Rae v. Union Bank, No. 83-2189

CourtUnited States Courts of Appeals. United States Court of Appeals (9th Circuit)
Writing for the CourtBefore GOODWIN, PREGERSON, and NELSON; PREGERSON
Citation725 F.2d 478
Parties, 1984-1 Trade Cases 65,842 Joseph RAE, et al., Plaintiffs-Appellants, v. UNION BANK, a banking corporation, et al., Defendants-Appellees.
Docket NumberNo. 83-2189
Decision Date06 February 1984

Page 478

725 F.2d 478
74 A.L.R.Fed. 571, 1984-1 Trade Cases 65,842
Joseph RAE, et al., Plaintiffs-Appellants,
v.
UNION BANK, a banking corporation, et al., Defendants-Appellees.
No. 83-2189.
United States Court of Appeals,
Ninth Circuit.
Argued and Submitted Jan. 13, 1984.
Decided Feb. 6, 1984.

Page 479

Terry W. Aron, Tucson, Ariz., for plaintiffs-appellants.

Richard Calvin Cooledge, Brown & Bain, Phoenix, Ariz., for defendants-appellees.

An appeal from the United States District Court for the District of Arizona.

Before GOODWIN, PREGERSON, and NELSON, Circuit Judges.

PREGERSON, Circuit Judge:

After a series of loans, extensions, and modifications, Union Bank foreclosed on certain property of the appellants, Joseph Rae, et al., (Rae). Rae brought suit in federal court against Union Bank and certain of its employees, alleging various contract and tort theories. The court dismissed the complaint for lack of diversity jurisdiction. Rae amended to add federal question claims under the Racketeer Influenced and Corrupt Organizations Act (RICO) and the Bank Holding Company Act. The district court found that the federal claims were wholly insubstantial and frivolous and dismissed them without leave to amend. The court also dismissed the remaining pendent state claims. We affirm.

A ruling on a motion to dismiss for failure to state a claim upon which relief can be granted is a ruling on a question of law, freely reviewable by the court of appeals. Alonzo v. ACF Property Management, Inc., 643 F.2d 578, 579 (9th Cir.1981). A motion to dismiss for failure to state a claim should not be granted unless it appears to a certainty that the plaintiff can prove no set of facts in support of his claims that would entitle him to relief. Conley v.

Page 480

Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-102, 2 L.Ed.2d 80 (1957).

I. The Anti-Tying Claim

A plaintiff must plead and prove three things to recover under the anti-tying provision of the Bank Holding Company Act, 12 U.S.C. Sec. 1972(1). First, the plaintiff must show that the banking practice in question was unusual in the banking industry. Second, the plaintiff must show an anti-competitive tying arrangement. Third, the plaintiff must demonstrate that the practice benefits the bank. Parsons Steel, Inc. v. First Alabama Bank of Montgomery, 679 F.2d 242, 246 (11th Cir.1982).

Here, the anti-tying claim of Rae's complaint alleges only that "Defendants' actions as recited above constituted a tying arrangement prohibited by 12 U.S.C. Section 1972(1)(A) and (C)." Various references to loan conditions and extensions of credit accompanied by provisions designed to protect the bank's security are all that is "recited above." That simply is not enough to state a claim. There is no factual allegation in the complaint that the bank tied a loan to any other product, service, or benefit. Moreover, there is no factual allegation that the bank would benefit in any other way than by getting additional protection for its loans. There is not even an allegation that the banking practice was unusual. Finally, no tying claim can be stated against the individual defendants. Section 1972 does not cover natural persons. See Nesglo, Inc. v. Chase Manhattan Bank, N.A., 506 F.Supp. 254, 265 (D.P.R.1980).

Given the very basic lack of an anti-competitive tie, the district court found that the allegation of additional facts consistent with the complaint could not possibly cure the deficiency. Rae had been given leave to...

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  • California Pharmacy Management v. Zenith Ins., Case No. SACV09-0242 DOC (FMOx).
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Central District of California
    • November 5, 2009
    ...See Mot. at 14 (citing River City Mkts., Inc. v. Fleming Foods West, Inc., 960 F.2d 1458, 1461 (9th Cir.1992); Rae v. Union Bank, 725 F.2d 478, 481 (9th Cir.1984)). While the Court agrees that each Zenith Defendant does not itself constitute an "enterprise," it is not convinced that the hol......
  • Nordic Bank PLC v. Trend Group, Ltd., No. 83 Civ. 9107 (GLG).
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • September 17, 1985
    ...of the provision is to prohibit anti-competitive practices...."), and from opinions construing the BHCA, see, e.g., Rae v. Union Bank, 725 F.2d 478, 480 (9th Cir.1984) ("The plaintiff must show an anti-competitive tying arrangement."). This language notwithstanding, the BHCA does not requir......
  • Rhoades v. Powell, No. CV-F-85-549 REC.
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Eastern District of California
    • September 5, 1986
    ...of enterprise because a RICO defendant cannot also serve as the RICO enterprise. That proposition is correct; in Rae v. Union Bank, 725 F.2d 478, 480 (9th Cir.1984), the Ninth Circuit held that "if defendant is the enterprise, it cannot also be the RICO defendant." See also United States v.......
  • Haroco, Inc. v. American Nat. Bank and Trust Co. of Chicago, No. 83-2529
    • United States
    • United States Courts of Appeals. United States Court of Appeals (7th Circuit)
    • October 19, 1984
    ...of identity of enterprise and person). The Ninth Circuit also recently followed Computer Sciences on the point. Rae v. Union Bank, 725 F.2d 478, 481 (9th 18 We agree with the statement in Hartley concerning a corporation's responsibility for the acts of its agents. 678 F.2d at 988 n. 43. Ho......
  • Request a trial to view additional results
249 cases
  • California Pharmacy Management v. Zenith Ins., Case No. SACV09-0242 DOC (FMOx).
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Central District of California
    • November 5, 2009
    ...See Mot. at 14 (citing River City Mkts., Inc. v. Fleming Foods West, Inc., 960 F.2d 1458, 1461 (9th Cir.1992); Rae v. Union Bank, 725 F.2d 478, 481 (9th Cir.1984)). While the Court agrees that each Zenith Defendant does not itself constitute an "enterprise," it is not convinced that the hol......
  • Nordic Bank PLC v. Trend Group, Ltd., No. 83 Civ. 9107 (GLG).
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • September 17, 1985
    ...of the provision is to prohibit anti-competitive practices...."), and from opinions construing the BHCA, see, e.g., Rae v. Union Bank, 725 F.2d 478, 480 (9th Cir.1984) ("The plaintiff must show an anti-competitive tying arrangement."). This language notwithstanding, the BHCA does not requir......
  • Rhoades v. Powell, No. CV-F-85-549 REC.
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Eastern District of California
    • September 5, 1986
    ...of enterprise because a RICO defendant cannot also serve as the RICO enterprise. That proposition is correct; in Rae v. Union Bank, 725 F.2d 478, 480 (9th Cir.1984), the Ninth Circuit held that "if defendant is the enterprise, it cannot also be the RICO defendant." See also United States v.......
  • Haroco, Inc. v. American Nat. Bank and Trust Co. of Chicago, No. 83-2529
    • United States
    • United States Courts of Appeals. United States Court of Appeals (7th Circuit)
    • October 19, 1984
    ...of identity of enterprise and person). The Ninth Circuit also recently followed Computer Sciences on the point. Rae v. Union Bank, 725 F.2d 478, 481 (9th 18 We agree with the statement in Hartley concerning a corporation's responsibility for the acts of its agents. 678 F.2d at 988 n. 43. Ho......
  • Request a trial to view additional results
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