This matter is before the Court on a Motion to Remand by Plaintiffs Walter and Rosa Dash (“Dash”) [Document # 8], and Motions to Dismiss by Defendant Sovereign Bank (“Sovereign”) [Document # 17], Defendant UBS Warburg Real Estate Securities, Inc., (“UBS Warburg”) [Document # 19], and Defendants First-Plus Home Loan Trust 1996-2, FirstPlus Home Loan Owner Trust 1996-3, First-Plus Home Loan Owner Trust 1996-4, FirstPlus Home Loan Owner Trust 1997-1, FirstPlus Home Loan Owner Trust 1997-2, FirstPlus Home Loan Owner Trust 1997-3, FirstPlus Home Loan Owner Trust 1997-4, FirstPlus Home Loan Owner Trust 1998-1, FirstPlus Home Loan Owner Trust 1998-2, FirstPlus Home Loan Owner Trust 1998-3, First-Plus Home Loan Owner Trust 1998A1, FirstPlus Home Loan Owner Trust 1998-5, German American Capital Corporation, Ace Securities Corporate Home Loan Trust 1999 A, Real Time Resolutions, Inc., U.S. Bank National Association, and U.S. Bank National Association, N.D. (collectively “Trust Defendants”) [Document # 21], (Sovereign, UBS Warburg, and Trust Defendants are collectively “Defendants”), for failure to state a claim upon which relief can be granted pursuant to Federal Rule of Civil Procedure 12(b)(6). Trust Defendants also allege that this Court lacks subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1). For the following reasons, Plaintiffs’ Motion to Remand is DENIED, Sovereign’s Motion to Dismiss is GRANTED, UBS Warburg’s Motion to Dismiss is GRANTED, and Trust Defendants’ Motion to Dismiss is GRANTED.
1. BACKGROUND
On August 23, 1997, Plaintiffs Walter and Rosa Dash obtained a secondary mortgage loan from an originating lender 1 secured by a lien on their residence. (Comply 36.) The principal amount of the loan was $36,000, and pursuant to the terms of the agreement, the interest rate was 17.99% over a 180 month term. (Comply 36.) The originating lender also charged Plaintiffs fees and costs totaling $4659.50 at closing, which included a general fee of $3500, an underwriting fee of $300, an administration fee of $125, a document preparation and signing fee of $125, a valuation review fee of $75, a flood certificate fee of $24.50, an attorney fee of $300, a title administration fee of $100, a title insurance fee of $70, and a recording fee of $40. (Compl.lffl 37-39.)
Plaintiffs filed this putative class action in the General Court of Justice Superior Court Division of Durham County, North Carolina on September 12, 2001.
2
On October 4, 2001, all Defendants removed the action to this Court based solely on assertions of diversity jurisdiction under 28 U.S.C. § 1332. 3 Plaintiffs are North Carolina residents and Defendants are corporations and trusts whose places of incorporation and/or principal places of business are outside of North Carolina. (Notice of Removal ¶¶ 3~4.) Plaintiffs contend, however, that the amount in controversy does not exceed $75,000 as required by 28 U.S.C. § 1332, and consequently, filed a Motion to Remand on November 5, 2001. (Mot. to Remand ¶ 8.) On February 7, 2002, Defendant Sovereign, Defendant UBS Warburg, and all of the Trust Defendants, filed separate Motions to Dismiss alleging that Plaintiffs failed to state a claim upon which relief could be granted under Federal Rule of Civil Procedure 12(b)(6), and Trust Defendants further assert that this Court lacks subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1). The arguments raised in each of these motions are substantially similar and will be dealt with by the Court together.
II. DISCUSSION
A. Motion to Remand
As an initial matter, the Court must address Plaintiffs’ argument, made in their Motion to Remand, that Defendants improperly removed this action. Defendants removed this action on the basis of diversity jurisdiction pursuant to 28 U.S.C. § 1332. Plaintiffs are all North Carolina residents while Defendants are corporations whose principal places of incorporation and/or principal places of business are outside of North Carolina. Therefore, the question for purposes of diversity jurisdiction is whether the “matter in controversy exceeds $75,000, exclusive of interest and costs.” 28 U.S.C. § 1332(a). Plaintiffs argue that Defendants have not carried their burden of establishing facts that demonstrate the Court has diversity jurisdiction, that is Plaintiffs contend that Defendants have not demonstrated that Plaintiffs’ Complaint asserts claims for which the amount in controversy will exceed $75,000. For this reason, Plaintiffs request that the Court remand the matter to the appropriate North Carolina court.
The gravamen of Plaintiffs’ argument is that their “Complaint alleges no specific facts from which the Defendants or the Court can conclude to a reasonable probability and legal certainty that any or all of the named Plaintiffs’ claims will exceed the
All defendants have a statutory right to remove any civil action brought in state court over which “the district courts of the United States have original jurisdiction _” 28 U.S.C. § 1441(a);
Davis v. North Carolina Dep’t of Corr.,
In a class action, if there are “separate and distinct claims by two or more plaintiffs, the determination of the amount in controversy is based upon each plaintiffs claims and not upon the aggregate.”
Glover v. Johns-Manville Corp.,
In North Carolina, a plaintiff is forbidden in some eases from claiming a specific amount greater than $10,000 in damages. N.C.R. Civ. P. Rule 8(a)(2). Instead, plaintiffs must proceed as Plaintiffs have done in this ease, that is by simply stating that the relief demanded is “in excess of ten thousand dollars ($10,000).”
Id.
Since “[t]he burden of establishing federal jurisdiction lies on the party seeking to litigate in federal court,” Defendants are the parties who must show that the amount in dispute exceeds $75,000.
Gwyn
In considering the propriety of a removal, the district court generally “must restrict itself to ‘the plaintiffs pleading, which controls.’ ”
Griffin v. Ford Consumer Fin. Co.,
Defendants argue that the principles of
St. Paul
should be read in light of cases such as the Fifth Circuit’s decision in
De Aguilar v. Boeing Co.,
[P]ermits strategic use of the state civil rules as a device to prevent removal, effectively permitting a plaintiff to avoid federal court and either (1) amend his prayer for relief, or (2) simply ignore it and then request the jury to make a more substantial award once the statutory deadline for removal has passed.
McCoy,
The next determination the
De Aguilar
and
McCoy
courts faced was deciding on “the burden of proof to be placed upon [the defendant] as it attempts to establish the jurisdictional minimum.”
Id.
at 486. Both courts ultimately chose the “preponderance of the evidence” standard which, as noted, is also used within this District. Such a standard gives deference to the principle that a plaintiffs pleading ordinarily controls and recognizes that a “[p]laintiff is, to some extent, still the master of his own claim ...” because, under this standard, a “plaintiffs claim remains presumptively correct unless the defendant can show by a preponderance of the evidence that the amount in controversy is greater than the jurisdictional amount.”
De Aguilar,
This Court will follow the approach adopted in
De
Aguilar
7
and
McCoy
because, as stated in
White v. J.C. Penney Life Ins. Co.,
When the amount of damages a plaintiff seeks is unclear, “the court may look to the entire record before it and make an independent evaluation as to whether or not the jurisdictional amount is in issue.”
Id.
(citing 14A Charles A. Wright, Arthur R. Miller,
&
Edward H. Cooper,
Federal Practice and Procedure
§ 3725 at 423-24 (1985));
see also Gwyn,
In the instant case, Defendants have attached an affidavit of a Certified Public Accountant, which contends that Plaintiffs’ claims are worth more than $75,000, to their Notice of Removal. (Horner Aff.) Defendants’ damage calculations are based on the face of Plaintiffs’ Complaint and cover the three areas of damages that Plaintiffs seek. 8 Defendants have identified these as: 1) “[t]wice the total of all interest 9 paid [which] amounts to $48,704.42;” 2) relief from “any further obligation to pay interest on the note,” which amounts to $42,059.79; and 3) recovery of “all closing fees and costs,” which amounts to $4,659.50. (Resp. Br. in Opp’n to Pis.’ Mot. to Remand at 8.) These three figures total $95,423.71. Notwithstanding the fact that these basic damages requests alone satisfy the amount in controversy requirement, Plaintiffs have also requested that they recover treble damages pursuant to the provisions of North Carolina General Statute § 75-16. (CompU 75.) Additionally, Plaintiffs request recovery of costs including reasonable attorneys’ fees. 10 (Id.)
Pursuant to North Carolina Rule of Civil Procedure 54(c), the damages requested on the face of Plaintiffs’ Complaint, as opposed to Plaintiffs’ non-binding stipulation, ultimately determine the value of the claim. Consequently, the Court concludes that Defendants have demonstrated, based upon a preponderance of the evidence, that the damages requested on the face of the Complaint ensure that the value of the case well exceeds the requisite amount in controversy, and Plaintiffs have failed to demonstrate otherwise.
11
Accordingly, the Court finds that it has subject matter jur
B. Motions to Dismiss
Because Plaintiffs’ Complaint satisfies the requirements of diversity jurisdiction, the Court will now address Defendants’ Motions to Dismiss, some of which were filed by groups of Defendants and others which were filed by individual Defendants. As a threshold matter, however, all Defendants contend that Plaintiffs lack standing to maintain their claims against Defendants. Alternatively, Defendants contend that Plaintiffs cannot maintain their claims for failure to state a usurious interest and fees charged claim or an unfair and deceptive trade practices claim because they would be barred by the applicable statute of limitations
12
and that the statutes do not apply to the instant controversy
13
. However, because of the
1. Standard of Review
There are two ways in which to present a Rule 12(b)(1) motion to dismiss for lack of subject matter jurisdiction.
Adams v. Bain,
2. Standing Requirements
As stated, Defendants argue that Plaintiffs’ Complaint on its face demonstrates that the Court lacks subject matter jurisdiction in this case. The specific basis for this argument is that Plaintiffs have no standing to sue Defendants. The question of standing ultimately asks whether litigants are “entitled to have the court decide the merits of the dispute.”
Warth v. Seldin,
Plaintiffs, however, assert that they satisfy the requirements of standing on two grounds. First, Plaintiffs maintain that because there is a juridical link among Plaintiffs and Class Members, FirstPlus Group, and all of Defendants, they have satisfied the requirements of standing. 15 Second, Plaintiffs rely on the Home Ownership Equity Protection Act of 1994 (“HOEPA”), 15 U.S.C. § 1641, Pub.L. No. 103-325 (codified as amended at 15 U.S.C. §§ 1602(aa), 1639, and 1641(d)), as a basis for standing. Specifically, as to the second argument, Plaintiffs contend that because Defendants are assignees of secondary mortgage loans, HOEPA permits Plaintiffs to bring suit against them as though Defendants are the loan originators. The Court will address each of these arguments in turn.
3. Existence of a Juridical Link to Establish Standing
To satisfy the “irreducible constitutional minimum” of standing,
Lujan v. Defenders of Wildlife,
Even if Plaintiffs could establish sufficient injury-in-fact, they fail to satisfy the latter two requirements, that is traceability and redressabihty. Fundamentally, Plaintiffs do not ahege any contractual relationship whatsoever with Defendants. Indeed, they carefully avoid stating that any of Defendants holds their mortgage-secured notes or services their loans. Instead, in their allegations directed specifically at Defendants, Plaintiffs state that they named Defendants solely based “upon information and belief’ that they are “the holders of promissory notes related to the mortgage loans made by FirstPlus Group to Plaintiffs and Class Members.” (Comply 6.) Plaintiffs never identify them as assignees, past or present, or purchasers of their respective loans. 16 Absent a contractual relationship with any of Defendants, Plaintiffs cannot possibly show that their injuries, such as they have suffered, are traceable to the conduct of any of Defendants, nor can they possibly show that a judicial ruling in their favor would likely redress their injuries.
In support of Plaintiffs’ argument that they have the requisite standing, Plaintiffs cite
Moore v. Comfed Savings Bank,
Indeed, Plaintiffs’ characterization of their suit as a putative class action in no way cures this defect.
See Simon v. Eastern Ky. Welfare Rights Org.,
The Seventh Circuit, in
Jackson v. Resolution GGF Oy,
Indeed, “it is essential that named class representatives demonstrate standing through a ‘requisite case or controversy between themselves personally and [defendants],’ not merely allege that ‘injury has been suffered by other, unidentified members of the class to which they belong and which they purport to represent.’ ”
Cent. Wesleyan Coll. v. W.R. Grace & Co.,
In response, Plaintiffs argue that by relying on a “juridical link” theory the named Plaintiffs may pursue their claims against Defendants because Defendants hold the loans of putative class members. Plaintiffs contend that Defendants are “juridically linked” because “Plaintiffs/Class [M]embers all received illegal and unfair secondary mortgage loans from [FirstPlus Group], which then scattered these loans among the universe of named Assignee Defendants.” (Pis.’ Mem. in Opp’n to Defs.’ Mot. to Dismiss at 9.) In other words, Plaintiffs contend that they have standing to assert their claims against all Defendants because all of the holder Defendants are linked to Plaintiffs through a common juridical lynchpin, that is through FirstPlus Group. 17 By applying the juridical link theory to the instant matter, Plaintiffs argue that it is appropriate to join as Defendants parties with whom the named class representatives do not have a direct relationship.
A juridical relationship among defendants is most often found “[w]here all members of the defendant class are officials of a single state and are charged with enforcing or uniformly acting in accor
4. Use of the Home Ownership Equity Protection Act as a Basis for Standing
Plaintiffs alternatively contend that because HOEPA provides a basis of assignee liability against secondary mortgage holders, and Defendants are secondary mortgage holders, that Plaintiffs satisfy the requirements of standing with respect to Defendants. Conversely, Defendants assert that standing does not exist here because HOEPA only provides Plaintiffs with a basis of assignee liability against the actual holder of their loan, and even then, only in certain circumstances.
In 1968, Congress enacted the Truth in Lending Act (“TILA”), a federal statute that governs the terms and conditions of consumer credit by,
inter alia,
requiring lenders to disclose. certain details about the loans and loan fees and costs. 15 U.S.C. § 1601
et seq.
Congress intended TILA to assure a meaningful disclosure of credit terms so that consumers would not be mislead as to the costs of financing.
Id.
Faced with increasing reports
of
abusive practices in home mortgage lending, Congress enacted HOEPA in 1994 as an amendment to TILA. HOEPA requires lenders to provide borrowers with additional disclosures with respect to certain home mortgages. 15 U.S.C. § 1639(a)(1). Congress intended HOEPA to result in greater disclosure to borrowers involved in high cost loans and to stop certain loan terms and practices. 15 U.S.C. § 1639. The legislative history of HOEPA demonstrates that Congress enacted HOEPA to force the high cost mortgage market to police itself,
Bryant v. Mortgage Capital Res. Corp.,
In the instant matter, Plaintiffs allege that HOEPA gives them standing and permits them to assert claims against Defendants even though Defendants did not originate the loan.
18
The crux of their argument is based upon the following logic: Plaintiffs first assert that the injuries
Nevertheless, Plaintiffs secondly point to HOEPA as a means for establishing standing to the extent that it states that “any person who purchases or is otherwise assigned a mortgage referred to in section 1602(aa) of this title shall be subject to all claims and defenses with respect to that mortgage that the consumer could assert against the creditor of the mortgage .... ” 15 U.S.C. § 1641(d)(1). Because Defendants are assignees of Plaintiffs’ loan, Plaintiffs contend that Defendants are liable for any illegal acts of the loan originator. 19
However, Plaintiffs’ logic is flawed as they mistakenly focus on the language within HOEPA regarding “all claims and defenses.” The language of subsection (1) of HOEPA provides in clear and unambiguous terms that assignees are subject to all claims and defenses under
any law
that a borrower could have asserted against the original lender.
Vandenbroeck v. Contimortgage Corp. and Greentree Fin. Servicing Corp.,
In sum, the only claims that are before this Court are those of named Plaintiffs against the named Defendants. Thus, Plaintiffs must demonstrate that they satisfy the requirements of standing vis-a-vis each Defendant. Since the named Plaintiffs fail to state which of any of the Defendants actually holds their loans, they fail to meet this test with respect to any of the Defendants. Moreover, Plaintiffs have not established an actual case of controversy between themselves and any of the Defendants.
21
Plaintiffs’ class allegations, juridi
III. CONCLUSION
Because Defendants can demonstrate that the amount in controversy exceeds $75,000, Defendants established that the removal of the instant matter from state court on the basis of diversity jurisdiction was proper. Accordingly, Plaintiffs’ Motion to Remand [Document #8] is DENIED.
Moreover, because Plaintiffs cannot satisfy the requirements of standing with respect to any of Defendants, the Court lack subject matter jurisdiction over the instant matter. Consequently, all outstanding Motions to Dismiss by Defendants [Documents # 17,19, 21] are GRANTED.
Notes
. Plaintiffs, in their Complaint and other submissions to the Court, do not identify which institution was their lender. Instead, they refer collectively to a group of lenders which made second mortgage loans as "FirstPlus Group,” and assert that they received their loan from one of the lenders in the FirstPlus Group. Specifically, the lenders that Plaintiffs identify in their Complaint are "FirstPlus Direct, doing business as FirstPlus Financial, Inc., successor in interest to Capital Direct Funding Group, Inc.,” and FirstPlus Bank. (Comply 1.) None of these parties is named as a defendant in this action.
. Class certification has not yet been requested by Plaintiffs. However, in considering the propriety of a removal, the district court generally "must restrict itself to 'the plaintiff's pleading, which controls.’ "
Griffin v. Ford Consumer Fin. Co.,
. The Complaint asserts no federal questions, and Defendants do not contend that the Complaint alleges any federal questions.
.
See Gwyn, 955
F.Supp. at 46 (stating that the Fourth Circuit has not adopted a specific rule for determining the amount in controversy for jurisdictional purposes);
Rota v. Consolidation Coal Co.,
. The Court notes, however, that when a case is originally filed by a plaintiff in federal court and the defendant challenges jurisdiction, it is well-settled that the more stringent "legal certainty" standard applies.
St. Paul Mercury Indem. Co. v. Red Cab Co.,
.North Carolina has such a rule. North Carolina Rule of Civil Procedure 54(c) permits a
. The Court notes that some district courts within this circuit have declined to adopt
De Aguilar. See Spann v. Style Crest Prods., Inc.,
. Specifically, Plaintiffs contend that they are entitled to damages "including twice the total of all interest paid, fees and costs, and are entitled to the refund of all interest previously paid to [ ] Defendants and to be relieved from any obligation to make further payments on interest on the note, plus all permissible attorneys [sic] fees” and costs. (Compl-¶ 62.) Plaintiffs also contend that because of Defendants' unfair and deceptive trade practices, they are entitled to recover treble damages from Defendants and reasonable attorneys’ fees. (ComplA 75.)
. Although 28 U.S.C. § 1332(a) requires that the $75,000 threshold amount be met "exclusive of interest and costs,” interest is not excluded from the calculation if it is itself the basis of the suit.
Brown v. Webster,
. The Court is mindful of the fact that any estimated award of attorneys’ fees must be "prorated among all members of the plaintiff class.”
Ratliff v. Sears, Roebuck and Co.,
.Although they provide no support, Plaintiffs attempt to counter Defendants' amount in controversy evidence by asserting that Defendants would have the Court “infer that [P]laintiffs do have damages in excess of $75,000.00 based on the [] allegations in the Complaint ...” and by contending that "Mr. Horner’s calculation fails to determine precisely what damages the Plaintiffs are entitled to ... and assumes and speculates as to the amount of damages at issue.” (Mem. in Supp. of Pis.’ Mot. to Remand at 8-9.) In his affidavit, Horner first sets forth the terms of the loan as alleged in the Complaint, namely, a "loan [received] on August 23, 1997, for
. Because the Court does not have subject matter jurisdiction over the instant matter, it cannot address the merits of Plaintiffs' substantive claims, or examine Defendants’ Motions to Dismiss pursuant to Rule 12(b)(6). Nevertheless, the Court notes that Plaintiffs' claims under both Chapter 24 of the North Carolina General Statutes for usurious fees and interest and Chapter 75 of the North Carolina General Statutes for unfair and deceptive trade practices would be barred by the applicable statutes of limitations. Specifically, Plaintiffs signed their loan on August 23, 1997, and filed this action on September 12, 2001. The statute of limitations for a claim for usurious fees and interest pursuant to Chapter 24 of the North Carolina General Statutes is two years. N.C. Gen.Stat. §§ 1-53(2), 1-53(3). In order to maintain such a claim, Plaintiffs would have had to file their suit by August 23, 1999, and therefore, Plaintiffs would be barred from bringing their claim for usurious fees and interest. Additionally, the statute of limitations for a claim of unfair and deceptive trade practices is four years. N.C. Gen.Stat. § 75-16.2. Plaintiffs would have had to file their suit by August 23, 2001 in order to maintain such a claim, and consequently, they would be barred from bringing their unfair and deceptive trade practices claim. The Court rejects Plaintiffs’ argument that the accrual date of Plaintiffs’ claim would be extended by the continuous remittance of monthly mortgage payments. Plaintiffs' claim would have accrued on the date when they knew or should have known they were being charged what they argue are usurious fees and interest, conduct which Plaintiffs also contend constitute unfair trade •practices. The accrual of both claims, to the extent that they exist, would have been the same date, that is the date when the loan was closed on August 23, 1997.
. As noted, because the Court lacks subject matter jurisdiction over this matter, it cannot address the merits of Plaintiffs’ substantive claims. Nevertheless, the Court notes that Plaintiffs’ claims under Chapter 75 of the North Carolina General Statutes for unfair and deceptive trade practices and some of Plaintiffs' claims under Chapter 24 of the North Carolina General Statutes (the "Interest Statutes”) for usurious fees and interest would fail because the statutes are inapplicable in this instance. Specifically, Plaintiffs cannot maintain their claim for unfair and deceptive trade practices under Chapter 75 of the North Carolina General Statutes because Plaintiffs cannot demonstrate that the named Defendants engaged in an unfair or deceptive act. Plaintiffs rely on the notion of assignee liability as established by HOEPA to assert that assignee Defendants are responsible for the acts of their loan’s originator. However, Plaintiffs' characterization of the reach of HOEPA's assignee liability is flawed because HOEPA does not create a new right or claim
. The Court notes that only the Trust Defendants have filed a Motion to Dismiss for lack of subject matter jurisdiction pursuant to Rule 12(b)(1). Nevertheless, all Defendants argue in their memoranda in support of their respective Motions to Dismiss that Plaintiffs lack standing to bring the instant lawsuit.
. Plaintiffs have named as Defendants eveiy assignee of FirstPlus Group-originated North Carolina loans that were known at the time the Complaint was filed. (Pis.’ Mem. in Opp'n to Defs.’ Mot. to Dismiss at 9.)
. Of Defendant, only Sovereign asserts that it does not hold the notes signed by Plaintiffs. (Reply Br. in Further Supp. of Mot. of Def. Sovereign Bank to Dismiss Pis.’ Compl. at 7.) The remaining Defendants argue that Plaintiffs lack standing because Plaintiffs do not allege that they hold the loan note.
. The Court notes that the juridical link doctrine has recently come under close scrutiny due to its conflict with Article III standing issues. See, e.g., William D. Henderson, Reconciling the Juridical Linlcs Doctrine with the Federal Rules of Civil Procedure and Article III, 67 U.Chi.L.Rev. 1347 (2000). However, the Fourth Circuit has not yet examined the juridical link doctrine.
. Notably, Plaintiffs do not assert direct claims under HOEPA or TILA, but rather rely on HOEPA liability to maintain claims under the North Carolina Interest Statutes and the North Carolina Unfair and Deceptive Trade Practices Act.
. One of Defendants' arguments is that Plaintiffs "completely ignore the fact that there is no plausible or rational interpretation of HOEPA’s purported assignee liability provision that puts a non-assignee of a plaintiff’s loan in the loan originator's shoes for liability purposes.” (Reply Br. in Supp. of Defs.’ Mot. to Dismiss at 6.) As already noted, Plaintiffs must have standing vis-a-vis each Defendant and cannot maintain their claims against non-assignee Defendants.
. A holder in due course is one who takes an instrument for value, in good faith and without notice that it is overdue or has been dishonored or of any defense against or claim to it on the part of any person. N.C. Gen. Stat. § 25-3-302(a)(l). As holders in due course, Defendants attain a preferred status whereby a holder in due course can enforce the instrument free from all claims and defenses. N.C. Gen.Stat. § 25-3-305. By removing the holder in due course defense, Plaintiffs, can assert any claim against their assignee that they could assert against the loan originator.
Carolina First Nat. Bank v. Douglas Gallery of Homes, Ltd.,
.Alternatively, Plaintiffs contend that Defendants "specifically did not file their purchases of loans in public records just so that Plain