Echols v. Morpho Detection, Inc.
Filing
48
ORDER by Judge Claudia Wilken DENYING 42 PLAINTIFF'S MOTION FOR LEAVE TO FILE A SECOND AMENDED COMPLAINT. (cwlc2, COURT STAFF) (Filed on 4/11/2013)
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IN THE UNITED STATES DISTRICT COURT
2
FOR THE NORTHERN DISTRICT OF CALIFORNIA
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4
STEPHEN ECHOLS,
5
6
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8
9
United States District Court
For the Northern District of California
10
Plaintiff,
v.
MORPHO DETECTION, INC.; UNITED
STATES DEPARTMENT OF HOMELAND
SECURITY; TRANSPORTATION SECURITY
AGENCY; and JANET NAPOLITANO, in
her official capacity as
Secretary of Homeland Security,
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14
15
16
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________________________________/
Plaintiff Stephen Echols moves for leave to file a second
amended complaint (2AC).
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23
24
25
26
27
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Defendants United States Department of
Homeland Security (DHS), Transportation Security Agency (TSA) and
Secretary of Homeland Security Janet Napolitano (collectively,
Federal Defendants) oppose Plaintiff’s motion.
Having considered
the arguments set forth by the parties in their papers, the Court
DENIES the motion.
19
20
ORDER DENYING
PLAINTIFF’S MOTION
FOR LEAVE TO FILE
A SECOND AMENDED
COMPLAINT (Docket
No. 42)
Defendants.
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12
No. C 12-1581 CW
BACKGROUND
According to Plaintiff’s first amended complaint (1AC), he
was formerly employed by Defendant Morpho Detection, Inc. as a
field service technician at the Los Angeles International Airport,
where Morpho contracts with DHS and TSA to provide airport
security.
1AC ¶¶ 8-9.
After having passed all previous
government airport and company background checks that he
underwent, Plaintiff received a letter from TSA dated March 9,
2010, stating that he was “ineligible to work on any TSA contract
1
based on” various issues identified during a background check
2
process, including that he had purportedly engaged in criminal
3
conduct and failed to disclose criminal charges filed against him.
4
Id. at ¶¶ 8-11.
5
committed some of the crimes, that he “was the victim of identity
6
theft” and that the remaining information was inaccurate because
7
the case against him was dismissed.
8
alleged that he communicated with TSA and Morpho about the errors
9
and that, despite repeated requests, TSA failed to provide
Plaintiff alleged that he was not the person who
Id. at ¶ 13.
He further
United States District Court
For the Northern District of California
10
Plaintiff with a copy of his background report.
11
further alleges that Morpho terminated him as a result of the
12
failed background check.
13
Id. at ¶ 15.
He
Id. at ¶¶ 15-16.
Plaintiff filed this case on March 29, 2012, originally
14
asserting claims against Morpho Detection only.
15
October 12, 2012, the Court granted the parties’ stipulation to
16
permit Plaintiff to file the 1AC.
17
Docket No. 1.
On
Docket Nos. 23, 25.
In his 1AC, Plaintiff asserted four claims against Federal
18
Defendants: (1) willful violation of the Fair Credit Reporting Act
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(FCRA), 15 U.S.C. §§ 1681-1681x; (2) negligent violation of the
20
FRCA; (3) violation of the Freedom of Information Act (FOIA), 5
21
U.S.C. § 552; and (4) declaratory relief that Plaintiff is
22
eligible to be employed by the federal government or organizations
23
that require passage of the eQuip background check.
24
On January 22, 2013, Federal Defendants moved to dismiss the
25
FCRA claims and declaratory relief claim, but not the FOIA claim.
26
Docket No. 36, 1-2 & n.1.
27
requested leave to amend to assert new claims under the
28
Administrative Procedures Act (APA), the due process clause of the
In his opposition brief, Plaintiff
2
1
Fifth Amendment or both, which were not plead in his 1AC.
2
No. 37.
3
Docket
On February 27, 2013, the Court granted Federal Defendants’
4
motion to dismiss and dismissed his FCRA and declaratory relief
5
claims without leave to amend.
6
Plaintiff permission to file a motion for leave to amend his
7
complaint to add new claims against Federal Defendants under the
8
APA or the due process clause, including a declaratory relief
9
claim based on these provisions.
The Court granted
LEGAL STANDARD
10
United States District Court
For the Northern District of California
Docket No. 40.
11
Federal Rule of Civil Procedure 15(a) provides that leave of
12
the court allowing a party to amend its pleading “shall be freely
13
given when justice so requires.”
14
liberal policy towards amendment, the nonmoving party bears the
15
burden of demonstrating why leave to amend should not be granted."
16
Genentech, Inc. v. Abbott Laboratories, 127 F.R.D. 529, 530-531
17
(N.D. Cal. 1989) (citing Senza-Gel Corp. v. Seiffhart, 803 F.2d
18
661, 666 (Fed. Cir. 1986)).
19
assessing the propriety of a motion for leave to amend: undue
20
delay, bad faith, futility of amendment, prejudice to the opposing
21
party and whether the plaintiff has previously amended the
22
complaint.
23
1055 n.3 (9th Cir. 2009).
24
generally all considered, “futility of amendment alone can justify
25
the denial of a motion.”
26
Package Express, 885 F.2d 531, 538 (9th Cir. 1989) (“Leave to
27
amend need not be given if a complaint, as amended, is subject to
28
dismissal.”).
Because “Rule 15 favors a
Courts consider five factors when
Ahlmeyer v. Nev. Sys. of Higher Educ., 555 F.3d 1051,
Although these five factors are
Id. at 1055; see also Moore v. Kayport
3
1
DISCUSSION
2
Plaintiff moves for leave to amend his pleading to assert
3
claims for violation of the Fifth Amendment, the APA and the
4
Privacy Act, 5 U.S.C. § 552a, et seq.
5
also maintains the FOIA claim that he previously asserted against
6
Federal Defendants in his 1AC.
7
to dismiss that claim.
8
amend, arguing that leave to amend should be denied because all of
9
his claims, including the FOIA claim, are improperly plead and
Plaintiff’s proposed 2AC
Federal Defendants had not moved
Federal Defendants oppose the motion to
United States District Court
For the Northern District of California
10
would be subject to a motion to dismiss.
11
I.
APA Claim
12
In the APA claim in his proposed 2AC, Plaintiff alleges that
13
he was not given procedures similar to individuals covered by the
14
Defense Industrial Personnel Security Clearance Program, 32 C.F.R.
15
part 155, and to individuals subject to the Department of State’s
16
debarment procedures for contractors, 48 C.F.R. § 609.406-3.
17
¶ 69-70.
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his security clearance was arbitrary and capricious, deprived him
19
of his Fifth Amendment due process rights and his right to pursue
20
his chosen profession, and was “unsupported by substantial
21
evidence and unwarranted by the facts.”
22
2AC
He also alleges that the TSA and DHS’s failure to renew
Id. at ¶¶ 71-75.
Federal Defendants contend that Plaintiff should not be
23
granted leave to assert his proposed APA claim because he has
24
adequate remedies available under the Privacy Act.
25
responds that the APA and the Privacy Act are “not identical as
26
the APA provides relief where there is a violation of a
27
constitutional right and the Privacy Act does not,” and that he
28
should be permitted to seek alternative relief.
4
Plaintiff
Reply at 7.
1
The APA provides for judicial review of “[a]gency action
2
made reviewable by statute” and of “final agency action for which
3
there is no other adequate remedy in a court.”
4
The Supreme Court has held that, in enacting the APA, “Congress
5
did not intend the general grant of review in the APA to duplicate
6
existing procedures for review of agency action,” and it “does not
7
provide additional judicial remedies in situations where the
8
Congress has provided special and adequate review procedures.”
9
Bowen v. Massachusetts, 487 U.S. 879, 903 (1988); see also Brem-
5 U.S.C. § 704.
United States District Court
For the Northern District of California
10
Air Disposal v. Cohen, 156 F.3d 1002, 1004 (9th Cir. 1998)
11
(“federal courts lack jurisdiction over APA challenges whenever
12
Congress has provided another ‘adequate remedy’”).
13
have found that a plaintiff’s APA claim could not proceed where
14
adequate remedies existed under the Privacy Act.
15
v. U.S. Dept. of Interior, 2006 WL 1005091 (D. Or.); Schaeuble v.
16
Reno, 87 F. Supp. 2d 383, 393-94 (D. N.J. 1998); Mittleman v.
17
United States Treasury, 773 F. Supp. 442, 449 (D.D.C. 1991).
18
Other courts
See, e.g., Ware
Plaintiff argues that the Privacy Act does not provide relief
19
for constitutional challenges and the APA does.
However, here,
20
the basis of Plaintiff’s proposed APA claim is that the Federal
21
Defendants did not provide him with adequate procedures when
22
denying his security clearance and that the denial was not
23
supported by the facts.
24
permit individuals to have access to their records, to request
25
amendment of the records and to request review of refusal to amend
26
the record.
27
bring suit if any agency refuses to comply with requests for
28
access or to amend a record, in which case the court can order the
The Privacy Act requires that an agency
5 U.S.C. § 552a(d).
It also allows an individual to
5
1
agency to provide access to the records or to amend the record as
2
the court directs.
3
Privacy Act further permits an individual to bring suit if an
4
agency does not maintain a record about the individual “with such
5
accuracy, relevance, timeliness, and completeness as is necessary
6
to assure fairness in any determination relating to the
7
qualifications [or] character” of the individual “that may be made
8
on the basis of such record, and consequently a determination is
9
made which is adverse to the individual” or if the agency failed
5 U.S.C. § 552a(g)(1)(A)-(B), (2), (3).
The
United States District Court
For the Northern District of California
10
to comply with other provisions of the Privacy Act, with a
11
resulting adverse effect on the individual.
12
§ 552a(g)(1)(C)-(D).
13
that the agency acted intentionally or willfully, the individual
14
may recover actual damages sustained as a result of the agency’s
15
refusal or failure to act, in an amount no less than $1,000.
16
U.S.C. § 552a(g)(4).
17
and costs for any of these actions under certain circumstances.
18
U.S.C. § 552a(g)(2)(B), (3)(B), 4(B).
19
thus shown that the Privacy Act provides adequate remedies for
20
Plaintiff to challenge the denial of his security clearance.
21
fact, the scope of remedies that he seeks under the Privacy Act is
22
broader than what he seeks under the APA.
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damages and de novo review from this Court under the Privacy Act.
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5 U.S.C.
In such actions, if the court determines
5
The court may also assess attorneys’ fees
5
Federal Defendants have
In
For example, he seeks
Plaintiff asserts that, to prevail under the APA, “a
25
plaintiff ‘need not demonstrate she would have been hired if the
26
[Agency] had complied with the law.’”
27
v. Heckler, 734 F.2d 1359, 1365 (9th Cir. 1984)); Reply at 7.
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Plaintiff, however, cites only cases that address whether an
6
Mot. at 6 (quoting Preston
1
individual has suffered an injury-in-fact such that he has
2
standing to pursue a claim, including one under the APA.
3
action brought in federal court, not just those brought under the
4
APA, the party who invokes the court’s authority must show that he
5
has standing sufficient to meet the Article III requirements.
6
See, e.g., Valley Forge Christian College v. Americans United for
7
Separation of Church & State, Inc., 454 U.S. 464, 471-72 (1982).
8
Plaintiff does not provide any authority that demonstrates that he
9
is required to make a greater showing in order to achieve relief
In any
United States District Court
For the Northern District of California
10
under the Privacy Act or that adequate relief is not available
11
under that Act.
Thus, the Court finds that, because the Privacy Act provides
12
13
adequate relief and sets forth specific procedures, Plaintiff’s
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APA claim is futile.
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to amend to assert this claim is DENIED.
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II.
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Accordingly, Plaintiff’s request for leave
Due Process Claim
In the proposed 2AC, Plaintiff seeks to bring a claim for
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violation of the Due Process Clause of the Fifth Amendment.
19
alleges that the failure to provide him with a security clearance
20
violates his “constitutionally protected liberty interest in
21
pursuing his chosen profession.”
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declaration under the Declaratory Judgment Act, 28 U.S.C. § 2201,
23
that he is entitled to adequate procedures by which to challenge
24
the deprivation of this right.
25
directing Federal Defendants to provide him with such procedures,
26
including notice of the specific reasons for the denial of the
27
clearance, an opportunity to respond to those reasons, a hearing
28
with notice, the chance to cross-examine any individuals providing
2AC ¶¶ 64-65.
Id. at ¶ 66.
7
He
He seeks a
He seeks an order
1
adverse information and an opportunity to present evidence of his
2
own.
3
Id. at ¶ 67.
Federal Defendants argue that Plaintiff has not alleged the
4
deprivation of a constitutionally protected liberty or property
5
interest and thus cannot maintain a due process claim.
6
previously held that, to the extent that Plaintiff sought in his
7
1AC a determination that he should have passed the background
8
clearance, his claims were not justiciable and that the Court did
9
not have jurisdiction to review the merits of the decision
United States District Court
For the Northern District of California
10
regarding his clearance.
11
argue, among other things, that Plaintiff is seeking to evade this
12
ruling by defining his profession as one that requires a security
13
clearance.
14
constitutionally protected right to follow a chosen trade or
15
profession, including that alleged in his proposed 2AC.
16
Docket No. 40, 16.
The Court
Federal Defendants
Plaintiff responds that he does have a
In Department of Navy v. Egan, 484 U.S. 518 (1988), the
17
Supreme Court held that employment decisions based on the
18
executive branch’s security clearance decisions are not reviewable
19
by the Merit Systems Protection Board (MSPB).
20
Doe, 486 U.S. 592 (1988), the Supreme Court confirmed that federal
21
courts do not have jurisdiction to review the merits of employment
22
decisions regarding security clearances.
23
director’s decision to terminate a CIA employee for a security
24
reason was committed to the discretion of the director by law,
25
thereby precluding judicial review under the Administrative
26
Procedures Act (APA).
27
concluded that the same considerations did not deprive the courts
28
of jurisdiction to review constitutional claims and remanded for
Id. at 601.
8
Then, in Webster v.
It held that the CIA
In Webster, the Court also
1
further proceedings, while expressly declining to consider whether
2
the plaintiff in fact had presented colorable constitutional
3
claims.
Id. at 603-04 & n.8.
4
Later, in Dorfmont v. Brown, 913 F.2d 1399 (9th Cir. 1990),
5
the Ninth Circuit applied Egan and Webster to find that judicial
6
review of the merits of a decision regarding a security clearance
7
was barred.
8
Defense “seeking an injunction against the revocation of her
9
security clearance,” arguing that the decision violated her
In that case, the plaintiff sued the Department of
United States District Court
For the Northern District of California
10
constitutional “rights to procedural and substantive due process.”
11
Id. at 1400.
12
limited to review by the MSPB, “[t]he logic of that decision
13
precludes judicial review as well.”
14
to security matters, a federal court is ‘an outside nonexpert
15
body.’
16
decision to grant or revoke a security clearance than does the
17
MPSB.”
18
“Although Dorfmont fashions her claims as due process challenges,”
19
her arguments--save two--were in fact “attacks on the merits of
20
the decision to lift her security clearance.”
21
that “the district court has no authority to review” those
22
challenges to the merits of the security clearance decision.
23
at 1402.
24
The court stated that, although Egan’s holding was
Id. at 1401.
“When it comes
We have no more business reviewing the merits of a
Id. (quoting Egan, 484 U.S. at 529).
The court stated,
Id.
The court held
Id.
As to the due process challenges, the Dorfmont court held
25
that, although it is justiciable, “a claim for denial of due
26
process stemming from revocation of a security clearance is not a
27
colorable constitutional claim.”
28
explained that “the requirements of due process do not apply
Id. at 1404.
9
The court
1
unless Dorfmont can first show that she has a cognizable liberty
2
or due process interest in her security clearance.”
3
(citations omitted).
4
presumption against the issuance or continuation of a security
5
clearance, and because the availability of a security clearance
6
depends on an affirmative act of discretion by a granting
7
official, ‘no one has a “right” to a security clearance.’”
8
(quoting Egan, 484 U.S. at 528).
9
is no process due under the Constitution.”
Id. at 1403
However, “[b]ecause there is a strong
Id.
“Where there is no right, there
Id. (citations
United States District Court
For the Northern District of California
10
omitted).
11
Plaintiff makes here, that there is a right to pursue one’s chosen
12
profession.
13
“Dorfmont has not been deprived of the right to earn a living,”
14
only of “the ability to pursue employment requiring a Defense
15
Department security clearance,” which “stands on precisely the
16
same footing as the security clearance itself,” and “there is no
17
liberty interest in employment requiring such clearance.”
18
Federal Defendants note, Plaintiff may not evade this restriction
19
by defining his “chosen profession” so narrowly as to require a
20
security clearance.
21
“TSA engineer who repairs security screening devices used at
22
airports in the United States”).
23
The plaintiff in Dorfmont made the same argument that
The court rejected that argument, stating that
Id.
As
See 2AC ¶ 65 (defining his “chosen career” as
Plaintiff seeks to differentiate Dorfmont on its facts.
He
24
states that, in that case, the plaintiff had lost her security
25
clearance because she hired a Bulgarian native who “was serving a
26
life sentence in federal prison for his part in the attempted
27
hijacking of an airliner” to perform computer programming for her
28
in conjunction with a government defense contract.
10
Id. at 1400.
1
He contrasts those facts with his allegations here, that someone
2
stole his identity and committed some of the crimes identified on
3
the background check.
4
undermine the Ninth Circuit’s clear holding that there is no
5
protected liberty interest in employment that requires a security
6
clearance.
However, these differing allegations do not
7
Plaintiff cites two out-of-circuit decisions which he
8
contends involved individuals in similar situations and support
9
the conclusion that there is a due process right to pursue
United States District Court
For the Northern District of California
10
employment requiring a security clearance, Kartseva v. Dept. of
11
State, 37 F.3d 1524 (D.C. Cir. 1994), and Baillargeon v. Drug
12
Enforcement Adm., 638 F. Supp. 2d 235 (D. R.I. 2009).
13
the extent that the courts in Kartseva and Baillargeon may have
14
reached a different conclusion than the Ninth Circuit in Dorfmont
15
about the colorability of a constitutional due process claim based
16
on the revocation or denial of a security clearance, the Dorfmont
17
decision, which is directly addresses this point, is binding on
18
this Court.
19
However, to
Accordingly, the Court DENIES Plaintiff’s motion to amend to
20
assert a due process claim.
21
III. Claim under the Privacy Act
22
Federal Defendants contend that Plaintiff’s proposed Privacy
23
Act claim would be subject to dismissal because venue does not lie
24
in this Court for this claim.
25
not be maintained against Secretary Napolitano.
They also argue that this claim may
26
A. Venue
27
The Privacy Act provides that the proper venue for an action
28
to enforce its provisions is “in the district in which the
11
1
complainant resides, or has his principal place of business, or in
2
which the agency records are situated, or in the District of
3
Columbia.”
4
venue is improper in this district because Plaintiff resides in
5
the Central District of California, which is where he was
6
employed, and the records are situated in Washington, DC,
7
Arlington, Virginia or Winchester, Virginia.
5 U.S.C. § 552a(g)(5).
Federal Defendants argue that
Plaintiff responds that it is “not clear how venue in the
9
Central District would benefit the Federal Defendants” and that he
10
United States District Court
For the Northern District of California
8
is “not inconvenienced” by litigating in the Northern District of
11
California, which he appears to contend is relevant “[i]f the
12
venue provisions . . . permit venue in the plaintiff’s place of
13
residence for the convenience of the plaintiff.”
14
However, because the Privacy Act does not authorize venue in this
15
District, the convenience of the parties does not allow this claim
16
to be brought here.
Reply at 10.
17
To the extent that Plaintiff suggests that this Court has
18
pendent jurisdiction over this claim because of the claims against
19
Morpho, whose principal place of business is within this district,
20
this argument is unavailing.
21
venue, claims governed by a general venue statute may be brought
22
in the same district as a claim governed by a special venue
23
statute if the claims arise out of the same nucleus of facts.”
24
Norkol/Fibercore, Inc. v. Gubb, 279 F. Supp. 2d 993, 999 (E.D.
25
Wis. 2003) (citation omitted).
26
true.”
27
special venue statute . . . , which limits venue to specified
28
districts, such claims may be brought only in a district specified
“Under the doctrine of pendent
Id. (citation omitted).
“However, the converse is not
“Where claims are governed by a
12
1
by the statute.”
Id. (citation omitted).
“This is so because
2
congressional intent to limit the available districts is clear and
3
cannot be circumvented.”
Id. (citation omitted).
Thus, the Court DENIES Plaintiff’s motion to amend his
4
5
pleading to assert a Privacy Act claim because venue in this
6
district is not proper.
7
appropriate district.
Plaintiff may refile this claim in an
8
B. Claim against Secretary Napolitano
9
Federal Defendants also argue that the Privacy Act claim is
United States District Court
For the Northern District of California
10
not properly asserted against Secretary Napolitano.
Plaintiff
11
responds that he “is required to name the head of the agency under
12
the FTCA” and that he “opposes the dismissal of Ms. Napolitano
13
individually unless the Federal Defendants make a clear showing
14
that the Federal Agencies named separately remain responsible for
15
the acts complained of.”
Reply at 11.
Plaintiff does not assert this claim under the FTCA but
16
17
rather under the Privacy Act.
18
civil remedies applies only against federal agencies, not
19
individuals.
20
“individual may bring a civil action against the agency”); see
21
also Martinez v. Bureau of Prisons, 444 F.3d 620, 624 (D.C. Cir.
22
2006); Bruce v. United States, 621 F.2d 914, 916 n.2 (8th Cir.
23
1980).
24
Defendant for this claim.
25
IV.
26
The Privacy Act’s provision for
See 5 U.S.C. § 552a(g)(1) (stating that an
Therefore, the Secretary Napolitano is not an appropriate
FOIA claim
Federal Defendants purport to oppose Plaintiff’s motion to
27
amend to assert his FOIA claim for the same reasons that they
28
oppose amendment to assert the Privacy Act claims.
13
However, the
1
FOIA claim was already asserted in the 1AC, was not dismissed in
2
the Court’s prior order and, as a result, in the instant motion to
3
amend, Plaintiff does not seek leave to assert it; rather, it is
4
already asserted.
Federal Defendants implicitly acknowledge this by noting
6
that, “if the instant motion for leave to amend were to be denied
7
outright, the FOIA claim plead by Plaintiff in his FAC would still
8
be pending before this Court.”
9
the Court resolve the instant motion without regard to the venue
10
United States District Court
For the Northern District of California
5
issues and “permit the Federal Defendants an opportunity to raise
11
these venue issues in a separate motion under Rule 12(b)(3).”
Opp. at 10 n.3.
They suggest that
Id.
12
The Court declines to defer consideration of the venue issue
13
as to the Privacy Act claim this time and has addressed it above.
14
If Federal Defendants do bring an additional motion to dismiss the
15
FOIA claim based on improper venue, they should address whether
16
this defense was waived pursuant to Federal Rule of Civil
17
Procedure 12(h)(1) by omitting it from their motion to dismiss the
18
1AC or whether they would be willing to waive their venue defense
19
to the Privacy Act and FOIA claims to allow all claims to be tried
20
together.
21
to transfer the case, including the claims against Morpho, to the
22
Central District of California or another appropriate district.
23
The Court is also considering whether to transfer the case on its
24
own motion to Plaintiff’s home forum, the Central District of
25
California, which is where he was employed by and terminated by
26
Morpho.
The Court would also entertain a motion or stipulation
See 1AC ¶¶ 2, 8 & Ex. 1.
27
28
14
CONCLUSION
1
2
3
4
5
6
For the reasons set forth above, Plaintiff’s motion for leave
to file a 2AC is DENIED (Docket No. 42).
The case management conference currently set for May 1, 2013
is maintained.
If Federal Defendants intend to file a further motion to
7
dismiss the FOIA claim plead in the 1AC, they shall do so within
8
seven days of the date of this Order and shall include therein
9
their views regarding transfer of the case in its entirety to the
United States District Court
For the Northern District of California
10
Central District of California or another appropriate district.
11
If Federal Defendants do so, Plaintiff shall file a response
12
within seven days thereafter, including his views on transfer,
13
Federal Defendants shall file a reply seven days later and the
14
case management conference will be continued.
15
file a short brief addressing transfer only by the date that
16
Plaintiff’s response is due.
17
decided on the papers.
18
Morpho should also
Any such motion to dismiss will be
If no motion or stipulation to transfer is filed, then the
19
parties shall include their views on transfer in their joint case
20
management statement.
21
IT IS SO ORDERED.
22
23
24
Dated: April 11, 2013
CLAUDIA WILKEN
United States District Judge
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