United States District Court, W.D. Washington, Seattle
STEVEN K. YOUNG, Plaintiff,
DITECH FINANCIAL LLC, QUALITY LOAN SERVICE CORP OF WASHINGTON, Defendants.
ORDER TO SHOW CAUSE AND PARTIALLY STAYING THE
L. ROBART, UNITED STATES DISTRICT JUDGE.
Order to Show Cause
28, 2019, the court ordered pro se Plaintiff Steven
K. Young to show cause why this case should not be dismissed
for lack of subject matter jurisdiction. (OSC (Dkt. # 10).)
The court noted that Mr. Young had not adequately pleaded the
parties' citizenship necessary to invoke the court's
diversity jurisdiction. (Id. at 1-2.) The court
reminded Mr. Young that “[a] limited liability company
has the citizenships of all of its members.”
(Id. at 2 (citing Johnson v. Columbia Props.
Anchorage, LP, 437 F.3d 894, 899 (9th Cir. 2006)).) The
court also noted that even construed liberally, Mr. Young
failed to properly invoke the court's federal question
jurisdiction because his claim under the Fair Debt Collection
Practices Act (“FDCPA”) relied on a statute that
does not exist, and the statute that most closely resembles
it, 15 U.S.C. § 1692e, “does not reference a
statute of limitations or the tolling thereof, which is the
basis for Mr. Young's purported FDCPA claim.” (OSC
11, 2019, Mr. Young filed a notice to voluntarily dismiss
Defendant Quality Loan Service Corp of Washington. (Dismissal
Not. (Dkt. # 15).) The following day, Mr. Young responded to
the court's order to show cause. (OSC Resp. (Dkt. # 16).)
In his response, Mr. Young alleges that he is a citizen of
Washington and that “Defendant DITECH is a citizen of
the State of Pennsylvania.” (Resp. to OSC at 2.) Mr.
Young does not assert the citizenship of any of Ditech
Financial LLC's (“Ditech”) members. (See
generally OSC Resp.) Mr. Young also states that he
“erroneously cited 1692e § 807(5) regarding his
FDCPA claim in his Complaint” and that the
“correct citation is 15 U.S.C. § 1692e.”
(Id.) Mr. Young “requests leave from the Court
to further amend his complaint” to include the above
language on diversity of citizenship, and to “remove
tolling language as follows: ‘25. Plaintiff asserts and
believes Defendant knew, as a result of the
tolling of the statute of limitation, they did not
have a right to collect payments or and or threaten to
foreclose on Plaintiff's real property.'”
(Id. at 2-3 (strikethrough in original) (bolding
omitted).) Mr. Young provides no additional facts from which
the court can determine whether Mr. Young's claim falls
under 15 U.S.C. § 1692e. (See generally id.)
Young has failed to show cause why his complaint should not
be dismissed for lack of subject matter jurisdiction. The
party invoking jurisdiction must allege facts that establish
the court's subject matter jurisdiction. Lujan v.
Defs. of Wildlife, 504 U.S. 555, 560-61 (1992). Mr.
Young failed to assert the citizenship of Ditech's
members. (See generally Resp. to OSC.) Mr. Young
also failed show cause as to the court's federal question
jurisdiction. (See generally id.) Although he
identified the specific statute under which he intends to
bring his FDCPA claim (OSC at 2 (stating that the
“correct citation is 15 U.S.C. § 1692e”)),
Mr. Young failed to assert any facts to establish that his
claim falls under that statute (see generally OSC
Resp.). Instead, Mr. Young seeks to remove language regarding
the statute of limitations and tolling from his complaint.
(See Id. at 2-3.) In doing so, however, Mr. Young
leaves his asserted claim devoid of any facts from which the
court can determine that Mr. Young has sufficiently pleaded a
claim under 15 U.S.C. § 1692e.
construing Mr. Young's request “to further amend
his complaint” (Resp. to OSC at 3) as a motion to file
a third amended complaint, the Court finds that Mr.
Young's proposed amendment would not cure his
complaint's jurisdictional defects and therefore DENIES
WITHOUT PREJUDICE Mr. Young's motion (Dkt. # 16). In
consideration of Mr. Young's pro se status, the
court will afford Mr. Young one more chance to present facts
from which the court can determine it has subject matter
jurisdiction over Mr. Young's case.
the court ORDERS Mr. Young to show cause, within 14 days, why
his complaint should not be dismissed for lack of subject
matter jurisdiction. Mr. Young is instructed to file a
written response to this order, which (a) asserts the
citizenship of each member of Ditech, and if any member of
Ditech is itself a limited liability company, each of that
company's members, until each layer of limited liability
company membership is reduced to the individual
members; and (b) asserts specific facts from which
the court can determine whether Mr. Young's claim falls
under 15 U.S.C. Section 1692e. If Mr. Young fails to show
cause once again, the court will dismiss his complaint for
lack of subject matter jurisdiction. See Fed. R.
Civ. P. 12(h)(3); Rosales v. United States, 824 F.2d
799, 803 n.4 (9th Cir. 1987) (holding that if a federal court
determines that it lacks subject matter jurisdiction at any
time during a dispute, the court must dismiss the action).
Order Staying Mr. Young's FDCPA Claim
August 5, 2019, Ditech, the sole remaining defendant,
informed the court that it and its debtor affiliates
voluntarily filed for Chapter 11 bankruptcy in the United
States Bankruptcy Court for the Southern District of New York
(“the Bankruptcy Court”). (See Bankr.
Not. (Dkt. # 20) at 1; Bankr. Pet. (Dkt. # 20-1) at 1.)
Ditech correctly asserts that “the filing of a
bankruptcy petition ‘operates as a stay, applicable to
all entities,' of, or among other things ‘the
commencement or continuation, including the issuance or
employment of process, of a judicial, administrative, or
other action or proceeding against the debtor that was or
could have been commenced before the commencement of the case
under [the Bankruptcy Code], or to recover a claim against
the debtor that arose before the commencement of the
[bankruptcy case]' and ‘any act to obtain
possession of property of the estate or of property from the
estate or to exercise control over property of the
estate.'” (Bankr. Not. at 2 (quoting 11 U.S.C.
§ 362(a)(1), (3)) (alterations in Bankr. Not).)
Ditech also informed the court that the Bankruptcy Court
issued a limited stay modification order (Stay Modification
Order (Dkt. # 20-2)), which, at Ditech's request,
modified the stay “to allow Interested Parties to
assert and prosecute claims, cross-claims, third-party
claims, and counter-claims” that fall into certain
categories, defined as “Permitted Default
Actions” (id. ¶ 16) and “Permitted
Title Disputes (id. ¶ 20). The Stay
Modification Order allows claims that fall into the defined
categories to “proceed separately from any other claim
that is stayed by the Bankruptcy Code.” (Id.
¶¶ 18, 22.) “Should there be any
disagreements between or among any Interested Parties and/or
the Debtors regarding whether any claims, cross-claims,
third-party claims, or counterclaims fall within the
exception the automatic stay approved by [the Bankruptcy
Court], [the Bankruptcy Court] shall have exclusive
jurisdiction to hear and resolve such disputes.”
(Id. (alterations added).)
parties filed a joint status report on August 21, 2019. (JSR
(Dkt. # 22).) In it, Ditech asserts that Mr. Young's
FDCPA claim is subject to the Bankruptcy Court's
automatic stay, but that “[Mr. Young's] claims for
Quiet Title and Declaratory Relief are not stayed.”
(Id. at 2.) Mr. Young makes no statement in the JSR
or otherwise regarding which of his claims are subject to the
Stay Modification Order. (See generally id.; see
generally Dkt.) The court therefore concludes that Mr.
Young's FDCPA claim-but not his claims for quiet title
and declaratory relief-are subject to the automatic stay.
See 11 U.S.C. § 362. Accordingly, the court
STAYS this case with respect to Mr. Young's FDCPA claim
until the automatic stay is lifted. Mr. Young's remaining
claims are not subject to this order to stay.
See Johnson v. Columbia Props.
Anchorage, LP, 437 F.3d 894, 899 (9th Cir. 2006)
(examining the citizenship of a limited partnership whose
partners included limited liability companies by looking to
the citizenship of the ...