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Guillermo Lizarraga v. Kathryn K. Maggi

July 6, 2011


The opinion of the court was delivered by: Hon. Dana M. SABRAWUnited States District Judge


Pending before the Court is Defendants' motion to dismiss Plaintiff's Complaint as to the Individual Defendants pursuant to Federal Rule of Civil Procedure 12(b)(6) and as to the United States pursuant to Federal Rule of Civil Procedure 12(b)(1). For the following reasons, the motion to dismiss is granted.


This matter arises out of the decision by United States Customs and Border Protection ("CBP")*fn1 to deactivate Plaintiff Guillermo Lizarraga's electronic entry filer code. Plaintiff is a customs broker in Otay Mesa, California and licensed by CBP to conduct customs activities in San Diego. (Compl. ¶ 2.) In the latter part of October 2001, Plaintiff met with customs officials, including Defendant Kathryn Maggi ("Maggi")*fn2 , to discuss the illegal drugs found in one of Plaintiff's import shipments.(Id. at ¶¶ 8-10.) Plaintiff was accused of aiding and abetting in the shipment of the illegal drugs, and from January 8, 2002 until May 24, 2002, his business was audited by CBP. (Id. at ¶ 12.) Plaintiff alleges that during the audit, Maggi detained 27 of Plaintiff's clients' import shipments and, without legal cause, ordered their return to Mexico, threatening the existence of Plaintiff's business. (Id. at ¶¶ 13-14.) Based on the findings of the audit, CBP assessed a $30,000 penalty against Plaintiff for infractions of 19 C.F.R. § 1641, the most serious of which was the conducting of customs business as a corporation without a corporate license and permit from CBP. (Id. at ¶ 19.) CBP mitigated the penalty to $16,750, which Plaintiff paid on June 30, 2006. (Id. at ¶ 20.)

On May 30, 2007, Maggi inspected Plaintiff's business to determine if Plaintiff had corrected the infractions found in the foregoing audit. (Id. at ¶ 21.) Plaintiff believed Maggi's audit report contained unfounded charges and responded to them in a letter dated October 31, 2007. (Id. at ¶ 22.) CBP revoked Plaintiff's CTPAT*fn3 privileges on or about April 2008, and subsequently revoked Plaintiff's SENTRI*fn4 privileges on July 17, 2008. (Id. at ¶ 23.) Although Plaintiff requested the reasons for cancellation of these privileges, CBP refused to provide them. (Id. at ¶ 26.) Plaintiff believes that Defendants Maggi and Rosa Hernandez ("Hernandez")*fn5 initiated and requested the termination of these privileges solely to unjustifiably injure him. (Id. at ¶ 27.) From October 31, 2007, until early October 2008, Plaintiff sought to meet with Maggi and Hernandez in order to make an oral presentation concerning the May 30, 2007 audit. (Id. at ¶¶ 29, 30.) However, when Plaintiff arrived at the meeting in early October, 2008 with his attorney, Hernandez immediately cancelled the meeting. (Id. at ¶ 30.)

Plaintiff alleges that at the time of the scheduled meeting, Maggi and Hernandez had already conspired to suspend Plaintiff's filer code without due process. (Id. at ¶ 31.) Further, Plaintiff alleges that on an unknown date in October 2008, Hernandez requested that Defendant Gurdit Dhillon ("Dhillon")*fn6 approve her request that Plaintiff's filer code be revoked or suspended without due process, and that on October 28, 2008, Dhillon requested the same from Defendant Daniel Baldwin ("Baldwin", and Defendants Maggi, Hernandez, Dhillon, and Baldwin, collectively, the "Individual Defendants").*fn7 (Id. at ¶¶ 32-33.) Plaintiff alleges that in order to justify their request, Maggi and Hernandez asserted malicious and false accusations that Plaintiff was a drug smuggler, and that Dhillon and Baldwin made no independent inquiries of the facts supporting the request presented to each of them. (Id. at ¶¶ 34, 36, 43-44.) Finally, by a letter dated November 4, 2008, Baldwin approved Dhillon's request, and in a letter from Hernandez to Plaintiff dated November 10, 2008, Plaintiff was informed that his filer code would be deactivated on November 14, 2008 without further administrative proceedings. (Id. at ¶¶ 35, 39.)

On November 14, 2008, Plaintiff filed an action in the United States Court of International Trade ("CIT") seeking a restraining order to prevent the suspension of his filer code. (Id. at ¶ 40.) The CIT granted the restraining order, and on October 4, 2010, the Court accepted CBP's April 23, 2010 Confession of Judgment, which ended the litigation. (Id. at ¶¶ 41-42.)

Plaintiff claims that his filer code is a valuable property right, and that Maggi and Hernandez knew that suspending Plaintiff's filer code was equivalent to terminating his business. (Id. at ¶¶ 31,

56.) In support of this claim, Plaintiff notes two previous instances in which Maggi and another Port Director suspended the filer code of other Customs brokers, which led to the closing of those businesses. (Id. at ¶¶ 37-38.)

Plaintiff alleges that Maggi discriminated against him because of Plaintiff's Mexican ethnicity, in violation of the Fifth Amendment. (Id. at ¶ 48.) He claims that there were other Customs brokers who conducted Customs business without permission from CBP, but did not face similar penalties as those faced by Plaintiff. (Id. at ¶¶ 45, 46.) Plaintiff further alleges that the suspension of his filer code without a hearing or due process, the failure by Dhillon and Baldwin to make independent investigations of the accusations against Plaintiff, and the alleged approval of the acts by CBP as the employer of the Individual Defendants all violated the Fifth Amendment. (Id. at ¶¶ 52, 57-59.) As a result of these allegedly unlawful acts of the Defendants, Plaintiff claims: that his customs business suffered serious financial losses, compelling him to lay off half of his staff and close an office; that his reputation in the customs brokerage and import community suffered setbacks; and that he and his family suffered depression, physical ailments, and loss of income. (Id. at ¶¶ 61-64.)

Plaintiff filed a Complaint in this action on November 8, 2010. (Doc. 1.) In the Complaint, Plaintiff claims Fifth Amendment due process violations. He brings a Bivens claim against the four Individual Defendants, and a claim against the United States under the Federal Tort Claims Act ("FTCA"), 28 U.S.C. §§ 1346(b), 2401(b), 2671-80. On March 31, 2011, Defendants filed the instant motion to dismiss Plaintiff's Complaint. (Doc. 9.) Plaintiff filed an opposition to the motion to dismiss on May 12, 2011 (Doc. 11), and Defendants filed a reply on May 20, 2011. (Doc. 12.)


A party may move to dismiss a claim under Rule 12(b)(6) if the claimant fails to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). The Federal Rules require a pleading to include a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). The Supreme Court, however, recently established a more stringent standard of review for pleadings in the context of 12(b)(6) motions to dismiss. See Ashcroft v. Iqbal, ___ U.S. ___, 129 S. Ct. 1937 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007). To survive a motion to dismiss under this new standard, "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Iqbal, 129 S.Ct. at 1949 (quoting Twombly, 550 U.S. at 570). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (citing Twombly, 550 U.S. at 556). "Determining whether a complaint states a plausible claim for relief will . . . be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 1950 (citing Iqbal v. Hasty, 490 F.3d 143, 157-58 (2d Cir. 2007)). The reviewing court must therefore "identify the allegations in the complaint that are not entitled to the assumption of truth" and evaluate "the factual allegations in [the] complaint to determine if they plausibly suggest an entitlement to relief." Id. at 1951.

Rule 12(b)(1) allows a party to move to dismiss a claim for lack of subject-matter jurisdiction. Fed. R. Civ. P. 12(b)(1). A pleading must contain "a short and plain statement of the grounds upon which the court's jurisdiction depends." Fed. R. Civ. P. 8(a)(1). Because "Federal Courts are courts of limited jurisdiction . . . having only the authority to decide cases that the Constitution and Congress have empowered them to resolve," Ohio ex rel. Skaggs v. Brunner, 549 F.3d 468, 474 (6th Cir. 2008), a failure to plead a basis for federal jurisdiction is fatal to an action. A court must dismiss an action if it determines, at any time, that it lacks such jurisdiction. Fed. R. Civ. P. ...

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