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Rivera v. Holder

October 30, 2009

ANGEL RUIZ RIVERA, PLAINTIFF,
v.
ERIC HOLDER,*FN1 ET AL., DEFENDANTS.



The opinion of the court was delivered by: Reggie B. Walton United States District Judge

MEMORANDUM OPINION

Plaintiff Angel Ruiz Rivera, who is proceeding pro se, brings this action against the Attorney General, in his official capacity, and other attorneys employed by the United States Department of Justice ("DOJ"), alleging that under the Fifth Amendment of the United States Constitution, the Federal Torts Claims Act, 28 U.S.C. § 1346(b) ("FTCA"), and Bivens v. Six Unknown Named Agents, 403 U.S. 388 (1971), the defendants improperly caused the "nonprofit technical and higher education institution he founded in Bayamon, [Puerto Rico]," the Instituto de Educacion Universal ("Instituto"), of which he is the President and fiduciary agent, to be maliciously prosecuted by the United States Attorney's Office, resulting in $28 million in taxes being assessed against the plaintiff personally. Complaint ("Compl.") ¶ 9.*fn2 The plaintiff contends that the tax liability should have been imposed on the Instituto instead. Compl. ¶¶ 5-7. The plaintiff also challenges the alleged confiscation of over $2.2 million from the Instituto through other legal proceedings. Compl. ¶¶ 2-5, 8-10.*fn3 Currently before the Court is the defendants' motion pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) for dismissal of the plaintiff's complaint on the grounds of the Court's lack of subject-matter jurisdiction, that collateral estoppel and the defendants' sovereign immunity stand as bars to the plaintiff's complaint, and the plaintiff has failed to state a claim upon which relief can be granted.*fn4 See Defendants' Motion to Dismiss the Complaint ("Defs.' Mot."); Memorandum of Points and Authorities in Support of Defendants' Motion to Dismiss the Complaint ("Defs.' Mem.") at 1. The plaintiff opposes the motion.*fn5 For the following reasons, the Court must grant the defendants' motion.

I. BACKGROUND

The present dispute arises from a United States Department of Education ("DOE") audit of the Instituto that occurred in 1994 and 1995. Compl. ¶ 4. The Instituto was a "private, nonprofit educational institution based in Puerto Rico, which received federal student financial assistance funds under Title IV of the Higher Education Act of 1965." Defs.' Mem. at 4. The DOE "administered these financial assistance funds[,] and[] in 1994, the DOE's Inspector General performed an audit[,] which resulted in findings of 'clock hour,' 'excess cash,' and 'refund' violations by the [Instituto]."*fn6 Id. As a result of these findings, "the DOE declared [the Instituto] ineligible to participate in federal student aid programs, imposed a substantial fine, and instituted collection proceedings to recover $1,284,900 in overcharges, $756,864 in excess cash receipts, and $655,554 in unpaid refunds." Id. Pursuant to these debts and liabilities, the DOE confiscated over $2.263 million from the Instituto and the plaintiff in 1997 and the IRS attempted to collect $28 million from the plaintiff in 1998. Compl. ¶¶ 8-9.

Beginning in 1996, the plaintiff brought a series of administrative claims against the DOE to challenge the findings. See Compl. ¶ 12-14; Defs.' Mem. at 5. Although an administrative law judge granted "a partial reversal of the 'clock hour' finding," on appeal of the law judge's findings the Secretary of Education "reinstated the DOE's initial findings of a 'clock hour' violation and upheld the other findings of 'excess cash' and 'refund' violations, thus reinstating [the Instituto's] full liabilities." Defs.' Mem. at 4-5. The plaintiff sought review of the Secretary's decision from the United States District Court for the District of Puerto Rico. Compl. ¶ 15. "[T]he district court . . . granted summary judgment in favor of [the] DOE," Defs.' Mem. at 4-5, holding that the DOE's actions "were not arbitrary and capricious[,] . . . [had] ample evidence to support its conclusion[,] . . . [and showed no evidence of] bad faith, improper conduct, or manipulation by [the DOE] that would permit the Court to reopen the established agency record." Instituto de Educacion Universal, Inc. v. U.S. Dep't of Educ., 341 F. Supp. 2d 74, 80-84 (D.P.R. 2004). The First Circuit affirmed the district court's decision in 2007. See Instituto de Educacion Universal, Inc. v. U.S. Dep't of Educ., No. 06-1562, 2007 WL 1519059, at *1 (1st Cir. May 11, 2007).

Throughout the plaintiff's administrative complaint process and the subsequent litigation in federal court, the plaintiff has maintained that the DOE's audit findings pertaining to the clock hour refund and excess cash violations conflicted with clear and convincing evidence that called for the opposite conclusions. See generally Compl. The plaintiff further alleges in this case that the audit findings were tainted by the fraudulent actions by both DOE's legal counsel and further perpetuated by the defendants. Specifically, the plaintiff asserts that the DOE [o]bstruct[ed] justice [by] deliberately suppressing the . . . fact [that Auditor Nater was expelled;] . . . suborned the perjury of his supervisor, Puerto Rico's OIG Office Chief Auditor Porfirio Rios[;] . . . suborned the perjury of corrupt [Internal Revenue Board] auditor Felix Lugo[;] . . . and intimidated the . . . independent Certified Public Accountants . . . that [the plaintiff] had [called upon] as witnesses [in support of his case].

Compl. ¶ 41. The plaintiff seeks to recover civil damages for injuries arising from the defendant attorneys' representation of the DOE, predicated on his theory that the defendants' representation wrongfully perpetuates the DOE's alleged fraud, and that the defendants have ignored exculpatory evidence in their possession that would have assisted the plaintiff in prior proceedings. Compl. ¶ 28. It is the plaintiff's position that because the defendants "knew or should ha[ve] reasonably known" that the available evidence contradicted the basis for the DOE's defense, the plaintiff's rights were violated. See generally Pl.'s Opp'n. The plaintiff therefore requests that the Court compel the defendants to "produce . . . suppressed exonerating evidence and to dismiss . . . all the . . . imputed liabilities against the [p]laintiff."*fn7 Compl. at 28. As noted above, the defendants have now filed a motion to dismiss the plaintiff's claims on the grounds that the Court lacks subject-matter jurisdiction, that collateral estoppel and the defendants' sovereign immunity stand as bars to the plaintiff's complaint, and that the plaintiff has failed to state a claim upon which relief can be granted. See Defs.' Mem.

II. STANDARDS OF REVIEW

A. Rule 12(b)(1) Motion to Dismiss for Lack of Subject-Matter Jurisdiction

In deciding a motion to dismiss for lack of subject-matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1), a Court is not limited to the allegations set forth in the complaint, but "may consider materials outside of the pleadings in deciding whether to grant a motion to dismiss for lack of jurisdiction[.]" Jerome Stevens Pharms., Inc. v. FDA, 402 F.3d 1249, 1253 (D.C. Cir. 2005). Moreover, under Rule 12(b)(1), "it is to be presumed that a cause lies outside [the federal courts'] limited jurisdiction," Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994), unless the plaintiff establishes by a preponderance of the evidence that the Court has jurisdiction, see, e.g., Hollington v. Duff, 444 F. Supp. 2d 61, 63 (D.D.C. 2006).

B. Rule 12(b)(6) Motion to Dismiss for Failure to State a Claim

A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) tests whether the plaintiff properly has stated a claim upon which relief may be granted. Woodruff v. DiMario, 197 F.R.D. 191, 193 (D.D.C. 2000). For a complaint to survive a Rule 12(b)(6) motion, it need only provide "a short and plain statement of the claim showing that the pleader is entitled to relief," Fed. R. Civ. P. 8(a)(2), in order to "give the defendant fair notice of what the claim is and the grounds on which it rests," Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citation omitted). "Although detailed factual allegations are not necessary to withstand a Rule 12(b)(6) motion to dismiss, to provide the grounds of entitlement to relief, a plaintiff must furnish more than labels and conclusions or a formulaic recitation of the elements of a cause of action." Hinson ex rel N.H. v. Merritt Educ. Ctr., 521 F. Supp. 2d 22, 27 (D.D.C. 2007) (quoting Twombly, 550 U.S. at 555) (internal quotation marks omitted). Or, as the Supreme Court more recently stated, "[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, ___ U.S. ___, ___, 129 S.Ct. 1937, 1949 (2009) (quoting Twombly, 550 U.S. at 570). A claim is facially plausible "when the plaintiff pleads factual content that allows the court to draw a reasonable inference that the defendant is liable for the misconduct alleged." Id. (quoting Twombly, 550 U.S. at 556). A complaint alleging facts which are "'merely consistent with' a defendant's liability . . . 'stops short of the line between possibility and plausibility of 'entitlement to relief.'" Id. (quoting Twombly 550 U.S. at 557) (brackets omitted). Moreover, "[a] dismissal with prejudice is warranted only when a trial court determines that the allegation of other facts consistent with the challenged pleading could not possibly cure the deficiency." Firestone v. Firestone, 76 F.3d 1205, 1209 (D.C. Cir. 1996) (internal quotation marks and citations omitted) (emphasis in original). Finally, in evaluating a Rule 12(b)(6) motion, "[t]he complaint must be liberally construed in favor of the plaintiff, who must be granted the benefit of all inferences that can be derived from the facts alleged," Schuler v. United States, 617 F.2d 605, 608 (D.C. Cir. 1979) (internal quotation marks and citations omitted), and the Court "may consider only the facts alleged in the complaint, any documents either attached to or incorporated in the complaint and matters of which [the Court] may take judicial notice[,]" E.E.O.C. v. St. Francis Xavier Parochial Sch., 117 F.3d 621, 624 (D.C. Cir. 1997) (footnote omitted).

III. LEGAL ...


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