Mackenzie v. Castro et al

Motion to Dismiss for Failure to State a Claim

N.D. Tex.August 9, 2016

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS DALLAS DIVISION _____________________________________ CRAIG STEVEN MacKENZIE, Plaintiff, v. JULIAN CASTRO, SECRETARY, U.S. HOUSING & URBAN DEVELOPMENT, et al., Defendants. Civil Action No. 3:15-CV-0752-D HUD DEFENDANTS’ MOTION TO DISMISS PLAINTIFF’S SECOND AMENDED COMPLAINT JOHN R. PARKER United States Attorney Brian W. Stoltz Assistant United States Attorney Texas Bar No. 24060668 1100 Commerce Street, Third Floor Dallas, Texas 75242-1699 Telephone: 214-659-8626 Facsimile: 214-659-8807 brian.stoltz@usdoj.gov Attorneys for Defendants Julian Castro, U.S. Department of Housing and Urban Development, and Shaun Donovan Case 3:15-cv-00752-D Document 89 Filed 08/09/16 Page 1 of 26 PageID 1064 i Table of Contents I. Introduction .............................................................................................................. 1 II. Background ............................................................................................................... 2 A. 1600 Pacific’s housing discrimination complaint to HUD and the different frameworks for HUD’s investigation of such complaints. ............. 2 B. MacKenzie’s challenge to HUD’s investigation. .......................................... 4 III. Legal Standards ........................................................................................................ 7 IV. Argument and Authorities ........................................................................................ 8 A. MacKenzie fails to state a claim for relief under the Administrative Procedure Act because another remedy exists-he can sue the City of Dallas directly for any alleged discrimination. ......................................... 8 B. MacKenzie fails to state a claim for relief because he has not pleaded the existence of any “final agency action” within the meaning of the Administrative Procedure Act. ........................................... 11 C. MacKenzie has not plausibly alleged the violation of any non- discretionary duty by HUD in its Fair Housing Act investigation. ............. 13 1. MacKenzie does not state any claim for relief with his allegations that HUD’s activities under Title VI, Section 504, and Section 109 failed to comply with the Fair Housing Act, because these are separate statutes with different procedures. ........ 14 2. Even with his allegations that do relate to the Fair Housing Act component of HUD’s investigation, MacKenzie does not state any cause of action. .................................................................. 18 V. Conclusion .............................................................................................................. 20 Case 3:15-cv-00752-D Document 89 Filed 08/09/16 Page 2 of 26 PageID 1065 ii Table of Authorities Cases Ashcroft v. Iqbal, 556 U.S. 662 (2009) ................................................................................... 7 Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) ............................................................................................... 7 Bennett v. Spear, 520 U.S. 154 (1997) ................................................................................. 12, 12-13 Brinac v. EEOC, 996 F.2d 304, 1993 WL 241492 (5th Cir. 1993) ................................................. 10 Freedom Path, Inc. v. Lerner, No. 3:14-CV-1537-D, 2016 WL 3015392 (N.D. Tex. May 25, 2016) ................ 13 Gibson v. Mo. Pac. R.R., 579 F.2d 890 (5th Cir. 1978) ................................................................................ 10 Godwin v. Sec’y of Hous. & Urban Dev., 356 F.3d 310 (D.C. Cir. 2004) ...................................................................... 10, 19 Heckler v. Chaney, 470 U.S. 821 (1985) ............................................................................................ 19 In re Katrina Canal Breaches Litig., 495 F.3d 191 (5th Cir. 2007) .................................................................................. 2 Jordan v. Summers, 205 F.3d 337 (7th Cir. 2000) ......................................................................... 10, 19 Marinoff v. U.S. Dep’t of Hous. & Urban Dev., 78 F.3d 64 (2d Cir. 1996) .................................................................................. 8-9 Marinoff v. U.S. Dep’t of Hous. & Urban Dev., 892 F. Supp. 493 (S.D.N.Y. 1995) ............................................................. 9, 11, 19 Martinez v. United States, 333 F.3d 1295 (Fed. Cir. 2003) ............................................................................. 9 McCall v. Yang, --- F. Supp. 3d ----, 2016 WL 1446126 (D.D.C. 2016) ................................. 10, 11 Case 3:15-cv-00752-D Document 89 Filed 08/09/16 Page 3 of 26 PageID 1066 iii Newsome v. EEOC, 301 F.3d 227 (5th Cir. 2002) ......................................................................... 12, 13 Shavelson v. Haw. Civil Rights Comm’n, Civ. No. 15-00055, 2015 WL 4470200 (D. Haw. July 21, 2015) ................. 11, 13 Town of Sanford v. United States, 140 F.3d 20 (1st Cir. 1998) ................................................................................... 9 Turner v. Sec’y of U.S. Dep’t of Hous. & Urban Dev., 449 F.3d 536 (3d Cir. 2006) ............................................................................. 9, 19 Statutes, Rules, and Other Authorities 5 U.S.C. § 704 ............................................................................................................. 8, 11 5 U.S.C. § 706 ............................................................................................................... 6-7 24 C.F.R. § 1.8 ....................................................................................................... 4, 16, 17 24 C.F.R. § 1.8(d) .............................................................................................................. 4 24 C.F.R. § 6.11(c) .......................................................................................................... 17 24 C.F.R. § 6.11(e) ..................................................................................................... 16, 17 24 C.F.R. § 6.11(e)(1) ........................................................................................................ 4 24 C.F.R. § 6.12 ................................................................................................................. 4 24 C.F.R. § 8.56(h) .......................................................................................................... 17 24 C.F.R. § 8.56(j) ..................................................................................................... 16, 17 24 C.F.R. § 8.56(j)(1) ........................................................................................................ 4 24 C.F.R. § 8.57 ................................................................................................................. 4 24 C.F.R. § 103.40(a) ...................................................................................................... 18 42 U.S.C. § 3602(f) ......................................................................................................... 14 42 U.S.C. § 3602(i) .......................................................................................................... 13 42 U.S.C. § 3602(l) ............................................................................................................. 3 Case 3:15-cv-00752-D Document 89 Filed 08/09/16 Page 4 of 26 PageID 1067 iv 42 U.S.C. § 3604 ............................................................................................................. 14 42 U.S.C. § 3605 ............................................................................................................. 14 42 U.S.C. § 3606 ............................................................................................................. 14 42 U.S.C. § 3608(e)(5) ...................................................................................................... 5 42 U.S.C. § 3610(b) ........................................................................................................... 3 42 U.S.C. § 3610(b)(2) .................................................................................................... 15 42 U.S.C. § 3610(g) ........................................................................................................... 3 42 U.S.C. § 3612 ............................................................................................................. 17 42 U.S.C. § 3612(o) ........................................................................................................... 3 42 U.S.C. § 3613 ........................................................................................................... 8, 9 42 U.S.C. § 3613(a)(2) ....................................................................................................... 8 42 U.S.C. § 3613(c) ........................................................................................................... 3 42 U.S.C. § 3617 ............................................................................................................. 14 Fed. R. Civ. P. 8(a)(2) . ....................................................................................................... 7 Fed. R. Civ. P. 12(b)(1) . ................................................................................................. 5, 6 Fed. R. Civ. P. 12(b)(6) . ............................................................................................ passim Fed. R. Civ. P. 12(c) . .......................................................................................................... 6 Case 3:15-cv-00752-D Document 89 Filed 08/09/16 Page 5 of 26 PageID 1068 HUD Defendants’ Motion to Dismiss Plaintiff’s Second Amended Complaint - Page 1 I. Introduction In this suit, plaintiff Craig MacKenzie has challenged certain administrative actions of the U.S. Department of Housing and Urban Development (HUD1) in its investigation into allegedly discriminatory housing practices of a non-party, the City of Dallas. MacKenzie seeks relief against HUD under the Administrative Procedure Act (APA) based on allegations that HUD failed to conduct its investigation in accordance with the Fair Housing Act and should have issued a “charge of discrimination” and referred the matter to the Department of Justice for litigation against the city. According to MacKenzie, HUD’s actions were therefore arbitrary and capricious and otherwise in violation of the APA. But MacKenzie has failed to state any claim for relief under the APA, for several independent reasons. First, MacKenzie has another remedy available-he can sue the City of Dallas directly for any alleged discrimination. The existence of this other remedy precludes any APA claim. Second, MacKenzie has not identified any “final agency action” dispositive of his legal rights so as to trigger review under the APA. Finally, even if these two independent bars to suit did not exist, MacKenzie has not plausibly alleged any violations of the Fair Housing Act. For these reasons, and as further discussed below, HUD requests that MacKenzie’s second amended complaint (Doc. 85- 1) be dismissed with prejudice under Federal Rule of Civil Procedure 12(b)(6). 1 As applicable, “HUD” refers to the agency and its current Secretary (Castro) and former Secretary (Donovan) who have been named as defendants. Case 3:15-cv-00752-D Document 89 Filed 08/09/16 Page 6 of 26 PageID 1069 HUD Defendants’ Motion to Dismiss Plaintiff’s Second Amended Complaint - Page 2 II. Background A. 1600 Pacific’s housing discrimination complaint to HUD and the different frameworks for HUD’s investigation of such complaints. This case arises out of an investigation by HUD into the City of Dallas’s housing practices. In February 2010, an entity known as 1600 Pacific Building, LP filed a complaint with HUD charging housing discrimination by the city. (Doc. 85-1, ¶ 3; Doc. 3 at p. 12 of 58.2) 1600 Pacific was attempting to redevelop a building in downtown Dallas and contended that the city had “thwarted” the project out of a desire to keep low- income housing concentrated in the southern portion of the city. (See Doc. 3 at pp. 12-13 of 58.) MacKenzie claims to have been associated in some way with the proposed development, and he was identified as a “representative” of 1600 Pacific for purposes of the investigation. (Doc. 85-1, ¶ 2; Doc. 3 at p. 8 of 58.) 1600 Pacific’s administrative complaint alleged that the City of Dallas had violated the following different laws in connection with the proposed development:  the Fair Housing Act, which generally prohibits discrimination on the basis of race, color, etc. in the sale or rental of housing, see 42 U.S.C. §§ 3601 et seq.;  Title VI of the Civil Rights Act, which prohibits discrimination on the basis of race, color, etc. in any program that receives federal financial assistance, see 42 U.S.C. §§ 2000d et seq.; 2 The materials cited herein at “Doc. 3” are the exhibits that were attached to MacKenzie’s original complaint and that are referred to as “attached” to the second amended complaint, even though they physically appear elsewhere on the court’s electronic docket. Because these documents are referred to as attachments to the live pleading and are central to MacKenzie’s claims, the Court may consider them in ruling on this Rule 12(b)(6) motion. See In re Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir. 2007). The cited page numbers (e.g., Doc. 3 at p. 12 of 58) refer to the numbers at the top of the page generated by the ECF system. Case 3:15-cv-00752-D Document 89 Filed 08/09/16 Page 7 of 26 PageID 1070 HUD Defendants’ Motion to Dismiss Plaintiff’s Second Amended Complaint - Page 3  Section 504 of the Rehabilitation Act, which prohibits discrimination on the basis of disability in any program that receives federal financial assistance, see 42 U.S.C. § 794; and  Section 109 of the Housing and Community Development Act, which prohibits discrimination on the basis of race, color, etc. in any program that receives assistance under that statute, see 42 U.S.C. § 5309. (Doc. 3 at p. 13 of 58.) Each of these four statutes calls for some form of an administrative investigation by HUD and contemplates the possibility of enforcement action. However, the administrative procedures and available enforcement remedies are not uniformly the same under each statute. In a Fair Housing Act investigation, a “charge of discrimination” will issue if HUD finds reasonable cause to believe discrimination has occurred, and the filing of this charge then triggers a hearing before an administrative law judge or a lawsuit in federal district court (with the latter available at the option of any party). 42 U.S.C. § 3610(g). The Fair Housing Act also provides for “conciliation” (attempted negotiation to resolve the issues in the complaint) which may result in a “conciliation agreement” that is between the complainant and respondent but subject to HUD’s approval. Id. §§ 3602(l), 3610(b). Available remedies under the Fair Housing Act include actual damages, penalties, and injunctive relief. Id. §§ 3612(o), 3613(c). Investigations under the other statutes-Title VI, Section 504, and Section 109- are governed by different procedures and do not involve the same “charge of discrimination” and “conciliation” processes as in the Fair Housing Act. Instead, the regulations under these statutes generally direct HUD to seek to bring the allegedly Case 3:15-cv-00752-D Document 89 Filed 08/09/16 Page 8 of 26 PageID 1071 HUD Defendants’ Motion to Dismiss Plaintiff’s Second Amended Complaint - Page 4 noncompliant actor into compliance voluntarily, through informal means. See 24 C.F.R. § 1.8(d) (referencing HUD’s attempts in a Title VI investigation to effect compliance by “voluntary means”); id. § 6.11(e)(1) (specifying that HUD may resolve a Section 109 complaint “at any time” via a “voluntary compliance agreement”); id. § 8.56(j)(1) (same in a Section 504 investigation). The available remedies are also different. In the event that no informal resolution can be reached and a final finding of noncompliance is made, HUD may cut off the noncompliant party’s receipt of federal funds or pursue any other remedies allowed by law. See 24 C.F.R. §§ 1.8, 6.12, 8.57. As MacKenzie’s second amended complaint makes clear, 1600 Pacific’s administrative complaint about the City of Dallas actually resulted in the opening of four separate administrative matters at HUD, one for each of the four statutes that 1600 Pacific claimed had been violated. (Doc. 85-1, ¶ 3.) Three of the administrative matters-HUD’s investigation into the alleged violations of Title VI, Section 504, and Section 109-were concluded when the city entered into a “voluntary compliance agreement” with HUD concerning its housing practices. (See Doc. 3 at p. 48 of 58.) The other administrative matter, the investigation into the alleged violations of the Fair Housing Act, was concluded upon 1600 Pacific’s withdrawal of its Fair Housing Act complaint. (Doc. 3 at p. 50 of 58.) B. MacKenzie’s challenge to HUD’s investigation. MacKenzie filed this suit after HUD entered into the voluntary compliance agreement with the City of Dallas. MacKenzie’s original complaint sought relief under a theory that HUD had failed to carry out a statutorily prescribed mission “affirmatively to Case 3:15-cv-00752-D Document 89 Filed 08/09/16 Page 9 of 26 PageID 1072 HUD Defendants’ Motion to Dismiss Plaintiff’s Second Amended Complaint - Page 5 further” the policies of the Fair Housing Act in its investigation. (See Doc. 3, ¶ 1 (citing 42 U.S.C. § 3608(e)(5)).) However, the magistrate judge recommended dismissal of MacKenzie’s claim for lack of jurisdiction, on the ground that the issue of how best “affirmatively to further” the Fair Housing Act’s policies is committed to agency discretion and thus unreviewable in court. (See Doc. 48 at 3-5.) MacKenzie then sought leave to amend his complaint, which this Court granted rather than dismiss the case as the magistrate judge had recommended. (Doc. 69.) In the first amended complaint, MacKenzie no longer relied on the Fair Housing Act’s “affirmatively to further” provision. (See Doc. 70.) Instead, MacKenzie alleged that HUD had failed to comply with various other provisions of the Fair Housing Act during its investigation-provisions that, according to MacKenzie, were non-discretionary. (See Doc. 84 at 3-4.) For example, MacKenzie complained that HUD failed to include MacKenzie in certain aspects of the investigation when allegedly required to do so, did not issue a “charge of discrimination,” negotiated with the City of Dallas when allegedly not authorized to do so, and did not refer the case to the Department of Justice for litigation in federal court. (See Doc. 70, ¶¶ 6, 9, 10, 15.) HUD filed a renewed Rule 12(b)(1) motion to dismiss directed at the first amended complaint. (Doc. 71.) But the Court denied that motion, finding that MacKenzie was no longer relying on the “affirmatively to further” provision that the magistrate judge had concluded was discretionary, and that HUD’s motion had not made any argument about the other provisions of the Fair Housing Act cited in the first amended complaint. (Doc. 84 at 9.) Thus, “without suggesting a view on the merits of Case 3:15-cv-00752-D Document 89 Filed 08/09/16 Page 10 of 26 PageID 1073 HUD Defendants’ Motion to Dismiss Plaintiff’s Second Amended Complaint - Page 6 MacKenzie’s claims brought under the APA” and while noting that defenses to such claims could properly be raised in a Rule 12(b)(6) or Rule 12(c) motion, the Court denied HUD’s Rule 12(b)(1) motion. (Doc. 84 at 10.) MacKenzie subsequently obtained leave to file a second amended complaint. (See Doc. 88.) Like its predecessor, the second amended complaint alleges that HUD essentially mishandled the investigation into 1600 Pacific’s administrative complaint by not complying with various provisions of the Fair Housing Act, including by:  failing to adhere to an 8-step “Fair Housing Complaint Process” posted on HUD’s website, (Doc. 85-1, ¶ 5);  failing to include information on how to make an “Election of Judicial Determination” under the Fair Housing Act in a November 2013 letter of findings of noncompliance sent to the City of Dallas, (Doc. 85-1, ¶ 7);  allowing the City of Dallas to respond to and seek additional review of the November 2013 letter’s findings, (Doc. 85-1, ¶ 8);  engaging in “conciliation” with the City of Dallas when allegedly not authorized by statute and without including MacKenzie in the process, (Doc. 85-1, ¶¶ 8-9);  entering into a “conciliation agreement” with the City of Dallas when allegedly not authorized to do so, (Doc. 85-1, ¶ 12); and  failing to issue a “charge of discrimination” under the Fair Housing Act and failing to refer the case to the Attorney General for litigation against the city, (Doc. 85-1, ¶¶ 15, 19). Relying on the APA, MacKenzie requests judicial review of HUD’s investigation and asks that the Court compel or hold unlawful certain actions of HUD as arbitrary, capricious, an abuse of discretion, and under the other standards set out in the APA at 5 Case 3:15-cv-00752-D Document 89 Filed 08/09/16 Page 11 of 26 PageID 1074 HUD Defendants’ Motion to Dismiss Plaintiff’s Second Amended Complaint - Page 7 U.S.C. § 706. (See Doc. 85-1 at p. 11 (Prayer for Relief) (asking for APA-type relief).) HUD now moves to dismiss the second amended complaint for failure to state a claim.3 III. Legal Standards To survive a motion to dismiss under Rule 12(b)(6), a plaintiff must plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. 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.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. (quoting Twombly, 550 U.S. at 556); see also Twombly, 550 U.S. at 555 (“Factual allegations must be enough to raise a right to relief above the speculative level[.]”). “[W]here the well- pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not ‘shown’-‘that the pleader is entitled to relief.’” Iqbal, 556 U.S. at 679 (alteration omitted) (quoting Rule 8(a)(2)). 3 The second amended complaint was filed with the Court as an attachment to a motion for leave, at Doc. 85-1. The Court then issued an electronic order granting the motion for leave which stated, “Unless the document has already been filed, clerk to enter the document as of the date of this order.” (Doc. 88.) Evidently because the second amended complaint was already on file at that time (as an attachment to the motion for leave), it has never been re-filed as a separate docket entry and is cited as “Doc. 85-1” in this motion. Case 3:15-cv-00752-D Document 89 Filed 08/09/16 Page 12 of 26 PageID 1075 HUD Defendants’ Motion to Dismiss Plaintiff’s Second Amended Complaint - Page 8 IV. Argument and Authorities A. MacKenzie fails to state a claim for relief under the Administrative Procedure Act because another remedy exists-he can sue the City of Dallas directly for any alleged discrimination. The APA states that an agency action is reviewable in court if it is “made reviewable by statute” or if “it is a final agency action for which there is no other adequate remedy in a court.” 5 U.S.C. § 704. Here, MacKenzie does not identify any specific statute (i.e., outside the APA) that he claims provides for direct judicial review of HUD’s actions in the course of a Fair Housing Act investigation. (See Doc. 85-1.) Therefore, review under the APA is available only if MacKenzie has no other adequate court remedy available to him. But MacKenzie does have an adequate remedy available. In addition to its provisions which authorize administrative investigations by HUD, the Fair Housing Act creates a private right of action that allows any person who believes he has been aggrieved by a discriminatory housing practice to sue the alleged perpetrator directly, in federal district court. 42 U.S.C. § 3613. This private cause of action exists regardless of whether any administrative complaint has been filed with HUD and regardless of the outcome of any investigation conducted by HUD on a filed complaint. Id. § 3613(a)(2). Because MacKenzie has another remedy available to him, the private right of action, his allegations that HUD’s investigation was somehow improper and should have resulted in an enforcement action against the City of Dallas fail to state any claim under the APA. The Second Circuit considered an essentially identical scenario in Marinoff v. U.S. Department of Housing & Urban Development and adopted the reasoning of the Case 3:15-cv-00752-D Document 89 Filed 08/09/16 Page 13 of 26 PageID 1076 HUD Defendants’ Motion to Dismiss Plaintiff’s Second Amended Complaint - Page 9 district court that had dismissed a similar claim against HUD due to the existence of the private right of action. See 78 F.3d 64 (2d Cir. 1996), aff’g and adopting 892 F. Supp. 493 (S.D.N.Y. 1995). In Marinoff, the plaintiff sued HUD under a theory that it “failed to properly investigate plaintiff’s allegations of discrimination” against a local housing authority, and requested that the court “direct HUD to conduct a proper investigation.” Marinoff, 892 F. Supp. at 494. In dismissing the case, the court explained that because the plaintiff could sue the alleged discriminator directly under the Fair Housing Act, there was no basis for a claim against HUD under the APA. Id. at 496-97. The same is true here. Like the plaintiff in Marinoff, MacKenzie claims that HUD’s investigation was improper and he requests court relief that would essentially require HUD to re-do its investigation of the City of Dallas’s alleged discrimination. But MacKenzie can simply sue the city directly if he believes it engaged in unlawful discrimination.4 See 42 U.S.C. § 3613. Therefore, no claim lies against HUD under the APA. Marinoff, 892 F. Supp. at 496-97; see also Turner v. Sec’y of U.S. Dep’t of Hous. & Urban Dev., 449 F.3d 536, 537, 540 (3d Cir. 2006) (explaining that the existence of the private right of action in the Fair Housing Act barred a claim alleging that HUD 4 HUD takes no position on the merits of any possible claim MacKenzie might bring against the City of Dallas, nor does MacKenzie’s chance of success in such an action have any effect on the analysis of whether his claims against HUD are barred by the APA. See Town of Sanford v. United States, 140 F.3d 20, 23 (1st Cir. 1998) (explaining that a “legal remedy is not inadequate for purposes of the APA because it is procedurally inconvenient for a given plaintiff, or because plaintiffs have inadvertently deprived themselves of an opportunity to pursue that remedy”); see also Martinez v. United States, 333 F.3d 1295, 1320 (Fed. Cir. 2003) (“The fact that the complaint was untimely filed . . . does not mean that that court could not offer a full and adequate remedy; it merely means that [plaintiff] did not file his complaint in time to take advantage of that remedy.”). Case 3:15-cv-00752-D Document 89 Filed 08/09/16 Page 14 of 26 PageID 1077 HUD Defendants’ Motion to Dismiss Plaintiff’s Second Amended Complaint - Page 10 “failed to perform mandatory duties that the Fair Housing Act . . . imposed on it”); Godwin v. Sec’y of Hous. & Urban Dev., 356 F.3d 310, 312 (D.C. Cir. 2004) (same). A comparison to cases arising under the employment discrimination laws is also instructive and provides further authority for the dismissal of MacKenzie’s suit. In the context of employment discrimination claims, the Equal Employment Opportunity Commission (EEOC) occupies a role roughly analogous to HUD’s here. The EEOC is tasked with conducting administrative investigations of employment discrimination complaints and may issue a “charge of discrimination” if it finds discrimination has occurred-just as HUD does under the Fair Housing Act. However, it is well settled that a complainant who believes the EEOC has conducted an improper investigation has no right of action against the EEOC. See Brinac v. EEOC, 996 F.2d 304, 1993 WL 241492, at *1 (5th Cir. 1993) (explaining that “[c]learly, [a complainant] has no cause of action against the EEOC for its alleged mishandling of his complaint”); Gibson v. Mo. Pac. R.R., 579 F.2d 890, 891 (5th Cir. 1978). Instead, the remedy available to the complainant is to sue the alleged discriminator directly in federal court. See Gibson, 579 F.2d at 891 (noting that nothing done by the EEOC affected the complainant’s rights or precluded a private suit); Jordan v. Summers, 205 F.3d 337, 342 (7th Cir. 2000) (“The proper course for a private plaintiff whose claim the EEOC mishandled is to bring a lawsuit against the plaintiff’s employer on the merits, not one against the EEOC.”). The existence of this other remedy-the ability to sue the alleged discriminator directly-forecloses the possibility of an action against the EEOC under the APA. See McCall v. Yang, --- F. Supp. 3d ----, 2016 WL 1446126, at *3 (D.D.C. 2016). And this is Case 3:15-cv-00752-D Document 89 Filed 08/09/16 Page 15 of 26 PageID 1078 HUD Defendants’ Motion to Dismiss Plaintiff’s Second Amended Complaint - Page 11 true even if the plaintiff attempts to characterize the suit as essentially procedural in nature, e.g., to “enforce the proper processing of Plaintiff’s [administrative] complaint,” rather than as a challenge to the “merits” issue of whether discrimination occurred. Id. These same principles translate to the context of HUD’s investigation of Fair Housing Act complaints, and mandate that MacKenzie’s suit be dismissed. See Shavelson v. Haw. Civil Rights Comm’n, Civ. No. 15-00055, 2015 WL 4470200, at *3-4 (D. Haw. July 21, 2015) (in a suit alleging procedural errors in a housing complaint investigation, holding that the APA did not allow for a claim against a state agency that investigated the complainant’s claims upon a referral from HUD, and explaining that courts analogize Fair Housing Act investigations to EEOC investigations). To summarize, MacKenzie fails to state any claim for relief under the APA because he has another remedy available, the right to sue the City of Dallas directly. Consequently, the second amended complaint should be dismissed under Rule 12(b)(6), without even needing to consider any of the other grounds for dismissal. See Marinoff, 892 F. Supp. at 494 (dismissing a similar claim under Rule 12(b)(6)). B. MacKenzie fails to state a claim for relief because he has not pleaded the existence of any “final agency action” within the meaning of the Administrative Procedure Act. As noted above, the APA allows for judicial review of “final agency action for which there is no other adequate remedy in a court,” 5 U.S.C. § 704, so the availability of another remedy (the private right of action against the city) bars MacKenzie’s claims. But MacKenzie also fails to satisfy another prerequisite to obtaining review under the APA, because he has not pleaded, and cannot plead, the existence of any “final agency Case 3:15-cv-00752-D Document 89 Filed 08/09/16 Page 16 of 26 PageID 1079 HUD Defendants’ Motion to Dismiss Plaintiff’s Second Amended Complaint - Page 12 action.” This is a second, independent reason that MacKenzie fails to state any claim. The APA defines “agency action” to include “the whole or a part of an agency rule, order, license, sanction, relief, or the equivalent or denial thereof, or failure to act.” 5 U.S.C. § 551(13). And the Supreme Court has explained that: As a general matter, two conditions must be satisfied for agency action to be “final”: First, the action must mark the “consummation” of the agency’s decisionmaking process-it must not be of a merely tentative or interlocutory nature. And second, the action must be one by which “rights or obligations have been determined,” or from which “legal consequences will flow.” Bennett v. Spear, 520 U.S. 154, 177-78 (1997) (internal citations omitted). The Fifth Circuit has considered whether any “final agency action” existed in the analogous context of a suit challenging an EEOC investigation, in Newsome v. EEOC, 301 F.3d 227 (5th Cir. 2002). There, after the EEOC had dismissed the plaintiff’s administrative complaint, the plaintiff sued the EEOC, claiming that it had failed to perform its duties when investigating her complaint and seeking to compel it to re-open its investigation. Id. at 229-30. But the Fifth Circuit determined that the plaintiff’s APA claim was properly dismissed under the standards of Rule 12(b)(6), due to the absence of any “final agency action.” Id. at 231. The court explained that “[t]he EEOC’s dismissal of [the plaintiff’s] complaint did not determine her rights or have legal consequences,” and that “[a]ny final determination would occur in court,” because the plaintiff had the right to sue the alleged discriminator directly. Id. For that reason, the agency’s decision was not “one by which rights or obligations have been determined, or from which legal consequences will flow,” and did not give rise to a right to relief under the APA. Bennet, Case 3:15-cv-00752-D Document 89 Filed 08/09/16 Page 17 of 26 PageID 1080 HUD Defendants’ Motion to Dismiss Plaintiff’s Second Amended Complaint - Page 13 520 U.S. at 178 (internal quotation marks and citations omitted). The same reasoning applies to bar MacKenzie’s claims against HUD based on its allegedly faulty investigation of the City of Dallas under the Fair Housing Act. Because HUD’s Fair Housing Act investigation did not finally determine any party’s legal rights, there was no “final agency action” so as to allow for review under the APA. See Shavelson, 2015 WL 4470200, at *4 (explaining that an agency decision in a housing complaint investigation “is not final,” and therefore review is not available under the APA). Put another way, HUD’s investigation “did not determine [MacKenzie’s] rights or have legal consequences,” because nothing that HUD did precluded MacKenzie (or anyone else) from seeking legal relief directly against the city under the Fair Housing Act. See Newsome, 301 F.3d at 232. Accordingly, dismissal under Rule 12(b)(6) is proper on this additional ground. See Freedom Path, Inc. v. Lerner, No. 3:14-CV-1537- D, 2016 WL 3015392, at *6 (N.D. Tex. May 25, 2016) (dismissing APA claims under Rule 12(b)(6) because the claims “[did] not challenge final agency action”). C. MacKenzie has not plausibly alleged the violation of any non-discretionary duty by HUD in its Fair Housing Act investigation. Even if MacKenzie’s suit were not already doubly barred, by the existence of another remedy and the absence of any “final agency action,” it would still be subject to dismissal because MacKenzie has not plausibly alleged any violations of the Fair Housing Act by HUD.5 This is true for two reasons, discussed in more detail below. 5 MacKenzie also has not pleaded facts establishing his alleged status as an “aggrieved person” to demonstrate his standing to allege violations of the Fair Housing Act. Under 42 U.S.C. § 3602(i), an aggrieved person is any person who claims to have been injured by a discriminatory housing practice, Case 3:15-cv-00752-D Document 89 Filed 08/09/16 Page 18 of 26 PageID 1081 HUD Defendants’ Motion to Dismiss Plaintiff’s Second Amended Complaint - Page 14 First, MacKenzie wrongly assumes that all of HUD’s actions were governed by the Fair Housing Act, when MacKenzie’s own pleadings make clear that HUD was acting pursuant to other statutes-specifically, Title VI, Section 504, and Section 109-in its investigation. Thus, with respect to the investigation under these statutes, MacKenzie no more shows any entitlement to relief by saying that HUD failed to follow Fair Housing Act procedures than he would by arguing on appeal that this Court failed to follow the Texas Rules of Civil Procedure. No claim is stated by such allegations. Second, to the extent MacKenzie does make allegations applicable to the Fair Housing Act component of HUD’s investigation-such as his allegation that HUD should not have closed the investigation upon 1600 Pacific’s withdrawal of its complaint, or should have issued a “charge of discrimination” and referred the matter to the Department of Justice-these do not support any legal cause of action either, and are committed to HUD’s enforcement discretion. 1. MacKenzie does not state any claim for relief with his allegations that HUD’s activities under Title VI, Section 504, and Section 109 failed to comply with the Fair Housing Act, because these are separate statutes with different procedures. MacKenzie’s second amended complaint recognizes that HUD’s investigation of the City of Dallas actually consisted of four separate administrative matters, one for each which, in turn, is defined as an act made unlawful under sections 3604, 3605, 3606, or 3617 of the Fair Housing Act. See 42 U.S.C. § 3602(f). MacKenzie does not allege any unlawful acts under sections 3604, 3605, or 3606 (e.g., by alleging that he was refused some opportunity to sell or rent real estate on the basis of race). MacKenzie does claim that section 3617 was violated. (Doc. 85-1, ¶¶ 11, 18, 23.) However, section 3617 is limited to interference with rights granted by the other sections of the Fair Housing Act. Therefore, because MacKenzie does not assert any violations under those sections, MacKenzie has not pleaded facts showing himself to be an aggrieved person. Case 3:15-cv-00752-D Document 89 Filed 08/09/16 Page 19 of 26 PageID 1082 HUD Defendants’ Motion to Dismiss Plaintiff’s Second Amended Complaint - Page 15 of the four statutes that 1600 Pacific claimed the city had violated: the Fair Housing Act, Title VI, Section 504, and Section 109. (Doc. 85-1, ¶¶ 3, 24.) MacKenzie also recognizes that the Fair Housing Act component of HUD’s investigation was closed in September 2014 upon the withdrawal of 1600 Pacific’s complaint. (Doc. 85-1, ¶ 24; see also Doc. 3 at p. 50 of 58.) Nonetheless, MacKenzie goes on to make a series of allegations based on a faulty assumption that the Fair Housing Act’s procedures governed all of HUD’s administrative matters under Title VI, Section 504, and Section 109. Because MacKenzie has not shown that investigations under these separate statutes are governed by the Fair Housing Act (and because the relevant statutes and regulations actually create different procedures, see pp. 2-4, supra), these allegations fail to state any claim for relief. For example, MacKenzie alleges that HUD failed to comply with the Fair Housing Act’s “conciliation” procedures and improperly entered into a Fair Housing Act “conciliation agreement” with the City of Dallas without the involvement of the complainant (1600 Pacific) or MacKenzie.6 (Doc. 85-1, ¶¶ 9-12.) But the agreement MacKenzie cites (and that is attached to his original complaint) does not purport to be a Fair Housing Act “conciliation agreement.” (Doc. 85-1, ¶ 12; Doc. 3 at p. 48 of 58.) Instead, it is a “voluntary compliance agreement” between the city and HUD under Title VI, Section 504, and Section 109. (Doc. 3 at p. 48 of 58.) MacKenzie has never pleaded 6 MacKenzie suggests that this was improper because the Fair Housing Act requires a “conciliation agreement” to be between the complainant and respondent (here, 1600 Pacific and the city), not between HUD and the respondent. See 42 U.S.C. § 3610(b)(2). Case 3:15-cv-00752-D Document 89 Filed 08/09/16 Page 20 of 26 PageID 1083 HUD Defendants’ Motion to Dismiss Plaintiff’s Second Amended Complaint - Page 16 any facts showing that HUD ever purported to enter into any Fair Housing Act “conciliation agreement” with the City of Dallas. Nor has MacKenzie pleaded any facts showing that it was improper for HUD to negotiate and enter into a voluntary compliance agreement with the city under Title VI, Section 504, and Section 109. To the contrary, the regulations under those statutes contemplate and authorize such an agreement. See 24 C.F.R. §§ 1.8, 6.11(e), 8.56(j). And, unlike under the Fair Housing Act, MacKenzie has identified no requirement under Title VI, Section 504, or Section 109 that the complainant or some third party (like MacKenzie) be a party to either the negotiations or the voluntary compliance agreement itself. (See Doc. 85-1.) For these reasons, all of MacKenzie’s allegations about HUD’s alleged failures to follow the Fair Housing Act “conciliation” process with respect to the voluntary compliance agreement fail to state any plausible claim for relief. The same is true regarding MacKenzie’s allegations about the “letter of findings of non-compliance” that HUD’s Fort Worth regional office sent to the City of Dallas in November 2013. (Doc. 85-1, ¶ 6.) Both the second amended complaint and the letter itself (which is cited in the second amended complaint and attached to the original complaint) note that the letter related only to HUD’s investigations under Title VI, Section 504, and Section 109. (Doc. 3 at p. 19 of 58; Doc. 85-1, ¶ 6.) Nonetheless, MacKenzie makes a series of allegations that assume, without any explanation, that the letter was governed by the terms of the Fair Housing Act. For example, MacKenzie complains that the November 2013 letter improperly offered the city an opportunity to request further review from a HUD Assistant Secretary, when, according to MacKenzie, Case 3:15-cv-00752-D Document 89 Filed 08/09/16 Page 21 of 26 PageID 1084 HUD Defendants’ Motion to Dismiss Plaintiff’s Second Amended Complaint - Page 17 “[t]he Fair Housing Act does not grant to HUD . . . any discretionary authority to permit such an appeal process.” (Doc. 85-1, ¶ 8.) He likewise claims that the Fair Housing Act did not authorize HUD to enter into negotiations with the city after the letter was sent, citing a provision of the Fair Housing Act that purportedly does not allow negotiations after a “charge of discrimination” has been issued. (Doc. 85-1, ¶ 8 (citing 42 U.S.C. § 3612).) Again, though, any appeal or negotiation process after HUD’s sending of the November 2013 letter would have been subject to Title VI, Section 504, and Section 109, not the Fair Housing Act. And MacKenzie has never alleged-and could never allege- that those statutes forbade HUD from negotiating with the city or allowing it to respond to the letter. See 24 C.F.R. §§ 1.8, 6.11(e), 8.56(j) (regulations authorizing HUD to attempt to effect voluntary compliance under Title VI, Section 504, and Section 109); see also 24 C.F.R. §§ 6.11(c), 8.56(h) (review rights after a letter of findings has been issued). MacKenzie also never has alleged any facts showing that HUD ever purported to issue a “charge of discrimination” under the Fair Housing Act. Therefore, whatever rules may exist for an appeal or negotiations after a “charge of discrimination” has issued simply have no relevance here. In short, MacKenzie has conflated (i) the procedures in an investigation under the Fair Housing Act, with (ii) the procedures in investigations under Title VI, Section 504, and Section 109, which were the other discrimination statutes at issue in HUD’s investigation. No claim is stated by alleging that HUD’s activities under the latter statutes failed to comply with the former. Case 3:15-cv-00752-D Document 89 Filed 08/09/16 Page 22 of 26 PageID 1085 HUD Defendants’ Motion to Dismiss Plaintiff’s Second Amended Complaint - Page 18 2. Even with his allegations that do relate to the Fair Housing Act component of HUD’s investigation, MacKenzie does not state any cause of action. In addition to his (misplaced) attacks on the Title VI, Section 504, and Section 109 components of HUD’s investigation, MacKenzie does make some allegations specific to the Fair Housing Act component of the investigation. For example, MacKenzie claims that HUD “exceeded [its] statutory and regulatory authority by accepting [1600 Pacific’s] withdrawal” of its Fair Housing Act complaint, and that HUD somehow “interfered” with its own investigation by “demanding/coercing” 1600 Pacific to withdraw its complaint. (Doc. 85-1, ¶¶ 23, 24.) MacKenzie also claims that HUD “failed to acknowledge [him] as an Aggrieved Person” in the Fair Housing Act investigation, did not allow him to intervene in the investigation, did not investigate an apparently separate October 2009 complaint MacKenzie made to the HUD Office of Community Planning and Development, and did not refer the matter to the Department of Justice. (Doc. 85-1, ¶¶ 14-16.) But none of these allegations suffice to plausibly allege that HUD violated any non-discretionary provision of the Fair Housing Act. With respect to 1600 Pacific’s withdrawal of its complaint, the Fair Housing Act regulations expressly allow a complainant to “change your fair housing complaint . . . [a]t any time to add or remove people . . . .” 24 C.F.R. § 103.40(a). MacKenzie has not identified any provision forbidding HUD from allowing 1600 Pacific to effectively remove the City of Dallas from the Fair Housing Act investigation by withdrawing its complaint, so there is no basis to his claim that it would have been a violation of the Fair Housing Act to do so. Case 3:15-cv-00752-D Document 89 Filed 08/09/16 Page 23 of 26 PageID 1086 HUD Defendants’ Motion to Dismiss Plaintiff’s Second Amended Complaint - Page 19 Moreover, there still is no cause of action stated even if it is assumed that HUD somehow caused the withdrawal of 1600 Pacific’s complaint-or did any of the other things MacKenzie complains of, such as denying MacKenzie’s attempts to intervene as a complainant or initiate his own Fair Housing Act complaint, failing to issue a “charge of discrimination,” or failing to refer the case to the Department of Justice. Each of these complained-of actions is or is tantamount to the dismissal of a Fair Housing Act complaint and the closing of a Fair Housing Act investigation. And the caselaw makes clear that there is no cause of action under the APA based on HUD’s dismissal of a complaint or closing of an investigation. See Marinoff, 892 F. Supp. at 494-97; Turner, 449 F.3d at 537; Godwin, 356 F.3d at 311-12; see also Jordan, 205 F.3d at 342 (explaining that a complainant “has no cause of action against the EEOC for its failure to process a charge of discrimination”). In addition, HUD’s decisions whether to undertake enforcement action (e.g., to issue a “charge of discrimination” or to refer a case to the Department of Justice for litigation) are discretionary in nature and are not subject to judicial review for that separate reason. As explained by the Supreme Court in Heckler v. Chaney, 470 U.S. 821, 832 (1985), “an agency’s decision not to take enforcement action should be presumed immune from judicial review” under the APA. MacKenzie has not rebutted this presumption, nor does his second amended complaint explain how a court might evaluate HUD’s enforcement-related decisions. Cf. Chaney, 470 U.S. at 831 (explaining that “review . . . is not to be had if the statute is drawn so that a court would have no meaningful standard against which to judge the agency’s exercise of discretion.” Case 3:15-cv-00752-D Document 89 Filed 08/09/16 Page 24 of 26 PageID 1087 HUD Defendants’ Motion to Dismiss Plaintiff’s Second Amended Complaint - Page 20 V. Conclusion For all these reasons, HUD requests that MacKenzie’s second amended complaint be dismissed with prejudice.7 HUD further requests general relief. 7 This motion is filed by the three defendants who were named in the original complaint and who have been parties to this case since its inception (the U.S. Department of Housing and Urban Development, Julian Castro, and Shaun Donovan). The second amended complaint also adds three new defendants (the Department of Justice, Loretta Lynch, and Eric Holder), but it appears these defendants may not yet have been served. Nonetheless, and without waiver of any defenses these defendants may assert, HUD respectfully submits that dismissal of MacKenzie’s complaint as to these defendants would be proper on the same grounds set forth in this motion. Case 3:15-cv-00752-D Document 89 Filed 08/09/16 Page 25 of 26 PageID 1088 HUD Defendants’ Motion to Dismiss Plaintiff’s Second Amended Complaint - Page 21 Respectfully submitted, JOHN R. PARKER United States Attorney /s/ Brian W. Stoltz Brian W. Stoltz Assistant United States Attorney Texas Bar No. 24060668 1100 Commerce Street, Third Floor Dallas, Texas 75242-1699 Telephone: 214-659-8626 Facsimile: 214-659-8807 brian.stoltz@usdoj.gov Attorneys for Defendants Julian Castro, U.S. Department of Housing and Urban Development, and Shaun Donovan Certificate of Service On August 9, 2016, I electronically submitted the foregoing document with the clerk of court for the U.S. District Court, Northern District of Texas, using the electronic case filing system of the court. I hereby certify that I have served all parties electronically or by another manner authorized by Federal Rule of Civil Procedure 5(b)(2). /s/ Brian W. Stoltz Brian W. Stoltz Assistant United States Attorney Case 3:15-cv-00752-D Document 89 Filed 08/09/16 Page 26 of 26 PageID 1089