De Pacheco v. Martinez

• Decision Date: 29 June 2007
• Docket Number: Civil Action No. B-06-094.
• Citation: 515 F.Supp.2d 773
• Parties: Ana [Lorena] Alonzo [Alcaraz] DE PACHECO, and Jose Angel Pacheco, Plaintiffs, v. Martha N. MARTINEZ, d/b/a Martinez Bookkeeping Services; Alicia Castro, d/b/a Christian Scribing Services, d/b/a Alicia Castro Income Tax Service; Erasmo Castro, Sr. & Jr.; Melissa [Castro] Infante; Magdaleno Infante; United States Department of Homeland Security; Alfonso R. DeLeon, District Director for the U.S. Citizenship and Immigration Services; United States Attorney General Alberto R. Gonzalez, Defendants.
• Court: U.S. District Court — Southern District of Texas

515 F.Supp.2d 773

Ana [Lorena] Alonzo [Alcaraz] DE PACHECO, and Jose Angel Pacheco, Plaintiffs, v. Martha N. MARTINEZ, d/b/a Martinez Bookkeeping Services; Alicia Castro, d/b/a Christian Scribing Services, d/b/a Alicia Castro Income Tax Service; Erasmo Castro, Sr. & Jr.; Melissa [Castro] Infante; Magdaleno Infante; United States Department of Homeland Security; Alfonso R. DeLeon, District Director for the U.S. Citizenship and Immigration Services; United States Attorney General Alberto R. Gonzalez, Defendants.

Civil Action No. B-06-094.

United States District Court, S.D. Texas, Brownsville Division.

June 29, 2007.

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Marlene A. Dougherty, Attorney at Law, Brownsville, TX, for Plaintiffs.

Martha N. Martinez, Brownsville, TX, pro se.

Alberto Pullen, Attorney at Law, Nancy Lynn Masso, Office of U S Attorney, Brownsville, TX, for Defendants.

OPINION AND ORDER

HILDA G. TAGLE, District Judge.

BE IT REMEMBERED that on June 29, 2007, the Court considered Plaintiffs' Statement of Jurisdiction, Dkt. No. 42, Defendants' Brief Regarding Jurisdiction, Dkt. No. 44, Federal Defendants' Statement Regarding Jurisdiction, Dkt. No. 45, Federal Defendants' Motion to Dismiss Pursuant to Rules 12(b)(1), (2) and 12(b)(6), Dkt. No. 20, and Defendants' Motion to Dismiss, Dkt. No. 21. For the following reasons, Federal Defendants' Motion to Dismiss is hereby GRANTED, Dkt. No. 20, and Defendants' Motion to Dismiss is hereby GRANTED, Dkt. No. 21.

I. Factual and Procedural Background

Ana Pacheco and Jose Pacheco (collectively "Plaintiffs") commenced this civil action by filing their complaint on May 25, 2006.¹ Dkt. No. 1. The complaint is composed of eight grounds. Grounds ONE through SIX stem from the alleged conduct of Martha N. Martinez; Alicia Castro; Erasmo Castro, Sr.; Erasmo Castro, Jr.; Melissa [Castro] Infante; and Magdaleno Infante (collectively "Private Defendants"). Id. at 2-8. Ground SEVEN stems from the alleged conduct of two of the collective Private Defendants: Alicia Castro and Erasmo Castro² d/b/a Christian Scribing Services (collectively the "Castros"). Ground EIGHT stems from the alleged conduct of the United States Department of Homeland Security (the "DHS"); Alfonso R. De Leon, District Director of U.S. Citizenship and Immigration Services; and Alberto R. Gonzales, U.S. Attorney General (collectively "Federal Defendants"). Id. at 8. Plaintiffs claim that Private Defendants' conduct, forming the basis of the complaint, occurred in Brownsville, Cameron County, Texas, and that Federal Defendants' conduct occurred in their respective offices within the United States of America. Dkt. No. 15, Ex. 1 at 1-2.

A. Private Defendants

Ana Pacheco is a Mexican citizen, and her husband, Jose Pacheco is a legal permanent resident of the United States of America. Did. No. 15, Ex. 1 at 1-2. Plaintiffs needed assistance in obtaining a U.S. immigrant or non-immigrant visa for Ma Pacheco. Id. at 3. Apparently, Plaintiffs sought Private Defendants' aid because Private Defendants, all Texas notaries public, allegedly "held themselves out as being able to represent [Plaintiffs] in immigration matters." Id. at 2-7. Plaintiffs claim that Private Defendants then proceeded, "either singly, or in concert with each other," to provide Plaintiffs with services in these various immigration matters. Id. Plaintiffs contend that the nature of these service rose to the level of legal representation, which constituted the unauthorized practice of law in violation of Texas³ and federal law.⁴ See id. at 2-6.

During the scope of their alleged representation, Private Defendants told Plaintiffs what immigration forms they had to complete in order to receive "certain immigration benefits." Id. at 3-5. Plaintiffs maintain that "[s]ome of the immigration forms were not required to be filed by [Plaintiffs]," some forms filed were meant to apply for benefits for which Ana Pacheco was not eligible, and some forms contained "false" and "misleading" information. Id. at 3-4. Private Defendants are alleged to have "knowingly caused the delivery of [these] immigration form[s] to the [DHS]" and the U.S. Citizenship and Immigration Services (the "CIS").⁵ Id. at 5. The representation is alleged to have run from on or about September 1999 through on or about June 8, 2005, when Plaintiffs became aware that Private Defendants were misrepresenting themselves. Id. at 2-6. Plaintiffs claim to have paid for Private Defendants' services. Id. at 5. But ultimately, they claim not to have received the immigration benefits promised. Id. at 2-6.

Additionally, Plaintiffs claim that the Castros laundered the money they illegally obtained from Plaintiffs. Id. at 7. The Castros allegedly invested the money in real estate ventures through a non-profit organization called "Iglesia De Cristo-Tyler St." Id. Christian Scribing Services, owned by Alicia and Erasmo Castro, is claimed to be "the successor in interest of the properties of Iglesia De Cristo-Tyler St." Id.

As to the collective Private Defendants, Plaintiffs have based Grounds ONE through SIX on the following causes of action: Ground ONE, negligent misrepresentation;⁶ Ground TWO, fraud; Ground THREE, negligence predicated on the breach of 18 U.S.C. § 1505 (obstruction of proceedings before agencies);⁷ Ground FOUR, breach of implied contract; Ground FIVE, negligence predicated on the breach of 18 U.S.C. § 1341 (mail fraud); and Ground SIX, 18 U.S.C. § 1964(c) (civil RICO). As to the Castros, Plaintiffs have based Ground SEVEN on a negligence cause of action predicated on the breach of 18 U.S.C. § 1956⁸ (federal money-laundering) and Texas Penal Code § 34.01 (Texas money-laundering).

Private Defendants filed a motion to dismiss Plaintiffs' claims pursuant to Rules 12(b)(1), (2), and (6). Dkt. No. 21. To better assess the validity of a dismissal based on a Rule 12(b)(1) motion, the Court ordered the Parties to brief federal jurisdiction, specifically under 28 U.S.C. § 1331, the federal-question jurisdiction statute. In their brief addressing jurisdiction, Plaintiffs generally argue that § 1331 grants this Court federal-question jurisdiction over their case because "certain state-law claims" against Private Defendants "implicate significant federal issues." Dkt. No. 42, at 7-8. Furthermore, Plaintiffs invoke 28 U.S.C. § 1367 as a way for the Court to exercise supplemental jurisdiction over the state-law claims that do not arise under federal law. Dkt. No. 15, Ex. 1 at 1. The Court will discuss Plaintiffs' specific federal-question arguments infra.

B. Federal Defendants

Ground EIGHT of Plaintiffs' complaint is against Federal Defendants. Plaintiffs do not state a specific cause of action against them, but rather, they make several general allegations. Essentially, Plaintiffs allege that Federal Defendants, specifically the DHS (and the CIS), are "complicit" in Private Defendants' illicit dealings with Plaintiffs. Id. at 8. Plaintiffs claim that the CIS "has access to [a] list of accredited organizations and accredited representatives authorized by the Board of Immigration Appeals to represent persons in immigration matters." Id. Plaintiffs argue that Federal Defendants have a duty to Plaintiffs, and others similarly situated, to allow only such authorized individuals to engage in representation of others before the CIS. Id. This would require the CIS to compare the names of those appearing on its list of accredited representatives against the names of those who attempt to represent others before the CIS. See id. Those whose names do not appear on the list should not be allowed to engage in representation. See id. According to Plaintiffs, Federal Defendants' complicity in Private Defendants' conduct is apparent since Private Defendants were allowed to continue filing forms and applications on behalf of Plaintiffs, despite the fact that the respective Private Defendants were not on the list of accredited individuals authorized to represent persons in immigration matters. See id.

Plaintiffs now seek review of the CIS's decisions to not enforce its pre-existing regulation as to who is authorized to represent others before the agency and to not promulgate new rules "for the detection of fraudulent activities and the unauthorized practice of law" by notaries public before the CIS.⁹ See id. at 9.

Federal Defendants filed a motion to dismiss Plaintiffs' claims pursuant to Rules 12(b)(1), (2), and (6). Dkt. No. 20. The Parties briefed jurisdiction, and the Plaintiffs argued that federal-court jurisdiction exists under the Administrative Procedure Act (the "APA"). Dkt. No. 42, at 2-7.

II. Legal Standards

A. § 1331 Federal-Question Jurisdiction

The United States federal district courts are courts of limited jurisdiction. Le Mieux Bros. v. Tremont Lumber Co., 140 F.2d 387, 389 (5th Cir.1944); 13 CHARLES ALAN WRIGHT, ARTHUR R. MILLER, & EDWARD H. COOPER, FEDERAL PRACTICE AND PROCEDURE § 3522 (2d ed.1984). They have the power to hear classes of cases only as authorized by Congress. See id. Through 28 U.S.C. § 1331, Congress has granted the district courts general federal-question jurisdiction. Section 1331 provides that "[t]he district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States." Essentially, based on § 1331's statutory grant of jurisdiction, the district courts have federal-question jurisdiction to hear suits that "arise under" federal law. Id. A suit arises under federal law based on either of two propositions known as the Holmes rule and the Smith rule.

Justice Holmes' rule states that "[a] suit arises under the law that creates the cause of action." American Well Works Co. v. Layne & Bowler Co., 241 U.S. 257, 260, 36 S.Ct. 585, 60 L.Ed. 987 (1916). When federal law provides a cause of action, suits brought under that federal cause of action arise under...