Selby v. Ocwen Mortgage Servicing, Inc. et al
Filing
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ORDER Granting In Part Motion to Dismiss [Doc. No. 11 , 30 ]. Signed by Judge Cathy Ann Bencivengo on 11/16/2017. (jjg)
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UNITED STATES DISTRICT COURT
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SOUTHERN DISTRICT OF CALIFORNIA
JACQUELINE SELBY,
Case No.: 3:17-CV-973-CAB-BLM
Plaintiff,
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v.
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ORDER GRANTING IN PART
MOTION TO DISMISS
OCWEN LOAN SERVICING, LLC,
[Doc. Nos. 11, 30]
Defendant.
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Defendant Ocwen Loan Servicing, LLC (“Ocwen”) has filed two motions: (1) a
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motion to stay this case pending a ruling from the United States Court of Appeals for the
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D.C. Circuit [Doc. No. 11]; and (2) a motion to dismiss for lack of standing and failure to
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state a claim [Doc. No. 30]. The motions have been fully briefed, and the Court deems
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them suitable for submission without oral argument. For the following reasons, the motion
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to dismiss is granted with respect to Plaintiff’s lack of standing, the motion to stay is denied
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as moot, and Plaintiff is ordered to show cause as to subject matter jurisdiction over the
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state law claims.
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I.
Background
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Plaintiff filed her original complaint on May 11, 2017. The original complaint
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asserted claims for negligent and intentional violations of the Telephone Consumer
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Protection Act (the “TCPA”), claims under both the federal Fair Debt Collection Practices
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Act (the “FDCPA”) and California’s Rosenthal Fair Debt Collection Practices Act (the
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“Rosenthal Act”), and common law claims for negligence and negligence per se. [Doc.
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No. 1.] The original complaint named three defendants: (1) Ocwen Mortgage Servicing,
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Inc.; (2) Ocwen Loan Servicing, LLC; and (3) JPMorgan Chase Bank, N.A. (“JPMorgan”),
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as trustee for Bear Stearns ALT-A Trust, Mortgage Pass-Through Certificates, Series 2004-
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13. The two Ocwen defendants filed motions to dismiss the original complaint and to stay
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this litigation pending a decision in ACA International v. FCC, No. 15-1211 (D.C. Cir.).
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Instead of opposing the motion to dismiss, Plaintiff voluntarily dismissed Ocwen
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Mortgage Servicing, Inc. and filed a first amended complaint (“FAC”) against only Ocwen
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and JPMorgan. The FAC asserted the same claims except for the negligence per se claim.
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Once again, Ocwen moved to dismiss the FAC, and once again, instead of opposing the
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motion to dismiss, Plaintiff amended her complaint. The second amended complaint
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(“SAC”), which remains the operative pleading, names only Ocwen as a defendant and
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asserted only the two TCPA claims, the Rosenthal Act claim, and a negligence claim.
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According to the SAC, in 2004, Plaintiff borrowed money secured by real property
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located in San Diego, California (the “Mortgage”). The property was not Plaintiff’s
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primary residence, and the proceeds from the Mortgage were used for “personal, family,
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and household purposes.” [Doc. No. 29 at ¶ 18.] In 2009, Plaintiff’s attorney “sent a
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written notice of representation to Bank of America, which at the time was the servicer of
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the Mortgage.” [Id. at ¶ 19.] At some point before 2013, the Mortgage went into default.
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[Id. at ¶ 20.] In 2013, Ocwen took over servicing the Mortgage from Bank of America.
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[Id.] Plaintiff’s attorney sent a letter dated September 20, 2013, “notifying Ocwen of its
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violations of state and federal debt collection laws and re-affirming that Plaintiff was
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represented by counsel.” [Id. at ¶ 22.]
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Between November 20, 2014 and August 11, 2016, Ocwen called Plaintiff’s cellular
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telephone 1008 times using an automatic telephone dialing system (“ATDS”) in an effort
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to collect on the Mortgage debt. [Id. at ¶¶ 27, 35.] The SAC alleges that Plaintiff “did not
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provide express consent to Defendant to receive calls on [her] cellular telephone,” and that
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she “clearly revoked any type of express consent, if prior express consent ever existed, by
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stating that [she] no longer wished to be contacted by phone.” [Id. at ¶¶ 29, 31.] Ocwen’s
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collection calls allegedly caused Plaintiff frustration and distress, “disrupted [her] daily
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activities and the peaceful enjoyment of [her] personal and professional life, including the
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ability to use [her] phone,” and caused her to miss “important communications from friends
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and family.” [Id. at ¶¶ 41-43.]
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Ocwen now moves to dismiss Plaintiff’s TCPA claims under Federal Rule of Civil
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Procedure 12(b)(1) for lack of standing, and the state law claims under Rule 12(b)(6) for
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failure to state a claim.
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II.
Standing to Sue for TCPA Violations
A.
Legal Standards for Dismissal Under Rule 12(b)(1)
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Standing under Article III pertains to the Court’s subject matter jurisdiction and
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therefore is “properly raised in a motion to dismiss under Federal Rule of Civil Procedure
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12(b)(1).” White v. Lee, 227 F.3d 1214, 1242 (9th Cir. 2000). “For purposes of ruling on
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a motion to dismiss for want of standing, both the trial and reviewing courts must accept
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as true all material allegations of the complaint and must construe the complaint in favor
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of the complaining party.” Maya v. Centex Corp., 658 F.3d 1060, 1068 (9th Cir. 2011)
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(quoting Warth v. Seldin, 422 U.S. 490, 501 (1975)).
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The standing to sue doctrine is derived from Article III of the Constitution's
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limitation of the judicial power of federal courts to “actual cases or controversies.” Spokeo
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v. Robins, ––– U.S. ––––, 136 S.Ct. 1540, 1547, 194 L.Ed.2d 635 (2016) (citing Raines v.
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Byrd, 521 U.S. 811, 818, 117 S.Ct. 2312, 138 L.Ed.2d 849 (1997)). “The doctrine limits
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the category of litigants empowered to maintain a lawsuit in federal court to seek redress
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for a legal wrong.” Id. “[T]he ‘irreducible constitutional minimum’ of standing consists of
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three elements. The plaintiff must have (1) suffered an injury in fact, (2) that is fairly
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traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed
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by a favorable judicial decision.” Id. (citing Lujan v. Defenders of Wildlife, 504 U.S. 555,
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560–61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992)). “The party invoking federal jurisdiction
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bears the burden of establishing these elements.” Lujan, 504 U.S. at 561 (internal citations
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omitted).
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The first element, injury in fact, “is a constitutional requirement, and ‘it is settled
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that Congress cannot erase Article III’s standing requirements by statutorily granting the
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right to sue to a plaintiff who would not otherwise have standing.’” Spokeo, 136 S.Ct. at
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1547–48 (quoting Raines, 521 U.S. at 820, n. 3, 117 S.Ct. 2312). “To establish injury in
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fact, a plaintiff must show that he or she suffered ‘an invasion of a legally protected
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interest’ that is ‘concrete and particularized’ and ‘actual or imminent, not conjectural or
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hypothetical.’” Id. at 1548 (quoting Lujan, 504 U.S. at 560, 112 S.Ct. 2130). “‘For an injury
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to be “particularized,’ it ‘must affect the plaintiff in a personal and individual way.’” Id.
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(quoting Lujan, 504 U.S. at 560, n.1, 112 S.Ct. 2130). Meanwhile, “[a] ‘concrete’ injury
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must be ‘de facto’; that is, it must actually exist.” Id. (citing Black’s Law Dictionary 479
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(9th ed. 2009)). Therefore, a plaintiff does not “automatically satisf[y] the injury-in-fact
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requirement whenever a statute grants a person a statutory right and purports to authorize
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that person to sue to vindicate that right. Article III standing requires a concrete injury even
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in the context of a statutory violation.” Id. at 1549. A “bare procedural violation, divorced
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from any concrete harm,” does not satisfy the injury-in-fact requirement of Article III. Id.
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B.
Discussion
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The factual allegations relevant to the question of whether Plaintiff has Article III
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standing to assert claims under the TCPA are materially indistinguishable from the facts in
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Romero v. Department Stores National Bank, 199 F.Supp. 3d 1256 (S.D. Cal. 2016), which
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was decided by this Court. In that case, as in this one, the plaintiff claimed to have received
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calls from a defendant who was trying to collect a debt and asserted that those calls violated
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the TCPA because they were made using an ATDS after Plaintiff had revoked her consent
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to receive such calls. The defendant moved for summary judgment that the plaintiff lacked
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standing to assert claims for TCPA violations. The primary difference between this case
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and Romero is that Romero was at the summary judgment stage while this case is at the
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motion to dismiss stage.
However, assuming the truth of all of Plaintiff’s factual
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allegations, including that Ocwen used an ATDS to call Plaintiff’s cellular telephone 1008
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times in connection with its efforts to collect on the Mortgage debt, that Plaintiff either
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never consented or had revoked her consent to receive these calls, and that these calls
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caused Plaintiff frustration and distress, the Court’s reasoning in Romero is equally
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applicable here and also warrants dismissal of the TCPA claims in the SAC for lack of
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standing.
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The Ninth Circuit’s decisions since Romero do not require a different outcome.
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Plaintiff relies extensively on the Ninth Circuit’s recent opinion in Van Patten v. Vertical
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Fitness Group, LLC, 847 F.3d 1037, 1043 (9th Cir. 2017), as supporting the existence of
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Article III standing here. Plaintiff’s reliance is misplaced. Van Patten addressed whether
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the recipient of telemarketing texts suffered a concrete injury in fact sufficient to confer
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Article III standing for a TCPA claims. Van Patten, however, did not hold that receipt of
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any telephone call satisfies the concrete injury in fact requirement for standing to assert
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TCPA claims. To the contrary, the Ninth Circuit specified that “[t]he TCPA establishes
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the substantive right to be free from certain types of phone calls and texts absent consumer
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consent.” Van Patten, 847 F.3d at 1043 (emphasis added).
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Elsewhere in the Van Patten opinion, the Ninth Circuit specified that the “certain
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types of phone calls and texts” that give a recipient standing to assert a TCPA violation are
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those made by telemarketers, noting that “in enacting the TCPA, Congress made specific
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findings that ‘unrestricted telemarketing can be an intrusive invasion of privacy’ and are a
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‘nuisance,’” and that “Congress sought to protect consumers from the unwanted intrusion
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and nuisance of unsolicited telemarketing phone calls and fax advertisements.”
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(emphasis added). Therefore, “Congress aimed to curb telemarketing calls to which
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consumers did not consent by prohibiting such conduct and creating a statutory scheme
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giving damages if that prohibition was violated.” Id. (emphasis added). Based on this
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Congressional intent, the Ninth Circuit held that the recipients of unsolicited telemarketing
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calls have suffered a concrete injury in fact sufficient to confer Article III standing to bring
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a claim under the TCPA. Id.
Id.
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In light of the Ninth Circuit’s determination that the TCPA was crafted to protect
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consumers’ concrete interests in avoiding invasions of privacy and nuisances attributable
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to unsolicited telemarketing calls and texts, the question becomes whether the SAC alleges
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TCPA “violations that actually harm, or at least that actually create a ‘material risk of harm’
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to, this concrete interest.” Robins v. Spokeo, Inc., 867 F.3d 1108, 1115 (9th Cir. 2017).
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The SAC does not satisfy this requirement. All of the calls at issue here relate to Ocwen’s
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efforts to collect a debt and do not relate to telemarketing. Calls from debt collectors are
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undoubtedly unwanted, stressful, and frustrating, but the TCPA was not intended to protect
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any concrete interests associated with calls from debt collectors or creditors. As a result,
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Ocwen’s use of an ATDS to contact Plaintiff’s cellular telephone in connection with its
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efforts to collect a debt was “a bare procedural violation of the [TCPA] that is ‘divorced
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from’ the real harms that [the TCPA] is designed to prevent.” Robins, 867 F.3d at 1115.
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Accordingly, any harms alleged in the SAC are not injuries in fact that give Plaintiff
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standing to assert claims under the TCPA.
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III.
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For the foregoing reasons, it is hereby ORDERED that Ocwen’s motion to dismiss
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is GRANTED with respect to Plaintiff’s TCPA claims and those claims are DISMISSED
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for lack of Article III standing. Accordingly, the motion to stay is DENIED AS MOOT.
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The dismissal of the TCPA claims raises questions about this Court’s subject matter
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jurisdiction over the remaining claims. Although it is not entirely clear, the SAC appears
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to assert subject matter jurisdiction based on the existence of a federal question (the TCPA
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claims) along with supplemental jurisdiction over the state law claims, while also alleging
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the existence of diversity jurisdiction. To the extent jurisdiction was premised on the
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existence of a federal question, the Court’s lack of jurisdiction over the only federal claims
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asserted in the SAC precludes the exercise of supplemental jurisdiction over the remaining
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state law claims. Scott v. Pasadena Unified Sch. Dist., 306 F.3d 646, 664 (9th Cir. 2002)
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(holding that upon dismissal of the federal claim for lack of standing, there was no
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discretion to retain supplemental jurisdiction over the state law claims).
Disposition
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Meanwhile, to the extent jurisdiction is premised on diversity, Plaintiff’s lack of
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standing for her TCPA claims means that she cannot rely on the damages available under
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the TCPA to satisfy the amount-in-controversy requirement. See Harris v. CVS Pharmacy,
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Inc., No. EDCV1302329ABAGRX, 2015 WL 4694047, at *5 (C.D. Cal. Aug. 6, 2015)
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(“Absent any standing to invoke Rhode Island law, the Court lacks jurisdiction to entertain
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Plaintiff's claims under the RIDTPA, and Plaintiff cannot rely on the RIDTPA’s statutory
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damages provision to satisfy CAFA’s $5,000,000 amount-in-controversy requirement.”).
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In other words, unless at least $75,000 remains in controversy based on the Rosenthal Act
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and negligence claims, the Court lacks subject matter jurisdiction over these claims as well.
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Because it is not clear from the face of the SAC that $75,000 remains in controversy based
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only on the Rosenthal Act claim and the negligence claim, Plaintiff is hereby ORDERED
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TO SHOW CAUSE in writing, on or before November 30, 2017, why the remaining state
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law claims should not be dismissed for lack of subject matter jurisdiction.
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It is SO ORDERED.
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Dated: November 16, 2017
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