LOUMIET v. UNITED STATES OF AMERICA et al

Filing 71

MEMORANDUM OPINION. Signed by Judge Colleen Kollar-Kotelly on 6/13/2017. (lcckk1)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
CARLOS LOUMIET,
Plaintiff,
Civil Action No. 12-1130 (CKK)

v.
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 crossexamine 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

16

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 lawmaking, 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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