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Cordova v. Pacific Point Funding, Inc.

United States District Court, E.D. California
Aug 17, 2007
NO. CIV. S-07-1067 LKK/EFB (E.D. Cal. Aug. 17, 2007)

Opinion

NO. CIV. S-07-1067 LKK/EFB.

August 17, 2007


ORDER


This case involves a dispute over the refinance of a mortgage. Plaintiffs originally filed in state court, alleging a claim under the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. § 2614, as well as various state law claims. After defendant Homecomings Financial removed the case, plaintiffs filed a first amended complaint omitting the federal claim. Pending before the court is plaintiffs' motion to remand, as well as a motion to dismiss filed by defendants Pacific Point Funding, Paul Moffitt, and Timothy Volk, and a motion to strike filed by Homecomings Financial.

Under Ninth Circuit law, "jurisdiction must be analyzed on the basis of the pleadings filed at the time of removal without reference to subsequent amendments." Sparta Surgical Corp. v. National Ass'n of Securities Dealers, Inc., 159 F.3d 1209, 1213 (9th Cir. 1998). Accordingly, "a plaintiff may not compel remand by amending a complaint to eliminate the federal question upon which removal was based." Id. Because the plaintiffs in the case at bar simply omitted their RESPA claim in the amended complaint, the court is not obligated to remand the case.

Nevertheless, the exercise of supplemental jurisdiction over the remaining state claims is discretionary. The Ninth Circuit employs a two-part test to determine whether it is appropriate for a court to exercise its discretion in declining supplemental jurisdiction. See Acri v. Varian Assocs. Inc., 114 F.3d 999 (9th Cir. 1997) ("While discretion to decline to exercise supplemental jurisdiction over state law claims is triggered by the presence of one of the conditions in § 1367(c), it is informed by the Gibbs values `of economy, convenience, fairness, and comity.'"). First, the court must determine whether the case falls under one of the four enumerated bases for declining supplemental jurisdiction under 28 U.S.C. § 1367(c). Here, the case falls under the third basis where all claims over which the court has original jurisdiction have been dismissed. 28 U.S.C. § 1367(c)(3).

Second, the court must consider whether economy, convenience, fairness, and comity will be served by exercising jurisdiction. Here, with regard to economy, the court's involvement up to now has been nonexistent. The case was removed on June 4, 2007, and the pending matters constitute the first motion practice before the court. Similarly, convenience does not appear to weigh in favor of either retaining jurisdiction or remanding the case, given that the state court action was filed in San Joaquin Superior Court.

Comity, however, weighs in favor of remand. See United Mine Workers v. Gibbs, 383 U.S. 715, 726 (1966) ("Needless decisions of state law should be avoided as a matter of comity."). Here, all of plaintiffs' claims, including (1) breach of fiduciary duty, (2) unfair business practices, (3) unjust enrichment, (4) breach of oral agreement, and (5) fraud, arise under state law.

Defendants respond that two of these claims — unfair business practices and unjust enrichment — turn on the allegation that the loan involved "an illegal yield spread premium," which defendants claim will require a finding that there was a RESPA violation. Even assuming that this characterization is accurate, it does not appear that California state courts are unfamiliar with RESPA claims. See, e.g., Byars v. SCME Mortgage Bankers, Inc., 109 Cal. App. 4th 1134 (2003) (affirming grant of summary judgment on deceptive business practice claim involving allegedly illegal yield spread premium and RESPA). Accordingly, a federal court would not necessarily be more competent to adjudicate a state law claim that indirectly alleged a RESPA violation. Furthermore, plaintiffs' remaining claims appear to turn on issues of purely state law. This fact also suggests that declining to exercise supplemental would be appropriate in the interests of comity.

Accordingly, the court GRANTS plaintiffs' motion to remand.

IT IS SO ORDERED.


Summaries of

Cordova v. Pacific Point Funding, Inc.

United States District Court, E.D. California
Aug 17, 2007
NO. CIV. S-07-1067 LKK/EFB (E.D. Cal. Aug. 17, 2007)
Case details for

Cordova v. Pacific Point Funding, Inc.

Case Details

Full title:ARTURO DE CORDOVA, an individual, and MARILYN A. CORDOVA, an individual…

Court:United States District Court, E.D. California

Date published: Aug 17, 2007

Citations

NO. CIV. S-07-1067 LKK/EFB (E.D. Cal. Aug. 17, 2007)