UNITED STATES of America, Plaintiff, v. Michael D.J. EISENBERG, Defendant.
Civil Action No. 13-1629 (BAH)
United States District Court, District of Columbia.
Signed December 15, 2015
BERYL A. HOWELL, United States District Judge
seal without the Court explicitly ordering them to do. See, e.g., Dkt. 470 at 2 (“In accordance with this Court‘s September 29, 2015 Order (ECF No. 462), Plaintiff will file on the public record a copy of [its motion], in which the confidential material will be redacted, within five business days.“); Dkt. 503 at 2 (“Mr. Lazarenko will file a redacted version of [his motion] on PACER.“). The instant motion, however, contains no such language indicating compliance with the September 29, 2015 Memorandum Opinion and Order. Because the Court‘s business is the public‘s business, the Court will make compliance with the three conditions outlined above a requirement for the instant motion as well as for all subsequent motions for leave to file under seal in this case.
Accordingly, it is hereby
ORDERED that Claimant Pavel Lazarenko‘s Motion For Leave to File Under Seal [Dkt. 513] is GRANTED; it is
FURTHER ORDERED that Claimant‘s Supplemental Reply and Objection to Plaintiff‘s Use of Claimant‘s [redacted] [Dkt. 513-1], the Declaration of Ted W. Cassman [Dkt. 513-2], Exhibit 1 to the Declaration of Ted W. Cassman [Dkt. 513-3], Exhibit 2 to the Declaration of Ted W. Cassman [Dkt. 513-4], and Exhibit 3 to the Declaration of Ted W. Cassman [Dkt. 513-5] may be filed under seal and the Clerk of the Court is directed to docket them; it is
FURTHER ORDERED that within five business days Claimant shall file on the public record a copy of each of these documents in which he redacts confidential material and makes as few redactions as absolutely necessary; and it is
FURTHER ORDERED that all subsequent motions for leave to file under seal that either party may file in this case comply with the three conditions set forth in this Memorandum Opinion and Order.
SO ORDERED.
Signed December 15, 2015
Michael D.J. Eisenberg, Washington, DC, pro se.
MEMORANDUM OPINION
BERYL A. HOWELL, United States District Judge
The United States initiated this suit to recover funds under
I. BACKGROUND
The following facts derive from the whole record, including the parties’ various statements of material facts, briefs, exhibits, and other evidence in the record.
A. FECA Claim
Gregory Thompson, an employee of the U.S. Department of the Navy, was injured in a slip-and-fall accident on December 6, 2007. Pl.‘s Statement Material Facts Supp. Mot. J. Pleadings & Partial Summ. J (“Pl.‘s SMF“) ¶ 7, ECF No. 26-1; Def.‘s Material Facts (“Def.‘s SMF“) at 7, ECF No. 85; Def.‘s Counterclaim Against the United States of America (“Def.‘s Proposed Counterclaim“) ¶ 10, ECF No. 62-2. After the accident, pursuant to the FECA, Thompson filed a claim with the Department of Labor (“DOL“) Office of Workers’ Compensation Programs (“OWCP“) for medical benefits and lost wages related to the injuries caused by the accident. Pl.‘s SMF ¶ 8; Def.‘s SMF at 7.2 By letter dated February 19, 2008, Thompson received notification from OWCP that his claim had been accepted. Def.‘s Mem. Supp. Opp‘n Pl.‘s Mot. Partial J. Pleadings & Partial Summ. J. (“Def.‘s Mem.“), Ex. A (“Thompson FECA Claim Acceptance Notice“), ECF No. 84-1. Over a year later, by letter
Thompson, represented by Eisenberg, requested reconsideration of OWCP‘s decision to terminate his benefits, but OWCP denied this request on July 7, 2010. See Def.‘s Mem., Ex. C (“Thompson FECA Claim Reconsideration Notice“), ECF No. 84-3.
Notwithstanding OWCP‘s notification of termination of Thompson‘s benefits, compensation was apparently paid on behalf of Thompson, at least to medical providers, after June 7, 2009. For example, DOL payment history reports in the record reflect that while Thompson‘s lost wages compensation stopped after June 6, 2009, see Def.‘s Mem., Ex. D (“October 8, 2010 Letter“) at 2-6 (attached report of “Compensation Payment History“), ECF No. 84-4; id., Ex. I (“October 4, 2011 Letter“) at 50-53 (attached “Payment History Inquiry Report“), ECF No. 84-8; Pl.‘s Opp‘n Def.‘s Mot. Amend Answer (“Pl.‘s Opp‘n Answer“); Ex. 8 at 46-49 (Wackenhut, Def. United States’ Mot. Dismiss or Summ. J. (“Pl.‘s Wackenhut Mot.“), Ex. D, ECF No. 8-2) (“Payment History Inquiry Report“), ECF No. 88-1, he continued to receive medical benefits through February 10, 2011, see October 4, 2011 Letter at 40-49 (attached “Bill Pay History Report” showing medical benefits disbursed through February 10, 2011); see also Pl.‘s Opp‘n Answer, Ex. 8 at 40-45 (Pl.‘s Wackenhut Mot., Ex. C, ECF No. 8-2) (“Bill Pay History Report” showing medical benefits disbursed through August 27, 2009).3
B. Third Party Lawsuit
On October 2, 2009, Thompson, represented by Eisenberg, filed suit in the U.S. District Court for the Eastern District of Virginia against a third party, Wackenhut Services, Inc. (“Wackenhut“), and the United States for negligence relating to Thompson‘s December 6, 2007 slip-and-fall accident. Wackenhut, Compl., ECF No. 1;4 see also Pl.‘s SMF ¶¶ 10-11; Def.‘s SMF at 7; Def.‘s Proposed Counterclaim ¶ 10. On December 7, 2009, the United States filed a Motion to Dismiss, or Alternatively, for Summary Judgment (“Pl.‘s Wackenhut Mot.“), Wackenhut, ECF No. 7, supported by a Declaration of Antonio A. Rios (“Rios Decl.“), id., ECF No. 8-1, Deputy Director
Thompson and Wackenhut then settled the negligence action for $675,000. Pl.‘s SMF ¶ 12; Def.‘s SMF at 7. On November 5, 2010, Eisenberg, on behalf of Thompson, filed a Notice of Settlement in the Wackenhut suit, Wackenhut, ECF No. 234, which was followed by a joint Stipulation of Dismissal With Prejudice, on November 16, 2010, id., ECF No. 235.
The settlement award was issued jointly to Thompson and Eisenberg‘s law firm. See Def.‘s Mem., Ex. E (“Third-Party Lawsuit Settlement Letter“) at 2, ECF No. 84-5. Eisenberg admits that “[u]pon receiving the $675,000 from the settlement, [he] distributed the proceeds to Mr. Thompson and paid himself an attorney‘s fee.” Pl.‘s SMF ¶ 14; Def.‘s SMF at 7.
C. Government Refund-Related Correspondence
On October 7, 2010, at Eisenberg‘s request, see Def.‘s SMF ¶ 15 (asserting that “[d]efendant did request, as a confirmation what, if any funds, were due through Mr. Thompson“), Thompson wrote a letter to OWCP “requesting the total amount of compensation paid” by OWCP for his case, October 8, 2010 Letter at 1. By letter dated October 8, 2010, Gloria Watson, a Claims Examiner at OWCP, responded to Thompson, attaching “a copy of [his] compensation payment history.” Id.5 Handwritten on one copy of the October 8, 2010 letter submitted by Eisenberg in this case, on the bottom right-hand corner, is the phrase, “Workers Comp Payback $52,900.45,” along with a second handwritten number “52,900.45” a few lines below the phrase. Id. The attached payment history printout of Thompson‘s “Compensation Payment History,” which appears to have been generated that day from the “Employment Standards Administration Federal Employees’ Compensation System,” id. at 2, shows net total payments of $94,261.33 from January 22, 2008 through June 6, 2009, id. at 6.
Thompson forwarded Eisenberg a copy of the October 8, 2010 letter without any handwriting, via email on October 14, 2010. Def.‘s Mem., Ex. U (“October 14, 2010 Email“), ECF No. 84-19. Eisenberg replied to Thompson the same day, stating: “This appears to include your paycheck as well. You need to contact HR and ask them what benefits you have to payback [sic] (all of them or just medical and/or paycheck, etc) and an exact number of what you owe.” Id.
Over six months after the settlement of the Wackenhut suit, Eisenberg submitted, by letter dated June 9, 2011, a Long Form Statement of Recovery (“SOR“) notifying DOL, Office of the Solicitor (“DOL-SOL“), that Thompson had “recently” received a third-party damage award in a settlement against the third-party involved in Thompson‘s OWCP claim. Pl.‘s Mem. Supp. Mot. Partial J. Pleadings & Partial Summ. J. (“Pl.‘s Mem.“), Ex. 1 (“June 9, 2011 Letter“), ECF No. 26-2; Def.‘s Mem., Ex. F (“June 9, 2011 Letter“), ECF No. 84-6.
A little over a month later, by letter dated July 19, 2011 to Eisenberg, Onetia J. Evans, a DOL-SOL Paralegal Specialist, acknowledged the receipt of the SOR, but raised concern over the computation of the amount to be refunded. Pl.‘s Mem., Ex. 2 (“July 19, 2011 Letter“), ECF No. 26-3; Def.‘s Mem., Ex. G (“July 19, 2011 Letter“), ECF No. 84-7. Specifically, DOL indicated that OWCP had disbursed additional benefits to Thompson in the interim between the Wackenhut suit settlement and the receipt of the SOR; stating:
Since you did not timely file the required Statement of Recovery to compute the Government‘s statutory right of reimbursement and to establish the surplus, the [OWCP] continued to pay benefits to and on behalf of your client. Current disbursements total $128,393.53 as of June 29, 2011.
July 19, 2011 Letter. Consequently, the letter cautioned:
If you insist on paying the Government‘s right of reimbursements in the amount of $52,900.45 based on disbursement at the time of the settlement that you computed at $70,533.93, there will be an overpayment of $57,859.60 which is current disbursements of $128,393.53 minus $70,533.93 disbursements at the time of settlement.
Id. In other words, because the SOR was not timely filed, OWCP had disbursed benefits for Thompson after the October 2010 Wackenhut settlement, bringing the total amount of disbursements to $128,393.53. The letter attached an amended SOR and demanded payment of a refund to OWCP in the amount of $96,295.15 within thirty days. Id.
The next month, on August 16, 2011, Eisenberg spoke with Gertrude G. Gordon, DOL-SOL‘s Chief of Subrogation, and requested that she “explain how the numbers on the Statement of Recovery were reached” in the July 19, 2011 letter. Pl.‘s Mem., Ex. 3 (“August 16, 2011 Letter“) at 1, ECF No. 26-4. Gordon wrote back to Eisenberg “apologize[ing] for any miscommunications between” Eisenberg and her staff, but reiterating that the SOR “was not timely filed” and that OWCP “continued to pay benefits to and on behalf of your client,” with “[c]urrent disbursements total[ing] $128,393.52 as of June 29, 2011.” Id. She further explained that, “since the [OWCP] did not suspend your client‘s benefits, current disbursements total $128,393.53 which results in a refund of $96,295.15.” Id. Acknowledging that Eisenberg “stated that [he had] $52,900.45 ready to pay the Government‘s statutory right of
Two months later, by letter dated October 4, 2011, Evans, the Paralegal Specialist, responded to Eisenberg‘s “recent request for current disbursement information” for Thompson‘s FECA claim, stating that the United States had disbursed $98,792.13 in pay compensation and $29,601.40 in medical compensation—a total of $128,393.53 in compensation—as of September 27, 2011. Pl.‘s Mem., Ex. 4 (“October 4, 2011 Letter“), ECF No. 26-5; October 4, 2011 Letter at 1.
Subsequently, on October 23, 2011, Eisenberg advised DOL-SOL of “Mr. Thompson‘s family income and expenses.” Def.‘s Mem., Ex. J (“October 23, 2011 Correspondence“), ECF No. 84-9; see Pl.‘s Mem., Ex. 5 (“November 17, 2011 Letter“), ECF No. 26-6; Def.‘s Mem., Ex. K (“November 17, 2011 Letter“), ECF No. 84-10. After complaining that DOL had failed to timely contact him and Thompson or “to return [his] calls from nearly six weeks ago,” Eisenberg explained that Thompson‘s financial situation was “strained” such that making even a $100 monthly payment “would create a financial hardship.” October 23, 2011 Correspondence. He represented, “[h]owever,” that “as a matter of due course and act of good faith, the family is prepared to pay the lump sum amount that was withheld back in November ($52,900.45) and make monthly payments of $100.00.” Id. Eisenberg further stated,
A good faith effort was made to protect the financial interests of the government when the settlement with the third-party contractor was made. As discussed above, it appears that it was the Agency‘s error that created the situation the family now finds itself in. I would ask as a matter of compassion that the remaining moneys, after the lump sum withheld back in November is paid ($52,900.45), be waived. If the Government is unwilling to assist this former member of the United States military and nearly 20 year civil servant, the family will agreed [sic] to the payment scheme discussed above. But, if the Government is unwilling to agree to the aforementioned, then the moneys currently being held will need to be used to start monthly payments.
Id.
DOL-SOL responded, by letter dated November 17, 2011, that, under
The following month, by letter dated December 19, 2011, Eisenberg requested “a formal meeting” with Gordon and DOL-SOL “regarding the overpayment issue your office has caused my client.” Def.‘s Mem., Ex. L (“December 19, 2011 Letter“), ECF No. 84-11. In the letter, Eisenberg accused the government of “nonfeasance” and alleged that any payments to Thompson over the amount of $52,900.45—the amount which Eisenberg had set aside from the settlement to pay the government—were “separate overpayment[s] caused by your office” that “have nothing to do with our settlement notification.” Id. According to Eisenberg, the government had failed to stop making payments to Thompson, who “had no reason due to your inaction to believe that he was not entitled to these monies.” Id. Eisenberg thus alleged that any amount over $52,900.45 fell outside the scope of
On March 12, 2012, Eisenberg met with Alexandra A. Tsiros, Counsel for FECA Subrogation at DOL-SOL, and the Deputy Associate Solicitor. See Pl.‘s Mem., Ex. 6 (“July 31, 2012 Letter“), ECF No. 26-7; Def.‘s Mem., Ex. N (“July 31, 2012 Letter“), ECF No. 84-12. Tsiros memorialized the discussion during the March 12, 2012 meeting in a letter to Eisenberg, dated July 31, 2012, making yet another demand for payment. Id. Notably, the letter reflected that Eisenberg “stated during the meeting in our office that the settlement funds had already been used to purchase an annuity for your client, and, as a consequence, your client does not have sufficient income to reimburse the government.” Id. The letter warned that, “[b]ecause it is apparent that you distributed funds to your client and paid yourself an attorney‘s fee of $101,250.00 without paying the refund due to the United States under
On August 12, 2012, in an email to Tsiros, Eisenberg offered to settle the matter, on behalf of Thompson, for the $52,000 retained from the settlement and $500 monthly payments “until the rest is paid off.” Def.‘s Mem., Ex. N(2), ECF No. 84-13. Tsiros responded that she would review the offer, discuss it with the appropriate parties, and “get back to you as soon as possible.” Id. The record does not reflect any follow-up communication between Eisenberg and Tsiros.
On September 24, 2012, Eisenberg emailed Marcia Harris at DOL requesting “a sit-down meeting with you and your supervisors” regarding “some new information [that] may have come to light that needs to be properly addressed.” Def.‘s Mem., Ex. O, ECF No. 84-14. The record reflects no such meeting or further communication until December 14, 2012, on which date Tsiros sent Eisenberg a letter representing DOL-SOL‘s “final attempt to collect this debt before referring the matter to the Department of the Treasury for collection.” Pl.‘s Mem., Ex. 7 (“December 14, 2012 Letter“), ECF No. 26-8; Def.‘s Mem., Ex. P (“December 14, 2012 Letter“), ECF No. 84-15. In response, on January 13, 2013, Eisenberg emailed Tsiros
D. Instant Lawsuit
The United States filed the Complaint in this matter on October 24, 2013, seeking recovery solely from Eisenberg of $96,295.15 under
After unsuccessful mediation of the dispute,7 and at the request of the United States and Thompson, see Joint Status Report, ECF No. 24, discovery was stayed until the resolution of any pre-discovery dispositive motions, see Minute Order (June 3, 2014). The United States subsequently filed, on June 11, 2014, its pending dispositive motion, ECF No. 26.
Eisenberg then took approximately nine months, until March 23, 2015, after multiple extensions of time, see Minute Order (June 24, 2014); Minute Order (July 9, 2014); Minute Order (March 6, 2015), to complete the submission of his opposition to the United States’ motion, see ECF Nos. 83-85. In the interim, he filed approximately twelve additional motions, including motions to file cross-claims against three additional third-parties—a legal malpractice insurance company and two insurance brokers, see ECF Nos. 31-32, a motion to stay the dispositive motions schedule, see ECF No. 37, a motion for leave to file amended cross-claims against Thompson and his wife,8 see ECF No. 63, five motions for extensions of time related to those motions, see ECF Nos. 52-54, 67-68, and his pending motion to file counterclaims against the United States, ECF No. 62, for selective prosecution, per se discrimination, denial of due process and notice, and civil conspiracy, see Def.‘s Proposed Counterclaim ¶¶ 21-45.9
Eisenberg withdrew two of those motions, see ECF Nos. 72, 78; Minute Order (Feb. 2, 2015); Minute Order (Feb. 23, 2015), and the Court held a hearing on the remaining substantive motions on February 11, 2015, see Minute Entry (Feb. 11, 2015); Minute Order (Feb. 11, 2015). Eisenberg then stipulated to the dismissal of the third-party insurance companies, see
After yet another extension of time, see Minute Order (March 6, 2015), Eisenberg finally submitted opposition papers, see ECF Nos. 83-85, and then, on March 29, 2015, filed his pending motion to amend his Answer, ECF No. 86, to add two additional affirmative defenses—estoppel and selective prosecution, see Def.‘s Proposed Answer at ¶¶ 21-22.10
II. DISCUSSION
The Court first discusses the applicable statutory and regulatory framework and then addresses Eisenberg‘s two motions to amend his pleadings before turning to the United States’ dispositive motion, for which the record is sufficient for a decision on the merits in favor of the United States.
A. Section 8132 Statutory and Regulatory Framework
Under the FECA, federal employees may receive compensation for injuries sustained while performing their employment duties. See
The scope of
Section 8132 imposes only two conditions precedent to an employee‘s obligation to “refund ... the amount of compensation paid by the United States.” The first is that the employee must have suffered an injury or death under circumstances creating a legal liability in a third party to pay damages. The second is that the employee or his beneficiaries must have received money or other property in satisfaction of that liability.
Id. at 173-74; see Gonzalez, 609 F.3d at 456 (recognizing the “only two
The governing regulations are consistent with the statute. Under the regulations, a FECA claimant “can be required to take action,” by OWCP or DOL-SOL, against a third party who wholly or partially caused the claimant‘s injuries.
[a]ny person who has filed a FECA claim that has been accepted[,] ... is required to notify OWCP or [DOL-SOL] of the receipt of money or other property as a result of a settlement or judgment in connection with the circumstances of that claim ...... in writing within 30 days of the receipt of such money or other property or the acceptance of the FECA claim, whichever occurs later.
B. Defendant‘s Motions to Amend His Pleadings
Eisenberg seeks to file counterclaims against the United States for (1) selective prosecution, (2) per se discrimination, (3) denial of due process and notice, and (4) civil conspiracy, alleging that the United States “selectively enforced this pending action against him because of his religion, race, gender and disability status,” conspired with the Thompsons to collect funds from him, and failed to “follow its own regulations.” Def.‘s Proposed Counterclaim ¶¶ 1-3; see id. ¶¶ 21-28 (“Count I—Selective Prosecution of Defendant Eisenberg“), 29-35 (“Count II—Per Se Discrimination“), 36-42 (“Count III—Denial of Due Process and Notice“), 43-45 (“Count IV—Conspiracy to Make Mr. Eisenberg Solely Liable“). He seeks both injunctive relief, in the form of “[a]n immediate dismissal (with prejudice) of the pending lawsuit against” him, id. ¶ 46, and money damages of twelve million dollars, plus fees and costs, id. at ¶ 47. Eisenberg similarly seeks to amend his answer to assert the affirmative defenses of estoppel and selective prosecution. See Def.‘s Proposed Answer ¶¶ 21-22. As support for these additional defenses, Eisenberg alleges that the government is “estopped from taking this action due to its failure to carry out its mandatory duties under the DOL‘s guidelines,” and is “selectively prosecuting the Caucasian, Jewish, Childless person who is not totally and permanently disabled versus the non Caucasian, non Jewish, person with Children who is totally and permanently disabled.” Id.
1. Legal Standard
The same legal standard applies to both of the defendant‘s motions. Generally, a party must assert in its responsive pleading any counterclaim against an opposing party when it “arises out of the transaction or occurrence that is the subject matter of the opposing party‘s claim.”
Because of the timing and nature of the counterclaims that Eisenberg seeks to assert, the
While
In the absence of any apparent or declared reason—such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of the amendment, etc.—the leave sought should, as the rules require, be “freely given.”
Foman, 371 U.S. at 182; Harris, 126 F.3d at 344.
While that standard is “generous,” Harris, 126 F.3d at 344, “[u]ndue delay, undue prejudice to the defendant or futility of the proposed amendment are factors that may warrant denying leave to amend,” Westrick, 893 F.Supp.2d at 264 (citing Richardson v. United States, 193 F.3d 545, 548-49 (D.C.Cir.1999)); see also Foman, 371 U.S. at 182; Hettinga v. United States, 677 F.3d 471, 480 (D.C.Cir.2012) (citing James Madison Ltd. ex rel. Hecht v. Ludwig, 82 F.3d 1085, 1099 (D.C.Cir.1996)). When a party cannot allege adequate facts to state a claim, or the amended pleading would not survive a motion to dismiss, a court acts within its discretion in denying leave to amend a pleading as futile. See Rollins v. Wackenhut Servs., Inc., 703 F.3d 122, 131 (D.C.Cir.2012); Hettinga, 677 F.3d at 480; In re Interbank Funding Corp. Sec. Litig., 629 F.3d 213, 218 (D.C.Cir.2010).
Here, both the undue delay and the futility of Eisenberg‘s proposed counterclaims and amendments warrant denial of his motions.
2. Undue Delay
Eisenberg was given over six months from the time he filed his Answer to amend his pleadings, and he was on clear notice of the final deadline to do so. After the Complaint, ECF No. 1, was filed on October 23, 2013, Eisenberg was granted a two-week extension to file his answer, see Minute Order (Jan. 13, 2014), as well as permission to file a third-party claim against Thompson, see Minute Order (Feb. 14, 2014). In an untimely Joint Meet and Confer Report (“JMCR“), ECF No. 14, which was filed by the parties only after prompting by the Court‘s order to show cause why the parties failed to submit the report as required, see Minute Order (Feb. 28, 2014), the “parties recommend[ed] that all other parties shall be joined and the pleadings amended by July 1, 2014,” JMCR ¶ 2. An order consistent with the parties’ recommendation was entered. See Minute Order (Mar. 7, 2014). On April 2, 2014, the parties filed a Supplemental Joint Meet and Confer Report, ECF No. 20, recommending the same July 1, 2014 deadline for amendments to pleadings, id. ¶ 2, which deadline gave the parties a generous six months from the filing of the Complaint to amend their pleadings.
Despite this generous period of time for any amendments to pleadings, Eisenberg filed his Motion for Leave to File Counterclaim Against the United States of America, ECF No. 62, on November 13, 2014, over a year after the Complaint was filed, eleven months after he had filed his Answer, and approximately five months after the deadline (of July 1, 2014) to submit amended pleadings had passed. Eisenberg then filed his Motion to Amend Answer, ECF No. 86, on March 29, 2015, over one and a half years after the Complaint was filed, fifteen months after he had filed his Answer, and approximately nine months after the deadline (of July 1, 2014) to submit amended pleadings had passed.
At the outset,
Eisenberg offers absolutely no explanation, and the Court cannot infer any, for his delay in filing his proposed counterclaims. With respect to the proposed amendments to his Answer, Eisenberg posits that he learned the information related to the proposed affirmative defenses of estoppel and selective prosecution only after he filed his Answer, Def.‘s Mem. Supp. Opposed Mot. Amend Answer (“Def.‘s Mem. Answer“) at 6-7, ECF No. 86-1; Def.‘s Reply at 3, but his justification makes little sense. Eisenberg‘s estoppel defense arises almost entirely from DOL‘s alleged failure to follow its own internal procedures before the United States filed the present suit. See Def.‘s Reply at 7-9. Likewise, the selective prosecution defense arises from the prosecution of the present suit, see Def.‘s Proposed Answer ¶ 22, which plainly occurred before Eisenberg filed his Answer.
Eisenberg also attempts to justify the delay by indicating that during his settlement discussions with the government, which occurred in April and May, 2014, he “became more enlightened as to the possible discriminatory motives of the Parties,” Def.‘s Mem. Answer at 4 (emphasis added); see also Def.‘s Reply at 3 (asserting that “it was not until this mediation process that [Eisenberg] became aware of the possible discriminatory motives of the other parties“). Yet, even if this were true, he offers no explanation for why he waited another six months, until November 2014, to seek leave to amend his answer. Delay alone would warrant denial of Eisenberg‘s motions to amend his answer and to assert counterclaims.
3. Futility of Amendments
Regardless of the delay, the defendant‘s proposed amendments to his pleadings would be futile.13
a. Selective Prosecution/Per Se Discrimination
Eisenberg seeks to add selective prosecution as an affirmative defense in his Answer, see Def.‘s Proposed Answer ¶ 22, and as a counterclaim, see Def.‘s Proposed Counterclaim ¶¶ 21-28, and to add per se discrimination as a counterclaim, see id. ¶¶ 29-35. The defendant‘s proposed coun-terclaims
The standard to prove a selective prosecution claim “is a demanding one,” United States v. Armstrong, 517 U.S. 456, 463 (1996), as government prosecutors have “broad discretion” for their prosecution decisions, id. at 464 (quoting Wayte v. United States, 470 U.S. 598, 607 (1985)). The Supreme Court has explained:
This broad discretion rests largely on the recognition that the decision to prosecute is particularly ill-suited to judicial review. Such factors as the strength of the case, the prosecution‘s general deterrence value, the Government‘s enforcement priorities, and the case‘s relationship to the Government‘s overall enforcement plan are not readily susceptible to the kind of analysis the courts are competent to undertake.
Wayte, 470 U.S. at 607. To prove selective prosecution, a claimant must show that (1) the prosecution “had a discriminatory effect,” and (2) “that it was motivated by a discriminatory purpose.” Id. at 608; see Armstrong, 517 U.S. at 465. “To establish a discriminatory effect ..., the claimant must show that similarly situated individuals of a different [protected class] ... were not prosecuted.” Armstrong, 517 U.S. at 465; see Fog Cutter Capital Grp. Inc. v. SEC, 474 F.3d 822, 826 (D.C.Cir.2007) (“To prove selective prosecution, a claimant must be part of a protected class ... and show not only that prosecutors acted with bad intent, but also that ‘similarly situated individuals [outside the protected category] were not prosecuted.‘” (alteration in original) (quoting Armstrong, 517 U.S. at 465)); United States v. Blackley, 986 F.Supp. 616, 617-18 (D.D.C.1997) (“[C]harges may be dismissed on the basis of selective prosecution if a defendant is (1) singled out for prosecution from among others similarly situated and (2) the prosecution is improperly motivated, i.e. based on an arbitrary classification.“).
Eisenberg fails to state a claim for selective prosecution because he does not allege sufficient facts to show he was similarly situated to an individual who was not prosecuted. Eisenberg compares himself to Thompson, his former client, asserting that the government selectively prosecuted him instead of Thompson, despite the fact that both of them are subject to liability under
Eisenberg argues that the law is not so stringent as to require that he show he is similarly situated “in every relevant aspect to a comparator who was treated differently,” and urges the Court to apply a less “demanding” standard and “common-sense inquiry.” Def.‘s Reply at 4-5. Common-sense, however, suggests that Eisenberg cannot prevail. Eisenberg has not alleged, nor has he provided any indication that he could allege, that the United States declined to pursue any other attorney, as opposed to beneficiary, under a similar obligation to repay the United States after a FECA beneficiary‘s recovery from a third party under
Moreover, and perhaps more significantly, Eisenberg can show no harm or damage whatsoever from the United States’ decision to prosecute him and not Thompson. Eisenberg recognizes that he and Thompson are “each parties that could be recovered from under the statute,” Def.‘s Reply at 6, and, thus, that he and Thompson are jointly and severally liable to the United States. He therefore could, and did, join Thompson in the suit. Had the reverse occurred—had the United States decided to prosecute only Thompson, Thompson could have, and likely would have, joined Eisenberg. Since Eisenberg would be potentially liable for the United States’ funds regardless of whether the United States sued Thompson, he cannot, as a matter of law, have been harmed by the United States’ alleged “selective prosecution” of him. Accord Green, 775 F.2d at 970 n. 6 (“[A] party found jointly and severally liable ... ‘cannot compel the plaintiff [the government] to make others parties to the action, or complain because they have not been joined.‘” (alteration in original) (quoting W.P. KEETON, PROSSER AND KEETON ON THE LAW OF TORTS § 47, at 327 (5th ed. 1984))).
Eisenberg‘s attempt to distinguish Green, see Def.‘s Mem. at 24-25, which he asserts is “simply wrong,” id. at 24, is unavailing. Eisenberg argues that Green “fails to follow Congressional intent” because, in enacting
b. Denial of Due Process and Notice (“Accardi Claim“) and Estoppel
Eisenberg seeks to bring a counterclaim for denial of due process and notice based on allegations that DOL failed to comply with its internal procedures and guidelines, see Def.‘s Proposed Counterclaim ¶¶ 36-42, and seeks to add the affirmative defense of estoppel on the same grounds, alleging that DOL‘s failure to follow its internal procedures and guidelines bars the government from recovering any money from him, see Def.‘s Proposed Answer ¶ 21; see also Def.‘s Proposed Counterclaim at 19 ¶ m (“Failure to provide the required due process not only violates Defendant‘s rights but also bars the Government from any form of recovery from Defendant.“); Def.‘s Reply at 7-10 (arguing the government “did not comply” with the “extensive list of processes and procedures that are to be followed when an OWCP claim is to be reimbursed by a third party lawsuit“). Eisenberg‘s claims are meritless.
Eisenberg‘s proposed counterclaim is purportedly an “Accardi claim.” The Supreme Court‘s decision in United States ex rel. Accardi v. Shaughnessy, 347 U.S. 260, 74 S.Ct. 499, 98 L.Ed. 681 (1954) (”Accardi“), “has come to stand for the proposition that agencies may not violate their own rules and regulations to the prejudice of others.” Battle v. FAA, 393 F.3d 1330, 1336 (D.C.Cir.2005). Citing to various provisions of an internal DOL procedure manual, see U.S. DEP‘T OF LABOR, DIV. OF FED. EMP. COMP. PROCEDURAL MANUAL ch. 2-1100 (Mar. 2006) (“FECA Third Party Subrogation Guidelines“),14 Eisenberg makes numerous allegations that the United States “failed to follow its own rules of process,” Def.‘s Proposed Counterclaim at 9, ¶ 38. Eisenberg‘s allegations, see id. at 8-21, ¶ 38, can be grouped as follows: (1) the government‘s failure to communicate with and assist Eisenberg “prior to and during the third-party suit,” id. at 9; see also id. at 13-14, 16-17; Def.‘s Reply at 7-8, including by failing to use various prescribed “templates in its communications,” Def.‘s Proposed Counterclaim at 10-11; (2) the government‘s failure to follow internal procedures with respect to processing the SOR and pursuing the collection of the debt after the third-party suit, see generally id. at 12-15, 18-19; and (3) the government‘s failure to advise the defendant of his “rights and responsibilities,” id. at 20.
“It has long been settled that a federal agency must adhere firmly to self-adopted rules by which the interests of others are to be regulated.” Mass. Fair Share v. Law Enf‘t Assistance Admin., 758 F.2d 708, 711 (D.C.Cir.1985) (emphasis added); see also Morton v. Ruiz, 415 U.S. 199, 235 (1974) (“Where the rights of individuals are affected, it is incumbent upon agencies to follow their own procedures.” (emphasis added)). Where, however, “[t]he rules were not intended primarily to confer important procedural benefits upon individuals in the face of otherwise unfettered discretion,” and where a case does not involve an agency failing to exercise required independent discretion, the agency may “relax or modify its procedural rules adopted for the orderly transaction of business before it when in a given case the ends of justice require it[;]” and, such an agency action “is not reviewable except upon a showing of substantial prejudice to the complaining party.” Am. Farm Lines v. Black Ball Freight Serv., 397 U.S. 532, 538, 539 (1970) (internal quotation marks omitted).
Here, none of the guidelines about which Eisenberg complains affect the rights of individuals or were intended to protect individuals from agency discretion. Instead, the procedures and guidelines that he cites involve the government‘s processes and procedures for pursuing and collecting claims from third parties for benefits disbursed to beneficiaries under FECA. These are procedural rules intended to benefit the government, so that it may be reimbursed for claims it has paid. See FECA Third Party Subrogation Guidelines, ch. 2-1100.1 (“Purpose and Scope. This subchapter outlines the procedures for administering the government‘s rights under §§ 8131 and 8132 of the FECA to require FECA claimants to seek damages from third parties potentially liable for damages as a result of the FECA-covered injuries, and to refund a portion of any money or other property recovered.” (emphasis added)); see also Lorenzetti, 467 U.S. at 176 (explaining that
Eisenberg cannot show such substantial, if any, prejudice. First, Eisenberg can show no harm at all from any failure on the part of the United States to communicate with or assist him in prosecuting Thompson‘s third party suit because that third party suit ultimately ended in a substantial settlement recovery for Thompson and, consequently, substantial attorney‘s fees for Eisenberg. Thus, any allegations relating to the government‘s actions before or during the third party suit are unreviewable.
The defense of estoppel is also unavailable with respect to these allegations. See Gonzalez, 609 F.3d at 459 (rejecting FECA beneficiaries’ estoppel defense in
Second, Eisenberg can show no substantial harm from any failure on the part of the United States to adhere to certain internal, discretionary debt collection procedures. Eisenberg specifically complains that “the Agency misrepresented to the Parties that they only had one [] year,” as opposed to three years, to repay the United States after the third party suit ended. Def.‘s Proposed Counterclaim at 18, ¶ (g) (citing FECA Third Party Subrogation Guidelines, ch. 2-1100.11b(3)(a)). Indeed, internal procedures appear to permit DOL-SOL to collect debt through periodic payments within three years, see FECA Third Party Subrogation Guidelines, ch. 2-1100.11.b(3)(a), but the agency is not required to allow three years in every given circumstance. Thus, Eisenberg cannot show that he would be any better off had the government represented to him that it could provide three years for repayment, since nothing mandates that DOL-SOL, in fact, provide three years. As Eisenberg acknowledges, the parties have had ample time to mediate this dispute and have failed to reach a settlement. See Def.‘s Material Facts (“Def.‘s Answer Mot. SMF“) at ¶¶ 5, 8, ECF No. 86-2; Answer ¶ 14 (recognizing that attempts have been made in the last five years to settle this matter); Def.‘s Proposed Answer ¶ 14 (same). DOL was not required, under its internal guidelines or otherwise, to enter a three-year payment plan to recover funds it is owed.
Third, Eisenberg cannot show substantial, if any, prejudice from any purported failure on the part of the United States to advise him of his “rights and responsibilities” as specifically prescribed in the FECA Third Party Subrogation Guidelines. The record is replete with formal letters from DOL-SOL to Eisenberg advising him of his rights and responsibilities over an extensive period of time. See generally July 19, 2011 Letter; October 4, 2011 Letter; November 17, 2011 Letter; December 19, 2011; July 31, 2012 Letter; December 14, 2012 Letter. Moreover, Eisenberg is himself an attorney and personally met with the Deputy Associate Solicitor and counsel for DOL-SOL to discuss this matter. See July 31, 2012 Letter. Eisenberg was clearly apprised of his rights and responsibilities with respect to the United States’ right of recovery of FECA claims. See also Heckler v. Cmty. Health Servs. of Crawford Cty., Inc., 467 U.S. 51, 61-62, 104 S.Ct. 2218, 81 L.Ed.2d 42 (1984) (holding, where the respondent‘s “detriment [was] the inability to retain money that it should never have received in the first place,” the “respondent lost no rights but merely was induced to do something which could be corrected at a later time“).15
Eisenberg asserts that the government‘s “failure to properly participate in the FECA Third Party Subrogation Process,” Def.‘s Reply at 8, and, essentially, “assist[] [him] with reimbursement calculations,” id. at 9 n. 12, “confused” him and Thompson, id. at 8. He further asserts that, “[b]ased on the Government action (or inaction),” he “changed his position and attempted the calculations himself (even though Government‘s lack of action gave the appearance it was not even necessary),” and “[t]his was a reasonable determination.” Id. This argument is entirely unpersuasive, particularly in light of “the general rule that those who deal with the Government are expected to know the law and may not rely on the conduct of Government agents contrary to law.” Heckler, 467 U.S. at 63.
Eisenberg cannot show any of the elements required to assert estoppel against the government. First, he acknowledges that he did not contact the government regarding the amount due to the United States before completing the SOR but, instead, obtained this information through Thompson. See Def.‘s SMF ¶ 15 (asserting that Eisenberg requested, through Thompson “a confirmation what, if any funds, were due“); Answer ¶ 18(b)–(c); Def.‘s Proposed Answer ¶ 18(b)–(c); October 8, 2010 Letter; October 14, 2010 Email. Thus, Eisenberg cannot show any representation made to him regarding the proper reimbursement calculation, let alone a “definite representation,” before he disbursed the settlement proceeds. See United States v. Honeywell Int‘l, Inc., 841 F.Supp.2d 112, 115 (D.D.C.2012) (finding False Claims Act defendant “ha[d] not pointed to any definite representation by the government” to support its estoppel defense where the defendant had alleged “only a failure of the government to accept [the defendant]‘s offer of test results“). Second, since no representation was ever made to Eisenberg directly, he could not have relied on such a representation. Third, any reliance of Eisenberg‘s on Thompson‘s representation to him of the government‘s representation to
Fourth, the defendant does not sufficiently allege any affirmative misconduct on the part of the United States. His allegations that the government “show[ed] extreme disregard for Mr. Thompson‘s claim” by “repeatedly fail[ing] to ... assist with the third-party litigation,” Def.‘s Reply at 8, are of no import because, as discussed above, the defense of estoppel is unavailable with respect to these claims. Moreover, the United States’ failure to act is not “affirmative misconduct.” See Morris Commc‘ns, 566 F.3d at 192 (holding that the agency‘s “three-year silence,” though “egregious,” “does not constitute ‘affirmative misconduct‘“); Green, 775 F.2d at 970 (holding that “the government‘s delay in providing a breakdown of [the beneficiary‘s] FECA benefits” did not “support a claim of estoppel” because “[a]lthough this delay may constitute negligence by the government, it does not rise to the level of ‘affirmative misconduct’ required” for an estoppel defense).
In sum, the statutes and regulations governing the United States’ right of reimbursement under the FECA should have and did put Eisenberg on ample notice of the fact that he should not disburse the settlement funds without first correctly calculating the amount due to the United States and obtaining approval of the SOR. Cf. Heckler, 467 U.S. at 65-66.16
c. Civil Conspiracy
Lastly, the defendant cannot state a counterclaim for civil conspiracy. The law is widely accepted that a plaintiff [may] bring suit for civil conspiracy only if he ha[s] been injured by an act that was itself tortious.” Beck v. Prupis, 529 U.S. 494, 501 (2000) (citing 4 RESTATEMENT (SECOND) OF TORTS § 876, Comment b (1977) (“The mere common plan, design or even express agreement is not enough for liability in itself, and there must be acts of a tortious character in carrying it into execution.“); W. PROSSER, LAW OF TORTS § 46, at 293 (4th ed. 1971) (“It is only where means are employed, or purposes are accomplished, which are themselves tortious, that the conspirators who have not acted but have promoted the act will be held liable.“)). Thus, a civil conspiracy claim requires the “performance of some underlying tortious act.” Exec. Sandwich Shoppe, Inc. v. Carr Realty Corp., 749 A.2d 724, 738 (D.C.2000) (quoting Halberstam v. Welch, 705 F.2d 472, 479 (D.C.Cir.1983)). “Consistent with this principle,” the Supreme Court observed that “a conspiracy claim was not an independent cause of action, but was only the mechanism for subjecting co-conspirators to liability when one of their member committed a tortious act.” Beck, 529 U.S. at 503; see also Nader v. Democratic Nat‘l Comm., 567 F.3d 692, 697 (D.C.Cir.2009) (“[C]ivil conspiracy is not an independent tort but only a means for establishing vicarious liability for an underlying tort.” (quoting Hill v. Medlantic Health Care Grp., 933 A.2d 314, 334 (D.C.2007))); Halberstam, 705 F.2d at 479 (stating that civil conspiracy requires “an overt tortious act in furtherance of the agreement that causes injury” and, “[s]ince liability for civil conspiracy depends on performance of some underlying tortious act, the conspiracy is not independently actionable; rather, it is a means for establishing vicarious liability for the underlying tort“).
Consequently, to establish a civil conspiracy claim, a plaintiff must adequately show an underlying tort and the following elements: “(1) an agreement between two or more persons; (2) to participate in an unlawful act, or a lawful act in an unlawful manner; (3) an injury caused by an unlawful overt act performed by one of the parties to the agreement; (4) which overt act was done pursuant to and in furtherance of the common scheme.” Halberstam, 705 F.2d at 477.
In light of the fact that Eisenberg cannot make out any of the other claims he alleges, he cannot make out a claim for a civil conspiracy. See Exec. Sandwich Shoppe, Inc., 749 A.2d at 738 (finding that a “civil conspiracy claim premised on” a rejected “tort theory fails as a matter of law for lack of an underlying tortious act“). Thus, allowing him to amend his pleadings to add a civil conspiracy counterclaim would be futile.
C. United States’ Dispositive Motion
The United States seeks (1) “partial judgment on the pleadings,” pursuant to
After setting out the applicable legal standards, each of the United States’ requests are addressed, seriatim.
1. Legal Standards
Without triggering the conversion rule, a court may consider “only the facts alleged in the complaint, any documents either attached to or incorporated in the complaint and matters of which [the court] may take judicial notice.” Mpoy v. Rhee, 758 F.3d 285, 291 n. 1 (D.C.Cir.2014) (quoting EEOC v. St. Francis Xavier Parochial Sch., 117 F.3d 621, 624 (D.C.Cir.1997)). “Because a
If, on a motion under
Despite Eisenberg‘s repeated assertions that the United States may not be owed any money at all, see supra note 3, it is undisputed that Thompson received FECA benefits from the United States and that Thompson received a settlement award from a third-party.17 The United States is, therefore, indeed, owed money under
Additionally,
Indeed, Eisenberg admits, as asserted in the Complaint, that ”
While Eisenberg, generally, denies “that [he] failed to reimburse the United States in satisfaction of its interest, either before or after the distribution of proceeds to Mr. Thompson,” Answer ¶ 14, he does not directly dispute the United States’ assertion that, “[u]pon receiving the $675,000 from the settlement, Mr. Eisenberg distributed the proceeds to Mr. Thompson, and upon information and belief, paid himself an attorney‘s fee,” Compl. ¶ 14; Answer ¶ 14. In an answer to a complaint, “[a] denial must fairly respond to the substance of the allegation,”
Accordingly, based on the pleadings, it is undisputed that Eisenberg is liable to the United States for whatever amount of money the government is owed under the FECA, and the United States is entitled to judgment as a matter of law on the issue of Eisenberg‘s liability.
In opposition to the United States’ motion, aside from those arguments which the Court has already rejected, Eisenberg argues that “[n]othing in
Moreover, Eisenberg set aside a particular amount, calculated based on total OWCP disbursements to Thompson of $70,533.93, see June 9, 2011 Letter, even though this amount conflicted not only with evidence in the record of the third-party lawsuit, see Wackenhut, Rios Decl. ¶ 5 (attesting to disbursement amounts of $94,261.33 in disability compensation and $29,261.33 for medical treatments as of June 6, 2009), but also written evidence provided to him by Thompson, see October 14, 2010 Email (forwarding copy of October 8, 2010 letter and attached payment history report); October 8, 2010 Letter (attached history report showing a total disbursement amount of $94,261.33 as of June 6, 2009).19
Eisenberg‘s additional arguments in opposition to the United States’ motion are also unavailing. Eisenberg argues that, because he disbursed the settlement proceeds to Thompson, collecting money now from Eisenberg amounts to (1) “an unconstitutional tax for representing” Thompson in the third party lawsuit, (2) “a taking of personal property without compensation,” and (3) “a taking of his liberty by enslaving Mr. Eisenberg to work for the Government to prosecute the matter.” Def.‘s Mem. at 25-26. The money in question belongs to the United States and Eisenberg had a duty to preserve funds from the settlement to satisfy the United States’ ownership interest. Therefore, the fact that Eisenberg is liable for the money is in no way “fundamentally inequitable, unjust and unfair,” Def‘s Mem. at 4, even though Eisenberg avers that he no longer possesses the money.
3. Summary Judgment as to Calculation of Refund
For the foregoing reasons, the United States is also entitled to judgment as a matter of law on the manner in which the amount owed is calculated.
The specific amount owed, however, is disputed. While DOL has stated in multiple letters that OWCP paid $128,393.53 in compensation to Thompson, see, e.g., July 19, 2011 Letter; August 16, 2011 Letter; October 4, 2011 Letter, a different amount was presented in the Wackenhut suit and earlier correspon-dence
Accordingly, the parties will be directed to confer and submit to the Court a proposed schedule for conducting the limited discovery necessary to resolve the issues remaining in the Complaint and the Third-Party Complaint.
III. CONCLUSION
For the foregoing reasons, Eisenberg‘s Motions for Leave to File Counterclaim Against the United States of America, ECF No. 62, and Opposed Motion to Amend Answer, ECF No. 86, are DENIED. The United States’ Motion for Partial Judgment on the Pleadings and for Partial Summary Judgment, ECF No. 26, is GRANTED IN PART and DENIED IN PART. Specifically, the government‘s motion is granted as to the issue of Eisenberg‘s liability under
An Order consistent with this Memorandum Opinion will be contemporaneously issued.
Signed December 15, 2015