Court Opinion

ID: 4311265
Source: CourtListenerOpinion
Date Created: 2018-09-11 17:00:28.225548+00
Date Added: 2024-06-11T14:44:01.977654
License: Public Domain

NOT PRECEDENTIAL

                       UNITED STATES COURT OF APPEALS
                            FOR THE THIRD CIRCUIT
                                 ____________

                                       No. 17-2220
                                      ____________

                  D. RICHARD TONGE; JUST NEW HOMES, INC.,
                                           Appellants

                                             v.

                            STATE OF NEW JERSEY;
                     NEW JERSEY REAL ESTATE COMMISSION
                                 ____________

                     On Appeal from the United States District Court
                              for the District of New Jersey
                               (D.N.J. No. 3-16-cv-01319)
                      District Judge: Honorable Peter G. Sheridan
                                      ____________

                      Submitted Under Third Circuit L.A.R. 34.1(a)
                                  September 7, 2018

              Before: HARDIMAN, KRAUSE, and BIBAS, Circuit Judges.

                               (Filed: September 11, 2018)
                                      ____________

                                        OPINION*
                                      ____________

       *
        This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does
not constitute binding precedent.
HARDIMAN, Circuit Judge.

       D. Richard Tonge and Just New Homes, Inc. (collectively, Tonge) appeal the

District Court’s order dismissing their complaint for lack of subject matter jurisdiction.

Because Tonge’s claims are barred by the Eleventh Amendment, we will affirm.

                                              I

       Tonge was licensed as a real estate broker in New Jersey. He attracted customers

by offering incentives that apparently ran afoul of New Jersey law. The New Jersey Real

Estate Commission initiated disciplinary action in 2005, and five years later entered a

final order revoking Tonge’s real estate license and imposing a fine of $123,500. The

Appellate Division of the New Jersey Superior Court affirmed, and the Supreme Court of

New Jersey declined to hear Tonge’s case.

       In 2016, Tonge filed this suit against the Commission and the State of New Jersey

in the United States District Court for the District of New Jersey. He asserted several

causes of action, each of which rested on one basic claim. Tonge had argued to the

Commission that New Jersey regulators had already approved his practices as part of an

earlier settlement agreement. But the Commission found no such agreement or approval

ever existed. The Appellate Division deemed this finding supported by the “undisputed

record,” Supp. App. 44, but Tonge’s federal complaint alleged the Commission had

procured that result by fraudulently “misrepresenting, denying, omitting or concealing the

existence of a settlement agreement . . . confirm[ing] that [Tonge’s] . . . business operated

lawfully.” App. 744 (Am. Compl. ¶ 1).

                                              2
       The District Court dismissed Tonge’s initial complaint for lack of subject matter

jurisdiction but granted leave to amend. Tonge did so, but the Court found his amended

complaint did not differ materially from his first effort, and again dismissed his case, this

time with prejudice. Ruling from the bench, the District Court determined it lacked

jurisdiction under both the Rooker-Feldman doctrine and the Eleventh Amendment to the

United States Constitution. This appeal followed.

                                             II1

       We agree that the Eleventh Amendment deprived the District Court of jurisdiction

over Tonge’s suit. The Eleventh Amendment “bar[s] all private suits against non-

consenting States in federal court.” Karns v. Shanahan, 879 F.3d 504, 512 (3d Cir. 2018)

(quoting Lombardo v. Pa. Dep’t of Pub. Welfare, 540 F.3d 190, 194 (3d Cir. 2008)).

“[W]here . . . the Eleventh Amendment precludes a suit, the court in which the plaintiff

filed the action lacks subject matter jurisdiction.” Baltimore Cty. v. Hechinger

Liquidation Tr. (In re Hechinger Inv. Co. of Del., Inc.), 335 F.3d 243, 249 (3d Cir. 2003)

(citing Seminole Tribe v. Florida, 517 U.S. 44, 64 (1996)).

       This means New Jersey is amenable to private suit in federal court only to the

extent it has waived or Congress has abrogated its immunity, neither of which occurred

here. Tonge suggests he can vindicate his rights under the Fourteenth Amendment, but

       1
        In the District Court, Tonge asserted jurisdiction under 28 U.S.C. § 1331. We
have appellate jurisdiction under 28 U.S.C. § 1291. Since this case comes to us on a
motion to dismiss, we accept as true Tonge’s well-pleaded factual allegations, and
“review de novo the legal grounds underpinning [Defendants’] claim of . . . [Eleventh
Amendment] immunity.” Karns v. Shanahan, 879 F.3d 504, 512 (3d Cir. 2018) (citations
omitted).
                                              3
the ratification of that amendment did not itself open the States up to suit. Rather, Section

5 of the Fourteenth Amendment empowered Congress to abrogate New Jersey’s Eleventh

Amendment immunity, but it has not done so with respect to Tonge’s claims. See Karns,
879 F.3d at 519 (citations omitted) (noting that States are not “persons” for purposes of

42 U.S.C. § 1983).

       Nor may Tonge sue the Commission in federal court. In addition to States

themselves, the Eleventh Amendment also protects “those entities that are so intertwined

with them as to render them ‘arms of the state.’” Id. at 512–13 (citation omitted). We

have little trouble concluding that the Commission, a division of the New Jersey

Department of Insurance—the members of which are appointed and removable by the

Governor of New Jersey, N.J. STAT. ANN. § 45:15-5, and the surplus revenues of which

flow to the state treasury, id. § 45:1-3—is an arm of the State of New Jersey for Eleventh

Amendment purposes. See Karns, 879 F.3d at 512–19.

       Finally, Tonge contends he should have been allowed to amend his complaint a

second time to add claims against Commission officials in their individual capacities. It is

settled law that a District Court does not abuse its discretion in denying leave to amend

where the plaintiff makes a cursory request without providing a proposed amended

complaint. Ramsgate Court Townhome Ass’n v. West Chester Borough, 313 F.3d 157,

161 (3d Cir. 2002). Tonge requested a second chance to replead only in passing at oral

argument, stating that “an amendment is not futile, because we could add the state

officials.” Supp. App. 69. Absent more, the Court “had nothing upon which to exercise

                                              4
its discretion,” and we will not disturb its decision to deny leave to amend. Ramsgate,
313 F.3d at 161.

                                      *      *      *

       Because we will affirm the dismissal of Tonge’s complaint on Eleventh

Amendment grounds, we do not reach the separate question of whether it was also barred

by Rooker-Feldman.

                                             5