United States District Court, N.D. California
ORDER GRANTING DEFENDANTS' MOTION TO DISMISS AND
REMANDING STATE LAW CLAIMS
HAYWOOD S. GILLIAM, JR. United States District Judge.
case arises out of a prior trustee sale and planned
foreclosure sale of real property located in Hayward,
California. See Dkt. No. 58 (“FAC”)
¶¶ 9-23. Pending before the Court is the motion to
dismiss under Federal Rule of Procedure 12(b)(6) filed by
Ocwen Loan Servicing, LLC; Citibank, N.A., as Trustee
American Home Mortgage Assets Trust 2006-3, Mortgage-Backed
Pass Through Certificates Series 2006-3; American Home
Mortgage Servicing, Inc.; and Mortgage Electronic Registration
Systems, Inc. (collectively, “Defendants”). Dkt.
No. 60 (“Mot.”). The Court previously dismissed
the original complaint, granting leave to amend as to
fourteen of the sixteen causes of action. Dkt. No. 57
(Diamond Real Estate v. Am. Brokers Conduit, No.
16-cv-03937-HSG, 2017 WL 412527, at *3 (N.D. Cal. Jan. 31,
2017)). Diamond Real Estate, Porfirio P. Jorque, and Editha
Palancia (collectively, “Plaintiffs”) then filed
their amended complaint, pleading eight causes of action,
including a single federal cause of action under the
Racketeer Influenced and Corrupt Organizations Act
(“RICO Act”), 18 U.S.C. § 1961 et
seq. FAC ¶¶ 24-134. Of these eight causes of
action, six were not alleged in the original complaint.
Compare Id. with Dkt. No. 1-1 ¶¶ 124-250.
Having carefully considered the arguments raised by the
parties' briefs, the Court finds this matter appropriate
for disposition without oral argument and the matter is
deemed submitted. See N.D. Civ. L.R.
addressing Defendants' pending motion to dismiss, the
Court focuses first on the only federal cause of action,
alleging that Defendants violated the RICO Act. See
FAC ¶¶ 131-34. As a threshold issue, the
Court's prior dismissal order did not grant leave to add
new claims in the amended complaint. See Diamond,
2017 WL 412527, at *11 (granting leave to amend on fourteen
of the sixteen causes of action alleged in the original
complaint). Nor did Plaintiffs seek Defendants' consent
or the Court's leave to add the RICO claim. See
Fed. R. Civ. P. 15(a)(2). Under these circumstances, new
claims asserted for the first time in an amended complaint
are typically stricken. See, e.g., Benton v.
Baker Hughes, No. CV 12-07735 MMM MRWx, 2013 WL 3353636,
at *3 (C.D. Cal. June 30, 2013) (citing cases), aff'd
sub nom. Benton v. Hughes, 623 F. App'x 888 (9th
reaching the merits, the result is no different:
Plaintiffs' RICO claim must be dismissed. “A civil
RICO claim requires allegations of the conduct of an
enterprise through a pattern of racketeering activity that
proximately caused injury to the plaintiff.” Swartz
v. KPMG LLP, 476 F.3d 756, 760-61 (9th Cir. 2007).
Moreover, to plead a civil RICO claim, plaintiffs must
satisfy the heightened pleading standard of Federal Rule of
Civil Procedure 9(b). Edwards v. Marin Park, Inc.,
356 F.3d 1058, 1061 (9th Cir. 2004); see also Fed.
R. Civ. P. 9(b) (“In alleging fraud or mistake, a party
must state with particularity the circumstances constituting
fraud or mistake.”). To avoid dismissal for inadequacy
under Rule 9(b), Plaintiffs must “state the time,
place, and specific content of the false representations as
well as the identities of the parties to the
misrepresentation.” See Edwards, 356 F.3d at
1066 (internal quotation marks omitted). In addition,
“Rule 9(b) does not allow a complaint to merely lump
multiple defendants together but requires plaintiffs to
differentiate their allegations when suing more than one
defendant and inform each defendant separately of the
allegations surrounding his alleged participation in the
fraud.” See Swartz, 476 F.3d at 764-65
(internal quotation marks and brackets omitted).
Plaintiffs fail to plead with particularity the circumstances
giving rise to the alleged RICO violation. See FAC
¶¶ 131-34. Plaintiffs make only generalized
allegations as to the “who” (i.e.,
“Defendants”), the “what” (e.g.,
“by abusing fiduciary relationships to encourage
plaintiffs to take out loans on their property, by acquiring
liens and security interests in all of plaintiffs'
property, and by keeping plaintiffs in perpetual apprehension
of foreclosure and financial ruin”), and the
“when” (“commencing on or around
07/01/15”), and are silent as to the
“where” of the alleged RICO violation. See
id. Instead, Plaintiffs essentially engage in the
“formulaic recitation of the elements of a [RICO
claim], ” which would not even be sufficient under Rule
8(a), see Bell Atl. Corp. v. Twombly, 550 U.S. 544,
555 (2007), much less under Rule 9(b). Accordingly,
Plaintiffs' RICO claim must be dismissed.
Court declines to grant leave to amend the RICO claim. In its
prior dismissal order, the Court detailed the deficiencies of
Plaintiffs' original complaint on a claim-by-claim basis,
and cautioned that its decision to grant leave to amend was
“not an invitation for Plaintiffs to replead
substantially similar facts in the hope of a different
result.” See Diamond, 2017 WL 412527, at *11.
Instead of making a good-faith effort to address the
deficiencies identified by the Court, Plaintiffs have pled
substantially similar facts while asserting, without
Defendants' consent or the Court's leave, an entirely
new (and meritless) federal RICO claim. Plaintiffs'
five-page opposition to the motion to dismiss is conclusory
and formulaic, completely fails to address the legal merits
of any of the claims, and borders on incoherency.
See Dkt. No. 64. And Plaintiffs have not explained
why the RICO claim could not have been asserted in the
original complaint. The Court therefore denies leave to amend
because, at a minimum, the RICO claim was asserted after
undue delay, and because granting further leave to amend
under these circumstances would be futile given
Plaintiffs' failure to address (or even to attempt to
address) the pervasive deficiencies identified in the
Court's detailed order. See Leadsinger, Inc. v. BMG
Music Pub., 512 F.3d 522, 532 (9th Cir. 2008) (declaring
that district court has discretion to deny leave where movant
has acted with undue delay or in bad faith, or where
amendment would be futile, among other reasons).
dismissed Plaintiffs' sole federal cause of action, the
Court must determine whether to exercise supplemental
jurisdiction over the causes of action asserted under state
law.See Sanford v. MemberWorks, Inc.,
625 F.3d 550, 561 (9th Cir. 2010) (“A district court
‘may decline to exercise supplemental jurisdiction'
if it ‘has dismissed all claims over which it has
original jurisdiction.'” (quoting 28 U.S.C. §
1367(c)(3)). Where all federal claims are eliminated before
trial, the various pendant jurisdiction factors (judicial
economy, convenience, fairness, and comity) typically weigh
in favor of declining to exercise jurisdiction over the
remaining state claims. Id. Given the early stage of
these proceedings, California's interest in applying its
own law, and the absence of any countervailing factors, the
Court declines to exercise supplemental jurisdiction over the
state law claims. Since the sole basis of removal was federal
question jurisdiction, see Dkt. No. 1 ¶ 9,
remand of the state law claims is appropriate, see
Carlsbad Tech., Inc. v. HIF Bio, Inc., 556 U.S. 635,
636-37 (2009); Bierman v. Toshiba Corp., No.
C-10-4203 MMC, 2010 WL 4716879, at *2 (N.D. Cal. Nov. 12,
2010), aff'd, 473 F. App'x 756, 757 (9th
foregoing reasons, the Court DISMISSES Plaintiffs' Eighth
Cause of Action with prejudice. This dismissal applies to all
defendants named in this action. The Court REMANDS the case
to state court. The clerk is directed to remand the case
forthwith to Alameda County Superior Court and close the
 In February 2012, American Home
Mortgage Servicing, Inc. changed its name to Homeward
Residential, Inc. Dkt. No. 9.
 Plaintiffs also seek declaratory
relief. See FAC ¶¶ 24-38 (First Cause of
Action). However, this is not a standalone federal claim. As
described in the Court's prior order, the Declaratory
Judgment Act (“DJA”), 28 U.S.C. § 2201,
provides an additional remedy, not an independent theory of
recovery. See Diamond, 2017 WL 412527, at *10
(citing Team Enters., LLC v. W. Inv. Real Estate
Trust, 721 F.Supp.2d 898, 911 (E.D. Cal. 2010)).
 Specifically, the Court has weighed
the arguments raised by the motion, opposition, and reply
briefs. See Dkt. Nos. 60, 64-65. However, the Court
does not consider the arguments raised by Plaintiffs'
supplemental brief, filed approximately six weeks after the
reply in obvious violation of the Local Rules. See
Dkt. No. 66; Civil L.R. 7-3(d) (prohibiting the filing of any
supplemental material after the reply, with two exceptions
(objections to reply evidence and statements of recent
decisions), neither of which applies to Plaintiffs'