(PS) Mehl v. Green

• Court: District Court, E.D. California
• Decided: June 6, 2023
• Docket: 2:21-cv-01861
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 GAVIN MEHL, et al., Case No. 2:21-cv-01861-TLN-JDP (PS) 12 Plaintiffs,

13 v. FINDINGS AND RECOMMENDATIONS 14 WARREN GREEN, et al., 15 Defendants. 16 17 18 19 20 Plaintiffs, proceeding without counsel, allege that defendants Wilmington Trust, N.A., PS 21 Funding, Inc (referred to as PeerStreet), Snell & Wilmer, L.L.P., and Andrew B. Still violated 22 plaintiffs’ rights under the Fair Debt Collections Practices Act, the Fair Credit Reporting Act, and 23 the California Rosenthal Act. ECF No. 43. This court previously dismissed plaintiffs’ first 24 amended complaint with leave to amend for failure to state a claim. ECF Nos. 16 & 40. 25 Defendants now move to dismiss plaintiffs’ second amended complaint. ECF No. 44. The 26 second amended complaint similarly fails to state a claim, and I will recommend that it be 27 dismissed without leave to amend. See ECF Nos. 38 & 40. 28 1 Background 2 A. Plaintiffs’ Allegations 3 Plaintiffs allege that plaintiff Mehl rented a property located at 1400 36th Street, 4 Sacramento, California, in approximately June 2020. ECF No. 43 at 4. After Mehl allegedly 5 defaulted on his rent, the resulting debt was assigned or transferred to defendant Wilmington 6 Trust. Id. Plaintiffs allege that defendant PeerStreet is an agent of Wilmington, whose principal 7 business is debt collection, and that both PeerStreet and Wilmington retained defendant Still—an 8 attorney for defendant Snell & Wilmer—to represent them in collecting Mehl’s debt. Id. They 9 allege that “California TD Specialists, as agents for PeerStreet and Wilmington, recorded a Notice 10 of Trustee Sale against the Property on June 8, 2020”—the same month that Mehl allegedly 11 began renting the property. Id. The Notice of Trustee Sale indicates that Ikon Homes, Inc., had 12 been the trustor and that PS Funding, Inc., was the beneficiary of the sale. ECF No. 48 at 5-6.1 13 Plaintiffs do not identify the entity that transacted with Mehl to rent the property or the owner of 14 the property at the time he began renting it. ECF No. 43 at 4. 15 At an unspecified later date, defendants Snell & Wilmer—on behalf of PeerStreet and 16 Wilmington—allegedly filed a complaint for unlawful detainer against Mehl in state court (“First 17 State Complaint,” Sacramento Superior Court Case No. 20UD01465), seeking “possession, 18 statutory damages, and damages equal to the Property’s reasonable rental value of $162.66 per 19 day.” Id. at 5. Plaintiffs allege that, although defendants “PeerStreet and Wilmington agreed to 20 settle in Mehl’s favor and dismiss” the complaint, defendants nevertheless “reported Mehl to the 21 unlawful detainer registries.” Id. Plaintiffs allege that Mehl subsequently attempted to secure a 22 loan to help him pay rent on a rental property but was informed that he did not qualify for 23 financial assistance because of the unlawful detainer action. Id. Mehl then allegedly received a 24 letter from defendants directing him to surrender the property; plaintiffs characterize this letter as 25 an attempt “to collect a debt.” Id. at 6. Defendants then initiated a second suit in state court 26 1 Plaintiffs ask the court to take judicial notice of this document. ECF No. 48. This is 27 unnecessary since the document is referenced in the second amended complaint and submitted by plaintiffs. For the purposes of the instant motion, it is appropriate to consider the contents of this 28 document as though it had been attached to the complaint. 1 against plaintiffs Mehl and Cupp, along with other alleged occupants of the property, seeking 2 “statutory damages of up to $600, possession of the Property, and damages equal to the 3 reasonable rental value of $162.66 per day”—amounting to a total of $59,208.24. Id. at 6 4 (referring to the “second state complaint,” Case No. 21UD01125).2 5 Plaintiffs allege that Mehl notified PeerStreet and Wilmington that he disputed the debt, 6 and that those defendants were therefore “obligated to cease any further collection activity until 7 the debt was validated.” Id. They allege, “[o]n information and belief,” that “defendants 8 Wilmington and PeerStreet . . . transmitted information concerning a particular debt owed by 9 Plaintiff(s) to the national credit reporting agencies.” Id. at 14. Plaintiffs allege that on October 10 7, 2021, they “each individually notified LexisNexis, Experian, TransUnion, Equifax, and Innovis 11 in writing that [their] credit reports reflected inaccurate information as reported to the unlawful 12 detainer registries.” Id. at 8. Finally, they allege that, “on information and belief, each of the 13 CRAs notified PeerStreet and Wilmington of the Plaintiffs’ dispute.” Id. 14 Based on these allegations, plaintiffs claim that each defendant violated the Fair Debt 15 Collection Practices Act (“FDCPA”), the Fair Credit Reporting Act (“FCRA”), and California’s 16 Rosenthal Act (“Rosenthal Act”). Id. at 10-20. 17 B. State Court Cases 18 Defendants argue that plaintiffs are collaterally estopped from bringing any claims based 19 on the allegations that (1) “Mehl rented the Property” at issue “for personal and household use” or 20 that (2) “Mehl defaulted on his rent for the Property.” ECF No. 44 at 25 (quoting ECF No. 43 at 21 4). Defendants provide court records from the underlying litigation, including filings from both 22 the first and second state court actions and an order granting their motion for summary judgment 23 against Mehl and Cupp. Id. (citing ECF No. 44-1 at 79-84).3 I recount the relevant findings here 24 and address defendants’ arguments for collateral estoppel in the discussion below.

25 2 Beyond alleging that Cupp was named in the second state complaint, the second amended complaint provides few factual allegations regarding Cupp’s connection to the property, 26 to Mehl, or to defendants. 27 3 Defendants ask the court to take judicial notice of state court records and documents related to the underlying action, including a state court order granting summary judgment in favor 28 of defendants in an unlawful detainer action against plaintiffs. ECF No. 44-1. Since these 1 On October 28, 2020, defendant Wilmington filed a complaint for unlawful detainer 2 against Ikon Homes—the prior owner of the proper—and its occupants, including Mehl and 3 several Doe defendants. ECF No. 44-1 at 6-9. This complaint corresponds with the complaint 4 referred to by plaintiffs as the “first state complaint,” Case No. 20UD01125. It reflects that 5 Wilmington believed the occupants to have been renting the property from Ikon and that any such 6 rental agreement had been terminated by Wilmington’s acquisition of the property at the June 7 2020 foreclosure sale. See id. at 8. On April 26, 2021, Mehl filed a prejudgment claim of right to 8 possession, asserting that he had “an oral or written rental agreement with the former owner who 9 lost the property to foreclosure.” Id. at 19-20. Wilmington thereafter voluntarily dismissed the 10 first state complaint and filed the second state complaint, Case No. 21UD01125, alleging a claim 11 of forcible detainer against the occupants of the property, including Mehl and Cupp. Id. at 29-32. 12 In October 2021, the state court granted Wilmington’s motion for summary judgment and 13 entered judgment in Case No. 21UD01125 against Mehl, Cupp, and several others. Id. at 79-92. 14 The court found the evidence sufficient to grant summary judgment against defendants Mehl and 15 Cupp on a claim of forcible detainer, which requires, inter alia, a showing that “defendant[s], in 16 the night-time or during the plaintiff-occupant’s absence, unlawfully entered on the property.” Id. 17 at 81-82 (citing Cal. Civ. Proc. Code 1160(a)(2)). In particular, the court found no genuine 18 dispute as to the following material facts: defendant Wilmington had acquired title of the property 19 at 1400 36th Street, Sacramento, California, from Ikon Homes on July 2, 2020; at the time of 20 purchase, the property was vacant, and Ikon “did not have any agreements, oral or written, to 21 lease the Property prior to the trustee’s sale”; on August 5, 2020, “Mehl . . . entered upon the 22 Property without [Wilmington’s] knowledge or consent.” Id. at 80-81. 23 Legal Standards 24 “Dismissal under Rule 12(b)(6) is proper when the complaint either (1) lacks a cognizable 25 legal theory or (2) fails to allege sufficient facts to support a cognizable legal theory.” Somers v. 26 Apple, Inc., 729 F.3d 953, 959 (9th Cir. 2013). Rule 8 of the Federal Rules of Civil Procedure 27 documents are all court filings or public records, they are proper subjects of judicial notice. Fed. 28 R. Evid. 201; Lee v. City of Los Angeles, 250 F.3d 668, 688-90 (9th Cir. 2001). 1 requires that a complaint contain “a short and plain statement of the claim showing that the 2 pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). “To survive a motion to dismiss, a 3 complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is 4 plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. 5 Twombly, 550 U.S. 544, 570 (2007)). A claim has facial plausibility when a plaintiff “pleads 6 factual content that allows the court to draw the reasonable inference that the defendant is liable 7 for the misconduct alleged.” Iqbal, 556 U.S. at 678. 8 In assessing the sufficiency of the pleadings, “courts must consider the complaint in its 9 entirety, as well as other sources courts ordinarily examine when ruling on Rule 12(b)(6) motions 10 to dismiss, in particular, documents incorporated into the complaint by reference, and matters of 11 which a court may take judicial notice.” Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 12 308, 322 (2007). The court is to “accept all factual allegations in the complaint as true and 13 construe the pleadings in the light most favorable to the nonmoving party.” Outdoor Media Grp., 14 Inc. v. City of Beaumont, 506 F.3d 895, 899-900 (9th Cir. 2007). However, “the tenet that a court 15 must accept as true all of the allegations contained in a complaint is inapplicable to legal 16 conclusions. Threadbare recitals of the elements of a cause of action, supported by mere 17 conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678. “While legal conclusions can 18 provide the complaint’s framework, they must be supported by factual allegations.” Id. at 679. 19 Those facts must be sufficient to push the claims “across the line from conceivable to plausible.” 20 Id. at 683. Ultimately, the allegations must “give the defendant fair notice of what the . . . claim 21 is and the grounds upon which it rests.” Twombly, 550 U.S. at 555 (internal quotation marks and 22 citation omitted). 23 Discussion 24 The second amended complaint does not state a claim under the FDCPA or FCRA. These 25 claims should be dismissed with prejudice, and the court should decline to exercise supplemental 26 jurisdiction over the remaining state law claim. 27 28 1 A. Fair Debt Collection Practices Act 2 Plaintiffs allege that defendants committed several violations of the FDCPA, including by 3 making threats to undertake unlawful debt-collection actions, “falsely impl[ying] that Plaintiffs 4 committed the crime of trespass,” and “fail[ing] to cease collection of the debt” upon plaintiffs’ 5 request that it be verified. ECF No. 43 at 10-11. Defendants argue that plaintiffs’ allegations are 6 insufficient to state a claim under the FDCPA because plaintiffs cannot “establish that a debt is 7 owed, that there was a transaction between the parties, or that Defendants are debt collectors as 8 defined under the FDCPA.” ECF No. 44 at 15. 9 The FDCPA was enacted “to eliminate abusive debt collection practices by debt 10 collectors, to insure that those debt collectors who refrain from using abusive debt collection 11 practices are not competitively disadvantaged, and to promote consistent State action to protect 12 consumers against debt collection abuses.” 15 U.S.C. § 1692(e). To effectuate this purpose, the 13 FDCPA prohibits a “debt collector” from making false or misleading representations and from 14 engaging in certain abusive and unfair practices. See Schlegel v. Wells Fargo Bank, N.A., 720 15 F.3d 1204, 1207-08 (9th Cir. 2013). “To establish a claim under the FDCPA, a plaintiff must 16 show that: (1) she is a consumer within the meaning of [§ 1692a(3)]; (2) the debt arises out of a 17 transaction entered into for personal purposes; (3) the defendant is a debt collector within the 18 meaning of [§ 1692a(6)]; and (4) the defendant violated one of the provisions of the FDCPA.” 19 Alonso v. Blackstone Fin. Grp. LLC, 962 F. Supp. 2d 1188, 1193-94 (E.D. Cal. 2013) (quoting 20 Laugenour v. Northland Grp. Inc., No. 2:12-cv-02995-GEB-DAD (PS), 2013 WL 3745727, at *2 21 (E.D. Cal. July 15, 2013)). 22 Defendants argue that plaintiffs have not sufficiently alleged that defendants are debt 23 collectors, and they argue that plaintiffs cannot establish that they are consumers or that they 24 owed any debt as those terms are defined under the FDCPA. ECF No. 44 at 15. Plaintiffs are 25 collaterally estopped from alleging the existence of a debt based on past-due rent—the sole 26 potentially sufficient allegation in the second amended complaint.4 27 4 In my September 2022 findings and recommendations, I found that plaintiffs’ first 28 amended complaint failed to adequately allege that defendants are debt collectors under the 1 “Collateral estoppel applies to a question, issue, or fact when four conditions are met: 2 (1) the issue at stake was identical in both proceedings; (2) the issue was actually litigated and 3 decided in the prior proceedings; (3) there was a full and fair opportunity to litigate the issue; and 4 (4) the issue was necessary to decide the merits.” Oyeniran v. Holder, 672 F.3d 800, 806 (9th 5 Cir. 2012). Federal courts “are required to give state court judgments the preclusive effect they 6 would be given by another court of that state.” Brodheim v. Cry, 584 F.3d 1262, 1268 (9th Cir. 7 2009). “The potential of an unlawful detainer judgment to collaterally estop subsequent litigation 8 has been recognized by the California Supreme Court.” McAlister v. Essex Prop. Tr., 504 F. 9 Supp. 2d 903, 907 (C.D. Cal. 2007) (citing Vella v. Hudgins, 20 Cal.3d 251, 256 (1977)); see also 10 Phillips v. Archstone Simi Valley LLC, CV-15-5559 DMG (PLAx), 2017 WL 11683680, at *9 11 (C.D. Cal. Jan. 13, 2017) (holding that judgment in state unlawful detainer action collaterally 12 estopped subsequent litigation as to whether a debt for back rent existed under the FDCPA). 13 The FDCPA defines “debt” as “any obligation or alleged obligation of a consumer to pay 14 money arising out of a transaction in which the money, property, insurance, or services which are 15 the subject of the transaction are primarily for personal, family, or household purposes, whether 16 or not such obligation has been reduced to judgment.” 15 U.S.C. § 1692a(5). Back rent 17 constitutes a debt under the FDCPA because it “is an obligation that arises only from the tenant’s 18 failure to pay the amounts due under the contractual lease transaction.” Dickman v. Kimball, 19 Tirey & St. John, LLP, 982 F. Supp. 2d 1157, 1164 (S.D. Cal. 2013) (quoting Romea v. Heiberger 20 & Assoc., 163 F.3d 111, 115 (2d Cir. 1998)). However, because “‘a transaction under the 21 FDCPA must involve some kind of business dealing or other consensual obligation,’ . . . the 22

23 FDCPA. See ECF No. 38 at 6-7 (explaining that “[d]efendants’ attempts to collect a single debt, however, do not make them debt collectors”) (citing Alexander v. Wells Fargo Bank, N.A., 24 No. C15-459RAJ, 2015 WL 5123922, at *5 (W.D. Wash. Sept. 1, 2015) (dismissing the FDCPA claims because the complaint did not allege that defendants’ “principal business is to collect debts 25 or that they regularly do so on behalf of others”)). Plaintiffs addressed that insufficiency by adding the allegations that defendant Wilmington “primarily engages in debt collection,” that 26 “PeerStreet’s principal business is debt collection,” and that the attorney defendants’ “principal 27 business is the collection of debt obligations.” ECF No. 43 at 4. Although such conclusory allegations are not a substantial improvement, it is unnecessary to evaluate their sufficiency in 28 light of their failure to allege the existence of a debt. 1 obligation to pay for criminal or tortious actions does not constitute a ‘debt.’” Fleming v. 2 Pickard, 581 F.3d 922, 925 (9th Cir. 2009) (quoting Turner v. Cook, 362 F.3d 1219, 1225 (9th 3 Cir. 2004)). 4 Defendant Wilmington brought a forcible detainer action against plaintiffs in California 5 state court and received a judgment on the merits. See ECF No. 44-1 at 79-84. The order 6 granting summary judgment reflects that the court heard oral argument and considered briefs filed 7 in support of and in opposition to the motion. Id. at 80. Thus, the parties had a full and fair 8 opportunity to litigate the issue. The court granted summary judgment on a claim of forcible 9 detainer, which requires, inter alia, a showing that “defendant[s Mehl and Cupp], in the night- 10 time or during the plaintiff-occupant[ Wilmington]’s absence, unlawfully entered on the 11 property,” and that, after Wilmington’s demand for surrender of the property, the “refuse[d] to 12 surrender possession.” Id. at 81-82 (citing Cal. Civ. Proc. Code 1160(a)(2); Moldovan v. Fischer, 13 149 Cal. App. 2d 600, 607 (1957)). The court found that the property was vacant when 14 Wilmington purchased it and that neither Wilmington nor the prior owner had “any agreements, 15 oral or written, to lease the Property prior to the trustee’s sale.” Id. at 80. These findings were 16 necessary to decide the merits of the claim, and they foreclose any finding that plaintiffs accrued 17 a debt from a consensual transaction. Accordingly, plaintiffs can allege only that defendants 18 prosecuted a forcible detainer action for (1) recovery of the property and (2) payment of damages; 19 neither of these issues constitutes a debt under the FDCPA. See Arvizu v. GMAC Mortgage, LLC, 20 No. 1:10-cv-00990-OWW-JLT, 2011 WL 1087157, at *3-4 (E.D. Cal. Mar. 23, 2011) (rejecting 21 claims that filing an unlawful detainer action supported cognizable claims under the FDCPA); 22 McFadden v. Deutsche Bank Nat. Tr. Co., 2:10-CV-03004 JAM, 2011 WL 3606797, at *11 (E.D. 23 Cal. Aug. 16, 2011) (dismissing an FCPDA claim with prejudice because the purported debt arose 24 from an “unlawful detainer action . . . [that] simply sought possession of the already re-sold 25 property, not the collection of any debt”). Thus, plaintiff’s FDCPA claims should be dismissed 26 with prejudice. 27 28 1 B. Fair Credit Reporting Act 2 Plaintiffs claim that defendants violated the FCRA by failing to comply with 15 U.S.C. 3 § 1681s-2(b), which imposes duties on “furnishers” of credit information. ECF No. 43 at 15-17. 4 The FCRA was enacted “to ensure fair and accurate credit reporting, promote efficiency 5 in the banking system, and protect consumer privacy.” Gorman v. Wolpoff & Abramson, LLP, 6 584 F.3d 1147, 1153 (9th Cir. 2009). To ensure the accuracy of consumer credit reports, the 7 FCRA imposes certain duties on sources, known as “furnishers,” that provide information to 8 credit reporting agencies (“CRAs”). Id. Under 15 U.S.C. § 1681s-2(b), a furnisher of 9 information must, after receiving notice from a CRA of a dispute regarding furnished 10 information, conduct an investigation; review all relevant information provided by the CRA; and 11 report its findings to the CRA. The FCRA provides a private right of action against furnishers 12 that fail to comply with the duties established in 15 U.S.C. § 1681a-2(b). Nelson v. Chase 13 Manhattan Mortg. Corp., 282 F.3d 1057, 1059-60 (9th Cir. 2002). A claim under § 1681s-2(b) 14 requires a plaintiff to plead: “(1) a credit reporting inaccuracy existed on plaintiff’s credit report; 15 (2) plaintiff notified the [CRA] that plaintiff disputed the reporting as inaccurate; (3) the CRA 16 notified the furnisher of the alleged inaccurate information of the dispute; and (4) the furnisher 17 failed to investigate the inaccuracies or further failed to comply with the requirements in [§] 18 1681s-2(b)(1)(A)-(E).” Moses v. Experian Info. Sols., Inc., No. 15-cv-05548-BLF, 2016 WL 19 3670068, at *2 (N.D. Cal. 2016). 20 Defendants argue that the second amended complaint fails to adequately allege that they 21 furnished information to a CRA, that a CRA provided them with notice of a dispute, or that any 22 credit reporting inaccuracy existed on plaintiff’s credit report. ECF No. 44 at 19-20. Although 23 the FCRA does not define the term “furnisher,” courts have defined it as an entity that “transmits 24 information concerning a particular debt owed by a particular consumer” to a CRA. See Heras v. 25 Nelnet, Inc., 2017 WL 4586334, at *5 (C.D. Cal. Apr. 28, 2017). 26 In the September 2022 findings and recommendations, I found that plaintiffs had failed to 27 allege that a CRA provided defendants with a notice of a dispute, which is required to trigger the 28 statutory duties under § 1681s-2(b). ECF No. 38 at 7 (citing Gorman, 584 F.3d at 1154 (stating 1 “duties [under § 1681s-2(b)] arise only after the furnisher receives notice of dispute from a [credit 2 reporting agency]; notice of a dispute received directly from the consumer does not trigger the 3 furnishers’ duties under subsection (b)”)). In their second amended complaint, plaintiffs allege 4 “[o]n information and belief,” that “defendants Wilmington and PeerStreet . . . transmitted 5 information concerning a particular debt owed by Plaintiff(s) to the national [CRAs].” ECF 6 No. 43 at 14. They allege that, on October 7, 2021, they “each individually notified LexisNexis, 7 Experian, TransUnion, Equifax, and Innovis in writing that the Plaintiffs’ credit reports reflected 8 inaccurate information as reported to the unlawful detainer registries.” Id. at 8. Finally, they 9 allege that “on information and belief, each of the CRAs notified PeerStreet and Wilmington of 10 the Plaintiffs’ dispute.” Id. However, plaintiffs fail to provide factual allegations regarding the 11 content or nature of the “particular debt owed,” the dates or content of any allegedly inaccurate 12 furnishing of information, or any factual basis on which to credit their allegations that defendants 13 received notice of a dispute from any CRAs. Such conclusory allegations fail to provide adequate 14 notice to defendants of the basis of their claims. 15 Plaintiffs’ opposition clarifies the nature of the disputed debt by contending that “Mehl’s 16 credit report inaccurately showed that the unlawful detainer and forcible detainer actions resulted 17 in judgments against him.” ECF No. 47 at 13. However, even if this had been sufficiently 18 alleged, it is barred by collateral estoppel because the state court forcible detainer action resulted 19 in judgments against both Mehl and Cupp. See ECF No. 44-1 at 79-93; supra, pages 7-8. Since 20 plaintiffs cannot allege the existence of a bona fide dispute, their claims should be dismissed 21 without leave to amend. See Gorman, 584 F.3d at 1163 (holding that only “a bona fide dispute, a 22 dispute that could materially alter how the reported debt is understood . . . gives rise to a 23 furnisher’s liability under § 1681s-2(b)”); Donovan v. Bank of Am., 574 F. Supp. 2d 192, 206 (D. 24 Me. 2008) (holding that a claim under § 1681s-2(b) requires the plaintiff to identify “information 25 that a reasonable investigation would have uncovered . . . that would have cast doubt” on the 26 furnisher’s report to the CRA). 27 28 1 C. State Law Claims 2 Plaintiffs’ remaining claim is for an alleged violation of California’s Rosenthal Fair Debt 3 Collection Practices Act. ECF No. 43 at 13. The complaint does not establish diversity of the 4 parties, and plaintiffs have yet to allege a cognizable federal claim. See 28 U.S.C. §§ 1331, 1332; 5 see also Bautista v. Pan Am. World Airlines, Inc., 828 F.2d 546, 552 (9th Cir. 1987) (holding that 6 the complaint must specifically allege diverse citizenship of all parties to invoke diversity 7 jurisdiction). Consequently, there is no basis for exercising supplemental jurisdiction over 8 plaintiffs’ state law claim, and it too should be dismissed. See Carnegie-Mellon Univ. v. Cohill, 9 484 U.S. 343, 350 n.7. (1988) (“[I]n the usual case in which all federal-law claims are eliminated 10 before trial, the balance of factors to be considered under the pendent jurisdiction doctrine— 11 judicial economy, convenience, fairness, and comity—will point toward declining to exercise 12 jurisdiction over the remaining state-law claims.”); United Mine Workers of Am. v. Gibbs, 383 13 U.S. 715, 726 (1966) (“Needless decisions of state law should be avoided both as a matter of 14 comity and to promote justice between the parties, by procuring for them a surer-footed reading 15 of the applicable law.”). Accordingly, plaintiffs’ state law claim should also be dismissed. 16 Conclusion 17 Plaintiffs have had multiple opportunities to correct the deficiencies in their complaint, 18 and there is no indication that any conceivable amendment could cure such deficiencies. 19 Moreover, state court records show that many of plaintiffs’ allegations are materially false. In 20 light of their pro se status, I will refrain from recommending sanctions. But I will recommend 21 that their claims be dismissed with prejudice. California Architectural Bldg. Prod. v. Franciscan 22 Ceramics, 818 F.2d 1466, 1472 (9th Cir. 1988) (“Valid reasons for denying leave to amend 23 include undue delay, bad faith, prejudice, and futility.”). 24 Accordingly, it is hereby RECOMMENDED that: 25 1. Defendants’ motion to dismiss, ECF No. 44, be granted. 26 2. Plaintiffs’ second amended complaint, ECF No. 43, be dismissed without leave to 27 amend. 28 3. The Clerk of the Court be directed to close the case. 1 These findings and recommendations are submitted to the United States District Judge 2 | assigned to the case, pursuant to the provisions of 28 U.S.C. § 636(b)(1). Within fourteen days 3 | after being served with these findings and recommendations, any party may file written 4 | objections with the court and serve a copy on all parties. Such a document should be captioned 5 | “Objections to Magistrate Judge’s Findings and Recommendations.” Any response to the 6 | objections shall be served and filed within fourteen days after service of the objections. The 7 | parties are advised that failure to file objections within the specified time may waive the right to 8 || appeal the District Court’s order. Turner v. Duncan, 158 F.3d 449, 455 (9th Cir. 1998); Martinez 9 | v. Vist, 951 F.2d 1153 (9th Cir. 1991). 10 Wl IT IS SO ORDERED. 12 ( 4 ie — Dated: _ June 5, 2023 q-—— 13 JEREMY D. PETERSON 4 UNITED STATES MAGISTRATE JUDGE

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