Court Opinion

ID: 4584054
Source: CourtListenerOpinion
Date Created: 2020-11-05 18:01:09.577501+00
Date Added: 2024-06-11T08:48:14.414343
License: Public Domain

FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

WELLS FARGO BANK, N.A.,                 No. 18-17320
              Plaintiff-Appellant,
                                           D.C. No.
                v.                      2:17-cv-01469-
                                          JCM-VCF
MAHOGANY MEADOWS AVENUE
TRUST,
            Defendant-Appellee,           OPINION

               and

COPPER CREEK HOMEOWNERS
ASSOCIATION; HAMPTON &
HAMPTON COLLECTIONS, LLC,
                     Defendants.

     Appeal from the United States District Court
              for the District of Nevada
      James C. Mahan, District Judge, Presiding

         Argued and Submitted May 12, 2020
                Pasadena, California

               Filed November 5, 2020
2 WELLS FARGO V. MAHOGANY MEADOWS AVE. TRUST

    Before: Mary H. Murguia and Eric D. Miller, Circuit
    Judges, and George Caram Steeh III, * District Judge.

                    Opinion by Judge Miller

                          SUMMARY **

        Nevada Foreclosure Law / Takings Clause

   The panel affirmed the district court’s judgment
dismissing for failure to state a claim Wells Fargo Bank,
N.A.’s quiet title action against the purchaser of real
property at a foreclosure sale, a homeowners’ association
(“HOA”), and the HOA’s agent.

   Wells Fargo sought a declaration that the foreclosure sale
was invalid and that Wells Fargo’s deed of trust continued
as a valid encumbrance against the real property in Las
Vegas, Nevada.

    Nevada Revised Statutes section 116.3116 grants an
HOA a lien on its members’ residences for certain unpaid
assessments and charges, rendering that portion superior to
all other liens, including the first deed of trust held by the
mortgage lender.

    *
      The Honorable George Caram Steeh III, United States District
Judge for the Eastern District of Michigan, sitting by designation.
    **
       This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
   WELLS FARGO V. MAHOGANY MEADOWS AVE. TRUST 3

    Agreeing with both the Nevada Supreme Court, see
Saticoy Bay LLC Series 350 Durango 104 v. Wells Fargo
Home Mortgage, a Division of Wells Fargo Bank, N.A., 388
P.3d 970, 975 (Nev. 2017), and the district court, the panel
held that Wells Fargo did not suffer an uncompensated
taking under the Takings Clause of the U.S. Constitution.
The panel noted that the foreclosure proceeding itself was
not a taking because the Takings Clause governs the conduct
of the government, not private actors, and the foreclosing
HOA was not an arm of the State of Nevada. The panel
rejected Wells Fargo’s contention that the enactment of
section 116.3116 was a taking. Because the enactment of
section 116.3116 predated the creation of Wells Fargo’s lien
on the property, Wells Fargo could not establish that it
suffered an uncompensated taking.

    The panel agreed with the district court’s conclusion that
Wells Fargo received constitutionally adequate notice of the
foreclosure sale. Wells Fargo conceded it received actual
notice of the foreclosure sale, but argued the contents of the
notices were constitutionally deficient because they did not
state that the HOA was foreclosing to satisfy the
superpriority portion of the lien, how large the superpriority
portion was, or that Wells Fargo’s own lien was in jeopardy.
The panel held that although Wells Fargo characterized its
argument as an as-applied challenge, it amounted to an
argument that the statute was invalid on its face. The panel
concluded Wells Fargo received precisely the notice
prescribed by the statute, and therefore Bank of America,
N.A. v. Arlington West Twilight Homeowners Association,
920 F.3d 520 (9th Cir. 2019), foreclosed Wells Fargo’s due-
process challenge.

    The panel held that the district court did not abuse its
discretion in denying Wells Fargo’s motion for
4 WELLS FARGO V. MAHOGANY MEADOWS AVE. TRUST

reconsideration under Fed. R. Civ. P. 59(e) because Wells
Fargo could have raised its argument earlier.

                       COUNSEL

Andrew M. Jacobs (argued), Snell and Wilmer LLP,
Phoenix, Arizona; Kelly H. Dove, Snell and Wilmer LLP,
Las Vegas, Nevada; for Plaintiff-Appellant.

Michael F. Bohn (argued), Law Offices of Michael F. Bohn,
Henderson, Nevada, for Defendant-Appellee.

                        OPINION

MILLER, Circuit Judge:

    Nevada law gives a homeowners association (HOA) a
superpriority lien on properties within the association for
certain unpaid assessments. By foreclosing on a property, an
HOA can extinguish other liens, including a first deed of
trust held by a mortgage lender. We are asked to decide
whether this scheme effects an uncompensated taking of
property or violates the Due Process Clause. We conclude
that it does not.

                             I

    Many residential developments include amenities that
are held in common by owners of property within the
development and managed by an HOA. See generally
Nahrstedt v. Lakeside Vill. Condominium Ass’n, 878 P.2d
1275, 1279–84 (Cal. 1994). To maintain those amenities,
HOAs may levy assessments on their members.
   WELLS FARGO V. MAHOGANY MEADOWS AVE. TRUST 5

     Nevada Revised Statutes section 116.3116 grants an
HOA a lien on its members’ residences for certain unpaid
assessments and charges. Nev. Rev. Stat. § 116.3116(1).
(All statutory references are to the version in effect in 2013.)
Of particular relevance here, section 116.3116 grants
superpriority status to a portion of the HOA lien—
specifically, the portion that “consists of the last nine months
of unpaid HOA dues and any unpaid maintenance and
nuisance-abatement charges.” Bank of Am., N.A. v. Arlington
W. Twilight Homeowners Ass’n, 920 F.3d 620, 622 (9th Cir.
2019) (per curiam); Nev. Rev. Stat. § 116.3116(2). With
only a few exceptions, the superpriority portion of the lien
“is superior to all other liens on the property, including the
first deed of trust held by the mortgage lender.” Arlington
W., 920 F.3d at 622; accord SFR Invs. Pool 1, LLC v. U.S.
Bank, N.A., 334 P.3d 408, 410 (Nev. 2014). “This means that
an HOA can extinguish the first deed of trust by foreclosing
on its superpriority lien.” Arlington W., 920 F.3d at 622.

    In 2008, Luis Carrasco and Janet Kongnalinh purchased
a house in Las Vegas that was within the Copper Creek HOA
and subject to its covenants, conditions, and restrictions,
including an obligation to pay dues and other assessments to
the HOA. They financed the purchase with a loan from
Wells Fargo, N.A., and to secure the loan, they recorded a
deed of trust in favor of Wells Fargo. About three years later,
Carrasco and Kongnalinh fell behind on their HOA dues, and
the HOA recorded a lien for the delinquent assessments. The
HOA ultimately foreclosed on the property to satisfy its lien,
and in 2013, Mahogany Meadows Avenue Trust purchased
the property at a public auction for $5,332, extinguishing
Wells Fargo’s deed of trust.

  Wells Fargo then brought this quiet-title action against
Mahogany Meadows, the HOA, and the HOA’s agent. Wells
6 WELLS FARGO V. MAHOGANY MEADOWS AVE. TRUST

Fargo sought a declaration that the foreclosure sale was
invalid and that Wells Fargo’s deed of trust “continues as a
valid encumbrance against the Property,” which was then
worth approximately $200,000. Wells Fargo asserted that
section 116.3116 violates the Takings Clause and the Due
Process Clause.

    The district court dismissed Wells Fargo’s complaint for
failure to state a claim. First, as to the takings claim, the
district court relied on Saticoy Bay LLC Series 350 Durango
104 v. Wells Fargo Home Mortgage, a Division of Wells
Fargo Bank, N.A., 388 P.3d 970, 975 (Nev. 2017), in which
the Nevada Supreme Court held that “the extinguishment of
a subordinate deed of trust through an HOA’s nonjudicial
foreclosure does not violate the Takings Clause[].” Second,
as to the due-process claim, the district court determined that
Wells Fargo received actual notice of the delinquent
assessment and the foreclosure sale, and it concluded that the
notice to Wells Fargo was sufficient to satisfy due process.

     Wells Fargo moved for reconsideration, arguing for the
first time that because Carrasco was an active-duty member
of the Army Reserve, the foreclosure sale violated the
Servicemembers Civil Relief Act, 50 U.S.C. § 3953. The
district court denied reconsideration because Wells Fargo
did not explain why it was unable to discover Carrasco’s
status earlier.

                              II

    As the district court noted, the Nevada Supreme Court
has held that section 116.3116 does not violate the Takings
Clause. See Saticoy Bay, 388 P.3d at 975. Although we give
respectful consideration to that decision, we are not bound
by a state court’s resolution of a federal constitutional
question but instead consider the question de novo. See
   WELLS FARGO V. MAHOGANY MEADOWS AVE. TRUST 7

William Jefferson & Co. v. Bd. of Assessment & Appeals No.
3 ex rel. Orange County, 695 F.3d 960, 963 (9th Cir. 2012).
We also review the district court’s grant of a motion to
dismiss de novo. Sonoma Cnty. Ass’n of Retired Emps. v.
Sonoma County, 708 F.3d 1109, 1115 (9th Cir. 2013). We
agree with both the Nevada Supreme Court and the district
court, and we conclude that Wells Fargo has not suffered an
uncompensated taking.

    The Takings Clause of the Fifth Amendment, made
applicable to the States through the Fourteenth Amendment,
provides: “[N]or shall private property be taken for public
use, without just compensation.” U.S. Const. amend. V; see
Chicago, B. & Q.R. Co. v. Chicago, 166 U.S. 226, 247
(1897). The Supreme Court has long recognized that
contingent interests in property, including liens such as
Wells Fargo’s deed of trust, constitute “property” under the
Takings Clause. See United States v. Security Indus. Bank,
459 U.S. 70, 76 (1982); Armstrong v. United States, 364 U.S.
40, 48 (1960); Louisville Joint Stock Land Bank v. Radford,
295 U.S. 555, 602 (1935). Although “[t]he ‘bundle of rights’
which accrues to a secured party is obviously smaller than
that which accrues to an owner in fee simple,” the Court has
rejected “the proposition that differences such as these
relegate the secured party’s interest to something less than
property.” Security Indus. Bank, 459 U.S. at 76.

    At first glance, Wells Fargo’s theory appears
straightforward. A lien is property; Wells Fargo once had a
lien; the HOA’s foreclosure sale extinguished that lien; and
Wells Fargo was not paid compensation. Wells Fargo argues
that it suffered “a complete ouster of a property interest” that
constitutes “a per se, physical taking.” Because Wells
Fargo’s lien was an intangible interest, we are not sure that
it makes sense to apply the analysis applicable to physical
8 WELLS FARGO V. MAHOGANY MEADOWS AVE. TRUST

takings, as opposed to the regulatory-takings analysis of
Penn Central Transportation Co. v. New York City, 438 U.S.
104 (1978).

    We need not dwell on that question, however, because
under any analysis, Wells Fargo’s theory quickly encounters
a problem: identifying exactly what action constituted the
taking. The most obvious candidate is the foreclosure
proceeding, but Wells Fargo does not argue that the
foreclosure was a taking, and with good reason. The Takings
Clause governs the conduct of the government, not private
actors. See Landgraf v. USI Film Prods., 511 U.S. 244, 266
(1994). The Copper Creek HOA, which conducted the
foreclosure here, is not an arm of the State of Nevada.

    The Supreme Court has held that “[p]rivate use of state-
sanctioned private remedies or procedures does not rise to
the level of state action.” Tulsa Prof’l Collection Servs., Inc.
v. Pope, 485 U.S. 478, 485 (1988). So although the HOA’s
action was authorized by Nevada law, that authorization
“does not transmute it into government action sufficient for
the Fifth Amendment.” Broad v. Sealaska Corp., 85 F.3d
422, 431 (9th Cir. 1996); accord Apao v. Bank of N.Y., 324
F.3d 1091, 1095 (9th Cir. 2003) (nonjudicial foreclosure
authorized by Hawaii law was not state action); Charmicor
v. Deaner, 572 F.2d 694, 695 (9th Cir. 1978) (trustee’s sale
authorized by Nevada statute was not state action). Indeed,
in considering a due-process challenge to section 116.3116,
we held that although the Nevada Legislature’s enactment of
the statute was state action, “the foreclosure sale itself is a
private action.” Bourne Valley Court Trust v. Wells Fargo
Bank, 832 F.3d 1154, 1160 (9th Cir. 2016).

   Wells Fargo therefore focuses not on the foreclosure
proceeding, but on the enactment of section 116.3116. Here,
however, its theory encounters a different problem: Section
   WELLS FARGO V. MAHOGANY MEADOWS AVE. TRUST 9

116.3116 was enacted in 1991; the HOA’s covenants,
conditions, and restrictions, which created the obligation to
pay dues, were recorded in 2003; and both of those things
had happened before 2008, when Wells Fargo acquired its
lien. The interest Wells Fargo is asserting—that is, the right
to maintain its lien unimpaired by a later HOA lien—was
“not part of [its] title to begin with.” Lucas v. South Carolina
Coastal Council, 505 U.S. 1003, 1027 (1992). When
“‘background principles’ of state law already serve to
deprive the property owner” of the interest it claims to have
been taken, it cannot assert a claim under the Takings
Clause. Esplanade Props., LLC v. Seattle, 307 F.3d 978, 985
(9th Cir. 2002) (quoting Lucas, 505 U.S. at 1029). The State
cannot take what the owner never had.

    The Supreme Court applied that principle in Security
Industrial Bank, in which it construed a provision of the
Bankruptcy Code that permitted individual debtors in
bankruptcy proceedings to avoid certain liens on their
property. The Court explained that applying the statute
retroactively—that is, to liens created before the statute’s
enactment date—would raise “‘difficult and sensitive
questions arising out of the guarantees of the’ takings
clause.” 459 U.S. at 81–82 (quoting NLRB v. Catholic
Bishop of Chicago, 440 U.S. 490, 507 (1979)). The Court
therefore construed the statute to apply only prospectively—
that is, to liens created after the enactment date—to avoid
any potential Takings Clause issue. Id. As several courts of
appeals have concluded, “Security Industrial Bank strongly
suggests if not implicitly holds that prospective application
of [a statute] would not impermissibly tread on the Takings
Clause.” In re Weinstein, 164 F.3d 677, 685 (1st Cir. 1999);
accord In re Thompson, 867 F.2d 416, 422 (7th Cir. 1989).
10 WELLS FARGO V. MAHOGANY MEADOWS AVE. TRUST

    Consistent with that understanding, we rejected a takings
claim asserted by a buyer of property that was subject to a
tax lien that the IRS later sought to redeem. Vardanega v.
IRS, 170 F.3d 1184, 1187–88 (9th Cir. 1999). We explained
that when the buyer purchased the property, he did so “with
notice of an encumbrance—the statutory right of redemption
by the United States,” which had been codified many years
earlier. Id. at 1187. We reasoned that the buyer “did not
purchase clear title to fee property, but property encumbered
by a right of redemption.” Id. at 1187. Accordingly, “[b]y
exercising its statutory right of which [the buyer] had notice,
the IRS did not divest [the buyer] of any vested property
interest in violation of the Fifth Amendment.” Id. Employing
similar reasoning, the Federal Circuit has held that a statute
giving superpriority status to liens held by the Commodity
Credit Corporation “constitute[s] a ‘background principle’
that inheres in the title to property interests arising after its
enactment, therefore precluding a takings claim based on the
application of the statute to those property interests.” Bair v.
United States, 515 F.3d 1323, 1329 (Fed. Cir. 2008).

    Wells Fargo argues that applying those principles here
produces a harsh result because it allows a small HOA lien
to wipe out the value of Wells Fargo’s much larger deed of
trust. But that result is no harsher than the result produced by
foreclosures to satisfy property-tax liens, which, though
sometimes small, can take priority over other interests in the
property. See Nelson v. City of New York, 352 U.S. 103, 109–
10 (1956). And it is a result that Wells Fargo easily could
have avoided. Had Wells Fargo deemed a lien subject to
such a scheme to be inadequate security for its loan, it could
have refused to lend. Alternatively, as the Nevada Supreme
Court observed, Wells Fargo “could have paid off the [HOA]
lien to avert loss of its security; it also could have established
an escrow for [HOA] assessments to avoid having to use its
   WELLS FARGO V. MAHOGANY MEADOWS AVE. TRUST 11

own funds to pay delinquent dues.” SFR Invs., 334 P.3d at
414.

    Wells Fargo asserts that it could not have known about
the potential impairment of its lien because even though
section 116.3116 was enacted before it acquired its lien, only
in the SFR Investments decision “did the Nevada Supreme
Court radically reinvent [the statute] and hold that it not only
granted a homeowner’s association first-payment priority
during foreclosure, but that foreclosure of such a lien also
destroyed every other lien on the property.” The Nevada
Supreme Court has explained that SFR Investments did not
change the law but “did no more than interpret the will of the
enacting legislature.” K&P Homes v. Christiana Tr.,
398 P.3d 292, 294 (Nev. 2017). If the Nevada courts wish to
treat that interpretation as reflecting the meaning of the
statute from the day it was enacted, we see no principle of
federal constitutional law that would prevent them from
doing so. See Harper v. Virginia Dep’t of Taxation, 509 U.S.
86, 94–95 (1993); cf. Danforth v. Minnesota, 552 U.S. 264,
271 (2008).

    We recognize that a plurality of the Supreme Court in
Stop the Beach Renourishment, Inc. v. Florida Department
of Environmental Protection, 560 U.S. 702, 715 (2010),
stated that a judicial decision “declar[ing] that what was
once an established right of private property no longer
exists” would constitute a taking. But Wells Fargo does not
argue that the SFR Investments decision was a taking, nor
could it plausibly do so. For such an argument to succeed,
Wells Fargo would have to demonstrate that a contrary
interpretation of section 116.3116 had been established in
Nevada law before SFR Investments. Id. at 732 (majority
opinion) (“The Takings Clause only protects property rights
as they are established under state law, not as they might
12 WELLS FARGO V. MAHOGANY MEADOWS AVE. TRUST

have been established or ought to have been established.”).
We are aware of nothing in Nevada law that would support
that proposition.

    Wells Fargo points to cases in which, it says, the
Supreme Court held the application of a statute to a later-
acquired interest to be a taking. It relies on Loretto v.
Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982),
which involved a New York statute forcing a landowner to
submit to a permanent physical occupation of its property by
cable television facilities. As Wells Fargo emphasizes, the
facilities at issue had been installed several years before the
plaintiff purchased the property. Id. at 421–23. But that
installation took place with the consent of the property
owner, who was paid five percent of the revenues the cable
company received from the facility; it was not until two
years after the plaintiff’s purchase that New York enacted
the statute compelling her to allow the facilities to remain
and limiting her compensation to a one-time fee of $1. Id.
at 423–24. The case therefore involved the application of a
statute to authorize the invasion of a property interest the
owner already had, which is why the Supreme Court held
that it effected a taking.

    To be sure, the Supreme Court has elsewhere rejected the
view that “the postenactment transfer of title would absolve
the State of its obligation to defend any action restricting
land use, no matter how extreme or unreasonable.”
Palazzolo v. Rhode Island, 533 U.S. 606, 627 (2001). We do
not suggest, for example, that a State could enact a statute
providing that any property that changes hands after the
enactment date may be seized without compensation. Such a
law would seriously impair currently existing property
rights. Cf. Thompson, 867 F.2d at 422. But this case is
different because the property right that Wells Fargo is
   WELLS FARGO V. MAHOGANY MEADOWS AVE. TRUST 13

asserting (the right to maintain its lien unimpaired by the
HOA’s lien) is one that no one ever held—not Wells Fargo,
and not the homeowners who created the lien. At the time
Wells Fargo’s lien was created, both section 116.3116 and
the Copper Creek HOA’s covenants, conditions, and
restrictions were already in place, and together, they meant
that any HOA lien would have priority.

    Finally, Wells Fargo relies on Armstrong, but that case
does not support its position. In Armstrong, a supplier of
materials to a Navy contractor held liens under state law on
those materials. 364 U.S. at 41. Under the government’s
agreement with the prime contractor, the United States was
entitled to a “paramount” lien on the work done. Id. at 43–
45. When the prime contractor defaulted, the government
exercised its contractual right to seize all completed work
and unused materials. Id. at 41. That action did not
extinguish the suppliers’ liens, but the government’s
sovereign immunity meant that the suppliers became unable
to enforce the liens. Id. at 48. Although the Court held that
the seizure constituted a taking because it effectively
destroyed the suppliers’ remaining valid property interest, it
recognized that their interest was limited to “whatever
proceeds the property might bring over and above the
[g]overnment’s claim to the amount of its progress
payments.” Id. at 45. The Court did not question that the
government’s entitlement to a paramount lien could limit the
suppliers’ later-arising property interests, so its conclusion is
consistent with the rule we apply today.

    Because the enactment of section 116.3116 predated the
creation of Wells Fargo’s lien on the property, Wells Fargo
cannot establish that it suffered an uncompensated taking.
14 WELLS FARGO V. MAHOGANY MEADOWS AVE. TRUST

                             III

    Wells Fargo also argues that the foreclosure sale was
invalid because it was not preceded by constitutionally
adequate notice. The Due Process Clause “requires the
government to provide ‘notice reasonably calculated, under
all the circumstances, to apprise interested parties of the
pendency of the action and afford them an opportunity to
present their objections.’” Jones v. Flowers, 547 U.S. 220,
226 (2006) (quoting Mullane v. Central Hanover Bank & Tr.
Co., 339 U.S. 306, 314 (1950)). We agree with the district
court’s conclusion that Wells Fargo received
constitutionally adequate notice.

    This is not the first time we have considered a due-
process challenge to the Nevada statute. In Bourne Valley,
we read that statute to create an “opt-in” notice scheme under
which a lien holder would be notified of a foreclosure sale
only if it had previously advised the HOA that it wished to
be notified. 832 F.3d at 1158. As noted above, we recognized
that the foreclosure sale itself was not state action. Id.
at 1160. But we concluded that the Nevada legislature’s
enactment of the statute was state action, and we held that
the statute, construed to create an “opt-in” notice scheme,
violated the Due Process Clause because it impermissibly
shifted the burden of notice to lien holders. Id. at 1158–59.
Thereafter, the Nevada Supreme Court adopted a different
interpretation of the statute, holding that it requires an HOA
“to provide foreclosure notices to all holders of subordinate
interests, even when such persons or entities did not request
notice.” SFR Invs. Pool 1, LLC v. Bank of N.Y. Mellon,
422 P.3d 1248, 1253 (Nev. 2018). Relying on that
interpretation, we held that “Bourne Valley no longer
controls the analysis,” and that the statute “is not facially
unconstitutional.” Arlington W., 920 F.3d at 624.
   WELLS FARGO V. MAHOGANY MEADOWS AVE. TRUST 15

    Wells Fargo argues that Arlington West is not controlling
here because that case involved only a facial challenge,
while this one involves an as-applied challenge. A facial
challenge requires a plaintiff to “establish that no set of
circumstances exists under which [a statute] would be
valid.” United States v. Salerno, 481 U.S. 739, 745 (1987).
An as-applied challenge, by contrast, focuses on the statute’s
application to the plaintiff. Holder v. Humanitarian Law
Project, 561 U.S. 1, 18–19 (2010). Here, Wells Fargo
concedes that it received actual notice of the foreclosure sale.
But it argues that the contents of the notices were
constitutionally deficient because they did not state that the
HOA was foreclosing to satisfy the superpriority portion of
its lien, how large the superpriority portion was, or that
Wells Fargo’s own lien was in jeopardy.

    Although Wells Fargo characterizes its argument as an
as-applied challenge, it amounts to an argument that the
statute is invalid on its face. Nevada law requires the HOA
to provide all junior interest holders (1) “notice of default
and election to sell the [property] to satisfy the lien,”
(2) notice of “the amount of the assessments and other sums
which are due,” and (3) “notice of time and place of the
[foreclosure] sale.” Nev. Rev. Stat. §§ 116.31162(1),
311635(1), 116.31168(1)–(3). Wells Fargo received
precisely the notice prescribed by the statute. Wells Fargo
does not argue that it is particularly unsophisticated, so that
a level of notice that might be adequate for an average person
would be inadequate for it. Instead, Wells Fargo argues that
the notice contemplated by the statute is insufficient. If that
is correct, then the notice would be equally insufficient for
any holder of an interest in the property, which would mean
that essentially all applications of the statute are invalid. We
held the opposite in Arlington West, concluding that because
the mortgage lender there did “not dispute that it received
16 WELLS FARGO V. MAHOGANY MEADOWS AVE. TRUST

actual notice . . . . [i]ts due process rights were . . . not
violated.” 920 F.3d at 624. That holding controls this case,
and it forecloses Wells Fargo’s due-process challenge.

                             IV

    We review the district court’s denial of Wells Fargo’s
motion for reconsideration under Federal Rule of Civil
Procedure 59(e) for abuse of discretion. See Micha v. Sun
Life Assurance of Can., Inc., 874 F.3d 1052, 1056 (9th Cir.
2017). A district court generally should not grant a Rule
59(e) motion in the absence of “newly discovered evidence,”
“clear error,” or “an intervening change in the controlling
law.” 389 Orange St. Partners v. Arnold, 179 F.3d 656, 665
(9th Cir. 1999). A Rule 59(e) motion “may not be used to
raise arguments or present evidence for the first time when
they could reasonably have been raised earlier.” Kona
Enters., Inc. v. Estate of Bishop, 229 F.3d 877, 890 (9th Cir.
2000).

    In seeking reconsideration, Wells Fargo argued that the
foreclosure sale violated the Servicemembers Civil Relief
Act, 50 U.S.C. § 3953. We need not consider whether Wells
Fargo’s interpretation of that statute is correct—or whether
Wells Fargo, which is not itself a service member, has
standing to invoke the statute—because the district court
correctly determined that Wells Fargo could have raised the
issue earlier. Indeed, Wells Fargo conceded below that the
evidence on which it relied “was theoretically available”
when it filed its response to the motion to dismiss. Wells
Fargo does not explain why it was unable to “discover[] the
evidence sooner through the exercise of reasonable
diligence.” Far Out Prods., Inc. v. Oskar, 247 F.3d 986, 998
   WELLS FARGO V. MAHOGANY MEADOWS AVE. TRUST 17

(9th Cir. 2001). The district court did not abuse its discretion
in denying reconsideration.

    AFFIRMED.