Monaghan v. Deakins

798 F.2d 632

• Court: Court of Appeals for the Third Circuit
• Decided: July 31, 1986
• Docket: No. 85-5589
• Status: Published

Opinions

OPINION OF THE COURT

GIBBONS, Circuit Judge:

Three individuals and three business entities appeal from a final order dismissing their complaint against several officials of the New Jersey Division of Criminal Justice and from the denial of their motion for a preliminary injunction. The plaintiffs-appellants sought, damages, permanent injunctive relief, and preliminary injunctive relief. The district court held that the rule of Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971), required dismissal of their complaint. We reverse the order dismissing the complaint but affirm the denial of the plaintiffs’ motion for a preliminary injunction.

I. The Complaint

The complaint alleges that on October 4, 1984 a judge of the Superior Court of New Jersey issued a warrant authorizing officers of the Division of Criminal Justice to search the premises of Foundations and Structures, Inc. (Foundations) in Tuckahoe, New Jersey and to seize certain documents and business records. Foundations, owned by Theodore DeSantis, William Monaghan, and John James, is engaged in the engineering and construction business. Monaghan, DeSantis, and James are also owners of Monaghan Associates and MJD Construction Company, Inc.

About 7:00 a.m. on October 5, 1984 defendants Deakins and Sost, officers of the Division of Criminal Justice, awakened Monaghan at his home. Monaghan previously had testified before a Cape May County grand jury investigating allegations of government corruption in that county, and Deakins and Sost sought Monaghan’s cooperation in connection with an investigation of such corruption. Monaghan told them that his attorney had advised him not to answer questions about the subjects under inquiry unless the attorney was present. He then called the attorney and arranged for a meeting with Deakins and Sost later that day. Despite this arrangement, Deakins and Sost threatened to focus their investigation on Monaghan and his businesses if he did not cooperate.

While Deakins and Sost were visiting Monaghan, two other defendants called on DeSantis at a construction site in Sea Isle City, New Jersey; they also attempted to enlist his cooperation in the corruption investigation. When DeSantis insisted that he would not answer questions unless his attorney were present, these defendants threatened him in the same way Deakins and Sost had threatened Monaghan.

After these early morning attempts to conscript Monaghan and DeSantis had failed, certain other defendants arrived at the premises of Foundations to execute the warrant. Those defendants occupied the premises for nearly eight hours, barricading the entrance to the site with a state vehicle. They searched exiting vehicles, recorded serial numbers of construction machinery on the site, and took photographs. They used the company telephone without authorization and denied such use to others. They required every person— nonemployees included — who happened to be at the multi-acre site to line up and produce identification. Among those detained were Monaghan, DeSantis, and James.¹

Eventually, the defendants loaded into state vehicles cartons containing hundreds of documents, many of which were not within the scope of the warrant and many of which were necessary to the operation of the business. Among the papers indiscriminately seized were dozens of attorney-client communications, some of which were in a folder plainly marked “Grand Jury” and thus were readily identifiable as such.² As of the date of the filing of this opinion, some eighteen months after the October 1984 raid, the state has not indicted or charged any of the plaintiffs, and it retains possession of most of the seized documents.

II. The District Court Proceedings On December 26, 1984 the plaintiffs filed in the District of New Jersey a complaint in which they alleged that the October 5 search violated the fourth amendment. They charged that the search was unlawfully motivated in that it sought no information that could not have been obtained in an orderly manner by a subpoena duces tecum and that it was but a pretext designed to coerce Monaghan, DeSantis, and James into cooperating in an investigation the defendants were conducting. The plaintiffs sought return of the seized documents and damages pursuant to section 1983, 42 U.S.C. § 1983 (1982).

The defendants moved for dismissal of the complaint, contending principally that the district court should abstain because of then-ongoing state proceedings. The plaintiffs countered with a motion for a preliminary injunction ordering the return of the documents. In an order dated August 6, 1985 the district court dismissed the plaintiffs’ complaint in its entirety. It held that abstention was appropriate and found further that, even if it were not, the plaintiffs did not qualify for a preliminary injunction. Monaghan v. Deakins, Civil Action No. 84-5369 (D.N.J. Aug. 6, 1985).

III. Abstention and Dismissal of the Complaint

The plaintiffs first challenge the district court dismissal, on abstention grounds, of their claims for damages and permanent injunctive relief. Because the district court dismissed the complaint, we must take its allegations to be true.³ Our review is plenary, and we can affirm only if, assuming the truth of those allegations, the district court could not have granted, as a matter of law, any of the requested relief. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-02, 2 L.Ed.2d 80 (1957).

A. The Damage Claim

The plaintiffs urge that whatever else may be said in favor of the order dismissing the complaint, the district court plainly erred in dismissing their claim for money damages and attorney fees. We agree. It is settled in this circuit that a district court, when abstaining from adjudicating a claim for injunctive relief, should stay and not dismiss accompanying claims for damages and attorney fees when such relief is not available from the ongoing state proceedings. Crane v. Fauver, 762 F.2d 325, 328-29 (3d Cir.1985) (reversing district court dismissal of claims for damages and attorney fees); Williams v. Red Bank Board of Education, 662 F.2d 1008, 1022-24 (3d Cir.1981) (same). The defendants do not contend that the ongoing state proceedings at issue in this case offer the plaintiffs any opportunity to recover either damages or attorney fees. Nonetheless, they offer several arguments in support of the district court’s dismissal of the damage claims.

The defendants’ principal contention is that the eleventh amendment, as interpreted by the Supreme Court in Pennhurst State School & Hospital v. Halderman, 465 U.S. 89, 97-24, 104 S.Ct. 900, 906-21, 79 L.Ed.2d 67 (1984), bars the district court from awarding damages against them individually, even with respect to alleged violations of the federal Constitution. The state officials neither cite any authority nor proffer any credible argument for such an extreme proposition, and we reject it.

Alternatively, the state urges us to affirm the district court’s Younger -based dismissal of the damage claim on the ground that the plaintiffs could have asserted that claim in a state tribunal. That, of course, is true of every section 1983 claim, see, e.g., Maine v, Thiboutot, 448 U.S. 1, 100 S.Ct. 2502, 65 L.Ed.2d 555 (1980) (affirming judgment in section 1983 claim brought in Maine state court), and it was true of the damage claims asserted in Crane and Red Bank. It, however, is no reason for a district court to abstain from adjudicating a cognizable section 1983 claim.

No argument advanced by the defendant-appellants convinces us that the holdings of Crane and Red Bank do not control this case or that those cases are no longer valid. Consequently, we will reverse the district court’s dismissal of the plaintiffs’ claims for damages and attorney fees.

B. The Claim for Return of the Property

Whether the district court should have dismissed the plaintiffs’ request for return of the seized property presents a closer issue. To resolve this issue, we must decide whether the Younger doctrine requires a district court to abstain in a case in which the federal plaintiff is the target of an ongoing New Jersey state grand jury investigation.⁴

As a preliminary matter, we address the plaintiffs’ contention that, because of the type of relief they sought, the Younger rule is not applicable in this case. It is true that in most cases in which federal courts have abstained under the Younger doctrine the federal plaintiffs ‘sought relief that would have enjoined ongoing state proceedings. And it is undisputed that in this case the plaintiffs did not seek to enjoin any state proceeding but rather simply requested the district court to order the state to return the seized documents. Yet, for the district court to have entertained that request, it would have had to adjudicate the plaintiffs’ constitutional claim. The Supreme Court has held that Younger bars federal adjudication of constitutional claims if there is a qualifying, ongoing state proceeding in which those claims could bé adjudicated, regardless of the relief requested by the federal plaintiff. See Samuels v. Mackell, 401 U.S. 66, 73, 91 S.Ct. 764, 768, 27 L.Ed.2d 688 (1971) (relying on Younger to dismiss a claim for declaratory relief and holding that, in cases in which injunctive relief is improper, declaratory relief also is improper); Fair Assessment in Real Estate Association, Inc. v. McNary, 454 U.S. 100, 107-15, 102 S.Ct. 177, 181-85, 70 L.Ed.2d 271 (1981) (relying on Samuels in holding that Younger bars district courts from adjudicating section 1983 claims that would require resolution of constitutional issues already before state tribunals). We believe this rule applies to this case and therefore hold that the fact that the plaintiffs sought only a return of the documents does not except them from Younger abstention.

Having concluded this, we move to the principal issue presented by this appeal— whether the existence of the state grand jury proceeding required the district court to abstain under Younger. This is an issue of first impression in this court.⁵

In most of the cases in which the Supreme Court has applied the Younger rule, the federal plaintiffs were defendants in state civil or criminal proceedings ongoing at the time they filed their federal complaints. See, e.g., Younger v. Harris, 401 U.S. 37, 41, 91 S.Ct. 746, 749, 27 L.Ed.2d 669 (1971) (federal plaintiff was defendant in state criminal action that state was “actually prosecuting” when federal complaint was filed); Huffman v. Pursue, Ltd,., 420 U.S. 592, 595-98, 95 S.Ct. 1200, 1204-05, 43 L.Ed.2d 482 (1975) (federal plaintiffs were defendants in nuisance action brought by county officials in state court and already adjudicated by state trial court); Judice v. Vail, 430 U.S. 327, 328-30, 97 S.Ct. 1211, 1213-15, 51 L.Ed.2d 376 (1977) (federal plaintiff was judgment debtor from completed state proceeding in which he had refused to participate); Trainor v. Hernandez, 431 U.S. 434, 435-38, 97 S.Ct. 1911, 1913-15, 52 L.Ed.2d 486 (1977) (federal plaintiffs were defendants in civil suit ongoing at time they filed federal complaint); Moore v. Sims, 442 U.S. 415, 421, 99 S.Ct. 2371, 2376, 60 L.Ed.2d 994 (1979) (federal plaintiffs were party to state-court, child-custody proceeding at time they filed federal complaint). However, in two cases, Hawaii Housing Authority v. Midkiff, 467 U.S. 229, 104 S.Ct. 2321, 81 L.Ed.2d 186 (1984), and Middlesex County Ethics Committee v. Garden State Bar Association, 457 U.S. 423, 102 S.Ct. 2515, 73 L.Ed.2d 116 (1982), the federal plaintiffs were not parties to any trial-like proceeding. Because, according to the complaint in this case, the state has filed no charge, either civil or criminal, against the plaintiffs, such guidance as is available must be found in these two cases.

In Hawaii Housing the Supreme Court held that a district court should address the merits of a constitutional challenge to a state condemnation statute even though at the time the federal complaint was filed the state statute compelled the federal plaintiff to participate in a state arbitration proceeding. Writing for the Court, Justice O’Con-nor stated that, “[sjince Younger is not a bar to federal court action when state judicial proceedings have not themselves commenced, abstention for ... administrative proceedings [is] not required”. 104 S.Ct. at 2328 (citation to Middlesex County, 457 U.S. 433, 102 S.Ct. at 2522 omitted).

In Middlesex County the Court held that Younger barred a district court from hearing a constitutional challenge to New Jersey’s attorney-discipline rules when at the time of the filing of the federal complaint the state’s disciplinary organization formally had charged the federal plaintiff with a violation of the rule he sought to challenge in the district court. See 457 U.S. at 437, 102 S.Ct. at 2524. The Court based its holding on the fact that, although the disciplinary body was not the final arbiter of constitutional claims, its proceedings were, under New Jersey law, part of a judicial proceeding pending in the New Jersey Supreme Court. Id. at 433-34, 102 S.Ct. at 2522.

The holdings and rationales of these cases adumbrate a clear line: Younger abstention is appropriate only when there is pending a proceeding in which a state court will have the authority to adjudicate the merits of a federal plaintiff’s federal claims. Indeed, the Court emphasized in Middlesex County that the critical factor was the availability in the pending state proceeding of an adequate opportunity to adjudicate the constitutional claims raised in the federal litigation. 457 U.S. at 432, 102 S.Ct. at 2521.

The defendant state officials do not urge that a New Jersey grand jury has the authority to adjudicate anything. A grand jury proceeds ex parte. N.J. Crim.Prac.R. 3:6-6. It can issue an indictment, which is no more than a charge that the defendant has violated the criminal law. Only when such a charge is filed does there commence a judicial proceeding that affords the adjudicatory opportunity that Hawaii Housing and Middlesex County require.⁶ No indictment had been returned against the plaintiffs at the time they filed their complaint in the district court. Thus there was not, for Younger purposes, any ongoing state proceeding warranting abstention by the district court.

The state responds, nevertheless, that a grand jury proceeding should fall within the Younger rule because such a proceeding is important to the state and to some extent is subject to judicial supervision. Neither reason serves to distinguish Hawaii Housing. Condemnation proceedings are also important to the state, and those proceedings are subject to judicial supervision.

The state officers urge further that, even if no judicial proceeding was pending when the plaintiffs filed their complaint, there was available at that time a state judicial remedy by which the plaintiffs could have obtained the return of their property; they contend that the availability of such a remedy mandates district court abstention. While it may be true that such a remedy was available to the plaintiffs,⁷ in no case has the Supreme Court or this court ever turned the propriety of a Younger dismissal upon the mere availability of a state judicial proceeding. Indeed, the holding of Hawaii Housing is directly in opposition to such an extension of Younger.

The state officials’ final position is that a Younger dismissal was proper because after the plaintiffs filed their federal complaint some proceedings with respect to the property in issue occurred before the Superior Court Judge who authorized the search warrant. They refer specifically to the fact that, while the state officials’ motion to dismiss and the plaintiffs’ cross-motion for return of the documents were pending before the district court, the Division of Criminal Justice, proceeding ex parte, obtained an order directing certain of the plaintiffs to show cause why certain of the seized documents that had been sealed by consent should not be unsealed. It is the appellant state officials’ position that these proceedings were ongoing judicial proceedings justifying district court abstention.

The Supreme Court has held that in limited circumstances a district court should abstain from adjudicating a federal complaint if relevant state proceedings commence after the filing of the federal complaint. See Hicks v. Miranda, 422 U.S. 332, 348-50, 95 S.Ct. 2281, 2291-92, 45 L.Ed.2d 223 (1975). However, such abstention is inappropriate in this case for two reasons. First, since the trial court granted a Rule 12(b)(6) motion — which confines our review to the complaint — the post-complaint proceedings are not relevant to our review of the district court action. Second, if they were relevant, the contention would not be dispositive, except, perhaps, with respect to issues of privilege and work product tendered by the Division of Criminal Justice to the state court with respect to the sealed documents. The claim for return of property with respect to all the other seized materials would remain.

At the time the plaintiffs filed their federal complaint no state judicial proceeding in which they could have adjudicated their constitutional claim for return of the seized property was pending. We therefore hold that the district court erred in dismissing the claim on abstention grounds.⁸

IV. The Motion for the Preliminary Injunction

The plaintiffs moved in the district court for a preliminary injunction ordering the return of the seized documents. The district court denied this motion, and the plaintiffs appeal.

Unlike our review of the dismissal of the complaint under Rule 12(b)(6), which is plenary, we review the denial of a preliminary injunction for an abuse of discretion. See Klitzman, Klitzman & Gallagher v. Krut, 744 F.2d 955, 958 (3d Cir.1984). In assessing the plaintiffs’ motion the district court was obliged to consider whether the movants had made a strong showing of likelihood of success on the merits, whether they had shown that without the requested relief they would suffer irreparable injury, whether other parties would be harmed by the grant of the requested injunction, and whether the public interest favored such relief. Id. at 958-59.

The plaintiffs rely principally upon assertions that they likely will prevail on the merits of their claim and that they will suffer irreparable harm. They concede, however, that any harm to their business is mitigated by the fact that, although the state officials retain possession of the records, their agents have been granted access to them. As to the likelihood of their succeeding on the merits, there are many issues, both factual and legal, that the state raises. Thus we cannot say that the district court abused its discretion in denying the plaintiffs’ request for a preliminary injunction.⁹

IV.

The judgment dismissing the complaint will be reversed. The order denying the motion for a preliminary injunction will be affirmed. The case will be remanded for proceedings consistent with this opinion.

1 . While the search warrant was being executed, some of the defendants served on the plaintiffs four subpoenas duces tecum issued by a state grand jury. The records called for in one of these subpoenas were the same as those listed in the search warrant except that some predated those called for by the warrant. Another subpoena was addressed to the custodian of records of Monaghan Associates. A third contained a hand-written list of titles of file folders examined by the defendants during their eight-hour . execution of the warrant; the warrant did not authorize the seizure of any of these folders. A fourth subpoena duplicated one of the other three except for its issue date.

On November 1, 1984 Foundations responded to the first subpoena by producing the documents that it requested and that had not already been seized. Plaintiffs subsequently moved to quash two of the other subpoenas, and the state withdrew them.

2 . On October 23, 1984 and November 14, 1984 counsel for Foundations and two other representatives of that corporation were allowed access to the sealed boxes for the purpose of making an inventory. During the course of that inventory dozens of documents that are subject to the attorney-client or work-product privileges were identified. Some of these documents were sealed with the consent of a Deputy Attorney General in the Division of Criminal Justice pending a judicial resolution of the validity of claims of privilege.

3 . In their appellate brief the defendants concede this:

For purposes of this appeal ..., we assume arguendo that the allegations are correct [see Fed.R. of Civ.Proc. 12(b)(6) ] and argue that this Court should affirm the District Court’s Order dismissing appellants’ claims based upon the abstention doctrine.

Appellees’ Brief at 8 n. 9.

4 . The plaintiffs argue on appeal that the district court was clearly erroneous in finding as a matter of fact that they were the subject of a New Jersey grand jury investigation. In support of its finding the district court relied upon two sources — an affidavit filed by a Deputy Attorney General of New Jersey’s Division of Criminal Justice and a transcript from a New Jersey state court proceeding, see Monaghan, slip op. at 8 & n. * — but neither of these sources support the finding. However, in light of our resolution of the legal issues presented by this appeal, we do not reach this factual challenge.

5 . In Kaylor v. Fields, 661 F.2d 1177 (8th Cir. 1981), the Eighth Circuit suggested that a grand jury investigation is a proceeding for which Younger abstention was appropriate. See id. at 1182. However, in that case, while a criminal charge was pending against one of the two federal plaintiffs, there was no threatened prosecution against the other. Thus the suggestion probably is dictum. In any event the Kaylor opinion offers no analysis of the issue.

6 . A New Jersey grand jury can also return a presentment. N.J.Crim.Prac.R. 3:6-9. A presentment is not even a charge. It affords no opportunity to adjudicate anything, even after it has been filed.

7 . The defendants point to the New Jersey rule that provides that

[a] person claiming to be aggrieved by an unlawful search and seizure and having reasonable grounds to believe that the evidence obtained may be used against him in a penal proceeding, may apply to the Superior Court only and in the county in which the matter is pending or threatened to suppress the evidence and for the return of the property seized____

N.J.Crim.Prac.R. 3:5-7. They contend that the plaintiffs could have applied to the Superior Court Judge who issued the search warrant — the judge who happens also to be the one to whom the state grand jury would return an indictment — for a return of the property. This contention raises several technical problems, not the least of which is that no penal proceeding, so far as the complaint shows, is pending or threatened against any of the plaintiffs. However, even if the rule were inapplicable, the plaintiffs could have brought an action in the Superior Court in the nature of replevin. See N.J.Stat.Ann. § 2A:59-1 (West 1952). Thus there is no question but that relief was (and presumably still is) available in the state court had the plaintiffs chosen to sue there.

8 . This conclusion obviates the need to address the plaintiffs’ alternative contention that abstention was improper because their complaint pleaded bad faith and harassment by the state official defendants.

9 . That is not to say that the plaintiffs’ federal case should be left in perpetual limbo. Our affirmance of the denial of a preliminary injunction is without prejudice to its renewal should the state official defendants retain possession of plaintiffs’ property and should nothing further transpire before the grand jury.