Opinion ID: 2977052
Heading Depth: 2
Heading Rank: 3

Heading: asi’s counterclaims

Text: 21 Nos. 07-3102, 07-3211 As stated above, this Court reviews the district court’s grant of summary judgment de novo. The district court’s grant of a motion to dismiss is also reviewed de novo. Dubay v. Wells, 506 F.3d 422, 427 (6th Cir. 2007). A motion to dismiss may be granted only if “it appears beyond doubt that the plaintiff can prove no set of facts which would entitle him to relief.” Id. (quoting Ricco v. Potter, 377 F.3d 599, 602 (6th Cir.2004)). All factual allegations must be viewed in the light most favorable to the plaintiff, and this Court must make all reasonable inferences from the facts in the complaint in favor of the plaintiff. Id.
The district court granted Plaintiff’s motions for summary judgment on ASI’s counterclaims and Plaintiff’s motion to dismiss the counterclaims because the court found that ASI was never properly appointed as UTCU’s conservator and thus lacked standing to bring the counterclaims. The district court held that pursuant to Ohio law, a conservator may only be appointed by the Superintendent of the Division of Financial Institutions and not by the Deputy Superintendent for Credit Unions. Since ASI was appointed conservator of UTCU by Roberts, Acting Deputy Superintendent of Credit Unions, the district court held that ASI lacked standing to bring counterclaims against Plaintiff. Defendants ask this Court to either vacate or reverse the district court’s grant of summary judgment for Plaintiff and its dismissal of ASI’s counterclaims for a variety of reasons. Defendants argue that the judgment should be vacated because ASI’s counterclaims were rendered moot by the district court’s grant of summary judgment on Plaintiff’s ERISA claims, by DFI’s re-appointment 22 Nos. 07-3102, 07-3211 of ASI as UTCU’s conservator, and by the state courts’ assumption of exclusive jurisdiction over any challenge to the appointment of a conservator. Alternatively, Defendants assert that this Court should reverse the district court on the merits. Pursuant to Article III of the Constitution, federal courts “may only adjudicate actual, ongoing controversies.” Honig v. Doe, 484 U.S. 305, 317 (1988). Thus, a case must present “a real and substantial controversy admitting of specific relief through a decree of a conclusive character, as distinguished from an opinion advising what the law would be upon a hypothetical state of facts.” Preiser v. Newkirk, 422 U.S. 395, 401 (1975) (quoting North Carolina v. Rice, 404 U.S. 244, 246 (1971)). The Supreme Court has recognized that an action may become moot at any stage of review. United States Bancorp Mortg. Co. v. Bonner Mall Partnership, 513 U.S. 18, 21 (1994). “When a civil case becomes moot pending appellate adjudication, the established practice in the federal system is to reverse or vacate the judgment below and remand with a direction to dismiss.” Stewart v. Blackwell, 473 F.3d 692, 693 (6th Cir. 2007) (en banc order) (quoting Coalition for Gov't Procurement v. Federal Prison Indus., Inc., 365 F.3d 435, 484 (6th Cir. 2004) (internal quotation marks omitted)). However, vacatur is not appropriate in all cases and is generally utilized “to avoid entrenching a decision rendered unreviewable through no fault of the losing party.” Id. Defendants assert that ASI’s counterclaims were meant as a setoff to Plaintiff’s ERISA claim and were rendered moot when the district court granted summary judgment for Defendants on the ERISA claim. A claim that a judgment in favor of a plaintiff be set off to compensate for the plaintiff’s wrongdoing would necessarily be mooted by a dismissal of the plaintiff’s claim. See Sweet Pea Marine, Ltd. v. APJ Marine, Inc., 411 F.3d 1242, 1251 (11th Cir. 2005). However, ASI’s 23 Nos. 07-3102, 07-3211 answer in which it sets forth its counterclaims does not frame the counterclaims as conditional upon the success of Plaintiff’s ERISA claim. ASI’s answer states: Defendant ASI asserts these claims for affirmative relief and, alternatively, to the extent this Court were to find that Plaintiff Hughes is otherwise entitled to employee benefits under ERISA, for forfeiture, mitigation, restitution, set-off, and recoupment. (J.A. 96.) Because ASI’s request for relief as a set-off to any damages awarded Plaintiff was clearly a fallback from its main request for affirmative relief, ASI’s argument that its counterclaims were mooted by the disposition of Plaintiff’s ERISA claim is not convincing. Defendants also assert that Plaintiff’s challenge to ASI’s standing has become moot because DFI has re-appointed ASI as UTCU’s conservator pursuant to undoubtedly legitimate procedures. Although we agree that DFI’s re-appointment of ASI moots the question of whether ASI had standing to pursue litigation, this fact alone is insufficient to require vacatur of the district court’s judgment. The Supreme Court has made clear that vacatur is proper where appellate review results from the unilateral action of the party that prevailed below or is “prevented through happenstance.” Bonner Mall, 513 U.S. at 22-23 (quoting United States v. Munsingwear, Inc., 340 U.S. 36, 40 (1950)). The Court explained that the equitable tradition of vacatur ensures that a losing party is not bound by a ruling that is set in stone due to “the vagaries of circumstance” or the prevailing party’s unilateral action. Id. at 25. However, when the losing party causes mootness by his own action “[t]he judgment is not unreviewable, but simply unreviewed by his own choice.” Id. Thus, absent exceptional circumstances, vacatur is inappropriate where the party that lost at the district court caused the mootness by settlement or other actions of its own. Id. at 29. As a result, DFI’s 24 Nos. 07-3102, 07-3211 reappointment of ASI as UTCU’s conservator cannot justify vacatur of the district court’s judgment unless justified by extraordinary circumstances. Defendants argue that vacatur is necessary because Ohio courts have exclusive jurisdiction over challenges to administrative orders. In support of their contentions, Defendants cite Gaunce v. deVincentis, 708 F.2d 1290 (7th Cir. 1983), and Green v. Brantley, 981 F.2d 514 (11th Cir. 1993), for the proposition that “collateral attacks upon administrative orders are not permissible.” (ASI Br. 57 (quoting Gaunce, 708 F.2d at 1293).) Gaunce and Brantley are inapposite because both address the ability of federal courts to entertain collateral attacks on federal administrative orders. The Supreme Court has held that “where Congress has provided statutory review procedures designed to permit agency expertise to be brought to bear on particular problems, those procedures are to be exclusive.” Whitney Nat. Bank in Jefferson Parish v. Bank of New Orleans & Trust Co., 379 U.S. 411, 420 (1965). Defendants’ arguments fail to provide a basis for any contention that the federal courts lack the ability to exercise jurisdiction with respect to an action grounded in the ERISA statute. As a result, ASI’s argument that the district court lacked jurisdiction to determine ASI’s standing is unpersuasive. Defendants also argue that vacatur is appropriate because the district court’s judgment relied upon a decision by the Franklin County Court of Common Pleas that was subsequently overruled on appeal. The district court specifically relied upon the Ohio court’s holding that ratification by the Superintendent of the Division of Financial Institutions after the fact was insufficient to remedy an invalid appointment of a conservator. Defendants claim that this reliance is undermined by the fact that the Common Pleas’ court’s decision was overturned. However, the Ohio Court of Appeals 25 Nos. 07-3102, 07-3211 overturned the lower court’s decision solely upon procedural grounds that do not undermine the substantive basis of the lower court’s holding. As a result, Defendants have made no showing of extraordinary circumstances, and vacatur is inappropriate. Thus, we dismiss ASI’s appeal of the dismissal of its counterclaim as moot.