United States District Court, D. Columbia.
November 21, 2014
HIRAM PADILLA ROBLES, et al., Plaintiffs,
JOHN KERRY, in his official capacity as U.S. Secretary of State, and UNITED STATES DEPARTMENT OF STATE, Defendants
For HIRAM PADILLA ROBLES, MIGDALIA PADILLA ROBLES, FERDINAND PADILLA ROBLES, DAMARIS PADILLA ROBLES, WILLIAM PADILLA GUZMAN, ANTONIO PADILLA GUZMAN, Plaintiffs: Jean Paul Vissepo Garriga, LEAD ATTORNEY, PRO HAC VICE, Vissepo Law Group, P.S.C, San Juan, PR; Lorenzo J. Palomares, Miami, FL.
For JOHN KERRY, UNITED STATES DEPARTMENT OF STATE, Defendants: Nathan Michael Swinton, LEAD ATTORNEY, U.S. DEPARTMENT OF JUSTICE, Civil Division, Washington, DC.
Re Document No.: 10
Granting Defendants' Motion to Dismiss
RUDOLPH CONTRERAS, United States District Judge.
A 1972 terrorist attack claimed the life of Juan Padilla Ortiz. After his half-siblings (" Plaintiffs" ) were denied monetary compensation by the State Department, they filed the instant action against the Department and the Secretary of State in his official capacity (" Defendants" ). Plaintiffs ask this Court to issue a declaratory judgment that the Department's denial of compensation violated their constitutional and statutory rights, and to order payment of the requested compensation. Before this Court is Defendants' motion to dismiss (ECF No. 10). Having reviewed the parties' filings, this Court grants the motion and dismisses the complaint without prejudice for failure to state a claim.
While on a religious pilgrimage, Juan Padilla Ortiz was killed in a terrorist attack at the Lod Airport in Israel in May 1972. See Compl. 3, ECF No. 1. In April 2006, his siblings brought an action in this Court against Libyan authorities and others, alleging that they had provided material support to the attackers and seeking damages. See generally Compl., ECF No. 1, Franqui v. Syrian Arab Republic, No. 06-cv-734 (D.D.C. Apr. 21, 2006).
In 2008, the United States and Libya concluded an agreement providing for the settlement of terrorism-related claims against Libya pending in U.S. courts. See Claims Settlement Agreement Between the United States of America and the Great Socialist People's Libyan Arab Jamahiriya (" Claims Settlement Agreement" ), Aug. 14, 2008, Defs.' Ex. A, ECF No. 10-2. Subsequently, the Secretary of State certified that Libya had provided sufficient funds for executing the settlements, and the President issued an Executive Order ordering the settlement of covered claims and directing the Secretary to " provide for procedures" governing the settlements. Settlement of Claims Against Libya, Exec. Order No. 13,477, 73 Fed.Reg. 65,965 (Oct. 31, 2008). Mr. Padilla Ortiz's siblings then
dismissed the Franqui action and obtained $10 million from the State Department under the prescribed claims settlement process. See Pls.' Notice of Dismissal with Prejudice, ECF No. 51, Franqui v. Syrian Arab Republic, No. 06-cv-734 (D.D.C. Dec. 31, 2008).
In 2009, pursuant to the International Claims Settlement Act of 1949, 22 U.S.C. § 1623(a)(1)(C), the Secretary of State referred several categories of claims against Libya to the Foreign Claims Settlement Commission (the " Commission" ), an independent federal agency with authority to adjudicate certain international claims of the United States and its nationals. See Notice, Commencement of Claims Program, Foreign Claims Settlement Commission, 74 Fed.Reg. 32,193 (July 7, 2009); 22 U.S.C. § § 1622-23 (describing structure and function of Commission). One such category--Category E--covered claims for wrongful death resulting from the 1972 terrorist attack in which Mr. Padilla Ortiz was killed, so long as the claimant " was not a plaintiff in [the Franqui action]," and the claim " meets the standard for . . . wrongful death . . . adopted by the Commission." 74 Fed.Reg. at 32,194.
Plaintiffs--Mr. Padilla Ortiz's half-siblings who were not party to the Franqui litigation--then filed a timely wrongful death claim with the Commission under Category E of the referral. In its final decision, the Commission explained that although Category E " does cover wrongful death claims . . . by claimants who were not plaintiffs in a Pending Litigation," " the wrongful death claim for Mr. [Padilla] Ortiz has already been paid by the Department of State" in the amount of $10 million. Final Decision 3, Pls.' Ex. 1, ECF No. 12-1. The Commission then determined that this amount was the maximum per-death payment, based on a 2008 letter authored by the Deputy Secretary of State and past Commission practice. Id. at 3-5. On this basis, the Commission denied Plaintiffs' claim for lack of jurisdiction. Id. at 2, 7; Compl. 4.
Plaintiffs next filed an administrative claim before the State Department, seeking a " proportionate share of the $10,000,000.00 destined to the relatives of Juan Padilla Ortiz . . . ." Administrative Claim 8, Defs.' Ex. C, ECF No. 10-4. Construing Plaintiffs' claim as an " administrative tort claim" governed by the Federal Tort Claims Act, the State Department denied the claim on the grounds that no federal officials committed any " negligent or wrongful act or omission." Letter from Mary E. McLeod, U.S. Department of State, to Jean Paul Vissep& #8057; Garriga, Counsel for Claimants, Defs.' Ex. D, ECF No. 10-5 (citing 28 U.S.C. § 2672). The Department also advised Plaintiffs of their right to seek judicial review of " this determination under the Federal Tort Claims Act." Id.
Plaintiffs then filed the instant action against Defendants. In their complaint, Plaintiffs request two specific forms of relief. First, they seek a declaratory judgment under 28 U.S.C. § 2201 " that the State Department decision of denying plaintiff's [sic] right to compensation under the Libya Claims Program, violates the Fifth Amendment . . . and 42 U.S.C. § 1983."
Compl. 9. Plaintiffs allege that because the State Department failed to notify them before issuing the maximum $10 million payment to Mr. Padilla Ortiz's full siblings, they were deprived of " their proprietary right of compensation without the due process of law, even when they followed the legal course established by the Commission and the Department of State." Compl. 7. Second, they ask this Court to " order the United States Department of State to compensate plaintiffs with $10,000,000 as established by the Libya Claims Program," on the basis that they are " entitled to the compensation" under 22 U.S.C. § 1623(a)(1)(C). Id. at 7, 9.
Before this Court is Defendants' motion to dismiss, which argues that because Defendants have not expressly waived sovereign immunity, this Court is without subject-matter jurisdiction. Fed.R.Civ.P. 12(b)(1); Mem. Supp. Defs.' Mot. Dismiss 7-10, ECF No. 10. Alternatively, the motion submits that even if jurisdiction is proper, dismissal is warranted on the grounds that Plaintiffs fail to state a claim. Fed.R.Civ.P. 12(b)(6); Mem. Supp. Defs.' Mot. Dismiss 11-18.
A. Legal Standard
" If sovereign immunity has not been waived, a claim is subject to dismissal under Rule 12(b)(1) for lack of subject matter jurisdiction." Clayton v. District of Columbia, 931 F.Supp.2d 192, 200 (D.D.C. 2013) (citing Fed. Deposit Ins. Corp. v. Meyer, 510 U.S. 471, 475, 114 S.Ct. 996, 127 L.Ed.2d 308 (1994) (" Sovereign immunity is jurisdictional in nature." )). Courts " may not find a waiver unless Congress' intent is unequivocally expressed in the relevant statute." Hubbard v. Adm'r, E.P.A., 982 F.2d 531, 532, 299 U.S.App.D.C. 143 (D.C. Cir. 1992) (citation and internal quotation marks omitted).
" To 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, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citation and internal quotation marks omitted).
B. Sovereign Immunity
Because both parties have inadequately briefed the difficult question of whether Defendants have waived sovereign immunity, the Court reviews the relevant authorities before explaining their implications for the facts of this case. However, the Court declines to decide whether sovereign immunity has been waived, given that, in any event, dismissal is warranted by Plaintiffs' failure to state a claim.
The Administrative Procedure Act (" APA" ) contains an express waiver of sovereign immunity applicable to any claim " seeking relief other than money damages" :
An action in a court of the United States seeking relief other than money damages and stating a claim that an agency or an officer or employee thereof acted or failed to act in an official capacity or under color of legal authority shall not be dismissed nor relief therein be denied on the ground that it is against the United States or that the United States is an indispensable party.
5 U.S.C. § 702. This waiver " applies to any suit whether under the APA or not." Chamber of Commerce of the U.S. v. Reich, 74 F.3d 1322, 1328, 316 U.S.App.D.C. 61 (D.C. Cir. 1996).
Bowen v. Massachusetts, 487 U.S. 879, 108 S.Ct. 2722, 101 L.Ed.2d 749 (1988), teaches that " money damages" under 5 U.S.C. § 702 is money sought as compensation, not money to which a plaintiff alleges a statutory entitlement. In Bowen, Massachusetts sued the Secretary of Health and Human Services to obtain Medicaid reimbursements that it claimed were mandated by the Medicaid Act. The Supreme Court held that the APA sovereign immunity waiver permitted Massachusetts's action. Bowen, 487 U.S. at 893. The Court cited " two reasons" : " First, insofar as the complaints sought declaratory and injunctive relief, they were certainly not actions for money damages. Second, and more importantly, even the monetary aspects of the relief . . . are not 'money damages' as that term is used in the law." Id.
Elaborating on the latter reason, the Bowen Court explained that Massachusetts's " suit to enforce § 1396b(a) of the Medicaid Act, which provides that the Secretary 'shall pay' certain amounts for appropriate Medicaid services, is not a suit seeking money in compensation for the damage sustained by the failure of the Federal Government to pay as mandated; rather, it is a suit seeking to enforce the statutory mandate itself, which happens to be one for the payment of money." Id. at 900 (quoting 42 U.S.C. § 1396b(a)). That is, the State " is seeking funds to which a statute allegedly entitles it, rather than money in compensation for the losses . . . that [the State] will suffer or has suffered by virtue of the withholding of those funds." Id. at 901 (quoting Md. Dep't of Human Res. v. Dep't of Health & Human Servs., 763 F.2d 1441, 1446, 246 U.S.App.D.C. 180 (D.C. Cir. 1985)) (emphasis added). Moreover, " [t]he fact that . . . it is money rather than in-kind benefits that pass from the federal government to the states . . . cannot transform the nature of the relief sought--specific relief, not relief in the form of damages." Id.; see also America's Cmty. Bankers v. Fed. Deposit Ins. Corp., 200 F.3d 822, 829, 339 U.S.App.D.C. 364 (D.C. Cir. 2000) (" Where a plaintiff seeks an award of funds to which it claims entitlement under a statute, the plaintiff seeks specific relief, not damages." ).
Subsequently, in Department of the Army v. Blue Fox, Inc., 525 U.S. 255, 119 S.Ct. 687, 142 L.Ed.2d 718 (1999), the Supreme Court explained that Bowen 's analysis hinged not on whether the relief sought was equitable, but on whether it constituted " money damages." In that case, Blue Fox, a subcontractor, was not paid by a general contractor for its work on a construction project for the Department of the Army. The Department of the Army did not require the general contractor to post bonds. Accordingly, the subcontractor sued the Army for the amount due to it, seeking an equitable lien on available funds allocated to the contract. Id. at 256-59.
The Supreme Court held that sovereign immunity barred the subcontractor's claim. Bowen, the Court explained, did not hold that the APA waives immunity for all equitable actions, but rather distinguished between " specific relief and substitute relief." Id. at 262. The Court reasoned that " liens, whether equitable or legal, are merely a means to the end of satisfying a claim for the recovery of money" ; they provide not " the very thing to which [the plaintiff] was entitled" but rather " a security interest in the property, which [the plaintiff] can then use to satisfy a money claim." Id. at 262-63 (internal citations and quotation marks omitted). The Court concluded that Blue Fox's action for an equitable lien " constitutes
a claim for 'money damages'" because " its goal is to seize or attach money in the hands of the Government as compensation for the loss resulting from the default of the prime contractor." Id. at 263.
To summarize, the APA waives sovereign immunity for all claims seeking " relief other than money damages." 5 U.S.C. § 702. As a general rule, " money damages" do not include declaratory and injunctive relief. Bowen, 487 U.S. at 893. Moreover, " money damages" are categorically exclusive of specific relief --which includes monetary relief sought as a statutory entitlement. Id. at 900; America's Cmty. Bankers, 200 F.3d at 829. Lastly, the APA does not waive sovereign immunity for an action seeking an equitable remedy, such as a lien, whose " goal is to seize or attach money in the hands of the Government as compensation . . . ." Blue Fox, 525 U.S. at 263.
Applying the above principles, the Court now considers in turn each of Plaintiffs' two requests--for a declaratory judgment and for an order mandating compensation. Compl. 9.
1. Declaratory Judgment
Plaintiffs first ask this Court to issue a declaratory judgment " that the State Department decision of denying plaintiff's [sic] right to compensation under the Libya Claims Program, violates the Fifth Amendment . . . and 42 U.S.C. § 1983." Compl. 9. Defendants contend that because Plaintiffs' requested declaratory judgment would effectively confer upon them a " right to compensation," Mem. Supp. Defs.' Mot. Dismiss 10, it is " merely a means to the end of satisfying a claim for the recovery of money," and thus falls outside the APA sovereign immunity waiver, Blue Fox, 525 U.S. at 262.
The Court hesitates to conclude that sovereign immunity bars Plaintiffs' request for a declaratory judgment. First, an action for a declaratory judgment, on its face, is " certainly not an action for money damages." Bowen, 487 U.S. at 893, accord Esch v. Yeutter, 876 F.2d 976, 984, 278 U.S.App.D.C. 98 (D.C. Cir. 1989) (concluding that APA sovereign immunity waiver permitted action for injunction against arbitrary or capricious denial of subsidies).
Furthermore, the Court is unpersuaded that the requested declaratory judgment, standing alone, would mandate the payment of any money or establish Plaintiffs' " right to compensation," rather than simply vacate the State Department's decision on the basis of a due process violation.
Even assuming arguendo that the declaratory judgment would effectively mandate the payment of money, the Court is not persuaded that the requested monetary relief would constitute " money damages" under 5 U.S.C. § 702. See Bowen, 487 U.S. at 893 (" [M]ore importantly, even the monetary aspects of the relief that the State sought are not 'money damages' . . . ." ). The Court now turns to this analysis.
In addition to the declaratory judgment, Plaintiffs seek an order directing the State Department " to compensate plaintiffs with $10,000,000 as established by the Libya Claims Program," on the basis that Plaintiffs are " entitled to the compensation" under 22 U.S.C. § 1623(a)(1)(C). Compl. 7, 9.
Defendants correctly observe that " [t]he United States has not waived its sovereign immunity for constitutional tort claims." Mem. Supp. Defs.' Mot. Dismiss 8 (quoting Harris v. Holder, 885 F.Supp.2d 390, 397 (D.D.C. 2012)). Defendants are also right in noting that although Plaintiffs reference 22 U.S.C. § 1623 and 42 U.S.C. § 1983 throughout their complaint, see Compl. 5-9, neither statutory provision contains a waiver of sovereign immunity. Mem. Supp. Defs.' Mot. Dismiss 8. For their part, Plaintiffs point out only that their complaint does not contain the word " damages." Mem. Supp. Pls.' Resp. Defs.' Mot. Dismiss 9, ECF No. 12. But Plaintiffs cite no authority for the proposition that a complaint's literal avoidance of the term " damages" compels a finding that the claim " seek[s] relief other than money damages." 5 U.S.C. § 702; cf. Blue Fox, 525 U.S. at 263 (holding that action for lien seeks " money damages" because " its goal is to seize or attach money in the hands of the Government as compensation . . ." ).
Both parties, however, overlook the fact that the complaint appears to allege that Plaintiffs " are entitled to the compensation" under 22 U.S.C. § 1623(a)(1)(C). Compl. 7. Insofar as the complaint does so, Plaintiffs would " see[k] an award of funds to which [they] clai[m] entitlement under a statute," and the requested monetary relief requested would be specific relief, not compensatory damages. America's Cmty. Bankers, 200 F.3d at 829; see also Bowen, 487 U.S. at 901. On the other hand, in this case, the conceptual boundary of " money damages" is murkier. Here, the Libya Claims Program aims to compensate victims who allegedly suffered tortious injury. To the extent that Plaintiffs ultimately seek compensatory relief under that program, one could argue that they in fact seek " money damages," notwithstanding their allegation that a statute entitles them to relief. See Blue Fox, 525 U.S. at 263. At least one court has held that such " hybrid"
relief--that is both specific and compensatory--still triggers the APA sovereign immunity waiver. The Supreme Court and the D.C. Circuit, however, have not squarely addressed such a situation.
In light of these complex sovereign immunity issues and insufficient briefing from the parties, the Court declines to decide whether Defendants have waived sovereign immunity. Instead, for reasons that follow, the Court concludes that Plaintiffs' complaint fails to state a claim and must be dismissed under Rule 12(b)(6).
C. Failure to State a Claim
Regardless of whether the APA waives sovereign immunity as to Plaintiffs' requests for a declaratory judgment and for $10 million, this Court holds that both claims must be dismissed under Rule 12(b)(6) for failure to state a claim.
1. Declaratory Judgment
As noted above, Plaintiffs request a declaratory judgment that the State Department's denial of monetary relief " violates the Fifth Amendment . . . and 42 U.S.C. § 1983." Compl. 9.
At the outset, the Court concludes that Plaintiffs are not entitled to a declaratory judgment that Defendants violated 42 U.S.C. § 1983. That statute imposes liability only on individuals " acting under color of state law." Settles v. U.S. Parole Comm'n, 429 F.3d 1098, 1104, 368 U.S.App.D.C. 297 (D.C. Cir. 2005) (internal quotation marks omitted). Nowhere in the complaint do Plaintiffs allege that Defendants--a federal agency and official--acted under color of state law.
" [T]o make out a violation of [procedural] due process, the plaintiff must show the Government deprived her of a 'liberty or property interest' to which she had a 'legitimate claim of entitlement,' and that 'the procedures attendant upon that deprivation were constitutionally [in]sufficient.'" Roberts v. United States, 741 F.3d 152, 161, 408 U.S.App.D.C. 211 (D.C. Cir. 2014) (citation omitted). A governmental authority " creates
a [protected property] interest . . . by establishing 'substantive predicates' to govern official decision-making and, further, by mandating the outcome to be reached upon a finding that the relevant criteria have been met." Ky. Dep't of Corr. v. Thompson, 490 U.S. 454, 462, 109 S.Ct. 1904, 104 L.Ed.2d 506 (1989) (internal citation omitted). That is, in addition to discretion-limiting substantive predicates, the applicable statutes or regulations must contain " explicitly mandatory language, i.e., specific directives to the decisionmaker that if the regulations' substantive predicates are present, a particular outcome must follow . . . ." Id. at 463 (internal quotation marks and citation omitted), accord Wash. Legal Clinic for the Homeless v. Barry, 107 F.3d 32, 36, 323 U.S.App.D.C. 219 (D.C. Cir. 1997).
This Court's review of the statutes and regulations has not revealed " explicitly mandatory language" requiring the Commission (or State Department) to issue an award to any eligible claimant. Ky. Dep't of Corr., 490 U.S. at 463. The Executive Order directing the Secretary of State to implement the Claims Settlement Agreement provides only that the Secretary " shall provide for procedures" for processing claims. Exec. Order No. 13,477, 73 Fed.Reg. at 65,965. The notice announcing the Commission's adjudication program outlines various eligibility criteria, but contains no requirement that " if the . . . substantive predicates are present, a particular outcome must follow. . . ." Ky. Dep't of Corr., 490 U.S. at 463 (emphasis added). Indeed, the notice provides that " the Commission will . . . certify to the Secretary of the Treasury those claims that it finds to be valid " ; the notice does not require the Commission to validate any claim or class of claims. 74 Fed.Reg. at 32,194 (emphasis added). Nor is any language in the Claims Settlement Agreement or claim filing instructions availing. See generally Claims Settlement Agreement; Foreign Claims Settlement Commission Libya Claims Program (Referral Dated Jan. 15, 2009) Instructions for Completing Statement of Claim, Pls.' Ex. 2, ECF No. 12-2.
In any event, the complaint does not direct this Court to any mandatory language and therefore fails to state a plausible claim that Plaintiffs were denied procedural due process. Iqbal, 556 U.S. at 678.
Accordingly, Plaintiffs fail to state a claim for a declaratory judgment that the State Department's denial of monetary relief " violates the Fifth Amendment . . . and 42 U.S.C. § 1983." Compl. 9.
Plaintiffs likewise fail to state a claim for $10 million in monetary relief under 22 U.S.C. § 1623(a)(1)(C) because that statute does not provide any such entitlement. Rather, the statute merely sets forth the Commission's jurisdiction:
The Commission shall have jurisdiction to receive, examine, adjudicate, and render a final decision with respect to any claim of the Government of the United States or of any national of the United States . . . included in a category of claims against a foreign government which is referred to the Commission by the Secretary of State.
22 U.S.C. § 1623(a)(1)(C). To the extent Plaintiffs rely on an implied right of action, they must demonstrate that the statute " displays an intent to create not just a private right but also a private remedy." Alexander v. Sandoval, 532 U.S. 275, 286, 121 S.Ct. 1511, 149 L.Ed.2d 517 (2001). But Defendants persuasively explain that there is no evidence of such intent; to the contrary, the statute explicitly provides that Commission decisions are not subject to judicial review. See 22 U.S.C. § 1623(h). Defendants further contend that an implied right of action against the State Department would be difficult to reconcile with the fact that this statute imposes no obligations on that agency at all; the statute provides only that the Commission can hear claims " referred . . . by the Secretary of State." Id. § 1623(a)(1)(C).
The Court thus concludes that Plaintiffs' claim for monetary relief must also be dismissed under Rule 12(b)(6) for failure to state a claim.
For the foregoing reasons, Defendants' motion to dismiss (ECF No. 10) is GRANTED. An order consistent with this Memorandum Opinion is separately and contemporaneously issued.
Granting Defendants' Motion to Dismiss
For the reasons stated in the Court's Memorandum Opinion issued separately and contemporaneously, Defendants' motion to dismiss (ECF No. 10) is GRANTED.
It is hereby ORDERED that Plaintiffs' complaint is dismissed without prejudice.