Borecki v. Safeguard Security and Communications Incorporated et al

Filing 10

ORDER Plaintiff's Motion to Permit Filing of Administrative Record in Portable Document Format on Compact Disc (Doc. 3 ) is dismissed as moot. Defendant's Motion to Dismiss (Doc. 6 ) is granted. Plaintiff will pay Defendants' costs, but attorney's fees will not be awarded. The Clerk of Court is directed to terminate this action. Signed by Judge G Murray Snow on 4/17/2012.(KMG)

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WO

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Plaintiff,
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vs.
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Safeguard Security & Communications,)
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Inc. et al.,
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Defendants.
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Henryk S. Borecki,

No. CV-11-1983-PHX-GMS
ORDER

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Pending before the Court are Plaintiff’s Motion to Permit Filing of Administrative

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Record in Portable Document Format on Compact Disc (Doc. 3) and Defendant’s Motion to

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Dismiss. (Doc. 6). For the reasons discussed below, Defendant’s motion is granted and

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Plaintiff’s motion is dismissed as moot.

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BACKGROUND

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From March 22, 2006 through July 30, 2010, Plaintiff worked as an Access Control

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Officer for Defendant Safeguard Security & Communications, Inc. (“Safeguard”) at the

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Landmark Condominium in Phoenix, Arizona. (Doc. 1-1 at 9–12). Safeguard fired Plaintiff

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early in the morning on July 30, 2010. (Doc. 1 ¶ 1).

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Plaintiff filed for unemployment insurance, and an administrative hearing was held

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on October 15, 2010. (Doc. 1 ¶ 16). According to the complaint, at the hearing, Defendants

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testified falsely, produced forged documents, and concealed Plaintiff’s annual performance

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reviews, which documented an “exemplary and unblemished” previous record with

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Safeguard. (Doc. 1 ¶ 18–19).

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The complaint contains two claims for relief. In Claim One, Plaintiff seeks

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compensation under 42 U.S.C. § 1983 (2006), alleging that Defendants deprived him of his

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constitutional rights of Due Process and Equal Protection, his right to a fair hearing, and his

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right to unemployment insurance. (Doc. 1 ¶¶ 20–21). In Claim Two, he seeks compensation

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for “Outrageous and Contumacious Fraud,” alleging that Defendants made statements and

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submitted documents at the hearing that they knew were false, that they intended to deceive

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the administrative law judge (“ALJ”) at the hearing, that the ALJ was in fact deceived, and

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that Defendant was damaged as a result. (Doc. 1 ¶¶ 22–26).

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DISCUSSION
I.

Legal Standard

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To survive dismissal for failure to state a claim pursuant to Federal Rule of Civil

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Procedure 12(b)(6), a complaint must contain more than “labels and conclusions” or a

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“formulaic recitation of the elements of a cause of action”; it must contain factual allegations

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sufficient to “raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly,

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550 U.S. 544, 555 (2007). When analyzing a complaint for failure to state a claim under Rule

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12(b)(6), “[a]ll allegations of material fact are taken as true and construed in the light most

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favorable to the non-moving party.” Smith v. Jackson, 84 F.3d 1213, 1217 (9th Cir. 1996).

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However, legal conclusions couched as factual allegations are not given a presumption of

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truthfulness, and “conclusory allegations of law and unwarranted inferences are not sufficient

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to defeat a motion to dismiss.” Pareto v. FDIC, 139 F.3d 696, 699 (9th Cir. 1998).

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II.

Analysis

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Defendant’s two claims will be discussed in turn.

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A.

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Section 1983 of Title 42 of the U.S. Code provides a cause of action for persons who

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have been deprived their constitutional rights by persons acting under color of law. Section

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1983 “is not itself a source of substantive rights” but only provides a cause of action “for

Section 1983

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vindicating federal rights elsewhere conferred.” Baker v. McCollan, 443 U.S. 137, 144 n.3

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(1979).1 Ordinarily, private actors cannot be liable in § 1983 cases because the “under color

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of law” requirement applies only to public officials or others “clothed with the authority of

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state law.” West v. Atkins, 487 U.S. 42, 49 (1988) (internal quotation omitted). Private actors

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may meet the state action requirement, however, when they are “jointly engaged with state

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officials in the challenged action.” Dennis v. Sparks, 449 U.S. 24, 27–28 (1980) (holding that

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a party who bribed a judge was acting under color of state law because the outcome of the

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hearing was “the product of a corrupt conspiracy” between the party and the judge).

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Here, Plaintiff alleges that Defendants testified falsely, produced fabricated

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documents, and concealed relevant documents at Plaintiff’s unemployment hearing. (Doc.

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1 ¶¶ 20–21). He does not allege that Defendants acted in concert with the administrative law

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judge, or that the outcome of the hearing was the product of a conspiracy between the

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administrative law judge and the Defendants. He claims that Defendants intended to deceive

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the administrative law judge when they presented false testimony, and that the administrative

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law judge would not have ruled in Defendants’ favor had he known that their representations

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were false. (Doc. 1 ¶¶ 22–25). Plaintiff claims that when they testified, Defendants were

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“acting under the color of the Arizona Revised Statutes governing the dispensation of

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unemployment compensation.” (Doc. 1 ¶ 21). As Defendants note, “[i]t is beyond question

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that, when a private party gives testimony in open court in a criminal trial that act is not

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performed ‘under color of law.’” Briscoe v. LaHue, 460 U.S. 325, 330 (1983). Although the

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language in Briscoe is specific to criminal trials, the principle is broad—when a private actor

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takes action within the framework of a public tribunal, those actions are not taken “under

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color of law” merely because the tribunal is legally authorized. Cf. Polk Cty. v. Dodson, 454

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U.S. 312, 324 (1982) (Public defender does not act under color of state law “in exercising

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her independent professional judgment in a criminal proceeding”). Plaintiff argues that the

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Plaintiff does not explain in his complaint how his right to state unemployment
benefits gives rise to a § 1983 claim for the depravation of a federal right.
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fact that the Arizona legislature has criminalized making false statements during an

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employment hearings has “overturn[ed] and displace[d] the common law rule” set forth in

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Briscoe. (Doc. 8 at 8, citing A.R.S. § 23-786). Briscoe discusses the common law in

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connection with its holding that police officers—who do act under color of law when they

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testify at criminal trials—are afforded absolute immunity from suits for damages based on

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such testimony. See Briscoe, 460 U.S. at 336–38. The holding that private actors do not act

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under color of law when they testify was based on a statutory interpretation of Section 1983,

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and is not disturbed by criminal perjury statutes.2

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B.

Fraud

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“A showing of fraud requires (1) a representation; (2) its falsity; (3) its materiality;

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(4) the speaker’s knowledge of its falsity or ignorance of its truth; (5) the speaker’s intent that

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it be acted upon by the recipient in the manner reasonably contemplated; (6) the hearer’s

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ignorance of its falsity; (7) the hearer’s reliance on its truth; (8) the right to rely on it; (9) his

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consequent and proximate injury.” Echols v. Beauty Built Homes, Inc., 132 Ariz. 498, 500,

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647 P.2d 629, 631 (1982). Plaintiff contends that the allegedly false testimony constituted

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fraud because Defendants knew it was false and because the administrative law judge relied

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on the testimony’s truth when ruling to Plaintiff’s disadvantage. (Doc. 1 ¶¶ 22-26). Plaintiff

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notes that the elements of fraud require that “the hearer” be deceived, and contends that his

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claim may proceed even though the administrative law judge, rather than Plaintiff, was

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deceived by the statements, since the administrative law judge was “the hearer” of the false

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statements. (Doc. 9 at 10). If Defendants engaged in fraud by deceiving the ALJ, however,

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Plaintiff would not merely be required to show that the ALJ relied on the statement but also

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show “his consequent and proximate injury.” Echols, 132 Ariz. at 500. Plaintiff does not

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Indeed, perjury was a crime long before Briscoe was decided. See Briscoe, 460 U.S.
at 339 n.22 (discussing history of “the imposition of criminal liability on persons for
conspiracy to give false evidence”).
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allege that the ALJ was damaged by relying on the false statement.3 Plaintiff claims that

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Defendants deceived the ALJ, and that Plaintiff was subsequently injured. These facts do not

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state a fraud claim.4

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Plaintiff claims that Defendants deceived a third party, and that Plaintiff was injured

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when the third party relied on the truth of Defendants’ statements. Even if true, these facts

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would not state a claim for fraud, and Claim Two is dismissed.

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C.

Other Matters

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Plaintiff has moved for permission to file the administrative record in a digital format.

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(Doc. 3). Plaintiff’s claims cannot succeed because he has filed a § 1983 suit against private

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parties who were not acting under color of law and because he has failed to allege the

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elements of fraud. The Court therefore need not review the administrative record in this case.

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Plaintiff’s motion is dismissed as moot.

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Defendants have asked the Court to strike references in Plaintiff’s prayer for relief to

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antiquated means of resolving disputes, such as trial by personal combat and Elizabethan-era

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punishments for forgery. (Doc. 6 at 13). These references may be irrelevant to Plaintiff’s

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complaint, but are not “impertinent and scandalous” and need not be struck. FED. R. CIV. P.

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12(f). Likewise, Defendants have asked this court to award attorney’s fees, and have included

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documentation detailing Plaintiff’s previous challenges, including appeals of the

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administrative hearing and state court litigation. (Doc. 7). Although Plaintiff’s complaint is

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hereby dismissed, Defendants have not presented “clear and convincing evidence that the

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claim or defense constitutes harassment, is groundless and is not made in good faith.” A.R.S.

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§ 12-341.01. No attorney’s fees will be awarded. As the successful party, however,

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Even if he were to allege that the ALJ was damaged and therefore defrauded, he has
not claimed that he is bringing suit on the ALJ’s behalf.
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Plaintiff argues by way of analogy that a person whose bank deposits are improperly
given to an imposter who deceives a bank teller ought to be able to sue the imposter.
Although the depositor in the analogy may have some avenue of recovery, a fraud suit
claiming that the imposter defrauded the depositor would not succeed. (Doc. 9 at 11).
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Defendants will be permitted to recover their costs. A.R.S. § 12-341.

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IT IS THEREFORE ORDERED:

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1.

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Plaintiff’s Motion to Permit Filing of Administrative Record in Portable

Document Format on Compact Disc (Doc. 3) is dismissed as moot.

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2.

Defendant’s Motion to Dismiss (Doc. 6) is granted.

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3.

Plaintiff will pay Defendants’ costs, but attorney’s fees will not be awarded.

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4.

The Clerk of Court is directed to terminate this action.

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DATED this 17th day of April, 2012.

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