Cervantes Orchards & Vineyards LLC et al v Deere & Company et al, No. 1:2014cv03125 - Document 121 (E.D. Wash. 2015)
Court Description: ORDER Granting 75 Northwest Farm Credit Services' Motion to Dismiss. Party Northwest Farm Credit Services terminated. Signed by Chief Judge Rosanna Malouf Peterson. (PL, Case Administrator)
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Cervantes Orchards & Vineyards LLC et al v Deere & Company et al Doc. 121 1 2 3 UNITED STATES DISTRICT COURT 4 EASTERN DISTRICT OF WASHINGTON 5 6 7 8 9 10 11 12 CERVANTES ORCHARDS & VINEYARDS, LLC, a Washington limited liability corporation; CERVANTES NURSERIES, LLC, a Washington limited liability corporation; CERVANTES PACKING & STORAGE, LLC, a Washington limited liability corporation; MANCHEGO REAL, LLC, a Washington limited liability corporation; JOSE G. CERVANTES and CYNTHIA C. CERVANTES, individually, and upon behalf of their community property marital estate; NO: 1:14-CV-3125-RMP ORDER GRANTING NORTHWEST FARM CREDIT SERVICES’ MOTION TO DISMISS 13 Plaintiffs, 14 15 16 17 18 19 20 v. DEERE & COMPANY, a corporation; DEERE CREDIT, INC., a corporation; JOHN DEERE CAPITAL CORPORATION, a corporation; JOHN DEERE FINANCIAL FSB, a corporation formerly known as FPC Financial; DEERE CREDIT SERVICES, INC., a corporation; NORTHWEST FARM CREDIT SERVICES, a corporation; AMERICAN WEST BANK, a corporation; SKBHC HOLDINGS, LLC, a Washington limited liability ORDER GRANTING NORTHWEST FARM CREDIT SERVICES’ MOTION TO DISMISS ~ 1 Dockets.Justia.com 1 2 3 4 5 6 7 8 9 corporation; T-16 MANAGEMENT CO, LTD, A Washington corporation; GARY JOHNSON and LINDA JOHNSON, individually and upon behalf of their community property marital estate; NW MANAGEMENT REALTY SERVICES, INC, a Washington corporation also known as Northwest Farm Management Company; and ROBERT WYLES and MICHELLE WYLES, individually and upon behalf of their community property marital estate, Defendants. Before the Court is Defendant Northwest Farm Credit Services’ (“NFCS”) 10 Motion for Dismissal Pursuant to Fed. R. Civ. P. 12(b)(6), ECF No. 75. The Court 11 has reviewed the record and is fully informed. 12 BACKGROUND 13 Plaintiffs constitute a farming group that grows crops including apples, 14 pears, grapes, and cherries. ECF No. 74 at 4. Plaintiffs assert that multiple 15 defendants engaged in a broad scheme of misconduct involving racketeering, 16 extortion, fraud, and civil rights violations. See ECF No. 74 at 17-24. Against 17 Defendant NFCS, however, Plaintiffs’ assertions are much narrower. 18 On or about January 11, 2010, Plaintiffs applied for three loans from NFCS, 19 seeking a total of approximately $14 million dollars. ECF No. 74 at 16. NFCS 20 rejected the loan application on January 26, 2010. ECF No. 74 at 16. ORDER GRANTING NORTHWEST FARM CREDIT SERVICES’ MOTION TO DISMISS ~ 2 1 “[I]mmediately following receipt of the denial letter, [Plaintiff] Jose G. 2 Cervantes personally appeared at NFCS offices and specifically asked [NFCS 3 employee Mandy] Minick the reasons for the denial.” ECF Nos. 74 at 16; 75 at 2. 4 Mr. Cervantes explained that Plaintiffs had substantial equity to secure the loan, 5 but Plaintiffs allege that Ms. Minick responded: “You people don’t pay.” ECF 6 No. 74 at 16 (emphasis omitted). 7 Plaintiffs Jose Cervantes and Cynthia Cervantes assert that NFCS 8 discriminated against them because of their racial and ethnic status, in violation of 9 42 U.S.C. §§ 1981, 1982, 1985(3), and 1986. See ECF No. 74 at 24. Plaintiffs 10 further specify “that NFCS engages, and continues to engage, from 1998 to the 11 present time, in discriminatory practices intended and directed towards Hispanic- 12 American farmers operating within Eastern Washington.” ECF No. 74 at 16. 13 ANALYSIS 14 NFCS moves to dismiss with prejudice all of Plaintiffs’ causes of action 15 against it, arguing that the claims are barred by statutes of limitations. ECF No. 16 75. Plaintiffs respond that it is inappropriate to raise an affirmative defense, such 17 as the defense that an action is time-barred, in a motion to dismiss and that 18 authority would not support application of that defense even if it properly were 19 raised. ECF No. 86. 20 ORDER GRANTING NORTHWEST FARM CREDIT SERVICES’ MOTION TO DISMISS ~ 3 1 The Federal Rules of Civil Procedure allow for the dismissal of a complaint 2 where the plaintiff fails to state a claim upon which relief can be granted. Fed. R. 3 Civ. P. 12(b)(6). A motion to dismiss brought pursuant to this rule “tests the legal 4 sufficiency of a claim.” Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). In 5 reviewing the sufficiency of a complaint, a court accepts all well-pleaded 6 allegations as true and construes those allegations in the light most favorable to the 7 non-moving party. Daniels-Hall v. Nat’l Educ. Ass’n, 629 F.3d 992, 998 (9th Cir. 8 2010) (citing Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031- 9 32 (9th Cir. 2008)). 10 To withstand dismissal, a complaint must contain “enough facts to state a 11 claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 12 544, 570 (2007). “A claim has facial plausibility when the plaintiff pleads factual 13 content that allows the court to draw the reasonable inference that the defendant is 14 liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). 15 While specific legal theories need not be pleaded, the pleadings must put the 16 opposing party on notice of the claim. Fontana v. Haskin, 262 F.3d 871, 877 (9th 17 Cir. 2001) (citing Conley v. Gibson, 355 U.S. 41, 47 (1957)). A plaintiff is not 18 required to establish a probability of success on the merits; however, he or she 19 must demonstrate “more than a sheer possibility that a defendant has acted 20 unlawfully.” Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556). ORDER GRANTING NORTHWEST FARM CREDIT SERVICES’ MOTION TO DISMISS ~ 4 Here, NFCS argues that Plaintiffs’ claims are barred by the respective 1 2 statutes of limitations that apply to actions under 42 U.S.C. §§ 1981, 1982, 3 1985(3), and 1986. ECF No. 75 at 5. The parties do not dispute that a four-year 4 statute of limitations governs Plaintiffs’ claim brought under § 1981. See Jones v. 5 R.R. Donnelley & Sons Co., 541 U.S. 369, 383-85 (2004) (discussing 28 U.S.C. § 6 1658).1 Washington’s three-year statute of limitations for personal injury actions, 7 RCW 4.16.080(2), governs claims brought pursuant to 42 U.S.C. § 1985(3). See 8 Taylor v. Regents of Univ. of Cal., 993 F.2d 710, 711 (9th Cir. 1993) (per curiam) 9 (applying California’s analogous statute of limitations). The same rule controls 10 § 1982 claims. See Mitchell v. Sung, 816 F. Supp. 597, 600 (N.D. Cal. 1993) 11 (“Because section 1982 does not have a statute of limitations, courts apply the 12 13 14 15 16 17 18 19 20 1 Section 1658’s four-year statute of limitations applies to actions brought under federal statutes that were enacted after December 1, 1990. Jones, 541 U.S. at 371. In Jones, the Court explained that § 1658 applies to claims that were made possible by an amendment to § 1981 that occurred after December 1, 1990. Id. at 383. Racial harassment in employment is an example of a § 1981 claim that was not possible under the pre-1990 version of the section. See id. Some § 1981 claims, however, instead remain subject to the most analogous statute of limitations under state law. See, e.g., Lukovsky v. City & Cnty. of San Francisco, 535 F.3d 1044, 1048 n.2 (9th Cir. 2008) (applying forum state’s statute of limitations to failure-to-hire claim, which was cognizable under pre-1990 version of § 1981). The applicable statute of limitations under Washington State law would be the three-year limitation for a lawsuit alleging personal injury, RCW 4.16.080(2). See Beauregard v. Lewis Cnty., Wash., No. C05-5738RJB, 2006 WL 2924612, at *8 (W.D. Wash. Oct. 10, 2006) (citing Taylor v. Regents of Univ. of Cal., 993 F.2d 710, 711-12 (9th Cir. 1993)). The parties do not address whether Plaintiffs’ § 1981 claim would have been cognizable under the pre-1990 version of the law. However, because the parties do not dispute that the federal four-year statute of limitations applies and because the issue does not affect the Court’s decision, the Court assumes, for purposes of this motion, that the longer statute of limitations is applicable. ORDER GRANTING NORTHWEST FARM CREDIT SERVICES’ MOTION TO DISMISS ~ 5 1 applicable state statute of limitations.”). A one-year statute of limitations applies 2 to claims under § 1986. 42 U.S.C. § 1986. Although the relevant state statute of limitations applies to some of 3 4 Plaintiffs’ civil rights claims, federal law determines when a civil rights claim 5 accrues, see Olsen v. Idaho State Bd. of Med., 363 F.3d 916, 926 (9th Cir. 2004) 6 (citing Morales v. City of Los Angeles, 214 F.3d 1151, 1153-54 (9th Cir. 2000)). 7 Federal law provides that “a claim accrues when the plaintiff knows or has reason 8 to know of the injury which is the basis of the action.” TwoRivers v. Lewis, 174 9 F.3d 987, 991 (9th Cir. 1999). Accrual begins on the date on which a plaintiff 10 becomes aware of an adverse action, not when a plaintiff suspects that a legal 11 wrong has been committed. Lukovsky v. City & Cnty. of San Francisco, 535 F.3d 12 1044, 1049-50 (9th Cir. 2008). Here, Plaintiffs’ claims against NFCS began to accrue when they received 13 14 NFCS’s letter dated January 26, 2010, denying their loan application.2 Generously 15 granting Plaintiffs four weeks of time to receive the letter in the mail, Plaintiffs’ § 16 1981 claim, which is subject to a longer statute of limitations than their other 17 claims against NFCS, ran on February 28, 2014. Plaintiffs did not file their 18 2 19 20 The Second Amended Complaint ambiguously alleges “that on 26 January 2010, via letter transmitted to Plaintiff the Plaintiffs’ loan application was rejected.” ECF No. 74 at 16. Whether Plaintiffs received the letter on January 26, 2010, or whether that is the date on which the letter was drafted, is uncertain. Construing the facts in the light most favorable to Plaintiffs, the Court assumes that the letter was mailed on January 26 and that additional time elapsed before Plaintiffs received the letter. ORDER GRANTING NORTHWEST FARM CREDIT SERVICES’ MOTION TO DISMISS ~ 6 1 Complaint until September 2, 2014, approximately four years and six months after 2 they became aware that NFCS had denied their loan application. See ECF No. 1. 3 Plaintiffs assert that NFCS’s motion to dismiss should be denied because of 4 the general rule that affirmative defenses, such as the running of a statute of 5 limitations, may not be resolved in a motion to dismiss. ECF No. 86 at 4-5. 6 However, an affirmative defense may be raised in a motion to dismiss if the 7 defense implicates no disputed issues of fact. Scott v. Kuhlmann, 746 F.2d 1377, 8 1378 (9th Cir. 1984) (per curiam). Here, construing Plaintiffs’ allegations in their 9 favor, Plaintiffs’ claim against NFCS that is subject to the longest statute of 10 limitations became time-barred on February 28, 2014. The statutes of limitations 11 that apply to Plaintiffs’ other claims against NFCS ran much earlier. There are no 12 relevant facts that the parties dispute. 13 Plaintiffs allege that even if NFCS may raise the statute of limitations 14 argument in its motion to dismiss, the affirmative defense should fail. Plaintiffs 15 contend “that NFCS engages, and continues to engage, from 1998 to the present 16 time, in discriminatory practices intended and directed towards Hispanic-American 17 farmers operating within Eastern Washington.” See ECF Nos. 74 at 16; 86 at 6. 18 Plaintiffs argue that they are no less injured today than they were when their loan 19 application was denied “because they know if they applied for credit it would be 20 declined as a result of NFCS’ ongoing practices.” ECF No. 86 at 7. ORDER GRANTING NORTHWEST FARM CREDIT SERVICES’ MOTION TO DISMISS ~ 7 1 Plaintiffs’ assertion that NFCS discriminates against Hispanic-American 2 farmers in general does not salvage their claims. Plaintiffs rely on Havens Realty 3 Corp. v. Coleman, which concerns an alleged continuing violation of the Fair 4 Housing Act. 455 U.S. 363, 380 (1982). All of the incidents of alleged 5 misconduct against one plaintiff in Havens Realty were time-barred, but another 6 plaintiff alleged that a Fair Housing Act violation occurred within the 180-day time 7 limit. Id. at 380. The Court held “that where a plaintiff, pursuant to the Fair 8 Housing Act, challenges not just one incident of conduct violative of the Act, but 9 an unlawful practice that continues into the limitations period, the complaint is 10 timely when it is filed within 180 days of the last asserted occurrence of that 11 practice.” See Havens Realty Corp. v. Coleman, 455 U.S. 363, 380-81 (1982) 12 (footnote omitted). In other words, “because [one] incident fell within the 13 limitations period, none of the claims was barred.” See id. at 380. 14 Unlike in Havens Realty, Plaintiffs allege only one specific incident of 15 discrimination, which occurred beyond all statutes of limitations that apply to their 16 claims. Plaintiffs cannot rely on the general allegation that NFCS continues to 17 discriminate against farmers, who are not parties to this action, in order to revive 18 its time-barred claims. 19 20 Furthermore, to the extent that Plaintiffs presume that future loan applications would be denied for discriminatory reasons because of the denial of their first application, they assert merely a speculative continuing effect of the ORDER GRANTING NORTHWEST FARM CREDIT SERVICES’ MOTION TO DISMISS ~ 8 1 initial violation. A continuing impact of a past incident is not actionable, so 2 Plaintiffs may not rely on their assumption of NFCS’s persistent misconduct to 3 circumvent the statute of limitations. See Grimes v. City & Cnty. of San Francisco, 4 951 F.2d 236, 238-39 (9th Cir. 1991) (distinguishing continuing impact from 5 continuing violation). 6 The Court finds that it would be futile to grant Plaintiffs leave to amend their 7 complaint again as to NFCS and therefore dismisses with prejudice the claims 8 against NFCS. 9 Accordingly, IT IS HEREBY ORDERED: 1. Northwest Farm Credit Services’ Motion to Dismiss, ECF No. 75, is 10 GRANTED. 11 2. Northwest Farm Credit Services is DISMISSED WITH 12 PREJUDICE and without fees to either party. 13 14 The District Court Clerk is directed to enter this Order, provide copies to 15 counsel, and terminate Northwest Farm Credit Services as a defendant in this 16 matter. 17 DATED this 20th day of May 2015. 18 19 s/ Rosanna Malouf Peterson ROSANNA MALOUF PETERSON Chief United States District Court Judge 20 ORDER GRANTING NORTHWEST FARM CREDIT SERVICES’ MOTION TO DISMISS ~ 9
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