Auburn Hills Homeowners Association v. New Page Properties, L.L.C.

UNITED STATES DISTRICT COURT FOR THE

WESTERN DISTRICT OF MISSOURI

CENTRAL DIVISION

AUBURN HILLS HOMEOWNERS

ASSOCIATION,

Plaintiff,

v.

Case No. 2:22-cv-4102-NKL

NEW PAGE PROPERTIES, LLC,

Defendant.

ORDER

Before the Court is a Motion to Dismiss for Lack of Subject Matter Jurisdiction filed by

Defendant New Page Properties, LLC. See Doc. 6. New Page argues that the Complaint filed by

Plaintiff Auburn Hills Homeowners Association, Doc. 1, which attempts to state claims for breach

of contract and a declaratory judgment, fails to establish that this Court can exercise its subject

matter jurisdiction. As discussed in detail below, the Court agrees, and accordingly this case is

DISMISSED.

I. BACKGROUND

Auburn Hills Homeowners Association (the “HOA”) is a homeowner’s association

responsible for various parcels of land in Boone County, Missouri. The HOA is empowered by

the Declaration of Covenants, Easements and Restrictions of Auburn Hills, a Subdivision of Boone

County Missouri (the “Declaration”) to enforce the requirements of the Declaration against

property owners. Doc. 1, ¶¶ 10–13. Defendant New Page Properties, LLC owns property subject

to the Declaration. Id. ¶¶ 8–9, 14. The HOA is entitled to fine property owners who violate the

Declaration, initiate litigation, and recover the attorneys’ fees and costs it incurs enforcing the

Declaration. The HOA fined New Page because it has allegedly failed to properly maintain its

property, in violation of the Declaration. New Page has not paid the fines. The HOA anticipates

that New Page will argue that the HOA’s enforcement efforts1 are discriminatory, in violation of

the Fair Housing Act.2

On July 1, 2022, the HOA filed a Complaint in this Court. The HOA seeks a declaration,

pursuant to the Declaratory Judgment Act,3 that it has not violated the Fair Housing Act. The

HOA further brings a breach of contract claim against New Page for failing to comply with the

Declaration. The HOA claims federal jurisdiction is proper under the Fair Housing Act—

specifically 42 U.S.C. § 3613(a)(1).

II. STANDARD

The party seeking to invoke federal jurisdiction “must sufficiently allege the basis for

federal subject matter jurisdiction in its complaint.” Victor Foods, Inc. v. Crossroads Economic

Dev. of St. Charles County, Inc., 977 F.2d 1224, 1227 (8th Cir. 1992); Bowe v. Northwest Airlines,

Inc., 974 F.2d 101, 103 (8th Cir. 1992). A motion for lack of subject matter jurisdiction under

Fed. R. Civ. P. 12(b)(1) can be facial or factual. Titus v. Sullivan, 4 F.3d 590, 593 (8th Cir. 1993).

In the context of a facial challenge, like the one before the Court, the Complaint’s factual

allegations are presumed true, and the Court, looking only at the face of the Complaint, determines

1 New Page’s exact theory of discrimination is unclear, but it is ultimately irrelevant to the

resolution of its Motion to Dismiss. At bottom, it appears the HOA anticipates that New Page will

argue that either the Declaration, or the HOA’s enforcement of it, is discriminatory and therefore

New Page is not liable for the fines levied against it. There is no suggestion that New Page

anticipates filing an independent cause of action against the HOA for violating the Fair Housing

Act.

2 42 U.S.C. § 3601 et seq.

3 28 U.S.C. § 2201.

whether an “element necessary for subject matter jurisdiction” is missing. Id.

III. DISCUSSION

The federal Declaratory Judgment Act is a procedural statute, not a jurisdictional one. See

Franchise Tax Bd. v. Construction Laborers Vacation Trust, 463 U.S. 1, 15–16 (1983); Skelly Oil

Co. v. Phillips Petroleum Co., 339 U.S. 667, 671–72 (1950). It is meant to “provide an additional

remedy where [federal] jurisdiction already exists.” Terminal Freight Handling Co. v. Solien for

& on Behalf of N. L. R. B., 444 F.2d 699, 703 (8th Cir. 1971). Therefore, a federal court will not

have jurisdiction over an action seeking a declaratory judgment unless it otherwise comes within

a traditional congressional grant of jurisdiction. State of Mo. ex rel. Missouri Highway & Transp.

Comm’n v. Cuffley, 112 F.3d 1332, 1334 (8th Cir. 1997); Terminal Freight Handling Co. v. Solien,

444 F.2d 699, 703 (8th Cir. 1971).

The HOA attempts to invoke the Court’s federal question jurisdiction, meaning it believes

it pleads “civil actions arising under the Constitution, laws, or treaties of the United States.” 28

U.S.C. § 1331; Doc. 1 (Complaint), at ¶ 1.4 To do so successfully, the federal question must appear

on the face of the plaintiff’s complaint; said differently, the plaintiff’s “well-pleaded complaint

must establish that the cause of action arises under federal law.” See Franchise Tax Board, 463

U.S. at 10; Gully v. First Nat’l Bank, 299 U.S. 109, 113 (1936); Louisville & Nashville R.R. v.

Mottley, 211 U.S. 149, 152 (1908).

The existence of a potential federal defense to a state law claim normally does not create

federal question jurisdiction. Aetna Health, Inc. v. Davila, 542 U.S. 200, 207 (2004). Because of

that, when “a declaratory judgment complaint essentially invokes a federal-law defense to a state-

4 For the avoidance of doubt, it is clear from the face of the Complaint that the parties are both

citizens of Missouri, and therefore this case could not be premised on diversity. See Doc. 1, at ¶¶

4–7.

based claim, it is the character of the threatened state action that determines whether federal courts

have jurisdiction.” Gaar v. Quirk, 86 F.3d 451, 454 (5th Cir. 1996).

The HOA filed its breach of contract claim—arising under state law—to remedy New

Page’s violations of the Declaration. The only federal issue—the Fair Housing Act—appears in

two ways, neither of which support federal jurisdiction.

First, the HOA appears to argue that its claim arises under the Fair Housing Act. See Doc.

1, at ¶ 1. This argument fails. There are no allegations to support the HOA’s reliance on 42 U.S.C.

§3613(a)(1) as an independent source of jurisdiction. § 3613(a)(1) of the Fair Housing Act permits

an aggrieved person—a person who has been, or believes that she will soon be, subjected to a

discriminatory housing practice—to challenge that practice in federal court. 42 U.S.C. §

3613(a)(1); 42 U.S.C. § 3602(i). The HOA is not an aggrieved person, and therefore it cannot

itself proceed under the cited portion of the Fair Housing Act.

Second, the HOA anticipates that New Page may use the Fair Housing Act as a defense to

the HOA’s state law breach of contract claim. See generally Doc. 11 (Pl.’s Opp’n to Mot.

Dismiss), at 1–2. The HOA therefore asks this Court to preemptively declare that federal law does

not prevent its enforcement efforts.5 That is not enough to establish subject matter jurisdiction.

Pittman Farms v. Kuehl Poultry LLC, 19-CV-3040, 2020 WL 2490048, at *2 (D. Minn. May 14,

2020) (“However, the traditional coercive cause of action implicated by [plaintiffs’ declaratory

judgment action] . . . is a breach-of-contract suit in which the federal question presented here—the

constitutionality of Minnesota law—would be raised only as an affirmative defense . . . That is not

enough to trigger federal subject-matter jurisdiction under Skelly Oil and § 1331.”) (internal

5 As discussed above, nowhere is there any suggestion that the HOA anticipates New Page filing

a claim against the HOA for violating the Fair Housing Act. It appears only that New Page will

raise the Fair Housing Act as a defense to its liability under the Declaration.

citations omitted); Gully v. First Nat. Bank, 299 U.S. 109, 113 (1936) (“Indeed, the complaint

itself will not avail as a basis of jurisdiction in so far as it goes beyond a statement of the plaintiff's

cause of action and anticipates or replies to a probable defense.”); N. Cent. F.S., Inc. v. Brown, 951

F. Supp. 1383, 1397 (N.D. Iowa 1996) (“Thus, the threatened or actual action prompting the purely

declaratory claims here is a state-law breach-of-contract suit to which the assertedly federal issue

of the illegality of the HTAs under [federal law] is an affirmative defense.”).

The HOA does not address any of New Page’s jurisdictional arguments. Instead, it argues

only that its declaratory judgment action is properly in federal court because it is “definite and

concrete, touching the legal relations of parties having adverse legal interests. It [is] a real and

substantial controversy admitting of specific relief through a decree of conclusive character, as

distinguished from an opinion advising what the law would be upon a hypothetical state of facts.”

Doc. 11 (Opp’n to Mot. Dismiss), at 3 (citing Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 241

(1937)). Even accepting that this is all true, the HOA’s arguments do nothing to establish this

Court’s subject matter jurisdiction, a completely distinct—but equally necessary—inquiry.

At bottom, the HOA argues that federal question jurisdiction exists because “the Court

must construe The Fair Housing Act, and such construction will either give plaintiff the right to

enforce the Declaration against defendant’s properties, or it will be found discriminatory and, thus,

unenforceable.” Doc. 11, at 3. While that may be true, the HOA’s underlying right to recovery—

its breach of contract action—does not arise under federal law. The HOA merely seeks to use a

declaratory judgment action as a vehicle to preemptively raise—and defeat—New Page’s potential

federal defense to the HOA’s state court breach of contract action. Gully, 299 U.S. at 113. This

is not enough for federal question jurisdiction. Accordingly, the Missouri Courts must decide in

the first instance whether any Fair Housing Act defense has merit. Davila, 542 U.S. at 207; Int’l

Ass’n of Entrepreneurs of Am. v. Angoff, 58 F.3d 1266, 1270 (8th Cir. 1995) (“[T]he Declaratory

Judgment Act is not to be used to bring to the federal courts an affirmative defense which can be

asserted in a pending state action.”); Gaar v. Quirk, 86 F.3d 451, 454 (5th Cir. 1996) (“A petition

for declaratory judgment concerning federal law is not sufficient to create federal jurisdiction;

hence the relevant cause of action must arise under some other federal law[.]”) (quotation omitted);

N. Cent. F.S., Inc., 951 F. Supp. at 1400 (dismissing for lack of subject matter jurisdiction a

declaratory judgment action seeking declaration that certain contracts were legal under federal law,

anticipating the illegality defense of opposing party).

IV. CONCLUSION

For the reasons discussed above, Defendant’s Motion, Doc. 6, is GRANTED.

s/ Nanette K. Laughrey Dated: 10/12/2022

NANETTE K. LAUGHREY Jefferson City, Missouri

United States District Judge