Summary of a Recent
Judicial Development in
Finance & Credit

Case Dismissed for Lack of "Eligible Complaint"

Walt McCarter
National AgLaw Center Research Associate

Summary of Decision

In Allen v. U.S., No. 03-92C, 2005 WL 6112631 (Fed. Cl. May 10, 2005), the United States Court of Federal Claims held that the plaintiffs had not submitted an "eligible complaint" because it did not sufficiently describe the alleged discrimination, and therefore dismissed the case for lack of jurisdiction.

Background

Plaintiffs obtained an operating loan and a farm ownership loan from Farmers Home Administration (FmHA). Id. at *1. Both parties agreed that Parcels A, B, D, and E were pledged as collateral, but the plaintiffs asserted that they never agreed to pledge Parcel C, their homestead. Id. FmHA claimed that all the loan documents indicated that Parcel C was being used to secure the loan, and the plaintiffs had also signed a form notifying them that the property was not exempt from foreclosure. Id. Plaintiffs claimed that they carefully reviewed all the documents and Parcel C was not mentioned, and even testified that they specifically objected to the inclusion of Parcel C in a conversation with their loan officer, after which the issue was not brought up again. Id. Years later, when the plaintiffs sought financing to purchase a semi truck and trailer, they discovered the encumbrance on Parcel C. Id. at *2. They filed a complaint with the USDA, which was dismissed, and they were told they had 180 days to appeal. Id. The plaintiffs then filed this action in the United States Court of Federal Claims, asserting several causes of action, and the government filed a motion to dismiss. Id.

Arguments

The government argued that the plaintiffs' claims were barred by the six-year statute of limitations of 28 U.S.C. § 2501, and that the court could not hear the claims because the plaintiffs failed to submit an "eligible complaint." Id. at *3. Plaintiffs argued that they sought to exhaust their administrative remedies prior to bringing suit in the Federal Claims Court, and that their claims were brought in a timely manner in accordance with 7 U.S.C. § 2279(c) and 7 C.F.R. § 15f.26. Id.

Analysis and Holdings

The court found that it was undisputed from the facts and from the plaintiffs' own pleadings that they were aware that Parcel C was used to secure their loan, and had been aware of it for over six years. Id. at *4. However, the plaintiffs were allowed to seek administrative review pursuant to 7 U.S.C. § 2279(b) before bringing suit in a federal court, which they did, and they were permitted to appeal the USDA's holding within 180 days, which they also dId. Id. at *5. The government argued that the Federal Claims Court lacked jurisdiction because the USDA had determined the plaintiffs had not submitted an "eligible complaint" since they had not alleged discrimination with the requisite degree of specificity. Id. The court rejected that argument, stating that § 2279 did not limit the court's review only to "eligible complaints," but provided for "judicial review of a determination in an administrative proceeding in the Department of Agriculture." Id. at *6. The court held that the USDA's finding that the plaintiffs had failed to file an eligible complaint was "a determination in an administrative proceeding" subject to review, and reasoned that to hold otherwise would effectively preclude judicial review any time an agency determined that an "eligible complaint" was lacking. Id. Upon review, however, the court affirmed the USDA's determination that the plaintiffs had not filed an "eligible complaint," and dismissed their case for lack of jurisdiction. Id. at *7.

The case was decided on May 10, 2005