United Western Bank v. Office of Thrift Supervision
| Decision Date | 24 June 2011 |
| Docket Number | Civil Action No. 11–0408 (ABJ). |
| Citation | 793 F.Supp.2d 357 |
| Parties | UNITED WESTERN BANK, et al., Plaintiffs,v.OFFICE OF THRIFT SUPERVISION, et al., Defendants. |
| Court | U.S. District Court — District of Columbia |
OPINION TEXT STARTS HERE
Andrew L. Sandler, Samuel John Buffone, Liana R. Prieto, Buckleysandler LLP, Kirby D. Behre, Lawrence Kaplan, Paul, Hastings, Janofsky & Walker, LLP, Washington, DC, Theodore J. Abariotes, United Western Bancorp, Inc., Denver, CO, for Plaintiffs.Christopher A. Sterbenz, Dirk S. Roberts, Sarah J. Auchterlonie, Office of Thrift Supervision, Washington, DC, Duncan Norman Stevens, Merritt Albert Pardini, Federal Deposit Insurance Corporation, Arlington, VA, for Defendants.
The Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (“FIRREA”), 12 U.S.C. § 1461, et. seq., accords the Director of the Office of Thrift Supervision (“OTS”) broad powers to regulate federally insured savings associations, including the power to appoint a receiver or conservator for an association under certain circumstances. 12 U.S.C. § 1464(d)(2)(A). The appointment of a receiver strips the stockholders, members, officers, and directors of the bank of any authority to act in connection with the bank—with one exception, see 12 U.S.C. § 1821(d)(2)(A)(i) and 12 C.F.R. § 558.1(b)(5). In the event of the appointment of a conservator or receiver, “the association may, within 30 days thereafter, bring an action ... in the United States District Court for the District of Columbia[ ] for an order requiring the Director to remove such conservator or receiver....” 12 U.S.C. § 1464(d)(2)(B).
In this case, plaintiff United Western Bank (“the bank” or “the association”) challenges the January 21, 2011 decision by John E. Bowman, the Acting Director of OTS, to appoint the Federal Deposit Insurance Corporation (“FDIC”) as receiver for the bank. Notwithstanding the language of the FIRREA judicial review provision, defendants OTS and Bowman have moved under Fed. R. Civ. Proc. 12(b)(1) to dismiss the complaint for lack of subject matter jurisdiction, contending that there has been no waiver of sovereign immunity to allow plaintiffs to bring this action. The FDIC has also moved to dismiss the claims brought against it in its corporate capacity and in its capacity as receiver for the bank. Since the statute specifically contemplates that a bank may challenge the Director of OTS's decision to appoint a receiver in the District Court, the Court will permit the claims filed on behalf of plaintiff United Western Bank to proceed. But claims brought in the name of other would-be plaintiffs will be dismissed, and claims filed against defendants other than OTS and its Director will also be dismissed.
United Western Bank was a federally chartered savings association with eight full-service branches in Colorado. Compl. ¶ 30. Plaintiff United Western Bank, Inc. (“the holding corporation”) was the sole shareholder of United Western Bank. Id. ¶ 19. In light of challenges stemming from the global financial crisis, in November 2010, the bank submitted a plan for a private sector recapitalization to OTS. Id. ¶ 34. The bank alleges that OTS was dissatisfied with the recapitalization plan and particularly, its processing and settlement business model. Id. ¶ 36. On January 21, 2011, defendant Bowman appointed FDIC as a receiver for United Western Bank pursuant to 12 U.S.C. § 1464(d)(2)(A).
The Director identified three separate statutory grounds for appointing a receiver: (1) the association was in an unsafe and unsound condition to transact business, see 12 U.S.C. § 1821(c)(5)(C); (2) the association was likely to be unable to pay its obligations or meet its depositors' demands in the normal course of business, see 12 U.S.C. § 1821(c)(5)(F); and (3) the association was undercapitalized, as defined by 12 U.S.C. § 1831 o(b), and had failed to submit a capital restoration plan acceptable to OTS within the appropriate amount of time, see 12 U.S.C. § 1821(c)(5)(K)(iii). See OTS Receivership Order for United Western Bank, Ex. 1 to Def. OTS's Mot. to Dismiss (“OTS Mem.”).
On February 17, 2011, the individuals who had previously constituted the board of directors for the association and the holding corporation's board held a joint meeting to discuss the receivership. The meeting was attended by a quorum of each entity's directors, as well as a number of executives from the bank and the holding corporation, and the bank's general counsel and executive vice president, Theodore J. Abariotes. Abariotes Decl. Six of the bank's seven directors were present at the meeting. Decls. of Berling, Bullock, Darre, Gibson, Hirsh, and Peoples. At this meeting, after reviewing a draft complaint, the participants unanimously agreed to file suit seeking judicial review of OTS's determination to appoint a receiver. Id. On February 18, 2011, the association, the holding corporation, and five individual directors (collectively “plaintiffs”) brought this action under 12 U.S.C. § 1464(d)(2)(B) against OTS, OTS's acting director, the FDIC as receiver for the bank (“FDIC–R”), and the FDIC in its corporate capacity (“FDIC–C”).
I. STANDARD OF REVIEW
In evaluating a motion to dismiss under either Rule 12(b)(1) or 12(b)(6), the Court must “treat the complaint's factual allegations as true ... and must grant plaintiff ‘the benefit of all inferences that can be derived from the facts alleged.’ ” Sparrow v. United Air Lines, Inc., 216 F.3d 1111, 1113 (D.C.Cir.2000) (quoting Schuler v. United States, 617 F.2d 605, 608 (D.C.Cir.1979) (citations omitted)). Nevertheless, the Court need not accept inferences drawn by the plaintiff if those inferences are unsupported by facts alleged in the complaint, nor must the Court accept plaintiff's legal conclusions. Browning v. Clinton, 292 F.3d 235, 242 (D.C.Cir.2002).
Under Rule 12(b)(1), the plaintiff bears the burden of establishing jurisdiction by a preponderance of the evidence. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992); Shekoyan v. Sibley Int'l Corp., 217 F.Supp.2d 59, 63 (D.D.C.2002). Federal courts are courts of limited jurisdiction and the law presumes that “a cause lies outside this limited jurisdiction.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994); see also Gen. Motors Corp. v. Envtl. Prot. Agency, 363 F.3d 442, 448 (D.C.Cir.2004) (). Because “subject-matter jurisdiction is an ‘Art[icle] III as well as a statutory requirement, ... no action of the parties can confer subject-matter jurisdiction upon a federal court.’ ” Akinseye v. District of Columbia, 339 F.3d 970, 971 (D.C.Cir.2003) (quoting Ins. Corp. of Ireland, Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 702, 102 S.Ct. 2099, 72 L.Ed.2d 492 (1982)).
When considering a motion to dismiss for lack of jurisdiction, unlike when deciding a motion to dismiss under Rule 12(b)(6), the court “is not limited to the allegations of the complaint.” Hohri v. United States, 782 F.2d 227, 241 (D.C.Cir.1986) vacated on other grounds, 482 U.S. 64, 107 S.Ct. 2246, 96 L.Ed.2d 51 (1987). Rather, a court “may consider such materials outside the pleadings as it deems appropriate to resolve the question of whether it has jurisdiction in the case.” Scolaro v. D.C. Bd. of Elections & Ethics, 104 F.Supp.2d 18, 22 (D.D.C.2000) (citing Herbert v. Nat'l Acad. of Sciences, 974 F.2d 192, 197 (D.C.Cir.1992); see also Jerome Stevens Pharms., Inc. v. FDA, 402 F.3d 1249, 1253 (D.C.Cir.2005)). In this case, both parties have submitted materials for the Court's consideration on this issue.
“To survive a [Rule 12(b)(6) ] motion to dismiss a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (internal quotation marks omitted); see also Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). A claim is facially plausible when the pleaded factual content “allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 129 S.Ct. at 1949. “The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. “[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged—but it has not ‘show[n]’ ‘that the pleader is entitled to relief.’ ” Id. at 1950 (quoting Fed. R. Civ. Pro. 8(a)(2)). A pleading must offer more than “labels and conclusions” or a “formulaic recitation of the elements of a cause of action,” id. at 1949 (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955), and “the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.” Id. In ruling upon a motion to dismiss, a court may ordinarily consider only “the facts alleged in the complaint, documents attached as exhibits or incorporated by reference in the complaint, and matters about which the Court may take judicial notice.” Gustave–Schmidt v. Chao, 226 F.Supp.2d 191, 196 (D.D.C.2002) (citations omitted).
Under the doctrine of sovereign immunity, the United States is immune to suit unless the United States explicitly consents to being sued. United States v. Mitchell, 445 U.S. 535, 538, 100 S.Ct. 1349, 63 L.Ed.2d 607 (1980). This immunity extends to the agencies of the federal government, including OTS. FDIC v. Meyer, 510 U.S. 471, 474, 114 S.Ct. 996, 127 L.Ed.2d 308 (1994) (...
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