Jordan v. Nationstar Mortgage, LLC ( 2020 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 JESSICA H. JORDAN, No. 2:18-cv-02717-KJM-AC 12 Plaintiff, 13 v. ORDER 14 BANK OF AMERICA, et al., 15 Defendants. 16 17 This case, arising out of defendants’ attempted foreclosure of plaintiff’s property, 18 was filed in state court and removed to federal court on the basis of diversity jurisdiction. 19 Defendant Nationstar, now the only remaining defendant, moves to confirm that the temporary 20 restraining order entered by the state court prior to removal is no longer in effect. The court 21 GRANTS the motion, as explained below. 22 I. PROCEDURAL BACKGROUND 23 According to the parties’ representations and state court records provided in 24 defendant Nationstar’s Notice of Removal, ECF No. 1, the state court entered its temporary 25 restraining order after the following events: 26 On September 5 or 6, 2018, plaintiff filed an ex parte application for a temporary 27 restraining order and issuance of an order to show cause regarding a preliminary injunction to halt 28 1 the foreclosure sale of her home. Mot., ECF No. 20, at 10 (citing Not. of Removal (“Not.”), ECF 2 No. 1, at 36–45 (ex parte application noticed for hearing September 6, 2018)). On September 6, 3 2018, plaintiff served Nationstar with a copy of the complaint. Id.; Not., Ex. 1, ECF No. 1-1 at 3. 4 The Superior Court for the County of Sacramento granted plaintiff’s request for a temporary 5 restraining order that same day, September 6, 2018. Temporary Restraining Order (“TRO”), ECF 6 No. 1-1, at 55–57. The parties dispute whether Nationstar had notice of plaintiff’s request and an 7 opportunity to oppose it. See Mot. at 10–11 (“Nationstar did not have an opportunity to appear and 8 oppose the TRO”); Opp’n at 2 (“[T]he court’s order also stated that Nationstar was indeed provided 9 with notice of Plaintiff’s ex parte application for the temporary restraining order.”); TRO at 56 10 (“THE COURT FINDS Defendants were informed of the date, time and place of [sic] the Ex Parte 11 Application for Temporary Restraining Order . . . would be heard.”). Regardless, the state court’s 12 order granted a “temporary” injunction, which, by its terms, would remain in effect only until the 13 court held a hearing and determined whether to issue a preliminary injunction for the pendency of 14 the case. TRO at 56 (“THE COURT ORDERS UNTIL THE HEARING ON THE ORDER TO 15 SHOW CAUSE as set forth above or as may be continued by order of this court, Defendants . . . 16 are enjoined and prohibited from conducting a trustee’s sale of the real property located at 9711 17 Mindy Lane, Wilton, CA 95693.”). 18 The state court set a September 28, 2018 hearing on the preliminary injunction, 19 which was later extended to November 28, 2018. See TRO at 56 (ordering defendants to appear 20 on September 28, 2018 “to give any legal reason why an injunction prohibiting the Trustee’s Sale 21 . . . should not be granted during the pendency of this action”); Not. at 64 (Order Granting Joint 22 Stipulation to Continue Hearing to September 28, 2018). Nationstar removed the action to federal 23 court on October 9, 2018, before the hearing could occur. Not. at 6. Once removed, neither party 24 requested a hearing on whether a preliminary injunction should issue, nor moved for another 25 temporary restraining order or a preliminary injunction. 26 Defendant Nationstar now asks the court to confirm that no temporary restraining 27 order is in place or, in the alternative, to dissolve any temporary restraining order enjoining the sale 28 of the property at 9711 Mindy Lane in Wilton, California. Mot. at 11. Plaintiff opposes, ECF No. 1 22, and Nationstar has replied, ECF No. 27. The court submitted the matter without oral argument, 2 ECF No. 25, and resolves it here. 3 II. DISCUSSION 4 Nationstar argues the TRO issued by the state court in this action dissolved 5 automatically under Federal Rule of Civil Procedure 65(b). Rule 65(b) governs the procedure of 6 temporary restraining orders once a case is in federal court. Granny Goose Foods, Inc. v. Bhd. of 7 Teamsters & Auto Truck Drivers Local No. 70 of Alameda Cty., 415 U.S. 423, 441 (1974). It 8 states, in relevant part: 9 (b) Temporary Restraining Order. 10 . . . . (2) Contents; Expiration. Every temporary restraining order issued 11 without notice must state the date and hour it was issued . . . . The order expires at the time after entry—not to exceed 14 days—that the 12 court sets, unless before that time the court, for good cause, extends it for a like period or the adverse party consents to a longer extension. 13 The reasons for an extension must be entered in the record. 14 Fed. R. Civ. P. 65. 15 In Granny Goose Foods, the Supreme Court considered the effect of Rule 65’s 16 time limit on an ex parte TRO issued in state court before removal. The Court held: 17 An ex parte temporary restraining order issued by a state court prior to removal remains in force after removal no longer than it would 18 have remained in effect under state law, but in no event does the order remain in force longer than the time limitations imposed by Rule 19 65(b), measured from the date of removal. 20 Id. at 439–40. Specifically, the Court held that an ex parte TRO entered in state court dissolves 21 automatically after the 14-day time limit1 passes without a hearing on the preliminary injunction, 22 calculated from the date of removal. Id. at 440. 23 It is unclear whether the state court issued the TRO at issue here “without notice,” 24 such that Granny Goose would be directly applicable. However, the Court in Granny Goose did 25 not conduct any inquiry as to whether notice was actually effectuated, simply referring to the 26 TRO at issue there as “ex parte.” See id. at 427, 440. Here, plaintiff’s application for a 27 1 At the time Granny Goose was decided, Rule 65(b) imposed a 10-day, rather than 14- 28 day time limit. See Rule 26 advisory committee note, 2009 amendment. 1 temporary restraining order states that the application is being made “ex parte” and plaintiff’s 2 counsel’s accompanying declaration states there was “insufficient time” to bring a “noticed 3 motion for injunctive relief.” TRO Application, ECF No. 1-1, at 40. However, counsel’s 4 declaration also states that he provided “telephonic notice of the ex parte application for a 5 temporary restraining order” to Nationstar on September 5, 2018 by calling the company’s 6 customer service contact number on its website. Smart Decl. ¶ 3, ECF No. 1-1 at 46–48. The 7 Nationstar employee with whom counsel spoke “asked that [counsel] send any ex parte 8 documents to NATIONSTAR’s legal department[,]” which counsel claims to have done. Id. ¶¶ 3, 9 5. Furthermore, as noted above, in the TRO itself the state court found that “Defendants were 10 informed of the date, time and place of [sic] the Ex Parte Application for Temporary Restraining 11 Order . . . would be heard.” TRO at 56. 12 It is unnecessary for the court to determine whether defendants received notice and 13 an opportunity to be heard, because, regardless, no preliminary injunction hearing was ever held 14 nor did any court issue a preliminary injunction with the requisite findings to supersede the TRO 15 as contemplated by the Federal Rules. In Granny Goose, the Court analyzed whether the district 16 court’s denial of defendant’s motion to dissolve the TRO effectively converted the ex parte TRO 17 into a preliminary injunction of unlimited duration. In finding that it did not, the Court explained: 18 The fact that notice is given and a hearing held cannot serve to extend indefinitely beyond the period limited by [Rule 65(b)] the time 19 during which a temporary restraining order remains effective. The [Rule] contemplates that notice and hearing shall result in an 20 appropriate adjudication, i.e., the issuance or denial of a preliminary injunction, not in extension of the temporary stay. 21 22 415 U.S. at 434–44 (alterations in original) (quoting Pan American World Airways, Inc. v. Flight 23 Engineers’ Int’l Ass’n, 306 F.2d 840, 842 (1962)). The Court concluded the TRO at issue expired 24 automatically after 10 days, the duration set by the Rules at the time, despite defendant’s 25 eventually receiving notice and an opportunity to be heard on the merits. Id. at 442–443. The 26 Court noted this construction of Rule 65(b) is necessary to prevent a system whereby “parties 27 against whom an injunction is directed are left to guess about its intended duration.” Id. at 444. 28 Rather, “[w]here a court intends to supplant such an order with a preliminary injunction of 1 unlimited duration pending a final decision on the merits or further order of the court,” the Court 2 concluded, “it should issue an order clearly saying so. And where it has not done so, a party 3 against whom a temporary restraining order has issued may reasonably assume that the order has 4 expired within the time limits imposed by Rule 65(b).” Id. at 445. 5 Here, neither this court nor the state court, which was still presiding over the case 6 fourteen days after it granted the TRO, “issue[d] an order clearly saying” it intended to “supplant 7 [the TRO] with a preliminary injunction of unlimited duration” pending resolution of this case. 8 Accordingly, the court finds that, even assuming defendants received notice and an opportunity to 9 be heard on plaintiff’s ex parte application for a temporary restraining order, the state court’s TRO 10 has dissolved automatically since the case was removed. 11 The court need not decide precisely when the TRO dissolved. Several courts, while 12 recognizing a TRO cannot be of unlimited duration, have imposed a time limit of double the limit 13 in Rule 65, based on Rule 65(b)’s language that a TRO can be extended “for good cause” for an 14 additional period once the initial time limit has expired. See Chicago United Indus., Ltd. v. City of 15 Chicago, 445 F.3d 940, 946 (7th Cir. 2006) (“The proper interpretation of the ‘without notice’ 16 language in Rule 65(b) is that the rule imposes additional restrictions on temporary restraining 17 orders issued without notice, but imposes the 20-day limitation on all TROs.”) (emphases in 18 original); see also H-D Michigan, LLC v. Hellenic Duty Free Shops S.A., 694 F.3d 827, 844 (7th 19 Cir. 2012) (“In our view, the language of Rule 65(b)(2) and the great weight of authority support 20 the view that 28 days is the outer limit for a TRO without the consent of the enjoined party, 21 regardless of whether the TRO was issued with or without notice.”); but see, e.g., W. Watersheds 22 Project, 391 F. Supp. 3d 1002, 1007 n.5 (D. Or. 2019) (finding that “[w]hen a TRO is 23 issued with notice and after a hearing [] the 14-day limit for such orders issued without notice does 24 not apply . . . . [n]evertheless absent consent of the parties, [a] court may not extend a ‘TRO’ 25 indefinitely, even upon notice and a hearing” and “should schedule a preliminary injunction hearing 26 to occur not later than 28 days after the date that the court first issues a TRO”) (internal quotation 27 marks and citation omitted). Over a year has passed since this case was removed on October 9, 28 1 2018. Accordingly, the court finds the TRO issued by the state court before the case was removed 2 has since dissolved. 3 This finding does not leave plaintiff without recourse to prevent the sale of her 4 property pending the resolution of this suit. Plaintiff is still free to move for a preliminary 5 injunction, if she is able to do so while complying fully with Federal Rule of Civil Procedure 11. 6 The court will address the merits of such a motion, which the parties discuss at length in their papers 7 here, if and when such a motion is filed. 8 III. CONCLUSION 9 Defendant Nationstar’s motion to confirm that no TRO is in place is GRANTED. 10 The court need not address Nationstar’s motion in the alternative to dissolve the TRO. Because 11 the court has not addressed Nationstar’s arguments regarding its motion to dissolve the TRO, the 12 court DENIES its related request for judicial notice and its evidentiary objections as moot. 13 This order resolves ECF No. 20. 14 IT IS SO ORDERED. 15 DATED: January 22, 2020. 16 17 18 19 20 21 22 23 24 25 26 27 28