Allied Home Mortgage Corporation et al v. Secretary of the United States Department of Housing and Urban Development et al

Filing 7

ORDER The Court ORDERS that the parties shall appear for a preliminary injunction hearing on Tuesday, November 8, 2011 at 9:30 a.m. Counsel shall submit by 11/07/11 witness lists, exhibit lists, and any briefing they wish the Court to consider. Injunction Hearing set for 11/8/2011 at 09:30 AM in Courtroom 9C before Judge Melinda Harmon.(Signed by Judge Melinda Harmon) Parties notified.(htippen, )

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
ALLIED HOME MORTGAGE
§
CORPORATION and JAMES C. HODGE, §
§
Plaintiffs,
§
§
VS.
§
§
SHAUN DONOVAN, Secretary,
§
United States Department of
§
Housing and Urban Development, §
et al.,
§
§
Defendants.
§

CIVIL ACTION H-11-3864

OPINION AND ORDER
Pending before the Court in the above referenced cause is
Plaintiff Allied Home Mortgage Corporation (“Allied Corporation”)
and James C. Hodge’s motion for a temporary restraining order
(instrument #2), seeking to set aside or nullify the suspensions of
Plaintiffs’

approval

to

originate

and

underwrite

FHA-insured

mortgage loans by the Mortgagee Review Board (“the Board”) of the
United States Department of Housing and Urban Development (“HUD”),
effective November 1, 2011 (Exs. 1 and 2).1

The motion was heard

on November 3, 2011, with Assistant United States Attorney from the
Southern District of New York, Jamie Nowaday, participating by
telephone.
The government has intervened in a qui tam fraud action filed

1

The Board is authorized to issue such suspensions by 12
U.S.C. § 1708(3)(C) and (4)(B).
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in the Southern District of New York, in which it sues Allied Home
Mortgage Capital Corporation and Allied Corporation as the former
entity’s successor. The suspensions came as a result of the filing
of the government’s complaint in this action.
The Administrative Procedure Act (“APA”) provides for judicial
review of a “final agency action.”
action

is

“final”

for

purposes

“consummation

of

5 U.S.C.

of

the

the

§ 704.

APA

where

agency’s

An agency
the

action

decision

making

represents

the

process.”

Bennett v. Spear, 520 U.S. 154, 178 (1997).

Such

finality allows an agency to apply its expertise and to correct its
errors, while preventing courts from engaging in “piecemeal review
which at the least is inefficient and upon completion of the agency
might prove to have been unnecessary.”

FTC v. Standard Oil Co.,

448 U.S. 232,(HUD regulations under the APA 242 (1980).
Nevertheless, the Court’s examination of the law indicates
that federal courts lack the authority to require plaintiffs to
exhaust administrative remedies before seeking judicial review if
the

relevant

statute

or

agency

regulation

exhaustion but rather make it discretionary.

does

not

mandate

Darby v. Cisneros,

509 U.S. 137, 154 (1993); United States v. Menedez, 48 F.3d 1401,
1411 (5th Cir. 1995).
1708;

Such is the situation here.

24 C.F.R. § 25.8.

12 U.S.C. §

Thus the Court erred at the hearing in

denying the motion for a temporary restraining order based on
Plaintiffs’ failure to exhaust remedies.

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Nevertheless, the Court finds that it needs more information
to make a decision on the request for injunctive relief in this
case.

Accordingly, the Court
ORDERS

that

the

parties

shall

appear

for

a

preliminary

injunction hearing on Tuesday, November 8, 2011 at 9:30 a.m. in
Courtroom 9C.

Counsel shall submit witness lists, exhibit lists,

and any briefing they wish the Court to consider by November 7,
2011.
SIGNED at Houston, Texas, this

3rd

day of

November , 2011.

___________________________
MELINDA HARMON
UNITED STATES DISTRICT JUDGE

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