LAWRENCE O. ANDERSON, Magistrate Judge.
This matter arises on Defendant Executive Trustee Services, LLC's ("Defendants" or "ETS") and Defendant Mortgage Electronic Registration Systems, Inc.'s ("Defendants" or "MERS") Motion to Dismiss Plaintiffs Arnoldo Castro's and Elizabeth Gutierrez' Complaint pursuant to Rule 12(b)(6), Fed.R.Civ.P., on the grounds that the Complaint fails to state claims against Defendants upon which relief may be granted. (docket # 9) Defendants also contend the Complaint's fraud-based allegations should be dismissed because they fail to satisfy the standard of particularity imposed by Rule 9(b), Fed.R.Civ.P., and request an order expunging the Notice of Lis Pendens recorded with the Maricopa County Recorder on October 21, 2008. The Court concludes that oral argument on the pending Motion is unnecessary because the parties have adequately briefed the issues. Mahon v. Credit Bur. of Placer County, Inc., 171 F.3d 1197, 1200 (9th Cir. 1999).
All parties have expressly consented in writing to magistrate-judge jurisdiction pursuant to 28 U.S.C. § 636(c). (docket ## 11, 12, 25) After considering the parties' briefings and relevant case law, the Court will grant the Motion and will dismiss the Complaint with leave to amend one claim.
Arnoldo Castro and Elizabeth Gutierrez ("Plaintiffs"), "unable to make timely [loan] payments on [their home]," docket # 13 at 2, filed this lawsuit against ETS, trustee on the home's deed of trust, and MERS, the identified beneficiary in the deed of trust and alleged nominee of the original lender and its successors and assigns. (Deed of trust, Exhibit ("Exh.") A; docket 9-2 at 2) Plaintiffs, husband and wife, purchased their home, located in Laveen, Arizona, on July 27, 2006, after obtaining a $240,000 loan from Home Loan Corporation d/b/a Expended Mortgage Credit ("Home Loan Corp.") which was applied to the home's purchase price. (docket # 13 at 2) Plaintiffs acknowledge that "[i]n exchange for the loan, Plaintiffs executed a promissory note which entitled Home Loan Corp. to foreclose on the subject property should Plaintiffs default on the loan." (Id.) Defendants seek to foreclose on the deed of trust which secured the note under the contract for sale. Plaintiffs concede they have defaulted on the loan payments.
After receiving the Notice of Trustee's Sale, Plaintiffs were unable to obtain information informally from ETS and MERS and commenced this action in the Maricopa County Superior Court on October 21, 2008, seeking to enjoin their home's foreclosure and obtain an award of damages. (Exh. 1 to Complaint; docket # 1-3 at 14-15; Complaint, docket # 1-3 at 5-8) ETS and MERS timely removed this lawsuit to this District Court on November 21, 2008. (docket # 1)
This District Court has federal-question jurisdiction over this case pursuant to 28 U.S.C. § 1331 because some of Plaintiffs' claims arise under the laws of the United States. Venue is proper pursuant to 28 U.S.C. §§ 82, 1441(a) and LRCiv 5.1 and 77.1(a).
Defendants ETS and MERS contend Plaintiffs filed this lawsuit and related lis pendens solely to delay foreclosure of their home. (docket # 9 at 4) Plaintiffs contend, however, that their "central claim," is that the "beneficiaries of the Note are not in possession of the original [note and are] not entitled to enforce the Note under the law of negotiable instruments as codified in the Uniform Commercial Code." (Response; docket # 13 at 7) Plaintiffs claim that "[u]nder the law of negotiable instruments as codified in the Uniform Commercial Code (codified in Arizona at [Arizona Revised Statutes ("A.R.S.")] § 47-3101, et. [seq.]) a purported holder of a Note who is not in possession of the original negotiable instrument is not entitled to enforce the Note." (Id. at 2) Plaintiffs' Response cites no Arizona case as authority but refers to A.R.S. §§ 47-3101
The Complaint alleges four causes of action, identified or generally described as follows: (1) declaratory relief (Count One); (2) unfair debt collection practices (Count Two); (3) predatory lending practices (Count Three); and (4) federal and Arizona RICO violations (Count Four). (docket # 1-3 at 5-12; docket # 6-7) The declaratory relief cause of action asserts a state-law claim "to have a declaration of [Plaintiffs'] rights, status and other legal relations" to their home pursuant to A.R.S. § 12-1832. (Id. at ¶ 26) The unfair debt collection practices cause of action claims federal statutory violations of: (a) the Federal Fair Debt Collections Act ("FDCPA"), 15 U.S.C. §§ 1692 et seq.; and (b) the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. §§ 2601-2617. The predatory lending practices' cause of action alleges violations of the following federal statutes: (a) the Home Ownership and Equity Protection Act ("HOEPA"), 15 U.S.C. § 1637; (b) the Truth in Lending Act ("TILA"), 15 U.S.C. § 1601; and (c) the Federal Trade Commission Act ("FTCA"), 15 U.S.C. §§ 41-58.
The Complaint alleges, inter alia, that:
1. ETS is "the Trustee named in Exhibit 1 [Notice of Trustee's Sale for Plaintiffs' home]." (docket 1-3, ¶ 5)
2. MERS "is the alleged beneficiary named in [the Notice of Trustee's Sale]. . . and is directing said Trustee to proceed under a power of sale to foreclose." (Id. at ¶ 6)
3. "The Notice of Trustee's Sale . . . was issued by Defendant, ETS, at the insistence of Defendant, MERS. (Id. at ¶ 9)
4. MERS "is not the holder of the note identified in the security instrument that is identified in [the Notice of Trustee's Sale], is not in possession of the original note properly endorsed to it, nor was it otherwise entitled by law in [Arizona] to initiate foreclosure under the security instrument identified therein." (Id. at ¶ 11)
5. MERS "has no right to initiate foreclosure under the security instrument identified in the Notice of Sale . . . nor did it have the right to direct [ETS] to foreclose and sell the subject property." (Id. at ¶ 12)
6. ETS was placed on "notice of Plaintiffs' claim that [MERS] has no present right to initiate foreclosure . . . unless and until [Plaintiffs have] obtained proof that [MERS] actually has in its possession the original note properly endorsed to it or assigned to it as of a date preceding the notice of default recorded by [ETS]." (Id. at ¶ 13)
7. "The true facts were that [ETS and MERS] were not in possession of the note and either (sic) [neither were] holders of the note or non-holders of the note entitled to payment, as those terms are used in Commercial Code §§ 3301, 3309, and therefore they were proceeding (sic) to foreclose non-judicially without right under the law. . . ." (Id. at ¶ 22)
While they contend the allegations in their Complaint fully comply with the new Twombly standard, "should this Court agree that any of the claims lack the requisite specificity, Plaintiffs hereby ask for Leave to Amend in lieu of dismissal of the claims." (docket # 13 at 6) Plaintiffs' Response provides no factual details exactly how ETS and MERS violated the various federal statutes alleged in the Complaint.
On the other hand, Defendants argue that the Complaint's conclusory allegations fail to state claims upon which relief may be granted for violations of the FDCPA and RESPA because the Complaint provides no guidance or specifics as to what ETS and MERS did or failed to do to violate these federal acts. "Plaintiffs' complaint utterly fails to allege how ETS and MERS supposedly violated RESPA, or which provision within RESPA they believe ETS and MERS violated." (docket # 9 at 11) Similarly, Defendants argue that Plaintiffs' Third Cause of Action, labeled "Predatory Lending Practices," fails to identify any facts to support how Defendants ETS and MERS violated: (1) HOEPA; (2) TILA; and/or (3) FTCA. (Id.) Indeed, Plaintiffs allege they "believe Defendants have engaged in deceptive practices" that violate HOEPA, TILA, and FTCA, the "specifics of [those deceptive practices] are unknown" and Plaintiffs intend to uncover the facts through discovery and amend their Complaint accordingly. (docket # 1-3, ¶¶ 35-36).
Defendants point out, among others, that "[n]ot every loan is subject to HOEPA[,]" citing 15 U.S.C. § 1602(aa)(1) and Emery v. Wells Fargo Bank, N.A., 2006 WL 410980, at *6 (D. Ariz. 2006) (granting summary judgment for defendant where the plaintiff failed to adequately allege that his loan was subject to HOEPA). Because Plaintiffs do not allege facts supporting the application of HOEPA to their loan, Defendants contend this is another reason the HOEPA claim should be dismissed. (Id. at 12)
Assuming arguendo that Plaintiffs are attempting to allege a common-law fraud claim, Defendants also demonstrate that the Complaint does not meet the heightened standard imposed by Rule 9(b) to support a fraud or misrepresentation claim. (Id. at 8) Defendants point out that "Rule 9(b) requires that claims of fraud and misrepresentation be `specific enough to give defendants notice of the particular misconduct which is alleged to constitute the fraud charged so that they can defend against the charge and not just deny that they have done anything wrong[,]'" citing Bly-Magee v. California, 236 F.3d 1014, 1019 (9th Cir. 2001). To satisfy Rule 9(b)'s standard, a plaintiff must offer the "who, what, when, where and how" to support a plaintiff's fraud allegations. Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003).
Plaintiffs argue that the Complaint's allegations "are sufficient to survive a 12(b)(6) dismissal on any and all of those claims" made pursuant to "Unfair Debt Collection Practices/RESPA, Predatory Lending Practices, and RICO." (docket # 13 at 4) The Court disagrees.
RULE 12(b)(6) MOTION TO DISMISS
Rule 12(b)(6) of the Federal Rules of Civil Procedure permits dismissal of a claim either where that claim lacks a cognizable legal theory, or where insufficient facts are alleged to support the plaintiff's theory. Balistreri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir. 1988). In resolving a Rule 12(b)(6) motion, the district court must construe the complaint in the light most favorable to the plaintiff and accept all well-pleaded factual allegations as true. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996).
In order to survive a Rule 12(b)(6) motion, a complaint must allege "more than labels and conclusions and a formulaic recitation of the elements of a cause of action[.]" Bell Atlantic Corp. v. Twombly, ___ U.S. ___, 127 S.Ct. 1955, 1965 (2007); Clemens v. Daimler Chrysler Corp., 534 F.3d 1017, 1022 (9th Cir. 2008) ("To avoid a Rule 12(b)(6) dismissal, a complaint need not contain detailed factual allegations; rather, it must plead `enough facts to state a claim to relief that is plausible on its face[,]'" quoting Twombly). A complaint must contain factual allegations sufficient to "raise a right to relief above the speculative level." Twombly, 127 S.Ct. at 1965. "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. 235-236 (3d ed. 2004)); Yadin Company, Inc. v. City of Peoria, 2008 WL 906730, * 4 (D. Ariz. 2008) ("The Supreme Court also explained that Rule 8 requires a `showing,' rather than a blanket assertion, of entitlement to relief.") (internal quotations marks omitted).
In Twombly, an anti-trust case, the Supreme Court tightened the standard for surviving Rule 12(b)(6) motions established long ago in Conley v. Gibson, 355 U.S. 41, 45-46 (1957) ("[A] complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." ). Twombly, 127 S.Ct. at 1967-69. The Court expressed concern that Conley's standard could lead to unnecessary and expensive pretrial discovery just to demonstrate the groundlessness of a plaintiff's case in complex anti-trust litigation. Id.
"Generally, a district court may not consider any material beyond the pleadings in ruling on a Rule 12(b)(6) motion." Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1542, 1555 n. 19 (9th Cir. 1990); Lee v. City of L.A., 250 F.3d 668, 688 (9th Cir. 2001). Indeed, a district court "may not look beyond the complaint to a plaintiff's moving papers, such as a memorandum in opposition to a defendant's motion to dismiss." Schneider v. Cal. Dep't of Corr., 151 F.3d 1194, 1197 (9th Cir. 1998). Conversely, "`material which is properly submitted as part of the complaint may be considered' on a motion to dismiss." Branch v. Tunnell, 14 F.3d 449, 453 (9th Cir. 1994), cert. denied, 512 U.S. 1219, (1994) (quoting Hal Roach Studios, 896 F.2d at 1555 n. 19), overruled on other grounds, Galbraith v. County of Santa Clara, 307 F.3d 1119 (9th Cir. 2002)). Similarly, a district court may consider documents referred to or "whose contents are alleged in a complaint and whose authenticity no party questions but which are not physically attached to the [plaintiff's] pleading" Id. at 454; Lee, 250 F.3d at 688. A district court may also take judicial notice pursuant to Fed. R. Evid. 201 of "matters of public record" without converting a motion to dismiss into a motion for summary judgment.
The Court agrees with Defendants that the Complaint lacks sufficient facts to state claims pursuant to Rule 12(b)(6) and fails to meet the tightened Twombly standard for violations of HOEPA, TILA, the FTCA and the federal and Arizona RICO statutes. Assuming Plaintiffs are attempting to allege a fraud claim, it also fails to satisfy the heightened pleading standard applicable to fraud allegations under Rule 9(b). The Complaint does not contain factual allegations sufficient to "raise a right to relief above the speculative level" for violations of FDCPA, RESPA, HOEPA, TILA, and FTCA. Id. Indeed, Plaintiffs' claims of violations of these federal acts amount to mere conjecture without any showing of entitlement to relief. The Complaint itself admits as much when it concedes the "specifics . . . are unknown" for violations of HOEPA, TILA, and FTCA, docket # 1-3, ¶¶ 35-36, and Defendants "may have also violated provisions of [RESPA]." Id. at ¶ 32 (emphasis added).
Viewing the Complaint's factual allegations as true, as the it must, the Court, however, finds that Plaintiff's Complaint alleges sufficient facts to withstand Defendants' Rule 12(b)(6) challenge to Plaintiffs' state-law claim for declaratory relief that "Defendants are not entitled to enforce the underlying promissory note described in the [deed of trust]." (docket 1-3, ¶ 27 at 9)
Arizona law, set forth in its version of the Uniform Commercial Code on negotiable instruments, A.R.S. §§ 47-3301 et seq. and 3104, provides that a note
In an abundance of caution and in fairness to both Plaintiffs and Defendants, the Court will permit Plaintiffs to file an Amended Complaint to include specific facts explaining why Plaintiffs are entitled to a declaration that Defendants may not enforce the deed of trust and foreclose on Plaintiffs' property based on Plaintiffs' admitted default on the note. Amendment would allow Plaintiffs to identify Defendants' conduct which violated Arizona law, include citations to controlling legal authority and directly allege valid claims they have against Intervenor JP Morgan Chase Bank or its predecessor-in-interest. The more difficult issue, however, is whether the Court should grant Plaintiffs leave to amend the Complaint on the dismissed claims or, as Defendants request, dismiss all claims with prejudice.
DISMISSAL WITH PREJUDICE
When granting a motion to dismiss, a district court is generally required to grant plaintiff leave to amend, even if no request to amend the complaint was made, unless amendment would be futile because the complaint could not possibly be cured by the allegation of other facts. Cook, Perkiss & Liehe, Inc. v. N. Cal. Collection Serv. Inc., 911 F.2d 242, 246-47 (9th Cir. 1990). Where amendment would be futile because the plaintiffs "have sought to recast what are, at best, state-law claims into federal causes of action[,]" dismissal with prejudice and without leave to amend is appropriate. Kay v. Placer County, 219 Fed. Appx. 679, 682 (9th Cir. 2007). Because neither side provides the Court any assistance on the issue of futility, the Court will address each act alleged in the Complaint.
1. The Federal Fair Debt Collections Act ("FDCPA")
The Federal Fair Debt Collection Practices Act was enacted "to eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively dis-advantaged, and to promote consistent state action to protect consumers against debt collection abuses." Oei v. N. Star Capital Acquisitions, LLC, 486 F.Supp.2d 1089, 1093 (C.D. Cal. 2006). "To be held directly liable for violation of the FDCPA, a defendant must — as a threshold requirement — fall within the Act's definition of `debt collector.'" Id. at 1097 (citing Heintz v. Jenkins, 514 U.S. 291, 294 (1995) and Romine v. Diversified Collection Servs., 155 F.3d 1142, 1146 (9th Cir. 1998)).
In Hulse v. Ocwen Fed. Bank, FSB, 195 F.Supp.2d 1188, 1204 (D. Or. 2002), the court found Heinemann v. Jim Walter Homes, Inc., 47 F.Supp.2d 716 (D.W. Va. 1998), aff'd, 173 F.3d 850 (4th Cir. 1999) persuasive"that the activity of foreclosing on [real] property pursuant to a deed of trust is not the collection of a debt within the meaning of the FDCPA." 195 F.Supp.2d at 1204. This Court agrees that "foreclosing on a deed of trust is an entirely different path [than collecting funds from a debtor]. Payment of funds is not the object of the foreclosure action. Rather, the lender is foreclosing its interest in the property." Id. at 1204; also see, Putkkuri v. Recontrust Co., 2009 WL 32567, * 2 (S.D. Cal. 2009).
There being no allegation or even a suggestion in the Complaint that Defendants were doing anything other than attempting to foreclose on Plaintiffs' property due to Plaintiffs' admitted default on the note, amendment to assert a valid FDCPA would be futile. Dismissal of this claim will be with prejudice.
2. The Real Estate Settlement Procedures Act ("RESPA")
The Real Estate Settlement Procedures Act "prohibits the giving or receiving of fees for referral as part of a real estate settlement service but permits fees that are paid for facilities actually furnished or services actually performed in the making of a loan." Valasquez v. Mortgage Electronic Registration Systems, Inc., 2008 WL 4938162, * 3 (N. D. Cal. 2008) (federal claims dismissed against MERS arising from attempted foreclosure sale of real property) (citing Schuetz v. Banc One Mortg. Corp., 292 F.3d 1004, 1005-06 (9th Cir. 2002). "Section 2607(a) prohibits the receipt of referral fees or kickback payments for the completion of a loan transaction. Section 2607(b) provides that fees may be received only for `services actually performed.'" Id.
Plaintiffs obtained the subject loan to acquire their home on or about July 27, 2006. (Exh. A at 1; docket # 9-2) The deed of trust was recorded on January 5, 2007. (Id.) Giving Plaintiffs the benefit of this later date, Plaintiffs commenced this action over 18 months later on October 21, 2008. "RESPA provides a one-year statute of limitations for section 2607 claims." Valasquez, 2008 WL 4938162, * 3 (citing 12 U.S.C. § 2614). Thus, like the property owner's claim in Valasquez, Plaintiffs' RESPA claim is time-barred. This claim will also be dismissed with prejudice.
3. The Home Ownership and Equity Protection Act ("HOEPA") and the Truth in Lending Act ("TILA"), Regulation Z, 12 C.F.R. 226, and the Federal Trade Commission Act ("FTCA")
As previously mentioned, the Complaint alleges that Defendants "have engaged in deceptive practices to Plaintiffs in violation of [HOEPA], 15 U.S.C. §§ 1637, [TILA], 15 U.S.C. § 1601, Regulation Z,
"The Home Ownership and Equity Protection Act of 1994 ("HOEPA") augmented TILA with additional disclosure obligations and substantive requirements for particular high-cost mortgages." Marks v. Chicoine, 2007 WL 1056779, at * 8 (N.D. Cal. 2007) (citing 15 U.S.C. § 1602(aa),
"When enacting HOEPA . . ., Congress amended the definition of creditor by adding the last sentence of [15 U.S.C.] § 1602(f)." Cetto v. LaSalle Bank Nat'l Ass'n, 518 F.3d 263, 270 (4th Cir. 2008) (observing that "the first sentence of § 1602(f) requires that both elements of the two-part test be met for determinations of `creditor' status") The plain language of the first sentence of § 1602(f) is unambiguous in defining "creditor" to refer "only to a person who both (1) regularly extends . . . consumer credit . . . and (2) is the person to whom the debt arising from the consumer credit transaction is initially payable on the face of the evidence of indebtedness. . . ." 15 U.S.C. § 1602(f). In Cello, the Fourth Circuit held "the definition of `creditor' in § 1602(f), based on traditional notions of statutory construction, the Federal Reserve Board's Regulation Z, and common sense, does not reach mortgage brokers. . . ." 518 F.3d. at 277.
Similarly, TILA "requires a `creditor' to disclose credit terms — for example, the annual interest rate — to a borrowing consumer." Mortensen v. Home Loan Center, Inc., 2009 WL 113483, * 2 (D. Ariz. 2009) (quoting Eby v. Reb Realty, Inc., 495 F.2d 646, 647 (9th Cir. 1974) (citing 15 U.S.C. § 1638). "Congress through TILA sought to protect consumers' choice through full disclosure and to guard against the divergent and at times fraudulent practices stemming from uninformed use of credit." Id. (citing King v. California, 784 F.2d 910, 915 (9th Cir.1986) (citing 15 U.S.C. § 1601(a)).
Again, there is no allegation or even a suggestion in the Complaint or Plaintiffs' Response that either Defendant ETS or Defendant MERS was a "creditor" within the HOEPA and TILA definition, 15 U.S.C. § 1602(f), at any time during Plaintiffs' loan transaction. Like the mortgage broker in Cello, neither ETS nor MERS, as a trustee and nominee on a deed of trust, respectively, is a "creditor" within HOEPA and TILA. Amendment of the Complaint to assert violations of HOEPA or TILA would be futile. Dismissal of these claims will also be with prejudice.
4. Federal and Arizona RICO Allegations
Plaintiffs' Fourth Cause of Action is entitled "RICO," and appears to allege that ETS and MERS violated both the federal RICO and Arizona RICO equivalent "by participating in a scheme of racketeering," citing 18 U.S.C. §§ 1961 et. seq, and "by a pattern of racketeering activity in violation of A.R.S. § 13-2314, et. seq. . . ." (Compl. ¶¶ 38-40; docket # 1-3 at 10-11). Like the other deficient claims, the Complaint's RICO allegations consist of only "labels and conclusions" and does not include factual allegations sufficient to "raise a right to relief above the speculative level." Twombly, 127 S.Ct. at 1965.
In 1993, the Arizona legislature amended Arizona's Racketeer Influenced and Corrupt Organizations Act ("State RICO") statute and "[made] it even more analogous to its federal counterpart." Rosier v. First Fin. Capital Corp., 181 Ariz. 218, 221 n. 5, 889 P.2d 11, 14 n. 5 (Az. Ct. App. 1994); A.R.S. § 13-2314.04. With this amendment, the legislature added the requirement that a plaintiff show a "pattern of racketeering activity," which it defined as "[a]t least two acts of racketeering" that are "related" and "continuous" — requirements established by the Supreme Court in H.J. Inc. v. Northwestern Bell Telephone Co., 492 U.S. 229, 239 (1989) ("It is this factor of continuity plus relationship which combines to produce a pattern."); Lifeflite Medical Air Transport, Inc. v. Native American Air Services, Inc., 198 Ariz. 149, 152, 7 P.3d 158, 161 (Az. Ct. App. 2000).
The elements of a federal civil RICO claim are "(1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity (known as `predicate acts') (5) causing injury to the plaintiff's `business or property.' " Lacy v. County of Maricopa, 2008 WL 312095, * 2 (D. Ariz. 2008) (citing Grimmett v. Brown, 75 F.3d 506, 510 (9th Cir. 1996) (citing 18 U .S.C. §§ 1964(c), 1962(c)); Sedima, S.P.R.L. v. Imrex Co., Inc., 473 U.S. 479, 496 (1985). "Illegal activities that constitute predicate acts for federal RICO liability are identified in 18 U.S.C. § 1961(1)." Lacy, 2008 WL 312095 at * 2. A pattern of racketeering requires at least two acts of racketeering activity. 18 U.S.C. § 1961(5).
"The Ninth Circuit has held that allegations of predicate acts under RICO must comply with Rule 9(b)'s specificity requirements." U.S. Concord, Inc. v. Harris Graphics Corp., 757 F.Supp. 1053, 1061 (N.D. Cal. 1991) (citing Schreiber Distributing Co. v. ServWell Furniture Co., 806 F.2d 1393, 1400-01) (9th Cir.1986). A RICO plaintiff must allege the time, place and manner of each act of fraud, and the role of each defendant in the fraud or other criminal acts identified in § 1961(1). Lancaster Commun-ity Hospital v. Antelope Valley Hospital Dist., 940 F.2d 397, 405 (9th Cir. 1991).
Aside from the conclusory allegations that Defendants "participat[ed] in a scheme of racketeering" and engaged in a "pattern of racketeering," Plaintiffs fail to allege with any specificity the existence of a RICO enterprise, or the conduct of a pattern of racketeering. The Court concludes that the Complaint fails to state a claim under either the Arizona or federal RICO statutes. Moreover, the Court will dismiss these counts with prejudice because there is no evidence or argument Defendants committed one predicate criminal act, much less the requisite two, in attempting to foreclose on Plaintiffs' real property.
"Ordinarily, if all claims over which a district court has original jurisdiction have been dismissed before trial in a removed action, the remaining state-law claims should be remanded to state court." Fletcher v. Solomon, 2006 WL 3290399, * 3 (N.D. Cal. 2006) (citing Acri v. Varian Assocs., 114 F.3d 999, 1001 (9th Cir. 1997)). A district court may, however, exercise supplemental jurisdiction pursuant to 28 U.S.C. § 1367 over the remaining state law claims. 28 U.S.C. § 1367(c); Albingia Versicherungs A.G. v. Schenker International, Inc., 344 F.3d 931, 937-38 (9th Cir. 2003), as amended, 350 F.3d 916 (9th Cir. 2003); Stuart v. City of Dillon, 2008 WL 3887656 (D.Mont. 2008).
In light of the disposition with prejudice of all federal claims alleged in the Complaint, the Court will defer resolution of whether to exercise supplemental jurisdiction over the remaining State law claim against ETS and MERS or whether remand back to State court is appropriate until after Plaintiffs file, and the Court reviews, the Amended Complaint. Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 348 (1988) (finding that "a district court has discretion to remand a removed case to state court when all federal-law claims have dropped out of the action and only pendent state law claims remain" ).
15 U.S.C. § 1602(aa) (emphasis added). Thus, "HOEPA does not apply to, inter alia, "residential mortgage transactions." Booker, 138 Fed.Appx. at 730. HOEPA does not likely apply to Plaintiffs' loan for this additional reason but the Court has insufficient information at this time to decide this issue.
Even if the Court were to conclude that the HOEPA and TILA apply to this loan, from the face of Plaintiffs' Complaint, it appears that Plaintiffs' action for violations of the HOEPA and TILA is barred by the statute of limitations. An action for damages under HOEPA or TILA must be brought within one year of the violation. 15 U.S.C. § 1640(e); 12 C.F.R. § 226.23; Wherry v. All California Funding, 2006 WL 2038495, * 2 (N.D. Cal. 2006) (citing In re Community Bank of Northern Virginia, 418 F.3d 277, 305 (3d Cir. 2005)).