Alphonse v. Arch Bay Holdings, LLC et al
Filing
133
ORDER AND REASONS that the stay previously imposed is PARTIALLY LIFTED as follows: Each of the defendants shall file a statement containing all information relevant to their citizenship no later than October 8, 2014. The parties shall file any supplemental memoranda directed to the issue of subject matter jurisdiction at that time. The parties shall meet with Magistrate Judge Roby for settlement discussions. Signed by Judge Helen G. Berrigan on 9/24/2014. [NEF: KWR](kac)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
GLENN E. ALPHONSE, JR.
CIVIL ACTION
VERSUS
NO. 12‐330
ARCH BAY HOLDINGS, LLC, ET AL
SECTION ʺCʺ (4)
ORDER AND REASONS
This matter comes before the Court on the issue of subject matter jurisdiction.
Having considered the record, the memoranda of counsel and the law, the Court orders
that Arch Bay Holdings, L.L.C. (ʺArch Bayʺ) and Specialized Loans Servicing, L.L.C.
(ʺSLSʺ) provide information relative to their citizenship for the following reasons.
This lawsuit was filed in February 2012 and alleges violations of the the Federal
Debt Collection Practices Act (ʺFDCPAʺ) and Louisiana Unfair Trade Practices Act
(ʺLUTPAʺ). Background facts are set forth in the Fifth Circuit opinion in this matter,
548 Fed. Appx. 979 (5th Cir. 2013).
When the Court ruled on the defendantsʹ first motion to dismiss in July 2012 and
allowed the plaintiff an opportunity to amend his complaint, it stated that it ʺwill need
to revisit the issue of subject matter jurisdiction in the event that plaintiffʹs claims under
the FDCPA are dismissed,ʺ and that ʺ[i]f that need arises, this Court will need the
citizenship of the defendants specified in accordance with the rule set forth in Harvey v.
Grey Wolf Drilling Co., 542 F.3d 1077, 1080 (5th Cir. 2008).ʺ Rec. Doc. 31. It ordered that
ʺ[f]acts relevant to citizenship should be specifically pled in any amendment.ʺ The
amended complaint did not provide this information, however. Rec. Doc. 33.
On the defendantsʹ second motion to dismiss in January 2013, this Court
dismissed all claims and the plaintiff appealed. 2013 WL 55911 (E.D.La). On appeal,
the Fifth Circuit acknowledged that the plaintiff did not ʺpressʺ the dismissal of his
FDCPA claims on appeal and considered only the dismissal of LUTPA claims against
Arch Bay and SLS. 548 Fed. Appx. at 981. Under the waiver doctrine, an issue that
could have been raised on appeal but was not raised are barred from consideration on
remand. Medical Center Pharmacy v. Holder, 634 F.3d 830, 834 (5th Cir. 2011). Therefore,
any challenge to the dismissal of the FDCPA claims has been forfeited by the plaintiff
and those claims are not mentioned in his opposition to the defendantsʹ motion for
summary judgment. Rec. Doc. 84. The viability of the LUTPA claims on remand
require application of Louisiana choice‐of‐law rules in conjunction with Louisiana res
judicata rules.
Recently, in reviewing the defendantsʹ motion for summary judgment, the Court
discovered the noncompliance with its 2012 order that the citizenship of the parties be
provided in the amended complaint. It ordered the parties to brief the issue whether
diversity jurisdiction exists. Rec. Docs. 104, 111. The plaintiffʹs response indicates that
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in 2014 the defendants objected to his discovery requests regarding their citizenship and
that ʺit is unlikelyʺ that any defendant is a Louisiana citizen. Rec. Doc. 119. Instead of
providing information relative to their citizenship and without affirmatively stating that
they were familiar with the citizenship of the defendants, the two defendants
ʺstipulatedʺ with each other that diversity of citizenship existed, challenged the
existence of the jurisdictional minimum and argued that, in any event, the Court should
maintain supplemental jurisdiction under 28 U.S.C. § 1367.1 Rec. Doc. 118. The Court
continued the trial and stayed this matter.
The Court is presented with a record in which the parties have ignored its July
2012 directive that the citizenship of the defendants be provided in any amended
complaint. The Courtʹs concern that only state law claims would remain has been
realized, and the remaining issues are uniquely dependent on the interpretation of
Louisiana law.
Although the plaintiff properly sought the necessary information subsequent to
the amended complaint, he provides no explanation as to why he did not file motions to
compel the information required by the Court. More egregious, however, is the
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The Court is not persuaded by the defendantsʹ citation to Smith v. Ashland, Inc., 250 F.3d 1167,
1171‐72 (8th Cir. 2001) as authority for the sufficiency of a stipulation for establishing diversity of
citizenship. The Courtʹs reading of that case indicates that the corporation in that case identified its state
of incorporation and principal place of business. Id. at 1172.
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defendantsʹ response. Although they argue in their motion for summary judgment that
the federal claims have been dismissed, they maintain that it is ʺunfair, uneconomical
and inconvenientʺ for the Court to decline exercising supplemental jurisdiction despite
the July 2012 directive. Rec. Doc. 118 at 5. The argument does not acknowledge the fact
that the defendants actually refused to provide information relative to their citizenship
in response to the plaintiffʹs discovery requests. The Court recognizes that the parties
may prefer to stay in federal court, but the parties were alerted that the Court would
require an independent basis for jurisdiction over the now‐remaining supplemental
state law claims more than two years ago.
In addition, the equities do not lean in favor of retaining jurisdiction in the
absence of an affirmative showing that diversity of citizenship exists. The Courtʹs
concern in July 2012 and now is the same: these LUTPA claims ask for the recognition of
new claims under Louisiana law and are appropriately presented to a Louisiana state
court.
The final issue presented is whether the plaintiff should be allowed an additional
opportunity to amend his complaint to properly allege diversity jurisdiction. The fact
that the defendants refused to provide the information to the plaintiff in discovery
weighs in favor of considering an additional opportunity, if diversity exists.
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Accordingly,
IT IS ORDERED that the stay previously imposed is PARTIALLY LIFTED as
follows:
1. Each of the defendants shall file into the record a statement containing all
information relevant to their citizenship no later than October 8, 2014. The parties shall
file any supplemental memoranda directed to the issue of subject matter jurisdiction at
that time.
2. The parties shall meet with Magistrate Judge Roby for settlement discussions.
New Orleans, Louisiana, this 24th day of September, 2014.
____________________________________
HELEN G. BERRIGAN
UNITED STATES DISTRICT COURT
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