Azam v. Federal Deposit Insurance Corp.

         Proceedings: (IN CHAMBERS) - PLAINTIFF’S MOTION TO VACATE MAY 31, 2016 ORDER OF JUDGE ANDREW GUILFORD DENYING DISQUALIFICATION OF JUDGE STATON; AND FOR OTHER RELIEF (Dkt. 97)

          HONORABLE CHRISTINA A. SNYDER JUDGE

         I. INTRODUCTION & BACKGROUND

         On May 22, 2015, the instant action was filed by plaintiff Nazie Azam and assigned to Judge Dale S. Fischer in the Western Division of the Central District of California. Dkts 1, 4. This case arises from plaintiff’s 2005 purchase of property in Laguna Niguel, California. Complaint at ¶¶ 2, 8. Plaintiff refinanced her loan on the property in 2006 with Washington Mutual F.A. (“Washington Mutual”), which later failed. Id. at ¶ 12. After the FDIC became the receiver of Washington Mutual, the FDIC transferred Azam’s loan to JPMorgan Chase pursuant to a 2008 Purchase and Assumption Agreement. Id. at ¶ 17. Through the instant action, plaintiff seeks, among other things, a declaration that the original deed of trust is void, damages against the FDIC, and cancellation of the original promissory note and deed of trust.

         On October 16, 2015, defendant FDIC filed a notice of related case, dkt 15, and the case was transferred to Judge Josephine L. Staton in the Southern Division of the Central District of California. Dkt. 16. On November 1, 2015, plaintiff filed a motion for disqualification of Judge Staton, intercircuit assignment, and other relief. Dkt 22. The motion argued, among other things, that Judge Staton “has a direct financial interest in the matters at issue and the outcome of this case and [another case in the Eastern District of California entitled, Law Offices of Nina Ringgold and All Current Clients Thereof v. Jerry Brown, et al., Case No. 12-cv-00717 (E.D. Cal.)], ” in which plaintiff Azam is a member of a putative class. Id. at 12-13. As a former judge of the Orange County Superior Court, Judge Staton allegedly has an interest in the outcome of the ongoing putative class action in the Eastern District, which involves, at least in part, compensation packages received by judges of the Los Angeles and Orange County Superior Courts. Plaintiff’s motion for disqualification was assigned to Judge James V. Selna, who denied the motion on November 16, 2015. Dkt 32. Months later, in an order dated April 20, 2016, Judge Staton dismissed plaintiff’s claims in this action with prejudice. Dkt. 79.

         On May 18, 2016, plaintiff filed a motion again seeking, among other things, disqualification of Judge Staton and requesting intercircuit assignment. Dkt. 83. According to the motion, Judge Staton has “direct general and financial interests in the case and related cases” and should therefore be disqualified. Dkt. 83. The motion further asserted that with the exception of Judge Andrew J. Guilford, “[a]ll of the [federal] judges in the Santa Ana courthouse [of the Central District of California] have general and financial interests requiring disqualification” by virtue of having previously been Superior Court judges. Id. at 5. Plaintiff’s motion for disqualification was referred to Judge Selna, who recused himself from ruling on the motion shortly thereafter. Dkts. 91-92. The motion was then referred to Judge Guilford, who denied the motion on May 31, 2016. Dkt. 94.

         On June 28, 2016, plaintiff filed the instant motion seeking, among other things, to vacate Judge Guilford’s May 31, 2016 motion denying plaintiff’s motion to disqualify Judge Staton. Dkt. 97. On June 29, 2016, pursuant to General Order 14-03 and Local Rule 72-5, the instant motion was referred to the undersigned.^[1] Dkt. 98.

         II. LEGAL STANDARD

         28 U.S.C. § 144 (“Section 144”) provides for disqualification of a judge whenever “a party to any proceeding in a district court makes and files a timely and sufficient affidavit that the judge before whom the matter is pending has a personal bias or prejudice either against him or in favor of any adverse party.” The affidavit must set forth “the facts and the reasons for the belief that bias or prejudice exists.” 28 U.S.C. § 144. Under 28 U.S.C. § 455 (“Section 455”), judges must disqualify themselves “in any proceeding in which [their] impartiality might reasonably be questioned.” Id. § 455(a).

         The substantive standard for disqualification is the same under both Sections 144 and 455: “whether a reasonable person with knowledge of all the facts would conclude that the judge’s impartiality might reasonably be questioned.” United States v. Studley, 783 F.2d 934, 939 (9th Cir. 1986) (citation omitted). Moreover, the alleged bias cannot result from mere disagreement, however vehement, with a judge’s rulings; instead, “the alleged bias must stem from an ‘extrajudicial source.’” United States v. Hernandez, 109 F.3d 1450, 1454 (9th Cir. 1997) (quoting Liteky v. United States, 510 U.S. 540, 548 (1994)). “[O]pinions formed by the judge on the basis of facts introduced or events occurring in the course of the current proceedings, or of prior proceedings, do not constitute a basis for a bias or partiality motion unless they display a deep-seated favoritism or antagonism that would make fair judgment impossible.” Liteky, 510 U.S. at 555.

         III. DISCUSSION

         In the instant motion, plaintiff contends that

[t]he judges in the southern division [of the Central District of California] have disqualifying interests because they have a direct financial interest in the case and the pending class action case because they are former judges of the Superior Court of the County of Orange. The only judge that does not have a direct financial interest is Judge Guilford. However, it is plainly apparent that he is openly bias [sic] and has used the disqualification question of Judge Staton as a basis to argue about his own disqualification in a different case. The May 31, 2016 orders should be vacated and the case reassigned under 28 U.S.C. Sec 292 (d) as requested by all members of the pending class action.

Motion at 3. Specifically, plaintiff contends that Judge Guilford’s May 31, 2016 order “undertook to determine disqualification (1) when he should have disqualified himself, and (2) when he was using extra judicial sources and extraneous information, and (3) when he had already demonstrated bias and prejudice against the plaintiff and counsel.” Motion at 2. According to plaintiff, Judge Guilford “clearly demonstrated unreasonable bias and use of matters extrajudicial to both the case and the present motion.” Id. at 6.

         The Court finds plaintiff’s motion to be without merit. Although, in plaintiff’s view, Judge Guilford’s order “intentionally misrepresents plaintiff’s claims” and “is an advocacy document and is not a neutral or even handed discussion of the applicable legal and evidentiary issues, ” id. at 2, plaintiff’s disagreement with the particulars of Judge Guilford’s reasoning or his conclusions does not provide grounds for disqualification or a finding of bias. Cf. United States v. Azhocar, 581 F.2d 735, 739 (9th Cir. 1978) (“Adverse rulings do not constitute the requisite bias or prejudice of [28 U.S.C. § 144].”) (citing Ber ...