Court Opinion

ID: 9462473
Source: CourtListenerOpinion
Date Created: 2023-08-04 22:41:50.677754+00
Date Added: 2024-06-11T17:37:35.898902
License: Public Domain

OAKES, Circuit Judge
(dissenting):
I respectfully dissent.
In my view the complaint alleges facts which are sufficient to state a substantial claim under 42 U.S.C. § 1985(3). Since appellant has also raised a claim under the laws of New York, we have pendent jurisdiction over the state law claim so long as “the relationship between [the federal] claim and the state claim permits the conclusion that the entire action before the court comprises but one constitutional ‘case.’ ” United Mine Workers of America v. Gibbs, 383 U.S. 715, 725, 86 S.Ct. 1130, 1138, 16 L.Ed.2d 218 (1966). See also Van Gemert v. Boeing Co., 520 F.2d 1373, 1382 (2d Cir. 1975), cert. denied, 423 U.S. 947, 96 S.Ct. 364, 46 L.Ed.2d 282 (1975).1 Appellant’s complaint cites New York Executive Law § 296(5)(a)(l) (McKinney 1974) as the source of her state law claim.2 However, this section of the New York Human Rights Law is not enforceable in federal court, but is part of an administrative scheme which is administered by the state Division of Human Rights. The Division investigates complaints, has hearings and issues orders upon complaints filed by persons who claim their rights have been violated. Id. § 297. These orders are subject to judicial review in the state courts. Id. § 298. Obviously the federal courts cannot take jurisdiction over the state remedy with its administrative procedures, exhaustion of which is essential.
But New York Civil Rights Law § 19-a (McKinney 1975-1976 Supp.) provides a basis for a pendent state claim *73which is inherent in the appellant’s pleaded allegations. That section provides that
No corporation formed for the purpose of the cooperative ownership of real estate within the state shall withhold its consent to the sale or proposed sale of certificates of stock or other evidence of ownership of an interest in such corporation because of the race, creed, national origin, or sex of the purchaser.
Id. It is obvious that the claim arising under this state statute3 has the same “common nucleus of operative fact” as appellant’s federal claim. Therefore, “considerations of judicial economy, convenience and fairness to litigants,” United Mine Workers of America v. Gibbs, supra, 383 U.S. at 726, 86 S.Ct. at 1139, appear at this stage of the case to weigh in favor of resolution of the state claim in the federal court proceedings.
It is well to remember that federal jurisdiction is conferred here by 28 U.S.C. § 1343(1), (3), (4), and 28 U.S.C. § 1331(a).4 Resort is had to 42 U.S.C. § 1985(3) only to determine whether a claim is stated thereunder, since it creates the cause of action. See McNeese v. Board of Education, 373 U.S. 668, 671 & n. 1, 83 S.Ct. 1433, 10 L.Ed.2d 622 (1963) (§ 1983 action); Byrd v. Sexton, 277 F.2d 418 (8th Cir.) (Blackmun, Circuit Judge), cert. denied, 364 U.S. 818, 81 S.Ct. 49, 5 L.Ed.2d 48 (1960); Campbell v. Glenwood Hills Hospital, Inc., 224 F.Supp. 27, 29 (D.Minn.1963).
Where, as here, allegations in a complaint are sufficient to state a § 1985(3) conspiracy claim, the trial court may resolve both the § 1985(3) claim and the state claim, or, which may be preferable, avoid resolving the § 1985(3) claim on the merits if the pendent state claim permits disposition of the case. Here, as in Siler v. Louisville & Nashville Railway Co., 213 U.S. 175, 191, 29 S.Ct. 451, 455, 53 L.Ed. 753 (1909), once a federal question is substantially alleged, the court has
the right to decide all the questions in the case, even though it decided the Federal questions adversely to the party raising them, or even if it omitted to decide them at all, but decided the case on local or state questions only.
To put it another way, resolution of the state law claim here alone is proper, and would permit avoidance of an “avoidable” decision under federal civil rights law. See P. Bator, P. Mishkin, D. Shapiro and H. Wechsler, Hart and Wechsler’s The Federal Courts and the Federal System (2d ed. 1973) at 922-23; C. Wright, Law of Federal Courts (1970) § 19, at 62-65. See generally Note, UMW v. Gibbs and Pendent Jurisdiction, 81 Harv. L.Rev. 657 (1968).
The complaint names three individual defendants as well as the corporate defendant and alleges that they have conspired with each other to deprive appellant of her civil and property rights. The court below found that appellant’s complaint did not state a claim under § 1985(3) because the court interpreted the complaint as failing to assert that the individual defendants were acting outside their official capacity as directors of the defendant corporation. Thus, the court reasoned, the actions of the indi*74vidual defendants “cannot be considered the product of a conspiracy when the board was merely carrying out the corporation’s managerial policy.” 396 F.Supp. 450, 456.
It is, to be sure, basic conspiracy law that a corporation cannot conspire with its agents or employees acting within the scope of their employment, Pearson v. Youngstown Sheet & Tube Co., 332 F.2d 439 (7th Cir.), cert. denied, 379 U.S. 914, 85 S.Ct. 262, 13 L.Ed.2d 185 (1964). And it has been said that if the conspiratorial conduct challenged is essentially a “single act of discrimination by a single business entity,” the fact that two or more agents participated in the decision or act will “normally not constitute” a § 1985(3) conspiracy. Dombrowski v. Dowling, 459 F.2d 190, 196 (7th Cir. 1972). But here the individual defendants were not alleged to be simply agents or employees of the corporate defendant, nor to be acting in the scope of their employment, nor to be acting for the corporate benefit. A closer reading of the complaint indicates that appellant explicitly alleges that the injurious acts of the individual defendant conspirators were indeed committed in their individual, not their corporate, capacities.
Here the complaint alleges that the individual defendants “constitute the officers and the entire Board of Directors of the corporate defendant, and wholly dominate, operate and control all its business and financial affairs.” (Emphasis added.) These allegations alone serve to distinguish this case from Dombrowski, supra. As recognized by Judge McMillen in Cohen v. Illinois Institute of Technology, 384 F.Supp. 202, 205 (N.D. Ill.1974), the case is entirely different when the individual officers or directors are “alleged to have controlled [the corporate defendant] or to have personally committed acts of discrimination . .”5 In such a case, as here, the individuals are not acting at the direction of their corporate employer or necessarily for its benefit.
Further, the complaint alleges that the defendants, “in furtherance of the said design and conspiracy,”
[a]dvised, caused, permitted and allowed the President and the Board of Directors of the corporate defendant to deny plaintiff permission and authority to continue occupancy of the subject premises.
Surely the implication of such an allegation is not that the defendants in their capacity as corporate agents advised themselves to act in their capacity as corporate agents. Rather, it is that defendants in their individual capacities determined according to personal motives that they would cause managerial action by the president and the board of directors to serve their individual interests. The crux of this allegation is that defendants acted, albeit behind the screen of their corporate roles, in an individual and not an official capacity.
Here, indeed, the complaint also alleges that “the purpose, intent and result” of the conspiracy “was to enable, permit and allow the said defendants to receive for their own use and benefit and not for the benefit of plaintiff the sole and exclusive right to determine who shall own said shares of stock and the proprietary lease in the subject premises . .” (Emphasis added.) As shareholders in the cooperative corporation and as leaseholders in the building it would be to their individual financial benefit to have the Girard apartment revert to the corporation and it might very well be to their personal benefit to acquire the apartment for themselves. These allegations as to personal motives alone further serve to distinguish this case from the corporate-agent cases referred to above. See Nelson Radio & Supply Co. v. Motorola, 200 F.2d 911, 914 *75(5th Cir. 1952), cert. denied, 345 U.S. 925, 73 S.Ct. 783, 97 L.Ed. 1356 (1953).
Moreover, acts engaged in as a part of the conspiracy by defendants allegedly include deliberate and malicious “telephone calls to plaintiff at unreasonable hours solely for the purpose of harassing and annoying her in order to force plaintiff to vacate said premises . . . .” Such conduct, if established, would surely be individual and noncorporate in nature; nor are these allegations to be lightly disregarded or passed off as being de minimis. Cf. Rackin v. University of Pennsylvania, 386 F.Supp. 992 (E.D. Pa.1974).
All of these factors in my view make the question whether the alleged § 1985(3) conspiracy existed one that certainly is substantial, so as to supply, even if it does not succeed on its own merits, clear pendent jurisdiction of the state law claim.
There is, to be sure, another question, left open in Griffin v. Breckinridge, 403 U.S. 88, 102 n. 9, 91 S.Ct. 1790, 1798, 29 L.Ed.2d 338 (1971), “whether a conspiracy motivated by invidiously discriminatory intent other than racial bias would be actionable” under § 1985(3). A series of recent Supreme Court cases, perhaps the foremost of which is Taylor v. Louisiana, 419 U.S. 522, 95 S.Ct. 692, 42 L.Ed.2d 690 (1975), point the way toward an affirmative answer in cases involving bias on account of sex. One would estimate that deprival of valuable property rights on account of a person’s gender would constitute a denial “of the equal protection of the laws” within § 1985(3), as well as within the Fourteenth Amendment. See Stanton v. Stanton, 421 U.S. 7, 95 S.Ct. 1373, 43 L.Ed.2d 688 (1975); Weinberger v. Wiesenfeld, 420 U.S. 636, 95 S.Ct. 1225, 43 L.Ed.2d 514 (1975); Frontiero v. Richardson, 411 U.S. 677, 93 S.Ct. 1764, 36 L.Ed.2d 583 (1973).
There is, in short, a claim under this federal civil rights statute to warrant federal jurisdiction under 28 U.S.C. § 1331(a) or § 1343(1), and under the principles of pendent jurisdiction above enumerated clearly to support consideration of the state law claim under the New York Civil Rights Law. I would reverse and remand for that consideration.6

. See also Rosado v. Wyman, 397 U.S. 397, 404, 90 S.Ct. 1207, 25 L.Ed.2d 442 (1970); Bell v. Hood, 327 U.S. 678, 66 S.Ct. 773, 90 L.Ed. 939 (1946); Levering & Garrigues Co. v. Morrin, 289 U.S. 103, 105, 53 S.Ct. 549, 77 L.Ed. 1062 (1933).

. At the time appellant filed this action, New York Executive Law § 296(5)(a)(l) provided:
(a) It shall be an unlawful discriminatory practice for the owner, lessee, sub-lessee, as-signee, or managing agent of, or other person having the right to sell, rent or lease a housing accommodation, constructed or to be constructed, or any agent or employee thereof:
(1) To refuse to sell, rent, lease or otherwise to deny to or withhold from any person or group of persons such a housing accommodation because of the race, creed, color, national origin, sex, or disability of such person or persons.
Paragraph (1) has since been amended to include the words “or marital status” after the word “disability.”

. New York Civil Rights Law § 19-b (McKinney 1975-1976 Supp.) provides that “[a]ny person aggrieved by a violation of section nineteen-a . . . shall have a right of action in any court of appropriate jurisdiction to restrain such violation and for other equitable remedies, including such affirmative and other relief as may be necessary to undo the effect of such violation.”

. Probably §§ 1331(a) and 1343(1) are the most applicable, § 1331(a) because the jurisdictional amount test is clearly satisfied and it is property rights of which appellant claims to be deprived, see Hague v. CIO, 307 U.S. 496, 518-32, 59 S.Ct. 954, 83 L.Ed. 1423 (1939); Note, Jurisdictional Amount in Civil Rights Cases, 9 U.Chi.L.Rev. 302 (1942), and § 1343(1) because it is the jurisdictional counterpart to 42 U.S.C. § 1985(3). Moreover, unlike § 1343(3), neither § 1331(a) nor § 1343(1) contains a requirement of infringement of rights under “color of state law.” See Lynch v. Household Finance Corp., 405 U.S. 538, 547, 92 S.Ct. 1113, 31 L.Ed.2d 424 (1972).

. While in Baker v. Stuart Broadcasting Co., 505 F.2d 181, 183 (8th Cir. 1974), two of the three named individual defendants owned 100 per cent of the stock of the corporation, the nature of this ownership or its relevance to the alleged conspiracy was not discussed. The decision cannot therefore be deemed illuminating on this point.

. Appellees have argued that this suit is barred by the res judicata effect of a prior state court action brought by appellant against these same appellees. In the state court litigation, however, appellant merely contended that the appellees’ refusal to assign to her the shares of the corporation owned by her former husband was in breach of the lease agreement and state corporations law. Mo violation of civil rights was alleged in the state court action, and the state judge, in ruling against appellant’s claim, stated only that appellees have the right to refuse to consent to the transfer of a cooperative lease for any reason “except, of course, those prohibited by the Civil Rights Law.” Girard v. 94th Street and Fifth Avenue Corp., Civ. No. 15173/73 (Supreme Court, New York County, July 8, 1974) (memorandum opinion). Only the other day, in Herendeen v. Champion International Corp., 525 F.2d 130 (2d Cir. 1975), we held under New York law that where a plaintiff in a second suit sets forth “an independent claim of defendant wrongdoing” the first suit does not bar the second even though the plaintiff “could have joined” the second suit claim with the first. Id. at 134. While Mrs. Girard could have joined her civil rights claim in her state court suit she did not do so. She is not barred, therefore, from asserting it now.