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Mary A. Nelson Rogers v. Ps Fdic As Receiver For Downey Savings and Loan

June 14, 2011


The opinion of the court was delivered by: Gregory G. Hollows United States Magistrate Judge


Presently pending before the court is defendant FDIC as Receiver for Downey Savings and Loan's*fn1 ("FDIC") amended motion to dismiss and amended motion to strike, filed April 5, 2011 and May 2, 2011 respectively, as well as plaintiff's motion for protective order, filed April 21, 2011.*fn2 Also pending on this court's law and motion calendar for June 23, 2011 is defendant's motion to compel, filed May 26, 2011. For the reasons stated herein, the discovery motions should be rendered moot by the court's findings, and will be vacated from the calendar pending the district court's adoption of the instant findings and recommendations.


Plaintiff brought suit against State Farm Insurance Company and Downey Savings and Loan in state court on account of her home which was damaged by fire in 2003 which ultimately led to foreclosure of plaintiff's interest. Plaintiff's home was insured by State Farm, and Downey Savings and Loan was the mortgagee on the home. After FDIC took over as Receiver for Downey, it removed the action to this court on February 11, 2009. State Farm was dismissed by the court on October 29, 2009 which found the claims against that entity to be time barred. (Dkt. #35.) The only claim remaining in the case is against the FDIC as Receiver for Downey Savings and Loan, for breach of contract for wrongful foreclosure. (FAC, ¶ ¶ 97-102.) Plaintiff seeks damages only.



On a Rule12(b)(1) motion to dismiss for lack of subject matter jurisdiction, plaintiff bears the burden of proof that jurisdiction exists. See, e.g., Sopcak v. Northern Mountain Helicopter Serv., 52 F.3d 817, 818 (9th Cir.1995); Thornhill Pub. Co. v. General Tel. & Electronics Corp., 594 F.2d 730, 733 (9th Cir. 1979). Different standards apply to a 12(b)(1) motion, depending on the manner in which it is made. See, e.g., Crisp v. U.S., 966 F. Supp. 970, 971-72 (E.D. Cal. 1997).

First, if the motion attacks the complaint on its face, often referred to as a "facial attack," the court considers the complaint's allegations to be true, and plaintiff enjoys "safeguards akin to those applied when a Rule 12(b)(6) motion is made." Doe v. Schachter, 804 F. Supp. 53, 56 (N.D. Cal. 1992). Presuming its factual allegations to be true, the complaint must demonstrate that the court has either diversity jurisdiction or federal question jurisdiction. For diversity jurisdiction pursuant to 28 U.S.C. § 1332, plaintiff and defendants must be residents of different states. For federal question jurisdiction pursuant to 28 U.S.C. § 1331, the complaint must either (1) arise under a federal law or the United States Constitution, (2) allege a "case or controversy" within the meaning of Article III, § 2, or (3) be authorized by a jurisdiction statute. Baker v. Carr, 369 U.S. 186, 198, 82 S. Ct. 691, 699-700, 7 L. Ed. 2d 663 (1962).

Second, if the motion makes a "factual attack" on subject matter jurisdiction, often referred to as a "speaking motion," the court does not presume the factual allegations of the complaint to be true. Thornhill, 594 F.2d at 733. In a factual attack, defendant challenges the truth of the jurisdictional facts underlying the complaint. "Faced with a factual attack on subject matter jurisdiction, the trial court may proceed as it never could under Rule 12(b)(6). . . . No presumptive truthfulness attaches to plaintiff's allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims." Id. (quotations and citation omitted). The court may hear evidence such as declarations or testimony to resolve factual disputes. Id.; McCarthy v. United States, 850 F.2d 558, 560 (9th Cir. 1988).*fn3


The FDIC first argues that the action must be dismissed because there is no case or controversy.*fn4 This is the more common (and preferable) way to address the issue here. In every case, in order to demonstrate standing, plaintiff must show, inter alia, that whatever injury has been suffered, it will likely be redressed by a favorable decision. Wolfson v. Brammer, 616 F.3d 1045, 1056 (9th Cir. 2010); Heinrichs v. Valley View Development, 474 F.3d 609, 615 (9th Cir. 2007). As plaintiff would be a general unsecured creditor if she prevailed, and would not be able to recover any damages, see below, she would lack standing.

Alternatively, FDIC urges that the doctrine of prudential mootness renders plaintiff's claim moot.

Under the doctrine of prudential mootness, there are circumstances under which a controversy, not constitutionally moot, is so 'attenuated that considerations of prudence and comity for coordinate branches of government counsel the court to stay its hand, and to withhold relief it has the power to grant.' " Fletcher v. United States, 116 F.3d 1315, 1321 (10th Cir.1997) (internal citation omitted). "Where it is so unlikely that the court's grant of [remedy] will actually relieve the injury, the doctrine of prudential mootness-a facet of equity-comes into play. This concept is concerned, not with the court's power under ...

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