Court Opinion

ID: 2965213
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Date Created: 2015-09-21 21:37:18.088087+00
Date Added: 2024-06-11T11:43:05.944311
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USCA1 Opinion

	

                            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-