Federal Deposit Insurance Company v. Ching et al

Filing 117

ORDER signed by Judge Kimberly J. Mueller on 12/1/2015 DENYING defendants' 94 Motion for Reconsideration of 7/27/2015 86 Order denying Motion for Summary Judgment. (Marciel, M)

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UNITED STATES DISTRICT COURT

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FOR THE EASTERN DISTRICT OF CALIFORNIA

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FEDERAL DEPOSIT INSURANCE
COMPANY AS RECEIVER FOR BUTTE
COMMUNITY BANK,

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Plaintiff,

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No. 2:13-cv-01710-KJM-EFB

ORDER

v.
ROBERT CHING, et al.,

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Defendant.

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The defendants, several former directors of Butte Community Bank (the Bank),

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request clarification and reconsideration of this court’s previous order, which denied their motion

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for summary judgment. See Mot. Recons., ECF No. 94; Order July 27, 2015, ECF No. 86. The

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matter was submitted without a hearing. For the following reasons, the motion is DENIED.

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I.

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CLARIFICATION
The defendants previously moved for summary judgment that “neither the Bank

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nor its stockholder had standing to bring these dividend claims and consequently, the FDIC-R

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cannot purport to bring the claims ‘in the shoes’ of the Bank or its stockholder.” Mot. Summ. J.,

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ECF No. 45. In support of this motion, the defendants argued the FDIC-R cannot bring its claims

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in the shoes of the Bank’s depositors, because the directors owed depositors no duties under
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California Corporations Code section 309. Mem. 12–13, ECF No. 45-1. The court denied the

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motion because it found the FDIC had standing under section 309. Order July 27, 2015, at 9–10.

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The court reasoned that because “the shareholders and corporation would have standing under

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California law,” the FDIC-R would as well, as it “succeeds to all the rights of the Bank and

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stockholders.” Id. at 10. The court did not reach the question of the FDIC-R’s standing with

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respect to the Banks’ depositors; whether or not the FDIC-R could have maintained this action in

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the depositors’ stead, it may maintain its claims under section 309 as successor to the claims of

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the Bank and its shareholders.

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Here, the defendants seek clarification that the FDIC-R would lack standing under

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section 309 were it to stand solely in the shoes of the Bank’s depositors. They request this

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clarification “because it would serve to narrow the case.” Mem. P. & A. at 1. As the FDIC-R’s

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standing under section 309 is established, the court disagrees that the requested additional finding

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would meaningfully narrow any dispute. The motion for clarification is denied.

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II.

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RECONSIDERATION
The defendants request reconsideration of this court’s previous conclusion that

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“[a] director may be negligent and therefore liable under section 309, even if she complied with

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the specific statutes defining impermissible dividends and therefore is not liable under [California

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Corporations Code] section 316.” Order July 27, 2015, at 12. They argue this interpretation is

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incorrect, because whether or not a dividend complies with the specific statutes governing

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dividends, imposing liability under section 309 would run contrary to the California legislature’s

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intent. See Mem. P. & A. at 1–5.

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A district court may reconsider a prior interlocutory order: “the power to grant

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relief from erroneous interlocutory orders, exercised in justice and good conscience, has long

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been recognized as within the plenary power of courts until entry of final judgment and is not

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inconsistent with any of the Rules.” City of L.A., Harbor Div. v. Santa Monica Baykeeper, 254

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F.3d 882, 887 (9th Cir. 2001) (citations and internal quotation marks omitted); see also Fed. R.

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Civ. P. 54(b). But “as a rule courts should be loathe [sic] to do so in the absence of extraordinary

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circumstances such as where the initial decision was ‘clearly erroneous and would work a
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manifest injustice.’” Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 817 (1988)

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(quoting Arizona v. California, 460 U.S. 605, 618 n.8 (1983)). As a general matter, courts often

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deny requests for reconsideration based on arguments that should have been raised before the

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challenged order was issued. See, e.g., Frietsch v. Refco, Inc., 56 F.3d 825, 828 (7th Cir.1995);

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Daghlian v. DeVry Univ., Inc., 582 F. Supp. 2d 1231, 1257 (C.D. Cal. 2007)). The Local Rules

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of this District also impose specific requirements on motions for reconsideration, including that

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the moving party identify any “new or different facts or circumstances that are claimed to exist

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which did not exist or were not shown upon such prior motion, or what other grounds exist for the

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motion” and “why the facts or circumstances were not shown at the time of the prior motion.”

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E.D. Cal. L.R. 230(j).

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Here, the defendants have not identified any “new or different facts or

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circumstances,” but argue the court’s previous decision is incorrect as a matter of law. They

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advance many of the same arguments raised in previous motions or variations of those arguments.

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See generally Mot. Summ. J., ECF No. 19; Reply Summ J., ECF No. 27; Mot. Summ. J., ECF

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No. 45; Reply Summ. J., ECF No. 66; Mem. P. & A. Recons, ECF No. 94-1; Reply Recons., ECF

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No. 108. The court previously has recognized the same similarity across filings. See Order Aug.

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27, 2015, at 10 (comparing Mot. Summ. J. 1, ECF No. 19 with Mot. Summ. J. 1, ECF No. 45).

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The paragraphs the defendants now challenge were also addressed in the alternative and as an

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additional reason for denial of summary judgment. See Order Aug. 27, 2015, at 10–12. The

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court declines to reconsider yet again.

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III.

CONCLUSION

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The motion is DENIED. This order resolves ECF No. 94.

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IT IS SO ORDERED.

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DATED: December 1, 2015.

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UNITED STATES DISTRICT JUDGE

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