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Bannum, Inc. v. Samuels

United States District Court, District of Columbia

October 28, 2016

BANNUM, INC., Plaintiff,
v.
CHARLES E. SAMUELS, JR., et al., Defendants.

          MEMORANDUM OPINION

          AMY BERMAN JACKSON United States District Judge

         Plaintiff Bannum, Inc. has brought this action against defendants, seven current or former employees of the Federal Bureau of Prisons ("BOP"), alleging that "[defendants have engaged in a pattern of conduct over the past several years that has had the effect of debarring Bannum from receiving any new contracts from the BOP, Bannum's sole customer." Am. Compl. [Dkt. # 37] ¶¶2, 9-15. Plaintiff predicates its claims on this alleged "de facto debarment" and interference with contractual relations, and it seeks a declaratory judgment, injunctive relief, and monetary damages in excess often million dollars. Id. ¶¶ 166-87, 189-95. On behalf of the individually named defendants, the United States moved to dismiss the amended complaint pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). Def.'s Mot. to Dismiss Am. Compl. [Dkt. # 38] ("Def.'s Mot."). It argues that the only proper defendant in this action is the United States, that the government has not waived its sovereign immunity in this instance, that plaintiff has failed to exhaust its administrative remedies, and that plaintiff has failed to state a plausible claim for relief in any event. Mem. in Supp. of Def.'s Mot. [Dkt. # 38-1] ("Def.'s Mem.") at 2-3.

         The defendants are correct that the only proper defendant in this action is the United States, and so the government will be substituted as the sole defendant pursuant to the Westfall Act. 28 U.S.C. § 2679. The Court also finds that it lacks subject matter jurisdiction over plaintiffs tort claims because the government has not waived its sovereign immunity, plaintiffs tort claims are barred under the FTCA, and plaintiff has not exhausted its administrative remedies. Further, to the extent plaintiff attempts to raise a claim under the Due Process Clause of the Fifth Amendment, it has failed to allege sufficient facts to state a claim. Therefore, for the reasons set forth in more detail below, the Court will grant defendants' motion and dismiss this case in its entirety.

         BACKGROUND

         Plaintiff is a Kentucky corporation with its principal place of business in Odessa, Florida. Am. Compl. ¶ 8. The seven individual defendants are Charles E. Samuels, Jr., the Director of the BOP; Catherine Scott, Chief of the BOP National Acquisitions and Systems Section; Timothy R. Barnett, a BOP Residential Reentry Manager; Cheryl Dennings, a Community Corrections Administrator for BOP; Lola Lee-Brown, a BOP Contracting Officer; Osoria Toston, a former Contract Oversight Specialist for BOP; and Andrea Johnson, a former Community Corrections Regional Coordinator for BOP. Id. ¶¶ 9-15.

         Plaintiff operates Residential Reentry Centers ("RRCs") for federal offenders throughout the United States pursuant to contracts with the BOP. Am. Compl. ¶ 8. Although plaintiff alleges that it currently operates six RRCs, it claims that "at one point [it] had as many as seventeen different RRCs" and that this was "prior to the [defendants' attempts to eliminate Bannum from BOP contracting ” Id. Plaintiff states that it was under contract with BOP for eleven RRCs as recently as 2009 but that its bids for new RRC contracts since 2009 have been unsuccessful. Id. ¶¶ 23-26. Plaintiff concedes, however, that during the same time period, the BOP has exercised options and extended some of its existing contracts with plaintiff. Id. ¶¶ 25, 38.

         Plaintiffs allegations in the complaint are long and detailed, but essentially, it maintains that the individual defendants "gave Bannum a very difficult time" in the contract solicitation process, engaged in a "scheme ... to put Bannum out of business and ensure that it does not receive any new government contracts, " "treat[ed] Bannum differently than other contractors, " and conspired to deprive Bannum of contracts when other competitors were involved in the bidding process. Am. Compl. ¶¶ 32, 35, 39, 43.

         For example, plaintiff claims the BOP "raided" Bannum Place of Tupelo, one of plaintiff s RRCs, "during the bidding evaluation period for the follow-up contract" on that center, and as a result, "Bannum's current contract files were confiscated by the BOP" and "the facility was damaged." Am. Compl. ¶¶ 72, 75-76. Further, Plaintiff claims that it was forced by defendants to suspend or improperly terminate its employees at various RRCs and that the subsequent contracts for those RRCs were awarded to plaintiffs competitor. Id. ¶¶ 83, 85, 93, 103, 109(e). Plaintiff also asserts that defendants "would issue unilateral modifications [to its contracts], thereby increasing the amount of wages that Bannum was required to pay its employees" and that the BOP "refuse[d] to timely reimburse Bannum" for these expenses. Id. ¶¶ 122, 124

         Plaintiff initiated this action on July 31, 2015, Compl. [Dkt. # 1], and it filed its amended complaint on March 9, 2016. Am. Compl. In Count I, plaintiff alleges that defendants subjected it to a "de facto debarment" by "engag[ing] in a campaign to sabotage [plaintiffs] operations, harm its ability to act as a contractor, defame its contract performance history, and damage [its] ability to obtain new business." Id. ¶¶ 170, 175. Plaintiff insists that what it characterizes as a debarment "implicates] the due process clause of the 5th Amendment to the United States Constitution, and requires, at minimum, proper notice to Bannum of the charges on which the debarment is based, and that Bannum be afforded an opportunity to refute those charges." Id. ¶ 177. In Count II, plaintiff brings a claim for "interference with contractual relations, prospective contractual relations, and prospective advantageous economic relationship, " claiming that defendants "have used and misused their positions and authority as employees of the BOP to interfere with and disrupt the existing and prospective business relationships of Plaintiff Bannum, Inc. to the point of destroying those relationships and eliminating Plaintiff Bannum, Inc. as a contractor." Id. ¶ 190. According to plaintiff, defendants carried out this attack in a number of ways, including by making false and defamatory statements about Bannum, pursuing unwarranted investigations into alleged wrongdoing by the contractor, and forcing the company to fire particular employees. Id.¶190(a)-(f).

         On April 21, 2016, defendants moved to dismiss this case in its entirety, Def.'s Mot., and plaintiff filed its opposition to that motion on June 10, 2016. PL's Mem. in Opp. to Def.'s Mot. [Dkt. # 40] ("PL's Opp"). Defendants filed a reply on July 22, 2016. Reply in Supp. of Def.'s Mot. [Dkt. #42] ("Def.'s Reply").

         STANDARD OF REVIEW

         In evaluating a motion to dismiss under either Rule 12(b)(1) or 12(b)(6), 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) (internal citations omitted), quoting Schuler v. United States, 617 F.2d 605, 608 (D.C. Cir. 1979); see also Am. Nat'l Ins. Co. v. FDIC, 642 F.3d 1137, 1139 (D.C. Cir. 2011). Nevertheless, the Court need not accept inferences drawn by the plaintiff if those inferences are unsupported by facts alleged in the complaint, nor must the Court accept plaintiffs legal conclusions. Browning v. Clinton, 292 F.3d 235, 242 (D.C. Cir. 2002).

         Subject Matter Jurisdiction

         Under Rule 12(b)(1), the plaintiff bears the burden of establishing jurisdiction by a preponderance of the evidence. See Lujan v. Defs. of Wildlife, 504 U.S. 555, 561 (1992); Shekoyan v. Sibley Int'l Corp., 217 F.Supp.2d 59, 63 (D.D.C. 2002). Federal courts are courts of limited jurisdiction and the law presumes that "a cause lies outside this limited jurisdiction." 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."). "[B]ecause subject-matter jurisdiction is 'an Art[icle] III as well as a statutory requirement ... no action of the parties can confer subject-matter jurisdiction upon a federal court.'" Akinseye v. District of Columbia, 339 F.3d 970, 971 (D.C. Cir. 2003), quoting Ins. Corp. of Ir., Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 702 (1982).

         When considering a motion to dismiss for lack of jurisdiction, unlike when deciding a motion to dismiss under Rule 12(b)(6), the court "is not limited to the allegations of the complaint." Hohri v. United States, 782 F.2d 227, 241 (D.C. Cir. 1986), vacated on other grounds, 482 U.S. 64 (1987). Rather, "a court may consider such materials outside the pleadings as it deems appropriate to resolve the question [of] whether it has jurisdiction to hear the case." Scolaro v. D.C. Bd. of Elections & Ethics, 104 F.Supp.2d 18, 22 (D.D.C. 2000), citing Herbert v. Nat'l Acad. of Scis., 974 F.2d 192, 197 (D.C. Cir. 1992); see also Jerome Stevens Pharm., Inc. v. FDA, 402 F.3d 1249, 1253 (D.C. Cir. 2005).

         Failure ...


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