NB C-USA HOUSI NG, Inc., TWENTY-SIX Plaintiff,

v. SHAUN DON OVAN, Sec reta ry of the Depa rtment of Housingand Ur ban Deve lopment, et al. , Def endants. UNITED STAT ES DIS TRICT COURT

F OR THE DIS TRICT OF COLUM BIA

Civil Action No. 09–2245 (CKK)

MEMORAN DUM OP INION (Mar ch 31, 2011) Plaintiff NBC-U SA Housing, Inc., Twe nty -Six (“N BC”) filed the a bove-c aptioned ac tion ag ainst Defe ndants Shaun Donovan, a s Secre tary (“Sec reta ry”) of the Depa rtment of Housing and Ur ban De velopment (“ HUD” ), J im Hotard Proper ties, L L C (“Hotar d”), a

nd Roy S. L illey in 1 his capa city

as a H UD for eclosure commissioner (“L illey ”) f or dec laratory

and injunctive re lief relating to De fenda

nts’ actions in fore closing on a prope rty owned by

NB C called “ For

tner Manor.” In its four-count Complaint, NBC c ontends that Def endants fa iled to comply

with HUD regulations in refusingto delay or withdraw

fore closure, de nied NB C notice and a n opportunity to be hea rd re g ardingthe fore closure, a nd otherwise a cted a

rbitrar ily and ca priciously in deciding to forec lose. On September 27, 2010, the Court g rante d Def endant Hota

rd’s motion to dismi ss for lac k of per sonal jurisdiction and dismissed Hotard fr om this action. See [35] Orde r (Sept. 27, 2010). The Sec reta

ry and L illey

(collec tively , “F eder al Def endants” ) have filed a [21] Mot ion to

The Court shall use the te rm “Sec reta ry” and “ HUD” intercha

ng eably throug hout this 1 Memorandum Opinion.Dismiss t he Complaint, or, Alternatively for Summary

J udg ment in which they

seek to dismiss L illey as a de fenda

nt for lac k of per sonal jurisdiction and seek dismissal or summary judgme nt as to all of NB C’s claims. NB C has filed an opposition, in which it reque sts jurisdictional discovery , and F eder al Def endants have filed a

reply . The motion is therefor e ripe for adjudication. Although F eder al Def endants move only

in the alterna

tive for summary 1 6 judgme nt on the merits of NB C’s claims, the Court finds that, except for two na rrow c laims discussed below, the parties ha ve pre sented mate rials outside the plea dings f or the Court’s consideration. There fore , the Court shall treat F eder al Def endants’ motion primarily as one f or 1 7 summary judgme nt. For the re asons set for

th below, the Court shall (1) de ny NB C’s construed motion for jurisdictional discovery ; (2) g rant F eder al Def endants’ motion to dismiss L illey as a de fenda

nt for lac k of per sonal jurisdiction; (3) g rant the Sec reta ry ’s motion to dis miss with respect to NB C’s claims that HUD discr iminated ag ainst it by fore closing on For

tner Manor

at the re quest of non-minority

org anizations and by

singlingNB C out for fore closure; a nd (4) grant the Secre tary ’s alter

native motion for summary judgme nt with respec t to NBC’s re maining c laims.

NB C has also filed a [37] Mot ion for Or al Argument on the pendingmotion, which 1 6 Fe dera l Defe ndants do not oppose but believe is unne cessa ry . The Court finds that ora l argument would not be helpful in dec iding the pe nding motion, and ther efor e the Court shall DENYNB C’s motion for oral a

rgument. See L CvR 7(f) (“ A par ty may in a motion or opposition request an oral he aring , but its allowance sha ll be within the discretion of the c ourt.”). In support of their motion, Fe dera l Defe ndants have attache d a dec laration from 1 7 Def endant L illey

and a 118- pag e administrative r ecor d. NB C attache d three decla rations and numerous exhibits totaling ove r 300 pag es to its opposit ion, and Fe dera l Defe ndants attac hed additional decla

rations and e x hibits t otaling 96 pa g es to their re ply

.I. BACKG ROUND

A. Statutory and Regulatory Back ground Section 811 of the Cra

nston-Gonzalez National Affor dable HousingAct (“ Section 811”), 42 U.S.C. § 8013, authorizes the Secreta ry “to provide a ssistance to private , nonprofit org anizations to ex pand the supply of supportive housingfor pe rsons with disabiliti es.” Id. 1 8 § 8013(b)( 2). HUD provides this assistance in the f orm of ca pital advanc es and pr oject re ntal assistance contra cts. Id. § 8013(b)( 2)(A) -(B ). Capital adva nces a re non- interest-be aringand do not need to be r epaid “ so long a s the housing r emains ava ilable for ve ry -low-income persons[ ] 1 9 with disabilit ies” in ac corda nce w ith Section 811. Id. § 8013(d)( 1). Repay ment of a c apital advanc e does not e x tinguish a r ecipient’ s obligation to maintain the housing in ac corda nce w ith Section 811. 24 C.F.R. § 891.170(a) . Project re ntal assistance contra cts, in comparison, “oblig ate the Sec reta

ry to make monthly

pay ments to cover a

ny part of the costs attributed to units occupied . . . by

very low-income pe rsons with disabiliti es that is not met from projec t income . . . .” 42 U .S.C. § 8013(d)( 2). In exchang e for the ca pital advanc es and pr oject re ntal
As amende d, the term “ supportive housing for pe rsons with disabiliti es” me ans 1 8 dwellingunits that “are desig ned to meet the pe rmane nt housing ne eds of ve ry low-income persons with disabilities” and “ are located in housingthat make available supportive se rvice s that addre ss the individual health, mental hea lth, or other nee ds of such pe rsons.” 42 U.S.C. § 8013(k)( 3). “The term ‘pe rson with disabiliti es’ mea ns a household compose d of one or more persons who is 18 y ear s of ag e or olde r and le ss than 62 y ear s of ag e, and who has a disability .” Id. § 8013(k)( 2). A pe rson “ha s a disability ” if, pursua nt HUD re g ulations, the person is developmenta lly

disabled, as de fined in 42 U.S.C. § 15002(8), or is dete rmined to have “a phy sical, mental, or e motional impairment which (A) is ex pecte d to be of long -continued a nd indefinite duration, (B) substantially impedes his or her

ability to live independently , and (C) is of such a nature that such ability

could be improve d by

more suitable housingconditions.” Id. For purposes of Sec tion 811, “very low-income” is defined in the same manner as 42 1 9 U.S.C. § 1437a(b)(2) , which def ines “ve ry

low-income f

amilies” as “ families whose inc omes do not exceed 50 per

centum of the median fa

mily income for

the ar ea, a s determined by the Secre tary with adjustments for smaller a nd larg er f

amilies.” See id. § 8013(k)( 9). 3assistance contra cts, nonprofit org anizations must opera te the housingin compliance w ith Section 811 for at least forty y ear s. See id. § 8013(e) (1). HU D re g ulations require Section 811 housing to, inter alia , “be de cent, sa fe, sa nitary and in g ood repa ir,” includingthe housing site, building exterior, building sy stems, dwelling units, and c ommon area s. 24 C.F.R. § 5.703. In addition, “[t] o ensure its int ere st in the capital adva nce, H UD shall re quire a

note and mortg ag e, use agree ment, capital a dvance ag ree ment and re g ulatory ag ree ment from the Owner . . . .” Id. § 891.170(a)

. “[U]pon t he bre ach of

a cove nant or c ondition in t he mortg ag e agree ment” betwe en HUD and a Sec tion 811 recipient, the Sec reta ry may fore close on the Sec tion 811 housing in

acc ordanc e with the Multifamily Mortg ag e F orec losure Ac t of 1981 (“MMF A”) , 12 U.S.C. §§ 3701-17. See12 U.S.C. § 3705. The MMFA “ cre ate[s] a uniform F eder al fore closure r emedy for multifamily

mortg ag es.” Id. § 3701. Pursuant to the MMFA, the Sec reta ry is authorized to desig nate a

“for eclosure commissioner,” who “ shall be a pe rson who is responsible, f inancially sound and compe tent to conduct the f orec losure” a

nd, “if a natura l person, shall be a resident of the State in which the se curity proper ty is located.” Id. § 3704. I f a mortg ag e agree ment is breac hed, “the Secre tary may reque st the fore closure commissioner to commence fore closure of the mortg ag e.” Id. § 3707(a) . Howeve r, either “bef ore or afte r the de signation of the fore closure c ommissi oner but be fore service of the notice of def ault and for eclosure ,” the Sec reta ry must provide the mortg ag or “a n opportunity

informally to present r easons why

the mortg ag e should not be for eclose d.” 24 C.F.R. § 27.5. Af ter such a n opportunity , the fore closure c ommissi oner ma y commence fore closure thr oug h the servic e of notice of de fault and f

orec losure sale . 12 U.S.C. § 3707; see also id. § 3706 (deta iling

4information included in a notice of def ault and for eclosure sale). A t least twenty -one da y s prior to the fore closure sa le, the notice of defa ult and fore closure sa le must be sent by cer tified or reg istered mail to: (1) “ the cur rent sec urity

proper ty owner of re cord;” and (2) “the or igina l mortg ag or and a ll subsequent mortg ag ors of re cord or other pe rsons who appe ar of rec ord or in the mortg ag e agree ment to be liable for part or a ll of the mortg ag e debt.” Id. § 3708(1)( A)-( B)

. 2 0 These notice s are “mailed to the owne r or mortg ag or at the a ddress stated in the mor tga g e ag ree ment, or, if none, to the a ddress of the secur ity proper ty , or, at the discr etion of the fore closure c ommissi oner, to a ny other a ddress be lieved to be that of such owne r or mortg ag or.” Id. § 3708(1). The for eclosure commissioner ca n withdraw a

proper ty from for eclosure and ca

ncel the fore closure sa le in only

three situations. See id. § 3709(a) . First, if the Sec reta ry direc ts the fore closure c ommissi oner to c ance l the sale. Id. § 3709(a) (1). Sec ond, if the for eclosure “commissioner finds, upon a pplication of the mortg ag or at lea st three da y s prior to the date of sale, that the de fault or de faults upon which the f orec losure is based did not exist at the tim e of service of the notice of def ault and for eclosure sale.” Id. § 3709(a) (2). Or finally , if, inter alia , the mortg ag or tende rs the entire amount due in the eve nt of a moneta ry defa ult or, in the case of a non-monetar

y defa ult, the forec losure commissioner finds, upon a pplication of the mortg ag or, that the def

ault is cured. See id. § 3709(a) (3).

The MMF A also provides that within ten day s of the for eclosure sale, the notice of 2 0 defa ult and fore closure sa le must be sent to “all per sons holding liens of r ecor d upon the sec urity proper ty .” Id. § 3708(1)( C). 5B. Factual Back ground 1. NB C’s Purchase of F ortner Ma nor and A g ree ments with HUD NB C is a non-profit re ligious org anization that, inter alia , provides af forda ble housing to the disabled a

nd elder ly . Compl. ¶ 1. On September 1, 1999, NB C purchase d the prope rty

curr ently located a t 2217 L apey

rouse Stree t, New Or leans, L ouisiana, for approximately $100,000. Id. ¶ 6. At this site, NBC planne d to build Fortner Ma nor Apa rtments (“F ortner Manor” ) in order

to provide af

forda ble re ntal housing f

or the e lderly

and disabled. Id. ¶ 7. To financ e the c onstruction of F ortner Ma nor, NB C, throug h its president Rever end Z ebade e Br idge s and sec reta

ry Revere nd Wil lie Gable, e ntere d into three a g ree ments with HUD on September 29, 1999. See id. ¶¶ 9- 10; Def.’ s Stm t. ¶¶ 16, 20, 24. Those agree ments include: (1) 2 1 a mortg ag e agree ment and note ( “Mortg ag e Agree ment”), Compl., Ex . A; Administrative Record (“A R”) at 7- 12; (2) a use ag ree ment (“U se Ag ree ment”), Compl., Ex . B; AR at 20- 23; and (3) a The Court strictly

adher es to the text of L ocal Civil Rule 7(h) when r esolving motions 2 1 for summary

judgme nt. See B urke v . Gould , 286 F.3d 513, 519 ( D.C. Cir. 2002) (findingdistrict courts must invoke the loca l rule bef ore a pplying it to the ca se). The Court has advised the parties that it strictly

adher es to Rule 7(h) a

nd has stated that it “a ssumes fac ts identified by the moving pa

rty in its st atement of

materia l fac ts are a dmitted, unless such a fa ct is controver ted in the statement of g enuine issues filed in opposition to the motion.” [ 25] Order (A pr. 16, 2010) at 3-4. The Court ha s also advised the pa rties that “[a]t all point s, [t hey ] m ust furnish prec ise citations to the portions of the re cord on which they rely .” Id. at 4; see also Burke , 286 F.3d at 518 (“[A] dist rict cour

t judge should not be obligated to sift throug h hundreds of pag es of depositions, affidavits, and inter rog atories in orde r to make his own a naly sis and deter

mination of what may , or may

not, be a g enuine issue of materia l disputed fact.” (quoting Twist v. Mee se , 854 F.2d 1421, 1425 ( D.C. Cir. 1988)) (inter nal quotation marks omitted). Ther efor e, in most instances the Court sha ll cite only to Fede ral De fenda

nts’ Statement of Mater ial Fa cts Not in Genuine D ispute (“De fs.’ Stmt.”), unless a state ment is contradicte d by NB C, in which case the Court may

cite NB C’s Response to Def endants’ Stateme nt of Mater ial Fa cts Not in Genuine Dispute and Statement of D isputed Materia l Fac ts (“Response” or “Resp.” ). The Court sha ll also cite dire ctly

to evidence in the rec ord, whe re a ppropriate

. The Court notes that alongwith its R esponse, NB C filed 114 pag es of doc uments to which NB C does not cite and whic h appea r to be unre lated to this case a nd possibly

filed by mistake. See Docke t No. [28-4] at 43-156. Ac cording ly , the Court shall not refe renc e these materia ls in resolving the pendingmotions. 6regulatory ag ree ment (“Regulatory

Ag ree ment”), A R at 13-19. Subsequently , on September 10, 2001, NB C’s new pre sident, Revere nd Charles W. Noble, executed N BC’s pr oject re ntal assistance contra ct (“ PRAC”) with HUD. De fs.’ Stmt. ¶¶ 31, 36. The re levant portions of the Mortg ag e Agree ment, Regulatory Ag ree ment, and PRAC––the ag ree ments at issue in the pendingmotions––are set for th below.

a. The Mortg ag e Agree ment The Mortg ag e Agree ment provides that in exchang e for HUD’ s capital a dvance of $1,535,700.00, NB C gr ants the Secr etar y a sec urity

interest in For

tner Manor . Def

s.’ Stmt. ¶ 16; AR at 7-12. The Ag ree ment also incorpor ates the Regulatory Ag ree ment’s provisions and provides that upon def

ault of the Reg

ulatory Ag ree ment, the Secr etar

y “may decla re the whole indebtedness se cure d to be due a nd payable.” Def

s.’ Stmt. ¶ 17; AR at 7. I n the Ag ree ment, NB C promises to keep F ortner Ma nor “in g ood repa ir, and not to do, or per mit to be done, upon said premises, a

ny thing that may

impair the value there of ” D efs.’ Stmt . ¶ 18; AR at 8. The Ag ree ment further

provides that “in c ase of

a bre ach of

any [] covena

nt,” the entire principal––$1,535,700.00–– shall bec ome due at the Secre tary ’s elec tion, and the Secr etar y “shall have the rig ht immediately to forec lose this Mortga g e.” D efs.’ Stmt . ¶ 19; AR at 9. b. The Regulatory

Ag ree ment The Regulatory

Ag ree ment provides that “[t]he Note and Mortg ag e bea r no intere st and repa y ment is not required so longas the housingrema ins available f or . . . ver y low-income persons with disabilities . . . .” Def s.’ Stmt. ¶ 25; AR at 13. The Ag ree ment provides that NB C “shall maintain the mortg ag ed pre mises, acc ommodations and g rounds and e quipment

7appurte nant there to, in good a nd substantial repa ir and c ondition . . . .” Defs.’ Stmt . ¶ 26; AR at 14. Paragraph 15 state s that: Upon a violation of any of the above provisions of this Ag ree ment by Mortg ag or, HUD may g ive written notice, there of, to Mortg ag or, by reg istered or cer tified mail, addre ssed to t h e ad dress stated in this Ag ree ment, or such other addre ss as may subsequently , upon written notice there of to H UD, be desig nated by the Mortg ag or as its leg al business addre ss. Def s.’ Stmt. ¶ 28; AR at 16. I n addition, “[i] f such violation is not corre cted to the satisfaction of HUD within 30 day s after the date suc h notice is mailed or within such fur ther time as HU D deter mines is necessa

ry to corre ct the violation, without further notice HUD may decla re a Def ault under this Ag ree ment . . . .” De fs.’ Stmt. ¶ 28; AR at 16. Finally , the Regulatory Ag ree ment incorporates by ref ere nce the PRAC and provides that a violation of the PRAC “may be construe d to constitute a defa ult hereunde r in the sole discre tion of HUD.” Def s.’ Stmt. ¶¶ 29- 30; AR at 16.

c. The PRAC The purpose of the PRAC “is to provide projec t rental a ssistance pa y ments on behalf of Eligible F amilies leasingdece nt, safe a nd sanitary

units from the Owne r.” D efs.’ Stmt . ¶ 32; AR at 24. In para g raph 2.5( a), N BC agree s “to maintain and ope rate the Contract Units and r elated fac iliti es to provide de cent, sa fe, a nd sanitary

housing . . . .” Def

s.’ Stmt. ¶ 38; AR at 29. “I f HUD notifies the O wner

that it has failed to maintain a dw elling unit in dec ent, safe , and sanitar y condition and the Owne r fa ils to t ake c orre ctive ac tion within t he time pre scribed in the notice , HUD may

exercise a

ny of its rig hts or reme dies under [the PRAC] . . . .” De fs.’ Stmt. ¶ 42; AR at 29. Para g raph 2.13 pr ovides that: I f t h e Project is located in an are a that has been identified by the Direc tor of th e Fe dera l Emerg ency Manag ement Ag ency [“FEMA” ] as an are a having specia l flood 8hazards and if the sale of flood insurance has been made available under the National

Flood Insuran ce Ac t o f 1968, the Owner ag ree s that it will obtain cover ag e of the Project, during its anticipated economic or useful life, by flood insurance in an amount at least equal to its development or projec t c osts ( less estimated land c osts) or to the maxi mum limit o f co v erag e made available with respe ct to the particula r ty pe of proper ty under the National F lood I nsuranc e Ac t of 1986, whiche ver is less. Def s.’ Stmt. ¶ 40; AR at 32. A default of the PRAC occur s when NB C: (1) violates or fa ils to comply with the PRAC, “including fa ilure to corr ect a ny defic iencies ide ntified by HUD in

connec tion with any

annual or other inspec tion;” (2) “a ssert[s] or demonstrate[s] an intention not to perfor m some or all of its obligations under” the PRAC; or (3) violate s or fa ils to comply with Section 811, the Mortg ag e Agree ment, or the Regulatory Ag ree ment. Def

s.’ Stmt. ¶ 43; AR at 33. Once HUD de termines that a de fault has oc curr ed, the PRAC provides that NB C shall be notified of the nature of the defa ult; the actions and re medies re quired to cur e def ault; and the time in which it has to cure de fault. De fs.’ Stmt. ¶ 44; AR at 33. 2 2

2. Hurric ane K atrina, F ortner Ma nor’s Da mag es, and N BC’s Repa ir and FundingPlans In August 2005, Hurrica

ne Katrina struck N ew Or leans a nd cause d extensive damag e to For tner Manor , rende ringthe complex uninhabitable. Compl. ¶¶ 13, 19. All of For tner Manor ’s residents we re e vacuated duringthe hurric ane a nd none we re injure d. Id. ¶ 18. Since Hur rica ne

The Use Ag ree ment, althoug h not at issue in this pending motion, provides that “in 2 2 exchang e for

HUD’ s ag ree ment to provide ca pital advanc e fina

ncingand proje ct re ntal assistance pay ments, [NBC] has agree d to continue to operate [Fortner Manor] only

as re ntal housing f

or very -low income e lderly

or disabled pe rsons for not less than 40 year s from Jul y 1, 2000, unless otherwise pr ovided by

HUD.” Def

s.’ Stmt. ¶ 22; AR at 20. “I n the eve nt of a bre ach or threatened br eac h of any

of the provisions of this [Use] Ag ree ment, any elig ible tenant or application for

occupa ncy , or the Sec reta

ry or his or her

succe ssors or dele g ates, may instit ute proper leg al ac tion to enforce perf ormanc e of suc h provisions, to enjoin any acts in violation of such provisions, to rec over whateve r dama g es ca n be prove n, and/or to obtain whatever other relief may be appr opriate.” Def

s.’ Stmt. ¶ 23; AR at 21.

9 9Katrina , and at lea st until the par ties’ brief ing on the pendingmotions, Fortner Ma nor has

rema ined vac ant, uninhabitable, a nd inopera

ble. Def s.’ Stmt. ¶ 47. Although the parties disagree as to what oc curr ed with re spect to F ortner Ma nor in the immediate af

termath of H urrica

ne Katrina, they

ag ree that on April 28, 2006, NB C and HUD repr esentatives met at HUD’ s Forth Worth, Texas office . Def s.’ Stmt. ¶ 51. The parties a lso ag ree that on August 1, 2006, HUD authorized the pa y ment of $15,000 fr om Fortne r Manor ’s

rese rve f und to pay

for, inter alia , packingand storingof all salvag eable items from For tner 2 3 Manor, r emoval of a ll refr ige rators, a nd g utting and c leaningof the e ntire first floor a nd four additional units on the second and third f loors. Def

s.’ Stmt. ¶ 52; AR at 35-38 (L etter f rom Ann C. Kiz zier, Dir., L a. Multifamily Prog ram Cntr., to Kodozo Agbenyah, Ta liafar o, Inc. (Aug . 1, 2006)). On August 31, 2006, HUD re prese ntatives and Reve rend G able met at HUD’s Ne w Orlea ns office . Def

s.’ Stmt. ¶ 55. During this mee ting, the pa rties discussed the f

act that F ortner Manor wa s not covere d by flood insuranc e, and that NBC wa s seekingfinanc ing to r epair For tner Manor be cause it curre ntly lacke d the funds to do so. Id. 2 4 After Hurric ane K atrina, H UD re quested that owne rs and mana g ers of proper ties that

wer e af fec ted by the hurric ane pr ovide HUD w ith plans for how their pr operties c ould be re stored

A re serve fund “is g ener ally used to help def

ray the costs of replacinga proje ct’s ca pital 2 3 items. Howeve r, followingHurric anes K atrina a nd Rita, HUD has pe rmitted the use of r eser ves to make nec essar

y repa irs pursuant to Depa rtment Policies and Handbooks.” AR at 47 (L etter from Cherly

n Wheeler, A sset Mg mt. Bra nch Chief, L a. Mutlifamily Prog ram Ctr., HUD , to Keith Key , President & CEO, KB K (Apr . 26, 2007)). NB C claims that it informed HUD dur ing the August 31, 2006 meetingthat it did not 2 4 have the funds nec essar

y to repa ir For

tner Manor and

Raphae l Manor, which is a nother of N BC’s proper ties damag ed by

Hurric ane K atrina. Pl.’s Resp. ¶ 55. 10and ther efor e re g ain compliance with applicable r egulations and ag ree ments. See Def s.’ Reply , Dec l. of Anita Hamm (“Hamm Decl.”) ¶ 8. On Octobe r 16, 2006, HUD ’s New Orlea ns office 2 5

rec eived a

letter fr om KBK

Enterpr ises (“K

BK ”), a develope r hired by

NB C to rebuild Fortne r Manor, r equestingthat HUD r emove F ortner Ma nor’s PRAC and allow NB C to refinanc e For tner Manor

in order to f

acilitate its restoration. Defs.’ Stmt. ¶ 56; AR at 40-41 (L etter f rom Keith Key , President & CEO, KB K, to Art Wells, Production Bra nch Chief, Ne w Orle ans F ield Offic e, HUD (Sept. 27, 2006)). H UD re sponded to KB K’s re quest on Novembe r 1, 2006, informingKB K that its New Or leans fie ld office was not authorized to re move the PRAC and that, pursuant to 24 C.F.R. § 891.170, re pay ment of NB C’s capital a dvance would not ext inguish NB C’s obligation to maintain Fortner Ma nor as Sec tion 811 housing. De fs.’ Stmt. ¶ 57; AR at 42 (L etter f

rom Cherly

n Wheeler, A sset Mg mt. Bra nch Chief, Ne w Orle ans F ield Offic e, HUD , to Keith Key , President & CEO, KB K (Nov. 1, 2006) ). KB K once ag ain contac ted HUD’ s New O rlea ns office on Fe bruar

y 16, 2007, this ti me with NBC’s “ officia l proposal” to re develop F ortner Ma nor. AR at 44 (L etter f

rom Keith Ke y , President & CEO, KB K, to Anita Hamm, Projec t Manag er, N ew Or leans F ield Offic e, HUD (F eb. 26, 2007)) . In this proposal, KBK informed HU D that For

tner Manor ’s estimated c ost of repa ir would be $500,000 a nd detailed NB C’s eff

orts to obtain funding to meet this cost. Id. KB K also re quested HU D’s “a pproval to use the r emainder of the re serve fund to complete specific prede velopment ef forts,” a nd reque sted a twe lve-month forbe ara nce on F ortner Ma

nor so Anita Hamm, proje ct manag er in HU D’s L ouisiana Multifamily Prog ram Center , 2 5 decla res that NB C was informed of this requireme nt around May 3, 2006. SeeHamm Dec l. ¶ 8. The letter supposedly

informingNB C of this requireme nt is not part of the administrative re cord and “ha s been unintentionally misplaced a

nd [HUD] ha[ s] not been a ble to locate it.” Id. In light of the for eg oing, the Court does not rely on this fact but mere ly

states it here to expl ain why NB C and its aff iliates beg an submitting proposa ls to HUD. 1 1it could have time to make F ortner Ma nor oper ational. Id. at 44-45; De fs.’ Stmt. ¶ 61. HUD responde d on April 26, 2007, noting its frustration that Fortner Manor’ s restoration had not prog resse d: “B eca

use a substantial amount of time has elapse d, our expectation wa s that by April 1st of this y ear , sufficie nt prog ress would have bee n made towa rd the re development of

these proper ties to warr ant a mee ting a nd discussion with HUD.” De fs.’ Stmt. ¶ 61; AR at 46 (L etter from Cherly

n Wheeler, A sset Mg mt. Bra nch Chief, L a. Mutlifamily Prog ram Ctr., HUD , to Keith Key , President & CEO, KB K (Apr . 26, 2007)). HU D then informe d KB K that it must provide the f

ollowing doc uments and informa tion to HUD by

May 15, 2007: (1) cost e stimates from insuranc e compa

nies or g ener al contra ctors deta iling F ortner Ma nor’s re pair c osts; (2)

arc hitectura l and eng ineer ing r eports; (3) doc umentation supporting N BC’s a pplications for HOME funds, FEMA f

unds, and a loa

n from the U.S. Small Business Administration (“SB A”) ; 2 6 (4) doc umentation reg ardingother dona ted funds and othe r ef

forts to obtain funds; and (5) a separ ate r equest for

use of r eser

ve funds de tailing the a

mount in the account a

nd a desc ription of the work to be done. De fs. Stmt. ¶ 61; AR at 46-47. HUD then de nied KB K’s re quests to acc ess the balanc e of F ortner Ma nor’s re serve fund bec ause K BK ’s re quest did not satisfy the cr iterion for the use of such f

unds. AR at 47. Finally , HUD de nied KB K’s re quest for a twelve- month forbe ara nce but grante d NB C a three -month forbe ara nce––the maxi mum forbea ranc e HUD could g rant at one time. See id.

HOME funds a

re a llocated by

HUD “ amongelig ible State and loca l gove rnments to 2 6 streng then public-private par tnerships and to expand the supply of dec ent, safe , sanitary , and aff ordable housing, w ith primary attention to rental housing , for ve ry low-income a

nd low-income f

amilies.” 24 C.F.R. § 92.1. “State a nd local g overnme nts . . . may use HOME funds to car

ry out multi -y ear

housing strateg ies throug h acquisition, reha bilitation, and new construction of housing , and tena nt-based r ental assistanc e.” Id.

12On May 21, 2007, HUD of

ficials met with Rever end F rank Centr allo, an NB C repr esentative, in order f

or Rever end Centra llo “to provide [HUD] an update of the status of a

reor g anization plan to revitalize” NB C’s Fortne r and Rapha el Manors. D efs.’ Stmt . ¶ 63; Pl.’s Opp’n, De cl. of Reve rend Centr allo (“Centr allo Dec l.”) ¶ 5. D uringthe May 21, 2007 meeting , Revere nd Centrallo provided H UD with a c opy of KB K’s May

21, 2007 “HUD Redeve lopment Status Report” (her einaf

ter, “ KB K Plan”). Centr allo Dec l. ¶ 5; id. , Ex . A (KB K Plan). The 2 7 KB K Plan is KBK’ s response to HU D’s “r equest for supporting doc umentation and status update” reg ardingFor

tner a nd Raphae l Manors. Centra llo Decl., Ex. A (KB K Plan) at 5. In reg ard to F ortner Ma

nor, the KB K Plan notes that “the limitations placed on the F ortner pr operty due to the PRAC requireme nts have sure ly left us with no rea l options for rea listi c re habilitation of this property

throug h financ ing options.” Id. Nonethele ss, the KB K Plan “deta ils [ ] t he fundingeff

orts pursued thus fa

r for For tner Manor

. . . and our f

inal rec ommendation to solve th[ e] dilemma” of re developing For tner Manor

. Id. Additionally , KB K “hope [d] that [HUD’s] revie w of the suppor

ting doc umentation will provide proof of the exhausted eff

orts taken to

secur e any

and all possible funding ” and tha t the KB K Plan “will provide [HUD] information

nece ssary to consider [KBK ’s] final rec ommendation to preser ve these units.” Id. at 6. This supporting doc umentation includes an a ccounting of F ortner Ma

nor’s sourc es of income , including its re serve fund and pe nding F EMA funds. Id. at 19 (F ortner Ma nor Source s and Use Table ( as of Ma

y 21, 2007)). In addition, the KB K Plan lists s ix differ ent construc tion cost estimates for F ortner Ma

nor, id. at 31, and pur

ports to include the docume ntation submit ted by
Acc ordingto Ms. Hamm, the KB K Plan was omitted from the a dminist rative r ecor d 2 7 due to “a n unintentional oversig ht.” Def s.’s Reply , Hamm Dec l. ¶ 18. Given that NB C provided the KB K Plan alongwith its opposi tion, Centrallo Decl., Ex. A, the Court perc eives no pre judice in its consideration of the KB K Plan in resolvingthe pendingmotions. 1 3various contr actor s to support these estimates, see id. at 31-51. F inally , the KB K Plan provides

documentation re g ardingeff orts to procure a SBAloan, id. at 62-68, F EMA funds, id. at 70-80, and HOME f

unds, id. at 82-83, for

For tner Manor . Howeve r, “due to the absenc e of a vailable funds,” KB K was una

ble to provide HU D with the re quested a rchitec tural and e ng ineer ing repor ts for F ortner Ma

nor. Id. at 6. 3. Violation Notices Duringthe May

21, 2007 meeting , Revere nd Centrallo also promised HU D that NB C would secur e the buildingand ar ea sur roundingFor

tner Manor

within the near

future. D efs.’ Stmt . ¶ 63. Towar ds that end, on June 6, 2007, HUD re lease d, at NB C’s reque st, an additional $6,830.00 from F ortner Ma nor’s re serve fund “f

or boar ding of

[t he] buildi ngand a 12- month lawn ser vice a ccount.” Def

s.’ Stmt. ¶ 65; AR at 48-49 (L etter f rom Cherly

n Wheeler, A sset Mg mt. Bra

nch Chief, L a. Mutlifamily Prog ram Ctr., HUD , to Rosalind S wing er, Ta liafar o, Inc. (June 6, 2007)). When HUD inspec ted For tner Manor

on J uly 12, 2007, howeve r, it discovere d that the first and se cond floors of For tner Manor

wer e seve rely

damag ed, the building ’s elec trical and mec hanica l sy stems were damag ed, and the re w as debr is and hig h g rass a round the prope rty
. Def s. Stm t. ¶ 66; AR at 51-52. Consequently , on August 7, 2007, HUD sent NB C a “Notice of Regulatory Ag ree ment Violation” (he reina fter, “ August 2007 Violation Notice”), inf orming NB C that it was in violation of its obligations––under

para g raph 8 of

the Regulatory

Ag ree ment and 24 C.F.R. § 5.703––to maintain For

tner Manor

in good r epair

and condition. Def

s.’ Stmt. ¶ 67; AR at 51-54 (August 2007 Violation Notice). H UD then infor med NB C that within t hirty day s it must : (1) re move debris, cut the grass, a

nd secur e the buildingat For tner Manor ; (2) conduc t a survey identify ing

14the phy sical def iciencie s in the project; (3) submit an acc eptable pla n to corre ct For

tner Manor ’s phy sical def

iciencie s; and (4) pr ovide the complete d survey , alongwith an executed c ertification that the above work ha d been c ompleted, to HUD’ s New O rlea ns office . AR at 51. HUD

war ned NB C that it would reinspect F ortner Ma nor to confir

m compliance w ith the Reg ulatory Ag ree ment and that: I f the owner fails to take the nece s s ar y co rr ec tive action, then the Secre tary may , without further notice, decla re the owner in defa

ult of the Regulatory Ag ree ment and seek any and all available reme dies, including but not limit ed to, acc eler ation of the outstanding pr incipal indebtedne ss, forec losure or a ny other a ppropriate reme dies. Id. at 52. NB C failed to take the reque sted corr ective a ctions within the tim e re quested. De fs.’ Stmt . ¶ 68. Consequently , near ly

three months later, on Novembe r 3, 2007, HUD sent Rever end Centrallo another

“Notice of Regulatory

Agree ment Violation” (he reina fter, “November 2007 Violation Notice”) reg ardingFor tner Manor . Def

s.’ Stmt. ¶ 68; AR at 55-56 (November 2007 Violation Notice). I

n the notice, HU D informed N BC that it would no longe r hold For tner Manor’ s PRAC in forbea ranc e. AR at 55. Additionally , HUD infor med NB C that, despite havingtwo y ear s to return F ortner Ma nor to “g ood repa ir and c ondition,” Fortne r Manor “has not become habitable” and NB C has not “provided a n acc eptable immediate plan to return the proper ty to a habitable c ondition.” Defs.’ Stmt . ¶ 69; AR at 55. As a r esult, HUD orde red N BC to, within the nex t thirty

day s, submit “an immediate plan to bring[Fortner Ma nor] within good repa ir and c ondition withi n 90 day s of submittal.” Defs.’ Stmt . ¶ 69; AR at 55. HUD onc e ag ain cited 24 C.F.R. § 5.703 for the appr opriate standa

rd for g ood repa ir and c ondition Fortner Ma nor must meet. Defs.’ Stmt . ¶ 69; AR at 55. HUD f urther a dvised NB C, just as in t he August 2007 Violation Notice, that: 1 5I f the owner fails t o t ak e t h e nece ssary corr ective action, then the Secre tary may ,

without further notice, decla re the owner in defa

ult of the Regulatory Ag ree ment and seek any and all available reme dies, including but not limit ed to, acc eler ation of the outstanding pr incipal indebtedne ss, forec losure or a ny other a ppropriate reme dies. Def s.’ Stmt. ¶ 69; AR at 56.

4. Def

ault Notices On Dec ember

13, 2007, HUD onc e ag ain inspecte d For tner Manor

and conc luded that the proper ty “re main[ed] uninhabitable due to substanda rd conditions.” De fs.’ Stmt. ¶ 71; AR at 57. Acc ording ly , on Marc h 5, 2008, HUD se nt Revere nd Centrallo a “Notice of Def ault of the Project Rental Assistance Contract” ( here inafter , “Mar ch 2008 De fault Notice ”). D efs.’ Stmt

. ¶ 72; AR at 57. The Ma

rch 2008 D efa

ult Notice stated that, de spite the August 2007 and November

2007 Violation Notices, NB C had “fa il[ ed] to maintain Fortner Manor in a de cent, safe and sanitar

y condition in accor dance with 24 C.F.R. § 5.703.” Def s.’ Stmt. ¶ 72; AR at 57. For these re asons, the notice inf ormed NB C that the Secre tary had found it “to be in defa ult of the Regulatory

Ag ree ment and the PRAC” and that “ HUD sha ll pursue any and all re medies available to it without further notice.” A R at 58. 2 8 On Dec ember

18, 2008, HUD a g ain informed N BC by letter (he reina fter, “ Dec ember 2008 Def ault Notice” ) that it was in def ault of the Regulatory

Agree ment and that it was now in a “monetar y defa ult” under the Mortg ag e Agree ment beca use it “fa iled to make monthly pay ments After the Marc h 2008 Notice, on Apr il 11, 2008, NBC’s cha irman, Rever end Noble, 2 8 informed HU D that “NB C encounter ed administrative diff iculties resulting from inappr opriate repr esentations by

firms claimed [sic] to have been r epre senting NB C.” Def s.’ Stmt. ¶ 73; AR at 59-60 (L etter f

rom Rever end Noble, Cha irman, NB C, to Michael B ackma n, Dir., Ne w Orle ans Mulitfamily

Hub (Apr . 11, 2008)). Conseque ntly , NB C “reorg anized itself,” re tained Consoc Housing Consultants (“Consoc”) a s its “sole housing c onsultant and owner repr esentative,” and instructed HUD that “no other owner ’s re prese ntatives or consultant (the reta ined manag ement ag ent excepted) is authorized to repre sent projec ts sponsored/controlled by NB C in y our jurisdiction.” Def

s.’ Stmt. ¶ 73; AR at 59. 16and fa iled to maintain and oper ate the pr operty in a dec ent, safe and sanitar y manner .” De fs.’ Stmt . ¶ 74; AR at 61-62 (D ece mber 2008 De fault Notice ). On a ccount of these de faults and NB C’s “fa ilure to submit an acc eptable r einstatement plan, H UD dec lare [d] the entire unpaid principal ba lance due and pa y able.” Def

s.’ Stmt. ¶ 74; AR at 61. The Dec ember 2008 Def

ault Notice a lso provided: Be fore instit uting fore closure proce eding s, howeve r, HUD will provide y ou with an opportunity to show rea sons why fore closure should not take place. I f y ou believe that no defa

ult exis ts, or if y ou know of some other leg al rea son that HUD should not fore close, these rea sons should be submitt ed, in writing , within twenty -one (21) day s of the re ceipt of this letter. Def s.’ Stmt. ¶ 74; AR at 61. Additi onally , HUD infor med NB C that a meetingcould be schedule d to hear

its appeal provide d that NB C called or f axed a re quest for a

meetingwithin seven da y s of re ceipt of the Notice. De fs.’ Stmt. ¶ 74; AR at 62. On J anuar y 12, 2009, Revere nd Noble re sponded to the De cembe r 2008 De fault Notice , arguing that HUD’s “ policies and proce dures r eg ardingfore closure a ctions” did not anticipate a natura l disaster the magnitude of Hurric ane K atrina, a

nd acc ording ly

“spec ial measure s are war rante d” with re spect to F ortner Manor. Pl.’s Opp’n, D ecl. of Revere nd Wil lie Gable ( “Ga ble Dec l.”), Ex. H at 1 (L etter f rom Revere nd Noble, Chairman, N BC, to Shaun Donovan, Sec ’y , HUD ( J an. 12, 2009))

. The letter 2 9 then detailed N BC’s e ffor ts to restore F ortner Ma

nor, includingmeetingwith HUD and attempting to pr ocure funding

. See id. at 1-3. Reve rend N oble’s January 12, 2009 letter a lso

On J anuar

y 5, 2009, Consoc appar ently sent a letter

to HUD indicating

that it would 2 9 call later that day to arra ng e a me etingin response to the D ece mber 2008 Notice

. SeeGable Dec l., Ex . I(L etter f

rom Bob N ance , Consoc, to Ruth P ompa, Dir., F ort Worth Mult ifamily Property Disposition C tr., HUD ( J an. 5, 2009)) . There is no other indication in the re cord that such a c all was made or that a me etingresulted. 1 7indicated, howe ver, that NBC still had not obtained the fundingnece ssary to repa ir For

tner Manor. See id. On April 29, 2009, Dr. Robe rt Turne r, Sr., pre sident of Fir st District Missi onary Ba ptist Association (“ FDMB A”) , informed HU D that: (1) he was in re ceipt of the Dec ember 2008 Def ault Notice; (2) the FD MBA “ is the local sponsor of” For tner Manor ; and (3) H UD’s previous cor

responde nces r eg arding

For tner Manor

“did not include notice to the loc al sponsor.” Def s.’ Stmt. ¶ 77; AR at 64-65 (L etter f rom Dr. Rober

t Turner , Sr., President, FD MBA, to Ruth Pompa, Dir., For

t Worth Mul tifamily

Property Disposition C tr., HUD ( Apr. 29, 2009)) . Dr. Turner then re quested a

written update of the c urre nt status of Fortne r Manor ’s fore closure a nd advised HU D that FE MA was still workingto provide NB C funding to r epair For tner Manor

. AR at 64. By

a letter dated Ma y 5, 2009, HUD r esponded to Dr . Turner , advising him that “[n] otice of pe nding f

orec losure wa s g iven to the owner of re cord” and that “[s]i nce w e have no leg al re asons to stop forec losure,” H UD wa s proce edingwith the fore closure of For tner Manor

. Def s.’ Stmt. ¶ 78; AR at 66-67.

5. Appointment of L illey as F orec losure Commissi oner a nd Notices of For eclosure Sales J ack T . Stark, Deputy

Reg ional Counsel of HUD’ s Reg ional Counsel for the Southwest, appointed Roy

S. L illey as F ortner Ma

nor’s for eclosure commissioner on May 20, 2009. Def

s.’ Stmt . ¶ 79. On May

29, 2009, L illey

issued a “N otice of D efa ult and For eclosure Sale” of For tner Manor

(her einaf ter, “ May 2009 Notice of

For eclosure Sale”) , which sche duled For tner Manor’ s fore closure sa le for July 8, 2009. Def

s.’ Stmt. ¶ 80; AR at 79-80 (May 2009 Notice of For eclosure Sale). On Ma y 31, 2009, L illey

notified NB C of the J uly 8, 2009 fore closure sa le. Def s.’ Stmt. ¶ 82. 18Whil e L illey completed the a fore mentioned tasks, the Secr etar y rec eived a

letter fr om U.S. Senator Mar

y L . L andrie u on NB C’s behalf, in whic h the Senator r equeste d that HUD “conside r whe ther a

n extension [ of F ortner Ma nor’s for eclosure ] i s warr anted.” Def s.’ Stmt. ¶ 83; AR at 68 (L etter f

rom Mary L . L andrie u, U.S. Senator, to Shaun Donovan, Sec ’y , HUD ( May 22, 2009)). On July

10, 2009, HUD r esponded to Senator L andrie u’s letter, r ecounting HUD’ s rationale for f

orec losing on F ortner Ma nor and indicating that, in lig ht of Senator L andrie u’s letter, HU D would postpone F ortner Ma nor’s for eclosure for a

n additional twenty -one da y s. Def s.’ Stmt. ¶ 87; AR at 69-70 (L etter f rom Peter Kova

r, Assistant Sec’y , HUD, to Mar y L

. L andrie u, U.S. Senator (Jul. 10, 2009)). Consequently , on J uly

9, 2009, L illey

issued another

“Notice of De fault and F orec losure Sale” f or F ortner Ma

nor (he reina fter, “ J uly

2009 Notice of

For eclosure ”) w ith a resc heduled fore closure da

te of July 28, 2009. Def

s.’ Stmt. ¶ 84; AR at 87-89 (J uly 2009 Notice of For eclosure ). The sa

me day , L illey

notified NB C of the re schedule d fore closure sa le. Def s.’ Stmt . ¶ 86. On July

27, 2009, NB C’s counsel, Mar k Weinstein, “attempted to contac t [ ] L illey

. . . in an ef fort to tempora

rily postpone or per

manently halt fore closure pr ocee dings w ith respec t to [Fortner Ma

nor].” Pl.’s Opp’n, Dec l. of Mark Weinstein (“ Weinstein Decl.”) ¶ 5. Afte r not

rec eiving“a pr ompt response” from L illey on either July

27 or 28, 2009, id. ¶ 6, NB C filed a motion for a tempora

ry restra ining or der in a

L ouisiana state c ourt, Def s.’ Stmt. ¶ 89; W einstein Dec l. ¶ 6; Defs.’ Mot., Decl. of Roy S. L illey (“F irst L illey

Dec l.”) ¶ 22. A

hear ing on the motion was held on the morningof the for eclosure sale––July 28, 2009. See Def

s.’ Stmt. ¶ 89; Weinstein Decl. ¶ 7. L illey attended the hear ing a fter be ing c ontacted by NB C’s counsel, and

1 9ultimately the state c ourt judg e denie d NB C’s motion on j urisdictional g rounds. See Def s.’ Stmt. ¶ 89; Weinstein Decl. ¶ 7. After the hea ring , L illey

continued with For

tner Manor ’s fore closure sa le that was schedule d for that a fternoon. F irst L illey Dec l. ¶ 25. At the sale, Jim Hotard Properties, L L C was the hig hest bidder with a bid of $201,000. Def

s.’ Stmt. ¶ 95; First L illey Dec l. ¶ 26. Subsequently , L apey

rouse Investments (“L apey rouse” ) obtained H otard’s inter est in Fortne r Manor a nd a closingbetwee n L apey rouse a nd HUD wa s scheduled f or September

17, 2009. Def s.’ Stmt. ¶ 93; First L illey Dec l. ¶ 27. The da

y befor e the c losing, L illey rec eived a

letter from NB C’s counsel, Mr. Weinstein, advisingL illey that if HUD pe rfe cted the f orec losure and transfe rre d For

tner Manor , NB C would bring suit see king a decla ration that the tra

nsfer was illega l. Defs.’ Stmt . ¶¶ 94- 95. At the closingthe followingday , L illey advised L apey

rouse a nd the title insurance underwriter of NB C’s intention to sue if Fortner Manor wa s transfe rre d. Def s.’ Stmt. ¶ 96; First L illey Dec l. ¶ 29. Consequently , the under writer r efuse d to issue a title insurance policy

and, without title insurance, L apey rouse wa s unable to obtain the loan ne cessa ry to effe ctuate the closing . Def s.’ Stmt. ¶¶ 96-98; First L illey Dec l. ¶¶ 29-30. Wit h L apey

rouse be ing una

ble to purcha se F ortner Ma nor, HUD schedule d another fore closure sa le for N ovember 30, 2009, and L illey

issued another

“Notice of De fault and For eclosure Sale” of

For tner Manor

(“O ctober

2009 Notice of

For eclosure ”). D efs.’ Stmt . ¶ 99; First L illey

Dec l. ¶ 31; AR at 101-102 (Oc tober 2009 Notice of F orec losure). O n October 26, 2009, L illey

notified NB C of For

tner Manor ’s Novembe r 30, 2009 for eclosure sale. De fs.’ Stmt.

20¶ 101. At this final forec losure sale , no bids were enter ed for For tner Manor . Def

s.’ Stmt. ¶ 105. 3 0 As a fina l matter, the Court notes that Reve rend G able de clar es that “[a]t thi s point, FEMA ha s awa

rded $571, 479 to F ortner Ma nor. In addition, NBC has the option of conver ting

an aw ard f

rom another

projec t to Fortner

Manor in the amount of $578,826 for a total of $1,150, 305 in available pr ocee ds to make re pairs at F ortner Ma nor . . . .” G able De cl. ¶ 69. NB C has provided no doc umentation to support these cla ims, and presumably FEMA w ould have pr ovided NB C with documentation relatingto an awa rd of f unds. Wi thout such documentation, it is unclea r whe n FEMA a lleg edly

g rante d NB C these funds and what re strictions FEMA may have place d on them. Ba sed solely on Revere nd Gable’ s decla ration, the Court ca

n only assume that these funds w ere available as of the date of the de clar ation, i.e., May 5, 2010, subsequent to the events at issue. II. LEGAL STANDARD A. Motion to Dismiss Pursuant to Federal Rule of Civil Procedure12( b) ( 2) A plaintiff bea

rs the burde n of establishinga fa ctual basis for asser ting pe rsonal jurisdiction over a de fenda nt. See Crane v. N.Y

. Zoological Soc’y , 894 F.2d 454, 456 ( D.C. Cir. 1990). “The plaintiff, howeve r, ca nnot rest on bar e alleg ations or conc lusory statements and must alleg e spec ific fa cts conne ctingeac h defe ndant with the forum.” GTE New Media Serv s., Inc. v . Ameritec h Corp. , 21 F. Supp. 2d 27, 36 (D.D .C. 1998); see also Sec ond Amendm ent Found. v. U.S. Confere nce of M ayors , 274 F.3d 521, 524 ( D.C. Cir. 2001) (same) . “To make such a showing , the plaintiff is not require d to adduce evidenc e that mee ts the standards of admissibili ty

rese rved f

or summary

judgme nt and trial; rathe r she may rest her arguments on the
On Novembe r 4, 2009, L illey informed NB C that the November 30, 2009 fore closure 3 0 sale’s loc ation, but not the time or date, ha d chang ed. De fs.’ Stmt. ¶ 102. 21pleading s, ‘bolstered by such af fidavits and other

written mater ials as [she] can othe rwise obtain.’ ” Urban Inst. v. FI NCON Servs. , 681 F. Supp. 2d 41, 44 (D.D .C. 2010) (quoting Mwani v. bin Laden , 417 F.3d 1, 7 ( D.C. Cir. 2005)) (a lteration in orig inal). When deter mining whe ther persona l jurisdiction ex ists over a de fenda nt, the Court need not tre at all of a plaintiff’s alleg ations as true. Instead, the Court “ may rec eive a nd weig h aff

idavits and any

other re levant matter to assist it in determining the jurisdictional fac ts.” United States v. Philip Morris, Inc. , 116 F. Supp. 2d 116, 120 n.4 (D.D .C. 2000) (interna l quotation marks and citation omitted). Any fac tual discrepa

ncies with re g ard to the e x istence of persona l jurisdiction, however, must be resolved in f

avor of the plaintiff. See Crane , 894 F.2d at 456. B. Motion to Dismiss Pursuant to Federal Rule of Civil Procedure12( b) ( 6) Under the Fe dera l Rules of Civil Procedur e, a c omplaint mustcontain “a short and plain statement of the c laim showing that the pleade r is entitled to relief,” Fe d. R. Civ. P . (8)( a), “ in order to ‘g ive the def

endant f air notice of what the . . . claim is and the g rounds upon which it rests.’ ” Bell Atl. Corp. v. Tw ombly , 550 U.S. 544, 555 (2007) (quoting Conley v. G ibson , 355 U.S. 41, 47 (1957)). A lthough “ detailed f actua l alleg ations” ar e not nec essar y to withstand a Rule 12(b)(6) motion to di smiss, t o provide the “ g rounds” of “entitle[ment] to relief,” a plaintiff must furnish “more tha

n labels and c onclusions” or “ a for mulaic re citation of the e lements of a

cause of ac tion.” Id. “Nor does a c omplaint suffice if it tende rs ‘na ked asse rtion[s ]’ devoid of ‘fur ther fa ctual enha

nceme nt.’ ” Ashcroft v. Iqbal , 129 S.Ct . 1937, 1949 (2009) ( quoting Twombly , 550 U.S. at 557). Rather , a complaint must contain suffic ient fac tual alleg ations that if

acc epted a s true, “state a c laim to relief that is plausible on its fac e.” Twombly , 550 U.S. at 570. “A c laim has fac ial plausibilit y when the pla intiff pleads fa ctual conte nt that allows the court to

22draw

the re asonable infere nce that the defe ndant is liable for the misconduct alleg ed.” Iqbal , 129 S.Ct . at 1949 (c iting Twombly , 550 U.S. at 556). When consideringa motion to dism iss for fa ilure to state a c laim, the Court must construe the complaint in a lig ht most favorable to the plaintiff and must ac cept a s true all re asonable fac tual infere nces dr awn f rom well-plea ded fa ctual alleg ations. In re United M ine W orkers of Am. Emp. Be nefit Plans Li tig. , 854 F. Supp. 914, 915 (D.D .C. 1994); see also Schule r v. United States , 617 F.2d 605, 608 ( D.C. Cir. 1979) (“The complaint must be liberally construed in f

avor of the plaintiff, who must be g rante d the bene fit of all infer ence s that can be derive d from the fac ts alleg ed.”) (interna l quotation marks omitted). Howeve r, a pla intiff must provide more than just “a shee r possibilit y

that a def endant ha s acte d unlawfully .” Iqbal , 129 S.Ct . at 1950. When a complaint’s we ll-pleade d fac ts do not enable a court, “ draw [i ng ] on i ts judicial ex perie nce a nd common sense,” “to infer more than the mere possibili ty of misconduct,” the complaint has not shown that the plea der is entitled to re lief. Id. In evaluating a

motion to di smiss under Rule 12(b)(6) , the Court is lim ited to considering the fa cts alleg ed in the complaint, any documents attac hed to or incor porate d in the complaint, matters of which the cour t may take judicial notice , and matter s of public re cord. See EEOC v. St. Francis Xavier Paroc hial Sch. , 117 F.3d 621, 624 ( D.C. Cir. 1997). I f, howe ver, the parties prese nt additional documents that are “not excluded by the cour t, the motion [ to dismi ss] shall be treated as one for summary judgme nt and disposed of a s provided in Rule 56.” F ed. R. Civ. P. 12(d). “ All parties must be g iven a r easona ble opportunity

to present a ll the material that is pertinent to the [conver

ted] mot ion [ for summary judgme nt] .” F ed. R. Civ. P. 12(d).

23“The decision to conve rt a motion to dismi ss into a motion for summary judge ment . . . is committed to the sound discretion of the tria l court.” Flynn v. Tiede -Zoeller, Inc

. , 412 F. Supp. 2d 46, 50 (D.D.C. 2006) ( citing 5C Char les Alan Wrig ht & Ar thur R. Mill er, Fede ral Practice and Procedure§ 1366 at 159 (3d e d. 2004)). In exercisingthis discretion, a “r eviewingcourt should not automatically

treat a dismissal where e x terna l materials we re not e x cluded a s a summary judgme nt, although suc h treatment may be the most common result . . . . Rather , the revie wingcourt must assure itself that summary judgme nt treatment would be fair to both par ties in that the proce dural re quirements of the applicable rules we re obse rved.” Tele-Commc ’ns of Key W est, Inc. v . United States , 757 F.2d 1330, 1334 ( D.C. Cir. 1985). Howeve r, “no use ful purpose c an be se rved by [Rule 12(d)’ s notice and oppor tunity require ment’s] application where it is clear that the dispositive fa cts will remain undisputed and unc hang ed.” See Hollis v. U.S. Dep’ t of Army , 856 F.2d 1541, 1544 ( D.C. Cir. 1988). C. Motion for Summary Judgm ent Pursuant to Federal Rule of Civil Procedure56 Summary judgme nt is proper whe n “the movant shows that ther e is no g enuine dispute a s to any materia l fac t and the movant is entitled to judgme nt as a matter of law.” Fe d. R. Civ. P

. 56(a) . Under

the summary

judgme nt standard, the movingparty bear s the “initial responsibility of informingthe district court of the basis for its motion, and identifying those portions of the pleading s, depositions, answers to interr og atories, a nd admissions on file, toge ther with the aff idavits, if any , which it believes de monstrate the a bsence of a g enuine issue of materia l fac t.” Celotex Corp. v. Catrett , 477 U.S. 317, 323 (1986) (inter nal quotation marks omitted). In response , the non-movingparty must “g o beyond the pleading s and by [i ts] own af

fidavits, or by the depositions, answer s to interrog atories, a nd admissions on file, desig nate spe cific f acts
24showing that there is a g enuine issue f or trial.” Id. at 324 (interna l quotation marks omitted). All underlying f

acts a nd infere nces a

re a naly zed in the light most favora ble to the non-movingparty
. Anderson v. Liberty Lobby, I nc. , 477 U.S. 242, 255 (1986). The mer e existence of a

fac tual dispute, by

itself, is insufficient to bar summar y judgme nt. See id. at 248. To be material, the f actua l assertion must be ca pable of aff ectingthe substantive outcome of the litigation; to be g enuine, the issue must be suppor ted by sufficie nt admissible evidence that a re asonable trier of fac t could find for the nonmoving pa rty
. Laningham v. U.S. Navy , 813 F.2d 1236, 1241 ( D.C. Cir. 1987); see also Liberty Lobby , 477 U.S. at 251-52 (the c ourt must determine “ whether the evidenc e pre sents a suff icient disag ree ment to require submissi on to a jury or whe ther it is so one-sided that one party must preva il as a matter of

law”) . “I f the e vidence is merely colora ble, or is not sufficie ntly

probative, summary judgme nt may

be g rante d.” Liberty Lobby , 477 U.S. at 249-50 (inter nal citations omitted). In addition, conclusory asser tions offere d without any fac tual basis for support do not satisfy an opponent’ s burden to set for th “af firmative e vidence ” showinga g enuine issue f or trial. Broaddrick v . Exe c. Office of the President , 139 F. Supp. 2d 55, 65 (D.D .C. 2001) (citing Laningham , 813 F.2d at 1241). III. DISCUSS ION A. Fede ral Defendants’ Motion to Dismiss Pursuant to Rule 12( b) ( 2) 1. NB C Has Fa iled to Alleg e F acts Connec ting L illey with the District NB C has the burde n of demonstrating that District of Columbi a law grants this Court persona l jurisdiction over L illey

. Crane , 894 F.2d at 456; see also Edmond v . U.S. Postal Serv. Gen. Counsel , 949 F.2d 415, 424 ( D.C. Cir. 1991) (“Eve n though subje ct-matter jurisdiction is
25here predic ated upon a fede ral que stion, [ plaintiffs] mus t rely on D.C. law to sue nonre sident defe ndants, since no f

eder al long -ar

m statute applies.”) . For

this Court t o exercise pe rsonal jurisdiction over L illey , NB C must pl ead f acts suff icient to satisfy : (1) the District of Columbi a’s long- arm statute; and ( 2) the c onstitut ional require ments of due pr ocess. See GTE New Media Servs. I nc. v. B ellSouth Corp. , 199 F.3d 1343, 1347 ( D.C. Cir. 2000). The long -ar m statute provides in per

tinent part: (a) A District of Columbi a court may exercise persona l juri s d i ct i o n over a person, who ac ts directly

or by an ag ent, as to a c laim for re lief ar ising fr om the person’ s- (1) tra nsactingany

business in the District of Columbia . . . . D.C. Code § 13-423. NB C asserts that jurisdiction is proper unde r subsec tion (a)( 1) bec ause “ it is reasona ble for N BC to ave r HUD and [L illey ] remained in continuous contac t (via ema il

corr espondenc es and te lephone c alls) re g ardingthe fore closure pr ocee ding.” Pl.’s Opp’n at 37. This contact, NB C avers, must have been dir ecte d into the District as HUD is a f eder al ag ency headqua rtere d in the District. Id. NB C does not alleg e that any other c ontact with the District or subsection of the long -ar

m statute confe rs per sonal jurisdiction over L illey

. See Pl.’s Opp’n at 37-39. 1 7 In contra st to NBC’s alleg ations, L illey decla res that his appointment as F ortner Ma nor’s fore closure c ommissi oner w as ef fec tuated exclusively

by HUD’ s Fort Worth, Texas office and

The Court notes that NB C’s opposition contains a headingentitled “The Now Known 1 7 Fa cts Establish the Ex istence of Gene ral Jurisdiction” and a re citation of the standa rd for exercisingg ener al per sonal jurisdiction under D.C. Code § 13-334( a). SeePl.’s Opp’n at 38 (empha sis in the origina l). Howe ver, N BC conf lates the distinct doctrines of specific persona l jurisdiction under D.C. Code § 13-423( a)( 1) and g ener al per sonal jurisdiction under D.C. Code § 13-334(a ). F urthermor e, D.C. Code § 13-334( a) a pplies only

to corporations, and L illey is not a cor poration. See G orman v. Ame ritrade Holding Corp. , 293 F.3d 506, 509 ( D.C. Cir. 2002) (citing AMAF I

nt’l Corp. v. Ralston Purina Co. , 428 A.2d 849, 850 (D.C. 1981))

. 26“[a]t no poi nt did [ he] communicate in any respe ct with any

HUD of ficial located in Washington, D.C., as par

t of the proc ess by

which [he] was appointed for eclosure commissioner.” Sec ond L illey Dec l. ¶ 4; see also id. ¶ 5 (“ At no point during the course of my duties as fore closure commissioner have Iever initiated any

form of written, telephonic, or other c ontact with any HUD of ficial located in Washington, D.C.”) . In light of L illey ’s uncontrove rted de clar ation and NB C’s unsubstantiated speculation, the Court concludes that NB C has failed to e stablish specific fac ts connec ting L illey

with the District. See A meritec h Corp. , 21 F. Supp. 2d at 36 (“ The plaintiff . . . ca

nnot rest on bar e alleg ations or conc lusory statements and must alleg e spec ific fac ts connec ting e ach de fenda nt with the forum.”) . Acc ording ly , the Court may not exercise persona l jurisdiction over L illey pursuant to subsection (a )(1) of the long -ar m statute. 2. The Jurisdictional Facts Ar e Not Intertwined w ith the Merits NB C contends that the Court should at least dela y resolvingwhether

it has persona l jurisdiction over L illey

beca use this jurisdictional issue is i ntertwined w ith the merits of this

case . Pl.’s Opp’n at 39. Specific ally , NB C contends that L illey ’s possible communications with the District “would a lso likely disclose the deta ils surrounding N BC’s c laims . . . .” Id. at 40. As Howeve r, as this Court stated when r ejec ting NB C’s identical ar gument in oppositi on to Hotard’s motion to di smiss for lack of pe rsonal jurisdiction: [W ]hether this Court has persona l jurisdiction over [L illey ] is not intertwined, much less inext rica

bly , with the merits of this case . Reg ardle ss of whether For tner Manor’ s fore closure complied with the APA and HUD proce dures, the nature of [L illey ’s] contac ts with the District of Columbi a will rema in unaff ecte d. The fac t that the same evidenc e ma

y b o th s u p p o r t [NBC’s] claims and indicate [L illey ’s] contac t with HUD, does not rende r the merits of this case inext rica bly intertwined with the persona l jurisdiction issue curre ntly befor e the Court.

27See [36] Mem. Op. at 7. Ac cording ly , the Court shall not defer resolution of F eder al Def endants’ motion to di smiss L illey

as a de fenda

nt for lac k of per sonal jurisdiction. 3. NB C I s Not Entitled to J urisdictional Discover y Finally , NB C attempts to evade the motion to dismiss L illey as a de fenda

nt for lac k of persona l jurisdiction by

claimingthat it “is entitled, at bare minimum , to full discovery with respe ct to the jurisdictional issue raised.” Pl.’s Opp’n at 40. “It is well established that the ‘district cour t has broad disc retion in its resolution of [j urisdictional] di scover

y problems.’ ” FC Inv. Grp. LC v. IFX M arkets, Ltd. , 529 F.3d 1087, 1093 (D.C. Cir. 2008) (quoting Naartex Consulting C orp. v. W att , 722 F.2d 779, 788 ( D.C. Cir. 1983)). “ This Circuit’s standard f or per mitti ngjurisdictional discovery is quite liberal.” Diamond Chem. Co. v. Atofina Chems., Inc

. , 268 F. Supp. 2d 1, 15 (D.D .C. 2003). “[H]owever, in order to g et jurisdictional discovery a plaintiff must have at least a g ood faith belief

that such discovery will enable it to show that the cour t has persona l jurisdiction over the def endant.” Caribbean Broad. Sys., Ltd. v. Cable & W ireless PLC , 148 F.3d 1080, 1090 ( D.C. Cir. 1998) (deny ing jur isdictional discovery when plaintiff “ did not alleg e any fac ts remotely

sug g esting that [t he def endant] had any

connec tion to the District of Columbi a”) . Moreove r, “a plaintiff must make a ‘deta iled showingof what discovery it wishes to conduct or what results it thi nks such discovery would produce .’ ” Atlantigas Corp. v. Nisource, Inc

. , 290 F. Supp. 2d 34, 53 (D.D .C. 2003) (quoting Philip Morris , 116 F. Supp. 2d at 130 n.16). “ Where ther e is no showingof how jurisdictional discovery

would help plaintiff discove r any thing ne w, ‘it [is ] i nappropr iate to subject [defenda

nts] to the burden a

nd expense of discove ry .’ ” Id. (quoting COMSAT Corp. v. Finshipyards S.A.M. , 900 F. Supp. 515, 524 n. 4 (D.D .C. 1995)) (a lterations in the orig inal); see 28also FC Inv. Grp. , 529 F.3d at 1093 (“[A] request for jurisdictional discove ry cannot be based on

mere conjec ture or spe culation.”)

. In this case, NB C requests jurisdictional discover y “to establish the known jurisdictional predic ates with re cord e vidence .” Pl.’s Opp’n at 41. NBC asse rted this identical boilerpla te reque st for jurisdictional discover y when it opposed Hota

rd’s motion to dismi ss. The Court shall

once a g ain deny

NB C’s reque st for jurisdictional discover y . First, NB C’s reque st does not amount to the nece ssary

“deta iled showingof what discovery [NBC] wis hes to conduc t or what results it thinks s uch discove ry would produce .” Atlantigas Corp. , 290 F. Supp. 2d at 53. Second, as me ntioned above, N BC’s ba sis for per sonal jurisdiction over L illey is completely speculative, and ther efor e ca nnot serve a s the basis for jurisdictional discove ry . See FC Inv. Grp. , 529 F.3d at 1093 (“[A] request for jurisdictional discove ry cannot be based on me re conjec ture or spe culation.”) . Contrary to NBC’s sug g estion, a re quest for jurisdictional discove ry is not a talisman whose mere utteranc e ca n war d off a

n impending motion to dismiss for lac k of persona l jurisdiction. R ather , a plaintiff must at lea st have a g ood faith basis that jurisdictional discovery will revea l the exis tence of fa cts sufficie nt to establish personal jurisdiction over a defe ndant. See Caribbean Broad. Sys. , 148 F.3d at 1090. NBC has not provide d the Court with

a re ason to believe that there is a g ood faith basis for seekingjurisdictional discovery

. See B astin v. Fe d. Nat’l Mortgage Ass’n , 104 F.3d 1392, 1396 ( D.C. Cir. 1997) (af firmingdistrict court’s denial of jurisdictional discove ry wher e re quest “would amount to nothi ngmore than a fishing expedition”). There fore , the Court shall deny NB C’s reque st for jurisdictional discover y . Acc ording ly , the Court shall g rant F eder al Def endants’ motion to dismiss L illey as a de fenda

nt for lac k of per sonal jurisdiction.
29B. The Secre tary’s Motion to Dismiss Pursuant to Rul e 12( b) ( 6) Although the Court will treat the Secr etar y ’s dispositi ve motion primarily as a motion 1 8 for summary

judgme nt based on the pa rties’ submission of materials outside the plea dings, the re

are two discrete claims which do not re ly on matters outside the plea dings. The se ar e NB C’s claims that (1) H UD discriminated a g ainst NBC at the reque st of other non-minority org anizations, seeCompl. ¶ 77; and (2) HUD “sing led out” NB C for for eclosure , see id. ¶ 79. There fore , the Court shall consider the se cla ims to determine whethe r NB C has asser ted a c laim upon which re lief ca

n be g rante d pursuant to Rule 12(b)( 6). 1. NB C Has Fa iled to State a Claim that HUD Discr iminated Ag ainst I t at the Request of N on-Minority Profit or Non-Profit Or g anizations As part of its claim that the Secre tary acte d arbitra

rily or ca priciously , NB C alleg es that in fore closing on For

tner Manor , HUD “ acte d upon the re quest of other , non-minorityprofit or nonprofit org anizations who desired to obtain [NBC’s] valuable prope rty” and that this was “discriminatory .” Compl. ¶ 77. The Sec reta ry argues that this claim must be dismis sed bec ause the Complaint fails to alleg e any fac ts that support this conclusory alleg ation or show that this would constitute arbitra

ry or ca pricious ac tion by

the Secr etar

y . In its opposit ion, NBC fa ils to addre ss this claim and does not otherwise a rgue that HUD discriminated ag ainst NBC in this

manner . Acc ording ly , the Court may treat the Secre tary ’s ar g uments as conc eded. See, e .g. , Hopkins v. W

omen’ s Div., Ge n. Bd. of Global Ministri es , 284 F. Supp. 2d 15, 25 (D.D .C. 2003) (“It is well understood in this C ircuit that when a plaintiff files an opposition to a dispositive motion and addre sses only cer tain arguments raised by

the def endant, a court may

trea t those arguments that the plaintiff fa iled to addre ss as conc eded.” ), aff’d , 98 F. App’ x 8 (D.C. Cir.
Wit h the dismissal of L illey , the Secr etar y is the only

rema ining de fenda

nt. 1 8 302004); Day v . D.C. Dep’t of Consumer &Regulatory Affairs , 191 F. Supp. 2d 154, 159 (D.D .C.

2002) (“ I f a pa

rty fails to counter

an ar g ument that the opposing party makes in a motion, the court may treat that argument as conc eded.” ). More over, e ven if the Court we re not to treat these arguments as conc eded, the Court would stil l dismi ss this claim for failure to state a c laim beca use the Complaint does not contain any fac tual alleg ations to support this claim. 2. NB C Has Fa iled to State a Claim that HUD Single d I t Out Fore closure NB C also claims that the Secre tary acte d arbitra

rily and ca priciously by “sing ling out [Fortner Ma

nor] for fore closure in the midst of the disorg anization of the fede ral g overnme nt in dealingwith the afte rmath of Hur rica ne Katrina.” Compl. ¶ 79. The Sec reta ry moves to dismis s this claim on the g round that NB C has failed to plea d any specific fac ts to support it

. See Def s.’ Mot. at 44. After

revie wingthe Complaint, the Court ag ree s. NBC doe s not alleg e in its Complaint t hat there wer e other simil arly situated proper

ties that HUD did not fore close on or otherwise e x plain how NB C was “sing led out” by HUD. NB C’s conclusory alleg ation that HUD acte d arbitra

rily and ca priciously by singlingout NBC is insufficient to plausibly state a c laim for relief . NB C does asser

t additional fac ts in it s opposition t hat ar e ar g uably rele vant to this claim,

see Pl.’s Opp’n at 9, 25, but the Court may not consider suc h new a lleg ations when de cidinga motion to di smiss, which tests the sufficienc y of the a lleg ations in the Complaint. See Arbitraje Casa de Cambio, S.A. de C.V. v. U.S. Postal Serv

. , 297 F. Supp. 2d 165, 170 (D.D .C. 2003) (“It is ax iomatic that a complaint may not be amende d by

the brief s in oppositi on to a motion to dismiss .”) ( citation omitted). Moreove r, the fa ct that HUD ma y have a cted diff

ere ntly in other published case s involving for eclosure does not establish that it acted a rbitrar ily or ca priciously in this inst ance . There fore , for the a fore mentioned re asons, the Court conc ludes that NB C has
31failed to state a claim that HUD sing led it out for fore closure or discriminated ag ainst it at the reque st of non-minority

org anizations. 1 9 C. The Secre tary’s Motion for Summary J udgment The Court now c onsiders the Sec reta ry ’s motion for summary

judgme nt. NBC asse rts four c ounts ag ainst the Secre tary . The Court shall first addr ess Count I , which see ks a decla ratory judgme nt that HUD fa iled to comply with its reg ulations requiringwritten notice justify ing its re fusal to delay or withdraw

For tner Manor ’s fore closure. T he Court shall then analy ze Counts I Iand I I I , which ar e NB C’s challeng es to HUD’ s fore closure pr ocess a nd decision under

the Administrative Proce dure A ct, 5 U.S.C. §§ 551 et seq. (“A PA”). F inally , the Court shall conclude w ith CountI V, wher ein NB C seeks to perma nently enjoin the Secr etar

y from for eclosingFor

tner Manor

. 1. Count I In Count I , NB C claims that HUD violated its own re gulations by failingto provide written notice justifying its re fusal to delay or withdraw

For tner Manor ’s fore closure a nd seeks a decla ration that the July

28, 2009 and Nove mber 30, 2009 for eclosure sales and O ctober 2009 Notice of For eclosure are there fore illega l and void. See Compl. ¶¶ 62-68. The r egulation at issue is 24 C.F.R. § 27.25(d), which state s: “I f upon applica tion by the mortg ag or, the [foreclosure ] commi ssioner re fuses to withdraw the prope rty

from for eclosure under se ction

NB C argues that discover y will enable it to obtain more infor mation reg ardingpossible 1 9 examples of how HUD sing led it out for fore closure. See Pl.’s Opp’n at 9 n.2, 19, 25 n.5. Howeve r, having

failed to state suc h a cla im, NBC is not entitled to thi s discovery

. See, e .g. , Y uhasz v. Brush W

ellman, Inc

. , 341 F.3d 559, 566 ( 6th Cir. 2003) (“[T]here is no g ener al right to discovery upon filing of

the complaint. The ve ry purpose of

Fe d. R. Civ. P . 12(b)( 6) is to enable defe ndants to challeng e the leg al suffic iency of complaints without subjecting themselves to discovery .”) ( internal quotation marks a nd citation omitted). 32369A(a ) of the A ct (12 U.S.C. 3709(a) ), the c ommissi oner sha ll provide the mortg ag or and the

Secre tary with a written stateme nt of the re asons for the ref usal.” In turn, 12 U.S.C. § 3709(a) provides in per

tinent part that: [ T]he fore closure commissioner shall withdraw the secur ity proper ty from fore closure a

nd canc el the for eclosure sale only if-

. . . (2) the commissioner finds, upon application of the mortg ag or at least three d a ys p r i o r t o the date of sale , that the defa ult or defa

ults upon which the fore closure is based did not exis t at the time of service of the notice of defa ult and for eclosure sale . . . . (empha sis added). The Sec reta

ry contends that HU D did not violate 24 C.F.R. § 27.25(d) be cause the fore closure c ommissi oner ne ver r ece ived a timely application fr om NBC to withdrawthe proper ty from for eclosure . NB C counters that its counsel a ttempted to contact L illey on J uly 27 and 28, 2009 but did not rec eive a prompt response. See Pl.’s Opp’n at 32 (c iting Weinstein 2 0 Dec l. ¶¶ 5-6) . Even a ssuming, arguendo , that the attempts by NB C’s counsel to contac t L illey amounted to an “ application” unde r 24 C.F.R. § 27.25(d) , these a ttempts occurr ed the da

y befor e and the da

y of the for eclosure sale––July 28, 2009––and ther efor e we re untimely

. See Compl. ¶ 43; Def s.’ Stmt. ¶ 92. S ection 3709(a ) re quired NB C to submi t its application at least three day s prior to the for eclosure sale––i.e., by J uly 25, 2009. The Sec reta

ry contends that a

n untimely application does not trig g er 24 C.F .R. § 27.25(d)’s wr itten response r equire ment. This

NB C’s opposition i s not org anized based on e ither the individual counts asser ted 2 0 ag ainst the Secre tary , or the Sec reta ry ’s motion, but with respect to sepa rate instances whe re NB C contends the Secr etar y acte d arbitra

rily and ca priciously

. See Pl.’s Opp’n at 19-33. Although the Court has thoroug hly revie wed NB C’s opposition i n an attempt to locate those arguments that respond to the a rguments raised in the Sec reta ry ’s motion, the Court notes that NB C’s org anizational scheme ha s unnece ssarily complicated this task. 3 3is a straig htforwa rd re adingof the re g ulations, and NB C advanc es no leg al authority or ar g ument to contradic t the plain languag e of the regulations. I n fac t, NBC does not e ven discuss or r efe r to 24 C.F.R. § 27.25(d) or

12 U.S.C. § 3709(a) in its oppositi on. Acc ording ly , the Court cannot conclude that HUD f

ailed to comply

with 24 C.F.R. § 27.25(d) and that the J uly 28, 2009 and November

30, 2009 fore closure sa les and Oc tober 2009 Notice of F orec losure we re c ontrary to the law a s a re sult. Theref ore, the Secre tary

is entitled to judgment as a matter of la

w with respe ct to Count I

. 2 2

2. Counts I I

and I I I In Counts I I

and I I Iof the Complaint, NBC cla ims that HUD violated the APA by , inter alia , failingto follow its own regulations, failing to a ffor d NB C with due proce ss prior to fore closure, a

nd decidingto forec lose on For tner Manor

amidst the fede ral g overnme nt’s disorg anized response to Hurrica ne Katrina. The A PA provides ca use of a ction for f

eder al cour

ts to “hold unlawful a

nd set aside a g ency

action, finding s, and conc lusions found to be . . . arbitra ry , capr icious, an abuse of discre tion, or otherwise not in ac corda nce w ith law.” 5 U.S.C. § 706(2)( A). NB C, as the par ty challeng ing the ag ency

action, must prove that HU D’s dec ision

was a rbitrar y or ca pricious. City of Olmsted Falls v. Fed. Aviation Admin. , 292 F.3d 261, 271 (D.C. Cir. 2002). An a g ency ’s dec ision may be ar bitrary and ca pricious if: (i) its explanation runs counter

to the evidenc e bef

ore the ag ency

or is so implausible that it could not be ascribed to a diffe renc e of vie w or the pr oduct of a g ency expertise; (ii) the ag ency entirely failed to c onsider

NB C also claims that decla ratory judgme nt in CountIis appropria te bec ause the J uly 2 2 28, 2009 and Nove mber 30, 2009 for eclosure sales we re ultimately unsucce ssful. See Pl.’s Opp’n 33-34. N BC provide s no authority for this proposition, see id. , and the Court conc ludes that the fa ct that the for eclosure sales did not result in a succ essful purc haser is irreleva

nt as to whether HUD f ailed to comply

with or interpre t its reg ulations.

34an important aspe ct of the pr oblem or issue; (iii) the ag ency relied on f

actor s which Cong ress did not intend the ag ency

to consider; or ( iv) the dec ision otherwise constitutes a c lear err or of judgme nt. Motor VehicleMfrs. Ass’n of the U.S., Inc . v. State Farm M ut. Auto. Ins. Co. , 463 U.S. 29, 43 (1983); accord J icarilla Apache Nation v. U .S. De p’t of Interior , 613 F.3d 1112, 1118 (D.C. Cir. 2010). In assessingthe merits of NB C’s challeng e, the Court beg ins with the presumption that HUD’ s action wa s valid. Grid Radio v. Fed. Commc ’ns Comm’n , 278 F.3d 1314, 1322 ( D.C. Cir. 2002). This standard of revie w is highly

defe rential; the Court nee d not find that HUD’s decision is “the only

rea sonable one , or eve n that it is t he re sult [ the Court] would have rea ched had the que stion arisen in the first instance in judicial proce eding s.” Am. Paper I nst., Inc. v. A m. Elec. Powe r Serv. Corp. , 461 U.S. 402, 422 (1983). Tha t is, itis not enoug h for HU D’s dec ision to be incorr ect; so longas it has some rational basis, the court is bound to uphold the decision. Hosp. of Univ. of Pa. v. Se belius , 634 F. Supp. 2d 9, 13 (D.D .C. 2009) (citing Citi zens to Preserv e Ov erton Park, Inc . v. Volpe , 401 U.S. 402, 416 (1971)). Finally , in reg ard to HU D’s ac tions in particular, HU D must “exercise [its] power s, functions, and duties . . . c onsistently with the national housing policy decla red by” the national housing a cts. See 42 U.S.C. § 1441. This m andate “is not prec atory ; HUD is oblige d to follow these policies” and “[a]ction taken without consideration of them, or in conflict with them, will not stand.” Pennsylv ania v. Lynn , 501 F.2d 848, 855 ( D.C. Cir. 1974). Neve rtheless, “ once a mortg ag or def

aults, ‘[t] he fe dera l policy to protect the tre asury

and promote the secur ity of fede ral investment . . . bec omes predominant.’ ” United States v. OCCI Co. , 758 F.2d 1160, 1163 (D.C. Cir. 1985) (quoting United States v. Victory Highway Vill., Inc. , 662 F.2d 488, 494
3 5(8th Cir. 1981)); accord U nited States v. Stadium Apartments, Inc

. , 425 F.2d 358, 363 ( 9th Cir. 1970). The de cision whether to forec lose “is fundamentally of a business a

nd administrative nature , requiringthe exercise of HUD’ s business and administrative judg ment.” United States v. W inthrop T owers , 628 F.2d 1028, 1036 ( 7th Cir. 1980); see also Victory H ighway Vill. , 662 F.2d at 495 (“ [HUD] has broad discre tion to choose its possibl e re medies . . . and the reby achie ve national housing objectives.” ). Althoug h HUD’ s decision whethe r to fore close is subject to judicial revie w under

the APA, judicial re view should not “af ford the de faultingmortg ag or an opportunity

to unduly

prolongthe fore closure pr ocee dings.” See W inthrop T owers , 628 F.2d a

t 1036. HUD is entitled to summary judgme nt with respec t to its decision to fore close if NB C defa ulted on the Mortg ag e Agree ment, HUD is entitled to fore close in lig ht of NB C’s defa ult, and HUD ’s dec ision to foreclose w as not arbitra ry , capr icious, an abuse of discre tion, or otherwise not in ac corda

nce w ith law. See O CCI

, 758 F.2d 1160, 1162- 63; United States v. W ennick, 645 F. Supp. 103, 105 (D. D el. 1986). The Court shall review the parties’ alleg ations below with re spect to ea ch of the se ele ments.

a. NB C Remains in Non-Monetary and Moneta

ry Def ault and There fore HUD I s Entitled to Forec lose on For tner Manor The Sec reta

ry contends that NB C has rema ined in non-monetar y defa ult with respect to For tner Manor

. See Def

s.’ Mot. at 31; Defs.’ Reply at 16. The Court a g ree s. The August 2007 and Nove mber 2007 Violation Notice s, as well as the Marc h 2008 Def ault Notice, infor

med NB C that it was in violation of, inter alia , the Regulatory Ag ree ment by

failingto maintain

36For

tner Manor

in good r epair

and condition. Under

the Regulatory

Ag ree ment, HUD may 2 3 decla re a defa ult if NBC does not cor

rec t a violation within thi rty day s of re ceivingHUD’ s notice of violation. See id. at 16 (Regulatory Ag ree ment). Even a fter the August 2007 and Novembe r 2007 Violation Notices, NB C did not cure its violations, and so HUD dec lare d NB C in default of the Regulatory

Ag ree ment in the Marc h 2008 and De cembe r 2008 De fault Notice s. See id. at 57- 58 (Mar ch 2008 De fault Notice ); id. at 61 (De cembe r 2008 De fault Notice ). NB C disputes that ithas fa iled to operate For tner Manor

in good r epair

and condition. Howeve r, NB C argues only that “the damag es ca

used by Hurric ane K atrina c ould not have bee n controlled by

NB C” and that “ all residents we re e vacuated safe ly and no one w as hurt.” Pl.’s Opp’n at 12. These e x cuses do not esta blish that NBC was not in def ault. As set forth in the August 2007 and Novembe r 2007 Violation Notices, a s well as the Ma rch 2008 D efa

ult Notice, the standar d for g ood repa ir and c ondition of Section 811 housing is set forth in 24 C.F.R. § 5.703. See AR at 51 (August 2007 Violation Notice); id. at 55 (Nove mber 2007 Violation Notice) ; id. at 57 (Mar ch 2008 De fault Notice ). This standar d does not discuss whether occupa nts safely esca ped a natural disaster; r ather , it sets forth minimum require ments for the phy sical condition of Section 811 housing

. See 24 C.F.R. § 5.703. NB C provides no authority for its claim that its noncompliance w ith the Reg ulatory Agree ment may

be excused be cause it The languag e employ ed in ea ch notice is slig htly differ ent, howeve r, the import of e ach 2 3 is the same: NB C’s failure to maintain Fortne r Manor in good r epair

and condition violated the Regulatory

Ag ree ment. See AR at 51 (August 2007 Violation Notice) (notingthat NB C failed to maintain For

tner Manor

“in g ood repa ir and c ondition”); id. at 55 (Nove mber 2007 Violation Notice) (“H UD has pr ovided the Owne r two y ear s to return the pr operty to good r epair

and condition. To date, the Projec t has not become inhabitable . . . .”) ; id. at 57 (Mar ch 2008 De fault Notice) (indicatingthat despite the August 2007 and Novembe r 2007 Violation Notices, a rec ent inspection reve aled “ that the Project re mains uninhabitable due to substanda rd conditions, and the Owne rs ar e in def

ault of their c ontrac tual obligations”). 3 7was c aused by a natur al disaster. See Pl.’s Opp’n at 12. In fac t, as the Secr etar y notes, neither the Regulatory

Ag ree ment nor the Mortg ag e Agree ment contains a f orce majure c lause or a

ny other provision that would excuse NB C’s noncompliance with the Regulatory Ag ree ment if

cause d by a natur al disaster. See Def s.’ Reply at 17. In the abse nce of

such a pr ovision, the fact that Hurric ane K atrina c aused F ortner Ma nor’s damag es does not pre vent NB C from beingin defa ult of the Regulatory

Ag ree ment and, conse quently , the Mortg ag e Agree ment. See AR at 7 (Mortg ag e Agree ment) (incor poratingby

ref ere nce the Regulatory

Ag ree ment’s provisions). For these re asons, the Court conc ludes that NB C is in non-monetary defa ult. The Sec reta

ry also contends that NB C remains in monetary defa ult since HUD

acc eler ated NB C’s capital a dvance––$1,535,700.00––in the Dec ember 2008 Def

ault Notice. See Def s.’ Mot. at 31-32; Def

s.’ Reply at 17-18. NB C refute s this contention, arguing that it cannot be in monetar

y defa ult because it was neve r oblig ated to make monthly mortg ag e pay

ments for For tner Manor

. SeePl.’s Opp’n at 12, 30; see also Gable D ecl., Ex. H (L etter f rom Rever end 2 4 Noble, Chairman, N BC, to Shaun Donovan, Sec ’y , HUD ( J an. 12, 2009)) , at 1 (disputing that NB C was in monetary

defa ult because “F ortner Ma

nor wa s funded thru [sic] a Section 811 Gra nt; therefor e ther e is no monthly mortg ag e pay

ment”). A lthough NB C is correc t that it did not have to make monthly mortg ag e pay

ments, the Mortg ag e Agree ment provides that “[u]pon defa ult under the Regulatory

Ag ree ment, the Mortg ag ee, at his/her option, may decla re the whole

The sourc e of this ar g ument appea rs to be the De cembe r 2008 De fault Notice , which 2 4 provides that NB C is in vi olation of the Mortg ag e Agree ment beca use NB C “

failed to make monthly mortgage pay ments and fa iled to maintain and oper ate the pr operty in a dec ent, safe and sanitary manner .” AR at 61 (e mphasis added) . The Court notes that NB C does not claim that the notice’s r efe renc e to a f

ailure to pa

y monthly mortg ag e pay

ments alone re ndere d HUD’ s fore closure de cision arbitra ry or ca pricious or other

wise pre judiced NB C in any

manner . See Pl.’s Opp’n at 12, 30. 38indebtedness se cure d to be due a nd payable.” AR at 7 (Mortg ag e Agree ment); see also AR at 16 (Regulatory

Ag ree ment) (pr oviding that upon de fault of the Re g ulatory Ag ree ment, HUD may “[d] ecla re the whole of sa id indebtedness immediately due and pa

y able a nd then proc eed w ith the fore closure of

the mortg ag e”) . Pursuant to the Mortg ag e Agree ment, NB C was indebted to HUD for $1,535,700.00, whic h was sec ured by a mortg ag e in For

tner Manor . AR at 7. Prior to decla ringthis debt due in the Dec ember 2008 Def

ault Notice, HU D war

ned NB C in the Aug ust 2007 and Nove mber 2007 Violation Notice s that if NB C did not correc t the noted violations, “the Sec reta

ry may , without further notice , decla re the owner

in defa ult of the Regulatory Ag ree ment and see k any

and all ava ilable re medies, includingbut not lim ited to, acc eler ation of the outstanding principal indebte dness . . . .” AR at 52 (August 2007 Violation Notice); AR at 56 (Nove mber 2007 Violation Notice ). In conclusion, NB C’s claim that it is not i n monetary defa ult because it did not have to pay monthly mortg ag e pay

ments is without m erit. The Court conclude s that, as of the pa rties’ filing s in this case, NB C has rema ined in non-monetar y and monetary defa ult. I t is clear f

rom the re cord that HUD is entitled to fore close on F ortner Ma nor under the terms of the Mor

tga g e Agree ment due to NB C’s monetary and non-mone tary

defa ult. See AR at 9 (Mortg ag e Agree ment) ¶ 21. The ref ore, N BC must “come forwa rd and introduc e, as a

n aff irmative def

ense which would def

eat HU D’s for eclosure rig ht, evidence that HUD’ s decision to forec lose was ‘ arbitra

ry , capricious, an abuse of discre tion, or otherwise not in ac corda nce with law.’ ” OCCI

, 758 F.2d at 1163 (quoting W inthrop T owers , 628 F.2d at 1036). NB C makes

a ser ies of alleg ations claiming that HUD a cted a rbitrar ily , capr iciously , or contra ry to its own regulations when it decide d to forec lose For tner Manor . The Court shall addr ess these a rguments
3 9below in the orde r in which they appea r in NB C’s Complaint. b. HUD’ s Notices Complied with Applicable Regulations In Count I Iof its Compl aint, NB C claims that it has been de nied due pr ocess through HUD’ s ref

usal to halt or adjourn F ortner Ma nor’s for eclosure without proper notice , an opportunity

for a hear ing, a

nd adher ence to HUD re g ulations. SeeCompl. ¶¶ 70-74. In its 2 5 Complaint, NBC alleg es only that the May

2009 and Oc tober 2009 Notice s of For eclosure Sale did not adhere to HUD re g ulations. See Compl. ¶ 55. I n its opposit ion, NBC also c laims that the November

2007 Violation Notice and Ma rch 2008 a

nd Dec ember

2008 Def

ault Notices we re improper. See Pl.’s Opp’n at 11-12, 14- 15. The Sec reta ry responds to NB C’s arguments and does not argue that the Court should disreg ard N BC’s c laims with respec t to these notices. See Def s.’ Reply at 13-16. The ref

ore, the Court shall address a ll of these ar guments. i. HUD ha d no obligation to send the notices to the FD MBA. NB C’s first claim is that the Marc h 2008 and De cembe r 2008 De fault Notice s, as well as the Novembe r 2007 Violation Notice, w ere improper be cause they wer e not sent to For

tner Manor’ s local sponsor––the F DMBA

. See Pl.’s Opp’n at 11-12. NB C, however , provides no authority that HUD wa s require d to send notices to the F DMBA . In fac t, as the Secr etar y points out, HUD’s only

statutory obligation was to send the Mar ch 2008 and D ece mber 2008 De fault Notices to “the orig inal mortg ag or and a ll subsequent mortg ag ors of re cord or other pe rsons who appea r of r ecor d or in the mortg ag e agree ment to be liable for part or a ll of the mortg ag e debt.”
Unlike the Secr etar

y , see Def

s.’ Mot. at 40-42, the Court does not c onstrue NB C’s 2 5 Complaint as assertinga cla im that NBC was de nied due pr ocess unde r the F ifth Amendment to the Constitut ion. NBC does not mention the F ifth Amendment in its Com plaint or discuss case s involving the F ifth Amendment in its opposit ion. Accor dingly , the Court construes N BC’s due proce ss claims as re lating to the a lleg ed denia l of due proc ess re quired unde r HUD ’s g overning statutes and re gulations. 4012 U.S.C. § 3708(1)(B ). HUD satisfied this obligation by sendingthe Marc h 2008 and Dec ember

2008 Def

ault Notices to Rever end Centra llo at 383 Washington Street, Ne war k, Ohio, which is NB C’s addre ss in the Regulatory Ag ree ment. See AR at 13 (Regulatory Agree ment); id. at 57 (Mar ch 2008 De fault Notice ); id. at 61 (De cembe r 2008 De fault Notice ). The statute a lso 2 6 require s that notice be se nt to the curre nt security proper owner of re cord a

nd all persons holding liens of re cord, see 12 U.S.C. § 3708(1), but there is no e vidence that FDMB A was e ither the

curr ent owner

or a lienholde r of r ecor d. As for the November

2007 Violation Notice, the Regulatory Ag ree ment provides that if NB C violated any

of the Regulatory

Ag ree ment’s provisions, “HUD may g ive written notice ” to NB C at the addre ss provided in the Regulatory Ag ree ment “or suc h other a ddress a s may subsequently , upon written notice the reof to HUD, be de signated by the Mortg ag or as its leg al business addre ss.” Id. at 16 (Regulatory Ag ree ment) (e mphasis added) . The Nove mber 2007 Notice c ited NB C for a violation of the Re g ulatory Ag ree ment and wa s sent to NBC’s a ddress in the Regulatory

Ag ree ment. See id. at 55 (Nove mber 2007 Violation Notice ). Ther e is no evidenc e that NB C chang ed its leg al business addre ss to the FDMB A so as to implicate HUD ’s obligation under the Regulatory Agree ment. Additionally , NB C does not contend that it informed HU D that FD MBA w as F ortner Manor’ s “loca l sponsor” bef ore D r. Turne r’s Apr il 29, 2009 letter. AR at 64-65 (L etter f rom Dr. Robert Turne r, Sr., President, F DMBA , to Ruth P ompa, Dir., F ort Worth Mult ifamily Property Disposition C tr., HUD ( Apr. 29, 2009)) . Acc ording ly , even a ssuming arguendo that Dr. Turner ’s letter somehow

obligated HUD to se nd future notice s to the FDMB A, this obligation The Regulatory

Ag ree ment is incorporated by ref ere nce in the Mor

tga g e Agree ment. 2 6 SeeAR at 7 (Mortg ag e Agree ment). 41would have a risen only in J uly 2009––afte r HUD sent out the Marc h 2008 and De cembe r 2008 Def ault Notices, a s well as the Nove mber 2007 Violation Notice

. See Def s.’ Reply at 14-15. There fore , HUD’ s notices wer e not improper by virtue of the f

act that they

wer e not sent to the FDMB A. ii. The Nove mber 2007 Violation Notice and Mar ch 2008 Def ault Notice a

re not improper

simply beca use NB C disputes that Fortne r Manor was sec ured. NB C’s second c laim is that the November 2007 V iolation Notice and Ma rch 2008 Def ault Notice we re imprope r bec ause N BC “disputes that the pr operty was not sec ured at the time” HUD se nt the notices. Pl.’s Opp’n at 11. The se notices, howe ver, did not cla im that For tner Manor

was unsec ured, but that F ortner Ma nor wa s “uninhabitable.” Def s.’ Reply at 15; AR at 55 (Nove mber 2007 Violation Notice ); id. at 57 (Mar ch 2008 De fault Notice ). NB C fails to expl ain how disputing that Fortne r Manor was unsec ured c auses these notices to be improper

. Consequently , the Court conclude s that this dis pute does not re nder the November 2007 Violation Notice or D ece mber 2008 De fault Notice improper. See City of Olmsted Falls , 292 F.3d at 271 (“[T]he party challeng ing a

n ag ency ’s ac tion as arbitra ry and ca pricious bea

rs the burden of proof.” ). 2 7 iii. HUD se nt the J uly 2009 Notice of

For eclosure to the appropr iate entities. NB C’s third claim is that the J uly 2009 Notice of

For eclosure was improper beca use it “wa s not sent to the individual at NBC with whom HUD a nd . . . Senator [L andrie u]’s office ha d previously

been c ommunicating; a

nd [i t] was not sent to [Cons oc] . . . despite Dr. Noble ’s letter
The Court also re

jects NB C’s argument that the Novembe r 2007 Violation Notice a nd 2 7 Marc h 2008 Def

ault Notice we re imprope r bec ause N BC had submitted information to HUD conce rningits remediation plan. The Court addre sses this claim below. See infra § I I I .C.2.iii

. 42to HUD of A pril 11, 2008.” Pl.’s Opp’n at 14- 15. NB C’s arguments are without merit. Significa ntly , HUD wa s statutorily obligated to send the July 2009 Notice of

For eclosure to “the orig inal mortg ag or and a ll subsequent mortg ag ors of re cord or other pe rsons who appe ar of

rec ord or in the mortg ag e agree ment to be liable for part or a ll of the mortg ag e debt.” 12 U.S.C. § 3708(1)( B) . HUD satisfied this obli g ation when it sent the notice by cer tified letter to Revere nd Centrallo at 383 Washing ton Street, New ark, O hio. See AR at 92 (L etter f rom Roy S. L illey , to Revere nd Centrallo, NB C (J uly 9, 2009)). NB C provides this Court with no authority indicatingthat HUD must exceed 12 U .S.C. § 3708’s requireme nts by also sendingthe J uly

2009 Notice of For eclosure to the last NBC re prese ntative who communicated with HUD or to Consoc. Moreove r, eve n assuming, arguendo , that HUD would be obligated to provide notice s to entities other than those provide d in 12 U.S.C. § 3708(1) if reque sted to do so by NB C, Revere nd Noble’s Apr il 11, 2008 letter to HUD doe s not actually reque st that Consoc rece ive all future c ommunications on NBC’s be half. Rather , it provides that “NB C encounter ed administrative difficulties re sulting fr om inappropriate repr esentations by firms claimed [sic] to have be en re prese nting NB C,” and ther efor e only Consoc “is authorized to repr esent proje cts sponsored/controlled by

NB C in y our jurisdiction.” AR at 59. Ac cording ly , the Court reje cts NB C’s argument that the J uly 2009 Notice of

For eclosure was improper

. iv. The De cembe r 2008 De fault Notice did not prevent NB C from off eringHUD r easons to halt F ortner Ma nor’s fore closure. NB C’s final ar g ument is that the Dec ember 2008 Def

ault Notice limited the re asons that NB C could offe r HUD to halt Fortne r Manor ’s fore closure to only “leg al” r easons a

nd that this limit ation violated HUD r egulations. SeePl.’s Opp’n at 29-30. The Secre tary disagree s, arguing
43that NB C’s premise is flaw ed bec ause the Dec ember 2008 Def

ault Notice did not limit NBC to offe ringonly

leg al re asons to halt For

tner Manor ’s fore closure. See Def s.’ Reply at 11-12. F or the re asons set for

th below, the Court agree s with the Secre tary
. The plain languag e of the Dec ember 2008 Def

ault Notice plac es no limitations on t he ty pe of r easons that NB C could provide to HUD to ha lt Fortner Manor’ s fore closure. T he Dec ember

2008 Notice pr ovides in pertinent par t that: Be fore instit uting fore closure proce eding s, howeve r, HUD will provide y ou with an opportunity to show rea sons why fore closure should not t ake place. I f y ou believe that no defa

ult exis ts, or if y ou know of some other leg al rea son that HUD should not fore close, these rea sons should be submitt ed, in writing , within twenty -one (21) day s of the re ceipt of this letter. AR at 61. Essentially , NB C’s position i s that the qualifier “leg al” be fore “re ason” me ans that NB C “ca n only submit a legal rea son why fore closure should be halted.” Pl.’s Opp’ n at 29 (empha sis in the origina l). Howe ver, this position ignore s the notice’s pr ece ding se ntence , which states without qualification that “H UD will provide you with an opportunity to show reasons why fore closure should not take place .” AR at 61 (e mphasis added) . Additionally , the words immediately

surroundingthe phra se “le g al re ason” a lso belie NB C’s position t hat it could only offe r leg al re asons: “ or some other leg al re ason.” A R at 61 (emphasis adde d). F or the afor ementioned r easons, the Court c oncludes that the D ece mber 2008 De fault Notice did not prec lude NB C from prese nting nonleg al re asons to stop Fortner Manor’ s fore closure. T here fore , the Court need not de termine whe ther a notice that did pre clude a mortg ag or fr om advanc ing nonleg al re asons would violate 24 C.F.R. § 27.5. Nonethele ss, even a ssuming arguendo that the Dec ember 2008 Def

ault Notice violated 24 C.F.R. § 27.5, the Court would still not vacate HUD’ s decision to fore close F ortner Ma nor on 44this basis because NB C has failed to a rgue that this err or wa s prejudicial. See P DK Labs., Inc. v. U.S. Drug Enforce ment Admin. , 362 F.3d 786, 799 ( D.C. Cir. 2004) (“I f the a g ency ’s mistake did not affe ct the outcome, if it did not prejudice the pe titioner, it would be senseless to vac ate a nd

rema nd for r econside ration.”) . NB C does not expl ain how the De cembe r 2008 De fault Notice ’s use of the phr ase “ leg al re ason” a ctually influence d the re asons it presente d to HUD in favor of halting F ortner Ma

nor’s for eclosure . In fac t, NBC’s a ctions after the Dec ember

2008 Def

ault Notice de monstrate that the phr ase did not ac tually impact NB C. On J anuar y 12, 2009, Revere nd Noble sent a

letter to the Sec reta

ry in which he indicated that he ha d revie wed the D ece mber 2008 Def ault Notice a

nd reque sted that the Secr etar y consider ha lting the f

orec losure of F ortner Manor f or, inter alia , the followingrea sons: (1) the De cembe r 2008 De fault Notice ’s er roneous ref ere nce to f

ailure to pa

y monthly mortg ag e pay

ments; (2) NB C’s eff

orts afte r Hurr icane Katrina to obtain rec onstruction funding ; (3) how ha lting the f orec losure of F ortner Ma

nor would alleg edly advanc e HUD ’s g oals; and (4) how HUD’ s g uidelines and proc edure s were not cre ated in anticipation of a natural disaster like H urrica ne Katrina. Ga

ble Dec l., Ex . H (L etter f

rom Revere nd Noble, Chairman, N BC, to Shaun Donovan, Sec ’y , HUD ( J an. 12, 2009)) , at 1-3. Be cause Revere nd Noble’s a rguments are not limi ted to just “leg al re asons,” the Court doe s not perc eive how the Dec ember 2008 Def

ault Notice a ctually

prejudice d NB C by

preve nting it from prese nting nonleg al re asons to halt For tner Manor ’s fore closure. A ccor dingly , the Court reje cts NB C’s claims that the Dec ember 2008 Def

ault Notice, or

any other notice , was improper

. c. Count I I I In Count I I Iof its Compl aint, NB C claims HUD ac ted ar bitrarily and ca priciously and abused its discre tion by

(1) f orec losing on F ortner Ma nor despite the na

tional housing policies
45implemented af ter Hur rica ne Ka trina, see Pl.’s Opp’n at 21-24; (2) fore closing on For tner Manor despite the known disorg anization of fede ral a g encie s after Hurric ane K atrina a

nd acc ompanying delay s, see Compl. ¶ 79; P l.’s Opp’n at 25-28; and (3) failingto consider a ll the evidence prese nted to HUD r eg arding NB C’s financingand re building ef forts, see Compl. ¶ 77; Pl.’s Opp’n at 9-10, 24, 28-33. The Court shall re view ea ch of the se cla ims below. 2 8 i. HUD’ s decision to fore close F ortner Ma nor did not violate national housing policies. NB C argues that HUD ’s dec ision to foreclose on F ortner Ma nor wa s arbitra

ry and capa cious bec ause se vera l contempora neous Cong ressional statutes a nd a state a dminist rative plan stressed the importance of maintainingaff ordable renta l housing, includingSection 811 housing, in a

rea s aff ecte d by Hurric ane K atrina. See Pl.’s Opp’n at 21-25. In particula r, NB C relies upon: (1) the Emerg ency Supplemental Appropriations Act for De fense , the Global War on Terr or, and H urrica

ne Rec overy

(“H urrica

ne Rec overy

Act”) , Pub. L . No. 109-234, 120 Stat. 418 (2006); (2) the Depa

rtment of De fense , Emerg ency Supplemental Appropriations to Address Hurric anes in the Gulf of Mexico, and Pandemic I nfluenza Ac t, 2006 (“DO D Appropr iations Act”) , Pub. L . No. 109-148, 119 Stat. 2680 (2005); (3) the L ouisiana Recove ry Authority

Action Plan Amendment (“ Action Plan”); a nd (4) the D epar

tment of Homeland Sec urity Appropriations Act, 2007 (“ DHS Appropria tions Act”), Pub. L . No. 109-295, 120 Stat. 1355 (2007). See Pl.’s Opp’n 21-24. T he Secr etar y disputes that any

of the a fore mentioned source s altere d HUD’ s pree x isting oblig ation to “pre serve the assets of the insurance fund so that more pr ojects may be

NB C also claimed in Count I I Ithat HUD a cted a rbitrar ily and ca priciously by (1) 2 8 discriminating a g ainst NBC at the reque st of non-minority profit or non-pr ofit org anizations; and (2) sing ling NB C out for fore closure. See Compl. ¶¶ 77, 79. As the Court explained in § I I I .B above, the Court has alre ady dismiss ed these claims for f ailure to state a

claim, and ther efor e shall not address them he re. 46insured in the future ’ and to ‘pr otect public money from unnec essar

y risk.” OCCI

, 758 F.2d at 1165. For

the re asons set for

th below, the Court conc ludes that the af oreme ntioned source s did not rende r HUD ’s fore closure de cision arbitra ry or ca pricious. First, as the Secre tary

notes, Def

s.’ Reply at 19, this Court reviews HU D’s for eclosure decisions for c onsistency

with the national housing policies that are enunciated in the national housing a cts, including 42 U.S.C. § 1441, see, e .g. , OCCI , 758 F.3d a

t 1162 (“HU D must exercise its power s consistent with national housing policy as embodied in 42 U.S.C. § 1441 . . . .”). In this case in par ticular, HU D’s dec ision to foreclose F ortner Ma nor must be consistent with, inter alia , Section 811’s purpose of : Enabl[ing] persons with disabiliti es to live with dignity and independe nce within their communities by expanding t h e s up p ly of supportive housing that

. . . (1) is desig ned to acc ommodate the specia l needs of such persons; and (2) provides supportive service s that addre ss the individual health, mental health, and other needs of such pe rsons . . . . 42 U.S.C. § 8013(a). The Secre tary arg ues that his decision to fore close on F ortner Ma nor is consistent with national housing policie s for two re asons. See Def s.’ Mot. at 46. First, the r ecor d indicates that F ortner Ma nor wa s a vac ant and blig hted prope rty for a lmost five y ear s, and this frustrated the national housingpolicy of eliminating substandard a nd inadequate housing for lowincome individuals. Second, af ter wor king w ith NBC for se vera l y ear s to redeve lop Fortne r Manor unsuc cessf

ully , HUD de termined that the ne w owner ship of For tner Manor

was re quired to expediti ously

return the proper

ty to use for the disabled and e lderly population of New Orlea ns. Given HUD ’s broa d discretion in adva ncingnational housing policies and the f act that NB C is in default, the Court cannot c onclude that HU D’s for eclosure decision wa s arbitra ry or capr icious in light of the national housing policies . See V ictory Highway Vill. , 662 F.2d at 495
47(HUD “has br oad discre tion to choose its possibl e re medies . . . and the reby achie ve national housing obje ctives”)

. NB C provides no authority to support its unst ated pr esumption that HUD’s for eclosure decisions ar e ar

bitrary or ca pricious if they

are inconsistent with Congre ssional or state policies other than the afor ementioned na tional housing a cts. On this basis alone, the Court re jects NB C’s argument that HUD a cted c ontrary to national housing policie s beca use NB C fails to evaluate HUD’ s fore closure de cision under the r eleva nt national housing policie s. Even a ssuming arguendo that the source s relied upon by NB C are r eleva

nt in determining whether HUD’ s fore closure de cision was consistent with national housingpolicies, the Court cannot a g ree with NBC that HUD acte d arbitra rily or ca priciously in light of the a ctions taken afte r Hurr icane Katrina . First, NB C relies upon the Hur rica ne Rec overy

Act’s grant of $5.2 billion “for re pair, re habilitation, and rec onstruction . . . of the a ffor dable r ental housingstock (includingpublic and other HUD- assisted housing) in the impacted a rea s.” See 120 Stat. at 472. The Ac t also provides that HUD “may waive, or specify alternative require ments for, a ny provision of any

statute or re g ulation that the Secre tary administers in connec tion with the obligation by

the Secr etar

y or the use by

the re cipient of these funds or guara ntees . . . .” Id. at 472-73. NB C argues that the Hur rica ne Rec overy

Act conve y ed Cong ress’s intent that Sec tion 811 housing be prese rved. H oweve r, the Hur rica ne Rec overy

Act did not alter H UD’s mandate; it reinforc es HUD ’s discre tion. Further more, HU D’s dec ision to foreclose on F ortner Ma nor is consistent with the Act’s pur pose of incr easingthe amount of a ffor dable r ental housingbeca use HUD c oncluded that a

nother owne r could re store F ortner Ma nor more e x peditiously

. There fore , the Court finds that the Hurr icane Recove ry Act does not re nder H UD’s de cision to forec lose on
48For

tner Manor

arbitra ry or ca pricious. Second, NB C relies upon the DO D Appropr iations Act, and pa rticularly the Act’ s following languag e: “To the extent feasible the Sec reta ry of Housingand Ur

ban De velopment shall prese rve a ll housing within the are a dec lare d a major disaste r . . . re sulting fr om Hurrica ne Katrina or Rita that rec eived pr oject-ba sed assistance under . . . se ction . . . 811 of the CranstonGonzalez National Affor dable HousingAct . . . .” 119 Stat. at 2781. Ac cordingto NBC, fore closing on For

tner Manor

was a rbitrar y or ca pricious bec ause it fa iled to “pre serve ” Section 811 housing, a

nd there fore violated the DOD Appropriations Act. See Pl.’s Opp’n at 22-23. The Court disag ree s. In light of N BC’s de lay s in redeve loping F ortner Ma nor and la ck of f

unding, it

was re asonable for HU D to conclude that fore closing For tner Manor

and per mitti ngthe

succe ssful bidder to oper ate the pr operty as low income housing

would be the be st method for prese rvingFor

tner Manor

. SeeAR at 79 (May 2009 Notice of

For eclosure ) (pr oviding that the

succe ssful bidder on F ortner Ma nor “w ill, pursuant to 12 U.S.C . 3706(b)( 2)(A) , be re quired to operate the Projec t in accor dance with . . . 12 U.S.C. sec. 1715 l ”). Third, NB C relies upon the Ac tion Pl an, which pur portedly indicates that the r eplac ement of dama g ed re ntal housing is imperative to L ouisiana’s e conomic re cover y in the wake of Hurric ane K atrina. SeePl.’s Opp’n at 22-23. Ne ither par ty provided the Court with a c opy of, or a citation to, the Ac tion Pl an, and the ref ore the Court cannot re view this documents. B eca use NB C bears the burden of

provingthat HUD’ s actions wer e ar bitrary and ca pricious, the Court shall rejec t NBC’s c laim that HUD’s de cision to forec lose was a rbitrar y or ca pricious base d on the Action Plan. Finally , NB C relies upon: (1) the DHS Appropriations Act’s mandate that FEMA pr epar e 49a National Disaster HousingStrategy (“Strate g y ”); (2) Congr ess’ re quirement that the Strate g y “desc ribe plans f

or promotingthe re pair or r ehabilitation of existi nghousing;” 6 U.S.C. § 772(b)( 7); and (3) the fa ct that FE MA was a lleg edly late in completingthe Strateg y , seePl.’s Opp’n at 23-24. The Strate g y , acc ordingto NBC, evide nces Cong ress’ a cknowledgment of the importance of re habilitating r ental housingin the afte rmath of Hur rica ne Katrina. Id. Howeve r, NB C neither cites to, nor a rgues that, any

provision of the DHS Appropr iations Act perta ins to HUD. Ac cording ly , this argument fails for the same re asons as NB C’s previous ar guments: the DHS Appropriations Act did not preclude H UD fr om forec losing on de faulted pr operties. In conclusion, the Court finds that NB C has failed to e stablish that HUD’s dec ision to fore close F ortner Ma

nor wa s arbitra

ry or ca pricious in light of the rele vant national housing policies in eff

ect be fore or af

ter Hur rica ne Katrina. ii. HUD’ s decision to fore close wa s not arbitrar y or ca pricious in light of the a lleg ed disorg anization of fede ral a g encie s afte r Hurr icane Katrina

. NB C also claims that HUD a cted a rbitrar ily and ca priciously in decidingto forec lose on For tner Manor

beca use of: (1) known “bur eauc ratic r oadblocks;” ( 2) cr iticisms reg arding FEMA’ s handling of re cover y eff orts afte r Hurr icane Katrina ; (3) and the alleg edly “tempestuous” r elationship betwee n FEMA a nd HUD. SeePl.’s Opp’n at 25-27. NB C then argues that HUD ’s dec ision to declare NB C in viol ation of the Regulatory Agree ment in Aug ust 2007––two y ear s after

Hurric ane K atrina––w as unre asonable beca use the Strategy

indicates that homes damag ed by

a disaster “ofte n require more than 2 year s to repair or re build.” See FEMA, National Disaster

Housing Strateg y

(“Strate g y ”) 71 ( J an. 16, 2009), available at

50http:// www.f ema.g ov/pdf/emerg ency

/disasterhousing /NDHS-cor e.pdf) . For the re asons set for

th below, the Court finds NB C’s arguments to be without merit. First, althoug h HUD issued NB C’s first violation notice in Aug ust 2007, HUD did not actua lly decla re N BC in def

ault until March 2008, more than two and a half year s after

Hurric ane Katrina , AR at 61-62 (Ma rch 2008 D efa

ult Notice), a

nd did not schedule a

fore closure sa le until J uly 8, 2009, near ly

four year s after

Hurric ane K atrina, id. at 79-80 (Ma y 2009 Notice of For eclosure Sale). Reg ardle ss of the Strategy ’s re levanc y to HUD’s f

orec losure dec ision, the Court cannot find that HU D’s dec ision to hol d a for eclosure sale ne arly four year s after Hurric ane K atrina is ar

bitrary or ca pricious simply

beca use the Strategy

indicates that housing damag ed in a natural disaster g ener ally takes more than two y ear s to rebuild. See Strategy at 71. Second and mor e importantly , the log ic behind NB C’s argument reve als that its posit ion is untenable. Althoug h fra med in terms of a dminist rative diff iculties, NBC e ssentially

asks this Court for a de fense to Fortne r Manor ’s fore closure be cause Hurric ane K atrina da mag ed F ortner Manor. The Court cannot conc lude that HUD’ s decision to hold a fore close sale of F ortner Manor ne arly

four year s after

Hurric ane K atrina w as ar bitrary or ca pricious. To do so would require this Court t o g rant NB C a perpe tual defe nse to fore closure be cause there is no lim iting principle to NB C’s argument—i.e., NB C presents no per iod of time after which Hur

rica ne Katrina would no longe r excuse its noncompliance with its contractual oblig ations. See Pl.’s Opp’n at 25-27. As of the time the pa

rties filed their br iefs with the Court, NB C remains in defa ult of the Mortg ag e Agree ment and, as suc h, HUD “ has broa d discretion to choose its possi ble re medies . . . and ther eby

achie ve national housingobjectives.” Victory Highway Vill. , 662 F.2d at 495.
51Although “ [t ]he prompt enforc ement of the rig hts of the United States through HUD to a

fore closure a

nd sale . . . a

re c onsistent with national housing policy ,” id. , in this case, HUD waited, c hoosing instea d to enforc e its rig hts through a fore closure sa le nea

rly four year s after Hurric ane K atrina. Thr oug hout this period of time, as well as in its filings to this Court to date, NB C has never

claimed that it had c omplied with the Reg ulatory Ag ree ment or that it could cure its non-monetary

and monetar

y defa ults pursuant to 12 U.S.C. § 3709(a)(3), the reby saving For tner Manor

from for eclosure . In conclusion, the Court ca nnot find HUD’s de cision to hold a fore closure sa le for F ortner Ma nor, nea rly four year s after

Hurric ane K atrina, w as ar bitrary or capr icious due to “bure aucr atic roa dblocks,” c riticisms reg ardingFEMA’ s handingof Hurr icane Katrina , and the a lleg edly “tempestuous” r elationship betwee n FEMA a nd HUD. iii. HUD’ s fore closure de cision was not ar bitrary or ca pricious beca use of a n alleg ed fa ilure to consider all the information NB C and others pre sented to HUD

. NB C’s chief c omplaint is t hat HUD f ailed to consider

all of the infor

mation NBC and others submitted reg ardingNB C’s financingand re storation plans for F ortner Ma nor. SeePl.’s Opp’n at 9-10, 24, 28-33. This fa ilure, NB C avers, r ender ed HUD ’s dec ision to foreclose arbitra ry and ca pricious. See id. at 28-33. To be clea r, NB C does not claim that this information demonstrated that NBC wa s not in default or that, de spite NBC’s de fault, the Mortg ag e Ag ree ment forba de HUD from for eclosingon For tner Manor . Rather, NB C appea rs to claim that HUD’ s decision to proce ed with the for eclosure was a rbitrar y and ca pricious bec ause this information should have be en suff icient to meet HUD ’s re quest for a restoration plan. This argument is unconvincingfor se vera l rea sons.

52An ag ency ’s dec ision is arbitrary or ca pricious if: (i) it is counter to the e vidence befor e the ag ency

or is so implausible that it could not be ascribed to a differ ence of view or

the produc t of ag ency expertise; (ii) the ag ency entirely failed to c onsider an importa nt aspec t of the problem or issue; (iii) the ag ency

relied on f

actor s which Cong ress did not intend the ag ency to consider; or (iv) the decision otherw ise constitutes a cle ar e rror of judg ment. Motor VehicleMfrs. Ass’n , 463 U.S. at 43. In Marc h 2008, over two a nd a half y ear s after

Hurric ane K atrina, H UD first decla red N BC in def

ault beca use F ortner Ma

nor “r emain[ed] uninhabitable due to substandard conditions.” AR at 57. Even a ssuming that NB C met HUD’s re quirements for a re storation plan, NB C has never

indicated that it has the f unding ne cessa

ry to implement a restoration plan. Notably , even te n months after the Marc h 2008 Def ault Notice, Reve rend N oble indicated to HUD that NB C stil l did not have the funds ne cessa ry to restore For

tner Manor . Pl.’s Opp’n, Rev. Gable D ecl., Ex. H (L etter f rom Rever end Noble, Cha irman, NB C, to S haun Donova n, Sec’y , HUD ( J an. 12, 2009)) , at 1. NB C points t o no authority that require s HUD to allow F ortner Manor to languish in disrepair for y ear s while NB C attempts to procure f unding to r estore For tner Manor

and ther eby

meet its contrac tual obligations. NBC ca nnot rea sonably

claim that HUD ha d a contr actua l, statutory , or re g ulatory obligation to acce pt NBC’s r estoration plan in lieu of dec laringNB C in default. Ther efor e, HUD ’s dec ision to declare NB C in default was not arbitra ry or ca pricious eve n assuming N BC filed a n adequate re storation plan. After HUD de clar ed NB C in default in the Marc h 2008 Def ault Notice, “ [t ]he feder al policy to protect the tre asury

and promote the security of fe dera l investment . . . [ beca me] predominant.” OCCI

, 758 F.2d at 1163 (citation omitted). NB C sugg ests that HUD ha d an obligation to halt the forec losure bec ause N BC and othe rs re quested that it do so and HUD

53appea

red to be willing to def

er f orec losures if mortg ag ors submitted recove ry plans. Howe ver, these a re e quitable grounds for ha lting for eclosure , and “[e]quitable g rounds . . . ar e not a de fense to mortga g e for eclosure by HUD onc e def

ault occur s . . . .” Id. at 1165. Additionally , even assuming that NBC re ceive d funds from F EMA in J uly 2009 as it claims, see Pl.’s Opp’n at 25 (citingGable D ecl. ¶

69), NB C was alre ady

in defa ult at this t ime, and ther efor e HUD ’s dec ision to proce ed with the for eclosure despite this promised fundingis a wholly discretionar

y business judgme nt, see OCCI

, 758 F.2d at 1165 (“[A]ny further business judgme nts made by HUD in its continued prose cution of the for eclosure action ar e immateria l and collater al to HUD’ s decision to forec lose and, ther efor e, wholly discretionar

y .”). The ref

ore, the Court is also unable to find that HUD’ s decision to fore close on F ortner Ma nor once NB C was in defa ult was arbitra

ry or capr icious due to a fa ilure to consider the information NB C submit ted. For the af oreme ntioned rea sons, the Court concludes that HUD’s de cision to forec lose on For tner Manor

did not violate the APA, and ther efor e the Sec reta ry is entitled to summ ary judgme nt with respec t to Count s I Iand I I I

.

3. Count I V In Count I V, NB C seeks a pe rmane nt injunction enjoining the Secr etar y from selling For tner Manor

pursuant to a non-

judicial fore closure. Compl. ¶¶ 82- 88; see also id. at 17-18 (re questing relief

for Count IV). In deter mining whe ther a

perma nent injunction is appropriate , 2 9 courts conside r the followingfac tors: (1) the plaintiff’ s succe ss on the merits; (2) whe ther the
Although N BC’s Complaint reque sts relief in the f orm of a pr eliminary

hear ing, 2 9 Compl. at 17, NBC has not applied f or a pr eliminary

injunction “in a document se parate from the complaint,” L CVR 65.1(c), nor moved for a

hear ing on the preliminary injunction, L CVR 65.1(d). 54plaintiff will suffer irrepa rable injury

absent a n injunction; (3) whether , balanc ing the hardships, there is harm to the def

endants or othe r intere sted parties; a nd (4) the public inter est supports g rantingthe re quested injunction. Hi-Tech Pharm acal Co., Inc. v . U.S. Food &Drug Admin. , 587 F. Supp. 2d 13, 17 (D.D .C. 2008) (citing Nichols v. Truscott , 424 F. Supp. 2d 124, 143 (D.D.C. 2006)) . Be cause NB C has not succe eded on the merits of its claims, it is not entitled to perma nent injunctive re lief. Ac cording ly , the Court shall g rant the Sec reta ry ’s motion for summary judgme nt with respec t to CountI V. IV. CONCLUSION For the fore g oing r easons, the Court sha ll GRANT Fe dera l Defe ndants’ [21] Motion to Dismiss t he Complaint, or, Alternatively for Summary

J udg ment and DEN Y Plaintiff’s construe d motion for jurisdictional discovery . Specifica lly , the Court shall GRANT F eder al Def endants’ motion to di smiss L illey

as a de fenda

nt for lac k of per sonal jurisdiction. Additionally , the Court shall GRANT the Sec reta ry ’s motion to dis miss NBC’s claims that HUD discriminated ag ainst NB C at the reque st of non-minority org anizations and singled out NB C for for eclosure . The Court shall GRANT the Secr etar y ’s alter native motion for summary judgme nt as to NBC’s

rema ining c laims. An appropr iate orde r ac companies this Memora ndum Opinion.

Date: Ma rch 31, 2011 /s/ COLLE EN KOLLAR-K OTEL LY United States District J udg e

55