Au v. Funding Group Inc., The et al

Filing 64

ORDER AFFIRMING MAGISTRATE JUDGE'S ORDER DENYING PLAINTIFF'S MOTION TO FILE SECOND AMENDED COMPLAINT AND ORDER DENYING PLAINTIFF'S MOTION TO RECONSIDER MOTION TO FILE SECOND AMENDED COMPLAINT, AND IN THE ALTERNATIVE, MOTION TO FILE REN EWED FIRST AMENDED COMPLAINT re 63 - Signed by CHIEF JUDGE SUSAN OKI MOLLWAY on 8/24/12. (emt, )CERTIFICATE OF SERVICEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Ronald Au shall be served by first class mail at the address of record on August 27, 2012.

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
)
)
)
Plaintiff,
)
vs.
)
)
)
THE FUNDING GROUP, INC.;
)
AMERICAN HOME MORTGAGE
SERVICING INC., NOW KNOWN AS )
)
HOMEWARD RESIDENTIAL, INC.;
)
OPTION ONE MORTGAGE
CORPORATION, NOW KNOWN AS
)
)
SAND CANYON CORPORATION;
)
WELLS FARGO BANK, N.A., AS
)
TRUSTEE FOR OPTION ONE
)
MORTGAGE LOAN TRUST 2007-5
)
ASSET-BACKED CERTIFICATES,
)
SERIES 2007-5,
)
)
Defendants.
_____________________________ )
RONALD AU,

CIVIL NO. 11-00541 SOM/KSC
ORDER AFFIRMING MAGISTRATE
JUDGE'S ORDER DENYING
PLAINTIFF'S MOTION TO FILE
SECOND AMENDED COMPLAINT AND
ORDER DENYING PLAINTIFF'S
MOTION TO RECONSIDER MOTION TO
FILE SECOND AMENDED COMPLAINT,
AND IN THE ALTERNATIVE, MOTION
TO FILE RENEWED FIRST AMENDED
COMPLAINT

ORDER AFFIRMING MAGISTRATE JUDGE'S ORDER DENYING
PLAINTIFF'S MOTION TO FILE SECOND AMENDED COMPLAINT AND
ORDER DENYING PLAINTIFF'S MOTION TO RECONSIDER MOTION
TO FILE SECOND AMENDED COMPLAINT, AND IN THE ALTERNATIVE,
MOTION TO FILE RENEWED FIRST AMENDED COMPLAINT
Plaintiff Ronald Au appeals from two rulings by the
Magistrate Judge.

The first, filed on July 31, 2012, denied Au's

Motion To File Second Amended Complaint.

The second, filed on

August 10, 2012, denied Au's Motion To Reconsider the first
ruling.

This court affirms both the July and the August orders

by the Magistrate Judge.
This court first considers whether the Magistrate
Judge’s orders are nondispositive pretrial orders.
Nondispositive pretrial orders by magistrate judges are expressly

authorized by law.

See 28 U.S.C. § 636(b)(1)(A).

The Federal

Rules of Civil Procedure reflect this statutory authority, with
Rule 72(a) providing that a district judge may refer to a
magistrate judge for determination “a pretrial matter not
dispositive of a party's claim or defense.”

Such motions are

customarily referred to magistrate judges in this district.
Local Rule 72.3.

See

An appeal from a magistrate judge's ruling on a

nondispositive matter may be brought pursuant to Local Rule 74.1.
Under 28 U.S.C. § 636(b)(1)(A), a magistrate judge’s
order on a nondispositive matter may be reversed by the district
court only if it is “clearly erroneous or contrary to law.”
threshold of the “clearly erroneous” test is high.

The

United States

v. U.S. Gypsum Co., 333 U.S. 364, 395 (1948) (“A finding is
‘clearly erroneous’ when although there is evidence to support
it, the reviewing court on the entire evidence is left with the
definite and firm conviction that a mistake has been
committed.”); Thorp v. Kepoo, 100 F. Supp. 2d 1258, 1260 (D. Haw.
2000) (the clearly erroneous standard is “significantly
deferential, requiring a definite and firm conviction that a
mistake has been committed”).
By contrast, absent consent by the parties, a
magistrate judge may opine on a dispositive matter only by making
findings or a report and recommending action to a district judge.
See 28 U.S.C. § 636(b)(1)(B). Objections to a magistrate judge's

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findings and recommendation are reviewed de novo.

28 U.S.C. §

636(b)(1); Fed. R. Civ. P. 72(b).
While a motion for leave to file a amend a complaint is
generally considered a nondispositive matter, some courts view a
magistrate judge's denial of a motion for leave to amend as a
dispositive ruling if the ruling denies a party a chance to
assert a new claim.

In particular, some courts have considered

as dispositive any denial based on the futility of the proposed
claim.

This line of cases was discussed by this court in some

detail in JJCO, Inc. v. Isuzu Motions America, Inc., 2009 WL
3818247 (D. Haw. Nov. 12, 2009), aff'd on other grounds, 2012 WL
2584294 (9th Cir. July 5, 2012) (unpublished).
In his appeal, Au cites both Local Rule 74.2, which
addresses review of findings and recommendations, and Local Rule
74.3, which addresses review of rulings by magistrate judges not
covered by other local rules.

Au, although now proceeding pro

se, was himself counsel of record in numerous prior cases in this
court.

He nevertheless makes no mention of Local Rule 74.1,

which addresses appeals from rulings on nondispositive matters.
It is therefore unclear what standard of review Au believes
applies.

This court need not resolve here the issue of the

applicable standard of review, because this court concludes that,
whether the Magistrate Judge's rulings are treated as
nondispositive orders reviewed for clear error and for being

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contrary to law, or as findings and recommendations subject to de
novo review, the Magistrate Judge was correct. Clearly, futility
was only one ground relied on by the Magistrate Judge, but even
if this court conducted de novo review of the entirety of the two
orders in issue, this court would reach the same result as the
Magistrate Judge.

The court stresses that it is not here ruling

that de novo review is required but is instead simply noting
that, even if it is required, the result is the same as if the
Magistrate Judge's filings are reviewed under only the "clear
error/contrary to law" standard.
The procedural background of these appeals was amply
summarized in the Magistrate Judge's orders.

Critical to the

Magistrate Judge's rationale was the history of this case.

The

original Complaint was dismissed, and Au moved to file a First
Amended Complaint.

The Magistrate Judge denied that motion in

the Order Denying Plaintiff Ronald Au's Motion To File First
Amended Complaint, an order not on appeal here.

That ruling,

filed on May 14, 2012, invited Au to file a new motion for leave
to amend his Complaint, but restricted the content of any new
proposed amended pleading.

The May ruling said:

"Any proposed

amended complaint shall comply with pertinent pleading standards
and shall name the current owner of the disputed note and
mortgage.

No other parties may be added.

Plaintiff may advance

no new legal theories against existing Defendants."

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The May

ruling was never challenged by Au.

Instead, Au responded to the

May order by filing his Motion To File Second Amended Complaint.
With the May ruling in effect, Au was bound by its restrictions
in any proposed amended complaint.

Like the Magistrate Judge,

this court on the present appeal puts great weight on Au's
violation of the never-challenged May order.
The Magistrate Judge noted in the July order that Au
had violated the May order and that, in addition, some of Au's
proposed new claims were futile given a ruling against Au in a
related case.

Even if this court reviews the futility issue de

novo, this court agrees with the Magistrate Judge.
Au moved for reconsideration of the July order without
establishing entitlement to reconsideration, and the Magistrate
Judge issued the August order, which denied the reconsideration
motion.
To the extent the rulings before this court are
findings and recommendations, they are adopted in full.

To the

extent the Magistrate Judge's rulings are properly viewed as
orders on nondispositive matters, they are affirmed.

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IT IS SO ORDERED.
DATED: Honolulu, Hawaii, August 24, 2012.

/s/ Susan Oki Mollway
Susan Oki Mollway
Chief United States District Judge

Ronald Au v. The Funding Group, Inc., et al.; Civil No. 11-00541
SOM/KSC; ORDER AFFIRMING MAGISTRATE JUDGE'S ORDER DENYING
PLAINTIFF'S MOTION TO FILE SECOND AMENDED COMPLAINT AND ORDER
DENYING PLAINTIFF'S MOTION TO RECONSIDER MOTION TO FILE SECOND
AMENDED COMPLAINT, AND IN THE ALTERNATIVE, MOTION TO FILE RENEWED
FIRST AMENDED COMPLAINT

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