Yates v. The Money Source, Inc ( 2023 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 DEANNA-KATHLEEN YATES, Case No. 1:23-cv-00155-JLT-EPG 12 ORDER TO SHOW CAUSE CONCERNING Plaintiff, SUBJECT MATTER JURISDICTION 13 v. 14 (Doc. 1) THE MONEY SOURCE, INC. d/b/a 15 ENDEAVOR AMERICA LOAN SERVICES; MIDLAND MORTGAGE, 16 Trustee, REMIC Pass-Through Certificates Fannie Mae REMIC Trust 2017-21; 17 FANNIE MAE, Mail Draw Assignments; CALAVERAS COUNTY CLERK 18 RECORDER; CENLAR FSB; and MORTGAGE ELECTRONIC 19 REGISTRATION SYSTEMS, INC., 20 Defendants. 21 On February 1, 2023, Deanna-Kathleen Yates filed a complaint against the several listed 22 Defendants asserting claims for quiet title and accounting. (Doc. 1 at 1.) Yates asserts this Court 23 has subject matter jurisdiction under diversity jurisdiction and federal question jurisdiction 24 pursuant to 28 U.S.C. § 1331. (Id. at 4.) The burden of establishing subject matter jurisdiction 25 “rests upon the party asserting jurisdiction.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 26 375, 377 (1994); see also Romero v. Securus Techs., Inc., 216 F. Supp. 3d 1078, 1085 (S.D. Cal. 27 2016) (“As the party putting the claims before the court, Plaintiffs bear the burden of establishing 28 jurisdiction.”). The Court may consider the issue of subject matter jurisdiction sua sponte at any 1 time during the proceeding, and if the Court finds “it lacks subject matter jurisdiction, the court 2 must dismiss the action.” Fed. R. Civ. P. 12(h)(3); Scholastic Ent., Inc. v. Fox Ent. Grp., Inc., 336 3 F.3d 982, 985 (9th Cir. 2003). As described below, the complaint fails to sufficiently plead 4 federal jurisdiction. 5 First, 28 U.S.C. § 1331 grants federal courts jurisdiction “of all civil actions arising under 6 the Constitution, laws, or treaties of the United States.” The general rule, referred to as the “well- 7 pleaded complaint rule,” is that a civil action arises under federal law for purposes of § 1331 8 when a federal question appears on the face of the complaint. Caterpillar Inc. v. Williams, 482 9 U.S. 386, 392 (1987). “[F]ederal jurisdiction depends solely on the plaintiff’s claims for relief and 10 not on anticipated defenses to those claims.” City of Oakland v. BP PLC, 969 F.3d 895, 903 (9th 11 Cir. 2020) (internal quotations omitted). Yates’ complaint states two causes of action, for quiet 12 title and accounting. (Doc. 1 at 6-7.) Although Yates cites various federal statutes in her 13 complaint, she has not clearly identified which federal law, if any, provides claim under which 14 relief can be granted for quiet title or accounting under the alleged circumstances. For example, 15 she cites 12 U.S.C. § 266, which authorizes certain kinds of banking institutions to be employed 16 as fiscal agents of the United States; 26 U.S.C. § 6325, which provides, among other things, 17 mechanisms by which the Secretary of the Treasury may release tax liens; and 48 C.F.R. 18 § 53.228, which lists the standard forms used in connection with bonding and insuring federal 19 acquisition contracts. (Id. at 7-8.) None of these statutes or regulations appear to be directly 20 relevant to the claims at issue in this case, nor is it apparent that Plaintiff has a right to pursue 21 causes of action under those statutes in this Court. See Stearns v. Stearns, 2022 WL 17832259, at 22 1 (W.D. Wash. Dec. 21, 2022) (issuing order to show cause regarding subject matter jurisdiction 23 where plaintiff failed to “identify a single federal statute or constitutional provision under which 24 he brings his claims”). 25 Second, 28 U.S.C. § 1332(a) provides jurisdiction over certain actions between citizens of 26 different states. Complete diversity is a requirement of 28 U.S.C. § 1332. Thus, the “citizenship 27 of each plaintiff [must be] diverse from the citizenship of each defendant.” Caterpillar Inc. v. 28 Lewis, 519 U.S. 61, 68 (1996). For diversity purposes, the citizenship of an individual is 1 “determined by her state of domicile, not her state of residence.” Kanter v. Warner-Lamber Co., 2 265 F.3d 853, 857 (9th Cir. 2001). Corporations are citizens of their states of incorporation and 3 their principal places of business. 28 U.S.C. § 1332(c); Harris v. Rand, 682 F.3d 846, 850 (9th 4 Cir. 2012). A limited liability company (LLC) is the citizen of every state where its owners or 5 members are citizens, regardless of its state of formation or principal place of business; the 6 citizenship of all of its members must be alleged. NewGen, LLC v. Safe Cig, LLC, 840 F.3d 606, 7 611-12 (9th Cir. 2016). 8 The complaint seemingly identifies at least two Defendants with the same citizenship as 9 Yates. Yates alleges her domicile and citizenship are in California. (Doc. 1 at 3-4.) Yates alleges 10 that Defendant Money Source, Inc. is a New York Corporation and “receives its written 11 communication via 1990 N. California Bld., Ste 720, Walnut Creek, California.” (Id. at 4 12 (emphasis in original).) Yates further alleges that Defendant Calaveras County Clerk Recorder 13 “received written communications” at an address in California. (Id.) These allegations do not 14 properly identify these Defendants’ citizenship because a corporation’s citizenship includes its 15 principal place of business and an individual’s citizenship is his or her place of domicile. See 16 Kanter, 265 F.3d at 857. (“Absent unusual circumstances, a party seeking to invoke diversity 17 jurisdiction should be able to allege affirmatively the actual citizenship of the relevant parties.”). 18 However, to the extent Yates intended to allege these Defendants have citizenship in California, 19 they share the same citizenship as Yates, negating the complete diversity requirement. Thus, the 20 complaint fails to sufficiently plead diversity jurisdiction pursuant to § 1332(a). Accordingly, 21 1. Within 15 days of the issuance of this order, Yates SHALL show cause in writing 22 why her claims should not be dismissed for lack of subject matter jurisdiction. 23 2. Alternatively, within 15 days, Yates may either file an amended complaint that 24 contains allegations addressing the court’s jurisdiction and the issues identified in this 25 order or may voluntarily dismiss her claims. 26 3. Failure to comply with this order will result in dismissal with prejudice of all 27 claims due to lack of jurisdiction. 28 4. In addition, a motion to dismiss was filed by Cenlar FSB Corporate Headquarters on 1 February 16, 2023. Pursuant to Local Rule 230(c), Yates’s opposition was due on 2 March 2, 2023. No opposition was received by that deadline. Therefore, Yates has 3 waived her right to oppose that motion. Should the Court determine jurisdiction exists, 4 it will proceed to rule on that motion on the papers without a hearing. Therefore, the 5 March 24, 2023 hearing is VACATED. 6 7 IT IS SO ORDERED. 3 Dated: _ March 13, 2023 Cerin | Tower TED STATES DISTRICT JUDGE 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28