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IT IS SO ORDERED.
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Dated: December 1, 2011.
WILLIAM ALSUP
UNITED STATES DISTRICT JUDGE
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