Petition for Writ of Certiorari — Great Western Mining & Mineral Co. v. Fox Rothschild LLP
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IN THE
: 10132 FFB 14
Supreme Court of the Haiten States
oe OFFICE OF THE CLERK
REAT WESTERN MINING & MINERAL COMPAN
A ssignee of HRC/NJ, Inc., Assignee of Act ive
Fintertainment Inc
FOX ROTHSCHILD LLP;
HOMAS D. PARADISE, Esq., Partner, Fox Rothsc!
LLP; ROBERT 8S. TINTNER, Esq., Partner, lox
Rothschild LLP; ADR OPTIONS, INC;
THOMAS B. RUTTER, Esq., CEO, ADR Optio
On PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES Court OF APPEALS FOR THE THIRD CIRCUII
PETITION FOR A WRIT OF CERTIORARI
BENJAMIN C. WEINER, EsQul
Counsel of Record
19 Countryside Drive
Livingston NJ 07039
973) 220-1986
¢
UNSEL PRE
© (800) 359
QUESTION PRESENTED
Petitioner, Great Western Mining & Mineral
Company (“Great Western”) has asserted an independent
constitutional claim that an alleged conspiracy violated
its right to be heard in an impartial forum in state
court. App. 2a. Following the issuance of rulings against
Great Western in Pennsylvania state court, respondent
ADR Options, Ine. (“ADR Options”) CEO and founding
shareholder Thomas Rutter (“Rutter”) testified in an
unrelated matter that several state judges that had ruled
for respondent ADR Options and against Great Western
had already approached him about employment after
they leave the bench. App. 7a, 41a. ADR Options is the
largest provider of ADR services in Pennsylvania and the
largest private employer of former judges as arbitrators,
which it pays handsomely. App. 41a. The Third Circuit
in affirming the District Court’s orders in dismissing
Great Western’s Complaint determined “[fJor a judge to
approach a party for whom he or she has just ruled to
diseuss the possibility of working for that party certainly
creates a strong appearance of impropriety.” (emphasis
added). App. 42a. In addition, an affidavit was provided
by Great Western’s former legal counsel James F’.. Wiley,
III (“Wiley”) where he acknowledged that respondent
Robert S. Tintner, Esq. (“Tintner’”) a partner at Fox
Rothschild LLP (“Fox Rothschild’) stated to him, there
is “no way that a Philadelphia court is ever going to find
against Thomas Rutter given his relationship with the
Philadelphia court system”. App. 41a. Great Western’s
complaint was dismissed as not plausibly suggesting the
existence of a conspiracy under Bell Atlantic Corporation
v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. [gbal, 129
S.Ct. 1987 (2009). App. 42a.
»StIONs
Since pleading standards govern access to judici:
4 5 J
recourse; if properly stating a conspiracy claim requiré
the addition of a fact that the plaintiff cannot know
ex ante; would not the pleading standard represent
an insurmountable barrier to access in certain cases
violating one’s procedural and substantive due proces
rights in effectively denying their access to the court’s
the United States?
Since the arrival of Twombly and then /qgbal, th
thirteen circuits of the United States Court of Appeals
has established numerous distinct interpretations of the
pleading standard causing not so much as a circuit split as
a shatter. Doesn’t this uncertainty undermine T’wombl
ind /gbal and warrant this Court’s review?
ATEMEN
at Western Mining & Mineral ¢
rent corporation or publicly held com;
. ‘ :
more of the corporation s si
PARTIES TO THE PROCEED!
KE 29.6 STATEMEN
TABLE OF APPENDICES
PETITION FOR WRIT O}
OPINIONS BELOW
STATEMENT OF JURISDICTIE
STATUTORY PROVISIONS INVO
STATEMENT OF THE CASE
HASONS FOR GRANTING THE PETITI
Since the Arrival of Twombly and The:
Iqbal, the Thirteen Circuits of the United
States Court of Appeals has Established
Numerous Distinct Interpretations of the
Pleading Standard Causing not so Much as a
Circuit Split as a Shatter. This Uncertainty
Undermines Twombly and Igbal
Properly Stating a Claim Requires 1
Addition of Facts that the Plaintiff Cannot
Know Ex Ante; the Pleading Standard
Represents an Insurmountable Barrier
to Judicial Access, Judicial Recourse
and Violates a Plaintiff's Procedural an
Substantive Right to Due Process in
Courts of the United States
This Important Issue Should Be Address
Now; It is in our Nation’s Interest to Ensure
the Judiciary is Free From Exterr
[Influences and Beholden to No On
>
rista HKecords, |
604 F.3d 110 (2d ¢
j aft ‘ Pp 1
fit ror U, [qbal,
129 S.Ct. 1937 (2
¢ id Af lantic ( Orpora
950 U.S. 544 (2007
oykin v. KeyCor}
521 F.3d 202 (2d ¢
rickson v. Pardu
51 US. 89 (200°
reat Western Mining &
Fox Rothschild LLP,
615 F\'8d 159 (8d Cir
TOTSe UV. Lowe r Merion Sch
132 F.3d 902 (8d Cir
VANSOTN V. Citibank. N
614 F.3d 400 (7th Cin
STATUTES
THER AUTHORITII
de of Conduct for U1
anon 1. Commentar"
onauct for Unite
,A { ‘am? en
ABLE OF APPEND
APPENDIX A — OPINION OF THE UNITI
STATES COURT OF APPEALS F UE THI]
THIRD CIRCUIT FILED AUGU (
APPENDIX B UDGMEN
THE UNITED STATES COURT
APPEALS FOR THE THIRD CII
FILED AUGUST 5, 2010
APPENDIX C — LETTER ORDER OF 1
UNITED STATES DISTRICT COURT FO
THE DISTRICT OF NEW JERS!
FILED JUNE 24, 2009
APPENDIX D OPINION
UNITED STATES DISTRI COU]
DISTRICT OF NEV Bop
FILED MARCH 16, 2009
APPENDIX E ORDE]
UNITED STATES DISTRICT COU]
DISTRICT OF NEY
FILED MARCH 16. 2009
APPENDIX F — ORDER OF THE UNIT!
STATES COURT OF APPE AL S FO]
THE THIRD CIRCUIT DENYIN‘*
PETITION FOR PANEL REHEARIN
AND EN BANC REHEARI
FILED OCTOBER 15, 2011
MPPriON FOR WRI
espectfully petitions for a writ of certiora
the judgment of the United Stat
Third Cireu} nN tnis ca
PPINIONS BELO
ine opinion of the United States Court of App
he Third Circuit is reported at Great Western Min G
Vineral Co. v. Fox Rothschild LLP, 615 F.3d 159 ( 34 C
2010). App. la-44a.The Order of the United States Cou:
f Appeals for the Third Circuit denying Great Western
Petition for Panel Rehearing and En Banc Rehearing
lated October 15, 2010 and is not reported. App. 72a-%
he opinion of the United Stat yu
e | ist rict of New Jersey Newark is not report ed Ap]
56a-70a. The letter order of the United States Distri
Court for the District of New Jers Newarl
ported. App. 47a-5!
STATEMENT OF JURISDI
ine Lhird Cireuit entered judgmen on AULU
2010. App. 45a. The Third Circuit denied Great Westert
Petition for Panel Rehearing and Ein Bane Rehearing «
October 15, 2010. App. 72a-73a. An extension of time to
1 petition for writ of certiorari was granted on Janua!
2011 to and including February 12, 2011. This ¢
jurisdiction 3 nvoked under 28 U.S. 254
|
dinance, regulation, custom, or usage, of any
rritory or the District of Columbia, subjects, or caus
» be subjected, any citizen of the United States or othe:
rson within the jurisdiction thereof to the deprivati
f any rights, privileges, or immunities secured |
he Constitution and laws, shall be liable to the part
njured in an action at law, suit in equity, or other prope!
proceeding for redress, except that in any action broug!
ivainst a judicial officer for an act or omission taken
uch officer’s judicial capacity, injunctive relief shall n
= granted unless a declaratory decree was violated «
leclaratory relief was unavailable. For the purpose
his section, any Act of Congress applicable exclu
the District of Columbia shall be conside)
'
t the |) rrict iC ony
’
|
} |
jurisdiction
jurisdiction
=
a mand
neclude rehef
r\é ot relat
rTATEMENT
riaving lost in state court, Great Western brought
ndependent civil rights action in federal court under 4
S.C. § 1983. Great Western alleged that its state-cou
losses were the result of a corrupt conspiracy betwe
the named respondents and certain members of th
Pennsylvania state judiciary to exchange favorable ruling
for future employment as arbitrators with respondent
ADR Options, an alternative dispute resolution entits
App. 2a. ADR Options is the largest provider of ADI
ervices in Pennsylvania and the largest private employs
ft former judges as arbitrator hich it 3 handsome
1]
ine underiyinye ¢ orivinate | ra ren
ymmon law binding arbitration at ADK Uptions detor
ts CEO and founding shareholder Thomas Rutter,
ittorney who was selected us the lone arbitrato1
sa. The case before Rutter was a legal malpractic
ivainst attorney Gary Brownstein, Mare ID
Vitale’), and their lav '
he selection of Rutter was conditional and based upon
full disclosure of relationships as contained in the ADR
Options arbitration agreement, which provided:
“Each party and participating attorney has
disclosed any past or present relationship
with the arbitrator, direct or indirect, whether
financial, professional, social or any other
kind. The arbitrator has also disclosed any
past or present relationship with any party or
attorney. It is understood that any doubt has
been resolved in favor of disclosure.” App. 4a.
On the morning of the arbitration Rutter, Vitale
and Vitale’s attorney at Fox Rothschild executed and
affirmed the arbitration agreement without making any
disclosures. Rutter thereafter entered a decision for Vitale
and against Great Western. App. 4a.
Following Rutter’s ruling it was learned that the
attorney at Fox Rothschild that had represented Vitale
had failed to disclosure his relationship and his law firm’s
relationship with Rutter and ADR Options. Anp. 4a. This
included the concurrent employment of Fox Rothschild’s
managing partner at ADR Options. App. 4a.
Thereafter, during the course of unsuccessful
litigation in Pennsylvania state court, attorney Robert S.
Tintner, a partner at Fox Rothschild that was representing
Fox Rothschild’s litigation interests contacted Great
Western’s legal counsel James F.. Wiley, III and stated
to him there is “no way that a Philadelphia court is ever
going to find against Thomas Rutter given his relationship
with the Philadelphia court system”. App. 5a, 41a. Wiley
memorialized his conversation in an affidavit provided t
Great Western. A civil rights action in federal court unde
12 U.S.C. § 1983 later ensued
Following dismissal of Great Western’s complaint
in District Court, and during the pendency of its motion
for reconsideration Great Western learned on March 20,
2009 that Vitale was an attorney for ADR Options and
Rutter, and their attorney/client relationship had not been
disclosed to Great Western. App. 4a, 5a. Great Western
did not discover this information until after the state-court
litigation. App. 4a, 5a.
Shortly thereafter, in May 2009, Rutter testified at
a deposition in an unrelated matter that several state
judges that had ruled for ADR Options and against Great
Western had already approached him about employment
after they leave the bench. App. 7a, 41a.
Great Western immediately presented the newly
disclosed and discovered evidence to the district court
through a motion for leave to amend the complaint to its
pending motion for reconsideration. App. 7a. The district
court denied reconsideration. App. 7a. A timely appeal to
the Third Circuit was filed.
The Third Circuit in affirming the District Court’s
orders in dismissing Great Western’s Complaint
determined “[fJor a judge to approach a party for whom he
or she has just ruled to discuss the possibility of working
for that party certainly creates a strong appearance
of impropriety.” (emphasis added). App. 42a. Yet this
allegation, without acomplementary allegation of conduct
by the non-judicial actor, does not plausibly suggest thi
i@ State OI Mind OF Hutter and ler respondel
quired the addition of facts that petitioner Grea
Vestern could not know ex ante. Great Western’
ymplaint did, however, plead facts based on informatio.
nd belief that could only bs possession and cont
|
e responde!
REASONS FOR GRANTING THE PETITION
Since the Arrival of Twombly and Then Igbal,
the Thirteen Circuits of the United States Court
of Appeals has Established Numerous Distinct
Interpretations of the Pleading Standard Causing
not so Much as a Circuit Split as a Shatter. This
Uncertainty Undermines Twombly and Iqbal.
Much confusion turns upon conflicting precedent. On
the one hand, uponruling on a motion to dismiss pursuant
to Fed. R. Civ. Proce. 12(b)(6) a court must construe the
complaint in the light most favorable to the plaintiff,
accept its allegations as true and draw all reasonable
inferences in favor of the plaintiff. Morse v. Lower Merion
School Dist., 132 F.3d 902, 906 (8d Cir. 1997). On the
other hand, ultimately, the determination of whether a
plaintiff's claim is plausible, is a context specific task that
requires the reviewing court (or lone judge) to draw on
its judicial experience and common sense. /qgbal at 1950.
The judge’s personality comes into play and dismissal is
often dependant upon whether he (or she) is rather cynical
or leans more to being trusting and hopeful. Too much
discretion to dismiss claims is now based on hunches,
politics and policy animosity.
“On the one hand, the Supreme Court had
adopted a “plausibility” standard, but on
the other hand, it has insisted that it is not
requiring fact pleading, nor is it adopting a
single pleading standard to replace Rule 8.”
Swanson v. Citibank, N.A.., 614 F.3d 400, 403
(7 Cir. 2010). “Critically, in none of the three
recent decisions - Twombly, Erickson, or Iqbal
- did the Court cast any doubt on the validity of
Rule 8 of the Federal Rules of Civil Procedure.”
Id., See Erickson v. Pardus, 551 U.S. 89 (2007).
“To the contrary: at all times it has said that
it is interpreting Rule 8, not tossing it out the
window.” Jd.
Swanson clarified the Seventh Circuit’s pleading
standard. The majority evaluated this Court’s “plausibility”
standard and struggled with the question of how much
higher this Court meant to set the bar when it decided
Twombly, Erickson, and Jqgbal. The majority emphasized
that Rule 8 has never been abandoned, and this “Court
was not engaged in a sub rosa campaign to reinstate the
old fact-pleading system.” Swanson at 404. As E’rickson
underscored, “[s]pecific facts are not necessary.” Jd. “We
know that because it said so in Frickson, ‘the statement
need only give the defendant fair notice of what the .. .
claim is and the grounds upon which it rests”. Jd.
Given the continued validity of notice pleading, the
majority held that under the new requirement referenced
in Twombly and repeated in /qbal, it is the pleaders
responsibility to “state a claim to relief that is plausible
on its face” Jd. “Plausibility” in this context does not
imply that the district court should decide whose version
to believe, or which version is more likely than not.” /d.
“As we understand it, the Court is saying instead that the
plaintiff must give enough details about the subject-matter
of the case to present a story that holds together. In other
words, the court will ask itself could these things have
happened, not d7d they happen.” /d. “For cases governed
only by Rule 8, it is not necessary to stack up inferences
side by side and allow the case to go forward only if the
plaintiff's inferences seem more compelling than t}
opposing inferences.” /d.
As applied to Great Western, those questions that
were determined adversely by the Third Circuit would
have received favorable consideration in the Seventh
Circuit. Great Western certainly provided enough details
about the subject-matter of the case to present a story
that held together.
See also Arista Records, LLC v. Doe 3, 604 F.3d 110,
120 (2d Cir. 2010) where the Second Circuit declared “[t]
he Twombly plausibility standard, which applies to all civil
actions, see [qgbal, 129 S.Ct. at 1953, does not prevent a
plaintiff from “pleading facts alleged “upon information
and belief” where the facts are peculiarly within the
possession and control of the defendant, see e.g. Boykin v.
KeyCorp, 521 F.3d 202, 215 (2d Cir. 2008).””” Again, Great
Western’s proposed Amended Complaint 3 contained
such allegations, yet in the Third Circuit, dismissal
was appropriate under their distinct interpretation of
Twombly and Iqbal.
Due to circuit splits within the Court of Appeals in
interpreting this Court’s decisions in Twombly and Iqbal
inconsistent dismissal of cases has occurred, and will
continue to occur.
This uncertainty undermines Twombly and [gbal.
Immediate review is necessary to assure consistent
pleading standards throughout the judicial circuits.
When the day is done, pleading standards must
ye rebalanced so that meritorious complaints survive
complaints that require the addition of facts that the
plaintiff cannot possibly know without some form of
discovery, receive it; and meritless complaints are
dismissed. Until this is accomplished, in their present
form, pleading under Twombly and Jqgbal protect the
secrecy of co-conspirators who now can act with little fear
of pre-trial discovery.
II. If Properly Stating a Claim Requires the Addition of
Facts that the Plaintiff Cannot Know Ex Ante; the
Pleading Standard Represents an Insurmountable
Barrier to Judicial Access, Judicial Recourse, and
Violates a Plaintiff's Procedural and Substantive
Right to Due Process in all Courts of the United
States.
If properly stating a claim requires the addition of
facts that the plaintiff cannot know ex ante; the pleading
standard represents an insurmountable barrier to access
in certain cases. This holds especially true in the initial
stages of a conspiracy case when direct evidence is rarely
available and the existence of a conspiracy must usually be
inferred from the circumstances. This is attributable to
the fact that a successful conspiracy is cloaked in silence.
Since pleadings must be construed so as to do justice
under Fed. R. Civ. Proc. 8(e), in all cases, is justice being
served by the legal precedents of Twombly and Iqbal?
The Fifth and the Fourteenth amendments to the United
States Constitution guarantee all citizens the right of
procedural and substantive due process in all courts of
the United States. However, when pleading standards
restrict access to judicial recourse, aren’t a plaintiff's
constitutional rights being violated?
Immediate review is necessary |
important federal question.
III. This Important Issue Should Be Addressed Now; It
is in our Nation’s Interest to Ensure the Judiciary
is Free From External Influences and Beholden to
No One.
There is an extraordinary pubic interest in a clear
and immediate resolution of this question, which as the
Third Circuit declared during oral argument, can only be
determined upon the allowance of discovery. The Third
Circuit, however, was constrained by this Court’s decisions
in Twombly and Iqbal which required the dismissal of
this case. Pleading standards govern access to judicial
recourse. This Court should not wait for further circuit
splits within the Court of Appeals and the continued
erosion of Twombly and Iqbal before redressing this issue.
“A judge must avoid all impropriety and appearance
of impropriety.” Code of Conduct for United States
Judges (2009), Canon 2A, Commentary. “An appearance
of impropriety occurs when reasonable minds, with
knowledge of all the relevant circumstances disclosed
by a reasonable inquiry, would conclude that the judge’s
honesty, integrity, impartiality, temperament, or fitness
to serve as a judge is impaired.” Id.
What negative connotations must be drawn from the
Third Circuit’s determination that in this case, not merely
the appearance of impropriety, but the strong appearance
of impropriety was certainly present?
[In the context of this case, it is important that not
one, but several judges that had ruled for ADR Options
and against Great Western had approached Rutter. While
it may be reasonable to infer that a single appearance
of impropriety could be attributable to the independent
behavior of a rogue judge; being improperly approached
by several judges that all took part in the same case
line that ruled for ADR Options and against Great
Western certainly suggests a conspiratorial agreement
or understanding through evidence of improper parallel
conduct; improper judicial conduct that cannot be likely
explained away by proper judicial conduct as a result of
their conduct’s strong appearance of impropriety.
Deference to the judgments and rulings of courts
depends on public confidence in the integrity and
independence of judges. Code of Conduct for United States
Judges (2009), Canon 1, Commentary. “Public confidence
in the judiciary is eroded by irresponsible or improper
conduct by judges.” Code of Conduct for United States
Judges (2009), Canon 2A, Commentary.
[Immediate review is necessar
VJAMIN C. WEINE!
‘ounsel of Record
19 Countryside Driv
Livingston NJ 0703
973) 220-1986
v2runner(@comea
APPENDIX A — OPINION OF THE UNITE!
rTATES COURT OF APPEALS FOR THE THI
CIRCUIT FILED AUGUST 5, 2010
D STATES COURT OF
Rt THE THIRD CIR
HAL WESTERN MINI
MINERAL COMPAN 4
f HRC/NJ, Inc., Assieg
uM nror? bt s
.¥ ROTHSCHILI
MAS D. PARADISE, Esq., Part.
Rothschild LLP; ROBERT S. TINTNER, f
irtner, Fox Rothschild LLP; ADR OPTIONS, |
HOMAS B. RUTTER, Esq., CEO, ADR O
Appeal from the Dist.
r the District of New Je
No. O8-ev-10983
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Viineral Company ( Ure
t
izhts action in federal court under 42 |
Western alleges that its state-court losses were the re
> 1983. Gr
fa “corrupt conspiracy” between the named defenda:
d certain members of the Pennsylvania state judicia
exchange favorable rulings for future employment
rbitrators with ADR Options, Ine. (“ADR Optior
ilternative dispute resolution entity. The Distric
missed Great Western’s complaint for
claim and denied its motion for r
ILC
tention that the Rooker-Feldman doctrine prec! 1d
he exercise of subject matter jurisdiction over this acti
Great Western is not “complaining
We disagree, a:
rendered befo
injuries caused by state-court judgment
he district court proceedings commenced and invitil
district court review and rejection of those judgment
Kxxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 |
t. 1517, 161 L. ed. 2d 454 (2005). Rathe
erts an independent constitutional cla
be heal
80, 284, 1255. (
Great Western as:
hat the alleged conspiracy violated its right t
nan impartial forum. Turning to the merits, we conclu
‘nd would ha
hat granting Great Western leave to ame
° |
roved futile as even the final versio mpla
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nied | » plead fact DiaUSH ip? 7 ¢°
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Appendix A
and B&V. All parties agreed to binding arbitration before
Thomas Rutter and Rutter’s company, ADR Options.
James F-. Wiley, III, represented Active; Thomas Paradise,
a partner at Fox Rothschild LLP (“Fox Rothschild”),
represented Vitale.
According to the Complaint, ADR Options is the
largest provider of alternative dispute resolution (“ADR”)
services in Pennsylvania, New Jersey, and Delaware.
Rutter is the founding shareholder and Chief Executive
Officer of ADR Options. Many of ADR Options’s
arbitrators are former federal and state judges.
Before beginning arbitration proceedings, the
parties entered into a binding ADR Options Arbitration
Agreement, which provided that:
Each party and participating attorney has
disclosed any past or present relationship
with the arbitrator, direct or indirect, whether
financial, professional, social or any other
kind. The arbitrator has also disclosed any
past or present relationship with any party or
attorney. It is understood that any doubt has
been resolved in favor of disclosure.
(J.A. at 114 [Proposed Am. Compl. 3, P 14].) The result of
the arbitration proceedings was an award for defendants
Brownstein, Vitale, and B&V. Thereafter, Great Western
became the assignee of Active’s interest.
Great Western filed a petition in Pennsylvania state
ourt to vacate the arbitration «ward on the ground
LPPeNnarx
of improper failure to disclose potential conflicts. In
particular, Great Western alleged that the managing
partner at Fox Rothschild, Louis Fryman, was
concurrently employed at ADR Options as an arbitrator
and that Paradise maintained a professional relationship
with Rutter.? The Philadelphia Court of Common Pleas
and the Superior Court of Pennsylvania ruled against
Great Western and confirmed the arbitration award. The
Supreme Court of Pennsylvania denied Great Western’
petition for allowance of appeal.
While its appeal was pending before the Superio1
Court of Pennsylvania, Great Western filed a separate civil
action in the Philadelphia Court of Common Pleas against
Rutter, ADR Options, Fox Rothschild, and Paradise,
raising contract and tort claims and alleging a failure to
disclose the purportedly improper relationships. Robert
Tintner, a partner at Fox Rothschild, represented all of
the defendants. The Court of Common Pleas dismissed
the action as collaterally estopped, and Great Western
appealed. According to Great Western’s counsel, Wiley,
shortly thereafter Tintner called Wiley and informed
him that “[t]here [was} no way that a Philadelphia court
[was] ever going to find against Thomas Rutter given his
relationship with the Philadelphia court system.” (J.A. at
2. Inits federal Complaint, Great Western further alleged
that Vitale was an attorney for ADR Options and Rutter. (J.A. at
124 [Proposed Am. Compl. 3, P 82].) Great Western acknowledged,
however, that it did not discover this information until after the
state-court litigation. (Great Western Br. 7.) As such, this allega
tion was not included in Great Western’s petition to vacate th
arbitration award
ba
Appendix A
118 [Proposed Am. Compl. 3, P 43].) The Superior Court
of Pennsylvania affirmed the decision of the Court of
Common Pleas dismissing the action, and the Supreme
Court of Pennsylvania denied Great Western’s petition
for allowance of appeal.
Thereafter, Great Western filed a federal action under
42 U.S.C. § 1983, claiming deprivations of procedural and
substantive due process. As defendants, Great Western
named Fox Rothschild, Paradise, Tintner, ADR Options,
and Rutter (collectively, “Defendants”). Great Western
alleged that the Pennsylvania state-court decisions were
corrupted by the improper influence of Defendants,
arising both from the Pennsylvania courts’ reliance on
Rutter’s services and from Pennsylvania judges’ prospect
of future employment with ADR Options. Specifically,
Great Western claimed that “Defendants had the power
yet failed to take action to prevent violation of Great
Western’s constitutional rights to due process.” (J.A. at
127 [Proposed Am. Compl. 3, P 105]). The District Court
granted Defendants’ motion to dismiss for failure to state
a claim, holding that Great Western had not sufficiently
alleged that Defendants acted under color of state law. The
District Court reasoned that the corruption alleged by
Great Western “exists only to the extent that defendants
conspired with the courts to ensure the outcome of the
underlying case” and concluded that Great Western had
failed to properly allege the existence of a conspiracy
between Defendants and the Pennsylvania state court
system. Great W. Mining & Mineral Co. v. Fox Rothschild
LLP, No. 08-ev-1093, 2009 WL 704335, at *4 (D.N.J. Mar.
16, 2009).
la
Appendix A
Thereafter, Great Western filed a motion for
reconsideration and for leave to amend its complaint
pursuant to Federal Rules of Civil Procedure 59(e) and
15(a), attaching a draft amended complaint (“Proposed
Amended Complaint 1”). While the reconsideration motion
was pending, Great Western filed a second motion for leave
to amend, seeking to substitute a new proposed draft
amended complaint (“Proposed Amended Complaint 2”),
which was attached. Several weeks later and without a
ruling on the first two motions to amend, Great Western
filed a third motion for leave to amend, seeking to
substitute yet another proposed draft amended complaint
(“Proposed Amended Complaint 3”), which was attached.
In this motion, Great Western argued that it had newly
Ciseovered evidence, specifically Rutter’s May 14, 2009
admission under oath in another lawsuit that some of the
judges who had ruled against Great Western and for ADR
Options had already approached Rutter regarding the
prospect of employment upon leaving the bench.
On June 24, 2009, the District Court issued an
unpublished Letter Order denying the motion for
reconsideration on the merits and denying the three
motions for leave to amend as moot. In ruling on the
motion for reconsideration, the District Court considered
Proposed Amended Complaint 2, but not Proposed
Amended Complaint 3. In a footnote, the District
Court explained that it declined to consider Proposed
Amended Complaint 3 because “[t]o allow plaintiff to
repeatedly submit drafts of its complaint while plaintiff's
original motions are still pending would be prejudicial to
defendants.” (J.A. at 3.) The District Court denied the
Appendix A
motion for reconsideration, holding that the allegations
in Proposed Amended Complaint 2 did not support a
conspiracy claim. On appeal, Great Western challenges the
District Court’s refusal to consider Proposed Amended
Complaint 3 and argues that the motion for reconsideration
was erroneously denied.
i].
Defendants contest our jurisdiction and that of the
District Court, contending that this action is barred by the
Rooker-Feldman doctrine. Although Defendants raised
this argument in their motion to dismiss, the District
Court declined to address it and, exercising jurisdiction
pursuant to 28 U.S.C. §§ 1331 and 1343, dismissed Great
Western’s Complaint for failure to state a claim under
Federal Rule of Civil Procedure 12(b)(6). We exercise de
novo review over questions of subject matter jurisdiction.°
PennMont Sec. v. Frucher, 586 F.3d 242, 245 (3d Cir. 2009).
Moreover, all courts “have an independent obligation to
determine whether subject-matter jurisdiction exists.”
Arbaugh v. Y & H Corp., 546 U.S. 500, 514, 126 S. Ct.
1235, 163 L. Ed. 2d 1097 (2006).
Our standard of review of a district court’s dismissal
under Federal Rule of Civil Procedure 12(b)(6) is plenary.
PennMont Sec., 586.F.3d at 245. We review a district court
decision refusing leave to amend under Federal Rule of
Civil Procedure 15(a) for abuse of discretion. Bjorgung
3. To the extent that we have subject matter jurisdictior
e exercise it under 28 U.S.C. § 1291
¢ ee: Ag 4
APPpe TOA A
v. Whitetail Resort, LP, 550 F.3d 2638, 266 (8d Cir. 2008).
Likewise, the denial of a motion for reconsideration is
reviewed for abuse of discretion. McDowell v. Phila. Hous
Auth., 423 F.3d 233, 238 (8d Cir. 2005).
Il.
A. Rooker-Feldman Doctrine
In certain circumstances, where a federal suit follows
a state suit, the Rooker-Feldman doctrine prohibits the
district court from exercising jurisdiction. The doctrine
takes its name from the only two cases in which the
Supreme Court has applied it to defeat federal subject-
matter jurisdiction: Rooker v. Fidelity Trust Co., 263 U.S.
413, 448. Ct. 149, 68 L. Ed. 362 (1923), and District of
Columbia Court of Appeals v. Feldman, 460 U.S. 462, 103
S. Ct. 1803, 75 L. Ed. 2d 206 (1983). In a recent decision, the
Supreme Court held that the Rooker-Feldman doctrine
“is confined to cases of the kind from which the doctrine
acquired its name: cases brought by state-court losers
complaining of injuries caused by state-court judgments
rendered before the district court proceedings commenced
and inviting district court review and rejection of those
judgments.” Exxon Mobil, 544 U.S. at 284. Thus, any
discussion of the scope of the doctrine must begin with
an examination of its namesake cases.
The Supreme Court characterized the lawsuit at issue
in Rooker as an attempt “to have a judgment of a circuit
court in Indiana, which was affirmed by the Supreme
Court of the state, declared null and void, and to obtain
Appendix A
other relief dependent on that outcome.” 263 U.S. at 414.
Rooker and others, who had lost in state court, sought
relief in federal district court, arguing that the state-court
judgment was “in contravention of” the United States
Constitution. /d. at 415. The Supreme Court affirmed the
dismissal by the district court for lack of jurisdiction. The
Court reasoned that:
[uJnder the legislation of Congress, no court of
the United States other than this court could
entertain a proceeding to reverse or modify the
judgment for errors of that character. To do so
would be an exercise of appellate jurisdiction.
The jurisdiction possessed by the District
Courts is strictly original.
Id. at 416 (internal citations omitted). In other words, the
relief sought by the plaintiffs in federal court required
federal appellate review of the state-court judgment, a
task entrusted by statute solely to the Supreme Court.
Sixty years later, the Supreme Court revisited
the issue in Feldman. The plaintiffs in Feldman had
petitioned the District of Columbia Court of Appeals
(the equivalent of a state’s highest court, see 28 U.S.C. §
1257(b)) for waiver of a court rule that required applicants
to the District of Columbia bar to have graduated from
an accredited law school. Feldman, 460 U.S. at 463. The
court denied their requests for a waiver, and the plaintiffs
filed a suit in federal district court, challenging the D.C.
court’s refusal to waive the rule and admit them to the
bar or at least permit them to take the bar examination.
See 1d. at 468-70, 472-73. The Supreme Court, affirming
lla
Appendix A
the Court of Appeals, reemphasized that “a United
States District Court has no authority to review final
judgments of a state court in judicial proceedings.” Jd. at
482. Thus, insofar as the plaintiffs sought review of the
D.C. court’s judgments, the district court lacked subject
matter jurisdiction. /d. at 482. To the extent, however,
that the plaintiffs challenged the constitutionality of the
bar admission rules themselves, their suit was not barred
as it did not “require review of a final state judgment in a
particular case.” Jd. at 486.
Twice in Feldman, the Supreme Court used the term
“inextricably intertwined” to describe the type of claims
that plaintiffs may not raise in federal district court.
First, the Court addressed the argument that if a plaintiff
declined to assert certain constitutional arguments
in state court, a federal district court could exercise
jurisdiction over those claims as it would not be reviewing
an issue decided by the state court. /d. at 482 n.16. The
Court rejected this line of reasoning, stating that:
liJf the constitutional claims presented to a
United States District Court are inextricably
intertwined with the state court’s denial in a
judicial proceeding of a particular plaintiff's
application for admission to the state bar, then
the District Court is in essence being called
upon to review the state court decision. This
the District Court may not do.
Id. In the second instance, the Court employed the term
to distinguish between the plaintiffs’ challenge to the
constitutionality of the bar rules themselves, which could
Appendix A
proceed in federal district court, and their challenge to
the denial of the waiver requests, which was prohibited:
[I]t is clear that [the plaintiffs’] allegations that
the District of Columbia Court of Appeals acted
arbitrarily and capriciously in denying their
petitions for waiver . . . required the [United
States] District Court to review a final judicial
decision of the highest court of a jurisdiction
in a particular case. These allegations are
inextricably intertwined with the District
of Columbia Court of Appeals’ decisions, in
judicial proceedings, to deny [the plaintiffs’ ]
petitions. The [United States] District Court,
therefore, does not have jurisdiction over these
elements of the [plaintiffs’] complaints.
Id. at 486-87. In other words, any of the plaintiffs’ claims
contesting the denial of their waivers, even if not raised
before the District of Columbia court, were “inextricably
intertwined” with judicial decisions by the District of
Columbia court and, thus, were barred.
Rooker and Feldman established the principle that
federal district courts lack jurisdiction over suits that
are essentially appeals from state-court judgments,
but they offered little instruction on how to apply that
principle. Subsequent Supreme Court case law provided
little further assistance. Before Exxon Mobil, “[t]he
few decisions that have mentioned Rooker and Feldman
have done so only in passing or to explain why those
cases did not dictate dismissal.” Hxxon Mobil, 544 U.S.
lda
Appendix A
at 287. In Exxon Mobil, the Court “granted certiorari
to resolve conflict among the Courts of Appeals over
the seope of the Rooker-Feldman doctrine.” Id. at 291
(internal citation omitted). At the outset, the Court
noted that the doctrine, as variously interpreted in the
lower courts, “has sometimes been construed to extend
far beyond the contours of the Rooker and Feldman
cases, overriding Congress’ conferral of federal-court
jurisdiction concurrent with jurisdiction exercised by
state courts, and superseding the ordinary application
of preclusion law.” /d. at 283. The Court found just such
an error in the decision on review, in which we had held
that “[o]nce ExxonMobil’s claims had been litigated to a
judgment in state court... Rooker-Feldman ‘preclude{d]
[the] federal district court from proceeding.” Jd. at 290-91
(quoting Exxon Mobil Corp. v. Saudi Basic Indus. Corp.,
364 F.3d 102, 104 (3d Cir. 2004)) (alterations in original).
We had “rejected ExxonMobil’s argument that Rooker-
Feldman could not apply because ExxonMobil filed its
federal complaint well before the state-court judgment.”
Id. at 290. Rather, we had concluded that we lacked
jurisdiction because ExxonMobil was “endeavoring in the
federal action to ‘invalidate’ the state-court judgment, ‘the
very situation, ... ‘contemplated by Rooker-Feldman’s
“inextricably intertwined” bar.” Jd. at 291 (quoting Exxon
Mobil, 364 F.3d at 106).
Rejecting such an expansive application of the Hooker-
Feldman doctrine, the Court held that it is “confined to
cases of the kind from which the doctrine acquired its
name: cases brought by state-court losers complaining of
injuries caused by state-court judgments rendered before
Appendix
the district court proceedings commenced and invitins
district court review and rejection of those judgments.”
Exxon Mobil, 544 U.S. at 284. The Court emphasized that
“Rooker and Feldman exhibit the limited circumstances
in which this Court’s appellate jurisdiction over state
court judgments precludes a United States district court
from exercising subject-matter jurisdiction in an action
it would otherwise be empowered to adjudicate under a
congressional grant of authority.” Jd. at 291 (emphasis
added) (internal citation omitted). The Court also clearly
distinguished the Rooker-Feldman doctrine from
preclusion, stating that “properly invoked concurrent
jurisdiction [does not} vanish{] if a state court reaches
judgment on the same or related question while the case
remains sub judice in a federal court.” Jd. at 292. “When
there is parallel state and federal litigation, Rooker
Feldman is not triggered simply by the entry of judgment
in state court.” Jd. But the “[d]isposition of the federal
action, once the state-court adjudication is complete, would
be governed by preclusion law.” /d. at 293. Finally, the
Court explained that Rooker-Feldman is not implicated
“simply because a party attempts to litigate in federal
court a matter previously litigated in state court.” /d
[If the matter was previously litigated, as long as the
“federal plaintiff ‘present[s] some independent claim,
has reached in a case to which he was a party .. . , then
there is jurisdiction and state law determines whether
the defendant prevails under principles of preclusion.”
Id. (quoting GASH Assocs. v. Rosemont, 995 F.2d 726
728 (7th Cir. 1993)) (further citation omitted)
Breaking down the holding of Hazon Mobil,
conclude that there are four requirements that must be met
for the Rooker-Feldman doctrine to apply: (1) the federal!
plaintiff lost in state court; (2) the plaintiff “complain{s}
of injuries caused by [the] state-court judgments”; (3)
those judgments were rendered before the federal suit
was filed; and (4) the plaintiff is inviting the district court
to review and reject the state judgments. Exxon Mobil
544 U.S. at 284. The second and fourth requirements are
the key to determining whether a federal suit presents a
independent, non-barred claim
The second requirement--that a plaintiff must |
complaining of injuries caused by a state-court judgment
may also be thought of as an inquiry into the source of
the plaintiff’s injury. See Turner v. Crawford Square
Apartments IIT, L.P., 449 F.3d 542, 547 (8d Cir. 2006)
(“Here, the district court erred by applying the Hooker
Feldman doctrine ‘beyond the contours of the Rooker and
Feldman eases, because Turner’s action in the district
court did not complain of injuries ‘caused by the state court
judgment.” (quoting Exxon Mobil, 544 U.S. at 283-84))
But what does it mean for a plaintiff to be complaining
of an injury caused by the state-court judgment itself?
A look at a few representative cases and examples helps
to illuminate this concept. In Hoblock v. Albany County
Board of Elections, 422 F.3d 77, 87 (2d Cir. 2005), the
court posited the following example of a case that would
be barred by Rooker-Feldman because the state-cou
judgment itself was the source of the injur
ppose a State court, Dased purely oO
iw, terminates a father’s parental rights a
ders the state to take custody of his son. If t}
father sues in federal court for the return of h
on on grounds that the state judgment violats
his federal substantive due-process rights a
parent, he is complaining of an injury cau
y the state judgment and seeking its re
Lf
V@l
the contrary, wnen the source of the injury
defendant's actions (and not the state court judgment
the federal suit is independent, even if it asks the feder
irt to deny a legal conclusion reached by the state
uppose a plaintiff sues his employ
tate court for violating both state ar
liscrimination law and Title VII and los
lf the plaintiff then brings the same suit }
federal court, he will be seeking a decision fro
the federal court that denies the state court
conclusion that the employer is not liable, but
he will not be alleging injury from the stat
judgment. Instead, he will be alleging injur
based on the employer’s discrimination. TI
fact that the state court chose not to remed
the injury does not transform the subseque1
federal suit on the same matter into an appea
orbidden by Rooker-Feldn
rhe '
irt judgment
its that protes: toc ymplain injury by a third pal
ut actually complain of injury “produced by a stat
ourt judgment and not simply ratified, acquiesced it
left unpunished by it.” /d. at 88. In Hoblock, after fir
noting that the “voters’ claims in this case seem at first
complain only of the [Board of Elections’] refusal to tal
their votes rather than of any injury caused by the sta
ourt’s judgment,” the court clarified that “in refusing
tally the votes, the Board [was] acting under compulsio
if a state-court order.” /d. Specifically, the Board, “h
it been left to its own devices, would have counted
ibsentee ballots,” but it was ordered not to do so by
tate court. /d. at 89. Thus, “the state-court judgme
produced the Board’s refusal to count the
iury of which the voters complal
t hye
Wnen, NOWeVeI!I a "U@Tal |
aused by the defendant's actions and not by the stat
ico)
ourt judgment, /tooker-Feldman is not a bar to fede)
jurisdiction. See, e.g., Coles v. Granville, 448 F.3d &
$59 (6th Cir. 2006); Davani v. | Dep /
134 F.8d 712, 719 (4th Cir. 2006). A useful puidepo
the timing of the injury, that is, whether the i
omplained of in federal court existed prior to the sta
ourt proceedings and thus could not have been “ca
by those proceeding: See McK ithe Is)
Q GR (YI9d Cir 2POOT7): Ta 149 |
Litnougrn
ry ’ omy he ,T 4 ;
yplicat LOT) hecome
yntitt YY
+ ;
ip pe PLO
related to a state-court proceeding. For example, in
McCormick v. Braverman, 451 F.3d 382, 384 (6th Cir.
2006), the plaintiff filed suit in federal court contending
that she was the owner of certain real property and that
the defendants illegally interfered with her ownership.
More specifically, the plaintiff alleged that the defendants
engaged in fraud and misrepresentation in state-court
divorce proceedings involving the real property at issue.
Id. at 388. Assessing the plaintiff's allegations, the court
held that while some were barred by the Rooker-Feldman
doctrine, the remainder were “independent” claims over
which the federal courts had jurisdiction. The non-barred
claims were as follows: (1) the defendants committed fraud
and misrepresentation in the divorce proceedings; (2) the
defendants intentionally did not make the plaintiff a party
to the litigation concerning the order of receivership over
the real property; and (3) the defendants committed an
abuse of process in the divorce proceedings. /d. at 392.
Focusing on the source of the alleged injuries, the court
held that “[{nJone of these claims assert an injury caused by
the state court judgments .... Instead, Plaintiff asserts
independent claims that those state court judgments
were procured by certain Defendants through fraud,
misrepresentation, or other improper means... .” /d.
Even though the injuries of which the plaintiff complained
helped to cause the adverse state judgments, these claims
were “independent” because they stemmed from “some
other source of injury, such as a third party’s actions.” /d.
at 393. On the other hand, the court explained that the
plaintiffs claim that the state court’s “order of receivership
in and of itself is illegal and causes Plaintiff harm” sought
review of that order and thus was not independent and
was barred by Rooker-Feldman. Id. at 395.
In Freger v. Ferry, 471 F.3d 637, 639 (6th Cir. 2006
an attorney filed a suit in federal court challenging both
the refusal of certain Michigan Supreme Court justices
to recuse themselves from cases in which he was involved
and the constitutionality of Michigan’s recusal rule. In
light of the “acrimonious and well-publicized dialogue
between Fieger ... and several justices of the Michigan
Supreme Court,” Fieger sought recusal of four of the
justices, but the Justices denied the recusal motions. /d
at 639-40 (internal quotation marks omitted). In federal!
court, Fieger alleged that this failure to recuse violated his
constitutional rights and sought a declaratory judgment to
this effect. The court held that this claim required review
and rejection of the “Justices’ past recusal decisions,”
which were rendered before the federal proceedings,
and thus was barred by Rooker-Feldman. Id. at 644
With respect to Fieger’s challenge to Michigan’s recusa
rule, however, the court held that it was not barred, as
“the source of Fieger’s alleged injury is not the... state
court judgments; it is the purported unconstitutionality of
Michigan’s recusal rule as applied in future cases. Such a
claim is independent of the past state court judgment
ld. at 646.
As is clear from the preceding discussion, the ti
key requirements--that the injury must be caused by thx
state-court judgment and that the plaintiff must invite
review and rejection of that judgment--are closely related
Yet, a federal plaintiff who was injured by a state-court
judgment is not invariably seeking review and rejection of
that judgment. For example, in Adkins v. Rumsfeld, 464
F.3d 456, 460 (4th Cir. 2006), current and retired servic:
members whose retirement pay was divided in stat
ivpveEnNA2A
| :
divorce proceedings pursuant to the Uniformed Service
Former Spouses’ Protection Act brought an action in
federal court challenging the statute’s constitutionality.
The court held that “even if these plaintiffs were ‘state
court losers complaining of injuries caused by state-court
judgments rendered before the district court proceedings
commenced, ... they were not ‘inviting district court
review and rejection of those judgments.” Jd. at 464
(quoting Exxon Mobil, 544 U.S. at 284). A declaration that
the federal statute was unconstitutional as applied would
prevent the continued transmission of payments to the
plaintiffs’ former spouses. /d. “Such a declaration would
not, however, amount to appellate reversal or modification
of a valid state court decree entered in an individual
plaintiff's divorce case. At bottom, an examination of the
federal constitutional challenge presented here against
the [statute] does not require scrutinizing and invalidating
any individual state court judgment.” Jd. As such, the
plaintiffs’ federal suit did not require the prohibited
exercise of appellate jurisdiction by the district court. /d
What this requirement targets is whether the
plaintiff's claims will require appellate review of state
court decisions by the district court. Prohibited appellate
review “consists of a review of the proceedings already
conducted by the ‘lower’ tribunal to determine whether it
reached its result in accordance with law.” Bolden v. City
of Topeka, Ks., 441 F.3d 1129, 1143 (10th Cir. 2006). It is
important to distinguish such appellate review from those
cases in which “a party attempts to litigate in federal court
a matter previously litigated in state court,” Exxon Mobil,
544 U.S. at 293, or in which “the federal plaintiff and the
idverse party are simultaneously litigating the same or a
similar dispute in state court,” Noel v. Hall, 341 F.3d 114:
1163 (9th Cir. 2003) (cited with approval in Exxon Mobil). I
the matter was previously litigated, there is jurisdiction as
long as the “federal plaintiff present[s] some independent
claim,” even if that claim denies a legal conclusion reached
by the state court. Exxon Mobil, 544 U.S. at 293 (internal
quotation marks & citation omitted; alteration in original)
When “the second court tries a matter anew and reaches
a conclusion contrary to a judgment by the first court,
without concerning itself with the bona fides of the prior
judgment,” the second, or federal, court “is not conducting
appellate review, regardless of whether compliance with
the second judgment would make it impossible to comply
with the first judgment.” Bolden, 441 F.3d at 1143. In the
ease of simultaneous litigation, both suits may proceed
under the well-established rule allowing parallel state
and federal litigation. Noel, 341 F.3d at 1163. In neither
of these situations, unlike in a suit seeking review of a
state-court judgment, “does Rooker-Feldman bar subject
matter jurisdiction in federal district court, for in neither
situation is the federal plaintiff complaining of legal injury
caused by a state court judgment because of a legal error
committed by the state court.” Jd. at 1164. Instead, “in
both situations, the plaintiff is complaining of legal injur
caused by the adverse party.” /d
In a case subsequent to Exxon Mobil, the Suprem
Court again emphasized that Rooker-Feldman is a “narrow
doctrine” that “applies only in limited circumstances.
Lance v. Dennis, 546 U.S. 459, 464-66, 126 S. Ct. 1198
163 L. Ed. 2d 1059 (2006) (internal quotation marks &
citations omitted). In light of this admonition, we hav
recognized that “caution is now appropriate in relyir
Append A
on our pre-Exxon formulation of the Hooker-Feldman
doctrine,” which focused on whether the state and
federal suits were “inextricably intertwined.” Gary v.
Braddock Cemetery, 517 F.3d 195, 200 n.5 (8d Cir. 2008).
In Exxon Mobil, the phrase “inextricably intertwined”
appears only three times, twice in the Court’s description
of Feldman and once in the Court’s discussion of the
lower court’s decision. 544 U.S. at 286 & n.1, 291. The
Court deliberately did not rely on this formulation in its
jurisdictional analysis, instead employing the four-part
inquiry that we have outlined above. See McCormick,
451 F.3d at 394 (“In Exxon, the Supreme Court implicitly
repudiated the circuits’ post-Feldman use of the phrase
‘inextricably intertwined’ to extend Rooker-Feldman
to situations where the source of the injury was not the
state court judgment.”). Although the term “inextricably
intertwined” was used twice by the Supreme Court in
Feldman, reliance on this term has caused lower federal
courts to apply Rooker-Feldman too broadly. The phrase
“inextricably intertwined” does not create an additional
legal test or expand the scope of Rooker-Feldman
beyond challenges to state-court judgments. When a
federal plaintiff brings a claim, whether or not raised in
state court, that asserts injury caused by a state-court
judgment and seeks review and reversal of that judgment,
the federal claim is “inextricably intertwined” with the
state judgment. See McCormick, 451 F.3d at 394-95;
Davani, 434 F.3d at 719; Hoblock, 422 F.3d at 86; see also
Bolden, 441 F.3d at 1141 (“({T]he purpose of the term is to
highlight that a challenge to a judgment is barred even if
the claim forming the basis of the challenge was not raised
in the state proceedings.”). The phrase “inextricably
intertwined,” however, “has no independent content. It
is simply a descriptive label attached to claims that meet
the requirement:
122 F.3d at 87.
4. Defendants cite to cases in which, post-Exxon Mob
we relied on our pre-Exxon Mobil formulation of the Rooker
Feldman doctrine, specifically the “inextricably intertwined” test.
Although we cited our pre-Exxon Mobil definition of “inextricably
intertwined,” at bottom, the holdings in these cases rested on the
Same concerns at issue in Exxon Mobil--whether the plaintiff's
claim complains of an injury caused by a state-court judgment
rendered before the federal proceeding and seeks review and
rejection of that judgment. Specifically, in Taliaferro v. Darby
Township Zoning Board, 458 F.3d 181, 193 (3d Cir. 2006), we held
that there was federal subject matter jurisdiction as the federal
action “was commenced ... well before any state court judgment
was reached, so the district court could not have been invited t
review and reject such a judgment.”
In two other cases, we held that the Rooker-Feldman doctrine
barred the suit because a favorable decision in federal court
would require negating or reversing the state-court decision. /%
re Madera, 586 F.3d 228, 232 (8d Cir. 2009); In re Knapper, 407
F.3d 573, 581 (8d Cir. 2005). As such, we described the state and
federal suits as “inextricably intertwined,” using this phrase as a
shorthand for the concept that the plaintiff could not “prevail on
her federal claim without obtaining an order that would negate
the state court[s’] Jjudgment(s].” Jn re Knapper, 407 F.3d at 581
(internal quotation marks & citation omitted; alterations i!
original).
Accordingly, all three of these cases are consistent with
Exxon Mobil and with the approach we adopt today. Nevertheless,
for the sake of clarity, we should exercise “caution . . . in relying
on our pre-Exxon formulation of the Rooker-Feldman doctrine,
particularly those cases which may be read to suggest that the
phrase “inextricably intertwined” created an additional legal test
Gary, 517 F.3d at 200 n.5
‘
ippenai1e
As a final step, should the Rooker-Feldman doctrine
not apply such that the district court has jurisdiction,
“(d]isposition of the federal action, once the state-court
adjudication is complete, would be governed by preclusion
law.” Exxon Mobil, 544 U.S. at 293. In other words, the
federal court must “give the same preclusive effect to
a state-court judgment as another court of that State
would give.” Jd. (quoting Parsons Steel, Inc. v. First Ala.
Bank, 474 U.S. 518, 523, 106 8. Ct. 768, 88 L. Ed. 2d 877
(1986)) (further citation omitted). As Faxon Mobil makes
clear, the Rooker-Feldman inquiry is distinct from the
question of whether claim preclusion (res judicata) or
issue preclusion (collateral estoppel) defeats the federal
suit. Importantly, preclusion is not jurisdictional. Jd.
“In parallel litigation, a federal court may be bound to
recognize the claim- and issue-preclusive effects of a
state-court judgment, but federal jurisdiction over an
action does not terminate automatically on the entry of
judgment in the state court.” Jd.
Turning to the instant case, the critical question
is whether Great Western is a “state-court loser| ]
complaining of injuries caused by state-court judgments
rendered before the district court proceedings commenced
and inviting district court review and rejection of those
judgments.” /d. at 284. Clearly, Great Western lost in state
court, and the state-court judgments were rendered before
Great Western commenced its federal suit. The remaining
requirements, however, present closer questions. Great
Western alleges an extensive conspiracy among Rutter,
numerous attorneys, and various state-court judges to
engineer Great Western’s defeat in state court. It claims
3 0)
va
Appendia A
that, pursuant to this conspiracy, “the court decisions were
predetermined prior to the beginning of the hearing.”
(J.A. at 126 [Proposed Am. Compl. 3, P 93].) As a result,
Great Western was purportedly forced to litigate in
a rigged system and could not “receive a fair hearing
in Pennsylvania against ADR Options and Rutter,” in
violation of its constitutional rights. (/d. [Proposed Am.
Compl. 3, P 94].) Does such a claim assert injury caused
by state-court judgments and seek review and rejection
of those judgments? We think not.
Grappling with similar claims, in two cases the
Seventh Circuit has held that Rooker-Feldman did not
operate to bar the federal proceedings. In Nesses v.
Shepard, 68 F.3d 1003, 1004 (7th Cir. 1995), the federal
plaintiff alleged that his losses in state court were
the product of a conspiracy among the judges and the
lawyers. The court acknowledged that Nesses “was in a
sense attacking the ruling by the state court that he had
been inexcusably dilatory in complying with a discovery
order; he was in the same sense attacking the decisions
themselves that dismissed his suit.” Jd. Another aspect
of Nesses’s suit could also be viewed as an attack on the
state-court judgments:
Nesses cannot show injury from the alleged
conspiracy unless the decision dismissing his
suit for breach of contract was erroneous.° For
5. Note that even if the state-court decision was justified, a
plaintiff could nevertheless be entitled to some relief based on the
violation of his or her due process rights, which is an independent
injury. See Carey v. Piphus, 435 U.S. 247, 266, 98 S. Ct. 1042, 55
26a
Appendix A
suppose that although there was this nefarious
conspiracy his suit had no merit and so would
have failed even if there had been no conspiracy.
Then the conspiracy did him no harm and
without harm there is no tort....Toshow harm
and thus keep the present suit alive, Nesses
would have to show that the decision by the
Indiana court in his suit for breach of contract
was erroneous, and that, it may appear, Rooker-
Feldman bars him from doing.
Id. at 1005 (internal citations omitted). But the Rooker-
Feldman doctrine, the court concluded, “is not that broad.”
Id. Nesses was not merely claiming that the decision of the
state court was incorrect or that the decision itself violated
his constitutional rights; such claims would be barred.
Instead, because Nesses alleged that “people znvolved
in the decision violated some independent right of his,
such as the right (if it is a right) to be judged by a tribunal
that is uncontaminated by politics, then he [could], without
being blocked by the Rooker-Feldman doctrine, sue to
vindicate that right.” Jd. (emphasis added). Moreover,
Nesses could, “as part of his claim for damages,” show
L. Ed. 2d 252 (1978). The Supreme Court has held that plaintiffs
who are denied due process can recover mental or emotional dis-
tress damages or nominal damages. /d. at 262-64, 266 (“Because
the right to procedural due process is ‘absolute’ in the sense that
it does not depend upon the merits of a claimant’s substantive as-
sertions, and because of the importance to organized society that
procedural due process be observed, we believe that the denial of
procedural due process should be actionable for nominal damages
without proof of actual injury.” (internal citations omitted))
ala
Appendia A
“that the violation caused the decision to be adverse to
him and thus did him harm.” Jd. If Rooker-Feldman
barred jurisdiction, “there would be no federal remedy
for a violation of federal rights whenever the violator so
far succeeded in corrupting the state judicial process as
to obtain a favorable judgment.” Jd.
In Brokaw v. Weaver, 305 F.3d 660, 662 (7th Cir.
2002), the plaintiff alleged that her relatives and officials
conspired to cause the state to forcibly remove her from
her parents’ home. She contended that “the defendants
conspired--prior to any judicial involvement--to cause
false child neglect proceedings to be filed, resulting in her
removal from her home in violation of her . . . substantive
and procedural due process rights” and explained “that
she [wa]s seeking damages for the conspiracy, not for the
state court’s decision in the child neglect proceeding.” /d.
at 665. The court held that Nesses applied as the plaintiff
was “alleging that the people involved in the decision to
forcibly remove her from her home and her parents . . .
violated her constitutional rights, independently of the
state court decision.” Jd. Even if the plaintiff would not
have suffered any damages from the alleged conspiracy
absent the state-court order, her claim was not barred by
Rooker-Feldman “because her claim for damages is based
on an alleged independent violation of her constitutional
rights. It was this separate constitutional violation which
caused the adverse state court decision.” /d. at 667; see also
Ernst v. Child & Youth Servs., 108 F.3d 486, 491-92 (8d
Cir. 1997) (holding that a claim alleging that defendants
violated plaintiff’s due process rights by making biased
recommendations to the state court, resulting in an
28a
Appendix A
improper ruling, was not barred by Rooker-Feldman a
it was separate from the state-court judgment).®
We find the reasoning of the Seventh Circuit persuasive
and conclude that it applies here. As in Nesses, Great
Western, by alleging a conspiracy between Defendants
and the Pennsylvania judiciary to rule in favor of Rutter
and ADR Options, is attacking the state-court judgments.
But, like Nesses, Great Western is not merely contending
that the state-court decisions were incorrect or that they
were themselves in violation of the Constitution. Instead,
Great Western claims that “people involved in the decision
violated some independent right,” that is, the right to an
impartial forum. Nesses, 68 F.3d at 1005. The alleged
agreement to reach a predetermined outcome in a case
would itself violate Great Western’s constitutional rights,
independently of the subsequent state-court decisions. See
Marshall v. Jerrico, Inc., 446 U.S. 238, 242, 1008S. Ct. 1610,
64 L. Ed. 2d 182 (1980) (“The Due Process Clause entitles
a person to an impartial and disinterested tribunal in both
civil and criminal cases.”). “[Bjecause [Great Western’s]
claim for damages is based on an alleged independent
6. In holding that the Rooker-Feldman doctrine did not
apply, both Brokaw and Ernst also relied on an alternative ground-
-that the plaintiff did not have an opportunity to present the cur-
rent constitutional claims in state court. Brokaw, 305 F.3d at 668;
Ernst, 108 F.3d at 492. This, however, was an additional reason for
concluding that Rooker-Feldman is inapplicable when a plaintiff
presents a claim in federal court that individuals involved in a
state-court decision violated an independent constitutional right.
We need not decide today whether this exception to the Rooker
Feldman doctrine remains good law following Exxon Mobil
Appendara A
violation of [its] constitutional rights,” the source of Great
Western's purported injury was the actions of Defendants
and members of the Pennsylvania judiciary, not the state
court decisions themselves. Brokaw, 305 F.3d at 667. “It
was this separate constitutional violation which caused
the adverse state court decision” and the injury to Great
Western. /d.; accord McCormick, 451 F.3d at 392. Thus, as
the state-court judgments were not themselves the cause
of Great Western’s alleged injuries, the Rooker-Feldman
doctrine did not deprive the District Court of jurisdiction
over Great Western’s claims.
The fact that Defendants’ actions, rather than the
state-court judgments, were the source of Great Western’s
injuries is alone sufficient to make Rooker-Feldman
inapplicable here. Nevertheless, it is worthwhile to discuss
the other key requirement--whether Great Western seek
review and rejection of the state-court judgments.
Regardless of the merits of the state-court decision
if Great Western could prove the existence of a conspiracy
to reach a predetermined outcome in state court, it could
recover nominal damages for this due process vioiation.
Carey, 435 U.S. at 262-64, 266. Great Western’s entitlement
to such damages could be assessed without any analysis
of the state-court judgments. To recover for more than
the alleged due process violation, however, Great Western
would have to show that the adverse state-court decisions
were entered erroneously. See Nesses, 68 F.3d at 1005.
This is not the type of appellate review of state-court
decisions contemplated by the Rooker-Feldman doctrine
In both Rooker and Feldman, the plaintiffs sought
have the state-court decisions undone or declared nu
na void by the federal courts. See Rooker, 263 U.S. at
414: Feldman, 460 U.S. at 468-69, 472-73. The relief
requested by the plaintiffs in the federal courts would have
required effectively overruling the state-court judgments.
This is not the case here. Great Western may, “as part of
[its] claim for damages,” show “that the [constitutional |
violation caused the decision{s] to be adverse to [it] and
thus did [it] harm.” Nesses, 68 F.3d at 1005. A finding
by the District Court that state-court decisions were
erroneous and thus injured Great Western would not
result in overruling the judgments of the Pennsylvania
courts. Pursuant to Kxxon Mobil, a federal plaintiff may
not seek “review and rejection” of state-court judgments
544 U.S. at 284. Here, while Great Western’s claim for
damages may require review of state-court judgments
and even a conclusion that they were erroneous, those
judgments would not have to be rejected or overruled for
Great Western to prevail. Accordingly, the review and
rejection requirement of the Rooker-Feldman doctrine
is not met, and the District Court properly exercised
jurisdiction over Great Western’s suit
Ordinarily, having concluded our jurisdiction:
inquiry, the next step would be to apply state law to
determine the preclusive effect of the prior state-court
judgments. Defendants did not raise the issues of re
judicata or collateral estoppel in their motion to dismiss 01
before this Court. Estoppel, as an affirmative defense, may
be raised in an answer and is not waived through failuré
to include it in a motion to dismiss. See Fed. R. Civ. P. 8(¢)
12(h). Preelusion, however, is not jurisdictional. Waa
we can affirm the District
~_
—s
ros
Lnis 1SSue
merits, we need not reach the question of
effect of the prior state-court judgment:
urn to the merits of Great Western’s arguments that
District Court erroneously denied its final motion for |
mend the complaint and its mot [Or ]
‘
v lave GISCU C1q, allel H f
efendants’ motion to dismiss, Great Western fil
\otion for reconsideration and a motion for leave to amet
ittaching a draft amended complaint, Proposed Amend
omplaint 1. While the motion for reconsideration v
pending, Great Western filed two additional motior
for leave to amend, each time attaching a new dra
imended complaint--Proposed Amended Complaint
then Proposed Amended Complaint 3. In ruling on
motion for reeonsideration, the District Court considere
Proposed Amended Complaint 2, but not Propost
Amended Complaint 3. In a footnote, the District. (
‘xplained that “[tlo allow plaintiff to repeatedly subn
,
but
lrafts of its complaint while plaintiffs original moti
il to defendant
still pending would be prejudici:
ire
\. at 3.) Great Wests ny
(*] Ime! |
;
ile of { ivil Procedure Ld>(a) wh ame) 1a i |
amend its pleading only tI ne opp
eely give leave when justice so requir
Rule 15(a), the Supreme Court has held
In the absence of any apparent or declare
reason--such as undue delay, bad faith or dilatory
motive on the part of the movant, repeated
failure to cure deficiencies by amendments
previously allowed, undue prejudice to the
opposing party by virtue of allowance of the
amendment, futility of amendment, etc.--the
leave sought should, as the rules require, be
“freely given.” Of course, the grant or denial of
an opportunity to amend is within the discretion
of the District Court, but outright refusal to
errant the leave without any justifying reason
appearing for the denial is not an exercise of
discretion; it is merely abuse of that discretion
and inconsistent with the spirit of the Federa
Rules.
Foman v. Davis, 371 U.S. 178, 182, 83S. Ct. 227, 9 L. Ed
2d 222 (1962). As we have explained, “[d]istrict courts
are the experts in the field of applied trial procedure, s:
That
said, we also have acknowledged that the liberal pleading
philosophy of the federal rules does limit a district court’s
discretion to deny leave to amend.” Bjorgung, 550 F.3d
at 266 (citing Adams v. Gould, 739 F.2d 858, 864 (3d
Cir. 1984)). Further guiding district courts’ exercise of
discretion, we have held that “if a complaint is subject to
a Rule 12(b)(6) dismissal, a district court must permit a
curative amendment unless such an amendment would be
nequitable or futile.” Phillips v. County of Allegheny, 515
d ppendix
F.3d 224, 245 (3d Cir. 2008) (citing Alsto
F.3d 229, 235 (3d Cir. 2004)).
The District Court concluded that allowing Great
Western to submit a third proposed amended complaint
would be prejudicial to defendants and denied leave to
amend on this ground. We agree with Great Western
that the District Court’s conclusion regarding prejudice
was erroneous.’ Nevertheless, we will affirm the District
Court on the ground that granting leave to amend would
7. Althowgh Defendants opposed Great Western’s motions
for leave to amend before the District Court, they did not argue
that granting leave to amend would prejudice them. Similarly,
they do not make that argument in their brief on appeal. They
contend before us, as they asserted in the District Court, that
granting leave to amend would be futile as all versions of Great
Western’s complaint failed to state a claim on which relief could
be granted. In denying leave to amend on the ground of prejudice,
the District Court did not articulate specifically how permitting
amendment would prejudice Defendants. See Cureton v. Nat'l
Collegiate Athletic Ass’n, 252 F.3d 267, 276 (8d Cir. 2001) (“[T]he
obligation of the district court . . . is to articulate the prejudice
caused by the [amendment] and to balance those concerns against
the reasons for [the amendment].”).
Nothing in the facts of this case demonstrates any particular
prejudice that would have resulted from allowing Great Western
to substitute Proposed Amended Complaint 3, as long as the
District Court had given Defendants an opportunity to respond.
We recognize that the District Court’s conclusion that permitting
Great Western to repeatedly amend its complaint would prejudice
Defendants is entitled to substantial deference. Nevertheless, in
light of the record and the absence of a reasoned explanation of how
Defendants would be prejudiced by the amendment, we conclude
that the District Court erred when it denied Great Western’s third
motion for leave to amend on grounds of prejudice
See United States v. Sanchez, 562 F.3d
275, 279 (3d Cir. 2009) (holding that an appellate court
may affirm the result reached by the district court o1
ilternative grounds, provided that the record support
e judgment)
Under Rule 15(a), futility of amendment is a sufficier
asis to deny leave to amend. Futility “means that the
complaint, as amended, would fail to state a claim upon
which relief could be granted.” In re Merck & Co. Sec
Derivative, & ERISA Litig., 493 F.3d 393, 400 (8d Cir
2007) (internal quotation marks & citation omitted). The
standard for assessing futility is the “same standard of
legal sufficiency as applies under [Federal] Rule [of Civil
Procedure] 12(b)(6).” Shane v. Fauver, 213 F.3d 118,
115 (8d Cir. 2000). In other words, “{t]he District Court
determines futility by taking all pleaded allegations as
true and viewing them in a light most favorable to the
plaintiff.” Winer Family Trust v. Queen, 503 F.3d 319,
330-31 (8d Cir. 2007) (citing In re Alpharma, Inc. Sec
Liteg., 372 F.3d 137, 153-54 (8d Cir. 2004)). Typically, “[w
review for abuse of discretion, and there is none where
pleading deficiencies would not have been remedied by
proposed amendments.” Kanter v. Barella, 489 F.3d 170
181 (8d Cir. 2007) (citing In re Adams Golf, Inc. Secs
Litig., 381 F.8d 267, 280 (8d Cir. 2004)). In the instant
case, however, the District Court did not consider whether
ermitting Great Western to amend and substitut
“ Yala . 4 Amen :
+y>4
thus our review is de novo, applying the
that would have been applied by the Court
To determine whether the substitution of Propose:
Amended Complaint 3 would have been futile, we conside}
the merits of Great Western’s motion for reconsideratior
and the additional allegation contained in that versior
of the complaint. Specifically, we question whether the
addition of the new allegation is sufficient to state a claim
under 42 U.S.C. § 1983 such that the District Court should
have granted Great Western’s motion for reconsideratio
To prevail on a § 1983 claim, a plaintiff must allege
that the defendant acted under color of state law, in other
words, that there was state action. Lugar v. Edmondso?
Oil Co., 457 U.S. 922, 929, 102 S. Ct. 2744, 73 L. Ed. 2
482 (1982). As relevant to this case, the Supreme Court
has held that “[p]rivate parties who corruptly conspirs
with a judge in connection with [an official judicial act
are... acting under color of state law within the meaning
of § 1983.” Dennis v. Sparks, 449 U.S. 24, 29, 101 S$
8. Inthe Order denying Great Western's motion forr
sideration, the District Court evaluated whether allowing Grea
Western to substitute Proposed Amended Complaint 2 would |
futile. The District Court did not assess futility with respect
Proposed Amended Complaint 3, instead declining to consider tha
version on the ground that it would be prejudicial to Defendants
As we have noted, the refusal to consider Proposed Amended
Complaint 3 on the basis of prejudice to Defendants was an abus:
of discretion. We see no reason for remand, however, becau
for the reasons stated in our opinion, it is clear that
.
“An j ry nea 1 { mn! »¢ 2
roposet - é (le { ‘ Y DI! iT +
Appendix
183, 66 L. Ed. 2d 185 (1980); see also Lugar, 457 U.S. at
941 (“[A] private party’s joint participation with state
officials in the seizure of disputed property is sufficient
to characterize that party as a ‘state actor’ for purposes
of the Fourteenth Amendment.”). Thus, in order to state
a claim under § 1983, Proposed Amended Complaint 3
must have adequately pled the existence of a conspiracy
between Defendants, who are private parties, and the
judges of the Pennsylvania court system.
In two recent landmark cases, the Supreme Court
reexamined Federal Rule of Civil Procedure 8 and the
pleading standards that a plaintiff must meet to state a
claim that will survive a motion to dismiss under Rule
12(b)(6). The first of these two cases, Bell Atlantic Corp.
v. Twombly, focused on “the proper standard for pleading
a Sherman Act] antitrust conspiracy through allegations
of parallel conduct.” 550 U.S. 544, 553, 127 S. Ct. 1955,
167 L. Ed. 2d 929 (2007). The Court reaffirmed that
“Federal Rule of Civil Procedure 8(a)(2) requires only
a short and plain statement of the claim showing that
the pleader is entitled to relief” and that this standard
does not require “detailed factual allegations.” Jd. at 555
(internal quotation marks & citation omitted). Moreover,
the Court reemphasized that at the motion to dismiss
stage, the factual matter in the complaint must be taken
as true and “a well-pleaded complaint may proceed even
if it strikes a savvy judge that actual proof of those facts
is improbable.” Jd. at 556.
In Twombly, however, the Supreme Court announced
ynew concepts.” Phillips. 515 F.3d at 231. First. the
Appenarw A
Twombly Court explained that Rule 8(a)(2) “requires a
‘showing, rather than a blanket assertion, of entitlement
to relief.” 550 U.S. at 555 n.3. In other words, “a plaintiff's
obligation to provide the ‘grounds’ of his ‘entitle[ment] to
relief’ requires more than labels and conclusions, and a
formulaic recitation of the elements of a cause of action will
not do.” /d. at 555 (quoting Papasan v. Allain, 478 U.S. 265,
286, 106 8S. Ct. 2932, 92 L. Ed. 2d 209 (1986)) (alteration
in original). The complaint’s “[fJactual allegations must
be enough to raise a right to relief above the speculative
level.” Id. Second, the Twombly Court rejected the oft-
cited Conley standard “that a complaint should not be
dismissed for failure to state a claim unless it appears
beyond doubt that the plaintiff can prove no set of facts
in support of his claim which would entitle him to relief.”
Id. at 561 (quoting Conley, 355 U.S. at 45-46). The Court
retired this test as “an incomplete, negative gloss on an
accepted pleading standard: once a claim has been stated
adequately, it may be supported by showing any set of facts
consistent with the allegations in the complaint.” Jd. at 563.
Applying these general standards to the task o
pleading an antitrust conspiracy, the Court explained that
[AJn allegation of parallel conduct and a
bare assertion of conspiracy will not suffice.
Without more, parallel conduct does not suggest
conspiracy, and a conclusory allegation of
agreement at some unidentified point does not
supply facts adequate to show illegality. Hence,
when allegations of parallel conduct are set
out in order to make a § 1 claim, they must be
Appendix A
placed in a context that raises a suggestion of
a preceding agreement, not merely parallel
conduct that could just as well be independent
action.
Id. at 556-57. Analyzing the complaint at issue, the Court
held that it was insufficient as it failed to “set forth a
single fact in a context that suggests an agreement.” Jd.
at 561-62. Although the complaint alleged parallel conduct,
it gave the Court “no reason to infer that the companies
had agreed among themselves to do what was only natural
anyway.” /d. at 566. Finding an “obvious alternative
explanation” for the parallel conduct, the Court concluded
that the “plaintiffs here have not nudged their claims
across the line from conceivable to plausible, fand] their
complaint must be dismissed.” Jd. at 567, 570.
The second case, Ashcroft v. Iqbal, concerned
allegations of discrimination on the basis of race, religion,
or national origin in the wake of the September 11, 2001
terrorist attacks. U.S. ,129S. Ct. 1937, 1942, 173 L.
Ed. 2d 868 (2009). The Supreme Court clarified that “[o]
ur decision in Twombly expounded the pleading standard
for ‘all civil actions.” Jd. at 1953 (quoting Fed. R. Civ.
P. 1). Analyzing Twombly, the Iqbal Court explained
that “{t}wo working principles underlie our decision .. .
. First, the tenet that a court must accept as true all of
the allegations contained in a complaint is inapplicable to
legal conclusions. ... Second, only a complaint that states
a plausible claim for relief survives a motion to dismiss.’
Id. at 1949-50 (internal citations omitted). In light of these
principles, the Court laid out a two-pronged approach:
Appendix A
[A] court considering a motion to dismiss can
choose to begin by identifying pleadings that,
because they are no more than conclusions, are
not entitled to the assumption of truth. ... When
there are well-pleaded factual allegations, a
court should assume their veracity and then
determine whether they plausibly give rise to
an entitlement to relief.
Id. at 1950. With respect to conclusory allegations, the
Court clarified that “we do not reject these bald allegations
on the ground that they are unrealistic or nonsensical. .
.. Itis the conclusory nature of [such] allegations, rather
than their extravagantly fanciful nature, that disentitles
them to the presumption of truth.” Jd. at 1951.
In light of Twombly, “it is no longer sufficient to
allege mere elements of a cause of action; instead ‘a
complaint must allege facts suggestive of [the proscribed]
conduct.” Phillips, 515 F.3d at 233(quoting Twombly, 550
U.S. at 563 n.8) (alteration in original). Noting that “[c]
ontext matters in notice pleading,” we held that “some
complaints will require at least some factual allegations to
make out a ‘showing that the pleader is entitled to relief,
in order to give the defendant fair notice of what the...
claim is and the grounds upon which it rests.” Jd. at 232
(quoting Twombly, 550 U.S. at 555). We summed up the
Twombly pleading standard as follows: “{S]tating ...a
claim requires a complaint with enough factual matter
(taken as true) to suggest’ the required element. This
‘does not impose a probability requirement at the pleading
stage,’ but instead ‘simply calls for enough facts to raise a
reasonable expectation that discovery will reveal evidence:
40a
Appendix A
of’ the necessary element.” /d. at 234 (quoting Twombly,
550 U.S. at 556). In other words, “there must be some
showing sufficient to justify moving the case beyond the
pleadings to the next stage of litigation.” Jd. at 234-35.
We have held that to properly plead an unconstitutional
conspiracy, a plaintiff must assert facts from which a
conspiratorial agreement can be inferred. D.R. v. Middle
Bucks Area Vocational Tech. Sch., 972 F.2d 1364, 1377
(3d Cir. 1992); see also Startzell v. City of Philadelphia,
533 F.3d 183, 205 (8d Cir. 2008) (stating that a conspiracy
requires a “meeting of the minds”) (further citation
omitted). This holding remains good law following
Twombly and Igbal, which, in the conspiracy context,
require “enough factual matter (taken as true) to suggest
that an agreement was made,” in other words, “plausible
grounds to infer an agreement.” Twombly, 550 U.S. at 556.
Great Western’s Proposed Amended Complaint 3 fails to
meet this standard.
Under /qbal, to assess the sufficiency of Proposed
Amended Complaint 3, we “begin by identifying pleadings
that, because they are no more than conclusions, are not
entitled to the assumption of truth.” 129 S. Ct. at 1950.
Accordingly, we do not consider any conclusory allegations
that there was “a corrupt conspiracy,” “an agreement,”
or “an understanding in place between the Defendants
and the Philadelphia judicial system.” (J.A. at 112, 119
[Proposed Am. Compl. 3, PP 2, 51].) As the /gbai Court
clarified, “we do not reject these bald allegations on the
ground that they are unrealistic or nonsensical. . . . It is
the conclusory nature of [such] allegations” that makes
them unacceptable. 129 8S. Ct. at 1951.
Appendix A
The Supreme Court has held that “merely resorting
to the courts and being on the winning side of a lawsuit
does not make [the winning] party a co-conspirator or a
joint actor with the judge.” Dennis, 449 U.S. at 28. Instead,
Great Western must plead an agreement between the
state court judges and Defendants to rule in favor of ADR
Options and Rutter. To properly plead such an agreement,
“a bare assertion of conspiracy will not suffice.” Twombly,
550 U.S. at 556.
Applying Twombly, Great Western’s statement that
“Defendants engaged in a concerted action of a kind not
likely to occur in the absence of agreement” is inadequate
to properly plead an agreement. (J.A. at 120 [Proposed
Am. Compl. 3, P 55].) The factua! allegations of agreement
on which Great Western rests its claim are as follows: (1)
according to Wiley, on or about March 1, 2006, Tintner
stated that there was “no way that a Philadelphia court
is ever going to find against Thomas Rutter given his
relationship with the Philadelphia court system” (2d. at
118 [Proposed Am. Compl. 3, P 43]); (2) ADR Options is
the largest provider of ADR services in Pennsylvania, has
a large roster of former judges employed as arbitrators,
and pays its arbitrators handsomely; and (8) in May 2009,
Rutter testified at a deposition that some of the judges who
had ruled for ADR Options and against Great Western
had already approached him about employment after they
leave the bench. Great Western alleges that these factual
allegations, when viewed in concert with the decisions
rendered by the Pennsylvania state courts, evidence
“unnatural parallelism” and a quid pro quo relationshi
(Great Western Br. 18, 20.)
Appendix A
At most, Great Western has alleged that Pennsylvania
state-court judges hoped to secure employment with
ADR Options after leaving the bench and thus had an
incentive to rule in the company’s favor. Fatal to its
claim, however, Great Western failed to make any factual
contentions concerning conduct by Rutter or any of the
other Defendants. Specifically, even Proposed Amended
Complaint 3 is devoid of allegations that Rutter or any
of the Defendants did or said something to the judges
to create an understanding that favorable rulings could
result in future employment. Instead, the allegations
in the complaint, even when viewed in the light most
favorable to Great Western, describe unilateral action
on the part of certain judges. For a judge to approach
a party for whom he or she has just ruled to discuss the
possibility of working for that party certainly creates a
strong appearance of impropriety. Yet this allegation,
without a complementary allegation of conduct by the non
judicial actor, does not plausibly suggest the existence of a
conspiracy between the party and the judge to exchange
favorable rulings for future employment.
A comparison between the allegations in this casi
and those in Dennis, which the Supreme Court held
were sufficient to survive a motion to dismiss, further
emphasizes the deficiencies in Great Western’s complaint
In Dennis, a state court enjoined the plaintiffs from
producing minerals from certain oil leases. 449 U.S. at 25
The state appellate court dissolved the injunction as illegal,
and the plaintiffs brought a § 1983 claim, contending that
“the injunction had been corruptly issued as the result o!
conspiracy between the judge and the other defendant
thus causing a deprivation of property . without due
process of law.” /d. at 26. Specifically, the plaintiffs claimed
that the private party defendants had bribed the state
court judge to cause him to issue an injunction in their
favor. /d. at 28. This alleged act of bribery was conduct
by the non-judicial defendants that resulted in a corrupt
conspiracy to rule against the plaintiffs. In contrast, Great
Western’s complaint contains no similar allegations of
specific conduct by the non-judicial actors that caused t}
judges to enter into an unlawful conspiracy
Furthermore, Great Western has not pleaded any fact
that plausibly suggest a meeting of the minds betwee!
Rutter and members of the Pennsylvania judiciary
See Twombly, 550 U.S. at 556 (holding that a plaintiff
claiming conspiracy must plead “enough fact to raise a
reasonable expectation that discovery will reveal evidences
of illegal agreement”). The complaint sets forth merely a
“conclusory allegation of agreement at some unidentified
point[|, which] does not supply facts adequate to show
illegality.” Jd. at 557. Specifically, Great Western ha
failed to allege except in general terms the approximat
time when the agreement was made, the specific parti
to the agreement (i.e., which judges), the period of th
conspiracy, or the object (**58] of the conspiracy. See, e.g
Shearin v. E.F. Hutton Group, Inc., 885 F.2d 1162, 1166
(3d Cir. 1989) (“To plead conspiracy adequately, a plaintiff
must set forth allegations that address the period of thi
conspiracy, the object of the conspiracy, and the certair
actions of the alleged conspirators taken to achieve that
purpose.”), abrogated on other grounds by Beck v. Prupi
9 TJ.S. 494, 120 S. Ct. 1608. 146 L. Ed. 2d 561 (2000
hcient factual allegation:
nfer an agreement,” a
at 556. Anv effort to amene
nended Complaint 3 theref
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PENDIA B UDGMENT Ol
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.PPENDIX C — LETTER ORDER OF THI
UNITED STATES DISTRICT COURT FOI
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FILED JUNE 24, 2009
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DISTRICT OF NEW JERSE
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Princeton Pike
vidence that could have been raised before the entry 01
judgment. See Charles A. Wright, Arthur R. Miller &
Mary Kay Kane, Federal Practice and Procedure § 2810.1.
“A party Seeking reconsideration must show more than a
disagreement with the Court’s decision, and recapitulation
of the cases and arguments considered by the court before
rendering its original decision fails to carry the moving
party’s burden.” Gutierrez v. Ashcroft, 289 F. Supp. 2d
555, 561 (D.N.J. 2003) affd, Gutierrez v. Gonzales, 125
Fed. Appx. 406 (3d Cir. 2005) (quoting G-69 v. Degnan, 748
E’. Supp. 274, 275 (D.N..J. 1990)). Such motions will only be
granted where (1) an intervening change in the law has
occurred, (2) new evidence not previously available has
emerged, or (3) the need to correct a clear error of law or
prevent a manifest injustice has arisen. See North River
Ins. Co. v. CIGNA Reinsurance Co., 52 F.3d 1194, 1218 (8d
Cir. 1995). Because reconsideration of a judgment after
ts entry is an extraordinary remedy, requests pursuant
o these rules are to be granted “sparingly,” Yurecko v
Port Auth. Trans-Hudson Corp. 279 F. Supp. 2d 606, 608
D.N.J. 2003); See also NL Indus. Inc. v. Commercial
Union Ins. Co., 935 F. Supp. 513, 516 (D.N.J. 1996), and
nly when “dispositive factual matters or controlling
lecisions of law” were brought to the court’s attention
but not considered. Yurecko, 279 F. Supp. 2d at 609; Se:
= <a (
- >,]L _ 77 J Y ‘ . ne9 YE
1iSO Pelham j > t, y \Vioft g ‘ ] hy Sup) 1063. ray
\ t {
N / OO’
DISCUSSIO
Plaintiff does not contend that an intervening chang
in law has occurred and, although plaintiff, as discussed
later, makes myriad additions to its allegations, he
cannot seriously contend that they are based on evidence:
that was previously unavailable. Plaintiffs motion for
reconsideration can only succeed if “the need to correct
a clear error of law or prevent a manifest injustice has
arisen.” North River Ins. Co., 52 F.3d at 1218. In this
vein, plaintiff makes two arguments. First, plaintiff
insists that leave to amend must be freely granted under
Fed. R. Civ. P 59(e) and 15(a) and that, specifically in civil
rights cases, leave to amend must be granted sua spont:
Second, plaintiff asserts that the Court erred by applying
ia
a heightened pleading standard to plaintiff’s conspira
ialm
Although leave to amend must be granted bef
dismissal in civil rights cases sua sponte, leave shoul
not be granted if “doing so would be inequitable or futile
F‘letcher-Harlee Corp. v. Pote Concrete Contractors
Inc., 482 F.3d 247, 251 (8d Cir. 2007). In this case
sranting leave to amend would be futile. Plaintiff’s draf
amended complaint is replete with legal argument, (Se:
e.g., Proposed Am. Compl. 1 30 (arguing that collatera
estoppel could not apply plaintiffs state suit); {1 33-36
(asserting that the Pennsylvania courts committed error
of law).) and unsupported and speculative allegations
(See, e.g. id. 148 (concluding that Tinter’s knowledge wa
acquired in conversations with his clients, through h
ae :
presentation and his position c nartner at defen:
ao | +} »hit - € | , nahinin 4}
x MOtTNSCNUA); i ol (concluding th:
reveals an understanding in place”
Even if plaintiff’s draft amended complaint
ot suffer from these problems, it would not support
plaintiff’s conspiracy claim. Plaintiff’s essential claim
has not changed. Plaintiff alleges that the “judiciary was
beholden to the authority and influence of defendants.”
(See Proposed Am. Compl. 9 94.) Plaintiff’s primary
factual support for this allegation remains a comment by
defendant Robert S. Tinter that “there is no way that a
Philadelphia court is ever going to find against Thomas
Rutter given his relationship with the Philadelphia court
system.” (See Proposed Am. Compl. { 43.) In its earlier
Opinion, the Court concluded “it is not reasonable to infer,
solely on the basis of Tinter’s comment, that there exists
1 conspiracy between defendants and the Philadelphia
‘court system.” (Opinion at 11-12.) Although plaintiff
attempts to amplify the meaning of Tinter’s comment,
See Proposed Am. Compl. {1 97 (concluding that Tinter’s
statement indicates an agreement was in place betwee!
the judiciary and defendants).), such an interpretation
-onflicts with this Court’s conclusion that these comments
io not support such an inference. (See Opinion at 11-12
Plaintiffs draft amended complaint must assert ne\
illegations to survive a motion to dismiss. Plaintiffs new
.llegations are essentially two. First, plaintiff alleges that
‘misapplications of law” in the earlier state proceedings
ire SO egregious that they “reflect[] an external undus
nfluence.” (See Proposed Amended Compl. 9 31-39
} mw Be. + 4
¥ ‘ a > oF eek al tT ¢ ‘ 14 ) > ’ »nonn > =
i | s™i
case brought by ADR Options and Rutter against Jame:
F. Wiley, (the “Wiley Case”) as indicative of an agreement
to evade a ruling against ADR Options or Rutter.’ (Se
Proposed Am. Compl. 9 79.)
Making the most generous inferences, these allegations
do not support a conspiracy claim. First, it is implausible
to conclude that the decisions of the state courts were so
egregious as a matter of law as to allow an inference that
they were a product of conspiracy. Such decisions were
upheld on appeal and the Pennsylvania Supreme Court
declined to review them. (See P1.’s Draft Amended Comp!
1 21-22; 36-37.) Second, the relevance of the Wiley Case is
questionable as it does not involve the plaintiff. Moreover,
the purported delays do not support a reasonable inference
that the court is under any improper influence. In sum,
plaintiff's additional allegations fail to remedy the defects
in its original complaint.
2. Although plaintiff's proposed amended complaint is n
clear, it appears that Wiley was counsel to Great Western in th:
state proceedings. (See P1!.’s Draft Amended Compl. fl 41.) Plaintiff
asserts that the Wiley Case arises from circumstances similar
to those underlying the present action, (See Pl.’s Draft Amended
Compl. 9 82-83.), and that the Philadelphia Court of Common Pleas
has not ruled on preliminary objections filed against ADR Options
and Rutter for seven months, (See id. {1 '72-77.); asserts that ADR
Options and Rutter, in response to a request for telephone call
logs, time sheets and other records from 2003, responded tha
the records had been destroyed because it had been more that
six years, (See id. 1 85-&86.); and that the court has scheduled
trial without ruling on the preliminary objections or resolvir
utstanding discovery issues. (See zd. 7 80.)
Appendix (
Plaintiff’s argument that the Court improperly
applied a heightened pleading standard is also misplaced.
As the Court noted in its earlier Opinion, the Third Circuit
has made clear that to properly plead conspiracy, the
plaintiff must make more than conclusory allegations.
(See Opinion at 9-10.) Plaintiff quotes the Third Circuit
in Rose v. Bartle for the proposition that allegations of
conspiracy are judged under a liberal pleading standard.
(See Pl.’s Supp. 3 (quoting Rose v. Bartle, 871 F.2d 331,
366 (8d Cir. 1989).) Contrary to plaintiff's suggestion, this
language did not reject the standard this Court applied
in dismissing plaintiff's complaint. Rather, this language
contrasted the pleading requirements for conspiracy
allegations with those for fraud.
Pleadings of fraud are subject to a heightened pleading
standard under Rule 9(b) but allegations of conspiracy are
not. See Rose v. Bartle, 871 F.2d at 366. But this is not to
say that allegations of conspiracy can rest on generalized
and conclusory allegations. The sentence immediately
following the quotation that plaintiff assiduously selected
makes clear that “a conspiracy must contain supportive
factual allegations.” /d. The Court, applying this standard,
concluded that plaintiff's complaint did not contain
sufficient supportive factual allegations. Applying the
same standard and making even the most generous
inferences, plaintiff’s draft amended complaint contains
similarly insufficient allegations. Granting leave to amend
would be futile. Plaintiffs motion for reconsideration i:
denied.
ORDERED that plant
JENIED; it is furthe
ORDERED
tT} e ore I)
0d
4 PPENDIX D — OPINION OF THE UNITE!
STATES DISTRICT COURT, DISTRICT OF
NEW JERSEY, FILED MARCH 16, 2009
OT FOR PUBLICATION
NITED STATES DISTRICT COl
DISTRICT OF NEW JERSEY
7il Action No. 08-1093 (WHY
REAT WESTERN MININ'
MINERAL COMPANY
FOX ROTHSCHILD LLP, THOMAS |
ARADISE, ESQ., ROBERT S. TINTNE]
ESQ., ADR OPTIONS INC. and THOMA
B. RUTTER, ESQ
OPINIO
j P ae
nior Listrict Judae
}
Defendant moves pursuant to Rule
f’s complaint. Defendant’s t
CTS AND PROCEDURAL BACKGROUNI]
A Pennsylvania trial court was spot on when, at a mu
earlier stage of this protracted dispute, it observed that
“[t]his case has a somewhat tortured procedural history
Great Western Mining & Mineral Company v. Foa
Rothschild, LLP, 2006 Phila. Ct. Com. Pl. LEXIS 2255 Ny
(2006). The tale begins with a dispute involving a miniatur
golf course in the state of Pennsylvania. That dispute led
to litigation, to which the original assignor of plaintiff
Great Western’s interest, Active Entertainment, Inc. was
the losing party. Dissatisfied with the damages awarded
in this miniature golf litigation, Active Entertainment
brought a malpractice suit against its counsel, Brownsteir
& Vitale, P.C.. See zd. All parties to the malpractice action
agreed to binding arbitration before defendant Thomas J
Rutter and Mr. Rutter’s arbitration company, defendant
in this matter ADR Options, Inc.. See id. This arbitration
resulted in an award for Brownstein & Vitale. Plaintif!
Great Western, then assignee of HR.C/NJ Inc., an assigne:
of Active Entertainment, sought to vacate the arbitration
award on the basis that Brownstein & Vitale, defendant
Hox Rothschild LLP, Rutter and ADR Options had faile
to disclose a relationship among Fox Rothschild, Rutt
id ADR Options, Inc.. (Compl. 9 17- 1&
ennsylvania trial court denied Great We
tion to vacate the arbitration award. The Super!
Court of Pennsylvania affirmed and later denied a moti
or rehearing. The Supreme Court of Pennsylvania tl
lenied Great Western’s petition for allowance of appe
nn 7 YL f + } ]
lefeats, Great Western filed a complaint in the Court o
Common Pleas, Philadelphia against Rutter and ADR
Options as well as defendant Thomas D. Paradise, a
partner at I’ox Rothschild, alleging anew a failure to
disclose the purportedly improper relationship among
Rutter, ADR Options and Fox Rothschild, (Compl. {1 23.),
and grounding its claims on, znter alia, breach of contract,
fraud and misrepresentation. See Great Western Mining
& Mineral Co. v. Fox Rothschild, LLP, No. 536 EDA 2006
No. 619 EDA 2006 at 7 n.1 (Sup. Ct. of Pa. 2007)
After allowing two amendments to Great Wester}
ymplaint, the Court of Common Pleas dismissed thi
‘omplaint with prejudice on collateral estoppel grounds
(Compl. {1 32.) On February 28, 2006, Great Western’
‘counsel, James F. Wiley, Esq., filed an appeal in the
Superior Court on behalf of Great Western. Shortly
thereafter, and this is the crux of plaintiff’s present
persistence, Mr. Paradise’s partner at Fox Rothschild
Robert S. Tinter, called Mr. Wiley and informed him that
‘there [was] no way that a Philadelphia court [was] ever
roing to find against Thomas Rutter given his relationship
vith the Philadelphia court system.” (Affidavit of Jame
KH’. Wiley, E'sq., dated Feb. 26, 2008.) The Superior Court
ater affirmed the Court of Common Pleas decision tha
‘reat Western was estopped from pursuing its second
ult, See Great Western Mining & Mineral Co. v. Fo:
Rothschild LLP, No. 5386 EDA 2006, No. 619 EDA 200
Non-Precedential Decision) at 12-13 (Sup. Ct. of Pa. 2007)
ind the Supreme Court of Pennsylvania again deniet
‘reat Western’s petition for allowance of appeal. See Gr
Vestern Mining & Mineral Co Rot!
’ | »¢ T< ’ 7 ¥
nowing remarkable pluck, on February , 20
“reat Western filed the present complaint in the federal
court against ADR Options, Rutter, Fox Rothschild
as well as Tinter and Paradise individually, claiming
deprivations of procedural and substantive due proces
(See Compl. 19 41-49.) Specifically, Great Western allege
the Pennsylvania court decisions were corrupted by the
improper influence of defendants, arising from bot!
the Philadelphia court’s dependence on Mr. Rutter’
services as well as the enticement to Philadelphia judge
of prospects for future employment in Mr. Rutter’s firt
See Compl. 11 43-36.)
Defendants now move pursuant to Rule 12(b)(
lismiss plaintiffs complaints for failure to state a cla
ra ed RR Cv. Proce 1?(b)(6) The mot rl
KGAL STANDAR!
Un a motion to dismiss pursuant to hule L2(b)(¢
ourt is required to accept as true all allegations in th
complaint and draw all reasonable inferences in the light
most favorable to the non-moving party. See (/mland
Planco Fin. Servs AZ 8d 59. 64 (8d Cir 2008): Phallra
yurnty Of Alli gheny 515 BF &d 294. 288 (3d Cir. 200k
complaint will survive a motion under Rule 12
if it states plausible grounds for plaintiff's entitlement
» the relief sought. See Bell Atl. Corp. v. Twombly, 550
§. 044, 1275. Ct. 1955, 1965, 1968-69 (2007) (abrogatins
mnLeY Vv (20: on, 3D5 | + Hl, Ay 16, KS. Ct. 99 (195%
; |
—s nC} road ’
TT) msiaered W1
notion [to dismiss] into one for summary jud igment.”
Federal Reserve Bank of N.Y., 359 F.3d 251, 255
3d Cir. 2004) (quoting Shaw v. Digital Equip. Corp
F.3d 1194, 1220 (1st Cir. 1996)). “Plaintiffs cannot prever
a court from looking at the texts of the documents «
vhich its claim is based by failing to attach or explicit
cite them.” Jn re Burlington Coat Fact 7
3d 1410, 1426 (8d Cir. 1997
DISCUSSIOD
Vilcat
ye dis aon maa plaintiffs have failed to allege tha
al
defendants acted under color of state law. (Def.’s Supt
4-9.) Plaintiffs respond that because defendants we!
villful participants in joint action with the State the
acted under color of law for purposes of § 1983. (Pl.’s O
8.) Defendants labor to fortify their position by asse1
hat Great Western’s claim _ be dismissed as
ollateral attack, (Def.’s Supp. 9-10.), but the pie nee
ot consider this argument cae the Court conclud
that plaintiff has not sufficiently alleged that def
ed under color of state |
laim under § 1% intiif (1) must alles
violation ofa right ecured say the Constitution ar
iws of the United States; and (2) must show that
alleged deprivation was committed by a person actin
inder color of state law.” Barna v. City of Perth Amb
12 F.3d 809, 815 (3d Cir 1994) (quoting We st v. Athi
4
{
LL) wt YS
+ }
!
R7 TTC 49 42 10)
2
‘|Clonstitutional sta!
be said that the State is responsible fe
duct of which the plaintiff complains
4
2777 (198
5 PY
cAii
fii
Yaretsky, 457 U.S. 991, 1004, 102 S.Ct. 2777
_—_ ] : J } i : >
mphasis added): see also Brown
90 F.3d 789 (8d Cir
“11¥P)¢
stem. In analysis, this corrupt
iladelphia court sy:
the extent that defendants conspired w
o ensure the outcome of the underiying Casi
ey laxr. wit ] ; sro + v6 . hat - 72 6 @ T}}
rrelevant to the present case that Rutter and/or AD
tions may operate an arbitration business that exists
ymbiotic relationship with the state, receives significa
t or operates in an area that is
‘ouragement a
ve prerogative because plaintiffs
oF
they claim that improper influence wielded by defendant
in their underlying litigation caused the deprivation. This
improper influence only exists to the extent there was :
conspiracy. But “merely resorting to the courts and being
on the winning side of a lawsuit does not make a party :
co-conspirator or a joint actor with the judge.” Den?
Sparks, 449 U.S. 24, 28, 101 S.Ct. 183 (1980)
The Third Circuit applied Lugar in a matter wit!
particular relevance here, Jordan v. Fox, Rothschild,
O’Brien and Frankel, 20 F.3d 1250 (1994). The Jorda?
plaintiff, Jordan Mitchell, had entered into a lease with
his landlord, defendant Berman. See Jordan at 1253. After
a payment dispute, Berman exercised a confession of
judgment clause in the lease and, with the aid of the Sherif
of Philadelphia, garnished Jordan’s bank account pursuant
to a Pennsylvania law allowing execution on judgments by
confession without prior notice or hearing. See Jordan at
1253-54. Jordan brought suit against Berman’s attorneys
among others, alleging a deprivation of due process. The
district court dismissed the suit against the attorneys
on qualified immunity grounds. See Jordan at 1254. The
Third Circuit disagreed with the district court as t
qualified immunity but, applying Lugarv, drew a distinction
based on the extent of the cooperation between State and
private actor. According to the Jordan court, Mitchell's
attorneys had not acted under color of law simply b:
entering the confession of judgment. At the point of entry)
they did not “officially invoke the force of law to collect or
secure” the disputed funds. Jordan at 1266. On its own, the
confession of judgment itself was not unconstitutional. Se:
1d. However, once Jordan’s lawyers directly requested tha
; , { ~~
—e i Ait «! . PLUil ~~,
and the att
f law for purposes of $1983
basis that the Jordan cou
under color of law where the indiv vid
icts toge ther \ with or has obtained si ignifi ant
+
anmianre r+) 1? } ;
ICT LIIalith graw Lilt -K-
ike Jordan's defendants, they
attachment on plaintiffs. Jorda | ly
the attachment context. But, even if it did, plail
ays more, suggesting that defendants conspired with
iiladelphia court s nie em to deprive them of due procs
conspiracy of this sort would be akin to the writ
Lv LLIC Rit
ittachment in the Jordan case because it would not on
nstitute a violation of plaintiff's constitutional rights
lso necessarily involve t!
State and private actor:
983 liabilit
_ LaAwixr all ro : rr < . .
roperiy alieve CONSDITat y | Lic
nstitutional conspiracy
» agen
} mrittT miyer cnn
Dlalntlit Must sn
a |
“more cc nspirat ors reached an agreement LO dep! *]
f of a const it ution al r}
oe See Parkz 3
tf
1685, 700 ¢ dC
a ~
tain support!
? ; 2 Hy » \<
LPPENAw L/
supporting the conspiracy claim may not be generalized
conclusory. See 7d.; D.R. v. Middle Bucks Area Vocational!
Technical Sch., 972 F.2d 1364, 1377 (8d Cir. 1992), cert
denied, 506 U.S. 1079, 113 S. Ct. 1045 (1993); Durre v
Dempsey, 869 F.2d 5438, 545 (10th Cir. 1989). The Third
Circuit has provided further guidance in the RICO
context by noting that “[t]o plead conspiracy adequately
a plaintiff must set forth allegations that address the
period of the conspiracy, the object of the conspiracy,
and the certain actions of the alleged conspirators taken
to achieve that purpose.” Shearin v. E.F. Hutton Group,
Ine., 885 F.2d 1162, 1166 (d Cir. 1989) abrogated on other
grounds by Beck v. Prupis, 529 U.S. 494, 505-06, 1205
Ct. 1608 (2000); see also Smith v. Bacon, 699 F.2d 434.
436-37 (8th Cir. 1983) (plaintiff must allege facts showing
a “meeting of the minds”); Polur v. Raffe, 912 F.2d 5
56 (2d Cir. 1990) (“It is incumbent on a plaintiff to stake
more than conclusory allegations to avoid dismissal of
claim predicated on a conspiracy to deprive him of his
constitutional rights”); Snell v. Tunnell, 920 F.2d 673, 702
(10th Cir. 1990) cert. denzed, 499 U 5. 976, 1118. Ct. 1622
(1991) (“The participants in the conspiracy must share the
general conspiratorial objective.... To demonstrate the
existence of a conspiratorial agreement it simply must b«
shown that there was ‘a single plan, the essential natur:
and general scope of which [was] know[n] to each person
who is to be held responsible for its consequences.”
(quoting Hoffman- La Roche, Inc. v. Greenberg, 447
F.2d 872, 875 (7th Cir. 1971)). The Third Circuit has
clearly stated that this pane piggeste pleading requirement
applies to both § 1983 and § 1985(8) conspiracy claims
See Startzell v. City of Philadelphia , 5383 F.3d 183, 20
iPDENRALL I
4 |
(8d Cir. 2008) (stating that in order to support a § 1983
or a § 1985(8) claim plaintiff must show a “meeting of the
144, 158, 90S. Ct. 1598 (1970)).
Plaintiff points to five paragraphs of its complaint in
support of the conspiracy. Read together, these paragraphs
identify three allegations: first, that the “[jJudiciary was
beholden to the authority and influence of certain [d]
efendants,” (Compl. 11 5; 43.); second, that, presumably
as a result of this devotion, “preliminary objections were
sustained in the Court of Common Pleas, Philadelphia”
dismissing the complaint, (Compl. 11 32.); and third, that
Great Western was informed by Mr. Tinter “that it was
not possible for it to receive a fair hearing in Pennsylvania
against ADR Options and Rutter, and that Great Western
could never prevail.” (Compl. 1 34.)
Allegations of conspiracy must be particularized
and plaintiff’s allegations are anything but. If defendant
hangs its conspiracy hat on any hook it is only Tinter’s
comment that defendant could not hope to get a fair trial.
Tinter’s comment does not provide factual! support for the
conspiracy alleged. Even if, as plaintiff suggests in its
brief although not in its complaint, there is a conspiracy
between Rutter and ADR Options on the one hand and the
Philadelphia court system on the other, Tinter’s comment
does nothing to support such conspiracy because it does
not establish a necessary element of a civil conspiracy
n agreement between defendants and the court system
Appendix D
Although the Court is cognizant that it must drav
all reasonable inferences in plaintiff's favor, see Umland,
542 F.3d at 64, it is not reasonable to infer, solely on the
basis of Tinter’s comment, that there exists a conspiracy
between defendants and the Philadelphia court system.
Factual allegations supporting the conspiracy claim may
not be generalized or conclusory. See Rose v. Bartle,
supra, at 366.
In any event, even if ADR Options were demonstrated
to have a symbiotic relationship with the court system
via the size of its arbitration practice and even if the
Philadelphia courts depend on that service to limit an
overwhelming docket, it is not Rutter’s or ADR Options’s
arbitration activities that are the source of plaintiff’s
alleged constitutional deprivation. It is the decisions of
the state courts. While the alleged interdependence of
ADR and the courts might tempt a losing party to imagine
that an improper relationship exists, plaintiffs must have
more than an active imagination to meet the heightened
pleading standard for conspiracy. The Court expects that
a plaintiff would have a solid factual basis before asserting
such significant allegations. By presenting a pleading to
the Court, counsel certifies that its factual contentions
have evidentiary support. See Fed. R. Civ. Proce. 11(b).
Violation of this rule is grounds for sanctions. See Fed.
R. Civ. Proc. 11(ce). Counsel is reminded that serious
allegations should have correspondingly significant factua
support before they are asserted in court filings
| il reasons Stated ano
miss 1s granted and plaintiff
iudic
nre
/William H,. Wall
ited States Seni
\ppearance
enjamin C. Weine!
9 Countryside Driv
ingston, NJ 07039
A +4 rnev T( ?
iS A. UCunnll
ox Rothschild LL
rinceton Pike Cor
97 Lenox Driv
suilding 3
encevli 86
\PPENDIX E ORDER OF THE UNITE
ATES DISTRICT COURT DISTRICT OF N
JERSEY, FILED MARCH 16, 2009
ITED STATES DISTRICT Ct
DISTRICT ()I " I 7,8 1} 8,
PT.’ 7 wae. aS 2. ‘.
ROKBKR - i Vi NI aX rele,
endants motiont ismi rnRAN LICD: it
\PPENDIX I ORDER OF THE UNITED
STATES COURT OF APPEALS FOR THE
THIRD CIRCUIT DENYING PETITION FOR
REHEARING, FILED OCTOBER 15, 2010
[TED STATES COURT OF APP!
R THE THIRD CIRCI
rE Whe d KRN [VEL IN
MINBKRAL COMPAN )
HRC/NJ, Ine.. A
IOMAS D. PARADISE, | i]
ithschild LLP; ROBERT 8S. TINTNER,
tner, Fox Rothschild LLP; ADR OPTIONS
AA A
K |
L\RRY,. AMBRO, FUENTES, SMITH, FISH]
1 Af
TAKE 5 JORDAN HARDIM ‘
ne Petition for Rehearing filed by the Appellant
ie above-entitled matter, having been submitted to the
judges who participated in the decision of this court and
to all the other available circuit judges of the circuit in
regular active service, and no judge who coneurred ii
the decision having asked for rehearing, and a majorit
f the circuit judges of the circuit in regular service no
laving voted for rehearing, the Petition for Rehearin
they neland ti} (Court nnoane 1 herehy\ DENT
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.