Ohio ex rel. Moore v. Brahma Investment Group ( 2018 )

NOT RECOMMENDED FOR PUBLICATION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
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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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No. 17-3458, Ohio ex rel. Keith D. Moore, et al. v. Brahma Investment Group, Inc. et al.
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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