Administrative Procedures Act

In Nassau Financial Federal Credit Union v. National Credit Union Administration Board and United States of America, 22 CV 39 (EDNY, Dec. 20, 2022), Judge Kovner granted defendants’ motion to dismiss for lack of subject matter jurisdiction pursuant to Fed. R. Civ. P. 12(b)(1).

In July 2009, plaintiff entered into a loan participation agreement with the League of Mutual Taxi Owners Federal Credit Union (LOMTO). Plaintiff ultimately purchased a 90% interest in five loans totaling about $5 million.

After the borrowers defaulted on the loans for a second time in 2016, LOMTO sought to foreclose on the loan collateral in state court. Due to solvency concerns, defendant Board of the National Credit Union Administration (NCUA) placed LOMTO under conservatorship in 2017 and into involuntary liquidation in 2018. As the liquidating agent, in 2019 NCUA entered into an agreement with the borrowers to restructure the loans, but the borrowers again defaulted in 2020, at which time NCUA began proceedings to foreclose on the collateral. The borrowers offered to settle for $3.5 million, which NCUA accepted over plaintiff’s objection.

In 2021, plaintiff sent NCUA a proof of claim, asserting that NCUA breached the loan participation agreement that plaintiff entered into with LOMTO. NCUA disallowed the claim, and plaintiff’s appeal to the NCUA Board and subsequent claim to the NCUA’s Office of General Counsel were denied. Plaintiff brought suit.

Defendants moved to dismiss for lack of subject matter jurisdiction. They argued that judicial review of plaintiff’s claims was available only under the APA, 5 U.S.C. §551 et seq., and plaintiff had not brought an APA claim.

The court also dismissed plaintiff’s claims under the Federal Tort Claims Act (FTCA) because claims for breach of contract were not cognizable under the FTCA and plaintiff’s additional claims were not cognizable as torts under New York law. Slip op. 6-7

Perishable Agricultural Commodities Act

Plaintiff sought to reverse an order of the U.S. Department of Agriculture that declined to reopen a default order directing non-party Raz Trading to make a payment to non-party Field Fresh Farms as reparation for an unpaid balance on a sales order. Plaintiff also sought unspecified relief for the denial of plaintiff’s entry to the Hunts Point Terminal Market in the Bronx, assertedly in violation of PACA and “the ‘Civil Rico Act.’” Slip op. 1-2 (quoting complaint).

Any challenge to an order under PACA must be filed “in the judicial district in which the administrative hearing was held”, and the challenging party must post a bond within 30 days of the challenged order. 7 U.S.C. §499g(c). “Those requirements are ‘jurisdictional,’ meaning the district court has no authority to review a PACA order” if they are not met. Slip op. 3.

Because the challenged order issued from the Department’s Washington, D.C. office and the statutory time had passed without a bond being posted, Donnelly found, sua sponte, that the complaint’s challenge to the PACA order did not fall within the Court’s subject matter jurisdiction. Dismissal was also warranted because the respondent on the PACA Docket was not plaintiff but rather non-party Raz Trading, “presumably a company the plaintiff owns,” which plaintiff, as a pro se non-attorney, could not represent. Slip op. 3-4, n.1.

Nor was there federal jurisdiction for plaintiff’s claim regarding his exclusion from the Hunts Point Market Terminal. Federal agencies cannot be sued in diversity because a federal agency is not a citizen of any state, and federal question jurisdiction was lacking because plaintiff did not explain how the federal authorities he cited—PACA, RICO and the Fifth, Sixth, Seventh and Fourteenth Amendments to the U.S. Constitution—bore on his case. Plaintiff’s sole effort to do so, by reference to 5 USC §522a(g)(1)(c)(g)(4), failed because that subdivision does not exist, and assuming plaintiff intended to refer to §522a(g)(1)(C) and (g)(4) did not help. While §522a(g)(4) provides for governmental liability in the event of an intentional or willful violation of §522a, the complaint did not explain how any such violation affected the Department’s order that the complaint sought to challenge and pleaded no facts to demonstrate that the Department acted willfully. Donnelly rejected plaintiff’s argument that liability arose from the Department’s alleged failure to conduct a proper investigation because “§522a(g)(1)(C) requires the Department to maintain records, not to do an independent investigation.” Slip op. 4-5.

Crime of Violence

In two recent cases, Eastern District judges decided whether crimes fell within the “crime of violence” definition under 18 U.S.C. §924(c). In United States v. Bertrand, 20 CR 547 (EDNY, Jan. 3, 2023), Judge Chen ruled that carjacking under 18 U.S.C. §2119 qualified as a crime of violence. In United States v. Abu Mezer, 97 CR 804 (EDNY, Jan. 9, 2023), Judge Block ruled that threatening to use a weapon of mass destruction under 18 U.S.C. §2332a did not qualify.

‘Bertrand’: Carjacking. To determine whether an offense qualifies as a crime of violence for §924(c), courts generally employ what has come to be known as the “categorical approach.” This requires courts to determine whether the minimum criminal conduct necessary for conviction under a particular statute necessarily involves violence. When making this assessment, courts “look only to the statutory definitions—i.e., the elements” of the offense. Slip op. 4. Where a statute criminalizes more than one offense, courts use a “modified categorical approach” to determine whether the offense charged is a “crime of violence.” For such “divisible” statutes, courts may first look to a limited set of documents (including the indictment, jury instructions, or plea agreement and colloquy) to consider under which portion of the statute the defendant was charged, and then apply the categorical approach to that section of the statute. Slip op. 4-5.

Defendants argued that an attempted carjacking does not necessarily involve the use, attempted use, or threatened use of physical force against the person or property of another. But as Chen noted, “[b]y overlooking the difference between completed and attempted carjacking, Defendants read a divisible statute as an indivisible one.” Slip op. 7. In fact, §2119 defined two crimes: carjacking and attempted carjacking. And while attempted carjacking would not qualify as a crime of violence, carjacking itself would.

The court looked to the indictment to confirm that defendants had been charged with completed carjacking, not attempted carjacking. The elements of completed carjacking necessarily involve the use, attempted use, or threatened use of physical force against the person or property of another. Accordingly, the court denied defendants’ motion to dismiss the §924(c) charges against them.

‘Abu Mezer’: Threat To Use Weapon of Mass Destruction. Defendant in Abu Mezer claimed his conviction for threatening to use a weapon of mass destruction under 18 U.S.C. §2332a did not constitute a “crime of violence” under §924(c), which makes it unlawful to “threaten[] … to use … a weapon of mass destruction … against any person or property within the United States.”

Judge Block noted that the elements of §2332a are satisfied by a threat against any person, even if the only person targeted by the threat is the defendant himself or his own property. But a crime of violence under §924 requires that the force or threat of force be directed against the person or property of another. Because the minimum conduct necessary for a conviction (a threat against any person) did not meet the definition of a crime of violence (which requires a threat against another person), defendant’s conviction under §924 could not stand.

In reaching this conclusion, the court rejected the government’s argument that defendant was actually convicted for threatening to use a pipe bomb against other people. “[T]he categorical approach forbids consideration of the particular facts of Abu Mezer’s crime.” Slip op. 5. Block also found that, while a weapon of mass destruction in common parlance “evokes widespread death, injury and property destruction,” §2332a itself “contains no such limitation” and instead encompasses devices “used to harm a single person, including only the perpetrator of the crime.” Slip. op. 6.

Because threatening use of a weapon of mass destruction did not constitute a crime of violence under §924(c), Block vacated Abu Mezer’s conviction and sentence for that crime. Block left unchanged Abu Mezer’s underlying conviction and sentence for threatening to use a weapon of mass destruction under §2332a.

Samuel Butt and Michael Brodlieb are attorneys at Schlam Stone & Dolan. They formerly clerked for Eastern District judges—Mr. Butt for the late Charles P. Sifton and Mr. Brodlieb for Raymond J. Dearie.