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NBC-USA Housing, Inc. v. Donovan

September 27, 2010


The opinion of the court was delivered by: Colleen Kollar-kotelly United States District Judge


Plaintiff NBC-USA Housing, Inc. Twenty-Six ("Plaintiff") filed this action against Defendants Shaun Donovan as Secretary of the Department of Housing and Urban Development ("HUD"), Roy S. Lilly as a HUD foreclosure commissioner, and Jim Hotard Properties, LLC ("Hotard") alleging that Defendants violated HUD's procedures and the Administrative Procedure Act ("APA") when HUD foreclosed on Plaintiff's property. Currently before the Court are Hotard's [13] Motion to Dismiss Pursuant to Federal Rule of Civil Procedure 12(b)(2) for Lack of Personal Jurisdiction ("Hotard's Mot.") and Plaintiff's [19] Opposition to Hotard's Motion to Dismiss ("Pl.'s Opp'n"), in which Plaintiff also moved for jurisdictional discovery.

For the reasons explained below, the Court shall GRANT Hotard's Motion to Dismiss and DENY Plaintiff's construed motion for jurisdictional discovery.


On September 29, 1999, Plaintiff, a non-profit organization, entered into a series of agreements with HUD to fund Plaintiff's construction of Fortner Manor Apartments ("Fortner Manor"), an apartment complex in New Orleans, Louisiana. Compl. ¶¶ 1,6-7, 9. Pursuant to the parties' Capital Advance Program Mortgage, HUD advanced Plaintiff $1,535,700 and took a security interest in Fortner Manor. Id. ¶ 9. In the parties' Capital Advance Program Use Agreement, Plaintiff also agreed to operate Fortner Manor as low income housing for the elderly or disabled for 40 years. Id. ¶¶ 10-12.

In August 2005, Hurricane Katrina struck New Orleans and caused extensive damage to Fortner Manor, rendering the complex uninhabitable. Id. ¶¶ 13, 19. As of the commencement of this case, Fortner Manor has remained uninhabited since Hurricane Katrina. Id. ¶ 23.

In October 2008, HUD informed Plaintiff that its failure to operate Fortner Manor as low income housing breached the parties' Capital Advance Program Use Agreement and, consequently, Plaintiff was in default. Id. ¶¶23-25. On June 8, 2009, Plaintiff discovered that HUD had issued an "Invitation to Bid" on Fortner Manor, thereby beginning the non-judicial administrative foreclosure process. Id. ¶ 28. After Plaintiff's unsuccessful attempts to stay the foreclosure, see id. ¶¶ 29-42, HUD held a foreclosure sale on July 28, 2009, and Hotard was the successful bidder, id. ¶¶ 43-44.

Hotard is a Louisiana limited liability company, id. ¶ 3, that operates as a real estate holding company, Hotard's Mot. Ex. A (Affidavit of James S. Hotard Jr.) (hereinafter "Hotard Affidavit") ¶ 4. Plaintiff's eighty-eight paragraph complaint includes only five factual allegations regarding Hotard: (1) Hotard is a Louisiana limited liability company with an office in New Orleans, Louisiana, Compl. ¶ 3; (2) Hotard was the successful bidder at Fortner Manor's foreclosure sale, id. ¶ 44; (3) Hotard is a for-profit company, id. ¶ 45; (4) Hotard refused to complete the sale of Fortner Manor because HUD did not follow proper foreclosure procedures, id. ¶48; and (5) in the alternative, Hotard completed the sale of Fortner Manor, id. ¶ 49.

Plaintiff filed its complaint in this case on November 25, 2009. After the Court granted Hotard's [10] Consent Motion to Extend Time to Respond to the Complaint, see Min. Order (Dec. 30, 2009), Hotard filed its pending motion to dismiss, attaching the Hotard Affidavit as an exhibit thereto. Hotard's managing member, James S. Hotard Jr., declares that Hotard has never shipped products, contracted to sell products, provided services, contracted to render services, solicited business, advertised its products, maintained an office or mailing address, employed agents, officers, or employees, or owned real or personal property in the District of Columbia. See Hotard Aff. ¶¶ 5-13; Hotard's Mot. at 2 ("Hotard is a real property holding company with no contacts, connections, or ties whatsoever to the District of Columbia."). Plaintiff does not dispute that Hotard lacks the above-mentioned contacts with the District of Columbia, rather Plaintiff avers that "for Hotard to claim legal title to the property known as Fortner Manor Apartments, [Hotard] would have had to enter into a sale contract with HUD. Since HUD is a federal agency headquartered in the District of Columbia, Hotard would have had to transact business within this district." Pl.'s Opp'n at 10 (footnote omitted). Plaintiff has not alleged that Hotard has any other contacts with the District of Columbia.


A plaintiff bears the burden of establishing a factual basis for asserting personal jurisdiction over a defendant. See Crane v. N.Y. Zoological Soc'y, 894 F.2d 454, 456 (D.C. Cir. 1990). "The plaintiff, however, cannot rest on bare allegations or conclusory statements and must allege specific facts connecting each defendant with the forum." GTE New Media Servs., Inc. v. Ameritech Corp., 21 F. Supp. 2d 27, 36 (D.D.C. 1998); see also Second Amendment Found. v. U.S. Conference of Mayors, 274 F.3d 521, 524 (D.C. Cir. 2001) (same). "To make such a showing, the plaintiff is not required to adduce evidence that meets the standards of admissibility reserved for summary judgment and trial; rather she may rest her arguments on the pleadings, 'bolstered by such affidavits and other written materials as [she] can otherwise obtain.'" Urban Inst. v. FINCON Servs., 681 F. Supp. 2d 41, 44 (D.D.C. 2010) (quoting Mwani v. bin Laden, 417 F.3d 1, 7 (D.C. Cir. 2005)) (alteration in original). When determining whether personal jurisdiction exists over a defendant, the Court need not treat all of a plaintiff's allegations as true. Instead, the Court "may receive and weigh affidavits and any other relevant matter to assist it in determining the jurisdictional facts." United States v. Philip Morris, Inc., 116 F. Supp. 2d 116, 120 n.4 (D.D.C. 2000) (citation omitted). Any factual discrepancies with regard to the existence of personal jurisdiction, however, must be resolved in favor of the plaintiff. See Crane, 894 F.2d at 456.


A. Personal Jurisdiction

For this Court to exercise personal jurisdiction over Hotard, Plaintiff must plead facts sufficient to satisfy (1) the District of Columbia's long-arm statute (hereinafter "long-arm statute") and (2) the constitutional requirements of due process. See GTE New Media Servs. Inc. v. BellSouth Corp., 199 F.3d 1343, 1347 (D.C. Cir. 2000); see also Edmond v. U.S. Postal Serv. Gen. Counsel, 949 F.2d 415, 424 (D.C. Cir. 1991) ("Even though subject-matter jurisdiction is here predicated upon a federal question, [plaintiffs] must rely on ...

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