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

Filing 61

Declaration of Brian Hershman in Support of 60 Declaration in Support, of Motion for Rule 11 Sanctions, Exhibit H, Part 1 of 2 filed byU.S. Bank National Association. (Attachments: # 1 Exhibit H, Part 2 of 2, # 2 Exhibit I, Part 1 of 2, # 3 Exhibit I, Part 2 of 2, # 4 Exhibit J, # 5 Exhibit K, # 6 Exhibit L)(Related document(s) 60 ) (Hershman, Brian) (Filed on 11/22/2013)

Exhibit L

JONES DAY
100 HIGH STREET • BOSTON. MASSACHUSETTS 02110.1781
TELEPHONE: [phone] • FACSIMILE: +1.617.449.6999

Direct Number: [phone]
[e-mail]

October 15, 2013

BY E-MAIL AND OVERNIGHT DELIVERY
Stacey M. Leyton, Esq.
Altshuler Berzon LLP
177 Post Street, Suite 300
San Francisco, California 94108
Re:

The Bank of New York l11ellon (flk/a The Bank of New York), as Trustee, et al.,
v. City of Richmond, California, et al.. Case No. 3: 13-cv-3664-CRB (N.D. Cal.)

Dear Ms. Leyton:
I write on behalf of the plaintiffs in the above-captioned lawsuit (collectively, the
"Trustees'') in response to your letter dated September 24,2013. Your letter sets forth the most
recent of Defendants' inappropriate threats to seek sanctions against the Trustees under Federal
Rule of Civil Procedure 11 if the Trustees do not accede to Defendants' demands that they
immediately dismiss this lawsuit. The Trustees reject your clients' most recent demand and
threat, for the reasons previously communicated and those set forth below.
As the Trustees repeatedly have stated, and as their opposition to Defendants' motion to
dismiss amply demonstrates, the Trustees have asserted a meritorious legal challenge to
Defendants' unconstitutional seizure program that is ripe for adjudication in the federal district
court. Indeed, Defendants' repeated threat of Rule 11 sanctions is nothing more than a
transparent attempt to evade federal judicial review of their seizure program. In addition,
Defendants' efforts to deprive the Trustees of their day in federal court is improper for the
following three reasons, among others:

First, Defendants' assertion that the Second Amended Complaint is frivolous and
exposes the Trustees to sanctions is absurd on its face because Defendants stipulated to the filing
of that pleading. (See Stipulation For Filing Of Second Amended Complaint (ECF No. 17).)
Certainly Defendants cannot stipulate to the filing of a pleading that they believe is frivolous and
then, two months later, obtain sanctions against the other parties to that stipulation.
Second, as explained in the Trustees' opposition to Defendants' motion to dismiss, the
Trustees' factual allegations and legal claims are not "identical," as Defendants contend, to those
raised by plaintiffs in the Wells Fargo action. Defendants' repeated statement that "the lack of
ripeness does not depend on the legal basis for the challenge" does not make it so. More

ALKHOBAR

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ATLANTA

D0SSELDORF

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MEXICO CITY

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SAN FRANCISCO

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BEIJING

FRANKFURT
MILAN
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MOSCOW

SAO PAULO

BOSTON

HONG KONG

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SHANGHAI

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BRUSSELS
HOUSTON

MUNICH
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CHICAGO
IRVINE

NEW YORK

SILICON VALLEY

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CLEVELAND

JEDDAH
PARIS

SINGAPORE

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COLUMBUS

LONDON

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PITTSBURGH
SYDNEY

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TAIPEI

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DALLAS

LOS ANGELES
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RIYADH
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TOKYO

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DUBAI
MADRID

SAN DIEGO
WASHINGTON

JONES DAY
Stacey M. Leyton, Esq.
October 15, 2013
Page 2
importantly, as set forth in the Trustees' opposition to Defendants' motion to dismiss, the parties'
briefing in the Wells Fargo action did not focus on the ripeness standard applicable to claims
seeking a declaratory judgment. The Trustees have submitted specific facts and compelling legal
authority demonstrating that the type of purported "contingency" relied on by Defendants does
not defeat Article III jurisdiction or render the Trustees' claims unripe under the applicable
prudential factors (which, themselves, do not implicate the Court's subject matter jurisdiction).
In any event, the Trustees are entitled to their own day in court; they need not rely on the
arguments made and the results obtained by other plaintiffs in another case.
Third, Defendants' assertion that the Trustees necessarily must be pursuing this action
for an improper purpose because Defendants are convinced that they will prevail on their motion
to dismiss provides no basis to threaten Rule 11 sanctions. Simply stated, the Trustees are
prosecuting their claims now because Defendants' conduct is plainly impermissible under
controlling law and harmful to the beneficial interest holders of the trusts at issue. The Trustees'
claims are well-pled, justiciable, and meritorious. There is nothing improper about opposing
your clients' efforts to terminate this suit, and the Trustees will not be deterred by Defendants'
baseless threat to seek sanctions, however often repeated.
Finally, the Trustees remind you that if Defendants follow through on their imprudent
threat and tile a Rule 11 motion, the Court may, following denial of the motion, award the
Trustees their "reasonable expenses, including attorney's fees, incurred for the motion." Fed. R.
Civ. P. 11 (c)(2). Defendants should remain mindful that the tiling of a motion for sanctions is
itself subject to the requirements of Rule 11 and can-and here should-result in the imposition
of sanctions against Defendants.
Very truly yours,

Matthew A. Martel

cc:

Brian D. Hershman, Esq.
Bronwyn F. Pollock, Esq.
Michael E. Johnson, Esq.
Bruce Reed Goodmiller, Esq.
Carlos A. Privat, Esq.
William A. Falik, Esq.