Loumiet v. United States of America

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

CARLOS LOUMIET,

Plaintiff,

v. Civil Action No. 12-1130 (CKK)

UNITED STATES OF AMERICA, et al.,

Defendants.

MEMORANDUM OPINION

(June 13, 2017)

Plaintiff Carlos Loumiet filed suit against the United States Government for the

actions of its agency, the Office of the Comptroller of the Currency (“OCC”), under the

Federal Tort Claims Act (“FTCA”), and against Defendants Michael Rardin, Lee Straus,

Gerard Sexton, and Ronald Schneck (collectively, the “Individual Defendants”), alleging

claims under Bivens v. Six Unknown Named Agents of Fed. Bureau of Narcotics, 403 U.S.

388 (1971), as well as various state-law tort claims. In a series of rulings, the Court

previously dismissed all of Plaintiff’s claims at the motion to dismiss stage. Plaintiff

appealed to the United States Court of Appeals for the District of Columbia Circuit (“D.C.

Circuit”), which remanded for this Court to consider two issues: first, as to Plaintiff’s FTCA

claims, “whether [Plaintiff’s] complaint plausibly alleges that the OCC’s conduct exceeded

the scope of its constitutional authority so as to vitiate discretionary-function immunity;”

and second, as to Plaintiff’s Bivens claims, “the remaining defenses raised but not yet

decided in the district court.” Loumiet v. United States, 828 F.3d 935, 946, 949 (D.C. Cir.

2016) (“Loumiet IV”). Following remand, the Court ordered the parties to brief these and

any other pertinent legal issues. Sept. 29, 2016 Order, ECF No. 61.

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Pending before the Court are the Individual Defendants’ [62] Motion to Dismiss

and the United States’ [63] Motion to Dismiss. Upon consideration of the pleadings, 1 the

relevant legal authorities, and the record as a whole, the Court GRANTS IN PART AND

DENIES IN PART the Individual Defendants’ [62] Motion to Dismiss, and GRANTS IN

PART AND DENIES IN PART the United States’ [63] Motion to Dismiss. Plaintiff’s First

Amendment Bivens claim for retaliatory prosecution shall proceed against Defendants

Rardin, Schneck, and Sexton. Plaintiff’s Fifth Amendment Bivens claim, and all claims

against Defendant Straus are DISMISSED WITHOUT PREJUDICE. Pursuant to the

Westfall Act, the state-law tort claims against the Individual Defendants are

CONVERTED to FTCA claims against the United States. Plaintiff’s FTCA claims against

the United States may proceed, except that the abuse of process (Count III) and malicious

prosecution (Count IV) claims are DISMISSED WITHOUT PREJUDICE, leaving only

the claims for intentional infliction of emotional distress (Count I), invasion of privacy

(Count II), negligent supervision (Count V), and civil conspiracy (Count VIII).

I. BACKGROUND

The Court previously detailed the factual background of this matter in its prior

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The Court’s consideration has focused on the following documents:

• Individual Defs.’ Mot. to Dismiss and Statement of P&A in Supp., ECF No. 62

(“Ind. Defs.’ Mem.”);

• United States’ Mot. to Dismiss and Statement of P&A in Supp., ECF No. 63 (“U.S.

Mem.”);

• Carlos Loumiet’s Opp’n to the Individual Defs.’ Mot. to Dismiss under Fed. R. Civ.

P. 12(b)(6) and the United States’ Mot. to Dismiss under Fed. R. Civ. P. 12(b)(6)

and 12(b)(1), ECF No. 64 (“Opp’n Mem.”);

• Reply Mem. of P&A in Supp. of the Defs.’ Mot. to Dismiss, ECF No. 66 (“Reply

Mem.”).

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rulings, familiarity with which is assumed. 2 See Loumiet v. United States, 968 F. Supp. 2d

142, 145 (D.D.C. 2013) (Loumiet I). To the extent particular factual allegations are relevant

to the Court’s analysis of the pending motions, they are detailed below.

II. LEGAL STANDARD

A. Motion to Dismiss for Lack of Subject-Matter Jurisdiction

To survive a motion to dismiss pursuant to Federal Rule of Civil Procedure

12(b)(1), Plaintiff bears the burden of establishing that the Court has subject-matter

jurisdiction over its claims. Moms Against Mercury v. FDA, 483 F.3d 824, 828 (D.C. Cir.

2007); Ctr. for Arms Control & Non-Proliferation v. Redd, No. CIV.A. 05-682 (RMC),

2005 WL 3447891, at *3 (D.D.C. Dec. 15, 2005). In determining whether there is

jurisdiction, the Court may “consider the complaint supplemented by undisputed facts

evidenced in the record, or the complaint supplemented by undisputed facts plus the court’s

resolution of disputed facts.” Coal. for Underground Expansion v. Mineta, 333 F.3d 193,

198 (D.C. Cir. 2003) (internal quotation marks omitted); see also 5B Charles Alan Wright

& Arthur R. Miller, Federal Practice & Procedure § 1350 (3d ed. 2017) (noting the “wide

array of cases from the four corners of the federal judicial system involving the district

court’s broad discretion to consider relevant and competent evidence on a motion to

dismiss for lack of subject matter jurisdiction to resolve factual issues”). “Although a court

must accept as true all factual allegations contained in the complaint when reviewing a

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The full sequence of decisions is as follows: Loumiet v. United States, 968 F. Supp. 2d

142 (D.D.C. 2013) (Loumiet I); Loumiet v. United States, 65 F. Supp. 3d 19 (D.D.C. 2014)

(Loumiet II); Loumiet v. United States, 106 F. Supp. 3d 219 (D.D.C. 2015) (Loumiet III);

Loumiet v. United States, 828 F.3d 935 (D.C. Cir. 2016) (“Loumiet IV”). In addition, the

D.C. Circuit previously ruled on Plaintiff’s application for attorney fees under the Equal

Access to Justice Act (“EAJA”) in connection with his defense before the OCC, Loumiet

v. Office of Comptroller of Currency, 650 F.3d 796, 798 (D.C. Cir. 2011) (“Loumiet EAJA”).

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motion to dismiss pursuant to Rule 12(b)(1),” the 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.” Wright v. Foreign Serv. Grievance Bd., 503 F. Supp. 2d 163, 170

(D.D.C. 2007) (internal quotation marks omitted).

B. Motion to Dismiss for Failure to State a Claim

Defendants also move to dismiss the Complaint for “failure to state a claim upon

which relief can be granted” pursuant to Federal Rule of Civil Procedure 12(b)(6). “[A]

complaint [does not] suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual

enhancement.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v.

Twombly, 550 U.S. 544, 557 (2007)). Rather, a complaint must contain sufficient factual

allegations that, if accepted as true, “state a claim to relief that is plausible on its face.”

Twombly, 550 U.S. at 570. “A claim has facial plausibility when the plaintiff pleads factual

content that allows the court to draw the reasonable inference that the defendant is liable

for the misconduct alleged.” Iqbal, 556 U.S. at 678. In deciding a Rule 12(b)(6) motion, a

court may consider “the facts alleged in the complaint, documents attached as exhibits or

incorporated by reference in the complaint,” or “documents upon which the plaintiff’s

complaint necessarily relies even if the document is produced not by the plaintiff in the

complaint but by the defendant in a motion to dismiss.” Ward v. District of Columbia Dep’t

of Youth Rehab. Servs., 768 F. Supp. 2d 117, 119 (D.D.C. 2011) (internal quotation marks

omitted). The court may also consider documents in the public record of which the court

may take judicial notice. Abhe & Svoboda, Inc. v. Chao, 508 F.3d 1052, 1059 (D.C. Cir.

2007).

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III. DISCUSSION

The Court’s analysis below proceeds as follows. First, the Court finds it appropriate

to recognize a First Amendment Bivens claim for retaliatory prosecution under the

particular factual circumstances of this case. Second, the Court finds that Plaintiff has

plausibly alleged such a First Amendment Bivens claim against Defendants Rardin,

Schneck, and Sexton, and that they are not entitled to absolute prosecutorial or qualified

immunity at this procedural juncture. Nonetheless, the Court finds that Defendant Straus

is entitled to absolute prosecutorial immunity, and that any non-immunized conduct fails

to state a First Amendment retaliatory prosecution Bivens claim against him. Third, the

Court concludes that Plaintiff’s Fifth Amendment Bivens claim must be dismissed for

failure to state a claim. Fourth, the Court converts the state-law tort claims against the

Individual Defendants to FTCA claims against the United Stated. In sum, this means that

the only claims surviving with respect to the Individual Defendants are Plaintiff’s First

Amendment Bivens claims against Defendants Rardin, Schneck, and Sexton.

Turning to the FTCA claims against the United States, the Court finds first, that

discretionary-function immunity is vitiated under the circumstances of this case because

Plaintiff has plausibly alleged that the tortious conduct at issue violated a clearly

established First Amendment right against retaliatory prosecution; second, that Plaintiff’s

malicious prosecution and abuse of process claims must be dismissed because the OCC

employees at issue in this case are not “investigative or law enforcement officers” as

defined by the FTCA; and third, that Plaintiff’s invasion of privacy claim may proceed.

Accordingly, Plaintiff’s surviving FTCA claims are for intentional infliction of emotional

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distress (Count I), invasion of privacy (Count II), negligent supervision (Count V), and

civil conspiracy (Count VIII).

A. The Court Recognizes a First Amendment Bivens Claim in this Action

In Bivens, the Supreme Court of the United States created an implied cause of action

for money damages stemming from an alleged Fourth Amendment violation at the hands

of federal officials. 403 U.S. at 397. “Since Bivens, the Supreme Court has proceeded

cautiously in implying additional federal causes of action for money damages.” Meshal v.

Higgenbotham, 804 F.3d 417, 421 (D.C. Cir. 2015). The Bivens issues in this case must be

assessed in two stages, and because the Fifth Amendment claim shall be dismissed for

failure to state a claim, this analysis is limited to Plaintiff’s claim of retaliatory prosecution

in violation of his First Amendment right to free speech.

As an initial matter, the parties disagree on whether by permitting Plaintiff’s Bivens

claim to proceed, the Court would in effect recognize a cause of action unprecedented in

Bivens case law. In other words, whether this case presents a “new context.” If so, the Court

would be required to ask and answer two follow-up questions. First, whether “Congress

has provided an alternative remedy which it explicitly declared to be a substitute for

recovery directly under the Constitution and viewed as equally effective.” Carlson v.

Green, 446 U.S. 14, 18–19 (1980); Wilkie v. Robbins, 551 U.S. 537, 550 (2007) (“In the

first place, there is the question whether any alternative, existing process for protecting the

interest amounts to a convincing reason for the Judicial Branch to refrain from providing a

new and freestanding remedy in damages.”). Put differently, a Bivens remedy will

generally not be available if a comprehensive statutory scheme already exists for a plaintiff

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to seek redress of the alleged constitutional violation. Defendants concede that no such

scheme exists here. See Reply Mem. at 6.

As a result, the Court must turn to assess whether there are “any special factors

counselling hesitation before authorizing a new kind of federal litigation.” Wilkie, 551 U.S.

at 550 (quoting Bush v. Lucas, 462 U.S. 367, 378 (1983)). One such special factor “that

precludes creation of a Bivens remedy is the existence of a comprehensive remedial

scheme.” Wilson v. Libby, 535 F.3d 697, 705 (D.C. Cir. 2008). Unlike the first question—

which asks whether there is a specific, equally effective alternative remedy to the implied

cause-of-action—this “special factor” analysis is intended to isolate situations in which

“the design of a Government program suggests that Congress has provided what it

considers adequate remedial mechanisms for constitutional violations that may occur in the

course of its administration . . . .” Schweiker v. Chilicky, 487 U.S. 412, 423 (1988). As a

result, the “comprehensive remedial scheme” need not provide “complete relief” for the

specific violation at issue; rather, “the doctrine relates to the question of who should decide

whether such a remedy should be provided.” Wilson, 535 F.3d at 705 (internal quotation

marks omitted). Consequently, it is “the comprehensiveness of the statutory scheme

involved, not the ‘adequacy’ of specific remedies extended thereunder, that counsels

judicial abstention.” Spagnola v. Mathis, 859 F.2d 223, 227 (D.C. Cir. 1988). In sum, the

doctrine reflects “an appropriate judicial deference to indications that congressional

inaction has not been inadvertent.” Chilicky, 487 U.S. at 423.

Both the D.C. Circuit and Supreme Court, at least impliedly, have recognized the

existence of a Bivens implied cause-of-action for retaliatory prosecution in violation of the

First Amendment guarantee of freedom of speech. Hartman v. Moore, 547 U.S. 250, 256

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(2006) (“the law is settled that as a general matter the First Amendment prohibits

government officials from subjecting an individual to retaliatory actions, including

criminal prosecutions, for speaking out”); Moore v. Valder, 65 F.3d 189, 196 (D.C. Cir.

1995) (“Moore’s retaliatory prosecution claim, however, does allege the violation of

clearly established law.”); Haynesworth v. Miller, 820 F.2d 1245, 1255 (D.C. Cir. 1987)

(“[w]e agree that the retaliatory prosecution constitutes an actionable First Amendment

wrong”). Defendants, however, assert that this case presents a “new context” because “[n]o

court has ever extended Bivens to the conduct of government officials engaged in oversight

of the safety and soundness of the national banking system.” Ind. Defs.’ Mem at 7. The

D.C. Circuit in Meshal noted the difficulty in distinguishing various Bivens actions on the

basis of context: “viewed at a sufficiently high level of generality, any claim can be

analogized to some other claim for which a Bivens action is afforded, just as at a sufficiently

high level of particularity, every case has points of distinction.” 804 F.3d at 424 (internal

quotation marks omitted). Ultimately, Meshal defined “context” by reference to its

common usage in law: the word “reflects[s] a potentially recurring scenario that has similar

legal and factual components.” Id. (emphasis added) (internal quotation marks omitted).

Although Defendants seek to distinguish the prosecutorial action in this case on the

basis that it was directed by a Federal agency overseeing the banking industry, they have

failed to explain why that distinction is at all relevant to the case law recognizing claims

against Federal agents for retaliatory prosecution. For instance, there is no indication in the

record that Plaintiff’s prosecution was motivated out of a particular concern for the safety

of the banking system. In fact, the allegations of the Complaint portray a prosecution that

was levied against an individual with relatively little involvement in the perpetuation or

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concealment of the illicit activity subject to the OCC’s regulatory action, and was instead,

according to the allegations, primarily motivated by Plaintiff’s complaints regarding

certain alleged racial comments made by OCC staff, and the aggressive nature of the

OCC’s investigation into Hamilton Bank. See infra at 26–27. Moreover, upon

administrative review, the D.C. Circuit found that the record did not support a finding that

Plaintiff’s prosecution was justified. See Loumiet EAJA, 650 F.3d at 800. Accordingly,

while the fact that the retaliatory prosecution was brought by a banking regulator is a point

of distinction, the salient legal and factual matters are similar to those at issue in the

controlling Supreme Court and D.C. Circuit cases regarding retaliatory prosecution. As in

Hartman and Moore, the allegations here suggest that employees of a Federal entity (there,

the United States Postal Service), in reprisal for speech critical of the Federal entity,

directed a meritless investigation and prosecution (there, the trial court determined that

there was a “complete lack of direct evidence” for the alleged crime, while here, the

presiding Administrative Law Judge (“ALJ”), the Comptroller, and the D.C. Circuit found

that the enforcement action was unwarranted, see Loumiet EAJA, 650 F.3d at 799–800).

In sum, the conduct at issue, although allegedly perpetuated by banking regulators,

plainly fits the mold of the controlling authorities wherein a Bivens cause of action has

been recognized for retaliatory prosecution at the behest of Federal officials. No doubt, the

banking regulatory arena is complex and of immense importance to the American

economy, but it can hardly be said that any Federal agency does not administer an important

facet of the American economy or society. And while the D.C. Circuit has on several

occasions refused to afford a Bivens remedy in certain sensitive policy areas, the decisions

pressed by Defendants are limited to the national security and intelligence context. See

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Reply Mem. at 3; see, e.g., Klay v. Panetta, 758 F.3d 369 (D.C. Cir. 2014). Certainly, it is

conceivable that a factual context related to the banking industry could present

circumstances that distinguish it from other cases in which a Bivens remedy for retaliatory

prosecution has been recognized. The essential point here, however, is that Defendants

have not shown how their status as banking regulators is relevant to the question of whether

a Bivens remedy should be recognized under the particular factual circumstances of this

case, wherein any banking law or regulatory issues seem, accepting the allegations as true,

completely peripheral to the challenged conduct (i.e., the bringing of the enforcement

action).

Even assuming that this case presents a “new context,” however, the special factor

analysis does not preclude a Bivens remedy for Plaintiff’s retaliatory prosecution claim.

Defendants contend that the Financial Institutions Reform, Recovery, and Enforcement Act

(“FIRREA”), pursuant to which the OCC took enforcement action against Plaintiff, is a

“comprehensive remedial scheme” that counsels against finding an implied cause-of-action

under the factual circumstances of this case. As an initial matter, however, there is no clear

indication that Plaintiff was properly the subject of a FIRREA enforcement action. As

relevant here, that statutory scheme applies to an “institution-affiliated party” (“IAP”),

which is defined to include: “[A]ny independent contractor (including any attorney,

appraiser, or accountant) who knowingly or recklessly participates in . . . any unsafe or

unsound practice, which caused or is likely to cause more than a minimal financial loss to,

or a significant adverse effect on, the insured depository institution.” 12 U.S.C. §

1813(u)(4). The D.C. Circuit, in reviewing the denial of Plaintiff’s request for attorney fees

in connection with the enforcement action, concluded that the administrative record was

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devoid of evidence linking Plaintiff’s allegedly illicit actions (drafting two investigative

reports) with a “significant adverse effect on the Bank.” Loumiet EAJA, 650 F.3d at 799.

This accorded with the decision of the Comptroller dismissing the action against Plaintiff,

which found that the “administrative record lacked sufficient evidence that the two reports

prepared by [Plaintiff] caused, or were likely to cause, harm to the Bank that satisfies the

‘effect’ requirement.” Id. at 800. As such, the D.C. Circuit concluded that the record did

not demonstrate that the OCC’s “litigating position was justified, let alone ‘substantially’

so.” Id. Consequently, this case is brought in a posture wherein both the D.C. Circuit and

the Comptroller determined that Plaintiff did not qualify under the statutory test that

determines whether a party like Plaintiff is subject to FIRREA.

Beyond this, the case at bar is readily distinguishable from the controlling

authorities that have declined to establish a Bivens remedy due to the existence of a

comprehensive remedial scheme. In each such case, there was a statutory scheme that

provided relief for similarly-situated plaintiffs, but happened not to provide relief for the

litigant, either due to the particular factual circumstances, or the nature of the relief sought.

Given the existence of the complex ameliorative scheme, however, the reasonable

inference to draw in these cases was that Congress weighed competing policy goals and

fashioned a system of remedies that reflected its policy-based determinations.

Consequently, while the remedial scheme may have not afforded complete relief to the

particular plaintiff at bar, judicial deference to Congressional law-making called for

hesitation before creating a remedy through judicial fiat under circumstances where the

evidence showed that Congress had intentionally declined to do so.

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In Bush v. Lucas, the Supreme Court addressed a putative First Amendment claim

by a Federal employee who had allegedly been terminated for making critical public

remarks regarding his agency. 462 U.S. at 369. Following a review of the pertinent

regulatory landscape, the Court determined that “Federal civil servants are now protected

by an elaborate, comprehensive scheme that encompasses substantive provisions

forbidding arbitrary action by supervisors and procedures—administrative and judicial—

by which improper action may be redressed.” Id. at 385. Although recognizing that the

current system would not provide “complete relief” to the petitioner, the Court declined to

recognize a Bivens remedy under the circumstances given the existence of an “an elaborate

remedial system that has been constructed step by step, with careful attention to conflicting

policy considerations . . . .” Id. at 388. This system and other factors, in the Court’s view,

evidenced that “Congress is in a far better position than a court to evaluate the impact of a

new species of litigation between federal employees on the efficiency of the civil service.”

Id. at 389. Similarly, in Chilicky, petitioners sought money damages under Bivens

stemming from the denial of their Social Security benefits. 487 U.S. at 419. The Supreme

Court declined to recognize a Bivens remedy under the circumstances, holding that “[w]hen

the design of a Government program suggests that Congress has provided what it considers

adequate remedial mechanisms for constitutional violations that may occur in the course

of its administration, we have not created additional Bivens remedies.” Id. at 423. In the

Court’s view, the Social Security system evidenced such a design, and “while respondents

ha[d] not been given a remedy in damages for emotional distress or for other hardships

suffered because of delays in their receipt of Social Security benefits[,] . . . Congress . . .

ha[d] not failed to provide meaningful safeguards or remedies for the rights of persons

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situated as respondents were.” Id. at 425. Based on these precedents, the D.C. Circuit in

Wilson declined to recognize a Bivens remedy against the Vice President and others for

injuries allegedly suffered by the revelation of plaintiff’s employment with the Central

Intelligence Agency. 535 F.3d at 702. The D.C. Circuit determined that the disclosure of

personal information by Federal officials, the crux of the complaint, was governed by the

Privacy Act, and the Act was a “comprehensive scheme” that precluded a Bivens remedy.

Although the Act did not provide a cause of action against the three defendants, because it

excluded the Offices of the President and Vice President, that exclusion was not inadvertent

and thus did not weigh in favor of granting Bivens relief; rather, the legislative history of

the Act showed that the exclusion was intentional. Id. at 708. See also Davis v. Billington,

681 F.3d 377, 383 (D.C. Cir. 2012) (defining “comprehensive remedial scheme” as “when

Congress has put in place a comprehensive system to administer public rights, has not

inadvertently omitted damages remedies for certain claimants, and has not plainly

expressed an intention that the courts preserve Bivens remedies” (quoting Spagnola, 859

F.2d at 228) (internal quotation marks omitted)).

FIRREA was enacted in response to the savings-and-loan crisis of the 1980s to

“enhance the regulatory enforcement powers of the depository institution regulatory

agencies to protect against fraud, waste, and insider abuse.” CityFed Fin. Corp. v. Office

of Thrift Supervision, 58 F.3d 738, 741 (D.C. Cir. 1995). FIRREA applies both to banks

and, as relevant here, institution-affiliated parties. If the OCC determines that an IAP has

engaged in actionable misconduct, it may institute a “cease-and-desist” proceeding, and if

it does so, must provide the IAP with a notice of charges and an administrative hearing. 12

U.S.C. § 1818(b). The OCC may also seek civil monetary penalties, which are likewise

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subject to an administrative hearing. 12 U.S.C. § 1818(i)(2)(H). The hearing must be

conducted before an ALJ in accordance with the Administrative Procedure Act (“APA”),

and the IAP may choose to be represented by counsel, and may present evidence and cross-

examine witnesses. 12 U.S.C. § 1818(h)(1); 12 C.F.R. §§ 19.35, 19.36. In short, the hearing

is “a full adversarial proceeding.” Ind. Defs.’ Mem. at 9. Following the hearing, the ALJ

issues a written recommendation for the Comptroller, who reviews the decision, the

administrative record, and any objections by the IAP, and issues a final written decision.

12 U.S.C. § 1818(h)(1); 12 C.F.R. §§ 19.38–19.40. The IAP may then seek review of the

final decision before a United States Court of Appeals. 12 U.S.C. § 1818(h)(2).

Succinctly stated, Defendants’ position is that “the comprehensive remedial scheme

of the FIRREA, coupled with judicial review under the APA, is a special factor that

counsels hesitation against authorizing a Bivens remedy in this case.” Reply Mem. at 6. In

support, Defendants press Sinclair, a decision by the United States Court of Appeals for

the Eighth Circuit (“Eighth Circuit”), as dispositive of FIRREA’s status as a

“comprehensive remedial scheme” that precludes the recognition of a Bivens claim under

the particular factual circumstances of this case. In Sinclair, the proprietor of Sinclair

National Bank (“SNB”) brought a putative Bivens claim against OCC employees for a

series of adverse regulatory actions, which plaintiff claimed were retaliatory and motivated

by racial animus. These culminated in the OCC declaring the bank insolvent and appointing

the Federal Deposit Insurance Corporation (“FDIC”) as a receiver, which promptly sold

the assets of SNB to another bank. Sinclair v. Hawke, 314 F.3d 934, 938 (8th Cir. 2003).

The Eight Circuit declined to recognize a Bivens remedy for this allegedly retaliatory

regulatory action against SNB, finding that Congress had “been establishing and

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extensively regulating national banks for over two hundred years.” Id. at 940. In their view,

FIRREA was simply a further expansion of the already immense regulatory powers

afforded to Federal bank regulators such as the OCC and FDIC, and all of the “adverse

regulatory actions at issue fell within the OCC’s express statutory powers to regulate

national banks . . . .” Id. at 942. Importantly, regulatory action was subject to judicial review

via the APA, and to the “extent these APA remedies are limited, the long history of

congressional regulation of national banks confirms that the limitations are not inadvertent.

Rather, Congress has repeatedly adjusted, and at times overhauled, these statutory remedies

in a continuing effort to resolve . . . a difficult and delicate problem of reconciling

conflicting interests . . . .” Id. As such, the Eighth Circuit concluded that it was “for

Congress to decide whether the public interest in a sound national banking system would

be furthered by a cause of action requiring bank regulators to pay damages personally

unless they can convince a jury that their conduct in aggressively regulating a national bank

was not the product of an unconstitutional motive.” Id.

The analogy between this case and Sinclair, while appealing, is ultimately specious.

As an initial matter, the D.C. Circuit in Munsell expressed skepticism with precisely the

sort of analysis pressed by Sinclair; namely, that APA review precludes a Bivens remedy.

In that case, the D.C. Circuit assessed a claim that Federal Food Safety and Inspection

Service “officials used USDA enforcement powers to retaliate against [plaintiff] for

statements he made concerning USDA’s handling of an E. coli outbreak in 2002.” Munsell

v. Dep’t of Agric., 509 F.3d 572, 589 (D.C. Cir. 2007). In so doing, the court reviewed

another decision by the Eight Circuit, Nebraska Beef, which, in reliance on the holding in

Sinclair, concluded that when “Congress has created a comprehensive regulatory regime,

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the existence of a right to judicial review under the APA is sufficient to preclude a Bivens

action.” Nebraska Beef, Ltd. v. Greening, 398 F.3d 1080, 1084 (8th Cir. 2005) (citing

Sinclair, 314 F.3d at 940). The D.C. Circuit noted that the decision in “Nebraska Beef

leaves some weighty issues unanswered[,]” and that it was “unaware of any Supreme Court

decision holding that APA review alone is sufficient to eliminate the need for a Bivens

remedy.” Munsell, 509 F.3d at 590. Moreover, the D.C. Circuit opined that even

“assuming, arguendo, that the existence of APA review might factor into a determination

as to whether a Bivens remedy is available, its relevance would be minimal in a case

involving claimants who are ineligible for relief under the APA.” Id.

Whatever the significance of APA review may have been in Sinclair, it does little

here to obviate the need for a Bivens remedy. In Sinclair, the OCC successfully engaged in

regulatory action that could have been challenged in court pursuant to the APA. Here, the

presiding ALJ and the Comptroller ultimately declined to take any enforcement action

against Plaintiff. As a result, there was no final decision to review, and Defendants have

not proffered any explanation of how Plaintiff, under the particular factual circumstances

of this case, could have sought relief through the amalgam of FIRREA and the APA.

However, while this distinction is important, it does not end the inquiry. As recounted

above, the failure of a putative “comprehensive remedial scheme” to afford “complete

relief” is not dispositive if the absence of such relief is the product of intentional

Congressional policy making. In this vein, the Sinclair court determined that regulatory

action pursuant to FIRREA was limited to APA review as a result of Congressional

balancing of competing policy interests: those of banks, who would benefit from additional

review, against those of depositors, who would benefit from the ability of banking

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regulators to take prompt ameliorative action. As such, the absence of a remedy equivalent

to what would be available under Bivens was not accidental, but a product of that

intentional balancing of competing interests. This reasoning is consistent with that of the

Supreme Court and D.C. Circuit authorities discussed earlier, each of which concluded that

although the pertinent remedial scheme was limited as applied to the plaintiff at bar, that

limitation was the product of Congressional choice in an area subject to Congressional law-

making, and consequently counseled against the recognition of a judicially created remedy.

In order to press a similar argument in this case, Defendants would need to show

that the absence of a remedy for Plaintiff under the circumstances of this case was the

intentional product of how Congress constructed the administrative review procedures

under FIRREA. But Defendants have completely failed to furnish any legislative or other

evidence that Congress intentionally excluded claims similar to Plaintiff’s from FIRREA.

Nor does the statute itself indicate an intent to exclude such claims. While it may be

sensible for review of regulatory action to be limited to what is available under the APA,

that conclusion does not flow so readily for prosecutorial action that is alleged to have been

wholly ultra vires. In fact, Defendants have pointed to no mechanism under FIRREA for

review of prosecutorial abuse, other than the APA review that generally applies to a final

decision of the Comptroller. Consequently, the question at hand ultimately reduces to

whether the absence of APA review for Plaintiff’s claim is the product of intentional

Congressional policymaking in constructing FIRREA.

On this point, however, no evidence has been proffered, nor does such intent seem

likely. The absence of APA review in this case stems from the fact that the presiding ALJ

and the Comptroller ultimately determined that the enforcement action against Plaintiff had

17

to be dismissed. As a result, to agree with Defendants, the Court would need to conclude

that Congress intended to limit review of retaliatory prosecution claims within the confines

of FIRREA to only those cases where the OCC rendered a final decision (i.e., where the

allegedly improper prosecution is successful), regardless of the length of the prosecution

and its toll on plaintiff, and the practical reality that the most meritless prosecutions are the

ones that are most likely to prove unsuccessful when subject to the review of a neutral

arbiter. Absent some affirmative evidence, the Court declines to conclude that Congress

intended this odd result. See Munsell, 509 F.3d at 591 (“Thus, in a case of this sort, were

the possibility of APA review deemed sufficient to foreclose a Bivens remedy, the very

success of the unconstitutional conduct in removing [Plaintiff] from the regulated arena

would make APA review unavailable and insulate the conduct entirely from judicial

review. That would make little sense.”). Moreover, this determination comports with the

recognition of a Bivens claim for retaliatory prosecution in the criminal context, given that

in those cases further review was plainly available via the appeals process (although, like

here, only for retaliatory prosecutions that proved successful); and this determination also

comports with other district court decisions that have allowed Bivens claims to proceed

under similar circumstances. See Navab-Safavi v. Broad. Bd. of Governors, 650 F. Supp.

2d 40, 69 (D.D.C. 2009) (recognizing Bivens remedy despite the availability of APA

review), aff’d sub nom. Navab-Safavi v. Glassman, 637 F.3d 311 (D.C. Cir. 2011); Zherka

v. Ryan, 52 F. Supp. 3d 571, 580 (S.D.N.Y. 2014) (recognizing Bivens claim for retaliation

by employees of the Internal Revenue Service, despite the availability of administrative

review as provided by the Internal Revenue Code, and also noting that “[l]eaving plaintiff

to pursue administrative remedies through the very agency he asserts has targeted him for

18

retaliatory investigation would be, in essence, no remedy at all”). Accordingly, for all of

the foregoing reasons, the Court concludes that FIRREA is not a “comprehensive remedial

scheme” that counsels against the recognition of a Bivens remedy under the particular

factual circumstances of this case.

Defendants’ remaining “special factor” argument is that recognizing a Bivens claim

here would have a “chilling effect” on the willingness of banking regulators like the OCC

employees at issue “to aggressively attack unsafe banking practices.” Ind. Defs.’ Mem. at

11 (citing Sinclair, 314 F.3d at 939). As such, Defendants contend that “there is more than

a reasonable fear that a general Bivens cure would be worse than the disease.” Id. (citing

Wilkie, 551 U.S. at 561). The Court disagrees. First, this case treads on familiar ground, as

its salient facts are not substantially dissimilar from the controlling authorities that have

recognized the existence of a Bivens claim for retaliatory prosecution. Second, the factual

circumstances of this case are unique in the context of regulatory enforcement actions

undertaken by banking regulators like the OCC. Plaintiff alleges that he was prosecuted

without cause, in connection with a matter in which he had little substantive involvement,

solely for statements he made against the prosecuting agency. See infra at 26–27. Although

these allegations may, on their own, seem self-serving, the Court is also guided by the

practical reality that the presiding ALJ and the Comptroller determined that the prosecution

should be dismissed, and that the D.C. Circuit later concluded that the prosecution was not

“justified” by the administrative record. Loumiet EAJA, 650 F.3d at 800. Based on these

allegations, which must be taken as true for purposes of the pending motions, the case at

bar is plainly not a run-of-the-mill lawsuit in which the subject of adverse regulatory action,

unhappy with the result, sues the responsible government officials. Rather, this case

19

presents a unique constellation of factual allegations—most importantly that neutral

authorities have expressed skepticism at the propriety of the challenged prosecution—that

are unlikely to be present in other cases. Consequently, given the uniqueness of the

allegations in this case, in this Court’s view, allowing Plaintiff to proceed with his First

Amendment Bivens claim is unlikely to have a chilling effect on the proper regulatory

activities of banking regulators like the Individual Defendants. Accordingly, no special

factor pressed by Defendants counsels against the recognition of a Bivens remedy in this

case for Plaintiff’s claim of retaliatory prosecution by the Individual Defendants in

violation of his First Amendment right to freedom of speech. As such, Plaintiff’s First

Amendment claim is cognizable under Bivens, and the Court proceeds to assess whether

Plaintiff has stated viable claims against each of the Individual Defendants to whom such

a claim could attach.

B. Plaintiff Has Stated a Plausible First Amendment Bivens Claim Against

Defendants Rardin, Schneck, and Sexton, But Not Straus

Before assessing whether the allegations of the Complaint state a plausible First

Amendment claim against each of the Individual Defendants, the Court surveys the legal

framework of two doctrines that could potentially preclude such a claim: absolute

prosecutorial immunity, and qualified immunity.

1. Absolute Immunity

Federal prosecutors enjoy absolute immunity for “initiating a prosecution and in

presenting the State’s case . . . .” Imbler v. Pachtman, 424 U.S. 409, 431 (1976). This

principle has been extended by the Supreme Court to agency officials who perform tasks

under administrative auspices that are equivalent to that of a prosecutor in a court of law.

Butz v. Economou, 438 U.S. 478, 515 (1978) (“agency officials performing certain

20

functions analogous to those of a prosecutor should be able to claim absolute immunity

with respect to such acts”). Consequently, “those officials who are responsible for the

decision to initiate or continue a proceeding subject to agency adjudication are entitled to

absolute immunity from damages liability for their parts in that decision.” Id. at 516; see

also Gray v. Poole, 243 F.3d 572, 577 (D.C. Cir. 2001) (extending absolute immunity to a

government attorney for initiating a civil child neglect action). Nonetheless, an act is not

immune merely because it is performed by a prosecutor; for instance, absolute

prosecutorial immunity does not extend to “investigative functions normally performed by

a detective or police officer[,]” which are generally only afforded qualified immunity.

Buckley v. Fitzsimmons, 509 U.S. 259, 273 (1993).

In Hartman, the Supreme Court explained the effect of absolute immunity in the

context of a First Amendment Bivens claim for retaliatory prosecution. There, the Court

instructed that a Bivens

action for retaliatory prosecution will not be brought against the prosecutor,

who is absolutely immune from liability for the decision to prosecute . . . .

Instead, the defendant will be a nonprosecutor, an official, like an inspector

here, who may have influenced the prosecutorial decision but did not

himself make it, and the cause of action will not be strictly for retaliatory

prosecution, but for successful retaliatory inducement to prosecute.

Hartman, 547 U.S. at 261–62. Thus, in light of absolute prosecutorial immunity, the focus

of a retaliatory prosecution claim is primarily on the non-prosecuting officials who induced

the allegedly improper prosecution, and not the prosecutors themselves, unless they

perform non-immunized tasks that likewise engender the improper prosecution. Id. at 262

n.8 (noting that “[a]n action could still be brought against a prosecutor for conduct taken

in an investigatory capacity,” and noting that plaintiff’s complaint “charged the prosecutor

with acting in an investigative as well as in a prosecutorial capacity, . . . but dismissal of

21

the complaint as against the prosecutor was affirmed . . . , and no claim against him is

before us now”).

The Court addresses whether any of the Individual Defendants are entitled to

dismissal on the basis of absolute prosecutorial immunity below, in connection with its

assessment of whether Plaintiff has stated a plausible claim for retaliatory prosecution.

2. Qualified Immunity

The Individual Defendants also contend that they are shielded from litigation by

the doctrine of qualified immunity, which “protects government officials from liability for

civil damages insofar as their conduct does not violate clearly established statutory or

constitutional rights of which a reasonable person would have known.” Pearson v.

Callahan, 555 U.S. 223, 231 (2009) (internal quotation marks omitted). In order for a

complaint to counter an assertion of qualified immunity, a plaintiff must plead “facts

showing (1) that the official violated a statutory or constitutional right, and (2) that the right

was clearly established at the time of the challenged conduct.” Ashcroft v. al–Kidd, 563

U.S. 731, 735 (2011) (internal quotation marks omitted). With respect to the second

element, “though in the light of pre-existing law the unlawfulness of the officer’s conduct

must be apparent, there is no need that the very action in question have previously been

held unlawful.” Navab-Safavi, 637 F.3d at 317 (internal quotation marks and alterations

omitted) (declining to remand on the basis of qualified immunity because it “cannot be

gainsaid that a person expressing her viewpoint is exercising an established constitutional

right”); Ashcroft, 563 U.S. at 735 (“We do not require a case directly on point, but existing

precedent must have placed the statutory or constitutional question beyond debate.”). Put

differently, qualified immunity does not attach simply because the factual circumstances

22

of the present case are in some sense unique. Hope v. Pelzer, 536 U.S. 730, 741 (2002)

(“officials can still be on notice that their conduct violates established law even in novel

factual circumstances”). Rather, the “relevant, dispositive inquiry in determining whether

a right is clearly established is whether it would be clear to a reasonable officer that his

conduct was unlawful in the situation he confronted.” Saucier v. Katz, 533 U.S. 194,

201–02 (2001).

Defendants contend that they did not violate a “clearly established” right because

when the OCC initiated its enforcement action against Plaintiff in November 2006, there

“was no law establishing that the initiation of a civil administrative proceeding—as

opposed to a criminal prosecution—can support a retaliatory prosecution claim.” Ind.

Defs.’ Mem. at 18. The Court notes that this is the only instance in their briefing on the

pending motions where Defendants seek to distinguish the OCC’s enforcement action from

other retaliatory prosecution cases on the basis that the prosecution here proceeded under

administrative auspices (for example, they do not argue that this case presents a new Bivens

context on that basis). This position is also somewhat at odds with Defendants’ claim of

absolute prosecutorial immunity. In any event, the argument is of no avail.

The D.C. Circuit has stated unequivocally that it “clearly established in 1988 . . .

the contours of the First Amendment right to be free from retaliatory prosecution.” Moore

v. Hartman, 704 F.3d 1003, 1004 (D.C. Cir. 2013). More generally, in Hartman, the

Supreme Court stated that “the law is settled that as a general matter the First Amendment

prohibits government officials from subjecting an individual to retaliatory actions,

including criminal prosecutions, for speaking out . . . .” 547 U.S. at 256. As support for

that general proposition, the Supreme Court relied upon two earlier decisions, Crawford,

23

issued in 1998, and Perry, issued in 1972. Id.; Crawford–El v. Britton, 523 U.S. 574, 588,

592 (1998) (“the general rule has long been clearly established [that] the First Amendment

bars retaliation for protected speech”); Perry v. Sindermann, 408 U.S. 593, 597 (1972)

(noting that the government may not punish a person or deprive him of a benefit on the

basis of his “constitutionally protected speech”). Based on these precedents, it has been

clearly established, long before the OCC instituted the enforcement action against Plaintiff,

that retaliatory action by Federal officials against protected speech is unconstitutional. And

this general principle was further crystalized by authorities which held that retaliatory

prosecutions were a particular example of this sort of unconstitutional behavior. That these

cases did not involve an administrative proceeding is ultimately a distinction without a

difference. The pertinent question is whether the general constitutional principle was

sufficiently established that it should have been clear to the Individual Defendants that their

conduct, if the allegations prove true, was unlawful. Here, the case law had clearly

established the unlawfulness of retaliatory conduct generally, and retaliatory prosecutions

more specifically. The OCC’s enforcement powers, by Defendants’ own admission, are

immense and may be exercised in an administrative hearing with all the hallmarks of full

court proceeding. See supra at 14. Moreover, the possible sanctions, albeit not criminal,

are no less severe than what could face a criminal defendant. Plaintiff, in particular, faced

a $250,000 fine and exclusion from the banking industry, and by extension, his chosen

legal practice. 3 Compl. ¶ 80.

3

These factual circumstances distinguish this case from the non-controlling authority

pressed by Defendants: Bank of Jackson County v. Cherry, 980 F.2d 1362 (11th Cir. 1993).

See Ind. Defs.’ Mem. at 18–19. There, the United States Court of Appeals for the Eleventh

Circuit (“Eleventh Circuit”) affirmed a grant of summary judgment on the basis of qualified

immunity for a Bivens suit in which plaintiff, a small bank, alleged that it was “debarred”

24

Given the gravity of the enforcement action, and the established case law just

recounted, if the allegations are substantiated, it should have been clear to the Individual

Defendants that using their immense enforcement powers as a means to retaliate against

Plaintiff for his protected speech was unconstitutional. Accordingly, the Court concludes

that the right against retaliatory prosecution was clearly established at the time the

Individual Defendants initiated the enforcement action. As a result, the Individual

Defendants are not entitled to dismissal on the basis of qualified immunity so long as

Plaintiff has stated a plausible claim that they violated this right, an issue addressed in the

following section.

3. Plaintiff Has Stated a Plausible Claim Against Defendants Rardin, Schneck,

and Sexton, But Not Straus

The “essential elements” of a retaliatory prosecution claim are

[F]irst, that the conduct allegedly 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. If the Court concludes that the plaintiffs have

successfully discharged their burden of proof on both of these issues, it

should then consider a third: whether the State has shown by a

preponderance of the evidence that it would have reached the same decision

as to whether to prosecute even had the impermissible purpose not been

considered.

Haynesworth, 820 F.2d at 1257 n.93. 4

from working with the Farmers Home Administration, a federal agency that guaranteed the

bank’s loans to farmers, in retaliation for a legal dispute with the agency. Id. at 1364–65.

In relevant part, the Eleventh Circuit held that “[a]ny legal similarity between [the]

debarment, on the one hand, and criminal prosecution, on the other, would not have been

readily apparent to government officials attempting to do their jobs on a day-to-day basis.”

Id. at 1370. Here, for the reasons stated, the allegations suggest that the similarity was far

more apparent.

4

In Hartman, the Supreme Court added the additional requirement that plaintiffs bringing

a retaliatory prosecution suit must plead and prove the absence of probable cause. 547 U.S.

25

Plaintiff alleges that Defendant Rardin was the examiner-in-chief (“EIC”) in charge

of Hamilton Bank from 2000 to 2001, and that he was “actively involved” in the OCC

enforcement action against Plaintiff, Compl. ¶ 3; that Lee Straus “is an enforcement

attorney at the OCC who was the lead counsel” in the enforcement action, id. ¶ 4; that

Defendant Schneck “is Director of the Special Supervision and Fraud Division at the OCC

[and] was actively involved in the OCC’s various dealings with Hamilton from 2000 to

2001,” as well as with the enforcement action, id. ¶ 5; and finally, that Defendant Sexton

is “Assistant Director of the Enforcement and Compliance Division of the OCC,” and was

similarly “actively involved in the OCC’s various dealings with Hamilton from 2000 to

2001,” and the enforcement action, id. ¶ 6. Defendant Sexton, like Defendant Straus, is an

“experienced Government enforcement lawyer.” Id. Plaintiff alleges that the Individual

Defendants were all “senior, influential employees of the OCC, with particularly strong

say and influence on enforcement matters.” Id. ¶ 7.

According to the Complaint, Plaintiff’s critical statements toward the OCC caused

severe embarrassment to OCC “officials who had been involved in the OCC behavior

relating to Hamilton that those letters criticized, including prominently, and in senior roles,

defendants Rardin, Schneck, and Sexton.” Id. ¶ 52. According to Plaintiff, these same

officials, “all embarrassed and angered by [Plaintiff’s] whistle-blowing, began discussing

how to retaliate against him for his temerity, [and] all three of these defendants were

actively involved in the case brought by the OCC.” Id. ¶ 61. Defendant Sexton, in

at 265. Defendants do not challenge the Complaint on the basis that it has failed to

adequately plead the absence of probable cause (or its equivalent), an unsurprising result

given the D.C. Circuit’s determination that the enforcement action was not justified. In any

event, the Court finds that Plaintiff has adequately pled the absence of probable cause, or

its equivalent in the administrative setting in which the enforcement action was brought.

26

particular, is alleged to have said, in reference to the investigative reports prepared by

Plaintiff, that Plaintiff had “gone too far,” and that he and others “had to pay.” Id. ¶ 64.

Consequently, Plaintiff alleges that the decision to bring an enforcement action against him

was “unduly influenced by defendants Rardin, Sexton and Schneck . . . .” Id. ¶ 72.

Taking the foregoing allegations as true and drawing all reasonable inferences in

Plaintiff’s favor, as the Court must at this procedural juncture, Plaintiff’s allegations, taken

as a whole, plausibly suggest that Defendants Rardin, Schneck, and Sexton used the fruits

of their investigation into Hamilton Bank (i.e., their scrutiny of the investigative reports

drafted by Plaintiff) to improperly induce an enforcement action against Plaintiff in reprisal

for critical statements that he made against them and the OCC more generally. This view

of the Complaint is corroborated by the fact that the ALJ, the Comptroller, and the D.C.

Circuit ultimately concluded that the enforcement action was not meritorious. Loumiet

EAJA, 650 F.3d at 800; see also Hartman, 547 U.S. at 261 (“[d]emonstrating that there was

no probable cause for the underlying criminal charge will tend to reinforce the retaliation

evidence and show that retaliation was the but-for basis for instigating the prosecution”).

Moreover, Plaintiff has alleged that an action was brought against him—and not other

advisors involved with the Hamilton Bank investigation—despite him having relatively

less involvement with that investigation, id. ¶¶ 28, 84, and that the OCC ultimately

concluded that Plaintiff’s work product, which was the purported basis of the enforcement

action, did not “cause[] more than a minimal financial loss to, or a significant adverse effect

on [Hamilton Bank,]” Loumiet EAJA, 650 F.3d at 800. Taken as a whole, the foregoing

suffices to state a claim of retaliatory prosecution against Defendants Rardin, Schneck, and

Sexton.

27

Because the allegations against these three Defendants plausibly state that they

induced the enforcement action against Plaintiff through their investigative conduct, and

did not merely act as prosecutors who made the ultimate decision to prosecute, they are not

entitled to absolute prosecutorial immunity at this procedural juncture. See supra at 19–20.

Furthermore, because the Complaint plausibly alleges that they violated a right that the

Court has concluded was clearly established at the time of the alleged violation, these three

Defendants are also not entitled to qualified immunity at this procedural juncture.

Nonetheless, further factual development may show that these Defendants are entitled to

one or both of these immunities. The only allegations in the Complaint with respect to

Defendant Straus, however, are that he was lead counsel of the enforcement action, and

that he made certain comments to the press in the course of the prosecution that were

critical of Plaintiff. Compl. ¶¶ 4, 78, 85. Of these two, the only actionable conduct is

Defendant Straus’ press commentary, 5 his prosecutorial conduct being entitled to absolute

immunity, see supra 19–20. But the gravamen of a retaliatory prosecution claim is the

decision to, or inducement of, prosecution, and consequently the statements that Defendant

Straus allegedly made to the press in the course of the prosecution do not make out a claim

of retaliatory prosecution. Accordingly, Plaintiff’s First Amendment Bivens claim shall

proceed against Defendants Rardin, Schneck, and Sexton, but shall be dismissed, without

prejudice, against Defendant Straus on the basis of absolute immunity and for failure to

state a claim.

5

Defendants acknowledge that the press commentary alleged in the Complaint is not

entitled to absolute prosecutorial immunity. Reply Mem. at 8 (citing Buckley, 509 U.S. at

278).

28

C. Plaintiff Has Not Stated a Viable Fifth Amendment Bivens Claim

Plaintiff also alleges a Fifth Amendment due process claim against the Individual

Defendants. The count in the Complaint alleging this claim merely mirrors the First

Amendment count. Compare Compl. ¶¶ 140–142, with id. ¶¶ 137–139. Moreover, Plaintiff

has not briefed whether a Fifth Amendment claim for retaliatory prosecution is cognizable

under Bivens, or whether such a Fifth Amendment claim was sufficiently established to

avoid dismissal on the basis of qualified immunity. To the extent Plaintiff’s Fifth

Amendment claim is intended to bring a substantive due process claim for the First

Amendment violation already discussed at length, that is foreclosed by Supreme Court

precedent. Albright v. Oliver, 510 U.S. 266, 273 (1994) (“Where 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 these claims.” (internal quotation marks omitted)).

However, in his opposition to the pending motions, Plaintiff seeks to restyle his

Fifth Amendment claim as a “stigma plus” or “reputation plus” due process claim. Opp’n

Mem. at 32. To bring such a claim in the D.C. Circuit, Plaintiff must plausibly allege that

the Individual Defendants engaged in conduct that not only harmed Plaintiff’s reputation,

but that also either formally excluded Plaintiff from a chosen trade or profession, or caused

“harms approaching, in terms of practical effect, formal exclusion from a chosen trade or

profession . . . .” Trifax Corp. v. District of Columbia, 314 F.3d 641, 644 (D.C. Cir. 2003).

“The key inquiry then is this: Has the government, by attacking personal or corporate

reputation, achieved in substance an alteration of status that, if accomplished through

formal means, would constitute a deprivation of liberty?” Id. Absent such “broad

29

preclusion” from a chosen trade or profession, a Fifth Amendment claim will not lie even

if the government conduct would “impair [plaintiff’s] future employment prospects . . . so

long as such damage flows from injury caused by the defendant to a plaintiff's reputation.”

Siegert v. Gilley, 500 U.S. 226, 234 (1991). For example, in Kartseva, the D.C. Circuit

remanded for the district court to determine whether the government conduct in that case

had effectively precluded plaintiff “from pursuing her profession as a Russian language

translator,” or whether plaintiff had “merely lost one position in her profession but is not

foreclosed from reentering the field,” in which case her Fifth Amendment claim would not

be viable. Kartseva v. Dep’t of State, 37 F.3d 1524, 1529 (D.C. Cir. 1994).

Here, Plaintiff has not alleged that the conduct of the Individual Defendants has

precluded him from engaging in his chosen career as a banking law practitioner. Rather,

the Complaint alleges that Plaintiff’s “practice—particularly in the banking field—largely

evaporated,” and that his “income dropped significantly,” and that he “fell six partnership

levels . . . .” Compl. ¶ 106. Although these allegations plausibly state that Plaintiff’s

employment prospects were impaired, that is not equivalent to him being precluded from

practicing law as a banking attorney. Indeed, by the plain terms of the Complaint, he

remained a partner at a law firm, and his practice only “largely” evaporated; it did not cease

to exist. Accordingly, the Complaint does not state a plausible “reputation-plus” or

“stigma-plus” Fifth Amendment Bivens claim, and Plaintiff has not presented any other

theory of how his Fifth Amendment claim could proceed. As a result, the Fifth Amendment

claim shall be dismissed.

30

D. The State-Law Tort Claims Against the Individual Defendants are Converted

to FTCA Claims Against the United States

Defendants contend that the state-law tort claims against the Individual Defendants

for intentional infliction of emotional distress (Count I), invasion of privacy (Count II),

abuse of process (Count III), malicious prosecution (Count IV), and conspiracy (Count

VIII), are automatically converted to FTCA claims against the United States pursuant to

the Westfall Act, 28 U.S.C. § 2679(d), which “accords federal employees absolute

immunity from common-law tort claims arising out of acts they undertake in the course of

their official duties.” Osborn v. Haley, 549 U.S. 225, 229 (2007). Pursuant to the Westfall

Act, all that is required for conversion of the state-law claims against the Individual

Defendants is a certification of a designee of the Attorney General that the Individual

Defendants were “acting within the scope of [their] office or employment at the time of the

incident out of which the claim[s] arose . . . .” 28 U.S.C. § 2679(d)(1). Here, such a

certification has been provided by the Director of the Torts Branch of the Department of

Justice’s Civil Division, a designee of the Attorney General, and Plaintiff does not oppose

the conversion in his opposition to the pending motions. Ind. Defs. Mem at 21, Ex. 1; see

FDIC v. Bender, 127 F.3d 58, 67–68 (D.C. Cir. 1997) (“It is well understood in this Circuit

that when a plaintiff files an opposition to a motion to dismiss addressing only certain

arguments raised by the defendant, a court may treat those arguments that the plaintiff

failed to address as conceded.”). Accordingly, the state-law tort claims against the

Individual Defendants are converted to FTCA claims against the United States.

31

E. Plaintiff’s FTCA Claim

1. Discretionary-Function Exception

The D.C. Circuit has instructed that “the discretionary-function exception does not

categorically bar FTCA tort claims where the challenged exercise of discretion allegedly

exceeded the government’s constitutional authority to act.” Loumiet IV, 828 F.3d at 939.

The task for this Court on remand was to determine whether Plaintiff’s “complaint

plausibly alleges that the OCC’s conduct exceeded the scope of its constitutional authority

so as to vitiate discretionary-function immunity.” Id. at 946. For the reasons discussed

above, the Court has concluded that Plaintiff has plausibly alleged that Defendants engaged

in conduct that violated a clearly established First Amendment right against retaliatory

prosecution. See supra at 28. As Defendants make no other challenges on this point, the

Court concludes that the United States may not make use of the discretionary-function

exception of the FTCA under the circumstances of this case to shield itself from Plaintiff’s

state-law tort claims predicated on the OCC’s allegedly retaliatory enforcement action.

2. Plaintiff’s Malicious Prosecution and Abuse of Process Claims Must be

Dismissed

The waiver of sovereign immunity afforded by the FTCA generally does not apply

to claims of malicious prosecution or abuse of process, among a number of other intentional

torts. 28 U.S.C. § 2680(h). Nonetheless, the Act contains an exception to this general rule,

known as the Law Enforcement Proviso, which states that “with regard to acts or omissions

of investigative or law enforcement officers of the United States Government, the [FTCA]

shall apply to any claim arising . . . out of . . . abuse of process, or malicious prosecution.”

Id. Accordingly, in order for Plaintiff to pursue these two claims, as he seeks to do in the

32

Complaint, he must establish that the OCC employees who engaged in the allegedly

tortious activity were “investigative or law enforcement officers of the United States.”

The FTCA defines “investigative or law enforcement officer” as “any officer of the

United States who is empowered by law to execute searches, to seize evidence, or to make

arrests for violations of Federal law.” Id. According to Plaintiff, OCC officials are vested

with

so-called “visitorial powers,” which allows federal agents to (i) examine a

bank; (ii) inspect a bank’s books and records; (iii) regulate and supervise

the bank; and (iv) enforce compliance with any applicable federal or state

laws concerning those activities. The agents also are empowered to engage

in comprehensive investigations, where they can command attendance at

depositions, administer oaths, and depose officers, directors, employees, or

agents of the bank under oath.

Opp’n Mem. at 35 (citing 12 U.S.C. §§ 481, 484, 1820). The officials are also empowered

to “issue, revoke, quash, or modify subpoenas.” Id. (citing 12 U.S.C. § 1818(n)). In the

Court’s view, however, these powers do not suffice to render OCC officials “investigative

or law enforcement officers,” as none of these rights amount to a power to execute searches,

to seize evidence, or to make arrests. In a closely analogous case, another district court held

that officials of the Office of Thrift Supervision (“OTS”), a bank regulator, were not

investigative or law enforcement officers, as there was no “legal authority vested in the

OTS to execute searches, to seize evidence, or to make arrests for violations of Federal

law.” Biase v. Kaplan, 852 F. Supp. 268, 281 (D.N.J. 1994); see also Saratoga Sav. & Loan

Ass’n v. Fed. Home Loan Bank of San Francisco, 724 F. Supp. 683, 689 (N.D. Cal. 1989)

(finding that Federal bank examiners with the Federal Home Loan Bank were not

“investigative or law enforcement officers”). In particular, the Biase court noted that while

“OTS is empowered to examine bank documents and issue subpoenas therefor, . . . OTS

33

must make application to a district court to compel access to documents,” which does not

suffice to render such bank examiners law enforcement officers. 852 F. Supp. at 281 n.9

(collecting cases).

The same is true here. Of the various powers described above, the only one that

potentially suffices to render the OCC officials subject to the Law Enforcement Proviso is

the ability to subpoena evidence. Nonetheless, much like the OTS officials in Biase, the

OCC officials in this case can only enforce witness and document subpoenas by application

to a United States District Court. 12 U.S.C. § 1818(n) (“such agency . . . may apply to the

United States District Court . . . for enforcement of any subpena or subpena duces tecum

issued pursuant to this subsection”). Accordingly, OCC officials are not subject to the Law

Enforcement Proviso merely by virtue of their subpoena powers. See Art Metal-U.S.A., Inc.

v. United States, 577 F. Supp. 182, 185 (D.D.C. 1983) (“[o]btaining evidence by subpoena

is the antithesis of obtaining it through search and seizure”), aff’d, 753 F.2d 1151 (D.C.

Cir. 1985).

The other powers afforded to OCC officials—to review bank records and engage

in regulatory activities—likewise do not constitute the types of powers to execute searches,

seize evidence, or make arrests that were envisioned by the Law Enforcement Proviso. The

Proviso was enacted by Congress “as a counterpart to the Bivens case and its progeny, in

that it waives the defense of sovereign immunity so as to make the Government

independently liable in damages under state law for the same type of conduct that is alleged

to have occurred in Bivens[,]” which involved federal narcotics agents searching a

residence and making arrests. Denson v. United States, 574 F.3d 1318, 1336 (11th Cir.

2009) (citing S. Rep. No. 93–588 (1974)) (alterations in original omitted). Consequently,

34

the bank examination functions of the OCC described above are plainly not equivalent to

the type of law enforcement searches and seizures that Congress intended to waive

immunity for with the passage of the Law Enforcement Proviso.

Finally, although Plaintiff requests that the Court permit discovery on this issue,

which would be tantamount to jurisdictional discovery given that sovereign immunity

implicates this Court’s subject-matter jurisdiction, 6 he does not explain how that discovery

would be helpful to the resolution of this issue. The FTCA makes clear that whether an

official is an “investigative or law enforcement officer” depends on whether they are

“empowered by law” to execute the functions enumerated in the statute. Here, the Court

has reviewed the relevant law and found that the OCC officials are not so empowered.

Furthermore, the two out-of-Circuit authorities relied upon by Plaintiff to seek discovery

are not persuasive. First, in Sutton, the Fifth Circuit did not require the district court on

remand to permit discovery, as Plaintiff contends, but rather required the court to make a

determination as to whether the official at issue fit the Proviso. Sutton v. United States, 819

F.2d 1289, 1294 n.8 (5th Cir. 1987). And while Plaintiff seeks to equate the powers of the

OCC officials here with those of the Postal Inspectors in Sutton, the Fifth Circuit expressly

noted that the latter are empowered to “[m]ake arrests without warrant . . . .” Id. The other

6

See FC Inv. Grp. LC v. IFX Markets, Ltd., 529 F.3d 1087, 1094 (D.C. Cir. 2008) (“a

request for jurisdictional discovery cannot be based on mere conjecture or speculation”);

Atlantigas Corp. v. Nisource, Inc., 290 F. Supp. 2d 34, 53 (D.D.C. 2003) (“Where there is

no showing of how jurisdictional discovery would help plaintiff discover anything new, it

is inappropriate to subject defendants to the burden and expense of discovery.” (internal

quotation marks and alterations omitted)); Williams v. ROMARM, 187 F. Supp. 3d 63, 72

(D.D.C. 2013), aff’d sub nom. Williams v. Romarm, SA, 756 F.3d 777 (D.C. Cir. 2014)

(“[W]hen requesting jurisdictional discovery, a plaintiff must make a detailed showing of

what discovery it wishes to conduct or what results it thinks such discovery would

produce.” (internal quotation marks and alterations omitted)).

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authority relied upon by Plaintiff, Pellegrino, faced the question of whether “airport

security screenings” by Transportation Security Agents constituted “searches” for purposes

of the Law Enforcement Proviso. The Pellegrino court expressly noted the similarity

between these “screenings” and the type of unlawful, warrantless searches that were the

subject of Bivens and the Law Enforcement Proviso, and consequently permitted discovery

to determine whether this conduct in fact amounted to a type of warrantless search subject

to the Proviso. Pellegrino v. U.S. Transp. Sec. Admin., 855 F. Supp. 2d 343, 356 (E.D. Pa.

2012). As already stated here, there is no indication in the applicable law, or any allegation

in the Complaint, that OCC officials are empowered to engage in conduct that

approximates the activities envisaged by the Law Enforcement Proviso. Accordingly, the

Court finds that the OCC officials at issue were not “investigative or law enforcement

officers,” and that, as a result, Plaintiff’s malicious prosecution and abuse of process claims

shall be dismissed without prejudice.

3. Based on the Court’s Prior Ruling, The Invasion of Privacy Claim Can

Proceed

“Invasion of privacy is not one tort, but a complex of four, each with distinct

elements and each describing a separate interest capable of being invaded.” Greenpeace,

Inc. v. Dow Chem. Co., 97 A.3d 1053, 1061 (D.C. 2014) (internal quotation marks

omitted). Of the four, the one relevant here is “public disclosure of private facts.” Id. The

elements of this claim are “(1) publicity, (2) absent any waiver or privilege, (3) given to

private facts (4) in which the public has no legitimate concern (5) and which would be

highly offensive to a reasonable person of ordinary sensibilities.” Wolf v. Regardie, 553

A.2d 1213, 1220 (D.C. 1989). Plaintiff alleges that private facts were tortiously disclosed

in two instances: the November 6, 2006 Notice of Charges, and an October 3, 2006 press

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release issued by the OCC with respect to the enforcement action. Opp’n Mem. at 39–40.

Both of these documents are subject to the Court’s review as they are “public records and

government documents available from reliable sources.” Al-Aulaqi v. Panetta, 35 F. Supp.

3d 56, 67 (D.D.C. 2014).

Although the Court agrees with Defendants that some of the statements in these

documents do not appear to concern private facts and/or are matters of public concern (e.g.,

the results of the Hamilton Bank investigation), the amount of fees charged by Plaintiff and

his firm, relayed by both documents, is a seemingly private fact, the public importance of

which is not apparent, and the disclosure of which may be highly offensive to a reasonable

person (much like one may be offended by the disclosure of his or her salary). As such,

Plaintiff has stated a plausible claim for invasion of privacy, in particular, the public

disclosure of private facts.

The remaining question is whether this claim is timely. On this, the Court

previously ruled that the continuing tort doctrine tolled the statute of limitations with

respect to Plaintiff’s FTCA claims, all of which arose out of the allegedly retaliatory

prosecution, until the “final disposition of the case.” Loumiet I, 968 F. Supp. 2d at 154

(citing Whelan v. Abell, 953 F.2d 663, 674 (D.C. Cir. 1992)). Because Plaintiff brought an

administrative action within two years of the cessation of the prosecution, the Court

concluded that “Plaintiff’s FTCA claims need not be dismissed on statute of limitations

grounds.” Id. at 155. Defendants point the Court’s towards its later decision, which held

that the statements underling the invasion of privacy claim did not warrant application of

the continuing tort doctrine. Loumiet III, 106 F. Supp. 3d at 225–26. Importantly, this

decision was rendered after the Court had determined that Defendants’ decision to

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prosecute was not actionable under the discretionary-function exception. Id. at 222. That

decision has now been reversed, and accordingly, the Court’s analysis reverts to its prior

conclusion that the pendency of the prosecution constituted a continuing tort that tolled the

statute of limitations for Plaintiff’s FTCA claims. Accordingly, Plaintiff’s invasion of

privacy claim may proceed.

IV. CONCLUSION

For all of the foregoing reasons, the Court GRANTS IN PART AND DENIES IN

PART the Individual Defendants’ [62] Motion to Dismiss, and GRANTS IN PART AND

DENIES IN PART the United States’ [63] Motion to Dismiss. Plaintiff’s First Amendment

Bivens claim for retaliatory prosecution shall proceed against Defendants Rardin, Schneck,

and Sexton. Plaintiff’s Fifth Amendment Bivens claim, and all claims against Defendant

Straus are DISMISSED WITHOUT PREJUDICE. Pursuant to the Westfall Act, the

state-law tort claims against the Individual Defendants are CONVERTED to FTCA claims

against the United States. Plaintiff’s FTCA claims against the United States may proceed,

except that the abuse of process (Count III) and malicious prosecution (Count IV) claims

are DISMISSED WITHOUT PREJUDICE, leaving only the claims for intentional

infliction of emotional distress (Count I), invasion of privacy (Count II), negligent

supervision (Count V), and civil conspiracy (Count VIII).

An appropriate Order accompanies this Memorandum Opinion.

Dated: June 13, 2017

/s/

COLLEEN KOLLAR-KOTELLY

United States District Judge

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