Brooks v. Tarsadia Hotels

          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 ...