Bank of America NA v. Jackson et al

MOTION to Dismiss for Lack of Jurisdiction

D. Ariz.November 21, 2016

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 JOHN S. LEONARDO United States Attorney District of Arizona PAUL A. BULLIS Assistant U.S. Attorney Arizona State Bar No. 007676 Two Renaissance Square 40 North Central Avenue, Suite 1200 Phoenix, Arizona 85004-4408 Telephone: 602-514-7500 Facsimile: 602-514-7760 Email: Paul.Bullis@usdoj.gov Attorneys for Defendant Bureau of Indian Affairs IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA Bank of America, N.A., Plaintiff, vs. Bureau of Indian Affairs, Defendants. CIV-16-08076-PCT-JWS MOTION TO DISMISS Defendant Bureau of Indian Affairs (“BIA”),1 by and through its undersigned attorneys, files this Motion to Dismiss pursuant to Fed. R. Civ. P. 12(b)(1) for lack of subject matter jurisdiction because the government has not waived its sovereign immunity in this matter. This Motion is filed in accordance with this Court’s Scheduling and Planning Order. (Doc. 32, at 6.) This Motion is supported by the following Memorandum of Points and Authorities. /// /// 1 The Bureau of Indian Affairs is part of the United States Department of Interior. See San Xavier Development Authority v. Charles, 237 F.3d 1149, 1150 n. 1 (9th Cir. 2001). Case 3:16-cv-08076-JWS Document 35 Filed 11/21/16 Page 1 of 8 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MEMORANDUM OF POINTS AND AUTHORITIES I. BACKGROUND As alleged by the Amended Complaint (doc. 9), this matter involves property in Mohave Valley, Arizona. Id. at ¶ 1. Plaintiff Bank of America, N.A., holds a beneficial interest under a Deed of Trust (“DOT”) recorded against the property. Id. at ¶ 9. The DOT secured a loan by Bank of America to Michael and Brenda L. Jackson, who at the time of the loan held a leasehold interest in the property pursuant to a lease agreement (“Jackson Lease”) with Fort Mojave Residential, Inc. (“FM Residential”) (id. at ¶¶ 10, 11), a corporation organized under the Fort Mojave Business Corporation Ordinance. Id. at ¶ 4. The Jackson Lease describes the property as “Lot 14 and 15” within The Park at Mesquite Creek. Id. at ¶ 12. The property contains a single family residence located in the middle of Lots 14 and 15. Id. at ¶ 13. Plaintiff further alleges that when making the loan, Bank of America and the Jacksons intended and agreed that the security for the loan would consist of both Lots 14 and 15 and the residence. Id. at ¶ 14. However, the legal description for the DOT describes only Lot 14. Id. at ¶ 15. As alleged by the Amended Complaint, the Jackson Lease granted the Jacksons the right to mortgage their leasehold interest in the property. Id. at ¶ 18. The Amended Complaint further alleges that FM Residential expressly approved the DOT and the encumbrances of both Lots 14 and 15 through a Consent to Encumbrance of Lease and Amendment to Lease (“Consent”). Id. at ¶ 19. Plaintiff seeks a declaratory judgment that the DOT is a valid and binding encumbrance against both Lots 14 and 15 and/or reforming the legal description of the DOT to include Lot 15. Id. at ¶ 37 and p. 7. Plaintiff also seeks a declaratory judgment that the DOT, “as reformed to include Lot 15, is a valid and binding encumbrance that has received all necessary approvals under the Ground Lease, the Jackson Lease, U.S.C. § 483a (sic) and/or 25 C.F.R. §§ 162.301, et seq.” Id. at ¶ 45 and p. 7. Plaintiff does not Case 3:16-cv-08076-JWS Document 35 Filed 11/21/16 Page 2 of 8 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 seek monetary claims in its Amended Complaint. Title to the property is not at issue in this matter. Plaintiff does not seek to quiet title to any property. Plaintiff alleges in its Amended Complaint that by executing the Consent, FM Residential has agreed to the jurisdiction of this Court over matters involving the Deed of Trust. Id. at ¶ 21. Plaintiff makes no allegation that the BIA has agreed to the jurisdiction of this Court or that the United States has waived sovereign immunity, nor has Plaintiff cited any statute waiving the sovereign immunity of the United States as a matter of law for this matter. Plaintiff has failed to show that the United States has waived sovereign immunity, and thus failed to show that this Court has subject matter jurisdiction. The Complaint must therefore be dismissed pursuant to Fed. R. Civ. P. 12(b)(1). II. This Court Should Dismiss The Complaint Because Plaintiff Has Failed To Show A Waiver Of Sovereign Immunity. A. Rule 12(b)(1) Lack of Subject Matter Jurisdiction Standard A Rule 12(b)(1) motion challenges the Court's subject matter jurisdiction over the claim. When analyzing a facial challenge to the court's jurisdiction, the Court accepts as true the factual allegations contained in the complaint. Orsay v. U.S. Dept. of Justice, 289 F.3d 1125, 1127 (9th Cir.2002). Because federal courts are courts of limited jurisdiction, the party invoking the jurisdiction of the court has the burden of proof. Thornhill Pub. Co., Inc. v. General Tel. & Electronics Corp., 594 F.2d 730, 733 (9th Cir.1979). It is to be presumed that a cause lies outside the federal courts’ limited jurisdiction. Kokkonen v. Guardian Live Ins. Co. of Amer., 511 U.S. 375, 377 (1994). As aptly stated in Tucson Airport Authority v. General Dynamics Corp., 922 F. Supp. 273, 279-80 (D. Ariz. 1996), aff’d 136 F.3d 641 (9th Cir. 1998), “A plaintiff may sue the United States only if Congress has waived immunity for the lawsuit, and a plaintiff may bring its claim in federal district court only if Congress has provided for jurisdiction there.” The district court has a duty to dismiss an action whenever it appears that it lacks jurisdiction. Case 3:16-cv-08076-JWS Document 35 Filed 11/21/16 Page 3 of 8 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Billingsley v. C.I.R., 868 F.2d 1081, 1085 (9th Cir. 1989). B. Plaintiff Must Demonstrate That the Government Has Waived Sovereign Immunity To establish this Court’s jurisdiction, Plaintiff must demonstrate a waiver of the United States’ sovereign immunity. F.D.I.C. v. Meyer, 510 U.S. 471, 475 (1994) (sovereign immunity is jurisdictional). The United States, as a sovereign, is immune from suit except to the extent that it has expressly consented to be sued. United States v. Sherwood, 312 U.S. 584, 596 (1941); Dunn & Black, P.S. v. United States, 492 F.3d 1084, 1088 (9th Cir. 2007); Gilbert v. DaGrossa, 756 F.2d 1455, 1458 (9th Cir. 1985). Suits against the United States “are barred for lack of subject matter jurisdiction unless the government expressly and unequivocally waives its sovereign immunity.” Mills v. U.S., 742 F.3d 400, 404 (9th Cir. 2014) (citation omitted). As the Ninth Circuit observed in Gilbert, “[i]t is axiomatic that the United States may not be sued without its consent and that the existence of such consent is a prerequisite for jurisdiction.” 756 F.2d at 1458. Where the United States has not consented to suit, dismissal of the action is required. Id. Moreover, “[a] waiver of sovereign immunity ‘cannot be implied but must be unequivocally expressed.’” United States v. Mitchell, 445 U.S. 535, 538 (1980). C. The United States Has Not Waived Sovereign Immunity In This Matter Plaintiff cites 28 U.S.C. §§ 1331 and 1346 as the bases for this Court’s jurisdiction. (Doc. 9 at ¶ 7.) Plaintiff seeks declaratory relief, which is provided for under the Declaratory Relief Act, 28 U.S.C. §§ 2201-02. (Doc. 9 at ¶¶ 37 and 45, and p. 7.) However, neither the statutes cited by Plaintiff or the Declaratory Relief Act serves to waive sovereign immunity in this case. This Court therefore lacks subject matter jurisdiction and should dismiss the Amended Complaint. i. 28 U.S.C. § 1331 Does Not Waive Sovereign Immunity Plaintiff relies on 28 U.S.C. § 1331 as a basis for jurisdiction. That statute is a “general jurisdictional statute[] [that] cannot, [] waive the government’s sovereign immunity.” Hughes v. U.S., 953 F.2d 531, 539 n. 5 (9th Cir. 1992) (citations omitted). Case 3:16-cv-08076-JWS Document 35 Filed 11/21/16 Page 4 of 8 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Simply citing to 28 U.S.C. § 1331 “does not suffice to confer jurisdiction when . . . the government did not waive its immunity.” Id. ii. 28 U.S.C. § 1346 Does Not Waive Sovereign Immunity in This Matter, Which is Not a Quiet Title Action Plaintiff also cites to 28 U.S.C. § 1346 as a basis for jurisdiction. Although Plaintiff does not specify which provision it relies upon, presumably it relies upon § 1346(f), as the other provisions of the statute by their terms do not apply.2 This provision states: The district courts shall have exclusive original jurisdiction of civil actions brought under section 2409a to quiet title to an estate or interest in real property in which an interest is claimed by the United States. 28 U.S.C. § 1346(f) (emphasis added). The referenced section, 28 U.S.C. § 2409a, states that the “United States may be named as a party defendant in a civil action under this section to adjudicate a disputed title to real property in which the United States claims an interest.” 28 U.S.C. § 2409a(a) (emphasis added). The section goes on to state that it “does not apply to trust or restricted Indian lands[.]” Id. Although 28 U.S.C. § 2409a waives the United States’ sovereign immunity to quiet title actions, Bank of Hemet v. U.S., 643 F.2d 661, 665 (9th Cir. 1981), this matter is not a quiet title action, and it was not brought under that section. There is no dispute about title, nor is title an issue. The issue in this matter is whether Plaintiff’s DOT validly encumbers both Lots 14 and 15 and the residence constructed thereon. (Doc. 9 at ¶¶ 28-29.) Therefore, this statute, providing the United States’ limited waiver of 2 28 U.S.C. § 1346 generally deals with monetary claims against the United States, and includes the Little Tucker Act, 28 U.S.C. § 1346(a)(2), and a portion of the Federal Tort Claims Act, 28 U.S.C. § 1346(b), both of which explicitly deal with claims for monetary relief against the government. The statute also addresses actions for the recovery of internal-revenue tax erroneously assessed, 28 U.S.C. § 1346(a)(1), and civil actions against the United States under certain sections of the Internal Revenue Code. 28 U.S.C. § 1346(e). The section also addresses claims by the United States, 28 U.S.C. § 1346(c), claims for a pension, 28 U.S.C. § 1346(d), and civil actions brought by a covered employee. 28 U.S.C. § 1346(g). Case 3:16-cv-08076-JWS Document 35 Filed 11/21/16 Page 5 of 8 6 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 sovereign immunity, does not apply in this matter. Furthermore, 28 U.S.C. § 2409a “does not apply to trust or restricted Indian lands[.]” 28 U.S.C. § 2409a(a). Plaintiff alleges that the approvals contained in the ground lease were sufficient to comply with 25 C.F.R. §§ 162.301 et seq. (Doc. 9 at ¶ 28.) This subpart covers ground leases and leases of developed land on Indian land, for housing purposes. 25 C.F.R. § 162.301(a). “Indian land” is defined as “any tract in which any interest in the surface estate is owned by a tribe or individual Indian in trust or restricted status and includes both individually owned Indian land and tribal land.” 25 C.F.R. § 162.003. By referencing 25 C.F.R. §§ 162.301 et seq., Plaintiff thus acknowledges that the property in question is trust or restricted Indian land. By its own terms, the quiet title statute does not apply to Indian trust land or restricted Indian land and does not waive the United States’ sovereign immunity in this matter. iii. The Declaratory Judgment Act Does Not Waive Sovereign Immunity Plaintiff seeks declaratory relief, which courts are authorized to issue under the Declaratory Judgment Act, 28 U.S.C. § 2201-02. The Declaratory Judgment Act does not create an independent basis for district court jurisdiction, Countrywide Home Loans, Inc. v. Mortgage Guar. Ins. Corp., 642 F.3d 849, 852-53 (9th Cir. 2011) (the Declaratory Judgment Act expanded the scope of the federal courts’ remedial powers but did nothing to alter the courts’ jurisdiction); Jarrett v. Resor, 426 F.2d 213, 216 (9th Cir. 1970) (' 2201 Ais not a jurisdictional statute. It does not create subject matter jurisdiction where none otherwise exists.@), nor does it constitute a waiver of sovereign immunity. Balistrieri v. United States, 303 F.2d 617, 619 (7th Cir. 1962) (' 2201 does not give consent of United States to be sued); Grondal v. U.S., 682 F.2d 1203, 1218 (E.D. Wash. 2010) (Declaratory Judgment Act “does not constitute a waiver of sovereign immunity.” (Citation omitted.)). Rather, the Declaratory Judgment Act provides a discretionary procedural remedy but does not confer or otherwise expand jurisdiction to hear a claim. See Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667, 671-72 (1950); see also Case 3:16-cv-08076-JWS Document 35 Filed 11/21/16 Page 6 of 8 7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Schilling v. Rogers, 363 U.S. 666, 677 (1960). As explained by the Supreme Court, “the Declaratory Judgment Act is not an independent source of federal jurisdiction; . . . the availability of such relief presupposes the existence of judicially remediable right.” Schilling, 363 U.S. at 677. The United States in this matter has not waived its sovereign immunity and consented to be sued. The Declaratory Judgment Act does not give this Court jurisdiction in such a situation, and declaratory relief is therefore not available to Plaintiff. D. This Matter Must Be Dismissed Plaintiff bears the burden to show that this Court has jurisdiction. Where the United States is the defendant, Plaintiff must show that the government has waived its sovereign immunity from suit. Plaintiff has neither alleged that the United States has waived sovereign immunity nor has Plaintiff cited to any statute under which the government has waived sovereign immunity. As a result, Plaintiff has failed to show that this Court has jurisdiction, and this matter must be dismissed. III. Conclusion In light of the above, Defendant Bureau of Indian Affairs respectfully requests that this matter be dismissed. Respectfully submitted this 21st day of November, 2016. JOHN S. LEONARDO United States Attorney District of Arizona s/Paul A. Bullis PAUL A. BULLIS Assistant U.S. Attorney Case 3:16-cv-08076-JWS Document 35 Filed 11/21/16 Page 7 of 8 8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CERTIFICATE OF SERVICE I hereby certify that on this 21st day of November, 2016, I electronically transmitted the attached document to the Clerk's Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing to the following CM/ECF registrant(s): Jamey A. Thompson Patrick J. Davis Fidelity National Law Group 2355 East Camelback Road, Suite 900 Phoenix, Arizona 85016 Jamey.thompson@fnf.com Patrick.Davis@fnf.com Attorneys for Plaintiff s/Amber M. Carter, Paralegal _ U.S. Attorney’s Office Case 3:16-cv-08076-JWS Document 35 Filed 11/21/16 Page 8 of 8