Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_15-cv-02194/USCOURTS-cand-5_15-cv-02194-1/pdf.json

Nature of Suit Code: 360
Nature of Suit: Other Personal Injury
Cause of Action: 28:1331 Fed. Question: Personal Injury

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Case No. 5:15-cv-02194-PSG

ORDER GRANTING MOTION TO DISMISS

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

MARK FEATHERS,

Plaintiff,

v.

UNITED STATES OF AMERICA,

Defendant.

Case No. 5:15-cv-02194-PSG

ORDER GRANTING MOTION TO 

DISMISS

(Re: Docket No. 37)

Plaintiff Mark Feathers, individually and on behalf of all others similarly situated, alleges 

in his Amended Complaint that Defendant the United States of America violated his Fourth, Fifth, 

and Fourteenth Amendment rights.1 The United States moves to dismiss for lack of subject matter 

jurisdiction.2 Because sovereign immunity bars Feathers’ claims, and because Feathers has not 

suggested he can avoid this roadblock with any further amendment, the United States’ motion to 

dismiss is GRANTED without leave to amend. 

I.

Feathers’ claims arise from the Securities and Exchange Commission’s actions in a civil 

enforcement case against him, SEC v. SBCC.

3

 He alleges that the SEC violated the Generally 

Accepted Accounting Principles and Generally Accepted Audit Standards in that case, and then 

 

1

See Docket No. 31.

2

See Docket No. 37.

3

See Securities and Exchange Commission v. Small Business Capital

Corporation, Case No. 12-cv-03237-EJD, 2013 WL 4455850 (N.D. Cal. Aug. 16, 2013).

Case 5:15-cv-02194-PSG Document 47 Filed 12/01/15 Page 1 of 7
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Case No. 5:15-cv-02194-PSG

ORDER GRANTING MOTION TO DISMISS

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based on their accounting error, improperly seized his assets in violation of the Fourth and Fifth

Amendments.4 He also alleges a violation of the Fourteenth Amendment.5 For these 

constitutional torts, he seeks damages.6

This is not Feathers’ first time raising claims based on the SEC’s accounting in SEC v. 

SBCC. In his initial complaint, Feathers argued that the SEC’s accountant had “deliberately, 

fraudulently, and incorrectly” miscalculated certain numbers to support the claim that Feathers and 

the SBCC had made Ponzi-like payments to investors.7 Although the court granted summary 

judgment for the SEC in SEC v. SBCC without reference to this accounting calculation,8this error 

formed the basis for Feathers’ request for relief under the Federal Tort Claims Act for professional 

negligence by the SEC’s accountant, negligence by the SEC, a failure to disclose, supervisory 

liability for constitutional violations, false light, and negligent infliction of emotional distress.9 He 

also sought relief under the Civil Rights Act10 and the Privacy Act.11 

The court granted the United States’ motion to dismiss all claims under Fed. R. Civ. P. 

12(b)(1) and 12(b)(6).12 The court held that it lacked subject matter jurisdiction over the FTCA 

claims due to the FTCA’s discretionary function exemption,13 sovereign immunity barred the 

 

4

See Docket No. 31 at ¶¶ 21, 38, 42-44, 92, 96, 101.

5

See id. at ¶¶ 2, 21, 38, 96, 101.

6

See Docket No. 31 at ¶ 86, p. 20.

7

See Docket No. 1 at 4-5. 

8

See Docket No. 18 at 6.

9

See Docket No. 1.

10 See 42 U.S.C. § 1983.

11 See 5 U.S.C. § 522a. See Docket No. 1.

12 See Docket No. 30.

13 See id. at 6-7.

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Case No. 5:15-cv-02194-PSG

ORDER GRANTING MOTION TO DISMISS

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Section 1983 claim,14 and Feathers’ allegations failed to state a claim upon which relief could be 

granted for the Privacy Act claim.15 In light of Feathers’ pro se status, and because he had not 

previously received leave to amend, the court granted leave to amend.16 

Feathers availed himself of that leave and now alleges claims for violations of his Fourth, 

Fifth, and Fourteenth Amendment rights.17 However, although Feathers’ amended complaint is 

dressed in new causes of action, largely the same body of facts lies under those new clothes. The 

Fourth and Fifth Amendment claims are based on the SEC’s calculation of the total amount of 

distributions in Feathers’ business,18 which is the same accounting calculation that Feathers’ initial 

FTCA, Section 1983, and Privacy Act claims were based on. The Fourteenth Amendment claim is 

based on the allegation that the SEC discriminated against Feathers by treating his firm differently 

from the other firms that they regulate.19 Feathers alleges that the SEC failed to commit adequate 

resources to investigating his firm, which resulted in the accounting error, and that they did not 

engage in meaningful discussion with his firm, as he believes they do with other firms.

20

 The 

United States moves to dismiss with prejudice under Rule 12(b)(1).

21

II.

This court has jurisdiction under 28 U.S.C. § 1331. The parties further consented to the 

jurisdiction of the undersigned magistrate judge under 28 U.S.C. § 636(c) and Fed. R. Civ. P. 

 

14 See id. at 7-8.

15 See id. at 8.

16 See id.

17 See Docket No. 31 at ¶¶ 92, 96, 101

18 See id. at 1, ¶¶ 1-2, 12.

19 See id. at ¶¶ 3, 13.

20 See id. at ¶¶ 3, 13.

21 See Docket No. 37.

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Case No. 5:15-cv-02194-PSG

ORDER GRANTING MOTION TO DISMISS

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72(a).22

Rule 12(b)(1) allows defendants to move to dismiss for lack of subject matter 

jurisdiction.23 A 12(b)(1) challenge may attack either the sufficiency of the pleadings or the 

existence of jurisdiction as factual matter.24 Where a defendant presents a factual challenge to 

subject matter jurisdiction, “no presumptive truthfulness attaches to Plaintiff’s allegations, and the 

existence of disputed material facts will not preclude the trial court from evaluating for itself the 

merits of the jurisdictional claims.”25 In addition, a plaintiff has the burden of proving that 

jurisdiction exists.26

“Absent a waiver, sovereign immunity shields the Federal Government and its agencies 

from suit. Sovereign immunity is jurisdictional in nature.”

27

 “It is axiomatic that the United 

States may not be sued without its consent and that the existence of consent is a prerequisite for 

jurisdiction.”

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 “The SEC is specifically immune from suit except in certain well-defined 

circumstances,”

29 and “may be sued only in the limited circumstances where Congress has 

expressly waived sovereign immunity.”30 “The party who sues the United States bears the burden 

of pointing to such an unequivocal waiver of immunity.”31 

 

22 See Docket Nos. 11, 21.

23 See Fed. R. Civ. P. 12(b)(1).

24 See Thornhill Pub. Co. v. Gen. Tel. & Elec. Corp., 594 F.2d 730, 733 (9th Cir. 1979).

25 Id.

26 See id.

27 See F.D.I.C. v. Meyer, 510 U.S. 471, 475 (1994) (internal citations omitted).

28 See United States v. Mitchell, 463 U.S. 206, 212 (1983).

29 Standifer v. S.E.C., 542 F. Supp. 2d 1312, 1316 (N.D. Ga. 2008) (citing SEC v. Independence 

Drilling Corp., 595 F.2d 1006, 1008 (5th Cir. 1979); 15 U.S.C §§ 77v(a), 78aa).

30 Standifer, 542 F. Supp. 2d at 1316 (citing United States v. Dalm, 494 U.S. 596, 608 (1990)).

31 Holloman v. Watt, 708 F.2d 1399, 1401 (9th Cir. 1983).

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ORDER GRANTING MOTION TO DISMISS

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III.

Applying the standards as set forth above, the court holds that sovereign immunity bars 

Feathers’ claims, and the court therefore lacks subject matter jurisdiction. The Amended 

Complaint pleads claims directly under the Fourth, Fifth, and Fourteenth Amendments.32 The 

Amended Complaint does not plead causes of action arising under any statute or, more critically, 

any statutory waiver of sovereign immunity for the SEC. Nonetheless, there are three potential 

avenues for Feathers’ suit: the Administrative Procedures Act,33 the FTCA,

34 and a Bivens action. 

Feathers’ claims do not satisfy the requirements of any of these waivers. 

First, the APA waives sovereign immunity only for claims “seeking relief other than 

money damages.”

35

 Because Feathers seeks only damages,36 his claim does not fall within the 

APA’s waiver. Moreover, the APA provides for judicial review only of an “[a]gency action made 

reviewable by statute and [a] final agency action for which there is no other adequate remedy in a 

court.”37 Feathers has not identified any statute that makes the SEC’s actions in SEC v. SBCC

reviewable by the court, and has not alleged a final agency action of the SEC that harmed him and 

for which he has no other adequate remedy. In other words, even if Feathers were granted leave to 

amend, he could not come within the APA’s sovereign immunity waiver by requesting injunctive 

relief as well as damages.

Second, the FTCA provides a limited waiver of sovereign immunity for a federal agency 

employee’s tortious acts.38 The waiver applies only if such torts committed in the employ of a 

 

32 See Docket No. 31 at ¶¶ 38, 101.

33 See 4 U.S.C. §§ 701 et seq.

34 See 28 U.S.C. §§ 2671 et seq.

35 5 U.S.C. § 702.

36 See Docket No. 31 at 20.

37 5 U.S.C. § 704.

38 See 28 U.S.C. § 1346(b).

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Case No. 5:15-cv-02194-PSG

ORDER GRANTING MOTION TO DISMISS

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private person would give rise to liability under state law.39 “Constitutional torts are, by 

definition, founded on federal, not state law.”40 Since Feathers alleges claims only under the 

United States Constitution, the FTCA’s waiver of sovereign immunity does not apply.

Third, a Bivens action provides an avenue for a plaintiff to seek remedies from a federal 

agent that commits a constitutional wrong.41 However, a plaintiff cannot bring a Bivens action 

against the agency that employs the agent.42 Feathers has not named the SEC’s accountant as a 

defendant in this case. Moreover, amending his complaint to name the accountant would not 

allow Feathers to successfully present a Bivens claim, because the court previously found that

Feathers’ injury was caused by the SEC’s decision to bring a civil enforcement action against him, 

not by the accountant’s alleged error.43

IV.

Because sovereign immunity bars all of Feathers’ claims, the court lacks subject matter 

jurisdiction to adjudicate his claims and GRANTS the United States’ motion to dismiss. Because 

Feathers has previously received leave to amend,44 and because he has not suggested that further 

leave to amend would solve the difficulty of sovereign immunity, further leave to amend is 

DENIED.45

 

39 See id.; see also Pereira v. U.S. Postal Service, 964 F.2d 873 (9th Cir. 1992).

40 Pereira, 964 F.2d at 876.

41 See Bivens v. Six Unknown Named Agents of the Fed. Bureau of Narcotics, 403 U.S. 388 

(1971).

42 See Meyer, 510 U.S. at 484-86.

43 See Docket No. 30 at 6-7.

44 See Docket No. 30 at 8.

45 See Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003) (quoting Foman v.

Davis, 371 U.S. 178, 182 (1962)) (articulating standard for granting leave to amend).

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Case No. 5:15-cv-02194-PSG

ORDER GRANTING MOTION TO DISMISS

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SO ORDERED.

Dated: December 1, 2015

_________________________________

PAUL S. GREWAL

United States Magistrate Judge

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