Shetty v. America's Wholesale Lender et al
Filing
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ORDER DISMISSING FIRST AND SECOND AMENDED COMPLAINT AS FUTILE, AND DISMISSING CASE WITHOUT LEAVE TO AMEND. Re: Dkt. No. 50 . Signed by Judge Nathanael Cousins on 8/7/2017. (Attachments: # 1 Certificate/Proof of Service)(lmh, COURT STAFF) (Filed on 8/7/2017)
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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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NIKI-ALEXANDER SHETTY,
Plaintiff,
United States District Court
Northern District of California
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v.
AMERICA’S WHOLESALE LENDER,
et al.,
Defendants.
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Case No. 16-cv-05846 NC
ORDER DISMISSING FIRST AND
SECOND AMENDED COMPLAINT
AS FUTILE, AND DISMISSING
CASE WITHOUT LEAVE TO
AMEND
Re: Dkt. No. 50
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On December 23, 2016, the Court dismissed plaintiff Shetty’s complaint under
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Federal Rule of Civil Procedure 12(b)(6), giving Shetty leave to amend. Shetty brought
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his claims as the purported assignee from the former property owners, Jesus Serrano
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Melchor and Evangelina Melchor. The Court found that because Shetty was a stranger to
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the loan between the Melchors, the borrowers, and the various defendants, he lacked
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standing to bring his claims. Shetty filed the First Amended Complaint on January 19,
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2017. Dkt. No. 33. Defendant Bank of New York Mellon moved to dismiss the First
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Amended Complaint, but before that motion could be fully briefed, Shetty moved for leave
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to file the Second Amended Complaint, seeking to add Bayview Loan Servicing, LLC and
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Klinedinst PC as defendants. Because the Court finds that Shetty has not cured the
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deficiencies present in the initial complaint, and fails to state a claim on the claims he has
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proposed to add in the amended complaints, the Court DISMISSES the First and Second
Case No. 16-cv-05846 NC
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Amended Complaints as FUTILE.
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I.
LEGAL STANDARD
Generally, a Court must grant leave to amend freely. Fed. R. Civ. P. 15(a).
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However, in granting leave to amend, the Court considers: (1) undue delay; (2) bad faith;
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(3) prejudice to the opponent; and/or (4) futility of the proposed amendment. Loehr v.
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Ventura County Community College District, 743 F.2d 1310, 1319 (9th Cir. 1984) (citing
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Foman v. Davis, 371 U.S. 178, 182 (1962)). Further, in Lockheed Martin Corp. v.
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Network Solutions, Inc., the Ninth Circuit determined that the district court properly denied
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leave to amend because the plaintiff’s “legal basis for a cause of action is tenuous, [so]
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futility supports the refusal to grant leave to amend.” 194 F.3d 980, 986 (9th Cir. 1999)
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United States District Court
Northern District of California
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(citing Morongo Band of Mission Indians v. Rose, 893 F.2d 1074, 1079 (9th Cir. 1990)).
“Futility of amendment can, by itself, justify the denial of a motion for leave to
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amend.” Bonin v. Calderon, 59 F.3d 815, 845 (9th Cir. 1995). “Where the theory
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presented in the amendment is lacking in legal foundation, or where previous attempts
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have failed to cure a deficiency and it is clear that the proposed amendment does not
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correct the defect, the court has discretion to deny the motion to amend.” Serpa v. SBC
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Comm’ns, Inc., 318 F. Supp. 2d 865, 872 (2004) (citing Shermoen v. United States, 982
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F.2d 1312, 1319 (9th Cir.1992).
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II.
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DISCUSSION
Shetty has in no way addressed the Court’s concerns expressed in its order on the
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motion to dismiss. See Dkt. Nos. 52 at 30 through 52-1 at 15 (claims 2 and 3 in the
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Second Amended Complaint). Shetty merely seeks to drown the Court and defendants in
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his repetitive allegations. His original complaint alleged claims under (1) the Truth in
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Lending Act, (2) cancellation of written instruments, (3) quiet title, and (4) declarative
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relief. His new complaints re-allege those claims and add claims for rescission, conspiracy
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to obstruct justice, and under the Fair Debt Collection Practices Act. In addition, Shetty
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seeks to add Bayview and Klinedinst as defendants. All real parties have consented to the
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jurisdiction of a magistrate judge under 28 U.S.C. § 636(c). Dkt. Nos. 10, 13, 44, 58. For
Case No. 16-cv-05846 NC
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purposes of consent, the Court ignores “America’s Wholesale Lender,” which Shetty lists
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in the caption but says is a “non-existent entity” that has not been served. Dkt. No. 52 at
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13.
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Neither the First nor the Second Amended Complaint ameliorate the deficiency in
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the original complaint regarding the Truth in Lending Act claim; namely, that Shetty is not
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the borrower on the transaction. Jesinoski v. Countrywide Home Loans, Inc., 135 S. Ct.
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790, 791 (2015).
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As to Shetty’s claim for cancellation under California Civil Code § 3412, the Court
also finds he lacks standing to bring such a claim under Yvanova v. New Century Mortg.
Corp. 62 Cal. 4th 919, 924 (2016) (holding only that a borrower has standing to challenge
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United States District Court
Northern District of California
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the assignment of a deed of trust). In its previous order, dkt. no. 30, the Court found that
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because Shetty was not the borrower on the loan, he lacked standing to cancel the loan.
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Johnson v. PNC Mortgage, No. 14-cv-02975 LB, 80 F. Supp. 3d 980, 990 (N.D. Cal.
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2015); see also Shetty v. Veriprise Processing Sols., No. 2D CIVIL B267909, 2017 WL
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1130890, at *4 (Cal. Ct. App. Mar. 27, 2017).
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Shetty also brings a claim to quiet title. The elements of a quiet title claim are: “(1)
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a legal description of the property and its street address or common designation, (2) the
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title of the plaintiff and the basis of the title, (3) the adverse claims to the title of the
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plaintiff, (4) the date as of which the determination is sought and (5) a prayer for the
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determination of the title of the plaintiff against the adverse claims.” Janolkar v. Bank of
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Am., N.A., No. 12-cv-03693 EJD, 2012 WL 6115629, at *3 (N.D. Cal. Dec. 10, 2012)
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(citing Cal. Civ. Proc. Code § 761.020). “A basic requirement of an action to quiet title is
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an allegation that plaintiffs are the rightful owners of the property, i.e., that they have
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satisfied their obligations under the Deed of Trust.” Williams v. Bank of America, N.A.,
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15-cv-00792 LHK, 2015 WL 6602403, at *7 (N.D. Cal. Oct. 30, 2015), aff’d sub nom.
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BROCK WILLIAMS & SILVIA WILLIAMS v. BANK OF AMERICA, N.A., No. 15-17335,
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2017 WL 2983055 (9th Cir. July 13, 2017) (citations and quotations marks omitted).
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However, “tender of the indebtedness is not required if the borrower attacks the
Case No. 16-cv-05846 NC
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validity of the underlying debt.” Lueras v. BAC Home Loans Servicing, LP, 221 Cal. App.
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4th 49, 87 (2013). Yet just because Shetty alleges a defect in the chain of title does not
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mean Shetty can bring a claim to quiet title because Shetty cannot claim that his claim to
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the property is superior to anyone else’s. Neal v. Select Portfolio Servicing, Inc., No. 15-
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cv-03212 EJD, 2017 WL 1065284, at *3 (N.D. Cal. Mar. 20, 2017) (quoting Gerhard v.
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Stephens, 68 Cal. 2d 864, 918 (1968), which found that a quiet title plaintiff must establish
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their own superior and rightful title, and not rely on the weakness of a defendant’s title,
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and that to do so, the plaintiff must allege tender). Lastly, one other court has found that
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the tender requirement was particularly appropriate for Shetty because he is “a non-
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borrower third party who regularly acquires an interest in properties which are being
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United States District Court
Northern District of California
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foreclosed against, and then seeks judicial intervention.” Shetty v. JPMorgan Chase Bank,
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N.A., No. 16-cv-04042 PA (SSX), 2016 WL 7187944, at *5 (C.D. Cal. Dec. 9, 2016)
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(collecting cases).
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As to Shetty’s purported “conspiracy to obstruct justice” claim, as a matter of law,
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there is no private right of action for violations of 18 U.S.C. § 1503. Forsyth v. Humana,
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Inc., 114 F.3d 1467, 1482 (9th Cir. 1997), overruled on other grounds by Lacey v.
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Maricopa County, 693 F.3d 896 (9th Cir. 2012).
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Shetty likewise cannot bring a claim under the federal Fair Debt Collection
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Practices Act. Aguirre v. Cal-W. Reconveyance Corp., No. 11-cv-06911 CAS AGRX,
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2012 WL 273753, at *7 (C.D. Cal. Jan. 30, 2012) (“To state a claim for violation of the
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FDCPA, a plaintiff must allege that the defendant is a ‘debt collector’ collecting a ‘debt.’”)
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(internal quotation marks and citation omitted). “‘Creditors, mortgagors, and mortgage
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servicing companies are not debt collectors and are statutorily exempt from liability under
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the FDCPA.’” Shetty v. Lewis, No. 16-cv-03112 BLF, 2017 WL 1177993, at *6 (N.D. Cal.
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Mar. 30, 2017) (quoting Aguirre, 2012 WL 273753, at *7). In addition, “actions taken to
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facilitate a non-judicial foreclosure, such as sending the notice of default and notice of
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sale, are not attempts to collect ‘debt’ as that term is defined by the FDCPA.” Ho v.
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ReconTrust Co., NA, 858 F.3d 568, 572 (9th Cir. 2016). Thus, because all of Shetty’s
Case No. 16-cv-05846 NC
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allegations as to violations of the FDCPA are directed against select defendants in their
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alleged capacities as “debt collectors,” as a matter of law, Shetty cannot bring such a
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claim.
Shetty’s last claim under 28 U.S.C. §§ 2201 and 2202 for “declarative judgment” is
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derivative of his other claims, and because all of his other claims fail to state a claim as a
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matter of law, the Court likewise dismisses this claim. Ford v. Lehman Bros. Bank, FSB,
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No. 12-cv-00842 CRB, 2012 WL 2343898, at *15 (N.D. Cal. June 30, 2012). Rescission
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under California Civil Code §§ 1688 and 1689 is likewise not a freestanding claim; rather,
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it is a remedy. Moreno v. Citibank, N.A., No. 09-cv-05339 CW, 2010 WL 1038222, at *4
(N.D. Cal. Mar. 19, 2010); Alvarez v. MTC Fin. Inc., No. 16-cv-06428 WHO, 2017 WL
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United States District Court
Northern District of California
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1861844, at *6 (N.D. Cal. May 9, 2017).
Lastly, the Court observes that this case is just one in Shetty’s long list of cases
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attempting to bring nearly identical claims. His claims here fare no better than they have
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in other federal district and California appellate courts. Shetty v. Lewis, No. 16-cv-03112
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BLF, 2017 WL 1177993 (N.D. Cal. Mar. 30, 2017) (dismissing complaint without leave to
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amend); Shetty v. JPMorgan Chase Bank, N.A., No. 16-cv-04042 PA (SSX), 2016 WL
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7187944 (C.D. Cal. Dec. 9, 2016), judgment entered, No. 16-cv-04042 PA (SSX), 2016
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WL 7187300 (C.D. Cal. Dec. 9, 2016) (same); Shetty v. Veriprise, 2017 WL 1130890
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(affirming trial court’s demurrer of Shetty’s complaint); Shetty v. Goldman Sachs Mortg.
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Co., No. B263938, 2017 WL 167500, at *1 (Cal. Ct. App. Jan. 17, 2017) (same); Shetty v.
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Kinecta Fed. Credit Union, No. B266192, 2017 WL 167518 (Cal. Ct. App. Jan. 17, 2017)
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(same); Shetty v. Mortg. Elec. Registration Sys., Inc., No. 2D CIVIL B269059, 2017 WL
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3015622 (Cal. Ct. App. July 17, 2017) (affirming summary judgment against Shetty).1
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III. CONCLUSION
Because the Court finds that (1) Shetty lacks standing to bring his claims; or (2) his
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claims are derivative of those claims he lacks standing to bring, the Court finds that the
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This list is not exhaustive; it merely is a sampling of the orders available on Westlaw
through a cursory search.
Case No. 16-cv-05846 NC
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First and Second Amended complaints did not correct the infirmities the Court found in its
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order on the motion to dismiss. The three new claims in the amended complaints are
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dismissed as incurably legally infirm. Given that Shetty has already amended his
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complaint twice, the Court finds further amendment would be FUTILE, and DISMISSES
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Shetty’s case WITH PREJUDICE. The Court will enter judgment accordingly.
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IT IS SO ORDERED.
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Dated: August 7, 2017
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_____________________________________
NATHANAEL M. COUSINS
United States Magistrate Judge
United States District Court
Northern District of California
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