Source: http://co.findacase.com/research/wfrmDocViewer.aspx/xq/fac.20180319_0000355.DCO.htm/qx
Timestamp: 2019-04-19 18:17:43+00:00

Document:
This matter comes before the Court on Defendant's 12(b)(1) and (6) Motion to Dismiss WebBank's Complaint [Dkt. #1] [Docket No. 17].
This case is related to a separate action captioned Meade v. Avant of Colorado, LLC, No. 17-cv-0620-WJM-STV (“Avant” or the “enforcement action”). In the enforcement action, the defendant here, Julie Ann Meade (the “Administrator”), seeks to enforce Colorado's statutory limits on finance and delinquency charges in her role as the Administrator of the Colorado Uniform Consumer Credit Code. Avant, 2018 WL 1101672, at *1 (D. Colo. Mar. 1, 2018). The defendant in the enforcement action, Avant of Colorado, LLC (“Avant”), is a “servicing partner” that purchases WebBank-originated loans. Docket No. 1 at 2, ¶¶ 3, 5. W ebBank is not a party to the enforcement action. Avant, 2018 WL 1101672, at *1; Docket No. 1 at 2, ¶ 5. On March 9, 2017, Avant removed the enforcement action to federal court in this district. Avant, 2018 WL 1101672, at *1.
On March 28, 2017, WebBank filed its complaint in this lawsuit. Docket No. 1. WebBank alleges that the enforcement action “directly interferes with WebBank's core lending power and is foreclosed by federal law.” Id. at 1, ¶ 1. WebBank claims that, as a “federally regulated bank, federally insured by the Federal Deposit Insurance Corporation (“FDIC”), . . . WebBank lends to borrowers on a uniform, nationwide basis, using the authority provided by Section 27 of the Federal Deposit Insurance Act (“FDIA”), 12 U.S.C. § 1831d.” Docket No. 1 at 1, ¶ 2. WebBank seeks a declaratory judgment that Colo. Rev. Stat. §§ 5-1-201(8), 5-2-201, and 5-2-203 (collectively “Colorado usury laws”) are “expressly preempted by Section 27 of the Federal Deposit Insurance Act as to loans originated by WebBank.” Docket No. 1 at 31, ¶ 93. WebBank further seeks a permanent injunction against the Administrator to prevent her from enforcing Colorado usury laws against “WebBank, any loans originated by WebBank, or any assignee, partner, program, and/or servicer with respect to their involvement with any loans originated by WebBank.” Id. at 31-32, ¶ 94.
On March 31, 2017, the Administrator filed a motion to remand the enforcement action. Avant, 2018 WL 1101672, at *1. On April 25, 2017, the Administrator filed the current motion to dismiss this case. Docket No. 17. The Administrator argues that WebBank lacks standing because it alleges only attenuated injury and that WebBank fails to state a claim because Colorado usury laws are not preempted when applied to non-bank entities. Id. at 4-11. The Administrator also argues that, in the event the enforcement action is remanded to state court, the Court must abstain from hearing WebBank's claim pursuant to Younger v. Harris, 401 U.S. 37 (1971), or, in the alternative, that the Court should decline to exercise jurisdiction to issue a declaratory judgment. Docket No. 17 at 12-15.
On March 1, 2018, Judge William J. Martínez granted the Administrator's motion to remand the enforcement action to state court. Avant, 2018 WL 1101672, at *15.
As to the first prong of the Younger analysis, the enforcement action is pending in state court. See Avant, 2018 WL 1101672, at *15. As to the second prong, enforcing laws regulating lending practices implicates an important state interest. See Epes v. Green Tree Servicing, LLC, 2004 WL 5571941, at *10 (E.D. Va. Dec. 14, 2004) (“[T]he state has an important interest in protecting citizens from predatory lending practices and usury.” (citations omitted)). The relief WebBank seeks - an order enjoining the Administrator from enforcing Colorado usury laws against anyone involved with its loans - would have a significant effect on the State's ability to regulate lending. See Docket No. 17 at 13-14; Colo. Rev. Stat. §§ 5-6-114 (empowering the Administrator to enforce Colorado's usury laws by civil action). As to the third prong, WebBank does not argue or allege any facts showing that Avant would be unable to raise preemption challenges in relation to the WebBank-initiated loans that it owns, and the Court finds no basis for so concluding. Cf. Stoorman v. Greenwood Trust Co., 908 P.2d 133 (Colo. 1995) (finding that federal law preempts Colorado's limitations on loan fees and interest charges by a federally-insured, state-chartered bank).
WebBank presents three arguments that abstention is nevertheless inappropriate here: (1) WebBank is not a party to the enforcement action and is not an alter ego of Avant, (2) the Younger abstention doctrine was narrowed by Sprint Commc'ns, Inc. v. Jacobs, 134 S.Ct. 584 (2013), such that it does not apply to the enforcement action, and (3) preemption under Section 27 of the FDIA is “facially conclusive” such that no state interest would be served by allowing the state court to act. Docket No. 23 at 14. The Court addresses these arguments in turn.

References: v. 
 § 1831
 v. 
 v. 
 v. 
 v.