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

Filing 29

Ex Parte Application re 28 MOTION to Dismiss for Lack of Jurisdiction EX PARTE MOTION TO SHORTEN TIME AND FOREGO HEARING filed by City of Richmond, California, Gordian Sword LLC, Mortgage Resolution Partners L.L.C., Richmond City Council. (Attachments: # 1 Declaration Declaration of Eric P. Brown in Support of Ex Parte, # 2 Exhibit Exhibit A to the Declaration of Eric P. Brown, # 3 Exhibit Exhibit B to the Declaration of Eric P. Brown, # 4 Exhibit Exhibit C to the Declaration of Eric P. Brown, # 5 Exhibit Exhibit D to the Declaration of Eric P. Brown, # 6 Exhibit Exhibit E to the Declaration of Eric P. Brown, # 7 Exhibit Exhibit F to the Declaration of Eric P. Brown, # 8 Exhibit Exhibit G to the Declaration of Eric P. Brown, # 9 Exhibit Exhibit H to the Declaration of Eric P. Brown, # 10 Proposed Order Proposed Order)(Leyton, Stacey) (Filed on 9/20/2013)

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EXHIBIT B Case3:13-cv-03663-CRB Document54 Filed09/04/13 Page1 of 11 1 STEPHEN P. BERZON (SBN 46540) SCOTT A. KRONLAND (SBN 171693) 2 JONATHAN WEISSGLASS (SBN 185008) 3 ERIC P. BROWN (SBN 284245) 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 skronland@altber.com 7 jweissglass@altber.com ebrown@altber.com 8 9 Attorneys for Defendants City of Richmond and Mortgage Resolution Partners LLC 10 11 BRUCE REED GOODMILLER (SBN 121491) City Attorney 12 CARLOS A. PRIVAT (SBN 197534) Assistant City Attorney 13 CITY OF RICHMOND 450 Civic Center Plaza 14 Richmond, CA 94804 15 Telephone: (510) 620-6509 Facsimile: (510) 620-6518 16 E-mail: bruce_goodmiller@ci.richmond.ca.us carlos_privat@ci.richmond.ca.us 17 Attorneys for Defendant City of Richmond 18 Attorney for Defendant Mortgage Resolution Partners LLC UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION 19 20 21 WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee, et al., 22 Plaintiffs, 23 24 WILLIAM A. FALIK (SBN 53499) 100 Tunnel Rd. Berkeley, CA 94705 Tel: (510) 540-5960 Fax: (510) 704-8803 E-mail: billfalik@gmail.com v. Case No. CV-13-3663-CRB DEFENDANTS’ REPLY MEMORANDUM IN SUPPORT OF MOTION TO DISMISS FOR LACK OF SUBJECT MATTER JURISDICTION 25 CITY OF RICHMOND, CALIFORNIA, a 26 municipality, and MORTGAGE RESOLUTION PARTNERS LLC, 27 Defendants. 28 Defendants’ Reply in Support of Motion to Dismiss, Case No. CV-13-3663-CRB Case3:13-cv-03663-CRB Document54 Filed09/04/13 Page2 of 11 1 REPLY MEMORANDUM IN SUPPORT OF MOTION TO DISMISS 2 ARGUMENT 3 I. The Court Lacks Article III Jurisdiction 4 The Banks concede that the government action they challenge – the use of eminent domain 5 authority – cannot occur unless the Richmond City Council adopts a resolution of necessity. The 6 Banks concede no resolution has been adopted. As such, there is no Article III “case or 7 controversy,” so the Court lacks subject matter jurisdiction, so this case must be dismissed. It is 8 that simple. 9 A. The Bank’s Opposition (Doc. 46) (“Opp.”) does not squarely address the two central 10 points made in the Motion to Dismiss (Doc. 38) (“Mot.”): First, when a plaintiff is challenging 11 government action that would require future legislative authorization, the claim is not “ripe” 12 because it necessarily “rests upon contingent future events that may not occur as anticipated, or 13 indeed may not occur at all.” Mot. at 3 (quoting Texas v. United States, 523 U.S. 296, 300 (1998) 14 (internal quotation marks omitted)). Second, the plaintiff also lacks standing because the 15 threatened harm is necessarily “conjectural” and “hypothetical” in that the legislative authorization 16 may not be provided. Mot. at 6-7 (quoting City of Los Angeles v. Lyons, 461 U.S. 95, 101-02 17 (1983)). 18 The Bank’s Opposition also does not even discuss the Supreme Court case relied upon in 19 the Motion that is right on point. Like the Banks, the plaintiff in New Orleans Water Works Co. v. 20 City of New Orleans, 164 U.S. 471 (1896), alleged that it faced an imminent threat that a city 21 council would adopt an unconstitutional ordinance impairing the plaintiff’s contractual rights. 164 22 U.S. at 479-81. Like the Banks, the plaintiff pointed to the prior actions of the city as evidence the 23 threat was real and imminent. Id. at 480. Nonetheless, the Supreme Court held that the federal 24 courts lacked jurisdiction. The Court drew a blindingly bright line: The federal courts may not 25 interfere “by any order, or in any mode” before a city council acts in a legislative capacity, id. at 26 481; they must wait to exercise jurisdiction until “when the city council shall pass an ordinance,” 27 28 1 Defendants’ Reply in Support of Motion to Dismiss, Case No. CV-13-3663-CRB Case3:13-cv-03663-CRB Document54 Filed09/04/13 Page3 of 11 1 id. at 482; see also id. at 481 (“If an ordinance be passed . . . the jurisdiction of the courts may then 1 2 be invoked.” (emphasis supplied)). B. 3 Not surprisingly, the bright line drawn in New Orleans separates all the cases the 4 Banks rely upon in their Opposition from this case, and the Banks are glossing over the distinction. 5 In the cases the Banks cite in which federal courts reviewed government action, the necessary 6 legislative action had occurred, and the federal courts were engaged in their proper role of judicial 7 review. In this case, the necessary legislative authorization has not occurred. As already demonstrated, in the Regional Railroad Reorganization Act Cases, 419 U.S. 102 8 9 (1974) and Hawaii Housing Authority v. Midkiff, 467 U.S. 229 (1984), the necessary legislative 10 authorization for the compelled transfer of property already existed, i.e. the Rail Act and the 11 Hawaii Land Reform Act of 1967. Mot. at 4-5. The Banks rely on the cases (Opp. at ii, 3-4) but 2 12 do not address the dispositive distinction between those cases and this one. Similarly, in Eastern Enterprises v. Apfel, 524 U.S. 498 (1998) (Opp. at 9), the Supreme 13 14 Court considered a challenge to the Coal Industry Retiree Health Benefit Act of 1992. The Coal 15 Act was not just a bill that Congress was contemplating, so that case is not analogous to this one. In Chertkof v. Mayor & City Council of Baltimore, 497 F. Supp. 1252 (D. Md. 1980) (Opp. 16 17 at 3-4), the city council had passed an ordinance designating the plaintiffs’ property as part of the 18 urban renewal zone and “direct[ing] the Real Estate Acquisition Division to acquire plaintiff’s 19 20 21 22 23 24 25 26 27 1 Other cases make the same point. See, e.g., McChord v. Cincinnati, N.O. & Tex. P. Ry. Co., 183 U.S. 483, 496-97 (1902) (federal courts lack jurisdiction before the legislative action has occurred; “[t]he fact that the legislative action threatened may be in disregard of constitutional constraints . . . does not affect the question” (citation, internal quotation marks omitted)); Associated Gen. Contractors of Am. v. City of Columbus, 172 F.3d 411, 415 (6th Cir. 1999) (“The New Orleans Court made clear that the role of the court is to intervene, if at all, only after a legislative enactment has been passed.”); FrontierVision Operating Partners, L.P. v. Town of Naples, Maine, No. 01-16P-DMC, 2001 WL 220192, at *7 (D. Me. Mar. 7, 2001) (“Unless and until the defendant enacts an ordinance . . . this court may not consider an application for injunctive relief . . . concerning such an ordinance.”). 2 The Banks quote selectively from the Regional Railroad Reorganization Cases to make it appear that further legislative action was necessary to authorize the forced conveyance of property. Opp. at 3. To the contrary, under the Rail Act, a conveyance plan went into effect unless legislative action was taken to reject the plan, 419 U.S. at 112-14 & n.10, so no further legislative action was necessary. See id. at 140 (“[T]he implementation of the Rail Act will now lead inexorably to the final conveyance . . . .”). 28 2 Defendants’ Reply in Support of Motion to Dismiss, Case No. CV-13-3663-CRB Case3:13-cv-03663-CRB Document54 Filed09/04/13 Page4 of 11 1 property by having the City Solicitor institute a condemnation suit if plaintiff will not sell.” Id. at 2 1256. By contrast, in this case the City Council has not authorized the use of eminent domain 3 authority if negotiations fail. Authority to use eminent domain would require the future adoption 4 of a resolution of necessity. In 99 Cents Only Stores v. Lancaster Redevelopment Agency, 237 F. Supp. 2d 1123 (C.D. 5 6 Cal. 2001) (Opp. at ii, 2-3), the defendant public agency had passed two resolutions of necessity 7 authorizing condemnation of the property, id. at 1126-27. The issue in 99 Cents Only was not 8 ripeness but mootness, because the resolutions were rescinded in response to litigation. Id. at 1127. 9 The district court reasoned that a defendant arguing mootness must demonstrate that “the allegedly 10 wrongful behavior cannot reasonably be expected to recur,” id. (quoting FTC v. Affordable Media 11 LLC, 179 F.3d 1228, 1238 (9th Cir. 1999)), and thus repeal of a law does not necessarily render a 12 pending challenge to the law moot, id. at 1128. In this case, by contrast, no resolution of necessity 13 ever has been adopted, or may ever be adopted, and thus the question is not whether “allegedly 14 wrongful behavior” will recur because no “allegedly wrongful behavior” occurred in the first 3 15 place. Indeed, when the Ninth Circuit reviewed the 99 Cents Only case on appeal, it recognized 16 17 that the case was ripe precisely because a resolution of necessity had been passed. 60 Fed. App’x 18 123, 124 (9th Cir. 2003) (“At the time that [plaintiff] filed its complaint in district court, the 19 controversy was ripe. Once [the agency] passed [its resolution of necessity], [plaintiff] faced ‘a 20 realistic danger of sustaining a direct injury as a result of the statute’s operation or enforcement.’” 21 (quoting City of Auburn v. Qwest Corp., 260 F.3d 1160, 1170 (9th Cir. 2001))). In 99 Cents Only, 22 moreover, the district court was reviewing an actual condemnation plan – the one initially 23 authorized by the agency – while in this case there is none, because no resolution of necessity has 24 been adopted. 25 26 27 3 The mootness inquiry is very different from the standing/ripeness inquiry because standing/ripeness are assessed at the outset of the case and, once a court has jurisdiction, a defendant ordinarily cannot moot the case by voluntary cessation of its actions. City of Mesquite v. Aladdin’s Castle, Inc., 455 U.S. 283, 288-89 (1982). 28 3 Defendants’ Reply in Support of Motion to Dismiss, Case No. CV-13-3663-CRB Case3:13-cv-03663-CRB Document54 Filed09/04/13 Page5 of 11 1 C. Although no authority supports the Banks’ position, they nonetheless insist that the 2 Court has jurisdiction now because the City has a “pre-determined plan” to proceed with a “Loan 3 Seizure Program” and has taken “substantial steps” to implement this “plan,” and “Plaintiffs need 4 not wait until Defendants complete every step in their Loan Seizure Program before seeking 5 injunctive relief in this Court.” Opp. at i, 4, 6. This contention is wrong. When one of the 6 necessary “steps” that stands between a plaintiff and alleged harm is future legislative action, there 7 is no such thing as a “pre-determined plan,” and the plaintiff does have to wait for that “step” to 8 occur to invoke the federal courts’ jurisdiction. The reasons that the plaintiff has to wait are 9 twofold. 10 First, Article III’s limitations on jurisdiction are not based merely on a policy interest in 11 avoiding potentially unnecessary work for the federal courts – such that the courts might make 12 occasional exceptions and review the constitutionality of proposals that seem very likely to become 13 law. Rather, limitations on jurisdiction also “define the role assigned to the judiciary in a tripartite 14 allocation of power to assure that the federal courts will not intrude into areas committed to the 15 other branches of government.” Flast v. Cohen, 392 U.S. 83, 95 (1968). The federal courts 16 cannot treat the legislative process as a meaningless formality. Rather, the courts must respect the 17 legislative process as likely to separate good proposals from bad proposals and legal proposals 18 from illegal proposals. Judicial review by unelected judges is a last resort that may occur only 19 when a proposal becomes law. Otherwise, “the courts will pass that line which separates judicial 20 from legislative authority.” New Orleans, 164 U.S. at 481; see also Flast v. Cohen, 392 U.S. at 96 21 (when government action is involved “the rule against advisory opinions implements the separation 22 of powers prescribed by the Constitution and confines federal courts to the role assigned them by 23 Article III”). 24 Second, apart from the separation-of-powers issue, the outcome of a legislative process is 25 always “speculative” and “conjectural.” In this case, for example, the Banks certainly have not 26 established that the City Council’s adoption of a resolution of necessity, by supermajority vote, 27 after a noticed public hearing, is a foregone conclusion. 28 4 Defendants’ Reply in Support of Motion to Dismiss, Case No. CV-13-3663-CRB Case3:13-cv-03663-CRB Document54 Filed09/04/13 Page6 of 11 The only action by the City Council itself that the Banks point to is the City Council’s 1 2 approval of an Advisory Services Agreement. The Agreement does not authorize the use of 3 eminent domain authority, and it requires subsequent City Council approval before mortgage loans 4 can be acquired, whether through eminent domain or otherwise. Declaration of John C. Ertman, 5 Exh. I, Advisory Services Agreement at sec. 2, para. 2 (Doc. 9-9). Authority to use eminent 4 6 domain might not be given. The Banks ask the Court to glean from emails and website printouts that an effort is afoot to 7 8 present a proposed plan to the City Council. Opp. at 4-6. So what? Not every plan presented to a 9 legislative body is approved – or is approved in the same form in which it is presented. The City 10 also has received considerable information since the City Manager’s offer letters were sent, in the 11 form of the Banks’ own submissions to this Court, and would receive more information at a public 12 hearing. Many plans are revised and refined (or abandoned) in response to criticism. The Banks point to the City Manager’s offer letters (Opp. at 5-6), but those letters, and their 13 14 accompanying informational pamphlet, are explicit that the decision whether to exercise eminent 15 domain authority has not been made. Lindsay Dec., Exh. A (Doc. 33-1). The City Manager also 16 says this under oath in his declaration. Lindsay Dec. ¶23 (Doc. 33). The Banks are therefore left to rely on the Mayor’s recent press statements that she favors 17 18 the use of eminent domain authority and “is not backing down” in the face of Wall Street bullying. 19 Ertman Reply Dec., ¶¶22-28 & Exhs. R-V (Docs. 49, 49-18 to 49-22). But President Obama has 20 said many times that he supports immigration reform legislation; he and his Administration are 21 “not backing down” either. The outcome of the legislative debate on that issue is not a foregone 22 conclusion. 23 24 25 26 27 4 At various points in their Opposition, the Banks misleadingly refer to the City Council’s approval of the Advisory Services Agreement as if it were a “Plan” that the Banks are challenging. Opp. at 4-5. The Banks’ Complaint does not allege that it is illegal for a city council to obtain advice about the potential use of eminent domain authority, or for city staff to prepare a proposal for a city council’s agenda, or for a city council to consider and debate the issue of exercising eminent domain authority. Rather, the Banks’ Complaint alleges that the exercise of eminent domain authority would be illegal. Complaint ¶¶96-147. 28 5 Defendants’ Reply in Support of Motion to Dismiss, Case No. CV-13-3663-CRB Case3:13-cv-03663-CRB Document54 Filed09/04/13 Page7 of 11 1 D. There are difficult cases about ripeness/standing when a law exists but it is not clear 2 whether the law ever would be applied to the plaintiff. See, e.g., Thomas v. Anchorage Equal 3 Rights Comm’n, 220 F.3d 1134 (9th Cir. 2000) (en banc) (dismissing case for lack of jurisdiction). 4 Where, as here, the necessary legislative action has not occurred, and therefore cannot possibly be 5 implemented, the issue of subject matter jurisdiction is easy; there is none. 6 II. The Banks’ Claims Do Not Meet Prudential Justiciability Requirements 7 The Banks also have no persuasive response to defendants’ argument that, even if the Court 8 had Article III jurisdiction, the Banks’ claims are not “fit for judicial decision,” as required to 9 satisfy prudential ripeness concerns. Mot. at 6. The Banks refer to a “Loan Seizure Program,” but 10 merely capitalizing the phrase “Loan Seizure Program” and using it repeatedly is not an adequate 11 substitute for an approved resolution of necessity for the Court to review. 12 The Banks cannot tell the Court what mortgage loans are part of their hypothetical “Seizure 13 Program.” They allege in their Complaint that the City made offers to buy both performing and 14 non-performing loans, and that it is “unclear whether Richmond intends to seize the nonperforming 15 loans.” Complaint ¶66. They also allege that the City may “attempt to acquire or seize other 16 loans.” Id. (emphasis supplied). The Banks’ expert witness declares that the City Manager 17 incorrectly identified many of the loans in his offer letters as “underwater,” see Burnaman Dec. 18 ¶¶4-5 (Doc. 48), which suggests that those loans may not be part of a hypothetical “Seizure 19 Program.” The City Manager himself has stated under oath that the City has not decided whether 20 to exercise eminent domain authority or what loans might be included. Lindsay Dec. ¶¶22-23 21 (Doc. 33). Would the particular loans in which these Banks claim an interest even be part of their 22 hypothetical “Seizure Program”? 23 The Banks do not explain how this Court would review whether the exercise of eminent 24 domain authority is for public use and would serve legitimate local interests when the City Council 25 never approved the use of eminent domain authority or made any findings on this issue. The Banks 26 refer the Court to – in their attorney’s words – a “document entitled ‘Public Purpose’ that appears 27 to be a draft ‘resolution on necessity’ for San Bernardino County.” Ertman Reply Dec. ¶6 & Exh. 28 D (Docs. 49, 49-4). They also refer the Court to various emails and “marketing materials” 6 Defendants’ Reply in Support of Motion to Dismiss, Case No. CV-13-3663-CRB Case3:13-cv-03663-CRB Document54 Filed09/04/13 Page8 of 11 1 discussing the issue. Id. ¶¶5-19. Are these the “Seizure Program” the Court is supposed to 2 review? 3 The Banks predicate many of their merits arguments on what they contend are problems 4 with the details of their hypothetical “Seizure Program,” including how loans would be identified 5 and how investors would be compensated. Complaint ¶¶36-52. Yet the City has not yet 6 determined what loans might be included in an eminent domain plan and is not committed to 7 working with particular investors. Lindsay Dec. ¶¶22-23 (Doc. 33). Might not the legislative 8 process refine the details of any eminent domain plan and might not such a plan be revised in 9 response to exactly this type of criticism? Indeed, might not a deal for the voluntary acquisition of 10 some mortgage loans still be reached, at least for loans that already are “non-performing,” and for 11 acquisition of other loans as they go into default? 12 The Banks do not explain how the trial of the merits of their case will proceed. Will the 13 seven City Council members be called to testify so this Court can make factual findings about what 14 “Seizure Program” (if any) would have been approved by a supermajority of City Council 15 members, after a public hearing, had the Banks’ lawsuit not interfered with the legislative process? 16 The absurdity of such a trial makes clear that the Banks’ claims are not “fit for judicial decision” 17 on the merits now and, therefore, that their claims are not prudentially ripe. 18 B. Exercising jurisdiction now also would be contrary to strong policy interest in avoiding 19 unnecessary decisions about federal constitutional issues if a case can be resolved on state-law 20 grounds. “[A] federal court should not decide federal constitutional questions where a dispositive 21 nonconstitutional ground is available.” Hagans v. Lavine, 415 U.S. 528, 547 (1974). If a resolution 22 of necessity were adopted (after a noticed public hearing, by supermajority vote), that hypothetical 23 resolution of necessity would in all likelihood be challenged on state-law grounds. Those state-law 24 issues should be resolved first, which is another prudential reason why this case is not ripe. 25 III. The Banks’ Claims Would Not Evade Judicial Review 26 When a federal court lacks subject matter jurisdiction, it “cannot proceed at all” except for 27 “announcing the fact and dismissing the cause.” Steel Co. v. Citizens for a Better Environment, 28 523 U.S. 83, 94 (1998) (citations, internal quotation marks omitted). Nonetheless, it seems 7 Defendants’ Reply in Support of Motion to Dismiss, Case No. CV-13-3663-CRB Case3:13-cv-03663-CRB Document54 Filed09/04/13 Page9 of 11 1 necessary to respond to the Banks’ hysterical arguments that they need injunctive relief now 2 because, if a resolution of necessity were adopted, it would be too late. A. 3 The Banks’ argue that, if a resolution of necessity were adopted, the property at issue 4 would be taken and destroyed without adequate judicial review. The argument is absurd because 5 the adoption of a resolution of necessity does not result in the taking of property. A resolution of 6 necessity does not regulate primary conduct at all. A resolution of necessity just provides the 7 necessary legislative predicate that permits a public agency to file a subsequent eminent domain 8 lawsuit. Only a court order can compel the transfer of property. The property owner is named as a 9 defendant in an eminent domain lawsuit and gets to litigate every issue regarding the legality of the 10 taking before a court order issues. See Defs. Opp. to PI at 4 (Doc. 32) (summary of Eminent 11 Domain Law). Thus, it is not possible that the taking and destruction of property could occur 12 without judicial review because an eminent domain lawsuit is a judicial process. Nor is it true that there would be no opportunity for federal court review if the Banks 13 14 contend that state court procedures are inadequate. Opp. at ii, 8-9. Even if one imagines the 15 Banks’ “nightmare scenario” – the City Council gives (at least 15 days) notice to property owners 16 of a public hearing on a proposed resolution of necessity, holds a public hearing, and adopts a 17 resolution of necessity by supermajority vote, and the City promptly files an eminent domain 18 lawsuit in state court – it still would be at least several months before the state court issued an order 19 requiring the transfer of property. Even the procedure for “possession prior to judgment” – the so20 called quick-take procedure that the Banks egregiously misrepresent – requires a motion with at 21 least 60 days advance notice to the property owner. Cal. Code Civ. Proc. §1255.410(b); see also 22 Defs. Opp. to PI at 4 (Doc. 32). As such, there would be ample time after adoption of a hypothetical resolution of necessity 23 24 for the Banks to file suit in federal court and to seek injunctive relief before any state court order 25 issued to require the transfer of property. The Banks could argue in that federal lawsuit that the 5 26 state court procedures are inadequate. If the federal courts decide to abstain – having concluded 27 5 The Banks’ argument regarding the constitutionality of the California procedure for “possession prior to judgment” appears to be as follows: Although the California law requires the trial court 28 (continued) 8 Defendants’ Reply in Support of Motion to Dismiss, Case No. CV-13-3663-CRB Case3:13-cv-03663-CRB Document54 Filed09/04/13 Page10 of 11 1 that the state courts provide an adequate (and, indeed, superior) forum for resolving all the Banks’ 2 arguments – the Banks will have had their federal court review. 3 What is particularly absurd about the Banks’ argument about the need for judicial review 4 now is that there are many situations in which a proposed statute or ordinance would directly 5 regulate primary conduct in a way that arguably violates the Constitution. For example, a proposed 6 statute or ordinance might prohibit free speech or restrict abortions. Yet, even in those cases, the 7 federal courts have no subject matter jurisdiction to entertain a lawsuit until the statute or ordinance 8 actually passes. If there is no jurisdiction in those cases – in which the statute or ordinance would 9 directly regulate primary conduct – there cannot be jurisdiction in this one. 10 B. The Banks also contend the Court must act now because the adoption of a resolution of 11 necessity would affect the “value of [the Trust] certificates, traded in federally-regulated national 12 securities markets.” Opp. at ii, 9. That argument is absurd because it proves too much. The 13 introduction of a bill in Congress can affect stock prices. Public statements about the possible 14 introduction of a bill in Congress can affect stock prices. Speculators are always speculating about 15 the possible impact of possible future government action on their investments. The federal courts 16 do not have jurisdiction to issue advisory rulings in these circumstances to assist investors. 17 The salient point here is that a resolution of necessity would not take property. Only a 18 subsequent court order in a subsequent eminent domain lawsuit could take property, and there 19 would be ample opportunity for judicial review – in state and federal court – before such an order 20 issued. If the Banks are correct, moreover, that their legal claims are strong, then presumably 21 speculators already have factored this into their calculations. 22 23 24 25 26 27 (continued) to balance the hardship caused to the property owner if possession is granted against the hardship caused to the public entity if it is denied, see Defs. Opp. to PI at 4 (Doc. 32), the Banks will suffer irreparable harm because the state trial court would improperly balance the hardships, and the state appellate courts and U.S. Supreme Court would not intervene. Moreover, the state courts also would not be competent to consider the Banks’ challenge to the constitutionality of this procedure as applied to them. While these arguments appear to be foreclosed by precedent, see id. at 13, they are not ripe now, because no resolution of necessity has been adopted, so no eminent domain lawsuit can be filed, so no motion for “possession prior to judgment” can be made. 28 9 Defendants’ Reply in Support of Motion to Dismiss, Case No. CV-13-3663-CRB Case3:13-cv-03663-CRB Document54 Filed09/04/13 Page11 of 11 1 IV. This Case is a SLAPP Suit 2 The term Strategic Lawsuit Against Public Participation or “SLAPP” suit is used to 3 describe lawsuits that are filed during the consideration of public issues not because the lawsuit has 4 any likelihood of success but because a well-funded plaintiff can achieve its goals by distracting, 5 intimidating, and wasting the resources of its adversary. See generally U.S. ex rel. Newsham v. 6 Lockheed Missiles & Space Co., Inc., 190 F.3d 963, 970-72 (9th Cir. 1999). This case qualifies as 7 a SLAPP suit. The Banks’ argument for subject matter jurisdiction is objectively frivolous. The 8 Banks are unable to offer any authority for the proposition that the federal courts have jurisdiction 9 to review, or to enjoin the implementation of, a legislative decision that has not been made. See 10 Fed. R. Civ. P. 11(b)(1), (2). The Court should dismiss the case promptly so it does not further 11 distract City staff or interfere with public debate about an important issue. CONCLUSION 12 13 The Court should dismiss this case for lack of jurisdiction. 14 Dated: September 4, 2013 Respectfully submitted, 15 /s/ Scott A. Kronland Scott A. Kronland 16 17 18 19 20 21 Stephen P. Berzon Scott A. Kronland Jonathan Weissglass Eric P. Brown Altshuler Berzon LLP Attorneys for Defendants City of Richmond and Mortgage Resolution Partners LLC 22 24 Bruce Reed Goodmiller Carlos A. Privat City of Richmond 25 Attorneys for Defendant City of Richmond 26 William A. Falik 27 Attorney for Defendant Mortgage Resolution Partners LLC 23 28 10 Defendants’ Reply in Support of Motion to Dismiss, Case No. CV-13-3663-CRB

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