Williams v. Long Beach Mortgage Company

Background

Valerie Williams, proceeding without a lawyer and without prepaying filing fees, sued Long Beach Mortgage Company, Deutsche Bank National Trust Company as trustee for Long Beach Mortgage Trust 2006-2, Stephen J. Baum, and unidentified defendants. The case concerned a foreclosure action in New York State Supreme Court, Westchester County, involving property at 26 West Devonia Avenue in Mount Vernon, New York.

Williams invoked Federal Rule of Civil Procedure 60(d)(3), which addresses relief from a judgment obtained through fraud on the court. She asked the federal court to vacate the state-court foreclosure judgment. She alleged that the mortgage had not been deposited into the relevant trust by the trust's closing date, so the defendants lacked standing to foreclose, and she accused Baum of unscrupulous conduct. She also cited federal-question jurisdiction, a federal commerce-related jurisdiction statute, supplemental jurisdiction, and several state-law provisions concerning fraud, banking, foreclosure procedure, and consumer protection.

The opinion states that Williams had filed two earlier federal actions arising from the same foreclosure. In prior related proceedings, the court dismissed claims involving some of the same defendants, including one dismissal for lack of subject-matter jurisdiction and another involving the rule that federal district courts generally cannot review final state-court judgments. The opinion states that the state foreclosure judgment was entered on March 4, 2008, and the property was sold at auction on October 27, 2009.

Federal Claims and Rule 60

The court explained that citing federal jurisdiction statutes does not itself create federal jurisdiction or a federal cause of action. Williams's complaint did not allege facts showing a viable claim under federal law. The court also explained that the commerce-related jurisdiction statute applies only when a case arises under a federal law regulating commerce or protecting trade from restraints or monopolies, and that Williams had not alleged facts establishing such a claim.

The court further held that Rule 60 authorizes a federal district court to set aside its own judgments or orders, not a state-court judgment. Because Williams sought to invalidate the state foreclosure judgment, the court concluded that she was not entitled to relief under Rule 60. The court stated that federal review of the state judgment would also be barred by the Rooker-Feldman doctrine, which prevents federal district courts from acting as appellate courts for state-court judgments.

State Claims and Leave to Replead

After determining that it lacked subject-matter jurisdiction over Williams's federal claims, the court declined to exercise supplemental jurisdiction, meaning jurisdiction over related state-law claims, over her claims for fraud, fraud on the court, and alleged violations of New York law.

Because Williams was representing herself, the court granted her 30 days to file an amended complaint. The court did not state that amendment would succeed; it directed that any amended complaint be submitted to the court's Pro Se Intake Unit, labeled as an amended complaint, and marked with docket number 22-CV-6838 (LTS). No summons would issue at that time. If Williams failed to comply and could not show good cause, the court said it would direct the Clerk of Court to enter judgment consistent with the order.

Disposition

Judge Laura Taylor Swain dismissed the complaint for lack of subject-matter jurisdiction under Federal Rule of Civil Procedure 12(h)(3), while granting Williams 30 days' leave to replead. The court certified that an appeal would not be taken in good faith and denied Williams permission to proceed without prepaying fees for an appeal.