O'Rourke et al v. Select Portfolio Servicing, Inc.

Filing 17

ORDER that because there exists no demonstrated basis for the Court to exercise jurisdiction over this case, the matter is hereby remanded to New York State Supreme Court, Monroe County. ***CLERK TO FOLLOW UP. Signed by Hon. David G. Larimer on 7/18/11. (EMA)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
_______________________________________________
FRANK L. O’ROURKE,
MARY C. O’ROURKE,
Plaintiffs,
DECISION AND ORDER
11-CV-6061L
v.
SELECT PORTFOLIO SERVICING, INC.,

Defendant.
________________________________________________
On February 4, 2011, this matter was removed here from Supreme Court, Monroe County
on the basis of federal question jurisdiction pursuant to 28 U.S.C. §1331. The removal was
premised on the contents of plaintiffs’ summons with notice, which identified claims arising
under the Truth in Lending Act, 15 U.S.C. §1601 et seq., and the Real Estate Settlement
Procedures Act, 12 U.S.C. §2601 et seq. (Dkt. #1).
Plaintiffs thereafter filed a complaint which does not contain the listed federal claims, or
any other claims arising under the “Constitution, laws or treaties of the United States.” 28
U.S.C. §1331. Although the parties are residents of different states, implicating potential
diversity jurisdiction pursuant to 28 U.S.C. §1332, the amount in controversy is not identified in
the summons or complaint.
Mindful of its duty to ensure that it has jurisdiction over the matters before it, on May 2,
2011, this Court issued an Order to Show Cause (Dkt. #9) which directed the parties to file any
additional evidence which established a basis for its exercise of jurisdiction over this action. See
Dean v. Blumenthal, 577 F.3d 60, 64 (2d Cir. 2009) (“[courts] have an independent obligation to

evaluate [bases for jurisdiction] even in the absence of a challenge from any party”), cert. denied,
130 S.Ct. 2347 (2010).
Defendant filed a memorandum of law which urges the Court to retain jurisdiction, on the
grounds that the Court’s initial federal question jurisdiction was fixed at the time the summons
was filed, and that in the absence of federal jurisdiction, the Court should assume, absent
evidence to the contrary, that the amount in controversy meets the $75,000 threshold for diversity
jurisdiction.
Initially, even if the plaintiffs’ summons initially vested this Court with federal question
jurisdiction, it is undisputed that this matter no longer presents any federal claims. Defendant
nonetheless urges the Court to exercise supplemental jurisdiction over the plaintiffs’ state law
claims.
The exercise or decline of supplemental jurisdiction is governed by 28 U.S.C. §1367,
which provides that, “in any civil action of which the district courts have original jurisdiction, the
district courts shall have supplemental jurisdiction over all other claims that are so related to
claims in the action within such original jurisdiction that they form part of the same case or
controversy . . .” 28 U.S.C. §1367(a). Courts may appropriately decline to exercise
supplemental jurisdiction where, as here, all claims over which the Court had original
jurisdiction have been dismissed or otherwise removed from the case. 28 U.S.C. §1367(c). The
Second Circuit notes that, “in the usual case in which all federal-law claims are eliminated before
trial, the balance of factors to be considered . . . will point toward declining to exercise
jurisdiction over the remaining state-law claims.” Valencia ex rel. Franco v. Lee, 316 F.3d 299,
305 (2d Cir. 2003). The relevant factors include judicial economy, convenience, fairness and
comity. Id. Having reviewed these factors, the Court concludes that exercising jurisdiction over
plaintiffs’ state law claims is inappropriate, inconvenient and unnecessary, and declines to
assume supplemental jurisdiction over the matter.

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Grounds to exercise diversity jurisdiction are also absent. It is well settled that in order to
establish diversity jurisdiction, the amount in controversy must “appear on the face of the
complaint or be established by proof that the matter in controversy exceeds . . . the [requisite]
sum . . .” Miller v. European American Bank, 921 F. Supp. 1162, 1167 (S.D.N.Y. 1996).
See also Taro Pharm. Indus. v. Sun Pharm. Indus., 2010 U.S. Dist. LEXIS 84163 at *53-*54
(S.D.N.Y. 2010) (failure to allege amount in controversy and diversity of citizenship deprives the
court of a basis to exercise diversity jurisdiction); Grandon v. Merrill Lynch & Co., Inc., 1999
U.S. Dist. LEXIS 16837 at *16-*17 (S.D.N.Y. 1999) (same). See generally Yonkosky v. Hicks,
409 F. Supp. 2d 149, 157-158 (W.D.N.Y. 2005). The cases upon which defendant relies in
urging the Court to assume damages in the threshold amount, which concern challenges by
defendants seeking to overcome the presumption of truth given to a plaintiff’s assertion of the
amount in controversy, are inapposite.
Because there exists no demonstrated basis for the Court to exercise jurisdiction over this
case, the matter is hereby remanded to New York State Supreme Court, Monroe County.
IT IS SO ORDERED.

_______________________________________
DAVID G. LARIMER
United States District Judge
Dated: Rochester, New York
July 18, 2011.

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