Taylor v. Federal Home Loan Bank Bd.

• Citation: 661 F. Supp. 1341
• Decision Date: 19 November 1986
• Docket Number: Civ. A. No. CA 3-84-0578-G.
• Parties: W.W. TAYLOR and Southwest Mortgage Service Corporation, Plaintiffs, v. FEDERAL HOME LOAN BANK BOARD, et al., Defendants.
• Court: U.S. District Court — Northern District of Texas

661 F. Supp. 1341

W.W. TAYLOR and Southwest Mortgage Service Corporation, Plaintiffs, v. FEDERAL HOME LOAN BANK BOARD, et al., Defendants.

Civ. A. No. CA 3-84-0578-G.

United States District Court, N.D. Texas, Dallas Division.

November 19, 1986.

COPYRIGHT MATERIAL OMITTED

Corbet F. Bryant, Jr., Carrington, Coleman, Sloman & Blumenthal, Dallas, Tex., for Michael F. Pezzulli.

Wm. B. Kirley, Rodey, Dickason, Sloan, Akin & Robb, Albuquerque, N.M., for FSLIC.

James T. Lantelme, Washington, D.C., for FHLBB and FSLIC.

Frederick W. Shipman, Nemuel E. Pettie, Dallas, Tex., for plaintiffs.

Stafford Hutchinson, Asst. U.S. Atty., Dallas, Tex., for William Churchill, Leonard McManaman, William Capshaw, Gary Adams, Dorothy Nichols and Rosemary Stewart.

James C. Todd, Asst. Atty. Gen., Mary F. Keller, J.P. Wise, Jim Mattox, Austin, Tex., for Earl Hall and LL Bowman.

MEMORANDUM ORDER

FISH, District Judge.

Before the court are the defendants Federal Home Loan Bank Board ("Bank Board" or "Board") and Federal Savings and Loan Insurance Corporation ("FSLIC") (sometimes referred together as the "federal agency defendants") and Gary Adams ("Adams"), William Capshaw ("Capshaw"), Leonard McManaman ("McManaman"), Dorothy Nichols ("Nichols"), and Rosemary Stewart ("Stewart"), and William Churchill ("Churchill"), all agents or employees of the Board (sometimes referred to hereinafter as the "federal employee defendants"). All of these defendants seek dismissal of the claims asserted against them.

For the reasons stated below, the motions to dismiss are granted.

1. Sufficiency of Service of Process on the Federal Agency Defendants

Service on the Board must be made according to the provisions of 12 C.F.R. § 551.1, which provides that a copy of a summons and complaint must (1) be delivered to the U.S. Attorney or his designee in the district in which the complaint was filed, (2) be sent by certified or registered mail to the Attorney General of the United States in Washington, D.C., and (3) be sent by certified or registered mail to the Secretary of the Board in Washington, D.C.

Service of process upon FSLIC is governed by 12 U.S.C. § 1725(c)(4) and 12 C.F.R. § 568.1. These sections require that service of process on FSLIC be made on a designated agent of FSLIC or the Board and by certified or registered mail to FSLIC in Washington, D.C.

Plaintiffs have failed to comply with these service requirements because they have neither served the Attorney General of the United States as required to complete service on the Board, nor have they served FSLIC in Washington, D.C. as they must to complete service on FSLIC. Because these defects may be curable, however, the court will also discuss other non-curable grounds for dismissal of the claims against the federal agency defendants.

2. Claims Under Section 1983

Plaintiffs' complaint is based in part on alleged violation of 42 U.S.C. § 1983, which prohibits the deprivation of rights under color of state law. The Supreme Court considered the reach of § 1983 in District of Columbia v. Carter, 409 U.S. 418, 93 S.Ct. 602, 34 L.Ed.2d 613 (1973), and held that because the District of Columbia was neither a state nor a territory, a claim against it based on section 1983 could not be sustained. Id. at 432-33, 93 S.Ct. at 610. In its discussion of the history of section 1983, the court stated that the statute was passed to enforce the provisions of the Fourteenth Amendment to the Constitution, which was limited in scope to deprivations of rights under color of state or territorial law. Id. at 423-24, 93 S.Ct. at 605-606. Thus, "actions of the Federal Government and its officers are at least facially exempt from Section 1983's proscriptions." Id. at 424-25, 93 S.Ct. at 606-607.

It is clear that the actions of the federal employee defendants alleged in the complaint were taken under color of federal law. For example, the examinations of State Savings and Loan Association of Clovis, New Mexico performed by Adams, complained of at paragraphs 57, 58, and 59 in the complaint, were performed under the authority of 12 U.S.C. § 1726(b) and 12 C.F.R. §§ 500.18 and 563.17-1. The order of prohibition proceeding allegedly requested by Capshaw, McManaman, and Churchill as detailed at paragraphs 58 and 59, and the order of prohibition allegedly negotiated by Stewart and described at paragraph 60, were under the authority of § 407(m) of the National Housing Act, 12 U.S.C. § 1730(m). Plaintiffs expressly allege that Stewart was negotiating "on behalf of" the Board and FSLIC. Plaintiffs admit that Nichols was representing the Federal Home Loan Bank Board when she allegedly made the representations claimed at page 2 and in paragraph 61 of the complaint.

Federal regulations establish that information obtained by the Bank Board may be provided to state regulatory authorities. 12 C.F.R. § 505.5(b). Thus, the alleged conduct of the federal employee defendants with regard to this information arises under color of federal law.

Because the actions taken by the federal employee defendants were taken under color of federal law, the federal employee defendants may not be sued under § 1983. Campbell v. Amax Coal Company, 610 F.2d 701, 702 (10th Cir.1979).

In First Savings & Loan Association v. First Federal Savings & Loan Association of Hawaii, 547 F.Supp. 988 (D.Hawaii 1982), employees of the Board were sued under § 1983 for conspiring with the Director of Regulatory Agencies of Hawaii under color of state law to cause a liquidity crisis in order to place the association into receivership and to sell its assets to another institution. On a motion to dismiss the § 1983 claims, the court held that "the agents of FSLIC and FHLBB were acting under the color of federal law and are not, therefore, persons within the meaning of section 1983." The court found the allegations of conspiracy in the complaint "rather vague and mostly conclusionary" and thus insufficient under § 1983 to show that "FSLIC and FHLBB were in some fashion acting under the color of state law." Id. at 999.

Plaintiffs' complaint in this case is also vague and conclusory. It alleges no facts that tie the federal employee defendants' actions with a claimed conspiracy by the state defendants. Mere allegations of conspiracy, absent specific admissible supporting facts, are insufficient to permit a claim to be brought under § 1983. Further, plaintiffs must show in their pleading that the defendants violated rights of the plaintiffs that were clearly established at time of the conduct at issue. Davis v. Scherer, 468 U.S. 183, 104 S.Ct. 3012, 3021, 82 L.Ed.2d 139 (1984). Failure to do so mandates dismissal. See Elliott v. Perez, 751 F.2d 1472, 1476-82 (5th Cir.1985).

The Board, FSLIC, and their employees and agents were acting under color of federal law and are thus exempt from suit under § 1983. Plaintiffs' § 1983 claims against all of these defendants must therefore be dismissed.

3. Claims Under Section 1981

In Penn v. Schlesinger, 490 F.2d 700, 703 (5th Cir.1973), rev'd on other grounds, 497 F.2d 970 (1974) (en banc), the Fifth Circuit considered whether a claim under 42 U.S.C. § 1981 could be maintained against the federal government. The court found that § 1981 contained no explicit waiver of sovereign immunity and that because such a waiver cannot be implied, a § 1981 suit for damages is barred. Id. at 705.¹See also Garcia v. United States, 666 F.2d 960, 965 (5th Cir.), cert. denied, 459 U.S. 832, 103 S.Ct. 73, 74 L.Ed.2d 72 (1982) (waiver of immunity must be found in statute giving rise to the cause of action). Dismissal is appropriate because damage claims are barred against the Board and FSLIC by the doctrine of sovereign immunity.

Nor have plaintiffs made any claims for equitable relief against the federal agency defendants that would permit them to circumvent the bar of sovereign immunity. Any amendment of plaintiffs' complaint to request such relief would be futile because — as outlined below — they have failed to state a claim under § 1981.

In order to vest a court with jurisdiction under § 1981,² it is well settled that a plaintiff must make allegations of discrimination based on race. Olivares v. Martin, 555 F.2d 1192, 1195-96 (5th Cir.1977). Absent such allegations of racial discrimination, the complaint should be dismissed under Fed.R.Civ.P. 12(b)(6) for failure to state a claim for relief. Id.; Campbell v. Gadsden County District School Board, 534 F.2d 650, 653 n. 3 (5th Cir.1976).

Even if a bare allegation of racial discrimination were added to the complaint, it would still be insufficient to state a cause of action. The allegations contained in the complaint are so vague, conclusory, and devoid of factual support that dismissal of the complaint is warranted. Elliott v. Perez, above, 751 F.2d at 1479 n. 20.

Because of the defects discussed above, plaintiffs have failed to state a claim under § 1981; the § 1981 claims must therefore be dismissed.

4. Claims Under Section 1985

There are three subsections to 42 U.S.C. § 1985. Subsections (1) and (2) are not applicable to the facts alleged by plaintiffs.³ The law in this circuit requires dismissal of claims brought under subsection (3) of § 1985 against federal officials if they acted under color of federal law. Seibert v. Baptist, 594 F.2d 423, 429 (5th Cir.), modified on other grounds, 599 F.2d 743 (1979), cert. denied, 446 U.S. 918, 100 S.Ct. 1851, 64 L.Ed.2d 271 (1980); Mack v. Alexander, 575 F.2d 488, 489 (5th Cir.1978).

Even assuming that federal officials are suable under § 1985(3), however, the complaint fails to state the necessary elements of a claim under that section. Under Griffin v. Breckenridge, 403 U.S. 88, 102-03, 91 S.Ct. 1790, 1798-99, 29 L.Ed.2d 338 (1971), four elements must be shown: (1) a conspiracy (2) for the purpose of depriving a person or class of persons of equal protection of the laws (3) shown by an overt act in furtherance of the conspiracy (4)...