Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-09-05257/USCOURTS-caDC-09-05257-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

---

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 16, 2010 Decided June 25, 2010 

No. 09-5257 

ST. MARKS PLACE HOUSING COMPANY, INC., ET AL., 

APPELLANTS

v. 

UNITED STATES DEPARTMENT OF HOUSING & URBAN 

DEVELOPMENT AND SHAUN L. S. DONOVAN, AS SECRETARY OF 

THE UNITED STATES DEPARTMENT OF HOUSING AND URBAN 

DEVELOPMENT, 

APPELLEES

Appeal from the United States District Court 

for the District of Columbia 

(No. 1:08-cv-00193-RBW) 

Stephen B. Meister argued the cause and filed the briefs 

for appellants. 

Henry C. Whitaker, Attorney, U.S. Department of Justice, 

argued the cause for appellees. With him on the brief were

Ronald C. Machen Jr., U.S. Attorney, and Michael S. Raab, 

Attorney. R. Craig Lawrence, Assistant U.S. Attorney, 

entered an appearance. 

USCA Case #09-5257 Document #1251794 Filed: 06/25/2010 Page 1 of 14
2 

Before: HENDERSON, TATEL, and GRIFFITH, Circuit 

Judges. 

Opinion for the Court filed by Circuit Judge TATEL.

Circuit Judge HENDERSON concurs in the judgment. 

TATEL, Circuit Judge: Appellants, the current owners and 

prospective buyers of an affordable housing complex, seek to 

prepay the project’s federally insured mortgage. The 

Department of Housing and Urban Development interpreted 

the mortgage to require its approval for prepayment and then 

conditioned that approval on the parties agreeing to maintain 

the property as affordable housing. Appellants challenge this 

decision, contending that HUD regulations prohibit the 

Department from requiring prepayment approval. Deferring 

to HUD’s interpretation of its own regulations, we affirm the 

district court’s dismissal of appellants’ complaint. Along the 

way, we resolve a tricky jurisdictional issue arising from the 

fact that the district court issued an order purporting to 

dismiss the case but stating, “[T]his Order shall not be 

deemed a final Order subject to appeal until the Court has 

issued its Memorandum Opinion.” 

I. 

The National Housing Act (NHA), 12 U.S.C. §§ 1701 et 

seq., authorizes the Department of Housing and Urban 

Development (HUD) to insure and subsidize mortgages in 

order to encourage development of affordable housing. See, 

e.g., id. § 1713(b). The housing project at issue in this case, 

Castleton Park Apartments, is a 454-unit complex located on 

Staten Island. Developed as part of New York State’s 

Mitchell-Lama affordable housing program, the complex was 

originally financed in 1974 with an approximately $20 million 

mortgage from the state’s Housing Finance Agency. Three 

USCA Case #09-5257 Document #1251794 Filed: 06/25/2010 Page 2 of 14
3 

years later, appellant St. Marks Place Housing Company and 

the Housing Finance Agency negotiated a refinancing, 

dividing the original mortgage into a senior loan of 

approximately $18 million and a subordinate loan for the 

balance of the debt. Under NHA sections 207 and 223(b), the 

Housing Finance Agency obtained insurance from HUD for 

the senior mortgage—the subject of this case. Section 207 

“facilitate[s] particularly the production of rental 

accommodations, at reasonable rents, of design and size 

suitable for family living.” Id. § 1713(b)(2). Section 223(f) 

provides for “[i]nsurance of mortgages executed in 

connection with . . . refinancing of existing multifamily 

housing project[s].” Id. § 1715n(f). 

Although the Castleton Park mortgage has a forty-year 

term, reaching maturity in 2017, it gives the borrower a right 

to prepay. The mortgage’s prepayment clause states: 

“Privilege is reserved to pay the debt in whole or in an 

amount equal to one or more monthly payments on principal 

next due, on the first day of any month prior to maturity upon 

at least thirty (30) days’ prior written notice to the holder.” A 

footnote to this sentence provides, “Subject to the prior 

approval of the Secretary of Housing and Urban 

Development.” 

In 2006, St. Marks and an affiliated limited partnership 

known as St. Marks Place Associates contracted to sell their 

interests in the Castleton Park Apartments to Stellar CP LP 

and Castleton GP LLC. As part of this transaction, the sellers 

and the prospective buyers notified HUD that the two St. 

Marks companies intended to prepay the senior HUD-insured 

mortgage. Citing the mortgage’s requirement that HUD 

approve prepayment, however, the Department notified the 

parties that their prepayment was subject to NHA section 250. 

That section provides, “During any period in which an owner 

USCA Case #09-5257 Document #1251794 Filed: 06/25/2010 Page 3 of 14
4 

of a multifamily rental housing project is required to obtain 

the approval of the Secretary for prepayment of the mortgage, 

the Secretary shall not accept an offer to prepay the mortgage 

on such project” unless he finds that certain conditions 

designed to preserve the supply of affordable housing and 

protect the project’s tenants have been satisfied. 12 U.S.C. 

§ 1715z-15(a). HUD advised the parties that pursuant to 

these requirements it would approve prepayment only if the 

companies invest substantial sums to repair and rehabilitate 

the complex, promise to maintain it as a viable multifamily 

affordable housing property, and notify residents of the 

prepayment. 

In response, the St. Marks companies and the prospective 

Castleton Park purchasers filed suit in the United States 

District Court for the District of Columbia. The companies 

principally argued that at the time the Castleton Park senior 

mortgage was executed, HUD regulations governing section 

207 mortgages barred prepayment conditions and that the 

mortgage’s requirement that the owners obtain HUD approval 

for prepayment is therefore unenforceable. In support, they 

cited 24 C.F.R. § 207.14(a) (1977), which provides that 

section 207-insured mortgages “shall contain a provision 

permitting the mortgagor to prepay the mortgage . . . after 

giving to the mortgagee 30 days’ notice in writing.” Moving 

to dismiss for failure to state a claim, see Fed. R. Civ. P. 

12(b)(6), HUD countered that section 207.14(a) limits only a 

lender’s right to refuse prepayment. According to HUD, 

nothing in section 207.14(a) prohibits prepayment from being 

conditioned on HUD approval. 

The district court, deferring to HUD’s interpretation of its 

own regulation, dismissed the complaint. St. Marks Place 

Housing Co. v. HUD, No. 08-193, 2009 WL 1543688, at *6–7 

(D.D.C. June 3, 2009). The companies appeal, and we review 

USCA Case #09-5257 Document #1251794 Filed: 06/25/2010 Page 4 of 14
5 

the district court’s decision de novo. Nat’l Wildlife Fed’n v. 

Browner, 127 F.3d 1126, 1128 (D.C. Cir. 1997) (reviewing de 

novo district court’s Rule 12(b)(6) dismissal of a complaint 

against EPA based on the agency’s regulations). 

II. 

Before considering the companies’ arguments on the 

merits, we must address a threshold question regarding our 

jurisdiction. See Steel Co. v. Citizens for a Better Env’t, 523 

U.S. 83, 94–95 (1998) (courts must consider jurisdictional 

issues sua sponte). Under 28 U.S.C. § 1291, appeals may be 

taken (with certain exceptions not relevant here) only from 

“final decisions.” “A ‘final decision’ generally is one which 

ends the litigation on the merits and leaves nothing for the 

court to do but execute the judgment.” Budinich v. Becton 

Dickinson & Co., 486 U.S. 196, 199 (1988) (internal 

quotation marks omitted). Under Federal Rule of Appellate 

Procedure 4(a)(1)(B), the notice of appeal must be filed 

“within 60 days after the judgment or order appealed from is 

entered” in civil cases where a U.S. agency is a party. See 

also 28 U.S.C. § 2107(b) (statutory basis for Rule 4(a)(1)(B)); 

Bowles v. Russell, 551 U.S. 205, 210 (2007) (recognizing 

“statutory time limits for taking an appeal as jurisdictional”). 

This deadline is strict: “Congress [has] specifically limited the 

amount of time by which district courts can extend the noticeof-appeal period,” litigants “cannot rely on forfeiture or 

waiver to excuse . . . lack of compliance,” and courts have “no 

authority to create equitable exceptions.” Bowles, 551 U.S. at 

213–14 (2007). 

In this case, the district court entered an order purporting 

to dismiss the companies’ complaint on March 27, 2009. The 

order states: 

USCA Case #09-5257 Document #1251794 Filed: 06/25/2010 Page 5 of 14
6 

The plaintiffs bring this claim pursuant to the 

Administrative Procedure Act (“APA”), 5 U.S.C. 

§§ 701-06 (2006), seeking a declaratory judgment, 

injunctive relief, and an order of mandamus. 

Currently before the Court is the defendants’ motion 

to dismiss pursuant to Federal Rule of Civil 

Procedure 12(b)(6). Upon consideration of the 

various filings submitted by the parties, the Court 

will grant the defendants’ motion. Therefore, in 

accordance with the Court’s reasoning to be set forth 

in the Memorandum Opinion to be issued within 

thirty days of this order, absent unforseen [sic] 

circumstances, it is hereby 

ORDERED that the defendants’ motion is 

GRANTED. It is further 

ORDERED that this case is closed. It is further 

ORDERED that this Order shall not be deemed a 

final Order subject to appeal until the Court has 

issued its Memorandum Opinion. 

St. Marks, No. 08-193 (D.D.C. Mar. 27, 2009) (footnote 

omitted). Sixty-eight days later, on June 3, the court issued its 

opinion. In a footnote, the court stated, “This Memorandum 

Opinion renders the Order granting the Defendants’ Motion to 

Dismiss entered on March 27, 2009, an appealable Order.” 

St. Marks, 2009 WL 1543688, at *8 n.5. The companies filed 

their notice of appeal on July 13, forty days after the June 3 

opinion and 108 days after the March order. As measured 

from the opinion, then, the companies’ notice of appeal was 

timely, but as measured from the earlier order, it was not. 

USCA Case #09-5257 Document #1251794 Filed: 06/25/2010 Page 6 of 14
7 

The companies argue that their appeal is timely because, 

as they see it, the district court’s March order was not a 

section 1291 “final decision,” so Rule 4(a)’s sixty-day clock 

could not start running until the district court issued its June 

opinion. HUD agrees, even though, having prevailed in the 

district court, it would obviously benefit from a dismissal for 

lack of appellate jurisdiction. Whether the companies and 

HUD are correct turns on how one resolves the apparently 

contradictory language in the March order. On the one hand, 

the order announced the court’s decision in seemingly 

definitive terms: “ORDERED that the defendants’ motion is 

GRANTED”; “ORDERED that this case is closed.” See Ctr. 

for Nuclear Responsibility, Inc. v. U.S. Nuclear Reg. Comm’n, 

781 F.2d 935, 938–39 (D.C. Cir. 1986) (a final order that 

precedes the opinion explaining it nonetheless starts the time 

for appeal). On the other hand, the order disclaimed its own 

finality: “[T]his Order shall not be deemed a final Order.” 

Several considerations convince us that the latter statement 

controls, meaning that the district court did not issue a section 

1291 “final decision” until it released its June opinion. 

First, and most obviously, district courts can choose 

when to decide their cases. This provides a strong reason to 

take the district court at its word when it wrote, “[T]his Order 

shall not be deemed . . . final.” See Bankers Trust Co. v. 

Mallis, 435 U.S. 381, 385 n.6 (1978) (describing section 1291 

finality as turning on “whether the district court intended the 

judgment to represent the final decision in the case”). 

Second, and somewhat counterintuitively, apparently 

definitive dismissal language—like “ORDERED that this case 

is closed”—does not always signal finality. For example, in 

Castro County, Tex. v. Crespin, 101 F.3d 121 (D.C. Cir. 

1996), we found an order to be nonfinal even though it stated, 

“ORDERED that the above-entitled cause shall be, and 

USCA Case #09-5257 Document #1251794 Filed: 06/25/2010 Page 7 of 14
8 

hereby is, DISMISSED . . . .” Id. at 123. Although Castro 

County differs from this case in that it dealt with a conditional 

order—the order stated that the case would be reopened if 

settlement negotiations failed—it makes clear that in 

determining finality, we must read the district court’s order as 

a whole and may not focus on dismissal language in isolation. 

See also Se. Fed. Power Customers, Inc. v. Harvey, 400 F.3d 

1, 5 (D.C. Cir. 2005) (order stating that settlement agreement 

“is hereby declared valid and approved” was not final where it 

was conditioned on another court lifting a related injunction). 

Third, the district court issued its March order just four 

days before the March 31 deadline on which judges must 

report all motions that have been pending for more than six 

months. See 28 U.S.C. § 476(a) (creating reporting 

requirements); Administrative Office of the U.S. Courts, Civil 

Justice Reform Act of 1990 (2009) (report on motions pending 

March 31, 2009), available at http:// jnet.ao.dcn / Statistics / 

Other_Statistical_Publications / Civil_Justice_Reform_Act_

March_2009.html. At that time, HUD’s motion to dismiss 

had been pending for more than six months, and the district 

court, having ordered the motion “GRANTED” and the case 

“closed,” was able to file the March 31 report without listing 

the motion. In the companion case that we resolve by 

judgment today, Woodruff v. McPhie, No. 09-5086 (D.C. Cir. 

June 25, 2010), the district court did the same thing: just a few 

days before the March 31 deadline, it granted a motion to 

dismiss that had been pending for over six months, instructing 

in its dismissal order that it “not be deemed a final order.” 

Woodruff v. McPhie, No. 06-688 (D.D.C. Mar. 28, 2008). 

Given these circumstances, and given that the March order at 

issue in this case warned that “this Order shall not be deemed 

a final Order subject to appeal,” we think it quite clear that the 

district court “closed” the case for reporting purposes only. 

Although we are aware of no case quite like this one, other 

USCA Case #09-5257 Document #1251794 Filed: 06/25/2010 Page 8 of 14
9 

circuits have held that closure of a case for reporting 

purposes—sometimes referred to as “administrative 

closure”—does not qualify as a section 1291 “final decision.” 

See Mire v. Full Spectrum Lending Inc., 389 F.3d 163, 167 

(5th Cir. 2004) (“The effect of an administrative closure is no 

different from a simple stay, except that it affects the count of 

active cases pending on the court’s docket; i.e., 

administratively closed cases are not counted as active.”); 

15A Charles Alan Wright, Arthur R. Miller & Edward H. 

Cooper, Federal Practice and Procedure § 3914.6, at 539 & 

n.29 (2d ed. 1991 & Supp. 2010) (collecting cases). 

Finally, in applying Federal Rule of Civil Procedure 58’s 

requirement that judgments be set out in a separate document, 

the Supreme Court has emphasized that “‘[t]he rule should be 

interpreted to prevent loss of the right of appeal, not to 

facilitate loss.’” Bankers Trust Co., 435 U.S. at 386 (quoting 

9 J. Moore, Federal Practice ¶ 110.08[2], at 119–20 (1970)). 

Because the separate document rule and section 1291 work 

together to determine the timing of appeals, we think the same 

principle should apply to questions of finality, thus providing 

another reason why orders expressly denying their own 

finality, like the district court’s March order, should be taken 

at their word. Were we to treat the March order as final 

notwithstanding such language, then the companies would 

lose their right to appeal even though, as counsel made clear 

at oral argument, they had relied on that language to postpone 

filing their notice of appeal until the district court issued its 

June opinion. 

To sum up, although district courts are generally without 

authority to extend the time for appeal, they may choose when 

to decide their cases. Of course, district courts may not use 

the latter authority as cover for doing the former, but that is 

not what happened here. The court made its March order 

USCA Case #09-5257 Document #1251794 Filed: 06/25/2010 Page 9 of 14
10 

nonfinal because it entered the order for reporting purposes 

only. The court’s “final decision” came in its June opinion, 

and because the companies timely filed their notice of appeal 

following that opinion, we have jurisdiction. 

That said, we believe that orders whose finality awaits 

the issuance of a later opinion should be avoided. Setting 

aside the propriety of using such orders to report motions as 

resolved when they still require judicial attention—a matter 

we leave to the district courts and the Administrative Office—

these orders can confuse parties. In this case, for example, 

counsel for the companies was quite candid: “I think [the 

order] is contradictory and it did create confusion. And to be 

perfectly blunt, we struggled with it.” Oral Arg. Tr. at 4. 

Only after “consultation with local counsel,” he explained, did 

they come “to the conclusion . . . that we had to wait for the 

Memorandum Decision” before filing an appeal. Id. at 4–5. 

In suggesting that orders like the one here be used rarely, 

if at all, we fully understand, as Judge Rovner—herself a 

former district judge—has cautioned, that district courts have 

“scarce resources” and “are overextended”; that reports on 

unresolved motions may produce “something of a stigma”; 

and that “congressionally-imposed time constraints on the 

civil docket compete with the Speedy Trial Act restrictions of 

the criminal docket,” as well as other obligations. Otis v. City 

of Chicago, 29 F.3d 1159, 1172 (7th Cir. 1994) (Rovner, J., 

concurring in the judgment). And we certainly share Judge 

Rovner’s belief that it is “incumbent upon us, as a responsible 

and responsive reviewing court, to provide our colleagues 

with all reasonable means of efficiently and intelligently 

managing their case loads.” Id. at 1173. The last thing we 

want is to exacerbate the competing pressures on busy, 

dedicated district court judges. Still, we think all judges, both 

circuit and district, must take care to ensure that case 

USCA Case #09-5257 Document #1251794 Filed: 06/25/2010 Page 10 of 14
11 

management innovations neither confuse litigants nor threaten 

their procedural rights. 

III. 

On the merits, the companies’ principal argument rests on 

24 C.F.R. § 207.14(a) (1977), which states in full: 

“Prepayment privilege. The mortgage shall contain a 

provision permitting the mortgagor to prepay the mortgage in 

whole or in part upon any interest payment date after giving 

to the mortgagee 30 days’ notice in writing in advance of its 

intention to so prepay.” The companies contend that “[i]f the 

mortgagor of a Section 207 mortgage loan must seek HUD’s 

approval for prepayment of that loan, and HUD refuses to 

grant such approval, then the result is that the mortgagor has 

been denied the right to ‘prepay the mortgage in whole or in 

part . . . after giving the mortgagee 30 days’ notice in writing 

in advance of its intention to so prepay.’” Appellants’ Br. 45 

(quoting 24 C.F.R. § 207.14(a)). Drawing an expressio unius 

inference from the regulation, the companies insist that “[t]he 

only permissible requirements for the prepayment of [a 

section 207 mortgage are] that the borrower give the required 

thirty days’ notice of its intent to make such prepayment and 

that the prepayment occur on an interest payment date.” Id. 

HUD counters that the prepayment term “provided for in 

§ 207.14 is not . . . an ‘unfettered right to prepay.’” 

Appellees’ Br. 24 (quoting Appellants’ Br. 37). Instead, 

HUD argues, the “regulation addresse[s] the rights and 

obligations as between the owner and the lender,” and the 

Castleton Park mortgage complies with section 207.14(a) 

because it denies the lender the right to refuse prepayment. 

Id. at 24–25. HUD continues: “[i]t is reasonable to construe 

[section 207.14] as silent on the parties’ privileges with 

respect to nonparties to the mortgage, such as the Secretary, 

and thus to permit the parties to condition prepayment on the 

Secretary’s approval.” Id. at 25. 

USCA Case #09-5257 Document #1251794 Filed: 06/25/2010 Page 11 of 14
12 

In evaluating these competing arguments, “[w]e must 

give substantial deference to an agency’s interpretation of its 

own regulations.” Thomas Jefferson Univ. v. Shalala, 512 

U.S. 504, 512 (1994). Indeed, “the agency’s interpretation 

must be given controlling weight unless it is plainly erroneous 

or inconsistent with the regulation.” Id. (internal quotation 

marks omitted). 

Were we interpreting HUD’s regulations in the first 

instance, the companies’ expressio unius argument might 

have some merit. But we have previously held that the 

expressio unius canon “has little force” in the context of 

challenges to an agency’s interpretation of a statute, “where 

we defer to an agency’s interpretation unless Congress has 

directly spoken to the precise question at issue.” Mobile 

Commc’ns Corp. of Am. v. FCC, 77 F.3d 1399, 1404–05 

(D.C. Cir. 1996) (internal quotation marks omitted). The 

same principle applies all the more so where, as here, we are 

reviewing an agency’s interpretation of its own regulations. 

Nat’l Med. Enters. v. Shalala, 43 F.3d 691, 696–97 (D.C. Cir. 

1995) (in reviewing an agency’s interpretation of its own 

regulations, “we apply a still more deferential standard” than 

in reviewing its interpretation of a statute). 

In this case, nothing in section 207.14(a) unambiguously 

forecloses HUD’s interpretation of the regulation as 

governing only “the rights and obligations as between the 

owner and the lender.” Appellees’ Br. 25. The regulation 

describes what the “mortgage shall contain,” and the 

mortgage is between the mortgagor and mortgagee. HUD is 

not a party, nor is it mentioned anywhere in the text of the 

provision. Given this, we have no basis for concluding that 

HUD’s position—that the regulation does not relate to it—is 

“plainly erroneous or inconsistent with the regulation.” 

USCA Case #09-5257 Document #1251794 Filed: 06/25/2010 Page 12 of 14
13 

Thomas Jefferson Univ., 512 U.S. at 512 (internal quotation 

marks omitted). 

HUD’s interpretation gains support from section 

207.14(a)’s subsequent subsections. Section 207.14(b) 

governs prepayment charges, stating that section 207 

mortgages “may contain a provision” for a prepayment charge 

“as may be agreed upon between the mortgagor and 

mortgagee,” so long as the mortgagor is “permitted to prepay 

up to 15 percent of the original principal amount . . . in any 

one calendar year” without charge. By its terms, then, this 

provision focuses on the financial relationship between the 

lender and borrower, meaning that the requirement that a 

borrower be “permitted to prepay up to 15 percent” without 

penalty clearly refers to prepayment permission from the 

lender. Likewise, section 207.14(c) states that a mortgage 

“may provide for the collection by the mortgagee of a late 

charge,” again focusing on the financial terms of the deal 

between the borrower and the lender. Reading section 

207.14(a) in light of these neighboring provisions, we think it 

perfectly reasonable for HUD to have interpreted the 

regulation as prohibiting only mortgage terms that give 

lenders the right to refuse prepayments, while remaining 

silent on those giving HUD a right to object to such payments. 

The companies insist that even if we might otherwise 

defer to HUD’s interpretation, we should not do so here 

because, according to an internal HUD memorandum, the 

Department’s General Counsel advocated for a different 

reading of the regulation. But so what? The HUD secretary, 

like all agency heads, usually makes decisions after 

consulting subordinates, and those subordinates often have 

different views. In the end, it is the agency head whose 

decision we review, and as the Supreme Court has made clear, 

“the mere fact that the Secretary’s decision overruled the 

USCA Case #09-5257 Document #1251794 Filed: 06/25/2010 Page 13 of 14
14 

views of some of his subordinates is by itself of no moment in 

any judicial review of his decision.” Wisconsin v. City of New 

York, 517 U.S. 1, 23 (1996) (upholding the Secretary of 

Commerce’s decision to overrule the Census Director 

regarding statistical adjustments to the decennial census). 

Finally, the companies argue that even if we reject their 

reading of section 207.14(a), we should interpret the Castleton 

Park mortgage to require HUD approval for only partial 

prepayments and not the kind of full prepayment that the 

companies seek to make. The footnote that makes 

prepayments “[s]ubject to the prior approval of [HUD]” is 

attached to the end of the following sentence: “Privilege is 

reserved to pay the debt in whole or in an amount equal to one 

or more monthly payments on principal next due, on the first 

day of any month prior to maturity upon at least thirty (30) 

days’ prior written notice to the holder.” According to the 

companies, the footnote modifies only the second clause, i.e., 

“or in an amount equal to one or more monthly payments on 

principal next due.” The footnote signal, however, appears at 

the end of the sentence, not after the phrase “or in an amount 

. . . ,” and therefore obviously modifies the entire sentence. 

The companies insist that an attachment to the mortgage 

supports their interpretation because it discusses HUD 

preapproval of one particular early payment contemplated by 

the parties but is silent as to HUD preapproval of other 

possible prepayments. But whatever the significance of this 

attachment, it hardly gives us reason to embrace the 

companies’ counterintuitive and countertextual interpretation 

of the mortgage itself. 

We affirm the district court’s dismissal of this case. 

So ordered. 

USCA Case #09-5257 Document #1251794 Filed: 06/25/2010 Page 14 of 14