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Karen Hudes v. Aetna Life Insurance Co.

August 30, 2011


The opinion of the court was delivered by: James E. Boasberg United States District Judge


Plaintiff Karen Hudes worked as a lawyer at the World Bank for twenty years before being terminated. Instead of filing a straightforward wrongful-termination suit, she has tossed together in this pro se action a welter of claims under myriad federal statutes against the Bank, its accountants and outside counsel, and her insurance company. Because Plaintiff's Second Amended Complaint fails to state any claims for which this Court can grant her relief -- either because of a lack of subject matter jurisdiction or a failure to plead supporting facts -- the Court will dismiss this suit.

I.Factual Background

The International Bank for Reconstruction and Development (IBRD), commonly known as the World Bank, is "an international financial institution whose purposes include assisting the development of its member nations' territories, promoting and supplementing private foreign investment, and promoting long range balanced growth in international trade." Mendaro v. The World Bank, 717 F.2d 610, 611 (D.C. Cir. 1983). The World Bank achieves these objectives by "mak[ing] direct loans to its members or to businesses located in the territories of its members; participat[ing] in and guarantee[ing] loans placed through private investment channels; issu[ing], guarantee[ing], and acquir[ing] its own securities; and invest[ing] in and guarantee[ing] other securities." Id. at 612. To carry out its work, the Bank has thousands of employees who are citizens of more than 100 different countries. Id.

As set forth in her tangled Second Amended Complaint, which must be presumed true for purposes of this Motion, Plaintiff was employed as a lawyer in the legal department of the Bank. See Sec. Am. Compl., ¶ 11. While there, she worked on the Philippines Banking Sector Reform Loan (BSRL). Id. She alleges that in the course of this work, she "requested the [Bank's] resident Country Director in the Philippines to inform the government of the Philippines that a waiver from the Board of Executive Directors would be required in order to disburse the second and third tranches of [the Bank's] loan to the government." Id. Instead of taking this action, "the Country Director reassigned Plaintiff from the Philippines desk one week before the decision meeting on the BSRL." Id. She does not indicate precisely when these events occurred; however, paragraph 12 of the Second Amended Complaint suggests this was during or prior to 2007. Plaintiff alleges that she "subsequently reported to [the Bank's] Operations Evaluation Department (OED) and Audit Committee then-President Joseph Estrada's breach of the Philippines securities laws and corrupt sale of shares owned by Philippines government pension funds in Philippines National Bank . . . ." Id., ¶ 12. Thus began the controversy Plaintiff describes with her former employer.

Plaintiff identifies herself as a "gatekeeper attorney" and a "whistleblower," id., ¶¶ 6, 20, and alleges that the Bank "terminated [her] employment illegally in retaliation for reporting corruption and securities law violations to [the Bank's] Audit Committee and US Congressional committees charged with oversight" of the Bank. Id., ¶ 13. Although Plaintiff does not present anything close to a coherent timeline or description of the events surrounding her termination from the Bank, the Court infers from paragraphs 14, 15, and 18 of the Second Amended Complaint that she was terminated in late July or early August of 2007. See also ALJ's Opinion and Order, Hudes v. IBRD, No. 2010-SOX-00012, 2010 DOLSOX LEXIS 15 at *1 (Dep't of Labor, Feb. 22, 2010) (referencing "Complainant's 2007 discharge").*fn1

As best the Court can discern, Plaintiff alleges that at some point, the Bank required her "submission to [a] psychological fitness for duty examination[]." Id., ¶ 25. Plaintiff further states that in July 2007, a doctor from the Bank's health department, Dr. Demure, obtained her confidential medical records from her insurance company, Aetna, apparently without her "express authorization." Id., ¶¶ 14-15. Plaintiff alleges that Dr. Demure then called her treating physicians and "defamed Plaintiff and damaged Plaintiff's professional reputation with knowingly false statements." Id., ¶ 15. Plaintiff does not plead the content of any such statements. Upon learning of his calls to her physicians, Plaintiff alleges that she "informed Dr. Demure that he was violating medical ethics and breaking the law," after which "Dr. Demure retaliated by recommending that Plaintiff be denied access to [the Bank's] facilities" and "maliciously request[ing] Plaintiff's physicians to inform [her] that she was barred" from the Bank's facilities "for medical reasons." Id., ¶¶ 15, 18. Plaintiff was terminated the following week. Id., ¶ 18.

Plaintiff's dispute with the World Bank over its internal operations did not end, however, with her termination. Plaintiff alleges that on February 27, 2009, she disclosed "ongoing control lapses" at the Bank to the Chairman of the Bank's Audit Committee. Id., ¶ 4. Following this disclosure, the Audit Committee hired Defendant KPMG "to conduct an external audit of [the Bank's] internal control over financial reporting." Id. Plaintiff alleges that "[b]ecause KPMG has prevented [her] from contacting KPMG's audit team and from considering [her] reports to the Audit Committee and the US Congress of [the Bank's] control lapses, Defendant KPMG is unable to form an opinion on the effectiveness of [the Bank's] internal control over financial reporting." Id.

Plaintiff further alleges that on August 20, 2009, the "Chairman of the Board's Committee on Governance and Administrative Matters, after consultation with other members on the Board, requested Plaintiff's reinstatement in order to correct [the Bank's] internal control lapses and corporate governance problems." Id., ¶ 8. On September 2, 2009, however, the Bank allegedly "barred Plaintiff entry to [the Bank's] headquarters." Id.

The current action has both administrative and judicial origins. On October 13, 2009, Plaintiff filed a complaint against the Bank with the Occupational Safety and Health Administration in the Department of Labor. Id., ¶ 9. Plaintiff indicates that her administrative complaint contained a claim under the Sarbanes-Oxley Act of 2002, Pub. L. 107-204, 116 Stat. 745 (2002), codified in relevant part at 18 U.S.C. § 1514A, "based upon two adverse employment actions": the Bank's "refusing to reinstate Plaintiff [at the Bank] and barring Plaintiff from [the Bank's] premises." Sec. Am. Compl., ¶ 9. On December 17, 2009, Plaintiff filed a complaint against Aetna Corp., John and Jane Does 1-100, and Mark Schreiber -- a "consultant" to the Bank, see id., ¶ 20 -- in U.S. District Court for the District of Maryland, alleging violations of Sarbanes-Oxley and the Health Insurance Portability and Accountability Act, Pub. L. 104-191, 110 Stat. 1936 (1996) (HIPAA). See ECF No. 1. On March 4, 2010, Plaintiff "informed the Administrative Review Board of the U.S. Department of Labor that she was removing her Sarbanes-Oxley claim" against the World Bank to federal court. Sec. Am. Compl., ¶ 10. The next day, Plaintiff amended her complaint in the District of Maryland to substitute Aetna Life Insurance Co. for Aetna Corp. and to add the World Bank as a defendant. See ECF No. 14. On August 23, 2010, the U.S. District Court for the District of Maryland granted Aetna's Motion to Transfer, sending Plaintiff's case to this Court. See ECF No. 39.

Currently before the Court is Plaintiff's Second Amended Complaint, filed October 15, 2010. In this, her third attempt to plead this suit, Plaintiff alleges claims against the World Bank, Aetna Life Insurance Co., Mark Schreiber, KPMG LLP, and John and Jane Does 1-99. She never, however, specifically sets out her causes of action or lists counts, but instead mentions in various places claims for violations of federal and state law including: the Securities Act of 1933,

15 U.S.C. § 77a et seq. (Securities Act); the Securities Exchange Act of 1934, 15 U.S.C. § 78a et seq. (Exchange Act); the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. 111-203, 124 Stat. 1376 (2010) (Dodd-Frank); Sarbanes-Oxley; and HIPAA. Sec. Am. Compl., ¶ 1.

All Defendants have filed Motions to Dismiss, which the Court now considers. *fn2

II.Legal Standard

In evaluating Defendants' Motion to Dismiss, the Court must "treat the complaint's factual allegations as true . . . and must grant plaintiff 'the benefit of all inferences that can be derived from the facts alleged.'" Sparrow v. United Air Lines, Inc., 216 F.3d 1111, 1113 (D.C. Cir. 2000) (quoting Schuler v. United States, 617 F.2d 605, 608 (D.C. Cir. 1979)) (internal citation omitted); see also Jerome Stevens Pharms., Inc. v. FDA, 402 F.3d 1249, 1253 (D.C. Cir. 2005). This standard governs the Court's considerations of Defendants' Motions under both Rules 12(b)(1) and 12(b)(6). See Scheuer v. Rhodes, 416 U.S. 232, 236 (1974) ("in passing on a motion to dismiss, whether on the ground of lack of jurisdiction over the subject matter or for failure to state a cause of action, the allegations of the complaint should be construed favorably to the pleader"); Walker v. Jones, 733 F.2d 923, 925-26 (D.C. Cir. 1984) (same). The Court need not accept as true, however, "a legal conclusion couched as a factual allegation," nor an inference unsupported by the facts set forth in the Complaint. Trudeau v. Fed. Trade Comm'n, 456 F.3d 178, 193 (D.C. Cir. 2006) (quoting Papasan v. Allain, 478 U.S. 265, 286 (1986) (internal quotation marks omitted).

To survive a motion to dismiss under Rule 12(b)(1), Plaintiff bears the burden of proving that the Court has subject matter jurisdiction to hear her claims. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992); U.S. Ecology, Inc. v. U.S. Dep't of Interior, 231 F.3d 20, 24 (D.C. Cir. 2000). A court has an "affirmative obligation to ensure that it is acting within the scope of its jurisdictional authority." Grand Lodge of Fraternal Order of Police v. Ashcroft, 185 F. Supp. 2d 9, 13 (D.D.C. 2001). For this reason, "'the [p]laintiff's 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." Id. at 13-14 (quoting 5A Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 1350 (2d ed. 1987) (alteration in original)). Additionally, unlike with a motion to dismiss under Rule 12(b)(6), the Court "may consider materials outside the pleadings in deciding whether to grant a motion to dismiss for lack of jurisdiction." Jerome Stevens, 402 F.3d at 1253; see also Venetian Casino Resort, L.L.C. v. E.E.O.C., 409 F.3d 359, 366 (D.C. Cir. 2005) ("given the present posture of this case -- a dismissal under Rule 12(b)(1) on ripeness grounds -- the court may consider materials outside the pleadings").

Rule 12(b)(6) provides for the dismissal of an action where a complaint fails "to state a claim upon which relief can be granted." When the sufficiency of a complaint is challenged under Rule 12(b)(6), the factual allegations presented in it must be presumed true and should be liberally construed in plaintiff's favor. Leatherman v. Tarrant Cty. Narcotics & Coordination Unit, 507 U.S. 163, 164 (1993). The notice pleading rules are "not meant to impose a great burden on a plaintiff," Dura Pharm., Inc. v. Broudo, 544 U.S. 336, 347 (2005), and he or she must thus be given every favorable inference that may be drawn from the allegations of fact. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 584 (2007). Although "detailed factual allegations" are not necessary to withstand a Rule 12(b)(6) motion, Twombly, 550 U.S. at 555, "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, 129 S. Ct. 1937, 1949 (2009) (internal quotation omitted). Plaintiff must put forth "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. Though a plaintiff may survive a 12(b)(6) motion even if "recovery is very remote and unlikely," Twombly, 550 U.S. at 555 (citing Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)), the facts alleged in the complaint "must be enough to raise a right to relief above the speculative level." Id. at 555.


Because each of the four Defendants has separately moved for dismissal and set forth different bases, the Court will address each in turn. Ultimately, despite three tries to articulate her causes of action, Plaintiff is simply unable to do so. As a result, the Court will dismiss certain claims with prejudice and others without.

A. The World Bank

1. Wrongful Termination

At bottom, Plaintiff's allegations against the World Bank amount to a claim for wrongful termination. Plaintiff alleges that the Bank "terminated [her] employment illegally in retaliation for reporting corruption and securities law violations to [the Bank's] Audit Committee and US Congressional committees charged with oversight of" the Bank. Sec. Am. Compl., ¶ 13. For this violation, Plaintiff requests relief relating to her employment status: "reinstatement in Defendant IBRD's Legal Department and an award of monetary damages in the amount of $1,000,000 as compensation for Defendant IBRD's illegal retaliation against Plaintiff and damage to her career." Id., ¶ 29(1). The Court, however, must dismiss Plaintiff's claim for lack of subject matter jurisdiction because the World Bank is immune from such suits by current and former employees. Although, as discussed below, the Court declines to exercise pendent jurisdiction over all other non-federal claims against all Defendants, it addresses this one because the Bank's immunity defense is also applicable to the federal claims asserted against it.

The World Bank has long been recognized as an "international organization[]" covered by the International Organizations Immunities Act (IOIA). See Exec. Order No. 9751, 11 Fed. Reg. 7713 (July 11, 1946). The IOIA provides: "International organizations, their property and their assets, wherever located, and by whomsoever held, shall enjoy the same immunity from suit and every form of judicial process as is enjoyed by foreign governments, except to the extent that such organizations may expressly waive their immunity for the purpose of any proceedings or by the terms of any contract." 22 U.S.C. ยง 288a(b). The World Bank thus enjoys immunity from suits such as Plaintiff's unless it has expressly ...

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