United States District Court, District of Columbia
PETER J. MAGEE, Plaintiff,
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS, et al., Defendants.
B. WALTON United States District Judge
plaintiff, Peter J. Magee, brings this civil action against
the American Institute of Certified Public Accountants (the
“Institute”); Rebecca Ferris, Francine Calogero,
Nancy Miller, Jennifer Goad, and Leonard Hecth, in their
official capacities as employees of the Institute's
Ethics Division; and Does 1-50,  asserting two claims for
negligence, a claim for breach of the implied covenant of
good faith and fair dealing, and a breach of fiduciary duty
claim against the Institute, as well as claims for
intentional infliction of emotional distress and negligent
infliction of emotional distress against all defendants.
See Complaint (“Compl.”) ¶¶
3-10, 29-58. Currently before the Court is the
defendants' Motion to Dismiss (“Defs.'
Mot.”), which seeks dismissal of the plaintiff's
Complaint pursuant to Rule 12(b)(6). Upon careful
consideration of the parties' submissions,  the Court
concludes that it must grant the defendants' motion to
dismiss all of the plaintiff's claims with the exception
of the claim for breach of the implied covenant of good faith
and fair dealing against the Institute.
plaintiff asserts the following in his Complaint. He is a
certified public accountant currently operating an accounting
business in Reno, Nevada, and whose clients include Indian
tribes, tribal governments, and other tribal entities.
See Compl. ¶¶ 11-12. He is a longstanding
member of the Institute, a professional membership
organization comprised of certified public accountants and
incorporated as a nonprofit corporation in the District of
Columbia. See Id. ¶¶ 4, 19-20. As a member
of the Institute, the plaintiff agreed to subject himself to
the rules and procedures of the Institute's Ethics
Committee. See id. ¶ 21.
in 2006, the Ethics Committee began investigating the
services the plaintiff provided to a tribal client in
California that was undergoing a federal audit. See
id. ¶ 23. “The Ethic's Committee's
concern was [the plaintiff's] use of language in the
audit and inclusion or non-inclusion of related audit
documentation, requested specifically by the [t]ribal
client.” Id. This investigation is based out
of the Institute's North Carolina offices. See
Def.'s Mem. At 1. As a result of the investigation, the
plaintiff has been under the oversight of the Ethics
Committee for ten years, but the matter has not yet been
resolved, nor has the Ethics Committee afforded the plaintiff
a hearing to dispute the allegations. See Compl.
¶¶ 23-24. According to the plaintiff, he
has been subjected to increased levels of [Institute]
scrutiny by the Ethics Committee and threatened with gestapo
like tactics that included, but are not limited to,
“take it or leave it” ethical resolution
proposals subjecting [him] to additional Ethics Committee
scrutiny and in which [he] was told he must acquiesce or face
increasing scrutiny and[/]or discipline by the Ethics
Committee; use by the Ethics Committee of documents provided
by [him] of which the Ethics Committee would fabricate
additional sanctions, concerns and generate additional
correspondences and document requests for [his] response . .
Id. ¶ 24.
plaintiff filed his Complaint on May 17, 2016, see
id. at 1, asserting the various common law claims
against the defendants arising out of their investigation and
discipline of the plaintiff, see id. ¶¶
32-34, 37-38, 43-44, 47-48, 50-53, 55-58. The defendants
filed their motion to dismiss on June 24, 2016. See
Defs.' Mot. at 1.
STANDARD OF REVIEW
complaint must contain “a short and plain statement of
the claim showing that the pleader is entitled to
relief.” Fed.R.Civ.P. 8(a)(2). Thus, to survive a
motion to dismiss for “failure to state a claim upon
which relief can be granted, ” Fed.R.Civ.P. 12(b)(6),
the 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 (2009) (quoting Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A
claim has facial plausibility when the plaintiff pleads
factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged.” Id. (citing Twombly, 550
U.S. at 556); see also Kowal v. MCI Commc'ns
Corp., 16 F.3d 1271, 1276 (D.C. Cir. 1994) (noting that
the plaintiff is entitled to “the benefit of all
inferences that can be derived from the facts
alleged”). Although the Court “must treat the
complaint's factual allegations as true [and] must grant
[the] plaintiff the benefit of all reasonable inferences from
the facts alleged, ” Trudeau v. Fed. Trade
Comm'n, 456 F.3d 178, 193 (D.C. Cir. 2006)
(alteration in original) (citation omitted), legal
allegations devoid of factual support are not entitled to
this assumption, see, e.g., Kowal, 16 F.3d
at 1276. Moreover, a plaintiff must provide more than
“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).
Choice of Law
the defendants are the only party who briefed the question as
to which jurisdiction's law applies in this diversity of
citizenship matter, all parties rely on District of Columbia
law in their submissions to the Court. See
Defs.' Mem. at 2-5; Pl.'s Opp'n at 2-6.
“When deciding state-law claims under diversity . . .
jurisdiction, federal courts apply the choice-of-law rules of
the jurisdiction in which they sit.” Mastro v.
Potomac Elec. Power Co., 447 F.3d 843, 857 (D.C. Cir.
2006) (citations and internal quotation marks omitted). And,
the choice-of-law rules in the District of Columbia dictate
that “the [C]ourt must first determine if there is a
conflict between the laws of the relevant
jurisdictions.” Parnigoni v. St. Columba's
Nursery Sch., 681 F.Supp.2d 1, 12 (D.D.C. 2010) (Walton,
J.) (alteration in original) (citation omitted). If no
conflict exists, District of Columbia law applies by default.
See Brown v. Dorsey & Whitley, LLP, 267
F.Supp.2d 61, 70 (D.D.C. 2003).
the exception of the negligent infliction of emotional
distress claim, the elements for each claim asserted by the
plaintiff are the same in the District of Columbia, Nevada,
and North Carolina, the three jurisdictions that have some
connection with this case. The elements of a negligence claim
in all three jurisdictions are (1) duty, (2) breach, (3)
causation, and (4) damages. Compare Powell ex rel. Ricks
v. District of Columbia, 634 A.2d 403, 406 (D.C. 1993)
(providing the elements of negligence in the District of
Columbia), with Gibson v. Ussery, 675 S.E.2d 666,
668 ( N.C. Ct. App. 2009) (providing the elements of
negligence in North Carolina), and Sadler v. PacifiCare
of Nev., 340 P.3d 1264, 1267 (Nev. 2014) (providing the
elements of negligence in Nevada). To establish a claim for
intentional infliction of emotional distress in the three
jurisdictions, a plaintiff must plead that: (1) the defendant
acted in an extreme and outrageous manner, (2) either
intentionally or recklessly, which (3) caused the plaintiff
severe emotional distress. Compare Ortberg v. Goldman
Sachs Grp., 64 A.3d 158, 163 (D.C. 2013) (stating the
elements of intentional infliction of emotional distress in
the District of Columbia), with Turner v. Thomas,
794 S.E.2d 439, 446 ( N.C. 2016) (stating the elements of
intentional infliction of emotional distress in North
Carolina), and Nelson v. City of Las Vegas, 665 P.2d
1141, 1145 (Nev. 1983) (stating the elements of intentional
infliction of emotional distress in Nevada). For breach of
fiduciary duty claims, each jurisdiction requires that (1) a
fiduciary relationship exists between the parties, and (2)
the defendant breached that duty. Compare Gov't of
Rwanda v. Rwanda Working Grp., 227 F.Supp.2d 45, 64
(D.D.C. 2002) (stating the elements for breach of fiduciary
duty in the District of Columbia), with White v. Consol.
Planning, Inc., 603 S.E.2d 147, 155 ( N.C. Ct. App.
2004) (stating the elements of breach of fiduciary duty in
North Carolina), and Stalk v. Mushkin, 199 P.3d 838,
843 (Nev. 2009) (stating the elements of breach of fiduciary
duty in Nevada). Finally, to establish a breach of the
implied covenant of good faith and fair dealing in all three
jurisdictions, the plaintiff must plead that (1) the
defendant has taken steps, or refused to take steps, (2)
which destroyed or injured the plaintiff's right to
receive the fruits of the contract. Compare Mero v. City
Segway Tours of Wash. D.C., LLC, 826 F.Supp.2d 100, 106
(D.D.C. 2011) (stating the elements of breach of the implied
covenant of good faith and fair dealing in the District of
Columbia), with Williams v. Craft Dev., LLC, 682
S.E.2d 719, 723 ( N.C. Ct. App. 2009) (stating the elements
of breach of the implied covenant of good faith and fair
dealing in North Carolina), and Hilton Hotels Corp. v.
Butch Lewis Prods., Inc., 808 P.2d 919, 923 (Nev. 1991)
(stating the elements of breach of the implied covenant of
good faith and fair dealing in Nevada). Consequently, because
no true conflict exists between the applicable laws of
Nevada, North Carolina, or the District of Columbia with
respect to the aforementioned claims, the Court will apply
the law of the District of Columbia.
claims of negligent infliction of emotional distress, both
the District of Columbia and North Carolina require a
plaintiff to plead that: (1) the defendant owed a duty or
held a relationship with the plaintiff; (2) the defendant
engaged in conduct that would foreseeably cause the plaintiff
severe emotional distress; and (3) the defendant's
conduct caused the plaintiff severe emotional distress.
Compare Sibley v. St. Albans Sch., 134 A.3d 789,
797-98 (D.C. 2016) (stating the elements of negligent
infliction of emotional distress in the District of
Columbia), with Acosta v. Byrum, 638 S.E.2d 246, 250
( N.C. Ct. App. 2006) (stating the elements of negligent
infliction of emotional distress in North Carolina). In
Nevada, however, in order for a plaintiff to assert a
negligent infliction of emotional distress claim, a plaintiff
must plead that he “suffer[ed] ‘serious emotional
distress which result[ed] in physical symptoms caused by
apprehending the death or serious injury of a loved one due
to the negligence of the defendant.'”
Barmettler v. Reno Air, Inc., 956 P.2d 1382, 1387
(Nev. 1998) (quoting Chowdry v. NLVH, Inc., 851 P.2d
459, 462 (Nev. 1993)).
a conflict exists regarding the elements a plaintiff must
plead to allege a negligent infliction of emotional distress
claim, in deciding which jurisdiction's law controls, the
Court “must determine which jurisdiction has the most
significant relationship to the claims being pursued by the
plaintiff.” Parnigoni, 681 F.Supp.2d at 12.
In making this determination, the Court must consider the
following factors: “(a) the place where the injury
occurred; (b) the place where the conduct causing the injury
occurred; (c) the domicile, residence, nationality, place of
incorporation and place of business of the parties; and (d)
the place where the relationship is centered.”
Id. (quoting District of Columbia v.
Coleman, 667 A.2d 811, 816 (D.C. 1995)). Upon
consideration of these factors, the Court concludes that
North Carolina law must be applied to the plaintiff's
negligent infliction of emotional distress claim for the
following reasons. The place where the injury occurred is
Nevada, where the plaintiff resides and conducts his
business. See Compl. ¶¶ 3, 11. The place
where the conduct causing the plaintiff's alleged injury
occurred is North Carolina, because the Institute's
investigation of the plaintiff is based in its North Carolina
office. See Defs.' Mem. at 1. The
plaintiff's domicile and place of business is Nevada,
see Compl. ¶¶ 3, 11, while the
Institute's place of incorporation is the District of
Columbia, and the place of business of its Ethics Division is
North Carolina, see Defs.' Mem. at 1. Finally,
the place where the relationship is centered is North
Carolina, because that is where the ...