UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION 

BRIAN PALMER,

Plaintiff,

Case No. 14-14820

v. HON. DENISE PAGE HOOD

BILL SCHUETTE and

SCOTT TETER,

Defendants.

_________________________________________/

ORDER DENYING PLAINTIFF’S COMBINED MOTION FOR

RECONSIDERATION AND MOTION TO AMEND COMPLAINT [#20]

I. INTRODUCTION

On December 19, 2014, Plaintiff Brian Palmer filed a three-count Complaint

against Defendants Bill Schuette (“Schuette”) and Scott Teter (“Teter”). On

September 27, 2016, the Court entered an Order Granting Defendants’ Motion to

Dismiss. [Dkt. No. 18] On October 13, 2016, Plaintiff filed a Combined Motion for

Reconsideration and Motion to Amend the Complaint (“Combined Motion”) [Dkt.

No. 20], to which Defendants filed a response and Plaintiff filed a reply. The Court,

having concluded that the decision process would not be significantly aided by oral

argument, previously ordered that the motion be resolved on the motion and briefs

submitted by the parties. E.D. Mich. L.R. 7.1(f)(2). [Dkt. No. 22] For the reasons that

1
follow, the Court denies the Combined Motion.

II. BACKGROUND

The relevant facts regarding this matter were set forth in the Court’s September

27, 2016 Order and, rather than restate them here, the Court incorporates them by

reference in this Order. The following facts are relevant to the Combined Motion. 

Plaintiff is a former Michigan state representative who was charged in a

misdemeanor complaint with, and entered a no-contest plea in the 54A District Court

to, one count of willful neglect of duty under M.C.L. § 750.478. M.C.L. § 750.478

provides:

When any duty is or shall be enjoined by law upon any public officer, or

upon any person holding any public trust or employment, every willful

neglect to perform such duty, where no special provision shall have been

made for the punishment of such delinquency, constitutes a misdemeanor

punishable by imprisonment for not more than 1 year or a fine of not

more than $1,000.00.

Prior to and at the time Plaintiff entered his no-contest plea, he “was self-employed

as a partner and the president of his own venture capital company.” 

Teter is an assistant attorney general in the office of the Michigan Attorney

General who prosecuted Plaintiff. Schuette is the Attorney General for the State of

Michigan, and he authorized the charge against Plaintiff. 

On December 20, 2013, the same day that Plaintiff entered his no-contest plea

and was sentenced, Schuette issued, and Teter contributed to, a press release on the

2
Michigan Attorney General website regarding Plaintiff’s conviction. The press

release was titled “Schuette Announces Conviction of Former Macomb State

Representative for Role in Ponzi Scheme.” The press release stated, in part, that

Plaintiff “assisted two other men to operate a $9 million Ponzi scheme that defrauded

more than 150 persons between 2006 and 2012” and “used his position as an elected

official to assist” others in operating a fraudulent investment company. [Dkt. No. 1,

¶¶ 24-26] 

Plaintiff’s Complaint alleged that Defendants, acting in their individual

capacities: (1) violated Plaintiff’s due process rights under the Fifth and Fourteenth

Amendments (Count I); (2) violated Plaintiff’s Fourth Amendment right to be free

from prosecution without probable cause (Count Two); and (3) defamed Plaintiff

under the laws of the State of Michigan (Count Three). Plaintiff’s Motion for

Reconsideration challenges the Court’s dismissal of Counts I and Count III but not the

dismissal of Count II.

III. APPLICABLE LAW & ANALYSIS 

A. Reconsideration Standard

In order to obtain reconsideration of a particular matter, the party bringing the

motion for reconsideration must: (1) demonstrate a palpable defect by which the Court

and the parties have been misled; and (2) demonstrate that “correcting the defect will

3
result in a different disposition of the case.” E.D. Mich. L.R. 7.1(h)(3). See also

Graham ex rel. Estate of Graham v. County of Washtenaw, 358 F.3d 377, 385 (6th

Cir. 2004); Aetna Cas. and Sur. Co. v. Dow Chemical Co., 44 F.Supp.2d 865, 866

(E.D. Mich. 1999); Kirkpatrick v. General Electric, 969 F.Supp. 457, 459 (E.D. Mich.

1997). 

A “palpable defect” is a “defect which is obvious, clear, unmistakable, manifest,

or plain.” Olson v. The Home Depot, 321 F.Supp.2d 872, 874 (E.D. Mich. 2004). The

movant must also demonstrate that the disposition of the case would be different if the

palpable defect were cured. E.D. Mich. L.R. 7.1(h)(3). Brown v. Walgreens Income

Protective Plan for Store Managers, No. 10-CV-14442, 2013 WL 1040530, at *1

(E.D. Mich. Mar. 15, 2013). “[T]he court will not grant motions for rehearing or

reconsideration that merely present the same issues ruled upon by the Court, either

expressly or by reasonable implication.” E.D. Mich. L.R. 7.1(h)(3). 

B. Standard for Amending a Complaint

In a case where a responsive pleading has been filed, a party may amend its

pleading only with the written consent of the opposing party or by leave of the Court.

FED. R. CIV. P. 15(a)(2). Defendant does not concur in Plaintiff’s motion, so it is

within the Court’s discretion whether to grant Plaintiff’s motion to amend his

complaint. Pursuant to Rule 15(a)(2), “leave shall be freely given when justice so

4
requires.” The factors a court is to consider when determining whether to permit a

plaintiff to file an amended complaint are:

(1) the delay in filing the motion,

(2) the lack of notice to the other party,

(3) bad faith by the moving party,

(4) repeated failure to cure deficiencies by previous amendments,

(5) undue prejudice to the opposing party, and

(6) futility of the amendment.

Wade v. Knoxville Utilities Bd., 259 F.3d 452, 460 (6th Cir. 2001); Perkins v. Am.

Elec. Power Fuel Supply, Inc., 246 F.3d 593, 605 (6th Cir. 2001). A district court

may deny a plaintiff leave to amend his complaint when the proposed amendment

would be futile. See, e.g., Yuhasz v. Brush Wellman, Inc., 341 F.3d 559, 569 (6th Cir.

2003) (citing Foman v. Davis, 371 U.S. 178 (1962)). An amendment is deemed futile

when it would not withstand a Rule 12(b)(6) motion to dismiss. Rose v. Hartford

Underwriters Ins. Co., 203 F.3d 417, 420-21 (6th Cir. 2000).

In the Eastern District of Michigan, a party moving to amend its Complaint

must satisfy certain requirements:

LR 15.1: Form of a Motion to Amend and Its Supporting

Documentation

A party who moves to amend a pleading shall attach the proposed

amended pleading to the motion. Any amendment to a pleading, whether

filed as a matter of course or upon a motion to amend, must, except by

leave of court, reproduce the entire pleading as amended, and may not

incorporate any prior pleading by reference. Failure to comply with this

5
Rule is not grounds for denial of the motion.1

C. Qualified Immunity

As the United States Supreme Court recently stated:

The doctrine of qualified immunity shields officials from civil liability

so long as their conduct does not violate clearly established statutory or

constitutional rights of which a reasonable person would have known. 

A clearly established right is one that is sufficiently clear that every

reasonable official would have understood that what he is doing violates

that right. We do not require a case directly on point, but existing

precedent must have placed the statutory or constitutional question

beyond debate. Put simply, qualified immunity protects all but the

plainly incompetent or those who knowingly violate the law.

Mullenix v. Luna, 136 S. Ct. 305, 308 (2015) (citations and quotation marks omitted). 

Qualified immunity is a two-step process. See, e.g., Saucier v. Katz, 533 U.S. 194

(2001); Harlow v. Fitzgerald, 457 U.S. 800, 818 (1982). First, the Court must

determine whether, based upon the applicable law, the facts viewed in a light most

favorable to the plaintiff show that a constitutional violation has occurred. Causey v.

Bay City, 442 F.3d 524, 528 (6th Cir. 2006). Second, the Court must determine

whether the violation involved a clearly established constitutional right of which a

reasonable person would have known. Id.; Sample v. Bailey, 409 F.3d 689, 695-96

1

Plaintiff failed to comply with Local Rule 15.1 when filing the Combined Motion. No

proposed amended pleading is attached to the Combined Motion, Plaintiff’s reply brief, or any

separate filing. As “[f]ailure to comply with Local Rule 15.1 is not a grounds for denial of the”

Combined Motion, the Court addresses the new assertions and allegations that Plaintiff sets forth

in his Combined Motion and reply to Defendant’s response brief.

6
(6th Cir. 2005). Once a government official has raised the defense of qualified

immunity, the plaintiff “bears the ultimate burden of proof to show that the individual

officers are not entitled to qualified immunity.” Cockrell v. City of Cincinnati, 468 F.

App’x 491, 494 (6th Cir. 2012) (citation omitted).

D. Analysis

In his reply brief, Plaintiff argues that, although Defendants had a right to file

a response to his Motion to Amend the Complaint, Defendants had no right to file a

response to his Motion for Reconsideration. For a typical motion for reconsideration,

the Local Rules for the Eastern District of Michigan prohibit a party from filing a

response brief. E.D. Mich. L.R. 7.1(h)(2). The Court finds that Plaintiff has not filed

a typical motion for reconsideration. As reflected in the title of his motion, Plaintiff

filed a “Combined Motion for Reconsideration and Motion to Amend the Complaint.” 

Plaintiff could have filed two separate motions to address the issues of reconsideration

and amendment, but he chose not to do so. As he filed the Combined Motion (a single

motion), the Court holds that Defendants had the right to file a response brief to the

Combined Motion because Defendants had a right to file a response to the Motion to

Amend the Complaint. The Court also notes that, had Defendants not filed a response

brief that addressed the Motion for Reconsideration, the Court would have ordered

Defendants to file a response brief, which the Court has the authority and discretion

7
to order pursuant to Local Rule 7.1(h)(2). The Court rejects Plaintiff’s argument

regarding the propriety of the response brief filed by Defendants.

In his Complaint, Plaintiff alleged that Defendants’ press release contained false

and defamatory statements that resulted in Plaintiff suffering “severe and substantial

damages[,] . . . includ[ing] loss of earnings and loss of earnings capacity, lost business

opportunities, litigation expenses including attorney fees, loss of reputation,

humiliation, embarrassment, inconvenience, mental and emotional anguish, and

distress,” all of which had to be taken as true for purposes of deciding Defendants’

Motion to Dismiss. [Dkt. No. 1, ¶¶ 47, 57, 80] With respect the purported violation

of Plaintiff’s Fourteenth Amendment due process rights in Count I, the Court

concluded that Plaintiff’s Complaint did not allege that the defamatory comments

affected his employment status at the time the press release was issued (his then-

“current” employment status). [Dkt. No. 18, PgId 186-92] The Court held that

Plaintiff failed to allege that he was deprived of any liberty or property interest

protected by the Fourteenth Amendment due process clause. Paul v. Davis, 424 U.S.

693, 712 (1976). The Court also held that Plaintiff’s allegations in Count I that

Defendants violated his Fifth Amendment due process rights required dismissal

because they were state, not federal, actors. [Dkt. No. 18, PgId 181-82] 

Plaintiff argues that the Court did not understand and consider that Plaintiff was

8
“currently” employed at the time the press release was issued. Plaintiff asserts that he

was self-employed as a partner and the president of his own venture capital company,

and Plaintiff wishes to amend his Complaint to better plead those facts.

The Court will accept, without finding, that being self-employed constitutes

employment for purposes of establishing a property or liberty interest for purposes of

Fourteenth Amendment analysis. Even if that is true, Plaintiff has not alleged (nor

does he propose to amend his complaint to allege) that his self-employment was

terminated or that his salary was reduced as a result of the alleged defamatory press

release. Plaintiff concedes that neither of those circumstances occurred in this case.

Plaintiff instead asserts that a self-employed person “sustains damages to his

employment when he or she loses business.” Plaintiff argues that self-employed

persons lose business when their clients fire them, a situation Plaintiff claims occurred

in this case. Plaintiff has attached to his motion a January 27, 2015 letter from Doron

Private Equity, a company with “a very successful on-going business relationship

with” Plaintiff, to his attorney. Plaintiff also attaches to the Combined Motion a list

of clients or investors that he alleges withdrew, canceled or liquidated investments

with him “beginning at the time of the press release, and continuing thereafter.”

The Court is not persuaded that the allegations that Plaintiff purports to have

set forth in his Complaint – or those allegations that he apparently intends to allege

9
in an amended complaint – create a palpable defect by which the Court and the parties

were misled. First, Plaintiff has not cited any authority to support his position that he

has a property or liberty interest under the Fifth or Fourteenth Amendment that is

violated when one’s self-employed status is damaged as the result of defamatory

statements by a government actor. 

Second, the injury for which Plaintiff is seeking a remedy – the impairment of

his business relationships due to defamation – appears to the Court to be a claim that

sounds in tort (such as tortious interference with a business relationship), not

constitutional law. For these reasons, the Court concludes that Plaintiff has not – and

cannot – allege a violation of a constitutional right pursuant to the Fifth or Fourteenth

Amendment. 

Third, even if the Court were to assume that Plaintiff has a constitutional right

under the Fifth or Fourteenth Amendment protecting his self-employed status from

impairment by defamatory statements of a government actor, there is no authority that

clearly establishes that right. In the absence of a clearly established constitutional

right of which a reasonable person would have known, Defendants are entitled to

qualified immunity. See, e.g., Mullenix, 136 S. Ct. at 308; Harlow, 457 U.S. at 818;

Causey, 442 F.3d at 528; Bailey, 409 F.3d at 695-96. The Court concludes that, even

if Plaintiff’s allegations in the Complaint (or Plaintiff’s proposed allegations) are

10
presumed to be true, Defendants remain entitled to qualified immunity.

In Count I of the Complaint (titled “Constitutional Violation of Due Process

Rights under the Fifth and Fourteenth Amendments of the United States”), Plaintiff

alleged that Defendants’ press release violated his Fifth Amendment due process

rights. [Dkt. No. 1, PgID 5-7 at ¶¶ 40-51] Defendants argued in their Motion to

Dismiss, and the Court held, that Defendants were state actors who could not be liable

for deprivation of Plaintiff’s due process rights under the Fifth Amendment. Plaintiff

did not contest the Defendant’s argument in his response to Defendant’s Motion to

Dismiss [Dkt. No. 9], nor did he contest the Court’s ruling dismissing his Fifth

Amendment claim when he filed the Combined Motion. In his reply brief regarding

the Combined Motion, Plaintiff makes an argument regarding his Fifth Amendment

claim, even though Defendants did not argue Plaintiff’s Fifth Amendment claim. But,

in doing so, Plaintiff does not discuss the alleged violation of his due process rights

under the Fifth Amendment pled in the Complaint; rather, he asserts, for the first time,

that the Defendants violated the Fifth Amendment takings clause. 

The Court holds that: (1) Plaintiff waived any argument regarding the Fifth

Amendment due to his failure to address the Fifth Amendment in his response to

Defendant’s Motion to Dismiss and in the Combined Motion; (2) Plaintiff’s Fifth

Amendment takings clause argument has no connection to the allegations in the

11
Complaint and cannot serve as a basis for demonstrating a palpable defect upon which

the Court should reconsider its ruling; and (3) to the extent that Plaintiff is suggesting

that he intends to amend his Complaint to allege a takings claim under the Fifth

Amendment, that amendment would be futile because Defendants would still be

entitled to qualified immunity. None of the authority set forth by Plaintiff reflects a

clearly established constitutional right under the Fifth Amendment takings clause with

respect to self-employment of which a reasonable person could have been aware.

3. Conclusion

For the reasons set forth above, the Court finds that Plaintiff has failed to

demonstrate a palpable defect by which the Court and the parties were misled with

respect to Count I. Plaintiff has failed to demonstrate the existence of any clearly

established constitutional right that Defendants could have known they were violating

when they issued the press release. The Court further finds that Plaintiff’s proposal

to amend his Complaint would be futile because none of the “amendments” proposed

by Plaintiff sets forth a clearly established constitutional right that Defendants would

have known. 

As the Court has again concluded that Plaintiff does not have a viable federal

law claim, the Court declines to exercise supplemental jurisdiction over Count III, for

the reasons set forth in its September 27, 2016 Order. 

12
The Court denies the Combined Motion. 

IV. CONCLUSION 

For the reasons stated above, 

IT IS ORDERED that Plaintiff’s Combined Motion for Reconsideration and

Motion to Amend the Complaint [Dkt. No. 20] is DENIED.

IT IS SO ORDERED.

S/Denise Page Hood 

Denise Page Hood

Chief Judge, United States District Court

Dated: September 11, 2017

I hereby certify that a copy of the foregoing document was served upon counsel of record on

September 11, 2017, by electronic and/or ordinary mail.

S/LaShawn R. Saulsberry 

Case Manager

13