Feathers v. U.S. Securities and Exchange Commission

• Court: District Court, N.D. California
• Decided: March 14, 2024
• Docket: 5:23-cv-05610
• Status: Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 MARK FEATHERS, Case No. 23-cv-05610-SVK

8 Plaintiff, ORDER ON DEFENDANT’S MOTION 9 v. TO DISMISS

10 U.S. SECURITIES AND EXCHANGE Re: Dkt. No. 18 COMMISSION, 11 Defendant. 12 13 In the complaint in this case, Plaintiff Mark Feathers, appearing pro se, seeks damages and 14 declaratory relief for alleged violations of his constitutional rights in connection with an 15 administrative proceeding brought by Defendant United States Securities and Exchange 16 Commission (“the SEC”) relating to Feathers’ violations of federal securities laws. Dkt. 1. Now 17 before the Court is the SEC’s motion to dismiss, in which the SEC argues that Feathers’ complaint 18 should be dismissed with prejudice because his claims are moot, barred by sovereign immunity, 19 inadequately pled, and barred by res judicata. Dkt. 18. Dkt. 19. All Parties have consented to the 20 jurisdiction of a magistrate judge. Dkt. 9, 17.1 21 The Court finds this matter suitable for determination without oral argument. Civ. L.R. 7- 22 1(b). For the reasons discussed below, the SEC’s motion to dismiss is GRANTED WITHOUT 23 LEAVE TO AMEND. 24 I. BACKGROUND 25 Feathers is a resident of Felton, California, which is located in this District. See Dkt. 1 ¶ 9. 26

27 1 The caption of the complaint identifies a second defendant, Thomas A. Seaman. Dkt. 1 at 1 1 Beginning in approximately 2007, Feathers, through his business Small Business Capital 2 Corporation (“SBCC”), offered and sold more than $46 million of securities in two investment 3 funds, Investors Prime Fund, LLC (“IPF”) and SBC Portfolio Fund, LLC (“SBF”). See Dkt. 18 at 4 2. The SEC claims that contrary to representations that Feathers, IFP, and SPF made to their 5 investors, Feathers caused the investment funds to repeatedly make secret, unsecured loans to 6 SBCC, ultimately to benefit Feathers and SBCC. See id. The SEC and the Department of Justice 7 instituted a series of civil, administrative, and criminal actions against Feathers, as follows: 8 • SEC v. SBCC: In June 2012, the SEC filed a civil action against Feathers, SBCC, 9 IPF, and SPF in this District, alleging violations of federal securities laws. See 10 SEC v. SBCC, N.D. Cal. Case No. 5:12-cv-03237-EJD (“SEC v. SBCC”). In 11 August 2013, the district court granted the SEC’s motion for summary judgment, 12 finding that Feathers committed securities fraud and violated federal broker-dealer 13 registration provisions. See SEC v. SBCC, 2013 WL 4455850, at *14-15 (N.D. Cal. 14 Aug. 16, 2023). In November 2013, the district court permanently enjoined 15 Feathers from future violations of federal securities laws. See SEC v. SBCC, 2013 16 WL 5955669 (N.D. Cal. Nov. 6, 2013). Feathers appealed, and the Ninth Circuit 17 affirmed. SEC v. Feathers, 774 F. App’x 354, 356 (9th Cir. 2019), amended in 18 part, 773 F. App’x 929 (9th Cir. 2019). Afterwards, Feathers filed numerous 19 unsuccessful motions for relief in the district court. See, e.g., SBC v. SBCC, N.D. 20 Cal. Case No. 5:12-cv-03237-EJD, Dkt. 1286, 1361, 1365, 1367, 1381, 1392, 1393, 21 1404, 1408. 22 • United States v. Feathers: In October 2014, also in this District, Feathers was 23 charged with 29 counts of securities and mail fraud arising from the same securities 24 fraud that was at issue in SEC v. SBCC. See United States v. Feathers, N.D. Cal. 25 Case No. 5:14-CR-00531-LHK (“United States v. Feathers”), Dkt. 1. Feathers 26 pleaded guilty to one count of mail fraud in March 2018. Id. at Dkt. 170. The 27 court sentenced him to 33 months of imprisonment and imposed a restitution 1 • Feathers v. United States: In May 2015, Feathers filed a complaint in this District 2 alleging violations of his constitutional rights and various statutes based on an 3 alleged error in the declaration of an SEC accountant filed in the earlier case of 4 SEC v. SBCC. Feathers v. United States, N.D. Cal. Case No. 5:15-cv-02194-PSG 5 (“Feathers v. United States”). The court granted the government’s motion to 6 dismiss for lack of subject matter jurisdiction, holding that sovereign immunity 7 barred all of Feathers’ claims. See Feathers v. United States, 2015 WL 7734291, at 8 *3 (N.D. Cal. Dec. 1, 2015). 9 • Matter of Feathers: In February 2014, the SEC’s Division of Enforcement 10 initiated an administrative proceeding (“Matter of Feathers”) in which it sought to 11 bar Feathers from the securities industry. Ultimately, an ALJ issued an order in 12 September 2020 barring Feathers from the securities industry. Matter of Feathers, 13 Exchange Act Release No. 1403, 2020 WL 5763383 (ALJ Sept. 25, 2020). 14 Feathers filed a Petition for Review of the ALJ’s decision, which the Commission 15 granted. See Matter of Feathers, Exchange Act Release No. 34-90380, 2020 WL 16 6581207 (Nov. 9, 2020). The administrative action was eventually dismissed, as 17 explained in the discussion of Feathers v. SEC I below. 18 • Feathers v. SEC I: On October 5, 2022, while the Commission was still reviewing 19 the ALJ’s decision, Feathers filed an action in this District, Feathers v. SEC, N.D. 20 Cal. Case No. 3:22-cv-05756-JD (“Feathers v. SEC I”). The complaint in that 21 case, which was accompanied by a motion for temporary restraining order 22 (“TRO”), sought compensatory damages of not less than $5 million stemming from 23 the SEC’s administrative action against him in Matter of Feathers and an 24 injunction to stop the proceeding. Id., Dkt. 1, 2. On November 29, 2022, the judge 25 in that action, The Honorable James Donato, denied the TRO and dismissed the 26 Complaint. Feathers v. SEC I, 2022 WL 17330840 (N.D. Cal. Nov. 29, 2022). 27 The court held that Feathers’ damages claims were barred by sovereign immunity, 1 were not met. Id. Feathers filed an amended complaint the same day, and the SEC 2 moved to dismiss the amended complaint. Feathers v. SEC I, Dkt. No. 19, 22. In 3 or around June 2023, while the motion to dismiss was pending, the SEC issued an 4 order dismissing Matter of Feathers and dozens of other cases because of a 5 “control deficiency” in which the Division of Enforcement staff had access to 6 memoranda of SEC Adjudication staff. See Feathers v. SEC I, Dkt. No. 33-1 at 7 ECF 1-2. Thereafter, on June 15, 2023, Judge Donato, dismissed the amended 8 complaint in that case as moot. Feathers v. SEC I, Dkt. 37. Feathers sought 9 clarification or reconsideration of the ruling. Feathers v. SEC I, Dkt. 38-40. Judge 10 Donato rejected the motions, and the order stated that “[i]f plaintiff wishes to 11 pursue new claims against the SEC, he may file a new lawsuit.” Feathers v. SEC I, 12 Dkt. 45. 13 • Feathers v. SEC II (this action): On October 31, 2023, Feathers filed the 14 complaint in this action. Dkt. 1. 15 In his complaint in this case, Feathers alleges that “[f]rom January 2014 through June 2023 16 Defendant Securities and Exchange Commission engaged in unconstitutional litigation against 17 Plaintiff … in its federal agency law forum.” Id. ¶ 1 (citing Ex. 1 to the Complaint, a docket sheet 18 from Matter of Feathers). Feathers alleges that he and his companies were exempted from SEC 19 regulation because of a securities permit issued by the California Department of Corporations. Id. 20 ¶ 2 and Ex. 2; see also id. ¶¶ 5-6. Feathers further alleges that in SEC v. SBCC, “SEC withheld its 21 knowledge from district court it held no regulatory authority over Feathers.” Id. ¶ 3. Feathers 22 claims that only when he filed Feathers v. SEC I did the SEC terminate its agency proceedings in 23 Matter of Feathers. Id. ¶ 4. He claims that he suffered “4th Amendment violations of selective 24 prosecution due to his need to devote almost a decade and countless hours to defend himself 25 against SEC’s wrongful prosecution.” Id. ¶ 7. He further alleges that he has “suffered from 26 discriminatory and unlawful treatment in violation of the Takings, Due Process, and Equal 27 Protection Causes of the United States Constitution and Bill of Rights.” Id. ¶ 11. 1 of income” and “a prior restitution order of some $6 million” in SEC v. SBCC. Id. ¶¶ 3, 11. He 2 also claims he suffered “substantial emotional distress and mental anguish as a natural and 3 foreseeable consequence of Defendant’s wrongful prosecution.” Id. ¶ 21. 4 The SEC filed a motion to relate this case to Feathers v. SEC I, which Feathers opposed. 5 Dkt. 11, 12; see also Dkt. 14, 15. Judge Donato declined to relate the cases. Dkt. 16. 6 Now before the Court is the SEC’s motion to dismiss the complaint in this case, which 7 Feathers opposes. Dkt. 18 (motion); Dkt. 19 (opposition); Dkt. 21 (reply). 8 II. PLAINTIFF’S REQUEST FOR JUDICIAL NOTICE 9 Included in Feathers’ opposition to the motion to dismiss is a request that the Court take 10 judicial notice of various contentions. See Dkt. 19 at 7-8. Under Federal Rule of Evidence 11 201(b), “[t]he court may judicially notice a fact that is not subject to reasonable dispute because it: 12 (1) is generally known within the trial court’s territorial jurisdiction; or (2) can be accurately and 13 readily determined from sources whose accuracy cannot reasonably be questioned.” Eight of the 14 nine items identified by Feathers ask the Court to judicially notice that certain information is not 15 included in the SEC’s motion to dismiss. Dkt. 19 at 7-8 (items 1-7 and 9). These items are simply 16 arguments by Feathers and do not fall into any category of judicially noticeable information in 17 FRE 201(b). The remaining item asks the Court to take judicial notice of language in Plaintiff’s 18 offering documentation, but the Court has not considered that language in ruling on the motion to 19 dismiss. Accordingly, Feathers’ request for judicial notice is DENIED. 20 III. DISCUSSION 21 The SEC argues that the complaint should be dismissed for several reasons. First, the SEC 22 argues that Feathers’ claims in this case are moot, just as Judge Donato found his claims to be in 23 Feathers v. SEC I. Second, the SEC argues the Court lacks subject matter jurisdiction because the 24 relief sought by Feathers is barred by sovereign immunity. Third, the SEC argues that even if the 25 Court has subject matter jurisdiction, the complaint in this case fails to state a claim. 26 A. Mootness 27 1. Legal Standard 1 Cnty., 863 F.3d 1144, 1155 (9th Cir. 2017). “A case is moot where no actual or live controversy 2 exists.” Id. (internal citation and quotation marks omitted). If it is no longer possible that the 3 plaintiff can obtain relief for his claim, the claim is moot and must be dismissed for lack of 4 jurisdiction. Id. “Because mootness pertains to a federal court’s subject-matter jurisdiction under 5 Article III, it is properly raised in a motion to dismiss under Federal Rule of Civil Procedure 6 12(b)(1).” Whitaker v. Gundogdu, Inc., No. 21-CV-03132-JSC, 2021 WL 5937659, at *2 (N.D. 7 Cal. Dec. 16, 2021) (citing White v. Lee, 227 F.3d 1214, 1242 (9th Cir. 2000)). 8 2. Analysis 9 As discussed above, Judge Donato ultimately dismissed Feathers v. SEC I based on 10 mootness. In its motion to dismiss, the SEC argues that “the Court’s dismissal of Feathers v. 11 SEC I for mootness precludes Feathers from filing any further complaints based on Matter of 12 Feathers” and that the mootness dismissal “should dictate that this case is also dismissed for 13 mootness, since the two cases are based on the same facts.” Dkt. 18 at 8. Feathers argues that the 14 present case is not moot. See Dkt. 19 at 5. He explains that in Feathers v. SEC I he “sought a 15 TRO against Defendant’s litigation,” and in this case he “seek[s] relief from defendant wrongfully 16 and unconstitutionally, from 2014-2023, placing him in a state of constant and uninterrupted 17 litigation.” Id. at 5, 9. Feathers asserts that “Defendant’s termination of its administrative 18 proceedings against Plaintiff does not in any way undo, or make moot, the duress and other harm 19 brought onto Plaintiff during that decade.” Id. at 5. 20 The dismissal of Feathers v. SEC I for mootness does not dictate dismissal of this action 21 on the same grounds. As discussed above, in the earlier case Feathers originally sought both 22 monetary damages and an injunction against the SEC administrative proceedings. Feathers v. 23 SEC I, Dkt. 1, 2. At the time Judge Donato issued an order dismissing the original complaint 24 (with leave to amend) and denying Feathers’ request for TRO, the administrative proceeding in 25 Matter of Feathers was still underway. See id., Dkt. 18 at 1. Judge Donato found that Feathers’ 26 claim for monetary damages was barred by sovereign immunity and that Feathers had failed to 27 establish grounds for issuance of a TRO. Id. Feathers subsequently filed an amended complaint 1 Dkt. 19. In his order dismissing the amended complaint, Judge Donato reviewed the history of the 2 case and found that “[t]he amended complaint responded to the order of dismissal [of the original 3 complaint] by omitting a request for monetary damages.” Id., Dkt. 37 at 1. Judge Donato then 4 dismissed the amended complaint as moot because while the SEC’s motion to dismiss the 5 amended complaint was pending, the SEC had dismissed and closed Matter of Feathers. Id. 6 Thus, the mootness holding in Feathers v. SEC I was in the context of termination of the 7 administrative proceeding in Matter of Feathers that Feathers sought to enjoin or have declared 8 improper. This case, by contrast, seeks monetary damages for harm Feathers claims to have 9 suffered as a result of the SEC’s proceedings against him. In its reply on the motion to dismiss, 10 the SEC concedes that “the barrier to Feathers obtaining damages for his alleged suffering is not 11 the mootness of damages; it is sovereign immunity.” Dkt. 21 at 2. The Court agrees that 12 Feathers’ damages claim is not moot, although as discussed below it must be dismissed for other 13 reasons. 14 As the SEC points out, the complaint in this case also seeks a determination that the SEC’s 15 prosecution of him was “wrongful.” Dkt. 1 at 4. To the extent Feathers seeks declaratory relief 16 regarding the administrative proceeding in Matter of Feathers, that claim is moot because the 17 administrative proceeding has been terminated and Feathers concedes that his complaint does not 18 present a concern that the SEC will reopen the proceedings. See Dkt. 19 at 9; see also 19 Headwaters, Inc. v. Bureau of Land Mgmt., 893 F. 2d 1012, 1015 (9th Cir. 1989) (“[a] case or 20 controversy exists justifying declaratory relief only when the challenged government activity … is 21 not contingent [and] has not evaporated or disappeared” (internal quotation marks and citations 22 omitted)). 23 Accordingly, Feathers’ claim for damages is not moot, although it must be dismissed for 24 other reasons discussed below. Plaintiff’s claim for declaratory relief is DISMISSED as moot 25 because the administrative proceeding that is the subject of the claim for declaratory relief has 26 been terminated. In light of this holding, the Court does not reach the SEC’s argument that the 27 1 adjudication of mootness in Feathers v. SEC I precludes re-litigation of mootness in this case.2 2 B. Sovereign Immunity 3 1. Legal Standard 4 When sovereign immunity bars an action, the action is subject to dismissal under Rule 5 12(b)(1) for lack of subject matter jurisdiction. Hodge v. Dalton, 107 F.3d 705, 707 (9th Cir. 6 1997); Pistor v. Garcia, 791 F.3d 1104, 1111 (9th Cir. 2015) (“Rule 12(b)(1) is … a proper 7 vehicle for invoking sovereign immunity from suit”). If a defendant brings a facial attack on the 8 district court’s subject matter jurisdiction under Rule 12(b)(1), the court assumes the plaintiff’s 9 factual allegations to be true and draws all reasonable inferences in his favor. Wolfe v. Strankman, 10 392 F.3d 358, 360 (9th Cir. 2004). However, courts do not presume the truthfulness of legal 11 conclusions contained in the complaint. Warren v. Fox Family Worldwide, Inc., 328 F.3d 1136, 12 1139 (9th Cir. 2003). 13 2. Analysis 14 As discussed in section III.A.2. above, the complaint alleges that Feathers suffered 15 monetary damages as a result of the SEC’s litigation and enforcement actions against him. See 16 Dkt. 1 ¶¶ 3, 11, 18.3 The SEC argues that any claim for monetary damages is barred by the 17 doctrine of sovereign immunity and must be dismissed. 18 “Absent a waiver, sovereign immunity shields the Federal Government and its agencies 19 from suit.” F.D.I.C. v. Meyer, 510 U.S. 471, 475 (1994). “It is axiomatic that the United States 20

21 2 To the extent Feathers points to Judge Donato’s decision not to relate this case to SEC v. 22 Feathers I as evidence that the prior proceeding is not relevant (see Dkt. 19 at 10), that argument is without merit. A related case determination is made pursuant to Civil Local Rule 3-12, which 23 concerns the assignment of cases in the district. It has nothing to do with the relevance, res judicata effect, or collateral estoppel effect of prior proceedings. See Giles v. Hotel Oakland 24 Assocs., No. C-90-1190-MHP, 1991 WL 377997, at *3 (N.D. Cal. Mar. 8, 1991).

25 3 In his opposition to the motion to dismiss, Feather disputes the SEC’s statement that he is claiming $6 million in damages. Dkt. 19 at 5. He clarifies that he may “eventually” consider 26 asking for relief from the prior restitution order in SEC v. SBCC of approximately $6 million but that is “altogether different than to ‘make a claim for $6M.’” Id. However, the cited portions of 27 the complaint and Feathers’ opposition to the motion to dismiss make clear that he seeks some 1 may not be sued without its consent and that the existence of consent is a prerequisite for 2 jurisdiction.” United States v. Mitchell, 463 U.S. 206, 212 (1983). As relevant to this case, “[t]he 3 SEC is specifically immune from suit except in certain well-defined circumstances” and “may be 4 sued only in the limited circumstances where Congress has expressly waived sovereign 5 immunity.” Standifer v. S.E.C., 542 F. Supp. 2d 1312, 1316 (N.D. Ga. 2008) (internal quotation 6 marks and citations omitted). “The party who sues the United States bears the burden of pointing 7 to such unequivocal waiver of immunity.” Holloman v. Watt, 708 F.2d 1399, 1401 (9th Cir. 8 1983). 9 The complaint in this case asserts a violation of Feathers’ constitutional rights and does not 10 identify claims under any statute, nor has Feathers identified any statutory waiver of sovereign 11 immunity for the SEC. See Dkt. 1. When the court in Feathers v. United States considered the 12 issue of sovereign immunity, it identified “three potential avenues” for Feathers’ claims, as does 13 this Court: (1) the Administrative Procedures Act, 5 U.S.C. §§ 701 et seq. (“APA”); (2) the 14 Federal Tort Claims Act, 28 U.S.C. §§ 2671 et seq. (“FTCA”); and (3) a Bivens action. 15 Feathers v. United States, 2015 WL 7734291, at *2 (N.D. Cal. Dec. 1, 2015). Just as with the 16 claims in Feathers v. United States, this Court concludes that Feathers’ claims in this case do not 17 satisfy the requirements of any of these waivers. See id.; see also Feathers v. SEC I, 2022 WL 18 17330840, at *1 (holding that original complaint in Feathers v. SEC I “demonstrates on its face a 19 lack of subject matter jurisdiction because damages claims against the SEC are barred by 20 sovereign immunity” (citations omitted)). 21 First, the APA waives sovereign immunity only for claims “seeking relief other than 22 money damages.” 5 U.S.C. § 702. Because any claim for declaratory relief is moot (as discussed 23 in section III.A.2. above), Feathers’ only remaining claim is for monetary damages and does not 24 fall within the APA waiver. See Feathers v. United States, 2015 WL 7734291, at *2. 25 Second, the FTCA provides a limited waiver of sovereign immunity for a federal agency 26 employee’s tortious acts if such torts committed in the employ of a private person would give rise 27 to liability under state law. 28 U.S.C. § 1346(b); see also Pereira v. U.S. Postal Service, 964 F.2d 1 Constitution. See Dkt. 1 ¶¶ 7, 11. Accordingly, the FTCA’s waiver of sovereign immunity does 2 not apply. See Feathers v. United States, 2015 WL 7734291, at *3. 3 Third, a Bivens action provides an avenue for a plaintiff to seek remedies from a federal 4 agent who commits a constitutional wrong. See Bivens v. Six Unknown Named Agents of the Fed. 5 Bureau of Narcotics, 403 U.S. 388 (1971). A Bivens action does not lie against the agency that 6 employs the agent. See Meyer, 510 U.S. at 484-86. Feathers has not named any individual SEC 7 employees as defendants. Moreover, he cannot amend his complaint to do so because, as in 8 Feathers v. United States, “Feathers’ [alleged] injury was caused by the SEC’s decision to bring [] 9 enforcement action[s] against him,” not by the acts or errors of individual SEC employees. See 10 Feathers v. United States, 2015 WL 7734291, at *3. 11 Accordingly, Feathers has not met his burden of identifying an unequivocal waiver of 12 sovereign immunity that would allow him to sue the SEC for monetary damages, and none of the 13 “three potential avenues” for such a waiver are available to him. Accordingly, Feathers’ claim for 14 monetary damages is DISMISSED. 15 C. Failure to State a Claim 16 1. Legal Standard 17 Under Federal Rule of Civil Procedure 12(b)(6), a district court must dismiss a complaint 18 if it fails to state a claim upon which relief can be granted. In ruling on a motion to dismiss, a 19 court may consider only “the complaint, materials incorporated into the complaint by reference, 20 and matters of which the court may take judicial notice.” Metzler Inv. GmbH v. Corinthian Colls., 21 Inc., 540 F.3d 1049, 1061 (9th Cir. 2008). In deciding whether the plaintiff has stated a claim, the 22 court must presume the plaintiff’s allegations are true and draw all reasonable inferences in the 23 plaintiff’s favor. Usher v. City of L.A., 828 F.2d 556, 561 (9th Cir. 1987). However, the court is 24 not required to accept as true “allegations that are merely conclusory, unwarranted deductions of 25 fact, or unreasonable inferences.” In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 26 2008) (citation omitted). 27 To survive a motion to dismiss, the plaintiff must allege “enough facts to state a claim to 1 “facial plausibility” standard requires the plaintiff to allege facts that add up to “more than a sheer 2 possibility that a defendant has acted unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662, 668 (2009). 3 If a motion to dismiss is granted, the court must grant leave to amend unless it is clear that 4 the complaint’s deficiencies cannot be cured by amendment. Eminence Capital, LLC v. Aspeon, 5 Inc., 316 F.3d 1048, 1052 (9th Cir. 2003). 6 2. Analysis 7 The complaint in this case contains a conclusory recitation of purported constitutional 8 violations, none of which plausibly state a claim. Feathers alleges that he “suffered 4th 9 Amendment violations of selective prosecution due to his need to devote almost a decade and 10 countless hours to defend himself against SEC’s wrongful prosecution.” Dkt. 1 ¶ 7. However, he 11 has failed to allege any search or seizure actionable under the Fourth Amendment. See United 12 States v. Jacobsen, 466 U.S. 109, 113 (1984) Feathers also alleges that he “suffered from 13 discriminatory and unlawful treatment in violation of the Takings, Due Process, and Equal 14 Protection Clauses of the United States Constitution and Bill of Rights.” Dkt. 1 ¶ 11; see also id. 15 (“Plaintiff’s claim is governed by the Fourth, Fifth, and other possible Amendments to the United 16 States Constitution and the Bill of Rights which may be applicable”). There are no facts to 17 establish any plausible constitutional violation under this open-ended laundry list of constitutional 18 provisions. Accordingly, as with the original complaint that was dismissed in Feathers v. SEC I, 19 “nothing in the way of facts are alleged to plausibly make out constitutional torts.” Feathers v. 20 SEC I, Dkt. 18 at 4. Even if Feathers had included facts to plausibly support constitutional claims, 21 those claims would nonetheless be subject to dismissal because “[d]amages are not available 22 against a federal agency for constitutional violations.” Feathers v. SEC I, Dkt. 18 at 4. 23 The gravamen of Feathers’ complaint in this case is that he and his companies were not 24 subject to regulation by the SEC and therefore the SEC’s enforcement actions, which he alleges 25 have caused him financial injury, were improper. See, e.g., Dkt. 1 ¶ 3 (alleging that “[p]rior to its 26 agency law proceedings SEC withheld its knowledge from district court it held no regulatory 27 authority over Feathers”); id. ¶ 6 (alleging that “SEC always held awareness of Plaintiffs 1 explanation that his companies had a “securities permit” issued by the California Department of 2 Corporations. Id. ¶ 2 and Ex. 2; see also id. ¶ 5 (quoting language from offering documents that 3 securities were being offered and sold pursuant to a permit granted by the California 4 Commissioner of Corporations). However, Feathers has provided no support in either the 5 Complaint or in his opposition to the motion to dismiss for his apparent premise that the California 6 agency had the exclusive authority to regulate him. See Dkt. 1, 19.4 7 Accordingly, even if Feathers’ allegations are not moot or barred by sovereign immunity, 8 they fail to state a claim and are therefore DISMISSED. 9 D. Leave to Amend 10 The SEC acknowledges that a district court ordinarily must grant leave to amend but 11 argues that considerations of futility, Feathers’ repeated failure to cure deficiencies in other 12 actions, his bad faith, and his prejudicial repetitive filings justify denying Feathers leave to amend. 13 Dkt. 18 at 12. Feathers requests that he be allowed an opportunity to cure any defects found in the 14 complaint. Dkt. 19 at 12. 15 Given the extensive history of litigation between the Parties, the Court concludes that 16 giving Feathers leave to amend his complaint would be futile. Feathers is proceeding in this 17 action pro se, which under typical circumstances would weigh in favor of granting him leave to 18 amend. However, Feathers is a seasoned litigant in this District on claims against the SEC. He 19 was unable to cure his claims by amendment in Feathers v. SEC I. It is reasonable to infer that if 20 he could plead an exception to sovereign immunity (which the courts in both Feathers v. United 21 States and Feathers v. SEC I identified as an obstacle to his claims), he would have done so in his 22 complaint in this action. Similarly, if there were facts to support the alleged constitutional 23 violations, which also were found deficient in Feathers v. SEC I, he would have included them in 24 what is effectively at least his third attempt to do so. Feathers does not identify any information 25 he could add to his complaint that would address the deficiencies noted in this order. 26 Accordingly, the complaint is DISMISSED WITHOUT LEAVE TO AMEND. See 27 1 Golden v. Intel Corp., 642 F. Supp. 3d 1066, 1073 (N.D. Cal. 2022) (denying pro se plaintiff leave 2 || to amend where he “had multiple suits, with nearly identical allegations” dismissed on similar 3 || grounds). 4 || Iv. CONCLUSION 5 For the foregoing reasons, the SEC’s motion to dismiss the complaint is GRANTED and 6 || the complaint is DISMISSED WITHOUT LEAVE TO AMEND. 7 SO ORDERED. 8 Dated: March 14, 2024 9 10 Seen Yo SUSAN VAN KEULEN 11 United States Magistrate Judge a 12

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