UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
______________________________
)
DAVID MEAD, )
)
Plaintiff, )
)
v. ) Civil Action No. 08-1597 (RWR)
)
CITY FIRST BANK OF DC, N.A., )
)
Defendant. )
______________________________)
MEMORANDUM ORDER
In his original complaint, plaintiff David Mead brought
claims against defendant City First Bank of DC alleging fraud and
unconscionability regarding loan arrangements between the
parties. Mead has filed a motion for leave to amend the
complaint to add additional claims and defendants. Among other
pending motions are the defendant’s motion for partial summary
judgment, the defendant’s motion for an entry of default, the
plaintiff’s motion for an extension of time to file an answer to
the defendant’s counterclaim, and the plaintiff’s motion for an
CM/ECF password.
A plaintiff is allowed to amend his complaint after an
answer has been filed “only by leave of court or by written
consent of the adverse party; and leave shall be freely given
when justice so requires.” Fed. R. Civ. P. 15(a)(2). “If the
underlying facts or circumstances relied upon by a plaintiff may
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be a proper subject of relief, he ought to be afforded an
opportunity to test his claim on the merits.” Foman v. Davis,
371 U.S. 178, 182 (1962). Undue delay, undue prejudice to the
defendant, or futility of the proposed amendments are factors
that may warrant denying leave to amend. Atchinson v. District
of Columbia, 73 F.3d 418, 425 (D.C. Cir. 1996). The defendant
has the burden of showing why leave to file an amended complaint
should not be granted. LaPrade v. Abramson, Civil Action No.
97-10 (RWR), 2006 WL 3469532, at *3 (D.D.C. Nov. 29, 2006). The
decision to grant or deny leave to amend is committed to the
sound discretion of the district court. Foman, 371 U.S. at 182;
James Madison Ltd. v. Ludwig, 82 F.3d 1085, 1099 (D.C. Cir.
1996).
The proposed first amended complaint asserts seven claims
against multiple defendants, including several defendants whose
citizenship is not diverse to Mead’s. Mead contends that
jurisdiction over his amended complaint is proper under 28 U.S.C.
§ 1331 because Count Two of the amended complaint alleges a
federal question under 12 U.S.C. §§ 3403 and 3417, which provide
that a financial institution is liable for damages if it
“provide[s] to any Government authority access to or copies of,
or information contained in, the financial records of any
customer except in accordance with the provisions of [chapter 35
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of Title 12 of the United States Code.]”1 City Bank opposes
Mead’s motion for leave to amend the complaint, arguing that
granting leave to amend the complaint would be futile because
federal question jurisdiction is not present in the amended
complaint and the presence of nondiverse defendants in the
amended complaint defeats diversity jurisdiction under 28 U.S.C.
§ 1332. In addition, City Bank contends that Mead has failed to
state claims in Counts One and Five and that no claims have been
stated against proposed defendants CF Bank Corp. and Central
Fidelity Corp.
A defendant bears the burden to show futility, while a
plaintiff bears the burden to establish the court’s jurisdiction
over his case. See Steel Co. v. Citizens for a Better Env’t,
523 U.S. 83, 103 (1998) (“The party invoking federal jurisdiction
bears the burden of establishing its existence.”). Although the
defendant contends that “[n]o action alleged to have been taken
violates” the federal statutes cited in Count Two,
“[j]urisdiction . . . is not defeated . . . by the possibility
that the averments might fail to state a cause of action on which
1
Mead also suggests that federal question jurisdiction may
be invoked here under 28 U.S.C. § 2201, Federal Rules of Civil
Procedure 54, 57, and 58, and the Seventh Amendment. None of
these sources is a federal law under which his civil action
arises and they cannot establish this court’s jurisdiction under
28 U.S.C. § 1331. Count Six seeking a declaratory judgment
regarding state law claims does not establish federal question
jurisdiction, and his amended complaint asserts no claim arising
out of the Seventh Amendment or the federal rules.
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[a plaintiff] could actually recover. For it is well settled
that the failure to state a proper cause of action calls for a
judgment on the merits and not for a dismissal for want of
jurisdiction.” Bell v. Hood, 327 U.S. 678, 682 (1946). It is
not true that the amended complaint does not allege a violation
of a federal statute and allege facts in support of that
allegation. Thus, City Bank has not shown that there is no basis
for this court’s jurisdiction, and has not carried its burden of
establishing that granting leave to amend the complaint would be
futile.2
Accordingly, it is hereby
ORDERED that the plaintiff’s motion for leave to amend the
complaint [9] be, and hereby is, GRANTED. Because this order
addresses whether the defendant has sustained its burden of
showing futility but does not determine whether the plaintiff has
carried his burden of establishing the court’s jurisdiction over
all of his claims, it is further
ORDERED that Mead shall file by March 26, 2009 a memorandum
establishing this court’s subject matter jurisdiction, and all
defendants on whom process has been served by that date shall
respond by April 6, 2009. It is further
2
Similarly, City Bank’s challenges to adding particular
counts and defendants do not show futility of the entire
amendment, and any such defects can be raised and cured by
appropriate motion.
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ORDERED that the defendant’s motion for partial summary
judgment [4] be, and hereby is, DENIED WITHOUT PREJUDICE in light
of the amended complaint. It is further
ORDERED that the defendant’s motion [12] for an entry of
default and the plaintiff’s motion [16] for an extension of time
to file an answer to the defendant’s counterclaim be, and hereby
are, DENIED AS MOOT. It is further
ORDERED that the plaintiff’s motion [25] for a CM/ECF
password be, and hereby is, DENIED WITHOUT PREJUDICE for failure
to support his motion with the information required by Local
Civil Rule 5.4(b)(2).
SIGNED this 5th day of March, 2009.
________/s/_________________
RICHARD W. ROBERTS
United States District Judge
Mead v. City First Bank of Dc, N.A.
Combined Opinion