United States District Court, Western District of Virginia, Danville Division
CHRISTOPHER B. JULIAN, ET AL., Plaintiffs,
JAMES RIGNEY, ET AL., Defendants.
Jackson L. Kiser, Senior United States District Judge
Plaintiffs Christopher B. Julian and Renee G. Julian (“Plaintiffs”) applied for and were denied a Farm Ownership loan through the Farm Service Agency (“FSA”) of the U.S. Department of Agriculture (“USDA”). As a result of the denial, Plaintiffs, proceeding pro se and in forma pauperis, filed suit in this Court against the USDA, seven federal employees, and one state employee. On October 18, 2013, state employee Wanda Johnson filed a Motion to Dismiss [ECF No. 16]. Plaintiffs filed a Motion for Partial Summary Judgment on January 6, 2014 [ECF No. 27], and the remaining Federal Defendants collectively filed a Motion to Dismiss on January 14, 2014 [ECF No. 28]. Each of the three dispositive motions was met with an appropriate written response, and was followed by a reply brief.
On February 25, 2014, I heard oral arguments from all sides, outlining their respective positions on the facts, law, and agency record before the Court. Having thoroughly reviewed the record and arguments of counsel, the matter is now ripe for decision. For the reasons stated below, I will GRANT Defendant Johnson’s Motion to Dismiss, DENY Plaintiffs’ Motion for Partial Summary Judgment, and GRANT IN PART and DENY IN PART Federal Defendants’ Motion to Dismiss. Specifically, I will DENY Federal Defendants’ Motion to Dismiss with respect to Plaintiffs’ request for judicial review of the final agency decision, and GRANT the Motion with respect to all other claims against the USDA, and all claims against the following employee-defendants, in any capacity: (1) James Rigney; (2) Ronald Kraszewski; (3) J. Calvin Parrish; (4) Jerry L. King; (5) Roger Klurfeld; (6) Christopher P. Beyerhelm; and (7) Barbara McLean. The USDA will remain as the sole defendant, and the suit will proceed as an action for judicial review of the final decision of USDA National Appeals Division Director Roger Klurfeld.
STATEMENT OF FACTS AND PROCEDURAL HISTORY
On October 10, 2012, Plaintiffs Christopher B. Julian and Renee G. Julian applied for a Farm Ownership (“FO”) loan through the Farm Service Agency (“FSA”) of the U.S. Department of Agriculture (“USDA”). (Compl. Ex. A, at 1 [ECF No. 3].) The FSA, acting through Farm Loan Officer James Rigney, issued a Notice of Complete Application on November 21, 2012, informing Plaintiffs that their application was deemed complete as of November 19, 2012. (Id. Ex. D, at 3.) On November 28, 2012, FSA Farm Loan Manager Ronald Kraszewski issued a letter informing Plaintiffs that their loan application was denied. (Id. Ex. A.) In the letter, the FSA explained that Plaintiffs’ proposed use of loan funds was not authorized for the type of loan requested,  and notified Plaintiffs of their rights to appeal. (Id. Ex. A, at 1–3.) Plaintiffs were informed that they may: (1) request reconsideration by the Farm Loan Manager; (2) request mediation through the Virginia state mediation program, as part of the FSA’s informal appeals process; or (3) appeal the determination to the National Appeals Division (“NAD”) of the USDA. (Id. Ex. A, at 2–3.)
On December 10, 2012, Plaintiffs requested mediation via a letter to the Virginia Agricultural Mediation Program (“VAMP”) with Virginia State University. (Id. Ex. F.) VAMP Project Director Wanda Johnson informed Plaintiffs, in an email dated January 10, 2013, that their request was timely, and indicated that she would “be in touch with [Plaintiffs] probably tomorrow regarding the mediation.” (Id. Ex. C.) Unbeknownst to Plaintiffs, however, the USDA had revoked its certification of the Virginia state mediation program as of October 2012. (Id. at 6; Ex. C.) It remains unclear precisely how and when officers of the FSA, or VAMP itself, learned of the USDA revocation.
Plaintiffs claim that they made several attempts to contact VAMP Project Director Johnson and “USDA et al” regarding mediation. (Id. at 6.) On January 24, 2013, Plaintiffs allege that they contacted the FSA through an online assistance system, and first became aware of the loss of certification in a subsequent email exchange. (Id. at 6; Ex. G, at 1.) Following this exchange, Plaintiffs received a letter from FSA State Executive Director J. Calvin Parrish that was dated January 24, 2013. (Id. Ex. H.) The letter indicated that “[a]t this time, Virginia does Second, while funds may be used to make capital improvements that are “essential to the farming operation, ” the FSA determined that “improvements completed as you have proposed are not essential, ” and “exceed what is adequate to meet the family’s needs as defined by FSA.” (Id.) Finally, the FSA alleged that Plaintiffs requested the loan to “make loan payments, ” and indicated that “FO loan funds may not be used to make loan payments, i.e., refinance loans.” (Id.) not have a State Certified Mediation Program, ” and informed Plaintiffs that they would need to pay for half the cost of mediation if they choose to pursue it. (Id. Ex. H, at 1.) The letter included a list of registered mediators in Virginia.
In a letter dated February 5, 2013, Plaintiffs informed FSA State Executive Director Parrish that they had requested mediation through the North Carolina Agricultural Mediation Program (“NCAMP”). (Id. at 6–7; Ex. I.) Noting that they were asked to pay a credit report fee of $20.25 with their original loan application, Plaintiffs requested a copy of their credit reports. (Id. Ex. I.) In a letter dated February 8, 2013, FSA Farm Loan Officer Rigney provided Plaintiffs with a credit report; the report was also dated February 8, 2013. (Id. Ex. K.) As part of the NCAMP mediation process, Plaintiffs signed an agreement to mediate and a confidentiality statement, indicating that Plaintiffs would keep confidential any information learned during the mediation process. (Id. Ex. N.)
On approximately March 13, 2013, Plaintiffs made several Freedom of Information Act (“FOIA”) requests through the FOIA Office of the FSA. (Id. at 11; Ex. W.) In a letter dated March 22, 2013, FSA State Executive Director Parrish responded with a number of documents that were responsive to Plaintiffs’ request. (Id. Ex. W.)
In addition to requesting mediation, Plaintiffs appealed their loan denial to the USDA’s National Appeals Division (“NAD”). (Id. Exs. Q, AE.) Plaintiffs’ request for appeal was complete on March 4, 2013. (Id. Ex. Q, at 1.) During the prehearing, held on March 19, 2013, the FSA withdrew one of its justifications (that Plaintiffs were essentially trying to refinance an existing loan) as a reason for the loan denial. (Id. at 8; Ex. U, at 2.) As a result, NAD Hearing Officer Jerry L. King informed Plaintiffs that this issue would not be allowed as a point of discussion during the hearing. (Id. at 8.) Plaintiffs objected to this restriction in a letter to Hearing Officer King, dated March 22, 2013, and asserted their belief that the FSA had inappropriately accessed their credit reports on February 8, 2013. (Id. Ex. R.)
In a letter to Plaintiffs, dated March 28, 2013, Hearing Officer King declined to reconsider his ruling on the scope of the hearing, and laid out the core issues for discussion. (Id. Ex. U, at 2.) With respect to their credit report grievances, Hearing Officer King directed Plaintiffs to the USDA Office of Inspector General. (Id.) Noting that Plaintiffs had accused the FSA of prejudicial bias, he provided instructions for completing a USDA Program Discrimination Complaint Form with the USDA’s Office of Adjudication. (Id. Ex. U, at 2–3.) Hearing Officer King conducted an in-person hearing of Plaintiffs’ appeal on April 17, 2013, and issued his conclusion that the loan denial was not erroneous on May 16, 2013. (Id. Ex. AE, at 2, 5.) Plaintiffs subsequently requested a Director’s Review of the NAD determination,  and on July 24, 2013, NAD Director Roger Klurfeld issued a decision upholding the NAD Appeal Determination. (Id. Ex. AA.)
Plaintiffs, proceeding pro se and in forma pauperis, filed suit in this Court on September 16, 2013. (Id. at 1.) In addition to a request for judicial review of the final agency decision, Plaintiffs allege a denial of due process and a number of other tort claims, including negligence, fraud, fraudulent misrepresentation, conspiracy, racketeering, and violations of the Fair Credit Reporting Act. Plaintiffs name nine (9) defendants, including eight (8) federal agencies or employees (the U.S. Department of Agriculture; USDA FSA Loan Officer James Rigney; USDA FSA Loan Manager Ronald A. Kraszewski; USDA FSA Executive Director J. Calvin Parrish; USDA FSA Deputy Administrator for Farm Loan Programs Chris P. Beyerhelm; USDA FSA National FOIA/PA Specialist Barbara McLean; USDA NAD Hearing Officer Jerry L. King; and USDA NAD Director Roger Klurfeld) (“Federal Defendants”), and a single state employee, VAMP Project Director Wanda Johnson (“Defendant Johnson”). (Id. at 1–3.)
In addition to an ad damnum clause requesting approximately $14 million in damages (representing $1 million per month since January 1, 2013), Plaintiffs ask that $1 million be awarded to each of five other individuals who are not parties before the Court. (Id. at 21–22.) Plaintiffs request that “all settlement amounts be net of taxes, ” and seek refunds in the amount of $20.25 for a credit report and $350.00 for mediation costs, both compounded with interest at 24.99%. (Id. at 22–23.) Plaintiffs ask the Court to require the USDA to prosecute FSA Farm Loan Manager Ronald A. Kraszewski for perjury, and require “USDA et al” to “create and provide a comprehensive guide for appellant rights.” (Id.) Plaintiffs also request attorney’s fees for self-representation. (Id. at 23.)
On October 18, 2013, Defendant Johnson filed a Motion to Dismiss [ECF No. 16]. Plaintiffs filed a Response in Opposition on November 8, 2013 [ECF No. 22], and Defendant Johnson filed a Reply on November 15, 2013 [ECF No. 26]. On January 6, 2014, Plaintiffs filed a Motion for Partial Summary Judgment on paragraph 11 of the Complaint [ECF No. 27].
On January 14, 2014, Federal Defendants collectively filed a Motion to Dismiss [ECF No. 28], and a Memorandum in support thereof [ECF No. 29]. On January 29, 2014, Federal Defendants filed a Memorandum in Opposition to Plaintiffs’ Motion for Partial Summary Judgment [ECF No. 37]. Plaintiffs filed a Memorandum in Opposition to Federal Defendants’ Motion to Dismiss on February 3, 2014 [ECF No. 38],  and a Declaration in Support thereof [ECF No. 39]. Plaintiffs filed a Reply to Federal Defendants’ Response in Opposition to Partial Summary Judgment on February 5, 2014 [ECF No. 40]. Federal Defendants filed a Reply Brief to Plaintiff’s Response to their Motion to Dismiss on February 10, 2014 [ECF No. 41]. On February 25, 2014, I heard oral arguments from all parties on the three motions before the Court. After thorough briefing, the matter is now ripe for decision.
STANDARD OF REVIEW
As a preliminary matter, pro se complaints must be construed liberally, imposing “less stringent standards than the formal pleadings drafted by lawyers.” Erickson v. Pardus, 551 U.S. 89, 94 (2007) (quoting Estelle v. Gamble, 429 U.S. 97, 106 (1976)). The Federal Rules of Civil Procedure mirror many of the same concerns, and require pleadings to be “construed so as to do justice.” Fed.R.Civ.P. 8(e). To the extent possible, I must therefore look beyond the form of Plaintiffs’ Complaint, and evaluate its claims on the basis of their substance. Regardless of how inartfully pleaded it may be, Plaintiffs should not be penalized for the form or inelegance of their Complaint. I cannot, however, act as Plaintiffs’ attorney. See Pliler v. Ford, 542 U.S. 225, 231 (2004) (“District judges have no obligation to act as counsel or paralegal to pro se litigants.”). Although I may liberally construe the factual allegations in the Complaint, I must apply the proper legal standard in testing the allegations.
I. Rule 12(b)(1) Motion to Dismiss
Federal Defendants, in part, move to dismiss for lack of subject matter jurisdiction pursuant to Fed.R.Civ.P. 12(b)(1). When a defendant presents other defenses in addition to challenging the subject matter jurisdiction of the court, the question of subject matter jurisdiction must be resolved first. See Owens-Illinois, Inc. v. Meade, 186 F.3d 435, 442 n.4 (4th Cir. 1999). Plaintiffs bear the burden of proving subject matter jurisdiction by a preponderance of the evidence. See Evans v. B.F. Perkins Co., 166 F.3d 642, 647 (4th Cir. 1999); Richmond, Fredericksburg & Potomac R.R. Co. v. United States, 945 F.2d 765, 768 (4th Cir. 1991).
In contrast to “the procedure in a 12(b)(6) motion where there is a presumption reserving the truth finding role to the ultimate factfinder, ” when a defendant challenges subject matter jurisdiction pursuant to Rule 12(b)(1), the court “weighs the evidence to determine its jurisdiction.” Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir. 1982) (internal citations omitted). The court accepts all well-pleaded factual allegations as true, but is not obligated to accept a plaintiff’s legal arguments or conclusions. Glenn v. Lafon, 427 F.Supp.2d 675, 677 (W.D. Va. 2006) (citing Jenkins v. McKeithen, 395 U.S. 411 (1969); Falwell v. City of Lynchburg, 198 F.Supp.2d 765, 771–72 (W.D. Va. 2002)).
When considering subject matter jurisdiction under Rule 12(b)(1), the court “regard[s] the pleadings as mere evidence on the issue, and may consider evidence outside the pleadings without converting the proceeding to one for summary judgment.” Evans, 166 F.3d at 647 (quoting Richmond R.R. Co., 945 F.2d at 768). In such a case, the court applies the standard applicable to a motion for summary judgment, under which the nonmoving party must set forth specific facts beyond the pleadings to show that a genuine issue of material fact exists. Glenn, 427 F.Supp.2d at 677 (citing Richmond R.R. Co., 945 F.2d at 768). A complaint will be dismissed for lack of subject matter jurisdiction only if a plaintiff can prove no set of facts in support of his claim which would entitle him to federal subject matter jurisdiction, and the moving party is entitled to prevail as a matter of law. Glenn, 427 F.Supp.2d at 677; Richmond R.R. Co., 945 F.2d at 768 (internal citations omitted).
II. Rule 12(b)(6) Motion to Dismiss
To survive a Rule 12(b)(6) motion to dismiss, a complaint must contain “sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556). The standard of plausibility “is not akin to a ‘probability requirement, ’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. (citing Twombly, 550 U.S. at 556). “Where a complaint pleads facts that are ‘merely consistent with’ a defendant’s liability, it ‘stops short of the line between possibility and plausibility of ‘entitlement to relief.’” Id. (citing Twombly, 550 U.S. at 557).
In determining facial plausibility, I must accept all factual allegations contained in the complaint as true. Id. The complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief” and sufficient “[f]actual allegations . . . to raise a right to relief above the speculative level . . . .” Twombly, 550 U.S. at 555 (internal citations omitted). The complaint must therefore “allege facts sufficient to state all the elements of [the] claim.” Bass v. E.I. DuPont de Nemours & Co., 324 F.3d 761, 765 (4th Cir. 2003). Although “a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, ” a pleading that merely offers “labels and conclusions” or “a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555.
III. Rule 56 Motion for Partial Summary Judgment
Summary judgment is appropriate where there is no genuine dispute of material fact and the movant is entitled to judgment on a claim or defense as a matter of law. Fed.R.Civ.P. 56(a); George & Co. LLC v. Imagination Entertainment Ltd., 575 F.3d 383, 392 (4th Cir. 2009). A genuine dispute of material fact exists “[w]here the record taken as a whole could . . . lead a rational trier of fact to find for the nonmoving party.” Ricci v. DeStefano, 557 U.S. 557, 586 (2009) (internal quotation marks and citations omitted); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A genuine dispute cannot be created where there is only a scintilla of evidence favoring the nonmovant; rather, the Court must look to the quantum of proof applicable to the claim to determine whether a genuine dispute exists. Scott v. Harris, 550 U.S. 372, 380 (2007); Anderson, 477 U.S. at 249-50, 254. A fact is material where it might affect the outcome of the case in light of the controlling law. Anderson, 477 U.S. at 248.
Insofar as there is a “genuine” dispute about the facts, those facts are taken in the light most favorable to the non-moving party. Scott, 550 U.S. at 380. At this stage, however, the Court’s role is not to weigh the evidence, but simply to determine whether a genuine dispute exists making it appropriate for the case to proceed to trial. Anderson, 477 U.S. at 249. “[S]ummary judgment is particularly appropriate . . . [w]here the unresolved issues are primarily legal rather than factual” in nature. Koehn v. Indian Hills Cmty. Coll., 371 F.3d 394, 396 (8th Cir. 2004).
Plaintiffs have adopted a “kitchen sink” approach to litigation, but in essence the Complaint argues that negligence and deliberate misconduct were so prevalent throughout the FSA loan application process that it amounts to a deprivation of constitutional due process. To buttress this theory, Plaintiffs accuse Federal Defendants and Defendant Johnson of negligence, fraud, fraudulent misrepresentation, conspiracy, racketeering, and violation of the Fair Credit Reporting Act (“FCRA”). In addition to their constitutional claims, Plaintiffs seek judicial review of the final agency decision of the USDA. While Plaintiffs have provided a great deal of information, there is a general lack of clarity with respect to the assignment of claims against particular parties.
Accordingly, I construe Plaintiffs’ claims as follows: (1) constitutional tort claims against Federal Defendants pursuant to Bivens v. Six Unknown Named Agents, 403 U.S. 388 (1971); (2) constitutional tort claims against Defendant Johnson pursuant to 42 U.S.C. § 1983; (3) assorted statutory and tort claims against Federal Defendants; (4) assorted statutory and tort claims against Defendant Johnson; and (5) a request for judicial review of the final agency decision pursuant to the Administrative Procedures Act (“APA”). I assume that Plaintiffs are suing all parties, except the USDA, in both their individual and official capacities. Plaintiffs primarily seek money damages, but also request two forms of equitable relief: (1) that the Court require Federal Defendants to “create and provide a complete and comprehensive guide for appellant rights;” and (2) require Federal Defendants to “prosecute to the fullest extent of the law Ronald A. Kraszewski for perjury.” (Compl. 22–23.)
A court facing a 12(b)(6) motion to dismiss “can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth.” Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). Thus, I first note that Plaintiffs cannot prevail in their effort to obtain money damages on behalf of five individuals who are neither before the Court, nor parties to the current action. See Kowalski v. Tesmer, 543 U.S. 125, 129–30 (2004) (A party “generally must assert his own legal rights and interests, and cannot rest his claim to relief on the legal rights or interests of third parties.”). Further, attorney’s fees are not available for self-representation. See, e.g., Kay v. Ehrler, 499 U.S. 432, 433–38 (1991) (holding that even an attorney who represented himself in a successful civil rights case could not recover attorney’s fees under 42 U.S.C. § 1988).
Further, Plaintiffs fail to allege any adequate basis for the provision of equitable relief. They fail to identify any specific injury that will be redressed if the Court orders Federal Defendants to develop a comprehensive guide to appellants’ rights. Moreover, their request that I order the prosecution of Ronald Kraszewski for perjury would violate constitutional separation of powers. Accordingly, I will confine the discussion to Plaintiffs’ claims for money damages and their request for judicial review of the agency decision.
Ultimately, as discussed in Parts I–VI infra, Plaintiffs fail to state a claim for denial of procedural or substantive due process. The Eleventh Amendment entitles Defendant Johnson to immunity from suit for damages claims in her official capacity. Sovereign immunity entitles the USDA and individual Federal Defendants to immunity from suit for damages claims in their official capacities. Plaintiffs fail to allege that the individual Federal Defendants violated any clearly established statutory or constitutional rights, or otherwise acted outside of the scope of their employment. Accordingly, the individual Federal Defendants are entitled to qualified immunity in their individual capacities. The request for judicial review of the final agency decision survives dismissal. Plaintiffs fail to establish that they are entitled to partial summary judgment.
I. Sovereign Immunity and the Eleventh Amendment
Plaintiffs bring claims against the USDA, individual Federal Defendants, and Defendant Johnson in their official capacities. If these claims are prohibited by the doctrine of sovereign immunity and the Eleventh Amendment, however, this Court is without jurisdiction to entertain them. Sovereign immunity is jurisdictional in nature; “[i]t is axiomatic that the United States may not be sued without its consent and that the existence of consent is a prerequisite for jurisdiction.” United States v. Mitchell, 463 U.S. 206, 212 (1983). The same is true with respect to the Eleventh Amendment; “although a case may arise under the Constitution and laws of the United States, the judicial power does not extend to it if the suit is sought to be prosecuted against a [state without] her consent, by one of her own citizens.” Principality of Monaco v. Mississippi, 292 U.S. 313, 322 (1934) (citing Hans v. Louisiana, 134 U.S. 1 (1890)).
A. U.S. Department of Agriculture
“Absent a waiver, sovereign immunity shields the Federal Government and its agencies from suit.” FDIC v. Meyer, 510 U.S. 471, 475 (1994) (citing Loeffler v. Frank, 486 U.S. 549, 554 (1988); Federal Housing Administration v. Burr, 309 U.S. 242, 244 (1940)). With respect to allegations against the USDA, Plaintiffs’ claims fall into one of two categories: (1) tort claims against the USDA; or (2) a request for judicial review of the final agency decision. As a result, two corresponding ...