UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

ASSOCIATED MORTGAGE BANKERS INC., Plaintiff,

v. BEN CARSON, et al. , Defendants
. Civil Action No. 17-0075 (ESH)

MEMORANDUM OPINION AND ORDER Before the Court is plainti ff’s motion for reconsideration. T he factual and procedural background is set forth in the Court’s September 20, 2017 Memor andum Opinion granting in part, and denying in part, defendant s’ motion to dismiss. (ECF No. 23 (“MTD Op.”).) In that Memorandum Opinion, the Court di smissed with prejudice plaintif f’s claim for breach of the covenant of good faith and fair d ealing (“Count II”) for lack o f subject matter jurisdiction because it is within the Tucker Act’s exclusive jurisdiction. (MTD Op. at 7–8.) The Court denied defendants’ motion to dism iss plaintiff’s claim under 5 U.S.C. § 706(2)(A) of the Administrative Procedure Act (“AP A”) to the extent that it chal lenged an administrative judge’s (“AJ”) decision upholding the Dep artment of Housing and Urban D evelopment’s (“HUD”) offset against plaintiff (“Count I”). However, the Court noted that its review on Count I going forward would be confined to that issue: “This action will not include discovery or class certification. After the adminis trative record is filed, the C ourt will decide whether the AJ reached her decision in an arbitrary and capricious manner, or otherwise violated an applicable2 statute or regulati on.” (MTD Op. at 13.) In its motion for reconsiderat ion, plaintiff argues that (1) th e Court should not have dismissed Count II for lack of j urisdiction because defendants did not explicitly argue for dismissal on that ground and the Court has jurisdiction under H UD’s sue and be sued clause, 12 U.S.C. § 1702; (2) if the Court we re to reach jurisdiction sua sponte and find against plaintiff, it should have dismissed Count II wi thout prejudice; and (3) the C ourt should not have concluded that plaintiff could not maint ain a class action on Count I wit hout receiving briefings from the parties on class certification. F or the reasons that follow, t he Court grants the motion in part and denies the motion in part. 1
ANALYSIS
I. LEGAL STANDARD Interlocutory decisions “may be rev ised at any time before the entry of a judgment.” Fed. R. Civ. P. 54(b). However, a cou rt “should be loathe” to grant a motion for reconsideration “in the absence of extraordinary cir cumstances such as where the in itial decision was clearly erroneous and would work a manifest injustice.” Marshall v. Honeywe ll Tech. Sols., Inc. , 598 F. Supp. 2d 57, 59 (D.D.C. 2009) (citation omitted); see also Mohammadi v. Islamic Republic of
Iran , 782 F.3d 9, 17 (D.C. Cir. 2015). “The moving party has the b urden of showing that reconsideration is warranted, a nd that some harm or injustice w ould result if reconsideration were to be denied.” Marshall , 598 F. Supp. 2d at 60; see also Nat’l Ctr. fo r Mfg. Scis. v. Dep’t of Def. , 199 F.3d 507, 511 (D.C. Cir. 2000) (not ing that “a district c ourt should not grant a

1 Plaintiff also has an outstandi ng motion to amend its complain t, ECF No. 22, which the Court does not address here.3 motion for reconsideration unle ss the moving party shows new fa cts or clear errors of law which compel the court to change its prior position”).
II. COUNT II To begin, there is nothing impr oper about the Court dismissing plaintiff’s Count II for lack of subject matter jurisdic tion without briefing from the p arties; a district court may conduct a subject-matter-jurisdiction i nquiry sua sponte. Fed. R. Civ. P. 12(h)(3); NetworkIP, LLC v.
FCC , 548 F.3d 116, 120 (D.C. Cir. 2008); see also Evans v. Suter , No. 09-5242, 2010 WL 1632902, at *1 (D.C. Cir. Apr. 2, 2010) (per curiam) (unpublish ed) (affirming the district court’s denial of the appellant’s moti on for reconsideration, and expla ining that “a district court may dismiss a complaint sua sponte . . . when, as here, it is evide nt that the court lacks subject-matter jurisdiction”). Second, contrary to plaintiff’s a ssertions, the Court was well aware of HUD’s sue and be sued clause, 12 U.S.C. § 1702, when it dismissed Count II for l ack for jurisdiction. ( See MTD Op. at 9 n.7.) Section 1702 may waive HUD’s sovereign immunity , but it is not an independent grant of jurisdiction. See Lightfoot v. Cendant Mortg. Corp. , 137 S. Ct. 553, 561 (2017) (noting that “Fannie Mae’s sue-and-be-s ued clause is most naturally rea d not to grant federal courts subject-matter jurisdiction over all cases involving Fannie Mae . In authorizing Fannie Mae to sue and be sued ‘in any court of compe tent jurisdiction, State or F ederal,’ it permits suit in any state or federal court already endowe d with subject-ma tter jurisdicti on over the suit”). The operative language in Lightfoot is virtually identical to 12 U.S.C. § 1702. Compare 12 U.S.C. § 1723a(a),
with id. § 1702. Plaintiff also argues in i ts reply that 28 U.S.C. § 1331 and 28 U.S.C. § 1332 could provide a basis for jurisdict ion over Count II. As to 28 U.S.C . § 1332, the Court will not read a4 jurisdictional allegation into pl aintiff’s complaint as a groun d for granting a motion to reconsider. Plaintiff’s only c ited jurisdictional ground in it s complaint was 28 U.S.C. § 1331 (Compl. ¶ 6), which the Court al ready considered and rejected. And despite the arguments presented by plaintiff on its moti on to reconsider, the Court s till finds § 1331 to be an inadequate basis for exercising jurisdiction. Plaintiff argues that Trans-Bay Engineers & Builders, Inc. v. Hills , 551 F.2d 370 (D.C. Cir. 1976), demonstrates that th is Court has jurisdiction under 28 U.S.C. § 1331. In Trans-Bay , the plaintiff was a constructi on company that did not have a co ntract with HUD. Id. at 373–74. The plaintiff had entered into a construction contract with a n on-profit corporation (“MORH”) that was building a housing project for low and moderate income families. Id. MORH in turn had a contract with Advance Mort gage Corporation to provide “th e mortgage financing for the project.” Id. at 374. The Federal Housing Admin istration, “an organizational sub-unit of HUD,” was administering a program that r educed the risk to mortgage l enders and owners of housing projects for low and moderate i ncome families—i.e., MORH and Ad vance. Id. at 373–74. Therefore, HUD and MORH signed a “Regulatory Agreement” that “c overed the owner’s use of the loan funds, rental rates and many other obligations.” Id. at 374. The construction contract between the plaintiff and MORH author ized MORH to holdback 10% of the monthly cons truction payments to be payable 30 days after construction was completed if the plainti ff met certain preconditions. Id. at 374–75. The plaintiff met its obligations under the cont ract with MORH by June 30, 1973, but did not receive the holdback funds because Advance and HUD re fused to release the funds. Id. at 375. “In October 1973, Advance and HUD agreed to rel ease one half of that amount . . . . HUD took the position that the remainder of those funds c ould not, in the normal course, b e released until after a ‘final5 closing’ of the mortgage financ ing had occurred for the project .” Id. at 375 (footnotes omitted). That never occurred b ecause MORH defaulted. Id. Advance assigned the mortgage to HUD, and HUD foreclosed on the mortgag e without paying the plaintiff the remaining holdback funds.
Id. The plaintiff then sought “recove ry against the Secretary and A dvance as a third party beneficiary to the Building Loa n Agreement, and alternatively u nder theories of suretyship, and equitable lien/unjust enrichment.” Id. The district court entered summary judgment for HUD and Advance. Id. at 373. On appeal, the D.C. Circuit ex amined jurisdiction and found tha t 12 U.S.C. § 1702 waived sovereign immunity, but d id not reach the question of wh ether § 1702 also granted subject matter jurisdiction because it concluded that subject m atter jurisdiction existed under 28 U.S.C. § 1332 and 28 U.S.C. § 1331. Id. at 376–78. As to § 1331, the D.C. Circuit concluded that equitable rights determine d by federal common law were the source of the plaintiff’s claims, not a “contract between” HUD and the plaintiff. Id. at 377; see also Molton, Allen & Williams,
Inc. v. Harris , 436 F. Supp. 853, 857 (D.D.C. 1977) (“A close analysis of [ Trans-Bay ], however, reveals that federal question j urisdiction was found there beca use the plaintiff’s claim was founded upon ‘equitable rights gene rated by HUD’s course of act ivities pursuant to federal statutes.’” (citing Trans-Bay , 551 F.2d at 377)). In contrast, pla intiff’s Count II is a cl aim that HUD breached the covenant of good faith and fair dealing in a c ontract between HUD and plaintiff. ( See MTD Op. at 7.). Plaintiff is correct that fede ral common law also governs contr acts between HUD and plaintiff. But finding subject m atter jurisdic tion on this bas is alone would eviscerate the Tucker Act’s grant of exclusive juris diction. “If plaintiff’s argumen t were to prevail, every Government6 contracts case where the waiver of sovereign immunity was not d ependent solely on the Tucker Act could be brought in a federal district court because the fe deral common law of contracts provides the rules of decision in all Government contracts case s.” Molton , 436 F. Supp. at 856. Following the rationale set forth in Molton , this Court will not read Trans-Bay as expansively as plaintiff would like, especially given the more recent controll ing D.C. Circuit precedent holding that a plaintiff cannot “bypass Tu cker Act jurisdiction by conv erting complaints which ‘at their essence’ seek money damages from the government into complaints requesting injunctive relief or declaratory actions.” Kidwell v. Dep’t of Army, Bd. for Corr. Of Military Records , 56 F.3d 279, 284 (D.C. Cir. 1995). Given the lack of controlling or c onvincing prece dent, the Cour t will not reconsider its jurisdicti onal ruling with r egard to Count I I. 2 Finally, the Court’s dismissal of Count II with prejudice was m eant only to be with prejudice in this Court. See Semtek Int’l Inc. v. Lockheed Martin Corp. , 531 U.S. 497, 505 (2001) (“The primary meaning of ‘di smissal without prejudice,’ we think, is dismissal without barring the plaintiff from retur ning later, to the same court, with the same underlying claim.”); see also Attias v. Carefirst, Inc. , 865 F.3d 620, 625 (D.C. Cir. 2017) (“B y dismissing without prejudice, a district court leav es the plaintiff free to return later to the same c ourt with the same underlying claim.”) However, for the sake of clarity, and give n the parties’ concessions on the matter, 3 the Court will grant plaintiff’s motion for reconsideration in part to provide for dismissal

2 Plaintiff also relies on Yee v. Jewell , 228 F. Supp. 3d 48 (D.D.C. 2017), but the district court in that case reserved the question of dismissal or transfer to the Court of Federal Claims “[i]n the event that subject-matter jurisdiction is lacking.” Id. at 56. In fact, the district court subsequently transferred the cas e to the Court of Federal Claim s. Yee , 16-cv-0490, Order, Jan. 25, 2017, ECF No. 17. 3 “AMB asserts that it should be f ree to refile its contract cla im in the Court of Federal Claims. Although there may be other bars to filing this case in the Cou rt of Federal Claims, the Court’s dismissal with prejudice is not one of them.” (Defs.’ Opp. to Pl.’s Mot. for Recons., Oct. 12, 2017, ECF No. 30, at 9 n.6 (internal citation omitted).) “[C]h anging dismissal—assuming the7 of Count II without prejudice to r efiling in the Court of Feder al Claims.
III. COUNT I The Court finds no grounds to reco nsider its ruling on Count I, which limited the scope of review to whether, based on the adm inistrative r ecord, the AJ’s decision violated the APA. 5 U.S.C. § 706(2)(A). “A district court exercises broad discre tion in deciding whether to permit a case to proceed as a class action.” Hartman v. Duffey , 19 F.3d 1459, 1471 (D.C. Cir. 1994). Plaintiff argues that it has a due process right to brief and b e heard on class ce rtification, but “when a party seeks review of age ncy action under the APA, the district judge sits as an appellate tribunal. T he ‘entire case’ on r eview is a question of law,” Am. Bioscience, Inc. v. Thompson , 269 F.3d 1077, 1083 (D.C. Cir. 2001) (footnote omitted), and here, that question is not amenable to class certifica tion. The challenged agency act ion is the AJ’s decision. The AJ’s review was confined to whether pl aintiff’s debt under an indemn ification agreement between plaintiff and HUD was past due a nd legally enforceable. (MTD O p. at 1–5.) The fact that the AJ’s decision represents final agency action reviewable under 5 U.S.C. § 706(2)(A) does not alone make it amenable to a Rule 23 class action. Plaintiff is the only party to which the AJ’s decision applied, and if plaintiff succeeds on Count I, its rel ief would be vacatur of the AJ’s decision. See Am. Bioscience, Inc. , 269 F.3d at 1084. The cases plaintiff cites as APA class actions involve, at best , challenges to broad policies, not an APA challenge limited to review of an ALJ’s or AJ’s individualized decision involving one party. For example, plaintiff cites Cohen v. United States , 650 F.3d 717 (D.C. Cir.

Court still concludes that it lacks subject-matter jurisdiction —to ‘without prejudi ce to refiling in the Court of Federal Claims’ w ill make the import of the Court’ s decision crystal clear and will address both sides’ concerns.” (Pl.’s Reply in Supp. of Pl.’s Mot. for Recons., Oct. 19, 2017, ECF No. 31, at 6.)8 2011) (en banc) for support, but Cohen involved a class action chall enge to the adequacy of an IRS Notice establishing refund proc edures for taxpayers to reco up incorrectly collected excises

taxes. Id. at 719–22. In an en banc decision, the Court distinguished suc h a broad programmatic challenge from a challenge t o an IRS tax refund adjudication wh ich would involve relief that “would be individualize d, not class wide.” Id. at 732. Similarly, plaintiff cites Blackmon-Malloy v. U.S. Capitol Police Board , 575 F.3d 699 (D.C. Cir. 2009), and Contreras v. Ridge , 305 F. Supp. 2d 126 (D.D.C. 2004), for the pr oposition that “so long a s one member of the class undertakes the necessary agency proceedings, it can support a c lass whose other members did not first go before the agenc y,” (Pl.’s Reply in Supp. of Pl.’s Mot. for Recons., Oct. 19, 2017, ECF No. 31, at 10), but these cases are distinguishable. They involved (1) the Congressional Accountability Act and Title VII of the Civil Rights Act, not t he APA, and (2) claims of systemic discrimination that were amenable to class relief. Blackmon-Malloy , 575 F.3d at 701– 02, 704–10; Contreras , 305 F. Supp. 2d at 128–35. The claim in Count I that still exists after the Court’s Memora ndum Opinion is not amenable to resolution, as a matter of law, by class action. T hus, no harm or injustice results from denying plaintiff’s motion to reconsider. See Fed. R. Civ. P. 23(c)(1)(A); Best v. Kelly , 39 F.3d 328, 331 (D.C. Cir. 1994); see also Atchison v. U.S. Dist. Courts , 190 F. Supp. 3d 78, 99 n.22 (D.D.C. 2016) aff’d , 240 F. Supp. 3d 121 (D.D.C. 2017) (motion for reconsideration ).
CONCLUSION For the reasons sta ted above, it is hereby
ORDERED that plaintiff’s motion for reconsideration, ECF No. 24, is GRANTED IN
PART to clarify that its dismissal of Count II for lack of jurisdic tion is without prejudice to9 refiling in the Court of Feder al Claims; and it is further
ORDERED that plaintiff’s motion for reconsideration, ECF No. 24, is ot herwise
DENIED

.

/s/ Ellen Segal Huvelle ELLEN SEGAL HUVELLE United States District Judge Date: November 15, 2017