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Stephen Echols v. Morpho Detection

April 11, 2013


The opinion of the court was delivered by: Claudia Wilken United States District Judge


Plaintiff Stephen Echols moves for leave to file a second 13 amended complaint (2AC). Defendants United States Department of 14 Homeland Security (DHS), Transportation Security Agency (TSA) and 15 Secretary of Homeland Security Janet Napolitano (collectively, 16 Federal Defendants) oppose Plaintiff's motion.

Having considered 17 For the the arguments set forth by the parties in their papers, the Court 18 DENIES the motion. 19


According to Plaintiff's first amended complaint (1AC), he 21 was formerly employed by Defendant Morpho Detection, Inc. as a 22 field service technician at the Los Angeles International Airport, 23 where Morpho contracts with DHS and TSA to provide airport 24 security. 1AC ¶¶ 8-9. After having passed all previous 25 government airport and company background checks that he 26 underwent, Plaintiff received a letter from TSA dated March 9, 27 2010, stating that he was "ineligible to work on any TSA contract 28 based on" various issues identified during a background check 2 process, including that he had purportedly engaged in criminal 3 conduct and failed to disclose criminal charges filed against him. 4

Id. at ¶¶ 8-11. Plaintiff alleged that he was not the person who 5 committed some of the crimes, that he "was the victim of identity 6 theft" and that the remaining information was inaccurate because 7 the case against him was dismissed. Id. at ¶ 13. He further 8 alleged that he communicated with TSA and Morpho about the errors 9 and that, despite repeated requests, TSA failed to provide 10 Plaintiff with a copy of his background report. Id. at ¶ 15. He further alleges that Morpho terminated him as a result of the failed background check. Id. at ¶¶ 15-16. 13

Plaintiff filed this case on March 29, 2012, originally 14 asserting claims against Morpho Detection only. Docket No. 1. On 15 October 12, 2012, the Court granted the parties' stipulation to 16 permit Plaintiff to file the 1AC. Docket Nos. 23, 25. 17 In his 1AC, Plaintiff asserted four claims against Federal Defendants: (1) willful violation of the Fair Credit Reporting Act 19 (FCRA), 15 U.S.C. §§ 1681-1681x; (2) negligent violation of the 20 FRCA; (3) violation of the Freedom of Information Act (FOIA), 5 21 U.S.C. § 552; and (4) declaratory relief that Plaintiff is 22 eligible to be employed by the federal government or organizations 23 that require passage of the eQuip background check. 24

On January 22, 2013, Federal Defendants moved to dismiss the FCRA claims and declaratory relief claim, but not the FOIA claim. 26

Docket No. 36, 1-2 & n.1. In his opposition brief, Plaintiff 27 requested leave to amend to assert new claims under the 28 Administrative Procedures Act (APA), the due process clause of the Fifth Amendment or both, which were not plead in his 1AC. Docket 2 No. 37. 3

On February 27, 2013, the Court granted Federal Defendants' 4 motion to dismiss and dismissed his FCRA and declaratory relief 5 claims without leave to amend. Docket No. 40. The Court granted 6 Plaintiff permission to file a motion for leave to amend his 7 complaint to add new claims against Federal Defendants under the 8 APA or the due process clause, including a declaratory relief 9 claim based on these provisions. 10


Federal Rule of Civil Procedure 15(a) provides that leave of the court allowing a party to amend its pleading "shall be freely 13 given when justice so requires." Because "Rule 15 favors a 14 liberal policy towards amendment, the nonmoving party bears the 15 burden of demonstrating why leave to amend should not be granted." 16

Genentech, Inc. v. Abbott Laboratories, 127 F.R.D. 529, 530-531 17 (N.D. Cal. 1989) (citing Senza-Gel Corp. v. Seiffhart, 803 F.2d 18 661, 666 (Fed. Cir. 1986)). Courts consider five factors when 19 assessing the propriety of a motion for leave to amend: undue 20 delay, bad faith, futility of amendment, prejudice to the opposing 21 party and whether the plaintiff has previously amended the 22 complaint. Ahlmeyer v. Nev. Sys. of Higher Educ., 555 F.3d 1051, 23 1055 n.3 (9th Cir. 2009). Although these five factors are 24 generally all considered, "futility of amendment alone can justify 25 the denial of a motion." Id. at 1055; see also Moore v. Kayport 26 Package Express, 885 F.2d 531, 538 (9th Cir. 1989) ("Leave to 27 amend need not be given if a complaint, as amended, is subject to 28 dismissal.").


Plaintiff moves for leave to amend his pleading to assert 3 claims for violation of the Fifth Amendment, the APA and the 4 Privacy Act, 5 U.S.C. § 552a, et seq. Plaintiff's proposed 2AC 5 also maintains the FOIA claim that he previously asserted against 6 Federal Defendants in his 1AC. Federal Defendants had not moved 7 to dismiss that claim. Federal Defendants oppose the motion to 8 amend, arguing that leave to amend should be denied because all of 9 his claims, including the FOIA claim, are improperly plead and 10 would be subject to a motion to dismiss. 11


APA Claim

In the APA claim in his proposed 2AC, Plaintiff alleges that 13 he was not given procedures similar to individuals covered by the 14 Defense Industrial Personnel Security Clearance Program, 32 C.F.R. 15 part 155, and to individuals subject to the Department of State's 16 debarment procedures for contractors, 48 C.F.R. § 609.406-3. 2AC 17 ¶ 69-70. He also alleges that the TSA and DHS's failure to renew 18 his security clearance was arbitrary and capricious, deprived him 19 of his Fifth Amendment due process rights and his right to pursue 20 his chosen profession, and was "unsupported by substantial 21 evidence and unwarranted by the facts." Id. at ¶¶ 71-75. 22

Federal Defendants contend that Plaintiff should not be 23 granted leave to assert his proposed APA claim because he has 24 adequate remedies available under the Privacy Act. Plaintiff 25 responds that the APA and the Privacy Act are "not identical as 26 the APA provides relief where there is a violation of a 27 constitutional right and the Privacy ...

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