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Valour LLC v. Depaoli

United States District Court, W.D. Louisiana

September 7, 2017

VALOUR LLC, ET AL
v.
ROMANO DEPAOLI, ET AL

          JUDGE DEE D. DRELL

          REPORT AND RECOMMENDATION

          CAROL B. WHITEHURST UNITED STATES MAGISTRATE JUDGE

         Before the undersigned, on referral from the district judge, is a Motion To Dismiss Pursuant To Rule 12(b)(2) and (3) filed by Defendants - Romano Depaoli (“Depaoli”), Lisa Huff (“Huff”), Harold Kostem (“Kostem”) and Jeremy Wiesel (“Wiesel”) (collectively “Defendants”) [Rec. Doc. 45], Opposition thereto [Rec. Doc. 50] filed by Valour LLC (“Valour”) and Dennis Pennington (“Pennington”) (collectively “Plaintiffs”) and Defendants' Reply thereto [Rec. Doc. 53]. The Motion came before the Court for hearing on oral argument on August 16, 2017 and this matter was taken under advisement. [Rec. Doc. 54]. For the reasons set forth below, the Court recommends that the Motion to Dismiss be granted.

         I. Background

         Plaintiffs Valour and Pennington filed this action against Defendants under Bivens v. Six Unknown Fed. Narcotics Agents, 403 U.S. 388, 91 S.Ct. 1999, 29 L.Ed.2d. 619 (1971), and against the USA for possible abuse of process and malicious prosecution pursuant to the Federal Tort Claims Act (“FTCA”), 28 U.S.C. §§ 1346(b), 2671, et seq.

         Valour is a Limited Liability Company based in Abbeville, Louisiana that provided aircraft maintenance services to the United States military. Pennington is Valour's Chief Executive Officer and Senior Management Official and resides in Louisiana. R. 1, ¶ 10. James Bowling II (‘Bowling”) is Pennington's business partner and President of Valour. R. 32-1.[1]

         In 2013, several defense contractors were competing with Valour, the incumbent contractor, to win a contract for helicopter maintenance services on the Marine Helicopter Squadron One (“HMX-1”). R. 1, ¶ 18. This squadron is responsible for transporting the President and Vice President of the United States and is based out of Quantico, Virginia. R. 45-1, p. 8. At the time, Chief Warrant Officer Craig A. Kohlhagen (“Kohlhagen”) was a contracting officer for the Department of Navy. R. 32-1, p. 5. Due to suspected violations regarding the contract, Master Gunnery Sergeant Compton, an Aviation Maintenance Chief assigned to the Presidential Helicopter Maintenance Squadron at the Marine Corps Base in Quantico, Virginia contacted Kostem, a Contracts Specialist and an investigation by the Naval Criminal Investigation Services (“NCIS”) was opened. R. 1, ¶ 17. NCIS special agents Depauoli, Huff and Wiesel participated in the investigation.

         On November 5, 2014, a federal grand jury in the Eastern District of North Carolina indicted Bowling, Kolhagen and Pennington. R. 1, ¶ 3. The indictment charged all defendants with conspiracy to commit wire fraud in violation of 18 U.S.C. § 1349 (count one), wire fraud and aiding and abetting in violation of 18 U.S.C. §§ 1343 and 2 (count two), and major fraud against the USA in aiding and abetting in violation of 18 U.S.C. § 1031(a) and 2 (count three). R. 1, ¶ 4. The indictment also charged Kolhagen with disclosing source selection information in violation of 41 U.S.C. § 2102 (count four), and Bowling and Pennington with obtaining source select information in violation of 41 U.S.C. § 2102(b) (count five). R. 1, ¶ 5.

         On February 2, 2015, Bowling and Pennington moved to dismiss counts one, two, three and five of the indictment. R.1, ¶ 6. On May 26, 2015, Judge James C. Devers granted defendants' motion to dismiss, and dismissed the indictment without prejudice. R. 1, ¶ 7.

         Valour and Pennington assert that the investigation and subsequent indictments caused the loss of Valour's security clearance and other damages. R. 1, ¶¶ 100, 105. On May 23, 2016, they mailed an administrative tort claim to the Department of the Defense, Department of the Navy and Department of Justice seeking monetary damages pursuant to the FTCA for abuse of process and malicious prosecution. R. 9, Exh. A.

         On May 26, 2016, Plaintiffs filed an action against Depaoli, a resident and domiciliary of North Carolina; Kostem, a resident and domiciliary of North Carolina; Huff, a resident and domiciliary of Virginia; Wiesel, a resident and domiciliary of North Carolina; and Compton, a resident and domiciliary of Indiana pursuant to Bivens; and against the USA pursuant to the FTCA.

         On October 26, 2016, this Court granted an unopposed Motion to Dismiss the USA without prejudice because Plaintiffs filed their action before the adminstrative claim was denied or six months had passed, and thus, the Court lacked subject matter jurisdiction on the claim. [Rec. Doc. 13]. On March 20, 2017, Plaintiffs received a “right to sue” letter from Tort Branch of the Federal Tort Claims Office stating that Plaintiffs have until September 20, 2017 to file a lawsuit naming the United States as a defendant. On March 29, 2017, Plaintiffs filed a Second Supplemental and Amending Complaint renaming the individual Defendants and the USA as defendants in this matter. [Rec. Doc. 27].

         On June 21, 2017, Defendants filed the instant Motion to Dismiss [Rec. Doc. 45] on the grounds that: (1) this Court lacks personal jurisdiction over the nonresident Defendants, and/or (2) venue is not proper in the Western District of Louisiana as to Plainitff's Bivens action. Defendants also seek to dismiss Compton pursuant to Fed. R.Civ. P. 4(m) on the grounds that he has not been properly served with the Complaint and Summons in this action.[2]

         II. ...


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