Loumiet v. United States

• Decision Date: 12 July 2016
• Docket Number: No. 15-5208,15-5208
• Citation: 828 F.3d 935
• Parties: Carlos Loumiet, Esquire, Appellant v. United States of America, et al., Appellees
• Court: U.S. Court of Appeals — District of Columbia Circuit

828 F.3d 935

Carlos Loumiet, Esquire, Appellant

v.United States of America, et al., Appellees

No. 15-5208

United States Court of Appeals, District of Columbia Circuit.

Argued March 24, 2016

Decided July 12, 2016

Carlos Loumiet, pro se, argued the cause and filed the briefs for appellant.

Steve Frank, Attorney, U.S. Department of Justice, argued the cause for appellees. With him on the brief were Benjamin C. Mizer, Principal Deputy Assistant Attorney General, and Mark B. Stern, Attorney.

Before: Rogers and Pillard, Circuit Judges, and Sentell e, Senior Circuit Judge.

Pillard, Circuit Judge:

Appellant Carlos Loumiet's participation in a bank audit got him into trouble with the Office of the Comptroller of the Currency (OCC), a bureau within the Department of Treasury. Loumiet claims the OCC's enforcement action against him was trumped-up and retaliatory. On this appeal from the district court's dismissal of the case on the pleadings, we address only the timeliness of his claims, and whether the Constitution places any limit on the governmental policymaking discretion immunized by the discretionary-function exception to the Federal Tort Claims Act (FTCA or the Act).

After prosecuting Loumiet for nearly three years, culminating in a three-week trial, the OCC dismissed its enforcement action against him—an action which this court has since described as not “substantially justified.” Loumiet v. Office of Comptroller of Currency , 650 F.3d 796, 797–98 (D.C. Cir. 2011). Loumiet then brought suit against the United States and four OCC employees, claiming that their enforcement action and related conduct were both tortious and unconstitutional. The district court dismissed Loumiet's tort claims against the United States under the FTCA's discretionary-function exception and dismissed his constitutional Bivens claims against the individual defendants as time-barred.

We conclude, in line with the majority of our sister circuits to have considered the question, that the discretionary-function exception does not categorically bar FTCA tort claims where the challenged exercise of discretion allegedly exceeded the government's constitutional authority to act. Nor are Loumiet's Bivens claims time-barred, because the continuing-violations doctrine applies to extend the applicable statute of limitations where, as here, a plaintiff alleges continuing conduct causing cumulative harm. Accordingly, we reverse the district court's dismissal order and remand for further proceedings.

I

We review the district court's dismissal of Loumiet's claims de novo , accepting as true the factual allegations in the complaint. See Jerome Stevens Pharm., Inc. v. FDA , 402 F.3d 1249, 1250 (D.C. Cir. 2005).

In the early 2000s, Loumiet was on a team of attorneys Hamilton Bank hired to prepare an audit report during a securities-fraud investigation of the bank by the OCC. The final audit report was unable to reach a conclusion as to whether the bank's executives had engaged in intentional wrongdoing. The OCC contested certain of the report's findings, but, after further investigation, Loumiet and his team declined to change their conclusions.

Around that time, Loumiet sent the Treasury Inspector General a series of letters in which he expressed concern that, while on site at Hamilton Bank during the OCC's investigation, OCC employees had made racist remarks regarding the bank's Hispanic employees. The bank filed suit against the OCC in 2002, alleging civil rights violations arising out of the investigation. Shortly thereafter, the OCC closed Hamilton Bank for operating in an unsafe manner—a closure Loumiet alleges was unjustified and incurred considerable unnecessary cost for the bank's receiver, the Federal Deposit Insurance Corporation.

On November 6, 2006, the Comptroller initiated an administrative enforcement proceeding against Loumiet under the Financial Institutions Reform, Recovery, and Enforcement Act, alleging that he was an “institution-affiliated party” who knowingly or recklessly breached his fiduciary duty to Hamilton Bank when preparing the audit and caused a “significant adverse effect” on the bank. 12 U.S.C. § 1813(u)(4). During the course of the enforcement action against him, Loumiet alleges, OCC personnel made unsubstantiated charges and false statements to the press. On June 18, 2008, after a three-week administrative trial, the presiding Administrative Law Judge recommended dismissal of the OCC's claims in their entirety, and on July 27, 2009, the Comptroller dismissed the action. Later, this court concluded the OCC's enforcement action was not “substantially justified” and awarded Loumiet attorney's fees. Loumiet , 650 F.3d at 797.

According to Loumiet's complaint in the action now before us, the OCC's frivolous enforcement proceeding caused significant damage: his banking-law practice evaporated, his income fell significantly, he dropped several partnership levels at his firm, and he suffered severe emotional distress. Seeking compensation for those harms, in 2011 Loumiet filed an administrative unlawful-retaliation claim, which the OCC denied in January 2012. Loumiet filed this suit in federal district court on July 9, 2012. He brought common-law tort claims under the FTCA against the government for intentional infliction of emotional distress, invasion of privacy, abuse of process, malicious prosecution, negligent supervision, and civil conspiracy.¹ He sued the individual government officials under Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics , 403 U.S. 388, 91 S.Ct. 1999, 29 L.Ed.2d 619 (1971), claiming retaliatory prosecution in violation of the First and Fifth Amendments. Loumiet alleged that the officials were “driven by a desire to retaliate” against him in bringing a baseless prosecution that interfered with his “right to communicate with his client free of Government intimidation and punishment.” Compl. ¶¶ 138, 141.

The district court granted the defendants' motion to dismiss as to most of Loumiet's claims. See Loumiet v. United States (Loumiet I ), 968 F.Supp.2d 142, 144–45 (D.D.C. 2013). First, the court concluded that many of Loumiet's FTCA claims were “inextricably tied” to the OCC's decision to prosecute, so must be dismissed pursuant to the FTCA's discretionary-function exception, 28 U.S.C. § 2680(a). See Loumiet I , 968 F.Supp.2d at 156–58. A prosecutorial decision is a quintessential discretionary function even if, in the circumstances of a particular case, the prosecution proceeded unreasonably in light of the paucity of its evidence. Id. at 156–57. In the court's view, none of the authorities Loumiet cited “specifically prescribe[d] a course of action for an employee to follow” so as to bar application of the discretionary-function exception here. Id. at 157 (quoting Berkovitz v. United States , 486 U.S. 531, 536, 108 S.Ct. 1954, 100 L.Ed.2d 531 (1988) ).

Before dismissing Loumiet's FTCA claims on that ground, however, the court explained that those claims, which he filed with the agency on July 20, 2011, were not barred by the FTCA's two-year statute of limitations. Id. at 153–55. The malicious-prosecution claim did not accrue until July 27, 2009, when the OCC dismissed the enforcement action, id. at 153, and the continuing-violations doctrine delayed accrual of his other FTCA claims until the same date because the enforcement action constituted a continuing harm until its final disposition, id. at 154–55 (citing Whelan v. Abell , 953 F.2d 663, 674 (D.C. Cir. 1992) ).

Notwithstanding its application of the continuing-violations doctrine to Loumiet's FTCA claims and its characterization of the Bivens and FTCA claims as intertwined, the court held that Loumiet had forfeited that doctrine's applicability to his Bivens claims. Id. at 152 n. 3. The claims were barred by the applicable three-year statute of limitations, the court concluded, because the claims accrued when Loumiet knew or had reason to know that the enforcement action was retaliatory and was unsupported by probable cause, which was either when the OCC first filed the action or, at the latest, when the ALJ ruled in his favor four years before Loumiet filed his complaint. Id. at 150–51.

On Loumiet's motion for reconsideration, the district court addressed for the first time his allegations that the OCC's decision to prosecute him was unconstitutionally retaliatory and so beyond the governmental policymaking authority protected by the FTCA's discretionary-function exception. Loumiet v. United States (Loumiet II ), 65 F.Supp.3d 19, 25–26 (D.D.C. 2014). “[E]ven ‘constitutionally defective’ actions,” the court held, “are in fact protected by the discretionary function exception.” Id. at 25. The court eventually dismissed Loumiet's remaining claims on grounds not pressed before this court. Loumiet timely appealed.

II

We begin with the government's contention that the conduct Loumiet alleges to be tortious under the FTCA involved performance of a “discretionary function” and is therefore immune from liability under the Act. The FTCA provides a limited waiver of the federal government's sovereign immunity from damages liability for torts committed by federal employees acting within the scope of their employment. See 28 U.S.C. §§ 1346(b), 2674. The Act expressly retains immunity from some tort liability through a number of statutory exceptions. See id. § 2680. If one of those exceptions applies, the court lacks subject-matter jurisdiction to hear the plaintiff's claims. See Simmons v. Himmelreich , ––– U.S. ––––, 136 S.Ct. 1843, 1846, 195 L.Ed.2d 106 (2016).

At issue here is the discretionary-function exception, which provides that the Act's waiver of sovereign immunity “shall not apply to”:

Any claim ... based upon the exercise or performance or the failure to exercise or perform a discretionary function or duty on the part of a federal agency or an employee of the Government, whether or not the discretion involved be abused.

28 U.S.C. § 2680(a). “[T]...