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Fourth Corner Credit Union v. Federal Reserve Bank of Kansas City

United States Court of Appeals, Tenth Circuit

June 27, 2017

THE FOURTH CORNER CREDIT UNION, a Colorado state-chartered credit union, Plaintiff - Appellant,
v.
FEDERAL RESERVE BANK OF KANSAS CITY, Defendant-Appellee. BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, Amicus Curiae.

         Appeal from the United States District Court for the District of Colorado (D.C. No. 1:15-CV-01633-RBJ)

          Mark A. Mason, The Mason Law Firm, P.A., Mount Pleasant, South Carolina (Gabrielle Z. Lee, The Mason Law Firm, P.A. Mount Pleasant, South Carolina, with him on the briefs), for Plaintiff-Appellant.

          Scott S. Barker, Wheeler Trigg O'Donnell LLP, Denver, Colorado (N. Reid Neureiter and Benjamin I. Kapnik, Wheeler Trigg O'Donnell LLP, Denver, Colorado, with him on the brief), for Defendant-Appellee.

          Scott G. Alvarez, General Counsel; Richard M. Ashton, Deputy General Counsel; Katherine H. Wheatley, Associate General Counsel; Yvonne F. Mizusawa, Senior Counsel, Board of Governors of the Federal Reserve System, Washington, D.C., filed an amicus brief for Amici Curiae, the Board of Governors of the Federal Reserve System.

          Before MATHESON, BACHARACH, and MORITZ, Circuit Judges.

          PER CURIAM

         In this appeal, we vacate the district court's order and remand with instructions to dismiss the amended complaint without prejudice. This disposition is addressed in three opinions-one by each member of the panel. Judge Moritz would affirm the dismissal with prejudice. Judge Matheson would vacate and remand with instructions to dismiss the amended complaint without prejudice on prudential-ripeness grounds. Judge Bacharach would reverse the dismissal of the amended complaint. By remanding with instructions to dismiss the amended complaint without prejudice, our disposition effectuates the judgment of the two panel members who would allow the Fourth Corner Credit Union to proceed with its claims.

         Finally, we deny the Federal Reserve Bank of Kansas City's motion to strike the Fourth Corner Credit Union's reply-brief addenda.

          MORITZ, Circuit Judge.

         The Fourth Corner Credit Union applied for a master account from the Federal Reserve Bank of Kansas City. The Reserve Bank denied the application, effectively crippling the Credit Union's business operations. The Credit Union sought an injunction requiring the Reserve Bank to issue it a master account. The district court dismissed the action, ruling that the Credit Union's raison d'être-to provide banking services to marijuana-related businesses-would violate the Controlled Substances Act (CSA), 21 U.S.C. §§ 801-904. Because the district court correctly declined to lend its equitable power to illegal activity, I would affirm the dismissal with prejudice.[1]

         Background

         In 2012, Colorado amended its constitution to legalize a wide array of recreational marijuana activity. See Colo. Const. art. XVIII, § 16. An industry of marijuana growers and retailers sprang up to supply this new market, but they face a significant obstacle: traditional banks are wary of serving marijuana-related businesses (MRBs). Many MRBs thus operate solely in cash, a restriction that "raise[s] significant public safety concerns for customers and employees" and "make[s] it more difficult for the state and federal government to regulate and audit [MRBs]." App. 215.

         The Credit Union aims to fill this banking void. Its purpose, according to its amended complaint, is to "provide much needed banking services to compliant, licensed cannabis and hemp businesses" and to marijuana-legalization supporters. Id. at 219. But there are many hurdles for a would-be depository institution to clear. The relevant hurdle here is obtaining a master account. A master account is, put simply, a bank account for banks. It gives depository institutions access to the Federal Reserve

          System's services, including its electronic payments system. In the Credit Union's words, "Without such access, a depository institution is nothing more than a vault." Id. at 225.

         The Credit Union applied to the Federal Reserve Bank of Kansas City for a master account.[2] The Reserve Bank denied the application by letter, citing a host of concerns. In general, the Reserve Bank determined that the Credit Union simply posed too great a risk to the Federal Reserve System-in large part because of its "focus on serving [MRBs]."[3] Id. at 78.

         In response, the Credit Union filed this suit. It sought a declaratory judgment that the Credit Union is entitled to a master account and an injunction requiring the Reserve Bank to issue it one. The Credit Union asserted that the Reserve Bank is required by statute to issue a master account to every applicant, citing 12 U.S.C. § 248a. The Reserve Bank moved to dismiss the complaint, arguing that (1) the Reserve Bank retains statutory discretion to deny master-account applications; (2) the district court couldn't use its equitable power to facilitate illegal activity-namely, violations of the CSA; and (3) the Credit Union's Colorado charter is preempted and void under the Supremacy Clause because it conflicts with the CSA. In apparent response to the Reserve Bank's illegality argument, the Credit Union amended its complaint. In its amended complaint, the Credit Union repeatedly alleges that it will serve MRBs only if it's authorized to do so by law. The Credit Union then moved for summary judgment on its claim, and the Reserve Bank renewed its motion to dismiss.

         The district court granted the Reserve Bank's motion to dismiss and denied the Credit Union's motion for summary judgment. The district court didn't accept the Credit Union's allegations that it would follow the law. And based on the principle that "courts cannot use equitable powers to issue an order that would facilitate criminal activity, " App. 707, the district court concluded that it couldn't grant the Credit Union its requested injunction. The district court declined to reach the Reserve Bank's preemption and statutory discretion arguments.

         The Credit Union filed a motion for reconsideration requesting, in part, that the court decide the preemption and statutory discretion issues. The district court denied that motion. The Credit Union appeals.

         Discussion

         The Credit Union argues that the district court erred in dismissing its claim based on the Reserve Bank's illegality defense. This court reviews de novo the district court's grant of the Reserve Bank's motion to dismiss, applying the same standard as the district court. Doe v. City of Albuquerque, 667 F.3d 1111, 1118 (10th Cir. 2012). Specifically, we accept the well-pleaded allegations of the complaint as true and construe them in the light most favorable to the Credit Union. Id.

          The Reserve Bank's illegality defense is straightforward. It begins with the principle-which the Credit Union doesn't dispute-that a court won't use its equitable power to facilitate illegal conduct. See Warner Bros. Theatres, Inc. v. Cooper Found., 189 F.2d 825, 829 (10th Cir. 1951) (holding that "[a] court of equity should not permit" a party to "take advantage of an admittedly illegal arrangement"); see also Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co., 324 U.S. 806, 814 (1945) (holding that clean-hands doctrine "presupposes [a court of equity's] refusal . . . to be the 'abetter of iniquity'" (quoting Bein v. Heath, 47 U.S. 228, 247 (1848))); Cartlidge v. Rainey, 168 F.2d 841, 845 (5th Cir. 1948) ("It is well settled that equity will not lend its aid to the perpetration of criminal acts.").

         By its own allegations, the Credit Union would use the court's equitable relief to facilitate illegal activity. If given a master account, the Credit Union "intends to provide banking services to compliant state licensed cannabis and hemp businesses." App. 204. But even if these businesses are "compliant" with Colorado law, their conduct plainly violates the CSA. See 21 U.S.C. § 841(a)(1) ("[I]t shall be unlawful for any person knowingly or intentionally . . . to manufacture, distribute, or dispense, or possess with intent to manufacture, distribute, or dispense, a controlled substance.").[4] By providing banking services to these businesses, the Credit Union would-by its own admission-facilitate their illegal activity by giving them bank access that they currently lack. See App. 218 ("None of these [MRBs] have meaningful and stable access to traditional banking services. . . . The majority of MRBs are forced to operate in cash only, and to suffer the high cost of handling and safeguarding this cash."). And, critically, the Credit Union concedes that it won't be able to serve MRBs without the court's equitable relief. See Aplt. Br. 5 ("Without a master account[, the Credit Union] cannot function."). A court-ordered master account would thus serve as the linchpin for the Credit Union's facilitation of illegal conduct.

         In response to the Reserve Bank's illegality defense, the Credit Union argues that the MRBs it proposes to serve aren't violating federal law. Specifically, it asserts that "[c]onduct in full compliance with a presumptively valid state medical or recreational marijuana law is legal under state and federal law until the state law is formally invalidated." Aplt. Br. 54. But the Credit Union seemed to abandon this position at oral argument, and for good reason: the CSA, by virtue of the Supremacy Clause, is the law of the land. See U.S. Const. art. VI, cl. 2. Conduct prohibited by federal law is illegal, regardless of what Colorado law may permit. See Planned Parenthood of Kan. & Mid-Mo. v. Moser, 747 F.3d 814, 823 (10th Cir. 2014) ("[W]hen state or local law conflicts with federal law, federal law prevails."). For the same reason, I would decline the Credit Union's request to decide whether the CSA preempts Colorado law. Regardless of how we might resolve that issue, the MRBs' conduct would remain federally illegal.[5]

          The Credit Union also argues that it may legally serve MRBs pursuant to certain Executive Branch guidance documents. In 2014, then-Deputy Attorney General James Cole issued a DOJ memorandum outlining that agency's marijuana-banking enforcement priorities. But while the Cole Memorandum suggested that the DOJ may decline to prosecute banks that meet certain criteria, the Memorandum also made clear that its guidance didn't create a legal defense for violations of the CSA or certain money-laundering statutes. See App. 488 (explaining that "[t]his memorandum does not alter in any way the [DOJ's] authority to enforce federal law, including federal laws relating to marijuana, regardless of state law" and doesn't "provide[] a legal defense to a violation of federal law, including . . . violation of the CSA, the money laundering and unlicensed money transmitter statutes, or the [Bank Secrecy Act]").

         Likewise, the Treasury Department's Financial Crimes Enforcement Network ("FinCEN"), which is responsible for enforcing certain money-laundering statutes, issued its own marijuana-related guidance concurrently with the Cole Memorandum. The FinCEN Guidance purported to "clarif[y] how financial institutions can provide services to marijuana-related businesses consistent with their [anti-money laundering] obligations." App. 490. But this guidance, like the Cole Memorandum, didn't nullify the CSA or federal money-laundering statutes. See id. n.3 (noting that certain conduct encompassed by the Cole Memorandum "may merit civil or criminal enforcement of the CSA"). And the Credit Union doesn't explain how Executive Branch enforcement decisions could undermine substantive law. See Feinberg v. Comm'r of Internal Revenue, 808 F.3d 813, 816 (10th Cir. 2015) ("[I]n our constitutional order it's Congress that passes the laws, Congress that saw fit to enact 21 U.S.C. § 841, and Congress that in § 841 made the distribution of marijuana a federal crime.").

         Perhaps recognizing the gossamer-thin nature of its interpretation of federal law, the Credit Union alternatively argues that it won't serve MRBs unless doing so is legal. Specifically, it argues that its amended complaint plausibly alleges that the Credit Union intends to abide by federal law and that the district court erred in declining to presume these allegations are true. See Order, App. 709 (referring to the Credit Union's inconsistent allegations a "sleight of hand"). I agree with the district court: the Credit Union's equivocations don't allay my concern that the equitable relief it seeks will facilitate illegal activity.

         In its original complaint, the Credit Union left no doubt about its intent to serve MRBs. Indeed, the dearth of banking services for MRBs is the Credit Union's founding purpose. And the Credit Union amended its complaint to suggest otherwise only after the Reserve Bank raised its illegality defense. Of course, this court looks only to the operative complaint to assess whether the Credit Union's allegations are plausible. But that background sheds light on the amended complaint's series of seemingly inconsistent allegations. On one hand, the Credit Union repeatedly asserts its intent to serve MRBs-an illegal course of conduct. On the other hand, the Credit Union insists that it will follow the law:

- "Consistent with its state credit union charter, and in strict accordance with state and federal laws, regulations and guidance, [the Credit Union] intends to provide banking services to compliant state licensed cannabis and hemp businesses, their employees, [and] industry vendors." App. 204.[6]
- "In March 2014, [the Credit Union's founders] came together to organize a Colorado state-chartered credit union . . . and thereby provide much needed banking services to compliant, licensed cannabis and hemp businesses . . . . The plan to serve the MRB segment of its prospective field of membership would only be executed if authorized by state and federal law." Id. at 219.
- "When [the Credit Union] is granted access to the Federal Reserve payments system it will have the ability to compete . . . for the business of a newly emerging fast-growing industry. [The Credit Union] only intends to serve the potential MRB segment of its membership if authorized by state and federal law." Id. at 237.
- "[Large commercial] banks currently deposit a substantial amount of state legal cannabis money into the Federal Reserve payments system. [The Credit Union] is a putative competitor that also seeks to provide services to MRBs." Id.

         The Credit Union asserts that its promises to follow the law are plausible. And this court presumes that the amended complaint's well-pleaded factual allegations are true and construes them in the light most favorable to the Credit Union. Doe, 667 F.3d at 1118. That principle might benefit the Credit Union if it unequivocally alleged that it won't serve MRBs. But it never does.[7] Instead, the amended complaint's allegations are all conditional: if serving MRBs is illegal, then the Credit Union won't serve them. We don't owe the presumption of truth to illusory allegations. Cf. Kan. Penn Gaming, LLC v. Collins, 656 F.3d 1210, 1214 (10th Cir. 2011) (explaining that "in ruling on a motion to dismiss, a court should disregard all conclusory statements of law and consider . . . the remaining specific factual allegations") (emphasis added). The Credit Union will either serve MRBs or it won't-its allegations can't depend on the answer to a legal question. As one court explained, "There is a significant difference between pleading alternative theories of law based upon given facts and pleading alternative statements of fact to support a given principle of law." United States v. Gotti, 771 F.Supp. 535, 540 (E.D.N.Y. 1991).

         The Credit Union's promise to follow the law is particularly unworthy of credence because the amended complaint both asserts that the Credit Union plans to serve MRBs "in strict accordance with state and federal laws, regulations and guidance, " App. 204, while at the same time carefully avoiding any concessions regarding what the law actually is, see, e.g., App. 240 ("Whatever the law is, [the Credit Union] will obey.").[8]

         After setting aside the Credit Union's non-committal, conclusory allegations, the amended complaint tells a clear story. The Credit Union "intends to provide banking services to compliant state licensed cannabis and hemp businesses, their employees, [and] industry vendors." Id. at 204. The district court correctly declined to facilitate this illegality.

         In his separate opinion, Judge Bacharach suggests that the Credit Union, by seeking a declaratory judgment, implicitly promised to "abide by the [district court's] ruling" regarding the legality of serving MRBs. Opinion of Bacharach, J., 7. But the Credit Union never asked the district court to declare whether its plan to serve MRBs is legal. Instead, it sought a declaration regarding its supposed entitlement to a master account under 12 U.S.C. § 248a. See App. 50-51 ("[The Credit Union] respectfully requests this Court issue a judgment declaring that [the Reserve Bank] must grant [the Credit Union] a master account . . . pursuant to 12 U.S.C. §248a(c)(2)."). The district court took up the illegality issue only when the Reserve Bank raised it as an affirmative defense. And when the Credit Union amended its complaint in response, not even that pleading sought a declaration that serving MRBs is legal. In dismissing the amended complaint, the district court answered a question that the Credit Union never asked.

         The Credit Union's final argument is that the Reserve Bank failed to put forth evidence supporting the illegality defense. But as I've discussed, the Credit Union's own allegations establish the defense, and the district court properly granted the Reserve Bank's motion to dismiss on that basis. See Miller v. Shell Oil Co., 345 F.2d 891, 893 (10th Cir. 1965) ("If the defense appears plainly on the face of the complaint itself, the motion may be disposed of under [Rule 12(b)(6)].").

         Because I would affirm the district court's dismissal based on the illegality defense, I would not decide whether the Credit Union is entitled to a master account under 12 U.S.C. § 248a or whether federal law preempts the Credit Union's Colorado charter. And because the motion to dismiss disposes of the case, I would not address the Credit Union's argument that the district court erred in denying the Credit Union's motion for summary judgment.

         Accordingly, I would affirm the district court's dismissal of the amended complaint with prejudice.

         We should dismiss this case on ripeness grounds.

         A. The Credit Union's New Claim

         The Credit Union was formed primarily to serve MRBs. It requested a master account from the Reserve Bank to do so. The Reserve Bank denied the Credit Union's application for a master account, citing the Credit Union's "focus on serving marijuana-related businesses." Aplt. App. at 485. The Credit Union sued. The Reserve Bank again expressed its misgiving about the Credit Union's plan to serve MRBs in a motion to dismiss the original complaint.

         The Credit Union did not re-apply for a master account to alleviate the Reserve Bank's concern about MRBs, but instead just amended its complaint to allege it will serve MRBs only if doing so is legal.

         Assuming this allegation is true, as we must, it raises ripeness concerns because this case has become divorced from the factual backdrop that gave rise to the original dispute. As the Reserve Bank points out, the new Credit Union-the Credit Union that excludes MRBs from its membership until serving them becomes legal-is a "fundamentally different[] entity" than the one the Reserve Bank turned down. Aplee. Supp. Br. at 17.

         B. Ripeness

         "The ripeness doctrine aims to prevent courts from entangling themselves in abstract disagreements by avoiding premature adjudication." Awad v. Ziriax, 670 F.3d 1111, 1124 (10th Cir. 2012) (quotations omitted). "A claim is not ripe for adjudication if it rests upon contingent future events that may not occur as anticipated, or indeed may not occur at all." Texas v. United States, 523 U.S. 296, 300 (1998) (quotations omitted). Ripeness has roots "both in the jurisdictional requirement that Article III courts hear only 'cases and controversies' and in prudential considerations limiting our jurisdiction." Alto Eldorado P'ship v. Cty. of Santa Fe, 634 F.3d 1170, 1173 (10th Cir. 2011). "[E]ven in a case raising only prudential concerns, the question of ripeness may be considered on a court's own motion." Nat'l Park Hospitality Ass'n v. Dep't. of Interior, 538 U.S. 803, 808 (2003).[1]

         In assessing prudential ripeness, this court has taken guidance from Abbott Laboratories v. Gardner, 387 U.S. 136 (1967), abrogated on other grounds by Califano v. Sanders, 430 U.S. 99 (1977), which "instructs courts to assess 'both the fitness of the issues for judicial decision and the hardship to the parties of withholding court consideration.'" United States v. White, 244 F.3d 1199, 1202 (10th Cir. 2001) (quoting Abbott Labs., 387 U.S. at 149).

         1. Fitness

         "First, on fitness, we focus on whether determination of the merits turns upon strictly legal issues or requires facts that may not yet be sufficiently developed." Awad, 670 F.3d at 1124 (alterations and quotations omitted).

         The Credit Union's amended complaint reveals this case is no longer based on sufficiently developed facts.[2] In particular, the amended complaint does not and cannot tell us whether the Reserve Bank would grant a master account on the condition that the Credit Union will not serve MRBs unless doing so is legal. It cannot do so because, as the Credit Union explained to the district court, it has never approached the Reserve Bank about obtaining a master account on the terms now alleged.

         The Reserve Bank, in response to our call for supplemental briefing on ripeness, contends the Credit Union's position that it will serve MRBs only if legal is merely an assertion made "in its briefs and during oral argument." Aplee. Supp. Br. at 2. But that characterization is incorrect because it ignores that the Credit Union made this claim in its amended complaint.[3]

         If the Credit Union were to apply again based on its new "only if legal" position, the Reserve Bank may issue a master account, in which case there would be no dispute and a decision here would be only advisory. Or it might reject a master account for some other reason, in which case there may be a dispute, though different from the one that prompted this litigation. We cannot know what the facts would be, making this case premature.[4]

         Accepting the amended complaint's factual allegations as true does not obviate the ripeness problem. The sufficiency of the Credit Union's amended complaint presents a legal question, but it does not automatically follow that the case is fit to decide. Indeed, we have found claims, and sometimes entire cases, unripe at the motion-to-dismiss stage. See, e.g., S. Utah Wilderness Alliance v. Palma, 707 F.3d 1143, 1157-61 (10th Cir. 2013) (dismissing case); Salt Lake Tribune Publ'g Co., LLC v. Mgmt. Planning, Inc., 454 F.3d 1128, 1140-41 (10th Cir. 2006) (dismissing claim); see also 5B C. Wright & A. Miller, Federal Practice and Procedure: Civil § 1350 n.11 and accompanying text (3d ed., Apr. 2017 update) (discussing adjudication of ripeness issues at the pleading stage through a motion to dismiss under Rule 12(b)(1)).[5] Just because resolution of a legal question is possible, and may even be straightforward, does not mean it is ripe to decide. As the First Circuit has explained:

The notion that disputes which turn on purely legal questions are always ripe for judicial review is a myth. . . . Put bluntly, the question of fitness does not pivot solely on whether a court is capable of resolving a claim intelligently, but also involves an assessment of whether it is appropriate for the court to undertake the task. Federal courts cannot-and should not-spend their scarce resources in what amounts to shadow boxing. Thus, if a plaintiff's claim, though predominantly legal in character, depends upon future events that may never come to pass, or that may not occur in the form forecasted, then the claim is unripe.

Ernst & Young v. Depositors Econ. Prot. Corp., 45 F.3d 530, 537 (1st Cir. 1995) (citations omitted).

         A principal difference between Judge Bacharach's opinion and the conclusion reached here is the level of confidence in predicting what would happen if the Credit Union were to ask the Reserve Bank for a master account based on a commitment to serve MRBs only if legal. He thinks the Reserve Bank would almost certainly deny the application and thus concludes there is no ripeness issue. See Op. of Judge Bacharach at 32-35. I am much less certain what would happen.

         The Credit Union's plan to serve MRBs was a key reason why the Reserve Bank denied the master account application. With that justification gone, we do not know what would happen under the Credit Union's revised stance. The Reserve Bank's letter to the Credit Union explained it was denying a master account based on the Credit Union's planned MRB service and "[o]ther factors" "[t]aken together." Aplt. App. at 485.[6] The other factors included: (1) "the nature of [the Credit Union's] proposed business model"; (2) lack of capital; (3) failure to obtain insurance; and (4) its status as a "de novo depository institution." Id.

          These other factors do not mitigate the ripeness concern that the amended complaint has spawned. First, the Reserve Bank based its master account denial on these "[o]ther factors" "[t]aken together" with the MRB concern, suggesting its reasons collectively formed the basis for the denial. Id. In other words, the denial letter did not say whether any reason, standing alone, would have been enough to deny the master account. Second, the Reserve Bank identified some of these other concerns as intertwined with the Credit Union's planned service of MRBs. For example, the denial letter tied the "de novo" justification to the MRBs. See id. (explaining the de novo issue was "of particular concern given [the Credit Union's] focus on serving marijuana-related businesses").[7] Third, although the Reserve Bank's lawyer told the district court he "seriously doubt[ed]" a promise from the Credit Union not to serve MRBs would make a difference, id. at 656, this was an inconclusive prediction. As discussed below, the Reserve Bank identifies many unanswered questions in its supplemental brief about an MRB-free Credit Union, suggesting the possibility of a different outcome.

         Despite its new position that it will serve MRBs only if legal, the Credit Union argues that submitting another master account application would be futile. This ignores why the Reserve Bank denied the first application. The Credit Union's business plan was not part of its master account application, but the Credit Union's planned service of MRBs was part of the reasoning for the Reserve Bank's denial. The Credit Union has not sought a master account on the new condition that it will not serve MRBs unless legal, and its revised litigation position does not substitute for a new application to the Reserve Bank. The Credit Union has filed two complaints contemplating two very different financial entities, but it has submitted only one master account application. As the Reserve Bank points out, an MRB-free "application would raise numerous questions that have yet to be asked, much less answered." Aplee. Supp. Br. at 17.[8] Given the change in circumstances, submitting another application would hardly be an empty gesture. And even if the result is another denial, it would at least make the factual scenario created by the amended complaint real rather than hypothetical.

         In short, we do not know what would happen if the Credit Union were to seek a master account based on the new plan alleged in its amended complaint. As the Reserve Bank discerns, the Credit Union is attempting "to retroactively alter the nature of the dispute." Id. at 2. The issues the Credit Union raises are not yet fit for judicial decision.

         2. Hardship

          In the second part of our ripeness analysis, we assess the potential "hardship from withholding judicial review" by asking "whether the challenged action creates a direct and immediate dilemma for the parties." Awad, 670 F.3d at 1125 (quotations omitted). The Reserve Bank faces no hardship. As for the Credit Union, the challenged action is the Reserve Bank's denial of a master account, which the Credit Union argues should have issued within days of its initial request. Without a master account, the Credit Union contends, it cannot conduct its affairs. The Credit Union's supplemental briefing also alludes to an unspecified "irremediable adverse consequence that would flow from requiring a later challenge, " Aplt. Supp. Br. at 13, but it provides no particulars on how a dismissal on ripeness grounds would alter the status quo. See Los Alamos Study Grp. v. U.S. Dep't of Energy, 692 F.3d 1057, 1064 (10th Cir. 2012) (explaining the plaintiff bears the burden of showing ripeness).

         The Credit Union's continued inability to conduct legal business is a hardship, but the scope of the hardship is far from clear. If a dismissal based on ripeness can be said to put the Credit Union in a direct or immediate dilemma, it can do what it never bothered to try-including while this case was pending-and ask the Reserve Bank for a master account now that it does not plan to serve MRBs so long as doing so is illegal. Indeed, this course, rather than continuing with this litigation, may be the Credit Union's most efficient pathway to obtaining a master account.

         Judge Bacharach notes that "months may pass" before the Reserve Bank acts on any reapplication. Op. of Judge Bacharach at 38. But just as we do not know whether the Reserve Bank would grant a master account to an MRB-free Credit Union, we do not know how long the Reserve Bank might need to process such a request. He points out the Reserve Bank took approximately nine months to act on the Credit Union's first application, see id., but that history may not be a good guide to the future. The original delay was more than likely based on concern over the Credit Union's plan to serve MRBs. Without that complication, and with the benefit of the detailed knowledge it has garnered about the Credit Union, the Reserve Bank may find disposition of a new application relatively straightforward. The Credit Union asserts that processing normally takes just five to seven business days.

         The ripeness problem here traces back to the Credit Union's decision to amend its complaint. Under the circumstances discussed here, the Credit Union's potential hardship does not overcome the fitness concerns outlined above. See Nat'l Park Hospitality Ass'n, 538 U.S. at 814-15 (Stevens, J., concurring in the judgment) (explaining fitness "is the more important" inquiry and that hardship is "less important").[9]

          C. Conclusion

         As the Reserve Bank observes, the Credit Union "is apparently seeking court review of a decision that [the Reserve Bank] has never made and that the district court never considered." Aplee. Supp. Br. at 16. I would dismiss this appeal as premature and remand to the district court to vacate the judgment and dismiss without prejudice.

          BACHARACH, J.

         This case involves the denial of a request for a master account. A master account is required to purchase services that are indispensable for all financial institutions.[1] Without a master account, a financial institution must obtain these services through another institution serving as a "middleman." To avoid the middleman, a financial institution must obtain a master account from one of the regional Federal Reserve Banks.

         The plaintiff, The Fourth Corner Credit Union, is a credit union that requested a master account from one of the regional Federal Reserve Banks (the Federal Reserve Bank of Kansas City). This request would ordinarily be considered routine for the Federal Reserve Bank of Kansas City. But the Federal Reserve Bank of Kansas City learned from a third party that Fourth Corner wanted to service marijuana-related businesses in a state that had legalized these businesses.[2] The Federal Reserve Bank of Kansas City refused to grant the master account, prompting Fourth Corner to sue for a declaratory judgment and an injunction.

         The Federal Reserve Bank of Kansas City moved to dismiss, arguing in part that Fourth Corner would use the master account to violate federal drug laws. The district court agreed and dismissed the amended complaint.

         In my view, this ruling was erroneous for two reasons. First, the district court should have presumed that Fourth Corner would follow the law as determined by the court. Second, in the amended complaint, Fourth Corner promised to obey the law. By seeking a declaratory judgment, Fourth Corner acknowledged that the court was the sole arbiter of the law. Thus, the amended complaint indicates that Fourth Corner would obey a ruling that servicing marijuana-related businesses is illegal.[3]

         I. Standard of Review

         In this appeal, we engage in de novo review. Shimomura v. Carlson, 811 F.3d 349, 358 (10th Cir. 2015). This review requires us to determine whether the amended complaint states a plausible claim for relief. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). In gauging the claim's plausibility, we credit all of the amended complaint's well-pleaded factual allegations and view them in the light most favorable to Fourth Corner. See Colby v. Herrick, 849 F.3d 1273, 1279 (10th Cir. 2017).

         II. The Amended Complaint and the District Court's Dismissal

         In the amended complaint, Fourth Corner stated that it would service marijuana-related businesses only if authorized by federal law. Fourth Corner argued that servicing these businesses had been legalized by recent guidance from federal agencies. But in the amended complaint, Fourth Corner promised that "[w]hatever the law is, [Fourth Corner] will obey."

         Appellant's App'x at 240. Elsewhere in the amended complaint, Fourth Corner committed to obey the law, stating:

[Fourth Corner's charter] states [that Fourth Corner] is "authorized to conduct business pursuant to all of the powers conferred upon it by law, until this charter is suspended, revoked or otherwise surrendered in the manner directed by statute." [Fourth Corner] takes this grant of authority to mean it ...

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