Thiel v. United States Department of Agriculture

Filing 62

ORDER ADOPTING FINDINGS AND RECOMMENDATIONS 53 granting in part and denying in part 45 Motion to Dismiss for Lack of Jurisdiction. Signed by Judge Richard F. Cebull on 3/14/2012. (EMA)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
BILLINGS DIVISION

ANNETTE L. THIEL, d/b/a
SWEET VALLEY PRODUCE,

)
)
)
Plaintiff,
)
)
vs.
)
)
)
)
ANN M. VENEMAN,
)
SECRETARY OF THE UNITED
)
STATES DEPARTMENT OF
)
AGRICULTURE, FARM
)
SERVICE AGENCY (“FSA”),
)
LAWRENCE NAYES, Individually )
and as agent of Defendant FSA,
)
JEFFREY JANSHEN, Individually )
and as agent of the Defendant FSA, )
)
Defendants.
)
______________________________ )

CV-09-168-BLG-RFC-CSO

ORDER ADOPTING FINDINGS
AND RECOMMENDATIONS
OF U.S. MAGISTRATE JUDGE

On October 12, 2011, United States Magistrate Judge Carolyn Ostby entered
her Findings and Recommendations in this case (Doc. # 53). Magistrate Judge

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Ostby recommends this Court grant in part and deny in part Defendants’ Motion to
Dismiss for lack of subject matter jurisdiction under Rule 12(b)(1) and for failure
to state a claim under Rule 12(b)(6).
Upon service of a magistrate judge’s findings and recommendation, a party
has 14 days to file written objections. 28 U.S.C. § 636(b)(1). In this matter,
Plaintiff has filed objections to the Findings and Recommendation and Defendants
have filed a response to those objections.
When a party objects to any portion of the Magistrate's Findings and
Recommendation, the district court must make a de novo determination of that
portion of the Magistrate's report. 28 U.S.C. § 636(b)(1)(B); McDonnell Douglas
Corp. v. Commodore Bus. Mach. Inc., 656 F.2d 1309, 1313 (9th Cir.1981).
After an extensive review of the record and applicable law and having determined
de novo those parts of the magistrate judge's findings and recommendation to
which Plaintiff has objected, this Court finds Magistrate Judge Ostby’s Findings
and Recommendation are well grounded in law and fact and adopts them in their
entirety.
Accordingly, IT IS HEREBY ORDERED Defendants’ Motion to Dismiss
for lack of subject matter jurisdiction under Rule 12(b)(1) and for failure to state a

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claim under Rule 12(b)(6) is GRANTED IN PART and DENIED IN PART in a
manner consistent with Magistrate Ostby’s Findings and Recommendations.
DISCUSSION
1. CONTINUING VIOLATIONS DOCTRINE
Plaintiff objects to Magistrate Ostby’s ruling that all conduct under
Plaintiff’s Equal Credit Opportunity Act claim, arising before December 31, 2007,
is barred by the two-year statute of limitations. Magistrate Ostby concluded that
the statute of limitations period was not tolled by the continuing violations
doctrine, the discovery rule or fraudulent concealment. Regarding the continuing
violations doctrine, Plaintiff alleges that because of continuing violations, she has
suffered disparate treatment, disparate impact based on discrimination. Further,
Plaintiff alleges that in declining to apply the continuing violations doctrine,
Magistrate Ostby erroneously misconstrued the rulings in Havens Realty Corp. v.
Coleman, 455 U.S. 363, 380 (1982) and Ledbetter v. Goodyear Tire and Rubber
Company, 550 U.S. 618, 624 (2007).
In Havens and Ledbetter, the Supreme Court held that acts constituting a
continuing violation should be treated differently from one discrete act of
discrimination. Although Havens involved the Fair Housing Act, the Supreme
Court held that where a plaintiff “challenges not just one incident of conduct
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violative of the Act, but an unlawful practice that continues into the limitations
period, the complaint is timely filed when it is filed within [the statutory period] of
the last asserted occurrence of that practice.” Id. at 380-381. In Ledbetter, the
Supreme Court held that if a plaintiff does not timely file charges for discrete acts
of discrimination, subsequent nondiscriminatory acts that give present effect to
past discriminatory acts do no result in new violations. Id., 550 U.S. at 628.
After reviewing the Second Amended Complaint, this Court agrees with
Magistrate Ostby, that at all times, Plaintiff alleges different individual acts that
when viewed together, do not constitute a discriminatory pattern. In addition,
because all allegations of unlawful conduct by Defendants fall under the the
definition of “discrete acts,” they were not only individually actionable, they also
had to be brought within the applicable statutory limitations period. Nat'l R.R.
Passenger Corp. v. Morgan, 536 U.S. 101, 110–11 (2002).
Moreover because each discriminatory act was separately actionable, the
Defendants’ alleged discriminatory acts do not constitute a discriminatory pattern
or practice as to preserve and tie untimely claims to substantially related timely
claims. Morgan, 536 U.S. at 110-112. This Court agrees with Magistrate Ostby’s
conclusion that any effects alleged by Plaintiff that arises from these untimely
discrete acts cannot give rise to any current legal action. Ledbetter, 550 U.S. at
628.
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Lastly, to the extent that Plaintiff relies on Defendant FSA’s Civil Rights
Action Team Report to establish disparate treatment, that Report was published
five years before Plaintiff’s first allegation of discrimination by Defendant. As
such, it is not sufficiently temporal in time as to establish disparate impact for the
purposes of overcoming the statutory limitations. Other than the CRAT report,
Plaintiff provides no sufficiently plausible allegations of pattern, policy or
practices that would support disparate impact or disparate treatment based on
discrimination. For the foregoing, reasons, this Court adopts Magistrate Ostby’s
Findings and Recommendations denying the application of the “continuing
violations” doctrine.
2. DISCOVERY DOCTRINE
Plaintiff objects to Magistrate Ostby’s determination that the discovery doctrine
does not toll the ECOA’s statute of limitations period. Plaintiff contends that she
did not discover her alleged injuries until December 2009 and therefore, the
applicable statute of limitations should be tolled.
Relying Archer v. Nissan Motor Acceptance Corp., 550 F.3d 506, 507-508, (5th
Cir. 2008) and its interpretation of TRW Inc. v. Andrews, 534 U.S. 19, 27 (2001),
Magistrate Ostby concluded that discovery rule did not apply to statutes that key
the “start of limitations period to the date of the occurrence of the violation.”

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Archer, 550 F.3d at 509. The ECOA statute of limitations, as codified at 15 U.S.C.
§ 1691e(f), states that “[n]o such action shall be brought later than two years from
the date of the occurrence of the violation.” Consequently, contrary to the
Plaintiff’s contention, it is when Plaintiff’s alleged injuries occurred rather than
when she discovered them, that triggers the statute of limitations period. Other
than conclusory allegations and discussions of inapplicable cases, Plaintiff
provides no meritorious arguments that would lead this Court to a different
conclusion. This Court finds that Magistrate Ostby correctly found that the
discovery doctrine did not toll Plaintiff’s claims.
3. FRAUDULENT CONCEALMENT
Next, Plaintiff contends that Magistrate Ostby erred when she concluded that
the ECOA’s limitations period should not be equitably tolled because Defendants
fraudulently concealed the truth regarding Plaintiff’s claims. As noted by
Magistrate Ostby, fraudulent concealment is based on the principle that a party
should not benefit from its own wrong doing. Collins v. Gee West Seattle LLC, 631
F.3d 1001, 1004 (9th Cir.2011). Further, fraudulent concealment focuses on
actions taken by the defendant in preventing a plaintiff from filing suit. Estate of
Amaro v. City of Oakland, 653 F3d 808, 813 (9th Cir. 2011).

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Magistrate Ostby noted that the elements for fraudulent concealment or
equitable estoppel are (1) knowledge of the true facts by the party to be estopped,
(2) intent to induce reliance or actions giving rise to a belief in that intent, (3)
ignorance of the true facts by the relying party, and (4) detrimental reliance.
Watkins v. United States Army, 875 F.2d 699, 709 (9th Cir.1989). Further, where
estoppel is sought against a government agency, “there must be affirmative
misconduct (not mere negligence) and a serious injustice outweighing the damage
to the public interest of estopping the government.” Id., 875 F.2d at707-708.
In response, Plaintiff contends that Magistrate Ostby erred by only focusing on
the alleged instances of fraud cited in her brief in opposition. Plaintiff contends
that those instances cited in her brief were only examples of fraudulent
concealment and that Magistrate Ostby should have sua sponte reviewed her
Second Amended Complaint for more examples of fraudulent concealment.
This Court finds Plaintiff’s reasoning to lack merit. First, on a motion to
dismiss, the Plaintiff bears the burden of presenting a cognizable legal theory or
allege sufficient facts that support a cognizable legal theory. Balistreri v. Pacifica
Police Dept., 901 F.2d 696, 699 (9th Cir. 1988). The burden is not on the Court to
search the Complaint or the record to find legal or factual support for Plaintiff’s
Complaint.

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Secondly, Magistrate Ostby correctly found that Defendants did not
fraudulently conceal from Plaintiff the fact that other loan applicants were not
asked to supply the same financial information. Further, Magistrate Ostby found
that Plaintiff could not establish any injury based on fraudulent concealment
because Plaintiff received the loan at issue without any additional financial
information. More importantly, Plaintiff has failed to sufficiently establish how
her allegations constitute a “serious injustice outweighing the damage to the public
interest of estopping the government.” Amaro, 653 F3d at 813.
For the foregoing reasons, this Court finds that Magistrate Ostby correctly
concluded that the Plaintiff cannot rely on fraudulent concealment in order to toll
the ECOA’s limitation period.
4. NAP CLAIM
Next, Plaintiff claims that Magistrate Ostby erred when she denied
Plaintiff’s ECOA claim based on denial of NAP benefits. Magistrate Ostby noted
that the ECOA defines “credit” as “the right granted by a creditor to a debtor to
defer payment of debt or to incur debts and defer its payment or to purchase
property or services and defer payment therefor.” 15 U.S.C. § 1691a(d). The
Noninsured Crop Disaster Assistance Program (NAP) “is designed to help reduce
production risks faced by producers of commercial crops or other agricultural

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commodities. NAP will reduce financial losses that occur when natural disasters
cause a catastrophic loss of production or where producers are prevented from
planting an eligible crop.” 7 C.F.R. § 1437.1(a).
A plain reading of NAP reveals that it does not fall within the definition of
credit as contemplated by the ECOA. Other than conclusory statements and
legally unsupported arguments, Plaintiff has failed to establish that NAP creates a
creditor relationship or involves a deferral of payment. This Court concludes that
Magistrate Ostby correctly found that Plaintiff’s ECOA claim cannot be based on
Plaintiff’s denial of NAP benefits.
5. DISABILITY
Lastly, Plaintiff argues that Magistrate Ostby erred when she found that
Plaintiff’s carpal tunnel condition did not constitute a protected class under the
ECOA. A reading of the ECOA makes it unlawful for a creditor to discriminate
against an applicant on the basis of “race, color, religion, national origin, sex or
marital status, or age.” 15 U.S.C. § 1691(a). Because the ECOA does not
contemplate disabled persons, Magistrate Ostby correctly concluded that Plaintiff
cannot rely on her disability as support for her ECOA claim.
///

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CONCLUSION
After having reviewed Plaintiff’s Objections to Magistrate Ostby’s Findings
and Recommendations, this Court finds all of her objections to be without merit.
This Court concludes that Magistrate Judge Ostby’s Findings and
Recommendation reflect a clear understanding of the issues of the Defendants’
Motion to Dismiss and provides sound legal reasoning in support of her
conclusions. Therefore, after a de novo review, the Court determines the Findings
and Recommendation of Magistrate Judge Ostby are well grounded in law and fact
and HEREBY ORDERS they be adopted in their entirety.
For the foregoing reasons, IT IS HEREBY ORDERED that Defendants’
Motion to Dismiss (Doc. # 45) be GRANTED IN PART and DENIED IN PART in
a manner consistent with Magistrate Ostby’s Findings and Recommendations
(Doc. #53). The Clerk of Court shall notify the parties of the making of this Order.
DATED this 14th day of March, 2012.
/s/ Richard F. Cebull
RICHARD F. CEBULL
U. S. DISTRICT JUDGE

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