Larry Brown v. Bank of America

FILED
NOT FOR PUBLICATION
AUG 18 2016
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
LARRY BROWN, No. 14-55731
Plaintiff-Appellant, D.C. No.
5:12-cv-02009-TJH-SP
v.
BANK OF AMERICA, N.A.; et al., MEMORANDUM*
Defendants-Appellees.
Appeal from the United States District Court
for the Central District of California
Terry J. Hatter, District Judge, Presiding
Argued and Submitted May 3, 2016
Pasadena, California
Before: BYBEE and N.R. SMITH, Circuit Judges, and STEIN,** District Judge.
Larry Brown appeals the district court’s dismissal of his case for lack of
standing, and the court’s determination that a certain letter (the “Victa Letter”) was
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The Honorable Sidney H. Stein, United States District Judge for the
Southern District of New York, sitting by designation.
not protected by the attorney–client privilege or work-product privilege. We
affirm.
1. Brown lacks standing to litigate any of his claims. Brown is not a mortgagor
or an attorney. Yet, he sues numerous mortgagees (“Appellees”), claiming he
represents more than one thousand discontented mortgagors. Because Brown
cannot represent the mortgagors as an attorney, his standing depends on whether
the mortgagors assigned him their claims. The district court found that Brown
lacked standing for two reasons: (1) Brown did not demonstrate that the
assignment of RICO claims was express, and (2) Brown did not demonstrate that
he acquired an interest in each mortgagor’s property to permit him to litigate the
claims that seek an interest in real property. We need not pass judgment on the
district court’s findings, because “[w]e may affirm on any proper ground supported
by the record.” Novak v. United States, 795 F.3d 1012, 1017 (9th Cir. 2015).
“The party invoking federal jurisdiction bears the burden of establishing [the
elements of standing].” Lujan v. Defs. of Wildlife, 504 U.S. 555, 561 (1992).
Generally, “to satisfy Article III’s standing requirements, a plaintiff must show . . .
it has suffered an ‘injury in fact.’” Friends of the Earth, Inc. v. Laidlaw Envtl.
Servs. (TOC), Inc., 528 U.S. 167, 180 (2000). However, an assignee—who “stands
in the shoes of its assignors,” Spinedex Physical Therapy USA Inc. v. United
2
Healthcare of Ariz., Inc., 770 F.3d 1282, 1291 (9th Cir. 2014)—may meet the
requirements of standing by showing that he received an assignment of claims,
Sprint Commc’ns Co. v. APCC Servs., Inc., 554 U.S. 269, 274–75 (2008).
Although the Ninth Circuit does not require “terms of art . . . for a valid
assignment,” United States ex rel. Kelly v. Boeing Co., 9 F.3d 743, 748 (9th Cir.
1993), the assignee must provide proof that an assignment occurred. “[G]eneral
contract principles dictate that to prove an effective assignment, the assignee must
come forth with evidence that the assignor meant to assign rights and obligations
under the contracts.” Britton v. Co-op Banking Grp., 4 F.3d 742, 746 (9th Cir.
1993) (citing Restatement (Second) of Contracts §§ 317(1), 324 (1981)). Because a
court’s subject matter jurisdiction turns on whether the plaintiff has standing, the
plaintiff must “present affidavits or any other evidence necessary to satisfy its
burden of establishing that the court, in fact, possesses subject matter jurisdiction”
if the defendant moves to dismiss on that basis. St. Clair v. City of Chico, 880 F.2d
199, 201 (9th Cir. 1989); see also White v. Lee, 227 F.3d 1214, 1242 (9th Cir.
2000) (noting that, “[w]ith a factual Rule 12(b)(1) attack, . . . a court may look
beyond the complaint” and “need not presume the truthfulness of the plaintiffs’
allegations”).
3
Brown’s Second Amended Complaint, the relevant document, fails to
provide any proof that Brown was assigned claims by the more-than-one-thousand
mortgagors he purports to represent. The entire language of assignment in the SAC
reads as follows.
Plaintiff Larry Brown (hereinafter, “Plaintiff”) brings this Action as the
assignee of Life Savers Concepts Association, Inc., a North Carolina
corporation, and certain affiliates thereof (collectively hereinafter, “Life
Savers”). Life Savers, in term, is the assignee of the claims of the
individuals listed on Exhibit “A” attached hereto (collectively
hereinafter, the “Assignors”), and it is solely in the capacity of assignee
of the respective Assignors that Plaintiff appears herein.
Brown did not allege any facts—or provide any exhibits with his SAC—to support
his bald assertion. Nor did Brown oppose Appellees’ Motion to Dismiss on the
basis of Rule 12(b)(1) with evidence, facts, or exhibits that would tend to support
his statement. Brown’s standing is entirely dependent on a valid assignment,
therefore Brown’s failure to provide proof of such is fatal to all of his claims.1
2. Brown failed to show that the Show Cause Motion was improperly granted.
Although the district court may have abused its discretion by failing to require a
threshold showing that the letter was not privileged before reviewing it in camera,
any such error was harmless. See United States v. The Corp. (In re Grand Jury
1
Brown’s untimely request for leave to amend his complaint is DENIED.
Brown has not demonstrated that, even if we overlooked his untimeliness, the
standing deficiencies could be cured by the proposed amendment.
4
Investigation), 974 F.2d 1068, 1071, 1075 (9th Cir. 1992) (“Although the district
court did apply [the wrong] threshold, the application of the correct threshold
would not change the result.”); United States v. de la Jara, 973 F.2d 746, 749 (9th
Cir. 1992) (“The district court abused its discretion by declining to [require a
threshold showing]. We may, however, affirm the district court ‘on any ground
fairly supported by the record.’” (footnote omitted) (quoting Lee v. United States,
809 F.2d 1406, 1408 (9th Cir. 1987))).
Appellees easily made the “minimal showing” that the information in the
Victa Letter was not privileged or was subject to the crime-fraud exception. In re
Grand Jury Investigation, 974 F.2d at 1071, 1074. Bank of America’s counsel
received an unsolicited email from an unknown sender that “strongly suggest[ed]
that there ha[d] been malfeasance in connection with soliciting claims for [Brown’s
lawsuit].” Appellees referred the district court to consumer alerts issued by the
5
Federal Trade Commission “about similar fraud schemes underlying mass
actions.”2
3. Brown has failed to show that the Victa Letter was privileged and not
subject to the crime–fraud exception. See United States v. Ruehle, 583 F.3d 600,
607 (9th Cir. 2009) (placing the burden of proof on the plaintiff). Brown contends
that the letter was written by a former Executive Officer of Life Savers (Victa),
who “had sat in on several meetings with Brown and his counsel where the
litigation was discussed.” Brown does not show that the Victa letter contains
“confidential communications between [Brown and his attorney], which [were]
made for the purpose of giving legal advice.” United States v. Richey, 632 F.3d
559, 566 (9th Cir. 2011). Rather, Brown admits that the meetings Victa attended
were conducted for information-gathering and that multiple Life Savers officers
were present. Further, Brown has not shown that Life Savers had a common
2
We reject Brown’s contention that California State Bar, Formal Opinion
No. 2013-188 (“State Bar Opinion”) prohibited Appellees from referring to the
contents of the Victa Letter in their request for an Order to Show Cause. The State
Bar Opinion is advisory, not law; the parties were, instead, governed by Federal
Rule of Civil Procedure 26(b)(5)(B). Even if the State Bar Opinion imposed a
legally binding ethical obligation, it does not apply here. The State Bar Opinion
addresses a situation in which an attorney receives an unsolicited letter that
purports to contain confidential communications between an opposing party and its
counsel. Upon learning of the confidential contents of the letter, the attorney would
be ethically obligated to cease reading and relinquish the letter. Such was not the
situation here.
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interest in the litigation, such that Brown’s communications with his counsel were
protected despite Life Savers’s officers’ presence. See Pac. Pictures Corp. v. U.S.
Dist. Ct. for the C.D. of Cal. (In re Pac. Pictures Corp.), 679 F.3d 1121, 1129 (9th
Cir. 2012) (“[A] shared desire to see the same outcome in a legal matter is
insufficient to bring a communication between two parties within [the common
interest doctrine]. Instead, the parties must make the communication in pursuit of a
joint strategy in accordance with some form of agreement—whether written or
unwritten.”).
The Victa letter is not protected by the work-product privilege, because
Brown has not shown that the Victa Letter, or any portion of the Victa Letter, was
“prepared in anticipation of litigation or for trial by or for another party or its
representative.” Fed. R. Civ. P. 26(b)(3)(A).
AFFIRMED.
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