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

Filing 30

RESPONSE (re 29 Ex Parte Application re 28 MOTION to Dismiss for Lack of Jurisdiction EX PARTE MOTION TO SHORTEN TIME AND FOREGO HEARING ) filed byWilmington Trust Company, Wilmington Trust, National Association. (Attachments: # 1 Declaration of Kurt Osenbaugh)(Osenbaugh, Kurt) (Filed on 9/24/2013)

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KURT OSENBAUGH (SBN 106132)
WHITNEY CHELGREN (SBN 285362)
ALSTON & BIRD LLP
333 South Hope Street, Sixteenth Floor
Los Angeles, California 90071
Telephone: [phone]
Facsimile: [phone]
[e-mail]
whitney.chelgren a alston,com
Attorneys for Plaintiffs
WILMINGTON TRUST COMPANY and
WILMINGTON TRUST, NATIONAL
ASSOCIATION, as Trustees for the Trusts
listed in Exhibit C to the Second Amended Complaint

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[Additional counsel listed on signature page]
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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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THE BANK OF NEW YORK MELLON (f/k/a
The Bank of New York) and THE BANK OF
NEW YORK MELLON TRUST COMPANY,
N.A. (f/k/a The Bank of New York Trust
Company, N.A.) as Trustees; U.S. BANK
NATIONAL ASSOCIATION, as Trustee;
WILMINGTON TRUST COMPANY and
WILMINGTON TRUST NATIONAL
ASSOCIATION, as Trustees

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Case No.: 13-CV-3664-CRB
OPPOSITION OF TRUSTEE
PLAINTIFFS TO DEFENDANTS' EX
PARTE MOTION TO SHORTEN TIME
AND FORGO HEARING ON MOTION
TO DISMISS

Plaintiffs,
HONORABLE CHARLES R. BREYER
v.
CITY OF RICHMOND, CALIFORNIA, a
municipality; RICHMOND CITY COUNCIL;
MORTGAGE RESOLUTION PARTNERS
L.L.C., a Delaware limited liability company;
and GORDIAN SWORD LLC, a Delaware
limited liability company
Defendants.

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OPPOSITION OF TRUSTEE PLAINTIFFS TO DEFENDANTS' EX PARTE MOTION
CASE No, 13-CV-3664-CRB
AMECURRLNI1"707550472,1 23-Sep-13 18:04

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INTRODUCTION
Defendants identify no basis that would warrant granting their ex parte request for an

order requiring Plaintiffs to oppose Defendants' motion to dismiss tomorrow

just three

court days after that motion was -filed—and for the Court to rule on that dismissal motion
without the benefit of oral argument. To obtain an order shortening time, a party must show a
"substantial harm or prejudice that would occur if the Court did not change the time," Local
Rule 6-3(a)(3); see also Caldwell v. Wells Fargo Bank, N.A., 2013 WL 3789808, *1 (N.D.
Cal. Jul. 16, 2013) (stating that a party "must show two things to justify ex parte relief: first,
that the moving party's cause will be irreparably prejudiced if the underlying motion is heard
according to regular noticed motion procedures; and second, 'that the moving party is without
fault in creating the crisis that requires ex parte relief. . •'").
Here, Defendants don't come close to meeting this standard. First, Defendants cannot
rely on their ipse dixit proclamation that because of their belief that they are entitled to
dismissal, any contrary argument by Plaintiffs must be frivolous. Second, Defendants
incorrectly assert that this lawsuit seeks to chill the political process in the City of Richmond
and that that is the only reason why Plaintiffs have not voluntarily dismissed their claims.
Both arguments fail. This is a different lawsuit and includes different claims and allegations
than those set forth in Wells Fargo Bank, National Association, et al. v, The City of
Richmond, et al., CV13 3663 (the "Wells Fargo Action"). Plaintiffs are entitled to fully
respond to Defendants' motion by demonstrating, among other things, that their claims arise
from a sufficiently immediate controversy to support a declaratory judgment, including in
particular their claim for declaratory relief regarding tortious interference with contract, a
claim not asserted in the Wells Fargo Action.
Moreover, even if chilling a political process could somehow be a proper basis for
shortening time under Rule 6-3 (it plainly is not), there can be no reasonable dispute that this
action has not impeded any political process. At the September 10 Richmond City Council
meeting, while this action was pending, the City Council reaffirmed that it was proceeding

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OPPOSITION OF 'TRUSTEE PLAINTIFFS TO DEFENDANTS' EX PARTE MOTION
CASE No. I3-CV-3664-CR13
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with the program, and, by a separate supermajority vote, rejected a resolution to withdraw the

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City's offer letters.

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Plaintiffs should be allowed their day in court and the right afforded all litigants to

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brief the viability of their claims. Defendants have demonstrated no cognizable basis

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warranting a finding of substantial harm or prejudice in the absence of a shortened briefing

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schedule, and their Ex Parte Motion should be denied.
II. NO HARM OR PREJUDICE WILL OCCUR IF THE COURT HEARS
DEFENDANTS' MOTION TO DISMISS ON THE NORMAL SCHEDULE

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The Court should deny the Ex Parte Motion because Defendants have not satisfied—

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and cannot satisfy—Local Rule 6-3. Defendants identify no "substantial harm or prejudice

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that would occur if the Court did not change the time" for Plaintiffs to respond to the

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dismissal motion to tomorrow, a mere three court days after that motion was filed. Nor can

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Defendants demonstrate, as they must, that they are "without fault in creating the [purported]

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crisis that requires ex parte relief." Caldwell, 2013 WL 3789808, at *1. Defendants could

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have moved to dismiss this action any time after it was commenced more than six weeks ago

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on August 9, 2013. They were not obligated to wait to file their motion until they received a

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favorable ruling in the Wells Fargo Action, which they now seek to apply with preclusive

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effect here. Thus, any purported current exigency is solely the result of Defendants' litigation

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strategy, not any conduct of Plaintiffs. And, Defendants cannot identify a valid basis for

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depriving Plaintiffs the opportunity to be heard at oral argument. The Ex Parte Motion

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should be denied.
Plaintiffs' Stipulation To Extend Defendants' Time To Respond To The
A.
Complaint To October 1 Confirms That Defendants' Ex Parte Motion Lacks
Merit.

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Even before the Court issued its ruling in the Wells Fargo Action, Defendants

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demanded that Plaintiffs dismiss their Complaint. See Declaration of Eric P. Brown, ¶ 4 (Dkt.

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29). Because Defendants' response to the Complaint was due on September 16

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date the Court indicated it would issue a ruling in the other case—Plaintiffs proposed a two-

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OPPOSITION OF TRUSTEE PLAINTIFFS TO DEFENDANTS' la PARTE MOTION
CASE No. I3-CV-3664-CRB
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the same

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week extension to Defendants, which they accepted, to give the parties time to consider the

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impact of the Court's ruling.'

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Despite the stipulation to continue the response date to October 1, Defendants renewed

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their request that the Trustees immediately dismiss this action when the Court dismissed the

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Wells Fargo Action on September 16. The Trustees refused to agree to Defendants'

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unreasonable demand, because the substance of their causes of action are different than those

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asserted in the Wells Fargo Action. Trustees further explained: "[n]or is there any exigency

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or other reason for the Court to expedite the briefing schedule applicable to any such motion

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or to forgo oral argument as [Defendants] suggest, and [Defendants] have provided no basis

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for such requests." See September 20, 2013, letter from Bronwyn F. Pollock to Eric Brown;

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attached as Exhibit A to the accompanying Declaration of Kurt Osenbaugh. As any other

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litigant, the Trustees deserve a full opportunity to oppose Defendants' Motion to Dismiss and

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to be heard by this Court.

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Defendants' assertion that this lawsuit seeks to chill the political process is misguided

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and fails to demonstrate the "substantial harm or prejudice" required by Local Rule 6-3.

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Plaintiffs do not seek to stop the City from taking any political or legislative action, nor is

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there any evidence suggesting that the existence of this action would do so. Indeed, while this

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action was pending, the Richmond City Council considered whether to withdraw the offers to

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purchase the notes and rejected that proposition by a supermajority vote, and separately

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reaffirmed that it is not only moving forward with the seizure program, but is seeking to enlist

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additional municipalities in an expanded program.

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Mr. Brown's Declaration notably fails to disclose that the Trustee Plaintiffs proposed this
extension and that Defendants agreed to the continuance of their response date to October 1.
(See Stipulation to Extend Time, Dkt. 23.) Of course, that extension further demonstrates that
there is no need to expedite briefing or engage in the fire drill requested by Defendants here.

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OPPOSITION OF TRUSTEE PLAINTIFFS TO DEFENDANTS' EX PARTE MOTION
CASE No. I3-CV-3664-CRB
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Defendants' Request For Expedited Briefing Appears To Be Part Of A Broader
Litigation Strategy Designed To Deprive Plaintiffs Of Federal Court Review Of
Their Constitutional Claims.

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Defendants cannot demonstrate a legitimate basis justifying the need for an expedited

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briefing schedule. Defendants previously argued that the Wells Fargo Plaintiffs' motion for

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preliminary injunction was not ripe because the City had not yet passed the resolution of

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necessity. See, e.g., Defs' Mot. to Dismiss for Lack of Subject Matter Jurisdiction; Mem, of

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Points and Auths. in Support, Wells Fargo Bank, Nat'l Ass'n, et al. V. City of Richmond, et

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al., 13-cv-3663, ECF Dkt. No. 38 at 3:15-26 (N.D. Cal. Aug 23, 2013) ("a resolution of

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necessity might never be proposed"); see also id. at 1:10-20 (stating "the City Manager is still

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exploring the possibility of acquiring loans through negotiations").

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Given Defendants' prior representations to the Court regarding the timing of their

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seizure program, they cannot credibly argue that substantial harm or prejudice would occur if

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the Court hears their motion to dismiss this action on the normal schedule. There is no basis

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to deprive the Trustees of the normal opportunity afforded litigants to oppose a motion to

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dismiss, and certainly no basis to give the Trustees a mere three court days to oppose

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Defendants' motion. Indeed, Defendants' conduct suggests that they are simply attempting to

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dispose of the remaining federal action as quickly as possible so they can proceed with state

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court condemnation actions using the quick take procedure while depriving Plaintiffs of a

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federal forum for their constitutional claims. The Court should not permit Defendants to

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OPPOSITION OF "TRUSTEE PLAINTIFFS TO DEFENDANTS' EX PA RTE MOTION
CASE No. I3-CV-3664-CR.B
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misuse the shortening time procedure in this manner and should allow the motion to dismiss

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to he heard and argued in the normal course.

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DATED: September 24, 2013

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ALSTON & BIRD LLP
KURT OSENBAUGH
WHITNEY CHELGREN

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/s/ Kurt Osenbaugh
Kurt Osenbaugh
Attorneys for Plaintiffs
WILMINGTON TRUST COMPANY and
WILMINGTON TRUST, NATIONAL ASSOCIATION,
as Trustees for the Trusts listed in Exhibit C to the
Second Amended Complaint
By:

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MAYER BROWN LLP
DONALD M. FALK (SBN 150256)
[e-mail]
Two Palo Alto Square, Suite 300
3000 El Camino Real
Palo Alto, CA 94306-2112
Tel: [phone]
Fax: [phone]

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MAYER BROWN LLP
BRONWYN F. POLLOCK (SBN 210912)
[e-mail]
350 S. Grand Ave., 25th Floor
Los Angeles, CA 90071-1503
Tel: [phone]
Fax: [phone]

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/s/ Bronwyn F. Pollock
Bronwyn F. Pollock
Attorneys for Plaintiffs
THE BANK OF NEW YORK MELLON (f/k/a The
Bank of New York) and THE
BANK OF NEW YORK MELLON TRUST
COMPANY, N.A. (f/k/a The Bank of New York Trust
Company, N.A.), as Trustees for the Trusts listed in
Exhibit A to the Second Amended Complaint
By:

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oPPosrrioN OF TRUSTEE PLAINTIFFS TO DEFENDANTS' EX PARTE MOTION

CASE No, I 3-CV-3664-CRB

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JONES DAY
BRIAN D. HERSHMAN (SBN 1681 7 5)
bhershmangjonesday.com
555 South Flower Street, 50th Floor
Los Angeles, CA 90071-2300
Tel: [phone]
Fax: [phone]

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JONES DAY
MATTHEW A. MARTEL (pro hac vice)
mmartel a onesday. corn
JOSEPH . SCONYERS (pro hac vice)
jsconyers c onesday.com
100 High treet 21st Floor
Boston, MA 02110
Telephone: [phone]
Facsimile: 617-449-6999

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By:

/s/ Brian D. Hershman
Brian D. Hershman
Attorneys for Plaintiff
U.S. BANK NATIONAL ASSOCIATION,
as Trustee for the Trusts listed in Exhibit B to the Second
Amended Complaint

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OPPOSITION OF TRUSTEE PLAINTIFFS TO DEFENDANTS' EX PARTE MOTION
CASE NO. I 3-CV-3664-CRB
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