Joint Scheduling Conference Statement — Brandon Joe Williams v. United States Small Business Administration (Dkt. 20, C.D. Cal.)

Summary

The SBA and pro se plaintiff Brandon Joe Williams filed this joint scheduling conference statement on December 16, 2024 in No. 2:24-cv-09553-RGK-SK, ahead of a January 6, 2025 conference before Judge R. Gary Klausner. In the plaintiff's statement of the case, Williams argues that the SBA did not 'loan' anything but helped swap the plaintiff's own promissory notes for Federal Reserve Notes under 12 USC 412, so the notes lacked consideration under UCC 3-303(b). Williams calls the use of the word 'loaned' fraudulent and says the original notes are obligations of the United States under 18 USC 8. The parties held their Rule 26(f) conference by telephone on December 12, 2024.

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Case 2:24-cv-09553-RGK-SK   Document 20    Filed 12/16/24   Page 1 of 7 Page ID
                                       #:159



1    E. MARTIN ESTRADA
     United States Attorney
2    DAVID M. HARRIS
     Assistant United States Attorney
3    Chief, Civil Division
     JOANNE S. OSINOFF
4    Assistant United States Attorney
     Chief, Complex and Defensive Litigation Section
5    ALEXANDER L. FARRELL (Cal. Bar No. 335008)
     Assistant United States Attorney
6          Federal Building, Suite 7516
           300 North Los Angeles Street
7          Los Angeles, California 90012
           Telephone: (213) 894-5557
8          Facsimile: (213) 894-7819
           E-mail: Alexander.Farrell@usdoj.gov
9
     Attorneys for Defendant
10   United States Small Business Administration
11
                             UNITED STATES DISTRICT COURT
12
                    FOR THE CENTRAL DISTRICT OF CALIFORNIA
13
14   BRANDON JOE WILLIAMS,                     No. 2:24-cv-09553-RGK-SK
15              Plaintiff,                     JOINT SCHEDULING CONFERENCE
                                               STATEMENT
16                    v.
                                               Scheduling Conference
17   UNITED STATES SMALL                       Hearing Date: January 6, 2025
     BUSINESS ADMINISTRATION,                  Hearing Time: 9:00 a.m.
18                                             Ctrm:          850
                Defendant.
19                                             Honorable R. Gary Klausner
                                               United States District Judge
20
21
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     Case 2:24-cv-09553-RGK-SK       Document 20      Filed 12/16/24   Page 2 of 7 Page ID
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1          Defendant the United States Small Business Administration (“SBA”) and pro se
2    Plaintiff BRANDON JOE WILLIAMS® (“Plaintiff”) submit this joint scheduling
3    conference statement pursuant to the Court’s Order. Dkt. 9. Plaintiff and counsel for the
4    SBA completed the Federal Rules of Civil Procedure Rule 26(f) conference by telephone
5    on December 12, 2024.
6    I.    Plaintiff’s Statement of the Case
7          BRANDON JOE WILLIAMS®, presented by attorney-in-fact and indorser
8    Brandon Joe Williams, asserts that he had no consideration for the original promissory
9    notes that were indorsed by Brandon Joe Williams on behalf of BRANDON JOE
10   WILLIAMS®.
11         The idea that the defendant “loaned” anything to BRANDON JOE WILLIAMS®
12   is misleading. There might be a special definition that is being used, unknown to the
13   plaintiff, in relation to the transaction, but regardless... this is patently fraudulent. The
14   only possible definition for the word “loan” would be: “to take the original promissory
15   note after being issued by the issuer and either selling it for Federal Reserve Notes or
16   taking it to the Federal Reserve Discount Window and placing it up as a 'collateral
17   security' in an 'application for notes' in accordance with 12 USC 412 (Federal Reserve
18   Act Section 16). The rules of how the defendant did that (if that's what was done) is
19   found in the OC-10 (Operating Circular) Agreement (which shows how collateral
20   securities are treated, stored, exchanged, etc).”
21         Using the word “loaned” is fraudulent, because the typical definition that people
22   believe or think of when they think of that word is not what occurred. The more
23   transparent terminology would be “currency exchange.” The original promissory note is,
24   by definition “currency” and Federal Reserve Notes, which are also unconditional
25   promises to pay, are also “currency.” The swap occurred in accordance with 12 USC 412
26   (if the original notes were not simply sold).
27         So the true terminology would be that the UNITED STATES SMALL BUSINESS
28   ADMINISTRATION assisted BRANDON JOE WILLIAMS® to swap an instrument
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1    that was indorsed by Brandon Joe Williams (the “indorser”) either for cash or at the
2    Window.
3          There are two avenues of relief on this, one being equity and the other being
4    statutory. The equity version of relief would be found under the simple basic aspect of
5    “adequate consideration,” which is defined as: One which is equal, or reasonably
6    proportioned, to the value of that for which it is given. 1 Story, Eq. Jur. §§ 244-247. It is
7    clear and obvious that “adequate consideration” never occurred even in the slightest.
8          The statutory side of this would be found in UCC 3-303(b) (which is duplicated,
9    word for word, in the California Commercial Code) as: “(b) "Consideration" means any
10   consideration sufficient to support a simple contract. The drawer or maker of an
11   instrument has a defense if the instrument is issued without consideration. If an
12   instrument is issued for a promise of performance, the issuer has a defense to the extent
13   performance of the promise is due and the promise has not been performed. If an
14   instrument is issued for value as stated in subsection (a), the instrument is also issued for
15   consideration.”
16         Another statutory aspect of relief can be found in UCC 3-305(a)(1)(iii) (which is
17   duplicated, word for word, in the California Commercial Code): “(iii) fraud that induced
18   the obligor to sign the instrument with neither knowledge nor reasonable opportunity to
19   learn of its character or its essential terms.”
20         That would be the statutory side of a “fraud” claim but there is also the equity side
21   of that claim as well. The equity side would be simply that Brandon Joe Williams was
22   never informed that he would be funding the loan of BRANDON JOE WILLIAMS®
23   himself, then somehow becoming “obligated” to “repay” a “loan” that was funded by
24   him as the indorser (which is wild and obvious fraud).
25         Both original “loans” (promissory notes) are “obligations or other securities of the
26   United States” in accordance with 18 USC 8. This is proven by (and I would like there to
27   be judicial notice taken on this point) 15 USC 1501(a)(2), which says: “(a)An amount
28   shall be recorded as an obligation of the United States Government only when supported
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1    by documentary evidence of— (2)a loan agreement showing the amount and terms of
2    repayment.”
3             BRANDON JOE WILLIAMS® is seeking damages as well as a full discharge of
4    the loan. The plaintiff is willing to hear settlement talks as regards to being issued an
5    unconditional order to pay (draft) of which the indorser can indorse and tender back to
6    the UNITED STATES SMALL BUSINESS ADMINISTRATION in order to make a
7    full payment on the account in order to fully address this obligation or other security of
8    the United States. But this performance will not negate damages and should be taken
9    only as a gesture of good faith and not as a gesture of acceptance and consideration of
10   fraud.
11            The damages of this case are involved with anxiety and other emotional damages
12   associated with being fraudulently placed in a peonage situation that could have been
13   easily averted by a simple issuing of a draft and then subsequent performance on said
14   draft using a qualified and special indorsement by the indorser, then tendering that
15   unconditional order to pay back to the person entitled to enforce the instrument to be
16   applied as a payment (meaning, to settle the account using Fedwire). Another aspect of
17   the damages is the fact that the full value, including any interest, associated with the
18   original notes, was all stolen from the plaintiff and indorser. Both the plaintiff and
19   indorser should have access to and consideration for those valuable unconditional
20   promises to pay. This claim was PARTIALLY exhausted by the original deposits that
21   occurred by the SBA, but the value of the interest is also claimed by the plaintiff and
22   indorser (then now there are additional damages as well as per the pleadings, above and
23   beyond all that).
24   II.      The SBA’s Statement of the Case
25            The Complaint asserts various claims attempting to extinguish Plaintiff’s
26   obligations under a small business loan, known as an Economic Injury Disaster Loan,
27   that he received from the SBA during the COVID-19 pandemic. The Complaint alleges
28   Plaintiff was approved for an EIDL in an original amount of $59,000 (the “Loan”). For
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1    the Loan in the original amount, he signed a promissory note. Plaintiff then applied and
2    modified the Loan to increase the total amount to $198,700. In essence, Plaintiff
3    borrowed and received money pursuant to an SBA program, and he has then refused to
4    pay the loans back, suing the SBA and arguing he should not be held responsible for
5    doing so. The SBA’s position is that the Complaint fails to state any actionable legal
6    claim against the SBA, and that there is no subject matter jurisdiction to adjudicate
7    Plaintiff’s theories.
8    III.   Plaintiff’s Statement on the Legal Issues
9           Due to the commercial nature of this suit, as well as lack of any Federal question
10   (primarily based on the California Commercial Code), this case should be remanded
11   back to State of California court.
12   IV.    The SBA’s Statement on the Legal Issues
13          Plaintiff’s Complaint contains a variety of claims against the SBA including
14   breach of contract, breach of fiduciary duty, “currency” cause of action, contract fraud,
15   conversion, unjust enrichment, violation of California Business and Professions Code §
16   17200, et seq., violation of California Penal Code §§ 496, 236.1, 487, and criminal
17   violation of California Corporations Code § 25541. Plaintiff derives most of the
18   allegations in his Complaint from sections of the Model Uniform Commercial Code
19   (UCC).
20          As explained in its pending motion to dismiss [Dkt. 8], the SBA contends that
21   many defenses bar Plaintiff’s claims against the SBA here, including that Plaintiff’s
22   claims are barred by the doctrine of sovereign immunity, the Federal Tort Claims Act’s
23   (“FTCA”) jurisdictional limitations on tort claims, and Plaintiff has failed to state a
24   claim on which relief may be granted.
25          The SBA’s Motion to Dismiss is currently noticed to be heard on December 23,
26   2024. Dkt. 8. The SBA contends that it should be dismissed from this lawsuit with
27   prejudice based on the arguments set forth in its Motion.
28
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     Case 2:24-cv-09553-RGK-SK      Document 20      Filed 12/16/24   Page 6 of 7 Page ID
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1    V.    Plaintiff’s Statement on Discovery
2          Both BRANDON JOE WILLIAMS® and Brandon Joe Williams completely
3    understand that discovery is not to be used as a “fishing expedition.” Also, the plaintiff
4    believes that, due to the primarily commerical code aspect of this situation, it should
5    proceed in State court and not in Federal court. But, with that said, the ONLY aspects of
6    discovery that are needed are simply two things to start:
7          1.      Evidence proving: was this currency exchange funded by selling the
8    original notes for Federal Reserve Notes or were the notes swapped at the Federal
9    Reserve Discount Window in accordance with 12 USC 412? (essentially: “how was this
10   'loan' funded?”)
11         2.      Please produce both original notes into the court as evidence. If the
12   originals are not presented, Brandon Joe Williams will become the new person entitled
13   to enforce the instruments in accordance with UCC 3-309(a)(3) (which is duplicated,
14   word for word, in the California Commercial Code). The originals, if they were swapped
15   at the Federal Reserve Discount Window, should contain a stamped qualified and special
16   indorsement that most likely looks something like this:
17                                      Without recourse
18                                    Pay to the order of:
19                       United States Small Business Administration
20                          By: [signature of person who indorsed]
21              [Name of person who indorsed] – [Title of person who indorsed]
22   VI.   The SBA’s Statement on Discovery and Dispositive Motions
23         The SBA contends that it should be dismissed from this lawsuit with prejudice
24   based on the arguments set forth in its Motion to Dismiss. Should any claim continue,
25   however, the SBA contends relatively minimal discovery (if any) would likely be
26   needed, as the claims lack merit and are essentially premised on deficient legal
27   arguments regarding the significance of the written Loan documentation. If any of the
28   claims survive past the pleading stage, the claims could be decided as a matter of law.
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     Case 2:24-cv-09553-RGK-SK       Document 20      Filed 12/16/24   Page 7 of 7 Page ID
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1    The SBA thus anticipates filing a motion for summary judgment if any of the claims
2    survive the pleading stage—which they should not.
3     Dated: December 16, 2024              Respectfully submitted,
4                                           E. MARTIN ESTRADA
                                            United States Attorney
5                                           DAVID M. HARRIS
                                            Assistant United States Attorney
6                                           Chief, Civil Division
                                            JOANNE S. OSINOFF
7                                           Assistant United States Attorney
                                            Chief, Complex and Defensive Litigation Section
8
9
                                               /s/ Alexander L. Farrell
10                                          ALEXANDER L. FARRELL
                                            Assistant United States Attorney
11
                                            Attorneys for Defendant United States Small
12                                          Business Administration
13
14    Dated: December 12, 2024              Respectfully submitted,
15
                                            BRANDON JOE WILLIAMS®
16
17
                                            By: /s/ Brandon Joe Williams, agent
18                                          PLAINTIFF BRANDON JOE WILLIAMS®
19
                                  Local Rule 5-4.3.4 Attestation
20
           Pursuant to Local Rule 5-4.3.4(a)(2)(i), the below e-filing attorney attests that all
21
     other signatories listed, and on whose behalf the filing is submitted, concur in the filing’s
22
     content and have authorized the filing.
23
24
     Dated: December 16, 2024                           /s/ Alexander L. Farrell
25
                                                   ALEXANDER L. FARRELL
26                                                 Assistant United States Attorney
27
28
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