Robinson v. Standard Mortgage Corporation et al

Filing 63

ORDER AND REASONS that defendants' motion 58 to dismiss for lack of subject matter jurisdiction is GRANTED. All remaining pending motions in this case are hereby DENIED AS MOOT.. Signed by Judge Sarah S. Vance on 8/24/16.(jjs)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
JORDELLA ROBINSON,
INDIVIDUALLY AND AS A
REPRESENTATIVE OF A CLASS OF
SIMILARLY SITUATED
BORROWERS
VERSUS

CIVIL ACTION

NO. 15-4123

STANDARD MORTGAGE
CORPORATION and STANDARD
MORTGAGE INSURANCE AGENCY,
INC.

SECTION “R” (2)

ORDER AND REASONS
Before the Court is defendants’ Rule 12(b)(6) motion to dismiss
plaintiff Jordella Robinson’s state law claims. Defendants request in the
alternative that, if any of plaintiff’s state law claims survive this 12(b)(6)
motion, this Court should dismiss the state law claims due to lack of
jurisdiction under 28 U.S.C. § 1367(c). For the following reasons, the Court
declines to exercise supplemental jurisdiction over plaintiff’s state law claims
and grants defendant’s motion to dismiss for lack of jurisdiction. Because
this Court no longer has jurisdiction over this case, all remaining pending
motions are denied as moot.

I.

BACKGROUND
In 2004, plaintiff Jordella Robinson purchased a home in Harvey,

Louisiana and mortgaged it to her lender, Standard Mortgage Corporation. 1
The mortgage agreement included a “force-placed”2 insurance clause, which
required Robinson to obtain hazard insurance. 3

The agreement also

authorized Standard to purchase hazard insurance on the property if
Robinson failed to do so. 4 When Robinson’s insurance expired and she failed
to obtain a new policy, Standard notified her that if she did not obtain new
coverage, it would obtain the coverage for her at her expense.5 Nearly four
months later, Standard secured an insurance policy on the property at a cost
of $8,845.20.6
In her putative class action complaint, Robinson alleges that
defendants colluded to manipulate the force-placed insurance market by

R. Doc. 38 at 12 ¶ 53.
“Force-placed” insurance refers to when mortgage lenders
require homeowners to maintain hazard insurance on the mortgaged
property to protect the lender’s interest in the collateral. With a “forceplaced” insurance policy, if a homeowner fails to obtain the required
coverage, the lender can independently acquire the insurance and add the
cost of the premiums to the principal due under the note.
3
R. Doc. 38 at 12 ¶ 54.
4
Id.
5
Id. at 13 ¶ 58.
6
Id. at 14 ¶ 63; R. Doc. 38-1 at 10.
2
1

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artificially inflating the amounts that borrowers pay for coverage.7
Robinson’s complaint alleged violations of the Racketeer Influenced Corrupt
Organizations Act (“RICO”), 18 U.S.C. § 1962(c) (Count One); conspiracy to
violate RICO, 18 U.S.C. § 1962(d) (Count Two); breach of the implied
covenant of good faith and fair dealing (Count Three); and unjust
enrichment (Counts Four and Five). On June 7, 2016, this Court dismissed
Robinson’s RICO claim and RICO conspiracy claim for failure to state a claim
upon which relief can be granted.8 All that remains are plaintiff’s state law
claims for breach of the implied covenant of good faith and fair dealing, and
unjust enrichment.

II.

DISCUSSION
Under 28 U.S.C. § 1367(a), district courts have supplemental

jurisdiction over “all other claims that are so related to the claims in the
action within such original jurisdiction that they form part of the same case
or controversy under Article III of the United States Constitution.” However,
28 U.S.C. § 1367(c) provides that district courts may decline to exercise
supplemental jurisdiction over a claim under subsection (a) if “(1) the claim

R. Doc. 38 at 6 ¶ 27. For a more detailed explanation of the
factual background of this case, see R. Doc. 55 at 2-8.
8
R. Doc. 55.
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raises a novel or complex issue of State law, (2) the claim substantially
predominates over the claim or claims over which the district court has
original jurisdiction, (3) the district court has dismissed all claims over which
it has original jurisdiction, or (4) in exceptional circumstances, there are
other compelling reasons for declining jurisdiction.” The language of section
1367(c) and case law makes clear that this is not a balancing test, any one of
the four factors is independently sufficient to justify declining supplemental
jurisdiction. See 13D Wright & Miller, Fed. Prac. & Proc. Juris. § 3567.3 (3d
ed.). The Supreme Court has given further guidance, instructing federal
courts to consider and weigh the values of judicial economy, convenience,
fairness, and comity in order to decide whether to exercise supplemental
jurisdiction over pendent state law claims. See Carnegie-Mellon University
v. Cohill, 484 U.S. 343, 350 (1988).
The Fifth Circuit has made clear that the “‘general rule is to dismiss
state claims when the federal claims to which they are pendent are
dismissed.’” Enochs v. Lampasas County, 641 F.3d 155, 161 (5th Cir. 2011)
(quoting Parker & Parsley Petroleum Co. v. Dressler Indus., 972 F.2d 580,
585 (5th Cir. 1992)). Though this rule is neither “mandatory nor absolute,”
Batiste v. Island Records Inc., 179 F.3d 217, 227 (5th Cir. 1999), a district
court has “wide discretion” to decline to exercise supplemental jurisdiction
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over state law claims once all federal claims have been dismissed. See
Guzzino v. Felterman, 191 F.3d 588, 595 (5th Cir. 1999). Additionally, the
Supreme Court has noted that when the federal claims are eliminated before
trial, the Carnegie-Mellon factors will normally “point toward declining to
exercise jurisdiction over the remaining state-law claims.” Carnegie-Mellon,
484 U.S. at 350 n. 7.
Here, the section 1367(c) factors, the general rule, and the factors from
Carnegie-Mellon weigh in favor of declining to exercise supplemental
jurisdiction.

Robinson’s federal claims have been dismissed, satisfying

section 1367(c)(3). In terms of novelty and complexity of state law, the
parties have not cited any Louisiana case or statute governing the claims
asserted on the specific facts at issue here, and the parties vigorously dispute
the merits of plaintiff’s claims.

Further, this Court has not invested

substantial judicial resources in the supplemental claims, the trial date is not
imminent,9 and any work the parties have already done can be utilized in
state court. See Robinett v. State Farm Mut. Automobile Ins. Co., No. 020842, 2002 WL 31498993, at *1 (E.D. La. Nov. 7, 2002), aff’d 83 F. App’x
638 (5th Cir. 2003). Finally, it cannot be said that requiring the parties, all

See R. Doc. 49 at 4 (“Trial will commence the week beginning,
Monday, August 7, 2017”).
5
9

Louisiana citizens, to litigate in Louisiana state court would be unfair or
inconvenient.

III. CONCLUSION
IT IS ORDERED that defendants’ motion to dismiss for lack of
subject matter jurisdiction is GRANTED. All remaining pending motions in
this case are hereby DENIED AS MOOT.

24th
New Orleans, Louisiana, this _____ day of August, 2016.

_____________________
SARAH S. VANCE
UNITED STATES DISTRICT JUDGE

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