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Better Mkts., Inc. v. United States Department of Justice

United States District Court, D. Columbia.

March 18, 2015


For BETTER MARKETS, INC., Plaintiff: Dennis M. Kelleher, BETTER MARKETS, INC., ashington, DC.

For DEPARTMENT OF JUSTICE, ERIC H. HOLDER, JR., in his official capacity as Attorney General of the United States, Defendants: Eric B. Beckenhauer, LEAD ATTORNEY, U.S. DEPARTMENT OF JUSTICE, Civil Division, Federal Programs Branch, Washington, DC.


BERYL A. HOWELL, United States District Judge.

The plaintiff, Better Markets, Inc., an advocacy organization dedicated to promoting " the public interest in the financial markets," Compl. ¶ 29, ECF No. 11, filed this complaint to challenge entry by the defendants, the United States Department of Justice and the Attorney General, into a multi-billion dollar settlement agreement with JPMorgan Chase & Co. (" Chase" ) for alleged wrongdoing stemming from the financial crisis of 2008. See generally Compl. Pending before the Court is the defendants' Motion to Dismiss on grounds of lack of subject matter jurisdiction or, alternatively, for failure to join an indispensable party, under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(7), respectively. Defs.' Mot. Dismiss at 1, ECF No. 12. Since the plaintiff lacks standing to pursue this action, the defendant's motion is GRANTED.


Although the plaintiff provides a lengthy description of the events leading up to the settlement between the defendants and Chase, see Compl. ¶ ¶ 46--102, the vast majority of that information is immaterial to the resolution of the pending motion. Thus, only those facts necessary to resolve the pending motion to dismiss due to the plaintiff's lack of standing are discussed below.

The plaintiff avers that it is a " 501(c)(3) tax-exempt nonprofit organization" that was " founded in 2010 to promote the public interest in the financial markets." Compl. ¶ 29. The plaintiff " advocates for greater transparency, accountability, and oversight in the financial system through a variety of activities," including commenting on proposed regulations, " public advocacy," and litigation. Id.

In 2013, the defendants, as well as the FDIC, " the Federal Housing Finance Agency, the National Credit Union Administration, and the attorneys general of California, Delaware, Illinois, Massachusetts, and New York," entered into a " global settlement" agreement with Chase in the amount of " $13 billion, including $4 billion in consumer relief." Defs.' Mem. Supp. Defs.' Mot. Dismiss (" Defs.' Mem." ) at 1, ECF No. 12; see Compl. ¶ 48 (summarizing terms of settlement). The settlement agreement sought to resolve " a defined set of claims," including those raised in nineteen lawsuits filed by the parties to the settlement. Defs.' Mem. at 1. As a result of the settlement, those lawsuits " have since been dismissed with prejudice." Id.

Out of the $13 billion settlement, " $2 billion was paid to the U.S. Department of Justice as a civil monetary penalty under" the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (" FIRREA" ). Defs.' Mem. at 8 (citing Defs.' Mem. Ex. 1 (Settlement Agreement) ¶ 1(A)(i), ECF No. 12-1). Another $4 billion was committed to consumer relief through rate reductions and loan forgiveness for qualifying mortgage holders. See Defs.' Mem. Annex 2 at 2--4, ECF No. 12-3. The balance was distributed to the National Credit Union Association, the FDIC, the states of New York, California, Delaware, and Illinois, and the Commonwealth of Massachusetts, to resolve potential claims by those entities against Chase. Defs.' Mem. at 8. The plaintiff was not a party to the agreement. See generally Compl.

The plaintiff filed the instant suit alleging that the defendants' decision to enter into the settlement agreement instead of filing a lawsuit against Chase violated the Constitution's Separation of Powers Clause, the Administrative Procedure Act (" APA" ), and the FIRREA. See generally id. The defendants moved to dismiss the Complaint for lack of subject matter jurisdiction because the plaintiffs, inter alia, lack standing to challenge the defendants' actions, and the plaintiff failed to join indispensable parties, including several States. Defs.' Mem. at 3--4, ECF No. 12.


A. Dismissal Under Federal Rule Of Civil Procedure 12(b)(1)

" 'Federal courts are courts of limited jurisdiction,' possessing 'only that power authorized by Constitution and statute.'" Gunn v. Minton, 133 S.Ct. 1059, 1064, 185 L.Ed.2d 72 (2013) (quoting Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994)). Indeed, federal courts are " forbidden . . . from acting beyond our authority," NetworkIP, LLC v. FCC, 548 F.3d 116, 120, 383 U.S.App.D.C. 310 (D.C. Cir. 2008), and, therefore, have " an affirmative obligation 'to consider whether the constitutional and statutory authority exist for us to hear each dispute.'" James Madison Ltd. by Hecht v. Ludwig, 82 F.3d 1085, 1092, 317 U.S.App.D.C. 281 (D.C. Cir. 1996) (quoting Herbert v. Nat'l Acad. of Sciences, 974 F.2d 192, 196, 297 U.S.App.D.C. 406 (D.C. Cir. 1992)). Absent subject matter jurisdiction over a case, the court must dismiss it. Arbaugh v. Y& H Corp., 546 U.S. 500, 506, 126 S.Ct. 1235, 163 L.Ed.2d 1097 (2006); Fed.R.Civ.P. 12(h)(3). When considering a motion to dismiss under Rule 12(b)(1), the Court must accept as true all uncontroverted material factual allegations contained in the complaint and " construe the complaint liberally, granting plaintiff ...

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