Clark v. United States of America Rural Housing Service
Filing
97
OPINION MEMORANDUM AND ORDER - IT IS HERBY ORDERED that Defendant United States of America, on behalf of the United States Department of Agriculture, Rural Housing Service (USDA)s Motion to Dismiss, [Doc. No. 45 ], is GRANTED. IT IS FURTHER ORDERED that Defendant John Robinsons Motion to Dismiss or in the Alternative, Motion to Stay the Proceedings, [Doc. No. 68 ], is GRANTED. IT IS FURTHER ORDERED that Defendant Ann L. Mells Motion to Dismiss, [Doc. No. 81 ], is GRANTED. IT IS FURTHER ORDERED that this matter is DISMISSED.. Signed by District Judge Henry Edward Autrey on 2/13/19. (KJS)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
VANCE CLARK,
Plaintiff,
v.
UNITED STATES OF AMERICA, on
behalf of the UNITED STATES
DEPARTMENT OF AGRICULTURE
Defendant.
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Case No. 4:18CV652 HEA
OPINION, MEMORANDUM AND ORDER
This case is before the Court on Defendant United States of America, on
behalf of the United States Department of Agriculture, Rural Housing Service
(“USDA”)’s Motion to Dismiss, [Doc. No. 45], Defendant John Robinson’s
Motion to Dismiss or in the Alternative, Motion to Stay the Proceedings, [Doc. No.
68], and Defendant Ann L. Mell’s Motion to Dismiss, [Doc. No. 81].1 For the
reasons set forth below, the Motions will be granted.
Facts and Background
On March 1, 2018, plaintiff Vance Clark (“Plaintiff”), acting pro se, filed
this lawsuit in the St. Francois County, Missouri, Circuit Court against the United
States of America (the “United States”) concerning a property Plaintiff purchased
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Plaintiff has filed a number of Motions. In that all Defendants are dismissed from this action,
Plaintiff’s Motions are rendered moot.
in 2009 using a loan from the United States Department of Agriculture, (“USDA”).
The United States, on behalf of the USDA (“Defendant”) subsequently removed
this case to federal court pursuant to 28 U.S.C. §1442(a)(1).
In November 2009, Plaintiff purchased property located at 3416 Hildebrecht
Road, Doe Run, Missouri 63637 (the “Hildebrecht Property”). To finance the
purchase, Plaintiff sought and obtained a $122,000 loan from the USDA. Plaintiff
executed a Deed of Trust in favor of the USDA, which the USDA recorded with
the St. Francois County Recorder of Deeds at Document No. 2009R-10926, and rerecorded at Document 2010R-00327.
As a condition of the loan, Plaintiff was required to obtain property
insurance. Plaintiff applied for and received a homeowner’s insurance policy from
Farm Bureau Town and Country Company of Missouri (hereinafter, “Farm
Bureau”). In September 2010, the Hildebrecht Property suffered damage from fire.
Plaintiff submitted a claim to Farm Bureau, which denied coverage.
On December 28, 2010, Farm Bureau filed a lawsuit in Missouri state court
naming Plaintiff and the USDA. See Mo. Case No. 10SF-CC00289 (St. Francois
County) (the “Farm Bureau Lawsuit”). Farm Bureau alleged that on the
application for insurance, Plaintiff concealed the fact that he had prior felony
convictions. Farm Bureau alleged that the USDA, as the mortgagee on the
Hildebrecht Property, was “subject to the same terms, exclusions, and conditions
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that apply to the named insured.” The United States counter-claimed, alleging
Farm Bureau owed the United States for the property loss under the homeowner’s
policy because the United States was the mortgagee on the property.
Farm Bureau and the USDA settled the claims between them, whereby Farm
Bureau agreed to pay the USDA an undisclosed amount of money. On February
21, 2014, the USDA and Farm Bureau agreed to a voluntary dismiss the USDA
from the Farm Bureau Lawsuit.
The USDA applied the settlement proceeds to the outstanding balance of
Plaintiff’s loan, although the settlement was insufficient to satisfy the outstanding
principal balance. Farm Bureau is still prosecuting the Farm Bureau Lawsuit
against Plaintiff in the state court.
Plaintiff stopped making payments to the USDA on the remaining balance of
the $122,000 loan. On February 21, 2012, the USDA sent via certified mail an
acceleration letter pursuant to the promissory note signed by Plaintiff, demanding
full payment of the outstanding loan balance and accrued interest. When Plaintiff
failed to comply, the USDA contacted the caretaker of Plaintiff’s property,
notifying him that the USDA intended to foreclose on Plaintiff’s property.
On April 30, 2018, the Substitute Trustee under the Deed of Trust conducted
a foreclosure sale of the Hildebrecht Property. The foreclosure sale netted a total of
eleven thousand dollars ($11,000.00) in proceeds. Because the foreclosure sale did
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not satisfy the outstanding principal balance on the loan, there were no excess
proceeds to remit to Plaintiff.
On August 22, 2018, Plaintiff filed a motion for leave to file a fourth
amended petition. Plaintiff filed his fourth amended petition on August 27, 2018.
In the fourth amended petition, Plaintiff names Defendants United States, John
Robinson, and Ann L. Mell.
Plaintiff raises five counts in his fourth amended petition. In Counts I and II,
Plaintiff requests a declaratory judgment interpreting provisions of the
homeowner’s contract between Plaintiff and the Farm Bureau, and alleges the
USDA breached the terms of that contract. Count III alleges the USDA
wrongfully seized $1,240.00 of Plaintiff’s tax refund, and alleges that Plaintiff
sustained injury when the United States removed his state court litigation to this
Court. Plaintiff demands the United States pay him damages because the United
States removed this case to federal court.
In Count IV, Plaintiff once again alleges that the United States breached the
terms of his homeowner’s insurance policy. He further alleges that the defendants
“had a meeting of minds in circumventing Plaintiff’s rights,” when it removed this
case to federal court prior to him having a hearing before the state-court judge.
Plaintiff further alleges that the foreclosure of his property was wrongful and
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fraudulent. In Count V, Plaintiff alleges that the United States and the individual
defendants engaged in a “conspiracy” causing Plaintiff damages.
Defendant USDA moves to dismiss for lack of subject matter jurisdiction.
Defendant Mell moves to dismiss for lack of subject matter jurisdiction and for
failure to state a claim. Defendant Robinson moves to dismiss or alternatively stay
this proceeding pursuant to the Colorado River Doctrine.
Legal Standards
Subject Matter Jurisdiction
“In order to properly dismiss for lack of subject matter jurisdiction under
Rule 12(b)(1), the complaint must be successfully challenged on its face or on the
factual truthfulness of its averments.” Titus v. Sullivan, 4 F.3d 590, 593 (8th Cir.
1993) (Osborn v. United States, 918 F.2d 724, 729 n.6 (8th Cir. 1990)). “In a facial
challenge to jurisdiction, the court presumes all of the factual allegations
concerning jurisdiction to be true and will grant the motion only if the plaintiff
fails to allege an element necessary for subject matter jurisdiction.” Young Am.
Corp. v. Affiliated Comput. Servs., 424 F.3d 840, 843-44 (8th Cir. 2005) (citing
Titus, 4 F.3d at 593). In a factual challenge to jurisdiction, “there is substantial
authority that the trial court is free to weigh the evidence and satisfy itself as to the
existence of its power to hear the case.” Osborn, 918 F.2d at 730. “In short, no
presumptive truthfulness attaches to plaintiff’s allegations, and the existence of
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disputed material facts will not preclude the trial court from evaluating for itself
the merits of jurisdictional claims.” Iowa League of Cities v. EPA, 711 F.3d 844,
861 (8th Cir. 2013) (citing Osborn, 918 F.2d 724, 730). The plaintiff has the
burden of proving jurisdiction exists. Kennedy Bldg. Assocs. v. Viacom, Inc., 375
F.3d 731, 745 (8th Cir. 2004) (citing Cty. of Los Angeles v. Davis, 440 U.S. 625,
631, 99 S.Ct. 1379, 59 L.Ed.2d 642 (1979)). “Once the evidence is submitted, the
district court must decide the jurisdictional issue, not simply rule that there is or is
not enough evidence to have a trial on the issue.” Osborn, 918 F.2d at 730.
“Jurisdictional issues, whether they involve questions of law or of fact, are
for the court to decide.” Id. at 729. “Moreover, because jurisdiction is a threshold
question, judicial economy demands that the issue be decided at the outset rather
than deferring it until trial, as would occur with denial of a summary judgment
motion.” Id.
In “a factual attack on the jurisdictional allegations of the complaint, the
court may receive competent evidence such as affidavits, deposition testimony, and
the like in order to determine the factual dispute.” Id. In a factual challenge, “no
presumptive truthfulness attaches to the plaintiff’s allegations, and the existence of
disputed material facts will not preclude the trial court from evaluating for itself
the merits of jurisdictional claims. Moreover, the plaintiff will have the burden of
proof that jurisdiction does in fact exist.” Id. at 729 (citation omitted).
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Sovereign Immunity
“Absent a waiver, sovereign immunity shields the Federal Government and
its agencies from suit.” FDIC v. Meyer, 510 U.S. 471, 475 (1994). “Sovereign
immunity is jurisdictional in nature. Indeed, the terms of [the United States’]
consent to be sued in any court define that court’s jurisdiction to entertain the suit.”
Id. (citation omitted).
“A waiver of the Federal Government’s sovereign immunity must be
unequivocally expressed in statutory text and will not be implied.” Lane v. Pena,
518 U.S. 187, 192 (1996) (citation omitted). “To sue the United States, [the
plaintiff] must show both a waiver of sovereign immunity and a grant of subject
matter jurisdiction.” VS Ltd. P’ship v. Dept. of Housing & Urban Dev., 235 F.3d
1109, 1112 (8th Cir. 2000). If sovereign immunity applies, the Court lacks subject
matter jurisdiction, and the matter must be dismissed without prejudice. Roth v.
United States, 476 F. App’x 95, 95 (8th Cir. 2012).
Failure to State a Claim—Fed. R. Civ. P. 12(b)(6)
A complaint must contain “a short and plain statement of the claim showing
that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). To satisfy this
requirement, a plaintiff must plead “enough facts to state a claim to relief that is
plausible on its face.” Corrado v. Life Inv'rs Ins. Co. of Am., 804 F.3d 915, 917
(8th Cir. 2015) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007) ).
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“A claim has facial plausibility when the plaintiff pleads factual content that allows
the court to draw the reasonable inference that the defendant is liable for the
misconduct alleged.” Barton v. Taber, 820 F.3d 958, 964 (8th Cir. 2016) (quoting
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). “Threadbare recitals of the elements
of a cause of action, supported by mere conclusory statements, do not suffice.”
Zink v. Lombardi, 783 F.3d 1089, 1098 (8th Cir. 2015) (quoting Iqbal, 556 U.S. at
678), cert. denied, 135 S. Ct. 2941 (2015). The complaint’s factual allegations
must be “sufficient to ‘raise a right to relief above the speculative level.’”
McDonough v. Anoka Cty., 799 F.3d 931, 946 (8th Cir. 2015) (quoting Twombly,
550 U.S. at 555). The Court must accept factual allegations as true, but it is not
required to accept any “legal conclusion couched as a factual allegation.” Brown v.
Green Tree Servicing LLC, 820 F.3d 371, 373 (8th Cir. 2016) (quoting Iqbal, 556
U.S. at 678). Thus, “[a] pleading that offers ‘labels and conclusions’ or ‘a
formulaic recitation of the elements of a cause of action will not do.’ ” Ash v.
Anderson Merchandisers, LLC, 799 F.3d 957, 960 (8th Cir. 2015) (quoting Iqbal,
556 U.S. at 678), cert. denied, 136 S. Ct. 804 (2016).
On a motion to dismiss, courts must rule “on the assumption that all the
allegations in the complaint are true,” and “a well-pleaded complaint may proceed
even if it strikes a savvy judge that actual proof of those facts is improbable, and
‘that a recovery is very remote and unlikely.’” Twombly, 550 U.S. at 555, 556
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(quoting Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)). “Determining whether a
complaint states a plausible claim for relief ... [is] a context-specific task that
requires the reviewing court to draw on its judicial experience and common sense.”
Mickelson v. Cty. of Ramsey, 823 F.3d 918, 923 (8th Cir. 2016) (alteration in
original) (quoting Iqbal, 556 U.S. at 679).
To survive a Rule 12(b)(6) motion to dismiss, a complaint must set forth a
short and plain statement of the claim showing that the pleader is entitled to relief.
Fed. R. Civ. P. 8(a)(2). This standard does not require detailed factual allegations,
but it demands more than an unadorned accusation. Iqbal, 556 U.S. at 678. For the
purposes of a motion to dismiss a court must take all the factual allegations in the
complaint as true, but is not bound to accept as true a legal conclusion couched as a
factual allegation. Twombly, 550 U.S. at 555.
Colorado River Doctrine
Federal courts ordinarily have a “virtually unflagging obligation” to exercise
their jurisdiction. Colo. River Water Cons. Dist. v. United States, 424 U.S. 800,
817 (1976). But the Declaratory Judgment Act, 28 U.S.C. § 2201, grants district
courts “unique and substantial discretion in deciding whether to declare the rights
of litigants” or to abstain in deference to a parallel state suit. Wilton v. Seven Falls
Co., 515 U.S. 277, 286 (1995). This decision is “controlled by the court's personal
judgment,” Aetna Cas. & Sur. Co. v. Jefferson Trust & Sav. Bank of Peoria, 993
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F.2d 1364, 1366 (8th Cir. 1993) (internal quotations and citation omitted), and
guided by “considerations of judicial economy, considerations of practicality and
wise judicial administration, and with attention to avoiding gratuitous interference
with state proceedings.” Lexington Ins. Co. v. Integrity Land Title Co., 721 F.3d
958, 967 (8th Cir. 2013) (internal quotations and citations omitted).
The Eighth Circuit has instructed that the “key consideration for the district
court is ‘to ascertain whether the issues in controversy between the parties to the
federal action ... can be better settled by the state court’ in light of the ‘scope and
nature of the pending state court proceeding.’” Evanston Ins. Co. v. Jones, 530
F.3d 710, 713 (8th Cir. 2008) (quoting Capitol Indem. Corp. v. Haverfield, 218
F.3d 872, 874 (8th Cir. 2000)). A district court must dismiss a declaratory action
that a state court can better resolve, because “it would be uneconomical as well as
vexatious” to proceed under such circumstances. Haverfield, 218 F.3d at 874-75
(quoting Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491, 495 (1942)).
The Colorado River abstention doctrine permits federal district courts to
decline to exercise jurisdiction only “when [1] parallel state and federal actions
exist and [2] exceptional circumstances warrant abstention.” Fru–Con Constr.
Corp. v. Controlled Air, Inc., 574 F.3d 527, 534 (8th Cir. 2009).
Because federal courts have a “virtually unflagging obligation ... to exercise
the jurisdiction given them,” the Colorado River abstention is appropriate only in
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“exceptional circumstances” where the surrender of federal jurisdiction is
supported by “the clearest of justifications.” Moses H. Cone Mem'l Hosp. v.
Mercury Const. Corp., 460 U.S. 1, 25-26 (1983). In determining whether a specific
case presents “exceptional circumstances,” a court must “tak[e] into account both
the obligation to exercise jurisdiction and the combination of factors counselling
against that exercise.” Colorado River, 424 U.S. at 818-19.
Where parallel state and federal proceedings exist, the court examines the
following six, non-exhaustive factors to determine whether exceptional
circumstances are present that warrant abstention:
(1) whether there is a res over which one court has established jurisdiction;
(2) the inconvenience of the federal forum; (3) whether maintaining separate
actions may result in piecemeal litigation, unless the relevant law would
require piecemeal litigation and the federal court issue is easily severed; (4)
which case has priority—not necessarily which case was filed first but a
greater emphasis on the relative progress made in the cases; (5) whether
state or federal law controls, especially favoring the exercise of jurisdiction
where federal law controls; and (6) the adequacy of the state forum to
protect the federal plaintiff's rights.
Federated Rural Elec. Ins. Corp. v. Ark. Elec. Coops, Inc., 48 F.3d 294, 297 (8th
Cir. 1995). These factors are not intended to be applied as a “mechanical
checklist,” but should be weighed “in a pragmatic, flexible manner with a view to
the realities of the case at hand.” Spectra Commc'ns Grp., LLC v. City of Cameron,
Mo., 806 F.3d 1113, 1121 (8th Cir. 2015). When examining the factors, “the
balance [is] heavily weighted in favor of the exercise of jurisdiction.”
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Discussion
Defendant USDA and Defendant Mell in her Official Capacity
Defendants USDA and Mell in her official capacity are protected by
sovereign immunity. Plaintiff has failed to identify any applicable statute in which
the USDA has waived sovereign immunity for the USDA and Defendant Mell in
her official capacity. See, e.g., Kriegel v. U.S. Dept. of Agric., No. 2:17-CV-00216D-BP, 2018 WL 3598774, at *2 (N.D. Tex. June 29, 2018) (recommending
dismissal of claims against USDA based on sovereign immunity, because “Plaintiff
has not alleged or otherwise shown that Congress has waived the Defendants’
sovereign immunity as to the claims asserted in his Complaint”), Report and
Recommendation adopted, No. 2:17-CV-216-D, 2018 WL 3586401 (N.D. Tex.
July 25, 2018) (dismissing claims against USDA) .
Defendant USDA and the claims against Defendant Mell in her official
capacity, are dismissed from this action.
Defendant Mell in her Individual Capacity2-Failure to State a Claim
In Bivens, the Supreme Court created an implied cause of action based
on a Fourth Amendment violation. Bivens v. Six Unknown Named Agents of Fed.
Bureau of Narcotics, 403 U.S. 388, 397 (1971). The Court subsequently found the
2
Defendant Mell claims that service on her is ineffective because Plaintiff failed to serve the
Attorney General or the United States Attorney for the Eastern District of Missouri as required
by Rule 4(i)(3) of the Federal Rules of Civil Procedure. In that Defendant Mell has substantively
challenged the adequacy of Plaintiff’s claims against her, the Court will not address the service
of process issues.
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Bivens remedy available for violations of an individual’s rights under the equal
protection component of the Fifth Amendment Due Process Clause and for
deliberate indifference to a serious medical condition under the Eighth
Amendment. See Davis v. Passman, 442 U.S. 228, 230 (1979); Carlson v. Green,
446 U.S. 14, 17–19 (1980). “These three cases—Bivens, Davis, and Carlson—
represent the .only instances in which the Court has approved of an implied
damages remedy under the Constitution itself.” Ziglar v. Abbasi, 137 S. Ct. 1843,
1855 (2017).
In Ziglar, the Court was faced with claims from detainees held on
immigration violations after the September 11, 2001 terrorist attacks. Plaintiffs’
suit challenged the official policies resulting in their detention and the conditions
of confinement they endured while detained. Id. at 1852–53. The Court concluded
that “expanding the Bivens remedy is now a ‘disfavored’ judicial activity.” Id. at
1857.
It held that federal courts should exercise caution before extending the
remedy to claims that are meaningfully different than “the three Bivens claims the
Court has approved in the past: a claim against FBI agents for handcuffing a man
in his own home without a warrant [Bivens]; a claim against a Congressman for
firing his female secretary [Davis]; and a claim against prison officials for failure
to treat an inmate’s asthma [Carlson].” Id. at 1860.
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The recognition of a cause of action is context-specific, and the Court has
established a rigorous inquiry that courts must use before implying a Bivens cause
of action in a new context. See Wilkie v. Robbins, 551 U.S. 537, 550 (2007). First,
courts must ascertain whether a plaintiff’s claims arise in a new Bivens context. “If
the case is different in a meaningful way from previous Bivens cases decided by
[the Supreme Court], then the context is new.” Ziglar, 137 S. Ct. at 1859. The
Court held that
A case might differ in a meaningful way because of the rank of the officers
involved; the constitutional right at issue; the generality or specificity of the
official action; the extent of judicial guidance as to how an officer should
respond to the problem or emergency to be confronted; the statutory or other
legal mandate under which the officer was operating; the risk of disruptive
intrusion by the Judiciary into the functioning of other branches; or the
presence of potential factors that previous Bivens cases did not consider.
Id. at 1860. If the context is new, then the court must ask whether “any alternative,
existing process for protecting the interest amounts to a convincing reason for the
Judicial Branch to refrain from providing a new and freestanding remedy in
damages.” Wilkie, 551 U.S. at 550. Finally, courts must also analyze “any special
factors counseling hesitation before authorizing a new kind of federal litigation,”
otherwise known as the “special factors analysis.” Id. “The Court’s precedents now
make clear that a Bivens remedy will not be available if there are special factors
counseling hesitation in the absence of affirmative action by Congress.” Ziglar,
137 S. Ct. at 1857. The Supreme Court has not defined the phrase “special factors
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counseling hesitation,” but the Court has observed that the “inquiry must
concentrate on whether the Judiciary is well suited, absent congressional action or
instruction, to consider and weigh the costs and benefits of allowing a damages
action to proceed.” Id. at 1857–58. Put more simply, to be a “‘special factor
counseling hesitation,’ a factor must cause a court to hesitate before answering that
question in the affirmative.” Id. at 1858. Plaintiff has failed to present any reasons
why this Court should expand Bivens to include this action wherein Plaintiff is
seeking a Declaratory Judgment on the propriety of the foreclosure action and the
settlement of Farm Bureau and the USDA.
Defendant Robinson
Defendant Robinson moves to dismiss this action against him based on the
Colorado River Doctrine. Based on the factors delineated by the Eighth Circuit
Court of Appeals, the Court agrees. The Circuit Court of St. Francois County,
Missouri has established jurisdiction over the issues raised herein in the case filed
by Farm Bureau against Plaintiff and the USDA, Plaintiff has answered in that
matter and has filed counterclaims, and has brought a claim against Defendant
Robinson in that action. Factor one favors abstention.
The property is located in St. Francois County, the foreclosure occurred in
St. Francois County, and the insurance policy was applied for and issued in St.
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Francois County. This federal forum is clearly less convenient that the State
Forum. Factor two favors abstention.
Abstention is favored under Factor three. All of the parties are present in the
State action, whereas Farm Bureau is not present in this Court, and its presence
may be necessary for a full determination of the issues raised. Likewise, having
both actions proceed may result in inconsistent judgments. The resulting
piecemeal litigation can be avoided by proceeding solely in the State Court.
The State Court case has priority over this action. It has been pending since
2010, with Plaintiff filing his counterclaims in September, 2015. This action was
filed in March, 2018, thus pending a far shorter time than the State action; the State
action has advanced significantly further that the case has in this forum. Factor
four favors abstention.
State law controls the issues in this case completely. There are no federal
law issues before either court. Factor five favors abstention.
Likewise, Plaintiff’s federal rights are not at issue. All of Plaintiff’s claims
against Defendant Robinson arise under Missouri law. Factor six favors
abstention.
All factors to be considered under the Colorado River Doctrine favor
abstention. The most appropriate forum for Plaintiff’s claims is the parallel action
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currently pending in St. Francois County, Missouri. As such, the Court will
abstain from exercising jurisdiction over Plaintiff’s declaratory judgment action.
Conclusion
Based upon the foregoing analysis, the Motions to Dismiss are well taken.
This action will be dismissed.
Accordingly,
IT IS HERBY ORDERED that Defendant United States of America, on
behalf of the United States Department of Agriculture, Rural Housing Service
(“USDA”)’s Motion to Dismiss, [Doc. No. 45], is GRANTED.
IT IS FURTHER ORDERED that Defendant John Robinson’s Motion to
Dismiss or in the Alternative, Motion to Stay the Proceedings, [Doc. No. 68], is
GRANTED.
IT IS FURTHER ORDERED that Defendant Ann L. Mell’s Motion to
Dismiss, [Doc. No. 81], is GRANTED.
IT IS FURTHER ORDERED that this matter is DISMISSED.
Dated this 13th day of February, 2019.
___________________________________
HENRY EDWARD AUTREY
UNITED STATES DISTRICT JUDGE
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