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Hvizdak v. Citizens Bank of Pennsylvania

United States District Court, W.D. Pennsylvania

July 14, 2015

RICHARD C. HVIZDAK, Plaintiff,
v.
CITIZENS BANK OF PENNSYLVANIA, RBS CITIZENS, NA, CITIZENS FINANCIAL GROUP, NAS, ROYAL BANK OF SCOTLAND, SENIOR
v.
P. KAREN D. BUDNIAK, Defendants.

OPINION and ORDER

MAURICE B. COHILL, Senior District Judge.

On June 19, 2015, we entered a Memorandum Order adopting the Magistrate Judge's Report and Recommendation, granted Defendant's Motion to Dismiss, and dismissed Plaintiffs Complaint with Prejudice. ECF No. 72. Presently pending before the Court is Plaintiff Richard C. Hvizdak's Motion to Alter or Amend Judgment [Pursuant to] Rule 59, F.R.Civ.P. (ECF No. 73), and his supporting material filed as Notice of New U.S. Supreme Court Authority (ECF No. 74), and a Memorandum in Favor of Rule 59(e) Motion for Relief (ECF No. 75). Defendants' have filed a Response opposing Plaintiffs Motion. ECF No. 76. Finally, Mr. Hvizdak has filed a Motion to Schedule Oral Argument on the issues he raises. ECF No. 77.

Mr. Hvizdak requests that we deny and dismiss the Report and Recommendation, and instead allow him to amend his Complaint, and/or supplement his Objections with exhibits, or remand the case to the Court of Common Pleas of Allegheny County. Because we agree that remand is required, we will grant Mr. Hvizdak's motion in part and remand this case.

Mr. Hvizdak's motion is, in essence, a motion that we reconsider our Memorandum Order. The purpose of a motion for reconsideration is to "correct manifest errors of law or fact or to present newly discovered evidence." Max's Seafood Cafe ex rel. Lou-Ann, Inc. v. Quinteros, 176 F.3d 669, 677 (3d Cir.1999). In order to be entitled to relief under Rule 59(e), the "party seeking reconsideration must establish at least one of the following grounds: (1) an intervening change in controlling law; (2) the availability of new evidence that was not available when the court granted the motion...; or (3) the need to correct a clear error of law or fact or to prevent manifest injustice." Id.

I. As to an intervening change in controlling law, Mr. Hvizdak points to Arizona State Legislature v Arizona Independent Redistricting Commission, ___ U.S. ___, ___ S.Ct. ___, 2015 WL 2473452 (2015), a Supreme Court case decided June 29, 2015 in which the Supreme Court found that the Plaintiff, Arizona State Legislature, did have standing. Mr. Hvizdak argues that the Arizona State Legislature's injury "was held to be concrete and particularized' as are your Plaintiffs personal injuries [] in this case. The injuries are actual and imminent'; they qualify as invasions(s) of a legally protected interest' which are fairly traceable to the challenged action' and further, redressable by a favorable ruling."' Notice of New U.S. Supreme Court Authority 1-2. He then briefly argues as to how he personally has suffered an injury traceable to Defendants' actions. Id . 2. Mr. Hvizdak's argument is merely a recitation of the established legal requirements for standing. There is nothing in the Supreme Court's decision concerning standing that would constitute an intervening change in the law of standing affecting the outcome of the instant case.

Our consideration of whether Plaintiff had proper standing considered the same factors set forth by the Supreme Court. Mr. Hvizdak's lack of standing arises from the fact that he is suing in his personal capacity on behalf of his corporations and setting forth claims that "because his companies' original loan, forbearance agreement and amendment to the forbearance agreement include provisions that the interest rate paid was based on Libor, Defendants have acted fraudulently and in violation of RICO because of the Libor interest rate manipulation scheme." Report and Recommendation, ECF No. 67, at 4. As stated in the Report and Recommendation, adopted as our Opinion,

[Plaintiff] does not allege that he has been directly injured in any way due to the Libor manipulation scheme or (reading the complaint broadly) Defendant's debt collection practices. Rather, the losses suffered by Plaintiff, if any, due to the Libor manipulation or debt collection, are merely a consequence of the losses, if any, suffered by HHDR and RCH Pittsburgh as the loan borrowers.

Id. at 8.

We understand that Mr. Hvizdak continues to assert that he personally was injured as a result of the harm suffered by his corporations, but we have determined that these injuries are wholly derivative to the alleged harm suffered by his corporations. Even when a party plausibly claims that it was negatively affected by certain alleged events it still lacks standing to bring suit for relief if the claims are based on a third party's legal rights and interests. See Chiyoda Gravure, Co., Ltd. v. Chiyoda Am., Inc., 2006 WL 2524231, *3 (M.D. Pa. Aug. 29, 2006) (plaintiff-subsidiary of plaintiff-parent corporation lacks standing to assert claims on behalf of parent corporation). Accordingly, we concluded that Mr. Hvizdak lacks standing to assert an action as an individual against third parties for damages that result directly from injuries to the corporation.

II.

Mr. Hvizdak has not presented new evidence that was not available when we granted the motion to dismiss. The argument he offers in his Notice of New U.S. Supreme Court Authority as to how he was personally injured due to CHECKSYSTEMS is the same argument presented to this Court in Mr. Hvizdak's Motion to Further Supplement with Exhibits the Objections to the Report and Recommendation (ECF No. 71), which we granted and considered.

III.

Mr. Hvizdak's primary argument concerns a need to correct a clear error of law; specifically, that we erred in not remanding the case to state court. Our decision to dismiss this case turned on the fact that we concluded that Mr. Hvizdak lacks standing to assert his claims on behalf of his corporations. There are no claims in Mr. Hvizdak's complaint asserted on his behalf as an individual that are not derivative of claims asserted on behalf of his corporations, and so the question of standing is resolved against Plaintiff. The question we must address now is, given our conclusion that Plaintiff lacked standing, did we err in not remanding this case to state court. We now conclude that we did err and that this case should have been remanded.

Section 1447(c) of Title 28 of United States Code provides: "If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded." 28 U.S.C. § 1447(c). This raises the question of whether a decision that a party lacks Article III standing is equivalent to a determination that the court lacks subject matter jurisdiction. The United States Court of Appeals for the Tenth Circuit considered this question when it had to determine whether it had jurisdiction over an appeal of a remand order in which the District Court determined that there was no standing and remanded pursuant to 28 U.S.C. § 1447(c) for lack of subject matter jurisdiction. Hill v. Vanderbilt Capital Advisors, LLC, 702 F.3d 1220 (10th Cir. 2012). The Circuit Court had to consider its own jurisdiction because Section 1447(d) ...


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