Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-3_04-cv-02362/USCOURTS-azd-3_04-cv-02362-5/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 28:1331 Fed. Question: Breach of Contract

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Reda Mae Palmer, 

Plaintiff, 

vs.

Web Industries Inc., 

Defendant. 

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No. CV 04-2362-PCT-SMM

MEMORANDUM OF DECISION AND

ORDER

Pending before the Court is Defendant Web Industries, Inc., d/b/a Anderson Chrysler,

Plymouth, Dodge, Jeep’s (“Defendant”) Motion for Reconsideration of this Court’s February

6, 2007 Order (the “Order”) Denying Defendant’s Motion to Dismiss for Lack of Subject

Matter Jurisdiction. (Dkt. 73.)

Defendant contends the Order should be reconsidered because it was issued “without

affording Defendant the opportunity of filing a reply to Plaintiff’s response.” (Id. at 1.) For

two reasons, this is not a proper basis for seeking reconsideration. First, replies are optional,

and therefore not required to be considered. See LRCiv 7.2(d). Second, a motion for

reconsideration is proper only if “the district court (1) is presented with newly discovered

evidence; (2) committed clear error or the decision was manifestly unjust; or (3) if there is

an intervening change in controlling law.” School Dist. No. 1J Multnomah City v. Acands,

Inc., 5 F.3d 1255, 1263 (9th Cir. 1993) (citation omitted). The Court did not commit “clear

error” by denying Defendant’s Motion to Dismiss before considering its reply. However, the

Case 3:04-cv-02362-SMM Document 82 Filed 02/27/07 Page 1 of 6
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Court will address the arguments set forth in Defendant’s Motion for Reconsideration and

consider them in “reply” to Plaintiff’s opposition to Defendant’s Motion to Dismiss. 

BACKGROUND FACTS

On October 29, 2004, Plaintiff Reda Mae Palmer (“Plaintiff”) filed suit regarding a

2004 Jeep Grand Cherokee she purchased from Defendant, a car dealership located in Lake

Havasu City, Arizona. (Dkt. 1.) Plaintiff alleged claims for violation of the Federal Motor

Vehicle Information and Cost Savings Act pursuant to 49 U.S.C. § 32701 (the “Odometer

Act claim”), Consumer Fraud pursuant to A.R.S. § 44-1521, Breach of Contract, and punitive

damages. (Dkt. 18.) On January 8, 2007, the Court granted Defendant’s motion for

summary judgment on Plaintiff’s federal Odometer Act claim, but denied its request for

summary judgment on her claims for consumer fraud, breach of contract, and punitive

damages. (Dkt. 67.) On January 12, Defendant filed a Motion to Dismiss for Lack of

Subject Matter Jurisdiction. (Dkt. 68.) The Court denied Defendant’s Motion to Dismiss on

February 6, 2007. (Dkt. 71.)

DISCUSSION

Under the doctrine of supplemental jurisdiction, this Court has discretion to retain

jurisdiction over state law claims where the claims on which its original jurisdiction was

based have been dismissed. See 28 U.S.C. § 1367(c)(3). To decline jurisdiction under

§1367(c)(3), “the district court must first identify the dismissal that triggers the exercise of

discretion and then explain how declining jurisdiction serves the objectives of economy,

convenience and fairness to the parties, and comity.” Trustees of Const. Industry & Laborers

Health & Welfare Trust v. Desert Valley Landscape & Maint., Inc., 333 F.3d 923, 925-26

(9th Cir. 2003) (ordering dismissal of state claims seven days before trial and after long

delays was neither fair to parties nor efficient use of judicial resources). As the Supreme

Court has explained, “the doctrine of pendent jurisdiction . . . is a doctrine of flexibility,

designed to allow courts to deal with cases involving pendent claims in the manner that most

sensibly accommodates a range of concerns and values.” Carnegie-Mellon Univ. v. Cohill,

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484 U.S. 343, 350 (1988). Supreme Court and Ninth Circuit precedent consistently provide

that the district court is in the best position to judge the extent of resources invested in a case

and that such discretion ought not be lightly disturbed. Id.; Otto v. Heckler, 802 F.2d 337,

338 (9th Cir. 1986) (“The district court, of course, has the discretion to determine whether

its investment of judicial energy justifies retention of jurisdiction, or if it should more

properly dismiss the claims without prejudice.”) (citation omitted), amending 781 F.2d 754.

For several reasons, the Court exercises its discretion to retain supplemental

jurisdiction over Plaintiff’s three state law claims. First, significant party and judicial

resources have been expended litigating and determining the viability of the remaining state

law claims. Second, the present case has been pending in federal court for twenty-eight

months, since October 2004, and the Court has invested substantial time and resources in the

matter. Third, the Court is fully familiar with both the record and the remaining issues,

having just resolved cross-motions for summary judgment on all claims. See dkt. 67. Thus,

considerations of judicial economy favor retaining jurisdiction. Fourth, the dismissal of the

federal claim follows the close of discovery and the cut-off for dispositive motions in this

Court. See dkt. 40. Fifth, the case is now ready for trial, and a final pretrial conference is

scheduled for April. See dkt. 76. It would serve no useful purpose to put Plaintiff and

Defendant to the trouble of relitigating in state court a case which is ready for trial, as –

notwithstanding Defendant’s proposed stipulations – a dismissal would require essentially

duplicative proceedings and judicial determinations in state court, resulting in delay and,

possible, conflict. Finally, by dismissing Plaintiff’s Odometer Act claim, the Court has made

a ruling that may result in an appeal to the Ninth Circuit. See Dkt. 67. It would not serve the

underlying objectives of judicial economy, fairness, and comity to remand the matter to state

court when a separate appellate track would be created for issues resolved there.

The Defendant relies on dictum in United Mine Workers v. Gibbs, 383 U.S. 715

(1966) (Gibbs), that, “if the Federal claims are dismissed before trial . . . the state claims

should be dismissed as well.” (Dkt. 73 at 2, quoting Gibbs, 383 U.S. at 726.) The Supreme

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Court itself has “made clear that this statement does not establish a mandatory rule to be

applied inflexibly in all cases.” Carnegie-Mellon Univ, 484 U.S. at 350 n. 7 (citing Rosado

v. Wyman, 397 U.S. 397, 405 (1970) (Court “not willing to defeat the commonsense policy

of pendent jurisdiction – the conservation of judicial energy and the avoidance of multiplicity

of litigation”)); see also Acri v. Varian Assocs., Inc., 114 F.3d 999, 1000 (9th Cir 1997) (en

banc) (recognizing that Gibbs dictum is not mandatory). Instead, “[t]he statement simply

recognizes that in the usual case in which all federal-law claims are eliminated before trial,

the balance of factors . . . will point toward declining to exercise jurisdiction over the

remaining state-law claims.” Carnegie-Mellon, 484 U.S. at 350 n. 7, emphasis added; see

also United States v. Zima, 766 F.2d 1153, 1158 (7th Cir. 1985) (Gibbs dictum “has been

ignored or limited on many occasions, even by the Court itself”).

As noted above, this case is not the “usual case.” The Ninth Circuit has consistently

upheld decisions to retain pendent claims on the basis that returning them to state court

would be a waste of judicial resources. Indeed, many of these cases indicate that a district

court may exercise its discretion to retain pendent claims, on the basis of judicial economy,

after considerably less time has elapsed than in the present case. See, e.g., Mackey v. Pioneer

Nat’l Bank, 867 F.2d 520, 523 (9th Cir. 1989) (“retention of jurisdiction well served the

purposes of judicial economy and efficiency” after case had been in federal court only four

months); Aydin Corp. v. Loral Corp., 718 F.2d 897, 904 (9th Cir. 1983) (no abuse of

discretion to retain pendent claims on judicial economy grounds after “considerable time”

of less than 29 months elapsed); Arizona v. Cook Paint & Varnish Co., 541 F.2d 226, 227-28

(9th Cir. 1976) (per curiam) (no abuse of discretion to retain pendent claims after nine

months); see also In re Nucorp Energy Secs. Litigation, 772 F.2d 1486, 1491 (9th Cir. 1985)

(district court “was right in not imposing unnecessarily on a state court or on [the defendant]

a repetition of pleadings, motions, discovery and other pre-trial proceedings”) (citation

omitted). Once again, these cases reflect the Ninth Circuit’s belief that it is the district judge

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who is in the best position to determine whether enough resources have been expended to

make dismissal a waste of time at any given point. See Otto, 802 F.2d at 338. 

Although attempts to manipulate the forum should properly be taken into account in

balancing “the principles of [judicial] economy, convenience, fairness, and comity which

underlie the pendent jurisdiction doctrine,” Carnegie-Mellon, 484 U.S. at 357, the Court

rejects Defendant’s implication that Plaintiff’s Odometer Act claim was simply a “pretext

to get into federal court.” (Dkt. 73 at 5.) First, Defendant conceded in its summary judgment

response that “the Circuits are split on whether a plaintiff who alleges a violation of [the

Odometer Act] must prove intent to defraud as to the vehicle’s mileage.” (Dkt. 61 at 5.) 

Second, this was an issue of first impression in the Ninth Circuit. Both facts demonstrate

that Plaintiff included her Odometer Act claim in good faith, not as a pretext. Moreover, as

Plaintiff notes (dkt. 77 at 3 n.2), Defendant could have moved to dismiss the Odometer Act

claim at any time during the case, but chose to wait until less than two months before the

dispositive motions deadline to do so. See dkt. 40.

The Court rejects Defendant’s assertion that Plaintiff’s consumer fraud claim involves

difficult issues of state law. The Arizona Consumer Fraud Act is not novel or complex.

Thus, retention of jurisdiction in the present does not disregard the interests of comity.

Defendant’s remarks with respect to the convenience of witnesses and the parties and

the right to a jury of its peers (dkt. 73 at 3-4, 6) are not persuasive because Plaintiff filed this

case in the Prescott division of the District of Arizona. It has yet to be determined whether

the actual trial will take place at the courthouse in Phoenix or Prescott. Moreover, unless

both parties stipulate to a Phoenix jury pool, the jury pool will consist of persons from five

northern counties, including Mohave County.

Defendant’s proposed stipulations to Plaintiff (dkt. 73 at 5-6) have only a limited

effect on judicial economy because the Superior Court for the County of Mohave would need

to familiarize itself with the underlying facts, pleadings and judicial rulings made here in

order to decide any pretrial motions, motions in limine, and jury instructions. As noted

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above, this Court is already familiar with the record and remaining issues. Moreover,

Defendant has not demonstrated with any certainty that Plaintiff’s case would be set for trial

earlier in Mohave County than in this Court, nor has Defendant demonstrated how a “Motion

to Advance” for trial controls the Superior Court’s calendar. Finally, Defendant’s stipulation

regarding service and discovery (see dkt. 73 at 5-6) will not alleviate the problems of judicial

economy or fairness discussed above. 

Accordingly, 

IT IS HEREBY ORDERED GRANTING Defendant’s Motion for Reconsideration

but DENYING Defendant’s request to reverse the February 6, 2007 Order’s determination

that this case will not be dismissed for lack of subject matter jurisdiction (dkt. 71). (Dkt. 73.)

IT IS FURTHER ORDERED that the Clerk of Court shall strike and remove from

the Court’s docket Defendant’s Reply to Plaintiff’s Response to Defendant’s Motion for

Reconsideration (docket numbers 78 and 81), on the grounds that it is improperly filed in

violation of this Court’s Local Rules. See Local Rule 7.2(g).

IT IS FURTHER ORDERED DENYING AS MOOT Plaintiff’s Motion to Strike

Defendant’s Reply in Support of its Motion to Reconsider. (Dkt. 79.) 

DATED this 26th day of February, 2007.

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