862 F.3d 712
8th Cir.2017Background
- Lott Johnson, an African American farmer, alleged the USDA and five employees discriminated and retaliated against him in loan application denials, loan servicing delays, and by applying administrative offsets to collect a defaulted loan.
- The USDA’s Office of the Assistant Secretary for Civil Rights issued a Final Agency Decision finding some race discrimination and retaliation, awarding Johnson damages and debt relief under the Part 15d process and ECOA-related procedures.
- Johnson previously sued (Johnson I); the district court dismissed claims on res judicata and other grounds; Johnson voluntarily dismissed his initial appeal and refiled a substantially similar complaint in 2015 (Johnson II) adding conspiracy claims and naming the same defendants in individual and official capacities.
- The district court dismissed Johnson II with prejudice, ruling ECOA claims precluded by the Office’s Final Agency Decision (res judicata / collateral estoppel), Bivens claims barred by the administrative remedial scheme, official-capacity Bivens claims barred by sovereign immunity, and conspiracy claim inadequately pleaded.
- On appeal, the Eighth Circuit considered whether the Office’s Final Agency Decision precludes federal ECOA and Bivens claims, whether individual defendants qualify as ECOA “creditors,” and whether the conspiracy claim pleaded sufficient factual agreement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the USDA Office's Final Agency Decision bars Johnson's federal ECOA claims (res judicata) | Johnson: administrative decision should not preclude his federal ECOA suit | Defendants: the Final Agency Decision precludes relitigation (res judicata) | Reversed: Final Agency Decision does not have claim-preclusive effect (Curtis Johnson controlling) |
| Whether collateral estoppel bars ECOA claims due to rulings in Johnson I | Johnson: prior rulings shouldn't bind because legal landscape changed | Secretary: issue was actually litigated in Johnson I, so collateral estoppel applies | Reversed: intervening controlling precedent (Curtis Johnson) changed legal rule so collateral estoppel inapplicable |
| Whether the complaint sufficiently alleges individual defendants are "creditors" under ECOA | Johnson: job titles and specific acts (e.g., initiating offsets) plausibly show participation in credit decisions | Defendants: complaint fails to allege they regularly extended or participated in credit decisions | Affirmed for pleading stage: allegations suffice to plausibly infer creditor status for named individuals |
| Whether Bivens claims are precluded by the Part 15d administrative remedial scheme | Johnson: Bivens relief available because administrative scheme is regulatory and not a congressional scheme | Defendants: Part 15d is a comprehensive remedial scheme that precludes Bivens | Reversed: a scheme created by regulation (not Congress) does not preclude Bivens (per Curtis Johnson and circuit precedent) |
| Whether § 1985(3) conspiracy claim was adequately pleaded | Johnson: alleges defendants acted in concert and via correspondence to violate his rights | Defendants: allegations are conclusory, no specific agreement pled | Affirmed dismissal: conspiracy claim fails for lack of particularized factual allegations of an agreement |
Key Cases Cited
- Curtis Johnson v. Vilsack, 833 F.3d 948 (8th Cir. 2016) (USDA Part 15d Final Agency Decisions do not have claim-preclusive effect)
- Laase v. County of Isanti, 638 F.3d 853 (8th Cir. 2011) (standard of review for motion to dismiss)
- Ashanti v. City of Golden Valley, 666 F.3d 1148 (8th Cir. 2012) (documents embraced by the complaint may be considered on a motion to dismiss)
- Krueger v. Lyng, 927 F.2d 1050 (8th Cir. 1999) (remedial scheme created by regulation does not preclude Bivens)
- Carpenter's Produce Co. v. Arnold, 189 F.3d 686 (8th Cir. 1999) (similar holding on regulatory remedial schemes and Bivens)
- Montana v. United States, 440 U.S. 147 (1979) (collateral estoppel applies only when controlling legal rules remain unchanged)
- City of Omaha Emps. Betterment Ass'n v. City of Omaha, 883 F.2d 650 (8th Cir. 1989) (§ 1985(3) conspiracy requires particularized factual allegations of agreement)