Hall v. City of Clarksburg et al
Filing
47
MEMORANDUM OPINION AND ORDER DENYING DEFENDANTS' MOTION TO DISMISS AMENDED COMPLAINT 37 . Signed by District Judge Irene M. Keeley on 5/1/15. (mh)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
GREGORY G. HALL,
Plaintiff,
v.
//
CIVIL ACTION NO. 1:14CV90
(Judge Keeley)
CITY OF CLARKSBURG, a
municipal corporation and
political subdivision,
MARTIN G. HOWE, JAMES C. HUNT,
RALPH Pedersen, MARGARET BAILEY,
ADAM BARBERIO, H. KEITH KESLING,
and JONATHAN R. DAVIS,
Defendants.
MEMORANDUM OPINION AND ORDER
DENYING DEFENDANTS’ MOTION TO DISMISS AMENDED COMPLAINT [37]
Pending before the Court is the motion to dismiss the amended
complaint (dkt. no. 37) filed by the defendants, the City of
Clarksburg, Martin G. Howe (“Howe”), James C. Hunt (“Hunt”), Ralph
Pedersen (“Pedersen”), Margaret Bailey (“Bailey”), Adam Barberio
(“Barberio”), H. Keith Kesling (“Kesling”), and Jonathan R. Davis
(“Davis”). For the following reasons, the Court DENIES the motion.
I. BACKGROUND
The Court’s recitation of the facts is taken from the amended
complaint of the plaintiff, Gregory G. Hall (“Hall”).
As it must,
at this early stage of the proceedings, the Court construes those
HALL v. CITY OF CLARKSBURG, ET AL.
1:14CV90
MEMORANDUM OPINION AND ORDER
DENYING DEFENDANTS’ MOTION TO DISMISS
facts in the light most favorable to the nonmoving party.1
See
De’Ionta v. Johnson, 708 F.3d 520, 524 (4th Cir. 2013).
Hall alleges that he is heavily involved in real estate within
West Virginia, and that, at one time, he owned numerous properties
in Harrison County. He asserts that he rented these properties to
“low income, elderly and disabled tenants.”
(Dkt. No. 35 at 4).
The dispute in this case arises from the alleged efforts of the
City of Clarksburg and its management employees to circumvent the
law in order to demolish residential properties such as those owned
by
Hall.
Hall
further
alleges
that
the
City
of
Clarksburg’s
management employees stood to profit –- financially and politically
-- from their purportedly unlawful conduct.
In 2000, the West Virginia Housing Development Fund (“WVHDF”)
allocated funding for its Demolition Loan Program (“DLP”), designed
to “provide municipalities with financial resources to demolish
older, residential rental properties, many of which were being
subsidized under various HUD programs.”
(internal quotation marks omitted).
(Dkt. No. 35 at 10)
The DLP explicitly recognized
that “[h]omes which remain owner-occupied and in good condition
1
The Court notes, however, that allegations in Hall’s amended
complaint are often disjointed and have impacted the Court’s ability to
recite accurately and completely the facts of the case.
2
HALL v. CITY OF CLARKSBURG, ET AL.
1:14CV90
MEMORANDUM OPINION AND ORDER
DENYING DEFENDANTS’ MOTION TO DISMISS
suffer from lower appraisal values due to the condition of their
neighbors.”
(Dkt. No. 35 at 10).
Hunt, who was an elected member of the City of Clarksburg
Council (the “City Council”) until 2012, was also a DLP area
manager responsible for projects in the City of Clarksburg.
As
such, he informed other public officials in the City of Clarksburg
about the DLP and “the availability of public funds to demolish
residential rental properties.”
In
September
2000,
Hunt
(Dkt. No. 35 at 12).
worked
with
Howe,
the
City
of
Clarksburg’s manager, to apply to the WVHDF for a $250,000 loan for
the demolition of fifty homes under the DLP. In December 2000, the
WVHDF awarded the City of Clarksburg $150,000 for the project.
Since then, the City of Clarksburg, with the assistance of Hunt,
has applied for five additional DLP loans and received loan awards
totaling $1,450,000.
Hall alleges that “Hunt benefitted personally as a result of
his public employment as WVHDF’s Area Manager for Clarksburg and
his direct involvement as Defendant Clarksburg’s elected public
official and member of its council.”
(Dkt. No. 35 at 19).
He
further alleges that “Hunt personally benefited [sic] from his
public employment and elected position by promoting himself as an
expert consultant for hire to other public entities considering the
3
HALL v. CITY OF CLARKSBURG, ET AL.
1:14CV90
MEMORANDUM OPINION AND ORDER
DENYING DEFENDANTS’ MOTION TO DISMISS
use of public funds for urban renewal projects and demolition of
dilapidated
residential
properties.”
(Dkt.
No.
35
at
19).
Finally, he alleges that “Hunt benefited [sic] others by directing
and encouraging official actions be taken by Defendant Clarksburg
in its continued participation in WVHDF’s Demolition Loan Program
and the demolition of hundreds of residential properties.”
(Dkt.
No. 35 at 19).
In June 2001, the City of Clarksburg was “unable to meet the
loan requirements imposed upon it by the WVHDF,”2 and requested the
assistance of the Clarksburg Urban Renewal Authority (“CURA”).3
CURA is a public body that the City Council created in 1961,
pursuant to West Virginia’s Urban Renewal Authority Law, W. Va.
Code § 16-18-1, et seq.
CURA, in turn, created the Urban Renewal
Plan for Demolition of Dilapidated Residential Structures for the
City of Clarksburg (the “Urban Renewal Plan”).
Hall alleges that the Urban Renewal Plan is illegal because it
failed to identify “the area of the urban renewal project,” in
2
Hall’s amended complaint does not specify which requirements were
too stringent.
3
Although Hall’s amended complaint says little regarding the
specifics of the arrangement between the City of Clarksburg and CURA, it
does allege that the City of Clarksburg assigned the obligation on the
loan to CURA.
4
HALL v. CITY OF CLARKSBURG, ET AL.
1:14CV90
MEMORANDUM OPINION AND ORDER
DENYING DEFENDANTS’ MOTION TO DISMISS
accordance with state statute.4
quotation marks omitted).
(Dkt. No. 35 at 13) (internal
Rather, he contends, the Urban Renewal
Plan “merely identified the project area as including ‘scattered
sites located within the incorporated area of Clarksburg, at which
dilapidated residential structures exist, which sites have been
declared
by
Clarksburg
to
be
blighted
redevelopment.’” (Dkt. No. 35 at 13).
areas
in
need
of
Furthermore, Barberio, the
City of Clarksburg’s code enforcement officer, as well as Hunt and
Howe, allegedly “knew, or should have known, that CURA’s ad hoc
urban renewal plan was unlawful.”
(Dkt. No. 35 at 13).
Hall also alleges that the City of Clarksburg and the City
Council unlawfully amended the City Ordinances by: (1) authorizing
Howe, rather than the City Council, to appoint members to the
Building Code Appeals Board (“BCAB”); (2) reducing the membership
of the BCAB from five to three members; (3) granting building
inspectors unreasonable right of entry and inspection to dwellings;
(4) blocking the opportunity for property owners to repair their
properties while under a demolition order; and (5) removing the
City of Clarksburg’s notice requirement of its right to file a lien
against any property subject to code enforcement action.
4
The statute cited by Hall is W. Va. Code § 16-18-1, et seq.
5
HALL v. CITY OF CLARKSBURG, ET AL.
1:14CV90
MEMORANDUM OPINION AND ORDER
DENYING DEFENDANTS’ MOTION TO DISMISS
Also, according to Hall’s amended complaint, the City of
Clarksburg’s building code officials and building inspectors were
not trained, qualified, or certified in accordance with W. Va. Code
§ 87-7-1, et seq.
Hall further claims that the City of Clarksburg,
Howe, Bailey, Hunt, Barberio, Kesling, Davis, and Pedersen5 knew or
should have known of this fact.
Finally, Hall alleges that, between July 2006 and August 2013,
Barberio and his two subordinate building code officials, Kesling
and Davis, ordered to be demolished, or scheduled for demolition,
properties Hall owned at ten separate addresses.
These actions,
according to Hall, violated the West Virginia Building Code, and
the defendants allegedly relied on false and misleading claims of
building code violations to accomplish demolition.
Hall further contends that this conduct was sanctioned by
Bailey, the City of Clarksburg’s mayor at the time, when she signed
a resolution “authorizing and empowering Defendant Clarksburg’s
officials
and
employees
to
continue
participating
in
WVHDF’s
Demolition Loan Program and to receive its loan award in the amount
of $400,000.”
(Dkt. No. 35 at 18).
5
According to Hall, the
Pedersen was a WVHDF employee and one of three appointed members
of the BCAB.
6
HALL v. CITY OF CLARKSBURG, ET AL.
1:14CV90
MEMORANDUM OPINION AND ORDER
DENYING DEFENDANTS’ MOTION TO DISMISS
demolition of his property at 531 Milford Street “personally
benefitt[ed] Defendant Bailey.”
(Dkt. No. 35 at 19).
In December 2013 and January 2014, Hall and several other
affected property owners filed complaints against the defendants
with the West Virginia Fire Commission.
In June 2014, the Fire
Commission issued its own “Consolidated Complaint and Notice of
Hearing”
against
several
defendants,
including
the
City
of
Clarksburg, Barberio, Kesling, and Davis. It determined that these
defendants “knowingly utilized an unlawful building code, through
the actions of unlawful [building code officials], to selectively
target specific properties and property owners, to divest them of
real and personal property without adequate due process of law.”6
(Dkt. No. 35-1 at 5).
Additionally, the defendants “utilized the
Clarksburg building code program to directly and/or indirectly
enrich themselves and others through the use of public funds and
the unlawful building code program.”
(Dkt. No. 35-1 at 5).
Hall originally filed his complaint in this Court on May 30,
2014.
The parties then sought a stay, which for good cause, the
Court granted. Subsequently, however, they requested that the Court
lift the stay. The Court lifted the stay and granted Hall’s request
6
Hall has adopted the Fire Commission’s allegations of fact and
conclusions of law in his amended complaint. (Dkt. No. 35 at 20).
7
HALL v. CITY OF CLARKSBURG, ET AL.
1:14CV90
MEMORANDUM OPINION AND ORDER
DENYING DEFENDANTS’ MOTION TO DISMISS
for
leave
to
amend
his
complaint
in
order
to
address
deficiencies outlined in the defendants’ motion to dismiss.7
the
Hall
filed his amended complaint on February 20, 2015.
Hall’s amended complaint asserts five causes of action. Three
involve claims
arising
under
42
U.S.C.
§ 1983,
but
alleging
different theories of liability, including municipal liability
(“Count One”), official, individual, and supervisory liability
(“Count Two”), and conspiracy liability (“Count Three”).
Count
Four alleges liability under the Racketeer Influenced and Corrupt
Organizations Act (“RICO”), 18 U.S.C. §§ 1962(c) and 1964(c).
Finally, Count Five seeks a declaratory judgment that “all amounts
assessed against [Hall] for demolition costs, assessments and fines
by Defendant Clarksburg are improper, unlawful, and not due and
owing.”
(Dkt. No. 35 at 31).
On March 12, 2015, the defendants moved to dismiss Hall’s
amended complaint, pursuant to Fed. R. Civ. P. 12(b)(6).
In their
motion, they contend: (1) that Hall did not utilize the proper
appellate procedure to challenge the defendants’ actions; (2) that
Hall’s claims are insufficiently pled; and (3) that Hall’s claims
are time-barred by both the applicable statute of limitations and
7
The Court denied as moot the defendants’ original motion to
dismiss.
8
HALL v. CITY OF CLARKSBURG, ET AL.
1:14CV90
MEMORANDUM OPINION AND ORDER
DENYING DEFENDANTS’ MOTION TO DISMISS
the doctrine of laches.8
The motion is fully briefed and ripe for
review.
II. STANDARD OF REVIEW
In reviewing the sufficiency of a complaint, a district court
“‘must accept as true all of the factual allegations contained in
the complaint.’”
Anderson v. Sara Lee Corp., 508 F.3d 181, 188
(4th Cir. 2007) (quoting Erickson v. Pardus, 551 U.S. 89, 94
(2007)). However, while a complaint does not need detailed factual
allegations, a plaintiff’s obligation to provide the grounds of his
entitlement
to
relief
requires
more
than
mere
labels
and
conclusions, and a formulaic recitation of the elements of a cause
of action will not do.
555 (2007).
Bell Atl. Corp. v. Twombly, 550 U.S. 544,
Indeed, courts “are not bound to accept as true a
legal conclusion couched as a factual allegation.”
Papasan v.
Allain, 478 U.S. 265, 286 (1986). In considering whether the facts
alleged are sufficient, “a complaint must contain ‘enough facts to
state a claim to relief that is plausible on its face.’”
Anderson,
508 F.3d at 188 (quoting Twombly, 550 U.S. at 547).
8
The defendants initially argued that Hall lacks standing to assert
any claims on behalf of other property owners.
In his response
memorandum, however, Hall explains that his amended complaint “asserts
no claims on behalf of others, and to the extent others are mentioned as
being damaged by the Defendants’ actions, such inclusion in Plaintiff’s
First Amended Complaint is for illustrative purposes . . . .” (Dkt. No.
42 at 15-16).
9
HALL v. CITY OF CLARKSBURG, ET AL.
1:14CV90
MEMORANDUM OPINION AND ORDER
DENYING DEFENDANTS’ MOTION TO DISMISS
“A motion to dismiss under Rule 12(b)(6) tests the sufficiency
of
a
complaint;
importantly,
it
does
not
resolve
contests
surrounding the facts, the merits of a claim, or the applicability
of defenses.”
Republican Party of N.C. v. Martin, 980 F.2d 943,
952 (4th Cir. 1992).
“But in the relatively rare circumstances
where facts sufficient to rule on an affirmative defense are
alleged in the complaint, the defense may be reached by a motion to
dismiss filed under Rule 12(b)(6),” so long as “all facts necessary
to the affirmative defense ‘clearly appear[] on the face of the
complaint.’” Goodman v. Praxair, Inc., 494 F.3d 458, 464 (4th Cir.
2007) (quoting Richmond, Fredericksburg & Potomac R.R. v. Forst, 4
F.3d 244, 250 (4th Cir. 1993)).
III. DISCUSSION
A.
Sufficiency of the Allegations
1. Count One: Municipal Liability Under 42 U.S.C. § 1983
Under Monell v. Dep’t of Soc. Svcs. of City of New York, 436
U.S. 658, 690 (1978), municipalities “can be sued directly under
§ 1983 for monetary, declaratory, or injunctive relief where . . .
the action that is alleged to be unconstitutional implements or
executes a policy statement, ordinance, regulation, or decision
officially adopted and promulgated by that body’s officers.”
the Fourth Circuit has explained,
10
As
HALL v. CITY OF CLARKSBURG, ET AL.
1:14CV90
MEMORANDUM OPINION AND ORDER
DENYING DEFENDANTS’ MOTION TO DISMISS
[a] municipality is not subject to section 1983 liability
simply because a claimant is able to identify conduct
attributable to the municipality.
Rather, “[t]he
plaintiff must also demonstrate that, through its
deliberate conduct, the municipality was the ‘moving
force’ behind the injury alleged.” Bd. of Cnty. Comm’rs
of Bryan Cnty., Okl. v. Brown, 520 U.S. 397, 404 (1997).
Accordingly, to impose section 1983 liability on a
municipality, a claimant must first show that “a
municipal decision reflects deliberate indifference to
the risk that a violation of a particular constitutional
or statutory right will follow the decision.” Id. at
411.
If a section 1983 claimant can demonstrate the
requisite degree of culpability, she must then show “a
direct causal link between the municipal action and the
deprivation of federal rights.” Id. at 404.
Riddick v. Sch. Bd. of City of Portsmouth, 238 F.3d 518, 524 (4th
Cir. 2000) (alterations and emphasis in original).
Here, Hall alleges that the City of Clarksburg, “by Codified
Ordinances adopted in 2003 and thereafter amended and adopted in
April 2009, established its official building code enforcement
policies, which, when enforced by its officials and employees,
caused deprivations of Plaintiff’s property rights, protected by
the Fourth, Fifth, and Fourteenth Amendments.”
20).
(Dkt. No. 35 at
Through these purportedly unlawful ordinances, Hall alleges
that the City of Clarksburg permitted building code officials and
inspectors, who were not properly trained, qualified, or certified
under state law, to issue citations, condemnation orders, and
demolition orders against his properties.
11
Moreover, Hall alleges
HALL v. CITY OF CLARKSBURG, ET AL.
1:14CV90
MEMORANDUM OPINION AND ORDER
DENYING DEFENDANTS’ MOTION TO DISMISS
that the City of Clarksburg and its officials “were deliberately
indifferent to the fact that the building code officials and
building inspectors were not properly trained, qualified, and
certified.”
(Dkt. No. 35 at 21).
In addition to alleging deliberate indifference by the City of
Clarksburg, Hall has alleged that the demolition of his properties,
and thus the deprivation of his constitutional rights,9 occurred
“[a]s a direct and proximate result of Defendant Clarksburg’s
amendments to its building code enforcement ordinances in 2009, and
the
established
practices,
manner,
and
methods
utilized
by
Defendant Clarksburg in the enforcement of the same.” (Dkt. No. 35
at 23).
Furthermore, “[a]s a direct and proximate result of the
adoption and enforcement of Defendant Clarksburg’s unlawful and
constitutionally deficient building code enforcement ordinances,
and its failure to hire and train qualified and certified building
code officials and building inspectors, . . . [Hall] suffered the
deprivation of constitutionally protected rights and interest.”
(Dkt. No. 35 at 24-25).
Based on these allegations, the Court cannot find that Hall’s
§ 1983 claim for municipal liability is insufficiently pled.
9
His
Hall specifically alleges that the conduct complained of violated
his rights under the Fourth, Fifth, and Fourteenth Amendments.
12
HALL v. CITY OF CLARKSBURG, ET AL.
1:14CV90
MEMORANDUM OPINION AND ORDER
DENYING DEFENDANTS’ MOTION TO DISMISS
allegations create a plausible claim that the City of Clarksburg,
through
deliberate
conduct,
was
the
moving
force
behind
the
purported violations of his constitutional rights.
2. Count Two: Official, Individual, and Supervisory Liability
Under 42 U.S.C. § 1983
Because the City of Clarksburg can be sued under § 1983, so
too can the city officials.
See Monell, 436 U.S. at 690 n.55
(“[O]ur holding today that local governments can be sued under §
1983 necessarily decides that local government officials sued in
their official capacities are ‘persons’ under § 1983 in those cases
in which . . . a local government would be suable in its own
name.”).
The same applies to land use officials.
See Gardner v.
City of Baltimore Mayor and City Council, 969 F.2d 63 (4th Cir.
1992); Scott v. Greenville County, 716 F.2d 1409 (4th Cir. 1983).
Furthermore, “to establish personal liability in a § 1983
action, it is enough to show that the official, acting under color
of state law, caused the deprivation of a federal right.” Hafer v.
Melo, 502 U.S. 21, 25 (1991) (emphasis in original); see also Biggs
v. Meadows, 66 F.3d 56, 61 (4th Cir. 1995).
Here, Hall seeks
compensatory damages10 from Barberio, Kesling, and Davis because
10
Compensatory damages are available for § 1983 claims only when a
defendant is sued in a personal (as opposed to official) capacity. See
Suarez Corp. Indus. v. McGraw, 125 F.3d 222, 229 (4th Cir. 1997).
13
HALL v. CITY OF CLARKSBURG, ET AL.
1:14CV90
MEMORANDUM OPINION AND ORDER
DENYING DEFENDANTS’ MOTION TO DISMISS
they
“violated
rights.”
[his]
Fourth,
Fifth,
(Dkt. No. 35 at 25).
and
Fourteenth
Amendment
Importantly, he alleges at least
ten specific occasions on which these three defendants violated his
rights.
(Dkt. No. 35 at 16-17).
Finally, it is well settled that “supervisory officials may be
held
liable
in
certain
circumstances
for
the
constitutional
injuries inflicted by their subordinates.” Shaw v. Stroud, 13 F.3d
791, 798 (4th Cir. 1994).
We have set forth three elements necessary to establish
supervisory liability under § 1983: (1) that the
supervisor had actual or constructive knowledge that his
subordinate was engaged in conduct that posed a pervasive
and unreasonable risk of constitutional injury to
citizens like the plaintiff; (2) that the supervisor’s
response to that knowledge was so inadequate as to show
deliberate indifference to or tacit authorization of the
alleged offensive practices; and (3) that there was an
affirmative causal link between the supervisor’s inaction
and the particular constitutional injury suffered by the
plaintiff.
Id. at 799 (internal quotation marks and citations omitted).
Count Two of Hall’s amended complaint is aimed specifically at
Howe, Barberio, Kesling, and Davis. Howe supervised Barberio, who,
in turn, supervised Kesling and Davis. Hall alleges that Barberio,
Kesling, and Davis violated his Fourth, Fifth, and Fourteenth
Amendment rights by “knowingly and intentionally issu[ing] numerous
false
and
unlawful
Citations,
14
Notices
of
Violation,
and
HALL v. CITY OF CLARKSBURG, ET AL.
1:14CV90
MEMORANDUM OPINION AND ORDER
DENYING DEFENDANTS’ MOTION TO DISMISS
Condemnation and Demolition Orders against [Hall].”
(Dkt. No. 35
at 25). He also alleges that “Howe, in his official and individual
capacities,
was
the
duly
authorized
supervisor
of
Defendant
Barberio, Defendant Kesling, and Defendant Davis and their building
code enforcement activities performed as employees of Defendant
Clarksburg’s Code Enforcement Office.”
(Dkt. No. 35 at 25-26).
In addition, Hall alleges that “Howe knew, or should have
known, that Defendant Barberio, Defendant Kesling, and Defendant
Davis were not properly trained, qualified, and certified to
perform their duties . . . , and that their regular employment
duties in the Code Enforcement Office would result in unlawful code
enforcement activities and other unconstitutional conduct . . . .”
(Dkt. No. 35 at 26).
Hall continues by alleging that “Howe failed
to take required corrective action and steps to prevent such
conduct,” and that, as a direct and proximate result, “Plaintiff
and many other property owners . . . suffered the deprivation of
their constitutionally protected rights and interests in their real
property, and sustained damages . . . .”
(Dkt. No. 35 at 26).
Hall has sufficiently pleaded his § 1983 claim under theories of
official, individual, and supervisory liability.
15
HALL v. CITY OF CLARKSBURG, ET AL.
1:14CV90
MEMORANDUM OPINION AND ORDER
DENYING DEFENDANTS’ MOTION TO DISMISS
3. Count Three: Conspiracy Liability Under 42 U.S.C. § 1983
“To establish a conspiracy under § 1983, [a plaintiff] must
present evidence that the [defendants] acted jointly in concert and
that some overt act was done in furtherance of the conspiracy which
resulted in [the plaintiff’s] deprivation of a constitutional
right.”
Hinkle v. City of Clarksburg, W. Va., 81 F.3d 416, 421
(4th Cir. 1996).
At the pleading stage, factual allegations,
rather than evidence, will suffice for a claim to withstand a
motion
to
dismiss.
See,
e.g.,
Clatterbuck
v.
City
of
Charlottesville, 708 F.3d 549, 553 (4th Cir. 2013).
Here, Hall alleges that the defendants agreed “to act in
concert
with
each
other
to
deprive
Plaintiff
of
his
constitutionally protected rights in his real property; and one or
more
members
of
the
conspiracy
furtherance thereof.”
performed
(Dkt. No. 35 at 27).
unlawful
acts
in
One of several overt
acts alleged is the issuance of citations, notices of violations,
and condemnation and demolition orders.
(Dkt. No. 35 at 21-22).
Also alleged is the defendants’ intentional amendment of City
Ordinances to remove procedural safeguards for the demolition of
Hall’s
properties.
(Dkt.
No.
35
at
21).
Based
on
these
allegations, Hall has sufficiently pled a claim for conspiracy
liability under § 1983.
16
HALL v. CITY OF CLARKSBURG, ET AL.
1:14CV90
MEMORANDUM OPINION AND ORDER
DENYING DEFENDANTS’ MOTION TO DISMISS
4. Count Four: Racketeering Liability Under 18 U.S.C. §§
1962(c) and 1964(c)
Under RICO, “[i]t shall be unlawful for any person employed by
or associated with any enterprise engaged in, or the activities of
which affect, interstate commerce, to conduct or participate,
directly or indirectly, in the conduct of such enterprise’s affairs
through
a
pattern
unlawful debt.”
unlawful
for
of
racketeering
activity
18 U.S.C. § 1962(c).
any
person
to
conspire
or
collection
of
Moreover, “[i]t shall be
to
violate
any
of
the
provisions of subsection (a), (b), or (c) of this section.”
18
U.S.C. § 1962(d).
In order to state a claim for relief under § 1962(c), Hall
must allege “(1) conduct (2) of an enterprise (3) through a pattern
(4) of racketeering activity.”
Sedima, S.P.R.L. v. Imrex Co., 473
U.S. 479, 496 (1985); see also Dickerson v. TLC The Laser Eye Ctr.
Inst., Inc., 493 Fed. App’x 390, 394 (4th Cir. 2012) (per curiam).
If Hall ultimately prevails on his RICO claim, he “shall recover
threefold the damages he sustains and the cost of the suit,
including a reasonable attorney’s fee . . . .”
18 U.S.C. §
1964(c).
Under
RICO,
an
“enterprise”
includes
“any
individual,
partnership, corporation, association, or other legal entity, and
17
HALL v. CITY OF CLARKSBURG, ET AL.
1:14CV90
MEMORANDUM OPINION AND ORDER
DENYING DEFENDANTS’ MOTION TO DISMISS
any union or group of individuals associated in fact although not
a legal entity.”
§ 1961(4).
Hall alleges that the City of
Clarksburg is a “municipal corporation,” and therefore “was and is
an enterprise as that term is defined in 18 U.S.C. § 1961(4).”
(Dkt. No. 35 at 4, 27).
RICO provides a lengthy definition of “racketeering activity.”
In relevant part, that definition includes “any act which is
indictable under any of the following provisions of title 18,
United States Code: . . . section 1341 (relating to mail fraud),
[and] section 1343 (relating to wire fraud).”
§ 1961(1)(B).
Because fraud provides the basis of Hall’s theory of racketeering,
his claim is subject to the particularity requirement of Fed. R.
Civ. P. 9(b).
F.R.D.
275,
See Robinson v. Fountainhead Title Grp. Corp., 252
279-80
(D.
Md.
2008)
(“Where
the
alleged
RICO
predicates are rooted in fraud, a plaintiff must comply with the
heightened pleading standards of Rule 9(b).”).
Hall alleges that, in pursuit of their scheme to defraud him,
the
defendants
“used
wire
communications
and
facilities
via
telephone, facsimile, emails, and the United States mails to apply
for, submit documents relating to, and receive records and funds
from WVHDF, all with regard to Defendant Clarksburg’s participation
in the [DLP].”
(Dkt. No. 35 at 28).
18
More specifically, he alleges
HALL v. CITY OF CLARKSBURG, ET AL.
1:14CV90
MEMORANDUM OPINION AND ORDER
DENYING DEFENDANTS’ MOTION TO DISMISS
that, “[o]n each occasion when Defendant Clarksburg made a loan
application to the WVHDF, its managers, including Defendant Howe,
submitted the application and supporting documentation to WVHDF by
utilizing
the
Additionally,
received
[DLP]
United
“[o]n
States
each
funds
mails.”
occasion
from
WVHDF,
(Dkt.
that
it
No.
35
Defendant
did
so
by
at
14).
Clarksburg
use
of
wire
transmission and facilities and/or the United States mails.” (Dkt.
No. 35 at 14).
Although
these
allegations
satisfy
the
particularity
requirement and meet the definition of racketeering activity, Hall
also must allege a “pattern,” meaning “at least two acts of
racketeering activity.”
§ 1961(5).
plausibly
“numerous
alleges
that
He has done so. Indeed, Hall
and
continuous
use
of
wire
communications and facilities and the United States mails by these
Defendants . . . establish[] the predicate acts constituting a
pattern of
racketeering
activity.”
(Dkt.
No.
35
at
28-30).
Moreover, he specifically alleges the transmittal of information by
the defendants to the WVHDF via wire communications, and their
communication of citations, notices, and orders to Hall through the
United States mail.
(Dkt. No. 35 at 29).
Therefore, at the
pleading stage, Hall’s allegations sufficiently state a claim for
RICO liability.
19
HALL v. CITY OF CLARKSBURG, ET AL.
1:14CV90
MEMORANDUM OPINION AND ORDER
DENYING DEFENDANTS’ MOTION TO DISMISS
5. Count Five: Declaratory Judgment Under 28 U.S.C. § 2201
In Count Five, pursuant to 28 U.S.C. § 2201(a), Hall seeks a
declaration from the Court that “all amounts assessed against him
for demolition costs, assessments and fines by Defendant Clarksburg
are improper, unlawful, and not due and owing.”
31).
(Dkt. No. 35 at
The purpose of the claim in Count Five is not entirely clear;
as pleaded, however, it suggests that the City of Clarksburg has
sought money from Hall, who has refused to pay because he believes
he is not legally required to do so.
See Collin Cnty. Tex. v.
Homeowners Ass’n for Values Essential to Neighborhoods, (HAVEN),
915 F.2d 167, 171 (5th Cir. 1990) (“[I]t is the underlying cause of
action of the defendant against the plaintiff that is actually
litigated in a declaratory judgment action.”). Viewing such facts
in the light most favorable to Hall, his declaratory judgment claim
presents a case of actual controversy between the parties, which
the Court declines to dismiss.
B.
Statute of Limitations/Laches
In their motion to dismiss, the defendants argue that the
majority of Hall’s amended complaint is time-barred under both the
two-year statute of limitations provided by W. Va. Code § 55-2-
20
HALL v. CITY OF CLARKSBURG, ET AL.
1:14CV90
MEMORANDUM OPINION AND ORDER
DENYING DEFENDANTS’ MOTION TO DISMISS
12(a) and the doctrine of laches,11 both of which are affirmative
defenses identified in Fed. R. Civ. P. 8(c).
As discussed above,
“a motion to dismiss filed under Federal Rule of Procedure 12(b)(6)
. . . generally cannot reach the merits of an affirmative defense,
such as the defense that the plaintiff’s claim is time-barred.”
Goodman, 494 F.3d at 464.
The only exception applies “in the
relatively rare circumstances where facts sufficient to rule on an
affirmative defense are alleged in the complaint.”
This
case does
circumstances”
not
described
present
in
one
of
Goodman.
the
In
Id.
“relatively
response
to
rare
the
defendants’ reliance on the statute of limitations, Hall contends
that
the
complaint.
continuing
violation
doctrine12
rescues
his
amended
Regarding laches, Hall argues that the defendants are
unable to establish either undue delay or prejudice.
These issues
11
Notably, laches is typically a state law doctrine that applies to
claims in equity. See Dunn v. Rockwell, 689 S.E.2d 255, 267 n.11 (W. Va.
2009).
Notwithstanding, the defendants contend that “[a]ny claims
associated with the demolition of the Plaintiff’s properties are barred
by the doctrine of laches.” (Dkt. No. 38 at 13). Because Hall seeks
damages under § 1983 and RICO, it is not clear that West Virginia’s
laches defense could bar his claims in the manner argued by the
defendants.
12
See A Society Without a Name v. Virginia, 655 F.3d 342, 348-49
(4th Cir. 2011) (recognizing that, in some circumstances, the continuing
violation doctrine can apply to § 1983 claims).
21
HALL v. CITY OF CLARKSBURG, ET AL.
1:14CV90
MEMORANDUM OPINION AND ORDER
DENYING DEFENDANTS’ MOTION TO DISMISS
require
further
evidentiary
development
before
the
Court
may
properly rule on them.
C.
Failure to Follow Proper Appellate Procedure
Relying
on
Article
1720.05
of
the
City
of
Clarksburg’s
municipal code, the defendants argue that Hall was required to
appeal any building code enforcement decision to the BCAB.
If he
received an unfavorable ruling, the defendants contend, he then was
required to file a petition for a writ of certiorari with the
Circuit Court of Harrison County for review of the BCAB’s decision.
See W. Va. Code § 53-3-2.
Because Hall filed a complaint directly
in federal district court, the defendants argue that his claims are
barred for failure to exhaust the available administrative and
judicial appellate procedures.
Hall counters by relying on precedent from the Supreme Court
of the United States for the proposition that “a Plaintiff bringing
a suit pursuant to 42 U.S.C. § 1983 is not required to exhaust
state administrative remedies before filing suit in federal court.”
(Dkt. No. 42 at 6) (citing Patsy v. Bd. of Regents of States of
Fla., 457 U.S. 496, 516 (1982); Steffel v. Thompson, 415 U.S. 452,
472-73 (1974); McNeese v. Bd. of Ed. for Cmty. Unit Sch. Dist. 187,
Cahokia, Ill., 373 U.S. 668, 671 (1963); Monroe v. Pape, 365 U.S.
22
HALL v. CITY OF CLARKSBURG, ET AL.
1:14CV90
MEMORANDUM OPINION AND ORDER
DENYING DEFENDANTS’ MOTION TO DISMISS
167, 183 (1961)). Hall contends that this rule applies squarely to
his claims.
As an initial matter, there is some dispute about whether Hall
actually filed an appeal with the BCAB.
His amended complaint
alleges that
during the November 2007, Building Code Appeal Board
meeting, Defendant Pedersen, who was at that time the
chairperson of the Board, said to the Plaintiff, “Mr.
Hall, I don’t like you.” In a subsequent Building Code
Appeal Board meeting, held on May 21, 2008, during which
Plaintiff’s property at 439/441 E. Pike Street,
Clarksburg, was on the agenda for discussion, Defendant
Pedersen stated to the Plaintiff, “Mr. Hall, I’ve been
waiting for this all morning.”
Defendant Pedersen’s
[sic] repeatedly expressed disparaging remarks toward the
Plaintiff over the course of dealings in this matter,
including at one meeting where Defendant Pedersen asked
of Plaintiff, “what does E.M.T. Properties stand for?
‘Empty Properties’?”.
(Dkt. No. 35 at 22).
Hall urges that this allegation represents “specific examples
of incidences in which he did appeal to the [BCAB].”
at 8).
(Dkt. No. 42
On the other hand, the defendants contend that the
allegation “speak[s] nothing to Plaintiff’s attempts to appear
before the [BCAB].”
(Dkt. No. 43 at 3).
It is axiomatic that a court “must view the facts alleged in
the light most favorable to the plaintiff.”
United States ex rel.
Nathan v. Takeda Pharms. N.A., Inc., 707 F.3d 451, 455 (4th Cir.
23
HALL v. CITY OF CLARKSBURG, ET AL.
1:14CV90
MEMORANDUM OPINION AND ORDER
DENYING DEFENDANTS’ MOTION TO DISMISS
2013). Here, under that standard, it is not difficult to determine
that Hall has alleged that he did, in fact, appeal the allegedly
unlawful
building
code
enforcement
decisions
to
the
BCAB.
Consequently, the relevant issue becomes whether any subsequent
failure to pursue a writ of certiorari from the Circuit Court of
Harrison County precludes his federal claims in this case.
In Timmons v. Andrews, 538 F.2d 584, 585 (4th Cir. 1976), city
housing
officials
in
Columbia,
South
Carolina
ordered
the
demolition of the plaintiff’s buildings because they were “unfit
for
habitation.”
As
here,
the
plaintiff
had
exhausted
her
administrative remedies, but had not sought a petition for review
from the South Carolina state court. Id. at 585-86. Nevertheless,
she sued the city, the mayor, the city manager, and the housing
board
of
adjustments
and
appeals
in
federal
district
court,
alleging that the demolition of her properties would violate her
constitutional rights.
Id. at 585.
The defendants moved to dismiss the case based on abstention,
contending that the plaintiff had failed to exhaust her available
state remedies.
Id.
The district court agreed and dismissed the
case in order to “allow it to proceed through the courts of the
State of South Carolina,” even though the plaintiff could no longer
pursue a state action, as the time for doing so had expired.
24
Id.
HALL v. CITY OF CLARKSBURG, ET AL.
1:14CV90
MEMORANDUM OPINION AND ORDER
DENYING DEFENDANTS’ MOTION TO DISMISS
On
appeal,
the
Fourth
Circuit
vacated
the
district
court’s
dismissal, explaining that “Mrs. Timmons has . . . exhaust[ed] her
administrative remedies.
exhaust
her
judicial
Having done so, she is not obliged to
remedies
by
seeking
review
administrative proceedings in the state courts.”
of
the
Id. at 586; see
also Front Royal & Warren Cnty. Indus. Park Corp v. Town of Front
Royal, Va., 135 F.3d 275, 283 n.3 (4th Cir. 1998) (“State remedies
need not be exhausted in order to pursue a § 1983 action claiming
a violation of [the right to due process and equal protection].”).13
Timmons undermines the defendants’ assertion that the doctrine
of exhaustion bars Hall’s § 1983 claims.
Likewise, any argument
that Hall’s RICO claim is barred by his purported failure to
exhaust
state
remedies
deserves
little
credit.
consistently rejected this contention out of hand.
Courts
have
See Glickstein
v. Sun Bank/Miami, N.A., 922 F.2d 666, 674 (11th Cir. 1991) (“The
13
The parties’ briefs also include a peculiar thrust-and-parry, in
which the defendants suggest that the Individuals with Disabilities
Education Act (“IDEA”) somehow undoes the general rule, applicable here,
that a § 1983 claim is not barred by the exhaustion doctrine. See Bess
v. Kanawha Cnty. Bd. of Educ., No. 2:08CV1020, 2009 WL 3062974, at *4
(S.D.W. Va. Sept. 17, 2009) (“But when a plaintiff raises alternative
claims that are also cognizable under the IDEA, the plaintiff is
‘required to exhaust [IDEA] administrative remedies to the same degree
as would have been required had the suit been brought under the
[IDEA].’”) (alterations in original) (quoting Doe v. Alfred, 906 F. Supp.
1092, 1099 (S.D.W. Va. 1995)). After considering the parties’ colloquy,
the Court finds it is not relevant to the issue at bar.
25
HALL v. CITY OF CLARKSBURG, ET AL.
1:14CV90
MEMORANDUM OPINION AND ORDER
DENYING DEFENDANTS’ MOTION TO DISMISS
proposition that state ‘exhaustion’ rules could bar the federal
RICO claims is not one that requires much discussion.”); Dickson v.
Chicago Allied Warehouses, Inc., No 90C6161, 1991 WL 60571, at *2
(N.D. Ill. Apr. 15, 1991) (“Plaintiffs correctly observe that there
is no requirement that state remedies be exhausted before a RICO
claim may be brought.”); Gunther v. Dinger, 547 F. Supp. 25, 27
(S.D.N.Y. 1982) (“The argument is frivolous on its face.”).
IV. CONCLUSION
After careful consideration of the issues raised by the
parties,
for
the
reasons
discussed,
the
Court
DENIES
the
defendants’ motion to dismiss.
It is so ORDERED.
The
Court
directs
the
Clerk
to transmit
copies
of
this
Memorandum Opinion and Order to counsel of record.
DATED: May 1, 2015.
/s/ Irene M. Keeley
IRENE M. KEELEY
UNITED STATES DISTRICT JUDGE
26
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?