Labor which plaintiffs contend violated federal law by requiring that plaintiffs pay their employees at the higher state wage rate. Under these circumstances, HUD can hardly be considered an indispensable party.
Moreover, a case not mentioned by plaintiffs but very much on point is Arthur v. Starrett City Assocs., 89 F.R.D. 542 (E.D.N.Y. 1981). Arthur was a civil rights action in which plaintiffs claimed that they were denied housing in a HUD-approved housing complex in a discriminatory manner. Defendants argued that HUD was an indispensable party to the suit because it had approved their Affirmative Fair Housing Marketing Plan and an adverse decision would subject them to HUD penalties. The court held that defendants' "largely unsupported assertion that HUD's apparently unambiguous policy is otherwise is insufficient to compel HUD's joinder under Rule 19." Id. at 546. Moreover, the court found that because the complaint explicitly disclaimed any direct challenge to HUD regulations or policy, it was not a case where complete relief could not be afforded in the absence of HUD. Id. at 546.
The facts as alleged by plaintiffs in the present case are very similar to those in Arthur. Plaintiffs do not challenge HUD policy or HUD regulations. In fact, they seek to have this court find that these federal statutes preempt state law. Furthermore, HUD has no significant interest in this lawsuit. The resolution of the dispute centers around a determination of whether or not a federal statute and the regulations promulgated thereunder preempt state law. This is a legal determination which this court can make without the continued presence of HUD in this lawsuit. As the court in Arthur stated, "the mere fact that [a party] may defend on the ground that federal law or regulations either encourage or require the complained of practices does not mean that the action cannot go forward without HUD." Id. at 546. Moreover, there is no danger of multiple litigation or inconsistent lawsuits. Plaintiffs seek no recovery from HUD in their first three causes of action, and there is no possibility that they will incur an obligation to anyone but the New York State Department of Labor. Therefore, under these circumstances, the court concludes that HUD is not an indispensable party within the meaning of Fed. R. Civ. P. 19. Accordingly, the court grants HUD's motion to dismiss these first three causes of action as to HUD for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6).
III. Plaintiffs' Cross-motion to Amend Their Complaint
Plaintiffs have cross-moved to file a second amended complaint. Plaintiffs contend that they seek to amend their complaint "to clarify their claims and address the issues raised by defendant HUD." See Plaintiffs' Memorandum of Law at 4. The court has carefully reviewed plaintiffs' proposed second amended complaint and has addressed the proposed changes, where appropriate, in the preceding discussion. The court has found nothing in this proposed complaint which would prevent it from granting HUD's motion for dismissal. Accordingly, the court denies plaintiffs' motion to file a second amended complaint pursuant to Fed. R. Civ. P. 15.
For the reasons stated above, the court concludes that it has subject matter jurisdiction to hear this action pursuant to 28 U.S.C. section 1331 and 42 U.S.C. section 1437 and that HUD has waived its sovereign immunity pursuant to 42 U.S.C. section 1404a. Nevertheless, the court concludes that plaintiffs have failed to state a claim upon which relief can be granted. Accordingly, the court grants HUD's motion to dismiss plaintiffs' fourth cause of action pursuant to Fed. R. Civ. P. 12(b)(6). In addition, the court concludes that HUD is not an indispensable party within the meaning of Fed. R. Civ. P. 19 and therefore grants HUD's motion to dismiss plaintiffs' first three causes of action as to HUD pursuant to Fed. R. Civ. P. 12(b)(6).
Finally, because plaintiffs' proposed second amended complaint would not cure the failings in their amended complaint nor change the legal analysis pertinent to HUD's motion to dismiss, the court denies plaintiffs' cross-motion to file a second amended complaint pursuant to Fed. R. Civ. P. 15.
IT IS SO ORDERED.
DATED: January 6, 1992
Syracuse, New York
Neal P. McCurn
Chief, U.S. District Judge