Chien v. United States

ANDREW CHIEN, pro se, Plaintiff, v. UNITED STATES, et al., Defendants.

Civil Action No. 17-2334 (CKK)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

September 23, 2019

MEMORANDUM OPINION

Presently before this Court is a [38] Motion to Dismiss filed by Defendants The United States of America (the "United States") and the United States Securities and Exchange Commission (the "SEC").¹ Defendants move to dismiss pro se Plaintiff's [29] First Amended Complaint, pursuant to Fed. R. Civ. P. 12(b)(1) and 12(b)(6), on grounds that this Court does not have jurisdiction over the causes of action alleged by Plaintiff Andrew Chien ("Plaintiff" or "Mr. Chien") and further, that Plaintiff has failed to state a claim upon which relief can be granted.

Also pending before this Court are two motions filed by Plaintiff subsequent to the filing of the Motion to Dismiss: (1) Plaintiff's [40] Motion which requests: (a) an Injunction Order pursuant Rule 65(a); (b) an adjustment of the time for Defendants to file a reply in support of their Motion to Dismiss; and (c) the filing of an administrative record, and (2) Plaintiff's [42] Motion for Approv[al] [of a ] Supplemental Pleading to Add BrantMorris as a Defendant Based on Rule 15(d). Pursuant to a November 13, 2018 Minute Order, this Court DENIED Plaintiff's request for an adjustment of time for Defendants' reply and DEFERRED ruling on Plaintiff's motion for an injunction order and the filing of an administrative record and his motion to add Brant Morris as a defendant.

In the November 13, 2018 Minute Order, this Court noted that while Defendants had replied to Plaintiff's [40], [42] motions, Plaintiff had not filed a reply in support of either motion, and the time for doing so had passed. Approximately two weeks later, Plaintiff filed a [47] Supplemental Memorandum (reply) in response to his [40] Motion for injunctive relief and filing of an administrative record and a [48] Supplemental Memorandum (reply) in support of his [42] Motion to add Brant Morris as a defendant. At the same time, Plaintiff filed a [46] Supplemental Memorandum (surreply) in support of his [41] Opposition to Defendants' motion to dismiss.

Notably, Plaintiff did not seek approval from opposing counsel or leave of court to late file any reply or to file a surreply, and in the normal course, such documents filed by Defendant would be stricken from the docket as untimely and/or unapproved. In the interest of judicial efficiency, however, since this Court is resolving all outstanding motions by means of this Memorandum Opinion and the accompanying Order, and because the Plaintiff in this case is pro se, for purposes of this Memorandum Opinion only, the Court will treat Plaintiff's [47] Supplemental Memorandum as a reply to his [40] Motion for injunctive relief and filing of an administrative record and his [48] Supplemental Memorandum as a reply to his [42] Motion to add Brant Morris as a defendant. Plaintiff's [46] Supplemental Memorandum (surreply) in support of his Opposition to the Defendants' Motion to Dismiss will be considered by this Court only to the extent that it is responsiveto the issues involved in this case and addressed in the Defendants' Motion and/or their Reply. See Pl.'s Surreply, ECF No. 46, at 7-8. The remaining portions of Plaintiff's Surreply (pages 1-6) are not responsive to the Defendants' pleadings insofar as Plaintiff attempts to allege claims pursuant to the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §§ 1961-1968, which have no bearing on the existing claims against the Defendants in this case. Accordingly, all three Motions are fully briefed and ready for resolution.²

I. Background

Plaintiff's [29] First Amended Complaint discusses in detail his business conflicts with a third party, Richard Freer, which are also the subject of a civil action pending before this Court, captioned Chien v. Freer, 18-cv-2050. In that case, pro se Plaintiff Andrew Chien alleges claims for common law tort, securities law violations, RICO and fraud. The Complaint in that case also makes references to certain debt collections against Mr. Chien, which are not an issue in the instant case before this Court. As a preliminary matter, this Court notes that Mr. Chien filed in this case documents entitled [49] "Supplement[ ] to Support Chien's Pleadings from Fair Debt Collection Practices Act" and [50]"Supplement[ ] (2) to Support Chien's Pleadings from Fair Debt Collection Practices Act." Because these documents are unrelated to the claims pending in this matter, the Court orders that these two Supplements, ECF Nos. 49 and 50, shall be STRICKEN from the docket in this case.

To put in context the origins of Plaintiff's dispute with the SEC, the Court will briefly review the ongoing disputes between Mr. Chien and Mr. Freer, although many of these disputes pre-date Defendants' involvement. Mr. Freer was a former officer of Commonwealth Biotechnologies, Inc.("CBI"), which filed for bankruptcy in January 2011. First Am. Compl., ECF No. 29, ¶¶ 16, 17, 23, 28. Mr. Freer served as an operating director of CBI during bankruptcy, while Mr. Chien was either a CBI shareholder or a representative of Bill Guo, another shareholder and sometime Chairman of CBI's board. First Am. Compl., ECF No. 29, ¶¶ 15, 21. Mr. Freer made compensation claims from CBI, while Mr. Chien claimed that Mr. Freer was trying to embezzle money from CBI, and both parties sought control of CBI. Id. at ¶¶ 17-18, 20-21.

Ultimately, Mr. Freer sued Mr. Chien for defamation in a Virginia state court in February 2012, and he obtained a default judgment in the amount of $1,600,000.00, plus interest. Id. at ¶¶ 22, 26. Mr. Freer collected on the judgment by initiating a debt collection action in Connecticut in September 2012. Id. at ¶¶ 11-12. Mr. Chien was incarcerated in Virginia twice for contempt of court in relation to Mr. Freer's defamation action. Id. at ¶¶ 10, 31-32. In February 2014, presumably in partial fulfillment of the default judgment, a Virginia state court ordered delivery of China Bull Management, Inc. ("CHBM") stocks to Mr. Freer and in September 2014, Island Stock Transfer, Florida issued a stock certificate for shares of CHBM for Mr. Freer. Id. at ¶37. Through voting these shares, Mr. Freer triedto usurp Mr. Chien's control of CHBM, which Mr. Chien contested. Id. at ¶¶ 38-39. Mr. Freer re-registered CHBM from Nevada to Virginia in December 2016, and Mr. Chien re-registered CHBM from Nevada to Wyoming as of January 2017. Id. at ¶¶ 46-47, 54.

A. The SEC's Role

On December 9, 2016, Mr. Freer attempted to update the EDGAR access codes for CHBM with the SEC, while Mr. Chien apparently was permitted to use the EDGAR access codes to make filings on behalf of CHBM as late as December 2016.³ First Am. Compl., ECF No. 29, ¶ 45. The SEC's involvement with Plaintiff followed these competing attempts to access the SEC's EDGAR system. On February 13, 2017, Mara Ransom ("Ms. Ransom"), an SEC employee in the Division of Corporate Finance, which administers EDGAR codes, sent Mr. Chien a letter from the SEC indicating that "Richard J. Freer had[d] challenged Chien's representation of CHBM." Id. at ¶ 3. In that letter, she noted that "[w]hile the information [the SEC] ha[d] considered to date [was] not dispositive, it [did] raise sufficient concerns to justify suspending any company filings made on EDGAR that ha[d] not yet been processed and disseminated, as well as deactivating the company's CIK number and EDGAR access codes until the question is resolved." App'x to the Pl's Compl., ECF 6, at 4 (A1).⁴ The letter suggested that Mr. Chien could provide one of two types of documentation to establish who controlled CHBM to support reactivating the company's CIK number to allow future filings. Id.

Mr. Chien has acknowledged that Mr. Freer provided the SEC with some forms tosupport his claim that he should receive EDGAR access, but he alleges that those forms were false, and they did not establish that Mr. Freer as a "control person of CHBM." First Am. Compl., ECF No. 29, ¶¶ 3-4, 48-55. Mr. Chien does not indicate that he provided any documentation to the SEC, as was requested in the February 13, 2017. On December 14, 2017, the SEC released the EDGAR access codes for CHBM to Mr. Freer. Id. ¶ 4; Pl.'s App'x II, ECF No. 22-2, at 3-4. Mr. Chien contends further that the SEC did not provide him with documentation regarding EDGAR access codes or communications with Mr. Freer in a timely manner, although he did receive this documentation on September 11, 2017, through a FOIA request. Id. ¶ 47.

B. Plaintiff's Alleged Causes of Action

Mr. Chien alleges that the SEC staff withheld from him and eventually provided to Mr. Freer certain access codes that CHBM requires in order to make its filings with the SEC. Mr. Chien and Mr. Freer both claim to be the proper holder of those codes. Count I of Plaintiff's First Amended Complaint alleges that Ms. Ransom and SEC Commissioner Kara Stein ("Commissioner Stein") violated 28 U.S.C. §2680 by failing to exercise due care and making misrepresentations in connection with accepting a company registered in Virginia as the legitimate CHBM. First Am. Compl., ECF No. 29, ¶ 63.

Count 2 alleges that Ms. Ransom and Commissioner Stein violated 28 U.S.C. §2680 by failing to exercise good care and by abusing process because they acted to protect Mr. Freer's fraud. Id. ¶ 64. Count 3 alleges that Ms. Ransom aided and abetted Mr. Freer in "making false identi[t]y of CHBM." Id. ¶ 65. Count 4 alleges that Ms. Ransom, in violation of Mr. Chien's alleged constitutional right to operate a business, damaged his employment and reputation and caused him to suffer economic loss when he could notmake filings on behalf of CHBM. Id. ¶ 66. Furthermore, Mr. Chien alleges that through her failure to "judge the environment under which Freer obtained the Stock Certificate," Ms. Ransom "supported" Mr. Chien's alleged false imprisonment....