Professional Documents
Culture Documents
PENI COX,
Plaintiff-Appellant
vs.
Defendants-Appellee
__________________________________________________________________
Interlocutory Appeal from an Order of the United States District Court For The
District of Utah, Central Division No. 2:10-CV-00492-SA Hon. Clark Waddoups
_____________________
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TABLE OF CONTENTS
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CONCLUSION ........................................................................................................26
STATEMENT REGARDING ORAL ARGUMENT .............................................26
ATTACHMENTS
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TABLE OF AUTHORITIES
Cases
770 PPR, LLC v. TJCV Land Trust, 30 So.3d 613 (Fla. App. 2010) ......................19
American Bush v. City of South Salt Lake, 42 Fed.Appx. 308 (2002) ....................11
Attorney General of Oklahoma v. Tyson Foods, Inc., 565 F.3d 769 (2009) .............6
Bank of Am. v. City & County of San Francisco, 309 F.3d 551 (9th Cir. 2002) .....24
Barnett Bank of Marion County v. Nelson, 517 U.S. 25(1996) ........................ 12, 22
Bauchman ex rel. Bauchman v. West High Sch., 132 F.3d 542 (10th Cir.1997) ....10
Beneficial Nat’l Bank v. Anderson, 539 U.S. 1 (2003) ..................... 9, 10, 11, 20, 21
City of Burbank v. Lockheed Air Terminal, Inc., 411 U.S. 624 (1973) ...................13
Cuomo v. Clearing House Ass'n, L.L.C., 129 S. Ct. 2710, 2720-21 (2009) .... passim
First National Bank in St. Louis v. Missouri, 263 U.S. 640, (1924) .......................23
Florida Lime & Avocado Growers, Inc. v. Paul, 373 U.S. 132 (1963) ..................13
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Franchise Tax Bd. of Cal. v. Construction Laborers Vacation Trust for Southern
Indiana National Bank v. Roberts, 326 So.2d 802 (Miss. 1976) .............................19
Jones v. Rath Packing Co., 430 U.S. 519 (1977) ............................................. 12, 13
Nat'l State Bank v. Long, 630 F.2d 981 (3d Cir.1980) ............................................24
Rice v. Santa Fe Elevator Corp., 331 U.S. 218 (1947) .................................... 12, 13
Watters v. Wachovia Bank, N.A., 550 U.S. 1 (2007) .................................. 12, 14, 23
Wells Fargo Bank N.A. v. Boutris, 419 F.3d 949 (9th Cir. 2005) ...........................19
Statutes
12 U.S.C. § 43 ..........................................................................................................18
28 U.S.C. § 1292…………………………………………………………………...4
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Rules
Regulations
12 C.F.R. § 5.34...…………………………………………………………………19
12 C.F.R. § 557……………………………………………………………………15
Other Authorities
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PENI COX,
Plaintiff-Appellant
vs.
Defendants-Appellee
__________________________________________________________________
INTRODUCTION
Fed. R. App. P. Rule 28(c).Cox clarifies the issue presented by the Defendant-
Systems. For the purpose of this reply brief, Defendant-Appellees shall be known
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This section, under which Cox appeals, allows this court to review an interlocutory
order of a district court that dissolved an injunction. The District Court entered an
Interlocutory order in which it ruled it had jurisdiction to lift the State Court
injunction based upon the fact the preemption exists which allows ReconTrust to
operate in the State of Utah without being subject to state laws because ReconTrust
is a National Bank. This court need not review the merits of the injunction itself
because that is not the basis of this appeal, but this court must review the District
Court‟s decision upon which the District Court determined the State Court
Injunction invalid.
Cox submits to this Court that there are three possible scenarios presented by
this appeal:
(1) The District Court lacks jurisdiction. This being so, the case should
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(2) The District Court has jurisdiction but made an error in its interpretation
of the National Bank Act and the ability of a National Bank to preempt State
statutes. The result would be that the District court retains jurisdiction, but, based
(3) The District Court has jurisdiction and did not error in its interpretation
of the National Bank Act. This is the position of ReconTrust which Cox wholly
disputes.
Cox declines to argue the merits of the injunction because the injunction
itself is not the basis of the appeal, but a more substantial issue of preemption1 that
was addressed in the Interlocutory order is what Cox submits to this court as the
basis of appeal.
The Defendants suggest that Plaintiff Cox filed the appeal to decide whether
the district court abused its discretion when it dissolved the state court injunction.
whether the [district] court has subject matter jurisdiction over this action.” District
1
“The question becomes whether the National Banking Act completely preempts these Utah
causes of action allowing for removal in this case.” Appellant Brief Attachment 1, Memo. Dec.
p. 8.
3
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U.S.C. 1292(a) for this court to review an interlocutory order of a district court that
dissolved an injunction.
district court has jurisdiction, not whether the district court abused its discretion in
Petrolera Ecuatoriana, 762 F.2d 464, 470-71 (5th Cir. 1985) (a district court must
relief); Respondent‟s Brief p. 13 (agreeing with this point). The district court ruled
that it held jurisdiction on the sole grounds of complete preemption of both Utah
the injunction. The Defendants reach their conclusion as a result of their flawed
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interest and court costs assessed by the court, and until the foreign
corporation has otherwise complied with the provisions of this part.
The State Court received evidence that ReconTrust, Bank of America, and
MERS are not registered to do business in the State of Utah. The State Court then
wants this court to think that the State Court was outside its boundaries when it
issued the injunction. According to the plain language of the statute, an injunction
was mandatory. If ReconTrust has issue with the fact that the statute requires an
injunction they need to challenge the statute in court, not simply try to convince
this Court that the statute says something other than what it actually does.
jurisdiction is the only question on appeal which this Court must answer. This
Court need not determine the validity of the injunction issued by the State Court.
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discretion.” See Respondent‟s Brief p. 13. Defendants are incorrect. The standard
of review for this case is de novo. See Appellants Brief p. 2. Even assuming
Defendants‟ view of the issues on appeal is correct, the standard of review is still
de novo. Attorney General of Oklahoma v. Tyson Foods, Inc., 565 F.3d 769, 776
SUMMARY OF ARGUMENT
The District Court did not have the power to dissolve the Injunction issued
by the State Court. The District Court claimed that complete preemption existed
making Plaintiff‟s claims federal, and that it had jurisdiction over the issues
enabling it to enter a ruling dissolving the injunction. District Court Memo. Dec.
at 17. The District Court held that there are only two possible grounds for
concluding that the court could retain jurisdiction and dissolve the injunction.
District Court Memo. Dec. at 3. First, if supplemental jurisdiction existed, then the
District Court could have exercised jurisdiction. Id. Second, if the National Bank
Act (NBA) completely preempted both Utah statutes, then the District Court could
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Plaintiff‟s state law claims were not so related to her RESPA claim that they
formed part of the same case or controversy. District Court Memo. Dec. at 3.
Even if they did, a District Court should not exercise supplemental jurisdiction
when the federal law claims are no longer present. Carnegie-Mellon Univ. v.
Second, the NBA does not “completely preempt” both Utah statutes.
Plaintiff has already thoroughly demonstrated this point in the original brief, and
(2) Moreover, 12 U.S.C. 92a and associated regulations do not preempt both
Indeed, the only interpretation that would allow for 12 U.S.C. 92a and
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(5) Defendant now serially shifts positions to disguise the fact that no similar
under Utah law, defendant now claims that federally chartered trust
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and the law of the jurisdiction in which the property is located.” Attach.3.
Even if the NBA did preempt either Utah statute, the NBA does not
“completely preempt” them. Federal preemption requires that the State statute
conflicts with the federal statute, but “complete preemption” requires that the NBA
provide “the exclusive cause of action for the claim asserted and also set forth
procedures and remedies governing that cause of action.” Beneficial Nat’l Bank v.
Thus, the District Court incorrectly exercised jurisdiction in this case, and
this Court should remand this case to the State trial court, or in the alternative issue
ARGUMENT
Plaintiff will not restate all of the same arguments already presented within
arguments that Respondent raises that the Plaintiff has not already covered in the
opening brief.
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A defendant may remove a civil action filed in state court to federal court if
a claim arises under federal law. 28 U.S.C. § 1441(b) (2010). In determining “if a
claim arises under federal law, courts examine the „well pleaded‟ allegations of the
complaint and ignore potential defenses.” Beneficial Nat’l Bank v. Anderson, 539
U.S. 1, 6 (2003) and 28 U.S.C. § 1441 (2010). The action here was removed solely
on the basis of an original claim under RESPA. Since Cox amended her complaint
to voluntarily dismiss the RESPA claim and include only state claims, there are
only two possible grounds for the District Court to retain jurisdiction. Removal is
state law claims “are so related to” her RESPA claim “that they form part of the
same case or controversy.” 28 U.S.C. § 1367(a) (2010). It is not necessary that the
plaintiff alleges no federal claim now, since the court must determine the right to
remove at the time of the petition for removal. Pullman Co. v. Jenkins, 305 U.S.
534, 537 (1939). However, the District Court should refuse supplemental
Cohill, 484 U.S. 343, 350 (1988); Bauchman ex rel. Bauchman v. West High
Sch., 132 F.3d 542, 549 (10th Cir.1997); American Bush v. City of South Salt Lake,
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42 Fed.Appx. 308, 310 (2002). The cases cited by defendant (e.g. Boelens, 759
F.2d 504 (5 Cir. 1985); Westmoreland, 605 F.2d 119 (3 Cir. 1979)) nowhere
suggest that voluntary dismissal of a federal claim after removal leaves the federal
court with jurisdiction to review and reverse prior state law decisions of the state
court. Such decisions would be protected by at least comity and the law of the
case.
Bank of America‟s alleged RESPA and TILA violations, that were dropped
from Cox‟s amended complaint, are not related to ReconTrust‟s power to sell Ms.
Cox‟s home, let alone so related “that they form part of the same case or
(2) The defendant may remove to federal court when a federal statute wholly
Nat’l Bankv. Anderson, 539 U.S. 1, 8 (2003) and 28 U.S.C. § 1441 (2010).
Complete preemption only occurs when the federal statutes at issue provide “the
exclusive cause of action for the claim asserted and also set forth procedures and
remedies governing that cause of action.” Beneficial Nat’l Bank v. Anderson, 539
4
Diversity of citizenship was not asserted as a ground for removal. Further, diversity may not be
resorted to for removal of a matter in which the state court has ruled on a state law issue, to
obtain review of that decision by the federal court.
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U.S. 1, 8 (2003) (emphasis added). In other words, the cause of action, “even if
Thus, in order for complete preemption to occur here, the NBA must not
simply interfere with the state law claims, but the NBA must completely control
this specific cause of action by the Plaintiff. In this case it does not. See for
national banks”; Watters, at 12; and Barnett Bank of Marion County v. Nelson, 517
U.S. 25, 31 stating the NBA preempts state law whenever a state law directly
conflicts with a specific federal statute, or the state law would “significantly
historically under the States‟ police powers. Rice v. Santa Fe Elevator Corp., 331
U.S. 218, 230 (1947). “This assumption provides assurance that "the federal-state
balance," United States v. Bass, 404 U.S. 336, 349 (1971), will not be disturbed
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Inc. v. Paul, 373 U.S. 132, 142 (1963), that its enactments alone are to regulate a
part of commerce, state laws regulating that aspect of commerce must fall. This
Burbank v. Lockheed Air Terminal, Inc., 411 U.S. 624, 633 (1973); Rice at 230;
Jones at 525. However, “States, on the other hand, have always enforced their
general laws against national banks--and have enforced their banking-related laws
against national banks.” Cuomo at 2720-21. As both Utah statutes are general laws,
applying to national banks and non-national banks alike, they merit presumption
Wall. 353, 362 (1870). Therefore, since both Utah statutes concern the acquisition
and transfer of property within their borders, they fall within the traditional police
powers of the States. Thus, these statutes merit presumption against preemption
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B. As Stated Previously, the NBA does not Preempt either Utah Statute
As originally stated in the Appellant‟s Brief, the NBA only preempts a State
statute in two instances. First, when the state exercises visitorial powers. Cuomo at
2721, and Watters at 6. The Supreme Court has defined visitorial powers as a
demand. Cuomo, at 2721. But since neither Utah Code § 16-10a-15015 nor § 57-1-
21(3) are an exercise of visitorial powers, the NBA cannot preempt them.
Second, the NBA preempts state law whenever a state law directly conflicts
with a specific federal statute, or the state law would “significantly impair” a
Section 92a addresses the applicability of state laws to a national bank's trust
powers:
5
16-10a-1505(3) This chapter does not authorize this state to regulate the organization or
internal affairs of a foreign corporation authorized to transact business in this state.
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Therefore, a national bank may receive the legal status as a trustee from the
Comptroller “when not in contravention of State or local law” within the State in
which it is “located.”
Looking at the plain language of the statute we can determine the definition
“Located” refers to any State where the national bank is in competition with State
banks.
The OCC interprets “locate” not as defining situs in one state, but in any
State in which the national bank is in competition with State banks. To clarify
“locate” the Comptroller promulgated 12 C.F.R. § 9.7. “The state laws that apply
to a national bank's fiduciary activities by virtue of 12 U.S.C. 92a are the laws of
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the State in which the bank acts in a fiduciary capacity.” 12 C.F.R. 9.7 (e). A
national bank acts in fiduciary capacity “in the State in which it accepts the
6
In Watters the Supreme Court used the word “operate” interchangeably with locate when
discussing an analogous situation involving the location of a subsidiary bank.
7
Note that “States” is plural, meaning that the bank can operate and conduct its activities in more
than one State.
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banks? Utah State banks. ReconTrust is not competing with California State
banks in Utah. ReconTrust is not competing with Texas State banks in Utah.
Utah foreclosures take place in Texas.” Appellee Brief pg. 41. ReconTrust at least
First, the OCC Interpretive Letters are not binding. The 1994 amendments
on the NBA recognized that the OCC had been issuing interpretive letters on
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federal preemption. See 12 U.S.C. § 43. However, by its own language, § 43 does
not confer any authority on the OCC to make binding determinations concerning
statutory preemption. Id. Rather, § 43(a) requires the OCC to follow notice-and-
comment procedures before issuing “any opinion letter or interpretive rule that
concludes that Federal law preempts the application to a national bank of any State
interpretive rule,” makes it clear that these types of administrative actions do not
have any force of law and generally are not eligible for Chevron deference.
See United States v. Mead Corp., 533 U.S. 218 (2001); Christensen v. Harris
each instance, the OCC appears to adhere to the analysis that the Plaintiff set out in
the original brief. See Petitioner‟s Brief at p. 14-15. The NBA preempts State law
law on point. See OCC Interp. Letter No. 1103 (North Carolina law specifically
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visitorial powers. However, for the reasons stated in the Petitioner‟s original brief,
Second, Defendants‟ urge reliance on three more non-binding cases that they
believe to be persuasive in this case: Wells Fargo Bank N.A. v. Boutris, 419 F.3d
949 (9th Cir. 2005); 770 PPR, LLC v. TJCV Land Trust, 30 So.3d 613 (Fla. App.
2010); Indiana National Bank v. Roberts, 326 So.2d 802 (Miss. 1976). Not only
visitorial powers over a subsidiary of a national bank. Boutris, 419 F.3d at 949-70.
Both TJCV and Roberts held that a State cannot prohibit a national bank from
filing suit or being sued due to a specific federal law stating to the contrary. It is
not clear how these cases are particularly analogous, let alone persuasive, to the
current dispute.
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Third, Defendant argues that Plaintiff Cox uses this appeal as a challenge to
remand ruling. This is incorrect. Plaintiff filed this appeal to challenge the district
court‟s ruling that the NBA completely preempted both Utah statutes. Such a
decision implies that State regulations concerning commercial and real property
law cannot apply to national banks, a completely absurd result and one that
conflicts with the long history of federal law concerning State regulation of
national banks.
F. The National Bank Act does not Completely Preempt both Utah
Statutes
As stated above, the NBA does not preempt either Utah statute. However,
the standard here is not that the National Bank Act must preempt these statutes, but
that they must “completely preempt” them. Complete preemption only occurs
when the federal statutes at issue provide “the exclusive cause of action for the
claim asserted and also set forth procedures and remedies governing that cause of
action.” Beneficial Nat’l Bank v. Anderson, 539 U.S. 1, 8 (2003) (emphasis added).
In other words, the cause of action, “even if pleaded in terms of State law, is in
original jurisdiction over a case in which the complaint presents a State-law cause
of action, but also asserts that federal law deprives the defendant of a defense he
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may raise, ... or that a federal defense the defendant may raise is not sufficient to
defeat the claim.” Franchise Tax Bd. of Cal. v. Construction Laborers Vacation
Trust for Southern Cal., 463 U.S. 1, 10 (1983). “[A] case may not be removed to
federal court on the basis of ... the defense of pre-emption ....” Caterpillar Inc. v.
Williams, 482 U.S. 386, 393, 107 S.Ct. 2425 (1999). To be sure, preemption
requires a State court to dismiss a particular claim filed under State law, but it does
that the National Bank Act preempts both Utah statutes, the National Bank Act
does not provide for “the exclusive cause of action for the claim asserted and also
set forth procedures and remedies governing that cause of action” in all State
agency registration and trustee power of sale cases based on State law. (Emphasis
added). Beneficial at 8.
Therefore, the District Court incorrectly ruled that the National Bank Act
“So of the banks. They are subject to the laws of the State, and are
governed in their daily course of business far more by the laws of the
State than of the Nation. *** It is only when the State law
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“We have more than once held in this court that the national banks
organized under the acts of Congress are subject to State Legislation,
except were such legislation is in conflict with some act of Congress,
or where it tends to impair or destroy the utility of such banks, as
agents or instrumentalities of the United States, or interferes with the
purposes of their creation.” Waite v. Dowley, 94 U.S. 527, 533
(1876).
“This Court has often pointed out that national banks are subject to
state laws, unless those laws infringe the national banking laws or
impose an undue burden on the performance of the banks' functions.”
Anderson Nat. Bank v. Luckett, 321 U.S. 233, 248 (1944).
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“No one denies that the National Bank Act leaves in place some state
substantive laws affecting banks. This [national banking] system
echoes many other mixed state/federal regimes in which the Federal
Government exercises general oversight while leaving state
substantive law in place.”Cuomo v. The Clearing House Association,
L.L. C. and Office of the Comptroller of the Currency, 129 S. Ct.
2710, 2717-18 (2009).
B. The Correct Interpretation of How Utah State Laws Apply to National Banks
property do not apply to national banks. That would mean that Utah could regulate
how individuals and State banks acquire and transfer property, but that these laws
could not apply to national banks. Not only does this run afoul of Supreme Court
case law (“[N]ational Banks acquisition and transfer of property [are] based on
362 (1870)), but it also violates States police powers8 and allows national banks to
8
“See, e.g., 12 C.F.R. §§ 557.13(a) & 560.2(c) (state laws pertaining to contract and commercial
law, tort law, criminal law, real property law, and homestead law are not preempted by OTS
regulations); de la Cuesta, 458 U.S. at 172, 102 S.Ct. 3014 (“Nothing in the language of ...
HOLA ... suggests that Congress intended to permit the [OTS] to displace local laws, such as tax
statutes and zoning ordinances, not directly related to savings and loan practices.”) (O'Connor, J.,
concurring); First Nat'l Bank v. Dickinson, 396 U.S. 122, 90 S.Ct. 337, 24 L.Ed.2d 312 (1969)
(allowing application of a Florida branch bank statute to national banks in the state); Franklin
Nat. Bank v. New York, 347 U.S. 373, 378 n. 7, 74 S.Ct. 550, 98 L.Ed. 767 (1954) ( “[N]ational
banks may be subject to some state laws in the normal course of business if there is no conflict
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The Defendants also contend that 12 CFR 9.7(e) grants them the power of
sale. Both the plain and correct reading of this statute is that federal law limits the
State or local law.” A federally chartered trust company can have no power
conferred upon it by the comptroller which is not conferred by State law, such as §
But the Defendants then take this regulation to justify that they may ignore
any State law that they believe “limits” or establishes “preconditions” on their
regulation was meant to ensure that national banks may have the legal authority to
act as a trustee (among the other fiduciary capacities) - not to ignore the laws of the
national bank could ignore all State laws since they would potentially “limit” or
promulgate that would not in some way “limit” a national bank‟s ability to act in
with federal law.”); see also Nat'l State Bank v. Long, 630 F.2d 981, 985 (3d Cir.1980)
(“[R]egulation of banking has been one of dual [federal-state] control since the passage of the
first National Bank Act in 1863.”); Perdue v. Crocker Nat'l Bank, 38 Cal.3d 913, 937, 216
Cal.Rptr. 345, 702 P.2d 503 (1985) (“Congress has declined to provide an entire system of
federal law to govern every aspect of national bank operations.”), appeal dismissed, 475 U.S.
1001, 106 S.Ct. 1170, 89 L.Ed.2d 290 (1986) (noting lack of jurisdiction).”
Bank of Am. v. City & County of San Francisco, 309 F.3d 551, 566 (9th Cir. 2002)
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The correct reading is that a national bank may receive the legal status as a
trustee from the Comptroller “when not in contravention of State or local law” of
the State in which it acts with fiduciary capacity. However, a national bank must
still respect the method in which a State regulates the acquisition and transfer of
property.
ReconTrust claims that the Utah registration statute inhibits the OCC‟s
with the division [of corporations]. Utah Code Section 7-1-704 requires financial
or which is also a subsidiary of BAC, and doing business in the State of Utah, is
made. Everyone can register any business entity they want. The cost is $70.00.
identified.
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The public policy under this statute is that registration makes it easier for
the State.
The OCC may give ReconTrust the necessary authority to carry on business
as a National Bank. However, the status of national bank is not license for
sufficient. As Plaintiff stated previously in Cox‟s opening brief, the Utah statute
requiring registration of a Foreign Corporation does not require any visitation, and
the policy behind the statute is that it makes it easier for citizens to obtain service
CONCLUSION
For the foregoing reasons, this Court must reverse the order of the District
Court in which it retains jurisdiction, and remand to the State trial Court. Or,
Since this case presents certain key issues concerning the National Bank Act
and its relationship to State law within the Tenth Circuit, we believe that Oral
Argument is necessary.
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2. This brief complies with the typeface requirements of the Fed. R. App. P.
32(a)(5) & (6) because it has been prepared in 14 point Times New Roman—a
plain, Roman, proportionally spaced typeface—using Microsoft Word 2007, the
word processing software used to create prepare this brief.
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This brief complies with this Court‟s March 18, 2009 general order
regarding electronic filing because:
(2) the ECF submission is an exact copy of the 7 hard copies of this brief
and documents, which will be submitted within 2 business days of the ECF
filing;
(3) the ECF submission was scanned for viruses with the most recent version
of AVG, and according to the program is free of viruses.
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Michael Huber Reed Smith LLP
8170 S. Highland Drive, Suite E5 225 Fifth Avenue
Sandy, Utah 84093 Pittsburgh, Pennsylvania
JMartin@ReedSmith.com
Richard F. Ensor (10877) Phone: (412) 288-3131
VANTUS LAW GROUP, P.C.
3165 East Millrock Drive, Suite 160 David Bird
Salt Lake City, Utah 84121 Reed Smith LLP
Telephone: (801) 833-0500 225 Fifth Avenue
Facsimile: (801) 931-2500 Pittsburgh, Pennsylvania
DBird@ReedSmith.com
Roy W. Arnold (Admitted pro hac Phone: (412) 288-3131
vice)
REED SMITH LLP
Reed Smith Centre
225 Fifth Avenue /s/ John Christian Barlow
Pittsburgh, PA 15222
Telephone: (412) 288-3916
Facsimile: (412) 288-3063
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ATTACHMENT 1
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Attorneys for Defendants ReconTrust Company, N.A., BAC Home Loans Servicing, LP
(erroneously sued as “Bank of America Home Loans Servicing, LP”), Bank of America, N.A.
(erroneously sued as “Bank of America, FSB”), and Mortgage Electronic Registration Systems,
Inc.
Defendants.
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I. INTRODUCTION
On June 7, 2010, only a month after serving her complaint on ReconTrust, N.A.
(“ReconTrust”), Plaintiff Peni Cox (“Plaintiff”) filed an “emergency” motion for partial
summary judgment seeking an adjudication of her first and second claims which allege that
ReconTrust violated registration and trustee qualification requirements set forth in Utah Code §§
Plaintiff’s motion raises the same issues previously addressed by this Court in connection
with the motion to dissolve the preliminary injunction filed by ReconTrust and other defendants.
After hearing oral argument, on June 11, 2010, the Court granted the motion to dissolve the
injunction finding that Utah Code §§ 57-1-21 and 16-10a-1501 are preempted by federal law.
(6/11/10 Order [Doc. # 42]; Memo. Dec. [Doc. # 45].) The Court’s order and its conclusion that
these statutory provisions are preempted by federal law are dispositive of Plaintiff’s first and
second claims. Therefore, this Court should deny Plaintiff’s motion for partial summary
judgment.1
II. RESPONSE TO PLAINTIFF’S STATEMENT OF UNDISPUTED FACTS
any admissible evidence. Indeed, the motion fails to establish any material facts necessary to
state any claim against ReconTrust, let alone establish any entitlement to judgment against
ReconTrust. Plaintiff does not present evidence to establish even the basic elements of her
claim; namely, that ReconTrust foreclosed on her home in violation Utah Code §§ 57-1-21 and
1
Subsequent to filing her motion for partial summary judgment, Plaintiff moved to dismiss her third, fourth and fifth
claims from the amended complaint, as well as New Line Mortgage as a defendant. (Motion to Amend [Doc. # 49].)
Accordingly, Plaintiff’s first and second claims are the only remaining claims in this action, and ReconTrust and the
other remaining defendants filed a motion to dismiss those claims. (Motion to Dismiss [Doc. # 52]; Memo. In
Support [Doc # 53].)
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citations to Utah Code §§ 57-1-21 and 16-10a-1501, as well as citation to inapposite case law
which does not support her motion. Because Plaintiff’s motion is not supported by any
admissible evidence, it should be denied for this reason alone. 2 In any event, for reasons set
forth below, Plaintiff’s motion also should be denied because her claims are preempted by
federal law.
Federal Rules of Civil Procedure 56 provides that summary judgment can be granted only
“if the pleadings, the discovery and disclosure materials on file, and any affidavits show that
there is no genuine issue as to any material fact and that the movant is entitled to a judgment as a
matter of law.” Fed. R. Civ. P. 56(c) (emphasis added). When applying this standard, a court
should review the factual record in the light most favorable to the party opposing summary
judgment. Wilkerson v. Shinseki, 606 F.3d 1256, 1262 (10th Cir. 2010). For purposes of
summary judgment, the court should deny a motion for summary judgment if a reasonable jury
could return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
249 (1986). Summary judgment will not be granted, even if there is no genuine issue as to any
material fact, where a moving party is not entitled to judgment as a matter of law. See Applied
Genetics Intern., Inc. v. First Affiliated Securities, Inc., 912 F.2d 1238, 1242 (10th Cir. 1990)
2
To the extent Plaintiff’s statement of facts warrant a specific response under Local Rule 56(c), ReconTrust
responds as follows:
Plaintiff Fact No. 1: Disputed. ReconTrust is a national banking association and is a wholly owned
subsidiary of Bank of America, N.A. (Aff. Of Jeffrey Aiken [Doc. # 20].) Furthermore, based on the Court's
previous ruling in this case and the arguments below, ReconTrust is authorized to conduct foreclosures in the state
of Utah. (6/11/10 Order [Doc. # 42]; Memo. Dec. [Doc. # 45].)
Plaintiff Fact No. 2-3: Undisputed. These facts are not material to Plaintiff’s motion.
Plaintiff Fact Nos. 4-11: Disputed: Plaintiff's assertions are not facts, but rather legal conclusions which
are disputed as set forth below.
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(even if no genuine issue of material fact in dispute, district court must still correctly apply
substantive law); APC Operating Partnership v Mackey, 841 F.2d 1031, 1033 (10th Cir. 1988)
(same); see also Fed. R. Civ. P. 56(c). Where a plaintiff seeks summary judgment of state-law
claims which are preempted by federal law, summary judgment must be denied. See Dadoub v.
Gibbons, 42 F.3d 285, 290 (5th Cir. 1995) (affirming summary judgment for defendant where
Despite this Court’s preemption analysis, Plaintiff continues to argue that ReconTrust’s
foreclosure of her home violates Utah Code §§ 57-1-21 and 16-10a-1501. Plaintiff’s motion as
to her first and second claims fails as a matter of law, however, because this Court already found
that her claims, based on Utah Code § 57-1-21 and Utah Code § 16-10a-1501, are preempted by
This Court should deny Plaintiff’s motion for summary judgment with respect to her first
claim under Utah Code § 16-10a-1501 because this Court previously held that Congress intended
“to completely preempt the area of requirements a national bank must meet before conducting
business in Utah. Specifically, section 1501 mandates that a “foreign corporation may not
transact business in this state until its application for authority to transact business is filed by the
division.” Utah Code § 16-10a-1501. Where a foreign corporation’s application is not approved
and filed by the appropriate division, that corporation may not maintain a proceeding in any Utah
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violation of these provisions, section 1502(5) permits a court to issue “an injunction restraining
the further transaction of the business of the foreign corporation and the further exercise of any
These statutes “set out competing state requirements for a bank to transact business,
assign a competing authority to judge if the requirements are met, and provide for competing
remedies for a banks’ failure to meet the state’s requirements.” (Memo. Dec. [Doc. # 45] at 10.)
However, sections “26, 27, and 42 of the National Bank Act leave no room for Utah Code Ann.
§§ 16-10a-1501 and 1502” to regulate national banks. Id. Thus, Plaintiff’s claims based on Utah
Code §§ 16-10a-1501 and 1502 are preempted because the Comptroller is “intended to be the
exclusive authority on what a national bank must do to transact business in any state” under 12
U.S.C. §§ 26-27, 42. Id. at 11. Plaintiff’s motion based on this statute accordingly should be
denied.
This Court also should deny Plaintiff’s motion for summary judgment with respect to her
second claim under Utah Code § 57-1-21 because 12 U.S.C. § 92a preempts section 57-1-21.
(Memo. Dec. [Doc. # 45] at 14.) Section 92a provides that a national bank’s position as a trustee
“shall not be deemed to be in contravention of State or local law” if a “state allows a competitor
of a national bank to act as a trustee.” Id.; 12 U.S.C. § 92a(b). In other words, where a state law
regulation allows a national bank’s competitor to act as a trustee, a national bank may also act as
a trustee pursuant to section 92a. (Memo. Dec. [Doc. # 45] at 14.) Thus, where state regulation
allows a competitor to act as a trustee, but prohibits a national bank from doing so, section 92a
preempts the state law regulation and permits a national bank to act as a trustee. Id.; see also
Zabriskie v. ReconTrust, et al., Case No. 2:08-CV-00155-BSJ (Doc. No. 31, dated Nov. 12,
2008).
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Utah Code § 57-1-21 provides a list of persons eligible to act as trustees in Utah. These
include members of the Utah state bar, depository institutions, and title insurance companies.
Utah Code § 57-1-21. ReconTrust is not permitted to serve as a trustee under this Utah
regulation. This restriction on ReconTrust’s ability to act as a trustee clearly conflicts with 12
U.S.C. § 92a(b) because Utah Code § 57-1-21 “allows a ‘depository institution,’ which is
unquestionably a competitor of a national bank, to act as a trustee.” (Memo. Dec. [Doc. # 45] at
14.) Preemption principles thus bar the application of § 57-1-21 to ReconTrust, and Plaintiff’s
request for summary judgment on her claim based on that statute must be denied.
IV. CONCLUSION
Plaintiff’s motion for partial summary judgment fails. This Court’s June 11, 2010
Memorandum Opinion clearly establishes that the National Bank Act preempts Plaintiff’s claims
under Utah Code §§ 57-1-21 and 16-10a-1501. Accordingly, Plaintiff fails to establish an
entitlement to judgment on those claims, and this Court should deny Plaintiff’s Motion.
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CERTIFICATE OF SERVICE
THE UNDERSIGNED CERTIFIES that on this 8th day of July 2010, a true and correct
copy of the foregoing was filed with the Clerk of Court via ECF and was therefore served by
Michael Huber
8170 S. Highland Drive, Suite E5
Sandy, Utah 84093
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ATTACHMENT 2
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Attorneys for Defendants ReconTrust Company, N.A., BAC Home Loans Servicing, LP
(erroneously sued as “Bank of America Home Loans Servicing, LP”), Bank of America, N.A.
(erroneously sued as “Bank of America, FSB”), and Mortgage Electronic Registration Systems,
Inc.
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1. I am an attorney duly licensed to practice before this Court. I am the attorney for
Defendants ReconTrust Company, N.A., BAC Home Loans Servicing, LP (erroneously sued as
“Bank of America Home Loans Servicing, LP”), Bank of America, N.A. (erroneously sued as
“Bank of America FSB”), and Mortgage Electronic Registration Systems, Inc. in this action, and
2. The Court can take judicial notice of the fact that ReconTrust Company, N.A. is a
4. Specifically, the following attached documents establish that this fact cannot be
disputed:
a. Attached hereto as Exhibit A is a true and accurate print out of the Office
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5. The citations listed on the upper left corner of the exhibits identify the specific
6. I declare under penalty of perjury and under the laws of the State of Utah that the
EXECUTED this 26th day of July 2010 in Salt Lake City, Utah.
Respectfully submitted,
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CERTIFICATE OF SERVICE
THE UNDERSIGNED CERTIFIES that on this 26th day of July 2010, a true and correct
copy of the foregoing was filed with the Clerk of Court via ECF and was therefore served by
Craig Smay
174 East South Temple
Salt Lake City, Utah 84111
Michael Huber
8170 S. Highland Drive, Suite E5
Sandy, Utah 84093
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ATTACHMENT 3
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