Laura M. Sheldon; Christopher Tone; Paul Taulbee; Sharon Taulbee v. Thomas J. Vilsack, Secretary, Department of Agriculture

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 13a0796n.06
Case No. 12-1520/12-3905
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
LAURA M. SHELDON; CHRISTOPHER
TONE; PAUL TAULBEE; SHARON
TAULBEE,
Plaintiffs-Appellants,
v.
THOMAS J. VILSACK, SECRETARY,
DEPARTMENT OF AGRICULTURE, et al.,
Defendants-Appellees,
JP MORGAN CHASE BANK NA; CHASE
HOME FINANCE, LLC; US BANK, N.A.,
Defendants.
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ON APPEAL FROM THE
UNITED STATES DISTRICT
COURT FOR THE EASTERN
DISTRICT OF MICHIGAN
AND
THE UNITED STATES
DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF
OHIO
BEFORE: BATCHELDER, Chief Judge; GUY and BOGGS, Circuit Judges.
ALICE M. BATCHELDER, Chief Judge. Christopher Tone, Paul and Sharon Taulbee,
and Laura Sheldon, the Plaintiffs-Appellants, all purchased homes with loans made by banks and
guaranteed by the United States Department of Agriculture’s (“USDA”) Rural Housing Service
(“RHS”) through its Guaranteed Loan Program (“program”). They fell behind on their mortgage
payments and faced foreclosure. They sued the banks that made the loans and sued the Defendants-
Appellees, including RHS; Thomas Vilsack, Secretary of the USDA; Dallas Tonsanger,
Undersecretary for Rural Development at USDA; and Tammye Treviño, Administrator of RHS
(“Appellees”), under the Housing Act, 42 U.S.C. § 1441 et seq., and the Administrative Procedure

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Act (“APA”), 5 U.S.C. § 551 et seq. The district courts dismissed the claims against the banks and
the Appellees. Now, in this consolidated appeal, the Appellants continue to argue that the Appellees
failed to take actions they should have taken to prevent foreclosure. For the reasons that follow, we
affirm.
I.
The Appellants’ circumstances are similar and undisputed. Tone purchased a home in 2007
with a loan from JP Morgan Chase Bank, N.A., guaranteed by RHS. Tone fell behind on his
mortgage payments, and Chase eventually notified him of its intent to foreclose. Paul Taulbee
purchased a home in 2006 with a loan from Villa Mortgage (the loan was later sold or assigned to
U.S. Bank) and guaranteed by RHS. Taulbee fell behind on his mortgage payments, and U.S. Bank
filed a complaint for foreclosure. Sheldon purchased a home in 2008 with a loan from J.P. Morgan
Chase Bank, N.A., guaranteed by RHS. Sheldon fell behind on her mortgage payments, and Chase
scheduled a foreclosure sale.
The Appellants’ nearly identical complaints before the district courts claimed that the
Appellees violated the Housing Act and the APA when they failed to implement various parts of the
Housing Act that allegedly would have helped prevent foreclosure. The Appellants made seven1
claims, asserting that they should have received the benefits of (1) moratorium relief, (2) refinancing,
(3) loan assignment and reamortization, (4) loss mitigation, (5) loan modification and partial claims,
The Appellants also alleged that their respective banks breached their fiduciary duties by failing to offer or
1
properly consider the Appellants for foreclosure avoidance and loss mitigation options. The Tone district court granted
Chase’s and U.S. Bank’s motions to dismiss, and the Sheldon district court granted Chase’s motion for judgment on the
pleadings. The Appellants have not appealed those orders.
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(6) an alleged statutory right to appeal lenders’ decisions, and (7) constitutional due process. The
Appellants sought declaratory judgments as well as injunctions, under the APA, that would require
the Appellees to implement foreclosure-avoidance and loss-mitigation provisions of the Housing
Act. The Appellees moved the district courts to dismiss claims (1), (4), (6), and (7) for lack of2
subject-matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1). They also argued that
claims (1)-(6) should be dismissed for failure to state a claim under Rule 12(b)(6).
The district courts dismissed claims (1) and (4) for lack of subject-matter jurisdiction, and
claims (2), (3), and (5) for failure to state a claim upon which relief could be granted. They
dismissed claims (6) and (7) for lack of standing.
On appeal, the Appellants continue to argue the seven claims outlined above. Despite the
wording of individual provisions in the Housing Act, they argue that Congress’s national housing
policy, which prefaces the Housing Act and is found at 42 U.S.C. § 1441, eliminates the Appellees’
discretion over whether to implement certain provisions of the Act. They argue that some of their
claims should be addressed under 5 U.S.C. § 706(2), not § 706(1). And they argue that their
statutory and constitutional due-process rights were violated.
II.
We review de novo a district court’s decision to grant a motion under Rule 12(b)(1) to
dismiss for lack of subject-matter jurisdiction. Madison-Hughes v. Shalala, 80 F.3d 1121, 1123 (6th
Cir. 1996). “We review de novo whether the district court properly dismissed a complaint pursuant
Tone and the Taulbees brought their case as a class action. The district court denied their motion for class
2
certification as moot after it dismissed their case.
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to Rule12(b)(6).” Ashland Hosp. Corp. v. Serv. Emps. Int’l Union, Dist. 1199, 708 F.3d 737, 740
(6th Cir. 2013). We also review de novo the dismissal of a claim for lack of standing. Prime Media,
Inc. v. City of Brentwood, 485 F.3d 343, 348 (6th Cir. 2007).
“Because this court’s de novo review involves only application of legal propositions to the
undisputed facts in the record, we may affirm on any grounds supported by the record even if
different from the reasons of the district court.” Abercrombie & Fitch Stores, Inc., v. Am. Eagle
Outfitters, Inc., 280 F.3d 619, 629 (6th Cir. 2002). Before we may address a claim’s merits, we must
assess whether we have jurisdiction over that claim. See Steel Co. v. Citizens for a Better Env’t, 523
U.S. 83, 101 (1998) (finding there is no “doctrine of hypothetical jurisdiction” (internal quotation
marks omitted)). “Without jurisdiction the court cannot proceed at all in any cause. Jurisdiction is
power to declare the law, and when it ceases to exist, the only function remaining to the court is that
of announcing the fact and dismissing the cause.” Id. at 94 (1998) (internal quotation marks
omitted). We cannot assume jurisdiction for the purpose of deciding the merits of the case. Id. at
94-95.
A.
The district courts’ opinions provide overviews of the Housing Act. The district court in
Tone explained:
The Housing Act of 1949, 42 U.S.C. § 1441 et seq. (“the Housing Act”), was
enacted to promote “the elimination of substandard and other inadequate housing
through the clearance of slums and blighted areas, and the realization as soon as
possible of the goal of a decent home and a suitable living environment for every
American family.” 42 U.S.C. § 1441. In furtherance of that goal, Section 502(a) of
the Housing Act authorizes the Secretary of Agriculture (the “Secretary”) to make
direct loans to borrowers seeking to finance affordable housing in rural areas. See
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42 U.S.C. § 1472(a). RHS, an agency within USDA, implements Section 502
programs. RHS acts as the lender and handles the servicing of Section 502(a) direct
loans.
In 1990, Congress amended Section 502 of the Housing Act by adding
subsection (h), entitled “Guaranteed Loans.” Among other things, this subsection
authorizes RHS to guarantee a loan made by a commercial lender to low-income
borrowers who wish to purchase or construct a single-family residence in a rural area.
See 42 U.S.C. § 1472(h). RHS is authorized to guarantee a loan in an amount equal
to 90 percent of the loan. Id. The commercial lender is responsible for the
processing, servicing, and liquidation (if necessary) of the loan. See 7 C.F.R. §
1980.309(f).
In 2009, Congress passed the Helping Families Save Their Homes Act, which
amended section 502(h) and included additional protections against foreclosures of
RHS guaranteed loans. See 42 U.S.C. § 1472(h)(13)-(17). Among other things, the
amendments direct mortgagees to engage in loss mitigation actions upon default or
imminent default of RHS guaranteed loans. See 42 U.S.C. § 1472(h)(13). The
amendments also give RHS the authority to approve the modification of guaranteed
loans that are in default or facing imminent default. See 42 U.S.C. § 1472(h)(14).
The amendments give RHS the authority to establish a program for the payment of
partial claims to mortgagees who agree to apply the claim amount to the payment of
a loan in default or facing imminent default. Id. The amendments give RHS the
authority to establish a program for the assignment of guaranteed loans to the
Secretary “upon the request of the mortgagee.” 42 U.S.C. § 1472(h)(15). The
amendments also give RHS the authority to guarantee a loan that is made to refinance
an existing Section 502 direct or guaranteed loan. 42 U.S.C. § 1472(h)(17).
Generally, Plaintiffs claim that the Federal Defendants have failed to implement
these additional protections against default.
Tone v. Vilsack, No. 1:10CV891, 2012 WL 1229926, at *1-2 (S.D. Ohio Apr. 12, 2012); see also
Sheldon v. Vilsack, No. 11-10487, 2012 WL 1068099, at *4-6 (E.D. Mich. Mar. 29, 2012)
(explaining Housing Act).
The Appellants’ arguments draw from a portion of the Housing Act, 42 U.S.C. § 1441, that
contains a lengthy Congressional declaration of national housing objectives and policy spanning
nearly 30 lines and containing multiple provisions. The Appellants rely on Congress’s general goal
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of housing for every American family, and point to agencies’ responsibility to act consistently with
the housing policy.
The Appellants seek judicial review under the APA of the Appellees’ alleged failures to
implement the Housing Act. Under certain circumstances, the APA gives courts the authority to
“compel agency action unlawfully withheld or unreasonably delayed.” 5 U.S.C. § 706(1). Before3
a court may act under § 706(1), “a party must first clear the hurdle of [5 U.S.C.] § 701(a),” which
governs when courts may exercise judicial review over the actions or inactions of agencies. See
Heckler v. Chaney, 470 U.S. 821, 828 (1985). Judicial review (and relief through § 706(1)) will be
unavailable “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)(1)-(2) (emphasis added); see Heckler,
470 U.S. at 828. “An agency action is committed to agency discretion by law if the statute does not
provide a ‘meaningful standard against which to judge the agency’s exercise of discretion.’”
Madison-Hughes, 80 F.3d at 1127 (quoting Heckler, 470 U.S. at 830). “A meaningful standard does
not exist where the applicable law is so broadly drawn that the court has no standard or substantive
priorities against which to measure an agency’s discretion.” Id. We “do not have subject matter
On appeal, the Appellants argue that some of their claims should be evaluated under 5 U.S.C. § 706(2), not
3
§ 706(1). W e disagree. Though their complaints before the district courts cited § 706 without specifying subsections
(1) or (2), their complaints and, when carefully analyzed, their arguments on appeal speak in terms of the Appellees’
failure to act. Because the gravamen of the Appellants’ claims is that the Appellees failed to act that agency action
did not occur when and where it should have § 706(1) is the relevant provision. W e note that both district courts
already considered and correctly rejected analyzing the Appellants’ claims under § 706(2) because the Appellants
focused on the Appellees’ alleged failure to act rather than on specific, affirmative agency action. See Tone, 2012 W L
1229926, at *2 n.2; Sheldon, 2012 W L 1068099, at *6 n.3.
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jurisdiction to review agency actions that are ‘committed to agency discretion by law.’” Madison-
Hughes, 80 F.3d at 1127 (quoting 5 U.S.C. § 701(a)(2)).4
What permits judicial review of agency action under § 701(a)(2) resembles what will enable
a court to “compel agency action” under § 706(1). “[A] claim under § 706(1) can proceed only
where a plaintiff asserts that an agency failed to take a discrete agency action that it is required to
take.” Norton v. S. Utah Wilderness Alliance, 542 U.S. 55, 64 (2004); see id. at 65 (“The limitation
to required agency action rules out judicial direction of even discrete agency action that is not
In a footnote in McCarthy v. Middle Tennessee Electric Membership Corp., 466 F.3d 399 (6th Cir. 2006), we
4
questioned but did not conclusively address whether three Supreme Court cases Arbaugh v. Y & H Corp., 546 U.S.
500 (2006), Eberhart v. United States, 546 U.S. 12 (2005) (per curiam), and Kontrick v. Ryan, 540 U.S. 443
(2004) invalidate Madison Hughes’s statement that courts do not have subject matter jurisdiction to review agency
decisions committed to agency discretion by law under 5 U.S.C. § 701(a)(2). McCarthy, 466 F.3d at 406 n.9.
These cases do not negate Madison Hughes’s treatment of § 701(a)(2) as circumscribing subject matter
jurisdiction. Eberhart and Kontrick both found that time limitations, in the contexts of criminal procedure rules
(Eberhart) and of bankruptcy rules (Kontrick), were not properly labeled as “jurisdictional,” but instead were claim
processing rules. See Eberhart, 546 U.S. at 15 16; Kontrick, 540 U.S. at 453 55, 459 60. Arbaugh held that Title VII’s
employee numerosity requirement (that an “employer” must have 15 or more employees for Title VII to apply, see 42
U.S.C. § 2000e(b)), located in the definitions section of the statute, did not circumscribe subject matter jurisdiction, but
rather related to the “substantive adequacy” of the plaintiff’s claim. Arbaugh, 546 U.S. at 504.
Arbaugh provided a “bright line” test for identifying whether a statutory term is jurisdictional: “If the
Legislature clearly states that a threshold limitation on a statute’s scope shall count as jurisdictional, then courts and
litigants will be duly instructed and will not be left to wrestle with the issue. But when Congress does not rank a statutory
limitation on coverage as jurisdictional, courts should treat the restriction as nonjurisdictional in character.” Id. at 515 16
(footnote and citation omitted); see generally Shweika v. Dep’t of Homeland Sec., F.3d , , No. 12 1645, 2013
W L 3821545, at *3 6 (6th Cir. July 25, 2013) (quoting and applying Arbaugh’s test). In applying Arbaugh, we need
not look in the statute for “magic words” that identify the requirement as being requisite for jurisdiction. See Sebelius
v. Auburn Reg’l Med. Ctr., 568 U.S. , , 133 S. Ct. 817, 824 (2013). Rather, “our ‘jurisdictional analysis must focus
on the legal character of the requirement, which we discern[] by looking to the condition’s text, context, and relevant
historical treatment.’” Shweika, F.3d at , 2013 W L 3821545, at *4 (alteration in original) (quoting Reed Elsevier,
Inc. v. Muchnick, 559 U.S. 154, 166 (2010)).
Chapter 7 of the APA governs “judicial review,” and § 701(a)(2) expressly limits when we may review agency
action under the APA. Section 701(a)(2)’s requirement is neither a claim processing rule like the rules in Eberhart and
Kontrick, nor an element of a plaintiff’s claim as was the employee numerosity definition in Arbaugh. It is a prescription
that delineates the “classes of cases (subject matter jurisdiction) . . . falling within a court’s adjudicatory authority.”
Kontrick, 540 U.S. at 455. In classes of cases where we have no meaningful standard by which to evaluate the agencies’
exercise of discretion, we have no jurisdiction.
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demanded by law . . . .”). In other words, § 706(1) empowers a court to compel an agency to perform
only “non-discretionary” actions. See id. at 64 (internal quotation marks omitted).5
Because we lack subject-matter jurisdiction to review agency actions committed to agency
discretion, Madison-Hughes, 80 F.3d at 1127, it is necessary to assess whether the relevant
provisions of the Housing Act give the Appellees discretion. If so, we lack authority to decide the
Appellants’ claims. See id.
B.
The portion of the Housing Act relevant to the Appellants’ first claim that the Appellants
should have received “moratorium relief” provides:
During any time that any such loan is outstanding, the Secretary is authorized under
regulations to be prescribed by him to grant a moratorium upon the payment of
interest and principal on such loan for so long a period as he deems necessary, upon
a showing by the borrower that due to circumstances beyond his control, he is unable
to continue making payments of such principal and interest when due without unduly
impairing his standard of living.
W e note that the district courts dismissed claims (2), (3), and (5) under Federal Rule of Civil Procedure
5
12(b)(6) for failure to state a claim, even though the courts generally pointed to the same rationale the Appellees’
discretion under the Housing Act’s provisions to justify dismissal here as they did to justify dismissal of claims (1) and
(4) under Rule 12(b)(1). W e address claims (2), (3), and (5) in the context of subject matter jurisdiction under 5 U.S.C.
§ 701(a)(2). Finding that, as we explain below, the Appellees’ discretion defeats subject matter jurisdiction under 5
U.S.C. § 701(a)(2), we need not address whether their discretion might create a Rule 12(b)(6) problem under 5 U.S.C.
§ 706(1).
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42 U.S.C. § 1475(a) (emphasis added). Both district courts were right to focus on the statute’s
authorizing, not requiring, the Secretary to act. Because the statute is so broadly drawn, we lack a6
meaningful standard against which to measure the Secretary’s exercise of discretion.
But the Appellants argue that the housing policy, 42 U.S.C. § 1441, eliminates agency
discretion with respect to the moratorium provision. They refer to Congress’s “goal of a decent
home and a suitable living environment for every American family.” Id. They also quote a part of
the housing policy that directs that federal agencies with responsibility for housing “shall exercise
their powers, functions, and duties under this or any other law, consistently with the national housing
policy declared by this Act and in such manner as will facilitate sustained progress in attaining the
national housing objective hereby established.” Id.
What the Appellants point to in the housing policy Congress’s general goal of facilitating
housing for American families, and agencies’ responsibility to act in accord with that goal does
not provide us with a meaningful standard of review by which we can evaluate the Appellees’
exercise of discretion. See generally Norton, 542 U.S. at 65-66 (finding that courts cannot apply §
706(1) to specific decisions committed to agency discretion even where Congress has provided a
general objective for an agency to pursue). Reading the moratorium provision in the context of the7
The district courts provided another basis for dismissing the Appellants’ moratorium claim: that RHS’s
6
interpretation of the “such loan” language in 42 U.S.C. § 1475(a) an interpretation that “such loan” refers only to direct
loans, not guaranteed loans receives deference under Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc.,
467 U.S. 837 (1984). Because that interpretation makes a moratorium available only for direct loans, and because the
Appellants held guaranteed loans, the district courts found that the Appellants failed to state a claim upon which relief
can be granted. W e need not decide the issue here.
Our forcing the Appellees to implement the moratorium provision as well as other parts of the Housing Act
7
which give the Appellees discretion in the manner the Appellants advocate might actually violate the housing policy.
Part of the “policy to be followed in attaining the national housing objective,” which the Appellants leave unmentioned,
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housing policy’s general goal does not permit us to decide the Appellants’ claim. See 5 U.S.C. §
701(a)(2); Madison-Hughes, 80 F.3d at 1127.
The Appellants’ second claim is that they should have received refinancing under the
Housing Act. This claim is based on three statutory provisions. The first provides that “[t]he
Secretary of Agriculture . . . is authorized . . . to extend financial assistance . . . for refinancing
indebtedness which . . . if not refinanced, is likely to result . . . in the loss of the applicant’s necessary
dwelling.” 42 U.S.C. § 1471(a) (emphasis added). The second provides that “[u]pon the request of
the borrower, the Secretary shall . . . guarantee a loan that is made to refinance an existing loan”; but
“[t]he Secretary may establish limitations on the number of loans guaranteed under this paragraph,
which shall be based on market conditions and other factors as the Secretary considers appropriate.”
42 U.S.C. § 1472(h)(17)(A), (F) (emphases added). The third provides that “[a]ny guaranteed loan
under this subsection may be refinanced and extended in accordance with terms and conditions that
the Secretary shall prescribe.” 42 U.S.C. § 1472(h)(9) (emphases added).
The Appellants dislike the Appellees’ decisions not to offer refinancing for guaranteed loans
under 42 U.S.C. §§ 1471(a) and 1472(h)(17), and argue that 42 U.S.C. 1472(h)(9), read in light of
the housing policy, requires refinancing. But, because the provisions denote discretion, and
because as explained above with respect to the moratorium provision the relevant part of the
housing policy does not provide a meaningful standard by which to adjudicate the alleged failure to
is that “private enterprise shall be encouraged to serve as large a part of the total need as it can.” 42 U.S.C. § 1441. Any
additional requirements placed on commercial lenders who participate in the program will increase the costs of making
loans through the program. Increasing that cost could discourage private entities from serving “as large a part of the total
need” as they otherwise would be willing to serve.
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provide refinancing, the district courts lacked subject-matter jurisdiction over the Appellants’ second
claim. See 5 U.S.C. § 701(a)(2); Madison-Hughes, 80 F.3d at 1127. We affirm dismissal.8
The Appellants’ third claim relates to the assignment of loans. The Housing Act provides9
that “[t]he Secretary may establish a program for assignment to the Secretary, upon request of the
mortgagee, of a mortgage on a 1- to 4-family residence guaranteed under this chapter.” 42 U.S.C.
§ 1472(h)(15)(A) (emphasis added). The Appellants argue that RHS’s being assigned loans is not
within the Appellees’ discretion. But that argument ignores the Secretary’s discretion over the
establishment of an assignment program in the first place. We have no meaningful standard by
which to adjudicate his choice not to establish such a program here. Nor does the housing policy
cabin his discretion.
The Appellants’ fourth claim alleges that the Appellees failed to require lenders to provide
loss mitigation to borrowers. The relevant provision says:
Upon default or imminent default of any mortgage guaranteed under this subsection,
mortgagees shall engage in loss mitigation actions for the purpose of providing an
alternative to foreclosure (including actions such as special forbearance, loan
modification, pre-foreclosure sale, deed in lieu of foreclosure, as required, support
for borrower housing counseling, subordinate lien resolution, and borrower
relocation), as provided for by the Secretary.
That RHS has implemented a refinancing program under 42 U.S.C. § 1472(h)(17) for which the Appellants
8
are ineligible does not change our analysis. We lack any meaningful standard by which to evaluate RHS’s decision not
to refinance loans of borrowers who are in arrears; nor could we, under § 706(1), compel RHS to refinance the
Appellants’ individual loans.
The Appellants’ third cause of action also refers to “reamortization”; the Appellants take issue with RHS’s
9
decision in 1991 to stop requiring commercial lenders to provide reamortization to borrowers. The Appellants would
like RHS to reinstate its former requirement. They claim that RHS’s dropping the requirement in 1991 is reviewable
under 5 U.S.C. § 706(2). But the Appellants give no authority to show that RHS’s ceasing to require commercial lenders
to reamortize guaranteed loans supports a claim under § 706(1) or (2), or that the Appellants may bring this claim now
(twelve years after RHS exercised its discretion in this way).
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42 U.S.C. § 1472(h)(13) (emphasis added). Whether lenders engage in loss mitigation is up to the
Secretary, and we have no meaningful standard by which to evaluate the Secretary’s decision.
Though the Appellants again point to the housing policy, 42 U.S.C. § 1441, they are for the same
reasons outlined above mistaken to conclude that it enables our review. Accordingly, we lack
jurisdiction.
For the Appellants’ fifth claim, which relates to loan modification and partial claims, the10
Appellants look to 42 U.S.C. § 1472(h)(14):
The Secretary may authorize the modification of mortgages, and establish a program
for payment of a partial claim to a mortgagee . . ., for mortgages that are in default
or face imminent default, as defined by the Secretary. Any payment under such
program directed to the mortgagee shall be made at the sole discretion of the
Secretary and on terms and conditions acceptable to the Secretary . . . .
42 U.S.C. § 1472(h)(14) (emphasis added). Again, § 1472(h)(14) gives the Secretary discretion; we
have no power to “compel agency action,” 5 U.S.C. § 706(1), here.
In short, we affirm the district courts’ judgments as to claims one through five on the basis
that, because the Housing Act provides the Appellees with discretion, we lack jurisdiction to
consider the Appellants’ claims.
C.
The district courts dismissed the Appellants’ sixth and seventh claims, which relate to
statutory and constitutional due process, because the Appellants did not demonstrate any injury in
fact and so lack standing. Standing is an aspect of justiciability, Warth v. Seldin, 422 U.S. 490, 498
Partial claims are mortgage payments the Secretary may make (on behalf of borrowers) to commercial lenders
10
and for which borrowers must eventually repay the Secretary. See 42 U.S.C. § 1472(h)(14).
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(1975), and “a plaintiff must demonstrate standing for each claim he seeks to press,”
DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 335 (2006). The question of standing asks whether
a party has a sufficient stake in the controversy. Sierra Club v. Morton, 405 U.S. 727, 731-32
(1972). “Typically . . . the standing inquiry requires careful judicial examination of a complaint’s
allegations to ascertain whether the particular plaintiff is entitled to an adjudication of the particular
claims asserted.” Allen v. Wright, 468 U.S. 737, 752 (1984). There are three constitutional
limitations on standing: injury in fact, causation, and redressability. See Steel Co., 523 U.S. at 102-
03. Of particular relevance here is the “injury in fact” requirement: “[T]he plaintiff must have
suffered an injury in fact an invasion of a legally protected interest which is (a) concrete and
particularized, and (b) actual or imminent, not conjectural or hypothetical.” Lujan v. Defenders of
Wildlife, 504 U.S. 555, 560 (1992) (footnote, citations, and internal quotation marks omitted).
The portion of the Housing Act relevant to the Appellants’ sixth claim provides that the
Secretary shall have the power to . . . issue rules and regulations which assure that
applicants denied assistance under this subchapter or persons or organizations whose
assistance under this subchapter is being substantially reduced or terminated are
given written notice of the reasons for denial, reduction or termination and are
provided at least an opportunity to appeal an adverse decision . . . .
42 U.S.C. § 1480(g) (emphasis added). The Appellants claim that the statute requires RHS to create
an appeals process so that private lenders’ decisions can be reviewed.
Section 1480(g) places the issuance of rules and regulations squarely within the Secretary’s
discretion, and RHS has already established an appeals process that precludes borrowers’ appealing
lenders’ decisions. See 7 C.F.R. § 1980.399 (“Decisions made by the Lender are not covered by this
paragraph . . . .”); id. § 1980.399(b)(2) (“The Lender’s decision to deny servicing relief is not subject
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to appeal.”). The Appellants can show no injury no invasion of a protected legal
interest resulting from the way the Secretary chose to implement 42 U.S.C. § 1480(g). The
Appellants have no protected legal interest in an appeals process that the Secretary was authorized,
but not obligated, to establish.
Appellant Sheldon also claims that she has constitutionally protected property interests in11
“various provisions” in the Housing Act, and claims that she is entitled to notice of RHS’s decisions
and to appeal those decisions despite agency regulations that govern the guaranteed loan program
and indicate the contrary. But she fails to show, specifically, how she suffered the injury in fact
necessary for standing. If the Housing Act and APA required specific action of the Appellees under
the provisions raised in claims one through six, her argument might have merit. Because no action
was required, there was no injury in fact necessary for Sheldon to have standing.
D.
Tone and the Taulbees argue that the district court erred in denying their motion for leave to
amend their complaint and that, if we rule in their favor, the district court should reconsider their
motion. Because we affirm the dismissal, we need not act on the conditional request.
Sheldon argues that the district court abused its discretion by dismissing her complaint with
prejudice when the Appellees could have asked Sheldon to clarify her complaint and when she
sought to clarify her argument in her response to the Appellees’ motion to dismiss and in a surreply.
But Sheldon never moved for leave to amend her complaint, so the district court did not abuse its
Tone and the Taulbees do not raise the constitutional due process argument on appeal, though the Appellees
11
still address the argument in their brief.
14

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12 1520/3905, Sheldon v. Vilsack
discretion. See Winget v. JP Morgan Chase Bank, N.A., 537 F.3d 565, 572 (6th Cir. 2008) (“The
district court does not abuse its discretion in failing to grant a party leave to amend where such leave
is not sought.” (internal quotation marks omitted)).
III.
For the foregoing reasons, we AFFIRM the judgments of the district courts.
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