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Bradshaw v. Veneman

October 12, 2004

RODNEY BRADSHAW, PLAINTIFF,
v.
ANN VENEMAN, ET AL., DEFENDANTS.
GEORGE HILDEBRANDT, JR. AND PATRICIA HILDEBRANDT, PLAINTIFFS,
v.
ANN VENEMAN, ET AL., DEFENDANTS.



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

MEMORANDUM OPINION AND ORDER

On October 6, 2004, plaintiff Rodney Bradshaw filed a motion for a temporary restraining order and temporary injunction, seeking to restrain the defendants from executing any administrative offset against him and directing defendants to return all administrative offsets taken during the past five years.*fn1 The Court directed the defendants to respond by the end of the day on October 7, 2004, and held a hearing on the morning of October 8, 2004.

The parties agree that, on October 8, 2004, an approximately $16,000 check for a countercyclical payment, which would otherwise have been delivered to Mr. Bradshaw, was instead to be administratively offset against his existing debt. Counsel for defendants represented to the Court at the hearing that Mr. Bradshaw's check will be held and not used as an administrative offset pending the outcome of this request for temporary injunctive relief.

On October 7, 2004, plaintiffs George and Patricia Hildebrandt also filed a motion for a temporary restraining order and temporary injunction requesting the same relief as Mr. Bradshaw. The defendants filed an opposition that same day.*fn2 No mention of an immediate administrative offset was made in the motion. In open court, counsel for the Hildebrandts represented that he believed an administrative offset was upcoming in the next five to ten days. Counsel for defendants indicated that, in fact, an administrative offset of $1471 was taken on October 7, 2004 and that approximately $700 in payments are to be offset over the next six months.

A. Standards for Injunctive Relief

In deciding whether to grant emergency injunctive relief, the Court must consider (1) whether there is a substantial likelihood that plaintiffs will succeed on the merits of their claims, (2) whether plaintiffs will suffer irreparable injury absent an injunction, (3) the harm to defendants or other interested parties (the balance of harms), and (4) whether an injunction would be in the public interest or at least not be adverse to the public interest. See Serono Laboratories, Inc. v. Shalala, 158 F.3d 1313, 1317-18 (D.C. Cir. 1998); Sea Containers Ltd. v Stena AB, 890 F.2d 1205, 1208 (D.C. Cir. 1989); Washington Metropolitan Area Transit Commission v. Holiday Tours, Inc., 559 F.2d 841, 843 (D.C. Cir. 1977); Milk Industry Foundation v. Glickman, 949 F. Supp. 882, 888 (D.D.C. 1996).

Plaintiffs are not required to prevail on each of these factors. Rather, under Holiday Tours, the factors must be viewed as a continuum, with more of one factor compensating for less of another. "If the arguments for one factor are particularly strong, an injunction may issue even if the arguments in other areas are rather weak." CityFed Fin. Corp. v. Office of Thrift Supervision, 58 F.3d 738, 747 (D.C. Cir.1995). An injunction may be justified "where there is a particularly strong likelihood of success on the merits even if there is a relatively slight showing of irreparable injury." Id. Conversely, when the other three factors strongly favor interim relief, a court may grant injunctive relief when the moving party has merely made out a "substantial" case on the merits. The necessary level or degree of likelihood of success that must be shown will vary according to the Court's assessment of the other factors. Washington Metro. Area Transit Comm'n v. Holiday Tours, Inc., 559 F.2d at 843-45. In sum, injunctive relief may be granted "with either a high probability of success and some injury, or vice versa." Cuomo v. United States Nuclear Regulatory Comm'n, 772 F.2d 972, 974 (D.C. Cir. 1985).

Plaintiffs have captioned their motions as applications for temporary restraining orders and temporary injunctions. While the purpose of a temporary restraining order is to preserve the status quo and prevent imminent harm pending fuller briefing and a hearing on the request for injunctive relief, the Court must still consider the traditional four-part test for injunctive relief even at the TRO stage. See Barrow v. Graham, 124 F. Supp. 2d 714, 715-16 (D.D.C. 2000). While it is not clear whether plaintiffs intended the term "temporary injunction" to mean a preliminary injunction or whether it was just a redundancy in the caption of the applications, the Court has now received briefs from both sides and has heard the arguments and proffers of counsel in open court. The Court therefore will treat plaintiff's applications as motions for preliminary injunctions.

B. Likelihood of Success on the Merits

Chapter 37 of the United States Code provides that "[b]efore discharging any delinquent debt owed to any executive... agency, the head of such agency shall take all appropriate steps to collect such debt, including (as applicable)... administrative offset." 31 U.S.C. § 3711(g)(9). An "administrative offset" means withholding funds otherwise payable to a person to satisfy a claim by the United States against that person. See 31 U.S.C. § 3701(a)(1). Section 3716 sets out the requirements that the agency must fulfill prior to collecting debt by administrative offset. It provides, among other things, that the agency must either adopt the regulations regarding collection by administrative offset promulgated by the Department of Justice, the General Accounting Office, or the Department of the Treasury or "prescribe regulations on collecting by administrative offset consistent with the regulations" of those departments or agencies. 31 U.S.C. § 3716(b). The Department of Agriculture ("USDA") regulations regarding collection by administrative offset can be found at 7 C.F.R. § 792.7.

The government maintains, and plaintiffs do not dispute, that in the case of Mr. Bradshaw, the administrative offsets at issue in his request for injunctive relief are with respect to loans made to him in 1979 and 1996 which are now delinquent. In the case of the Hildebrandts, the loans are from 1981 and 1984, they were reamortized in 1991, and they are now delinquent. Other than the 1979 loan, these loans all fall within the class period of Pigford v. Veneman, Civil Action No. 97-1978. There is no dispute that all plaintiffs in these suits were Pigford class*fn3 members and filed claims through the Pigford claims process established by the Consent Decree settling the case. In both cases, plaintiffs' claims were denied. Plaintiffs currently have petitions pending for Monitor review before the Monitor appointed by the Court under the Consent Decree. Even though both Mr. Bradshaw and the Hildebrandts have filed these new lawsuits alleging actions that took place after the Pigford class period, therefore, the administrative offsets at issue in these applications for temporary injunctive relief result from either (1) loans which predate Pigford or (2) claims that were a part of the Pigford lawsuit. This Court has no jurisdiction over claims predating Pigford. Claims regarding loans incurred during the class period were extinguished when the Consent Decree was approved by the Court in April 1999, see Consent Decree ¶ 17, and those claims therefore must be analyzed under the terms of the Consent Decree.

The Consent Decree established certain protections for Pigford claimants during the pendency of the claims process established by the Consent Decree. Because plaintiffs are still in the Pigford claims process, now before the Monitor for review of the denial of their claims, the protections granted by the Consent Decree must be considered. The Consent Decree specifically provides that:

Upon being advised by the facilitator that a claimant satisfies the class definition in ¶ 2(a), above, or that a claimant has met the criteria for equitable tolling under ¶ 6, above, USDA shall immediately cease all efforts to dispose of any foreclosed real property formerly owned by such person. USDA also will refrain from foreclosing on real property owned by the claimant or accelerating the claimant's loan account; however, USDA may take such action up to but not including foreclosure or acceleration that is necessary to protect its interests. USDA may resume its efforts to dispose of any such real property after a final decision in USDA's favor on the class member's claim pursuant to ¶¶ 9 or 10, below.

Consent Decree ¶ 7. The government explained during oral argument that the term "final decision" in Paragraph 7 means a final decision after the end of the Monitor review process. The government elaborated that even if a claimant has had his or her claim denied under either Track A or Track B, the protections of Paragraph 7 are not lifted until the Monitor review process is concluded. Because plaintiffs are still engaged in the Pigford claims process,*fn4 therefore, it ...


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