Haller v. Department of Housing and Urban Development et al

Filing 80

REPORT AND RECOMMENDATION that 61 MOTION to Dismiss filed by defendant Commodity Futures Trading Commission be Granted and claims against this defendant be Dismissed with prejudice; 67 MOTION to Dismiss filed by defendants US Department of Housin g and Urban Development, Office of the Comptroller of the Currency, Office of Thrift Supervision, Board of Governors of the Federal Reserve System, Consumer Financial Protection Bureau, US Securities and Exchange Commission, and the US Department of the Treasury be Granted pursuant to FRCP 12(b)(5) and the claims against these defendants be Dismissed without prejudice. The claims against defendants FDIC and National Credit Union Administration be Dismissed. Objections to R&R due by 2/19/2013. Signed by Magistrate Judge Karen L. Litkovitz on 1/31/2013. (art)

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
DANIEL R. HALLER,
Plaintiff,

Case No. 1: 11-cv-881
Beckwith, J.
Litkovitz, M.J.

vs.

U.S. DEPARTMENT OF HOUSING &
URBAN DEVELOPMENT, et al.,
Defendants.

REPORT AND
RECOMMENDATION

Plaintiff Daniel Haller, proceeding prose, brings this action against a number of
governmental, regulatory and private entities under various federal, constitutional and state
common law provisions. Plaintiffs claims arise from his unsuccessful efforts to obtain a
mortgage loan modification from mortgage providers and funds from certain mortgage relief
programs, and his challenge to a successful foreclosure action brought against him in state court.
This matter is before the Court on the motions to dismiss filed by defendants United States
Commodity Futures Trading Commission (CFTC) (Doc. 61) and United States Department of
Housing and Urban Development, Office of the Comptroller of the Currency, Office of Thrift
Supervision, Board of Governors of the Federal Reserve System, Consumer Financial Protection
Bureau, United States Securities and Exchange Commission, and United States Department of
the Treasury ("Federal Defendants"). (Doc. 67). Plaintiff has not filed a response in opposition
to defendants' motions. For the reasons stated below, the motions are well-taken and should be
granted.

I. Background
Plaintiff filed the prose complaint in this action on December 16, 2011, after a decree of
foreclosure was entered against him in the Hamilton County Court of Common Pleas. (Doc. 1).
Plaintiff brings claims against a number of defendants, alleging deficiencies in the state
foreclosure proceedings and challenging the state court's ruling granting summary judgment and
a decree of foreclosure against him. (!d.). Plaintiff also makes a number of general allegations
pertaining to the regulation ofhousing mortgages and a fraudulent scheme by state and federal
authorities, banks and other private entities to deprive homeowners of funding purportedly
intended for them. (!d.). The Court incorporates by reference the allegations of the complaint
that are set forth in a prior Order and Report and Recommendation issued on July 10, 2012,
which recommended dismissal of plaintiffs claims against a number of defendants (Doc. 74) and
was adopted by Order dated August 3, 2012. (Doc. 75).

II. Motion to dismiss by defendant CFTC (Doc. 61)
Defendant CFTC brings its motion to dismiss the complaint pursuant to Fed. R. Civ. P.
12(b)(l) and 12(b)(6). Defendant moves to dismiss the complaint pursuant to Rule 12(b)(1) for
lack of jurisdiction on the ground it has not waived its statutory immunity from suit. (Doc. 61 at
3, citing United States v. King, 395 U.S. 1, 4 (1969) (a waiver of immunity by the United States
"cannot be implied but must be unequivocally expressed."). Defendant also contends that the
district court lacks jurisdiction over plaintiffs complaint against it under the Rooker-Feldman
doctrine because plaintiff is challenging a state court judgment. (!d., citing Rooker v. Fidelity

Trust Co., 263 U.S 413, 416 (1923); District of Columbia Court ofAppeals v. Feldman, 460 U.S.
462, 482 (1983)). See also Doc. 25, Exh. D (state court judgment adverse to plaintiff).

2

Defendant also moves to dismiss the complaint pursuant to Fed. R. Civ. P. 12(b)(6) for failure to
state a claim upon which relief can be granted. Defendant states that the only reference to it in
the complaint is found at page 9, ~ 38, which is the section ofthe complaint that identifies each
of the parties to the lawsuit. Paragraph 38 states: "Commodity Futures Trading CommissionEnforcement and Protection against Securities and Commodities fraud. The agency tried to warn
the Regulators as well as the United States."
Defendant CFTC's motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(1) on the ground
it has not waived its immunity from suit is well-taken. "Jurisdiction over any suit against the
[United States] Government requires a clear statement from the United States waiving sovereign
immunity ... together with a claim falling within the terms of the waiver." CareToLive v. von

Eschenbach, 525 F. Supp. 2d 938,950 (S.D. Ohio 2007), aff'd sub nom., CareToLive v.
Eschenbach, 290 F. App'x 887 (6th Cir. 2008) (citing United States v. White Mountain Apache
Tribe, 537 U.S. 465, 472 (2003)). The United States may not be sued without its consent, and
consent is a prerequisite to jurisdiction. !d. (citing United States v. Mitchell, 463 U.S. 206, 212
(1983); Reed v. Reno, 146 F.3d 392, 398 (6th Cir. 1998) ("The United States can be sued only
when it has expressly given its consent to be sued.") (internal quotation marks and citation
omitted)). A waiver of sovereign immunity "cannot be implied but must be unequivocally
expressed." !d. (citing Mitchell, 463 U.S. at 239; Reed, 146 F.3d at 398). Absent an express
waiver of sovereign immunity, the district court lacks jurisdiction over a claim against the United
States. !d. (citing Mitchell, 463 U.S. at 212). The plaintiffhas the burden to identify a waiver of
sovereign immunity in order to proceed with a claim against the United States. !d. (citing Reetz

v. United States, 224 F.3d 794, 795 (6th Cir. 2000)). !d. If the plaintiff cannot identify a
3

waiver, his claim must be dismissed for lack of jurisdiction. !d. (citing Reetz, 224 F.3d at 795).
Plaintiff has not identified a waiver of sovereign immunity by the CFTC for any claim he
brings against this federal agency. Accordingly, the complaint against defendant CFTC should
be dismissed pursuant to Fed. R. Civ. P. 12(b)( 1) for lack of jurisdiction. 1
Dismissal is also warranted pursuant to Fed. R. Civ. P. 12(b)(6) because the complaint
fails to "state a claim to relief that is plausible on its face" against defendant CFTC. See
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S.

544, 570 (2007)). While plaintiffs pro so complaint is entitled to a liberal construction (see
Spotts v. United States, 429 F.3d 248, 250 (6th Cir. 2005) (citing Haines v. Kerner, 404 U.S.

519, 520 (1972)), plaintiffs single allegation in the complaint pertaining to CFTC cannot
logically be construed as asserting a claim against the agency under any statutory or
constitutional provision or common law theory of recovery. The complaint against CFTC should
therefore be dismissed pursuant to Fed. R. Civ. P. 12(b)(6) for failure to state a claim upon which
relief can be granted.
III. Motion to dismiss by the federal defendants (Doc. 67)
The federal defendants move to dismiss the claims against them without prejudice based
on plaintiffs failure to comply with Fed. R. Civ. P. 4(i) and 4(m). Defendants contend that
plaintiff did not properly serve the United States as required under Rule 4(i)(l) by delivering a
copy of the summons and complaint to the United States attorney for this district or another
individual specified in Rule 4(i)(l)(A)(i), or by sending a copy of the summons and complaint by

1

In light of the Court's determination that there is no jurisdiction over plaintiffs claim against defendant
CFTC under the doctrine of sovereign immunity, it is not necessary to address CFTC's argument that jurisdiction is

4

registered or certified mail to the civil-process clerk at the United States attorney's office; and
(2) by sending a copy of each by registered or certified mail to the United States Attorney
General at Washington, D.C., as required by Rule 4(i)(1)(B). Fed. R. Civ. P. 4(i). The federal
defendants further contend that plaintiff failed to serve them within 120 days after the complaint
was filed as required under Fed. R. Civ. P. 4(m).
Absent service of process or waiver of service by the defendant, a court ordinarily may
not exercise jurisdiction over a party named as a defendant. Murphy Brothers, Inc. v. Michetti
Pipe Stringing, Inc., 526 U.S. 344, 350 (1999). The plaintiff"bears the burden of perfecting

service of process and showing that proper service was made." Sawyer v. Lexington-Fayette
Urban County Gov., 18 F. App'x 285, 287 (6th Cir. 2001) (citing Byrd v. Stone, 94 F.3d 217,

219 (6th Cir. 1996)). "[T]he requirement of proper service of process 'is not some mindless
technicality."' Friedman v. Estate ofPresser, 929 F.2d 1151, 1155 (6th Cir. 1991) (quoting De/
Raine v. Carlson, 826 F.2d 698, 704 (7th Cir. 1987)). Moreover, the fact that a defendant may

have received actual notice of the filing of the action cannot be a substitute for proper service of
process. LSJ Investment Co., Inc. v. O.L.D., Inc., 167 F.3d 320, 322 (6th Cir. 1999); Friedman,
929 F.2d at 1155-1156.
The federal defendants named in this lawsuit are various federal agencies. Fed. R. Civ. P.
4(i) sets forth the requirements for serving a United States agency. The Rule requires that the
party must serve the United States and also send a copy of the summons and complaint to the

lacking under the Rooker-Feldman doctrine.

5

United States agency by registered or certified mail. The Rule states:
(1) United States. To serve the United States, a party must:
(A)(i) deliver a copy ofthe summons and of the complaint to the United States
attorney for the district where the action is brought--or to an assistant United
States attorney or clerical employee whom the United States attorney designates
in a writing filed with the court clerk-or
(ii) send a copy of each by registered or certified mail to the civil-process clerk at
the United States attorney's office;
(B) send a copy of each by registered or certified mail to the Attorney General of
the United States at Washington, D.C.; and
(C) if the action challenges an order of a nonparty agency or officer of the United
States, send a copy of each by registered or certified mail to the agency or officer.
(2) Agency; Corporation; Officer or Employee Sued in an Official Capacity. To
serve a United States agency or corporation, or a United States officer or
employee sued only in an official capacity, a party must serve the United States
and also send a copy of the summons and of the complaint by registered or
certified mail to the agency, corporation, officer, or employee.
Fed. R. Civ. P. 4(m) sets forth the time limit for effectuating service. It states:
If a defendant is not served within 120 days after the complaint is filed, the court--on
motion or on its own after notice to the plaintiff--must dismiss the action without
prejudice against that defendant or order that service be made within a specified time. But
if the plaintiff shows good cause for the failure, the court must extend the time for service
for an appropriate period.
A review of the record in this case shows that plaintiff failed to properly serve the United
States agencies he names as defendants. There is no indication in the record that plaintiff met the
requirements of Rule 4(i)(1) by delivering a copy of the summons and complaint to the United
States attorney for this district or another individual specified in Rule 4(i)(1 )(A)(i), or by sending
a copy of the summons and complaint by registered or certified mail to the civil-process clerk at
the United States attorney's office, and (2) by sending a copy of each by registered or certified
mail to the United States Attorney General at Washington, D.C. Fed. R. Civ. P. 4(i)(1)(A), (B).
Nor has plaintiff produced any documentation in response to the motion to dismiss to show that
6

he served the United States. Plaintiff therefore has not carried his burden to show that he has
effected service of process on the federal agencies named as defendants in this case. See Sawyer,
18 F. App'x at 287 (plaintiffhas the burden ofperfecting service of process and showing that
proper service was made).
Moreover, by failing to serve the United States within 120 days of the filing of the
complaint, plaintiffhas failed to satisfy the requirements of Rule 4(m) for each of the federal
agencies. Fed. R. Civ. P. 4(m). Plaintiff has not attempted to show good cause for his failure to
timely effect service of process under Fed. R. Civ. P. 4(m). An extension of time to allow
plaintiff to attempt to perfect service is not warranted as plaintiff has made no effort to address
the deficiencies in service of process and he has not requested an extension of time to perfect
service of process?
For these reasons, the federal defendants' motion to dismiss the complaint against them
based on plaintiffs failure to comply with Fed. R. Civ. P. 4(i) and 4(m) is well-taken. The
federal defendants' motion to dismiss should be granted pursuant to Fed. R. Civ. P. 12(b)(5).

IV. Plaintiff's claims against defendants Federal Deposit Insurance Corporation (FDIC)
and National Credit Union Administration.
Plaintiff has named two additional federal agencies as defendants in the complaint FDIC and National Credit Union Administration- but neither defendant has filed an answer nor
moved to dismiss the complaint against it. "Generally, a district court may not sua sponte

2

While there has been some disagreement among federal courts as to whether Rule 4(m) gives courts
discretion to grant an extension in the absence of a showing of good cause, district courts in the Sixth Circuit have
recognized that an extension may be warranted under certain circumstances even where a showing of good cause has
not been made. See Electrical Workers Local 58 Pension Trust Fundv. Rite Elec. Co., No. 10-cv-11815, 2010 WL
4683883, at *2 (E.D. Mich. Nov. 10, 2010) (collecting cases); Davis v. Kroger Co., Inc., No. 09-cv-789, 2010 WL
2697143 (S.D. Ohio July 6, 2010) (Beckwith, J.).

7

dismiss a complaint where the filing fee has been paid unless the court gives the plaintiff the
opportunity to amend the complaint." Apple v. Glenn, 183 F.3d 477,479 (6th Cir. 1999). An
exception applies, however, where the plaintiff's complaint consists of allegations that "are
totally implausible, attenuated, unsubstantial, frivolous, devoid of merit, or no longer open to
discussion." !d. at 479 (citing Hagans v. Lavine, 415 U.S. 528, 536-37 (1974)). In the case of
such meritless allegations, the district court may sua sponte dismiss the plaintiff's complaint
pursuant to Fed. R. Civ. P. 12(b)(1) for lack of subject matter jurisdiction without affording the
plaintiff the opportunity to amend his complaint. !d. "[D]ismissal under Rule 12(b)(l) (as
opposed to Rule 12(b)( 6)) is appropriate in only the rarest of circumstances where ... the
complaint is deemed totally implausible." !d. at 480.
The undersigned recommends that plaintiff's claims against defendants FDIC and
National Credit Union Administration be dismissed sua sponte for lack of subject matter
jurisdiction pursuant to Fed. R. Civ. P. 12(b)(l). Plaintiff mentions each ofthese defendants
only once in the complaint under Section IV, "Parties." (Doc. 1, p. 8). Paragraph 32 states in its
entirety: "Federal Deposit Insurance Corporation- fiduciary obligation, failure to protect, failure
to make securitized mortgages affordable". Paragraph 34 states the same with respect to the
National Credit Union Administration. Plaintiff's allegations as to these federal agencies do not
state a plausible claim for relief and are wholly frivolous. Dismissal of the complaint against
defendants FDIC and National Credit Union Administration pursuant to Fed. R. Civ. P. 12(b)(l)
is therefore warranted. See Apple, 183 F.3d at 479.

8

IT IS THEREFORE RECOMMENDED THAT:
(1) The motion to dismiss filed by defendant Commodity Futures Trading Commission (Doc.
61) be GRANTED and the claims against this defendant be DISMISSED with prejudice.
(2) The motion to dismiss filed by defendants United States Department of Housing and Urban
Development, Office of the Comptroller of the Currency, Office of Thrift Supervision, Board of
Governors of the Federal Reserve System, Consumer Financial Protection Bureau, United States
Securities and Exchange Commission, and the United States Department of the Treasury be
GRANTED pursuant to Fed. R. Civ. P. 12(b)(5) and the claims against these defendants be
DISMISSED without prejudice.
(3) The claims against defendants FDIC and National Credit Union Administration be
DISMISSED.

~£_yCJ~

Karen L. Litkovitz ~
United States Magistrate Judge

9

0

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION

Civil Action No. 1: 11-cv-881
Beckwith, J.
Litkovitz, M.J.

DANIEL R. HALLER,
Plaintiff,

vs.

U.S. DEPARTMENT OF HOUSING &
URBAN DEVELOPMENT,
Defendant.

NOTICE
Pursuant to Fed. R. Civ. P. 72(b), WITHIN 14 DAYS after being served with a copy of
the recommended disposition, a party may serve and file specific written objections to the
proposed findings and recommendations. This period may be extended further by the Court on
timely motion for an extension. Such objections shall specify the portions of the Report objected
to and shall be accompanied by a memorandum oflaw in support of the objections. If the Report
and Recommendation is based in whole or in part upon matters occurring on the record at an oral
hearing, the objecting party shall promptly arrange for the transcription of the record, or such
portions of it as all parties may agree upon, or the Magistrate Judge deems sufficient, unless the
assigned District Judge otherwise directs. A party may respond to another party's objections
WITHIN 14 DAYS after being served with a copy thereof. Failure to make objections in
accordance with this procedure may forfeit rights on appeal. See Thomas v. Arn, 474 U.S. 140
(1985); United States v. Walters, 638 F.2d 947 (6th Cir. 1981).
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