Civil Procedure I, Pages 237–239

⭐In re Ameriquest Mortgage Co. Mortgage Lending Practices Litigation

United States District Court for the Northern District of Illinois, 2007

Facts:

Plaintiff Skanes consummated a mortgage transaction with Ameriquest. Shortly before the close of the transaction, Ameriquest ordered from co-defendant Homestead Appraisal of Rockford a property appraisal of Skanes' future home. Homestead, through its agent Trevino appraised the house at $163,000. Trevino valued her home at much more than it was actually worth in order to increase Ameriquest's profit. She sought rescission of the mortgage and statutory damages under the federal Truth in Lending Act (TILA), as defendant provided her with improper and misleading disclosures of her right to cancel her mortgage. She also alleged state law fraud claims against all defendants. She also sought the court to tell her what obligation, if any, she had towards the various defendants. Defendant moves to dismiss the state claims against him.

Issue:

Is the claim valid under 28 U.S.C. § 1367?

Rule:

28 U.S.C. § 1367(a) provides that when a court has jurisdiction over a federal claim, they also have supplemental jurisdiction over state 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."

Explanation:

"Courts routinely compare the facts necessary to prove the elements of the federal claim with those necessary to the success of the state claim." They may also ask "whether the state claims can be resolved or dismissed without affecting the federal claims."

Reasoning:

Skanes' claims combine to tell a single story. One cannot be concluded without affecting the other.

Holding:

There is a sufficient nexus between Skanes' state law claims and her TILA claim to support supplemental jurisdiction
The discretionary factors set forth in [28 U.S.C. § 1367(c)] do not weigh in favor of a decision to decline to exercise supplemental jurisdiction.

Judgment:

Motion denied.