Klein v. Mnuchin

• Court: District Court, District of Columbia
• Decided: January 4, 2019
• Docket: Civil Action No. 2018-0769
• Status: Published

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

HENRY L. KLEIN, et al.,

Plaintiffs, v. Civil Action No. 18-769 (JEB) STEVEN TERNER MNUCHIN,

Defendant.

MEMORANDUM OPINION

Plaintiff Henry Klein, a New Orleans attorney, is exercised by what he perceives as the

abuses of the title-insurance industry. To address these ills, he filed this pro se suit seeking a writ

of mandamus to compel the Secretary of the Treasury either to include information on the

industry in his annual reporting to Congress or to declare that title insurance is not “insurance”

under federal law. The Government has filed a Motion to Dismiss, contending that mandamus

jurisdiction does not exist here. Because this Court agrees, it will grant the Motion and dismiss

the Complaint without prejudice. It will, however, give Plaintiff an opportunity to cure this

jurisdictional defect by filing an Amended Complaint within 20 days if he so chooses.

I. Background

The Dodd-Frank Wall Street Reform and Consumer Protection Act established the

Federal Insurance Office within the Department of the Treasury. See 31 U.S.C. § 313(a). The

FIO has the authority to, inter alia, “monitor all aspects of the insurance industry,” “monitor the

extent to which traditionally underserved communities and consumers . . . have access to

affordable insurance products,” and “develop [f]ederal policy on prudential aspects of

international insurance matters.” Id. § 313(c)(1)(A), (B), (E). In addition, it submits an annual

1 report to Congress “on the insurance industry and any other information as deemed relevant by

the [agency] or requested by [Congress].” Id. § 313(n)(2).

Plaintiff brings this action for mandamus against Secretary of Treasury Steven Mnuchin,

alleging that the Act requires the Secretary either to declare that title insurance is not “insurance”

under federal law or to add title insurance to the FIO’s annual reporting. See ECF No. 1

(Complaint), ¶¶ 5, 42–44. The Secretary has moved to dismiss for lack of jurisdiction. See ECF

No. 11 (Motion to Dismiss).

II. Legal Standard

When the defendant files a Rule 12(b)(1) motion to dismiss, the plaintiff must

demonstrate that the Court indeed has subject-matter jurisdiction to hear his claims. See Lujan v.

Defenders of Wildlife, 504 U.S. 555, 561 (1992); U.S. Ecology, Inc. v. U.S. Dep’t of Interior,

231 F.3d 20, 24 (D.C. Cir. 2000). “Because subject-matter jurisdiction focuses on the court’s

power to hear the plaintiff’s claim, a Rule 12(b)(1) motion [also] imposes on the court 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)) (alteration in original). In policing its jurisdictional borders, the Court must

scrutinize the complaint, treating its factual allegations as true and granting the plaintiff the

benefit of all reasonable inferences that can be derived from the alleged facts. See Jerome

Stevens Pharms., Inc. v. FDA, 402 F.3d 1249, 1253 (D.C. Cir. 2005).

2 III. Analysis

The only jurisdictional basis invoked in Plaintiff’s Complaint is mandamus. See Compl.,

¶¶ 1–2, 22–28. The Court thus begins and ends by evaluating whether mandamus jurisdiction

exists in this case. Mandamus relief is “drastic” and available “only in extraordinary situations.”

In re Cheney, 406 F.3d 723, 729 (D.C. Cir. 2005) (en banc) (citation omitted). To establish

mandamus jurisdiction, Plaintiff must demonstrate that (1) he has “a clear right to relief,” (2) the

Secretary has “a clear duty to act,” and (3) he has “no other adequate remedy available.” Power

v. Barnhart, 292 F.3d 781, 784 (D.C. Cir. 2002). Here Klein’s jurisdictional showing suffers

from two independent defects: the Secretary has no clear duty to act, and there is an adequate

alternate remedy.

The relevant statutory provision requires the Secretary to provide a report to Congress

“on the insurance industry and any other information as deemed relevant by the [agency] or

requested by [Congress].” Id. § 313(n)(2). The contours of the insurance industry and the

relevance of additional information are within the Secretary’s discretion absent some additional

specific request from Congress. Mandamus is inappropriate to compel performance of a

discretionary duty. Rather, “the writ is . . . reserved only for the most transparent violations of a

clear duty to act.” In re Bluewater Network, 234 F.3d 1305, 1315 (D.C. Cir. 2000). If the duty

“depends on a statute or statutes the construction or application of which is not free from doubt,

it is regarded as involving the character or judgment or discretion which cannot be controlled by

mandamus.” Consolidated Edison Co. of N.Y. v. Ashcroft, 286 F. 3d 600, 605 (D.C. Cir. 2002)

(quoting Wilbur v. United States, 281 U.S. 206, 218–19 (1929)). To the extent Klein seeks, in

the alternative, to have the Secretary declare title insurance not to be “insurance” under federal

3 law, see Compl., ¶¶ 5, 42–44, he likewise points to no source of law rendering that a clear duty to

act.

In addition, Plaintiff has not demonstrated the absence of an adequate alternate remedy.

There is no reason he could not bring essentially the same suit under the Administrative

Procedure Act, alleging agency action unlawfully withheld. See 5 U.S.C. § 706(1). Specifically,

Klein could allege under the APA that Dodd-Frank, by its terms, requires the Secretary to include

title insurance in any report on the insurance sector. Where there is such an alternative,

mandamus cannot issue. See Fornaro v. James, 416 F.3d 63, 69 (D.C. Cir. 2005). In so finding,

the Court does not endorse the merits of such APA claim, which would likely face an uphill

climb.

Rather than dismiss the case for lack of jurisdiction, however, the Court will dismiss only

the Complaint. See Ciralsky v. CIA, 355 F.3d 661, 669–70 (D.C. Cir. 2004) (recognizing district

court had appropriately exercised discretion in dismissing Complaint but not entire case). It will

give Plaintiff 20 days to file, if he so elects, an Amended Complaint that permits the Court to

exercise jurisdiction. The Court notes that, although it did not reach the question of standing in

this Opinion, any Amended Complaint setting out an alternate basis for Plaintiff’s claims must

also demonstrate that standing exists to pursue that form of relief.

IV. Conclusion

For these reasons, the Court will grant Defendant’s Motion to dismiss the Complaint but

allow Plaintiff, if he so chooses, to file an Amended Complaint by January 24, 2019. A separate

Order so stating will issue this day.

/s/ James E. Boasberg JAMES E. BOASBERG United States District Judge Date: January 4, 2019