Mead v. City First Bank of Dc, N.A.

• Court: District Court, District of Columbia
• Decided: March 5, 2009
• Docket: Civil Action No. 2008-1597
• Status: Published

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

______________________________ ) DAVID MEAD, ) ) Plaintiff, ) ) v. ) Civil Action No. 08-1597 (RWR) ) CITY FIRST BANK OF DC, N.A., ) ) Defendant. ) ______________________________)

MEMORANDUM ORDER

In his original complaint, plaintiff David Mead brought

claims against defendant City First Bank of DC alleging fraud and

unconscionability regarding loan arrangements between the

parties. Mead has filed a motion for leave to amend the

complaint to add additional claims and defendants. Among other

pending motions are the defendant’s motion for partial summary

judgment, the defendant’s motion for an entry of default, the

plaintiff’s motion for an extension of time to file an answer to

the defendant’s counterclaim, and the plaintiff’s motion for an

CM/ECF password.

A plaintiff is allowed to amend his complaint after an

answer has been filed “only by leave of court or by written

consent of the adverse party; and leave shall be freely given

when justice so requires.” Fed. R. Civ. P. 15(a)(2). “If the

underlying facts or circumstances relied upon by a plaintiff may -2-

be a proper subject of relief, he ought to be afforded an

opportunity to test his claim on the merits.” Foman v. Davis,

371 U.S. 178, 182 (1962). Undue delay, undue prejudice to the

defendant, or futility of the proposed amendments are factors

that may warrant denying leave to amend. Atchinson v. District

of Columbia, 73 F.3d 418, 425 (D.C. Cir. 1996). The defendant

has the burden of showing why leave to file an amended complaint

should not be granted. LaPrade v. Abramson, Civil Action No.

97-10 (RWR), 2006 WL 3469532, at *3 (D.D.C. Nov. 29, 2006). The

decision to grant or deny leave to amend is committed to the

sound discretion of the district court. Foman, 371 U.S. at 182;

James Madison Ltd. v. Ludwig, 82 F.3d 1085, 1099 (D.C. Cir.

1996).

The proposed first amended complaint asserts seven claims

against multiple defendants, including several defendants whose

citizenship is not diverse to Mead’s. Mead contends that

jurisdiction over his amended complaint is proper under 28 U.S.C.

§ 1331 because Count Two of the amended complaint alleges a

federal question under 12 U.S.C. §§ 3403 and 3417, which provide

that a financial institution is liable for damages if it

“provide[s] to any Government authority access to or copies of,

or information contained in, the financial records of any

customer except in accordance with the provisions of [chapter 35 -3-

of Title 12 of the United States Code.]”1 City Bank opposes

Mead’s motion for leave to amend the complaint, arguing that

granting leave to amend the complaint would be futile because

federal question jurisdiction is not present in the amended

complaint and the presence of nondiverse defendants in the

amended complaint defeats diversity jurisdiction under 28 U.S.C.

§ 1332. In addition, City Bank contends that Mead has failed to

state claims in Counts One and Five and that no claims have been

stated against proposed defendants CF Bank Corp. and Central

Fidelity Corp.

A defendant bears the burden to show futility, while a

plaintiff bears the burden to establish the court’s jurisdiction

over his case. See Steel Co. v. Citizens for a Better Env’t,

523 U.S. 83, 103 (1998) (“The party invoking federal jurisdiction

bears the burden of establishing its existence.”). Although the

defendant contends that “[n]o action alleged to have been taken

violates” the federal statutes cited in Count Two,

“[j]urisdiction . . . is not defeated . . . by the possibility

that the averments might fail to state a cause of action on which

1 Mead also suggests that federal question jurisdiction may be invoked here under 28 U.S.C. § 2201, Federal Rules of Civil Procedure 54, 57, and 58, and the Seventh Amendment. None of these sources is a federal law under which his civil action arises and they cannot establish this court’s jurisdiction under 28 U.S.C. § 1331. Count Six seeking a declaratory judgment regarding state law claims does not establish federal question jurisdiction, and his amended complaint asserts no claim arising out of the Seventh Amendment or the federal rules. -4-

[a plaintiff] could actually recover. For it is well settled

that the failure to state a proper cause of action calls for a

judgment on the merits and not for a dismissal for want of

jurisdiction.” Bell v. Hood, 327 U.S. 678, 682 (1946). It is

not true that the amended complaint does not allege a violation

of a federal statute and allege facts in support of that

allegation. Thus, City Bank has not shown that there is no basis

for this court’s jurisdiction, and has not carried its burden of

establishing that granting leave to amend the complaint would be

futile.2

Accordingly, it is hereby

ORDERED that the plaintiff’s motion for leave to amend the

complaint [9] be, and hereby is, GRANTED. Because this order

addresses whether the defendant has sustained its burden of

showing futility but does not determine whether the plaintiff has

carried his burden of establishing the court’s jurisdiction over

all of his claims, it is further

ORDERED that Mead shall file by March 26, 2009 a memorandum

establishing this court’s subject matter jurisdiction, and all

defendants on whom process has been served by that date shall

respond by April 6, 2009. It is further

2 Similarly, City Bank’s challenges to adding particular counts and defendants do not show futility of the entire amendment, and any such defects can be raised and cured by appropriate motion. -5-

ORDERED that the defendant’s motion for partial summary

judgment [4] be, and hereby is, DENIED WITHOUT PREJUDICE in light

of the amended complaint. It is further

ORDERED that the defendant’s motion [12] for an entry of

default and the plaintiff’s motion [16] for an extension of time

to file an answer to the defendant’s counterclaim be, and hereby

are, DENIED AS MOOT. It is further

ORDERED that the plaintiff’s motion [25] for a CM/ECF

password be, and hereby is, DENIED WITHOUT PREJUDICE for failure

to support his motion with the information required by Local

Civil Rule 5.4(b)(2).

SIGNED this 5th day of March, 2009.

________/s/_________________ RICHARD W. ROBERTS United States District Judge