Peter David Schiff v. Internal Revenue Service, et al.

Summary

The United States District Court for the District of Puerto Rico adopted a magistrate judge’s report and recommendation and granted motions to dismiss claims against the Puerto Rico Commissioner of Financial Institutions, Commissioner Natalia Zequeira, and Trustee Wigberto Lugo Mender. The court held that Eleventh Amendment immunity and a broad release in a bank-liquidation consent order barred claims against OCIF and the defendants in their official capacities, while the remaining personal-capacity claims were inadequately pleaded or otherwise unavailable. All claims against these defendants were dismissed with prejudice.

Holdings

1. The Puerto Rico Commissioner of Financial Institutions is an arm of the Commonwealth and is immune from the plaintiff's claims for damages; that immunity extends to the commissioner and trustee sued in their official capacities.
2. The plaintiff's broad release in the consent order for the bank's liquidation waived claims against the Commissioner of Financial Institutions, the commissioner as an agency officer, and the trustee arising from the liquidation.
3. The personal-capacity § 1983 claims against Commissioner Zequeira failed to state a plausible claim because the amended complaint offered only conclusory allegations and did not explain how her conduct violated applicable law or the plaintiff's constitutional rights.
4. The Bivens claim against Commissioner Zequeira failed because she was a state, rather than federal, actor.
5. The § 1985(3) claim failed because the amended complaint did not adequately plead the alleged conspiracy, the relationship or cooperation among the actors, or class-based discriminatory animus.
6. The tortious-interference claim failed because Puerto Rico law requires an existing contract and the alleged stock sale never came into existence; the defamation claim failed because the amended complaint attributed no defamatory statements to Commissioner Zequeira.
7. The court properly denied the plaintiff's request to amend his pleadings for a third time and declined to consider documents and arguments submitted for the first time with his objections.

Questions Presented

1. Whether the Puerto Rico Commissioner of Financial Institutions is an arm of the Commonwealth entitled to Eleventh Amendment immunity from the asserted claims.
2. Whether Eleventh Amendment immunity extends to claims against the commissioner and trustee in their official capacities.
3. Whether a broad release in the bank-liquidation consent order waived the plaintiff's claims arising from the liquidation.
4. Whether the personal-capacity claims against the commissioner satisfied Rule 12(b)(6), including the claims under §§ 1983 and 1985(3), the Bivens claim, and the tort claims.
5. Whether the plaintiff was entitled to amend his pleadings for a third time or have documents attached to his objections considered.
6. Whether the motions to dismiss should be granted and the claims dismissed with prejudice.

Disposition

dismissed