Mackenzie v. Castro, Civil Action No. 3:15-CV-0752-D

• Decision Date: 19 July 2016
• Docket Number: Civil Action No. 3:15-CV-0752-D
• Court: U.S. District Court — Northern District of Texas
• Parties: CRAIG STEVEN MacKENZIE, Plaintiff, v. JULIAN CASTRO, SECRETARY, U.S. HOUSING & URBAN DEVELOPMENT, et al., Defendants.

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

July 19, 2016

MEMORANDUM OPINION AND ORDER

In this pro se action alleging violations of the Fair Housing Act ("FHA"), 42 U.S.C. §§ 3601-3619, defendants move under Fed. R. Civ. P. 12(b)(1) to dismiss plaintiff's first amended complaint for lack of subject matter jurisdiction. Plaintiff Craig Steven MacKenzie ("MacKenzie") moves to strike portions of defendants' motion to dismiss and for leave to conduct discovery and to serve depositions by written questions. For the reasons that follow, the court denies the motions.

I

In 2010 an entity named 1600 Pacific Building, LP ("1600 Pacific") filed a housing discrimination complaint ("HUD Complaint")¹ with defendant U.S. Department of Housing and Urban Development ("HUD"). The HUD Complaint alleged that the City of Dallas (the"City") had thwarted 1600 Pacific's efforts to redevelop the 1964 LTV Tower Office Building ("LTV Tower") into a large affordable housing project.² After completing an investigation of the HUD Complaint, HUD issued a "Letter of Findings of Non-Compliance" ("Non-Compliance Letter"), in which it concluded that the City was not in compliance with 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. § 5309.³ Thereafter, HUD and the City engaged in "bilateral [c]onciliation," Am. Compl. ¶ 9, which resulted in a "Voluntary Compliance Agreement" ("VCA"). MacKenzie did not participate in the bilateral conciliation and was not a signatory to the VCA.

In 2015 MacKenzie filed the instant lawsuit against HUD,⁴ alleging that its actions"resulted in a manifest failure to 'administer the programs and activities . . . in a manner affirmatively to further the policies of [the FHA],'" in violation of 42 U.S.C. § 3608(e)(5), and deprived him of his constitutional due process rights. Compl. ¶ 1. HUD moved to dismiss MacKenzie's complaint on the basis that his sole claim under § 3608(e)(5) was not reviewable under the Administrative Procedures Act ("APA"), 5 U.S.C. §§ 701-706. The court referred the motion to the magistrate judge, who recommended that the court dismiss MacKenzie's complaint because he alleged only discretionary agency action and the APA's waiver of sovereign immunity does not apply to agency action committed to agency discretion by law. MacKenzie objected to the magistrate judge's findings, conclusions, and recommendation and requested leave to amend his complaint. The court declined to adopt the magistrate judge's findings, conclusions, and recommendation and granted MacKenzie leave to amend, holding that "[b]ecause MacKenzie is proceeding pro se, he should be given one last, fair opportunity to plead his best case." Dec. 16, 2015 Order at 2. MacKenzie then filed his first amended complaint.

In his first amended complaint, MacKenzie again brings claims under the APA, but this time he alleges that HUD violated various non-discretionary provisions of the FHA in the process of negotiating and entering into the VCA with the City,⁵ and that HUD's conductdeprived him of his constitutional due process rights. HUD moves under Rule 12(b)(1) to dismiss MacKenzie's first amended complaint for lack of subject matter jurisdiction. MacKenzie opposes the motion.

II

"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). "The burden of proof for a Rule 12(b)(1) motion to dismiss is on the party asserting jurisdiction. Accordingly, the plaintiff constantly bears the burden of proof that jurisdiction does in fact exist." Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001) (per curiam) (citations omitted).

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 files 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 sufficient to allege jurisdiction, the court must deny the motion." Id. (citation omitted) (citing Paterson, 644 F.2d at 523). If, however, the defendant supports the motion with affidavits, testimony, or other evidentiary materials, then the attack is "factual" and the burden shifts to the plaintiff to prove subject matter jurisdiction by a preponderance of the evidence. Id.

III

HUD moves under Rule 12(b)(1) to dismiss MacKenzie's claims brought under the APA for lack of subject matter jurisdiction.

A

The APA authorizes suit by "[a] person suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action within the meaning of a relevant statute." 5 U.S.C. § 702. Under the APA, federal courts may "compel agency action unlawfully withheld or unreasonably delayed" and may "hold unlawful and set aside agency action, findings, and conclusions found to be . . . arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(1) & (2). "Failures to act are sometimes remediable under the APA, but not always." Norton v. S. Utah WildernessAlliance, 542 U.S. 55, 61 (2004). For a federal district court to take action pursuant to 5 U.S.C. § 706(1), the plaintiff must assert "that an agency failed to take a discrete agency action that it is required to take." Id. at 64.

Despite the APA's broad waiver of sovereign immunity in 5 U.S.C. § 702, federal courts have no jurisdiction under the APA to review "agency action [that] is committed to agency discretion by law." 5 U.S.C. § 701(a)(2). This exception to judicial review is "very narrow" and applies only "in those rare instances where 'statutes are drawn in such broad terms that in a given case there is no law to apply.'" Ellison v. Connor, 153 F.3d 247, 251 (5th Cir. 1998) (quoting Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 410 (1971)); see also Suntex Dairy v. Block, 666 F.2d 158, 163 (5th Cir. 1982). Stated differently, judicial review is unavailable only "if the statute is drawn so that a court would have no meaningful standard against which to judge the agency's exercise of discretion." Heckler v. Chaney, 470 U.S. 821, 830 (1985).

B

HUD moves to dismiss MacKenzie's amended complaint largely on the same grounds that it relied on to support its first motion to dismiss. It contends that HUD's actions in investigating the HUD Complaint and entering into the VCA were discretionary actions that MacKenzie cannot challenge, and that MacKenzie's allegation that HUD violated § 3608(e)(5) by not pursuing certain enforcement actions against the City is unreviewable under § 706(1) of the APA because MacKenzie has failed to allege discrete agency action that HUD was required to, but did not, take. Regarding MacKenzie's allegations that HUDviolated certain enumerated mandatory provisions of the FHA, HUD contends that MacKenzie's citation to these statutes is "mistaken[.]" D. Br. 9. It contends that the FHA provisions on which MacKenzie relies are triggered by the issuance of a formal FHA "charge," and that, in this case, no formal charge was ever issued. Instead,

a complaint was filed, there was an investigation, a [Non-Compliance Letter] was issued and efforts to conciliate the complaint between [1600 Pacific] and [the City] were attempted. [1600 Pacific] ultimately withdrew their complaint on September 29, 2014. From this point no formal charge stemming from the complaint could be issued because the complaint was null and void.

D. Br. 11.

MacKenzie responds that he has not brought a claim for a violation of 42 U.S.C. § 3608(e)(5), but complains instead only about HUD's actions that are not committed to agency discretion by law; that HUD concedes that Congress waived the government's sovereign immunity in the APA; that HUD is only vested with non-discretionary investigative and enforcement duties under the FHA and is required to issue a charge if an investigation indicates there is reasonable cause to believe that an unlawful discriminatory housing practice has occurred; that HUD's merits-based arguments are improper under Rule 12(g)(2) but that, in any event, the Non-Compliance Letter is the same as a formal FHA charge, and when HUD issued the Non-Compliance Letter, it was required to—but did not—comply with the non-discretionary provisions of the FHA as alleged in the first amended complaint; that HUD filed and investigated the HUD Complaint under the FHA but failed to exercise its discrete enforcement powers and did not observe procedure required bylaw; and that MacKenzie, a co-developer and co-owner of a to-be-formed entity called LTV Tower Redevelopment, LP is an "aggrieved person" under the FHA.

In reply, HUD contends that the absence of a specific reference to § 3608(e)(5) does not mean that MacKenzie's complaint "is no longer about that statute," Reply 2; that although the APA allows for judicial review of agency action, it precludes review when agency actions are committed to agency discretion by law, as they are in the present case; that HUD's obligation to charge or dismiss under § 3610 no longer existed after the complainant (1600 Pacific) withdrew the HUD Complaint; that Rule 12(g)(2) does not prevent the filing of a motion to dismiss in response to an amended complaint, as HUD did in this case; that...