Voacolo v. Federal National Mortgage Association (Fannie Mae) , 224 F. Supp. 3d 39 ( 2016 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
DAVID J. VOACOLO, :
:
Plaintiff, : Civil Action No.: 16-1324 (RC)
:
v. : Re Document No.: 13, 14
:
FEDERAL NATIONAL MORTGAGE :
ASSOCIATION, et al., :
:
Defendants. :
MEMORANDUM & ORDER
GRANTING DEFENDANTS’ MOTIONS TO DISMISS
I. INTRODUCTION
Plaintiff David J. Voacolo brings this case against the Federal National Mortgage
Association (“Fannie Mae”), the Federal Housing Finance Authority (“FHFA”), and the United
States Department of the Treasury. Mr. Voacolo alleges that the Defendants’ actions,
particularly the management of FHFA’s conservatorship of Fannie Mae, violated the
Administrative Procedure Act (“APA”) and reduced the value of Fannie Mae stock that
Mr. Voacolo purchased in 2009. Among other requests for relief, Mr. Voacolo seeks $2,500,000
in money damages.
Defendants have moved to dismiss the Complaint on several grounds. Despite repeated
reminders, Mr. Voacolo, who is now proceeding pro se, has not responded to the motions to
dismiss. Mr. Voacolo has also failed to respond to other Court orders in this case. For the
reasons explained below, Mr. Voacolo has conceded the motions to dismiss and the Court will
therefore dismiss the Complaint.
II. BACKGROUND
Mr. Voacolo filed his Complaint in this Court on June 26, 2016. See generally Compl.,
ECF No. 1. Mr. Voacolo alleges that he purchased 64,000 shares of Fannie Mae stock in August
2009, less than a year after FHFA placed Fannie Mae into conservatorship following the housing
crisis of 2008. Id. ¶¶ 1–2. In a nutshell, Mr. Voacolo argues that certain actions taken by
Defendants in connection to FHFA’s conservatorship of Fannie Mae violated the APA. Id. ¶¶
28–29 (citing 5 U.S.C. § 706(2)(A)). Mr. Voacolo alleges that those actions “deprived” him “of
his property” because they reduced “what his shares would otherwise be worth.” Id. ¶ 31. Mr.
Voacolo alleges that, but for the purportedly unlawful actions of Defendants, the shares that he
purchased for $0.77 per share, id. ¶ 17, would now be valued at $35.00 per share, id. ¶ 30. In the
same count, Mr. Voacolo also asserts that the Defendants’ actions violated his Fifth Amendment
right to due process. Id. ¶ 34.
At the time he filed his Complaint, Mr. Voacolo was represented by counsel. See id. at
7–8. The Complaint was signed by Alexander J. E. English, who was listed as “Counsel of
Record,” as well as Afia SenGupta and Angela Lipsman of Brus Chambers LLC, who were
listed as “Of Counsel.” Id. Neither Ms. SenGupta nor Ms. Lipsman indicated that they were
members of the bar of this Court. Id. at 8.
One month after the Complaint was filed, Mr. English moved for leave to withdraw as
counsel. See generally Mot. to Withdraw, ECF No. 4. Mr. English provided documentary
evidence supporting his contention that he was retained by Brus Chambers LLC to serve as local
counsel in this case, but that he was never paid. Id. ¶¶ 1–12; see also id. Exs. 1–3, ECF No. 4-1.
The Court ordered that “replacement counsel for Plaintiff shall enter an appearance on or before
August 26, 2016,” but that, “[a]t that time, Plaintiff shall proceed pro se unless and until he
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obtains replacement counsel.” Min. Order (Aug. 16, 2016). No replacement counsel has entered
an appearance on behalf of Mr. Voacolo.
On August 10, 2016, before the Court addressed Mr. English’s motion to withdraw,
Defendants jointly filed a notice asserting that this case is related to three other cases in this
district. See Defs.’ Notice of Related Cases at 1, ECF No. 6. Those cases had previously been
dismissed, see Perry Capital LLC v. Lew, 70 F. Supp. 3d 208 (D.D.C. 2014), and an appeal
remains pending before the D.C. Circuit, see No. 14-5243 (D.C. Cir. filed Oct. 8, 2014). The
Court ordered Mr. Voacolo to respond to Defendants’ notice on or before August 26, 2016.
See Min. Order (Aug. 16, 2016). Mr. Voacolo did not respond. On September 15, 2016, the
Court again ordered Mr. Voacolo to respond to the notice. See Min. Order (Sept. 15, 2016).
Again, Mr. Voacolo did not respond.
On September 20, 2016, Defendants moved to dismiss the Complaint. See generally
Mot. Dismiss by U.S. Dept. Treasury, ECF No. 13; Mot. Dismiss by Fannie Mae & FHFA, ECF
No. 14. Mr. Voacolo did not respond to the motions or request an extension of time to respond.
See LCvR 7(b) (providing 14 days to “serve and file a memorandum of points and authorities in
opposition to [a] motion”). On November 4, 2016, the Court issued a Fox/Neal order setting
forth Mr. Voacolo’s obligation to respond to the motions and advising Mr. Voacolo that the
Court could treat the motions as conceded if Mr. Voacolo did not file a response. See Order,
ECF No. 15; see also Neal v. Kelly, 963 F.2d 453 (D.C. Cir. 1992); Fox v. Strickland, 837 F.2d
507 (D.C. Cir. 1988) (per curiam). The Court’s order called for Mr. Voacolo to respond to the
motions to dismiss by December 5, 2016. See Order at 2. To date, Mr. Voacolo has not
requested additional time or responded to the motions in any way.
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The Court ordered the parties to appear by telephone for a status conference scheduled
for November 10, 2016. See Min. Order (Nov. 7, 2016). Both Ms. SenGupta and Mr. Voacolo
called in to join the status conference. During the status conference, Ms. SenGupta stated that
replacement local counsel would make an appearance before the Court soon after the call. The
Court mentioned the Fox/Neal order and reminded Mr. Voacolo and Ms. SenGupta that Mr.
Voacolo was obligated to respond to the motions to dismiss whether he was represented by
counsel or not. At this time, no replacement counsel has appeared and Mr. Voacolo has not
responded to the motions to dismiss.
III. MR. VOACOLO HAS CONCEDED DEFENDANTS’ MOTIONS TO DISMISS
Under Local Civil Rule 7(b), if any party fails to file a response to a motion within the
prescribed time, “the Court may treat the motion as conceded.” LCvR 7(b). This rule “is a
docket-management tool that facilitates efficient and effective resolution of motions by requiring
the prompt joining of issues.” Fox v. Am. Airlines, Inc., 389 F.3d 1291, 1294 (D.C. Cir. 2004)
(citing FDIC v. Bender, 127 F.3d 58, 67 (D.C. Cir. 1997)). In Fox v. Strickland, 837 F.2d 507(D.C. Cir. 1988) (per curiam), the D.C. Circuit held that a district court must take pains to advise
a pro se party of the consequences of the failure to respond to a dispositive motion. See also
Neal v. Kelly, 963 F.2d 453, 456 (D.C. Cir. 1992). “That notice . . . should include an
explanation that the failure to respond . . . may result in the district court granting the motion and
dismissing the case.” Fox v. Strickland, 837 F.2d at 509.
In Cohen v. Board of Trustees of the University of the District of Columbia, the D.C.
Circuit recently raised some concerns with the interaction between Local Rule 7(b) and Federal
Rule of Civil Procedure 12(b)(6). 819 F.3d 476 (D.C. Cir. 2016). Specifically, the Cohen court
noted that certain applications of Local Rule 7(b) would shift the burden that Rule 12(b)(6)
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places on the moving party. Id. at 481 (“To the extent that it allows a district court to treat an
unopposed motion to dismiss as conceded, Local Rule 7(b) effectively places the burden of
persuasion on the non-moving party: when he fails to respond, he loses.”). The court also noted
that applying Local Rule 7(b) to dismiss a case “risks circumventing the clear preference of the
Federal Rules to resolve disputes on their merits.” Id. at 482.
The court examined interpretations of similar local rules by other circuits and found a
circuit split on the issue. See id. at 481–82 (collecting cases and determining that the majority of
circuits “prohibit district courts from granting a motion to dismiss solely because the plaintiff
failed to respond”). In a related vein, the D.C. Circuit has recently identified a similar tension
between Local Rule 7(b) and Federal Rule of Civil Procedure 56 in the context of summary
judgment. See Winston & Strawn, LLP v. McLean, No. 14-7197, 2016 WL 7174125, at *3
(D.C. Cir. Dec. 9, 2016) (“Local Rule 7(b) cannot be squared with Federal Rule of Civil
Procedure 56.”); Grimes v. District of Columbia, 794 F.3d 83, 95 (D.C. Cir. 2015) (discussing
the need for the district court’s independent assessment that summary judgment is warranted);
see also id. at 97 (Griffith, J., concurring) (“[M]otions for summary judgment may not be
conceded for want of opposition. . . . The burden is always on the movant to demonstrate why
summary judgment is warranted.”).
Despite these concerns, the court reaffirmed that, in the context of a motion to dismiss, it
“[has] yet to deem a ‘straightforward application of Local Rule 7(b)’ an abuse of discretion.”
Cohen, 819 F.3d at 480 (quoting Fox v. Am. Airlines, Inc., 389 F.3d at 1294). In Cohen, the
court acknowledged that its prior decisions required it to “affirm the district court’s decision
insofar as it granted the motion to dismiss the complaint.” Id. at 483 (relying on Fox v.
American Airlines). But the court decided that Fox v. American Airlines did not require it to
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affirm the district court’s decision to dismiss the complaint “with prejudice or to affirm the
dismissal of the case.” Id. (emphasis added). The court found that the facts of Cohen did not
constitute a “straightforward” application of Local Rule 7(b). Id. In Cohen, the plaintiff “filed
an opposition to the motion to dismiss, albeit a few weeks late, as well as an amended
complaint,” in an attempt to “remedy what the district court treated as his effective concession.”
Id. at 484. In contrast, the court described Fox v. American Airlines as a straightforward case,
where “counsel had failed to respond at all to the motion to dismiss for the eight months that
preceded the district court’s dismissal of the complaint.” Id. at 483.
This case presents a “straightforward” situation in which to apply Local Rule 7(b).
Although this litigation has not dragged on for eight months, Mr. Voacolo has repeatedly failed
to respond to Defendants’ filings and Court orders since August. Mr. Voacolo has yet to respond
to Defendants’ notice of related cases, despite two Court orders to do so. See Min. Order (Aug.
16, 2016); Min. Order (Sept. 15, 2016). Turning to the pending motions to dismiss at issue here,
Mr. Voacolo has failed to respond for roughly 90 days. See Mot. Dismiss by U.S. Dept.
Treasury (filed September 20, 2016); Mot. Dismiss by Fannie Mae & FHFA (same). During that
time, the Court issued an order advising Mr. Voacolo of his obligation to respond to the motions
or risk conceding them, see Order, ECF No. 15, and restated that obligation during a status
conference. Mr. Voacolo has never requested additional time to respond.
Despite raising concerns with Local Rule 7(b) in the context of a motion to dismiss, the
D.C. Circuit held it had “that yet to deem a ‘straightforward application of Local Rule 7(b)’ an
abuse of discretion.” Cohen, 819 F.3d at 480 (quoting Fox v. Am. Airlines, Inc., 389 F.3d at
1294); see also Stubbs v. Law Office of Hunter C. Piel, LLC, No. 15-7149, 2016 WL 6237827, at
*1 (D.C. Cir. Sept. 8, 2016) (unpublished per curiam opinion) (citing Cohen for the principle
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that, where a party’s “response to the motion to dismiss for failure to state a claim was
unresponsive to the arguments raised in the motion,” the district court “correctly concluded that
the motion to dismiss was conceded pursuant to Local Rule 7(b)”); Jordan v. Ormond, No. 15-
7151, 2016 WL 4098823, at *1 (D.C. Cir. July 22, 2016), cert. denied, (U.S. Nov. 28, 2016)
(unpublished per curiam opinion) (citing Cohen in support of the conclusion that “the district
court did not abuse its discretion in dismissing appellant’s complaint pursuant to D.C. District
Court Local Civil Rule 7(b)”). The Court finds that the facts of this case present a
“straightforward” application of Local Rule 7(b) because Mr. Voacolo has not asked for
additional time or filed any response to the motions to dismiss despite repeated warnings to do
so.1 Therefore, the Court will grant Defendants’ motions to dismiss the Complaint as conceded.
IV. CONCLUSION
For the reasons explained above, it is hereby:
ORDERED that the Motion to Dismiss by the United States Department of the Treasury
(ECF No. 13) is GRANTED AS CONCEDED; and it is
FURTHER ORDERED that the Motion to Dismiss by Defendants Federal National
Mortgage Association and Federal Housing Finance Agency (ECF No. 14) is GRANTED AS
CONCEDED; and it is
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The Court also notes that, while Mr. Voacolo is formally proceeding pro se, Min. Order
(Aug. 16, 2016), Ms. SenGupta has signed pleadings on Mr. Voacolo’s behalf and participated in
a telephonic status conference.
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FURTHER ORDERED that the Complaint and this civil action are DISMISSED
WITHOUT PREJUDICE.
SO ORDERED.
Dated: December 19, 2016 RUDOLPH CONTRERAS
United States District Judge
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