United States District Court, Northern District of California
April 11, 2003
ANDREW SHALABY, PLAINTIFF,
IRA JACOBOWITZ, SUSAN BURNETT LUTEN, DOES 1 THROUGH 100 INCLUSIVE, DEFENDANTS.
The opinion of the court was delivered by: Charles R. Breyer, United States District Judge.
MEMORANDUM AND ORDER
This is a pro per suit brought by a lawyer challenging the constitutionality of California's anti-SLAPP statute and the practice of attorneys ghostwriting for ostensibly pro per litigants. Now pending before the Court is the defendant Ira Jacobowitz's motion to dismiss for lack of subject matter jurisdiction.
This case stems from a series of five prior lawsuits: four in which plaintiff served as counsel and a fifth in which plaintiff was sued by his former clients for malpractice.*fn1
2. Perez v. King: The first suit, Perez v. King, was a complaint for
unlawful detainer, which plaintifi as attorney for the Perezes, filed
against their tenant, Carolyn King. King appeared in pro per. The case
was settled and it was agreed that King would vacate the premises and
Perez family members would move in.
3. Perez v. Omura: While the unlawful detainer matter was pending,
plaintiff, on behalf of the Perezes, sued Ann Omura, King's lawyer,
who worked for Eviction Defense Center ("EDC"). At the heart of Perez
v. Omura was the allegation that EDC lawyers had ghostwritten
pleadings on behalf of King, who had appeared in pro per in Perez v.
King. The complaint alleged causes of action for abuse of process,
barratry, fraud and intentional infliction of emotional distress from
Omura's representation The suit was dismissed on Omura's motion under
California Code of Civil Procedure section 425.16, which provides a
procedure for the early dismissal of an action deemed to be a
"Strategic Lawsuit Against Public Participation" ("SLAPP suit").
Section 425.16 also provides for attorney's fees and costs to the
prevailing party, and the Superior Court accordingly ordered the
Perezes to pay approximately $31,776 to Omura and the EDC. Jacobowitz
was not a party to this suit
4. Perez v. Jacobowitz: The Perezes, again represented by plaintiff
brought another complaint challenging ghostwritten pleadings, this
time based on California's Business and Profession Code. Defendants
were the EDC and EDC attorneys Omura and Jacobowitz. This complaint
was also dismissed as a SLAPP suit, and the Perezes were again ordered
to pay attorney's fees and costs, this time in the amount of 17,290.
5. King v. Perez: Meanwhile, in contravention of the King v. Perez
settlement agreement, the Perez family did not move onto the premises
during the sixty-day period specified by Berkeley ordinance. King,
represented by Jacobowitz, sued the Perezes for wrongful eviction. The
case settled when King accepted damages of $75,000 in exchange for a
release of all claims against the Perezes.
6. Perez v. Shalaby: Shortly thereafter the Perezes sued plaintiff for
malpractice, stemming from his conduct in litigating or precipitating
the previous four cases. The suit alleges generally that in handling
the aforementioned lawsuits, plaintiff failed to exercise that degree
of competence and skill possessed by attorneys who represent
landlords. Jacobowitz is not a party to Perez v. Shalaby.
The present action was filed shortly after the Perezes sued plaintiff for malpractice. The complaint alleges the unconstitutionality of the SLAPP statute, asserting that it chills plaintiff's right to free speech and right to petition for redress of grievances, and violates the due process and equal protection clauses of the Fourteenth Amendment. The complaint also seeks damages against Jacobowitz under United States Code Title 42 section 1983, alleging that his representation of King constituted state action because Jacobowitz and the EDC received funding from the cities of Berkeley and Oakland. Plaintiff alleges that this representation was "responsible" for the damages sought by plaintiff's former clients, the Perezes, in the pending malpractice suit. Plaintiff also makes state law claims.
In particular, plaintiff asks for ten statements of declaratory relief relating to claims that section 425.16(c) is unconstitutional; that "attorney-ghostwriting of pleadings for ostensibly pro per litigants is unfair and unjust, should be enjoined, and warrants imposition of sanctions or other appropriate relief" and that "an attorney . . . engaged in unfair business practices, under color of [State law], may be liable under 42 U.S.C. § 1983." Complaint at ¶¶ 25, 28. Plaintiff also brings a claim for injunctive relief under section § 18 1983, and state law claims for abuse of process, violations of the California Unfair Business Practices Act, tortuous interference with contractual relations, tortuous interference with prospective economic advantage, defamation, intentional infliction of emotional distress, and negligent infliction of emotional distress.
Jacoboxvitz seeks dismissal of plaintiff's federal causes of action under Federal Rule of Civil Procedure 12(b)(1), and dismissal of plaintiff's state law causes of action under United States Code Title 28 section 1367(c).
The parties filed a stipulation for an extension of time for Susan Burnett Luten, the other defendant, to file a response to plaintiff's claim. Per this stipulation, Burnett Luten's response to plaintiff's complaint is due on April 14, 2003.
I. Applicable Legal Standards
On a motion to dismiss under Federal Rule of Civil Procedure 12(b)(1), even though defendant is moving to dismiss the complaint, plaintiff bears the burden of proving that this Court has jurisdiction to decide his case. See Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375, 377 (1994) ("Federal courts are courts of limited jurisdiction . . . It is to be presumed that a cause lies outside this limited jurisdiction, and the burden of establishing the contrary rests upon the party asserting jurisdiction") (citations omitted). Under Federal Rule of Civil Procedure 12(b)(6), a party may move to dismiss a cause of action which fails to state a claim upon which relief can be granted. On a motion to dismiss, all well-pleaded allegations of material fact are taken as true and construed in the light most favorable to the non-moving party. Wyler-Summit Partnership v. Turner Broadcasting System, Inc., 135 F.3d 658, 661 (9th Cir. 1998). The court must draw all reasonable inferences in favor of the non-moving party. See Usher v. City of Los Angeles, 828 F.2d 556, 561 (9th Cir. 1987). The complaint "should not be dismissed unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Id. (quoting Hydranautics v. Filmtec Corp., 70 F.3d 533, 535-536 (9th Cir. 1995)).
II. Summary of Plaintiff's Argument
The Perezes, represented by plaintiff, twice sued EDC lawyers for their alleged ghostwriting in Perez v. King. The Perezes lost both times, incurring more than $47,000 in sanctions, and are now suing plaintiff for malpractice for his representation in these matters. In the present suit, plaintiff hopes to establish that ghostwriting is an impermissible practice and have prior sanctions awards against his clients voided. Plaintiff states that he intends to file a cross-complaint for indemnification against the EDC lawyers in the malpractice suit against him, but has hesitated for fear of a SLAPP judgment against him.
III. Strategic Lawsuit Against Public Participation Statute ("SLAPP")
Plaintiff asks for a declaration that California Code of Civil Procedure section 425.16 is unconstitutional because it chills the valid exercise of First Amendment rights.
A federal court is authorized to issue declaratory relief under United States Code Title 28 section 2201. Section 2201 provides that "[in] a case of actual controversy within its jurisdiction . . . a court of the United States . . . may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought."
Standing to sue or defend is an aspect of the case or controversy requirement. See Arizonans for Official English v. Arizona, 520 U.S. 43, 64 (1997). In the First Amendment area the Supreme Court has altered its traditional rules of standing to allow persons who are themselves unharmed by a statute to challenge it facially on the ground that it may be applied unconstitutionally to others, in situations not before the Court. See Board of Trustees v. Fox, 492 U.S. 469 (1989). A state has standing to defend the constitutionality of its statute. See Diamond v. Charles, 476 U.S. 54, 62 (1986). "Because the State alone is entitled to create a legal code, only the State has the kind of "direct stake" . . . in defending the standards embodied in that code." Id. at 65.
Jacobowitz argues that plaintiff fails to establish an "actual controversy?' between plaintiff and any defendant with respect to his challenge to the constitutionality of the SLAPP statute, and; therefore, fails to allege a basis for federal jurisdiction. Plaintiff responds that "an actual injury exists because . . . § 425.16 chills the First Amendment rights of Plaintiff and the public to petition for the redress of grievances." Pl.'s Opposition at 8. Plaintiff thus rests his claim of actual injury both on individual injury and injury to the public.
A. Individualized SLAPP Injury
As is set forth above, plaintiff's theory of an actual controversy between he and Jacobowitz is that he (plaintiff) wants to file a third party indemnification claim against Jacobowitz in the malpractice action (what plaintiff calls his contingent claims), but his fear of being sanctioned under the SLAPP statute prevents him from doing so.
Jacobowitz argues that anticipated SLAPP sanctions in plaintiff's contemplated cross-claim for indemnification do not demonstrate a presently justiciable controversy. "Plaintiff must point to an existing controversy in order to obtain relief, not hypothesize a controversy that will come into being after the court has given relief" D.'s Reply at 5.
Plaintiff argues that "Jacobowitz is a necessary and indispensable party because the constitutional challenge to C.C.P. § 425.16 is case-specific, and no effective decree can be entered without affecting Jacobowitz's rights." Pl.'s Opposition at 3. Plaintiff additionally argues that threat of harm is sufficient to satisfy the case or controversy doctrine, "particularly where First Amendment rights are at stake." Id. at 6. Plaintiff further claims that SLAPP sanctions against plaintiff are "a foregone conclusion." Id.
The same causes of action, generally pertaining to
"ghostwriting" and abuse of process" (inter alia),
were stricken by the State Court pursuant to Cal. Code
Civ. Proc. § 425.16, and mandatory sanctions in
the amount of approximately $50,000 were [wrongfully]
imposed on Perez in attempting to petition the Court
for redress. Accordingly, the State Court has already
decided that any plaintiff's causes of action seeking
the relief sought in Plaintiffs "contingent" causes of
action are subject to mandatory sanctions under §
425.16(c), and therefore Plaintiff's exposure to
injury is indeed a foregone conclusion.
Pl.'s Opposition at 6.
Plaintiff's theory that if plaintiff brings a claim for indemnification against Jacobowitz, Jacobowitz will bring a SLAPP motion against him, win the motion, get awarded sanctions, and foreclose plaintiff from being awarded his rightful indemnity, does not present a legally cognizable claim Plaintiff's claim against Jacobowitz is too attenuated to be justiciable and is unripe. He has not even filed the anticipated cross claim, so any exposure to SLAPP sanctions is purely hypothetical. This Court may not issue an advisory opinion on a claim that may never arise. Thus, the Court does not have jurisdiction over plaintiff's declaratory relief claim arising out of the possible imposition of SLAPP sanctions in the malpractice claim.
B. SLAPP Injury to Public
Plaintiff alleges that "§ 425.16 chills the First Amendment rights of Plaintiff and the public to petition for the redress of grievances." PI.'s Opposition at 8. Plaintiff raises a cognizable claim in asserting that section 425.16 unconstitutionally abridges the right to petition for redress, but the claim does not implicate Jacobowitz. Plaintiff, however, cannot bring his statutory overbreadth claim against Jacobowitz, a private party, because Jacobowitz does not have standing to defend the claim of constitutionality. A state has standing to defend the constitutionality of its statute. See Diamond v. Charles, 476 U.S. at 62. A private individual does not.
This Court does not have subject matter jurisdiction over plaintiff's SLAPP-related claims. To the extent they are based on a threat of injury to plaintiff they are unripe. To the extent they are based on a chilling effect to the right to petition for redress the claims are not brought against the right defendant Therefore, plaintiff is not entitled to the declaratory relief relating to section 425.16(c) that he seeks. Plaintiff's request for declaratory relief numbers 1-7 are dismissed.
IV. United States Code Title 42 section 1983 Claims
With respect to plaintiff's section 1983 claim, plaintiff asks for declaratory relief; damages, injunctive relief, and restitution. He rests his section 1983 claim on the impropriety of Jacobowitz's alleged ghostwriting, which he states "is inconsistent with procedural' ethical and substantive rules of the Federal and State Courts," Pl.'s Opposition at 10, and the ABA Model Code. Id. at 11.
Only two allegations are necessary to state a claim under section 1983: "First, the plaintiff must allege that some person has deprived him of a federal right. Second, he must allege that the person who has deprived him of that right acted under color of state or territorial law." Gomez v. Toledo, 446 U.S. 635, 640 (1980).
Jacobowitz moves to dismiss the section 1983 claim on the ground plaintiff has failed to allege that he has been deprived of a federally-protected right by a state official or someone acting under color of state law. Jacobowitz contends there is no federally protected right for counsel to be free from opposing ghostwritten pleadings, and further, that there was no state action here.*fn2
A. A Federally-Protected Right
The issue is whether an attorney representing a party in litigation has a federally-protected right to not have the pro per opposing party's papers ghostwritten by an attorney.
Various courts have frowned on ghostwriting, but none have found the practice violates a federally-protected right. In Laremont-Lopez v. Southeastern Tidewater Opportunity Project, the court stated that it found ghostwriting to be improper, but declined to order sanctions. 968 F. Supp. 1075 (E.D. Vir. 1997). The court found that "the practice of ghost-writing legal documents to be filed with the Court by litigants designated as proceeding pro se is inconsistent with the procedural, ethical and substantive rules of [that] Court." Id. at 1080. The court went on to say, however, that "[w]hile attorneys should have known that this practice was improper, there is no specific rule which deals with such ghost-writing." Id.
In a California case, Ricotta v. California the court noted that, "the parties were unable to point the Court to any local, state or national rule addressing ghost-writing." 4 F. Supp.2d 961, 987 (S.D. Cal. 1998). The court declined to take the "unprecedented step of holding an attorney and a pro se party in contempt for giving and receiving assistance in the drafting of documents." Id.
A bankruptcy court has declared in dicta that ghostwriting, "violates both Rule 11 and the duty of honesty and candor to the court," In re Merriam, 250 B.R. 724 (Bankr. Col. 2000).
A Colorado court struck without prejudice a pro se party's entry of appearance and motions when counsel made the purportedly pro se party's appearance. The court stated it would allow re-filing the motions either pro se or with counsel but not with undisclosed counsel. The court stated that ghostwriting is contrary to ABA ethical guidelines and the Model Code of Professional Responsibility DR 1-102(A)(4). Johnson v. Board of County Commissioners, 868 F. Supp. 1226, 1232 (Col. 1994).
Plaintiff cites cases which express disapproval for the practice of ghostwriting, some of which state that it violates ethical rules. Plaintiff provides no support, however, for the proposition that an attorney representing a party in litigation has a federally-protected right to not have the pro per opposing party's papers ghostwritten by an attorney. In fact, plaintiff does not even respond to Jacobowitz's contention that there is no such federally-protected right. Accordingly, the section 1983 claim is dismissed without leave to amend.
B. State Actor
An additional ground for dismissing the section 1983 claim is that plaintiff has not alleged facts that demonstrate Jacobowitz was a state actor. The complaint alleges that Jacobowitz founded the EDC and sat on its board, that Jacobowitz and the EDC received grants exceeding $100,000 per year from the Cities of Berkeley and Oakland, that the cities regularly referred tenants to EDC for their defense in eviction proceedings, and that therefore Jacobowitz and the EDC were state actors. Complaint at ¶¶ 5, 7. "Section 1983 liability extends to a private party where the private party engaged in state action under color of law and thereby deprived a plaintiff of some right, privilege, or immunity protected by the Constitution or the laws of the United States." Brunette v. Humane Society, 294 F.3d 1205, 1210 (9th Cir. 2002). "Receipt of government funds is not enough alone to make an organization that provides free legal assistance a state actor." Gerena v. Puerto Rico Legal Services, Inc., 697 F.2d 447 (1st Cir. 1983). "Even governmental regulation and the receipt of federal funds . . . are insufficient to establish that an otherwise private . . . entity acted under color of state law." Jackson v. East Bay Hospital, 980 F. Supp. 1341, 1357 (N.D. Cal. 1997).
Plaintiff has not pled facts supportive of state action. In his opposition, and in a motion to strike, plaintiff bizarrely accuses Jacobowitz of lying about his EDC affiliation. Plaintiff denies that the EDC's receipt of federal funds is the basis for Jacobowitz's status as a state actor. But plaintiff then fails to offer any other theory of how Jacobowitz, a lawyer in private practice, could be a state actor. Accordingly, the insufficiency of plaintiff's state actor allegations is an additional basis for dismissing the section 1983 claim.*fn3
Accepting the allegations made in the complaint as true for purposes of this motion, plaintiff fails to state a claim for relief under section 1983. He has not provided authority to demonstrate a federally-protected right to be free from ghostwriting. He also does not cite authority for the proposition that Jacobowitz's receipt of government funds made him a state actor. Accordingly, plaintiff's section 1983 claim and corresponding request for declaratory relief numbers 9 and 10 are dismissed.
Plaintiff asks for a declaration "establishing that the practice of attorney-ghostwriting of pleadings for ostensibly pro per litigants is unfair and unjust, should be enjoined, and warrants imposition of sanctions or other appropriate relief" Complaint at ¶ 27. Plaintiff has not established a case or controversy with respect to this claim. Plaintiff is not entitled to an advisory opinion on the propriety of ghostwriting. Therefore, plaintiff's request for declaratory relief number 8 is dismissed for lack of jurisdiction.
VI. Request for Leave to Amend Plaintiff's Complaint to Include a Cause of Action Under United States Code Title 42 Section 1985
Plaintiff requests leave to amend to include a cause of action under section 1985.
Federal Rule of Civil Procedure 15(a) provides that "a party may amend the party's pleading only by leave of court or by written consent of the adverse party; and leave shall be freely given when justice so requires."
"[T]here must be a racial or class-based invidious discriminatory animus to state a claim pursuant to part two of § 1985(2)." Merrigan v. Affiliated Bankshares of Colorado, Inc., 775 F. Supp. 1408, 1411 (Col. 1991); see also Schertz v. Waupaca County, 683 F. Supp. 1551, 1560 (E.D. Wis. 1988) (claims under section 1985(2) "require proof that the defendants acted with class-based animus").
Plaintiff contends that "Jacobowitz's exhibit 2 provides evidence that Jacobowitz, Omura, and EDC have conspired to contrive allegations and support them with a false corporate record, with the intent to deny" plaintiff and the public their right to equal protection, right to challenge the constitutionality of section 425.16, and right to challenge the practice of ghostwriting by certain individuals and as a ongoing practice. Exhibit 2 is a document entitled "Statement by Domestic Nonprofit Corporation" filed with the California Secretary of State by Jacobowitz as an agent for the EDC that lists the address of the organization, and identifies CEO Jacobowitz, Secretary Rommell, and CFO Omura. Plaintiff does not allege that EDC attorneys acted with class-based discriminatory animus. In fact, he does not provide any facts, argument, or legal authority to support a claim that section 1985 has been violated. As amendment would be futile, the Court exercises its discretion to deny plaintiff leave to amend to add a cause of action under section 1985 against Jacobowitz, Omura, and the EDC.
VII. State Law Claims
Plaintiff brings a myriad of state law claims, including abuse of process, violations of the California Unfair Business Practices Act, tortuous interference with contractual relations, tortuous interference with prospective economic advantage, defamation, intentional infliction of emotional distress, and negligent infliction of emotional distress. Federal courts have supplemental jurisdiction over state claims pursuant to United States Code Title 28 section 1367(a) "in any civil action of which the district courts have original jurisdiction." The court may in its discretion decline to exercise supplemental jurisdiction if "the district court has dismissed all claims over which it has original jurisdiction." 28 U.S.C. § 1367(c). "In the usual case in which all federal-law claims are eliminated before trial, the balance of factors to be considered under the pendent jurisdiction doctrine-judicial economy, convenience, fairness, and comity-will point toward declining to exercise jurisdiction over the remaining state-law claims." Carnegie-Mellon University v. Cohill, 484 U.S. 343, 350 n. 7 (1998).
Here, the court is dismissing all claims over which it has original jurisdiction. Plaintiff fails to allege a case or controversy with respect to the constitutionality of section 425.16 and fails to allege facts to support a section 1983 claim. Plaintiff has no other federal claims. Plaintiff has made only state law claims against Burnett Luten, who has not yet responded to the complaint. Nonetheless, because there are only state law claims remaining in this lawsuit, all of those claims, including those filed against Burnett Luten, are dismissed without prejudice.
2. Plaintiff's claim for declaratory relief numbers 1-7 are dismissed on
the grounds that the claim challenging the constitutionality of
California Code of Civil Procedure section 425.16(a) as applied to his
proposed indemnification complaint in the malpractice action is unripe
and (b) his facial challenge is brought against the wrong party.
3. Plaintiff's claim for declaratory relief number 8 relating to the
propriety of ghostwriting is dismissed on the grounds that there is no
case or controversy.
4. Plaintiff's claim for declaratory relief numbers 9-10 relating to his
section 1983 claim is dismissed on the grounds that his claim fails to
allege facts to support a section 1983 cause of action.
5. Plaintiff's section 1983 claim is dismissed on the grounds that (a)
plaintiff has failed to identify a federally-protected right to be
free from an opposing party's briefs being ghostwritten, and (b)
plaintiff has failed to allege facts demonstrating that Jacobowitz was
a state actor.
6. The federal claims are dismissed without leave to amend as amendment
would be futile. Plaintiff's papers fail to suggest that there is any
way he could state a federal claim against Jacobowitz.
7. Plaintiff is denied leave to amend to include a section 1985 claim as
he fails to plead facts to support such a claim and permitting
amendment would not serve the interests of justice.
8. All of the remaining state law claims, including all of those against
Susan Burnett Luten, are dismissed without prejudice, because no
federal claims remain
IT IS SO ORDERED.