United States District Court, D. Nebraska
MEMORANDUM AND ORDER
M. Gerrard United States District Judge.
matter is before the Court on the plaintiffs' motion
(filing 12) for a temporary restraining order, preliminary
injunction, and permanent injunction. That motion will be
deciding whether to issue a temporary restraining order or
preliminary injunction, the Court weighs the four
Dataphase factors: (1) the threat of irreparable
harm to the movant; (2) the state of the balance between this
harm and the injury that granting the injunction will inflict
on other parties; (3) the probability that the movant will
succeed on the merits; and (4) the public interest.
Johnson v. Minneapolis Park & Recreation Bd.,
729 F.3d 1094, 1098 (8th Cir. 2013); (citing Dataphase
Sys., Inc. v. C L Sys., Inc., 640 F.2d 109, 114 (8th
Cir. 1981) (en banc)).
preliminary injunction is an extraordinary remedy, and the
movant bears the burden of establishing its propriety.
Roudachevski v. All-Am. Care Centers, Inc., 648 F.3d
701, 705 (8th Cir. 2011); see also Winter v. Natural
Res. Def. Council, Inc., 555 U.S. 7, 20 (2008). In
deciding whether to grant a preliminary injunction,
likelihood of success on the merits is the most significant
factor. Laclede Gas Co. v. St. Charles Cnty., 713
F.3d 413, 419-20 (8th Cir. 2013). A party seeking injunctive
relief need not necessarily show a greater than 50 percent
likelihood that it will prevail on the merits. Planned
Parenthood Minnesota, North Dakota, South Dakota v.
Rounds, 530 F.3d 724, 731 (8th Cir. 2008). But the
absence of a likelihood of success on the merits strongly
suggests that preliminary injunctive relief should be denied.
Barrett v. Claycomb, 705 F.3d 315, 320 (8th Cir.
Court's decision to deny the plaintiffs' motion will
be based on its finding that the plaintiffs do not have any
likelihood of success on the merits of their complaint. That
conclusion will be easier to understand after a brief
recitation of the facts as they appear, incompletely and
somewhat confusingly, from the plaintiffs' filings.
point, apparently in 2003, Wells Fargo loaned the
plaintiffs $178, 589. Filing 1-1 at 3-4; filing 10 at 2. The
loan seems to have been secured by residential real property
in Omaha, Nebraska. Seefiling 12. But, the
plaintiffs allege, they discovered on July 17, 2016 that
Wells Fargo had defrauded them. Filing 1-1 at 4. After that,
however, the plaintiffs contend- and have presented some
evidence-that as of September 19, the loan (or, at least,
a loan) was paid off. Filing 12 at 5-8. That was
apparently accomplished by two large lump sum payments,
totaling $99, 000, made on September 16 and 17. Filing 12 at
7. But the plaintiffs also contend that just a few days
later, they sent a number of documents to Wells Fargo
purporting to effectively cancel the loan and rescind a trust
deed that was, presumably, securing the indebtedness.
Seefiling 12 at 11-16.
plaintiffs filed this case on February 6, 2017. Filing 1-1 at
1. Generally summarized, the plaintiffs accuse Wells Fargo of
breach of contract, fraud, racketeering, usury, and violation
of the Truth in Lending Act (TILA), 15 U.S.C. § 1601
et seq.Filing 1-1 at 1-7. And then, on March 30,
2017, the plaintiffs were sent a notice of default by a
successor trustee to a trust deed for the property, stating
that they were in default on a promissory note held by Wells
Fargo, and that the property would be sold to satisfy the
debt. Filing 12 at 17. The plaintiffs represent that a
foreclosure auction has been scheduled for June 19. Filing 12
at 4. That is what they seek to enjoin. Seefiling 12
primary problem is that, from a review of the plaintiffs'
complaint, the Court finds no basis to conclude that the
plaintiffs have any likelihood of success on the merits of
their case. The complaint is not premised on any theory
relating to the supposed satisfaction of their loan. Rather,
the central assertion underpinning all of their theories of
recovery seems to be that Wells Fargo did not lend
"lawful money of the United States for the full value of
the loan" because it loaned "beyond its
customers' deposits" and the checks written
"were not backed by or redeemable in Federal Reserve
Notes, coins or lawful money of the United States for their
full face value." Filing 1-1 at 3-4. The "only
consideration" for the loan, the plaintiffs say, was a
"book entry demand deposit" that Wells Fargo
created. Filing 1-1 at 4. Wells Fargo, they allege,
"merely transferred some book entries and never intended
to redeem this check in lawful money of the United
States." Filing 1-1 at 4.
Court has seen similar theories before. See In
re Anthony, 481 B.R. 602, 617 (D. Neb. 2012). The
plaintiffs' particular permutation is commonly referred
to as a "vapor money" or an "unlawful
money" claim, and has been uniformly rejected by every
court to consider it. See, Tonea v. Bank of Am.,
N.A., 6 F.Supp.3d 1331, 1344-45 (N.D.Ga. 2014);
Gallant v. Deutsche Bank Nat. Trust Co., 766
F.Supp.2d 714, 721-22 (W.D. Va. 2011) (collecting cases);
McLaughlin v. CitiMortgage, Inc., 726 F.Supp.2d 201,
212-14 (D. Conn. 2010) (collecting cases); see also,
e.g., Allah-Bey v. Roberts, 668 F.App'x
419, 420 (3d Cir. 2016); Moser v. Citimortgage,
Inc., No. 1:12-CV-1258, 2013 WL 4519346, at *2 (M.D.
N.C. Aug. 26, 2013) (collecting cases); Blake v. Irwin
Mortg., No. CV-10-2435, 2011 WL 98538, at *2 (D. Ariz.
Jan. 12, 2011) (collecting cases); Barnes v. Citigroup
Inc., No. 4:10-CV-620, 2010 WL 2557508, at *2 (E.D. Mo.
June 15, 2010) (collecting cases); Lawrence v. Thornburg
Mortg. Home Loans, Inc., No. 1:09-CV-3356, 2010 WL
11433295, at *4 (N.D.Ga. Jan. 12, 2010), aff'd,
624 F.App'x 721 (11th Cir. 2015), and aff'd,
624 F.App'x 721 (11th Cir. 2015) (collecting cases);
Rodriguez v. Summit Lending Sols., Inc., No.
09-CV-773, 2009 WL 1936795, at *2 (S.D. Cal. July 7, 2009);
Alejo v. Mozilo, No. CV 09-680, 2009 WL 692001, at
*3 (C.D. Cal. Mar. 16, 2009); Frances Kenny Family Trust
v. World Sav. Bank FSB, No. C 04-03724, 2005 WL 106792,
at *5 (N.D. Cal. Jan. 19, 2005) (collecting cases); Thiel
v. First Fed. Sav. & Loan Ass'n of Marion, 646
F.Supp. 592, 596 (N.D. Ind. 1986).
Reasoning on the most fundamental level, a level which
requires more common sense than legal acumen, plaintiffs'
theory is absurd. A check issued by a mortgagee need not be
"legal tender" for the loan to be valid. Far from
suggesting any fraudulent conduct, the drafts issued by the
[creditor] in this case accomplished the only conceivable
purpose of the transaction: they allowed [the buyer] to buy
the properties at issue. . . . Thus, while dollar bills and
coins have been declared by Congress as legal tender, and so
can be used to pay any debt, not all debts need be paid in
legal tender if the parties agree.
Thiel, 646 F.Supp. at 596. Pro se litigants have, in
fact, even been sanctioned for pursuing frivolous litigation
premised on such reasoning. Id. at 596-98.
different tack taken by the plaintiffs' motion for
injunctive relief- that the loan has been paid-fares little
better. To begin with, it bears no real resemblance to the
claim presented in the complaint, and the Court is
unconvinced that injunctive relief can be premised on what is
essentially a different claim than the one presented by the
pleadings. But beyond that, the record is incomplete with
respect to the actual sequence of transactions leading to the
alleged foreclosure. The plaintiffs have provided some
documents, but not enough to explain, for instance, why they
sought to cancel a loan that had supposedly been satisfied,
or why they would have paid off a loan that they believed at
the time, according to their own allegations, to be
fraudulently issued. The documents that have been provided
are just as consistent with a ...