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LIPIN v. NATIONAL UNION FIRE INS. OF PITTSBURGH

March 28, 2002

JOAN CAROL LIPIN, PLAINTIFF,
V.
NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA., LAWRENCE J. BAER, MARK A. JACOBY CHRISTOPHER A. PARLO, STEVEN R. WALL AMERICAN NATIONAL RED CROSS ARTHUR W. GREIG, IN HIS INDIVIDUAL AND OFFICIAL CAPACITY, DEFENDANTS.



The opinion of the court was delivered by: Laura Taylor Swan, United States District Judge

    OPINION

Joan Carol Lipin ("Plaintiff") brings this action ("Lipin IV") against National Union Fire Insurance Company of Pittsburgh, PA ("National Union"), Lawrence J. Baer ("Baer"), Mark A. Jacoby ("Jacoby"), Christopher A. Parlo ("Parlo"), Steven R. Wall ("Wall"), the American National Red Cross (the "National Red Cross"), and Arthur W. Greig ("Greig"), in his individual and official capacity (collectively, "Defendants"), asserting causes of action pursuant to 42 U.S.C. § 1985 (2) for defamation, injurious falsehood, and obstruction of justice, civil rights causes of action pursuant to 42 U.S.C. § 1983, 1985, 1986 and 1988, and a claim for retaliation allegedly violative of the New York City Human Rights Law.

All defendants have moved to dismiss Plaintiff's amended complaint. Defendants Baer, Parlo and the National Red Cross have in addition moved for sanctions and other relief, including injunctive relief barring Plaintiff and her former counsel*fn2 from pursuing new litigation arising from the events that are the subject matter of the instant case. Plaintiff has interposed her own motion for injunctive relief.

The Court has considered thoroughly all submissions and arguments related to these motions, and the decision here rendered reflects such consideration. For the following reasons, Defendants' motions are granted and Plaintiff's action is dismissed with prejudice as to all defendants. Because Defendants' motions are dispositive of Plaintiff's claims, the Court need not address Plaintiff's motion for injunctive relief.

BACKGROUND

The following background facts are undispited and/or matters of public record. In February 1988, Plaintiff's employment as Manager of Health Services for the National Red Cross was terminated. Thereafter, Plaintiff commenced an action in state court against the National Red Cross, the American Red Cross of Greater New York, and her former supervisor, Robert Bender, Jr. Plaintiff alleged sexual harassment, discrimination, wrongful termination, civil rights violations, conspiracy, conspiratorial cover-up, defamation, blacklisting breach of contract, and intentional infliction of emotional distress. The state court dismissed that action, which was captioned Lipin v. Robert M. Bender, Jr., The American National Red Cross and American Red Cross in Greater New York ("Lipin I"), pursuant to New York Civil Practice Law and Rules ("CPLR") section 3103(c) as a sanction following certain "heinous" and "egregious" actions by Plaintiff and her attorney, Arthur M. Wisehart ("Wisehart"). The sanctioned conduct included taking and photocopying certain privileged documents belonging to the defendants in that action. Both the Appellate Division of the New York State Supreme Court and the New York State Court of Appeals affirmed the dismissal of Lipin I. Lipin v. Bender, 193 A.D.2d 424, 428 (1st Dep't 1993); Lipin v. Bender, 84 N.Y.2d 562, 572 (N.Y. 1994).

In June 1992, while her appeal from the dismissal of Lipin I was pending, Plaintiff commenced Lipin II in the United States District Court for the Southern District of New York, asserting the claims previously raised in Lipin I, and an additional claim that defendants had engaged in a conspiracy to entrap Plaintiff into taking the privileged documents and committing other litigation-related misconduct. Plaintiff made express references in her complaint to information in the privileged documents that she had been prohibited from using. The District Court entered an order sealing the complaint and staying further proceedings in Lipin II.

In March 1993, Plaintiff commenced Lipin III, again in this District, again asserting the same claims. The District Court granted defendants' motion to dismiss Lipin II and Lipin III on the ground of claim preclusion, holding that the disposition of Lipin I barred further litigation of the underlying claims. Lipin v. American National Red Cross, Nos. 93 Civ. 1334, 92 Civ. 4455 (LBS), 1996 WL 18901 (S.D.N.Y. Jan. 17, 1996), aff'd, 104 F.3d 355 (2d Cir. 1996), opinion vacated and superseded on reh'g, 113 F.3d 1229 (2d Cir. 1997). Applying New York's claim preclusion law, the District Court examined each of Plaintiff's claims and found that they were all transactionally related to the claims in the state action and were therefore precluded. It found that Plaintiff's claims alleging sexual discrimination, sexual harassment, and wrongful termination had already been dismissed by the state court with prejudice. The claims of defamation and blacklisting were held identical to those dismissed in Lipin I. Her claim for intentional infliction of emotional distress was held precluded as an alternative theory of relief arising from the allegations pled in Lipin II Finally, Plaintiff's breach of contract and quantum meruit/unjust enrichment claims were found to be based on nearly identical allegations in Lipin I, and were also held precluded by the earlier dismissal of that action. Lipin, 1996 WL 18901, at *7-8. The Second Circuit affirmed the dismissal of Lipin II and III, finding Plaintiff's arguments without merit. Lipin, 113 F.3d at 1229.

Lipin IV, the matter now before the Court, is another attempt to assert the claims raised and dismissed in Lipin I, Lipin II and Lipin III. In addition to reiterating the allegations of sexual harassment and discrimination in connection with her employment by the National Red Cross, Plaintiff asserts a number of purported conspiracy and civil rights claims that are all premised on the notion that the evidence on which the state court based its misconduct findings in Lipin I was fraudulent. Plaintiff alleges that Defendants conspired to defame her, to obstruct justice, and to deprive her of her constitutional rights by, among other things, referring to the Lipin I misconduct findings in later litigation papers and in a report in connection with a disciplinary proceeding later commenced with respect to Wisehart, her attorney.*fn3 Plaintiff also contends that Defendants conspired to retaliate against her because of her commencement of Lipin I.

In Plaintiff's First Claim for Relief, she alleges that she is the victim of a conspiracy, arising out of her claims of sexual harassment and claims of litigation misconduct, to defame her. Plaintiff alleges that defendants Parlo and Wall, who are attorneys with Morgan, Lewis & Bockius LLP, the firm that represented the American National Red Cross in Lipin I, defamed Plaintiff by including in memoranda filed in an unrelated federal court case and arbitration proceeding statements that describe the findings of misconduct by Plaintiff and her attorney in Lipin I Plaintiff alleges that defendants Parlo and Wall conspired with defendants National Red Cross and its attorneys Jacoby and Baer to publish the allegedly defamatory statements as a continuation of a conspiracy of litigation misconduct arising out of Lipin I (Am. Compl. ¶¶ 40(i), 49, 50, 54, 55.)

Plaintiff's Second Claim for Relief alleges a conspiracy to obstruct justice and deprive Plaintiff of her constitutional rights, and also arises out of the publication of statements reporting the misconduct of Plaintiff and her attorney, Wisehart. The allegedly offending statements were made in a report, dated March 14, 2000, that was apparently prepared by defendant Greig in his capacity as Chair of the state court disciplinary committee "that has been investigating the disciplinary matter of plaintiff's attorney and who [sic] has threatened certain imminent action in connection therewith." (Am. Compl. ¶ 36(h)). As in her First Claim for Relief, Plaintiff seeks to relitigate her underlying claims of sexual harassment and a continuing conspiracy of litigation misconduct arising out of Lipin I. (Am. Compl. ¶¶ 36, 62, 6475, 77, 80-85, 139, 140, 143-146).

Plaintiff's Third Claim for Relief alleges that Defendants conspired to retaliate against her because of her filing of Lipin I by defending that action and by seeking dismissal of Lipin I on account of the misconduct committed by Plaintiff and her attorney in that action. (Am. Compl. ¶¶ 148-149). Plaintiff's Third Claim for Relief repeats the retaliatory misconduct claims that were dismissed by the state and federal courts in Lipin I, Lipin II and Lipin III.

DISCUSSION

Defendants move to dismiss Plaintiff's amended complaint pursuant to Federal Rule of Civil Procedure 12(b)(6), arguing that Plaintiff's claims are barred by collateral estoppel and/or res judicata, by virtue of the prior decisions. Defendants further contend that the complaint should be dismissed for failure to state a claim for defamation and conspiracy. Defendant Greig asserts that the Court lacks subject matter jurisdiction of Plaintiff's claims, citing the Rooker-Feldman doctrine, and that dismissal pursuant to Rule 12(b)(1) is appropriate. Defendant Greig also claims the protection of absolute judicial immunity in connection with Plaintiff's claims arising from his disciplinary committee activities.

Rule 12(b)(1)

When defendants move for dismissal on a number of grounds, the court should "`consider the Rule 12(b)(1) challenge first since if it must dismiss the complaint for lack of subject matter jurisdiction, the accompanying defenses and objections become moot and do not need to be determined.'" Rhulen Agency, Inc. v. Alabama Ins. Guar. Ass'n, 896 F.2d 674, 678 (2d Cir. 1990) (quoting 5 C. Wright and A. Miller, Federal Practice and Procedure § 1350, at 548 (1969)).

A case is properly dismissed for lack of subject matter jurisdiction under Rule 12(b)(1) of the Federal Rules of Civil Procedure when the district court lacks the statutory or constitutional power to adjudicate it. See Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000). A plaintiff asserting subject matter jurisdiction generally has the burden, once challenged, of proving by a preponderance of the evidence that jurisdiction exists. See id. Unlike a motion to dismiss under Rule 12 (b)(6), a motion to dismiss for lack of subject matter jurisdiction is not directed to the claim's merits. See Exchange Nat'l Bank of Chicago v. Touche Ross & Co., 544 F.2d 1126, 1130-1 (2d Cir. 1976).

Rooker-Feldman

The Rooker-Feldman doctrine is based on the "strictly original" subject matter jurisdiction of the federal district courts, which precludes them from sitting as appellate tribunals to review state court judgments, as well as from considering issues which are "inextricably intertwined" with such judgments or claims seeking relief that, if granted, would modify state court decisions. District of Columbia Court of Appeals v. Feldman, 460 U.S. 462, 482-84 and n. 16 (1983). The Rooker-Feldman doctrine is a judicially-created doctrine of abstention based on principles of comity. The doctrine precludes federal district court jurisdiction where the suit is in fact a collateral attack on a final state court judgment. District courts thus "do not have jurisdiction . . . over challenges to state-court decisions in particular cases arising out of judicial proceedings even if those challenges allege that the state court's action was unconstitutional." Feldman, 460 U.S. at 486. The only permissible avenues for such review are the relevant state superior courts and/or the United States Supreme Court. Id. at 482-84. Moreover, 28 U.S.C. § 1738 requires the federal courts to give preclusive effect to state judgments. 28 U.S.C.A § 1738 (West 2002).

The Rooker-Feldman doctrine applies where the state court judgment arises from a proceeding that was "judicial in character," and the federal action would require the district court to decide questions that were already decided by the state court or that are "closely intertwined" with an already-decided question. Feldman, 460 U.S. at 482-84, n. 16. Here, it is undisputed that Plaintiff's original state court lawsuit — Lipin I — was a judicial proceeding. The state court decisions in that action have already resolved the principal issue that Plaintiff seeks to relitigate here — finding that she "surreptious[ly] remov[ed] . . . confidential documents constituting privileged material and defense counsel's attorney's work product." Lipin v. Bender, 193 A.D.2d at 425.

Wisehart's disciplinary proceeding, also, is "judicial" in character, because his suspension from the practice of law is a final judgment of a state court in a judicial proceeding. Polur v. Murphy, No. 94 Civ. 2467 (JSM), 1995 WL 232730, at *4 (S.D.N.Y. April 19, 1995). The Appellate Division's "conduct of disciplinary proceedings with respect to those admitted to practice before it amounts to a judicial inquiry," Erdmann v. Stevens, 458 F.2d 1205, 1208 (2d Cir.), cert. denied, 409 U.S. 889 (1972); see Polur, 1995 WL 232730, at *4, and it is a well established principle that the Rooker-Feldman doctrine applies to reviews of New York State's disciplinary proceedings against attorneys, see Zimmerman v. Grievance Committee, 726 F.2d 85, 86 (2d Cir.), cert. denied, 457 U.S. 1227 (1984); Sassower v. Mangano, 927 F. Supp. 113, 119 (S.D.N.Y. 1996). Plaintiff's claims challenging the suspension order, specifically as alleged in Plaintiff's Second Claim for Relief, are therefore dismissed for lack of subject matter jurisdiction.

Indeed, Plaintiff's First, Second and Third Claims for Relief clearly implicate the results of the prior judicial proceedings. The causes of action relating to the privileged document incident (including those asserting that citation or repetition of the state court findings constitutes tortious or unconstitutional conduct furthering vast conspiracies targeted toward Plaintiff) depends entirely on the view that the evidence found credible by the state courts was in fact false. To accept Plaintiff's premise would necessarily be to revisit state court determinations and, indeed, to declare them wrongly decided. This the Rooker-Feldman doctrine prohibits. The causes of action seeking relief in connection with Plaintiff's former employment relationship with the National Red Cross could be entertained only if this Court rejected the state court with prejudice dismissal of Plaintiff's sexual harassment and related claims. That course is likewise foreclosed to this Court.

Plaintiff's Claims for Relief present issues that are "inextricably intertwined" with the state court's conclusions that, because Plaintiff engaged in improper conduct, her employment discrimination action should be dismissed. Plaintiff's claims thus present a direct challenge to state judicial proceedings. Pursuant to Rule 12(b)(1), Plaintiff's First, Second and Third Claims for Relief are dismissed to the extent those claims are inconsistent with the state court's findings in connection with the privileged document incident or with the with-prejudice dismissal of Plaintiff's Lipin I claims. Because a federal court is required to dismiss claims of which it lacks subject matter jurisdiction regardless of whether the parties against whom such claims are asserted argue lack of subject matter jurisdiction,*fn4 the First, Second and Third Claims for Relief are dismissed as against all Defendants to that extent.

11th Amendment

Plaintiff's claims for damages against defendant Greig in his official capacity are also barred by the Eleventh Amendment to the United States Constitution, which precludes suits in federal court against a state or its agency where, as here, there is no waiver or consent to federal court jurisdiction. See Pennhurst State Sch. & Hosp. v. Halderman, 465 U.S. 89 (1984); Trotman v. Palisades Interstate Park Comm'n, 557 F.2d 35, 38-40 (2d Cir. 1977). Eleventh Amendment immunity applies to bar damage actions against state officials sued in their official capacities if the state is the real party in interest. Farid v. Smith, 850 F.2d 917, 921 (2d Cir. 1988). The Departmental Disciplinary Committee ("DDC") chaired by defendant Greig is a part of the Appellate Division, First Department (see N.Y. Judiciary Law § 90(2) and 22 NYCRR Part 605), which is immune from suit for damages in federal court. See Richards v. State of New York, 597 F. Supp. 692, 693 (E.D.N.Y. 1984), aff'd, 76 F.2d 908 (2d Cir. 1985), cert. denied, 47 ...


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