and Bergkamp -- which had developed prior to 1990, it is hard to credit the supposition that the Congress which in 1990 left section 10 untouched but added an adjacent requirement enforceable by the Secretary contemplated that section 10 established a judicially cognizable cause of action.
In sum, the case for reading section 10 as the source of an implied cause of action comes down to this: Writing in 1980, the Vega court was the first court to address the question whether section 10 is a proper vehicle for a federal lawsuit, and it answered that question in the affirmative. Fifteen years later, the Sixth Circuit is still apparently the only court which has, in a reported opinion, detected in section 10 a judicially cognizable cause of action.
The best that can be said for the Vega result is Judge Posner's verdict in his Allison dissent -- namely, that "Congress, had it thought about the matter, would have wanted suits for restitution of money withheld in violation of section 10 to be maintainable in federal courts." Allison, 685 F.2d at 1093. What Congress would likely have done "had it thought about the matter" might well have satisfied the Cort v. Ash standard. But, as Litton makes clear, it does not satisfy the intent standard authoritatively established by later cases: The controlling case law is reflected in Touche Ross & Co. v. Redington, 442 U.S. 560, 575, 61 L. Ed. 2d 82, 99 S. Ct. 2479 (1979), Transamerica Mortgage Advisors, Inc. v. Lewis, 444 U.S. 11, 15-16, 24, 62 L. Ed. 2d 146, 100 S. Ct. 242 (1979), and Virginia Bankshares, Inc. v. Sandberg, 501 U.S. 1083, 1102, 115 L. Ed. 2d 929, 111 S. Ct. 2749 (1991). See Reschini v. First Federal Savings & Loan, 46 F.3d 246, 255 (3d Cir. 1994). As the Third Circuit has recently put the matter: "Where a statute does not explicitly create a right of action for a particular party, a court may find such a right implied only where it can confidently conclude Congress so intended." New Jersey Department of Environmental Protection & Energy v. Long Island Power Authority, 30 F.3d 403, 421 (3d Cir. 1994). With respect to section 10 of RESPA, one certainly cannot confidently conclude that Congress did so intend. Indeed, one can confidently conclude that Congress did not so intend -- or, to put it more precisely, that Congress has at no time evidenced any objective manifestation of so intending.
For the reasons just given, I am persuaded that plaintiff Herrmann's first cause of action fails to state a claim on which relief can be granted by a federal court. Given the insufficiency of the first cause of action, I am likewise persuaded, for reasons canvassed in footnote 7, supra, that plaintiff's third and fourth causes of action -- relied on by defendant, but not by plaintiff, as stating judicially cognizable federal claims -- also fail to state claims on which relief can be granted by a federal court. Since plaintiff's second and fifth causes of action are not characterized by either party as claims arising under federal law, I conclude that no aspect of plaintiff's amended complaint presents a tenable ground for suit in a federal court.
Can my conclusion that the complaint fails to state a claim cognizable in this court entail any operative consequences, given that the defendant has not filed a Rule 12(b)(6) motion to dismiss? That is to say, does a district court have authority to dismiss a complaint on its own initiative where no motion to dismiss has been filed? The Supreme Court has, thus far, declined to answer this question: "We have no occasion to pass judgment . . . on the permissible scope, if any, of sua sponte dismissals under Rule 12(b)(6)." Neitzke v. Williams, 490 U.S. 319, 329 n. 8, 104 L. Ed. 2d 338, 109 S. Ct. 1827 (1989). But the treatise-writers, and also the inferior courts, seem to be in substantial agreement that such authority exists: "Even if a party does not make a formal motion, the court on its own initiative may note the inadequacy of the complaint and dismiss it for failure to state a claim as long as the procedure employed is fair." 5A Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1357 at 301 (2d ed. 1990). "Dismissals under Rule 12(b)(6) are generally made upon the motion of the defendant, although the court may order dismissal on its own motion if process has been issued and served and plaintiff is given notice and an opportunity to respond." 2A James Wm. Moore, Moore's Federal Practice P 12,07[2-5] at 12-99 (2d ed. 1995)
In this instance, as noted above, I invited the parties to provide guidance on the viability of plaintiff's amended complaint. The parties' submissions -- both of which included balanced explications of section 10 and of the relevant case law -- were helpful: They strengthened my doubts that plaintiff had presented cognizable federal claims.
Since it is apparent that I have authority, mea sponte, to dismiss a complaint which, I am convinced, fails to state a viable claim, the remaining question is whether dismissal is a prudent exercise of the court's discretion. An argument can be made -- indeed, the argument is made by the parties -- that, given the strong public interest in the settlement of cases, this court should, as Judge Robreno did in Lake, regard the vulnerability of plaintiff's case as an ingredient to be factored into the settlement calculus, not as a ground for dismissal. Cf. Air Line Stewards v. Trans World Airlines, 630 F.2d 1164 (7th Cir. 1980). I would find the argument persuasive if I merely felt, as Judge Robreno did, that I would "probably" dismiss if confronted with a 12(b)(6) motion. But, given the accretion of section 10 case law -- all of it adverse to plaintiff's position -- since Judge Robreno decided Lake, what was only probable for Judge Robreno seems to me certain. I have no doubt that the Supreme Court, if it elected to address the question whether section 10 has by implication created a cause of action, would decide in the negative. And I have no doubt that if the Third Circuit is called on to address the issue before the Supreme Court has occasion to do so, the decision of that court would be in the negative. Under those circumstances, I think it would not be an appropriate exercise of my discretion to continue to devote the work-time of an Article III court to the supervision of a dispute that Congress has elected not to judicialize. The fact that such further supervision might expectably turn out to be non-onerous -- in the sense that there is a fair likelihood that it would lead to approval of arrangements the parties have agreed to
-- does not alter my view of the matter. Whether I were to approve or disapprove the proposed settlement, it would only be by devoting Article III time to matters which Congress has not seen fit to ask the federal courts to handle. And, if I were to approve the proposed settlement, I would, pursuant to the terms of the Settlement Agreement, "be expected to exercise continuing jurisdiction over the enforcement of the Settlement Agreement." Settlement Agreement and Release, P 43. It could be fairly argued that an Article III judge lacks authority to volunteer the court's resources in a case which, the judge is convinced, should not be on the docket: That is to say, it may well be that an Article III judge is not authorized to furnish the trappings of Article III processes to matters Congress has put in other hands or left for private resolution.
In any event, assuming arguendo that I have authority to volunteer, I am persuaded that to do so would not be an appropriate exercise of discretion.
Accordingly, in an accompanying order I will direct that plaintiff's motion for preliminary approval of the Settlement Agreement be denied and that the amended complaint be dismissed.
For the reasons given in the accompanying opinion, it is hereby ORDERED:
1. Plaintiff's motion for preliminary approval of the Settlement Agreement is DENIED;
2. Plaintiff's amended complaint is DISMISSED.
Louis H. Pollak, J.
September 12, 1995