Opinion ID: 8704066
Heading Depth: 5
Heading Rank: 1

Heading: Whether DB and BNP Have Article III Standing

Text: As the party invoking federal jurisdiction, BOA bears the burden of establishing standing. Lujan v. Defenders of Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992); City of Waukesha v. Envtl. Prot. Agency, 320 F.3d 228, 233 (D.C.Cir.2003) (per curiam). In Lujan, the Supreme Court set forth the test for Article III standing. Sierra Club v. Envtl. Prot. Agency, 292 F.3d 895, 898 (D.C.Cir. 2002) (citing Lujan, 504 U.S. at 560, 112 S.Ct. 2130). First, DB and BNP must have suffered an injury-in-fact, defined as a harm that is concrete and actual or imminent, not conjectural or hypothetical. Byrd v. Envtl. Prot. Agency, 174 F.3d 239, 243 (D.C.Cir.1999) (citing Steel Co. v. Citizens for a Better Environment, 523 U.S. 83, 103, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998).). Second, the injury must be fairly traceable to Colonial’s or Platinum’s alleged conduct. Id. Finally, it must be likely that the requested relief will redress the alleged injury. Id. This Circuit has made clear that no standing exists if the plaintiffs allegations are “purely speculative[, which is] the ultimate label for injuries too implausible to support standing.” Tozzi v. Dep’t of Health & Human Servs., 271 F.3d 301, 307 (D.C.Cir.2001). Nor does standing exist where a court “would have to accept a number of very speculative inferences and assumptions in any endeavor to connect the alleged injury with [the challenged conduct].” Winpisinger v. Watson, 628 F.2d 133, 139 (D.C.Cir.1980). However, a court must also be cognizant of the fact that a motion to dismiss is brought during the initial stages of a case, before discovery has commenced, thus general factual allegations of injury resulting from the defendant’s alleged conduct will suffice to support standing. Sierra Club, 292 F.3d at 898-99. The parties dispute whether DB and BNP suffered an “injury-in-fact” that is “fairly traceable” to Colonial’s and Platinum’s actions. Focusing on the derivative nature of DB and BNP’s claims, the FDIC asserts that BOA does not, and indeed, cannot, allege that DB and BNP were directly harmed by Colonial and/or Platinum. Rather, any injury suffered by DB and BNP is indistinguishable from harm sustained by Ocala, and thus too remote to confer standing. (See Dkt. No. 26 at 12 (citing Assoc. Gen’l Contractors of Calif., Inc. v. Calif. State Council of Carpenters, 459 U.S. 519, 532, fn. 25, 103 S.Ct. 897, 74 L.Ed.2d 723 (1983)).). BOA counters that the “notion that a financial loss of nearly $1.75 billion does not constitute [an] ‘injury-in-fact’ is absurd.” (Dkt. No. 35 at 24.). According to BOA, the injury in fact requirement consistently has been described as a minimalist threshold and that a “massive financial loss” of the sort suffered by DB and BNP necessarily meets this threshold. (Id. (citing Shaffer v. Defense Intelligence Agency, 601 F.Supp.2d 16, 23 (D.D.C.2009)).). Moreover, BOA argues, the Amended Complaint is replete with examples of how DB and BNP’s injuries are directly traceable to Colonial’s and/or Platinum’s fraudulent activities. (Dkt. No. 35 at 24.). The Court concludes that BOA has alleged factual allegations sufficient to state a plausible injury-in-fact to DB and BNP that is fairly traceable to Colonial and Platinum’s actions. (See, e.g., Dkt. No. 20 at ¶ 2 (“TBW’s, Colonial’s, and Platinum’s fraud on the Trustee, Ocala Funding, and the holders of beneficial interests in Ocala Funding ...”) (emphasis added); Id. at ¶ 64 (alleging that “TBW and Colonial engaged in a scheme to defraud various entities and individuals, including investors in Ocala Funding ”) (emphasis added); Id. at ¶¶ 66-68, 74, 78 (describing specific fraudulent transfers from Ocala to Colonial and Platinum); Id. at ¶¶ 1, 3 (asserting that DB and BNP lost approximately $1.7 billion as a result of TBW’s, Colonial’s, and Platinum’s action).). The standing requirement is meant to ensure that a plaintiff has a “personal stake in the outcome of the controversy as to warrant ... federal-court jurisdiction and to justify” a court-imposed remedy. Warth v. Seldin, 422 U.S. 490, 498, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975); Russell-Murray Hospice, Inc. v. Sebelius, 724 F.Supp.2d 43, 53 (D.D.C.2010) (citing Simon v. E. Ky. Welfare Rights Org., 426 U.S. 26, 38, 96 S.Ct. 1917, 48 L.Ed.2d 450 (1976)). BOA claims that Colonial and Platinum misappropriated the very assets that secured DB’s and BNP’s investment in the Ocala Notes. As a result, DB and BNP are out nearly $2 billion. Clearly, DB and BNP have a personal stake in whether the Ocala assets can be recovered from the banks. If the assets can be recovered, DB and BNP stand to recoup at least a portion of their losses. In addition, BOA has sufficiently alleged that the injury would not have occurred but for the banks’ challenged conduct. See Duke Power Company v. Carolina Environmental Study Group, Inc., 438 U.S. 59, 74-75, 98 S.Ct. 2620, 57 L.Ed.2d 595 (1978) (a plaintiff establishes sufficient causal connection between injury and challenged action if he can make a reasonable showing that the alleged injury would not have occurred “but for” the defendant’s challenged conduct). Accordingly, the Court concludes that DB and BNP have standing to assert their claims. 12