Laureatus Group, LLC v. United States Department of the Treasury

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
LAUREATUS GROUP, LLC, :
:
Plaintiff, : Civil Action No.: 22-2103 (RC)
:
v. : Re Document Nos.: 23, 24
:
UNITED STATES DEPARTMENT :
OF THE TREASURY, et al., :
:
Defendants. :
MEMORANDUM OPINION
GRANTING DTCC AND GOVERNMENT DEFENDANTS’ MOTIONS TO DISMISS; GRANTING
PLAINTIFF’S REQUEST FOR LEAVE TO AMEND COMPLAINT
I. INTRODUCTION
Plaintiff Laureatus Group, LLC (“Plaintiff” or “Laureatus”) brings the instant suit against
various governmental and non-governmental defendants, alleging that the United States
Department of the Treasury unlawfully seized $700 billion in cash funds (the “Funds”) that were
transferred in November 2004 by the Bank of Taiwan but that never reached their intended
destination at the U.S.-based Wachovia Securities (“Wachovia”). According to Laureatus,
Defendants Depository Trust & Clearing Corporation (“DTCC”) and Depository Trust Company
(“DTC”) (collectively, “DTCC Defendants”) held or sequestered the Funds in response to either
a chill or freeze order issued by the U.S. Government, which then seized the funds and urged
Laureatus to pursue the return of the Funds through negotiations rather than litigation.
Almost 18 years following the alleged seizure, Laureatus filed its Complaint bringing
claims under the Administrative Procedure Act (“APA”), 5 U.S.C. § 551, et seq., and the Fourth
and Fifth Amendments of the United States Constitution against DTCC Defendants. Laureatus
also raises those same claims, in addition to a claim under the Federal Tort Claims Act
(“FTCA”), 28 U.S.C. 2671, et seq., against named U.S. Government agencies and officials
(collectively, “Government Defendants”). Further, Laureatus brings a claim under Bivens v. Six
Unknown Named Agents of Federal Bureau of Narcotics, 403 U.S. 388 (1971) against unnamed
John Doe defendants (“John Doe Defendants”). Invoking the Mandamus Act, 28 U.S.C. § 1361,
and the Declaratory Judgment Act, 28 U.S.C. § 2201, Laureatus seeks, among other relief, not
only a declaratory judgment finding it to be the rightful owner of the Funds, but also an
unspecified award of damages and a writ of mandamus compelling Government Defendants to
return the $700 billion to Laureatus in restitution. For the reasons detailed below, the Court
grants DTCC and Government Defendants’ respective motions to dismiss, in addition to
dismissing Plaintiff’s claim against John Doe Defendants.
II. BACKGROUND
A. Factual Background 1
Merchants International Holding Ltd. (“Merchants”), a company incorporated in South
Dakota that conducted business with wealthy foreign nationals, sought to “negotiate for, and
assume fiduciary responsibility for, the transfer of more than $2 trillion into the United States for
business investment purposes.” Compl. ¶¶ 3, 24, ECF No. 1. Merchants engaged Tropos Capital
Corporation of America (“Tropos”), a Delaware-based corporation, to manage the investment of
$700 billion of the proceeds. Id. ¶ 25. In July 2004, Merchants solicited a $2.1 trillion (USD)
investment from a wealthy Taiwanese investor, Mr. Tien Chuan Wu. Id. ¶ 26.
1
In deciding this motion to dismiss, the Court recites the facts as alleged by Laureatus.
This background section does not represent the Court’s findings of fact.
2
The parties agreed to transfer Mr. Wu’s investment funds, totaling over $700 billion,
from his savings account at the Bank of Taiwan to Merchants in the United States. Id. ¶¶ 29, 35.
The transfer would be facilitated by Wachovia using the Automated Customer Account Transfer
Service (“ACATS”) system, which “executes the transfer of financial securities from a trading
account at one institution to the trading account at another.” Id. ¶ 30. ACATS was developed by
the National Securities Clearing Corporation (“NSCC”), a subsidiary of DTCC, “a private
holding company owned collectively by banks and financial institutions.” Id. ¶ 31.
On or about November 4, 2004, the Bank of Taiwan initiated a transfer of at least $700
billion to Wachovia in the United States via Wachovia’s intermediary back office operation
entities, which included DTCC Defendants, Cede & Co., and/or First Clearing, LLC
(collectively, the “Clearing Entities”). Id. ¶¶ 36–37. Although the Funds were then no longer
reflected on the Bank of Taiwan’s books, they were not credited at Wachovia either. Id. ¶¶ 36,
38. Rather, according to Laureatus, the Funds were halted by the Clearing Entities in response to
a chill or freeze order issued by the U.S. Government. Id. ¶ 39. The Funds were “then moved to
the risk and compliance side of Wachovia’s Clearing Entities, where they were placed in chill or
suspense.” Id. ¶ 41. The Funds did not come to DTC’s systems via Cede & Co. and were not
book-entered by DTC. Id. ¶ 42.
At some point, the Funds “simply disappeared.” Id. ¶ 49. The Funds had been “moved
from the Clearing Entities to Defendant [the United States Department of the Treasury] and were
never book-entered or received by Wachovia or returned to the Bank of Taiwan.” Id. ¶ 46. Nor
were the parties to the transaction notified about a chill or freeze or informed of the reasons why
the Funds had been intercepted. Id. ¶ 48.
3
In subsequent years, various high-ranking U.S. Government officials allegedly confirmed
that the transfer from the Bank of Taiwan had occurred and that the Treasury possessed a
significant portion of the Funds. Id. ¶¶ 51–52. These officials told Laureatus that it “was acting
appropriately by negotiating the return of the [F]unds through political channels instead of
pursuing its claims in court, which . . . would frustrate the officials’ ability to facilitate the return
of the Funds.” Id. ¶ 50. Specifically, then-Treasury Secretary Henry M. Paulson and then-
Chairman of the Federal Reserve Ben S. Bernanke confirmed that Treasury “possessed at least a
significant portion of the Funds” and “promised Plaintiff resolution.” Id. ¶ 51. Although
Laureatus negotiated and agreed in writing to such a resolution with then-Under Secretary of the
Treasury for International Affairs Timothy D. Adams, the officials twice “at the last minute”
declined to execute the agreement. Id. Likewise, then-Director of the Federal Reserve Board’s
Management Division Richard A. Anderson informed Laureatus’s Board of Directors that the
ACATS transfer from the Bank of Taiwan to Wachovia had in fact occurred and that he had
determined the “location within the Treasury Department of what remained of the Funds.” Id. ¶
52. Nevertheless, Laureatus never reached a resolution with the Treasury Department because
(a) then-President of the New York Federal Reserve, Timothy Geithner, was personally
involved in the freezing of the Funds, [and] was therefore at least partially responsible for
the [Funds’] disappearance, and faced legal and political liability as a result; and (b)
various members of Congress and Executive Branch officials had impermissibly
redirected portions of the Funds for purposes other than their return to the Bank of
Taiwan or disbursement to Plaintiff.
Id. ¶ 51. As recently as July 2016, then-Counsel to the Inspector General Richard Delmar had
verified that Treasury possessed what remained of the Funds but nevertheless denied to
Laureatus’s agent that the Funds had been transferred to the Treasury. Id. ¶ 53.
Plaintiff Laureatus is a privately-held Nevada limited liability company formed on April
13, 2006 that has a principal place of business in Carson City, Nevada. Id. ¶ 9. On or about
4
November 18, 2008, Merchants assigned its rights to the Funds, including its claim against the
United States, to Laureatus “for valuable consideration.” Compl. Ex. A, at 3, ECF No. 1. In July
2021, Laureatus presented its claim under the FTCA to the U.S. Government. See id. at 1. In a
letter dated February 18, 2022, the Treasury Department denied the claim. Compl. Ex. B, at 2–3,
ECF No. 1.
B. Procedural Background
On July 18, 2022, Laureatus filed its Complaint against DTCC Defendants, Government
Defendants, and John Doe Defendants. See generally Compl. Laureatus raises various claims
against both DTCC Defendants and Government Defendants. First, according to Laureatus,
DTCC Defendants have, by seizing the Funds without due process or just compensation, violated
Merchants’ rights—and thus, Laureatus’s rights, as the “corporate successor” to Merchants—
under the Fourth and Fifth Amendments of the Constitution. Id. ¶¶ 55–70. Second, Laureatus
argues, DTCC Defendants’ actions violate the APA. Id. ¶¶ 71–100. Third, Laureatus contends
that DTCC Defendants have committed the tort of conversion under D.C. law. Id. ¶ 105; Pl.’s
Opp’n to DTCC Defs.’ Mot. to Dismiss at 7, ECF No. 27. Laureatus further raises each of these
claims—under the Fourth and Fifth Amendments, the APA, and D.C. law—against Government
Defendants. Compl. ¶¶ 55–70, 71–100. In addition, Laureatus alleges that Government
Defendants have violated the FTCA, id. ¶¶ 101–10, and raises a Bivens claim against unnamed
government officials, whom Laureatus has identified only as John Doe Defendants, id. ¶¶ 111–
17.
On November 1, 2022, DTCC Defendants and Government Defendants separately filed
their motions to dismiss. See generally DTCC Defs.’ Mot. to Dismiss, ECF No. 23; Gov’t Defs.’
Mot. to Dismiss, ECF No. 24. Laureatus responded to each motion to dismiss. See generally
5
Pl.’s Opp’n to DTCC Defs.’ Mot. to Dismiss; Pl.’s Opp’n to Gov’t Defs.’ Mot. to Dismiss, ECF
No. 26. DTCC Defendants and Government Defendants replied. See generally DTCC Defs.’
Reply Supp. Mot. to Dismiss (“DTCC Defs.’ Reply”), ECF No. 28; Gov’t Defs.’ Reply Supp.
Mot. to Dismiss (“Gov’t Defs.’ Reply”), ECF No. 29. The motions are thus now ripe for
consideration.
III. LEGAL FRAMEWORK
A. Rule 12(b)(1) Motion to Dismiss for Lack of Subject Matter Jurisdiction
Federal courts are courts of limited jurisdiction, see Gen. Motors Corp. v. EPA, 363 F.3d
442, 448 (D.C. Cir. 2004), and must therefore address jurisdiction as a “threshold matter,” Steel
Co. v. Citizens for a Better Env’t, 523 U.S. 83, 94–95 (1998). “A court considering a Rule
12(b)(1) motion must assume the truth of all material factual allegations in the complaint and
construe the complaint liberally, granting a plaintiff the benefit of all inferences that can be
derived from the facts alleged.” McFadden v. Washington Metro. Area Transit Auth., 949 F.
Supp. 2d 214, 219 (D.D.C. 2013) (quoting Am. Nat’l Ins. Co. v. FDIC, 642 F.3d 1137, 1139
(D.C. Cir. 2011)) (cleaned up). Even so, “a ‘[p]laintiff’s factual allegations in the complaint . . .
will bear closer scrutiny in resolving a 12(b)(1) motion than resolving a 12(b)(6) motion for
failure to state a claim.’” Turan Petroleum, Inc. v. Ministry of Oil & Gas of Kaz., 406 F. Supp.
3d 1, 8 (D.D.C. 2019) (quoting Grand Lodge of the Fraternal Ord. of Police v. Ashcroft, 185 F.
Supp. 2d 9, 13–14 (D.D.C. 2001)), aff’d, No. 21-7023, 2022 WL 893011 (D.C. Cir. Mar. 25,
2022). “Under Rule 12(b)(1), a plaintiff bears the burden of establishing jurisdiction by a
preponderance of the evidence.” Grell v. Trump, 330 F. Supp. 3d 311, 316 (D.D.C. 2018) (citing
Lujan v. Defs. of Wildlife, 504 U.S. 555, 561 (1992)). In addition, a court may “undertake an
independent investigation to assure itself of its own subject matter jurisdiction” and “consider
6
facts developed in the record beyond the complaint.” CFA Inst. v. Andre, 74 F. Supp. 3d 462,
465 (D.D.C. 2014) (quotation marks and citations omitted).
Standing is “an essential and unchanging part of the case-or-controversy requirement of
Article III,” Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992), and therefore is “a necessary
‘predicate to any exercise of [Article III courts’] jurisdiction,’” Dominguez v. UAL Corp., 666
F.3d 1359, 1361 (D.D.C. 2012) (quoting Fla. Audubon Soc’y v. Bentsen, 94 F.3d 658, 663 (D.C.
Cir. 1996) (en banc)). “The ‘irreducible constitutional minimum’ for standing is (i) the party
must have suffered a concrete and particularized injury in fact, (ii) that was caused by or is fairly
traceable to the actions of the defendant, and (iii) is capable of resolution and likely to be
redressed by judicial decision.” Sierra Club v. EPA, 755 F.3d 968, 973 (D.C. Cir. 2014) (citing
Lujan, 504 U.S. at 560–61). In other words, to establish standing as a constitutional matter, a
plaintiff must “demonstrate the existence of a ‘personal injury fairly traceable to the opposing
party’s allegedly unlawful conduct and likely to be redressed by the requested relief.’” Delta Air
Lines, Inc. v. Export–Import Bank of U.S., 85 F. Supp. 3d 250, 260 (D.D.C. 2015) (citation
omitted). To show an injury in fact, a plaintiff must have suffered “an invasion of a legally
protected interest which is (a) concrete and particularized and (b) actual or imminent, not
conjectural or hypothetical.” Lujan, 504 U.S. at 560 (internal quotation marks and citations
omitted). Fundamentally, the standing inquiry seeks to determine whether there exists a
sufficient “nexus between the status asserted by the litigant and the claim he presents . . . to
assure that he is a proper and appropriate party to invoke federal judicial power.” Flast v.
Cohen, 392 U.S. 83, 102 (1968).
7
B. Rule 12(b)(6) Motion to Dismiss for Failure to State a Claim
To meet the requirements of Rule 8(a)(2) of the Federal Rules of Civil Procedure, a
complaint must contain “‘a short and plain statement of the claim showing that the pleader is
entitled to relief,’ in order to ‘give the defendant fair notice of what the . . . claim is and the
grounds upon which it rests.’” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting
Conley v. Gibson, 355 U.S. 41, 47 (1957)). A motion to dismiss under Rule 12(b)(6) “tests the
legal sufficiency of a complaint.” Browning v. Clinton, 292 F.3d 235, 242 (D.C. Cir. 2002). To
survive a motion to dismiss, the “complaint must contain sufficient factual matter, accepted as
true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (quoting Twombly, 550 U.S. at 570). Requiring “more than a sheer possibility that a
defendant has acted unlawfully,” the plausibility standard is met “when the plaintiff pleads
factual content that allows the court to draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Id.; see also Twombly, 550 U.S. at 555 (“Factual allegations must
be enough to raise a right to relief above the speculative level, on the assumption that all the
allegations in the complaint are true (even if doubtful in fact).” (internal citation omitted)).
“Where a complaint pleads facts that are merely consistent with a defendant’s liability, it
stops short of the line between possibility and plausibility of entitlement to relief.” Iqbal, 556
U.S. at 678 (internal quotation marks and citation omitted). Accordingly, “[t]hreadbare recitals
of the elements of a cause of action, supported by mere conclusory statements,” are insufficient.
Id. Further, a court need not accept a plaintiff's legal conclusions as true, see id., nor presume
the veracity of legal conclusions that are couched as factual allegations, see Twombly, 550 U.S.
at 555. Finally, a court “may also disregard ‘the complaint’s factual allegations insofar as they
contradict exhibits to the complaint or matters subject to judicial notice.’” Doe #1 v. Am. Fed’n
8
of Gov’t Emps., 554 F. Supp. 3d 75, 92 (D.D.C. 2021) (quoting Kaempe v. Myers, 367 F.3d 958,
963 (D.C. Cir. 2004)).
“[M]otions to dismiss based on a statute of limitations defense are generally disfavored,
and the D.C. Circuit has ‘repeatedly held [that] courts should hesitate to dismiss a complaint on
statute of limitations grounds based solely on the face of the complaint.’” Doe v. Kipp DC
Supporting Corp., 373 F. Supp. 3d 1, 7 (D.D.C. 2019) (quoting Firestone v. Firestone, 76 F.3d
1205, 1209 (D.C. Cir. 1996)). The D.C. Circuit has previously observed that “[t]here is an
inherent problem in using a motion to dismiss for purposes of raising a statute of limitations
defense” because “[a]lthough it is true that a complaint sometimes discloses such defects on its
face, it is more likely that the plaintiff can raise factual setoffs to such an affirmative defense.”
Richards v. Mileski, 662 F.2d 65, 73 (D.C. Cir. 1981). Even so, the D.C. Circuit “[did] not hold
that the use of a motion to dismiss is always improper to raise a statute of limitations defense.”
Id. “Courts may dismiss a complaint under Rule 12(b)(6) on statute of limitations grounds if ‘the
factual allegations in the complaint . . . clearly demonstrate all elements of the statute of
limitations defense and that the plaintiff has no viable response to the defense.’” Brink v. XE
Holding, LLC, No. 11-cv-01733, 2022 WL 3334503, at *3 (D.D.C. May 19, 2022) (quoting
United States ex rel. Landis v. Tailwind Sports Corp., 51 F. Supp. 3d 9, 38 (D.D.C. 2014)); see
also Jones, 549 U.S. at 215 (noting that a “complaint is subject to dismissal for failure to state a
claim” when the allegations “show that relief is barred by the applicable statute of limitations”).
In other words, “the Court should grant a motion to dismiss on the ground of statute of
limitations only if no reasonable person could disagree on the date on which the cause of action
accrued, and the complaint on its face is conclusively time-barred.” Thompson v. HSBC Bank
USA, N.A., 850 F. Supp. 2d 269, 274 (D.D.C. 2012) (citations omitted and cleaned up).
9
IV. ANALYSIS
As Laureatus recognizes, it has alleged an “extraordinary” set of facts in this case. Pl.’s
Opp’n to Gov’t Defs.’ Mot. to Dismiss at 1. According to Laureatus, not only did the United
States government seize $700 billion being transferred in a single transaction by one Taiwanese
investor 2—apparently only a portion of a total investment worth $2.1 trillion by this single
individual—but Laureatus then spent years negotiating for the money’s return with the U.S.
Government, which induced Laureatus to abstain from bringing suit even though those
government officials actually intended to obfuscate and shield various individuals from personal
liability for their involvement. Nearly two decades after the alleged seizure at issue, Laureatus
now brings suit—yet neither the estate of the mysterious investor 3 nor the banks involved in the
transaction are parties to this suit, which, if successful, would have the Court order the transfer of
$700 billion from the Treasury to Laureatus, rather than to the investor. 4
2
As a point of comparison, the gross domestic product (“GDP”) of Taiwan in 2020 was
$635.5 billion. Taiwan, Office of the United States Trade Rep., https://ustr.gov/countries-
regions/china/taiwan (last accessed on Aug. 7, 2023); see, e.g., Nat’l Ass’n for Advancement of
Colored People v. United States Postal Serv., 496 F. Supp. 3d 1, 6 n.1 (D.D.C. 2020),
enforcement granted, No. 20-CV-2295 (EGS), 2020 WL 6441317 (D.D.C. Oct. 27, 2020) (taking
judicial notice of information on official government websites).
3
According to an attachment to Plaintiff’s Complaint, Mr. Wu is deceased. See Compl.
Ex. B at 1.
4
The Court also notes that proceeding without joining Mr. Wu’s estate or his
representative would potentially be problematic under Federal Rule of Civil Procedure 19, which
provides in relevant part:
A person who is subject to service of process and whose joinder will not deprive the court
of subject-matter jurisdiction must be joined as a party if . . . that person claims an
interest relating to the subject of the action and is so situated that disposing of the action
in the person’s absence may: (i) as a practical matter impair or impede the person’s
ability to protect the interest; or (ii) leave an existing party subject to a substantial risk of
incurring double, multiple, or otherwise inconsistent obligations because of the interest.
Fed. R. Civ. P. 19. Not only is there a clear risk here of impairing Mr. Wu’s potential interest in
the Funds, but Government Defendants could also be exposed to inconsistent and/or double
10
The Court dismisses this case for decidedly less intriguing reasons. First, Laureatus’s
claims against DTCC Defendants fail because DTCC Defendants are private, not governmental
entities, and enjoy absolute immunity from liability for the conduct forming the basis of
Laureatus’s claims. Second, Laureatus’s claims against Government Defendants and John Doe
Defendants fail because Laureatus has not met its burden in showing why the Court should toll
the statutes of limitations applicable to Laureatus’s claims. 5
A. Claims Against DTCC Defendants
Laureatus fails to show that it may bring its constitutional and APA claims against DTCC
Defendants, which are private entities. In its Complaint, Laureatus describes DTCC as “a New
York corporation with its principal place of business in New York City, New York” and as “an
industry-owned firm, meaning it is owned by the brokerage firms, investment and clearing
banks, and mutual fund companies that are members of the national markets.” Compl. ¶ 14.
Laureatus then also describes DTC, “a wholly-owned subsidiary of DTCC,” as “a limited
purpose trust company formed under the Banking laws of New York, with its principal place of
business in New York City, New York.” Id. ¶ 15. Laureatus nevertheless argues that: (1) DTCC
Defendants are “quasi-governmental” authorities subject to claims under the APA; and (2)
Laureatus may raise its Fourth and Fifth Amendment claims against DTCC Defendants because
obligations due to his absence. Federal Rule of Civil Procedure 12(b)(7) provides that a
complaint may be dismissed for “failure to join a party under Rule 19.” Fed. R. Civ. P. 12(b)(7).
5
Because the Court dismisses Laureatus’s claims for relief against both DTCC and
Government Defendants, “neither the Mandamus Act nor the Declaratory Judgment Act are
cognizable” given that “Plaintiff has no clear right to relief.” Van Ravenswaay v. Napolitano,
613 F. Supp. 2d 1, 6 (D.D.C. 2009); see also In re Medicare Reimbursement Litig., 414 F.3d 7,
10 (D.C. Cir. 2005) (holding that mandamus is cognizable only where “the plaintiff has a clear
right to relief”); Walpin v. Corp. for Nat. and Community Serv., 718 F. Supp. 2d 18, 24 (D.D.C.
2010) (“Relief under the Declaratory Judgment Act ‘is not cognizable as a separate cause of
action, but is more properly included in the[ ] prayer for relief.’” (quoting Bridges v. Blue Cross
& Blue Shield Ass’n, 935 F. Supp. 37, 45 (D.D.C. 1996))).
11
they acted as agents or instrumentalities of the government. 6 Pl.’s Opp’n to DTCC Defs.’ Mot.
to Dismiss at 1. Neither argument is availing.
1. APA Claims
Laureatus asserts that DTCC Defendants have the authority to exercise the powers of a
federal agency and should accordingly be deemed agencies for purposes of applying the APA.
See Pl.’s Opp’n to DTCC Defs.’ Mot. to Dismiss at 6. As another court in this District has
acknowledged, “[t]he law on the simple question of what is an agency is quite complex.”
McKinney v. Caldera, 141 F. Supp. 2d 25, 31 (D.D.C. 2001) (quoting Lee Constr. Co., Inc. v.
Fed. Reserve Bank, 558 F.Supp. 165, 172 (D. Md. 1982)). In conducting such an analysis, courts
have examined the “structure, function, and mandate” of the entity, id. at 33, considering
whether it exercises “substantial independent authority,” Flaherty v. Ross, 373 F. Supp. 3d 97,
106 (D.D.C. 2019) (quoting Dong v. Smithsonian Inst., 125 F.3d 877, 882 (D.C. Cir. 1997)).
Laureatus thus urges the Court to treat DTCC Defendants as quasi-governmental
authorities acting for the Securities and Exchange Commission (“SEC”) because of DTC’s status
as a self-regulatory organization (“SRO”). Both parties agree that DTC is an SRO. Pl.’s Opp’n
to DTCC Defs.’ Mot. to Dismiss at 6; DTCC Defs.’ Reply at 2. DTCC is also an SRO. See
Dexter v. Depository Tr. & Clearing Corp., 406 F. Supp. 2d 260, 264 (S.D.N.Y. 2005), aff’d,
219 F. App’x 91 (2d Cir. 2007) (citing In re Depository Trust Co., SEC Release No. 34–47978,
2003 WL 21288541, at *6 & n. 50 (June 3, 2003)). It is true that, as the cases that Laureatus
cites explain, see Pl.’s Opp’n to DTCC Defs.’ Mot. to Dismiss at 6, “Congress and the SEC have
6
Though its Complaint was initially unclear as to which claims Laureatus sought to bring
against which defendants, Laureatus clarified in its opposition to DTCC Defendants’ motion to
dismiss that it was not bringing claims under the FTCA or Bivens against DTCC Defendants, but
did seek to raise a common law tort of conversion claim under D.C. law against DTCC
Defendants. Pl.’s Opp’n to DTCC Defs.’ Mot. to Dismiss at 7, 14.
12
delegated significant responsibility for regulation of the securities markets to SROs, operating
under the supervision of the SEC,” Dexter, 406 F. Supp. 2d at 263. But Laureatus’s argument
elides the caselaw in this District and others stating clearly that the APA does not apply to SROs.
Because the APA applies only to agencies of the federal government, Mwabira-Simera v.
Howard Univ., 692 F. Supp. 2d 65, 70 (D.D.C. 2010), “the APA does not apply to SROs” such
as DTCC Defendants, which are not federal agencies within the meaning of the statute, North v.
Smarsh, Inc., 160 F. Supp. 3d 63, 78 (D.D.C. 2015); see also In re Henry James Faragalli, Jr.,
Release No. 37991, 1996 WL 683707, at *10 n.36 (Nov. 26, 1996) (collecting cases illustrating
that SROs are “private organizations . . . not subject to the requirements applicable to a
government agency”). Laureatus’s claims under the APA against DTCC Defendants must thus
be dismissed.
2. Fourth and Fifth Amendment Claims
Laureatus’s Fourth and Fifth Amendment claims must also fail because DTCC
Defendants have absolute immunity from liability for the conduct forming the basis of those
claims. A plaintiff asserting a claim under the Fourth and Fifth Amendments must show
government action or action by a private party as an instrument or agent of the government. See
Trazell v. Wilmers, 975 F. Supp. 2d 133, 141–42 (D.D.C. 2013). Laureatus argues that DTCC
Defendants seized the Funds, without providing notice or due process, to implement a chill or
freeze order issued by the U.S. Government, thus acting as its instrument or agent. Pl.’s Opp’n
to DTCC Defs.’ Mot. to Dismiss at 12–13. DTCC Defendants counter that not only has
Laureatus not alleged sufficient state action to raise its constitutional claims, but that their
actions, taken pursuant to their roles as SROs, are immune from suit. DTCC Defs.’ Reply at 7.
13
“Immunity doctrines protect private actors when they perform important governmental
functions.” Hofman v. Fid. Brokerage Servs., LLC, No. 2:23-cv-00881-MCS-PVC, 2023 WL
3872564, at *6 (C.D. Cal. May 8, 2023). SROs, for example, “are absolutely immune ‘from suit
for conduct falling within the scope of the SRO’s regulatory and general oversight functions.’”
Dexter, 406 F. Supp. 2d at 262; see also Scher v. Nat’l Ass’n of Sec. Dealers, Inc., 386 F. Supp.
2d 402, 406–08 (S.D.N.Y. 2005), aff’d sub nom. Scher v. Nat’l Assoc. of Sec. Dealers, Inc.
(NASD), 218 F. App’x 46 (2d Cir. 2007) (finding an SRO and its wholly owned subsidiary
immune from suit for actions taken pursuant to quasi-governmental powers delegated to it by the
Securities Exchange Act). In examining whether an SRO is entitled to immunity, “courts
examine the nature of the complained-of function performed by the SRO and evaluate whether
the function is an exercise of quasi-governmental powers rather than conduct of private
business.” Hofman, 2023 WL 3872564, at *6.
In Scher, the Southern District of New York concluded that the plaintiff’s complaint
against the National Association of Securities Dealers, Inc. (“NASD”) was barred by the
NASD’s absolute immunity. 386 F. Supp. 2d at 406. As an SRO subject to the supervision of
the SEC, the NASD (and by extension, its subsidiary) was immune from the plaintiff’s Fifth
Amendment and due process claims because the NASD’s conduct arose from the “regulatory,
investigatory, disciplinary, adjudicatory, and oversight functions delegated to the NASD under
the Securities Exchange Act.” Id. at 407. Moreover, the court explained, the plaintiff had failed
to show that the NASD’s conduct constituted state action in violation of the Fifth Amendment.
Id. Highlighting the caselaw finding consistently that the NASD was a private actor and not a
government agency, the court found that the NASD’s actions could not bind or be imputed to the
government. Id. Rejecting the plaintiff’s arguments that it would be contradictory to find both
14
that the NASD’s conduct did not suffice for state action but nevertheless enjoyed immunity, the
court stated: “[I]t is by no means ‘inconsistent’ to find that, on the one hand, the NASD exercises
insufficient state action to trigger constitutional protections in a case such as this, while
nevertheless holding that the NASD is entitled to absolute immunity in the exercise of its quasi-
public regulatory duties.” Id. at 408.
Likewise, here, DTCC Defendants enjoy immunity as SROs from Laureatus’s Fourth and
Fifth Amendment claims. Laureatus does not claim that DTCC Defendants took any actions
outside of their official functions as SROs; indeed, Laureatus’s argument rests on the premise
that DTCC Defendants acted in their capacity as SROs in abiding by the Government’s alleged
order. See Pl.’s Opp’n to DTCC Defs.’ Mot. to Dismiss at 6, 11–14. Thus, consistent with prior
precedent on the liability of SROs, DTCC Defendants are absolutely immune from liability for
the conduct alleged by Laureatus. See Hofman, 2023 WL 3872564, at *6; In re Series 7 Broker
Qualification Exam Scoring Litig., 548 F.3d 110, 114 (D.C. Cir. 2008) (“When an SRO acts
under the aegis of the Exchange Act’s delegated authority, it is absolutely immune from suit for
the improper performance of regulatory, adjudicatory, or prosecutorial duties delegated by the
SEC.”). Laureatus may counter that DTCC Defendants have engaged in misconduct that falls
outside of its duties as an SRO. But this distinction is immaterial: “[e]ven assuming arguendo
that DTCC’s conduct was incorrect and unlawful, it is nevertheless protected.” Hofman, 2023
WL 3872564, at *7 (quoting Dexter, 406 F. Supp. 2d at 263) (cleaned up); see DL Cap. Grp.,
LLC v. Nasdaq Stock Mkt., Inc., 409 F.3d 93, 98 (2d Cir. 2005) (“[A]llegations of bad faith,
malice, and even fraud—all of which may be relevant to a qualified immunity analysis—cannot,
except in the most unusual of circumstances, overcome absolute immunity.”); In re Series 7, 548
F.3d at 115 (“Courts have declined to craft exceptions [to the absolute immunity accorded to
15
SROs] for bad faith, fraud, negligence, or even gross negligence.” (internal citations omitted)).
Laureatus’s claims under the Fourth and Fifth Amendments against DTCC Defendants must
therefore be dismissed.
3. Common Law Conversion Claim
For the same reasons explained above, DTCC Defendants are immune from liability for
Laureatus’s claim for the common law tort of conversion. See Dexter, 406 F. Supp. 2d at 264(dismissing common law claim of conversion against DTCC based on its immunity to suit); cf. In
re Series 7, 548 F.3d at 115 (concluding that Congress had created comprehensive structure
under the Securities Exchange Act for regulation of the securities industry, indicating an intent to
preempt state common law causes of action against the NASD arising out of duties that were
performed by the NASD only because of regulations under the Act). Accordingly, the Court
dismisses Laureatus’s claim of conversion against DTCC Defendants.
B. Claims Against Government Defendants
Although it remains unclear to the Court whether Laureatus even has standing to bring its
claims against Government Defendants, the Court need not decide the issue because Laureatus’s
claims are time-barred by their respective statutes of limitations. Based on the current record,
the Court declines to exercise its powers to toll the limitations periods, given that Laureatus has
offered only vague, unsupported assertions of wrongdoing by Government Defendants. Because
the Court dismisses Laureatus’s claims against Government Defendants on such grounds, it need
not reach the parties’ other arguments.
1. Standing
As a threshold matter, it is unclear to the Court whether Laureatus even has the necessary
Article III standing to bring its claims against Government Defendants. Government Defendants
16
assert that, because the Anti-Assignment Act bars Laureatus from bringing its claims against the
United States, Laureatus has not alleged an injury in fact and lacks standing. Gov’t Defs.’ Mot.
to Dismiss at 7–10. Government Defendants point to Laureatus’s FTCA administrative claim,
see id. at 9, attached as an exhibit to its Complaint, which stated that, “for valuable
consideration, Merchants sold, transferred, and assigned to Laureatus, in writing, all of its
ownership rights, title, and interest in and to the Funds . . . including this claim against the
United States related thereto, and the demand represented by it,” Compl. Ex. A, at 3. Such an
assignment cannot provide the basis for suit, Government Defendants contend, because the Anti-
Assignment Act prohibits the “assignment of any part of a claim against the United States
Government or of an interest in that claim; or the authorization to receive payment for any part
of the claim,” 31 U.S.C. § 3727(a)(1)-(2), except that “[a]n assignment may be made only after a
claim is allowed, the amount of the claim is decided, and a warrant for payment of the claim has
been issued,” id. § 3727(b). Laureatus responds that the Anti-Assignment Act does not apply
here because Laureatus is the “corporate successor to Merchants and claims that are assigned by
operation of law, such as by merger, consolidation, or reorganization, fall outside of the” Act.
Pl.’s Opp’n to Gov’t Defs.’ Mot. to Dismiss at 2.
The Anti-Assignment Act indeed makes clear that “a claim against the United States may
not be assigned to a third party unless [its] technical requirements are met.” United States v.
Kim, 806 F.3d 1161, 1169 (9th Cir. 2015). Where the Act applies, it “is a total bar on the
assignment of claims against the United States.” Id. at 1175; see also Northrop Grumman
Computing Sys., Inc. v. United States, 709 F.3d 1107, 1113 (Fed. Cir. 2013). “In effect, the
[Anti-Assignment Act] serves as a defense that the Government can raise against a claim . . . .”
Kim, 806 F.3d at 1169 (quoting Murkeldove v. Astrue, 635 F.3d 784, 794 (5th Cir. 2011)).
17
Finding certain equitable exceptions to the Anti-Assignment Act’s plain language, however, the
Supreme Court has concluded that the Act “will not void assignments that arise by operation of
law, voluntary transfers by will, or ‘general assignments for the benefit of creditors.’” Id. at
1170 (quoting United States v. Shannon, 342 U.S. 288, 292 (1952)); see DDS Holdings, Inc. v.
United States, 158 Fed. Cl. 431, 437 (2022) (recognizing exemption from Anti-Assignment Act
for transfer of claim “effected by consolidation or merger to the successor of a claimant
corporation”).
As Government Defendants argue, Laureatus fails to address directly whether its claims
in fact fall under the exception to the Anti-Assignment Act made for assignments arising by
operation of law. Laureatus provides no factual detail evidencing that it is Merchants’
“corporate successor” as it alleges in conclusory fashion. As part of its FTCA administrative
claim, Laureatus apparently attached a copy of Merchants’ November 2008 assignment of rights
to Laureatus. See Compl. Ex. A, at 2. Yet it has not furnished any such documentation here.
And in response to Government Defendants’ motion to dismiss, Laureatus states only that it
“could allege additional facts that Merchants assigned all of its assets to [P]laintiff as the result
of a necessary corporate reorganization, whereby Merchants effectively merged with Laureatus
when it assigned all of its assets to Laureatus, Laureatus assumed the same board of directors as
Merchants, and Merchants subsequently wound down and ceased to exist.” Pl.’s Opp’n to Gov’t
Defs.’ Mot. to Dismiss at 2 n.2 (emphasis added). Setting aside the questions of what constitutes
an “effective” merger or whether such a merger would suffice to make Laureatus the successor-
in-interest to Merchants’ claim per the Anti-Assignment Act, Laureatus’s Complaint does not
contain factual detail supporting its bare assertion of standing.
18
Without more, the Court could reasonably find that Laureatus’s allegations fail to
establish that it has standing to bring its claims against Government Defendants. See Ctr. for
Legal Reform v. Rakowsky, No. 3:14-CV-01674-JFA, 2014 WL 6389709, at *2 (D.S.C. Nov. 14,
2014) (finding that the plaintiff lacked standing to bring suit where the plaintiff only alleged that
it was the successor-in-interest to a contract party but did not provide any documentation or
evidence supporting the assertion); FW/PBS, Inc. v. City of Dallas, 493 U.S. 215, 231 (1990),
holding modified by City of Littleton v. Z.J. Gifts D–4, L.L.C., 541 U.S. 774 (2004) (“It is a long-
settled principle that standing cannot be inferred argumentatively from averments in the
pleadings, but rather must affirmatively appear in the record.” (internal quotation marks and
citations omitted)). The Court need not do so, however, because it may dismiss Laureatus’s
claims against Government Defendants on the additional grounds detailed below. 7
2. Statutes of Limitations
a. APA and Constitutional Claims
As Government Defendants argue, the statutes of limitations on Laureatus’s
constitutional and APA claims against Government Defendants have long passed. Gov’t Defs.’
Mot. to Dismiss at 14–18. Pursuant to 28 U.S.C. § 2401(a), “every civil action commenced
against the United States,” including APA and constitutional claims, “shall be barred unless the
complaint is filed within six years after the right of action first accrues.” Jafarzadeh v. Nielsen,
321 F. Supp. 3d 19, 36 (D.D.C. 2018); see Harris v. FAA, 353 F.3d 1006, 1009 (D.C. Cir. 2004)
(APA claims); Impro Prods., Inc. v. Block, 722 F.2d 845, 851 n.12 (D.C. Cir. 1983)
7
To the extent Laureatus endeavors to amend its Complaint, it would be well-advised to
fortify its allegations beyond those asserted. And, because standing is a jurisdictional defense for
which the Court can look beyond the pleadings, see Ctr. for Biological Diversity v. U.S. Int’l
Dev. Fin. Corp., 585 F. Supp. 3d 63, 70 (D.D.C. 2022), aff’d, No. 22-5095, 2023 WL 4378303(D.C. Cir. July 7, 2023), evidentiary support is likely to be beneficial as well.
19
(constitutional claims). The right of action under the APA “first accrues on the date of the final
agency action.” Washington All. of Tech. Workers v. United States Dep’t of Homeland Sec., 892
F.3d 332, 342 (D.C. Cir. 2018) (quoting Harris, 353 F.3d at 1010). “Constitutional claims
accrue ‘when the injured party discovers—or in the exercise of due diligence should have
discovered—that it has been injured.’” Worthington v. Off. of Nat’l Drug Control Pol’y, No. 19-
cv-0081, 2020 WL 1509167, at *6 (D.D.C. Mar. 30, 2020), aff’d sub nom. Worthington v. United
States Off. of Nat’l Drug Control Pol’y, No. 20-5113, 2020 WL 9311952 (D.C. Cir. Nov. 12,
2020) (quoting Sprint Commc’ns Co. v. FCC, 76 F.3d 1221, 1228 (D.C. Cir. 1996)). Here, the
complained-of action is alleged to have occurred in approximately November 2004, though the
Complaint does not specify when, precisely, the Funds apparently disappeared. Compl. ¶¶ 36,
47. The statutes of limitations on Laureatus’s constitutional and APA claims thus ran out in
approximately November 2010—nearly 12 years before Laureatus filed its Complaint in July
2022.
Laureatus asks, however, that the Court toll the statutes of limitations for these claims. A
plaintiff seeking equitable tolling bears the burden of establishing two elements: “(1) that [the
plaintiff] has been pursuing [its] rights diligently, and (2) that some extraordinary circumstance
stood in [its] way.” Vuyyuru v. Bank of N. Am., Inc., No. 21-cv-762, 2022 WL 1124800, at *5
(D.D.C. Apr. 14, 2022), aff’d sub nom. Vuyyuru v. LSF9 Master Participation Tr., Inc., No. 22-
7153, 2023 WL 2905258 (D.C. Cir. Apr. 10, 2023) (quoting Pace v. DiGuglielmo, 544 U.S. 408,
418 (2005)). Both prongs must be met to warrant equitable tolling. Id. (citing Menominee
Indian Tribe of Wis. v. United States, 577 U.S. 250, 255–56 (2016)). The D.C. Circuit has held
consistently that a court should exercise its equitable power to toll statutes of limitations
“sparingly,” Johnson v. Holder, 598 F. Supp. 2d 50, 56 (D.D.C. 2009), aff’d, 377 F. App’x 3120
(D.C. Cir. 2010), and only “in extraordinary and carefully circumscribed instances,” Summers v.
Howard Univ. Hosp., 300 F. Supp. 3d 268, 270 (D.D.C. 2018) (quoting Mondy v. Secretary of
the Army, 845 F.2d 1051, 1057 (D.C. Cir. 1988)). Equitable tolling may be appropriate where,
for example, “the complainant has been induced or tricked by his adversary’s misconduct into
allowing the filing deadline to pass,” Escamilla v. Nuyen, 227 F. Supp. 3d 37, 55 (D.D.C. 2017)
(quoting Norman v. United States, 467 F.3d 773, 776 (D.C. Cir. 2006)), or if, “despite all due
diligence [the plaintiff] is unable to obtain vital information bearing on the existence of [its]
claim,” id. (quoting Smith–Haynie v. D.C., 155 F.3d 575, 579 (D.C. Cir. 1998)). By contrast,
“[e]quitable tolling is unwarranted where a litigant has failed to exercise due diligence in
preserving his legal rights.” Hewitt v. Rice, 560 F. Supp. 2d 61, 65 (D.D.C. 2008) (quoting
Commc’ns Vending Corp. of Arizona v. F.C.C., 365 F.3d 1064, 1075 (D.C. Cir. 2004)).
Ultimately, the Court has “sole discretion” in deciding whether to apply equitable tolling.
Escamilla, 227 F. Supp. 3d at 55 (citing Smith v. Holder, 806 F.Supp.2d 59, 63 (D.D.C. 2011)).
Laureatus avers that it has met its burden of showing that equitable tolling is warranted
because it has alleged that various government officials “actively misled” and “lulled” Laureatus
into “[forgoing] court action to instead negotiate through political channels.” Pl.’s Opp’n to
Gov’t Defs.’ Mot. to Dismiss at 18; see also id. at 1 (stating that “various high-level officials of
the United States Treasury and Federal Reserve . . . told [P]laintiff to [forgo] court action and
instead seek the return of the funds through political channels,” leading Laureatus to not bring its
action “until it had exhausted negotiations through the administrations of three different United
States Presidents”). Seeking to correct an error in its Complaint that stated that Laureatus had
sought to recover the Funds over the last 12 years, Laureatus clarifies that it has in fact sought to
recover the Funds over the 16 years preceding the Complaint. Id. at 1 n.1. Government
21
Defendants assert in response that not only has Laureatus failed to account for whether
Merchants diligently pursued its rights during the approximately two years immediately
following the alleged seizure, but that Laureatus has also not shown any misconduct that would
suffice as an extraordinary circumstance meriting equitable tolling. Gov’t Defs.’ Reply at 7–10.
Based on the facts alleged, the Court finds that Government Defendants have the better
argument here for the latter reason, rather than the former. As Government Defendants point
out, Laureatus’s claim that it has acted diligently to preserve its rights over the last 16 years
would place the beginning of its efforts sometime in 2006. But the FTCA administrative claim
that Laureatus appears to have filed in July 2021 also maintains that the “legal owners of the
Funds” had “used every reasonable, ordinary and legal method to trace these missing Funds and
regain possession to them” over the past 16 years—which would place the start of those efforts
in 2005 instead. Compl. Ex. A, at 3. Laureatus was not formed until April 2006, and it did not
allegedly gain ownership of the right to the Funds until November 2008. See Compl ¶ 9; Compl.
Ex. A, at 3. Presumably, then, Laureatus is alleging either that it acted diligently to recover the
Funds upon its formation or that Merchants had been doing so since 2005. There is, moreover,
the additional problem that Laureatus does not account for its efforts during the entire length of
the approximately 18 years, with what appears to be the most recent development alleged dating
from July 2016. See Compl. ¶ 53. Government Defendants rightly highlight the gap in
Laureatus’s timeline, and the absence of evidence here tends to support a finding that Laureatus
did not diligently pursue its rights. See Marshall v. Honeywell Tech. Sols., Inc., 536 F. Supp. 2d
59, 68 (D.D.C. 2008) (finding that the plaintiff, who “filed her age discrimination administrative
charge 735 days after the last of her alleged age-related injuries, and 435 days after the time to
file such a charge had expired,” had not provided evidence that she acted with due diligence to
22
pursue her legal rights). But the Court cannot with certainty conclude at this stage whether
Laureatus did or did not act diligently to pursue its rights—if only because the Court is again as
an initial matter unable to discern even the basic fact of what entity took what actions and when
to protects its alleged rights in the Funds. The Complaint, as a general matter, is nearly devoid
of clear allegations as to which actions took place and when during the extremely long period
that elapsed before Laureatus brought its claims.
The Court need not decide the issue on the first prong, however, given that Laureatus’s
argument fails at the second prong of showing that an extraordinary circumstance prevented
Laureatus from timely filing its claim. Laureatus’s argument for equitable tolling rests on
various allegations of government officials inducing Laureatus to refrain from bringing its claims
in court—that various government officials negotiated a resolution with Laureatus, only to
decline to execute the agreement at the last minute on two occasions; that these officials
confirmed over the years that the Treasury was in possession of the funds; and that they also told
Laureatus that it “was acting appropriately by negotiating the return of the funds through
political channels instead of pursuing its claims in court, which Plaintiff was told would frustrate
the officials’ ability to facilitate the return of the Funds.” Compl. ¶¶ 50–53.
It is indeed the case that the D.C. Circuit has previously “excused parties who were
misled about the running of a limitations period, whether by an adversary’s actions, by a
government official’s advice upon which they reasonably relied, or by inaccurate or ineffective
notice from a government agency required to provide notice of the limitations period[.]” Young
v. Sec. & Exch. Comm’n, 956 F.3d 650, 657 (D.C. Cir. 2020) (quoting Bowden v. United States,
106 F.3d 433, 438 (D.C. Cir. 1997) (citations omitted)). In Jarrell v. U.S. Postal Service, 753
F.2d 1088 (D.C. Cir. 1985), for instance, the D.C. Circuit remanded the appellant’s Title VII
23
claim to the district court, which had not considered whether equitable tolling of the claim’s 30-
day filing period was warranted. Id. at 1091. Although the appellant had not, as required by the
regulations, contacted an Equal Employment Opportunity (“EEO”) Counselor within 30 days of
becoming aware of the information giving rise to his allegations in November 1980, id. at 1090,
he had “alleged that he did not contact an EEO Counselor because he relied on the assurances of
an EEO officer that the officer was attempting to have the information expunged from the
records,” id. at 1091–92. “[W]hen it was clear that no progress was being made in the case,” the
appellant met with an EEO Counselor in May 1982, and subsequently filed a Title VII
complaint. Id. at 1089. The appellant “clearly pleaded equitable considerations which may
excuse noncompliance with the filing requirement,” the D.C. Circuit explained, because it was
“the result of justifiable reliance on the advice of another government officer.” Id. at 1091–92.
Laureatus would have this Court, consistent with the principles underlying cases such as
Jarrell, toll the statutes of limitations on its claims based on the alleged conduct of the
government officials with which it negotiated. But equitable tolling is “[m]eant to ‘ensure[ ] that
the plaintiff is not, by dint of circumstances beyond his control, deprived of a reasonable time in
which to file suit.’” Harris v. CitiMortgage, Inc., 878 F. Supp. 2d 154, 161 (D.D.C. 2012)
(emphasis added) (quoting Chung v. U.S. Dep’t of Just., 333 F.3d 273, 279 (D.C. Cir. 2003)).
Accordingly, the Supreme Court has set forth that the second prong of the equitable tolling test
“is met only where the circumstances that caused a litigant’s delay are both
extraordinary and beyond its control.” Menominee Indian Tribe of Wis., 577 U.S. at 257; see,
e.g., Vuyyuru, 2022 WL 1124800, at *5. Importantly, and fatal to its argument, Laureatus has
not shown here that it was prevented from bringing its claim by circumstances beyond its
control. Even if the Court accepted the allegations in Laureatus’s Complaint as true, Laureatus
24
has shown only that it made a calculated decision in allowing the statutes of limitations on its
claims to pass in the hopes that its negotiations with the Government would bear fruit.
According to Laureatus’s Complaint, various government officials told Laureatus that it “was
acting appropriately by negotiating the return of the funds through political channels instead of
pursuing its claims in court.” Compl. ¶ 50. Laureatus does not allege that Government
Defendants actively misled it about its deadlines for bringing suit. See Young, 956 F.3d at 657;
Dyson v. D.C., 710 F.3d 415, 422 (D.C. Cir. 2013). Nor does Laureatus allege any reason why it
must necessarily have abided by the “instructions” from the government officials to abstain from
bringing suit. Certainly, a party handling a $700 billion investment and holding discussions with
government officials at the highest levels would be considered a sophisticated party with access
to appropriate advice.
Although equitable tolling may be appropriate “where affirmative misconduct on the part
of a defendant lulled the plaintiff into inaction,” Baldwin Cnty. Welcome Ctr. v. Brown, 466 U.S.
147, 151 (1984), Laureatus has offered only the bare speculation that the government officials
strung it along in negotiations to prevent it from litigating, see Compl. ¶¶ 51–52 (claiming that,
“on information and belief,” the officials had no intention of executing the agreement to resolve
the issue because they sought to protect Mr. Geithner). “[A] litigant seeking equitable tolling
cannot rely on ‘conclusory and vague claims’ to survive a motion to dismiss.” DeSimone v.
TIAA Bank, FSB, No. 20-cv-6492, 2021 WL 4198274, at *5 (S.D.N.Y. Sept. 14, 2021) (quoting
Mandarino v. Mandarino, 408 F. App’x 428, 430 (2d Cir. 2011) (summary order)) (cleaned up);
see also Lessmann v. Tenet, 362 F. Supp. 2d 33, 36 (D.D.C. 2005) (declining to toll statute of
limitations because the plaintiff’s claim to have failed to timely file EEO charge due to fear of
retaliation by the CIA was “inherently incredible and [did] not warrant equitable tolling”);
25
Galloway v. Watt, 185 F. Supp. 3d 130, 135 n.1 (D.D.C. 2016) (declining to entertain or permit
discovery on theory for equitable tolling where the plaintiff has not offered evidence in support).
After all, “[i]f mere conjecture were sufficient to prevent dismissal on statute of limitations
grounds, then any plaintiff could avoid dismissal of properly time-barred claims and force their
opponent into discovery.” DeSimone, 2021 WL 4198274, at *5. Laureatus’s allegations are
particularly deficient due to the lack of factual detail as to who said what to whom and when.
Without such factual detail, it is impossible to assess whether government misconduct lulled
Laureatus into inaction and, if so, for how long. Quite simply, Laureatus asks this Court for the
extraordinary relief of equitably tolling statutes of limitations that ran out over a decade ago, but
has not met its heavy burden in showing that the Court ought to exercise a power that it should
only use sparingly.
b. FTCA Claim
For the same reasons, Laureatus’s FTCA claim against Government Defendants is also
time-barred by the statute of limitations. The FTCA “requires that claims be presented to the
agency in question within two years of accrual, and filed in court within six months after denial
by the agency.” Jones v. United States, 934 F. Supp. 2d 284, 291 (D.D.C. 2013) (quoting
Mittleman v. United States, 104 F.3d 410, 413 (D.C. Cir. 1997)); see 28 U.S.C. § 2401(b). A
claim under the FTCA accrues when “a plaintiff has discovered both his injury and its cause,
even though he is unaware that the harm was negligently inflicted.” Harrison v. United States,
No. 16-cv-1829, 2018 WL 4680204, at *5 (D.D.C. Sept. 28, 2018) (quoting United States v.
Kubrick, 444 U.S. 111, 120 (1979)) (cleaned up). As is the case with Laureatus’s constitutional
and APA claims, Laureatus’s FTCA claim appears to have accrued in November 2004. Compl.
¶¶ 36, 47. But Laureatus did not file its FTCA claim until July 2021, nearly 15 years too late.
26
See Compl. Ex. A. Laureatus makes the same arguments for equitable tolling of its FTCA claim
as those previously described, and the Court declines to exercise its power to toll the statute of
limitations here for the same reasons.
C. Claims Against John Doe Defendants
Finally, Laureatus’s Bivens claims against John Doe Defendants are dismissed sua sponte
by the Court. Laureatus asserts that John Doe Defendants—“presently unknown agents of the
Government”—violated the Fourth Amendment by seizing the Funds. Compl. ¶¶ 112–13.
Although Government Defendants acknowledge Laureatus’s Bivens claim, they do not appear to
move to dismiss the Bivens claim, see Gov’t Defs.’ Mot. to Dismiss at 5, but do make a broader
argument that Laureatus had not plausibly alleged a Fourth Amendment violation, see id. at 25. 8
Nevertheless, consistent with the D.C. Circuit’s direction to “‘weed out’ insubstantial
Bivens suits ‘expeditiously,’” the Court proceeds to consider whether Laureatus’s Bivens claim is
time-barred. Simpkins v. D.C. Gov’t, 108 F.3d 366, 370 (D.C. Cir. 1997) (quoting Siegert v.
Gilley, 500 U.S. 226, 232 (1991)); see also Manning v. Esper, No. 12-cv-1802, 2019 WL
281278, at *22 (D.D.C. Jan. 22, 2019) (noting that the court could turn to the merits of the
defendants’ motion to dismiss on behalf of John Doe defendants despite a finding of insufficient
service). Because “Bivens claims are implied causes of action rather than ones granted by
statute, they lack a federal statute of limitations period.” Jacksonville Urb. League, Inc. v. Azar,
No. 18-cv-2275, 2019 WL 3208686, at *4 (D.D.C. July 16, 2019). The Court will thus “look to
analogous provisions in state law” to determine statute of limitations. Doe v. Dep’t of Justice,
8
Reflecting some confusion on DTCC and Government Defendants’ part as to which of
Laureatus’s claims were made against which defendants, DTCC Defendants argue that any
Bivens claim against them should be dismissed. DTCC Defs.’ Mot. to Dismiss at 16–17.
Laureatus subsequently clarified that it was not bringing a Bivens claim against DTCC
Defendants. Pl.’s Opp’n to DTCC Defs.’ Mot. to Dismiss at 14.
27
753 F.2d 1092, 1114 (D.C. Cir. 1985). Other courts in this District have, consistent with the
D.C. Code, applied a three-year limitations period to Bivens claims. See Jacksonville Urb.
League, Inc., 2019 WL 3208686, at *4 (collecting cases). The Court does the same here, which
means that the statute of limitations on Laureatus’s Bivens claim ran out in approximately
November 2007. Although the limitations period may be equitably tolled, see, e.g., Doe v.
United States, No. 22-843, 2023 WL 4874694, at *4 (2d Cir. Aug. 4, 2023), the Court again
declines to do so for the reasons explained above. 9
D. Motion to Amend
Laureatus requests leave to amend its Complaint should “the Court grant the government’s
Motion to Dismiss, in whole or in part,” but does not offer argument as to why the Court should
grant such leave. Pl.’s Opp’n to DTCC Defs.’ Mot. to Dismiss at 14; Pl.’s Opp’n to Gov’t Defs.’
Mot. to Dismiss at 30. Pursuant to the Federal Rules of Civil Procedure, a party may amend its
pleading once as a matter of course within 21 days after serving it, or, if the pleading is one to
which a responsive pleading is required, 21 days after service of a responsive pleading or 21
days after service of a motion under Rule 12(b), (e), or (f), whichever is earlier. Fed. R. Civ. P.
15(a)(1). “In all other cases, a party may amend its pleading only with the opposing party’s
written consent or the court’s leave.” Fed. R. Civ. P. 15(a)(2).
9
Although the Court takes no position on whether a Bivens remedy would be viable for
Laureatus’s current claims, the Court observes that the Supreme Court has severely limited the
contexts in which a Bivens remedy can even be found to exist. Indeed, the Supreme Court has
“emphasized that recognizing a cause of action under Bivens is ‘a disfavored judicial activity,’”
Egbert v. Boule, 142 S. Ct. 1793, 1803 (2022) (quoting Ziglar v. Abbasi, 582 U.S. 120, 135
(2017)), because “in all but the most unusual circumstances, prescribing a cause of action is a job
for Congress, not the courts,” id. at 1800. “‘[E]ven a single sound reason to defer to Congress’ is
enough to require a court to refrain from creating such a remedy.” Id. at 1803 (quoting Nestlé
USA, Inc. v. Doe, 141 S. Ct. 1931, 1937 (2021)).
28
The decision to grant or deny leave to amend “is committed to a district court’s
discretion.” Firestone v. Firestone, 76 F.3d 1205, 1208 (D.C. Cir. 1996) (per curiam). Although
leave to amend a complaint “shall be freely given when justice so requires,” Fed. R. Civ. P.
15(a)(2), “the Supreme Court has instructed federal courts to consider the following factors: (1)
undue delay; (2) the movant’s bad faith or dilatory motive; (3) repeated failures to cure
deficiencies by amendments previously allowed; (4) undue prejudice to the opposing party by
virtue of permitting an amendment; and (5) futility of the amendment,” Norris v. Salazar, 746 F.
Supp. 2d 1, 3 (D.D.C. 2010) (citing Foman v. Davis, 371 U.S. 178, 182 (1962)). DTCC
Defendants have requested that the Court dismiss all of Laureatus’s claims against them with
prejudice because amendment to the Complaint would be futile. DTCC Defs.’ Reply at 2.
Government Defendants have not responded to Laureatus’s request to amend. See generally
Gov’t Defs.’ Reply.
Despite Laureatus’s feeble request, the Court grants its request to amend its Complaint,
given the enormity of its allegations. Should Laureatus continue to bring claims against DTCC
Defendants, it should be prepared to support its decision to do so and offer an explanation
beyond the arguments that the Court has already rejected here. Moreover, Laureatus should take
care to provide the factual detail that it has assured the Court that it will be able to expound (such
as that supporting standing) and address the deficiencies that the Court has noted above, in
addition to bolstering its other allegations as needed to support the claims that the Court has not
yet addressed on the merits.
V. CONCLUSION
For the foregoing reasons, the Court GRANTS DTCC and Government Defendants’
respective Motions to Dismiss (ECF Nos. 23 and 24), but also GRANTS Plaintiff’s request to
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amend its Complaint. An order consistent with this Memorandum Opinion is separately and
contemporaneously issued.
Dated: September 12, 2023 RUDOLPH CONTRERAS
United States District Judge
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