Wise et al v. United States Department of Agriculture et al
ORDER GRANTING 13 Motion to Dismiss, GRANTING 32 Motion for Leave to File a Motion for Stay, DENYING 33 Motion to Stay, and DENYING AS FUTILE 39 Motion for Leave to File a Second Amended Complaint. Signed by US District Judge Terrence W. Boyle on 10/24/2014. Copy mailed to pro se plaintiffs, via US Mail, to 2251 Swift Creek School Road, Whitakers, NC, 27891. (Fisher, M.)
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
EDDIE WISE and DOROTHY
UNITED STATES DEPARTMENT
OF AGRICULTURE, et al.,
This matter is before the Court on defendants' motion to dismiss [DE 13], plaintiffs'
motion for leave [DE 32], plaintiffs' motion to stay [DE 33], and plaintiffs' motion for leave to
file a second amended complaint [DE 39]. For the following reasons, defendants' motion to
dismiss is GRANTED, plaintiffs' motion for leave is GRANTED, and plaintiffs' remaining
motions are DENIED.
Plaintiffs, Eddie and Dorothy Wise, Nash County, North Carolina residents, bring this
action against the United States Department of Agriculture ("USDA") and several individuals in
their official and individual capacities, alleging various state and federal claims, arising out of
the circumstances surrounding the denial of a farm operating loan.
On April 28, 2014, defendants moved to dismiss, or in the alternative, for summary
judgment. [DE 13]. On May 7, 2014,pro se plaintiffs were provided with notice oftheir right to
respond and the requirements of Rule 56 on January 30, 2007. See Roseboro v. Garrison, 528
F.2d 309 (4th Cir. 1975). [DE 16]. After several extensions of time, plaintiffs responded to the
motion to dismiss on August 26, 2014. On August 29, 2014, plaintiffs filed a notice of
interlocutory appeal [DE 31] along with a motion for leave to file a motion to stay [DE 32] and a
motion to stay the proceedings pending the interlocutory appeal [DE 33]. Then, on September
29, 2014, plaintiffs' filed their motion for leave to file the second amended complaint. [DE 39].
Throughout this litigation pro se plaintiffs' have sought to slow down the resolution of
this matter by seeking extensions of time to respond to matters and filing numerous motions of
PLAINTIFFS' MOTION FOR LEAVE TO FILE MOTION TO STAY [DE 32].
Plaintiffs' motion for leave to file their motion to stay the case pending the outcome of
their interlocutory appeal is unnecessary. However, as plaintiffs appear pro se, the Court
presumes that they acted out of an abundance of caution in petitioning the Court for permission
to file the motion to stay. Petitioners' motion for leave to file is granted. The Court now
considers the motion to stay [DE 33].
PLAINTIFFS' MOTION TO STAY [DE 33].
Plaintiffs filed their notice of interlocutory appeal seeking "interlocutory review of the
court's denial of hearing of qualified immunity." [DE 31 at 1]. Plaintiffs now seek to stay the
case pending the resolution of that appeal. [DE 33 at 1]. Defendants oppose the stay. [DE 38].
Plaintiffs contend that Local Rules 18 and 21 (b) and Federal Rule of Civil Procedure 8 all
authorize a stay of this matter. Further, they argue that the stay is requested in good faith and will
maximize judicial economy. The Court disagrees. It is unclear to exactly which rules plaintiffs
attempt to cite, but none of the rules they cite to in their motion are pertinent to the issue at hand.
Further, plaintiffs seek to delay a ruling on a motion to dismiss that was filed on April 28, 2014.
That motion to dismiss only argues qualified immunity as one of many reasons that this action
should be dismissed and the Court can rule on the motion without addressing qualified
immunity. Even if the Court were to use qualified immunity as a basis to dismiss the case,
plaintiffs could appeal that ruling in the normal, non-interlocutory, fashion and would suffer no
prejudice. In short, a delay of this matter at this stage in the proceedings to allow for the
resolution of an interlocutory appeal on the issue of denial of a hearing on the question of
qualified immunity would be an example of anything but judicial economy. There is simply
nothing that justifies a stay of this case and plaintiffs' motion is denied. The Court now considers
the motion to dismiss.
MOTION TO DISMISS [DE 13].
Defendants' move the Court to dismiss, or in the alternative, for summary judgment.
Defendants first move to dismiss pursuant to FED. R. Civ. P. 12(b)(5) for insufficient service of
process. [DE 14 at 10]. Defendants indicate that there is no proof that plaintiffs properly served
the United States by serving the office of the United States Attorney for the Eastern District of
North Carolina pursuant to Rule 4(i)(l)(A). Further, defendants indicate that they are unable to
determine whether individual defendants Mike Huskey or Paula Nicholls were properly served
pursuant to Rules 4(i)(2-4 ). On April 18, 2014, the Court sent notice to the pro se plaintiffs
regarding failure to make proper service. [DE 12]. Plaintiffs have not responded to this letter or
the defendants' arguments other than to simply state that it is not true that service was not
properly effectuated. [DE 29 at 2].
The only documents plaintiffs have submitted in support of their argument that service
was proper are a few pages of priority mail receipts. Service can be made according to the "law
ofthe state in which the district court is located, or in which service is effected." FED. R. Clv. P.
4(e)(l), (4). North Carolina requires service by mail to be either by "registered or certified mail,
return receipt requested, addressed to the party to be served, and delivering to the addressee."
N.C. Gen. Stat. § 1A-l, Rule 4G)(1) (natural person); 4G)(3) (the state); 4(j)(4) (an agency of the
state). Here, "[t]he plaintiff[s] used Priority Mail, which differs from either of the proper
methods." McKoy v. Burke-President, 1995 U.S. Dist. LEXIS 9701, *4 (E.D.N.C. June 14,
1995). Accordingly, service has not been properly effectuated in this instance and Rule 12(b)(5)
requires that the matter be dismissed for failure to perfect service on defendants as required by
Rule 4(i) within 120 days ofthe filing ofthe complaint.
Defendants also argue that this action should be dismissed for failure to state a claim
upon which relief may be granted pursuant to FED. R. Crv. P. 12(b)(6). In their complaint
plaintiffs allege violations of the Equal Credit Opportunity Act ("ECOA") and the
Administrative Procedures Act (" AP A").
Courts generally require proof in ECOA cases to conform to the traditional Title VII
tests. See e.g., Wise v. Vi/sack, 496 Fed. App'x 283, 285 2012 WL 5359504 (4th Cir. 2012)
(affirming this Court's dismissal and applying traditional tests). Unlawful discrimination under
ECOA must be proven using one or more of three theories; (1) direct evidence of discrimination;
(2) disparate treatment analysis; or (3) disparate impact analysis. See e.g., Faulkner v. Glickman,
172 F. Supp. 2d 732, 737 (D. Md. 2001). Here, plaintiffs appear to solely rely upon the disparate
treatment analysis which creates a rebuttable presumption of discrimination. See e.g., Cooley v.
Sterling Bank, 280 F. Supp. 2d 1331, 1337 (MD Ala. 2003). Plaintiffs have not alleged direct
statements of discrimination, nor have they alleged disparate impact discrimination.
In ECOA disparate treatment cases, courts have framed the prima facie test as requiring
plaintiffs to demonstrate that: (1) they are a member of a protected class, (2) they applied for an
extension of credit, (3) they were rejected despite their qualifications, and (4) others of similar
credit stature were extended credit or were given more favorable treatment than plaintiffs. See
e.g., Wise, 496 Fed. App'x at 285 at *2 (applying these four elements in affirming this Court's
dismissal of prior claims by same plaintiffs). Here, plaintiffs are members of a protected class
and applied for loan servicing, but they have not adequately alleged the last two elements - that
they were qualified for an extension of credit and that other similar situated applicants outside of
plaintiffs' class were treated more favorably. The complaint fails to establish a basis to accept the
allegations as true, fails to raise the right to relief above the speculative level, and fails to
establish that the claim is plausible on its face. See e.g., Aschcroft v. Iqbal, 556 U.S. 662, 678
(2009); Bell At!. Corp. v. Twombly, 550 U.S. 544, 555, 570 (2007). Because they fail to
adequately allege direct statements of discrimination, disparate impact, or disparate treatment as
to the Wises, plaintiffs' ECOA claims must be dismissed.
Further plaintiffs have also failed to state a claim under the AP A. Here plaintiffs have not
provided the grounds for their entitlement for relief and have not even attempted to set out the
elements of their APA cause of action. "A plaintiffs obligation to provide the 'grounds' of his
'entitle[ment] to relief requires more than labels and conclusions, and a mere formulaic
recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555. The mere
recitation of the words "arbitrary" and "capricious" in paragraph 39 of the complaint does not
satisfy the Iqbal and Twombly standard for stating an AP A claim. As plaintiffs have failed to
state a claim under the AP A and the ECOA, their entire complaint must be dismissed as no
MOTION FOR LEAVE TO AMEND [DE 39].
Leave to amend should be freely given when justice so requires. FED. R. Civ. P. 15. It is
within the discretion of the Court to allow or deny the amendment. Foman v. Davis, 371 U.S.
178, 182 (1962). Although the right to amend is not unfettered, "[t]he law is well settled that
leave to amend a pleading should be denied only when the amendment would be prejudicial to
the opposing party, there has been bad faith on the part of the moving party, or the amendment
would be futile." Edwards v. City ofGoldsboro, 178 F.3d 231, 242 (4th Cir. 1999) (citation
omitted). However, the Court has ample discretion to deny a motion to amend a complaint as
long as the Court does not "outright refuse 'to grant the leave without any justifying reason."'
Equal Rights Ctr. v. Niles Bolton Assoc., 602 F.3d 597, 603 (4th Cir. 2010) (quoting Foman, 371
U.S. at 182).
Defendants object to the motion to amend and argue that plaintiffs do not have proper
grounds to amend and seek to frustrate the judicial process and further delay a ruling on the
motion to dismiss. Plaintiffs state that their motion for leave to file a second amended complaint
is based upon (1) newly discovered information and the desire to add additional defendants, (2)
the desire to cure deficiency in process service, (3) the desire to add other actionable causes of
action to support damaged, and (4) the desire to articulate the rules and regulations violated.
However, the proposed second amended complaint does not set out new substantive information
as factual allegations and it does not appear that the second amended complaint references any
new information. The factual allegations [DE 3 9-1 at ,-r,-r 1-3 7] of the proposed second amended
complaint are the same as those in the prior amended complaint [DE 9]. The proposed second
amended complaint cures none of the defects highlighted by the motion to dismiss in the
amended complaint. Accordingly to the extent it is the same as the first amended complaint, the
second amended complaint is futile and the motion to amend is properly denied. To the extent
the proposed second amended complaint adds new defendants and causes of action, it is also
clear that the amendment is futile and leave to file should be denied.
Plaintiffs' litigation theme before this Court has been to delay by any means possible.
Their attempt to file a second amended complaint five months after defendants filed their motion
to dismiss, and a month after filing their response to that motion indicates to the Court that they
seek to amend in order to delay the resolution of their case and the consequences of an
unfavorable ruling in the case by this Court. That is a sufficient reason, especially when
combined with the futility of the amendment, to deny plaintiffs' motion for leave to file a second
For the foregoing reasons, defendants' motion to dismiss is GRANTED and this matter is
dismissed in its entirety. Plaintiffs' motion for leave to file a motion for stay is GRANTED, but
plaintiffs' motion to stay is DENIED and plaintiffs' motion for leave to file a second amended
complaint is DENIED AS FUTILE. The Clerk is DIRECTED to enter judgment accordingly and
to close the file.
this!..!/- day of October, 2014.
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