Smith et al v. Allred et al
Filing
66
MEMORANDUM OPINION AND ORDER the defendants' 30 Motion for summary judgment will be granted insofar as it contends that plaintiffs' claim was effectively filed on 5/11/2015, the date of the complaint in this suit; granting the defendant s' 30 MOTION for Partial Summary Judgment with respect to all of plaintiffs' Section 1983 claims based on conduct occurring before 5/11/2013, including Racketeering Activity Counts 1-38 as described in the complaint; denying without prejudice defendants' motion for partial summary judgment as it relates to the extent of damages suffered by plaintiffs based on conduct that occurred on 4/5/2013-4/6/2013 in Williamson, West Virginia; and in all other respects, defendants 9; 30 MOTION for Summary Judgment, 30 MOTION for Partial Summary Judgment and 37 MOTION for Reconsideration, as to the motion to dismiss, are denied. Signed by Judge John T. Copenhaver, Jr. on 6/1/2016. (cc: counsel of record; any unrepresented parties) (taq)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF WEST VIRGINIA
AT CHARLESTON
CHRISTOPHER MACCORKLE SMITH,
and A.C.R. PROMOTIONS, INC.,
d/b/a Rough N’ Rowdy Brawl
d/b/a Ruckus in the Cage,
Plaintiffs,
v.
Civil Action No. 2:15-cv-06026
STEVEN A. ALLRED, individually
and in his official capacity,
DOUGLAS E. PAULEY, individually
and in his official capacity,
and BRIAN SIMPSON, individually
and in his official capacity,
Defendants.
MEMORANDUM OPINION AND ORDER
Pending are defendants’ motion to reconsider the
court’s order as to the motion to dismiss, filed April 11, 2016,
and defendants’ motion for summary judgment and partial summary
judgment, filed March 4, 2016.
Background
This action arises from allegations that West Virginia
regulators engaged in corrupt conduct that harmed a boxing
promoter’s business.
Plaintiff A.C.R. Promotions, Inc.,
(“A.C.R.”) is a West Virginia corporation engaged in the
business of hosting and promoting professional, semi-
professional, and amateur combat sports events, including both
boxing and mixed martial arts matches.
A.C.R. promotes events
in West Virginia, as well as in Virginia, North Carolina,
Tennessee, Georgia, Alabama, and Kentucky.
Plaintiff
Christopher MacCorkle Smith (“Smith”) is the president and owner
of A.C.R.
A.C.R.’s events in West Virginia are subject to
regulation and oversight by the West Virginia State Athletic
Commission (“the Commission”), members and former members of
which appear as defendants in this action.
Plaintiffs contend
that, over a number of years, the Commission took various
corrupt and unlawful actions, including charging fees greater
than those allowed by statute, hiring more officials (who must
be paid by fight promoters) than necessary, demanding special
tickets or access for family members and other associates, and
unethically assigning themselves as judges and referees in
prominent matches.
Plaintiffs also contend, as will be
discussed further below, that the Commission maliciously
interfered with plaintiffs’ attempt to create a reality
television show based on public demonstrations and the persons
who fight in them.
Plaintiffs filed the complaint in this action on May
11, 2015, alleging violations of the Racketeer Influenced and
2
Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1961 et seq.,
through a pattern of violations of the Hobbs Act, 18 U.S.C. §
1951 et seq., and the Federal Wire Fraud Act, 18 U.S.C. § 1343
et seq.
They also claim that the commissioners’ actions
deprived them of their civil rights in violation of 42 U.S.C. §
1983 (“Section 1983").
In an order entered March 31, 2016, this court ruled
that plaintiffs’ RICO claims are subject to a four-year statute
of limitations, and that the Section 1983 claims are subject to
a two-year statute of limitations.
Smith v. Allred, No. 2:15-
cv-06026, 2016 WL 1274593, *6-14 (S.D.W. Va. Mar. 31, 2016).
In
calculating the effect of the statute of limitations, plaintiffs
considered their suit to have been filed on the date on which
they gave statutory notice of the lawsuit to state officials,
which was March 14, 2015, almost two months before the complaint
was filed on May 11.
Because defendants not only did not object
to this calculation, id. at *6 n.4, but used that same date in
briefing their motion to dismiss, the court used it as well in
dismissing “Plaintiffs’ RICO claims based on acts committed
before March 14, 2011” and “Plaintiffs' § 1983 claims based on
acts committed before March 14, 2013,” id. at *14.
The opinion
also stated that defendants are not immune from plaintiffs’
claims based on W. Va. Code § 55-7C-1.
3
Id. at *5-6.
In their motion to reconsider the court’s order as to
the motion to dismiss, defendants contend that (1) plaintiffs’
RICO claims are time-barred, and (2) the court should treat the
date that plaintiffs filed their complaint – not the date that
they gave statutory notice to state officials - as the date the
lawsuit was filed.
Inasmuch as the defendants failed to raise
the latter issue in their motion to dismiss, the motion to
reconsider is, as to that issue, denied.
In their motion for summary judgment and partial
summary judgment, defendants repeat two of their arguments that
the court discussed in its order on the motion to dismiss: that
the RICO actions and Section 1983 claims are time-barred, and
that plaintiffs are immune from suit under state statutes for
qualified directors serving without pay.
Defendants contend
also that (1) plaintiffs’ claims for lost profits related to a
proposed television venture are speculative and without basis in
the record, and that (2) defendants are free from punitive
damages because of their claim of relevant state statutory
immunity.
Defendants also raise, in their reply, their
contention that (3) the court should not allow plaintiffs to use
the date they filed notice of the lawsuit with the state as the
commencement date of their lawsuit, but should instead use the
4
date of their complaint in this court as the suit’s
commencement.
Motion to Reconsider
Rule 54 of the Federal Rules of Civil Procedure
provides, in relevant part, that an interlocutory, nondispositive “order or other form of decision is subject to
revision at any time before the entry of judgment adjudicating
all the claims and the rights and liabilities of all the
parties.”
Fed. R. Civ. P. 54(b).
The power to grant or deny reconsideration of an
interlocutory order is generally within the court’s discretion.
Moses H. Cone Mem. Hosp. v. Mercury Constr. Corp., 460 U.S. 1,
12 (1983) (“[E]very order short of a final decree is subject to
reopening at the discretion of the district judge.”); see also
Am. Canoe Ass’n v. Murphy Farms, Inc., 326 F.3d 505, 514-15 (4th
Cir. 2003) (citing Fayetteville Inv’rs v. Commercial Builders,
Inc., 936 F.2d 1462, 1469 (4th Cir. 1991)).
Our court of
appeals has provided guidelines as to when reconsideration is
favored by noting that earlier decisions of a court become law
of the case and must be followed unless “(1) a subsequent trial
produces substantially different evidence, (2) controlling
authority has since made a contrary decision of law applicable
5
to the issue, or (3) the prior decision is clearly erroneous and
would work manifest injustice.”
Sejman v. Warner-Lambert Co.,
Inc., 845 F.2d 66, 69 (4th Cir. 1988)(quoting EEOC v.
International Longshoremen's Assoc., 623 F.2d 1054 (5th Cir.
1980); see also Official Committee of Unsecured Creditors of
Cooler Tile, Inc. v. Coopers & Lybrand, LLP, 322 F.3d 147, 167
(2d Cir. 2003) (reconsideration generally inappropriate unless
there is “an intervening change of controlling law, . . . new
evidence, or [a] need to correct a clear error or prevent a
manifest injustice”).
Defendants here have not presented any
controlling authority issued since the previous opinion, and no
trial has yet occurred in this case, so the Sejman opinion will
counsel reconsideration of the previous order only if the court
finds that it was “clearly erroneous and would work manifest
injustice.”
845 F.2d at 69.
Defendants continue to assert that all of plaintiffs’
RICO injuries should be time-barred because some of them are.
This constitutes a misunderstanding of the rules governing RICO
claim accrual.
Their motion cites the “injury discovery rule,”
which holds that “[p]rivate RICO suits are governed by a fouryear statute of limitations, which runs from the date when the
plaintiff discovered, or should have discovered, the injury.”
Mem. of Law in Supp. of Def. Mot. to Reconsider at *7 (quoting
6
Potomac Elec. Power Co. v. Electric Motor and Supply, 262 F.3d
260, 266 (4th Cir. 2001)).
But they wish for this court to hold
something very different - that a plaintiff may not sue based on
new RICO predicate acts causing new injuries within the last
four years if the plaintiff has previously suffered RICO
violations as part of the same pattern before that time.
The defendants ask the court to reject the “separate
accrual” rule, which states that “a cause of action accrues when
new [predicate] acts occur within the limitations period,” based
on those new acts, “even if . . . other acts were committed
outside the limitations period.”
State Farm Mut. Auto. Ins. Co.
v. Ammann, 828 F.2d 4, 5 (9th Cir. 1987)(Kennedy, J.,
concurring).
The separate accrual rule has been described as
the “second part of the ‘injury discovery’ rule,” Grimmett v.
Brown, 75 F.3d 506, 510 (9th Cir. 1996), and in no way conflicts
with it.
Every court of appeals to consider this question has
rejected defendants’ position and endorsed the separate accrual
rule.
Rodriguez v. Banco Cent., 917 F.2d 664, 666 (1st Cir.
1990)(“We find the reasoning of the Second Circuit in Rhoades
persuasive.”); Bankers Trust Co. v. Rhoades, 859 F.2d 1096,
1102-05 (2d. Cir. 1988); Annulli v. Panikkar, 200 F.3d 189, 19798 (3d. Cir. 1999); Love v. National Med. Enters., 230 F.3d 765,
773-75 (5th Cir. 2000); McCool v. Strata Oil Co., 972 F.2d 1452,
7
1463-66 (7th Cir. 1992)(“Following the First, Second, Eighth,
Ninth, Tenth and Eleventh Circuits, we also apply a ‘separate
accrual’ rule to civil RICO claims.”); Grimmett, 75 F.3d at 510
(9th Cir. 1996); Cory v. Aztec Steel Bldg., Inc., No. 03-4193RDR, 2005 WL 3682117, at *4 (D. Kan. Nov. 18, 2005)(“In Bath,
the Tenth Circuit also adopted the ‘separate accrual’
rule.”)(citing Bath v. Bushkin, Gaims, Gaines & Jonas, 913 F.2d
817 (10th Cir. 1990)(per curiam)); Lehman v. Lucom, 727 F.3d
1326, 1331 (11th Cir. 2013)(“[I]f a new RICO predicate act gives
rise to a new and independent injury, the statute of limitations
clock will start over for the damages caused by the new act.”).1
See also Klehr v. A.O. Smith Corp., 521 U.S. 179, 190
(1997)(“[S]ome Circuits have adopted a ‘separate accrual’ rule
in civil RICO cases, under which the commission of a separable,
new predicate act within a 4–year limitations period permits a
plaintiff to recover for the additional damages caused by that
1
Several of the courts of appeals noted in this paragraph,
following the lead of the Second Circuit in Bankers Trust Co. v.
Rhoades, have adopted the broader position that even a “new and
independent injury” from the same predicate act may ground a new
lawsuit. Bankers Trust, 859 F.2d 1096, 1103 (“At a later date,
when a new and independent injury is incurred from the same
violation, the plaintiff is again ‘injured in his business or
property’ and his right to sue for damages from that injury
accrues at the time he discovered or should have discovered that
injury.”). If a new injury from past conduct can create grounds
for a new legal claim, then, plainly, new injuries from new
conduct must allow a new legal claim as well. See Love v. Nat'l
Med. Enterprises, 230 F.3d at 775 (stating rule from Bankers
Trust and applying it to injuries from new conduct).
8
act. . . . Thus, the Klehrs may point to new predicate acts that
took place after [the date four years before the start of their
lawsuit] . . . .”)(citing cases from Seventh, Ninth, and
Eleventh Circuits endorsing separate accrual rule, and citing
also Bingham v. Zolt, 66 F.3d 553, 560 (2d Cir. 1995), which
suggested even broader standing to sue on the basis of past
acts).
Defendants believe that the Supreme Court’s opinion in
Rotella v. Wood, 528 U.S. 549, 555-56 (2000), supports their
position.
They cite Rotella for the proposition that “a
plaintiff who seeks to bring a civil RICO action must be
diligent and must assert such an action within four years of the
date of the first discovery of the pattern of racketeering
activity,” Def. Rep. to Pl. Resp. to Mot. for Summ. J. at *5.
This contention has no basis in Rotella, which simply rejected a
rule, then applied by some courts, that a RICO claim accrued for
a particular injury when a plaintiff discovered that injury and
a pattern of RICO violations, rather than simply when the
plaintiff discovered the injury itself.
528 U.S. at 551 (“The
commencement of petitioner's . . . action under [RICO] was
timely only if the so-called ‘injury and pattern discovery’ rule
governs the start of the 4–year limitations period.
that it does not.”).
We hold
The holding of Rotella is compatible with
9
the separate accrual rule.
Moreover, if Rotella had rendered
the separate accrual rule impermissible, it would be curious
indeed that courts of appeals continued to endorse the rule
after Rotella was decided.
See, e.g., Lehman v. Lucom, 727 F.3d
1326; Love v. Nat'l Med. Enterprises, 230 F.3d 765; Takeuchi v.
Sakhai, 227 F. App'x 106, 107 n.1 (2d Cir. 2007).
Defendants also cite the district court’s opinion in
CSX Transp., Inc. v. Gilkison, 71 Fed. R. Serv. 3d 1471 (N.D.W.
Va. 2008), which they believe to have rejected the separate
accrual rule at one stage of a lengthy proceeding.
But that
portion of the decision was reversed (albeit on other grounds)
by the Fourth Circuit in an opinion that did not reject the
separate accrual rule.
CSX Transp., Inc. v. Gilkison, 406 Fed.
Appx. 723, 728, 730 n.3 (4th Cir. 2010)(“[W]e do not address
CSX's argument regarding the separate accrual rule for RICO
statute of limitations purposes.”).
In fact, in Gilkison, the
Fourth Circuit wrote as follows:
[S]ince the issue may arise on remand, we do note our
concern regarding the district court's apparent
alternate holding that, “[b]ecause only one alleged
act of racketeering activity is not time-barred, CSX
has failed to show the requisite pattern to sustain
its RICO claims.” . . . [E]ven if a claim or claims
are found to be time-barred, that fact alone does not
make the claim ineligible as a predicate act to
establish a RICO pattern.
10
In order to demonstrate the requisite pattern of RICO
activity, the statute permits the contemplation of
acts within a ten year period. 18 U.S.C. § 1961(5).
Thus, even assuming that only one of those acts
occurred within the statute of limitations period,
that would not defeat the existence of a RICO pattern
provided the other predicate act took place within the
applicable ten year period. Whether all of the
injuries might independently support an award of
damages is a separate issue.
Id. at 730 n.3 (citation omitted).
This dictum suggests that
even if some events are time-barred and thus cannot support the
plaintiff’s recovery, they can still be used to establish the
“pattern” of events required under the RICO statute, so long as
at least one event happened within the limitations period.
That
is, of course, precisely what plaintiffs seek in this case.
It
is unclear whether there is any daylight between the rule
described in the Fourth Circuit’s Gilkison opinion and the
“separate accrual” rule, but, in any case, the comments suggest
that defendants’ argument lacks basis in rulings of our court of
appeals.
It is noted that, at a later point in the districtlevel Gilikson proceedings, the district judge who authored the
2008 opinion declined to decide whether “the separate accrual
rule applies,” and explicitly noted that the Fourth Circuit had
not taken a position regarding the separate accrual rule.
CSX
Transp., Inc. v. Gilkison, No. 5:05-cv-202, 2013 WL 149608, at
*4, *4 n.4 (N.D.W. Va. Jan. 14, 2013).
11
And, as this court noted
in its previous order, the Fourth Circuit has explicitly
endorsed the separate accrual rule in antitrust law, the context
from which the RICO limitations rules are drawn.
In re Cotton
Yarn Antitrust Litig., 505 F.3d 274, 290-91 (4th Cir. 2007).
In short, defendants produce no authority persuading
the court to reject the separate accrual rule.2
Adopting their
position would not only be legally novel, but would also produce
the absurd result of allowing defendants to break the RICO laws
with impunity if they began acting illegally far enough in the
past.
Statutes of limitations are meant to favor repose and the
speedy presentation of claims, but defendants’ proposed rule
would prevent plaintiffs, in at least some circumstances, from
suing based on illegal actions taken the day before a complaint
is filed.
Such a result is not consistent with either of those
values.
2
Defendants cite a number of other Fourth Circuit cases in an
attempt to bolster their position, but these cases simply
reiterate the “injury discovery” rule, which, as the court
explained above, does not conflict with the “separate accrual”
rule. See, e.g., Dickerson v. TLC The Laser Eye Ctr. Inst.,
Inc., 493 F. App'x 390 (4th Cir. 2012); Potomac Elec. Power Co.
v. Elec. Motor & Supply, Inc., 262 F.3d 260, 266 (4th Cir.
2001)(“[T]he application of the statute of limitations
essentially turns on the question of whether, with respect to
each alleged injury, PEPCO knew or should have known of its
injury prior to July 29, 1994”)(emphasis added); CVLR
Performance Horses, Inc. v. Wynne, 792 F.3d 469, 476 (4th Cir.
2015). No circuit-level authority cited by defendants
demonstrates a rejection of the separate accrual rule.
12
Defendants also contend that each item on plaintiffs’
long list of RICO violations in this case does not demonstrate a
new, independent predicate act and injury, but instead is “at
best, [a] recharacterization[] and continuation[]” of past
injuries.
Def. Repl. to Pl. Resp. to Mot. to Reconsider at *7.
Thus, in defendants’ view, “Plaintiffs have not demonstrated new
and independent acts that are entitled to application of the
‘separate accrual rule.’”
Id.
It is true that “recharacterizations” of past injuries
cannot support a new RICO claim, and some courts have also held
that “a ‘continuation of damages into a later period will not
serve to extend the statute of limitations for a RICO action.’”
Lehman v. Lucom, 727 F.3d 1326, 1331-33; but see Bankers Trust,
859 F.2d 1096, 1102-05 (noting that new cause of action can
accrue based on “new and independent injury” from same
violation).
In Lehman, for example, the Eleventh Circuit held
that a plaintiff could not bring separate claims based on a
single improper property sale by contending that each small step
in the transaction, such as “sign[ing] off on” the sale and
“transfer[ring] tracts . . . to third party transferees,” was
somehow separate from the overall act of “attempting to sell”
the property.
Lehman, 727 F.3d at 1332.
In this action,
however, plaintiffs’ complaint plainly makes a series of
13
allegations describing independent legal violations, each of
which inflicted independent injuries upon defendants.
For
example, many of plaintiffs’ allegations describe individual
acts of overcharging for the services of boxing officials on
specific dates or demanding free tickets, see, e.g., Pl. Compl.
at *31-32.
Defendants’ suggestion that these violations were
not independent of each other must be rejected.3
3
Defendants appear also to state that, if all of plaintiffs’
RICO counts are sufficiently “related” to each other to form a
pattern, then each new event alleged cannot also be sufficiently
independent to support recovery under the separate accrual rule.
Def. Repl. to Pl. Resp. to Def. Mot. to Reconsider at *5-6
(“Plaintiffs cannot have it both ways, either the RICO Act
applies and all predicate acts are part of a pattern of
racketeering activities or RICO does not apply and Plaintiffs’
claims must fail because the acts are not substantially related
and cannot be part of a civil RICO claim.”); see also Def. Repl.
to Pl. Resp. to Mot. for Summ. J. at *6-7.
This argument must fail. First, the statute allows suit
based on a “pattern of racketeering activity,” which is “two
acts of racketeering activity, one of which occurred . . .
within ten years . . . after the commission of a prior act.” 18
U.S.C. § 1961. If the statute of limitations for a “pattern”
expired four years after discovery of the first injury in the
pattern, no claim could ever lie for two events ten years apart
unless the first injury was not discovered until long after it
was inflicted. Defendants’ theory thus appears to be at odds
with the statute’s language. Moreover, the separate accrual
rule could never apply if events in all RICO patterns were so
related that no additional injury in a pattern could ever be
“new and independent.”
14
Based on the foregoing reasoning, the court ORDERS
that defendants’ motion to reconsider the court’s ruling on the
motion to dismiss should be, and it hereby is, denied.
Summary Judgment
A. Legal Standard
A party is entitled to summary judgment “if the
pleadings, the discovery and disclosure materials on file, and
any affidavits show that there is no genuine issue as to any
material fact and that the movant is entitled to judgment as a
matter of law.”
Fed. R. Civ. P. 56(c).
Material facts are
those necessary to establish the elements of a party’s cause of
action.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986).
A genuine issue of material fact exists if, in viewing
the record and all reasonable inferences drawn therefrom in a
light most favorable to the non-moving party, a reasonable factfinder could return a verdict for the non-movant.
Id.
The
moving party has the initial burden of showing — “that is,
pointing out to the district court – that there is an absence of
evidence to support the nonmoving party’s case.”
v. Catrett, 477 U.S. 317, 325 (1986).
15
Celotex Corp.
If the movant satisfies
this burden, then the non-movant must set forth specific facts
as would be admissible in evidence that demonstrate the
existence of a genuine issue of fact for trial.
56(c); id. at 322-23.
Fed. R. Civ. P.
A party is entitled to summary judgment
if the record as a whole could not lead a rational trier of fact
to find in favor of the non-movant.
F.2d 820, 823 (4th Cir. 1991).
Williams v. Griffin, 952
Conversely, summary judgment is
inappropriate if the evidence is sufficient for a reasonable
fact-finder to return a verdict in favor of the non-moving
party.
Anderson, 477 U.S. at 248.
B. Discussion
The court addresses each of defendants’ arguments for
summary judgment and partial summary judgment in turn.
1. Statutes of Limitations
The court considered defendants’ arguments as to the
governing limitations rules in the order on the motion to
dismiss.
In this order, the court has again reviewed the time
limitations as to the RICO claims.
Defendants’ motion for
summary judgment does not raise any new arguments worthy of
discussion regarding the statutes of limitations for either the
RICO claims or the claims brought pursuant to Section 1983.
16
Thus, the court adheres to the above discussion of the separate
accrual rule for RICO claims, as well as the order disposing of
the motion to dismiss.
2. Immunity under W. Va. Code § 55-7C-3
Defendants contend, as they did in their motion to
dismiss, that they are immune under W. Va. Code § 55-7C-3, which
states that “a qualified director shall not be held personally
liable for negligence.”
Def. Mem. in Supp. of Mot. for Summ. J.
and Partial Summ. J. at *16.
The court discussed this matter at
some length in its order regarding the motion to dismiss, and
defendants’ motion for summary judgment raises no new arguments
on this point that are worthy of discussion.
3. Tolling under W. Va. Code § 55-17-3
Defendants contend that plaintiffs are mistaken in
using the date that they notified the state of their intent to
sue, rather than the date of their complaint, as the date on
which this suit commenced.
They state, in their briefing, that
Plaintiff attempts to claim a tolling period from
March 14, 2015 due to Plaintiffs’ mistaken belief that
it was necessary to file a “notice of intent to sue”
as specified in W.Va. Code § 55-17-3. . . . Plaintiffs
are incorrect in their reliance upon W.Va. Code § 5517-3 to toll the filing date of their May 11, 2015
Complaint.
17
Def. Repl. to Pl. Resp. to Mot. for Summ. J. at *9.
Defendants,
in support of their view, cite Tiller v. W. Virginia Dep't of
State Police, No. 5:13-CV-05385, 2013 WL 6036441 (S.D.W. Va.
Nov. 13, 2013) and D.W. v. Walker, No. CIVA 2:09-CV-00060, 2009
WL 1393818, at *3 (S.D.W. Va. May 15, 2009), both of which held
that the state statute does not toll applicable limitations
periods for federal-court litigants.
Because defendants raised this argument for the first
time in their reply, plaintiffs had no opportunity to respond to
it in the summary judgment briefing, although plaintiffs could
have requested permission to file a surreply.
Inasmuch as
defendants’ position on this issue is well-supported both by an
analysis of the applicable statute and the applicable case law,
the court will consider it, even though the practice of raising
arguments for the first time in reply briefs is strongly
disfavored.
The language of § 55-17-3 dictates that it applies
only to actions filed in state court.
The statute requires
litigants to file notice with the state before commencing “an
action against” government agencies, and provides at least
thirty days of tolling upon fulfillment of this requirement:
18
Notwithstanding any provision of law to the contrary,
at least thirty days prior to the institution of an
action against a government agency, the complaining
party or parties must provide the chief officer of the
government agency and the Attorney General written
notice, by certified mail, return receipt requested,
of the alleged claim and the relief desired. . . . If
the written notice is provided . . . any applicable
statute of limitations is tolled for thirty days from
the date the notice is provided and, if received by
the government agency as evidenced by the return
receipt of the certified mail, for thirty days from
the date of the returned receipt.
W. Va. Code § 55-17-3 (emphasis added).
The statute defines an
“action” as a lawsuit filed in state court:
“Action” means a proceeding instituted against a
governmental agency in a circuit court or in the
supreme court of appeals, except actions instituted
pursuant to statutory provisions that authorize a
specific procedure for appeal or similar method of
obtaining relief from the ruling of an administrative
agency and actions instituted to appeal or otherwise
seek relief from a criminal conviction, including, but
not limited to, actions to obtain habeas corpus
relief.
W. Va. Code § 55-17-2 (emphasis added).
Because the statute
limits the pre-suit notice requirement, as well as the related
tolling provision, to suits “instituted . . . in a circuit court
or in the supreme court of appeals,” it has no application to
suits filed in federal court.
held as much.
Two courts in this district have
See Singh v. Nerhood, No. 3:11-CV-00701, 2012 WL
4464025, at *4 (S.D.W. Va. Sept. 26, 2012); D.W. v. Walker, 2009
WL 1393818.
19
Moreover, the state statute cannot apply to federal
Section 1983 claims, or, it seems, to RICO claims.
In Felder v.
Casey, the United States Supreme Court ruled that state “presuit notice” statutes requiring persons to file documents with
the state before suing do not apply to Section 1983 claims,
regardless of whether the claims are filed in state or federal
court.
487 U.S. 131 (1988).
The opinion in Felder noted that
Section 1983 generally uses state statutes of limitation because
Section 1983 itself does not contain a statute of limitation,
and “statutes of limitation are among the universally familiar
aspects of litigation considered indispensable to any scheme of
justice.”4
Id. at 140.
But “the absence of any notice-of-claim
provision,” on the other hand, “is not a deficiency requiring
the importation of [state] statutes into the federal civil
rights scheme.”
Id. at 139. The Court pointed out that Congress
did enact notice-of-claim and exhaustion requirements for some
4
See 42 U.S.C. § 1988 (“[J]urisdiction . . . shall be exercised
and enforced in conformity with the laws of the United States,
so far as such laws are suitable to carry the same into effect;
but in all cases where they are not adapted to the object, or
are deficient in the provisions necessary to furnish suitable
remedies and punish offenses against law, the common law, as
modified and changed by the constitution and statutes of the
State wherein the court having jurisdiction of such civil or
criminal cause is held, so far as the same is not inconsistent
with the Constitution and laws of the United States, shall be
extended to and govern the said courts in the trial and
disposition of the cause. . . .”)(emphasis added).
20
types of claims brought under Section 1983 – particularly for
claims brought by prisoners, 42 U.S.C. § 1997e – and so the
presumption should be that Congress did not wish for such
requirements to apply to claims under Section 1983 in general.
Id. at 148.
Courts of Appeals have applied similar reasoning to
other federal statutes.
The Second Circuit has stated that
“when a federal action is brought in federal court, the court
has discretion to borrow from state law when there are
deficiencies in the federal statutory scheme,” but that, without
Congressional intent to the contrary, “the absence of a noticeof-claim provision generally does not render a federal statute
deficient.”
Hardy v. New York City Health & Hosp. Corp., 164
F.3d 789, 793 (2d Cir. 1999).
In Hardy, the Second Circuit
determined that New York’s notice-of-claim requirements could
still apply in suits brought under a federal statute, the
Emergency Medical Treatment and Active Labor Act (“EMTALA”).
164 F.3d at 793-94.
Key to the court’s opinion was that the
statute stated that damages should be “available . . . under the
law of the State in which the hospital is located.” Id. (citing
42 U.S.C. § 1395dd(d)(2)(A)).
In the court’s view, this text
21
indicated Congress’s intent to allow notice-of-claim statutes to
operate.5
Id.
In J.S. ex rel. Duck v. Isle of Wight Cty. Sch. Bd.,
our court of appeals considered whether “the Virginia notice
requirement was applicable to federal claims under the
Rehabilitation Act,” 29 U.S.C. § 794.
Cir. 2005).
402 F.3d 468, 475 (4th
The court asked whether “the Rehabilitation Act is
deficient for the lack of a notice-of-claim provision,” and
determined that it was not, largely because “such rules are not
‘necessary to the fair litigation’ of the federal cause of
action.” Id. (quoting Brown v. United States, 742 F.2d 1498,
1503 (1984)).
The opinion in Felder thus shows that, in the present
case, no state notice-of-claim statute will apply to plaintiffs’
Section 1983 claims.
On the reasoning of Felder and cases such
as Hardy and Isle of Wight, at least one court has ruled that
RICO claims are not subject to state notice-of-claim statutes.6
5
Our court of appeals has disagreed with the Second Circuit, and
has held that EMTALA is not consistent with state notice-ofclaim statutes. Power v. Arlington Hosp. Ass'n, 42 F.3d 851,
866 (4th Cir. 1994)(“We do not read § 1395dd(d)(2)(A) as
expressly or impliedly incorporating state-mandated procedural
requirements for EMTALA claims. The statute refers us to state
law only in determining ‘those damages available for personal
injury’ actions against hospitals, no further.”).
6 The application of notice-of-claim statutes to RICO may differ
from the analysis for Section 1983 and certain other federal
22
NRP Holdings LLC v. City of Buffalo, No. 11-CV-472S, 2015 WL
9463199, at *4 (W.D.N.Y. Dec. 28, 2015)(noting “no evidence of
congressional intention to adopt a state law notice of claim
requirement”).
The conclusion that the West Virginia notice-of-claims
statute does not apply to this suit is consistent with decisions
of the federal courts in this district.
As defendants suggest
in citing Tiller and Walker, federal courts in West Virginia
have widely held that W. Va. Code § 55-17-3 has no application
to federal lawsuits.
Singh, 2012 WL 4464025, at *4; see also
Vaughan v. Sheely, No. 5:12-CV-123, 2013 WL 8182783, at *1
(N.D.W. Va. Aug. 12, 2013); cf. Downey v. S. Cent. Reg'l Jail
Auth., No. 2:13-CV-23595, 2014 WL 4852014, at *6 (S.D.W. Va.
July 30, 2014)(“Although this action was instituted in the
Circuit Court of Kanawha County, in Felder v. Casey, 487 U.S.
131, 145 (1988), the United States Supreme Court made it clear
that ‘Notice of Claim’ statutes, such as the one at issue here,
and state immunity statutes, do not apply to claims raised under
42 U.S.C. § 1983, regardless of whether they are filed in
laws if RICO is determined not to be a “civil rights law” to
which Section 1988(a) applies. See Isle of Wight Cty. Sch. Bd.,
402 F.3d at 475 (noting that the Section 1988(a) “deficiency”
analysis applied to the statute at issue because it was a “civil
rights” law); but see Hardy, 164 F.3d at 793 (applying
“deficiency” analysis without determining that statute at issue
implicated civil rights).
23
federal or state court.”), report and recommendation adopted sub
nom. Downey v. S. Cent. Reg'l Jail, No. 2:13-CV-23595, 2014 WL
4852173 (S.D.W. Va. Sept. 29, 2014).7
A final question appears: even if the notice-of-claims
statute does not apply, may plaintiffs invoke its tolling
provision?
Courts that have considered this question
emphatically state that plaintiffs may not receive benefit of a
tolling provision accompanying a notice statute inapplicable to
their claims.
In Day v. Moscow, Judge Kearse considered whether
a plaintiff could use the tolling provision of a state notice
statute for a Section 1983 claim brought in federal court:
Since the filing of a notice of claim was not a
prerequisite to the federal-court suit, a municipality
perforce could not require a delay of the commencement
of a federal-court suit pending an examination based
on such a notice. . . . Since there was no statutory
prohibition against a suit such as the present one in
federal court, we conclude that under state law, the
tolling provision . . . would not be deemed applicable
. . . . The purpose of a tolling provision is to
assure that the claimant has the full period of time
provided by a statute of limitations in which to bring
his suit. In the present case, no valid purpose would
be served by enlarging the prescribed period to
“compensate” for a disability that did not exist.
7
The statute has evidently been used only to dismiss claims that
originate in state court and do not arise under Section 1983.
Petersen v. W. Virginia Univ. Bd. of Governors, No. 2:06-CV0664, 2007 WL 2220192 (S.D.W. Va. July 31, 2007).
24
955 F.2d 807, 814 (2d Cir. 1992).
See also Peoples v. Finney
Cty. Bd. of Comm'rs, 56 F.3d 78 (10th Cir. 1995)(unpublished
opinion); Silva v. Crain, 169 F.3d 608, 610 (9th Cir. 1999).
The reasoning of the Moscow decision is persuasive.
West Virginia’s notice statute does not apply to plaintiffs’
claims in this case.
Thus, although the statute may toll the
limitations period for claims to which it applies, “no valid
purpose would be served by enlarging the prescribed period to
‘compensate’ for a disability that did not exist.”
955 F.2d at
814.
Based on the foregoing, defendants’ motion for summary
judgment will be granted insofar as it contends that plaintiffs’
claim was effectively filed on May 11, 2015, the date of the
complaint in this suit.
Both the four-year RICO statute of
limitations, and the two-year Section 1983 statute of
limitations, will be applied based on the date the complaint was
filed.
4. Claims of Lost Profits from Television Show
Defendants also take issue with plaintiffs’ claim that
they lost the opportunity to create, and profit from, a reality
television show in April of 2013.
25
Defendants focus on two legal
requirements: first, the need to show that defendants’ acts
proximately caused the injury, and second, the need to give
evidence for any damages sought beyond mere “speculation or
conjecture.”
Def. Mem. at *10-15.
The RICO statute dictates that “[a]ny person injured
in his business or property by reason of a violation of [the
RICO laws] may sue therefor in any appropriate United States
district court.”
18 U.S.C. § 1964(c).
“The quoted language
requires the plaintiff to . . . show[] . . . that this injury
was caused by the predicate acts of racketeering activity that
make up the violation of § 1962.”
Brandenburg v. Seidel, 859
F.2d 1179, 1187 (4th Cir. 1988)(citing Nodine v. Textron, Inc.,
819 F.2d 347, 348 (1st Cir. 1987)), overruled on other grounds
by Quackenbush v. Allstate Ins. Co., 517 U.S. 706 (1996).
A plaintiff must “show[] that the defendant’s
violation not only was a ‘but for’ cause of his injury, but was
the proximate cause as well.”
503 U.S. 258, 268 (1992).
Holmes v. Sec. Inv'r Prot. Corp.,
“[T]he legal,” or proximate, “cause
determination is properly one of law for the court,” Mid Atl.
Telecom, Inc. v. Long Distance Servs., Inc., 18 F.3d 260, 263
(4th Cir. 1994), and “[c]ausation principles generally
applicable to tort liability must be considered applicable,”
Brandenburg, 859 F.2d at 1189.
These may include “such factors
26
as the foreseeability of the particular injury, the intervention
of other independent causes, and the factual directness of the
causal connection.”
Mid Atl. Telecom, 18 F.3d at 264 (quoting
Brandenburg, 859 F.2d at 1189).
Our court of appeals “has not held that quantifiable
damages are a necessary precondition to RICO liability; instead,
[the Fourth] Circuit has formulated the requirement in terms of
the necessity of proving some damages, not a specific amount.”
Potomac Elec. Power Co. v. Elec. Motor & Supply, Inc., 262 F.3d
260, 265-66 (4th Cir. 2001)(emphasis in original)(citing
Caviness v. Derand Resources Corp., 983 F.2d 1295, 1305 (4th
Cir. 1993)).
It is inappropriate for a district court to grant
“summary judgment on the basis of inability to prove the amount
of damages,” because even “a nominal amount of damage is
adequate to support liability.”
Id. at 266.
Although the events in Williamson are relatively
muddled, the record, taken in the light most favorable to
plaintiffs, reveals the following.
By early 2013, plaintiff
Smith had been “contacted by . . . all kinds of reality show
producers,” who “wanted [his company] to do a reality show with
them.”
Smith Dep. at 105.
After considering relationships with
other production companies, Smith decided to “sign[] with”
Authentic Entertainment, a production company responsible for
27
several hit television shows including “Here Comes Honey Boo
Boo,” id. at 107, in the hopes that Authentic could design a
television show and market it to networks.
Authentic decided to
film a “sizzle,” which is a short video intended to give
networks a preview of a proposed television show.
Kalister Dep.
at 12.
To make the “sizzle,” Authentic “spent the resources
to come in and film it,” id. at 107-08 – indeed, Kyle Kalister,
the producer who led the project, estimates that the company
spent “close[] to $20,000” doing so, Kalister Dep. at 19.
Authentic determined that the “sizzle” would focus on only two
fights.
Smith Dep. at 108.
For each of the two fights,
Authentic would examine some type of personal dispute or
relationship between two “colorful characters,” and then, at the
end, show their fight as “the resol[ution] [of] the dispute.”
Id.
The first fight would feature two half-brothers who
“lived together” and were experiencing an “inter-family
squabble” because “one of the brothers had slept with the other
brother’s girlfriend.”
Kalister Dep. at 37-38.
The second
fight involved a “turf war” between a man from Kentucky, Brian
Coleman, and a man from West Virginia, Garald Anderson.
Dep. at 108.
Smith
“Brian Coleman hated West Virginia,” and evidently
28
stated, among other things, that “their football team sucks,”
and “Gerald [sic] Anderson didn’t like him insulting the
football team.”
Smith Dep. at 108-09.
The second fight,
between Anderson and Coleman, was most attractive for purposes
of the “sizzle.”
Kalister Dep. at 49.
The event in Williamson took place over two days.
On
the first day, Coleman could not attend, because his grandmother
had just passed away.
Smith Dep. at 111.
fought someone else on the first day.
Anderson instead
He lost the bout, and was
“knocked down [in] the second round,” Smith Dep. at 111-12,
although he was not knocked out and finished the fight.
During
the match that night, neither the ringside physician, McDaniel
Dep. at 23-24, nor the referee, Kuhn Dep. at 44-45, believed
that Anderson was unfit to continue fighting after he was
knocked down.
The next day, Smith intended to put on the fight
between Anderson and Coleman.
But Commissioner Pauley, who had
not attended the match the previous night, “sa[id] that he
talked to his . . . referees and officials and that they felt
that he could not . . . let [Anderson] fight.”
116.
Smith Dep. at
Pauley’s ostensible justification for doing so was that
Anderson was defeated the previous night by knockout, thus
suspending him from eligibility to fight for a period of time.
29
Id.
Even though, during the previous night, Anderson had not
been found to lose by knockout, Pauley “changed the outcome to a
knockout,” Smith Dep. at 116, evidently revising records to
reflect this change.
Smith testified that such a change has “never happened
in the history of me putting on 20,000-plus fights.”
at 116-17.
Smith Dep.
He states that this extreme action was taken because
of a general bias against his amateur boxing exhibitions in
favor of professional boxing.
Smith Dep. at 117.
Although
Smith acknowledges that Pauley never stated to him directly that
this action was taken to damage Smith’s business, Smith Dep. at
196-97, he bases this assumption on a long history of the
Commission’s discriminatory, corrupt, and harmful conduct toward
his company.
See, e.g., Smith Dep. at 96 (stating that
Commissioner Allred appeared at one of Smith’s events in
Williamson and told fans that Mixed Martial Arts was comparable
to gay pornography, when they were wearing Mixed Martial Artsrelated clothing); 85-86 (recounting discussion between Smith
and Allred as to the Commission’s requirement that Smith pay
higher fees than other promoters); 77-78 (stating Smith’s belief
that the Commission discriminates against him because of his
superior ability, compared to professional boxing engagements,
to draw large audiences).
30
Smith states that he was unable to entertain the fight
between Anderson and Coleman at any later time because the
season for amateur fighting had ended, and because it would
require tremendous resources and energy to “get the community to
exhaust itself again to come back out to an event and fill the
seats up.”
Smith Dep. at 208.
Kalister, the television producer from Authentic,
stated that networks had expressed “a strong interest” in making
a show based on Smith’s fights, and that Authentic “thought that
we could get funding from them” to develop the show.
Dep. at 23.
Kalister
He further states that his company thought the
proposed show “would have a good chance of . . . getting some
steam and selling,” Kalister Dep. at 18.
Smith noted that the
Discovery Channel “had even offered the production company money
to film the sizzle for them to come out and do it, but
[Authentic] wanted the exclusive.”
Smith Dep. at 132.
That is,
Authentic “decided to put their own money into it because they
knew if they put their own money into it they could pitch it to
multiple networks and not be limited to Discovery.”
Id. at 132-
33.
Smith states that, because Anderson was not permitted
to fight, the “sizzle” “did not sell.”
Smith Dep. at 132.
Kalister agrees with Smith that, because the fight between
31
Coleman and Anderson was not filmed, the “sizzle” “was not what
we intended when we went out,” and the trailer “didn’t get the
payoff of the . . . fight.”
Kalister Dep. at 24.
Authentic had
“spent a lot of our time the day before . . . creating this
story about these two guys . . . . so when [they] didn’t get
that fight, it just sort of let the tape die short at the end a
little bit.”
Kalister Dep. at 24-25.
Consequently, Smith
claims, as damages, lost profits from any future reality
television series.
Defendants strongly object to the suggestion that
Pauley disqualified Anderson for malicious reasons.
They
instead contend that “Pauley did not permit . . . Anderson to
continue in the single-elimination tournament due to concern for
his safety based upon reports Mr. Pauley received about the
level of physical abuse Anderson had taken on the previous night
when he lost his fight.”
Def. Repl. to Pl. Resp. to mot. for
Summ. J. and Partial Summ. J. at *16; see also Pauley Dep. at
56-57 (“For the safety of the fighter, I would not let him fight
the next night.”).
They also suggest that Pauley’s
disqualification of Anderson was related to irregularities with
the officials’ behavior caused by a cameraman’s decision to
enter the ring during Anderson’s fight.
In a video that
captured Pauley’s explanation to Anderson that he had been
32
disqualified, Pauley states, “[a]fter talking to one of my
Deputies, the referees, and the judges, if it wasn’t for the
interference in the ring you would have been counted out as a
knockout.”
DVD: Rough n’ Rowdy, Williamson, WV April 5-6, 2013
(on file with court).8
The conclusion that Anderson would have
been “counted out” appears to refer to the second round of the
fight the previous night, during which Anderson was knocked
down, and the referee spent some time removing the cameraman
from the ring, which may have given Anderson more time than
usual to resume fighting.
Id.
At the summary judgment stage, the court must view the
record in the light most favorable to plaintiffs, and
defendants’ contention thus cannot be accepted as a basis for
the court’s decision.
As noted above, Pauley stated on video
that he disqualified Anderson because he “would have been
counted out as a knockout” absent interference by a cameraman in
the boxing ring.
The court, after viewing the video of the
match, doubts that it supports this contention, but recognizes
the question as one for jury resolution.
DVD: Rough n’ Rowdy,
Williamson, WV April 5-6, 2013 (on file with court).
8
Further,
The DVD of Anderson’s fight in Williamson, and Pauley’s
discussion with Anderson regarding his disqualification, is
marked as Exhibit C to Defendants’ Reply to Plaintiffs’ Response
to the Motion for Summary Judgment and Partial Summary Judgment
(ECF 34-3).
33
as mentioned above, the official and physician who were deposed
stated that they did not tell Pauley that Anderson would have
been counted out, or that he should be disqualified the
following day.
Drawing all reasonable inferences in the
plaintiff’s favor, a jury could conclude that Pauley had no good
reason to cancel the match, and that he may have done so to harm
the plaintiffs.
Smith testified that the commissioners were
aware that he was filming the reality trailer.
Smith Dep. at
110 (“[The commissioners] showed up dressed up because they knew
they were going to be on a reality TV show.”).
And, as stated
above, Smith claims that he has been the victim of a long
campaign of discrimination and harassment at the hands of the
commission.
An ongoing campaign to harm Smith, combined with an
injurious act that seems to escape justification, could give
rise to the inference that the act was malicious.
In determining whether plaintiffs may sue based on the
events of April 5-6, two separate questions appear: whether
there is sufficient proximate causation to show that the claim
may be brought at all, and whether plaintiffs may claim damages
for projected future television profits.
As stated above, the Fourth Circuit requires, for a
RICO claim to lie, that a plaintiff “prov[e] some damages, not a
specific amount.”
Potomac Elec. Power Co., 262 F.3d at 265-66.
34
These damages need not be quantifiable.
Id.
In Potomac Elec.
Power, for example, this requirement was fulfilled by showing
that plaintiffs did not receive the services that they ordered
from another business, and it was not required that quantifiable
monetary damages be shown therefrom.
262 F.3d at 265 (“PEPCO .
. . argues that it need not show that the motors' performance
was diminished or that the motors were less valuable as a result
of EMS's failure to perform repairs as specified.
We agree.”).
Here, plaintiffs could point to a number of concrete
and very direct damages, such as the harm to A.C.R. resulting
from its inability to put on the fights that, in its judgment,
would best provide value to its viewers and result in their
continued patronage over time.
Moreover, regardless of whether
television stations decided to create a show based on A.C.R.’s
fights, the company expended substantial time and energy in
producing the “sizzle,” and because the Anderson/Coleman fight
did not happen, the “sizzle” itself was not completed as
planned.
The commissioners were likely aware of any damages
they caused to Smith’s attempts to film the events, given their
knowledge that television producers were present and that
filming was ongoing.
See Smith Dep. at 110.
None of the
proximate causation factors mentioned by the Fourth Circuit’s
RICO jurisprudence, including “the foreseeability of the
35
particular injury, the intervention of other independent causes,
[or] the factual directness of the causal connection,” Mid Atl.
Telecom, 18 F.3d at 264, preclude these injuries from grounding
a lawsuit.
Defendants contend, however, that plaintiffs cannot
carry the burden as to proximate causation because any injury
should be attributed to a number of causes other than their
actions:
1) Plaintiffs passed on the opportunity to have
Discovery Channel fund the sizzle reel for an
exclusive “first pass” option to purchase the program
in hopes of getting a better offer after filming was
complete; 2) Plaintiffs’ star fighter, Brian Coleman,
did not show up for his fight causing producer Kyle
Kalister to return to California without the footage
that he was seeking; 3) Plaintiffs’ other star
fighter, Garald Anderson, unexpectedly lost his fight
on the first night of the single-elimination
tournament, thus jeopardizing his ability to continue
to fight in the tournament; 4) on the following night,
Defendant Doug Pauley did not permit Garald Anderson
to continue in the single-elimination tournament due
to concern for his safety based upon reports Mr.
Pauley received about the level of physical abuse
Anderson had taken on the previous night when he lost
his fight; and lastly 5) Kyle Kalister left Authentic
Entertainment a few weeks after . . . Plaintiffs’
event and it is unclear whether the project would have
continued without Mr. Kalister’s involvement with it.
Def. Repl. to Pl. Resp. to Mot. for Summ. J. and Partial Summ.
J. at *16.
36
Given that the court must view the facts in the light
most favorable to plaintiffs, none of these five reasons can be
accepted at this juncture.
Each of the contentions relies upon
inferences in defendants’ favor, or upon assertions not
supported by the record.
First, the fact that Smith passed up
the Discovery Channel’s offer to fund the “sizzle” does not mean
it was less likely to be successful.
Nothing suggests that the
identity of the person financing the “sizzle” would change its
chances of becoming a television show.
Indeed, the likelihood
of success may well have been higher using Authentic’s strategy
of allowing multiple networks to consider the show.
Second,
Coleman’s absence on the first night would not have mattered,
except that Pauley prohibited Anderson from fighting on the
second night.
Absent Pauley’s interference, Smith could have
filmed the Anderson/Coleman fight on the second night and added
his footage to the “sizzle.”
Third, Anderson’s loss on the
first night only mattered because Pauley claimed to disqualify
him as a result of that loss, and, as the court discussed above,
the record suggests that Pauley may not have had reason to
disqualify Anderson.
Fourth, as explained above, the court will
not credit Pauley’s explanation of events at this stage of the
litigation.
Fifth, the record does not suggest that Kalister’s
presence at, or absence from, Authentic Entertainment affected
the likelihood of the show’s success.
37
Having resolved the issue of proximate causation, the
second question is what quantum of damages plaintiffs may claim
based on this injury.
The court is unable to determine, at this
stage, whether plaintiffs’ damages related to future television
profits could be based on “competent proof, [rather than] mere
speculation and surmise,” Miller v. Asensio & Co., 364 F.3d 223,
232 n.6 (4th Cir. 2004).
This matter will be more appropriately
addressed in deciding the parties’ motions in limine in
preparation for trial.
The court simply notes that claims for
lost profits are not always disallowed in RICO actions.
See,
e.g., Terminate Control Corp. v. Horowitz, 28 F.3d 1335, 1338
(2d Cir. 1994); Maiz v. Virani, 253 F.3d 641, 664 (11th Cir.
2001).
Accordingly, the court will deny defendants’ motion
for partial summary judgment as to plaintiffs’ ability to sue
based on events in Williamson, West Virginia on April 5-6, 2013.
The portion of defendants’ motion related to the extent of
damages suffered because of the event is denied without
prejudice.
5. Immunity from Punitive Damages
Defendants claim also that they are immune from
punitive damages because of relevant state statutes.
38
Although
defendants do not refer to the particular section of the state
code that supplies such immunity,9 presumably they have in mind
W. Va. Code § 55-17-4, which states that “No government agency
may be ordered to pay punitive damages in any action.”
The
statute defines a “government agency” to include “a . . . public
official named as a defendant or respondent,” W. Va. Code § 5517-2, which presumably would include defendants in this action.
For the defendants, however, the bitter comes with the
sweet: the term “action” in W. Va. Code § 55-17-4 partakes of
the same definition as it did in the above-discussed § 55-17-3,
which includes only “a proceeding instituted . . . in a circuit
court or in the supreme court of appeals,” W. Va. Code § 55-172.
Because this case was filed in federal court, and not in “a
circuit court” or “the supreme court of appeals,” the present
suit is not an “action” under § 55-17-4, and the prohibition of
that section on punitive damages is thus inapplicable.
Plaintiffs also note that they have sued defendants in
their individual as well as their official capacities, Pl. Resp.
9
Defendants cite § 55-17-1(a), which states the findings of the
legislature that support the enactments contained elsewhere in
Article 17 of the statute. W. Va. Code § 55-17-1(a)(“The
Legislature further finds that protection of the public interest
is best served by clarifying that no government agency may be
subject to awards of punitive damages in any judicial
proceeding.”).
39
to Def. Mot. Summ. J. at *9, a contention that is plainly
supported by the first page of the complaint, Pl. Compl. at *1
(stating, in caption of case, that each defendant is sued
“individually and as a West Virginia public official”).
Because
W. Va. Code § 55-17-4 only bars punitive damages in suits
against a public official “in his or her official capacity,”
punitive damages would in any case be recoverable given the
individual-capacity claims.10
See, e.g., Lavender v. W. Virginia
Reg'l Jail & Corr. Facility Auth., No. 3:06-1032, 2008 WL
313957, at *9 (S.D.W. Va. Feb. 4, 2008)(“As this Court has
determined that the Correctional Officers in this case are being
sued in their individual capacities and not their official
capacities, the Court finds punitive damages are not prohibited
under [W. Va. Code § 55-17-4].”); Rosenthal v. Jezioro, No.
2:08-CV-81, 2008 WL 4900563, at *6 (N.D.W. Va. Nov. 13,
2008)(“The defendants’ final argument is that the plaintiff’s
claim for punitive damages is barred by West Virginia Code § 55-
10
Defendants note that they have been sued in their individual
and official capacities, but suggest that punitive damages may
not be recovered against them because “Defendants . . . were
acting in their official capacities as public officials and
agents of the State of West Virginia in all counts of this
suit.” Def. Mem. in Supp. of Mot. for Summ. J. at *18. The
fact that defendants were engaged in work on behalf of the state
during the events of the case does not mean that individualcapacity claims cannot lie, see, e.g., Ex parte Young, 209 U.S.
123 (1908), and if such claims lie, they may support punitive
awards.
40
17-4(3) . . . . [T]he statute has no application to actions
brought against the defendants in their individual capacity.”).
Conclusion
For the foregoing reasons, the court ORDERS that
defendants’ motion for partial summary judgment be, and it
hereby is, granted, with respect to all of plaintiffs’ Section
1983 claims based on conduct occurring before May 11, 2013,
including Racketeering Activity Counts 1-38 as described in the
complaint.11
The court further ORDERS that defendants’ motion
for partial summary judgment be, and it hereby is, denied
without prejudice as it relates to the extent of damages
suffered by plaintiffs based on conduct that occurred on April
5-6, 2013 in Williamson, West Virginia.
In all other respects,
the court ORDERS that defendants’ motions for summary judgment,
partial summary judgment, and to reconsider the order as to the
motion to dismiss, are denied.
11
Although defendants are also entitled to dismissal of
plaintiffs’ RICO claims based on conduct occurring before May
11, 2011, this will not result in the dismissal of any
currently-operative claims.
41
the undersigned, unless canceled.
directed to appear.
02/29/2016
Lead counsel
Entry of scheduling order.
03/08/2016
Last day to serve F.R. Civ. P 26(a)(1) disclosures.
The Clerk is directed to transmit copies of this order
The Clerk is requested to transmit this Order and
to all counsel of record and any unrepresented parties.
Notice to all counsel of record and to any unrepresented
parties.
ENTER: June 1, 20162016
DATED: January 5,
John T. Copenhaver, Jr.
United States District Judge
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