Horne v. Wells Fargo Bank, N.A.

• Decision Date: 06 September 2013
• Docket Number: Case No. CV 13–04911–MMM (JCx).
• Citation: 969 F.Supp.2d 1203
• Court: U.S. District Court — Central District of California
• Parties: Andrew HORNE et al. v. WELLS FARGO BANK, N.A. et al.

969 F.Supp.2d 1203

Andrew HORNE et al.

v.WELLS FARGO BANK, N.A. et al.

Case No. CV 13–04911–MMM (JCx).

United States District Court, C.D. California.

Sept. 6, 2013.

Joseph S. Fogel, Fogel and Associates, Encino, CA, for Plaintiffs.

Christopher Alan Carr, Melissa Marie Coyle, Anglin Flewelling Rasmussen Campbell and Trytten LLP, Pasadena, CA, for Defendants.

Order Remanding Action to State Court

MARGARET M. MORROW, District Judge.

I. PROCEDURAL BACKGROUND

On April 17, 2013, Andrew and Karen Horne (collectively “plaintiffs”) filed a complaint in state court against Wells Fargo Bank, N.A. (“Wells Fargo”) alleging various state law violations arising from the foreclosure of residential property located in Woodland Hills, California (“property”).¹ On July 2, 2013, plaintiffs filed a first amended complaint, adding a claim for violation of the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. § 2605 et seq.² On July 9, 2013, Wells Fargo filed a notice of removal, invoking the court's federal question jurisdiction under 28 U.S.C. §§ 1441 and 1331.³ On July 24, 2013, plaintiffs filed a second amended complaint (“SAC”), which deleted the RESPA claim and did not plead any other claim arising under federal law. ⁴ On August 7, 2013, plaintiffs filed an ex parte application for an order remanding the action to state court.⁵ Wells Fargo opposes the motion.⁶

II. DISCUSSION

A. Legal Standard Governing Ex Parte Applications

The “opportunities for legitimate ex parte applications are extremely limited.” In re Intermagnetics America, Inc., 101 B.R. 191, 193 (C.D.Cal.1989). See also Mission Power Engineering Co. v. Continental Casualty Co., 883 F.Supp. 488, 489 (C.D.Cal.1995) (stating that to be proper, an ex parte application must demonstrate that there is good cause to allow the moving party to “go to the head of the line in front of all other litigants and receive special treatment”). As the court in Intermagnetics stated:

“... [E]x parte applications contravene the structure and spirit of the Federal Rules of Civil Procedure and the Local Rules of this court. Both contemplate that noticed motions should be the rule and not the exception. Timetables for the submission of responding papers and for the setting of hearings are intended to provide a framework for the fair, orderly, and efficient resolution of disputes. Ex parte applications throw the system out of whack. They impose an unnecessary administrative burden on the court and an unnecessary adversarial burden on opposing counsel who are required to make a hurried response under pressure, usually for no good reason. They demand priority consideration, where such consideration is seldom deserved. In effect, they put the applicant ‘ahead of the pack,’ without cause or justification.” Intermagnetics, 101 B.R. at 193 (footnote omitted).

The use of such a procedure is justified only when (1) there is a threat of immediate or irreparable injury; (2) there is danger that notice to the other party may result in the destruction of evidence or the party's flight; or (3) the party seeks a routine procedural order that cannot be obtained through a regularly noticed motion (i.e., to file an overlong brief or shorten the time within which a motion may be brought). Id.

B. Whether the Court Should Grant Plaintiffs' Ex Parte Application

Plaintiffs argue that the proximity of a nonjudicial foreclosure sale of their property renders the relief requested in their ex parte application proper because once the case is remanded, they intend to seek a temporary restraining order and preliminary injunction in state court enjoining the foreclosure sale.⁷ A looming foreclosure sale would likely satisfy the criteria for ex parte relief had plaintiffs filed an application for injunctive relief in this court. Federal courts are fully capable of hearing—and, where appropriate, granting—injunctive relief in cases involving pending foreclosure sales. See Bhandari v. Capital One, N.A., CV 12–04533–PSG, 2012 WL 6725898, *2 (N.D.Cal. Dec. 27 2012) (noting, in a foreclosure case, defendants' removal to federal court and the district court's issuance of a temporary restraining order) ; Hague v. Wells Fargo Bank, N.A., No. 11–02366–THE, 2012 WL 1029668, *1 (N.D.Cal. Mar. 26, 2012) (same); Foley v. Wells Fargo Bank, N.A., No. 3:10–cv–00702–RCJ–VPC, 2011 WL 2689250, *1–2 (D.Nev. July 5, 2011) (same); Farner v. Countrywide Home Loans, No. 08cv2193 BTM(AJB), 2009 WL 189025, *1 (S.D.Cal. Jan. 26, 2009) (same).

Plaintiffs, however, do not seek injunctive relief in their ex parte application. Instead, they seek an order remanding the case to state court so they can then pursue injunctive relief in their preferred forum. Plaintiffs identify no reason why a change of venue is necessary to prevent immediate or irreparable injury.

Courts have, however, granted ex parte applications to remand in cases where jurisdiction is lacking. “A suit may be removed to federal court under 28 U.S.C. § 1441(a) only if it could have been brought there originally.” Sullivan v. First Affiliated Sec., Inc., 813 F.2d 1368, 1371 (9th Cir.1987); see Colfin A1–CA4 LLC v. Clark, No. EDCV 13–1162–CAS (SPx), 2013 WL 3967656, *1–2 (C.D.Cal. Aug. 1, 2013) (granting plaintiff's ex parte application to remand to state court because defendant's removal was untimely and the court lacked subject matter jurisdiction); Federal Nat. Mortg. Ass'n v. Bravo, No. CV 12–10375–CAS–(Ex), 2013 WL 210198, *1 (C.D.Cal. Jan. 17, 2013) (granting plaintiff's ex parte application to remand to state court because the court lacked subject matter jurisdiction); U.S. Bank Nat. Ass'n v. Gutierrez Hernandez, No. SACV 10–01508–CJC(MLGx), 2010 WL 4054451, *2 (C.D.Cal. Oct. 14, 2010) (same).

Here, defendant properly removed the case because plaintiffs alleged a federal claim under the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. § 2605 et seq.⁸ Thus, jurisdiction is not lacking. Sparta Surgical Corp. v. National Ass'n of Sec. Dealers, Inc., 159 F.3d 1209, 1213 (9th Cir.1998) (removal “jurisdiction must be analyzed on the basis of the pleadings filed at the time of removal without reference to subsequent amendments”); id. (“a plaintiff may not compel remand by amending a complaint to eliminate the federal question upon which removal was based”); see also Harris v. City of Seattle, No. C02–2225P, 2004 WL 257625, *1 (W.D.Wash. Jan. 23, 2004) (“a federal court has the discretion to retain jurisdiction over state law claims even afterthe federal question basis for jurisdiction is dismissed”); Millar v. Bay Area Rapid Transit Dist., 236 F.Supp.2d 1110, 1116 (N.D.Cal.2002) (noting that “if a case was properly removed, a plaintiff cannot thereafter oust the federal court of jurisdiction by unilaterally changing the case so as to destroy the ground upon which removal was based”); Boston Reed Co. v. Pitney Bowes, Inc., No. 02–01106 SC, 2002 WL 137993, *2 (N.D.Cal. June 20, 2002) (noting that “[a] district court's subject matter jurisdiction is determined from the complaint at the time of removal, not as subsequently amended” (citations omitted)); Kinder v. Citibank, No. 99–CV–2500 W(JAH), 2000 WL 1409762, *2 (S.D.Cal. Sept. 14, 2000) (finding that “[p]laintiff ... cannot divest the Court of subject matter jurisdiction by selectively dismissing claims that formed the basis for removal”).

C. Supplemental Jurisdiction

Plaintiffs contend nonetheless that the court should remand the action because after Wells Fargo removed the case, they filed a second amended complaint that deleted the federal claim.⁹ As noted, because removal was proper, the court has power to retain jurisdiction over supplemental state law claims that “are so related to [the federal] claim[ ] in the action that they form part of the same case or controversy.” 28 U.S.C. § 1367(a). The exercise of supplemental jurisdiction, however, is discretionary, not a matter of right. See id., § 1367(c) (“The district courts may decline to exercise supplemental jurisdiction over a claim ... if (1) the claim 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”); Smith v. Lenches, 263 F.3d 972, 977 (9th Cir.2001) (“While 28 U.S.C. § 1367 grants federal courts supplemental jurisdiction, the United States Supreme Court has held that district courts may decline to exercise jurisdiction over supplemental state law claims in the interest of judicial economy, convenience, fairness and comity.... These rules make clear that the district court had discretion to decline to exercise jurisdiction on the state law claims”).

The “justification [for discretionary supplemental jurisdiction] lies in considerations of judicial economy, convenience and fairness to litigants.” United Mine Workers of America v. Gibbs, 383 U.S. 715, 726, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966). See also Carnegie–Mellon University v. Cohill, 484 U.S. 343, 350, 108 S.Ct. 614, 98 L.Ed.2d 720 (1988) (“the doctrine of pendent jurisdiction ... is a doctrine of flexibility, designed to allow courts to deal with cases involving pendent claims in the manner that most sensibly accommodates a range of concerns”). In 1990, Congress enacted 28 U.S.C. § 1367 to codify the standard governing supplemental jurisdiction in civil actions commenced after December 1, 1990. One circumstance in which § 1367(c)(3) permits the “district court[ ][to] decline to exercise supplemental jurisdiction over a [state-law] claim” is “if ... the district court has dismissed all claims over which it has original jurisdiction.”

In Gibbs, the Supreme Court noted two situations in which the factors of “judicial economy, convenience and fairness to litigants” will generally weigh...