Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-alsd-1_06-cv-00635/USCOURTS-alsd-1_06-cv-00635-0/pdf.json

Nature of Suit Code: 440
Nature of Suit: Other Civil Rights
Cause of Action: 42:1981 Civil Rights

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IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

VICTORIA NICHOLSON, et al., )

 )

Plaintiffs, )

 )

v. ) CIVIL ACTION 06-0635-WS-B

 )

MIKE JOHANNS, SECRETARY, U.S. )

DEPARTMENT OF AGRICULTURE, )

 )

Defendant. )

ORDER

This matter comes before the undersigned on defendant’s Motion to Dismiss (doc. 8) pursuant

to Rules 12(b)(1), (2), and (6) of the Federal Rules of Civil Procedure. The Motion has been briefed,

and is ripe for disposition at this time.

I. Background.

Plaintiffs Victoria and Sam Nicholson brought this action against the United States Department

of Agriculture (the “USDA”) alleging racially biased treatment that deprived plaintiffs of their

constitutional rights. (Complaint, ¶ 1.) Plaintiffs, who are black, contend that they obtained a home

loan from the USDA, but that the USDA arbitrarily and discriminatorily placed their account in

foreclosure. (Id., ¶¶ 3-5.) According to the Complaint, the USDA discriminatorily forced plaintiffs to

pay for unnecessary and duplicative insurance and advertising fees, and manipulated plaintiffs to pay

more money than they owed via unfair and improper charges on their account. (Id., ¶¶ 5-8.) This

wrongdoing is alleged to have begun in April 2004, “continuing through December 2004, and beyond.” 

(Id., ¶ 7.) No definite terminus to the alleged wrongful conduct is alleged in the Complaint.

Based on these allegations, the Complaint asserts the following causes of action against the

USDA: breach of contract, breach of the implied covenant of good faith and fair dealing, violation of 42

U.S.C. § 1981, violation of 42 U.S.C. § 1983, and violation of the Equal Credit Opportunity Act, 15

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U.S.C. §§ 1691, et seq. (Complaint, ¶¶ 1, 9, 13, 15, 16.) Defendant now seeks dismissal of the

Complaint on grounds of sovereign immunity, statute of limitations, and failure to state a valid

jurisdictional basis.

II. Analysis.

A. Sovereign Immunity Defense.

The USDA first takes aim at plaintiffs’ claims against it under 42 U.S.C. §§ 1981 and 1983. 

Among other things, the USDA maintains that it is protected by sovereign immunity from suit under

either of these sections. Defendant is correct.

“Absent a waiver, sovereign immunity shields the Federal Government and its agencies from

suit.” F.D.I.C. v. Meyer, 510 U.S. 471, 475, 114 S.Ct. 996, 127 L.Ed.2d 308 (1994). Because

sovereign immunity is jurisdictional in nature, the terms of the United States’ consent to be sued in any

court set the parameters of that court’s jurisdiction to entertain the suit. Id. “It is well established in this

circuit that the United States has not waived its immunity to suit under the provisions of the civil rights

statutes.” United States v. Timmons, 672 F.2d 1373, 1380 (11th Cir. 1982) (considering §§ 1981

and 1982); see also Newsome v. E.E.O.C., 301 F.3d 227, 233 (5th Cir. 2002) (United States and its

officials are entitled to sovereign immunity for civil rights claims because United States has not

consented to suit).

With respect to § 1983, the statute has no application to the actions of the federal government

or its officers acting under color of federal law, but is instead confined to deprivations under color of

state law. See, e.g., Mack v. Alexander, 575 F.2d 488, 489 (5th Cir. 1978) (Section 1983

“provide[s] a remedy for deprivation of rights under color of state law and do[es] not apply when the

defendants are acting under color of federal law”); Rodriguez v. Ritchey, 556 F.2d 1185, 1189 n.13

(5th Cir. 1977) (“Section 1983, however, does not apply to the actions of the federal government.”);

Nghiem v. U.S. Dep’t of Veterans Affairs, 451 F. Supp.2d 599, 605 (S.D.N.Y. 2006) (“Actions of

the federal government or its officers are exempt from the proscriptions of § 1983.”). Clearly, then, the

federal government has not waived its sovereign immunity by consenting to suit under § 1983, inasmuch

as § 1983 on its face does not and cannot apply to the actions of the federal government.

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1 At most, plaintiffs offer the following conclusory statement: “Plaintiffs submit that federal

agencies are covered by the anti-discrimination language of the statutes.” (Plaintiffs’ Brief (doc. 19), at

2.) Plaintiffs cite no authority for this principle, which directly contravenes both the explicit “under color

of state law” textual constraint of those statutes and the unambiguous body of precedents referenced

above.

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Plaintiffs’ § 1981 claim fares no better. That section does not contain the requisite waiver of

sovereign immunity by Congress. See Nghiem, 451 F. Supp.2d at 604 (“the United States has not

consented to be sued under § 1981”); Norris v. Principi, 254 F. Supp.2d 883, 889 (S.D. Ohio 2003)

(“every court which has addressed the question has concluded that § 1981 does not constitute a waiver

of the sovereign immunity for suits against the United States”). Moreover, like § 1983, § 1981 does

not permit claims against federal defendants acting under color of federal law. See Lee v. Hughes, 145

F.3d 1272, 1277 (11th Cir. 1998) (“Both circuit precedent and the text of § 1981 compel us to hold

that a plaintiff cannot maintain a § 1981 claim against a federal defendant acting under color of federal

law.”); Dotson v. Griesa, 398 F.3d 156, 162 (2nd Cir. 2005) (affirming dismissal of § 1981 claims for

conduct pursuant to defendants’ authority under federal, not state, law, reasoning that “under color of

state law” requirement of § 1981 was not satisfied). As these authorities make plain, plaintiffs’ claims

against the USDA under § 1981 are barred because there has been no waiver of sovereign immunity,

and because § 1981 does not apply to actions by the federal government under color of federal law.

In short, then, “a plain reading of §§ 1981 and 1983 indicates that these statutes do not apply

to the federal government.” Harrison v. Potter, 323 F. Supp.2d 593, 604 (S.D.N.Y. 2004). 

Confronted with these arguments, plaintiffs are silent; indeed, their opposition brief makes no attempt to

rebut either the sovereign immunity or the facial inapplicability aspects of defendant’s Motion to Dismiss

concerning these causes of action.1 Plaintiffs’ § 1981 and § 1983 claims are properly dismissed.

B. Statute of Limitations.

In opposition to the Motion to Dismiss, plaintiffs make no persuasive attempt to revive their

moribund claims under § 1981 and § 1983; however, they do point to their claim under the Equal

Credit Opportunity Act, 15 U.S.C. §§ 1691 et seq. (the “Credit Act”). As to that claim (which

defendant’s Motion did not address), plaintiffs maintain that there has been a partial waiver of the

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2 Specifically, plaintiffs note that the Credit Act, which prohibits creditors from

discriminating against applicants in any aspect of a credit transaction, defines “creditor” as including any

“government or governmental subdivision or agency” that regularly extends, renews, or continues credit,

or arranges for such extension, renewal or continuation. 15 U.S.C. § 1691a(d),(f). Further, the Credit

Act states that “any creditor” violating the statute may be held liable to the aggrieved applicant, with the

only limitation being that governments or governmental subdivisions or agencies cannot be liable for

punitive damages. Id. § 1691e(a),(b).

3 See also Tello v. Dean Witter Reynolds, Inc., 410 F.3d 1275, 1288 n.13 (11th Cir.

2005) (“At the motion-to-dismiss stage, a complaint may be dismissed on the basis of a statute-oflimitations defense only if it appears beyond a doubt that Plaintiffs can prove no set of facts that toll the

statute.”) (citation omitted); Hollander v. Brown, 457 F.3d 688, 691 n.1 (7th Cir. 2006) (“a federal

complaint does not fail to state a claim simply because it omits facts that would defeat a statute of

limitations defense,” and Rule 12(b)(6) dismissal on limitations grounds is appropriate only if plaintiff

“effectively pleads herself out of court by alleging facts that are sufficient to establish the defense”);

Spicer v. New Image Int’l, Inc., 447 F. Supp.2d 1226, 1232-33 (D. Kan. 2006) (“If the complaint

alleges facts which on their face seem time-barred, plaintiff has an affirmative obligation to plead facts

which defeat the statute of limitations.”).

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United States’ sovereign immunity.2 The USDA offers no critique of plaintiffs’ sovereign immunity

argument with respect to the Credit Act claim, but instead insists that the Credit Act cause of action

should be dismissed because the Complaint does not allege any violation within the two-year limitations

period provided under 15 U.S.C. § 1691e(f). (Reply Brief (doc. 21), at 1.)

Rule 12(b)(6) dismissal of a claim on statute of limitations grounds is an infrequent occurrence,

inasmuch as the statute of limitations is an affirmative defense which plaintiffs are not required to negate

in their complaint. La Grasta v. First Union Securities, Inc., 358 F.3d 840, 845 (11th Cir. 2004);

see generally Flying Food Group, Inc. v. N.L.R.B., 471 F.3d 178, 183 (D.C. Cir. 2006) (plaintiff is

not required to negate affirmative defenses in complaint, and allegations to avoid or defeat such

defenses lie outside burden of pleading); Thomas v. Independence Tp., 463 F.3d 285, 293 (3rd Cir.

2006) (rejecting unprecedented notion that plaintiff is required to plead allegations negating an

affirmative defense). In light of that fact, “a Rule 12(b)(6) dismissal on statute of limitations grounds is

appropriate only if it is apparent from the face of the complaint that the claim is time-barred.” La

Grasta, 358 F.3d at 845 (citations omitted).3 Here it is far from clear from the face of the Complaint

that plaintiffs’ Credit Act cause of action is time-barred. To be sure, the Complaint, which was filed in

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4

In the alternative, defendant points out that the Credit Act claim is not mentioned until

the last paragraph of the Complaint. (Reply Brief, at 1.) Be that as it may, the Complaint does appear

to state a claim (albeit in skeletal form) under the Credit Act, and defendant has not shown that the lack

of more extensive verbiage concerning such claim is a viable basis for Rule 12(b)(6) dismissal here.

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October 2006, references alleged wrongdoing in April and May of 2004. That conduct appears

outside the two-year limitations period set forth in the Credit Act. But the Complaint also identifies

alleged violations “continuing through December 2004, and beyond.” (Complaint, ¶ 7.) Claims

predicated on events occurring in and after December 2004 would unquestionably be timely. 

Accordingly, defendant is not entitled to a Rule 12(b)(6) dismissal of plaintiffs’ Credit Act claim on

limitations grounds, inasmuch as it is not apparent from the face of the Complaint that such a cause of

action is time-barred.4

C. Jurisdictional Basis of Complaint.

The § 1981 and § 1983 claims having been dismissed as not cognizable against a federal

agency, plaintiffs’ remaining claims are as follows: a federal statutory claim under the Credit Act, a

common law claim for breach of contract, and a common law claim for breach of the implied covenant

of good faith and fair dealing. 

But simply asserting these causes of action is not sufficient for plaintiffs to withstand Rule 12(b)

scrutiny. Under Rule 8(a), Fed.R.Civ.P., a complaint must include “a short and plain statement of the

grounds upon which the court’s jurisdiction depends.” Id. As defendant correctly points out, the sole

jurisdictional basis identified in the Complaint is 28 U.S.C. § 1343(a)(3). (Complaint, ¶ 1.) That

section provides original jurisdiction “[t]o redress the deprivation, under color of any State law ... of

any right, privilege or immunity secured by the Constitution of the United States or by any Act of

Congress providing for equal rights of citizens or of all persons within the jurisdiction of the United

States.” 28 U.S.C. § 1343(a)(3). The citation of § 1343(a)(3) would be sufficient to create federal

subject matter jurisdiction for a Complaint that states causes of action under § 1981 and § 1983. But

those civil rights claims are being dismissed for failure to state a claim on which relief can be granted. In

light of that development, on what basis do plaintiffs invoke federal subject matter jurisdiction? Section

1343(a)(3) is plainly no longer available to them. Their Complaint pleads no alternative basis for

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subject matter jurisdiction, and their briefing is silent on this question, even though defendant expressly

raised it in the Motion to Dismiss. It is incumbent on plaintiffs to identify a valid basis for invoking the

subject matter jurisdiction of this District Court, in the wake of the eradication of their § 1343 ground. 

To enable the Court to evaluate the present jurisdictional posture of this case, plaintiffs must submit a

memorandum of law, amended complaint or other pleading (as they see fit) that delineates the basis on

which subject matter jurisdiction is invoked for plaintiffs’ remaining causes of action under the Credit

Act, for breach of contract, and for breach of the implied covenant of good faith and fair dealing.

III. Conclusion.

For all of the foregoing reasons, defendant’s Motion to Dismiss (doc. 8) is granted in part,

and denied in part. Plaintiffs’ claims under 42 U.S.C. §§ 1981 and 1983 are dismissed with

prejudice under principles of sovereign immunity and the inapplicability of those sections to the federal

government or its agencies, pursuant to Rule 12(b)(6), Fed.R.Civ.P. The Motion to Dismiss is denied

insofar as it seeks dismissal of plaintiffs’ Credit Act claims on limitations grounds. Plaintiffs are

ordered, on or before February 28, 2007, to file a memorandum of law, amended complaint or other

pleading that explains how federal subject matter jurisdiction over the remaining causes of action is

proper. If they so desire, defendants may file a renewed motion to dismiss on subject matter

jurisdiction grounds on or before March 12, 2007.

DONE and ORDERED this 15th day of February, 2007.

s/ WILLIAM H. STEELE 

UNITED STATES DISTRICT JUDGE

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