Eaton v. Photocomm

• Court: District Court, D. New Hampshire
• Decided: November 23, 1998
• Docket: CV-98-057-JD
• Status: Published

Opinion

Eaton v. Photocomm CV-98-057-JD 11/23/98 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

Robert E. Eaton, Jr. and Cynthia R. Brighton

v. Civil No. 98-57-JD

Photocomm, Inc., et al.

O R D E R

Plaintiffs pro se, Robert E. Eaton, Jr., and Cynthia R.

Brighton, bring suit against a group of defendants alleging

federal securities fraud and racketeering, and state law claims

including fraud, breach of fiduciary duty, interference with

business relationship, and defamation. Plaintiffs' claims arise

from the 1997 takeover of Photocomm, Inc. by defendant, ACX

Technologies. Defendants move, individually and jointly, to

dismiss plaintiffs' complaint contending that plaintiffs failed

to properly allege subject matter jurisdiction and that as to

particular defendants, personal jurisdiction is lacking, venue i

improper, service of process was improper, and as to Photocomm,

plaintiffs failed to state a claim (documents nos. 9, 11, 27, 29

30, and 47). For the reasons that follow, the issues raised in

defendants' motions cannot be resolved on the present record. Discussion

Pursuant to Local Rule 4.3(d)(1)(A), the magistrate judge

reviewed plaintiffs' pro se complaint to determine whether the

court has subject matter jurisdiction over the claims alleged.1

The magistrate judge held that plaintiffs had established subject

matter jurisdiction based on the parties' diversity of

citizenship, 28 U.S.C.A. § 1332, and the presence of federal

guestion claims, 28 U.S.C.A. § 1331.2 Plaintiffs' complaint

defendants challenge plaintiffs' pro se status, particularly the leniency afforded pro se pleadings, on grounds that plaintiff Robert E. Eaton, Jr., is a lawyer and has been a pro se party in at least one prior legal action. The evidence of Eaton's status as a lawyer referenced by defendants is that he included "JD" after his name in correspondence. From the complaint and attached materials, it appears that Eaton does not practice law professionally. C f . Rhode Island Hosp. Trust Nat. Bank v. Howard Communications, 980 F.2d 823, 829 n.8 (1st Cir. 1992) (pro se plaintiff who was partner in a law firm not afforded "indulgence" of pro se litigants). Absent additional evidence of Eaton's proficiency in the legal profession or with the type of litigation involved in this case, the court declines to hold him generally to the stringent standards of an experienced lawyer. In addition, plaintiff Cynthia Brighton is not alleged to be a lawyer and is proceeding pro se on her own behalf. See 28 U.S.C.A. § 1654.

defendants also challenge plaintiffs' complaint on grounds that it lacks a jurisdictional statement as reguired by Federal Rule of Civil Procedure 8(a). As subject matter jurisdiction may be established by reading the entire complaint, particularly in the case of a pro se complaint, and as the magistrate judge has found jurisdiction in this case, the complaint will not be dismissed for lack of a jurisdictional statement at this time. See, e.g., Ayala Serrano v. Lebron Gonzalez, 909 F.2d 8, 14 (1st Cir. 1990). In addition, if necessary, plaintiffs may be reguired to amend to allege proper jurisdiction. See Odishelidze v. Aetna Life and Casualty Co., 853 F.2d 21, 24 (1st Cir. 1988) .

2 cites RICO (Racketeer Influenced and Corrupt Organizations Act)

as grounds for two claims. It is less clear that plaintiffs

intended to maintain a securities fraud action under federal

securities statutes. Despite plaintiffs' failure to cite

applicable federal statutes in the complaint, their generic

reference to securities fraud is construed to allege federal

statutory securities law violations.

Both RICO and the Securities Exchange Act have specific

provisions for venue and service of process. See 18 U.S.C.A. §

1965; 15 U.S.C.A. § 78(aa); see also, e.g., PT United Can Co. v.

Crown Cork & Seal Co., 138 F.3d 65, 70 (2d Cir. 1998); ESAB

Group, Inc. v. Centricut, Inc., 126 F.3d 617, 626 (4th Cir.

1997), cert, denied, 118 S. C t . 1364 (1998); Kaplan v. Reed, No.

97-S-857, 1998 WL 761475 at *10 (D. Colo. 1998); Securities &

Exchange Commission v. Brooks, No. 94-167-JD, 1994 WL 369553 at

*2 (D.N.H. 1994). Based on allegations in the complaint,

plaintiffs' affidavits, and plaintiffs' objection to defendants'

motions to dismiss, it is unlikely that venue is proper in New

Hampshire. The pOarties, however, did not address the specific

federal statutory provisions applicable to venue. Given the

factual nature of an inguiry into proper venue, the court will

3 not undertake the necessary analysis sua sponte, and instead

offers the parties an opportunity to address the appropriate

statutory requirements.

Defendants' present motions to dismiss for lack of personal

jurisdiction, improper venue, and improper service of process are

dismissed without prejudice to refile as set forth herein.

Defendants who continue to challenge venue in this district shall

file, within twenty (20) days of the date of this order, a new

motion to dismiss for improper venue. If plaintiffs do not

concur in defendants' motion, plaintiffs shall have twenty days

from the date defendants' motion is filed to file an appropriate

response: (1) a motion to transfer to another district pursuant

to 28 U.S.C.A. § 1404(a) or § 1406(a); or (2) an objection to

defendants' motion supported with a memorandum of law including

appropriate record citations and legal authority. In the event

the court finds that venue is appropriate in this district,

defendants shall have twenty days from the date of the order on

venue to file motions addressing personal jurisdiction, service

of process, and allegations of subject matter jurisdiction.

Defendant Photocomm also moved to dismiss on grounds that

plaintiffs admitted in another motion in this case that they did

not seek damages against Photocomm. Photocomm argues that

plaintiffs do not state claims against Photocomm. In response,

4 plaintiffs seem to agree saying that Photocomm is not liable for

the actions of any of its officers, directors, or those appointed

by them. Plaintiffs also say that it is too early to know if

Photocomm would be liable for its officers' and directors'

illegal acts based on indemnity agreements and that they do not

want to burden Photocomm's present shareholders with liability

for the "pirate management." Based on those statements, the

court concludes that plaintiffs do not intend to bring claims

against Photocomm in their current complaint. All claims, to the

extent any were alleged, are therefore dismissed as to Photocomm.

Conclusion

For the foregoing reasons, defendants' motions to dismiss

(documents nos. 9, 11, 27, 29, and 30) are denied without

prejudice to refile as provided in this order. Defendant

Photocomm's motion to dismiss (document no. 47) is granted.

SO ORDERED.

Joseph A. DiClerico, Jr. District Judge

November 23, 1998

cc: Robert E. Eaton, Jr., pro se Cynthia R. Brighton, pro se Sulloway & Hollis Garry R. Lane, Esguire