Eddie Wise v. Tom Vilsack ( 2012 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 11-1271
EDDIE WISE; DOROTHY MONROE-WISE,
Plaintiffs – Appellants,
and
ALL PLAINTIFFS,
Plaintiff,
v.
TOM VILSACK, Secretary, U.S. Department of Agriculture,
Defendant – Appellee.
Appeal from the United States District Court for the Eastern
District of North Carolina, at Raleigh. Terrence W. Boyle,
District Judge. (5:10-cv-00197-BO)
Argued: September 19, 2012 Decided: November 1, 2012
Before GREGORY, SHEDD, and AGEE, Circuit Judges.
Affirmed by unpublished per curiam opinion.
ARGUED: Dwight E. Jefferson, COATS, ROSE, YALE, RYMAN & LEE, PC,
Houston, Texas, for Appellants. Neal Fowler, OFFICE OF THE
UNITED STATES ATTORNEY, Raleigh, North Carolina, for Appellee.
ON BRIEF: Thomas G. Walker, United States Attorney,
Jennifer May-Parker, Assistant United States Attorney, OFFICE OF
THE UNITED STATES ATTORNEY, Raleigh, North Carolina, for
Appellee.
Unpublished opinions are not binding precedent in this circuit.
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PER CURIAM:
Appellants Eddie and Dorothy Wise (“the Wises”) appeal the
district court’s dismissal of their Equal Credit Opportunity Act
(“ECOA”), 15 U.S.C. § 1691 et seq. discrimination claim under
Federal Rule of Civil Procedure 12(b)(6). Because Appellants
failed to plead any facts comparing their treatment to the
treatment of non-minority applicants, we affirm the district
court’s dismissal.
I.
On October 19, 2000, nine African-American and female
farmers brought a class action suit in the District Court for
the District of Columbia alleging that the United States
Department of Agriculture (“USDA”) had discriminated against
them on the basis of sex and race by denying access to credit
and other benefits. Plaintiffs brought various claims,
including the ECOA discrimination claim currently before this
Court. In 2003, the District Court for the District of Columbia
stayed the entire action pending resolution of related
litigation. In 2007, the court denied Plaintiffs’ motion to
certify a class, and transferred venue to the Eastern District
of North Carolina. In 2010, the district court lifted the stay
and severed the distinct discrimination claims of the eight
remaining plaintiffs, including the Wises’ claim before this
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Court. The Wises did not seek leave to amend their complaint
after severance, nor after the district court’s grant of the
motion to dismiss.
The Wises allege that in 1991, they initiated the process
for purchasing a 105.4 acre farm known as the “Lynch farm,” that
was held in the inventory of the United States Department of
Agriculture by the Farmers Home Administration (FmHA). The FmHA
identified the Lynch farm, located in Nash County, North
Carolina, as suitable for 250 swine and targeted the property
for “socially disadvantaged applicants.” The Wises allege that
when they attempted to obtain loans to purchase the Lynch farm,
the local County Supervisor for USDA, F. Sidney Long,
discriminated against them because they were African-American
by: failing to provide them with loan applications when
requested; failing to provide technical support; failing to
submit their applications to USDA in a timely manner; failing to
appropriately assist and advise them; failing to process their
completed applications; summarily denying their loan
applications; and retaliating against them for appealing Long’s
decision and filing complaints of discrimination with the USDA.
The Wises also allege that the USDA failed to properly
investigate complaints of discrimination they submitted to the
USDA.
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USDA filed a motion to dismiss under Fed. R. Civ. P.
12(b)(6), or alternatively, for summary judgment. The district
court granted the motion under 12(b)(6). The Wises appealed to
this Court.
II.
We review de novo the decision of a district court to grant
or deny a motion to dismiss pursuant to Fed. R. Civ. P.
12(b)(6). Brockington v. Boykins, 637 F.3d 503, 505 (4th Cir.
2011). A Rule 12(b)(6) motion challenges the legal sufficiency
of a plaintiff’s complaint. Francis v. Giacomelli, 588 F.3d
186, 192 (4th Cir. 2009). In evaluating legal sufficiency, the
Court assumes that all alleged facts are true. Eastern Shore
Markets v. J.D. Associates, 213 F.3d 175, 180 (4th Cir. 2000).
While detailed factual allegations are not required, the
complaint must contain more than “a formulaic recitation of the
elements of a cause of action.” Bell Atlantic Corp. v. Twombly,
550 U.S. 544, 555 (2007). The complaint must plead sufficient
facts to establish “facial plausibility . . . that allows the
court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009).
ECOA establishes that it is “unlawful for any creditor to
discriminate against any applicant . . . on the basis of race.”
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15 U.S.C. § 1691(a)(1). Most courts that have considered ECOA
discrimination claims have allowed plaintiffs to proceed under
the burden-shifting framework laid out by the U.S. Supreme Court
in McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973), in the
context of Title VII employment discrimination. See, e.g.,
Lewis v. ACB Business Services, Inc. 135 F.3d 389, 406 (6th Cir.
1998); Mercado-Garcia v. Ponce Fed. Bank, 979 F.2d 890, 893 (1st
Cir. 1992); Cooley v. Sterling Bank, 280 F. Supp. 2d 1331, 1338
(M.D. Ala. 2003); Davis v. Strata Corp., 242 F. Supp. 2d 643,
651-52 (D.N.D. 2003); Gross v. United States Small Bus. Admin.,
669 F.Supp. 50, 53 (N.D.N.Y. 1987), aff’d 867 F.2d 1423 (2d Cir.
1988). But see Latimore v. Citibank Fed. Sav. Bank, 151 F.3d
712, 715 (7th Cir. 1998). We followed suit in our sole
unpublished opinion on the subject. See Crestar Bank v. Driggs,
995 F.2d 1062 (4th Cir. 1993). Applying McDonnell Douglas in
the ECOA context, the Wises had to set forth a prima facie case
consisting of four elements: 1) they are members of a protected
class; 2) they applied for and were qualified for an extension
of credit; 3) USDA’s office in Nash County rejected their
application for credit despite their qualifications; and 4) USDA
continued to extend credit to others of similar credit stature
outside of the Wises’ protected class. See Rowe v. Union
Planters Bank of Southeast Missouri, 289 F.3d 533, 535 (8th Cir.
2002).
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The district court determined that even though the Wises
pled sufficient facts to establish that they are members of a
protected class, applied for an extension of credit, and were
rejected despite their qualifications, ∗ the complaint was “devoid
of any plausible substantive allegations” that established the
fourth prong -- that non-minority applicants of similar credit
stature were extended credit or were otherwise given more
favorable treatment than plaintiffs.
The Wises argue that the multiple allegations of improper
treatment by Supervisor Long and the USDA establish the fourth
prong of McDonnell Douglas. While the Wises’ complaint
describes what might be considered harassment, it does not set
forth any facts alleging that non-minority credit applicants
were treated different than they were treated. Neither the four
paragraphs setting forth the facts relevant to their specific
case in the complaint, nor the class complaint read as a whole,
compares Supervisor Long’s treatment of the Wises to any non-
minority credit applicant of similar credit stature in Nash
County.
∗
The Wises alleged in their complaint that they appealed
the denial of their loan to the USDA National Appeals Division
and prevailed. As such, they are entitled to an inference at
the 12(b)(6) stage that they have satisfied the third prong of
the prima facie case.
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The Wises argue for the first time on appeal that reports
by the Office of Inspector General and Civil Rights Action Team
along with the settlement in the high profile Pigford v.
Glickman class action lawsuit establish that there was a pattern
or practice of discrimination at USDA that establishes that
Appellants were treated different than white farmers. See 185
F.R.D. 82 (D.D.C. 1999).
This Court has not had occasion to decide whether a
plaintiff in an ECOA discrimination claim is limited to the
standard approach requiring a comparator, or whether a plaintiff
can put forward pattern-or-practice evidence to fulfill the
fourth prong of a prima facie case. We do not reach this
question here because the Wises did not raise the issue below.
Generally, a federal appellate court does not rule on issues
that are not presented to the district court. Singleton v.
Wulff, 428 U.S. 106, 120 (1976). This Court has repeatedly held
that issues which are not raised at the district court level
will not be considered on appeal unless exceptional
circumstances exist such that “refusal to consider the newly-
raised issue would be plain error or would result in a
fundamental miscarriage of justice.” Holland v. Big River
Minerals, 181 F.3d 597, 605 (4th Cir. 1999) (quoting Muth v.
United States, 1 F.3d 246, 250 (4th Cir. 1993)). The Wises’
attempt at introducing this new pattern-or-practice theory of
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the case for the first time on appeal is only acceptable if
there are exceptional circumstances present. See Muth, 1 F.3d
at 250 (ruling that Appellant could not bring forward new
theories for the first time on appeal to avoid statute of
limitations unless exceptional circumstances existed). The
Wises do not attempt to identify any exceptional circumstances
that would justify this Court’s consideration of a new theory
that they did not present to the district court. As such, we do
not consider the viability of using pattern-or-practice evidence
to establish the fourth prong of a prima facie case or whether
the pattern-or-practice evidence in this case has any effect on
the Wises’ effort to satisfy the relevant pleading requirements.
Similarly, the Wises’ argument on appeal that they have
successfully pled discrimination under direct evidence and
disparate impact theories fails because they did not raise these
theories at the district court level.
For the foregoing reasons, we affirm the judgment of the
district court.
AFFIRMED
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