KEVIN McNULTY, District Judge.
Now before the Court are five motions to dismiss the Second Amended Complaint of Dr. Richard Arjun Kaul. Kaul brings fourteen causes of action against the 25 remaining defendants in this case. For the reasons set forth below, I grant the Omnibus Motion to Dismiss, and dismiss all federal claims with prejudice. The state law claims I dismiss on jurisdictional grounds, without prejudice. Two additional motions, one to further amend the Second Amended Complaint to add a defendant and the other for a default judgment against defendant Lewis Stein, Esq., are denied.
Dr. Richard A. Kaul, originally trained as an anesthesiologist, performed procedures known as minimally invasive spine surgeries. In March 2014, the New Jersey State Board of Medical Examiners (the "Board") revoked his medical license, finding that his performance of spine surgeries on 11 patients without proper training and experience constituted gross and repeated malpractice, negligence, and incompetence. From Dr. Kaul's perspective, a network of politically connected neurosurgeons were threatened by and jealous of his success. With the assistance of a cabal of politicians, the judiciary, lawyers, hospitals, insurance companies, and media figures, they engineered the revocation of his license. Dr. Kaul broadly asserts that he brings this action against all 25 remaining defendants, and a number of John and Jane Doe defendants, to redress economic and reputational injuries caused by their "scheme to permanently eliminate [him] from the practice of medicine anywhere in the world." (2AC, vi).
In this section, I review the decision revoking Dr. Kaul's medical license that is the subject of the complaint (see Section I.A., infra); identify the parties (Section I.B); summarize the factual allegations (Section I.C); and review pertinent procedural history (Section I.D).
The heart of this complaint is an attack on the disciplinary proceedings that culminated in the revocation of Dr. Kaul's license to practice medicine. Before delving into the allegations, I review those proceedings. This discussion is essentially adapted from my earlier opinion dismissing the First Amended Complaint. The decisions of the ALJ and the Board are cited (a) because the allegations here are unintelligible without this background and (b) for their existence and legal effect. (See n. 1, supra.)
On June 13, 2012, the AG initiated administrative disciplinary proceedings against Dr. Kaul.
ALJ Solomon issued his initial decision on December 31, 2013. Here are a few of his findings of fact:
(ALJ Op. 80-81).
These infractions, the ALJ found, went far beyond mere puffery or resume-fudging. To the contrary, over the course of 94 pages, ALJ Solomon detailed the physical and emotional harm Dr. Kaul inflicted on 11 patients.
Here is one example, patient T.Z.:
(ALJ Op. 53-57).
Assessing the evidence in the record,
On March 12, 2014, the Board adopted ALJ Solomon's opinion and order in its entirety. It then considered the appropriate penalty for Dr. Kaul's conduct. Observing that Dr. Kaul, rather than acknowledging wrongdoing or demonstrating contrition, had instead lobbed "broad allegations of altered court transcripts, interference with legal evidence and political influence," the Board struggled to "find any mitigating factors in this matter."
The Board also considered that this was not Dr. Kaul's first offense. About ten years earlier, the Board had suspended Dr. Kaul's medical license based on his failure to disclose in various credentialing applications that he had been convicted of manslaughter based on the death of one of his patients in England.
Against that backdrop—Dr. Kaul's lack of remorse, his intent to continue to perform spine surgeries, and his failure to "turn over a new leaf to practice medicine responsibly"—the Board adopted the ALJ's recommendation to revoke Dr. Kaul's license, effective February 12, 2014. It further imposed the statutory maximum fine of $20,000 for each of the 15 counts of malpractice and misconduct charged, as well as attorneys' fees and costs. All told, the Board imposed $475,422.32 in civil penalties, fees, and costs. (Board Order 28-29).
Dr. Kaul did not appeal the Board's final decision to the New Jersey Superior Court, Appellate Division. Instead, he filed this action alleging that there was a conspiracy against him involving the Governor, various state officials, the ALJ, the Board of Medical Examiners, various doctors, a lawyer, a bank, a professional association, hospitals, insurance carriers, and the media.
Dr. Kaul was formerly licensed to practice medicine in the State of New Jersey. (2AC ¶ 1). When this cause of action accrued, Dr. Kaul was a "resident of the State of New York." (Id.).
Defendant Allstate New Jersey Insurance Company ("
Defendant, TD Bank, N.A., is a Canadian bank with a United States headquarters located in Cherry Hill, New Jersey. (2AC ¶ 5). Divyesh Kothari, ("Kothari," and, collectively with TD Bank, N.A., the
Defendant Lindy Washburn ("Washburn") is an individual located in Woodland Park, New Jersey. (2AC ¶ 19). Defendant Fourth Edition Inc. f/k/a North Jersey Media Group Inc. ("Fourth Edition," and, collectively with Washburn, the "
Defendant Dr. Robert Heary ("
Defendant Dr. William Mitchell ("
Defendant Lewis Stein, Esq. ("
Defendant Dr. Gregory Przyblski ("
Defendant Dr. Marc Cohen ("
Defendant the American Society of Interventional Pain Physicians ("
Defendant Dr. Andrew Kaufman ("
Defendant Dr. Peter Staats ("
Defendant
Defendant Robert Garrett ("
Defendant Thomas Peterson ("
Defendant the Congress of Neurological Surgeons ("
Defendant Christopher Wolfla ("
Defendant Atlantic Health System ("
Defendant James Gonzalez ("
Defendant
Defendants Government Employees Insurance Company, GEICO Indemnity, GEICO General Insurance Company, and GEICO Casualty (collectively,
Defendants
I have attempted to organize the allegations of the Second Amended Complaint into five categories: (1) the "New Jersey Neurosurgical Community"; (2) the Professional Societies; (3) the Carriers; (4) the OAL and Medical Board proceedings; and (5) other events and correspondence.
Dr. Kaul identifies himself as a minimally invasive spine surgeon. (2AC ¶ 66). In August 1996, Dr. Kaul obtained his license to practice medicine and surgery in New Jersey. (Id. ¶ 67). In September 1996, he became board certified by the American Board of Anesthesiology. (Id.).
From 2002 to 2012, Dr. Kaul performed 800 minimally invasive spine surgeries and 6,000 spine procedures. (2AC ¶ 69). Beginning in 2002, he alleges, he developed an enviable reputation in the field of minimally invasive spine surgery and frequently taught his techniques to other physicians. (Id. ¶ 45).
In 2004, Dr. Kaul became board certified by the American Academy of Minimally Invasive Medicine and Surgery. (2AC ¶ 75). This organization, I note, is distinct from the American Academy of Minimally Invasive Spinal Medicine and Surgery.
In 2005, Dr. Kaul conducted the first outpatient lumbar spinal fusion ever performed at the Market Street Surgical Center in Saddle Brook, New Jersey. (2AC ¶¶ 37, 71). Dr. Kaul alleges that because this work was innovative it provoked hostility and envy within the New Jersey neurosurgical community. (See id. ¶ 37). That same year, he alleges, unidentified neurosurgeons influenced the credentialing committee at Meadowlands Hospital to deny Dr. Kaul clinical privileges. (2AC ¶ 38). Dr. Kaul came to learn through conversations with spine device representatives, patients, and physicians that his professional and commercial success had caused immense jealousy in the "medical community." (2AC ¶¶ 39, 41).
In 2005, Dr. Przybylski began performing minimally invasive spine surgeries. (2AC ¶ 74).
In 2008, Dr. Heary allegedly made defamatory comments to Frances Kuren, one of Dr. Kaul's patients. (2AC ¶ 41).
In 2010, Dr. Kaufman allegedly made defamatory comments to another of Dr. Kaul's patients, Corey Johnson. (2AC ¶ 41). In 2012, Dr. Kaufman also allegedly made defamatory comments to another of Dr. Kaul's patients, John Zerbini. (Id.). Mr. Zerbini later testified on behalf of the State in the 2012-2013 disciplinary proceedings against Dr. Kaul, discussed supra. (See id. ¶ 46).
On March 3, 2011, Dr. Kaul opened the NJSR Surgical Center, a Medicare certified, AAAHC (Accreditation Association for Ambulatory Health Care) accredited facility in Pompton Lakes, New Jersey. (2AC ¶ 40). The NJSR Surgical Center is the facility at which Dr. Kaul performed interventional spinal procedures and outpatient minimally invasive fusions and discectomies. (Id.).
NJSR allegedly received favorable publicity. In 2011, The Record (a newspaper serving Bergen County and Northern New Jersey) reported that NJSR Surgical Center had a zero percent post-operative infection rate. (Id. ¶ 39). In August 2011, Channel 12 News produced a segment on Dr. Kaul's work, which allegedly prompted unidentified members of the "New Jersey neurosurgical community" to tell non-party Robert McGann that this "was the last straw." (2AC ¶ 47).
From March 2011 to April 2012, Dr. Kaul's practice grew 300% (from some unspecified baseline). (2AC ¶ 43). Dr. Kaul summarizes his own skills thus:
(2AC, ¶ 43-44).
In April 2012, Dr. Kaul's medical license was suspended. (2AC ¶ 44). At that time, he suggested to the medical board that he be independently observed. This request was ignored. (Id.).
In late 2013, Dr. Peterson allegedly called Dr. Kaul a murderer. Peterson made that statement to one of Kaul's employees, Linda Reyes, whose brother Dr. Peterson had recently operated on. (2AC ¶ 37).
The Second Amended Complaint also alleges that Dr. Przybylski, the President of the North American Spine Society ("NASS"), and a group of neurosurgeons acted together to cause professional societies, such as NASS and the American Medical Association ("AMA"), to change the codes assigned to minimally invasive spine surgery. (2AC at ¶ 287). For example, these defendants allegedly "downgraded" the Current Procedural Terminology ("CPT") code for endoscopic discectomies performed outside of a hospital. (Id. at ¶ 288-89). As a consequence, Dr. Kaul alleges, Dr. Kaul's reimbursement fees for outpatient endoscopic discectomies were lowered. (Id. at ¶ 289). As a further consequence, Dr. Kaul alleges, the defendants and their hospitals have increased their fees for minimally invasive spine surgeries, the insurance carriers have refused to reimburse outpatient surgical centers for minimally invasive spine surgeries, and patients have turned to opioids. (Id. at 291-96).
Dr. Kaul alleges that, from 2006 to 2012, he successfully treated thousands of patients who had sustained spinal injuries from car accidents. (2AC ¶ 31). Hundreds of those patients had allegedly purchased personal injury insurance from the defendant Carriers (Id.). Dr. Kaul avers that, from 2006 to 2012, he prevailed on "almost ninety-nine percent (99%) of all [insurance] claims presented for arbitration." (Id. ¶ 32).
Dr. Kaul claims that, upon losing an arbitration to Dr. Kaul, GEICO "runs into federal court, while its racketeering comrade, [Allstate], runs into the Union County State Court." (2AC ¶ 33).
On April 23, 2013,
On February 15, 2015, Allstate filed a lawsuit against Dr. Kaul in New Jersey Superior Court, Union County, which Dr. Kaul claims was almost identical to the GEICO suit. (Id. ¶ 35). This lawsuit. Dr. Kaul alleges, was simply "Allstate's avenue to re-litigate claims it lost against [Dr. Kaul] in state sanctioned arbitration forums." (Id. ¶ 36).
Dr. Kaul alleges that his success posed an economic threat to insurance carriers. (2AC ¶ 42). The Carriers were motivated to avoid their obligation to reimburse Dr. Kaul for medical services he had rendered. (Id.). At an unidentified time, in an undisclosed manner, these Carriers allegedly "purchased political leverage" with former New Jersey Governor Christie's administration to have Dr. Kaul's medical license revoked. (Id.).
The defendant State government officials and agencies have already been dismissed from this action with prejudice on immunity grounds. (DE 200 p.65). The allegations of a government conspiracy in connection with the OAL and Medical Board proceedings remain in the Second Amended Complaint, however. I briefly summarize them.
Dr. Kaul claims that the defendants controlled former Governor Christopher J. Christie by funneling bribes and fees. (2AC ¶ 52). Governor Christie, in turn, "exercised complete control" of the proceedings that resulted in the revocation of his medical license. (Id. at 51). The Division of Consumer Affairs, which controls the Board, serves at the pleasure of the Governor. (Id. ¶ 49). The Governor also controls the Department of Law and Public Safety, which controls Office of the Attorney General. (Id.). The Office of the Attorney General serves as counsel to Board and prosecutes cases against physicians. (Id.). The Office of Administrative Law is also controlled by the Governor. (Id. ¶ 50).
In early January 2012, two inspectors from "the state" made an unannounced visit to NJSR Surgical Center. There, they collected evidence and interviewed Dr. Kaul and his staff. (2AC ¶ 82). The inspectors did not present warrants and they concealed the purpose of their visit. (Id.).
On April 2, 2012, the Board filed a complaint to suspend or revoke Dr. Kaul's license. (2AC ¶ 83). On May 9, 2012 Dr. Kaul signed an interim consent order agreeing to limit his practice to interventional spinal procedures. (Id. ¶ 84). Under that order, Dr. Kaul was permitted to apply for minimally invasive spine privileges at a hospital, which he did on May 16, 2012. (Id.).
Dr. Kaul alleges that, on May 9, 2012, former New Jersey Attorney General Jeffrey Chiesa ("Chiesa") made prejudicial comments about Dr. Kaul to the media. (2AC ¶ 85).
On May 22, 2012, the Acting Director of the Division of Consumer Affairs, non-party Eric Kanefsky, suspended Dr. Kaul's CDS prescribing privileges, which prevented Dr. Kaul from practicing medicine. (2AC ¶ 86). In response, Dr. Kaul threatened suit. (Id. ¶ 87). On May 29, 2012, Kanefsky responded by filing a motion to rescind Dr. Kaul's consent order. (Id. ¶ 87).
On June 7, 2012, Dr. Kaul filed with the Superior Court, Mercer County, an application for the appointment of a special prosecutor and ad hoc medical board. (2AC ¶ 88). Dr. Kaul's application and a subsequent appeal were both denied. (Id.).
On June 13, 2012, the Board granted the motion of Kanefsky (not a party here) to rescind the consent order. (2AC ¶ 89). Before suspending Dr. Kaul's license, the Board conducted a hearing. Dr. Kaul takes issue with the evidence presented at that hearing. (Id. ¶ 89). First, he alleges, the hearing was based on a false allegation that he "had not changed his website or responded to a request for documents." (Id.). At the hearing, another non-party, "DAG Hafner," whom Dr. Kaul does not otherwise identify, played a video of a patient as evidence that Dr. Kaul had deviated from "Dr. Przybylski's fictitious standard of care, a standard of care that he admitted on May 6, 2013 did not exist." (Id.). The patient in the video, Dr. Kaul alleges, had improved after Dr. Kaul performed a successful minimally invasive outpatient lumbar fusion. (Id.).
On December 20, 2012, the State of New Jersey issued a cease-and-desist letter ordering Dr. Kaul to close the NJSR Surgical Center. (2AC ¶ 90). Although Dr. Kaul's license had been revoked, other physicians were then performing medical procedures at the facility. (Id.). Dr. Kaul appealed the order, which eventually was stayed pending the outcome of Dr. Kaul's license proceedings described below. (Id.).
On April 9, 2013, the New Jersey Office of Administrative Law ("OAL") commenced a hearing related to Dr. Kaul's disciplinary proceedings. (Id.). In those proceedings, Dr. Przyblski was allowed to testify about five patients. (Id.). Dr. Kaul was not allowed to examine these five patients. (Id.). According to Dr. Kaul, Dr. Przyblski's testimony was part of the OAL Judge's basis for revoking Dr. Kaul's license. (Id.).
On September 16, 2013, Dr. Kaul filed an ethics complaint with Michael Keating ("Keating") against non-party Hafner.
On December 13, 2013, ALJ Solomon issued an opinion recommending that Dr. Kaul's medical license be revoked. (2AC ¶ 101; see discussion at Section I.A, supra). In a document titled "The Solomon Critique," Dr. Kaul says, he "proves that there were two hundred and seventy-eight (278) separate instances of perjury, misrepresentation, evidential omissions and gross mischaracterizations collectively committed by [ALJ Solomon] and Defendants Przybylski and Kaufman." (Id. ¶ 117).
On March 24, 2014, the Board revoked Dr. Kaul's license. (2AC ¶ 106).
In a separate action, on September 23, 2013, non-party Corey Johnson, one of Dr. Kaul's patients, filed a complaint against Dr. Kaufman and Gonzalez. In that complaint, Dr. Kaul alleges, "Johnson described how Kaufman had publicly slandered and defamed Kaul in an operating room at the hospital, just before he performed a spinal procedure on Johnson." (2AC ¶ 97).
On November 17, 2013, The Record of Bergen County published an article written by a reporter named Lindy Washburn, describing Dr. Kaul's "frayed wallet," "lace less shoes," and "upper crust British accent." (2AC ¶ 98). Dr. Kaul alleges that defendants have now erased this article from the internet. (Id. ¶ 99). On December 26, 2013, Dr. Kaul sent a letter to ALJ Solomon regarding the Record story. (2AC ¶ 102). On January 9, 2014, Dr. Kaul sent a letter to Washburn requesting a copy of an alleged audio recording of her interview of Dr. Kaul on August 13, 2013. (2AC ¶ 104). Dr. Kaul alleges that at the commencement of this interview, Washburn "acknowledges that the transcripts are forged." (Id.).
On February 6, 2014, Dr. Kaul sent a letter to the medical board asserting that he would not attend a hearing that month. (2AC ¶ 106). In that same letter, Dr. Kaul raised the issues of the forged transcripts and Dr. Kaufman's remarks. (Id.).
On January 22, 2014, an unidentified senior medical board member, who allegedly spent eight years at the New Jersey Board of Medical Examiners, gave an interview to a second unidentified person. (2AC ¶ 105). In this alleged interview, the board member suggested that a physician, non-party Dr. Kenneth Zahl, was responsible for the death of an unidentified Deputy Attorney General. The anonymous board member allegedly harshly criticized patients who had come to support Dr. Zahl. (Id.). Dr. Zahl and Dr. Kaul are said to share a conviction that the Office of the Attorney General engages in evidence tampering. (Id. ¶ 56).
On January 29, 2015, Dr. Kaul lodged a complaint with the United States Attorney's Office for the District of New Jersey. (2AC ¶ 107).
In 2015, Dr. Kaul submitted multiple letters to the New Jersey Attorney General, the United States Attorney, and the Carriers seeking their assistance in obtaining a copy of Dr. Kaul's medical board file and investigating the allegedly forged transcripts and alleged Washburn audio recording. (2AC ¶ 108).
On November 11, 2015, Dr. Kaul filed a letter with the International Criminal Court. (2AC ¶ 109).
In May 2016, former Governor Christie's administration filed an action against Dr. Kaul in Superior Court, which Dr. Kaul argues was retaliatory. (2AC ¶ 111).
On September 15, 2016, Dr. Kaul made an unannounced visit to nonparty J.H. Buhrer, the company employed by the state to transcribe Dr. Kaul's OAL disciplinary proceedings. (2AC ¶ 112). Dr. Kaul interviewed the company owner. (Id.).
At 1:30 am on September 21, 2016, Dr. Kaul was arrested by eight armed officers from the Somerset County Probation Department on a warrant for unpaid child support. (2AC ¶ 113).
I assume familiarity with the convoluted procedural history of this matter, including my previous filed opinion (DE 200). I highlight here some items particularly pertinent to these motions.
On February 22, 2016, Dr. Kaul filed his original complaint in the United States District Court for the Southern District in New York. (DE 1). Because almost all of the defendants and events giving rise to the complaint were allegedly located in in New Jersey, on April 19, 2016, District Judge Richard Sullivan transferred venue of the case to this Court. (DE 1; DE 19).
On June 8, 2016, Dr. Kaul filed the First Amended Complaint asserting twelve causes of action. (DE 57).
On December 22, 2016, Dr. Kaul filed a motion for default judgement against defendant Lewis Stein, Esq. (DE 149). Later, on June 13, 2017, Dr. Kaul filed a second motion for default judgment against Stein. (DE 192).
On June 30, 2017, I dismissed the First Amended Complaint, in part for lack of jurisdiction under Fed. R. Civ. P 12(b)(1), but for the most part for failure to state a claim under Fed. R. Civ. P. 12(b)(6). (DE 200; DE 201 (as amended on July 10, 2017 by DE 203)).
On July 7, 2017, I filed a memorandum and order denying Dr. Kaul's motions for default judgment (DE 149, 192) against Stein. (DE 202).
On August 10, 2017, Dr. Kaul filed another proposed second amended complaint. (DE 204). On September 6, 2018, upon sua sponte review, the Honorable Steven C. Mannion, United States Magistrate Judge, filed a letter order vacating this amended complaint (DE 204) for several reasons. Among those reasons was that its unnecessary length placed an unjustified burden on the Court. (DE 208 p. 3).
On September 26, 2017, Dr. Kaul filed a revised version of that proposed second amended complaint. (DE 209). On October 18, 2017, Magistrate Judge Mannion again rejected the submission. He ordered Dr. Kaul to file a "revised proposed amended complaint that omits claims already dismissed with prejudice and reduces the pages of exhibits." (DE 213).
On October 27, 2017, Dr. Kaul filed another, revised version of the proposed second amended complaint. (DE 214). By letter order, on February 8, 2018, Magistrate Judge Mannion filed a letter order striking this proposed amended complaint for failure to comply with the court's previous order. (DE 229, citing DE 213). Magistrate Judge Mannion further ordered that Dr. Kaul's next version of the amended complaint include red-lined changes to assist the Court in its review. (Id.).
On February 22, 2018, Dr. Kaul filed a red-lined version of the next version of his proposed revised amended complaint. (DE 231). This represented progress, but apparently was not yet satisfactory. On April 16, 2018, by letter order, Magistrate Judge Mannion ordered Dr. Kaul to provide the Court with "yet another proposed amended complaint in which changes are red-lined to assist the Court in its review." (DE 238). Magistrate Judge Mannion clarified that he did not expect or authorize a complete redrafting; Dr. Kaul, he ordered, "only has leave to make the changes necessary to comply with this Order and does not have leave to add any additional claims or defendants." (Id.).
On May 11, 2018, Dr. Kaul filed another version of the proposed second amended complaint. (DE 239) Magistrate Judge Mannion approved this version for filing on May 22, 2018. (DE 240). This version is the basis for the Second Amended Complaint that is the subject of this motion.
On June 4, 2018, Dr. Kaul filed the Second Amended Complaint now before this Court. (DE 241). The Second Amended Complaint asserts fourteen causes of action:
As to damages, Dr. Kaul generally requests: compensatory, consequential, and punitive damages; declarations from the Court that the acts alleged were illegal; the immediate reinstatement of Dr. Kaul's license to practice medicine and surgery; expungement of the revocation of Dr. Kaul's medical license from the public record; the reinstatement Dr. Kaul's CDS registration; injunctive relief against all defendants for any and all alleged illegal activities; disgorgement, restitution, and the creation of a constructive trust; an award of costs of suit, including reasonable attorneys' fees; and any other relief necessary. (2AC pp. 91-93). In his briefing, Dr. Kaul refers to a calculation of damages from the original complaint in the amount of "28,171,028.828568999213 trillion" dollars. Some supporting calculations are proffered. (See DE 1-2 at 80).
Five motions to dismiss now are before the Court: (1) the motion to dismiss of Doctor Mitchell filed on August 15, 2018, (DE 257);
On November 6, 2018, Dr. Kaul filed the following: (1) an opposition to the Omnibus Motion to Dismiss (DE 268); (2) an opposition to the brief in support filed by the TD Bank Defendants (DE 272); and (3) an opposition to motion to dismiss of Dr. Heary (DE 276).
On November 7, 2018, Dr. Mitchell filed a reply brief in further support of his motion to dismiss. (DE 274). On November 19, 2018, Dr. Kaul filed an unauthorized surreply to Dr. Mitchell's reply. (DE 283). On November 26, 2018, counsel for Dr. Mitchell filed a letter requesting that the Court strike Dr. Kaul's surreply, citing D.N.J. L.R. 7.1(d)(6), and Dr. Kaul filed a response to that letter. (DE 285, 287). I will consider Dr. Kaul's surreply.
On November 13, 2018, the clerk of the court entered default against defendant Lewis Stein, Esq. (DE 280). On that same day, Dr. Kaul filed a motion for default judgment against Stein. (DE 281). On November 26, 2018, Stein filed a response in opposition to the motion for default judgment. (DE 282). On November 27, 2018, Dr. Kaul filed a letter reply. (DE 286). Two days later, on November 29, 2018, Dr. Kaul filed a second letter in support of a default judgment. (DE 288).
On December 6, 2018, Dr. Heary filed a response in support of dismissal. (DE 290). On December 7, 2018, the Newspaper Defendants (DE 291) and Allstate (DE 292) filed reply briefs in support of dismissal. On December 12, 2018, the defendants filed a reply brief in further support of the Omnibus Motion to Dismiss. (DE 294). On the same date, the TD Bank Defendants also filed a reply in further support of dismissal. (DE 295).
In advance of the merits of the motion to dismiss, I here dispose of two preliminary applications: (a) Dr. Kaul's request to further amend the Second Amended Complaint to add the Gannett newspaper concern as a new defendant, see Section II.A; and (b) his motion for entry of a default judgment against defendant Stein, see Section II.B.
Before addressing the defendants' motions substantively, I consider Dr. Kaul's letter request to amend the Second Amended Complaint so that he may add Gannett Co. Inc. ("Gannett") as a defendant should Gannett publish a story about Dr. Kaul. (DE 243).
The Second Amended Complaint is the product of four drafts submitted to this Court after the dismissal of the First Amended Complaint. (DE 57; DE 204; DE 209; DE 231; DE 239). On April 16, 2018, by letter order, Magistrate Judge Mannion specifically ordered that Dr. Kaul "does not have leave to add any additional claims or defendants." (DE 240 p. 2). These allegations cannot remain a moving target forever. For that reason alone, I would not grant leave to amend.
In addition, the motion to add Gannett to the Second Amended Complaint is denied as futile, because the proffered claim against Gannett would not withstand a motion to dismiss. Penn. Bus. Credit, LLC v. All Staffing, Inc., 597 Fed. Appx. 692, 694 (3d Cir. 2015) ("Amendment of the complaint is futile if the amendment will not cure the deficiency in the original [pleading] or if the intended [pleading] cannot withstand a renewed motion to dismiss."). Here, Dr. Kaul purports to sue Gannett based on a news story that he speculates may be published in the future. (DE 243). I would necessarily dismiss any such claim for damages on ripeness grounds. Laird v. Tatum, 408 U.S. 1, 14 (1972)) ("[T]he federal courts established pursuant to Article III of the Constitution do not render advisory opinions.") (internal citations omitted). And a prior injunctive restraint on publication is, of course, a quintessential First Amendment violation. Near v. Minnesota, 283 U.S. 697 (1931). Dr. Kaul's request to add Gannett as a defendant is denied.
Dr. Kaul has moved for entry of a default judgment against defendant Stein. In opposition, Stein filed a letter arguing that (1) the Second Amended Complaint fails to state a claim, and (2) default should be vacated for the same reasons I previously vacated default against Stein (DE 282; see also DE 202). Stein's letter also states that Stein has taken a medical leave and retired from his law firm. (DE 282). On November 27, 2018, Dr. Kaul filed a letter in further support of default. (DE 286). On November 29, 2018, Dr. Kaul filed a second letter in support of default in which he asserted that Stein is not actually retired; informed the Court that he will be filing an ethics complaint against Stein; and asked the Court to refer the Stein to the Ethics Committee of the New Jersey Supreme Court. (DE 288). These latter matters I set aside, because they do not even purport to assert a cognizable cause of action against Stein. For the reasons stated below, Dr. Kaul's motion is denied, and I will vacate the clerk's entry of default against Stein.
Federal Rule of Civil Procedure 55(c) provides that relief from entry of default will be granted for "good cause." As a general matter, defaults are disfavored. Gross v. Stereo Component Sys., Inc., 700 F.2d 120, 122 (1983). The district court, exercising its discretion to grant a motion to vacate default, considers: "(1) whether plaintiff will be prejudiced; (2) whether the defendant has a meritorious defense; (3) whether the default was the result of the defendant's culpable conduct and (4) the effectiveness of alternative sanctions." Gold Kist, Inc. v. Laurinburg Oil Co., 756 F.2d 14, 19 (3d Cir. 1985) (internal citations omitted). In this case, Dr. Kaul will not be prejudiced if default is vacated. As discussed herein, the defenses to these claims are meritorious, and they would apply to Stein. Finally, given the confusing nature of Dr. Kaul's still quite prolix Second Amended Complaint, I cannot find that Stein's failure to appear and defend was willful. I add, by the way, that Stein seems to have belatedly joined issue; he is named as one of the movants on the Omnibus Motion to Dismiss.
The motion for a default judgment against Stein is therefore denied, both on the merits and because it is mooted by my dismissal of the Second Amended Complaint herein, on grounds that would apply equally to Stein.
Rule 12(b)(6), Fed. R. Civ. P., provides for the dismissal of a complaint, in whole or in part, if it fails to state a claim upon which relief can be granted. The defendant, as the moving party, bears the burden of showing that no claim has been stated. Animal Science Products, Inc. v. China Minmetals Corp., 654 F.3d 462, 469 n. 9 (3d Cir. 2011). For the purposes of a motion to dismiss, the facts alleged in the complaint are accepted as true and all reasonable inferences are drawn in favor of the plaintiff. New Jersey Carpenters & the Trustees Thereof v. Tishman Const. Corp. of New Jersey, 760 F.3d 297, 302 (3d Cir. 2014).
Federal Rule of Procedure 8(a) does not require that a complaint contain detailed factual allegations. Nevertheless, "a plaintiffs obligation to provide the `grounds' of his `entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Thus, the complaint's factual allegations must be sufficient to raise a plaintiffs right to relief above a speculative level, so that a claim is "plausible on its face." Id. at 570; see also West Run Student Housing Assocs., LLC v. Huntington Nat. Bank, 712 F.3d 165, 169 (3d Cir. 2013). That facial-plausibility standard is met "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 556). While "[t]he plausibility standard is not akin to a `probability requirement' . . . it asks for more than a sheer possibility." Iqbal, 556 U.S. at 678.
However, a plaintiff alleging fraud or mistake must meet a heightened pleading standard under Federal Rule of Civil Procedure 9(b). Under Rule 9(b), "[i]n alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake." Fed. R. Civ. P. 9(b) (emphasis added). As the Third Circuit has explained, "[a] plaintiff alleging fraud must therefore support its allegations with all of the essential factual background that would accompany the first paragraph of any newspaper story—that is, the who, what, when, where and how of the events at issue." U.S. ex rel. Moore & Co., P.A. v. Majestic Blue Fisheries, LLC, 812 F.3d 294, 307 (3d Cir. 2016) (citing In re Rockefeller Ctr. Props., Inc. Securities Litig., 311 F.3d 198, 217 (3d Cir. 2002)) (citation and quotation marks omitted). In other words, a plaintiff may satisfy this requirement by pleading "the date, time and place" of the alleged fraud or deception, or by "otherwise injecting] precision or some measure of substantiation" into the allegation. Frederico v. Home Depot, 507 F.3d 188, 200 (3d Cir. 2007) (citing Lum v. Bank of Am., 361 F.3d 217, 224 (3d Cir. 2004).
The heightened specificity required by Rule 9(b) extends to the pleading of all claims that "sound in fraud." See Giercyk v. Nat'l Union Fire Ins. Co. of Pittsburgh, No. 13-6272, 2015 WL 7871165, at *2 (D.N.J. Dec. 4, 2015); Mladenov v. Wegmans Food Markets, Inc., 124 F.Supp.3d 360, 372 (D.N.J. 2015). That category includes Dr. Kaul's claims of mail, wire, and honest services fraud. See Warden v. McLelland, 288 F.3d 105, 114 (3d Cir. 2002).
Where a plaintiff, like Dr. Kaul here, is proceeding pro se, the complaint is to be "liberally construed," and, "however inartfully pleaded, must be held to less stringent standards than formal pleadings drafted by lawyers." Erickson v. Pardus, 551 U.S. 89, 93-94 (2007). Nevertheless, "pro se litigants still must allege sufficient facts in their complaints to support a claim." Mala v. Crown Bay Marina, Inc., 704 F.3d 239, 245 (3d Cir. 2013).
"While a litigant's pro se status requires a court to construe the allegations in the complaint liberally, a litigant is not absolved from complying with Twombly and the federal pleading requirements merely because s/he proceeds pro se." Thakar v. Tan, 372 F. App'x 325, 328 (3d Cir. 2010) (citation omitted). Pro se plaintiffs are also not exempt from meeting the heightened pleading requirements of Rule 9(b) when alleging claims that sound in fraud. See Kowalsky v. Deutsche Bank Nat'l Trust Co., No. 14-07856, 2015 WL 5770523, at *9 (D.N.J. Sept. 30, 2015).
The Second Amended Complaint fails to state a claim under federal law. For the reasons set forth in Section IV.A, infra, the federal-law claims are dismissed under Fed. R. Civ. P. 12(b)(6). The associated state-law claims are also dismissed on jurisdictional grounds, for the reasons stated in Section IV.B, infra.
Dr. Kaul brings the following federal causes of action: (1) four counts under RICO, (2) two counts alleging antitrust violations under the Sherman and Clayton Acts, and (3) one § 1983 claim for deprivation of rights under color of state law.
The Second Amended Complaint asserts four counts under of the Federal RICO statute, 18 U.S.C. § 1962(c) & (d):
Counts One, Two, Three, and Four of the Second Amended Complaint allege that the CAC RICO Defendants, the CAGTK RICO Defendants, the CHE RICO Defendants, and the CMS RICO Defendants, respectively, violated 18 U.S.C. § 1962(c) & (d). Section 1962(c) makes it unlawful "for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity." 18 U.S.C. § 1962(c); see In re Ins. Brokerage Antitrust Litig., 618 F.3d 300, 362-63 (3d Cir. 2010). Section 1962(d) makes it unlawful "for any person to conspire to violate" § 1962(c).
To establish a claim under § 1962(c), a plaintiff must allege (1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity. Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 482-83 (1985); see also District 1199P Health & Welfare Plan v. Janssen, L.P., 784 F.Supp.2d 508, 518-19 (D.N.J. 2011) (citation omitted).
The term "enterprise" includes "any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity." Ins. Brokerage, 618 F.3d at 362-63 (citing 18 U.S.C. § 1961(4)). With respect to the pattern of racketeering activity, the statute "requires at least two acts of racketeering activity within a ten-year period," which may include federal mail fraud under 18 U.S.C. § 1341. Id. (citations omitted). In addition, "the plaintiff only has standing if, and can only recover to the extent that, he has been injured in his business or property by the conduct constituting the violation." Sedima, 473 U.S. at 496.
Counts One, Two, Three, and Four allege nearly identical predicate acts of racketeering. The defendants are alleged to have committed, conspired to commit, or aided and abetted in the commission of, mail and wire fraud in violation of 18 U.S.C. §§ 1341 and 1343. (2AC ¶¶ 145-160, 189-202, 228-242, 271-286).
The offense of mail or wire fraud has two essential elements: "[1] a scheme to defraud, and (2) a mailing or wire in furtherance of that scheme." Annulli v. Panikkar, 200 F.3d 189, 200 n.9 (3d Cir. 1999). Use of the mails may be intrastate; use of the wires must be interstate. Id. Allegations of either offense as a predicate for a civil cause of action must meet the heightened standard for pleading fraud under Rule 9(b). Warden, 288 F.3d at 114; Bonavitacola Elec. Contr., Inc. v. Boro Developers, Inc., 87 F. App'x 227, 231 (3d Cir. 2003) ("[T]he `who, what, when, and where details of the alleged fraud' are required.") (quoting Allen Neurosurgical Assoc., Inc. v. Lehigh Valley Health Network, No. CIV-A-99-4653, 2001 WL 41143 (E.D. Pa. Jan. 18, 2001)); see also Frederico v. Home Depot, 507 F.3d 188, 200 (3d Cir. 2007) ("To satisfy [Rule 9(b)], the plaintiff must plead or allege the date, time and place of the alleged fraud or otherwise inject precision or some measure of substantiation into a fraud allegation.").
Counts One through Four fail to explain the who, what, where, and how of the alleged schemes to defraud. First, none of the counts allege that any specific defendant committed any particular act of either mail or wire fraud. (2AC ¶¶ 145-160, 189-202, 228-242, 271-286). Instead, the counts for the most part posit the existence of a broad conspiracy and state that the defendants are members of it. (Id.). Second, even in the most detailed of the predicate act descriptions, the allegations of predicate acts are vague and conclusory. (see e.g., 2AC ¶ 151) ("The CAC RICO Defendants' use of the mail and wires include, but are not limited to: (a) the transmission of letters, e-mails and other materials negotiating the horizontal agreements and market share distributions . . . (d) written, telephone, or electronic communications instructing its members not to support the Plaintiff in any litigation."). Although the complaint purports to specify some of the "occasions on which the predicate acts of mail and/or wire fraud occurred," it does not provide the dates, names, locations, and so forth, with the requisite specificity. (2AC ¶¶ 153, 195, 237, 280).
More broadly, Counts One through Four simply lack factual concreteness. They attempt to excuse their factual deficits by alleging that the precise dates of the fraudulent acts "have been deliberately hidden" by unidentified persons in an unspecified manner. (2AC ¶¶ 153, 195, 237, 280). In a proper case, some non-specificity can be excused pending discovery. See 5 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure §1298 (3d ed. 2009) ("[T]he rule regarding the pleading of fraud does not require absolute particularity or a recital of the evidence, especially when some matters are beyond the knowledge of the pleader and can only be developed through discovery."). Even so, this is not a case of allegations that merely lack "absolute particularity or a recital of the evidence." These RICO mail and wire fraud allegations are so utterly lacking in facts that they cannot satisfy Rule 9(b). If a conspiracy so vast and all-encompassing had existed, it surely would have left some trace in the form of facts that could be cited by the plaintiff. The pleading deficit here cannot be remedied by a circular, speculative allegation of "hidden" facts which, if we knew what they were, would support a cause of action. RICO cases, like the antitrust cases discussed in Twombly, "are `big' cases and the defendant should not be put to the expense of big-case discovery on the basis of a threadbare claim." In re Ins. Brokerage Antitrust Litig., 618 F.3d 300, 370 (3d Cir. 2010) (internal citations omitted).
The RICO claims' allegations of predicate acts of mail and wire fraud fail to meet the heightened pleading standard of Rule 9(b). For that reason, Counts One, Two, Three, and Four are dismissed.
Dr. Kaul brings two counts alleging antitrust claims. In Count Five, he seeks declaratory and injunctive relief under Section 16 of the Clayton Act for violations of Sections 1 and 2 of the Sherman Act. In Count Six, he brings monopolization claims against Dr. Pryzbylski, Dr. Kaufman, Dr. Staats, Dr. Cohen, Dr. Heary, Dr. Mitchell, Hackensack UMC, University Hospital, and AHS. (2AC ¶ 57).
Contracts, combinations, and conspiracies in restraint of trade are illegal. 15 U.S.C. § 1. To sustain such a claim, the plaintiff must prove:
Martin B. Glauser Dodge Co. v. Chrysler Corp., 570 F.2d 72, 81-82 (3d Cir. 1977); accord Howard Hess Dental Laboratories Inc. v. Dentsply Int'l, Inc., 602 F.3d 237, 253 (3d Cir. 2010) ("A plaintiff asserting a Section 1 claim . . . must allege four elements: `(1) concerted action by the defendants; that produced anti-competitive effects within the relevant product and geographic markets; (3) that the concerted actions were illegal; and (4) that it was injured as a proximate result of the concerted action.'") (citing Gordon v. Lewistown Hosp., 423 F.3d 184, 207 (3d Cir. 2005)).
It is also illegal to monopolize, attempt to monopolize, or conspire to monopolize trade. 15 U.S.C. § 2. Claims under Sherman Act section 2 generally come in two flavors: monopoly abuse and attempted monopolization.
Queen City Pizza v. Domino's Pizza, 124 F.3d 430, 437 (3d Cir. 1997) (quoting Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585, 596 n. 19 (1985)). An attempted monopolization claim has three elements: "a plaintiff must prove that the defendant (1) engaged in predatory or anticompetitive conduct with (2) specific intent to monopolize and with (3) a dangerous probability of achieving monopoly power." Id. at 442.
Under sections 1 and 2, the plaintiff bears the burden of pleading the relevant geographic and product markets. See Queen City Pizza, 124 F.3d at 436-37. Kaul has not done so.
"The outer boundaries of a product market are determined by the reasonable interchangeability of use or the cross-elasticity of demand between the product itself and substitutes for it." Brown Shoe Co. v. U.S., 370 U.S. 294, 325 (1962). See also Tunis Bros. Co., Inc. v. Ford Motor Co., 952 F.2d 715, 722 (3d Cir. 1991) (same). "Where the plaintiff fails to define its proposed relevant market with reference to the rule of reasonable interchangeability and crosselasticity of demand, or alleges a proposed relevant market that clearly does not encompass all interchangeable substitute products even when all factual inferences are granted in plaintiffs favor, the relevant market is legally insufficient and a motion to dismiss may be granted." Queen City Pizza, 124 F.3d at 436-37 (emphasis in original).
Counts Five and Six do not properly define the relevant product market.
The geographical market is, if anything, even less well defined. No catchment area for patients is hazarded, either in relation to Dr. Kaul's own practice or those of his competitors. The Second Amended compliant does not plausibly allege the nature or geographical extent of the defendants' market power. Dr. Kaul's briefing, as opposed to the complaint, clarifies that the relevant market is intended to be nationwide: "outpatient and minimally invasive spine surgery within New Jersey and the other forty-nine states." (DE 236 p. 52 (citing 2AC ¶¶ 298-304)) The Second Amended Complaint has not pled plausible facts indicating that Dr. Kaul drew patients from, or participated in, any such nationwide market. Rather, he argues that he had a plan to dominate the minimally invasive spine surgery market nationally (or even globally), and that these defendants thwarted him. The allegation is speculative and vague.
In Count Five, Dr. Kaul alleges that the defendants engaged in an anticompetitive scheme to prevent him and his surgical center (and other similarly trained physicians) from engaging in minimally invasive spine surgery. (2AC ¶ 298). This scheme was allegedly pursued by means of the following anticompetitive practices: (1) influencing professional groups to downgrade the codes applicable to outpatient minimally invasive spine surgery; (2) bribing former Governor Christie to veto a bill; (3) bribing unidentified parties to publish a fee schedule that denies payment for outpatient minimally invasive spine surgery; (4) encouraging patients to initiate litigation against Dr. Kaul; (5) bribing unidentified parties to issue a moratorium denying licenses to outpatient surgical centers that performed minimally invasive spine surgeries; (6) agreeing that physicians with training similar to Dr. Kaul's should not perform fusions; and (7) otherwise engaging in an overarching scheme to monopolize.
The allegations of anticompetitive conduct fail to satisfy Twombly and Iqbal. First, under Section 1 of the Sherman Act, Dr. Kaul fails to plead plausible facts to demonstrate that an agreement was made between the defendants. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007) (holding that a well-pled antitrust complaint must allege "enough fact to raise a reasonable expectation that discovery will reveal evidence of illegal agreement"). His pleading burden is not eased, as it might be, by the presence of some per se antitrust violation or very clear anticompetitive effect. Thus he must factually plead something well beyond a formulaic recitation of the elements of a cause of action. Id. at 555. Second, under Section 2 of the Sherman Act, Dr. Kaul fails to plausibly allege that the defendants held monopoly power or otherwise engaged in predatory or anti-competitive behavior. For example, I look to the only allegation with any factual substance—that the defendants caused professional organizations to downgrade codes associated with minimally invasive spine surgery. Even that allegation, however, is merely that the defendants must somehow have controlled or influenced professional organizations. No factual circumstances are alleged. Dr. Kaul's actual grievance is that non-party professional organizations downgraded codes applicable to the procedures that are the core of his practice. Dr. Kaul believes that the defendants somehow influenced the modification of these codes, but he provides the Court with no insight into how that anticompetitive plan was executed.
Even if such facts were alleged, the complaint would still lack any plausible allegations of monopoly power. Nor is the allegedly predatory conduct—i.e., influencing these organizations—described in such a manner that the Court may determine if defendants' actions were anticompetitive in nature.
In Count Six, Dr. Kaul alleges that the defendants held monopolistic sway over the (largely undefined) minimally invasive spine surgery market by (1) bribing former Governor Christie to have the Board revoke Dr. Kaul's medical license (2AC ¶ 307); (2) encouraging patients to sue Dr. Kaul (id. ¶ 308); (3) reporting Dr. Kaul to regulatory authorities (id.); (4) providing fraudulent testimony to the Board and ALJ Solomon (id. ¶¶ 310-11); and (5) filing sham litigation against Dr. Kaul's employees (id. ¶¶ 314-15). Factual allegations are again lacking; merely positing that official action unfavorable to the plaintiff must have resulted from bribery is not enough. Again, Dr. Kaul fails to plausibly allege an agreement between the parties and any per se antitrust violation; moreover, the alleged anticompetitive effects are, again, vague and conclusory.
Count Five and the federal antitrust claim in Count Six are both dismissed for failure to define the relevant market. They also fail to plead an antitrust claim in a plausible, factual manner. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 558, 127 S.Ct. 1955, 1966-67, 167 L. Ed. 2d 929 (2007) (internal citations omitted) (while "it is one thing to be cautious before dismissing an antitrust complaint in advance of discovery, [it is] quite another to forget that proceeding to antitrust discovery can be expensive"). The motion to dismiss those counts is granted.
Count Eleven asserts a claim under 42 U.S.C. § 1983 for deprivation of rights under color of state law. This count alleges that defendants Allstate and GEICO bear responsibility for the allegedly "fraudulent" opinion, issued on December 13, 2013, in which ALJ Solomon found that Kaul should be stripped of his medical license. That opinion, says Kaul, contains some 278 separate acts of misrepresentation, mischaracterization, perjury, and evidential omission. (2AC ¶¶ 272, 274). In addition, Count Eleven claims that Dr. Kaufman and Dr. Przbyblski jointly committed 31 acts of perjury when they provided expert testimony in April and May of 2013 (id. ¶ 373), and failed to recuse themselves from testifying as experts despite their status as Dr. Kaul's business competitors. (DE ¶ 375).
In order to state a claim under 42 U.S.C. § 1983, a plaintiff must allege two essential elements: "(1) the conduct complained of must be `committed by a person acting under color of state law'; and (2) this conduct must `deprive[] a person of rights, privileges, or immunities secured by the Constitution or laws of the United States." Clark v. Punshon, 516 F. App'x 97, 99 (3d Cir. 2013) (quoting Kost v. Kozakiewicz, 1 F.3d 176, 184 (3d Cir. 1993)); accord Mitchell v. Mitchell, 737 F. App'x 630, 631 (3d Cir. 2018) ("under Section 1983, a plaintiff must show she was deprived of a federal constitutional or statutory right by a state actor."); see also West v. Atkins, 487 U.S. 42, 48 (1988).
Fundamentally, for a defendant to have acted under the color of state law, the defendant must have exercised power "possessed by virtue of state law and made possible only because the wrongdoer is clothed with the authority of state law." West, 487 U.S. at 49. Thus, the state-action element of a Section 1983 claim requires that "the conduct allegedly causing the deprivation of a federal right be fairly attributable to the State." Lugar v. Edmonson Oil Co., 457 U.S. 922, 937 (1982). For the conduct to be "fairly attributable" to the State (1) the deprivation must be caused by (a) the exercise of some right or privilege created by the State or (b) by a rule of conduct imposed by it or by a person for whom the State is responsible, and (2) the defendant must be a person who may fairly be said to be a state actor, either because the person (a) is a state official, (b) acted together with or has obtained significant aid from state officials, or (c) performed conduct otherwise chargeable to the State. See id. at 936-39. Dr. Kaul's allegations against these defendants do not establish that they exercised any power under state law.
I first consider whether Dr. Kaufman and Dr. Przbyblski are alleged to be state actors. The allegations against these defendants relate to their testimony as witnesses in a hearing. Testifying in a state administrative law proceeding does not create a sufficient nexus between the defendants and the state. In an apparent attempt to portray Doctors Kaufman and Przbyblski as state actors, Dr. Kaul purports to sue them in their "official capacity." No such official position is identified, however.
I next consider whether GEICO and Allstate are properly alleged to be state actors. Count Eleven alleges that those two Carriers assisted ALJ Solomon in fraudulently drafting his opinion. "[A] private party can qualify as a state actor when `he [or she] is a willful participant in joint action with the State or its agents.'" Clark, 516 F. App'x at 99 (quoting Dennis v. Sparks, 449 U.S. 24, 27-28 (1980)). It is not enough, however, to name a state actor and allege in conclusory terms that some private actor must have participated in his or her actions. The bare assertion that the Carriers "conspired with "[Administrative Law Judge] Jay Howard Solomon to issue [the allegedly] fraudulent opinion" (2AC ¶ 374) is a mere conclusion; it does not plausibly allege facts to suggest conspiracy or joint action between state and non-state actors. Coulter v. Allegheny Cty. Bar Ass'n, 496 F. App'x 167, 169 (3d Cir. 2012) ("Bare assertions of joint action or a conspiracy are not sufficient to survive dismissal at the pleading stage.").
Accordingly, Count Eleven is dismissed for failure to state a claim.
Under 28 U.S.C. § 1367(c)(3), a federal court "`may decline to exercise supplemental jurisdiction' over state law claims if it has `dismissed all claims over which it has original jurisdiction . . .'" Stone v. Martin, 720 F. App'x 132, 136 (3d Cir. 2017). Indeed, "where the claim over which the district court has original jurisdiction is dismissed before trial, the district court must decline to decide the pendent state claims unless considerations of judicial economy, convenience and fairness to the parties provide an affirmative justification for doing so." Hedges v. Musco, 204 F.3d 109, 123 (3d Cir. 2000) (quoting Borough of West Mifflin v. Lancaster, 45 F.3d 780, 788 (3d Cir. 1995)) (emphasis in original). Here, I have dismissed all claims over which this Court has original jurisdiction. I have been directed to no considerations of judicial economy, convenience, fairness, or comity that would weigh in favor of retaining Dr. Kaul's state-law claims. I therefore would decline to exercise supplemental jurisdiction over the state-law component of Count Six, Counts Seven through Ten, and Counts Twelve through Fourteen.
Dr. Kaul alleges in addition, however, that there is an independent basis for this court to exercise jurisdiction over the state law claims, based on diversity of citizenship. "To establish diversity jurisdiction under 28 U.S.C. § 1332(a), the party asserting jurisdiction must show that there is complete diversity of citizenship among the parties and an amount in controversy exceeding $75,000." Schneller, 387 F. App'x at 292. "It is . . . well established that when jurisdiction depends upon diverse citizenship the absence of sufficient averments or of facts in the record showing such required diversity of citizenship is fatal and cannot be overlooked by the court, even if the parties fail to call attention to the defect, or consent that it may be waived." Carlsberg Res. Corp. v. Cambria Sav. & Loan Ass'n, 554 F.2d 1254, 1256 (3d Cir. 1977) (internal citations omitted).
Dr. Kaul alleges that the state law claims in the Second Amended Complaint fall within this Court's diversity jurisdiction "because [Dr. Kaul] is a citizen of a different state to certain defendants." (2AC ¶ 26). It is not sufficient that the plaintiffs citizenship be diverse from that of "certain" defendants. Complete diversity means that "no plaintiff [may] be a citizen of the same state as any defendant." Lincoln Ben. Life Co., 800 F.3d 99, 104 (3d Cir. 2017) (quoting Zambelli Fireworks Mfg. Co. v. Wood, 592 F.3d 412, 419 (3d Cir. 2010)); Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267 (1806).
Citizenship is more than mere residency. It "is synonymous with domicile, and `the domicile of an individual is his true, fixed and permanent home and place of habitation. It is the place to which, whenever he is absent, he has the intention of returning.'" McCann v. Newman Irrevocable Tr., 458 F.3d 281, 286 (3d Cir. 2006).
The state law claims are therefore dismissed, because the court declines to exercise supplemental jurisdiction and because adequate allegations of diversity are lacking. The grounds for dismissal of these state claims are jurisdictional, and the dismissal is therefore without prejudice. Siravo v. Crown, Cork & Seal Co., 256 F. App'x 577, 580-81 (3d Cir. 2007) ("Where a district court lacks subject-matter jurisdiction, its `disposition of such a case will . . . be without prejudice.") (citing In re Orthopedic "Bone Screw" Prods. Liab. Litig., 132 F.3d 152, 155 (3d Cir. 1997)).
The defendants have also raised numerous substantive and procedural grounds for dismissal of the state claims. I do not reach those arguments.
For the reasons set forth above, the defendants' motions to dismiss are GRANTED, as follows.
An appropriate order follows.
The decisions of the ALJ and Board are cited in and fundamental to the allegations of the Second Amended Complaint. "`[A] document integral to or explicitly relied upon in the complaint' may be considered `without converting the motion to dismiss into one for summary judgment.'" Schmidt v. Skolas, 770 F.3d 241, 249 (3d Cir. 2014) (quoting In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1426 (3d Cir. 1997)); accord In re Asbestos Products Liability Litigation (No. VI), 822 F.3d 125, 134 n. 7 (3d Cir. 2016). The decisions of the ALJ and the Board are also rulings of tribunals, the authenticity of which is not questioned, which may be judicially noticed, not for their truth but for their existence and legal effect. See S. Cross Overseas Agencies, Inc. v. Wah Kwong Shipping Grp. Ltd., 181 F.3d 410, 426-27 (3d Cir. 1999). See generally Fed. R. Evid. 201.
(Board Order 18-19).
For example, on April 8, 2011, Dr. Kaul submitted an application for privileges at HUMC. He was asked the following question: "Please indicate if you have been ever been convicted of any criminal offense, excluding minor traffic violations, e.g., passing a stop sign, (if yes, give details on a separate sheet.)" Kaul checked the "NO" box, even though he had been convicted of manslaughter just a few months earlier.
The following defendants were dismissed with prejudice:
Because further amendment would be futile, the following counts were also dismissed with prejudice for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6):
The following counts were dismissed without prejudice:
(DE 201; DE 203).
Under 28 U.S.C. § 1331, "[f]ederal question jurisdiction arises where federal law creates the cause of action, or where the complaint, on its face, poses a federal question." Schneller, 387 F. App'x at 292 (citing Club Comanche, Inc. v. Gov't of Virgin Islands, 278 F.3d 250, 259 (3d Cir. 2002)). Dr. Kaul brings the following counts under federal law: Counts One through Five, the federal law component of Count Six, and Count Eleven. This Court thus has subject matter jurisdiction over those claims. See 28 U.S.C. § 1331.
The state-law claims, consisting of part of Count Six, Counts Seven through Ten, and Counts Twelve through Fourteen, do not fall under 28 U.S.C. § 1331. Jurisdiction over the state-law claims is discussed separately at Section IV.B, infra.
