Stanwyck v. United States

• Court: United States Court of Federal Claims
• Decided: July 5, 2016
• Docket: 15-28
• Status: Published

Opinion

(}REG!I\IAI lln tW @nftp! 9ltuteg [.ourt of /elerst @tufm{_ No.15-28c FILED (Filed July 5, 2016) JUL - 5 2016 ************************ U.S. COURT OF * FEDERAL CLAIMS

STEVEN J. STANWYCK, * Motion to dismiss, RCFC 12(bX1); * bankruptcy trustee bonds, 11 U.S.C. Plaintif{ * S 322; no contract based on statutes v. * and regulations; no jurisdiction over * criminal matters; Joshua u. United THE UNITED STATES, * States: RICO, 18 U.S.C. S 196I et seq.; * no money-mandating laws identifred. Defendant. * * ************************

Steuen J. Stanwych, Santa Monica, CaI., pro se.

Geoffrey M. Long, Commercial Litigation Branch, Civil Division, Department of Justice, with whom werc Benjarnin C. Mizer, Principal Deputy Assistant Attorney General, Robert E. Kirschman, Jr., Director, and Franhlin E. Wite, Jr., Assistant Director, aII of Washington, D.C., for defendant.

MEMORANDUM OPINION AND ORDER

WOLSKI, Judge.

Pending before the Court is defendant's motion to dismiss this case. For the reasons set forth below, the Court frnds that it lacks jurisdiction over plaintiffs claims. Defendant's motion to dismiss the case is GRANTED.

I. BACKGROUND Plaintiff Steven J. Stanwyckr was a debtor in three Chapter 7 bankruptcy proceedings. Comp. at 2 (citing In re Stanwyck, 2:92-bk-2247 5-SB (Bankr. C.D. Cat.2002); In re Stanwych,2:02-bk-25398-SB (Bankr. C.D. Cal. 2008); In re

1 Although Mr. Stanwyck is proceeding in this case pro se, he was a member of the California bar until his disbarment on February 11,2012. See Attorney Profile, Steuen Jay Stanwych - #48728, The State Bar of California, http://members.calbar.ca. gov/faVMember/DetaiU 487 28 (last visited July 5, 2016). Stanwy ch, 2:07-bk- 19183-PC (Bankr. C.D. CaL 20 13)). Plaintiff's complaintz alle ges that the Clerk of the Court of the United States Bankruptcy Court for the Central District of California improperly closed his prior bankruptcy proceedings. Compl. at 2. The closures were improper, plaintiff contends, because the bankruptcy trustees were allegedly acting without proper trustee bonds and, thus, could not lawfully discharge the bankruptcy actions. 1d. Upon a close review of plaintiff's complaint and its attachment, plaintiff's claim seems to be that aII bankruptcy judges and trustees have, since 1992, failed to satisfu the bonding requirements under 11 U.S.C. S 322(a) and have thus improperly received compensation for their servlces. Compl. Ex. 1 at 2. Based on this, Mr. Stanwyck seeks at least $200,000,000 in damages and any other equitable relief deemed appropriate by this Court. See Compl. at 6; Pl.'s Resp. to Def.'s Mot. to Dismiss (PI.'s Resp.) at 7'

In the complaint, plaintiff bases our court's purported jurisdiction to hear the matter on the Fifth and Fourteenth Amendments to the United States Constitution; the Tucker Act (28 U.S.C. $ 1491); unspecified contracts between plaintiff and the United States; various provisions under Chapters 3 and 7 of Title 11 ofthe U.S. Code; 28 U.S.C. $S 159, 583, 586, and 1930; the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. S 1961 e, seq.; and various Federal Rules of Bankruptcy Procedure. Compl. at 3-4. Specifically, plaintiff alleges that the jurlicial Administrative office of the United states courts has conspired with the U.S. Department of Justice's Executive Office for U.S. Trustees (EOUST) to harm plaintiff. Compl. at 5. This allegedly constituted a RICO conspiracy that also involved violations of 18 U.S.C. $S 1341, 1503, 152, 153, and 157(3). Compl' at 5.

The government moves to dismiss this case under RuIe 12(b)(1) of the Rules of the United States Court of Federal Claims (RCFC) for lack of subject-matter jurisdiction. Def.'s Mot. at 1. The government argues first, that this court lacks jurisdiction over plaintiff's criminal and civil RICO claims' Id. at 3-4. Second, the government contends that this court Iacks jurisdiction over cases arising under bankruptcy laws and cannot review the decisions of a bankruptcy court or any other court. 1d. at 5. Third, the government argues that this court lacks jurisdiction over plaintiff's claims under the Fifth and Fourteenth Amendments' Id. at 5-7. Defendant also claims that plaintiff has not identifred how the provisions in title 28 create jurisdiction. Id. at 5-6. Fifth, the government states that there exists no evidence of "contracts between Stanwvck and the United States." Id'. at 5-7.

2 Plaintiff purports to sue in his name and in the name of the United States, pursuant to Federal Rule of Bankruptcy Procedure (FRBP) 20100). While FRBP 2010(b) allows a proceeding to be brought "by any party in interest in the name of the United States," such a proceeding on bond is only permitted within bankruptcy and district courts. See 28 U.S.C. 5 1334(a); Capelouto u. United Std'tes,99 Fed. CI' 682, 691 (2011). Accordingly, the plaintiff in this matter is just Mr. Stanwyck and not "Steven Jay Stanwyck in the name ofthe United States." Alternatively, the government seeks to have this case dismissed under RCFC 12(b)(6) for failure to state a claim upon which relief can be granted. Def.'s Mot. at 7-8. The government argues that plaintiff has failed to provide facts supporting his allegations to elevate his claims above the speculative level .Id. at 8.

Plaintif{ after a series of extensions due to health issues, responded and asserts that under 28 U.S.C. $$ 581-589a, he had an express or implied contract with the Executive Office for U.S. Trustees. PI.'s Resp. at 3. Plaintiff cites several statutes to evidence the contractual obligations the EOUST allegedly owes him. Id. at 3-4. Mister Stanwyck clarifies that he is not bringing a claim under Title 11.3 Id. at 5. Plaintiff argues that the court has jurisdiction to hear his civil RICO claims, but seemingly concedes that his constitutional claims are beyond our jurisdiction. Id. at6. Plaintiff also requests a variety of additional equitable relief, moves for leave to amend his complaint, requests that a conference be held by telephone, and, alternatively, moves for the transfer of his case to a U.S. district coutt. Id. at 7-8.4

The governnent replied and argues that no contract existed between the government and plaintiff and that while plaintiff listed several statutes, neither his complaint nor his response articulated how those statutes created a duty of the government. Def.'s Reply at 1-3. Defendant aiso argues that the court does not have jurisdiction over any civil RICO claims plaintiff seeks to bring. Id. at 4-5. The government also opposes the variety of other reliefplaintiff sought. Id'at5-7.

II. DISCUSSION

A. Legal Standards Under RCFC 12(b)(1), this court must dismiss claims that do not fall within its subject-matter jurisdiction. When considering a motion to dismiss a case for lack of subject-matter jurisdiction, courts will accept as true all factual allegations the non-movant made and draw all reasonable inferences in the light most favorable to that party. See Scheuer u. Rhodes,416 U.S. 232,236 (1974); Hxton u. B&B Plastics, Inc.,29l F.3d 1324, 1326 (Fed. Cir. 2002) (requiring that on a motion to dismiss for Iack of subject-matter jurisdiction this court views "the alleged facts in the complaint as true, and if the facts reveal any reasonable basis upon which the non-

3 As a consequence, the Court need not address defendant's arguments regarding our jurisdiction over bankruptcy proceedings.

a The Court has determined that no hearing is necessary in this matter, and thus Mr. Stanwyck's request that a hearing be held by telephone is DENIED. -3- movant may prevail, dismissal is inappropriate"); CBY Design Builders u. United States,105 Fed. Cl. 3O3,325 (2012).

While a pro se plaintiff's frlings are to be liberally construed, see Erickson v. Pardus,55l U.S. 89, 94 (2007), this lenient standard cannot save claims which are outside this court's jurisdiction from being dismissed. See, e.9., Henhe u. United Stotes, 60 F.3d 795, 799 (Fed. Cir. 1995). The party invoking a court's jurisdiction bears the burden of establishing it and must ultimately do so by a preponderance of the evidence. See McNutt u. General Motors Acceptance Corp.,298 U.S. 178, 189 (1936); Rocouich v. United States,933 F.2d 991, 993 (Fed. Cir. 1991); Reynolds u. Army & Air Force Exch. Seru., 846 F.2d 746,748 (Fed. Cir. 1988).

B. Analysis Even under a most liberal interpretation of the complaint, it fails to embrace matters falling under this court's subject-matter jurisdiction. It appears that plaintiff misconstrues the jurisdiction Congress has given our court. Our general jurisdictional statute, 28 U.S.C. S 1491(a)(1), requires the presence of either a properly-pled contract with the federal government or the identification of a money- mandating law which was allegedly violated by the federal government.s See United States u. Mitchell, 463 U.S. 206,216-17 (1983). Neither predicate for our jurisdiction has been properly alleged by Mr. Stanwyck.

1. The Court Lachs Subject-Matter Jurisdiction ouer Plaintiff 's Purported Contract Claims

Plaintiff is alleging that the trustees in his three closed Chapter 7 bankruptcies never fiIed the bond required under 11 U.S.C. S 322G). Compl. at 2. Because the trustees were not bonded, Mr. Stanwyck contends they had neither power nor standing to oversee and close his bankruptcies. /d. As clarified in plaintiff's response, Mr. Stanwyck is alleging that he is suing based on a contract with the U.S. Department of Justice.G PI.'s Resp. at 5. Plaintiff identifies a variety

5 Plaintiff's complaint alleges improper action by "unnamed, non-government, co- conspirators, such as the fraudulently claiming power and standing 'chapter 7' trustees." Compl. at 5. Because the subject-matter jurisdiction ofthis court is limited to suits against the United States, claims based upon wrongdoing by private actors must be dismissed pursuant to RCFC 12(b)(1). Capelouto u. United States,99 Fed. CL 682,688 (2011) (citing United Statesu. Sherwood,312 U.S.584, 588 (1941) (noting our predecessor court was "without jurisdiction of any suit brought against private parties")). Any claim directed against individuals is dismissed. 6 The government correctly notes in its reply that plaintiff's complaint did not clearlv indicate such a claim. Def.'s Renlv at 1-2.

-4- of statutes, regulations, provisions, and handbooks that allegedly created duties that the government, including the EOUST, owed to him, which it did not fulfiIl. Id. at 3.7

Plaintiff has not identifred an express written contract he has entered into with the United States government. As a consequence, in order to properly base a cause of action on a contract with the United States government, plaintiff must allege (1) the mutual intent to contract; (2) an exchange of consideration; (3) an unambiguous offer and acceptance; and (4) the actual authority possessed by the government representative who made the contract. See Lewis u. United States,70 F.3d 597, 600 (Fed. Cir. 1995). When a plaintiff fails to substantially allege the existence of an implied-in-fact contract, our court lacks subject-matter jurisdiction over the case. Rich's Mushroom Seru., Inc. u. United States, S2L F.3d 1338, 1344 (Fed. Cir. 2008). Insubstantial allegations concerning the elements ofa contract do not establish a contract claim within our jurisdiction. See Twp. of Saddle Brook u. United States, 104 Fed. Cl. 101, 110 (2012) (citing Fisher u. United Slotes, 402 F.3d 1167,ll72 (Fed. Cir.2005)). Plaintiff has failed to substantially allege any ofthe four elements of an implied-in-fact contract with the government.

Mister Stanwyck's citations to various statutes and regulations are unavailing. The government is correct that there is a presumption that "a law rs not intended to create private contractual or vested rights but merely declares a policy to be pursued until the legislature shall ordain otherwise." See Nat'l R.R. Passenger Corp. u. Atchison Topeha & Santa Fe Ry. Co., 470 U.S. 45I, 465-66 (1985) (quoting Dodge u. Board of Education,302 U.S. 74,79 (1937)). Evaluating whether a plaintiff has overcome this presumption begins with examining the Ianguage ofthe statute. Id. Absent an adequate expression of actual intent, a court "wi1l not Iightly construe that which is undoubtedly a scheme ofpublic regulation to be, in addition, a private contract to which the state is a party." Id. at 466-67. "Tbe rule . . . that jurisdiction under the Tucker Act cannot be premised on the asserted violation of regulations that specifically do not authorize awards of money damages --- cannot be avoided simply by characterizing the applicable statute or regulation as creating an implied contract." Baker u. United States,50 Fed. Cl. 483, 489 (2001).

Plaintiff has not identified any language contained in any ofthe statutes, regulations, or other materials that he cites that even suggests that a contract is formed between the government and debtors in bankruptcy. Nor does a review of the statutes Iisted by Mr. Stanwyck, see Pl.'s Resp. at 3, reveal any language that supports the creation ofsuch a contract. Plaintiff's theory seems to be that the

? These include 28 U.S.C. SS 583, 586, 589a, 589b, 1737, and 1930. PI.'s Resp. at 3. The Court has reviewed these statutes and finds that none ofthem are monev- mandating. regulation of the conduct of bankruptcy trustees amounts to a contractual duty promised to debtors in return for the payment of bankruptcy fees. But there is no textual support for such a notion, as the cited statutes and regulations do not make reference to any contractual intentions and do not mandate payment of money for any purported violations.8 Plaintiff has failed to identifu a substantial basis to support any element of an implied-in-fact contract, much less all of them. Thus, the complaint does not contain a breach of contract claim against the United States falling within our subject-matter jurisdiction.

2. The Court Lachs Subject-Matter Jurisdiction ouer Ciuil RICO Claims or Criminal Charaes Plaintiff alleges that the United States and Chapter 7 trustees are jointly Iiable under the Racketeer Influenced and Corrupt Organizations Act (RICO), see Compl. at 5 (citing 18 U.S.C. SS 1961(1XC), 1961(4), 1961(5), and 1962(d)), and other provisions of the criminal code, id. (citing 18 U.S.C. SS 152, I53, 157(3), 1341, and 1503)), for harming Mr. Stanwyck in his business affairs. The government moved to dismiss this claim as our court cannot "adjudicate any claims whatsoever under the federal criminal code." Def.'s Mot. at 4 (citing Meschhow u. United States, 109 Fed. CI. 637, 646 (2013) (citing Joshua u. United States, 17 F.3d 378, 379 (Fed. Cir. 1994))).

In his response, plaintiff asserts that our court has jurisdiction over his civil RICO claims and argues that Joshua u. United States, a Federal Circuit decision relied upon by our court in the opinion cited by the government, Iacks any supporting authority for its proposition that our court cannot hear criminal matters. Pl.'s Resp. at 6. To be sure, the only discussion about criminal code matters in Joshua is contained in a quotation from the order issued by our court, see 17 F.3d at 379, and the corresponding holding ofthe Federal Circuit was merely that the "complaint did not identify any substantive right, founded upon either a money mandating statute or the Constitution, which might form the basis for his claim," id. at 380. But the principle that we do not exercise jurisdiction over criminal claims has been universally and thoroughly well-established by decisions of our court, never once disturbed on appeal. See, e.9., Allen u. United States,125 Fed. Cl. 138, 141 (2016); Emerson u. United States,123 Fed. Cl. 126,129-30 (2075); Houer u. United States, 113 Fed. CL.295,296 (2013); Cooper u. United States, 104 Fed. CI. 306, 312 (2072); Mendes u. United Srores, 88 Fed. CI. 759,762 (2009); Dumont u. United States, 85 Fed. Cl. 425,430 (2009), aff 'd., 3a5 F. App'x 586, 593 (Fed. Crr.

8 Indeed, it appears that the proper response to the failure ofa panel trustee or standing trustee to be properly bonded is that the United States trustee would suspend or terminate the assignment of future cases to the trustee. 28 C.F.R. S 58.6(aX9). Ifthat happens, the creditors may elect a person to fill that vacancy, and while that election is pending, the United States trustee may appoint an interim trustee. 11 U.S.C. $ 703(a)-@); 11 U.S.C. $ 1104(d). -6- 2009); McCullough u. United States,76 Fed. Cl. 1, 4 (2006); see also Kania u. United Srores, 650 F.2d264,268 (Cl. Ct. 1981) ("[T]he role of the judiciary in the high function of enforcing and policing the criminal law is assigned to the courts of general jurisdiction and not to this court."). This persuasive authority includes criminal claims arising under RICO. See Matthews u. United States,72 Fed. Cl. 274,282 (2006) ("Claims under . . . RICO are criminal claims. This court lacks jurisdiction to adjudicate criminal claims."); Hufford, u. United States,87 Fed. Cl. 696,702 (2O09): Dumon, 85 Fed. Cl. at 430.

Perhaps this point has been considered too obvious to explain. But Congress, through the Tucker Act, has not placed every violation of federal law within our jurisdiction. See 28 U.S.C. $ 1a91(a). As the Supreme Court has explained:

Not every claim invoking the Constitution, a federal statute, or a regulation is cognizable under the Tucker Act. The claim must be one for money damages against the United States, see United States u. King,395 U.S. 1, 2-3 (1969), and the claimant must demonstrate that the source of substantive law he relies upon "'can fairly be interpreted as mandating compensation by the Federal Government for the damage sustained."' United States u. Testan, 1424U.5.392, 400 (1976)1, quoting Eastport S.S. Corp. u. United States, 178 Ct. Cl. 599, 607,372 F.2d 1002, 1009 (1967).

Mitchell,463 U.S. at 216-17 (footnotes omitted). A money-mandating law or regulation is one "that either entitles the plaintiff to a payment of money from the government, or places a duty upon the government, the breach of which gives the plaintiff a money damages remedy." Contreras u. United States, 64 Fed. CL 583, 588 (2005), aff 'd, 163 F. App'x 938 (Fed. Cir. 2006). A further limitation on our jurisdiction is that the cases we have power to hear must be ones "not sounding in tort." 28 U.S.C. S 1491(a).

Thus, for a statutory violation to be the basis for a claim in our court, the statute must require that the United States government pay money to an individual for non-tortious conduct. The prosecution ofa federal crime satisfies none ofthese conditions. Violations do not result in money being paid by the government, but rather in fines being paid to the government. See, e.9.,18 U.S.C. 5$ 152, 153(a), 157,I34L,1503, 1963(a). The United States is not the defendant, but instead is the only party that may bring the action. See Coh u. Cosentino, 876 F.zd I,2 (1st Cir. 1989) ("Generally, a private citizen has no authority to initiate a federal criminal prosecution."); 28 U.S.C. S 54?(1) (requiring the U.S. Attorney to "prosecute for all offenses against the United States"). And criminal conduct, such as the fraud and conspiracy alleged by plaintiff, is tyaically tortious in nature. See Hornbach u. United States,56 Fed. CI. 359, 365 (2003), aff'd,9I F. App'x 679, 683 (Fed. Cir.

-7 - 2004); Cottrell u. United States, 42 Fed. CI. I44, 1.49 (1998).e Accordingly, criminal laws would not be the source of claims that may be brought in our court.

It is theoretically possible, one supposes, that Congress could place in Title 18 a civil law provision mandating money payments by the United States government to a party, specifying that a violation would not be considered a tort for purposes of the Tucker Act. Perhaps plaintiff suggests this is the case with his RICO claims, which he now recasts as civil claims. The problem is that, far from creating a money-mandate that is payable in our court, RICO instead provides for a civil action within the exclusive federal jurisdiction of U.S. district courts, and not this court. See 18 U.S.C. S 196a(c); Tempelman u. United Srores, No. 06-414T,2007 U.S. Claims LEXIS 452, at*Il-12 (Jan.9,2007;.to

Our court lacks jurisdiction over violations of criminal law, and plaintiff has not identified any civil statutes mandating the payment of money by the federal government. Accordingly, plaintiff's claims based on RICO and other criminal code provisions are not within our subject-matter jurisdiction.

3. The Constitutional Claims In the complaint, Mr. Stanwyck alleges that our jurisdiction over his claims may be based on the Fifth and Fourteenth Amendments. Compl. at 3. After the government, in moving to dismiss the case, correctly noted that the Federal Circuit has held that our court lacks jurisdiction over due process or equal protection claims brought under these provisions, see Def.'s Mot. at 5 (citing LeBlanc u. United States, 50 F.3d 1025, 1028 (Fed. Cir. 1995)), plaintiffsensibly recognized that these claims "are well objected to." Pl.'s Resp. at 6. It is clearly established that the Fifth Amendment's Due Process Clause (including any equal protection component) is not money-mandating. See Smith u. United States,709 F.3d 1114, 1116 (Fed. Cir. 2013;.tt And the Fourteenth Amendment is neither money-mandating nor a

e There are, ofcourse, the additional difficulties of construing federal officials' criminal offenses against the United States as somehow constituting authorized action that may be imputed to the United States, and implying a private cause of action in the face ofthe specified remedies of imprisonment and fine, see Alexander u. Sandoual,532 U.S. 275,290 (200I).

r0 An additional problem is the notion that the United States government can be civilly liablc for allegedly having committed a crime against itself. See WoIf u. United States, 127 F. App'x 499, 500-01 (Fed. Cir. 2005).

1r Only in the limited circumstances of an alleged illegal exaction may a due process violation come within the jurisdiction of this court. See Aerolineas Argentinas u. United States,77 F.3d 1564, 1573 (Fed. Cir. 1996); Coleman u. United Srores, No. 13-431C, 2074WL 949984, at "3 (Fed. Cl. Mar. 7,2Ol4). -d- Iimitation on the federal government. See id.: Coleman u. United,Stores, No. 13- 43IC, 2014 WL 949984, at *3 (Fed. CI. Mar. 7 , 2014); U.S. Const. amend. XIV, S 1.

Insofar as plaintiff is attempting to state a claim under the Takings Clause of the Fifth Amendment, the government accurately identified Federal Circuit precedent that places scrutiny ofthe actions ofbankruptcy courts beyond our jurisdiction. Def.'s Mot. at 6 (citing.4ll ustiarte u. United States, 256 F.3d 1349, 1351-52 (Fed. Cir. 2001)). Because plaintiff maintains that the actions ofthe relevant individuals were illegal, even criminal, the jurisdictional requirement that, to be the basis of a takings claim, these actions must be authorized and not ultra uires, would also require their dismissal. See id. at 7 (citing Tabb Lahes, Ltd. u. United States, 10 F.3d 796,802 (Fed. Cir. 1993)); see also Bailey u. United States,78 Fed. Cl. 239, 253-56 (2007) (explaining the doctrine). On this point, Mr. Stanwyck concedes that he "has not ple[d] that the taking was valid," but adds that "after discovery, he may be able to properly plead this claim." PI.'s Resp. at 6. But there will be no discovery, as plaintiff has not alleged a claim that comes within our court's subject-matter jurisdiction.

4. Other Motions Plaintiff also requests leave to amend his complaint based on his health problems that had already resulted in several extensions ofthe time in which to frle his response. Pl.'s Resp. at 8. Mister Stanwyck, however, does not identifu any additional factual allegations or legal authority that would place his matter within our court's jurisdiction. Even though amendments of complaints are "freely'' permitted "when justice so requires," RCFC 15(a)(2), plaintiff has given the Court no reason to believe that his contemplated amendments would not be futile. Thus, plaintiff's motion to amend his complaint is DENIED. See Foman u. Dauis,371 u.s. 178, r82 (1962). Mister Stanwyck also requests a 28 U.S.C. $ 1631 transfer of his case to the United States District Court for the Central District of California. PI.'s Resp. at 8. Under this provision, should the "court find[] that there is a want ofjurisdiction, the court shall, if it is in the interest ofjustice, transfer such action. . . to any other such court in which the action . . . could have been brought." 28 U.S.C. $ 1631. The Court does not find that plaintiff could have brought his claims in the Central District of California. Plaintiff has failed to allege a contract claim. Plaintiff cannot prosecute his claims of criminal law violations, See 28 U.S.C. S 547. And both the district court and the Ninth Circuit have ruled that civil RICO claims cannot be brought against the government. See Pedrina u. Chun,97 F.3d 1296, 1300 (9th Cir. L996); Graf v. Peoples, No. CV 07-473I-VAP (E), 2008 WL 4189657, at *4 (C.D. Cal., Sept. 4, 2008). Thus, plaintiff's motion to transfer the case is DENIED. See Spencer u, United States,98 Fed. Cl. 349, 359 (2011).

-9- III. CONCLUSION

For the foregoing reasons, the Court GRANTS defendant's motion to diemies this case for lack of subject-matter jurisdiction pursuant to RCFC f2O)(1). The Clerk shall close the case.

IT IS SO ORDERED.

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