Rothenberg et.al. v. Federal Deposit Insurance Corporation

• Court: District Court, N.D. California
• Decided: July 11, 2023
• Docket: 4:23-cv-01603
• Status: Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 MICHAEL BRENT ROTHENBERG, et al., Case No. 23-cv-01603-JST

8 Plaintiffs, ORDER DENYING MOTIONS FOR 9 v. STAY

10 FEDERAL DEPOSIT INSURANCE Re: ECF No. 13 CORPORPORATION, et al., 11 Defendants. 12

13 FEDERAL DEPOSIT INSURANCE Case No. 23-cv-01606-JST CORPORPORATION, 14 Plaintiff, 15 Re: ECF No. 13 v. 16 MICHAEL BRENT ROTHENBERG, 17 Defendant. 18

19 Before the Court are the Federal Deposit Insurance Commission’s (“FDIC”) motions to 20 stay these actions. Case No. 23-cv-01603-JST, ECF No. 13; Case No. 23-cv-01606-JST, ECF No. 21 13. Pursuant to Federal Rule of Civil Procedure 78(b) and Civil Local Rule 7-1(b), the Court finds 22 the matters suitable for disposition without a hearing. 23 FDIC seeks 90-day stays of these proceedings pursuant to 12 U.S.C. § 1821(d)(12)(A), 24 which provides, in relevant part, “After the appointment of a . . . receiver for an insured depository 25 institution, the . . . receiver may request a stay for a period not to exceed . . . 90 days.” A court is 26 required to grant the stay upon request by the receiver. See id. § 1821(d)(12)(B) (“Upon receipt of 27 a request by any . . . receiver . . . for a stay of any judicial action or proceeding in any court with 1 Props, Inc. v. Colonial Sav. Bank, 947 F.2d 49, 67 (3d Cir. 1991) (“[T]he language of [S]ection 2 1821(d)(12)(B) is unmistakably mandatory.”); Damiano v. FDIC, 104 F.3d 328, 333 n.9 (11th Cir. 3 1997) (“[12 U.S.C. § 1821(d)(12)] allows the [receiver] to request a ninety-day stay in the 4 litigation after its appointment and requires the court to grant such a stay.”); Hunter v. Citibank, 5 N.A., No. C 09-02079 JW, 2011 WL 7462143, at *1 n.3 (N.D. Cal. May 5, 2011) (“[12 U.S.C.] 6 Section 1821(d)(12)(A) provides that the FDIC as receiver is entitled to a stay for up to 90 days in 7 any judicial action to which it becomes a party.” (alteration in original) (quoting Cipponeri v. 8 FDIC, No. 1:09-cv-0688 AWI DLB, 2009 WL 1861837, at *2 (E.D. Cal. June 29, 2009))). 9 Courts have interpreted Section 1821(d)(12) to entitle the receiver “to a stay whose outer 10 bound is 90 days after the receiver’s appointment (no matter when the receiver requests the stay).” 11 Praxis Props., 947 F.2d at 70; see id. at 71; In re Cmty. Bank of N. Va., 418 F.3d 277, 293 (3d Cir. 12 2005) (noting that the Court of Appeals “granted the FDIC’s request for a ninety day stay from the 13 date of its appointment as receiver); Protzmann v. Hist. Real Est. and Finance, No. CV 08-03385 14 SJO (JCx), 2009 WL 10672326, at *2 (C.D. Cal. Jan. 23, 2019). “In other words, regardless of 15 when the receiver requests the stay, the 90-day stay . . . must expire 90 days after the receiver’s 16 appointment.” Protzmann, 2009 WL 10672326, at *2. 17 FDIC, however, requests a stay of 90 days “to commence from the date of” this Court’s 18 orders on its motions to stay. E.g., Case No. 23-cv-01606-JST, ECF No. 13-1 at 2. In its motions, 19 FDIC indicates that it was appointed as receiver of Silicon Valley Bank on March 10, 2023. E.g., 20 Case No. 23-cv-01606-JST, ECF No. 13, at 3. The statute thus entitled FDIC to a stay until June 21 8, 2023. As a result, “FDIC is no longer entitled to a stay of this litigation.” Protzmann, 2009 WL 22 10772326, at *2. To conclude otherwise would permit FDIC to “‘litigate this case for years and 23 then request a stay for 90 days whenever it pleased,’ which would afford the FDIC ‘carte blanche 24 to stay a judicial proceeding at any time it feels it needs a 90-day break from the rigors of 25 litigation.’” Id. (first quoting Nassirpour v. FDIC, No. CV 08-7164-GHK (AJWx), 2008 WL 26 5412432, at *3 (C.D. Cal. Dec. 29, 2008); and then quoting Praxis Props., 947 F.3d at 69). 27 / / / 1 For these reasons, FDIC’s motions are denied. 2 IT IS SO ORDERED.

3 Dated: July 11, 2023 4 JON S. TIGAR 5 nited States District Judge 6 7 8 9 10 11 a 12

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