NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS FILED

FOR THE NINTH CIRCUIT MAR 27 2014

MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS

HELEN GALOPE, an individual, No. 12-56892

Plaintiff - Appellant, D.C. No. 8:12-cv-00323-CJC-

RNB

v.

DEUTSCHE BANK NATIONAL TRUST MEMORANDUM*

COMPANY, as Trustee under Pooling and Servicing Agreement dated as of May 1, 2007 Securitized Asset Backed Receivables LLC Trust 2007-BR4; et al.,

Defendants - Appellees.

Appeal from the United States District Court for the Central District of California Cormac J. Carney, District Judge, Presiding

Argued and Submitted February 11, 2014 Pasadena, California

Before: D.W. NELSON, PAEZ, and NGUYEN, Circuit Judges.

Helen Galope appeals the district court’s grant of summary judgment in

favor of Deutsche Bank National Trust Company (“DBNTC”), Ocwen Loan

* This disposition is not appropriate for publication and is not precedent except as provided by 9th Cir. R. 36-3. Servicing, and Western Progressive, LLC (“WPT”) (collectively, “DBNTC

Defendants”) and dismissal of her claims against Barclays Bank PLC and Barclays

Capital Real Estate Inc. d/b/a HomEq Servicing (collectively, “Barclays

Defendants”). We affirm in part, reverse in part, and remand for further

proceedings.

1. We reverse the district court’s ruling that Galope failed to establish injury-

in-fact necessary for Article III standing on her LIBOR-based claims. Galope

adequately alleged that she would not have purchased her loan had she known that

the Defendants were manipulating the LIBOR rate. Article III standing exists

when a plaintiff purchases a product she would not have otherwise purchased but

for the alleged misconduct of the defendant. Hinojos v. Kohl's Corp., 718 F.3d

1098, 1104 n.3 (9th Cir. 2013) (citing Mazza v. Am. Honda Motor Co., 666 F.3d

581, 595 (9th Cir. 2012)); Maya v. Centex Corp., 658 F.3d 1060, 1069 (9th Cir.

2011). Contrary to the dissent’s assertion, Galope’s standing does not turn on

whether she actually made interest payments that were adjusted in response to the

allegedly manipulated LIBOR rate. Galope’s cognizable injury occurred when she

2 purchased the loan, not upon payment of LIBOR-affected interest.1 Maya, 658

F.3d at 1069.

We therefore reverse and remand for further proceedings on Galope’s

LIBOR claims against the Barclays Defendants under the Sherman Antitrust Act,

15 U.S.C. §§ 1–2, and her state law claims for breach of the covenant of good faith

and fair dealing, and fraud. However, we conclude that the district court properly

granted summary judgment on all LIBOR-based claims against the DBNTC

Defendants because Galope failed to present any evidence that DBNTC was

involved in, or conspired in, the alleged LIBOR manipulation.

2. We reverse the district court’s ruling that Galope lacks statutory standing to

pursue her LIBOR-based Unfair Competition Law (“UCL”), Cal. Bus. & Prof.

Code § 17200, and False Advertising Law (“FAL”), Cal. Bus. & Prof. Code §

17500, claims against the Barclays Defendants and remand for further proceedings.

Galope has statutory standing to pursue these claims because she alleged that she

1 At oral argument, the Barclays Defendants argued for the first time that Galope’s LIBOR-based claims were not traceable to their misconduct because they did not actually sell the loan to Galope. Galope, however, adequately alleged in her complaint that Barclays PLC simply contracted with another entity to sell the LIBOR-based loan product that is the subject of this litigation. At the motion-to- dismiss stage, Galope’s allegations are sufficient to satisfy the traceability requirement of Article III standing. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992).

3 purchased a loan that she would not have otherwise purchased but for the Barclays

Defendants’ alleged misconduct. See Kwikset Corp. v. Superior Court, 246 P.3d

877, 890 (Cal. 2011); Cal. Bus. & Prof. Code §§ 17204, 17535.

3. We affirm the district court’s rulings on all claims associated with the

“missing-fax-page scheme.” Galope stated in her Third Amended Complaint

(“TAC”) that the portions of the fax transmission that she received put her on

notice that her payments would increase. This admission directly undermines her

allegations that the Barclays Defendants and DBNTC deceived her into believing

that the initial payment amounts were fixed throughout the term of the loan.

4. We reverse the district court’s rulings that Galope’s wrongful foreclosure2

and UCL claims based on the DBNTC Defendants’ violation of the bankruptcy

court’s automatic stay are not justiciable. Although rescission of the sale—almost

seven months after the violation—mooted Galope’s claims for injunctive and

declaratory relief, it did not affect her claim for damages. See Wilson v. State of

Nev., 666 F.2d 378, 380-81 (9th Cir. 1982). Further, regardless of whether Galope

2 Although Galope’s seventh claim in her TAC is styled as a “wrongful foreclosure” claim, the content of the claim is exclusively focused on violation of the automatic stay under 11 U.S.C. § 362. The panel thus construes this as a claim for damages under 11 U.S.C. § 362(k)(1).

4 has equity in the home, 11 U.S.C. § 362(k)(1) provides a statutory basis for

damages.3

5. We reverse the district court’s grant of summary judgment on Galope’s

claim for breach of the covenant of good faith and fair dealing associated with

violation of the automatic stay. The covenant of good faith and fair dealing “finds

particular application in situations where one party is invested with a discretionary

power affecting the rights of another.” Hicks v. E.T. Legg & Associates, 108 Cal.

Rptr. 2d 10, 19 (Ct. App. 2001). Discretionary power of this kind “must be

exercised in good faith.” Carma Developers (Cal.), Inc. v. Marathon Dev.

California, Inc., 826 P.2d 710, 726 (Cal. 1992). The power of sale in the deed of

trust provided the DBNTC Defendants with discretionary authority to foreclose

upon Galope’s home in the event of default. Contrary to the DBNTC Defendants’

argument, there is sufficient evidence in the record to support a reasonable

inference that the DBNTC Defendants had notice of the automatic stay when they

3 The DBNTC Defendants’ alternative argument that Galope released her right to pursue her UCL claim when she signed her loan modification agreement fails, in part, because the release only purports to apply to “claims, damages or liabilities . . . existing on the date of this Agreement . . . .” The loan modification agreement is dated April 17, 2008. The alleged violation of the automatic stay did not occur until September 1, 2011.

5 executed the trustee’s sale, and that they refused to rescind it upon Galope’s

request.

6. Galope argues on appeal that the district court erred because it did not

provide her with leave to amend her complaint. On remand, Galope may seek

further leave to amend at the district court’s discretion. However, leave to amend

is foreclosed on all claims associated with the alleged missing-fax-page scheme.

No additional allegations will change the fact that the portion of the document

Galope received and signed provided her with notice that her payments were

subject to change after five years and would increase. See Bonin v. Calderon, 59

F.3d 815, 845 (9th Cir. 1995) (“Futility of amendment can, by itself, justify the

denial of a motion for leave to amend.”).

7. The parties shall bear their own costs on appeal.

REVERSED, IN PART, AFFIRMED, IN PART, AND REMANDED.

6

FILED

Galope v. Deutsche Bank, 12-56892 MAR 27 2014

MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS

NGUYEN, Circuit Judge, dissenting in part:

Because I conclude that Galope failed to establish standing on her

LIBOR-based claims, I respectfully dissent from the majority’s decision reversing

these claims as to the Barclays Defendants. Galope does not allege that she

suffered any loss due to the Barclays Defendants’ purported deceptive conduct, nor

does she allege that any loss is traceable to a misrepresentation related to the

LIBOR-rate manipulation or to the LIBOR-rate manipulation itself. See, e.g.,

Hinojos v. Kohl’s Corp., 718 F.3d 1098, 1104 (9th Cir. 2013) (concluding that the

plaintiff adequately had alleged standing where, “because of the misrepresentation

the consumer (allegedly) was made to part with more money than he or she

otherwise would have been willing to expend” (quoting Kwikset Corp. v. Superior

Court, 120 Cal. Rptr. 3d 741, 757 (2011))); Mazza v. Am. Honda Motor Co., 666

F.3d 581, 594 (9th Cir. 2012) (“To the extent that class members were relieved of

their money by Honda’s deceptive conduct—as Plaintiffs allege—they have

suffered an ‘injury in fact’” under Article III (citing Stearns v. Ticketmaster Corp.,

655 F.3d 1013, 1021 (9th Cir. 2011))); Maya v. Centex Corp., 658 F.3d 1060, 1070

(9th Cir. 2011) (“To survive a motion to dismiss for lack of constitutional standing,

plaintiffs must establish a ‘line of causation’ between defendants’ action and their

alleged harm that is more than ‘attenuated.’” (citing Allen v. Wright, 468 U.S. 737,

1 757 (1984))). Indeed, as the majority concedes, Galope’s payments never were

affected—she paid a fixed interest rate and defaulted before the allegedly

manipulated LIBOR rate went into effect on her loan; she then was granted a loan

modification with a (lower) fixed interest rate that likewise was unrelated to the

LIBOR rate and defaulted again. Although Galope alleges that she would not have

purchased the loan but for the Barclays Defendants’ alleged manipulation of the

LIBOR rate, Galope alleges no loss from the alleged manipulation—or any related

misrepresentation or omission. Therefore, Galope’s alleged injury is far too

attenuated to establish Article III standing.1

1 For the same reasons, Galope lacks statutory and antitrust standing. See, e.g., Rebel Oil Co. v. ARCO, 51 F.3d 1421, 1433 (9th Cir. 1995) (“To show antitrust injury, a plaintiff must prove that his loss flows from an anticompetitive aspect or effect of the defendant’s behavior, since it is inimical to the antitrust laws to award damages for losses stemming from acts that do not hurt competition.” (citation omitted)). The interest rates on Galope’s loan were unaffected by the Barclays Defendants’ anticompetitive behavior.

2