Loumiet v. United States

968 F.Supp.2d 142

Carlos LOUMIET, Plaintiff,

v.UNITED STATES of America, et al., Defendants.

Civil Action No. 12–01130(CKK).

United States District Court, District of Columbia.

Sept. 12, 2013.

Andres Rivero, Jorge Alejandro Mestre, Charles Whorton, Kadian Blanson, Rivero Mestre LLP, Coral Gables, FL, for Plaintiff.

Reginald Maurice Skinner, U.S. Department of Justice, Washington, DC, for Defendants.

MEMORANDUM OPINION

COLLEEN KOLLAR–KOTELLY, District Judge.

Plaintiff Carlos Loumiet has 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. Plaintiff has also filed suit against Defendants Michael Rardin, Lee Straus, Gerard Sexton, and Ronald Schneck (collectively “Individual Defendants”), alleging claims under Bivens v. Six Unknown Named Agents of Fed. Bureau of Narcotics, 403 U.S. 388, 91 S.Ct. 1999, 29 L.Ed.2d 619 (1971), as well as various state law tort claims. Presently before the Court are the [10] Motion of the United States to Dismiss Pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6), and the [11] Motion of the Individual Defendants to Dismiss Plaintiff's Bivens Claims. Upon consideration of the pleadings ¹, the relevant legal authorities, and the record as a whole, the Court finds that Plaintiff's Bivens claims against the Individual Defendants must be dismissed pursuant to the statute of limitations, and his tort claims against the Individual Defendants must be dismissed pursuant to the Westfall Act. Accordingly, the [11] Motion of the Individual Defendants to Dismiss Plaintiff's Bivens Claims is GRANTED. Furthermore, the Court concludes that Plaintiff's claims for malicious prosecution and abuse of process against the United States Government under the Federal Tort Claims Act must be dismissed pursuant to the discretionary function exception. However, Plaintiff's FTCA claims alleging intentional infliction of emotional distress, invasion of privacy, negligent supervision, and conspiracy may proceed to the extent they are premised on statements made by OCC officials to the press. Consequently, the [10] Motion of the United States to Dismiss Pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) is GRANTED–IN–PART AND DENIED–IN–PART. Having ruled on both of these motions, the Court accordingly DENIES Plaintiff's [22] Motion for Oral Hearing on Defendants' Motions to Dismiss.

I. BACKGROUND

A. Factual Background

The Office of the Comptroller of the Currency (“OCC”) is the federal supervisor, examiner, and enforcing agency for national banks. In 1998, Hamilton Bank, N.A. (“Hamilton”), engaged in “adjusted price trades” or “ratio swaps” of debt instruments without properly recognizing the resulting losses, a form of bank and securities fraud. As the D.C. Circuit summarized the transaction:

Hamilton invested $22M in Russian debt instruments, which subsequently lost value in the summer of 1998. To conceal the loss, the Bank swapped the Russian debt instruments for other financial instruments. General accounting rules require such swaps to be accounted for as related transactions. By not doing so, the Bank made it appear as if it managed to sell its Russian assets at face value, thereby hiding their highly discounted sales prices.

Loumiet v. Office of the Comptroller of the Currency, 650 F.3d 796, 797–98 (D.C.Cir.2011) (internal citations and quotation marks omitted). In September 1999, OCC examiners discovered the fraud and the following April, the OCC issued a temporary cease-and-desist order requiring the Bank to take certain remedial measures. Loumiet, 650 F.3d at 798. Hamilton's Audit Committee retained an outside law firm, Greenberg Traurig LLP (“Greenberg”), which was tasked with conducting an independent investigation of the alleged fraud. Loumiet, 650 F.3d at 798; Compl. ¶ 27. A team of Greenberg attorneys, including Plaintiff Loumiet, reviewed certain documents, interviewed Hamilton officials, and ultimately issued a report to the Bank's Audit Committee on November 15, 2000. Pl.'s Opp'n. at 3. Plaintiff alleges that he was only peripherally involved in the preparation of this report. Pl.'s Opp'n at 3; Compl. ¶¶ 28–30. The November 2000 report found “no convincing evidence” to establish that Bank Executives “intentionally misled” the Bank's outside auditor or the Bank's own Audit Committee. Loumiet, 650 F.3d at 798; Compl ¶ 30.

In January 2001, the OCC sent Greenberg a letter responding to the November 2000 report. Pl.'s Opp'n at 3; Compl. ¶ 36. The letter informed the firm that the OCC had obtained sworn testimony from an officer at one of the counterparties to Hamilton in the adjusted price trades. Pl.'s Opp'n at 3. According to the OCC, the officer testified that Hamilton's executives knowingly executed the adjusted price trades, contradicting the report issued by Plaintiff's firm. Loumiet, 650 F.3d at 798. The OCC also orally identified six “red flags”, facts which tended to show that the Bank's management did knowingly participate in the fraudulent transactions. Pl.'s Opp'n at 4. Plaintiff Loumiet responded to the OCC's letter and addressed the six “red flags” in a follow-up report to the Bank's Audit Committee. This letter reaffirmed the conclusions of his firm's earlier report. Pl.'s Opp'n at 4–5.

In March 2001, Plaintiff wrote to Treasury Inspector General Jeffrey Rush and other Treasury Department officials, expressing concerns about the OCC's enforcement action against the Bank. Pl.'s Opp'n at 5. Plaintiff claimed that during his participation in the OCC investigations, he became aware of improper conduct by OCC examiners, including conduct by three of the Individual Defendants. Plaintiff requested an independent investigation by the Office of Inspector General (“OIG”) into what he described as “highly unusual and disturbing” behavior by OCC staff, including allegations that OCC examiners, including Defendant Rardin, made racist comments in dealing with Hamilton's Hispanic employees, and disregarded their own agency's regulations and precedents. Pl.'s Opp'n at 5. In April 2001, Plaintiff sent the Treasury Secretary and the OIG a second letter, again expressing concerns regarding the OCC's regulatory actions. Id. On July 18, 2001, the Treasury Inspector General notified Plaintiff that the OIG had “considered the information and argument [he] presented, and ... concluded that it does not provide a basis for the Office of Inspector General to consider further investigation ...” Gov't MTD, Exhibit 3. On December 14, 2001, Plaintiff filed a lawsuit against the OCC in the Southern District of Florida alleging that the OCC's supervisory actions were motivated by anti-Hispanic bias. Hamilton Bank, N.A. v. OCC, Case No. 01–cv–4994 (S.D.Fla.). This case was voluntarily dismissed in 2002.

On January 11, 2002, after concluding that Hamilton was operating in an unsafe and unsound manner, the OCC closed the Bank and appointed the Federal Deposit Insurance Corporation as its receiver. Pl.'s Opp'n. at 6; Loumiet, 650 F.3d at 798. Subsequently, a grand jury indicted three of the Bank's senior officers for bank and securities fraud in connection with the adjusted price trades. United States v. Masferrer, 514 F.3d 1158, 1160–61 (11th Cir.2008). The former CFO and President pled guilty and were sentenced to 28 months in prison, while the Bank's CEO was convicted and sentenced to 30 years in prison. Id. at 1161. Ultimately, the Eleventh Circuit affirmed the conviction of the Bank's CEO. Id. at 1165.

On November 6, 2006, the OCC initiated an enforcement proceeding against Plaintiff, pursuant to the Financial Institutions Reform, Recovery, and Enforcement Act (“FIRREA”) of 1989, Pub.L. No. 101–73, 102 Stat. 183 (codified in scattered sections of Title 12 of the U.S.Code). Compl. ¶ 16; Loumiet, 650 F.3d at 799. The action, brought by the OCC's Enforcement and Compliance Division, alleged that Plaintiff was an “institution-affiliated party” (“IAP”) who, as part of his role in the independent investigation of Hamilton, had “knowingly or recklessly ... breach[ed his] fiduciary duty,” and as a result “caused ... a significant adverse effect” on the Bank. Loumiet, 650 F.3d at 798 (quoting 12 U.S.C. § 1813(u)(4)). The OCC sought a $250,000 monetary penalty against Plaintiff and sought to permanently ban him from representing FDIC-insured banks. Pl.'s Opp'n. at 7. Plaintiff claims that this prosecution as well as the surrounding actions by OCC officials were made in retaliation for his letters expressing concern over bias within the OCC. Id. During the ensuing three-week bench trial, Plaintiff alleges that the Individual Defendants aggressively pressed unsubstantiated charges and made false statements to the press covering the proceeding, both of which caused substantial damage to his reputation and career. Compl. ¶ 15; Pl.'s Opp'n. at 7–12. Plaintiff similarly alleges that the Individual Defendants violated various standards of professional conduct in pursuing this action, including concealing evidence. Id. Ultimately, on June 18, 2008, an Administrative Law Judge (“ALJ”) recommended complete dismissal of the Division's claims. Compl. ¶ 16. On July 27, 2009, the Comptroller, reviewing the ALJ's recommendation, agreed dismissal of all claims against Loumiet was appropriate, but on different grounds from the ALJ. Id.

Following the Comptroller's dismissal of the administrative proceeding, on August 26, 2009, Plaintiff filed an application with the ALJ for attorney's fees under the Equal Access to Justice Act (“EAJA”), 5 U.S.C. § 504. Compl. ¶ 17; Loumiet, 650 F.3d at 799. On July 20, 2010 the ALJ issued a recommended decision denying the application. Id. Plaintiff appealed the denial of his EAJA claim to the D.C. Circuit, which unanimously reversed the agency's determination, concluding that “the Comptroller was not ‘substantially justified’ in bringing the...