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Bloch v. Executive Office of The President

United States District Court, E.D. Virginia, Alexandria Division

February 9, 2016

SCOTT J. BLOCH, Plaintiff,
v.
EXECUTIVE OFFICE OF THE PRESIDENT, et al., Defendants.

MEMORANDUM OPINION

T. S. ELLIS, III, District Judge.

Plaintiff Scott J. Bloch is the former United States Special Counsel, the head of the United States Office of Special Counsel ("OSC"), an independent agency of the federal government responsible for protecting federal employees from prohibited personnel policies such as reprisal for whistleblowing.[1] In his fifteen-count Amended Complaint, plaintiff alleges that he was removed from office as Special Counsel in violation of constitutional and statutory law as the result of a wide-ranging conspiracy by various federal agencies and officials. The Amended Complaint further alleges (i) that this conspiracy was unlawful under RICO[2] and 42 U.S.C. § 1985(1)[3] and (ii) that the conspiracy ultimately led plaintiff to suffer violations of his rights under the Privacy Act, [4] the Constitution, and various common law tort duties. The named defendants are (i) James Byrne, in his individual and official capacity, a former Deputy Special Counsel at the OSC, (ii) Patrick McFarland, in his individual and official capacity, the U.S. Inspector General, (iii) Jill Maroney, in her individual and official capacity, a Special Agent in charge of an investigation into alleged wrongdoing by plaintiff during the course of his service as Special Counsel, (iv) the Executive Office of the President ("EOP"), (v) the Office of Personnel Management ("OPM"), and (vi) the OSC.

The fifteen-count Amended Complaint asserts the following claims:

(1) Count I: Deprivation of property without due process of law in violation of the Fifth Amendment against the EOP, the OPM, and the OSC;
(2) Count II: Violation of 5 U.S.C. § 1211, which confers a five-year term in office with removal only for cause on the Special Counsel, against all defendants;
(3) Count III: Violation of the separation of powers by the EOP;
(4) Count IV: Violation of the Privacy Act against all defendants;
(5) Count V: Violation of RICO against all defendants;
(6) Count VI: Conspiracy to interfere with the duties of plaintiff's federal office in violation of 42 U.S.C. § 1985 against all defendants;
(7) Count VII: Violation of the First, Fourth, and Fifth Amendments against all defendants;
(8) Count VIII: Civil conspiracy to interfere with contract and property rights, prospective business relations, and to invade privacy against all defendants;
(9) Count IX: Defamation per se against all defendants;
(10) Count X: Whistleblower retaliation against defendants EOP and Byrne;
(11) Count XI: Breach of fiduciary duty against the OSC and Byrne;
(12) Count XII: Intentional and negligent misrepresentation against all defendants;
(13) Count XIII: Civil conspiracy and breach of fiduciary duty against defendants Byrne, McFarland, the EOP, the OPM, and the OSC;
(14) Count XIV: Civil conspiracy and intentional and negligent infliction of mental and emotional distress against Byrne, McFarland, and Maroney; and
(15) Count XV: Injunctive relief against all defendants.

Plaintiff seeks damages, a declaration that defendants acted unlawfully, and an injunction preventing defendants from further unlawful activity including prohibiting any further investigations or press releases concerning plaintiff, his actions while in office, or his removal.

Defendants have moved to dismiss the Amended Complaint for lack of jurisdiction and for failure to state a claim under Rules 12(b)(1) and 12(b)(6), Fed.R.Civ.P. Plaintiff, in turn, filed a memorandum in opposition to defendants' motion to dismiss as well as a motion to transfer venue to the United States District Court for the District of Columbia, where a related lawsuit has been pending since 2009, and a motion for leave to amend his complaint in order to add three new counts. The motions were fully briefed and argued orally. By Order dated January 19, 2016, plaintiff's motion to transfer venue was denied.[5] This Memorandum Opinion addresses defendants' motion to dismiss and plaintiff's motion to amend.

I.

The facts pertinent to this action may be succinctly stated.[6] On December 9, 2003, Congress confirmed President Bush's nomination of plaintiff as Special Counsel, the head of the OSC, for a statutory five-year term in office. Plaintiff assumed office on January 5, 2004. Shortly after assuming office, plaintiff enacted a series of controversial reforms. For one, plaintiff reversed his predecessor's conclusion that 5 U.S.C. § 2302 provides broad protection for federal employees against discrimination on the basis of sexual orientation. For another, plaintiff reorganized the OSC, including by transferring twelve employees from headquarters to various field offices. These changes prompted the filing of formal complaints against plaintiff, accusing him of committing prohibited personnel practices and other wrongs. Ordinarily, such complaints would fall within the OSC's jurisdiction, so plaintiff recused himself from investigating the matter. Ultimately, the OSC authorized the OPM, through Inspector General Patrick McFarland's office, to conduct an investigation into the complaints on the OSC's behalf. Accordingly, at the direction of Inspector General McFarland, in March 2006 defendant Special Agent Maroney conducted an investigation into the allegations against plaintiff.

Over the course of the OPM investigation, the OPM discovered that plaintiff had hired a private computer firm to perform a "seven-level wipe" of his OSC computer and the OSC computers of two other OSC political appointees.[7] This wipe made it virtually impossible for anyone to recover deleted data from the computers. Plaintiff alleges that the OPM's records of this investigation were leaked to the media, which in turn prompted an investigation by the United States House of Representatives Committee on Oversight and Government Reform. The OPM investigation also led to a criminal investigation, which included the execution of a search warrant at plaintiff's home and OSC office in May 2008.

In July 2008, defendant Byrne, who had been serving as Deputy Special Counsel, resigned from his position via a letter in which he severely criticized plaintiff's conduct in office. Plaintiff alleges that in addition to being part of the conspiracy to oust plaintiff from the OSC, Byrne also conspired to obtain an appointment as Special Counsel after resigning. Thereafter, in August 2008, the White House Counsel ("WHC") sent plaintiff a letter informing plaintiff that WHC was prepared to recommend that President Bush remove plaintiff from office for "inefficiency" and "neglect of duty, " as permitted under federal law. See 5 U.S.C. § 1211(b). Plaintiff was given five business days to respond to his proposed removal, and he submitted a written response, through private counsel, on August 8, 2008. A few months later, in October 2008, WHC informed plaintiff that he could accept administrative leave for the remainder of his term as Special Counsel or be removed from office. Plaintiff, under threat of removal, accepted administrative leave.

In February 2013, plaintiff pled guilty to willful depredation of government property in the United States District Court for the District of Columbia for his involvement in the wiping of the OSC computers. Later that same year, in December, the OPM issued a final report on its investigation into plaintiff, concluding, inter alia, that there was evidence that plaintiff committed ...


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