Cox v. U.S. Department of Agriculture

954 F. Supp. 2d 1061, 2012 WL 6185101, 2012 U.S. Dist. LEXIS 176230
CourtDistrict Court, D. Nevada
DecidedDecember 10, 2012
DocketNo. 3:11-cv-00454-RCJ-WGC
StatusPublished
Cited by1 cases

This text of 954 F. Supp. 2d 1061 (Cox v. U.S. Department of Agriculture) is published on Counsel Stack Legal Research, covering District Court, D. Nevada primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cox v. U.S. Department of Agriculture, 954 F. Supp. 2d 1061, 2012 WL 6185101, 2012 U.S. Dist. LEXIS 176230 (D. Nev. 2012).

Opinion

ORDER

ROBERT C. JONES, District Judge.

This case is a removed Petition for Judicial Review (“PJR”) originally filed in the Third Judicial District Court of Lyon County pursuant to Nevada Foreclosure Mediation Rule 21(1). Defendant U.S. Department of Agriculture (“USDA”) has moved to dismiss. For the reasons given herein, the Court denies the motion and remands the case.

I. FACTS AND PROCEDURAL HISTORY

Plaintiffs Larry L. Cox and Renee M. Cox are mortgagors of real property in Lyon County who filed the present PJR in the state district court in that county, requesting review of state Foreclosure Mediation Program (“FMP”) proceedings between Plaintiffs and Defendant. (See PJR, Mar. 8, 2011, ECF No. 1, at 5). Defendant attended the mediation but argued that it was prevented from modifying either the interest rate or loan term by federal statute. (See id. 5). Plaintiffs allege Defendant therefore failed to comply with the FMP because it failed to participate in good faith, sent no agent to the mediation with authority to modify the loan, and failed timely to provide required documents to the mediator. (See id.). Plaintiffs ask the Court to lower the interest rate to no higher than 6.5% and extend the loan term to thirty years, with a monthly payment not to exceed $500 and with any past due amount to be amortized into the loan; to fine the USDA; and to award fees, costs, and lost wages. (See id. 7-9). Defendant removed and has moved to dismiss.

II. LEGAL STANDARDS

“A party to the mediation may file a petition for judicial review with the district court in the county where the notice of default was properly recorded. A hearing shall be held, to the extent that the court deems necessary, for the limited purposes of determining bad faith, enforcing agreements made between the parties within the [1063]*1063Program, including temporary agreements, and determining appropriate sanctions pursuant to NRS Chapter 107 as amended.” Nev. FMP Rule 21(1) (2011).

In the present case, Plaintiffs have sued the USDA, so removal is available under 28 U.S.C. § 1442(a)(1). However, it is not entirely clear whether a PJR is generally removable under § 1441, which provides for removal jurisdiction wherever the federal court would have had original jurisdiction. This Court in a previous case assumed without deciding that such actions were removable. See Lucero v. Bank of Am. Home Loans, LLC, No. 2:11-cv-1326-RCJ-RJJ, 2012 WL 359465, at *3 (D.Nev. Feb. 2, 2012) (Jones, C.J.) (citing former Nev. FMP Rule 6(1) (2009)). Another court of this District has determined that when a PJR is filed in a case where there has in fact been no mediation, the action is generally removable as a civil action because the complaint is not a PJR subject to the Nevada FMP Rules. See Prasad v. BAC Home Loan Servicing LP, No. 2:10-cv-01857-RLH-PAL, 2011 WL 1304257, at *3 (D.Nev. Apr. 1, 2011) (Hunt, C.J.). That court suggested that had there been a mediation, a PJR might not be removable because the state district courts would have had exclusive jurisdiction over a PJR. See id. (“The rules clearly indicate that participation in the mediation program is a prerequisite to filing a petition for judicial review. Therefore, Plaintiffs Petition for Judicial Review is not one that would fall within the exclusive jurisdiction of the State Court.”).

Generally, perfected state court appeals of state administrative proceedings are removable civil actions under the diversity statute. Chi. R.I. & P.R. Co. v. Stude, 346 U.S. 574, 578-79, 74 S.Ct. 290, 98 L.Ed. 317 (1954) (“The [condemnation] proceeding before the sheriff is administrative until the appeal has been taken to the district court of the county. Then the proceeding becomes a civil action.... When the proceeding has reached the stage of a perfected appeal and the jurisdiction of the state district court is invoked, it then becomes in its nature a civil action and subject to removal by the defendant to the United States District Court.”). Stude appears to be on point, making perfected PJRs under the Nevada FMP Rules generally removable under 28 U.S.C. § 1441, at least where § 1332(a) is also satisfied.

However, another question is whether the Nevada FMP Rules vest exclusive jurisdiction over PJRs in the state courts. If so, Stude and 28 28 U.S.C. § 1332(a) are inapposite. The language “may file a petition for judicial review with the district court in the county where the notice of default was properly recorded” can be read to imply exclusive jurisdiction in the state courts. The rule notes that a PJR must be filed in the state district court in the county where the notice of default is filed, i.e., where the real property is situated, which reflects a concern not only of geographic venue, but also of jurisdiction and that the proper forum is the state district court, as opposed to the justice court or the federal district court. The language appears to exclude removal jurisdiction because it specifically identifies the trial court rather than simply creates a cause of action.

Additionally, federal courts may abstain in appropriate cases under Burford v. Sun Oil Co., 319 U.S. 315, 63 S.Ct. 1098, 87 L.Ed. 1424 (1943). This is such a case. Under Burford, a federal court may:

in its sound discretion ... refuse to enforce or protect legal rights, the exercise of which may be prejudicial to the public interest [because] it is in the public interest that federal courts of equity should exercise their discretionary pow[1064]*1064er with proper regard for the rightful independence of state governments in carrying out their domestic policy.

Id. at 317-18, 63 S.Ct. 1098 (internal quotation marks and footnotes omitted). In Burford itself, the Supreme Court affirmed abstention in a case involving judicial review of an administrative decision by the Texas Railroad Commission concerning regulation of oil and gas fields, because the regulation of these resources was critical to Texas’ domestic policy. See id. at 318-20, 63 S.Ct. 1098. Burford abstention “is concerned with protecting complex state administrative processes from undue federal interference.” Poulos v. Caesars World, Inc., 379 F.3d 654, 671 (9th Cir.2004) (citing Tucker v. First Md. Sav. & Loan, Inc., 942 F.2d 1401, 1404 (9th Cir.1991) (internal quotation marks omitted)). Burford abstention is appropriate where “(1) ... the state has concentrated suits involving the local issue in a particular court; (2) the federal issues are not easily separable from complicated state law issues with which the state courts may have special competence; and (3) ... federal review might disrupt state efforts to establish a coherent policy.” Id. at 1405. Also, “Under Burford,

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Bluebook (online)
954 F. Supp. 2d 1061, 2012 WL 6185101, 2012 U.S. Dist. LEXIS 176230, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cox-v-us-department-of-agriculture-nvd-2012.