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PACIULAN v. M. GEORGE

March 3, 1999

RICHARD J. PACIULAN, WILLIAM A. KRUSE, PLAINTIFFS,
v.
RONALD M. GEORGE, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Illston, District Judge.

  ORDER:

(1) GRANTING DEFENDANTS' MOTIONS TO DISMISS WITHOUT LEAVE TO AMEND;

(2) DENYING PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT; AND

(3) GRANTING DEFENDANTS' MOTIONS FOR SANCTIONS BY IMPOSING A PREFILING REQUIREMENT

On July 24 and September 4, 1998, the Court heard argument on defendants' motions to dismiss and for sanctions, and plaintiffs counter motion for summary judgment.*fn1 Having carefully considered the arguments of counsel and the submitted papers, the Court hereby GRANTS defendants motions to dismiss plaintiffs complaint without leave to amend; DENIES plaintiffs' motion for summary judgment; and GRANTS defendants' motions for sanctions. A final and appealable judgment on this order will be filed separately by the Court.

BACKGROUND

The instant action is the third in a recent series of cases filed by attorney Joseph Giannini challenging the validity of the requirements for admission to practice law in California. This case presents a facial challenge to the constitutionality of California Rule of Court 983.*fn2 Plaintiffs are California residents who allege that they are licensed to practice law in states other than California but are not licensed to practice law in California. Plaintiffs wish to be admitted pro hac vice under Rule 983, but are precluded from doing so because they are California residents. Defendants are the Justices of the California Supreme Court ("Supreme Court defendants"), whom plaintiffs contend are charged with promulgating Rule 983, and individuals from the State Bar of California ("State Bar defendants"). Plaintiffs challenge the constitutionality of the language in Rule 983 prohibiting California residents from appearing pro hac vice*fn3 in California state courts under the Privileges and Immunities Clause, the Commerce Clause, the First Amendment of the United States Constitution, and the Due Process and Equal Protection guarantees of the United States and California Constitutions.

1. Related Litigation

Plaintiffs are represented by Joseph Giannini ("Giannini"), an attorney*fn4 who has filed a number of federal actions challenging the validity of the requirements for admission to practice law in federal and California state courts. In 1987, after failing the July 1986 and February 1987 California Bar Examinations, Giannini filed suit in federal district court in the Central District of California in his own name against the State Bar of California's Committee of Bar Examiners. See Giannini v. Committee of Bar Examiners, 847 F.2d 1434 (9th Cir. 1988). In that suit, Giannini alleged that the California Bar Examination unconstitutionally discriminated against out-of-state attorneys and violated the Privileges and Immunities Clause of Article IV, the Due Process and Equal Protection Clauses of the Fourteenth Amendment, and the Commerce Clause. The district court dismissed Giannini's complaint on the ground that it lacked subject matter jurisdiction to review the action of the Committee of Bar Examiners. The Ninth Circuit, in a per curiam opinion, affirmed the district court's dismissal, holding that the Committee's decision was reviewable by the California Supreme Court and that until such review was completed, Giannini had no basis for any claim of deprivation under federal law. Id. at 1435.

In 1988, Giannini filed suit in the Central District of California on his own behalf against the California Supreme Court and the named Justices of that Court, the Committee of Bar Examiners and the Committee's individual members, and the federal district courts for the Central, Southern, and Eastern Districts of California and the individual judges of those Courts. See Giannini v. Real 911 F.2d 354 (9th Cir. 1990), cert. denied, 498 U.S. 1012, 111 S.Ct. 580, 112 L.Ed.2d 585 (1990). Giannini challenged the constitutionality of the California Bar Examination and the local rules of the United States District Courts for the Central. Southern, and Eastern Districts of California, which required attorneys seeking admission to those courts to be members in good standing of the California State Bar. The district court denied Giannini's motions for (1) summary judgment, (2) a preliminary injunction ordering his admission to the California bar, (3) default judgment against named members of the Committee of Bar Examiners, and (4) criminal sanctions against the Committee's attorneys. The district court dismissed Giannini's claims against the state defendants on the ground of res judicata. On appeal, the Ninth Circuit affirmed the district court's order of dismissal, holding that Giannini had failed to state a claim against the state defendants under the Due Process and Equal Protection Clauses of the Fourteenth Amendment, the Privileges and Immunities Clause, and the Commerce Clause. Id. at 357-59. In addition, the Ninth Circuit upheld the district court's dismissal of Giannini's claims against the federal defendants. Id. at 359-61.

In 1992, Giannini filed suit in the Central District of California on behalf of himself and two other named plaintiffs, Mimi Morissette and Patricia Miller Rosenthal, against the State Bar of California's Committee of Bar Examiners, numerous State Bar officials, the California Supreme Court, and the named Justices of that Court. See Morissette v. Yu, No. 92-03252 (C.D.Cal. 1992). Plaintiffs alleged that California Rule of Court 983, which is the same rule challenged in the instant suit, violated Giannini's right to practice law under the Privileges and Immunities Clause and violated Morissette's and Rosenthal's First and Fourteenth Amendment rights. In addition, plaintiffs alleged that the Central District was required to admit Giannini to practice before it, and that the Committee of Bar Examiner's failure to certify Giannini for admission to the California bar after the July 1991 Bar Examination was arbitrary, capricious, and vindictive.

This complaint was dismissed on November 16, 1992. See Morissette v. Yu, No. 92-03253 (C.D.Cal. Nov. 16, 1992) (Order Granting Defendants' Motions to Dismiss, Denying Plaintiffs' Motion for an Order Admitting Joseph R. Giannini, Esq., to the California State and Central District Bars, and Ordering Joseph R. Giannini, Esq., to Show Cause Re: Rule 11 Sanctions). Plaintiffs subsequently requested and were "granted leave to file an amended complaint. The amended complaint incorporated the allegations of the original complaint and further alleged (1) that defendants retaliated against Giannini for exercising his First Amendment right of criticism, (2) that Rule 983 violated Morissette's and Rosenthal's First Amendment right to associate with Giannini and Sixth Amendment right to counsel, and (3) that Rule 983 violated the Commerce Clause. The district court subsequently dismissed plaintiffs' amended complaint without leave to amend and ordered Giannini to pay monetary sanctions for signing a frivolous complaint, having an improper purpose, and making scandalous allegations against various judges and defendants. See Morissette v. Yu, No. 92-03253 (C.D.Cal. May 26, 1993) (Order Granting Defendants' Motions to Dismiss, Denying Plaintiffs' Motions for Partial Summary Judgment and for an Order Admitting Joseph R. Giannini, Esq., to the California State and Central District Bars, and Ordering Joseph R. Giannini, Esq., and Gerard A. Fierro, Esq., to Show Cause Re Sanctions). In Morissette, Mr. Giannini also moved to disqualify the assigned judge, John G. Davies. Judge Davies declined to rescue himself, and Judge Ideman denied the motion.

On appeal, the Ninth Circuit affirmed the district court's dismissal of the first amended complaint, affirmed the district court's award of sanctions, and awarded additional sanctions against Giannini for filing a frivolous appeal, in an amount equal to double the costs of appeal. See Morissette v. Yu, No. 93-56288 (9th Cir. Mar. 8, 1994). In particular, the Ninth Circuit held that plaintiffs' constitutional challenges to Rule 983 and the California Bar Examination were barred by principles of res judicata. See id., slip op. at 5-6 ("If his challenge to Rule 983 was not included in [his] general challenge [to the constitutionality of the form and content of the California Bar Examination], it could have been, so it is barred by the judgment in that case.") (citing Clark v. Bear Stearns & Co., Inc., 966 F.2d 1318, 1320 (9th Cir. 1992)). The Ninth Circuit also affirmed the denial of Mr. Giannini's motion to rescue Judge Davies.

On July 7, 1997, Giannini filed an action entitled McKenzie v. Rehnquist in federal district court in Washington, D.C., against the United States Judicial Conference and its individual judge members, alleging that the local rules governing attorney admission in many federal district courts violate federal law, including Title VII, as well as the First Amendment, the Fourteenth Amendment Equal Protection Clause, the Fifth Amendment Due Process Clause, the Fifth Amendment right to property, the right to travel, and the Full Faith and Credit Clause of Art. IV, § 1 of the United States Constitution. The Court is unaware of the disposition of this litigation.

2. Litigation Before This Court

A. McKenzie et al. v. George, et al. C 97-0403 SI

By order filed July 22, 1997, the Court dismissed the McKenzie complaint without leave to amend.*fn5 The Court concluded that the plaintiffs had failed to state claims for which relief could be granted. On August 11, 1997, the plaintiffs filed a motion to vacate the judgment under Federal Rule of Civil Procedure 59(e). By order dated October 7, 1997, the Court denied the plaintiffs' motion to vacate as untimely, and noted that even if the motion had been timely and filed as a motion for reconsideration, the Court would have denied the motion because the plaintiffs had not met the substantive requirements of Civil Local Rule 7-9.*fn6 On October 17, 1997, the plaintiffs filed a motion to vacate the Court's October 7 Order, arguing its reasoning was flawed because, inter alia, a separate judgment is required under Rule 59 and therefore the motion to vacate was not late. On November 5, 1997, the Court denied the plaintiffs' second motion to vacate. Recognizing that confusion had arisen due to the absence of a separate judgment, the Court issued a separate judgment on the Court's July 22, 1997 order of dismissal. In the November 5 order, the Court made clear to all parties that the judgment was final and appealable.

On February 20, 1998, the plaintiffs filed a motion to vacate the Court's November 5, 1997 judgment. The plaintiffs contended that they did not receive notice of the judgment until January 22, 1998, when opposing counsel faxed Giannini copies of the November 5, 1997 order and judgment. The plaintiffs moved for relief pursuant to Federal Rule of Civil Procedure 60(b)(6). Although the court files indicated that the order and judgment were served on all parties of record, the Court assumed for purposes of deciding the plaintiffs' motion that they did not receive notice of the judgment. The Court denied the plaintiffs' motion, finding that it was without power to vacate and reenter the judgment due to the strict limitations contained in Rule 4 of the Federal Rules of Appellate Procedure. Under Rule 4, a district court may reopen the time for appeal in the event a party has not received notice of the judgment only if the party files a motion to reopen within 180 days of the entry of judgment or within 7 days of receipt of such notice, whichever is earlier. In McKenzie v. George, the plaintiffs admitted that they received notice of the judgment from the opposing counsel on January 22, 1998 and that they waited 29 days to file their motion to vacate. Accordingly, the Court found that it was without authority to vacate the November 5, 1997 judgment.

  B. Priciulan et al. v. George, et al. C 98-1201 SI and McKenzie et
     al., v. Wilson, et al., C 98-0580 SI

On March 25, 1998, Giannini filed the instant lawsuit on behalf of plaintiffs Richard Paciulan and William Kruse challenging Rule 983 as unconstitutional. Giannini and plaintiffs acknowledge that the instant lawsuit "parallels" the litigation in McKenzie v. George, C 97-0403 SI, and state that "had the plaintiffs known about the Court's November 5, 1997 decision [in McKenzie v. George], this lawsuit would not have been necessary." Complaint ¶ 8. On February 12, 1998, Giannini filed McKenzie v. Wilson, C 98-0580 SI on behalf of nine individuals contending that California's failure to provide reciprocity in bar' admissions is unconstitutional. The plaintiffs in McKenzie v. Wilson are nine attorneys who reside in California, eight of whom are admitted to bars of other states but not California, and one of whom is admitted to the California bar and alleges that he is precluded from moving out of California because other states will not grant him automatic admission to their bars because of California's lack of reciprocity.*fn7 McKenzie v. Wilson was filed as a class action. Plaintiffs in McKenzie v. Wilson acknowledge that it raises many, if not all, of the same issues as are raised in McKenzie v. George and Paciulan v. George. See Joint Case Management Conference Statement filed in McKenzie v. Wilson on June 9, 1998 at 5:20-21 ("Plaintiffs request a stay of this case for 60 days pending a decision in a related case, Paciulan v. George, as that ruling may dispose of issues in this action."). The defendants in McKenzie v. Wilson have also filed motions to dismiss and for sanctions.

DISCUSSION

1. Defendants' Motions to Dismiss

A. Legal Standard

Under Federal Rule of Civil Procedure 12(b)(6), a district court must dismiss a complaint if it fails to state a claim upon which relief can be granted. The question presented by a motion to dismiss is not whether the plaintiffs will prevail in the action, but whether the plaintiffs are entitled to offer evidence in support of the claim. See Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974).

In answering this question, the Court must assume that the plaintiffs' allegations are true and must draw all reasonable inferences in the plaintiffs' favor. See Usher v. City of Los Angeles, 828 F.2d 556, 561 (9th Cir. 1987). Even if the face of the pleadings suggests that the chance of recovery is remote, the Court must allow the plaintiffs to develop the case at this stage of the proceedings. See United States v. City of Redwood City, 640 F.2d 963, 966 (9th Cir. 1981).

If the Court chooses to dismiss the complaint, it must then decide whether to grant leave to amend. In general, leave to amend is only denied if it is clear that amendment would be futile and "that the deficiencies of the complaint could not be cured by amendment." Noll v. Carlson, 806 F.2d 1446, 1448 (9th Cir. 1987) (quoting Broughton v. Cutter Laboratories, 622 F.2d 458, 460 (9th Cir. 1980) (per curiam)); see Poling v. Morgan, 829 F.2d 882, 886 (9th Cir. 1987) (citing Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962)) (futility is basis for denying amendment under Rule 15).

B. Analysis

(1) Collateral Estoppel

Defendants argue that Giannini's previous litigation, and most especially this Court's dismissal of McKenzie v. George, C 97-0403 SI, should collaterally estop Giannini and the present plaintiffs from alleging their claims in the instant lawsuit. Defendants contend that Giannini is manipulating the legal system by enlisting different individuals to act as plaintiffs in various cases in an effort to avoid the bars of res judicata and collateral estoppel. At argument on defendants' motions to dismiss, Giannini argued that the related litigation should have no bearing on the instant lawsuit, despite plaintiffs' acknowledgment that this case "parallels" the litigation in McKenzie v. George. Giannini urged the Court to ignore its previous dismissal of the claims in McKenzie v. George, and quoted Ralph Waldo Emerson's admonition that "A foolish consistency is the hobgoblin of little minds. . . . "*fn8

Although defendants are correct that Giannini has been involved, either as a lawyer or a party, in many cases challenging California's rules governing the practice of law, the instant plaintiffs have not, and for that reason the Court declines to find that plaintiffs are collaterally estopped in this litigation from challenging Rule 983. Accordingly, the Court reviews all of plaintiffs' arguments on the merits. As set forth below, the Court concludes for all of the reasons explained in its previous order in McKenzie v. George that plaintiffs have not stated a claim. Furthermore, although plaintiffs argue that changed circumstances and ...


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