Horvath v. JP Morgan Chase & Company

Opinion

1 2 3 4 5 6 7 10 11 HELEN L. HORVATH, Case No.: 3:21-cv-1665-BTM-AGS Plaintiff, 12 ORDER GRANTING IN PART v. 14 JP MORGAN CHASE & PLAINTIFF’S MOTION FOR COMPANY, RECONSIDERATION AND 15 DENYING PLAINTIFF’S MOTION Defendant. FOR A NEW JUDGE 16

17 [34, 35, 36]

18 On August 16, 2021, Plaintiff Helen L. Horvath filed a complaint against 19 Defendant JPMorgan Chase Bank, N.A.1 in the Superior Court of California, 20 County of San Diego, Small Claims Court (“Small Claims Court”), alleging 21 violations of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) 22 and the Fair Credit Reporting Act (“FCRA”). (ECF No. 1-2, Exh. A.) On September 23 22, 2021, Defendant removed the action to this Court. (ECF No. 1.) On January 24 6, 2022, the Court denied Plaintiff’s Motion to Remand and granted Defendant’s 25 Motion to Dismiss. (ECF No. 28.) The Court dismissed Plaintiff’s complaint without 26 27 28 1 prejudice and with leave to amend. (Id. at 12.) 2 On January 26, 2022, Plaintiff filed a Motion for a New Trial and 3 Vacate/Revise Judgment (ECF No. 34) and a Motion for a New Judge (ECF No. 4 35). On February 1, 2022, Plaintiff filed an amended Motion for a New Trial and 5 Vacate/Revise Judgment. (ECF No. 36.) The Court will construe the amended 6 motion as the operative Motion for a New Trial and Vacate/Revise Judgment. 8 Plaintiff brings her motion for a new trial and vacate/revise judgment 9 pursuant to Federal Rule of Civil Procedure Rule 59. Rule 59, however, is 10 inapplicable, as no trial has taken place and no final judgment has been issued. 11 See Indian Oasis-Baboquivari Unified Sch. Dist. No. 40 of Pima Cty., Ariz. v. Kirk, 12 109 F.3d 634, 636 (9th Cir. 1997) (“we made it explicit that an order dismissing a 13 complaint with leave to amend is not a final, appealable order”); Alan v. JP Morgan 14 Chase Bank, NA, 2020 WL 8461767, at *1 (C.D. Cal. Dec. 7, 2020) (“A motion 15 under Rule 59(e) is only appropriate when final judgment has been entered on all 16 claims. The provisions of Rule 59 are designed to address orders rendering a final 17 judgment, not interlocutory orders.”) (internal citations and quotations omitted). 18 Because Plaintiff is proceeding pro se, the Court will liberally construe her 19 motion as a motion for reconsideration of its interlocutory order. See City of Los 20 Angeles, Harbor Div. v. Santa Monica Baykeeper, 254 F.3d 882, 885 (9th Cir. 21 2001) (“The general rule regarding the power of a district court to rescind an 22 interlocutory order is as follows: As long as a district court has jurisdiction over the 23 case, then it possesses the inherent procedural power to reconsider, rescind, or 24 modify an interlocutory order for cause seen by it to be sufficient.”) (internal citation 25 and quotations omitted). “Although a district court may reconsider its decision for 26 any reason it deems sufficient, generally a motion for reconsideration is 27 appropriate if the district court: (1) is presented with newly discovered evidence; 28 (2) committed clear error or the initial decision was manifestly unjust; or (3) if there 1 is an intervening change in controlling law.” Strasburg v. M/Y JUST A NOTION, 2 2010 WL 3420794, at *2 (S.D. Cal. Aug. 30, 2010) (internal citations and 3 quotations omitted). 4 A. Dismissal Order 5 In support of her motion for reconsideration of the Court’s dismissal order, 6 Plaintiff attaches as new evidence a copy of a Consent Order in CFBP 7 Administrative Proceeding No. 2017-CFPB-0015 (ECF No. 36-1) and argues that 8 Defendant violated the Consent Order and FCRA when it failed to timely respond 9 to direct disputes submitted by Plaintiff. (ECF No. 36 (“Mot. for Reconsideration”) 10 at 3-4.) However, FCRA does not provide a private right of action for all FCRA 11 violations. See Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147, 1154 (9th 12 Cir. 2009) (“The FCRA expressly creates a private right of action for willful or 13 negligent noncompliance with its requirements. However, § 1681s–2 limits this 14 private right of action to claims arising under subsection (b), the duties triggered 15 upon notice of a dispute from a CRA.”). Further, Plaintiff fails to identify any part 16 of the Consent Order that creates an additional private right of action. See Blue 17 Chip Stamps v. Manor Drug Stores, 421 U.S. 723, 750 (1975) (“a well-settled line 18 of authority from this Court establishes that a consent decree is not enforceable 19 directly or in collateral proceedings by those who are not parties to it even though 20 they were intended to be benefited by it”); Kaur v. Comptroller of Currency, 2014 21 WL 5473538, at *3 (E.D. Cal. Oct. 28, 2014) (“the consent orders placed at issue 22 by plaintiffs' allegations do not provide them with a private right of action to enforce 23 the terms and conditions of those consent orders”); United States v. Louisiana- 24 Pac. Corp., 569 F. Supp. 1141, 1146 (D. Or. 1983) (“There is no private right of 25 action for third parties arising out of a consent agreement between others.”). In 26 dismissing Plaintiff’s FCRA cause of action, the Court held that “Plaintiff fail[ed] to 27 allege that she notified the relevant CRA that she disputed the reporting as 28 inaccurate, that the CRA then notified Defendant of the alleged inaccurate 1 information, and that Defendant then failed to investigate the inaccuracy or further 2 failed to comply with the requirements in 15 U.S.C. 1681s-2(b) (1)(A)-(E).” (ECF 3 No. 28 at 11.) Plaintiff’s submission of the Consent Order does not cure these 4 deficiencies and is not a sufficient basis for reconsideration. 5 Plaintiff also argues the following: (1) that Defendant filed a late Notice of 6 Party with Financial Interest; (2) that Defendant improperly attached its proposed 7 sur-reply to their request to file a sur-reply; (3) that Defendant’s attorneys engaged 8 in misconduct and made false statements during the case; (4) that Plaintiff’s 9 financial losses due to her inability to apply for various contracts should be 10 awarded as costs or fees; and (5) that the pleading standards of the Federal Rules 11 of Civil Procedure should not apply to a California small claims case. (Mot. for 12 Reconsideration at 15-26.) 13 First, while Defendant did file a late Notice of Party with Financial Interest, 14 the filing of the Notice does not relate to the substance of the Court’s dismissal 15 order. Second, Defendant’s attachment of a proposed sur-reply to its request to 16 file a sur-reply was permissible and did not violate any local rules or chamber’s 17 rules. Third, Plaintiff’s accusations of misconduct and false statements by 18 Defendant’s attorneys are, again, conclusory, speculative, and unsupported by the 19 record. Fourth, Plaintiff has provided no basis for recovering purported financial 20 losses from her inability to apply for various contracts. Fifth, Plaintiff is incorrect 21 that federal pleading standards do not apply once a California small claims case 22 has been removed to federal court. See Vess v. Ciba-Geigy Corp. USA, 317 F.3d 23 1097, 1102 (9th Cir. 2003) (“The Federal Rules of Civil Procedure apply 24 irrespective of the source of subject matter jurisdiction, and irrespective of whether 25 the substantive law at issue is state or federal.”); Joyner v. Bank of Am. Home 26 Loans Servicing, LP, 473 F. App'x 724, 725 (9th Cir. 2012) (“the district court 27 properly applied federal pleading standards following the removal of the action 28 from state court”). None of Plaintiff’s objections have merit and are not sufficient 1 for reconsideration. 2 Accordingly, Plaintiff’s motion for reconsideration of the Court’s 3 dismissal order is DENIED. 4 B. Remand Order 5 In support of her motion for reconsideration of the Court’s remand order, 6 Plaintiff argues that removal was untimely because the USPS is a sub-agent of CT 7 Corp and was authorized to accept service of process on behalf of CT Corp on 8 August 20, 2021. (Mot. for Reconsideration at 4-5.) Plaintiff claims that “[u]nder 9 the federally guided contract between USPS and CT, the USPS is a designated 10 sub-agent for signature by virtue of the USPS Caller Service with premium 11 signature.” (Id. at 4.) Plaintiff also argues that, based on the alleged sub-agent 12 contract between the USPS and CT Corp, the stated service date of August 23, 13 2021 in the declaration of Alexandre C. Halow is incorrect. (Id. at 7-9, 15.) 14 Defendant, in its opposition papers, does not substantively address or 15 provide evidence refuting Plaintiff’s allegation of a sub-agent contract between the 16 USPS and CT Corp. “[Courts] strictly construe the removal statute against removal 17 jurisdiction. Federal jurisdiction must be rejected if there is any doubt as to the 18 right of removal in the first instance.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th 19 Cir. 1992) (internal citations omitted). “The strong presumption against removal 20 jurisdiction means that the defendant always has the burden of establishing that 21 removal is proper.” Id. (internal quotation marks omitted). Because there is a 22 dispute of material fact regarding whether the USPS was the sub-agent of CT Corp 23 for service of process and when Defendant was served, the Court finds it 24 appropriate to conduct an evidentiary hearing to resolve these facts. See Sompo 25 Japan Ins. Co. of Am. Inc. v. VIP Transp., Inc., 2008 WL 11410111, at *1 (N.D. 26 Cal. Aug. 12, 2008) (“In a removal proceeding, the defendant bears the burden of 27 establishing federal subject matter jurisdiction. If there is a dispute in the facts, the 28 court must either conduct an evidentiary hearing or view the facts in the light most 1 favorable to the non-moving party.”) (internal citation omitted). 2 Accordingly, Plaintiff’s motion for reconsideration of the Court’s 3 remand order is GRANTED. 5 Plaintiff requests that her case be reassigned to a new judge. (ECF No. 35.) 6 As the basis for her request, Plaintiff alleges that: (1) the Court did not write the 7 January 6, 2022 Order Denying Plaintiff’s Motion to Remand and Granting 8 Defendant’s Motion to Dismiss, and that it was improperly written entirely by 9 Defendant; and (2) there may be a relationship between Judge Barry Ted 10 Moskowitz and two partners at Defendant’s attorneys’ law firm Stroock & Stroock 11 & Lavan LLP, Stephen P. Moskowitz and Ross F. Moskowitz. 12 “[J]udges . . . are presumed to be impartial and to discharge their ethical 13 duties faithfully so as to avoid the appearance of impropriety.” First Interstate Bank 14 of Arizona, N.A. v. Murphy, Weir & Butler, 210 F.3d 983, 988 (9th Cir. 2000). “[A] 15 judge has . . . a duty to sit when there is no legitimate reason to recuse.” Clemens 16 v. U.S. Dist. Ct. for Cent. Dist. of California, 428 F.3d 1175, 1179 (9th Cir. 2005). 17 Under 28 U.S.C. § 144: 18 Whenever a party to any proceeding in a district court makes and files a timely and sufficient affidavit that the judge before whom the matter 19 is pending has a personal bias or prejudice either against him or in 20 favor of any adverse party, such judge shall proceed no further therein, but another judge shall be assigned to hear such proceeding. 21 Further, under 28 U.S.C. § 455: 22 (a) Any justice, judge, or magistrate judge of the United States shall 23 disqualify himself in any proceeding in which his impartiality might 24 reasonably be questioned. (b) He shall also disqualify himself in the following circumstances: (1) Where he has a personal bias or prejudice 25 concerning a party, or personal knowledge of disputed evidentiary 26 facts concerning the proceeding; (2) Where in private practice he served as lawyer in the matter in controversy, or a lawyer with whom 27 he previously practiced law served during such association as a lawyer 28 concerning the matter, or the judge or such lawyer has been a material 1 witness concerning it; (3) Where he has served in governmental employment and in such capacity participated as counsel, adviser or 2 material witness concerning the proceeding or expressed an opinion 3 concerning the merits of the particular case in controversy; (4) He knows that he, individually or as a fiduciary, or his spouse or minor 4 child residing in his household, has a financial interest in the subject 5 matter in controversy or in a party to the proceeding, or any other interest that could be substantially affected by the outcome of the 6 proceeding; (5) He or his spouse, or a person within the third degree 7 of relationship to either of them, or the spouse of such a person: (i) Is a party to the proceeding, or an officer, director, or trustee of a party; 8 (ii) Is acting as a lawyer in the proceeding; (iii) Is known by the judge 9 to have an interest that could be substantially affected by the outcome of the proceeding; (iv) Is to the judge's knowledge likely to be a material 10 witness in the proceeding. 11 “Section 455(a) asks whether a reasonable person perceives a significant 12 risk that the judge will resolve the case on a basis other than the merits. The 13 reasonable person is not someone who is hypersensitive or unduly suspicious, but 14 rather is a well-informed, thoughtful observer. The standard must not be so broadly 15 construed that it becomes, in effect, presumptive, so that recusal is mandated upon 16 the merest unsubstantiated suggestion of personal bias or prejudice.” United 17 States v. Holland, 519 F.3d 909, 913 (9th Cir. 2008). 18 In a January 12, 2022 order, the Court stated on the record that: (1) the 19 Court’s Order Denying Plaintiff’s Motion to Remand and Granting Defendant’s 20 Motion to Dismiss was entirely its own work; (2) that the Court had no record of 21 receiving a proposed order from Defendant regarding their Motion to Dismiss; and 22 (3) to the Court’s knowledge, the Honorable Barry Ted Moskowitz does not have 23 a familial or personal relationship with Stephen P. Moskowitz or Ross F. Moskowitz 24 at Stroock & Stroock & Lavan LLP. (ECF No. 31.) Plaintiff’s unsubstantiated 25 allegations to the contrary are not sufficient to warrant the Court’s recusal or 26 disqualification. 27 28 1 Accordingly, Plaintiff’s Motion for a New Judge is DENIED. 3 Based upon the foregoing, Plaintiff’s Motion for Reconsideration of the 4 Court’s dismissal order is DENIED, Plaintiff’s Motion for Reconsideration of the 5 Court’s remand order is GRANTED, and Plaintiff’s Motion for a New Judge is 7 The Court hereby sets a limited evidentiary hearing regarding the service of 8 process date for May 19, 2022 at 11:00 a.m. in Courtroom 15B in the James M. 9 Carter and Judith N. Keep United States Courthouse, 333 West Broadway, San 10 Diego, CA 92101. The parties must present evidence, which may include live 11 testimony or depositions, with an opportunity for cross-examination. Live 12 testimony by video will be permitted. The Court will make a determination on 13 whether removal was timely based solely on the evidence presented at the 14 hearing. 15 Pursuant to Federal Rule of Civil Procedure Rule 26(d)(1), the Court hereby 16 authorizes the parties to serve subpoenas. Any subpoenas must comply with 17 Federal Rule of Civil Procedure 45, including proper service and the tendering of 18 witness fees. 19 In addition, the Court orders the following: 20 1. Within 14 days of this order, Defendant shall produce to Plaintiff any 21 contracts of agreements between CT Corp and the USPS as to receipt of mail in 22 the Central District of California that were in effect as of August 20 to August 23, 23 2021. If there are no such documents, Defendant shall file a declaration to that 24

25 2 In the Court’s January 12, 2022 order, in response to a January 10, 2022 email Plaintiff sent to Defendant’s 26 attorneys, containing various allegations and cc’ing the Court, the Court stated that “the Court admonishes Plaintiff to refrain from further including the Court in correspondence directed at her opposing party and its 27 attorneys.” (ECF No. 31 at 1.) Plaintiff requests that the Court vacate its admonishment, appearing to mistakenly interpret the January 12, 2022 order as a retaliatory response to a judicial complaint she filed. The Court’s 28 admonishment regarding Plaintiff’s violation of Local Civil Rule 83.9 was not related to any judicial complaint filed. 1 effect, stating the process it used to search for them. 2 2. Within 14 days of this order, Defendant’s attorney, Bryan D. Trader, shall 3 produce to Plaintiff any emails that he sent to the Court submitting a proposed 4 ||order or judgment on the motion to remand and motion to dismiss. If there were 5 ||none, he shall submit a declaration to that effect. 6 7 || ITIS SO ORDERED. 8 9 ||Dated: April 6, 2022 ) 10 a Tid. Mahou 14 Honor ble Barry Ted Moskgwitz United States District Judge 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28