Bruns v. National Credit Union Admin.

Decision Date25 August 1997
Docket NumberNo. 95-56843,95-56843
Citation122 F.3d 1251
Parties97 Cal. Daily Op. Serv. 6758, 97 Daily Journal D.A.R. 11,005 Robert BRUNS, Plaintiff-Appellant, v. NATIONAL CREDIT UNION ADMINISTRATION; Edward Segeberg; Larry Torres; Henry Garcia; Health Associates Federal Credit Union; Saint Joseph's Health Care Systems; Thomas Porath; Alan Garrett; Ray Daitch; Kevin Sims; Gaynelle Joyce; Mark Headland; Michael Jones; Tina Mycroft; John McMillan; Joseph Randolph; Ronald Budman, and Glenn Kazahaya, Defendants-Appellees.
CourtU.S. Court of Appeals — Ninth Circuit

R.G. Bellows, San Diego, CA, for plaintiff-appellant.

Kristine Blackwood, Assistant United States Attorney, Los Angeles, CA, for defendant-appellee National Credit Union.

Paul F. Schimley, Anderson, McPharlin & Conners, Los Angeles, CA, for defendants-appellees Health Associates, F.C.U., et al.

Appeal from the United States District Court for the Central District of California; Linda H. McLaughlin, District Judge, Presiding. D.C. No. CV-95-00779-LHM.

Before: FLETCHER and PREGERSON, Circuit Judges, and WEXLER, * District Judge.

FLETCHER, Circuit Judge:

Robert Bruns appeals the district court's dismissal of his complaint against his former employer the Health Associates Federal Credit Union ("HAFCU"), its parent organization, officers and directors of HAFCU and its parent, the National Credit Union Administration ("NCUA"), and three NCUA employees. The district court determined that it lacked subject matter jurisdiction over Bruns' claims and that venue was improper. We have jurisdiction under 28 U.S.C. § 1291, and we affirm. However, we remand the case to the district court with instructions to remand certain of Bruns' claims to the state court.

I. FACTS 1

Robert Bruns became HAFCU's CEO on March 1, 1993. His oral employment contract provided that he would be employed for no less than three years, could be terminated for just cause, and would receive a base salary, benefits, and an annual performance bonus of up to $30,000. The oral contract included the implied requirement that HAFCU indemnify Bruns against regulator claims and other actions arising in the course of his employment.

At some point between March and November 1993, Bruns initiated a bond claim on behalf of HAFCU against certain of its officers and directors. In November 1993, HAFCU suspended Bruns without pay. As of January 1, 1994, HAFCU refused to pay for Bruns' insurance and other benefits. On March 24, 1994, HAFCU discharged Bruns. HAFCU also refused to indemnify and defend Bruns against claims the NCUA brought against him.

II. PROCEDURAL HISTORY

On March 20, 1995, Bruns filed a complaint in the U.S. District Court for the Central District of California against HAFCU, HAFCU's parent organization, various HAFCU officers and directors, the NCUA, and three NCUA employees. On March 22, 1994, District Judge McLaughlin issued an order to show cause ("OSC") why the case should not be dismissed for lack of subject matter jurisdiction or for improper venue. Bruns responded to the OSC on March 27, 1995. The government responded on April 11, 1995. On April 12, 1995, the district court dismissed the complaint for lack of subject matter jurisdiction and, in the alternative, for improper venue.

On March 23, 1995, the day after the district court issued its OSC, Bruns filed an identical complaint in state court. On August 23, 1995, the NCUA removed the case to federal district court, where it was eventually reassigned to Judge McLaughlin. On September 15, 1995, the district court again ordered Bruns to show cause why the case should not be dismissed. After Bruns, the government, and HAFCU responded, the court again dismissed the action. As in the first dismissal, the district court found subject matter jurisdiction lacking and, alternatively, that venue was improper.

On October 6, 1995, the district court entered judgment dismissing Bruns' claims without prejudice. Despite Bruns' requests in his response to the OSC and after the judgment issued, the district court did not remand Bruns' claims against the non-federal defendants (all defendants other than NCUA and its employees) to the state court. Bruns timely appealed.

III. STANDARD OF REVIEW

We review de novo the district court's dismissal for lack of subject matter jurisdiction. Wilson v. A.H. Belo Corp., 87 F.3d 393, 396 (9th Cir.1996); Nike, Inc. v. Comercial Iberica de Exclusivas Deportivas, S.A., 20 F.3d 987, 990 (9th Cir.1994). We review for an abuse of discretion the district court's dismissal based on improper venue. King v. Russell, 963 F.2d 1301, 1304 (9th Cir.1992). We have not articulated previously a standard of review for a district court's failure to remand as required by 28 U.S.C. § 1447(c). However, where a statute divests the district court of discretion, our review is not limited to whether the district court abused its discretion. See Purcell v. United States, 1 F.3d 932, 943 (9th Cir.1993); Twin City Sportservice, Inc. v. Charles O. Finley & Co., Inc., 676 F.2d 1291, 1310 (9th Cir.1982).

IV. DISCUSSION

In his responses to the district court's OSCs and in his appellate brief, Bruns has offered varying descriptions of his claims and the purported bases on which those claims support federal jurisdiction. However, Bruns' complaint does not allege facts supporting federal jurisdiction under any of the bases on which he now relies.

A. CLAIMS AGAINST THE NCUA

Bruns' complaint alleges that the NCUA conspired with the other defendants "to suspend and constructively terminate" him. The complaint alleges that, in furtherance of this conspiracy, the NCUA caused other HAFCU directors to resign, caused co-conspirators to be elected to the HAFCU board, and caused the board to suspend and terminate Bruns. These acts "were in violation of the provisions of HAFCU By-Laws and applicable statutes." The conspiracy was retaliatory against Bruns and violated his civil rights. Bruns also alleges that the NCUA wrongfully terminated him in retaliation for pursuing a bond claim and tortiously interfered with his employment contract with HAFCU, causing him severe emotional distress. The complaint does not state the legal foundation for these latter causes of action.

In his response to the district court's first OSC, Bruns explained that "this action arises under the Fifth Amendment to the Constitution of the United States and under 12 USC [sic] Sections 1789(a)(27) and 1790b(b)." In responding to the second OSC, Bruns directed the district court's attention to his prior response. Bruns now claims that the "applicable statutes" under which he is suing the NCUA are 12 U.S.C. §§ 1786, 1789(a)(27), and 1790b(b), and 42 U.S.C. § 1986. 2

1. The FCUA

Bruns argues that the "applicable statutes" to which he refers in paragraphs 9 and 30 of the complaint include 12 U.S.C. §§ 1789(a)(2), 1790b(b), and 1786. Section 1789(a)(2) contains the NCUA's "sue and be sued" clause. Section 1790b(b) provides protection to "whistleblowers." Section 1786 establishes procedures for the NCUA's removal of a credit union officer or employee. Bruns has no claim against the NCUA under any of these provisions.

Section 1789(a)(2)

The FCUA provides that the NCUA may

sue and be sued, complain and defend, in any court of law or equity, State or Federal. All suits of a civil nature at common law or in equity to which the Board shall be a party shall be deemed to arise under the laws of the United States, and the United States district courts shall have original jurisdiction thereof, without regard to the amount in controversy.

12 U.S.C. § 1789(a)(2). The government removed Bruns' state court action to the district court under this section.

However, the FCUA's "sue and be sued" clause is constrained by the Federal Tort Claims Act ("FTCA"), which provides the exclusive remedy for suits against a federal agency based on claims which are "cognizable" under 28 U.S.C. § 1346(b). See 28 U.S.C. § 2679(a). Section 1346(b) grants the federal courts jurisdiction over claims

against the United States, for money damages, ... for injury or loss of property, or personal injury or death caused by the negligent or wrongful act or omission of any employee of the Government while acting within the scope of his office or employment, under circumstances where the United States, if a private person, would be liable to the claimant in accordance with the law of the place where the act or omission occurred.

28 U.S.C. § 1346(b)(1). Bruns seeks money damages for wrongful acts by the NCUA and its employees which allegedly resulted in loss of property (his job and benefits) and personal injury (emotional distress); Bruns does not allege that the NCUA or its employees acted outside the scope of their authority. His tort claims therefore are cognizable under section 1346(b), and the FTCA provides Bruns' exclusive avenue for pursuing those claims against the NCUA.

Bruns has not exhausted his administrative remedies, a jurisdictional prerequisite to an FTCA suit in federal court. See 28 U.S.C. § 2675(a); Meridian Int'l Logistics, Inc. v. United States, 939 F.2d 740, 743 (9th Cir.1991). The FTCA therefore does not provide a jurisdictional basis for Bruns' claims against the NCUA. 3

Section 1790b(b)

The FCUA protects credit union employees against discrimination or discharge "because the employee ... provided information to the [NCUA] Board or the Attorney General regarding any possible violation of any law or regulation by the credit union or any director, officer, or employee of the credit union." 12 U.S.C. § 1790b(a). "Any employee or former employee who believes he has been discharged ... in violation of subsection (a) ... may file a civil action in the appropriate United States district court." Id. § 1790b(b). Bruns claims he was suspended and terminated in retaliation for pursuing a bond claim against certain HAFCU officers and directors. However,...

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