Bank of New York Mellon v. City of Richmond, California et al

Filing 28

MOTION to Dismiss for Lack of Jurisdiction filed by City of Richmond, California, Gordian Sword LLC, Mortgage Resolution Partners L.L.C., Richmond City Council. Motion Hearing set for 11/1/2013 10:00 AM in Courtroom 6, 17th Floor, San Francisco before Hon. Charles R. Breyer. Responses due by 10/4/2013. Replies due by 10/11/2013. (Attachments: # 1 Proposed Order Proposed Order Granting Motion to Dismiss)(Leyton, Stacey) (Filed on 9/20/2013)

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1 STEPHEN P. BERZON (SBN 46540) SCOTT A. KRONLAND (SBN 171693) 2 STACEY M. LEYTON (SBN 203827) ERIC P. BROWN (SBN 284245) 3 Altshuler Berzon LLP 4 177 Post Street, Suite 300 San Francisco, CA 94108 5 Tel: (415) 421-7151 Fax: (415) 362-8064 6 E-mail: sberzon@altber.com Attorneys for Defendants City of Richmond, Richmond 7 City Council, Mortgage Resolution Partners LLC and 8 Gordian Sword LLC WILLIAM A. FALIK (SBN 53499) 9 BRUCE REED GOODMILLER (SBN 121491) City Attorney 100 Tunnel Rd 10 CARLOS A. PRIVAT (SBN 197534) Berkeley, CA 94705 Assistant City Attorney Tel: (510) 540-5960 11 CITY OF RICHMOND Fax: (510) 704-8803 450 Civic Center Plaza E-mail: billfalik@gmail.com 12 Richmond, CA 94804 Attorney for Defendants Mortgage Resolution Partners LLC 13 Telephone: (510) 620-6509 Facsimile: (510) 620-6518 and Gordian Sword LLC 14 E-mail: bruce_goodmiller@ci.richmond.ca.us Attorneys for Defendants City of Richmond and 15 Richmond City Council 16 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA 17 18 THE BANK OF NEW YORK MELLON (f/k/a The Bank of New York) and THE BANK OF NEW 19 YORK MELLON TRUST COMPANY, N.A. (f/k/a The Bank of New York Trust Company, N.A.), as 20 Trustees; U.S. BANK NATIONAL ASSOCIATION, 21 as Trustee; and WILMINGTON TRUST COMPANY and WILMINGTON TRUST, NATIONAL 22 ASSOCIATION, as Trustees, 23 24 Plaintiffs, Case No. CV-13-3664-CRB NOTICE OF MOTION AND MOTION TO DISMISS FOR LACK OF SUBJECT MATTER JURISDICTION Date: Friday, November 1, 2013 Time: 10:00 a.m. Judge: Honorable Charles R. Breyer Courtroom 6, 17th Floor v. CITY OF RICHMOND, CALIFORNIA, a 25 municipality; RICHMOND CITY COUNCIL; 26 MORTGAGE RESOLUTION PARTNERS LLC, a Delaware limited liability company; and 27 GORDIAN SWORD LLC, a Delaware limited liability company, 28 Defendants. Ex Parte Motion to Shorten Time and Waive Hearing filed contemporaneously NOTICE OF MOTION AND MOTION TO DISMISS FOR LACK OF SUBJECT MATTER JURISDICTION Case No. CV-13-3664-CRB 1 NOTICE OF MOTION AND MOTION 2 3 4 Please take notice that on November 1, 2013, at 10:00 a.m., or such other date and time as the Court may set,1 in Courtroom 6, 17th Floor, before the Honorable Charles R. Breyer, Defendants will move to dismiss Plaintiffs’ complaint. 5 6 This motion is made pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure on the ground that Plaintiffs cannot establish that the Court has subject matter jurisdiction. 7 8 9 10 This motion is based on this Notice of Motion and Motion, the accompanying Memorandum of Points and Authorities, the Declaration of Eric Brown, the complete files and records of this action, and such other and further matters as the Court may properly consider. Dated: September 20, 2013 Respectfully submitted, 11 /s/ Stacey M. Leyton Stacey M. Leyton 12 13 Stephen P. Berzon Scott A. Kronland Stacey M. Leyton Eric P. Brown Altshuler Berzon LLP 14 15 16 Attorneys for Defendants City of Richmond and Mortgage Resolution Partners LLC 17 18 19 Bruce Reed Goodmiller Carlos A. Privat City of Richmond 20 21 Attorneys for Defendant City of Richmond 22 William A. Falik 23 Attorney for Defendant Mortgage Resolution Partners LLC 24 25 26 27 28 ___________________________________ 1 Defendants are contemporaneously filing an ex parte motion to shorten time and for the Court to forego oral argument and rule on the papers. 1 NOTICE OF MOTION AND MOTION TO DISMISS FOR LACK OF SUBJECT MATTER JURISDICTION Case No. CV-13-3664-CRB 1 2 MEMORANDUM OF POINTS AND AUTHORITIES On September 16, 2013, this Court dismissed the companion case to this one, Wells Fargo 3 Bank v. City of Richmond, Case No. 13-03663-CRB, on the ground that claims challenging the City 4 of Richmond’s “Seizure Program” were not ripe for adjudication and so the Court lacked subject 5 matter jurisdiction. Declaration of Eric Brown (“Brown Decl.”), Ex. G.2 For the same reasons as 6 in Wells Fargo, the claims in the instant case are not constitutionally ripe and so this Court lacks 7 subject matter jurisdiction. Defendants have refused voluntarily to dismiss the case, the only 8 purpose of which could be to further chill the political and legislative process. Plaintiffs therefore 9 request that the case be dismissed forthwith and have contemporaneously filed a motion to shorten 10 time and waive hearing on this motion. 11 BACKGROUND 12 Plaintiffs challenge on federal and state law grounds the City of Richmond’s “Seizure 13 Program,” and seek injunctive and declaratory relief. Second Amended Complaint (Dkt. 20-2). 14 Plaintiffs allege that “Defendants have taken substantial steps towards implementing the Seizure 15 Program” including entry of an advisory services agreement, public discussion of the program, and 16 issuance of letters making offers to purchase loans, and that “[i]f the offers are not accepted, the 17 City will attempt to quickly seize possession of the loans” by holding a condemnation hearing, 18 filing an eminent domain lawsuit, and using the expedited “quick take” state court procedure. Id. 19 ¶¶53-56. They point to “a high likelihood that Defendants will very soon exercise the City’s 20 eminent domain powers to seize possession of mortgage loans under the Seizure Program.” Id. 21 ¶57. 22 On September 12, 2013, this Court held a hearing on the defendants’ motion to dismiss in 23 the related case Wells Fargo Bank v. City of Richmond, Case No. 13-3663-CRB, which sought to 24 challenge the very same “substantial steps” taken by Defendants here. At the hearing, the Court 25 noted that “there are a series of steps that are contemplated by the Council to take place before the 26 ___________________________________ 2 Defendants request judicial notice of exhibits A-H to the Brown Declaration. See Reyn’s Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d 741, 746 n.6 (9th Cir. 2006) (court may take judicial 27 notice of court filings and other matters of public record). 28 1 NOTICE OF MOTION AND MOTION TO DISMISS FOR LACK OF SUBJECT MATTER JURISDICTION Case No. CV-13-3664-CRB 1 implementation of a program which would include – or not – eminent domain,” and that “if it did” 2 there is a question “whether it would be the City Council doing so or something called a Joint 3 Powers Authority.” Brown Decl., Ex. D (Transcript) at 6:4-9. With respect to the ripeness issue, 4 the Court therefore asked, “isn’t this – as we say in the trade, a no-brainer?” Id. at 7:4-5. After 5 hearing argument from the plaintiffs, the Court then stated its conclusion that the plaintiffs’ claims 6 were not ripe for determination and asked the parties to submit briefing on whether the case should 7 be dismissed or stayed. Id. at 25. 8 The next day, the Wells Fargo plaintiffs submitted a supplemental brief arguing that the 9 Court’s ripeness concerns “properly fall within the rubric of prudential ripeness rather than Article 10 III standing,” and urged the Court to hold the case in abeyance rather than dismissing it. Id., Ex. E 11 (ECF 75) at 4:8-10, 6:9-10. In the alternative, the plaintiffs asked the Court to grant leave to 12 amend in order to permit them to assert additional facts and legal theories, or to condition dismissal 13 upon a requirement that the defendants provide thirty days’ notice prior to filing any condemnation 14 action. Id. at 6:10-7:2 & n.3. 15 On September 16, 2013, the Court issued an order dismissing the case and an 16 accompanying judgment. Brown Decl., Exs. G, H (ECF 78, 79). The Court held that “Plaintiffs’ 17 claims are not ripe for adjudication” so that it lacked subject matter jurisdiction, and “further 18 conclude[d] that it must dismiss the case rather than hold it in abeyance.” Id., Ex. G (ECF 78) at 19 1:20-21, 2:9. The Court also denied leave to amend because “no amendment at this point would 20 cure the lack of subject matter jurisdiction,” and held it would not be “appropriate to impose 21 conditions on dismissal” given its lack of jurisdiction. Id. at 2 n.3. 22 Based on this dismissal, Defendants in the instant case asked whether Plaintiffs would agree 23 to voluntary dismissal in order to avoid the need for Defendants to file an unnecessary motion to 24 dismiss. Brown Decl. ¶8. Plaintiffs promised an answer by later in the week. Id. Defendants 25 responded that, given the absence of any non-frivolous basis to distinguish the ripeness issues in 26 the two cases, there could be no legitimate purpose to keeping the lawsuit on file and so its only 27 point could be to chill the political process. Id. ¶9. Therefore, Defendants explained that they 28 would file a motion to dismiss and a motion to shorten time by the end of the week unless Plaintiffs 2 NOTICE OF MOTION AND MOTION TO DISMISS FOR LACK OF SUBJECT MATTER JURISDICTION Case No. CV-13-3664-CRB 1 agreed to voluntary dismissal. Id. Having received no response, Defendants then proposed a 2 shortened briefing schedule and waiver of hearing on the motion and requested a response to this 3 proposal by Friday, September 20 at 12 p.m. to allow Defendants to file the motion and move to 4 shorten time later the same day. Id. ¶10. In response, Plaintiffs informed Defendants that they 5 refuse to voluntarily withdraw their Complaint and that they oppose Defendants’ motion for an 6 expedited briefing schedule and Defendants’ request that the Court forego oral argument. Id. ¶11. 7 ARGUMENT 8 For the same reasons as in Wells Fargo, the instant case is not ripe as a constitutional 9 matter, and this Court therefore lacks subject matter jurisdiction and must dismiss the case. 10 There can be no dispute that, before the City of Richmond (or a Joint Powers Authority) 11 may exercise eminent domain power, the Richmond City Council (or governing body of the Joint 12 Powers Authority) would need to authorize that exercise of power by adopting, by supermajority 13 vote, a resolution of necessity that would both identify the property to be condemned and state the 14 public purpose necessitating the taking. Cal. Code Civ. P. §§1230.020, 1245.220, 1245.230, 15 1245.235, 1245.240. Nor can there be any dispute that the City Council has not yet taken this 16 action.3 Plaintiffs’ own complaint describes the “use of the eminent domain power” as 17 “contemplated” and contends “there is a high likelihood” that Defendants “will very soon exercise 18 the City’s eminent domain powers.” Second Amended Complaint (Dkt. 20-2) ¶¶3, 57. 19 As the Court pointed out at the hearing on the motion to dismiss in Wells Fargo, the 20 legislative decision whether to authorize the exercise of eminent domain power is not a 21 “ministerial” act but rather an important part of “the democratic process.” Brown Decl., Ex. D 22 (Transcript) at 13:22-15:6; see also Santa Cruz Cnty. Redevelopment Agency v. Izant, 37 23 Cal.App.4th 141, 150 (1995) (“the resolution of necessity is a legislative act”). And the Supreme 24 Court has held that federal courts may not interfere “by any order, or in any mode” with a city 25 ___________________________________ 26 27 3 In fact, at its most recent meeting, the City Council “confirm[ed] that no loans will be acquired by the City through eminent domain before coming back to the full City Council for a vote” and directed staff to work to set up a Joint Powers Authority as a next step forward in the development of the program. Brown Decl., Ex. F (ECF 68) at 1:6-8. 28 3 NOTICE OF MOTION AND MOTION TO DISMISS FOR LACK OF SUBJECT MATTER JURISDICTION Case No. CV-13-3664-CRB 1 council’s authority to exercise its legislative power before those legislative powers have been 2 exercised. New Orleans Water Works Co. v. City of New Orleans, 164 U.S. 471, 481, 482 (1896); 3 see also McChord v. Cincinnati, N.O. & Tex. P. Ry. Co., 183 U.S. 483, 496-97 (1902); Associated 4 Gen. Contractors of America v. City of Columbus, 172 F.3d 411, 415 (6th Cir. 1999). 5 Therefore, as this Court explained in its order of dismissal in Wells Fargo, “[r]ipeness of 6 these claims does not rest on contingent future events certain to occur, but rather on future events 7 that may never occur.” Brown Decl., Ex. G (ECF 78) at 1:22-23. “A claim is not ripe for 8 adjudication if it rests upon contingent future events that may not occur as anticipated, or indeed 9 may not occur at all.” Texas v. United States, 523 U.S. 296, 300 (1998) (cited in order of dismissal 10 at 1 n.1). “The mere possibility that [an official] may act in an arguably unconstitutional manner 11 … is insufficient to establish the real and substantial controversy required to render a case 12 justiciable under Article III.” Freedom to Travel Campaign v. Newcomb, 82 F.3d 1431, 1441 (9th 13 Cir. 1996) (cited in order of dismissal at 1 n.1) (bracketed material and ellipses in court order). 14 Although the legal claims asserted in this case may differ in some immaterial respects from 15 those in Wells Fargo, the lack of ripeness does not depend on the legal basis for the challenge. 16 Rather, it derives from the fact that the legislative action authorizing eminent domain has not yet 17 occurred. The Court recognized this in Wells Fargo when holding that “no amendment at this 18 point would cure the lack of subject matter jurisdiction.” Brown Decl., Ex. G [ECF 78] at 2 n.3. 19 20 CONCLUSION For the foregoing reasons, this Court should dismiss the action forthwith. 21 22 Dated: September 20, 2013 Respectfully submitted, 23 /s/ Stacey M. Leyton Stacey M. Leyton 24 25 26 27 Stephen P. Berzon Scott A. Kronland Stacey M. Leyton Eric P. Brown Altshuler Berzon LLP 28 4 NOTICE OF MOTION AND MOTION TO DISMISS FOR LACK OF SUBJECT MATTER JURISDICTION Case No. CV-13-3664-CRB 1 2 Attorneys for Defendants City of Richmond and Mortgage Resolution Partners LLC 4 Bruce Reed Goodmiller Carlos A. Privat City of Richmond 5 Attorneys for Defendant City of Richmond 3 6 William A. Falik 7 8 Attorney for Defendant Mortgage Resolution Partners LLC 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5 NOTICE OF MOTION AND MOTION TO DISMISS FOR LACK OF SUBJECT MATTER JURISDICTION Case No. CV-13-3664-CRB

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