Opinion
No. 04 CV 07940 (GBD).
January 18, 2005
MEMORANDUM ORDER OPINION
Plaintiffs bring suit as a putative class action alleging violations of the Real Estate Settlement Practices Act ("RESPA"), 12 U.S.C. § 2605, and New Jersey state law against defendant Chase Manhattan Mortgage Corporation ("Chase"). Defendant moves to dismiss the complaint for improper venue pursuant to Fed.R.Civ.Pro 12(b)(3). Defendant's motion is granted.
Plaintiffs Webb and Carter own property in Tennessee and Colorado, respectively. Chase either currently or formerly serviced residential mortgage loans for these properties. Chase services those loans from Ohio. Plaintiffs allege that Chase violated RESPA by failing to respond to written requests for information or account correction, to make appropriate corrections to borrowers' accounts, and to make "timely payments of taxes and insurance from escrow accounts." Complaint, ¶ 78.
Defendants contend that venue is improper in this district because the properties of plaintiffs are neither located nor serviced in New York. "When venue is challenged, the plaintiff bears the burden of proving that venue is proper in the chosen forum." Central Sports Army Club v. Arena Assocs., Inc., 952 F.Supp. 181, 188. (S.D.N.Y. 1997).
In most cases, federal civil actions
may, except as otherwise provided by law, be brought only in (1) a judicial district where any defendant resides, if all defendants reside in the same State, (2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated, or (3) a judicial district in which any defendant may be found, if there is no district in which the action may otherwise be brought.
28. U.S.C. § 1391 (emphasis added). RESPA, however, includes its own venue provision, requiring that any action arising under Section 2605, 2607, or 2608, be brought in any "district in which the property involved is located, or where the violation is alleged to have occurred." 12 U.S.C. § 2614. Plaintiffs' complaint, however, clearly alleges that the properties are located in Tennessee and Colorado. Furthermore, the wrongful conduct is not alleged to have occurred in New York. RESPA's venue provision, therefore, is not satisfied.
Plaintiff also argues that Chase is a wholly owned subsidiary of JP Morgan Chase Co., which has its principle place of business in New York, and that Chase does business through JP Morgan Chase Bank branches. However, a showing of corporate relatedness, without more, is insufficient to establish liability on the part of one corporation for conduct by a related corporation. See DeJesus v. Sears Roebuck Co., Inc., 87 F.3d 65 (2d Cir. 1996).
In challenging defendant's Motion to Dismiss, plaintiffs argue that Chase's "wrongdoing takes place nationwide in scope . . ., and that members of the class reside in New York." Plaintiff's Brief at 3 (citing Complaint, ¶ 20). This argument is insufficient to support a finding that venue is proper in this district. In class actions where venue is governed by 28 U.S.C. § 1391, the rule is that only the residence of the named parties is relevant for determining whether venue is proper. See e.g. U.S. ex rel. Sero v. Preiser, 506 F.2d 1115, 1129 (2d. Cir. 1974).
RESPA expressly provides that either the property involved or the violation alleged to have occurred must be located in this District in order for plaintiffs to bring their claims before this court. As plaintiffs have not met this requirement, plaintiff's complaint is dismissed.
During oral argument on January 18, 2005, plaintiff's counsel sought leave to: conduct limited discovery on the issue of venue; and to amend his complaint. Both these applications are denied. Despite the liberal policy toward amendment embodied in Rule 15(a) of the Federal Rules of Civil Procedure, "leave to amend should not be granted where it is futile." Bruce v. Martin, 702 F.Supp. 66, 69 (S.D.N.Y. 1988); see Foman v. Davis, 371 U.S. 178, 192 (1962). Plaintiff has not submitted a proposed amended complaint. Moreover, plaintiff has not articulated nor could he articulate any amendments that would provide for proper venue in this district regarding his RESPA claims. See Health Chem. Corp. v. Baker, 915 F.2d 805, 810 (2d Cir. 1990) ("where . . . there is not merit to the proposed amendments, leave to amend should be denied;) Id.
SO ORDERED: