Brown v. Burch, Porter & Johnson, PLLC, 2016 WL 9448027 (6th Cir. Nov. 21, 2016):

 

*1 Pro se litigant Kim Brown appeals a district court judgment dismissing his civil action filed pursuant to the Racketeer Influenced and Corrupt Organizations Act (“RICO”), see 18 U.S.C. § 1962–1968, and Tennessee law. (Case No. 15–6242.) The Board of Education of Shelby County Schools (“Board”) and related defendants have filed a cross-appeal of the judgment. (Case No. 15–6243.) This case has been referred to a panel of the court that, upon examination, unanimously agrees that oral argument is not needed. See Fed. R. App. P. 34(a).

 

After the Memphis City Schools¹ began proceedings in 2013 to discharge Brown from employment as a tenured teacher, Brown filed suit against his employer and its successor, the Shelby County Schools, pursuant to Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e–5–2000e–17; 42 U.S.C. § 1983; the Consolidated Omnibus Budget Reconciliation Act, 29 U.S.C. §§ 1161–1168; and Tennessee law. Judgment was entered in favor of the defendants on July 14, 2015. Brown v. Bd. of Educ. of the Shelby Cty Sch., No. 2:13–cv–02586–SHM–dkv (W.D. Tenn. July 14, 2015) (“Brown I”). We affirmed the district court’s judgment on April 26, 2016, Brown v. Shelby Cty. Bd. of Educ., No. 15–5787 (6th Cir. Apr. 26, 2016), and denied Brown’s petition for en banc rehearing on September 6, 2016.

 

Meanwhile, in March 2015, Brown filed this second action (“Brown II”) in federal court contesting his discharge from employment as a teacher and amended his complaint as of right a few days later. The amended complaint named as defendants: the attorney who conducted Brown’s “teacher tenure hearing” and recommended his dismissal, Tannera Gibson; the law firm where Gibson worked, Burch, Porter & Johnson, PLLC (“Burch Porter”); Memphis City Schools; the Board; three attorneys employed by the Board—Cecilia Barnes, Valerie Speakman, and Jennifer Collins; the principal who supervised Brown, Tameka Allen; the law firm which represented the Board at the hearing, Lewis Thomason, PLLC; and two attorneys with Lewis Thomason—Cheryl Estes and Kenneth Walker. Brown sought monetary relief from the defendants on claims of: (1) legal malpractice; (2) defamation/libel; (3) negligence; (4) breach of fiduciary duty; (5) aiding and abetting; (6) aiding and abetting a breach of fiduciary duty; (7) unjust enrichment; (8) negligent misrepresentation; (9) violation of the Tennessee Teacher Tenure Act (“Tenure Act”), Tenn. Code Ann. § 49–5–512; (10) breach of covenant of good faith and fair dealing; (11) fraud; (12) civil RICO; (13) civil conspiracy; and (14) false light.

 

Motions to dismiss for failure to state a claim were filed by the defendants. Brown filed a response to the motion to dismiss by Burch Porter and Gibson and stipulated to the dismissal of Lewis Thomason, Estes, and Walker. No response was filed to the joint motion to dismiss by Memphis City Schools, the Board, and its employee-defendants (collectively, the “Board defendants”). Brown did, however, move for leave to file a second amended complaint to name another defendant and to add due-process claims and state-law claims.

 

*2 Magistrate Judge Diane Vescovo recommended that the district court dismiss the RICO claim on the merits and as barred by the doctrines of res judicata and collateral estoppel; decline supplemental jurisdiction over the state-law claims; and deny the motion to amend as futile. Brown filed objections to the magistrate judge’s report and protested that he had not been served with the Board defendants’ motion to dismiss. Burch Porter, Gibson, and the Board defendants filed objections as well, arguing that the district court should exercise supplemental jurisdiction over the state-law claims and dismiss them on the basis of res judicata.

 

Brown also filed notices of dismissal against Barnes, Speakman, and Collins, and moved to recuse the magistrate judge. Brown argued, inter alia, that Magistrate Judge Vescovo had a conflict of interest because her son worked for a law firm representing the Board defendants. The district court rejected Brown’s arguments and denied the motion.

 

The district court next adopted the magistrate judge’s report, dismissed the RICO claim for failure to state a claim and on res judicata grounds, and denied Brown’s motion to amend. With respect to the state-law claims, the court dismissed them without prejudice, reasoning that they were not yet barred by the doctrine of res judicata under Tennessee law because an appeal was pending in Brown I. Judgment was entered on September 30, 2015.

 

In his timely appeal, Brown reasserts his RICO and state-law claims, and he challenges the denial of his motions to amend and to recuse the magistrate judge due to her son’s employment. Brown again protests that he was not served with the Board’s motion to dismiss and that the magistrate judge should not have taken judicial notice of his prior litigation. In their cross-appeal, the Board defendants argue that equitable factors weigh in favor of exercising supplemental jurisdiction over state-law claims.

 

We review de novo a district court judgment dismissing a complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). Wesley v. Campbell, 779 F.3d 421, 428 (6th Cir. 2015). In determining whether a complaint states a claim, a court must construe the complaint in a light most favorable to the plaintiff, accept all the factual allegations as true, and determine whether the complaint contains “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007); see also Erickson v. Pardus, 551 U.S. 89, 93–94 (2007); Sensations, Inc. v. City of Grand Rapids, 526 F.3d 291, 295–96 (6th Cir. 2008).

 

In his sole federal claim, Brown argues that the defendants violated RICO by conspiring to violate the Tenure Act by having the same hearing officers conduct more than one teacher-tenure hearing and by producing or considering fraudulent documents, i.e., Brown’s teaching evaluations (“TEM scores”).

 

Brown has failed to state a RICO claim. To state a claim for a RICO violation, a plaintiff must allege:

1) that there were two or more predicate offenses; 2) that an “enterprise” existed; 3) that there was a nexus between the pattern of racketeering activity and the enterprise; and 4) that an injury to business or property occurred as a result of the above three factors.

VanDenBroeck v. CommonPoint Mortg. Co., 210 F.3d 696, 699 (6th Cir. 2000), abrogated in part on other grounds by Bridge v. Phoenix Bond & Indem. Co., 553 U.S. 639 (2008). Predicate offenses are set forth at 18 U.S.C. § 1961(1) and include state felony offenses such as “murder, kidnapping, gambling, arson, robbery, bribery, extortion, dealing in obscene matter, or dealing in a controlled substance or listed chemical,” as well as variety of federal crimes, including mail and wire fraud. The wrongdoings alleged by Brown do not qualify as predicate offenses because the offenses enumerated in § 1961(1) do not include violations of the Tenure Act or common-law fraud, and Brown did not allege the use of United States mail or wire as part of a scheme to defraud him. See 18 U.S.C. §§ 1341, 1343; see also Alexander v. Rosen, 804 F.3d 1203, 1207 (6th Cir. 2015), cert. denied, 136 S. Ct. 2392 (2016).

 

*3 We review for an abuse of discretion a district court’s decision to decline supplemental jurisdiction over state-law claims. Varsity Brands, Inc. v. Star Athletica, LLC, 799 F.3d 468, 493 (6th Cir. 2015), cert. granted on other grounds, 136 S. Ct. 1823 (2016). A district court “may decline to exercise supplemental jurisdiction over” state-law claims if “the district court has dismissed all claims over which it has original jurisdiction.” 28 U.S.C. § 1367(c)(3).

 

The district court did not abuse its discretion. After a 12(b)(6) dismissal, there is a strong presumption in favor of dismissing supplemental claims,” unless unusual circumstances exist. Musson Theatrical, Inc. v. Fed. Exp. Corp., 89 F.3d 1244, 1255 (6th Cir. 1996). Such circumstances include the dismissal of federal claims on the eve of trial, following years of preparation. Id. Although the proceedings in Brown I and Brown II together have spanned three years, both were dismissed well before trial. Moreover, Brown II occupied only six months of the district court’s time and did not include discovery. Thus, unusual circumstances do not exist.

 

The Board defendants protest that the district court should have considered equitable factors such as the value of judicial economy, the avoidance of multiplicity of litigation, and comity. However, the Sixth Circuit cases that they cite are inapposite. Rather than involving a Rule 12(b)(6) dismissal, one case involved a jury trial, Fossyl v. Milligan, 317 Fed.Appx. 467, 473–74 (6th Cir. 2009), and two were summary-judgment dismissals—Stevens v. Saint Elizabeth Med. Ctr., Inc., 533 Fed.Appx. 625, 633 (6th Cir. 2013); Harper v. AutoAlliance Int’l, Inc., 392 F.3d 195, 211 (6th Cir. 2004). And the last Sixth Circuit case cited, Gamel v. City of Cincinnati, 625 F.3d 949 (6th Cir. 2010), supports the district court’s decision to decline supplemental jurisdiction. In Gamel, we affirmed a district court’s decision to decline supplemental jurisdiction and remand the action to state court where plaintiffs had amended their complaint to omit federal claims two days after the defendant removed the action, no discovery had occurred, and no summary-judgment motion had been filed. Id. at 952–53. The plaintiffs in Gamel also had brought an earlier, if short-lived, federal suit. Id. at 950–51. Thus, the district court here did not err by declining supplemental jurisdiction.

 

The alleged lack of service on Brown of the Board defendants’ motion to dismiss does not constitute a ground for reversing the district court’s decision. See McKinnie v. Roadway Express, Inc., 341 F.3d 554, 557 (6th Cir. 2003). As the district court observed, Brown consented to receive notice of electronic filings, and the Board defendants certified in their motion to dismiss that the notice of electronic filing was electronically mailed to Brown. Moreover, Brown received actual notice of the motion to dismiss through the magistrate judge’s report, and he was able to file objections in response. Finally, Brown has failed to demonstrate on appeal that he had stated a viable claim against the Board defendants. See id. at 557–58.

 

Likewise, the magistrate judge’s judicial notice of Brown’s history of filing vexatious lawsuits is not a ground for reversal but was a matter within the magistrate judge’s discretion. See Bridgeport Music, Inc. v. Smith, 714 F.3d 932, 936 n.4 (6th Cir. 2013); Brown v. Matauszak, 415 Fed.Appx. 608, 614 n.7 (6th Cir. 2011).

 

*4 In his motion to amend, Brown raised additional federal claims: (1) the defendants violated his right to due process by fabricating a TEM score and withholding the true TEM score; and (2) the defendants violated his right to procedural due process by violating the Tenure Act and not providing him with a neutral decision-maker at his teacher tenure hearing, by falsifying the TEM score, and relying on falsified documents. Brown also raised additional claims under state law, including “abuse of process” and “negligence per se.”

 

Pursuant to Rule 15(a)(2) of the Federal Rules of Civil Procedure, leave to amend a complaint should be freely given “when justice so requires.” A district court may deny a motion to amend a complaint if the amendment was brought in bad faith or for dilatory purposes, would result in undue delay or prejudice to the opposing party, or would be futile. Foman v. Davis, 371 U.S. 178, 182 (1962). Where the motion is denied as futile, we apply de novo review. Williams v. City of Cleveland, 771 F.3d 945, 949 (6th Cir. 2014).

 

We conclude that Brown’s amendment would be futile. The proposed federal claims are unsupported and conclusory. See Ashcroft v. Iqbal, 556 U.S. 662, 678–79 (2009). Because the federal claims would be subject to dismissal, supplemental jurisdiction over the proposed state claims would not be proper. See Musson Theatrical, Inc., 89 F.3d at 1255.

Last, Brown appeals the denial of his motion to recuse Magistrate Judge Vescovo, again arguing that she had a conflict of interest because her son worked for a law firm representing the Board defendants.

 

By statute, “[a]ny justice, judge, or magistrate judge of the United States shall disqualify himself in any proceeding in which his impartiality might reasonably be questioned.” 28 U.S.C. § 455(a). One reason to question impartiality occurs where “a person within the third degree of relationship” to the judge or the judge’s spouse is “acting as a lawyer in the proceeding” or “[i]s known by the judge to have an interest that could be substantially affected by the outcome of the proceedings.” 28 U.S.C. § 455(b)(5)(ii), (iii); see also Hamilton v. Gen. Elec. Co., 487 Fed.Appx. 280, 280 (6th Cir. 2012); In re BellSouth Corp., 334 F.3d 941, 943–44 (11th Cir. 2003).

 

The district court did not abuse its discretion by denying the motion to recuse the magistrate judge under § 455. See Johnson v. Mitchell, 585 F.3d 923, 945–46 (6th Cir. 2009). Here, Magistrate Judge Vescovo’s son did not act as a lawyer in the proceeding, and the law firm confirmed that he was not a partner in the firm such that he would have a financial interest in the proceeding. See BellSouth, 334 F.3d at 943–44. Thus, Magistrate Judge Vescovo’s recusal was not required.

 

Accordingly, the district court’s judgment is AFFIRMED.

 

All Citations

Not Reported in F.3d, 2016 WL 9448027

Footnotes
1	The Memphis City Schools system ceased to exist after merging with Shelby County Schools to form a unified district on July 1, 2013.