Jeffrey P. Samuels v. Federal Emergency Management Agency

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘O’

Case No. 2:22-cv-01088-CAS-JCx Date April 6, 2023

Title JEFFRY P. SAMUELS v. FEDERAL EMERGENCY MANAGEMENT

_AGENCY & U.S. DEPARTMENT OF TREASURY

Present: The Honorable CHRISTINA A. SNYDER

Catherine Jeang Not Present N/A

Deputy Clerk Court Reporter / Recorder Tape No.

Attorneys Present for Plaintiffs: Attorneys Present for Defendants:

Not Present Not Present

Proceedings: (INCHAMBERS) - DEFENDANTS’ MOTION TO DISMISS

PLAINTIFF’S FIRST AMENDED COMPLAINT (Dkt. 33, filed on

February 27, 2023)

I. INTRODUCTION

Presently before the Court is defendants’ motion to dismiss plaintiff's first

amended complaint. The Court finds that defendants’ motion is appropriate for decision

without oral argument. See Fed. R. Civ. P. 78; C.D. Cal. L-R. 7-15. Accordingly, the

matter is hereby taken under submission.

On February 18, 2022, plaintiff Jeffrey Samuels filed suit against the Federal

Emergency Management Agency (“FEMA”) and the U.S. Department of the Treasury

(“Treasury”) (collectively, “defendants”). Dkt. 1 (“Compl.”). On September 19, 2022,

plaintiff filed a first amended complaint against defendants. Dkt. 28 (“FAC”). Plaintiff

alleges that he received approximately $19,215.01 from FEMA to repair his property

damages from Hurricane Harvey in August 2017. Plaintiff alleges that FEMA sent a

demand to recoup the funds in 2020, but that FEMA’s actions are barred by the three-

year statute of limitations under the Discovery Assistance Reform Act. Additionally,

plaintiff alleges that FEMA referred collection of the alleged debt in 2022 to the

Treasury, which has “begun wrongfully taking money from plaintiff's social security”

disbursements. Plaintiff seeks declaratory and injunctive relief barring FEMA from

collecting any money from plaintiff and for the Treasury to return “all money wrongfully

taken.” See generally id.

On February 27, 2023, defendants filed a motion to dismiss plaintiff's FAC for

lack of subject matter jurisdiction and failure to state a clam. Dkt. 33 (“Mot.”). On

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘Oo’

Case No. 2:22-cv-01088-CAS-JCx Date April 6, 2023

Title JEFFRY P. SAMUELS v. FEDERAL EMERGENCY MANAGEMENT

AGENCY & U.S. DEPARTMENT OF TREASURY

March 13, 2023, plaintiff filed an opposition. Dkt. 34 (“Opp.”). On March 20, 2023,

defendants filed a reply. Dkt. 35 (“Reply”). On March 27, plaintiff filed a surreply. Dkt.

36 (“Surreply”).!

Having carefully considered the parties’ arguments and submissions, the Court

finds and concludes as follows.

Il. BACKGROUND

A. Statutory framework for emergency relief provided by FEMA

The Robert T. Stafford Disaster Relief and Emergency Assistance Act (“Stafford

Act’) provides statutory authority for the federal disaster response activities of FEMA.

42 U.S.C. § 5121 et seg. The Stafford Act provides that upon request from the governor

of a state affected by a major disaster requiring federal assistance, the “President may

declare under this chapter that a major disaster or emergency exists.” Id. § 5170.

Consequently, “[i]n any major disaster, the President may”:

(1) direct any Federal agency . . . to utilize its authorities and the resources

granted to it under Federal law . . . in support of State and local assistance

efforts . . . [and]

(4) assist State and local governments in the distribution of medicine, food,

and other consumable supplies, and emergency assistance.

Id.

' Plaintiff filed this surreply without leave of the Court to do so. See L.R. 7-10 (“Absent

prior written order of the Court, the opposing party shall not file a response to the

reply.”). Moreover, plaintiff's surreply largely advances arguments that were or could

have been raised in prior filings. Nonetheless, the Court has read and considered

plaintiff's surreply. But see Price v. Peerson, No. CV133390PSGJEMX, 2014 WL

12579823, at *4 (C.D. Cal. May 15, 2014), aff'd, 643 F. App’x 637 (9th Cir. 2016)

(“[P]ro se attorneys . . . cannot claim the special consideration which the courts

customarily grant to pro se parties.”).

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘Oo’

Case No. 2:22-cv-01088-CAS-JCx Date April 6, 2023

Title JEFFRY P. SAMUELS v. FEDERAL EMERGENCY MANAGEMENT

AGENCY & U.S. DEPARTMENT OF TREASURY

Section 408 of the Stafford Act authorizes FEMA to provide direct assistance to

individuals and households in response to a major disaster or emergency declared by the

president. See 42 U.S.C. § 5174. In relevant part, Section 408 establishes that the

president “may provide financial or other assistance under this section to individuals and

households to respond to the disaster-related housing needs of individuals and households

who are displaced from their predisaster primary residences or whose predisaster primary

residences are rendered uninhabitable.” Id. § 5174(b)(1).

In accordance with this Section, FEMA has promulgated regulations establishing

the criteria and eligibility for individual housing assistance. While “[i]n general, FEMA

may provide assistance to individuals and households who qualify for such assistance,”

FEMA “may only provide” housing assistance “if the primary residence has been

destroyed, is uninhabitable, or is inaccessible.” 44 C.F_R. § 206.113(a). FEMA “may not

provide” housing assistance “to individuals or households who are displaced from other

than their pre-disaster primary residence . . . or who have adequate rent-free housing

accommodations.” Id. § 206.113(b).

44 C.F.R. § 206.116(b), “Recovery of Funds,” establishes in relevant part that

applicant must return funds to FEMA . .. when FEMA .. . determines that the

assistance was provided erroneously, that the applicant spent the funds inappropriately, or

that the applicant obtained the assistance through fraudulent means.”

Applicants for FEMA assistance “may appeal any determination of eligibility for

assistance made” to individuals and households, and “may appeal . . . (1) eligibility for

assistance, including recoupment.” 44 C.F.R. § 206.115(a). Such appeal must be filed

within 60 days after FEMA notifies the applicant of an award or denial of assistance. Id.

The Stafford Act provides a statute of limitations of 3 years for the recoupment of

covered assistance: “unless there is evidence of civil or criminal fraud, the Agency may

not take any action to recoup covered assistance from the recipient of such assistance if

the receipt of such assistance occurred on a date that is more than 3 years before the date

on which the Agency first provides to the recipient written notification of an intent to

recoup.” 42 U.S.C. § 5174a(b)(1).

While FEMA “may waive a debt owed to the United States related to covered

assistance provided to an individual or household if” certain criteria are met, FEMA

“may not waive a debt . . . if the debt involved fraud, the presentation of a false claim, or

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘O’

Case No. 2:22-cv-01088-CAS-JCx Date April 6, 2023

Title JEFFRY P. SAMUELS v. FEDERAL EMERGENCY MANAGEMENT

AGENCY & U.S. DEPARTMENT OF TREASURY

misrepresentation by the debtor or any party having an interest in the claim.” Id. §

5174a(a)(2).

Finally, Section 305 of the Stafford Act, entitled “Nonliability of the Federal

Government” states that the federal government “shall not be liable” for any claim based

on a federal agency’s or employee’s “exercise or performance of or the failure to exercise

or perform a discretionary function or duty.” 42 U.S.C. § 5148.

B. Plaintiff receives Hurricane Harvey emergency relief and FEMA

attempts to recoup payment.

In August 2017, Hurricane Harvey struck the state of Texas, damaging plaintiff's

property at 4442 Cheena Drive, Houston, TX 77096. FAC, p. 5. Plaintiff applied for

emergency relief from FEMA. On November 17, 2017, FEMA granted plaintiff

approximately $19,215.01 in assistance. Id.

Later, FEMA could not verify plaintiff's occupancy of the property, which is

required as a condition to grant assistance pursuant to 42 U.S.C. § 5174 and 44 C_F_R. §

206.113. Rather, FEMA’s Fraud and Investigations Division conducted a review of

plaintiffs disaster assistance application and discovered that numerous indicia reflect that

plaintiff did not primarily reside at 4442 Cheena Drive in Houston. Dkt. 33-1 (“FEMA

Case File”) at 40-43. FEMA concluded its review in September 2020 and determined

that plaintiffs application contained fraudulent representations. Id.

On October 23, 2020, FEMA initiated the recoupment process to recover the

disaster assistance funds by notifying plaintiff that he did not appear to be eligible and

accordingly owed FEMA the amount of the emergency relief. Id. at 26-27. FEMA’s

notification letter included the process by which plaintiff could appeal this determination.

On December 9, 2020, plaintiff filed an appeal via letter. Id. at 50-53. FEMA

reviewed plaintiff's appeal and on December 16, 2020, it mailed plaintiff a letter

affirming its previous decision. Id. at 28.

On March 22, 2021, FEMA mailed plaintiff a notification that the debt had become

final and if it did not receive full payment within 30 days, it would begin collection

action as required by law. Id. at 30.

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘Oo’

Case No. 2:22-cv-01088-CAS-JCx Date April 6, 2023

Title JEFFRY P. SAMUELS v. FEDERAL EMERGENCY MANAGEMENT

AGENCY & U.S. DEPARTMENT OF TREASURY

Because plaintiff did not pay the outstanding debt, FEMA transferred the unpaid

debt to the Treasury on December 22, 2021. Id. at 113. Plaintiff alleges that in 2022, the

Treasury began garnishing plaintiff's Social Security distributions. FAC at p. 6.

If. LEGAL STANDARD

A motion to dismiss an action pursuant to Fed. R. Civ. P. 12(b)(1) raises the

objection that the federal court has no subject matter jurisdiction over the action. This

defect may exist despite the formal sufficiency of the allegations in the complaint. T.B.

Harms Co. v. Eliscu, 226 F. Supp. 337, 338 (S.D.N.Y. 1964), aff'd 339 F.2d 823 (2d Cir.

1964). When considering a Rule 12(b)(1) motion challenging the substance of

jurisdictional allegations, the Court is not restricted to the face of the pleadings, but may

review any evidence, such as declarations and testimony, to resolve any factual disputes

concerning the existence of jurisdiction. See McCarthy v. United States, 850 F.2d 558,

560 (9th Cir. 1988).

Once a Rule 12(b)(1) motion has been raised, the burden is on the party asserting

jurisdiction. Sopcak v. N. Mountain Helicopter Serv., 52 F.3d 817, 818 (9th Cir. 1995);

Ass’n of Am. Med. Coll. v. United States, 217 F.3d 770, 778-79 (9th Cir. 2000). If

jurisdiction is based on a federal question, the pleader must show that he has alleged a

claim under federal law and that the claim is not frivolous. See 5B Charles A. Wright &

Arthur R. Miller, Federal Practice and Procedure, § 1350, pp. 211, 231 (3d ed. 2004). If

jurisdiction is based on diversity of citizenship, the pleader must show real and complete

diversity, and also that his asserted claim exceeds the requisite jurisdictional amount of

$75,000. See id.

While generally a “court should ‘freely give leave [to amend] when justice so

requires,’ ” leave to amend is “properly denied” where “amendment would be futile,”

Carrico v. City & Cty. of San Francisco, 656 F.3d 1002, 1008 (9th Cir. 2011) (quoting

Fed. R. Civ. P. 15(a)(2)). Amendment would be futile if the plaintiff cannot state a

cognizable claim. See Cervantes v. Countrywide Home Loans, Inc., 656 F.3d 1034, 1041

(9th Cir. 2011) (“Although leave to amend should be given freely, a district court may

dismiss without leave where a plaintiff's proposed amendments would fail to cure the

pleading deficiencies and amendment would be futile.”).

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘Oo’

Case No. 2:22-cv-01088-CAS-JCx Date April 6, 2023

Title JEFFRY P. SAMUELS v. FEDERAL EMERGENCY MANAGEMENT

AGENCY & U.S. DEPARTMENT OF TREASURY

IV. DISCUSSION

A. Lack of Subject Matter Jurisdiction Because FEMA Has Not Waived Its

Sovereign Immunity

Where Congress has waived the United States’ sovereign immunity, the “waiver of

the Federal Government’s sovereign immunity must be unequivocally expressed in the

statutory text... and will not be implied.” See Lane v. Pena, 518 U.S. 187, 192 (1996)

(citations omitted). Any waiver of sovereign immunity must “be strictly construed, in

terms of its scope, in favor of the sovereign.” Id. Plaintiffs bringing suit against the

United States bear the burden of establishing that a waiver of sovereign immunity

encompasses their claims. See Lundeen v. Mineta, 291 F.3d 300, 304 (Sth Cir. 2002).

Defendants argue that the Court lacks subject matter jurisdiction to hear this case

because FEMA has not waived its sovereign immunity under the Stafford Act which

authorizes and regulates the designation and disbursement of emergency relief assistance.

Defendants argue that the Stafford Act contains no general waiver of sovereign

immunity. Mot. at 10 (citing Johnson v. Fed. Emergency Mgmt. Agency, 207 US Dist.

Lexis 39571 at *5 (E.D. La. 2007) (“The Stafford Act . . . contains no express and

unequivocal language purporting to waive the United States’ immunity from suit.”). In

particular, defendants explain that Section 305 of the Stafford Act, entitled “Nonliability

of the Federal Government,” states that the federal government “shall not be liable” for

any claim based on a federal agency’s or employee’s “exercise or performance of or the

failure to exercise or perform a discretionary function or duty.” 42 U.S.C. § 5148.

According to defendants, “Congress included this language to ensure that even if

“mistake[s]’ were made in the administration of federal disaster relief, ‘the Government

may not be sued . . . there shall be no liability on the part of the Government.’ ” Mot. at

10 (quoting 96 Cong. Rec. 11895, 11912 (1950) (statement by chairman of House Public

Works Committee)).

Accordingly, defendants argue that “because the Stafford Act contains no waiver

of sovereign immunity for FEMA’s discretionary functions, such discretionary functions

as those alleged in the FAC regarding disaster assistance eligibility are barred from

judicial review.” Id. at 10. Defendants argue that FEMA’s individual assistance

eligibility and recoupment determinations are discretionary functions pursuant to the two-

part Gaubert test: (1) whether the challenged conduct involves an “element of judgment

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘O’

Case No. 2:22-cv-01088-CAS-JCx Date April 6, 2023

Title JEFFRY P. SAMUELS v. FEDERAL EMERGENCY MANAGEMENT

AGENCY & U.S. DEPARTMENT OF TREASURY

or choice” and (2) whether the “judgment is of the kind that the discretionary function

exception was designed to shield.” Id. (citing United States v. Gaubert, 499 U.S. 315,

322-323 (1991)). Here, defendants contend that FEMA’s distribution of emergency

relief is discretionary, because eligibility determinations are not “tempered by a statute,

regulation or policy which mandates a particular course of action.” Id. at 11 (citing

Gaubert, 499 U.S. at 322). Additionally, defendants cite to numerous cases recognizing

that where FEMA’s authority to make decisions implementing disaster assistance is

described in permissive terms and involves policy choices, such decisions fall within the

“discretionary function” of the Stafford Act’s nonliability provision. Id. at 14-15 (citing

City of San Bruno v. Fed. Emergency Mgmt. Agency, 181 F. Supp. 2d 1010, 1013 (N_D.

Cal. 2001) (“[I]t is plain that under the Stafford Act decisions involving the allocation

and deployment of limited governmental resources are the type of administrative

judgment that the discretionary function exception was designed to immunize from

suit.”)).

In opposition, plaintiff argues FEMA is not immune from suit and that the

Administrative Procedure Act (“APA”) provides jurisdiction in this case. Opp. at 2.

Specifically, plaintiff cites to Section 706(2) which provides that a court may set aside

agency action found to be “arbitrary, capricious, an abuse of discretion, or otherwise not

in accordance with law.” 5 U.S.C. § 702. Plaintiff contends that FEMA may be sued for

failing to follow its own guidelines, citing to St. Bernard Par. Gov’t v. United States, 887

F.3d 1354, 1368 (Fed. Cir. 2018).

In reply, defendants argues that the APA is inapplicable here, because the APA

does not apply “to the extent that—(1) statutes preclude judicial review; or (2) agency

action is committed to agency discretion by law.” 5 U.S.C. § 701(a). Defendants

contend that here the governing statute is the Stafford Act, which contains an express

provision retaining sovereign immunity for discretionary acts under the act. The Federal

Circuit’s decision in St. Bernard is inapposite, defendants further argue, because that case

involved an inverse condemnation constitutional claim. See generally 887 F.3d at 1368.

? Plaintiff, who is an attorney and proceeding pro se, lists cases without case citations or

any identifying material other than a case name and a year. As defendants note, many of

these cases do not appear on legal archives or research resources, so the Court is unable

to consider them for the purposes of this motion.

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘O’

Case No. 2:22-cv-01088-CAS-JCx Date April 6, 2023

Title JEFFRY P. SAMUELS v. FEDERAL EMERGENCY MANAGEMENT

AGENCY & U.S. DEPARTMENT OF TREASURY

The Court finds that it lacks subject matter jurisdiction over plaintiff's claims.

First, there is no waiver of sovereign immunity “unequivocally expressed in the statutory

text” of the Stafford Act. Lane v. Pefia, 518 U.S. 187, 192 (1996). Instead, 42 U.S.C. §

5148, titled “Nonliability of Federal Government,” provides that the “Federal

Government shall not be liable for any claim based upon the exercise or performance of

or the failure to exercise or perform a discretionary function or duty on the part of a

Federal agency or an employee of the Federal Government in carrying out the provisions

of this chapter.”

Second, the Court concludes that FEMA’s determination of housing assistance

eligibility for plaintiff and subsequent recoupment are discretionary acts within the

meaning of the two-part Gaubert test and therefore barred from judicial review pursuant

42 U.S.C. § 5148. The challenged conduct here, FEMA’s provision and recoupment of

housing assistance, “involves an element of judgment or choice” that is not “tempered by

a statute, regulation or policy which mandates a particular course of action.” Gaubert,

499 US. at 322. As a principle of statutory interpretation, “|t]he word ‘may,’ when used

in a statute, usually implies some degree of discretion.” United States v. Rodgers, 461

U.S. 677, 706 (1983). Here, as defendants note, the applicable Stafford Act statutory

provisions and FEMA regulations contain the permissive “may” when referring to the

president and FEMA’s discretion to grant household assistance. See 42 U.S.C. §

5174(b)(1) (“The President may provide financial or other assistance under this

section. . . .”) (emphasis added); 44 C_F.R. § 206.113(a) (“FEMA may provide assistance

to individuals and households who qualify. . . .”) (emphasis added). Similarly, FEMA’s

ability to recoup distributed assistance likewise involves an element of judgment or

choice: 44 C.F.R. § 206.116(b) provides that “[a]n applicant must return funds to FEMA

... When FEMA .. . determines that the assistance was provided erroneously, that the

applicant spent the funds inappropriately, or that the applicant obtained the assistance

through fraudulent means.” 44 C.F.R. § 206.116(b) (emphasis added).

Finally, FEMA’s determination whether to grant or recoup housing assistance 1s

the “kind [of judgment] that the discretionary function exception was designed to shield.”

Gaubert, 499 U.S. at 322—23. As a court in the Northern District of California concluded

with respect to a different category of discretionary emergency assistance, “it is plain that

under the Stafford Act decisions involving the allocation and deployment of limited

governmental resources are the type of administrative judgment that the discretionary

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘Oo’

Case No. 2:22-cv-01088-CAS-JCx Date April 6, 2023

Title JEFFRY P. SAMUELS v. FEDERAL EMERGENCY MANAGEMENT

AGENCY & U.S. DEPARTMENT OF TREASURY

function exception was designed to immunize from suit.” City of San Bruno v. Fed.

Emergency Mgmt. Agency, 181 F. Supp. 2d at 1015 (“|The allocation of limited

resources among victims of disaster is clearly a matter involving “policy judgment.”’); see

also St. Tammany Par., ex rel. Davis v. Fed. Emergency Mgmt. Agency, 556 F.3d 307,

325 (Sth Cir. 2009) (“Eligibility determinations, the distribution of limited funds, and

other decisions regarding the funding of eligible projects are inherently discretionary and

the exact types of policy decisions that are best left to the agencies without court

interference.”); Ornellas v. United States, 2 Cl. Ct. 378, 380 (1983) (“[T]he gratuitous

nature of the emergency assistance payments [under the Stafford Act] supports

nonreviewability.”).

Accordingly, the Court finds that it lacks subject matter jurisdiction over plaintiffs

claims.

B. _ Failure to State a Claim

Defendants also move to dismiss plaintiff's claims pursuant to Rule 12(b)(6) for

failure to state a claim. Because the Court has determined that it lacks jurisdiction over

plaintiff's claims and must dismiss the case for the reasons set forth above, it declines to

decide whether plaintiff's claims should be dismissed on this separate basis.

C. Leave to Amend

As described above, while generally a “court should ‘freely give leave [to amend|

when justice so requires,’ ” leave to amend is “properly denied” where “amendment

would be futile.” Carrico, 656 F.3d at 1008 (quoting Fed. R. Civ. P. 15(a)(2)).

Amendment would be futile if the plaintiff cannot state a cognizable claim.

To the extent plaintiff seeks to bring statutory claims (e.g., under the APA or

Stafford Act) challenging FEMA’s discretionary conduct or the Treasury’s administration

of debt offset collection, any further amendment would be futile for the reasons set forth

above. However, to the extent that plaintiff might attempt to bring claims for

constitutional violations arising from FEMA’s alleged conduct, he may do so. See, e.g.,

Rosas v. Brock, 826 F.2d 1004, 1008 (11th Cir. 1987) (“Congress had no such intention

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘O’

Case No. 2:22-cv-01088-CAS-JCx Date April 6, 2023

Title JEFFRY P. SAMUELS v. FEDERAL EMERGENCY MANAGEMENT

AGENCY & U.S. DEPARTMENT OF TREASURY

[of preventing judicial review of unconstitutional agency action| when it enacted 42

US.C. § 5148”).

V. CONCLUSION

In accordance with the foregoing, the Court GRANTS defendants’ motion to

dismiss plaintiff's first amended complaint without prejudice. Plaintiff is hereby directed

to file any second amended complaint no later than May 1, 2023.

IT IS SO ORDERED.

00 : 00

Initials of Preparer CMI

3 The Court notes with skepticism plaintiff s ability to bring a due process deprivation of

property claim in relation to FEMA’s recoupment of conditional emergency assistance.

See Columbus Reg’] Hosp. v. United States, 990 F.3d 1330, 1349 (Fed. Cir. 2021)

(affirming dismissal of constitutional “illegal exaction” claim on the basis that 44 C_F_R.

§ 206.116(b) reserved FEMA’s rights to require an applicant to return funds if “FEMA

determines the assistance was provided erroneously, that the applicant spent the funds

inappropriately, or that the applicant obtained the assistance through fraudulent means”).

Nonetheless, in light of the liberal guidelines to amend pleadings under the Federal Rules

of Civil Procedure, such issues are “more appropriately raised in a motion to dismiss”

rather than at this speculative juncture. SAES Getters S.p.A. v. Aeronex, Inc., 219

F.Supp.2d 1081, 1086 (S.D. Cal. 2003).