Patino et al v. Franklin Credit Management Corporation et al

Filing 83

Order by Magistrate Judge Laurel Beeler granting 75 Motion to Dismiss. The court dismisses the plaintiff's TILA claim with prejudice because it is barred by the statute of limitations. The court declines to exercise supplemental jurisdiction over her state-law claims and so dismisses those claims without prejudice. (lblc1S, COURT STAFF) (Filed on 5/25/2017)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 NORTHERN DISTRICT OF CALIFORNIA 10 San Francisco Division United States District Court Northern District of California 11 12 PENNY L. PATINO, Case No. 16-cv-02695-LB Plaintiff, 13 ORDER GRANTING THE DEFENDANTS’ MOTION TO DISMISS v. 14 15 FRANKLIN CREDIT MANAGEMENT CORPORATION, et al., 16 Re: ECF No. 75 Defendants. 17 INTRODUCTION 18 In this mortgage-foreclosure case, Penny Patino (the borrower) alleges that Cal State 9 Credit 19 20 Union (the lender) improperly refused to accept her notice of rescission under the Truth in 21 Lending Act (“TILA”).1 Over nine years later, she brought this case against Bosco Credit (Cal 22 State 9’s assignee), Franklin Credit Management (the deed-of-trust beneficiary), and The Wolf 23 Firm (the trustee).2 In her Second Amended Complaint, Ms. Patino asserts a claim for damages 24 under TILA and, using that as a federal-jurisdiction hook, asserts five state-law claims against 25 26 27 28 Second Amended Compl. (“SAC”) – ECF No. 65, ¶¶ 19–23, 34–39. Record citations refer to material in the Electronic Case File (“ECF”); pinpoint citations are to the ECF-generated page numbers at the top of documents. 1 2 Ms. Patino has since dismissed The Wolf Firm from the case. (See ECF No. 53.) ORDER — No. 16-cv-02695-LB 1 Bosco and Franklin. Those two defendants now move to dismiss the case under Rule 12(b)(6) 2 because, they say, the statute of limitations bars her claims. The court held a hearing on the motion on May 25, 2017. The court grants the motion and 3 4 dismisses with prejudice Ms. Patino’s TILA claim because it is untimely. The court declines to 5 exercise supplemental jurisdiction over her state-law claims and dismisses them without prejudice. 6 7 STATEMENT 8 Ms. Patino obtained a $155,571.67 home-equity credit line from Cal State 9 Credit Union on July 14, 2006.3 She executed a promissory note and a deed of trust, and Cal State 9 provided a 10 “Notice of Right of Rescission” informing her of her right to rescind, or cancel, the loan.4 The 11 United States District Court Northern District of California 9 notice said that she could do so within three business days by sending Cal State 9 a written 12 statement declaring her intention to cancel.5 13 “At this time in her life, [Ms.] Patino’s cognitive abilities to fully understand and comprehend 14 the significance of her financial decisions were extremely limited.”6 After suffering “an unbroken 15 series of mentally and physically abusive relationships,” Ms. Patino was diagnosed with post- 16 traumatic stress disorder and battered-woman syndrome.7 In 2006, when she got the loan, she 17 suffered “severe anxiety and depression” and did “not understand[] [or] realiz[e] the extent of the 18 financial obligation.”8 Nevertheless, on July 18 Ms. Patino “attempted to rescind the loan transaction.”9 She faxed a 19 20 handwritten note saying “I wish to cancel,” and hand-delivered a second letter stating “Today I 21 cancelled totally.”10 She then sent Cal State 9 a check for $155,571.67, the full loan balance.11 But 22 3 SAC ¶ 17, Ex. A. 4 Id. ¶¶ 17–18, Exs. A & B. 24 5 Id. ¶ 19, Ex. B. 25 6 Id. ¶ 20. 7 Id. 8 Id. ¶¶ 20–21. 27 9 Id. ¶ 21. 28 10 23 26 Id. ¶ 21, Ex. D. ORDER — No. 16-cv-02695-LB 2 1 Cal State 9 “refused to accept [her] check[] and refused to allow [her] to cancel the loan.”12 Ms. 2 Patino instead received “her check back with an ‘X’ and the word ‘void’ written on [it],” which 3 she alleges Cal State 9 wrote in attempt “to disregard [her] rescission and cancellation of the 4 loan.”13 Ms. Patino alleges that her “post[-]traumatic stress disorder prevented [her] from fully 5 understanding this sequence of events, and from fully understanding that no rescission had taken 6 place.”14 She continued to make payments.15 7 In 2008, Cal State 9 assigned its interest in Ms. Patino’s loan to Bosco Credit.16 Seven years 8 later, The Wolf Firm (the deed-of-trust trustee) sent Ms. Patino a demand letter “stating that she 9 was in default on her obligations under the promissory note and deed of trust in the amount of $77,177.57.”17 The Wolf Firm “threaten[ed] that if payment was not received in 30 days, then the 11 United States District Court Northern District of California 10 entire sum of both principal and interest [would] become due, on penalty of the power of sale in 12 the deed of trust.”18 Over the next several months, the firm took action on Ms. Patino’s default: 13 first, it recorded a Notice of Default, “stating that the amount to re-instate the loan was 14 $79,612.89”; then a Notice of Trustee’s Sale, “stating that the amount of unpaid balance and other 15 charges was $248,329.46.”19 Ms. Patino then sued in May 2016.20 After the court dismissed her original complaint with 16 17 leave to amend, the court appointed counsel for Ms. Patino.21 The court subsequently dismissed 18 her First Amended Complaint, again with leave to amend her TILA claim, and (after allowing the 19 20 11 Id. ¶ 22. 21 12 Id. ¶ 23. 22 13 Id. ¶ 23, Ex. E. 14 Id. ¶ 28. 15 Id. ¶ 27. 24 16 Id. ¶¶ 25–26, Ex. G. Ms. Patino challenges the validity of the assignment. (See id. ¶¶ 25–26, 42–53.) 25 17 Id. ¶ 30, Ex. I. 18 Id. ¶ 30. 19 Id. ¶¶ 32–33, Exs. K & L. 27 20 Compl. – ECF No. 1. 28 21 See ECF Nos. 29, 32, 34. 23 26 ORDER — No. 16-cv-02695-LB 3 1 defendants to respond) granted her request for a temporary restraining order.22 In her Second 2 Amended Complaint (“SAC”), Ms. Patino asserts seven claims: (1) violation of TILA; (2) 3 wrongful foreclosure; (3) unfair business practices under California Business & Professions Code 4 § 17200; (4) breach of contract; (5) intentional infliction of emotional distress; (6) negligent 5 infliction of emotional distress; and (7) quiet title. She requests damages, declaratory relief, and an 6 injunction.23 The defendants move to dismiss the SAC because (among other things) they say her 7 claims are barred by the statute of limitations.24 8 RULE 12(B)(6) LEGAL STANDARD 9 Under Federal Rule of Civil Procedure 12(b)(6), a claim may be dismissed because of a 11 United States District Court Northern District of California 10 “failure to state a claim upon which relief can be granted.” A dismissal under Rule 12(b)(6) may 12 be based on the lack of a cognizable legal theory or on the absence of sufficient facts alleged under 13 a cognizable legal theory. Johnson v. Riverside Healthcare Sys., 534 F.3d 1116, 1121 (9th Cir. 14 2008); Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). A complaint must contain a “short and plain statement of the claim showing that the pleader is 15 16 entitled to relief” to give the defendant “fair notice” of what the claims are and the grounds upon 17 which they rest. See Fed. R. Civ. P. 8(a)(2); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 18 (2007). A complaint does not need detailed factual allegations, but “a plaintiff’s obligation to 19 provide the ‘grounds’ of his ‘entitlement to relief’ requires more than labels and conclusions, and a 20 formulaic recitation of the elements of a cause of action will not do. Factual allegations must be 21 enough to raise a claim for relief above the speculative level . . . .” Twombly, 550 U.S. at 555 22 (internal citations omitted). 23 To survive a motion to dismiss, a complaint must contain sufficient factual allegations, 24 accepted as true, “‘to state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 25 26 22 See ECF Nos. 51, 73, 74. 27 23 SAC ¶¶ 66–74, Prayer. 28 24 Motion to Dismiss – ECF No. 75; Opposition – ECF No. 78; Reply – ECF No. 80. ORDER — No. 16-cv-02695-LB 4 1 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). “A claim has facial plausibility when 2 the plaintiff pleads factual content that allows the court to draw the reasonable inference that the 3 defendant is liable for the misconduct alleged.” Id. “The plausibility standard is not akin to a 4 ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted 5 unlawfully.” Id. (quoting Twombly, 550 U.S. at 556). “Where a complaint pleads facts that are 6 ‘merely consistent with’ a defendant’s liability, it ‘stops short of the line between possibility and 7 plausibility of ‘entitlement to relief.’’” Id. (quoting Twombly, 550 U.S. at 557). 8 If a court dismisses a complaint, it should give leave to amend unless the “the pleading could 9 not possibly be cured by the allegation of other facts.” Cook, Perkiss and Liehe, Inc. v. Northern 10 California Collection Serv. Inc., 911 F.2d 242, 247 (9th Cir. 1990). United States District Court Northern District of California 11 ANALYSIS 12 13 1. The Statute of Limitations Bars Ms. Patino’s TILA Claim 14 Ms. Patino seeks damages under TILA because Cal State 9 did not honor her rescission 15 notice.25 The issue is whether Ms. Patino filed her TILA claim too late or whether it eludes the 16 Act’s time bar under 15 U.S.C. § 1640(e)’s “recoupment exception.” “Congress passed [TILA] to help consumers ‘avoid the uninformed use of credit, and to 17 18 protect the consumer against inaccurate and unfair credit billing.’” Jesinoski v. Countrywide Home 19 Loans, Inc., 135 S. Ct. 790, 791–92 (2015) (quoting 15 U.S.C. § 1601(a)). To that end, TILA 20 affords borrowers time-limited rights to rescission and monetary relief for creditors’ violations of 21 its provisions. See 15 U.S.C. § 1635 (rescission); id. § 1640 (damages). 22 A borrower may rescind a loan under TILA within three business days “following the 23 consummation of the transaction or the delivery of [TILA-required disclosures], whichever is 24 later, by notifying the creditor . . . of his intention to do so.” 15 U.S.C. § 1635(a); Jesinoski, 135 S. 25 Ct. at 792. If the lender never provides the required disclosures, the borrower’s right of rescission 26 27 28 25 See SAC ¶¶ 34–39. ORDER — No. 16-cv-02695-LB 5 1 expires after three years. 15 U.S.C. § 1635(f); Jesinoski, 135 S. Ct. at 792. To exercise the right, 2 the borrower need only give timely notice. Jesinoski, 135 S. Ct. at 792. 3 TILA imposes certain obligations on creditors when a borrower gives notice of rescission. See 15 U.S.C. § 1635(b). For example, within twenty days after receiving a notice of rescission, a 5 creditor must return to the borrower any money or property received and must “take any action 6 necessary or appropriate to reflect the termination of any security interest.” Id. A creditor’s failure 7 to honor a timely rescission request is an actionable TILA violation. See Mitchell v. Bank of Am., 8 No. 10cv432 L(WVG), 2011 WL 711579, at *4 (S.D. Cal. Jan. 31, 2011) (“Failure to respond to 9 plaintiffs’ notice of rescission is a separate violation which provides a basis for statutory damages 10 under [TILA].”); Buick v. World Savings Bank, 637 F. Supp. 2d 765, 771–72 (E.D. Cal. 2008). So, 11 United States District Court Northern District of California 4 a creditor that breaches these obligations may be liable for damages. See 15 U.S.C. § 1635(g) 12 (where “a creditor has violated this section, in addition to rescission the court may award relief 13 under section 1640”); id. § 1640 (damages for TILA violations). 14 The statute of limitations on TILA-damages claims is generally one year from the date of the 15 violation. 15 U.S.C. § 1640(e). Thus, “[a] claim for damages based on violations of TILA’s 16 rescission provision” — i.e. where a creditor fails to honor a rescission request — “must be 17 brought within one year” of such failure. Cook v. Wells Fargo Bank, No. 09cv2757 WQH (NLS), 18 2010 WL 1289892, at *3 (S.D. Cal. Mar. 26, 2010). But “the doctrine of equitable tolling may, in 19 the appropriate circumstances, suspend the limitations period until the borrower discovers or had 20 reasonable opportunity to discover the fraud or nondisclosures that form the basis of the TILA 21 [damages] action.” King v. California, 784 F.2d 910, 915 (9th Cir. 1986). Such tolling is available 22 only if “despite all due diligence, a plaintiff is unable to obtain vital information bearing on the 23 existence of his claim.” Santa Maria v. Pac. Bell, 202 F.3d 1170, 1178 (9th Cir. 2000), overruled 24 on other grounds by Socop-Gonzalez v. INS, 272 F.3d 1176 (9th Cir. 2001). 25 In addition to equitable tolling, a TILA-damages claim may avoid the one-year limitations 26 period if it falls within § 1640(e)’s recoupment exception. That section provides that TILA’s one- 27 year period will not bar a recoupment claim asserted defensively in “an action to collect a debt”: 28 ORDER — No. 16-cv-02695-LB 6 This subsection does not bar a person from asserting a violation of this subchapter in an action to collect the debt which was brought more than one year from the date of the occurrence of the violation as a matter of defense by recoupment or set-off in such action, except as otherwise provided by State law. 1 2 3 15 U.S.C. § 1640(e). “Recoupment” is the defendant’s right to, in the same action, “cut down the 4 plaintiff’s demand either because the plaintiff has not complied with some cross obligation of the 5 contract on which he sues or because he has violated some duty which the law imposes on him in 6 the making or performance of that contract.” In re Smith, 737 F.2d 1549, 1552 n.7 (11th Cir. 1984) 7 (quoting Ballentine’s Law Dictionary 1070 (3d ed. 1969)). It is a “defense arising out of some 8 feature of the transaction upon which the plaintiff’s action is grounded” that, under TILA, 9 “survives the expiration of the period provided by a statute of limitation that would otherwise bar the recoupment claim as an independent cause of action.” Beach v. Ocwen Fed. Bank, 523 U.S. 11 United States District Court Northern District of California 10 410, 415 (1998) (internal quotations and citations omitted). A recoupment claimant must show that: “(1) the TILA violation and the creditor’s debt claim 12 13 arose from the same transaction, (2) she is asserting her claim as a defense, and (3) the ‘main 14 action’ is timely.” In re Smith, 737 F.2d at 1553; see also Ortiz v. Accredited Home Lenders, Inc., 15 639 F. Supp. 2d 1159, 1164 (S.D. Cal. 2009). All three elements must be met. In re Smith, 737 16 F.2d at 1553. Here, despite Ms. Patino’s prior claims of incapacity and hints at equitable tolling,26 she does 17 18 not now argue that TILA’s limitations period should be tolled. She instead asserts that she brought 19 the complaint “[i]n defense against defendants’ efforts to foreclose on her home,” and thus her 20 TILA claim falls within § 1640(e)’s recoupment exception.27 The principal issue is whether Ms. 21 Patino asserts the TILA claim defensively — satisfying Smith’s second prong — or offensively, 22 subject to TILA’s limitations period. Ms. Patino points to several bankruptcy cases allowing debtors to assert TILA-recoupment 23 24 claims where the creditor initiated non-judicial foreclosure and filed a proof of claim in 25 bankruptcy court. See, e.g., Matter of Coxson, 43 F.3d 189 (5th Cir. 1995); In re Beach, 447 B.R. 26 27 26 See Order on TRO – ECF No. 74 at 4. 28 27 See SAC ¶ 34; Opposition at 9. ORDER — No. 16-cv-02695-LB 7 1 313 (D. Idaho 2011); In re Woolaghan, 140 B.R. 377 (W.D. Pa. 1992).28 For example, in Matter 2 of Coxson, the debtors filed an “adversary proceeding against [the creditor] in the bankruptcy 3 court” in response to the creditor’s foreclosure efforts. 43 F.3d at 190. They brought a TILA claim, 4 which the creditor argued was time barred. Id. at 193. The creditor urged “that the [debtors] 5 ‘hauled’ [it] into court and initiated th[e] lawsuit, and therefore the TILA claim [was] used 6 offensively, rather than defensively.” Id. at 194. The Fifth Circuit disagreed because the debtors 7 “filed th[e] suit in response to [the creditor’s] filing of a proof of claim in the bankruptcy court and 8 its foreclosure actions.” Id. (agreeing with the district court’s analysis). The filing of a proof of 9 claim was “an action to collect the debt,” and so the TILA claim was raised defensively. Id. The In re Beach court similarly held that “a non-judicial foreclosure sale is an action to collect 10 United States District Court Northern District of California 11 a debt for the purposes of the TILA statute of limitations” and allowed a TILA claim “asserted 12 defensively in response to the bank’s initiation of a non-judicial foreclosure action.” 447 B.R. at 13 321–22. See also In re Woolaghan, 140 B.R. at 383–84 (holding that “the act of filing a proof of 14 claim is an action to collect a debt” in bankruptcy court and noting that “the right of a debtor in 15 bankruptcy to invoke the doctrine of recoupment to reduce a secured proof of claim of a mortgage 16 lender by the amount of statutory TILA damages has been recognized again and again in the case 17 law.”). But “federal district courts in California have reached the conclusion opposite of Coxson” and 18 19 Beach. Lima v. Wachovia Mortg. Corp., No. C09-04798 TEH, 2010 WL 1223234, at *5 (N.D. 20 Cal. Mar. 25, 2010) (collecting cases); see also Harris v. Wells Fargo Home Mortg., No. CV10- 21 09496 ODW (CWx), 2011 WL 1134216, at *3 (C.D. Cal. Mar. 23, 2011) (noting that “[t]he 22 general rule is that when the debtor hales the creditor into court, the claim by the debtor is 23 affirmative rather than defensive,” and, “[s]pecifically, in non-judicial foreclosure cases, federal 24 district courts in California conclude that non-judicial foreclosures are not ‘actions’ as 25 contemplated by TILA”) (internal quotations and citations omitted); Alakozai v. Valley Credit 26 Union, No. C10-02454 HRL, 2010 WL 5017173, at *3 (N.D. Cal. Dec. 3, 2010) (holding that 27 28 28 See Opposition at 9–13. ORDER — No. 16-cv-02695-LB 8 1 “insofar as [the plaintiff] asserts recoupment in response to defendant’s non-judicial foreclosure, 2 his claim is not properly deemed a ‘defense’ to an ‘action’ for purposes of avoiding the applicable 3 statute of limitations”); Parcray v. Shea Mortg. Inc., No. CV-F-09-1942 OWW/GSA, 2010 WL 4 1659369, at *17–*18 (E.D. Cal. Apr. 23, 2010) (denying plaintiff’s argument that “her TILA 5 claim is pled defensively to reduce or set-off the amount she owes Defendant”); Carillo v. 6 Citimortgage, Inc., No. CV 09-02404 AHM (CWx), 2009 WL 3233534, at *3 (C.D. Cal. Sept. 30, 7 2009) (“A foreclosure action is not an ‘action to collect debt’ within the meaning of the 8 recoupment exception.”); Ortiz, 639 F. Supp. 2d at 1165 (“[N]on-judicial foreclosures are not 9 ‘actions’ as contemplated by TILA.”). For example, in Lima v. Wachovia Mortgage Corporation, the statute of limitations barred the 11 United States District Court Northern District of California 10 borrower’s TILA nondisclosure claim. 2010 WL 1223234 at *6. There, the borrower defaulted on 12 her loan and the bank initiated non-judicial foreclosure proceedings. Id. at *1. The borrower did 13 not file her complaint until four years after she took out the loan and so the bank argued the claim 14 was barred. Id. at *5. The borrower, however, urged that the TILA claim was “a recoupment 15 defense to the foreclosure of her property” and thus it should survive. Id. “Although section 16 1640(e) allows recoupment to be asserted defensively in an ‘action to collect the debt,’ ‘non- 17 judicial foreclosures are not ‘actions’ as contemplated by TILA.” Id. (quoting Ortiz, 639 F. Supp. 18 2d at 1165) (internal quotations omitted). So the borrower’s “lawsuit [was] not a defensive action” 19 and she could not “bypass the one-year statute of limitations by treating her claim as a recoupment 20 defense.” Id. at *5–*6. The court dismissed the claim. Id. at *6. Here, as in Lima, Ms. Patino cannot bypass TILA’s statute of limitations by labeling her claim 21 22 as a recoupment defense. Ms. Patino signed the loan documents on July 14, 2006.29 Within three 23 business days, she tried to rescind the loan by sending Cal State 9 a note and a letter saying “I 24 wish to cancel,” and “Today I cancelled totally.”30 But Cal State 9 allegedly “refused to accept 25 [her] check, and refused to allow [her] to cancel the loan.”31 As described in the court’s prior 26 29 27 28 SAC ¶ 17. 30 Id. ¶ 21. 31 Id. ¶ 23. ORDER — No. 16-cv-02695-LB 9 1 order, the limitations period began twenty days after Ms. Patino’s rescission notice (the day that 2 Cal State 9 breached its obligation to honor the request), meaning that it ended in August 2007.32 3 Although she tries to bring the claim defensively against the defendants’ foreclosure efforts, those 4 efforts are not an “action” under TILA, and so § 1640(e)’s recoupment exception does not save the 5 claim, which she brought over seven years too late. Ms. Patino does not attempt to distinguish Lima, Ortiz, or the other cases cited above. She 7 instead argues that the court should not follow those cases because they are unpublished (except 8 for Ortiz) and do not address 15 U.S.C. § 1640(k)(1).33 First, contrary to Ms. Patino’s assertion, 9 the court thinks the cases (even the unpublished ones) contain sufficiently thorough and well- 10 developed reasoning. Second, § 1640(k) is inapplicable here and was inapplicable in the cases 11 United States District Court Northern District of California 6 cited (including Ortiz) because it refers only to a limited subset of recoupment-based claims: 12 Notwithstanding any other provision of law, when a creditor, assignee, or other holder of a residential mortgage loan or anyone acting on behalf of such creditor, assignee, or holder, initiates a judicial or nonjudicial foreclosure of the residential mortgage loan, or any other action to collect the debt in connection with such loan, a consumer may assert a violation by a creditor of paragraph (1) or (2) of section 1639b(c) of this title, or of section 1639c(a) of this title, as a matter of defense by recoupment or set off without regard for the time limit on a private action for damages under subsection (e). 13 14 15 16 17 15 U.S.C. § 1640(k)(1) (emphasis added). Ms. Patino does not assert a claim under § 1639b(c) or 18 § 1639c(a). She argues this section saved the In re Beach plaintiff’s § 1632 and § 1639 claims.34 19 But In re Beach relied on § 1640(e) (as did the other cases above), not § 1640(k). See 447 B.R. at 20 320–22. The court denies her arguments. In sum, the court follows the weight of authority in California-based federal district courts, 21 22 adopts the reasoning in Lima and Ortiz as persuasive, and declines to follow Beach and Coxson. 23 See Lima, 2010 WL 1223234 at *5 (“[F]ederal district courts in California have reached the 24 conclusion opposite that of Coxson.”); see also Harris, 2011 WL 1134216, at *3 (distinguishing 25 26 32 Order – ECF No. 51 at 8. 27 33 See Opposition at 9–11. 28 34 Id. at 13. ORDER — No. 16-cv-02695-LB 10 1 Coxson, where “the court found that because the defendant offered a proof of claim in the 2 bankruptcy court, which constituted ‘an action to collect the debt,’ the plaintiff’s separate civil 3 action in response was defensive”). 4 5 The court dismisses with prejudice Ms. Patino’s TILA claim because it is barred by the statute of limitations. 6 7 8 2. The Court Declines to Exercise Supplemental Jurisdiction “[F]ederal courts have an independent obligation to ensure that they do not exceed the scope of their jurisdiction, and therefore they must raise and decide jurisdictional questions that the parties 10 either overlook or elect not to press.” Henderson ex. rel. Henderson v. Shinseki, 562 U.S. 428, 434 11 United States District Court Northern District of California 9 (2011). And although courts may exercise supplemental jurisdiction over state law claims “that are 12 so related to claims in the action within [the court’s] original jurisdiction that they form part of the 13 same case or controversy,” 28 U.S.C. § 1367(a), a court may decline to exercise supplemental 14 jurisdiction where it “has dismissed all claims over which it has original jurisdiction,” id. 15 § 1367(c)(3). Indeed, unless “considerations of judicial economy, convenience[,] and fairness to 16 litigants” weigh in favor of exercising supplemental jurisdiction, “a federal court should hesitate to 17 exercise jurisdiction over state claims.” United Mine Workers of Am. v. Gibbs, 383 U.S. 715, 726 18 (1966); see also Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350 (1988) (“[A] federal court 19 should consider and weigh in each case, and at every stage of the litigation, the values of judicial 20 economy, convenience, fairness, and comity in order to decide whether to exercise jurisdiction 21 over a case brought in that court involving pendent state-law claims.”), superseded on other 22 grounds by statute as recognized in Fent v. Okla. Water Res. Bd., 235 F.3d 553, 557 (10th Cir. 23 2000). 24 The court dismisses Ms. Patino’s only federal claim (TILA). Her remaining claims all arise 25 under state law and do not support diversity jurisdiction because the parties are not completely 26 diverse: Ms. Patino lives in California and Bosco Credit has its principal place of business here, 27 28 ORDER — No. 16-cv-02695-LB 11

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