Henok Araya v. JPMorgan Chase Bank, N.A.

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 9, 2014 Decided December 30, 2014

No. 13-7036

HENOK ARAYA,

APPELLANT

v.

JPMORGAN CHASE BANK, N.A., ET AL.,

APPELLEES

Appeal from the United States District Court

for the District of Columbia

(No. 1:12-cv-00335)

Henok Araya, pro se, argued the cause and filed the

briefs for appellant.

Jason C. Hicks argued the cause for appellees. On the

brief were Bizhan Beiramee and Jeffrey L. Tarkenton.

Before: BROWN, MILLETT and WILKINS, Circuit Judges.

Opinion for the Court filed by Circuit Judge WILKINS.

2

WILKINS, Circuit Judge:

Henok Araya owned and operated a rental property in the

District of Columbia, which he leased to tenants. After

several years, the bank foreclosed on his mortgage and sold

the property to the highest bidder. Araya sued in D.C.

Superior Court challenging the foreclosure proceedings that

ultimately resulted in the sale of his property. After

defendants removed to federal court and moved for judgment

on the pleadings, the District Court rejected Araya’s

challenges. Because the D.C. statutory and common law

claims against the bank and its foreclosing agent should have

been decided by the local courts, we vacate the District

Court’s opinions and orders relating to claims against those

parties.

I.

In October 2005, Henok Araya 1 purchased property

located at 2630 Myrtle Avenue NE in Washington, D.C. The

purchase was financed by Chase Home Finance LLC

(“Chase”) 2 and the property was encumbered by a security

instrument consisting of a note and a deed of trust. Araya

purchased the property as an investment property in which

tenants would live, and a rider to that effect was attached to

the deed of trust. J.A. 240.

1

Mr. Araya transposed his first and last names in the case

caption of his Superior Court complaint, and most of the

earlier pleadings and court orders repeated that mistake.

2

Chase Home Finance LLC originated the loan. JPMorgan

Chase appeared before this Court as successor by merger.

3

On December 1, 2008, Araya sent Chase a letter

indicating that he had been unable to “communicate and solve

the issues” with several accounts. He asked that all

correspondence be directed to 1800 New Jersey Ave NW.

J.A. 69. The next day, Chase sent Araya an acceleration

warning at that address, alerting Araya that his loan on the

Myrtle Avenue property was in default. The letter told Araya

that he owed $5,814.28 and had 32 days to cure the default.

J.A. 71. Chase sent similar acceleration warnings on March

4, 2009; April 4, 2009; May 2, 2009; and June 2, 2009. J.A.

75-93.

On September 21, 2009, Araya sent Chase a letter

claiming that his mortgage payment was not behind and

“requesting a payment research.” He provided a phone

number that Chase should call with questions and again used

the New Jersey Avenue address. J.A. 95.

On November 18, 2009, Chase sent another acceleration

warning, this time to 908 New Hampshire Ave NW.

According to Araya, he mailed Chase a certified letter on

January 20, 2010, requesting the correct amount to bring his

account current. In that letter, he asked that Chase reply by

email and by mail to 908 New Hampshire Ave NW #400. He

sent identical letters on February 2, 2010, and March 17,

2010. Around February 18, 2010, Araya received a notice

from Shapiro & Burson, LLP, that his property was to be sold

at a foreclosure sale.

On March 24, 2010, the property was sold at public

auction. J.A. 104-05. The Federal Home Loan Mortgage

Corporation (“Freddie Mac”) purchased the home and sold it

in turn to Dorothy Ihuoma. Id.; J.A. 46.

4

On February 2, 2012, Araya filed a complaint in the

Superior Court of the District of Columbia against Chase and

Shapiro & Burson asserting numerous claims including

breach of contract, fraud, illegal foreclosure, breach of

fiduciary duty, forgery, misrepresentation, negligence,

statutory violations, and violation of the takings clause of the

Fifth Amendment. The gravamen of Araya’s complaint was

that Chase and Shapiro & Burson had not provided the proper

notice before foreclosure and had not given him a meaningful

opportunity to cure. Citing D.C. Sup. Ct. Civ. R. 19, 3 Araya

joined Ihuoma and Fannie Mae 4 as defendants on the theory

that they were persons with an “interest in the property.” J.A.

289-295.

On March 1, 2012, the defendants removed to the United

States District Court for the District of Columbia on the basis

of federal question jurisdiction. Notice of Removal p. 3

(March 1, 2012). On March 5, 2012, Ihuoma filed a motion

to dismiss, arguing that she was protected from suit as a bona

fide purchaser; the motion was granted over Araya’s

opposition on September 11, 2012. Order on Motion to

Dismiss p. 1 (Sept. 11, 2012). Araya did not designate the

order granting Ihuoma’s dismissal in his notice of appeal or in

any other way demonstrate intent to appeal that judgment of

dismissal, and therefore this order is final and not before us.

See Fed. R. App. P. 3(c)(1)(B); see also Brookens v. White,

795 F.2d 178, 180 (D.C. Cir. 1986) (“[Appellant’s] failure to

specify the [dismissal] order by name in his notice of appeal,

or otherwise to evidence his intent to pursue an appeal from

3

The Superior Court rule is identical for all intents and

purposes to Fed. R. Civ. P. 19.

4

Fannie Mae is the common moniker for the Federal National

Mortgage Association.

5

that order, renders the notice inapplicable to the earlier

order.”). Ihuoma appears before this Court solely to contest

Araya’s appeal of the District Court’s denial of the motions to

amend his complaint.

On March 7, 2012, Araya filed a document entitled

“Plaintiff’s opposition to removal of case.” Response to

Document (March 7, 2012). In this document, Araya argued

that his complaint raised no federal questions and was entirely

based on D.C. law. Id. at p. 2. He also asserted that the

parties were not diverse. Id. at p. 1.

On March 20, 2012, Chase and Fannie Mae filed a

memorandum in opposition to Araya’s document, which they

had construed as a remand motion. Response to Document p.

1 (March 20, 2012). Chase and Fannie Mae argued that

federal jurisdiction was appropriate because Araya raised

constitutional claims and because Fannie Mae’s “sue and be

sued” clause, 12 U.S.C. §1723a(a), created federal subject

matter jurisdiction under Pirelli Armstrong Tire Corp. Retiree

Med. Benefits Trust v. Raines, 534 F.3d 779 (D.C. Cir. 2008).

On May 11, 2012, the District Court denied Araya’s

remand motion on the grounds that “[t]he D.C. Circuit has

held that § 1723a(a) is a grant of subject matter jurisdiction.”

Order p. 2 (May 11, 2012).

On May 25, 2012, Chase and Fannie Mae filed a joint

motion for judgment on the pleadings. Motion for Judgment

on the Pleadings (May 25, 2012). Shapiro & Burson filed a

similar motion on June 19, 2012. Motion for Judgment on the

Pleadings (June 19, 2012). On July 5, 2012, Araya filed a

motion for partial summary judgment. Motion for Partial

Summary Judgment (July 5, 2012). Araya also filed two

motions for leave to file an amended complaint, the first on

6

July 26, 2012, and the second on October 24, 2012. Motion

for Leave to File (July 26, 2012); Motion for Leave to File

(Oct. 24, 2012). The proposed amended complaints

eliminated the Fifth Amendment takings claim and added two

new counts: a claim under the Real Estate Settlement

Procedures Act (RESPA), 12 U.S.C. § 2605, and a statutory

claim for wrongful foreclosure under D.C. Code § 42-815.

The only difference in the two proposed complaints is that the

second complaint replaces references to Fannie Mae with

references to Freddie Mac.

On February 13, 2013, the District Court issued an order

and opinion. Henok v. Chase Home Finance, LLC, 922 F.

Supp. 2d 110 (D.D.C. 2013). The District Court dismissed

Fannie Mae and denied leave to add Freddie Mac on the

grounds that “the second amended complaint fails to state a

claim for relief on any ground.” Id. at 124-25. Although

Fannie Mae’s presence in the suit was the perceived linchpin

of federal subject matter jurisdiction, the District Court did

not consider whether it should proceed to the other claims or

remand them to the Superior Court. The District Court

instead ruled against Araya on all of his state-law claims,

construing D.C. law to do so. Araya filed a timely appeal.

On appeal, Araya challenges (1) the District Court’s grant

of partial summary judgment to Chase, (2) the District Court’s

denial of his motions for leave to amend, and (3) the District

Court’s grant of judgment on the pleadings. After oral

argument, we asked the parties for supplemental briefing on

subject matter jurisdiction. We do not address the merits of

Araya’s challenges because we conclude that the predicate for

supplemental jurisdiction evaporated once Fannie Mae was

dismissed and the District Court denied leave to amend to add

any new federal claims.

7

II.

Ordinarily, the plaintiff is entitled to select the forum in

which he wishes to proceed. See, e.g., Sinochem Int’l Co. v.

Malaysia Int’l Shipping Corp., 549 U.S. 422, 436 (2007)

(referencing “the consideration ordinarily accorded the

plaintiff’s choice of forum”); Holmes Group, Inc. v. Vornado

Air Circulation Systems, Inc., 535 U.S. 826, 831-32 (2002)

(discussing extent to which plaintiff is master of the

complaint). Congress has provided, however, that “any civil

action brought in a State court of which the district courts of

the United States have original jurisdiction” may be removed

by the defendants to the federal courts. 28 U.S.C. § 1441(a)

(2012). The removal notice must contain “a short and plain

statement of the grounds for removal,” id. § 1446(a).

Even if a claim raising a federal question is properly

removed from state court to federal court, the district court

has an obligation to employ its discretion to determine

whether to exercise supplemental jurisdiction over the

ancillary state-law claims. City of Chicago v. Int’l Coll. of

Surgeons, 522 U.S. 156, 167, 172-73 (1997). In doing so, the

district court should consider “a host of factors, . . . including

the circumstances of the particular case, the nature of the state

law claims, the character of the governing state law, and the

relationship between the state and federal claims.” Id. at 173.

In addition, “[i]f the federal question is eliminated relatively

soon after removal, it is ordinarily preferable to remand the

case rather than dismiss the case.” 16-107 Moore’s Federal

Practice - Civil § 107.41; see also 28 U.S.C. § 1447(c) (“If at

any time before final judgment it appears that the district

court lacks subject matter jurisdiction, the case shall be

remanded.”).

8

In the removal notice, the defendants asserted two bases

for federal court jurisdiction. First, defendants argued that

Araya’s Fifth Amendment claims against Chase and Shapiro

& Burson were sufficient to create federal jurisdiction under

28 U.S.C. § 1331, which gives the federal district courts

“original jurisdiction of all civil actions arising under the

Constitution, laws, or treaties of the United States.” Second,

defendants argued that 12 U.S.C. § 1723a(a), which

authorizes Fannie Mae “to sue and to be sued” in federal

courts, creates federal jurisdiction because Fannie Mae was a

named party.

We consider each asserted basis of subject matter

jurisdiction in turn.

A.

As a general matter, “the absence of a valid (as opposed

to arguable) cause of action does not implicate subject-matter

jurisdiction.” Steel Co. v. Citizens for a Better Env't, 523 U.S.

83, 89 (1998). It has long been recognized, however, that “a

suit may sometimes be dismissed for want of jurisdiction

where the alleged claim under the Constitution or federal

statutes clearly appears to be immaterial . . . or where such a

claim is wholly insubstantial and frivolous.” Bell v. Hood,

327 U.S. 678, 682-83 (1946).

Araya’s Fifth Amendment claim against Chase and

Shapiro & Burson is insufficient to sustain jurisdiction

because it has been foreclosed by the Supreme Court. See

Steel Co., 523 U.S. at 89. It is beyond dispute that the Fifth

Amendment “appl[ies] to and restrict[s] only the Federal

Government and not private persons.” Pub. Utils. Comm’n of

D.C. v. Pollak, 343 U.S. 451, 461 (1952); see also San

Francisco Arts & Athletics, Inc. v. U.S. Olympic Committee,

9

483 U.S. 522, 542 (1987) (“The fundamental inquiry is

whether the USOC is a governmental actor to whom the

prohibitions of [the Fifth Amendment] apply.”); Corrigan v.

Buckley, 271 U.S. 323, 330 (1926) (“The Fifth Amendment is

a limitation only upon the powers of the General Government

and is not directed against the action of individuals.”)

(citations omitted) (internal quotation marks omitted); Barron

v. Baltimore, 32 U.S. 243, 250-51 (1833) (“[T]he fifth

amendment to the constitution . . . is intended solely as a

limitation on the exercise of power by the government of the

United States.”). There is no plausible argument that either

Chase or Shapiro & Burson is a governmental actor, and

indeed Araya’s complaint does not even allege that either

defendant is a governmental actor. The Fifth Amendment

claim is thus an insufficient basis for federal subject matter

jurisdiction. Understandably, the District Court did not rely

upon the takings claim as a basis for jurisdiction when it

denied Araya’s request to remand, and it later granted the

motion to dismiss that claim.

B.

The argument regarding Fannie Mae presents a more

complicated question.

At the time of removal, Fannie Mae was named in the

Superior Court complaint as a party that “upon information

and belief . . . ha[d] an interest in the property,” and it is

settled law in this Circuit that 12 U.S.C. § 1723a(a) ordinarily

creates federal jurisdiction “in Fannie Mae cases.” Pirelli,

534 F.3d at 785. 5 Thus, it was reasonable for the District

5

The Supreme Court has addressed a similar statute, holding

that the Red Cross’s “‘sue and be sued’ provision confers

original jurisdiction on federal courts over all cases to which

10

Court to deny Araya’s motion to remand, because Fannie Mae

was named and had been served as a defendant in the case,

and supplemental jurisdiction over the ancillary state claims

(with their attendant party defendants) would appear

appropriate insofar as those claims involved the same

property and were related to any claim involving Fannie Mae.

See LaShawn A. v. Barry, 87 F.3d 1389, 1396 (D.C. Cir.

1996) (en banc) (“Whether a court may decide pendent claims

is determined on the face of the pleadings.”).

However, after the denial of the motion to remand,

counsel jointly representing Fannie Mae and Chase moved to

dismiss the claim against Fannie Mae, informing the District

Court for the first time that there was no basis for Fannie

Mae’s inclusion in this controversy. The documents attached

to Araya’s Superior Court complaint make it clear that the

property was purchased at the foreclosure auction by the

Federal Home Loan Mortgage Corporation – Freddie Mac.

J.A. 15-35. Araya apparently mistook Freddie Mac for

Fannie Mae. The presence of Fannie Mae in this suit is

therefore entirely illusory. (It is not lost on us that Fannie

Mae waited until after it had defeated plaintiff’s choice of

forum to inform the District Court of this rather salient fact.)

Neither our decision in Pirelli nor the Supreme Court’s

decision in Red Cross contemplates a situation such as this, in

which a federally chartered corporation without any

connection whatsoever to the dispute is named as a party by

mistake. This case does not require us to resolve the troubling

question of whether Pirelli and Red Cross permit automatic

the Red Cross is a party, with the consequence that the

organization is thereby authorized to remove from state to

federal court any state-law action it is defending.” American

Nat’l Red Cross v. S.G., 505 U.S. 247, 248 (1992).

11

federal jurisdiction any time Fannie Mae is mentioned in a

party’s pleadings, however, and we decline to do so. On the

particular facts presented in this appeal – in which a pro se

D.C. resident accidentally named the wrong federally

chartered corporation as a potentially interested party in his

suit against defendants residing outside the District of

Columbia and then sought to correct that mistake by naming

the correct federally chartered corporation – we are satisfied

that the District Court had original jurisdiction. See Steel Co.,

523 U.S. at 89. 6

C.

The District Court dismissed Fannie Mae from the

lawsuit, Henok, 922 F. Supp. 2d at 117-24, and this dismissal

was summarily affirmed by a panel of this Court. Henok v.

JPMorgan Chase Bank, N.A., No. 13-7036, 2013 WL

4711675 (D.C. Cir. Aug. 2, 2013) (per curiam). Even though

the basis of federal question jurisdiction had vanished with

Fannie Mae’s dismissal, 7 the District Court went on to rule on

6

Judge Millett would hold that because minimal diversity

exists between these parties (Araya, the plaintiff, is a citizen

of D.C., whereas at least one of the defendants, JPMorgan

Chase, is not), the exercise of Article III jurisdiction in this

instance to dismiss Ihuoma and Fannie Mae from the case was

permissible. See State Farm Fire & Cas. Co. v. Tashire, 386

U.S. 523, 531 (1967) (“Article III poses no obstacle to the

legislative extension of federal jurisdiction, founded on

diversity, so long as any two adverse parties are not co-

citizens.”).

7

The District Court also denied Araya’s motion to amend his

complaint to add Freddie Mac as a defendant or to add a claim

asserting a RESPA violation, finding that either addition

12

the merits of Araya’s state-law claims against Chase and

Shapiro & Burson. The question thus becomes whether that

exercise of supplemental jurisdiction was proper.

III.

The jurisdictional grant in the supplemental jurisdiction

statute potentially confers jurisdiction over “all other claims

that are so related to claims in the action within such original

jurisdiction that they form part of the same case or

controversy under Article III of the United States

Constitution.” 28 U.S.C. § 1367(a). However, the statute

also provides that “[t]he district courts may decline to

exercise supplemental jurisdiction over a claim . . . if (1) the

claim raises a novel or complex issue of State law, (2) the

claim substantially predominates over the claim or claims

over which the district court has original jurisdiction, (3) the

district court has dismissed all claims over which it has

original jurisdiction, or (4) in exceptional circumstances, there

are other compelling reasons for declining jurisdiction.” Id. §

1367(c). This case implicates § 1367(c)(3) because the

District Court was called upon to decide the validity of

several state and common law claims despite the dismissal of

all claims giving it federal question jurisdiction.

Prior to the enactment of the supplemental jurisdiction

statute, the law in this Circuit was that “[i]f a district court has

power to adjudicate a pendent claim, the court must then

engage in a second inquiry to determine whether to exercise

its discretion to decide the local claim.” Dimond v. District of

Columbia, 792 F.2d 179, 188 (D.C. Cir. 1986). On several

occasions, we found an abuse of discretion when the district

would be futile. Henok, 922 F. Supp. 2d at 123-24. We agree

with this conclusion.

13

court failed to remand the case to the D.C. courts when it was

not appropriate to retain jurisdiction. See, e.g., Financial

General Bankshares, Inc. v. Metzger, 680 F.2d 768, 777 (D.C.

Cir. 1982) (“When a District Court reaches out to decide

unsettled issues of state law despite the pretrial dismissal of

all federal claims, its action may be an abuse of discretion.”);

REA Exp., Inc. v. Travelers Ins. Co., 554 F.2d 1200, 1201

(D.C. Cir. 1977) (per curiam) (altering district court judgment

so as to allow plaintiffs to file in state court). Moreover, not

engaging in the analysis of whether to remand could itself

potentially be an abuse of discretion. See Dimond, 792 F.2d

at 188. We have continued to apply this two-part test even

after the enactment of the supplemental jurisdiction statute.

See Women Prisoners of D.C. Dep’t of Corrections v. District

of Columbia, 93 F.3d 910, 921-22 (D.C. Cir. 1996) (noting

that § 1367(c) does not disturb the Gibbs framework); see

also H.R. REP. NO. 101-734 (1990), at 29 (“As under current

law, subsection (c) requires the district court, in exercising its

discretion, to undertake a case-specific analysis.”).

In keeping with the principle that “[n]eedless decisions of

state law should be avoided both as a matter of comity and to

promote justice between the parties,” United Mineworkers of

America v. Gibbs, 383 U.S. 715, 726 (1966), we have

explained that “[i]n the usual case in which all federal-law

claims are dismissed before trial, the balance of factors to be

considered under the pendent jurisdiction doctrine . . . will

point toward declining to exercise jurisdiction over the

remaining state-law claims.” Shekoyan v. Sibley Intern., 409

F.3d 414, 424 (D.C. Cir. 2005) (quoting Carnegie-Mellon

Univ. v. Cohill, 484 U.S. 343, 350 n.7 (1988)) (holding that

the district court properly exercised its discretion to remand

state-law claims after dismissing federal claims). Thus, we

have repeatedly held that a district court abuses its discretion

when it maintains jurisdiction over a removed case presenting

14

unsettled issues of state law after the federal claims have been

dismissed.

For example, in Edmondson & Gallagher v. Alban

Towers Tenants Association, this Court considered a case in

which plaintiffs had filed a suit in D.C. Superior Court

alleging a number of state and common law claims in addition

to a federal RICO claim. 48 F.3d 1260, 1262 (D.C. Cir.

1995). Defendants removed to district court and filed

summary judgment motions. Id. at 1263. “After the district

court dismissed the federal claims, however, it abused its

discretion by reaching the merits of the local-law claims.” Id.

In evaluating the district court’s exercise of its discretion, this

Court determined that the dismissal of the federal claim,

combined with the unsettled nature of the law regarding the

state and common law claims, compelled the district court to

remand to D.C. Superior Court. Id. at 1266-67; see also

Women Prisoners, 93 F.3d at 923 (“[W]e hold that the district

court abused its discretion in exercising jurisdiction over these

local claims in violation of the supplemental jurisdiction

statute and the well-established principles it has codified.”);

Financial General, 680 F.2d at 778 (holding that district court

“abused its discretion by failing to take into account the

uncertainty of state law and by proceeding to trial on the local

claims after the dismissal of the federal claims”).

Guided by this precedent, we are constrained to hold that

the District Court abused its discretion. Unfortunately, the

District Court did not explain in its opinion whether or how it

applied its discretion to exercise supplemental jurisdiction

over the state-law claims in this case. See Dimond, 792 F.2d

at 188. As in Edmondson, “if the district court considered the

relevant factors at all, it left no written trace of the process;

after dismissing the [federal] claims, the court plunged into

the common law ones with no apparent pause for breath.” 48

15

F.3d at 1266. In Edmondson, we concluded there was no

reason to remand the case to the district court to exercise its

discretion whether to remand in the first instance, because the

circumstances compelled only one conclusion. Id. at 1266-

67. We noted that the complaint raised novel issues of state

law, which was another reason to decline supplemental

jurisdiction in addition to the dismissal of all of the federal

claims. Id. (citing 28 U.S.C. § 1367(c)(1)). Similar issues

permeate this case:

(1) Araya’s complaint alleges numerous vaguely worded

claims and allegations, which the District Court construed

with the liberality ordinarily afforded to pro se litigants.

Although we acknowledge the District Court’s considerable

efforts in finding a substantial number of arguable local

statutory and common law claims in Araya’s pleadings, the

result in this case was a 34-page opinion, less than a page of

which involved federal claims. To the extent that Araya’s

complaint articulates any plausible state-law claims, the D.C.

Superior Court is eminently more qualified than a federal

court to navigate the as-yet-unsettled contours of the statutory

and common law claims potentially presented. And even

were none of the individual state law issues complex, the

process of discerning, interpreting, and deciding a half-dozen

state-law claims could be described as undertaking to resolve

a “complex issue of State law.” 28 U.S.C. § 1367(c)(1).

(2) Araya’s complaint, as interpreted by the District

Court, raises issues that have not been directly confronted by

D.C. courts, such as whether D.C. Code § 47-1431(a) (2001)

conferred a private right of action, see Henok, 922 F. Supp. 2d

at 124, as well as issues that have been resolved in conflicting

ways by D.C. and federal courts, such as whether negligent

misrepresentation requires a pre-existing confidential

relationship, compare Sherman v. Adoption Center of

16

Washington, Inc., 741 A.2d 1031, 1037 (D.C. 1999)

(“Negligent misrepresentation requires that the defendants

made statements that they knew or should have known were

false, and that they knew or should have known would induce

reliance on the part of Sherman, and that did induce such

reliance.”) and Kumar v. D.C. Water & Sewer Auth., 25 A.3d

9, 15 n.9 (D.C. 2011) (“To prove negligent misrepresentation,

a plaintiff must show ‘(1) that [the defendant] made a false

statement or omitted a fact that he had a duty to disclose; (2)

that it involved a material issue; and (3) that [the plaintiff]

reasonably relied upon the false statement or omission to his

detriment . . . .’”) (quoting Redmond v. State Farm Ins.

Co., 728 A.2d 1202, 1207 (D.C. 1999)) with Choharis v. State

Farm Fire and Cas. Co., 961 A.2d 1080, 1089 (D.C. 2008)

(“[C]onduct occurring during the course of a contract dispute

may be the subject of a fraudulent or negligent

misrepresentation claim when there are facts separable from

the terms of the contract upon which the tort may

independently rest and when there is a duty independent of

that arising out of the contract itself.”).

As we concluded in Edmondson, “D.C. courts are better

equipped to resolve the unsettled legal questions in this case.”

48 F.3d at 1266. The District Court therefore had no choice

but to remand. Id.; see also, e.g., Carver v. Nassau Cnty.

Interim Fin. Auth., 730 F.3d 150, 154-55 (2d Cir. 2013)

(abuse of discretion to retain supplemental jurisdiction over

claim raising unresolved issue of state law); Creighton v. City

of Livingston, 628 F. Supp. 2d 1199, 1218-19 (E.D. Cal.

2009) (declining to exercise supplemental jurisdiction over

state-law claim where California courts had not yet decided

whether private right of action existed).

This case is functionally indistinguishable from

Edmondson. Here, as there, the District Court dismissed all

17

claims over which it had original jurisdiction; here, as there,

“[t]here has been no trial of the common law claims,”

Edmondson, 48 F.3d at 1266; here, as there, the local claims

involve novel and complex issues, id.; here, as there, “there

seems little difference in convenience for the parties whether

they litigate in D.C. or federal court,” id. at 1267; and here, as

there, the District Court had an obligation to exercise its

discretion to remand the case to the District of Columbia

courts once the federal question, like Elvis, had left the

building.

IV.

For the foregoing reasons, we affirm the District Court’s

order denying leave to amend Araya’s complaint to add

additional federal claims, vacate the District Court’s orders

relating to the state-law claims against Chase and Shapiro &

Burson, and remand to the District Court with instructions to

remand to Superior Court for determination of Araya’s state-

law claims against those parties.

So ordered.