United States District Court, D. Colorado
ORDER
PHILIP
A. BRIMMER UNITED STATES DISTRICT JUDGE
This
matter is before the Court on the Recommendation of the
United States Magistrate Judge [Docket No. 62] filed on July
26, 2018. The magistrate judge recommends that the Court
dismiss plaintiff's claims against defendant Playground
Destination Properties, Inc. (“Playground”) for
lack of venue. Docket No. 62 at 5. Plaintiff filed a timely
objection to the magistrate judge's recommendation on
August 6, 2018. Docket No. 63.
I.
BACKGROUND
Plaintiff
initiated this pro se lawsuit on December 29, 2017
asserting that he is entitled to $35, 000, 000 based on
defendants' failure to inform him of a two-year right to
rescind his contract to purchase a condominium at the Hard
Rock Hotel in San Diego, California. Docket No. 1 at 4, 33.
Plaintiff asserts claims for (1) violation of the Interstate
Land Sales Full Disclosure Act (“ILSA”), 15
U.S.C. § 1701 et seq.; (2) violation of
California's Subdivided Lands Act (“SLA”),
Cal. Bus. & Prof. Code §§ 11000-11200; (3)
violation of California's Unfair Competition Law
(“UCL”), Cal. Bus. & Prof. Code §§
17200 et seq.; (4) fraud; and (5) negligence. Docket
No. 1 at 26-33.
On July
26, 2018, the magistrate judge recommended that
plaintiff's claims against Playground be dismissed
without prejudice for lack of venue based on allegations
establishing that (1) defendants are residents of states
outside of Colorado and (2) all of the events giving rise to
this lawsuit took place in California. Docket No. 62 at 4.
The magistrate judge further recommended that the Court
dismiss plaintiff's claims rather than transfer them
pursuant to 28 U.S.C. § 1406 because (1) plaintiff's
complaint is redundant of a class action complaint filed in
the Southern District of California that was dismissed on the
merits, and (2) plaintiff knew or should have known that
venue in the District of Colorado was improper. Id.
at 4-5.
II.
STANDARD OF REVIEW
The
Court must “determine de novo any part of the
magistrate judge's disposition that has been properly
objected to.” Fed.R.Civ.P. 72(b)(3). An objection is
“proper” if it is both timely and specific.
United States v. One Parcel of Real Property Known as
2121 East 30th St., 73 F.3d 1057, 1059 (10th Cir. 1996).
In the
absence of a proper objection, the Court reviews the
magistrate judge's recommendation to satisfy itself that
there is “no clear error on the face of the
record.”[1]Fed. R. Civ. P. 72(b), Advisory Committee
Notes.
Because
plaintiff is proceeding pro se, the Court will
construe his objection and pleadings liberally without
serving as his advocate. See Hall v. Bellmon, 935
F.2d 1106, 1110 (10th Cir. 1991).
III.
ANALYSIS
Plaintiff
does not contest the magistrate judge's finding that
venue is improper in this district. However, plaintiff raises
several arguments challenging the recommendation of
dismissal. Those arguments fall into four general categories:
(1) the magistrate judge improperly considered the merits of
plaintiff's claims in recommending dismissal rather than
transfer; (2) plaintiff's claims have merit; (3)
plaintiff's claims are not time-barred; and (4) the
magistrate judge ignored binding precedent in recommending
dismissal. See generally Docket No. 63.
Plaintiff's
first argument is unpersuasive. In deciding whether to
transfer a case under 28 U.S.C. § 1631 to cure a
jurisdictional or venue defect, courts consider three factors
(“interest-of-justice factors”): (1) whether the
new action would be time barred, (2) whether the claims are
likely to have merit, and (3) whether the original action was
filed in good faith “rather than after plaintiff either
realized or should have realized that the forum in which he
or she filed was improper.” Trujillo v.
Williams, 465 F.3d 1210, 1223 n.16 (10th Cir. 2006)
(internal quotation marks omitted). While plaintiff suggests
that the magistrate judge improperly considered the merits of
plaintiff's claims, see Docket No. 63 at 1,
¶ 1, the second interest-of-justice factor contemplates
that a court will take a “‘peek at the
merits' to avoid raising false hopes and wasting judicial
resources that would result from transferring a case which is
clearly doomed.” Haugh v. Booker, 210 F.3d
1147, 1150-51 (10th Cir. 2000). Contrary to plaintiff's
assertion, such an inquiry does not constitute an
adjudication on the merits. This portion of plaintiff's
objection is therefore overruled.
Plaintiff's
next set of arguments appear to challenge the magistrate
judge's assessment of the second interest-of-justice
factor. The magistrate judge determined that plaintiff's
claims are unlikely to have merit because
“Plaintiff's Complaint is redundant of a complaint
made in a class action lawsuit filed in the Southern District
of California, where claims against Defendant Playground were
dismissed on the merits.” Docket No. 62 at 4. Plaintiff
first argues that the magistrate judge “erroneously
claimed that ‘the only operative difference in the
present Complaint made by Plaintiff from the California
complaint is that he seeks to collect additional
damages.'” Docket No. 63 at 2-3. However, plaintiff
admitted in his response to defendant's motion to dismiss
that, “except for additional damages identified, [the]
Complaint is almost identical to the most recent operative
complaint in a class action filed in the Southern District of
California in May 2011.” Docket No. 29 at 1. A review
of the complaints confirms that the same claims - and many of
the same allegations - were asserted in both lawsuits.
Compare Docket No. 1 at 26-32, with Docket
No. 22-2 at 34-41.
In an
effort to distinguish this case, plaintiff avers that he has
filed an amended complaint “raising numerous new
claims, premised upon different legal theories.” Docket
No. 63 at 4.[2] Yet plaintiff does not explain in his
objection how these amended allegations cure the deficiencies
that were found to be dispositive in the California
litigation. In his response to defendant's motion to
dismiss, plaintiff stated that he would amend his complaint
to (1) “allege that Playground violated the ILSA . . .
not on its knowledge of Plaintiffs rescission rights . . .
but based upon its misrepresentations made in the Closings
Notices”; and (2) assert “securities fraud
violations.” Docket No. 29 at 5-8. However, defendant
addressed these proposed amendments in its reply, arguing
that (1) the amendment to the ILSA claim would be futile
because both the original complaint in this lawsuit and the
California class action complaint already included
allegations of an “affirmative misrepresentation”
by Playground; and (2) any securities law claims asserted by
plaintiff would be time-barred. See Docket No. 33 at
4-5, 8-10. Plaintiff has not offered any argument to
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