Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_09-cv-03382/USCOURTS-caed-2_09-cv-03382-2/pdf.json

Nature of Suit Code: 140
Nature of Suit: Negotiable Instruments
Cause of Action: 15:1601 Truth in Lending

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1

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

JESS C. REYES, No. 2:09-cv-03382-MCE-KJM

Plaintiff,

v. MEMORANDUM AND ORDER

INDYMAC FEDERAL BANK, 

et. al.,

Defendants.

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This action arises out of a mortgage loan transaction in

which Plaintiff Jess Reyes (“Plaintiff”) obtained a home loan in

June 2006. Presently before the Court, Defendant Federal Deposit

Insurance Company as Receiver for IndyMac Federal Bank FSB

(“Defendant”) moves the Court for an Order Requiring Pre-Filing

Review Against Plaintiff’s counsel, Sharon Lapin. 

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 Because oral argument will not be of material assistance, 1

the Court orders this matter submitted on the briefs. E.D. Cal.

Local Rule 230 (g). 

2

Specifically, Defendant seeks an order requiring Ms. Lapin

to seek leave of court before filing complaints in state or

federal courts against the entities IndyMac Federal Bank, IndyMac

Bank, or the Federal Deposit Insurance Company (“FDIC”) in its

capacity as Receiver for either IndyMac Federal Bank or IndyMac

Bank. For the reasons set forth below, Defendant’s Motion is

denied.1

BACKGROUND

On March 1, 2010 the Court dismissed this case for lack of

subject matter jurisdiction (Docket No. 21) due to Plaintiff’s

late-filed First Amended Complaint failing to contain any federal

claims to support the previously held federal question

jurisdiction. The case is currently closed. Defendant’s current

Motion is occurring post-judgment.

On March 19, 2009 the FDIC completed a sale of IndyMac

Bank’s assets to OneWest Bank Group, LLC. Thus, if a former

IndyMac customer is facing foreclosure proceedings, Defendant is

no longer the proper party to file suit against. Defendant

states that Ms. Lapin was aware of the sale and the impropriety

of filing suit against Defendant and yet she continued to file

claims while failing to exhaust the administrative remedies

available to her clients. 

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3

Furthermore, on November 12, 2009, Defendant made a formal

“Determination that Insufficient Assets Exist to Make

Distribution on General Unsecured Claims,” meaning that any

unsecured claims against Defendant officially have no value. 

Therefore, Ms. Lapin’s clients cannot obtain monetary relief from

Defendant. Defendant asserts Ms. Lapin was aware of this

information as well.

Defendant states that it communicated with Ms. Lapin several

times regarding these various issues and yet she continues to

file suit against Defendant. Resultantly, Defendant requests an

order requiring Ms. Lapin to seek pre-filing review.

ANALYSIS

It is a well-established rule that the Court posses inherent

power to levy sanctions in response to abusive litigation

practices. Roadway Express, Inc. V. Piper, 447 U.S. 752, 765

(1980). District courts have the authority to file restrictive

pre-filing orders against vexatious litigants with abusive and

lengthy histories of litigation. De Long v. Hennessey, 912 F.2d

1144, 1147 (9th Cir. 1990). Nonetheless, the Ninth Circuit has

cautioned that such pre-filing orders “should rarely be filed.” 

Id. (citing In re Powell, 851 F.2d 427, 431 (D.C. Cir. 1988)

(such orders should “remain very much the exception to the

general rule of free access to the courts”)).

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4

Defendant is accusing Ms. Lapin of such abusive litigation

practices; however, the relief Defendant seeks cannot be

presently afforded. At the time this case was dismissed the FDIC

had not yet been substituted as Receiver for IndyMac. Rather

that substitution occurred post-judgment. Consequently, the

legal concerns which Defendant points to— the need to seek

administrative remedies, the fact that monetary relief was

unavailable- were not active issues before the Court as the FDIC

was not an active participant at the time the matter was filed,

considered, and eventually dismissed. While one can sympathize

with Defendant’s frustrations, it would be improper for this

Court to grant the extraordinary remedy requested in a case where

the FDIC was at no time a party during the lifespan of the suit. 

Accordingly, Defendant’s request must be denied.

CONCLUSION

For the reasons stated above, Defendant’s Motion for an

Order Requiring Pre-Filing Review (Docket No. 25) is hereby

DENIED.

IT IS SO ORDERED.

Dated: June 10, 2010

_____________________________

MORRISON C. ENGLAND, JR.

UNITED STATES DISTRICT JUDGE

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