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Mykal S. Ryan v. David R. Ruby

October 27, 2011


The opinion of the court was delivered by: Irma E. Gonzalez, Chief Judge United States District Court


This is an action alleging defamation and improper disclosure of private information. Currently before the Court is Defendant's Motion to Dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. Having considered the parties' arguments, and for the reasons set forth below, the Court DENIES the motion WITHOUT PREJUDICE. [Doc No. 2.]


Defendant David R. Ruby is the Chapter 7 bankruptcy trustee for Plaintiff Mykal S. Ryan's bankruptcy proceeding, which has been pending in the Eastern District of Virginia since July 16, 2008. (Defendant's Request for Judicial Notice ("RJN"), Ex. 1 [Doc. No. 5].)

Plaintiff commenced the instant action against Defendant on July 14, 2011. [Doc. No. 1.] In his complaint, Plaintiff alleges Defendant violated and continues to violate California Civil Code § 46 by making numerous defamatory statements. (Compl. ¶ 1.) According to Plaintiff, Defendant told others that Plaintiff stole more than a million dollars from Plaintiff's nephew's trust, that he stole money from his mother, that he stole money and property from his nephew, and that he stole property in his house. (Id.) Plaintiff further alleges that Defendant violated Plaintiff's privacy rights under the California Constitution and the Federal Privacy Act by informing others of Plaintiff's Post-Traumatic Stress Disorder ("PTSD") disability, without authorization, and by making materially false statements that Plaintiff is mentally disturbed and mentally deficient. (Id. ¶¶ 3, 5-6.) According to Plaintiff, these actions also violate the Due Process Clause of the Fourteenth Amendment because they interfered with Plaintiff's right to obtain employment. (Id. ¶ 3.) Plaintiff alleges that as a result of Defendant's actions, Plaintiff lost his employment as an aerospace engineer as well as his Top Secret security clearance. (Id. ¶¶ 3, 16-17.) Finally, Plaintiff alleges Defendant's actions constitute disability discrimination in violation of the Americans with Disability Act ("ADA"). (Id. ¶ 7.) Plaintiff lists forty four individuals to whom Defendant allegedly made the above defamatory statements and improper disclosures. (Id. ¶ 9.)

Defendant filed the present motion on September 15, 2011. Plaintiff filed a late opposition on October 13, 2011.*fn1 Defendant filed a reply on October 17, 2011. The Court finds the motion suitable for disposition without oral argument pursuant to the Civil Local Rule 7.1(d)(1).


A motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure tests the legal sufficiency of the pleadings. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "The plausibility standard is not akin to a 'probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully. Where a complaint pleads facts that are 'merely consistent with' a defendant's liability, it 'stops short of the line between possibility and plausibility of "entitlement to relief."'" Id. (internal citation omitted). "Dismissal can be based on the lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory." Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990).

In ruling on a motion to dismiss, the court must "accept all factual allegations in the complaint as true and construe the pleadings in the light most favorable to the nonmoving party." Knievel v. ESPN, 393 F.3d 1068, 1072 (9th Cir. 2005). The court, however, need not accept "legal conclusions" as true. Iqbal, 129 S. Ct. at 1949. Thus, "a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555. It is also improper for the court to assume that plaintiff "can prove facts that it has not alleged." Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 526 (1983). On the other hand, "[w]hen there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief." Iqbal, 129 S. Ct. at 1950.


In this case, Defendant contends the Court should dismiss all of Plaintiff's claims because the allegedly defamatory statements and disclosures were made in Defendant's official capacity.

I. The Barton doctrine

First, Defendant argues Plaintiff's complaint should be dismissed because it violates the Barton doctrine.*fn2 Under the Barton doctrine, "a party must first obtain leave of the bankruptcy court before it initiates an action in another forum against a bankruptcy trustee or other officer appointed by the bankruptcy court for acts done in the officer's official capacity." In re Crown Vantage, Inc., 421 F.3d 963, 970 (9th Cir. 2005) (citing cases). Part of the rationale underlying the Barton doctrine is that the court appointing the receiver has in rem subject matter jurisdiction over the receivership property. Id. at 970. Accordingly, allowing the unauthorized suit to proceed "would [be] an usurpation of the powers and duties which belong[] exclusively to another court." Barton, 104 U.S. at 136. The Barton doctrine applies in bankruptcy to the same extent as in other proceedings involving receivers. See In re Crown Vantage, 421 F.3d at 971.

Defendant, however, failed to show that the actions challenged in this case were done in Defendant's "official capacity." See id. at 970. Under Rule 12(b)(6), "[t]he defendant bears the burden of showing no claim has been stated." Gould Elecs. Inc. v. United States, 220 F.3d 169, 178 (3d Cir. 2000). In this case, Defendant merely alleges in a conclusory manner that "[a]s set forth in defendant's disclosure to the [United States Bankruptcy Court ("USBC")] for the Eastern District of Virginia, defendant's only actions concerning plaintiff herein have been taken in defendant's official capacity as Chapter 7 trustee." (Mem. of P.&A. ISO Def. Motion to Dismiss, at 1 [Doc. No. 2-1].) In doing so, Defendant cites to his disclosure to the USBC for the Eastern District of Virginia, which states: "The Trustee represents that he has taken no action whatsoever relating to the Debtor and/or this bankruptcy case other than in an official capacity as Chapter 7 trustee and that he has not acted outside the scope of his authority in any respect." (RJN, Ex. 2,ΒΆ 6.) Notably, Defendant fails to cite to any document that would corroborate this ...

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