United States District Court, District of Columbia
NATHAN A. SAUNDERS, Plaintiff,
ELIZABETH DAVIS, et al., Defendants. Re Document Nos. 15, 16, 19, 20
MEMORANDUM OPINION GRANTING DEFENDANTS' MOTIONS
RUDOLPH CONTRERAS United States District Judge.
Nathan A. Saunders, proceeding pro se, brings this
suit alleging that numerous Defendants engaged in misconduct
in the management of the Washington Teachers' Union's
("WTU") Option 2 Voluntary Employee Beneficiary
Association Trust (the "Trust"). The Trust was
created to provide supplemental unemployment benefits to
teachers in the District of Columbia Public Schools
("DCPS") who met certain conditions. Mr. Saunders,
who seeks a wide range of remedies, names fourteen
Defendants, all associated in different ways with the Trust.
Specifically, Mr. Saunders brings suit against: Elizabeth
Davis, Jackie Hines, Michael White, Pauline Baker, John
Hammond, Ray Mobley, Dorothy Egbufor, and the Trust itself
(collectively, "Board Affiliate
Defendants"); Darryl Anderson, Peter Leff, Lee Jackson,
and the law firm O'Donnell, Schwartz, & Anderson,
P.C. (collectively, "Attorney Defendants"); Calibre
CPA Group, PLLC ("Calibre"); and Secretary Thomas
Perez of the United States Department of Labor. See
Compl. at 1-2, ECF No. 1.
sets of Defendants separately move to dismiss the Complaint
on a variety of grounds. The Court first considers whether it
has jurisdiction. For the reasons explained below, the Court
finds that sovereign immunity bars Mr. Saunders's claims
against Secretary Perez. The Court will therefore dismiss
those claims pursuant to Rule 12(b)(1) of the Federal Rules
of Civil Procedure for lack of subject matter jurisdiction.
The Court also finds that Mr. Saunders fails to state a claim
upon which relief can be granted under the Employee
Retirement Income Security Act ("ERISA"), the
Racketeer Influenced and Corrupt Organizations Act
("RICO"), and various federal criminal statutes.
The Court will therefore dismiss those portions of the
Complaint pursuant to Rule 12(b)(6) of the Federal Rules of
Civil Procedure. Because the Court dismisses all of Mr.
Saunders's federal law claims, the Court declines to
exercise supplemental jurisdiction over the remaining state
law claims. Finally, the Court will deny Mr. Saunders's
request that the Court appoint counsel to represent him in
this case and his request for leave to amend his claims.
FACTUAL & PROCEDURAL BACKGROUND
case arises from a dispute over the administration of the
Trust, which was created for the benefit of certain teachers
employed by DCPS. The allegations are rooted in the fallout
from the WTU's disputed presidential election in 2013 and
subsequent questions about the election's implications on
the management of the Trust.
Saunders is a member of the WTU. See Compl. at 4;
Compl. Attach. 17 at 124.Prior to the events giving rise to this
case, Mr. Saunders was elected President of the WTU.
See Compl. Attach. 2 at 75; Compl. Attach. 5 at
79-81. During Mr. Saunders's term in office and while
acting on behalf of the WTU, he signed a document that
created the Trust (the "Trust Agreement").
See Compl. Attach. 2 at 75; see also Compl.
at 6 ("The WTU Option 2 VEBA creation was a multi-year
project by Plaintiff"). Mr. Saunders was also a
signatory to the Memorandum of Agreement between the WTU and
the DCPS that provided for DCPS's financial contributions
to the Trust, see Compl. Attach. 4 at 78, and to the
Trust's "Plan Document, " see Compl.
Attach. 1 at 47.
Trust was the result of collective bargaining between the WTU
and DCPS. See Compl. Attach. 1 at 33; Compl. Attach.
2 at 48; Compl. Attach. 4 at 77; Compl. Attach. 8 at 86. The
Trust was created to provide supplemental unemployment
benefits for DCPS teachers who had been laid off-or
"excessed" in the official terminology-if those
teachers met certain criteria. See Compl. Attach. 1
at 34-35; Compl. Attach. 4 at 77; Compl. Attach. 8 at 89-90.
Specifically, teachers were required to achieve a particular
score on their most recent evaluation, attain permanent
teacher status, and work in the DCPS system for a minimum
number of years to be eligible for benefits. See
Compl. Attach. 4 at 77; Compl. Attach. 8 at 89-90. The Trust,
which makes payments to eligible teachers who apply for
benefits, was intended to be funded by DCPS through annual
payments of $1.7 million. See Compl. Attach. 4 at
77; see also Compl. at 6 ("The end result [of
Plaintiff s efforts] was a Memorandum of Agreement funded by
the employer."). DCPS and the WTU have subsequently
disagreed over a number of issues related to the Trust, and
the Trust was forced to suspend the payment of all benefits
in 2015 because DCPS did not make its annual funding
payments. See Compl. Attach. 10 at 119
("Unfortunately, DCPS funded the [Trust] in the first
year but has withheld funding for the last two years.");
Compl. Attach. 11 at 122 ("DCPS has refused to make its
last two contributions to [the Trust]."). Mr. Saunders
asserts that "Defendants' transgressions are the
sole reason for nonpayment... as opposed to employer
recalcitrance as reported by Defendants." Compl. at 15.
Trust Agreement established a process to select trustees.
See Compl. Attach. 2 at 55. The relevant provision,
Section 3.01, states in full:
Designation of Trustees. Persons holding the following
positions with the Union shall serve as the Trustees and
shall be considered the "named fiduciaries, "
"fiduciaries, " and the "plan
administrator" as those terms are defined in ERISA:
1. President of the Union who shall serve as the Chairman of
the Board and have a two year term;
2. One Vice President of Education who is also a member of
the Executive Board of the Union who shall have a two year
3. One other member of the Executive Board of the Union, as
appointed by the Chairman, who shall have an initial one year
term and then two year terms thereafter;
4. Treasurer of the Union who shall have a two year term;
5. One Field Service Specialist of the Union, as appointed by
the Chairman, who shall have an initial one year term and
then two year terms thereafter.
to the Complaint, WTU officials, including Mr. Saunders,
stood for election in May 2013. See Compl. at 11.
Mr. Saunders faced Defendant Elizabeth Davis in his bid to be
re-elected as WTU President. See Id. After a close
election and a subsequent, contested runoff, Mr. Saunders
filed an "appeal to the 2013 WTU Runoff Election, "
however, on "July 31, 2013 Plaintiff Saunders withdrew
his election challenge and vacated the WTU Presidency."
See Compl. Attach. 5 at 80; see also Compl.
at 11. Ms. Davis entered office as President of the WTU on
August 1, 2013. See Compl. at 11. On April 27, 2015,
Mr. Saunders sent a letter to Secretary Perez and the
Chancellor of DCPS raising concerns with purported
"financial and other improprieties" associated with
the Trust. See Compl. Attach. 19 at 131; see
also Compl. at 10 ("Plaintiff complained to the
Department of Labor, and D.C. Public schools among
Mr. Saunders's Allegations
core of Mr. Saunders's Complaint is that his defeat as
WTU President did not alter his role in managing the Trust.
In support of that position, Mr. Saunders argues that the
"Original and Proper" Board of Trustees must be
made up of the members who were on the board prior to the
2013 election. See Compl. at 12-13. Mr. Saunders
states that he is the rightful "fiduciary based
trustee-Chairperson of the WTU Option 2 VEBA Board of
Trustees, " and that the current board is "not the
properly constituted and seated WTU Option 2 VEBA Board of
Trustees." Id. In other words, Mr.
Saunders's position is that Ms. Davis may have won the
WTU Presidency in the 2013 election, but the election did not
permit her to take over Mr. Saunders's position as
Chairman of the Board of Trustees. See Pl.'s
Mem. Resp. Defs.' Mots. Dismiss ("Pl.'s
Opp'n") at 11, ECF No. 23.
Mr. Saunders argues that "[t]he loss of a political
union election can not be used as a basis for removal from
the VEBA Board" and that "WTU elections are not
controlling" on the question of who should run the
Trust. Id. at 11-12. Mr. Saunders notes that he
"worked 2 hard years" to create the Trust under the
assumption that his continued involvement would not be
dependent upon the upcoming WTU election. See Id. at
12 Mr. Saunders points to the Trust Agreement and argues that
"[u]nion elected office is not a requirement for VEBA
trusteeship participation, plan participation, or plan
rights, " see Compl. at 11, and therefore, that
"Defendants Davis, Hammond, White, Hines . . . had no
authority to act and are not the properly constituted and
seated WTU Option 2 VEBA Board of Trustees, "
id. at 12.
Saunders ultimately alleges that because the post-2013 Board
of Trustees is "not the properly constituted and seated
WTU Option 2 VEBA Board of Trustees, " each of the
Defendants, "individually and collectively, "
violated a number of statutes and caused harm to Mr. Saunders
and others. See Id. at 12, 15. Because he asserts
that the Board of Trustees took their positions illegally, he
alleges that those individuals committed fraud when they took
subsequent actions to manage the Trust, including relatively
routine acts such as using the Trust's credit cards.
Id. at 12-13. The legal foundations of Mr.
Saunders's allegations include both civil and criminal
violations of federal and state laws. See Id. at
Saunders asserts that the Defendants' alleged actions
constitute a RICO violation. See Id. at 5-6; see
also 18 U.S.C. § 1961. The Complaint's RICO
allegations are based on a range of purported predicate
criminal acts, including mail fraud, wire fraud, bank fraud,
credit card fraud, identification fraud, and computer fraud.
See Compl. at 5-6 (citing 18 U.S.C. §§
1028, 1029, 1030,  1341, 1343, 1344). Mr. Saunders also
appears to assert these alleged criminal violations as
separate causes of action. See Id. ("Plaintiff
makes claims under[a list of criminal statutes]."). The
Complaint also alleges a series of violations of ERISA.
Id. at 4-5. Specifically, Mr. Saunders alleges that
Defendants failed to provide required information, breached
their fiduciary duties, and failed to provide benefits
required by the terms of the plan. See Compl. at
4-5; see also 29 U.S.C. §§ 1021-25
(reporting requirements); 29 U.S.C. §§ 1104-09
(fiduciary duties); 29 U.S.C. § 1132(a)(1)(B) (private
right of action to enforce plan terms).
Saunders also brings a number of nonfederal claims. Mr.
Saunders alleges violations of the District of Columbia Merit
Personnel Act and the District of Columbia Retirement Act.
See Compl. at 5 (citing D.C. Code §§
1-618.02, 1-702(20), 1-747(a)(2)). He also cites provisions
of the D.C. Code found in the chapter related to the Police
Officers, Fire Fighters, and Teachers Retirement Benefit
Replacement Plan. See Id. (citing D.C. Code
§§ 1-901.02(7); 1-911.01(a)(2)). Mr. Saunders
alleges that Defendants' actions constitute
"tortious interference" because they allegedly
"constructively and secretly disbanded the Original and
Proper VEBA Board of Trustees while intercepting the $1.75
million trust fund check." Id. at 12. In his
opposition to the motions to dismiss, Mr. Saunders also
alleges that the Attorney Defendants' malpractice is
responsible for $6.8 million in harm and "this
VEBA's demise." Pl.'s Opp'n at 5-7; see
also Id. at 17 ("The WTU and VEBA Attorney
defendants . . . did not employ ordinary and common legal
Motions before the Court
sets of Defendants have moved separately to dismiss Mr.
Saunders's Complaint. Board Affiliate Defendants move to
dismiss the ERISA claims for lack of subject matter
jurisdiction pursuant to Rule 12(b)(1) and to dismiss the
remainder of the Complaint for failure to state a claim
pursuant to Rule 12(b)(6). See generally Mem. Supp.
Mot. Dismiss Defs. Davis, et al. ("Board Affiliates'
Mem.") at 2, ECF No. 15. Calibre moves to dismiss the
Complaint for failure to state a claim pursuant to Rule
12(b)(6). See generally Mem. Supp. Def Calibre CPA
Group, PLLC Mot. Dismiss ("Calibre Mem."), ECF No.
16-1. Secretary Perez moves to dismiss the Complaint under
Rule 12(b)(1) because Mr. Saunders's claims against the
Secretary are barred by sovereign immunity. See
generally Mot. Dismiss Sec. Labor Action & Supp.
Mem. P. & A. ("Perez Mot. Dismiss"), ECF No.
19. Attorney Defendants move to dismiss the Complaint
pursuant to Rule 12(b)(6). See generally Mem. Supp.
Defs. O'Donnell, Schwartz, & Anderson, P.C., et al.
Mot. Dismiss ("Att'y Defs.' Mem."), ECF No.
20-1. After all Defendants moved to dismiss, the Court issued
an Order reminding Mr. Saunders of his obligation to respond
to the motions. See Order, ECF No. 21. Mr. Saunders
filed an omnibus opposition to the motions, which also
reiterated his request that "the federal court. . .
appoint legal counsel to assist Pro Se Plaintiff in the
resolution of this matter." Pl.'s Opp'n at 15;
see also Compl. at 24. In support of that position,
Mr. Saunders argued that "the federal court could
appoint Plaintiff counsel and all parties will have a level
playing field." Pl.'sOpp'n at 15. Each set of
moving parties filed a reply in support of their motion.
See Reply Mem. Supp. Mot. Dismiss Defs. Davis, et
al. ("Board Affiliates' Reply"), ECF No. 24;
Defs. O'Donnell, Schwartz, & Anderson, PC, et al.
Reply Pl.'s Opp'n Defs.' Mot. Dismiss
("Att'y Defs.' Reply"), ECF No. 25; Reply
Supp. Def Calibre CPA Group's Mot. Dismiss ("Calibre
Reply), ECF No. 26; Reply Mem. Supp. Sec. Labor's Mot.
Dismiss, ECF No. 27. Defendants' motions are now fully
briefed and ripe for decision.
Defendants, filing separately, move to dismiss the Complaint
in its entirety on a number of different grounds. Each of the
motions to dismiss, however, argues either that the Court
lacks subject matter jurisdiction over claims against
Defendants or that the Complaint fails to state a claim upon
which relief can be granted. The Court first considers the
question of subject matter jurisdiction, and finds that
sovereign immunity bars Mr. Saunders's claims against
Secretary Perez. Next, the Court finds that the
Complaint's federal causes of action fail to state a
claim upon which relief can be granted. Specifically, the
ERISA claims are barred because the Trust is a government
plan. Mr. Saunders also has failed to allege the necessary
elements of a RICO claim, and his citations to various
federal criminal statutes fail to state a claim. Because the
Court will dismiss all federal law claims, the Court will
decline to exercise supplemental jurisdiction over Mr.
Saunders's state law claims. Thus, the Court will grant
the motions to dismiss and dismiss the Complaint as to all
remaining Defendants. Finally, Mr. Saunders's request for
appointment of counsel and request for leave to amend are
Subject Matter Jurisdiction
to Federal Rule of Civil Procedure 12(b)(1), Secretary Perez
moves to dismiss, arguing that the Court lacks subject matter
jurisdiction because sovereign immunity bars Mr.
Saunders's claims. See Perez Mot. Dismiss at 1.
The Court finds that it does not have subject matter
jurisdiction over claims against Secretary Perez because Mr.
Saunders has failed to demonstrate a relevant waiver of
sovereign immunity. Thus, the Court will dismiss Mr.
Saunders's claims against Secretary Perez.
Affiliate Defendants also move to dismiss and argue that this
Court lacks subject matter jurisdiction over Mr.
Saunders's ERISA claims. See Board
Affiliates' Mot. Dismiss at 1. Specifically, Board
Affiliate Defendants argue that because the Trust is a
government plan, it is excluded from ERISA under 29 U.S.C.
§ 1003(b)(1), and therefore this Court lacks subject
matter jurisdiction to address Mr. Saunders's ERISA
claims. See Board Affiliates' Mem. at 2.
Although the Court agrees that the Trust is a government plan
that is exempt from ERISA, the Court does not believe that
this issue is properly considered in the context of subject
matter jurisdiction. Instead, the Court will construe Board
Affiliate Defendants' argument as a motion to dismiss for
failure to state a claim. See infra Part III.B.2.a.
Applicable Legal Standard
se complaint is held to "less stringent standards
than formal pleadings drafted by lawyers." Erickson
v. Pardus, 551 U.S. 89, 94 (2007) (per curiam) (quoting
Estelle v. Gamble, 429 U.S. 97, 106 (1976)). But
even pro se litigants "must comply with the
Federal Rules of Civil Procedure." Idrogo v.
Foxx, 990 F.Supp.2d 5, 6 (D.D.C. 2013) (citing
Jarrell v. Tisch, 656 F.Supp. 237, 239 (D.D.C.
1987)). Federal Rule of Civil Procedure 12(b)(1) provides for
the dismissal of an action for lack of subject matter
jurisdiction. See Fed. R. Civ. P. 12(b)(1). Federal
courts are courts of limited jurisdiction, and the law
presumes that "a cause lies outside this limited
jurisdiction." Rasul v. Bush, 542 U.S. 466, 489
(2004) (quoting Kokkonen v. Guardian Life Ins.
Co. of Am., 511 U.S. 375, 377 (1994)); see also Gen.
Motors Corp. v. EPA, 363 F.3d 442, 448 (D.C. Cir. 2004)
("As a court of limited jurisdiction, we begin, and end,
with an examination of our jurisdiction."). It is the
plaintiffs burden to establish that the court has subject
matter jurisdiction. Lujan v. Defs. of Wildlife, 504
U.S. 555, 561 (1992). To determine whether jurisdiction
exists, a court may "consider the complaint supplemented
by undisputed facts evidenced in the record, or the complaint
supplemented by undisputed facts plus the court's
resolution of disputed facts." Coal, for Underground
Expansion v. Mineta, 333 F.3d 193, 198 (D.C. Cir. 2003).
Perez argues that sovereign immunity bars Mr. Saunders's
claims against him. See Perez Mot. Dismiss at 3. The
Court agrees, and finds that Mr. Saunders has failed to
provide sufficient authority showing ...