McKoy v. Spencer

          MEMORANDUM OPINION

          COLLEEN KOLLAR-KOTELLY UNITED STATES DISTRICT JUDGE.

         This suit arises from Plaintiff Muriel McKoy's discharge from her employment as a dentist with the Navy. Plaintiff claims that Defendant violated her constitutional rights to free speech and due process under the First and Fifth Amendments to the United States Constitution, as well as the Privacy Act. Before the Court is Defendant's Motion for Partial Dismissal of the Complaint and for Partial Summary Judgment. Defendant argues that Plaintiff's Privacy Act claim should be dismissed for failure to exhaust and that Plaintiff's requests to be reinstated to the Navy and to enjoin Defendant from violating the constitutional rights of third parties who report discrimination should be dismissed for lack of standing. Additionally, Defendant asks the Court to grant summary judgment on Plaintiff's Fifth Amendment due process claim based on a failure to allege a constitutionally protected interest.

         Upon consideration of the pleadings, ^[1] the relevant legal authorities, and the applicable record, the Court GRANTS IN PART and DENIES IN PART Defendant's Motion. The Court GRANTS Defendant's motion and DISMISSES Plaintiff's Privacy Act claim insofar as it is based on Defendant's failure to amend personnel records as Plaintiff failed to exhaust this claim. The Court also DISMISSES Plaintiff's request that the Court enjoin Defendant from retaliating against third parties who report discrimination as Plaintiff does not have standing to request relief for third parties. Finally, the Court DISMISSES Plaintiff's Fifth Amendment due process claim alleging infringement of Plaintiff's interest in a clean record with the National Practitioner Data Bank and the New York licensing authorities as Plaintiff has not alleged a constitutionally protected interest. Defendant's motion is otherwise DENIED.

         Also before the Court is Plaintiff's Motion for Leave to Conduct Discovery. This motion was made in response to the Court's May 23, 2018 Order that Plaintiff file a motion explaining why, as a legal matter given the claims in this case, she is entitled to discovery. See ECF No. 33. Defendant contends that Plaintiff is not entitled to discovery and that the Court should instead restrict itself to review of the administrative record.

         Upon consideration of the pleadings, ^[2] the relevant legal authorities, and the applicable record, the Court GRANTS IN PART and DENIES IN PART Plaintiff's Motion. The Court DENIES Plaintiff's motion and concludes that Plaintiff is not entitled to discovery on her Fifth Amendment due process claim alleging an interest in the continued practice of dentistry with the Navy. This claim requires the Court to evaluate an agency action made on the administrative record; so, the Court will restrict its review to the administrative record. But, Plaintiff's motion is GRANTED as to the remainder of her claims as discovery on those claims is permissible.

         I. BACKGROUND

         Defendant previously filed a Motion to Dismiss or, in the Alternative, for Summary Judgment. See ECF No. 8. And in the Court's Memorandum Opinion granting in part and denying in part Defendant's motion, the Court set out the factual background of this case. See ECF No. 16; see also McKoy v. Spencer, 271 F.Supp.3d 25, 29-30 (D.D.C. 2017). The Court incorporates its previous background section as part of this opinion. The Court recites here only the background essential to the Court's resolution of the currently pending motions. The Court reserves further presentation of the facts for the issues discussed below.

         Plaintiff Muriel McKoy is an African American female who was previously employed by the Navy as a dentist. Compl., ECF No. 1, ¶¶ 4, 7. Based on the results of an evaluation of Plaintiff's work, Plaintiff's clinical dentistry privileges were held in abeyance and then suspended. Id. at ¶¶ 14-15. Further proceedings and appeals led to Plaintiff being prohibited from practicing dentistry in the Navy. Id. at ¶ 17. She was eventually separated and discharged from the Navy. Id. at ¶ 25.

         Subsequently, Plaintiff filed this lawsuit alleging that the manner in which the Navy suspended and then discharged her violated her rights under the First and Fifth Amendments to the United States Constitution. Id. at ¶¶ 28-36. Plaintiff further alleges that the Navy violated the Privacy Act by refusing to amend certain personnel records and by disclosing Plaintiff's personnel records to various third parties. Id. at ¶¶ 37-40. Plaintiff seeks an injunction, a declaratory judgment, reinstatement with removal of adverse personnel actions, rescission of Defendant's various statements to third parties relating to Plaintiff's separation, cessation of Defendant's efforts to recoup the incentive pay and bonus pay Plaintiff had received while employed by the Navy, as well as damages, fees, costs and expenses. Id. at ¶¶ A-F.

         In lieu of filing an answer to Plaintiff's complaint, Defendant filed a Motion to Dismiss or, in the Alternative, for Summary Judgment. See ECF No. 8. In response, the Court dismissed Plaintiff's claim for money damages under the First and Fifth Amendments but denied Defendant's motion in all other respects. See generally Sept. 21, 2017 Order, ECF No. 15. Following the Court's Order, Defendant filed its Answer to Plaintiff's Complaint. See ECF No. 17. Thereafter, the parties disputed whether or not Defendant had provided the complete administrative record. In response, Plaintiff filed a Motion to compel Defendant to supplement the administrative record, which Defendant opposed. See generally Pl.'s Mot. to Compel Submission of Complete Administrative Record in Response to Court's Nov. 29, 2017 Order, ECF No. 22, and Def.'s Opp'n to Pl.'s Mot. to Compel, ECF No. 25. Considering both parties' arguments, the Court denied Plaintiff's motion without prejudice. See May 23, 2018 Order, ECF No. 33. The Court explained that Plaintiff's motion failed to address whether she was legally entitled to discovery on her claims or whether she was bound by the administrative record. Id.

         In response to the Court's Order, Plaintiff filed a Motion for Leave to Conduct Discovery. See Pl.'s Mot., ECF No. 34. Defendant responded by opposing Plaintiff's motion for discovery and also by filing a motion to dismiss and a motion for summary judgment. See Def.'s Mot., ECF No. 35. Both Plaintiff's and Defendant's motions are currently before the Court.

         II. LEGAL STANDARDS

         Defendant moves to dismiss Plaintiff's Privacy Act claim, her request for reinstatement to the Navy, and her request to enjoin the Navy from retaliating against third parties who report discrimination. Defendant also moves for summary judgment on Plaintiff's Fifth Amendment due process claim. However, in requesting summary judgment on Plaintiff's due process claim, Defendant makes a purely legal argument. Specifically, Defendant contends that Plaintiff has failed to allege a constitutionally protected interest. As the Court can resolve this legal issue by relying on only Plaintiff's Complaint, Defendant's motion is more properly treated as a motion to dismiss. Accordingly, the Court will treat it as such.

         A. Subject Matter Jurisdiction under Rule 12(b)(1)

         Defendant requests dismissal under Federal Rule of Civil Procedure 12(b)(1) for lack of jurisdiction. This is the correct standard for the dismissal of Plaintiff's Privacy Act claims. Defendant contends that Plaintiff failed to exhaust her Privacy Act claims, and exhaustion under the Privacy Act is a jurisdictional requirement. See Stein v. U.S. Sec. and Exch. Comm'n, 266 F.Supp.3d 326, 335-36 (D.D.C. 2017) (finding the court did not have jurisdiction over the plaintiff's Privacy Act claim that he had failed to exhaust); see also Barouch v. U.S. Dep't of Justice, 962 F.Supp.2d 30, 67 (D.D.C. 2013) (collecting cases treating exhaustion under the Privacy Act as jurisdictional); see also 5 U.S.C. §§ 552a(d)(1)-(3), (g)(1) (setting out the statutory requirement for exhaustion of Privacy Act claims).

         Rule 12(b)(1) also provides the correct standard for evaluating Defendant's motion to dismiss Plaintiff's requests for reinstatement to the Navy and for injunctive relief for third parties. On these claims, Defendant moves for dismissal based on lack of standing. And, standing is a jurisdictional requirement. See Friends of Animals v. Jewell, 828 F.3d 989, 991 (D.C. Cir 2016) (affirming dismissal under Fed.R.Civ.P. 12(b)(1) for lack of standing); see also Food & Water Watch, Inc. v. Vislack, 808 F.3d 905, 913 (D.C. Cir. 2015) (“we must evaluate whether they have established standing under the standard applicable pursuant to Federal Rule of Civil Procedure 12(b)(1)”).

         A court must dismiss a case pursuant to Federal Rule 12(b)(1) when it lacks subject matter jurisdiction. In determining whether there is jurisdiction, the 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) (internal quotation marks omitted); see also Jerome Stevens Pharm., Inc. v. Food & Drug Admin., 402 F.3d 1249, 1253 (D.C. Cir. 2005) (“[T]he district court may consider materials outside the pleadings in deciding whether to grant a motion to dismiss for lack of jurisdiction.”). “At the motion to dismiss stage, counseled complaints, as well as pro se complaints, are to be construed with sufficient liberality to afford all possible inferences favorable to the pleader on allegations of fact.” Settles v. U.S. Parole Comm'n, 429 F.3d 1098, 1106 (D.C. Cir. 2005). In spite of the favorable inferences that a plaintiff receives on a motion to dismiss, it remains the plaintiff's burden to prove subject matter jurisdiction by a preponderance of the evidence. Am. Farm Bureau v. U.S. Envtl. Prot. Agency, 121 F.Supp.2d 84, 90 (D.D.C. 2000). “Although a court must accept as true all factual allegations contained in the complaint when reviewing a motion to dismiss pursuant to Rule 12(b)(1), [a] plaintiff['s] factual allegations in the complaint . . . will bear closer scrutiny in resolving a 12(b)(1) motion than in resolving a 12(b)(6) motion for failure to state a claim.” Wright v. Foreign Serv. Grievance Bd., 503 F.Supp.2d 163, 170 (D.D.C. 2007) (internal citations and quotation marks omitted).

         B. Failure to State a Claim under Rule 12(b)(6)

         The Court will evaluate the dismissal of Plaintiff's Fifth Amendment due process claim under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim for which relief may be granted. Whether or not Plaintiff pled a constitutionally protected interest goes to Plaintiff's ability to set forth allegations, which taken as true, would make Defendant liable for the misconduct alleged. Accordingly, this claim will be dealt with under Rule 12(b)(6). See Bowman v. Iddon, 848 F.3d 1034, 1038-40 (D.C. Cir. 2017) (affirming dismissal under Rule 12(b)(6) when the plaintiff “identifie[d] no constitutionally protected interest lost through Defendants' actions”).

         Pursuant to Federal Rule 12(b)(6), a party may move to dismiss a complaint on the grounds that it “fail[s] to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). “[A] complaint [does not] suffice if it tenders ‘naked assertion[s]' devoid of ‘further factual enhancement.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 557 (2007)). Rather, a complaint must contain sufficient factual allegations that, if accepted as true, “state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570. “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.” Iqbal, 556 U.S. at 678. “In evaluating a motion to dismiss, the Court must accept the factual allegations in the complaint as true and draw all reasonable inferences in favor of plaintiff.” Nat'l Postal Prof'l Nurses v. U.S. Postal Serv., 461 F.Supp.2d 24, 27 (D.D.C. 2006).

         III. DISCUSSION OF DEFENDANT'S MOTION

         In its motion, Defendant requests that the Court dismiss Plaintiff's Privacy Act claim for failure to exhaust and dismiss Plaintiff's requests for reinstatement to the Navy and for relief for third parties on standing grounds. Additionally, Defendant requests that the Court grant summary judgment on Plaintiff's Fifth Amendment due process claim for failure to allege a constitutionally protected interest. But, for the reasons provided above, Defendant's request for summary judgment on Plaintiff's due process claim will also be treated as a motion to dismiss. See Supra Sec. II. The Court will address each request in turn.

         A. Dismissal of Plaintiff's Privacy Act Claim

         Defendant argues that the Court should dismiss Plaintiff's Privacy Act claim as it has not been exhausted. Plaintiff states two types of violations of the Privacy Act, one involving disclosure of records and one involving the failure to amend records. First, Plaintiff claims that Defendant violated the Privacy Act by disclosing: (1) to the National Practitioner Data Bank and the New York licensing authorities that her clinical privileges were revoked for substandard or inadequate care; (2) to credit agencies that she was indebted to the Navy for the incentive pay she received each year she was in service; and (3) to her school that her discharge was less than honorable. Compl., ECF No. 1, ¶¶ 39-40. Second, Plaintiff contends that the Navy “violated the Privacy Act by recording in Plaintiff's personnel file that she practiced substandard dentistry which required the revocation of her clinical privileges.” Id. The Court will separately address both types of Privacy Act violations.

         1. Privacy Act Violation-Disclosure

         The Court will first address Plaintiff's Privacy Act allegation involving the disclosure of personnel records to third parties. Defendant argues that these claims should be dismissed for failure to exhaust. This Circuit “distinguishe[s] between Privacy Act suits seeking correction of agency records and suits seeking damages for inaccurate records. While plaintiffs must request agency amendment of allegedly inaccurate records before suing to compel amendment, exhaustion of administrative remedies is not required where an individual seeks damages” for inaccurate records. Hubbard v. U.S. Envtl. Prot. Agency Adm'r, 809 F.2d 1, 4 (D.C. Cir. 1986) (internal quotation marks omitted).

         Plaintiff's disclosure claims under the Privacy Act did not require the exhaustion of remedies because the claims do not involve a request for amendment to personnel records. Instead, Plaintiff is seeking damages for Defendant's allegedly unlawful disclosure of personnel records. And, a claim seeking damages for the unlawful disclosure of personnel records does not require exhaustion. See Nagel v. U.S. Dep't of Health, Educ. and Welfare, 725 F.2d 1438, 1441 n.2 (D.C. Cir. 1984) (explaining that exhaustion is not required when an individual seeks damages for records); see also Flowers v. the Exec. Office of the President, 142 F.Supp.2d 38, 44 (D.C. Cir. 2001) (explaining that a plaintiff does not have to seek agency action before a plaintiff files a damages suit against an agency for the unlawful maintenance and dissemination of records).

         Relatedly, Defendant contends that this Court cannot grant Plaintiff relief for the disclosure of “false” personnel information because Plaintiff cannot use the Privacy Act to challenge the substance of the Navy's decision revoking Plaintiff's dentistry credentials. Defs.' Reply, ECF No. 41, 2-3. But, Plaintiff's challenges under the Privacy Act do not necessarily require that the Court evaluate the substance of the Navy's decision on Plaintiff's credentialing. As Plaintiff explains, “[e]ven if Defendant's clinical privilege revocation is proper, it is still subject to special conditions in order to disseminate that internal information to external parties.” Pl.'s Opp'n, ECF No. 40, 9 (emphasis omitted). Accordingly, Plaintiff has properly alleged Privacy Act disclosure violations which did not require exhaustion.

         Even if Plaintiff was not required to exhaust Defendant's alleged disclosure violations under the Privacy Act, Defendant asks the Court to dismiss Plaintiff's Privacy Act claim on the grounds that Plaintiff failed to allege pecuniary damages. Specifically, Defendant argues that disclosing Plaintiff's personnel records did not result in an actionable adverse agency determination because Plaintiff was not denied a right, benefit, entitlement, or employment.

         But, at the motion-to-dismiss stage, the Court finds that Plaintiff has sufficiently plead damages. Plaintiff alleged that, due to Defendant's disclosures, she was denied educational benefits, her credit score decreased, and she could not continue her career as a dentist. Compl., ECF No. 1, ¶¶ 24-27. On the current record, it is unclear whether or not Plaintiff will be able to sufficiently connect her damages to Defendant's alleged ...