MARGARET M. MORROW, District Judge.
On July 31, 2009, plaintiff Juniaty Prawoto commenced this action in Los Angeles Superior Court against defendant PrimeLending, a Plains Capital Company ("PrimeLending"), and certain fictitious defendants, alleging, inter alia, multiple state and federal violations in connection with a mortgage loan PrimeLending made to Prawoto in connection with an investment property located in Oak Point, Texas.
The court delayed its decision of the motion because, on November 3, 2009, plaintiff's lawyer, Timothy Thurman, was suspended by the State Bar of California. Because plaintiffs' counsel had filed no pleadings and made no appearance subsequent to removal of the action to federal court, the court was concerned that plaintiff was unaware of the status of the action. In January 2010, the court obtained a mailing address for plaintiff and sent a notice regarding the case to that address. The notice asked that plaintiff advise the court by February 8, 2010 if she had received notice. To date, the court has received no response from plaintiff.
A party wishing to challenge venue may file a motion under Rule 12(b)(3) of the Federal Rules of Civil Procedure and 28 U.S.C. § 1406, which provides that a district court shall dismiss or transfer a case if venue is improper. Venue in federal courts is governed entirely by statute. See Leroy v. Great Western United Corp., 443 U.S. 173, 181, 99 S.Ct. 2710, 61 L.Ed.2d 464 (1979). If the court finds that the case has been filed "in the wrong division or district," it must "dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought." 28 U.S.C. § 1406(a).
On a motion to dismiss for improper venue, "the pleadings need not be accepted as true, and the court may consider facts outside of the pleadings." Murphy v. Schneider National, Inc., 349 F.3d 1224, 1229 (9th Cir.2003) (citation omitted). Plaintiff bears the burden of showing that venue is proper in this district. See Piedmont Label Co. v. Sun Garden Packing Co., 598 F.2d 491, 496 (9th Cir.1979) ("Plaintiff had the burden of showing that venue was properly laid in the Northern District of California").
Section 1406, however, applies only to "transitory" actions, however; different rules apply to "local" actions. 14D Charles D. Wright, Arthur R. Miller, & Edward H. Cooper, FEDERAL PRACTICE AND
Chief Justice Marshall reviewed the history of distinguishing between local and transitory actions. He noted that "originally all actions were local" in that they had to be tried before a jury within the same geographic subdivision, such as a county, where the facts giving rise to the claim had taken place. Chief Justice Marshall related, however, that over time, the courts of England had exercised their power to direct a jury to every part of the kingdom, and that, as a result, English courts had created the legal fiction that the only relevant geographic subdivision was England itself. Employing this fiction, they held that so long as the transaction giving rise to the action took place within the realm, it could be heard by any court in the country. Chief Justice Marshall noted that this legal fiction was used for "all personal torts, and ... all contracts wherever executed," but that it had not been applied to causes of action regarding land where "investigation of title [might] become necessary" or a "question of boundary [might] arise, and a survey [might] be essential to the full merits of the cause." Id. at 663-64.
Chief Justice Marshall thus endorsed the concept of local action venue even though the Judiciary Act of 1789 included no provision implementing it. To this day, in fact, there is no federal law of general application fixing the venue of local actions. "Thus, this concept imported from the common law now is established firmly in our jurisprudence and the [Livingston] case makes it as clear as anything can be that this distinction exists and that local actions can be brought only where the property involved in the action is located." 14D Wright, Miller, & Cooper, § 3822.
In Casey v. Adams, 102 U.S. 66, 26 L.Ed. 52 (1880), for example, the Court held that even a special venue statute that sharply restricted the choice of venue in suits against national banks did not apply to a local action, and that an action within the scope of the statute could be brought only where the property was located:
See also Mason v. United States, 260 U.S. 545, 558, 43 S.Ct. 200, 67 L.Ed. 396 (1923) ("Here, while the suit is one in equity, the statute and decisions relied upon have nothing to do with the general principles of equity or with federal equity jurisdiction, but simply establish a measure of damages applicable alike to actions at law and suits in equity. The case presented by the bills is primarily one involving title to land and seeking an injunction against continuing trespasses. The conversion of the oil, for which damages are sought, is incidental and dependent. The entire cause of action is therefore local"); Collett v. Adams, 249 U.S. 545, 550, 39 S.Ct. 372, 63 L.Ed. 764 (1919) (holding that the venue provisions of the Bankruptcy Act were superseded by the local action doctrine); Ellenwood v. Marietta Chair Co., 158 U.S. 105, 107, 15 S.Ct. 771, 39 L.Ed. 913 (1895) ("By the law of England, and of those states of the Union whose jurisprudence is based upon the common law, an action for trespass upon land, like an action to recover the title or the possession of the land itself, is a local action, and can only be brought within the state in which the land lies").
In 1914, the Ninth Circuit considered a case concerning a nuisance on Sand Island, which sits at the mouth of the Columbia River between Washington and Oregon. Columbia River Packers' Association v. McGowan, 219 F. 365 (9th Cir.1914). Although originally thought to be in Washington, while the case was pending before the federal district court in that state, the Supreme Court decided in a separate action that Sand Island was in fact part of Oregon. Thereafter, plaintiff filed a motion to dismiss the action for lack of subject matter jurisdiction, which the district court denied. On appeal, the Ninth Circuit reversed. Id. at 377 ("On the other hand, where the suit is strictly local, the subject-matter is specific property, and the relief when granted is such that it must act directly upon the subject-matter, and not upon the person of the defendant the jurisdiction must be exercised in the state where the subject-matter is situated"). See also United States v. Byrne, 291 F.3d 1056, 1060 (9th Cir.2002) ("The federal district courts' jurisdiction over actions concerning real property is generally coterminous with the states' political boundaries"). Given the decision in McGowan, courts in this circuit treat the local action doctrine as foreclosing subject matter jurisdiction where it applies.
Under California law, prior to 1966, whether an action was local or transitory was governed by Article VI, § 5 of the California Constitution. Upon repeal of that provision, the question was governed by Code of Civil Procedure § 392, which broadened the definition of what constitutes a local action. 3 B.E. Witkin, CALIFORNIA PROCEDURE (5th ed. 2009) ACTIONS, § 792. Section 392 defines a local action, inter alia, as one seeking a determination or recovery of an interest in property as well as for injuries to property. CAL.CODE CIV. PROC. § 392(a). By contrast, the former constitutional provision denominated local "all actions for the recovery of the possession of, quieting the title to, or for the enforcement of liens upon real estate." Former CAL. CONST., Art. VI, § 5, quoted in Witkin, CALIFORNIA PROCEDURE, § 792. The broader definition set forth in § 392(a) applies in this case. Under that definition, venue is laid in the county where the real property is situated in the following types of actions:
The former constitutional provision treated the local action doctrine as a question of subject matter jurisdiction; § 392, by contrast, treats it as a venue issue. Compare Fritts v. Camp, 94 Cal. 393, 397-98, 29 P. 867 (1892) (holding that only courts in the county where property was situated had jurisdiction to hear an action concerning the property) with Nelson v. Crocker National Bank, 51 Cal.App.3d 536, 540, 124 Cal.Rptr. 229 (1975) ("On the date of trial of the Alameda County action (and the motion to change venue), the law was abundantly clear that the place of filing an action affecting real property involves questions of venue only, not jurisdiction").
"In applying [§ 392] to determine the county (or counties) where venue is proper, the [California] courts generally look to the main relief sought, as determined from the complaint as it stands at the time of the motion for change of venue." K.R.L. Partnership v. Superior Court, 120 Cal.App.4th 490, 496-97, 15 Cal.Rptr.3d 517 (2004) (citing Massae v. Superior Court, 118 Cal.App.3d 527, 530, 173 Cal.Rptr. 527 (1981)). "One approach to fixing venue in an action involving multiple causes of action is to determine the essence of the action. What is its `nature?'... What is its `subject-matter?' ... What is `the main relief sought?' ... This approach ascertains the essential character of the action to establish venue." Foundation Engineers, Inc. v. Superior Court, 19 Cal.App.4th 104, 109, 23 Cal.Rptr.2d 469 (1993) (quoting Smith v. Smith, 38 P. 43, 4 Cal. Unrep. 860, 861 (1894); Smith v. Smith, 88 Cal. 572, 576, 26 P. 356 (1891); and Grangers' Bank v. Superior Court, 33 P. 1095, 4 Cal. Unrep. 130, 133 (1893)).
Using this state venue provision to determine federal subject matter jurisdiction raises unique concerns. For example, some California courts hold that "[w]hen a plaintiff joins local and transitory causes of action [in a single action], venue follows the transitory cause of action." Foundation Engineers, 19 Cal.App.4th at 109, 23 Cal.Rptr.2d 469. They reach this result because repeal of the constitutional provision vested subject matter jurisdiction to hear local actions in all California courts; where only a local cause of action is asserted, § 392 lays venue where the real property is located. Where a local action is joined with a transitory action, however, § 392 does not control. Thus, to determine where venue is proper, California courts ask two questions: first, is there a local action within the definition of the statute; and second, is there also a transitory action such that venue is proper in more than one forum.
Because the local action doctrine vests exclusive jurisdiction in the state where the real property is situated, a federal court would not ask the second question. See Clarke v. Clarke, 178 U.S. 186, 191-92, 20 S.Ct. 873, 44 L.Ed. 1028 (1900) ("This is but to contend that what cannot be done directly can be accomplished by indirection, and that the fundamental principle which gives to a sovereignty an exclusive jurisdiction over the land within its borders is in legal effect dependent upon the nonexistence of a decree of a court of another sovereignty determining the status of such land. Manifestly, however, an authority cannot be said to be exclusive, or even to exist at all, where its exercise may be thus frustrated at any time"); see also Durfee v. Duke, 375 U.S. 106, 115, 84 S.Ct. 242, 11 L.Ed.2d 186 (1963) (noting the Court's "emphatic expressions of the doctrine that courts of one State are completely without jurisdiction directly to affect title to land in other States"); Voda v. Cordis Corp., 476 F.3d 887, 901 (Fed.Cir. 2007) ("[T]he local action doctrine informs us that exercising supplemental jurisdiction in this case appears to violate our own norms of what sovereigns ordinarily expect"); Gulf Oil, 821 F.2d at 287 ("Following Livingston, the Supreme Court has consistently recognized that a local action must be brought within the state where the land is located," and this rule "is so fundamental that state courts are not obligated to give full faith and credit to judgments from either federal or state courts sitting outside the local state's territorial boundaries"); Asociacion de Reclamantes v. United Mexican States, 735 F.2d 1517, 1522 (D.C.Cir.1984) (Scalia, J.) ("[T]he local action rule ... makes the locality's power exclusive and deprives other courts of jurisdiction to settle questions involving real estate"); Humble Oil & Refining Co. v. Copeland, 398 F.2d 364, 367 (4th Cir. 1968) ("Texas courts, or federal courts sitting
Stated differently, because the local action doctrine vests exclusive jurisdiction over actions involving land in the forum where the land is located, a federal court not sitting in that forum cannot exercise supplemental jurisdiction over such a claim. Federal courts simply do not recognize the form of "pendent venue" available under California law. Once a federal court determines the state that has exclusive jurisdiction over a local action, it must dismiss or transfer the action to a court sitting in that state.
The conclusion that the Eastern District of Texas is the proper venue for plaintiff's claims does not compel dismissal of the action. If a court lacks jurisdiction over a federal civil action, "the court shall, if it is in the interest of justice, transfer such action or appeal to any other such court in which the action or appeal could have been brought at the time it was filed." Puri v. Gonzales, 464 F.3d 1038, 1042 (9th Cir.2006) (quoting 28 U.S.C. § 1631). See 28 U.S.C. § 1361 ("Whenever a civil action is filed in a court ... and
In the Ninth Circuit, "[o]nce the district court has determined that it lacks jurisdiction, but that another federal court has authority to hear the case, the district court `must consider whether the action would have been timely if it had been filed in the proper forum on the date filed, and if so, whether a transfer would be in the interest of justice.'" Hays v. Postmaster General of United States, 868 F.2d 328, 331 (9th Cir.1989) (citing Taylor v. Social Security Administration, 842 F.2d 232, 233 (9th Cir.1988), and quoting Hill v. United States Air Force, 795 F.2d 1067, 1070 (D.C.Cir.1986)). If the action would have been timely if filed in the proper federal court on the date it was filed in the court lacking jurisdiction, and if a transfer would be in the interest of justice, the court "shall" transfer the action to the appropriate federal court. See id.; Puget Sound Energy, Inc. v. United States, 310 F.3d 613, 620-21 (9th Cir.2002). See also Patriot Contract Services, LLC v. United States, No. C-04-5428 MJJ, 2005 WL 851019, *1 (N.D.Cal. Apr. 13, 2005) ("Pursuant to 28 U.S.C. § 1631, where a court finds that it lacks subject matter jurisdiction over a case, it must transfer the case to `any other such court in which the action or appeal could have been brought at the time it was filed or noticed,'" quoting 28 U.S.C. § 1631). The court may transfer an action to the appropriate federal court sua sponte. Hays, 868 F.2d at 331 ("Although Hays did not move the court to transfer the case, we have held that `[a] motion to transfer is unnecessary because of the mandatory cast of section 1631's instructions,'" quoting Harris v. McCauley (In re McCauley), 814 F.2d 1350, 1352 (9th Cir.1987)).
PrimeLending does not dispute that the Eastern District of Texas has jurisdiction to hear Prawoto's action. It appears however, that many of Prawoto's claims may have been time-barred when the action was filed on July 31, 2009. The allegedly discriminatory acts that form the basis of Prawoto's claim under the Equal Credit Opportunity Act, for example, occurred prior to or at the same time as execution of the mortgage agreement on June 23, 2006.
There is also substantial question as to whether plaintiff's claims under the Truth in Lending Act ("TILA") and the Real Estate Settlement Procedures Act ("RESPA") were timely. See 15 U.S.C. § 1640(e) ("Any action under [TILA] may be brought in any United States district court ... within one year from the date of the occurrence of the violation"); King v. California, 784 F.2d 910, 913-15 (9th Cir. 1986) ("[T]he limitations period in Section 1640(e) runs from the date of consummation of the transaction but ... the doctrine of equitable tolling may, in the appropriate circumstances, suspend the limitations period until the borrower discovers or had reasonable opportunity to discover the fraud or nondisclosures that form the basis of the TILA action. Therefore, as a general rule the limitations period starts at the consummation of the transaction. The district courts, however, can evaluate specific claims of fraudulent concealment and equitable tolling to determine if the general rule would be unjust or frustrate the purpose of the Act and adjust the limitations period accordingly"); 12 U.S.C. § 2614 ("Any action pursuant to the provisions of section 2605, 2607, or 2608 of this title may be bought in the United States district court ... within 3 years in the case of a violation of section 2605 and 1 year in the case of a violation of section 2607 or 2608"); Brewer v. Indymac Bank, 609 F.Supp.2d 1104, 1117 (E.D.Cal.2009) ("The Ninth Circuit has not decided whether the doctrine of equitable tolling may, in appropriate circumstances, suspend the limitations period until the borrower discovers or had reasonable opportunity to discover the violations that form the basis of plaintiffs' RESPA action"). Because Prawoto has not opposed the motion to dismiss, the court is not in a position to determine whether equitable tolling is available for her TILA and RESPA claims.
Several of Prawoto's state law claims, by contrast, appear to be timely. The statute of limitations on Prawoto's breach of fiduciary duty claim is four years. Stalberg v. Western Title Insurance Co., 230 Cal.App.3d 1223, 1230, 282 Cal.Rptr. 43 (1991) (citing CAL.CODE CIV. PROC. § 343). While the statute of limitations on Prawoto's fraud claim is three years, F.D.I.C. v. Dintino, 167 Cal.App.4th 333, 348, 84 Cal.Rptr.3d 38 (2008), it does not commence to run until Prawoto knew facts sufficient to place a reasonably prudent person on notice that fraud had been committed. Cleveland v. Internet Specialties West, Inc., 171 Cal.App.4th 24, 31, 88 Cal.Rptr.3d 892 (2009). The complaint does not allege sufficient facts to determine when the fraud cause of action accrued. It is thus possible that this claim is timely. Prawoto's claim for violation of California Business and Professions Code § 17200 also appears to be timely. See CAL. BUS. & PROF.CODE § 17208 ("Any action to enforce any cause of action pursuant to this chapter shall be commenced within four years after the cause of action accrued"). Finally, Prawoto's claim alleging a breach of the
There is limited authority as to how a court should apply § 1631 to an action that alleges some claims that are time-barred, and others that may be timely. The Federal Court of Claims has held that where "the entire action is barred from proceeding in this forum, [yet] some—but not all— of the claims therein may be properly heard in another court . . . we may be able to render plaintiff some limited assistance via 28 U.S.C. § 1631. Said section allows us to transfer claims over which we lack jurisdiction to a court wherein jurisdiction is proper." Lan-Dale Co. v. United States, 60 Fed.Cl. 299, 303 (2004). Given this limited authority, and the court's conclusion that the timeliness of several of plaintiff's causes of action cannot be fully ascertained on the present record, the court finds it appropriate to evaluate whether transfer or dismissal best serves the interests of justice.
Prawoto alleges that foreclosure is imminent and seeks equitable relief to prevent such action. The parties would clearly benefit from a prompt resolution that will resolve their competing interests in the Texas property. "[Section 1631] serves to `aid litigants who were confused about the proper forum for review.'" In re McCauley, 814 F.2d 1350, 1352 (9th Cir.1987) (quoting American Beef Packers, Inc. v. ICC, 711 F.2d 388, 390 (D.C.Cir. 1983)). As the court's opinion has highlighted, the local action doctrine is among the more obscure and confusing jurisdictional doctrines. Consequently, the court concludes that plaintiff should not be penalized for misapprehending its application to this case.
Having decided that at least some claims may be timely and that the interests of justice favor transfer over dismissal, the court transfers this action to the Eastern District of Texas.
For the reasons stated, defendant's motion to dismiss is denied. Defendant's motion to transfer the case to the Eastern District of Texas is granted, and the court directs the clerk to transfer the action forthwith.
Fisher also noted that Supreme Court precedent both before and after Huntington confirmed that whether an action was local or transitory was to be determined by federal, rather than state, law. Id. at 544.
Whether California or federal common law is applied, however, the result is the same. The local action doctrine exists "to prevent a court from issuing an extraterritorial judgment that the court has no power to enforce, such as a judgment that would require officers in a foreign jurisdiction to put someone either in or out of possession of land." Fisher, 243 F.Supp.2d at 547. "A court also might find it necessary to use law enforcement officials to effectuate an order involving something less than possession, such as a survey." Id. Here, plaintiff's complaint suggests that foreclosure on the land in Texas may be imminent. (Complaint, ¶ 23.) To effectuate any orders issued in this case, the court might well have to order that possession of the property be transferred. Under Texas law, moreover, a mortgage is recorded by county officials; if plaintiff prevails, the court may have to order these officials to amend their records. See TEX. LOCAL GOV'T CODE § 192.001. Gulf Oil, 821 F.2d at 287 ("The local action rule is so fundamental that state courts are not obligated to give full faith and credit to judgments from either federal or state courts sitting outside the local state's territorial boundaries").
Among the few federal courts that have applied federal law, there has been consensus that the issue is one of choice of remedy. In Van Beek v. Ninkov, 265 F.Supp.2d 1037 (N.D.Iowa 2003), plaintiffs sought, inter alia, declaratory and injunctive relief that would have resulted in a transfer of title to land located in California. Id. at 1045. Citing Eighth and Seventh Circuit precedent, the court concluded that "[t]he `determinative element' for a transitory action is whether the relief requested is `personal' in nature, so that the court can act on the person or personal property of the defendant, in the court's control, rather than on the lands involved." Id. at 1044. In Raphael J. Musicus, Inc. v. Safeway Stores, Inc., 743 F.2d 503, 506 (7th Cir. 1984), the court emphasized that plaintiffs did not seek to recover possession of property, although they might have been entitled to it. Id. at 509. The nature of the relief sought caused the court to conclude that the action was not local. In McAdoo v. Union National Bank of Little Rock, Arkansas, 558 F.2d 1313 (8th Cir. 1977), the Eighth Circuit held:
See also Kavouras v. Fernandez, 737 F.Supp. 477, 478 (N.D.Ill. 1989) (finding that a mortgage foreclosure action had to be brought in Wisconsin, where the land was located, because otherwise the court would have been placed in "the untenable position of purporting to affect real estate title records in Wisconsin, purporting to require local officials there (over whom this Court clearly has no jurisdiction) to conduct a foreclosure sale or record its results—and it is scarcely necessary to extend the list of intolerable consequences"); Centennial Petroleum, Inc. v. Carter, 529 F.Supp. 563, 564-65 (D.Colo. 1982) (finding that an action was transitory where plaintiff sought money damages only and there was no claim of trespass, waste, or injury to land). In combination with Fisher, these decisions make it clear that where plaintiff chooses a remedy that affects title to or possession of land, such that the court might have to order local officials to record a change in title or other records or effectuate a change in possession, plaintiff pursues an action that is inherently local and that must be brought in the state where the real property is situated. There is no question that Prawoto seeks remedies that affect title to the Texas land; he seeks, in fact, to quiet title in her favor. Under federal common law, therefore, this is a local action.