Aryai v. Forfeiture Support Assocs., LLC
| Decision Date | 27 August 2012 |
| Docket Number | No. 10 Civ. 8952LAP.,10 Civ. 8952LAP. |
| Parties | Brian ARYAI, Plaintiff, v. FORFEITURE SUPPORT ASSOCIATES, LLC, United States Marshals Service, and Eben Morales, in his individual and official capacities, Defendants. |
| Court | U.S. District Court — Southern District of New York |
Joshua Lawrence Weiner, Law Offices of Weiner & Weiner, LLC, Paul Ivan Weiner, Paul I. Weiner, LLC Morristown, NJ, for Plaintiff.
David Scott Warner, Christine Lee Hogan, Littler Mendelson, P.C., New York, NY, for Defendants.
This motion by Defendants United States Marshals Service (“USMS”) and Eben Morales (“Morales”) (collectively, the “Moving Defendants”) to dismiss the claims of Plaintiff Brian Aryai (“Plaintiff”) presents, inter alia, two questions of first impression in this district: (1) whether the amended whistleblower provision of the False Claims Act (“FCA”) provides a cause of action against individual defendants; and (2) whether to recognize an action pursuant to Bivens v. Six Unknown Federal Narcotics Agents, 403 U.S. 388, 91 S.Ct. 1999, 29 L.Ed.2d 619 (1971), on behalf of an employee of a government contractor who experiences retaliation for engaging in speech protected by the First Amendment. For the reasons set forth below, the Court answers both questions in the negative and grants the Moving Defendants' motion to dismiss [Dkt. No. 15].1
The Court takes as true the following factual allegations in the amended complaint and draws all reasonable inferences in favor of Plaintiff. See Goldstein v. Pataki, 516 F.3d 50, 56 (2d Cir.2008).
Plaintiff was employed as a Senior Forfeiture Financial Specialist by Forfeiture Support Associates, LLC (“FSA”), a company that “provides staffing and support solutions to government agencies.” (Am. Compl. ¶¶ 4–5.) One of those agencies is USMS, an agency responsible for, as relevant here, managing and disposing forfeited properties the Government has seized as proceeds of criminal activities. (Id. ¶ 6.) USMS performs that function pursuant to the Asset Forfeiture Program (“AFP”) of the Department of Justice. (Id. ) At all relevant times, Morales served as Acting Assistant Director of the AFP. (Id. ¶ 7.) One division within the AFP is the Complex Assets Group (“CAG”), “which is responsible for the disposition of seized and forfeited financial instruments, businesses, majority and minority business interests and substantial real estate.” (Id. ¶ 11.)
A core aspect of FSA's business is providing support services to the AFP pursuant to an Asset Forfeiture Support Contract (“AFSC”). (Id. ¶¶ 4–5.) “Pursuant to the [AFSC], the Government purportedly has the contractual right to require FSA to remove any of its employees from performance under the contract.” (Id. ¶ 56.) “However, in instances where the removal of an employee is for substandard performance or behavior negatively impacting delivery of services, the [AFSC] provides FSA an opportunity to resolve the situation so as to allow the employee to remain on the contract.” (Id. ¶ 57.)
Plaintiff began working with the AFP in New York City on October 13, 2009. (Id. ¶¶ 8–9.) Plaintiff claims that, in early 2010, he discovered that CAG Program Manager Len Briskman (“Briskman”) “would unilaterally place a substantially low monetary value on a particular complex asset and then proceed to negotiate with and select buyers for the asset without providing any public notice.” (Id. ¶¶ 12–14.) According to Plaintiff, Briskman told him that “he often found buyers through his ‘business contacts' ” and that “there was no public notice mechanism in place at the CAG for soliciting buyers for minority interests in privately held companies.” (Id. ¶¶ 15–16.) Believing this protocol “ran the significant risk of defrauding the United States government,” on February 19, 2010, Plaintiff met with Pam Bass (“Bass”), the program manager of Internal Controls at USMS, and Yolanda Lopez (“Lopez”), his supervisor at FSA, to discuss his concerns. (Id. ¶¶ 17–18.) Either at this meeting or sometime thereafter, Plaintiff suggested Morales should be informed about what he had discovered regarding Briskman. (Id. ¶ 21.)
In early March 2010, Plaintiff was working on the disposition of a “minority held interest in a private equity position known as the ‘Delta Fund.’ ” (Id. ¶ 22.) During the course of his work, Plaintiff discovered that Briskman had set a sale price for the asset well below fair market value and had not sought multiple buyers in the open market. (Id. ) Plaintiff contacted Lopez and Barbara Ward (“Ward”), an Assistant United States Attorney for the Southern District of New York, regarding his concerns about Briskman and the Delta Fund pricing. (Id. ¶¶ 23, 29.) On March 5, 2010, Lopez sent Plaintiff an e-mail with the following language: (Id. ¶ 24.) Subsequently, on March 24, 2010, Plaintiff was transferred to the CAG to work directly under Briskman. (Id. ¶ 25.) Plaintiff does not specify who was responsible for this transfer.
Shortly thereafter, Plaintiff attempted to connect with Briskman on the professional networking website, LinkedIn. (Id. ¶ 26.) Plaintiff claims Briskman listed himself on the website as CEO of Asset Valuation Advisors, LLC, which “held itself out as a business with experience in the disposition of distressed assets,” including assets related to forfeiture proceedings over which USMS presided. (Id. ¶¶ 26–27.) Plaintiff reported these findings to Ward, and “it was agreed that Plaintiff's findings would be confidentially referred to the Office of the Inspector General” (“OIG”). (Id. ¶¶ 29, 31.) Despite the purported agreement concerning confidentiality, Plaintiff claims that in response to Morales's contacting Ward regarding the OIG referral, Ward told Morales Plaintiff had brought the matter to light. (Id. ¶¶ 32–33.)
On April 8, 2010, Plaintiff received several e-mails from Bass via FSA Regional Director William Wolf (“Wolf”) demanding that he answer by the close of business several questions posed by Morales about Plaintiff's research into and subsequent reporting of Briskman's activities. (Id. ¶¶ 37–39.) Plaintiff did so and claims that his response was forwarded to Morales. (Id. ¶¶ 40–41.) Shortly thereafter, Plaintiff received a call from Wolf to the effect that Morales had canceled Plaintiff's scheduled trip to Miami and ordered Plaintiff and Wolf to appear at Morales's office in Washington, D.C., on April 12, 2010. (Id. ¶ 41.) When Plaintiff and Wolf met with Morales, “Morales expressed extreme anger and agitation with Plaintiff for having disclosed Briskman's conduct” and “angrily told Plaintiff that Briskman was part of the ‘family’ and that Plaintiff should have never looked into his activities.” (Id. ¶¶ 42–43.) Morales also purportedly told Plaintiff, “[I]nstead of letting the [United States Attorney's Office] find out about this, you should have come to me and I would have quietly forced [Briskman] into retirement....” (Id. ¶ 44.) Plaintiff claims Morales then threatened him with the following: “[Y]ou are talking yourself out of a job; I am not sure if there is a place for you here after this; I can get rid of you any time.” (Id. ¶ 45.)
Plaintiff alleges that, after this meeting, Morales “subjected [him] to micromanagement and a pattern of harassment and abuse.” (Id. ¶ 46.) For example, Plaintiff alleges “Morales initiated a sham investigation with the Contracting Officer to try and establish that Plaintiff was not in compliance with the [AFSC].” (Id. ¶ 47.) On May 22, 2010, Wolf instructed Plaintiff to begin reporting to USMS in Newark, New Jersey. (Id. ¶ 50.) “Wolf provided no explanation as to why Plaintiff was being transferred.” (Id. ) Plaintiff accepted the assignment “as a temporary measure[ ] and under protest,” but not before sending an e-mail to Wolf that he considered such actions “as retaliatory and punitive in nature in response to my actions in disclosing suspected fraud and criminal activities as well as for reporting suspected policy violations.” (Id. ¶ 51.) In May and June 2010, Plaintiff's counsel sent several letters to the same effect to the general counsel for USMS and Wolf. (Id. ¶ 52.)
On June 16, 2010, Wolf told Plaintiff that Morales had ordered him to “remove [Plaintiff] from performing under the [AFSC].” (Id. ¶ 53.) “When Plaintiff inquired as to why be was being removed, Wolf informed him that he was instructed by Morales to remove Plaintiff from the [AFSC] because, according to Wolf, ‘you know he has been after you ever since you reported [Briskman].’ ” (Id. ¶ 54.) Plaintiff claims he was never “informed by anyone at FSA or [USMS] that his job performance was either sub-par or not in compliance with the [AFSC].” (Id. ¶ 58.) “Despite Wolf's contention that it was Morales' decision to remove Plaintiff from the [AFSC],” Plaintiff claims “Defendants conspired together to remove Plaintiff from performing under the [AFSC].” (Id. ¶ 55.)
Plaintiff commenced this action on November 30, 2010, alleging the following claims: (1) a claim against FSA, USMS, and Morales for retaliating against him in violation of the FCA; (2) a common law claim against Morales in his individual capacity for tortious interference with a business advantage; (3) a common law claim against Morales in his individual capacity for wrongful termination; (4) a claim against USMS and Morales for retaliating against him in violation of the First Amendment; and (5) a claim against FSA under Virginia law for violating Virginia's public policy. On March 15, 2011, Plaintiff amended his complaint to add a sixth claim against FSA under the New Jersey Conscientious Employee Protection Act, N.J. Stat. Ann. § 34:19–1 et seq., and to assert his First Amendment retaliation claim against...
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