Loumiet v. United States

948 F.3d 376

Carlos LOUMIET, Esquire, Appellee

v.UNITED STATES of America, Appellee

Michael Rardin, et al., Appellants

No. 18-5020

United States Court of Appeals, District of Columbia Circuit.

Argued December 13, 2018

Decided January 28, 2020

Tyce R. Walters, Attorney, U.S. Department of Justice, argued the cause for appellants. With him on the briefs were Jessie K. Liu, U.S. Attorney, and Mark B. Stern, Attorney.

Carlos Loumiet, pro se, argued the cause for appellee. On the brief was Andrés Rivero.

Before: Garland, Chief Judge, Katsas, Circuit Judge, and Williams, Senior Circuit Judge.

Katsas, Circuit Judge:

In Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics , 403 U.S. 388, 91 S.Ct. 1999, 29 L.Ed.2d 619 (1971), the Supreme Court held that the Fourth Amendment creates an implied damages action for unconstitutional searches against line officers enforcing federal drug laws. In this case, we consider whether the First Amendment creates an implied damages action against officials in the Office of the Comptroller of the Currency (OCC) for retaliatory administrative enforcement actions under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA). Consistent with the Supreme Court’s marked reluctance to extend Bivens to new contexts, we hold that the First Amendment does not create such an implied damages action.

I

In 1999, the OCC began an investigation of Hamilton Bank and three of its executives for the allegedly fraudulent concealment of some $22 million in loan losses. The bank retained an outside law firm to investigate the charges. Carlos Loumiet, then a partner at the law firm, prepared two reports. The first one, made for the bank’s auditing committee and shared with the OCC, was issued in November 2000. It found no convincing evidence that the executives had fraudulently concealed the losses. The OCC was skeptical and provided Loumiet with additional evidence. In response, Loumiet prepared a second report, issued in March 2001. It concluded that the disputed transactions were poorly handled but still found insufficient evidence to conclude that the executives had fraudulently concealed the losses. The OCC disagreed and placed the bank into a receivership. Later, the executives were indicted. Two of them pleaded guilty; the third, Hamilton’s former chairman and chief executive officer, was convicted and sentenced to thirty years of imprisonment. United States v. Masferrer , 514 F.3d 1158 (11th Cir. 2008).

According to Loumiet, OCC officials engaged in various forms of misconduct during the investigation. The alleged misconduct included lying to Hamilton officers, threatening to retaliate against its lawyers, and making racist statements. In March and April 2001, Loumiet raised these allegations with the Secretary of the Treasury, the Inspector General of the Treasury Department, and the Comptroller. In June 2001, Loumiet met with an attorney in the Inspector General’s Office to discuss his allegations. In July 2001, the Inspector General concluded that there was no basis to investigate them any further. Nonetheless, Loumiet represented the bank in suing the OCC for alleged civil-rights violations. The bank voluntarily dismissed its suit in 2002. Order of Dismissal, Hamilton Bank, N.A. v. Comptroller , No. 01-4994 (S.D. Fla. Oct. 16, 2002), ECF Doc. 64.

In 2006, after the Hamilton executives were convicted, the OCC brought an administrative enforcement action against Loumiet, one of his partners, and his law firm. The OCC proceeded under FIRREA, which allows it to seek civil penalties from "any institution-affiliated party" who breaches a fiduciary duty to a federally-insured bank and thereby "causes or is likely to cause more than a minimal loss" to the bank. 12 U.S.C. § 1818(i)(2)(B). In turn, FIRREA defines an "institution-affiliated party" to include "any attorney" who "knowingly or recklessly participates in" a breach of fiduciary duty that "caused or is likely to cause more than a minimal financial loss to, or a significant adverse effect on" the bank. Id. § 1813(u)(4). The law firm and Loumiet’s partner settled with the OCC and agreed to pay $750,000 in fines. Loumiet contested the charges against him. An Administrative Law Judge recommended their dismissal on the ground that Loumiet had not breached any fiduciary duty. Recommended Decision, In re Loumiet , OCC-AA-EC-06-102 (June 18, 2008). The Comptroller disagreed, but nonetheless dismissed on the alternative ground that Loumiet had not caused the bank any harm. Final Decision & Order, In re Loumiet , OCC-AA-EC-06-102 (July 27, 2009).

Loumiet sought fees under the Equal Access to Justice Act (EAJA). In pertinent part, EAJA allows a prevailing private party in an administrative adjudication to recover "fees and other expenses" unless the adjudicator "finds that the position of the agency was substantially justified." 5 U.S.C. § 504(a)(1). The OCC denied fees, but we reversed on the ground that there was no substantial justification for the OCC’s position that Loumiet could have significantly harmed the bank. Loumiet v. OCC , 650 F.3d 796 (D.C. Cir. 2011). We reasoned that even if Loumiet’s false exoneration of the executives caused the bank to "retain the dishonest officers," there was no evidence that this harmed the bank. Id. at 800. On remand, Loumiet was awarded $675,000.

Loumiet then filed this lawsuit against the United States and four OCC officials. He asserted Bivens claims against the officials as well as various tort claims. The Bivens claims rest on the theory that the officials caused the OCC enforcement action in retaliation for Loumiet’s protected speech criticizing the OCC investigation, in violation of the First and Fifth Amendments of the Constitution. The district court held that the Bivens claims were untimely, and it dismissed the tort claims on other grounds. Loumiet v. United States , 65 F. Supp. 3d 19 (D.D.C. 2014). We reversed both rulings. Loumiet v. United States , 828 F.3d 935 (D.C. Cir. 2016).

On remand, the district court declined to dismiss the First Amendment Bivens claims. Loumiet v. United States , 255 F. Supp. 3d 75, 83–96 (D.D.C. 2017). The court reasoned that prior decisions had already "recognized the existence of a Bivens implied cause-of-action for retaliatory prosecution in violation of the First Amendment." Id. at 84. Likewise, the court concluded that the procedural and remedial protections provided under FIRREA do not counsel against recognizing an implied damages action. See id. at 85–90. The court further held that the complaint plausibly stated First Amendment claims against the OCC officials who allegedly "induce[d] an enforcement action against Plaintiff in reprisal for critical statements that he made against them and the OCC more generally." Id. at 95. And it denied those officials qualified immunity on the ground that the "First Amendment right to be free from retaliatory prosecution" was clearly established long before 2006. Id. at 93 (quotation marks omitted). Finally, the court held that the Fifth Amendment count did not state a claim, converted the tort claims against the individual defendants into claims against the United States, and dismissed some but not all of the tort claims. Id. at 97–100.

After the Supreme Court decided Ziglar v. Abbasi , ––– U.S. ––––, 137 S. Ct. 1843, 198 L.Ed.2d 290 (2017), the officials moved for reconsideration. The district court denied the motion. Loumiet v. United States , 292 F. Supp. 3d 222 (D.D.C. 2017). In light of Abbasi , the court assumed that Loumiet was seeking to extend Bivens into a "new context." Id. at 229. But the court concluded that the "special factors counselling hesitation" in Abbasi , which involved programmatic actions undertaken by high-ranking officials in response to terrorist attacks, were not present in this case. Id. at 227 (quotation marks omitted); see id. at 229–31. Finally, the court discounted the significance of EAJA in its special-factors analysis because that statute was not enacted as part of FIRREA. Id. at 232–38.

The OCC officials now seek review of the district court’s refusal to dismiss the First Amendment claims against them.

II

We begin, as we must, with our jurisdiction. See Steel Co. v. Citizens for a Better Env’t , 523 U.S. 83, 94, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998). We have jurisdiction to review "final decisions" of the district court. 28 U.S.C. § 1291. Under the collateral-order doctrine, the "denial of a claim of qualified immunity, to the extent that it turns on an issue of law, is an appealable ‘final decision’ " within the meaning of section 1291. Mitchell v. Forsyth , 472 U.S. 511, 530, 105 S.Ct. 2806, 86 L.Ed.2d 411 (1985). We thus have jurisdiction to decide whether the OCC officials are entitled to qualified immunity on the First Amendment claims.

We also have jurisdiction to decide whether the First Amendment confers upon Loumiet an implied cause of action for damages. Because "the recognition of the entire cause of action" is "directly implicated by the defense of qualified immunity," both questions are "properly before us on interlocutory appeal." Wilkie v. Robbins , 551 U.S. 537, 549 n.4, 127 S.Ct. 2588, 168 L.Ed.2d 389 (2007) (quotation marks omitted); see Liff v. Office of Inspector Gen. for U.S. Dep’t of Labor , 881 F.3d 912, 917–18 (D.C. Cir. 2018).

III

In this court, the OCC officials contend that the First Amendment creates no implied cause of action for damages and that, in any event, they are entitled to qualified immunity on the facts alleged by Loumiet. We begin with the cause-of-action question, which is antecedent to the question of qualified immunity. See Liff , 881 F.3d at 918 ("it is appropriate to determine the availability of a Bivens remedy at the earliest practicable phase of litigation").

A

The Free Speech Clause of the First Amendment provides that "Congress shall make no law ... abridging the freedom of speech." Neither the First Amendment, nor...