Loumiet v. United States of America et al

MOTION to Dismiss for Lack of Jurisdiction

D.D.C.October 14, 2016

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA CARLOS LOUMIET, : : Plaintiff, : : Civil Action No. 12-01130 (CKK) v. : : UNITED STATES OF AMERICA, et al., : : Defendants. : UNITED STATES’ MOTION TO DISMISS AND STATEMENT OF POINTS AND AUTHORITIES IN SUPPORT BENJAMIN C. MIZER Principal Deputy Assistant Attorney General C. SALVATORE D’ALESSIO, JR. Acting Director, Torts Branch ANDREA W. MCCARTHY Senior Trial Counsel, Torts Branch REGINALD M. SKINNER Trial Attorney, Civil Division United States Department of Justice P.O. Box 7146, Ben Franklin Station Washington, D.C. 20044 Tel: (202) 616-3111 Fax: (202) 616-4314 Counsel for the Defendants Case 1:12-cv-01130-CKK Document 63 Filed 10/14/16 Page 1 of 20 i TABLE OF CONTENTS INTRODUCTION .......................................................................................................................... 1 FACTUAL BACKGROUND ......................................................................................................... 1 LEGAL STANDARD ..................................................................................................................... 5 ARGUMENT .................................................................................................................................. 6 I. The Complaint Fails to State a Plausible Constitutional Violation, and Therefore Loumiet Has Not Defeated Application of the FTCA’s Discretionary Function Exception . .............................................................................................................. 6 A. The Complaint fails to allege sufficient facts to state a plausible claim for retaliatory prosecution under the First Amendment. ............................. 7 B. Loumiet fails to state a due process claim under the Fifth Amendment. .... 8 II. Loumiet’s Abuse of Process and Malicious Prosecution Claims Are Barred by the FTCA’s “Law Enforcement Proviso.” ....................................................... 10 III. Loumiet’s Invasion of Privacy Claim is Barred by the Statute of Limitations and is Not Saved by the Continuing Tort Doctrine. .............................................. 13 IV. The Complaint Fails to Allege Sufficient Facts to Establish Subject Matter Jurisdiction over Loumiet’s Invasion of Privacy Claim. ...................................... 14 CONCLUSION ............................................................................................................................. 16 Case 1:12-cv-01130-CKK Document 63 Filed 10/14/16 Page 2 of 20 ii TABLE OF AUTHORITIES Cases Albright v. Oliver, 510 U.S. 266 (1994) ......................................................................................... 9 Arista Records, LLC v. Doe 3, 604 F.3d 110 (2d Cir. 2010) .......................................................... 8 *Ashcroft v. Iqbal, 556 U.S. 662 (2009) ........................................................................... 6, 7, 8, 15 Bailey v. WMATA, 696 F. Supp. 2d 68 (D.D.C. 2010) ................................................................. 15 *Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) ........................................................... 6, 7, 8, 15 Biase v. Kaplan, 852 F. Supp. 268 (D.N.J. 1994) ......................................................................... 11 Cox Broadcasting Corp. v. Cohn, 420 U.S. 469 (1975) ............................................................... 16 Curran v. Holder, 626 F. Supp. 2d 30 (D.D.C. 2009) .................................................................... 5 EEOC v. St. Francis Xavier Parochial Sch., 117 F.3d 621 (D.C. Cir.1997) .................................. 5 Employers Ins. of Wausau v. United States, 815 F. Supp. 255 (N.D. Ill. 1993) ........................... 12 Graham v. Connor, 490 U.S. 386 (1989) ................................................................................. 9, 10 Grand Lodge of Fraternal Order of Police v. Ashcroft, 185 F. Supp. 2d 9 (D.D.C. 2001) ........... 5 Gray v. Bell, 542 F. Supp. 927 (D.D.C. 1982) .............................................................................. 12 Gustave-Schmidt, 226 F. Supp. 2d ................................................................................................ 12 Haynesworth v. Miller, 820 F.2d 1245 (D.C. Cir.1987) ................................................................. 7 Hinson ex rel. N.H. v. Merritt Educ. Ctr., 521 F. Supp. 2d 22 (D.D.C. 2007) ............................... 6 Hollingsworth v. Duff, 444 F. Supp. 2d 61 (D.D.C. 2006) ............................................................. 5 Jefferson v. Collins, 905 F. Supp. 2d 269 (D.D.C. 2012) ............................................................... 8 Jerome Stevens Pharm., Inc. v. Federal Dep’t of Agriculture, 402 F.3d 1249 (D.C. Cir. 2005) .................................................................................................. 6 Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375 (1994) ................................................. 5 Case 1:12-cv-01130-CKK Document 63 Filed 10/14/16 Page 3 of 20 iii Leatherman v. Tarrant Cnty. Narcotics Intelligence & Coordination Unit, 507 U.S. 163 (1993) .................................................................................................................... 5 Lehr v. Robertson, 463 U.S. 248 (1983) ......................................................................................... 9 Loumiet v. Office of Comptroller of Currency, 650 F.3d 796 (D.C. Cir. 2011) ................. 1, 2, 3, 4 Loumiet v. United States, 106 F. Supp. 3d 219 (D.D.C. 2015) ..................................................... 13 Loumiet v. United States, 828 F.3d 935 (D.C. Cir. 2016) ............................................................... 6 Marshall County Health Care Auth. v. Shalala, 988 F.2d 1221 (D.C. Cir.1993) .......................... 6 Moore v. United States, 213 F.3d 705 (D.C. Cir. 2000) ............................................................... 11 Murphy v. United States, 121 F. Supp. 2d 21 (D.D.C. 2000) ................................................. 10, 12 Sexton v. United States, 832 F.2d 629 (D.C. Cir. 1987) ............................................................... 13 Sloan v. Urban Tile Servs., Inc., 689 F. Supp. 2d 94 (D.D.C. 2010) ............................................ 14 Taylor v. FDIC, 132 F.3d 753 (D.C. Cir.1997) .............................................................................. 5 United States v. Kubrick, 444 U.S. 111 (1979) ............................................................................. 13 United States v. Masferrer, 514 F.3d 1158 (11th Cir. 2008) ...................................................... 2, 3 Wolf v. Regardie, 553 A.2d 1213 (D.C. App. 1989)..................................................................... 15 Woodruff v. DiMario, 197 F.R.D. 191 (D.D.C. 2000) .................................................................... 6 Statutes 12 U.S.C. § 1818 ........................................................................................................................... 16 28 U.S.C. § 2401(b) ...................................................................................................................... 13 28 U.S.C. § 2680(h) ................................................................................................................ 10, 13 5 U.S.C. § 504 ................................................................................................................................. 4 Rules Federal Rule of Civil Procedure 12(b)(1) ................................................................................. 5, 15 Federal Rule of Civil Procedure 12(b)(6) ................................................................................. 6, 15 Case 1:12-cv-01130-CKK Document 63 Filed 10/14/16 Page 4 of 20 1 INTRODUCTION This matter is on remand following the D.C. Circuit’s reversal of the order dismissing Carlos Loumiet’s claims under the Federal Tort Claims Act (“FTCA”) pursuant to the FTCA’s discretionary function exception. As discussed more fully below, Loumiet’s Complaint fails to allege a plausible constitutional violation. Consequently, Loumiet has not defeated application of the FTCA’s discretionary function exception, and the United States retains sovereign immunity against Loumiet’s federal tort claims. In addition, Loumiet’s abuse of process and malicious prosecution claims are barred by the FTCA’s “law enforcement proviso.” Finally, Loumiet’s invasion of privacy claim remains barred by the statute of limitations for the reasons stated in this Court’s May 28, 2015 Memorandum Opinion. Nothing in the D.C. Circuit’s decision has changed the analysis with respect to the untimeliness of Loumiet’s invasion of privacy claim. However, even if his claim were timely, it fails as a matter of law. For these reasons, the Court should grant the United States’ motion to dismiss Loumiet’s FTCA claims. FACTUAL BACKGROUND The Adjusted Price Trades In September 1999, OCC examiners discovered that Hamilton Bank had engaged in “adjusted price trades” of debt instruments without properly recognizing the losses. Complaint (“Compl.”) ¶ 26; Loumiet v. Office of Comptroller of Currency, 650 F.3d 796, 797-98 (D.C. Cir. 2011). The Eleventh Circuit summarized the transactions in its opinion affirming the criminal conviction of Hamilton Bank’s Chairman and CEO. Beginning in 1997, the bank invested in approximately $22 million worth of Russian debt instruments (“Russian assets”), which dramatically lost value during the summer of 1998. In order to conceal this loss, Masferrer and his co- conspirators allegedly devised a scheme that would enable Hamilton Bank to liquidate its Russian assets at full face value through ‘ratio swaps.’ Ratio swaps are exchanges of assets in which the prices of the swapped items are deemed to be Case 1:12-cv-01130-CKK Document 63 Filed 10/14/16 Page 5 of 20 2 at face value, with the difference between the face and fair market value of the seller’s asset offset by a similar disparity in the asset received in return…. Masferrer swapped the Russian assets in exchange for other debt instruments, but knowingly refused to record the swaps as related transactions. As a result, it appeared that Hamilton Bank managed to sell its Russian assets at face value, thereby hiding their highly discounted sales prices. United States v. Masferrer, 514 F.3d 1158, 1160-61 (11th Cir. 2008). In April 2000, the OCC issued a temporary cease-and-desist order requiring Hamilton Bank to take remedial measures. Loumiet, 650 F.3d at 798. The bank adopted procedures to prevent future adjusted price trades and amended its regulatory reports to reflect the losses. Compl. ¶ 26; Loumiet, 650 F.3d at 798. The OCC also informed the bank’s outside auditor Deloitte and Touche (“Deloitte”), that it suspected bank officers had knowingly engaged in the adjusted price trades. Compl. ¶ 27; Loumiet, 650 F.3d at 798. At Deloitte’s request, the bank’s Audit Committee retained Greenberg Traurig, LLP (“Greenberg”), to investigate whether bank executives intentionally misled Deloitte in the course of auditing the bank’s financial statements. Compl. ¶ 30; Loumiet, 650 F.3d at 798. Greenberg, led by Loumiet, reviewed documents, interviewed bank executives, and issued a report to the Audit Committee on November 15, 2000 (“November Report”). Compl. ¶¶ 28-29; Loumiet, 650 F.3d at 798. The November Report found “no convincing evidence” that executives “intentionally misled” Deloitte or the Audit Committee. Compl. ¶ 30; Loumiet, 650 F.3d at 798. In January 2001, the OCC sent Loumiet a letter responding to the November Report. Compl. ¶ 36; Loumiet, 650 F.3d at 798. The letter informed Loumiet that the OCC had obtained sworn testimony from an executive at one of the counterparties to Hamilton in the adjusted price transactions. Compl. ¶ 36; Loumiet, 650 F.3d at 798. According to the OCC, this individual testified that Hamilton’s executives knowingly executed the adjusted price trades—thus, contradicting the November Report. Compl. ¶ 36; Loumiet, 650 F.3d at 798. The OCC also Case 1:12-cv-01130-CKK Document 63 Filed 10/14/16 Page 6 of 20 3 raised several items tending to show that executives at the bank knowingly participated in the unlawful transactions. Compl. ¶ 37; Loumiet, 650 F.3d at 798. In March 2001, Loumiet responded to the OCC’s letter in a follow-up report to the Audit Committee (“March Report”). Compl. ¶¶ 42-43; Loumiet, 650 F.3d at 798. In his March Report, Loumiet restated his earlier conclusion that there was insufficient evidence of the bank’s intentional involvement in, or concealment of, the adjusted price trades. Compl. ¶¶ 42-43; Loumiet, 650 F.3d at 798. On March 26, 2001, Loumiet wrote to the Treasury Secretary and Inspector General, complaining about the OCC’s enforcement action against the bank. Compl. ¶ 49. Loumiet requested that the Office of Inspector General (“OIG”) investigate what he characterized as “highly unusual and disturbing” behavior by OCC staff, including allegations that OCC examiners made racist comments in dealing with Hamilton’s Hispanic employees. Id. ¶¶ 46-49. In April 2001, Loumiet sent the Treasury Secretary and the OIG a follow-up letter, further criticizing the OCC’s regulatory actions. Id. ¶ 50. On July 18, 2001, the Inspector General notified Loumiet that the OIG had considered the information and arguments he presented, and reached the conclusion that there was no basis for an OIG investigation. On January 11, 2002, after determining that Hamilton Bank was operating in an unsafe and unsound manner, the OCC closed the bank and appointed the Federal Deposit Insurance Corporation as its receiver. Compl. ¶ 57; Loumiet, 650 F.3d at 798. A grand jury subsequently indicted three of the bank’s senior officers on fraud charges related to the adjusted price trades. See Masferrer, 514 F.3d at 1160-61. The bank’s President and CFO were sentenced to 28 months in prison; the bank’s CEO was convicted and sentenced to 30 years in prison. Id. at 1161. Commencement of the Enforcement Action against Loumiet On November 6, 2006, the OCC initiated an administrative enforcement proceeding Case 1:12-cv-01130-CKK Document 63 Filed 10/14/16 Page 7 of 20 4 against Loumiet 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, 650 F.3d at 798-99. The action, brought by the OCC’s Enforcement and Compliance Division, charged that Loumiet was an “institution affiliated party” who, as a part of his role in the investigation of Hamilton, had “knowingly or recklessly … breach[ed his] fiduciary duty,” and as a result “caused or [was] likely to cause … a significant adverse effect on” the Bank. Loumiet, 650 F.3d at 799 (quoting 12 U.S.C. § 1813(u)(4)). Among other sanctions, the OCC sought a $250,000 civil penalty against Loumiet. Compl. ¶ 80. Loumiet alleges that during the ensuing three-week bench trial, the Individual Defendants aggressively pressed unsubstantiated charges and made false statements to the press covering the proceeding. Id. ¶ 15. Loumiet further alleges that the Individual Defendants violated various standards of professional conduct in pursuing this action, including concealing evidence. Id. Ultimately, on June 18, 2008, an Administrative Law Judge (“ALJ”) recommended dismissal of the OCC’s charges. Compl. ¶ 16. On July 27, 2009, the Comptroller, reviewing the ALJ’s recommendation, agreed that dismissal of the claims against Loumiet was appropriate, but on different grounds from the ALJ. Id. On August 26, 2009, following the Comptroller’s dismissal of the administrative proceeding, Loumiet filed an application with the ALJ for attorney’s fees under the Equal Access to Justice Act (“EAJA”), 5 U.S.C. § 504. Compl. ¶ 17; Loumiet, 650 F.3d at 799. On July 20, 2010 the ALJ issued a recommended decision denying the application. Id. Loumiet appealed the denial of his EAJA claim to the D.C. Circuit, which reversed the agency’s determination, concluding that “the Comptroller was not ‘substantially justified’ in bringing the underlying administrative proceedings against Loumiet.” Loumiet, 650 F.3d at 797. Case 1:12-cv-01130-CKK Document 63 Filed 10/14/16 Page 8 of 20 5 On July 20, 2011, Loumiet presented his administrative claim to the OCC, demanding $4 million in damages and other relief. Compl. ¶¶ 16, 110. The OCC denied his claim on January 9, 2012, and Loumiet subsequently commenced this action on July 9, 2012. Id. LEGAL STANDARD A motion to dismiss under Federal Rule of Civil Procedure 12(b)(1) “presents a threshold challenge to the Court’s jurisdiction,” and thus “the Court is obligated to determine whether it has subject-matter jurisdiction in the first instance.” Curran v. Holder, 626 F. Supp. 2d 30, 32 (D.D.C. 2009) (internal citation and quotation marks omitted). When reviewing a motion to dismiss pursuant to Rule 12(b)(1), the Court accepts as true all well-plead factual allegations in the complaint. Leatherman v. Tarrant Cnty. Narcotics Intelligence & Coordination Unit, 507 U.S. 163, 164 (1993). However, the court is not bound to “accept bare conclusory allegations as fact.” Taylor v. FDIC, 132 F.3d 753, 762 (D.C. Cir.1997). Under Rule 12(b)(1), it is “presumed that a cause lies outside [the federal courts’] limited jurisdiction,” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994), unless the plaintiff establishes by a preponderance of the evidence that the Court possesses jurisdiction, see, e.g., Hollingsworth v. Duff, 444 F. Supp. 2d 61, 63 (D.D.C. 2006). Therefore, the plaintiff’s “factual allegations in the complaint ... will bear closer scrutiny in resolving a 12(b)(1) motion than in resolving a 12(b)(6) motion for failure to state a claim.” Grand Lodge of Fraternal Order of Police v. Ashcroft, 185 F. Supp. 2d 9, 13-14 (D.D.C. 2001) (internal citation and quotation marks omitted). In reviewing the defendants’ motion to dismiss, the Court may consider the facts alleged in the complaint, any documents attached to or referenced in the complaint, matters of which the court may take judicial notice, and matters of public record. See EEOC v. St. Francis Xavier Parochial Sch., 117 F.3d 621, 624 (D.C. Cir.1997); Marshall County Health Care Auth. Case 1:12-cv-01130-CKK Document 63 Filed 10/14/16 Page 9 of 20 6 v. Shalala, 988 F.2d 1221, 1226 n. 6 (D.C. Cir.1993). In addition, the Court “may consider materials outside of the pleadings.” Jerome Stevens Pharm., Inc. v. Federal Dep’t of Agriculture, 402 F.3d 1249, 1253 (D.C. Cir.2005). A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) tests whether the plaintiff has properly stated a claim upon which relief may be granted. Woodruff v. DiMario, 197 F.R.D. 191, 193 (D.D.C. 2000). “Although detailed factual allegations are not necessary to withstand a Rule 12(b)(6) motion to dismiss, … a plaintiff must furnish more than labels and conclusions or a formulaic recitation of the elements of a cause of action.” Hinson ex rel. N.H. v. Merritt Educ. Ctr., 521 F. Supp. 2d 22, 27 (D.D.C. 2007) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)) (internal quotation marks and alterations omitted). “To survive a motion to dismiss, a 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). ARGUMENT I. The Complaint Fails to State a Plausible Constitutional Violation, and Therefore Loumiet Has Not Defeated Application of the Discretionary Function Exception. The D.C. Circuit has held “that the discretionary-function exception does not categorically bar FTCA tort claims where the challenged exercise of discretion allegedly exceeded the government’s authority to act.” Loumiet v. United States, 828 F.3d 935, 930 (D.C. Cir. 2016). To overcome the discretionary function exception, however, Loumiet must still shoulder the burden alleging facts sufficient to state a plausible constitutional violation. See Iqbal, 556 U.S. at 679. With regard to his claims under the First and Fifth Amendments, Loumiet has failed to state a plausible constitutional violation. Case 1:12-cv-01130-CKK Document 63 Filed 10/14/16 Page 10 of 20 7 A. The Complaint fails to allege sufficient facts to state a plausible claim for retaliatory prosecution under the First Amendment. The elements of a retaliatory prosecution claim are “first, that the conduct allegedly retaliated against or sought to be deterred was constitutionally protected, and, second, that the State’s bringing of the criminal prosecution was motivated at least in part by a purpose to retaliate for or to deter that conduct.” Haynesworth v. Miller, 820 F.2d 1245, 1256 n. 93 (D.C. Cir.1987). If a plaintiff satisfies the first two elements, the court should then consider whether the government “has shown by a preponderance of the evidence that it would have reached the same decision as to whether to prosecute even had the impermissible purpose not been considered.” Id. In this case, Loumiet fails to allege facts sufficient to permit the Court to draw a reasonable inference that OCC officials commenced an enforcement action to retaliate against him for the exercise of his First Amendment rights. While Loumiet alleges “on information and belief” that OCC officials were “embarrassed” and “angered” by his letters to the Inspector General, see Compl. ¶¶ 52, 56, 61, nowhere does the Complaint allege any actual facts to support that allegation. No facts are alleged showing that the defendants agreed to retaliate against Loumiet for his public criticism of the OCC. Nor does the Complaint allege any facts indicating that an administrative enforcement proceeding was the agreed upon vehicle for pursuing the alleged retaliatory motive. At most, the Complaint’s allegations—premised solely “on information and belief”—allow the “sheer possibility” that the defendants pursued a retaliatory agenda against Loumiet. Iqbal, 556 U.S. at 678. However, the plausibility standard requires a complaint to plead more than “facts that are ‘merely consistent with’ a defendant’s liability,” Id. (quoting Bell Atlantic v. Twombly, 550 U.S. 544, 557 (2007)). Instead, where the plaintiff’s allegations “do not permit the court to infer more than the mere possibility of misconduct, the Case 1:12-cv-01130-CKK Document 63 Filed 10/14/16 Page 11 of 20 8 complaint has alleged—but it has not shown”—“that the pleader is entitled to relief,” Id. at 679, and the complaint must be dismissed. Loumiet’s repeated “information and belief” allegations are particularly telling. The Iqbal/Twombly pleading standard “does not prevent a plaintiff from pleading facts alleged upon information and belief where the facts are peculiarly within the possession and control of the defendant, or where the belief is based on factual information that makes the inference of culpability plausible.” Jefferson v. Collins, 905 F. Supp. 2d 269, 288-89 (D.D.C. 2012) (citing Arista Records, LLC v. Doe 3, 604 F.3d 110, 120 (2d Cir. 2010)). In other words, merely invoking the phrase “information and belief” does not release the plaintiff from his burden to allege enough underlying facts to allow a plausible inference of liability. Twombly itself confirms this, as the complaint in that case alleged an antitrust conspiracy based on “information and belief,” but nevertheless failed because the complaint did not support the “information and belief” allegation with sufficient subsidiary factual allegations. Twombly, 550 U.S. at 551, 556- 57. Here, Loumiet has not pleaded any factual information on which he purports to base his allegation, “on information and belief,” that the Individual Defendants were “embarrassed,” “angered,” and accordingly conspired to find some means to retaliate against him. The Complaint thus fails to allege a plausible First Amendment retaliatory prosecution claim, and the FTCA’s discretionary function exception therefore is not overcome. B. Loumiet fails to state a due process claim under the Fifth Amendment. Loumiet’s Fifth Amendment claim similarly fails to overcome application of the discretionary function exception because Loumiet fails to state a procedural or due process claim under the Fifth Amendment. To prevail on a procedural due process claim, Loumiet must establish: (1) a constitutionally protected interest in life, liberty or property; (2) a governmental Case 1:12-cv-01130-CKK Document 63 Filed 10/14/16 Page 12 of 20 9 deprivation of that interest; and (3) the constitutional inadequacy of procedures accompanying the deprivation. See Lehr v. Robertson, 463 U.S. 248, 256 (1983). In this case, Loumiet’s due process claim falters at the third element. Loumiet cannot reasonably contend that the comprehensive administrative and judicial remedies available under the FIRREA were inadequate to protect his interests. Indeed, Loumiet not only had access to those remedies, but he successfully invoked them in the administrative proceeding and recovered attorney’s fees as the prevailing party. Second, to the extent Loumiet intends to assert a substantive due process claim under the Fifth Amendment, that claim also fails as a matter of law. Notably, Loumiet’s due process claim in Count VII merely restates his First Amendment retaliation claim in Count VI. The claims are identical—word for word. Compare Compl. ¶¶ 138-39 with id. ¶¶ 141-42. The Supreme Court has declared that “[w]here a particular Amendment ‘provides an explicit textual source of constitutional protection’ against a particular sort of government behavior, ‘that Amendment, not the more generalized notion of ‘substantive due process,’ must be the guide for analyzing [those] claims.’” Albright v. Oliver, 510 U.S. 266, 273 (1994) (quoting Graham v. Connor, 490 U.S. 386, 395 (1989)). In this case, the First Amendment provides an “explicit textual source of constitutional protection” against governmental restriction of protected speech, such that the First Amendment, and “not the more generalized notion of ‘substantive due process’” should be the guide for analyzing what is fundamentally a retaliatory prosecution claim. Id. Therefore, Loumiet cannot state a substantive due process claim under the Fifth Amendment. Accordingly, for the foregoing reasons, Loumiet has failed to state a plausible constitutional claim so as to overcome the FTCA’s discretionary-function exception. Case 1:12-cv-01130-CKK Document 63 Filed 10/14/16 Page 13 of 20 10 II. Loumiet’s Abuse of Process and Malicious Prosecution Claims Are Barred by the FTCA’s “Law Enforcement Proviso.” Counts III and IV must be dismissed because the OCC employees are not “investigative or law enforcement officers” within the meaning of 28 U.S.C. § 2680(h). Counts III and IV of the complaint assert tort claims against the United States for abuse of process and malicious prosecution. The FTCA constitutes a limited waiver of the government’s immunity from tort claims, and 28 U.S.C. § 2680(h) provides that this waiver of sovereign immunity “shall not apply to” [a]ny claim arising out of assault, battery, false imprisonment, false arrest, malicious prosecution, abuse of process, libel, slander, misrepresentation, deceit, or interference with contract rights: Provided, That, with regard to acts or omissions of investigative or law enforcement officers of the United States Government, the [FTCA] shall apply to any claim arising … out of assault, battery, false imprisonment, false arrest, abuse of process, or malicious prosecution. 28 U.S.C. § 2680(h) (emphasis added). This provision is known as the FTCA’s “law enforcement proviso,” and its purpose is to provide a remedy against the federal government for victims of federal law enforcement abuses. As indicated by the language of § 2680(h), the United States retains its immunity from abuse of process and malicious prosecution claims unless those torts are committed by federal “investigative or law enforcement officers….” 28 U.S.C. § 2680(h). Importantly, “[f]or the purpose of [§ 2680(h), ‘investigative or law enforcement officer’ means any officer of the United States who is empowered by law to execute searches, to seize evidence, or to make arrests for violations of Federal law.” Id. Courts should not “broaden the law enforcement focus of the proviso to reach situations that have nothing to do with the unlawful exercise of police power.” Murphy v. United States, 121 F. Supp. 2d 21, 24 (D.D.C. 2000). Although Loumiet bears the burden of establishing the Court’s subject matter Case 1:12-cv-01130-CKK Document 63 Filed 10/14/16 Page 14 of 20 11 jurisdiction, he fails to allege any facts showing that the OCC employees are “investigative or law enforcement officers” under the FTCA. Of the four individual defendants in this action, Loumiet only alleges that two—Ronald Schneck and Gerard Sexton—are covered by the law enforcement proviso. See Compl. ¶¶ 5-6. By contrast, there is no allegation anywhere in the complaint that Mike Rardin and Lee Straus are investigative or law enforcement officers. Loumiet cannot predicate FTCA liability on the alleged conduct of Schneck and Sexton for at least three reasons. First, courts have repeatedly held that bank regulators and government attorneys are not “investigative or law enforcement officers” under § 2680(h). The decision in Biase v. Kaplan, 852 F. Supp. 268 (D.N.J. 1994), is directly on point. In that case, a shareholder in a savings and loan association filed a complaint against the Office of Thrift Supervision (“OTS”) and several OTS employees, alleging that the defendants engaged in a campaign of harassment and retaliation against him. The plaintiff brought an FTCA claim against the United States on the theory that the conduct of the individual defendants—including OTS attorneys, administrators, and bank examiners—constituted abuse of process. The court dismissed the claim for lack of subject matter jurisdiction, holding that the OTS employees were not “investigative or law enforcement officers” under § 2680(h). Specifically, the court reasoned that: [The plaintiff] has not cited, and there does not appear to exist, any legal authority vested in the OTS to “execute searches, to seize evidence, or to make arrests for violations of Federal law.” The Individual Defendants, the only OTS employees named in the Amended Complaint, are, as indicated, attorneys, administrators and bank examiners; none are “law enforcement officers” as that term is defined in section 2680(h). Such persons have, in fact, been held not to constitute “law enforcement officers” under section 2680(h). Biase, 852 F. Supp. at 281-82 (collecting cases). Similarly, courts in this Circuit have held that federal government attorneys are not “investigative or law enforcement officers” under § 2680(h). See Moore v. United States, 213 F.3d 705, 713 n.7 (D.C. Cir. 2000); Gray v. Bell, 542 Case 1:12-cv-01130-CKK Document 63 Filed 10/14/16 Page 15 of 20 12 F. Supp. 927, 933 (D.D.C. 1982). Loumiet therefore cannot rely on the alleged acts or omissions of bank examiners and government attorneys to pursue claims for abuse of process and malicious prosecution against the United States. Second, Loumiet does not actually allege that Schneck and Sexton are law enforcement officers. He merely claims that they are “investigative” officers covered by § 2680(h). See Compl. ¶¶ 5-6. Loumiet, it seems, is attempting to thwart the “law enforcement” focus of the law enforcement proviso. Congress, however, intended the term “investigative” in § 2680(h) “to refer to the kinds of ‘investigative’ activities that are carried out by law enforcement officers.” Employers Ins. of Wausau v. United States, 815 F. Supp. 255, 259 (N.D. Ill. 1993) (emphasis added). The term is not used “just in the generic sense … of simply looking into and thinking about something in the process of reaching a decision.” Murphy, 121 F. Supp. 2d at 25 (citation omitted). As a result, Loumiet’s conclusory allegation that Schneck and Sexton are “investigative” officers fails to bring them within the scope of § 2680(h). Finally, the Court is not bound by Loumiet’s conclusory allegation that Schneck and Sexton are “investigative officer[s] as that term is used in 28 U.S.C. 2680(h) because, at all relevant times, [they] had the authority to execute searches and to seize evidence.” Compl. ¶¶ 5- 6. Again, “the Court need not accept inferences or conclusory allegations that are unsupported by the facts set forth in the complaint.” Gustave-Schmidt, 226 F. Supp. 2d at 196 (emphasis added). And, in comparison to resolving a 12(b)(6) motion, the Court must give “closer scrutiny” to Loumiet’s factual allegations in resolving this 12(b)(1) motion, since Loumiet has the burden of establishing the Court’s jurisdiction. Id. at 195. In his Complaint, Loumiet simply parrots the legal test for liability under § 2680(h). There are no facts alleged in the Complaint—and Loumiet fails to identify any legal authority—to support the allegation that OCC attorneys and bank Case 1:12-cv-01130-CKK Document 63 Filed 10/14/16 Page 16 of 20 13 regulators are authorized to make arrests, execute searches, or seize evidence. Accordingly, Counts III and IV must be dismissed. III. Loumiet’s Invasion of Privacy Claim is Barred by the Statute of Limitations and is Not Saved by the Continuing Tort Doctrine. Loumiet’s FTCA claim for invasion of privacy remains barred by the two-year statute of limitations for the same reasons identified in this Court’s May 28, 2015 Memorandum Opinion. See Loumiet v. United States, 106 F. Supp. 3d 219 (D.D.C. 2015). Nothing in the D.C. Circuit’s decision changed the analysis with respect to the untimeliness of this claim. Under the FTCA, a tort claim against the United States is barred unless it is presented in writing to the appropriate federal agency “within two years after such claim accrues….” 28 U.S.C. § 2401(b). Federal law governs when a claim accrues under the FTCA. Sexton v. United States, 832 F.2d 629, 633 n.4 (D.C. Cir. 1987). A claim under the FTCA accrues the moment the plaintiff becomes aware that he has suffered an injury and has sufficient information to know its cause. United States v. Kubrick, 444 U.S. 111, 120 (1979). Mr. Loumiet presented his administrative claim to the OCC on July 20, 2011; therefore, any claim that accrued prior to July 20, 2009 is time-barred. The Court rejected Loumiet’s argument that the continuing tort doctrine applies to his invasion of privacy claim. In particular, the Court observed that even assuming the continuing tort doctrine applies, only one of the four statements Loumiet relies upon in support of his claim occurred within the limitations period. Loumiet, 106 F. Supp. 3d at 225. Specifically, Loumiet claims that the OCC invaded his privacy by publishing 1. the November 6, 2006 Notice of Charges, 2. an October 3, 2007 press release, 3. statements on the eve of Loumiet’s October 2007 trial; and Case 1:12-cv-01130-CKK Document 63 Filed 10/14/16 Page 17 of 20 14 4. statements contained in the OCC’s Final Decision filed on July 27, 2009. As the Court correctly observed, the first three statements occurred outside the statutory period and thus cannot operate to save Loumiet’s invasion of privacy claim. Id. With regard to the OCC’s Final Decision, the Court rightly refused to consider statements contained in this document as Count II—Loumiet’s invasion of privacy claim—nowhere “mentions the Final Decision as a medium through which private facts about Plaintiff were made public.” Id. The Court rejected Loumiet’s attempt to effectively amend his Complaint through his opposition briefing. Id. (citing Sloan v. Urban Tile Servs., Inc., 689 F. Supp. 2d 94, 114 (D.D.C. 2010)). For these reasons, the invasion of privacy claim is barred by the statute of limitations and the Court thus lacks subject matter jurisdiction over this claim. IV. The Complaint Fails to Allege Facts Sufficient to Establish Subject Matter Jurisdiction over Loumiet’s Invasion of Privacy Claim. The Complaint alleges the following in support of Mr. Loumiet’s invasion of privacy claim: • “The OCC and Individual Defendants invaded Mr. Loumiet’s privacy by making public through the Notice of Charges and their statements to the press and press releases, private facts that would not otherwise have become public concerning Mr. Loumiet’s representation of Hamilton.” Compl. ¶ 118. • “The facts disclosed would be offensive to any reasonable person.” Id. ¶ 119. • “Given that the OCC knew its charges against Mr. Loumiet were without merit from the outset, no privilege attaches to its actions.” Id. ¶ 120. Nowhere does the Complaint allege what “private” facts about Mr. Loumiet’s representation of Hamilton Bank were disclosed by the OCC. Nowhere does the Complaint allege how public disclosure of these facts would have been “offensive” to a reasonable person. There is not one well-pled fact in the Complaint regarding statements to the press that invaded Loumiet’s right to privacy. To the contrary, the allegations in paragraphs 118 through 120 of the Case 1:12-cv-01130-CKK Document 63 Filed 10/14/16 Page 18 of 20 15 Complaint are precisely the kind of “[t]hreadbare recitals of a cause of action’s elements” and “conclusory statements” that fail to state a claim for relief. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). Since a district court “must give the plaintiff’s factual allegations closer scrutiny when resolving a Rule 12(b)(1) motion than would be required for a Rule 12(b)(6) motion for failure to state a claim,” Bailey v. WMATA, 696 F. Supp. 2d 68, 71 (D.D.C. 2010), the Complaint’s failure to allege facts specifying the statements that supposedly constituted an invasion of privacy requires the dismissal of Mr. Loumiet’s claim for lack of subject matter jurisdiction. Regarding Loumiet’s claim that the alleged disclosure of his representation of Hamilton Bank was itself a “private fact” and is actionable as an invasion of privacy, this theory fails for several reasons. A plaintiff alleging invasion of privacy must allege facts satisfying five essential elements: (1) publicity, (2) without waiver or privilege, (3) of private facts, (4) in which the public has no legitimate concern, (5) which would be highly offensive to a reasonable person. Wolf v. Regardie, 553 A.2d 1213, 1220 (D.C. App. 1989). As for publicity, federal law provides that all enforcement hearings are open to the public unless the Comptroller determines that a public hearing would be contrary to the public interest. See 12 U.S.C. § 1818(u)(2); 12 C.F.R. § 19.33. The Notice of Charges, testimony and evidence, and argument offered by the parties are all a matter of public record. In addition, the OCC is required by statute to publicly disclose all final orders and enforcement agreements. See 12 U.S.C. § 1818(u)(1)(B). Since the OCC is required by law to make this disclosure, the agency’s disclosure of these materials cannot give rise to liability under the FTCA. Second, even assuming arguendo that Loumiet’s representation itself constituted a “private fact,” there are no allegations in the Complaint identifying how disclosure of Loumiet’s representation of Hamilton Bank Case 1:12-cv-01130-CKK Document 63 Filed 10/14/16 Page 19 of 20 16 would be considered “highly offensive” to a reasonable person. Third, prosecutions and other judicial proceedings “are without question events of legitimate concern to the public,” Cox Broadcasting Corp. v. Cohn, 420 U.S. 469, 492 (1975), and therefore the basic facts underlying the enforcement action — including Loumiet’s retention to investigate claims of wrongdoing at Hamilton Bank — were a matter of public concern. Indeed, by requiring the OCC to publicly disclose final orders and enforcement agreements, Congress itself has indicated that enforcement actions are matters of public concern. Finally, in the context of the OCC’s enforcement proceeding, the disclosure of Loumiet’s representation of Hamilton Bank would have been privileged as incident to the agency’s duty to enforce the laws necessary to ensure the safety and soundness of national banks. CONCLUSION For the foregoing reasons, the United States requests that the Court dismiss Loumiet’s FTCA claims for lack of subject matter jurisdiction and failure to state a valid claim for relief. Dated: October 14, 2016 Respectfully Submitted, BENJAMIN C. MIZER Principal Deputy Assistant Attorney General C. SALVATORE D’ALESSIO, JR. Acting Director, Torts Branch ANDREA W. MCCARTHY Senior Trial Counsel, Torts Branch /S/ REGINALD M. SKINNER REGINALD M. SKINNER Trial Attorney, Torts Branch United States Department of Justice P.O. Box 7146, Ben Franklin Station Washington, D.C. 20044 Tel: (202) 616-3111 Counsel for the Defendants Case 1:12-cv-01130-CKK Document 63 Filed 10/14/16 Page 20 of 20