Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Harjo v. City of Albuquerque

United States District Court, D. New Mexico

March 30, 2018

ARLENE HARJO, Plaintiff,
v.
CITY OF ALBUQUERQUE, Defendant.

          Arash Kashanian Law Offices of Arash Kashanian Albuquerque, New Mexico and Charles Brad Lane Cates Law Offices of Charles Brad Lane Cates Fairacres, New Mexico and Justin Pearson Institute for Justice Miami, Florida and Robert Frommer Robert Johnson Institute for Justice Arlington, Virginia Attorneys for the Plaintiff.

          Jeffrey Butler Driggers Kyle Jordan Hibner Eric Jon Locher Philomena M. Hausler Assistant City Attorneys City of Albuquerque City Attorney's Office Albuquerque, New Mexico and Jerry A. Walz Walz and Associates Albuquerque, New Mexico Attorneys for the Defendant.

          MEMORANDUM OPINION AND ORDER

         THIS MATTER comes before the Court on the Defendant City's Motion for Judgment on the Pleadings and Memorandum in Support, filed June 7, 2017 (Doc. 44)(“Motion”). The primary issues are: (i) whether the Court must dismiss the Motion, because the parties have developed a factual record; (ii) whether Defendant City of Albuquerque's motor vehicle seizure and forfeiture ordinance, Article 6, §§ 7-6-1 to 7 (“Forfeiture Ordinance”), which funds the City of Albuquerque's vehicle forfeiture program, [1] violates the Fourteenth Amendment to the Constitution of the United States of America by creating an unlawful profit incentive for the City of Albuquerque and its employees; (iii) whether the City of Albuquerque's Forfeiture Ordinance violates the Fourteenth Amendment, because it places the burden of proof on property owners to prove their innocence to recover their seized property; and (iv) whether the Court should dismiss Plaintiff Arlene Harjo's state law claim under 28 U.S.C. § 1367's novelty prong, which requires the Court to consider whether the New Mexico Forfeiture Act, N.M. Stat. Ann. §§ 31-27-1 to 11 (“NMFA”), preempts the Forfeiture Ordinance. The Court concludes that it will not deny the entire Motion, merely because the parties have developed a record, as rule 12(c) of the Federal Rules of Civil Procedure requires the Court to treat the Motion as it would any 12(b)(6) motion. Discovery's status does not bear on the 12(b)(6) analysis. The Court also concludes, however, that A. Harjo has stated a claim on which the Court can grant relief for both her unlawful profit incentive and procedural due process claims. The Court concludes that she has stated an unlawful profit incentive claim, because she has alleged that the vehicle forfeiture program is financially dependent on the revenues gained from seizing vehicles, and because she has alleged that City of Albuquerque employees use the seized vehicles for personal use. That city officials might depend on the revenues for their salary and that they use the seized cars for personal use “inject[s] a personal interest, financial or otherwise, into the enforcement process.” Marshall v. Jerrico, Inc., 446 U.S. 238, 249-50 (1980)(“Marshall”). The Court dismisses, however, her unlawful profit incentive claim to the extent that it contends that the City of Albuquerque violates due process by budgeting for and using funds it raises from forfeitures to pay for its costs. That a program pays for itself through its statute, at least in this case, does not inject a personal or institutional interest to such a degree that it implicates due process. The Court also concludes that A. Harjo has stated a procedural due process claim, because the Forfeiture Ordinance places the burden of proof on her to prove her innocence. Under Nelson v. Colorado, such a burden violates due process. See 137 S.Ct. 1249, 1256 (2017). To the extent that A. Harjo alleges, however, that there is an independent procedural due process violation because of the Forfeiture Ordinance's fees, the Court concludes that the risk of erroneous deprivation is not significant enough to raise constitutional concerns. Finally, the Court dismisses without prejudice the remaining state law claim, because it raises a novel issue not yet considered by New Mexico appellate courts.

         FACTUAL BACKGROUND

         The Court takes the facts from the First Amended Complaint, filed February 1, 2017 (Doc. 32)(“Amended Complaint”). The same standards for evaluating a 12(b)(6) motion apply to a motion for a judgment on the pleadings. See Atlantic Richfield Co. v. Farm Credit Bank of Wichita, 226 F.3d 1138, 1160 (10th Cir. 2000)(“A motion for judgment on the pleadings under Rule 12(c) is treated as a motion to dismiss under rule 12(b)(6).”). Thus, the Court accepts “all facts pleaded by the non-moving party as true and grants all reasonable inferences from the pleadings in that party's favor.” Sanders v. Mountain America Federal Credit Union, 689 F.3d 1138, 1141 (10th Cir. 2012).

         1. The City of Albuquerque's Forfeiture Ordinance.

         Under the City of Albuquerque's Forfeiture Ordinance, the City of Albuquerque may temporarily seize and subject cars to permanent forfeiture proceedings if, among other things: (i) the person operating the car is committing a DWI offense and that person has either “been arrested, summonsed or convicted” for a prior DWI offense, has committed a homicide, or has inflicted great bodily harm by vehicle while under the influence; or (ii) the person operating the car has a suspended or a revoked license as a result of a DWI arrest or conviction. 6 ROA §§ 7-6-2; 7-6-4.[2] Every year, the vehicle forfeiture program “seizes over 1, 000 cars, ” and generates “over $1 million in revenue” through forfeited vehicle auctions and settlement agreements with owners. Amended Complaint ¶ 11, at 3. See id. ¶ 14, at 4. The auction and settlement agreements fund almost all of the vehicle forfeiture program. See Amended Complaint ¶ 16, at 4. For example, funds generated “pay the salaries of the very city attorneys who seek the forfeitures” and also bankroll “expenses associated with program personnel, ” such as “equipment, vehicles, travel, training, facilities, and other purchases.” Amended Complaint ¶¶ 15, 19, at 4-5. Revenues from the vehicle forfeiture program fund other government programs and salaries only if there is a surplus after paying for the forfeiture program's expenses. See Amended Complaint ¶ 15, at 4.

         Indeed, the City of Albuquerque plans for the vehicle forfeiture program to fund itself. See Amended Complaint ¶¶ 17-18, at 4-5. See also Amended Complaint ¶ 31, at 7 (“[T]he City's Chief Hearing Officer stated that Albuquerque's ordinance was written specifically to provide that money raised through the forfeiture program must be used to fund the program.”). Accordingly, the vehicle forfeiture program is “financially dependent” on seizing a lot of cars. Amended Complaint ¶ 16, at 4. In 2016, for example, the budget “included as a performance measure . . . a target to conduct 1, 200 vehicle seizure hearings, to release 350 vehicles under agreements with the property owners, to immobilize 600 vehicles, and to sell 625 vehicles at auction.” Amended Complaint ¶ 17, at 4. From those targeted seizures, it “anticipated that $512, 000” of the revenues generated would be used to pay “the salaries of two paralegals, two attorneys, two DWI seizure assistants and one DWI seizure coordinator.” Amended Complaint ¶ 18, at 5. In addition to drawing their salaries from the vehicle forfeiture program, forfeiture program officials take advantage of the seized cars for personal use. See Amended Complaint ¶ 20, at 5. “Officials drive cars around town during the day and even take them home at night.” Amended Complaint ¶ 20, at 5. For example, in 2014, at least one city official was seen driving a seized Cadillac Escalade. See Amended Complaint ¶ 20, at 5. Almost all vehicle forfeiture program employees benefit personally from the vehicle forfeiture program, because “increased forfeiture revenues” leads to an increase in the amount of money available to spend on equipment, facilities, and training. Amended Complaint ¶¶ 19, 21 at 5.

         Once the City of Albuquerque has seized a car, it sends a seizure notice informing the owner that he or she can contest the seizure at an administrative hearing. See Amended Complaint ¶ 22, at 5-6. See also 6 ROA § 7-6-5(D). The owner has only a few days to request a hearing once he or she receives the notice; in DWI cases, for example, the time period is ten days. See Amended Complaint ¶ 23, at 6. Before the hearing, city attorneys typically contact the owner to try to settle the case and offer immediate return of the owner's property, “but only if they sign an agreement to have their car immobilized for a period of weeks or months and to pay hundreds or even thousands of dollars to the city.” Amended Complaint ¶ 24, at 6. See 6 ROA § 7-6-6.

         The City of Albuquerque need only show “probable cause that a crime has occurred” to prevail at the administrative hearing. Amended Complaint ¶ 12, at 3. Moreover, the owner of the car need not have committed a crime to lose the car; “Albuquerque can take property based on a crime allegedly committed by another person entirely, so long as the vehicle was somehow involved in the offense.” Amended Complaint ¶ 12, at 3-4. While the administrative hearing process progresses, the City of Albuquerque assesses fees for towing and storing the vehicle. See Amended Complaint ¶¶ 38-39, at 8-9. Storage fees “accumulate at a rate of $10 per day, ” and city attorneys inform property owners of the fees “in an effort to encourage property owners to settle” rather than challenging the forfeiture. Amended Complaint ¶ 39, at 9. See Amended Complaint ¶ 40, at 9 (“[T]he City's Chief Hearing Officer stated that he uses storage fees to pressure property owners not to seek a continuance of the hearing until after their underlying trial.”). These fees can accumulate into thousands of dollars. See Amended Complaint ¶¶ 38, at 9. Under the Albuquerque Municipal Code, the City of Albuquerque may still collect fees from the seized car's owners, even if the hearing officer finds in the owner's favor -- such as on an “innocent owner” defense.[3] Amended Complaint ¶¶ 38-39, at 9. See also 6 ROA § 7-6-5 (D)(8).

         After a hearing officer makes a determination, the City of Albuquerque initiates civil forfeiture proceedings in the Second Judicial District Court, County of Bernalillo, State of New Mexico. See Amended Complaint ¶ 41, at 10. An owner may affirmatively intervene in the proceeding to protect his or her property at the district court level, but, even if the owner prevails there, he or she may still owe fees if the City of Albuquerque demonstrates that it had probable cause to seize the vehicle. See Amended Complaint ¶ 43, at 10 (citing 6 ROA § 7-6-7(E)). “In other words, a claimant who fights the City all the way to the end of the process and prevails in a court of law still may be forced to pay significant fees.” Amended Complaint ¶ 43, at 10 (emphasis in original).

         2. Plaintiff Arlene Harjo's Vehicle Seizure.

         In April, 2016, A. Harjo -- an Albuquerque resident -- lent her silver Nissan Versa to her thirty-eight year-old son, Tino Harjo. See Amended Complaint ¶¶ 2, 53, at 1, 13. A. Harjo frequently allowed her son to borrow her car and had done so many times over the years without incident. See Amended Complaint ¶ 54, at 13. A. Harjo was aware that her son had been arrested in 2009 for drunk driving, and that he had DWI convictions from 2001 and 1998, yet she had secured assurances from him that he would not drink and drive anymore. See Amended Complaint ¶ 56, at 14. On the day T. Harjo borrowed the Nissan Versa in April, 2016, T. Harjo told his mother that he needed the car for a midday gym workout, but, instead, he drove to see his girlfriend in Clovis, New Mexico. See Amended Complaint ¶¶ 2, 59-60 at 1, 14-15. As he was returning home, Albuquerque police officers stopped T. Harjo for allegedly drinking and driving and seized A. Harjo's car. See Complaint ¶ 2, at 1.

         The City of Albuquerque retained A. Harjo's vehicle and sent A. Harjo a notice of forfeiture. See Amended Complaint ¶¶ 3, 62 at 1, 15. A. Harjo requested an administrative hearing to recover her car -- at a $50.00 cost. See Amended Complaint ¶¶ 3, 62 at 2, 15. See also 6 ROA § 7-6-5(F). A City of Albuquerque lawyer contacted A. Harjo and offered to return her car if A. Harjo paid $4, 000.00 “and agreed to boot the car for 18 months.” Amended Complaint ¶ 63, at 15. She refused, because she could not afford $4, 000.00 nor could she last a year-and-a-half without a vehicle. See Amended Complaint ¶ 63, at 15.

         The City of Albuquerque subsequently held a hearing. See Amended Complaint ¶ 65, at 15. Harjo proceeded pro se, because she could not afford a lawyer. See Amended Complaint ¶ 62, at 15. At the administrative hearing, “the City presented no evidence that Arlene was in any way at fault”; instead, it offered only evidence that T. Harjo had been driving while drunk. Amended Complaint ¶ 9, at 3. See id. ¶ 66, at 16. A. Harjo responded in her defense that it was her car, and “that she had no reason to think that Tino would drink and drive.” Amended Complaint ¶ 71, at 16. The City of Albuquerque's attorney asked whether she knew about T. Harjo's DWI arrests and convictions, to which she explained that she was aware, but that it had been years since those incidents, and she had secured assurances from him that it would not happen again. See Amended Complaint ¶ 72, at 16. The hearing officer found for the City of Albuquerque and concluded that A. Harjo should not have trusted her son. See Amended Complaint ¶¶ 73-75, at 17. In so concluding, the hearing officer relied on evidence not in the record; for example, he told A. Harjo that she did not have good reason to trust her son, as she trusted him in 2009, when he had been arrested for another DWI, and he had betrayed her trust then too. See Amended Complaint ¶¶ 9, 73, at 3, 17. A. Harjo had not, however, been involved in the 2009 incident; it had happened in Durango, Colorado, and she had no control over T. Harjo's use of a car then. See Amended Complaint ¶ 73, at 17.

         The City of Albuquerque then filed an action in state court seeking a final order of forfeiture. See Amended Complaint ¶ 77, at 18. The City of Albuquerque subsequently discovered, however, that the seizure had occurred outside of the city limits, so it lacked jurisdiction to seize the car. See Amended Complaint ¶¶ 4, 82, at 2, 19. Accordingly, it returned to A. Harjo her car, but, during its near eight-month retention of the vehicle, the car had suffered damage resulting from disuse. See Amended Complaint ¶¶ 85-88, at 19-20. For example, the car battery had died, and A. Harjo had to purchase a replacement. See Amended Complaint ¶ 86, at 19. Moreover, because of the car's impoundment, A. Harjo suffered damages from the car's depreciation, and from legal fees that her car loan lender incurred and transferred to her loan principal balance for defending its interest in the vehicle in the forfeiture action. See Amended Complaint ¶¶ 87-88, at 19-20.

         PROCEDURAL BACKGROUND

         A. Harjo filed suit in the Second Judicial District Court, County of Bernalillo, State of New Mexico, alleging that (i) the City of Albuquerque's Forfeiture Ordinance and vehicle forfeiture program violates the Fourteenth Amendment, because it creates an unlawful profit incentive for the City of Albuquerque and its employees; (ii) the City of Albuquerque's Forfeiture Ordinance also violates the Fourteenth Amendment by withholding from car owners a meaningful opportunity to be heard; and (iii) that the NMFA preempts the City of Albuquerque's Forfeiture Ordinance. See Harjo v. City of Albuquerque, D-202-CV-2016-05395 (Second Judicial Court, County of Bernalillo, State of New Mexico), filed in federal court on October 6, 2016 (Doc. 1-1)(“Complaint”). The City of Albuquerque removed the case to federal court on the basis of federal-question jurisdiction. See Notice of Removal ¶ 4, at 1, filed October 6, 2016 (Doc. 1)(“Notice of Removal”).[4] A. Harjo subsequently amended her Complaint, but alleges the same claims as she did in her original Complaint. See Amended Complaint ¶¶ 89-110, at 20-24. In short, she alleges that: (i) the vehicle forfeiture program's self-funding violates due process, because it generates an incentive for vehicle forfeiture program officials to “vigorously pursue forfeitures” even where leniency might be appropriate, Amended Complaint ¶ 99, at 22; (ii) the City of Albuquerque's pre-hearing fees, its pre-hearing negotiation tactics, and that the vehicle forfeiture program pays the hearing officers who hear the forfeiture cases deprives owners of their due process right to be meaningfully heard, see Amended Complaint ¶¶ 105-08, at 23-24; and (iii) the NMFA preempts the Forfeiture Ordinance, because the NMFA “places the burden on the government to prove that the property owner is guilty of an offense, ” Amended Complaint ¶ 91, at 20. See generally Amended Complaint ¶¶ 89-110, at 20-24.

         1. The Motion.

         The City of Albuquerque argues that the NMFA does not preempt the Forfeiture Ordinance, because the NMFA “only applies if the seizure or forfeiture was undertaken pursuant to laws that specifically apply the Forfeiture Act, ” and the Forfeiture Ordinance does “not specifically apply the Forfeiture Act.” Motion at 3 (citing N.M. Stat. Ann. § 31-27-2(B)(1); 6 ROA §§ 7-6-1 to 7). It follows, according to the City of Albuquerque, that, “on its face, the Forfeiture Act does not preempt the Nuisance Vehicle Ordinance.” Motion at 4. It also argues that finding preemption would be inconsistent with the state constitutional command that “home rule municipalit[ies]” shall “exercise all legislative powers and perform all functions not expressly denied by general law or charter.” Motion at 4 (citing N.M. Const., Art X § 6(D)). The City of Albuquerque adds that “the Legislature has vested municipalities with broad powers to regulate nuisances, ” so the NMFA does not preempt the Forfeiture Ordinance, which is premised on nuisance regulation. Motion at 4.

         The City of Albuquerque also argues that, if the Court is not inclined to dismiss A. Harjo's preemption argument, the Court should decline supplemental jurisdiction, because this issue raises “a novel or complex issue of State law.” Motion at 5 (citing 28 U.S.C. § 1367(C)(1)). The preemption issue is novel, according to the City of Albuquerque, because no New Mexico appellate court has decided it, and the issue is currently on appeal. See Motion at 6 (citing Espinoza v. City of Albuquerque, No. D-202-CV-2015-04156 (Second Judicial Court, County of Bernalillo, State of New Mexico)). It adds that, “in the interest of avoiding duplicate rulings on an evolving issue of state law, the Court may decline to exercise supplemental jurisdiction over Count I.” Motion at 6.

         The City of Albuquerque argues that the Fourteenth Amendment unlawful profit incentive claim fails, because self-funding forfeiture programs are common in the United States and, “by their very nature, provide a means of revenue to municipalities . . . to finance their costs of operation.” Motion at 7. Thus, according to the City of Albuquerque, A. Harjo's allegations that the vehicle forfeiture program generates a million dollars in revenue and funds the program's costs, such as salaries, do not “sustain a due process challenge.” Motion at 7. It argues that a successful due process challenge needs allegations that “city officials . . . directly benefited financially from vehicle forfeitures, ” but the Amended Complaint lacks those key allegations, such as an allegation that salaries are dependent on “the number of vehicles seized or successful prosecutions.” Motion at 8. The City of Albuquerque also contends that A. Harjo's arguments fails, because there are no allegations that city officials “gain use of forfeited vehicles as a result of the outcome of forfeiture proceedings, ” nor assertions that “individual[s] participating in the forfeiture program decide[] how to allocate the revenues collected.” Motion at 9. The City of Albuquerque concludes that it prevails on this claim, because A. Harjo's allegations are nothing more than a contention that a self-funding forfeiture program is unconstitutional, and self-funding, alone, cannot amount to a constitutional violation. See Motion at 10.

         The City of Albuquerque also avers that the vehicle forfeiture program, the Forfeiture Ordinance, and the associated administrative hearing do not deprive A. Harjo of a meaningful opportunity to be heard. It contends that the post-deprivation hearing is sufficiently prompt, as it occurs within twenty days of the seizure. See Motion at 15. The City of Albuquerque adds that pre-hearing fee assessments do not violate due process. See Motion at 15-16 (citing Goichman v. City of Aspen, 859 F.2d 1466, 1468 (10th Cir. 1988); Ross v. Duggan, 402 F.3d 575, 586-87 (6th Cir. 2004)). Finally, the City of Albuquerque argues that an innocent owner defense goes further than the Constitution requires. See Motion at 16 (citing Bennis v. Michigan, 516 U.S. 442, 446 (1996)(“[A]n owner's interest in property may be forfeited by reason of the use to which the property is put, even if the owner was unaware it would be put to such use.”)).

         2. The Response.

         A. Harjo responds that the City of Albuquerque's arguments fail on both procedural and substantive grounds. See Plaintiff's Response to Defendant's Motion For Judgment on the Pleadings at 2, filed June 26, 2017 (Doc. 48)(“Response”). She argues that the City of Albuquerque's arguments fail on procedural grounds, because discovery has already been conducted, so a more “demanding standard applies” to a judgment on the pleadings. Response at 7 (citing Grajales v. Puerto Rico Ports Auth., 682 F.3d 40, 46 (1st Cir. 2012)(“[O]nce the parties have invested substantial resources in discovery, a district court should hesitate to entertain a Rule 12(c) motion that asserts a complaint's failure to satisfy the plausibility requirement.”). A. Harjo contends that the parties have “engaged in extensive discovery” including “disclosure of an expert witness report, ” “multiple rounds of written discovery, ” and “four depositions.” Response at 2, 6. Thus, according to A. Harjo, “the Court should enter judgment on the pleadings only if the City can meet its high burden to show no plausible claim to relief on the merits and can separately demonstrate unusual circumstances that would justify disregarding the factual record developed by the party.” Response at 8.

         A. Harjo also argues that the case is best decided on the facts, rather than the pleadings, because the Court will then be able to consider “details of the [forfeiture] program's finances” such as “how much money is retained by the program, how that compares to the program's entire budget, and what proportion of program employees' salaries are paid using forfeiture proceeds.” Response at 8 (citing Marshall v. Jerrico, Inc., 446 U.S. at 250-52). She contends that these cases are better decided on the facts, because civil forfeiture programs are grounded in fact issues that typically “turn on the details of the particular statutory and financial schemes at issue.” Response at 9 (citing Sourovelis v. City of Philadelphia, 103 F.Supp.3d 694, 709 n.10 (E.D. Pa. 2015)(Robreno, J.)). She adds that a judgment on the pleadings is also inappropriate, because “only a relatively small amount of discovery remains outstanding.” Response at 10. She contends, however, that if the Court is inclined to dismiss on the pleadings, it should dismiss without prejudice so that she can “file an amended complaint incorporating new facts uncovered during discovery.” Response at 10.

         A. Harjo argues that the vehicle forfeiture program's “policy and practice of retaining money generated by seizing and forfeiting vehicles” unconstitutionally “injects a personal and institutional interest, financial and otherwise, into enforcing civil forfeiture.” Response at 11. She contends that her allegations that the vehicle forfeiture program “is financially dependent” on forfeiture revenues and that key program personnel salaries come from the forfeiture revenues create an unconstitutional profit incentive for the program. Response at 11-12. She adds that, contrary to the City of Albuquerque's contention that she must allege a “direct, pecuniary benefit” to prevail, “financial pressure to fund the government can also violate due process.” Response at 12. She also argues that the proportion of the program's budget that the forfeitures fund is relevant to the due process inquiry and that a due process violation exists where enforcement revenues make up half of the budget. See Response at 13-14 (citing Ward v. Village of Monroeville, 409 U.S. 57, 58 (1972)). It follows, according to A. Harjo, that, because the City of Albuquerque's forfeiture program funds almost “100% of the forfeiture program's budget, ” the City of Albuquerque's vehicle forfeiture program violates due process. Response at 14. She also contends that the vehicle forfeiture program violates due process, because the City of Albuquerque “plans for vehicle forfeitures in its annual budget, sets annual targets . . . for revenues from auctioning forfeited vehicles, and specifically plans for salaries [of program personnel] to be paid out of the proceeds of vehicle forfeitures.” Response at 14.

         A. Harjo also argues that she has alleged a direct benefit to officials as the City of Albuquerque contends is necessary for a due process claim. See Response at 15. According to A. Harjo, her allegation that “forfeiture revenues go to pay the salaries of the attorneys who file forfeiture cases” satisfies the direct benefit requirement. Response at 15. She concedes that she “has not alleged that the salaries of these officials vary up or down depending on the exact amount of revenue generated, ” but she argues that she has established that “the City's ability to pay those salaries at all depends on the maintenance of the revenue stream.” Response at 15 (emphasis in original). She concludes accordingly that the Court should deny the City of Albuquerque's Motion as to the unlawful profit incentive claim. See Response at 16.

         A. Harjo argues that the Forfeiture Ordinance violates due process, “because the City places the burden on property owners to prove their own innocence.” Response at 16. She also contends that the Forfeiture Ordinance is unconstitutional, because the “City uses mounting storage fees to pressure property owners into settlements, ” and, because the hearing officers “face[] institutional pressure to generate forfeiture revenues, ” as those revenues generate their salary. Response at 16. In so arguing, A. Harjo rejects the City of Albuquerque's reliance on Bennis v. Michigan, because, according to A. Harjo, even Bennis v. Michigan respects “the principle of innocent until proving guilty, ” which is missing from this case. Response at 17. She adds that Nelson v. Colorado, 137 S.Ct. 1249 (2017) demonstrates that the City of Albuquerque's Forfeiture Ordinance violates her due process rights. See Response at 17. According to A. Harjo, Nelson v. Colorado stands for the principle that “forcing people to prove their innocence g[i]ve[s] rise to an unacceptable risk of erroneous deprivation, ” and, thus, A. Harjo “surely has stated a claim that people who have never been convicted of anything cannot be put to such a burden.” Response at 17 (alterations added). She also argues that the due process violation's egregiousness is magnified here, because the storage fees and the cost of retaining a lawyer were prohibitive to A. Harjo. See Response at 19 (citing Nelson v. Colorado, 137 S.Ct. at 1257).

         A. Harjo contends that the City of Albuquerque's Forfeiture Ordinance violates the NMFA. See Response at 21. A. Harjo agrees with the City of Albuquerque, however, that, “[t]here is no reason” for the Court “to weigh in on Plaintiff's state-law claim, as it involves an unsettled issue of state law that is currently the subject of ongoing litigation in the state courts.” Response at 21. Nevertheless, she argues that, if the Court is inclined to weigh in on the state law claims, the City of Albuquerque's Forfeiture Ordinance violates the NMFA, because the NMFA's stated purpose is to “ensure that only criminal forfeiture is allowed in this state, ” and it amends state law so that “forfeiture shall occur only following a criminal conviction.” Response at 22 n.11 (citing N.M. Stat. Ann. §§ 37-27-2(A)(6); 31-27-4(A))(emphasis in Response). It follows, according to A. Harjo, that allowing the City of Albuquerque to conduct civil forfeiture contradicts the New Mexico Legislature's intent. See Response at 22 n.11. She concludes that there is no reason for the Court to delay consideration of her federal claims, because, even if the state court finds in her favor, it will not resolve A. Harjo's federal claims “for retrospective relief based on the past violation of her constitutional rights” nor for the nominal damages she alleges. Response at 22-23 n.12. She concludes that the Court should decide the federal issues and then partially remand the state law issues if they remain unresolved. See Response at 23.

         3. The Reply.

         The City of Albuquerque replies that its Motion is not subject to a higher pleading standard. See Defendant's Reply Supporting Motion for Judgment on the Pleadings at 1, filed July 7, 2017 (Doc. 51)(“Reply”). According to the City of Albuquerque, the case on which A. Harjo relies to argue that a higher standard is applicable in fact sets forth nothing more than the usual 12(b)(6) standard. See Reply at 1 (citing Grajales v. Puerto Rico Ports Authority, 682 F.3d at 44 (“When . . . a motion for judgment on the pleadings . . . is employed as a vehicle to test the plausibility of a complaint, it must be evaluated as if it were a motion to dismiss under Federal Rules of Civil Procedure 12(b)(6)”)). It adds that the factual record is, accordingly, irrelevant. See Reply at 2.

         The City of Albuquerque repeats its argument that, to state a due process claim, it is insufficient to allege “a municipality uses forfeiture proceeds as a means to finance the program's costs or even to obtain additional resources.” Reply at 2. It adds that “institutional pressure to generate revenue” alone is insufficient to state a constitutional violation without an allegation of “direct, pecuniary benefit.” Reply at 3. The City of Albuquerque argues that direct pecuniary interests exist when, for example, an official is compensated above his or her regular salary based on the conviction or forfeiture numbers, but here, according to the City of Albuquerque, officials' “salaries do not vary based on revenue generated.” Reply at 3. It also avers that, while a direct pecuniary benefit is not always necessary, there must be a possibility that officials will “be tempted to forego applying the rules of law in order to obtain a conviction.” Reply at 3-4. It follows, according to the City of Albuquerque, that there is no due process violation here, because A. Harjo does not allege that the hearing officers “have any responsibility for the City's budget, ” or control how much money is allocated to the vehicle forfeiture program or to their salaries. Reply at 4. The City of Albuquerque argues that A. Harjo's allegations “must present something other than institutional gain, ” and she does not make such an allegation, so her due process claim fails. Reply at 4. It also argues that “[t]here is nothing unconstitutional about budget forecasts that include revenue estimate[s] . . . from forfeitures.” Reply at 8. The City of Albuquerque avers that program expenses, which the forfeitures fund, are indirect benefits, and that there is no allegation that officials have an incentive to prosecute more to receive more indirect benefits. See Reply at 8-9. The City of Albuquerque also argues that the officials participating in the vehicle forfeiture program have little to no control over how many vehicles are seized and, thus, have almost no ability to “directly influence forfeiture revenue.” Reply at 9. According to the City of Albuquerque, even the hearing officer has little control over the forfeiture, because, ultimately, “it is a state court judge who determines whether a vehicle is forfeited.” Reply at 9.

         The City of Albuquerque also avers that A. Harjo's burden to prove her innocence does not violate due process. See Reply at 10. It contends that, because the City of Albuquerque has the initial burden of proof to show probable cause, there is no due process violation for requiring the owner to prove his or her innocence. See Reply at 10. It adds that the innocent owner is an affirmative defense, and “a defendant always has the burden to prove any affirmative defense.” Reply at 10. It adds that at least one analogous statute, the Civil Asset Forfeiture Reform Act, 18 U.S.C. §§ 983, 985; 28 U.S.C. §§ 2466-67 (“CAFRA”), which requires an owner to prove his or her innocence, is constitutional. See Reply at 10 (citing United States v. 2121 Celeste Road SW, 189 F.Supp.3d 1208, 1254-55 (D.N.M. 2016)(Browning, J.)).

         The City of Albuquerque argues that, because A. Harjo does not contest its argument on the state-law claim, dismissal of Count I is warranted. See Reply at 5-6. It also argues that A. Harjo does not dispute that the Court should dismiss the claim for lack of subject-matter jurisdiction, so Count I should also be dismissed on that ground. See Reply at 6.

         LAW REGARDING RULE 12(b)(6)

         Rule 12(b)(6) of the Federal Rules of Civil Procedure authorizes a court to dismiss a complaint for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). “The nature of a Rule 12(b)(6) motion tests the sufficiency of the allegations within the four corners of the complaint after taking those allegations as true.” Mobley v. McCormick, 40 F.3d 337, 340 (10th Cir. 1994). The Complaint's sufficiency is a question of law, and, when considering a rule 12(b)(6) motion, a court must accept as true all well-pled factual allegations in the complaint, view those allegations in the light most favorable to the nonmoving party, and draw all reasonable inferences in the plaintiff's favor. See Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007)(“[O]nly if a reasonable person could not draw . . . an inference [of plausibility] from the alleged facts would the defendant prevail on a motion to dismiss.”); Smith v. United States, 561 F.3d 1090, 1098 (10th Cir. 2009)(“[F]or purposes of resolving a Rule 12(b)(6) motion, we accept as true all well-pled factual allegations in a complaint and view these allegations in the light most favorable to the plaintiff.”)(citing Moore v. Guthrie, 438 F.3d 1036, 1039 (10th Cir. 2006)).

         A complaint need not set forth detailed factual allegations, yet a “pleading that offers labels and conclusions or a formulaic recitation of the elements of a cause of action” is insufficient. Ashcroft v. Iqbal, 556 U.S. at 678 (2009)(citing Bell Atl. Corp. v. Twombly, 550 U.S. at 555). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Ashcroft v. Iqbal, 556 U.S. at 678. “Factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Bell Atl. Corp. v. Twombly, 550 U.S. at 555.

         To survive a motion to dismiss, a plaintiff's complaint must contain sufficient facts that, if assumed to be true, state a claim to relief that is plausible on its face. See Bell Atl. Corp. v. Twombly, 550 U.S. at 570; Mink v. Knox, 613 F.3d 995, 1000 (10th Cir. 2010). “A claim has facial plausibility when the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. at 678 (citing Bell Atl. Corp. v. Twombly, 550 U.S. at 556). “Thus, the mere metaphysical possibility that some plaintiff could prove some set of facts in support of the pleaded claims is insufficient; the complainant must give the court reason to believe that this plaintiff has a reasonable likelihood of mustering factual support for these claims.” Ridge at Red Hawk, LLC v. Schneider, 493 F.3d 1174, 1177 (10th Cir. 2007)(emphasis omitted). The United States Court of Appeals for the Tenth Circuit has stated:

“[P]lausibility” in this context must refer to the scope of the allegations in a complaint: if they are so general that they encompass a wide swath of conduct, much of it innocent, then the plaintiffs “have not nudged their claims across the line from conceivable to plausible.” The allegations must be enough that, if assumed to be true, the plaintiff plausibly (not just speculatively) has a claim for relief.

Robbins v. Oklahoma, 519 F.3d 1242, 1247 (10th Cir. 2008)(citations omitted)(quoting Bell Atl. Corp. v. Twombly, 550 U.S. at 570). See Gallegos v. Bernalillo Cty. Board of Cty. Comm'rs, ___ F.Supp.3d ___, 2017 WL 4402422, at *9 (D.N.M. 2017)(Browning, J.).

         “When a party presents matters outside of the pleadings for consideration, as a general rule ‘the court must either exclude the material or treat the motion as one for summary judgment.'” Brokers' Choice of America, Inc. v. NBC Universal, Inc., 861 F.3d 1081, 1103 (10th Cir. 2017)(quoting Alexander v. Oklahoma, 382 F.3d 1206, 1214 (10th Cir. 2004)). There are three limited exceptions to this general principle: (i) documents that the complaint incorporates by reference, see Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007); (ii) “documents referred to in the complaint if the documents are central to the plaintiff's claim and the parties do not dispute the documents' authenticity, ” Jacobsen v. Deseret Book Co., 287 F.3d at 941; and (iii) “matters of which a court may take judicial notice, ” Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. at 322. See also Brokers' Choice of America, Inc. v. NBC Universal, Inc., 861 F.3d 1081, 1103 (10th Cir. 2017)(holding that the district court did not err by reviewing a seminar recording and a TV episode on a rule 12(b)(6) motion, which were “attached to or referenced in the amended complaint, ” central to the plaintiff's claim, and “undisputed as to their accuracy and authenticity”). “[T]he court is permitted to take judicial notice of its own files and records, as well as facts which are a matter of public record.” Van Woudenberg v. Gibson, 211 F.3d 560, 568 (10th Cir. 2000), abrogated on other grounds by McGregor v. Gibson, 248 F.3d 946, 955 (10th Cir. 2001).

         In Gee v. Pacheco, 627 F.3d 1178 (10th Cir. 2010), the defendants “supported their motion with numerous documents, and the district court cited portions of those motions in granting the [motion to dismiss].” 627 F.3d at 1186. The Tenth Circuit held that “[s]uch reliance was improper” and that, even if “the district court did not err initially in reviewing the materials, the court improperly relied on them to refute Mr. Gee's factual assertions and effectively convert the motion to one for summary judgment.” 627 F.3d at 1186-87. In other cases, the Tenth Circuit has emphasized that, “[b]ecause the district court considered facts outside of the complaint, however, it is clear that the district court dismissed the claim under Rule 56(c) and not Rule 12(b)(6).” Nard v. City of Okla. City, 153 F. App'x 529, 534 n.4 (10th Cir. 2005)(unpublished). In Douglas v. Norton, 167 F. App'x 698 (10th Cir. 2006)(unpublished), the Tenth Circuit addressed an untimely filed charge with the Equal Employment Opportunity Commission -- which the Tenth Circuit analogized to a statute of limitations -- and concluded that, because the requirement was not jurisdictional, the district court should have analyzed the question under rule 12(b)(6), and “because the district court considered evidentiary materials outside of Douglas' complaint, it should have treated Norton's motion as a motion for summary judgment.” 167 F. App'x at 704-05.

         The Court has previously ruled that, when a plaintiff references and summarizes defendants' statements in a complaint, the Court cannot rely on documents containing those statements that the Defendant's attach in their briefing. See Mocek v. City of Albuquerque, 2013 WL 312881, at *50-51 (D.N.M. Jan. 14, 2013)(Browning, J.). The Court reasoned that the statements were neither incorporated by reference nor central to the plaintiff's allegations in the complaint, because the plaintiff cited the statements only to attack the Defendant's reliability and truthfulness. See 2013 WL 312881, at *50-51. The Court has also previously ruled that, when determining whether to toll a statute of limitations in an action alleging fraud and seeking subrogation from a defendant, the Court may not use interviews and letters attached to a motion to dismiss, which show that a plaintiff was aware of the defendant's alleged fraud before the statutory period expired. See Great Am. Co. v. Crabtree, 2012 WL 3656500, at *3, *22-23 (D.N.M. Aug. 23, 2012)(Browning, J.)(“Crabtree”). The Court, in Crabtree, determined that the documents did not fall within any of the Tenth Circuit's exceptions to the general rule that a complaint must rest on the sufficiency of its contents alone, as the complaint did not incorporate the documents by reference or refer to the documents. See 2012 WL 3656500, at *22-23; Mocek v. City of Albuquerque, 2013 WL 312881, at *50 (refusing to consider statements that were not “central to [the plaintiff's] claims”).

         On the other hand, in a securities class action, the Court has ruled that a defendant's operating certification, to which plaintiffs refer to in their complaint, and which was central to whether the plaintiffs adequately alleged a loss, falls within an exception to the general rule, so the Court may consider the operating certification when ruling on the defendant's motion to dismiss without converting the motion into one for summary judgment. See Genesee Cty. Emps.' Retirement Sys. v. Thornburg Mortg. Secs. Trust 2006-3, 825 F.Supp.2d 1082, 1150-51 (D.N.M. 2011)(Browning, J.); Mata v. Anderson, 760 F.Supp.2d 1068, 1101 (D.N.M. 2009)(Browning, J.)(relying on documents outside of the complaint because they were “documents that a court can appropriately view as either part of the public record, or as documents upon which the Complaint relies, and the authenticity of which is not in dispute”); S.E.C. v. Goldstone, 952 F.Supp.2d 1060, 1217-18 (D.N.M. 2013)(Browning, J.)(considering, on a motion to dismiss, electronic mail transmissions referenced in the complaint as “documents referred to in the complaint, ” which are “central to the plaintiff's claim” and whose authenticity the plaintiff did not challenge).

         LAW REGARDING JUDGMENT ON THE PLEADINGS

         “After the pleadings are closed -- but early enough not to delay trial -- a party may move for judgment on the pleadings.” Fed.R.Civ.P. 12(c). A “[j]udgment on the pleadings should not be granted ‘unless the moving party has clearly established that no material issue of fact remains to be resolved and the party is entitled to judgment as a matter of law.'” Park Univ. Enters., Inc. v. Am. Cas. Co. of Reading, Pa., 442 F.3d 1239, 1244 (10th Cir. 2006)(quoting United States v. Any & All Radio Station Transmission Equip., 207 F.3d 458, 462 (8th Cir. 2000)). The same standards for evaluating a 12(b)(6) motion apply to a motion for a judgment on the pleadings. See Atlantic Richfield Co. v. Farm Credit Bank of Wichita, 226 F.3d at 1160 (“A motion for judgment on the pleadings under Rule 12(c) is treated as a motion to dismiss under rule 12(b)(6).”). Thus, a court accepts “all facts pleaded by the non-moving party as true and grants all reasonable inferences from the pleadings in that party's favor.” Sanders v. Mountain America Federal Credit Union, 689 F.3d at 1141. All of the nonmoving parties' allegations are deemed true, and all of the movants' contrary assertions are deemed false. See Nat'l Metro. Bank v. United States, 323 U.S. 454, 456-57 (1945); Ramirez v. Dep't of Corr., 222 F.3d 1238, 1240 (10th Cir. 2000); Freeman v. Dep't of Corr., 949 F.2d 360, 361 (10th Cir. 1991).

         Under rule 12(b)(6), a court may dismiss a complaint for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). “The nature of a Rule 12(b)(6) motion tests the sufficiency of the allegations within the four corners of the complaint after taking those allegations as true.” Mobley v. McCormick, 40 F.3d 337, 340 (10th Cir. 1994). A complaint challenged by a rule 12(b)(6) motion to dismiss does not require detailed factual allegations, but a plaintiff's obligation to set forth the grounds of his or her entitlement to relief “requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. at 555. “Factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Bell Atl. Corp. v. Twombly, 550 U.S. at 555. A plaintiff must “nudge his claims across the line from conceivable to plausible” to survive a motion to dismiss. Bell Atl. Corp. v. Twombly, 550 U.S. at 570. “Thus, the mere metaphysical possibility that some plaintiff could prove some set of facts in support of the pleaded claims is insufficient; the complaint must give the court reason to believe that this plaintiff has a reasonable likelihood of mustering factual support for these claims.” Ridge at Red Hawk, LLC v. Schneider, 493 F.3d 1174, 1177 (10th Cir. 2007). The Tenth Circuit has stated:

“[P]lausibility” in this context must refer to the scope of the allegations in a complaint: if they are so general that they encompass a wide swath of conduct, much of it innocent, then the plaintiffs “have not nudged their claims across the line from conceivable to plausible.” The allegations must be enough that, if assumed to be true, the plaintiff plausibly (not just speculatively) has a claim for relief.
This requirement of plausibility serves not only to weed out claims that do not (in the absence of additional allegations) have a reasonable prospect of success, but also to inform the defendants of the actual grounds of the claim against them. “Without some factual allegation in the complaint, it is hard to see how a claimant could satisfy the requirement of providing not only ‘fair notice' of the nature of the claim, but also ‘grounds' on which the claim rests.” [Bell Atl. Corp. v. Twombly, 550 U.S. at 555, 127 S.Ct.] at 1965 n.3. See Airborne Beepers & Video, Inc. v. AT & T Mobility LLC, 499 F.3d 663, 667 (7th Cir. 2007)(“[A]t some point the factual detail in a complaint may be so sketchy that the complaint does not provide the type of notice of the claim to which the defendant is entitled under Rule 8.”). The Twombly Court was particularly critical of complaints that “mentioned no specific time, place, or person involved in the alleged conspiracies.” 127 S.Ct. at 1971 n.10. Given such a complaint, “a defendant seeking to respond to plaintiffs' conclusory allegations . . . would have little idea where to begin.” Id.

Robbins v. Oklahoma, 519 F.3d 1242, 1247-48 (10th Cir. 2008).

         A court must convert a motion to dismiss into a motion for summary judgment if “matters outside the pleading are presented to and not excluded by the court, ” and “all parties . . . [are] given reasonable opportunity to present all material made pertinent to such a motion by Rule 56.” Fed.R.Civ.P. 12(d). Facts subject to judicial notice may be considered without converting a motion to dismiss into a motion for summary judgment. See Grynberg v. Koch Gateway Pipeline Co., 390 F.3d 1276, 1279 n.1 (10th Cir. 2004)(citing 27A Federal Procedure, Lawyers' Ed. § 62:520 (2003)). Furthermore, when considering a motion to dismiss, “the court is permitted to take judicial notice of its own files and records, as well as facts which are a matter of public record.” Van Woudenberg v. Gibson, 211 F.3d 560, 568 (10th Cir. 2000), abrogated on other grounds by McGregor v. Gibson, 248 F.3d 946, 955 (10th Cir. 2001). A court may consider documents to which the complaint refers if the documents are central to the plaintiff's claim and the parties do not dispute the documents' authenticity. See Jacobsen v. Deseret Book Co., 287 F.3d 936, 941-42 (10th Cir. 2002). If, however, a complaint does not reference or attach a document, but the complaint refers to the document, and the document is central to the plaintiff's claim, the defendant may submit an “indisputably authentic copy to the court to be considered on a motion to dismiss.” GFF Corp. v. Associated Wholesale Grocers, Inc., 130 F.3d 1381, 1384 (10th Cir. 1997). See 5A Charles Alan Wright & Arthur Miller, Federal Practice & Procedure § 1327, at 438-39 (3d ed. 2004)(“[W]hen the plaintiff fails to introduce a pertinent document as part of her pleading . . . the defendant may introduce the document as an exhibit to a motion attacking the sufficiency of the pleading.”).

         LAW REGARDING JUDICIAL NOTICE

         Rule 201 of the Federal Rules of Evidence allows a court to, at any stage of the proceeding, take notice of “adjudicative” facts that fall into one of two categories: (i) facts that are “generally known within the territorial jurisdiction of the trial court;” or (ii) facts that are “capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned.” Fed.R.Evid. 201(b), (f). “Adjudicative facts are simply the facts of the particular case.” United States v. Wolny, 133 F.3d 758, 764 (10th Cir. 1998)(quoting Advisory Committee Notes to rule 201). A court has discretion to take judicial notice of such facts, regardless whether requested. See Fed.R.Evid. 201(c). On the other hand, if a party requests that the court take judicial notice of certain facts, and supplies the necessary information to the court, judicial notice is mandatory. See Fed.R.Evid. 201(d). Also, if the parties timely request an opportunity to be heard, the Court must grant such an opportunity “as to the propriety of taking judicial notice and the tenor of the matter noticed.” Fed.R.Evid. 201(e). That judicial notice may be taken during any stage of the judicial proceeding includes the motion to dismiss stage. See 21 B C. Wright & K. Graham, Jr., Fed. Prac. & Proc. Evid. § 5110, at 294 & n.17 (2d ed. 2005). Moreover, while ordinarily, a motion to dismiss must be converted to a motion for summary judgment when the court considers matters outside the Complaint, see Fed. R. Civ. P. 12(d), matters that are judicially noticeable do not have that effect, see Duprey v. Twelfth Judicial Dist. Court, 760 F.Supp.2d 1180, 1193 (D.N.M. 2009)(Browning, J.)(citing Grynberg v. Koch Gateway Pipeline Co., 390 F.3d 1276, 1279 n.1 (10th Cir. 2004)). Also, when considering a motion to dismiss, “the court is permitted to take judicial notice of its own files and records, as well as facts which are a matter of public record.” Van Woudenberg v. Gibson, 211 F.3d 560, 568 (10th Cir. 2000) abrogated on other grounds by McGregor v. Gibson, 248 F.3d 946, 955 (10th Cir. 2001). The documents judicially noticed, however, should not be considered for the truth of the matters asserted therein. See Tal v. Hogan, 453 F.3d 1244, 1265 n.24 (10th Cir. 2006). The Court has previously judicially noticed news publications and public filings with the Securities and Exchange Commission. See S.E.C. v. Goldstone, 952 F.Supp.2d at 1219-20; In re Thornburg Mortg., Inc. Securities Litig., 2009 WL 5851089, at *3-4. See also Gallegos v. Bernalillo Cty. Bd. of Cty. Comm'rs, ___ F.Supp.3d ___, 2017 WL 4402422, at *18-19 (D.N.M. 2017)(Browning, J.)(ruling that the Court may take judicial notice of state court orders); A.M ex rel. Youngers v. New Mexico Dep't of Health, 117 F.Supp.3d 1220, 1232 n.6 (D.N.M. 2015)(Browning, J.).

         LAW REGARDING SUPPLEMENTAL JURISDICTION

         It is a fundamental precept of American law that the federal courts are “courts of limited jurisdiction.” Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 552 (2005). Federal courts “possess only that power authorized by Constitution and statute.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). Among the powers that Congress has bestowed upon the courts is the power to hear controversies arising under federal law -- federal-question jurisdiction -- and controversies arising between citizens of different states -- diversity jurisdiction. See 28 U.S.C. §§ 1331-32. Section 1367 additionally grants the federal courts power to hear claims over which the court lacks original jurisdiction, if those claims are part of the same constitutional case as claims over which the court has original jurisdiction. See 28 U.S.C. § 1367(a).

         1. Congressional Authority to Exercise Supplemental Jurisdiction.

         Although a statutory basis is necessary for federal courts to exercise jurisdiction over a controversy, “it is well established -- in certain classes of cases -- that, once a court has original jurisdiction over some claims in the action, it may exercise supplemental jurisdiction over additional claims that are part of the same case or controversy.” Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. at 552. The Supreme Court of the United States has long subscribed to the concept of supplemental jurisdiction recognized in two common-law doctrines, pendent jurisdiction and ancillary jurisdiction; section 1367's passage codified those jurisdictional forms, and also allowed courts to hear cases under pendent-party jurisdiction, which the Supreme Court had previously disallowed in Finley v. United States, 490 U.S. 545 (1989). Federal courts may exercise pendent jurisdiction over state law claims when “state and federal claims . . . derive from a common nucleus of operative fact.” United Mine Workers v. Gibbs, 383 U.S. 715, 725 (1966). Supplemental jurisdiction gives federal courts the flexibility to hear a cause of action after the introduction of third parties, whose insertion into the litigation does not have the support of any independent grounds for federal jurisdiction, when those parties share a common interest in the outcome of the litigation and are logical participants in it. See Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365, 375 n.18 (1978).

         In 1988, the Honorable William H. Rehnquist, then-Chief Justice of the Supreme Court, created the Federal Courts Study Committee to analyze the federal court system and to recommend reforms. See James v. Chavez, 2011 WL 6013547, at *5 (D.N.M. Nov. 21, 2011)(Browning, J.). In response to the Committee's findings regarding pendent, ancillary, and pendent-party jurisdiction, Congress codified the doctrines when it passed the Judicial Improvements Act of 1990:

[I]n any civil action of which the district courts have original jurisdiction, the district courts shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution. Such supplemental jurisdiction shall include claims that involve the joinder or intervention of additional parties.

28 U.S.C. § 1367(a). In enacting 28 U.S.C. § 1367, Congress conferred upon federal courts “supplemental forms of jurisdiction . . . [that] enable them to take full advantage of the rules on claim and party joinder to deal economically -- in single rather than multiple litigation -- with matters arising from the same transaction or occurrence.” Report of the Federal Courts Study Committee, Part II.2.B.2.b. (April 2, 1990), reprinted in 22 Conn. L. Rev. 733, 787 (1990).

         2. The District Courts' Discretion to Exercise Supplemental Jurisdiction.

         The Tenth Circuit has followed the Supreme Court's lead in classifying supplemental jurisdiction not as a litigant's right, but as a matter of judicial discretion. See Estate of Harshman v. Jackson Hole Mountain Resort Corp., 379 F.3d 1161, 1165 (10th Cir. 2004)(citing City of Chi. v. Int'l Coll. of Surgeons, 522 U.S. 156, 173 (1997)). In circumstances where the supplemental jurisdiction statute may support supplemental jurisdiction, the district court retains discretion to decline to exercise that jurisdiction. The traditional analysis, based on the Supreme Court's opinion in United Mine Workers v. Gibbs, compelled courts to consider “judicial economy, convenience and fairness to litigants” when deciding whether to exercise supplemental jurisdiction. 383 U.S. at 726.

         Similarly, Congress' supplemental jurisdiction statute enumerates four factors that the court should consider:

(1) the claim raises a novel or complex issue of State law,
(2) the claim substantially predominates over the claim or claims over which the district court has original jurisdiction,
(3) the district court has dismissed all claims over which it has original jurisdiction, or
(4) in exceptional circumstances, there are other compelling reasons for declining jurisdiction.

28 U.S.C. § 1367(c). In applying these factors, district courts should seek to exercise supplemental jurisdiction in an effort to “vindicate values of economy, convenience, fairness, and comity. . . .” Estate of Harshman v. Jackson Hole Mountain Resort Corp., 379 F.3d at 1164. Numerous courts have acknowledged that 28 U.S.C. § 1367(c) necessarily changes the district courts' supplemental jurisdiction discretion analysis and that, unless one of the conditions of 28 U.S.C. § 1367(c) exists, courts are not free to decline jurisdiction. See Itar-Tass Russian NewsAgency v. Russian Kurier, Inc., 140 F.3d 442, 447 (2d Cir. 1998)(“[S]ection 1367 has indeed altered Gibbs' discretionary analysis.”); McLaurin v. Prater, 30 F.3d 982, 985 (8th Cir. 1994)(“The statute plainly allows the district court to reject jurisdiction over supplemental claims only in the four instances described therein.”); Exec. Software N. Am. v. U.S. Dist. Ct., 24 F.3d 1545, 1557 (9th Cir. 1994)(“By codifying preexisting applications of Gibbs in subsections (c)(1)-(3), however, it is clear that Congress intended the exercise of discretion to be triggered by the court's identification of a factual predicate that corresponds to one of the section 1367(c) categories.”), overruled on other grounds by Cal. Dep't of Water Res. v. Powerex Corp., 533 F.3d 1087 (9th Cir. 2008); Palmer v. Hosp. Auth., 22 F.3d 1559, 1569 (11th Cir. 1994)(“[S]upplemental jurisdiction must be exercised in the absence of any of the four factors of section 1367(c). . . .”); Bonadeo v. Lujan, 2009 WL 1324119, at *9 (D.N.M. Apr. 30, 2009)(Browning, J.)(“28 U.S.C. § 1367(c) changed the district courts' supplemental jurisdiction discretion analysis to prohibit courts from declining jurisdiction unless ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.