Ohio ex rel. Moore v. Brahma Investment Group

• Court: Court of Appeals for the Sixth Circuit
• Decided: January 22, 2018
• Docket: 17-3458
• Status: Unpublished

Opinion

NOT RECOMMENDED FOR PUBLICATION File Name: 18a0043n.06 FILED No. 17-3458 Jan 22, 2018 DEBORAH S. HUNT, Clerk UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

STATE OF OHIO ex rel. KEITH D. MOORE, ) Relator, ) ) Plaintiff-Appellee, ) ) JOSHUA BERKOWITZ, ) ) Plaintiff, ) ) ON APPEAL FROM THE CITY OF NORWOOD, OHIO; THOMAS F. ) UNITED STATES DISTRICT WILLIAMS, individually and as Mayor, ) COURT FOR THE ) SOUTHERN DISTRICT OF Appellees, ) OHIO v. ) ) BRAHMA INVESTMENT GROUP, INC.; ) CALIFORNIA PACIFIC HOSPITALITY, LLC, ) ) Defendants-Appellants. )

BEFORE: SUHRHEINRICH, SUTTON, and BUSH, Circuit Judges.

SUHRHEINRICH, Circuit Judge. After receiving numerous complaints of illicit drug

sales and prostitution at the Quality Hotel and Suites Central in the City of Norwood, Hamilton

County, Ohio, the Law Director for the City of Norwood, Relator Joshua Berkowitz (“Relator”

or “Berkowitz”),1 obtained a temporary injunction declaring the hotel a nuisance and shutting it

down. Brahma Investment Group, Inc. (“Brahma”) and California Pacific Hospitality, LLC

(“Cal Pac”) (collectively “Appellants”), the owners of the property, removed the matter to

federal district court on diversity jurisdiction grounds, and filed a counterclaim against Relator

1 Appellants later brought claims against Berkowitz’s successor, Keith D. Moore, also in his official capacity. No. 17-3458, Ohio ex rel. Keith D. Moore, et al. v. Brahma Investment Group, Inc. et al.

and a third-party complaint against the City of Norwood (“City”), and its mayor, Thomas

Williams (“Williams”), alleging that Relator, Norwood, and Williams were motivated by

discriminatory animus in bringing the nuisance action. The district court ultimately dismissed

Relator and granted judgment on the pleadings to Norwood and Williams. On appeal,

Appellants claim that the district court erred in issuing the preliminary injunction and dismissing

their counterclaims and third-party complaint.

I.

From January 2012 through May 2014, Norwood’s police department received over thirty

criminal offense reports of felony drug sales and prostitution. The police department and the

Federal Bureau of Investigation (“FBI”) also investigated. On June 2, 2014, Berkowitz filed a

verified petition pursuant to Ohio Revised Code §§ 3767.02-.03 in the Hamilton County Court of

Common Pleas against Brahma (but not against co-owner Cal Pac) seeking to have the property

declared a public nuisance. The Hamilton County Court of Common Pleas entered an ex parte

temporary restraining order the same day and closed the property. On June 16, 2014, the state

court held an evidentiary hearing on Berkowitz’s motion for a preliminary injunction, and set a

trial date of July 23, 2014. On June 25, 2014, the state court granted a preliminary injunction

ordering the property to remain closed pending the court’s ruling on Relator’s petition for

permanent injunction (which never occurred).

At some point prior to the preliminary injunction hearing, Brahma transferred its interest

in the property to George W. Fels, CPA, as assignee for the benefit of creditors, and a case was

opened in probate court. On July 1, 2014, Brahma removed the nuisance action to the district

court. On July 28, 2014, Cal Pac filed a “Request of Interested Non-Party California Pacific

Hospitality, LLC for Release of Property.” The district court denied the request as moot at that

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time because the parties were negotiating the sale of the property. After negotiations failed, on

July 30, 2015, the district court granted Appellants’ motion for a declaration that the preliminary

injunction order entered by the state court expired pursuant to statute on June 1, 2015.

Meanwhile, on December 9, 2015, the property was transferred by a receiver’s sale to

Intervenor Unlimited Hotels, Inc. (“Unlimited”).

On March 8, 2016, Brahma filed an answer to the verified complaint and Appellants filed

their counterclaims against the City and third party complaint against Williams. Appellants

alleged that the temporary restraining order was motivated by discriminatory animus in violation

of 42 U.S.C. §§ 1981, 1983, and 1985; and that the failure to name Cal Pac in the state action

violated due process. They further claimed that the City and Williams’ actions interfered with

their property rights under the Ohio Constitution and amounted to conversion of those interests.

On May 2, 2016, Appellees City and Williams filed their answer to the counterclaims and

third party complaint and also filed a motion for judgment on the pleadings. On October 18,

2016, Relator and Unlimited filed a joint motion to dismiss the in rem claims because the

preliminary injunction had expired and the Hotel was under new ownership. On March 29,

2017, the district court granted the motion to dismiss the state-law nuisance claim, noting that

Brahma agreed that the state-law nuisance claim and demand for injunctive relief were moot.

The court therefore dismissed Relator and Unlimited from the action.

The same day, by separate order, the district court granted Appellees City’s and

Williams’ motion for judgment on the pleadings. Noting that the claims against the City were

based on the alleged wrongdoing of Berkowitz, the district court held that the City was not liable

under §§ 1981 or 1983 because (1) a municipality such as the City cannot be liable for its

employee’s behavior on a respondeat superior theory; (2) Berkowitz was acting on behalf of the

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State of Ohio, not the City, when he brought the nuisance action pursuant to Ohio Revised Code

§ 3767.03; and (3) Appellants had not alleged any unconstitutional policy or custom by the City.

The court also held that Williams was not liable under §§ 1981 or 1983 for failing to supervise

Berkowitz because Appellants had not alleged facts to support a finding of deliberate

indifference to his actions. The court found no § 1985 conspiracy to selectively enforce the Ohio

nuisance statute against Appellants as a pretext for discrimination because they failed to allege

that Williams acted outside his scope of employment as mayor to satisfy the exception to the

intracorporate conspiracy doctrine. Finally, the court rejected Appellants’ conversion claim

because the facts alleged did not show that Williams’ behavior was sufficiently wanton or

reckless to qualify for the exception to statutory immunity for employees of political

subdivisions, see Ohio Rev. Code § 2744.03(A)(6), or that a statutory exception applied to the

City’s immunity, see Ohio Rev. Code § 2744.02(B).

This appeal followed.

II.

Appellants raise two issues. First, they challenge the state court’s order granting

Relator’s preliminary injunction. That order is moot however, because as the district court

noted, it expired on June 1, 2015, per statutory fiat. See Ohio Rev. Code § 3767.06(A). We

therefore lack jurisdiction over this claim. See Univ. of Tex. v. Camenisch, 451 U.S. 390, 398

(1981). Furthermore, Appellants also lack standing, because as of December 9, 2015, they no

longer had any ownership interest in the property. See Brownlow v. Schwartz, 261 U.S. 216,

217-18 (1923).

Appellants also challenge the district court’s dismissal of their counterclaims against the

City and their third-party claims against Williams. Because Berkowitz brought the nuisance

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action on behalf of the State, not the City, all claims against the City and Williams were properly

dismissed. See Ohio Rev. Code § 3767.03; Cady v. Arenac Cty., 574 F.3d 334, 345 (6th Cir.

2009) (holding that county prosecutor was acting as agent of the State of Michigan rather than

the county when he issued criminal charges); Pusey v. City of Youngstown, 11 F.3d 652, 659 (6th

Cir. 1993) (same). Under Monell, the City cannot be liable for Berkowitz’s actions simply

because it is Berkowitz’s employer, and Williams cannot be liable simply because he was

Berkowitz’s supervisor. See Monell v. Dep’t of Soc. Servs., 436 U.S. 658, 690 (1978).

Appellants have not alleged a specific custom or policy of allowing Berkowitz (or any Law

Director) to bring illegal actions or turn a blind eye to the filing of discriminatory lawsuits.

See id. at 694 (to establish municipal liability under § 1983, a plaintiff must identify a municipal

policy or custom that caused the plaintiff’s injury); Amerson v. Waterford Twp., 562 F. App’x

484, 492 (6th Cir. 2014) (failure-to-supervise claim requires the plaintiff to show that the city

acted with deliberate indifference to the constitutional violation and that it was the moving force

behind the violation). In short, even if Relator violated Appellants’ federal and state rights, the

City and Williams are not liable.

This leaves solely the possibility of a conspiracy claim in violation of § 1985(3). To state

such a claim, plaintiffs must prove a conspiracy to deprive a person or class of persons of the

equal protection of the laws, and an act in furtherance of the conspiracy which causes the

constitutional deprivation. Johnson v. Hills & Dales Gen. Hosp., 40 F.3d 837, 839 (6th Cir.

1994). Appellants have made only conclusory allegations to support their claim of illegal

discriminatory conduct. Although they allege that the majority shareholders of Brahma and Cal

Pac are of Asian-Indian ethnicity who espouse the Hindu religion they do not allege that the

City, Williams, and their agents even knew of the ethnicity and religious orientation of the

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property owners, or that they treated similarly situated persons differently. See 42 U.S.C.

§ 1985(3); Estate of Smithers ex rel. Norris v. City of Flint, 602 F.3d 758, 765 (6th Cir. 2010)

(“To sustain a claim under section 1985(3), a claimant must prove both membership in a

protected class and discrimination on account of it.”); Bartell v. Lohiser, 215 F.3d 550, 559 (6th

Cir. 2000) (§ 1985(3) requires that a claimant demonstrate that the conspiracy was motivated by

a class-based animus).

Furthermore, Appellants made only conclusory allegations to support their claim of

illegal, discriminatory conduct, and made no allegations of a shared plan or agreement among

Berkowitz (acting as an agent of the State), the City, and Williams to violate their federal civil

rights. See Gutierrez v. Lynch, 826 F.2d 1534, 1538-39 (6th Cir. 1987) (§ 1985 conspiracy

claims must be pled with specificity). See generally Fritz v. Charter Twp. of Comstock, 592 F.3d

718, 722 (6th Cir. 2010) (Rule 12(c) applies the same standards as for a motion under Rule

12(b)(6); the plaintiff must plead sufficient factual matter to render the claim plausible, a legal

conclusion couched as a factual allegation is not sufficient).

Finally, as the district court held, Appellants have not set forth sufficient facts to show

that Williams was engaged in personal pursuits rather than acting within the scope of his

employment as mayor to save this claim from the intracorporate conspiracy doctrine.

See Johnson, 40 F.3d at 839-40, 841 (6th Cir. 1994) (intracorporate conspiracy doctrine holds

that employees who work for the same agency cannot conspire with themselves; creating an

exception where employees act outside the course of their employment).

III.

For the foregoing reasons, we AFFIRM the judgment of the district court.

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