Court Opinion

ID: 3156596
Source: CourtListenerOpinion
Date Created: 2015-11-20 21:02:18.949617+00
Date Added: 2024-06-11T11:58:33.376055
License: Public Domain

In the United States Court of Federal Claims
                                 No. 15-50 C
                         (Filed: November 20, 2015)

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CHRISTOPHER L. KANNADY,

                     Plaintiff,
                                             42 U.S.C. § 3374(f); prohibition
v.                                           of judicial review; RCFC
                                             12(b)(1)
THE UNITED STATES,

           Defendant.
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       Eric S. Montalvo, Washington, DC, for plaintiff.

       Jessica L. Cole, Trial Attorney, United States Department of Justice,
Civil Division, Commercial Litigation Branch, Washington, DC, with whom
were Benjamin C. Mizer, Principal Deputy Assistant Attorney General, Robert
E. Kirschman, Jr., Director, Bryant G. Snee, Deputy Director.

                                  OPINION

       Plaintiff Christopher Kannady, currently a Major in the Air National
Guard, challenges a decision by the Deputy Under Secretary of Defense to deny
reimbursement for mortgage interest, taxes, and hazard insurance premiums
allegedly owed to him under 42 U.S.C. § 3374 (2012). Pending are defendant’s
motion to dismiss pursuant to Rules of the United States Court of Federal
Claims (“RCFC”) 12(b)(1) and (6) and plaintiff’s motion for judgment on the
administrative record. Oral argument is deemed unnecessary. Because the
governing statute, 42 U.S.C. § 3374, precludes judicial review of the denial,
defendant’s motion to dismiss pursuant to RCFC Rule 12(b)(1) is granted.

                              BACKGROUND

        In 1966, Congress passed the Demonstration Cities and Metropolitan
Development Act, which authorized the Homeowner’s Assistance Program
(“HAP”). HAP was created as a financial safety net for eligible military and
civilian federal employees whose property value had been adversely affected
by specific events such as base closures or a reduction-in-scope of operations.
See 42 U.S.C. § 3374; see also 32 C.F.R. § 239.1(a) (2011).

        In 2009, as part of the American Recovery and Reinvestment Act
(“ARRA”), Public Law 111-5, Congress temporarily expanded HAP to provide
assistance to additional categories of claimants including service member
homeowners undergoing Permanent Change of Station moves during the
mortgage crisis. See 32 C.F.R. § 239.1. This ARRA-enlarged program is
known as “Expanded HAP.” Id. Applicants who qualified for Expanded HAP
because of permanent reassignment needed to postmark their applications no
later than September 30, 2012. See 32 C.F.R. § 239.6 (a)(4). As amended by
Section 1001 of the ARRA, 42 U.S.C. § 3374 authorizes the Secretary of
Defense, under specified conditions, to either (1) purchase a home that an
eligible applicant is unable to sell; (2) reimburse the applicant for the closing
costs plus an amount not to exceed the difference between the applicable
percentage of the Prior Fair Market Value (“PRMV”) and the sales price; or (3)
pay the applicant’s legally enforceable liabilities directly associated with a
foreclosed mortgage. See 32 C.F.R. § 239.5(a).

        In 2006, plaintiff purchased a home near the Marine Corps Recruit
Depot in Parris Island, South Carolina while on active duty with the Marine
Corps. In 2008, plaintiff received Permanent Change of Station (“PCS”)
orders, which transferred him to the Pentagon in Washington, D.C. In light of
his PCS orders, plaintiff applied for assistance from Expanded HAP on June 23,
2009. Eventually1 , plaintiff found a private buyer, and the Army determined
that the gross amount due to plaintiff was $203,186.40 pursuant to 32 C.F.R.

1
 Although plaintiff and defendant both state that the government acquired title
to plaintiff’s home on June 23, 2010, the facts in the record do not support that
allegation. Rather, the plaintiff’s contract to sell his home establishes that he
sold his home to a private buyer on December 31, 2009. See PA 6. Although
it appears that plaintiff originally requested “government acquisition” of his
home in his original June 23, 2009, application for Expanded HAP, subsequent
developments must have paved the way for a private party to purchase the
home on December 31, 2009. Therefore, the Navy agreed to reimburse
plaintiff for certain losses “not to exceed the difference between the applicable
percent of the PFMV and the sales price.” 32 C.F.R. § 239.5 (a)(2). In
plaintiff’s memorandum in opposition to defendant’s motion to dismiss,
plaintiff acknowledges that he “did sell his house to a private party . . . .” Pl.’s
Opp. 9 (emphasis in original).

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§ 239.5 (a)(2). See PA 13. Plaintiff, however, believed that he was also entitled
to reimbursement for additional categories of home-related expenses.

       On July 23, 2010, plaintiff filed an appeal with the Deputy Under
Secretary of Defense for Installations & Environment, asserting that the Army
owed him for the mortgage interest, taxes, and hazard insurance premiums that
he paid from the date of receipt of the application for benefits through the date
the government acquired his property. See PA 23. Plaintiff alleged that the
Army owed him an additional sum of approximately $15,500.00. See id. On
May 2012, the Office of the Under Secretary of Defense denied his appeal. See
PA 32.

        On January 20, 2015, plaintiff filed the instant complaint, alleging that
the Secretary’s administration of the HAP is discriminatory against military
service members and that the handing of his HAP application was arbitrary and
capricious in that it denied him reimbursement for mortgage interest, property
taxes, and hazard insurance premiums paid between June 23, 2009 and June 23,
2010.

                                DISCUSSION

        Defendant moved to dismiss plaintiff’s claims for lack of subject matter
jurisdiction and for failure to state a claim upon which relief can be granted.
Pursuant to 12(b)(1), defendant moved to dismiss plaintiff’s reimbursement
claim because the statute authorizing HAP and Expanded HAP explicitly
precludes judicial review of a benefit determination. Defendant argues that the
language of 42 U.S.C. § 3374(f) clearly evinces Congress’s intent to prevent
judicial review of the Secretary’s determinations. The statute provides that “all
the determinations and decisions . . . by the Secretary of Defense regarding such
payments and conveyances and the terms and conditions under which they are
approved or disapproved, shall be final and conclusive and shall not be subject
to judicial review.” 42 U.S.C. § 3374(f).

       In plaintiff’s Opposition to Defendant’s Motion to Dismiss, plaintiff
acknowledges that the authorizing statute precludes judicial review of the
Secretary’s determinations, but endeavors to distinguish his complaint from a
request to review a determination by the Secretary by emphasizing that he
already received approval for HAP funds. It was only later that his
reimbursement request was denied. As such, he “is not asking this Court to
review his benefit determination or the factual underpinnings of the matter.”
Pl.’s Opp. 5. He asserts that the bar against judicial review found in the

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applicable statute does not apply because he “is simply asking the Court to
correct the government’s failure of payment for benefits it determined [he] is
eligible to receive.” Pl.’s Opp. 6. Plaintiff notes that the Navy made the proper
initial decision to grant him the funds through Expanded HAP but then erred
by not reimbursing him for the full range of expenses. In sum, plaintiff asserts
that the question of law raised by his claim – whether the Secretary misapplied
the governing regulations to his reimbursement claim – is a proper subject for
this court’s review.

        Generally, there is a presumption in favor of judicial review. See Abbott
Labs. v. Gardner, 387 U.S. 136, 141 (1967). The presumption, however, is
overcome “whenever the congressional intent to preclude judicial review is
‘fairly discernible in the statutory scheme.’” Block v. Cmty. Nutrition Inst., 467
U.S. 340, 351 (1984) (quoting Data Processing Service v. Camp, 397 U.S. 150,
157 (1970)). In other words, if there is a “persuasive reason to believe” that
Congress purposed to preclude judicial review, then courts will not review the
matter. See Abbot Labs., 387 U.S. at 140.

       Here, the applicable portion of 42 U.S.C. § 3374, which is the statute
authorizing HAP and Expanded HAP, provides the following:

       The title to any property acquired under this section, the
       eligibility for, and the amounts of, cash payable, and the
       administration of the preceding provisions of this section, shall
       conform to such requirements, and shall be administered under
       such conditions and regulations, as the Secretary of Defense may
       prescribe. Such regulations shall also prescribe the terms and
       conditions under which payments may be made and instruments
       accepted under this section, and all the determinations and
       decisions made pursuant to such regulations by the Secretary of
       Defense regarding such payments and conveyances and the terms
       and conditions under which they are approved or disapproved,
       shall be final and conclusive and shall not be subject to judicial
       review.

42 U.S.C. § 3374 (f). In light of the comprehensive prohibition in the statute,
we agree with defendant that the statute specifically prohibits our review.
Although plaintiff endeavors to side-step the statute’s bar against judicial
review, he fails to demonstrate that his claim does not qualify as a
“determination[] and decision[] made pursuant to such regulations by the
Secretary of Defense regarding such payments and conveyances and the terms

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and conditions under which they are approved or disapproved.” Id. The statute
clearly states that the Secretary’s decisions are immune from judicial review,
and as such, this court does not have authority to subvert Congress’s
unambiguous intent.

        We now turn to plaintiff’s claim that the Secretary’s application of HAP
and its associated regulations discriminated against military service members.
Defendant moved to dismiss this claim for lack of subject matter jurisdiction
because this court does not have jurisdiction to entertain such a claim. See
Wildman v. United States, 28 Fed. Cl. 494, 495 (1993) (citing Anderson v.
United States, 22 Cl. Ct. 178, 179 n.2 (1990), aff’d, 937 F.2d 623 (Fed. Cir.
1991)). Also, defendant notes that plaintiff “does not cite a statute upon which
he bases [his civil rights] allegation.” Def.’s Motion to Dismiss 9. Rather than
contesting this argument further, plaintiff “concedes that this Court does not
possess subject matter jurisdiction to hear the Civil Rights claim raised in his
complaint.” Pl.’s Opp. 7. Therefore, we grant defendant’s motion to dismiss
plaintiff’s civil rights claim for lack of subject matter jurisdiction.

                                CONCLUSION

        Because it is clear that this court lacks jurisdiction to hear plaintiff’s
reimbursement claims, it is unnecessary to make a determination regarding
defendant’s 12(b)(6) motion to dismiss for failure to state a claim upon which
relief can be granted.2 We grant defendant’s motion to dismiss for lack of
jurisdiction. The Clerk is directed to dismiss the complaint for lack of
jurisdiction and to enter judgment accordingly. No costs.

                                                   s/ Eric G. Bruggink
                                                   ERIC G. BRUGGINK
                                                   Judge

2
 Defendant moved to dismiss pursuant to RCFC Rule 12(b)(6) because plaintiff
allegedly relied upon an outdated Army Corps of Engineers circular as grounds
for his claim for additional reimbursements. We do not reach the merits on this
argument because the motion is moot in light of defendant’s successful 12(b)(1)
motion.

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