KATHERINE POLK FAILLA, District Judge:
The parties to this litigation agree on certain underlying facts: The case stems from an accounting scandal involving AgFeed Industries, Inc. ("AgFeed"), and, more specifically, AgFeed's agricultural operations in China. Investigation into these accounting irregularities culminated in a March 2014 enforcement action brought against AgFeed by the Securities and Exchange Commission (the "SEC" or "Commission"), which, in turn, yielded an $18 million disgorgement penalty (the "AgFeed Sanction"). After AgFeed sought protection in the Bankruptcy Court, the AgFeed Sanction was disbursed through the company's court-approved reorganization plan.
It is here that the parties diverge. Plaintiff James Regnante claims that pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank" or "Act"), Pub.L. No. 111-203, Title IX, § 922(a), 124 Stat. 1376, 1841 (2010)
In June 2014, Regnante filed the instant action against various "Securities and Exchange Commission Officials ... to be later named." He subsequently amended the complaint to name Mary Jo White, Andrew Calamari, Patricia Schrage, and Neal Jacobson (collectively, "Defendants"), who are, respectively, the Chairman of the SEC, the Director of the SEC's New York Regional Office, and two senior attorneys at that office.
AgFeed was a publically traded agricultural company that maintained operations in both the United States and China. (Am. Compl. ¶ 7). Plaintiff alleges that he notified the SEC, as far back as January 2013, that AgFeed "was a fraud." (Id. at ¶ 8). He further claims that, at his instigation, the SEC launched an investigation into AgFeed, and that from January through March 2013, he provided the Commission with "original information" that enhanced its inquiry. (Id. at ¶¶ 8, 10).
On March 11, 2014, the SEC filed an enforcement action (the "Enforcement Action") against AgFeed and six of its officers, alleging that the defendants had reported fictitious revenues from the company's China operations. (Am. Compl. ¶ 9). Ultimately, the Enforcement Action was resolved when the SEC and AgFeed entered into a settlement in September 2014, pursuant to which the company agreed to pay the $18 million AgFeed Sanction in disgorgement. (See id. at ¶ 11; Tinio Decl., Ex. B). See generally SEC v. AgFeed Indus., Inc., No. 14 Civ. 663 (M.D.Tenn.). Plaintiff claims that without his information, the SEC would not have obtained the AgFeed Sanction in the Enforcement Action. (Am. Compl. ¶ 16).
Prior to the Enforcement Action, but after Plaintiff is alleged to have alerted the SEC to AgFeed's fraud, AgFeed and a related entity filed for Chapter 11 protection in the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Case"). (See Am. Compl. ¶ 10). See generally In re AgFeed USA LLC, No. 13-bk-11761 (BLS) (Bankr. D.Del.). On November 4, 2014, the bankruptcy court confirmed the Revised Second Amended Chapter 11 Plan (the "Plan"), one provision of which permitted a claim by the SEC against AgFeed in the $18 million amount of the AgFeed Sanction. (See Tinio Decl., ¶ 3 and Ex. A). The Plan also provided a mechanism for distributing the AgFeed Sanction to various parties and to an SEC Fairness Fund. (Tinio Decl., Ex. A at 1-2).
Among other things, Dodd-Frank established the Fund to compensate participants in the Act's newly formed whistleblower
Plaintiff also alleges that as a consequence of a number of public statements from the SEC, which he attributes to Defendants in this litigation, Plaintiff believed that he was entitled to a monetary award under the Dodd-Frank whistleblower program. (Am. Compl. ¶ 28). According to Plaintiff, notwithstanding the SEC's public statements, Defendants "had no intentions of paying Plaintiff any award." (Id.). Significantly, however, Plaintiff does not allege that he has filed a claim for a whistleblower award pursuant to the procedures set forth in Dodd-Frank and its implementing regulations, nor does he allege that any claim for an award has been rejected by the SEC. Instead, Plaintiff hopes through this litigation to effect the transfer of the AgFeed Sanction to the Fund, after which Plaintiff intends to "file[] a claim against the Fund and collect 30% of the $18 million dollars, which will amount of $5,460,000, if eligible." (Id. at ¶ 23).
Plaintiff commenced this action on June 30, 2014. (Dkt. # 1). He filed the Amended Complaint, the operative pleading, on November 14, 2014. (Dkt. # 17). The gravamen of the Amended Complaint concerns the application of Dodd-Frank's whistleblower program to the AgFeed Sanction, from which Plaintiff discerns four separate causes of action. Count One alleges violations of the Fifth Amendment as well as Dodd-Frank and its associated regulations. These violations are premised on Defendants' failure to transfer the AgFeed Sanction to the Fund and Plaintiff's contention that he is entitled to a whistleblower award. (Am. Compl. ¶ 25). Count Two asserts that Defendants misrepresented material facts, concealed material facts, and engaged in deceit. Specifically, Plaintiff alleges that Defendants "[through] public advertisements falsely and deliberately misrepresented and deceived the Plaintiff into believing that an award awaits him if he complie[d] with the Whistleblower laws[.]" (Id. at ¶¶ 27-28). Count Three is styled as a claim for unjust enrichment, by which Plaintiff claims that Defendants "unjustly enrich[ed] the lawyers involved in the Agfeed case at the expense of Plaintiff." (Id. at ¶ 30). Finally, Count Four seeks attorney's fees pursuant to 42 U.S.C. § 1988. (Id. at ¶ 32).
On February 18, 2015, Defendants filed the instant motion to dismiss. (Dkt. # 27-30). Plaintiff filed his opposition on April 28, 2015. (Dkt. # 36). The motion was fully submitted on May 20, 2015, when Defendants filed their reply. (Dkt. # 37).
"It is a fundamental precept that federal courts are courts of limited jurisdiction and lack the power to disregard such limits as have been imposed by the Constitution or Congress." Durant, Nichols, Houston, Hodgson & Cortese-Costa, P.C. v. Dupont, 565 F.3d 56, 62 (2d Cir.2009) (internal quotation marks omitted). In that regard, "a district court may properly dismiss a case for lack of subject matter jurisdiction under Rule 12(b)(1) if it lacks the statutory or constitutional power to adjudicate it." Aurecchione v. Schoolman Transp. Sys., Inc., 426 F.3d 635, 638 (2d Cir.2005) (internal quotation marks omitted); accord Sokolowski v. Metro. Transp. Auth., 723 F.3d 187, 190 (2d Cir.2013). A "plaintiff asserting subject matter jurisdiction has the burden of proving by a preponderance of the evidence that it exists." Makarova v. United States, 201 F.3d 110, 113 (2d Cir.2000).
In resolving a Rule 12(b)(1) motion to dismiss, "[t]he court must take all facts alleged in the complaint as true and draw all reasonable inferences in favor of [the] plaintiff, but jurisdiction must be shown affirmatively, and that showing [may] not [be] made by drawing from the pleadings inferences favorable to the party asserting it." Morrison v. Nat'l Bank Ltd., 547 F.3d 167, 170 (2d Cir.2008) (internal citation and quotation marks omitted). Moreover, where subject matter jurisdiction is contested, a district court is permitted to consider evidence outside the pleadings, such as affidavits and exhibits. See Zappia Middle East Constr. Co. v. Emirate of Abu Dhabi, 215 F.3d 247, 253 (2d Cir.2000) ("On a Rule 12(b)(1) motion challenging the district court's subject matter jurisdiction, the court may resolve the disputed jurisdictional fact issues by referring to evidence outside of the pleadings, such as affidavits, and if necessary, hold an evidentiary hearing."); accord Tandon v. Captain's Cove Marina of Bridgeport, Inc., 752 F.3d 239, 243 (2d Cir.2014) ("[W]here
When considering a motion to dismiss for failure to state a claim under Rule 12(b)(6), a court should "draw all reasonable inferences in Plaintiff['s] favor, assume all well-pleaded factual allegations to be true, and determine whether they plausibly give rise to an entitlement to relief." Faber v. Metro. Life Ins. Co., 648 F.3d 98, 104 (2d Cir.2011) (internal quotation marks omitted). Thus, "[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to `state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)).
"While Twombly does not require heightened fact pleading of specifics, it does require enough facts to `nudge [a plaintiff's] claims across the line from conceivable to plausible.'" In re Elevator Antitrust Litig., 502 F.3d 47, 50 (2d Cir. 2007) (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955). "Where a complaint pleads facts that are `merely consistent with' a defendant's liability, it `stops short of the line between possibility and plausibility of entitlement to relief.'" Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (quoting Twombly, 550 U.S. at 557, 127 S.Ct. 1955). Moreover, "the tenet that a court must accept a complaint's allegations as true is inapplicable to threadbare recitals of a cause of action's elements, supported by mere conclusory statements." Iqbal, 556 U.S. at 663, 129 S.Ct. 1937.
Nevertheless, "[c]ourts must construe pro se pleadings broadly, and interpret them to raise the strongest arguments that they suggest." Cruz v. Gomez, 202 F.3d 593, 597 (2d Cir.2000) (internal quotation marks omitted) (citing Graham v. Henderson, 89 F.3d 75, 79 (2d Cir.1996)); accord McPherson v. Coombe, 174 F.3d 276, 280 (2d Cir.1999). "That said, the liberal pleading standard accorded to pro se litigants is not without limits, and all normal rules of pleading are not absolutely suspended." Hill v. City of New York, No. 13 Civ. 8901(KPF), 2015 WL 246359, at *2 (S.D.N.Y. Jan. 20, 2015) (internal quotation marks omitted).
Not every federal statute creates a private cause of action. See Gonzaga Univ. v. Doe, 536 U.S. 273, 285-86, 122 S.Ct. 2268, 153 L.Ed.2d 309 (2002); see generally Jordan v. Chase Manhattan Bank, 91 F.Supp.3d 491, 501-02 (S.D.N.Y. 2015) (collecting cases). Accordingly, "[t]he fact that a federal statute has been violated and some person harmed does not automatically give rise to a private cause of action in favor of that person." Cannon v. Univ. of Chicago, 441 U.S. 677, 688, 99 S.Ct. 1946, 60 L.Ed.2d 560 (1979). Instead, Congress must establish a private cause of action that allows a party to enforce the rights and obligations embodied in a federal law. Alexander v. Sandoval, 532 U.S. 275, 286, 121 S.Ct. 1511, 149 L.Ed.2d 517 (2001) ("[P]rivate rights of action to enforce federal law must be created by Congress.").
A federal statute can create a private cause of action expressly or by implication. Republic of Iraq v. ABB AG, 768 F.3d 145, 170 (2d Cir.2014), cert. denied, ___ U.S. ___, 135 S.Ct. 2836, 192
The linchpin of an implied private cause of action is Congressional intent. See Sandoval, 532 U.S. at 286-87, 121 S.Ct. 1511; Lindsay v. Ass'n of Prof'l Flight Attendants, 581 F.3d 47, 52 (2d Cir.2009). To this end, a court can only find an implied cause of action where "the underlying statute can be interpreted to disclose the intent to create one." Stoneridge Inv. Partners, LLC v. Scientific-Atlanta, 552 U.S. 148, 164, 128 S.Ct. 761, 169 L.Ed.2d 627 (2008). The key is ascertaining whether the statute "`displays an intent to create not just a private right but also a private remedy.'" Republic of Iraq, 768 F.3d at 170 (quoting Sandoval, 532 U.S. at 286, 121 S.Ct. 1511). Congressional intent is gleaned by "`look[ing] first to the text and structure of the statute.'" Republic of Iraq, 768 F.3d at 170 (quoting Lindsay, 581 F.3d at 52). Ultimately, the statute's text and structure must "yield a clear manifestation of congressional intent to create a private cause of action before a court can find such a right to be implied." Lopez v. Jet Blue Airways, 662 F.3d 593, 596 (2d Cir.2011).
A court's analysis of Congressional intent is guided by the four-factor test outlined by the Supreme Court in Cort v. Ash, 422 U.S. 66, 95 S.Ct. 2080, 45 L.Ed.2d 26 (1975). See Lindsay, 581 F.3d at 53 n. 3 ("[W]e apply the[] [Cort] factors to illuminate our analysis of congressional intent."); Hallwood Realty Partners, L.P., 286 F.3d at 619 n. 7 ("As this circuit has explained, the remaining Cort factors (other than congressional intent) now enter into the analysis only as possible indicia for legislative intent."). These factors pose the following questions:
Lindsay, 581 F.3d at 52 (quoting Cort, 422 U.S. at 78, 95 S.Ct. 2080) (internal citations and quotation marks omitted in Lindsay).
Liberally construing the Amended Complaint, the Court identifies two putative violations of Dodd-Frank. First, Plaintiff claims that disbursing the AgFeed Sanction through the Bankruptcy Case violated 15 U.S.C. § 78u-6(g)(3), which requires the SEC to deposit enforcement penalties into the Fund. (Am. Compl. ¶ 25). Second, albeit less precisely, Plaintiff asserts that he was improperly denied a whistleblower
Among other things, Dodd-Frank: (i) created the Fund, 15 U.S.C. § 78u-6(g)(1); (ii) mandates that the sanctions collected by the SEC "be deposited into or credited to the Fund" when certain conditions are satisfied, id. § 78u-6(g)(3); and (iii) directs the SEC to use the Fund to pay whistleblower awards and fund the activities of the Commission's Inspector General, id. § 78u-6(g)(2).
To overcome this presumption, Plaintiff must demonstrate that Congress intended to create an implied private cause of action. See Cohen, 622 F.3d at 193. The specific provision of Dodd-Frank under which Plaintiff seeks redress directs that, subject to certain limitations, "there shall be deposited into or credited to the Fund an amount equal to" any "monetary sanction" the SEC recovers. 15 U.S.C. § 78u-6(g)(3)(A)-(B). On its face, this section does not contain "rights-creating language." Hallwood Realty Partners, L.P., 286 F.3d at 619; see also Olmsted, 283 F.3d at 432 (observing that statutes did not contain rights-creating language). Rather, this provision of Dodd-Frank is properly understood as providing a directive to a federal agency. Where a statute is phrased as a prohibition or command to a federal agency, courts have been skeptical of claims that Congress intended to create an implied private cause of action. See Univs. Research Ass'n, Inc. v. Coutu, 450 U.S. 754, 772, 101 S.Ct. 1451, 67 L.Ed.2d 662 (1981) (noting "that there `would be far less reason to infer a private remedy in favor of individual persons' where Congress, rather than drafting the legislation `with an unmistakable focus on the benefited class,' instead has framed the statute simply as a general prohibition or a command to a federal agency" (quoting Cannon, 441 U.S. at 690-92, 99 S.Ct. 1946)); Shah v. New York State Office of Mental Health, 523 Fed.Appx. 828, 831 (2d Cir.2013) (summary order) ("`Statutory provisions that are phrased as general prohibitions or commands to federal agencies are unlikely to give rise to private rights of action[.]'" (quoting Thye v. United States, 109 F.3d 127, 129 (2d Cir.1997))).
Still more support for the Court's conclusion can be found in 15 U.S.C. § 78u-6(h)(1)(B)(i). This provision explicitly creates a private cause of action protecting employees from discharge or retaliation for engaging in protected whistleblowing activities. See Egan v. TradingScreen, Inc., No. 10 Civ. 8202(LBS), 2011 WL 1672066, at *3 (S.D.N.Y. May 4, 2011) ("[T]he statute also contains a private cause of action for whistleblowers alleging retaliatory discharge or other discrimination."). Given the existence of an explicit private cause of action to enforce certain portions of Dodd-Frank, there is no basis to infer a private cause of action for those portions of the Act that are not covered, including § 78u-6(g). That is, the "`explicit provision of a private right of action to enforce one section of a statute suggests that omission of any explicit private right to enforce other sections was intentional.'" Bellikoff, 481 F.3d at 116 (quoting Olmsted, 283 F.3d at 433); see also Cohen, 622 F.3d at 194 ("The inclusion of a specific provision [creating a private cause of action] elsewhere in the statute suggests that omission of any explicit private right to enforce other sections was intentional." (internal citations and quotation marks omitted)).
Finally, Plaintiff has not identified, and the Court has not found, any authority supporting the existence of a private cause of action to enforce § 78u-6(g). See Jordan, 91 F.Supp.3d at 502-03 (noting that the plaintiff failed to cite, and the court similarly could not locate, any authority that the statutes at issue created a private cause of action). To the contrary, Defendants have cited several cases in which courts have refused to read private causes of action into provisions of Dodd-Frank.
Liberally construing the Amended Complaint, the Court discerns a second claim under Dodd-Frank, namely, that Defendants failed to grant Plaintiff a whistleblower award in violation of the Act, thereby entitling him to damages in an amount equivalent to the contemplated award. (Am. Compl. ¶¶ 1, 25).
As previously noted, Dodd-Frank provides that any determination concerning "whether, to whom, or in what amount to make awards, shall be in the discretion of the Commission." 15 U.S.C. § 78u-6(f). The Commission's determinations, with an exception that is not applicable here, are reviewable by the "appropriate court of appeals of the United States[.]" Id. Thus, Dodd-Frank vests the relevant United States Courts of Appeals with the exclusive jurisdiction to review any claim relating to a whistleblower award. See Hudes v. Aetna Life Ins. Co., 806 F.Supp.2d 180, 191 (D.D.C.2011) ("Any appeals of such determinations are to be made not to this Court, but rather directly to the appropriate U.S. Court of Appeals."), aff'd, 493 Fed.Appx. 107 (D.C.Cir.2012) (per curiam). In consequence, this Court lacks subject matter jurisdiction to determine any claim that is contingent on the conclusion that Plaintiff was in fact a whistleblower under Dodd-Frank. Cf. In re F.C.C., 217 F.3d 125, 131 (2d Cir.2000) ("We recognized that pursuant to 28 U.S.C. § 2342 and 47 U.S.C. § 402, review of the FCC's regulatory decisions and orders is entrusted solely to the federal courts of appeals and is therefore outside the jurisdiction of the bankruptcy and district courts."). For this reason as well, Plaintiff's Dodd-Frank claims must be dismissed.
In addition to his Dodd-Frank claims, Plaintiff advances several claims for violations of his rights under the Due Process Clause of the Fifth Amendment. In 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), the Supreme Court recognized a private cause of action to sue federal officials, in their individual capacities, for violations of certain constitutionally protected rights. See M.E.S., Inc. v. Snell, 712 F.3d 666, 671 (2d Cir.2013) (stating that in Bivens, the "Supreme Court recognized as implicit in certain constitutionally protected rights a federal claim for money damages against federal officials, sued in their individual capacities, for violations of those rights"); accord Arar v. Ashcroft, 585 F.3d 559, 571 (2d Cir.2009) (en banc). In essence, a Bivens claim provides "a judicially-created remedy stemming directly from the Constitution itself." Id. (citing Bivens, 403 U.S. at 397, 91 S.Ct. 1999).
The Second Circuit has described a Bivens claim as an extraordinary remedy, and has cautioned against applying it in "new contexts," a term discussed further in this section. See Arar, 585 F.3d at 571 ("[T]he Supreme Court has warned that the Bivens remedy is an extraordinary thing that should rarely if ever be applied in `new contexts.'" (quoting Corr. Servs. Corp. v. Malesko, 534 U.S. 61, 69, 122 S.Ct. 515, 151 L.Ed.2d 456 (2001))); see also Snell, 712 F.3d at 671 ("Precisely because Bivens is a judicially created remedy, however, federal courts have been reluctant to recognize such implied relief."); Dotson v. Griesa, 398 F.3d 156, 166 (2d Cir.2005) ("Because a Bivens action is a judicially created remedy, however, courts proceed cautiously in extending such implied relief[.]"). In fact, "since Bivens, the Supreme Court has extended it twice only: in the context of an employment discrimination claim in violation of the Due Process Clause ...; and in the context of an Eighth Amendment violation by prison officials[.]" Arar, 585 F.3d at 571; see also Wilkie v. Robbins, 551 U.S. 537, 550, 127 S.Ct. 2588, 168 L.Ed.2d 389 (2007) (collecting cases where the Court has refused to extend Bivens).
In determining whether to extend Bivens to a new context, courts employ a two-step methodology. See Turkmen v. Hasty, 789 F.3d 218, 234 (2d Cir.2015) ("In Arar, we outlined a two-step process for determining whether a Bivens remedy is available."). First, the court must analyze whether the claim at issue "extend[s] Bivens into a new context." Id. Only after answering this question in the affirmative does the court proceed to step two. Id.
In the Bivens setting, the Second Circuit has construed the word "context" as "reflect[ing] a potentially recurring scenario that has similar legal and factual components." Arar, 585 F.3d at 572. Despite this guidance, determining the context of a cause of action "can be tricky." Turkmen, 789 F.3d at 234. The Second Circuit recently sought to elucidate the issue by distilling the context analysis into two discrete components: the "rights injured" and the "mechanism of the injury." Id.
After determining that a claim arises in a new context, the second step in the Bivens methodology applies a different two-pronged test to assess whether Bivens should be extended to a new situation. See Arar, 585 F.3d at 572 (recognition of a new Bivens claim involves "two-part inquiry"); Snell, 712 F.3d at 671 ("As the Supreme Court recently explained, `consideration of a Bivens request follows a familiar sequence' that involves two inquiries[.]" (quoting Wilkie, 551 U.S. at 550, 127 S.Ct. 2588)). In the first prong, the court inquires "whether there is any alternative, existing process for protecting the affected interest that amounts to a convincing reason for the Judicial Branch to refrain from providing a new damages remedy." Snell, 712 F.3d at 671 (internal quotation marks, citations, and alterations omitted). The second prong requires the court to analyze "whether, even in the absence of such an alternative, any special factors counsel hesitation before authorizing a new kind of federal litigation." Id. (internal quotation marks, citations, and alterations omitted).
With respect to the first prong of the extension-of-Bivens inquiry, where Congress has established a substantial, comprehensive, and intricate remedial scheme governing the conduct at issue, courts may not create a new remedy using the procedural vehicle of a Bivens action. See Snell, 712 F.3d at 671-72 ("With respect to the first of these inquiries, the Supreme Court has stated that if the conduct at issue already is `governed by comprehensive procedural and substantive provisions [of law] giving meaningful remedies against the United States,' then it is `inappropriate' for courts `to supplement that regulatory scheme with a new judicial remedy.'" (quoting Bush v. Lucas, 462 U.S. 367, 368, 103 S.Ct. 2404, 76 L.Ed.2d 648 (1983) (alterations in Snell))); Arar, 585 F.3d at 573 ("In light of the complexity of the remedial scheme Congress has created (and frequently amended), we would ordinarily draw a strong inference that Congress intended the judiciary to stay its hand and refrain from creating a Bivens action in this context."). Even where a comprehensive statutory regime does not provide complete relief, courts have been hesitant to craft a judicial remedy via a Bivens action. Snell, 712 F.3d at 672 ("The fact that such a remedial scheme does `not provide complete relief for the plaintiff' warrants no different conclusion." (quoting Lucas, 462 U.S. at 388, 103 S.Ct. 2404)). Ultimately, when faced with "a comprehensive scheme, federal courts will decline to infer `new substantive legal liability without legislative aid,' mindful `that Congress is in a better position to decide whether or not the public interest would be served by creating it.'" Snell, 712 F.3d at 672 (quoting Lucas, 462 U.S. at 390, 103 S.Ct. 2404).
The Amended Complaint alleges that "Defendants violated Plaintiff['s] Fifth Amendment rights by depriving Plaintiff of property, privileges and due process of law." (Am. Compl. ¶ 25). Construing the Amended Complaint liberally, Plaintiff alleges two distinct Fifth Amendment claims. (Id. at ¶¶ 24-25). First, he claims that Defendants' failure to transfer the AgFeed Sanction to the Fund deprived him of his due process rights in a whistleblower award. (Id. at ¶¶ 1, 25; Pl. Opp.
Turning first to Plaintiff's assertion that Defendants' failure to transfer the AgFeed Sanction violated the Due Process Clause of the Fifth Amendment by depriving Plaintiff of the ability to claim a whistleblower award, the Court concludes that this claim arises in a new context that is ultimately not cognizable under Bivens. Preliminarily, the Court assumes both that the failure to transfer the AgFeed Sanction is chargeable to Defendants and that the action results in the deprivation of a cognizable property interest. See Furlong v. Shalala, 156 F.3d 384, 393 (2d Cir.1998) ("To establish entitlement to due process protection under the Fifth Amendment, [plaintiffs] must first demonstrate they possess a property interest of constitutional dimension."). Applying the framework articulated in Turkmen to the Amended Complaint, the Court finds that any rights of Plaintiff that were injured by the allegedly improper disbursement of the AgFeed Sanction flow from the Due Process Clause of the Fifth Amendment. Although the Supreme Court has extended Bivens claims to certain due process violations, it has expressly refused to do so on a wholesale basis. See F.D.I.C. v. Meyer, 510 U.S. 471, 484 n. 9, 114 S.Ct. 996, 127 L.Ed.2d 308 (1994) ("[A] Bivens action alleging a violation of the Due Process Clause of the Fifth Amendment may be appropriate in some contexts, but not in others."). The key factor in determining whether an alleged due process violation rises to the level of an actionable Bivens claim is the mechanism of injury. See Turkmen, 789 F.3d at 235 n. 15.
Here, the purported injury to Plaintiff's Fifth Amendment rights resulted from Defendants' failure to transfer the AgFeed Sanction to the Fund, which in turn impaired Plaintiff's ability to recover a whistleblower award. Distilled to Turkmen parlance, the "mechanism of injury" in this case essentially involves the alleged deprivation of a statutorily conferred benefit. In general, courts have refused to extend Bivens to due process cases that are premised on an improper deprivation of a statutorily conferred benefit. See Schweiker v. Chilicky, 487 U.S. 412, 429, 108 S.Ct. 2460, 101 L.Ed.2d 370 (1988) (refusing to extend Bivens to Fifth Amendment due process claim based on denial of social security benefits); Sugrue v. Derwinski, 26 F.3d 8, 12 (2d Cir.1994) (same, where claims based on acts and omissions involving the assignment of a disability rating, and hence a benefit level under Veterans' Benefits statute); Storms v. United States, No. 13 Civ. 811(MKB), 2015 WL 1196592, at *15 (E.D.N.Y. Mar. 16, 2015) (same, where claims based on conduct that allegedly precluded plaintiffs from participating in government programs set aside for qualified veteran-owned businesses).
Conversely, the mechanism of injury in the instant action is materially distinguishable
Having so found, the Court must decide whether to extend Bivens to this claim. It will not. In so deciding, the Court notes that Congress has implemented a substantial, comprehensive, and intricate remedial scheme governing the conduct at issue. Specifically, the judicial review provisions of the Administrative Procedure Act ("APA") set forth in 5 U.S.C. §§ 701-706 "allow any person adversely affected or aggrieved by agency action to obtain judicial review thereof, so long as the decision challenged represents a final agency action for which there is no other adequate remedy in a court." Webster v. Doe, 486 U.S. 592, 599, 108 S.Ct. 2047, 100 L.Ed.2d 632 (1988). Although the Second Circuit has not explicitly considered the issue, a number of other courts have concluded that "the availability of review under the APA precludes a Bivens claim." Storms, 2015 WL 1196592, at *14 (collecting cases). This Court agrees that "the sheer breadth and comprehensiveness of the APA counsels against" extending Bivens to a claim that falls within the purview of the statute. Id. Specifically, the design of and remedies afforded by the APA raise "the inference that Congress `expected the Judiciary to stay its Bivens hand' and provides `a convincing reason for the Judicial Branch to refrain from providing a new and freestanding remedy in damages[.]'" W. Radio Servs. Co. v. U.S. Forest Serv., 578 F.3d 1116, 1125 (9th Cir.2009) (quoting Wilkie, 551 U.S. at 550, 127 S.Ct. 2588).
Here, the heart of Plaintiff's claim is based on an action by the SEC, namely, the deposit of the AgFeed Sanction with the Bankruptcy Court rather than in the Fund. This conduct falls within the purview of the APA, and the Court will therefore not extend Bivens to Plaintiff's claim. In sum, Plaintiff's Fifth Amendment claim premised on the distribution of the AgFeed Sanction must be dismissed.
As noted, the Court also construes the Amended Complaint liberally to find that Plaintiff has alleged a second Fifth Amendment violation against Defendants, this time for not granting him a whistleblower award in connection with the Enforcement Action.
Plaintiff's claim is best understood to allege that Defendants violated his due process rights by not granting him a whistleblower award under the system established by Dodd-Frank and its associated regulations. Thus, the mechanism of injury involves the denial of a statutorily conferred benefit, which, for the reasons set forth above, implicates a new context.
For this claim, too, the Court will not extend Bivens, because Congress has implemented a similarly comprehensive remedial scheme governing the conduct at issue. Specifically, § 922(a) of the Act establishes the statutory framework for Dodd-Frank's whistleblower program. See 15 U.S.C. § 78u-6(a)-(d). Furthermore, this section provides the Commission with "the authority to issue such rules and regulations as may be necessary or appropriate to implement the provisions of this section[.]" Id. § 78u-6(j). Pursuant to this legislative directive, the SEC has promulgated detailed procedures for determining whether a party is entitled to a whistleblower award under Dodd-Frank. See 17 C.F.R. § 240.21F-10.
Among other things, the regulations require a party seeking a whistleblower award to complete a standard form. 17 C.F.R. § 240.21F-10(b). After the administrative or judicial action that produced the whistleblower award has become final, the staff designated by the Director of the Division of Enforcement (the "Claims Review Staff") evaluates all timely whistleblower claims. Id. § 240.21F-10(d).
An applicant for a whistleblower award may contest this Preliminary Determination by submitting a written response to the Office of the Whistleblower, articulating the grounds for any objection to either the denial of an award or the proposed amount of an award. 17 C.F.R. § 240.21F-10(e). A whistleblower contesting an award is also provided with procedural mechanisms for collecting information to support his or her challenge to the Claims Review Staff's determination. Id. § 240.21F-10(e)(1)(i)-(ii). If a timely objection is filed, the Claims Review Staff "will consider the issues and grounds advanced... along with any supporting documentation provided[.]" Id. § 240.21F-10(g).
After reviewing these materials, the Claims Review Staff will issue a Proposed Final Determination. 17 C.F.R. § 240.21F-10(g). The Office of the Whistleblower then notifies the Commission of each Proposed Final Determination, and within 30 days any Commissioner may request that the Commission review the Proposed Final Determination. Id. § 240.21F-10(h). Finally, Dodd-Frank and SEC regulations provide that "a determination of whether or to whom to make an award may be appealed within 30 days after the Commission issues its final decision to the United States Court of Appeals for the District of Columbia Circuit,
In sum, Congress and the SEC have crafted a comprehensive regulatory scheme providing individuals with procedures for applying for whistleblower awards, challenging the denial or amount of an award, and obtaining judicial review of the Commission's determinations. In the face of this comprehensive scheme, this Court declines to extend Bivens to this new context. See Snell, 712 F.3d at 676 (refusing to extend Bivens to a due process claim given the existence of a comprehensive statutory scheme covering contract disputes with the United States Government); Tanvir v. Lynch, 128 F.Supp.3d 756, 772, No. 13 Civ. 6951(RA), 2015 WL 5164869, at *12 (S.D.N.Y. Sept. 3, 2015) (concluding that since Congress had passed a comprehensive scheme governing the operation of the Transportation Safety Administration's "no-fly" list, plaintiffs could not state Bivens claim for violations of the First Amendment). Both of Plaintiff's Fifth Amendment Due Process Clause claims must therefore be dismissed.
In addition to his federal claims, Plaintiff brings pendent claims against Defendants for what he alleges to be acts of misrepresentation, concealment, and deceit. (Am. Compl. ¶¶ 26-28). To resolve these claims, the Court must consider the circumstances under which SEC officials and employees may be sued.
The United States "is immune from suit save as it consents to be sued, and the terms of its consent to be sued in any court define that court's jurisdiction to entertain the suit." Liranzo v. United States, 690 F.3d 78, 84 (2d Cir.2012) (internal alterations, quotation marks, and citations omitted). The Federal Tort Claim Act ("FTCA"), 28 U.S.C. §§ 1346(b), 2671-2680, effects "`a limited waiver by the United States of its sovereign immunity and allows for a tort suit against the United States under specified circumstances.'" Id. at 84-85 (quoting Hamm v. United States, 483 F.3d 135, 137 (2d Cir.2007)). The United States has not, however, waived sovereign immunity for certain intentional torts, including claims arising out of "misrepresentation" or "deceit." 28 U.S.C. § 2680(h); see also Millbrook v. United States, ___ U.S. ___, 133 S.Ct. 1441, 1442, 185 L.Ed.2d 531 (2013) ("One such exception, relating to intentional torts, preserves the Government's immunity from suit for `[a]ny claim arising out of assault, battery, false imprisonment, false arrest, malicious prosecution, abuse of process, libel, slander, misrepresentation, deceit, or interference with contract rights.'" (quoting 28 U.S.C. § 2680(h))); Dorking Genetics v. United States, 76 F.3d 1261, 1264 (2d Cir.1996) (noting that the FTCA's "waiver of sovereign immunity" does not apply to claims arising out of misrepresentations).
The FTCA provides that a suit against the United States is the exclusive remedy for a nonconstitutional tort committed by a federal agent or employee acting within the scope of his or her employment. See Hui v. Castaneda, 559 U.S. 799, 806, 130 S.Ct. 1845, 176 L.Ed.2d 703 (2010) ("The Westfall Act amended the FTCA to make its remedy against the United States the exclusive remedy for most claims against Government employees arising out of their official conduct."); Castro v. United States, 34 F.3d 106, 110 (2d Cir.1994) (noting that "a claimant's exclusive remedy for nonconstitutional
To that end, the FTCA establishes a mechanism for substituting the United States as a party for a non-constitutional tort asserted against a government employee. Lipkin, 468 F.Supp.2d at 622. Specifically, it provides that:
28 U.S.C. § 2679(d)(1). In most cases, "upon the Attorney General's certification, the employee is dismissed from the action, and the United States is substituted as defendant in place of the employee." Osborn v. Haley, 549 U.S. 225, 230, 127 S.Ct. 881, 166 L.Ed.2d 819 (2007).
That said, "the Attorney General's certification is `the first, but not the final word' on whether the federal officer is immune from suit and, correlatively, whether the United States is properly substituted as defendant." Osborn, 549 U.S. at 246, 127 S.Ct. 881 (quoting Gutierrez de Martinez v. Lamagno, 515 U.S. 417, 432, 115 S.Ct. 2227, 132 L.Ed.2d 375 (1995)). A plaintiff may challenge the Government's scope of employment determination under § 2679(d)(1) by alleging with "particularity facts relevant to the scope of employment issue." Aryai v. Forfeiture Support Assocs., 25 F.Supp.3d 376, 388 (S.D.N.Y. 2012). If the plaintiff satisfies this initial burden, the Court will then conduct a de novo review of the certification, applying "state law principles pertaining to when intentional torts conduct falls within the scope of a party's employment." Bello v. United States, 93 Fed.Appx. 288, 289 (2d Cir.2004) (summary order). However, the plaintiff ultimately bears the burden of showing that certification was improper. See Lipkin, 468 F.Supp.2d at 623.
The Amended Complaint alleges that the "SEC Officials [through] public advertisements falsely and deliberately misrepresented and deceived the Plaintiff into believing that an award awaits him if he complies with the Whistleblower laws as enacted by Congress." (Am. Compl. ¶ 28). According to Plaintiff, the "SEC Officials" purportedly "had no intentions of paying Plaintiff any award." (Id.). In his opposition to the motion to dismiss, Plaintiff
The United States Attorney for the Southern District of New York has certified, among other things, that to the extent it is determined that Defendants committed the conduct alleged in Count Two, they were acting within the scope of their employment.
Quite to the contrary, Plaintiff's Count Two allegations against Defendants are inextricably intertwined with the issuance of official SEC statements and notices, as well as the contents of these documents. (See Am. Compl. ¶ 28; Pl. Opp. 5-6). Given the fact that these materials are, incontestably, official SEC documents, Defendants could have only issued them by virtue of their employment. In other words, Plaintiff's claim depends on conduct — the issuance of official statements and notices — that Defendants could only have undertaken while acting within the scope of their employment. In similar situations, courts have held that the actions taken by government employees were in the scope of their employment. See Logan v. Matveevskii, 57 F.Supp.3d 234, 285 (S.D.N.Y.2014) (certification proper because "Plaintiff's allegations against the HUD Defendants seem to depend on the fact that they were" acting within the scope of their employment); De Masi v. Schumer, 608 F.Supp.2d 516, 522 (S.D.N.Y.2009) (certification was proper because "Plaintiff's allegations depend on Senator Schumer's status and conduct as a United States Senator"); Lipkin, 468 F.Supp.2d at 623 ("Given that the allegedly improper acts all occurred within the context of the defendants' prosecution of a
After substitution, the Court must consider whether Plaintiff may maintain Count Two against the United States. He may not. As noted, Count Two is based on allegations of misrepresentation, concealment, deceit, and fraud, all of which are barred by the doctrine of sovereign immunity. The FTCA specifically provides that its waiver of sovereign immunity does not apply to "any claim arising out of... misrepresentation [or] deceit." 28 U.S.C. § 2680(h); see also Millbrook, 133 S.Ct. at 1442. Moreover, Plaintiff's claim for concealment fails, as it "fall[s] within the `misrepresentation' or `deceit' exceptions to the FTCA." Lipkin, 468 F.Supp.2d at 624. Finally, to the extent that the Amended Complaint alleges that Defendants engaged in fraud, this claim also falls within the purview of the FTCA, and ultimately founders on the doctrine of sovereign immunity. See id. at 624 n. 2 ("Edelman v. Fed. Hous. Admin., 382 F.2d 594, 597 (2d Cir.1967), makes clear that suits for fraud are barred under the FTCA by virtue of the exclusion for suits arising out of `misrepresentation.'").
Plaintiff seeks to avoid dismissal under the FTCA by repeatedly and forcefully asserting that he is not alleging a claim under that statute. (See Pl. Opp. 9-10, 12-13). Given the specific conduct alleged in Count Two, however, these assertions cannot salvage Plaintiff's claims. As it happens, Defendants "enjoy absolute immunity from tort claims arising out of acts undertaken in the course of their official duties." De Masi, 608 F.Supp.2d at 520. By disavowing the FTCA, Plaintiff is foreclosing his only potential path for asserting a tort claim based on Defendants' alleged conduct.
In point of fact, two pleading deficiencies beset Plaintiff's Count Two claim. The first, discussed in the preceding section, is that Plaintiff has not (and, it would appear, cannot) plead sufficient facts to suggest that Defendants were acting outside of the scope of their employment. Given the explicit provisions of the FTCA, this pleading deficiency is fatal to Plaintiff's claim. The second, separate deficiency, discussed in this section, is that Plaintiff has failed to plead his claims with the particularity required by Fed.R.Civ.P. 9(b).
Count Two as pleaded in the Amended Complaint generally alleges that the "SEC Officials [through] public advertisements falsely and deliberately misrepresented and deceived the Plaintiff." (Am. Compl. ¶ 28). Plaintiff then clarifies in his opposition to the instant motion that "Defendants" engaged in "a fraud" and "a deceit" with respect to the AgFeed whistleblower notices that were published on the SEC's website. (Pl. Opp. 5-6). Because these allegations sound in fraud and
Significantly, Rule 9(b) requires that "`when fraud is alleged against multiple defendants, a plaintiff must set forth separately the acts complained of by each defendant. A complaint may not simply clump defendants together in vague allegations to meet the pleading requirements of Rule 9(b).'" In re Refco, Inc. Sec. Litig., 503 F.Supp.2d 611, 641 (S.D.N.Y.2007) (quoting Rich v. Maidstone Fin., Inc., No. 98 Civ. 2569(DAB), 2001 WL 286757, at *6 (S.D.N.Y. Mar. 23, 2001)). Rather "where multiple defendants are asked to respond to allegations of fraud, the complaint should inform each defendant of the nature of his alleged participation" in the conduct. Nasik Breeding & Research Farm Ltd. v. Merck & Co., 165 F.Supp.2d 514, 529 (S.D.N.Y.2001).
Count Three of the Amended Complaint alleges a claim for unjust enrichment. In order to state a claim for unjust enrichment under New York law, a plaintiff must allege that "`[i] defendant was enriched, [ii] at plaintiff's expense, and [iii] equity and good conscience militate against permitting defendant to retain what plaintiff is seeking to recover[.]'" Diesel Props S.r.l. v. Greystone Bus. Credit II LLC, 631 F.3d 42, 55 (2d Cir.2011) (quoting Briarpatch Ltd. v. Phoenix Pictures, Inc., 373 F.3d 296, 306 (2d Cir. 2004)).
Plaintiff alleges in the Amended Complaint that "SEC Officials" diverted the AgFeed Sanction to the bankruptcy proceeding in order to enrich their "Lawyer[] friends" who were "involved in the Agfeed case[.]" (Am. Compl. ¶ 30). In his opposition, Plaintiff speculates that "future benefits [may be] accruing" to Defendants because the AgFeed Sanction was distributed in that manner. (Pl. Opp. 6; see also id. at 13 ("Defendants['] actions were beyond the law and future benefits may [accrue] to each of them.")).
As an initial matter, Plaintiff's allegations aver that the "Lawyer friends," rather than Defendants, received a benefit. In so doing, Plaintiff fails to plead that any Defendant was actually enriched. See Legurnic, 63 F.Supp.3d at 248 (noting that in order to succeed on an unjust enrichment claim, plaintiff must show that defendant received a benefit); Washington v. Kellwood Co., No. 05 Civ. 10034(DAB), 2009 WL 855652, at *11 (S.D.N.Y. Mar. 24, 2009) (dismissing unjust enrichment claim because "nowhere do Plaintiffs explain how Defendant was enriched, how the alleged enrichment came at Plaintiffs' expense, or why this alleged enrichment was inequitable"); Am. Fin. Int'l Grp.-Asia, L.L.C. v. Bennett, No. 05 Civ. 8988(GEL), 2007 WL 1732427, at *3 (S.D.N.Y. June 14, 2007) (dismissing unjust enrichment claim where "nothing in the complaint indicates that defendants received any personal benefit");
At most, Plaintiff can allege only that "future benefits [may be] accruing" to the Defendants. (See Pl. Opp. 6, 13). An allegation premised on an unnamed benefit that may accrue in the future, however, is too slender a reed on which to premise a claim of unjust enrichment. See Kaye, 202 F.3d at 616 (evidence did "not establish the specific and direct benefit necessary to support an unjust enrichment claim"); Mina Inv. Holdings, Ltd., 51 F.Supp.2d at 490 (finding that "Plaintiffs' allegation that [defendant] `may' become unjustly enriched in the future" is insufficient to state an unjust enrichment claim). Accordingly, Count Three must be dismissed for failure to state a claim.
Finally, in Count Four of the Amended Complaint, Plaintiff requests that Defendants pay his reasonable attorney's fees. (Am. Compl. ¶ 32). To the extent Plaintiff is seeking attorney's fees for himself, this claim can swiftly be dismissed, inasmuch as a pro se litigant may not recover fees under § 1988. See Jackson v. County of Rockland, 450 Fed.Appx. 15, 19 (2d Cir.2011) (summary order) ("The Supreme Court has spoken clearly that a pro se litigant, whether or not he is a lawyer, may not receive attorney's fees under Section 1988."); Gordon v. City of New York, No. 09 Civ. 04577(ERK), 2015 WL 1514359, at *5 (E.D.N.Y. Apr. 3, 2015) ("Indeed, a party appearing pro se is not entitled to fees under § 1988, even if she is an attorney."); Peterson v. City of New York, No. 11 Civ. 3141(DLC), 2012 WL 75029, at *5 (S.D.N.Y. Jan. 9, 2012) ("Plaintiff's claim for attorney's fees pursuant to 42 U.S.C. § 1988 fails because, although plaintiff is an attorney, he is proceeding pro se and is thus not entitled to attorney's fees.").
Plaintiff counters this well-established legal principle by noting that he in fact "intends on hiring an attorney in the near future." (Pl. Opp. 13). This claim cannot salvage Count Four. Section 1988 allows for the award of reasonable attorney's fees to a "prevailing party." 42 U.S.C. § 1988. Plaintiff's substantive claims here have been dismissed, and therefore there is no basis to award attorney's fees. Sullivan v. Chappius, 711 F.Supp.2d 279, 287 (W.D.N.Y.2010) ("Since plaintiff's two substantive claims are thus subject to dismissal, there is no basis for his third `cause of action' for attorney's fees, and that claim must be dismissed as well."); Guadagni v. New York City Transit Auth., No. 08 Civ. 3163(CPS)(SMG), 2009 WL 1910953, at *10 (E.D.N.Y. June 30, 2009) ("Because all of plaintiff's substantive claims must be dismissed as a matter of law, plaintiff's claim under § 1988 is accordingly dismissed as moot."); Torres v. Hynes, No. 99 Civ. 7117(RR), 2000 WL 1052075, at *3 (E.D.N.Y. June 21, 2000) ("Because this court is dismissing his complaint against Ms. Garnet and Ms. Salzman in its entirety, it dismisses the § 1988 claim against these defendants as well.").
Finally, the Court considers whether to permit Plaintiff to file a Second Amended Complaint. The Court notes that Plaintiff has not sought such relief, and for this reason the remainder of this section may be superfluous. However, the Second Circuit has noted that "[a] pro se complaint should not be dismissed without the Court granting leave to amend at least once when a liberal reading of the complaint gives any indication that a valid claim
Given Plaintiff's pro se status, this Court has taken great pains to construe the allegations in the Amended Complaint as liberally as possible, as is evidenced throughout this Opinion. The Court has even sought to bolster the allegations with the statements and arguments in Plaintiff's opposition papers. Even granting that solicitude, the Court is confident that Plaintiff cannot surmount the many legal hurdles (to say nothing of the factual ones) outlined in this Opinion, and therefore will not grant leave to amend. See Cuoco v. Moritsugu, 222 F.3d 99, 112 (2d Cir.2000) (upholding denial of leave to amend pro se complaint where proposed amendment would have been futile; "Repleading would thus be futile. Such a futile request to replead should be denied."). As detailed above, the Dodd-Frank and Bivens claims fall on legal grounds that cannot be remedied by repleading. As for the misrepresentation claim, Plaintiff is unable to plead facts demonstrating that the alleged conduct by Defendants was outside the scope of their employment, and he is unable to plead a plausible claim in this regard with the requisite particularity. Plaintiff's unjust enrichment claims fail as a legal matter, and would be similarly impossible to plead in accordance with Iqbal and Twombly. Finally, Plaintiff cannot plead claims that would permit the award to him of attorney's fees. For all of these reasons, the Amended Complaint must be dismissed with prejudice.
For the foregoing reasons, Defendants' motion to dismiss the Amended Complaint is GRANTED in its entirety. The Clerk of Court is directed to terminate the motion pending at docket entry 27, adjourn all remaining dates, and close this case.
The Court certifies, pursuant to 28 U.S.C. § 1915(a)(3), that any appeal from this Order would not be taken in good faith; therefore, in forma pauperis status is denied for purposes of an appeal. See Coppedge v. United States, 369 U.S. 438, 444-45, 82 S.Ct. 917, 8 L.Ed.2d 21 (1962).
SO ORDERED.
For convenience, Defendants' opening brief (Dkt. # 28) is referred to as "Def. Br."; Plaintiff's opposition (Dkt. # 36) as "Pl. Opp."; and Defendants' reply brief (Dkt. # 37) as "Def. Reply."
15 U.S.C. § 78u-6(g)(3)(A) (emphases added). Defendants further note that, according to the 2014 SEC Annual Report, the balance of the Fund was nearly $438 million. (Def. Br. 5). However, as discussed in footnote 3 above, the Court is limited in what it may consider in the motion to dismiss context, and it therefore declines to consider the Annual Report at this time.
Id. (internal citation omitted).
