Garcia v. Johanns
| Decision Date | 31 March 2006 |
| Docket Number | No. 05-5002.,No. 04-5448.,04-5448.,05-5002. |
| Citation | 444 F.3d 625 |
| Parties | Guadalupe L. GARCIA For Himself and on Behalf of G.A. Garcia and Sons Farm et al., Appellants v. Michael JOHANNS, Secretary, United States Department of Agriculture, Appellee. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Appeals from the United States District Court for the District of Columbia (No. 00cv02445).
Stephen S. Hill argued the cause for the appellants. Alan M. Wiseman, Robert L. Green and Kenneth C. Anderson were on brief.
Charles W. Scarborough, Attorney, United States Department of Justice, argued the cause for the appellee. Peter D. Keisler, Assistant Attorney General, Kenneth L. Wainstein, United States Attorney, and Robert M. Loeb, Attorney, United States Department of Justice, were on brief.
Glen D. Nager, Shay Dvoretzky, Jason J. Jarvis and Robin S. Conrad were on brief for amicus curiae Chamber of Commerce of the United States of America.
Before: SENTELLE and HENDERSON, Circuit Judges, and EDWARDS, Senior Circuit Judge.
Opinion for the court filed by Circuit Judge HENDERSON.
This appeal arises from one of several actions brought against the United States Department of Agriculture (Department or USDA) alleging discrimination in the administration of various federally-funded loan and benefit programs for American farmers.1 The appellants, individual Hispanic farmers, seek to represent a class of similarly situated Hispanic farmers throughout the nation who claim that the Department discriminated against them in denying them farm loans and other benefits because of their ethnicity and that it failed to investigate the discrimination complaints they subsequently filed with the Department. In the district court, the appellants sought class certification and the USDA moved to dismiss, inter alia, the failure-to-investigate claim. The district court granted the Department's motion to dismiss and denied class certification, concluding that the appellants had failed to meet the requirements of Federal Rule of Civil Procedure 23(a) and 23(b). For the reasons that follow, we affirm in part and remand in part.
The Farm Service Administration (FSA)2 administers the Department's various loan programs for American farmers through county committees, the members of which are selected locally and are located in over 2,700 counties nationwide. A farmer seeking a loan must first obtain an application from his county committee. 7 C.F.R. § 1910.4(b). He then submits the completed application to the committee which determines whether the farmer meets specific USDA loan criteria, including, inter alia, citizenship, legal capacity to incur debt, education and farming experience, farm size, inability to obtain sufficient credit elsewhere and character. Id. §§ 1941.12 (2006), 1943.12(a) (2006), 1943.12 (1988), 764.4 (2006). If an unsuccessful applicant believes the committee discriminated against him in denying his application, he may lodge a complaint with either the USDA Secretary or the USDA Office of Civil Rights. Id. § 15.6. USDA regulations provide that complaints "shall be investigated in the manner determined by the Assistant Secretary for Civil Rights and such further action taken by the Agency or the Secretary as may be warranted." Id.
On October 13, 2000, ten Hispanic farmers filed this action in the district court. The complaint set forth three counts.3 Count I sought a declaratory judgment to determine "the rights of plaintiffs and the Class members under the defendant's farm programs including their right to equal credit, and equal participation in farm program, and their right to full and timely enforcement of racial discrimination complaints." 2d Am. Compl. at 56, reprinted in Joint Appendix (JA) 83. The second count alleged a violation of the Equal Credit Opportunity Act (ECOA), 15 U.S.C. §§ 1691 et seq.4 JA 84. Specifically, the appellants alleged that the "[d]efendant's acts of denying plaintiffs and Class members credit and other benefits and systematically failing to properly process their discrimination complaints was racially discriminatory and contrary to the [ECOA]." JA 84. Finally, the appellants alleged a violation of the Administrative Procedure Act, 5 U.S.C. §§ 551 et seq. JA 84. The appellants sought declaratory relief as well as $20 billion in damages. JA 85. Their complaint also proposed a class of
all Hispanic participants in FSA farm programs who petitioned or would have petitioned had they not been ... prevented from timely filing a complaint [against] USDA at any time between January 1, 1981, and the present for relief from ... racial discrimination ... and who, because of the failings in the USDA civil rights complaint processing system ... were denied equal protection... and due process in the handling of their ... complaints.
JA 78 (emphasis in original).5
On December 22, 2000, the Department moved to dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(b)(1), contending that the court lacked jurisdiction over the ECOA claim because the appellants had not exhausted their administrative remedies and that, in any event, their claims were time-barred. In addition, the Department moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), arguing that the appellants had failed to state a claim under ECOA, the APA or the Declaratory Judgment Act, 28 U.S.C. §§ 2201 et seq. On March 20, 2002, the district denied the motion in part and granted it in part, relying on its earlier — and similar — order in Love v. Johanns, No. 00-2502 (D.D.C. Dec. 13, 2001). Garcia v. Veneman, No. 00-2445, 2002 WL 33004124 (D.D.C. Mar. 20, 2002), reprinted in JA 95-99. Of relevance here, the court dismissed the failure-to-investigate claim, concluding that the appellants failed to state a claim under ECOA because the investigation of a discrimination complaint is not a "credit transaction" within the meaning of ECOA. JA 97-98. It further held that the claim was not cognizable under the APA because ECOA provides "an adequate remedy." JA 97-98.
On December 2, 2002, the district court denied class certification. Garcia v. Veneman, 211 F.R.D. 15 (D.D.C.2002) (Garcia I). It concluded that the appellants failed to show the required "commonality" under Federal Rule of Civil Procedure 23(a)(2) and did not represent a certifiable class under Rule 23(b). They did not show commonality, the court concluded, because they did not demonstrate that the Department operated under a general policy of discrimination nor did they identify a common USDA policy or practice that disparately affected them. Id. at 19-22. The court then considered whether the requested class could be certified under Rule 23(b) and concluded that Rule 23(b)(2) certification was inappropriate because the $20 billion in damages they sought predominated over their request for equitable relief. Id. at 22-23. The court also found Rule 23(b)(3) certification inappropriate because they had not shown that common questions predominated. Id. at 23-24.
After additional discovery, the appellants submitted a supplemental brief on the issue of commonality, which the district court treated as a renewed motion for class certification. Garcia v. Veneman, 224 F.R.D. 8 (D.D.C.2004) (Garcia II). They had obtained in discovery 37 USDA loan and disaster benefit files as well as two USDA databases which, they alleged, showed the requisite commonality for both their disparate impact and their disparate treatment allegations of discrimination. Id. at 10. They argued that the files revealed that the USDA had denied Hispanic farmers' applications based on the subjective, rather than the objective, eligibility criteria set forth in 7 C.F.R. § 15.6 and that, as a result, the use of subjective criteria had a disparate impact on them. Id. at 13-15. They also claimed that the USDA as a "single actor" had treated them discriminatorily through a pattern and practice of discrimination. Id. at 10. They listed five sub-patterns of discrimination, including (i) refusal to provide Hispanic farmers with loan applications or assistance in completing applications; (ii) subjecting Hispanic farmers to protracted delays in processing and funding their loans; (iii) using subjective criteria to reject the applications of Hispanic farmers; (iv) unnecessarily subjecting Hispanic farmers to the inconvenience of supervised bank accounts; and (v) delaying or denying loan servicing for Hispanic farmers. Id. at 10. The court nevertheless concluded that, even with their supplementation, they failed to demonstrate commonality.
On September 24, 2004, the appellants moved the district court to certify the order dismissing their failure-to-investigate claim for interlocutory appeal under 28 U.S.C. § 1292(b), which motion the court granted. Garcia v. Veneman, No. 00-2445 (D.D.C. Sept. 27, 2004). In accordance with Federal Rule of Civil Procedure 23(f), the appellants petitioned this court on September 22, 2004 for leave to file an interlocutory appeal of the class certification denial, which petition we granted. In re Garcia, No. 04-8008 (D.C.Cir. Dec. 16 2004). Before us for review, then, are three orders, namely Garcia, No. 00-2445, 2002 WL 33004124 (D.D.C. Mar. 20, 2002) (), Garcia I, 211 F.R.D. 15 (D.D.C.2004) (denying class certification), and Garcia II, 224 F.R.D. 8 (D.D.C.2004) ().
As we have recognized, the district court is "uniquely well situated" to rule on class certification matters. Wagner v. Taylor, 836 F.2d 578, 586 (D.C.Cir.1987). Accordingly, we review a certification ruling "conservatively only to ensure against abuse of discretion or erroneous application of legal criteria," id., and we will affirm the district court even if we would have ruled differently in the first instance. See McCarthy v. Kleindienst, 741...
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