United States District Court, D. Maine
JOHN F. CHASE, Plaintiff
ARTHUR MERSON, et al., Defendants
BROCK HORNBY UNITED STATES DISTRICT JUDGE.
case is becoming procedurally and jurisdictionally complex. I
ask that counsel meet and confer on the issues below (and any
others they believe are pertinent) and that following such a
conference, counsel request either a meeting with the judge
on how to proceed or request oral argument.
lawyers know, the plaintiff initially invoked this
court's jurisdiction on the basis of a federal question
(his RICO claims), 28 U.S.C. § 1331, and supplemental
jurisdiction over a number of state law claims, 28 U.S.C.
Maine-based defendants, the Cloutiers, moved to dismiss the
only count against them (a state law claim) under
Fed.R.Civ.P. 12(b)(6) for failure to state a claim, and I
granted their motion. Feb. 6, 2019 Order (ECF No. 84). In
doing so, I observed that the contract upon which the
plaintiff had unsuccessfully sued them provided for attorney
fees to the prevailing party in a dispute, and I ruled that
the Cloutier defendants were entitled to reasonable attorney
fees. Id. at 6-7. I directed that they apply for the
fees in accordance with Local Rule 54.2. My Order was not a
final judgment because several other defendants remained in
the lawsuit, and no party made a request under Fed.R.Civ.P.
54(b) for entry of final judgment as to those two defendants.
The Cloutier defendants promptly applied for fees under Local
Rule 54.2, but I denied their application as premature on the
premise that under that rule I should wait until the time for
appeal had run. Apr. 1, 2019 Order (ECF No. 101).
meantime, the defendant Patch filed a motion to dismiss on
February 5, 2019 (ECF No. 83). Although his opening paragraph
said he sought dismissal for lack of subject matter
jurisdiction, Mot. to Dismiss at 1, in fact he proceeded to
argue that the plaintiff's federal RICO claims were
preempted by the federal Private Securities Litigation Reform
Act (PSLRA), id. at 4-10, or in the alternative were
insufficiently pleaded, id. at 10-15, and that I
should decline to exercise this court's supplemental
jurisdiction under 28 U.S.C. § 1367 on the remaining
state causes of action, id. at 16. He also proceeded
to argue that alternatively I should grant him judgment on
the merits as to those claims. Id. at 16-20.
issued a Procedural Order on April 2, 2019 (ECF No. 102),
inquiring whether other defendants wished to join in the
motion. I said that Patch had “moved to dismiss the
entire case for lack of subject matter jurisdiction”
and that some but not all other defendants had raised the
issue of subject matter jurisdiction in their Answers, but
not yet argued it. Id. at 1. I also said that
“If I grant [Patch's] motion, the case will
probably exit federal court (it seems unlikely that the
supplemental state claims would proceed without the federal
hook).” Id. Thereafter, other defendants
joined in Patch's motion and it was fully briefed.
21, 2019, I granted dismissal of the RICO claims against
Patch, Roy, Merson, and Endeavor Project Consultants LLC. May
21, 2019 Order at 12. (ECF No. 107). I did not say that this
court thereupon lost jurisdiction. What I said was: “I
Grant the motions to dismiss the RICO claims. I reserve
decision on the motions to dismiss the remaining state law
claims until I determine whether the plaintiff can maintain
federal jurisdiction based upon diversity of citizenship,
” id. at 3, and I gave the plaintiff a
deadline for seeking to amend his complaint, id. at
12. I did so because the plaintiff had stated that he was
prepared to amend his filings to invoke diversity
jurisdiction if I ruled that his RICO claims were preempted.
Id. at 3 n.4; see also Pl.'s Opp'n
to Def. Roy's Mot. to Dismiss (ECF No. 106). My basis for
dismissing the RICO counts was that one federal law, the
PSLRA, had preempted another federal law, RICO (the plaintiff
had not asserted any claim under PLRSA). I did not say that
this federal court lacked subject matter jurisdiction, and I
believe it is pretty clear that there was subject
matter jurisdiction and that the decision on whether to
dismiss the supplemental state claims or rule on their merits
is committed to the court's sound discretion. See
Delgado v. Pawtucket Police Dep't, 668 F.3d 42, 48
(1st Cir. 2019) (“In a federal-question case, the
termination of the foundational federal claim does not divest
the district court of power to exercise supplemental
jurisdiction but, rather, sets the stage for an exercise of
the court's informed discretion, ” and this is a
decision “that we review only for abuse of
discretion”) (internal quotations and citation
omitted). But as I had suggested in my April 2 Order, if
there is no longer a federal jurisdictional hook, I am likely
to use my discretion to dismiss the state claims without
ruling on their merits.
plaintiff has moved to amend his complaint to drop the two
Maine-based parties that I previously dismissed and one other
Maine-based defendant, the defendant Roy. Am. Mot. to Amend
Compl. (ECF No. 109). As a result, he says, there is complete
diversity of citizenship between the plaintiff and the
defendants consistent with 28 U.S.C. § 1332.
Id. at 2. The defendants Patch, Merson, and Endeavor
Project Consultants LLC oppose the motion on a number of
grounds. (ECF Nos. 111, 112). The dismissed Cloutier
defendants have expressed concern that whatever happens does
not prejudice their claim against the plaintiff for attorney
fees. Opp'n to Mot. to Amend Compl. at 2-3 (ECF No. 110).
believe the following items/issues need clarification:
I ruled yet that this court has no jurisdiction? Is that even
a possible ruling given the original pleading of RICO claims
and 28 U.S.C. § 1367 making supplemental jurisdiction
over state claims discretionary? See Delgado v. Pawtucket
Police Dep't, supra.
Supreme Court says that a plaintiff can drop a defendant
under Fed.R.Civ.P. 21 to cure a diversity problem, see
Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826, 832
(1989) (“it is well settled that Rule 21 invests
district courts with authority to allow a dispensable
nondiverse party to be dropped at any time . . .”). But
that power seems to be limited to defendants who are not
indispensable. Is Roy dispensable or indispensable? In the
plaintiff's motion he sometimes refers to Roy as
“indispensable.” Am. Mot. to Amend Compl. at 1,
2. He has also said that Roy is not indispensable.
Id. at 5. The former references may be typographical
errors; if not, or if Roy is actually indispensable, the
plaintiff may not be able to drop the defendant Roy and
achieve complete diversity.
defendant Patch points out that in the proposed amended
complaint the plaintiff alleges residence of the parties but
not citizenship, and that residence alone is insufficient for
diversity of citizenship jurisdiction.
the diversity jurisdictional question, what is the status now
of the Cloutier defendants? I dismissed them some months ago,
but no party asked for entry of final judgment, so
theoretically the plaintiff still has a right to appeal their
dismissal at the appropriate time. Plus, what is the effect
of their pending request for attorney ...