Florian SEVER, Plaintiff-Appellee,
v.
ALASKA PULP CORPORATION; Dennis Huse; George Woodbury;
Jesse Cline; Frank Roppel; George Ishiyama;
Wayne Funk; Ralph Fenner,
Defendants-Appellants.
Florian SEVER, Plaintiff-Appellant,
v.
ALASKA PULP CORPORATION; Dennis Huse; George Woodbury;
Jesse Cline; Frank Roppel; George Ishiyama;
Wayne Funk; Ralph Fenner, Defendants-Appellees.
Nos. 91-36067, 91-36074.
United States Court of Appeals,
Ninth Circuit.
Submitted August 19, 1992.*
Decided Oct. 26, 1992.
Terrence G. Reed, Asbil, Junkin & Myers, Washington D.C., for plaintiff-appellant and cross-appellee Florian Sever.
Wayne W. Hansen, Paul D. Swanson, Michael B. King, Lane Powell Spears Lubersky, Seattle, Wash., for defendants-appellees and cross-appellants Alaska Pulp Corp., Dennis Huse, George Woodbury, Jesse Cline, Frank Roppel, George Ishiyama, Wayne Funk and Ralph Fenner.
Appeal from the United States District Court for the District of Alaska.
Before: HUG, D.W. NELSON, and T.G. NELSON, Circuit Judges.
D.W. NELSON, Circuit Judge:
I. OVERVIEW
Plaintiff Florian Sever ("Sever"), a former employee of Alaska Pulp Corporation (APC), brought suit against APC and a number of APC management employees (collectively, "defendants") under 42 U.S.C. § 1985(3), 42 U.S.C. § 1983 and under RICO. Sever alleged that the defendants had taken retaliatory actions against him after he wrote articles critical оf APC and testified before Congress in a manner contrary to APC's economic interests. Sever also brought six state law claims. The district court dismissed his RICO and section 1983 action for failure to state a claim, and granted summary judgment in favor of the defendants on the § 1985(3) claims. The district court then dismissed the state claims without prejudice, and remanded them to state court.
Sever appeals the dismissal and grant of summary judgment. Defendants cross-appeal, claiming that because Sever's state law claims are preempted by the National Labor Relations Act (NLRA), the district court should have dismissed them with prejudice. We affirm the district court in all respects.
II. BACKGROUND
APC is a timber company involved in timber harvesting in the Tongass National Forest. It maintains and оperates a pulp mill in Sitka, Alaska. For many years, APC has been the beneficiary of several federal laws subsidizing its lumbering activities in the Tongass. During the mid-1980s, Congress undertook a general review of legislation affecting the Tongass; this included a review of APC's contracts and subsidies. Congress held hearings where many Alaska citizens testified, and ultimately passed the Timber Reform Act of 1990.
Florian Sever was employed as a millwright at APC. In July 1986, Sever's union went on strike. During August of 1986, Sever wrote two letters critical of APC to the local newspaper, one of which was published. In early 1987, while the strike was still on, Sever got a job as an airplane mechanic at Mountain Aviation in Sitka. In April of 1987, the workers voted to decertify the union and the strike was abandoned. Sever's namе was placed on APC's rehire eligibility list and he indicated to APC that he wanted to be reinstated.
In May 1987, Sever traveled to Washington, D.C. to testify before a House Subcommittee in support of the Tongass Timber Reform Act. The Act contained language that would have ended Congress's automatic appropriations to APC. Subsequently, on June 30, 1987, Sever was fired from his job with APC.1 According to Sever, after his discharge, he was unable to find other work in Sitka because APC blacklisted him. In particular, Sever alleges that on January 14, 1988, he was fired from his job with Mountain Aviation as a result of APC pressure on Mountain Aviation's proprietor.
Sever filed an unfair labor practice charge with the National Labor Relations Board (NLRB). The Administrative Law Judge (ALJ) concluded in part that Sever's published letter to the editor was a substantial cause of Sever's discharge. Unhappy with the ALJ's decision, APC appealed to the NLRB. The NLRB concluded that Sever had been fired because he wrote the letter and because he testified before Congress. Therefore, the NLRB found that APC had committed an unfair labor practice and affirmed the ALJ. Subsequently, we affirmed that decision. NLRB v. Alaska Pulp Corp.,
Sever then filed suit in federal court, alleging that the defendants conspired to deprive him of protected rights in violation of 42 U.S.C. § 1985(3), as well as various state law contract and tort claims. In an amended complaint, Sever added a RICO claim, alleging that defendants engaged in a pattern of racketeеring activity that damaged his ability to obtain employment or earn a living, and a claim under 42 U.S.C. § 1983. In its October 15, 1990 order, the district court granted defendants' motion for summary judgment on Sever's first complaint and dismissed his section 1983 action, but permitted him to amend his complaint to provide further support for the alleged RICO violation. Ultimately, however, the court dismissed Sever's fourth amended complaint for failure to state a claim under RICO, and dismissed the pendent state claims without prejudice.
III. DISCUSSION
1. Failure to State a RICO Claim
In his fourth amended complaint, Sever alleged that the defendants had violated two provisions of RICO--18 U.S.C. § 1962(c) and 18 U.S.C. § 1962(b). As discussed below, the district court dismissed the § 1962(c) claim because it found that Sever had failed to allege a "person" or "persons" distinct from the "entеrprise," and dismissed the § 1962(b) claim because Sever had failed to allege a "pattern of racketeering." The district court erred in its treatment of the § 1962(c) claim--under Ninth Circuit law, the distinction identified by the district court is not necessary to such a claim. However, the court correctly concluded that Sever failed to allege a "pattern of racketeering." As allegation of a pattern of racketeering is an element of both § 1962(b) and § 1962(c) claims, we affirm the dismissal of both claims on this ground.
a. Person/Enterprise Distinction under 18 U.S.C. § 1962(c)
18 U.S.C. § 1962(c) provides that:
It shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indireсtly, in the conduct of such enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt.
The district court dismissed Sever's section 1962(c) claim because it found that Sever did not allege a "person" or "persons" distinct from the "enterprise." This conclusion was erroneous.
For the purposes of section 1962(c), RICO plaintiffs must allege a defendant--the "person" or "persons"--who is distinct from the "enterprise" whose business the defendant is conducting. Under RICO, an "enterprise" is " 'a being different from, not the same as or part of, the person whose behavior the act was designed to prohibit.' " Rae v. Union Bank,
Sever's fourth amended complaint alleged that APC was the enterprise, and that the individual officers and employees of APC were the "persons." Relying on Data Controls North, Inc. v. Financial Corp. of America, Inc.,
Data Controls notwithstanding, the district court's holding is contrary to controlling Ninth Circuit law.
In United States v. Benny,
This decision makes it clear that the inability of a corporation to operate except through its officers is not an impediment to section 1962(c) suits. That fact poses a problem only when the corporation is the named defendant--when it is both the "person" and the "enterprise." In this case, however, Sever named the several individual officers as defendants/persons, and APC as the enterprise. Therefore, he has satisfied this allegation requirement.
Although the district court erred in this regard, we affirm the dismissal because we agree with the district court that Sever has failed to allege a pattern of racketeering activity, as required by both section 1962(b) and section 1962(c).
b. Pattern of Racketeering Activity under 18 U.S.C. § 1962(b)
18 U.S.C. § 1962(b) provides that:It shall be unlawful for any person through a pattern of racketeering activity or through collection of an unlawful debt to acquire or maintain, directly or indirectly, any interest in or control of any enterprise which is engaged in, or the activities of which affect, interstate or foreign commerce.
18 U.S.C. § 1962(b).3 The district court dismissed Sever's section 1962(b) claim because it found that Sever had not alleged a "pattern of racketeering activity." We agree.
The identification of a "pattern of racketeering activity" has proven a сhallenging task for courts. In H.J. Inc. v. Northwestern Bell Telephone Co.,
Based on our reading of Northwestern Bell and other RICO cases, we see two problems with Sever's allegations of a pattern of racketeering activity. First, although Sever alleges a number of "acts," APC's collective conduct is in a sense a single episode having the singular purpose of impoverishing Sever, rather than a series of separate, related acts. In this respect, the conduct complained of is analogous to the conduct in cases like Medallion Television Enterprises, Inc. v. SelecTV of California, Inc.,
Second, and more importantly, we find that Sever's allegations do not satisfy the continuity prong of the Northwestern Bell test. Unlike the realty company in Ticor, whose use of forgeries to its advantage on three separate occasions "suggest[ed] that this practicе had become a regular way of conducting business at [the company]," Ticor,
For these reasons, we affirm the district court's dismissal of both the sections 1962(b) and 1962(c) claims. Sever has not alleged a pattern of racketeering activity, an allegation necessary to both those claims.
2. Summary Judgment on the 42 U.S.C. § 1985(3) Claim
42 U.S.C. § 1985(3)--the Ku Klux Klan Act of 1871--was enacted by the Reconstruction Congress to protect individuals--primarily blacks--from conspiracies to deprive them of their legally protected rights. At issue here is the scope of classes on which Congress intended to confer the protection of § 1985(3).
To bring a cause of action successfully under § 1985(3), a plaintiff must allege and prove four elements:
(1) a conspiracy; (2) for the 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; and (3) an act in furtherance of this conspiracy; (4) whereby a person is either injured in his person or property or deprived of any right or privilege of a citizen of the United States.
United Brotherhood of Carpenters and Joiners of America v. Scott,
In the years since Griffith, courts have struggled to determine whether and when § 1985(3) applies in contexts not involving race, and have produced opinions that are all over the map. See Canlis v. San Joaquin Sheriff's Posse Comitatus,
Applying these standards, we have held that women purchasers of disability insurance (who alleged that the insurance was sold to them at discriminatory rates) are a class within the meaning of § 1985(3), reasoning that it is "well established that gender-based classifications may result in invidious discrimination." Life Insurance Co. of North America v. Reiсhardt,
In Scott, its most recent word on this issue, the Supreme Court threw into doubt the validity of many post-Griffith lower court cases extending protection to a broad range of classes by observing that "it is a close question whether § 1985(3) was intended to reach any class-based animus other that animus against Negroes and those who championed their cause, most notably Republicans." Scott,
In the instant case, Sever alleges that the defendants have conspired to deprive him of his legally protected right to petition Congress for redress of grievances.6 He further contends that the class deprived of this right is constituted of "those who testify before Congress on matters of public concern. This class includes those citizens who attempt to petition the government for redress of wrongs by their appearance and testimony before Congress." The district court rejected his argument because it found that any deprivation of Sever's rights was not animated by "class-based, invidiously discriminatory animus."
We agree with the district court. First, we find that Sever's claim is precluded by Scott. If APC and the individual defendants conspired to harass plaintiff, they did so because they perceived that Sever's actions were harmful to APC's economic interests. The defendants did not harass and blacklist Sever out of some desire to prеvent generally people from exercising their right to petition Congress. Like the defendants in Scott who were trying to protect union jobs, the defendants here were concerned with protecting the government contracts and subsidies that allowed APC to make money. The fact that in one case the harassment was physical and in the other it took the form of blacklisting does not alter the fact that in both cases the conduct was motivated by a concern for economic well-being. Therefore, Sever's claim falls squarely within the scope of Scott.
Second, we find that Sever's claim is precluded by the analysis generally employed in the Ninth Circuit. Obviously, "individuals who wish to petition the government" have not been judiciаlly designated a suspect or quasi-suspect group. Nor does Sever point to any federal statute reflecting a recognition that such individuals need special protection to exercise their rights.7 Finally, even if such a class were protected, Sever would have a hard time showing that defendants' conduct was motivated by "invidiously discriminatory animus toward him" as a person wishing to petition Congress. See Lapin v. Taylor,
Summary judgment was properly granted to the defendants on Sever's Section 1985(3) claim.
3. 42 U.S.C. § 1983 Claim
Sever's complaint with respect to his section 1983 claim is that the district court erred in cutting off discovery before it dismissed the claim. This panel reviews decisions regarding discovery orders for an abuse of discretion. Mackey v. Pioneer Nat'l Bank,
It is readily apparent that the district court did not err here. To bring a section 1983 action, a plaintiff must allege that the defendants were acting "under color of law." In this case, we simply can discern no state action. The fact that defendants rely heavily on government contracts does not, by itself, transform their action into state action. Sever's allegation that he was not hired for a city job for which he was eligible, presumably because the defendants pressured the city, does not change our analysis because the city of Sitka is not a defendant in the suit. The only way Sever can allege state action for the purposes of section 1983 is to allege that the defendants took some actions that were influenced by the state's policies, funding decisions, or regulations. See Rendell-Baker v. Kohn,
4. Dismissal of Pendent State Law Claims Without Prejudice
In its October 15, 1990 order, the district court held that Sever's state law causes of actions were not preempted by federal labor law. In its final order of April 9, 1991, after it dismissed all the federal claims, the court dismissed the state law claims without prejudice. Subsequently, in response to a motion by the plaintiff, сourt entered a May 7, 1991 order remanding the state law claims to state court. Bringing a cross-appeal, the defendants ask us to review the district court's remand order. They argue that the district court should have dismissed the state law claims with prejudice because the claims are preempted by the National Labor Relations Act ("NLRA").
a. Appealability of Remand Order
As an initial matter, we must resolve the question whether the order of remand is appealable at all. Despite Sever's vigorous arguments to the contrary, we find that is. The rules regarding the reviewability of remand orders are as follows:
An order remanding an action, if reviewable at all, is ordinarily reviewed by mandamus. Thermtron Products, Inc. v. Hermansdorfer,
[Where removal is not pursuant to § 1447(d), a] question exists as to whether the order is reviewable by direct appeal [or only on a writ of mandamus].... [A] remand order may be reviewed on appeal as a final collateral order under 28 U.S.C. § 1291 if the order resolves the merits of a matter of substantive law apart from any jurisdictional decision.
Survival Systems v. United States District Court for the Southern District of California,
In this case, Sever has not suggested that the district dismissed the state law claims because the original removal was "improvident or without jurisdiction." Therefore, the remand order is reviewable. Moreover, the content of the remand order was not limited to a jurisdictional decision--that is, the district court did not simply exercise its discretion not to hear the pendent state law claims. Rather, it made the substantive determination that the state law claims were not preempted by federal law. As a result, we conclude that the defendants are entitled to appellate review of the order of remand. See Scott v. Machinists Automotive Trades Distriсt Lodge No. 190,
b. Preemption of State Law Claims
Sever brought six state law claims: 1) breach of implied covenant of good faith and fair dealing; 2) termination in violation of State of Alaska public policy; 3) intentional interference with contractual relations with Mountain Aviation; 4) intentional interference with prospective contractual relations; 5) intentional infliction of emotional distress; and 6) negligent infliction of emotional distress. The question before is whether these claims are preempted by the NLRA.
Parties may not escape the preemptive effect of the NLRA by casting thеir actions as tort rather than contract claims. However, the Supreme Court has held that the key to determining the scope of preemption is not how the complaint is cast, but whether the claims can be resolved only by referring to the terms of the collective bargaining agreement. Allis-Chalmers Corp. v. Lueck,
In this case, as the district court observed, "Plaintiff claims he was dismissed in part because of his union activities and in part because of his testimony before Congress. While plaintiff's union activities are arguably within protected activity contemplated by § 7 of the NLRA, his testimony before Congress on the Tongass Timber Reform Act does not call into play any relationship with a collective bargaining agreement. Indeed, at the time plaintiff testified before Congress the strike was called off and the union decertified." In other words, the district court believed that the relationship between the defunct union and APC would only be peripherally affected, if at all, by resolution of the state law claims.
A closer look at Sever's claims lends support to the district court's conclusion. Sever's third and fourth claims, for example, have absolutely nothing to do with his original employment at APC, or even with the terms of his discharge. Rather, the basis of those intentional interference with contract claims are his allegations that APC interfered with his ability to obtain employment elsewhere in Sitka. Determining whether in fact APC engaged in such conduct would not require referral to or reliance upon Sever and APC's collective bargaining agreement, nor would it bear upon or alter the terms of their current employment relationship. (Again, we note that the conduct Sever complains of occurred after the union had been dissolved.)
Similarly, Sevеr's claims of intentional and negligent infliction of emotional distress do not allege conduct covered by some collective bargaining or employment agreement. This court has in the past found such claims preempted only when the alleged conduct is in fact covered by some preexisting agreement. Compare Truex v. Garrett Freightlines, Inc.,
In short, we find that Sever's state tort claims can be resolved without reference to any agreements between Sever and APC. Thus, Congress's interest in developing a consistent federal law in this area is not be threatened. Carpenters,
IV. CONCLUSION
Although the district court erred in finding that Sever had not stated a RICO claim under section 1962(c) because he failed to allege a "person" distinct from the "enterprise," we AFFIRM the court's dismissal of the RICO claims on the ground that Sever failed to allege a pattern of racketeering activity. We AFFIRM the grant of summary judgment on Sever's section 1985(3) claim, and AFFIRM the district court's decision to cut off discovery with respect to his section 1983 claim. Finally, we hold that the district court's remand of the state claims is reviewable on its merits, and AFFIRM the district court's holding that the state law claims were not preempted by federal law.
AFFIRMED.
Notes
The panel unanimously find this case suitable for decision without oral argument. Fed.R.App.P. 34(a) and Ninth Circuit Rule 34-4
It is unclear to us whether Sever was actually reinstated and then fired, or simply told that he would not be reinstated
Our interpretation of the pleading requirements of section 1962(c) is in accord with at least five other circuits. See, e.g., Miranda v. Ponce Federal Bank,
Unlike section 1962(c), section 1962(b) contains no requirement that the "person" and the "enterprise" be distinct
Although the Supreme Court once interpreted § 1985(3) as limited to state or public conspiracies, see Collins v. Hardyman,
In Schultz, the representatives tried to thwart the consideration of the Governor's appointees by refusing to attend a joint legislative session called for that purpose. The president of the Alaska senate and others, with the help of the senate sergeant-at-arms and several troopers, forced the recalcitrant legislators to attend. Subsequently, one of the legislators brought a Section 1985(3) action
The district court agreed that Sever had alleged the deprivation of a legally protected interest. The defendants take issue with this determination, contending that no legally protected right is at stake. Because we find that Sever's section 1985(3) was properly dismissed on other grounds, we need not reach this issue
The only statutes to which Sever refers are those which make it a crime to harass, intimidate or tamper with witnesses in official proceedings. See 18 U.S.C. §§ 1512, 1513. Given that these statutes were just as likely enacted to ensure that criminal prosecutions would proceed smoothly, we cannot agree that Congress meant to designate witnesses as deserving of special protection. Moreover, as the district court noted, Congress has not passed civil statutes giving witnesses a right of action against those who harass or intimidate them. Such a statute would be the logical analogue of Title VII, and would be better suited to the argument that Congress has designated witnesses a class needing protection under section 1985(3)
Compare Paige v. Henry J. Kaiser Co.,
Sever argues that these cases lend support to his argument that the remand order is not appealable even where district courts determine that state law claims are not preempted. However, as noted, these cases explicitly state that the orders of remand are unappealable precisely because the district courts did not make a determination with regard to preemption.
The only state law cause of action about which there is some doubt is the tort of breach of implied covenant of good faith and fair dealing. In his complaint, Sever specifically refers to express and implied rights arising out of his contractual relationship with APC. Because the claims place at issue the rights and responsibilities of the parties stemming from the contract, this claim would seem to be preempted by the NLRA. See Paige,
The district court, however, "collapsed" this cause of action into Sever's second state law cause of action by noting that under Alaska law, a breach of the implied covenant of good faith and fair dealing is a violation of public policy. See Luedtke v. Nabors Alaska Drilling, Inc.,
