Ohio v. GMAC Mortgage, LLC
760 F. Supp. 2d 741
N.D. Ohio2011Background
- OAG filed state-law OCSPA and common-law fraud claims against Ally, GMAC, and Stephan in Ohio over alleged robosigning in hundreds of foreclosures.
- Defendants removed the case to federal court invoking diversity jurisdiction, contending the real parties in interest are individual Ohio homeowners, not the State or OAG.
- OAG alleges robosigning and false documents were used to foreclose, with Stephan allegedly signing up to 10,000 documents/month.
- Relief sought includes injunctive, declaratory, civil penalties, and damages; relief is targeted primarily at GMAC/Ally customers facing foreclosure.
- Court analyzes real-party-in-interest under diversity doctrine, considering whether the action as a whole or individual claims drive who benefits, and whether the State’s parens patriae interest applies.
- Court ultimately finds the real-parties-in-interest are the affected Ohio homeowners rather than the State, so diversity exists and removal is proper.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Who is the real party in interest for diversity? | Ohio is the real party in interest. | Individual homeowners are the real parties in interest. | Homeowners are the real parties in interest. |
| Does the complaint as a whole show the state's sole or primary benefit? | The action primarily benefits Ohio residents and the state. | Relief targets broad state interests. | Complaint as a whole favors homeowners, not the state. |
| Can parens patriae arguments establish the state as real party in interest? | State has quasi-sovereign interest to protect public welfare. | Parens patriae does not turn this suit into a state-wide benefits action. | Parens patriae does not render the state the real party in interest. |
| Should the court apply the whole-complaint or independent-claim approach? | Either approach supports state as real party. | Independent-claim approach undermines removal. | Both approaches yield that homeowners, not the state, are real party in interest. |
Key Cases Cited
- Ford Motor Co. v. Dep't of Treasury, 323 U.S. 459 (U.S. 1945) (real-party-in-interest determined by essential nature and effect of proceeding)
- Moor v. Alameda County, 411 U.S. 693 (U.S. 1973) (diversity requires real-party-in-interest inquiry beyond party names)
- State ex rel. Guste v. Fedders Corp., 524 F.Supp.552 (D.C.La. 1981) (multi-factor test for real-party-in-interest in state actions)
- Ex rel. Brown v. Market Development, Inc., Ohio Misc. 41 (Ohio Com.Pl. 1974) (OCSPA not intended to regulate completed sales; limits on broad state relief)