Opinion
6:22-cv-00732-MK
05-31-2024
STEVEN SMITH, Plaintiff, v. UNITED STATES OF AMERICA; and U.S. DEPARTMENT OF TRANSPORTATION, Defendants.
FINDINGS AND RECOMMENDATION
MUSTAFA T. KASUBHAI UNITED STATES MAGISTRATE JUDGE
Plaintiff Steven Smith brings this action alleging claims under the Federal Tort Claims Act (FTCA) and the Freedom of Information Act (FOIA) against Defendants, United States of America and the U.S. Department of Transportation. First Am. Compl. ¶ 1, ECF No. 57. Plaintiff alleges that the Federal Aviation Administration (FAA) negligently investigated Plaintiff's complaints that airplanes from a local flight school operating out of the Roseburg airport were flying too close to his home and failed to enforce applicable federal regulations. Id. at ¶ 6. Before the Court is Defendant United States' Partial Motion to Dismiss Plaintiff's First Amended Complaint (ECF No. 71). For the reasons below, Defendant's motion should be granted.
BACKGROUND
For the purposes of this motion to dismiss, the following facts alleged by Plaintiff are assumed to be true.
I. Factual Background
Plaintiff is a resident of Roseburg, Oregon. First Am. Compl. ¶ 2, 4, ECF No 57. Plaintiff reported to the FAA “numerous times” between 2013 and 2021 that a flight school in Roseburg was conducting training flights averaging between 75 to 150 feet above Plaintiff's home. Id. at ¶ 6. Plaintiff complained that the overflights violated 19 C.F.R. § 91.119 governing “minimum safe altitudes.” Id.; First Am. Compl. Ex. 1, 11, ECF No. 57-1. A 2014 investigation by FAA inspector Harris concluded that “[t]he purpose of this flight was to practice pattern work and therefore was for the purpose of takeoff and or landing.” Pl.'s First Am. Compl. Ex. 1, 22. In 2016, the FAA responded to Plaintiff's subsequent complaints, finding that they were “identical to the previous complaint received . . . that were investigated with no findings of violations.” First Am. Compl. Ex. 1, 15-16. The FAA investigator noted that the regulation “allows lower, but safe altitudes ‘when necessary for takeoff and landing'” which includes flights “in an established traffic pattern” and that Plaintiff's home was “located below the downwind leg for runway 34 at the Roseburg Airport.” First Am. Compl. Ex. 1, 15-16. The FAA's response concluded that the flights complained about by Plaintiff did not violate any FAA safety regulations. First Am. Compl. Ex. 1, 15-16.
The Court takes judicial notice that “[a]n airport traffic pattern includes the direction and altitude of the pattern and procedures for entering and leaving” airports by aircraft. Airplane Flying Handbook, FAA-H-8083-3C, at 1, https://www.faa.gov/sites/faa.gov/files/regulations_policies/handbooks_manuals/aviation/airplane_handbook/09_afh_ch8.pdf.
In 2021, Plaintiff engaged in settlement proceedings with Defendant before a U.S. District Court Judge. First Am. Compl. ¶ 15. Plaintiff alleges that FAA “investigative and law enforcement officer inspector Harris, or other such investigative and law enforcement officers” abused the settlement process by making false statement through their attorney that the aircraft operations at issue were not illegal because they were subject to the takeoff and landing exception. First Am. Compl. ¶ 15. Plaintiff alleges that these false and misleading statements were made “with the improper and fraudulent purpose of misleading . . . Plaintiff [and the settlement Judge] in an attempt to gain favorable settlement terms from Plaintiff.” First Am. Compl. ¶ 15.
Plaintiff filed a FOIA request with the FAA which revealed that Defendant had paid to obtain search results from Whitepages.com, which purportedly revealed Plaintiff's age, known addresses, previous locations, and the names of people Plaintiff may know. First Am. Compl. ¶ 14; First Am. Compl. Ex. 1, 27-29. Plaintiff alleges that Defendant's personal background investigation unlawfully violated Plaintiff's privacy rights. First Am. Compl. ¶ 14.
II. Procedural History
Plaintiff filed this lawsuit on May 19, 2022, alleging the FAA's responses to his complaints were negligent and that it failed to conduct a reasonable investigation and take enforcement action. First Am. Compl. ¶ 6. At issue in the present motion, Plaintiff brings claims under the FTCA, alleging that Defendant's use of Whitepages.com constituted an intrusion upon seclusion (count 1 claim 8) and that Defendant's allegedly false statements during the judicial settlement proceedings were an abuse of process (count 1 claim 9).
On August 31, 2022, Defendant filed a motion to dismiss under both Fed.R.Civ.P. 12(b)(6) for failure to state a claim and Fed.R.Civ.P. 12(b)(1) for a lack of subject matter jurisdiction. Mot. Dismiss 2, ECF No. 13. This Court issued a Findings & Recommendation on August 2, 2023, denying in part and granting in part with leave to amend. ECF No. 52 (adopted October 30, 2023, ECF No. 66). Regarding claim 8, the Court found that Plaintiff failed to state a claim because “the use of a publicly available internet search tool such as whitepages.com cannot amount to an intrusion on seclusion . . . “ Id. at 11 (footnote omitted). The Court recommended dismissal with leave to amend “[g]iven the vagueness of Plaintiff's allegations under claim 8 and his intimation that it may be based on more than the whitepages.com printout. . . .” Id. at 12. The Court noted, however, “that any allegations that Defendant invaded Plaintiff's privacy must do more than state the elements of the claim; they must put Defendant on notice of the factual basis of the claim.” Id.
The Court dismissed with leave to amend claim 9, because Plaintiff's Complaint “allege[d] no facts that would establish that his abuse of process claim arises from acts or omissions of investigative or law enforcement officers as would be necessary to establish subject matter jurisdiction.” Id. at 13. Plaintiff had not alleged facts leading to a plausible inference that an investigative or law enforcement officer, necessary to trigger the FTCA's abuse of process exception (discussed below), caused the FAA attorney to make the allegedly false or misleading statements at the settlement proceedings. Id. at 14. The Court recommended dismissal with leave to amend so that Plaintiff could attempt to address the issue. Id.
On September 5, 2023, Plaintiff filed his First Amended Complaint. ECF No. 57. Plaintiff amended claim 8 by alleging that Defendant's use of Whitepages.com required payment of a fee and that the information obtained was therefore private, not public. First Am. Compl. ¶ 14. Plaintiff amended claim 9 by alleging that FAA inspector Harris is an investigative and law enforcement officer and that he or some other investigative and law enforcement officer provided the false and misleading information that the FAA attorney unwittingly relied on during the settlement proceedings, thereby abusing the process. First Am. Compl. ¶ 15.
On November 28, 2023, Defendant filed a second partial motion to dismiss, arguing failure to state an invasion of privacy (claim 8) or abuse of process (claim 9) claim under Fed.R.Civ.P. 12(b)(6) and lack of subject matter jurisdiction for claim 9 under Fed.R.Civ.P. 12(b)(1). Mot. Dismiss First Am. Compl. 1, ECF No. 71.
STANDARD OF REVIEW
I. Motion to Dismiss for Lack of Subject Matter Jurisdiction - Fed.R.Civ.P. 12(b)(1)
Federal courts are courts of limited jurisdiction. Gunn v. Minton, 568 U.S. 251, 256 (2013) (quotation marks omitted). As such, a court is to presume “that a cause lies outside this limited jurisdiction, and the burden of establishing the contrary rests upon the party asserting jurisdiction.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994) (citations omitted); see also Advanced Integrative Medical Science Institute, PLLC v. Garland, 24 F.4th 1249, 1256 (9th Cir. 2022). A motion to dismiss under Federal Rule of Civil Procedure 12(b)(1) for lack of “subject-matter jurisdiction, because it involves a court's power to hear a case, can never be forfeited or waived.” United States v. Cotton, 535 U.S. 625, 630 (2002). An objection that a particular court lacks subject matter jurisdiction may be raised by any party, or by the court on its own initiative, at any time. Arbaugh v. Y&H Corp., 546 U.S. 500, 506 (2006); Fed.R.Civ.P. 12(b)(1). The Court must dismiss any case over which it lacks subject matter jurisdiction. Fed.R.Civ.P. 12(h)(3); see also Pistor v. Garcia, 791 F.3d 1104, 1111 (9th Cir. 2015) (noting that when a court lacks subject-matter jurisdiction, meaning it lacks the statutory or constitutional power to adjudicate a case, the court must dismiss the complaint, even sua sponte if necessary).
A Rule 12(b)(1) motion to dismiss for lack of subject matter jurisdiction may be either “facial” or “factual.” See Edison v. U.S., 822 F.3d 510, 517 (9th Cir. 2016). A facial attack on subject matter jurisdiction is based on the assertion that the allegations contained in the complaint are insufficient to invoke federal jurisdiction. Id. On a facial attack, the Court must assume the truth of factual allegations. Fed. Bureau of Investigation v. Fikre, 144 S.Ct. 771, 775 n. 1 (2024) (citing see Gibbs v. Buck, 307 U.S. 66, 72 (1939); 5C C. Wright & A. Miller, Federal Practice and Procedure § 1363, p. 107 (3d ed. 2004)).
In contrast, in a factual attack on the plaintiff's assertion of jurisdiction, the moving party “contests the truth of the plaintiff's factual allegations, usually by introducing evidence outside the pleadings.” NewGen, LLC v. Safe Cig, LLC, 840 F.3d 606, 614 (9th Cir. 2016); see also Terenkian v. Republic of Iraq, 694 F.3d 1122, 1131 (9th Cir. 2012). Thus, “[o]nce the moving party has converted the motion to dismiss into a factual motion by presenting affidavits or other evidence properly brought before the court, the party opposing the motion must furnish affidavits or other evidence necessary to satisfy its burden of establishing subject matter jurisdiction.” Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004) (citing Savage v. Glendale Union High Sch., 343 F.3d 1036, 1039 n.2 (9th Cir. 2003)).
II. “Motion to Dismiss for Failure to State a Claim - Fed.R.Civ.P. 12(b)(6)
A motion to dismiss for failure to state a claim may be granted only when there is no cognizable legal theory to support the claim or when the complaint lacks sufficient factual allegations to state a facially plausible claim for relief. Los Angeles Lakers, Inc. v. Federal Insurance Company, 869 F.3d 795, 800 (9th Cir. 2017). In evaluating the sufficiency of a complaint's factual allegations, the court must accept as true all well-pleaded material facts alleged in the complaint and construe them in the light most favorable to the non-moving party. Id. To be entitled to a presumption of truth, allegations in a complaint “may not simply recite the elements of a cause of action, but must contain sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively.” Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011). All reasonable inferences from the factual allegations must be drawn in favor of the plaintiff. Los Angeles Lakers, 869 F.3d at 800. The court need not, however, credit the plaintiff's legal conclusions that are couched as factual allegations. Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009). A complaint must contain sufficient factual allegations to “plausibly suggest an entitlement to relief, such that it is not unfair to require the opposing party to be subjected to the expense of discovery and continued litigation.” Starr, 652 F.3d at 1216. “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678 (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007)). “The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id.
III. Leave to Amend
Rule 15(a)(2) of the Federal Rules of Civil Procedure provides that the “court should freely give leave [to amend a pleading] when justice so requires.” A district court should apply Rule 15's “policy of favoring amendments . . . with extreme liberality.” Price v. Kramer, 200 F.3d 1237, 1250 (9th Cir. 2000) (quotation marks omitted). “[T]he purpose of the rule is ‘to facilitate decision on the merits, rather than on the pleadings or technicalities.'” Novak v. United States, 795 F.3d 1012, 1020 (9th Cir. 2015) (quoting Chudacoff v. Univ. Med. Ctr., 649 F.3d 1143, 1152 (9th Cir. 2011)). A district court may, within its discretion, deny a motion to amend “due to undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, [and] futility of the amendment.” Zucco Partners, LLC v. Digimarc Corp., 552 F.3d 981, 1007 (9th Cir. 2009) (alteration in original) (quoting Leadsinger, Inc. v. BMG Music Publ'g, 512 F.3d 522, 532 (9th Cir. 2008)).
DISCUSSION
Defendant moves to dismiss claim 9 of Plaintiff's First Amended Complaint for a lack of subject matter jurisdiction. Mot. Dismiss First Am. Compl. 14-17. In addition, Defendant asks the Court to dismiss claims 8 and 9 for a failure to state a claim. Mot. Dismiss First Am. Compl. 6-14, 18-20.
I. Motion to Dismiss for Lack of Subject Matter Jurisdiction
Defendant moves to dismiss Plaintiff's claim 9 (abuse of process under the FTCA) pursuant to Fed.R.Civ.P. 12(b)(1), arguing that this Court lacks subject matter jurisdiction.
The FTCA waives the United States Government's (and its employees acting in their official capacities) sovereign immunity from tort suits, except for certain intentional torts, including abuse of process. 28 U.S.C. § 2680(h). While abuse of process claims are typically excluded, the FTCA provides an exception to the rule: a plaintiff can bring an abuse of process claim against the United States if the claim arises out of “acts and omissions of investigative or law enforcement officers.” Id. Under the FTCA, an “‘investigative or law enforcement officer' means any officer of the United States who is empowered by law to execute searches, to seize evidence, or to make arrests for violations of Federal law.” Id.
Plaintiff alleges based on “information and belief” that the false statements made at the settlement proceedings by the FAA attorney were provided by FAA inspector Harris or another investigative or law enforcement officer. Defendant argues (1) that the alleged facts based on information and belief are not peculiarly in possession and control of Defendant; (2) that Plaintiff's allegation is an unsupported bare legal conclusion; and, crucially, (3) that FAA inspector Harris is not empowered to search, seize, or arrest, and so not a “law enforcement officer” under the terms of the FTCA.
In the Ninth Circuit, “[t]he Twombly plausibility standard . . . does not prevent a plaintiff from pleading facts alleged upon information and belief where the facts are peculiarly within the possession and control of the defendant or where the belief is based on factual information that makes the inference of culpability plausible.” Soo Park v. Thompson, 851 F.3d 910, 928 (9th Cir. 2017) (quoting Arista Records, LLC v. Doe 3, 604 F.3d 110, 120 (2d Cir. 2010)). In other words, the pleading requirements may be relaxed “where the relevant facts are known only to the defendant.” Concha v. London, 62 F.3d 1493, 1503 (9th Cir. 1995). The Ninth Circuit also instructs lower courts to show special solicitude to pro se plaintiffs' pleadings. However, conclusory allegations based on information and belief are insufficient, they must be supported by factual assertions allowing a plausible inference. Blantz v. California Dep't of Corr. & Rehab., Div. of Corr. Health Care Servs., 727 F.3d 917, 927 (9th Cir. 2013).
Plaintiff does enough in his Amended Complaint to allege a plausible inference that the supposedly false or misleading information derived from FAA investigator Harris, but does not sufficiently allege that Harris had the authority to “execute searches, to seize evidence, or to make arrests for violations of Federal law” to give the Court subject matter jurisdiction over this claim. As noted above, the United States has waived its sovereign immunity for intentional torts under the FTCA only for acts committed by “officer[s] of the United States [] empowered by law to execute searches, to seize evidence, or to make arrests for violations of Federal law.” 28 U.S.C. § 2680(h). Plaintiff alleges that inspector Harris worked as an “investigative and law enforcement officer,” but does not allege that federal law authorized Harris to search, seize, or arrest. Compl. ¶15. He argues the information regarding FAA agent authority is “peculiarly within the possession and control of Defendant” to paper over this omission, but FAA investigator authority flows from federal law and regulation, all of which is publicly available. See 49 U.S.C. § 1301 et seq. (the Federal Aviation Act). Plaintiff relies upon “Defendant's website statement,” which he attaches to his response to substantiate inspector Harris's legal authority and several exhibits to his complaint which reflect Inspector Harris's notes during his investigation. First Am. Compl., Ex. 7-10, Resp., Ex. 1. Neither shows Inspector Harris ever searched, seized, or arrested Plaintiff or had the authority to do so. See id. In fact, they show the opposite--that Inspector Harris investigated Plaintiff but did not have the search, seize, or arrest authority required to sustain an FTCA claim under 2680(h). Absent factual allegations to substantiate Inspector Harris's power to search, seize, or arrest under 28 U.S.C. § 2680(h) the Court should grant Defendant's Rule 12(b)(1) motion, and find it lacks subject-matter jurisdiction over Plaintiff's claim 9.
II. Motion to Dismiss for Failure to State a Claim
a. Waiver
As an initial matter, Plaintiff argues that Defendant waived certain defenses and objections because they were not raised in its initial motion to dismiss for failure to state a claim. Pl.'s Resp. 2-6, ECF No. 78. Specifically, Plaintiff challenges Defendant's arguments on his invasion of privacy claim that “[t]he FAC does not allege an intentional intrusion,” “Defendant did not intrude on Plaintiffs private affairs,” “Defendant's conduct was not highly offensive to a reasonable person,” their arguments on the abuse of process claim that “[abuse of process information is not] in the sole possession of Defendant,” and that Plaintiff fails to state an abuse of process claim. Id. (citing Def. (2nd) Mot. to Dismiss, ECF # 71 at 7-11, 14-15).
Plaintiff also argues that Defendant's motion to dismiss for lack of subject matter jurisdiction is “waived as to this successive motion to dismiss.” Pl.'s Resp. 15, n. 7. However, motions to dismiss for lack of subject matter jurisdiction can never be waived and may be brought at any time. See Fed. R. Civ. Pro. 12(h)(3) (“If the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action.”).
Defendant did not waive these arguments because they were fairly raised in the first motion or respond to fresh allegations in the Amended Complaint. Rule 12(g)(2) specifies that “[e]xcept as provided in Rule 12(h)(2) or (3), a party that makes a motion under [Rule 12] must not make another motion under this rule raising a defense or objection that was available to the party but omitted from its earlier motion.” Fed.R.Civ.P. 12(g)(2). Concerning Plaintiff's invasion of privacy claim, Defendant specifically argued in their first motion that “the Complaint [does not] specify how the FAA intentionally intruded upon the Plaintiff's seclusion,” and pointed to the lack of detail in the Complaint to allege the requisite elements of invasion of privacy under Oregon law. Mot. to Dismiss at 12. Plaintiff expanded on his invasion of privacy claim in the Amended Complaint. See First Am. Compl. ¶ 14. In turn, Defendant re-raised these arguments on the successive motion to dismiss, providing more detail to combat Plaintiff's amended allegations. See Second Mot. to Dismiss at 6-11. These arguments were not “omitted from [the] earlier motion, so their inclusion in the successive motion to dismiss does not offend Rule 12(g)(2).
Even if they were omitted from the earlier motion, the Ninth Circuit has noted that any error in considering new arguments on a successive motion to dismiss is harmless, given that Rule 12(h)(2) allows parties to raise these same arguments only slightly down the road under Rule 12(c). In re Apple iPhone Antitrust Litig., 846 F.3d 313, 318 (9th Cir. 2017) (“We read Rule 12(g)(2) in light of the general policy of the Federal Rules of Civil Procedure, expressed in Rule 1. that the Federal Rules “be construed, administered, and employed by the court and the parties to secure the just, speedy, and inexpensive determination of every action and proceeding.” Fed.R.Civ.P. 1.”).
The Defendant's motion to dismiss Plaintiff's abuse of process claim for failure to state a claim and arguments that information was not in their possession do not violate Rule 12(g)(2) either. As Rule 12(g)(2) makes clear, an argument is waived when raised in a successive Rule 12 motion only if it was “available to the party” in the first instance. Here, Plaintiff added the allegation to his Amended Complaint that allegedly false information underlying the abuse of process claim was in the possession of an FAA investigator, “law enforcement officer inspector Harris.” Compare First Am. Compl. ¶ 15 (describing inspector Harris's possession of information and role in the abuse of process) with Compl. ¶ 15 (no description of such information). Because Defendant's argument regarding possession of the information responds to a new allegation, it was not “available” to them on the first Rule 12 motion, so not barred by Rule 12(g)(2) on their successive motion to dismiss. And, in situations like this one where a party successfully argues a Court lacks jurisdiction over a claim in an initial rule 12(b)(1) motion, the Ninth Circuit has upheld district courts' consideration of newly-raised 12(b)(6) arguments on successive motions to dismiss. In re Apple iPhone Antitrust Litig., 846 F.3d 313, 320 (9th Cir. 2017), (noting there is “an argument” that the later-filed 12(b)(6) motion is not late, and that even assuming it was, “any error.. .in considering the motion on the merits was harmless.”). Following Rule 12(g)(2) and the Ninth Circuit's interpretation of that rule in in re Apple iPhone Antritust, the Court should consider the merits of Defendant's 12(b)(6) arguments about Plaintiff's abuse of process claim.
b. Claim 8
Defendant moves to dismiss Plaintiff's claim 8 (invasion of privacy) pursuant to Rule 12(b)(6), arguing that Plaintiff has failed to state a claim upon which relief can be granted. Mot. Dismiss First Am. Compl. 6-14. In Oregon, the state law tort of invasion of privacy can be pled under a theory of intrusion upon seclusion, appropriation of another's name or likeness, false light, or publication of private facts. Mauri v. Smith, 324 Or. 476, 482 (1996). Here, Plaintiff pleads invasion of privacy only under the intrusion upon seclusion theory. First Am. Compl. ¶ 14; see Pl.'s Resp. 13 (“Plaintiff originally intended to preserve a public disclosure of private facts theory pending discovery. Plaintiff has reviewed Defendant's supplied authority and does not pursue a public disclosure of private facts theory.”).
To establish a claim for intrusion upon seclusion, the plaintiff must prove “(1) an intentional intrusion, physical or otherwise, (2) upon the plaintiff's solitude or seclusion or private affairs or concerns, (3) which would be highly offensive to a reasonable person.” Mauri, 324 Or. at 483. There is no intrusion upon a plaintiff's seclusion when the matter which is “intruded” upon is public. Id. at 482-83 (adopting Restatement (Second) of Torts definition of invasion of privacy § 652B (1977) (“no liability [for intrusion upon seclusion] for the examination of a public record concerning the plaintiff”)).
Plaintiff alleges that Defendant conducted “a personal background investigation to obtain personal information about Plaintiff, including but not limited to discovering who his friends and acquaintances are” from “whitepages.com” results. First Am. Compl ¶¶ 14, n.6; First Am. Compl. Ex. 1 27-29 (“whitepages.com” results obtained by Plaintiff through FOIA listing Plaintiff's name, age, address, previous locations, and “people [Plaintiff] may know”). Plaintiff argues that information obtained from whitepages.com is private information because the service “required payment of a fee [and], thus is functionally no different from hiring a private investigator for a fee to obtain such non-public information.” First Am. Compl. ¶ 14 n. 6.
In its previous Findings and Recommendation on Defendant's first motion to dismiss, the Court took judicial notice of the fact that “whitepages.com” is a publicly available internet search tool. See ECF No. 52 (adopted October 30, 2023, ECF No. 66) (finding a court “may take judicial notice of publicly available newspaper and magazine articles and web pages that indicate what was in the public realm but not the truth of the matters asserted on the website” (internal quotations omitted)). The Court is unaware of any controlling precedent in support of Plaintiff's assertion that paying a fee to access publicly available information transforms the nature of the information from public to private. Nor does this type of information fit the mold of “seclusion” typically recognized by Oregon law. See, e.g., Reed v. Toyota Motor Credit Corp., 301 Or.App. 825, 829 (2020) (finding “install[ation of] a GPS device into the [Plaintiff's truck] without plaintiff's permission or knowledge” a material fact for the jury to decide at trial whether it was “intrusion into a private place”). The Court finds that the use of a publicly available internet search tool such as whitepages.com--behind a paywall or not--does not amount to intrusion upon seclusion. Taking all the facts alleged in Plaintiff's First Amended Complaint as true, Plaintiff fails to state a claim for invasion of privacy, and Defendant's Motion to Dismiss claim 8 should be granted.
Although this Court recommends dismissing claim 9 for lack of subject matter jurisdiction, it addresses Defendant's substantive 12(b)(6) arguments here as well.
Defendant also moves to dismiss Plaintiff's abuse of process claim because he does not allege an ulterior purpose or an arrest or seizure of property as required by Oregon law. Mot. Dismiss First Am. Compl. 18-20. In Oregon, an abuse of process claim has two main elements: “[f]first, an ulterior purpose, and second, a wil[l]ful act in the use of the process not proper in the regular conduct of the proceeding.” Larsen v. Credit Bureau, Inc. of Georgia, 279 Or. 405, 408 (1977) (citing Prosser, Law of Torts 857, s 121 (1971)). Additionally, a plaintiff must have “suffered an actual arrest or a seizure of property” that resulted from the abuse of process. Reynolds v. Givens, 72 Or.App. 248, 255 (1985).
Plaintiff argues this is not an element he is required to allege because it has only been described as such by intermediate Oregon appellate courts, rather than the Oregon Supreme Court. Pl. Resp. at 20 (citing Erie). But the Ninth Circuit has instructed lower courts to must predict how the state's Supreme Court would rule, considering the rulings of state intermediate appellate courts as data in making that analysis. See Richardson v. United States, 841 F.2d 993, 996 (9th Cir.), amended, 860 F.2d 357 (9th Cir. 1988). Because Oregon Courts of appeals have consistently required this element, this Court likewise considers it part of the abuse of process tort under Oregon law. Lee v. Mitchell, 152 Or.App. 159, 179 (1998).
The Court should dismiss Plaintiff's claim 9 for failure to plead an ulterior purpose to the alleged abuse of process. An abuse of process claim under Oregon law requires a plaintiff to plead, and ultimately prove that the abuse was exerted for “a purpose for which the process is not intended,” Columbia County v. Sande, 175 Or.App. 400, 408 (2001), or to obtain a collateral advantage not associated with the process. Hartley v. State Water Resources Dept., 77 Or.App. 517, 522 (1986). Plaintiff's Amended Complaint alleges that Defendants abused the settlement process “to gain favorable settlement terms.” First Am. Compl. ¶ 15. Plaintiff's response characterizes this as “ulterior” because it is “not authorized by the process" and is also an act "aimed at an objective not legitimate in the use of the process." Pl. Resp. at 21 (citing Larsen 279 Or. at 408. But Plaintiff misreads Larsen. The terms Plaintiff cites are the Oregon Supreme Court's definition of the second element of abuse of process, rather than the first. See id. In defining an “ulterior” purpose, the Oregon Supreme Court described a “collateral advantage” not “involved in the proceeding itself, such as the surrender of property or the payment of money, by the use of the process as a threat or a club.” Id. There is nothing outside the settlement process Defendant allegedly sought by their purported abuse; Plaintiff alleges only that Defendant sought “favorable settlement terms.” Resp. at 21. Because Plaintiff failed to plead an ulterior purpose to Defendant's alleged abuse of process, the Court should grant Defendant's motion to dismiss this claim.
Claim 9 should likewise be dismissed for failure to plead an arrest or seizure of property. Since the Oregon Supreme Court's decision in Larsen, Oregon appellate courts have routinely required plaintiffs to allege and ultimately prove “an actual arrest or seizure of property” as an element of an abuse of process claim under Oregon law. Reynolds v. Givens, 72 Or.App. 248, 256 (1985); Lee v. Mitchell, 152 Or.App. 159, 179 (1998). Plaintiff does not allege any arrest or seizure of property in the Amended Complaint, and argues in response only that the “actual arrest or seizure of property” element is an inappropriate expansion of Larsen. Resp. at 20. Larsen was silent on the issue, however, and in the absence of another controlling decision, the court determines what the Oregon Supreme Court would have decided based on “state appellate court opinions, statutes and treatises.” Diaz v. Kubler Corp., 785 F.3d 1326, 1329 (9th Cir. 2015). Given that Oregon Courts of Appeals adopted this element post-Larsen, and Larsen itself involved the seizure of property, 279 Or. at 408, the court agrees with Defendant that an “actual arrest or seizure of property” is a necessary element of abuse of process. Viewed in the light most favorable to Plaintiff, Defendant improperly gained an advantage while negotiating the terms of a settlement agreement. However, because Plaintiff does not allege that Defendant seized his property, the Court should grant Defendant's Motion to Dismiss claim 9 on this basis as well.
III. Leave to Amend
Plaintiff seeks leave to amend his Complaint for a second time. Pl.'s Resp. 22-23. Defendant argues that Plaintiff should be denied leave to amend, “because any additional leave to amend would be futile.” Mot. Dismiss First Am. Compl. 21. When evaluating a pro se litigant's complaint, “[a] district court should not dismiss a pro se complaint without leave to amend unless ‘it is absolutely clear that the deficiencies of the complaint could not be cured by amendment.' ” Akhtar v. Mesa, 698 F.3d 1202, 1212 (9th Cir.2012); see also Wilhelm v. Rotman, 680 F.3d 1113, 1121 (9th Cir.2012). Given the Ninth Circuit's permissive standard and because Defendant made novel or more expansive arguments when moving to dismiss Plaintiff's Amended Complaint, the Court recommends offering Plaintiff an opportunity to cure the deficiencies by amendment.
RECOMMENDATION
For the reasons above, Defendant's Partial Motion to Dismiss Plaintiff's First Amended Complaint (ECF No. 71) should be GRANTED. Plaintiff's claims 8 and 9 of count one should be DISMISSED with leave to amend.
This recommendation is not an order that is immediately appealable to the Ninth Circuit Court of Appeals. Any notice of appeal pursuant to Fed. R. App. P. 4(a)(1) should not be filed until entry of the district court's judgment or appealable order. The Findings and Recommendation will be referred to a district judge. Objections to this Findings and Recommendation, if any, are due fourteen (14) days from today's date. See Fed.R.Civ.P. 72. Failure to file objections within the specified time may waive the right to appeal the district court's order. Martinez v. Ylst, 951 F.2d 1153, 1157 (9th Cir. 1991).