Columbian Financial Corporation et al v. Stork et al, No. 2:2014cv02168 - Document 30 (D. Kan. 2014)

Court Description: MEMORANDUM AND ORDER granting 14 Motion to Dismiss. Signed by U.S. District Senior Judge Sam A. Crow on 11/18/14. (msb)

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Columbian Financial Corporation et al v. Stork et al Doc. 30 I N THE UNI TED STATES DI STRI CT COURT FOR THE DI STRI CT OF KANSAS COLUMBI AN FI NANCI AL CORPORATI ON, THE COLUMBI AN BANK & TRUST CO., Plaint iffs, vs. Case No. 14- 2168- SAC JUDI M. STORK, DERYL K. SCHUSTER, OFFI CE OF THE STATE BANK COMMI SSI ONER OF KANSAS, EDWI N G. SPLI CHAL, and J. THOMAS THULL, Defendant s. MEMORANDUM AND ORDER This 42 USC § 1983 case alleging due process violat ions com es before t he Court on Defendant s’ m ot ion t o dism iss. I . M ot ion t o D ism iss St a n da r d Defendant s m ove t o dism iss pursuant t o Fed. R. Civ. P. 12( b) ( 1) and 12( b) ( 6) . Defendant s cont end t he com plaint is j urisdict ionally deficient . Rule 12( b) ( 1) of t he Federal Rules of Civil Procedure aut horizes a court t o dism iss a claim for lack of subj ect m at t er j urisdict ion. Federal court s are court s of lim it ed j urisdict ion, so m ay exercise j urisdict ion only when specifically aut horized t o do so. Cast aneda v. I .N.S., 23 F.3d 1576, 1580 ( 10t h Cir. Dockets.Justia.com 1994) . Upon a defendant 's Rule 12( b) ( 1) m ot ion t o dism iss, t he plaint iff bears t he burden of proving j urisdict ion. Defendant s also allege fact ual insufficiency. Under Rule 12( b) ( 6) , t he Court assesses whet her t he plaint iff's com plaint alone is legally sufficient t o st at e a claim for w hich relief m ay be grant ed. Miller v. Glanz, 948 F.2d 1562, 1565 ( 10t h Cir. 1991) . The Suprem e Court recent ly clarified t he requirem ent of facial plausibilit y: To survive a m ot ion t o dism iss, a com plaint m ust cont ain sufficient fact ual m at t er, accept ed as t rue, t o “ st at e a claim for relief t hat is plausible on it s face.” I d. [ Bell At l. Corp. v. Twom bly, 550 U.S. 544, 570, 127 S.Ct . 1955, 167 L.Ed.2d 929 ( 2007) ] at 570. A claim has facial plausibilit y when t he plaint iff pleads fact ual cont ent t hat allows t he court t o draw t he reasonable inference t hat t he Defendant is liable for t he m isconduct alleged. I d. at 556 [ 127 S.Ct . 1955] . The plausibilit y st andard is not akin t o a “ probabilit y requirem ent ,” but it asks for m ore t han a sheer possibilit y t hat a Defendant has act ed unlawfully. I d. Where a com plaint pleads fact s t hat are “ m erely consist ent wit h” a Defendant 's liabilit y, it “ st ops short of t he line bet ween possibilit y and plausibilit y of ‘ent it lem ent t o relief.’ ” I d. at 557 [ 127 S.Ct . 1955] . Ashcroft v. I qbal, 556 U.S. 662, 129 S.Ct . 1937, 1949, 173 L.Ed.2d 868 ( 2009) . “ Threadbare recit als of t he elem ent s of a cause of act ion, support ed by m ere conclusory st at em ent s, do not suffice.” I d. “ [ C] ourt s should look t o t he specific allegat ions in t he com plaint t o det erm ine whet her t hey plausibly support a legal claim for relief.” Alvarado v. KOB–TV, L.L.C., 493 F.3d 1210, 1215 n. 2 ( 10t h Cir. 2007) . 2 I I . Un con t e st e d Fa ct s The fact s are uncont est ed. Plaint iff Colum bian Financial Corporat ion ( “ CFC” ) is a Kansas for- profit corporat ion and was t he sole shareholder of Colum bian Bank and Trust Com pany. Plaint iff The Colum bian Bank and Trust Com pany ( “ Bank” ) was a st at e- chart ered bank wit h it s prim ary business locat ion at 701 Kansas Avenue, Topeka, Kansas. I t was organized under t he laws of Kansas, was based in Topeka, and operat ed t hrough nine branch offices in Kansas and Missouri. Defendant Judi St ork is t he Deput y Bank Com m issioner of Kansas and is sued in her official capacit y as well as in her individual capacit y. Ms. St ork served as Act ing Bank Com m issioner from June 19, 2010, t o January 6, 2011, and from Novem ber 2, 2013, t o March 18, 2014. When not serving as Act ing Bank Com m issioner, she served as Deput y Bank Com m issioner at all t im es relevant t o t his lawsuit . Defendant Deryl K. Schust er is t he current St at e Bank Com m issioner of Kansas and is sued in his official capacit y in t hat posit ion. He served as Act ing Bank Com m issioner from March 19, 2014 t o April 6, 2014 t hen as Bank Com m issioner from April 6, 2014 t o t he present . Defendant Edwin G. Splichal served as Bank Com m issioner from January 7, 2011, t o Novem ber 1, 2013, and is sued in his individual capacit y. Defendant J. Thom as Thull served as Bank Com m issioner from March 1, 2007, t o June 18, 2010, and is sued in his individual capacit y. 3 Defendant Kansas Office of t he St at e Bank Com m issioner ( “ OSBC” ) is a selffunded regulat ory agency. As a st at e- chart ered bank wit h federally- insured deposit s, t he Bank was subj ect t o supervision by bot h t he OSBC and t he Federal Deposit I nsurance Corporat ion ( “ FDI C” ) . I n January of 2008, an FDI C exam iner conduct ed an on- sit e evaluat ion of t he Bank. On April 30, 2008, t he FDI C issued it s Report of Exam inat ion, which downgraded t he Bank from it s previous rat ings in all six of t he relevant com ponent s. On July 15, 2008, t he Bank st ipulat ed and consent ed t o t he issuance of a cease and desist order wit h t he OSBC and FDI C. Dk.15- 2 pp. 3- 31. On August 22, 2008, Com m issioner Thull, act ing in his official capacit y, issued a Declarat ion of I nsolvency and Tender of Receivership ( t he “ Declarat ion” ) finding t he Bank insolvent . The Declarat ion m ade no reference t o t he cease and desist order, but st at ed t hat Com m issioner Thull was im m ediat ely t aking charge of t he Bank and all of it s propert ies and asset s on behalf of t he St at e of Kansas pursuant t o K.S.A. § 9- 1903, § 9- 1905, and § 77- 536. The lat t er st at ut e perm it s a st at e agency t o use em ergency proceedings in a sit uat ion involving an im m ediat e danger t o t he public healt h, safet y or welfare requiring im m ediat e st at e agency act ion. K.S.A. § 77- 536. K.S.A. § 9- 1903 allows a Com m issioner t aking charge of a bank t o appoint a special deput y t o m anage t he affairs of t he bank “ for such period 4 of t im e as deem ed reasonable and necessary by t he com m issioner before ret urning charge of t he bank . . . t o t he board of direct ors.” K.S.A. § 9- 1905 requires a Com m issioner t aking charge of a bank t o “ ascert ain it s act ual condit ion as soon as possible by m aking a t horough invest igat ion int o it s affairs and condit ion,” and provides t hat “ if t he com m issioner shall be sat isfied t hat such bank . . . cannot sufficient ly recapit alize, resum e business or liquidat e it s indebt edness . . . t he com m issioner fort hwit h shall appoint a receiver.” The Declarat ion st at ed t hat Mr. Thull was sat isfied t hat t he Bank could not resum e business and appoint ed t he FDI C as t he Bank’s receiver. The FDI C sold a subst ant ial port ion of t he Bank’s asset s in a prearranged sale t he sam e day as t he seizure. The Declarat ion not ified t he Bank t hat it could pet it ion for j udicial review of t he OSBC’s act ions pursuant t o t he Kansas Judicial Review Act ( KJRA) , K.S.A. § 77- 601 et seq. The Bank and CFC t im ely filed a pet it ion for review in t he Dist rict Court of Shawnee Count y, Kansas on Sept em ber 22, 2008. I n response, t he OSBC argued t he Bank was not ent it led t o review because no rem edy could be had against t he OSBC or t he Com m issioner. The dist rict court apparent ly did not agree, as it reached t he m erit s of Plaint iffs’ due process claim , st at ing: “ I t seem s clear t hat bank seizures, given t heir exigency, have long been excused from any not ice or pre- hearing seizure requirem ent ( Fahey v. Mallonee, 332 U.S. 245, 91 L.Ed.2030 ( 1947) ) . However, such is not necessarily t he case post - seizure. Som e subst ant ive post deprivat ion review is required in order t o const it ut ionally ground t he 5 decision. Mat hews v. Eldridge, 424 U.S. 319, 47 L.Ed.2d 18 ( 1976) . A bank seizure is not except ed.” Colum bian Bank and Trust Co. v. Splichal, 329 P.3d 557, 2014 WL 3732013, p. 9 ( Kan. App. 2014) ( quot ing t he dist rict court decision) . On March 29, 2010, t he Shawnee Count y Dist rict Court rem anded t he m at t er t o t he Com m issioner t o conduct post - deprivat ion proceedings under K.S.A. § 77– 536. On rem and, t he OSBC init iat ed adm inist rat ive proceedings t o which bot h t he Bank and CFC were part ies. Bot h part ies st at ed uncont est ed fact s and filed m ot ions for sum m ary j udgm ent . On April 18, 2012, t henCom m issioner Splichal issued a decision in favor of t he St at e Bank Com m issioner on t he part ies’ cross- m ot ions for sum m ary j udgm ent . 1 That decision specifically st at ed t hat t he Bank and CFC had t he right t o pet it ion for j udicial review. The Bank and CFC filed t wo such pet it ions. The OSBC responded by filing m ot ions t o dism iss, arguing t he Bank and CFC were not ent it led t o j udicial review because no rem edy was available. The Shawnee Count y Dist rict Court agreed so dism issed t he pet it ions as m oot on January 30, 2013. 2 1 The part ies do not fully inform t his Court of t he event s t hat t ranspired bet ween t he dat e t he dist rict court rem anded t he case and t he dat e Com m issioner Splichal decided t he sum m ary j udgm ent m ot ions. 2 The KCOA st at es t he dist rict court dism issed t he pet it ions as m oot , and t his Court accept s t hat fact ual finding. The record before t his Court , however, does not cont ain copies of t he dist rict court ’s decisions or copies of t he part ies’ briefs filed in t he dist rict court , or any 6 Bot h part ies appealed t hat decision t o t he Kansas Court of Appeals ( KCOA) , which affirm ed aft er consolidat ing t he j udicial review act ions. The KCOA found t hat bot h CFC and t he Bank had st anding, t hat t he FDI C as receiver did not need t o be a part y, and t hat t he issues were not m oot . But it affirm ed t he denial of relief because t he Bank and CFC had not m et t heir burden of proving t he invalidit y of t he Com m issioner's act ion under t he KJRA. Colum bian Bank and Trust Co. v. Splichal, 2014 WL 3732013, 1 ( 2014) . The KCOA not ed t hat t he j udicial review act ion did not seek t o recover asset s of an est at e but sought a declarat ory j udgm ent on t he Com m issioner's aut horit y t o close a bank, seize it s asset s, and appoint a receiver. The KCOA addressed t he due process issue, finding t hat banks and owners of a FSLI C- insured savings and loan associat ion have a const it ut ional right t o be free from unlawful deprivat ions of t heir propert y, but t hat no predeprivat ion hearing was necessary. I t held t hat CFC and t he Bank had received sufficient not ice and opport unit y t o be heard post - deprivat ion by t he Com m issioner’s review under t he KAPA and t he court ’s review under t he KJRA. I d., 2014 WL 3732013, at 9. The KCOA furt her found t hat t he Com m issioner did not need t o post pone it s act ion t o prot ect t he public unt il aft er t he bank was act ually unable t o m eet a cust om er’s dem and for wit hdrawal of funds. I nst ead, t he docum ent s from t he adm inist rat ive process before t he OSBC. Thus t he adm inist rat ive proceedings and t he dist rict court ’s j udicial review t hereof are not included in t he record. 7 st at ut e perm it s t he Com m issioner t o reasonably consider fut ure dem ands t hat will be m ade on a bank in order t o prevent im m inent harm t o deposit ors and t o t he public. The KCOA found subst ant ial evidence in support of t he Com m issioner’s conclusion t hat t he Bank was insolvent . I d. I n sum , t he Com m issioner was aut horized t o declare t he Bank insolvent under K.S.A. 9– 1902( 2) , t o t ake charge of t he Bank and all of it s asset s under K.S.A. 9– 1903, and t o appoint a receiver under K.S.A. 9–1905. I d, at 11. Plaint iffs filed a pet it ion wit h t he Kansas Suprem e Court for review of t he KCOA’s decision, and it is pending. Plaint iffs t hen filed t his separat e act ion, alleging procedural and subst ant ive due process violat ions based on t he seizure it self, t he lack of a pre- deprivat ion hearing, and t he lack of a t im ely and m eaningful post deprivat ion hearing. Plaint iffs seek dam ages, punit ive dam ages, cost s, fees, rescission of t he Declarat ion of I nsolvency and Tender of Receivership, a declarat ory j udgm ent t hat t he Declarat ion of I nsolvency and Tender of Receivership is invalid, an inj unct ion requiring t he Defendant s “ t o com ply wit h st at e and federal law,” and a const ruct ive t rust . I I I . You n ge r Abst e n t ion The part ies raise m ult iple issues regarding Defendant s’ im m unit y, Plaint iffs’ abilit y t o bring suit under § 1983, Defendant s’ abilit y t o be sued under t hat st at ut e, and t he Court ’s exercise of it s Declarat ory Judgm ent 8 discret ion. But first , t he Court exam ines it s power t o hear t he case, given t he parallel st at e court proceedings. Younger abst ent ion requires federal court s t o abst ain from exercising j urisdict ion in cert ain circum st ances. Younger abst ent ion dict at es t hat federal court s not int erfere wit h st at e court proceedings by grant ing equit able relief—such as inj unct ions of im port ant st at e proceedings or declarat ory j udgm ent s regarding const it ut ional issues in t hose proceedings—when such relief could adequat ely be sought before t he st at e court . Am anat ullah v. Colorado Bd. of Med. Exam 'rs, 187 F.3d 1160, 1163 ( 10t h Cir. 1999) ( quot ing Rienhardt v. Kelly, 164 F.3d 1296, 1302 ( 10t h Cir. 1999) ) . Younger abst ent ion requires federal court s t o abst ain from exercising j urisdict ion when ( 1) t here is an ongoing st at e crim inal, civil, or adm inist rat ive proceeding, ( 2) t he st at e court provides an adequat e forum t o hear t he claim s raised in t he federal com plaint , and ( 3) t he st at e proceedings “ involve im port ant st at e int erest s, m at t ers which t radit ionally look t o st at e law for t heir resolut ion or im plicat e separat ely art iculat ed st at e policies.” Taylor v. Jaquez, 126 F.3d 1294, 1297 ( 10t h Cir. 1997) ) . See Middlesex Cnt y. Et hics Com m . v. Garden St at e Bar Ass'n, 457 U.S. 423, 432, 102 S.Ct . 2515, 73 L.Ed.2d 116 ( 1982) . Plaint iffs do not disput e t hat t he last t wo requirem ent s are m et , so t he issue is only whet her t here is an ongoing st at e proceeding. This inquiry involves t wo subpart s: whet her t here is a pending st at e proceeding and whet her it is t he t ype of st at e proceeding t hat is due t he deference accorded 9 by Younger abst ent ion. Brown ex rel. Brown v. Day, 555 F.3d 882, 888 ( 10t h Cir. 2009) . Plaint iffs adm it t hat t here is a pending st at e proceeding, but cont end t hat it is not due Younger deference because it is rem edial rat her t han coercive in nat ure. Brown dist inguished bet ween rem edial proceedings, t o which Younger does not apply, and coercive proceedings, t o which it does apply. That dist inct ion was m ade in “ t he unique cont ext of applying Younger t o adm inist rat ive proceedings,” Morkel v. Davis, 513 Fed.Appx. 724, 728, 2013 WL 1010556, 3 ( 10t h Cir. 2013) , so is appropriat e here. Brown ident ified t he following fact ors relevant t o t he det erm inat ion of whet her an adm inist rat ive proceeding is coercive or rem edial in nat ure: ( 1) whet her t he st at e proceeding is an opt ion available t o t he federal plaint iff on her own init iat ive t o redress a wrong inflict ed by t he st at e or whet her t he part icipat ion of t he federal plaint iff in t he st at e adm inist rat ive proceeding is m andat ory; ( 2) whet her t he st at e proceeding is it self t he wrong which t he federal plaint iff seeks t o correct via inj unct ive relief under sect ion 1983; and ( 3) whet her t he federal plaint iff has com m it t ed an alleged bad act . Brown, 555 F.3d at 890– 91. Each of t hese fact ors point s t oward t he conclusion t hat t he adm inist rat ive proceeding at issue here was coercive, and t hus t he t ype of st at e proceeding t hat is due t he deference accorded by Younger abst ent ion. Plaint iffs allegedly com m it t ed a “ bad act ” in reaching t he point of risk or 10 insolvency t hat led t he OSBC t o t ake em ergency act ion t o declare insolvency and appoint a receiver. This t riggered t he st at e- init iat ed adm inist rat ive enforcem ent proceedings against Plaint iffs, who had t o part icipat e or forfeit t heir claim s. And t he st at e proceeding is it self t he wrong which t he federal plaint iff seeks t o correct via inj unct ive relief, as t he alleged deficiencies in t he adm inist rat ive proceedings form t he basis for Plaint iff’s due process claim s – t he only claim s m ade in t his case. Where, as here, Plaint iffs claim t hat const it ut ional right s would be violat ed by virt ue of t he operat ion of t he st at e proceedings, com it y and federalism concerns are at t heir highest . Brow n, 555 F.3d at 893. St at e court s are generally equally capable of enforcing federal const it ut ional right s as federal court s. See Middlesex Cnt y. Et hics Com m ., 457 U.S. at 431, 102 S.Ct . 2515. And when const it ut ional challenges im pact st at e proceedings, as t hey do here, “ proper respect for t he abilit y of st at e court s t o resolve federal quest ions present ed in st at e- court lit igat ion m andat es t hat t he federal court st ay it s hand.” Pennzoil Co., 481 U.S. at 14, 107 S.Ct . 1519. Morkel, 513 Fed.Appx. at 728. The Kansas st at e court s addressed and resolved t he sam e due process quest ions present ed in t his case. Because Plaint iffs are at t em pt ing t o use t he federal court s t o shield t hem selves from st at e court enforcem ent effort s and t o rem edy alleged const it ut ional wrongs in t he ongoing st at e proceedings, Younger abst ent ion is appropriat e. Plaint iff’s claim s for inj unct ive relief, declarat ory relief, a const ruct ive t rust , and rescission of t he Declarat ion of I nsolvency and Tender of Receivership shall t hus be dism issed wit hout prej udice for lack of subj ect 11 m at t er j urisdict ion. See Morkel, 513 Fed.Appx. at 729. See also Ecco Plains, LLC v. Unit ed St at es, 728 F.3d 1190 ( 10t h Cir. 2013) ( const ruct ive t rust is an equit able rem edy) ; Rosenfield v. HSBC Bank, USA, 681 F.3d 1172 ( 10t h Cir. 2012) ( rescission is an equit able rem edy) . I V. D a m a ge s Cla im s, Officia l Ca pa cit y I n addit ion t o equit able relief, Plaint iffs seek m onet ary dam ages against all Defendant s, which are not included in Younger abst ent ion. Accordingly, t he Court addresses t he part ies’ argum ent s relat ing t o t his relief. A. Officia ls n ot Pr ope r D e fe n da n t s Defendant s St ork and Schust er, who have been sued in t heir official capacit ies, cont end t hat t hey are not suable “ persons” under § 1983. 3 Neit her a St at e nor it s officials sued in t heir official capacit ies for dam ages is a “ person” under § 1983. Will v. Michigan Dept . of St at e Police, 491 U.S. 58, 71, 109 S.Ct . 2304, 2312 ( 1989) . Plaint iffs cont end t hat t hey seek only prospect ive, inj unct ive relief against Defendant s St ork and Shust er in t heir official capacit ies, Dk. 21 p. 36. The Court t hus binds Plaint iffs t o t his posit ion, which is not clear from t he face of t he com plaint . A st at e official in his or her official capacit y, when 3 These sam e Defendant s also raise Elevent h Am endm ent defenses, but t he Court m ust first consider t he “ no person” defense. See Verm ont Agency of Nat ural Resources v. Unit ed St at es, 529 U.S. 765, 771 ( 2000) ( False Claim s Act case holding t hat when t he defendant assert s bot h “ person” and Elevent h Am endm ent defenses, t he court should first det erm ine t he “ person” issue) ; Power v. Sum m ers, 226 F.3d 815, 818 ( 7t h Cir. 2000) ( applying Verm ont Agency t o § 1983 act ions) . 12 sued for inj unct ive relief, is a “ person” under § 1983 because “ officialcapacit y act ions for prospect ive relief are not t reat ed as act ions against t he St at e.” Kent ucky v. Graham , 473 U.S., at 167, n. 14, 105 S.Ct ., at 3106, n. 14; Ex part e Young, 209 U.S. 123, 159–160, 28 S.Ct . 441, 453–454, 52 L.Ed. 714 ( 1908) . But inj unct ive relief is barred by Younger abst ent ion, as addressed above. B. Ba n k n ot a Pr ope r Pla in t iff The part ies agree t hat t he Bank is an unincorporat ed associat ion. See Dk. 21, p. 35. Defendant s claim t hat as an unincorporat ed associat ion, t he Bank is not a “ person” capable of bringing suit under 42 U.S.C. § 1983. The Court agrees. The Tent h Circuit has held t hat an unincorporat ed associat ion is not a “ person” capable of bringing suit under § 1983. Lippoldt v. Cole, 468 F.3d 1204, 1211 ( 10t h Cir. 2006) . “ Lippoldt does not dist inguish bet ween t ypes of unincorporat ed associat ions and t he plain holding of t he case is t hat all unincorporat ed associat ions lack t he capacit y t o bring suit under § 1983.” Owasso Kids for Christ v. Ow asso Public Schools, 2012 WL 602186, 5- 6 ( N.D.Okla. 2012) . The Bank cont ends t hat Lippoldt “ runs cont rary t o t he weight of precedent ,” from ot her j urisdict ions. See Dk. 21, p. 35. But Lippoldt is binding Tent h Circuit precedent squarely on point , so t his Court is bound t o follow it . Unit ed St at es v. Spedalieri, 910 F.2d 707, 709 n. 2. ( 10t h Cir. 13 1990) ( “ A dist rict court m ust follow t he precedent of t his circuit , regardless of it s views concerning t he advant ages of t he precedent of our sist er circuit s.” ) . Because t he Bank is an unincorporat ed associat ion incapable of bringing suit under § 1983, it shall be dism issed as a part y plaint iff. C. Ele ve n t h Am e n dm e n t Alt hough t he non- person defense above m akes it unnecessary for t he court t o reach t he Elevent h Am endm ent issue, it addresses it alt ernat ively, in an abundance of caut ion, and finds t hat Plaint iff’s dam age claim s against Defendant s St ork and Schust er are barred by t he Elevent h Am endm ent . 1 . St or k a n d Sh u st e r The Elevent h Am endm ent generally bars suit s for dam ages against t he St at e. Sect ion 1983 provides a federal forum t o rem edy m any deprivat ions of civil libert ies, but it does not provide a federal forum for lit igant s who seek a rem edy against a St at e for alleged deprivat ions of civil libert ies. The Elevent h Am endm ent bars such suit s unless t he St at e has waived it s im m unit y, Welch v. Texas Dept . of Highways and Public Transport at ion, 483 U.S. 468, 472–473, 107 S.Ct . 2941, 2945–2946, 97 L.Ed.2d 389 ( 1987) ( pluralit y opinion) , or unless Congress has exercised it s undoubt ed power under § 5 of t he Fourt eent h Am endm ent t o override t hat im m unit y. Will, 491 U.S. at 66. No waiver or override is alleged here, t hus under t he general rule Plaint iff’s claim s against t he St at e and it s officials are barred. I n Ex part e Young, t he Court creat ed an except ion, holding t hat t he Elevent h Am endm ent generally will not operat e t o bar suit s so long as t hey ( i) seek relief properly charact erized as prospect ive rat her t han t he 14 funct ional equivalent of im perm issible ret rospect ive relief for alleged violat ions of federal law, and ( ii) are aim ed against st at e officers act ing in t heir official capacit ies, rat her t han against t he St at e it self. Ex part e Young, 209 U.S. 123, 28 S.Ct . 441, 52 L.Ed. 714 ( 1908) . Thus t he Elevent h Am endm ent does not bar official capacit y claim s for forward- looking declarat ory or inj unct ive relief. Hill v. Kem p, 478 F.3d 1236, 1255- 56 ( 10t h Cir. 2007) . I n exam ining t he nat ure of t he relief sought by Plaint iffs, t he Court looks t o t he subst ance, not j ust t o t he capt ion, of t he m at t er. Hill, 478 F.3d at 1259. The com plaint seeks an inj unct ion requiring t he Defendant s “ t o com ply wit h st at e and federal law.” But an inj unct ion m ay not enj oin “ all possible breaches of t he law.” Hart ford–Em pire Co. v. Unit ed St at es, 323 U.S. 386, 410, 65 S.Ct . 373, 89 L.Ed. 322 ( 1945) . And such a vague, broad, and unenforceable inj unct ion would not sat isfy t he requirem ent s of Rule 65( d) . See Schm idt v. Lessard, 414 U.S. 473, 476, 94 S.Ct . 713, 38 L.Ed.2d 661 ( 1974) . I n essence, Plaint iffs are m erely seeking t o undo or address t he past harm s t hey allegedly suffered by virt ue of t he seizure, receivership, and subsequent adm inist rat ive proceedings relat ing t o t hose event s, rat her t han t o prevent prospect ive violat ions of law . Plaint iffs allege no act t hat Defendant s m ight t ake in t he fut ure which could be addressed by an inj unct ion. Accordingly, t he relief can only reasonably be cat egorized as 15 ret rospect ive. As such, it does not fall int o t he Ex Part e Young except ion t o st at e sovereign im m unit y. See Buchheit v. Green, 705 F.3d 1157, 1159 ( 10t h Cir. 2012) . 2 . OSBC Plaint iffs also cont end t hat OSBC is not a st at e ent it y or an arm of t he st at e so is not ent it led t o im m unit y. 4 Elevent h Am endm ent im m unit y ext ends t o st at e ent it ies t hat are deem ed t o be “ arm [ s] of t he st at e.” See Regent s of t he Univ. of Cal. v. Doe, 519 U.S. 425, 429–30, 117 S.Ct . 900, 137 L.Ed.2d 55 ( 1997) . Whet her an ent it y is an “ arm of t he St at e” t urns on t he ent it y's funct ion and charact er as det erm ined by st at e law. Will, 491 U.S. at 70. To det erm ine whet her an ent it y const it ut es an “ arm of t he st at e,” t he Court exam ines four fact ors. We look t o four prim ary fact ors in det erm ining whet her an ent it y const it ut es an “ arm of t he st at e.” Mt . Healt hy [ v. Doyle] , 429 U.S. [ 274] at 280, 97 S.Ct . 568 [ 50 L.Ed.2d 471 ( 1977) ] . First , we assess t he charact er ascribed t o t he ent it y under st at e law. Sim ply st at ed, we conduct a form alist ic survey of st at e law t o ascert ain whet her t he ent it y is ident ified as an agency of t he st at e. See St urdevant , 218 F.3d at 1164, 1166. Second, we consider t he aut onom y accorded t he ent it y under st at e law. This det erm inat ion hinges upon t he degree of cont rol t he st at e exercises over t he ent it y. See id. at 1162, 1164, 1166. Third, we st udy t he ent it y's finances. Here, we look t o t he am ount of st at e funding t he ent it y receives and consider whet her t he ent it y has t he abilit y t o issue bonds or levy t axes on it s own behalf. See id. Fourt h, we ask w het her t he ent it y in quest ion is concerned prim arily wit h local or st at e affairs. I n answering t his quest ion, we exam ine t he agency's funct ion, com posit ion, and purpose. See id. at 1166, 1168–69. 4 Curiously, Plaint iffs sue OSBC’s em ployees in t heir official capacit y and refer t o t hem as “ st at e officials,” yet cont end OSBC it self is not an arm of t he st at e. 16 St eadfast I ns. Co. v. Agricult ural I ns. Co., 507 F.3d 1250, 1253 ( 10t h Cir. 2007) . a . Ch a r a ct e r / Au t on om y The st at ut es which est ablish t he OSBC and delegat e t he dut ies t o t he bank com m issioner are found in Chapt er 75 of t he Kansas St at ut es, which is capt ioned “ St at e Depart m ent s, Public Officers and Em ployees.” Alt hough t he capt ion is not binding, it reflect s som e com m on sense. The bank com m issioner is appoint ed by t he governor, subj ect t o confirm at ion by t he Senat e. K.S.A. § 75–1304. Kansas st at ut es require t he secret ary of adm inist rat ion t o provide t he com m issioner wit h suit able office space at Topeka. K.S.A. § 75- 1306. The OSBC is t hus ident ified by law as a st at e office, as it s very nam e suggest s. The bank com m issioner is required t o devot e his or her t im e and at t ent ion t o t he business and dut ies of t he office on a full- t im e basis. K.S.A. § 75- 1304( c) . Those dut ies are prescribed by st at ut es t hat provide for som e discret ion on t he part of t he com m issioner, but only wit hin t he boundaries est ablished by t he st at ut es. See e.g., K.S.A. §§ 9- 1602, 9- 1701, 9- 1724, 9- 1902. The banking com m issioner, and result ingly his office, is by no m eans aut onom ous of t he st at e. b. Fu n din g OSBC’s m anner of financing also point s t oward it s st at us as an arm of t he st at e. The part ies agree t hat OSBC is a “ self- funded regulat ory agency,” and do not cont end t hat it has any abilit y t o issue bonds or levy t axes on it s 17 own behalf. But Kansas st at ut es require t he com m issioner t o collect fees in t he adm inist rat ion of t he program s it regulat es ( t he division of banking and t he division of consum er and m ort gage lending) . And t he bank com m issioner m ust “ rem it all m oneys received by or for t he com m issioner from such fees t o t he st at e t reasurer.” K.S.A. § 75- 1308. Upon receipt of such rem it t ance, t he st at e t reasurer shall deposit t he ent ire am ount in t he st at e t reasury. Ten present of each such deposit shall be credit ed t o t he st at e general fund and t he balance shall be credit ed t o t he bank com m issioner fee fund. All expendit ures from t he bank com m issioner fee fund shall be m ade in accordance wit h appropriat ion act s upon warrant s of t he direct or of account s and report s issued pursuant t o vouchers approved by t he bank com m issioner” or his designee. I d. OSBC’s funding is t hus ent ert wined wit h st at e coffers. c. St a t e v. Loca l Affa ir s Last ly, t he OSBC is concerned prim arily wit h st at e affairs rat her t han local affairs, as t he general purpose of bank regulat ion is t o prot ect t he public. “ A bank is a quasi public inst it ut ion.” Knickerbocker Life I ns. Co. v. Pendlet on, 115 U.S. 339, 344, 6 S.Ct . 74, 76 ( 1885) . Maint aining t he solvency and liquidit y of st at e banks in Kansas, regulat ing banks’ affairs in t he int erest s of financial order and st abilit y, and encouraging public confidence in t he soundness of t he banks wit h which t hey do business are m at t ers of st at ewide concern. Accordingly, t he Court finds t hat OSBD is an arm of t he st at e ent it led t o Elevent h Am endm ent im m unit y. For t he sam e reason, t he Court finds t hat OSBD is not a “ person” am enable t o suit for dam ages under § 1983. 18 V. D a m a ge s Cla im s, I n dividu a l Ca pa cit y Plaint iffs also bring dam age claim s against Defendant s St ork, Splichal, and Thull in t heir individual capacit ies. These claim s are unaffect ed by t he analysis above, so t he Court reaches t he defenses of absolut e and qualified im m unit y. A. Absolu t e I m m u n it y Defendant s first cont end t hat t he doct rine of absolut e im m unit y shields t hem from liabilit y from dam ages. Officials who “ seek exem pt ion from personal liabilit y” on t he basis of absolut e im m unit y bear “ t he burden of showing t hat such an exem pt ion is j ust ified by overriding considerat ions of public policy.” Forrest er v. Whit e, 484 U.S. 219, 22 4, 108 S.Ct . 538, 98 L.Ed.2d 555 ( 1988) . Judicial im m unit y ext ends t o j udges, t o t hose who t ake act s prescribed by a j udge’s order, or t o non- j udicial officers when t heir dut ies have an int egral relat ionship wit h t he j udicial process. See Cleavinger v. Saxner, 474 U.S. 193, 200, 106 S.Ct . 496, 88 L.Ed.2d 507 ( 1985) ( ext ending absolut e im m unit y t o federal hearing exam iners and adm inist rat ive law j udges) . Defendant s cont end t hat t hey are adm inist rat ive officials act ing in a quasi- j udicial capacit y, and “ t hat agency officials perform ing cert ain funct ions analogous t o t hose of a prosecut or should be able t o claim absolut e im m unit y wit h respect t o such act s.” But z v. Econom ou, 438 U.S. 478, 515, 98 S.Ct . 2894, 57 L.Ed.2d 895 ( 1978) . But Prosecut ors enj oy 19 absolut e im m unit y only when act ing as advocat es for t he St at e, not when act ing in t he role of an adm inist rat or or when conduct ing invest igat ions. “ [ A] ct s undert aken by a prosecut or in preparing for t he init iat ion of j udicial proceedings or for t rial, and which occur in t he course of his role as an advocat e for t he St at e, are ent it led t o t he prot ect ions of absolut e im m unit y.” Buckley v. Fit zsim m ons, 509 U.S. 259, ––––, 113 S.Ct . 2606, 2615, 125 L.Ed.2d 209 ( 1993) . The Court in Buckley est ablished a dichot om y bet ween t he prosecut or's role as advocat e for t he St at e, which dem ands absolut e im m unit y, and t he prosecut or's perform ance of invest igat ive funct ions, which warrant s only qualified im m unit y. I d. at ––––, 113 S.Ct . at 2515–16. Hunt v. Bennet t , 17 F.3d 1263, 1267 ( 10t h Cir. 1994) . And Defendant s bear t he burden t o show t hat such an exem pt ion “ is j ust ified by overriding considerat ions of public policy.” Forrest er v. Whit e, 484 U.S. 219, 224, 108 S.Ct . 538, 98 L.Ed.2d 555 ( 1988) ; Thom as v. Kaven, 765 F.3d 1183, 1191 ( 10t h Cir. 2014) . The Court applies a funct ional approach, looking at t he nat ure of t he part icular act s t aken by each defendant : “ I n det erm ining whet her part icular act s of governm ent officials are eligible for absolut e im m unit y, we apply a ‘funct ional approach ... which looks t o t he nat ure of t he funct ion perform ed, not t he ident it y of t he act or who perform ed it .’ ” Malik v. Arapahoe Cnt y. Dep't of Soc. Servs., 191 F.3d 1306, 1314 ( 10t h Cir. 1999) ( quot ing Buckley v. Fit zsim m ons, 509 U.S. 259, 269, 113 S.Ct . 2606, 125 L.Ed.2d 209 ( 1993) ) . “ The m ore dist ant a funct ion is from t he j udicial process, t he less likely absolut e im m unit y will at t ach.” Snell v. Tunnell, 920 F.2d 673, 687 ( 10t h Cir. 1990) . Thom as, 765 F.3d at 1192. Defendant s will be absolut ely im m une only when t hey are act ing in t heir capacit y as legal advocat es—init iat ing court act ions or t est ifying under oat h—not when perform ing adm inist rat ive, invest igat ive, 20 or ot her funct ions. I d. See Rehberg v. Paulk, __ U.S.__, 132 S.Ct . 1497, 1507, 182 L.Ed.2d 593 ( 2012) ( finding a com plaining wit ness who procures an arrest and init iat es a crim inal prosecut ion not ent it led t o absolut e im m unit y) . 1 . D e fe n da n t Th u ll Defendant Thull allegedly det erm ined t he Bank was insolvent , issued t he Declarat ion of I nsolvency, t ook charge of t he Bank, and placed it under FDI C receivership. Absolut e im m unit y is not rout inely grant ed t o t hose who decide t o t ake em ergency act ions prior t o t he operat ion of t he j udicial process. See e.g., Thom as, 765 F.3d at 1193 ( denying absolut e im m unit y t o doct ors and t herapist who placed an em ergency m edical hold on a pat ient ’s discharge) ; Snell v. Tunnell, 920 F.2d 673, 690 ( 10t h Cir. 1990) ( declining t o ext end absolut e im m unit y t o social worker’s effort s t o gain prot ect ive cust ody before filing a pet it ion in court ) ; Spielm an v. Hildebrand, 873 F.2d 1377, 1383 ( 10t h Cir. 1989) ( holding t hat SRS em ployees were not ent it led t o absolut e im m unit y in rem oving a child from a hom e wit hout a court order because t hey “ act ed unilat erally prior t o t he operat ion of t he j udicial process” ( int ernal quot at ion m arks om it t ed) ) . The Court finds Defendant Thull’s act s are not prot ect ed by absolut e im m unit y, as t hey are t oo far rem oved from t he j udicial process t o warrant applicat ion of t hat doct rine. See Horowit z v. St at e Bd. of Medical Exam iners of t he St at e of Colorado, 822 F.2d 1508, 1512 ( 10t h Cir.) , cert . denied, 484 U.S. 964 ( 1987) . 21 2 . D e fe n da n t St or k Defendant St ork is alleged only “ t o have been closely involved in t he det erm inat ion t hat t he Bank was insolvent .” Dk. 21, p. 11. Neit her part y has shown wit h part icularit y what her part icipat ion was in t he relevant event s. Because Defendant s have not shown t hat t he ext ent of her part icipat ion in t he event s giving rise t o t his case was quasi- j udicial in nat ure, she does not enj oy absolut e im m unit y. 5 “ The presum pt ion is t hat qualified rat her t han absolut e im m unit y is sufficient t o prot ect governm ent officials in t he exercise of t heir dut ies.” Burns v. Reed, 500 U.S. 478, 486–87, 111 S.Ct . 1934, 114 L.Ed.2d 547 ( 1991) . 3 . D e fe n da n t Splich a l Defendant Splichal presided over Plaint iff’s 2012 adm inist rat ive hearing before t he OSBC, so det erm ined what discovery t o perm it and decided t he part ies’ cross- m ot ions for sum m ary j udgm ent . These act s are direct ly relat ed t o t he conduct of an adm inist rat ive hearing governed by t he KAPA so are quasi- j udicial in nat ure, warrant ing absolut e im m unit y. The Tent h Circuit has recognized t hat “ officials in adm inist rat ive hearings can claim t he absolut e im m unit y t hat flows t o j udicial officers if t hey are act ing in a quasi- j udicial fashion.” Gut t m an v. Khalsa, 446 F.3d 1027, 1033 ( 10t h Cir. 2006) ( finding presiding officer of hearing by Board of Medical Exam iners enj oyed absolut e im m unit y) ( cit ing But z, 438 U.S. at 514) . See 5 Nor do Plaint iffs show t hat she had t he individual part icipat ion necessary under § 1983, but t he Court does not address t his issue since t he part ies have not raised it . 22 Collins v. McClain, 207 F.Supp.2d 1260, 1262 ( D.Kan. 2002) ( j udicial im m unit y ext ends t o adm inist rat ive hearing officers) ; Hunt v. Lam b, 2006 WL 2726808, * 3 ( D.Kan., Sept . 22, 2006) ( sam e) , appeal dism issed, 220 Fed.Appx. 887 ( 10t h Cir., Apr. 4, 2007) . For an official at an adm inist rat ive hearing t o enj oy absolut e im m unit y, “ ( a) t he officials' funct ions m ust be sim ilar t o t hose involved in t he j udicial process, ( b) t he officials' act ions m ust be likely t o result in dam ages lawsuit s by disappoint ed part ies, and ( c) t here m ust exist sufficient safeguards in t he regulat ory fram ew ork t o cont rol unconst it ut ional conduct .” Gut t m an, 446 F.3d at 1033 ( quot ing Horwit z, 822 F.2d at 1513) ( int ernal quot at ion m arks om it t ed) . See Moore v. Gunnison Valley Hosp, 310 F.3d 1315, 1317 ( 10t h Cir. 2002) ( recit ing six- fact or t est ) . These condit ions are m et as t o Defendant Splichal. Deciding who will serve as t he presiding officer, how m uch discovery t o perm it , whet her t o hold a hearing or require briefing on sum m ary j udgm ent , when t o issue an order on cross- m ot ions on sum m ary j udgm ent m ot ions, and what t he cont ent of t hat order will be are funct ions sim ilar t o t hose involved in t he j udicial process. Secondly, his act ions are likely t o result in dam ages lawsuit s by disappoint ed part ies, as t his very suit dem onst rat es. And t he KAPA, K.S.A. § 77- 501 et seq, and t he KJRA, § 77- 601 et seq, provide sufficient safeguards in t he regulat ory fram ework t o cont rol unconst it ut ional conduct of t he t ype alleged here. See e.g., K.S.A. § 77- 527 ( perm it t ing 23 pet it ions for review init ial orders) ; § 77- 631 ( perm it t ing ent it lem ent t o int erlocut ory j udicial review for persons aggrieved by an agency’s failure t o act in a t im ely m anner, and perm it t ing subsequent pet it ion for j udicial review of final orders) . Even if Defendant Splichal’s act s were in error, t hey were nevert heless act s perform ed in furt herance of t he j udicial process so are prot ect ed. See St um p v. Sparkm an, 435 U.S. 349, 356–57, 362, 98 S.Ct . 1099, 55 L.Ed.2d 331 ( 1978) ; Morkel, 513 Fed.Appx. at 730. Plaint iffs allege t hat Com m issioner Splichal was biased, so t he procedural safeguards were inadequat e. But Plaint iffs do not allege any fact s showing act ual bias. I nst ead, Plaint iffs cont end t hat by virt ue of Com m issioner Splichal’s posit ion as agency head, he was inherent ly biased in favor of t he agency. But t he KAPA expressly provides t hat an agency head m ay act as presiding officer, st at ing: For all agencies, except for t he st at e court of t ax appeals, t he agency head, one or m ore m em bers of t he agency head or a presiding officer assigned by t he office of adm inist rat ive hearings shall be t he presiding officer. K.S.A. § 77- 514. This is a com m on procedure in adm inist rat ive t ribunals, and does not violat e due process. See Wit hrow v. Larkin, 421 U.S. 35, 46– 55, 95 S.Ct . 1456, 1464, 43 L.Ed.2d 712 ( 1975) ; Federal Adm inist rat ive Procedure Act , 5 U.S.C. § 554( d) ( providing t hat no em ployee engaged in invest igat ing or prosecut ing m ay also part icipat e or advise in t he 24 adj udicat ing funct ion, but expressly exem pt ing from t hat prohibit ion ‘t he agency or a m em ber or m em bers of t he body com prising t he agency.') . True, a ‘fair t rial in a fair t ribunal is a basic requirem ent of due process,’ I n re Murchison, 349 U.S. 133, 16, 75 S.Ct . 623, 625, 99 L.Ed. 942 ( 1955) , and t his applies t o adm inist rat ive agencies as well as t o court s. Gibson v. Berryhill, 411 U.S. 564, 579, 93 S.Ct . 1689, 1698, 36 L.Ed.2d 488 ( 1973) . But t he Unit ed St at es Suprem e Court has squarely and repeat edly held t hat an adm inist rat ive agency can be t he invest igat or and t he adj udicat or of t he sam e m at t er wit hout violat ing due process. See Wit hrow, 421 U.S. at 46–55, and cases cit ed t herein. Here, as in Wit hrow, No specific foundat ion has been present ed for suspect ing t hat t he Board had been prej udiced by it s invest igat ion or would be disabled from hearing and deciding on t he basis of t he evidence t o be present ed at t he cont est ed hearing. The m ere exposure t o evidence present ed in nonadversary invest igat ive procedures is insufficient in it self t o im pugn t he fairness of t he board m em bers at a lat er adversary hearing. Wit hout a showing t o t he cont rary, st at e adm inist rat ors ‘are assum ed t o be m en of conscience and int ellect ual discipline, capable of j udging a part icular cont roversy fairly on t he basis of it s own circum st ances.’ Unit ed St at es v. Morgan, 313 U.S. 409, 421, 61 S.Ct . 999, 1004, 85 L.Ed. 1429 ( 1941) . Wit hrow, 421 U.S. at 55. Defendant Splichal is t hus ent it led t o absolut e im m unit y. B. Qu a lifie d I m m u n it y Defendant s Thull, Splichal, Schust er, and St ork addit ionally cont end t hat t heir act s are ent it led t o qualified im m unit y. A governm ent official sued under §1983 is ent it led t o qualified im m unit y unless t he official violat ed a st at ut ory or const it ut ional right 25 t hat was clearly est ablished at t he t im e of t he challenged conduct . See Ashcroft v. al- Kidd, 563 U. S. ___, ___ ( 2011) ( slip op., at 3) . A right is clearly est ablished only if it s cont ours are sufficient ly clear t hat “ a reasonable official would underst and t hat what he is doing violat es t hat right .” Anderson v. Creight on, 483 U. S. 635, 640 ( 1987) . I n ot her words, “ exist ing precedent m ust have placed t he st at ut ory or const it ut ional quest ion beyond debat e.” al- Kidd, 563 U. S., at ___ ( slip op., at 9) . This doct rine “ gives governm ent officials breat hing room t o m ake reasonable but m ist aken j udgm ent s,” and “ prot ect s ‘all but t he plainly incom pet ent or t hose who knowingly violat e t he law.’” I d., at ___ ( slip op., at 12) ( quot ing Malley v. Briggs, 475 U. S. 335, 341 ( 1986) ) . Carroll v. Carm an, et ux, 574 U.S. __, slip op. 2014 WL 5798628 ( Nov. 10, 2014) . Once a defendant raises t he defense of qualified im m unit y, t he plaint iff m ust “ com e forward wit h fact s or allegat ions t o show bot h t hat t he defendant 's alleged conduct violat ed t he law and t hat law was clearly est ablished when t he alleged violat ion occurred.” Pueblo Neighborhood Healt h Ct rs. v. Losavio, 847 F.2d 642, 646 ( 10t h Cir. 1988) . The defendant prevails unless such a showing is m ade on bot h elem ent s. Snell, 920 F.2d at 696. I n order “ for a right t o be clearly est ablished, t here m ust be a Suprem e Court or Tent h Circuit decision on point , or t he clearly est ablished weight of aut horit y from ot her court s m ust have found t he law t o be as t he plaint iff m aint ains.” Price–Cornelison v. Brooks, 524 F.3d 1103, 1108 ( 10t h Cir. 2008) . Plaint iffs cont end t hat Defendant s violat ed t heir clearly- est ablished right t o be heard at a m eaningful t im e in a m eaningful m anner by seizing t he Bank wit hout j ust ificat ion, not ice or a pre- deprivat ion hearing, by 26 denying t hem a post - deprivat ion hearing for over t hree years, by providing a hearing at which t he presiding officer had an inherent conflict of int erest and did not perm it Plaint iffs t o depose t he key wit ness against t hem , and by denying Plaint iffs j udicial review of t he procedurally- deficient hearing. Dk. 21 p. 27. “ The fundam ent al requirem ent of due process is t he opport unit y t o be heard ‘at a m eaningful t im e and in a m eaningful m anner.’” Mat hews v. Eldridge, 424 U.S. 319, 333 ( 1976) ( quot ing Arm st rong v. Manzo, 380 U.S. 545, 552 ( 1965) ) . But general proposit ions of law are insufficient t o show a clearly est ablished right . Ashcroft v. al- Kidd, __ U.S. __, 131 S.Ct . 2074, 2084, 179 L.Ed.2d 1149 ( 2011) . … t he right allegedly violat ed m ust be est ablished, “ ‘not as a broad general proposit ion,’ ” Brosseau v. Haugen, 543 U.S. 194, 198, 125 S.Ct . 596, 160 L.Ed.2d 583 ( 2004) ( per curiam ) , but in a “ part icularized” sense so t hat t he “ cont ours” of t he right are clear t o a reasonable official, Anderson, supra, at 640, 107 S.Ct . 3034. Reichle v. Howards, 566 U.S. __, 132 S.Ct . 2088, 2094, 182 L.Ed.2d 985 ( 2012) . 1 . La ck of pr e - de pr iva t ion h e a r in g Assum ing t hat Plaint iffs had a prot ect ed int erest in t he m at t ers seized by Defendant s, t he Court first asks whet her Defendant s violat ed clearlyest ablished law by not holding a pre- deprivat ion hearing. “ The m ere fact t hat t he st at e or it s aut horit ies acquire possession or cont rol of propert y as a prelim inary st ep t o t he j udicial det erm inat ion of 27 assert ed right s in t he propert y is not a denial of due process. ( Cases om it t ed.) ” Anderson Nat . Bank v. Lucket t , 321 U.S. 233, 247, 64 S.Ct . 599, 606- 607 ( 1944) ( holding t he St at e Com m issioner of Revenue could t ransfer abandoned bank deposit s t o St at e Depart m ent of Revenue) . Plaint iffs rely on t he law t hat “ [ g] enerally, t he governm ent m ay not deprive som eone of a prot ect ed propert y right wit hout first conduct ing “ som e sort of hearing.” Cam uglia v. Cit y of Albuquerque, 448 F.3d 1214, 1220 ( 10t h Cir. 2006) . But t hat rule is not absolut e, part icularly in m at t ers of public healt h and safet y. Due process, however, “ is flexible and calls only for such procedural prot ect ions as t he part icular sit uat ion dem ands.” I d. ( quot ing Mat hews v. Eldridge, 424 U.S. 319, 334, 96 S.Ct . 893, 47 L.Ed.2d 18 ( 1976) ) . For exam ple, “ [ i] n m at t ers of public healt h and safet y, t he Suprem e Court has long recognized t hat t he governm ent m ust act quickly.” I d. Collvins v. Hackford, 523 Fed.Appx. 515, 518, 2013 WL 1319525, 3 ( 10t h Cir. 2013) . The Tent h Circuit has found public healt h and safet y reasons j ust ifying t he lack of a pre- deprivat ion hearing in m any cases, including t he following: t he governm ent closed a rest aurant for im proper use of pest icides, Cam uglia, 448 F.3d 1214; t he school dist rict suspended an em ployee for errors causing a subst ant ial budget deficit , Kirkland v. St . Vrain Valley Sch. Dist . No. Re–1J, 464 F.3d 1182, 1194 ( 10t h Cir. 2006) ; t he cit y quarant ined anim als suspect ed t o have rabies, Clark v. Cit y of Draper, 168 F.3d 1185, 1189–90 ( 10t h Cir. 1999) ; t he st at e invest igat ed a child care cent er for claim s of abuse, Ward v. Anderson, 494 F.3d 929, 937 ( 10t h Cir. 2007) ; and 28 t he st at e suspended a boiler inspect or’s cert ificat e because of school safet y concerns, Collvins, 523 Fed.Appx. 515 ( 10t h Cir. 2013) . Sim ilarly, t he Unit ed St at es Suprem e Court has held t hat no predeprivat ion hearing is required when a bank is placed under conservat orship t o guard against it s failure. See Fahey v. Mallonee, 332 U.S. 245, 254 ( 1947) . A reasonable person would have known t his law. But Plaint iffs cont end t hat Fahey provides no j ust ificat ion for Defendant s’ act s because a receiver t akes perm anent cont rol of t he propert y, while a conservat or does so only for a lim it ed period of t im e before ret urning cont rol t o t he owner. But even assum ing t his is so, Defendant s have not explained how t his dist inct ion warrant s a pre- deprivat ion hearing, and have not shown where t his dist inct ion is m ade in clearly- est ablished law. See Franklin Sav. Ass'n v. Office of Thrift Supervision, 821 F.Supp. 1414 ( D.Kan. 1993) ( “ wit hout except ion, t he court s agree t hat in t his set t ing a post - deprivat ion opport unit y for j udicial review ext ends all t he procedural prot ect ion required by t he Const it ut ion.” ) . Accordingly, Plaint iffs have failed t o show t hat t he Defendant 's failure t o provide a pre- deprivat ion hearing violat ed clearlyest ablished law. 2 . D e la y in post - de pr iva t ion h e a r in g Plaint iffs received an opport unit y for a post - deprivat ion hearing and have not shown any prej udice by virt ue of t he delay in receiving it . I nst ead, 29 Plaint iffs cont end t hat a t hree- year delay 6 is per se unconst it ut ional. Suprem e Court cases est ablish t he im port ance of providing a prom pt post - deprivat ion hearing where no pre- deprivat ion hearing is held. See e.g., Mit chell v. W. T. Grant Co., 416 U.S. 600, 606, 94 S.Ct . 1895, 40 L.Ed.2d 406 ( 1974) ; Nort h Georgia Finishing, I nc. v. Di- Chem , I nc., 419 U.S. 601, 606–07, 95 S.Ct ., 719, 722–723, 42 L.Ed.2d 751 ( 1975) ; Barry v. Barchi, 443 U.S. 55, 63- 64, 99 S.Ct . 2642, 61 L.Ed.2d 365 ( 1979) ) . See generally Connect icut v. Doehr, 501 U.S. 1, 22, 111 S.Ct . 2105, 2118 ( 1991) ( “ Our cases have repeat edly em phasized t he im port ance of providing a prom pt post deprivat ion hearing at t he very least .” ) “ [ E] ven when ... a pre- hearing rem oval is j ust ified, t he st at e m ust act prom pt ly t o provide a post - rem oval hearing.” Gom es v. Wood, 451 F.3d 1122, 1128 ( 10t h Cir. 2006) ( quot at ions om it t ed) . But m erely relying on case law requiring a post - deprivat ion hearing t o be “ prom pt ” is insufficient . Collvins, at 520. Plaint iffs m ust cit e case law m ore specifically applicable. As an init ial m at t er, case law from t he Suprem e Court and Tent h Circuit present s no bright - line rules as t o when a delay becom es unconst it ut ional. I n fact in one case, t he Suprem e Court held t hat a 9– m ont h delay in holding a hearing is not per se unconst it ut ional. Cleveland Bd. of Educ. v. Louderm ill, 470 U.S. 532, 547, 105 S.Ct . 1487, 84 L.Ed.2d 494 ( 1985) . Rat her, t he precedent indicat es t hat t he det erm inat ion of t he const it ut ionalit y of a delay is a fact - int ensive analysis based on t he fact ors described [ in] Mallen, 486 U.S. at 242, 6 Plaint iffs do not show t he court how t hey calculat e t hat period of t im e. The count ing presum ably beings on t he dat e of seizure, August of 2008, and ends t hree years t hereaft er but t he record does not reflect a hearing or ot her event in August of 2011 30 108 S.Ct . 1780. There is no precedent sufficient ly on point wit h t his case t hat could have put Defendant s on not ice t hat t he delay was unconst it ut ional. Collvins, 523 Fed.Appx. at 520. The sam e is t rue here. “ [ E] ven t hough t here is a point at which an unj ust ified delay in com plet ing a post - deprivat ion proceeding ‘would becom e a const it ut ional violat ion,’ Cleveland Bd. of Educat ion v. Louderm ill, 470 U.S. S. 532, 547, 105 S.Ct . 1487, 1496, 84 L.Ed.2d 494 ( 1985) , t he significance of such a delay cannot be evaluat ed in a vacuum .” Federal Deposit I ns. Corp. v. Mallen, 486 U.S. 230, 242, 108 S.Ct . 1780, 1788 ( 1988) . I n det erm ining how long a delay is j ust ified in affording a post - deprivat ion hearing and decision, t he Court exam ines a num ber of fact ors. Mallen, 486 U.S. at 242. These include “ 1) t he im port ance of t he privat e int erest and t he harm t o t his int erest occasioned by delay; 2) t he j ust ificat ion offered by t he Governm ent for delay and it s relat ion t o t he underlying governm ent al int erest ; and 3) t he likelihood t hat t he int erim decision m ay have been m ist aken.” I d. a . CFC’s I n t e r e st CFC has a valid int erest in avoiding t he arbit rary seizure of it s business, even if t hat seizure last s only for a lim it ed t im e. See Connect icut v. Doehr, 501 U.S. 1, 11–13, 111 S.Ct . 2105, 2113, 115 L.Ed.2d 1 ( 1991) . But Banks are subj ect t o const ant and int ensive governm ent regulat ion, so t he banks' int erest , and t hus CFC’s int erest , is dim inished. 31 b. D e fe n da n t s’ I n t e r e st The St at e has a subst ant ial int erest in in prot ect ing deposit ors and upholding public fait h in financial inst it ut ions, which com pels it t o m ove quickly t o seize insolvent inst it ut ions. Cf, Franklin, 821 F.Supp. at 1423 ( exam ining t he federal governm ent ’s “ com pelling int erest in regulat ing banks.” ) . The seizure of an insolvent bank and t he appoint m ent of t he FDI C as receiver are int egral part s of t he Kansas st at ut ory plan t o prot ect deposit ors and uphold t he public confidence in financial inst it ut ions. Cf, Mallen, 486 U.S. at 241. Requiring a pre- seizure hearing could expose bot h deposit ors and t he FDI C insurance fund t o furt her losses from t he cont inued operat ion of a failed inst it ut ion by it s m anagem ent . Haralson v. Federal Hom e Loan Bank Bd., 837 F.2d 1123, 1127 ( D.C.Cir.1988) . Equally st rong is t he Governm ent 's int erest in swift ly disposing of asset s and liabilit ies aft er a seizure t akes place in order t o ensure t he sm oot h t ransfer of a bank's deposit s and branches t o ot her inst it ut ions, as well as t o m inim ize losses for bot h deposit ors and t axpayers t hat could occur if t he Governm ent had t o hold on t o a bank's asset s whose value is declining. Cf. 58 Fed.Reg. 6,363, 6,365 ( 1993) ( not ing t hat t he value of an inst it ut ion's deposit s depends in part upon t he st abilit y of t hose deposit s) ; 57 Fed.Reg. 11,005, 11,006 ( 1992) ( sam e) . I n ot her cont ext s, t he Suprem e Court has found t he governm ent 's int erest in prot ect ing deposit ors and preserving t he int egrit y of t he banking 32 indust ry sufficient ly st rong t o j ust ify seizing a bank, suspending a bank's officers, and at t aching liens against t he propert y of a bank's st ockholders wit hout a prior hearing. Fahey, 332 U.S. at 253–54 ( upholding appoint m ent of conservat or of a bank during an invest igat ion int o unsound banking pract ices, wit h adm inist rat ive hearing provided aft er t he seizure) ; FDI C v. Mallen, 486 U.S. 230, 241–42, 108 S.Ct . 1780, 1788–89, 100 L.Ed.2d 265 ( 1988) ( upholding suspension of indict ed bank officer where t he governm ent would grant an adm inist rat ive hearing wit hin 30 days of a request t o do so) ; Coffin Bros. v. Bennet t , 277 U.S. 29, 48 S.Ct . 422, 72 L.Ed. 768 ( 1928) ( upholding t he governm ent 's power t o place a lien on t he propert y of a bank's st ockholders t o pay deposit ors of a failed bank, where a post at t achm ent t rial would serve as t he hearing) . The St at e’s int erest s here are no less com pelling. Recognizing t hat swift act ion is oft en necessary t o m inim ize econom ic loss in inst ances of t roubled and failing financial inst it ut ions, t he legislat ure has given a great am ount of cont rol and aut horit y t o t he OSBC in t he event of such crises. See generally K.S.A. § 9- 1807 t o 9- 1918. And t he record shows j ust ificat ion for m uch of t he delay in grant ing Plaint iffs a post - deprivat ion hearing. Wit hin a m ont h aft er t he seizure, in Sept em ber of 2008, t he Plaint iffs filed a pet it ion for j udicial review w hich was not decided unt il March of 2010. That 18- m ont h delay was at t ribut able t o t he st at e dist rict court rat her t han t o any Defendant , and was spent 33 giving Plaint iffs t he process t hey had request ed. Accordingly, t hat eight een m ont h delay was j ust ifiable. Sim ilarly, Plaint iffs fail t o show why any post rem and t im e ( from March 29, 2010 t o April 18, 2012) expended in t he reasonable progress of adm inist rat ive proceedings ( including conduct ing discovery, com piling fact s, briefing cross m ot ions for sum m ary j udgm ent , and await ing a decision) should be count ed as unj ust ified delay. c. Risk of Er r or As for t he risk of error, t he adm inist rat ive and j udicial review process included num erous safeguards against an arbit rary seizure of t he Bank. From t he very beginning, CFC had m ult iple opport unit ies, ranging from inform al m eet ings t o inspect ions t o issuance of t he cease and desist order, by which t o challenge arbit rary act ions. CFC chose t o waive any challenge t o issuance of t he cease and desist order, but was necessarily on not ice of t he severit y of t he Bank’s financial condit ion. The subsequent Declarat ion t old Plaint iffs t hey had 30 days in which t o file a pet it ion for j udicial review, t old t hem where t o file it , and t old t hem who t he agency officer was t o receive service of process on behalf of t he OSBC. Dk. 15, Exh. 1. Plaint iffs availed t hem selves of t hat opport unit y, and on rem and part icipat ed in adm inist rat ive hearing procedures. When t hose procedures were com plet ed in Defendant s’ favor, Plaint iffs once again appealed by filing a pet it ion for j udicial review of t he adm inist rat ive act ion ( sum m ary j udgm ent decision) wit h t he St at e dist rict court . When t hat decision favored t he Defendant s, Plaint iffs appealed 34 it t o t he Kansas Court of Appeals, and upon losing yet again filed a pet it ion for review wit h t he Kansas Suprem e Court . Given t he event s preceding t he seizure and receivership, and t he m ult iple layers of procedural prot ect ion afforded t o Plaint iffs by virt ue of t he KAPA and KJRA aft er t he seizure and receivership, t he risk of error is subst ant ially lim it ed. The det erm inat ion of t he const it ut ionalit y of a delay is a fact - int ensive analysis, not a bright - line rule. I n light of t he Governm ent 's need t o act swift ly, t he lim it ed nat ure of CFC’s int erest , and t he procedures in place t o m inim ize t he risk of an erroneous decision, t he Court finds no due process defect in t he t im ing of CFC’s hearing t hat would have been obvious t o reasonable persons. Plaint iffs provide no well- est ablished law showing t hat a reasonable person should have known t hat t he delay here was unconst it ut ionally lengt hy under t he circum st ances show n by t he record. 3 . H e a r ing Office r Bia s Plaint iffs’ claim t hat Defendant Splichal was biased when serving as t he presiding officer t hroughout t heir adm inist rat ive proceedings has been addressed above. Based on case law cont radict ing Plaint iffs’ posit ion, Plaint iffs cannot show t hat reasonable persons should have known t hat having t he agency head serve as t he deciding officer during t he post deprivat ion proceedings violat ed clearly- est ablished law. 35 4 . La ck of D iscove r y Plaint iffs also com plain t hat alt hough t hey were perm it t ed t o depose Defendant St ork, t hey were not perm it t ed t o depose Com m issioner Thull who decided t o seize t he Bank. But Plaint iffs do not explain what reason t hey were given for not being perm it t ed t o depose Defendant Thull, what t hey hoped t o learn from t his desired discovery, or how t hey were prej udiced by not deposing Thull. Adm inist rat ive proceedings m ay conform t o t he due process requirem ent s of t he fift h am endm ent wit hout grant ing t he full panoply of pret rial discovery w eapons available t o lit igant s in federal court . Part ies t o j udicial or quasi- j udicial proceedings are not ent it led t o discovery as a m at t er of const it ut ional right . To t he cont rary, court s generally accord agencies broad discret ion in fashioning hearing procedures. Verm ont Yankee Nuclear Power Corp. v. NRDC, I nc., 435 U.S. 519, 543, 98 S.Ct . 1197, 1211, 55 L.Ed.2d 460 ( 1978) . Even where a case is rem anded for an insufficient record, t he agency should norm ally be allowed t o “ exercise it s adm inist rat ive discret ion in deciding how, in light of int ernal organizat ion considerat ions, it m ay best proceed t o develop t he needed evidence and how it s prior decision should be m odified in light of such evidence as develops.” FPC v. Transcont inent al Gas Pipe Line Corp., 423 U.S. 326, 333, 96 S.Ct . 579, 46 L.Ed.2d 533 ( 1976) . 36 I n Kansas, adm inist rat ive discovery decisions, by st at ut e, are wit hin t he discret ion of t he presiding officer, who m ay specify t he t im es during which t he part ies m ay pursue discovery and m ay issue prot ect ive orders. See K.S.A. 77- 522. A person aggrieved by a lack of discovery has a right t o pet it ion for review of an init ial order, as well as a subsequent right t o pet it ion for review of final orders. See K.S.A. § 77- 527, 77- 601 et seq. Plaint iffs do not show any law clearly est ablishing t hat due process requires adm inist rat ive hearing officers t o perm it t he part ies t o depose whom ever t hey wish or t o engage in unlim it ed discovery during adm inist rat ive proceedings. Under t he circum st ances shown by t he record, Defendant s are ent it led t o qualified im m unit y for t his and ot her discovery decisions m ade during Plaint iffs’ adm inist rat ive proceedings. “ Because neit her t he Suprem e Court nor t he Tent h Circuit has any precedent t hat would have put Defendant s on not ice t hat t heir act ions m ay have been unconst it ut ional, t hey are ent it led t o qualified im m unit y.” Collvins, 523 Fed.Appx. at 520- 21, 2013 WL 1319525, 5. 5 . D e n ia l of j u dicia l r e vie w Last ly, Plaint iffs allege t hat Defendant s denied t hem j udicial review of t he procedurally- deficient hearing. The record reveals, however, t hat Plaint iffs t wice received j udicial review – once in Sept em ber of 2008 approxim at ely a m ont h aft er t he seizure, and once aft er Com m issioner 37 Splichal’s decision on t he cross- m ot ions for sum m ary j udgm ent , which decision specifically st at ed t hat t he Bank and CFC had t he right t o pet it ion for j udicial review. Plaint iffs apparent ly com plain of t he fact t hat t he OSBC, in it s m ot ion t o dism iss Plaint iffs’ second pet it ion for review, cont ended t hat no rem edy was available. The st at e court agreed so dism issed t he pet it ions as m oot on January 30, 2013. But Plaint iffs show no clearly est ablished law t hat Defendant s allegedly violat ed by t aking such a legal posit ion. Accordingly, Defendant s are ent it led t o qualified im m unit y on each of t he claim s m ade in t his case. VI . W a ive r of D u e Pr oce ss Defendant s cont end t hroughout t heir brief t hat Plaint iffs expressly waived t heir due process right s by signing t he resolut ion, t he consent agreem ent , and t he cease and desist order. But Defendant s have not shown t hat t he waiver ext ends t o t he enforcem ent proceedings challenged in t his lawsuit . The Bank’s resolut ion consent ed t o t he cease and desist order, and waived any right t o such a not ice of charges, a hearing, defenses, findings of fact , conclusions of law, a recom m ended decision by an Adm inist rat ive Law Judge or ot her hearing officer, except ions and briefs wit h respect t o such recom m ended decision, and j udicial review under Kansas St at ut es Annot at ed § 77- 601 et seq., or any ot her challenge t o t he validit y of t he Order. 38 Dk. 15, Exh. 2. I d., p. 32. The cease and desist order it self st at ed t hat t he Bank consent ed t o issuance of t he order “ solely for t he purpose of t his proceeding,” and t hat t he Bank waived it s procedural due process right s and it s right s under t he KAPA and t he KJRA “ or any ot her challenge t o t he validit y of t he ORDER.” I d, p. 35. I t defined “ t he Order” as t he cease and desist order. I d, p. 34. The plain language appears t o waive only t he procedures t o det erm ine whet her a cease and desist order should be issued. See K.S.A. 9- 1807 ( providing for a hearing in t he lat t er event ) . Accordingly, for purposes of t his m ot ion only, t he Court finds no waiver. VI I . CFC - Re a l Pa r t y in I n t e r e st Defendant s cont end t hat CFC, as t he sole shareholder of t he Bank, is not t he real part y in int erest . Defendant s st at e t hat CFC was not a part y t o t he OSBC or FDI C’s act ions or agreem ent s, and suffered no inj ury in fact . Defendant s claim t hat “ inj ury arising solely out of harm done t o a subsidiary corporat ion is generally insufficient t o confer st anding or st at us as real part y in int erest on a parent corporat ion,” and t hat a parent corporat ion cannot pierce t he corporat e veil t o advance t he claim s of it s subsidiary. Dk. 15, p. 31- 32. CFC count ers t hat t he inj ury did not solely arise from harm done t o it s subsidiary, but t hat it was inj ured because it s ownership int erest in t he Bank effect ively ceased t o exist upon Defendant s’ t ender of t he Bank t o 39 receivership. Dk. 21, p. 31. I t adds t hat t he policy behind Rule 17( a) ’s real part y in int erest requirem ent is m et because t he only part ies harm ed by Defendant s’ seizure are j oined as Plaint iffs, so Defendant s run no risk of facing a lat er act ion from anot her part y ent it led t o recover. The court agrees. Where, as here, t he act s challenged are t he seizure, t he appoint ing of a receiver, and t he procedures by which t o do t o, CFC has sufficient ly alleged it s own inj ury, despit e t he fact t hat t it le t o t he Bank’s asset s vest ed in t he FDI C upon it s accept ance of t he appoint m ent as receiver. I T I S THEREFORE ORDERED t hat Defendant ’s m ot ion t o dism iss is grant ed. Dat ed t his 18t h day of Novem ber, 2014, at Topeka, Kansas. s/ Sam A. Crow Sam A. Crow, U.S. Dist rict Senior Judge 40

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