Free Motion to Dismiss - Rule 12(b)(1) - District Court of Federal Claims - federal

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DEFENDANT'S

APPENDIX

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APPENDIX Stovall v. A~m Vem~eman. M. Secretary. Depamnent Am'iculture, No. 04-319(RMC) of Order, (D.D.C. January 24, 2005) ........................................... Stovall v. AnnM. Venneman. Secretary. Departmentof A~oTiculture, No. 04-319(RMC) Memorandum Opinion, (D.D.C. January 24, 2005) .............................

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UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

MICHAEL W. STOVALL, Plaintiff, Civil Action No, 04-319 (RMC) ANNM. VENEMAN, Secretary, Department Agriculture, et al., of Defendants.

ORDER For the reasons stated in the Court's memorandum opinion, the complaint and allegations arising under the Equal Credit Opportunity Act and the United States and Alabama Constitutions are DISMISSED. complaint allegations relating to the alleged breach of contract The are TRANSFERRED to the United States Court of Federal Claims. SO ORDERED.

DATE:January 24, 2005.

/s/ ROSEMARY M. COLLYER United States Dislyict Judge

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UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

MICHAEL W. STOVALL, Plaintiff, Civil Action No. 04-319 (RMC) ANNM. VENEMAN, Secretary, Department Agriculture, et aL, of Defendants.

MEMORANDUM OPINION Michael W.Stovall, an African-American fainter residing in AIabama,sues the Farm Service Agency("FSA"), an agency within the U.S. Departmentof Agriculture ("USDA"),and ~ individual FSAemployees for race discrimination. The Defendantshave filed a motion to dismiss, whichMr. Stovall opposes. The Court finds that his claims under the Equal Credit Opportunity Act are time-bar~ed, his constitutional clafins are precluded by the doctrine of sovereign immunity,and his contract claim must be presented to the Court of FederaI Claims. BACKGROUND In 1993, the FSAsupervisor in LawrenceCounty, Alabam~ denied Michael Stovall, a lifelong fam~er, an application for a farm ownershiploan.: Later, in 1994, Mr. Stovall received

~ Plaintiffbrings suit against Richard Knouff, Kendall Faust, Carolyn Cooksie, and Clarence J. "Sam"Snyder iIi. The First Amended Complaint misidentifies three defendants as Richard "KnofP'(rather than Knouff), as "Kenneth"Foust (rather than Kendall), and as Snyder (rather than Clarence). 2 The facts are taken from the Amended Complaint and Plaintiff's Opposition to Defendants' Motion to Dismiss Plaintiff's Responseand Brief in

First Amended Complaint.

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an application and submitted a request for a $200,000 farm ownership loan and a $60,000 farm operating loan.3 Theseloan applications were denied.4 After Mr. Stovall appealed these denials, the 5 Lawrence County FSAsupervisor approved his operating loan in November 1994. After failing in subsequentattempts to secure additional loans, Mr. Stovall filed a complaint with the USDA Office of Civil Rights ("OCR")in January 1996, charging FSAwith race discrimination. OCR ruled in Mr. Stovall's favor, finding that FSAdiscriminated on the basis of race whenit denied or delayed his farm ownershiploan in 1994and his farm operating loan in 1995. Mr. Stovall and OCR settled his administrative complaint in January 1998 and memorializedthat settlement in a "Resolution Agreement."Underthe temas of the agreement, Mr. Stovall waived any rights against USDA USDA and employees arising from his administrative complaint and received $145,000 in compensatory damages, discharge of his debt to FSA, reasonable attorney's fees and costs, priority consideration on future applications, and other relief. ha March1998, Mr. Stovall again applied for a farm ownership loan and a farm operating loan. This time he was assisted by two individuals in the FSAnational office, Defendants

3 Under the Consolidated Famaand Rural DevelopmentAct, 7 U.S.C. § 1921 etseq., FSAis authorized to makeloans to farmers whocannot obtain credit from commercial institutions. "Farmownership"loans assist farmers in buying or improvingfarm proper~, 7 C.F.R. § 1943.2, and "operating" loans provide credit and management assistance to help farmers run their famas, 7 C.F.R. § 1941.2. Until 1999, decisions to approve or deny applications for benefits were madeby a combination of farmers elected to local committees and USDA staff. During that period, African-American farrners "complainedthat county officials [] exercised their powerin a racially discriminatory manner,resulting in delayed processing or denial of applications for credit and benefits by African-American famaers not experienced by ~vhite farmers whoare similarly situated." Pigford v. Glicl~Tnan, 206 F.3d 1212, 1214(D.C. Cir. 2000). Mr. Stovai1 asserts that these loan applications were denied at least three times. s Mr. StovalI contends that "[d]espite the approval, [he] did not receive the loan proceeds until March1995." Amend.Compl.'~[ 12.
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Carolyn Cooksie and Clarence Snyder. Dissatisfied with FSA'sresponsiveness, Mr. Stovall filed two additional discrimination complaints. In response to these complaints, OCR sent Mr. Snyder to Alabamato help ensure that Mr. Stovall's applications were properly processed. These

applications were approved in March1998 and the funds were disbursed in November 1998. Mr. Stovall then purchased farm land from FSAinventory. A year later, in April 1999, Mr. Stovall sought additional FSAfunding to build two chicken houses. After consulting with Ms. Cooksie, FSAapproved an additional $35,000 in loans in December1999. However, after a meeting involving the building contractor and Defendant Richard Knouffof the local FSAoffice, it becameapparent that consta'uction of the two chicken houses would require more funds. Mr. Stovall asked Mr. Knouff if FSA would provide the necessary funds but was informed that he did not qualify for additional loans. Mr. Snyder helped Mr. Stovall to develop a Farmand Home Plan to assess the comroercial viability of the chicken houses. Accordingto Mr. Stovall, the Fmrnand Home Plan did not demonstrate adequate cash flow and Mr. Knouffagainnotified Mr. Stovall in October 2001 that FSAcould not consider additional loans or loan restructuring. Mr. Stovall initiated this lawsuit in January 2004against USDA, FSA,and the named FSAemployees their individual capacities. In ltis Amended in Complaint,Mr. Stovall asserts claims under the Equal Credit Opportunity Act, the United States Constitution, the Alabama Constitution, and for breach of contract. In his opposition to the Defendants' motion to dismiss, Mr. Stovall droppedcertain claims and "nowonly seek[s] recovery for violations of his rights under the Equal Protection and Due Process clauses of the Fifth Alnendment,violations of the Equal Credit and Opportunity Act ("ECOA"), Alabama constitutional tort and breach of contract." Pltf.'s Opp.711.

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LEGAL STANDARDS Federal courts are courts of limited jurisdiction. Kokkonen Guardian v. Life hrs. Co. of Am., 511 U.S. 375,377(1994) (a cause is presumed lie outside the court's limited jurisdiction to and the burdenof establishing the contrary rests uponthe party asserting jurisdiction). Pursuant to Federal Rule of Civil Procedure 12(b)(1), a federal court must dismiss if it lacks subject-matter jurisdiction to hear and decide the dispute. FED.R. Cir. P. 12(b)(1). To avoid dismissal, subjectmatter jurisdiction must haveexisted on the date that the lawsuit was filed. Rosav. ResolutionTrust Corp., 938 F.2d 383,392n.12 (3d Cir.1991). The plaintiffbears the burden of establishing that the court has subject-matter jurisdiction. Rasul v. Bush, 215 F. Supp. 2d 55, 61 (D.D.C. 2002).

Nevertheless, the complaintmust be construed liberally and a plaintiffshould receive the benefit of all favorable inferences that can be drawn fi'om the alleged facts. EEOC St. Francis Xm,ier v. PatvchialSch., 117 F.3d 621,624 (D.C. Cir. 1997). Thecometalso must dismiss a complaintif the plaintiffhas failed "to state a claim upon which relief can be granted." FtSD. R. C~v. P. 12(b)(6). A motion to dismiss under 12(b)(6) demands tbat a court assess the legal sufficiency of a complaint. Browning Clinton, 292 v. F.3d 235, 242 (D.C. Cir. 2002). Dismissal is only appropriate if it appears beyonddoubt that no set of facts proffered in support of plaintiffs claim wouldentitle him to relief. Kingman Park Civic

Ass'n v. Williams, 348 F.3d 1033, 1040 (D.C. Cir. 2003); Haynesworthv. Miller, 820 F.2d 1245, 1254 (D.C. Cir.1987). .4aNALYSIS Mr. Stovall alleges that DefendantsCooksie, Snyder, Faust, and Knouff"collectively and intentionally orchestrated this ploy" -- a Farmand Home Plan that showed cash flow for Mr. no

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Stovall -- "to ensure that [he] could not farmand wouldeffectively be out of business." Pltf.'s Opp. '][ 16. Heasserts that racial animuscontributed to the delay in receiving his loans, whichresulted in lowercrop yields. See id. '~I 17 ("Theloans received weretoo little and too late, all becausePlaintiff is black."). A. Equal Credit OpportuniO~Act Claims

The Equal Credit Opportunity Act ("ECOA") makes it "unlawful for a creditor discriminate against any applicant with respect to any aspect of a credit transaction.., on the basis of race, color, religion, national origin, sex, or marital status." 15 U.S.C. § 1691(a). BecauseFSA extends credit, the ECOA applies to its activities. See Maysv. BuckeyeRural Elec. Coop., h~c., 277 F.3d 873,876(6th Cir. 2002) (an entity that pen-nits delay of paymentor to purchase property defer paymentis a"creditor" within the meaningof the ECOA); Lewis v. Glickman, 104 F. Supp. 2d 13 t 1, 1319 (D. Kan. 2000) (FSAis a creditor within the meaningof the ECOA). ECOA The creates a private right of action against creditors, including the United States, whoviolate its antidiscrimination provisions. Miller v. Am. Express Co., 688 F.2d 1235, 1237 (9th Cir. 1982) (ECOA creates a private right of action for declm'atory and equitable relief and for actual and punitive damages); see Moorev. Dep't of Agric., 55 F.3d 991,994 (5th Cir. 1995) (reading the ECOA include a broad waiver of governmental immunity). Creditors whodiscriminate are "liable to the aggrievedapplicant for any actual damages,"15 U.S.C. § 1691e(a), and for appropriate equitable and declaratory relief, 15 U.S.C. § 1691e(c). Thestatute of limitations for bringing a discrimination claim tinder the ECOA two is years from the date of the alleged violation. 15 U.S.C. § 1691e(f); Mays, 277 F.3d at 879-80; Pigford, 206 F.3d at 1214. Mr. Stovall's complaint is based uponevents that occur~'edbetween1999

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and 2001.6Mr. Stovall filed his initial complaintin January 2004. Having failed to file suit within two years of the alleged discrimination, his claims under the ECOA time-barred and must be are dismissed. Mr. Stovall argues that "Congresspassed legislation in 1999 that had the effect of waiving the ECOA's two-year statute of limitations... , extend[ing it] to fourteen years ....

Pltf.'s Opp.~l 20. Mr. StovaI1 misconceivesthe effect of this legislation. Congressretroactively extended the limitations period for certain claims under the ECOA. SeeMients v. United States, 50 Fed. C1. 665,669-70 (2001) (examining the extension of the limitations period under ECOA). extendedthe jurisdiction of the district courts to adjudicate an other~vise-untimelycomplaintif the complaint was filed by October 21,2000 and was based upon "a nonemployment related complaint that was filed with the Department Agriculture before July I, 1997and alleges discrimination at of any time during the period beginning on January 1, 1981 and ending December 1996." The Act 31, of Oct. 21, t998, Pub. L. No. 105-277, § 101(a), 112 Stat. 2681-30(codified as a note to 7 U.S.C. § 2279 (2000)). Mr. Stovall filed his initial complaintin January 2004-- moretban three years too late. Even if he had timely filed, Congressdid not extend the limitations period for the type of claims alleged in Mr. Stovall's complaint. Thelegislation allowedcivil suits by those whohad filed administrative complaints concerning discrimination that occurred between January 1, 1981 and December3t, 1996. Mr. Stovall's ECOA claims are based mainly upon events that occurred

6 Thelast event that maybe relevant to the statute of limitations calculation is October 2001. See Amend.Cmnpl.'~124 ("In October 2001, Defendant [Mr. Knouff] sent [Mr. Stovall] notice stating that the FSA could not consider additional loans or restracturing because of the nonfeasability of Plaintiffs revised Farmand Home Plan and because he had reached the maximum limits of loan feasibility."). -6-

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between 1999 and 2001 and are not eligible. Those claims that are argnably eligible -- stemming from events that occurred between 1993 and 1996 -- were resolved whenhe signed the Resolution Agreement 1998 and he is foreclosed from initiating a newlawsuit now. in B. Constitutional Claims

Mr. Stovall raises additional constitutional claims, alleging that his rights underthe Due Process and Equal Protection clauses of the United States Constitution and his "right to equality" under the AlabamaConstitution have been violated] Constitutional claims for money damages against federal agencies are claims against the United States. Clark v. Libra#y of Cong., 750 F.2d 89, 103-104(D.C. Cir. 1984); Kline v. Republic of El Salvador, 603 F. Supp. 1313, 1316 (D.D.C. 1984). And,the United States can be stied only to the extent that it consents to suit. See United States v. Mitchell, 445 U.S. 535, 538 (1980) ("It is elementary that the United States, sovereign, is immune fi'om suit save as it consents to be sued.., and the terms of its consent to be sued in any court define that court's jurisdiction to entertain the suit.") (internal quotation marksand brackets onritted). The D.C. Circuit has "recognized the well-established rule that sovereign immunity bars suits for money damages against officials in their official capacity, absent a specific waiverby the government." Wardv. Kennard, 133 F. Supp. 2d 54, 59 (D.D.C. 2000) (citing Clark, 750 F.2d at 103). The UnitedStates has not waivedits sovereignimmunity constitutional torts. See Kline, for 603 F. Supp. at 1317 ("the FederaITort Claims Act does not waive sovereign immunitywith respect v Mr. Stovall initially brought this canse of action under the Fourteenth Amendment. See

Cmnpl. ~130. The Fourteenth Amendment does not apply to the federal government. However, the Due Process Clause of the Fifth Amendment applies to the federal governmentand the Supreme Court has interpreted that clause to include a guarantee of equal protection. Boiling v. Sharpe, 347 U.S. 497, 498-99 (1954). The Court analyzes the claim under the Fifth Amendment. -7-

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to constitutional torts"); Bitwbaum United States, 588 F.2d 319, 327-28 (2d Cir. 1978) (same). v. Accordingly, the constitutional claims - whether arising under the U.S. Constitution or the

~ Constitution of the State of Alabama must be dismissed. C. Breach of the 1998 Resolution Agreement

The Amended Complaint makesit clear that Mr. Stovall is also advancing a claim for breach of the 1998 Resolution Agreement. Compl. ~l'][ 43, 44. This Court does not have jurisdiction over this claim because Mr. StovaI1 is seeking damagesin excess of $10,000Y The Tucker Act, 28 U.S.C. § 1346(a)(2), waives the sovereign immunity the United of States for contract claims, UnitedStates v. Mitchell, 463 U.S. 206, 215 (1983), and provides that the district courts share original jurisdiction with the Court of Federal Claimsover any civil action or claim against the United States, not exceeding $10,000in amount, founded either upon the Constitution, or any Act of Congress, or any regulation of an executive department, or uponany express or implied contract with the United States, or for liquidated or unliquidated damages in cases not sounding tort, except that the district courts shall not have in jurisdiction over any civil action or claim against the UnitedStates founded upon any express or implied contract with the United States not sounding in tort which are subject to sections 8(g)(1) and 10(a)(1), [41 § § 607(g)(I ), 609(a)(1)], of the Contract Disputes Act 28 U.S.C. § 1346(a)(2). Aplain reading of this provision indicates that district courts do not jurisdiction over contractual claims exceeding $10,000. Rather, such claims nmst be brought in the Court of FederaI Claims. Waters v. Rumsfeld, 320 F.3d 265,270(D.C. Cir. 2003) (under the "(Big)

~ Accord McMillian v. Mom'oe County, 520 U.S. 78 l, 788 (1997) (discussing Alabama sovereign immunityprovision and immunity state officials from suit). of ~ The initial complaint sought $20 million in damages. Compl. at 16. The Amended Complaintstates that Mr. Stovall "has suffered almost incalculable pecuniary and non-pecuniary damages." Am. Compl. ~[ 27. -8-

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Tucker Act," claims in excess of the $10,000 jurisdictional jurisdiction of the Court of Claims).

ceiling are within the exclusive

A claim for breach of the 1998 Resolution Agreement must be brought in the Court of Federal Claims because, "under the Tucker Act...[,] a settlement agreement is considered a

contract," Sf~affer v. Veneman,325 F.3d 370, 372 (D.C. Cir. 2003), and "jurisdiction to decide whether the Departmentbreached the settlement agreementlies exclusively in the Court of Federal Claims." Brow~tv. Ut~itedStates, 389 F.3d 1296, 1297 (D.C. Cir. 2004). Mr. Stovall nevertheless asks the Court to "assert ancillary jurisdiction" over his breach-of-contract claims becauseit would be in the interest of judicial efficiency. Pltf.'s Opp. '~1 23. Becausehis other claims are not justiciable, the breach-of-contract claim is not "ancillary" to any claim remainingbefore this Court and must be transferred. Kolclcone~,511 U.S. at 380 (ancillary jurisdiction is only appropriate for matters that are incidental to other claims properly before the court). CONCLUSION The complaint allegations arising under tbe ECOA the United States and and

AlabamaConstitutions will be DISIVlISSED. complaint allegations relating to the alleged The breach of contract will be TRANSFERREDthe United States Court of Federal Claims. A to separate order accompanies this memorandum opinion.

DATE:January 24, 2005. ROSEMARY M. COLLYER United States District Judge