United States v. Gonzales & Gonzales Bonds & Ins. Agency, Inc., C-09-4029 EMC

CourtUnited States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Northern District of California
Decision Date01 February 2012
Docket NumberNo. C-09-4029 EMC,C-09-4029 EMC


No. C-09-4029 EMC


Dated: February 1, 2012


(Docket No. 100)

Pending before the Court is Plaintiff United States' motion to dismiss Defendant G&G's Amended Counterclaims. Docket No. 100. After considering the parties' submissions and oral argument, the Court hereby enters the following order.


Pursuant to this Court's order of October 14, 2011, Docket No. 90, Defendants G&G and American Surety ("G&G") were given permission to file a First Amended Counterclaim ("FACC") to assert additional bonds in addition to the 6 bonds asserted in its original counterclaim which were not remanded back to agency. Docket No. 94. The FACC contains a total of 34 bonds. In the FACC, Defendants allege that the United States has breached the immigration bond contracts - and acted arbitrarily and capriciously in declaring them breached - by failing to comply with one of 14 requirements included in the contracts pursuant to the Amwest settlement agreements. See FACC ¶ 21. Specifically, paragraph 21 alleges:

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The immigration bond contracts between G&G/ASC and DHS provide, inter alia, the following:

(1) DHS is required to send an I-340 to the Agent and the Surety when the I-352 indicates that both G&G's and ASC's address is to be utilized for notice purposes.
(2) DHS' delay in sending G&G/ASC an I-340 for removal more than ninety (90) days after a final order of removal of the bonded alien excuses the G&G/ASC's obligations under the immigration bond.
(3) DHS' failure to send G&G/ASC a fully completed Amwest Questionnaire including, but not limited to, its failure to attach to the Amwest Questionnaire an I-166 or G-56 form and/or a photograph with every demand (I-340) excuses G&G/ASC's obligations under the immigration bond.
(4) DHS' conduct in notifying the alien of his surrender date in advance of notification to G&G/ASC excuses G&G/ASC's obligations under the immigration bond.
(5) DHS' failure to notify G&G/ASC of an amended OSC/NTA containing additional charges of removal levied against the bonded alien excuses G&G/ASC's obligations under the immigration bond.
(6) G&G/ASC is excused from its obligation to produce a bonded alien for removal when the bonded alien was incarcerated (in-custody) on the date of the demand.
(7) DHS is required to provide G&G/ASC with the right to inspect the bonded alien's "A" File to determine the propriety of a purported breach of an immigration bond.
(8) DHS' failure to send G&G/ASC notice of breach of an immigration bond within 180 days of the breach excuses G&G/ASC's obligations under the immigration bond.
(9) When an Immigration Judge orders a bonded alien to post a voluntary departure bond, DHS is required to notify G&G/ASC so that G&G/ASC can mitigate its monetary exposure by posting the voluntary departure bond.
(10) The Board of Immigration Appeals' issuance of an order setting a new date for the bonded alien's voluntary departure excuses G&G/ASC's obligations under the voluntary departure bond.
(11) When an Immigration Judge grants a bonded alien voluntary departure, and the Immigration Judge

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neglects to order the bonded alien to post a voluntary departure bond, DHS is required to cancel the delivery bond.
(12) When an Immigration Judge grants a bonded alien voluntary departure, and the DHS trial attorney neglects to provide the bonded alien with written instruction as to how to properly effectuate and document a voluntary departure, DHSriesquired to cancel the delivery bond.
(13) When DHS requests an alien to appear for an interview/case review despite the fact that the alien is subject to a final order of removal, then DHS' demand (I-340) is for an improper purpose and DHS is required to cancel the delivery bond. In addition, if there is no final order of removal, then a DHS' demand (I-340) to surrender for deportation/removal is for an improper purpose and DHS is required to cancel the delivery bond.
(14) When the bonded alien and/or G&G/ASC has provided proof of voluntary departure to the DHS prior to the DHS breaching a voluntary departure bond, then G&G/ASC has substantially performed the terms of the voluntary departure bond, and the DHS is required to cancel the bond. Alternatively, G&G/ASC is entitled to complete mitigation (elimination) of the bond payment by demonstrating compliance within the terms of the Amwest mitigation period, or any DHS policy extending the Amwest mitigation period.

Defendants allege that Plaintiff has repeatedly breached these obligations. FACC ¶ 22. However, Defendants do not specify which of the above-fourteen acts of breach Plaintiff committed for each bond in question. Rather, they simply assert with respect to each bond that DHS has breached the bond "by failing to comply with at least one, and oftentimes many, of the legal and contractual requirements specified in paragraph 21, above." Id. ¶¶ 26, 33, 40, 47, 54, 61, 69. Defendants assert that they will be able to amend their counterclaim to assert more detailed facts once they receive the relevant A-Files for the bonds in question. Id. ¶ 71.

For 6 of the bonds in question, Defendants allege that they have paid the government under protest to satisfy these bonds, and that they seek repayment under the Little Tucker Act due to Plaintiff's breach of contract. Id. ¶¶ 23-24. For each of the 34 bonds, Defendants assert a cause of action under the Administrative Procedure Act ("APA"), 5 U.S.C. 701, et seq., alleging that Plaintiff has breached one of the 14 requirements above and that it has acted "unlawfully, arbitrarily,

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capriciously and in excess of its statutory jurisdiction, authority and limitations." Id. ¶¶ 67-70. Defendants seek injunctive relief in the form of "setting aside or rescinding DHS' bond breach determinations and/or canceling the disputed bond breaches." Id. at 21 ¶ 2. They also seek declaratory relief of non-liability based on (1) Plaintiff's unlawful conduct with respect to the bond breach determinations; and (2) Plaintiffs' alleged failure to review the A-Files of each bonded alien and/or failure to include such A-Files in the record of proceedings used to determine bond breaches. Id. ¶¶ 75-76.

Plaintiff has filed a motion to dismiss the FACC, which is now pending before the Court. Docket No. 100.


A. Failure to State a Claim

1. Legal Standard

Under Federal Rule of Civil Procedure 12(b)(6), a party may move to dismiss based on the failure to state a claim upon which relief may be granted. See Fed. R. Civ. P. 12(b)(6). A motion to dismiss based on Rule 12(b)(6) challenges the legal sufficiency of the claims alleged. See Parks Sch. of Bus. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995). In considering such a motion, a court must take all allegations of material fact as true and construe them in the light most favorable to the nonmoving party, although "conclusory allegations of law and unwarranted inferences are insufficient to avoid a Rule 12(b)(6) dismissal." Cousins v. Lockyer, 568 F.3d 1063, 1067 (9th Cir. 2009). While "a complaint need not contain detailed factual allegations . . . it must plead 'enough facts to state a claim to relief that is plausible on its face.'" Id. "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009); see also Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007). "The plausibility standard is not akin to a 'probability requirement,' but it asks for more than sheer possibility that a defendant acted unlawfully." Id.

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2. Sufficiency of Factual Allegations

The gravamen of Plaintiff's motion is that Defendants fail to state a claim for relief because they fail to connect any of the 34 bonds to any of the 14 asserted ways in which the government breached the bond contracts. Although Defendants claim their pleadings satisfy Twombly and Iqbal, merely providing a list of defenses and a list of bonds-without explaining what defenses apply to which bonds-does not provide the government with fair notice of Defendants' claims with respect to each bond. See McHenry v. Renne, 84 F.3d 1172, 1175-76 (9th Cir. 1996) (requiring amendment where plaintiffs provided a "Summary of Allegations Against Individual Defendants" but failed to "outline [] each legal claim based on specific allegations of fact" and failed to "link[] their factual allegations to actual legal claims" against each defendant).

Although the Court has acknowledged in the past that Defendants are entitled to view the A-Files for all bonds in dispute, and that upon viewing those files they may discover additional defenses to the breach determinations, see Docket No. 48, at 23; Docket No. 104, Defendants must still identify at least their preliminary list of defenses to each bond breach determination. As the government points out, Defendants had, in their prior counterclaim, asserted such specific facts with respect to the 6 bonds that have been carried over to the...

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