Zubair v. Bank of America

Background

Ahmed Husain Zubair appeared without a lawyer and paid the filing fees. He sued Bank of America, BSI Financial, Fay Servicing Mortgage Company, Mortgage Contracting Services, the City of Yonkers, and individual employees of the lenders. The complaint invoked federal-question and diversity jurisdiction and asserted claims under the Consumer Financial Protection Act of 2010 (CFPA), the Federal Trade Commission Act (FTCA), and New York’s Zombie Property Law.

Zubair alleged that Bank of America began foreclosure proceedings involving his house in Yonkers, New York. He alleged that lenders and their agents failed to secure and maintain the property while holding the mortgage note, allowing squatters, vandalism, theft, and other damage. He also alleged problems involving force-placed insurance, inspections, winterizing, loan-modification applications, a proposed short sale, foreclosure auctions, and requests for insurance and property records.

He sought damages and repair costs, charges and fines connected to sanitation violations, various documents and financial information, reconsideration of a loan-modification application, an explanation for rejection of a short-sale offer, and redirection of sanitation fines to Fay Servicing under New York law.

Federal statutory claims

The court held that the CFPA does not give consumers a private right of action—the legal ability to sue directly under a statute. The CFPA authorizes the Consumer Financial Protection Bureau, state attorneys general, and state regulators to pursue violations. Because Zubair could not enforce the CFPA through his own lawsuit, the court dismissed those claims.

The court reached the same conclusion for the FTCA claims based on alleged unfair or deceptive acts or practices. It held that the FTCA authorizes enforcement by the Federal Trade Commission and does not give consumers or competitors a private cause of action. The court therefore dismissed Zubair’s FTCA claims as well.

State-law claims and jurisdiction

After dismissing the federal claims, the court declined to exercise supplemental jurisdiction, meaning jurisdiction over related state-law claims, over any claims Zubair was asserting under New York law.

The court also considered diversity jurisdiction. To establish diversity jurisdiction, a plaintiff must allege that the plaintiff and every defendant are citizens of different states and that the amount in dispute exceeds $75,000. The court found that Zubair had not shown complete diversity. In particular, he did not provide the states of incorporation or principal places of business for Bank of America, BSI Financial, or Mortgage Contracting Services, and his allegations indicated that some defendants were located in New York. The court therefore found that Zubair had not met his burden of showing diversity jurisdiction.

Leave to amend and disposition

Although courts generally allow a self-represented plaintiff to amend a defective complaint, the court found that amendment would be futile and declined to grant leave to amend.

The court dismissed the complaint for failure to state a claim on which relief may be granted and for lack of subject-matter jurisdiction under Federal Rule of Civil Procedure 12(h)(3). It directed the Clerk of Court to mail the order to Zubair, terminated all other pending matters, and entered the order on July 28, 2020.