Prawoto v. Primelending A Tex. Corp.

• Decision Date: 04 May 2010
• Docket Number: Case No. CV 09-06631 MMM (SSx).
• Parties: Juniaty PRAWOTO, an individual, Plaintiff, v. PRIMELENDING a Texas corporation; and Does 1-10, inclusive, Defendants.
• Court: U.S. District Court — Central District of California

720 F.Supp.2d 1149

Juniaty PRAWOTO, an individual, Plaintiff,

v.PRIMELENDING a Texas corporation; and Does 1-10, inclusive, Defendants.

Case No. CV 09-06631 MMM (SSx).

United States District Court,C.D. California.

May 4, 2010.

Timothy Douglas Thurman, Trinity Law Associates Inc., Los Angeles, CA, for Plaintiff.

Allen L. Michel, Arthur I. Willner, Rachel M. Stilwell, Gladstone Michel Weisberg Willner & Sloane, ALC, Marina Del Rey, CA, for Defendants.

ORDER GRANTING DEFENDANT'S MOTION TO TRANSFER; DENYING MOTION TO DISMISS

MARGARET M. MORROW, District Judge.

On July 31, 2009, plaintiff Juniaty Prawoto commenced this action in Los Angeles Superior Court against defendant PrimeLending, a Plains Capital Company (“PrimeLending”), and certain fictitious defendants, alleging, inter alia, multiple state and federal violations in connection with a mortgage loan PrimeLending made to Prawoto in connection with an investment property located in Oak Point, Texas. ¹ On September 11, 2009, PrimeLending timely removed the action to federal court. ² Five days after removal, PrimeLending moved to dismiss the case for lack of subject matter jurisdiction or improper venue. In the alternative, PrimeLending sought to have the court transfer venue to the Eastern District of Texas. ³ Prawoto has not opposed PrimeLending's motion, despite the fact that on October 14, 2009, defense counsel wrote plaintiff's attorney, noting that no opposition had been filed and asking that plaintiff's counsel advise the court if his client did not oppose the motion. ⁴

The court delayed its decision of the motion because, on November 3, 2009, plaintiff's lawyer, Timothy Thurman, was suspended by the State Bar of California. Because plaintiffs' counsel had filed no pleadings and made no appearance subsequent to removal of the action to federal court, the court was concerned that plaintiff was unaware of the status of the action. In January 2010, the court obtained a mailing address for plaintiff and sent a notice regarding the case to that address. The notice asked that plaintiff advise the court by February 8, 2010 if she had received notice. To date, the court has received no response from plaintiff.

I. THE LOCAL ACTION DOCTRINE

A. Whether Plaintiff's Action Is Properly Filed in the Central District of California

A party wishing to challenge venue may file a motion under Rule 12(b)(3) of the Federal Rules of Civil Procedure and 28 U.S.C. § 1406, which provides that a district court shall dismiss or transfer a case if venue is improper. Venue in federal courts is governed entirely by statute. See Leroy v. Great Western United Corp., 443 U.S. 173, 181, 99 S.Ct. 2710, 61 L.Ed.2d 464 (1979). If the court finds that the case has been filed “in the wrong division or district,” it must “dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought.” 28 U.S.C. § 1406(a).

On a motion to dismiss for improper venue, “the pleadings need not be accepted as true, and the court may consider facts outside of the pleadings.” Murphy v. Schneider National, Inc., 349 F.3d 1224, 1229 (9th Cir.2003) (citation omitted). Plaintiff bears the burden of showing that venue is proper in this district. See Piedmont Label Co. v. Sun Garden Packing Co., 598 F.2d 491, 496 (9th Cir.1979) (“Plaintiff had the burden of showing that venue was properly laid in the Northern District of California”).

Section 1406, however, applies only to “transitory” actions, however; different rules apply to “local” actions. 14D Charles D. Wright, Arthur R. Miller, & Edward H. Cooper, Federal Practice and Procedure, § 3822 (2009). Consequently, plaintiff bears the burden of demonstrating either that the action is not local in nature, or that it is local and filed in the correct venue. “The local action doctrine is a relic of English common law imported into this country by” Chief Justice Marshall while sitting as a circuit judge in Livingston v. Jefferson, 15 Fed.Cas. 660 (C.C.D.Va.1811) (No. 8,411). It is not frequently invoked by the courts. Bigio v. Coca-Cola Co., 239 F.3d 440, 450 (2d Cir.2000). Livingston concerned private land seized by the federal government. President Thomas Jefferson believed that land on the Mississippi River in New Orleans belonged to the federal government; in fact, Edward Livingston held title to the land. After Jefferson's presidency ended, Livingston sued Jefferson for trespass in federal court in Virginia where Jefferson resided. Livingston, 15 Fed.Cas. at 663.

Chief Justice Marshall reviewed the history of distinguishing between local and transitory actions. He noted that “originally all actions were local” in that they had to be tried before a jury within the same geographic subdivision, such as a county, where the facts giving rise to the claim had taken place. Chief Justice Marshall related, however, that over time, the courts of England had exercised their power to direct a jury to every part of the kingdom, and that, as a result, English courts had created the legal fiction that the only relevant geographic subdivision was England itself. Employing this fiction, they held that so long as the transaction giving rise to the action took place within the realm, it could be heard by any court in the country. Chief Justice Marshall noted that this legal fiction was used for “all personal torts, and ... all contracts wherever executed,” but that it had not been applied to causes of action regarding land where “investigation of title [might] become necessary” or a “question of boundary [might] arise, and a survey [might] be essential to the full merits of the cause.” Id. at 663-64.

Chief Justice Marshall thus endorsed the concept of local action venue even though the Judiciary Act of 1789 included no provision implementing it. To this day, in fact, there is no federal law of general application fixing the venue of local actions. “Thus, this concept imported from the common law now is established firmly in our jurisprudence and the [ Livingston ] case makes it as clear as anything can be that this distinction exists and that local actions can be brought only where the property involved in the action is located.” 14D Wright, Miller, & Cooper, § 3822. ⁵ “The local action rule is so fundamental that state courts are not obligated to give full faith and credit to judgments from either federal or state courts sitting outside the local state's territorial boundaries.” Hayes v. Gulf Oil Corp., 821 F.2d 285, 287 (5th Cir.1987). The Supreme Court has held, moreover, not only that the local action doctrine applies where no other venue provision exists, but that it supersedes statutory venue provisions unless Congress expresses in clearest terms its intent that the statutes will take precedence.

In Casey v. Adams, 102 U.S. 66, 26 L.Ed. 52 (1880), for example, the Court held that even a special venue statute that sharply restricted the choice of venue in suits against national banks did not apply to a local action, and that an action within the scope of the statute could be brought only where the property was located:

“The distinction between local and transitory actions is as old as actions themselves, and no one has ever supposed that laws which prescribed generally where one should be sued, included such suits as were local in their character, either by statute or the common law, unless it was expressly so declared. Local actions are in the nature of suits in rem, and are to be prosecuted where the thing on which they are founded is situated. To give the act of Congress the construction now contended for would be in effect to declare that a national bank could not be sued at all in a local action where the thing about which the suit was brought was not in the judicial district of the United States within which the bank was located. Such a result could never have been contemplated by Congress.” Id. 67-68.

See also Mason v. United States, 260 U.S. 545, 558, 43 S.Ct. 200, 67 L.Ed. 396 (1923) (“Here, while the suit is one in equity, the statute and decisions relied upon have nothing to do with the general principles of equity or with federal equity jurisdiction, but simply establish a measure of damages applicable alike to actions at law and suits in equity. The case presented by the bills is primarily one involving title to land and seeking an injunction against continuing trespasses. The conversion of the oil, for which damages are sought, is incidental and dependent. The entire cause of action is therefore local”); Collett v. Adams, 249 U.S. 545, 550, 39 S.Ct. 372, 63 L.Ed. 764 (1919) (holding that the venue provisions of the Bankruptcy Act were superseded by the local action doctrine); Ellenwood v. Marietta Chair Co., 158 U.S. 105, 107, 15 S.Ct. 771, 39 L.Ed. 913 (1895) (“By the law of England, and of those states of the Union whose jurisprudence is based upon the common law, an action for trespass upon land, like an action to recover the title or the possession of the land itself, is a local action, and can only be brought within the state in which the land lies”).

In 1914, the Ninth Circuit considered a case concerning a nuisance on Sand Island, which sits at the mouth of the Columbia River between Washington and Oregon. Columbia River Packers' Association v. McGowan, 219 F. 365 (9th Cir.1914). Although originally thought to be in Washington, while the case was pending before the federal district court in that state, the Supreme Court decided in a separate action that Sand Island was in fact part of Oregon. Thereafter, plaintiff filed a motion to dismiss the action for lack of subject matter jurisdiction, which the district court denied. On appeal, the Ninth Circuit reversed. Id. at 377 (“On the other hand, where the suit is strictly local, the subject-matter is specific property, and the relief when granted is such that it must act directly upon the subject-matter, and not upon the...