Saunders v. Davis

• Decision Date: 15 September 2016
• Docket Number: Civil Action No.: 15-cv-2026 (RC)
• Parties: NATHAN A. SAUNDERS, Plaintiff, v. ELIZABETH DAVIS, et al., Defendants.
• Court: U.S. District Court — District of Columbia

NATHAN A. SAUNDERS, Plaintiff,
v.
ELIZABETH DAVIS, et al., Defendants.

Civil Action No.: 15-cv-2026 (RC)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

September 15, 2016

Re Document Nos.: 15, 16, 19, 20

MEMORANDUM OPINION

GRANTING DEFENDANTS' MOTIONS TO DISMISS

I. INTRODUCTION

Plaintiff Nathan A. Saunders, proceeding pro se, brings this suit alleging that numerous Defendants engaged in misconduct in the management of the Washington Teachers' Union's ("WTU") Option 2 Voluntary Employee Beneficiary Association Trust (the "Trust").¹ The Trust was created to provide supplemental unemployment benefits to teachers in the District of Columbia Public Schools ("DCPS") who met certain conditions. Mr. Saunders, who seeks a wide range of remedies, names fourteen Defendants, all associated in different ways with the Trust. Specifically, Mr. Saunders brings suit against: Elizabeth Davis, Jackie Hines, Michael White, Pauline Baker, John Hammond, Ray Mobley, Dorothy Egbufor, and the Trust itself (collectively, "Board Affiliate Defendants");² Darryl Anderson, Peter Leff, Lee Jackson, and the

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law firm O'Donnell, Schwartz, & Anderson, P.C. (collectively, "Attorney Defendants"); Calibre CPA Group, PLLC ("Calibre"); and Secretary Thomas Perez of the United States Department of Labor. See Compl. at 1-2, ECF No. 1.

Four sets of Defendants separately move to dismiss the Complaint on a variety of grounds. The Court first considers whether it has jurisdiction. For the reasons explained below, the Court finds that sovereign immunity bars Mr. Saunders's claims against Secretary Perez. The Court will therefore dismiss those claims pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure for lack of subject matter jurisdiction. The Court also finds that Mr. Saunders fails to state a claim upon which relief can be granted under the Employee Retirement Income Security Act ("ERISA"), the Racketeer Influenced and Corrupt Organizations Act ("RICO"), and various federal criminal statutes. The Court will therefore dismiss those portions of the Complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. Because the Court dismisses all of Mr. Saunders's federal law claims, the Court declines to exercise supplemental jurisdiction over the remaining state law claims. Finally, the Court will deny Mr. Saunders's request that the Court appoint counsel to represent him in this case and his request for leave to amend his claims.

II. FACTUAL & PROCEDURAL BACKGROUND A. Factual Background³

This case arises from a dispute over the administration of the Trust, which was created

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for the benefit of certain teachers employed by DCPS. The allegations are rooted in the fallout from the WTU's disputed presidential election in 2013 and subsequent questions about the election's implications on the management of the Trust.

Mr. Saunders is a member of the WTU. See Compl. at 4; Compl. Attach. 17 at 124.⁴ Prior to the events giving rise to this case, Mr. Saunders was elected President of the WTU. See Compl. Attach. 2 at 75; Compl. Attach. 5 at 79-81. During Mr. Saunders's term in office and while acting on behalf of the WTU, he signed a document that created the Trust (the "Trust Agreement"). See Compl. Attach. 2 at 75; see also Compl. at 6 ("The WTU Option 2 VEBA creation was a multi-year project by Plaintiff."). Mr. Saunders was also a signatory to the Memorandum of Agreement between the WTU and the DCPS that provided for DCPS's financial contributions to the Trust, see Compl. Attach. 4 at 78, and to the Trust's "Plan Document," see Compl. Attach. 1 at 47.

The Trust was the result of collective bargaining between the WTU and DCPS. See Compl. Attach. 1 at 33; Compl. Attach. 2 at 48; Compl. Attach. 4 at 77; Compl. Attach. 8 at 86. The Trust was created to provide supplemental unemployment benefits for DCPS teachers who had been laid off—or "excessed" in the official terminology—if those teachers met certain criteria. See Compl. Attach. 1 at 34-35; Compl. Attach. 4 at 77; Compl. Attach. 8 at 89-90.

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Specifically, teachers were required to achieve a particular score on their most recent evaluation, attain permanent teacher status, and work in the DCPS system for a minimum number of years to be eligible for benefits. See Compl. Attach. 4 at 77; Compl. Attach. 8 at 89-90. The Trust, which makes payments to eligible teachers who apply for benefits, was intended to be funded by DCPS through annual payments of $1.7 million. See Compl. Attach. 4 at 77; see also Compl. at 6 ("The end result [of Plaintiff's efforts] was a Memorandum of Agreement funded by the employer."). DCPS and the WTU have subsequently disagreed over a number of issues related to the Trust, and the Trust was forced to suspend the payment of all benefits in 2015 because DCPS did not make its annual funding payments. See Compl. Attach. 10 at 119 ("Unfortunately, DCPS funded the [Trust] in the first year but has withheld funding for the last two years."); Compl. Attach. 11 at 122 ("DCPS has refused to make its last two contributions to [the Trust]."). Mr. Saunders asserts that "Defendants' transgressions are the sole reason for nonpayment . . . as opposed to employer recalcitrance as reported by Defendants." Compl. at 15.

The Trust Agreement established a process to select trustees. See Compl. Attach. 2 at 55. The relevant provision, Section 3.01, states in full:

Designation of Trustees. Persons holding the following positions with the Union shall serve as the Trustees and shall be considered the "named fiduciaries," "fiduciaries," and the "plan administrator" as those terms are defined in ERISA:

1. President of the Union who shall serve as the Chairman of the Board and have a two year term;

2. One Vice President of Education who is also a member of the Executive Board of the Union who shall have a two year term;

3. One other member of the Executive Board of the Union, as appointed by the Chairman, who shall have an initial one year term and then two year terms thereafter;

4. Treasurer of the Union who shall have a two year term;

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5. One Field Service Specialist of the Union, as appointed by the Chairman, who shall have an initial one year term and then two year terms thereafter.

Id.⁵

According to the Complaint, WTU officials, including Mr. Saunders, stood for election in May 2013. See Compl. at 11. Mr. Saunders faced Defendant Elizabeth Davis in his bid to be re-elected as WTU President. See id. After a close election and a subsequent, contested runoff, Mr. Saunders filed an "appeal to the 2013 WTU Runoff Election," however, on "July 31, 2013 Plaintiff Saunders withdrew his election challenge and vacated the WTU Presidency." See Compl. Attach. 5 at 80; see also Compl. at 11. Ms. Davis entered office as President of the WTU on August 1, 2013. See Compl. at 11. On April 27, 2015, Mr. Saunders sent a letter to Secretary Perez and the Chancellor of DCPS raising concerns with purported "financial and other improprieties" associated with the Trust. See Compl. Attach. 19 at 131; see also Compl. at 10 ("Plaintiff complained to the Department of Labor, and D.C. Public schools among others.").

B. Mr. Saunders's Allegations

The core of Mr. Saunders's Complaint is that his defeat as WTU President did not alter his role in managing the Trust. In support of that position, Mr. Saunders argues that the

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"Original and Proper" Board of Trustees must be made up of the members who were on the board prior to the 2013 election. See Compl. at 12-13. Mr. Saunders states that he is the rightful "fiduciary based trustee-Chairperson of the WTU Option 2 VEBA Board of Trustees," and that the current board is "not the properly constituted and seated WTU Option 2 VEBA Board of Trustees." Id. In other words, Mr. Saunders's position is that Ms. Davis may have won the WTU Presidency in the 2013 election, but the election did not permit her to take over Mr. Saunders's position as Chairman of the Board of Trustees. See Pl.'s Mem. Resp. Defs.' Mots. Dismiss ("Pl.'s Opp'n") at 11, ECF No. 23.

Specifically, Mr. Saunders argues that "[t]he loss of a political union election can not be used as a basis for removal from the VEBA Board" and that "WTU elections are not controlling" on the question of who should run the Trust. Id. at 11-12. Mr. Saunders notes that he "worked 2 hard years" to create the Trust under the assumption that his continued involvement would not be dependent upon the upcoming WTU election. See id. at 12 Mr. Saunders points to the Trust Agreement and argues that "[u]nion elected office is not a requirement for VEBA trusteeship participation, plan participation, or plan rights," see Compl. at 11, and therefore, that "Defendants Davis, Hammond, White, Hines . . . had no authority to act and are not the properly constituted and seated WTU Option 2 VEBA Board of Trustees," id. at 12.

Mr. Saunders ultimately alleges that because the post-2013 Board of Trustees is "not the properly constituted and seated WTU Option 2 VEBA Board of Trustees," each of the Defendants, "individually and collectively," violated a number of statutes and caused harm to Mr. Saunders and others. See id. at 12, 15. Because he asserts that the Board of Trustees took their positions illegally, he alleges that those individuals committed fraud when they took subsequent actions to manage the Trust, including relatively routine acts such as using the

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Trust's credit cards. Id. at 12-13. The legal foundations of Mr. Saunders's allegations include both civil and criminal violations of federal and state laws. See id. at 4-6.

Mr. Saunders asserts that the Defendants' alleged actions constitute a RICO violation. See id. at 5-6; see also 18 U.S.C. § 1961. The Complaint's RICO allegations are based on a range of purported predicate criminal acts, including mail fraud, wire fraud, bank fraud, credit card fraud, identification fraud, and computer fraud. See Compl. at 5-6 (citing 18 U.S.C. §§ 1028, 1029, 1030,⁶...