Desert Land, LLC v. Owens Financial Group, Inc.

*587 MEMORANDUM **

Del Mar Mortgage, Inc., Vestin Mortgage, Inc., Vestin Group, Inc., Shustek Investments, Inc., and Michael Shustek (collectively “DMMI”) appeal the district court’s judgment in favor of Desert Land, LLC, Howard Bulloch, and Casa Malaga Motel, Inc. (collectively “Desert Land”). The district court exercised federal question jurisdiction over Desert Land’s securities fraud claim under Rule 10b-5, 17 C.F.R. § 240 .10b-5, and asserted supplemental jurisdiction over related state-law claims. The district court found against Desert Land on its securities fraud claim but found in its favor on its state-law penalty claim. We hold that the district court erred by exercising federal question and supplemental jurisdiction, and dismiss the action.

I

The district court did not have subject matter jurisdiction over the action because Desert Land lacked standing to bring the securities claim. See Cetacean Community v. Bush, 386 F.3d 1169, 1175 (9th Cir.2004) (“A suit brought by a plaintiff without Article III standing is not a ‘case or controversy,’ and an Article III federal court [therefore] lacks subject matter jurisdiction over the suit.”). In order to have standing to…