IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 14-20523

ALLIED HOME MORTGAGE CORPORATION; JAMES C. HODGE, 

 Plaintiffs - Appellants

v.

UNITED STATES DEPARTMENT OF HOUSING AND URBAN 

DEVELOPMENT; JULIAN CASTRO, in his official capacity as Secretary of 

Housing and Urban Development, 

 Defendants - Appellees

Appeal from the United States District Court

for the Southern District of Texas

USDC No. 4:11-CV-3864

Before JOLLY and DENNIS, Circuit Judges, and RAMOS, District Judge.

∗

PER CURIAM:**

James C. Hodge and his company, Allied Home Mortgage Corporation,

(collectively, “the appellants”) petition the court to determine whether the 

Department of Housing and Urban Development (“HUD”) acted unlawfully in 

temporarily suspending them from business with the government. During the 

 

∗ District Judge of the Southern District of Texas, sitting by designation. 

** Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not 

be published and is not precedent except under the limited circumstances set forth in 5TH 

CIR. R. 47.5.4.

United States Court of Appeals

Fifth Circuit

FILED

July 22, 2015

Lyle W. Cayce

Clerk

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pendency of the case, HUD withdrew the suspensions. We now hold that the 

case is moot and we therefore dismiss it.1

I.

Under title II of the National Housing Act of 1934, HUD is authorized to 

insure participating mortgage lenders against loss on loans made to 

homebuyers. See 12 U.S.C. § 1709. If the borrower of a mortgage insured 

under title II defaults, HUD reimburses the lender for the amount still owed 

on the loan. Thus, under the title II insurance program, it is the government, 

not the lender, that bears the risk of default. The program is intended to 

promote mortgage lending and homeownership. During the period relevant to 

this case, the appellants participated in the title II program as lenders of 

government-insured mortgages.

At some point, the record is unclear when, the Department of Justice

(“DOJ”) opened an investigation into the appellants. Following the 

investigation, DOJ concluded that the appellants were responsible for serious, 

widespread and long-running violations of HUD rules and regulations. DOJ 

prepared a lawsuit and, before filing, communicated its findings to HUD. 

(Currently, the DOJ case is pending as United States v. Allied Home Mortg.

Corp., No. 4:12-CV-2676 (S.D. Tex.).) On November 1, 2011, HUD suspended 

the appellants from further business with it, effective immediately.2 The 

suspensions were to be temporary, to last until the conclusion of the DOJ 

 

1 In addition to Allied Home Mortgage Corporation, Hodge also owned the similarlynamed Allied Home Mortgage Capital Corporation. That company, however, is not a party 

to this litigation and, under our resolution of this appeal, is unnecessary to discuss further. 

We also note that, following the commencement of this case, Allied Home Mortgage 

Corporation changed its name to AllQuest Home Mortgage Corporation, and Allied Home 

Mortgage Capital Corporation changed its name to Americus Mortgage Corporation.

2 We need not describe the misconduct DOJ found and HUD cited for the suspensions, 

as it is irrelevant to the mootness inquiry on which our decision is based.

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lawsuit and debarment proceedings (used to bar a person from government 

business for a specified period).3

The following day, November 2, the appellants brought this lawsuit 

against HUD, seeking a declaration under the Administrative Procedure Act 

that the suspensions were unlawful and an injunction against enforcement of 

them. On November 15, the district court granted the appellants a preliminary 

injunction and ordered HUD to refrain from enforcing the suspensions pending 

final decision in the case. Allied Home Mortg. Corp. v. Donovan, 830 F. Supp. 

2d 223 (S.D. Tex. 2011).

In May 2012, with the case still pending, HUD withdrew the original 

suspensions and issued two new notices to the appellants. With respect to 

Allied Home Mortgage Corporation, HUD stated that it was “considering 

taking an administrative action” against it for specified reasons, and the 

company was invited to respond. With respect to Hodge, HUD stated that it 

was proposing his debarment for a period of five years, to be imposed after 

further proceedings, and he, too, was invited to respond. Neither notice 

imposed a suspension pending further proceedings. HUD then moved the 

district court to dismiss the case as moot because the appellants were no longer 

suspended. The court declined. Allied Home Mortg. Corp. v. Donovan, No. 

4:11-CV-3864, 2012 WL 3276978 (S.D. Tex. Aug. 8, 2012).4

On August 5, 2014, the district court reached its final decision and, 

contrary to the prior preliminary injunction, upheld the suspensions. Allied 

 

3 For HUD’s debarment authority, see 42 U.S.C. § 3535(d) (“The Secretary . . . may 

make such rules and regulations as may be necessary to carry out his functions, powers, and 

duties.”), 2 C.F.R. § 2424.10 (“HUD adopts, as HUD policies, procedures, and requirements 

for nonprocurement debarment and suspension, the OMB guidance in subparts A through I 

of 2 CFR part 180, as supplemented by this part.”), and the regulatory provisions referenced

therein.

4 The court did, however, vacate the preliminary injunction. Id. at *6.

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Home Mortg. Corp. v. Donovan, No. 4:11-CV-3864, 2014 WL 3843561 (S.D. Tex. 

Aug. 5, 2014).

This appeal followed.

II.

A.

Article III of the Constitution authorizes the federal courts to adjudicate 

“Cases” and “Controversies.” U.S. Const. art. III, § 2, cl. 1. “A case becomes 

moot—and therefore no longer a ‘Case’ or ‘Controversy’ for purposes of Article 

III—‘when the issues presented are no longer “live” or the parties lack a legally 

cognizable interest in the outcome.’ ” Already, LLC v. Nike, Inc., 133 S. Ct. 

721, 726-27 (2013) (quoting Murphy v. Hunt, 455 U.S. 478, 481 (1982) (per 

curiam)). “No matter how vehemently the parties continue to dispute the 

lawfulness of the conduct that precipitated the lawsuit, the case is moot if the 

dispute ‘is no longer embedded in any actual controversy about the plaintiffs’ 

particular legal rights.’ ” Id. at 727 (quoting Alvarez v. Smith, 558 U.S. 87, 93

(2009)).

Here, the appellants seek a declaration that HUD’s suspensions of them 

were unlawful and invalid. But the suspensions have been withdrawn, and 

the appellants are no longer suspended from business with HUD.5 The dispute 

in this case is therefore no longer embedded in an actual controversy about the 

appellants’ legal rights. Absent an exception to the mootness doctrine, the case 

is moot and must be dismissed. See Alejandrino v. Quezon, 271 U.S. 528, 532 

(1926) (challenge to suspension from government office moot after suspension 

concluded); ITT Rayonier Inc. v. United States, 651 F.2d 343 (5th Cir. Unit B 

 

5 The appellants take issue with HUD’s description of the suspensions as having been 

“formally withdrawn.” Their objection, however, is unclear. For their part, the appellants 

describe the suspensions as having been “effectively withdrawn” or simply “withdrawn.” We 

see no meaningful distinction in the adverb choice. It is undisputed that the suspensions are 

not in effect.

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1981) (same, suspension of eligibility for government contracting);

Westmoreland v. Nat’l Transp. Safety Bd., 833 F.2d 1461, 1463 (11th Cir. 1987)

(same, license suspension); Fed. Sav. & Loan Ins. Corp. v. Hykel, 468 F.2d 

1386, 1388 (3d Cir. 1972) (same, administrative suspension).

B.

The appellants contend that the case is not moot under the voluntarycessation doctrine. That rule holds that “a defendant cannot automatically 

moot a case simply by ending its unlawful conduct once sued.” Already, LLC, 

133 S. Ct. at 727; see also Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. 

(TOC), Inc., 528 U.S. 167, 189 (2000); City of Mesquite v. Aladdin’s Castle, Inc., 

455 U.S. 283, 289 (1982). “Otherwise, a defendant could engage in unlawful 

conduct, stop when sued to have the case declared moot, then pick up where 

he left off, repeating this cycle until he achieves all his unlawful ends.” 

Already, LLC, 133 S. Ct. at 727. Given that concern, once the defendant has 

ceased its challenged conduct, the plaintiff’s challenge to such conduct is moot 

only if the defendant “bears the formidable burden of showing that it is 

absolutely clear the allegedly wrongful behavior could not reasonably be 

expected to recur.” Id. (quoting Friends of the Earth, Inc., 528 U.S. at 190). 

When the defendant is the government, however, its burden is lighter. We 

treat the government’s cessation of allegedly wrongful conduct “with some 

solicitude” given that the government, unlike private litigants, is presumed to 

act in good faith. Sossamon v. Texas, 560 F.3d 316, 325 (5th Cir. 2009); accord

Marcavage v. Nat’l Park Serv., 666 F.3d 856, 861 (3d Cir. 2012); Ragsdale v. 

Turnock, 841 F.2d 1358, 1365 (7th Cir. 1988).

Here, HUD has represented that it will not reinstate the rescinded 

suspensions, and based on the circumstances of this case we believe it. The 

appellants have represented to the court that, as a result of the government’s 

actions against them, their lines of credit dried up and their business was 

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“destroyed” and is now without employees or assets. The appellants claim that 

this is all the result of the temporary suspensions alone. That is doubtful, 

though. The suspensions aside, the DOJ’s lawsuit is proceeding, as are HUD’s 

additional administrative proceedings, and all charge the appellants with the 

same, or at least substantially similar, misconduct as the suspensions did. The 

suspensions were enjoined between November 15, 2011 and August 8, 2012, 

and credit did not return to the appellants during that period. (At least, the 

appellants have not stated or shown otherwise.) The reasonable inference, 

then, is that so long as HUD is charging the appellants with serious 

misconduct and a final determination is pending, the appellants will be in no 

position to resume mortgage lending, whether suspended as a legal matter or 

not. In such circumstances, HUD has nothing to gain by reinstating temporary 

suspensions pending final determination. And, of course, once final 

determination is reached, the issue will be settled, and there will be no 

possibility of HUD reinstating the preliminary suspensions. In these 

circumstances, we find it absolutely clear that there is no reasonable 

probability that the withdrawn suspensions will be reinstated.6

Even so, the appellants appear to argue that HUD may engage in 

unspecified subsequent administrative actions different than the suspensions 

at issue here. This argument misses the mark. The voluntary-cessation 

inquiry focuses on the potential for recurrence of the conduct challenged in the 

case or at least “sufficiently similar” conduct. Ne. Fla. Chapter of Associated 

 

6 The fact that HUD withdrew the suspensions only after the district court 

preliminarily enjoined them cuts against HUD’s claim of permanent cessation. Cf. Sossamon, 

560 F.3d at 325 (“The good faith nature of Texas’s cessation is buttressed by the fact that 

Sossamon did not obtain relief below. Had the trial court granted the injunction, we might 

view any attempt to force a vacatur of such a determination (particularly in favor of a pro se 

prisoner) with a jaundiced eye.”). Even so, we conclude based on the totality of the 

circumstances that there is no reasonable probability that the suspensions will be reinstated.

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Gen. Contractors of Am. v. City of Jacksonville, 508 U.S. 656, 662 & n.3 (1993). 

The potential for a future dispute of another nature, presenting other issues, 

is immaterial. Should such a subsequent dispute arise, it is a matter for 

another lawsuit, not a reason to keep this one alive. See Texas Office of Pub. 

Util. Counsel v. F.C.C., 183 F.3d 393, 414 (5th Cir. 1999) (“We cannot assume 

jurisdiction to decide a case on the ground that it is the same case as one 

presented to us, when it is admitted that it is not and when it presents different 

issues.”) (citation omitted). To the extent that the appellants seek to use this

case, which until now has focused on the suspensions, as a vehicle to challenge 

HUD’s debarment proceedings against Hodge and anticipated proceedings 

against Allied Home Mortgage Corporation, it is obvious that the issues are 

unripe. We do not yet know what, if any, action HUD will take against the 

appellants following such proceedings, and it is impossible to anticipate upon 

what administrative record such action would be based and what justifications

would be offered. See Hooker Chem. Co., Ruco Div. v. E.P.A., 642 F.2d 48 (3d 

Cir. 1981) (after agency withdrew challenged orders and reserved the right to 

take other enforcement action, case was unripe); cf. Gulf Oil Corp. v. Simon, 

502 F.2d 1154 (Temp. Emer. Ct. App. 1974) (per curiam) (after challenged 

regulations superseded with new ones, case was moot, and challenge to new 

regulations should be brought in new case).

C.

Next, the appellants invoke the collateral-consequences doctrine. Under 

that rule, when the plaintiff’s primary injury (here, the suspensions) has 

ceased, the case is not moot if the challenged conduct continues to cause other 

harm (i.e., “collateral consequences”) that the court is capable of preventing. 

Dailey v. Vought Aircraft Co., 141 F.3d 224, 227 (5th Cir. 1998) (citing Sibron 

v. New York, 392 U.S. 40, 53-59 (1968)). The question is whether there is a 

continuing collateral consequence that provides the plaintiff with a “concrete 

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interest” in the case and for which “effective relief” is available. Id. (citing 

Firefighters Local Union No. 1784 v. Stotts, 467 U.S. 561, 571 (1984)).

Here, the appellants appear to contend that the suspensions harmed 

their reputations, the harm was not remedied after the suspensions were 

withdrawn, and such continuing reputational harm is itself a collateral 

consequence that sustains the case as a live controversy. It is true, as the 

appellants note, that this court has denied mootness based on reputational 

harm before. Connell v. Shoemaker, 555 F.2d 483 (5th Cir. 1977). We will not 

do so here, however. Assuming without deciding that Connell remains good 

law, cf. Spencer v. Kemna, 523 U.S. 1, 16 n.8 (1998), and accepting the 

appellants’ claims that the withdrawn suspensions continue to harm their 

reputations, we nevertheless do not think that this court could remedy the 

harm. As described above, the suspensions aside, the appellants are charged 

with the same or substantially similar misconduct in other HUD 

administrative proceedings and the DOJ lawsuit. If the suspensions harmed 

the appellants’ reputations, it is clear that the pending other proceedings do 

the same. To declare the withdrawn suspensions invalid, then, would not fix 

the harm; the other public and unresolved allegations of misconduct would 

continue to sustain the same reputational injury. Therefore, assuming that 

the withdrawn suspensions continue to cause reputational harm that provides 

the appellants with a concrete interest in the outcome of this case, we 

nevertheless conclude that effective relief is not available. Accord Lebron v. 

Rumsfeld, 670 F.3d 540, 562 (4th Cir. 2012) (because plaintiff had been 

convicted of terrorism crimes, designation as an “enemy combatant” did not 

cause sufficient additional stigmatic harm to suffice as an injury for standing).

Additionally, the appellants contend that two regulations, 2 C.F.R. 

§ 180.860(c) and 24 C.F.R. § 202.5(j)(3) create collateral consequences that keep 

this case a live controversy. The former provides that in debarment 

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proceedings, the debarring official may consider “a pattern or prior history of 

wrongdoing.” The latter provides that mortgage lenders are ineligible for 

approval as HUD-insured lenders if they are “subject to unresolved findings as 

a result of HUD or other governmental audit, investigation, or review.” We 

disagree that either provision creates collateral consequences that keep this 

case a live controversy, for the reasons that follow.

2 C.F.R. § 180.860(c) addresses “wrongdoing.” Apparently, the 

appellants fear that HUD will sometime in the future deem the withdrawn

suspensions at issue in this case as evidence of the appellants’ “wrongdoing.” 

We, however, think this fear is speculative. Importantly, the appellants’ 

historic conduct is at issue in the pending DOJ lawsuit and administrative 

proceedings, and in those proceedings, the appellants may or may not disprove 

the charge that their conduct was wrongful. The result of those proceedings, 

therefore, may or may not create a collateral consequence under § 180.860(c);

but we see no basis for the withdrawn suspensions to have any bearing on the 

issue. The appellants have pointed to no precedent, and we have found none, 

for deeming withdrawn suspensions as evidence of “wrongdoing” under 

§ 180.860(c). Because we conclude that the possibility of such is too 

speculative, we reject the argument that § 180.860(c) creates a collateral 

consequence that keeps this case a live controversy. See generally ITT 

Rayonier Inc., 651 F.2d at 345 (the speculative potential for collateral 

consequences is insufficient to overcome mootness); Bailey v. Southerland, 821 

F.2d 277 (5th Cir. 1987) (per curiam) (same).

24 C.F.R. § 202.5(j)(3) addresses “unresolved findings as a result of HUD 

or other governmental audit, investigation, or review.” The appellants

apparently fear that if we do not adjudicate the lawfulness of the withdrawn 

suspensions, then HUD’s findings underlying those suspensions will be 

“unresolved,” which will, under § 202.5(j)(3), preclude the appellants from 

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future approval for HUD-insured lending. This, too, we find speculative. The 

appellants have pointed to no precedent, and we have found none, for HUD 

rendering a case moot through its unilateral withdrawal of a lender’s 

temporary suspension and then deeming the lender ineligible for insured 

lending on the basis of the resultant “unresolved findings.” Because this, too, 

is speculative, we reject the argument that § 202.5(j)(3) creates a collateral 

consequence that keeps this case a live controversy. Moreover, we note that if 

HUD will ever point to the withdrawn suspensions at issue in this case as a 

basis for withholding approval of the appellants for HUD-insured lending, then 

the appellants can seek judicial review of that decision. But for now, the issue 

is unripe. 

D.

The appellants make one final argument that warrants response. They

claim that the case is not moot because HUD has not “reversed or repaired the 

economic harm experienced by them over the past several years.” The

argument is without merit. That plaintiffs be “made whole” is not an element 

of mootness. Of course, if the case involved a claim for money damages, the 

case would not be moot until recompense was had, absent unusual 

circumstances. See, e.g., Liberles v. Cook Cnty., 709 F.2d 1122, 1127 (7th Cir. 

1983) (case not moot where plaintiffs sought and had not yet received backpay). 

But the appellants here do not seek money damages, nor can they under the 

statute that provides their cause of action. See 5 U.S.C. § 702 (waiving 

sovereign immunity for claims “seeking relief other than money damages”). 

Even if we proceeded to the merits of the case and awarded the appellants all 

relief they seek, that would not “reverse or repair” their economic losses. 

Absent a legal claim for economic compensation, the desire for such does not 

constitute a concrete interest that keeps the case alive. See Ashcroft v. Mattis, 

431 U.S. 171 (1977) (after plaintiff abandoned claim for damages, no longer a 

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live case or controversy for court to decide constitutionality of challenged 

statute).

III.

The appellants have a live controversy with the government as to the 

pending administrative actions and lawsuit against them. Their challenge to 

the withdrawn temporary suspensions, however, is moot, and neither the 

voluntary-cessation doctrine, the collateral-consequences doctrine, nor any 

other argument presented in this appeal provides otherwise. The district 

court’s judgment on the merits is VACATED, the case is REMANDED, and the 

district court is DIRECTED to dismiss it.

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