1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 DEANNA-KATHLEEN YATES, and Case No. 1:23-cv-00155-JLT- EPG RONNIE YATES, 12 ORDER DISMISSING SHERMAN ACT Plaintiffs, CLAIM WITHOUT LEAVE TO AMEND; 13 DECLINING SUPPLEMENTAL v. JURISDICTION OVER REMAINING 14 CLAIMS; DIRECTING CLERK OF COURT THE MONEY SOURCE, INC., et al., TO CLOSE CASE 15 Defendants. (Doc. 17) 16 17 Deanna-Kathleen Yates and Ronnie Yates, proceeding pro se, initiated this action against 18 Defendants The Money Source, Inc., et al., asserting claims for quiet title to their real property, 19 accounting, and restraint of trade. (Doc. 17 at 2.) Plaintiffs contend that Mrs. Yates issued “bonds 20 of discharge” to the “holder” of their mortgage, payment which Defendants have allegedly 21 refused to accept. (See id.) 22 In their complaint, Plaintiffs name ten defendants, a list comprised of several 23 mortgage/lending business and various government actors: The Money Source, Inc.; Midland 24 Mortgage; Fannie Mae, (named “Fannie Mae REMIC Trust 2017-21” and “Fannie Mae, Mail 25 Draw Assignments” in the complaint); Cenlar FSB; Mortgage Electronic Registration Systems, 26 Inc.; Calaveras County Clerk Recorder; Frank La Salla, President and Chairman of the 27 Depository Trust & Clearing Corporation; Janet Yellen, Secretary of the United States 28 Department of Treasury; and Francisco Alicea, Secretary of Treasury of Puerto Rico. (Id. at 5-8.) 1 I. Facts and Procedural Background 2 On or about January 16, 2015, Plaintiffs purchased the real property located at 4628 South 3 Burson Road, Valley Springs, CA 95252. (Doc. 14-1, Ex. 2.) To cover the purchase of the home, 4 Plaintiffs obtained a loan in the amount of $290,007.00 from The Money Source, Inc., DBA 5 Endeavor America Loan Services, secured against the real property by a Deed of Trust (“First 6 DOT”) in favor of Mortgage Electronic Registrations System, Inc. (“MERS”). (Id., Exs. 1, 2.) 7 On or about February 10, 2017, Plaintiffs refinanced the real property by way of a loan in 8 the amount of $281,389.00 from The Money Source, Inc. (Id., Ex. 1.) This loan was also secured 9 against the real property in a second Deed of Trust (“Second DOT”). (Id., Ex. 2.) In 2022, 10 Plaintiffs were notified that the interest in this refinanced loan was to be transferred from The 11 Money Source, Inc. to Midland Mortgage, a division of MidFirst Bank. (Id., Ex. 4.) On or about 12 March 23, 2023, the beneficial interest under the Second DOT was assigned from MERS, as 13 beneficiary and nominee for The Money Source, Inc., to Midland Mortgage. (See Doc. 26, Ex. E 14 at 1.) 15 On February 1, 2023, Mrs. Yates filed a complaint attempting to avoid a foreclosure on 16 her real property by alleging “bonds of discharge” were issued to the “holder” of the loan. (See 17 Doc. 1 at 6.) According to her, “[p]laintiff/RPII tendered bonds for discharge. It is presumed that 18 the alleged mortgage has been discharged.” (Id. at 12.) She considered these “bonds” to constitute 19 a valid tender of payment under the Uniform Commercial Code. (See id. at 9-10.) Mrs. Yates also 20 brings a quiet title claim, seeking to clear her home of the second trust deed loan, and an order 21 compelling Defendants to produce a final accounting statement reflecting the “discharge bonds.” 22 (Id. at 2.) 23 Defendants Cenlar FSB, Calaveras County Clerk Recorder, Midland Mortgage, and 24 Fannie Mae have all filed motions to dismiss (see Docs. 24, 29, 32, 49), while Defendant MERS 25 filed a response disclaiming any interest in the property in question. (See Doc. 23.) On March 14, 26 2023, the Court ordered Mrs. Yates to show cause why her claims should not be dismissed for 27 lack of subject matter jurisdiction. (See Doc. 16.) On March 17, 2023, she responded with an 28 amended complaint (“FAC”) that joined her husband (Ronnie Yates) as a plaintiff, added a third 1 claim (Restraint on Trade), and joined three defendants (Frank La Salla, Janet Yellen, and 2 Francisco Alicea). (See Doc. 17.) On April 6, 2023, the Court dismissed Defendant Cenlar FSB 3 after Plaintiffs stipulated to a voluntary dismissal (see Doc. 28), and on April 19, 2023, Defendant 4 Cenlar FSB withdrew their motion to dismiss. (Doc. 34; see Doc. 29.) Plaintiffs did not file an 5 opposition to any of the remaining motions to dismiss and the time to do so has expired. See 6 Local Rule 230(c). 7 The Court finds the matter is suitable for decision without oral argument pursuant to Local 8 Rule 230(g). For the reasons stated below, Defendant Fannie Mae’s Federal Rule of Civil 9 Procedure 12(b)(6) motion to dismiss is GRANTED WITHOUT LEAVE TO AMEND as to 10 the only federal claim in this case, and the Court declines to exercise supplemental jurisdiction 11 over the remaining claims.1 12 II. Legal Standard 13 Under Rule 12(b)(1), a district court must dismiss a complaint if the court does not have 14 jurisdiction over it. In reviewing a “facial” jurisdictional attack, the jurisdictional challenge is 15 confined to the allegations pled in the complaint. See Wolfe v. Strankman, 392 F.3d 358, 362 (9th 16 Cir. 2004). The Defendants assert that the allegations in the complaint are insufficient “on their 17 face” to invoke federal jurisdiction. See Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th 18 Cir. 2004). To resolve this challenge, the Court assumes that the allegations in the complaint are 19 true and draws all reasonable inferences in favor of the party opposing dismissal. See Wolfe, 392 20 F.3d at 362. 21 Under Rule 12(b)(6), a district court must dismiss if a claim fails to state a claim upon 22 which relief can be granted. To survive a Rule 12(b)(6) motion to dismiss, the claimant must 23 1 On June 27, 2023, Plaintiffs filed a document entitled “Notice of Attempt at Stipulation” which appears to indicate 24 Plaintiffs’ willingness to dismiss Defendant “Fannie Mae REMIC Trust 2017-21” from this matter. (Doc. 53.) The Court could construe this as a notice of voluntary dismissal, Fed. R. Civ. P. 41(a)(1)(A)(i), though it is unclear 25 whether Plaintiffs intend to dismiss all Fannie Mae entities from the case. (See generally Doc. 53.) Assuming the filing was intended to dismiss all Fannie Mae entities, that would moot Fannie Mae’s pending motion to dismiss. 26 Regardless, it is appropriate for the Court to rule on the issues raised therein, including Fannie Mae’s challenges to the Restraint of Trade claim, because a Court may sua sponte dismiss for failure to state a claim so long as notice has 27 been provided. Seismic Reservoir 2020, Inc. v. Paulsson, 785 F.3d 330, 335 (9th Cir. 2015). Here, Fannie Mae’s motion provided ample notice that the Restraint of Trade claim could be dismissed for failure to state a claim. The 28 deadline for Plaintiff to oppose that motion expired on June 13, 2023, approximately two weeks prior to the filing of 1 allege “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. 2 Twombly, 550 U.S. 544, 570 (2007). A claim is facially plausible when the plaintiff pleads facts 3 that “allows the court to draw the reasonable inference that the defendant is liable for the 4 misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation omitted). There must 5 be “more than a sheer possibility that a defendant has acted unlawfully.” Id. Plaintiffs must 6 “nudge[] their claims across the line from conceivable to plausible” or “their complaint must be 7 dismissed.” Twombly, 550 U.S. at 570.
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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 DEANNA-KATHLEEN YATES, and Case No. 1:23-cv-00155-JLT- EPG RONNIE YATES, 12 ORDER DISMISSING SHERMAN ACT Plaintiffs, CLAIM WITHOUT LEAVE TO AMEND; 13 DECLINING SUPPLEMENTAL v. JURISDICTION OVER REMAINING 14 CLAIMS; DIRECTING CLERK OF COURT THE MONEY SOURCE, INC., et al., TO CLOSE CASE 15 Defendants. (Doc. 17) 16 17 Deanna-Kathleen Yates and Ronnie Yates, proceeding pro se, initiated this action against 18 Defendants The Money Source, Inc., et al., asserting claims for quiet title to their real property, 19 accounting, and restraint of trade. (Doc. 17 at 2.) Plaintiffs contend that Mrs. Yates issued “bonds 20 of discharge” to the “holder” of their mortgage, payment which Defendants have allegedly 21 refused to accept. (See id.) 22 In their complaint, Plaintiffs name ten defendants, a list comprised of several 23 mortgage/lending business and various government actors: The Money Source, Inc.; Midland 24 Mortgage; Fannie Mae, (named “Fannie Mae REMIC Trust 2017-21” and “Fannie Mae, Mail 25 Draw Assignments” in the complaint); Cenlar FSB; Mortgage Electronic Registration Systems, 26 Inc.; Calaveras County Clerk Recorder; Frank La Salla, President and Chairman of the 27 Depository Trust & Clearing Corporation; Janet Yellen, Secretary of the United States 28 Department of Treasury; and Francisco Alicea, Secretary of Treasury of Puerto Rico. (Id. at 5-8.) 1 I. Facts and Procedural Background 2 On or about January 16, 2015, Plaintiffs purchased the real property located at 4628 South 3 Burson Road, Valley Springs, CA 95252. (Doc. 14-1, Ex. 2.) To cover the purchase of the home, 4 Plaintiffs obtained a loan in the amount of $290,007.00 from The Money Source, Inc., DBA 5 Endeavor America Loan Services, secured against the real property by a Deed of Trust (“First 6 DOT”) in favor of Mortgage Electronic Registrations System, Inc. (“MERS”). (Id., Exs. 1, 2.) 7 On or about February 10, 2017, Plaintiffs refinanced the real property by way of a loan in 8 the amount of $281,389.00 from The Money Source, Inc. (Id., Ex. 1.) This loan was also secured 9 against the real property in a second Deed of Trust (“Second DOT”). (Id., Ex. 2.) In 2022, 10 Plaintiffs were notified that the interest in this refinanced loan was to be transferred from The 11 Money Source, Inc. to Midland Mortgage, a division of MidFirst Bank. (Id., Ex. 4.) On or about 12 March 23, 2023, the beneficial interest under the Second DOT was assigned from MERS, as 13 beneficiary and nominee for The Money Source, Inc., to Midland Mortgage. (See Doc. 26, Ex. E 14 at 1.) 15 On February 1, 2023, Mrs. Yates filed a complaint attempting to avoid a foreclosure on 16 her real property by alleging “bonds of discharge” were issued to the “holder” of the loan. (See 17 Doc. 1 at 6.) According to her, “[p]laintiff/RPII tendered bonds for discharge. It is presumed that 18 the alleged mortgage has been discharged.” (Id. at 12.) She considered these “bonds” to constitute 19 a valid tender of payment under the Uniform Commercial Code. (See id. at 9-10.) Mrs. Yates also 20 brings a quiet title claim, seeking to clear her home of the second trust deed loan, and an order 21 compelling Defendants to produce a final accounting statement reflecting the “discharge bonds.” 22 (Id. at 2.) 23 Defendants Cenlar FSB, Calaveras County Clerk Recorder, Midland Mortgage, and 24 Fannie Mae have all filed motions to dismiss (see Docs. 24, 29, 32, 49), while Defendant MERS 25 filed a response disclaiming any interest in the property in question. (See Doc. 23.) On March 14, 26 2023, the Court ordered Mrs. Yates to show cause why her claims should not be dismissed for 27 lack of subject matter jurisdiction. (See Doc. 16.) On March 17, 2023, she responded with an 28 amended complaint (“FAC”) that joined her husband (Ronnie Yates) as a plaintiff, added a third 1 claim (Restraint on Trade), and joined three defendants (Frank La Salla, Janet Yellen, and 2 Francisco Alicea). (See Doc. 17.) On April 6, 2023, the Court dismissed Defendant Cenlar FSB 3 after Plaintiffs stipulated to a voluntary dismissal (see Doc. 28), and on April 19, 2023, Defendant 4 Cenlar FSB withdrew their motion to dismiss. (Doc. 34; see Doc. 29.) Plaintiffs did not file an 5 opposition to any of the remaining motions to dismiss and the time to do so has expired. See 6 Local Rule 230(c). 7 The Court finds the matter is suitable for decision without oral argument pursuant to Local 8 Rule 230(g). For the reasons stated below, Defendant Fannie Mae’s Federal Rule of Civil 9 Procedure 12(b)(6) motion to dismiss is GRANTED WITHOUT LEAVE TO AMEND as to 10 the only federal claim in this case, and the Court declines to exercise supplemental jurisdiction 11 over the remaining claims.1 12 II. Legal Standard 13 Under Rule 12(b)(1), a district court must dismiss a complaint if the court does not have 14 jurisdiction over it. In reviewing a “facial” jurisdictional attack, the jurisdictional challenge is 15 confined to the allegations pled in the complaint. See Wolfe v. Strankman, 392 F.3d 358, 362 (9th 16 Cir. 2004). The Defendants assert that the allegations in the complaint are insufficient “on their 17 face” to invoke federal jurisdiction. See Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th 18 Cir. 2004). To resolve this challenge, the Court assumes that the allegations in the complaint are 19 true and draws all reasonable inferences in favor of the party opposing dismissal. See Wolfe, 392 20 F.3d at 362. 21 Under Rule 12(b)(6), a district court must dismiss if a claim fails to state a claim upon 22 which relief can be granted. To survive a Rule 12(b)(6) motion to dismiss, the claimant must 23 1 On June 27, 2023, Plaintiffs filed a document entitled “Notice of Attempt at Stipulation” which appears to indicate 24 Plaintiffs’ willingness to dismiss Defendant “Fannie Mae REMIC Trust 2017-21” from this matter. (Doc. 53.) The Court could construe this as a notice of voluntary dismissal, Fed. R. Civ. P. 41(a)(1)(A)(i), though it is unclear 25 whether Plaintiffs intend to dismiss all Fannie Mae entities from the case. (See generally Doc. 53.) Assuming the filing was intended to dismiss all Fannie Mae entities, that would moot Fannie Mae’s pending motion to dismiss. 26 Regardless, it is appropriate for the Court to rule on the issues raised therein, including Fannie Mae’s challenges to the Restraint of Trade claim, because a Court may sua sponte dismiss for failure to state a claim so long as notice has 27 been provided. Seismic Reservoir 2020, Inc. v. Paulsson, 785 F.3d 330, 335 (9th Cir. 2015). Here, Fannie Mae’s motion provided ample notice that the Restraint of Trade claim could be dismissed for failure to state a claim. The 28 deadline for Plaintiff to oppose that motion expired on June 13, 2023, approximately two weeks prior to the filing of 1 allege “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. 2 Twombly, 550 U.S. 544, 570 (2007). A claim is facially plausible when the plaintiff pleads facts 3 that “allows the court to draw the reasonable inference that the defendant is liable for the 4 misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation omitted). There must 5 be “more than a sheer possibility that a defendant has acted unlawfully.” Id. Plaintiffs must 6 “nudge[] their claims across the line from conceivable to plausible” or “their complaint must be 7 dismissed.” Twombly, 550 U.S. at 570. 8 The Court accepts as true all well-pleaded allegations of material fact, but the Court is not 9 required to accept as true merely conclusory allegations, allegations contradicted by exhibits 10 attached to the complaint or matters properly subject to judicial notice, unwarranted deductions of 11 fact, or unreasonable inferences. Daniels-Hall v. Nat’l Educ. Ass’n, 629 F.3d 992, 998 (9th Cir. 12 2010). In the antitrust setting, the Supreme Court noted that “[t]he need at the pleading stage for 13 allegations plausibly suggesting (not merely consistent with) agreement reflects the threshold 14 requirement of Rule 8(a)(2) that the ‘plain statement’ possesses enough heft to ‘sho[w] that the 15 pleader is entitled to relief.’” Twombly, 550 U.S. at 557. 16 III. Sherman Antitrust Act 17 Plaintiffs allege a violation of the Sherman Antitrust Act, the only federal claim advanced 18 in the complaint. However, their complaint fails to state a claim under the Sherman Act, as 19 discussed below. 20 A. Failure to State a Claim under the Sherman Act 21 Plaintiffs allege a restraint of trade claim under the Sherman Act against Defendants Frank 22 La Salla, Janet Yellen, and Francisco Alicea (and possibly the other Defendants, though 23 Plaintiffs’ complaint is unclear on that point). Plaintiffs cite to Section 1 of the Sherman Act that 24 “[e]very contract, combination in the form of trust or otherwise, or conspiracy, in restraint of 25 trade or commerce among the several States. . . is declared to be illegal.” (Doc. 17 at 12.) While 26 Plaintiffs refer to antitrust law, it appears they have a much more general impression of what 27 suffices to establish a restraint of trade claim, as they also rely upon Merriam Webster’s 28 Dictionary definition of restraint of trade. (Doc. 17 at 11.) A restraint of trade claim under the 1 Sherman Act, however, has well defined legal elements. 2 Section 1 of the Sherman Act “does not prohibit [all] unreasonable restraints of trade . . . 3 but only restraints effected by a contract, combination or conspiracy.” Copperweld Corp. v. 4 Independence Tube Corp., 467 U.S. 752, 775 (1984). To state a claim under Section 1, Plaintiffs 5 must allege “evidentiary facts which, if true, will prove: (1) a contract, combination or conspiracy 6 among two or more persons or distinct business entities; (2) by which the persons or entities 7 intended to harm or restrain trade or commerce among the several States, or with foreign nations; 8 (3) which actually injures competition.” Kendall v. Visa U.S.A., Inc., 518 F.3d 1042, 1047 (9th 9 Cir. 2008). A complaint must have “enough factual matter (taken as true) to suggest that an 10 agreement was made. . . it [] calls for enough fact[s] to raise a reasonable expectation that 11 discovery will reveal evidence of illegal agreement.” Twombly, 550 U.S. at 556. As such, “a bare 12 assertion of conspiracy will not suffice.” Id. Plaintiffs must also allege facts that would show an 13 anticompetitive impact on the market as a whole, because antitrust laws were enacted for “the 14 protection of competition.” Brown Shoe Co. v. United States, 370 U.S. 294, 320 (1962). Section 4 15 of the Clayton Act permits private causes of action for Sherman Act violations. 15 U.S.C § 15(a); 16 see also Atlantic Richfield Co. v. USA Petroleum Co., 495 U.S. 328, 334 (1990). 17 Here, Plaintiffs allege that Defendant Frank La Salla or “actors at [his] direction, in 18 respondeat superior relation” engaged in “restraint of trade” when he allegedly “held [the bonds] 19 in delay from processing to discharge the alleged debt at issue” held by MidFirst Bank. (Doc. 17 20 at 11.) Furthermore, Treasury officials allegedly collaborated on this action, as “‘[a]ll roads lead’ 21 to the United States Treasury for remedy. This is actionable in Restraint of Trade.” (Doc. 17 at 2.) 22 Absent, however, are any factual allegations explaining how the alleged delay of the “discharge 23 bonds” was the result of a “contract, combination or conspiracy” that violated the Sherman Act. 24 Copperweld, 467 U.S. at 775. The Court emphasizes that a restraint of trade claim under the 25 Sherman Act does not arise from “any activity that tends to limit a party’s ability to enter into 26 transactions,” as Plaintiffs erroneously state in their FAC. (Doc. 17 at 11.) Rather, Plaintiffs must 27 point to conduct or actions, taken as a result of an agreement or conspiracy, that undermines 28 competition in the market. See Copperweld, 467 U.S. at 775. 1 Plaintiffs provide no specific facts of an illicit conspiracy or contract between the 2 Defendants, merely alleging that as “fiscal agents of the United States [Treasury]” Defendants 3 operated in tandem. (Doc. 17 at 12.) When making allegations against multiple defendants, a 4 plaintiff must plead against each defendant; they cannot combine them all together 5 indiscriminately. See e.g., Bonnette v. Dick, 2020 WL 3412733, at *3 (E.D. Cal. Jun. 22, 2020); 6 see also Destfino v. Reiswig, 630 F.3d 952, 958 (9th Cir. 2011) (noting that plaintiff alleging 7 fraud improperly grouped multiple defendants together). Plaintiffs’ inability to particularly 8 alleged the misconduct as to each Defendant further complicates their attempt at alleging a 9 conspiracy. As mentioned, a blanket “assertion of conspiracy will not suffice.” Twombly, 550 10 U.S. at 556. Furthermore, Plaintiffs do not explain how Defendants’ alleged wrongdoing would 11 have prevented entry into a market or limited competitive activity within that market. The 12 Sherman Act is primarily concerned with avoiding monopolistic behavior within markets, not 13 bolstering an individual’s right to transact. See Brown Shoe Co., 370 U.S. at 320 (“the legislative 14 history illuminates congressional concern with the protection of competition, not competitors”). 15 To the extent that Plaintiffs are attempting to bring a claim under the Sherman Act, such a claim 16 fails because Plaintiffs’ complaint “does not answer the basic questions: who, did what, to whom 17 (or with whom), where, and when?” Kendall, 518 F.3d at 1048. 18 B. Government Action Cannot “Restrain Trade” Under the Sherman Act 19 The restraint of trade claim fails for an additional, independent reason. Plaintiffs’ assertion 20 that Defendants Janet Yellen and Francisco Alicea, both federal government officials, refused to 21 distribute “discharge bonds” from the Treasury is not the kind of conduct which would constitute 22 a Sherman Act violation. 23 Where a restraint upon trade or monopolization is the result of valid governmental action, 24 as opposed to private action, no violation of the Sherman Act can be made out. E. R.R. Presidents 25 Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 136 (1961). “Government operations may 26 only be carried out by the government, and no rival, would-be government may compete for the 27 opportunity to perform the governmental function. Governing is by its very nature a non- 28 competitive act. Thus, monopolistic practices with respects to the conduct of government do not 1 violate the Sherman Act.” Sheppard v. Lee, 929 F.2d 496, 499 (9th Cir. 1991). Notably, “acts of 2 both state governments and federal instrumentalities are immune from antitrust liability.” 3 Sakamoto v. Duty Free Shoppers, Ltd., 764 F.2d 1285, 1288 (9th Cir. 1985); see also Sea-Land 4 Serv., Inc. v. Alaska R.R., 659 F.2d 243, 246 (D.C. Cir. 1981) (“the United States, its agencies and 5 officials, remain outside the reach of the Sherman Act.”) 6 Plaintiffs assert they can pay off their mortgage with “discharge bonds” housed in the 7 Treasury, yet the Treasury itself is allegedly impeding their ability to do so. (See Doc. 17 at 11.) 8 The purported tender using “discharge bonds” or other invalid forms of payment drawn on a 9 United States Treasury Account is part of a discredited legal theory, pushed by “sovereign 10 citizens,” which has been rejected by multiple courts.2 Taking Plaintiffs’ allegations at face value, 11 Defendants Yellen’s and Alicea’s alleged refusal to permit payment via fake tender is an exercise 12 of normal governmental operations that is not subject to the Sherman Act. Furthermore, as 13 officials of the United States government, the alleged conduct of Defendants Yellen and Alicea 14 would be outside the scope of the Sherman Act. See Sea-Land Serv., Inc., 659 F.2d at 246 (“[T]he 15 United States, its agencies and officials, remain outside the reach of the Sherman Act”). Under 16 these circumstances, Plaintiffs’ restraint of trade claim as to these government officials is barred 17 under the Sherman Act. 18 C. Leave to Amend 19 Pursuant to Rule 15 of the Federal Rules of Civil Procedure, leave to amend “shall be 20 freely given when justice so requires,” bearing in mind “the underlying purpose of Rule 15 to 21 facilitate decisions on the merits, rather than on the pleadings or technicalities.” Lopez v. Smith, 22 2 See Medel v. Pennymac Fin. Servs., 2015 WL 7770857 (D. Colo. Nov. 3, 2015) (granting defendants’ motion to 23 dismiss for failure to raise a claim after rejecting plaintiff’s assertion that he paid off his mortgage via a “Payment Bond” backed by his “offset account” at the United States Treasury); Dinsmore-Thomas v. Ameriprise Fin., Inc., 24 2009 WL 2431917 (C.D. Cal. Aug. 3, 2009) (granting defendant’s motion for summary judgment after holding that plaintiff’s “Private Bond Order for Payment” allegedly secured by the Hawaiian Treasury was not a legitimate form 25 of payment); Bryant v. Washington Mut. Bank, 524 F.Supp.2d 753 (W.D. Va. 2007), aff’d, 282 Fed. Appx. 260 (4th Cir. 2008) (dismissing plaintiff’s breach of contract claim after finding that plaintiff’s “Bill of Exchange” allegedly 26 payable by the Treasury was a “worthless piece of paper” that could not satisfy her mortgage payment); see also United States v. Studley, 783 F.2d 934, 937 n.3 (9th Cir. 1986) (stating that sovereign citizen ideology is “utterly 27 meritless”); Gravatt v. United States, 100 Fed.Cl. 279 (2011) (dismissing plaintiff’s complaint for a frivolous allegation that he could recover money allegedly held by the Treasury in a “National Registry/Trust Account”); In re 28 Dominick, 2020 WL 1173505 (N.D. Cal. Feb. 20, 2020) (dismissing plaintiff’s complaint with prejudice and 1 203 F.3d 1122, 1127 (9th Cir. 2000) (en banc) (alterations, internal quotation marks omitted). 2 When dismissing a complaint for failure to state a claim, “a district court should grant leave to 3 amend even if no request to amend the pleading was made, unless it determines that the pleading 4 could not possibly be cured by the allegation of other facts.” Id. at 1130 (internal quotation marks 5 omitted); see also Steckman v. Hart Brewing, Inc., 143 F.3d 1293, 1298 (9th Cir. 1998) (stating 6 that the court need not extend the general rule that parties are allowed to amend their pleadings if 7 amendment “would be an exercise in futility”). Accordingly, leave to amend generally shall be 8 denied only if allowing amendment would unduly prejudice the opposing party, cause undue 9 delay, or be futile, or if the moving party has acted in bad faith. Leadsinger, Inc. v. BMG Music 10 Publ’g, 512 F.3d 522, 532 (9th Cir. 2008). 11 For the reasons stated above, the Court finds that Plaintiffs’ Sherman Act claim is 12 frivolous as it is grounded upon valid conduct undertaken by a federal government agency. Any 13 attempt to re-plead this claim would necessarily depend upon Plaintiffs’ wholly meritless bonds 14 of discharge theory. Therefore, because it is clear that the deficiencies the Court identified cannot 15 be cured by amendment, leave to amend is inappropriate. 16 IV. Other Potential Sources of Subject Matter Jurisdiction 17 Having dismissed the Sherman Act Claim without leave to amend, the Court briefly 18 examines the remaining claims to determine whether any provide an independent basis for subject 19 matter jurisdiction. The burden of establishing subject matter jurisdiction “rests upon the party 20 asserting jurisdiction.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994); see 21 also Romero v. Securus Techs., Inc., 216 F. Supp. 3d 1078, 1085 (S.D. Cal. 2016). 22 Federal question jurisdiction exists when the dispute arises under the Constitution, laws or 23 treaties of the United States. 28 U.S.C. § 1331. The determination of subject matter jurisdiction 24 “is governed by the ‘well-pleaded complaint rule,’ which provides that federal jurisdiction exists 25 only when a federal question is presented on the face of the plaintiff’s properly pleaded 26 complaint.” Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987); see also California v. United 27 States, 215 F.3d 1005, 1014 (9th Cir. 2000). The complaint must establish “either that [1] federal 28 law creates the cause of action or that [2] the plaintiff’s right to relief necessarily depends on 1 resolution of a substantial question of federal law.” Williston Basin Interstate Pipeline Co. v. An 2 Exclusive Gas Storage Leasehold & Easement, 524 F.3d 1090, 1100 (9th Cir. 2008) (quoting 3 Franchise Tax Bd. v. Const. Laborers Vacation Trust, 463 U.S. 1, 27-28 (1983)). 4 Plaintiffs fail to identify in their complaint which federal law, if any, provides a cause of 5 action upon which relief can be granted for quiet title or accounting under the alleged 6 circumstances. Plaintiffs refer to some federal statutes and maritime law cases, but not a single 7 statute or case appears to establish a federal question relevant to the claims presented. For 8 example, Plaintiffs cite 12 U.S.C. § 266, which authorizes certain kinds of banking institutions to 9 be employed as fiscal agents of the United States; 26 U.S.C. § 6325, which provides, among other 10 things, mechanisms by which the Secretary of the Treasury may release tax liens; and 48 C.F.R. 11 § 53.228, which lists the standard forms used in connection with bonding and insuring federal 12 acquisition contracts. None of Plaintiffs’ cited statutes appear to be directly relevant to the claims 13 at issue in this case, nor is it apparent that they establish a cause of action for Plaintiffs to pursue 14 in this Court. 15 Plaintiffs’ complaint invokes diversity jurisdiction but their attempt to do so fails. Under 16 28 U.S.C. § 1332, there must be complete diversity between the parties for there to be federal 17 jurisdiction. Thus, the “citizenship of each plaintiff [must be] diverse from the citizenship of each 18 defendant.” Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 (1996). Plaintiffs allege their domicile and 19 citizenship is in California. (Doc. 17 at 5.) They also name as Defendant the Calaveras County 20 Clerk Recorder, a public official who is domiciled in California. (Id. at 6; see also Doc. 25 at 1.) 21 Therefore, complete diversity is not alleged. 22 V. Supplemental Jurisdiction 23 When a federal court has original jurisdiction over a claim, the court “shall have 24 supplemental jurisdiction over all other claims that are so related to claims in the action . . . that 25 they form part of the same case or controversy.” 28 U.S.C. § 1367(a). State claims are part of the 26 same case or controversy as federal claims “when they derive from a common nucleus of 27 operative fact and are such that a plaintiff would ordinarily be expected to try them in one judicial 28 proceeding.” Kuba v. 1-A Agric. Assoc., 387 F.3d 850, 855-56 (9th Cir. 2004) (internal quotation 1 | marks, citation omitted). 2 However, supplemental jurisdiction “is a doctrine of discretion, not of plaintiff's nght,” 3 | and district courts “can decline to exercise jurisdiction over pendent claims for a number of valid 4 | reasons.” City of Chicago v. Int’l Coll. of Surgeons, 522 U.S. 156, 172 (1997) (internal quotation 5 | marks, citations omitted). Pursuant to 28 U.S.C. § 1367(c)(3), the Court may “decline 6 | supplemental jurisdiction over a claim” if it “has dismissed all claims over which it has original 7 | jurisdiction,” and need not state its reason for dismissal. San Pedro Hotel Co., Inc. v. City of LA., 8 | 159 F.3d 470, 478 (9th Cir. 1998). 9 Because Plaintiffs fail to state a cognizable federal claim under the Sherman Act and 10 | amendment of that claim would be futile, the Court declines to retain supplemental jurisdiction 11 | over Plaintiffs’ quiet title and accounting claims. 12 CONCLUSION 13 For all the reasons set forth above: 14 (1) Fannie Mae’s Motion to Dismiss (Doc. 49) is GRANTED as to the Sherman Act 15 Claim, which is DISMISSED WITHOUT LEAVE TO AMEND. 16 (2) Finding no other basis for the exercise of subject matter jurisdiction, the Court 17 declines to exercise supplemental jurisdiction over the remaining state law claims. 18 (3) The Clerk of Court is directed to CLOSE THIS CASE. 19 20 IT IS SO ORDERED. Dated: _ June 29, 2023 Charis [Tourn TED STATES DISTRICT JUDGE 22 23 24 25 26 27 28 10