Dela Cruz et al v. Yuan et al
Filing
34
ORDER signed by Judge Garland E. Burrell, Jr on 2/15/2012 GRANTING 9 Motion to Dismiss. This dismissal is without prejudice and plaintiffs are GRANTED 5 court days leave from the date on which this order is filed to file an amended complaint. (Donati, J)
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IN THE UNITED STATES DISTRICT COURT
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FOR THE EASTERN DISTRICT OF CALIFORNIA
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Victor A. Dela Cruz, Mary M.
Dela Cruz,
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Plaintiffs,
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v.
Washington Mutual Bank, Federal
Deposit Insurance Company, JP
Morgan Chase, N.A., Wells Fargo
Bank, N.A., California
Reconveyance Company,
Defendants.
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2:11-cv-1176-GEB-DED
ORDER GRANTING THE FEDERAL
DEPOSIT INSURANCE
CORPORATION’S MOTION TO
DISMISS FOR LACK OF
JURISDICTION*
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Defendant Federal Deposit Insurance Corporation (“FDIC”),
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erroneously sued as “Federal Deposit Insurance Company,” moves under
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Federal Rule of Civil Procedure (“Rule”) 12(b)(1) for dismissal of all
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Plaintiffs’ claims alleged against it. The basis of FDIC’s motion is
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that the Court is without subject matter jurisdiction since Plaintiffs
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“failed to exhaust the mandatory administrative claims process against
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[the] FDIC [as required by the Financial Institutions Reform, Recovery
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and
Enforcement
Act
of
1989
(“FIRREA”)]
prior
to
filing
suit.”1
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*
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This matter is deemed suitable for decision without oral
argument. E.D. Cal. R. 230(g).
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The FDIC argues in the alternative, that Plaintiffs’ complaint
should be dismissed under Rule 12(b)(6). Defendants JP Morgan Bank,
N.A., Wells Fargo Bank, N.A., and California Reconveyance Company also
move under Rule 12(b)(6) for dismissal of Plaintiffs’ complaint. (ECF
No. 12.) In addition, the FDIC moves under Rule 12(f) for an order
striking portions of Plaintiffs’ complaint. (ECF No. 10.) Since the
FDIC’s Rule 12(b)(1) motion will be granted and this case will be
remanded to the state court from which it was removed if Plaintiffs have
(continued...)
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(Defendant the Federal Deposit Insurance Corporation’s Motion to Dismiss
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(“Mot.”) 2:19-21, ECF No. 9-1.)
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“A Rule 12(b)(1) jurisdictional attack may be facial or
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factual.” Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir.
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2004). Here, the FDIC’s Rule 12(b)(1) motion is a facial attack because
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it
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insufficient on their face to invoke federal jurisdiction.” Id. Because
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a facial attack challenges jurisdiction based on what is alleged in the
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complaint, the factual allegations are assumed to be true, and all
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reasonable inferences capable of being drawn therefrom are drawn in
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favor of the non-movant. Wolfe v. Strankman, 392 F.3d 358, 362 (9th Cir.
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2004). However, “the tenet that a court must accept as true all of the
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allegations
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conclusions.” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009).
“asserts
that
the
contained
allegations
in
a
contained
complaint
is
in
a
complaint
inapplicable
to
are
legal
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The FDIC argues because “Plaintiffs have not even alleged that
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they have complied with FIRREA by filing an administrative claim with
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[the] FDIC . . . Plaintiffs have not exhausted their administrative
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remedies,” and Plaintiffs’ claims against the FDIC must be dismissed
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“for lack of subject matter jurisdiction under Rule 12(b)(1).” (Mot.
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8:28, 9:1-5.)
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Under FIRREA, judicial review is constrained as follows:
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Except as otherwise provided in this subsection, no
court shall have jurisdiction over--
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(i) any claim or action for payment from, or any
action seeking a determination of rights with
respect
to,
the
assets
of
any
depository
institution for which the Corporation has been
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(...continued)
not exhausted FIRREA’s mandatory administrative claims process for the
claims against the FDIC, the Rule 12(b)(6) and Rule 12(f) motions will
not be addressed in this order.
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appointed receiver, including assets which the
Corporation may acquire from itself as such
receiver; or
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(ii) any claim relating to any act or omission of
such institution or the Corporation as receiver.
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12 U.S.C. § 1821(d)(13)(D). FIRREA is “a comprehensive statutory scheme
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granting [the] FDIC authority to act as Receiver for failed financial
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institutions [and] creat[ing] a statutory procedure for the processing
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of claims against the FDIC.” Ramos v. NDEX West, LLC, No. 09-0190, 2010
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WL 1675911, at *2 (E.D. Cal. June 1, 2009) (citing 12 U.S.C. §§
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1821(d)(3)-(13)). “FIRREA’s exhaustion requirement applies to any claim
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or action respecting the assets of a failed institution for which the
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FDIC is receiver.” McCarthy v. FDIC, 348 F.3d 1075, 1081 (9th Cir. 2003)
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(emphasis in original).
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Plaintiffs allege that “[t]he Office of Thrift Supervision
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. . . closed Defendant [Washington Mutual] on September 25, 2009, and
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appointed the FDIC to act as receiver.” (First Amended Complaint (“FAC”)
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¶ 7, ECF No. 3.) Plaintiffs allege eleven claims against the FDIC in the
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FAC. However, Plaintiffs do not allege in the FAC that they exhausted
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FIRREA’s
administrative
remedies
applicable
to
Plaintiffs’
claims
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against the FDIC. Plaintiff’s only reference in the FAC to the FIRREA
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administrative
claims
procedure
is
that
“[o]n
December
30,
2008,
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Defendant
FDIC
established
the
deadline
for
filing
claims
for
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[Washington Mutual’s] liabilities.” (FAC ¶ 39.) In addition, Plaintiffs
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do not indicate in their opposition to the FDIC’s Rule 12(b)(1) motion
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that they have exhausted their claims against the FDIC under FIRREA.
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Instead, Plaintiffs argue FIRREA is not applicable and exhaustion is not
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necessary in this case because they are “challenging the direct actions
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of [Washington Mutual] in purportedly attempting to foreclose on their
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mortgage, and not the actions of FDIC as receiver[, and] . . . FDIC
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stepped into [Washington Mutual’s] shoes in acting beyond, or contrary
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to,
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permitted, powers or functions.” (Plaintiffs’ Opposition to FDIC’s
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Motion to Dismiss 6:17-23, ECF No. 17.)
its
statutorily
and
contractually
prescribed,
constitutionally
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However, “Plaintiffs’ only basis for naming the FDIC as a
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Defendant is the fact that it is the receiver of [Washington Mutual], a
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failed bank that was party to Plaintiffs’ loan agreement. As such,
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Plaintiffs’ claims relate to any act or omission of an institution
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subject to FDIC receivership, triggering FIRREA’s jurisdictional bar.”
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Herrera v. Streamline Funding, Inc., No. 11-709, 2011 WL 2110813, at *3
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(N.D. Cal. May 26, 2011) (finding “no support in the law” for the same
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arguments raised by Plaintiffs here).
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Therefore,
the
FDIC’s
motion
to
dismiss
for
lack
is
without
prejudice
of
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jurisdiction
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Plaintiffs are granted five court (5) days leave from the date on which
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this order is filed to file an amended complaint for the limited purpose
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of alleging exhaustion of FIRREA’s administrative claims procedure, if
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this occurred. If Plaintiffs do not amend their complaint as stated
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within this time period, this dismissal will be with prejudice and the
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Court will direct the Clerk of Court to enter judgment in favor of the
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FDIC, and to remand the case to the Superior Court of California in the
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County of Sacramento from which it was removed.
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Dated:
is
granted.
This
dismissal
February 15, 2012
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GARLAND E. BURRELL, JR.
United States District Judge
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