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Davis v. Ocwen

United States District Court, D. Oregon

April 23, 2019

OCWEN, et al., Defendants.


          Michael H. Simon United States District Judge

         Plaintiff, in her Second Amended Complaint, asserts claims against Defendants Ocwen, HSBC Bank USA (whom she asserts is owned by Ocwen), as well as additional John and Jane Doe defendants, two defendants named Vaillancourt, G & T, and miscellaneous Vaillancourt defendants. For the reasons stated below, Plaintiff's claims against Ocwen and HSBC Bank, USA, are dismissed with prejudice and Plaintiff's claims against Vaillancourt, G & T are dismissed without prejudice.


         A court must liberally construe the filings of a pro se plaintiff and afford the plaintiff the benefit of any reasonable doubt. Hebbe v. Pliler, 627 F.3d 338, 342 (9th Cir. 2010). “‘Unless it is absolutely clear that no amendment can cure the defect, . . . a pro se litigant is entitled to notice of the complaint's deficiencies and an opportunity to amend prior to dismissal of the action.'” Garity v. APWU Nat'l Labor Org., 828 F.3d 848, 854 (9th Cir. 2016) (alteration in original) quoting Lucas v. Dep't of Corr., 66 F.3d 245, 248 (9th Cir. 1995) (per curiam)). Under Federal Rule of Civil Procedure 8(a)(2), however, every complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” This standard “does not require ‘detailed factual allegations, '” but does demand “more than an unadorned, the defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). “A pleading that offers ‘labels and conclusions' or ‘a formulaic recitation of the elements of a cause of action will not do.'” Id. (quoting Twombly, 550 U.S. at 555).

         A complaint fails to state a claim when there is no cognizable legal theory or the factual allegations are insufficient to support a claim for relief. Shroyer v. New Cingular Wireless Servs., Inc., 622 F.3d 1035, 1041 (9th Cir. 2010). In evaluating the sufficiency of a complaint's factual allegations, the court must accept as true all well-pleaded material facts alleged in the complaint and draw all reasonable inferences in favor of the plaintiff. Wilson v. Hewlett-Packard Co., 668 F.3d 1136, 1140 (9th Cir. 2012); Daniels-Hall v. Nat'l Educ. Ass'n, 629 F.3d 992, 998 (9th Cir. 2010). But to be entitled to a presumption of truth, the complaint must do more than simply allege legal conclusions couched as factual allegations. Iqbal, 556 U.S. at 678-79. The plaintiff “may not simply recite the elements of a cause of action, but must [provide] sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively.” Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011). The underlying factual allegations must “plausibly suggest an entitlement to relief.” Id. (emphasis added). “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.” Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556).

         Pursuant to the Rooker-Feldman[1] doctrine, federal courts lack jurisdiction to hear cases that amount to collateral attacks on state court judgments. The basic premise of that doctrine is that “a federal district court does not have subject matter jurisdiction to hear a direct appeal from the final judgment of a state court.” Noel v. Hall, 341 F.3d 1148, 1154 (9th Cir. 2003). Instead, the United States Supreme Court is the only federal court with jurisdiction to hear appeals from state courts. Id.; see 28 U.S.C. § 1257.

         The scope of the Rooker-Feldman doctrine includes de facto appeals from a state court decision and “any issue raised in the suit that is ‘inextricably intertwined' with an issue resolved by the state court in its judicial decision.” Noel, 341 F.3d at 1158. This rule also applies to constitutional claims under Section 1983. See Worldwide Church of God v. McNair, 805 F.2d 888, 893 n.4 (9th Cir. 1986). A claim is inextricably intertwined with a state court judgment if the federal claim can succeed only to the extent that the state court wrongly decided the issues before it. Doe & Assocs. Law Offices v. Napolitano, 252 F.3d 1026, 1029-30 (9th Cir. 2001). A claim also is “inextricably intertwined where the relief requested in the federal action would effectively reverse the state court decision or void its ruling.” Cooper v. Ramos, 704 F.3d 772, 779 (9th Cir. 2012) (quotation marks omitted).

         Rooker-Feldman bars a suit from going forward if: (a) the plaintiff in the federal suit lost in the state court proceeding; (b) the state court determination is at the core of the federal lawsuit; (c) the federal lawsuit seeks review and rejection of the state court verdict; and (d) the state court judgment was entered before commencement of the federal action. McKithen v. Brown, 481 F.3d 89, 97 (2nd Cir. 2007).

         Rooker-Feldman, however, does not bar a federal suit to set aside a state court judgment if that judgment was obtained by extrinsic fraud. Kougasian v. TMSL, Inc., 359 F.3d 1136, 1141 (9th Cir. 2004). Fraud on a court is “not an error by that court, ” but instead is “a wrongful act committed by the party or parties who engaged in the fraud.” Id.Rooker-Feldman therefore does not bar subject matter jurisdiction when a federal plaintiff alleges a cause of action for extrinsic fraud on a state court and seeks to set aside a state court judgment obtained by that fraud.” Id. If the parties raised the issue of fraud before the state court, however, and the state court made a determination that there was no fraud, then Rooker-Feldman does apply. Reusser v. Wachovia Bank, N.A., 525 F.3d 855, 860 (9th Cir. 2008).

         When an issue has already been litigated in court, future litigants are barred from bringing those same challenges again under the doctrine of collateral estoppel. See Parklane Hosiery Co., v. Shore, 439 U.S. 322, 328 (1979). For issue preclusion (also known as collateral estoppel) to apply, three factors must be considered:

(1) the issue at stake must be identical to the one alleged in the prior litigation; (2) the issue must have been actually litigated [by the party against whom preclusion is asserted] in the prior litigation; and (3) the determination of the issue in the prior litigation must have been a critical and necessary part of the judgment in the earlier action.

Trevino v. Gates, 99 F.3d 911, 923 (9th Cir. 1996) (quoting Town of North Booneville v. Callaway, 10 F.3d 1505, 1508 (9th Cir. 1993)).


         In her Second Amended Complaint, ...

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