Satey v. Jp Morgan Chase & Co. ( 2008 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
SHANE SATEY, 
Plaintiff-Appellant,
v.
JPMORGAN CHASE & COMPANY, a No. 06-56370
corporation, d/b/a Chase Bank
USA NA,  D.C. No.
CV-05-07758-R
Defendant-Appellee,
OPINION
and
EXPERIAN INFORMATION SOLUTIONS,
INC., a corporation,
Defendant.

Appeal from the United States District Court
for the Central District of California
Manuel L. Real, District Judge, Presiding
Argued and Submitted
February 14, 2008—Pasadena, California
Filed March 31, 2008
Before: Betty B. Fletcher and N. Randy Smith,
Circuit Judges, and Samuel P. King,* Senior Judge.
Opinion by Judge N.R. Smith
*The Honorable Samuel P. King, Senior United States District Judge
for the District of Hawaii, sitting by designation.
3271
SATEY v. JPMORGAN CHASE 3273
COUNSEL
Robert F. Brennan, Esq., Brennan, Wiener & Associates,
P.C., La Crescenta, California, for the plaintiff-appellant.
George G. Weickhardt, Ropers, Majeski, Kohn, Bentley, San
Francisco, California, for the defendant-appellee.
OPINION
N.R. SMITH, Circuit Judge:
We hold that Appellant Shane Satey’s claim against
JPMorgan Chase & Company, d/b/a Chase Bank USA NA
(“Chase”) fails because Chase is not a “claimant” under Cali-
3274 SATEY v. JPMORGAN CHASE
fornia Civil Code sections 1798.92, et seq. (“California’s
Identity Theft Law”). We deny as moot Chase’s request for
further proceedings on its statement of material facts not in
controversy. We have jurisdiction under 28 U.S.C. § 1291 and
we affirm.
I.
Chase issued a credit card to Appellant Shane Satey on
March 17, 2002. Satey used the credit card in April 2002 for
purchases totaling a few hundred dollars. On May 19, 2002,
Chase received a charge in the amount of $8,666.00 on
Satey’s credit card account from Jackpot 98 Cent Store in
Glendale, California. Chase approved the charge and it there-
after appeared on Satey’s credit card statement for the billing
period ending on May 29, 2002.
Satey contacted Chase on June 4, 2002 to dispute the
charge as fraudulent and to report that his credit card was
missing. Based on Satey’s report of credit card fraud, Chase
closed the existing account (“original account”) and trans-
ferred the balance to a new account with a new account num-
ber.
That same day, a Chase account representative contacted
Jackpot 98 Cent Store and spoke with the merchant. The mer-
chant told the Chase account representative that Satey pur-
chased $8,000, before taxes, worth of clothing and suitcases,
and provided at the time of purchase a California driver’s
license containing the license number and date of birth. The
merchant also told the Chase account representative that Jack-
pot 98 Cent Store obtained a signed credit card slip and an
imprint of the card at the time of purchase. The Chase account
representative requested that the merchant fax the documenta-
tion to Chase for review. Upon review, the Chase account rep-
resentative determined that Satey’s actual date of birth and
driver’s license number matched the information provided by
the merchant.
SATEY v. JPMORGAN CHASE 3275
After this investigation, Chase decided that the charge was
legitimate and continued to seek payment from Satey for the
amount due including interest and other charges. Satey then
notified each of the three major credit bureaus that he was the
victim of identity theft, but, unfortunately, referenced only the
original account number when doing so. Meanwhile, Satey
refused to make any payments to Chase on the disputed
charge. As a result of his nonpayment, Satey’s account with
Chase became delinquent, and Chase reported the delin-
quency to the credit bureaus.
On March 28, 2003, Satey received a letter from CI Credi-
tors Interchange, Inc. notifying him that Trilogy Capital Man-
agement, LLC (“Trilogy”) purchased Satey’s account from
Chase. Trilogy requested that Satey tender payment in the
amount of $10,106.11. That letter stated that the collection
letter was “For: Chase Bank” but then went on to state that
Trilogy had purchased the debt and was responsible for col-
lection.
On December 6, 2004, lawyers for Great Seneca Financial
Corporation (“Great Seneca”) notified Satey that Great Sen-
eca had purchased Satey’s delinquent account.
II.
On October 31, 2005, Satey sued Chase, Great Seneca, and
Experian, one of the major credit bureaus, for violations of the
Fair Credit Reporting Act (“FCRA”), California’s Identity
Theft Law, the federal Fair Debt Collection Practices Act
(“FDCPA”), and California’s Fair Debt Collection Practices
Act (“California FDCPA”) in the United States District Court
for the Central District of California.
Subsequently, Satey voluntarily dismissed his claims
against Great Seneca and settled with Experian. Chase’s
counsel and Satey’s counsel executed a stipulation for dis-
missal of the FCRA, FDCPA, and California FDCPA claims.
3276 SATEY v. JPMORGAN CHASE
The record is unclear whether that document was ever filed,
though it appears that it was not. However, in the pretrial
report, Satey’s counsel represented to the district court that
those claims had been dismissed and both the district court
and counsel proceeded as if the claims had been dismissed.
Satey also requested in the pretrial report that the district court
consider whether it had jurisdiction over the remaining state
law claim.
The factual bases for Satey’s claim under California’s Iden-
tity Theft Law included improper credit reporting, improper
investigation, and improper sale of the disputed account by
Chase. On or about July 19, 2006, Chase brought a motion for
summary judgment on Satey’s claim arising under Califor-
nia’s Identity Theft Law. Chase argued that Satey’s claim
under California’s Identity Theft law failed because (1) it was
preempted by the federal FDCPA and (2) Chase was not a
“claimant” under California’s Identity Theft Law. The district
court heard argument regarding Chase’s motion on August
28, 2006, and granted Chase’s motion from the bench after a
short hearing, ruling that the FDCPA preempted Satey’s
claims under California’s Identity Theft Law.
III.
We review de novo whether the district court had subject
matter jurisdiction. Hoeck v. City of Portland, 57 F.3d 781,
784 (9th Cir. 1995). We review the district court’s decision to
exercise supplemental jurisdiction for an abuse of discretion.
Foster v. Wilson, 504 F.3d 1046, 1051 (9th Cir. 2007) (citing
28 U.S.C. § 1367(c)(3)).
“Summary judgment, a final order over which we take
jurisdiction pursuant to 28 U.S.C. § 1291, is reviewed de
novo, drawing all reasonable inferences supported by the evi-
dence in favor of the non-moving party.” Bodett v. CoxCom,
Inc., 366 F.3d 736, 742 (9th Cir. 2004) (citation and internal
quotation marks omitted). “We may affirm the district court
SATEY v. JPMORGAN CHASE 3277
on any basis supported by the record.” E. & J. Gallo Winery
v. EnCana Corp., 503 F.3d 1027, 1049 (9th Cir. 2007) (inter-
nal brackets, citation, and quotation marks omitted).
IV.
A. The District Court Properly Exercised Jurisdiction
[1] “The decision whether to continue to exercise supple-
mental jurisdiction over state law claims after all federal
claims have been dismissed lies within the district court’s dis-
cretion.” Foster, 504 F.3d at 1051. The fact that Satey may
have later sought dismissal of his federal claims does not
divest the district court of its power to exercise supplemental
jurisdiction unless those claims were absolutely devoid of
merit or obviously frivolous. See Gilder v. PGA Tour, Inc.,
936 F.2d 417, 421 (9th Cir. 1991). Satey’s federal claims
were neither devoid of merit nor obviously frivolous even
though they were not pursued.
[2] In Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 351
(1988), the Supreme Court observed that “pendent jurisdiction
doctrine is designed to enable courts to handle cases involving
state-law claims in the way that will best accommodate the
values of economy, convenience, fairness, and comity[.]” Id.
at 351. “[I]n the usual case in which all federal-law claims are
eliminated before trial, the balance of factors to be considered
under the pendent jurisdiction doctrine—judicial economy,
convenience, fairness, and comity—will point toward declin-
ing to exercise jurisdiction over the remaining state-law
claims.” Id. However, dismissal of the remaining state law
claims in not “mandatory.” Id. at 350 n.7.
There is no dispute that the district court’s initial exercise
of supplemental jurisdiction over Satey’s state law claims was
entirely proper. See 28 U.S.C. § 1367(a). The parties dispute
whether the district court abused its discretion by retaining
supplemental jurisdiction over the remaining state law claim
3278 SATEY v. JPMORGAN CHASE
in light of Satey’s stated intention to dismiss the remaining
federal claims.
[3] We hold that the district court did not abuse its discre-
tion by retaining supplemental jurisdiction over the remaining
state law claim. See 28 U.S.C. § 1367(c); Acri v. Varian
Assoc., Inc., 114 F.3d 999, 1000 (9th Cir. 1997) (en banc)
(recognizing discretionary nature of 28 U.S.C. § 1367(c) and
observing that “a federal district court with power to hear
state law claims has discretion to keep, or decline to keep,
them under the conditions set out in § 1367(c)”). Judicial
economy and convenience to the parties were better accom-
modated by retaining the state law claim at that juncture, and
the district court did not abuse its discretion by so doing. See
Carnegie-Mellon Univ., 484 U.S. at 350-51.
B. Chase is Entitled to Summary Judgment on Satey’s
Claim Under California’s Identity Theft Law
Chase challenges Satey’s claim under California’s Identity
Theft law on two distinct bases. Chase contends that the
FDCPA preempts Satey’s claim under California’s Identity
Theft Law. Chase also argues that it is not a “claimant” under
California’s Identity Theft Law, and thus, Satey’s claim
against Chase fails as a matter of law. Since we conclude that
Chase is not a “claimant” under California’s Identity Theft
Law, we express no opinion on whether the FDCPA pre-
empt’s Satey’s claim against Chase under California’s Iden-
tity Theft Law.
[4] California’s Identity Theft Law allows a “victim of
identity theft” to bring an action for damages, civil penalties,
and injunctive relief against a “claimant to establish that the
person is a victim of identity theft in connection with the
claimant’s claim against that person.” Cal. Civ. Code
§ 1798.93(a) and (c). “Claimant” means “a person who has or
purports to have a claim for money or an interest in property
in connection with a transaction procured through identity
SATEY v. JPMORGAN CHASE 3279
theft.” Cal. Civ. Code § 1798.92(a). The statute defines a
“victim of identity theft” as “a person who had his or her per-
sonal identifying information used without authorization by
another to obtain credit, goods, services, money, or property,
and did not use or possess the credit, goods, services, money,
or property obtained by the identity theft, and filed a police
report in this regard pursuant to Section 530.5 of the Penal
Code.” Cal. Civ. Code § 1798.92(d).
Civil penalties are available if the victim of identity theft
proves all of the following by clear and convincing evidence:
(A) That at least 30 days prior to filing an action or
within the cross-complaint pursuant to this section,
he or she provided written notice to the claimant at
the address designated by the claimant for com-
plaints related to credit reporting issues that a situa-
tion of identity theft might exist and explaining the
basis for that belief.
(B) That the claimant failed to diligently investi-
gate the victim’s notification of a possible identity
theft.
(C) That the claimant continued to pursue its claim
against the victim after the claimant was presented
with facts that were later held to entitle the victim to
a judgment pursuant to this section.
Cal. Civ. Code § 1798.93(c)(6).
Chase argues that summary judgment is appropriate on
Satey’s claim under California’s Identity Theft law because it
does not currently have, and has not had since 2003, “a claim
for money . . . in connection with a transaction procured
through identity theft.” Thus, Chase argues, that it has not
been a “claimant” since 2003 and that Satey’s claim against
3280 SATEY v. JPMORGAN CHASE
Chase under California’s Identity Theft Law fails as a matter
of law. For the reasons set forth below, we agree.
[5] The term “claimant,” as defined in California Civil
Code section 1798.92(a), reflects a present tense interest in a
debt or attempt to collect. “In construing statutes, the use of
verb tense by the Legislature is considered significant.”
Hughes v. Bd. of Arch. Exam’rs., 952 P.2d 641, 649 (Cal.
1998). “It is a general rule of statutory construction that a stat-
ute, expressed in general terms and words of present or future
tense, will be applied, not only to situations existing and
known at the time of the enactment, but also prospectively to
things and conditions that come into existence thereafter.”
State Comp. Ins. Fund v. McConnell, 294 P.2d 440, 446 (Cal.
1956); see also Cal. Civ. Code § 14. (“Words used in this
code in the present tense include the future as well as the pres-
ent.”). If the California Legislature wanted to define “claim-
ants” in the past tense, it could easily have done so by
modifying the statutory language. See Palmer v. United
States, 945 F.2d 1134, 1136 (9th Cir. 1991) (“If the legislature
wished to deprive urban property holders of qualified immu-
nity, it could have easily done so. It is not our role as a court
to rewrite the plain language of a state statute.”); see e.g., Cal.
Health & Safety Code § 52012.5 (expressly including a past-
tense construction in the statutory definition of “first time
homebuyer”).
[6] Accordingly, granting the appropriate significance to
the verb tense used by the California Legislature, we cannot
construe “claimant” to include a person who had an interest
in a disputed debt at some point in the past, but who no longer
retains the interest at the time suit is filed, under California’s
Identity Theft Law.
[7] At the time Satey filed suit on October 31, 2005, he
may have had a claim under California’s Identity Theft Law
against Great Seneca. Great Seneca had “a claim for money
or an interest in property in connection with a transaction pro-
SATEY v. JPMORGAN CHASE 3281
cured through identity theft.” Cal. Civ. Code § 1798.92(a).
However, Satey had no claim under California’s Identity
Theft Law against Chase on October 31, 2005 because Chase
did not have, and had not had since 2003, “a claim for money
or an interest in property in connection with a transaction pro-
cured through identity theft.” Id.
[8] Our holding that the term “claimant” is limited to the
present or future tenses is consistent with the four-year statute
of limitations allowed by California’s Identity Theft Law: a
“claimant” could maintain a claim against a victim of identity
theft for four or more years. The statute of limitations would
continue to run, and a victim of identity theft could seek relief
under California’s Identity Theft Law, so long as the “claim-
ant” maintained a claim. If, as happened here, a “claimant”
sells the disputed debt to another entity, and the victim of
identity theft has not yet filed suit, the victim of identity theft
may no longer sue the former “claimant” under California’s
Identity Theft Law. In that situation, the victim of identity
theft would be able to seek relief against the new “claimant”
and would have four years within which to do so.
[9] In summary, because the California Legislature explic-
itly used the present tense when crafting the definition of
“claimant” under California’s Identity Theft Law, we hold
that it does not apply to a “claimant” who no longer has a
claim at the time the lawsuit is filed. For that reason, while
Chase may have previously come within the scope of Califor-
nia’s Identity Theft Law, once Chase sold the debt it was no
longer a “claimant” under California’s Identity Theft Law.
Thus Satey’s claim under California’s Identity Theft Law was
not viable against Chase when he filed suit on October 31,
2005. Satey instead dismissed his claim against Great Seneca.
Consequently, we affirm the district court and hold that sum-
mary judgment was appropriately entered in light of the fact
that Chase is not a “claimant” under California’s Identity
Theft Law.
3282 SATEY v. JPMORGAN CHASE
Therefore, we decline to reach the propriety of the district
court’s conclusion that California’s Identity Theft Law is pre-
empted by the FCRA. In light of our decision affirming sum-
mary judgment, Chase’s request for further proceedings on its
statement of material facts not in controversy is moot.1
Affirmed.
1
By failing to file a cross appeal, Chase waived any issue it may have
had with respect to these claims. See S.M. v. J.K., 262 F.3d 914, 923 (9th
Cir. 2001).