Alper, et al. v. Ocwen Loan Servicing LLC

2018 DNH 039

• Court: District Court, D. New Hampshire
• Decided: March 5, 2018
• Docket: 18-cv-044-JD
• Status: Published

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

Jay S. Alper and Colleen J. Alper

v. Civil No. 18-cv-044-JD Opinion No. 2018 DNH 039 Ocwen Loan Servicing, LLC

O R D E R

Jay and Colleen Alper, proceeding pro se, brought suit in

state court, alleging federal and state claims against Ocwen

Loan Servicing, LLC. Ocwen removed the case to this court based

on federal question jurisdiction, 28 U.S.C. § 1331. The Alpers

move for leave to amend their complaint and also move to remand

the case to state court. Ocwen objects, arguing that the motion

is procedurally improper and the proposed amendments are futile.

Because the Alpers move for both leave to amend and to

remand the case, they have improperly combined two motions for

separate relief into a single filing. LR 7.1(a)(1). Further,

the motion to remand will not be ripe unless and until the

motion to amend is granted. In light of their pro se status,

however, the court will not require the Alpers to refile the

motions in compliance with Rule 7.1(a)(1) and instead will

consider the motions seriatim. I. Motion to Amend

The Alpers move for leave to amend their complaint to

withdraw their federal claims alleging that Ocwen violated the

Fair Credit Reporting Act, 15 U.S.C. § 1681, et seq.1 In

support, they cite Federal Rule of Civil Procedure 15(a), which

provides that leave to amend “shall be freely given when justice

so requires.” The Alpers also explain that they are withdrawing

their federal claims in order to avoid federal subject matter

jurisdiction in support of their motion to remand.

In response, Ocwen contends that the motion to amend is

untimely. Ocwen also contends that the proposed amended

complaint is futile because the claims are time barred, because

the Alpers released their claims under the New Hampshire Fair

Credit Reporting Act in 2014, and because the state law claims

are preempted by the federal Fair Credit Reporting Act.

A. Timing of Motion

Ocwen contends that the motion for leave to amend is both

too early and too late. In support, Ocwen cites Federal Rule of

Civil Procedure 15(a)(1) that allows a plaintiff to amend as a

matter of course within twenty-one days after serving the

1 In their complaint, the Alpers refer to the Act as the Fair Debt Reporting Act, but, based on the citation to 15 U.S.C. § 1681, they apparently intended to cite the Fair Credit Reporting Act.

2 complaint or within twenty-one days after an answer or a motion

under Rule 12(b). Because the Alpers’ motion was filed more

than twenty-one days after they filed their complaint in state

court but before Ocwen filed a response, Ocwen contends that the

motion cannot be considered.2

Contrary to Ocwen’s theory, the Alpers have moved for leave

to amend, as provided in Rule 15(a)(2), and do not rely on

amendment as a matter of course, as provided in Rule 15(a)(1).

Therefore, the timing issue raised by Ocwen is meritless.

B. Futility

Ocwen also contends that the proposed amendment is futile

because the claims are time barred, were released in a 2014

settlement agreement, and are preempted by the federal Fair

Credit Reporting Act. The Alpers did not file a reply and,

therefore, did not respond to Ocwen’s futility arguments. Ocwen

has also filed a motion to dismiss the original complaint.

Ocwen’s futility arguments would be more appropriately

addressed in the context of a motion to dismiss.

C. Amendment

The Alpers are granted leave to amend their complaint.

When the amended complaint is docketed, it will supersede the

2 The court granted the parties’ motion to extend the time for Ocwen to respond to the complaint.

3 original complaint, rendering the pending motion to dismiss

moot. See Connectu LLC v. Zuckerberg, 522 F.3d 82, 91 (1st Cir.

2008); Kendall v. SOciety for the Protection of N.H. Forests,

2017 WL 2683991, at *6 (D.N.H. June 21, 2017).

II. Motion to Remand

Based on the absence of a federal claim in the amended

complaint, the Alpers also move to remand the case back to state

court. In support, the Alpers contend that without a federal

claim federal question jurisdiction under § 1331 is lacking and

ask the court to decline to exercise supplemental jurisdiction

over the state law claims. The Alpers also assert that subject

matter jurisdiction under § 1332, based on diversity of

citizenship, cannot be the basis for denying their request to

remand because Ocwen did not cite § 1332 in the notice of

removal and because the amount in controversy does not exceed

$75,000.

“An amendment to a complaint after removal designed to

eliminate the federal claim will not defeat federal

jurisdiction.” Ching v. Mitre Corp., 921 F.2d 11, 13 (1st Cir.

1990); see also Akorede v. Tex. Dep’t of Assistive Rehab.

Servs., 2017 WL 3394527, at *5 (S.D. Tex. Aug. 7, 2017) (citing

cases and 14B Wright, Miller, Cooper & Steinman, Federal

Practice and Procedure § 3721 (4th ed. 2009)). Instead, the

4 court must decide whether to retain supplemental subject matter

jurisdiction over the state law claims pursuant to 28 U.S.C.

§ 1367(c). When the federal claims that were the basis for

federal subject matter jurisdiction are dismissed or withdrawn,

district courts ordinarily will decline to exercise supplemental

jurisdiction over the remaining state law claims. § 1367(c)(3);

Artis v. District of Columbia, 138 S. Ct. 594, 597-98 (2018);

League of Women Voters of N.H. v. N.H. Sec. of State, 2017 WL

3842593, at *2 (D.N.H. Sept. 3, 2017). Generally, when all

federal claims are withdrawn early in the litigation, the

district court should decline to exercise supplemental

jurisdiction over remaining state law claims. Camelio v. Am.

Fed’n, 137 F.3d 666, 672 (1st Cir. 1998); accord Desjardins v.

Willard, 777 F.3d 43, 45-46 (1st Cir. 2015).

This case was removed on January 16, 2018, less than two

months ago. The Alpers immediately moved to amend the complaint

to withdraw the federal claims and to remand the case to state

court. Although Ocwen filed a motion to dismiss while the

motion to amend and remand was pending, that motion will become

moot when the amended complaint is docketed.

Therefore, it is appropriate under the circumstances to

decline to exercise supplemental jurisdiction over the state law

claims that will be the only claims remaining in this case when

the amended complaint is docketed.

5 Conclusion

For the foregoing reasons, the plaintiffs’ motion for leave

to amend and to remand the case to state court (document no. 8)

is granted.

The clerk of court shall docket the amended complaint,

which is attached to the motion to amend as document 8-1.

The defendant’s motion to dismiss (document no. 10) is

denied without prejudice as moot.

Once the amended complaint is docketed, the clerk of court

shall remand the case to the Rockingham County Superior Court.

SO ORDERED.

__________________________ Joseph A. DiClerico, Jr. United States District Judge

March 5, 2018

cc: Jay S. Alper, pro se Coleen J. Alper, pro se Joe N. Nguyen, Esq. L. John Vassalotti, III, Esq. Benjamin M. Greene, Esq.