Ekstrom v. Cong. Bank

• Decision Date: 13 January 2021
• Docket Number: Civil Action No. ELH-20-1501
• Parties: TIMOTHY EKSTROM, et al., Plaintiffs, v. CONGRESSIONAL BANK, SUCCESSOR-BY-MERGER TO AMERICAN BANK Defendant.
• Court: U.S. District Court — District of Maryland

TIMOTHY EKSTROM, et al., Plaintiffs, v. CONGRESSIONAL BANK, SUCCESSOR-BY-MERGER TO AMERICAN BANK Defendant.

Civil Action No. ELH-20-1501

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND

January 13, 2021

MEMORANDUM OPINION

This putative class action concerns an alleged kickback scheme between American Bank ("American" or "American Bank") and All Star Title, Inc. ("All Star"), a Maryland based title and settlement services company. Plaintiffs Timothy Ekstrom and Davida Carnahan, who are mortgagors, have sued Congressional Bank ("Congressional"), American Bank's successor-by-merger in a suit consisting of more than 50 pages with 24 exhibits. ECF 1 (the "Complaint"). Plaintiffs allege that the kickback scheme violated the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. § 2601, and the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1962.

Congressional moved to dismiss the Complaint pursuant to Fed. R. Civ. P. 12(b)(6) and 9(b). ECF 14. It argued that plaintiffs' claims are time-barred because the alleged violations occurred in 2010 and plaintiffs did not set forth facts sufficient to toll the statute of limitations under a theory of fraudulent concealment. ECF 14-1 at 7-18. Further, defendant urged dismissal of plaintiffs' RICO claim, arguing that plaintiffs did not allege a RICO enterprise, a pattern of racketeering, or a proximate injury. Id. at 18-30.

By Memorandum Opinion (ECF 19) and Order (ECF 20) of November 9, 2020, I denied defendant's motion to dismiss. I determined that defendant was not entitled to dismissal based on limitations because plaintiffs set forth sufficient allegations of fraudulent concealment and equitable tolling. In addition, I concluded that plaintiffs adequately stated a RICO claim.

Thereafter, Congressional filed a "Motion to Certify Discretionary Appeal and to Stay Litigation," pursuant to 28 U.S.C. § 1292(b). ECF 22. The motion is supported by a memorandum of law. ECF 22-1 (collectively, the "Motion"). In seeking an interlocutory appeal, Congressional argues that there are "four controlling questions of law" at issue, for which "there is substantial ground for difference of opinion . . . ." ECF 22-1 at 4. In its view, "an immediate appeal may materially advance the ultimate termination of this litigation." Id. at 4-5. Plaintiffs oppose the Motion. ECF 23. Defendant has replied. ECF 24.

No hearing is necessary to resolve the Motion. See Local Rule 105.6. For the reasons that follow, I shall deny the Motion.

I. LEGAL STANDARD

Under 28 U.S.C. § 1291, the federal courts of appeals "have jurisdiction of appeals from all final decisions of the district courts of the United States . . . ." Interlocutory appeals, governed by 28 U.S.C. § 1292, are an exception to the grant of jurisdiction to appellate courts to hear appeals only from "final decisions" of district courts. Johnson v. Jones, 515 U.S. 304, 309 (1995); see Lynn v. Monarch Recovery Mgmt., Inc., 953 F. Supp. 2d 612, 626 (D. Md. 2013).

Section 1292 of 28 U.S.C., titled "Interlocutory Decisions," provides, in part:

(b) When a district judge, in making in a civil action an order not otherwise appealable under this section, shall be of the opinion that such order involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation, [s]he shall so state in writing in such order. The Court of Appeals which would have jurisdiction of an appeal of suchaction may thereupon, in its discretion, permit an appeal to be taken from such order, if application is made to it within ten days after the entry of the order: Provided, however, That application for an appeal hereunder shall not stay proceedings in the district court unless the district judge or the Court of Appeals or a judge thereof shall so order.

In Johnson, 515 U.S. at 309, the Supreme Court explained the rationale for circumscribing the availability of interlocutory appeals:

An interlocutory appeal can make it more difficult for trial judges to do their basic job—supervising trial proceedings. It can threaten those proceedings with delay, adding costs and diminishing coherence. It also risks additional, and unnecessary, appellate court work either when it presents appellate courts with less developed records or when it brings them appeals that, had the trial simply proceeded, would have turned out to be unnecessary.

"A party seeking review of a nonfinal order must first obtain the consent of the trial judge." Coopers & Lybrand v. Livesay, 437 U.S. 463, 474 (1978); see Boyd v. Coventry Health Care Inc., 828 F. Supp. 2d 809, 820 (D. Md. 2011). As reflected in 28 U.S.C. § 1292(b), a trial judge may certify an interlocutory order for appeal if the party seeking the appeal shows that (1) the desired appeal "involves a controlling question of law"; (2) "there is substantial ground for difference of opinion"; and (3) "an immediate appeal from the order may materially advance the ultimate termination of the litigation."

The party moving for certification of an interlocutory order "bears the burden of proving that the prospective appeal satisfies each of the statutory prerequisites for certification." Boyd, 828 F. Supp. 2d at 820. "Failing to meet even one of the statutory requirements will defeat a litigant's request for an interlocutory appeal." District of Columbia v. Trump, 344 F. Supp. 3d 828, 833 (D. Md. 2018); Butler v. DirectSAT USA, LLC, 307 F.R.D. 445, 452 (D. Md. 2015) ("Unless all of the statutory criteria are satisfied... 'the district court may not and should not certify its order...under section 1292(b).'") (internal citation omitted).

Notably, an "interlocutory appeal under § 1292(b) is the exception, not the rule." Coal. For Equity & Excellence In Maryland Higher Educ. v. Maryland Higher Educ. Comm'n, No. CCB-06-2773, 2015 WL 4040425, at *2 (D. Md. June 29, 2015). Accordingly, certification under § 1292(b) is granted "sparingly" and the statute's requirements must be "strictly construed." United States ex rel. Michaels v. Agape Senior Cmty., Inc., 848 F.3d 330, 340 (4th Cir. 2017) (quoting Myles v. Laffitte, 881 F.2d 125, 127 (4th Cir. 1989)); see James v. Jacobson, 6 F.3d 233, 237 (4th Cir. 1993) (Piecemeal interlocutory appeals should be "avoided" because review of non-final judgments is "effectively and more efficiently reviewed together in one appeal" at the end of litigation.); Clark v. Bank of America, N.A., SAG-18-3672, 2020 WL 3868990, at *2 (D. Md. July 9, 2020) ("Interlocutory appeal should not be sought to provide early review of difficult rulings in hard cases."). And, as the Fourth Circuit recently emphasized, district courts have considerable discretion to determine whether the § 1292(b) criteria are met. In re Trump, 958 F.3d 274, 283 (4th Cir. 2020) (en banc), petition for cert. filed, No. 20-331 (U.S. Sept. 14, 2020) (citing Swint v. Chambers Cty. Comm'n, 514 U.S. 35, 46 (1995)).

The first element, a controlling question of law, is defined by the Fourth Circuit as a "pure question of law," that is, "an abstract legal issue that the court of appeals can decide quickly and cleanly." Agape Senior Cmty, Inc., 848 F.3d at 340 (quoting Mamani v. Berzain, 825 F.3d 1304, 1312 (11th Cir. 2016)). A pure question of law does not require the appellate court "to delve beyond the surface of the record in order to determine the facts." Agape Senior Cmty, Inc., 848 F.3d at 341 (quoting McFarlin v. Conseco Servs., LLC, 381 F.3d 1251, 1259 (11th Cir. 2004)). In contrast, a question is not a controlling question of law where the appellate court is asked to consider "whether the district court properly applied settled law to the facts or evidence of a particular case." Agape Senior Cmty, Inc., 848 F.3d at 341 (quoting McFarlin, 381 F.3d at1259); see also International Refugee Assistance Project ("IRAP") v. Trump, 404 F. Supp. 3d 946, 950 (D. Md. 2019).

For purposes of the second element of § 1292(b), courts find substantial grounds for difference of opinion "where the circuits are in dispute on the question and the court of appeals of the circuit has not spoken on the point, if complicated questions arise under foreign law, or if novel and difficult questions of first impression are presented." Couch v. Telescope Inc., 611 F.3d 629, 633 (9th Cir. 2010); see also Bush v. Adams, 629 F. Supp. 2d 468, 478 (E.D. Pa. 2009) (stating that this element is met "when there is genuine doubt or conflicting precedent as to the correct legal standard applied in the orders at issue").

However, the "mere presence of a disputed issue that is a question of first impression, standing alone, is insufficient." Lynn, 953 F. Supp. 2d at 624 (quoting In re Flor, 79 F.3d 281, 284 (2d Cir. 1996)). Moreover, lack of unanimity among courts and lack of relevant authority do not suffice. See Union County v. Piper Jaffray & Co., Inc., 525 F.3d 643, 647 (8th Cir. 2008); North Carolina ex rel. Howes v. W.R. Peele, Sr. Trust, 889 F. Supp. 849, 852 (E.D.N.C. 1995). Similarly, "a party's disagreement with the decision of the district court, no matter how strong, does not create substantial grounds." IRAP, 404 F. Supp. 3d at 950. In addition, "[t]hat settled law might be applied differently does not establish a substantial ground for difference of opinion." Couch, 611 F.3d at 633 (citing Bush v. Adams, 629 F. Supp. 2d 468, 475 (E.D. Pa. 2009)).

Of import here, "[t]he threshold for establishing the substantial ground for difference of opinion' with respect to a 'controlling question of law' required for certification pursuant to § 1292(b) is a high one." Judicial Watch, Inc. v. Nat'l Energy Policy Dev. Group, 233 F. Supp. 2d 16, 19-20 (D.D.C. 2002). "In other words, for interlocutory appeals, 'it matters not whether thelower court simply got the law wrong,' but 'whether courts themselves disagree as to what the law is.'" In re...