Davis et al v. First National Bank of Trenton

Filing 46

ORDER ADOPTING REPORT AND RECOMMENDATIONS for 11 Motion to Dismiss, filed by First National Bank of Trenton, 29 Report and Recommendations. Defendants Motion to Dismiss [Doc. #11] is DENIED. Signed by Judge Ron Clark on 3/22/13. (cm, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION
RICHARD DAVIS and BLIND
AMBITIONS, individually and on behalf
of all others similarly situated,
Plaintiffs,
V.
FIRST NATIONAL BANK OF
TRENTON,

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CASE NO. 4:12cv396
Judge Clark/Judge Mazzant

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Defendant.

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ORDER ADOPTING REPORT AND
RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE
The United States Magistrate Judge to whom this matter had been referred pursuant to 28
U.S.C. § 636 issued his first Report and Recommendation containing proposed findings and a
recommendation that defendant’s Motion to Dismiss [Doc. #11] be granted [Doc. #22]. Plaintiffs
filed a motion to reconsider [Doc. #23], and later file objections. [Doc. #27] Defendant responded
to both pleadings. [Doc. #24 & Doc. #28].
The Magistrate Judge reviewed its first report and recommendation issued an amended
report and recommendation, recommending that Defendant’s Motion to Dismiss should be denied
in its entirety [Doc. #29). The Magistrate Judge did not withdraw the first report. The parties then
indulged in a veritable orgy of briefing. [ Doc. # 31, #32, #34, & # 40].
In the first report, the Magistrate Judge concluded that plaintiffs’ amended complaint
alleged sufficient facts to establish standing with respect to the individual ATM visited by plaintiff
Richard Davis. However, the Magistrate Judge concluded that because Plaintiff Davis had not

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personally visited any of the other ATMs in defendant’s network that are being challenged by
plaintiffs, he had not sufficiently alleged an injury in fact with respect to those other ATMs, and
therefore recommended that defendant’s Motion to Dismiss be granted. After considering the
briefing filed in response to the first report, the Magistrate Judge issued an amended report, which
recommended that defendant’s Motion to Dismiss be denied in its entirety. The amended report
concluded that plaintiff Davis possessed standing with respect to the Subject ATM. The amended
report also recognized that the question of whether plaintiffs can challenge the entirety of
defendant’s ATM network is determined by an application of Rule 23, not a constitutional standing
analysis.
Defendant spends its first 9 pages of objections attacking the Magistrate Judge’s issuance of
an amended report. The court finds that these objections border on the frivolous. Defendant first
objects that the amended report was not authorized by statute, the Federal Rules of Civil Procedure,
or the local rules. Defendant takes the position that the first report must stand as the Magistrate
Judge’s final recommendation. This argument is misplaced
The Magistrate Judge’s Report contains a recommendation, not the edict of a Babylonian
king, whose edict, once written may never be changed. This court has referred this case for all
pretrial purposes, and did not refer only this motion to dismiss to the Magistrate Judge. As part of
his handling this case for all pretrial purposes the Magistrate Judge has the authority to manage this
case, withdraw a report or issue an amended report. If the Magistrate Judge finds merit in an
objection or in a motion to reconsider why should the matter be sent to the District court without
correction. Defendant’s objection that the Magistrate Judge erred by issuing an amended report is
overruled.

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Defendant also asserts that the objections of plaintiffs to the first report were not timely. The
first report was issued on November 14, 2012, making the objections due on December 3, 2012.
Plaintiffs filed a motion to reconsider on November 19, 2012. The Magistrate Judge and this court
may treat theses as objections, despite the fact that plaintiffs, called the pleading a motion to
reconsider. If the court treats the motion to reconsider as objections, there is no question that the
objections were timely filed.
Alternatively, plaintiffs then filed objections on November 30, 2012, which were timely.
Defendant asserts that these objections were not timely because the objections were not filed within
fourteen days, or by defendant’s calculated deadline of November 28, 2012. Defendant argues that
plaintiffs are not allowed to add the three additional days permitted by Local Rule CV-6, because
Local Rule CV-6 states that “this three-day extension applies only to responses due within a certain
time after service of a preceding document.” This argument lacks any merit. Federal Rule Civil
Procedure 6(d) allows for the additional three days to be added. Local Rule CV-6 would also allow
the additional three days to be added to the time for objections. Defendant’s reading of the local rule
is nonsensical. Defendant argues that the objections do not constitute a response to any matter as
the term is used in Local Rule CV-6. Defendant reads the local rule too narrowly. The first report
of the Magistrate Judge qualifies as the preceding document that would be served on the parties
under this rule. The response, which is used in a generic sense and not in the literal sense of a
“response to a motion,” would be the objections. The objections to the first report were due on
December 3, 2012. Thus, plaintiffs’ objections to the first report of the Magistrate Judge were filed
on November 30, 2012, and these objections were timely.

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Defendant next objects to the Magistrate Judge’s issuance of an amended report, asserting
that this process conflicts with the Fifth Circuit’s en banc decision in Douglass v. United Services
Auto. Ass’n, 79 F.3d 1415, 1421, 1429 (5th Cir. 1996). Defendant argues that the holding in this
case is that the “failure to file timely objections to the Magistrate Judge’s report and recommendation
preserves only plain error.” Defendant argues that “permitting the insertion of a motion to reconsider
before the Magistrate Judge into the process for review of a case-dispositive motion would be
contrary to the holding and rationale discussed” by the Fifth Circuit. Defendant asks the court to
base its decision on the first report and conduct only a plain error review. Even if the objections
were not timely filed, which they were in this case, defendant’s reliance on this case is again without
merit and has no basis in law or fact.
The Fifth Circuit determined as follows:
Therefore, we overrule the appellate forfeiture rule applied by Nettles and its progeny, and
hold that a party's failure to file written objections to the proposed findings, conclusions, and
recommendation in a magistrate judge's report and recommendation within 10 days after
being served with a copy shall bar that party, except upon grounds of plain error, from
attacking on appeal the unobjected-to proposed factual findings and legal conclusions
accepted by the district court, provided that the party has been served with notice that such
consequences will result from a failure to object.
Douglass, 79 F.3d at 1428-29 (emphasis added). Defendant’s entire analysis omits any reference
that the Fifth Circuit requires the district judge to accept the findings of the Magistrate Judge before
there is an appeal to that court. In this case, the court never accepted the findings of the first report.
Moreover, the court has discretion to accept, adopt, reject, or modify any report of a Magistrate
Judge even in situations where no objections are filed.

Douglass, 79 F.3d at 1429, n.17. In

addition, Douglass addresses the appellate standard of review if a report is accepted and no
objections are timely filed. The present case is not on appeal.

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The court finds no error in the actions of the Magistrate Judge with respect to the procedures
followed in this case. The Magistrate Judge determined that this was a close case and, upon
reconsideration, rejected the first report and then issued an amended report. The court agrees with
the Magistrate Judge’s rejection of the first report and joins in that decision. The first report is hereby
REJECTED. The only report remaining to be considered by this court is the amended report.
Having wasted the court’s time addressing the frivolous procedural objections, the court
turns to defendant’s substantive objections. Defendant objects that the Magistrate Judge failed to
conduct the proper level of review in addressing the motion with regard to the lack of subject matter
jurisdiction. This argument, like the others, is misplaced. Defendant made a facial challenge to the
court’s subject matter jurisdiction and not a factual challenge. There was no evidence submitted by
any party that challenged the standing of plaintiff Davis. Thus, with respect to plaintiff Davis, it is
beyond dispute that defendant’s challenge to jurisdiction is facial, not factual. With regard to
plaintiff Blind Ambitions, the only evidence that was offered was information related to Blind
Ambitions’ tax status in the State of Texas and a copy of Blind Ambitions’ website.

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defendant did not submit any evidence that calls Blind Ambitions’ standing into question, defendant
cannot argue that its challenge to jurisdiction is factual. The Magistrate Judge applied the proper
standard to reviewing this issue.
Defendant next objects that the court lacks subject matter jurisdiction. Defendant fails to
point out how the Magistrate Judge erred in the amended report and merely recites the same
arguments considered in the original briefing. The first report and amended report found that
plaintiff Davis has standing with respect to the Subject ATM. The amended report determined that
the question of whether plaintiffs can challenge the entirety of defendant’s ATM network should be

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determined by an application of Rule 23, not a constitutional standing analysis. The court finds no
error in this approach, especially considering the lack of clarity in the case law. The court finds that
the Magistrate Judge properly considered the issue.
Having received the amended report of the United States Magistrate Judge, and considering
the objections thereto filed by defendant [Doc. #31], as well as all other relevant pleadings, this court
is of the opinion that the findings and conclusions of the Magistrate Judge are correct and adopts the
Magistrate Judge’s report as the findings and conclusions of the court.
It is, therefore, ORDERED that defendant’s Motion to Dismiss [Doc. #11] is DENIED.
So ORDERED and SIGNED this 22 day of March, 2013.

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Ron Clark, United States District Judge

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