Lead Opinion
This is аn appeal from an order of the United States District Court for the Southern District of New York, Robert J. Ward, District Judge, granting defendants’ motion for summary judgment by dismissing plaintiff’s 42 U.S.C. § 1983
In 1973, as part of a separation agreement between plaintiff and her husband, Mr. Girard assigned his interest in the apartment to plaintiff in lieu of alimony; the separation agreement was incorporated into the judgment of divorce granted later that year. No consent to assignment from the board of directors had been solicited or received. When plaintiff subsequently requested that she be recognized as the lawful stockholder and tenant, the board of directors, giving no reason, refused its consent, rejected plaintiff’s demand that the stock be transferred from Stephen Girard to Barbara Girard and refused to register the transfer on the books of the corporation.
Plaintiff then initiated suit (“Action # 1”) in the Supreme Court of New York seeking both a declaration that the corporation’s refusal was arbitrary, capricious, and unreasonable and an order compelling the corporation to transfer the stock on its books to her and to consent to an assignment of the lease. The corporation commenced its own action (“Action # 2”) for possession and eviction because of the unauthorized assignment and the failure to pay mаintenance costs. The state court granted defendant’s motion for summary judgment in Action # 1, finding that the consent provision of the lease was enforceable under state law and that “the cooperative apartment corporation had the right to refuse to consent to the transfer of the lease to plaintiff for any reason deemed satisfactory to it (except, of course, those prohibited by the Civil Rights Laws).” The Appellate Division, First Department, affirmed the order and judgment.
Plаintiff then instituted this suit, alleging that the corporate defendant and the individual defendants, as its officers and board of directors, violated her rights under 42 U.S.C. § 1983 by refusing to consent to the assignment of the lease solely because she is female. She also alleged that defendants conspired to deprive her of her civil rights because of her sex, a violation of 42 U.S.C. § 1985(3). Finally, plaintiff alleged that defendants violated New York Executive Law § 296(5)(a)(l) (1972).
I. Plaintiff’s Claim Under 42 U.S.C. § 1983
For the plaintiff to prevail under 42 U.S.C. § 1983 she must prove that the defendant, under color of any statute, ordinance, regulation, custom or usage of
Certainly a state court judgment can be state action. Shelley v. Kraemer,
Summarizing prior holdings dealing with the state action concept, the Supreme Court has stated that “where the impetus for the discrimination is private, the State must have ‘significantly involved itself with invidious discrimina-tions,’ ... in order for the discriminatory action to fall within the ambit of the constitutional prohibition.” Moose Lodge No. 107 v. Irvis,
Even applying this less burdensome standard, the district court below found that the state’s participation here was solely to provide a disinterested forum. Girard v. 94th Street and Fifth Avenue Corp., supra,
II. Plaintiff’s Claim Under 42 U.S.C. § 1985(3)
In 1971 the Supreme Court, in Griffin v. Breckinridge,
Plaintiff argues that her complaint satisfies the threshold requirement of a conspiracy between two or more persons. She has charged both a corporate defendant and individual defendants who constitute the offiсers and entire board of directors with conspiring to deprive her of her civil rights because of her sex; the individual defendants are alleged to “wholly dominate, operate and control” all of the business and financial affairs of the corporation. Plaintiff claims that as part of the conspiracy, the defendants advised the president and board of directors to deny plaintiff continued occupancy of the premises, refused to permit her to appear at any meeting of the board, refused to provide her with minutes of the meetings, rejected any payments offеred or any guarantee of her debt, harassed plaintiff by commencing legal proceedings of eviction and maliciously telephoned her at unreasonable hours to harass and annoy her. Defendants contend that no conspiracy can exist in this case since the corporation’s decisions were formulated and carried out by its board of directors, the individual defendants, all of whom acted solely within their official capacities. Accepting plaintiff’s allegations as true, the district court found that plaintiff failed to allege facts sufficient to constitute a conspiracy within the meaning of § 1985(3). Girard v. 94th Street and Fifth Avenue Corp., supra,
In Dombrowski v. Dowling,
“ • • • the statutory requirement that ‘two or more persons conspire . . . ’ is not satisfied by proof that a discriminatory business decision reflects the collective judgment of two or more executives of the same firm. . . . ”459 F.2d at 196 .
Accord, Baker v. Stuart Broadcasting Company,
Of the numerous authorities plaintiff cites, we find only Rackin v. University of Pennsylvania,
The situation at the University of Pennsylvania was unlike the situation here. Here there is but one single business entity with a managerial policy implemented by the one governing board, while at the University of Pennsylvania, each department had its own disparate responsibilities and functions so that the actions complained of by the plaintiff were clearly not actions of only one poli-cymaking body but of several bodies; thus the court correctly held that the allegations supported a claim of conspiracy among them. Here plaintiff’s allegations of multiple acts by the directors are not alleged to be other than the implementation of a single policy by a single policymaking body. Indeed, defendants here would seem to be safely within the area of the Dombrowski decision and quite outside that of Rackin.
In the instant case, the individual defendants comprise the board of directors through which the corporation acted. The lease agreement specifically required the consent of the board before any transfer of ownership interest could be effective. In claiming that defendants advised the board and president to deny her continued occupancy, refused to permit a personal appearance, provide her with minutes, accept payments or a debt guarantee and commenced legal action, plaintiff does not allege that any of the individual defendants acted in any other capacity than his official role of director. As found by the court below,
“Although the decision plaintiff challenges reflected the collective judgment of ‘two or more persons,’ the decision cannot be considered the product of a conspiracy when the board was merely carrying out the corporation’s managerial policy.”396 F.Supp. at 455-56 .
Plaintiff next argues that defendants conspired by maliciously telephoning her at unreasonable hours in order to harass her into giving up her struggle to maintain occupancy. Again, plaintiff does not assert that the individual defendants were acting other than as officers and directors; the complaint identifies them only by their corporate status. The fact that they were also shareholders and tenants of apartments in the defendant-corporаtion’s building does not aid plaintiff’s case, since she did not allege that the individual defendants were motivat
“[sjimply joining corporate officers as defendants in their individual capacities is not enough to make them persons separate from the corporation in legal contemplation. The plaintiff must also allege that they acted other than in the normal course of their corporate duties. . . . ‘[I]t is not alleged that the individual defendants committed any act of a personal nаture except in connection with the corporate affairs.’ ”
Accordingly, we hold that plaintiff’s § 1985(3) claim must be dismissed for failure to state an actionable conspiracy under the statute.
III. Plaintiff’s State Claim
Plaintiff also alleged a violation of New York Executive Law § 296(5)(a)(l). However, since we have dismissed plaintiff’s federal claims for failure to state a cause of action, we will avoid making “[n]eedless decisions of state law” and, exercising our discretion, dismiss her pendent state claim. United Mine Workers v. Gibbs,
Finally, the Court need not decide what effect the prior state court decision would have had upon the present action under the doctrine of res judicata.
The order of the district court is affirmed.
Notes
. 42 U.S.C. § 1983 reads:
“Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an'action at law, suit in equity, or other proper proceeding for redress.”
. The pertinent part of 42 U.S.C. § 1985(3) reads:
“If two or more persons in any State or Territory conspire or go in disguise on the highway or on the premises of another, for thе purpose of depriving, either directly or indirectly, any person or class of persons of the equal protection of the laws, or of equal privileges and immunities under the laws; . . . in any case of conspiracy set forth in this section, if one or more persons engaged therein do, or cause to be done, any act in furtherance of the object of such conspiracy, whereby another is injured in his person or property, or deprived of having and exercising any right or privilege of a citizen of the United States, the party so injured or deprived may have an action for the recovery of damages, occasioned by such injury or deprivation, against any one or more of the conspirators.”
. New York Executive Law § 296(5)(a)(l) reads:
“It shall be an unlawful discriminatory practice for the owner, lessee, sub-lessee, as-signee, or managing agent of, or other person having the right to sell, rent or lease a housing accommodation, constructed or to be constructed, or any agent or employee thereof:
(1) To refuse to sell, rent, lease or otherwise to deny to or withhold from any person or group of persons such a housing accommodation because of the race, creed, color, national origin or sex of such person or persons.”
. Indeed the state recently has enacted civil rights legislation which specifically prohibits cooperatives from refusing to consent to transfers because of sex. New York Civil Rights Law § 19-a(l) reads:
“No corporation formed for the purpose of the cooperative ownership of real estate within the state shall withhold its consent to the sale or proposed sale of certificates of stock or other evidence of ownership of an interest in such corporation bеcause of the race, creed, national origin, or sex of the purchaser.”
. Among others, plaintiff also cites Pendrell v. Chatham College,
Westberry v. Gilman Paper Company, supra,
Dissenting Opinion
(dissenting):
I respectfully dissent.
In my view the complaint alleges facts which are sufficient to state a substantial claim under 42 U.S.C. § 1985(3). Since appellant has also raised a claim under the laws of New York, we have pendent jurisdiction over the state law claim so long as “the relationship between [the federal] claim and the state claim pеrmits the conclusion that the entire action before the court comprises but one constitutional ‘case.’ ” United Mine Workers of America v. Gibbs,
But New York Civil Rights Law § 19-a (McKinney 1975-1976 Supp.) provides a basis for a pendent state claim
No corporation formed for the purpose of the cooperative ownership of real estate within the state shall withhold its consent to the sale or proposed sale of certificates of stock or other evidence of ownership of an interеst in such corporation because of the race, creed, national origin, or sex of the purchaser.
Id. It is obvious that the claim arising under this state statute
It is well to remember that federal jurisdiction is conferred here by 28 U.S.C. § 1343(1), (3), (4), and 28 U.S.C. § 1331(a).
Where, as here, allegations in a complaint are sufficient to state a § 1985(3) conspiracy claim, the trial court may resolve both the § 1985(3) claim and the state claim, or, which may be preferable, avoid resolving the § 1985(3) claim on the merits if the pendent state claim permits disposition of the case. Here, as in Siler v. Louisville & Nashville Railway Co.,
the right to decide all the questions in the case, even though it decided the Federal questions adversely tо the party raising them, or even if it omitted to decide them at all, but decided the case on local or state questions only.
To put it another way, resolution of the state law claim here alone is proper, and would permit avoidance of an “avoidable” decision under federal civil rights law. See P. Bator, P. Mishkin, D. Shapiro and H. Wechsler, Hart and Wechsler’s The Federal Courts and the Federal System (2d ed. 1973) at 922-23; C. Wright, Law of Federal Courts (1970) § 19, at 62-65. See generally Note, UMW v. Gibbs and Pendent Jurisdiction, 81 Harv. L.Rev. 657 (1968).
The complaint names three individual defendants as well as the corporate defendant and alleges that they have conspired with each other to deprive appellant of her civil and property rights. The court below found that appellant’s complaint did not state a claim under § 1985(3) because the court interpreted the complaint as failing to assert that the individual defendants were acting outside their official capacity as directors of the defendant corporation. Thus, the court reasoned, the actions of the indi
It is, to be sure, basic conspiracy law that a corporation cannot conspire with its agents or employees acting within the scope of their employment, Pearson v. Youngstown Sheet & Tube Co.,
Here the complaint alleges that the individual defendants “constitute the officers and the entire Board of Directors of the corporate defendant, and wholly dominate, operate and control all its business and financial affairs.” (Emphasis added.) These allegations alone sеrve to distinguish this case from Dombrowski, supra. As recognized by Judge McMillen in Cohen v. Illinois Institute of Technology,
Further, the complaint alleges that the defendants, “in furtherance of the said design and conspiracy,”
[a]dvised, caused, permitted and allowed the President and the Board of Directors of the corporate defendant to deny plaintiff permission and authority to continue occupancy of the subject premises.
Surely the implication of such an allegation is not that the defendants in their capacity as corporate agents advised themselves to act in their capacity as corporate agents. Rather, it is that defendants in their individual capacities determined according to personal motives that they would cause managerial action by the president and the board of directors to serve their individual interests. The crux of this allegation is that defendants aсted, albeit behind the screen of their corporate roles, in an individual and not an official capacity.
Here, indeed, the complaint also alleges that “the purpose, intent and result” of the conspiracy “was to enable, permit and allow the said defendants to receive for their own use and benefit and not for the benefit of plaintiff the sole and exclusive right to determine who shall own said shares of stock and the proprietary lease in the subject premises . .” (Emphasis added.) As shareholders in the cooperative corporation and as leaseholders in the building it would be to their individual financial benefit to have the Girard apartment revert to the corporation and it might very well be to their personal benefit to acquire the apartment for themselves. These allegations as to personal motives alone further serve to distinguish this case from the corporate-agent cases referred to above. See Nelson Radio & Supply Co. v. Motorola,
Moreover, acts engaged in as a part of the conspiracy by defendants allegedly include deliberate and malicious “telephone calls to plaintiff at unreasonable hours solely for the purpose of harassing and annoying her in order to force plaintiff to vacate said premises . . . .” Such conduct, if established, would surely be individual and noncorporate in nature; nor are these allegations to be lightly disregarded or passed off as being de minimis. Cf. Rackin v. University of Pennsylvania,
All of these factors in my view make the question whether the alleged § 1985(3) conspiracy existed one that certainly is substantial, so as to supply, even if it does not succeed on its own merits, clear pendent jurisdiction of the state law claim.
There is, to be sure, another question, left open in Griffin v. Breckinridge,
There is, in short, a claim under this federal civil rights statute to warrant federal jurisdiction under 28 U.S.C. § 1331(a) or § 1343(1), and under the principles of pendent jurisdiction above enumerated clearly to support considerаtion of the state law claim under the New York Civil Rights Law. I would reverse and remand for that consideration.
. See also Rosado v. Wyman,
. At the time appellant filed this action, New York Executive Law § 296(5)(a)(l) provided:
(a) It shall be an unlawful discriminatory practice for the owner, lessee, sub-lessee, as-signee, or managing agent of, or other person having the right to sell, rent or lease a housing accommodation, constructed or to be constructed, or any agent or employee thereof:
(1) To refuse to sell, rent, lease or otherwise to deny to or withhold from any person or group of persons such a hоusing accommodation because of the race, creed, color, national origin, sex, or disability of such person or persons.
Paragraph (1) has since been amended to include the words “or marital status” after the word “disability.”
. New York Civil Rights Law § 19-b (McKinney 1975-1976 Supp.) provides that “[a]ny person aggrieved by a violation of section nineteen-a . . . shall have a right of action in any court of appropriate jurisdiction to restrain such violation and for other equitable remedies, including such affirmative and other relief as may be necessary to undo the effect of such violation.”
. Probably §§ 1331(a) and 1343(1) are the most applicable, § 1331(a) because the jurisdictional amount test is clearly satisfied and it is property rights of which appellant claims to be deprived, see Hague v. CIO,
. While in Baker v. Stuart Broadcasting Co.,
. Appellees have argued that this suit is barred by the res judicata effect of a prior state court action brought by appellant against these same appellees. In the state court litigation, however, appellant merely contended that the appellees’ refusal to assign to her the shares of the corporation owned by her former husband was in breach of the lease agreement and state corporations law. Mo violation of civil rights was alleged in the state court action, and the state judge, in ruling against appellant’s claim, stated only that appellees have the right to refuse to consent to the transfer of a cooperative lease for any reason “except, of course, those prohibited by the Civil Rights Law.” Girard v. 94th Street and Fifth Avenue Corp., Civ. No. 15173/73 (Supreme Court, New York County, July 8, 1974) (memorandum opinion). Only the other day, in Herendeen v. Champion International Corp.,