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White v. Wells Fargo Home Mortgage

United States District Court, E.D. California

August 8, 2016

LINDA A. WHITE, Plaintiff
v.
WELLS FARGO HOME MORTGAGE, et al., Defendants.

          ORDER

          Gregory G. Hollows UNITED STATES MAGISTRATE JUDGE

         Plaintiff, proceeding in this action pro se, has requested leave to proceed in forma pauperis pursuant to 28 U.S.C. § 1915. This proceeding was referred to this court by Local Rule 302(21), pursuant to 28 U.S.C. § 636(b)(1).

         Plaintiff has not completed her in forma pauperis application. Although the form states that plaintiff is employed, plaintiff has not provided the amount of her take home salary or wages, the pay period, and the name and address of her employer. Plaintiff also states that she receives funds from “disability or workers compensation payments” and “other sources, ” but has not described each source of money, the amount received, and what plaintiff expects to continue to receive. Accordingly, the request to proceed in forma pauperis will be denied without prejudice. Plaintiff will be directed to complete another in forma pauperis application that is complete.

         The determination that plaintiff may proceed in forma pauperis does not complete the required inquiry. Pursuant to 28 U.S.C. § 1915(e)(2), the court is directed to dismiss the case at any time if it determines the allegation of poverty is untrue, or if the action is frivolous or malicious, fails to state a claim on which relief may be granted, or seeks monetary relief against an immune defendant.

         A claim is legally frivolous when it lacks an arguable basis either in law or in fact. Neitzke v. Williams, 490 U.S. 319, 325 (1989); Franklin v. Murphy, 745 F.2d 1221, 1227-28 (9th Cir. 1984). The court may, therefore, dismiss a claim as frivolous where it is based on an indisputably meritless legal theory or where the factual contentions are clearly baseless. Neitzke, 490 U.S. at 327. The critical inquiry is whether a constitutional claim, however inartfully pleaded, has an arguable legal and factual basis. See Jackson v. Arizona, 885 F.2d 639, 640 (9th Cir. 1989); Franklin, 745 F.2d at 1227.

         A complaint must contain more than a “formulaic recitation of the elements of a cause of action;” it must contain factual allegations sufficient to “raise a right to relief above the speculative level.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1965 (2007). “The pleading must contain something more...than...a statement of facts that merely creates a suspicion [of] a legally cognizable right of action.” Id., quoting 5 C. Wright & A. Miller, Federal Practice and Procedure 1216, pp. 235-235 (3d ed. 2004). “[A] complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949 (2009) (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id.

         Pro se pleadings are liberally construed. See Haines v. Kerner, 404 U.S. 519, 520-21, 92 S.Ct. 594, 595-96 (1972); Balistreri v. Pacifica Police Dep’t., 901 F.2d 696, 699 (9th Cir. 1988). Unless it is clear that no amendment can cure the defects of a complaint, a pro se plaintiff proceeding in forma pauperis is entitled to notice and an opportunity to amend before dismissal. See Noll v. Carlson, 809 F.2d 1446, 1448 (9th Cir. 1987); Franklin, 745 F.2d at 1230.

         The complaint names Wells Fargo Home Mortgage (“Wells Fargo”) and LeesaWhitt-Potter, Senior Vice-President, as defendants. Although the complaint mentions the Fraud Enforcement Recovery Act of 2009 (“FERA”), the complaint contains no facts supporting plaintiff’s conclusory allegation that Wells Fargo denied her requests for loan modification. Even if plaintiff could supply the facts on amendment, however, such as the dates of her requests and Wells Fargo’s alleged denials, plaintiff could not proceed under the FERA.

         In 2009, Congress amended the False Claims Act to include mortgage lending businesses. United States v. Grasso, 724 F.3d 1077, 1088 (9th Cir. 2013). Although FERA permits civil actions by private persons for violations of 31 U.S.C. § 3729, such actions are subject to strict procedural requirements, including that plaintiff must file a qui tam action which in turn requires her to be represented by counsel, and file in camera. Klaizner v. Countrywide Financial, 2015 WL 627927 at *3 (D. Nev. Feb. 12, 2015); 31 U.S.C. § 3730(b)(1); Stoner v. Santa Clara Cnty. Office of Educ., 502 F.3d 1116, 1127 (9th Cir. 2007).

FERA contained amendments to the False Claims Act, and the False Claims Act in turn permits civil actions by private persons for violations of 31 U.S.C. § 3729. See 31 U.S.C. § 3730(b). By law, such actions can be brought only “in the name of the Government, ” Id. § 3730(b)(1), and the initiation of such a suit must begin with certain specific procedures: “A copy of the complaint and written disclosure of substantially all material evidence and information the person possesses shall be served on the Government pursuant to Rule 4[(i)] of the Federal Rules of Civil Procedure. The complaint shall be filed in camera, shall remain under seal for at least 60 days, and shall not be served on the defendant until the court so orders, ” id. § 3730(b)(2). Under this statute, private persons who attempt to initiate such a suit are not actually plaintiffs but rather are deemed “relators, ” and “[b]ecause relators lack a personal interest in False Claims Act qui tam actions, [the Second Circuit has] conclude[d] that they are not entitled to proceed pro se.” United States ex rel. Mergent Servs. v. Flaherty, 540 F.3d 89, 93 (2d Cir.2008).

Ruotolo v. Fannie Mae, 933 F.Supp.2d 512, 522 (S.D.N.Y. 2013).

         Here, plaintiff proceeding in pro se has met none of these requirements. Plaintiff will, however, be permitted leave to amend to state a claim under some other theory, if she is able to do so in good faith.

         Without a FERA claim, the court can discern no other basis for federal subject matter jurisdiction. A federal court is a court of limited jurisdiction, and may adjudicate only those cases authorized by the Constitution and by Congress. See Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 377, 114 S.Ct. 1673, 1675 (1994). U.S. Const. Art. III, § 1 provides that the judicial power of the United States is vested in the Supreme Court, “and in such inferior Courts as the Congress may from time to time ordain and establish.” Congress therefore confers jurisdiction upon federal district courts, as limited by U.S. Const. Art. III, § 2. See Ankenbrandt v. Richards, 504 U.S. 689, 697-99, 112 S.Ct. 2206, 2212 (1992). Lack of subject matter jurisdiction may be raised at any time by either party or by the court. See Attorneys Trust v. Videotape Computer Products, Inc., 93 F.3d 593, 594-95 (9th Cir. 1996).

         The basic federal jurisdiction statutes, 28 U.S.C. §§ 1331 & 1332, confer “federal question” and “diversity” jurisdiction, respectively. Statutes which regulate specific subject matter may also confer federal jurisdiction. See generally, W.W. Schwarzer, A.W. Tashima & J. Wagstaffe, Federal Civil Procedure Before Trial § 2:5. Unless a complaint presents a plausible assertion of a substantial federal right, a federal court does not have jurisdiction. See Bell v. Hood, 327 U.S. 678, 682, 66 S.Ct. 773, 776 (1945). A federal claim which is so insubstantial as to ...


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