Moore v. U.S. Dept. of Agriculture on Behalf of Farmers Home Admin.

• Citation: 55 F.3d 991
• Decision Date: 06 June 1995
• Docket Number: No. 94-40945,94-40945
• Parties: Larry W. MOORE and Naomi S. Moore, Plaintiffs-Appellants, v. UNITED STATES DEPARTMENT OF AGRICULTURE on Behalf of FARMERS HOME ADMINISTRATION, Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

Page 991

55 F.3d 991

64 USLW 2046

Larry W. MOORE and Naomi S. Moore, Plaintiffs-Appellants, v. UNITED STATES DEPARTMENT OF AGRICULTURE on Behalf of FARMERS

HOME ADMINISTRATION, Defendant-Appellee.

No. 94-40945.

United States Court of Appeals,

Fifth Circuit.

June 6, 1995.

James A. McPherson, John Marcue Ellis, Slidell, LA, for appellants.

John F. Daly, Michael J. Singer, U.S. Dept. of Justice, Washington, DC, John A. Broadwell, Asst. U.S. Atty., Michael D. Skinner, U.S. Atty., Shreveport, for appellee.

Appeal from the United States District Court for the Western District of Louisiana.

Before LAY ¹, DUHE and DeMOSS, Circuit Judges.

DEMOSS, Circuit Judge:

Nearly five years ago, Larry Moore and his wife, Naomi Moore, sued the Farmers Home Administration (FmHA), alleging that FmHA's refusal to extend them credit because they are white violated the equal protection component of the Fifth Amendment and the Equal Credit Opportunity Act (ECOA), 15 U.S.C. Secs. 1691-1691f. The district court originally dismissed the suit for lack of standing, but we reversed and remanded the case for further proceedings. Moore v. U.S. Dep't of Agric., 993 F.2d 1222 (5th Cir.1993) (Moore I ). On remand, the district court once again dismissed the Moores' suit, but for different reasons. The Moores appeal. We now vacate the judgment below and render judgment for the Moores, but remand the case for a determination of damages.

I.

The Agricultural Credit Act of 1987, Pub.L. No. 100-233, authorizes the Department of Agriculture (DOA) to establish "target participation rates" to ensure that members of "socially disadvantaged groups" will receive loans to acquire DOA-held farmland. 7 U.S.C. Sec. 2003(a)(1). The Act defines a "socially disadvantaged group" as "a group whose members have been subjected to racial or ethnic prejudice because of their identity as members of a group without regard to their individual qualities." Id. Sec. 2003(d). As of December 1989, the FmHA, which is an agency within the DOA, implemented Sec. 2003's mandate by setting aside a certain portion of DOA-held properties for "socially disadvantaged applicants" (SDAs). The FmHA would then sell SDA-designated properties exclusively to qualified minorities ² and sell non-SDA-designated properties to any qualified applicant. The FmHA required all applicants, regardless of SDA status, to produce evidence of an "acceptable credit history."

In December 1989, Larry Moore, a white male, applied to purchase an SDA-designated property, namely a 183-acre farm in Rayville, Louisiana. Moore did not indicate whether he qualified as an SDA, whereupon the FmHA requested further information. Moore failed to do so. The FmHA formally denied his application in December 1989, stating only that

"[y]ou have failed to provide proof that you meet the criteria of SDA. (No Whites)."

The Moores filed an administrative appeal, which was summarily dismissed in February 1990 on the basis that the FmHA could not waive his unacceptable racial classification. The Moores then applied for a non-SDA-designated property. The FmHA again denied his application, this time on the basis of his poor credit history as reflected in a January 1990 credit report. The report, among other things, indicated that Larry Moore had been sporadically employed since 1967, that the Moores had declared bankruptcy in 1982, and that their home had been foreclosed on in the late 1980s.

In September 1990, the Moores filed suit against the DOA and the FmHA, alleging violations of their rights under the Fifth Amendment and the ECOA. ³ The Moores requested actual damages (i.e., loss of income from farming operations and mental anguish and suffering), punitive damages, and attorneys fees, but made no specific request for injunctive or declaratory relief. The district court dismissed the Moores' suit on the ground that Larry Moore had failed to complete the initial application. The Moores appealed. In June 1993, we reversed and remanded the case for further proceedings. Moore I, 993 F.2d 1222 (5th Cir.1993). We held that the Moores' failure to complete the application did not deprive them of standing to sue.

On remand, the Moores never amended their pleadings. The FmHA prior to trial offered alternative defenses to its actions: (1) notwithstanding its board prohibition against discriminatory lending, the ECOA exempts refusals to extend credit that are pursuant to "any credit assistance program expressly authorized by law for an economically disadvantaged class of persons," 15 U.S.C. Sec. 1691(c)(1); and (2) the ECOA does not include a waiver of sovereign immunity. At trial, however, the FmHA changed tack and defended its actions on a third theory: the Moores failed to make a prima facie case of discrimination. ⁴

Providing alternative reasons, the district court dismissed the Moores' suit in July 1994. The court first held that the ECOA does not include a waiver of sovereign immunity, despite the fact that the FmHA had proffered but eventually abandoned precisely the same theory. The court alternatively held (as the FmHA argued at trial) that the Moores failed to make out a prima facie case of discrimination. The elements of an ECOA prima facie case, according to the district court, are: (1) the applicant is a member of the protected class; (2) the applicant in fact applied and was qualified for credit; and (3) the applicant was denied credit notwithstanding his qualifications. ⁵ The court easily concluded that the Moores could not establish the second element, i.e., that they were qualified for credit, and therefore dismissed the Moores' suit. The Moores, once again, appeal.

II.

We are obligated to satisfy ourselves that the jurisdiction of both this court and the district court has been properly established, " 'even though the parties are prepared to concede it.' " Mocklin v. Orleans Levee Dist., 877 F.2d 427, 428 n. 3 (5th Cir.1989) (quoting Bender v. Williamsport Area School Dist., 475 U.S. 534, 541, 106 S.Ct. 1326, 1331, 89 L.Ed.2d 501 (1986)). And because "[s]overeign immunity is jurisdictional in nature," FDIC v. Meyer, --- U.S. ----, ----, 114 S.Ct. 996, 1000, 127 L.Ed.2d 308 (1994), we must now determine whether the ECOA contains a waiver of the United States' sovereign immunity. As we mentioned, the district court below concluded that Congress never "unequivocally expressed" an intention to waive the United States' sovereign immunity in ECOA claims. The court did concede that the plain language of the ECOA provides that governmental entities are liable under the Act. See 15 U.S.C. Sec. 1691a(e), (f) (respectively defining "creditor" to mean "person," and "person" to mean "government or governmental subdivision or agency"). But the court construed this to mean that Congress waived the liability of state governmental entities only, leaving intact the United States' immunity.

There are two problems with the district court's reasoning. First, as the FmHA points out, Congress has used identical language in a closely related statute, yet inserted an additional provision preserving the United States' immunity. Specifically, Congress codified the Truth in Lending Act (TILA), 15 U.S.C. Secs. 1601-1667e, and the ECOA, 15 U.S.C. Secs. 1691-1691f, as Subchapters I and IV of the Consumer Credit Protection Act, respectively. The TILA defines "person" to mean any "government or governmental subdivision or agency," see id. Sec. 1602(c), (d), (f), just as the ECOA does. Yet Congress also expressly preserved the United States' sovereign immunity against TILA claims. Id. Sec. 1612(b). Clearly, TILA indicates that Congress intended "government or governmental subdivision or agency" to include the United States, because otherwise it would not have specifically preserved the United States' immunity unless it believed that such immunity had been previously waived. Considering that ECOA was passed after TILA ⁶ and does not include an express preservation of U.S. sovereign immunity as did TILA, we conclude that Congress intended to waive U.S. immunity in the ECOA.

Second, and perhaps equally compelling, the district court's conclusion creates a paradox. The courts have developed virtually identical tests for determining whether Congress has waived the United States' sovereign immunity and whether it has abrogated the states' Eleventh Amendment immunity. That is, Congress' intention must be either "unequivocally expressed" (when the United States' immunity is at issue) or "unmistakably clear" (when the states' immunity is at issue). In Interfirst Bank Dallas, N.A. v. United States, 769 F.2d 299, 310 (5th Cir.1985), we stated that a waiver of the United States' sovereign immunity "must be expressly stated by Congress and should not be inferred." For support, we cited among other cases Atascadero State Hospital v. Scanlon, 473 U.S. 234, 105 S.Ct. 3142, 87 L.Ed.2d 171 (1985), wherein the Supreme Court discussed the test for determining whether Congress has abrogated the states' Eleventh Amendment immunity. We purposely cited Scanlon in Interfirst Bank for one reason: the two tests are extremely similar, if not identical. See also United States v. Nordic Village, Inc., 503 U.S. 30, 37, 112 S.Ct. 1011, 1016, 117 L.Ed.2d 181 (1992) ("As in the Eleventh Amendment context, the 'unequivocal expression' of elimination of sovereign immunity that we insist upon is an expression of statutory text.") (quoting Hoffman v. Connecticut Dep't of Income Maintenance, 492 U.S. 96, 104, 109 S.Ct. 2818, 2824, 106 L.Ed.2d 76 (1989)); Pennsylvania v. Union Gas Co., 491 U.S. 1, 31-32, 109 S.Ct. 2273, 2297-98, 105 L.Ed.2d 1 (1989) (Scalia, J, concurring and dissenting) (states' Eleventh Amendment immunity reflected "a consensus that the doctrine of sovereign immunity, for States as well as the Federal Government, was part of the understood background against which the Constitution was adopted") (emphasis added).

So, given the uniformity with which courts...