Mackenzie v. Castro

• Decision Date: 16 March 2017
• Docket Number: Civil Action No. 3:15-CV-0752-D
• Parties: CRAIG STEVEN MacKENZIE, Plaintiff, v. JULIAN CASTRO, SECRETARY, U.S. HOUSING & URBAN DEVELOPMENT, et al., Defendants.
• Court: U.S. District Court — Northern District of Texas

CRAIG STEVEN MacKENZIE, Plaintiff, v. JULIAN CASTRO, SECRETARY,U.S. HOUSING & URBAN DEVELOPMENT, et al., Defendants.

Civil Action No. 3:15-CV-0752-D

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS DALLAS DIVISION

March 16, 2017

MEMORANDUM OPINION AND ORDER

Defendants Julian Castro ("Secretary Castro"), Shaun Donovan ("Secretary Donovan"), and U.S. Department of Housing and Urban Development ("HUD") (collectively, "the HUD Defendants") move to dismiss the claims of pro se plaintiff Craig Steven MacKenzie ("MacKenzie") alleging violations of various federal statutes and implementing regulations and of his constitutional right to due process. Treating the HUD Defendants' motion as brought in part under Fed. R. Civ. P. 12(b)(1) and in part under Rule 12(b)(6), the court grants the motion to the extent of dismissing all of MacKenzie's claims against the HUD Defendants except his due process claim.

I

Because this case is the subject of a prior memorandum opinion and order, see MacKenzie v. Castro, 2016 WL 3906084 (N.D. Tex. July 19, 2016) (Fitzwater, J.) ("MacKenzie I"), the court will recount only the background facts and procedural history necessary to understand the present decision. In 2010 an entity named 1600 Pacific Building, LP ("1600 Pacific") filed a housing discrimination complaint ("HUD Complaint") alleging that the City of Dallas (the "City") had thwarted 1600 Pacific's efforts to redevelop an office building into a large affordable housing project. 1600 Pacific complained that the City had violated the following statutes: the Fair Housing Act ("FHA"), 42 U.S.C. §§ 3601-3619; Title VI of the Civil Rights Act of 1964 ("Title VI"), 42 U.S.C. § 2000d; § 504 of the Rehabilitation Act of 1973 ("Rehabilitation Act"), 29 U.S.C. § 794; and § 109 of the Housing and Community Redevelopment Act of 1974 ("HCRA"), 42 U.S.C. § 5309. MacKenzie alleges that he participated in, and contributed to, the preparation of the HUD Complaint. In investigating the HUD Complaint, HUD opened four case files—one for each of the four statutes that 1600 Pacific claimed the City had violated. While the matter was pending before HUD, 1600 Pacific withdrew its FHA complaint and HUD closed the file. After HUD completed its investigation, it issued a "Letter of Findings of Non-Compliance" ("Non-Compliance Letter"), concluding that the City was not in compliance with Title VI, the Rehabilitation Act, or HCRA. Thereafter, HUD and the City engaged in conciliation and entered into a "Voluntary Compliance Agreement" ("VCA") that addressed the City's alleged violations of Title VI, the Rehabilitation Act, and HCRA. MacKenzie did not participate in the conciliation and was not a signatory to the VCA. As for the City's alleged violation of the FHA, the VCA stated that 1600 Pacific had withdrawn its complaint and that HUD had closed its case.

MacKenzie later filed this lawsuit against the HUD Defendants. In his first amendedcomplaint,¹ MacKenzie alleged that the HUD Defendants had violated various non-discretionary provisions of the FHA when negotiating and entering into the VCA with the City, see MacKenzie I, 2016 WL 3906084, at *2 n.5, and that the HUD Defendants' conduct had deprived him of his constitutional right to due process. The HUD Defendants moved under Rule 12(b)(1) to dismiss MacKenzie's first amended complaint for lack of subject matter jurisdiction, and the court denied the motion. The court held that,

[t]o the extent HUD challenges MacKenzie's ability to plead a plausible claim under the specific FHA provisions cited in the amended complaint, HUD has not properly moved to dismiss MacKenzie's claim brought under those provisions. HUD's motion to dismiss is filed only under Rule 12(b)(1) and seeks dismissal of the amended complaint for lack of subject matter jurisdiction. Although HUD correctly states that this court does not have jurisdiction under the [Administrative Procedures Act ("APA"), 5 U.S.C. §§ 701-706,] to review claims based on agency actions committed by law to agency discretion, HUD does not contend that any of the specific FHA provisions on which MacKenzie relies. . . are discretionary. Absent a basis to challenge the court's subject matter jurisdiction under Rule 12(b)(1), HUD's arguments that focus on MacKenzie's inability to plausibly allege violations of any of the enumerated FHAprovisions should be raised by Rule 12(b)(6) or Rule 12(c) motion. Accordingly, without suggesting a view on the merits of MacKenzie's claims brought under the APA, the court denies HUD's motion to dismiss these claims under Rule 12(b)(1) for lack of subject matter jurisdiction.

MacKenzie I, 2016 WL 3906084, at *4.

With leave of court, MacKenzie has now filed a second amended complaint. He asserts claims against the HUD Defendants, and he adds as defendants former U.S. Attorney General Loretta Lynch ("General Lynch"), former U.S. Attorney General Eric H. Holder ("General Holder"), and the United States Department of Justice ("DOJ"). MacKenzie alleges that defendants have violated numerous non-discretionary provisions of the FHA, and implementing regulations; Title VI, and implementing regulations; § 504 of the Rehabilitation Act, and implementing regulations; and § 109 of HCRA. MacKenzie also complains of actions that have deprived him of his constitutional right to due process.

The HUD defendants move to dismiss under Rule 12(b)(6), contending that MacKenzie has failed to state a claim under § 704 of the APA on which relief can be granted because (1) he has another remedy available, (2) he has not identified any final agency action that would trigger review under the APA, and (3) he has failed to plausibly allege violations of the FHA. MacKenzie opposes the motion.

II

As a threshold matter, the court will address sua sponte the proper status of the defendants. As noted, MacKenzie originally filed this lawsuit against Secretary Castro, Secretary Donovan, and HUD. Although MacKenzie identifies Secretary Donovan in hiscomplaint and first and second amended complaints as Director of the Office of Management and Budget (a position Secretary Donovan held from 2014 to 2017), the court can take judicial notice that Secretary Donovan also served as the Secretary of HUD from 2009 to 2014. In MacKenzie's second amended complaint, he adds General Lynch, General Holder, and DOJ as parties. It does not appear from MacKenzie's complaint or either of his amended complaints that he intends to sue Secretary Castro, Secretary Donovan, General Lynch, or General Holder in his or her individual capacity. For example, there is no suggestion that MacKenzie is asserting a Bivens² action or any other type of claim for which they could be held liable in an individual capacity. This means that these four individual defendants are being sued in their official capacities, and the actions against them should be treated as actions against HUD (in the cases of Secretaries Castro and Donovan) or DOJ (in the cases of Generals Lynch and Holder). This is so because it is clearly established that a suit against a government official in his or her official capacity is "only another way of pleading an action against an entity of which [the official] is an agent." Monell v. Dep't of Soc. Servs. of N.Y., 436 U.S. 658, 690 n.55 (1978). "As long as the government entity receives notice and an opportunity to respond, an official-capacity suit is . . . treated as a suit against the entity." Kentucky v. Graham, 473 U.S. 159, 166 (1985). Accordingly, for purposes of deciding the HUD Defendants' motion to dismiss, the court will treat MacKenzie's suit as brought only against HUD rather than against HUD and Secretaries Castro and Donovan.

Moreover, because the court is deeming MacKenzie's claims against Secretaries Castro and Donovan and Generals Lynch and Holder to be asserted against them in their official capacities, Rule 25(d) comes into play. This Rule provides:

Public Officers; Death or Separation from Office. An action does not abate when a public officer who is a party in an official capacity dies, resigns, or otherwise ceases to hold office while the action is pending. The officer's successor is automatically substituted as a party. Later proceedings should be in the substituted party's name, but any misnomer not affecting the parties' substantial rights must be disregarded. The court may order substitution at any time, but the absence of such an order does not affect the substitution.

The court can take judicial notice that Secretaries Castro and Donovan have been succeeded by Ben Carson ("Secretary Carson"), and that Generals Lynch and Holder have been succeeded by Jeff Sessions ("General Sessions"). Accordingly, the proper individual defendants in this case are Secretary Carson and General Sessions, in their official capacities.³ Hereafter, the court will change the case caption to reflect the correct parties-defendant.

III

For reasons the court will explain below, it is deciding part of the HUD Defendants' motion to dismiss under Rule 12(b)(1) and part under Rule 12(b)(6). The court will therefore set out the pertinent standards for both types of motions before turning to the merits.

"Federal courts are courts of limited jurisdiction, and absent jurisdiction conferred by statute, lack the power to adjudicate claims." Stockman v. Fed. Election Comm'n, 138 F.3d 144, 151 (5th Cir. 1998). A Rule 12(b)(1) motion can mount either a facial or factual challenge. See, e.g., Hunter v. Branch Banking & Tr. Co., 2013 WL 607151, at *2 (N.D. Tex. Feb. 19, 2013) (Fitzwater, C.J.) (citing Paterson v. Weinberger, 644 F.2d 521, 523 (5th Cir. May 1981)). When a party makes a Rule 12(b)(1) motion without including evidence, the challenge to subject matter jurisdiction is facial. Id. The court assesses a facial challenge as it does a Rule 12(b)(6) motion in that it "looks only at the sufficiency of the allegations in the pleading and assumes them to be true. If the allegations are...