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2 3 4 5 6 7
8 United States District Court 9 Central District of California
11 MARTIN BRIONES et al., Case № 2:20-cv-00454-ODW (RAOx)
12 Plaintiffs, ORDER GRANTING DEFENDANT 13 v. U.S. DEPARTMENT OF HOUSING 14 PENN ESCROW et al., AND URBAN DEVELOPMENT’S 15 MOTION TO DISMISS FIRST Defendants. AMENDED COMPLAINT [22] 16 17 I. INTRODUCTION 18 Before the Court is Defendant U.S. Department of Housing and Urban 19 Development’s (“HUD”) Motion to Dismiss the First Amended Complaint 20 (“Motion”). (Mot. to Dismiss (“Mot.”), ECF No. 22.) For the reasons that follow, the 21 Court GRANTS the Motion.1 22 II. BACKGROUND 23 In their First Amended Complaint, Plaintiffs Martin Briones and Shanell 24 Briones allege that, during Plaintiffs’ refinance of their home loan, Defendants Penn 25 Escrow and Nationstar Mortgage LLC failed to clear all of Plaintiffs’ loan obligations, 26 including a loan from HUD, which Plaintiffs have now been failing to make payments 27
28 1 Having carefully considered the papers filed in connection with the Motion, the Court deemed the matter appropriate for decision without oral argument. Fed. R. Civ. P. 78; C.D. Cal. L.R. 7-15. 1 on. (First Am. Compl. (“FAC”) ¶¶ 1, 2, 9, ECF No. 10.) Plaintiffs allege six claims 2 against Defendant HUD: breach of contract and estoppel, breach of good faith and fair 3 dealing, declaratory judgment and injunctive relief, violation of the Federal Debt 4 Collection Practices Act,2 and violation of the California Business and Professions 5 Code. (Id. ¶¶ 89–118, 132–183.) 6 Defendant HUD now moves to dismiss for lack of subject matter jurisdiction. 7 III. LEGAL STANDARD 8 Under Federal Rule of Civil Procedure (“Rule”) 12(b)(1), a complaint may be 9 dismissed for lack of subject matter jurisdiction. “A Rule 12(b)(1) jurisdictional 10 attack may be facial or factual.” Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 11 (9th Cir. 2004). “In a facial attack, the challenger asserts that the allegations 12 contained in a complaint are insufficient on their face to invoke federal jurisdiction.” 13 Id. “[I]n a factual attack, the challenger disputes the truth of the allegations that, by 14 themselves, would otherwise invoke federal jurisdiction.” Id. Regardless of the type 15 of motion asserted under Rule 12(b)(1), the plaintiff always bears the burden of 16 showing that federal jurisdiction is proper. See Kokkonen v. Guardian Life Ins. Co. of 17 Am., 511 U.S. 375, 376–78 (1994); Valdez v. United States, 837 F. Supp. 1065, 1067 18 (E.D. Cal. 1993), aff’d 56 F.3d. 1177 (9th Cir. 1995). 19 IV. DISCUSSION 20 Defendant HUD argues this Court lacks subject matter jurisdiction because any 21 contract claim against the government in excess of $10,000 must be brought in the 22 Court of Federal Claims. (Mot. 4–5.) As to the remaining claim, HUD argues that the 23 government has not waived sovereign immunity, which bars this action against it. 24 (Mot. 5–7.) 25 Generally, the United States can assert sovereign immunity against lawsuits or 26 consent to them. Lehman v. Nakshian, 453 U.S. 156, 160 (1981). Such consent 27
28 2 In their Opposition, Plaintiffs dismissed their FDCPA claim as to Defendant HUD. (Opp’n to Mot. (“Opp’n”), ECF No. 28.) 1 defines the jurisdiction of the court to hear an action against the federal government. 2 Baker v. United States, 817 F.2d 560, 562 (9th Cir. 1987). Congress can, of course, 3 waive sovereign immunity. See, e.g., Loeffler v. Frank, 486 U.S. 549, 554 (1988); 4 Blue v. Widnall, 162 F.3d 541, 544 (9th Cir. 1998). However, such a waiver “must be 5 unequivocally expressed in statutory text.” Lane v. Pena, 518 U.S. 187, 192 (1996). 6 A. Plaintiffs’ Contract Claims 7 Whether the Court has jurisdiction over Plaintiffs’ claims sounding in contract, 8 requires analysis of “the two principal federal statutes authorizing suit against the 9 United States: the Tucker Act and the Little Tucker Act.” McGuire v. United States, 10 550 F.3d 903, 910 (9th Cir. 2008). The Tucker Act, 28 U.S.C. § 1491(a)(1), 11 “provide[s] for jurisdiction solely in the Court of Federal Claims for Tucker Act 12 claims seeking more than $10,000 in damages,” and the Little Tucker Act, 28 U.S.C. 13 § 1346(a)(2), provides “concurrent district court jurisdiction over claims seeking 14 $10,000 or less.” McGuire, 550 F.3d at 910–11. 15 Plaintiffs’ claims for breach of contract, breach of good faith and fair dealing, 16 and declaratory or injunctive relief fall within the scope of the Tucker Act as they seek 17 more than $10,000 in damages and are founded “upon [an] express or implied contract 18 with the United States.” 28 U.S.C. § 1491(a)(1). 19 Plaintiffs disingenuously argue that the breach of contract claim seeks only 20 equitable relief and not monetary damages. (Opp’n 8–9.) Requesting the Court to 21 prevent enforcement of a contract in which HUD is attempting to assess “over 22 $36,000” is, in fact, a claim seeking more than $10,000 in damages. Plaintiffs’ First 23 Amended Complaint similarly makes this clear as Plaintiffs allege HUD’s assessment 24 of interest charges, penalties, and administrative costs are all in breach of the contract 25 and should not be assessed. (FAC ¶¶ 109, 110, 117). Plaintiffs’ attempt to 26 characterize their breach of contract claim as a claim that seeks no damages defies the 27 very essence of a contract claim: damages. St. Paul Fire & Marine Ins. Co. v. Am. 28 Dynasty Surplus Lines Ins. Co., 101 Cal. App. 4th 1038, 1060 (2002) (“An essential 1 element of a claim for breach of contract are damages resulting from the breach.”) 2 (emphasis omitted). 3 Furthermore, to the extent Plaintiffs’ other contract claims assert a promissory 4 estoppel theory or seek injunctive relief, even without seeking damages, those claims 5 similarly fall within the Tucker Act. See N. Side Lumber Co. v. Block, 753 F.2d 1482, 6 1486 (9th Cir. 1985) (finding an impracticability claim that was not seeking damages 7 as “concerned solely with the rights created within the contractual relationship” and 8 therefore within the Tucker Act and “subject to its restrictions on relief”); Jablon v. 9 United States, 657 F.2d 1064, 1070 (9th Cir. 1981) (analyzing claims under the Tucker 10 Act and holding that “the government has not waived its sovereign immunity with 11 regard to a promissory estoppel cause of action”). In fact, Plaintiffs concede that their 12 declaratory and injunctive relief claim “arises from the contract.” (Opp’n 10.) 13 Accordingly, Plaintiffs have failed to meet their burden in proving that the 14 Court has jurisdiction over its contracts claims.
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O 1
2 3 4 5 6 7
8 United States District Court 9 Central District of California
11 MARTIN BRIONES et al., Case № 2:20-cv-00454-ODW (RAOx)
12 Plaintiffs, ORDER GRANTING DEFENDANT 13 v. U.S. DEPARTMENT OF HOUSING 14 PENN ESCROW et al., AND URBAN DEVELOPMENT’S 15 MOTION TO DISMISS FIRST Defendants. AMENDED COMPLAINT [22] 16 17 I. INTRODUCTION 18 Before the Court is Defendant U.S. Department of Housing and Urban 19 Development’s (“HUD”) Motion to Dismiss the First Amended Complaint 20 (“Motion”). (Mot. to Dismiss (“Mot.”), ECF No. 22.) For the reasons that follow, the 21 Court GRANTS the Motion.1 22 II. BACKGROUND 23 In their First Amended Complaint, Plaintiffs Martin Briones and Shanell 24 Briones allege that, during Plaintiffs’ refinance of their home loan, Defendants Penn 25 Escrow and Nationstar Mortgage LLC failed to clear all of Plaintiffs’ loan obligations, 26 including a loan from HUD, which Plaintiffs have now been failing to make payments 27
28 1 Having carefully considered the papers filed in connection with the Motion, the Court deemed the matter appropriate for decision without oral argument. Fed. R. Civ. P. 78; C.D. Cal. L.R. 7-15. 1 on. (First Am. Compl. (“FAC”) ¶¶ 1, 2, 9, ECF No. 10.) Plaintiffs allege six claims 2 against Defendant HUD: breach of contract and estoppel, breach of good faith and fair 3 dealing, declaratory judgment and injunctive relief, violation of the Federal Debt 4 Collection Practices Act,2 and violation of the California Business and Professions 5 Code. (Id. ¶¶ 89–118, 132–183.) 6 Defendant HUD now moves to dismiss for lack of subject matter jurisdiction. 7 III. LEGAL STANDARD 8 Under Federal Rule of Civil Procedure (“Rule”) 12(b)(1), a complaint may be 9 dismissed for lack of subject matter jurisdiction. “A Rule 12(b)(1) jurisdictional 10 attack may be facial or factual.” Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 11 (9th Cir. 2004). “In a facial attack, the challenger asserts that the allegations 12 contained in a complaint are insufficient on their face to invoke federal jurisdiction.” 13 Id. “[I]n a factual attack, the challenger disputes the truth of the allegations that, by 14 themselves, would otherwise invoke federal jurisdiction.” Id. Regardless of the type 15 of motion asserted under Rule 12(b)(1), the plaintiff always bears the burden of 16 showing that federal jurisdiction is proper. See Kokkonen v. Guardian Life Ins. Co. of 17 Am., 511 U.S. 375, 376–78 (1994); Valdez v. United States, 837 F. Supp. 1065, 1067 18 (E.D. Cal. 1993), aff’d 56 F.3d. 1177 (9th Cir. 1995). 19 IV. DISCUSSION 20 Defendant HUD argues this Court lacks subject matter jurisdiction because any 21 contract claim against the government in excess of $10,000 must be brought in the 22 Court of Federal Claims. (Mot. 4–5.) As to the remaining claim, HUD argues that the 23 government has not waived sovereign immunity, which bars this action against it. 24 (Mot. 5–7.) 25 Generally, the United States can assert sovereign immunity against lawsuits or 26 consent to them. Lehman v. Nakshian, 453 U.S. 156, 160 (1981). Such consent 27
28 2 In their Opposition, Plaintiffs dismissed their FDCPA claim as to Defendant HUD. (Opp’n to Mot. (“Opp’n”), ECF No. 28.) 1 defines the jurisdiction of the court to hear an action against the federal government. 2 Baker v. United States, 817 F.2d 560, 562 (9th Cir. 1987). Congress can, of course, 3 waive sovereign immunity. See, e.g., Loeffler v. Frank, 486 U.S. 549, 554 (1988); 4 Blue v. Widnall, 162 F.3d 541, 544 (9th Cir. 1998). However, such a waiver “must be 5 unequivocally expressed in statutory text.” Lane v. Pena, 518 U.S. 187, 192 (1996). 6 A. Plaintiffs’ Contract Claims 7 Whether the Court has jurisdiction over Plaintiffs’ claims sounding in contract, 8 requires analysis of “the two principal federal statutes authorizing suit against the 9 United States: the Tucker Act and the Little Tucker Act.” McGuire v. United States, 10 550 F.3d 903, 910 (9th Cir. 2008). The Tucker Act, 28 U.S.C. § 1491(a)(1), 11 “provide[s] for jurisdiction solely in the Court of Federal Claims for Tucker Act 12 claims seeking more than $10,000 in damages,” and the Little Tucker Act, 28 U.S.C. 13 § 1346(a)(2), provides “concurrent district court jurisdiction over claims seeking 14 $10,000 or less.” McGuire, 550 F.3d at 910–11. 15 Plaintiffs’ claims for breach of contract, breach of good faith and fair dealing, 16 and declaratory or injunctive relief fall within the scope of the Tucker Act as they seek 17 more than $10,000 in damages and are founded “upon [an] express or implied contract 18 with the United States.” 28 U.S.C. § 1491(a)(1). 19 Plaintiffs disingenuously argue that the breach of contract claim seeks only 20 equitable relief and not monetary damages. (Opp’n 8–9.) Requesting the Court to 21 prevent enforcement of a contract in which HUD is attempting to assess “over 22 $36,000” is, in fact, a claim seeking more than $10,000 in damages. Plaintiffs’ First 23 Amended Complaint similarly makes this clear as Plaintiffs allege HUD’s assessment 24 of interest charges, penalties, and administrative costs are all in breach of the contract 25 and should not be assessed. (FAC ¶¶ 109, 110, 117). Plaintiffs’ attempt to 26 characterize their breach of contract claim as a claim that seeks no damages defies the 27 very essence of a contract claim: damages. St. Paul Fire & Marine Ins. Co. v. Am. 28 Dynasty Surplus Lines Ins. Co., 101 Cal. App. 4th 1038, 1060 (2002) (“An essential 1 element of a claim for breach of contract are damages resulting from the breach.”) 2 (emphasis omitted). 3 Furthermore, to the extent Plaintiffs’ other contract claims assert a promissory 4 estoppel theory or seek injunctive relief, even without seeking damages, those claims 5 similarly fall within the Tucker Act. See N. Side Lumber Co. v. Block, 753 F.2d 1482, 6 1486 (9th Cir. 1985) (finding an impracticability claim that was not seeking damages 7 as “concerned solely with the rights created within the contractual relationship” and 8 therefore within the Tucker Act and “subject to its restrictions on relief”); Jablon v. 9 United States, 657 F.2d 1064, 1070 (9th Cir. 1981) (analyzing claims under the Tucker 10 Act and holding that “the government has not waived its sovereign immunity with 11 regard to a promissory estoppel cause of action”). In fact, Plaintiffs concede that their 12 declaratory and injunctive relief claim “arises from the contract.” (Opp’n 10.) 13 Accordingly, Plaintiffs have failed to meet their burden in proving that the 14 Court has jurisdiction over its contracts claims. The Court therefore DISMISSES 15 WITH PREJUDICE Plaintiffs’ second, third, and fifth claims against Defendant 16 HUD. 17 B. Plaintiffs’ Remaining Claim 18 Plaintiffs’ only remaining claim against Defendant HUD is an alleged violation 19 of the California Business and Professions Code. The United States has not waived 20 “its sovereign immunity to be sued under California’s Unfair Competition Law.” 21 A.C.L. Computers & Software, Inc. v. United States, No. 16-CV-01485-SK, 2017 WL 22 6060267, at *4 (N.D. Cal. Mar. 13, 2017), aff’d, 727 F. App’x 376 (9th Cir. 2018); see 23 Bonner v. Med. Bd. of California, No. 2:17-CV-00445-KJM-DB, 2018 WL 4699996, 24 at *5 (E.D. Cal. Sept. 30, 2018). 25 The Court therefore DISMISSES WITH PREJUDICE Plaintiffs’ seventh 26 claim as to Defendant HUD. 27 Furthermore, this matter was removed pursuant to 28 U.S.C. § 1442(a)(1), 28 which authorizes the removal of civil actions against United States or its agencies. 1 (Notice of Removal ¶ 3, ECF No. 1.) Without HUD in this action, the Court lacks 2 jurisdiction on this basis. Furthermore, as the remaining Defendants are non-diverse 3 to Plaintiffs, this case lacks diversity jurisdiction or subject matter jurisdiction on any 4 other basis. (FAC ¶ 27.) Accordingly, the Court DISMISSES as moot, Defendant 5 Nationstar Mortgage LLC’s Motion for Judgment on the Pleadings (ECF No. 49) and 6 REMANDS this action. 7 V. CONCLUSION 8 For the reasons discussed above, the Court GRANTS Defendant’s Motion to 9 Dismiss. (ECF No. 22.) As no claims remain against Defendant HUD, the Court 10 hereby DISMISSES Defendant U.S. Department of Housing and Urban 11 Development WITH PREJUDICE. 12 Furthermore, as the Court lacks subject matter jurisdiction over the matter, the 13 Court DISMISSES as moot, Defendant Nationstar Mortgage LLC’s Motion for 14 Judgment on the Pleadings (ECF No. 49) and REMANDS this action to 111 N. Hill 15 Street, Los Angeles, CA 90012. 16 17 IT IS SO ORDERED. 18 19 June 22, 2020 20 ____________________________________ OTIS D. WRIGHT, II 21 UNITED STATES DISTRICT JUDGE 22 23 24 25 26 27 28