United States District Court, N.D. California
AARON GREENSPAN; THINK COMPUTER FOUNDATION; THINK COMPUTER CORPORATION, Plaintiffs,
ADMINISTRATIVE OFFICE OF THE UNITED STATES COURTS; MICHEL ISHAKIAN, in her official capacity on behalf of the Administrative Office of the United States Courts; WENDELL SKIDGEL, in his official capacity on behalf of the Administrative Office of the United States; UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA RICHARD WIEKING, in his official capacity on behalf of the United States District Court for the Northern District of California; CLAUDIA WILKEN, in her official capacity on behalf of the Untied States District Court for the Northern District of California; and AMERICAN BAR ASSOCIATION, Defendants.
AMENDED ORDER DISMISSING CORPORATE PLAINTIFFS FOR FAILURE TO OBTAIN LEGAL REPRESENTATION; GRANTING ALL MOTIONS TO DISMISS; DENYING MOTION FOR LEAVE TO FILE SECOND AMENDED COMPLAINT; GRANTING LEAVE TO AMEND
JEFFREY T. MILLER, District Judge.
On December 1, 2014, the court entered an Order Dismissing Corporate Plaintiffs for Failure to Obtain Legal Representation; Granting all Motions to Dismiss; Denying Motion for Leave to File Second Amended Complaint and Granting Leave to Amend ("Order"). Through inadvertence, the court failed to address the American Bar Association's motion to dismiss the Tenth Claim for Violation of the Cartwright Act. This Amended Order addresses and dismisses the Tenth Claim with prejudice and without leave to amend.
On August 21, 2014, the court issued an Order to Show Cause ("OSC) to Plaintiffs Think Computer Foundation ("Foundation") and Think Computer Corporation (collectively "Corporate Plaintiffs") to show cause why they should not be dismissed as parties for failure to obtain counsel. (Ct. Dkt. 44). Having carefully considered Plaintiffs' response to the OSC, (Ct. Dkt. 48), Plaintiffs' response to an earlier OSC issued by the Honorable Judge Beth Labson Freeman, (Ct. Dkt. 24), the response to the OSC filed by defendant American Bar Association ("ABA"), (Ct. Dkt. 50), the court record and pertinent legal authorities, the court dismisses Corporate Plaintiffs from this action without prejudice for failure to obtain legal representation. Corporate Plaintiffs will be dismissed from this action with prejudice unless, within 60 days of entry of this order, (1) Corporate Plaintiffs retain legal representation and (2) retained counsel files a Notice of Appearance.
This order also addresses the motions to dismiss filed by Defendants Administrative Office of the United States Courts ("AO"); Michel Ishakian, in her Official Capacity on behalf of the AO; Wendell Skidgel, in his official capacity on behalf of the AO; United States District Court for the Northern District of California ("CAND"); Richard Wieking, in his official capacity on behalf of the CAND; Claudia Wilken,  in her official capacity on behalf of the CAND; and the American Bar Association ("ABA"). Plaintiffs oppose all motions. For the reasons set forth below, the court grants all motions to dismiss, dismisses the First through Seventh, the Ninth, and Tenth causes of action with prejudice, dismisses the Eighth cause of action without prejudice, and grants Plaintiff 30 days leave to amend from the date of entry of this order to file an amended Eighth cause of action in a Third Amended Complaint. The court also denies Plaintiffs' motion for leave to file the proposed Second Amended Complaint.
On May 23, 2014, Corporate Plaintiffs commenced this action seeking injunctive and declaratory relief. Among other things, the operative First Amended Complaint ("FAC"), filed on June 16, 2014, added Aaron Greenspan as a party plaintiff. (Ct. Dkt. 23). Greenspan "is the founder, President, CEO, Chairman of the Board of Directors, and 100% owner of Think Computer Corporation, as well as the founder, President, and Chairman of the Board of Directors of Think Computer Foundation." (FAC ¶17). Think Foundation is an Ohio non-profit corporation recognized by the Internal Revenue Service as a tax-exempt organization under §501(c)(3) of the Internal Revenue Code." (FAC ¶18). Think Foundation operates a website (PlainSite.org) "that compiles government information, including information from the Courts via PACER, in order to make such information more accessible to the general public." Id . Think Corporation is incorporated in Delaware with its principal place of business in Mountain View, California. Think Corporation developed the software used by Foundation in operating PlainSite.org and it "plays an active role in its management." (FAC ¶19).
Defendant AO is a federal governmental entity that "overseas PACER in all respects." (FAC ¶20). The central PACER website is one of many individual PACER websites "that the various district, bankruptcy, and appellate courts each maintain with some degree of autonomy." (FAC ¶5). Defendant Michel Ishakian, sued in his official capacity, is an alleged federal employee of the AO, tasked with managing PACER, who personally communicated with Greenspan concerning PACER's fee structure. (FAC ¶21). Defendant Wendell Skidgel, sued in his official capacity, is an alleged Senior Attorney Advisor for the AO and personally communicated with Greenspan concerning PACER and its fee structure. Defendant CAND "is a federal district court in the Ninth Circuit with control over its own Local Rules." (FAC ¶23). Defendant Richard Wieking, sued in his official capacity, is the Clerk of Court of the CAND. The Honorable Judge Claudia Wilken, sued in her official capacity, is the Chief Judge of the CAND. She is allegedly responsible for "maintaining and setting the direction of the District Court's Local Rules." (FAC ¶25). Defendant ABA is the alleged "sole entity responsible for the accreditation of law schools within the United States" and "has participated jointly and severally with various state bar associations and courts to promulgate, validate, and enforce its anti-competitive policies." (FAC ¶26).
The First Claim, asserted against Chief Judge Wilken, Clerk of Court Wieking, and the CAND (collectively the "CAND Defendants"), is for the alleged violation of 42 U.S.C. ¶1983 based upon the adoption of L.R. 3-9(b), which requires corporations to obtain legal representation, and L.R. 5-1(b), which requires pro se litigants to seek and obtain permission from the judge assigned to their case in order to become an ECF user. Such conduct allegedly violates the equal protection clause of the Fifth Amendment. (Ct. Dkt. 34 ¶2). The Second Claim, asserted against the CAND Defendants, is based upon the same conduct described in the First Claim but allegedly arises under the Due Process clause of the Fifth Amendment. Id . The Third Claim, asserted against the CAND Defendants, is for the alleged violation of 42 U.S.C. §1983 based upon the adoption of L.R. 3-9(b). Such conduct allegedly violates the First Amendment under the theory that the Corporate Plaintiffs may represent themselves in court proceedings pro se as "a form of political expression and association." (FAC ¶123).
The Fourth Claim, asserted against Defendants Ishakian, Skidgel, and the AO (collectively the "AO Defendants"), is for the alleged violation of 42 U.S.C. §1983 based upon L.R. 5-1(b) and the fee structure imposed by the AO for obtaining copies of the court docket, charging $0.10 per page. Such conduct allegedly violates the "Equal Protection Clause of the Fifth Amendment." The Fifth Claim, asserted against the AO Defendants, is based upon the same conduct described in claim four but allegedly arises under the Due Process Clause of the Fifth Amendment. The Sixth Claim, asserted against the AO Defendants, alleges that they violated his First Amendment rights by "interfer[ring] with Plaintiff's ability to write and speak about government activities by imposing an unlawful cost structure for PACER data." (FAC ¶148). The Seventh Claim, asserted against the AO Defendants, alleges that the copying fee of $0.10 per page violates the "E-Government Act of 2002, which Congress intended to promote access to public domain information, by being unreasonable and far in excess of the extent necessary to operate and improve PACER." (FAC ¶155). The Eighth Claim, asserted against the AO Defendants, alleges a Federal Tort Claims Act ("FTCA") claim, 28 U.S.C. §1346, and seeks the return of the copying costs ($1, 077.56) of PACER documents.
The Ninth Claim, asserted against the ABA, alleges a violation of the Sherman Act, 15 U.S.C. §2, based upon allegations that the ABA limits "the number of ABA-accredited law schools issuing degrees, " lobbies for "Restrictive Local Rules, " and "has monopoly power in the submarket for individuals capable of representing corporations before the federal courts, as well as in the market for legal professionals." (FAC ¶166). As a consequence of the alleged "monopoly power, " otherwise qualified prospective legal professionals allegedly cannot obtain a license to practice law without attending "a small number of extraordinarily expensive ABA-certified law schools." (FAC ¶168). The ABA also bills at hourly rates ranging from $250 to $1, 000 per hour, participated in schemes designed to exclude non-attorneys from having access to justice, and limited the legal profession such that the majority of Americans do not have access to affordable and necessary legal assistance. (FAC ¶168). The Tenth Claim, asserted against the ABA, alleges a violation of the Cartwright Act, Cal. Bus. and Prof. Code § 16700 et seq., based upon allegations that the "ABA limits the quantity of ABA-accredited law schools, " "imposes and/or recommends policies intended to artificially increase the market price of legal services, " "encouraged Restrictive Local Rules and policies that amount to refusals to deal with non-attorneys." (FAC ¶¶187, 188, 191). "Corporate Plaintiffs have been damaged in the amount spent on unnecessary attorney's fees as a result of Defendant ABA's unlawful activity, or at least $50, 000." (FAC ¶192)
Plaintiffs allege that they have spent in excess of $1, 000 in expenses related to PACER. In broad brush, Plaintiff argues that the PACER fees
are being collected in violation of the E-Government Act of 2002, [and that] PACER is a colossal mess from a technological perspective that routinely overcharges users for errors, failed search results, and documents that the system has recorded as already having been purchased. Just as importantly, CM/ECF, the e-filing component of PACER, offers parties to a case one free copy of each document in that case - except when the party does not have access, which is often.
(Ct. Dkt. 41, Oppo. at p.2:12-17). The AO charges users $0.10 per page for PACER data and $2.40 per audio file. (FAC ¶27). The FAC alleges that the PACER fee schedule states that "No fee is charged for access to judicial opinions." This is allegedly false because "PACER very often charged $0.10 per page for access to judicial opinions." (FAC ¶30).
The FAC generally alleges two broad categories of wrongs, one arising from the PACER system and the other from the requirement that corporate entities must be represented by an attorney as required by federal law and Civil Local Rule 3-9(b). The FAC alleges that the fees collected through PACER violate the E-Government Act of 2002. The controlling statute provides "[t]he fees and costs to be charged and collected in each court of appeals shall be prescribed from time to time by the Judicial Conference of the United States. Such fees and costs shall be reasonable and uniform in all the circuits." 28 U.S.C. §1913. The FAC alleges that the fees charged are excessive and cites a Princeton University Center report which identifies that, in 2010, PACER's expenses were about $25 million and its revenues of $90 million thus resulting in a profit of $65 million. (FAC ¶¶34 - 35). The FAC alleges that the practice of overcharging for PACER continues to the present date. Greenspan's request for a refund of PACER fees has been denied by the AO. (FAC ¶54).
The other central claim is that corporate entities should be able to represent themselves in federal court. The FAC broadly alleges a First Amendment right to self-representation by fictitious entities. In addition, the requirement for legal representation is financially burdensome to corporations, particularly those classified as "small business." (FAC ¶¶60 - 66).
The essence of the claim against the ABA is that the ABA participates in proposed changes to the Federal Rules of Civil Procedure and Local Rules for "the true purposes... to attempt to increase demand for and exclude competition with attorneys, whose private interests are collectively represented by Defendant ABA." (FAC ¶96). Through these actions, the ABA allegedly conspires with its members "to impose restrictive Local Rules." (FAC ¶97).
On June 11, 2014, Judge Freeman issued an Order to Show Cause why the original complaint, filed by the Corporate Plaintiffs only, should not be dismissed because the Corporate Plaintiffs were not represented by counsel. On June 16, 2014 the FAC was filed, adding Greenspan as a plaintiff. On July 17, 2014, Judge Freeman issued an order, noting that Corporate Plaintiffs could appear only through licensed counsel. However, as Greenspan was now a party to the action, the court left "for another day the determination ...