Klein v. Mnuchin ( 2019 )

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
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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).
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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
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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
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