ORDER REGARDING PLAINTIFFS’ MOTION FOR RECONSIDERATION, OR, IN THE ALTERNATIVE, TO CERTIFY AN ORDER FOR INTERLOCUTORY APPEAL
I. INTRODUCTION
Plaintiffs Federal Deposit Insurance Corporation as Receiver for Franklin
II. PROCEDURAL BACKGROUND
The three above-captioned cases involve allegations of material misstatements and omissions in connection with the offering documents of nineteen Countrywide mortgage-backed securities (“MBS”) purchased by Franklin Bank, S.S.B., Guaranty Bank, and Security Savings Bank. Between July 2005 and April 2006, Guaranty Bank purchased eight Countrywide MBS. On August 21, 2009, Guaranty Bank failed and the FDIC was appointed as its receiver. The FDIC, in its capacity as receiver for Guaranty Bank, filed suit nearly three years later to recover $592 million in alleged damages for violations of the TSA and the federal Securities Act of 1933. On August 26, 2013, the Court dismissed the federal securities claims because the 1933 Act’s statute of repose had expired before the FDIC was appointed as receiver for Guaranty Bank. Guaranty Bank,
Franklin Bank purchased six Countrywide MBS between January 2006 and August 2007. On November 7, 2008, the FDIC was appointed receiver of Franklin Bank. Three years later, FDIC-Franklin filed suit to recover $40 million in alleged damages for violations of the TSA and the federal Securities Act of 1933. On March 21, 2013, the Court dismissed as time-barred the claims of FDIC-Franklin under Section 11 of the 1933 Act for two of the six Countrywide MBS Franklin Bank purchased. See FDIC as Receiver for Franklin Bank v. Countrywide Sec. Corp., No. 2:12-cv-3297, slip op. (C.D.Cal. Mar. 21, 2013) (Dkt. No. 90).
Between February 2006 and September 2006, Security Savings Bank purchased five Countrywide MBS. On February 27, 2009, Security Savings Bank failed and the FDIC was appointed as its receiver. Nearly three years later, the FDIC-SSB filed suit on behalf of Security Savings Bank to recover $12 million in alleged damages for violations of the NSA and the federal Securities Act of 1933. After a ruling by this Court dated March 21, 2013, the only remaining claims brought by FDIC-SSB were for violations of Section 11 based on CWALT 2006-21CB and the NSA based on CWALT 2006-29T1 and CWALT 2006-26CB. See FDIC as Receiver for Security Savings Bank v. Bank of Am. Sec. LLC,
III. THE COURT’S DECISION IN GUARANTY BANK
All three of the decisions dated August 26, 2013 concluded that FIRREA’s extender provision does not preempt the state statutes of repose in those cases, but the principal reasoning for that conclusion was set forth in Guaranty Bank. At issue in Guaranty Bank was FIRREA’s extender provision, which provides in relevant part:
(14) Statute of limitations for actions brought by conservator or receiver
(A) In general. Notwithstanding any provision of any contract, the applicable statute of limitations with regard to any action brought by the Corporation as conservator or receiver shall be—
(i) in the case of any contract claim, the longer of—
(I) the 6 — year period beginning on the date the claim accrues; or
(II) the period applicable under State law; and
(ii) in the case of any tort claim (other than a claim which is subject to section 1441a(b)(14) of this title), the longer of—
(I) the 3 — year period beginning on the date the claim accrues; or
(II) the period applicable under State law.
12 U.S.C. § 1821(d)(14). The Court carefully considered whether the term “statute of limitations” referred to state statutes of repose, such as the one contained in Article 581-33(H)(2)(b) of the TSA. After discussing important distinctions between the purpose of a statute of limitation and a statute of repose, the Court concluded that the issue was ultimately one of preemption because “Article 581-33(H)(b) reflects the State’s intent to set a fixed cut-off point to file suit” while FIRREA “supplants state time limitations . under certain circumstances and grants the FDIC additional time to bring claims.” Guaranty Bank,
IV. PLAINTIFFS’ MOTION FOR RECONSIDERATION
A. Legal Standard
Motions for reconsideration are governed by the Local Rules of this district. Local Rule 7-18 provides that reconsideration is permissible only on the following grounds: “(a) a material difference in fact or law from that presented to the Court before such decision that in the exercise of reasonable diligence could not have been known to the party moving for reconsideration at the time of such decision/ or (b) the emergence of new material facts or a change of law occurring after the time of such decision, or (c) a manifest showing of a failure to consider material facts presented to the Court before such decision.” L.R. 7-18. The Local Rule further states that “[n]o motion for reconsideration shall in any manner repeat any oral or written argument made in support of or in opposition to the original motion.” Id.
B. The Tenth Circuit’s Decision in NCUA/Nomura Is Not a Basis for Reconsideration
Plaintiffs urge the Court to reconsider on the ground that the Tenth Circuit’s decision in NCUA v. Nomura Home Equity Loan — rendered one day after the August 26 Orders — represents a material change of law under Local Rule 7-18(a). (Dkt. No. 87, at 4.) The Court disagrees. The non-binding decision in NCUA/Nomura explicitly did not address the state statutes of repose involved in that case and therefore had no occasion to consider preemption.
Moreover, after reviewing NCUAJNomura, the Court is unconvinced that the question is as clear cut as the Tenth Circuit suggests. The Court still believes, as first articulated in FHFA/Countrywide, that whether the term “statute of limitations” includes periods of repose is ambiguous. This view is underscored by the current landscape of judicial interpretation on the issue. At least two courts have found that the term unambiguously refers only to statutes of limitations. Nat’l Credit Union Admin. Bd. v. Goldman Sachs and Co., No. 11-CV-6521-GW, slip op. at 3-5 (C.D.Cal. July 11, 2013); Nat’l Credit Union Admin. Bd. v. Goldman Sachs and Co., No. 11-CV-6521-GW, slip op. at 1-2 (C.D.Cal. Sept. 4, 2012); Nat’l Credit Union Admin. Bd. v. Goldman Sachs and Co., No. 11-CV-6521-GW, slip op. at 1-2 (C.D.Cal. Mar. 15, 2012); Nat’l Credit Union Admin. Bd. v. RBS Securities, Inc., No. 11-CV-5887-GW, slip op. at 1-2 (C.D.Cal. Jan. 30, 2012); Nat’l Credit Union Admin. Bd. v. RBS Securities, Inc., No. 11-CV-5887-GW, slip op. at 14-16 (C.D.Cal. Dec. 19, 2011); Resolution Trust Corp. v. Olson,
Another factor compounding the ambiguity of this issue bears mentioning: statements in the Congressional Record both prior to and contemporaneous with the enactment of FIRREA suggest that Congress understood the meaning of the term “statute of repose” but nevertheless failed to use it in the extender statute. In two instances, the entire purpose of the proposed legislation hinged on the concept of a repose period. Members of the House and Senate introduced the “Cultural Property Repose Act of 1985,” a bill designed to “free the owners of cultural property and art work from the threat of civil suit by foreign governments.” 131 Cong. Rec. E2249-02 (May 16, 1985),
In 1987, the “Economic Statute of Repose Act” was introduced in the House to, in the words of its sponsor, “address one particular segment of the product liability crisis, the need for a basic statute of limitations, or in this case, a statute of re
Other bills seeking to establish statutes of repose were introduced from 1986 through 1989 to address product liability issues in connection with aviation accidents. A particular point of debate centered on the length of a repose period that terminates liability for defective aircraft. One bill entitled “The General Aviation Tort Reform Act of 1986,” for example, sought to establish a federal cause of action for personal injury and damages stemming from aviation accidents. 132 Cong. Rec. H2275-01 (Apr. 30, 1986),
A number of other product liability bills introduced in the years preceding the enactment of FIRREA sought to establish a fixed point terminating liability. For example, a bill entitled “The Product Liability Reform Act of 1989” attempted to “establish[ ] an outer limit of 25 years, called a statute of repose, where a capital good product-that is, industry machinery-is involved in an accident that results in traumatic injury.” 135 Cong. Rec. E2243-01 (June 21, 1989),
These statements from the Congressional Record suggest that Congress had some understanding of and differentiated between statutes of limitations and repose at the time FIRREA was enacted. Indeed, an electronic search of the Congressional Record from 1985 until the enactment of FIRREA reveals at least forty-four separate uses of the phrase “statute of repose” across twenty-seven different statements by members of Congress.
To summarize, NCUAJNomura does not present “a material difference in fact or law” warranting reconsideration. Moreover, in light of the incongruity amongst federal judges on this issue and the evidence suggesting that Congress understood the term “statute of repose” in 1989, the Court respectfully disagrees with the conclusion drawn by the Tenth Circuit that any “modicum of ambiguity as to whether the Extender Statute covers statutes of repose .... is easily resolved.”
C. Failure to Anticipate the Court’s Decision and Lack of Briefing on the Preemption Issue
Plaintiffs move for reconsideration because they did not expect the Court to dismiss claims on the basis of preemption without the benefit of formal briefing from counsel. (Dkt. No. 87-1, at 4-5.) As a threshold matter, no provision under the Local Rules allows for reconsideration based on lack of briefing or surprise in outcome. Regardless, the Court afforded Plaintiffs ample opportunity to address the preemption issue. Prior to the hearing on the motion to dismiss, the Court instructed the parties by minute order to prepare for and specifically address at the hearing whether “anything in the legislative history of FIRREA might inform the Court’s
D. Reconsideration on the Basis of “Clear Error”
Plaintiffs contend that the Court committed “clear error” by dismissing their state securities claims based on a preemption analysis. (Dkt. No. 87-1, at 13-15.) Much of Plaintiffs’ briefing and all of their arguments at the hearing on the motion for reconsideration focused on the merits of Guaranty Bank.
1. Preemption Is the Proper Framework for Analyzing FIRREA’s Extender Provision
Guaranty Bank considered the threshold question of whether FIRREA’s extender provision, if applied to extend the TSA’s statute of repose, amounts to federal preemption of a state law. Plaintiffs contend that this question is resolved by an exercise in statutory interpretation aimed merely at determining whether the term “statute of limitations” under 12 U.S.C. § 1821(d)(14) encompasses statutes of repose. According to Plaintiffs, preemption is not implicated because the extender provision constitutes a discrete statutory exception limited to the FDIC. However characterized, extending the time limitation on Plaintiffs’ claim would effectively nullify the TSA’s five-year statute of repose. Such a result is impossible without invoking, even if implicitly, the supremacy of FIRREA as federal law. This places
The conclusion that FIRREA’s extender provision implicates federal preemption is supported by longstanding case law. Before Congress passed FIRREA, the FDIC brought Securities Act claims under 28 U.S.C. § 2415, the default statute of limitations for all actions brought by the federal government, unless a specific federal statute of limitations otherwise applied. NCUA/Nomura,
Because Congress modeled FIRREA’s extender provision after 28 U.S.C. § 2415,
As an alternative to preemption, Plaintiffs suggest that the proper template for analysis is the statutory canon disfavoring repeal by implication. (Dkt. No. 87-1, at 16.) The Court disagrees. At issue here is whether FIRREA supplants the TSA’s statute of repose enacted by the Texas legislature. Congress cannot repeal a law it never passed. This and other courts have considered repeal by implication — or, as it is sometimes called, “preemption” — in determining whether Congress intended to effectuate an implied repeal of another federal statute. See, e.g., FHFA/Countrywide,
It is notable that the federalism concerns implicated here go beyond the FDIC’s immediate and future litigation endeavors. Indeed, the National Credit Union Administration (“NCUA”) and the Federal Housing Finance Administration (“FHFA”) have asserted identical extender statutes to displace time limitations of other state securities laws. The NCUA, for example, has asserted 12 U.S.C. § 1787(b)(14), albeit unsuccessfully, to supplant limitation periods in the Kansas Uniform Securities Act and the California Corporations Code.
2. The Presumption Against Preemption Applies In This Case
Plaintiffs next contend that the Court erred by interpreting the extender statute using a presumption against preemption. The Supreme Court has cautioned that “we have never assumed lightly that Congress has derogated state regulation, but instead have addressed claims of pre-emption with the starting presumption that Congress does not intend to supplant state law.” Guaranty Bank,
Plaintiffs do not challenge the states’ historic involvement in these areas; rather, they argue that the presumption against preemption is confined to state regulation of “public health, safety, and morals.” (Dkt. No. 134, at 18) (quoting Ophthalmic Mut. Ins. Co. v. Musser,
3. This Court’s Prior Rulings on Statutes of Repose
Plaintiffs contend that Guaranty Bank is clearly erroneous because it con
In sum, Plaintiffs have failed to meet the high standard for reconsideration required under Local Rule 7-18. They also have not identified any clear error in the August 26 Orders dismissing certain of Plaintiffs’ state claims as time barred. While this may be a lamentable outcome for Plaintiffs, the generous five-year repose periods in Texas and Nevada afforded the FDIC ample time, even years, to file suit after becoming receiver in these cases.
V. FDIC-SSB’s MOTION FOR INTERLOCUTORY APPEAL
FDIC-SSB requests, as an alternative to reconsideration, certification for interlocutory appeal to the Ninth Circuit the Security Savings Bank decision in which the Court held that FIRREA’s extender provision does not preempt the statute of repose in Section 90.570 of the NSA. Section 1292(b) authorizes certification of an order for interlocutory appeal under the following conditions: (1) there must be a “controlling question of law”; (2) there must be “substantial ground for difference of opinion”; and (3) it must appear that “an immediate appeal from the order may materially advance the ultimate termination of the litigation.” 28 U.S.C. § 1292(b). Interlocutory appeals should “be applied sparingly and only in exceptional cases.” In re Cement Antitrust Litig.,
Because all three conditions must be satisfied to warrant interlocutory appeal, the Court focuses on the most problematic one — namely, that “an immediate appeal from the order may materially advance the ultimate termination of the litigation.” 28 U.S.C. § 1292(b). Resolution of a question materially advances the termination of litigation if it “facilitate[s] disposition of the action by getting a final decision on a controlling legal issue sooner, rather than later in order to save the courts and the litigants unnecessary trouble and expense.” United States v. Adam
Nor would'the Ninth Circuit’s resolution of the preemption issue address the remaining Section 11 claims. Where “a substantial amount of litigation remains in this case regardless of the correctness of the Court’s ruling ... arguments that interlocutory appeal would advance the resolution of this litigation are unpersuasive.” Friedman v. 21 Hour Fitness USA, Inc., No. 06-cv-6282,
VI. Conclusion
Plaintiffs have not satisfied any of the conditions for reconsideration under the Local Rules. Moreover, for the reasons set forth above, the Court rejects each argument by Plaintiffs that the August 26 Orders constitute clear error. The Court therefore DENIES Plaintiffs’ motion for reconsideration. Interlocutory review of Security Savings Bank would not “materially advance the ultimate termination of the litigation.” Thus, FDIC-SSB’s motion for interlocutory appeal to the Ninth Circuit is DENIED.
IT IS SO ORDERED.
Notes
. The three orders are as follows: FDIC as Receiver for Guaranty Bank v. Countrywide Sec. Corp. et al.,
. All citations to the docket relate to Guaranty Bank, No. 2:12-cv-08558-MRP (MANx) (C.D.Cal.), unless otherwise stated.
. An electronic search of “statute of repose” combined with closely related phrases such as “statute of limitations and repose” yields at least fifty-seven separate mentions in the Congressional Record across thirty different statements by members of Congress.
. Notably, at the reconsideration hearing on November 12, 2013, Plaintiffs submitted a binder containing twenty-two cases with highlighted passages concerning the merits of the Court’s preemption decision. Counsel for Plaintiffs presented detailed arguments derived from those cases, many of which were known to the Court prior to issuing the August 26 Orders.
. Section 2415 states in relevant part:
§ 2415. Time for commencing actions brought by the United States
(a) [E]xcept as otherwise provided by Congress, every action for money damages brought by the United States or an officer or agency thereof which is founded upon a contract express or implied in law or fact, shall be barred unless the complaint is filed within six years after the right of action accrues....
(2) [E]xcept as otherwise provided by Congress, every action for money damages brought by the United States or an officer or agency thereof which is founded upon a tort shall be barred unless the complaint is filed within three years after the right of action first accrues....
. As the Tenth Circuit noted in NCUA/Nomura, “Early drafts of FIRREA legislation expressly incorporated 'the [limitations] period provided for in section [] 2415.' "
. Indeed, one case cited by Plaintiffs, Nichols, demonstrates the distinction between the kind of preemption at issue here and repeal by implication. The district court in Nichols addressed two issues: (1) whether the Federal Aviation Administration Authorization Act of 1994 ("FAAAA”) preempted a truck and bus regulation adopted by the California legislature; and (2) whether FAAAA constitutes an implied repeal of the federal Clean Air Act ("CAA”). See Ca. Dump Truck Owners Ass’n v. Nichols,
. See FDIC, Professional Liability Lawsuits, available at http://www.fdic.gov/bank/ individual/failed/pls/, which provides the total number of FDIC professional liability suits brought on behalf of failed banks from January 1, 2009 through December 10, 2013. According to the website, the FDIC has authorized an additional 56 lawsuits while 87 residential mortgage malpractice and fraud lawsuits are pending. Id.
. See, e.g., Nat’s Credit Union Admin. Bd. v. Goldman, Sachs & Co., No. 11-cv-6521-GW, slip op. (C.D.Cal. Mar. 15, 2012) (NCUA asserting extender provision to supplant the five-year limitations period under the Kansas Uniform Securities Act); NUCA v. RBS Sec., Inc., No. 11-cv-5887-GW, slip op. (C.D.Cal. Dec. 19, 2011) (NCUA asserting extender provision to preempt Section 25506(b) of the California Corporations Code).
. See, e.g., FHFA v. Countrywide Fin. Corp.,
. In Franklin Bank, Defendants’ motion to dismiss mentioned preemption only in passing. FDIC-Franklin did not oppose that motion, but instead filed an amended complaint. The issue was neither raised nor argued thereafter.
. In Guaranty Bank, the FDIC had between approximately one to two years, depending on the certificate, from the date of receivership to file suit before the TSA's statute of repose foreclosed the right to sue. Likewise, in Franklin Bank and Security Savings Bank, the FDIC had between approximately two to four years, depending on the certificate, to file suit after becoming receiver.