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Boyd v. United States

United States District Court, N.D. California, San Jose Division

March 27, 2017

MICHAEL E BOYD, Plaintiff,
UNITED STATES, et al., Defendants.


          BETH LABSON FREEMAN United States District Judge.

         This action arises out of foreclosure proceedings initiated after Plaintiff Michael Boyd (“Boyd”) defaulted on two loans secured by two properties, one in Soquel, California and one in Sunnyvale, California. Pending before the Court are motions to dismiss filed by Defendants Governor Jerry Brown (“Governor Brown”), Director of Finance Michael Cohen (“Director Cohen”), Attorney General Kamala Harris (“Attorney General Harris”), State Controller Betty Yee (“Controller Yee”), and the United States. Boyd has also requested a notice of lis pendens in this action. ECF 115. For the reasons stated herein, the Court GRANTS each motion to dismiss and DENIES the request for notice of lis pendens.

         I. BACKGROUND

         To provide background in this case, the following facts are taken from Boyd's initially filed complaint and the first amended complaint. However, the instant motions are evaluated based solely on Verified Amended First Amended Complaint (“AFAC”), the operative complaint in this case.

         In 2006, Boyd obtained loans secured by mortgages on a property located on Lakebird Drive in Sunnyvale, California and another property located on Soquel Drive in Soquel, California (the “Properties”). Compl. ¶ 9, ECF 1; AFAC ¶ 77, ECF 93. At some point thereafter, Boyd defaulted on the two loans, leading to recording of notices of default and initiation of foreclosure proceedings. Compl. ¶ 10. GMAC, a defendant named in Boyd's initial complaint but no longer named in the AFAC, serviced the loans until servicing was transferred to Ocwen Loan Servicing LLC. Id. ¶¶ 5, 9.

         Around this time period, the United States and forty-nine states sued several mortgage loan servicers in the U.S. District Court for the District of Columbia in March 2012. Ex. 1 to Compl. 93, ECF 1-1; AFAC ¶¶ 9, 10. The suit was resolved through a settlement agreement known as the “National Mortgage Settlement.” AFAC ¶¶ 10-13, 27. According to Boyd, pursuant to this settlement, the mortgage loan servicers agreed to pay approximately $5 billion and institute various reforms. Id. ¶ 12. The State of California received approximately $410 million from the settlement and placed its share of the settlement funds into the National Mortgage Special Deposit Fund. Id. ¶¶ 12-13.

         In 2014, some community groups filed a petition for writ of mandate in the Sacramento County Superior Court alleging that California's portion of the settlement had been improperly diverted from the Special Deposit Fund and used for purposes not allowed by the terms of the consent judgment. Id. ¶¶ 3, 10, 13. The Sacramento Court agreed and found that approximately $331 million had been unlawfully diverted from the Special Deposit Fund to the State of California's General Fund. Id. ¶¶ 10, 13, 76.

         Based on these lawsuits, Boyd alleges that United States and California state government defendants “victimized” loan borrowers “in concert with GMAC.” Id. ¶¶ 3, 9. Boyd also alleges that he owns the Properties in fee simple based on theories involving a third-party beneficiary relationship and the federal land patent proceeding of 1851. Id. ¶¶ 5, 6, 16-18, 30.

         On July 29, 2015, Boyd filed the instant action against United States Department of the Treasury, Treasury Secretary Jack Lew, Governor Edmund G. Brown, Jr., Attorney General Kamala D. Harris, Department of Finance Director Michael Cohen, State Controller Betty Yee, GMAC Mortgage LLC, and Mortgage Electronic Registration Systems. Compl. On August 3, 2015, Boyd voluntarily dismissed GMAC Mortgage LLC and Mortgage Electronic Registration Systems. ECF 3. On August 15, 2016, this Court granted Defendants' motions to dismiss with leave to amend. The grounds for dismissal included lack of Article III standing, Eleventh Amendment immunity, sovereign immunity, and insufficiency of the allegations to state a claim, and Boyd was allowed to substitute United States as a defendant in place of United States Treasury and Jack Lew. ECF 76. Boyd subsequently moved for leave to amend to add “Quiet Title” as an additional cause of action, which this Court granted. ECF 81, 90. Boyd then filed the AFAC on November 1, 2017, which Defendants now move to dismiss.


         A. Rule 12(b)(1)

         A motion to dismiss under Rule 12(b)(1) challenges whether a court has subject matter jurisdiction to hear the action. In deciding a Rule 12(b)(1) motion, the court is not restricted to the pleadings, but can also “review any evidence, such as affidavits and testimony, to resolve factual disputes regarding the evidence of jurisdiction.” McCarthy v. United States, 850 F.2d 558, 560 (9th Cir. 1988). Once subject matter jurisdiction is challenged, the party opposing the motion bears the burden of establishing jurisdiction. See, e.g., Chandler v. State Farm Mut. Auto Ins. Co., 598 F.2d 1115, 1122 (9th Cir. 2010).

         B. Rule 12(b)(6)

         A motion to dismiss under Rule 12(b)(6) concerns what facts a plaintiff must plead on the face of his claim. Under Rule 8(a)(2) of the Federal Rules of Civil Procedure, a complaint must include “a short and plain statement of the claim showing that the pleader is entitled to relief.” Any complaint that does not meet this requirement can be dismissed pursuant to Rule 12(b)(6). In interpreting Rule 8(a)'s “short and plain statement” requirement, the Supreme Court has held that a plaintiff must plead “enough facts to state a claim to relief that is plausible on its face, ” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007), which requires that “the plaintiff plead factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). This standard does not ask a plaintiff to plead facts that suggest he will probably prevail, but rather “it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. (internal quotation marks omitted). The Court must “accept factual allegations in the complaint as true and construe the pleadings in the light most favorable to the nonmoving party.” Manzarek v. St. Paul Fire & Marine Ins. Co., 519, F.3d 1025, 1031 (9th Cir. 2008).


         A. Controller Yee's ...

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