Opinion
01 Civ. 4260 (RWS).
July 17, 2003.
Roy Commer, Pro se, Attorney for Plaintiff.
Barry I. Levy, Esq., Elan R. Kandel, Esq., Shapiro, Beilly, Rosenberg, Aronowitz, Levy Fox, New York, NY, Attorneys for Defendant.
OPINION
Plaintiff pro se Roy Commer ("Commer") has moved to amend his complaint. For the following reasons, the motion is denied.
Facts
The relevant facts and parties are discussed in greater detail in Commer v. AFSCME, No. 01 Civ. 4260, 2001 WL 1658191 (Dec. 27, 2001) ("Commer II") and Commer v. AFSCME, No. 01 Civ. 4260, 2002 WL 844346 (S.D.N.Y. May 2, 2002) ("Commer III"),Commer v. AFSCME, No. 01 Civ. 4260, 2002 WL 31014830 (S.D.N.Y. Sept. 6, 2002) ("Commer IV"), familiarity with which is presumed.
Prior Proceedings
Commer filed his original complaint on May 18, 2001, asserting that American Federation of State, County and Municipal Employees ("AFSCME") International violated Sections 101 and 464 of the Labor Management Reporting and Disclosure Act of 1959, 29 U.S. § 411(a)(2) ("LMRDA"). Commer requested that he be reinstated to his position as President of Local 375, and all other positions within AFSCME. He also sought an order dissolving the administratorship imposed upon District Council 37 ("DC 37") by AFSCME International.
On December 27, 2001, Commer's § 101 claim was dismissed, but summary judgment was denied as to the § 464 claim. Commer II, 2001 WL 1658191.
In a separate action against AFSCME, Commer's § 101 claim was initially dismissed by this Court, see Commer v. McEntee, 145 F. Supp.2d 333 (S.D.N.Y. 2001). The Court's ruling on that claim was reversed by the Second Circuit, and the § 101 claim was revived. See Commer v. Giuliani, 34 Fed.Appx. 802, 2002 WL 826462 (2d Cir. May 1, 2002).
On February 26, 2002, the administratorship was dissolved, and new officers were installed for DC 37. As a result, on May 2, 2002, Commer's remaining § 464 claim was dismissed as moot.Commer III, 2002 WL 844346, at *1-2. However, Commer was given the opportunity to move to amend his complaint to assert a viable claim. Id. at *2.
On June 3, 2002, Commer again filed a motion for leave to amend his complaint and attached a proposed amended complaint. That complaint again sought relief under §§ 101 and 464 despite the Court's earlier dismissals of those claims, and further sought to posit a cause of action pursuant to LMRA § 501. On September 6, 2002, Commer's motion to amend his complaint was denied, with leave to replead. Commer IV, 2002 WL 31014830, at *2-3.
On April 11, 2003, Commer moved for a second time to amend his complaint, attaching a new proposed amended complaint. In this latest round, Commer seeks relief under the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961, et seq. Commer continues to seek relief under LMRDA § 464, 29 U.S.C. § 464, in spite of this Court's repeated dismissals of such claims and denial of leave to replead such claims. Finally, Commer cites a number of other statutes, including LMRDA §§ 101 and 501, 29 U.S.C. § 411(a)(2) and 501, even while insisting that these statutes are cited "neither as claims nor for jurisdiction." Proposed Amended Complaint ("Compl.") at § 2.
Discussion I. Standard of Review
In addressing the present motion, the Court is mindful that the plaintiff is proceeding pro se and that his submissions should be held "`to less stringent standards than formal pleadings drafted by lawyers. . . .'" Hughes v. Rowe, 449 U.S. 5, 9, 101 S.Ct. 173, 176 (1980) (per curiam) (quoting Haines v. Kerner, 404 U.S. 519, 520, 92 S.Ct. 594, 595 (1972)); see also Ferran v. Town of Nassau, 11 F.3d 21, 22 (2d Cir. 1993). Indeed, district courts should "read the pleadings of a pro se plaintiff liberally and interpret them to raise the strongest arguments they suggest.'" McPherson v. Coombe, 174 F.3d 276, 280 (2d Cir. 1999) (quoting Burgos v. Hopkins, 14 F.3d 787, 790 (2d Cir. 1994). Nevertheless, the Court is also aware thatpro se status "`does not exempt a party from compliance with relevant rules of procedural and substantive law." Traquth v. Zuck, 710 F.2d 90, 95 (2d Cir. 1983) (quotations omitted).
II. Leave to Amend The Complaint Is Denied
Rule 15(a) of the Federal Rules of Civil Procedure provides that the district court should freely grant leave to amend. Fed.R.Civ.P. 15(a). However, a district court may properly deny leave to amend when amendment would be futile or when there is no merit to the proposed amendments. Jones v. New York State Div. of Military and Naval Affairs, 166 F.3d 45, 50 (2d Cir. 1999); Hunt v. Alliance North American Gov't Income Trust, Inc., 159 F.3d 723, 728 (2d Cir. 1998).
Commer has once again repleaded the same complaint, alleging the same facts and seeking the same relief. The primary difference is that he has added a RICO claim. Commer alleges that AFSCME, along with "John Does 1-36," conspired both to remove Commer from the presidency of Local 375 and to participate in larger schemes which involved, "but were not limited to embezzlement, money laundering, conversion of fund monies to personal profit; offer, acceptance or solicitation to influence the operation of an employee benefit plan, the fraudulent manipulation of local union elections, the fraudulent manipulation of a ratification vote on a union-wide collective bargaining agreement with the City of New York and the fraudulent manipulation of an administratorship." Compl. at pp. 1-2.
AFSCME argues that Commer lacks standing to assert a RICO claim, that Commer has not stated a viable RICO claim because he fails to state the substantive provisions of RICO that AFSCME is alleged to have violated and fails to state the existence of an "enterprise," and fails to plead a "pattern of racketeering activity," as required by the RICO statute, 18 U.S.C. § 1962. Because the Court agrees that Commer lacks standing to assert a RICO claim, AFSCME's other arguments will not be addressed.
A. Commer Lacks Standing to Assert A RICO Claim
Commer's proposed amended complaint references the civil RICO statute, 18 U.S.C. § 1964(c), as well as several criminal statutes which the defendant is presumably alleged to have violated, and which make up the underlying violations which may form the basis for a civil RICO action. See 18 U.S.C. § 1961(1). The RICO civil liability provision confers standing to "[a]ny person injured in his business or property by reason of a violation of section 1962 . . ." Motorola Credit Corp. v. Uzan, 322 F.3d 130, 135 (2d Cir. 2003) (quoting 18 U.S.C. § 1964(c)). To demonstrate standing, "a plaintiff must demonstrate, `(1) the defendant's violation of § 1962, (2) injury to business or property, and (3) causation of the injury by the violation." Id. (quoting Hecht v. Commerce Clearing House, Inc., 897 F.2d 21, 21 (2d Cir. 1990)). In order to satisfy the causation requirement, the "[d]efendant's injurious conduct [must be] both the factual and the proximate cause of the injury alleged." Lerner v. Fleet Bank, N.A., 318 F.3d 113, 119 (2d Cir. 2003) (quoting Holmes v. Securities Investor Protection Corp., 503 U.S. 258, 268 (1992)).
Perhaps inadvertently, Commer also includes 18 U.S.C. § 371, conspiracy to commit offense or defraud the United States, which may not form the basis for a civil RICO suit.
Commer has failed to make any allegations demonstrating that he has suffered any injury to his business or his property. The only individual injury alleged by Commer is his removal as president of Local 375 by the AFSCME Judicial Panel, and his subsequent expulsion from membership in AFSCME. Compl. at ¶ 1. Such an injury is insufficient to confer standing on Commer where Commer's removal as president is not caused by an act that is independently wrongful under RICO, that is, where the act is not an act of racketeering. In Beck v. Prupis, 529 U.S. 494 (2000), the Supreme Court held that a person may not bring suit under the civil RICO statute "for injuries caused by an overt act that is not an act of racketeering or otherwise unlawful under the statute." Beck, 529 U.S. at 507. The petitioner's theory in Beck was that the overt act done in furtherance of respondent's conspiracy was the termination of his employment.Id. at 499. The Supreme Court held that such an overt act was not an act of racketeering. Id. (citing 18 U.S.C. § 1961(1)). The removal of Commer as president of Local 375 by AFSCME is similarly not an act of racketeering, and Commer may therefore not bring suit under 18 U.S.C. § 1964(c).
In addition to alleging injury to Commer personally, Commer's proposed amended complaint also alleges that the members of DC 37 and Local 375 were harmed by (a) the looting and diversion of funds from the treasuries of DC 37 as well as its affiliated benefit funds and Local 375 allegedly by AFSCME along with its "coconspirators and individual persons and entities presently unknown," (b) the alleged fraudulent manipulation of local union elections and ratification vote of a collective bargaining agreement, and (c) alleged mismanagement of the administratorship imposed by AFSCME on DC 37. See Compl. at ¶¶ 1, 9, 13.
Commer also lacks standing to bring a RICO suit making these allegations in a personal capacity because the injury he alleges has been incurred not by Commer personally but by the entire membership of Local 375 and DC 37. The damages alleged by Commer derive from injury to a third party, and Commer accordingly lacks standing to bring a RICO action. See Laborers Local 17 Health Benefit Fund v. Philip Morris, Inc., 191 F.3d 229, 236 (2d Cir. 1999). In general, a plaintiff
will not be permitted to bring a suit under RICO, in a personal capacity, where the injury he alleges has been incurred by an association or organization of which he is a member, and any derivative injury to him is no different from that sustained by similarly situated members of the same association or organization.Pappas v. Passias, 887 F. Supp. 465, 470-71 (E.D.N.Y. 1995),aff'd 166 F.3d 1201 (2d Cir. 1998) (unpublished opinion); see also Bona v. Barasch, No. 01 Civ. 2289, 2003 WL 1395932, at *24-27 (S.D.N.Y., March 20, 2003) (denying standing to union members bringing RICO claims where damages resulted from injuries to the unions); Mayes v. Local 106, 165 L.R.R.M. 2689, 1999 WL 60135, at *3-4 (N.D.N.Y. Feb. 5, 1999), aff'd 201 F.3d 431 (2d Cir. 199), cert. denied, 121 S.Ct. 51 (2000) (same). The rule prohibiting an individual plaintiff from pursuing a RICO claim based upon derivative injuries shared by members of an association or organization is based upon the recognition that a "RICO claim essentially is an asset of the association or organization that has been injured through a violation of 18 U.S.C. § 1962, and that the prosecution of a RICO suit by a single member would impair the rights of other similarly situated members . . . to that asset." Pappas, 887 F. Supp. at 471 (citing Rand v. Anaconda-Ericsson, Inc., 794 F.2d 843, 849 (2d Cir.), cert. denied, 479 U.S. 987 (1986)).
Because Commer's proposed amended complaint fails to demonstrate that Commer suffered a direct injury to his own business or property, or any injury that is separate and distinct from that allegedly sustained by every other similarly situated member of Local 375 or DC 37, leave to amend the complaint to include a civil RICO claim is denied.
B. Commer's LMRDA § 464 Claim Has Been Repeatedly Rejected By This Court
In his proposed amended complaint, Commer requests leave to add a claim under LMRDA § 464. See Compl. at ¶ 2. This Court has on two occasions rejected Commer's § 464 claims. InCommer III, the Court dismissed Commer's claim against AFSCME, stating that,
AFSCME contends that Commer has sought leave to amend his complaint to add a LMRDA § 101 claim. See Def. Memo at p. 18. While Commer does reference § 101 in the proposed amended complaint, Commer specifically notes that § 101 and other listed statutes are cited "neither as claims nor for jurisdiction." Compl. at ¶ 2. While it is not clear why Commer cites § 101, Commer has wisely not sought leave to amend his complaint to add a § 101 claim, as Commer already has a effectively identical § 101 claim pending against AFSCME in another action. See Commer v. McEntee, 00 Civ. 7913, 2003 WL 1878239, (S.D.N.Y. Apr. 11, 2003).
Not only have elections been scheduled in this case, they have been completed. New officers are in place and the administratorship has been lifted. Therefore, Commer's § 464(a) claim has become moot, and his complaint is hereby dismissed.Commer III, 2002 WL 844346 at *1. On June 3, 2002, Commer requested leave to amend his complaint to include a § 464 claim "despite this Court's earlier dismissals" of that claim. Commer IV, 2002 WL 31014830, at *1. The Court rejected Commer's motion, holding that he had "not overcome the hurdles discussed" in earlier decisions of the Court. Id. at *2 (citing Commer III and Commer II). In that decision, the Court granted Commer leave to amend his complaint again "except to the extent that he seeks to plead the same §§ 101 and 464 claims." Id. Because Commer has not based his latest § 464 claim on any facts not previously reviewed by this Court, leave to amend the complaint to add a § 464 claim is denied.
III. Sanctions With Respect to the § 464 Claim Are Appropriate
AFSCME seeks reimbursement for the legal fees it has expended in preparing opposition papers in response to Commer's motion for leave to amend his complaint. A district court may impose sanctions pursuant to Fed.R.Civ.P. 11 as an exercise of its inherent authority. See Sassower v. Field, 973 F.2d 75, 79-80 (2d Cir. 1992). Sanctions are appropriate for parties who are "acting in bad faith, vexatiously, wantonly, or for oppressive reasons." Id. at 80-81 (citing Chambers v. NASCO, Inc., 501 U.S. 32, 45-46 (1991)).
Commer has been explicitly warned that any further attempt to bring a § 464 claim would risk the imposition of sanctions. After denying leave to amend in Commer IV, the Court stated that:
Commer now has twice been told that this Court rejects his arguments pursuant to § 101 and § 464. Any assertion of these claims in an amended complaint based on essentially the same facts would not be "warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law."Id., at *3 (quoting Fed.R.Civ.P. 11(b)(2)). Despite this clear warning, Commer has asserted a § 464 claim in his proposed amended complaint. The Court will therefore sanction Commer by awarding AFSCME attorney's fees for their defense of Commer's motion for leave to amend his complaint to include a § 464 claim. See Golub v. University of Chicago, 87 Civ. 2891, 88 Civ. 0597, 1992 WL 333641, at *3 (E.D.N.Y. 1992) (sanctioningpro se litigant who had "been adequately warned of the consequences which may result from his behavior."). Because Commer had not previously been warned with respect to his attempt to plead a RICO claim, and because Commer did not in fact attempt to re-plead a § 101 claim, attorney's fees for defense of those claims will not be awarded.
Because a court "must take into account the financial circumstances of the plaintiff" when awarding attorney's fees,see Sassower, 973 F.2d at 81, Commer will first be permitted to make a showing that he is unable financially "to respond in the payment of attorneys' fees and sanctions." Id.
IV. Leave to Replead Is Denied
Commer has now moved twice for leave to amend this complaint. He has also already filed at least "three complaints, ignored without adverse consequences the limits placed on the scope of the second amended complaint, and shows no likelihood of curing any of the deficiencies that resulted in the aspects of this decision adverse to him." America Online Latino v. America Online, Inc., 250 F. Supp.2d 351, 365 (S.D.N.Y. 2003). Such circumstances have alone been sufficient to deny leave to replead. See id. Further, another complaint of Commer's which also included previously-rejected claims was recently dismissed by this Court. And Commer is continuing to litigate an LMRDA § 101 claim in yet another action. See Commer v. McEntee, 00 Civ. 7913, 2003 WL 1878239, (S.D.N.Y. Apr. 11, 2003). In light of these facts, leave to replead is denied.
Conclusion
Because the amendments Commer proposes to make to his complaint would not remedy the defects of his earlier complaints, and because Commer has re-pleaded causes of action already rejected by this Court, Commer's motion for leave to amend his complaint is denied, and attorney's fees are awarded to AFSCME for defending the motion with respect to the § 464 claim only. Finally, leave to replead the complaint is denied.
It is so ordered.