Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_04-cv-01850/USCOURTS-caed-2_04-cv-01850-1/pdf.json

Nature of Suit Code: 430
Nature of Suit: Banks and Banking
Cause of Action: 29:754 Discrimination

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1 All references to the Rules are to the Federal Rules of Civil

Procedure unless otherwise specified.

1

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

SERGEI PORTNOY, No. CIV.S-04-1850 DFL DAD PS

Plaintiff,

v. FINDINGS AND RECOMMENDATIONS

US BANK, et al.,

Defendants.

____________________________/

This matter came before the court on February 4, 2005, for

hearing on defendants’ motion to dismiss plaintiff’s second amended

complaint pursuant to Federal Rules of Civil Procedure 12(b)(1) and

12(b)(6).1 Plaintiff, proceeding pro se, appeared on his own behalf. 

Juan C. Basombrio appeared on behalf of defendants. Having

considered all materials submitted in connection with motion, and

after hearing oral argument, the undersigned will recommend that

defendants’ motion to dismiss be granted in part and denied in part.

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LEGAL STANDARDS

Rule 12(b)(1) allows a party by motion to raise the defense

that the court lacks “jurisdiction over the subject matter” of a

claim. “A motion to dismiss for lack of subject matter jurisdiction

may either attack the allegations of the complaint or may be made as

a ’speaking motion’ attacking the existence of subject matter

jurisdiction in fact.” Thornhill Publ’g Co. v. Gen. Tel. &

Electronics, 594 F.2d 730, 733 (9th Cir. 1979)(citations omitted). 

In the latter instance, no presumption of truthfulness attaches to

plaintiff's allegations. Id. “[T]he district court is not

restricted to the face of the pleadings, but may review any evidence,

such as affidavits and testimony, to resolve factual disputes

concerning the existence of jurisdiction.” McCarthy v. United

States, 850 F.2d 558, 560 (9th Cir. 1988)(citations omitted). The

burden of proof on a Rule 12(b)(1) motion is on the party asserting

jurisdiction. Thornhill Publ’g Co., 594 F.2d at 733.

In contrast, pursuant to Rule 12(b)(6) a complaint, or

portion thereof, should only be dismissed for failure to state a

claim upon which relief can be granted if it appears beyond doubt

that the plaintiff can prove no set of facts in support of the claim

or claims that would entitle him to relief. Hishon v. King &

Spalding, 467 U.S. 69, 73 (1984) (citing Conley v. Gibson, 355 U.S.

41, 45-46 (1957)); Palmer v. Roosevelt Lake Log Owners Ass'n, 651

F.2d 1289, 1294 (9th Cir. 1981). In reviewing a complaint under this

standard, the court must accept as true the allegations of the

complaint. Hospital Bldg. Co. v. Rex Hosp. Trustees, 425 U.S. 738,

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3

740 (1976). Furthermore, the court must construe the pleading in the

light most favorable to the plaintiff, and resolve all doubts in the

plaintiff's favor. See Jenkins v. McKeithen, 395 U.S. 411, 421

(1969).

ANALYSIS

This action stems from a dispute between plaintiff and

defendant U.S. Bank National Association (“U.S. Bank” or “bank”)

which resulted in the closing of plaintiff’s checking account at a

branch of U.S. Bank. The named defendants in the second amended

complaint are U.S. Bank and its employees Sarah Robinson and Jerri

Tehee.

Plaintiff’s second amended complaint is somewhat difficult

to decipher. However, liberally construed the third cause of action

-- the lone federal cause of action -- alleges that defendant failed

to live up to its obligation to make available the funds from

deposited cash in a timely fashion. The undersigned finds that such

allegations are sufficient to establish federal subject matter

jurisdiction under the Expedited Funds Availability Act ("EFAA").

The EFAA provides that when “any cash is deposited in an

account at a receiving depository institution staffed by individuals

employed by such institution ... such cash or funds shall be

available for withdrawal not later than the business day after the

business day on which such cash is deposited or such funds are

received for deposit.” 12 U.S.C. § 4002(a)(1). See also 12 C.F.R. §

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2 The second amended complaint alludes to this regulation,

which provides as follows:

(a) Cash deposits.

(1) A bank shall make funds deposited in an

account by cash available for withdrawal not

later than the business day after the banking day

on which the cash is deposited, if the deposit is

made in person to an employee of the depositary

bank.

(2) A bank shall make funds deposited in an

account by cash available for withdrawal not

later than the second business day after the

banking day on which the cash is deposited, if

the deposit is not made in person to an employee

of the depositary bank.

12 C.F.R. § 229.10 

4

229.10.2 A depository institution which does not comply with these

provisions is liable to the depositing individual for any actual

damages sustained by that person because of the bank's failure;

statutory damages of between $100 and $1000; and costs and attorney's

fees. 12 U.S.C. § 4010(a); 12 C.F.R. § 229.21(a). See Beffa v. Bank

of the West, 152 F.3d 1174, 1176 (9th Cir. 1998)(“The Act

specifically provides that banks are civilly liable to individuals

damaged as a result of an EFAA violation.). Finally, the civil

liability provisions of EFAA provide for federal court jurisdiction

over such suits. See 12 U.S.C. § 4010(d)(“Any action under this

section may be brought in any United States district court, or in any

other court of competent jurisdiction, within one year after the date

of the occurrence of the violation involved.”).

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For these reasons, the undersigned will recommend that

defendants’ motion to dismiss for lack of subject matter jurisdiction

be denied.

The undersigned will also recommend that the motion to

dismiss for failure to state a claim be denied to the extent that it

seeks dismissal of the third cause of action as to defendant U.S.

Bank. As set forth above, the civil liability provisions of EFAA

refer only to a “depository institution” such as defendant U.S. Bank. 

12 U.S.C. § 4010(a). Those provisions do not pertain to bank

employees such as defendants Sarah Robinson and Jerri Tehee. 

Further, the term “depository institution” is defined in 12 U.S.C. §

461(b)(1)(A). See 12 U.S.C. § 4001(12). That lengthy definition

does not encompass individual bank employees. Finally, while the

undersigned has been unable to identify any authority specifically

addressing the issue, limiting liability to the defendant bank is

consistent with Supreme Court authority addressing the scope of

EFAA’s civil liability provisions. See Bank One Chicago, N.A. v.

Midwest Bank & Trust Company, 516 U.S. 264 (1996)(holding civil

liability provisions encompass suits by customers against banks as

well as suits by one bank against another bank). For these reasons,

the undersigned will recommend that the third cause of action be

dismissed as to defendants Robinson and Tehee for failure to state a

claim.

The undersigned will also recommend that the first, second

and eighth causes of action be dismissed as to all defendants. Those

causes of action are brought pursuant to the California Fair

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Employment and Housing Act (“FEHA”) and Article I, Section 8 of the

California Constitution. It is undisputed that plaintiff was not an

employee of the bank. As such, FEHA is obviously inapplicable. See

Shephard v. Loyola Marymount Univ., 102 Cal. App. 4th 837, 842, 125

Cal. Rptr. 2d 829, 832 (2002) ("In order to recover under the

discrimination in employment provisions of the FEHA, the aggrieved

plaintiff must be an employee."). Plaintiff’s reliance on Article I,

Section 8 of the California Constitution is also misplaced. See

Strother v. Southern Cal. Permanente Medical Group, 79 F.3d 859, 871

(9th Cir. 1996)("a claim brought directly under Article I, § 8 of the

California Constitution may only be brought where a plaintiff has

been denied entrance into a profession or particular employment or

terminated from the same”). Therefore, plaintiff’s first, second and

eighth causes of action must be dismissed in their entirety for

failure to state a claim.

Finally, defendants’ motion does not challenge the second

amended complaint’s fourth, fifth, sixth or seventh causes of action. 

Those causes of action are state law claims for breach of implied

contract, breach of the covenant of good faith and fair dealing,

intentional infliction of emotion distress and negligent infliction

of emotional distress, respectively. Those claims are alleged as to

defendant U.S. Bank only. Thus, if the recommendation set forth

herein is adopted this action will proceed as to U.S. Bank only and

only as to plaintiff’s third, fourth, fifth, sixth and seventh causes

of action.

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Accordingly, IT IS HEREBY RECOMMENDED that:

1. Defendants’ motion to dismiss for lack of subject

matter jurisdiction be denied;

2. Defendants’ motion to dismiss for failure to state a

claim be granted as to the third cause of action with respect to

defendants Robinson and Tehee only; 

3. Defendants’ motion to dismiss for failure to state a

claim be granted as to the first, second and eighth causes of action

with respect to all defendants; and

4. Defendant U.S. Bank be directed to file an answer

within twenty (20) days of any order adopting these findings and

recommendations.

These findings and recommendations are submitted to the

United States District Judge assigned to the case pursuant to the

provisions of 28 U.S.C. § 636(b)(l). Within ten (10) days after

being served with these findings and recommendations, any party may

file written objections with the court and serve a copy on all

parties. Such a document should be captioned “Objections to Findings

and Recommendations.” The parties are advised that failure to file

objections within the specified time may waive the right to appeal

the District Court's order. Martinez v. Ylst, 951 F.2d 1153 (9th

Cir. 1991).

DATED: April 18, 2005.

DAD:th

Ddadl\orders.prose\portnoy1850.f&r

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