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Haynie v. Veneman

July 23, 2003

BELINDA D. HAYNIE, PLAINTIFF,
v.
ANN VENEMAN, SECRETARY, UNITED STATES DEPARTMENT OF AGRICULTURE, DEFENDANT.
PHILIP J. HAYNIE, II, ET AL., PLAINTIFFS,
v.
ANN VENEMAN, SECRETARY, UNITED STATES DEPARTMENT OF AGRICULTURE, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Paul L. Friedman, United States District Judge.

OPINION

These consolidated cases are before the Court on several motions: defendants' motions to dismiss or, alternatively, to strike plaintiffs' jury demands and prayers for interest in both cases, and plaintiff's motion for leave to amend her complaint in Civil Action No. 00-2493. In light of the divergence of procedural and substantive issues involved, the Court will address each case separately with respect to the pending motions. In this Opinion, the Court will consider only the motions pertaining to Civil Action No. 00-2493, the claims of plaintiff Belinda D. Haynie. Motions pertaining to Civil Action No. 00-2516 will be addressed by separate Memorandum Opinion.

Upon careful consideration of the parties' arguments and the record in this case, the Court concludes that plaintiff is entitled to file her amended complaint but that certain of the claims alleged therein are untimely and therefore must be dismissed. In addition, the Court concludes that it must strike plaintiff's request for interest and her demand for a jury trial.

I. BACKGROUND

Plaintiff Belinda Haynie is an African-American woman who lives in the Northern Neck area of Virginia. See Am. Comp. at ¶¶6, 7. On or about March 12, 1997, plaintiff applied for a loan from the Rural Business Service ("RBS"), an agency of the United States Department of Agriculture ("USDA"). See Am. Comp. at ¶12. Plaintiff sought the loan on behalf of Haynie Enterprises, Inc. ("HEI"), a farming business of which plaintiff was at all times the president and sole shareholder and plaintiff's husband, Phillip Haynie, was the manager. See id. at ¶¶10, 12. By letter of May 22, 1997, USDA denied plaintiff's loan application, stating that the denial was based in part on the possibility that plaintiff was in personal bankruptcy or had not fully disclosed her bankruptcy-related liabilities in her application. See id. at ¶¶17-18. The letter also stated that the denial was warranted because HEI planned to employ Phillip Haynie as manager and USDA deemed him unacceptable for that position. See id. at ¶¶24, 28. Despite these statements, plaintiff contends that in fact she had met all of the loan criteria, had fully disclosed all bankruptcyrelated liabilities and was at no time in personal bankruptcy. See id. at ¶¶13, 17.

Following the denial of her application, plaintiff alleges that USDA communicated with her directly and "informed Plaintiff that it would continue to work with her to shape the loan application so that it could be approved." Am. Comp. at ¶36. Based on that representation, plaintiff continued to consult with USDA officials over the next two years, hoping eventually to secure the loan for which she had applied in March 1997. See id. at ¶38. Plaintiff alleges that during this period USDA advised her that it would accept a second "feasibility study" in support of a renewed application, since the first study had been found unacceptable. See id. at ¶¶29, 40-42. She states that she received advance assurances from USDA that the second study would be acceptable as proposed and commissioned the study from a group of supervised college students, submitting the findings to USDA in support of her application. See id. at ¶¶40-42. Despite the alleged advance assurances to plaintiff, defendant ultimately found the new feasibility study to be inadequate on the ground that plaintiff's step-son, Philip J. Haynie, had participated in the study. See id. at ¶43. Plaintiff asserts that this finding was unfounded and discriminatory, claiming that USDA knew of her step-son's participation in the study from the outset and that the applicable regulations do not preclude such participation. See id. at ¶¶44-45.

In April 1998, plaintiff filed a discrimination complaint with the USDA Office of Civil Rights ("OCR") alleging discrimination by USDA in its handling and denial of her March 1997 loan application. See Am Comp. at ¶47. Plaintiff asserts that despite her pending complaint, USDA officials continued to represent that they would cooperate with plaintiff to ensure that she obtained the loan for which she had applied. In November 1998, plaintiff met with USDA officials in a renewed effort to determine how her loan application might be deemed acceptable.

See id. at ¶¶ 48, 50. After continued meetings with USDA through the winter of 1998-99, plaintiff alleges that she submitted a loan re-application on behalf of HEI on March 8, 1999. See id. at ¶¶51-52. Although plaintiff asserts that her re-application was "submitted on the basis of specific advice and consultation received from USDA personnel over the previous few months," the re-application was denied by letter of March 31, 1999, on the ground that it was incomplete. See id. at ¶¶53, 55. According to plaintiff, the specifics of USDA's charge that her application was incomplete directly contradicted the representations that USDA had made to her in the preceding months. See id. at ¶56.

After the denial of plaintiff's re-application, USDA officials advised plaintiff that she would have to incur substantial further expense to make her re-application complete but told her that she could obtain a loan from a commercial lender without such substantial expense. See Am. Comp. at ¶¶57-58. Plaintiff asserts that based on this advice she "'voluntarily' withdrew her reapplication" and applied to a commercial lender. Id. at ¶59. Ultimately, however, the advice from USDA about applying to a private lender "proved to be false and misleading." Id. at ¶60.

Finally, on February 17, 2000, the USDA OCR issued a decision on plaintiff's discrimination complaint, finding that plaintiff had not been discriminated or retaliated against by USDA. See Am. Comp. at ¶62. Plaintiff alleges that the OCR's decision rested on grounds that were directly contradicted by fact and/or were reached without adherence to required USDA procedures and therefore were improper and incorrect. See id. at ¶¶63-73. Plaintiff appealed the denial to the USDA National Appeals Division, but the decision was affirmed on appeal and communicated to plaintiff in April 2000. See id. at ¶¶75-76.

Plaintiff asserts that these events are part of a pattern of discrimination and retaliation against her based on her race and on her own and her husband's involvement in civil rights activities in opposition to USDA's discrimination against African Americans. See Am. Comp. at ¶¶ 78, 84, 86. Specifically, plaintiff argues that multiple acts by USDA -- denying her initial loan application; offering false and misleading advice and assistance; denying her loan reapplication; conveying false and misleading instructions on obtaining a private loan; and denying her discrimination complaint -- constitute a continuing violation of the Equal Credit Opportunity Act, 15 U.S.C. §1691 et seq. ("ECOA"), which prohibits discrimination by a creditor against an applicant with respect to "any aspect of a credit transaction" on the basis of race or other protected characteristics. 15 U.S.C. § 1691(a).

At this early stage of the case, defendant does not challenge the substance of plaintiff's allegations but rather urges dismissal on the ground that her claims are untimely, arguing that the only act of discrimination alleged by plaintiff is the denial of plaintiff's original loan application, which took place beyond the statutory limitations period of two years prior to the filing of this action. See 15 U.S.C. § 1691e(f). In response, plaintiff argues that her claims are timely because of the continuing nature of USDA's discrimination. Relying on the "continuing violation" doctrine, plaintiff argues that the alleged acts of discrimination are so closely interrelated that they may be treated as a single, cumulative violation. If the Court treats them as such, plaintiff's claims will be rendered timely because the most recent related acts took place within the two-year limitations period.*fn1

The Court concludes that plaintiff should be permitted to amend her complaint but that the acts alleged therein do not constitute a continuing violation of plaintiff's rights. The Court further concludes that although certain of plaintiff's discrete claims must be dismissed as untimely, plaintiff's case will not be dismissed in its entirety because plaintiff has alleged several acts within the two-year limitations period that are in themselves sufficient to state a claim. Finally, because plaintiff is ...


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