Wells Sweeping, LLC v. Capital One, National Association ( 2022 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 WELLS SWEEPING, LLC, a California No. 2:21-cv-00728-MCE-KJN Limited Liability Company, and JAY 12 WELLS, an individual, 13 Plaintiffs, ORDER 14 v. 15 CAPITAL ONE, NATIONAL ASSOCIATION, AARON ASHCRAFT, 16 ROXY ASHCRAFT, and Does 1 – 20, inclusive, 17 Defendants. 18 19 In bringing the present action, Plaintiffs Wells Sweeping, LLC and Jay Wells 20 (“Plaintiffs” or “Wells”) seek damages from Defendant Capital One Bank (USA), N.A. 21 (“Capital One”) arising from Capital One’s refusal to reverse allegedly unauthorized 22 and/or fraudulent charges on business credit cards issued by Capital One to Plaintiffs.1 23 Plaintiffs’ Complaint was filed in this Court on April 23, 2021. Federal jurisdiction 24 is premised solely on a single claim, as alleged in the Third Cause of Action, for violation 25 of the Electronic Funds Transfer Act, 15 U.S.C. §§ 1693, et seq. (“EFTA”) and EFTA’s 26 implementing regulations at 12 C.F.R. §§ 1005.1 – 1005.20. The remaining fifteen 27 1 Aaron Ashcraft, the former Wells employee allegedly responsible for incurring the charges, has also been named as a Defendant along with his wife, Roxy Ashcraft. A Clerk’s Entry of Default against the 28 Ashcrafts was taken on February 9, 2022. (ECF No. 29). 1 causes of action are premised on either state statutory or common law violations. 2 Plaintiffs ask the court to exercise supplemental jurisdiction over those state claims 3 under 28 U.S.C. § 1367. 4 Presently before the Court is Defendant’s Motion to Dismiss (ECF No. 15) the 5 Plaintiffs’ April 29, 2021, First Amended Complaint. That Motion to Dismiss, made 6 pursuant to Federal Rule 12(b)(6) on grounds that none of Plaintiffs’ causes of action 7 state a viable claim against Capital One, is the first substantive filing made in this matter. 8 With respect to the federal EFTA claim, Capital One argues that EFTA applies only to 9 electronic funds transfers from a consumer account, and not to credit card transactions 10 like those at issue in this lawsuit. Capital One cites controlling Ninth Circuit authority 11 confirming that EFTA “does not apply to credit-based transactions.” Sanford v. 12 MemberWorks, Inc., 625 F.3d 550, 560 (9th Cir. 2010). By way of opposition to 13 Defendant’s Motion, Plaintiffs do not oppose dismissal of their EFTA claim, and agree to 14 “voluntarily dismiss [the] cause of action without prejudice.” Pls.’ Opp., 8:5-7. That 15 concession removes the only basis for maintaining this matter in federal court. 16 28 U.S.C. § 1367(a) permits federal court to exercise supplemental jurisdiction 17 over state law claims provided those claims form part of the same case or controversy 18 presented by the claim or claims falling within its original jurisdiction. However, 19 supplemental jurisdiction “is a doctrine of discretion, not of plaintiff’s right.” City of 20 Chicago v. Int’l College of Surgeons, 522 U.S. 156, 172 (1997). Indeed, the statute 21 makes it clear that supplemental jurisdiction may properly be declined under certain 22 conditions, including where all claims conferring original jurisdiction have been 23 dismissed. 28 U.S.C. § 1367(c)(3). Although federal courts should look to 24 considerations of judicial economy convenience, fairness and comity in assessing 25 whether the exercise of supplemental jurisdiction is appropriate, when “federal-law 26 claims have dropped out of the lawsuit in its early stages and only state-law claims 27 remain, the federal court should decline the exercise of jurisdiction by dismissing the 28 case without prejudice.” Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350 (1988), 1 | citing Mine Workers v. Gibbs, 383 U.S. 715, 726-27 (1966); see also Pristavec v. Meno 2 | Holdings SPV, LP, No. 21-cv-04458-EMC, 2022 WL 888440 at *11 (N.D. Cal. March 25, 3 | 2022) (in the usual case, once federal claims have been disposed of in their entirety, 4 | declining to exercise jurisdiction over the remaining state-law claims is indicated, citing 5 | Cohill, 484 U.S. at 350 n. 7.) 6 Here, Plaintiffs’ failure to even oppose dismissal of the sole federal claim upon 7 | which federal question jurisdiction is premised indicates that claim was insubstantial. 8 | Moreover, the absence of any federal claim leaves only claims premised on state law to 9 | be adjudicated. That task is better left to California courts, particularly since this Court 10 | suffers from one of the highest weighted caseloads in the nation, which makes 11 | expeditious handling of pending litigation already problematic. Given the fact that the 12 | sole federal claim has been dismissed virtually at the onset of the case, this Court can 13 | discern no good reason to exercise supplemental jurisdiction at this juncture over the 14 | remaining fifteen state law causes of action and, in exercising its discretion, declines to 15 | doso. Plaintiffs’ lawsuit is accordingly dismissed, without prejudice, and the Clerk of 16 || Court is directed to close the file. 17 Because the Court has determined that the exercise of supplemental jurisdiction 18 || is not indicated under the circumstances, and given its dismissal without prejudice, 19 | Plaintiffs may refile their claims in the appropriate state court. Bass v. Parkwood Hosp., 20 | 180 F.3d 234, 246 (5th Cir. 1999). In accordance with the provisions of 28 U.S.C. 21 | § 1367(d), any applicable statute of limitations as to Plaintiffs’ state law claims are tolled 22 | during the period their lawsuit was pending in this Court, and for thirty (30) days following 23 | this dismissal, unless state law provides a longer period. 24 IT IS SO ORDERED. 25 | Dated: May 12, 2022 26 J Lat LEK ee NK 27 SENIOR UNITED STATES DISTRICT JUDGE 28