U-Haul Co. of Nevada et al v. Gregory J. Kamer, Ltd. et al
Filing
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ORDER Granting 116 Motion to Remand, 118 Motion for Leave to File a Third-Party Complaint, and Denying 118 Motion to Consolidate. Signed by Chief Judge Robert C. Jones on 12/22/11. (Copies have been distributed pursuant to the NEF; CC: Certified copy of Order and Docket Sheet to State Court - ASB)
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UNITED STATES DISTRICT COURT
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DISTRICT OF NEVADA
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U-HAUL CO. OF NEVADA, INC., a Nevada )
corporation; and U-HAUL INTERNATIONAL, )
INC., a Nevada corporation
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Plaintiffs,
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v.
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GREGORY J. KAMER, LTD d/b/a KAMER )
ZUCKER & ABBOTT, a Nevada professional )
corporation; DEBRA WILCHER; a Nevada )
resident; NATHAN W. ALBRIGHT, a Virginia )
resident; STEVEN WAMSER, a Nevada
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resident; DOES 1-10; inclusive; and ROE
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CORPORATIONS 1-10, inclusive,
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Defendants.
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2:06-cv-618-RCJ-PAL
ORDER
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This case arises from a partial remand from the Ninth Circuit on one of Judge
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Sandoval’s former cases involving attorney misconduct during proceedings before the National
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Labor Relations Board (“NLRB”). Pursuant to the Ninth Circuit’s remand instructions, this
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Court reinstated Plaintiffs U-Haul Company of Nevada, Inc.’s and U-Haul International Inc.’s
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(“Plaintiffs”) claims against Nathan Albright, Debra Wilcher, and the law firm of Kamer, Zucker,
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& Abbott (“Kamer” or “Kamer firm”). (See Order (#93)). Currently before the Court is a Motion
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to Remand (#116).1 The Court heard oral argument on October 21, 2011.
BACKGROUND
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In May 2006, the United States filed a petition for removal alleging that an officer of the
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United States, Steven Wamser, had been named as a defendant in the case. (Pet. for
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Kamer filed a motion to file a third-party complaint and a motion to consolidate in its
opposition to the motion to remand. (See Opp’n to Mot. to Remand (#118) at 14, 16).
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Removal (#1) at 1-2). The government attached both Plaintiffs’ complaint and a certification
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for Wamser stating that he was acting within the scope of his employment as an employee of
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the United States at all relevant times in the complaint. (See Compl. (#1-1) at 2; see
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Certification of Scope of Emp’t (#1-1) at 25).
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Plaintiffs complaint alleged the following against Defendants Gregory J Kamer, Ltd.
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d/b/a Kamer Zucker & Abbott; Debra Wilcher; Nathan W. Albright; and Steven Wamser.
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(Compl. (#1-1) at 2). Wamser and Albright were employees of the NLRB. (Id. at 3). In 2004,
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the NLRB initiated proceedings against Plaintiffs and appointed Wamser and Albright to
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prosecute the action. (Id. at 4). Plaintiffs hired the Kamer firm to provide legal representation
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during the NLRB proceedings. (Id.). At some time beginning in 2004 through October 2005,
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Albright and Wilcher, a paralegal employed by the Kamer firm, “conducted and carried on an
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illicit and clandestine sexual relationship.” (Id. at 5). Albright’s wife, Jennifer Cory, confronted
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Albright about the affair in February 2005 and threatened to report him to the state bar and the
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NLRB. (Id.). In March of 2005, Wilcher left the law firm’s employment but then returned to
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work there in early-May 2005. (Id.). During the course of the affair, Wilcher provided Albright
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“with confidential information, which was reviewed and utilized by” Albright in the NLRB
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proceeding. (Id. at 6). The confidential information included a document prepared by the law
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firm that had provided a critical analysis of the entire proceeding for U-Haul’s in-house
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counsel. (Id.). Albright and Wilcher had discussed all aspects of the proceeding during their
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affair. (Id.). Albright had “influenced” Wilcher to provide him with confidential information
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pertaining to Plaintiffs’ position in the proceeding. (Id.). Wilcher sat in on and participated in
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witness preparation, served as custodian for the trial record, and was present throughout the
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proceedings. (Id.).
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Plaintiffs alleged that Wamser knew of the affair and had used the confidential
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information obtained by Albright. (Id.). On September 30, 2005, an administrative law judge
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(“ALJ”) issued a decision that Plaintiffs had violated the National Labor Relations Act (“NLRA”).
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(Id. at 7). On September 5, 2005, Albright informed the NLRB’s Regional Director of his
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wrongful behavior and asked Wilcher not to disclose the fact that confidential information had
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been exchanged between them. (Id.). On October 13, 2005, Albright contacted the Kamer
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firm and requested a meeting with Gregory Kamer. (Id. at 8). Upon learning of Albright’s
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meeting with Kamer, Wilcher provided Kamer with a one-page summary of her relationship
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with Albright, orally informed Kamer of the affair, and denied giving any confidential
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information to Albright. (Id.). On October 15, 2005, Albright told Kamer that he had obtained
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confidential information, including the aforementioned document, from Wilcher. (Id.). The
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Kamer firm initiated an investigation and placed Wilcher on administrative leave. (Id.). On
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October 19, 2005, an NLRB investigator, Terry Morgan, contacted the firm and requested an
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interview with Wilcher. (Id. at 9). After Morgan interviewed Wilcher on October 20, 2005,
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Wilcher resigned. (Id.). After meeting with the partners of the law firm that same day, Morgan
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learned that nobody at the law firm had informed Plaintiffs of Albright’s conduct. (Id.). Morgan
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told the law firm that she would research whether she had a duty to inform Plaintiffs herself.
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(Id.). After meeting with Morgan, the partners held a meeting and, as a result, the law firm
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contacted Plaintiffs’ general counsel and informed him of the affair. (Id.).
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Plaintiffs alleged sixteen causes of action. (Id. at 10). In the first claim for relief,
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Plaintiffs alleged conversion against Albright and Wilcher for exerting an act of domain over
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their confidential communications. (Id.). In the second claim for relief, Plaintiffs alleged fraud
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against Albright and Wilcher. (Id. at 11). In the third claim for relief, Plaintiffs alleged
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constructive fraud against Albright and Wilcher. (Id. at 12). In the fourth claim for relief,
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Plaintiffs alleged civil conspiracy against Albright and Wilcher. (Id. at 13). In the fifth claim for
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relief, Plaintiffs alleged malpractice and professional misconduct against Albright. (Id.). In the
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sixth and seventh claims for relief, Plaintiffs alleged negligent supervision, professional
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misconduct, and acting in concert against Wamser. (Id. at 13-15).
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In the eighth claim for relief, Plaintiffs alleged legal malpractice against the Kamer firm
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because the firm breached its duty to use skill, prudence, and diligence in exercising and
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performing their legal tasks. (Id. at 16). In the ninth claim for relief, Plaintiffs alleged a breach
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of fiduciary duty against the Kamer firm because of the firm’s conduct before and after the
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discovery of the affair. (Id. at 17). In the tenth cause of action, Plaintiffs alleged a breach of
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the duty to maintain confidentiality against the Kamer firm. (Id.). In the eleventh cause of
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action, Plaintiffs alleged negligence against the law firm because it breached the duty of care
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it owed to Plaintiffs. (Id. at 18). In the twelfth claim for relief, Plaintiffs alleged negligent hiring
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against the law firm for hiring and then rehiring Wilcher even though the firm “knew, or should
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have known” of Wilcher’s “unethical and dangerous propensities, including, without limitation,
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the existence and continuance” of the affair when it rehired Wilcher. (Id. at 19). In the
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thirteenth claim for relief, Plaintiffs alleged negligent supervision against the Kamer firm for
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breach of duty to properly supervise its employee, Wilcher. (Id. at 19-20). In the fourteenth
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claim for relief, Plaintiffs alleged vicarious liability/respondeat superior against the Kamer firm
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for Wilcher’s acts of conversion and wrongful transfer of confidential information to Albright
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during the scope of her employment. (Id. at 20). In the fifteenth claim for relief, Plaintiffs
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alleged constructive fraud against the Kamer firm for breaching its legal and equitable duties
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by misrepresenting and concealing material facts related to the affair until the NLRB
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threatened to do it themselves. (Id. at 21). In the sixteenth claim for relief, Plaintiffs alleged
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unjust enrichment against the Kamer firm because it “unjustly retained the money and property
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of U-Haul against fundamental principles of justice, equity, and good conscience” and
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requested that the firm refund the attorneys’ fees that Plaintiffs had paid. (Id. at 22).
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On August 17, 2006, Albright died. (Notice of Death (#46)). In November 2006, the
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Court granted Plaintiffs’ Motion for Substitution of Parties and substituted Jennifer Cory,
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Executrix of the Estate of Nathan Albright, as Defendant in place of Albright. (Order (#56)).
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In June 2007, Judge Sandoval issued an order granting the government’s certification
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motion, certified that Wamser had acted within the course and scope of his employment, and
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substituted the United States in his place. (Order (#68) at 4-6). Although the government did
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not file a certification for Albright, the Court sua sponte concluded that Albright had also acted
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within the scope of his employment and substituted the United States in his place. (Id. at 8).
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After substituting the United States for both Wamser and Albright, the Court granted the
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government’s motion to dismiss based on lack of subject-matter jurisdiction for failure to
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exhaust under the Federal Tort Claims Act. (Id. at 8-9). The Court declined to exercise
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jurisdiction over the remaining state law claims and denied Kamer’s outstanding motions as
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moot. (Id. at 10-11).
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Plaintiffs appealed to the Ninth Circuit. (See Notice of Appeal (#71)). The Ninth Circuit
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held that this Court erred by substituting the United States for Albright, but did not err in
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upholding the Attorney General’s certification of Wamser. (Opinion (#92) at 4). The Ninth
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Circuit remanded with instructions that this Court “reinstate U-Haul’s claims against Albright
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. . . [and] reinstate the claims against the other defendants, Debra Wilcher and Kamer Zucker
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& Abbott, because [this Court] dismissed those claims under the mistaken belief that it lacked
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subject matter jurisdiction over Albright under the FTCA.” (Id. at 5). The Ninth Circuit stated
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that, after reinstating those claims, this Court could decide whether to exercise supplemental
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jurisdiction over the remaining claims. (Id.).
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In December 2010, this Court reinstated Plaintiffs’ claims against Albright, Wilcher, and
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Kamer. (Order (#93)). On July 2011, after oral argument, this Court granted Kamer’s motion
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to reinstate the motions that Judge Sandoval had denied as moot but substantively denied
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those motions. (See Order (#108) at 7-11). Plaintiffs now file the pending motion to remand
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to state court.
DISCUSSION
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I.
Motion to Remand (#116)
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Plaintiffs file a motion to remand to state court because there is no longer a basis for
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the Court to exercise original jurisdiction in this case now that the claims against the United
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States have been dismissed. (Mot. to Remand (#116) at 3-4). Plaintiffs argue that there is
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no federal question or diversity jurisdiction. (Id. at 4). Plaintiffs argue that the Court should
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decline to exercise supplemental jurisdiction because the values of economy, convenience,
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fairness, and comity favor remand. (Id. at 6).
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In response, Kamer argues that this Court should exercise supplemental jurisdiction
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over this case because of judicial economy, convenience, fairness, and comity considerations.
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(Opp’n to Mot. to Remand (#118) at 9). Kamer argues that this Court has invested significant
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time and resources in developing familiarity with the parties and claims involved in this case
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because the United States removed this case in May 2006. (Id.). Kamer asserts that the
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motions before this Court and the appeal have narrowed the issues for determination and that
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remand would result in judicial inefficiency. (Id.). Kamer asserts that it would be more
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convenient for the parties to remain in federal court because the companion case, 2:08-cv-
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729-KJD-RJJ,2 derives from a common nucleus of operative facts and the parties anticipate
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that discovery for both cases will be identical. (Id. at 9-10). Kamer argues that it would be fair
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to both parties to keep the case in federal court because the parties can avoid paying
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duplicative fees and expenses in another court. (Id. at 11). Kamer also argues that this Court
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has already decided to exercise supplemental jurisdiction over this case by reinstating and
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ruling on the motions that Judge Sandoval had denied as moot. (Id. at 12).
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Wilcher also files an opposition to Plaintiffs’ motion to remand. (Wilcher Opp’n to Mot.
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to Remand (#119)). She requests that, if the Court declines to exercise supplemental
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jurisdiction, that the Court dismiss all claims against Kamer and herself. (Id. at 9).
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The supplemental jurisdiction statute provides that “in any civil action of which the
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district courts have original jurisdiction, the district courts shall have supplemental jurisdiction
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over all other claims that are so related to claims in the action within such original jurisdiction
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that they form part of the same case or controversy under Article III of the United States
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Constitution.” 28 U.S.C. § 1367(a). A district court may decline to exercise supplemental
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jurisdiction over a claim under subsection (a) if the district court has dismissed all claims over
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which it has original jurisdiction. Id. § 1367(c)(3).
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In determining whether to exercise supplemental jurisdiction, the Court should consider
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the values of judicial economy, convenience, fairness, and comity. See Carnegie-Mellon Univ.
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v. Cohill, 484 U.S. 343, 350, 108 S.Ct. 614, 619, 98 L.Ed.2d 720 (1988). The Ninth Circuit has
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held that the “decision whether to continue to exercise supplemental jurisdiction over state law
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claims after all federal claims have been dismissed lies within the district court’s discretion.”
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Satey v. JP Morgan Chase & Co., 521 F.3d 1087, 1091 (9th Cir. 2008).
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In that case, also known as the “Government Case,” Plaintiffs have sued the United
States, Nathan Albright, and Steve Wamser under the FTCA. (Id. at 9-10).
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In this case, Plaintiffs are correct that this Court no longer has original jurisdiction in this
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case because the United States is no longer a party. The Court declines to exercise
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supplemental jurisdiction in this case. Although this case has been before this Court since
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2006, the case has not proceeded past the pleading stage. Therefore, after considering
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judicial economy, convenience, and fairness, the Court declines to exercise supplemental
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jurisdiction. The Court further notes that, based on comity concerns, the state court should
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address the state law claims in this case. Accordingly, the Court grants the Motion to Remand
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(#116).
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II.
Motion for Leave to File Third-Party Complaint & Motion to Consolidate (#118)
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Kamer also files a motion for leave to file a third party complaint against Steven
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Wamser/United States. (Opp’n to Mot. to Remand (#118) at 14). Alternatively, Kamer seeks
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to consolidate this case with the Government Case. (Id. at 16).
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Because the Court declines to exercise supplemental jurisdiction in this case, the Court
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denies the motion for leave to file third-party complaint (#118) for lack of jurisdiction.
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Additionally, based on the proceedings before Judge Dawson in the Government Case, the
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Court denies the motion to consolidate (#118).
CONCLUSION
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For the foregoing reasons, IT IS ORDERED that the Motion to Remand (#116) is
GRANTED.
IT IS FURTHER ORDERED that the Motion for Leave to File a Third-Party Complaint
(#118) is DENIED for lack of jurisdiction.
IT IS FURTHER ORDERED that the Motion to Consolidate (#118) is DENIED.
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DATED: This 22nd day of December, 2011.
_____ day of December 2011.
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_________________________________
United States District Judge
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