Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-86-01977/USCOURTS-ca10-86-01977-0/pdf.json

Nature of Suit Code: 440
Nature of Suit: Other Civil Rights
Cause of Action: 

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PUBLISH 

FI LED 

United States Court of Appeals 

·renth Cirrnit 

SEP 2 9 1989 

ROBERT L. HOECKER 

Clerk 

UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT 

FRED W. PHELPS, SR., 

v. 

Plaintiff-Appellant and 

Cross-Appellee, 

) 

) 

) 

) 

) 

) 

) 

) 

THE WICHITA EAGLE-BEACON; ) 

STEVE TOMPKINS; BARRY HOLTZCLAW; ) 

w. DAVIS MERRITT; and PHILIP A. ) 

.HARLEY, ) 

Defendants-Appellees and 

Cross-Appellants. 

) 

) 

) 

Nos. 86-1977 

86-1998 

86-2018 

Appeal from the United States District 

Court for the District of Kansas 

(D.C. No. 83-4060) 

Margie J. Phelps and Elizabeth M. Phelps (John R. Balhuizen on the 

briefs) of Phelps-Chartered, Topeka, Kansas, for PlaintiffAppellant. 

Deanne Watts Hay of Sloan, Listrom, Eisenbarth, Sloan & Glassman, 

Topeka, Kansas, and David G. Seely (Gerrit H. Wormhoudt, William 

P. Tretbar, and Lyndon w. Vix of Fleeson, Goeing, Coulson & Kitch, 

Wichita, Kansas, on the briefs) of Fleeson, Goeing, Coulson & 

Kitch, Wichita, Kansas, for Defendants-Appellees. 

Appellate Case: 86-1977 Document: 01019936234 Date Filed: 09/29/1989 Page: 1 
Before EBEL and McWILLIAMS, Circuit Judges, and JENKINS, District 

Judge.* 

EBEL, Circuit Judge. 

* Chief Judge Bruce s. Jenkins, of the United States District 

Court for the District of Utah, sitting by designation. 

• 

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Appellate Case: 86-1977 Document: 01019936234 Date Filed: 09/29/1989 Page: 2 
This is an appeal and cross-appeal from a decision of the 

United States District Court for the District of Kansas. 

Plaintiff-appellant Fred W. Phelps brought suit in the district 

court alleging that defendant& conspired to publish defamatory 

articles about him in violation of federal civil rights statutes, 

the First and Fourteenth Amendments, and the Racketeer Influenced 

and Corrupt Organizations Act (RICO). The district court 

dismissed all claims under Rule 12(b)(6) of the Federal Rules of 

Civil Procedure for failure to state a claim. Phelps v. Wichita 

Eagle-Beacon, 632 F. Supp. 1164 (D. Kan. 1986). The district 

court also denied defendants' motion for sanctions. We affirm in 

part and reverse in part. 

FACTS 

On February 13, 1983, defendant Wichita Eagle-Beacon 

published two articles about plaintiff. One article, entitled 

"Phelps' Procedures Out of Ordinary, Report Shows," summarized and 

quoted an investigative report about plaintiff prepared by the 

Kansas state attorney general's office. The report discussed how 

plaintiff had brought numerous lawsuits soon after alleged 

incidents and settled them for a fraction of the amount sought. 

Critics of plaintiff were quoted in the article as stating that he 

brought "strike suits" for "nuisance value." 

The other article, entitled "On a Crusade -- Phelps' Work 

Raises Hopes, and Questions," was more biographical. It discussed 

plaintiff's background and education, his representation of the 

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Appellate Case: 86-1977 Document: 01019936234 Date Filed: 09/29/1989 Page: 3 
poor and minorities in Kansas, and some of the controversies 

surrounding him, including his disbarment from Kansas courts in 

1979. The article stated that many people saw him as a crusader 

for the rights of the poor and minorities. The article included 

statements by plaintiff and observed that he "sees himself as the 

ideological heir of a long line of Baptist preacher-lawyers who 

used the Bible as a source of inspiration." 

After publication of the articles, plaintiff brought suit in 

the district court seeking damages and injunctive relief against 

the newspaper, employees of the newspaper, and Philip Harley, a 

former assistant attorney general in Kansas. Plaintiff alleged a 

conspiracy to defame him and present him in a false light, in 

violation of a number of federal civil rights statutes, the United 

States Constitution, and the Racketeer Influenced and Corrupt 

Organizations Act ("RICO"). 

ISSUES 

There are seven issues on appeal: (1) whether the district 

court properly dismissed plaintiff's claim under 42 U.S.C. § 1981; 

(2) whether the district court properly dismissed plaintiff's 

claim under 42 U.S.C. § 1983; (3) whether the district court 

properly dismissed plaintiff's claim under 42 U.S.C. § 1985; 

(4) whether the district court properly dismissed plaintiff's 

claim under 18 U.S.C. §§ 1961-1968 (RICO); (5) whether plaintiff's 

claims are barred by the First Amendment; (6) whether plaintiff 

should have been granted leave to amend his complaint; and 

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Appellate Case: 86-1977 Document: 01019936234 Date Filed: 09/29/1989 Page: 4 
(7) whether plaintiff should be assessed attorneys' fees or 

sanctions for bringing this action. 

STANDARD OF REVIEW 

In reviewing the dismissal of plaintiff's complaint for 

failure to state a claim, this court "must accept as true the 

plaintiff's well-pleaded factual allegations and all reasonable 

inferences must be indulged in favor of the plaintiff." Shaw v. 

Valdez, 819 F.2d 965, 968 (10th Cir. 1987). We should affirm the 

district court's dismissal "only if 'it appears beyond doubt that 

the plaintiff can prove no set of facts in support of his claim 

which would entitle him to relief.'" Shoultz v. Monfort of 

Colorado, Inc., 754 F.2d 318, 321 (10th Cir. 1985) (quoting Conley 

v. Gibson, 355 U.S. 41, 45-46 (1957)), cert. denied, 475 U.S. 1044 

(1986). 

I. 

SECTION 1981 

In his First Amended Complaint, plaintiff alleges that 

defendants conspired to publish false articles about him because 

he represents black people, in violation of 42 u.s.c. § 1981. 1 

1 Section 1981 provides: 

.All persons within the jurisdiction of the United States 

shall have the same right in every State and Territory 

to make and enforce contracts, to sue, be parties, give 

evidence, and to the full and equal benefit of all laws 

and proceedings for the security of persons and property 

as is enjoyed by white citizens, and shall be subject 

to like punishment, pains, penalties, taxes, licenses, 

JFootnote continued ... ] 

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Appellate Case: 86-1977 Document: 01019936234 Date Filed: 09/29/1989 Page: 5 
(First Amended Complaint at ,1 9.) Although the district court 

recognized that whites may bring claims under Section 1981, see 

McDonald v. Santa Fe Trail Transp. Co., 427 U.S. 273, 287 (1976), 

it nevertheless dismissed plaintiff's claim for lack of standing. 

The district court held that discrimination on the basis of 

association with a particular racial group does not state a cause 

of action under Section 1981. Rather, the district court held 

that a Section 1981 claim must allege discrimination against the 

plaintiff on the basis of his race. 

We agree with plaintiff that the district court erred in its 

analysis. As this court and other circuits have held, alleged 

discrimination against a white person because of his association 

with blacks may state a cause of action under Section 1981. See, 

~, . Skinner v. Total Petrole_um, Inc., 859 F. 2d 1439, 144 7 ( 10th 

Cir. 1988) (white employee who alleged that he was terminated for 

assisting black employee could maintain Section 1981 action); 

Alizadeh v. Safeway Stores, Inc., 802 F.2d 111, 114 (5th Cir. 

1986) (white plaintiff discriminated against because of marriage 

to a non-white could maintain a claim under Section 1981); Parr v. 

Woodmen of the World Life Ins. Co., 791 F.2d 888, 890 (11th Cir. 

1986) (same); Fiedler v. Marumsco Christian School, 631 F.2d 1144 

(4th Cir. 1980) (Section 1981 held to prohibit a private sectarian 

school from terminating a contractual relationship with a white 

student because of her association with a black student at the 

[ ... footnote continued] 

exactions of every kind, and to no other. 

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Appellate Case: 86-1977 Document: 01019936234 Date Filed: 09/29/1989 Page: 6 
school); DeMatteis v. Eastman Kodak Co., 511 F.2d 306, 312 (2d 

Cir.) (suit allowed under Section 1981 where white employee 

claimed his company forced him to retire because he sold his house 

to a fellow black employee), modified on other grounds, 520 F.2d 

409 (2d Cir. 1975). Thus, we conclude that plaintiff does have 

standing to sue under Section 1981. 

Nevertheless, plaintiff's Section 1981 claim was properly 

dismissed because, as defendants point out, plaintiff has not 

alleged that he was deprived of an interest protected by Section 

1981. By its language, Section 1981 establishes four protected 

interests: (1) the right to make and enforce contracts; (2) the 

right to sue, be parties, and give evidence; (3) the right to the 

full and equal benefit of the laws; and (4) the right to be 

subjected to like pains and punishments. Plaintiff has alle~ed 

that defendants defamed him and invaded his privacy. But he has 

not alleged that defendants deprived him cf any of the enumerated 

rights in Section 1981. 

The cases plaintiff cites in support of his Section 1981 

argument all involve interference with the first enumerated 

interest -- the right to make and enforce contracts. Those cases 

are distinguishable from this case because they all involve actual 

loss of employment or other contract interests. See,~, 

Fiedler v. Marumsco Christian School, 631 F.2d 1144 (4th Cir. 

1980) (plaintiff was expelled from private school); Winston v. 

Lear-Siegler, Inc., 558 F.2d 1266 (6th Cir. 1977) (plaintiff was 

fired by employer); DeMatteis v. Eastman Kodak, 511 F.2d 306 (2d · 

Cir.) (plaintiff was forced into early retirement), modified on 

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Appellate Case: 86-1977 Document: 01019936234 Date Filed: 09/29/1989 Page: 7 
other grounds, 520 F.2d 409 (2d Cir. 1975). By contrast, 

plaintiff here merely alleges possible loss of future 

opportunities. Plaintiff has alleged that defendants' actions 

have interfered with his "prospective business opportunities,'' 

(First Amended Complaint at 11 11), but we find that vague and 

conclusory allegation insufficient to state a deprivation of the 

right to make and enforce contracts that is protected by Section 

1981. Plaintiff has the same right as others to enter into 

contracts with those who wish to contract with him. Even if the 

state has defamed him and thus arguably made him less attractive 

to some who otherwise might want to contract with him, the 

defamation does not deny him the basic right to contract. Cf. 

Patterson v. McLean Credit Union, U.S. , 109 S. Ct. 2363, 

105 L. Ed. 2d 132 (1989) (Section 1981 1 s contract clause protects 

only the right to enter into and enforce contracts). Therefore, 

we affirm the dismissal of plaintiff's Section 1981 claim. See, 

~, Seibert v. Univ. of Oklahoma Health Sciences Center, 867 

F.2d 591, 597 (10th Cir. 1989) ("An appellate court may affirm the 

judgment of a district court on any grounds that find support in 

the record, provided the litigants have had a fair opportunity to 

develop the record."). 

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Appellate Case: 86-1977 Document: 01019936234 Date Filed: 09/29/1989 Page: 8 
II. 

SECTION 1983 

In his First Amended Complaint, plaintiff claims that the 

alleged defamation violated 42 U.S.C § 1983. 2 In support of that 

claim, he argues on appeal that defendants' actions deprived him 

of a liberty interest and a property right without due process, 

deprived him of his rights under the Equal Protection Clause, and 

violated his First Amendment rights. 

A. Due Process 

The district court concluded that plaintiff had not 

sufficiently alleged a deprivation of a property or liberty 

interest~ which is tequired to state a claim for denial of due 

process under Section 1983. Relying on Paul v. Davis, 424 U.S. 

693 (1976), the district court held that plaintiff's alleged 

damage to his reputation was not sufficient to state a due process 

claim under Section 1983. In Davis, the police included the 

plaintiff's name and photograph in a flyer of active shoplifters 

distributed to merchants. The plaintiff in that case alleged that 

2 Section 1983 provides in pertinent part: 

Every person who, under color of any statute, ordinance, 

regulation, custom, or usage, of any State or Territory 

or the District of Columbia, subjects, or causes to 

be subjected, any citizen of the United States or other 

person within the jurisdiction thereof to the deprivation 

of any rights, privileges, or immunities secured by the 

Constitution and laws, shall be liable to the party 

injured in an action at law, suit in equity, or other 

proper proceeding for redress. 

• -9-

Appellate Case: 86-1977 Document: 01019936234 Date Filed: 09/29/1989 Page: 9 
the flyer was defamatory and deprived him of his rights in 

violation of Section 1983 because it damaged his reputation and 

"would seriously impair his future employment opportunities." Id. 

at 697. The Supreme Court upheld a dismissal of his complaint, 

holding that "reputation alone, apart from some more tangible 

interests such as employment" is not a sufficient interest to 

establish a claim of denial of due process under Section 1983. 

Something more than mere defamation must be involved. Id. at 701. 

We agree with the district court that Davis compels the 

conclusion that plaintiff has not sufficiently alleged a 

deprivation of a liberty or property interest under Section 1983. 

Plaintiff alleges in his First Amended Complaint that defendants 

placed a "defamatory cloud" over his "employment opportunities." 

(First Amended Complaint at ,1 11.) That allegation is , 

substantially similar to the allegation in Davis which was found 

insufficient. Like the claim in Davis, plaintiff's claim in this 

case is a "classical claim for defamation." Id. at 697. We 

conclude, as the Court concluded in Davis, that: 

[plaintiff's] interest in reputation is simply one of a 

number which the State may protect against injury by 

virtue of its tort law, providing a forum for 

vindication of those interests by means of damages 

actions. And any harm or injury to that interest, even 

where as here inflicted by an officer of the State, does 

not result in a deprivation of any "liberty" or 

"property" recognized by state or federal law, nor has 

it worked any change in [plaintiff's] status as 

theretofore recognized under the State's laws. For 

these reasons we hold that the interest in reputation 

asserted in this case is neither "liberty" nor 

"property" guaranteed against state deprivation without 

due process of law. 

424 U.S. at 712. 

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Appellate Case: 86-1977 Document: 01019936234 Date Filed: 09/29/1989 Page: 10 
Plaintiff seeks to rely on our decision in Corbitt v. 

Anderson, 778 F.2d 1471 (10th Cir. 1985). The plaintiff in 

Corbitt, a psychologist, sued under Section 1983 claiming that the 

defendant had conducted a campaign to discredit the plaintiff's 

professional standing. we concluded that the plaintiff had made 

out a prima facie case of a violation of a liberty interest under 

Section 1983. That case is distinguishable from this one because 

in that case the plaintiff had alleged and presented evidence of 

present harm to his established business relationships. 778 F.2d 

at 1475. Tn contrast, plaintiff here merely has alleged 

speculative future harm to prospective relationships as a result 

of the generalized damage to his reputation. 

This court has made it clear since Corbitt that damage to 

"prospective employment opportunities" is too intangible to 

constitute a deprivation of a liberty or property interest. 

Setliff v. Memorial Hosp. of Sheridan County, 850 F.2d 1384, 1397 

n.18 (10th Cir. 1988). Thus, even if defendants' actions made 

plaintiff less attractive to employers or clients, that is 

insufficient to state a deprivation of a liberty or property 

interest under Section 1983. Id. at 1396. Rather, plaintiff's 

status as a lawyer and his existing legal rights must be 

significantly altered before a claim arises. Id. See also Ewers 

v. Board of County Commissioners of Curry County, 802 F.2d 1242, 

1247 (10th Cir. 1986) (to establish a claim of deprivation of a 

liberty interest in reputation under Section 1983, plaintiff must 

allege stigma plus harm to some other tangible interest such as 

employment), reh'g granted, 813 F.2d 1583 (1987), cert. denied, 

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Appellate Case: 86-1977 Document: 01019936234 Date Filed: 09/29/1989 Page: 11 
108 S. Ct. 704 (1988), opinion on reh'g, 874 F.2d 736 (10th Ciro 

1989) (cited proposition unaffected); Goulding v. Feinglass, 811 

F.2d 1099, 1102-03 (7th Cir.) (for lawyer to establish a 

deprivation of a property interest, his legal rights or status as 

a lawyer must have been ''removed or significantly altered"; mere 

injury to his business reputation as a lawyer making him less 

attractive to clients is not sufficient), cert. denied, 482 U.S. 

929 (1987); Perry v. Federal Bureau of Investigation, 781 F.2d 

1294, 1302 (7th Cir.) ("a liberty interest is not implicated 

merely by a reduction in an individual's attractiveness to 

potential employers"), cert. denied, 479 U.S. 814 (1986). 

Here, plaintiff has not been foreclosed from practicing law. 

At most, he alleges that the newspaper articles made him less 

attractive to potential clients. That allegation is insufficient 

to state a deprivation of a liberty or property interest under 

Section 1983. As the Supreme Court repeatedly has stressed, 

Section 1983 was not meant to federalize state tort law. See, 

~, DeShaney v. Winnebago County Dept. of Social Services, 

U.S. , 109 S. Ct. 998, 1007, 103 L. Ed. 2d 249 (1989); Paul 

v. Davis, 424 U.S. at 701. 

B. Equal Protection 

Plaintiff also claims a violation of his right to equal 

protection under the Fourteenth Amendment. 3 The district court 

3 The Court in Paul v. Davis addressed only the issue of whether 

there was a deprivation of a property or liberty interest without 

due process. That case did not address other constitutional 

arguments arising from defamatory actions by the government. See, 

[Footnote continued . -.-.] 

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Appellate Case: 86-1977 Document: 01019936234 Date Filed: 09/29/1989 Page: 12 
dismissed that claim, concluding that there were not sufficient 

allegations of racially discriminatory treatment. Phelps, 632 F. 

Supp. at 1169. 

In order to state a claim based on the Equal Protection 

Clause, plaintiff must sufficiently allege that defendants were 

motivated by racial animus. See Village of Arlington Heights v. 

Metropolitan Hous. Dev. Corp., 429 U.S. 252, 265 (1977); Harris v. 

Harvey, 605 F.2d 330, 338 (7th Cir. 1979), cert. denied, 445 U.S. 

938 (1980). The First Amended Complaint alleges that one of the 

newspaper articles described plaintiff as ''a black man's lawyer, 

'a modern-day John Brown', and 'a savior' to blacks in Kansas" and 

that those statements reveal a race-based animus. (First Amended 

Complaint at, 9.) Although we do not believe that the newspaper 

article by itself is sufficient to establish a discriminatory 

intent, the First Amended Complaint also contains general 

allegations of an underlying race-based animus. 4 In evaluating 

the sufficiency of plaintiff's allegations, we cannot ignore the 

[ ••. footnote continued] 

~, Rakovich v. Wade, 850 F.2d 1180, 1189 (7th Cir.) (en bane) 

(First Amendment retaliatory action), cert. denied, 109 s. Ct. 497 

(1988). 

4 Paragraph 13 of plaintiff's First Amended Complaint states: 

Defendants' said conduct was at all times wanton, 

reckless, malicious, willful, illegal, and in bad faith 

thereby to deliberately discriminate against plaintiff 

because he is a black man's lawyer and a Baptist 

preacher-lawyer, in violation of the First Amendment, 

implicating§ 1981; and thereby to take plaintiff's 

liberty and property interests without due process or 

equal protection, in violation of the Fourteenth 

Amendment, all by invidious discrimination and under 

color of state law, implicating§ 1983; •.• and 

pursuant to unlawful race-based animus and conspiracy so 

to do, implicating§ 1985. 

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Appellate Case: 86-1977 Document: 01019936234 Date Filed: 09/29/1989 Page: 13 
plain language of Rule 9(b) of the Federal Rules of Civil 

Procedure, which permits "malice, intent, knowledge, and other 

condition of mind of a person" to be "averred generally. 115 

Accordingly, we conclude that plaintiff has sufficiently alleged 

racial animus and that it was, therefore, error to grant the 

motion to dismiss his equal protection claim brought under Section 

1983. 

C. First Amendment 

Plaintiff argues on appeal that defendants defamed him in 

retaliation for his association with blacks and because he is a 

Baptist, in violation of his First Amendment rights. The district 

court rejected that claim, largely relying on Paul v. Davis. The 

district court stated that plaintiff had not adequately alleged 

that he had been denied free speech rights or any right of 

association. 

5 Many courts and commentators have in~erpreted Rule 9(b) to 

permit a general averment of intent unaccompanied by supporting 

factual allegations. See,~, McGinty v. Beranger Volkswagen, 

Inc., 633 F.2d 226, 228 (1st Cir. 1980); Cramer v. General Tel. & 

Electronics Corp., 582 F.2d 259, 272-73 (3d Cir. 1978), cert. 

denied, 439 U.S. 1129 (1979); Walling v. Beverly Enterprises, 476 

F.2d 393, 397 (9th Cir. 1973); 5 C. Wright & A. Miller, Federal 

Practice and Procedure§§ 1297, 1301 (1969); 2A Moore's Federal 

Practice, 9.03(1], 9.03[3] (2d ed. 1989). In contrast, some 

cases have held that a plaintiff making a general averment as to a 

defendant's intent must also allege facts that create a "strong 

inference" that the defendant possessed the averred intent. Ross 

v. A.H. Robins Co., 607 F.2d 545, 558 (2d Cir. 1979), cert. 

denied, 446 U.S. 946 (1980); see also Devaney v. Chester, 813 F.2d 

566, 569 (2d Cir. 1987); Connecticut Nat'l Bank v. Fluor Corp., 

808 F.2d 957, 962 (2d Cir. 1987). Absent Rule 9(b), the approach 

taken in those cases requiring more specific factual allegations 

would have considerable appeal. However, because we cannot 

reconcile that approach with the plain language of Rule 9(b), we 

do not adopt it. 

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Appellate Case: 86-1977 Document: 01019936234 Date Filed: 09/29/1989 Page: 14 
We agree with the district court that plaintiff's allegations 

do not state a cause of action under the First Amendment. In 

support of his First Amendment claim, plaintiff's First Amended 

Complaint contains only conclusory allegations that defendants 

selectively defamed him and invaded his privacy. (First Amended 

Complaint at flfl 9, 13.) Those allegations are insufficient to 

state a claim under the First Amendment. Moreover, a review of 

the First Amended complaint makes it clear that plaintiff did not 

allege a First Amendment violation as a predicate to his Section 

1983 claims. Rather, the First Amended Complaint, which is quite 

specific in this regard, asserts First Amendment violations only 

in connection with plaintiff's Section 1981 and 1985 claims. See 

First Amended Complaint at 1111 9, 13. Accordingly, we affirm the 

district court's ruling that the First Amended Complaint fails to 

state a Section 1983 claim premised on a First Amendment right. 6 

D. State Action 

Section 1983 applies only to actions performed under color of 

state law. That requirement does not mean that all defendants 

must be officers of the state. If a private defendant is "a 

willful participant in joint action with the State or its agents," 

that is sufficient. Dennis v. Sparks, 449 U.S. 24, 27 (1980); 

see also Lugar v. Edmondson Oil Co., 457 U.S. 922, 937 (1982); Lee 

v. Town of Estes Park, 820 F.2d 1112, 1114 (10th Cir. 1987). 

6 Plaintiff also argues that there was a violation of a Kansas 

Supreme ·court rule because information which had been sealed was 

leaked to the newspaper. While that may be true, that allegation 

does not state a violation of a right protected by the federal 

civil rights statutes. 

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Appellate Case: 86-1977 Document: 01019936234 Date Filed: 09/29/1989 Page: 15 
The district court never addressed the state action issue 

because it dismissed plaintiff's claims on other grounds. 

Plaintiff contends in his First Amended Complaint that the 

newspaper and some of its employees conspired with Philip Harley, 

an alleged state actor. Specifically, plaintiff alleges, and 

defendants dispute, that "Harley is a white lawyer now living_ in 

Colorado, but formerly, and at times relevant hereto, was 

assistant attorney general in Kansas, and acted under color of 

state law in joining the other defendants in said scheme." (First 

Amended Complaint at 11 5.) Plaintiff also alleges that the scheme 

to defame him was perpetrated ''in concert with other state 

officials whose duty it is and was to strictly maintain the 

confidentiality of such false and disproven complaints, and 

without whose conspiratorial cooperation said material could not 

have been divulged." (First Amended Complaint at 11 7.) 

What constitutes state action under the Fourteenth Amendment 

has not been defined with precision. 7 The Supreme Court has 

counseled us that the state action inquiry, although a legal 

determination to be made by the court, 8 requires the "sifting [of] 

facts and weighing [of] circumstances." Burton v. Wilmington 

Parking Auth., 365 U.S. 715, 722 (1961). The Court further has 

instructed us that state action requires "significant" involvement 

by the state in the allegedly unconstitutional conduct. Id. This 

7 If plaintiff satisfies the Fourteenth Amendment's state action 

requirement, he will also satisfy Section 1983's under-color-ofstate-law requirement. See Lugar v. Edmondson Oil Co., 457 U.S. 

at 935 (1982). 

8 See Gilmore v. City of Montgomery, 417 U.S. 556, 570 (1974). 

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Appellate Case: 86-1977 Document: 01019936234 Date Filed: 09/29/1989 Page: 16 
requirement, in our view, necessitates a showing here that the 

state did more than merely make available to the newspaper 

defendants information about the 1976 Kansas state attorney 

general's investigation of plaintiff. Plaintiff must show that 

the state played a significant role in the discrimination alleged 

by plaintiff. In other words, plaintiff must demonstrate that 

there was a significant nexus between the actions of the state and 

the allegedly discriminatory decision to publish disparaging 

articles about plaintiff because of his representation of black 

clients, a decision that would not have occurred if plaintiff had 

not been so aligned with black interests. 9 Further, it has been 

suggested that a balancing analysis might be necessary to 

determine whether state action is involved where state 

encouragement or assistance pertains to private conduct that 

itself is the subject of constitutional protection. See 

R. Rotunda, J. Nowak, & J. Young, Treatise on Constitutional Law: 

Substance and Procedure~ 16.3, at 173 (1986). 

Here, the act of publication and the exercise of editorial 

discretion concerning what to publish are protected by the First 

Amendment. If the mere publication of an article based upon 

information obtained from government officials could constitute 

state action, private newspapers would be significantly 

discouraged from interviewing state officials to gather 

9 State action, of course, could also be shown in certain limited 

situations if the discriminatory conduct involved a "public 

function," see Marsh v. Alabama, 326 U.S. 501, 506 (1946). 

However, the publication of the newspaper articles of which 

plaintiff complains were private acts, not acts involving a public 

function. 

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Appellate Case: 86-1977 Document: 01019936234 Date Filed: 09/29/1989 Page: 17 
information on important public issues. The Supreme Court has 

repeatedly emphasized the First Amendment's concern with 

minimizing that type of chilling effect. See,~, Hustler 

Magazine v. Falwell, 108 s. Ct. 876, 880 (1988); Philadelphia 

Newspapers, Inc. v. Hepps, 475 U.S. 767, 777-78 (1986); New York 

Times v. Sullivan, 376 U.S. 254, 272 (1964). 

Thus, the precise nature of the state's involvement in the 

publication of the articles about which plaintiff complains is 

critical to a determination of whether there was state action 

involved in the discriminatory conduct upon which plaintiff's 

equal protection claim under Section 1983 is premised. For that 

reason, we decline to rule on the state action issue at this stage 

of the proceedings, and we remand for a further development of the 

factual record. Among the factors that the district court should 

consider and weigh in making its state action determination in 

. this case are whether the actions of Harley reflect a 

discriminatory animus, whether and to what extent he joined with 

other defendants in the purported scheme, and whether other state 

officials acted in concert with defendants. If plaintiff's 

allegations in his First Amended Complaint are false, there may be 

grounds for sanctions pursuant to Rule 11 of the Federal Rules of 

Civil Procedure, but plaintiff's equal protection claim under 

Section 1983 cannot be dismissed on the face of the pleading under 

Rule 12(b)(6). 

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III. 

SECTION 1985 

Plaintiff alleges that the defendants conspired to interfere 

with his civil rights in violation of 42 u.s.c. § 1985. The 

district court dismissed that claim because it found that no 

federal right had been violated. Because plaintiff clearly has 

not alleged any of the elements of Sections 1985(1) or 1985(2), we 

will assume plaintiff is claiming a violation of Section 1985(3), 

which provides: 

If two or more persons in any State or Territory 

conspire or go in disguise on the highway or on the 

premises of another, for the purpose of depriving, 

either directly or indirectly, any person or class of 

persons of the equal protection of the laws, or of equal 

privileges and immunities under the laws; or for the 

purpose of preventing or hindering the constituted 

authorities of any State or Territory from giving or 

securing to all persons within such State or Territory 

the equal protection of the laws; or if two or more 

persons conspire to prevent by force, intimidation, or 

threat, any citizen who is lawfully entitled to vote, 

from giving his support or advocacy in a legal manner, 

toward or in favor of the election of any lawfully 

qualified person as an elector for President or Vice 

President, or as a Member of Congress of the United 

States; or to injure any citizen in person or property 

on account of such support or advocacy; in any case of 

conspiracy set forth in this section, if one or more 

persons engaged therein do, or cause to be done, any act 

in furtherance of the object of such conspiracy, whereby 

another is injured in his person or property, or 

deprived of having and exercising any right or privilege 

of a citizen of the United States, the party so injured 

or deprived may have an action for the recovery of 

damages occasioned by such injury or deprivation, 

against any one or more of the conspirators. 

Thus, the requirements for establishing a cause of action 

under Section 1985(3) are specific: 

To come within the legislation a complaint must allege 

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that the defendants did (1) "conspire or go in disguise 

on the highway or on the premises of another" (2) "for 

the purpose of depriving, either directly or indirectly, 

any person or class of persons of the equal protections 

of the laws, or of equal privileges and immunities under 

the laws." It must then assert that one or more of the 

conspirators (3) did, or caused to be done, "any act in 

furtherance of the object of [the] conspiracy," whereby 

another was (4a) "injured in his person or property" or 

(4b) "deprived of having and exercising any right or 

privilege of a citizen of the United States." 

Griffin v. Breckenridge, 403 U.S. 88, 102-03 (1971). 

Plaintiff's complaint sufficiently alleges a conspiracy 

(First Amended Complaint at ,111 4, 6, 7, and 8), a discriminatory 

animus against blacks and those who help blacks (First Amended 

Complaint at 11 9), and acts in furtherance of the conspiracy 

( First Amended Complaint at ,1,1 6, 7). Plaintiff also alleges a 

deprivation of his rights under the Equal Protection Clause. 

(First· Amended Complaint at ,1,1 9, 13. )10 Accordingly, we reverse 

the district court's dismissal of plaintiff's Section 1985(3) 

claim of a conspiracy to violate his rights guaranteed by the 

Equal Protection Clause. 11 

lO In order to state a cause of action under§ 1985(3) based on 

the Equal Protection Clause, plaintiffs must sufficiently allege 

state action. See United Brotherhood of Carpenters & Joiners of 

America v. Scott, 463 U.S. 825, 831-33 (1983). As discussed 

earlier, we are not prepared at this stage of the proceedings to 

affirm a dismissal of plaintiff's§ 1985(3) claim on the state 

action issue, but we do not preclude the defendants from raising 

that issue further after development of a factual record. 

11 Plaintiff also alleges a deprivation of his First Amendment 

rights in violation of Section 1985(3). However, as noted in 

Section II(C), supra, plaintiff does not allege facts sufficient 

to demonstrate any violation of plaintiff's First Amendment 

rights. Accordingly, we affirm the district court's dismissal of 

that claim. 

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IV. 

RICO 

Plaintiff has alleged that defendants violated the civil 

Racketeer Influenced and Corrupt Organizations Act, 18 u.s.c. 

§§ 1961-1965. 12 That Act makes it unlawful for ''any person 

employed by or associated with an enterprise ... to conduct or 

participate in the conduct of such enterprise's affairs 

through a pattern of racketeering activity " 18 u.s.c. 

§ 1962(c). Thus, in order to state a RICO claim, plaintiff must 

sufficiently allege "(l) conduct (2) of an enterprise (3) through 

a pattern (4) of racketeering activity.'' Sedima, S.P.R.L. v. 

Imrex Co., 473 U.S. 479, 496 (1985). 

The district court dismissed the RICO claim, finding that 

plaintiff had not sufficiently alleged a "patter~'' of racketeering 

activity as required by the statute. The district court stated 

that plaintiff had alleged only one fraudulent scheme, which the 

court held was insufficient to establish a pattern. Although the 

district court's reasoning was incorrect, we agree with its 

conclusion. 

12 One of the issues before the district court was whether 

plaintiff's RICO claim was barred by a statute of limitations. 

Plaintiff first alleged the claim in his First Amended Complaint, 

which was filed after the two year statute of limitations for 

fraud in Kansas. The district court held that the Amended 

Complaint related back to the Original Complaint so that 

plaintiff's claim was not barred. This issue is now moot because 

the United States Supreme Court has held that the appropriate 

statute of limitations for civil RICO claims is four years. 

Agency Holding Corp. v. Malley-Duff & Associates, 483 U.S. 143, 

107 s. Ct. 2759, 97 L. Ed. 2d 121 (1987). Thus, plaintiff's RICO 

claim is not barred by a statute of limitations. 

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The Supreme Court has recently held that a RICO violation 

does not require more than one scheme. H.J. Inc. v. Northwestern 

Bell Telephone Co., U.S. , 109 S. Ct. 2893, 106 L. Ed. 

2d 195 (1989). The Court there reiterated its prior holding that 

all that is required to constitute a pattern are two elements --

"continuity plus relationship." Sedima, 473 U.S. at 496 n.14. 

There is no question that the acts complained of in this case are 

related because they are all part of an alleged common scheme. 

See Torwest DBC, Inc. v. Dick, 810 F.2d 925, 928 (10th Cir. 1987). 

The central question is whether they are "continuous." To 

establish continuity, the plaintiff must demonstrate either "a 

closed period of repeated conduct" or ''past conduct that by its 

nature projects into the future with a threat of repetition." 

H.J. Inc. v. Northwestern Bell Telephone Co., 109 S. Ct. at 2902. 

These two forms of continuity are respectively referred to as. 

closed-ended and open-ended continuity. Id. The Supreme Court 

held that closed-ended continuity requires "a series of related 

predicates extending over a substantial period of time. Predicate 

acts extending over a few weeks or months" are insufficient. Id. 

Open-ended continuity requires a clear threat of future criminal 

conduct related to past criminal conduct. Id. 

Here, plaintiff does not allege either closed-ended or openended continuity. The two articles of which he complains were 

published on the same day and the research and gathering of 

information to write the articles was so close in time and 

function as not to establish a sufficiently discrete series of 

predicate acts extending over a substantial period of time to 

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constitute a closed continuity. Similarly, plaintiff has not 

alleged an open-ended continuity. He has alleged only a scheme to 

publish two isolated articles about him. He has not alleged a 

scheme continuously to defame him, nor has he alleged any threat 

of future activity. Thus, there is no open-ended ongoing pattern 

of racketeering activity alleged here. At most, plaintiff has 

alleged a scheme to accomplish "one discrete goal," which he 

alleges was accomplished. That is insufficient to state a claim 

for relief under RICO. See Torwest, 810 F.2d at 929; Garbade v. 

Great Divide Mining and Milling Corp., 831 F.2d 212, 214 (10th 

Cir. 1987). Therefore, plaintiff has not sufficiently alleged a 

"pattern" of racketeering activity. 13 

v. 

WICHITA EAGLE-BEACON'S FIRST AMENDMENT RIGHTS 

Although the district court did not address the issue, 

defendants contend on appeal, and argued below, that the First 

Amendment rights of newspapers provide an independent reason for 

dismissing plaintiff's complaint. That argument requires us to 

engage in a difficult balancing of competing constitutional 

values. 14 We prefer not to address this issue on the basis of the 

13 Appellees also argue that plaintiff has failed to allege an 

enterprise; that he failed to allege predicate acts such as mail 

fraud; and that there is a lack of particularity in the alleged 

fraud, as required by Fed. R. Civ. P. 9(b). See Cayman 

Exploration Corp. v. United Gas Pipe Line Co., 873 F.2d 1357, 1362 

(10th Cir. 1989). Because plaintiff has not met the pattern 

requirement, we need not reach those issues. 

14 As discussed earlier, this balancing may take place in the 

[Footnote continued .•. ] 

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skimpy and conclusory pleadings before us. We therefore decline 

to consider that argument while the case is still in the pleading 

stage, but we do not preclude defendants from raising the issue in 

the district court on remand after the facts of this case have 

been more fully developed. 

VI. 

LEAVE TO AMEND 

Plaintiff contends that the district court erred in denying 

him leave to amend his First Amended Complaint. We disagree. 

Although leave to amend should be granted freely "when justice so 

requires," Fed. R. Civ. P. lS(a), the decision whether to grant 

leave to amend is within the discretion of the district court. 

Fernan v. Davis, 371 U.S. 178, 182 (1962). Here, plaintiff already 

has been allowed to amend his complaint once, and there is no 

showing that a further amendment would cure the defects in his 

complaint discussed above. Thus, we hold that the district court 

did not abuse its discretion in denying plaintiff leave to amend. 

VII. 

ATTORNEYS' FEES/SANCTIONS 

On cross-appeal, defendants argue that the district court 

erred in refusing to award them attorneys' fees or sanctions. We 

agree with the district court's decision on this issue. Although 

[ ••• footnote continued] 

course of determining whether there is state action. See Section 

II(D), supra. 

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( 

some of plaintiff's claims, such as his RICO claim, border on 

being frivolous, plaintiff has raised some complex issues, two of 

which (the equal ·protection claims under Sections 1983 and 1985) 

should not have been dismissed under Rule 12(b)(6). 

In summary, we affirm the dismissal of plaintiff's claim 

under Section 1981, his claim of deprivation of a liberty or 

property interest and his First Amendment argument on appeal under 

Section 1983, his First Amendment claim under Section 1985, and 

his RICO claim. We also affirm the denial of sanctions. However, 

in light of our duty to construe plaintiff's complaint liberally 

at this stage of the proceedings, we reverse the dismissal of 

plaintiff's equal protection claims brought under Sections 1983 

and 1985, although we do not intimate any views as to plaintiff's 

likelihood of ultimately succeeding in proving those claims. 

Because we do not affirm the dismissal of all of plaintiff's 

federal claims, the district court has jurisdiction, in its 

discretion, to hear plaintiff's pendent state claims. See United 

Mine Workers v. Gibbs, 383 U.S. 715, 725 (1966). We therefore 

reverse the district court's dismissal of the state claims for 

lack of jurisdiction. 

AFFIRMED IN PART, REVERSED IN PART, and REMANDED for further 

proceedings consistent with this opinion. 

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