Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_15-cv-02155/USCOURTS-cand-3_15-cv-02155-3/pdf.json

Nature of Suit Code: 470
Nature of Suit: Civil (Rico)
Cause of Action: 15:1640 Truth in Lending

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

ERIK DAVID SEGELSTROM, et al.,

Plaintiffs,

v.

CITIBANK, NA, et al.,

Defendants.

Case No. 15-cv-02155-JST 

ORDER GRANTING DEFENDANTS 

NATIONSTAR AND MENDOCINO 

COUNTY'S MOTIONS TO DISMISS

AND DENYING DEFENDANT 

NATIONSTAR’S MOTION FOR A PREFILING INJUNCTION

Re: ECF Nos. 10, 12, 13

Before the Court in this case are two motions filed by Defendant Nationstar Mortgage, 

L.L.C. (“Nationstar”)—a motion to dismiss, ECF No. 12, and a motion for a pre-filing injunction,

ECF No. 13. Defendant Mendocino County (“County Defendant”) has also filed a motion to 

dismiss, and a request for judicial notice in support of the motion. ECF Nos. 10, 10-1. 

I. Background

A. Factual Background1

In July 2004, Plaintiffs Erik David Segelstrom and Cathie M. Hamer (“Plaintiffs”) 

obtained a 30-year mortgage loan in the amount of $520,000 to purchase real property located at

29850 Ten Mile Road, Point Arena, California. ECF No. 1 at ¶ 39. Lehman Brothers Bank was 

the lender. Id. Aurora Loan Services, LLC initially serviced the note, but Plaintiffs subsequently 

discovered that Aurora had assigned the servicing rights to Nationstar. Id. at ¶ 28. Plaintiffs also 

discovered from Nationstar in October 2013 that Wilmington Trust, NA (“Wilmington Trust”) had 

been assigned as creditor of their loan. Id. at ¶ 2. Plaintiffs allege that the character and legal 

status of the debt was misrepresented by Nationstar when Nationstar claimed that the debt was 

 

1

The Court accepts the following allegations as true for the purpose of resolving Defendants’ 

motions to dismiss. Cahill v. Liberty Mutual Ins. Co., 80 F.3d 336, 337–38 (9th Cir. 1996).

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owed to them and not to Wilmington Trust. Id. at ¶ 74. Because of these and other alleged 

defects, Plaintiffs claim that Nationstar cannot legally foreclose on their home because “there is no 

proper and valid chain of title for the note from Lehman Brothers Bank, FSB to Nationstar 

Mortgage, LLC or to Citibank, NA and then to Wilmington Trust, NA.” Id. at ¶¶ 69-70. Plaintiffs 

seek declaratory and injunctive relief against Nationstar. 

Plaintiffs also name the County of Mendocino as a Defendant in the action, 

alleging that the “[t]he Mendocino County Sheriff’s Department will be asked to assist the banks 

through their participation in an eviction process of the subject property.” Id. at ¶ 37. Plaintiffs 

seek injunctive relief against the County. 

B. Procedural History

In June 2014, Plaintiffs filed a 63-page complaint in the United States District Court for

the District of Columbia against several defendants including Nationstar and County Defendant in 

an attempt to challenge their foreclosure and eviction proceedings. See Segelstrom v. Citibank, 

N.A., No. CV 14-1071 (CKK), 2014 WL 6603202 at *8-*12 (D.D.C. Nov. 21, 2014) (“Segelstrom 

I”). Plaintiffs pled several claims under the False Claims Act. Id. at *8. Plaintiffs also alleged 

that Nationstar lacked standing to foreclose on their mortgage, violated a consent judgment 

entered into between Citibank and several other banks, fraudulently took assignment of Plaintiffs’

mortgage, intentionally inflicted emotional distress on Plaintiffs, and violated Plaintiffs’ due 

process rights. Id. at *8-*12. Plaintiffs sought declaratory and injunctive relief. Id.

In September 2014, Plaintiffs filed a 96-page complaint against Nationstar and other 

Defendants in the United States District Court for the Northern District of California. Segelstrom 

v. Nationstar Mortgage L.L.C., No. 14-CV-03961-JST, 2015 WL 1149909 (N.D. Cal. March 13, 

2015) (“Segelstrom II”). Plaintiffs similarly alleged that Nationstar lacked authority to foreclose 

on their property. Id. at *1. Plaintiffs alleged numerous causes of action, including violations of 

the Racketeer Influenced and Corrupt Organizations Act (“RICO”). Id. They sought declaratory 

and injunctive relief. 

On November 21, 2014, Judge Kollar-Kotelly of the District Court of the District of 

Columbia dismissed with prejudice all claims brought against Nationstar and dismissed all claims 

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against County Defendant for lack of personal jurisdiction. Segelstrom I, 2014 WL 6603202. On 

March 13, 2015, in light of Judge Kollar-Kotelly’s decision, this Court dismissed with prejudice 

all claims brought against Nationstar in Segelstrom II pursuant to the doctrine of claim preclusion. 

Segelstrom II, 2015 WL 1149909.

In May 2015, Plaintiffs initiated the current action by filing a 57-page complaint against 

Nationstar, County Defendant, and other defendants. ECF No. 1. In the current action, Plaintiffs

similarly allege that Nationstar does not have the authority to foreclose their property. Id. 

Plaintiffs further allege that both Nationstar has violated the Truth in Lending Act (“TILA”), 15 

U.S.C. § 1601, and the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692. Id. 

County Defendant is mentioned only twice in the Complaint. 

County Defendant subsequently filed a motion to dismiss on June 5, 2015, and a request 

for judicial notice in support of the motion. ECF No. 10; ECF No. 10-1. Defendant Nationstar 

filed a motion to dismiss and a motion for a pre-filing injunction on June 18, 2015. ECF No. 12; 

ECF No. 13. 

Plaintiffs’ response to the County motions was due by June 19, 2015, and Plaintiffs’ 

responses to the Nationstar motions were due by July 2, 2015. Plaintiffs did not file timely 

responses to any of the motions. On July 13, 2015, the Court received Plaintiffs’ response to the 

County’s motion. ECF Nos. 15, 16. Given Plaintiffs’ pro se status, the Court accepted the late 

filed opposition. ECF No. 18. As of this date, Plaintiffs have not submitted an opposition to 

Nationstar’s motions. 

C. Jurisdiction

The Court has jurisdiction over this action, as Plaintiffs have alleged causes claims under

15 U.S.C. § 1640(e) and 15 U.S.C. § 1692k(d). 

II. Motions to Dismiss

A. Legal Standard

On a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure, courts 

must determine whether a plaintiff has pled “enough facts to state a claim to relief that is plausible 

on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). The Court must “accept all 

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factual allegations in the complaint as true and construe the pleadings in the light most favorable 

to the nonmoving party.” Knievel v. ESPN, 393 F.3d 1068, 1072 (9th Cir. 2005). Even though 

the Court must accept all factual allegations in the complaint as true, “threadbare recitals of the 

elements of a cause of action, supported by mere conclusory statements, do not suffice.” Ashcroft 

v. Iqbal, 556 U.S. 662, 678 (2009). “Dismissal can be based on the lack of a cognizable legal 

theory or the absence of sufficient facts alleged under a cognizable legal theory.” Balistreri v. 

Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990). Allegations in a complaint must 

“contain sufficient allegations of underlying facts to give fair notice and to enable the opposing 

party to defend itself effectively” and “the factual allegations that are taken as true must plausibly 

suggest an entitlement to relief, such that it is not unfair to require the opposing party to be 

subjected to the expense of discovery and continued litigation.” Starr v. Baca, 652 F.3d 1202, 

1216 (9th Cir. 2011). 

In the case of pro se parties, courts have an obligation to construe the pleadings liberally 

and to afford the plaintiff the benefit of any doubt. Bretz v. Kelman, 773 F.2d 1026, 1027 n. 1 

(9th Cir. 1985) (en banc). However, pro se parties must still allege facts sufficient to allow a court 

to determine whether a claim has been stated. Ivey v. Bd. of Regents of Univ. of Alaska, 673 F.2d 

266, 268 (9th Cir. 1982).

If the Court decides to dismiss Plaintiffs’ Complaint, the next question is whether to grant 

leave to amend. The Ninth Circuit has “repeatedly held that a district court should grant leave to 

amend even if no request to amend the pleading was made, unless it determines that the pleading 

could not possibly be cured by the allegation of other facts.” Lopez v. Smith, 203 F.3d 1122, 1130 

(9th Cir. 2000) (citations and quotations omitted). Dismissing a pro se complaint without leave to 

amend is appropriate only if it is “absolutely clear that the deficiencies of the complaint could not 

be cured by amendment.” Broughton v. Cutter Labs., 622 F.2d 458, 460 (9th Cir. 1980). 

B. Defendant Mendocino County

County Defendant moves to dismiss Plaintiffs’ complaint, contending that Plaintiffs have 

failed to state any causes of action against the County. ECF No. 10. County Defendant notes that 

the County is “referenced in the Petition only twice and not mentioned at all within Plaintiffs’ 

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individual causes of action.” ECF No. 10 at 2. The first reference to the County in the complaint 

alleges that “[t]he Mendocino County Sheriff’s Department will be asked to assist the banks 

through their participation in an eviction process of the subject property, in violation of state and 

federal law, including the Truth in Lending Act (‘TILA’), Title 15 US Code §§ 1641(f) and 

1641(g) as well as California Civil Code 2932.5.” ECF No. 1 at ¶ 37. The other reference to the 

County in the complaint alleges that the County “has indicated that they wish to enforce the note 

and Deed of Trust regardless of the tenuous legal standing of the banks named herein and the 

tendency of both federal and state courts to set aside the law, including US Supreme Court 

decisions and give every advantage to the banks no matter what.” Id. at ¶ 59. 

The Court concludes that Plaintiffs’ Complaint does not contain sufficient allegations to 

state a claim against the County. It is unclear from the two references to the County in the 

Complaint what theory of liability Plaintiffs’ seek to assert against the County. Although 

Plaintiffs’ opposition indicates they seek “declaratory and injunctive relief,” rather than damages, 

from the County, ECF No. 16 at 1, the Complaint does not make clear what form of relief is 

sought from the County, as opposed to what relief is sought from other named Defendants. See, 

e.g., ECF No. 1 at ¶ 95. 

Furthermore, Plaintiffs’ claims against the County appear to be based solely on actions that 

Plaintiffs speculate will be taken by the County in connection with the eviction process for 

Plaintiffs’ property, suggesting that any claims against the County are not yet ripe. Ripeness is a 

question of timing designed to “prevent the courts, through avoidance of premature adjudication, 

from entangling themselves in abstract disagreements.” Thomas v. Achorage Equal Rights 

Comm'n, 220 F.3d 1134, 1138 (9th Cir. 1999) (citing Abbott Labs. v. Garder, 387 U.S. 136, 148 

(1967)). A claim is not ripe for adjudication “if it rests upon contingent future events that may not 

occur as anticipated, or indeed may not occur at all.” Texas v. United States, 523 U.S. 296, 300 

(1998) (internal quotation marks omitted). Plaintiffs’ claims do not appear to be ripe for 

adjudication because they are contingent upon the County’s participation in the eviction process, 

which has not yet occurred. Plaintiffs state that the County “has indicated that they wish to 

enforce the note and Deed of Trust regardless of the tenuous legal standing of the banks named 

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herein and the tendency of both federal and state courts to set aside the law, including US Supreme 

Court decisions and give every advantage to the banks no matter what.” Id. at ¶ 59. Plaintiffs 

have not pled sufficient facts to render this assertion plausible, as they have not alleged with 

sufficient detail what statements were made, which County official made them, and what actions 

the County has stated it would take in connection with the eviction process. 

In short, Plaintiffs’ complaint does not “contain sufficient allegations of underlying facts to 

give fair notice and to enable the [County] to defend itself effectively.” Baca, 652 F.3d at 1216. 

The Court will therefore dismiss Plaintiffs’ claims against County Defendant pursuant to Federal 

Rule of Civil Procedure 12(b)(6). The County asks that the Complaint be dismissed with 

prejudice as to the County, as “Plaintiff has failed to state any cause of action against County 

Defendant under any of the statutory bases alleged.” ECF No. 10. at 7. Dismissing a pro se 

complaint without leave to amend is appropriate only if it is “absolutely clear that the deficiencies 

of the complaint could not be cured by amendment.” Broughton v. Cutter Labs., 622 F.2d 458, 

460 (9th Cir. 1980). The County argues that Truth in Lending Act, Fair Debt Collection Practices 

Act, and California Civil Code Act § 2932.5 claims cannot be successfully pled against the 

County. Given that the 57-page complaint largely focuses on the named bank Defendants, with 

only two references to the County, it is difficult to discern any legal theory Plaintiffs could assert 

against the County going forward. 

In light of the Plaintiffs’ failure to identify any wrongful action by the County, as well as 

their lengthy and unsuccessful history of prior unsuccessful claims in this Court and in the District 

for the District of Columbia, the Court concludes that leave to amend in this case would be futile. 

Plaintiffs’ claims against the County of Mendocino are dismissed with prejudice. 

C. Defendant Nationstar Mortgage, LLC

Nationstar seeks to dismiss Plaintiffs’ claims on the basis of res judicata, or claim

preclusion. “Res judicata is applicable whenever there is (1) identity of claims, (2) a final 

judgment on the merits, and (3) privity between parties.” Tahoe-Sierra Pres. Council, Inc. v. 

Tahoe Reg’l Planning Agency, 322 F.3d 1064, 1077 (9th Cir. 2003) (internal quotations and 

citations committed). 

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i. Identity of the Claims

“The central criterion in determining whether there is an identity of claims between the 

first and second adjudications is ‘whether the two suits arise out of the same transactional nucleus 

of facts.’” Owens v. Kaiser Found. Health Plan, Inc., 244 F.3d 708, 714 (9th Cir. 2001) (internal 

citations and quotations omitted). Hence, “[i]t is immaterial whether the claims asserted 

subsequent to the judgment were actually pursued in the action that led to the judgment; rather, the 

relevant inquiry is whether they could have been brought.” United States ex rel. Barajas v. 

Northrop Corp., 147 F.3d 905, 909 (9th Cir. 1998). “Whether two events are part of the same 

transaction or series depends on whether they are related to the same set of facts and whether they 

could conveniently be tried together.” Mpoyo v. Litton Electro-Optical Sys., 430 F.3d 985, 987 

(9th Cir. 2005) (internal citations and quotations omitted). 

The complaints in Segelstrom I, Segelstrom II, and the current action all allege that 

Nationstar cannot foreclose on Plaintiffs’ property due to various alleged irregularities in the 

process by which Nationstar came to obtain an interest in the property, all of which irregularities 

Plaintiffs allege occurred prior to the filing of the complaint in Segelstrom I. In Segelstrom I, 

Plaintiffs brought their claims against Nationstar under the False Claims Act, various California 

statutes, and provisions of the Uniform Commercial Code. Segelstrom I, 2014 WL 6603202, at 

*8-*10. Plaintiffs also challenged Nationstar’s ability to foreclose on Plaintiffs’ property, alleging 

that Nationstar had “not established, with admissible evidence, that [they] are the holder of the 

note or holder of the Deed of Trust.” Id. In Segelstrom II, Plaintiffs brought their challenges 

against Defendant in the form of several RICO claims that they had not brought in Segelstrom I.

Segelstrom II, 2015 WL 1149909, at *2. This Court concluded that, although the RICO claims 

had not previously been brought, the suits shared “the same transactional nucleus of facts” and 

Nationstar therefore had “established that there exists identity of the claims between the two 

actions.” Id. at *3. The same is true of the present complaint, in which Plaintiffs again challenge 

Nationstar’s authority to foreclose on the same property that was in dispute in the previous 

Segelstrom actions as a result of the same alleged defects in the chain of title that were alleged in 

the previous Segelstrom actions. Although the present complaint is somewhat different in content 

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from the prior complaints, it does not contain any allegations against Nationstar that post-date the 

filing of the previous actions. The present claims therefore could have been brought in those prior 

actions. 

The Ninth Circuit has held that the common nucleus criterion is often “outcome 

determinative under the first res judicata element,” Mpoyo v. Litton Electro-Optical Sys., 430 F.3d 

985, 988 (9th Cir. 2005), but has nonetheless set forth other factors that courts may apply to 

determine whether identity of the claims exists between suits. Courts may look to “whether rights 

or interests established in the prior judgment would be destroyed or impaired by prosecution of the 

second action.” Id. at 987. Here, allowing the current action to continue would impair 

Nationstar’s “freedom from litigation established by [the] dismissal with prejudice of the first 

suit.” Durney v. WaveCrest Labs., LLC, 441 F. Supp. 2d 1055, 1064 (N.D. Cal. 2005). Courts 

also may assess “whether substantially the same evidence is presented in the two actions.” 

Mpoyo, 430 F.3d at 988 (9th Cir. 2005). That test is also met here. As Plaintiffs dispute 

Nationstar’s right to foreclose their home, the evidence Plaintiffs would present in this action 

would be very similar to the evidence Plaintiffs would have presented had Segelstrom I proceeded 

beyond Defendant Nationstar’s motion to dismiss. 

Nationstar has established that there exists identity of the claims between this action and 

Segelstrom I and Segelstrom II. 

ii. Final Judgment on the Merits

“Final judgment on the merits is synonymous with dismissal with prejudice.” Hells 

Canyon Pres. Council v. U.S. Forest Serv., 403 F.3d 683, 686 (9th Cir. 2005) (internal quotations 

and citations omitted). Judge Kollar-Kotelly’s order in Segelstrom I dismissed Plaintiffs’ claims 

against Nationstar with prejudice. Segelstrom I, 2014 WL 6603202 at *13 (“Defendants Citibank 

and Nationstar and the Doe Defendants are DISMISSED WITH PREJUDICE as Plaintiffs have 

failed to state a claim against these Defendants under the False Claims Act or a claim for wrongful 

foreclosure, fraud, violation of the consent judgment, intentional infliction of emotional distress, 

or violation of due process.”). In Segelstrom II, applying the doctrine of claim preclusion, this 

Court also dismissed Plaintiffs’ claims against Nationstar with prejudice. Segelstrom II, 2015 WL 

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1149909, at *3. As Plaintiffs claims have now been dismissed with prejudice twice, the 

requirement of a final judgment on the merits is satisfied. 

iii. Privity Between the Parties

Privity exists when the parties in both actions are identical or where “there is ‘substantial 

identity’ between parties, that is, when there is sufficient commonality of interest.” Tahoe–Sierra, 

322 F.3d at 1081. The only Plaintiffs in the current action are Erik David Segelstrom and Cathie 

M. Hamer, the same two Plaintiffs who brought Segelstrom I and Segelstrom II. Nationstar was a 

Defendant in all three of these actions. As the parties to both actions are identical, the requirement 

of privity between the parties is satisfied. 

iv. Conclusion

The Court concludes that Plaintiffs’ claims against Nationstar are barred by the doctrine of 

claim preclusion. Therefore, the Court will again dismiss Plaintiffs’ claims against Nationstar 

with prejudice. 

III. Motion for a Pre-filing Injunction

Defendant Nationstar asks that this Court preclude Plaintiffs from filing any subsequent 

suits arising out of their home loan for the Property located at 29850 Ten Mile Road, Point Arena, 

California without the Court’s consent. ECF No. 13 at 1. “The All Writs Act, 28 U.S.C. § 

1651(a), provides district courts with the inherent power to enter pre-filing orders against 

vexatious litigants.” Weissman v. Quail Lodge Inc., 179 F.3d 1194, 1197 (9th Cir. 1999). Under 

28 U.S.C. § 1651(a), “enjoining litigants with abusive and lengthy histories is one such form of 

restriction that the district court may take.” De Long v. Hennessy, 912 F.2d 1144, 1147 (9th Cir. 

1990). 

However, the Ninth Circuit has cautioned that such “pre-filing orders should rarely be 

filed,” id., as “such sanctions can tread on a litigant's due process right of access to the courts.” 

Molski v. Evergreen Dynasty Corp., 500 F.3d 1047, 1057 (9th Cir. 2007). “When district courts 

seek to impose pre-filing restrictions, they must: (1) give litigants notice and an opportunity to 

oppose the order before it is entered; (2) compile an adequate record for appellate review, 

including a listing of all the cases and motions that led the district court to conclude that a 

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vexatious litigant order was needed; (3) make substantive findings of frivolousness or harassment; 

and (4) tailor the order narrowly so as to closely fit the specific vice encountered.” RinggoldLockhart v. Cnty. of Los Angeles, 761 F.3d 1057, 1062 (9th Cir. 2014).

At this time, the Court declines to take the drastic step of entering a pre-filing injunction 

against Plaintiffs, as their litigation history has not yet arisen to the level of vexatious. Plaintiffs, 

proceeding pro se, have filed two complaints against Nationstar in this District alleging that 

Nationstar violated various federal statutes and provisions of California state law in connection 

with its attempts to foreclose on Plaintiffs’ property at 29850 Ten Mile Road, Point Arena, 

California. Prior to these actions, Plaintiffs filed one such action against Nationstar in the District 

Court for the District of Columbia, which was dismissed with prejudice. While the facts alleged 

largely overlap, the causes of action in the complaints in each case brought by Plaintiffs have 

varied. While these variances have not allowed Plaintiffs to circumvent the application of the 

doctrine of claim preclusion as to their claims against Nationstar, they nonetheless demonstrate 

that Plaintiffs have attempted in good faith to pursue various legal theories, rather than merely 

relitigating legal theories that Courts have repeatedly found frivolous. 

Nonetheless, the Court advises Plaintiffs that, for the reasons enumerated by the Court in 

this order and its prior order in Segelstrom II, 2015 WL 1149909, at *2-*3, future federal court 

actions against Nationstar alleging that Nationstar lacks an interest in the property in question due 

to irregularities in the assignment of the note, deed of trust, Notice of Default, foreclosure sale, 

and the recording of the Trustee Deed are subject to dismissal under the doctrine of claim 

preclusion. See Segelstrom I. Because any claims arising from these facts relate to the claims that 

were brought in the Plaintiffs’ first District Court action in the District of Columbia, Segelstrom I, 

it does not matter if Plaintiffs seek to bring such claims under new legal theories. Therefore, the 

Court will advise Plaintiffs that, if they file another action against Nationstar premised on the 

same transactional nucleus of facts, the Court will be more likely to entertain a request by 

Nationstar to subject Plaintiffs to a pre-filing injunction pursuant to 28 U.S.C. § 1651(a).

CONCLUSION

County Defendant’s motion to dismiss is granted with prejudice. Defendant Nationstar’s 

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motion to dismiss is granted with prejudice. Defendant Nationstar’s motion for a pre-filing 

injunction is denied. 

The Court also notes that the other Defendants in this action do not appear to have been 

served. The Court advises Plaintiffs that, pursuant to Federal Rule of Civil Procedure 4(m), “[i]f a 

defendant is not served within 120 days after the complaint is filed, the court—on motion or on its 

own after notice to the plaintiff—must dismiss the action without prejudice against that defendant 

or order that service be made within a specified time.” Plaintiffs are directed either to serve the 

remaining defendants by September 12, 2015, or show cause in writing by that date why this case 

in its entirety should not be dismissed without prejudice. 

The Case Management Conference currently scheduled for August 26, 2015 is continued 

to December 2, 2015 at 2:00 p.m. A case management statement is due ten court days beforehand. 

IT IS SO ORDERED.

Dated: August 24, 2015

______________________________________

JON S. TIGAR

United States District Judge

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