Loumiet v. United States of America

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
CARLOS LOUMIET,
Plaintiff,
v. Civil Action No. 12-1130 (CKK)
UNITED STATES OF AMERICA, et al,
Defendants.
MEMORANDUM OPINION
(August 21, 2014)
Plaintiff Carlos Loumiet brought 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”) alleging malicious prosecution, abuse of process, intentional
infliction of emotional distress, invasion of privacy, negligent supervision, and conspiracy.
Plaintiff also filed suit against Defendants Michael Rardin, Lee Straus, Gerard Sexton, and
Ronald Schneck (collectively “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. On January 18, 2013, the United States filed a [10] Motion to Dismiss for
Lack of Jurisdiction and the Individual Defendants filed a [11] Motion to Dismiss Plaintiff’s
Bivens claims. The Court granted the Individual Defendants’ Motion to Dismiss as to Plaintiff’s
Bivens and tort claims. The Court also granted the United States’ Motion to Dismiss as to
Plaintiff’s claims for malicious prosecution and abuse of process under the FTCA, but denied the
United States’ Motion to Dismiss as to Plaintiff’s FTCA claims alleging intentional infliction of
1
emotional distress, invasion of privacy, negligent supervision, and conspiracy to the extent they
are premised on statements made by OCC officials to the press. Presently before the Court are
the United States’ (“Defendant”) [26] Motion for Reconsideration and Plaintiff’s [27] Motion for
Reconsideration or, in the alternative, Motion Requesting the Court to Enter a Final Judgment.
Upon consideration of the pleadings,1 the relevant legal authorities, and the record as a whole the
Court shall DENY Plaintiff’s Motion for Reconsideration and GRANT IN PART and DENY IN
PART Defendant’s Motion for Reconsideration for the reasons that follow.
I. BACKGROUND
A. Factual Background
In March 2001, after becoming troubled by the manner in which the OCC conducted an
investigation of Hamilton Bank, N.A., Plaintiff wrote to Treasury Inspector General Jeffrey Rush
and other Treasury Department officials, expressing concerns about the OCC’s enforcement
action against the bank. Compl. ¶ 49. In April 2001, Plaintiff sent the Treasury Secretary and the
Office of Inspector General (“OIG”) a second letter, again expressing concerns regarding the
OCC’s regulatory actions. Id. ¶ 50. On July 18, 2001, the Treasury Inspector General notified
Plaintiff that the OIG had “considered the information and argument [Plaintiff] presented, and . .
. concluded that it did not provide a basis for the Office of Inspector General to consider further
investigation . . . .” Def.’s Mot. to Dismiss, ECF No. [10], Ex. 3 (Letter from Jeffrey Rush, Jr.,
Inspector General). On December 14, 2001, Plaintiff filed a lawsuit against the OCC in the
Southern District of Florida, alleging that the OCC’s supervisory actions were motivated by anti-
1
Defendant’s Motion for Reconsideration (“Def.’s Mot.”), ECF No. [26]; Plaintiff’s
Motion for Reconsideration (Pl.’s Mot.”), ECF No. [27]; Defendant’s Opposition to Plaintiff’s
Motion for Reconsideration (“Def.’s Opp’n.”), ECF No. [34]; Plaintiff’s Opposition to
Defendant’s Motion for Reconsideration (“Pl.’s Opp’n.”), ECF No. [38]; Defendant’s Reply to
Plaintiff’s Opposition (“Def.’s Reply”), ECF No. [40]; Plaintiff’s Reply to Defendant’s
Opposition (Pl.’s Reply), ECF No. [41].
2
Hispanic bias. See Hamilton Bank, N.A. v. OCC, Case No. 01-cv-4994 (S.D. Fla.). This case
was voluntarily dismissed in 2002.
On November 6, 2006, the OCC initiated an enforcement proceeding against Plaintiff,
pursuant to the Financial Institutions Reform, Recovery, and Enforcement Act (“FIRREA”) of
1989, Pub. L. No. 101-73, 102 Stat. 183 (codified in scattered sections of Title 12 of the U.S.
Code). Compl. ¶ 16; Loumiet v. Office of the Comptroller of the Currency, 650 F. 3d 796, 799
(D.C. Cir. 2011). The action, brought by the OCC’s Enforcement and Compliance Division,
alleged that Plaintiff was an “institution-affiliated party” (“IAP”) who, as part of his role in the
independent investigation of Hamilton, had “knowingly or recklessly . . . breach[ed his] fiduciary
duty,” and as a result “caused . . . a significant adverse effect” on the Bank. Loumiet, 650 F. 3d
at 799. Plaintiff claims that this prosecution as well as the surrounding actions made by OCC
officials during the prosecution were made in retaliation for his letters expressing concern over
bias within the OCC. Compl. ¶ 15. During the three-week bench trial, Plaintiff alleges that the
Individual Defendants aggressively pressed unsubstantiated charges and made false statements to
the press covering the proceeding, both of which caused substantial damage to his reputation and
career. Id. Ultimately, on June 18, 2008, an Administrative Law Judge (“ALJ”) recommended
complete dismissal of the Division’s claims. Id. ¶ 16. On July 27, 2009, the Comptroller,
reviewing the ALJ’s recommendation, agreed dismissal of all claims against Loumiet was
appropriate, but on different grounds from the ALJ. Id.
B. Procedural History
On July 9, 2012, Plaintiff filed suit against the United States Government for the actions
of its agency, the OCC, under the Federal Tort Claims Act alleging malicious prosecution, abuse
of process, intentional infliction of emotional distress, invasion of privacy, negligent supervision,
3
and conspiracy. Plaintiff also filed suit against Defendants Michael Rardin, Lee Straus, Gerad
Sexton, and Ronald Schneck (collectively “Individual Defendants”), alleging First and Fifth
Amendment 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. The Individual Defendants filed a
Motion to Dismiss Plaintiff’s Bivens claims and the United States filed a Motion to Dismiss
Pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). In ruling on Defendants’
motions, the Court dismissed Plaintiff’s Bivens claims against the Individual Defendants as
untimely and his tort claims against the Individual Defendants as precluded by the Westfall Act.
With respect to Plaintiff’s claims for malicious prosecution and abuse of process against the
United States Government under the FTCA, the Court dismissed these claims pursuant to the
discretionary function exception. However, the Court allowed Plaintiff’s FTCA claims alleging
intentional infliction of emotional distress, invasion of privacy, negligent supervision, and
conspiracy to proceed “to the extent they are premised on statements made by OCC officials to
the press.” Mem. Op. (Sept. 12, 2013), at 2.
II. LEGAL STANDARD
Federal Rule of Civil Procedure 54(b)2 provides that “any order . . . that adjudicates
fewer than all the claims or the rights and liabilities of fewer than all the parties . . . may be
revised at any time before the entry of a judgment adjudicating all the claims and all the parties’
rights and liabilities.” A motion to reconsider brought under Rule 54(b) may be granted “as
justice requires.” Singh v. George Wash. Univ., 383 F.Supp.2d 99, 101 (D.D.C. 2005) (quoting
Cobell v. Norton, 224 F.R.D. 266, 272 (D.D.C. 2004)). Considerations a court may take into
2
Although Defendant moves the Court to reconsider its decision under Federal Rule of
Civil Procedure 59(e), Rule 59(e) is not the appropriate Rule to move for reconsideration
because the Court’s opinion did not adjudicate all the claims as to all the parties and thus was not
a final judgment.
4
account under this standard include whether the court “patently” misunderstood a party, made a
decision beyond the adversarial issues presented to the court, made an error in failing to consider
controlling decisions or data, or whether a controlling or significant change in the law or facts
has occurred since the submission of the issue to the Court. See id. (quoting Cobell, 224 F.R.D.
at 272). In this Circuit, it is well-established that “motions for reconsideration,” whatever their
procedural basis, cannot be used as “an opportunity to reargue facts and theories upon which a
court has already ruled, nor as a vehicle for presenting theories or arguments that could have
been advanced earlier.” Estate of Gaither ex rel. Gaither v. District of Columbia, 771 F. Supp.
2d 5, 10, n. 4 (D.D.C. 2011) (quoting Secs. & Exch. Comm’n v. Bilzerian, 729 F.Supp.2d 9, 14
(D.D.C. 2010)). The party moving the court to reconsider its decision carries the burden of
proving that some harm would accompany a denial of the motion to reconsider: “In order for
justice to require reconsideration, logically, it must be the case that, some sort of ‘injustice’ will
result if reconsideration is refused. That is, the movant must demonstrate that some harm, legal
or at least tangible, would flow from a denial of reconsideration.” Cobell v. Norton, 355
F.Supp.2d 531, 540 (D.D.C. 2005). Finally, “even if the appropriate legal standard does not
indicate that reconsideration is warranted, the Court may nevertheless elect to grant a motion for
reconsideration if there are other good reasons for doing so.” Id.III. DISCUSSION
A. Plaintiff’s Bivens Claims
In his Motion for Reconsideration, Plaintiff first argues that the Court should not have
dismissed his Bivens claims as untimely because they were timely under the continuing-tort
theory that the Court applied to Plaintiff’s FTCA claims, but declined to apply to Plaintiff’s
Bivens claims. However, the Court declined to apply this theory to Plaintiff’s Bivens claims
because Plaintiff did not raise the continuing-tort theory with respect to his Bivens claims. See
5
Mem. Op. at 15 n. 3; see also David v. District of Columbia, 436 F.Supp.2d 83, 90 n. 2 (D.D.C.
2006) (holding that arguments not raised in the defendant’s original motion are deemed waived
and will not be considered); Oak Ridge Care Center, Inc. v. Racine County, Wis., 896 F.Supp.
867, 876 (E.D. Wis. 1995) (holding that “courts will not make arguments for the litigants”)
(citing Gold v. Wolpert, 876 F.2d 1327, 1333 (7th Cir. 1989) (refusing to entertain “asserted but
unanalyzed and underdeveloped claims”). Plaintiff clearly could have made this argument at the
time the parties briefed Defendants’ motions to dismiss. Indeed, Plaintiff asserted several other
arguments against Defendants’ contention that Plaintiff’s Bivens claims did not comply with the
statute of limitations. Plaintiff also made the argument that the continuing-tort theory excused
his failure to comply with the statute of limitations in the FTCA context and thus Plaintiff was
clearly aware of the availability of the continuing-tort doctrine. It is well-established law that
motions to reconsider may not be used to raise arguments that could have been raised prior to the
court’s ruling on the underlying motion. Gaither, 771 F.Supp.2d at 10 (noting, in response to a
Rule 54(b) motion for reconsideration, that motions for reconsideration cannot be used as “a
vehicle for presenting theories or arguments that could have been advanced earlier.” (internal
citation omitted)). Plaintiff’s contention that this argument was not available at the time he filed
his briefs since the Court’s Order applying the continuing-tort theory to the FTCA’s statute of
limitations constituted an intervening change in controlling law is disingenuous. The Court was
not making new law in its Memorandum Opinion, but applying established D.C. Circuit
continuing-tort doctrine. See Whelan v. Abell, 953 F.2d 663, 673-74 (D.C. Cir. 1992) (citing
Page v. United States, 729 F.2d 818, 821-22 (D.C. Cir. 1984)). Accordingly, the Court will not
entertain Plaintiff’s argument that his Bivens claims are not untimely pursuant to the continuing-
tort theory.
6
B. Discretionary Function Exception
Plaintiff next takes issue with the Court’s dismissal, pursuant to the discretionary
function exception, of Plaintiff’s FTCA claims related to Defendant’s decision to prosecute
Plaintiff. Specifically, the Court held that to the extent Plaintiff’s FTCA claims are premised on
Defendant’s allegedly retaliatory prosecution of Plaintiff, these claims must be dismissed
because the FTCA’s waiver of sovereign immunity does not apply to governmental acts that are
discretionary in nature, such as “prosecutorial decisions as to whether, when, and against whom
to initiate prosecutions.” Mem. Op. (Sept. 12, 2013), at 22 (quoting Gray v. Bell, 712 F.2d 490,
513 (D.C. Cir. 1983)). In his Motion for Reconsideration, Plaintiff argues that retaliatory
prosecution is not protected by the discretionary function exception because such prosecutions
violate the Constitution. However, the law in this Circuit is clear that “the discretionary function
exception immunizes even government abuses of discretion.” Shuler v. United States, 531 F.3d
930, 935 (D.C. Cir. 2008) (emphasis added).
Indeed, courts in this Circuit have explicitly held that even “constitutionally defective”
actions, if closely intertwined with the decision to prosecute, are in fact protected by the
discretionary function exception. For example, in Tabman v. F.B.I., a former FBI special agent
brought an action against the FBI seeking damages for intentional infliction of emotional distress
and for alleged violations of his constitutional rights in connection with an investigation the FBI
conducted of him. 718 F.Supp.2d 98, 99-100 (D.D.C. 2010). Judge Paul L. Friedman held that
“where the investigator’s conduct during an investigation is ‘inextricably tied’ to the overall
discretionary decision to investigate and then prosecute a plaintiff, such actions are included
within the discretionary function exception to the FTCA jurisdiction.” Id. at 105. This
conclusion, Judge Friedman held, “is true ‘even if there was an improper, tortious, and
7
constitutionally defective manner in which the investigation was carried [out].’” Id. (quoting
Gray, 712 F.2d at 515-16). Similarly, in Gray v. Bell, the Court of Appeals for the D.C. Circuit
held that the “improper, tortious, and constitutionally defective” actions allegedly undertaken by
the defendants were “too intertwined with purely discretionary decisions of the prosecutors to be
sufficiently separated from the initial decision to prosecute,” and thus the discretionary function
exception applied. 712 F.2d at 515-16 (emphasis added). Likewise, here, although the reasons
behind Defendant’s decision to prosecute are allegedly unconstitutional, such reasoning cannot
be separated from the initial decision to prosecute. Accordingly, the Court again holds that
Plaintiff’s claims related to Defendants’ allegedly retaliatory prosecution fall within the
discretionary function exception.
C. Subject Matter Jurisdiction over Defamation Claims under FTCA
Finally, Defendant, in its Motion for Reconsideration, argues that the Court erred in
allowing Plaintiff’s claims for intentional infliction of emotional distress, invasion of privacy,
negligent supervision, and conspiracy to proceed to the extent they are premised on harm
suffered from OCC officials’ statements to the press. Defendant correctly notes that, under the
FTCA, the United States retains immunity with respect to all claims “arising out of” defamation
thus depriving a court of subject matter jurisdiction over such claims. Def.’s Mot. at 3 (citing 28
U.S.C. § 2680(h) (the FTCA’s waiver of immunity shall not apply to “any claim arising out of . .
. libel [or] slander”). Defendant contends that Plaintiff’s claims, even if they are not styled as
defamation claims, are not actionable under the FTCA, because they allege injury whose root
cause was the dissemination of defamatory information. Id. at 4. Defendant argues that since
the only claims remaining before this Court, per the Court’s Memorandum Opinion, are
Plaintiff’s FTCA claims “predicated on harm suffered from alleged defamatory statements made
8
by OCC officials to the media,” these claims must be dismissed pursuant to 28 U.S.C. § 2680(h).
Id. at 5.
The Court did not have the occasion to evaluate this argument in the parties’ original
briefing because Defendant did not make the argument. Plaintiff contends that Defendant
waived this argument by failing to make it earlier; however, since this argument implicates the
Court’s subject matter jurisdiction over these claims, such an argument can be raised at any
time.3 See Fed. R. Civ. P. 12(h)(3) (“if the court determines at any time that it lacks subject-
matter jurisdiction, the court must dismiss the action”); Thomas v. Nicholson, 539 F.Supp.2d
205, 216 (D.D.C. 2008) (lack of subject matter jurisdiction “is a defense that can be raised at any
time prior to a final ruling on the merits”).
To be clear, the Court’s September 12, 2013, Memorandum Opinion held that “to the
extent [Plaintiff’s intentional infliction of emotional distress, invasion of privacy, negligent
supervision, and conspiracy claims] allege harm from the OCC officials’ statements to the
press”—as opposed to harm from the retaliatory prosecution alone—Plaintiff’s claims were not
dismissed. Mem. Op. (Sept. 12, 2013), at 26. As Plaintiff correctly notes in his Opposition to
Defendant’s Motion for Reconsideration, the Court did not expressly limit the remaining viable
claims to those based on “defamatory statements”—only those based on “statements” to the
press. Pl.’s Opp’n at 8. Plaintiff argues that “some of the statements [made to the press] may not
have been defamatory” and thus to the extent his claims are attributable to those statements,
these claims survive. Id. After a thorough review of Plaintiff’s Complaint, however, the Court
finds that all of Plaintiff’s allegations regarding statements made to the press allege defamation,
specifically, that Defendant provided false information to the press. Thus, to the extent
3
This argument is thus unlike the continuing-tort theory argument raised by Plaintiff in
his Motion for Reconsideration, which does not implicate the Court’s jurisdiction.
9
Plaintiff’s remaining claims allege injuries arising out of the statements Plaintiff alleges
Defendant made to the press, these claims arise out of allegedly defamatory statements and the
United States has not waived its sovereign immunity as to such claims.4
The Court does, however, agree with Plaintiff’s argument that Plaintiff’s invasion of
privacy claim remains actionable under the FTCA even to the extent it arises out of “the OCC
officials’ statements to the press.” Plaintiff clearly alleged in his Complaint that his invasion of
privacy claim was based on the dissemination of “private facts that would not otherwise have
become public” and not on the defamatory aspect of these facts. Compl. ¶ 118. Thus, the Court
finds that Plaintiff’s invasion of privacy claim does not “arise out of” defamation. In its Reply in
Support of its Motion for Reconsideration, Defendant argues that even if the defamation
exception did not bar Plaintiff’s invasion of privacy claim, this claim should be dismissed
because Plaintiff has failed to sufficiently plead a claim of invasion of privacy. However,
Defendant did not make this argument in its original briefing in support of its Motion to Dismiss.
Moreover, Defendant now only makes this argument in its Reply in Support of its Motion for
Reconsideration. “As a general matter, it is improper for a party to raise new arguments in a
reply brief because it deprives the opposing party of an opportunity to respond to them, and
4
Plaintiff also argues in his Opposition that his remaining FTCA claims do not “arise out
of” defamation because the “essence” of these claims is really Defendant’s “pattern” of “extreme
and outrageous conduct” which relates to the allegedly retaliatory prosecution. Pl.’s Opp’n. at 4.
The Court notes that it originally conducted a liberal reading of Plaintiff’s Complaint and
concluded that Plaintiff’s FTCA claims arose out of two events—the retaliatory prosecution and
the statements to the press. Now, Plaintiff argues that the statements to the press were nothing
more than “collateral” to his FTCA claims which are really based on the conduct directly relating
to the retaliatory prosecution. Id. Indeed, Plaintiff’s interpretation of the Complaint is supported
by the fact that only Plaintiff’s invasion of privacy count actually mentions the statements to the
press within the facts relevant to that count. Every other count only references the harm caused
by the allegedly retaliatory prosecution. Although Plaintiff puts forth this characterization of his
Complaint to show that his remaining FTCA claims do not arise out of defamation and thus are
actionable under the FTCA, Plaintiff’s characterization does no more than hurt his FTCA claims
because the Court has already found that, pursuant to the discretionary function exception, they
must be dismissed to the extent they are based on the allegedly retaliatory prosecution.
10
courts may disregard any such arguments.” Performance Contracting, Inc. v. Rapid Response
Const., Inc., 267 F.R.D. 422, 425 (D.D.C. 2010). The Court is not willing to entertain such an
untimely argument.
Accordingly, the Court GRANTS Defendant’s Motion for Reconsideration and
DISMISSES in their entirety Plaintiff’s intentional infliction of emotional distress, negligent
supervision, and conspiracy claims. The Court, however, DENIES Defendant’s Motion for
Reconsideration as to Plaintiff’s invasion of privacy claim to the extent that it arises out of the
public disclosure of private facts in the statements Plaintiff alleges Defendant made to the press
and not out of defamation.
D. Motion to Enter a Final Judgment
In the event the Court does not reconsider its decision to dismiss Plaintiff’s Bivens
claims, which it has not, Plaintiff requests that this Court enter a final judgment with respect to
the Individual Defendants. Pl.’s Mot. at 7. Under Federal Rule of Civil Procedure 54(b),
“[w]hen an action presents more than one claim for relief . . . , the court may direct entry of a
final judgment as to one or more, but fewer than all, claims . . . only if the court expressly
determines that there is no just reason for delay.” “Only ‘exceptional cases’ merit Rule 54(b)’s
direct entry, and the district court has discretion in identifying such cases because of its
‘familiar[ity] with the case and with any justifiable reasons for delay.’” Ben–Rafael v. Islamic
Republic of Iran, 718 F.Supp.2d 25, 33 (D.D.C. 2010) (quoting Bldg. Indus. Ass'n of Superior
Cal. v. Babbitt, 161 F.3d 740, 743 (D.C. Cir. 1998)). Ordinarily, the presumption against
piecemeal appeals will be sufficient to deny certification under Rule 54(b). See Curtiss–Wright
Corp. v. Gen. Elec. Co., 446 U.S. 1, 8 (1980) (“Not all final judgments on individual claims
should be immediately appealable, even if they are in some sense separable from the remaining
11
unresolved claims.”). There is sufficient factual and legal overlap between Plaintiff’s remaining
invasion of privacy claim and the claims the Court denied in response to the motion to dismiss to
conclude that separate appeals would be an inappropriate use of judicial resources. Accordingly,
the Court declines to certify its ruling as a final order under Rule 54(b).
IV. CONCLUSION
For the foregoing reasons, the Court DENIES Plaintiff’s [27] Motion for Reconsideration
or, in the alternative, Motion Requesting the Court to Enter a Final Judgment and GRANTS IN
PART and DENIES IN PART Defendant’s [26] Motion for Reconsideration. Accordingly,
Plaintiff’s Bivens claims against the Individual Defendants remain dismissed as do Plaintiff’s
claims related to Defendant’s allegedly retaliatory prosecution. Plaintiff’s FTCA claims are now
dismissed in their entirety, except for Plaintiff’s invasion of privacy claim to the extent it alleges
harms from the public disclosure of private facts in the statements Plaintiff alleges Defendant
made to the press. The Court will not enter final judgment with respect to the Individual
Defendants in this case.
/s/
COLLEEN KOLLAR-KOTELLY
UNITED STATES DISTRICT JUDGE
12