Case 2:22-cv-00181-ODW-GJS Document 49 Filed 03/04/22 Page 1 of 5 Page ID #:2063

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8 United States District Court 9 Central District of California

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11 FELISA DEE RICHARDS, Case № 2:22-cv-00181-ODW (GJSx)

12 Plaintiff,

ORDER GRANTING MOTION FOR

13 v.

LEAVE TO AMEND [31] AND

14 GREGORY FUNDING LLC; AFFINIA MOTION TO REMAND [33]; AND 15 DEFAULT SERVICES, LLC; AJAX DENYING MOTIONS TO DISMISS

MORTGAGE LOAN TRUST 2018-G;

WELLS FARGO BANK, N.A.; [13][27]

16

PALADAR CAPITAL INVESTMENTS,

17 LP; and DOES 1-20,

18 Defendants.

19 20 I. INTRODUCTION & BACKGROUND 21 On November 17, 2020, Plaintiff Felisa Dee Richards filed a complaint in 22 California Superior Court asserting fourteen state law causes of action against 23 Defendants Gregory Funding LLC (“Gregory”); Affinia Default Services, LLC; Ajax 24 Mortgage Loan Trust 2018-G, Mortgage-Backed Securities, Series 2018-G, by U.S. 25 Bank National Association, as Indenture Trustee (“Ajax”); Wells Fargo Bank, N.A. 26 (“Wells Fargo” or “WF”); and Paladar Capital Investments, LP (“Paladar”). (See 27 Notice of Removal (“NOR”) ¶ 1, ECF No. 1.) Wells Fargo, Ajax, and Gregory 28 demurred and, after several court continuances, Richards filed the operative First Case 2:22-cv-00181-ODW-GJS Document 49 Filed 03/04/22 Page 2 of 5 Page ID #:2064

1 Amended Complaint (“FAC”). (See WF Opp’n Remand 4, ECF No. 38.) In the FAC, 2 Richards asserts twenty-two state law claims and one federal claim arising under the 3 Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692. (NOR Ex. A 4 (“FAC”) ¶¶ 570–73, ECF No. 1-4.) On the basis of federal question jurisdiction over 5 the new FDCPA claim, Wells Fargo removed the action to this Court. (See NOR ¶ 7.) 6 Now, Wells Fargo, Ajax, and Gregory move to dismiss Richards’s FAC based 7 on principles of preclusion and failure to state a claim.1 (See WF Mot. Dismiss, ECF 8 No. 27; Ajax Mot. Dismiss, ECF No. 13.) Richards moves to amend the FAC to 9 dismiss the FDCPA claim, (Mot. Am., ECF No. 31), and moves to remand the case to 10 state court, (Mot. Remand, ECF No. 33). The Court deemed these matters appropriate 11 for decision without oral argument. See Fed. R. Civ. P. 78; C.D. Cal. L.R. 7-15. For 12 the following reasons, the Motion for Leave to Amend and Motion to Remand are 13 GRANTED, and the Motions to Dismiss are DENIED. 14 II. DISCUSSION 15 Richards’s motions to amend and remand concern threshold jurisdictional 16 issues. The Court therefore addresses these two motions first before considering 17 Defendants’ motions to dismiss. 18 A. Motion to Amend 19 Richards seeks leave to amend the FAC to dismiss the FDCPA claim without 20 prejudice. Federal Rule of Civil Procedure (“Rule”) 15 governs leave to amend when, 21 as here, a plaintiff seeks to dismiss some but not all of her claims. Hells Canyon Pres. 22 Council v. U.S. Forest Serv., 403 F.3d 683, 687 (9th Cir. 2005). Under Rule 15, a 23 party who has amended a pleading once as a matter of course may only further amend 24 with the opposing party’s consent or the court’s leave. Eminence Cap., LLC v. 25 Aspeon, Inc., 316 F.3d 1048, 1051 (9th Cir. 2003) (citing Fed. R. Civ. P. 15(a)). “The 26 court should freely give leave when justice so requires.” Fed. R. Civ. P. 15(a)(2). In 27

28 1 Paladar also moved to dismiss, but the Court struck the motion for procedural noncompliance and Paladar did not refile. (See Order Striking Mot., ECF No. 29.)

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1 the Ninth Circuit, this policy is applied with “extreme liberality.” Eminence Cap., 2 316 F.3d at 1051. District courts exercise discretion in deciding whether to grant 3 leave to amend, considering “the presence of any of four factors: bad faith, undue 4 delay, prejudice to the opposing party, and/or futility.” Serra v. Lappin, 600 F.3d 5 1191, 1200 (9th Cir. 2010). “Absent prejudice, or a strong showing of any of the 6 remaining . . . factors, there exists a presumption under Rule 15(a) in favor of granting 7 leave to amend.” Eminence Cap., 316 F.3d at 1052. 8 Regarding bad faith, the Ninth Circuit has found that a plaintiff’s “decision to 9 plead both state and federal claims in state court and to dismiss the federal claims after 10 removal” may be “a straight-forward tactical decision,” and not necessarily 11 “manipulative.” Baddie v. Berkeley Farms, Inc., 64 F.3d 487, 489, 491 (9th Cir. 12 1995); see also Horne v. Wells Fargo Bank, N.A., 969 F. Supp. 2d 1203, 1209 13 (C.D. Cal. 2013) (collecting cases granting motions to amend and remanding after 14 plaintiff dismissed federal claims). Here, the Court cannot find on this record that 15 Richards’s motion for leave to amend is brought in bad faith. 16 Next, in this case, any delay or prejudice to Defendants is self-inflicted, as“[t]he 17 defendant is not obligated to remove; rather, [it] has the choice either to submit to 18 state court resolution of [its] claims, or to assert [its] right to a federal forum.” 19 Baddie, 64 F.3d at 491. Defendants elected to remove the case to federal court and 20 risk that federal jurisdiction might be lost rather than pursue resolution in state court. 21 Thus, any delay or prejudice to Defendants from dismissal of the FDCPA claim does 22 not weigh against permitting amendment. Furthermore, Defendants have not shown 23 that the possibility of Richards reasserting the FDCPA claim is the type of “prejudice 24 to the opposing party” that precludes granting leave to amend to dismiss the claim 25 now. Cf. Mechmetals Corp. v. Telex Comput. Prods., Inc., 709 F.2d 1287, 1294 26 (9th Cir. 1983). 27 Finally, the Court does not find the requested amendment futile, as it eliminates 28 the FDCPA cause of action from the case and does not alter the remaining claims.

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1 On balance, the Court finds the above factors favor leave to amend. 2 Accordingly, the Court GRANTS Richards’s motion for leave to amend and dismisses 3 the twenty-second claim for violation of the FDCPA without prejudice. 4 B. Motion to Remand 5 “A district court may decline to exercise supplemental jurisdiction if it has 6 dismissed all claims over which it has original jurisdiction.” Sanford v. 7 MemberWorks, Inc., 625 F.3d 550, 561 (9th Cir. 2010) (internal quotation marks 8 omitted); 28 U.S.C. § 1367(c)(3). “[I]n the usual case in which all federal-law claims 9 are eliminated before trial, the balance of factors to be considered under the pendent 10 jurisdiction doctrine—judicial economy, convenience, fairness, and comity—will 11 point toward declining to exercise jurisdiction over the remaining state-law claims.” 12 Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350 n.7 (1988); Wade v. Reg’l Credit 13 Ass’n, 87 F.3d 1098, 1101 (9th Cir. 1996) (“Where a district court dismisses a federal 14 claim, leaving only state claims for resolution, it should decline jurisdiction over the 15 state claims . . . .”). 16 The FDCPA claim provided the only basis for original jurisdiction in this case. 17 (See NOR ¶¶ 7–8.) Ajax nevertheless argues that many of Richards’s state law claims 18 provide original jurisdiction because they involve substantial federal questions. (Ajax 19 Opp’n Remand 4–7, ECF No. 37.) “[F]ederal jurisdiction over a state law claim will 20 lie if a federal issue is: (1) necessarily raised, (2) actually disputed, (3) substantial, and 21 (4) capable of resolution in federal court without disrupting the federal-state balance 22 approved by Congress.” See Gunn v. Minton, 568 U.S. 251, 258 (2013). Defendants 23 did not raise substantial federal question as a basis for subject matter jurisdiction in 24 the Notice of Removal and, in any event, Ajax fails to establish it as a basis for 25 original jurisdiction now. 26 As the only claim supporting original federal jurisdiction has been dismissed, 27 and in consideration of judicial economy, convenience, fairness, and comity, the Court 28 declines to exercise supplemental jurisdiction over the remaining twenty-two state law

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1] claims. See Wade, F.3d at1101. Richards’s motion to remand is therefore 2 || GRANTED. 3 Il. CONCLUSION 4 For the reasons discussed above, the Court GRANTS Richards’s Motion to 5 || Amend (ECF No. 31) and Motion to Remand (ECF No. 33). The Court REMANDS 6 || this case to the Superior Court of California, County of Los Angeles, Stanley Mosk 7 || Courthouse, 111 N. Hill Street, Los Angeles, CA 90012, Case No. 20STCV43833. 8 | The Court therefore does not reach the pending Motions to Dismiss and DENIES 9 || them without prejudice as moot. (ECF Nos. 13, 27.) 10 11 IT IS SO ORDERED. 12 13 March 4, 2022 14 ae yey

16 OTIS D. GHT, II 4 UNITED STATESDISTRICT JUDGE

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