Emiabata et al v. The Bank of New York Mellon Trust Company N.A./JP Morgan Chase Bank, Specialized Loan Servicing (SLS) et al

Filing 5

ORDER ADOPTING REPORT AND RECOMMENDATIONS for 3 Report and Recommendations except with respect to its analysis of subject matter jurisdiction. IT IS ORDERED that the Emiabata's Objections [#4] are OVERRULED. Signed by Judge Sam Sparks. (dl)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
AUSTIN DIVISION

Pfr

5:O

C-

PHILIP 0. EMIABATA and SYLVIA
EMIABATA,

Plaintiffs,

CAUSE NO.:
AU-17-CA-01 1O1-SS

-vs-

THE BANK OF NEW YORK MELLON
TRUST COMPANY N.A./J.P. MORGAN
CHASE BANK, SPECIALIZED LOAN
SERVICING (SLS); JP MORGAN CHASE
BANK, WASHINGTON MUTUAL BANK
(BSI); and AVAIL I. LLC,
Defendants.
[I] 91) a;

BE IT REMEMBERED on this day the Court reviewed the file in the above-styled cause,
and specifically Plaintiffs Philip and Sylvia Emiabata's Complaint [#1], the United States

Magistrate Judge's Report and Recommendation [#3], and the Emiabatas' Objections [#4].
Having reviewed the documents, the governing law, and the file as a whole, the Court enters the
following.

Plaintiffs' complaint was referred to United States Magistrate Judge Mark Lane for report
and recommendation pursuant to 28 U.S.C.

§

636(b) and Rule

1

of Appendix C of the Local

Court Rules of the United States District Court for the Western District of Texas, Local Rules for

the Assignment of Duties to United States Magistrate Judges. Plaintiffs are entitled to de novo
review of the portions of the Magistrate Judge's report to which they filed specific objections.
28 U.S.C. § 636(b)(1). All other review is for plain error. Douglass v. United Servs. Auto. Ass 'n,

79 F.3d 1415, 1428-29 (5th Cir. 1996) (en banc). A party's failure to timely file written

objection to the proposed findings, conclusions, and recommendation in a Report and
1

Recommendation bars that party, except upon grounds of plain error, from attacking on appeal
the unobjected-to proposed factual findings and legal conclusions accepted by the District Court.
See Douglass v. United Services Auto. Ass 'n, 79 F.3d 1415 (5th Cir. 1996) (en banc).

Analysis
Plaintiffs have raised two objections. First, the Emiabatas argue the Magistrate Judge
erred in dismissing for lack of jurisdiction because complete diversity exists. Objs. R. & R. [#4]
at 6. Second, the Emiabatas argue they have pled sufficient facts to state a claim for relief. Id. In

light of these objections, the Court has undertaken a de novo review of the entire case file in this

cause.

The Court will first address whether federal jurisdiction exists over the Emiabatas'
claims. It will then turn to the Emiabatas' contention they have stated a claim for relief.

I.

Federal Jurisdiction
A.

Diversity Jurisdiction

District courts have diversity jurisdiction over civil actions between citizens of different
States, where the amount in controversy exceeds $75,000.00. 28 U.S.C.

Court has interpreted this statute to require "complete

§

1332(a). The Supreme

diversity"that is, the citizenship of every

plaintiff must be different from that of every defendant. Caterpillar Inc.

v.

Lewis, 519 U.S.

61, 68 (1996). For purposes of diversity jurisdiction, a corporation is a citizen of both its state of

incorporation and the state in which its principal place of business is located. Id.

§

1332(c)(1).

The Emiabatas have not met their burden of pleading diversity jurisdiction. While the

Emiabatas allege they are citizens of Texas, they have not established their citizenship is
different from that of every defendant. Objs. R. & R. [#4] at 6. The Emiabatas allege each of the
defendants is incorporated in a state other than Texas. Id. However, the Emiabatas have failed to

2

allege these Defendants have a principal place of business in a state other than Texas. See
Compl. [#1] at 2; Objs. R. & R. [#4] at 6. Since the Emiabatas fail to allege complete diversity,

they do not meet their burden of pleading and this Court lacks diversity jurisdiction.

B.

Subject Matter Jurisdiction

Though the Emiabatas do not object to the Magistrate Judge's analysis of subject matter

jurisdiction, the Court will nevertheless assess whether subject matter jurisdiction exists.
In most circumstances, the absence of a valid cause of action does not implicate subject

matter jurisdiction. Steel Co.

v.

Citizens for a Better Env 't, 523 U.S. 83, 89 (1998). A court may

dismiss for lack of subject matter jurisdiction based on the inadequacy of the federal claim only
when the claim is "so insubstantial, implausible, foreclosed by prior decisions of [the Supreme
Court], or otherwise completely devoid of merit as not to involve a federal controversy." Id.

(internal quotation marks and citations omitted); see also Till v. UnJlrst Fed. Say. & Loan Ass 'n,
653 F.2d 152, 155 n.2 (5th Cir. Unit A Aug. 1981) ("[I]t has long been recognized that where a

plaintiff asserts that a private right of action is implied from federal law, federal courts do have
the requisite subject matter jurisdiction to determine whether such a federal remedy exists.");

Bell v. Health-Mor, Inc., 549 F.2d 342, 344-45 (5th Cir. 1977).

Although many of the instant claims are so devoid of merit as to not create a federal
controversy, the Emiabatas have brought at least one claim conferring subject matter jurisdiction.

The Emiabatas have brought claims under HAMP. Compl. [#1]. The Magistrate Judge
ruled the Emiabata's HAMP claims cannot confer subject matter jurisdiction because there is no

private right of action under HAMP. R. & R. [#3]. However, the decisions cited by the

Magistrate Judge in support of its conclusion are not decisions by the Supreme Court. Absent a
Supreme Court decision foreclosing a private right of action under HAMP, the Emiabatas'

3

HAMP claims are sufficient to implicate federal subject matter jurisdiction.

Home Loans

Serv., L.P.,

See Kiper

v.

BAC

884 F. Supp. 2d 561, 572 (S.D. Tex. 2012) (holding HAMP does not

create a private right of action but implying Supreme Court has not ruled on the matter);

see also

Till, 653 F.2d at 155 n.2 (noting federal courts generally have subject matter jurisdiction to

determine whether implied rights of action exist under federal law). In sum, the Court concludes
subject matter jurisdiction exists.

II.

Failure to State a Claim
The Magistrate Judge found the Emiabatas failed to state a claim under any of the

statutory provisions cited in their complaint. R. & R. [#3] at 5-7. The Emiabatas argue the
Magistrate Judge erred in concluding the Emiabatas failed to state a claim for relief Objs. R. &
R. [#4] at 7. However, the Emiabatas objections do not raise any additional arguments that have

not been fully addressed by the Magistrate Judge in his Report and Recommendation. The Court,

having reviewed the Magistrate Judge's findings and conclusions and finding no error, will
accept and adopt the Report and Recommendation for the reasons stated therein.
Accordingly,
IT IS ORDERED that the Emiabata's Objections [#4] are OVERRULED; and
IT IS FURTHER ORDERED that the Report and Recommendation of the United

States Magistrate Judge [#3] is hereby ACCEPTED AND ADOPTED by the Court
except with respect to its analysis of subject matter jurisdiction.

SIGNED this the

"p

day of February 2018.

SAM SPARKS
SENIOR UNITED STATES DISTRICT JUDGE