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Salem v. Federal Deposit Insurance Corp.

United States District Court, S.D. California

April 17, 2017



          Hon. Anthony J. Battaglia United States District Judge.

         Presently before the Court is Plaintiff Christopher Salem's (“Salem”) motion for reconsideration of the Court's order dated December 14, 2016 (“Order”), which granted motions to dismiss filed by Defendants Federal Deposit Insurance Corporation as Receiver for La Jolla Bank, FSB (“FDIC-R”) and the United States of America (“United States”) (collectively, “Defendants”) and denying Salem's motion for leave to file an amended complaint. (Doc. No. 74.) Dedendants oppose the motion. (Doc. Nos. 76, 77.) Having reviewed the parties' legal arguments in light of controlling authority, and pursuant to Local Civil Rule 7.1.d.1, the Court finds the matter suitable for disposition without oral argument. Accordingly, the hearing currently set for May 4, 2017, at 2:00 p.m. is hereby VACATED. For the reasons set forth below, the Court DENIES Salem's motion.


         In its order dismissing Salem's complaint with prejudice and denying him leave to file an amendment, the Court exhaustively summarized this case's factual and procedural background. (Doc. No. 68.) See Salem v. F.D.I.C., No. 15-CV-1114-AJB-BGS, 2016 WL 7229424 (S.D. Cal. Dec. 14, 2016). The Court assumes familiarity with that Order and will accordingly not recite the facts here. In short, this lawsuit is predicated on purported misconduct of the FDIC-R (and through the FDIC-R's actions, the United States) throughout the foreclosures of Salem's two Hawaii-based properties and subsequent multiple lawsuits stemming from those foreclosures. The FDIC-R, along with other entities whose conduct Salem seeks to impute to the FDIC-R, is alleged to have committed fraud against, made misrepresentations to, and concealed documents from Salem.

         Salem instituted this lawsuit on May 18, 2015. (Doc. No. 1.) After having a prior iteration of the complaint dismissed, Salem filed a third amended complaint (“TAC”) on February 18, 2016. (Doc. No. 37; see Doc. Nos. 5, 6, 32.) In the TAC, Salem asserted the Court has subject matter jurisdiction over this dispute by virtue of the Federal Tort Claims Act (“FTCA”). (Doc. No. 37 ¶ 5.)

         Both Defendants moved to dismiss the TAC on the basis of lack of subject matter jurisdiction and failure to state a claim under Rule 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure.[1] (Doc. Nos. 40, 60.) After the FDIC-R filed its motion to dismiss, but before the United States filed its motion, Salem filed a motion for leave to file a fourth amended complaint (“FAC”). (Doc. No. 58.) The parties fully briefed all three motions. (Doc. Nos. 47, 48, 50, 62-66.)

         After considering the parties' arguments, the Court dismissed Salem's TAC for lack of subject matter jurisdiction. (Doc. No. 68 at 6-10.) The Court concluded it could not entertain Salem's claims against the United States because the FTCA's limited waiver of the United States' sovereign immunity does not extend to claims arising out of misrepresentation, fraud, or deceit. (Id. at 8-9.) The Court further concluded it could not exercise subject matter jurisdiction over the FDIC-R because the FTCA “only allows claims against the United States. . . . [A]n agency itself cannot be sued under the FTCA.” (Id. at 7 (quoting F.D.I.C. v. Craft, 157 F.3d 697, 706 (9th Cir. 1998).) The Court finally concluded permitting Salem to file the FAC would be futile because the proposed amendment failed to cure the deficiencies that served as the basis for the Court's dismissal, notwithstanding having the benefit of the FDIC-R's motion to dismiss on the docket prior to Salem filing his motion for leave to amend. (Id. at 10-13.)

         Legal Standard

         Where the Court's ruling has resulted in a final judgment or order, a motion for reconsideration may be based either on Rule 59(e) (motion to alter or amend judgment) or Rule 60(b) (motion for relief from judgment). See Sch. Dist. No. 1J, Multnomah Cnty. v. ACandS, Inc., 5 F.3d 1255, 1262 (9th Cir. 1993). A motion for reconsideration is treated as a motion to alter or amend a judgment under Rule 59(e) if it is filed within 28 days of entry of judgment; otherwise, it is treated as a Rule 60(b) motion for relief from a judgment or order. See Am. Ironworks & Erectors, Inc. v. N. Am. Constr. Corp., 248 F.3d 892, 898- 99 (9th Cir. 2001).

         Rule 59(e) provides that a court may alter or amend the judgment after the judgment's entry. “[T]he district court enjoys considerable discretion in granting or denying [a Rule 59(e)] motion.” Allstate Ins. Co. v. Herron, 634 F.3d 1101, 1111 (9th Cir. 2011) (quoting McDowell v. Calderon, 197 F.3d 1253, 1255 n.1 (9th Cir. 1999) (en banc) (per curiam)). However, because “the rule offers an extraordinary remedy, [it should] be used sparingly in the interests of finality and conservation of judicial resources.” Kona Enters., Inc. v. Estate of Bishop, 229 F.3d 877, 890 (9th Cir. 2000) (citation and internal quotation marks omitted). As such, a Rule 59(e) motion generally should not be granted absent highly unusual circumstances, 389 Orange St. Partners v. Arnold, 179 F.3d 656, 665 (9th Cir. 1999), such as an intervening change in controlling law, the availability of newly discovered or previously unavailable evidence, or the need to correct an error or prevent a manifest injustice, Allstate Ins. Co., 634 F.3d at 1111; see also McDowell, 197 F.3d at 1255 n.4 (finding no abuse of discretion “merely because the underlying order is erroneous, rather than clearly erroneous”).

         Alternatively, a district judge may provide relief from final judgment under Rule 60(b) if the moving party can show “(1) mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence that, with reasonable diligence, could not have been discovered in time to move for a new trial under Rule 59(b); (3) fraud . . ., misrepresentation, or misconduct by an opposing party; (4) the judgment is void; (5) the judgment has been satisfied, released, or discharged; it is based on an earlier judgment that has been reversed or vacated; or applying it prospectively is no longer equitable; or (6) any other reason that justifies relief.” United Nat'l Ins. Co. v. Spectrum Worldwide, Inc., 555 F.3d 772, 780 (9th Cir. 2009) (quoting Fed. R. Civ. Pro. 60(b)) (alterations in original).

         A Rule 60(b) motion, however, is “not a vehicle to reargue [a] motion or to present evidence which should have been raised before.” United States v. Westlands Water Dist., 134 F.Supp.2d 1111, 1131 (E.D. Cal. 2001) (citation omitted). “A party seeking reconsideration must show more than a disagreement with the Court's decision, and recapitulation of the cases and arguments considered by the court before rendering its original decision fails to carry the moving party's burden.” Id. (citation and internal quotation marks omitted). Ultimately, motions for reconsideration are committed to the district court's discretion. Navajo Nation v. Confederated Tribes & Bands of the Yakama Indian Nation, 331 F.3d 1041, 1046 (9th Cir. 2003).


         Salem makes multiple requests in his motion for reconsideration. First, he asserts the Court's ruling relating to subject matter jurisdiction is incorrect because (1) the FDIC administrative rule codified at 12 U.S.C. § 1821(d)(6)(A)(ii) provides for judicial review of the agency's disallowance of a claim; and (2) the Court erroneously relied on the FDIC-R's “bar date” on his administrative claim to foreclose his right to claim ...

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