Meschkow v. United States Trustee et al

Filing 16

ORDER denying 5 Motion to Dismiss on Grounds of Mootness FURTHER ORDERED denying Motion to Remand to State Court on Grounds of Mootness FURTHER ORDERED denying Motion for Temporary Restraining Order on Grounds of Mootness FURTHER ORDERED denying 8 Sanctions FURTHER ORDERED Unsealing the 10 First Amended Complaint. FURTHER ORDERED that the Clerk Shall Transfer this Action to Judge Wake. SEE ORDER FOR FULL DETAILS. Signed by Judge Frederick J Martone on 9/14/12. (cc: NVW) (MAP)

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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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Office of the United States Trustee; United)
States Department of Justice; Ilene J.)
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Lashinsky; Richard J. Cuellar,
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Defendants.
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Jordan M. Meschkow,

CV 12-01703-PHX-FJM
ORDER

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The court has before it defendants' motion to dismiss (doc. 5), plaintiff's response and

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cross-motion for sanctions (doc. 8), defendants' reply to the response and response to the

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motion for sanctions (doc. 12), plaintiff's reply to the response (doc. 14), and plaintiff's notice

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regarding further evidence for sanctions (doc. 15). We also have before us defendants'

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response to plaintiff's motion for temporary restraining order ("TRO") (filed in state court)

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(doc. 6), and plaintiff's reply (doc. 8). We also have plaintiff's motion to remand (doc. 7) and

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defendants' response (doc. 9). Plaintiff did not reply, and the time for replying has expired.

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Finally, defendants filed an objection to plaintiff's amended complaint (doc. 11), to which

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plaintiff responded (doc. 13).

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This action arises from a stipulation entered into by plaintiff and defendants in

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bankruptcy court that certain documents would be filed under seal. Plaintiff alleges that

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defendants violated the stipulation. After removing this action from the Superior Court of

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Arizona in Maricopa County, defendants filed a motion to dismiss on August 10, 2012.

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Plaintiff amended his complaint on August 18, 2012 (doc. 10). Because the first amended

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complaint ("FAC") asserts a claim under the False Claims Act, 31 U.S.C. § 3729, it is sealed.

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A party may amend his pleading once as a matter of course within twenty-one days

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after service of a motion under Rule 12(b). Fed. R. Civ. P. 15(a)(1)(B). An amended

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complaint supercedes the original complaint. Ferdik v. Bonzelet, 963 F.2d 1258, 1262 (9th

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Cir. 1992). Because plaintiff amended his complaint less than twenty-one days after the

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motion to dismiss was filed, this action is now proceeding under the FAC and the pending

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motion to dismiss and motion to remand are rendered moot. Moreover, plaintiff's request for

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a TRO, which was filed in state court and pertains to the original complaint, is also moot.

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This is not the first time that plaintiff has attempted to assert claims under the False

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Claims Act against these defendants. In a recent case before Judge Wake in this district,

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plaintiff filed an FAC that added a nearly identical claim against these defendants under the

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False Claims Act. After concluding that the False Claims Act claim appeared to be "patently

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frivolous" because it alleged "nothing that could constitute a claim under the Act," Judge

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Wake concluded that there was no justification for keeping the complaint from public view

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and ordered that the case be unsealed. Meschkow v. Office of the U.S. Tr., No. CV 12-

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01378-PHX-NVW (doc. 20). Plaintiff then filed a motion for leave to file a second amended

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complaint ("SAC"). Judge Wake reviewed the False Claims Act claims in the proposed

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SAC. He noted that plaintiff alleged "no claims presented to the United States," concluding

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that these claims "are patently frivolous and appear to have been brought for the sake of

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harassment." Meschkow v. Office of the U.S. Tr., No. CV 12-01378-PHX-NVW (doc. 31).

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Judge Wake denied plaintiff's motion for leave to amend on August 1, 2012. That same day,

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plaintiff filed a notice of voluntary dismissal.

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Our review of the False Claims Act claims in the FAC here leads us to the same

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conclusion as Judge Wake. Indeed, the False Claims Act claims in the FAC and those in the

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proposed SAC before Judge Wake are virtually identical. Especially in light of the prior

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ruling by Judge Wake denying plaintiff's motion for leave to amend in the prior action,
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plaintiff's recycling of the False Claims Act claims in this FAC appears frivolous. However,

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the FAC contains other claims that must await a motion to dismiss. Accordingly, we will

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order that the FAC in this action be unsealed. If the government moves to seal the FAC, we

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will re-seal it quickly.

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Plaintiff moves for sanctions against defendants. He argues that defendants' conduct

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in defending this action somehow amounts to attempted theft of his documents. Thus far,

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defendants have removed the action, filed a motion to dismiss, and responded to plaintiff's

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filings. Nothing about these actions would lead us to conclude sanctions under the court's

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inherent power is appropriate. Defending a lawsuit by asserting defenses that plaintiff

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disagrees with does not equate to "bad faith or conduct tantamount to bad faith." See Fink

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v. Gomez, 239 F.3d 989, 994 (9th Cir. 2001). Plaintiff's motion for sanctions is denied.

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IT IS ORDERED DENYING defendants' motion to dismiss on grounds of mootness

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(doc. 5). IT IS ORDERED DENYING plaintiff's motion to remand on grounds of

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mootness (doc. 7). IT IS ORDERED DENYING plaintiff's motion for a temporary

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restraining order on grounds of mootness. IT IS ORDERED DENYING plaintiff's motion

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for sanctions (doc. 8). IT IS FURTHER ORDERED that the first amended complaint is

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unsealed (doc. 10).

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Under LRCiv 3.8(a)(2), if an action is voluntarily dismissed and a related action is

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later filed in the district, "the filing party must file a separate notice with the party's

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complaint" that identifies the dismissed action. The clerk will then assign the new action "to

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the Judge who was last assigned to the dismissed action." Id. Plaintiff voluntarily dismissed

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the action before Judge Wake. This action is related to that before Judge Wake because it

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involves similar claims and parties. Although this action came to us by way of removal from

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state court, rather than by the filing of a new complaint by plaintiff, we conclude that the

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purpose of LRCiv 3.8(a)(2) will best be served by transferring this nearly identical action to

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Judge Wake, especially where as here there is the specter of forum shopping. Accordingly,

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IT IS ORDERED that the clerk shall transfer this action to Judge Wake.

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Finally, we strongly encourage plaintiff to seek the advice of another lawyer. A
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lawyer can offer a neutral evaluation of plaintiff's case and recommend the best way for

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plaintiff to protect his interests.

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DATED this 14th day of September, 2012.

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(cc: Judge Wake)

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