Zainah Hammoud v. Wayne County
697 F. App'x 445
| 6th Cir. | 2017Background
- Plaintiffs were former owners of real property in Wayne County, Michigan who became delinquent on property taxes around 2012; Wayne County foreclosed under the Michigan General Property Tax Act and received quitclaim deeds after foreclosure judgments in 2015.
- Plaintiffs did not timely redeem the properties and did not appeal the state-court foreclosure judgments.
- Municipalities exercised their statutory right of first refusal, purchased the foreclosed properties from the county, and contracted with developers to improve and develop the parcels for public benefit.
- Plaintiffs (as a putative class of ~800 former owners) sued in federal court alleging deprivation of due process and equal protection, failure to provide required notice, a civil RICO conspiracy, and violations of Michigan statutes.
- Defendants moved to dismiss under Fed. R. Civ. P. 12(b)(1) and 12(b)(6). The district court dismissed federal constitutional claims as barred by the Tax Injunction Act (28 U.S.C. § 1341), dismissed the RICO claim for failure to state a claim (and as unavailable against some defendants), and declined to exercise supplemental jurisdiction over remaining state-law claims.
- The Sixth Circuit affirmed: it agreed the Tax Injunction Act deprived the district court of jurisdiction over the constitutional claims, upheld dismissal of the RICO claim, and found no abuse of discretion in declining supplemental jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether federal court had jurisdiction over due-process and equal-protection claims given the Tax Injunction Act | Tax Injunction Act does not bar federal review because plaintiffs assert federal constitutional violations and allege lack of required notice | 28 U.S.C. § 1341 bars federal courts from restraining state tax collection or interfering with state tax systems; these claims effectively attack tax foreclosure process | Held: Tax Injunction Act bars adjudication; district court lacked subject-matter jurisdiction and dismissal was proper |
| Whether RICO claim was sufficiently pleaded against Wayne County and municipal defendants | RICO pleadings allege conspiracy and pattern of racketeering in foreclosure and conveyance scheme | County and municipalities cannot be liable as a matter of law (and plaintiffs failed to plead necessary RICO elements against other defendants) | Held: RICO claim dismissed — county/municipal defendants not liable as a matter of law and RICO allegations otherwise insufficient |
| Whether dismissal of federal claims required dismissal of state-law claims in district court | Plaintiffs urged adjudication or retention of state claims in federal court | Defendants argued once federal claims gone, court should decline supplemental jurisdiction | Held: District court did not abuse discretion in declining supplemental jurisdiction over state-law claims after dismissing federal claims |
| Appropriate standard of review for motions to dismiss | Plaintiffs argued errors in district court application of jurisdictional and pleading standards | Defendants relied on de novo review of jurisdictional and pleading dismissals and abuse-of-discretion rule for supplemental jurisdiction | Held: Court applied correct standards (de novo for 12(b)(1) and 12(b)(6); abuse-of-discretion for supplemental jurisdiction) |
Key Cases Cited
- DLX, Inc. v. Kentucky, 381 F.3d 511 (6th Cir. 2004) (de novo review of Rule 12(b)(1) when no factfinding)
- Riverview Health Inst. LLC v. Medical Mut. of Ohio, 601 F.3d 505 (6th Cir. 2010) (de novo review of Rule 12(b)(6) dismissal)
- Gamel v. City of Cincinnati, 625 F.3d 949 (6th Cir. 2010) (abuse-of-discretion standard for declining supplemental jurisdiction)