Henok Araya v. JPMorgan Chase Bank, N.A. ( 2014 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 9, 2014 Decided December 30, 2014
No. 13-7036
HENOK ARAYA,
APPELLANT
v.
JPMORGAN CHASE BANK, N.A., ET AL.,
APPELLEES
Appeal from the United States District Court
for the District of Columbia
(No. 1:12-cv-00335)
Henok Araya, pro se, argued the cause and filed the
briefs for appellant.
Jason C. Hicks argued the cause for appellees. On the
brief were Bizhan Beiramee and Jeffrey L. Tarkenton.
Before: BROWN, MILLETT and WILKINS, Circuit Judges.
Opinion for the Court filed by Circuit Judge WILKINS.
2
WILKINS, Circuit Judge:
Henok Araya owned and operated a rental property in the
District of Columbia, which he leased to tenants. After
several years, the bank foreclosed on his mortgage and sold
the property to the highest bidder. Araya sued in D.C.
Superior Court challenging the foreclosure proceedings that
ultimately resulted in the sale of his property. After
defendants removed to federal court and moved for judgment
on the pleadings, the District Court rejected Araya’s
challenges. Because the D.C. statutory and common law
claims against the bank and its foreclosing agent should have
been decided by the local courts, we vacate the District
Court’s opinions and orders relating to claims against those
parties.
I.
In October 2005, Henok Araya 1 purchased property
located at 2630 Myrtle Avenue NE in Washington, D.C. The
purchase was financed by Chase Home Finance LLC
(“Chase”) 2 and the property was encumbered by a security
instrument consisting of a note and a deed of trust. Araya
purchased the property as an investment property in which
tenants would live, and a rider to that effect was attached to
the deed of trust. J.A. 240.
1
Mr. Araya transposed his first and last names in the case
caption of his Superior Court complaint, and most of the
earlier pleadings and court orders repeated that mistake.
2
Chase Home Finance LLC originated the loan. JPMorgan
Chase appeared before this Court as successor by merger.
3
On December 1, 2008, Araya sent Chase a letter
indicating that he had been unable to “communicate and solve
the issues” with several accounts. He asked that all
correspondence be directed to 1800 New Jersey Ave NW.
J.A. 69. The next day, Chase sent Araya an acceleration
warning at that address, alerting Araya that his loan on the
Myrtle Avenue property was in default. The letter told Araya
that he owed $5,814.28 and had 32 days to cure the default.
J.A. 71. Chase sent similar acceleration warnings on March
4, 2009; April 4, 2009; May 2, 2009; and June 2, 2009. J.A.
75-93.
On September 21, 2009, Araya sent Chase a letter
claiming that his mortgage payment was not behind and
“requesting a payment research.” He provided a phone
number that Chase should call with questions and again used
the New Jersey Avenue address. J.A. 95.
On November 18, 2009, Chase sent another acceleration
warning, this time to 908 New Hampshire Ave NW.
According to Araya, he mailed Chase a certified letter on
January 20, 2010, requesting the correct amount to bring his
account current. In that letter, he asked that Chase reply by
email and by mail to 908 New Hampshire Ave NW #400. He
sent identical letters on February 2, 2010, and March 17,
2010. Around February 18, 2010, Araya received a notice
from Shapiro & Burson, LLP, that his property was to be sold
at a foreclosure sale.
On March 24, 2010, the property was sold at public
auction. J.A. 104-05. The Federal Home Loan Mortgage
Corporation (“Freddie Mac”) purchased the home and sold it
in turn to Dorothy Ihuoma. Id.; J.A. 46.
4
On February 2, 2012, Araya filed a complaint in the
Superior Court of the District of Columbia against Chase and
Shapiro & Burson asserting numerous claims including
breach of contract, fraud, illegal foreclosure, breach of
fiduciary duty, forgery, misrepresentation, negligence,
statutory violations, and violation of the takings clause of the
Fifth Amendment. The gravamen of Araya’s complaint was
that Chase and Shapiro & Burson had not provided the proper
notice before foreclosure and had not given him a meaningful
opportunity to cure. Citing D.C. Sup. Ct. Civ. R. 19, 3 Araya
joined Ihuoma and Fannie Mae 4 as defendants on the theory
that they were persons with an “interest in the property.” J.A.
289-295.
On March 1, 2012, the defendants removed to the United
States District Court for the District of Columbia on the basis
of federal question jurisdiction. Notice of Removal p. 3
(March 1, 2012). On March 5, 2012, Ihuoma filed a motion
to dismiss, arguing that she was protected from suit as a bona
fide purchaser; the motion was granted over Araya’s
opposition on September 11, 2012. Order on Motion to
Dismiss p. 1 (Sept. 11, 2012). Araya did not designate the
order granting Ihuoma’s dismissal in his notice of appeal or in
any other way demonstrate intent to appeal that judgment of
dismissal, and therefore this order is final and not before us.
See Fed. R. App. P. 3(c)(1)(B); see also Brookens v. White,
795 F.2d 178, 180 (D.C. Cir. 1986) (“[Appellant’s] failure to
specify the [dismissal] order by name in his notice of appeal,
or otherwise to evidence his intent to pursue an appeal from
3
The Superior Court rule is identical for all intents and
purposes to Fed. R. Civ. P. 19.
4
Fannie Mae is the common moniker for the Federal National
Mortgage Association.
5
that order, renders the notice inapplicable to the earlier
order.”). Ihuoma appears before this Court solely to contest
Araya’s appeal of the District Court’s denial of the motions to
amend his complaint.
On March 7, 2012, Araya filed a document entitled
“Plaintiff’s opposition to removal of case.” Response to
Document (March 7, 2012). In this document, Araya argued
that his complaint raised no federal questions and was entirely
based on D.C. law. Id. at p. 2. He also asserted that the
parties were not diverse. Id. at p. 1.
On March 20, 2012, Chase and Fannie Mae filed a
memorandum in opposition to Araya’s document, which they
had construed as a remand motion. Response to Document p.
1 (March 20, 2012). Chase and Fannie Mae argued that
federal jurisdiction was appropriate because Araya raised
constitutional claims and because Fannie Mae’s “sue and be
sued” clause, 12 U.S.C. §1723a(a), created federal subject
matter jurisdiction under Pirelli Armstrong Tire Corp. Retiree
Med. Benefits Trust v. Raines, 534 F.3d 779 (D.C. Cir. 2008).
On May 11, 2012, the District Court denied Araya’s
remand motion on the grounds that “[t]he D.C. Circuit has
held that § 1723a(a) is a grant of subject matter jurisdiction.”
Order p. 2 (May 11, 2012).
On May 25, 2012, Chase and Fannie Mae filed a joint
motion for judgment on the pleadings. Motion for Judgment
on the Pleadings (May 25, 2012). Shapiro & Burson filed a
similar motion on June 19, 2012. Motion for Judgment on the
Pleadings (June 19, 2012). On July 5, 2012, Araya filed a
motion for partial summary judgment. Motion for Partial
Summary Judgment (July 5, 2012). Araya also filed two
motions for leave to file an amended complaint, the first on
6
July 26, 2012, and the second on October 24, 2012. Motion
for Leave to File (July 26, 2012); Motion for Leave to File
(Oct. 24, 2012). The proposed amended complaints
eliminated the Fifth Amendment takings claim and added two
new counts: a claim under the Real Estate Settlement
Procedures Act (RESPA), 12 U.S.C. § 2605, and a statutory
claim for wrongful foreclosure under D.C. Code § 42-815.
The only difference in the two proposed complaints is that the
second complaint replaces references to Fannie Mae with
references to Freddie Mac.
On February 13, 2013, the District Court issued an order
and opinion. Henok v. Chase Home Finance, LLC, 922 F.
Supp. 2d 110 (D.D.C. 2013). The District Court dismissed
Fannie Mae and denied leave to add Freddie Mac on the
grounds that “the second amended complaint fails to state a
claim for relief on any ground.” Id. at 124-25. Although
Fannie Mae’s presence in the suit was the perceived linchpin
of federal subject matter jurisdiction, the District Court did
not consider whether it should proceed to the other claims or
remand them to the Superior Court. The District Court
instead ruled against Araya on all of his state-law claims,
construing D.C. law to do so. Araya filed a timely appeal.
On appeal, Araya challenges (1) the District Court’s grant
of partial summary judgment to Chase, (2) the District Court’s
denial of his motions for leave to amend, and (3) the District
Court’s grant of judgment on the pleadings. After oral
argument, we asked the parties for supplemental briefing on
subject matter jurisdiction. We do not address the merits of
Araya’s challenges because we conclude that the predicate for
supplemental jurisdiction evaporated once Fannie Mae was
dismissed and the District Court denied leave to amend to add
any new federal claims.
7
II.
Ordinarily, the plaintiff is entitled to select the forum in
which he wishes to proceed. See, e.g., Sinochem Int’l Co. v.
Malaysia Int’l Shipping Corp., 549 U.S. 422, 436 (2007)
(referencing “the consideration ordinarily accorded the
plaintiff’s choice of forum”); Holmes Group, Inc. v. Vornado
Air Circulation Systems, Inc., 535 U.S. 826, 831-32 (2002)
(discussing extent to which plaintiff is master of the
complaint). Congress has provided, however, that “any civil
action brought in a State court of which the district courts of
the United States have original jurisdiction” may be removed
by the defendants to the federal courts. 28 U.S.C. § 1441(a)
(2012). The removal notice must contain “a short and plain
statement of the grounds for removal,” id. § 1446(a).
Even if a claim raising a federal question is properly
removed from state court to federal court, the district court
has an obligation to employ its discretion to determine
whether to exercise supplemental jurisdiction over the
ancillary state-law claims. City of Chicago v. Int’l Coll. of
Surgeons, 522 U.S. 156, 167, 172-73 (1997). In doing so, the
district court should consider “a host of factors, . . . including
the circumstances of the particular case, the nature of the state
law claims, the character of the governing state law, and the
relationship between the state and federal claims.” Id. at 173.
In addition, “[i]f the federal question is eliminated relatively
soon after removal, it is ordinarily preferable to remand the
case rather than dismiss the case.” 16-107 Moore’s Federal
Practice - Civil § 107.41; see also 28 U.S.C. § 1447(c) (“If at
any time before final judgment it appears that the district
court lacks subject matter jurisdiction, the case shall be
remanded.”).
8
In the removal notice, the defendants asserted two bases
for federal court jurisdiction. First, defendants argued that
Araya’s Fifth Amendment claims against Chase and Shapiro
& Burson were sufficient to create federal jurisdiction under
28 U.S.C. § 1331, which gives the federal district courts
“original jurisdiction of all civil actions arising under the
Constitution, laws, or treaties of the United States.” Second,
defendants argued that 12 U.S.C. § 1723a(a), which
authorizes Fannie Mae “to sue and to be sued” in federal
courts, creates federal jurisdiction because Fannie Mae was a
named party.
We consider each asserted basis of subject matter
jurisdiction in turn.
A.
As a general matter, “the absence of a valid (as opposed
to arguable) cause of action does not implicate subject-matter
jurisdiction.” Steel Co. v. Citizens for a Better Env't, 523 U.S.
83, 89 (1998). It has long been recognized, however, that “a
suit may sometimes be dismissed for want of jurisdiction
where the alleged claim under the Constitution or federal
statutes clearly appears to be immaterial . . . or where such a
claim is wholly insubstantial and frivolous.” Bell v. Hood,
327 U.S. 678, 682-83 (1946).
Araya’s Fifth Amendment claim against Chase and
Shapiro & Burson is insufficient to sustain jurisdiction
because it has been foreclosed by the Supreme Court. See
Steel Co., 523 U.S. at 89. It is beyond dispute that the Fifth
Amendment “appl[ies] to and restrict[s] only the Federal
Government and not private persons.” Pub. Utils. Comm’n of
D.C. v. Pollak, 343 U.S. 451, 461 (1952); see also San
Francisco Arts & Athletics, Inc. v. U.S. Olympic Committee,
9
483 U.S. 522, 542 (1987) (“The fundamental inquiry is
whether the USOC is a governmental actor to whom the
prohibitions of [the Fifth Amendment] apply.”); Corrigan v.
Buckley, 271 U.S. 323, 330 (1926) (“The Fifth Amendment is
a limitation only upon the powers of the General Government
and is not directed against the action of individuals.”)
(citations omitted) (internal quotation marks omitted); Barron
v. Baltimore, 32 U.S. 243, 250-51 (1833) (“[T]he fifth
amendment to the constitution . . . is intended solely as a
limitation on the exercise of power by the government of the
United States.”). There is no plausible argument that either
Chase or Shapiro & Burson is a governmental actor, and
indeed Araya’s complaint does not even allege that either
defendant is a governmental actor. The Fifth Amendment
claim is thus an insufficient basis for federal subject matter
jurisdiction. Understandably, the District Court did not rely
upon the takings claim as a basis for jurisdiction when it
denied Araya’s request to remand, and it later granted the
motion to dismiss that claim.
B.
The argument regarding Fannie Mae presents a more
complicated question.
At the time of removal, Fannie Mae was named in the
Superior Court complaint as a party that “upon information
and belief . . . ha[d] an interest in the property,” and it is
settled law in this Circuit that 12 U.S.C. § 1723a(a) ordinarily
creates federal jurisdiction “in Fannie Mae cases.” Pirelli,
534 F.3d at 785. 5 Thus, it was reasonable for the District
5
The Supreme Court has addressed a similar statute, holding
that the Red Cross’s “‘sue and be sued’ provision confers
original jurisdiction on federal courts over all cases to which
10
Court to deny Araya’s motion to remand, because Fannie Mae
was named and had been served as a defendant in the case,
and supplemental jurisdiction over the ancillary state claims
(with their attendant party defendants) would appear
appropriate insofar as those claims involved the same
property and were related to any claim involving Fannie Mae.
See LaShawn A. v. Barry, 87 F.3d 1389, 1396 (D.C. Cir.
1996) (en banc) (“Whether a court may decide pendent claims
is determined on the face of the pleadings.”).
However, after the denial of the motion to remand,
counsel jointly representing Fannie Mae and Chase moved to
dismiss the claim against Fannie Mae, informing the District
Court for the first time that there was no basis for Fannie
Mae’s inclusion in this controversy. The documents attached
to Araya’s Superior Court complaint make it clear that the
property was purchased at the foreclosure auction by the
Federal Home Loan Mortgage Corporation – Freddie Mac.
J.A. 15-35. Araya apparently mistook Freddie Mac for
Fannie Mae. The presence of Fannie Mae in this suit is
therefore entirely illusory. (It is not lost on us that Fannie
Mae waited until after it had defeated plaintiff’s choice of
forum to inform the District Court of this rather salient fact.)
Neither our decision in Pirelli nor the Supreme Court’s
decision in Red Cross contemplates a situation such as this, in
which a federally chartered corporation without any
connection whatsoever to the dispute is named as a party by
mistake. This case does not require us to resolve the troubling
question of whether Pirelli and Red Cross permit automatic
the Red Cross is a party, with the consequence that the
organization is thereby authorized to remove from state to
federal court any state-law action it is defending.” American
Nat’l Red Cross v. S.G., 505 U.S. 247, 248 (1992).
11
federal jurisdiction any time Fannie Mae is mentioned in a
party’s pleadings, however, and we decline to do so. On the
particular facts presented in this appeal – in which a pro se
D.C. resident accidentally named the wrong federally
chartered corporation as a potentially interested party in his
suit against defendants residing outside the District of
Columbia and then sought to correct that mistake by naming
the correct federally chartered corporation – we are satisfied
that the District Court had original jurisdiction. See Steel Co.,
523 U.S. at 89. 6
C.
The District Court dismissed Fannie Mae from the
lawsuit, Henok, 922 F. Supp. 2d at 117-24, and this dismissal
was summarily affirmed by a panel of this Court. Henok v.
JPMorgan Chase Bank, N.A., No. 13-7036, 2013 WL
4711675 (D.C. Cir. Aug. 2, 2013) (per curiam). Even though
the basis of federal question jurisdiction had vanished with
Fannie Mae’s dismissal, 7 the District Court went on to rule on
6
Judge Millett would hold that because minimal diversity
exists between these parties (Araya, the plaintiff, is a citizen
of D.C., whereas at least one of the defendants, JPMorgan
Chase, is not), the exercise of Article III jurisdiction in this
instance to dismiss Ihuoma and Fannie Mae from the case was
permissible. See State Farm Fire & Cas. Co. v. Tashire, 386
U.S. 523, 531 (1967) (“Article III poses no obstacle to the
legislative extension of federal jurisdiction, founded on
diversity, so long as any two adverse parties are not co-
citizens.”).
7
The District Court also denied Araya’s motion to amend his
complaint to add Freddie Mac as a defendant or to add a claim
asserting a RESPA violation, finding that either addition
12
the merits of Araya’s state-law claims against Chase and
Shapiro & Burson. The question thus becomes whether that
exercise of supplemental jurisdiction was proper.
III.
The jurisdictional grant in the supplemental jurisdiction
statute potentially confers 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 under Article III of the United States
Constitution.” 28 U.S.C. § 1367(a). However, the statute
also provides that “[t]he 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.” Id. §
1367(c). This case implicates § 1367(c)(3) because the
District Court was called upon to decide the validity of
several state and common law claims despite the dismissal of
all claims giving it federal question jurisdiction.
Prior to the enactment of the supplemental jurisdiction
statute, the law in this Circuit was that “[i]f a district court has
power to adjudicate a pendent claim, the court must then
engage in a second inquiry to determine whether to exercise
its discretion to decide the local claim.” Dimond v. District of
Columbia, 792 F.2d 179, 188 (D.C. Cir. 1986). On several
occasions, we found an abuse of discretion when the district
would be futile. Henok, 922 F. Supp. 2d at 123-24. We agree
with this conclusion.
13
court failed to remand the case to the D.C. courts when it was
not appropriate to retain jurisdiction. See, e.g., Financial
General Bankshares, Inc. v. Metzger, 680 F.2d 768, 777 (D.C.
Cir. 1982) (“When a District Court reaches out to decide
unsettled issues of state law despite the pretrial dismissal of
all federal claims, its action may be an abuse of discretion.”);
REA Exp., Inc. v. Travelers Ins. Co., 554 F.2d 1200, 1201
(D.C. Cir. 1977) (per curiam) (altering district court judgment
so as to allow plaintiffs to file in state court). Moreover, not
engaging in the analysis of whether to remand could itself
potentially be an abuse of discretion. See Dimond, 792 F.2d
at 188. We have continued to apply this two-part test even
after the enactment of the supplemental jurisdiction statute.
See Women Prisoners of D.C. Dep’t of Corrections v. District
of Columbia, 93 F.3d 910, 921-22 (D.C. Cir. 1996) (noting
that § 1367(c) does not disturb the Gibbs framework); see
also H.R. REP. NO. 101-734 (1990), at 29 (“As under current
law, subsection (c) requires the district court, in exercising its
discretion, to undertake a case-specific analysis.”).
In keeping with the principle that “[n]eedless decisions of
state law should be avoided both as a matter of comity and to
promote justice between the parties,” United Mineworkers of
America v. Gibbs, 383 U.S. 715, 726 (1966), we have
explained that “[i]n the usual case in which all federal-law
claims are dismissed before trial, the balance of factors to be
considered under the pendent jurisdiction doctrine . . . will
point toward declining to exercise jurisdiction over the
remaining state-law claims.” Shekoyan v. Sibley Intern., 409
F.3d 414, 424 (D.C. Cir. 2005) (quoting Carnegie-Mellon
Univ. v. Cohill, 484 U.S. 343, 350 n.7 (1988)) (holding that
the district court properly exercised its discretion to remand
state-law claims after dismissing federal claims). Thus, we
have repeatedly held that a district court abuses its discretion
when it maintains jurisdiction over a removed case presenting
14
unsettled issues of state law after the federal claims have been
dismissed.
For example, in Edmondson & Gallagher v. Alban
Towers Tenants Association, this Court considered a case in
which plaintiffs had filed a suit in D.C. Superior Court
alleging a number of state and common law claims in addition
to a federal RICO claim. 48 F.3d 1260, 1262 (D.C. Cir.
1995). Defendants removed to district court and filed
summary judgment motions. Id. at 1263. “After the district
court dismissed the federal claims, however, it abused its
discretion by reaching the merits of the local-law claims.” Id.
In evaluating the district court’s exercise of its discretion, this
Court determined that the dismissal of the federal claim,
combined with the unsettled nature of the law regarding the
state and common law claims, compelled the district court to
remand to D.C. Superior Court. Id. at 1266-67; see also
Women Prisoners, 93 F.3d at 923 (“[W]e hold that the district
court abused its discretion in exercising jurisdiction over these
local claims in violation of the supplemental jurisdiction
statute and the well-established principles it has codified.”);
Financial General, 680 F.2d at 778 (holding that district court
“abused its discretion by failing to take into account the
uncertainty of state law and by proceeding to trial on the local
claims after the dismissal of the federal claims”).
Guided by this precedent, we are constrained to hold that
the District Court abused its discretion. Unfortunately, the
District Court did not explain in its opinion whether or how it
applied its discretion to exercise supplemental jurisdiction
over the state-law claims in this case. See Dimond, 792 F.2d
at 188. As in Edmondson, “if the district court considered the
relevant factors at all, it left no written trace of the process;
after dismissing the [federal] claims, the court plunged into
the common law ones with no apparent pause for breath.” 48
15
F.3d at 1266. In Edmondson, we concluded there was no
reason to remand the case to the district court to exercise its
discretion whether to remand in the first instance, because the
circumstances compelled only one conclusion. Id. at 1266-
67. We noted that the complaint raised novel issues of state
law, which was another reason to decline supplemental
jurisdiction in addition to the dismissal of all of the federal
claims. Id. (citing 28 U.S.C. § 1367(c)(1)). Similar issues
permeate this case:
(1) Araya’s complaint alleges numerous vaguely worded
claims and allegations, which the District Court construed
with the liberality ordinarily afforded to pro se litigants.
Although we acknowledge the District Court’s considerable
efforts in finding a substantial number of arguable local
statutory and common law claims in Araya’s pleadings, the
result in this case was a 34-page opinion, less than a page of
which involved federal claims. To the extent that Araya’s
complaint articulates any plausible state-law claims, the D.C.
Superior Court is eminently more qualified than a federal
court to navigate the as-yet-unsettled contours of the statutory
and common law claims potentially presented. And even
were none of the individual state law issues complex, the
process of discerning, interpreting, and deciding a half-dozen
state-law claims could be described as undertaking to resolve
a “complex issue of State law.” 28 U.S.C. § 1367(c)(1).
(2) Araya’s complaint, as interpreted by the District
Court, raises issues that have not been directly confronted by
D.C. courts, such as whether D.C. Code § 47-1431(a) (2001)
conferred a private right of action, see Henok, 922 F. Supp. 2d
at 124, as well as issues that have been resolved in conflicting
ways by D.C. and federal courts, such as whether negligent
misrepresentation requires a pre-existing confidential
relationship, compare Sherman v. Adoption Center of
16
Washington, Inc., 741 A.2d 1031, 1037 (D.C. 1999)
(“Negligent misrepresentation requires that the defendants
made statements that they knew or should have known were
false, and that they knew or should have known would induce
reliance on the part of Sherman, and that did induce such
reliance.”) and Kumar v. D.C. Water & Sewer Auth., 25 A.3d
9, 15 n.9 (D.C. 2011) (“To prove negligent misrepresentation,
a plaintiff must show ‘(1) that [the defendant] made a false
statement or omitted a fact that he had a duty to disclose; (2)
that it involved a material issue; and (3) that [the plaintiff]
reasonably relied upon the false statement or omission to his
detriment . . . .’”) (quoting Redmond v. State Farm Ins.
Co., 728 A.2d 1202, 1207 (D.C. 1999)) with Choharis v. State
Farm Fire and Cas. Co., 961 A.2d 1080, 1089 (D.C. 2008)
(“[C]onduct occurring during the course of a contract dispute
may be the subject of a fraudulent or negligent
misrepresentation claim when there are facts separable from
the terms of the contract upon which the tort may
independently rest and when there is a duty independent of
that arising out of the contract itself.”).
As we concluded in Edmondson, “D.C. courts are better
equipped to resolve the unsettled legal questions in this case.”
48 F.3d at 1266. The District Court therefore had no choice
but to remand. Id.; see also, e.g., Carver v. Nassau Cnty.
Interim Fin. Auth., 730 F.3d 150, 154-55 (2d Cir. 2013)
(abuse of discretion to retain supplemental jurisdiction over
claim raising unresolved issue of state law); Creighton v. City
of Livingston, 628 F. Supp. 2d 1199, 1218-19 (E.D. Cal.
2009) (declining to exercise supplemental jurisdiction over
state-law claim where California courts had not yet decided
whether private right of action existed).
This case is functionally indistinguishable from
Edmondson. Here, as there, the District Court dismissed all
17
claims over which it had original jurisdiction; here, as there,
“[t]here has been no trial of the common law claims,”
Edmondson, 48 F.3d at 1266; here, as there, the local claims
involve novel and complex issues, id.; here, as there, “there
seems little difference in convenience for the parties whether
they litigate in D.C. or federal court,” id. at 1267; and here, as
there, the District Court had an obligation to exercise its
discretion to remand the case to the District of Columbia
courts once the federal question, like Elvis, had left the
building.
IV.
For the foregoing reasons, we affirm the District Court’s
order denying leave to amend Araya’s complaint to add
additional federal claims, vacate the District Court’s orders
relating to the state-law claims against Chase and Shapiro &
Burson, and remand to the District Court with instructions to
remand to Superior Court for determination of Araya’s state-
law claims against those parties.
So ordered.