Peter J. Lynch v. Michael D. Holzknecht

• Court: District Court, Virgin Islands
• Decided: February 6, 2026
• Docket: 3:25-cv-00019
• Status: Unknown

Opinion

IN THE DISTRICT COURT OF THE VIRGIN ISLANDS DIVISION OF ST. THOMAS AND ST. JOHN

PETER J. LYNCH, ) ) Plaintiff, ) ) v. ) Case No. 3:25-cv-0019 ) MICHAEL D. HOLZKNECHT, ) ) Defendant. ) )

APPEARANCES

PRO SE PETER J. LYNCH, ESQ., FLAG LA F W O RV IP LAINTIFF ST. THOMAS, VI

PAUL L. GIMENEZ, ESQ. GENERAL COUNSEL JUDICIAL F BO R R A D N E C F H E

N O D F A T N H T E

VIRGIN ISLANDS ST. THOMAS, VI MEMORANDUM OPINION Robert A. Molloy, Chief Judge. THIS MATTER comes before the Court on Defendant’s Motion to Dismiss, filed on July 11, 2025. (ECF No. 8.) Plaintiff filedSe aen opposition on August 1, 2025, and Defendant filed a reply thereto on August 13, 2025. ECF Nos. 10 and12. For the reasons stated below, the Court will grant the motion and will dI.i smBiAssC tKhGisR cOasUeN wDit hout prejudice with leave to amend. The Court finds the following facts for purposes of disposition of the instant motion. Plaintiff, Peter J. Lynch (“Lynch”), is a citizen of Florida who is a regularly admitted attorney M emorandum Opinion Page of citizen of Missouri who resigned froIdm. his position as Virgin Islands Designated Disciplinary Counsel on or about July 16, 2021. at ¶¶ 4, 7. HolzkneIdcht also resigned from the practice of law in the Virgin Islands effective February 25, 2022. . at ¶ 8. Lynch alleges that on December 4, 2023, Holzknecht used his smart phone to call the Brevard County Sheriff’s Office (“BCSO”) in Titusville, Florida, and obtained confidential information maintained by the BCSO on the Florida Criminal InformatioInd .Center (“FCIC”) and National Criminal Information Center (“NCIC”) computer network. at ¶ 12. Lynch alleges that this confidIedn.tial information was non-public information that an arrest warrant

was issued for Lynch. Lynch further alleges that between December 4, 2023, and January 3, 2024, Holzknecht caused the confidential non-public information about him to be transmitted to persons at the Virgin Islands Supreme Court, including members of the Virgin Islands OfficIde .of Disciplinary Counsel, as well as to persons at the law firm of Lee J.I Rd.ohn and Associates. at ¶¶ 13, 14. The arrest warrant was executed on February 7, 2024. at ¶ 18. Lynch avers that after the Office of Disciplinary Counsel received the confidential non- public information, it filed a Petition for Interim Suspension on March 1, 2024, seekIding to suspend Lynch’s Virgin Islands law license since he had been charged with a felony. . at ¶

17. However, the Brevard County State Attorney filed a Notice of NoI dIn. formation on March 15, 2024, deciding not to move forward with charges against Lynch. at ¶ 18. Thereafter, Lynch further avers that on March 21, 2024, Attorney Donnelly of the Office of Disciplinary Counsel withdrew the Petition for Interim Suspension after hIed w. as able to demonstrate to the Supreme Court that he had not been charged with a felony. at ¶ 19. Lynch alleges in his complaint that notwithstanding the withdrawal of the petition for M emorandum Opinion Page of throughout the ViIrdgin Islands legal community causing him serious financial and reputational harm. . at ¶ 20. Lynch commenced this action on May 8, 2025, alleging causes of action against Holzknecht seeking injunctive relief pursuant to 42 U.S.C. § 1983 and damages for violating teht.e s Veqir. gin Islands Computer Crimes and Technology Act of 2013, codified at 14 V.I.C. § 459, Holzknecht filed the instant motion to dismiss arguing that the Court lacks subject matter jurisdiction and that Lynch failIsI .t o D sItSaCteU aS ScIlOaiNm upon which relief can be granted.

Holzknecht filed the dismissal motion pursuant to Rules 12(b)(1) and (b)(6) of the Federal Rules of Civil Procedure. The arguments raised under these rules are addressed bAe. lowDi. v ersity Jurisdiction

First, Holzknecht argues that this Court lacks subject matter jurisdiction because Lynch fails to properly allege that the amount in controversy reaches the threshold of $75,000.00. Because federal district courts are courts of limited jurisdiction, a court may exercise subject matter jurisdiction based only upon feSdeeer, ael .qgu., eDsetLioang ajurrdies dvi.c tTioounr, sd iVvIe rLstidty.

jurisdiction, and/or admiralty/maritime jurisdiction. , Case No. 3:20-cv-0093, 2022 U.S. Dist. LEXIS 34405, at *6-7, 76 V.I. 749 (D.V.I. Feb. 28, 2022); 2m8u stU.S.C. §§ 1331-33. If the Court "lacks subject-matter jurisdiction, the [C]ourt dismiss the action." Fed. R. Civ. P. 12(h)(3) (emphasis added). Under Rule 12(b)(1), a party may present either a facial or factual challenge to subject matter jurisdiction, but a factual chaSlleeen Mgeo mrteanys been bvr. oFuirgsht tF oedn.l yS aavft. e&r Lthoae ndefendant files an answer M emorandum Opinion Page of (3d Cir. 1977). With a facial challenge, as we have in this case, the Court "will consider 'whether the allegations on the face of the comNpelllaoimnt ,v t. aDkeelna wasa rteru Cet,y a. lDleogme efsatcitcs R seulfsf.i Scieecntito tno invoke the jurisdiction of the district court.'" Taliaferro v. Darby Twp. Zoning Bd. , 145 F. Supp. 3d 470, 476 (E.D. Pa. 2015) (quoting , 458 F.3d 181, 188 (3dK Ceihrr. P2a0c0k6a)g).e sT, hInec .p vla. Finidtieflfc obre,a Irnsc .the burden of proving subject matter jurisdiction exists. , 926 F.2d 1406, 1409 (3d Cir. 1991). Here, Lynch alleges jurisdictionS euender federal question (28 U.S.C. § 1331) and diversity jurisdiction (28 U.S.C. § 1332). Compl. ¶ 1. Assuming—without deciding—that

there is no federal question jurisdiction, the Court concludes that it po ssesses diversity jurisdiction to hear this matter. Diversity jurisdiction is established whenthe citizenship of all plaintiffs is completely diverse from the citizenship of all defendants and the amount of controversy exceeds $75,000.00. 28 U.S.C. § 1332(a). In the matter at bar, Defendant cSoenetests jurisdiction on the grounds that the amount in controversy is less than $75,000.00. ECF No. 9 at 11-13. Lynch allegesS eine the complaint that he is a citizen of Florida and that Holzknecht is a citizen of Missouri. Compl. at ¶ 3, 4. Lynch further alleges that due to what he believes

are the illegaIdl .actions engaged in by Holzknecht, he suffered financial harm and harm to his reputation. at ¶ 2Id0.. More importantly, Lynch alleges that the amount in controversy exceeds $75,000.00. at ¶ 5. In reviewing the complaint, “the sum claimed by the plaintiff controls if the claim is apparently made in good faith. It must appear to a legaSlt .c Pearutal iMnteyr ctuhrayt tInhde ecmla.i mCo i.s v r. eRaelldy Cfoarb l eCsos. than the jurisdictional amount to justify dismissal.” , 303 U.S. 283, 288–89 (1938). Based on the allegations, the Court M emorandum Opinion Page of concludes, that based on the face of the complaint, Lynch has properly plead allegations that wB.o Fualdil uinrveo tkoe S tthaitse C ao uCrlat’ism d iversity jurisdiction.

Next, Holzknecht argues that the complaint should be dismissed because it fails to state claims upon which relief can be granted. When reviewing a motion to dismiss brought pursuant to Federal Rule of Civil Proce.d"u Irne r 1e 2In(bsu)(r6a)n, cteh eB rCookuerrta cgoen Asntrtuitersu stth Lei ctiogm. plaint "in the light most favorable to the plaintiff , 618 F. 3d 300, 314 (3d Cir. 2010). The Court must accept as true all the factual allegations con. tAalisnteodn

ivn. P tharek ceormplaint and draw all reasonable inferences in favor of the non-moving party , 363 F. 3d 229, 233 (3d Cir. 2004). "In deciding a Rule 12(b)(6) motion, a court must consider only the complaint, exhibits attached to the complaint, matters of public record, as well as undisMpuatyeedrl yv . aBuetlhicehnictikc documents if the complainant's clSaeime as lasore A binagseerd vu. pGorena tth Aemse. dAosscuurm. eCnot.s." , 605 F. 3d 223, 230 (3d Cir. 2010). , Civil Action No. 2020-0005, 2022 U.S. Dist. LEXIS 171487, at *6 (D.V.I. Sept. 2022) ("At the Rule 12(b)(6) stage, 'courts generally consider only the allegations contained in th1e. cSoemctpiolani n1t9, 8e3xh ibits attached to the complaint and matters of public record.' . . .”).

In Count I, Lynch seeks injunctive relief under 42 U.S.C. § 1983. Holzknecht argues that Count I should be dismissed because there is no allegation that he was acting under color of state law. “To establish a valid claim under section 1983, a claimant must allege that: (1) the conduct complained of was committed by one acting under color of state law; and (2) the conduct deprived him oBfe rcikgehttts v, p. MrivciFlaegdedse,n or immunities secured by the Constitution or laws M emorandum Opinion Page of West v. Atkins 5689, *8 (E.D. Pa. Apr. 26, 1993) (citing 42 U.S.C. § 1983; Lugar v. Edmon, d4s8o7n OUi.Sl .C o4.2, 48 (1988)). Only state action is actionable under section 1983. , 457 U.S. 922, 929 (1982). In order to be considered a state actor for purpose of liability under section 1983, the actor must be an officer or paid employee oIdf .the State or a private person “jointly engaged with state officials in the prohibited action.” at 941 (opining that “[t]o act under ‘color of law’ does not require that the accused be an officer of the States. It is enough that he is a willful participant in joint activity with the State or its agents”) (citation omitted). In other words, “[m]isuse of power, possessed by virtue of state law and made possible only

because the wrongdUoneitresd i sS tcaltoetsh ve.d C lwasitshic the authority of state law, is action taken ‘under color of’ state law.” , 313 U.S. 299, 326 (1941). In this case, Lynch alleges that on December 3, 2024, Holzknecht obtained confidential non-public information from the BCSO and disseminated that information to certain individuals at the Office of Disciplinary Counsel and at the law firm of Rohn and Associates. Lynch further alleges that the dissemination of this information caused him financial harm. According to the complaint, at the time Holzknecht obtained and disseminated the information, he was not an attorney licensed in the Virgin Islands nor was

he employed in the Virgin Islands Office of Disciplinary Counsel. The complaint is void of any allegation that he was an officer or paid employee of the Virgin Islands or any other State. The complaint is also devoid of any allegation that Holzknecht was acting jointly with any M emorandum Opinion Page of state official. Thus, Lynch has failed to state a claim that Holzknecht was acting under color 0F 1 of st2a. teV liarwgi.n I s lands Computer Crimes and Technology Act Holzknecht also argues that Lynch has failed to state a claim under the Virgin Iselta snedqs Computer Crimes and Technology Act of 2013 (“VICCTA”), codified at 14 V.I.C. § 459, . Generally, this statute makes it a crime to access a computer for an improper purpose. Section 468 clearly allows any person injured as a result of committing a violation of this statuteS teoe bring a civil action against the violator for certain damages, costs and other judicial relief. 14 V.I.C. § 468(a). It is unclear, however, which provision of the VICCTA Lynch is proceeding under. Under a liberal reading of the complaint, it is clear that neither sections 461 (access to computer for fraudulent purposes), 462 (access in order to damage), 463 (computer theft), 464 (computer trespass), nor 466 (violation of restraining order) apply to the allegations in this case. To the extent Lynch is relying on section 465, that statute prohibits any person from transmitting “any communication by computer or other electronic device to any person or causes any Ipderson to be contacted for the sole purpose of harassing that person or his or her family.” . at § 465(a). Lynch makes no such allegation in the

complaint. Thus, Count II will be dismIiIsIs. eCdO fNoCr LfaUiSluIrOeN to state a claim.

While the Court finds that it has subject matter jurisdiction over the complaint, the Court finds that Lynch has failed to state a claim under section 1983 or the VICCTA

1 Memorandum Opinion Page of 1F 2 warranting dismissal of these claims. The Court, howSeevee rA, lwstiolnl p ve. rPmaritk eLrynch leave to file an amended complaint to cure the pleading deficiencies. , 363 F.3d 229, 235 (3d Cir. 2004) (stating that "even when a plaintiff does not seek leave to amend, if a complaint is vulnerable to 12(b)(6) dismissal, a District Court must permit a curative amendment, unless an amendment would be inequitable or futile"). An appropriate Order follows. D ated: Robert A. Molloy ROBERT A. MOLLOY Februa ry 6, 20 26 sC/h ief Judge _________