Appendix — Temple of the Lost Sheep, Inc. v. Abrams

en

—_———

91-214 Supreme Court, U.S.

iy f> FILED

0. 91- ~—

lL F499}

In THE | OFFICE OF THE CLERK

Supreme Court of the United States

OcTOBER TERM, 1991

>

TEMPLE OF THE LOST SHEEP INC., a/k/a Action Committee to

Help the Homeless Now and HENRY JEROME MACKEY, a/k/a

Jerome Mackey,

Petitioners,

—_—V.—

ROBERT ABRAMS, Attomey General of the State of New York, NEW

YORK NEWS, INC., JACK NEWFIELD, JOHN DAVIS, and THO-

MAS WHELAN, and JILL. LAURIE GOODMAN,

Respondents,

PETITION FOR CERTIORARI TO THE UNITED STATES

COURT OF APPEALS FOR THE SECOND CIRCUIT

APPENDIX

ROBERT ABRAMS ESQ. JAMES ROBERSON JR.

Attorney General of the Attorney for Petitioner

State of New York Temple of the Lost Sheep

Attorney for Respondents Inc. alk/a Action Committee

State of New York, and to Help the Homeless Now

Jill Laurie Goodman, 875 Avenue of the Americas

120 Broadway New York, New York 10001

New York, New York i0271

By: William Sanders Esq.

COUDERT BROTHERS

Attorneys for Respondents

New York News Inc.

and Jack Newfield

200 Park Avenue

New York, New York 10166

By: Kevin W. Goering, Esq.

of Counsel

HENRY JEROME MACKEY

a/k/a JEROME MACKEY,

Petitioner, Pro se

131-57 Fowler Avenue

Flushing, New York 11355

TABLE OF CONTENTS

Page

ee i

District Court Memorandum, Decision, and

Order dated September 25, 1990 (Spatt)............0......ceeee 1

Decision of the United States Court of

Appeals for the Second Circuit

Ane AI il: UI hain cance cts ususcitanedddcescesusceneineeacnetaa 25

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

xX

TEMPLE OF THE LOST SHEEP INC.,

A/K/A ACTION COMMITTEE TO HELP THE

HOMELESS NOW, and HENRY JEROME

MACKEY, pro se,

MEMORANDUM

DECISION

AND ORDER

CV-88-3675(ADS)

Plaintiffs,

-against-

ROBERT ABRAMS, Attorney General of

the State of New York, ROBERT ABRAMS,

JILL LAURIE GOODMAN, NEW YORK NEWS,

INC., JACK NEWFIELD, JOHN DAVIS, and

THOMAS WHELAN,

Defendants,

APPEARANCES:

JAMES ROBERSON JR., ESQ.

Attorney for Plaintiff

Temple of the Lost Sheep

Inc. a/k/a Action Committee

to Help the Homeless Now

875 Avenue of the Americas

Suite 1400

New York, New York 10001

HENRY JEROME MACKEY

Appearing pro se

131-57 Fowler Avenue

Flushing, New York 11355

ROBERT ABRAMS, Esq.

Attorney General of the

State of New York

120 Broadway

New York, New York 10271

By: William Sanders, Esq.

Assistant Attorney General

COUDERT BROTHERS

Attorneys for Defendants

New York News Inc. and Jack

Newfield

200 Park Avenue

New. York, New York 10166

By: Kevin W. Goering, Esq.

of Counsel

SPATT, District Judge.

Although several challenges are raised by these

motions to dismiss, the Court finds that the primary issue

presented here is as follows: does a state court decision

upholding the validity of a subpoena issued by the State

Attorney General, have collateral estoppel effect on a civil

rights action against the Attorney General and others which is

based primarily upon the Attorney General’s issuance of the

subpoena in connection with an investigation of possible

fraudulent activities? The resolution of this issue is further

complicated by reason of a determination of abstention that

another Judge of this Court ordered while the motions dealing

with the subpoena were pending in state court. For the reasons

that follow, this Court finds that the First and Fourteenth

Amendment constitutional claims raised here, either actually

were or could have been raised in state court, and therefore the

doctrine of collateral estoppel applies to preclude re-litigation

of the issues raised here. The Court also finds that the claims

based upon conspiracy in violation of 42 U.S.C. § 1985(3),

7 ane: bi aes ’

fail to state a claim upon which relief may be granted, and

must also be dismissed pursuant to Fed. R. Civ. P. 12(b)(6).

Finally, in view of these determinations, the plaintiffs’ re-

maining state-law claim must likewise be dismissed.

FACTUAL BACKGROUND

A detailed description of the factual background

surrounding this action is succinctly set forth in Judge Reena

Raggi’s Memorandum and Order in Temple of the Lost Sheep

Inc. v. Abrams, CV-88-3675, slip op. at pp. 3-14 (E.D.N.Y.

June 7, 1989), which recitation is familiar to all parties and

counsel. Set forth below is asummary of the facts stated in the

plaintiff's complaint relevant to the instant motions.’

The Temple of the Lost Sheep-Inc. a/k/a Action

Committee to Help the Homeless Now (“Temple”), is an

entity that operated as an unincorporated religious society

from approximately 1960 to 1980. Henry Jerome Mackey

(“Mackey”) has been affiliated with the organization since its

inception, and, in 1979 he participated in its incorporation

pursuant to New York’s Religious Corporation Law.

The Temple maintains a shelter for the homeless in

Flushing, Queens, New York. One of its stated objectives is

“to provide a haven wherein persons who believe themselves

to be ‘Lost Souls’ may find a temporary refuge, during which

time they may seek their own Spiritual regeneration through

prayer, and the study of the Bible and other religious works”

(Second Amended Complaint, paragraph 2). As acondition of

membership, and as part of their religious activity, the mem-

bers are required to “solicit alms from the donating public” by

taking part in begging (id.). Most of the money received each

day is turned over to Mackey and the Temple. According to

the plaintiffs, “[b]y so doing, the members are able to solve

their own problems by experiencing God’s blessings” (id.).

Footnote 1: As a part of their Second Amended Complaint, the plaintiffs have attached and

incorporated by reference, numerous affidavits, newspaper articles, correspondence, sub-

poenas and other documents. Pursuant to Fed. R. Civ. P. 10(c), all of that material is

considered a part of the complaint “for all purposes”.

The defendants John Davis (“Davis”) and Thomas

Whelan (“Whelan”), are homeless persons who were origi-

nally admitted to the Temple shelter in 1988, but who later

defected from the organization.

The defendant New York News Inc. is the publisher

of the Daily News newspaper (“Daily News”). The defendant

Jack Newfield (“Newfield”), is a staff writer and regular

columnist for the Daily News.

When Davis and Whelan left the shelter, they con-

tacted reporter Newfield of the Daily News and advised him

that the Temple required its members to go out and “beg” as

a condition to staying in the shelter, and that the proceeds

were turned over to Mackey. Newfield thereafter arranged a

meeting with the Attorney General of the State of New York

(“Attorney General’), to have Davis and Whelan report their

story to that office for possible investigation.

On October 20, 1988 and November 2, 1988, the

Attorney General, through Assistant Attorney General Jill

Laurie Goodman, issued subpoenas to be served on several

“John Doe” Temple members in support of an administrative

investigation into their activities. On October 21, 1988,

another subpoena was served on Mackey, directing his ap-

pearance on November 2, 1988. The subpoena also called for

the production of books, records and other Temple docu-

ments. The purpose of the subpoenas was to determine whether

further proceedings should be brought pursuant to various

provisions of New York’s Business Corporations Law, Gen-

eral Business Law, Executive Law, Not-For-Profit Corpora-

tions Law, and Estate, Powers and Trusts Law. Specifically,

the Attorney General alleged that he was investigating the

possibility of fraud under the guise of charitable activity.

In the interim, on October 24, 1988, Newfield wrote

a story which ran in the Daily News on the Temple’s activities

and the investigation (see Second Amended Complaint, Ex-

hibit “T”). In particular, Newfield recounted Mackey’s crimi-

nal past, described the Temple’s operations and reported

about the experiences of Davis and Whelan and the plaintiffs.

He also reported about Mackey’s personal wealth, despite

Mackey claiming in a telephone interview that all funds

collected by the members are used solely for the Temple’s

services, and that he himself draws an income of less that

$5,000 a year. In sum, Newfield cautioned passersby to

“beware of Jerome Mackey’s upside-down water coolers”.

The following day, Newfield wrote another article reporting

about the issuance of the Attorney General subpoenas (see

Second Amended Complaint, Exhibit “X”).

Without complying with the subpoenas, on Novem-

ber 22, 1988, the plaintiffs commenced this federal court

action by order to show cause against the defendants based on

alleged violations of the Temple’s and Mackey’s constitu-

tional rights under 42 U.S.C. § 1983, as well as conspiracy to

violate their constitutional rights under 42 U.S.C. § 1985(3).

In particular, the plaintiffs alleged that the defendants con-

spired to deprive them of their First and Fourteenth Amend-

ment rights and violated their rights of privacy and associa-

tion, free exercise of religion, equal protection of the law and

the establishment clause of the First Amendment.

According to the plaintiffs, there was an overall

conspiracy to financially cripple the Temple. The plaintiffs

alleged that the defendants agreed among themselves that the

Daily News would publish a series of damaging articles on the

Temple and Mackey, and that the Attorney General would

undertake an investigation of their activities. The plaintiffs

alleged that these constitutional violations began not with this

most recent investigation, but rather as early as the 1960’s

ever since Mackey was on the Attorney General’s “hit list”.

Mackey alleged that the Attorney General’s systematic ha-

rassment of him began with the investigation into the opera-

tion of his self-defense schools (see,, e.g., United States v.

Corr, 543 F.2d 1942 [2d Cir. 1976] [employee of Jerome

Mackey’s Judo Inc. convicted of various counts of securities

fraud, mail fraud and perjury with regard to financing of the

business]), his stereo tape distributing business (see, e.g.,

United States v. Mackey, 405 F. Supp. 854 (E.D.N.Y. 1975]

[mail fraud], and now continues with the investigation into the

Temple’s activities. Because of these alleged constitutional

deprivations, the plaintffs sought injunctive relief from fur-

ther harassment and compensatory and punative damages.

On December 6, 1988, Judge Raggi denied the

plaintiffs’ application to preliminarily enjoin the Attorney

General from continuing its investigation and to require the

Daily News to give “equal space” to the plaintiffs in their

publication.

Meanwhile, the Temple and Mackey continued to

fail to comply with the administrative subpoenas issued ear-

lier. On December 6, 1988 the Attorney General made a

motion before Justice Edward Greenfield in Supreme Court,

New York County, for an order to compel compliance. The

Temple and Mackey cross-moved to quash the subpoenas, as

well as to dismiss the proceeding brought by the Attorney

General.

In the interim, while the motions in state court were

sub judice, the Daily News and Attorney General moved in

this Court before Judge Raggi, requesting dismissal or in the

alternative an abstention from further proceedings until such

time as the state court rules on the validity of the subpoenas.

On June 7, 1989, Judge Raggi granted the defendants’ motion

by abstaining from exercising federal jurisdiction over the

plaintiff’ action until such time as the state court proceeding

came to aconclusion. Judge Raggi specifically chose to stay,

rather than dismiss the action, reasoning as follows:

“Because there is some question as to whether

plaintiffs can obtain full legal as well as equi-

table relief if they are successful in the pending

State proceedings, the court stays, rather than

dismisses, this action against the Attorney Gen-

eral and his assistant until this is clarified.”

Temple of the Lost Sheep, Inc. v. Abrams, No. CV-88-3675,

slip op. at p. 20 (E.D.N.Y. June 7, 1989).

Judge Raggi “abstain{ed] from hearing plaintiffs’

federal claims until the conspiracy issue is resolved in state

court as to the Attorney General” (slip op. at p. 22), and

declined to rule on all other claims “until the state proceeding

concludes, since the decision in that case may very well

modify, if not dispose of, certain of the claims raised here”

(slip op. at p. 22) (emphasis supplied).

Thereafter, on January 4, 1990, Justice Greenfield

rendered a decision on the motions in the state cuurt proceed-

ing, which granted the Attorney General’s motions to compel

compliance with the subpoenas and denied the Temple’s cross-

motions to quash and dismiss. With respect to Judge Raggi’s

abstention decision, Justice Greenfield stated:

“With respect to that part of the cross-motion

for an order to stay and enjoin the Attomey

General from continuing with the investigation

upon the ground that there is another and prior

action pending between the same parties in the

Federal District Court, this court finds that the

District Court has deferred to this court to

determine the various issues raised by Mackey

and the Temple. Therefore, it is not necessary

for this court to discuss and determine the

overlapping of the two actions and whether the

resolution of the Federal action will be

dispositive of this proceeding to compel com-

pliance with the subpoena.”

Matter of Abrams v. the Temple of the Lost Sheep, Inc., No. 88-

47250, N.Y.L.J., Jan. 16, 1990, at p. 27, col.4 (Sup. Ct. N.Y.

County Jan. 4. 1990) (emphasis supplied).

The Temple initially appealed Justice Greenfield’s

decision to the Appellate Division, First Department, but later

withdrew the appeal and complied with the subpoenas by

producing documents.

On March 30, 1990, the Temple moved to set aside

the abstention on the ground that Justice Greenfield’s deci-

sion “finally determined” the state action, and that therefore

this matter should proceed with discovery and trial. At oral

argument, this Court directed the parties to address the issue

of when the state administrative matter is deemed to be

“concluded” within the meaning of Judge Raggi’s order. On

April 13, 1990, this Court vacated the stay previously directed

by Judge Raggi since the State court action is now considered

to be concluded.

The defendants now make the instant motions to

dismiss on the grounds of collateral estoppel, failure to state

a claim, and in the case of the Attorney General, qualified

immunity. In the alternative, the defendants move for a

continuation of abstention by this Court. In the interim,

pending a determination by the Court on these motion, the

defendants also seek a stay of all discovery.

DISCUSSION

1. Motion for a Stay of Discovery.

The defendants requested a stay of all discovery

pending a determination on these motions, which application

was granted by the Court at oral argument on May 18. 1990.

Although not expressly authorized by stature or

rule (cf. N.Y. Civ. Prac. L.& R. 3214[b] [discovery stayed

pending motion to dismiss]), the federal district courts do

have discretion to authorize a stay of discovery pending the

determination of dispositive motions (see, e.g., Transunion

Corp. v. Pepsico, Inc., 811 F.2d. 127, 130 [2d Cir. 1987]

[ protective order preventing discovery pending determination

on motion to dismiss for forum non conveniens is permis-

sible]). Discovery should only be stayed, however, where, as

here, there are no factual issues in need of further immediate

exploration, and the issues before the court are purely ques-

tions of law (see, e.g.,F.H. Krear & Co. v.19 Named Trustees,

91 F.R.D. 497, 498 [S.D.N.Y. 1981]; see also Jarvis v. Regan,

833 F.2d. 149, 155 [9th Cir. 1987]; Florsheim Shoe Co. v.

United States, 744 F2d 787, 797 [Fed. Cir. 1984]).

2. Motions to dismiss.

Since both the Daily News and the Attorney Gen-

eral move for similar relief, namely, to dismiss, or, in the

alternative, for an abstention, a discussion of the law and facts

applicable to both parties’ motions is treated together, except

where the parties’ arguments or facts may differ.

(a). Collateral Estoppel :

Both the Daily News as well as the Attorney Gen-

eral allege that the decision of Justice Greenfield has preclu-

sive collateral estoppel effect in this case. Specifically, the

defendants maintain that Justice Greenfield addressed the

constitutional claims in upholding the validity of the subpoe-

nas issued, and that he made findings that there was no “bad

faith” on the part of the Attorney General, thus entitling him

to the cloak of qualified immunity. The defendants also

contend that Justice Greenfield made a finding that there was

no conspiracy or collusion between the defendants. Finally,

the defendants urge that, in addition to Justice Greenfield’s

decision, Judge Raggi made certain findings in her abstention

decision on the issue of bad faith, which is now the law of the

case.

In opposition, aside from primarily arguing the

merits of their case, (Footnote 2), the plaintiffs allege that

Footnote 2: Rather than focusing on the collateral estoppel effect, if any, of Justice

Greenfield's decision, the plaintiffs devote much of their memorandum of law to this

contention that the Attorney General lacks authority to conduct such an investigation into

the affairs of a charitable non-profit organization. This, however, is precisely the issue that

Justice Greenfield decided in a second related proceeding involving Mackey (see Abrams

v. New York Foundation for the Homeless, N.Y .L.J., Jan. 16, 1990, at p. 27, col. 6 (Sup. Ct.

N.Y. County Jan. 4, 1990)).

10

collateral estoppel or res judicata does not bar claims that

could not have been and were not actually litigated in state

court.

Pursuant to 28 U.S.C. § 1738, a federal court is

required to apply the rules of collateral estoppel of the state in

which a prior judgment was rendered, where the same issues

are later raised in federal court (see Migra v. Warren City

School Dist. Bd. of Educ., 465 U.S. 75, 81 [1984] [citing

cases]. Accordingly, the Court turns to the New York law on

the issue of collateral estoppel.

It is well settled that “{u]nder collateral estoppel,

once a court has decided an issue of fact or law necessary to

its judgment, that decision may preclude relitigation of the

issue in a Suit on a different cause of action involving a party

to the first cause” (Allen v. McCurry, 449 U.S. 90, 94 [1980)]).

“Application of the doctrine of collateral estoppel requires a

finding of the [identicality of an issue necessarily decided in

the prior action’ and [a full and fair opportunity to contest the

issue in the prior action’” (Benjamin v. Coughlin, 905 F.2d

571, 575 [2d cir. 1990). quoting Halyalkar v. Board of Re-

gents, 72 N.Y. 2d 261, 266, 527 N.E. 2d 1222, 1224, 532

N.Y.S. 2d 85, 87 [1988]). A district court is precluded from

relitigating not only claims that were actually litigated and

determined in a prior proceeding, but also those claims that

“could have been litigated in the prior state court proceed-

ings” (Collard v. Incorporated Village of Flower Hill, 604 F.

Supp. 1318, 1323, [E.D.N.Y. 1984] [emphasis supplied], aff'd,

759 F.2d 205 [2d Cir.], cert. denied, 474 U.S. 827 [1985]}).

Under New York law, in order for collateral estop-

pel to bar relitigation of an issue in a subsequent action or

proceeding, two elements must first be met:

(1) the issue to be decided in the second action

is identical to an issue necessarily decided in a

prior proceeding’ and

11

(2) the party against whom collateral estoppel

is asserted has had a full and fair opportunity to

litigate the issue in the prior proceeding.

Kaufman vy. Eli Lilly & Co., 65 N.Y.2d 449, 455, 482 N.E.2d

63, 67,492 N.Y.S. 2d 584, 588, [1985].

The requirement of identity of issues is an absolute

one, requiring a careful examination of the facts in the context

of both the state and federal action (see Wilder v. Thomas, 854

F.2d 605, 617 [2d Cir. 1988], cert denied sub nom. Wilder v.

New York State Urban Dev. Corp., 109 S.Ct. 1314 [1989]).

In order to determine the collateral estoppel effect,

if any, of Justice Greenfield's order, it is necessary to review

his decision in light of Judge Raggi’s abstention decision.

In Judge Raggi’s abstention decision dated June 7.

1989, the specific arguments that the Temple and Mackey

raised in their motion before Justice Greenfield in opposing

the subpoenas were summarized as follows:

“Among arguments raised in support were: (a)

that the subpoenas were beyond the jurisdic-

tional authority of the Attorney General as

granted by New York law; (2) that because a

church is involved, subpoenas can only issue

on the showing of a compelling state interest;

(3) that the first and fourth amendments to the

constitution preclude holding a church in con-

tempt for failing to disclose its financial

records; (4) that the Attorney General was

engaged in a conspiracy to deprive Mackey

and the Temple of constitutional rights; (5)

that compliance with the subpoenas would in-

fringe rights of privacy, association and reli-

gious belief.”

12

Temple of the Lost Sheep Inc. v. Abrams, No CV-88-3675, slip

op. at p. 13 (E.D.N.Y. June 7, 1989) (emphasis supplied).

After reviewing the factors to determine the appro-

priateness of an abstention, Judge Raggi held:

“There being no evidence of bad faith suffi-

cient to excus® abstention and this court being

convinced that plaintiffs can adequately raise

their constitutional challenges to the Attorney

General's conduct in pending state proceed-

ings, this court abstains from now addressing

those Claims. Because there is some question

as to whether plaintiffs can obtain full legal as

well as equitable relief if they are successful in

the pending state proceedings, the court stays,

rather than dismisses, this action against the

Attorney General and his assistant until this is

clarified.” Slip op. at p. 20 (emphasis sup-

plied).

Judge Raggi also noted that the Temple does not

dispute that it was able to raise the constitutional issues before

the state court in seeking to have the subpoenas quashed:

“Plaintiffs do not dispute that they can raise

their constitutional challenges to the Attorney

General’s investigation in the pending state

proceeding. Indeed, in moving to have the

State court quash the outstanding subpoenas,

plaintiffs argued that compliance would in-

fringe constitutional rights of privacy, associa-

tion and religious belief. They have, moreover,

advised the state court that they believe them-

selves to be the victims of a conspiracy aimed

at abridging these constitutional rights. The

———

13

State court is clearly competent to address these

constitutional challenges to the subpoenas, for

it has long been recognized that [{u]pon the

State courts, equally with the courts of the

Union, rests the obligation to guard, enforce

and protect every right granted or secured by

the Constitution of the United States .. . when-

ever those rights are involved in any suit or

proceeding before them’”. Slip op. at p. 17,

quoting Robb v. Connoily, 111 U.S. 624, 637

(1884).

Specifically as to the possible collateral estoppel effect that

Justice Greenfield’s decision might have on this litigation,

Judge Raggi anticipated the following:

“How the state court rules with respect to the

question of whether the Attorney General was

involved in any conspiracy with the other named

defendants — and if he was, whether their

mutual objectives were unconstitutional —

could, after all, have collateral estoppel effect

in proceedings in this court, at least as against

plaintiffs.

The court will not address defendants’ remain-

ing challenges to plaintiffs’ claims until the

State proceeding concludes, since the decision

in that case may very well modify, if not dis-

pose of, certain of the claims raised here.” Slip

op. at pp. 21-22(emphasis supplied).

14

In addition to abstaining, Judge Raggi made an

express finding that the plaintiffs failed to support their alle-

gations that the Attorney General acted improperly in carry-

ing Out the investigation, by stating that, “this court finds no

basis for concluding that the Attorney General is pursuing his

investigation of Mackey’s latest venture without any expecta-

tion of achieving a legitimate law enforcement goal” (see slip

op. at p. 19).

In upholding the validity of the subpoenas, Justice

Greenfield noted that he was aware of the pending federal

court action and was familiar with all of the papers filed. He

“stressed that the investigation does not prevent Mackey or

the Temple from practicing their religious activity, nor is it

disruptive to such activity” (Abrams v. Temple of the Lost

Sheep, Inc., No. 88-47250, N.Y.L.J., Jan.16, 1990, at p. 27,

col. 4[Sup. Ct. N.Y. County Jan. 4, 1990]). Justice Greenfield

proceeded to make the following findings:

“After reviewing the complaints of Mackey

and the Temple in the District Court action and

the papers submitted by them in this proceed-

ing, this court finds no basis for concluding

that the Attorney General is acting in bad faith

in pursuit of his investigation of either Mackey

or the Temple.

The blanket objection by Mackey and the

Temple that compliance with the subpoena

would deprive them of their Fifth Amendment

right to be free from self-incrimination has no

merit. Neither the Temple nor its officers have

any Fifth Amendment rights against the pro-

duction of corporate records pursuant to lawful

judicial order (Oklahoma Press Publishing

Company v. Walling, 327 U.S. 186). More-

over, with respect to respondents’ Fourth

Amendment rights involving both State and

15

Federal searches and seizure, all that is re-

quired is that the subpoenaed materials be rel-

evant to the investigation being conducted and

that the subpoena not be overbroad or unrea-

sonably burdensome. Far Rockaway Nursing

Home v. Hynes, 44 NY 2d 383.”

Significantly, Justice Greenfield held that “this

court finds that the District Court has deferred to this court to

determine the various issues raised by Mackey and the Temple.

Therefore, it is not necessary for this court to discuss and

determine the overlapping of the two actions and whether the

resolution of the Federal action will be dispositive of this

proceeding to compel compliance with the subpoena”.

It is well settled that in attempting to quash a

subpoena duces tecum in state court, the burden is on the

petitioners “to make at least some showing that production of

the information sought would impair their lst Amendment

rights” (Matter of Full Gospel Tabernacle, Inc. v. Attorney

General of the State of New York, 142 A.D.2d 489, 493, 536,

N.Y.S. 2d 201, 203 [3d Dep’t 1988] [emphasis supplied]; see

also Matter of Grand Jury subpoenas for Locals 17, 135, 257

& 608 of United Brotherhood of Carpenters & Joiners, 72

N.Y. 2d. 307, 528 N.E. 2d. 1195, 532 N.Y.S. 2d. 722. cert.

denied sub nom. Local 17 of United Brotherhoood of Carpen-

ters & Joiners v. New York, 488 U.S. 966 [1988]). Once that

showing is made, the burden shifts to the Attorney General to

show “that the infringement is outweighed by a compelling

State interest, to which the information sought is substantially

related, and that the State’s ends may not be achieved by less

restrictive means” (see Full Gospel, supra [citations omit-

ted|}. Accordingly, on the motions by the Temple and Mackey

to quash, they were required to make at least some showing

that the production would infringe on their First Amendment

rights

Significantly, Judge Raggi stayed rather than dis-

missed the action because she found that “there is some

16

question as to whether plaintiffs can obtain full legal as well

as equitable relief if they are successful in the pending state

proceedings.” (slip op. at p. 20 [emphasis supplied]). If the

plaintiffs had made some showing that their constitutional

rights had been infringed or had they been successful before

Justice Greenfield, the only relief available to them in state

court was to quash the subpoenas; there were no claims for

monetary or injunctive relief pending before him. Accord-

ingly, had the Temple and Mackey been successful in state

court, they could then have proceeded to pursue their claims

for equitable and monetary relief in this Court.

However, the Temple was not successful in the

State proceeding. In fact, the burden to show a compelling

State interest never even shifted to the Attorney General, since

Justice Greenfield found that the plaintiffs failed to sustain

their burden of making some showing of a constitutional

violation. In this regard, Judge Raggi correctly predicted that

the outcome of the state court proceedings “could, after all,

have collateral estoppel effect in proceedings in this court, at

least as against plaintiffs” (slip op. at p. 21 [emphasis sup-

plied]).

Therefore, Justice Greenfield’s decision does col-

laterally estoppel the plaintiffs from relitigating their consti-

tutional claims, namely, those based upon the First and Four-

teenth Amendments. In opposing the subpoenas in state court,

the Temple argued that the Attorney General had to make a

showing of compelling state interest; that compliance with the

subpoenas violated their rights of privacy, association and

religious belief; that production would infringe on their Fourth

and Fifth Amendment rights; and that the Attorney General

was engaged in a conspiracy to deny Mackey and the Temple

their constitutional rights. In sum, the plaintiffs’ constitu-

tional claims were specifically rejected by the state court in

finding that the Temple and Mackey had not met their burden

in Opposing the subpoenas by showing any constitutional

violations by the defendants. It is clear therefore, that the

Temple had a full and fair opportunity to raise the precise

constitutional claims that are now brought before this Court.

17

Had Justice Greenfield found that the plaintiffs made some

showing of a violation, then the doctrine of collateral estoppel

would not have been applicable as against the plaintiffs.

On the contrary, Justice Greenfield found “no basis

for concluding that the Attorney-General is acting in bad faith

in pursuit of his investigation of either Mackey or the Temple”.

Judge Raggi has already determine that :

“Plaintiffs do not dispute that they can raise

their constitutional challenges to the Attorney

General’s investigation in the pending state

proceeding. Indeed, in moving to have the

State court quash the outstanding subpoenas,

plaintiffs argued that compliance would in-

fringe constitutional rights of privacy, associa-

tion and religious belief. They have, moreover,

advised the state court of aconspiracy aimed at

abridging these constitutional rights.

* ” ~

[T}here has been no court finding to date of any

improper conduct by the Attorney General or

his staff in its investigations of Mackey-re-

lated enterprises. Neither does the record re-

flect continued threats of prosecution despite a

history of unsuccessful attempts.

* * *

[There is] no basis for concluding that the

Attorney General is pursuing his investigation

of Mackey’s latest venture without any expec-

tation of achieving a legitimate law enforce-

ment goal.

18

To the extent that plaintiffs urge a finding of

bad faith from alleged collusion between the

Attorney General and the Daily News, the court

finds conclusory allegations in this regard-in-

sufficient to support such an inference. No

facts have been alleged indicating that the Daily

News reports on the Temple were published at

the behest of the Attorney General, rather than

on the independent editorial judgment of the

newspaper. The mere fact that the Daily News

arranged for former Temple members to meet

with officials at the Attorney General’s office

and recount possible financial improprieties

on the part of plaintiffs does not demonstrate

bad faith.” Slip op. at pp 17-20.

Accordingly, because the First and Fourteenth

Amendment claims which are the basis for this lawsuit against

the Attorney General and Daily News in the federal court, are

exactly the same as those which were presented before Judge

Raggi in her prior decision and Justice Greenfield in passing

upon the propriety of the subpoenas, the doctrine of collateral

estoppel now bars relitigation of those issues, since this Court

finds that the Temple and Mackey were afforded a full and fair

opportunity to make at least some showing of these constitu-

tional violations in state court. Therefore, the plaintiffs’

claims under 42 U.S.C. § 1983 for violations of the First and

Fourteenth Amendments, are dismissed.

(b) Failure to State a Claim:

1. Claims Under 42 U.S.C. § 1985(3).

In addition to finding that the decisions of Judge

Raggi and Justice Greenfield have collateral estoppel effect

here as to the First and Fourteenth Amendment claims under

42 U.S.C. § 1983, the defendants urge, and the Court finds,

19

that the Temple’s Second Amended Complaint fails to state a

claim under Fed. R. Civ. P. 12(b)(6) for violation of 42 U.S.C.

§ 1985(3). Although the factual allegations in the complaint

are sharply disputed by the parties, the court accepts all of the

plaintiffs’ allegations as true in regard to the motions to

dismiss for failure to state a claim (see Neustein v. Orbach,

732 F. Supp. 333, 343 [E.D.N.Y. 1990] [citing cases}).

In order to state a claim for conspiracy under 42

U.S.C. § 1985(3), a plaintiff must allege that the defendants

(1) engaged in a conspiracy, (2) for the purpose of either

directly or indirectly depriving him or a class of persons of

which he is a member equal protection of the laws; and that

(3) acts taken by the defendant in furtherance of the con-

spiracy (4) deprived him or the class the exercise or privilege

of a citizen of the United States (see New York State NOW v.

Terry, 886 F. 2d 1339, 1358 [2d Cir. 1989], cert. denied, 110

S. Ct. 2206 [1990]; see also Griffin v. Breckenridge, 403 U.S.

88, 102-03, [1971]; Sorlucco v. New York City Police Dep't,

888 F. 2d 4, 8 [2d Cir. 1989]). Under section 1985, a plaintiff

must also demonstrate “some racial, or perhaps otherwise

class-based, invidiously discriminatory animus behind the

conspirators’ action’” (New York State NOW v. Terry, 886, F.

2d at p. 1358, quoting Griffin v. Breckenridge, 403 U.S. at pp.

102-03.? Although the precise reach of section 1985(3) re-

mains somewhat unresolved (see, e.g., United Brotherhood of

Carpenters & Joiners, Local 610 v. Scott, 463 U.S. 825, 835-

37 [1983] [leaving open the question of whether statute is

aimed against any other class based animus other than di-

rected at blacks]), it has been held to encompass women as a

class (see, e.g., New York State NOW v. Terry, supra, 886 F.

2d. at p. 1359), classes based on political association (see e.g.,

Keating v. Carey, 706 F. 2d 377, 386 [2d Cir. 1983]), and

those based on religion (see, e.g., Volk v. Coler, 845 F. 2d

1422, 1434 [7th Cir. 1988]). However, it is well settled that

class-based economic animus is beyond the reach of a claim

under section 1985 (see Scott, supra, 463 U.S. at p. 838-39;

Footnote 3: The term “animus” has been defined by the Second Circuit as “merely

describ ’ing] a person's basic attitude or intention” (New York State NOW v. Terry, supra,

836 F.2d. at p. 1359).

20

see also Chow v. Coughlan, CV-88-1563, slip op. at pp. 8-11

[E.D.N.Y. June 28, 1990] [low-income tenant organizers are

not a protected class under 42 U.S.C. § 1985]).

The plaintiffs’ conspiracy claims under section 1985

fail to state a claim for two reasons. First, even as to this

Second Amended Complaint, the Court agrees with Judge

Raggi’s prior determination that the plaintiffs’ allegations of

bad faith from alleged collusion between the Attorney Gen-

eral and Daily News are “conclusory allegations . . . insuffi-

cient tO support such an inference”. According to Judge

Raggi, “[t]he mere fact that the Daily News arranged for

former Temple members to meet with officials at the Attomey

General’s office and recount possible financial improprieties

on the part of plaintiffs does not demonstrate bad faith” (slip

op. at pp. 19-20). This Court agrees and declines to disturb

that finding, not because of the doctrine of “law of the case”’

as the defendants urge, but rather because this Court finds that

the Second Amended Complaint adds, in effect, nothing more

than what was before Judge Raggi. Additionally, the Court

notes that similarly, Justice Greenfield also found that the

Attorney General properly exercised his authority to investi-

gate the Temple’s affairs and that the Attorney General did not

act in “bad faith” in carrying out the investigation.

Second, the plaintiffs have failed to allege with any

degree of specificity or particularity the acts alleged to have

been taken by the defendants in furtherance of the conspiracy

which may have deprived the plaintiffs of any privileges or

rights under the constitution. The plainiiffs mere conclusory

allegations of a conspiracy, without more, simply do not state

a claim for violation of constitutional rights. A constitutional

conspiracy claim must be pled with some degree of particular-

ity (see Bertucci v. Brown, 663 F. Supp. 447, 454 [E.D.N.Y.

1987]; see also Neustein v. Orbach, supra, 732 F. Supp. at p.

346 [“allegations that Orbach engaged in a conspiracy ... are

no more than naked improbable unsubstantiated assertions

without any specifics”)).

21

Accordingly, pursuant to Fed. R. Civ. P. 12(b)(6),

the plaintiffs’ claims under 42 U.S.C. § 1985(3), are dis-

missed for failure to state a claim.‘

2. Injury to Reputation.

In addition to alleging the constitutional depriva-

tions set forth above, the plaintiffs allege that their reputation

has been diminished by the Daily News articles and Attorney

General's investigation. In opposition, the Daily News al-

leges that the publication of articles about the Temple which

resulted in an investigation by the Attorney General, do noi

rise to the level of constitutional violations actionable under

section 1983. The Daily News further alleges that even if the

reputation of the Temple or Mackey has been damaged as a

result of the publication of the articles, the law of defamation

provides ample redress. Furthermore, the Daily News con-

tends that the element of “state action” on its part is absent,

especially in light of the findings of Judge Raggi and Justice

Greenfield that no bad faith collusion existed between the

Daily News and the Attorney General. This Court agrees.

It is well settled that injury or damage to reputation

in and of itself is insufficient to invoke due process protection

(see Paul v. Davis, 424 U.S. 693, 701 [1976]). To the extent

that the plaintiffs may possess a cause of action for defama-

tion, absent a federal question or diversity, that kind of action,

Standing alone does not belong in the federal court, and the

Court declines to exercise pendent jurisdiction over such a

claim. Also, the plaintiffs failed to sufficiently allege the

required “state action” on the part of the Daily News defen-

dants to support a claim under 42 U.S.C. § 1983. Accordingly,

insofar as the plaintiffs allege a cause of action based on

injury to reputation, that claim is dismissed.

Footnote 4: Although the Daily News urges dismissal for lack of subject matter junsdicuon

rather than failure to state a claim, the Court notes that the complaint plainly seeks relief

under the federal Constitution and therefore the latter motion is the proper one (see Spencer

22

3. Qualified Immunity.

Notwithstanding the foregoing multi-facited dis-

missal of the plaintiffs’ claims, the Court also finds that the

Attorney General is entitled to the cloak of “qualified immu-

nity” from any action to recover damages under section 1983.

It is well settled that while prosecutors have abso-

lute immunity from section 1983 liability for actions taken

during the course of a judicial proceeding (see /mbler v.

Pachtman, 424 U.S. 409, 417-19 [1976]; see also Schloss v.

Bouse, 876 F. 2d 287 [2d Cir. 1989] [absolute immunity for

“quasi-judicial” acts as well]), qualified immunity attaches

when they are acting in their “administrative” or “investiga-

tive” capacities, as in this situation (see Barr v. Abrams, 810

F. 2d 358, 361 [2d Cir. 1987]). “The test is whether the

prosecutor is engaged in activities that are [intimately associ-

ated with the judicial phase of the criminal process’” (Day v.

Morgeniiau, 909 F. 2d 75, 78 [2d Cir. 1990], quoting Imbler

v. Pachtman, supra, 424 U.S. at p. 430 [other citations omit-

ted]).

In order to be entitled to qualified immunity, the

prosecutor must demonstrate that he or she acted in “good

faith” (see Powers v. Coe, 728 F. 2d 97, 103 [2d Cir. 1984}),

which requires “ a showing that his [or her] acts were objec-

tively reasonable” (Day v. Morgenthau, supra, 909 F. 2d at p.

78). As stated above, both Judge Raggi and Justice Greenfield

found that the Attorney General and his staff acted properly in

Carrying out the investigation, and that he had not acted in bad

faith. The Court is cognizant that Judge Raggi's finding was

made at a threshold pleading state on a motion to dismiss.

However, this Court finds that with regard to this issue, the

plaintiffs have not pled any additional facts which would lead

this Court to depart from Judge Raggi’s conclusion. Accord-

ingly, with respect to the Attorney General defendants, the

court finds that the Attorney General and his staff acted in

good faith and are entitled to immunity from a section 1983

damages action for their activities undertaken in connection

with the investigation of the affairs of the Temple and Mackey.

23

c. Motion for Continued Abstention.

Both the Daily News and the Attorney General

argue that if the Court does not dismiss the action, then a

continuation of the prior abstention order is appropriate at this

time, since, according to the Attorney General, the investiga-

tion is ongoing.

Because the Court is dismissing this action in its

entirety, the defendants’ motion for renewal of abstention is

now rendered moot.

d. Motion for Sanctions.

The Daily News seeks Rule 11 sanctions against the

plaintiffs for filing this action and continuing to litigate these

issues.

Rule 11 was enacted to “discourag[e] dilatory and

abusive litigation tactics and eliminat(e] frivolous claims and

defenses, thereby speeding up and reducing the costs of the

litigation process” (McMahon v. Shearson/American Express,

Inc., 896 F.2d 17, 21 [2d Cir. 1990]; see also Fed. R. Civ. P.

11 advisory committee’s note, reprinted in97F.R.D. 165, 198

[1983] ["should. . . help to streamline the litigation process by

lessening frivolous claims or defenses”]). Sanctions should

be sparingly imposed, however, and care should be taken to

avoid chilling creativity or stifling enthusiasm (see Securities

Indus. Ass’s v. Clarke, 898 F.2d 318, 322 [2d Cir. 1990}).

However, once a violation of the Rule is found, the district

court must impose sanctions (see O’ Malley v. New York City

Transit Auth., 896 F. 2d 704, 709 (2d Cir. 1990)).

Applying the “objectively reasonable” test to the

plaintiffs’ papers as this Court must (see Eastway Constr.

Corp. v. City of New York, 762 F. 2d 243, 253 [2d Cir. 1985}),

the Court finds that neither the plaintiffs nor counsel for the

plaintiff Temple violated Rule 11, and therefore declines to

24

impose sanction. Accordingly, the Daily News’ motion for

Sanctions is denied.

CONCLUSION

Based upon the foregoing, the defendants’ motions

to dismiss are granted as follows : the plaintiffs’ claims

arising under 42 U.S.C. § 1983 for violations of their First and

Fourteenth amendment rights are dismissed as barred by the

doctrine of collateral estoppel based on the decisions of Judge

Raggi and Justice Greenfield, and additionally, as to the

Attorney General defendants, based upon qualified immunity.

The plaintiffs’ claims under 42 U.S.C. § 1985(3) are also

dismissed under Fed. R. Civ. P. 12(b)(6), for failure to state a

claim. The plaintiffs’ remaining state-law claims are dis-

missed for lack of subject matter jurisdiction. Accordingly,

the Second Amended Complaint is dismissed in its entirety.

The defendants’ motion for renewed abstention is

denied as moot, and the Daily News’ motion for sanctions is

denied.

SO ORDERED.

Dated : Brooklyn, New York

September 25, 1990

ARTHUR D. SPATT

United States District Judge

25

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

No. 1103—August Term 1990

Argued: February 20, 1991 Decided: April 5, 1991

Docket No. 90-7981

TEMPLE OF THE LOST SHEEP INC., a/k/a ACTION

COMMITTEE TO HELP THE HOMELESS NOW, and

HENRY JEROME MACKEY,

Plaintiffs-Appellants,

- against -

ROBERT ABRAMS, Attorney General of the State of

New York, NEW YORK NEWS, INC., JACK NEWFIELD

JOHN DAVIS, THOMAS WHELAN and JILL LAURIE

GOODMAN,

Defendants-Appellees.

Before:

FEINBERG, TIMBERS and MINER,

Circuit Judges.

26

Appeal from judgment of the United States District

Court for the Eastern District of New York, Arthur D. Spatt,

J., dismissing the complaint on the grounds that plaintiffs

were collaterally estopped from pursuing their claims arising

under 42 U.S.C. § 1983 because a prior related state court

proceeding resolved against plaintiffs issues central to those

claims; plaintiffs’ claim arising under 42 U.S.C. § 1985(3)

failed to state a claim and there was a lack of subject matter

jurisdiction for plaintiffs’ remaining state-law claims.

Affirmed.

JAMES ROBERSON JR., New York, NY, for

Plaintiff-Appellant.

KEVIN W. GOERING, New York, NY

(Coudert Brothers, P. Rivka Schochet,

of counsel), for Defendants-Appellees

- New York News, Inc. and Jack Newfield.

WILLIAM K.SANDERS, New York, NY,

Assistant Attorney General for the State

of New York (Robert Abrams, Attorney

General of the State of New York, of

Counsel), for Defendants-Appellees

Robert Abrams and Jill Laurie Goodman.

FEINBERG, Circuit Judge:

This fiercely contested litigation, which has been

conducted in both federal and state courts since the fall of

- 1988, involves the interaction of the doctrines of abstention

and collateral estoppel. Plaintiffs Temple of the Lost Sheep

27

Inc., a/k/a Action Committee to Help the Homeless Now (the

Temple), and Henry Jerome Mackey appeal from a judgment

of the United States District Court for the Eastern District of

New York, Arthur C. Spatt, J., dismissing their complaint

against Robert Abrams, Attorney General of the State of New

York, Assistant Attorney General Jill Laurie Goodman (the

State defendants) New York News, Inc., Jack Newfield (the

Daily News defendants), John Davis and Thomas Whelan.

The district court dismissed appellants’ claims arising under

42 U.S.C. § 1983 because a state court proceeding had re-

solved against appellants issues central to those claims, and

alternatively, as against the State defendants, those claims

were barred by qualified immunity. The district court also

found that appellants’ claims arising under 42 U.S.C. § 1985(3)

failed to state a claim under Fed. R. Civ. P. 12(b)(6), The

court then dismissed the remaining state-law-claims for lack

of subject matter jurisdiction. For the reasons given below,

we affirm.

Background

According to the complaint, the Temple operated as

an unincorporated religious society from approximately 1960

to 1980 and was thereafter incorporated pursuant to New

York’s Religious Corporation Law. Appellant Mackey is a

founder of the Temple and its “titular head.” One of the

Temple’s stated objectives is “to provide a haven wherein

persons who believe themselves to be [Lost Souls’ may find a

temporary refuge, during which time they may seek their own

Spiritual regeneration.” Towards that end, the Temple main-

tains a shelter for homeless men in Queens, New York. Those

residing at the shelter must comply with the Temple’s goals

and rules. In particular, members are required to “solicit alms

from the donating public” by begging, and they then turn over

most of those proceeds to Mackey and the Temple.

Defendants John Davis and Thomas Whelan are

homeless persons who were admitted to the Temple shelter in

1988. They later defected from the organization and con-

sein cite dataatatiaesiaaaaiaa aii

28

tacted defendant Jack Newfield, at that time a staff writer and

regular columnist for the Daily News newspaper published by

defendant New York News, Inc. After Davis and Whelan told

Newfield that as a condition for staying in the shelter, the

Temple required its members to beg and then turn over the

proceeds to Mackey, Newfield arranged to have Davis and

Whelan tell their story to defendant Attorney General for

possible investigation.

The Attorney —eneral began an administrative in-

vestigation to determine whether the Temple was engaging in

fraud under the guise of charitable activity in violation of

various provisions of New York statutory law, and accord-

ingly issued subpoenas in the fall of 1988, through defendant

Assistant Attorney General Jill Laurie Goodman, to be served

on several “John Doe” Temple members and Mackey. In the

interim, Newfield wrote two stories in the Daily News, which

recounted Mackey’s criminal past, reported his personal

wealth, described the Temple's operations and the experi-

ences of Davis and Whelan, cautioned passersby to “beware of

Jerome Mackey’s upside-down water coolers” and reported

the issuance of the Attorney General’s subpoenas.

Without complying with the subpoenas, appellants

commenced this suit in the Eastern District in November

1988, alleging various violations of their constitutional rights

under 42 U.S.C. § 1983 and aconspiracy to violate their rights

under section 1985(3). Appellants alleged that pursuant to an

overall conspiracy to financially cripple the Temple, defen-

dants agreed that a series of damaging articles on the Temple

and Mackey would be published in the Daily News and that the

Attorney General would undertake an investigation of their

activities, including issuance of the subpoenas at issue. The

complaint also alleged that Mackey had been on the Attorney

General’s “hit list since the 1960’s as evidenced by various

investigations to which Mackey or his businesses had been

subjected. See e.g., United States v. Corr, 543 F.2d 1042 (2d

Cir. 1976) (employee of Jerome Mackey’s Judo Inc. convicted

of securities fraud and other crimes with regard to financing of

the business): United States v. Mackey, 405 F. Supp. 854

29

9E.D.N.Y 1975)(Mackey convicted of mail fraud relating to

his operation of Mackey Distributors, Inc.). Appellants sought

injunctive relief from further harassment and compensatory

and punative damages for the alleged constitutional depriva-

tions.

Appellants also moved for a preliminary injunction

prohibiting the Attorney General from continuing his investi-

gation and requiring the Daily News to give “equal space” to

appellants in that newspaper. In December 1988, Judge Reena

Raggi denied the motion on the grounds, among others, that

the court would probably abstain from hearing the case, and

that plaintiffs had not established a likelihood of success on

the merits.

At that time, the Temple and Mackey had still not

complied with the subpoenas, and the Attorney General moved

before Justice Edward Greenfield in Supreme Court, New

York County, for an order to compel compliance. The Temple

and Mackey cross-moved to dismiss the proceedings and to

quash the subpoenas in part on the ground that the Attorney

General issued the subpoenas pursuant to a conspiracy to

deprive the Temple and Mackey of their constitutional rights.

While these motions were pending in state court, the State and

Daily News defendants moved in the district court before

Judge Raggi for dismissal of appellants’ complaint or in the

alternative for abstention from further proceedings until the

state court ruled on the validity of the subpoenas. In June

1989, Judge Raggi granted the motion, and stayed this action

pending the conclusion of the related state court proceeding.

Appellants thereafter moved for Judge Raggi’s

recusal on the ground that she was biased. The judge denied

the motion in June 1989. The Temple and Mackey appealed

from this order and also sought a writ of mandamus in this

court compelling the judge to recuse herself. This court

dismissed the appeal, and also denied the petition for manda-

mus.

aii il

30

In addition, according to appellants, they moved in

the state court to prevent Justice Greenfield, in deciding the

motions pending before him, from making any determination

regarding appellants’ federal ciaim of conspiracy. In January

1990, however, Justice Greenfield ruled on the motions before

him, granting the Attorney General’s motion to compel com-

pliance with the subpoenas and denying appellants’ cross-

motions to quash and dismiss, thereby rejecting appellants’

conspiracy claim. Appellants initially appealed Justice

Greenfield’s decision the the Appellate Division, First De-

partment, but later withdrew their state appeal and apparently

complied with the subpoenas.

Appellants also returned to the Eastern District and

moved to vacate Judge Raggi’s order staying the federal

proceedings. The case was reassigned to Judge Spatt, and in

June 1990 he found that the state court action had been

concluded, and allowed the federal action to proceed. Subse-

quently, defendants moved to dismiss the federal complaint,

and Judge Spatt granted that motion in September 1990 in part

on the ground that appellants’ section 1983 claims were

barred by the doctrine of collateral estoppel. This appeal

followed.

Discussion

A. Abstention and Reservation of Federal Claims

Appellants contend that the district court erred in

applying collateral estoppel to their section 1983 claims,

because they intentionally avoided raising those claims in the

State court so as to reserve them for determination in the

district court under the doctrine of England v. Louisiana State

Board of Medical Examiners, 375 U.S. 411 (1964). The plain-

tiffs in England had commenced an action in federal court,

alleging that a state statute violated their federal constitu-

tional rights. Id. at 412-13. Plaintiffs also claimed that the

State law did not apply to them. The district court then

CN ————EEEEEEOEOEEEEeEEEeEEeEe——eeEeeee

31

abstained and remitted plaintiffs to the state courts on the

ground that a state court decision interpreting the statute

could moot the constitutional claims. Id. at 413. Plaintiffs

voluntarily submitted both the state law and constitutional

claims to the state court, which decided them adversely to

plaintiffs. Id. at 413-14. The Supreme Court held that

plaintiffs could have reserved their federal claims and thereby

avoid preclusion, by informing the state court that they in-

tended to return to federal court to pursue the federal claims

should the state court rule against them on the question of state

law. Id. at 421-22. According to appellants, under England a

party is always able to reserve its federal claims whenever a

district court abstains, and thus the district court here erred by

precluding appellants from pursuing their “reserved” federal

Claims. We disagree.

It is clear that in England, the federal court ab-

stained under the doctrine of Railroad Commission v. Pullman

Co., 312 U.S. 496 (1941)(Pullman abstention), which “in-

volves an inquiry focused on the possibility that the state

courts may interpret a challenged state statute so as to elimi-

nate, or at least to alter materially, the constitutional question

presented.” Ohio Bureau of Employment Services v. Hodory,

431 U.S. 471, 477 (1977). By contrast, the district court in

this case abstained under the authority of Younger v. Harris,

401 U.S. 37 (1971) (Younger abstention), which is warranted

when there is an ongoing state proceeding involving an impor-

tant state interest that provides the federal plaintiff with an

adequate opportunity for judicial review of its federal consti-

tutional claims. Christ the King Regional High School v.

Culvert, 815 F.2d 219, 224 (2d Cir.), cert denied, 484 U.S. 830

(1987).

According to the Supreme Court, “[t}he holding in

England depended entirely on this Court's view of the purpose

of abstention” in a particular case. Allen v. McCurry, 449 U.S.

90, 101-02 n.17 (1980). It is thus necessary for us to deter-

mine whether the policies behind abstention in this case

require appeliants to be provided with the opportunity of

reserving their federal claims, recognizing of course that this

32

was a Younger rather than a Pullman abstention. Cf. Huffman

v. Pursue, Ltd., 420 U.S. 592, 606 & n.18 (1975).

The emphasis in England on a plaintiff’s right to

reserve its federal claims for determination in the federal

court is a direct result of the purposes behind a Pullman

abstention, because

[W)here a plaintiff properly invokes federal-

court jurisdiction in the first instance on a

federal claim, the federal court has a duty to

accept that jurisdiction. Abstention may serve

only to postpone, rather than to abdicate, juris-

diction, since its purpose is to determine

whether resolution of the federal question is

even necessary, or to obviate the risk of a

federal court’s erroneous construction of state

law..

Allen, 449 U.S. at 101-02 n.17 (citations omitted)

Significantly, Pullman abstention does not neces-

sarily involve an ongoing state proceeding. Instead, the

abstention serves to allow a state proceeding to address the

State law issues in deference to the state court’s superior

ability to determine unsettled questions of state law. Pullman

abstention, as stated in England, essentially recognizes that

by so deferring to the state courts, a federal court may not

relieve itself of the jurisdictional duty it faced in the first

instance. Younger abstention, however, gives rise to a differ-

ent set of considerations, since it involves two pending pro-

ceedings and thus conflicting jurisdictional duties between

the state and federal tribunals with the attendant possibilities

that maintenance of the federal action will either result in

duplicative legal proceedings or a disruption of the state

proceedings. Cf. Steffel v. Thompson, 415 U.S. 452, 461-62

(1974). The situation is therefore not one of merely postpon-

33

ing federal jurisdiction as is the case in Pullman abstention,

but instead “contemplates the outright dismissal of the federal

Suit, and the presentation of all claims, both state and federal,

to the state courts.” Gibson v. Berryhill, 411 U.S. 564, 577

(1973).

The rationale for allowing reservation of a federal

claim in a state court proceeding following Pullman absten-

tion in a federal court is thus not applicable to Younger

abstention; this indicates that reservation is not available in

the latter case. Indeed, this conclusion is compelled by the

fact that Younger abstention derives from the recognition

that a pending state proceeding, in all but un-

usual cases, would provide the federal plaintiff

with the necessary vehicle for vindicating his

constitutional rights, and, in that circumstance,

the restraining of an ongoing [state proceed-

ing] would entail an unseemly failure to give

effect to the principle that state courts have the

solemn responsibility, equally with the federal

courts to guard, enforce, and protect every

right granted or secured by the Constitution of

the United States.

Steffel, 415 U.S. at 460-61 (citation omitted)

If, as appellants argue, a federal plaintiff could

avoid the preclusive effects of the related state court proceed-

ing by reserving its federal claims after the federal court

abstains under Younger, then the federal court would fail to

give effect to the ability of the state court to resolve federal

constitutional questions, thereby undermining one of the cen-

tral purposes behind Younger abstention. Moreover, such an

approach would result in at least partially duplicative pro-

ceedings, one of the problems that Younger abstention at-

tempts to remedy. Thus, the purposes behind Younger absten-

tion suggest that a federal plaintiff may be collaterally es-

34

topped by a related state court proceeding, regardless of the

plaintiff's desire to “reserve” the federal claim.

We accordingly hold that a federal plaintiff may not

avoid preclusion by reserving in the state court its federal

claims following Younger abstention. Judge Weinfeld reached

this result in Olitt v. Murphy, 453 F. Supp. 354, 358 (S.D.N.Y.),

aff'd without opinion, 591 F.2d 1331 (2d Cir. 1978), cert.

denied, 444 U.S. 825 (1979), and although our summary

affirmance there had no precedential value, we take this

opportunity to explicitly adopt Judge Weinfeld’s holding.

The Ninth Circuit has also reached this result. See Beltran v.

California, 871 F. 2d 777. 783 n.8 (9th Cir. 1988). Therefore,

appellants’ attempt, if any, to reserve their federal claims in

the state court for later determination in federal court did not

of itself prevent Judge Spatt from applying collateral estoppel

based on Justice Greenfield’s decision in the state court pro-

ceeding. The question still remains whether Judge Spatt was

otherwise justified in applying that doctrine.

B. The Collateral Estoppel Effects of the State Proceeding

Pursuant to 28 U.S.C. § 1738, the federal courts

“must give to a state-court judgment the same preclusive

effect as would be given that judgment under the law of the

State in which the judgment was rendered.” Migra v. Warren

City School Dist. Bd. of Education, 465 U.S. 75, 81, (1984).

We have accordingly given a state court judgment preclusive

effect in a subsequent action in federal court seeking relief

under section 1983. E.g., Collard v. Incorporated Village of

Flover Hill, 759 F. 2d 205, 207, (2d Cir.)(per curiam), cert.

denied, 474 U.S. 827 (1985).

Under New York law, the “[a]pplication of the

doctrine of collateral estoppel requires a finding of the

identicality of an issue necessarily decided in the prior action

and a full and fair opportunity to contest the issue in the prior

action.” Benjamin v. Coughlin, 905 F.2d 571, 575 (2d Cir.

1990). Appellants argue that neither of these requirements is

35

satisfied here. It is clear to us, however, that the district court

properly found that appellants were collaterally estopped

from pursuing their section 1983 claims, since the record

shows that the state court directly decided issues that are

central to appellants’ 1983 claims and that appellants had a

full and fair opportunity to litigate those issues.

The record shows that when Judge Raggi entered

the June 1989 abstention order, she clearly contemplated that

appellants’ conspiracy allegations-which were central to their

section 1983 claims-would be decided in the pending state

proceeding before Justice Greenfield when he decided the

Cross-motion to quash the subpoenas. Under New York law,

a subpoena will be quashed if compliance wil! unduly infringe

upon fundamental rights such as those guaranteed by the First

Amendment. See Matter of Grand Jury Subpoenas, 72 N.Y. 2d

307, 312, cert. denied, 488 U.S. 966 (1988). Judge Raggi thus

properly found in the abstention order that appellants “can

adequately raise their constitutional challenges to the Attor-

ney General's conduct in pending state proceedings.” Indeed,

Judge Raggi summarized one of the arguments that the Temple

and Mackey raised in their cross-motion in the pending state

court proceeding as whether “the Attorney General was en-

gaged in a conspiracy to deprive Mackey and the Temple of

constitutional rights.”

The abstention order also recognized the preclusive

effects that would flow from the state court's determination.

Significantly, Judge Raggi stayed the federal action rather

than dismissing it, because if appellants had been successful

in the state proceeding the only relief available to them there

was to quash the subpoenas. Thus, by staying the federal

action, Judge Raggi provided appellants with the opportunity

for returning to federal court to receive monetary or injunctive

relief for any constitutional violations found by the state

court. Cf. Davidson v. Capuano, 792 F. 2d 275, 282 (2d Cir.

1986). Conversely, the judge also recognized in the order that

if appellants were not successful in the state court, then those

state court findings could have preclusive effect against ap-

p-llants upon their return to federal court.

36

In light of the district court’s abstention order,

appellants were on notice that issues pertaining to their con-

Stitutional claims would be determined in the state court.

Moreover, appellants took advantage of this opportunity.

Although appellants now contend otherwise, one of the issues

they chose to raise in the state court was their constitutional

challenge to the subpoenas. In an affidavit submitted in the

state court in support of the cross-motion to quash the subpoe-

nas, the Temple’s attorney alleged that the Attorney General

met with Newfield, Davis and Whelan and issued the “meritless

subpoenas.” and that the Daily News defendants published the

libelous articles as part of a conspiracy to deprive the Temple

and Mackey of their civil rights. The attorney then state that

“(ij would be impossible for this Court to compel compliance

with those subpoenas if it is found that the Attorney General

did in fact conspire to deprive plaintiffs of their Constitu-

tional rights.”

Appellants therefore chose to place the conspiracy

allegations, which were central to their section 1983 claims,

directly in issue in the state court proceeding. Justice

Greenfield was aware that his decision might affect appel-

lants’ claims in the federal court, since he held that the district

court “has deferred to this court to determine the various

issues raised by Mackey and the Temple.” In light of the

foregoing, Judge Spatt properly found that the state court had

adversely resolved issues central to appellants’ constitutional

claims when it denied the cross-motion to quash the subpoe-

nas and granted the Attorney General’s motion to enforce, and

that appellants had a full and fair opportunity to litigate those

issues in the state court.

Appellants argue that because their entire section

1983 claim was not before the state court, the issues decided

were not “identical.” However, Justice Greenfield denied the

cross-motion after finding that the investigation did not “un-

necessarily interfer[e] with First Amendment freedoms” and

did not prevent “Mackey or the Temple from practicing their

religious activity, nor is it disruptive to such activity.” Justice

Greenfield also found that there was “no basis” for concluding

37

that the Attorney General was acting in bad faith in pursuing

the investigation of either Mackey or the Temple. These

findings that the State defendants did not violate appellants’

constitutional rights by issuing the subpoenas or pursuing the

investigation thus bar appellants’ conspiracy claim in the

district court, since “[iJt is the wrongful act, not the con-

spiracy, which is actionable.” Singleton v. City of New York,

632 F. 2d 185, 192 (2d Cir. 1980), cert. denied, 450 U.S. 920

(1981); see United States v. Sacco, No 90-1002 (2d Cir. March

11, 1991). Moreover, appellants had an opportunity to chal-

lenge those findings in the state court, but chose no” to pursue

an appeal. Under the circumstances, we will not consider their

argument to us that the findings were based upon an inad-

equate record, which they were not allowed to develop.

Appellants also argue that collateral estoppel is

inapplicable here because they had aright to trial by jury in the

federal court whereras the state court determination was made

by a judge. The Seventh Amendment, however, does not

prevent the use of collateral estoppel in this context. (Cf.

Parklane Hosiery Co. v. Shore, 439 U.S. 322, 337 (1979).

Moreover, under New York law, even though a party seeks to

invoke his right to a jury trial in asubsequent civil proceeding,

the party will be precluded from relitigating issues previously

decided by a non-jury tribunal if that party had affirmatively

sought the prior ruling. See Stevenson v. Goomar, 148 A.D.

2d 217, 219-20 & n.2 (3d Dept.), appeal dismissed, 74 N.Y.

2d. 945 (1989); cf. Ryan v. New York Telephone Co., 62 N.Y.

2d. 494 (1984). Since appellants raised issues central to their

constitutional claims by bringing the cross-motion to quash

the subpoena in the state court, we believe that their right to

a jury trial on these claims in the federal court does not bar the

use of collateral estoppel under New York law.

In sum, we find that the district court correctly

dismissed appellants’ section 1983 claims on the basis of

collateral estoppel. We therefore do not reach the alternate

ground of qualified immunity relied on the the district court

with respect to the State defendants. With regard to appel-

lants’ remaining claims, they apparently argue only that be-

38

Cause the district court erred in applying collateral estoppel to

the section 1983 claims, it erred in dismissing the other

claims. However, we agree with the district court’s dismissal

under Fed. R. Civ. P. 12(b)(6) of appellants’ section 1985(3)

claims since they were couched in terms of conclusory allega-

tions and failed to demonstrate “some racial, or perhaps

otherwise class-based, invideous discriminatory animus be-

hind the conspirators’ action” as required by section 1985(3).

New York State National Org. for Women v. Terry, 886 F 2d.

1339, 1358 (2d Cir. 1989), cert. denied, 110 S. Ct2206 (1990).

Given the absence of federal claims left to adjudicate, the

district court properly dismissed the pendent state-law claims.

See Federman v. Empire Fire & Marine Ins. Co., 597 F. 2d

798, 809, (2d Cir. 1979).

The judgment of the district court is affirmed.