“[A]llegations in a complaint…may not 24 simply recite the elements of a cause of action, but must contain sufficient allegations of 25 underlying facts to give fair notice and to enable the opposing party to defend itself effectively.”
How later courts described this case
- “[A]llegations in a complaint…may not 24 simply recite the elements of a cause of action, but must contain sufficient allegations of 25 underlying facts to give fair notice and to enable the opposing party to defend itself effectively.”
- “Threadbare recitals of the elements of 17 a cause of action, supported by mere conclusory statements, do not suffice.”
Written by the judges who cited it.
The opinion
1
2
3
4 UNITED STATES DISTRICT COURT
5 NORTHERN DISTRICT OF CALIFORNIA
6
7 THOMAS E ROTHSCHILD, Case No. 23-cv-01713-LJC
8 Mr. Rothschild,
ORDER SCREENING SECOND
9 v. AMENDED COMPLAINT PURSUANT
TO 28 U.S.C. § 1915(E)(2);
10 STEPHANIE ANN GILDRED, et al., CONTINUING CASE MANAGEMENT
CONFERENCE
Defendants.
11
Re: ECF No. 22
12
13 Plaintiff Thomas E. Rothschild is proceeding in this case in forma pauperis (IFP). ECF
14 No. 10. The Court previously screened his original Complaint pursuant to 28 U.S.C.
15 § 1915(e)(2)(B) (First Screening Order) and ordered Mr. Rothschild to file an amended complaint
16 that addressed certain deficiencies identified by the Court as to the basis for its subject matter
17 jurisdiction. Id. at 1.1 Mr. Rothschild filed his Second Amended Complaint (SAC) on July 27,
18 2023.2 ECF No. 22. But the Court nevertheless remains under a continuing duty to dismiss a case
19 filed without the payment of the filing fee whenever it determines that “(A) the allegation of
20 poverty is untrue; or (B) the action or appeal (i) is frivolous or malicious; (ii) fails to state a claim
21 on which relief may be granted; or (iii) seeks monetary relief against a defendant who is immune
22 from such relief.” 28 U.S.C. § 1915(e)(2)(A)-(B).
23
24
1 Unless specified otherwise, the Court refers to the PDF page number generated by the Court’s e-
filing system.
25
2 Mr. Rothschild originally filed his First Amended Complaint (FAC) on June 30, 2023. ECF No.
12. However, at the Initial Case Management Conference on July 13, 2023, he requested leave to
26
file another amended complaint, as the FAC had inadvertent omissions. ECF No. 16. The Court
granted the request, and Mr. Rothschild was to file his SAC by July 20, 2023. Id. He filed a
27
Motion for Extension of Time to Amend on July 21, 2023, the day after the SAC was due. ECF
1 Having considered Mr. Rothschild’s SAC, the Court finds that it fails to state a claim on
2 which relief may be granted pursuant to Section 1915(e)(2)(B)(ii). The Court orders Mr.
3 Rothschild to file a third amended complaint that addresses the deficiencies identified in this
4 screening order by September 22, 2023. In addition, the Court requires additional information to
5 make a determination as to Mr. Rothschild’s allegations of poverty under Section 1915(e)(2)(A).
6 Therefore, he is also ordered to submit a new IFP application by September 22, 2023 that includes
7 the information requested by the Court below. To allow time for Mr. Rothschild to amend, the
8 Case Management Conference, currently scheduled for September 14, 2023, shall be continued 90
9 days.
10 I. BACKGROUND
11 In its First Screening Order, the Court summarized the events giving rise to Mr.
12 Rothschild’s claims and so incorporates that background by reference here. See ECF No. 10 at 2.
13 After screening the Complaint, the Court found that it did not allege a basis for subject matter
14 jurisdiction. Id. at 3-4. Mr. Rothschild was given leave to amend his Complaint. Id. at 5.
15 In the SAC, Mr. Rothschild has added additional defendants—Otto Miller, Kurt Stiehl,
16 Otto Miller Development, Miller Stiehl Properties, Murphywood, Inc., Louisa Zee Kao, Stewart
17 Title, Stewart Guaranty Corp., and Stewart Corporation. ECF No. 22 at 1. He has also added
18 additional federal and state law claims—conspiracy, violations of Title II of the American with
19 Disabilities Act (ADA), violations of the Fair Housing Act (FHA), civil conspiracy, unfair
20 business practices, breach of contract, and tortious interference with business expectancy.3 Id.
21 II. LEGAL STANDARD
22 In screening an IFP complaint under Section 1915(e)(2)(B), courts assess whether the
23 complaint “lacks an arguable basis either in law or in fact.” Neitzke v. Williams, 490 U.S. 319,
24 325 (1989). Courts can dismiss complaints founded on “wholly fanciful” factual allegations for
25
26
3 In his original Complaint, Mr. Rothschild also included a claim for “bad faith.” ECF No. 1 at 1.
He appears to have dropped that claim in the SAC in favor of his new state law claims for
27
conspiracy, unfair business practices, breach of contract, and tortious interference with business
1 lack of subject matter jurisdiction. Franklin v. Murphy, 745 F.2d 1221, 1228 (9th Cir. 1984). A
2 court can also dismiss a complaint where it is based solely on conclusory statements, naked
3 assertions without any factual basis, or allegations that are not plausible on their face. See
4 Ashcroft v. Iqbal, 556 U.S. 662, 677–78 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555–
5 57 (2007); see also Erickson v. Pardus, 551 U.S. 89 (2007) (per curiam). Ordinarily the Court
6 must give an IFP plaintiff leave to “amend their complaint unless it is absolutely clear that the
7 deficiencies of the complaint could not be cured by amendment.” Franklin, 745 F.2d at 1235, n.9.
8 III. DISCUSSION
9 A. Federal Question Jurisdiction
10 Mr. Rothschild alleges that the Court has federal question jurisdiction in this case based on
11 his claims for violations of the ADA and FHA. ECF No. 22 at 3. As an initial matter, Mr.
12 Rothschild conflates his ADA claim with his FHA claim and makes allegations that he applies to
13 both within a single, six-page section of the SAC. Id. at 18-23. And over four of the six pages are
14 simply a rudimentary recitation of what Mr. Rothschild needs to show to successfully prove
15 violations of the ADA and the FHA. See id. at 18-21, 23. The Court will not consider such
16 allegations or accept them as true. Iqbal, 556 U.S. at 678 (“Threadbare recitals of the elements of
17 a cause of action, supported by mere conclusory statements, do not suffice.”)
18 The only factual allegations concerning the ADA and FHA claims are that they are “in
19 relation to a recent real estate transaction” and Mr. Rothschild alleges that his disability is based
20 on “alcoholism and drug addiction at the time of the real estate transaction.” ECF No. 22 at 21.
21 Otherwise, his ADA and FHA claims are simply supported by conclusory statements. See, e.g.,
22 id. at 21 (“The defendants conspired to violate the ADA and FHA by engaging in discriminatory
23 actions against [Mr. Rothschild],” they “failed to provide reasonable accommodations,” and they
24 “intentionally denied [Mr. Rothschild] equal access to housing opportunities and subjected him to
25 discriminatory treatment.”) Mr. Rothschild never explains what “discriminatory actions”
26 Defendants took against him or what “discriminatory treatment” he was subjected to. Nor does he
27 ever describe what “reasonable accommodations” he required and how Defendants denied these to
1 than provide “unadorned, the-defendant-unlawfully-harmed-me accusation[s].” Iqbal, 556 U.S. at
2 678 (citation omitted). Elsewhere in the SAC, Mr. Rothschild alleges that he remodeled and
3 invested $1.5 million into a property located in Burlingame, California, that Defendants sold the
4 property without his knowledge or participation, and that this resulted in the denial of Mr.
5 Rothschild’s equitable interest in the property. See ECF No. 22 at 6, 8, 10, 16. But he does not
6 repeat these facts in the section devoted to his ADA and FHA claims, incorporate them by
7 reference, or explain how these facts fit within the legal elements of his ADA and FHA claims and
8 thus entitle him to relief. See Whitaker v. Tesla Motors, Inc., 985 F.3d 1173, 1176 (9th Cir. 2021)
9 (noting that a complaint is “fatally defective” if it includes “only conclusory assertions of
10 discrimination without factual allegations that plausibly gave rise to an entitlement of relief.”) In
11 other words, Mr. Rothschild never elaborates on how the sale of the property in Burlingame
12 constituted discrimination against him because of his alcoholism and drug addiction.
13 More importantly, Mr. Rothschild purports to bring a Title II ADA claim. ECF No. 22 at
14 18. Title II of the ADA states: “[N]o qualified individual with a disability shall, by reason of such
15 disability, be excluded from participation in or be denied the benefits of the services, programs, or
16 activities of a public entity, or be subjected to discrimination by any such entity.” 42 U.S.C.
17 § 12132. To establish a Title II ADA violation, a plaintiff must prove that: “(1) he is a qualified
18 individual with a disability; (2) he was either excluded from participation in or denied the benefits
19 of a public entity’s services, programs, or activities, or was otherwise discriminated against by the
20 public entity; and (3) such exclusion, denial of benefits, or discrimination was by reason of his
21 disability” Duvall v. Cnty. of Kitsap, 260 F.3d 1124, 1135 (9th Cir. 2001) (internal quotation
22 marks and citation omitted). Therefore, Title II provides for liability only against public entities,
23 which it defines as “(A) any State or local government; (B) any department, agency, special
24 purpose district, or other instrumentality of a State or States or local government; and (C) the
25 National Railroad Passenger Corporation, and any commuter authority (as defined in section
26 24102(4) of Title 49).” 42 U.S.C. § 12131(1). None of the Defendants are a State, local
27 government, or governmental entity, nor does Mr. Rothschild make allegations as to whether any
1 government.” Therefore, the SAC has not provided “enough facts to state a claim to relief that is
2 plausible on its face,” at least not as to the Title II ADA claim. Twombly, 550 U.S. at 547.
3 As to Mr. Rothschild’s FHA claim, he does not allege which specific provision(s) of the
4 FHA is at issue. The FHA defines a “discriminatory housing practice” as “an act that is unlawful
5 under section 3604, 3605, 3606, or 3617 of this title.” 42 U.S.C. § 3602. Mr. Rothschild does
6 allege that his FHA claim is in relation to a “real estate transaction” and Section 3605 has to do
7 with “Discrimination in residential real estate-related transactions.”4 But the lack of factual
8 allegations in support of the FHA claim, combined with the open question as to which FHA
9 provision(s) Defendants violated, “do not permit the [C]ourt to infer more than the mere
10 possibility of misconduct,” which by itself does not show that Mr. Rothschild “is entitled to
11 relief.” Iqbal, 556 U.S. at 679 (internal quotation marks and citation omitted).
12 B. Diversity Jurisdiction
13 Because Mr. Rothschild’s original Complaint alleged claims that only arose under state
14 law, the First Screening Order advised him as to the deficiencies in the Complaint with respect to
15 the Court’s exercise of diversity jurisdiction. See ECF No. 10 at 4. If he does not remedy the
16 deficiencies identified above as to his ADA and FHA claims and chooses instead to proceed with
17 just the state law claims, the Court informs Mr. Rothschild that the SAC allegations are
18 insufficient for the Court to exercise diversity jurisdiction.
19 Mr. Rothschild alleges that he resides and is domiciled in Scottsdale, Arizona, and that
20 Defendant Stephanie Gildred resides and is domiciled in Tacoma, Washington. ECF No. 22 at 5.
21 However, for Defendants Louis Zee Kau and Otto Miller, he provides addresses in Burlingame,
22 California, with no allegations as to whether the addresses are where each Defendant “resides”
23 and/or is “domiciled.” Id. at 6. Similarly, for Defendants Miller Stiehl Properties, Stewart
24 Corporation, Stewart Title Company, and Guaranty Stewart Title, Mr. Rothschild provides
25 addresses in Burlingame, California, with no allegations as to whether the addresses are each
26
4 “It shall be unlawful for any person or other entity whose business includes engaging in
27
residential real estate-related transactions to discriminate against any person in making available
1 Defendant’s principal place of business and place of incorporation.5 Id. Even if the Court
2 assumes that the addresses provided are enough to demonstrate each Defendant’s citizenship for
3 the purposes of the Court’s diversity jurisdiction, Mr. Rothschild has failed to include any
4 allegations as to the citizenship of two other Defendants, Kurt Stiehl and Murphywood, Inc.
5 Therefore, the Court cannot conclusively determine if there is complete diversity among the
6 parties as required by 28 U.S.C. § 1332.
7 C. Other Deficiencies
8 As with Mr. Rothschild’s ADA and FHA claims, his state law claims include pages of
9 “threadbare recitals of the elements” for each cause of action, which by itself is not enough to state
10 a claim on which relief may be granted. Iqbal, 556 U.S. at 678. Some of the state law claims
11 include additional factual allegations but others do not. For example, Mr. Rothschild’s claims for
12 tortious interference with business expectancy, breach of contract, and civil conspiracy all include
13 “naked assertions” with little to no factual support. Id. (quoting Twombly, 550 U.S. at 557); see
14 ECF No. 22 at 24-30, 32-37. In particular, the claim for tortious interference with business
15 expectancy contains no reference to Defendants or any actions committed by them; instead, Mr.
16 Rothschild simply recites the legal elements and what must be established by any plaintiff to bring
17 a successful claim for tortious interference with business expectancy. ECF No. 22 at 36-37.
18 For each cause of action, Mr. Rothschild must plead enough “factual content that allows
19 the [C]ourt to draw the reasonable inference that the defendant is liable for the misconduct
20 alleged.” Iqbal, 556 U.S. at 678. He can summarize facts about the case in one portion of his
21 complaint and incorporate those facts by reference elsewhere. See Fed. R. Civ. P. 10(c). But Mr.
22 Rothschild must allege facts that are sufficient to support the elements of each of his claims. See
23 Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011) (“[A]llegations in a complaint…may not
24 simply recite the elements of a cause of action, but must contain sufficient allegations of
25 underlying facts to give fair notice and to enable the opposing party to defend itself effectively.”)
26
5 In the case caption page, Mr. Rothschild refers to Defendants “Stewart Title” and “Stewart
27
Guaranty Corp.” ECF No. 22 at 1. Elsewhere, he refers to Defendants “Stewart Title Company”
1 D. IFP Status
2 In the SAC, Mr. Rothschild alleges that he “lives intermittently” at a “sober house for
3 alcohol treatment” in Florida, and “works in Real Estate.” ECF No. 22 at 5. However, in his IFP
4 application, dated June 6, 2023, Mr. Rothschild represented to the Court under penalty of perjury
5 that he had received no income in the preceding twelve months from “Business, profession, or
6 other self-employment,” and his only source of income was from Social Security disability
7 benefits he receives monthly. ECF No. 8 at 1. The Court granted the IFP application on June 21,
8 2023. ECF No. 10.
9 “Notwithstanding any filing fee, or any portion thereof, that may have been paid, the
10 [C]ourt shall dismiss the case at any time if the court determines that…the allegation of poverty is
11 untrue.” 28 U.S.C. § 1915(e)(2)(A). However, “[t]o dismiss [a] complaint pursuant to
12 § 1915(e)(2), a showing of bad faith is required, not merely inaccuracy.” Escobedo v. Applebees,
13 787 F.3d 1226, 1235, n.8 (9th Cir. 2015). To address this inconsistency as to Mr. Rothschild’s
14 employment in the SAC versus his IFP application, Mr. Rothschild shall file a revised IFP
15 application that indicates under penalty of perjury whether he currently works in “Real Estate,”
16 and whether he was doing this work at the time he filed his IFP application in June. If there is any
17 source of income that was not disclosed in his original IFP application, Mr. Rothschild shall
18 explain why that information was omitted.
19 IV. CONCLUSION
20 For the reasons stated above, the Court finds that the SAC fails to state a claim pursuant to
21 28 U.S.C. § 1915(e). The Court orders Mr. Rothschild to file a third amended complaint and a
22 revised IFP application addressing the questions and deficiencies identified in this order by
23 September 22, 2023. If he does not file a timely third amended complaint or does not address all
24 the questions and deficiencies identified by the Court in this screening order, the Court will
25 recommend that this action be dismissed.
26 //
27 //
1 To allow time for Mr. Rothschild to amend, the Case Management Conference, currently
2 scheduled for September 14, 2023, shall be continued 90 days.
3 IT IS SO ORDERED.
4 Dated: September 1, 2023
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