Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_12-cv-01207/USCOURTS-casd-3_12-cv-01207-0/pdf.json

Nature of Suit Code: 480
Nature of Suit: Consumer Credit
Cause of Action: 28:1331 Fed. Question

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

NORMAN SHAW,

Plaintiff,

Case No. 12-cv-1207 DMS (BLM)

ORDER DENYING EX PARTE 

MOTION TO STAY

v.

BANK OF AMERICA ET AL.,

Defendants.

Pending before the Court is Plaintiff Norman Shaw’s ex parte motion to stay

proceedings pending resolution of his petition for writ of mandamus in the Court of 

Appeals for the Ninth Circuit. For the reasons stated below, Plaintiff’s motion is 

denied.

I.

BACKGROUND

On July 21, 2017, Defendant U.S. Bank, N.A. filed a motion to dismiss 

Plaintiff’s First Amended Complaint (“FAC”) pursuant to Federal Rule of Civil 

Procedure 12(b)(1). Defendant contended the Financial Institutions Reform, 

Recovery, and Enforcement Act of 1989 (“FIRREA”) bars this Court from hearing 

Plaintiff’s claim under the Truth in Lending Act (“TILA”) because Plaintiff failed 

to exhaust his mandatory administrative remedies. 

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On August 8, 2017, Plaintiff filed a motion to stay and to conduct discovery, 

contending he needed to conduct discovery in order to fully respond to Defendant’s 

motion to dismiss. Specifically, Plaintiff argued it was necessary to determine (1) 

“whether Plaintiff’s loan was sold prior to the date the FDIC placed [Washington 

Mutual Bank, F.A.] in receivership[,]” (2) “whether exhaustion of remedies would 

have been futile[,]” and (3) “whether exhaustion of FIRREA actually occurred.” 

(ECF No. 88, Ex Parte Mot. at 7–10.) On August 14, 2017, the Court denied the 

motion on grounds that the first request for discovery was irrelevant to forming an 

opposition to the motion to dismiss, and Plaintiff had not made a sufficient showing 

in support of the second and third requests for discovery. On September 6, 2017, 

Plaintiff filed a petition for writ of mandamus in the Ninth Circuit, requesting 

reversal of this Court’s denial of his motion. Thereafter, the present motion to stay 

followed.

II.

DISCUSSION

“[T]he power to stay proceedings is incidental to the power inherent in every 

court to control the disposition of the causes on its docket with economy of time and 

effort for itself, for counsel, and for litigants.” Landis v. N. Am. Co., 299 U.S. 248, 

254 (1936). The party seeking a stay bears the burden of justifying the exercise of 

that discretion. Nken v. Holder, 556 U.S. 418, 433–34 (2009). In deciding whether 

to issue a stay pending an appeal, the district court must apply the same four-part 

standard it applies in reviewing requests for a preliminary injunction. Hilton v. 

Braunskill, 481 U.S. 770, 776 (1987). A party seeking a stay “must establish that he 

is likely to succeed on the merits, that he is likely to suffer irreparable harm in the 

absence of preliminary relief, that the balance of equities tips in his favor, and that 

an injunction is in the public interest.” Winter v. Nat. Res. Def. Council, Inc., 555 

U.S. 7, 20 (2008). Alternatively, “‘serious questions going to the merits’ and a 

balance of hardships that tips sharply towards the plaintiff can support issuance of a 

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[stay], so long as the plaintiff also shows that there is a likelihood of irreparable 

injury and that [a stay] is in the public interest.” All. for Wild Rockies v. Cottrell, 

632 F.3d 1127, 1131–32 (9th Cir. 2011). 

A. Likelihood of Success on the Merits

Whether Plaintiff will succeed on the merits turns on whether the Ninth 

Circuit will grant his petition for writ of mandamus. Plaintiff contends he is likely 

to succeed on the merits of his mandamus petition because the Court erred by relying 

on Defendants’ arguments, which “offered no meaningful support for any contention 

that discovery should be denied[,]” and the Court’s order “lack[ed] citation to 

authority to support [its] decision[.]” (ECF No. 93, Ex Parte Mot. at 5.) The remedy 

of mandamus, however, “is a drastic one, to be invoked only in extraordinary 

situations.” Kerr v. U.S. Dist. Court, 426 U.S. 394, 402 (1976). “[O]nly exceptional 

circumstances amounting to a judicial usurpation of power ... or a clear abuse of 

discretion ... will justify the invocation of this extraordinary remedy.” Cheney v. 

U.S. Dist. Ct., 542 U.S. 367, 380 (2004) (internal quotation marks and citations 

omitted).

The petitioner has the burden to establish “that its right to issuance of the writ 

is clear and indisputable.” Bankers Life & Cas. Co. v. Holland, 346 U.S. 379, 384 

(1953) (internal quotation omitted). The Ninth Circuit applies a five-factor test to 

determine whether mandamus relief is warranted:

(1) The party seeking the writ has no other adequate means, such as a 

direct appeal, to attain the relief he or she desires. (2) The petitioner 

will be damaged or prejudiced in a way not correctable on appeal.... (3) 

The district court’s order is clearly erroneous as a matter of law. (4) The 

district court’s order is an oft-repeated error, or manifests a persistent 

disregard of the federal rules. (5) The district court’s order raises new 

and important problems, or issues of law of first impression. 

DeGeorge v. U.S. Dist. Ct. for Cent. Dist. of Cal., 219 F.3d 930, 934 (9th Cir. 2000) 

(quoting Bauman v. U.S. Dist. Ct., 557 F.2d 650 (9th Cir. 1977)). “In analyzing the 

Bauman factors, ... [n]ot every factor need be present at once; indeed, the fourth and 

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fifth will rarely be present at the same time.” Clemens v. U.S. Dist. Ct., 428 F.3d 

1175, 1178 (9th Cir. 2005) (internal quotation marks omitted). “However, the 

absence of the third factor, clear error, is dispositive.” Id. (internal quotation marks 

and citation omitted).

Given that the absence of the third factor, clear error factor, is dispositive, the 

Court will address it first. As the Ninth Circuit has explained, “‘[b]road discretion 

is vested in the trial court to permit or deny discovery, and its decision to deny 

discovery will not be disturbed except upon the clearest showing that denial of 

discovery results in actual and substantial prejudice to the complaining litigant.’” 

Hallett v. Morgan, 296 F.3d 732, 751 (9th Cir. 2002) (quoting Goehring v. Brophy, 

94 F.3d 1294, 1305 (9th Cir. 1996)). The Court denied the first request for discovery 

because it was not relevant to forming an opposition to the motion to dismiss. The 

sole argument in Defendant’s motion to dismiss was that Plaintiff’s TILA claim is 

barred by the jurisdiction-stripping provisions of FIRREA. Plaintiff initially 

contended discovery was necessary to determine whether his loan was sold prior to 

the date the FDIC placed Washington Mutual Bank, F.A. (“WaMu”) in receivership. 

However, whether the loan was sold prior to or after such date is irrelevant because 

Plaintiff’s TILA claim against Defendant “relat[e] to any act or omission” of the 

original bank, WaMu. FIRREA requires exhaustion of “any claim relating to any 

act or omission of [any depository institution for which the FDIC has been appointed 

receiver].” 12 U.S.C. § 1821(d)(13)(D)(ii). Plaintiff TILA claim, which stems from 

alleged disclosure defects in the original loan documents, is “based on the conduct 

of the failed institution” because the operative loan documents were drafted and 

executed by WaMu, not Defendant. Rundgren v. Wash. Mut. Bank, FA, 760 F.3d 

1056, 1064 (9th Cir. 2014). 

Moreover, the Court denied Plaintiff’s second and third requests for discovery 

because Plaintiff had not made a sufficient showing in support of these requests. 

Plaintiff argued discovery was necessary to determine whether exhaustion of 

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administrative remedies would have been futile and whether exhaustion of FIRREA 

occurred. Plaintiff, however, “g[a]ve [the Court] no reason to believe that FIRREA 

exhaustion would have been futile had [he] submitted [his claim] within the 

appropriate time frame.” Benson v. JPMorgan Chase Bank, N.A., 673 F.3d 1207, 

1213 (9th Cir. 2012). Nor did Plaintiff provide any argument as to whether his claim 

is “otherwise not susceptible of resolution through FIRREA’s administrative 

procedure[.]” Rundgren v. Wash. Mut. Bank, FA, 760 F.3d 1056, 1061 (9th Cir. 

2014) (citation omitted). In addition, because a claimant must first complete claim 

procedure under the FIRREA before seeking judicial review, Plaintiff is in the best 

position to know whether he exhausted his remedies under FIRREA. See Henderson 

v. Bank of New England, 986 F.2d 319, 321 (9th Cir. 1993). In light of the foregoing, 

the Court concludes that it did not commit clear error in denying Plaintiff’s motion. 

Accordingly, Plaintiff has failed to show a likelihood of success on the merits. 

B. Irreparable Injury

Next, the Court will consider the irreparable injury to Plaintiff in the absence 

of the stay. Plaintiff must show more than a mere “possibility” of irreparable harm, 

but instead he must “demonstrate that irreparable injury is likely in the absence of [a 

stay].” Winter, 555 U.S. at 22; see Am. Trucking Ass’ns Inc. v. City of L.A., 559 F.3d 

1046, 1052 (9th Cir. 2009). “Speculative injury cannot be the basis for a finding of 

irreparable harm.” In re Excel Innovations, Inc., 502 F.3d 1086, 1098 (9th Cir. 

2007). Plaintiff argues he will suffer irreparable injury of “los[ing] his entire case”

should Defendant prevail in its motion to dismiss. (ECF No. 93, Ex Parte Mot. at 

5.) This is insufficient to support a finding that Plaintiff will suffer irreparable harm 

in the absence of a stay. Plaintiff does not demonstrate any immediate threatened 

injury in the absence of the stay. In any event, the Court has expressly stated at the 

mandate hearing that it may hold an evidentiary hearing upon receiving full briefing 

by both parties: “What I would suggest is that we set a briefing schedule and a 

hearing. Have the matter briefed by the parties. Then I can determine, after seeing 

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the briefs, whether or not evidence needs to be taken, or whether the court can engage 

in fact finding based on the briefing. And perhaps there may be undisputed facts 

that the court can determine, or it may be necessary to take evidence and have an 

evidentiary hearing. But I won’t know that until I read the briefs.” (ECF No. 90, 

Transcript of Mandate Hearing at 6–7.) Because Plaintiff has failed to show 

likelihood of success on the merits and likely irreparable harm, the Court need not 

address the balance of equities and public interest factors. 

III.

CONCLUSION

For the reasons stated above, Plaintiff’s motion to stay is denied. Plaintiff 

shall file his opposition to Defendant’s motion to dismiss on or before October 20, 

2017, and Defendant shall file its reply brief on or before October 27, 2017. The 

hearing on the motion to dismiss is scheduled for November 3, 2017, at 1:30 p.m.

IT IS SO ORDERED.

Dated: October 4, 2017

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