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Statewide Bonding, Inc. v. U.S. Department of Homeland Security

United States District Court, District of Columbia

May 10, 2019

STATEWIDE BONDING, INC., et al., Plaintiffs,
v.
U.S. DEPARTMENT OF HOMELAND SECURITY, et al., Defendants.

          MEMORANDUM OPINION

          James E. Boasberg, United States District Judge.

         Plaintiff Statewide Bonding, Inc. is unhappy about the current state of immigration bonds for released detainees. It believes that the Department of Homeland Security and its component, Immigration and Customs Enforcement, are improperly declaring many of the bonds breached and seeking to collect the posted money from the bonding companies. In a previously filed action, Statewide, other similar companies, and a company executive are seeking to block the Government from declaring further bond breaches. Here, meanwhile, these same Plaintiffs are suing to block the collection of the bonds already in breach, asserting violations of the Administrative Procedure Act and due process, as well as invoking a right to mandamus. As the Court agrees with Defendants' positions in their current Motion to Dismiss, it will grant the Motion.

         I. Background

         In Plaintiffs' initial suit, No. 18-2115, Statewide; Big Marco Insurance and Bonding Services, LLC; Nexus Services, Inc.; and Nexus executive Mike Donovan allege that the Government is improperly declaring bonds breached when released immigrants fail to appear for court. This is because the Notices to Appear do not “provide the subject immigrant with the time, place, and date where he or she is to appear for immigration proceedings.” Statewide Bonding, Inc. v. U.S. Dep't of Homeland Security, No. 18-2115, ECF No. 32 (Second Am. Compl.) at 2. Plaintiffs similarly believe that the Notices to Produce Alien, directed to the bonding companies once an immigrant does not appear, are procedurally flawed. Id. at 15-16. The merits of those contentions are before this Court in that companion case.

         As Plaintiffs are pursuing a declaratory judgment there that, in the future, the bonds should not be declared in breach, they are simultaneously appealing within DHS the individual determinations that past bonds were in fact breached. The current case asks this Court to freeze collection on those past bond breaches while Plaintiffs administratively appeal. Although they concede that these appeals are untimely, see ECF No. 14 (Am. Compl.) at 3, they contend that the agency's regulations and constitutional due process require the agency to halt collection while those appeals are pending. Id. at 8-9. Plaintiffs urge that Defendants' continuing collection activity entitles them to a remedy under the APA and Due Process Clause and mandamus relief. Id. at 11-16.

         Defendants now move to dismiss under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6), arguing that Plaintiffs have not stated a claim under either the APA or Due Process Clause and that mandamus jurisdiction does not exist here. See ECF No. 27 (Defendants' Motion to Dismiss) at 1-2.

         II. Legal Standard

         In evaluating Defendants' Motion to Dismiss, the Court must “treat the complaint's factual allegations as true . . . and must grant plaintiff ‘the benefit of all inferences that can be derived from the facts alleged.'” Sparrow v. United Air Lines, Inc., 216 F.3d 1111, 1113 (D.C. Cir. 2000) (quoting Schuler v. United States, 617 F.2d 605, 608 (D.C. Cir. 1979)); see also Jerome Stevens Pharms., Inc. v. FDA, 402 F.3d 1249, 1253-54 (D.C. Cir. 2005). The Court need not accept as true, however, “a legal conclusion couched as a factual allegation, ” nor an inference unsupported by the facts set forth in the Complaint. See Trudeau v. FTC, 456 F.3d 178, 193 (D.C. Cir. 2006) (quoting Papasan v. Allain, 478 U.S. 265, 286 (1986)).

         Federal Rule of Civil Procedure 12(b)(6) provides for the dismissal of an action where a complaint fails “to state a claim upon which relief can be granted.” Although “detailed factual allegations” are not necessary to withstand a Rule 12(b)(6) motion, “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal citation omitted). For a plaintiff to survive a 12(b)(6) motion, the facts alleged in the complaint “must be enough to raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-56 (2007).

         The standard to survive a motion to dismiss under Rule 12(b)(1) is less forgiving. Under this Rule, a plaintiff bears the burden of proving that the Court has subject-matter jurisdiction to hear its claims. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992). A court also has an “affirmative obligation to ensure that it is acting within the scope of its jurisdictional authority.” Grand Lodge of Fraternal Order of Police v. Ashcroft, 185 F.Supp.2d 9, 13 (D.D.C. 2001). For this reason, “‘the [p]laintiff's factual allegations in the complaint . . . will bear closer scrutiny in resolving a 12(b)(1) motion' than in resolving a 12(b)(6) motion for failure to state a claim.” Id. at 13-14 (quoting 5A Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 1350 (2d ed. 1987)).

         III. Analysis

         Defendants first contend that Plaintiffs have not stated a claim under the APA both because they are seeking to challenge non-final agency action and because ICE has acted consistently with agency regulations. See Def. MTD at 3, 6. In addition, they maintain that Plaintiffs cannot state a due-process claim because they were afforded constitutionally adequate process, id. at 9, and that the Court lacks subject-matter jurisdiction over the mandamus claim. Id. at 12. The Court will take each of these issues in order.

         A. APA

         The Court need not address the finality of agency action here because Defendants' alternative position - namely, that ICE is acting in compliance with agency regulations - is sufficient to require dismissal of the APA claims. To begin, Plaintiffs' only APA allegation seems to be that the agency's action is inconsistent with its own regulations. See Amend. Compl. at 10-13, 14-15. Although the Amended Complaint is not a model of clarity in this regard, examination of Plaintiffs' briefing also suggests as much. See Pl. Opp. at 6-9 (citing relevant regulations). In any event, the Court cannot discern any other basis ...


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