FILED
NOT FOR PUBLICATION JUN 02 2014
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
KIMBERLY GRANT, individually and on No. 12-56641
behalf of the members of the general
public similarly situated, D.C. No. 2:12-cv-03770-CAS-
FFM
Plaintiff - Appellant,
v. MEMORANDUM*
UNIFUND CCR, LLC, an Ohio limited
liability company,
Defendant,
And
UNIFUND CORPORATION, an Ohio
corporation and UNIFUND CCR
PARTNERS, a New York partnership,
Defendants - Appellees.
Appeal from the United States District Court
for the Central District of California
Christina A. Snyder, District Judge, Presiding
Argued and Submitted March 7, 2014
Pasadena, California
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
Before: BYBEE, BEA, and IKUTA, Circuit Judges.
In 2008, Unifund CCR Partners, a debt collection agency, sued Kimberly
Grant in Los Angeles County Superior Court for collection of unpaid credit card
debt. Grant did not respond to the complaint. After motion, the Superior Court
entered default judgment in favor of Unifund.
On September 30, 2011, Grant filed a putative class action lawsuit in the
District Court for the Central District of California against Unifund CCR Partners
and Unifund Corporation. (“Grant I”). This action asserted claims for violations of
the federal Fair Debt Collection Practices Act (“FDCPA” 15 U.S.C. § 1692),
California’s Unfair Competition Law (“UCL” Cal. Bus. & Prof. Code § 17200 et
seq.), and state-law claims for abuse of process and conversion. Grant v. Unifund
CCR Partners, 842 F. Supp. 2d 1234, 1236 (C.D. Cal. 2012).
On October 5, 2011, Grant filed a motion in California state court to vacate
the prior state court judgment, claiming that she had never been served with the
complaint. The superior court denied the motion, and Grant did not appeal.
On February 6, 2012, the district court in Grant I granted Unifund’s motion
for summary judgment. Id. at 1237. The court divided Grant’s claims into two
classes. The first class was made up of those claims that were premised on the
allegation that Unifund “did not give plaintiff proper written notice in order to
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validate the alleged debt before suing her, in violation of section 1692g(a) of the
FDCPA.” Id. at 1240 (internal quotation marks and brackets omitted).1 The Grant
I court granted Unifund summary judgment on the merits with regard to this first
class of claims because Ninth Circuit law requires only that a debt collector
provide undisputed evidence that a letter informing the debtor of the debt was
mailed to the debtor and not returned as undeliverable. Unifund provided such
evidence. Id. at 1242.
The second class of Grant’s claims were those premised on Grant’s
remaining four allegations: “(1) that plaintiff was never served with the summons
and complaint in the state court action; (2) that plaintiff does not owe the debt at
issue in the state court action; (3) that Unifund [] improperly garnished her money;
and (4) that the . . . Affidavit[s] submitted in support of the request for default
judgment w[ere] ‘false and fraudulent.’” Id. at 1239 (citations omitted).2 The
1
The claims in this first class were for violations of 15 U.S.C. § 1692g(a) by
not giving Grant proper written notice of the alleged debt before suing her in state
court, as well as Grant’s California UCL claim, to the extent that it was premised
on the claim that Unifund failed to give Grant proper written notice to validate the
alleged debt before suing her.
2
The claims in this second class were for violations of the FDCPA, 15
U.S.C. §§ 1692d–f (which require debtors not to use abusive, fraudulent, or unfair
debt collection practices), state law abuse of process, state law conversion, and
California UCL.
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court held that these allegations constituted a de facto appeal from Grant’s state
judgment. Id.; see id. at 1239 n.3. Accordingly, the Grant I court decided that
“pursuant to the Rooker-Feldman doctrine, the Court cannot entertain any claims
premised on those alleged wrongs,” and therefore granted Unifund’s summary
judgment with regard to them. Id. at 1242. Grant did not appeal that judgment.
On March 15, 2012, Grant filed this putative class action (Grant II) in Los
Angeles County Superior Court, naming Unifund CCR LLC and Unifund Corp. as
defendants. Grant’s allegations here are substantially identical to those in Grant I.
Defendants removed Grant II under claim of federal question jurisdiction. The
district court dismissed the case with prejudice, holding that it was barred by res
judicata. Grant moved for reconsideration, arguing that the court should have
remanded the action to state court rather than dismiss with prejudice because the
Rooker-Feldman doctrine had deprived it of subject matter jurisdiction. The
district court denied Grant’s motion for reconsideration. Grant appealed both
rulings.
We find that the district court was correct to dismiss with prejudice Grant’s
first class of claims, namely those premised on her allegation that defendants failed
to provide Grant with proper written notice of the alleged debt before suing her.
Those claims were decided on the merits in Grant I. The removed complaint
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alleged a violation of FDCPA § 1692g(a)’s notice requirement when it asserted the
defendants “used unfair or unconscionable means, in violation of the FDCPA, to
collect or attempt to collect alleged debts against Plaintiff and Class Members
because they failed to communicate notice about the alleged debt before filing
lawsuits . . . .” Further, by its own terms, the removed complaint alleged a
violation of FDCPA § 1692g(a) when it asserted the “Defendants’ conduct as
alleged herein constitutes a violation of sections 1692g(a) and (d) of the FDCPA,
and the Rosenthal Act, in that Defendants failed to give proper notice to Plaintiff
and Class Members about the alleged debt before filing a civil lawsuit . . . .”
Although Grant subsequently amended the complaint to disavow expressly the
FDCPA § 1692g(a) claim, “[w]e have long held that post-removal amendments to
the pleadings cannot affect whether a case is removable, because the propriety of
removal is determined solely on the basis of the pleadings filed in state court.”
Williams v. Costco Wholesale Corp., 471 F.3d 975, 977 (9th Cir. 2006). The basis
for the district court’s federal question jurisdiction evaporated once Grant amended
her complaint to clarify that she was not asserting a claim under § 1692g(a), but
“[o]nce a case has been properly removed,” the district court may exercise
jurisdiction over state-law claims under 28 U.S.C § 1367. Id. The district court
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therefore properly exercised jurisdiction and correctly held that the first class of
claims were precluded by its merits determination in Grant I.
We find, however, that the district court erred in dismissing with prejudice
the second class of claims. Grant I found that the claims in the second class were
subject to the Rooker-Feldman doctrine because their adjudication would require
this court to act as a de facto court of appeals over a prior state court judgment. Id.
at 1239. The Rooker-Feldman doctrine prevents federal courts from exercising
subject matter jurisdiction over such claims. Kougasian v. TMSL, Inc., 359 F.3d
1136, 1139 (9th Cir. 2004). This determination of the Grant I court is accorded
preclusive effect. See Willy v. Coastal Corp., 503 U.S. 131, 137 (1992).
Once the district court dismissed with prejudice the first class of claims, all
of the remaining claims were subject to the Rooker-Feldman doctrine; therefore the
district court lacked subject matter jurisdiction over them. Because this case was
removed from state court, it is subject to the federal removal statute, which states
“If at any time before final judgment it appears that the district court lacks subject
matter jurisdiction, the case shall be remanded.” 28 U.S.C. § 1447(c) (emphasis
added). Because the effect of Rooker-Feldman is that this court’s subject matter
jurisdiction over the second class of claims is extinguished, the claims in this
second class should not have been dismissed, but rather should have been
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remanded to California state court, whence they came. See Mills v. Harmon Law
Offices, P.C., 344 F.3d 42 (1st Cir. 2003).
Therefore, we AFFIRM the district court’s dismissal with prejudice of the
first class of claims, but REVERSE and REMAND the second class of claims to
the district court with instructions to remand them to California state court. Each
party shall bear their own costs.
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