             Case: 14-15325    Date Filed: 08/12/2016   Page: 1 of 15


                                                            [DO NOT PUBLISH]



               IN THE UNITED STATES COURT OF APPEALS

                        FOR THE ELEVENTH CIRCUIT
                          ________________________

                                No. 14-15325
                            Non-Argument Calendar
                          ________________________

                      D.C. Docket No. 1:13-cv-22975-JEM


MARIA FERRER,
ARMANDO ALUART,

                                                             Plaintiffs-Appellants,

                                      versus

JANET YELLEN,
Chairman of the Federal Reserve,
THOMAS J. CURRY,
Comptroller of the Currency,
GALEN VETTER,
Chief Executive Officer of Rust Consulting, Inc.,
SELECT PORTFOLIO SERVICING, INC.,
U.S. BANK, N.A., et al.,

                                                            Defendants-Appellees.
                          ________________________

                   Appeal from the United States District Court
                       for the Southern District of Florida
                         ________________________

                                (August 12, 2016)
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Before HULL, MARCUS, and ROSENBAUM, Circuit Judges.

PER CURIAM:

      This case arises out of administrative enforcement actions by federal

banking agencies against various mortgage servicers, including U.S. Bank, N.A.,

following the mortgage foreclosure crisis of 2009 and 2010. These enforcement

actions led to consent orders between the federal agencies and the mortgage

servicers, which required the servicers to take action to correct their deficient

residential mortgage servicing and foreclosure practices and to provide some

compensation for borrowers injured by the deficient practices.

      Plaintiffs-Appellants Maria Ferrer and Armando Aluart (collectively,

“Plaintiffs”), represented by court-appointed counsel on appeal, are both eligible

borrowers who received some compensation as a result of the consent orders.

Believing that they had been shortchanged on the amount they were owed,

Plaintiffs filed this lawsuit, proceeding pro se throughout the district court

proceedings. The district court dismissed Plaintiffs’ claims after concluding that

12 U.S.C. § 1818(i)(1), a judicial-review provision in the Financial Institutions

Supervisory Act, which authorized the enforcement actions against the mortgage

servicers, precluded the district court from hearing and resolving Plaintiffs’ claims.

After careful review, we agree with the district court that it lacked subject-matter

jurisdiction, and we therefore affirm.


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                                                 I.

       We briefly recount some of the historical background to give context to

Plaintiffs’ specific allegations on appeal.             In April 2011, the Office of the

Comptroller of the Currency and the Board of Governors of the Federal Reserve

System1 (collectively, the “Federal Regulators”) announced consent cease-and-

desist orders (“consent orders”) against several large mortgage servicers, including

U.S. Bank, pursuant to 12 U.S.C. § 1818(b). The consent orders, in broad terms,

sought to correct unsafe and unsound practices related to residential mortgage loan

servicing and foreclosure processing and to provide some remediation for

borrowers injured by those practices.

       The consent orders required the mortgage servicers to take a number of

corrective actions, including retaining an independent consultant to conduct a

comprehensive review of foreclosure actions from 2009 and 2010. See, e.g., April

13, 2011 Consent Order against U.S. Bank (“U.S. Bank Consent Order”) (Doc. 77-

1, Exh. 1).2        Eligible borrowers—those who had a pending or completed


       1
          The former Office of Thrift Supervision was also involved in these enforcement actions,
but its functions have now been transferred to the Board of Governors and the Comptroller of the
Currency. See 12 U.S.C. § 5412.
       2
          While we normally limit our review of a grant of a motion to dismiss to the complaint
and its attachments, see Reese v. Ellis, Painter, Ratterree & Adams, LLP, 678 F.3d 1211, 1215–
16 (11th Cir. 2012), we may consider two of the documents attached to the Federal Regulators’
motion to dismiss—the consent order against U.S. Bank and its later amendment—because they
are central to Plaintiffs’ claims and their authenticity is not disputed, see Day v. Taylor, 400 F.3d
1272, 1276 (11th Cir. 2005).
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foreclosure on their primary residence during that time—could request an

independent review of their file and receive compensation identified financial

injury. This process was known as Independent Foreclosure Review (“IFR”).

       In June 2012, the Federal Regulators published the “Financial Remediation

Framework” (the “IFR Framework”) to help independent consultants recommend

remediation for financial injury identified during the IFR.3 The IFR Framework

provides examples of situations where compensation or other remediation, such as

correction of credit records, is required, and it specifies the remedies applicable to

each situation.     The servicers were to develop remediation plans, subject to

approval by the Federal Regulators, based on the recommendations of the

independent consultants.

       In February 2013, the Federal Regulators issued amendments to the consent

orders that significantly changed the remediation process. 4 The amendments were

based on agreements reached one month earlier between the Federal Regulators

and the servicers, including U.S. Bank. The participating servicers agreed to pay

$9.3 billion to eligible borrowers, including $3.6 billion in direct cash payments

and $5.7 billion in other assistance, such as loan modifications and forgiveness of

       3
         Plaintiffs attached the IFR Framework, apart from its cover page, to their amended
complaint.    The full version is available through the Federal Reserve website at
https://www.federalreserve.gov/newsevents/press/bcreg/bcreg20120621b2.pdf (last visited July
20, 2016).
       4
       Most, but not all, of the servicers subject to the original consent orders agreed to the
amendments. Servicers who did not agree to the amendments remained under the IFR process.
                                              4
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deficiency judgments. The $3.6 billion was to be paid out to eligible borrowers

from a Qualified Settlement Fund (the “Settlement Fund”) by a paying agent, Rust

Consulting, Inc.

       The amendments terminated the case-by-case IFR process and, in its place,

outlined a more streamlined process to provide remediation to eligible borrowers.

See, e.g., Amendment to April 13, 2011 Consent Order against U.S. Bank (“2013

Amendment”), Art. I, § (1) (Doc. 77-1, Exh. 2). Servicers would place eligible

borrowers into categories, based on loan-file characteristics as determined by the

Federal Regulators, id., Art. II, § (1), and Federal Regulators would develop a

distribution plan, in their sole discretion, specifying the amounts applicable to each

borrower category, id., Art. II, §§ (2) & (3). Based on the distribution plan and the

servicers’ categorization of borrowers, Rust Consulting would distribute payments

from the Settlement Fund to individual eligible borrowers. Id. Plaintiffs have

submitted with their amended complaint a table specifying the standard payout

amounts for various categories of borrowers from the Settlement Fund (the

“Settlement Fund Table”). See Amended Compl., Exh. 2 (Doc. 69 at 17).5

       Notably, the cash payments to eligible borrowers were not meant to “reflect

specific financial injury or harm that may have been suffered by borrowers


       5
         What appears to be the same table is also available through the Federal Reserve website
at https://www.federalreserve.gov/newsevents/press/bcreg/bcreg20130409a1.pdf (last visited
July 20, 2016).
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receiving payments.” 2013 Amendment at 2–3. Nor was remediation from the

Settlement Fund intended to displace any independent claims a borrower may have

against his or her servicer. See id., Art. V, § (3) (“In no event shall the Bank

request or require any borrower to execute a waiver of any claims against the Bank

(including any agent of the Bank) in connection with any payment or Foreclosure

Prevention assistance pursuant to this Amendment to the Consent Order.”).

       With this general background in mind, we turn to Plaintiffs’ specific

allegations in this case.

                                              II.

       Ferrer and Aluart are both eligible borrowers under the terms of the U.S.

Bank Consent Order and 2013 Amendment. They both received a cash payment

from Rust Consulting. They allege, however, that they received less than they

were owed under the IFR Framework and the Settlement Fund Table, which we

collectively, though loosely, refer to as the “payout plans.”6

       According to the operative amended complaint, Ferrer and U.S. Bank

reached a loan-modification agreement after U.S. Bank had filed to foreclose


       6
          While Plaintiffs exclusively referenced the IFR Framework in their allegations, the
payments they received were from the Settlement Fund after the termination and replacement of
the IFR process and, implicitly, the IFR Framework. They also attached the Settlement Fund
Table to their amended complaint. Thus, their claims appear to be based primarily on the 2013
Amendment and the Settlement Fund Table. In any case, it makes no legal difference whether
their claims are based on the IFR Framework, the Settlement Fund Table, or both. Given their
explicit references to the IFR Framework, we construe their allegations as broadly referring to
both payout plans.
                                              6
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Ferrer’s mortgage. Under the agreement, U.S. Bank promised to give Ferrer a

permanent loan modification and to withdraw the foreclosure action if she

successfully completed a six-month trial modification period.           While Ferrer

completed the trial modification period, U.S. Bank did not convert her trial

modification into a permanent one, though it did withdraw the foreclosure action.

Citing the payout plans, Ferrer claims that she was entitled to $5,000, suspension

of foreclosure, permanent loan modification, and correction of servicer and credit

records. In April 2013, Ferrer received a $2,000 check from Rust Consulting.

      For his part, Aluart alleged that U.S. Bank sold his home at a foreclosure

sale in July 2010 after he had filed for bankruptcy protection. The sale was later

rescinded by the bankruptcy court. Citing the payout plans, he claims that he was

entitled to $31,250, trial loan modification, and correction of servicer and credit

records. Aluart received a $6,000 check from Rust.

      Count I of Plaintiffs’ amended complaint alleged that the Federal Regulators

and Rust Consulting violated the Florida Deceptive and Unfair Trade Practices Act

(“FDUTPA”) by publishing the payout plans but failing to comply with their

terms. Count II alleged that all Defendants committed the offense of “civil theft.”

Count III alleged that Rust Consulting breached a fiduciary duty by failing to

comply with the payout plans. Count IV alleged that the Federal Regulators were

negligent in overseeing the distribution of cash payments from the Settlement


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Fund. For relief, Plaintiffs requested injunctive relief they claim was “mandated”

by the payout plans (such as loan modification), a declaration of wrongdoing on all

four counts, and compensatory damages in the amount of the difference between

what they received from Rust Consulting and what they claim they were owed.

      Defendants filed separate motions to dismiss, arguing, in relevant part, that

the district court lacked subject-matter jurisdiction over Plaintiffs’ claims.   In

Defendants’ view, a judicial-review provision in 12 U.S.C. § 1818, the statute

under which the U.S. Bank Consent Order and 2013 Amendment were issued,

precluded Plaintiffs from challenging any actions taken pursuant to those orders.

Specifically, § 1818(i)(1) provides that, outside of narrow circumstances, “no court

shall have jurisdiction to affect by injunction or otherwise the issuance or

enforcement of any notice or order under [§ 1818], or to review, modify, suspend,

terminate, or set aside any such notice or order.”         Plaintiffs disputed that

§ 1818(i)(1) applied, characterizing their claims as based on the payout plans

alone, which, Plaintiffs asserted, were not orders under § 1818.

      A magistrate judge prepared a report and recommendation for the district

court, concluding that § 1818(i)(1) deprived the court of jurisdiction over

Plaintiffs’ claims. The magistrate judge found that the court could not review the

U.S. Bank Consent Order, the 2013 Amendment, or the actions of Defendants

taken pursuant to either of those orders. The district court adopted the magistrate


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judge’s recommendation over Plaintiffs’ objections.                Plaintiffs now bring this

appeal, for which we appointed counsel.7

                                              III.

       Plaintiffs first argue that the district court abused its discretion by denying

their motion for appointment of counsel filed early on in the case. A magistrate

judge denied their motion, and Plaintiffs did not ask the district court to review the

order by objecting to it. On appeal, Plaintiffs contend that their case presented

exceptional circumstances warranting appointment of counsel and that the court

improperly justified the denial on a lack of funds to appoint counsel in civil cases.

       While we generally review the denial of a motion for appointment of

counsel for an abuse of discretion, Dean v. Barber, 951 F.2d 1210, 1216 (11th Cir.

1992), “where a party fails to timely challenge a magistrate’s nondispositive order

before the district court, the party waived his right to appeal those orders in this

Court,” Smith v. Sch. Bd. of Orange Cty., 487 F.3d 1361, 1365 (11th Cir. 2007),

Fed. R. Civ. P. 72(a) (objections must be filed within fourteen days of service of

the order). Cf. United States v. Schultz, 565 F.3d 1353, 1359, 1361–62 (11th Cir.

2009) (holding that we lack jurisdiction to hear appeals directly from federal

magistrate judges). Here, because Plaintiffs did not timely object to the magistrate
       7
          We note that the only remaining claims appear to be against Rust Consulting for breach
of fiduciary duty and a violation of the FDUTPA. In their response to the motions to dismiss,
Plaintiffs abandoned their civil-theft claim, which was the sole claim clearly raised against U.S.
Bank. Further, on April 11, 2016, we granted the parties’ joint motion to dismiss with prejudice
the claims against the Federal Regulators.
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judge’s order denying appointment of counsel, see Schultz, 565 F.3d at 1357–59

(holding that orders regarding representation are non-dispositive), we will not

consider the issue on appeal, see Smith, 487 F.3d at 1365.

      Plaintiffs respond that their failure to object should be excused because they

were proceeding pro se and they did not receive notice of their need to object to

the magistrate judge’s order. However, we have held that such notice is not

required for non-dispositive orders, even if it may be required for dispositive

recommendations, Schultz, 565 F.3d at 1361–62, and we have required pro se

parties to comply with the requirements of Rule 72(a), see Smith, 487 F.3d at

1365–66 (holding that a pro se litigant waived his right to appellate review of a

magistrate’s non-dispositive order by not objecting to the order before the district

court, as required by Rule 72(a)), Farrow v. West, 320 F.3d 1235, 1249 n.21 (11th

Cir. 2003) (same). Therefore, we do not consider the merits of Plaintiffs’ request

for counsel in the district court.

                                         IV.

      As for the dismissal of Plaintiffs’ amended complaint, the district court

concluded that § 1818(i)(1) prevented the court from exercising jurisdiction over

Plaintiffs’ claims. We review de novo questions of statutory interpretation, United

States v. Maupin, 520 F.3d 1304, 1306 (11th Cir. 2009), and of the subject-matter




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jurisdiction of the district court, Gupta v. McGahey, 709 F.3d 1062, 1064–65 (11th

Cir. 2013).

       Section 1818(b) gives federal banking agencies the power to initiate

administrative proceedings culminating in cease-and-desist orders against

depository institutions engaged in, or about to engage in, unsafe, unsound, or

unlawful practices. 12 U.S.C. § 1818(b)(1); Bd. of Governors of Fed. Reserve Sys.

v. MCorp. Fin., Inc., 502 U.S. 32, 38, 112 S. Ct. 459, 463 (1991). There is no

dispute that the U.S. Bank Consent Order and 2013 Amendment in this case are

orders under § 1818(b).

       Federal district courts’ ability to review or enforce cease-and-desist orders

under § 1818 is strictly limited by statute. Judicial review in the district court is

available in two situations.8 See MCorp Fin., 502 U.S. at 38, 112 S. Ct. at 463.

First, a party may seek an injunction to block enforcement of a temporary cease-

and-desist order pending completion of the related administrative proceeding. See

12 U.S.C. § 1818(c)(2). Second, federal banking agencies, in their discretion, may

apply to an appropriate district court for enforcement of a notice or order issued

under § 1818. See 12 U.S.C. § 1818(i)(1).

       Beyond these two limited situations, however, district courts lack

jurisdiction “to affect by injunction or otherwise the issuance or enforcement of

       8
          Additionally, 12 U.S.C. § 1818(h) authorizes an appropriate court of appeals to review
final orders directly on the application of an aggrieved party.
                                              11
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any notice or order under [§ 1818], or to review, modify, suspend, terminate, or set

aside any such notice or order.”9 12 U.S.C. § 1818(i)(1); see Henry v. Office of

Thrift Supervision, 43 F.3d 507, 513 (10th Cir. 1994) (“In § 1818(i) Congress . . .

explicitly preclud[ed] jurisdiction in any situation except where it had specifically

provided for a particular court to exercise jurisdiction.”). Here, it is clear that this

case does not fit into either of the two situations where district courts have been

granted jurisdiction over § 1818 orders. Accordingly, the jurisdictional bar of

§ 1818(i)(1) comes into play.

      Nevertheless, despite the “plain, preclusive language” of § 1818(i)(1),

MCorp. Fin., 502 U.S. at 39, 112 S. Ct. at 463, that provision does not appear to

prevent courts from adjudicating claims based on substantive laws solely because a

federal banking agency has taken similar or parallel actions. Cf. 2013 Amendment,

Art. V, § (3) (Doc. 77-1, Exh. 2) (“In no event shall the Bank request or require

any borrower to execute a waiver of any claims against the Bank (including any

agent of the Bank) in connection with any payment or Foreclosure Prevention
      9
          12 U.S.C. § 1818(i)(1), in its entirety, states,

          The appropriate Federal banking agency may in its discretion apply to the
      United States district court, or the United States court of any territory, within the
      jurisdiction of which the home office of the depository institution is located, for
      the enforcement of any effective and outstanding notice or order issued under this
      section or under section 1831o or 1831p-1 of this title, and such courts shall have
      jurisdiction and power to order and require compliance herewith; but except as
      otherwise provided in this section or under section 1831o or 1831p-1 of this title
      no court shall have jurisdiction to affect by injunction or otherwise the issuance or
      enforcement of any notice or order under any such section, or to review, modify,
      suspend, terminate, or set aside any such notice or order.
                                                   12
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assistance pursuant to this Amendment to the Consent Order.”). In other words, if

a plaintiff could bring an action against his or her servicer before the issuance of a

cease-and-desist order under § 1818, that plaintiff likely could bring such an action

after the issuance of such an order. See, e.g., In re JPMorgan Chase Mortg.

Modification Litig., 880 F. Supp. 2d 220, 231-34 (D. Mass. 2012) (stating that, by

enacting § 1818(i)(1), “Congress did not intend to also prohibit non-parties from

exercising their separate remedies at law”). But an order issued under § 1818

cannot be the basis for a cause of action by a non-party to the order. Cf. U.S. Bank

Consent Order, Art. XIII § (10) (Doc. 77-1, Exh. 1) (“Nothing in the Stipulation

and Consent or this Order, express or implied, shall give to any person or entity,

other than the parties hereto . . . any benefit or any legal or equitable right, remedy

or claim under the Stipulation and Consent or this Order.”); 2013 Amendment, Art.

VII § (8) (Doc. 77-1, Exh. 2) (using nearly identical language).

      Here, the district court properly concluded that it lacked jurisdiction to

address and resolve Plaintiffs’ claims because they are based on orders issued

under § 1818.     See 12 U.S.C. § 1818(i)(1).        Plaintiffs’ amended complaint

challenged the implementation and oversight of the remediation schemes arising

out of the administrative cease-and-desist proceedings initiated by the Federal

Regulators under § 1818. Specifically, Plaintiffs claimed that Defendants failed to

follow the payout plans (the IFR Framework and the Settlement Fund Table) and


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that Plaintiffs were entitled to the relief supposedly mandated by those plans.

Though Plaintiffs attempt to distinguish the payout plans from the orders issued

under § 1818, the U.S. Bank Consent Order and 2013 Amendment, the payout

plans are part and parcel of those orders. Any rights to remediation, and the

attendant responsibilities in determining the remediation owed individual

borrowers (such as classifying eligible borrowers and developing a distribution

plan), were created by the § 1818 orders; the payout plans simply specify the

amount of remediation due various categories of borrowers. In essence, Plaintiffs’

allegations amount to a claim that Defendants breached their duties under the

§ 1818 orders against U.S. Bank.

      Because Plaintiffs effectively seek enforcement of the U.S. Bank Consent

Order and 2013 Amendment through the payout plans, resolving Plaintiffs’ claims

would necessarily “affect . . . the . . . enforcement” of orders issued under § 1818,

something “no court shall have jurisdiction” to do outside of an enforcement action

by federal banking agencies. See 12 U.S.C. § 1818(i)(1). For the same reasons,

Plaintiffs also cannot use the § 1818 orders and payout plans as a basis for a

FDUTPA claim. See Newton v. Am. Debt Servs., Inc., 75 F. Supp. 3d 1048, 1058–

62 (N.D. Cal. 2014) (holding that a plaintiff could not “borrow” a § 1818 order as

predicate authority for imposing liability under a similar state statute).




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        Nor have Plaintiffs raised any claims against U.S. Bank, their former

mortgage servicer, independent of the § 1818 orders. While counsel for Plaintiffs

now suggests that, had Plaintiffs been appointed counsel in the district court, they

could have brought an independent cause of action against U.S. Bank for breach of

contract relating to the loan modification, Plaintiffs expressly abandoned such a

theory in response to U.S. Bank’s motion to dismiss, which raised that possibility.

In particular, Plaintiffs clarified that their claims against U.S. Bank were based

solely on the payout plans and not on the modification agreement. Accordingly,

we will not revive this claim on appeal even though Plaintiffs were proceeding pro

se.10

        In sum, the district court properly found that § 1818(i)(1) divested the court

of jurisdiction over Plaintiffs’ claims.

                                                V.

        For the foregoing reasons, we agree with the district court that it lacked

subject-matter jurisdiction over Plaintiffs’ amended complaint. Accordingly, the

judgment of the district court is AFFIRMED.




        10
         In addition, the district court noted that Ferrer had filed a separate lawsuit against U.S.
Bank alleging breach of contract.
                                                15
