United States Department of Housing and Urban Development v. Brown et al

Filing 5

Order granting Petitioner's 2 motion to dismiss for lack of jurisdiction and denying Respondent's 1 motion to quash for lack of jurisdiction. See Order for complete details. Judge John R. Adams on 02/24/2016. (M,TL)

ADAMS, J.
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION
United States Dept. of Housing and Urban
Development,
Respondent,
v.
Joel Brown, et al.,
Movants.

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CASE NO. 5:16MC002

Judge John R. Adams
ORDER

On January 22, 2016, Movants Joel Brown and Taurus Libra Cancer, Inc. moved to quash
administrative subpoenas issued by the United States Department of Housing and Urban
Development (“HUD”).

HUD has moved to dismiss this action for lack of jurisdiction, and

Brown has replied in opposition. The motion to dismiss is GRANTED.
In its motion, HUD contends that this Court lacks jurisdiction to consider the motion to
quash because no enforcement action has been taken on its non-self-executing subpoenas. Brown
has responded that the lack of an enforcement action is no impediment to this Court’s exercise of
jurisdiction.
In Reisman v. Caplin, the United States Supreme Court found dismissal was appropriate of
a pre-enforcement challenge to an IRS subpoena. See 375 U.S. 440 (1964). Reisman noted that
those seeking to challenge administrative subpoenas had their rights protected by virtue of being
able to assert their defenses during any enforcement action. Id. at 448-449. One court has
explained the effect of Reisman and its progeny as follows:

One of the most firmly established principles of administrative law is that courts
cannot entertain pre-enforcement challenges to administrative subpoenas. Courts
have uniformly held that such challenges are not ripe for judicial review. See
Fleet/Norstar Financial Group, Inc., v. SEC, 769 F.Supp. 19, 20 (D.Me.1991) and
cases cited therein. Since administrative subpoenas are not self-executing,
recipients of such subpoenas can raise their procedural and substantive objections
only if and when the government seeks to enforce the subpoena in court. Id. As a
leading administrative law commentary states:
Due to lack of jurisdiction, the courts will not entertain motions brought by the
subpoenaed party to quash or modify subpoenas.... Since agencies lack the power
to enforce their own subpoenas, they must apply to the district courts for
enforcement. Only then may substantive or procedural objections to the subpoena
be raised for judicial determination.
Stein, Mitchell, and Mezines, Administrative Law 21.01(1) at 21–4 (1990)
(emphasis added).
Lopes v. Resolution Trust Corp., 155 F.R.D. 14, 15 (D.R.I. 1994)
Brown counters this authority contending that numerous cases have allowed such actions
to proceed. The Court is not persuaded by the authority presented by Brown. For example, in
Greene v. Philadelphia Housing Authority, 789 F.Supp.2d 582 (E.D.Penn. 2011), the court held:
The HUD subpoena is an administrative subpoena issued by the HUD Office of the
Inspector General, pursuant to the Inspector General Act, 5 U.S.C.App. 3 § 6(a)(4).
The Inspector General Act specifically provides that subpoenas issued pursuant to
the Act are “enforceable by order of any appropriate United States district court.”
Id. I thus have jurisdiction to decide whether to quash the HUD subpoena.
Id. at 586. The Court offered no explanation for how the term “enforceable by order” of a district
court allowed for pre-enforcement challenges. As such, the Court does not find its holding
persuasive.

The remaining authorities offered by Brown are similarly unpersuasive. In

Territorial Court of the Virgin Islands v. Richards, 847 F.2d 108 (3rd Cir. 1988), any jurisdictional
problems associated with the motion to quash were remedied by virtue of the fact that enforcement
of the subpoenas at issue was sought in the same proceeding. As such, the rule announced in
Reisman would be inapplicable to the facts in Richards. Similarly, in Amato v. United States, 450

F.3d 46 (1st Cir. 2006), the district court construed the government’s response to a motion to quash
as a request for enforcement, once again removing Amato from the rule presented in Reisman. Id.
at 49 (noting that the district court denied a motion to stay enforcement of the subpoenas indicating
a prior order enforcing them had issued).
In summary, this Court has found no persuasive rationale that would suggest departing
from the reasoning espoused by the United States Supreme Court in Reisman. Brown’s rights can
be adequately protected by virtue of raising any necessary defenses when and if an enforcement
action is instituted by HUD. Until that time, this Court lacks jurisdiction to entertain his motion
to quash. The motion is DENIED for lack of jurisdiction.
IT IS SO ORDERED.

February 24, 2016
Date

/s/ John R. Adams
Judge John R. Adams
United States District Court