Associated Mortgage Bankers, Inc. v. Castro
Civil Action No. 2017-0075
| D.D.C. | Nov 15, 2017Background
- Associated Mortgage Bankers, Inc. (AMB) sued HUD and officials after an administrative judge (AJ) upheld HUD’s offset against AMB; AMB asserted (1) an APA claim challenging the AJ’s decision (Count I) and (2) breach of the covenant of good faith and fair dealing (Count II).
- The Court’s September 20, 2017 Memorandum Opinion dismissed Count II with prejudice for lack of subject-matter jurisdiction (Tucker Act/Court of Federal Claims) and allowed Count I to proceed limited to judicial review of the AJ’s decision under the APA, 5 U.S.C. § 706(2)(A).
- AMB moved for reconsideration arguing: the Court erred in dismissing Count II (defendants didn’t press that ground; HUD’s ‘‘sue and be sued’’ clause and §§ 1331/1332 supply jurisdiction), the dismissal should be without prejudice, and the Court improperly foreclosed class certification briefing on Count I.
- The Court considered sua sponte jurisdictional dismissal proper, explained that HUD’s sue-and-be-sued clause waives sovereign immunity but does not itself confer federal jurisdiction (citing Lightfoot), and declined to expand Trans-Bay to permit district-court jurisdiction over government contract claims that the Tucker Act places in the Court of Federal Claims.
- The Court clarified that Count II is dismissed without prejudice to refiling in the Court of Federal Claims, but otherwise denied reconsideration: it held Count I remains limited to APA review of the AJ’s individualized decision and is not amenable to class treatment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Subject-matter jurisdiction over Count II (contract/covenant claim) | HUD’s sue-and-be-sued clause and federal-question jurisdiction (28 U.S.C. § 1331 or § 1332) support district-court jurisdiction | Tucker Act gives exclusive jurisdiction over monetary government-contract claims to the Court of Federal Claims; § 1702 does not independently confer jurisdiction | Court: dismissal for lack of jurisdiction proper; § 1702 waives immunity but does not grant jurisdiction; Count II dismissed without prejudice to refiling in Court of Federal Claims |
| Sua sponte dismissal without prior party briefing | Court should not dismiss absent defendants’ specific motion on that ground | A court may inquire into subject-matter jurisdiction sua sponte under Rule 12(h)(3) | Court: sua sponte dismissal was proper |
| Whether federal common law could supply jurisdiction (Trans-Bay reliance) | Trans-Bay permits federal common-law contract claims in district court, supporting jurisdiction | Extending Trans-Bay would undermine Tucker Act exclusivity; Kidwell and later authority counsels against bypassing the Tucker Act | Court: Trans-Bay does not compel jurisdiction here; federal-common-law theory cannot circumvent Tucker Act |
| Class certification for APA review of AJ decision (Count I) | AMB has due-process right to briefing on class certification and seeks class review of agency action | The APA review here is appellate-like, limited to review of an individualized AJ decision; class relief is not appropriate where relief would be individualized | Court: denied reconsideration; Count I limited to APA review of AJ’s individualized decision and is not amenable to Rule 23 class treatment |
Key Cases Cited
- Lightfoot v. Cendant Mortgage Corp., 137 S. Ct. 553 (2017) (sue-and-be-sued clauses do not necessarily confer federal jurisdiction)
- Trans-Bay Engineers & Builders, Inc. v. Hills, 551 F.2d 370 (D.C. Cir. 1976) (discussing jurisdiction in HUD-related contract disputes)
- Kidwell v. Department of Army, Board for Correction of Military Records, 56 F.3d 279 (D.C. Cir. 1995) (plaintiff cannot bypass Tucker Act by recasting money claims)
- Semtek International Inc. v. Lockheed Martin Corp., 531 U.S. 497 (2001) (meaning of dismissal without prejudice in federal court)
- American Bioscience, Inc. v. Thompson, 269 F.3d 1077 (D.C. Cir. 2001) (when reviewing agency action under the APA the district judge sits as an appellate tribunal)