Vegas Diamond Properties, LLC v. La Jolla Bank, FSB

An appeal in federal court is moot if the conduct to be enjoined has already occurred, regardless of whether the case raises issues of substantial public interest.

Vegas Diamond Properties, LLC and Johnson Investments, LLC appealed from an order dissolving a Temporary Restraining Order that prevented the Federal Deposit Insurance Corporation (FDIC) from selling real properties it held in receivership for La Jolla Bank. The district court dissolved the order and FDIC sold the properties at issue, while Vegas Diamond Properties and Johnson Investments disputed that the properties were never part of the estate of La Jolla Bank. The Ninth Circuit ruled that the sale of the properties made the appeal moot because the "activities sought to be enjoined have already occurred and can no longer be prevented." The Court rejected the applicability of the "capable of repetition, yet evading review" doctrine because Vegas Diamond Properties and Johnson Investments are able to bring damages actions for any alleged unlawful conduct. The Court also determined that a federal court's jurisdiction is limited by the "case-or-controversy requirement of Article III", and a case involving issues of substantial public interest must still present an actual dispute in order to overcome mootness principles. DISMISSED.