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Administrative Law Keyed to Lawson
Darby v. Cisneros
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- Topic: Identifies the topic of law and where this case fits within your course outline.
- Parties: Identifies the cast of characters involved in the case.
- Procedural Posture & History: Shares the case history with how lower courts have ruled on the matter.
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- Brief Facts: A Synopsis of the Facts of the case.
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- Facts: What are the factual circumstances that gave rise to the civil or criminal case? What is the relationship of the Parties that are involved in the case. Review the Facts of this case here:
Petitioner owned a large amount of real estate he had purchased from HUD using straw purchasers to buy the property and then transfer it back to him. This plan was to avoid HUD’s “rule of seven,” which prevented rental properties from receiving single- family mortgage insurance if the mortgagor already had financial interest in seven or more similar projects in the same project or subdivision. A combination of low rents, falling interest rates and a depressed rental market resulted in HUD becoming liable for over $6.6 million in insurance claims. HUD responded with suspicion of Petitioner’s activities, and proposed debarment. The Administrative Law Judge concluded that Petitioner had disclosed most of the relevant facts of his plan to avoid the “rule of seven” to HUD employees, and capped the disbarment at 18 months. Petitioner filed suit in the United States District Court for the District of South Carolina seeking an injunction and a declaration that the administrative actions were imposed for the purpose of punishment, in violation of HUD’s own regulations, and therefore “not in accordance with law” under APA Section:706(2)(A). The District Court denied Respondent’s motion to dismiss, holding that the administrative remedy was inadequate and a resort to that remedy would have been futile. However, the Court of Appeals reversed.
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