Court Opinion

ID: 2766821
Source: CourtListenerOpinion
Date Created: 2015-01-06 16:00:23.981664+00
Date Added: 2024-06-11T10:45:45.143106
License: Public Domain

14-712-cv
Babb v. Capitalsource, Inc.
 
                              UNITED STATES COURT OF APPEALS
                                  FOR THE SECOND CIRCUIT

                                        SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY
FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT=S LOCAL RULE 32.1.1. WHEN
CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE
EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION
ASUMMARY ORDER@). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON
ANY PARTY NOT REPRESENTED BY COUNSEL.

      At a stated term of the United States Court of Appeals for the Second Circuit, held at
the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New
York, on the 6th day of January, two thousand fifteen.

PRESENT: DENNIS JACOBS,
                 REENA RAGGI,
                 DEBRA ANN LIVINGSTON,
                                 Circuit Judges.
----------------------------------------------------------------------
LEE BABB, CHARLES FERRIS, CONSUELO FERRIS,
MARTIN HOGAN, JANICE HOGAN, JOHN LOPES,
JAMES MCGOUGH, PRISCILLA MCGOUGH, MARK
PERRY, LISA PERRY, REBECCA RALSTON,
JONATHAN THURROTT, NANCY TROSKE, INGRID
WEBER, MATTHEW ZOCARO, JOHN ANCTIL,
GISELE BARBOSA, CHRISTINE BERNAT, GEORGE
BRANCH, GARY CROFOOT, PAUL DEMERS, JULIO
GRILLO, MARY JONES, KARL JORGENSEN,
OKSANA           JORGENSEN,             DONALD            KADLEC,
SANDRA            LAPIDEZ,           FRANCIS           PARISEAU,
DOROTHY CARPENTER-REID, MICHAEL RYAN,
BENITA SCHRIEFER, WILLIAM SCHRIEFER,
MICHAEL SILVER, FLAVIO TERZIS, KELLY
WILLIAMS,
                                 Plaintiffs-Appellants,

                      v.                                                 No. 14-712-cv

CAPITALSOURCE,                  INC.,    CITIGROUP,            INC.,
CITIMORTGAGE, INC., COUNTRYWIDE HOME
LOANS, INC., CROSS COUNTRY MORTGAGE, FIRST
FRANKLIN INVESTMENT & LOAN, FLAGSTAR
BANK, FSB, GMAC MORTGAGE, MERRILL LYNCH,
MONEY WAREHOUSE, PNC FINANCIAL SERVICES,
CINCINNATI FEDERAL SAVINGS AND LOAN,
HOMEWARD RESIDENTIAL, JP MORGAN CHASE &
CO., OCWEN FINANCIAL CORPORATION, PHH
MORTGAGE, PROVIDENT FUNDING GROUP, INC.,
WILBER ROSS & CO., L.L.C., CHASE HOME
FINANCE, LLC, CITIBANK, N.A., DEUTSCHE BANK
NATIONAL TRUST CO., DEUTSCHE BANK TRUST
CO., FIRST FRANKLIN LOAN SERVICES, THE PNC
FINANCIAL SERVICES GROUP, INC., AURORA
LOAN SERVICES, LLC, BANK OF AMERICA, N.A.,
DEUTSCHE BANK, AG, MORTGAGEIT, INC., U.S.
BANK, N.A., WELLS FARGO, N.A.,
                     Defendants-Appellees,

FREMONT INVESTMENT AND LOAN CORP.,
SIGNATURE GROUP HOLDINGS, INC., ALLY
FINANCIAL, INC.,
                                 Defendants.*
----------------------------------------------------------------------
FOR APPELLANTS:                                   Scott A. Kamber, KamberLaw, LLC, New York,
                                                  New York.

FOR APPELLEES:                             Joseph F. Yenouskas, Goodwin Procter LLP,
                                           Washington, D.C., and Jason O. Braiman,
                                           Goodwin Procter LLP, Los Angeles, California,
                                           for Countrywide Home Loans, Inc., First
                                           Franklin Investment & Loan, Merrill Lynch and
                                           Bank of America, N.A.

                                           Lisa J. Fried, Hogan Lovells US LLP, New
                                           York, New York, and Chava Brandriss, Hogan
                                           Lovells US LLP, Washington, DC, for Flagstar
                                           Bank, FSB, Provident Funding Group, Inc., U.S.
                                           Bank, N.A., and Wells Fargo Bank, N.A.

*
    The Clerk of Court is directed to amend the official caption as shown above.

                                              2
Joy Harmon Sperling, Day Pitney LLP, New
York, New York, and Erick M. Sandler, Day
Pitney LLP, Hartford, Connecticut, for Deutsche
Bank, AG, and MortgageIT, Inc.

John M. Falzone, Parker Imbrahim & Berg LLC,
New York, New York, for JP Morgan Chase &
Co. and JP Morgan Chase Bank, N.A., successor
by merger to Chase Home Finance, LLC.

Michael S. Kraut, Morgan, Lewis & Bockius
LLP, New York, New York, for Deustche Bank
National Trust Co.

Elliot C. Mogul, Arnold & Porter LLP,
Washington, DC, and Anthony D. Boccanfuso,
Arnold & Porter LLP, New York, New York, for
Aurora Loan Services LLC.

R. Bruce Allensworth, Brian M. Forbes, and
Robert W. Sparkes, III, K & L Gates LLP,
Boston, Massachusetts, and David S. Versfelt,
K & L Gates LLP, New York, New York, for
Ocwen Financial Corporation and Homeward
Residential.

Noah M. Weissman and Chris M. LaRocco,
Bryan Cave LLP, New York, New York, for
CitiMortgage, Inc., Citibank, N.A., and
Citigroup Inc.

Amber Wessels-Yen, Alston & Bird LLP, New
York, New York, for PHH Mortgage.

Julian W. Friedman, Ballard Spahr Stillman &
Friedman, New York, New York, and David H
Pittinsky, Ballard Spahr LLP, Philadelphia,
Pennsylvania, for The PNC Financial Services
Group, Inc.

  3
       Appeal from a judgment of the United States District Court for the Southern District

of New York (Cathy Seibel, Judge).

       UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,

AND DECREED that the judgment entered on February 10, 2014, is REVERSED in part

and AFFIRMED in part.

       Plaintiffs appeal from the dismissal of their Second Amended Complaint (“SAC”)

for lack of jurisdiction under the so-called Rooker-Feldman doctrine, see District of

Columbia Court of Appeals v. Feldman, 460 U.S. 462 (1983); Rooker v. Fid. Trust Co.,

263 U.S. 413 (1923); see also Fed. R. Civ. P. 12(b)(1), and the alternative dismissal of their

claims under the Racketeering Influenced and Corrupt Organizations Act (“RICO”), Pub.

L. No. 91–452, tit. IX, 84 Stat. 922, 941–48 (1970) (codified as amended at 18 U.S.C.

§§ 1961–1968), for failure to state a claim, see Fed. R. Civ. P. 12(b)(6). Plaintiffs contend

both that these decisions were incorrect and that dismissal should not have been ordered

without allowing them to amend their complaint. See Fed. R. Civ. P. 15(a)(2). We

assume the parties’ familiarity with the facts and the record of prior proceedings, which we

reference only as necessary to explain our decision to reverse the district court’s

jurisdictional holding and to affirm the judgment on the merits.

1.     Rooker-Feldman

       On de novo review of the district court’s application of Rooker-Feldman, see

Hoblock v. Albany Cnty. Bd. of Elections, 422 F.3d 77, 83 (2d Cir. 2005), we identify error

in light of our most recent controlling precedent, see Vossbrinck v. Accredited Home

                                              4
Lenders, Inc., --- F.3d ----, No. 12-3647-cv, 2014 WL 6863669 (2d Cir. Dec. 8, 2014).

Vossbrinck makes clear that plaintiffs’ suit is not barred by Rooker-Feldman because the

SAC seeks damages for injuries suffered as a result of defendants’ alleged fraud and does

not attempt to reverse or undo a state court judgment. See id. at *3. We therefore reverse

the district court’s holding that it lacked jurisdiction.

2.     Failure To State a RICO Claim

       “We review de novo dismissal of a complaint for failure to state a claim upon which

relief can be granted, accepting all factual allegations in the complaint as true, and drawing

all reasonable inferences in the plaintiff’s favor.” Lundy v. Catholic Health Sys. of Long

Island Inc., 711 F.3d 106, 113 (2d Cir. 2013) (internal quotation marks omitted).

       To state a RICO claim predicated on mail or wire fraud, a complaint must “specify

the statements it claims were false or misleading, give particulars as to the respect in which

plaintiffs contend the statements were fraudulent, state when and where the statements

were made, and identify those responsible for the statements.” Moore v. PaineWebber,

Inc., 189 F.3d 165, 173 (2d Cir. 1999); see also Fed. R. Civ. P. 9(b). “The plaintiffs must

also identify the purpose of the mailing [or wire communication] within the defendant’s

fraudulent scheme.” Moore v. PaineWebber, Inc., 189 F.3d at 173 (internal quotation

marks omitted). “In addition, the plaintiffs must allege facts that give rise to a strong

inference of fraudulent intent.” Id. (internal quotation marks omitted).

       Here, the SAC fails to plead the purportedly fraudulent statements with any

particularity, fails to identify the purposes of the mailings or wire communications within

                                                5
the fraudulent scheme, and fails to allege facts that might support a finding of fraudulent

intent. Accordingly, we conclude that the district court was correct that the SAC’s RICO

claims must be dismissed pursuant to Fed. R. Civ. P. 12(b)(6).

3.     Leave To Amend

       No different conclusion is warranted because plaintiffs were denied leave to amend

their complaint, a decision we review only for abuse of discretion. See Ruotolo v. City of

New York, 514 F.3d 184, 191 (2d Cir. 2008). Because plaintiffs were alerted to the

deficiencies in their complaint at a pre-motion conference before filing the SAC, and

because the district court was clear at that conference that it would not allow plaintiffs any

more amendments after the SAC, the denial of another attempt to amend was not an abuse

of discretion. See id. at 191–92.

       We have considered plaintiffs’ remaining arguments and conclude that they are

without merit. We therefore REVERSE the district court’s jurisdictional holding but, on

the merits, AFFIRM the judgment of dismissal.

                                    FOR THE COURT:
                                    CATHERINE O’HAGAN WOLFE, Clerk of Court

                                              6