COLLEEN KOLLAR-KOTELLY, United States District Judge
Plaintiffs filed suit on August 14, 2015 against the United States Department of Agriculture ("USDA") and several individuals in their official and individual capacities
Upon consideration of the pleadings,
As stated in the complaint, pro se Plaintiffs, Eddie and Dorothy Wise, are the operators of a livestock farm in Nash County, North Carolina. Compl. ¶ 2. Plaintiffs have previously received farm operating loans under the USDA-FSA Farm Loan Program. Id. ¶ 7-9. In September 1997, the Farm Service Agency Loan Manager assigned to Plaintiffs was relocated, and Plaintiffs were assigned a new Loan Manager. Id. ¶ 7-8. In January 2011, this Loan Manager retired, and Plaintiffs were subsequently assigned their current Loan Manager. Id. 1013. Plaintiffs allege that despite a request for assistance, their new Loan Manager did not provide any help in developing Plaintiffs' 2012 farm operating plan. Id. ¶ 14. Plaintiffs instead secured the assistance of their former, now retired Loan Manager, and submitted the required documents in January 2012. Id. ¶ 14.
On March 27, 2012, Plaintiffs' Loan Manager prepared a farm operating plan based on the information provided by Plaintiffs that "projected negative net operating inflows and negative net cash available from the projected livestock and poultry sales" from their farm. Id. ¶ 16. Based on this projection, Plaintiffs' Loan Manager informed them that they did not qualify for any FSA Primary Loan Servicing programs. Id. ¶ 17. Plaintiffs subsequently submitted a Farm Business Plan Worksheet that projected their cash flow for 2012 using their own historical sales
In June 2012, a third farm operating plan was prepared by the Loan Manager, further reducing the anticipated sales of livestock and repeating the projection of negative cash flow. Id. ¶ 23. Because Plaintiffs' farm does not generate sufficient income to pay $3,100.00 per month, they have defaulted on their obligations due under the promissory note. Id. ¶ 26. Plaintiffs allege that qualification for the USDA-FSA Primary Loan Servicing Program would have allowed them to make payments that are "substantially less" than the Plaintiffs' annual non-farm income, thereby enabling Plaintiffs to meet their payment obligations under the promissory note to the USDA-FSA. Id. ¶ 27-28. Plaintiffs allege that their Loan Manager approved farm operating plans of "similarly situated white Caucasian livestock farmers," and that the "rejection of [their] application to participate in a USDA-FSA Primary Loan Servicing Program [was] based upon [their] race." Id. ¶ 27-31. Although Plaintiffs met multiple times with the State Director of the USDA-FSA to seek reversal of the USDA-FSA's decision, these meetings were unsuccessful. Id. ¶ 33.
Plaintiffs allege that the decisions taken by their Loan Manager were "willful and taken in known and reckless disregard[] of the Plaintiff[s'] rights under the Equal Credit Opportunity Act" and that as a "direct and proximate result of the discriminatory actions and omissions" of the USDA, Plaintiffs have "suffered actual damages and several emotional distress." Id. ¶ 37. Plaintiffs further allege that the Government "violated the Pigford Consent Decree by attempting to foreclose on the subject property [and] by failing to provide a hearing on the merits by [the] Office of the Monitor and a hearing on the merits by the Administrative Law Judge for continuous discriminatory acts because the Plaintiffs are black and members of a protective class[,] in accordance to 14012 of the Consent Decree and the 2008 Food Energy Conservation Act." Id. ¶ 52. Plaintiffs seek damages of $5,000,000 and bring claims under several state and federal statutes, inter alia, the Equal Credit Opportunity Act ("ECOA"), the Administrative Procedure Act ("APA"), N.C. General Statute § 1-52(9), and 42 U.S.C. §§ 1983, 1985, 1986. Id. ¶ 38-50.
Plaintiffs filed this action on August 14, 2015. Id. Plaintiffs filed their Motion for Preliminary Injunctive Relief on August 31, 2015, seeking to enjoin a foreclosure action brought by the United States in the Eastern District of North Carolina, United States v. Wise, No. 5:14-CV-844-FL (E.D.N.C. Nov. 19, 2014) ("the Foreclosure Action"). Pls.' Mot. at 1. Plaintiffs' Motion for Preliminary Injunctive Relief seeks to enjoin the Foreclosure Action until a separate case brought by Plaintiffs in the Court of Federal Claims "has commenced and/or the case has been resolved."
A temporary restraining order or preliminary injunction is "an extraordinary remedy that may only be awarded upon a clear showing that the plaintiff is entitled to such relief." Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 21, 129 S.Ct. 365, 172 L.Ed.2d 249 (2008). A plaintiff seeking a preliminary injunction must establish (1) that he is likely to succeed on the merits, (2) that he is likely to suffer irreparable harm in the absence of preliminary relief, (3) that the balance of the equities tips in his favor, and (4) that an injunction would be in the public interest. Id. at 20, 129 S.Ct. 365. "The four factors have typically been evaluated on a `sliding scale.'" Davis v. Pension Benefit Guar. Corp., 571 F.3d 1288, 1291 (D.C.Cir.2009). Under this sliding scale, "[i]f the movant makes an unusually strong showing on one of the factors, then it does not necessarily have to make as strong a showing on another factor." Id. at 1291-92.
"It is particularly important for the [movant] to demonstrate a substantial likelihood of success on the merits." Barton v. District of Columbia, 131 F.Supp.2d 236, 242 (D.D.C.2001) (citing Benten v. Kessler, 505 U.S. 1084, 1085, 112 S.Ct. 2929, 120 L.Ed.2d 926 (1992)). If the movant fails to do so, inquiry into the remaining factors is unnecessary, for the injunctive relief must be denied on that ground alone. See Transohio Sav. Bank v. Dir., Off. of Thrift Supervision, 967 F.2d 598, 614 (D.C.Cir.1992) (affirming denial of preliminary injunction where the district court properly concluded that the plaintiff had "no likelihood of success on the merits"); Katz v. Georgetown Univ., 246 F.3d 685, 688 (D.C.Cir.2001) ("[A]lthough we apply a four-factor test in weighing a request for a preliminary injunction, such relief never will be granted unless a claimant can demonstrate `a fair ground for litigation.'") (quoting Wash. Metro. Area Transit Comm'n v. Holiday Tours, Inc., 559 F.2d 841, 844 (D.C.Cir.1977)); Taylor v. Resolution Trust Corp., 56 F.3d 1497, 1507 (D.C.Cir.) ("Given the inadequacy of [plaintiff]'s prospects for success on the merits, there may be no showing of irreparable injury that would entitle him to injunctive relief."), amended on other grounds on reh'g, 66 F.3d 1226 (D.C.Cir.1995). In addition, the movant must establish that irreparable injury is likely, "not just a possibility."
Through their Motion for Preliminary Injunctive Relief, Plaintiffs seek to enjoin the Foreclosure Action currently before the U.S. District Court in the Eastern District of North Carolina. In order for the Court to grant injunctive relief, Plaintiffs must establish (1) that they are likely to succeed on the merits, (2) that they are likely to suffer irreparable harm in the absence of preliminary relief, (3) that the balance of the equities tips in their favor, and (4) that an injunction would be in the public interest. Winter, 555 U.S. at 20, 129 S.Ct. 365.
A plaintiff seeking a preliminary injunction must first establish that he is likely to succeed on the merits. Id. At minimum, the plaintiff must demonstrate that he has a "fair ground for litigation" and that plaintiff's claims are worthy of "more deliberative investigation." Wash. Metro. Area Transit Comm'n, 559 F.2d at 841. Where the plaintiff demonstrates little to no likelihood of success on the merits, the district court must deny injunctive relief. See Transohio Sav. Bank, 967 F.2d at 614.
Plaintiffs argue that they are likely to succeed on the merits, citing to the facts alleged in the Complaint. Defendants argue that the Plaintiffs are unlikely to succeed on the merits because Plaintiffs' claims are barred under the first-to-file rule and the doctrine of res judicata. See Defs.' Opp'n at 2.
This is not the first time that Plaintiffs have attempted to litigate claims based on the denial of the Plaintiffs' farm operating loan in 2012. Plaintiffs made identical allegations via a counterclaim in the Foreclosure Action currently pending in the U.S. District Court for the Eastern District of North Carolina. See Counterclaim against USDA, et al., United States v. Wise, No. 5:14-CV-844-FL (E.D.N.C. Dec. 02, 2014). In the Foreclosure Action, the court dismissed the counterclaims under the doctrine of res judicata, or collateral estoppel. See Text Order, United States v. Wise, No. 5:14-CV-844-FL (E.D.N.C. June 29, 2015). Res judicata barred the counterclaims because they were "essentially identical" to the claims dismissed with prejudice in an earlier case also brought by Plaintiffs containing identical discrimination allegations against the Government. See Wise v. U.S. Dep't of Agric., No. 4:13-CV-234-BO, 2014 WL 5460606, at *4 (E.D.N.C. Oct. 27, 2014) aff'd, 592 Fed. Appx. 203 (4th Cir.2015) (denying plaintiffs leave to file a second amended complaint because doing so would be "futile"). The court's dismissal of the counterclaims is not final, however, because the Foreclosure Action is still pending. If Plaintiffs do not prevail, the Plaintiffs will have a right to appeal the decision once a final judgment is entered.
Under the first-to-file rule, district courts have the discretion to dismiss a pending action when faced with parallel litigation of factually related actions filed in two separate forums. Handy v. Shaw, 325 F.3d 346, 349 (D.C.Cir.2003). As the Supreme Court has observed, "though no precise rule has evolved, the general principle is to avoid duplicative litigation" between federal district courts. Colo. River Water Conservation Dist. v. United States, 424 U.S. 800, 817, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976) (citations omitted). "The usual rule in this circuit has been that where two cases between the same parties on the same cause of action are
In some circumstances, equitable considerations may lead a court to depart from the usual application of the first-to-file rule, but no such considerations appear to apply to the instant case. See Stone & Webster, Inc. v. Georgia Power Co., 965 F.Supp.2d 56 (D.D.C.2013) aff'd, 779 F.3d 614 (D.C.Cir.2015) (stating that equitable considerations under the first-to-file rule may include whether the first action was filed in the midst of good faith settlement discussions; whether the cases have progressed very far; and whether full, fair, and complete adjudication of all issues may be had before the present court). The United States' foreclosure action was brought in North Carolina, the State where the property is located, where the Plaintiffs live, where the individuals named in the instant case reside, and where the events at issue in the case occurred. See Compl. ¶ 1-33. The Foreclosure Action was brought nearly nine months before the instant case was filed, and the United States' summary judgment motion in that case is ripe for a decision by the court in North Carolina as to whether the requested foreclosure on the property at issue has legal merit. See Amended Notice of Hearing, United States v. Wise, No. 5:14-CV-844-FL (E.D.N.C. Sept. 4, 2015). Under these facts, there does not appear to be any equitable basis for departing from the usual rule in this Circuit for the application of the first-to-file rule. See Stone & Webster, 965 F.Supp.2d at 60. Accordingly, the first-to-file rule is likely to bar this action from proceeding.
Under the doctrine of res judicata, or claim preclusion, "a final judgment on the merits of an action precludes the parties or their privies from relitigating issues that were or could have been raised in that action." Sheppard v. District of Columbia, 791 F.Supp.2d 1, 4 (D.D.C.2011) (quoting Drake v. FAA, 291 F.3d 59, 66 (D.C.Cir.2002)). "A judgment on the merits is one that `reaches and determines the real or substantial grounds of action or defense as distinguished from matters of practice, procedure, jurisdiction or form.'" Id. at 7 (quoting Saylor v. Lindsley, 391 F.2d 965, 968 (2d Cir.1968) (internal citations omitted)) (citing Nwachukwu v. Karl, 222 F.R.D. 208, 212 (D.D.C.2004) (noting the judicial goal of "deciding cases on their merits, as opposed to procedural mishaps dictating the outcome")). A decision on a motion to dismiss under Rule "12(b)(6) presents a ruling on the merits with res judicata effect." Haase v. Sessions, 835 F.2d 902, 906 (D.C.Cir.1987). "Whether two cases implicate the same cause of action turns on whether they share the same `nucleus of facts.'" Drake, 291 F.3d at 66 (quoting Page v. United States, 729 F.2d 818, 820 (D.C.Cir.1984)). To determine whether two cases share the same nucleus of facts, courts consider "whether the facts are related in time, space, origin, or motivation[;] whether they form a convenient trial unit[;] and whether their treatment as a unit conforms to the parties' expectations or business understanding or usage." Stanton v. D.C. Court of Appeals, 127 F.3d 72, 78 (D.C.Cir.1997) (quotation omitted). In short, in deciding whether res judicata applies, the Court must consider "if there has been prior litigation (1) involving the same claims or cause of action, (2) between the same parties or their privies, and (3) there has been a final, valid judgment on the merits, (4) by a court of competent jurisdiction." NRDC v. EPA, 513 F.3d 257,
Here, Plaintiffs' claims are likely barred by res judicata because all four factors appear to be met. The earlier litigation filed by Eddie Wise and Dorothy Wise against the Government involved identical allegations relating to the denial of Plaintiffs' farm loan in 2012. See Wise v. U.S. Dep't of Agric., No. 4:13-CV-234-BO, 2014 WL 5460606 (E.D.N.C. Oct. 27, 2014) aff'd, 592 Fed.Appx. 203 (4th Cir.2015). The claims in Plaintiffs' complaint are identical to Plaintiffs' claims in the second amended complaint filed in the earlier action, with the exception that Plaintiffs' complaint adds a claim alleging that they are class members of the class action, Pigford v. Glickman, 182 F.R.D. 341 (D.D.C.1998), and that the Defendants violated the Pigford Consent Decree by attempting to foreclose on Plaintiffs' property.
Turning to the next res judicata factor, the earlier litigation involved all of the parties involved in this case. See Wise v. U.S. Dep't of Agric., No. 4:13-CV-234-BO, 2014 WL 5460606 (E.D.N.C. Oct. 27, 2014) aff'd, 592 Fed.Appx. 203 (4th Cir.2015). Finally, the court's judgment was a "final, valid judgment" by a "competent jurisdiction." The court dismissed Plaintiffs' ECOA claim, holding that Plaintiffs could not establish that they "were qualified for an extension of credit and that other similar situated applicants outside of plaintiffs' class were treated more favorably." Id. at *3. The court also dismissed Plaintiffs' APA claim, stating that the Plaintiffs "have not even attempted to set out the elements of their APA cause of action." Id. The court denied Plaintiffs leave to file a second amended complaint, stating that the amendment was "futile." Id. at *4. These judgments were affirmed by the U.S. Court of Appeals for the Fourth Circuit. See Wise, 592 Fed.Appx. at 203. Accordingly, Plaintiffs' claims are likely barred by res judicata.
Even if the Plaintiffs could demonstrate that they are likely to succeed on the merits, Plaintiffs have not shown that they are likely to suffer "irreparable harm" in the absence of injunctive relief. In order to establish irreparable harm, a plaintiff must show that its injury is "great, actual, and imminent." Hi-Tech Pharmacal Co. v. U.S. Food & Drug Admin., 587 F.Supp.2d 1, 11 (D.D.C.2008).
In certain circumstances, a party facing an "immediate" foreclosure sale of his property on a "date certain" will suffer "irreparable harm" in the absence of preliminary relief, but no such circumstances exist here. See Patriot-BSP City Ctr. II v. U.S. Bank Nat. Ass'n, 715 F.Supp.2d 91, 95 (D.D.C.2010) (concluding that plaintiffs demonstrated a "substantial likelihood" that they would face "actual and imminent harm" if the court did not enjoin the foreclosure sale of plaintiffs' property scheduled to occur within the week). Plaintiffs do not face an "immediate" sale of their property, nor is a sale scheduled to occur at a certain date or time. By contrast, the court in North Carolina has scheduled a hearing for September 14, 2015, at which the court may make a decision on the merits of the foreclosure action. Even if the court rules against Plaintiffs at the hearing, Plaintiffs would have a right to appeal that decision to the Fourth Circuit. Plaintiffs' right to appeal would provide Plaintiffs with an "adequate legal remedy" in the absence of injunctive relief. See Monument Realty, 540 F.Supp.2d at 74 (D.D.C.2008). Accordingly, Plaintiffs are not likely to suffer "irreparable harm" in the absence of an injunction.
Finally, a plaintiff seeking a preliminary injunction must establish that the balance of the equities tips in its favor, and that an injunction would be in the public interest. Winter, 555 U.S. at 20, 129 S.Ct. 365. Here, an injunction would be not be in the public interest. Plaintiffs' Motion for Preliminary Injunctive Relief seeks an order enjoining another federal court from adjudicating matters that have been briefed by the parties, are ripe for a decision, and are appealable to Fourth Circuit. See United States v. Wise, No. 5:14-CV-844-FL (E.D.N.C. Nov. 19, 2014). Such an order would violate the principles of comity that govern relationships among federal district courts. See American Chemical Paint Company v. Thompson Chemical Corporation, 244 F.2d 64, 66-67 (9th Cir.1957) ("Considerations of comity and judicial restraint should deter one court from thus, in effect, overruling the decisions of a court of co-ordinate jurisdiction."). Accordingly, an injunction would be not be in the public interest.
For the foregoing reasons, the Court DENIES Plaintiffs' [3] Emergency Motion for Temporary Restraining Order and Emergency Motion to Set Hearing for Preliminary Injunction. The Court will rule on Defendants' [4] Motion to Dismiss at a later time, after the motion has been fully briefed by both parties.
An appropriate Order accompanies this Memorandum Opinion.
