Appendix — Grigsby v. Miami-Dade County

rame Court, U.S.

vied FILED

No. —O& 134d 26 2004

OPPICE OF THE CLERK

IN THE

SUPREME COURT OF THE UNITED STATES

CALVIN GRIGSBY,

Petitioner,

v.

MIAMI-DADE COUNTY, FLORIDA, et al.,

Respondents.

Petition for Writ of Certiorari to the

United States Court of Appeals

for the Eleventh Circuit

SEPARATE APPENDIX TO

PETITION FOR WRIT OF CERTIORARI

WILLIAM P. TEDARDS, JR. LARRY A. STUMPF

1101 30 Street, N.W., Counsel of Record

Suite 500 Black, Srebnick, Kornspan

Washington, D.C. 20007 & Stumpf, P.A.

TEL: (202) 797-9135 201 South Biscayne Blvd.,

Suite 1300

Miami, FL 33131

TEL: (305) 371-6421

July 26, 2004 Counsel for Petitioner

;

j

TABLE OF CONTENTS

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APPENDIX A

United States Court of Appeals

FOR THE ELEVENTH CIRCUIT

Fiscal Operations, Inc., d )

Calvin Grigsby, )

)

Plaintiffs-Appellants, )

)

V. ) No. 03-12576

i )

Miami-Dade County, Florida, et ) D.C. No. 01-04798-

a. ) CV-DLG

)

Defendant, )

)

Alex Penelas,; Steven B. Bass; )

Kathy Jackson, Miriam Alonso, )

and Rachel Baum. )

)

Defendants-Appellees. )

a ne

Fiscal Operations, Inc., and )

Calvin Grigsby, )

)

Plaintiffs-Appellants, )

7, No. 03-12577

D.C. No. 01-04798-

CV-DLG

)

)

ate

Miami-Dade County, Florida, )

)

)

Defendant-Appellee,

$i SOE iit East AAPA AAO AE

+ Wt htt head! Ate

2a

Alex Penelas, et al., )

Defendants. )

Fiscal Operations, Inc., and )

Calvin Grigsby, )

Plaintiffs-Appellants,

V. No. 03-12578

Miami-Dade County, Florida, et : D.C. No. 01-04798-

al.; ) CV-DLG ;

Defendants, ‘

Deloitte & Touche, L.L.P.,

Defendant-Appellee.

Appeals from the United States District Court

for the Southern District of Florida

(March 2, 2004)

Before: TJIOFLAT, BARKETT and SILER*, Circuit Judges.

PER CURIAM:

3a

AFFIRMED. See 11" Cir. Rule 36-1 ‘y

*Honorable Eugene E. Siler, Jr., United States Judge for the

Sixth Circuit, sitting by designation.

1

11" Cir. R. 36-1 provides:

When the court determines that any of the following

circumstances exist:

(a)

(b)

(c)

(d)

(e)

judgment of the district court is based on

findings of fact that are not clearly erroneous,

the evidence in support of a jury verdict is

sufficient;

the order of an administrative agency is

supported by substantial evidence on the

record as a whole;

summary judgment, directed verdict, or

judgment on the pleadings is supported by the

record;

judgment has been entered without a

reversible error of law; and an opinion would

have no precedential value, the judgment or

order may be affirmed or enforced without

opinion.

4a

APPENDIX B

United States District Court

Southern District of Florida

Miami Division

Fiscal Operations, Inc.,

Calvin Grigsby,

d )

)

)

Plaintiffs-Appellants, )

)

V. ) Case No. 01-04798-

) | CIV-Graham/Garber

Miami-Dade County, Florida; )

Alex Penelas; Steven B. Bass; )

Kathy Jackson; Miriam Alonso; )

)

)

)

)

Rachel Baum; and Deloitte and

Touche, L.L.P.

Defendants-Appellees.

ORDER

THIS CAUSE came before the Court upon Defendants

Alex Penelas, Steven B. Bass, Kathy Jackson, Miriam Alonso,

and Rachel Baum’s Motions to Dismiss First Amended

Complaint, [D.E. 41 and D.E. 118].

THE COURT has reviewed the Motions, the pertinent

portions of the record, and is otherwise fully advised in the

premises.

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INTRODUCTION

Fiscal Operations, Inc., (“Fiscal”) and its President and

Chief Executive Officer, Calvin Grigsby (“Grigsby”) filed this

action against Defendants Miami-Dade County (the “County”,

Mayor Alex Penelas (“Penelas”), Assistant County Attorney

Steven B. Bass (“Bass”), County Auditor Kathy Jackson

(“Jackson”), Commissioner Miriam Alonso (“Alonso”),

Finance Department Director Rachel Baum (“Baum”), and

Deloitte & Touche (“Deloitte”) based upon Defendants’ alleged

participation in the wrongful termination of a franchise

agreement between the County and Fiscal (the “franchise

agreement”). The Complaint also alleges the wrongful taking

of property in the form of Plaintiffs’ contractual rights, the

wrongful seizure of Plaintiffs’ business assets and the

procurement of false information to federal authorities,

resulting in Plaintiff Grigsby’s arrest and prosecution for the

theft of public funds.

PROCEDURAL BACKGROUND

Plaintiffs filed their Original Complaint on November

26, 2001, and alleged Denial of Due Process (Count 1), Taking

Without Just Compensation (Count II), Denial of Due Process

(Count III), Unreasonable Seizure and Restraint (Count IV), and

Conspiracy (Count V). On February 20, 2002, Plaintiffs filed

their Amended Complaint and alleged two additional causes of

action: Accountants’ Fraud (Count VI) and Malicious

Prosecution (Count VII).

On December 17, 2001, Defendants Penelas, Bass and

Jackson filed a motion to dismiss the Original Complaint. On

March 4, 2002, Defendants Penelas, Bass and Jacksin, along

with Defendants Alonso and Baum, filed a motion to dismiss

the Amended Complaint. The motion to dismiss asserts that 1)

Defendants are entitled to absolute immunity from the claims

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alleged; 2) they are entitled to qualified immunity; 3) this action

is barred by Rooker-Feldman doctrine because the same claims

were raised or could have been raised in a related state

proceeding; 4) the Court should dismiss the action pursuant to

the Colorado River doctrine because the same issues are already

being considered in a state claim that has been pending for more

than four years; 5) the Complaint fails to state a claim for

unlawful taking because the deprivation of contractual rights

does not constitute a taking of property; and 6) the Complaint

fails a claim for a conspiracy because it fails to state a claim for

any underlying constitutional violation.

FACTUAL BACKGROUND

According to the Complaint, in 1982, Plaintiff Fiscal

entered into a franchise agreement with the County to manage

and operate gantry cranes at the Port of Miami (the Port”).

Pursuant to the agreement, Fiscal maintained and operated the

cranes, renting the cranes on an hourly fee basis to the

stevedoring companies that loaded and unloaded cargo ships

that docked at the Port. Fiscal sent bills to the stevedoring

companies for the hourly crane rental fees (“crane user fees”).

The Complaint alleges that until the events giving rise to the

lawsuit, the stevedores paid the crane user fees directly to

Fiscal. Also, it is alleged that the County, Deloitte, the Port,

Fiscal, the Internal Revenue Service and all others involved

threatened the crane users fees as the property of Fiscal, rather

than the County’s.

According to the Complaint, however, between 1996

and 1998, the County, Penelas, Bass, Jackson, Alonso, Baum,

Deloitte, and others orchestrated a course of action that was

specifically designed and intended to, and did: a) create and

utilize a fabricated pretext to unlawfully terminate the franchise

agreement; b) seize, by physical force and with no judicial or

other lawful process, all of the personal property of Fiscal used

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by Fiscal in the operation of its business; and c) create and

utilize fabricated evidence to instigate a capricious prosecution

of, and the attendant seizure of, Grigsby. Plaintiffs allege that

Penelas directed Bass and Jackson to fabricate evidence that

could be used to argue that Fiscal was a department or agent of

the County and that the gantry crane user fees that Fiscal

collected were County funds. Plaintiffs also allege that the

Defendants caused Defendant Deloitte to retroactively alter

some of its audit reports of the Port to make them consistent

with this false recharacterization of the County and Fiscal’s

longstanding relationship and treatment of the crane user fees,

with no accounting justification for the material change.

Plaintiffs claim that this conduct by the individual Defendants

constitutes executive, not legislative functions.

Countv and Deloitte Audits

According to the Complaint, on November 18, 1996,

Defendant Penelas directed the County Manager to obtain a

special audit of Fiscal’s business. The responsibility for the

audit was passed to Jackson, then acting Director of the

County’s Audit and Management Services Department. In

furtherance of obtaining the audit and acting on Penelas’ order,

Jackson, with the assistance of Bass, Baum, Deloitte and others,

began in December 1996 to demand every accounting and

financial document that Fiscal had ever generated.

Additionally, the County filed in February 1997, a Public

Records Act action (Metropolitan Dade County v. Fiscal, 11"

Judicial Circuit, Dade County, Case No. 97-04449 CA 32)

against Fiscal, seeking to have Fiscal declared to be “‘a public

agency.” The County’s audit of Fiscal was completed in

January of 1998.

Additionally, the Complaint alleges that at the direction

of Penelas, Bass and Jackson encouraged Deloitte to revisit its

interpretation of the franchise agreement. On February 20,

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1998, Deloitte issued its audit report of the Port for fiscal year

1996 and restated the Port’s 1995 financial statements. The

restated audit report treated the crane user fees as “County

Money.” The audit report also changed, from $2,400 to in

excess of $6 million, the amount of federal funds received by

the Port in 1995. According to the Complaint, these same

altered accounting treatments were also applied to the 1996

financials of the Port.

The County Resolution and the Contract Termination

On April 21, 1998, the County Manager was given a

resolution to present to the Board, approving the termination of

the franchise agreement. According to the Complaint, the

resolution was prepared by Bass and Jackson and was

sponsored and placed on the Commission agenda by Alonso.

Additionally, Defendant Bass approved as to the form and legal

sufficiency of the resolution.

The resolution referred to Jackson’s January 16, 1998

audit report as having ‘found, among other things,

‘mismanagement of the County’s gantry crane operation,

wasteful and abusive spending practices, [and] undocumented

and unauthorized transactions....”” The resolution also stated

“it is believed that Fiscal is currently retaining hundreds of

thousands of collected user fees belonging to the County, in

violation of contract requirements.” Noting Jackson’s

recommendation that the County assume control of the crane

operation “as soon as practical,” the resolution directed the

County Manager to do so. To support the resolution, the

County Manager was also given a memorandum, prepared by

Bass and Jackson, recommending approval of the resolution to

terminate the franchise agreement. According to the

Complaint, that memorandum contained several material

misrepresentations, assertedly designed to support the

Defendants’ theft of “Public Funds” theory. The County

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Commissioners subsequently passed the resolution and in the

Spring of 1998, the County issued a notice of default and

terminated the franchise agreement.

On May 18, 1998, acting in accordance with Jackson’s

statement that “the County should take immediate control of the

operation,” the County physically seized Fiscal’s entire

business, including the personal property and other assets of

Fiscal, and began, according to the Complaint, to run the

business for its own benefit. Based upon the information

obtained from the audits and the Public Records Act action,

Jackson and Bass presented the Federal Bureau of Investigation

(the “FBI’”’) and representatives of the United States Attorney’s

Office with evidence that Grigsby had used “County Money”

and “Public Funds” to make unauthorized expenditures not

directly related to crane operations. Plaintiffs deny stealing

County funds and charge Defendants with fabricating the

evidence.

DISCUSSION

Standard of Review

A complaint should not be dismissed “‘for failure to state

a claim unless it appears beyond a reasonable doubt that the

plaintiff can prove no set of facts” that would entitle the

plaintiff to relief. Conley v. Gibson, 355 USS. 41, 45 (1957);

Bracewell v. Nicholson Air Services, Inc.., 680 F.2d 103, 104

(11™ Cir. 1982). In deciding a motion to dismiss, a court can

only examine the four corners of the complaint. See Crowell v.

Morgan Stanley Dean Witter Services, Co., Inc., 87 F.Supp. 2d

1287 (S.D. Fla. 2000). Additionally, a court must accept a

plaintiff's well pled facts as true and construe the complaint in

the light most favorable to plaintiff. Scheuer v. Rhodes, 416

US. 232 (1974). The threshold of sufficiency that a complaint

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must meet is exceedingly low. Ancata v. Prison Health Servs.

Inc., 769 F.2d 700, 703 (11 Cir. 1985); Geidel _v. City of

Bradenton Beach, 56 F.Supp.2d 1359, 1362 (M.D. Fla. 1999).

Absolute Immunity Defense

Legislators have absolute immunity under Section 1983

when they are “acting within their legislative roles,

‘performing’ legislative acts.” Brown v. Crawford County, 960

F.2d 1002, 1011 (11" Cir. 1992) (quoting Tower v. Glover, 467

U.S. 914, 920, 104 S.Ct. 2820, 2824, 81 L.Ed.2d 758 (1984)).

But, the immunity “extends only to actions taken within the

sphere of legitimate legislative activity.” Id. (quoting Finch v.

City of Vernon, 877 F.2d 1497, 1505 (1 1" Cir. 1989)). It is the

nature of the act, and not the position of the actor, which

determines when absolute legislative immunity will apply. See

Yeldell v. Cooper Green Hospital, Inc., 956 F.2d 1056, 1062

(11" Cir. 1992). Thus, whether the Defendants are entitled to

such immunity depends upon whether when making decisions

regarding Plaintiffs and their contract with the County they

were acting in their legislative capacity: was terminating the

franchise agreement a “legislative act’”?

Legislative immunity was established in the Speech and

Debate Clause of the United States Constitution. The clause

protects not only the speech and debate of legislators, but also

voting on legislative acts. See Kilbourn v. Thompson, 103 U.S.

168, 204, 26 L.Ed. 377 (1880). This absolute legislative

immunity has been extended by the Supreme Court, beyond

federal legislators, to state and regional legislators. See

Supreme Court of Virginia v. Consumers Union, 446 U.S. 719,

732 100 S.Ct. 1967, 1974, 64 L.Ed.2d 641 (1980); Hernandez

v. City of Lafayette, 643 F.2d 1188, 1193 (5" Cir. 1981). Thus,

county commissioners can be entitled to legislative immunity

when acting in their legislative capacities. Additionally, even

if the legislators act out of evil intent, the legislative nature of

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the act still controls. See Ellis v. Coffee County Bd. of

Registrars, 981 F.2d 1185, 1191 (11" Cir. 1993).

Defendants Alonso and Penelas

Defendants contend that sponsoring and voting for the

resolution was, in form, quintessentially legislative and

therefore protected by absolute immunity. See e.g. Bogan v.

Scott-Harris, 523 U.S. 44, 49 (1998); Fry v. Board of County

Com’re of County Baca, State of Colo., 7 F.3d 936, 942 (10"

Cir. 1990). Defendants, are however, incorrect in their

contention. An act is deemed legislative, rather than

administrative or managerial, when it is policymaking and of

general application. See Brown, 960 F.2d at 1011. “Only those

acts which are ‘necessary to preserve the integrity of the

legislative process’ are protected.” Yeldell, 956 F.2d at 1062

(quoting United States v. Brewster, 408 U.S. 501, 517, 92 S.Ct.

2531, 2539, 33 L.Ed.2d 507 (1972)). Courts have held that

“voting, debate and reacting to public opinion are manifestly in

furtherance of legislative duties.” DeSisto College, Inc. v. Line,

888 F.2d 755, 765 (11 Cir. 1989).

In Crymes v. DeKalb County, 923 F.2d 1482 (11" Cir.

1991), however, the Eleventh Circuit expressly rejected the

argument that the act of voting, in itself, constitutes legislative

action giving rise to immunity. It has been held that

“Ta]lthough a local legislator may vote on an issue, that alone

does not necessarily determine that he or she was acting in a

legislative capacity.” Cinevision Corp. v. City of Burbank, 745

F.2d 560, 580 (9" Cir. 1984), cert. denied, 471 U.S. 1054, 105

S.Ct. 2115, 85 L.Ed.2d 480 (1985). A legislative act involves

policymaking rather than mere administrative application of

existing policies. Minton v. St. Berard Parrish School Bd.,

803 F.2d 429, 135 (5" Cir. 1986) (citing Hornsby v. Allen, 326

F.2d 605, 608-09 (5" Cir. 1964)). Ifthe facts utilized in making

a decision are specific, rather than general, in nature, then the

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decision is more likely administrative. Moreover, if the

decision impacts specific individuals, rather than the general

population, it is more apt to be administrative in nature. See

Cutting v. Muzzey, 724 F.2d 259, 261 (1* Cir. 1984).

The vote on the resolution to terminate Fiscal’s

franchise agreement was specific, and not general. Moreover,

the termination of the agreement specifically impacted Fiscal

and Grigsby. Accordingly, the court is unable to grant absolute

immunity to the Defendant Alonso in relation to the drafting

and voting of the resolution. Additionally, the Court is unable

to grant absolute immunity to Defendant Penelas in relation to

enforcing and upholding the resolution. Defendants’ motion to

dismiss based upon absolute immunity must therefore be denied

as it relates to Defendants Alonso and Penelas.

Defendant Bass

Courts have consistently granted civil government

attorneys the same absolute immunity provided to criminal

prosecutors. See Butz v. Economou, 438 U.S. 478, 512, 98

S.Ct. 2894, 2914, 57 L.Ed.2d 895 (1978). In Mitchell v.

Forsyth, 472 U.S. 511, 520-524, 105 S.Ct. 2806, 86 L.Ed.2d

411 (1985), the Supreme Court discussed three factors that

courts should evaluate when determining whether to give a

government official absolute immunity for a particular function.

The court should ask (1) whether a historical or common law

basis exists for immunity from suit arising out of performance

of the function; (2) whether performance of the function poses

obvious risks of harassing or vexatious litigation against the

official; and (3) whether alternatives to bringing a damage suit

against the official could redress the wrongful conduct.

Executive officials and agency attorneys who initiate

administrative proceedings on behalf of the government meet

this test. See Butz at 512-17, 98 S.Ct. 2894. In granting

absolute immunity to these officials, the Supreme Court

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reasoned that attorneys who initiate criminal prosecutions and

agency proceedings are entitled to absolute immunity because

otherwise they “might hesitate to bring forward some witnesses

or documents” for fear of personal liability. Id. at 517, 98 S.Ct.

2894. Additionally, a prosecutor is absolutely immune from

suit for malicious prosecution. Mallery v. Briggs, 475 U.S.

342-43, 106 S.Ct. 1092, 89 L.Ed.2d 271 (1986). Prosecutors

~ also enjoy absolute immunity from allegations stemming from

the prosecutor’s function as advocate. Buckley v. Fitzsimmons,

509 U.S. 273, 113 S.Ct. 2606, 125 L.Ed.2d 209 (1993). Such

absolute immunity extends to a prosecutor’s “acts undertaken

... in preparing for the initiation of judicial proceedings or for

trial, and which occur in the course of his role as an advocate

for the State.” Buckley, 509 U.S. at 273, 113 S.Ct. 2606;

Mastroianni v. Bowers, 173 F.3d 1363 (11" Cir. 1999).

According to the Complaint, in preparation for initiation

of the judicial proceedings against Fiscal, Assistant County

Attorney Bass, on the direction of Penelas, demanded every

accounting and financial document generated by Fiscal.

Plaintiffs allege that Bass also prepared and approved as to

form and legal sufficiency the resolution approving the

termination of the Fiscal contract. Finally, Plaintiffs allege that

Bass presented the Federal Bureau of Investigation and

representatives of the U.S. Attorney’s Office with evidence that

Grigsby used County money and public funds to make

unauthorized expenditures not directly related to crane

operations. Plaintiffs have failed to demonstrate that Bass was

not performing functions that were not associated with his role

as an advocate of the County. Accordingly, Plaintiffs’

Complaint as it pertains to County Attorney Bass, must be

dismissed.

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Defendants Baum and Jackson

The Complaint alleges that Finance Department

Director Baum encouraged the County’s auditor, Deloitte, to

revisit its interpretation of the Fiscal contract. Additionally, the

Plaintiffs accuse County Auditor Jackson of auditing Fiscal’s

contract with the County, publishing the results and joining in

a recommendation to pursue litigation. As these actions are

clearly not legislative in nature, Defendants Baum and Jackson

are not entitled to absolute immunity.

Qualified Immunity Defense

The defense of qualified immunity completely protects

government officials performing discretionary functions from

suit in their individual capacities unless their conduct violates

“clearly established statutory or constitutional rights of which

a reasonable person would have known.” Hope v. Pelzer, 536

U.S. 730, 122 S.Ct. 2508, 2515, 153 L.Ed.2d 666 (2002)

(quoting Harlow v. Fitzgerald, 457 U.S. 800, 818, 102 S.Ct.

2727, 2738, 73 L.Ed.2d 396 (1982)). “The purpose of this

immunity is to allow government officials to carry out their

discretionary duties without the fear of personal liability or

harassing litigation, protecting from suit all but the plainly

incompetent or one who is knowingly violating the federal

law.” Lee v. Ferraro, 284 F.3d 1188, 1194 (11™ Cir. 2002)

(internal citation and quotation omitted). Because qualified

immunity is “an entitlement not to stand trial or face the other

burdens of litigation,” Mitchell v. Forsyth, 472 U.S. 510, 526,

105 S.Ct. at 2806, 2815, 86 L.Ed.2d 411 (1995), questions of

qualified immunity must be resolved “at the earliest possible

stage in litigation.” Hunter v. Bryant, 502 U.S. 224, 227, 112

S.Ct. 534, 536, 116 L.Ed.2d 589 (1991) (per curiam). It is

therefore appropriate for a district court to grant the defense of

qualified immunity at the motion to dismiss stage if the

complaint “fails to allege the violation of a clearly established

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constitutional right.” Chesser v. Sparks, 248 F.3d 1117, 1121

(11" Cir. 2001) (quoting Williams v. Ala. State Univ., 102 F.3d

1179, 1182 (11" Cir. 1997)).

In considering whether qualified immunity applies, the

defendants must first show that they were acting within the

scope of their discretionary authority when the wrongful

conduct occurred. Jackson v. Sauls, 206 F.3d 1156, 1164 (1 ~

Cir. 2000). Once a defendant demonsirates that he or she was

acting within his or her discretionary authority, the burden then

shifts to plaintiff to demonstrate that qualified immunity is not

appropriate. Vinyard v. Wilson, 311 F.3d 1340, 1346 (1 1" Cir.

2002).

In Saucier v. Katz, the Supreme Court set forth a two-

part test for evaluating a claim of qualified immunity. As a

“threshold question,” a court must ask, “[t]aken in the light

most favorable to the party asserting the injury, do the facts

alleged show the (defendant’s) conduct violated a constitutional

right?” Saucier v. Katz, 533 U.S. 194, 121 S.Ct. 2151, 2156,

150 L.Ed.2d 272 (2001). If a constitutional right would have

been violated under Plaintiffs version of the facts, the court

must then determine “whether the right was clearly

established.” Id. The burden is on the Plaintiff to demonstrate

that, based on the alleged facts, clearly established law has been

violated. Brown v. Cochran, 171 F.3d 1329, 1332 (11° Ciz.

1999). In this regard, the Supreme Court recently explained:

For a constitutional right to be clearly established, its contours

must be sufficiently clear that a reasonable official would

understand that what he is doing violates that right. This is not

to say that an official action is protected by qualified immunity

unless the very action in question has previously been held

unlawful but it is to say that in the light of pre-existing law, the

unlawfulness must be apparent. See Hope v. Pelzer, 122 S.Ct.

2508, 2515 (June 27, 2002) (citations omitted). Thus, the Court

explains that in order to overcome Defendants’ qualified

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immunity, it must be shown that existing law at the time of the

conduct in question provided Defendants with “fair warning”

that their conduct violated clearly established law. See Id., 122

S.Ct. at 2515-2516.

In examining the factual allegations in the complaint,

the court must keep in mind the heightened pleading

requirements for civil rights cases, especially those involving

the defense of qualified immunity. GJR Investments, Inc. v.

County of Escambia, 132 F.3d 1359, 1367 (11 Cir. 1998). The

complaint must allege the relevant facts “with some

specificity.” Id. More than mere conclusory notice pleading is

required. “[A] complaint will be dismissed as insufficient

where the allegations it contains are vague and conclusory.”

Fullman v. Graddick, 739 F.2d 553, 556-57 (11" Cir. 1984).

See also Veney v. Hogan, 70 F.3d 917, 922 (6" Cir. 1995)

(holding that complaint must “include the specific, non-

conclusory allegations of fact that will enable the district court

to determine that those facts, is proved, will overcome the

defense of qualified immunity”). Moreover, in reviewing a

motion to dismiss, the court need only accept “well-pleaded

facts” and “reasonable inference drawn from those facts.”

Oladeinde v. City of Birmingham, 963 F.2d 1481, 1485 (11"

Cir. 1992). “{U]nsupported conclusions of law or of mixed fact

and law have long been recognized not to prevent a Rule

12(b)(6) dismissal.” Marsh v. Butler County, 268 F.3d 1014,

1036 (11" Cir. 2001). The Court must also keep in mind the

fact that “[w]Je generally accord ... official conduct a

presumption of legitimacy.” United States Dep’t of State v.

Ray, 502 U.S. 164, 179, 112 S.Ct. 541, 550, 116 L.Ed.2d 526

(1991).

The Court now turns to the Complaint to determine

whether Plaintiffs have stated claims sufficient to establish §

1983 violations.

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Count I - Denial of Due Process

Count I of the Complaint, Plaintiffs contend that they

possessed a property right in the franchise agreement which was

“expropriated by arbitrary and capricious means.” Plaintiffs do

not contend that they possessed a liberty interest in their

contract with the county but rather, that the contract was

“property” within the meaning of the Fourteenth Amendment.

This assertion is incorrect as a matter of law. The Supreme

Court in Logan v. Zimmerman Brush, 455 U.S. 422, 102 S.Ct.

1148, 71 L.Ed.2d 265 (1982), provided useful guidance for

determining what interests constitute “property” as envisioned

by the Fourteenth Amendment. In that case the Court remarked

that “[t]he hallmark of property ... is an individual entitlement

grounded in state law, which cannot be removed except ‘for

cause’.” Id. at 430, 102 S.Ct. at 1155. See also, Board of

Regents v. Roth, 408 U.S. 564, 576-78, 92 S.Ct. 2701, 2708-10,

33 L.Ed.2d 548 (1972) (no property interest in having contract

renewed where previous contract did not require renewal absent

sufficient cause). Under this test Plaintiffs did not possess a

property interest in their contract with the County. Because

Plaintiffs have failed to demonstrate that Defendants’ conduct

violated a clearly established constitutional right, the

Defendants’ motion to dismiss Count I of the Complaint must

be granted.

Count II - Taking Without Compensation

Count II of the Complaint alleges that Fiscal’s personal

property was improperly seized without compensation.

Specifically, the Complaint alleges that “Defendants denied

Fiscal’s management access to Fiscal’s own secure, fenced

work area, using posted armed security guards to prevent

access. Defendants then took possession of Fiscal’s procedure

manuals, appropriated Fiscal’s business methods, and began

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using over $1,000,000 worth of Fiscal’s tools, spare parts and

equipment, without any compensation to F iscal.”

The Takings Clause of the Fifth Amendment of the U.S.

Constitution provides: “nor shall private property be taken for

public use, without just compensation.” Villas of Lake Jackson

v. Leon County, 121 F.3d 610, 614 (11" Cir. 1997); The

Reserve, Ltd. v. Town of Longboat Key, 17 F.3d 1374, 1379-80

(11 Cir. 1994); the only substantive due process claim is for

“arbitrary and capricious” taking of property. A substantive due

process analysis, within the deprivation of a property interest

context, involves two queries: “1) was the plaintiff deprived of

a constitutionally protectible property interest? and 2) assuming

a property interest, was the deprivation of that property interest

for an improper motive and be means that were pretextual,

arbitrary and capricious and without any rational basis?” The

Reserve, Ltd. at 1379 (11" Cir. 1994).

Plaintiffs claim that the Defendants deprived them of

access to their property, constituting a taking without due

process in violation of the Fifth Amendment. In Williamson

County Regional Planning Commission v. Hamilton Bank, 473

U.S. 172, 105 S.Ct. 3108, 87 L.Ed.2d 126 (1985), the Supreme

Court held that a property owner must exhaust state procedures

for obtaining just compensation, including resort to a state

inverse condemnation action, before bringing a “taking” claim

under 42 U.S.C. 1983. Id., 105 S.Ct. at 3121-22. The Court

reasoned that the Fifth Amendment does not prohibit takings,

only uncompensated takings. “[B]ecause the Constitution does

not require pretaking compensation, and is instead satisfied by

a reasonable and adequate provision for obtaining

compensation after the taking, the State’s action here is not

‘complete’ until the State fails to provide adequate

compensation for the taking.” Id. at 3121. Thus, “if a State

provides an adequate remedy for seeking just compensation, the

property owner cannot claim a violation of the Just

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Compensation Clause until it has used the procedure and been

denied just compensation.” Id. at 3121. Florida law provides

compensation for deprivation or impairment of the right of

access, Anhoco Corp. v. Dade County, 144 So.2d 793 (Fla.

1962), which may be enforced in an action for inverse

condemnation. See, e.g., Pinellas County v. Austin, 323 So.2d

6 (Fla. Dist. Ct. App. 1975). As Plaintiffs have not shown that

the Florida procedures were unavailable or inadequate; until

they have utilized those procedures, their takings claim is

premature. Plaintiffs have failed to sufficiently allege any

argument in support of their claim for denial of due process and

accordingly, Defendants’ motion to dismiss as it related to

Count II of the Complaint must be granted.

Counts II and IV - Denial of Due Process and

Unreasonable Seizure

Count III alleges that “Defendants, with the assistance

of Deloitte and others, fabricated evidence to the effect that

Grigsby had stolen ‘Public Funds’ and used that fabricated

evidence to deceive federal prosecutors into initiating a grand

jury proceeding (where the jurors were similarly deceived) and

a subsequent prosecution.” Count IV alleges that “using

deliberately fabricated evidence, Defendants deceived the

prosecutor into believing that probable cause existed and

proximately caused the deception of the grand jury, the

initiation of a prosecution that was not backed by probable

cause, and an unlawful seizure and restraint of Grigsby.”

Plaintiffs argue that § 1983 provides a remedy against a public

official’s use of “false evidence” to support a criminal

prosecution.

Undertaking the first step of the two-step qualified

immunity inquiry, the Court is persuaded that there is a clearly

established constitutional due process right not to be subjected

to criminal charges on the basis of false evidence that was

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deliberately fabricated by the government. Perhaps because the

proposition is virtually self-evident, the Court is not aware of

any prior cases that have expressly recognized this specific

right, but that does not mean that there is no such right. Rather,

what is required is that government officials have “fair and

clear warning” that their conduct is unlawful. See United States

v. Lanier, 520 U.S. 259, 271, 117 S.Ct. 1219, 137 L.Ed.2d 432

(1997) (quoting Anderson v. Creighton, 483 U.S. 635, 640, 107

S.Ct. 3034, 97 L.Ed.2d 523 (1987).

The second step of the qualified immunity analysis

requires a determination of whether the Defendants’ conduct

violated a constitutional right. Plaintiffs point to cases that

stand for the general propositions of law that it is unlawful to

_ pursue a criminal conviction on the basis of “false evidence.”

The relevant question in this case is, however, not whether it is

unlawful to use false evidence, but whether it was clearly

established that an erroneous interpretation of a contract like

that alleged here constitutes “false evidence.” The Plaintiffs’

vague and conclusory allegations of fabricated evidence do not

establish § 1983 liability. Plaintiffs make bold statements and

legal conclusions without alleging any specific facts to support

them. Plaintiffs do not sufficiently allege any

misrepresentations made by Defendants, but merely label the

Defendants’ interpretation of the franchise agreement as it

relates to the determination of the crane user fees as county

funds and Fiscal as a county agency as “false evidence.”

Plaintiffs claim that there is a casual connection between

the Defendants’ interpretation of the contract and subsequent

submission of evidence to prosecutorial authorities and

Grigsby’s subsequent prosecution, but they do not allege any

facts to support this connection. Specifically, Plaintiffs do not

allege that the Defendants directed the FBI or the U.S.

Attorneys’ Office to conduct the investigation or to pursue the

subsequent prosecution of Grigsby. Moreover, Plaintiffs have

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failed to demonstrate that it was the Defendants’ reading of the

contract and not that of the FBI, the federal prosecutors and the

grand jury that led to Grigsby’s arrest and prosecution.

Additionally, any causal connection that may have

existed between the Defendants’ statements to prosecutorial

authorities about the franchise agreement and Grigsby’s

subsequent indictment was severed by the intervening, free,

independent and volitional acts of the FBI, the U.S. Attorneys’

Office and the grand jury. See Barts v. Joyner, 865 F.2d 1187,

1195 (11" Cir. 1989); Jones v. Cannon, 174 F.3d 1271, 1287

(11" Cir. 1999); Dixon v. Burke County, Ga., 303 F.3d 1271

(11 Cir. 2002). Plaintiffs argue that these cases do not apply

if the “plaintiff can show that these intervening acts were the

result of deception or undue pressure by the Defendant.”

Plaintiffs, have, however, failed to allege any facts that

demonstrate that the Defendants had the ability to and did

mislead or unduly influence the FBI, the U.S. Attorneys’ office

or the grand jury.

Finally, Plaintiffs cite no cases that would have put the

Defendants on notice that “in light of pre-existing law” their

conduct was forbidden. Quite the contrary, the law actually

encourages Officials to do what these Defendants allegedly did -

interpret public documents, investigate the expenditure of funds

to the public, report their findings to the appropriate authorities

for consideration for prosecution and institute civil litigation to

recover any funds that the public may be due. In sum, Plaintiffs

allege that the Defendants deceived prosecutors in violation of

their Fourth and Fourteenth Amendment rights, but they fail to

allege any facts which, if true, that would establish that the

Defendants caused any such violation. Because Plaintiffs have

failed to allege that the Defendants’ conduct constituted a

constitutional violation, the Defendants are entitled to qualified

immunity as to Counts III and IV of the Complaint.

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Count V - Conspiracy

Count V of the Complaint alleges that “Defendants

conspired with Deloitte, Alonso, Baum and possibly others, to

deprive Fiscal and Grigsby of their Constitutional rights by

fabricating false evidence and then using the fabricated

evidence to confiscate Fiscal’s business and property in

violation of the Fourth and Fourteenth Amendments, and to

instigate a capricious indictment, prosecution and seizure of

Grigsby in violation of the Fourth, Fifth and Fourteenth

Amendments.”

Conspiring to violate another person’s constitutional

rights violates Section 1983. Dennis v. Sparks, 449 U.S. 24,

27, 101 S.Ct. 183, 186 (1980). To establish a prima facie case

of Section 1983 conspiracy, a plaintiff must show, among other

things, that the defendants “reached an understanding to violate

his rights.” Rowe v. Fort Lauderdale, 279 F.3d 1271 (11" Cir.

2002) quoting Strength v. Hubert, 854 F.2d 421, 425 (1 i* Ci.

1988). The plaintiff does not have to produce a “smoking gun”

to establish the “understanding” or “willful participation”

required to show a conspiracy, but must show some evidence of

agreement between the defendants. Id. at 1284. To sustain a

conspiracy action under § 1983 a plaintiff must show an

underlying actual denial of its constitutional rights. See Slavin

v. Curry, 574 F.2d 1256, 1262 (5" Cir. 1978); modified on

denial of r’hrg, 583 F.2d 779 (5" Cir. 1978), Strength v. Hubert,

854 F.2d 425, 421 (11" Cir. 1988) (stating theoretical basis of

and requirements for stating a claim under § 1983 of conspiracy

to violate constitutional rights).

As stated above, Plaintiffs’ Complaint does not

sufficiently allege denial of any of their constitutional rights.

Moreover, the Complaint fails to make any particularized

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allegations that a conspiracy existed, another prerequisite ofa

§ 1983 conspiracy claim. See Phillips v. Mashburn, 746 F.2d

782, 784 (11" Cir. 1984). Finally, Plaintiffs have failed to

sufficiently allege that the Defendants were aware of a

conspiracy, much less that they agreed to participate in one. As

the Court can find no sufficiently pled federal claims in the

Complaint that could serve to abrogate Defendants’ qualified

immunity, it follows that the Defendants’ motion to dismiss

must be granted as to Count V.

Supplemental Jurisdiction

A district court has discretion to decline to exercise

supplemental jurisdiction over state law claims when: 1) the

claim raises a novel or complex issue of State law; 2) the claim

substantially predominates over the claim or claims over which

the district court has original jurisdiction, 3) the district court

has dismissed all claims over which it has original jurisdiction,

or 4) in exceptional circumstances, there are other compelling

reasons for declining jurisdictions. 28 U.S.C. § 136(c); Rowe

v. Fort Lauderdale, 279 F.3d 1271 (11" Cir. 2002). The Court

may decline to exercise jurisdiction over state-law claims,

where the Court has dismissed all the federal claims over which

it has original jurisdiction. See 28 U.S.C. 1367(c)(3). Having

dismissed Plaintiffs’ federal claims, the Court declines in its

discretion to exercise supplemental jurisdiction over the

remaining state-law claims.

CONCLUSION

LU.

Based upon the foregoing, it is

ORDERED AND ADJUDGED that Defendants Alex

Penelas, Steven B. Bass, Kathy Jackson, Miriam Alonso, and

Rachel Baum’s Motions to Dismiss First Amended Complaint

are GRANTED as to Counts I, Il, Il, IV and V.

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DONE AND ORDERED in Chambers at Miami,

Florida, this 30" day of April, 2003.

/s/

Donald L. Graham

U.S. DISTRICT JUDGE

ce: Magistrate Judge Garber

Counsel of Record

25a

APPENDIX C

United States District Court

Southern District of Florida

Miami Division

Fiscal Operations, Inc., and

Calvin Grigsby,

Plaintiffs-Appellants,

Case No. 01-04798-

CIV-Graham/Garber

V.

Miami-Dade County, Florida;

Alex Penelas; Steven B. Bass;

Kathy Jackson; Miriam Alonso,

Rachel Baum; and Deloitte and

Touche, L.L.P.

eat Neat Nea ea Nee Ne? Nee Wee See See Se” Se” Nee” “ee”

Defendants-Appellees.

THIS CAUSE came before the Court upon Defendant

Miami-Dade County’s Motion to Dismiss First Amended

Complaint, filed March 1, 2002.

THE COURT has reviewed the Motion, the pertinent

portions of the record, and is otherwise fully advised in the

premises.

26a

INTRODUCTION

Fiscal Operations, Inc., (“Fiscal’’) and its President and

Chief Executive Officer, Calvin Grigsby (“Grigsby’) filed this

action against Defendants Miami-Dade County (the “County’’),

Mayor Alex Penelas (‘‘Penelas”), Assistant County Attorney

Steven B. Bass (“Bass”), County Auditor Kathy Jackson

(“Jackson”), Commissioner Miriam Alonso (“Alonso”),

Finance Department Director Rachel Baum (“Baum”), and

Deloitte & Touche (“Deloitte”) based upon Defendants’ alleged

participation in the wrongful termination of a franchise

agreement between the County and Fiscal (the “franchise

agreement”). The Complaint also alleges the wrongful taking

of property in the form of Plaintiffs’ contractual nghts, the

wrongful seizure of Plaintiffs’ business assets and the

procurement of false information to federal authorities,

resulting in Plaintiff Grigsby’s arrest and prosecution for the

theft of public funds.

PROCEDURAL BACKGROUND

Plaintiffs filed their Original Complaint on November

26, 2001, and alleged Denial of Due Process (Count 1), Taking

Without Just Compensation (Count II), Denial of Due Process

(Count ITI), Unreasonable Seizure and Restraint (Count IV), and

Conspiracy (Count V). On February 20, 2002, Plaintiffs filed

their Amended Complaint and alleged two additional causes of

action: Accountants’ Fraud (Count VI) and Malicious

Prosecution (Count VII).

On March 1, 2002, Defendant Miami-Dade filed a

motion to dismiss the Amended Complaint. The motion asserts

that 1) this actions is barred by Rooker-Feldman doctrine

because the same claims were raised or could have been raised

in a related state proceeding; 2) the Court should dismiss the

27a

cause pursuant to the Colorado River doctrine because the same

issues are already being considered in a state claim that has

been pending for more than four years; 3) the Complaint fails

to state a claim for unlawful taking because the deprivation of

contractual rights does not constitute a taking of property; and

4) the Complaint fails a claim for a conspiracy because it fails

to state a claim for any underlying constitutional violation.

FACTUAL BACKGROUND

According to the Complaint, in 1982, Plaintiff Fiscal

entered into a franchise agreement with the County to manage

and operate gantry cranes at the Port of Miami (the “Port”.

Pursuant to the agreement, Fiscal maintained and operated the

cranes, renting the cranes on an hourly fee basis to the

stevedoring companies that loaded and unloaded cargo ships

that docked at the Port. Fiscal sent bills to the stevedoring

companies for the hourly crane rental fees (“crane user fees’’).

The Complaint alleges that until the events giving rise to the

lawsuit, the stevedores paid the crane user fees directly to

Fiscal. Also, it is alleged that the County, Deloitte, the Port,

Fiscal, the Internal Revenue Service and all others involved

treated the crane users fees as the property of Fiscal, rather than

the County’s.

According to the Complaint, however, between 1996

and 1998, the County, Penelas, Bass, Jackson, Alonso, Baum,

Deloitte, and others orchestrated a course of action that was

specifically designed and intended to, and cid: a) create and

utilize a fabricated pretext to unlawfully terminate the franchise

agreement; b) seize, by physical force and with no judicial or

other lawful process, all of the personal property of Fiscal used

by Fiscal in the operation of its business; and c) create and

utilize fabricated evidence to instigate a capricious prosecution

of, and the attendant seizure of, Grigsby. Plaintiffs allege that

Penelas directed Bass and Jackson to fabricate evidence that

28a

could be used to argue that Fiscal was a department or agent of

the County and that the gantry crane user fees that Fiscal

collected were County funds. Plaintiffs also allege that the

Defendants caused Defendant Deloitte to retroactively alter

some of its audit reports of the Port to make them consistent

with this false recharacterization of the County and Fiscal’s

longstanding relationship and treatment of the crane user fees,

with no accounting justification for the material change.

Plaintiffs claim that this conduct by the individuals Defendants

constitutes executive, not legislative functions.

The Special Audit

On November 18, 1996, Defendant Penelas allegedly

directed the County Manager to obtain a special audit of

Fiscal’s business. The responsibility for the audit was passed

to Jackson, then Acting Director of the County’s Audit and

Management Services Department. Acting assertedly on

Penelas’ order, Jackson, with the assistance of Bass, Baum,

Deloitte and others, began in December 1996 to demand every

accounting and financial document that Fiscal had ever

generated. Additionally, the County filed in February 1997, a

Public Records Act action (Metropolitan Dade County v. Fiscal,

11" Judicial Circuit, Dade County, Case No. 97-04449 CA 32)

against Fiscal, seeking to have Fiscal declared to be “a public

agency.” The County audit was completed by Jackson in

January of 1998. Plaintiffs allege that Penelas directed Bass

and Jackson to fabricate evidence that could be used to argue

that Fiscal was a department or agent of the County and that the

gantry crane user fees that Fiscal collected at the Port were

County funds. Accordingly, the Complaint alleges, at the

direction of Penelas, Bass and Jackson encouraged Deloitte to

revisit its interpretation of the franchise agreement.

29a

The Deloitte Audit and Financial Restatements

Pursuant to the franchise agreement, Fiscal maintained

and operated the cranes, renting the cranes on an hourly fee

basis to the stevedoring companies that loaded and unloaded

cargo ships that docked at the Port. Fiscal sent bills to the

stevedoring companies for the hourly crane rental fees (“crane

user fees”). The Complaint alleges that until the events giving

rise to the lawsuit, the stevedores paid the crane useT fees

directly to Fiscal. Also, the County, Deloitte, the Port, Fiscal,

the Internal Revenue Service and all others involved treated the

crane user fees as the property of Fiscal, rather than the

County’s. According to the Complaint, Deloitte's audit reports

for many years accurately reflected these financial arrangements

and treated the crane user fees as the property of Fiscal.

Plaintiffs allege that from 1990 to 1995, the financial

statements of the Seaport did not include crane usage within the

Seaport’s operating revenues. Additionally, Plaintiffs allege

that Deloitte and the County specifically knew of certain

questionable expenditures made by Fiscal from the crane

revenues, later called into question by the County.

Plaintiffs allege that in 1998, the other Defendants

caused Deloitte to retroactively alter some of its audit reports of

the Port to make them consistent with a false characterization

of Fiscal as an County agency and the crane user fees as

revenue of the Port. The restated audit report treated the crane

user fees as “County Money.” Additionally, Deloitte added the

phrase “crane usage” to its 1995 list of items included in the

Seaport 1995 operating revenues. Deloitte also increased the

stated amount of federal funds received by the Port in the

Seaport’s Restatement of the 1995 financial statements.

Plaintiffs allege that these same altered accounting treatments

were also applied to the 1996 financials of the Port.

30a

Plaintiffs allege that Deloitte made the changes to the

financial statements “for no reason other than to provide a

jurisdictional perquisite for the prosecution of Grigsby under 18

U.S.C. § 666.” The Complaint alleges that Deloitte capitulated

to the other Defendants’ request to change its accounting

treatment in this arbitrary manner. According to Plaintiffs, but

for Deloitte’s capitulation, the other Defendants “likely would

not have taken the predatory actions which followed shortly

thereafter, which depended entirely on the new fabricated

assertion that the crane revenues belonged to the County.”

Contract Termination and The Resolution

On April 21, 1998, the County Manager was given a

resolution to present to the Board, approving the termination of

the franchise and the implementing contract. The resolution

was sponsored by Alonso, prepared by other Defendants, and

approved as to form and legal sufficiency by Bass. The

resolution referred to Jackson’s January 16, 1998 audit report

as having “found, among other things, ‘mismanagement of the

County’s gantry crane operations, wasteful and abusive

spending practices, [and] undocumented and unauthorized

transactions...” The resolution also stated “it is believed that

Fiscal is currently retaining hundreds of thousands of collected

user fees belonging to the County, in violation of contract

requirements.” Noting Jackson’s recommendation that the

County assume control of the crane operation “as soon as _

practical,” the resolution directed the County Manager to do so.

To support the resolution, the County Manager was also given

a memorandum, prepared by the Defendants, recommending

approval of the resolution to terminate the Agreement.

According to the Complaint, that memorandum contained

several material misrepresentations, assertedly designed to

support the Defendants’ theft of “Public Funds” theory.

Subsequently, the County Commissioners passed the resolution.

Based upon the results of the County Manager’s audit of Fiscal

3la

and the passage of the resolution, in the Spring of 1998, the

County issued a notice of default and then terminated the

franchise contract. On May 18, 1998, acting in accordance with

Jackson’s statement that “the County should take immediate

control of the operation,” the County physically seized Fiscal’s

entire business, including the personal property and other assets

of Fiscal, and began to run the business assertedly for its own

benefit.

According to the Complaint, subsequent to the release

of the special audit, J ackson and Bass presented the Federal

Bureau of Investigation and representative of the United States

Attorney’s Office with fabricated evidence that Grigsby had

used “County Money” and “Public Funds” to make

unauthorized expenditures not directly related to crane

operations, thereby stealing County funds.

DISCUSSION

Standard of Review

A complaint should not be dismissed “‘for failure to state

a claim unless it appears beyond a reasonable doubt that the

plaintiff can prove no set of facts” that would entitle the

plaintiff to relief. Conley v. Gibson, 355 U.S. 41, 45 (1957);

Bracewell Vv. Nicholson Air Services, Inc., 680 F.2d 103, 104

(11" Cir. 1982). In deciding a motion to dismiss, a court can

only examine the four comers of the complaint. See Crowell v.

Morgan Stanley Dean Witter Services, Co., Inc., 87 F.Supp. 2d

1287 (S.D. Fla. 2000). Additionally, a court must accept a

plaintiffs well pled facts as true and construe the complaint in

the light most favorable to plaintiff. Scheuer v. Rhodes, 416

U.S. 232 (1974). The threshold of sufficiency that a complaint

must meet is exceedingly low. Ancata v. Prison Health Servs.

32a

Inc., 769 F.2d 700, 703 (11" Cir. 1985); Geidel v. City of

Bradenton Beach, 56 F.Supp.2d 1359, 1362 (M.D. Fla. 1999).

Rooker-Feldman Doctrine

The Rooker-Feldman doctrine provides that lower

federal courts are barred from reviewing the final judgment of

a state’s highest court, since review of such a determination is

an exercise of appellate jurisdiction, available only in the U.S.

Supreme Court. Rooker v. Fidelity Trust Co., 263 U.S. 413,

415-16, 44 S.Ct. 149, 150, 68 L.Ed. 362 (1923). Thus, U.S.

district courts have no jurisdiction over challenges to final state

court decisions, even if those challenges allege that the state

court’s action was unconstitutional. District of Columbia Court

of Appeals v. Feldman, 460 U.S. 462, 486, 103 S.Ct. 1303,

1317, 75 L.Ed.2d 206 (1983); Goodman v. Sipas, 259 F.3d

1327 (11" Cir. 2001); Wood v. Orange County, 715 F.2d 1542,

1546 (11 Cir. 1983). The doctrine extends not only to

constitutional claims presented or adjudicated by a state court,

but also to claims that are “inextricably intertwined” with a

state court judgment. Feldman, 460 U.S. at 483; Dale v.

Moore, 121 F.3d 624, 626 (11" Cir. 1997). A federal claim is

inextricably intertwined with a state court judgment “if the

federal claim succeeds only to the extent that the state court

wrongly denied the issues before it.”” Pennzoil Co. v. Texaco

Inc., 481 U.S. 1, 25, 107 S.Ct. 1519, 1533, 95 L.Ed.2d 1(1987)

(Marshall, J., concurring); Blue Cross and Blue Shield of

Maryland, Inc. v. Weiner, 868 F.2d 1550, 1554(11" Cir. 1989).

The Rooker-Feldman doctrine applies as long as the party had

a reasonable opportunity to raise his federal claims in the state

court proceedings. Wood v. Orange County, 715 F.2d 1543,

1547 (11" Cir. 1983). If the party had no reasonable

opportunity, the court must find “that the federal claim was not

‘inextricably intertwined’ with the state court’s judgment.”

Powell v. Powell, 80 F.3d 464, 467 (11" Cir. 1996).

33a

The crucial question in determining the applicability of

Rooker-Feldman is whether the relief requested of the federal

court would effectively reverse or void the state court’s ruling.

Olson Farms, Inc. v. Barbosa, 134 F.3d.933, 936 (9" Cir. 1998).

Ifa federal court’s decision on an issue requires a determination

that the state court was wrong, then the action is properly

characterized as an appeal and the federal court cannot hear the

case. See Charchenko v. City of Stillwater, 47 F.3d 981, 983

(8 Cir. 1995). “Both the timing of the filing of the federal and

state actions, as well as the timing of the ruling in the state case

are relevant in deciding whether the federal action should be

characterized as an appeal. For example, if the federal action

was filed prior to the state action, it cannot be said that the party

aggrieved by the state court’s ruling. See Doctor's Associates,

Inc. v. Distajo, 107 F.3d 126, 138 co ce. 1997); Texaco Inc.

vy. Pennzoil Co., 784 F.2d 1133, 1143 (2™ Cir. 1986) rev'd on

other grounds, 481 U.S. 1, 107 S.Ct. 1519, 95 L.Ed.2d 1 (1987).

The Eleventh Circuit has explained that the Rooker-

Feldman doctrine asks: is the federal plaintiff seeking to set

aside a state judgment, or does he present some independent

claim, albeit one that denies a legal conclusion that a state court

reached in a case to which he was a party? If the latter, then

there is jurisdiction and state law determines whether the

Defendant prevails under principles of preclusion. Narey V.

Dean, 32 F.3d 1521, 1525 (11 Cir. 1994).

Rooker-Feldman and Abstention

As with abstention, much of the justification behind the

Rooker-Feldman doctrine is premised on respect for state

courts. See Bryant v. Sylvester, 1995 WL 265303 2 (3° Cir.

1995), vacated on other grounds, 516 U.S. 1105, 116S.Ct. 899,

133 L.Ed.2d 834 (1996). A second justification for the doctrine

is its concern with finality. See Id. at 3. Like res judicata and

collateral estoppel, the Rooker-Feldman doctrine is intended to

34a

ensure that litigants do not take multiple bites from the same

apple. See Id. Once a litigant’s claims have been adjudicated

in the state court system, that litigant should not also have

access to the entire federal court system. See Id. at 2.

The Rooker-Feldman Doctrine is “at a minimum”

coextensive with the principles of res judicata and collateral

estoppel. See Doctor’s, 107 F.3d at 137 (citing Moccio v. New

York State Office of Court Administration, 95 F.3d 195, 199-

200 (2™ Cir. 1996)). Thus, litigation in federal court on an

issue previously addressed by a state court would be barred

under the Rooker-Feldman doctrine if it would be barred by res

judicata or collateral estoppel. See Id. The Rooker-Feldman

doctrine, however, goes farther than these preclusion doctrines

in that it does not require a final judgment before giving

preclusive effect to a state court order. Rooker-Feldman also

precludes federal courts from reviewing non-final and

interlocutory state judgments. “It cannot be the meaning of

Rooker-Feldman that while the inferior federal courts are barred

from reviewing final decisions of state courts, they are free to

review interlocutory orders.” Id. Under this reasoning, the

Rooker-Feldman doctrine bars a federal court from reviewing

the orders of state courts even when res judicata or collateral

estoppel would be inapplicable due to the lack of final

judgment.

ANALYSIS

With this sketch of the Rooker-Feldman doctrine in

mind, the Court turns now to evaluate the doctrine in light of

the circumstances presented in the instant case.

Fiscal’s State Court Actions

Fiscal’s legal dispute with the County began in 1997

when the County filed an action in state court to require Fiscal

35a

to produce its financial books and records pursuant to the terms

of the franchise agreement. (Metropolitan Dade County v.

Fiscal Operations, Inc., No. 97-04449-CA-32 (Fla. 11" Jud. Cir.

Ct.)). As a result of that action, the court ordered Fiscal to

produce all of its books and records pertaining to Fiscal’s

operation of the gantry cranes at the Port.

Based upon the information it obtained through the

action, the County filed a second state court action in July 1997

alleging, among other things, breach of contract against Fiscal, -

Grigsby, and others. (Metropolitan Dade County v. Fiscal

Operations, Inc., No. 97-15083-CA-32 (Fla. 11" Jud. Cir. Ct.)).

In response to the County’s claims, Fiscal counterclaimed for

1) Breach of Contract, 2) Conversion/Breach of Good Faith and

Fair Dealing, 3) Tortious Interference, 4) Breach of Settlement

Agreement, 5) Violation of 42 U.S.C. § 1983, 6) Public

Disclosure of Private Acts, and 7) Declaratory Judgment.

During the course of the state action, Fiscal moved to enjoin the

County from terminating the franchise agreement. That motion

was denied on March 24, 1998. Subsequently, the court

dismissed with prejudice Fiscal’s counterclaim under § 1983.

In April 1998, Fiscal filed an emergency motion to enjoin the

County from terminating Fiscal’s right to control and manage

the gantry cranes at the Port. That motion was also denied, and

the Third District Court of Appeals affirmed on May 28, 1998.

After the County terminated the franchise agreement on

May 18, 1998, Fiscal instituted a separate statutory action

against the county for forcible entry and unlawful retainer.

(Fiscal Operations, Inc. v. Miami-Dade County, 735 So.2d 598

(Fla. 3° DCA 1999)). The circuit court granted summary

judgment in favor of the County on this claim and the Third

District Court of Appeals affirmed.

Fiscal then filed a Third Amended Counterclaim in the

state court breach of contract action, asserting twelve separate

36a

counts, including a claim under § 1983. The court again

dismissed the § 1983 claim with prejudice. Fiscal then moved

for partial summary judgment on the pleadings, and sought

judgment as a matter of law on, among other things, the

County’s claim for breach of contract. The Court denied

Fiscal’s motion for partial summary judgment on the pleadings.

Plaintiffs argue that the Rooker-Feldman doctrine has

no application in this case because the doctrine requires a final

state judgment and the only rulings in state court are

interlocutory and have not ripened into a judgment. Second,

Plaintiffs assert that the doctrine presupposes an identity of

parties between the state court judgment and subsequent federal

litigation not present in this case because Plaintiff Grigsby was

not a party to the state claims. Third, Plaintiffs contend that the

state courts never adjudicated Fiscal’s contract, seizure, or due

process claims flowing from the termination of the franchise

agreement. Plaintiffs contend that the state courts merely

determined that the statutory remedy for forcible entry and

detainer would not lie. Further, Plaintiffs contend that it was

only during his criminal prosecution that the facts of

Defendants’ “orchestrated course of action was made evident in

cross examination of County and other witnesses.”

The Court has reviewed the Rooker-Feldman doctrine

along with Plaintiffs’ objections to its application in this case

and finds that the application of the doctrine is appropriate in

this cause.

Final Order Requirement

Plaintiffs argue that the Rooker-Feldman doctrine does

not apply to this case because the state action did not result in

a final order. Although the issue of whether the Rooker-

Feldman doctrine precludes federal review of state interlocutory

orders has not been definitively resolved by the Circuits, the

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greater weight of authority seems to hold that the doctrine

should bar review of final and nonfinal orders alike. See

Doctor’s, 107 F.3d at 137 (Rooker-Feldman is broader than

preclusion doctrines because it does not depend on final -

judgment); Goetzman_V. Agribank, FCB, 91 F.3d 1173, 1177

(8 Cir. 1996), Charchenko, 47 F.3d at 983. This argument,

therefore does not preclude the application of the Rooker-

Feldman doctrine in this case.

Absolute Identity of Parties

While Fiscal was a party to the state action, Grigsby was

not. Plaintiffs contend that the Rooker-Feldman doctrine has

never been applied against nonparties and should not be applied

in this case. This, however, is not quite accurate. The Court

does recognize that some courts have held that the Rooker-

Feldman doctrine does not apply to bar a suit in federal court

brought by a party that was not a party in the preceding state

court action. See,_e.g., Bennett v. Yoshina, 140 F.3d 1218,

1223-24 (9" Cir. 1998), cert. denied sub nom.; Citizens for a

Constitutional Convention _v. Yoshina, 525 U.S. 1103, 119

S.Ct. 868, 142 L.Ed.2d 770 (1999) (mere participation in state

case as amici does not invoke the doctrine); United States v.

Owens, 54 F.3d 271, 274 (6 Cir. 1995); Valenti, 962 F.2d at

797-98. Other courts, however, have not hesitated to apply

Rooker-Feldman against parties who did not participate in the

state suit. See T.W. & M.W. v. Brophy, 124 F.3d 893, 898 (7"

Cir. 1997); Republic of Paraguay V. Allen, 949 F.Supp. 1269,

1273 (E.D. Va. 1996), aff'd on other grounds, 134 F.3d 622,

628 (4" Cir. 1997) Williams v. Adkinson, 792 F.Supp. 755,

761-63 (M.D. Ala. 1992) aff'd, 987-F.2d 774 (11" Cir. 1993).

Additionally, more than one federal appellate judge has

expressed the view that the applicability of Rooker-Feldman

should not depend on identity of the parties in the state and

federal suits, see Bates v. Jones, 131 F.3d 843, 855-57 (9" Cir.

1997) (en banc) (Rymer, J. , concurring); Roe v. Alabama, 43

38a

F.3d 574, 586 (11" Cir. 1995) (Edmonson, J., dissenting

(disagreeing with the thought that only absolute identity of

parties in state action and federal court action, without regard

to state-case parties possibly under control or in privity with

federal-case parties, will trigger a Rooker-Feldman bar in

federal court)).

The Court is persuaded by the latter approach. Insisting

that the parties must be identical, it seems, confuses the

Rooker-Feldman doctrine with principles of res judicata. As

noted above, these doctrines are not the same. See

Hachamovitch v. DeBuono, 159 F.3d 687, 696 (2™ Cir. 1998)

(noting that the “Rooker-Feldman doctrine differs from

preclusion in certain critical ways”); Charchenko, 47 F.3d at

984-85 (conducting separate analyses and finding claims barred

by Rooker-Feldman but not res judicata). Accordingly, the fact

that Grigsby was not a party to the state suit is not by itself

dispositive. Moreover, Grigsby has failed to demonstrate that

he did not have a reasonable opportunity to raise his claims in

state court. Additionally, though Grigsby chose not to join in

the state court lawsuit, Grigsby’s corporation, Fiscal, did. As

the President and CEO of Fiscal, not only did Grigsby have a

reasonable opportunity to join in the state action, but Grigsby

was also arguably in privity. This is enough to bar his claim.

See Dudley v. Smith, 504 F.2d 979 (5" Cir. 1974); Union Oil

of California Amsco Div. v. Watson, 468 So.2d 349 (Fla. DCA

1985). Accordingly, this argument does not preclude the

application of the Rooker-Feldman doctrine in this case.

Exact Identity of Claims

Plaintiffs assert that Rooker-Feldman is inapplicable in

this case because the claims made in the state action are not

identical to those made in the federal action. Plaintiffs contend

that while the state action addressed the parties’ breach of

contract claims, the “gist of the [federal] claim focuses on the

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improper motivation of the Defendants, not on whether they

breached the terms of any particular contract.” Specifically,

Plaintiffs contend that while the state court examined Fiscal’s

defamation, property right and § 1983 claims, the state court

never assumed jurisdiction over the fabricated evidence,

conspiracy, and use of armed force, instigation of capricious

prosecution or malicious prosecution claims. Plaintiffs argue

that only after the trials were concluded in late 1999 were

Plaintiffs “cognizant that fabricated evidence was used to

secure the indictment to help the County cover up its invasion.”

Supreme Court and Eleventh Circuit authority, however,

refutes Plaintiffs’ assertions. In Feldman, the Supreme Court

noted that a district court could not exercise jurisdiction over

constitutional claims inextricably intertwined with a state

court’s judgment simply because the federal plaintiff failed to

raise such claim in the state court. Feldman, 460 U.S. at 482,

103 S.Ct. at 1315, 75 L.Ed.2d at 223. Interpreting this broad

proposition, the court concluded that the Rooker-Feldman

doctrine applies when the federal plaintiff had a reasonable

opportunity to raise the federal claim in the state court

proceedings. Wood, 715 F.2d at 1546-47. The Rooker-

Feldman doctrine therefore does not require an exact identity of

the claims. It applies not only to claims that were actually

raised in state court, but also to “claims that the litigants did not

argue in state court, but were inextricably intertwined with the

state court judgment.” Dale v. Moore, 121 F.3d 624, 626 (1

Cir. 1997).

The problem then becomes determining the scope of the

term “reasonable opportunity.” Courts have rendered several

relevant decisions. In Wood, for example, the court indicated

that a party’s ability to raise a claim on appeal constituted a

reasonable opportunity to raise the claim. Wood, 715 F.2d at

1548 (district court has jurisdiction only because the federal

plaintiff did not have a reasonable opportunity to raise his

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claim; he lacked a reasonable opportunity to appeal the

judgment, and the opportunity for a post-judgment attack did

not substitute for an appeal). In Rolleston v. Eldridge, 848 F.2d

163, 165 (11 Cir. 1988), the court affirmed the district court’s

dismissal for lack of jurisdiction because the party had the

opportunity, and in fact availed himself of such opportunity, to

raise his federal claims in his state court appeal of a state trial

court’s decision. See also Hollins v. Wessel, 819 F.2d 1073,

1074 (11" Cir. 1987).

Turning to the federal complaint, the Court notes that

the relief sought would, as a practical matter, directly nullify the

final judgment of the state district court dismissing Fiscal’s

claims against the County. This fact alone may be sufficient to

decide the case. See Suzanna Sherry, Judicial Federalism in

the Trenches: Rooker-Feldman Doctrine in Action, 74 Notre

Dame L.Rev. 1085, 1099 (1999) (suggesting that Rooker-

Feldman applies wherever the federal court “is in effect

reviewing the state court judgment even if it is not reviewing

the decision’’). As in Rolleston, and Hollins, Plaintiffs had the

opportunity to assert, and did assert, deprivation of property

claims arising from the County’s decision to terminate Fiscal’s

contract at the Port, in state court. Accordingly, the Rooker-

Feldman bar applies to Plaintiffs’ due process claims. See Key

v. Wise, 629 F.2d 1049, 1055 (5" Cir. 1980), cert. denied, 454

U.S. 1103, 102 S.Ct. 682, 70 L.Ed.2d 647 (1981). The Court

also finds, however, that even if Plaintiffs were not asking the

court to effectively overturn the state court’s judgment, the

federal claims they state so closely implicate the decision of the

state court that the federal suit would be barred anyway. See

Feldman, 460 U.S. at 482 n. 16, 103 S.Ct. 1303. In reaching

this conclusion, the court addresses two issues that complicate

- the inquiry.

First, since Rooker-Feldman deprives federal courts of

jurisdiction over claims not raised before the state court only

4ia

where such claims are inextricably intertwined with the state

court judgment, “a claim -- particularly a claim under federal

law -- is not precluded if it is ‘separable from and collateral to

the merits of the state-court judgment.’” Fielder, 188 F.3d at

1034 (quoting Pennzoil, 481 U.S. at 21, 107 S.Ct. 1519

(Brennan, J., concurring)). On its face, Plaintiffs’ federal

complaint in this case may initially appear to articulate legal

claims that are separable from and collateral to those raised

before the state court. Indeed, whereas the state court faced a

breach of contract claim along with the torts of interference and

public disclosure challenge, the federal complaint studiously

alters the framing of the claims. Instead, Plaintiffs creatively

invoke the Fourth and Fourteenth Amendments, alleging that

the County’s termination of the franchise agreement,

Defendants’ demands for Fiscal’s accounting and financial

documents, and Defendants’ disclosure of Fiscal’s alleged

wrongdoing to prosecutorial authorities and the media, resulted

in § 1983 violations.

Ultimately, the Court believes that these arguments do

no more than restate the claims for relief that were rejected on

the merits by the state court. Although technically the suits may

invoke distinct constitutional provisions, as a substantive matter

they both challenge the basic fairness of the County’s

termination of the franchise agreement, the demands made for

Fiscal’s accounting documents and disclosures by Defendant's

regarding Fiscal’s alleged misconduct. Thus, the Fourth and

Fourteenth Amendment arguments presented to the district

court appear to be nothing more than creative attempts to

reclothe the failed due process claims in new constitutional

garb. The claims made in Count I and II of the federal

Complaint are based upon the same allegations of deprivation

of Plaintiffs’ constitutional nghts that Fiscal argued and lost in

state court proceedings. The claims in Count III and IV of the

federal Complaint are based upon the same allegations of the

County’s procurement of “false evidence” that Fiscal argued

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and lost in state court proceedings. Plaintiffs’ addition of the

claims made in the federal action therefore are insufficient to

preclude a dismissal based upon the Rooker-Feldman doctrine.

As such, these arguments present the court with a situation in

which a decision favorable to Plaintiffs could “only be

predicated upon a conviction that the state court was wrong.”

Pennzoil, 481 U.S. at 25, 107 S.Ct. 1519 (Marshall, J.,

concurring). Without commenting on the merits of Plaintiffs’

arguments, the court simply reiterates that federal plaintiffs

cannot by artful pleading obtain a hearing of disguised state

court appeals that would otherwise be subject to a Rooker-

Feldman bar. See Fielder, 188 F.3d at 1034; Valenti_v.

Mitchell, 962 F.2d 288, 296 (3 Cir. 1992) (party “cannot be

allowed to escape Rooker-Feldman by raising a new

constitutional theory in federal court’).

CONCLUSION

As stated above, the state courts previously considered

Fiscal’s very similar claims, dismissed with prejudice the §

1983 claims, and granted the County’s motion for summary

judgmentas to the other claims. The Court finds that the claims

in the instant action are inextricably intertwined with those in

the state action. Accordingly, based upon the Rooker-Feldman

doctrine, the Court is unable to consider Plaintiffs’ claims

against the County and the County’s motion to dismiss must be

granted. Consequently Fiscal’s claims against the County must

be dismissed. Based upon the foregoing, it is.

ORDERED AND ADJUDGED that Defendant's

Motion to Dismiss is GRANTED.

DONE AND ORDERED in chambers at Miami,

Florida this 30" day of April, 2003.

cc:

43a

/s/

Donald L. Graham

U.S. DISTRICT JUDGE

Magistrate Judge Garber

Counsel of Record

44a

APPENDIX D

United States District Court

Southern District of Florida

Miami Division

Fiscal Operations, Inc., d )

Calvin Grgisby, )

)

Plaintiffs-Appellants, )

)

V. ) Case No. 01-04798-

) | CIV-Graham/Garber

Miami-Dade County, Florida; )

Alex Penelas; Steven B. Bass; )

Kathy Jackson; Miriam Alonso; )

)

)

)

)

Rachel Baum; and Deloitte and

Touche, L.L.P.

Defendants-Appellees.

ORDER

THIS CAUSE came before the Court upon Defendant

Deloitte & Touche, LLP’s Motion to Dismiss First Amended

Complaint, filed August 2, 2002.

THE COURT has reviewed the Motion, the pertinent

portions of the record, and is otherwise fully advised in the

premises.

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INTRODUCTION

Fiscal Operations, Inc., (“Fiscal’’) and its President and

Chief Executive Officer, Calvin Grigsby (“Grigsby”) filed this

action against Defendants Miami-Dade County (the “County”’),

Mayor Alex Penelas (‘Penelas’”’), Assistant County Attorney

Steven B. Bass (“Bass”), County Auditor Kathy Jackson

(“Jackson”), Commissioner Miriam Alonso (“Alonso”),

Finance Department Director Rachel Baum (“Baum”), and

Deloitte & Touche (“Deloitte”) based upon Defendants’ alleged

participation in the wrongful termination of a franchise

agreement between the County and Fiscal (the “franchise

agreement”). The Complaint also alleges the wrongful taking

of property in the form of Plaintiffs’ contractual rights, the

wrongful seizure of Plaintiffs’ business assets and the

procurement of false information to federal authorities,

resulting in Plaintiff Grigsby’s arrest and prosecution for the

theft of public funds.

PROCEDURAL BACKGROUND

Plaintiffs filed their Original Complaint on November

26, 2001, and alleged Denial of Due Process (Count 1), Taking

Without Just Compensation (Count II), Denial of Due Process

(Count II), Unreasonable Seizure and Restraint (Count IV), and

Conspiracy (Count V). On February 20, 2002, Plaintiffs filed

their Amended Complaint and alleged two additional causes of

action: Accountants’ Fraud (Count VI) and Malicious

Prosecution (Count VII).

On August 2, 2002, Deloitte filed its motion to dismiss

the Amended Complaint and asserts that 1) the Complaint fails

to state a cause of action against Deloitte under 42 U.S.C. §

1983, 2) the Complaint fails to plead the claim of Accountants’

Fraus with particularity, and 3) the Complaint fails to state a

ee

SA ha 10 ails AA Pett tea DO ty LAOS ae bb A Ara. hha) Wy ds

a be ys

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:

46a

cause of action against Deloitte for malicious prosecution. For

the reasons discussed herein, the Defendant Deloitte’s motion

to dismiss under Rules 12(b)(6) and 9(b) is granted.

FACTUAL BACKGROUND

According to the Complaint, in 1982, Plaintiff Fiscal

entered into a franchise agreement with the County to manage

and operate gantry cranes at the Port of Miami (the “Port”), a

County facility. According to the Complaint between 1996 and

1998, the County, Penelas, Bass, Jackson, Alonso, Baum,

Deloitte, and others orchestrated a course of action that was

specifically designed and intended to, and did: a) create and

utilize a fabricated pretext to unlawfully terminate Plaintiffs’

exclusive franchise agreement; b) seize, by physical force and

with no judicial or other lawful process, all of the personal

property of Fiscal used by Fiscal in the operation of its

business; and c) create and utilize fabricated evidence to

instigate a capricious prosecution of, and the attendant seizure

of, Grigsby.

The Special Audit

On November 18, 1996, Defendant Penelas allegedly

directed the County Manager to obtain a special audit of

Fiscal’s business. The responsibility for the audit was passed

to Jackson, then Acting Director of the County’s Audit and

Management Services Department. Acting on Penelas’ order,

Jackson, with the assistance of Bass, Baum, Deloitte and others,

allegedly began in December 1996 to demand every accounting

and financial document that Fiscal had ever generated.

Additionally, the County filed in February 1997, a Public

Records Act action (Metropolitan Dade County v. Fiscal, |

Judicial Circuit, Dade County, Case No. 97-04449 CA 32)

against Fiscal, seeking to have Fiscal declared to be “a public

agency.” The audit was completed by Jackson in January of

47a

1998. Plaintiffs allege that Penelas directed Bass and J ackson

to fabricate evidence that could be used to argue that Fiscal was

a department or agent of the County and that the gantry crane

user fees that Fiscal collected at the Port were County funds.

Accordingly, the Complaint alleges, at the direction of Penelas,

Bass and Jackson encouraged Deloitte to revisit its

interpretation of the franchise agreement.

The Deloitte Audit and Financial Restatements

Pursuant to the franchise agreement, Fiscal maintained

and operated the cranes, renting the cranes on an hourly fee

basis to the stevedoring companies that loaded and unloaded

cargo ships that docked at the Port. Fiscal sent bills to the

stevedoring companies for the hourly crane rental fees (“crane

user fees”). The Complaint alleges that until the events giving

rise to the lawsuit, the stevedores paid the crane user fees

directly to Fiscal. According to the Plaintiffs, the County,

Deloitte, the Port, Fiscal, the Internal Revenue Service and all

others involved treated the crane user fees as the property of

Fiscal, rather than the County’s. According to the C omplaint,

Deloitte’s audit reports for many years accurately reflected

these financial arrangements and treated the crane user fees as

the property of Fiscal. Plaintiffs allege that from 1990 to 1995,

the financial statements of the Seaport did not include crane

usage within the Seaport’s operating revenues. Additionally,

Plaintiffs allege that Deloitte and the County specifically knew

of certain questionable expenditures made by Fiscal from the

crane revenues, later called into question by the County.

Plaintiffs allege that in 1998, the other Defendants

caused Deloitte to retroactively alter some of its audit reports of

the Port to make them consistent with a false characterization

of Fiscal as an County agency and the crane user fees as

revenue of the Port. The restated audit report treated the crane

user fees as “County Money.” Additionally, Deloitte added the

48a

phrase “crane usage” to its 1995 list of items included in the

Seaport 1995 operating revenues. Deloitte also increased the

stated amount of federal funds received by the Port in the

Seaport’s Restatement of the 1995 financial statements.

Plaintiffs allege that these same altered accounting treatments

were also applied to the 1996 financials of the Port.

Plaintiffs allege that Deloitte made the changes to the

financial statements “for no reason other than to provide a

jurisdictional perquisite for the prosecution of Grigsby under 18

U.S.C. § 666.” The Complaint alleges that Deloitte capitulated

to the other Defendants’ request to change its accounting

treatment in this arbitrary manner. According to Plaintiffs, but

for Deloitte’s capitulation, the other Defendants “likely would

not have taken the predatory actions which followed shortly

thereafter, which depended entirely on the new fabricated

assertion that the crane revenues belonged to the County.”

Contract Termination and The Resolution

On April 21, 1998, the County Manager was given a

resolution to present to the Board, approving the termination of

the franchise and implementing contract. The resolution was

sponsored by Alonso, prepared by other Defendants, and

approved as to form and legal sufficiency by Bass. The

resolution referred to Jackson’s January 16, 1998 audit report

as having “found, among other things, ‘mismanagement of the

County’s gantry crane operation, wasteful and abusive spending

practices, [and] undocumented and unauthorized

transactions...” The resolution also stated “it is believed that

Fiscal is currently retaining hundreds of thousands of collected

user fees belonging to the County, in violation of contract

requirements.” Noting Jackson’s recommendation that the

County assume control of the crane operation “as soon as

practicai,” the resolution directed the County Manager to do so.

To support the resolution to terminate the Agreement.

According to the Complaint, that memorandum contained

several material misrepresentations, assertedly designed to

support the Defendants’ theft of “Public Funds” theory.

Subsequently, the County Commissioners passed the resolution.

Based upon the results of the County Manager’s audit of Fiscal

and the passage of the resolution, in the Spring of 1998, the

County issued a notice of default and then terminated the

franchise contract. On May 18, 1998, acting in accordance with

Jackson’s statement that “the County should take immediate

control of the operation,” the County physically seized Fiscal’s

entire business, including the personal property and other assets

of Fiscal, and began to run the business assertedly for its own

benefit.

According to the C omplaint, subsequent to the release

of the special audit, Jackson and Bass presented the Federal

Bureau of Investigation and representative of the United States

Attorney’s Office with fabricated evidence that Grigsby had

used “County Money” and “Public Funds’ to make

unauthorized expenditures not directly related to crane

operations, thereby stealing County funds.

DISCUSSION

Standard of Review

A complaint should not be dismissed “for failure to state

a claim unless it appears beyond a reasonable doubt that the

plaintiff can prove no set of facts” that would entitle the

plaintiff to relief. Conley v. Gibson, 355 USS. 41, 45 (1957);

Bracewell v. Nicholson Air Services, Inc., 680 F.2d 103, 104

(11" Cir. 1982). In deciding a motion to dismiss, a court can

only examine the four corners of the complaint. See Croweil v.

Morgan Stanley Dean Witter Services, Co., Inc., 87 F.Supp. 2d

1287 (S.D. Fla. 2000). Additionally, a court must accept a

50a

plaintiffs well pled facts as true and construe the complaint in

the light most favorable to plaintiff. Scheuer v. Rhodes, 416

U.S. 232 (1974). The threshold of sufficiency that a complaint

must meet is exceedingly low. Ancata v. Prison Health Servs.

Inc., 769 F.2d 700, 703 (11™ Cir. 1985); Geidel v. City of

Bradenton Beach, 56 F.Supp.2d 1359, 1362 (M.D. Fla. 1999).

42 U.S.C. § 1983 and State Action

Plaintiffs allege that Deloitte’s revision in 1998 of a

“dormant 3 year old Seaport 1995 financial statement to show

Fiscal’s Money as the County’s Money and its other auditing

manipulations” was an integral part of Defendants’ jointly

orchestrated, conspiratorial, and tortious scheme to take Fiscal’s

business methods, assets and goodwill and instigate a

prosecution of Grigsby. Plaintiffs allege further that Deloitte’s

conduct constituted state action and as such, Deloitte may be

found liable for § 1983 violations. Deloitte contends that as a

private entity furictioning as an independent auditor for the Port,

the Complaint fails to state a cause of action against it under 42

U.S.C. § 1983 because it fails to allege state action.

Accordingly, Deloitte petitions the Court to find that Plainuffs’

§ 1983 claims against Deloitte must be dismissed.

It is axiomatic that the Fourteenth Amendment, which

is the constitutional authority for Plaintiffs’ § 1983 claims,

applies only to such action as may be fairly be said to be that of

the states. That Amendment erects no shield against merely

private conduct, however discriminatory or wrongful. See

Shelley v. Kramer, 334 U.S. 1, 13 (1984); Jackson _v.

Metropolitan Edison Co., 419 U.S. 345, 349 (1974). Thus, the

only prope: Defendants in a § 1983 action are those who

represent the state in some capacity, whether they act in

accordance with their authority or misuse it. Monroe v. Pape,

365 U.S. 167, 172 (1961).

Sla

The § 1983 plaintiff must establish that the actions of a

private entity are properly attributable to a governmental entity.

See Flagg Brothers v. Brooks, 436 U.S. 149, 156 (1978). In

fact, when the Defendant is not a state agency or employee,

state action may be found only in rare circumstances. See

Harvey v. Harvey, 949 F.2d 1127, 1130. (11 Cir. 1992). In

this circuit, the Court may ascribe governmental status to

private conduct based upon 1) the public function test; 2) the

state compulsion test; and 3) the nexus/joint action test.

Accord, Willis v. The University Health Services, Inc., 993

F.2d 840 (11" Cir. 1992); Morast v. Lance, 807 F.2d 926, 931

(11 Cir. 1987).

Public Function Test

The Court may find state action present in the exercise

by a private entity of powers traditionally exclusively reserved

to the State. This requirement of exclusivity is not satisfied

merely by the conferral of monopoly by the State or extensively

be government regulation; or merely by the performance of a

public service. It requires delegation of a function which is

uniquely and excessively governmental in nature. See Jackson

v. Metropolitan Edison Co., 419 U.S. 345, 352 (1974); Public

Utilities Comm’n v. Pollak, 343 U.S. 451, 462 (1952).

Plaintiffs have made no allegations that Deloitte’s audit,

or restatement of the Seaport’s financial statements constituted

a uniquely governmental function. According to the record,

Deloitte, as an independent auditor, performed only a traditional

accounting function routinely performed by a myriad of non-

governmental entities. Moreover, while federal officers and

investigators may have reviewed Deloitte’s audit in furtherance

of Grigsby’s arrest and seizure, Deloitte did not participate in

any such prosecutorial conduct and therefore did not perform a

governmental function. Accordingly, the Complaint fails to

state a factual predicate for ascribing state action on this basis.

Nexus/Joint Action Test

State action can be imputed where the state so far

insulated itself into a position of interdependence with the

private entity that it must be recognized as a joint participant in

the challenged activity. Jackson v. Metropolitan Edison Co.,

419 U.S. 345, 351 (1974). There must exist a “close nexus

between the state and the challenged action of the regulated

entity so that the action of the latter may be fairly treated as that

of the state itself.” Id. at 352. Further, the government entity

must have been a joint participant in the very wrongdoing

attributed to the private Defendant. See National Broadcasting

Company v. Communications Workers of America, AFL-CIO,

860 F.2d 1022, 1027 (11" Cir. 1988). The question is whether

the particular conduct at issue resulted from a government

policy of decision. In fact, “the governmental actor must be

ultimately responsible, no less than the private actor, for the

particular wrongful conduct attributed to the private actor.”

Greco v. Orange Memorial Hospital Corp., 513 F.2d 873, 882

(5" Cir. 1975). Further, the relationship must be sufficiently

symbiotic that the governmental entity has joint responsibility

for allegediy wrongful private conduct. “The symbiotic

relationship must involve the alleged constitutional violation.”

Patrick v. Floyd Medical Center, 201 F.3d 1313, 1315 (11" Cir.

1993).

The Complaint contains no allegation that the County

and Deloitte were joint participants in the restatements of the

1995 financial statements of the Seaport. At most, the

Complaint alleges that the Defendants encouraged Deloitte to

undertake the asserted restatements, and that Deloitte

acquiesced. Further, the Complaint fails to allege that the

County was in any way a participant in the accounting function.

Moreover, the Complaint fails to allege with particularity that

the County insulated itself into a position of interdependence

with Deloitte such that the two might be recognized as joint

53a

participants in the accounting restatements. The Complaint

ascribes the asserted wrongdoing to Deloitte alone, though with

the County’s encouragement. Therefore, the Complaint fails to

ascribe state action to Deloitte under the nexus/joint action test.

The Compulsion Test

It is only when a state has exercised coercive power OF

has significant encouragement, either overt of covert, that the

choice must in law be deemed to be that of the state. Blum v.

Yaretsky, 457 U.S. 991, 1004 (1982). The government must

exercise such coercive power that the private entity's action

must, in law, be deemed that of the government. Id. at 1004.

The Complaint alleges that the County defendants

conferred with Deloitte beginning in early 1997 on a plan to

switch the accounting treatment to establish a fabricated basis

for seizing the business and prosecuting Grigsby. The

Complaint further alleges that the County “induced Deloitte” to

revise its longstanding accounting treatment of the crane user

fees. Because Plaintiffs have sufficiently pled that some form

of encouragement for Deloitte’s act of conducting the audit and

the restatements may have been tantamount to an act of the

County, the Court must find that state action may be ascribed to

Deloitte. The Court must therefore deny Deloitte’s motion to

dismiss Plaintiffs § 1983 claims. .

As such, the Court now tums to the Complaint to

determine whether Plaintiffs have stated a claim of § 1983

violations upon which relief could be granted.

Count I - Denial of Due Process

Plaintiffs contend that they possessed a property right in

the franchise agreement which was “expropriated by arbitrary

and capricious means.” Plaintiffs contend that the “gist of the

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claim focuses on the improper motivation of the Defendants,

not on whether they breached the terms of any particular

agreement.” Plaintiffs do not contend that they possessed a

liberty interest in their contract with the county but rather, that

the contract was “property” within the meaning of the

Fourteenth Amendment. This assertion is incorrect as a matter

of law. The Supreme Court in Logan v. Zimmerman Brush,

455 U.S. 422, 102 S.Ct. 1148, 71 L.Ed.2d 265 (1982), provided

useful guidance for determining what interests constitute

“property” as envisioned by the Fourteenth Amendment. In that

case the Court remarked that “[t}he hallmark of property ... is an

individual entitlement grounded in state law, which cannot be

removed except ‘for cause’.”’ Id. at 430, 102 S.Ct. at 1155. See

also, Board of Regents v. Roth, 408 U.S. 564, 576-78, 92 S.Ct.

2701, 2708-10, 33 L.Ed.2d 548 (1972) (no property interest in

having contract renewed where previous contract did not

require renewal absent sufficient cause). Under this test

Plaintiffs did not possess a property interest in their contract

with the County. Accordingly, Plaintiffs have failed to state a

claim of denial of due process upon which relief could be

granted and Deloitte’s motion to dismiss as it relates to Count

I of the Complaint must be granted.

Count II - Taking Without Compensation

Count II of the Complaint alleges that Fiscal’s personal

property was improperly seized without compensation.

Specifically, the Complaint alleges that “Defendants denied

Fiscal’s management access to Fiscal’s own secure, fenced

work area, using posted armed security guards to prevent

access. Defendants then took possession of Fiscal’s procedure

manuals, appropriated Fiscal’s business methods, and began

using over $1,000,000 worth of Fiscal’s tools, spare parts and

equipment, without any compensation to Fiscal.”

55a

The Takings Clause of the Fifth Amendment of the U.S.

Constitution provides: “nor shall private property be taken for

public use, without just compensation.” Villas of Lake Jackson

vy. Leon County, 121 F.3d 610, 614 (1 1" Cir. 1997); The

Reserve, Ltd. v. Town of Longboat Key, 17 F.3d 1374, 1379-80

(11" Cir. 1994); the only substantive due process claim is for

“arbitrary and capricious” taking of property. A substantive due

process analysis, within the deprivation of a property interest

context, involves two queries: “1 ) was the plaintiff deprived of

a constitutionally protectible property interest? and 2) assuming

a property interest, was the deprivation of that property interest

for an improper motive and by means that were pretextual,

arbitrary and capricious and without any rational basis?” The

Reserve, Ltd. at 1379 (11" Cir. 1994).

‘Se

Plaintiffs claim that the Defendants deprived them of

access to their property, constituting a taking without due

process in violation of the Fifth Amendment. In Williamson

County Regional Planning C ommission v. Hamilton Bank, 473

U.S. 172, 105 S.Ct. 3108, 87 L.Ed.2d 126 (1985), the Supreme

Court held that a property owner must exhaust state procedures

for obtaining just compensation, including resort to a state

inverse condemnation action, before bringing a “taking” claim

under 42 U.S.C. 1983. Id., 105 S.Ct. at 3121-22. The Court

reasoned that the Fifth Amendment does not prohibit takings,

only uncompensated takings. “(Because the Constitution does

not require pretaking compensation, and is instead satisfied by

a reasonable and adequate provision for obtaining

compensation after the taking, the State’s action here is not

‘complete’ until the State fails to provide adequate

compensation for the taking.” Id. Thus, “ifa State provides an

adequate remedy for seeking just compensation, the property

owner cannot claim a violation of the Just Compensation

Clause until it has used the procedure and been denied just

compensation.” Id. at 3121. Florida law provides

compensation for deprivation or impairment of the right of

S6a

access, Anhoco Corp. v. Dade County, 144 So.2d 793 (Fla.

1962), which may be enforced in an action for inverse

condemnation. See, e.g., Pinellas County v. Austin, 323 So.2d

6 (Fla. Dist. Ct. App. 1975). As Plaintiffs have not shown that

the Florida procedures were unavailable or inadequate; until

they have utilized those procedures, their takings claim is

premature. Plaintiffs have failed to sufficiently allege any

argument in support of their claim for denial of due process and

accordingly, Defendants’ motion to dismiss as it related to

Count II of the Complaint must be granted.

Counts III and IV - Denial of Due Process and

Unreasonable Seizure

Count III alleges that “Defendants, with the assistance

of Deloitte and others, fabricated evidence to the effect that

Grigsby had stolen ‘Public Funds’ and used that fabricated

evidence to deceive federal prosecutors into initiating a grand

jury proceeding (where the jurors were similarly deceived) and

a subsequent prosecution.” Count IV alleges that “using

deliberately fabricated evidence, Defendants deceived the

prosecutor into believing that probable cause existed and

proximately caused the deception of the grand jury, the

initiation of a prosecution that was not backed by probable

cause, and an unlawful seizure and restraint of Grigsby.”

Plaintiffs argue that § 1983 provides a remedy against a public

official’s use of “false evidence” to support a criminal

prosecution.

In order to determine whether Plaintiffs have stated a

claim for Deloitte’s violation of their constitutional due process

rights, the Court must first determine whether a constitutional

right has been established. Secondly, the court must determine

whether Plaintiffs have alleged sufficiently that Deloitte

violated such a nght.

=

/

nN

a

The Court is persuaded that there is aclearly established

constitutional due process nght not to be subjected to criminal

charges on the basis of false evidence that was deliberately

fabricated by the government. Perhaps because the proposition

is virtually self-evident, the Court is not aware of any prior

cases that have expressly recognized this specific right, but that

does not mean that there is no such right. Rather, what is

required is that government officials have “fair and clear

warning” that their conduct is unlawful. See United States v.

Lanier, 520 U.S. 259, 271, 117 S.Ct. 1219, 137 L.Ed.2d 432

(1997) (quoting Anderson v. Creighton, 483 U.S. 635,640, 107

S.Ct. 3034, 97 L.Ed.2d 523 (1987).

While a constitutional due process nght has clearly been

established, Plaintiffs have failed to allege sufficiently that

Deloitte’s conduct violated such a right. Plaintiffs point to

cases that stand for the general proposition of law that it is

unlawful to pursue a criminal conviction on the basis of “false

evidence.” The relevant question in this case is, however, not

whether it is unlawful to use false evidence, but whether it was

clearly established that Deloitte’s undertaking of the audit and

financial restatements constitutes the procurement of “false

evidence.”

The Plaintiffs’ vague and conclusory allegations of

fabricated evidence do not establish a § 1983 liability. The

Eleventh Circuit has consistently held that a complaint must

allege relevant facts “with some specificity.” GJR Investments,

Inc. v, County of Escambia, 132 F.3d 1359, 1367 (1i™ Cir.

1998). More than mere conclusory notice pleading is required.

“(A] complaint will be dismissed as insufficient where the

allegations it contains are vague and conclusory.” Fullman v.

Graddick, 739 F.2d 553, 556-57 (11" Cir. 1984). Moreover, in

reviewing a motion to dismiss, the court need only accept

“well-pleaded facts” and “reasonable inferences drawn from

those facts.” Oladeinde v. City of Birmingham, 963 F.2d 1481,

58a

1485 (11" Cir. 1992). “[U]nsupported conclusions of law or of

mixed fact and law have long been recognized not to prevent a

Rule 12(b)(6) dismissal.’’ Marsh v. Butler County, 268 F.3d

1014, 1036(11" Cir. 2001). Plaintiffs have failed to allege with

any specificity that Deloitte “used the fabricated evidence to

deceive federal prosecutors” or that Deloitte “deceived the

prosecutor into believing that probable cause existed.” Instead,

Plaintiffs allege that Deloitte aided in the fabrication of

evidence that was eventually submitted by others to

prosecutorial authorities.

Plaintiffs claim that there is a causal connection between

Deloitte’s audit and financial restatements and Grigsby’s

subsequent prosecution, but they do not allege any facts to

support this connection. In fact, the Complaint contains no

allegation that Deloitte transmitted any information regarding

the financial statements to anyone other than the Seaport, its

client. The Complaint also fails to allege that Deloitte had any

knowledge that any of the Defendants would communicate with

federal prosecutors. Further, Plaintiffs do not allege that

Deloitte directed the FBI or the U.S. Attorneys’ Office to

conduct the investigation or to pursue the subsequent

prosecution of Grigsby. Additionally, any causal connection

that may have existed between Deloitte’s restatements and

Grigsby’s subsequent indictment was severed by the

intervening, free, independent and volitional acts of the FBI, the

U.S. Attorneys’ Office and the grand jury. See Barts v. Joyner,

865 F.2d 1187, 1195 (11"™ Cir. 1989); Jones v. Cannon, 174

F.3d 1271, 1287 (11" Cir. 1999); Dixon v. Burke County, Ga.,

303 F.3d 1271 (11" Cir. 2002). Plaintiffs argue that these cases

do not apply if the “plaintiff can show that these intervening

acts were the result of deception or undue pressure by the

Defendant.” Plaintiffs, have, however, failed to allege any facts

that demonstrate that the Defendants had the ability to and did

mislead or unduly influence the FBI, the U.S. Attorneys’ office

or the grand jury.

59a

While Plaintiffs have established the existence of a

constitutional due process right, they have failed to allege

sufficiently that Deloitte violated such a right. Accordingly,

Deloitte’s motion to dismiss as it pertains to Plaintiffs’ § 1983

claims must be granted.

Count V - Conspiracy

Conspiring to violate another person’s constitutional

rights violates Section 1983. Dennis v. Sparks, 449 U.S. 24,

27. 101 S.Ct. 183, 186 (1980). To establish a prima facie case

of Section 1983 conspiracy, a plaintiff must show, among other

things, that the defendants “reached an understanding to violate

his rights.” Rowe v. Fort Lauderdale, 279 F.3d 1271 (11" Cir.

2002) quoting Strength v. Hubert, 854 F.2d 421, 425 (11" Cir.

1988). The plaintiff does not have to produce a “smoking gun”

to establish the “understanding” or “willful participation”

required to show a conspiracy, but must show some evidence of

agreement between the defendants. Id. at 1284. Section 1983

does not afford a remedy against a private person unless that

person is shown to have conspired with one or more state

actors. NAACP v. Hunt, 891 F.2d 1555, 1563 (1 1" Cir. 1990).

To sustain a conspiracy action under § 1983 a plaintiff

must show an underlying actual denial of its constitutional

rights. See Slavin v. Curry, 574 F.2d 1256, 1262 (5™ Cir.

1978); modified on denial of r’hrg, 583 F.2d 779 (5™ Cir.

1978); Strength v. Hubert, 854 F.2d 421, 425 (11" Cir. 1988)

(stating theoretical basis of and requirements for stating a claim

under § 1983 of conspiracy to violate constitutional rights).

Count V of the Complaint alleges that “Defendants

conspired with Deloitte, Alonso, Baum and possibly others, to

deprive Fiscal and Grigsby of their Constitutional rights by

fabricating false evidence and then using the fabricated

evidence to confiscate Fiscal’s business and property in

60a

violation of the Fourth and Fourteenth Amendments, and to

instigate a capricious indictment, prosecution and seizure of

Grigsby in violation of the Fourth, Fifth and Fourteenth

Amendments.” As Plaintiffs have failed to demonstrate the

denial of their underlying constitutional rights, the conspiracy

claim must be dismissed.

Count VI - Accountants’ Fraud

In order for a plaintiff to satisfactorily allege a case for

fraud, under Florida law, the plaintiff must plead (1) a false

Statement or misrepresentation of material fact, (2) the

representor’s knowledge at the time the misrepresentation is

made that the statement is false, (3) an intention that the

misrepresentation induce another to act, (4) action in justifiable

reliance on the representation, and (5) resulting damage or

_ injury. MeterLogic, Inc. v. Copier Solutions. Inc., 126

F.Supp.2d 1346 (S.D.Fla. 2000).

Count VI of Complaint alleges that Deloitte had a public

responsibility which it violated by fraudulently reversing its

accounting treatment of the crane revenues, at the request of

other Defendants. The Complaint further alleges that Deloitte

reversed its accounting treatment of the crane revenues with

knowledge of its misrepresentations and with the intent of

enabling the other Defendants to use these misrepresentations

to deceive prosecutorial authorities. Assertedly, Plaintiffs were

severely injured by Deloitte’s fraud.

Count VI, however, contains no allegations of

fraudulent statements made by Deloitte to the Plaintiffs, upon

which they relied to their detriment. Further, Plaintiffs have

failed to properly plead their fraud claim as required by Federal

Rule of Civil Procedure 9(b). Rule 9(b) of the Federal Rules of

Civil Procedure provides that “{i]n all averments of fraud or

mistake, the circumstances constituting fraud or mistake shall

6la

be stated with particularity.” Fed. R. Civ. P. 9(b). This rule

“serves an important purpose in fraud actions by alerting

defendants to the ‘precise misconduct with which they are

charged’ and protecting defendants ‘against spurious charges of

immoral and fraudulent behavior.” Durham_v. Business

Management _Assoc., 847 F.2d 1505, 1511 (11" Cir. 1988)

(quoting Seville Indus. Machinery Corp. Vv. Southmost

Machinery Corp., 742 F.2d 786, 791 (3% Cir. 1984), cert.

denied, 469 U.S. 1211, 105 S.Ct. 1179, 84 L.Ed.2d 327 (1985)).

Rule 9(b) may be satisfied if the complaint sets forth: 1)

precisely what statements were made in what documents or oral

representations of what omissions were made, and 2) the time

and place of each such statement and the person responsible for

making (or, in the case of omissions, not making) same, and 3)

the content of such statements and the manner in which they

misled the plaintiff, and (4) what the defendants “‘obtained as a

consequence of the fraud.” Medalie v. FSC Securities Corp., 87

F.Supp.2d 1295, 1306 (S.D. Fla. 2000). Based upon the

foregoing, Plaintiffs’ claim for accountant fraud must be

dismissed.

Count VII - Malicious Prosecution

The tort of malicious prosecution is premised on the

right of an individual to be protected from unjustifiable

litigation or unwarranted criminal prosecution. Against this

right, the need of society to bring criminals to justice by

protecting those who, in good faith, report and legally prosecute

persons apparently guilty of crime must be balanced. The latter

need, in addition to the public policy in favor of the termination

of litigation, dictates the plaintiff's heavy burden of proof..

Burns v. GCC Beverages, Inc., $02 So.2d 1217, 1219 (Fla.

1986).

In order to state a claim for malicious prosecution, a

plaintiff must show 1) the commencement or continuance of an

62a

original criminal civil judicial proceeding, 2) its legal causation

by the present proceeding, 3) its bonafide termination in favor

of the present plaintiff, 4) the absence of probable cause for

such proceeding, 5) the presence of malice therein, and 6)

damage conforming to legal standards resulting to plaintiff.

Buchanan v. Miami Herald Publishing Co., 230 So.2d 9, 11

(Fla. 1969).

The parties do not dispute the existence of three of the

elements required to prove the tort of malicious prosecution: (1)

the commencement and continuation of a criminal judicial

proceedings; (2) its bona fide termination in favor of the

plaintiff, and (3) damages resulting to the piaintiff. A fourth

element, the presence of malice, may be inferred from the

absence of probable cause for such prosecution, the fifth

element. The sixth element, legal causation, requires a showing

that the defendant was in some way responsible for the criminal

prosecution. See Harris v. Lewis State Bank, 482 So.2d 1378,

1381 (Fla. 1* DCA 1986).

Although legal causation is usually established by the

signing of a complaint or affidavit, there is authority for the

proposition that the giving of information may constitute the

initiation of prosecution, if the information was known by the

giver to be false. The real instigator cannot escape liability by

showing he was not the prosecutor of record. The test is

whether the defendant’s action was the proximate and efficient

cause of putting the law in motion. Although one may not have

intended to institute a criminal proceeding, he may be liable if

he afterward continued the prosecution or gave it momentum.

See Harry Pepper & Associates, Inc. v. Lasseter, 247 So.2d 736

(Fla. 3“ DCA 1971), cert. den., 252 So.2d 797 (Fla. 1971).

Plaintiffs charge the Defendants, including Deloitte, with

malicious prosecution, for instigating criminal proceedings

against Plaintiff Grigsby by providing false and misleading

evidence to the investigators and the prosecutors who, in turn,

63a

assertedly misled the grand jury that issued the indictment. The

Complaint, however, contains no allegation that Deloitte

transmitted any information to anyone other than the Port, its

client. The Complaint also fails to allege that Deloitte had any

knowledge that any of the Defendants would communicate with

federal prosecutors. The Complaint only charges Deloitte with

aiding and abetting the County’s effort to instigate the federal

investigation of Grigsby. Plaintiffs’ claim of malicious

prosecution against Deloitte must therefore be dismissed.

CONCLUSION

Based upon the foregoing, it is

~«

ORDERED AND ADJUDGED. that Defendant

Deloitte’s Motion to Dismiss is GRANTED. It is further

ORDERED AND ADJUDGED that this cause is

CLOSED for administrative purposes.

DONE AND ORDERED in Chambers at Miami,

Florida this 30 day of April, 2003.

/s/

Donald L. Graham

U.S. DISTRICT JUDGE

ce: Magistrate Judge Garber

Counsel of Record

64a

APPENDIX E

United States Court of Appeals

FOR THE ELEVENTH CIRCUIT

Calvin Grigsby; and Fiscal

Operations, Inc.,

Plaintiffs-Appellants,

V.

Miami-Dade County, Florida, et

e..

Defendant,

Alex Penelas; Steven B. Bass;

Kathy Jackson; Miriam Alonso;

and Rachel Baum.

Defendants-Appellees.

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

No. 03-12576-II

D.C. No. 01-04798-

CV-DLG

Calvin Grigsby; and Fiscal

Operations, Inc.,

Plaintiffs-Appellants,

V.

Miami-Dade County, Florida,

Defendant-Appellee,

a eae ae ae eee eee

No. 03-12577-II

D.C. No. 01-04798-

CV-DLG

65a

Alex Penelas, et al., )

Defendants. )

Calvin Grigsby; and Fiscal )

Operations, Inc., )

Plaintiffs-Appellants,

V. ‘ No. 03-12578-II

Miami-Dade County, Florida, et : D.C. No. 01-04798-

al.; ) CV-DLG

Defendants,

Deloitie & Touche, L.L.P.,

Defendant-Appellee.

On Appeal from the United States District Court

for the Southern District of Florida

(April 28, 2004)

ON PETITION(S) FOR REHEARING AND PETITION(S)

FOR REHEARING EN BANC

(Opinion , 11" Cir, 19, F.2d ).

Before: TJOFLAT, BARKETT and SILER*, Circuit Judges.

66a

PER CURIAM:

The Petition(s) for Rehearing are DENIED and no Judge in

regular active service on the Court having requested that the

Court be polled on rehearing en banc (Rule 35, Federal Rules

of Appellate Procedure), the Petition(s) for Rehearing en Banc

are DENIED.

ENTERED FOR THE COURT:

/s/

UNITED STATES CIRCUIT JUDGE

*Honorable Eugene E. Siler, Jr., United States Circuit Judge for

the Sixth Circuit, sitting by designation.

ORD-42

(12/01)

67a

APPENDIX F

United States Court of Appeals

FOR THE ELEVENTH CIRCUIT

Calvin Grigsby; and Fiscal )

Operations, Inc., )

)

Plaintiffs-Appellants, )

)

V. ) No. 03-12576

)

Miami-Dade County, Florida, et ) D.C. No. 01-04798-

al., ) CV-DLG

ee

Defendant, )

)

Alex Penelas; Steven B. Bass; )

Kathy Jackson; Miriam Alonso; )

and Rachel Baum. )

)

Defendants-Appellees. )

Calvin Grigsby; and Fiscal

Operations, Inc.,

Plaintiffs-Appellants,

V. No. 03-12577

D.C. No. 01-04798-

CV-DLG

Miami-Dade County, Florida,

Defendant-Appellee,

ae! See” Saat Sait See Nee’ Net See” Nee Nee Nee”

68a

Alex Penelas, et al.,

Defendants.

Calvin Grigsby; and Fiscal

Operations, Inc.,

Plaintiffs-Appellants,

¥,

Miami-Dade County, Florida, et

al.;

Defendants,

Deloitte & Touche, L.L.P.,

Defendant-Appellee.

No. 03-12578

D.C. No. 01-04798-

CV-DLG

Appeals from the United States District Court

for the Southern District of Florida

JUDGMENT

It is hereby ordered, adjudged, and decreed that the

attached 11" Cir. R. 36-1 affirmance without opinion included

herein by reference, is entered as the judgment of this Court.

69a

Entered: March 2, 2004

For the Court: Thomas K. Kahn, Clerk

By: Jackson, Jarvis

ISSUED AS MANDATE

May 06, 2004

U.S. Court of Appeals

Atlanta, GA

70a

APPENDIX G

42 U.S.C. § 1983. Civil action for deprivation of rights

Every person who, under color of any statute, ordinance,

regulation, custom, or usage, of any State or Territory or the

District of Columbia, subjects, or causes to be subjected, any

citizen of the United States or other person with the jurisdiction

thereof to the deprivation of any rights, privileges, or

immunities secured by the Constitution and laws, shall be liable

to the party injured in an action at law, suit in equity, or other

proper proceeding for redress, except that in any action brought

against a judicial officer for an act or omission taken in such

officer’s judicial capacity, injunctive relief shall not be granted

unless a declaratory decree was violated or declaratory relief

was unavailable. For the purposes of this section, any Act of

Congress applicable exclusively to the District of Columbia

shall be considered to be a statute of the District of Columbia.

Tla

APPENDIX H

Fourth Amendment to the U.S. Constitution

The right of the people to be secure in their persons,

houses, papers, and effects, against unreasonable searches and

seizures, shall not be violated, and no warrants shall issue, but

upon probable cause, supported by oath or affirmation, and

particularly describing the place to be searched, and the persons

or things to be seized.

72a

APPENDIX I

Fifth Amendment to the U.S. Constitution

No person shall be held to answer for a capital, or

otherwise infamous crime, unless on a presentment or

indictment of a grand jury, except in cases arising in the land or

naval forces, or in the militia, when in actual service in time of

war or public danger; nor shall any person be subject for the

same offense to be twice put in jeopardy of life or limb; nor

shall be compelled in any criminal case to be witness against

himself, nor be deprived of life, liberty, or property, without due

process of law; nor shall private property be taken for public

use, without just compensation.

KR =

73a

APPENDIX J

Fourteenth Amendment to the U.S. Constitution

Section 1:

Section 2:

All persons born or naturalized in the United

States, and subject to the jurisdiction thereof,

are citizens of the United States and of the state

wherein they reside. No state shall make or

enforce any law which shall abridge the

privileges or immunities of citizens of the

United States; nor shall any state deprive any

person of life, liberty, or property, without due

process of law; not deny to any person within its

jurisdiction the equal protection of the laws.

Representatives shall be apportioned among the

several states according to their respective

numbers, counting the whole number of persons

in each state, excluding Indians not taxed. But

when the right to vote at any election for the

choice of electors for President and Vice

President of the United States, Representatives

in Congress, the executive and judicial officers

of a state, or the members of the legislature

thereof, is denied to any of the male inhabitants

of such state, being twenty-one years of age, and

citizens of the United States, or in any way

abridged, except for participation in rebellion,

or other crime, the basis of representation

therein shall be reduced in the proportion which

the number of such male citizens shall bear to

the whole number of male citizens twenty-one

years of age in such state.

Section 3:

Section 4:

Section 5:

74a

No person shall be a Senator or Represenitative

in Congress, or elector of President or Vice

President, or hold any office, civil or military,

under the United States, or under any state, who,

having previously taken an oath, as amember of

Congress, or as an officer of the United States,

or as a member of any state legislature, or as an

executive or judicial officer of any state, to

support the Constitution of the United States,

shall have engaged in insurrection or rebellion

against the same, or given aid or comfort to the

enemies thereof. But Congress may by a vote of

two-thirds of each House, remove such

disability.

The validity of the public debt of the United

States, authorized by law, including debts

incurred for payment of pensions and bounties

for services in suppressing insurrection or

rebellion, shall not be questioned. But neither

the United States nor any state shall assume or

pay any debt or obligation incurred in aid of

insurrection or rebellion against the United

States, or any claim for the loss or emancipation

of any slave; but all such debts, obligations and

claims shall be held illegal and void.

The Congress shall have power to enforce, by

appropriate legislation, the provisions of this

article.

75a

APPENDIX K

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

MIAMI DIVISION

FISCAL OPERATIONS, INC. Case No. 01-4798

and CALVIN GRIGSBY,

Plaintiffs,

FIRST AMENDED

COMPLAINT

V.

)

)

)

)

)

)

MIAMI-DADE COUNTY, )

FLORIDA, ALEX PENELAS, )

STEVEN B. BASS, KATHY )

JACKSON, MIRIAM )

ALONSO, RACHEL BAUM. )

and DELOITTE & TOUCHE, )

LLP, )

)

)

)

Defendants.

Fiscal Operations, Inc. (“Fiscal”) and Calvin Grigsby

(“Grigsby”), for their Complaint against Defendants Miami-

Dade County (the “County”), Alex Penelas (“Penelas”), Steven

B. Bass (“Bass”), Kathy Jackson (“Jacksen”), Miriam Alonso

(“Alonso”), Rachel Baum (“Baum”), # Deloitte & Touche

(““Deloitte’’) state:

76a

I. NATURE OF THE ACTION

l. Beginning in late 1996 and continuing through

mid-1998, the County, Penelas, Bass, Jackson, Alonso, Baum.

Deloitte, and others orchestrated a course “ action that was

specifically designed and intended to, and did.

(a) crate and utilize a fabricated

pretext to unlawfully terminate an exclusive

franchise previously granted by the County to

Fiscal to operate its business at the Port of

Miami (the “Port”) and to unlawfully terminate

the contract through which the County had

implemented the franchise granted to Fiscal;

(b) seize, by physical force and with

no judicial or other lawful process, all of the

personal property of Fiscal used by Fiscal in the

operation of its business; and

(c) create and utilize fabricated

evidence to instigate a capricious prosecution

of, and the attendant seizure of, Grigsby.

ra Pursuant to 42 U.S.C. § 1983 and the laws of

Florida, Fiscal and Grigsby seek to recover the millions of

dollars in loses sustained by them as the direct result of this

abuse of governmental power by the Defendants and others that

violated the Constitutional rights of Fiscal and Grigsby and

their rights under the laws of Florida in at least the following

ways:

(a) the use by the Defendants of a

fabricated pretext and improper motive to

terminate the franchise and contract rights of

Fiscal was a violation of the due process rights

5 77a

of Fiscal guaranteed to Fiscal by, among other

things, the Fifth and Fourteenth Amendments to

the Constitution of the United States:

(b) the physical seizure of the-

property of Fiscal by the Defendants, in the

absence of any lawful process or compensation,

constituted an unlawful taking of the property of

Fiscal in violation of the rights of Fiscal

guaranteed to it by, among other things, the

Fifth and Fourteenth Amendments to the

Constitution of the United States to be free of

such unlawful taking without just

compensation;

(c) the creation and use by the

Defendants and others of fabricated evidence to

procure the prosecution and seizure of Grigsby

is a Violation of the rights of Grigsby guaranteed

to him by, among other things, the Fourth, Fifth

and Fourteenth Amendments to the Constitution

of the United States to be free of the use of

such fabricated evidence and such capricious

prosecution and improper seizure based upon

fabricated evidence;

(d) deliberate fraudulent

misrepresentation by Deloitte in violation of its

duty to the public and to Fiscal and Grigsby

under the law of Florida enabled the Defendants

to take these predatory actions against Fiscal

and Grigsby; and

(e) the instigation of a malicious

prosecution against Grigsby by the Defendants

violated Grigsby’s rights under the law of Florida.

78a

Il. JURISDICTION AND VENUE

. | This action arises under the Fourth, Fifth, and

Fourteenth Amendments to the Constitution of the United

States and 42 U.S.C. § 1983 and the laws of Florida. This

Court has authority to award damages to Fiscal and Grigsby for

the Constitutional violations under 42 U.S.C. § 1983.

Jurisdiction of the federal causes of action conferred by 28

U.S.C. § 1331. Jurisdiction of the causes of action under

Florida law is conferred by 28 U.S.C. § 1367. Venue is proper

in the Southern District of Florida under 28 U.S.C. § 1391(b).

Ill. PARTIES

4. Fiscal is a private, for-profit corporation

incorporated and domiciled in the State of California. Until it

was unlawfully deprived of its franchise and business by

Defendants, Fiscal managed, maintained, operated and rented

to stevedoring companies the gantry cranes at the Port.

» Grigsby is an individual residing and domiciled

in the State of California. Grigsby is the CEO and President of

Fiscal and has, in addition to his duties with Fiscal, conducted

other substantial business in the County, including the

origination and implementation of financing transactions.

6. The County is a municipal equity whose actions

are directed by a Board of County Commissioners (the

“Board”). The Port is a Department of the County.

7. Penelas is an individual who, at all material

times, was either a County Commissioner or the Mayor of the

County.

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8. Bass is an individual who, at all material times,

was an Assistant County Attorney.

9. Jackson is an individual who, at all material

times, was the Acting Director of, or the Director of, the Audit

and Management Services Department of the County.

10. Alonso is an individual who, at all material

times, was a County Commissioner.

1h. Baum is an individual who, at all material times,

was the Finance Director of the County.

12. Deloitte is a limited partnership with a

nationwide network of offices, including an office in Miami,

Florida. During the material time period, the County and the

Port were audit clients of Deloitte.

13. Other persons who may properly be named as

Defendants may come to the attention of Fiscal and Grigsby

during discovery. Fiscal and Grigsby intend to seek early

discovery to ascertain whether additional Defendants should be

named.

IV. FACTUAL BACKGROUND

A. Summary of _ the

Unlawful Acts of

Defendants

14. As detailed below, Fiscal was awarded the

exclusive franchise to maintain and operate the gantry cranes at

the Port from 1982 through 2002. Pursuant to implementing

contracts with the County, Fiscal maintained and operated the

cranes during this same period (until the County’s unilateral

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termination in 1998), renting the cranes on an hourly fee basis

to the stevedoring companies that loaded and unloaded cargo

ships that docked at the Port.

15. Fiscal sent bills to the stevedoring companies for

the hourly crane rental fees (“Crane User Fees”). The

stevedores paid the Crane User Fees to Fiscal. Until the acts of

Defendants complained of herein, the County, Fiscal, the

independent auditors for the County, the Port, and Fiscal, the

Internal Revenue Service and all others involved treated the

Crane User Fees as the property of Fiscal.

16. In 1996-1998, the Defendants, for the improper

motives detailed below, undertook concerted action to terminate

Fiscal’s franchise to operate its business at the Port, and to

terminate the implementing contract between the County and

Fiscal providing for Fiscal to maintain and operated cranes (the

““Agreement’’).

17. To attempt to justify the Defendants’ actions,

Bass and Jackson, at the direction and request of Penelas,

fabricated a false assertion that Fiscal was a department or

agent of the County and that the Crane User Fees were the

property of the County and hence were “County Money” and

“Public Funds.” At the request of the other Defendants,

Deloitte then altered its audit reports to make them consistent

with this false assertion, overturning several years of previous

audit reports to the contrary, with no accounting justification for

the change.

18. This “County Agency” and “Public Funds”

assertion was not only fabricated, it was patently inconsistent

with all previous positions taken by the County. By way of

example only:

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(a) In pleadings filed in a personal

injury case resulting from an accident involving

the cranes (Smith v. Fiscal, et al., 11" Judicial

Circuit, Dade County, Case No., 94-13750-CA-

02), the County Attorney’s office filed pleadings

specifically denying that Fiscal was an agent for

the County, asserting that Fiscal was an

independent contractor and stating that the only

connection between the injury and the County

was the Agreement between the County and

Fiscal; and

(b) Bass signed a complaint by the

County against the Department of Revenue of

the State of Florida filed October 10, 1996

(Metropolitan Dade County v. Department of

Revenue, 11" Judicial Circuit Dade County,

Case No. 96-20586-CA-04), in an action by

which the County sought to avoid liability for

sales taxes on the Crane User Fees, in which the

County disavowed custody and control of the

cranes and any interest in the Crane User Fees

stating:

“30. The County has

contractually relinquished

custody of the gantry cranes to a

management company for the

purposes of leasing the cranes to

stevedoring companies...”

26 KK

44. ... the Department

already collects a sales tax on

the gantry cranes when the

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stevedoring company leases the

cranes from [Fiscal]”

19. Based upon their sham “County Agency” and

“Public Funds” assertion, the Defendants accused Fiscal and

Grigsby, in public and private meetings, in civil liti gation, and

in communications with investigators of the United States

Attorney’s office, of stealing Public Funds by making

expenditures not directly related to the operation of the cranes.

20. The Defendants invented “evidence” to

bootstrap their sham “County Agency” and “Public Funds”

assertion in the following ways, among others:

(a) Bass repeatedly advised the

Board and other County officials that the Crane

User Fees were “County Money” and “Public

Funds”;

(b) Jackson prepared an “audit”

repeatedly stating that the Crane User Fees were

“Public Funds” that had been misappropriated

by Fiscal; and

(c) Jackson, Baum, Bass and others

induced Deloitte to reverse its longstanding

accounting treatment of the Crane User Fees as

the property of Fiscal and to switch to a

treatment which would support the Defendants’

new assertion that the fees were county

property, even though there was no accounting

basis for the switch. :

21. —_ Using this false assertion and the evidence they

had fabricated to support it, Penelas, Bass and Jackson induced

the County Manager to seek authority from the Board to

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terminate Fiscal’s franchise and the implementing contract,

falsely stating that Fiscal was stealing Public Funds.

22. The Defendants also used the sham “County

Agency” and “Public Funds” assertion and fabricated

supporting evidence to procure the capricious indictment and

federal prosecution of, and the improper seizure of, Grigsby.

The Defendants falsely advised agents of the United States

Attorney’s Office that Grigsby had stolen “public funds”

exploiting their exclusive and superior knowledge of the

underlying relationship and arrangement between Grigsby and

the County to hide the true nature and history of that

relationship and arrangement from the federal agents. In effect,

the federal agents knew only the self-serving information that

the Defendants chose to share and were not shown the pertinent

facts which would expose the falsity of their “theft of public

funds” charge.

23. The arbitrary reversal of the treatment of the

Crane User Fees by Deloitte in its audit of the Port was

particularly egregious and damaging to Fiscal and Grigsby. In

its audit reports covering at least 1990 through 1995, Deloitte

stated that operating revenues of the Port included “‘[i]tems of

income...relating to wharfage, dockage, rental, ground

transportation, water and electric sources and miscellaneous

port services are classified as operating revenues...” Crane

User Fees were not included as items of revenue to the Port.

24. ‘In 1998, at the request of the other Defendants

but with no accounting basis for its action, Deloitte simply

“restated” the 1995 financial statements of the Port to treat the

Crane User Fees as revenues of the Port and to completely re-

characterize the financial arrangement of the parties as an

agency arrangement, to support the fabricated “County Agency”

and “Public Funds” assertion. Operating revenues of the Port

were now said to include “[I]tems of income... relating to

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wharfage, dockage, crane usage, rental, ground transportation.

water and electric services, and miscellaneous port services are

-Classified as operating revenues...” [emphasis added].

25. If Deloitte has not capitulated to the other

Defendants’ request to change its accounting treatment in this

arbitrary manner, the other Defendants likely would not have

taken the predatory actions which followed shortly thereafter,

which depended entirely on the new fabricated assertion that the

crane revenues belonged to the County.

B. Fiscal and Grigsby

Become Targets of the

County’s Corrupt

Practices

26. ~ For many years, the Commissioners of the

County and other County employees and representatives have

used the Port of Miami (as well as Miami International Airport)

as an “off-book” source of political contributions, jobs for

relatives and friends, money to pay for social events and parties,

and favors of all kinds. Private contractors who perform

services at the Port (and at the Airport) have been constantly

pressured to contribute portions of their revenues to support the

demands of elected and appointed officials for these “‘off-book”

benefits. This has become a cost of doing business with the

County.

27. __ Fiscal and Grigsby became targets of this public

corruption when they began to operate a business at the Port in

1982. The involvement of Fiscal and Grigsby with the County

and the Port grew out of an opportunity the County perceived

in the late 1970's to develop a major cargo handling business at

the Port to complement the cruise ship business at the Port. To

enable the County to proceed with this opportunity under the

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best financial circumstances, Grigsby, in response to a County

Request for Proposals for financing structures, created and

implemented an innovative bond financing program for the

County, that, among other things, called for private ownership

and operation of the gantry cranes. When the private entity

originally designated to maintain and rent the cranes backed out

of the program, Grigsby formed Fiscal to take on the

management, maintenance, operation and rental of the gantry

cranes. In 1982 the County granted Fiscal a twenty-year

exclusive franchise (1982-2002) to maintain, operate and rent

to stevedores the cranes at the Port, which arrangement was

implemented through an operating contract, which also had an

initial term of 1982-2002.

28. In reliance on the twenty-year franchise and the

implementing Agreement, Fiscal and Grigsby invested

considerable time and resources in obtaining and developing the

expertise, personnel, equipment, and suppliers necessary to

assure a successful long-term future for Fiscal’s operation.

Among other things, Fiscal and Grigsby retained the necessary

top managers for the crane operation and brought them to

Miami, located and established relationships with the necessary

suppliers, trained and employed all union personnel necessary

to run the crane operation, developed and put into effect all of

the business methods necessary to run the crane operation at top

efficiency and effectiveness, developed a full set of procedure

manuals for use in the operation, purchased the necessary

equipment to run the operation, went without compensation or

profits for several years during a lengthy start-up period, and

assumed responsibility for repayment (under certain

circumstances) of all of the County’s initial start up advances

made pursuant to the Agreement by the County to Fiscal.

29. Fiscal and Grigsby made these substantial

investments in time and resources because they anticipated that,

under their fixed-fee Agreement with the County, Fiscal would

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be able to earn a profit on its operations during the latter part of

the twenty-year term, after repaying the Start-up operating

advances made by the County to Fiscal in the early years of the

alrangement.

30. __ In addition to the considerable business risks

involved in this demanding project, Fiscal and Grigsby were

also subjected to the full brunt of the County’s corrupt

practices. During the entire period that Fiscal and Gri gsby were

developing the crane operation, the County pressured Fiscal to

use Fiscal's revenues, primarily the Crane User Fees, for a

variety of purported civic and promotional events and parties,

to put County employees on Fiscal's payroll, to provide cars for

County employees, to pay for political consultants to the

County Mayor, to make political contributions, and to pay for

a wide variety of parties, civic events, meals, drinks and other

entertainment for the benefit of County Officials. The pressure

on Fiscal was typically applied by County officials whenever

the County ran low on County or Port budgeted “promotional

funds” or did not want particular expenditures to be discussed

in public meetings. Penelas and Alonso, each of whom chaired

the County Commission’s Maritime and Trade Committee

during Fiscal's tenure, were aware of this pattern of corrupt

activity and were specifically aware that Fiscal and Grigsby

were among the private businesses at the Port that were targeted

by the County for these payments.

31. Because Fiscal fully documented and reported to

the County each of its expenditures, including each such

expense that the County imposed on it, all involved County

representatives were fully aware of the subject expenditures by

Fiscal, as was Deloitte, the independent auditor for the County

and for the Port.

32. Allinvolved County officials and auditors, both

internal and external, also knew that Fiscal would have to use

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its own funds to satisfy such demands by the County. The

regulatory framework within which the County operates does

not allow the use of County Money (i.e., “Public Funds’) for

the types of expenses the County required Fiscal to make, and

it is unlawful for the County to spend money without formal

appropriation and inclusion in a budget after a public hearing.

33. Deloitte specifically knew that any such

expenditures would have to come from Fiscal’s own funds.

Pursuant to the implementing contract, as it was revised in

1988, Fiscal was entitled to an annual fixed fee (negotiated

annually) for its work and to the revenues (called Excess Usage

Fees) generated by the operation of the cranes in excess of a

fixed number of hours per year. Fiscal agreed to apply the

Excess User Fees initially toward repayment of the operating

advances that the County had made to Fiscal; Fiscal was

entitled to keep the Excess User Fees once the advances had

been repaid. Deloitte’s audit reports for many years accurately

reflected these financial arrangements and treated the Crane

User Fees as the property of Fiscal.

C. The County Seizes

Fiscal’s Business and

instigates a Capricious

Prosecution and

Seizure of Grigsby,

Using Deliberately

Fabricated Evidence :

34. In 1992, financial projections endorsed by the

County and made available to Fiscal and the County indicated

that Fiscal would become a profitable business under the

Agreement before the end of the initial twenty year term of the

franchise and the implementing contract (2002).

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35. In late 1995 and early 1996, the County’s Audit

and Management Services Department was engaging in a

debate with the Port Director about Fiscal’s business, indicating

the desire of the County to take control of the financial aspects

of Fiscal’s business, purportedly to improve the County's cash

flow and financial position. The Port Director’s response to the

inquiries of the internal County auditors was that Fiscal was

Eroperly performing its functions in accordance with the

Agreement and that Fiscal was a private company legally

entitled under the implementing contract and otherwise to

handle its own money and bank accounts. Fiscal’s performance

under the Agreement could not seriously be questioned, in as

much as, in 1994, Fiscal had received a public commendation

from the County for Fiscal's exceptional performance under the

Agreement.

36. During the latter part of 1996, County officials

who wished to take control of Fiscal’s business were presented

with both an opportunity and a major threat. The Miami Herald

ran a series of articles suggesting corruption in the County’s

administration of the Port and focusing particularly on the types

of expenditures described in paragraph 31 above that Fiscal had

made in response to County demands. This publicity coincided

with the election of Penelas to the position of mayor and the

institution of a strong mayor system in the County. Penelas,

aware that the County's corrupt activity at the Port was now

“the subject of public inquiry,” directed, on November 18,

1996, that the County Manager obtain a special “audit” of

Fiscal's business. The responsibility for the audit was passed to

Jackson, then Acting Director of the County's Audit and

Management Services Department.

37. This order for a special audit of Fiscal's business

was duplicitous. Penelas had been a County Commissioner,

had chaired the Maritime and Trade Committee, and knew very

well that the County had imposed expenditures of the type

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described above on Fiscal and other private contractors at the

Port for many years. Penelas also knew that such expenditures

would have to have been made from Fiscal’s own funds,

because the regulatory framework would not permit the County

to make such expenditures from Public Funds. Penelas did not

order this special audit to discover anything about Fiscal.

Penelas ordered the audit to lay a framework for taking action

against Fiscal and Grigsby (including the prosecution of

Grigsby), to deflect public attention from the County’s own

corrupt activities at the Port, and to obtain the extra benefit of

getting proprietary control of the business that Fiscal had

developed over many years.

38. Acting rapidly on Penelas’ order, Jackson, with

the assistance of Bass, Baum, Deloitte and others, began in

December 1996 to demand every accounting and financial

document that Fiscal had ever generated. These burdensome

document demands were also duplicitous, since the County

already had both Fiscal’s comprehensive accounting

information describing each and every expenditure, including

all of the types of expenditures which Jackson was allegedly

investigating (most of which were imposed by the County), and

Fiscal’s annual financial statements that had been reviewed by

CPA’s, separately audited in some years, and provided to the

County. Fiscal nevertheless did its best to comply with the

demands for voluminous documents.

39. For purely tactical purposes and to put added

public pressure on Fiscal, the County filed in February 1997, a

wholly unnecessary Public Records Act action (Metropolitan

Dade County v. Fiscal, 11" Judicial Circuit, Dade County, Case

No. 97-04449 CA 32) against Fiscal, seeking to have Fiscal

declared to be “a public agency.”

40. During this same time period (early 1997), the

Defendants enlisted Deloitte in their campaign against Fiscal

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and Grigsby. Deloitte, which had been auditing the Port’s

financial statements for approximately twelve years, actively

worked with Jackson, Bass, Baum and others in pressuring

Fiscal for extensive unnecessary documents. Deloitte also

began to confer with Jackson, Bass, Baum and others with

respect to a change in Deloitte’s accounting treatment of the

Crane User Fees to support the Defendants’ emerging plan to

use allegedly improper expenditures of “Public Funds” as a

pretext to seize Fiscal’s business and to procure the indictment

and seizure of Grigsby. To facilitate this scheme, Deloitte

agreed to delay its audit for fiscal 1996 -- an audit which would

normally have been completed in J anuary of 1997 -- in order to

co-ordinate its audit report with the special audit that Jackson

was preparing at Penelas’ direction and with Bass’ assistance

and input.

41. With its audit report for fiscal 1996 on hold,

Deloitte began to pressure the Controller of the Port, Richard

Myers, to change the Port's own statement of revenues and

expenses to treat the Crane User Fees paid to Fiscal by Fiscal’s

customers as “County Money” and “Public Funds.” Myers

properly refused to make this change, after many years of

reporting the Crane User Fees as the property of Fiscal, because

there was no accounting justification for the change. In March

1997, Myers wrote in a file memorandum that “I’ve told them

[Deloitte] I won’t book this entry until I receive written

documentation that shows objective criteria they used as a

basis.” Deloitte persisted in trying to force the change, but was

never able to provide an accounting justification for the change.

In September, 1997, Myers wrote in a memorandum to Blanca

Padron of the County’s Finance Department “we should require

[Deloitte] to reverse their entry to ‘gross up’ the crane revenues

and expenses unless they provide us with the support for the

entry. I have made this request to Deloitte at least 10 times.”

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42. Meanwhile, on May 21, 1997, Alonso, Chairman

of the Maritime and Trade Committee ofthe Board, convened

a special meeting of that committee. Alonso was the only

Commissioner present. Also present were Bass, the County

Manager, several assistants and clerks, and three representatives

of Deloitte. This meeting was not an honest attempt to obtain

information previously unknown in order to protect the public

interest. This meeting was another calculated step further

setting the stage for action to terminate the franchise held by

Fiscal, to terminate the implementing contract, to seize Fiscal’s

entire business just as it was about to become profitable, to

make Grigsby a scapegoat in order to deflect attention away

from the misbehavior of the County’s own officials, and to

procure an indictment and seizure of Grigsby.

43. During this meeting, Alonso brought up the

Fiscal/County arrangement with Bass, providing Bass with a

platform to present the Defendants’ fabricated assertion that

Fiscal’s expenditures constituted the theft of “Public Funds.”

Bass falsely stated that the Crane User Fees were County

Money that had been misappropriated by Fiscal.

44. On June 10, 1997, Jackson prepared a

memorandum to the County Manager titled “Gantry Crane

Operation Alternatives,” stating that “three management

alternatives appear desirable.” Jackson's special audit was not

anywhere near completed at that point, but it was obvious that

the Defendants had a predetermined goal to take Fiscal’s

business: all of the “alternatives” involved eliminating Fiscal

and either replacing Fiscal with another company or taking over

the operation directly, despite the fact that Fiscal’s exclusive

franchise and the implementing contract, did not expire until at

least 2002.

45. Further increasing the pressure, the County filed

a breach of contract action against Fiscal, Grigsby and other

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individuals in July of 1997 (Metropolitan Dade County v. Fiscal

et. al, 11" Judicial Circuit, Dade County Case No. 97-15083-

CA-32, the “Civil Action”), relying principally on the fabricated

allegations of theft of “Public Funds”.

46. Applying additional pressure, in September

1997, Bass and Jackson, acting through a subordinate, Pedro

Velar, fabricated an unrealistically low proposal for the annual

fixed fee to be paid to Fiscal for the next fiscal year. The

County’s proposal was about half the amount of the annual

fixed fee previously agreed to, about half the size of

competitive bids that were later received by the County to do

Fiscal’s job, and about half what the County actually paid to a

new operator after it unlawfully seized Fiscal's entire business

in 1998.

47. Further increasing the pressure to drive Fiscal

and Grigsby out, Jackson and Bass, working with Jackson’s

assistant, Ann Lee, presented the Federal Bureau of

Investigation and other representatives of the United States

Attorney’s Office with fabricated evidence that Grigsby had

used “County Money” and “Public Funds” to make

unauthorized expenditures not directly related to crane

operations, thereby, they alleged, stealing County money. This

fabricated evidence resulted in the capricious prosecution of

Grigsby for theft of public funds and the attendant seizure of

Grigsby.

48. | When the Defendants fed this charge to the

federal authorities, they had exclusive and superior knowledge

of the design and history of the underlying

franchisee/independent contractor relationship between Grigsby

and the County -- information which would have demonstrated

to the federal investigators that the “public funds” assertion was

false. Instead of presenting this information honestly, they

withheld the pertinent facts and gave the authorities only

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selective information, thereby misleading the investigators and

the prosecutors, who then misled a grand jury. This produced

a Capricious prosecution that was doomed to fail eventually but

achieved the Defendants’ immediate goal of severely damaging

Grigsby and deflecting attention from the corruption of their

own organization.

49. On January 16, 1998, Jackson produced the

special audit of Fiscal that Penelas had directed, with the

conclusions and recommendations that Penelas wanted. Using

the fabricated “Public Funds” assertion as the foundation,

Jackson stated that Fiscal had “misspent public funds.” Further,

Jackson recommended that the County “immediately sever its

relationship with [Fiscal]” and further stated that the County

should “assume immediate control of the operation,” while

seeking a replacement for Fiscal.

50. _Jackson’s report falsely stated that “Public

Funds” were spent for political contributions, professional

services of no value, meals and entertainment with no business

purpose, and personal items. The report did not disclose that

any such expenditures were made by Fiscal out of its own

funds, usually in response to County demands, and were

documented and fully disclosed by Fiscal to the County. The

report also did not disclose that Penelas and Alonso had both

chaired the Maritime and Trade Committee during Fiscal’s

tenure and were both well aware of the manner in which County

officials took advantage of Fiscal and others working at the Port

to obtain funds for a wide range of purposes not directly related

to their business.

51. On February 20, 1998, Deloitte issued its long-

delayed audit report of the Port for fiscal 1996. With no

supporting accounting justification, this audit report simply

“restated” the Port’s 1995 financial statements solely to support

the Defendants’ theft of “Public Funds” assertion and the

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prosecution of Grigsby. The restated audit report, contrary to

Deloitte’s audit reports for many years to the contrary, treated

the Crane User Fees as “County Money.” The audit report also

changed, from $2,400 to in excess of $6 million, the amount of

federal funds received by the Port in 1995, for no reason other

than to provide a jurisdictional prerequisite for the prosecution

of Grigsby under 18 U.S.C. §666. These same altered

accounting treatments were applied to the 1996 financials of the

Port as well.

52. In the spring of 1998, armed with Jackson’s

internal audit report and Deloitte’s now restated audits, the

Defendants took matters into their own hands. In an exercise of

pure power, without waiting for the niceties of the Civil Action

to be concluded, the County issued a notice of default and then

unilaterally terminated the franchise and the implementing

contract. On April 21, 1998, a new County Manager (who had

assumed the position approximately one month previously) was

given a resolution to present to the Board, approving the

termination of the franchise and the implementing contract.

The resolution was sponsored by Alonso, prepared by other

Defendants, and approved as to form and legal sufficiency by

Bass. The resolution referred to Jackson's January 16, 1998

audit report as having “found, among other things,

‘mismanagement of the County's gantry crane operation,

wasteful and abusive spending practices, [and] undocumented

and unauthorized transactions....’”” The resolution also stated “it

is believed that Fiscal is currently retaining hundreds of

thousands of collected user fees belonging to the County, in _

violation of contract requirements.” Noting Jackson’s

recommendation that the County assume control of the crane

operation “as soon as practical,” the resolution directed the new

County Manager to do so. To support the resolution, the new

County Manager was also given a memorandum, prepared by

the Defendants, recommending approval of the resolution to

terminate the Agreement. That memorandum contained several

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material misrepresentations, designed to support the

Defendants’ theft of “Public Funds” assertion.

53. With this background, the County

Commissioners passed the resolution. Penelas, of course, did

not veto.

54. On May 18, 1998, acting in accordance with

Jackson’s statement that “the County should take immediate

control of the operation,” but with no judicial process of any

kind, the County physically seized Fiscal’s entire business,

including the personal property and other assets of Fiscal, and

began to run the business for its own benefit. Shortly thereafter

(on May 28, 1998), the indictment of Grigsby which the

Defendants had procured with false evidence issued.

55. The indictment produced a judgment of

acquittal, entered June 7, 1999, at the close of the

Government’s case, which exposed the falsity of the evidence

the Defendants had fabricated and provided to secure the

indictment. The judgment concluded that, viewing the evidence

in the light most favorable to the Government, the alleged

improper expenditures by Fiscal and Grigsby could not possibly

have involved the expenditure or theft of “County Money” or

“Public Funds” belonging to the County. The judgment

specifically stated that the “Public Funds” assertion “ignores

established principles of agency, the terms of the 1988

Agreement, the manner in which both Fiscal and the County

treated and reported the revenues, and Florida law pertaining to

obligations under acontract.” The judgment also detailed many

examples of the role of County officials in directing most of the

alleged improper expenditures that the Defendants used as a

pretext to seize Fiscal’s business and to instigate the

prosecution.

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56. This entire scheme to appropriate Fiscal’s

business and instigate a capricious prosecution and seizure of

Grigsby was organized, directed, and sanctioned by the

Defendants, who abused broadly delegated uncircumscribed

power over the Port to deprive Fiscal and Grigsby of their

Constitutional rights, in a deliberate manner with predictable

results. This was not a series of random, unauthorized acts by

wayward employees.

57. The Defendants’ actions were not reasonable

when measured by any objective legal standard and violated

clearly established Constitutional rights of Fiscal and Grigsby,

-about which a reasonable person would have known. The

County Defendants knew, at all relevant times, that they had

deliberately fabricated the “Public Funds” assertion that they

used as a pretext for terminating Fiscal's franchise and the

implementing contract. They also know, at all relevant times,

that they had no legitimate basis for seizing Fiscal’s business

and property and instigating a prosecution and seizure of

Grigsby. The Defendants’ predatory actions are explainable

only as calculated actions intended to take proprietary control

of a private business which did not belong to them and to

deflect attention away from the improper activities of elected

and appointed County officials by setting up a scapegoat. For

its part, Deloitte knew that it had no accounting justification for

reversing its accounting treatment of the crane revenues and

knew that it was “restating” its treatment at the request of the

County to assist the County in taking these predatory actions

against Fiscal and Grigsby.

58. Fiscal and Grigsby have been severely injured by

these Constitutionally impermissible actions. Fiscal has been

deprived of an entire business and all of the assets that it

developed to conduct that business. Grigsby has been subjected

to extreme harassment and intimidation, loss of personal control

over his life and business, severe harm to his reputation, loss of

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business and employment opportunities and the severe financial

and emotional strain of preparing and presenting a defense to

the fabricated charges. In carrying out this abuse of power for

these improper motives, the Defendants were motivated by

malice and acted with reckless indifference to the

Constitutionally-protected rights of Fiscal and Grigsby.

V. CAUSES OF ACTION

COUNT 1

DENIAL OF DUE PROCESS

(FIFTH AND FOURTEENTH AMENDMENTS)

(Fiscal v. All Defendants)

59. The allegations of Paragraphs 1 through 58 are

incorporated here by reference.

60. Defendants’ actions in (a) unilaterally

terminating Fiscal’s twenty-year exclusive franchise and the

implementing contract, and (b) and seizing Fiscal’s business

assets were undertaken for improper motives unrelated to any

legitimate governmental purpose and were carried out by means

that were pretextual and arbitrary and capricious. The

Defendants’ actions were motivated by bias and bad faith and

were taken by the Defendants for the illegitimate purposes of

increasing their proprietary control of the Port and taking

unwarranted public action against Fiscal in order to deflect

attention away from the improper activities of County officials.

The reason that the Defendants gave for terminating the

franchise and seizing Fiscal's business -- theft of “Public

Funds” -- was fabricated and pretextual.

61. | The Defendants knew that the “County Agent”

and “Public Funds” assertion which they used in order to

terminate the franchise and the implementing contract for

98a

alleged theft of Public Funds was a false charge which they

deliberately fabricated in order to take these illegal actions. The

Defendants also knew that the bulk of the unauthorized

expenditures that they cited were expenditures that County

officials themselves had procured, either directly or indirectly.

Defendants also knew that Fiscal’s performance under the

franchise had been exemplary and that there was no

performance based reason for terminating the franchise.

62. The Defendants’ actions were unreasonable by

any objective standard. Fiscal had a clearly established legal

right to retain its franchise, its rights under the implementing

contract, and its business assets free of predatory governmental

confiscation unrelated to any legitimate governmental purpose

and carried out by dishonest and pretextual means.

63. Fiscal has been severely injured by this violation

of its due process rights, and it is entitled to an award of

compensatory damages from each of the Defendants, according

to proof, in amounts to be established at trial.

64. —_Intaking their egregious actions, the Defendants

were motivated by malice and acted with reckless indifference

to the Constitutional rights of Fiscal, and Fiscal is entitled to an

award of punitive damages, from each of the Defendants,

according to proof, in amounts to be established at trial.

COUNT 2

TAKING WITHOUT JUST COMPENSATION

(FIFTH AND FOURTEENTH AMENDMENTS)

(Fiscal v. All Defendants)

65. The allegations of Paragraphs 1 through 58 are

incorporated here by reference.

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66. In addition to terminating the franchise and the

Agreement, the Defendants denied Fiscal’s management access

to Fiscals own secure, fenced work area, using posted armed

security guards to prevent access. The Defendants then took

possession of Fiscal’s procedure manuals, appropriated Fiscal’s

business methods, and began using over $1,000,000 worth of

Fiscal’s tools, spare parts, and equipment, without any

compensation to Fiscal.

67. This seizure of Fiscal’s operating assets -- an

outright physical invasion backed by police power -- was

carried out by the Defendants so that the County could start

managing the gantry cranes for its own account with private

(i.e., Fiscal’s) assets, without paying anything for those assets.

By their actions, the Defendants unfairly and unjustly forced

Fiscal to bear a public burden which should have been borne by

the County as a whole and unjustly interfered with Fiscal’s

reasonable investment-backed expectations in developing its

business assets for its own use.

68. | The Defendants did not provide any procedure

by which Fiscal could seek just compensation for this unlawful

taking of its property.

69. The Defendants’ actions in taking Fiscal’s

property were unreasonable by any objective standard.

Regardless of whether the franchise and the implementing

contract were still in effect, Fiscal had a clear legal right to

retain its own personal property for its own use and to be free

from governmental confiscation of its property for public use

without compensation.

70. Fiscal hasbeen severely injured by this unlawful

taking, and it is entitled to an award of compensatory damages

100a

from each of the Defendants, according to

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