Liptak v. Ally Bank et al

Filing 34

ORDER Granting 6 Defendant's Motion to Dismiss. Defendant Sears, Roebuck & Co. terminated. Signed by Judge Kent J. Dawson on 03/18/2013. (Copies have been distributed pursuant to the NEF - AC)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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V.F. LIPTAK,

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Plaintiff,

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v.

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Case No. 2:12-CV-00882-KJD-GWF

ALLY BANK, et al.,

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ORDER

Defendants.

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Presently before the Court is Defendant Sears, Roebuck & Co.’s Motion to Dismiss (#6/7).

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Plaintiff filed a response in opposition (#13) to which Defendant replied (#15).

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I. Background

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Plaintiff only mentions named Defendant Sears, Roebuck & Co. (“Sears”) in four pages of his

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prolix sixty-six (66) page complaint. On page of two of the complaint, Plaintiff alleges that

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“defendant Sears’ admission/offer to pay damages and by judicial declarations proving full

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satisfaction of an otherwise void judgment” demonstrates probable success on the merits of his

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complaint. On page five, Plaintiff alleges “Defendant [Sears] is indebted to Liptak as a national

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retailer, service provider and mail-order business in this district. Liptak intends to seek waiver of

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service from Sears, but for this action, if those who represented themselves as authorized agents

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refuse to waive service by summons, Liptak will serve their agent as registered with the Secretary of

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the State of Nevada.”

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On page twenty-one of the complaint, under “Count III ‘Civil Rights’ Violations”, Liptak

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claims that he was deprived of his right to file compulsory counterclaims stating: “By example,

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Liptak was deprived of a jury trial against Sears in small claims, the day before trial on an unsworn,

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ex parte motion by their lawyers, which continued the case without hearing and without admissible

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evidence to cause delay and therefore per se denial of [due process] justice.” In a later paragraph on

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the page Liptak continues: “By such institutional corruption posing as error, Liptak has no heating or

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cooling in most of his home for over two years on undisputed facts by Sears’ express offer to pay

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damages.” Then, Plaintiff asserts the federal government is liable for damages based on the action of

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“banks” ... “proven by Patriot and Sears making no counterclaim and Sears’ offering to pay money

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damages, still due but unpaid to Liptak, without any real remedy in Texas or elsewhere.”

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Finally on page fifty-seven, under the section title “Restated Grounds for Preliminary

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Injunction”, Plaintiff alleges “[m]oreover, Sears has offered to pay damages and both Ally and Sears

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were recently prosecuted by the U.S. Government for wholesale violations of federal law resulting in

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many $Millions[sic] of compensation for the victims.”

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Plaintiff’s complaint was filed on May 24, 2012. Defendant Sears then filed the present

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motion to dismiss. On September 19, 2012, the Court denied Plaintiff’s motion to recuse and motion

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for preliminary injunctive relief. On March 8, 2013, the Court denied Plaintiff’s second motion to

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recuse.

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II. Standard for a Motion to Dismiss

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In considering a motion to dismiss, “all well-pleaded allegations of material fact are taken as

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true and construed in a light most favorable to the non-moving party.” Wyler Summit Partnership v.

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Turner Broadcasting System, Inc., 135 F.3d 658, 661 (9th Cir. 1998) (citation omitted).

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Consequently, there is a strong presumption against dismissing an action for failure to state a claim.

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See Gilligan v. Jamco Dev. Corp., 108 F.3d 246, 249 (9th Cir. 1997) (citation omitted).
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“To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted

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as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 129 S. Ct. 1937,

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1949 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Plausibility, in the

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context of a motion to dismiss, means that the plaintiff has pleaded facts which allow “the court to

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draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id.

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The Iqbal evaluation illustrates a two prong analysis. First, the Court identifies “the

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allegations in the complaint that are not entitled to the assumption of truth,” that is, those allegations

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which are legal conclusions, bare assertions, or merely conclusory. Id. at 1949-51. Second, the

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Court considers the factual allegations “to determine if they plausibly suggest an entitlement to

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relief.” Id. at 1951. If the allegations state plausible claims for relief, such claims survive the motion

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to dismiss. Id. at 1950.

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III. Analysis

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Plaintiff has failed to state any claims against Defendant Sears, even construing Plaintiff’s

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pro se pleadings liberally, as the Court must. First, Plaintiff’s bare assertion that Sears is indebted to

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him or offered to “pay damages” does not state a claim, without more facts upon which relief may be

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granted. The only specific claim under which Plaintiff asserts facts is for a “civil rights violation”

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based apparently on Sears’ participation in litigation in small claims court in Texas. However,

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Plaintiff has not alleged that Sears is a state actor. Therefore, the Court must dismiss the claims for

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civil rights violations, because Sears is not acting under the color of state law.

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Furthermore, private parties may only be liable for civil rights violations where they wilfully

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participate in joint action with state officials to deprive others of their constitutional rights. See

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United Steelworkers of Am. v. Phelps Dodge Corp., 865 F.2d 1539, 1540 (9th Cir. 1989)(en banc).

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“To prove a conspiracy between private parties and the government under section 1983, an

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agreement or ‘meeting of the minds’ to violate constitutional rights must be shown.” Fonda v. Gray,

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707 F.2d 435, 438 (9th Cir. 1983). Plaintiff has failed to meet his burden in alleging Sears came to a

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meeting of the minds to violate Plaintiff’s constitutional rights with the small claims court state

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actors.

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Finally, to any extent that Plaintiff seeks to claim RICO violations against Sears, Plaintiff has

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failed to state a claim. Under Federal Rule of Civil Procedure 9(b), if the plaintiff avers fraud, he

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must do so “with particularity.” To “state with particularity” requires the pleader to state “the who,

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what, when, where, and how of the misconduct charged.” Kearns v. Ford Motor Co., 567 F.3d 1120,

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1124 (9th Cir. 2009) (citation, quotations omitted). Rule 9(b)’s heightened pleading requirement

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applies to civil RICO fraud claims. Edward v. Marin Park, Inc., 356 F.3d 1058, 1066 (9th Cir.

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2004). The heightened pleading requirement demands that the circumstances constituting the alleged

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fraud be specific enough to give defendants notice of the particular misconduct, “so that they can

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defend against the charge and not just deny that they have done anything wrong.” Sanford v.

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MemberWorks, Inc., 625 F.3d 550, 558 (9th Cir. 2010) (quoting Kearns, 567 F.3d at 1124).

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The Ninth Circuit has repeatedly enforced this requirement in RICO actions based on mail

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fraud. See, e.g., Lancaster Cmty. Hosp. v. Antelope Valley Hosp. Dist., 940 F.2d 397 (9th Cir.

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1991); Sanford, 625 F.3d 550. In Lancaster, the court upheld dismissal of a RICO claim based on

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mail fraud that failed to mention any specific mailing, deeming the pleading “insufficient.” 940 F.2d

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397, 405. Similarly, Sanford involved a RICO claim based on fraudulent mailings, which the Ninth

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Circuit held was properly dismissed because the plaintiffs failed to allege any specific mailing. Id.,

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625 F.3d at 558. Moreover, “Plaintiffs cannot claim that a conspiracy to violate RICO existed if they

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do not adequately plead a substantive violation of RICO.” Sanford, 625 F.3d at 558.

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Congress enacted the Racketeer Influenced and Corrupt Organizations Act (“RICO”) with the

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specific intent to “thwart the organized criminal invasion and acquisition of legitimate business

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enterprises and property.” Oscar v. Univ. Students Co-Operative Assn., 965 F.2d 783, 786 (9th Cir.

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1992). Federal courts have established that RICO was “intended to combat organized crime, not to

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provide a federal cause of action and treble damages to every tort plaintiff. Id. at 786.

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To state a cause of action under RICO, Plaintiff must establish (1) conduct (2) of an

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enterprise (3) through a pattern (4) of racketeering activity (5) causing injury to the plaintiff’s

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business or property by the conduct constituting the violation. See Sedima v. Imrex Co., Inc., 473

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U.S. 479 (1985). RICO, in pertinent part, defines “racketeering activity” as “any act or threat. . . .

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which is indictable” under an enumerated list of offenses codified in Title 18 of United States Code

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and “ which is chargeable under State law and punishable by imprisonment for more than one year.”

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18 U.S.C. § 1961(1). A pattern of racketeering activity exists when a person commits two or more

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specified acts (“predicate acts”) that have sufficient continuity and relationship so as to pose a threat

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of continued criminal activity. See, e.g., Ticor Title Ins. Co. v. Florida, 937 F.2d 447, 450 (9th Cir.

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1992).
It is clear that Plaintiff has failed to allege with specificity any acts by Sears that would

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involve a RICO violation. Plaintiff has neither pled facts with specificity nor alleged any of the

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elements necessary to state a cause of action for RICO. Therefore, the Court dismisses any RICO

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claims against Sears.

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Normally, the Court would allow Plaintiff to file an amended complaint attempting to cure

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the deficiencies noted by the Court. However, amending the complaint to cure any of the identified

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deficiencies would be futile, because the Rooker-Feldman doctrine would bar Plaintiff’s action, and

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even if it did not, venue is not appropriate in Nevada.

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Plaintiff’s claims are clearly precluded by both the Rooker-Feldman doctrine and issue and

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claim preclusion. See Henrichs v. Valley View Development, 474 F.3d 609, 613-14 (9th Cir. 2007).

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The Rooker-Feldman doctrine provides that federal district courts lack jurisdiction to exercise

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appellate review over final state court judgments. Rooker v. Fidelity Trust Co., 263 U.S. 413, 415-16

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(1923); District of Columbia Court of Appeals v. Feldman, 460 U.S. 462, 482-86, (1983); Exxon

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Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 283-84 (2005). Essentially, the doctrine bars

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“state-court losers complaining of injuries caused by state-court judgments rendered before the

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district court proceedings commenced” from asking district courts to review and reject those
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judgments. Id. at 284. Absent express statutory authorization, only the Supreme Court has

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jurisdiction to reverse or modify a state court judgment. See Henrichs, 474 F.3d at 614. The clearest

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case for dismissal based on the Rooker-Feldman doctrine occurs when “a federal plaintiff asserts as a

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legal wrong an allegedly erroneous decision by a state court, and seeks relief from a state court

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judgment based on that decision....” Noel v. Hall, 341 F.3d 1148, 1164 (9th Cir. 2003).

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Rooker-Feldman does not override or supplant issue and claim preclusion doctrines. Exxon

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Mobil, 544 U.S. at 284. The doctrine applies when the federal plaintiff's claim arises from the state

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court judgment, not simply when a party fails to obtain relief in state court. Noel, 341 F.3d at 1164-

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65 (citing GASH Assocs. v. Village of Rosemont, 995 F.2d 726, 729 (7th Cir. 1993)). Preclusion,

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not Rooker-Feldman, applies when “ ‘a federal plaintiff complains of an injury that was not caused

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by the state court, but which the state court has previously failed to rectify.’ ” Noel, 341 F.3d at 1165

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(quoting Jensen v. Foley, 295 F.3d 745, 747-48 (7th Cir. 2002)). In Liptak’s present action, he

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makes both kinds of complaints. In fact, it appears clear, from the allegations of his complaint, the

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reason that the filed the complaint in the District of Nevada was because he has been declared a

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vexatious litigant in the Northern District of Texas and cannot file further actions in that District

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without permission of the court. See Liptak v. Banner, 2002 WL 378454 (N.D. Tex. March 7,

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2002)(aff’d 67 Fed. Appx. 252 (5th Cir. 2003)).

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Additionally, the Court would alternatively dismiss the complaint under Rule 12(b)(3).

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Plaintiff has made no showing that the District of Nevada is the proper venue for this action arising

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based on facts that entirely occurred in the State of Texas. Plaintiff asserts that venue is proper in

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Nevada based on a forum selection clause in the Independent Management Agreement (“the

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Agreement”) attached to the complaint. The Agreement is between Public Legal Education

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Associates, L.C. (“PLEA”) and Virgil Liptak d/b/a Designed Financial Services. The Agreement

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purports to designate Liptak as the Manager of PLEA. The Manager’s role, under the agreement, is

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to act as Chief Executive Officer of PLEA and manage its day to day affairs. The alleged forum

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selection clause states: “PLEA and Manager intend to operate and raise funds from the public in
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states other than Texas. All rights, duties, and obligations under this Agreement are subject to

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performance and enforcement wherever Manager shall choose, at its sole and exclusive discretion.”

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However, it appears from the allegations of the complaint that the Agreement is no longer in

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force. Additionally, Plaintiff did not sue in his capacity as Manager and, therefore, cannot invoke the

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alleged forum selection clause. The Court denies Plaintiff leave to amend his claims against Sears,

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because the Court would otherwise dismiss the complaint under Rule 12(b)(3). Therefore, Liptak’s

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claims against Sears are dismissed without leave to amend.

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IV. Conclusion

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Accordingly, IT IS HEREBY ORDERED that Defendant Sears, Roebuck & Co.’s Motion to
Dismiss (#6/7) is GRANTED.
DATED this 18th day of March 2013.

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_____________________________
Kent J. Dawson
United States District Judge

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