Honore v. United States Dep't of Agric.
| Decision Date | 30 September 2022 |
| Docket Number | Civil Action 2016-0055 |
| Parties | TEMARA HONORE, MELLANE MOTTLEY, BRENDA LAFORCE, SADE SOUTHWELL, ALICIA SUPERSAUDE, SHARON HENRY, SONIA STRAUN, JANICE DANIEL, MARIAM SARGUSINGH, KERMISHA SARGUSINGH, DELORES BESS, and CHAVORN CAMACHO, Plaintiffs, v. UNITED STATES DEPARTMENT OF AGRICULTURE a/k/a USDA, RURAL DEVELOPMENT f/k/a FARMERS HOME ADMINSITRATION, VIRGIN ISLANDS HOUSING FINANCE AUTHORITY, EARLE G. ROBINSON, and SANTA CRUZ CONSTRUCTION, Defendants. |
| Court | U.S. District Court — Virgin Islands |
Martial A. Webster, Esq., St. Croix, U.S.V.I. For Plaintiffs
Angela Tyson-Floyd, Esq., St. Croix, U.S.V.I. For Defendant United States Department of Agriculture
Flavia E. Logie, Esq., St. Croix, U.S.V.I. For Defendant Virgin Islands Housing Finance Authority
Yohana M. Manning, Esq., St. Croix, U.S.V.I. For Defendants Earle G Robinson and Santa Cruz Construction
THIS MATTER comes before the Court on four motions (1) Defendant United States Department of Agriculture's (“USDA”) Second “Motion to Dismiss Amended Complaint for Lack of Jurisdiction” (“Second Motion to Dismiss”) (Dkt. Nos. 58, 59) and the exhibits attached thereto, Plaintiffs' Response (Dkt. No. 69), Defendant USDA's Reply (Dkt. No. 70), and Plaintiffs' Sur-Reply (Dkt. No. 73); (2) Plaintiffs' “Motion to Amend First Amended Complaint” (“Motion to Amend”) (Dkt. No 71) and the exhibits attached thereto, Defendant USDA's Response (Dkt. No. 74), and Plaintiffs' Reply (Dkt. No. 78); (3) Plaintiffs' “Motion for an Evidentiary Hearing” (Dkt. No. 86) and the exhibits attached thereto, and (4) Plaintiffs' “Motion to Defer Ruling on [Defendant USDA's Second] Motion to Dismiss Amended Complaint for Lack of Jurisdiction [Pending Evidentiary Hearing]” (“Motion to Defer Ruling”) (Dkt. No. 85) and the exhibits attached thereto, Defendant USDA's Response to items 3 and 4 (Dkt. No. 88), and Plaintiffs' Reply (Dkt. No. 91).
For the reasons that follow, the Court will grant Defendant USDA's Second Motion to Dismiss and deny Plaintiffs' Motions to Amend, for an Evidentiary Hearing, and to Defer Ruling.
As alleged in the First Amended Complaint, the twelve plaintiffs each own land in Estate St. Georges on St. Croix in the United States Virgin Islands. (Dkt. No. 52 at ¶¶ 4-14). Plaintiffs received financing from Defendants USDA and the Virgin Islands Housing Finance Authority (“VIHFA”) to purchase their land and build homes on their properties, id. at ¶ 20, and the two agencies allegedly “recommended and referred” Plaintiffs to Defendants Earle G. Robinson (“Robinson”) and Santa Cruz Construction. Id. at ¶¶ 28-30. Defendant Santa Cruz Construction is owned and operated by Defendant Robinson. Id. at ¶ 19.
Defendants Robinson and Santa Cruz Construction entered into construction contracts with Plaintiffs, id. at ¶ 31, but Plaintiffs claim that Robinson and Santa Cruz Construction ultimately “failed to build and construct safe and structurally viable homes for the Plaintiffs based on the adverse characteristics of the soil in Estate St. Georges,” id. at ¶ 34. Plaintiffs assert that they “immediately” began to experience various structural issues with their homes once the construction was completed, including, without limitation: leaking roofs; improperly levelled ground; and cracked ceilings, walls, floors, and cisterns. Id. at ¶¶ 39-46. Defendant Robinson allegedly made unsatisfactory repairs when Plaintiffs raised these issues, and some Plaintiffs have reportedly been required to hire other contractors because their homes have become uninhabitable. Id. at ¶¶ 45-48.
As relevant to the four instant motions, Plaintiffs allege, with respect to Defendant USDA: that the agency “recommended and referred” Plaintiffs to Defendants Robinson and Santa Cruz Construction on assurances that Defendant Robinson would build them “quality” houses, but that he did not, id. at ¶¶ 28, 30; that the agency knew or should have known-based on a virtually identical prior lawsuit-that there were problems with the soil at Estate St. Georges “that resulted in a severe settling problem and major structural damages to homes built by Defendant Robinson,” but the agency “failed to disclose to Plaintiffs the risk of building a home in Estate St. Georges with Defendant Robinson as the contractor,” id. at ¶¶ 32, 35-36; and that the agency was “required to make periodic inspections” but “failed to observe the substandard construction by Defendant Robinson . . . and failed to properly inspect [Plaintiffs' properties and the ongoing construction] before authorizing payments for substandard work performed by Defendant Robinson,” id. at ¶¶ 37-38. Plaintiffs bring claims against USDA for breach of express and implied warranties (Count II) and breach of contract (Count III). Id. at ¶¶ 55-60.
Plaintiffs filed their initial Complaint in August 2016, seeking damages for misrepresentation, fraud, breach of contract, and breach of express and implied warranties. (Dkt. No. 1). Defendant USDA then filed its first motion to dismiss under Rules 12(b)(1) and (6) of the Federal Rules of Civil Procedure, arguing that Plaintiffs' claims are barred by sovereign immunity, and that Plaintiffs failed to exhaust their administrative remedies. (Dkt. Nos. 16, 17). In response, Plaintiffs requested leave to amend their Complaint (Dkt. No. 21), which the Court granted (Dkt. No. 24). After Plaintiffs filed their First Amended Complaint (Dkt. No. 52), the Court denied Defendant USDA's first motion to dismiss as moot (Dkt. Nos. 50, 51). Defendant USDA then filed its Second Motion to Dismiss-the first of the four motions at issue here-in which Defendant USDA renewed its earlier sovereign immunity and exhaustion arguments as challenges to the Court's subject matter jurisdiction under Rule 12(b)(1). (Dkt. Nos. 58, 59).
In response, Plaintiffs filed a Motion to Amend their First Amended Complaint (Dkt. No. 71)-the second motion at issue here-which Defendant USDA opposes on futility grounds (Dkt. No. 74). Plaintiffs also requested limited jurisdictional discovery so as to permit them to adequately respond to Defendant USDA's exhaustion arguments. (Dkt. Nos. 69, 73). The Court granted Plaintiffs' motion for limited jurisdictional discovery, and further ordered Plaintiffs to submit supplemental briefing on both the sovereign immunity and exhaustion issues-after USDA provided jurisdictional discovery-with Defendant USDA's own supplemental briefing to follow.[1](Dkt. No. 80).
Defendant USDA timely noticed service of the relevant discovery (Dkt. No. 81), and the Court then granted Plaintiffs multiple extensions to file their supplemental briefing (Dkt. Nos. 82, 84). On September 23, 2021, the third deadline for Plaintiffs to submit their supplemental briefing (see Dkt. No. 84), Plaintiffs neither filed their briefing nor requested an extension of time to do so. Instead, Plaintiffs filed the two remaining motions at issue, asking the Court to conduct an evidentiary hearing to inquire further into the exhaustion-but not the sovereign immunity-issue (Dkt. No. 86), and to defer ruling on Defendant USDA's Second Motion to Dismiss pending that hearing (Dkt. No. 85). Defendant USDA opposes both motions. (Dkt. No. 88).
As detailed below, the Court finds that Plaintiffs' claims against Defendant USDA are barred by sovereign immunity (Section II), and that Plaintiffs' proposed Second Amended Complaint cannot cure the resulting defect in the Court's subject matter jurisdiction (Section III). Accordingly, the Court will grant Defendant USDA's Second Motion to Dismiss and deny Plaintiffs' Motion to Amend. Further, because the Court resolves Defendant USDA's Second Motion to Dismiss on grounds of sovereign immunity, it declines to reach the parties' arguments regarding the exhaustion of administrative remedies. Consequently, the Court will also deny Plaintiffs' Motion for an Evidentiary Hearing on the exhaustion issues, as well as Plaintiffs' Motion to Defer ruling on the Defendant USDA's Second Motion to Dismiss pending that hearing, as moot (Section IV).
Under Federal Rule of Civil Procedure 12(b)(1), “a court must grant a motion to dismiss if it lacks subject-matter jurisdiction to hear a claim.” In re Schering Plough Corp. Intron/Temodar Consumer Class Action, 678 F.3d 235, 243 (3d Cir. 2012). The first step in evaluating a 12(b)(1) motion is to address whether it presents a “facial” or “factual” attack on the plaintiff's claims. Const. Party of Pa. v. Aichele, 757 F.3d 347, 357-58 (3d Cir. 2014). A facial challenge contests the court's subject-matter jurisdiction “without disputing the facts alleged in the complaint and requires the court to consider the allegations of the complaint as true.” Davis v. Wells Fargo, 824 F.3d 333, 346 (3d Cir. 2016) (quotation marks omitted). A factual challenge, by contrast, asserts that the underlying facts of the case do not support jurisdiction. Aichele, 757 F.3d at 358. When addressing a factual challenge, a court may therefore consider evidence outside the pleadings, id., and “no presumptive truthfulness attaches to plaintiff's allegations,” Mortensen v. First Fed. Sav. & Loan Ass'n, 549 F.2d 884, 891 (3d Cir.1977).
The doctrine of sovereign immunity shields the United States from suit where it has not “unequivocally expressed” consent to be sued. United States v. Bormes, 133 U.S. 6, 10 (2012). Sovereign immunity goes directly to subject matter jurisdiction. See Treasurer of N.J. v U.S. Dep't of Treasury, 684 F.3d 382, 395 (3d Cir. 2012) (...
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