MEMORANDUM OPINION
COLLEN
KOLLAR-KOTELLY UNITED STATES DISTRICT JUDGE
Presently
before this Court is a [38] Motion to Dismiss filed by
Defendants The United States of America (the “United
States”) and the United States Securities and Exchange
Commission (the “SEC”).[1] Defendants move to dismiss
pro se Plaintiff’s [29] First Amended
Complaint, pursuant to Fed.R.Civ.P. 12(b)(1) and 12(b)(6), on
grounds that this Court does not have jurisdiction over the
causes of action alleged by Plaintiff Andrew Chien
(“Plaintiff” or “Mr. Chien”) and
further, that Plaintiff has failed to state a claim upon
which relief can be granted.
Also
pending before this Court are two motions filed by Plaintiff
subsequent to the filing of the Motion to Dismiss: (1)
Plaintiff’s [40] Motion which requests: (a) an
Injunction Order pursuant Rule 65(a); (b) an adjustment of
the time for Defendants to file a reply in support of their
Motion to Dismiss; and (c) the filing of an administrative
record, and (2) Plaintiff’s [42] Motion for Approv[al]
[of a ] Supplemental Pleading to Add Brant Morris as a
Defendant Based on Rule 15(d). Pursuant to a November 13,
2018 Minute Order, this Court DENIED Plaintiff’s
request for an adjustment of time for Defendants’ reply
and DEFERRED ruling on Plaintiff’s motion for an
injunction order and the filing of an administrative record
and his motion to add Brant Morris as a defendant.
In the
November 13, 2018 Minute Order, this Court noted that while
Defendants had replied to Plaintiff’s [40], [42]
motions, Plaintiff had not filed a reply in support of either
motion, and the time for doing so had passed. Approximately
two weeks later, Plaintiff filed a [47] Supplemental
Memorandum (reply) in response to his [40] Motion for
injunctive relief and filing of an administrative record and
a [48] Supplemental Memorandum (reply) in support of his [42]
Motion to add Brant Morris as a defendant. At the same time,
Plaintiff filed a [46] Supplemental Memorandum (surreply) in
support of his [41] Opposition to Defendants’ motion to
dismiss.
Notably,
Plaintiff did not seek approval from opposing counsel or
leave of court to late file any reply or to file a surreply,
and in the normal course, such documents filed by Defendant
would be stricken from the docket as untimely and/or
unapproved. In the interest of judicial efficiency, however,
since this Court is resolving all outstanding motions by
means of this Memorandum Opinion and the accompanying Order,
and because the Plaintiff in this case is pro se,
for purposes of this Memorandum Opinion only, the Court will
treat Plaintiff’s [47] Supplemental Memorandum as a
reply to his [40] Motion for injunctive relief and filing of
an administrative record and his [48] Supplemental Memorandum
as a reply to his [42] Motion to add Brant Morris as a
defendant. Plaintiff’s [46] Supplemental Memorandum
(surreply) in support of his Opposition to the
Defendants’ Motion to Dismiss will be considered by
this Court only to the extent that it is responsive to the
issues involved in this case and addressed in the
Defendants’ Motion and/or their Reply. See
Pl.’s Surreply, ECF No. 46, at 7-8. The remaining
portions of Plaintiff’s Surreply (pages 1-6) are not
responsive to the Defendants’ pleadings insofar as
Plaintiff attempts to allege claims pursuant to the Racketeer
Influenced and Corrupt Organizations Act, 18 U.S.C.
§§ 1961-1968, which have no bearing on the existing
claims against the Defendants in this case. Accordingly, all
three Motions are fully briefed and ready for
resolution.[2]
I.
Background
Plaintiff’s
[29] First Amended Complaint discusses in detail his business
conflicts with a third party, Richard Freer, which are also
the subject of a civil action pending before this Court,
captioned Chien v. Freer, 18-cv-2050. In that case,
pro se Plaintiff Andrew Chien alleges claims for
common law tort, securities law violations, RICO and fraud.
The Complaint in that case also makes references to certain
debt collections against Mr. Chien, which are not an issue in
the instant case before this Court. As a preliminary matter,
this Court notes that Mr. Chien filed in this case documents
entitled [49] “Supplement[ ] to Support Chien’s
Pleadings from Fair Debt Collection Practices Act” and
[50] “Supplement[ ] (2) to Support Chien’s
Pleadings from Fair Debt Collection Practices Act.”
Because these documents are unrelated to the claims pending
in this matter, the Court orders that these two Supplements,
ECF Nos. 49 and 50, shall be STRICKEN from the docket in this
case.
To put
in context the origins of Plaintiff’s dispute with the
SEC, the Court will briefly review the ongoing disputes
between Mr. Chien and Mr. Freer, although many of these
disputes pre-date Defendants’ involvement. Mr. Freer
was a former officer of Commonwealth Biotechnologies, Inc.
(“CBI”), which filed for bankruptcy in January
2011. First Am. Compl., ECF No. 29, ¶¶ 16, 17, 23,
28. Mr. Freer served as an operating director of CBI during
bankruptcy, while Mr. Chien was either a CBI shareholder or a
representative of Bill Guo, another shareholder and sometime
Chairman of CBI’s board. First Am. Compl., ECF No. 29,
¶¶ 15, 21. Mr. Freer made compensation claims from
CBI, while Mr. Chien claimed that Mr. Freer was trying to
embezzle money from CBI, and both parties sought control of
CBI. Id. at ¶¶ 17-18, 20-21.
Ultimately,
Mr. Freer sued Mr. Chien for defamation in a Virginia state
court in February 2012, and he obtained a default judgment in
the amount of $1, 600, 000.00, plus interest. Id. at
¶¶ 22, 26. Mr. Freer collected on the judgment by
initiating a debt collection action in Connecticut in
September 2012. Id. at ¶¶ 11-12. Mr. Chien
was incarcerated in Virginia twice for contempt of court in
relation to Mr. Freer’s defamation action. Id.
at ¶¶ 10, 31-32. In February 2014, presumably in
partial fulfillment of the default judgment, a Virginia state
court ordered delivery of China Bull Management, Inc.
(“CHBM”) stocks to Mr. Freer and in September
2014, Island Stock Transfer, Florida issued a stock
certificate for shares of CHBM for Mr. Freer. Id. at
¶37. Through voting these shares, Mr. Freer tried to
usurp Mr. Chien’s control of CHBM, which Mr. Chien
contested. Id. at ¶¶ 38-39. Mr. Freer
re-registered CHBM from Nevada to Virginia in December 2016,
and Mr. Chien re-registered CHBM from Nevada to Wyoming as of
January 2017. Id. at ¶¶ 46-47, 54.
A.
The SEC’s Role
On
December 9, 2016, Mr. Freer attempted to update the EDGAR
access codes for CHBM with the SEC, while Mr. Chien
apparently was permitted to use the EDGAR access codes to
make filings on behalf of CHBM as late as December
2016.[3] First Am. Compl., ECF No. 29, ¶ 45.
The SEC’s involvement with Plaintiff followed these
competing attempts to access the SEC’s EDGAR system. On
February 13, 2017, Mara Ransom (“Ms. Ransom”), an
SEC employee in the Division of Corporate Finance, which
administers EDGAR codes, sent Mr. Chien a letter from the SEC
indicating that “Richard J. Freer had[d] challenged
Chien’s representation of CHBM.” Id. at
¶ 3. In that letter, she noted that “[w]hile the
information [the SEC] ha[d] considered to date [was] not
dispositive, it [did] raise sufficient concerns to justify
suspending any company filings made on EDGAR that ha[d] not
yet been processed and disseminated, as well as deactivating
the company’s CIK number and EDGAR access codes until
the question is resolved.” App’x to the
Pl’s Compl., ECF 6, at 4 (A1).[4] The letter suggested that
Mr. Chien could provide one of two types of documentation to
establish who controlled CHBM to support reactivating the
company’s CIK number to allow future filings.
Id.
Mr.
Chien has acknowledged that Mr. Freer provided the SEC with
some forms to support his claim that he should receive EDGAR
access, but he alleges that those forms were false, and they
did not establish that Mr. Freer as a “control person
of CHBM.” First Am. Compl., ECF No. 29, ¶¶
3-4, 48-55. Mr. Chien does not indicate that he provided any
documentation to the SEC, as was requested in the February
13, 2017. On December 14, 2017, the SEC released the EDGAR
access codes for CHBM to Mr. Freer. Id. ¶ 4;
Pl.’s App’x II, ECF No. 22-2, at 3-4. Mr. Chien
contends further that the SEC did not provide him with
documentation regarding EDGAR access codes or communications
with Mr. Freer in a timely manner, although he did receive
this documentation on September 11, 2017, through a FOIA
request. Id. ¶ 47.
B.
Plaintiff’s Alleged Causes of Action
Mr.
Chien alleges that the SEC staff withheld from him and
eventually provided to Mr. Freer certain access codes that
CHBM requires in order to make its filings with the SEC. Mr.
Chien and Mr. Freer both claim to be the proper holder of
those codes. Count I of Plaintiff’s First Amended
Complaint alleges that Ms. Ransom and SEC Commissioner Kara
Stein (“Commissioner Stein”) violated 28 U.S.C.
§2680 by failing to exercise due care and making
misrepresentations in connection with accepting a company
registered in Virginia as the legitimate CHBM. First Am.
Compl., ECF No. 29, ¶ 63.
Count 2
alleges that Ms. Ransom and Commissioner Stein violated 28
U.S.C. §2680 by failing to exercise good care and by
abusing process because they acted to protect Mr.
Freer’s fraud. Id. ¶ 64. Count 3 alleges
that Ms. Ransom aided and abetted Mr. Freer in “making
false identi[t]y of CHBM.” Id. ¶ 65.
Count 4 alleges that Ms. Ransom, in violation of Mr.
Chien’s alleged constitutional right to operate a
business, damaged his employment and reputation and caused
him to suffer economic loss when he could not make filings on
behalf of CHBM. Id. ¶ 66. Furthermore,
Mr. Chien alleges that through her failure to “judge
the environment under which Freer obtained the Stock
Certificate, ” Ms. Ransom “supported” Mr.
Chien’s alleged false imprisonment. Id.
¶¶ 66-67. Count 5 alleges that Ms. Ransom engaged
in a conspiracy to conceal from Mr. Chien the documents
submitted by Mr. Freer. Id. ¶ 68. Count 6
alleges that Commissioner Stein was grossly negligent for her
failure to monitor or train Mr. Ransom. Id. ¶
69. In his First Amended Complaint, Mr. Chien seeks only
money damages, in the form of punitive damages, and
“legal or other” costs. Id. ¶¶
72-74.
II.
Legal Standard
A.
Subject Matter Jurisdiction under Rule 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.”
Coalition for Underground Expansion v. Mineta, 333
F.3d 193, 198 (D.C. Cir. 2003) (citations 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.”)
In
reviewing a motion to dismiss pursuant to Rule 12(b)(1),
courts must accept as true all factual allegations in the
complaint and construe the complaint liberally, granting
plaintiff the benefit of all inferences that can be drawn
from the facts alleged. See Leatherman v. Tarrant Cty.
Narcotics Intelligence & Coordination Unit, 507 U.S.
163, 164 (1993); Settles v. U.S. Parole
Comm’n, 429 F.3d 1098, 1106 (D.C. Cir. 2005)
(“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.”);
Koutny v. Martin, 530 F.Supp.2d 84, 87 (D.D.C. 2007)
(“[A] court accepts as true all of the factual
allegations contained in the complaint and may also consider
‘undisputed facts evidenced in the
record’”) (internal citations omitted). Despite
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. United States 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), aff’d., 2008 WL
4068606 (D.C. Cir. Mar. 17, 2008). A court need not accept as
true “a legal conclusion couched as a factual
allegation” or an inference “unsupported by the
facts set out in the complaint.” Trudeau v. Fed.
Trade Comm’n, 456 F.3d 178, 193 (D.C. Cir. 2006)
(quoting Papasam v. Allain, 478 U.S. 265, 286
(1986)).
B.
Failure to State a Claim under Rule 12(b)(6)
Pursuant
to Rule 12(b)(6), a party may move to dismiss a complaint on
grounds that it “fail[s] to state a claim upon which
relief can be granted.” Fed.R.Civ.P. 12(b)(6). A
complaint is not sufficient 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)). To survive a motion
to dismiss under Rule 12(b)(6), 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).
When
considering a Rule 12(b)(6) motion, courts may consider
“the facts alleged in the complaint, documents attached
as exhibits or incorporated by reference in the
complaint” or “documents upon which the
plaintiff’s complaint necessarily relies even if the
document is produced not by the plaintiff in the complaint
but by the defendant in a motion to dismiss.” Ward
v. District of Columbia Dep’t of Youth Rehab.
Servs., 768 F.Supp.2d 117, 119 (D.D.C. 2011) (internal
quotation marks and citations omitted). The
court may also consider documents in the public record of
which the court may take judicial notice. Abhe &
Svoboda, Inc. v. Chao, 508 F.3d 1052, 1059 (D.C. Cir.
2007).
III.
Legal Analysis of the Motion to Dismiss
A.
Individual Defendants
1.
Substitution of the United States
Pursuant
to The Federal Employees Liability Reform and Tort
Compensation Act of 1988, 28 U.S.C. § 2679 (the
“Westfall Act”), “federal employees [are
permitted] absolute immunity from common-law tort claims
arising out of acts they undertake in the course of their
official duties.” Osborn v. Haley, 549 U.S.
225, 229 (2007). This relieves such employees from “the
cost and effort of defending [a] lawsuit, and [ ] plac[es]
those burdens of the Government’s shoulders.”
Wuterich v. Murtha, 562 F.3d 375, 380 (D.C. Cir.
2009) (quotation omitted). In the event that a federal
employee is sued for wrongful or negligent conduct, the
Attorney General may certify that such employee “was
acting within the scope of his office or employment at the
time of the incident out of which the claim arose.”
Osborn, 549 U.S. at ...