Ku v. United States Department of Housing & Urban Development

12-2399-cv
Ku v. HUD

UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT

SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY
ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY
FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1.
WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST
CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION
"SUMMARY ORDER"). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY
PARTY NOT REPRESENTED BY COUNSEL.

At a stated term of the United States Court of Appeals
for the Second Circuit, held at the Thurgood Marshall United
States Courthouse, 40 Foley Square, in the City of New York, on
the 24th day of January, two thousand thirteen.

PRESENT: DENNY CHIN,
CHRISTOPHER J. DRONEY,
Circuit Judges,
JOHN GLEESON,
District Judge.*
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EMANUEL KU,
Plaintiff-Appellant,

-v.- 12-2399-cv

UNITED STATES DEPARTMENT OF HOUSING
AND URBAN DEVELOPMENT, SHAUN DONOVAN,
Secretary of the United States
Department of Housing and Urban
Development, CUTLER, TRAINOR &
CUTLER, LLP, Foreclosure Commissioner,
CITY OF NEWBURGH, BURTON TOWERS LLC,
Defendants-Appellees.
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FOR PLAINTIFF-APPELLANT: UMAR A. SHEIKH, Loanzon Sheikh LLC,
New York, New York.

FOR DEFENDANTS-APPELLEES: ELLEN LONDON, Assistant United
States Attorney (Benjamin H.
Torrance, Assistant United States
Attorney, on the brief), for Preet
Bharara for the United States
Attorney's Office for the Southern
District of New York, New York, New
York.

*
The Honorable John Gleeson, United States District Judge
for the Eastern District of New York, sitting by designation.
 RICHARD B. GOLDEN, Burke, Miele &
Golden, LLP, Goshen, New York.

JEFFREY R. METZ (Adam Leitman
Bailey, John M. Desiderio,
William J. Geller, on the brief),
Adam Leitman Bailey, P.C., New
York, New York.

FOR AMICI CURIAE: Edward Josephson, Legal Services
NYC, New York, New York.

Appeal from a judgment of the United States District

Court for the Southern District of New York (Briccetti, J.).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,

AND DECREED that the judgment of the district court is AFFIRMED.

Plaintiff-appellant Emanuel Ku appeals from the

district court's May 15, 2012 judgment entered pursuant to its

May 14, 2012 Memorandum Decision granting the motions to dismiss

of defendants-appellees United States Department of Housing and

Urban Development ("HUD"), Shaun Donovan, Secretary of HUD,

Cutler, Trainor & Cutler, LLC, as Foreclosure Commissioner, the

City of Newburgh, and Burton Towers LLC, and denying Ku's motion

for leave to file a second amended complaint. See Ku v. U.S.
Dep't. of Hous. & Urban Dev., No. 11 Civ. 6858 (S.D.N.Y. May 15,

2012).

We assume the parties' familiarity with the underlying

facts, the procedural history of the case, and the issues on

appeal.

Ku sued defendants under the Multifamily Mortgage

Foreclosure Act, 12 U.S.C. § 3701 et seq. (the "MMFA"), and the

Fifth Amendment, alleging that he was improperly excluded from

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bidding on Burton Towers at a foreclosure sale conducted by HUD.1

The property is a subsidized apartment complex in Newburgh, New

York.

On appeal, Ku argues that the district court erred in

concluding that his suit against the federal defendants was

barred by sovereign immunity and that he lacked standing to sue

the City of Newburgh and Burton Towers.2

We review the district court's dismissal for lack of

subject matter jurisdiction de novo and its factual findings in

that respect for clear error. Makarova v. United States, 201
F.3d 110, 113 (2d Cir. 2000) (citing Close v. New York, 125 F.3d

31, 35 (2d Cir. 1997)). We review the denial of leave to amend

for abuse of discretion. ATSI Commc'ns, Inc. v. Shaar Fund,

Ltd., 493 F.3d 87, 108 (2d Cir. 2007). We have the authority to

affirm the district court decision on any grounds for which there

is a basis in the record. Chesley v. Union Carbide Corp., 927

F.2d 60, 68 (2d Cir. 1991) ("It is axiomatic . . . that we may

affirm 'on any grounds for which there is a record sufficient to

permit conclusions of law, including grounds not relied upon by

the district court.'" (citations omitted)).

1
As the district court noted, Ku did not cite either the
National Housing Act, 12 U.S.C. § 1701 et seq. (the "NHA"), or
the Administrative Procedures Act, 5 U.S.C. § 702 (the "APA"), in
his amended complaint. In its decision, however, the district
court addressed the NHA and the APA because Ku raised arguments
based on those statutes in his opposition to defendants' motions
to dismiss and his cross-motion for leave to amend the amended
complaint.
2
Ku does not appeal the denial of his Fifth Amendment
claim. At oral argument in this Court, Ku acknowledged that he
was no longer pursuing his claims against the City of Newburgh
and Burton Towers, LLC.

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1. The Motion to Dismiss

Ku alleges that the federal defendants improperly

excluded him from the auction by limiting the bidders to

governmental entities, local housing development fund

corporations, and lien holders.

The district court dismissed the claims against the

federal defendants for lack of subject matter jurisdiction on the

grounds that the United States had not waived sovereign immunity

under 12 U.S.C. § 1715z-11a(a) or the APA. The district court

held that the waiver of sovereign immunity contained in § 1702 of

the NHA did not extend to § 1715z-11a(a), and that review under

the APA was not available because the agency action here was

committed to agency discretion by law.

We need not decide these issues. Even assuming that

the United States had waived sovereign immunity for claims under

section 1715z-11a(a) and the APA in the circumstances here, Ku's

claims still fail as a matter of law.

Section 1715z-11a(a) provides, in pertinent part:

During fiscal year 1997 and fiscal years
thereafter, the Secretary may manage and dispose
of multifamily properties owned by the Secretary
. . . and multifamily mortgages held by the
Secretary on such terms and conditions as the
Secretary may determine, notwithstanding any
other provision of law.

12 U.S.C. § 1715z-11a(a) (emphasis added). The statute plainly

provides the Secretary with discretion to set the terms and

conditions for disposing of a multifamily mortgage. Here, even

assuming there are meaningful standards against which to measure

HUD's exercise of discretion, its actions in restricting the

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bidding were entirely reasonable. As the district court noted,

Burton Towers housed low-income, elderly tenants, and the

property had substantial safety deficiencies and needed

significant renovations and repairs. HUD's decision to limit the

bidding to governmental entities, local housing development fund

corporations, and lien holders was rational. As HUD's actions

were neither an abuse of discretion nor "arbitrary and

capricious," they did not violate § 1715z-11a(a) or the APA.

2. Leave to Amend

The district court did not abuse its discretion in

denying Ku leave to file a second amended complaint. Because any

amendment to his first amended complaint would have been futile,

we affirm its decision not to grant leave. Cf. Ellis v. Chao,

336 F.3d 114, 127 (2d Cir. 2003).

We have considered all of Ku's remaining arguments and

conclude that they are without merit. Accordingly, the district

court's judgment is AFFIRMED.

FOR THE COURT:
CATHERINE O'HAGAN WOLFE, CLERK

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