Manafort v. U.S. Department of Justice

          MEMORANDUM OPINION

          AMY BERMAN JACKSON United States District Judge

         Plaintiff Paul J. Manafort Jr., who has been indicted in two criminal cases brought by the Office of Special Counsel, filed a civil complaint against the Department of Justice ("DOJ"), Special Counsel Robert S. Mueller III, and Acting Attorney General Rod J. Rosenstein, alleging that the Department exceeded its authority when it issued the order appointing the Special Counsel (the "Appointment Order"), and that the Special Counsel exceeded his authority as well. Compl. [Dkt. # 1]. Manafort has refined his claims since the case was originally filed, and in this civil case, he is only asking the Court to enj oin future actions against him under the Appointment Order. But as the D.C. Circuit has made clear, "prospective defendants cannot, by bringing ancillary equitable proceedings, circumvent federal criminal procedure." Deaver v. Seymour, 822 F.2d 66, 71 (D.C. Cir. 1987). Therefore, defendants' motion to dismiss the complaint will be granted.

         Count I of the complaint, brought against DOJ and the Acting Attorney General, alleges that the Acting Attorney General issued an Appointment Order that did not comport with the applicable DOJ regulation. See Compl. ¶¶ 50-59; 28 C.F.R. § 600.4. Therefore, according to Manafort, the grant of authority to the Special Counsel was an ultra vires action on the part of the Acting Attorney General in violation of the Administrative Procedure Act ("APA"). See Compl. ¶¶ 50-59. Count II, brought only against the Special Counsel, alleges that even if the Appointment Order was valid, the Special Counsel exceeded the scope of the authority he was given when he indicted Manafort, because the charges did not arise out of the investigation into the 2016 presidential election and the allegations of Russian interference in the election. Id. ¶¶ 60-67.

         Plaintiff seeks declaratory and injunctive relief. The complaint requests "an order and judgment setting aside the Appointment Order and declaring it invalid, " and it asks for "an order and judgment declaring ultra vires and setting aside all actions taken against Mr. Manafort pursuant to the Appointment Order, " which would include the pending criminal indictments. Compl. at 17 ("Prayer for Relief); see also Id. ¶ 63 ("Mr. Mueller's actions must be set aside.").

         On February 2, 2018, defendants filed a motion to dismiss the civil case pursuant to Federal Rule of Civil Procedure 12(b)(6). Defs.' Mot. to Dismiss [Dkt. # 16] ("Defs.' Mot"); Defs.' Mem. in Supp. of Defs.' Mot. [Dkt. # 16-1] ("Defs.' Mem."). They argue first that Manafort may not bring a federal civil action to interfere with his ongoing criminal prosecution. Defs.' Mem. at 11-18. Next, they contend that Count I should be dismissed for three reasons: (1) the APA may only be invoked by claimants who do not have an adequate remedy at law, and Manafort has such a remedy in the Federal Rules of Criminal Procedure; (2) the Special Counsel regulations do not create legal rights that can be enforced through any lawsuit, including a civil suit brought under the APA; and (3) there has been no final agency action for purposes of the APA. Id. at 11-28. Defendants also argue that Count II fails to state a justiciable claim under the Declaratory Judgment Act because the Act standing alone does not provide a basis for federal courts to exercise subject matter jurisdiction under Article III of the Constitution. See Id. at 28-33.^[1]

         In the meantime, the Court set a motions schedule in the criminal case, and on March 14, 2018, Manafort filed a motion pursuant to Federal Rules of Criminal Procedure 12(b)(2) and 12(b)(3) to dismiss the indictment on the same two grounds: (1) because the appointment of the Special Counsel was an ultra vires act by the Acting Attorney General that was contrary to the terms of the DOJ Special Counsel regulations; and (2) because the indictment exceeds the scope of the authority granted to the Special Counsel in the Appointment Order. United States v. Manafort, No. 1:17-cr-201-l (D.D.C. 2017), Def.'s Mot. to Dismiss the Superseding Indictment [Dkt. # 235] at 13-37. And on March 27, 2018, Manafort filed a similar motion to dismiss the indictment pending in the Eastern District of Virginia. See United States v. Manafort, No. 1:18-cr-83 (E.D. Va. 2018), Def.'s Mot. to Dismiss [Dkt. # 30]. While there is obvious overlap among the issues raised in the instant civil action and in the motions to dismiss the criminal cases, this opinion will not address, and should not be read as expressing any opinion about, the merits of those motions.

         In any event, Manafort has significantly narrowed the scope of his civil case to reduce that overlap. In his opposition to the pending motion to dismiss, plaintiff appeared to back away from what seemed to be an unambiguous request that the Court deem the indictment to be invalid. When the complaint was filed, it alleged:

The indictment raises stale allegations DOJ must have been aware of for nearly a decade; they are not matters that "arose from the investigation" into the 2016 election and alleged collusion with the Russian government. By ignoring the boundaries of the jurisdiction granted to the Special Counsel in the Appointment Order, Mr. Mueller acted beyond the scope of his authority. Mr. Mueller's actions must be set aside.

Compl. ¶ 63 (internal edits omitted); see also Prayer for Relief ¶ b (seeking "an order and judgment. . . setting aside all actions taken against Mr. Manafort pursuant to the Appointment Order"). But in a footnote to his opposition to defendants' motion to dismiss, plaintiff stated: "[t]o the extent the [c]omplaint can be read to seek dismissal of the indictment in the pending criminal case in this Court, Mr. Manafort expressly waives any such claim for relief in this civil case." Pl's Opp. at 11 n.2. At the hearing on the motion held on April 4, 2018, plaintiff disavowed any further interest in an order setting aside the indictments, see Tr. of Proceedings Held on Apr. 4 [Dkt. # 33] ("Tr.") at 7:12-20; id. at 10:10-13; id. at 11:11-14, and with that, he abandoned Count II. Id. at 10:14-16 ("The Court: So that means you're withdrawing Count Two? Mr. Downing: We are, Your Honor."). Thus, the only claim that is pending for purposes of this motion is Count I against the Department of Justice and the Acting Attorney General under the APA, and plaintiff has emphasized that with that claim, he seeks only "prospective relief: an order declaring invalid the ultra vires Appointment Order and enjoining the Special Counsel's future ultra vires exercise of authority under that Order." Pl's Opp. at 11; see also Tr. at 7:22-25; id. at 8:21-23.

         Moreover, counsel further clarified at the hearing that plaintiff is not seeking an order setting aside the Appointment Order in its entirety; rather, he is only seeking to invalidate paragraph (b)(ii), which grants the Special Counsel the authority to investigate "any matters that arose or may arise directly from the investigation." Tr. at 9:12-10:9; see also Ex. A to Compl. [Dkt. #1-1] ("Appointment Order").

         But a civil case is not the appropriate vehicle for taking issue with what a prosecutor has done in the past or where he might be headed in the future. It is a sound and well-established principle that a court should not exercise its equitable powers to interfere with or enjoin an ongoing criminal investigation when the defendant will have the opportunity to challenge any defects in the prosecution in the trial court or on direct appeal. Therefore, the Court finds that this civil complaint must be dismissed. The conclusion that this is the necessary outcome is reinforced by the requirement in the sole statute that plaintiff invokes - the Administrative Procedure Act - that a claimant may only seek relief under the Act if he lacks an adequate remedy at law. Plaintiff s claims about the legitimacy of the Appointment Order can be addressed in his criminal cases in accordance with the Federal Rules of Criminal Procedure, so the Court should not reach the merits of those claims here. Moreover, given the way plaintiff has re-characterized and altered his civil complaint to overcome these obstacles to the Court's exercise of its jurisdiction, it is not at all clear that there is any ripe, justiciable controversy left in this lawsuit for the Court to resolve, and there are certainly no allegations of impending irreparable harm that would justify injunctive relief.

         BACKGROUND

         I. Regulatory Framework

         As a general matter, litigation on behalf of the United States is "reserved to officers of the Department of Justice, under the direction of the Attorney General." 28 U.S.C. § 516. But Congress has expressly authorized the Attorney General to appoint Special Counsel. Section 515(a) of Title 28 of the United States Code provides:

The Attorney General or any other officer of the Department of Justice, or any attorney specially appointed by the Attorney General under law, may, when specifically directed by the Attorney General, conduct any kind of legal proceeding; civil or criminal . . . which United States attorneys are authorized by law to conduct....

28 U.S.C. § 515(a).

         DOJ has promulgated a set of regulations that outline circumstances under which the Attorney General may appoint a Special Counsel and the procedure for doing so. The regulations also describe the scope of a Special Counsel's authority and the nature of the ongoing relationship between a Special Counsel and DOJ. See28C.F.R §§600.1-600.10. In his complaint, Manafort points to one of these regulations in particular.

         The regulation that forms the basis for this lawsuit provides that the Special Counsel's original jurisdiction "shall be established by the Attorney General, " 28 C.F.R. § 600.4(a), and that the "Special Counsel will be provided with a specific factual statement of the matter to be investigated." Id. The "original jurisdiction" of the Special Counsel also includes "the authority to investigate and prosecute federal crimes committed in the course of, and with intent to interfere with, the Special Counsel's investigation." Id.

         Under the terms of this regulation, the Special Counsel may seek "additional jurisdiction" from the Attorney General "beyond that specified in his or her original jurisdiction" if the Special Counsel concludes that it "is necessary in order to fully investigate and resolve the matters assigned, or to investigate new matters that come to light in the course of his or her investigation." Id. § 600.4(b). At that point, the Attorney General "will determine whether to include the additional matters within the Special Counsel's jurisdiction or assign them elsewhere." Id.

         II. Factual Background

         The complaint alleges that by "early 2017, DOJ had publicly revealed that it was investigating allegations that President Trump's campaign colluded with Russian government officials and/or representatives to sway the outcome of the 2016 presidential election." Compl.¶27.

         The Director of the FBI at the time, James B. Comey, testified about the investigation in a hearing before the House Permanent Select Committee on Intelligence on March 20, 2017. He stated:

I have been authorized by the Department of Justice to confirm that the FBI, as part of our counterintelligence mission, is investigating the Russian government's efforts to interfere in the 2016 presidential election, and that includes investigating the nature of any links between individuals associated with the Trump campaign and the Russian government and whether there was any coordination between the campaign and Russia's efforts.

         James B. Comey, HPSCI Hearing Titled Russian Active Measures Investigation, FBI.gov (March 20, 2017), https://www.fbi.gov/news/testimony/hpsci-hearing-titled-russian-active-measures- investigation/layout, view.^[2] Former Director Comey also specifically informed the Committee that "[a]s with any counterintelligence investigation, this will also include an assessment of whether any crimes were committed." Id. But he explained, "[b]ecause it is an open, ongoing investigation and is classified, I cannot say more about what we are doing and whose conduct we are examining." Id.

         On March 2, 2017, Attorney General Jeff Sessions recused himself from the matter, and Deputy Attorney General Rod J. Rosenstein became the highest-ranking DOJ official with authority over the investigation. Compl. ¶¶ 28-29. On May 17, 2017, Acting Attorney General Rosenstein appointed Robert S. Mueller III to serve as Special Counsel for the Department of Justice. Id. ¶ 30.

         The Appointment Order states:

By virtue of the authority vested in me as Acting Attorney General, including 28 U.S.C. §§ 509, 510, and 515, in order to discharge my responsibility to provide supervision and management of the Department of Justice, and to ensure a full and thorough investigation of the Russian government's efforts to interfere in the 2016 presidential election, I hereby order as follows:

(a) Robert S. Mueller III is appointed to serve as Special Counsel for the United States ...