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

United States District Court, District of Columbia

October 29, 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

         The Court once again addresses a dispute between various private actors in the immigration-bond process and the federal officials responsible for oversight. Plaintiffs - two bail-bond companies, a separate corporation guaranteeing the detainees' compliance with the bonds, and that company's CEO - assert that the Government's current administration of the system violates their right to due process guaranteed by the United States Constitution, as well as the Administrative Procedure Act. In support of these claims, they point to defective documentation provided by Immigration and Customs Enforcement to non-citizens released on bail. When these individuals fail to appear at court hearings, the bonds are breached, causing significant damage to Plaintiffs' business interests. While Plaintiffs may be justifiably concerned, they have not pled cognizable causes of action here, despite this Court's providing them multiple opportunities to do so. It will therefore grant Defendants' Motion for Judgment on the Pleadings.

         I. Background

         A. Factual Background

         The Court has outlined the factual underpinning of this lawsuit in multiple prior Opinions. See, e.g., Statewide Bonding v. DHS (Statewide II), 2019 WL 2477407, at *1-2 (D.D.C. June 13, 2019). Briefly, some non-citizens held in immigration-detention facilities may be released while they await a hearing if they can post a monetary bond. See 8 C.F.R. §§ 236.1(c), 103.6. Those unable to post their own bonds can turn to bail-bond companies such as Plaintiffs Big Marco Insurance and Bonding Services, LLC and Statewide Bonding, Inc. See ECF No. 32 (Second Amended Complaint), ¶ 24. These companies partner with sureties (insurance companies certified by the Department of Treasury) to enter into bond agreements with ICE. Id The agreements secure bonds on behalf of non-citizens, and the companies generally require bond seekers to provide collateral as security in the event of their failure to appear. Id, ¶¶ 16, 25. If the non-citizen does not have sufficient collateral on hand, he can strike up an arrangement with a third company, such as Plaintiff Nexus Services, Inc. Id, ¶ 16. Nexus enters into separate contractual arrangements with the bail-bond companies to supply collateral and guarantee a non-citizen's appearance when required by ICE. Id, ¶¶ 27, 30. In exchange, the non-citizen provides monthly payments to Nexus and agrees to GPS monitoring. Id, ¶¶ 26-27.

         This case arises from alleged flaws in the various documents given to non-citizens and this tangle of private entities to ensure the released person's attendance at immigration proceedings. According to Plaintiffs, at his conditional release, a non-citizen receives a Notice to Appear (NTA). Id, ¶ 31. The NTA informs him that he has been placed in removal proceedings, sets out the allegations supporting removal, and should alert him of the date, time, and place of his immigration hearing. Id, ¶¶ 35-36; see also Pereira v. Sessions, 138 S.Ct. 2105, 2115 (2018) (“Conveying . . . time-and-place information to a noncitizen is an essential function of a notice to appear.”). According to Plaintiffs, however, ICE consistently issues NT As to their clients that “do not contain a time and date, and the majority do not contain a place, with respect to where the immigrant client is supposed to appear in court.” Second Am. Compl., ¶ 38.

         If the non-citizen does not appear for his hearing, ICE will send the bail-bond company the second document at issue, a Notice to Produce Alien (NPA). Id, ¶¶ 48-49. The NPA alerts the company of the non-citizen's failure to appear and requires it to procure that person's appearance on a specific date. Id If it fails to do so, the bond obligors will be deemed in breach of the bond and required to pay an amount up to the full value of the bond. See Statewide II 2019 WL 2477407, at *2; see also 8 C.F.R. § 103.6 (bond is breached “when there has been a substantial violation of the stipulated conditions” of bond agreement). Plaintiffs allege that ICE has been issuing NPAs demanding that they produce the subject immigrant within 10 days and sometimes on an even tighter timeline. See Second Am. Compl., ¶ 51; see also id (noting that “[o]n more than one occasion, these NPAs have been received after the subject immigrant was to be produced”). Such practices make it even harder for Plaintiffs to comply and result in an increased number of bond breaches. Id, ¶¶ 52-59.

         B. Procedural History

         Plaintiffs filed their Complaint in September 2018, asserting that Defendants' administration of this bond process violated both their due-process rights protected by the United States Constitution and the Administrative Procedure Act. After Plaintiffs once amended their Complaint, the Court dismissed it because they had not sufficiently articulated their standing to pursue such claims. See Statewide Bonding, Inc. v. DHS, 2019 WL 689987, at *1 (D.D.C. Feb. 19, 2019) (Statewide I). Accepting the Court's offer to try again, Plaintiffs have once more amended their Complaint, this time to clarify their injuries.

         Like the previous one, this Second Amended Complaint asserts that the agency's policy or practice of making bond-breach determinations following the issuance of defective NTAs and NPAs violates Plaintiffs' due-process rights and the Administrative Procedure Act. More specifically, they allege that the “defective” NTAs and NPAs preclude non-citizens from attending their immigration hearings and the bail-bond companies from procuring their appearances at subsequent proceedings. See Second Am. Compl., ¶¶ 1, 10. Plaintiffs have “no reasonable opportunity to comply” with the terms of the bonds, and Defendants then “declare the bonds in breach[, ] . . . requir[ing Plaintiffs] to pay tens of thousands of dollars to the Defendants.” Id., ¶ 59. A breach declaration, in turn, “threaten[s]” the “[c]ollateral that Nexus has placed at risk to indemnify the bondsmen.” Id., ¶ 60. Plaintiffs allege that along with these financial harms, ICE's conduct also causes them “reputational harms for every bond declared in breach.” Id., ¶ 65. This is so, they claim, because surety companies do not want to partner with bail-bond companies with high bond “fail rates.” Id., ¶ 59. Plaintiffs assert that ICE has declared 391 bond agreements in breach, to all of which at least one of them is a party. Id., ¶ 60.

         Defendants moved to dismiss this Second Amended Complaint, arguing that Plaintiffs had again failed to demonstrate standing. The Court denied that Motion. See Statewide Bonding II, 2019 WL 2477407, at *1. While expressing “reservations about the legal basis for the[ ] suit, ” it found that Plaintiffs had at least “done enough to show they have standing to proceed.” Id. Defendants now take up the Court's implicit invitation to go beyond jurisdictional arguments, moving for judgment on the pleadings. In support of their Motion, they argue that, even under the facts as pled, Plaintiffs cannot prevail on their claims as a matter of law.

         II. Legal Standard

         Federal Rule of Civil Procedure 12(c) authorizes a party to move for judgment on the pleadings at any time “[a]fter the pleadings are closed -- but early enough not to delay trial.” A party seeking judgment on the pleadings must demonstrate “that no material fact is in dispute and that it is entitled to judgment as a matter of law.” Dist. No. 1 v. Liberty Maritime Corp., 933 F.3d 751, 760 (D.C. Cir. 2019) (quotation marks omitted). When deciding such a motion, courts should view all facts and draw all inferences in the light most favorable to the non-moving party. See Peters v. Nat'l R.R. Passenger Corp., 966 F.2d 1483, 1485 (D.C. Cir. 1992). A court should grant a motion for judgment on the pleadings when “it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations.” Lindsey v. Dist. of Columbia, 609 F.Supp.2d 71, 77 (D.D.C. 2009). The appropriate standard for reviewing a 12(c) motion is therefore similar but not identical to that applied to a motion to dismiss under Rule 12(b). See Samuels v. Safeway, Inc., 391 F.Supp.3d 1, 2 (D.D.C. 2019). In particular, “while a Rule 12(b) motion may be based on procedural failures, including lack of subject-matter jurisdiction . . . a Rule 12(c) motion centers upon the substantive merits of the parties' dispute.” Id. (quotation marks omitted).

         Where the Court must consider “matters outside the pleadings” to reach its conclusion, a motion for judgment on the pleadings “must be treated as one for summary judgment under Rule 56.” Fed.R.Civ.P. 12(d); see also Yates v. Dist. of Columbia, 324 F.3d 724, 725 (D.C. Cir. 2003) (same). At this stage, however, a Court can review “documents attached as exhibits or incorporated by reference in the complaint” or “documents upon which the plaintiff's complaint necessarily relies even if the document is produced not by the plaintiff in the complaint but by the defendant.” Ward v. D.C. Dep't of Youth Rehab. Servs., 768 F.Supp.2d 117, 119 (D.D.C. 2011) (internal quotation marks omitted); see also Banneker Ventures, LLC v. Graham, 798 F.3d 1119, 1133 (D.C. Cir. 2015) (“A district court may consider a document that a complaint ...


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