National Ass'n of Min. Cont., Dayton v. Martinez, No. C-3-02-04.

• Court: United States District Courts. 6th Circuit. United States District Courts. 6th Circuit. Southern District of Ohio
• Writing for the Court: Rice
• Citation: 248 F.Supp.2d 679
• Parties: NATIONAL ASSOCIATION OF MINORITY CONTRACTORS, DATON CHAPTER, Plaintiff, v. Mel MARTINEZ, Secretary of United States Department of Housing and Urban Development, et al., Defendants.
• Decision Date: 18 November 2002
• Docket Number: No. C-3-02-04.

248 F.Supp.2d 679 NATIONAL ASSOCIATION OF MINORITY CONTRACTORS, DATON CHAPTER, Plaintiff,
v.
Mel MARTINEZ, Secretary of United States Department of Housing and Urban Development, et al., Defendants. No. C-3-02-04. United States District Court, S.D. Ohio, Western Division. November 18, 2002.

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Michael C. Thompson, Mia Wortham-Spells, Dayton, OH, for plaintiff.

Paula Vinette Durden, Dayton, OH, Robert A. Graham, Lee P. Reno, Washington, DC, Scott Allen King, Christine M. Haaker, Dayton, OH, for defendant.

DECISION AND ENTRY OVERRUING PLAINTIFF'S MOTION FOR A PRELIMINARY INJUNCTION (DOC. #2), WITHOUT PREJUDICE, AND OVERRULING DFENDANTS' JOINT MOTION TO DISMISS (DOC. # 5), WITHOUT PREJUDICE; PLAINTIFF DIRECTED TO SHOW CAUSE AS TO WHY ITS COMPLAINT SHOULD NOT BE DISMISSED ON PRINCPLES OF RIPENESS AND/OR STANDING

RICE, Chief Judge.

The Plaintiff in this action is the Dayton Chapter of the National Association of Minority Contractors ("NAMC"). The named Defendants are Mel Martinez, Secretary of the United States Department of Housing and Urban Development ("Secretary Martinez" & "HUD," respectively), Roland Turpin, Director of the Dayton Metropolitan Housing Authority, the Dayton Metropolitan Housing Authority itself ("DMHA"), Old Dayton View LLC ("Old Dayton View"), TCG Development Services ("TGC"), Oberer Residential Construction Ltd ("Oberer Residential") and Oberer DVA, Ltd ("Oberer DVA"). In very basic terms, HUD was created by Congress to assist local governments in their efforts to address housing issues affecting their low-income residents. See 42 U.S.C. §§ 3531 & 3532. In its Complaint (Doc. #1), the NAMC alleges that the Defendants herein are in violation, or will be in violation, of several regulations promulgated by HUD, and, as a result, are also in violation of various civil rights laws, 42 U.S.C. §§ 1981, 1982, 1983 & 1985. Accordingly, it is seeking a declaratory judgment that the Defendants must comply with said regulations and laws, and an injunction against all alleged acts or proposed acts of theirs which will, allegedly, violate same. In furtherance of its aims, it has filed a Motion for a Preliminary Injunction (Doc. # 2). Subsequent to the filing of said Motion, the Court sustained an Agreed Order Dismissing Secretary Martinez Without Prejudice (Doc. # 11).¹

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The other Defendants ("Defendants") now move for dismissal on several grounds (see Doc. # 5), pursuant to Rule 12(b)(1) and (6) of the Federal Rules of Civil Procedure, to wit: that this Court lacks subject matter jurisdiction; that the Plaintiff has failed to exhaust its administrative remedies; and that the Plaintiff has failed to state a claim upon which relief can be granted.

For the reasons which follow, the Court shall OVERRULE, without prejudice, both the Plaintiffs Motion for a Preliminary Injunction and the Defendants' Joint Motion to Dismiss, and order the Plaintiff to show cause as to why its Complaint should not be dismissed on principles of ripeness and standing.

I. Standard of Analysis for Rule 12(b)(6) and 12(b)(1) Motions to Dismiss

Pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, the Court may only consider the facts as pled in the Complaint in deciding whether the Plaintiff has stated a valid claim. See Nelson v. Miller, 170 F.3d 641, 649 (6th Cir.1999). "A court should not dismiss a plaintiffs complaint under Rule 12(b)(6) unless, after construing the complaint in the light most favorable to the plaintiff and accepting all factual allegations as true, the court determines that the plaintiff can prove no set of facts in support of his claim that would entitle him to relief." Id. (citation omitted); Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984). "When a party files a motion to dismiss under Rule 12(b)(6), the district court is instructed to treat the motion as one for summary judgment if either party submits additional materials `outside the pleadings.' "Ohio Nat'l Life Ins. Co. v. United States, 922 F.2d 320, 325 (6th Cir.1990). However, documents attached to and referenced in a complaint are considered part of the pleadings and can therefore be referenced in deciding a motion brought under Rule 12(b)(6). See Nieman v. NLO, Inc., 108 F.3d 1546, 1554 (6th Cir.1997). Indeed, if a factual assertion in the pleadings is inconsistent with a document attached for support, the Court is to accept the facts as stated in the attached document. See The Mengel Co. v. Nashville Paper Prods. & Specialty Workers Union, 221 F.2d 644, 647 (6th Cir.1955).

In Ohio National Life, the Sixth Circuit laid out the procedural framework for motions brought under Rule 12(b)(1):

Rule 12(b)(1) motions to dismiss based upon subject matter jurisdiction generally come in two varieties. A facial attack on the subject matter jurisdiction alleged by the complaint merely questions the sufficiency of the pleading. In reviewing such a facial attack, a trial court takes the allegations in the complaint as true, which is a similar safeguard employed under 12(b)(6) motions to dismiss. On the other hand, when a court reviews a complaint under a factual attack, as here, no presumptive truthfulness applies to the factual allegations. Such a factual attack on subject matter jurisdiction commonly has been referred to as a "speaking motion." See generally 5A C. Wright & A. Miller, Federal Practice and Procedure § 1364, at 662-64 (West 1969). When facts presented to the district court give rise to a factual controversy, the district court must therefore weigh the conflicting evidence to arrive at the factual predicate that subject matter jurisdiction exists or does not exist. In reviewing these speaking motions, a trial court has wide discretion to allow affidavits, documents and even a limited evidentiary hearing to resolve disputed jurisdictional facts. (Citations omitted.)

922 F.2d at 325. Whereas a court cannot consider factual materials outside the pleadings, which go to the merits of the plaintiffs claim, without converting a Rule

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12(b)(6) motion into one for summary judgment, the consideration of "jurisdictional facts," in contrast, does not require a Rule 12(b)(1) motion to be converted into a summary judgment motion. See id.

II. Factual Background

The Court will set forth the facts as pled in the Complaint.² The NAMC is a non-profit corporation whose membership is comprised of minority general contractors and subcontractors who work and routinely bid on construction contracts in Montgomery County, Ohio.³ (Compl. ¶ 5; Abney Aff., Compl. at Ex. 1, ¶ 2.)⁴ Some time prior to the filing of the NAMC's Complaint, HUD approved a $26 million federal grant for a neighborhood redevelopment project in Dayton, Ohio, known as the Hope VI Program. (Compl.¶ 6.) Additional funds for the program were obtained from other, private sources, raising the project's total funding to over $44 million. (Id.) Defendant DMHA, a non-profit organization formed under the laws of Ohio, is the local governmental housing authority vested with the responsibility of overseeing the use of the HUD grant funds. (Id. ¶ 7.) Defendant Old Dayton View is a co-developer of the Hope VI Program. (Id. ¶ 8.) Defendant TGC is the majority shareholder in Old Dayton View. (Id. ¶ 9.) Defendant Oberer DVA is another shareholder in Old Dayton View. (Id. ¶ 10.) Defendant Oberer Residential is an affiliate of Oberer DVA. (Id. ¶ 11.)

Old Dayton View has indicated that it "desires to hire" Oberer Residential as the general contractor for each of the Hope VI Program developments, provided it can demonstrate to HUD's satisfaction that Oberer Residential's bid on each is the lowest pursuant to a competitive bidding process. (Id. ¶ 14; Procurement Policy & Guidelines ("Procurement Policy"), Compl. at Ex. 3, at unnumbered p. 2.)⁵ Old Dayton View has also indicated that, as an alternative means of selecting Oberer Residential as its general contractor, it "may" seek a waiver from mandatory compliance with a certain HUD regulation which generally requires a competitive bidding process to be used in the procurement of a general contractor. (Compl. ¶ 15; Procurement Policy at unnumbered p. 2.)

III. Analysis

The NAMC prays for several declaratory judgments, pursuant to 28 U.S.C.

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§ 2201 (creating a declaratory judgment remedy where there exists an "actual controversy"), namely that it has raised a case or controversy, that the Defendants must comply with certain HUD regulations, and that the actions proposed by the Defendants will violate said regulations and, in the process, federal civil rights laws. It also seeks a writ of mandamus to compel Secretary Martinez to enforce said regulations, and an injunction enjoining the Defendants from violating same. The Defendants contend that this Court lacks subject matter jurisdiction, that the NAMC has failed to exhaust its administrative remedies,⁶ and that it has failed to state a claim upon which relief can be granted.

As noted, Old Dayton View expressed its "desire" to hire Oberer Residential for each of the Hope VI Program developments. It stated that it would do so pursuant to the competitive bidding process, but that it might, in the alternative, seek to hire Oberer Residential pursuant to a waiver of the competitive bidding requirement.

24 C.F.R., Part 941, regulates the means by which HUD may assist local governmental housing authorities, and, more specifically, subpart F thereunder addresses how local housing authorities may use HUD grants in combination with funds received from other sources to finance public housing projects (referred to as "mixed financing" development projects). Pursuant to this subpart, the local housing authority can enter into a partnership with a third-party entity for assistance in developing such projects and/or for taking ownership of the housing units upon their completion. 24 C.F.R. §§ 941.600 & 941.604. Section...