Court Opinion

ID: 197827
Source: CourtListenerOpinion
Date Created: 2011-02-07 03:39:38+00
Date Added: 2024-06-11T13:14:28.425211
License: Public Domain

UNITED STATES COURT OF APPEALS
                      FOR THE FIRST CIRCUIT
                                           

No. 97-1355

                      AUGUSTUS JOHN CAMELIO,
                      Plaintiff - Appellant,

                                v.

                AMERICAN FEDERATION, ETC., ET AL.,
                     Defendants - Appellees.

                                           

           APPEAL FROM THE UNITED STATES DISTRICT COURT

                FOR THE DISTRICT OF MASSACHUSETTS

           [Hon. William G. Young, U.S. District Judge]
                                                                

                                           

                              Before

                     Torruella, Chief Judge,
                                                     

                 Godbold,* Senior Circuit Judge,
                                                         

                 and Barbadoro,** District Judge.
                                                          

                                           

     Lee  H. Kozol, with  whom Debra Dyleski-Najjar,  Penny Kozol
                                                                           
and Friedman & Atherton were on brief for appellant.
                                 
     Andrew D. Roth, with whom  Devki K. Virk, Bredhoff & Kaiser,
                                                                           
P.L.L.C.,  William J. Hardy,  Prescott M. Lassman  and Kleinfeld,
                                                                           
Kaplan & Becker were on brief for appellees.
                         

                                           

                          March 5, 1998
                                           

                    
                              

*  Of the Eleventh Circuit, sitting by designation.

**  Of the District of New Hampshire, sitting by designation.

          BARBADORO, District  Judge.  Augustus Camelio, a former
                    BARBADORO, District  Judge.
                                              

employee and member of a labor  union, brought this suit in state

court  against the union and  fourteen members of its leadership.

Camelio alleges  that defendants had  him fired from his  job and

forced  him  out of  the  union  in  violation of  the  Racketeer

Influenced and  Corrupt Organizations Act  ("RICO"), 18  U.S.C.A.

   1961-1968  (West 1994 & Supp. 1997), and several provisions of

Massachusetts state  law.  After  defendants removed the  case to

federal  court, the district court below dismissed Camelio's RICO

claim and several  of his state law causes of  action for failure

to  state a claim.  The  court then remanded the remaining claims

to state court.  Camelio appeals the dismissal of his federal and

state  claims.   We affirm  in  part, concluding  that the  court

properly dismissed  his RICO claim.   We disagree,  however, with

the district court's decision to  dismiss the state law causes of

action.   Rather than  dismissing these claims,  the court should

have remanded  them to  state court along  with the  rest of  the

state law claims. 

                         I.  BACKGROUND1
                                   I.  BACKGROUND1
                                                 

          Augustus  Camelio served  for  nearly thirty  years  as

General  Counsel  to Council  93  of the  American  Federation of

State, County and Municipal Employees  ("AFSCME").  In 1995,  the

United  States Department  of  Labor  and  the  Internal  Revenue
                    
                              

1  As this appeal  arises from a dismissal for failure to state a
claim,  we treat as true the complaint's well-pleaded allegations
and construe those  allegations in Camelio's  favor.  See,  e.g.,
                                                                          
Miranda  v. Ponce  Fed. Bank,  948 F.2d 41, 43 (1st  Cir. 1991);
                                      
Nodine v. Textron, Inc., 819 F.2d 347 (1st Cir. 1987).
                                 

                               -2-

Service  initiated  investigations  into Council  93's  financial

affairs   that  threatened  to   expose  an  ongoing   scheme  to

misappropriate  union funds  by several  members  of the  union's

leadership.   In response, Camelio alleges, defendants engaged in

a concerted effort to thwart the two federal investigations.

          Camelio  launched  his own  investigation  into Council

93's financial affairs  after learning of the  federal inquiries.

He  claims that  the individual  defendants, all  members of  the

union leadership, initially rebuffed his requests for information

and later had him fired when he persisted with his investigation.

Camelio continued to investigate even after he lost his job, this

time relying  on his  right  as a  union  member to  inspect  the

union's books and  records.  He also announced  his candidacy for

vice  president  of  AFSCME's  northern  New  England  region,  a

position that would  allow him to further his  investigation.  In

an  attempt  to thwart  Camelio's  candidacy  and  keep him  from

uncovering any evidence of  defendants' criminal scheme, however,

several of the individual defendants first threatened Camelio and

ultimately forced  him out of  the union when their  threats were

not heeded.  

          Camelio sued Council  93 and the  individual defendants

in  Massachusetts  state  court.    He  alleged claims  based  on

Massachusetts  law for  breach of  contract, wrongful  discharge,

tortious  interference with  contract,  violations  of the  state

constitution, intentional  and negligent infliction  of emotional

distress, defamation,  and false light  invasion of privacy.   He

                               -3-

also  alleged that the individual defendants violated the federal

RICO statute.  See 18 U.S.C.A.    1962(c), 1964(c).  
                            

          Relying on  Camelio's RICO  claims, defendants  removed

the case to  federal court in the District of Massachusetts.  See
                                                                           

28 U.S.C.A.   1441(a)&(b) (West  1994).  Defendants then moved to

dismiss for failure to state a claim.  The district court allowed

Camelio to  amend his  complaint to more  specifically state  his

allegations,  but  ultimately  concluded that  he  had  failed to

sufficiently allege  a RICO claim against any  of the defendants.

The  court also  dismissed three  of Camelio's  state law  claims

against all defendants (breach of  contract, negligent infliction

of  emotional distress, and false  light invasion of privacy) and

parts  of  two  other  claims   as  to  some  defendants   (state

constitutional violations and intentional infliction of emotional

distress) before remanding the remaining claims to state court.

                         II.  DISCUSSION
                                   II.  DISCUSSION
                                                  

          The district  court  dismissed  Camelio's  RICO  claims

because it concluded  Camelio's complaint failed to  sufficiently

allege that  his injuries  were proximately caused by any of  the

predicate  acts of  racketeering  on which  the RICO  claims were

based.    The court  gave  only  a  cursory explanation  for  its

dismissal  of  the  state  law  claims  over  which  it  retained

jurisdiction.  Camelio challenges both rulings. 

          A.  The RICO Claims
                    A.  The RICO Claims
                                       

          In  addition  to criminal  penalties,  RICO  provides a

private right of action for  treble damages and attorneys fees to

                               -4-

"[a]ny person  injured in his business or property by reason of a

violation  of section  1962."   18 U.S.C.A.    1964(c).   Camelio

bases his  RICO claims on   1962(c),  which makes it unlawful for

any person  to  conduct the  affairs of  an enterprise  affecting

interstate  commerce by  means  of  a  "pattern  of  racketeering

activity."  18 U.S.C.A.   1962(c).   The Act also provides a list

of actions and statutory violations that constitute "racketeering

activity" and states  that a "pattern" of  such activity requires

at least  two acts of  racketeering.  18 U.S.C.A.    1961(1)&(5).

When  a plaintiff  attempts  to  base a  civil  RICO  claim on   

1962(c),  that claim cannot succeed unless  the injuries of which

the  plaintiff  complains were  caused  by  one  or more  of  the

specified acts  of racketeering.2    Miranda v. Ponce  Fed. Bank,
                                                                          

948 F.2d 41,  46-7 (1991).   Moreover,  merely proving  that the

alleged  predicate  acts were  a "cause  in fact"  of plaintiff's

injuries will  not be  sufficient.   Instead,   1964(c)  requires

proof that at least one of the defendant's predicate acts was the

proximate  cause  of   the  plaintiff's  injuries.     Holmes  v.
                                                                       

Securities Investor Protection Corp., 503 U.S. 258, 268 (1992).
                                              

          Camelio  alleges   that  defendants   injured  him   by

depriving him of his property interests  in his job and his union

membership.  He asserts that defendants engaged  in the following

pattern  of RICO  predicate acts:   misappropriation of  funds in

                    
                              

2  Although it is not at issue  in this case, this court has held
that  the same causation  requirement applies to  RICO conspiracy
claims under   1962(d).  Miranda v. Ponce Fed. Bank, 948 F.2d 41,
                                                             
48 & n.9 (1st Cir. 1991).

                               -5-

violation   of  29  U.S.C.A.     501(c)  (West  1985);  attempted

extortion in  violation of the  Hobbs Act, 18 U.S.C.A.    1961(1)

(West 1984 & Supp. 1997); and obstruction of justice in violation

of 18 U.S.C.A.     1510 and 1512 (West  1984 & Supp. 1997).3   In

his complaint,  Camelio asserts  a myriad  of  claims in  various

combinations against  fourteen individual defendants  as well  as

against Council 93.  For the sake of clarity of our  analysis, we

treat  all of the defendants together, rather than individually.4

Accordingly,  to  satisfy  RICO's causation  requirement  at  the

motion to dismiss stage, Camelio's complaint must allege that the

injuries of which he complains  were proximately caused by one or

more of  these predicate acts.  We examine the sufficiency of the

complaint's causation allegations by addressing each category  of

predicate acts in turn.

            1.  Misappropriation of Funds Claims
                                                          

          Camelio  claims that  nine of  the fourteen  individual

defendants  misappropriated  union  funds   in  violation  of  18

U.S.C.A.    501(c)  by taking  such  funds for  personal use  and

causing union money to be paid for legal services that were never

rendered. 

          A  violation of     501(c)  qualifies  as  a  predicate

racketeering  act  under  RICO.    See  29  U.S.C.A.     1961(1).
                                                
                    
                              

3    Camelio  alleges these  violations  in  various combinations
against each of the fourteen  individual defendants.  In no event
does  he  allege  less  than  two  violations  against   any  one
defendant.

4   For  the  sake  of clarity,  we  treat Camelio's  allegations
against the defendants collectively.

                               -6-

However, even if we assume  that Camelio has sufficiently alleged

that  defendants  violated     501(c),  these  violations  cannot

satisfy  RICO's  causation  requirement  because  the  connection

between the violations  and Camelio's injuries is  insufficiently

close to say that one proximately caused the other.  See Miranda,
948 F.2d at 47 (bribery not cause of plaintiff's job loss); Pujol
                                                                           

v. Shearson/American Express, Inc., 829 F.2d 1201, 1205 (mail and
                                            

wire fraud not proximate cause  of plaintiff's job loss); Nodine,
819 F.2d at 349 (mail and wire fraud not cause of plaintiff's job

loss).  In  other words, even if defendants did  violate   501(c)

by stealing  union funds,  their misappropriations  were too  far

removed from Camelio's  loss of his job and  his union membership

to serve as the proximate cause of his injuries.

            2.  Extortion Claims
                                          

          Camelio continued his investigation  after he lost  his

job,  relying  on his  right  as a  union member  to  inspect the

union's  financial   records.   See  29 U.S.C.A.    431(c)  (West
                                             

1985).  He also announced his candidacy for vice president of the

union's northern New England region.  Camelio claims that several

of the defendants attempted to stifle his investigation and force

him to abandon his candidacy by threatening to deprive him of his

membership in the  union if he did  not desist.  He  asserts that

such conduct  violates the  Hobbs Act, 18  U.S.C.A.    1951(a), a

crime which  qualifies as  a predicate  act under  RICO.   See 18
                                                                        

U.S.C.A.   1961(1). 

                               -7-

          Like Camelio's  misappropriation claims, his  Hobbs Act

claims cannot  satisfy RICO's  causation requirement  because the

Hobbs Act violations he alleges did not cause the loss  of either

his  job or  his union  membership.   The Hobbs Act  punishes any

person  who "obstructs,  delays  or  affects commerce  .  . .  by

robbery or  extortion or  attempts or conspires  to do  so."   18

U.S.C.A.     1951(a).    The  Act  defines  "extortion"  as  "the

obtaining of property  from another, with his  consent induced by
                                                                

wrongful use of actual or threatened force, violence, or fear, or

under  color  of  official  right."   18  U.S.C.A.     1951(b)(2)

(emphasis added).  If Camelio's complaint successfully pleads any

Hobbs Act violations, those violations resulted  from defendants'

attempts to  induce Camelio  to abandon  certain property  rights

attendant to his union membership (e.g., his right to inspect the

union's financial records  and his right  to seek union  office).

As Camelio  concedes that  these attempts did  not succeed,  they

could  not have  caused  his injuries.    Instead, the  complaint

alleges  that  Camelio's   injuries  were   actually  caused   by

defendants' unilateral acts which, although reprehensible, do not

violate the Hobbs Act.5
                    
                              

5     Camelio  alleges   that  defendants,   acting  in   various
combination: denied  him  the right  to attend  a union  hearing;
changed the means of collecting union dues  so as to put his dues
in  arrears and  thereby deprive  him of  his  status as  a union
member; rebuffed his subsequent efforts to pay his dues; declared
him ineligible  to seek office  within the union and  removed his
name  from the  ballot; and  denied his  repeated requests  for a
hearing on  the issue of  his membership.  Such  unilateral acts,
though possibly unlawful on some other grounds, do not fall under
the express  terms of  the Hobbs Act,  which prohibits  only "the
obtaining of property from another, with his  consent, induced by
                                                               

                               -8-

            3.  Obstruction of Justice Claims
                                                       

          Camelio's final argument is  that defendants are liable

under  RICO because  they engaged  in a  campaign  of obstructive

conduct  in  violation  of  two  federal  criminal  statutes,  18

U.S.C.A.      1510  and  1512.    Violations  of  these  statutes

constitute predicate acts of "racketeering activity" under  RICO.

See 18  U.S.C.A.    1961(1).  Further,  Camelio has  sufficiently
             

alleged that  defendants' obstructive conduct caused his injuries

to satisfy RICO's  proximate cause requirement.   Camelio's final

attempt to  salvage his RICO  claims fails, however,  because the

conduct of which he complains does not violate either obstruction

statute.

          The two statutes on which Camelio relies are similar in

focus and  effect.   Section  1510(a) makes  it a  crime for  any

person to "willfully endeavor[] by means  of bribery to obstruct,

delay,  or prevent the communication of information relating to a

violation  of  any   criminal  statute  .  .  .   to  a  criminal

investigator."   18 U.S.C.A.   1510(a).   Similarly,   1512(a)(2)

punishes  any person who  "intentionally harasses  another person

and  thereby hinders, delays,  prevents, or dissuades  any person

                    
                              

wrongful use of actual or  threatened force, violence, or  fear."
18 U.S.C.   1951(b)(2) (emphasis added); see also Evans v. United
                                                                           
States,  504 U.S. 255, 265  (1992)  (reasoning  that  where the
                
defendant  is  a private  actor  --  and  not a  public  official
extorting under color of official right  -- "the victim's consent
                                                                           
must be  induced by wrongful  use of actual or  threatened force,
violence  or   fear.")  (emphasis  added)   (internal  quotations
omitted); United States  v. Bucci, 839 F.2d 825,  827 (1st Cir.),
                                           
cert. denied, 488 U.S. 844 (1988); United States v. Hathaway, 534
F.2d 386, 393 (1st Cir.), cert. denied, 429 U.S. 819 (1976).
                                                

                               -9-

from  . .  . reporting  to a  law enforcement  officer . .  . the

commission  .  .  .  of  a  Federal  offense."    18  U.S.C.A.   

1512(c)(2).   Both  statutes  focus  on a  specific  step in  the

criminal  investigatory process,  namely  the "communication"  or

"reporting" of information to criminal investigators.  See, e.g.,
                                                                          

United States v. Siegel, 717 F.2d 9,  20 (2d Cir. 1983) (in order
                                 

to convict under   1510(a), prosecution must prove that defendant

had a reasonably founded belief that information had or was about

to  be given  to a  federal investigator);  United States  v. San
                                                                           

Martin, 515 F.2d 317, 320-21  (5th Cir. 1975)  (prosecution must
                

prove  that  "[defendant]   knew  or  reasonably  believed   that

[informant] had information which she had given or would give" to

federal investigators).  

          The conduct  on which  Camelio bases  his claims  falls

outside  the  scope  of both  statutes  because  he alleges  that

defendants engaged in  their obstructive conduct in an  effort to

prevent him from uncovering information of wrongdoing rather than

to   prevent  him  from  reporting  information  he  had  already

uncovered.   Conduct that is  aimed only at preventing  a private

citizen from  uncovering evidence  of a  crime, while  undeniably

wrong, is not within the purview of either obstruction of justice

statute.   Accordingly, Camelio  cannot save  his RICO  claims by

relying on either statute.

          This is  the fourth time  in recent years that  we have

been  called upon  to evaluate  the sufficiency  of a  RICO claim

arising from an employment dispute.  In all four cases, the claim

                               -10-

has failed to survive a  motion to dismiss.  See,  e.g., Miranda,
948 F.2d at 47; Pujol, 829 F.2d at 1205; Nodine, 819 F.2d at 349.
                                                         

Although  we are  not prepared today  to address  the issue  in a

categorical  fashion,  we  emphasize  the  court's  statement  in

Miranda:   "While it  may be theoretically  possible to  allege a
                 

wrongful  discharge which results directly from the commission of

a RICO predicate act . . . any such safe harbor would be severely

circumscribed." 948 F.2d  at 41.  Whatever  the future may hold

for  this  category of  claims,  Camelio's RICO  claims  are well

outside any safe harbor that may exist.

          B.  The State Law Claims
                    B.  The State Law Claims
                                            

          After properly  dismissing Camelio's  RICO claims,  the

district court proceeded to dismiss three of his state law claims

against  all of  the defendants  (breach  of contract,  negligent

infliction of  emotional distress,  and false  light invasion  of

privacy) and parts  of two other claims as  to several individual

defendants  (state  constitutional   violations  and  intentional

infliction of emotional  distress).  The  court then declined  to

exercise supplemental jurisdiction over the remaining  claims and

remanded them  to state court.   Camelio  challenges the  court's

dismissal of  the state law  claims.  Rather than  addressing the

merits  of these  claims, we  conclude  that the  court erred  in

retaining  supplemental jurisdiction  over the  state law  claims

after it dismissed the  federal claims on which  jurisdiction was

based.

                               -11-

          A federal  court exercising original  jurisdiction over

federal claims also has "supplemental jurisdiction over all other

claims that are  so related to  the claims in  the action  within

such original jurisdiction  that they form part of  the same case

or  controversy   under  Article   III  of   the  United   States

Constitution."  28 U.S.C.A.    1367(a) (West 1993).  If, however,

the  court dismisses  the foundational  federal  claims, it  must

reassess its jurisdiction, this time  engaging in a pragmatic and

case-specific  evaluation of a variety of considerations that may

bear on the  issue.  Roche v. John Hancock Mut. Life Ins. Co., 81
F.3d 249,  256-57 (1st Cir.  1996).  Among the  factors that will

often prove  relevant to  this calculation  are the interests  of

fairness, judicial economy, convenience, and comity.  Id.  Comity
                                                                   

is  a particularly  important concern  in  these cases.   As  the

Supreme Court observed in United  Mine Workers v. Gibbs, 383 U.S.
715, 726 (1966), 

          Needless  decisions of  state  law should  be
          avoided both  as a  matter of  comity and  to
          promote  justice  between   the  parties,  by
          procuring for them a surer-footed reading  of
          applicable  law.   Certainly, if  the federal
          claims  are  dismissed   before  trial,  even
          though not unsubstantial  in a jurisdictional
          sense, the  state claims should  be dismissed
          as well.

Accordingly,  the balance  of competing  factors  ordinarily will

weigh strongly  in favor of declining jurisdiction over state law

claims  where the foundational federal claims have been dismissed

at  an early  stage in the  litigation.   See Rodr guez  v. Doral
                                                                           

Mortgage Corp., 57 F.3d 1168, 1177 (1st Cir. 1995).  
                        

                               -12-

          A  variety of  factors  counsel  against  retention  of

jurisdiction over the state law claims  in this case.  First, the

court  dismissed the only federal  claims well before trial under

circumstances   in  which  the  parties  would  not  be  unfairly

prejudiced by a  remand of the state law claims.  Second, it does

not appear that the district  court's disposition of some but not

all  of the state law claims will  materially shorten the time it

will take to resolve the  parties' dispute as the remanded claims

concern  the  same nucleus  of  operative fact  as  the dismissed

claims.   Third, and perhaps  most importantly in this  case, the

claims  that the court  dismissed raise substantial  questions of

state law that  are best  resolved in  state court.   For all  of

these reasons, we hold that the district court erred in retaining

jurisdiction over the state law claims.

                         III.  CONCLUSION
                                   III.  CONCLUSION
                                                   

          For  the  foregoing  reasons,   we  conclude  that  the

district  court properly dismissed Camelio's RICO claims.  Having

dismissed  the federal  claims, however,  the  court should  have

refrained   from   exercising  supplemental   jurisdiction   over

Camelio's state law claims and remanded them to state court.

          The district court's dismissal of Camelio's RICO claims

is  affirmed.   As  to  the supplemental  state  law claims,  the
              affirmed
                      

court's  judgment  is  vacated with  instructions  to  remand the
                                 vacated
                                        

remaining claims to state court.

                               -13-