Case Information
*1 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA CARLOS LOUMIET,
Plaintiff , Civil Action No. 12-1130 (CKK) v. UNITED STATES OF AMERICA, et al. ,
Defendants. MEMORANDUM OPINION (June 13, 2017)
Plaintiff Carlos Loumiet filed suit against the United States Government for the
actions of its agency, the Office of the Comptroller of the Currency (“OCC”), under the
Federal Tort Claims Act (“FTCA”), and against Defendants Michael Rardin, Lee Straus,
Gerard Sexton, and Ronald Schneck (collectively, the “Individual Defendants”), alleging
claims under
Bivens v. Six Unknown Named Agents of Fed. Bureau of Narcotics
, 403 U.S.
388 (1971), as well as various state-law tort claims. In a series of rulings, the Court
previously dismissed all of Plaintiff’s claims at the motion to dismiss stage. Plaintiff
appealed to the United States Court of Appeals for the District of Columbia Circuit (“D.C.
Circuit”), which remanded for this Court to consider two issues:
first
, as to Plaintiff’s FTCA
claims, “whether [Plaintiff’s] complaint plausibly alleges that the OCC’s conduct exceeded
the scope of its constitutional authority so as to vitiate discretionary-function immunity;”
and
second
, as to Plaintiff’s claims, “the remaining defenses raised but not yet
decided in the district court.”
Loumiet v. United States
,
Pending before the Court are the Individual Defendants’ [62] Motion to Dismiss and the United States’ [63] Motion to Dismiss. Upon consideration of the pleadings, [1] the relevant legal authorities, and the record as a whole, the Court GRANTS IN PART AND DENIES IN PART the Individual Defendants’ [62] Motion to Dismiss, and GRANTS IN PART AND DENIES IN PART the United States’ [63] Motion to Dismiss. Plaintiff’s First Amendment claim for retaliatory prosecution shall procеed against Defendants Rardin, Schneck, and Sexton. Plaintiff’s Fifth Amendment claim, and all claims against Defendant Straus are DISMISSED WITHOUT PREJUDICE . Pursuant to the Westfall Act, the state-law tort claims against the Individual Defendants are CONVERTED to FTCA claims against the United States. Plaintiff’s FTCA claims against the United States may proceed, except that the abuse of process (Count III) and malicious prosecution (Count IV) claims are DISMISSED WITHOUT PREJUDICE , leaving only the claims for intentional infliction of emotional distress (Count I), invasion of privacy (Count II), negligent supervision (Count V), and civil conspiracy (Count VIII).
I. BACKGROUND The Court previously detailed the factual background of this matter in its prior *3 rulings, familiarity with which is assumed. [2] See Loumiet v. United States , 968 F. Supp. 2d 142, 145 (D.D.C. 2013) ( Loumiet I ). To the extent particular factual allegations are relevant to the Court’s analysis of the pending motions, they are detailed below.
II. LEGAL STANDARD
A. Motion to Dismiss for Lack of Subject-Matter Jurisdiction
To survive a motion to dismiss pursuant to Federal Rule of Civil Procedure
12(b)(1), Plaintiff bears the burden of establishing that the Court has subject-matter
jurisdiction over its claims.
Moms Against Mercury v. FDA
,
B. Motion to Dismiss for Failure to State a Claim
Defendants also move to dismiss the Complaint for “failure to state a claim upon
which relief can be granted” pursuant to Federal Rule of Civil Procedure 12(b)(6). “[A]
complaint [does not] suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual
enhancement.’”
Ashcroft v. Iqbal
, 556 U.S. 662, 678 (2009) (quoting
Bell Atl. Corp. v.
Twombly
,
III. DISCUSSION The Court’s analysis below proceeds as follows. First , the Court finds it appropriate to recognize a First Amendment Bivens claim for retaliatory prosecution under the particular factual circumstances of this case. Second , the Court finds that Plaintiff has plausibly alleged such a First Amendment claim against Defendants Rardin, Schneck, and Sexton, and that they are not entitled to absolute prosecutorial or qualified immunity at this procedural juncture. Nonetheless, the Court finds that Defendant Straus is entitled to absolute prosecutorial immunity, and that any non-immunized conduct fails to state a First Amendment retaliatory prosecution Bivens claim against him. Third , the Court concludes that Plaintiff’s Fifth Amendment Bivens claim must be dismissed for failure to state a claim. Fourth , the Court converts the state-law tort claims against the Individual Defendants to FTCA claims against the United Stated. In sum, this means that the only claims surviving with respect to the Individual Defendants are Plaintiff’s First Amendment claims against Defendants Rardin, Schneck, and Sexton.
Turning to the FTCA claims against the United States, the Court finds first , that discretionary-function immunity is vitiated under the circumstances of this case because Plaintiff has plausibly alleged that the tortious conduct at issue violated a clearly established First Amendment right against retaliatory prosecution; second , that Plaintiff’s malicious prosecution and abuse of process claims must be dismissed because the OCC employees at issue in this case are not “investigative or law enforcement officers” as defined by the FTCA; and third , that Plaintiff’s invasion of privacy claim may proceed. Accordingly, Plaintiff’s surviving FTCA claims are for intentional infliction of emotional *6 distress (Count I), invasion of privacy (Count II), negligent supervision (Count V), and civil conspiracy (Count VIII).
A. The Court Recognizes a First Amendment
Bivens
Claim in this Action
In
Bivens
, the Supreme Court of the United States created an implied cause of action
for money damages stemming from an alleged Fourth Amendment violation at the hands
of federal officials. 403 U.S. at 397. “Since
Bivens
, the Supreme Court has proceeded
cautiously in implying additional federal causes of action for money damages.”
Meshal v.
Higgenbotham
,
As an initial matter, the parties disagree on whether by permitting Plaintiff’s claim to proceed, the Court would in effect recognize a cause of action unprecedented in
Bivens
case law. In оther words, whether this case presents a “new context.” If so, the Court
would be required to ask and answer two follow-up questions. First, whether “Congress
has provided an alternative remedy which it explicitly declared to be a
substitute
for
recovery directly under the Constitution and viewed as equally effective.”
Carlson v.
Green
,
As a result, the Court must turn to assess whether there are “any special factors
counselling hesitation before authorizing a new kind of federal litigation.”
Wilkie
, 551 U.S.
at 550 (quoting
Bush v. Lucas
,
Both the D.C. Circuit and Supreme Court, at least impliedly, have recognized the
existence of a implied cause-of-action for retaliatory prosecution in violation of the
First Amendment guarantee of freedom of speech.
Hartman v. Moore
,
Although Defendants seek to distinguish the prosecutorial action in this case on the
basis that it was directed by a Federal agency overseeing the banking industry, they have
failed to explain
why
that distinction is at all relevant to the case law recognizing claims
against Federal agents for retaliatory prosecution. For instance, there is no indication in the
record that Plaintiff’s prosecution was motivated out of a particular concern for the safety
of the banking system. In fact, the allegations of the Complaint portray a prosecution that
was levied against an individual with relatively little involvement in the perpetuation or
*9
concealment of the illicit activity subject to the OCC’s regulatory action, and was instead,
according to the allegations, primarily motivated by Plaintiff’s complaints regarding
certain alleged racial comments made by OCC staff, and the aggressive nature of the
OCC’s investigation into Hamilton Bank.
See infra
at 26–27. Moreover, upon
administrative review, the D.C. Circuit found that the record did not support a finding that
Plaintiff’s prosecution was justified.
See Loumiet EAJA
, 650 F.3d at 800. Accordingly,
while the fact that the retaliatory prosecution was brought by a banking regulator is a point
of distinction, the salient legal and factual matters are similar to those at issue in the
controlling Supreme Court and D.C. Circuit cases regarding retaliatory prosecution. As in
Hartman
and
Moore
, the allegations here suggest that employees of a Federal entity (there,
the United States Postal Service), in reprisal for speech critical of the Federal entity,
directed a meritless investigation and prosecution (there, the trial court determined that
there was a “complete lack of direct evidence” for the alleged crime, while here, the
presiding Administrative Law Judge (“ALJ”), the Comptroller, and the D.C. Circuit found
that the enforcemеnt action was unwarranted,
see Loumiet EAJA
,
In sum, the conduct at issue, although allegedly perpetuated by banking regulators,
plainly fits the mold of the controlling authorities wherein a cause of action has
been recognized for retaliatory prosecution at the behest of Federal officials. No doubt, the
banking regulatory arena is complex and of immense importance to the American
economy, but it can hardly be said that any Federal agency does not administer an important
facet of the American economy or society. And while the D.C. Circuit has on several
occasions refused to afford a remedy in certain sensitive policy areas, the decisions
pressed by Defendants are limited to the national security and intelligence context.
See
*10
Reply Mem. at 3;
see, e.g., Klay v. Panetta
,
Even assuming that this case presents a “new context,” however, the special factor
analysis does not preclude a remedy for Plaintiff’s retaliatory prosecution claim.
Defendants contend that the Financial Institutions Reform, Recovery, and Enforcement Act
(“FIRREA”), pursuant to which the OCC took enforcement action against Plaintiff, is a
“comprehensive remedial scheme” that counsels against finding an implied cause-of-action
under the factual circumstances of this case. As an initial matter, however, there is no clear
indication that Plaintiff was properly the subject of a FIRREA enforcement action. As
relevant here, that statutory scheme applies to an “institution-affiliated party” (“IAP”),
which is defined to include: “[A]ny independent contractor (including any attorney,
appraiser, or accountant) who knowingly or recklessly participates in . . . any unsafe or
unsound practice, which caused or is likely to cause more than a minimal financial loss to,
or a significant adverse effect on, the insured depository institution.” 12 U.S.C. §
1813(u)(4). The D.C. Circuit, in reviewing the denial of Plaintiff’s request for attorney fees
in connection with the enforcement action, concluded that the administrative reсord was
*11
devoid of evidence linking Plaintiff’s allegedly illicit actions (drafting two investigative
reports) with a “significant adverse effect on the Bank.”
Loumiet EAJA
,
Beyond this, the case at bar is readily distinguishable from the controlling authorities that have declined to establish a remedy due to the existence of a comprehensive remedial scheme. In each such case, there was a statutory scheme that provided relief for similarly-situated plaintiffs, but happened not to provide relief for the litigant, either due to the particular factual circumstances, or the nature of the relief sought. Given the existence of the complex ameliorative scheme, however, the reasonable inference to draw in these cases was that Congress weighed competing policy goals and fashioned a system of remedies that reflected its policy-based determinations. Consequently, while the remedial scheme may have not afforded complete relief to the particular plaintiff at bar, judicial deference to Congressional law-making called for hesitation before creating a remedy through judicial fiat under circumstances where the evidence showed that Congress had intentionally declined to do so.
In
Bush v. Lucas
, the Supreme Court addressed a putative First Amendment claim
by a Federal employee who had allegedly been terminated for making critical public
remarks regarding his agency. 462 U.S. at 369. Following a review of the pertinent
regulatory landscape, the Court determined that “Federal civil servants are now protected
by an elaborate, comprehensive scheme that encompasses substantive provisions
forbidding arbitrary action by supervisors and procedures—administrative and judicial—
by which improper action may be redressed.”
Id
. at 385. Although recognizing that the
current system would not provide “complete relief” to the petitioner, the Court declined to
recognize a
Bivens
remedy under the circumstances given the existence of an “an elaborate
remedial system that has been constructed step by step, with careful attention to conflicting
policy considerations . . . .”
Id
. at 388. This system and other factors, in the Court’s view,
evidenced that “Congress is in a far better position than a court to evaluate the impact of a
new species of litigation between federal employees on the efficiency of the civil service.”
Id
. at 389. Similarly, in
Chilicky
, petitioners sought money damages under
Bivens
stemming from the denial of their Social Security benefits.
FIRREA was enacted in response to the savings-and-loan crisis of the 1980s to
“enhance the regulatory enforcement powers of the depository institution regulatory
agencies to protect against fraud, waste, and insider abuse.”
CityFed Fin. Corp. v. Office
of Thrift Supervision
,
Succinctly stated, Defendants’ position is that “the comprehensive remedial scheme
of the FIRREA, coupled with judicial review under the APA, is a special factor that
counsels hesitation against authorizing a
Bivens
remedy in this case.” Reply Mem. at 6. In
support, Defendants press
Sinclair
, a decision by the United States Court of Appeals for
the Eighth Circuit (“Eighth Circuit”), as dispositive of FIRREA’s status as a
“comprehensive remedial scheme” that precludes the recognition of a
Bivens
claim under
the particular factual circumstances of this case. In
Sinclair
, the proprietor of Sinclair
National Bank (“SNB”) brought a putative claim against OCC employees for a
series of adverse regulatory actions, which plaintiff claimed were retaliatory and motivated
by racial animus. These culminated in the OCC declaring the bank insolvent and appointing
the Federal Deposit Insurance Corporation (“FDIC”) as a receiver, which promptly sold
the assets of SNB to another bank.
Sinclair v. Hawke
,
The analogy between this case and
Sinclair
, while appealing, is ultimately specious.
As an initial matter, the D.C. Circuit in
Munsell
expressed skepticism with precisely the
sort of analysis pressed by
Sinclair
; namely, that APA review precludes a
Bivens
remedy.
In that case, the D.C. Circuit assessed a claim that Federal Food Safety and Inspection
Service “officials used USDA enforcement powers to retaliate against [plaintiff] for
statements he made concerning USDA’s handling of an
E. coli
outbreak in 2002.”
Munsell
v. Dep’t of Agric.
,
Whatever the significance of APA review may have been in Sinclair , it does little here to obviate the need for a Bivens remedy. In Sinclair , the OCC successfully engaged in regulatory action that could have been challenged in court pursuant to the APA. Here, the presiding ALJ and the Comptroller ultimately declined to take any enforcement action against Plaintiff. As a result, there was no final decision to review, and Defendants have not proffered any explanation of how Plaintiff, under the particular factual circumstances of this case, could have sought relief through the amalgam of FIRREA and the APA. However, while this distinction is important, it does not end the inquiry. As recounted above, the failure of a putative “comprehensive remedial scheme” to afford “complete relief” is not dispositive if the absence of such relief is the product of intentional Congressional policy making. In this vein, the Sinclair court determined that regulatory action pursuant to FIRREA was limited to APA review as a result of Congressional balancing of competing policy interests: those of banks, who would benefit from additional review, against those of depositors, who would benefit from the ability of banking *17 regulators to take prompt ameliorative action. As such, the absence of a remedy equivalent to what would be available under was not accidental, but a product of that intentional balancing of competing interests. This reasoning is consistent with that of the Supreme Court and D.C. Circuit authorities discussed earlier, each of which concluded that although the pertinent remedial scheme was limited as applied to the plaintiff at bar, that limitation was the product of Congressional choice in an area subject to Congressional law- making, and consequently counseled against the recognition of a judicially created remedy.
In order to press a similar argument in this case, Defendants would need to show that the absence of a remedy for Plaintiff under the circumstances of this case was the intentional product of how Congress constructed the administrative review procedures under FIRREA. But Defendants have completely failed to furnish any legislative or other evidence that Congress intentionally excluded claims similar to Plaintiff’s from FIRREA. Nor does the statute itself indicate an intent to exclude such claims. While it may be sensible for review of regulatory action to be limited to what is available under the APA, that conclusion does not flow so readily for prosecutorial action that is alleged to have been wholly ultra vires . In fact, Defendants have pointed to no mechanism under FIRREA for review of prosecutorial abuse, other than the APA review that generally applies to a final decision of the Comptroller. Consequently, the question at hand ultimately reduces to whether the absence of APA review for Plaintiff’s claim is the product of intentional Congressional policymaking in constructing FIRREA.
On this point, however, no evidence has beеn proffered, nor does such intent seem
likely. The absence of APA review in this case stems from the fact that the presiding ALJ
and the Comptroller ultimately determined that the enforcement action against Plaintiff had
*18
to be dismissed. As a result, to agree with Defendants, the Court would need to conclude
that Congress intended to limit review of retaliatory prosecution claims within the confines
of FIRREA to only those cases where the OCC rendered a final decision (i.e., where the
allegedly improper prosecution is successful), regardless of the length of the prosecution
and its toll on plaintiff, and the practical reality that the most meritless prosecutions are the
ones that are most likely to prove unsuccessful when subject to the review of a neutral
arbiter. Absent some affirmative evidence, the Court declines to conclude that Congress
intended this odd result.
See Munsell
,
Defendants’ remaining “special factor” argument is that recognizing a
Bivens
claim
here would have a “chilling effect” on the willingness of banking regulators like the OCC
employees at issue “to aggressively attack unsafe banking practices.” Ind. Defs.’ Mem. at
11 (citing
Sinclair
,
B. Plaintiff Has Stated a Plausible First Amendment Bivens Claim Against Defendants Rardin, Schneck, and Sexton, But Not Straus Before assessing whether the allegations of the Complaint state a plausible First Amendment claim against each of the Individual Defendants, the Court surveys the legal framework of two doctrines that could potentially preclude such a claim: absolute prosecutorial immunity, and qualified immunity.
1. Absolute Immunity
Federal prosecutors enjoy absolute immunity for “initiating a prosecution and in
presenting the State’s case . . . .”
Imbler v. Pachtman
, 424 U.S. 409, 431 (1976). This
principle has been extended by the Supreme Court to agency officials who perform tasks
under administrative auspices that are equivalent to that of a prosecutor in a court of law.
Butz v. Economou
, 438 U.S. 478, 515 (1978) (“agency officials performing certain
*21
functions analogous to those of a prosecutor should be able to claim absolute immunity
with respect to such acts”). Consequently, “those officials who are responsible for the
decision to initiate or continue a proceeding subject to agency adjudication are entitled to
absolute immunity from damages liability for their parts in that decision.”
Id
. at 516;
see
also Gray v. Poole
,
In Hartman , the Supreme Court explained the effect of absolute immunity in the context of a First Amendment claim for retaliatory prosecution. There, the Court instructed that a
action for retaliatory prosecution will not be brought against the prosecutor, who is absolutely immune from liability for the decision to prosecute . . . . Instead, the defendant will be a nonprosecutor, an official, like an inspector here, who may have influenced the prosecutorial decision but did not himself make it, and the cause of action will not be strictly for retaliatory prosecution, but for successful retaliatory inducement to prosecute.
Hartman
,
The Court addresses whether any of the Individual Defendants are entitled to dismissal on the basis of absolute prosecutorial immunity below, in connection with its assessment of whether Plaintiff has stated a plausible claim for retaliatory prosecution.
2. Qualified Immunity
The Individual Defendants also contend that they are shielded from litigation by
the doctrine of qualified immunity, which “protects government officiаls from liability for
civil damages insofar as their conduct does not violate clearly established statutory or
constitutional rights of which a reasonable person would have known.”
Pearson v.
Callahan
, 555 U.S. 223, 231 (2009) (internal quotation marks omitted). In order for a
complaint to counter an assertion of qualified immunity, a plaintiff must plead “facts
showing (1) that the official violated a statutory or constitutional right, and (2) that the right
was clearly established at the time of the challenged conduct.”
Ashcroft v. al–Kidd
, 563
U.S. 731, 735 (2011) (internal quotation marks omitted). With respect to the second
element, “though in the light of pre-existing law the unlawfulness of the officer’s conduct
must be apparent, there is no need that the very action in question have previously been
held unlawful.”
Navab-Safavi
,
Defendants contend that they did not violate a “clearly established” right because when the OCC initiated its enforcement action against Plaintiff in November 2006, there “was no law establishing that the initiation of a civil administrative proceeding—as opposed to a criminal prosecution—can support a retaliatory prosecution claim.” Ind. Defs.’ Mem. at 18. The Court notes that this is the only instance in their briefing on the pending motions where Defendants seek to distinguish the OCC’s enforcement action from other retaliatory prosecution cases on the basis that the prosecution here proceeded under administrative auspices (for example, they do not argue that this case presents a new Bivens context on that basis). This position is also somewhat at odds with Defendants’ claim of absolute prosecutorial immunity. In any event, the argument is of no avail.
The D.C. Circuit has stated unequivocally that it “clearly established in 1988 . . .
the contours of the First Amendment right to be free from retaliatory prosecution.”
Moore
v. Hartman
, 704 F.3d 1003, 1004 (D.C. Cir. 2013). More generally, in
Hartman
, the
Supreme Court stated that “the law is settled that as a general matter the First Amendment
prohibits government officials from subjecting an individual to retaliatory actions,
including criminal prosecutions, for speaking out . . . .”
*25 Given the gravity of the enforcement action, and the established case law just recounted, if the allegations are substantiated, it should have been clear to the Individual Defendants that using their immense enforcement powers as a means to retaliate against Plaintiff for his protected speech was unconstitutional. Accordingly, the Court concludes that the right against retaliatory prosecution was clearly established at the time the Individual Defendants initiated the enforcement action. As a result, the Individual Defendants are not entitled to dismissal on the basis of qualified immunity so long as Plaintiff has stated a plausible claim that they violated this right, an issue addressed in the following section.
3. Plaintiff Has Stated a Plausible Claim Against Defendants Rardin, Schneck, and Sexton, But Not Straus
The “essential elements” of a retaliatory prosecution claim are [F]irst, that the conduct allegedly retaliatеd against or sought to be deterred was constitutionally protected, and, second, that the State’s bringing of the criminal prosecution was motivated at least in part by a purpose to retaliate for or to deter that conduct. If the Court concludes that the plaintiffs have successfully discharged their burden of proof on both of these issues, it should then consider a third: whether the State has shown by a preponderance of the evidence that it would have reached the same decision as to whether to prosecute even had the impermissible purpose not been considered.
Haynesworth
,
from working with the Farmers Home Administration, a federal agency that guaranteed the bank’s loans to farmers, in retaliation for a legal dispute with the agency. Id . at 1364–65. In relevant part, the Eleventh Circuit held that “[a]ny legal similarity between [the] debarment, on the one hand, and criminal prosecution, on the other, would not have been readily apparent to government officials attempting to do their jobs on a day-to-day basis.” . at 1370. Here, for the reasons stated, the allegations suggest that the similarity was far more apparent.
[4] In Hartman , the Supreme Court added the additional requirement that plaintiffs bringing a retaliatory prosecution suit must plead and prove the absence of probable cause. 547 U.S.
Plaintiff allеges that Defendant Rardin was the examiner-in-chief (“EIC”) in charge of Hamilton Bank from 2000 to 2001, and that he was “actively involved” in the OCC enforcement action against Plaintiff, Compl. ¶ 3; that Lee Straus “is an enforcement attorney at the OCC who was the lead counsel” in the enforcement action, id . ¶ 4; that Defendant Schneck “is Director of the Special Supervision and Fraud Division at the OCC [and] was actively involved in the OCC’s various dealings with Hamilton from 2000 to 2001,” as well as with the enforcement action, id . ¶ 5; and finally, that Defendant Sexton is “Assistant Director of the Enforcement and Compliance Division of the OCC,” and was similarly “actively involved in the OCC’s various dealings with Hamilton from 2000 to 2001,” and the enforcement action, id . ¶ 6. Defendant Sexton, like Defendant Straus, is an “experienced Government enforcement lawyer.” Id . Plaintiff alleges that the Individual Defendants were all “senior, influential employees of the OCC, with particularly strong say and influence on enforcement matters.” Id . ¶ 7.
According to the Complaint, Plaintiff’s critical statements toward the OCC caused severe embarrassment to OCC “officials who had been involved in the OCC behavior relating to Hamilton that those letters criticized, including prominently, and in senior roles, defendants Rardin, Schneck, and Sexton.” Id . ¶ 52. According to Plaintiff, these same officials, “all embarrassed and angered by [Plaintiff’s] whistle-blowing, began discussing how to retаliate against him for his temerity, [and] all three of these defendants were actively involved in the case brought by the OCC.” . ¶ 61. Defendant Sexton, in at 265. Defendants do not challenge the Complaint on the basis that it has failed to adequately plead the absence of probable cause (or its equivalent), an unsurprising result given the D.C. Circuit’s determination that the enforcement action was not justified. In any event, the Court finds that Plaintiff has adequately pled the absence of probable cause, or its equivalent in the administrative setting in which the enforcement action was brought. *27 particular, is alleged to have said, in reference to the investigative reports prepared by Plaintiff, that Plaintiff had “gone too far,” and that he and others “had to pay.” Id . ¶ 64. Consequently, Plaintiff alleges that the decision to bring an enforcement action against him was “unduly influenced by defendants Rardin, Sexton and Schneck . . . .” . ¶ 72.
Taking the foregoing allegations as true and drawing all reasonable inferences in
Plaintiff’s favor, as the Court must at this procedural juncture, Plaintiff’s allegations, taken
as a whole, plausibly suggest that Defendants Rardin, Schneck, and Sexton used the fruits
of their investigation into Hamilton Bank (i.e., their scrutiny of the investigative reports
drafted by Plaintiff) to improperly induce an enforcement action against Plaintiff in reprisal
for critical statements that he made against them and the OCC more generally. This view
of the Complaint is corroborated by the fact that the ALJ, the Comptroller, and the D.C.
Circuit ultimately concluded that the enforcement action was not meritorious.
Loumiet
EAJA
,
Because the allegations against these three Defendants plausibly state that they induced the enforcement action against Plaintiff through their investigative conduct, and did not merely act as prosecutors who made the ultimate decision to prosecute, they are not entitled to absolute prosecutorial immunity at this procedural juncture. See supra at 19–20. Furthermore, because the Complaint plausibly alleges that they violated a right that the Court has concluded was clearly established at the time of the alleged violation, these three Defendants are also not entitled to qualified immunity at this procedural juncture. Nonetheless, further factual development may show that these Defendants are entitled to one or both of these immunities. The only allegations in the Complaint with respect to Defendant Straus, however, are that he was lead counsel of the enforcement action, and that he made certain comments to the press in the course of the prosecution that were critical of Plaintiff. Compl. ¶¶ 4, 78, 85. Of these two, the only actionable conduct is Defendant Straus’ press commentary, [5] his prosecutorial conduct being entitled to absolute immunity, see supra 19–20. But the gravamen of a retaliatory prosecution claim is the decision to, or inducement of, prosecution, and consequently the statements that Defendant Straus allegedly made to the press in the course of the prosecution do not make out a claim of retaliatory prosecution. Accordingly, Plaintiff’s First Amendment claim shall proceed against Defendants Rardin, Schneck, and Sexton, but shall be dismissed, without prejudice, against Defendant Straus on the basis of absolute immunity and for failure to state a сlaim.
*29
C. Plaintiff Has Not Stated a Viable Fifth Amendment Claim
Plaintiff also alleges a Fifth Amendment due process claim against the Individual
Defendants. The count in the Complaint alleging this claim merely mirrors the First
Amendment count.
Compare
Compl. ¶¶ 140–142,
with id.
¶¶ 137–139. Moreover, Plaintiff
has not briefed whether a Fifth Amendment claim for retaliatory prosecution is cognizable
under , or whether such a Fifth Amendment claim was sufficiently established to
avoid dismissal on the basis of qualified immunity. To the extent Plaintiff’s Fifth
Amendment claim is intended to bring a substantive due process claim for the First
Amendment violation already discussed at length, that is foreclosed by Supreme Court
precedent.
Albright v. Oliver
,
However, in his opposition to the pending motions, Plaintiff seeks to restyle his
Fifth Amendment claim as a “stigma plus” or “reputation plus” due process claim. Opp’n
Mem. at 32. To bring such a claim in the D.C. Circuit, Plaintiff must plausibly allege that
the Individual Defendants engaged in conduct that not only harmed Plaintiff’s reputation,
but that also either formally excluded Plaintiff from a chosen trade or profession, or caused
“harms approaching, in terms of practical effect, formal exclusion from a chosen trade or
profession . . . .”
Trifax Corp. v. District of Columbia
,
Here, Plaintiff has not alleged that the conduct of the Individual Defendants has precluded him from engaging in his chosen career as a banking law practitioner. Rather, the Complaint alleges that Plaintiff’s “practice—particularly in the banking field—largely evaporated,” and that his “income dropped significantly,” and that he “fell six рartnership levels . . . .” Compl. ¶ 106. Although these allegations plausibly state that Plaintiff’s employment prospects were impaired, that is not equivalent to him being precluded from practicing law as a banking attorney. Indeed, by the plain terms of the Complaint, he remained a partner at a law firm, and his practice only “largely” evaporated; it did not cease to exist. Accordingly, the Complaint does not state a plausible “reputation-plus” or “stigma-plus” Fifth Amendment claim, and Plaintiff has not presented any other theory of how his Fifth Amendment claim could proceed. As a result, the Fifth Amendment claim shall be dismissed.
D. The State-Law Tort Claims Against the Individual Defendants are Converted to FTCA Claims Against the United States
Defendants contend that the state-law tort claims against the Individual Defendants
for intentional infliction of emotional distress (Count I), invasion of privacy (Count II),
abuse of process (Count III), malicious prosecution (Count IV), and conspiracy (Count
VIII), are automatically converted to FTCA claims against the United States pursuant to
the Westfall Act, 28 U.S.C. § 2679(d), which “accords federal employees absolute
immunity from common-law tort claims arising out of acts they undertake in the course of
their official duties.”
Osborn v. Haley
,
E. Plaintiff’s FTCA Claim
1. Discretionary-Function Exception
The D.C. Circuit has instructed that “the discretionary-function exception does not
categorically bar FTCA tort claims where the challenged exercise of discretion allegedly
exceeded the government’s constitutional authority to act.”
Loumiet IV
,
2. Plaintiff’s Malicious Prosecution and Abuse of Process Claims Must be Dismissed
The waiver of sovereign immunity afforded by the FTCA generally does not apply to claims of malicious prosecution or abuse of process, among a number of other intentional torts. 28 U.S.C. § 2680(h). Nonetheless, the Act contains an exception to this general rule, known as the Law Enforcement Proviso, which states that “with regard to acts or omissions of investigative or law enforcement officers of the United States Government, the [FTCA] shall apply to any claim arising . . . out of . . . abuse of process, or malicious prosecution.” . Accordingly, in order for Plaintiff to pursue these two claims, as he seeks to do in the *33 Complaint, he must establish that the OCC employees who engaged in the allegedly tortious activity were “investigative or law enforcement officers of the United States.”
The FTCA defines “investigative or law enforcement officer” as “any officer of the United States who is empowered by law to execute searches, to seize evidence, or to make arrests for violations of Federal law.” Id . According to Plaintiff, OCC officials are vested with
so-called “visitorial powers,” which allows federal agents to (i) examine a bank; (ii) inspect a bank’s books and records; (iii) regulate and supervise the bank; and (iv) enforce compliance with any applicable federal or state laws concerning those activities. The agents also are empowered to engage in comprehensive investigations, where they can command attendance at depositions, administer oaths, and depose officers, directors, employees, or agents of the bank under oath.
Opp’n Mem. at 35 (citing 12 U.S.C. §§ 481, 484, 1820). The officials are also empowered
to “issue, revoke, quash, or modify subpoenas.” . (citing 12 U.S.C. § 1818(n)). In the
Court’s view, however, these powers do not suffice to render OCC officials “investigative
or law enforcement officers,” as none of these rights amount to a power to execute searches,
to seize evidence, or to make arrests. In a closely analogous case, another district court held
that officials of the Office of Thrift Supervision (“OTS”), a bank regulator, were not
investigative or law enforcement officers, as there was no “legal authority vested in the
OTS to execute searches, to seize evidence, or to make arrests for violations of Federal
law.”
Biase v. Kaplan
,
The same is true here. Of the various powers described above, the only one that
potentially suffices to render the OCC officials subject to the Law Enforcement Proviso is
the ability to subpoena evidence. Nonetheless, much like the OTS officials in
Biase
, the
OCC officials in this case can only enforce witness and document subpoenas by application
to a United States District Court. 12 U.S.C. § 1818(n) (“such agency . . . may apply to the
United States District Court . . . for enforcement of any subpena or subpena duces tecum
issued pursuant to this subsection”). Accordingly, OCC officials are not subject to the Law
Enforcement Proviso merely by virtue of their subpoena powers.
See Art Metal-U.S.A., Inc.
v. United States
,
The other powers afforded to OCC officials—to review bank records and engage in regulatory activities—likewise do not constitute the types of powers to execute searches, seize evidence, or make arrests that were envisioned by the Law Enforcement Proviso. The Proviso was enacted by Congress “as a counterpart to the case and its progeny, in that it waives the defense of sovereign immunity so as to make the Government independently liable in damages under state law for the same type of conduct that is alleged to have occurred in [,]” which involved federal narcotics agents searching a residence and making arrests. Denson v. United States , 574 F.3d 1318, 1336 (11th Cir. 2009) (citing S. Rep. No. 93–588 (1974)) (alterations in original omitted). Consequently, *35 the bank examination functions of the OCC described above are plainly not equivalent to the type of law enforcement searches and seizures that Congress intended to waive immunity for with the passage of the Law Enforcement Proviso.
Finally, although Plaintiff requests that the Court permit discovery on this issue,
which would be tantamount to jurisdictional discovery given that sovereign immunity
implicates this Court’s subject-matter jurisdiction,
[6]
he does not explain how that discovery
would be helpful to the resolution of this issue. The FTCA makes clear that whether an
official is an “investigative or law enforcement officer” depends on whether they are
“empowered by law” to execute the functions enumerated in the statute. Here, the Court
has reviewed the relevant law and found that the OCC officials are not so empowered.
Furthermore, the two out-of-Circuit authorities relied upon by Plaintiff to seek discovery
are not persuasive. First, in
Sutton
, the Fifth Circuit did not require the district court on
remand to permit discovery, as Plaintiff contends, but rather required the court to make a
determination as to whether the official at issue fit the Proviso.
Sutton v. United States
, 819
F.2d 1289, 1294 n.8 (5th Cir. 1987). And while Plaintiff seeks to equate the powers of the
OCC officials here with those of the Postal Inspectors in
Sutton
, the Fifth Circuit expressly
noted that the latter are empowered to “[m]ake arrests without warrant . . . .” . The other
*36
authority relied upon by Plaintiff,
Pellegrino
, faced the question of whether “airport
security screenings” by Transportation Security Agents constituted “searches” for purposes
of the Law Enforcement Proviso. The
Pellegrino
court expressly noted the similarity
between these “screenings” and the type of unlawful, warrantless searches that were the
subject of and the Law Enforcement Proviso, and consequently permitted discovery
to determine whether this conduct in fact amounted to a type of warrantless search subject
to the Proviso.
Pellegrino v. U.S. Transp. Sec. Admin.
,
3. Based on the Court’s Prior Ruling, The Invasion of Privacy Claim Can Proceed
“Invasion of privacy is not one tort, but a complex of four, each with distinct elements and each describing a separate interest capable of being invaded.” Greenpeace, Inc. v. Dow Chem. Co. , 97 A.3d 1053, 1061 (D.C. 2014) (internal quotation marks omitted). Of the four, the one relevant here is “public disclosure of private facts.” . The elements of this claim are “(1) publicity, (2) absent any waiver or privilege, (3) given to private facts (4) in which the public has no legitimate concern (5) and which would be highly offensive to a reasonable person of ordinary sensibilities.” Wolf v. Regardie , 553 A.2d 1213, 1220 (D.C. 1989). Plaintiff alleges that private facts were tortiously disclosed in two instances: the November 6, 2006 Notice of Charges, and an October 3, 2006 press *37 release issued by the OCC with respect to the enforcement action. Opp’n Mem. at 39–40. Both of these documents are subject to the Court’s review as they are “public records and government documents available from reliable sources.” Al-Aulaqi v. Panetta , 35 F. Supp. 3d 56, 67 (D.D.C. 2014).
Although the Court agrees with Defendants that some of the statements in these documents do not appear to concern private facts and/or are matters of public concern (e.g., the results of the Hamilton Bank investigation), the amount of fees charged by Plaintiff and his firm, relayed by both documents, is a seemingly private fact, the public importance of which is not apparent, and the disclosure of which may be highly offensive to a reasonable person (much like one may be offended by the disclosure of his or her salary). As such, Plaintiff has stated a plausible claim for invasion of privacy, in particular, the public disclosure of private facts.
The remaining question is whether this claim is timely. On this, the Court
previously ruled that the continuing tort doctrine tolled the statute of limitations with
respect to Plaintiff’s FTCA claims, all of which arose out of the allegedly retaliatory
prosecution, until the “final disposition of the case.”
Loumiet I
, 968 F. Supp. 2d at 154
(citing
Whelan v. Abell
,
IV. CONCLUSION For all of the foregoing reasons, the Court GRANTS IN PART AND DENIES IN PART the Individual Defendants’ [62] Motion to Dismiss, and GRANTS IN PART AND DENIES IN PART the United States’ [63] Motion to Dismiss. Plaintiff’s First Amendment claim for retaliatory prosecution shall proceed against Defendants Rardin, Schneck, and Sexton. Plaintiff’s Fifth Amendment claim, and all claims against Defendant Straus are DISMISSED WITHOUT PREJUDICE . Pursuant to the Westfall Act, the state-law tort claims against the Individual Defendants are CONVERTED to FTCA claims against the United States. Plaintiff’s FTCA claims against the United States may proceed, except that the abuse of process (Count III) and malicious prosecution (Count IV) claims are DISMISSED WITHOUT PREJUDICE , leaving only the claims for intentional infliction of emotional distress (Count I), invasion of privacy (Count II), negligent supervision (Count V), and civil conspiracy (Count VIII).
An appropriate Order accompanies this Memorandum Opinion.
Dated: June 13, 2017
/s/ COLLEEN KOLLAR-KOTELLY United States District Judge
Notes
[1] The Court’s consideration has focused on the following documents: • Individual Defs.’ Mot. to Dismiss and Statement of P&A in Supp., ECF No. 62 (“Ind. Defs.’ Mem.”); • United States’ Mot. to Dismiss and Statement of P&A in Supp., ECF No. 63 (“U.S. Mem.”); • Carlos Loumiet’s Opp’n to the Individual Defs.’ Mot. to Dismiss under Fed. R. Civ. P. 12(b)(6) and the United States’ Mot. to Dismiss under Fed. R. Civ. P. 12(b)(6) and 12(b)(1), ECF No. 64 (“Opp’n Mem.”); • Reply Mem. of P&A in Supp. of the Defs.’ Mot. to Dismiss, ECF No. 66 (“Reply Mem.”).
[2] The full sequence of decisions is as follows:
Loumiet v. United States
, 968 F. Supp. 2d
142 (D.D.C. 2013) (
Loumiet I
);
Loumiet v. United States
,
[3] These factual circumstances distinguish this case from the non-controlling authority
pressed by Defendants:
Bank of Jackson County v. Cherry
,
[5] Defendants acknowledge that the press commentary alleged in the Complaint is not entitled to absolute prosecutorial immunity. Reply Mem. at 8 (citing Buckley , 509 U.S. at 278).
[6]
See FC Inv. Grp. LC v. IFX Markets, Ltd.
, 529 F.3d 1087, 1094 (D.C. Cir. 2008) (“a
request for jurisdictional discovery cannot be based on mere conjecture or speculation”);
Atlantigas Corp. v. Nisource, Inc.
,