United States District Court, N.D. California
May 25, 2004.
PAUL T. CURRIER, Plaintiff, V. WHIM COMPANY, VICTOR MESHKOVSKY, ROBERT CHOW, COVAD COMMUNICATIONS GROUP, INC., COVAD COMMUNICATIONS COMPANY, MCI COMMUNICATIONS CORPORATION, and DOES 1-100, Defendants
The opinion of the court was delivered by: SUSAN ILLSTON, District Judge
WITHOUT LEAVE TO AMEND, DENYING MOTION FOR TEMPORARY
ORDER DISMISSING COMPLAINT RETRAINING ORDER, AND DENYING
APPLICATION TO PROCEED IN FORM A PAUPERIS
Now before the Court are plaintiff's amended complaint and application
to proceed in forma pauperis ("IFP"), and motion for a temporary
restraining order, both filed on April 15, 2004. For the reasons set
forth below, the Court hereby DISMISSES plaintiff's complaint without
leave to amend, DENIES plaintiff's motion for a temporary restraining
order, and DENIES plaintiff's IFP application.
According to the Amended Complaint for Damages ("Compl."), plaintiff
Paul Talcott Currier is one of the operators of Seven Seas Clubs, Inc., a
California corporation engaged in the business of providing meeting space
and other materials for recovering alcoholics to maintain their sobriety.
Compl. at ¶¶ 1. In November of 2002, Plaintiff entered into a lease
with Victor Meshkovsky, general partner of the WHIM Company, for the
basement space in a building owned by Meshkovsky and WHIM at 215
Leidesdorff Street in San Francisco's financial district. Compl. at ¶¶
3, 8. Plaintiff used this space to hold meetings of the Seven Seas Club,
to run other businesses, and as his living space. Compl. at ¶ 28. There is toxic mold growing in the building and raw sewage has flooded
the basement. Compl. at ¶ 11, 13, 20. This has a negative impact on
plaintiff's business. Compl. at ¶ 20. Plaintiff acknowledges that he has
failed to pay rent. Compl. at Ex. A.
In January of 2003, plaintiff began negotiations with defendant to
lease or purchase the entire building under a "master lease-contract to
purchase." Compl. at ¶ 9. During the period beginning in March of
2003 and ending in March 2004, plaintiff made multiple offers to buy
defendant's building. Compl at ¶ 11. Each time, plaintiff offered
four million dollars for the building, with the exception of one offer to
buy the building at issue together with a second building for 4.5 million
dollars. Compl. at Exs. A, E-H. In February of 2004, however, plaintiff
discovered that the building requires two to five million dollars in
renovations to comply with San Francisco building and safety codes.
Compl. at ¶ 11. Defendants sued plaintiff for unlawful detainer and
evicted him from the premises. Compl. at ¶ 28, 41, 88, Ex. E.
On April 7, 2004, plaintiff filed this action against defendants WHIM
Company, Victor Meshkovsky, Robert Chow and Does 1-100, alleging numerous
state causes of action including fraud, as well as federal causes of
action under the Americans with Disabilities Act ("ADA") and the
Racketeering Influenced Corrupt Organizations Act ("RICO"). Plaintiff
sought IFP status, so the Court reviewed the complaint pursuant to
28 U.S.C. § 1915 and, on April 13, 2004, dismissed that complaint with
leave to amend. Plaintiff filed the amended complaint on April 15, 2004,
adding new defendants Covad Communications Group, Covad Communications
Co., and MCI Communications Corp. ("Telecom Defendants"). Plaintiff
alleges that defendants WHIM, Chow, Meshkovsky and Does 1-100 violated
the ADA because they discriminatorily refused to sell the building to
plaintiff based on their knowledge that plaintiff and his clients are
alcoholics, Compl. at ¶ 122-126, 130-132, and that they violated RICO
by committing mail fraud, wire fraud, bank fraud, and by conspiring to
commit those violations. Compl. at ¶ 186-195. Plaintiff does not
assert any of his federal causes of action directly against the Telecom
IFP applications are reviewed under a two-part analysis under
28 U.S.C. § 1915. This analysis looks first to whether a plaintiff meets the requisite financial status
to be permitted to proceed in federal court without first paying a filing
fee. 28 U.S.C. § 1915(a)(1). The second stage of the analysis examines a
plaintiff's complaint to ensure that it states cognizable, non-frivolous
claims. 28 U.S.C. § 1915(e)(2)(B)(i)-(ii). If the Court determines that a
plaintiff's assets exceed the maximum allowable amount, or that the
complaint fails to state a claim, it must dismiss the action. See Cato
v. United States, 70 F.3d 1103, 1106 (9th Cir. 1995) (noting that a court
may dismiss an action under § 1915 if the "complaint neither identifies
any constitutional or statutory right that was violated nor asserts any
basis for federal subject matter jurisdiction . . .").
Courts treat the second prong of the analysis similarly to a motion to
dismiss filed by a defendant. If it is "clear that no relief could be
granted under any set of facts that could be proved consistent with the
[plaintiff's] allegations," then it is proper to dismiss an IFF. See Ascon
Properties. Inc. v. Mobil Oil Co., 866 F.2d 1149, 1152 (9th Cir. 1989)
(applying standard of review for motions to dismiss under Federal Rule of
Civil Procedure 12(b)(6)). If a plaintiff alleges multiple causes of
action that include both state and federal claims and the federal claims
are dismissed, the Court will decline to assert supplemental jurisdiction
over the remaining state-law claims. 28 U.S.C. § 1367(c)(3). Also similar
to a motion to dismiss, all material allegations in an IFP complaint are
taken as true and construed in the light most favorable to the
plaintiff. See NL Ind., Inc. v. Kaplan, 792 F.2d 896, 898 (9th Cir. 1986)
(applying Federal Rule of Civil Procedure 12(b)(6)).
The first stage of IFP analysis requires that a plaintiff file an
affidavit describing the totality of the plaintiff's assets and stating
that the plaintiff is unable to pay the required fee.
28 U.S.C. § 1915(a)(1). Plaintiff has filed this affidavit, indicating
that he has no assets and that his income is only a draw of $84 per
week. IFP Application at 1:25. The Court notes that the IFP affidavit is
somewhat inconsistent with the complaint, which alleges that the Seven
Seas Club presently earns $l,500/month (though it is losing money
monthly) and that he has made several multimillion-dollar offers to
purchase defendant's office building. Compl. at ¶¶ 11, 27, 30, Exs. A,
E-H, IFP Application at 2:1-5. Based on plaintiff's multiple offers to
buy the office building in question, the income figure of $84 per week
that plaintiff describes in his IFP application seems dubious. Notwithstanding
this doubt, the Court will assume for purposes of this order that
plaintiff's affidavit provides a true valuation of his assets and,
accordingly, places him within the parameters necessary to grant an IFP
In the second stage of IFP analysis, the Court reviews plaintiff's
complaint to determine whether it states a cognizable cause of action
against the defendants. 28 U.S.C. § 1915(e)(2)(B)(ii). The Court will
review plaintiff's federal allegations before his state law allegations,
because a failure to adequately plead a federal cause of action will
result in dismissal of the entire case.
1. ADA claim
Plaintiff alleges that defendants refused to sell him the building on
Leidesdorff Street because he and his clients are alcoholics. Compl. at
¶¶ 24-25, 99-103. The ADA provides that "[n]o individual shall be
discriminated against on the basis of disability in the full and equal
enjoyment of the . . . facilities . . . or accommodations of any place of
public accommodation by any person who owns, . . . a place of public
accommodation." 42 U.S.C. § 12182(a). The term "disability" under the ADA
means "a physical or mental impairment that substantially limits one or
more of the major life activities" of an individual.
42 U.S.C. § 12102(2)(A). This definition also protects individuals who
are not necessarily disabled but are regarded as having such
impairments. 42 U.S.C. § 12102(2)(C). The analytical method for
determining disability makes the ADA more than a mere laundry-list of
disabilities entitling certain individuals to accommodation. See Burch
v. Coca Cola Co., 119 F.3d 305, 315-316 (5th Cir. 1997) (establishing
that alcoholism is not an per se disability). Ultimately, the "true
determination of whether an individual has a disability is not
necessarily based on the name or diagnosis of the impairment that person
has, but rather on the effect of that impairment on the life of the
individual. Some impairments may be disabling for particular individuals
but not for others." 29 C.F.R. § 1630 App. (1996). Consistent with this
framework, Congress has not included alcoholism in the ADA as a per se
disability, because, without more, it is not one.*fn1 The Court previously found plaintiff s allegations that defendants
refused to sell him the building at issue in this case because plaintiff
and his clients are alcoholics to be insufficient, because plaintiff did
not indicate that his alcoholism actually constitutes an impairment that
substantially limits a major life activity. That is, plaintiff did not
allege that his alcoholism caused any physical or mental impairments that
could render him disabled, and his prior conclusory statements did not
make it so. Plaintiff has not cured this defect in his complaint. While
plaintiff's amended complaint does generally allege that certain major
life activities, such a "walking, talking, working, thinking" are
substantially affected by alcoholism, he still fails to assert that any
of his own, specific, major life activities are substantially impaired by
it. Compl. at ¶ 131. In order to be treated as disabled, plaintiff would
have to allege that his alcoholism substantially limits him in at least
one major life activity through a specific physical or mental condition
other than intoxication itself. This he has not done.*fn2
Accordingly, plaintiff fails to state an ADA claim.
2. RICO claim
Plaintiff next asserts that the non-telecom defendants have violated
the federal RICO statute. Compl. at ¶¶ 186-195. Under 18 U.S.C. § 1962, it
is "unlawful for any person employed by or associated with any enterprise
engaged in, or the activities of which affect, interstate or foreign
commerce, to conduct or participate, directly or indirectly, in the
conduct of such enterprise's affairs through a pattern of racketeering
activity or collection of unlawful debt." 18 U.S.C. § 1962(c). "Racketeering activity" is defined by reference to specific crimes
and statutes, including "fraud connected with a case under Title 11."
18 U.S.C. § 1961(1). This definition, however, specifically excludes
bankruptcy fraud as defined by 18 U.S.C. § 157, which independently
punishes fraudulent petitions, documents, claims and representations that
relate to falsely-filed bankruptcy proceedings. Id.; 18 U.S.C. § 157.
In order to state a valid RICO claim under § 1962(c), a plaintiff must
allege "(1) conduct, (2) of an enterprise, (3) through a pattern, (4) of
racketeering activity." Jarvis v. Regan, 833 F.2d 149, 151-52 (9th Cir.
1987) (citations omitted). "In order to avoid dismissal for failure to
state a claim, a plaintiff must plead specific facts, not mere conclusory
allegations, which establish the existence of an enterprise." Elliott v.
Foufas, 867 F.2d 877, 881 (5th Cir. 1989) (citations omitted).
18 U.S.C. § 1962(d) makes unlawful conspiracy to violate any of the
provisions of § 1962. "[I]f the section 1962(c) claim does not state an
action upon which relief could ever be granted, regardless of the
evidence, then the section 1962(d) claim cannot be entertained." Neibel
v. Trans World Assurance Co., 108 F.3d 1123, 1127 (9th Cir. 1997). There
is no private cause of action under the statute for conspiracy alone, as
the conspiracy cause of action is only a means for establishing vicarious
liability for an underlying tort. Beck v. Prupis, 120 S.Ct. 1608, 1615,
1615 n.7 (2000).
Plaintiff's previous complaint failed to allege a RICO claim in several
respects. He has not cured any of those defects here. First, plaintiff
still does not allege that the defendants to the RICO claim are engaged
in interstate commerce. To the contrary, plaintiff alleges that
defendants Chow and Meshkovsky are California residents, who do business
in California. Plaintiff's amended complaint does not ascribe any
citizenship to the WHIM Company. While plaintiff does allege that
defendant Chow stole and transported plaintiff's physical and
intellectual property across state lines, this does not constitute
commerce. Furthermore, all other actions in this case with respect to the
Leidesdoff property appear to have occurred within the state of
California. Second, plaintiff still fails to allege that any racketeering
activity that may have occurred here is part of a pattern. Accordingly,
plaintiff fails to allege that the involvement of interstate commerce that
is essential to a RICO claim.
Second, plaintiff only makes conclusory allegations of qualifying torts
under the federal RICO statute, rather than the required specific allegations of fact. While
plaintiff has added the words "mail fraud, wire fraud, and bank fraud" to
his complaint, he has not specifically alleged the occurrence of any
conduct satisfying the elements of any of those crimes. The words only
state plaintiff's own ultimate legal conclusion as to the occurrence
those crimes. They do not constitute the crucial assertions of actual
underlying facts that the Court can consider as true for purposes of
establishing those same conclusions to support an IFP application.
Finally, although plaintiff has alleged the occurrence of bankruptcy
fraud (not as a separate claim, but in more detail than his mail, wire,
and bank fraud allegations), which is related to the definition of
racketeering activity covering offenses "involving fraud connected with a
case under Title 11," he still has not conformed his allegation to the
RICO statute sufficiently to support a conspiracy claim. In order to
satisfy this requirement, plaintiff must set forth which of defendants'
actions with respect to the allegedly fraudulent bankruptcy are separate
offenses "involving fraud" and that are "connected with" a Title 11 case.
Furthermore, plaintiff must then demonstrate that these offenses are not
excluded as RICO violations by their preexisting prohibition under
18 U.S.C. § 157. Having failed to do this a second time, plaintiff has
not stated an actual RICO claim with respect to his allegations of
bankruptcy fraud. Accordingly, plaintiff fails to state any RICO claim at
Due to plaintiff's failure to state a federal claim, and given that
most of plaintiff s complaint is devoted to state claims, this Court will
not exercise jurisdiction over his case at this time. If plaintiff
properly pleads a federal cause of action in the future, supplemental
jurisdiction may be appropriate, but at the present time it is not.
Accordingly, the Court hereby DISMISSES plaintiff's complaint without
leave to amend, but without prejudice to filing a paid complaint, and
DENIES plaintiff's IFP application.
3. Preliminary injunction
Plaintiff's motion for a temporary retraining order is identical to his
previous motion seeking the same. Plaintiff seeks a stay of eviction
proceedings against him, a grant of access to the Leidesdorff Street
property, and use of the second and fourth floors of the building. Pl's.
Mot. at 1. District courts do have broad discretion in fashioning equitable relief, but only for
claims properly before them. United States v. Oakland Cannabis Buyers'
Coop. 532 U.S. 483, 495, 121 S.Ct. 1711, 1720 (2001). As discussed above,
this Court has no jurisdiction over plaintiff's complaint, as he fails to
state a federal claim. Accordingly, the Court hereby DENIES his motion
for a temporary restraining order.
4. Lis pendens
Plaintiff has filed a document entitled "Notice of Pendency of Action
(Lis Pendens)" To the extent that this document was intended as notice of
the pendency of this action affecting title to or possession of the
Leidesdorff real property, this action is no longer pending.
Accordingly, this lis pendens is expunged.
For the foregoing reasons, the Court hereby DISMISSES plaintiff's
complaint without leave to amend, but without prejudice to filing a paid
complaint, DENIES plaintiff's motion for a temporary restraining order;
DENIES plaintiff's IFP application; and EXPUNGES the Notice of Pendency
of Action (Lis Pendens) filed by plaintiff. The clerk shall close the
IT IS SO ORDERED.