Giannangeli v. Target National Bank, N.A.

Filing 38

ORDER denying 29 Plaintiffs Motion to Alter or Amend Judgment Pursuant to Rule 59(e), by Judge William J. Martinez on 10/18/2012.(ervsl, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge William J. Martínez
Civil Action No. 11-cv-02154-WJM-MEH
MARIE T. GIANNANGELI,
Plaintiff,
v.
TARGET NATIONAL BANK, N.A.,
Defendant.

ORDER DENYING PLAINTIFF’S MOTION TO ALTER OR AMEND JUDGMENT

In this action, Plaintiff brought claims against Defendant under the National
Banking Act (“NBA”), 12 U.S.C. §§ 85 and 86, alleging that Defendant charged Plaintiff
interest rates on a credit account that exceeded the NBA’s maximum allowable rate of
seven percent. (ECF No. 1.) On August 2, 2012, this Court granted Defendant’s
Motion to Dismiss Under Federal Rule of Civil Procedure 12(b)(6). (ECF No. 28.) The
Court held that South Dakota usury law, not the NBA, applied in this action, and
therefore Defendant was not limited by the NBA’s seven percent interest rate cap. (Id.)
This matter is before the Court on Plaintiff’s Motion to Alter or Amend Judgment
Pursuant to Rule 59(e) (“Motion”). (ECF No. 29.) Defendant has filed a Response to
the Motion (ECF No. 31), and Plaintiff has filed a Reply (ECF No. 34). The Motion is
ripe for adjudication. For the following reasons, the Motion is DENIED.
I. LEGAL STANDARDS
Federal Rule of Civil Procedure 59(e) authorizes the filing of a motion to alter or

amend a judgment. “Grounds warranting a motion to reconsider [under Rule 59(e)]
include (1) an intervening change in the controlling law, (2) new evidence previously
unavailable, and (3) the need to correct clear error or prevent manifest injustice.”
Servants of Paraclete v. Does, 204 F.3d 1005, 1012 (10th Cir. 2000).
A Rule 59(e) motion “cannot be used to advance [new] arguments that could
have been raised in prior briefing.” Grynberg v. Total S.A., 538 F.3d 1336, 1354 (10th
Cir. 2008); see also Steele v. Young, 11 F.3d 1518, 1520 n.1 (10th Cir. 1993) (“Rule
59(e) cannot be used to expand a judgment to encompass new issues which could
have been raised prior to issuance of the judgment.”); GSS Group Ltd v. Nat’l Port
Auth., 680 F.3d 805, 812 (D.C. Cir. 2012) (“Rule 59(e) motions are aimed at
reconsideration, not initial consideration.”) (internal quotations omitted).
II. ANALYSIS
In the Motion, Plaintiff argues that the Court “has not considered [one] aspect of
the Plaintiff’s Complaint,” namely, “whether a Bank commits usury when it charges and
extracts interest beyond the contracted rate under an illusory (and thus unconscionable
and unenforceable) contract.” (ECF No. 29, at 3, 4.) As support for the proposition that
the Court missed this aspect of Plaintiff’s case, Plaintiff points to a particular paragraph
in the factual background section of her Complaint, which states,
[A]ccording to the Agreement the interest rate charge should have been
13.25%, 17.25%, or 22.90%. However, the Agreement also states that
Target “may change the terms, including your APR, at any time . . .” In
fact, Target always charged Plaintiff well in excess of the interest rates
stated in the Agreement with a minimum interest charge of 25.99%. Thus,
there was no particular rate agreed upon by the Plaintiff and Defendant
and the rates stated in the Agreement were illusory. Regardless of the
interest rates stated in the Agreement, Target charged whatever interest
rate it wanted on its own whim and caprice.
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(ECF No. 1, ¶ 6.)
Based on this factual allegation, Plaintiff certainly could have tried to pursue a
legal claim that Defendant violated the NBA by charging interest rates that exceeded
those allowed under the parties’ contract. However, for the reasons stated below,
Plaintiff did not do so, either in her Complaint, or in opposing Defendant’s Motion to
Dismiss. The Court declines to consider this new argument raised for the first time in
her Rule 59(e) Motion. See Grynberg, 538 F.3d at 1354; Steele, 11 F.3d at 1520 n.1.
The factual background of Plaintiff’s Complaint proceeded to allege that,
Under Section 85 of the NBA, the state where the national bank is located
may determine the maximum rate of interest the national bank may
charge. For purposes of the NBA, Target is located in South Dakota. . . .
In the case of South Dakota, it has fixed no particular maximum rate of
interest. Rather, under South Dakota law, the statute specifically states
that there is no maximum rate of interest. . . . Given, that . . .South
Dakota has failed to fix a particular maximum rate of interest for purposes
of usury, the NBA prescribes that the maximum interest rate a national
bank located in South Dakota may charge is 7% per annum. . . . Target
charged the Plaintiff interest in excess of the rate of 7% per annum.
(Id. ¶¶ 7-10 (emphasis added).) Then, crucially, in the claims raised in Plaintiffs’
Complaint, Plaintiff only pursued this theory that Defendant violated the NBA because it
charged in excess of seven percent interest, and not that it violated the NBA because it
charged rates in excess of the rates contracted for by the parties. Specifically, Plaintiffs’
claims read, “Under Section 85 of the NBA, Target may not charge in excess of 7%
interest per annum. However, Target knowingly charged Plaintiff in excess of 7% per
annum. As a result of charging Plaintiff in excess of 7% per annum, [Plaintiff is entitled
to damages under the NBA].” (Id. ¶¶ 18-19; see also id. ¶¶ 21-22.)
In her Response to Defendant’s Motion to Dismiss, Plaintiff made clear that her
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claims were based only on the theory that, given the interplay between the NBA and
South Dakota usury law, the NBA, and not South Dakota law, applies in this case.
Specifically, the Introduction of Plaintiff’s Response to Defendant’s Motion to Dismiss
clearly states,
[T]his case comes down to a discrete legal question which is a
matter of first impression in the 10th Circuit. Namely, did South Dakota
“fix” an interest rate for purposes of usury under the NBA? The simple
answer is “no.” As a result, the Defendant is limited to charging the
federal ceiling of 7% interest per annum under the NBA. Since Target
knowingly charged interest in excess of 7%, it committed usury.
This issue is of critical importance to the current state of affairs in
our nation. The National Banks have done an end run around the usury
protections of the NBA. The banks have bootstrapped two Supreme Court
cases together, obtained the complicity of several States, most notably
South Dakota, in an attempt to deregulate the main product of the National
Banks – the loaning of money and the charging of interest. . . .
Contrary to the assertions of Target, the NBA does not allow a
State to abolish interest rate restrictions.
(ECF No. 17, at 2.) In the body of her Response, Plaintiff went on to provide lengthy
argument regarding the history of usury law dating back to Biblical times (id. at 5-8), and
the legislative history of the NBA (id. at 8-11). Plaintiff also defended a strained reading
of Supreme Court jurisprudence (id. at 11-13), and provided a description of South
Dakota usury law (id. at 13-15). For reasons known only to Plaintiff, at no point in the
Response did she present any argument regarding Defendant’s alleged charging of
interest rates that exceeded the rates agreed upon in the parties’ contract. Finally, in
the Conclusion of the Response, Plaintiff again clarified that her claims only related to
how the NBA and South Dakota usury law should be reconciled, to wit,
VIII. Conclusion.
South Dakota has exceeded its limited authority under the NBA by
abolishing usury and allowing the National Banks to charge unlimited
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interest. Congress intended to have strong usury protections in the NBA. .
..
Thus, South Dakota has failed to fix a maximum usury rate as
required by the NBA . . . . Since it has failed to fix a maximum usury rate,
. . . the National Banks located in South Dakota are limited to charging no
more than 7% interest per annum. Since Target has charged in excess of
7%, it has violated the NBA and has committed usury.
Given the above, the Plaintiff has stated a claim which is plausible
on its face, and Defendant Target’s Motion to Dismiss should be DENIED.
(Id. at 15.)
Finally, Plaintiff notably did not argue in her Response that, alternatively, she
should be allowed leave to amend her Complaint to further clarify her claims.
Plaintiff’s current Motion blames the Court for failing to address an “aspect” of the
case brought by Plaintiff in this action. That blame is wholly misplaced, as it
appropriately lies entirely with Plaintiff and her counsel. See Grimaldo v. Reno, 189
F.R.D. 617, 619 (D. Colo. 1999) (“In our adversarial system, I am under no obligation to
conduct research to provide the proper support for arguments presented by any party
other than pro se ones . . . .”); United States v. Dunkel, 927 F.2d 955, 956 (7th Cir.1991)
(“Judges are not like pigs, hunting for truffles buried in briefs.”).
III. CONCLUSION
In accordance with the foregoing, Plaintiff’s Motion to Alter or Amend Judgment
Pursuant to Rule 59(e) (ECF No. 29) is DENIED.
Dated this 18th day of October, 2012.
BY THE COURT:

_________________________
William J. Martínez
United States District Judge
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