Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_09-cv-05571/USCOURTS-cand-3_09-cv-05571-6/pdf.json

Nature of Suit Code: 140
Nature of Suit: Negotiable Instruments
Cause of Action: 15:1601 Truth in Lending

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United States District Court

For the Northern District of California

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NOT FOR PUBLICATION

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

LILLIAN LEIVA,

Plaintiff,

 v.

CITI MORTGAGE INC., et al.,

Defendants. /

No. C 09-05571 JSW

ORDER GRANTING MOTION TO

AMEND, DENYING AS MOOT

MOTIONS TO DISMISS AND TO

STRIKE, AND DISMISSING

Now before the Court for consideration are the Motion to Amend, filed by Plaintiff

Lillian Leiva (“Leiva”), and the Motion to Dismiss and the Motion to Strike filed by Defendants

CitiMortgage, Inc. (“CMI”) and Mortgage Electronic Registration Systems, Inc. (“MERS”)

(collectively “CMI Defendants”). Having considered the parties’ papers, relevant legal

authority, and the record in this case, the Court finds the matter suitable for disposition without

oral argument. See N.D. Civ. L.R. 7-1(b). The hearing set for April 2, 2010 is VACATED, and

Leiva’s Motion to Amend is GRANTED, the CMI Defendants’ motions are DENIED AS

MOOT, and this matter is dismissed without prejudice.

BACKGROUND

On November 24, 2009, Leiva filed the original complaint in this action against the CMI

Defendants, and other, in which she alleged numerous state and federal law claims based on an

alleged predatory lending scheme. Leiva alleged violations of the Truth in Lending Act

(“TILA”), 15 U.S.C. §§ 1601 et seq. and the Real Estate Settlement Procedures Act

(“RESPA”), 12 U.S.C. §§ 2605, et seq., against CMI. (Docket No. 1.)

 

Case 3:09-cv-05571-JSW Document 30 Filed 03/24/10 Page 1 of 3
United States District Court

For the Northern District of California

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28 1 Leiva submitted a further proposed amended complaint with her reply brief,

omitting a reference to RESPA in her negligence claim.

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On December 23, 2009, the CMI Defendants moved to dismiss Leiva’s complaint and

moved to strike certain portions of the complaint. (Docket Nos. 6, 7.) After Leiva failed to

submit an opposition by the deadline set in a briefing schedule set by the Court, the Court

ordered Leiva to show cause as to why the motions should not be granted. (See Docket Nos. 9,

11.) Leiva failed to file a timely response to the Order to Show Cause, and the Court granted

her a final opportunity to show why the motions should not be granted. (Docket No. 12.) In her

response to the Final Order to Show Cause, Leiva stated that she intended to prepare a First

Amended Complaint that would omit the claims for relief based on TILA and RESPA. (Docket

No. 15.) The CMI Defendants objected on the basis that Leiva could no longer amend her

claims as a matter of right. (Docket No. 17.) The Court found the CMI Defendants’ objections

well taken and ordered Leiva to file a motion to amend by no later than February 26, 2010.

(Docket No. 18.) Leiva timely filed her motion to amend and her proposed amended complaint,

which omits the claims for relief based on TILA and RESPA. (Docket No. 25.)

ANALYSIS

Federal Rule of Civil Procedure 15(a) (“Rule 15(a)”) permits a party to amend its

pleading once as a matter of right at any time before a responsive pleading is served. Once a

responsive pleading has been served, however, amendment requires written consent of the

adverse party or leave of the court. In accordance with the Federal Rule’s liberal pleading

standard, leave of the court “shall be freely given when justice so requires.” Fed. R. Civ. P.

15(a). Though the decision to grant or deny a motion for leave to amend is governed by the

district court’s discretion, the general rule is that amendment of the pleadings is to be permitted

unless the opposing party makes a showing of bad faith, undue delay, prejudice to the opposing

side, or futility of amendment. See Forman v. Davis, 371 U.S. 178, 182 (1962); DCD

Programs, Ltd. v. Leighton, 833 F.2d 183, 186 (9th Cir. 1986).

Leiva’s proposed amended complaint drops her federal claims and drops MERS as a

Defendant.1

 The CMI Defendants argue that the Court should not grant Leiva leave to amend,

Case 3:09-cv-05571-JSW Document 30 Filed 03/24/10 Page 2 of 3
United States District Court

For the Northern District of California

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on the basis that she is attempting to forum shop and, therefore is acting in bad faith, and that

the proposed amended complaint would be futile. Although Leiva initially chose to file suit in

federal court, she has now dropped the federal claims. Further, Leiva contends that she is

dropping those claims for lack of evidence. Accordingly, the Court does not find she has acted

in bad faith or with undue delay. Therefore, her motion to amend is GRANTED and the CMI

Defendants’ motions are denied as moot. 

Because Leiva has dropped her federal claims and because there is not complete

diversity among the parties, the Court must determine whether it should exercise its discretion

and assume supplemental jurisdiction over the remaining proposed state law claims. A district

court may decline to exercise supplemental jurisdiction in a case arising from a common

nucleus of operative fact where the federal claims have been dismissed. 28 U.S.C. §

1367(c)(3). In order to make this determination, courts should consider factors such as

“economy, convenience, fairness, and comity.” Acri v. Varian Assocs., Inc., 114 F.3d 999,

1001 (9th Cir. 1997) (internal quotations and citations omitted). When “federal-law claims are

eliminated before trial, the balance of factors to be considered ... will point toward declining to

exercise jurisdiction over the remaining state-law claims.” Carnegie-Mellon Univ. v. Cohill,

484 U.S. 343, 350 n.7 (1988), superseded by statute, 28 U.S.C. § 1447(c).

The Court that principles of comity, convenience, and judicial economy weigh against

retaining supplemental jurisdiction in this case and it therefore dismisses this action without

prejudice. The Clerk is directed to close the file.

IT IS SO ORDERED.

Dated: March 24, 2010 

JEFFREY S. WHITE

UNITED STATES DISTRICT JUDGE

Case 3:09-cv-05571-JSW Document 30 Filed 03/24/10 Page 3 of 3