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Cmls Management, Inc., Margarett Wilkins, and Michael Schulte v. Fresno County Superior Court

July 17, 2012



This case deals with various orders issued by Fresno County Superior Court judges in an on-going state court matter. The only causes of action are for declaratory relief under 42 U.S.C. § 1983.*fn1 Defendants move to dismiss this case under Rules 12(b)(1) and 12(b)(6) on the basis of Eleventh Amendment immunity, absolute judicial immunity, the Defendants are not persons under 42 U.S.C. § 1983, and lack of jurisdiction under the Rooker-Feldman doctrine. The Court ordered additional briefing, which has been received, on inter alia whether Younger abstention applies.*fn2 After considering the submissions of the parties, the Court will dismiss and close this case.


From the Complaint, Plaintiffs Schulte and CMLS were in litigation with Dwight Long ("Long") regarding claims of embezzlement, breach of fiduciary duty, and defamation. Margarett Wilkins is the sole owner of CMLS, but was not initially named as a party to the case (she was added, however, as a Defendant by Long in October 2008). Defendant Judge Franson was the judge presiding over the case. In July 2008, Long apparently obtained injunctive orders from Judge Franson that purported to maintain the status quo with respect to the operations of CMLS and a related entity, Bay Development Group ("Bay"). In August 2008, Long obtained a modification of the July 2008 Order. The August 2008 Order gave Long full authority to pay Bay's venders, and also stated that "CMLS and Bay will continue to operate as historically." Schulte contends that the July 2008 Order and the August 2008 Order (collectively "Injunctive Orders") are fatally ambiguous.

On September 3, 2008, Long filed a motion for contempt based on violations of the Injunctive Orders. On September 4, 2008, Judge Franson issued an Order to Show Cause ("OSC") based on the contempt motion. There was no arraignment and Schulte was not advised of his rights. Further, the OSC for contempt was never personally served on Schulte in violation of California Code of Civil Procedure ("CCP") § 1016 until after the contempt trial started.

After the OSC had been issued, Schulte discovered that Judge Franson had personally sued Schulte 10 years prior, and had alleged that Schulte was "malicious." Upon discovering this information, Schulte filed a verified statement of disqualification that alleged that Judge Franson was biased against Schulte based on the prior lawsuit.

Judge Franson did not properly object to the statement of disqualification and instead recused himself.*fn3 Judge Corona was then appointed to preside over the litigation.

Prior to Judge Franson's recusal, Long had filed another contempt motion for violation of the Injunctive Orders. On July 2, 2009, Judge Corona issued a second OSC, but Schulte was never personally served or arraigned.

Around June 2009, Judge Corona began the contempt hearing on the first and second OSC's. As the contempt hearing proceeded, Long filed other motions for contempt against Schulte. In an ex parte hearing without Schulte's attendance, Judge Corona issued a third OSC for contempt. Schulte was never personally served with, or arraigned on, the third OSC.

The next day, Long requested a fourth contempt OSC. CMLS then filed a motion for disqualification of Judge Corona. Later, Judge Carona recused himself, but did not issue a fourth contempt OSC. The case was transferred to Defendant Judge Snauffer.

In June 2010, Judge Snauffer began to proceed on the first, second, and third contempt OSC's, and also on Long's fourth request for contempt, even though no OSC had issued for that request. Judge Snauffer combined all of the contempt allegations into one trial. In the trial, Schulte argued inter alia that his rights were repeatedly violated. Judge Snauffer refused to consider arguments on the orders issued by Judge Franson, including that the orders were void as being issued by a disqualified judge, ambiguity, and Long committed fraud on Judge Franson. Judge Snauffer also refused to consider Schulte's arguments regarding subject matter jurisdiction and refused to allow Schulte to call and/or question witnesses against him, even though those witnesses had presented testimony against Schulte and had been subpoenaed.

On October 22, 2010, Judge Snauffer issued his ruling. Judge Snauffer did not find Schulte to be in contempt of the first, second, or fourth OSC orders. Judge Snauffer did find Schulte in contempt of all allegations in the third OSC, and also found Schulte violated a twelfth contempt charge, even though there had never been any allegations made regarding a twelfth charge. The twelfth charge was simply "made up." Judge Snauffer ordered Schulte to pay $500 to the Fresno County Superior Court and awarded Long $68,000 in attorney's fees.

Currently, the Injunctive Orders' ambiguity has led the Superior Court in a related matter to attempt to infringe on Wilkins's right to her company and CMLS's right to counsel.

On October 20, 2011, Plaintiffs filed this lawsuit. On March 26, 2012, per stipulation and order, Plaintiffs' only claim for damages, specifically ¶ 72 of the complaint, was dropped. Instead of damages, Plaintiffs pray that this Court grant them declaratory relief on nine separate issues.


1. Rule 12(b)(1) - Facial Challenge

Federal Rules of Civil Procedure 12(b)(1)allows for a motion to dismiss based on lack of subject matter jurisdiction. See Fed. R. Civ. Pro. 12(b)(1). It is a fundamental precept that federal courts are courts of limited jurisdiction. Vacek v. United States Postal Serv., 447 F.3d 1248, 1250 (9th Cir. 2006). Limits upon federal jurisdiction must not be disregarded or evaded. Owen Equipment & Erection Co. v. Kroger, 437 U.S. 365, 374 (1978). "It is presumed that a cause lies outside this limited jurisdiction, and the burden of establishing the contrary rests upon the party asserting jurisdiction." Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 377 (1994); Vacek, 447 F.3d at 1250. Rule 12(b)(1) motions may be either facial, where the inquiry is confined to the allegations in the complaint, or factual, where the court is permitted to look beyond the complaint to extrinsic evidence. Wolfe v. Strankman, 392 F.3d 358, 362 (9th Cir. 2004); Safe Air For Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004); Savage v. Glendale Union High School Dist. No. 205, 343 F.3d 1036, 1040 n.2 (9th Cir. 2003); White v. Lee, 227 F.3d 1214, 1242 (9th Cir. 2000). When a defendant challenges jurisdiction "facially," all material allegations in the complaint are assumed true, and the question for the court is whether the lack of federal jurisdiction appears from the face of the pleading itself. See Wolfe, 392 F.3d at 362; see also Meyer, 373 F.3d at 1039.

2. Rule 12(b)(6)

Under Federal Rule of Civil Procedure 12(b)(6), a claim may be dismissed because of the plaintiff's "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). A dismissal under Rule 12(b)(6) may be based on the lack of a cognizable legal theory or on the absence of sufficient facts alleged under a cognizable legal theory. Johnson v. Riverside Healthcare Sys., 534 F.3d 1116, 1121 (9th Cir. 2008); Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). In reviewing a complaint under Rule 12(b)(6), all allegations of material fact are taken as true and construed in the light most favorable to the non-moving party. Marceau v. Blackfeet Hous. Auth., 540 F.3d 916, 919 (9th Cir. 2008); Vignolo v. Miller, 120 F.3d 1075, 1077 (9th Cir. 1999). However, the Court is not required "to accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences." In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1056-57 (9th Cir. 2008); Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). To "avoid a Rule 12(b)(6) dismissal, "a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 667-78 (2009); see Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 570 (2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678. That is, "for a complaint to survive a motion to dismiss, the non-conclusory 'factual content,' and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief." Moss v. United States Secret Serv., 572 F.3d 962, 969 (9th Cir. 2009); see also Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011).


A. Fresno County Superior Court

Plaintiffs have named the Fresno County Superior Court as a Defendant. The Eleventh Amendment bars suits against a State or its agencies for all types of relief, regardless of the nature of the relief, absent unequivocal consent by the state to be sued. Pennhurst v. Halderman, 465 U.S. 89, 100 (1984); Johnson v. Rancho Santiago Cmty. College Dist., 623 F.3d 1011, 1022 n.5 (9th Cir. 2010); Krainski v. State ex rel. Bd. of Regents, 616 F.3d 963, 967 (9th Cir. 2010). The California Superior Courts are arms of the state of California. See Simmons v. Sacramento County Superior Court, 318 F.3d 1156, 1161 (9th Cir. 2003); Greater L.A. Council on Deafness, Inc. v. Zolin, 812 F.2d 1103, 1110 (9th Cir. 1987). Because the Fresno County Superior Court is an arm of the state of California, it is entitled to Eleventh Amendment immunity for all of the declaratory claims alleged against ...

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