Free Motion to Dismiss - District Court of California - California

Case 5:08-cv-02909-HRL

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JOSEPH P. RUSSONIELLO (CSBN 44332) United States Attorney JOANN M. SWANSON (CSBN 88143) Chief, Civil Division JAMES A. SCHARF(CSBN 152171) Assistant United States Attorney 150 Almaden Boulevard, Suite 900 San Jose, CA 95113 Telephone: (408) 535-5044 FAX: (408) 535-5081 [email protected] Attorneys for Federal; Defendants UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA ) ) ) ) ) ) ) ) ) ) No. C 08 02909 HRL FEDERAL DEFENDANTS' MOTION TO DISMISS AND CONSENT TO MAGISTRATE JUDGE Date: October 7, 2008 Time: 10:00 a.m. Courtroom: 2 Judge: Magistrate Judge Howard R. Lloyd

12 GILBERTO FERNANDEZ, JR. 13 14

Plaintiff, v. Defendants.

15 Alliance Bancorp, et al., 16 17 18 19 20 21 22

TO: ALL PARTIES AND TO THEIR ATTORNEYS OF RECORD: Please take notice that on October 7, 2008, at 10:00 a.m., or as soon thereafter

23 as this matter may be heard by this Court, located 280 South First Street, San Jose, 24 California 95113, defendants Henry M. Paulson, Jr. And Michael B. Mukasey 25 ("Federal Defendants"), will and hereby do move this Court pursuant to Federal 26 Rules of Civil Procedure 12(b)(1) and 12(b)(6) for an order dismissing plaintiff's 27 claims against them with prejudice. 28

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This Motion is based on this Notice and Brief, the Court files and pleadings in this action, and any other matters that the Court may consider at the hearing. Federal Defendants hereby consent to the assignment of a U.S. Magistrate Judge for all purposes, including adjudication of this motion. I. INTRODUCTION Plaintiff's Petition filed June 11, 2008, and Amended Petition filed June 20, 2008, stem from a foreclosure sale of plaintiff's real property. Amended Petition at 6-17. The non-federal defendants are the financial institutions which at various times held the promissary note on plaintiff's property. Amended Petition at 5. In

10 essence, plaintiff seeks to cancel the original promissory note for fraud. Amended 11 Petition at 18-a. Plaintiff sued the Federal Defendants as "indispensable part[ies] 12 under statute," but does not allege that they acted unlawfully in any way. Amended 13 Petition at 5-I and j. Apparently, there is an unlawful detainer proceeding relating 14 to the subject property pending in Santa Clara County Superior Court. Amended 15 Petition at 16-17. 16

The short answer to plaintiff's grievance is that plaintiff does not contend that

17 the Federal Defendants did anything wrong. Accordingly, plaintiff's complaint 18 fails to state a cause of action against them. The longer answer is that the United 19 States has not waived sovereign immunity with respect to these claims, and 20 plaintiff has not exhausted his administrative remedies. Accordingly, this Court 21 lacks subject matter jurisdiction over plaintiff's claims against the Federal 22 Defendants. 23 24 25 26

II. ARGUMENT A. PLAINTIFF DOES NOT ACCUSE THE FEDERAL DEFENDANTS OF ANY MISCONDUCT Plaintiff's Amended Petition does not allege that the Federal Defendants

27 committed any act or omission which harmed plaintiff. Indeed, the Amended 28

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Petition does not allege that plaintiff had any contact of any kind with the Federal Defendants. Plaintiff sues the Federal Defendants as "indispensable part[ies] under statute" but does not explain why they are indispensable; nor does plaintiff explain under what statute they are sued. Clearly, plaintiff's grievance is with the nonfederal financial institutions with which plaintiff directly dealt. The proper forum to resolve this dispute is probably the pending state court unlawful detainer action. If plaintiff has a legitimate argument to keep his property, that is the place to make it. B. THE FEDERAL DEFENDANTS ARE NOT PROPER DEFENDANTS TO THE CURRENT ACTION 1. Any Alleged Actions Giving Rise to Plaintiffs' Claims Were Within the Scope of their Employment

Under the Federal Tort Claims Act ("FTCA"), individual government employees are not personally liable for tort claims alleging a negligent or wrongful act on the part of a government employee in the course and scope of his employment. 28 U.S.C. § 2679(b)(1). Such tort suits can be brought only against the United States of America. See 28 U.S.C. § 2679(d). Plaintiff admits in the caption of his complaint that defendant Henry M. Paulson, Jr., is sued as "Secretary of the Treasury, United States" and that defendant Michael B. Mukasey is sued as "U.S. Attorney General, as Alien Property Custodian." Thus, plaintiff sued the Federal Defendants in their official capacities. Consequently, they cannot be proper defendants in this action, absent an allegation that they violated plaintiff's constitutional rights, which they did not. 2. Plaintiff has Not Alleged a Violation of His Constitutional Rights by the Federal Defendants.

Although the FTCA authorizes claims against the United States, not private

26 individuals, a limited exception permits suit against an employee of the federal 27 government who violates a right guaranteed by the Constitution of the United 28

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States. 28 U.S.C. § 2679(b)(2); Siegert v. Gilley, 500 U.S. 226 (1991). Plaintiff cannot take advantage of this exception, however, because he has not alleged any violation of his constitutional rights by the Federal Defendants. Allegations of negligence against federal officials are insufficient, and plaintiff's complaint does not even allege that. See Daniels v. Williams, 474 U.S. 327, 328 (1986); 28 U.S.C. § 2680(h); Owyhee Grazing Ass'n, Inc. v. Field, 637 F.2d 694, 697 (9th Cir. 1981). C. LEAVE TO AMEND WOULD BE FUTILE BECAUSE THE DEFICIENCIES OF THE COMPLAINT CANNOT BE CURED BY AMENDMENT Leave to amend is not warranted in the present case because plaintiff as no ability to allege new facts that would overcome the fatal defects of his complaint. See Lucas v. Department of Corrs., 66 F.3d 245, 248 (9th Cir. 1995) (providing that a pro se litigant must be given leave to amend unless it is absolutely clear that the deficiencies of the pleading cannot be cured by amendment). 1. The United States has not Waived Sovereign Immunity.

"It is elementary that the United States, as sovereign, is immune from suit save as it consents to be sued ." U. S. v. Mitchell, 445 U.S. 535, 538 (1980) (internal quotations omitted). The question of whether or not the United States has waived sovereign immunity is a question of subject matter jurisdiction. Id.; McCarthy v. U.S., 850 F.2d 558, 560 (9th Cir. 1988). "A waiver of sovereign immunity cannot be implied but must be unequivocally expressed." Mitchell, 445 U.S. at 538 (internal quotations omitted); Holloman v. Watt, 708 F.2d 1399, 1401 (9th Cir. 1983), cert. denied sub nom Holloman v. Clark, 466 U.S. 958 (1984). The burden is on the plaintiff to prove the existence of the government's waiver of sovereign immunity. Holloman, 708 F.2d at 1401. Although the FTCA contains a general waiver of the United States' sovereign

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immunity for state common law or statutory torts arising out of the negligence of an officer or employee of the United States acting within the course and scope of his or her duties, the FTCA specifically excludes actions arising out of "libel, slander, misrepresentation [or] deceit." 28 U.S.C. § 2680(h). This exclusion clearly prevents any court from exercising jurisdiction over plaintiffs' potential claims against the federal government. See id.; Mount Homes, Inc. v. United States, 912 F.2d 352, 354 (9th Cir. 1990); Owyhee Grazing Ass'n, Inc. v. Field, 637 F.2d 694, 697 (9th Cir. 1981) ("[C]laims against the United States for fraud or misrepresentation by a federal officer are absolutely barred by 28 U.S.C. §

10 2680(h)."). Therefore, even if plaintiff amended his complaint to allege 11 misrepresentation claims against the United States, no federal court could exercise 12 subject matter jurisdiction over such claims against the federal government. 13 14 15

2.

Plaintiff Has Failed To Exhaust His Mandatory Administrative Remedies

Furthermore, to the extent that plaintiff's allegations against the Federal

16 Defendants are construed as arising under tort, his complaint should be dismissed 17 for failure to exhaust administrative remedies. The FTCA imposes as a prerequisite 18 to its waiver of sovereign immunity the condition that a party must first file an 19 administrative claim with the appropriate federal agency. 28 U.S.C. § 2675(a). 20 The administrative claim requirement of the FTCA is jurisdictional, and may not be 21 waived. See McNeil v. United States, 508 U.S. 106 (1993) (affirming dismissal for 22 lack of subject matter jurisdiction of action brought under FTCA where 23 administrative claim requirement was not satisfied before suit was filed); Jerves v. 24 United States, 966 F.2d 517, 521 (9th Cir. 1992) (same). The plaintiff in an action 25 seeking relief under the FTCA has the burden of pleading and proving that he 26 complied with the FTCA's administrative claim presentment requirement. See 27 Bruce v. United States, 621 F.2d 914, 918 (8th Cir. 1980) (district court lacked 28

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jurisdiction under the FTCA "because [plaintiff] failed to allege compliance with the administrative claim procedure set forth in 28 U.S.C. § 2675); Altman v. Connally, 456 F.2d 1114, 1116 (2d Cir. 1972) (affirming dismissal of complaint in part because plaintiff failed to allege compliance with administrative claim procedure under the FTCA); Mooney v. Clerk of Courts, District of New Hampshire, 831 F.Supp. 7, 10 (D.N.H. 1993) (claims which could be interpreted as sounding in tort against the federal government "would be required to be dismissed" where plaintiff failed to allege in the complaint that he had complied with the administrative claim requirement of the the FTCA). The complaint in this case does not allege that plaintiff has presented an

11 administrative claim under the FTCA to any federal agency. This defect alone 12 requires dismissal of federal tort claim advanced by plaintiff for lack of subject 13 matter jurisdiction. 14

Therefore, amendment to include the United States as a defendant would be

15 futile, both because the FTCA does not waive sovereign immunity with respect to 16 the types of claims raised by plaintiff, and because plaintiff has failed to exhaust 17 his mandatory administrative remedies, which are a jurisdictional prerequisite to 18 any waiver of sovereign immunity that the FTCA does contain. 19 20

III. CONCLUSION For all of the foregoing reasons, the Court should dismiss plaintiff's claims

21 against the Federal Defendants, without leave to amend. 22 23 24 25 26 27 28

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DATED: July 17, 2007

Respectfully submitted, JOSEPH P. RUSSONIELLO United States Attorney /s/ James Scharf JAMES A. SCHARF Assistant United States Attorney

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