Opinion
1:99CV113-T
April 26, 2000
MEMORANDUM AND RECOMMENDATION
THIS MATTER is before the court upon defendants' Motion for Summary Judgment. After careful consideration of that motion and review of the pleadings, the undersigned enters the following findings, conclusions, and recommendation.
FINDINGS AND CONCLUSIONS
I. Background
In this action, plaintiffs are former City of Asheville police officers whose employment as officers ended, by termination or resignation, after they committed criminal offenses. While admitting that they committed the underlying criminal acts, plaintiffs contend that their terminations and resignations were in violation of their rights to due process, were the result of racketeering activities on the part of the Chief of Police and the City of Asheville, and amounted to torts actionable under state common law. Defendants have moved for summary judgment, and the issues have been fully briefed.
II. Rule 56 Standard
On a motion for summary judgment, the moving party has the burden of production to show that there are no genuine issues for trial. Upon the moving party's meeting that burden, the nonmoving party has the burden of persuasion to establish that there is a genuine issue for trial.
When the moving party has carried its burden under Rule 56(c), its opponent must do more than simply show that there is some metaphysical doubt as to the material facts. In the language of the Rule, the nonmoving party must come forward with "specific facts showing that there is a genuine issue for trial." Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving [sic] party, there is no "genuine issue for trial."Matsushita Elec. Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986) (citations omitted; emphasis in the original) (quoting Fed.R.Civ.P. 56). There must be more than just a factual dispute; the fact in question must be material and readily identifiable by the substantive law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986).
By reviewing substantive law, the court may determine what matters constitute material facts. Id. "Only disputes over facts that might affect the outcome of the suit under governing law will properly preclude the entry of summary judgment." Id., at 248. A dispute about a material fact is "genuine" only if the evidence is such that "a reasonable jury could return a verdict for the nonmoving party." Id.
[T]he court is obliged to credit the factual asseverations contained in the material before it which favor the party resisting summary judgment and to draw inferences favorable to that party if the inferences are reasonable (however improbable they may seem).Cole v. Cole, 633 F.2d 1083, 1092 (4th Cir. 1980). Affidavits filed in support of defendants' Motion for Summary Judgment are to be used to determine whether issues of fact exist, not to decide the issues themselves. United States ex rel. Jones v. Rundle, 453 F.2d 147 (3d Cir. 1971). When resolution of issues of fact depends upon a determination of credibility, summary judgment is improper. Davis v. Zahradnick, 600 F.2d 458 (4th Cir. 1979).
III. Factual Findings
A. Introduction
As noted above, plaintiffs are five former police officers who were employed by the City of Asheville. Three of the five resigned when confronted by the Chief of Police about their underlying criminal conduct. The remaining two availed themselves of hearings before a city civil service board, appealed the decisions upholding their terminations, and ultimately lost. As discussed below, plaintiffs' ability to maintain their Section 1983 action is dependent upon a finding that they had a property interest in their city employment. In order to maintain claims under RICO, plaintiffs have to show a pattern of racketeering activity and also a business loss. Inasmuch as the specific underlying crimes and circumstances surrounding each plaintiff's claims are distinct, the facts will be summarized as to each plaintiff seriatim.
Plaintiffs have devoted a large portion of their memorandum of law to what may best be termed as hearsay evidence concerning the alleged misconduct of other members of the Asheville Police Department. These alleged facts have not been taken as true, and the undersigned will not lend credence to such speculative assertions by repeating them herein, mainly because they are not material to the issues now before the court. Plaintiffs' primary claims are for violation of their rights to due process under the North Carolina and United States constitutions. Determining whether due process is violated is a two-step process, which does not include consideration of alleged wrongful acts of others or the severity of punishment they received:
(1) plaintiffs must show a protected property interest; and
(2) plaintiffs must then show the process they received was inadequate.Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532, 538 (1985). Whether others received "better" process or more favorable results from the process is simply not relevant to any portion of the Section 1983 analysis and, for that matter, is not relevant to plaintiffs' RICO claims.
Ultimately, due process, if applicable, is notice and opportunity to be heard. Whether a person was terminated, demoted, reprimanded, or rewarded is not relevant. Disparate-treatment analysis was developed and is useful in Title VII discrimination claims, but has no relevance to Section 1983 due-process claims.
As the state appellate court found in Wuchte v. McNeil, 130 N.C. App. 738 (1998), the "dispute regarding the events leading up to . . . dismissal" are "not material." Id., at 739. On summary judgment, plaintiffs must first establish a property interest in their city employment and then show that the process they received was inadequate. While the process others may have received may be a fact in dispute, it is neither genuine nor material because it is not pertinent to the inquiries under Section 1983 or RICO. "Only disputes over facts that might affect the outcome of the suit under governing law will properly preclude the entry of summary judgment." Anderson, supra, at 248.
B. Leanna Young
Plaintiff Leanna Young resigned her job as an Asheville police officer on October 31, 1997, by submitting a handwritten letter of resignation to the Asheville Police Department. Young resigned shortly after she was told by Internal Affairs Investigator Leroy Lunsford that he had received a complaint relating to a worthless check in the amount of $154.74, which Young had written for her electric bill.
A few weeks earlier, Lunsford had spoken with Young about another complaint he had received from her landlord relating to other worthless checks totaling $400 for payment of her monthly lot rent and trailer rent. Young had faced serious financial problems for months, and they had led to the repossession of her car and ongoing difficulties in paying her bills.
Young knew what to expect from the impending Internal Affairs investigation. In May of 1996 she had delivered a worthless check for $154.36 to the Seven Seas Inn located in Kure Beach, North Carolina. When the Asheville Police Department served an arrest warrant on Young in July 1996, Lunsford investigated. Young admitted the offense and promised it would not happen again. After the investigation, Police Chief Annarino reprimanded Young, required her to send a written apology to the Inn, and suspended her for one day. He also made clear to her that such conduct should not be repeated.
In March 1997, another Internal Affairs investigation was conducted concerning Young's failure to report a motor vehicle accident she had while driving her patrol car. After that investigation, Annarino suspended her for 50 hours and directed her to pay all damages from the accident. He also warned: "You have heard the saying "three strikes and you are out'. You have been given two chances. I hope, like I have discussed with you before, that you learn from this situation . . . ."
When Young learned on October 31, 1997, that she was facing another Internal Affairs investigation for worthless checks, she told Lunsford, "I have had enough of this shit." Saying that she was going to resign her job rather than face another investigation, she wrote out a letter of resignation on the spot and submitted it to the Asheville Police Department.
C. Janet Crisp
Plaintiff Janet Crisp resigned her position as an Asheville police officer on September 29, 1998, by submitting to the Asheville Police Department a letter of resignation she had typed. She also signed and submitted another letter of resignation that was typed for her by someone else.
Crisp resigned during an Internal Affairs investigation about reports that she assaulted another law enforcement officer on two separate occasions. Both incidents involved physical altercations that Crisp admittedly had with Buncombe County Sheriff's Deputy Jonathan Gajdik, her former boyfriend and the father of her youngest child.
The first report related to a fight Crisp had with Deputy Gajdik on August 30, 1998, at her home. According to Crisp, an argument that began in the back yard escalated to a physical struggle in the bedroom when Crisp reached for her duty weapon. The couple wrestled for the gun, and it discharged. Deputy Gajdik then went into the next room, scooped up his two-year-old daughter, and attempted to leave the house. To prevent him from leaving, Crisp grabbed Deputy Gajdik's duty weapon out of the back of his pants, pointed it at his head, and threatened to "blow [his] fucking brains out" if he left the house.
After this incident, Crisp's police powers were suspended, and she turned in her duty weapon. Deputy Gajdik filed a Motion for a Domestic Violence Protective Order. Crisp was placed on administrative leave and referred for counseling and a professional evaluation of her fitness for duty. She was also ordered by Chief Annarino to stay away from Deputy Gajdik.
On September 8, 1998, Crisp met with Annarino and her patrol captain. During that meeting, she admitted that she had a domestic dispute with Deputy Gajdik, but denied that her weapon had discharged. In later statements, she admitted that she lied and admitted that the gun had discharged.
The second report related to a physical altercation Crisp had with Deputy Gajdik on September 24, 1998. According to Crisp, she was in her car and on the way to the bank when she spied Deputy Gajdik in a car with another woman, although he had told Crisp earlier in the day that he was sick. She followed the car around the block until it stopped in front of the Buncombe County Detention Center. Crisp then pulled her car so close to the other vehicle that they came in contact as Deputy Gajdik tried to open the front passenger door to get out. After he got out of the car and the woman drove away, Crisp got out of her car, began yelling and grabbing at Deputy Gajdik, and followed him up the sidewalk into the Detention Center. Once inside, Crisp continued to push and shove Deputy Gajdik, who kept asking her to leave him alone. She grabbed things off his duty belt and tossed his radio into a trash can. According to witnesses, Crisp told Deputy Gajdik words to the effect of "I am going to lose my job over this and if I do you will lose, too."
D. Paul Evington
Plaintiff Paul Evington resigned his job as an Asheville police officer on September 24, 1997, by submitting a signed letter of resignation to the Asheville Police Department. Evington resigned the day after Defendant Lunsford told him that a woman whom Evington had encountered on patrol was making allegations of inappropriate conduct.
During an interview Evington had with Lunsford on September 23, 1997, and in his written statement submitted later that day, Evington admitted the following misconduct. A few weeks earlier, while Evington was on duty in uniform in his patrol car at approximately 5:00 a.m., a woman who was standing on a downtown street corner flagged him down. The woman asked him to give her a ride to meet some friends, and he agreed to do so. In his deposition, he explained why he agreed to this request, saying that it was his duty as an Asheville police officer to protect and serve" the public.
During the trip, she made suggestive statements of a sexual nature, so Evington took her to the Asheville Police Department's substation on Livingston Street, which was unoccupied at that hour. They went to an empty office, where the woman performed oral sex upon Evington. Afterwards, she asked him for $3.00, which he gave her before dropping her off at the corner of South French Broad and Hilliard Streets in downtown Asheville.
E. Scott Gaddy
Plaintiff Scott Alan Gaddy was terminated from his job on January 29, 1999, because he committed the criminal offense of driving under the influence of alcohol. As an Asheville police officer, Gaddy had been assigned for several years to the Department's "STEP" unit, which specialized in the enforcement of traffic laws, including driving while impaired ("DWI").
On Saturday, December 29, 1998, State Trooper C. M. Goodson stopped Gaddy on Interstate 40 for speeding. At that time, Trooper Goodson detected the odor of alcohol about Gaddy. Gaddy admits that he had consumed between 6 and 8 beers over a 3-hour period before he drove his car. His blood alcohol content was .11. Although Gaddy asked Trooper Goodson not to arrest him because he knew it could cost him his job at the Asheville Police Department, he was arrested and charged with DWI. Later, he was convicted in state district court for DWI and for speeding 75 miles per hour in a 60-miles-per-hour zone. He did not appeal those convictions.
Lunsford conducted an Internal Affairs investigation concerning these crimes. Gaddy admitted the charges against him in a statement to Lunsford and again to Annarino at his predisciplinary conference on January 21, 1999. He was offered the opportunity to submit his resignation, but declined, and Annarino terminated him on January 29, 1999. Gaddy appealed his termination, and a full evidentiary hearing was conducted before the Asheville Civil Service Board pursuant to the Asheville Civil Service law. The Civil Service Board upheld the termination, and Gaddy filed a civil action in state superior court requesting a review of the Board's decision. That case is still pending.
F. Rock Edwards
In October 1997, Rock Edwards arrested a suspect on a drug charge. Although Edwards found both drugs and money on the suspect, he only turned in the drugs to the property room at the police department. Edwards kept the cash — an amount in excess of $700 — in his possession.
Several days later, when a fellow police officer called Edwards to ask about the money, Edwards denied seizing any money from the suspect. Seven days after the arrest, when the suspect's girlfriend came to police headquarters demanding the money, Edwards gave her $720 in cash. An Internal Affairs investigation ensued, during which Edwards lied to Annarino and Lunsford about a property sheet he filled out for the cash. Later, he admitted that he had lied.
During 1997, Plaintiff Edwards experienced financial difficulties and had not made his car payments. His wife's car was repossessed some time earlier that year, and his own car was repossessed in November 1997, shortly before he was fired. Six months later, he filed for bankruptcy.
After the Internal Affairs investigation was concluded, Annarino fired Edwards. Edwards appealed, and a full evidentiary hearing was conducted before the Civil Service Board. Both Edwards and the City were represented by counsel at the hearing, which included testimony from eight witnesses and the admission of 54 documentary exhibits. The Civil Service Board upheld the termination. Edwards then filed a civil action in the state superior court requesting a review of the Board's decision. Honorable Ronald K. Payne, North Carolina Superior Court Judge, dismissed that case on September 3, 1998.
After Edwards was fired, the City received a request for information from the Criminal Justice Standards Commission of the North Carolina Department of Justice. The requested information concerning Edwards was provided by Defendant Lunsford on behalf of the City in recognition of the Commission's authority to investigate possible violations of Commission rules. N.C.A.C. 9A.0201 et seq. N.C. Gen. Stat. § 160A-168(c)(5). The Commission revoked Edwards's lawenforcement certification, and Edwards appealed. A full evidentiary hearing was held on April 8, 1999, before Administrative Law Judge Samuel Chess, Jr., who upheld the revocation of Edwards's certification. On appeal of that decision, the Full Commission upheld Judge Chess. Edwards recently abandoned any further appeal of the decision by dismissing his Petition for Review.
G. The Conduct of William R. Annarino and Leroy Lunsford
In their responsive brief, plaintiffs state that it is not their misconduct which is at issue in this suit, but the alleged misconduct of Defendants Annarino and Lunsford in securing plaintiffs' terminations. Plaintiffs contend that federal and state constitutional rights were violated when Defendants Annarino and Lunsford took actions to induce plaintiffs Young, Crisp, and Evington to resign their employment and did so without according them their rights to a pre-disciplinary conference, as mandated by City of Asheville Ordinance No. 1864. These plaintiffs also allege that their resignations were secured through threats and misstatements made by defendants.
Plaintiff Gaddy alleges that he was terminated from his employment following a pre-disciplinary conference of which he was not given the notice mandated by City of Asheville Ordinance No. 1864. Plaintiff Edwards alleges that in connection with his termination as a law enforcement officer, the defendants published defamatory statements about him.
The complaint also includes state-law claims for breach of contract, libel and slander, negligent retention, and wrongful discharge.
IV. Procedural and Substantive Due Process Claims Under the United States and North Carolina Constitutions
1. Introduction
Plaintiffs contend that their rights secured under the fourteenth amendment were violated by defendants, who allegedly failed to afford plaintiffs due process in securing their resignations or in terminating their employment. Plaintiffs' claims will be addressed in the context of both procedural and substantive due process.
2. Procedural Due Process
Due process usually requires a pre-deprivation hearing where the loss of property or liberty results from established state procedures. Logan v. Zimmerman Brush Co., 455 U.S. 422 (1982). A pre-deprivation process cannot reasonably be required, however, where loss results from a random, unauthorized act of an employee who is a state actor, Parratt v. Taylor, 451 U.S. 527 (1981), overruled on other grounds, Daniels v. Williams, 474 U.S. 327 (1986); in which event due process is satisfied by the availability of adequate state post-deprivation remedies, Parratt, at 541. The analysis turns on whether the alleged deprivation is foreseeable and will occur at a predictable point, such that pre-deprivation safeguards would be of use in preventing the kind of deprivation alleged. Zinermon v. Burch, 494 U.S. 113 (1990); Fields v. Durham, 909 F.2d 94 (4th Cir. 1990), cert. denied, 498 U.S. 1068 (1991). Where these requirements are met, and where the deprivation was effected by an employee authorized to effect such deprivation and responsible for initiating procedural safeguards, the Parratt rule has no application.Zinermon v. Burch, supra, at 136-38.
3. Substantive Due Process
A substantive due-process violation generally requires a showing of conduct that shocks the conscience. Rochin v. California, 342 U.S. 165, 173 (1952). Such a violation will be found only where an abuse of governmental power is so egregious or outrageous that no state post-deprivation remedy is adequate to preserve the constitutional guarantees of freedom from such conduct, regardless of the procedures afforded. Temkin v. Frederick County Comm'rs, 945 F.2d 716 (4th Cir. 1991), cert. denied, 60 U.S.L.W. 3578 (U.S. 1992).
In this case, plaintiffs appear to contend that substantive due process was violated because Defendant Annarino secured the resignations in lieu of termination through use of threats and misstatements and that such behavior shocks the conscience. The Supreme Court, however, has held, as follows:
Where a particular amendment "provides an explicit textual source of constitutional protection" against a particular sort of government behavior, "that Amendment, not the more generalized notion of "substantive due process' must be the guide for analyzing these claims."Albright v. Oliver, 510 U.S. 266, 273 (1994) (quoting Graham v. Connor, 490 U.S. 386, 395 (1989)). Substantive due process does not come into play where a plaintiff's claim is rooted in an "explicit textural source of constitutional protection." Id.
4. Discussion
The linchpin to plaintiffs' due-process claims is whether plaintiffs had protectable property interests in continued employment with the City of Asheville. Wuchte v. McNeil, supra; Cleveland Bd. of Educ. v. Loudermill, supra; Soles v. City of Raleigh Civil Service Comm., 345 N.C. 443, 480 S.E.2d 685, reh'g denied, 345 N.C. 761 (1997). In Board of Regents v. Roth, 408 U.S. 564 (1972), the Supreme Court held, as follows:
[In order to possess a property interest in public employment,] a person clearly must have more than an abstract need or desire for it. He must have more than a unilateral expectation of it. He must, instead, have a legitimate claim of entitlement to it.Id., at 577. While a property interest in employment can be created by statute, ordinance, or express or implied contract, "the sufficiency of the claim of entitlement must be decided by reference to state law."Bishop v. Wood, supra, at 344. Where procedural rights are created by a municipality, those procedural rights, standing alone, do not, in and of themselves, create substantive property rights protected by the fourteenth amendment. Cleveland Bd. of Educ. v. Loudermill, supra, at 541 (""Property' cannot be defined by the procedures provided for its deprivation any more than can life or liberty"). See Beckham v. Harris, 756 F.2d 1032, 1037 n. 8 (4th Cir.), cert. denied, 474 U.S. 903 (1985) (disciplinary guidelines in department personnel manual that an employee could be fired only for violation of specified conduct was insufficient to establish a property interest in continued employment).
In North Carolina, employment is presumed to be "at-will," absent a contract establishing a definite period of employment, a statute, or an ordinance restricting an employee's discharge. Pittman v. Wilson County, 839 F.2d 225, 227 (4th Cir. 1988).
In this case, plaintiffs have tendered enabling legislation adopted by the North Carolina General Assembly, which created the Asheville Civil Service Department. The enabling legislation provides that the Civil Service Board will create rules and procedures in which an employee may be discharged or reduced in rank upon proof that such action is "justified." Plaintiffs' Ex. 2, 1977 N.C. Sess. Laws, c. 415, §§ 3-4. The City of Asheville has created the "City of Asheville Personnel Policy," which provides that prior to disciplinary action, including termination, employees of the City of Asheville must be afforded a pre-disciplinary conference with notice. Plaintiffs argue that the enabling act, the city ordinance, and the personnel policy, when considered together, create a protectable property interest in continued city employment.
While a few particular policies allowing for a grievance procedure and for predisciplinary conferences prior to termination of employment have been enacted as ordinances by the City of Asheville, it is undisputed that the "City of Asheville Personnel Policy" has not been reduced to an ordinance. To determine whether plaintiffs have a property interest in continued employment based upon such acts, ordinances, and manuals, the undersigned has turned to state law. See Cleveland Bd. of Educ. v Loudermill, supra, at 538.
In Wuchte v. McNeil, supra, at 741, the North Carolina Court of Appeals held, as follows:
An employee whose employment would otherwise be at-will may gain a recognizable interest in continued employment where such a right is granted by ordinance or implied contract. Employee manuals or policy memoranda may form the basis of such a right if they are expressly included in the employee's employment contract, or in the case of local governments, enacted as ordinances.
Plaintiff's reliance on the personnel policies discussed above as creating a right to procedural due process is misplaced. Nothing else appearing, unilaterally promulgated employee manuals or personnel memoranda do not create a property interest in continued employment.
Likewise, in Walker v. Westinghouse Elec. Corp., 77 N.C. App. 253, 259 (1985), disc. rev, denied, 315 N.C. 597, 341 S.E.2d 39 (1986), the appellate court found ""strong equitable and social policy reasons militating against allowing employers to promulgate for their employees potentially misleading personnel manuals while reserving the right to deviate from them at their own caprice," but found that employers are free to disregard such provisions. In Howell v. Town of Carolina Beach, 106 N.C. App. 410, 417 (1992) — a case strikingly similar to this action—a protectable property interest was found where the personnel manual was adopted as an ordinance. Creation of a property right in municipal employment hinges in North Carolina on not just the creation of a personnel policy providing the employee with such expectation, but also the adoption of such policy by the municipality through an ordinance. The court cannot find that the City of Asheville Personnel Policy as a whole, or parts that would create a legitimate expectation of continued municipal employment, have been adopted as an ordinance. Applying North Carolina law to facts presented, the undersigned will recommend that plaintiffs' due-process claims be dismissed with prejudice for lack of a protectable property interest. No substantive due-process claim exists based on this record.
5. Edwards's Due-Process Claim Based Upon Defamation
While apparently conceding that his claim for defamation is time-barred, Plaintiff Edwards also argues that the defamation forms a basis for a separate claim of denial of due process, inasmuch as his interest in future employment has been jeopardized by statements made by defendants. He argues that such Section 1983 claim is governed by a three-year period of limitations. Read in a light most favorable to Plaintiff Edwards, his evidence discloses that the individual defendants made statements to Jeff Slagle, the field representative for the North Carolina Criminal Justice Education and Training Standards Commission. Based upon such statements, Investigator Slagle concluded that the money Plaintiff Edwards withheld from evidence was connected to a sex-for-drugs scheme. Slagle depo., p. 103-04.
There is no federal statute of limitations for Section 1983 actions, and state statutes of limitations apply. Burnett v. Grattan, 468 U.S. 42 (1984). State statutes governing personal injury apply to all Section 1983 claims, Wilson v. Garcia, 471 U.S. 261 (1985); and where multiple limitations periods exist for personal injuries (such as in North Carolina) the general or residual period applies, Owens v. Okure, 488 U.S. 235 (1989), which is three years. N.C. Gen. Stat. § 1-52 (5); National Advertising Co. v. City of Raleigh, 947 F.2d 1158 (4th Cir. 1991), cert. denied, 60 U.S.L.W. 3782 (U.S. 1992).
A person has a protectable property right in his or her ability to attain employment in the future. Where a state actor deprives a person of such reputational right, notice and an opportunity to be heard are required. Paul v. Davis, 424 U.S. 693, 710 (1976); Robertson v. Ropers, 679 F.2d 1090 (4th Cir. 1982). The essential elements of a viable due-process claim based upon defamation not only encompass notice and opportunity to respond, but publication and falsity. See Presnell v. Pell, 298 N.C. 724 (1979). Like defamation, a qualified privilege must exist as a defense to the constitutional sibling; otherwise, legitimate governmental interests would be chilled. In this case, defendants are not accused of spreading false accusations to the news media. See Jackson v. Long, 102 F.3d 722 (4th Cir. 1996). Rather, the alleged act of defamation was in responding to a lawful inquiry made by the North Carolina Criminal Justice Education and Training Standards Commission. A qualified privilege to defamation exists where there is shown "good faith, an interest to be upheld, a statement limited in its scope to this purpose, a proper occasion and publication in a proper manner and the proper parties only." Lee v. Lyerly, 120 N.C. App. 250 (1995); Averitt v. Rozier, 119 N.C. App. 216 (1995). The allegedly slanderous statements by defendants were made in response to the Standards Commission and only upon the Commission's request made pursuant to its legal duty to regulate and certify police officers. To the extent Edwards is arguing that he was not afforded notice and an opportunity to object to the statements made in response to such inquiry, his complaint is with the State of North Carolina, because it is the Standards Commission's investigation, not the city's, and the parameters of such investigation and conclusions therefrom drawn by the Commission are governed by state law, not city ordinance. Finally, Edwards has presented no evidence that the statements were untrue.
V. North Carolina Law-of-the-Land Claims
Plaintiffs have also alleged claims for violation of due-process guarantees afforded under the North Carolina Constitution's "Law-of-the-Land" provisions. Those rights are coextensive with federal rights to due process, and the undersigned will recommend that summary judgment be granted to defendants on such claims for the same reasons as it was recommended as to the federal dueprocess claims.
VI. RICO Claims
On defendants' Motion for Summary Judgment, plaintiffs' burden is to show that each defendant conducted an enterprise through a pattern of racketeering activity and that plaintiffs were injured in their business or property as a proximate result of such conduct. Palmetto State Medical Center. Inc. v. ODeration Lifeline, 117 F.3d 142, 148 (4th Cir. 1997). Plaintiffs allege that their resignations and terminations were procured through extortion violative of the Hobbs Act— 18, United States Code, Section 1951. Under the Hobbs Act, extortion is defined as the obtaining of property from another, with his consent, induced by wrongful use of actual or threatened force, violence, or fear, or under color of official right. 18 U.S.C. § 1951 (b)(2). As discussed above, plaintiffs have no property interest in continued employment, and such claim must fail as a matter of law.
Even if plaintiffs could show injury to their business or property, they have failed to show a pattern of racketeering activity. To maintain a RICO action, plaintiffs must allege predicate offenses amounting to or threatening racketeering activity over a substantial period of time and that such predicate acts show continuity of racketeering activity. RICO prohibits participation in or benefit from enterprises involving "a pattern of racketeering activity." 18 U.S.C. § 1961 et seq.
The determination of what constitutes a pattern of racketeering activity is "commonsensical, not formulaic." Menasco. Inc. v. Wasserman, 886 F.2d 681, 684 (4th Cir. 1989). In order to allege a "pattern" of racketeering activity, a plaintiff must allege a "continuity" of racketeering offenses, H.J. Inc. v. Northwestern Bell, 492 U.S. 229, 239-42 (1989); and in turn, continuity is properly alleged through predicate acts that either amount to or threaten long-term racketeering activity, id., at 240-41. The requirement of continuity is a reflection of the harm which Congress intended to address—long-term criminal conduct. Five factors are used to determine whether sufficient continuity has been alleged:
(1) the number and variety of predicate acts;
(2) the length of time over which they were committed;
(3) the number of putative victims;
(4) the presence of separate schemes; and
(5) the potential for multiple distinct injuries.
Parcoil Corp. v. Nowsco Well Service, Ltd., 887 F.2d 502, 504 (4th Cir. 1989). "Closed-ended" continuity is where a series of related racketeering offenses extend over a substantial period of time. H.J. Inc. v. Northwestern Bell, supra, at 240-41. "Open-ended" continuity requires racketeering offenses that, by their very nature, threaten repetition or continuation of racketeering activity over a substantial period. Id. Current case law provides that anything less than a year is generally not a "substantial period of time" demonstrating continuity.
Predicate acts extending over a few weeks or months and threatening no future criminal conduct do not satisfy this [continuity] requirement . . . .Id., at 242.
In this case, plaintiffs have attempted to establish a RICO claim by alleging a pattern or practice of predicate acts that would be violative of the Hobbs Act. They, however, have presented no evidence that defendants committed such acts of alleged "extortion" for personal gain. Instead, through a recitation of mostly hearsay allegations lodged against fellow officers, plaintiffs have attempted to show disparate treatment. Read in a light most favorable to plaintiffs, they present evidence that they were treated differently by defendants because they failed to curry favor with the Chief and that their resignations were secured with threats and misstatements.
The undersigned has taken as true the factual allegations of the complaint, but not the legal conclusions that the acts alleged are predicate offenses. Plaintiffs' concept that a Hobbs Act violation — extortion — can occur where an employer offers the option of resignation in lieu of termination, is troubling to the undersigned. Without doubt, plaintiffs have shown that defendants could summon enormous pressure to secure a resignation. In United States v. Dowdy, 479 F.2d 213 (4th Cir.), cert. denied, 414 U.S. 823 (1973), the Court of Appeals for the Fourth Circuit held, as follows:
We reject defendant's argument that . . . consent was not freely and voluntarily given since it was extended under the pressure of a potential indictment and in return for a promise of immunity.Id., at 229. A waiver of rights may be voluntary even where it was given under tremendous pressure. In this case, plaintiffs were police officers supposedly trained in dealing with stressful situations and pressure. It's a hard argument to make that these officers did not know what rights they had in regards to their jobs and their police certification. The undersigned cannot find that the personnel actions taken in these matters amount to predicate extortion offenses under the Hobbs Act.
Finally, plaintiffs' burden is to come forward with evidence of "a threat of continued criminal activity." H.J. Inc. v. Northwestern Bell, supra, at 239. At most, plaintiffs have shown that defendants were not evenhanded in meting out discipline. The undersigned, however, cannot find that continued criminal racketeering activity has either been alleged or shown. Unlike the multiple schemes — gaming, prostitution, theft, and strong-arm extortion — in which corrupt organizations invest their efforts that would be necessary to provide the economic fuel to keep traditional corrupt organizations going, plaintiffs herein have alleged that defendants have engaged in only one scheme — to terminate plaintiffs' employment as Asheville police officers. One scheme has been alleged; other factors discussed above do not appear to be relevant.
Having conducted both a qualitative and quantitative analysis of the factors, the undersigned concludes that plaintiffs have not alleged predicate offenses amounting to or threatening racketeering activity over a substantial period of time. The predicate acts plaintiffs allege are insufficient to show continuity of racketeering activity. As discussed above, this court has real concerns that plaintiffs' factual proffer would even allege predicate offenses. Putting such doubt aside, the undersigned concludes that the evidence presented does not raise the specter of future racketeering activities RICO was intended to quash. All factors point to a conclusion that neither the predicate acts nor the duration and continuity of the scheme implicate the narrow category of organized, ongoing criminal conduct which RICO was designed to fight. For such reasons, the undersigned will recommend that plaintiffs' federal RICO claims be dismissed. Inasmuch as federal RICO is coextensive with North Carolina RICO, the same recommendation would apply equally to the state RICO claim
VII. Ties to Organized Crime Under North Carolina RICO
In the event the district court rejects such recommendation, the undersigned has also considered defendants' arguments as to whether an allegation of ties to organized crime is required under North Carolina law.
Defendants argue that North Carolina RICO was intended to apply to entities engaged in or tied to organized crime. Chapter 75D-2(c) of the North Carolina General Statutes provides, in pertinent part, as follows:
It is not the intent of the General Assembly that [the North Carolina RICO] apply to isolated and unrelated incidents of unlawful conduct but only to an interrelated pattern of organized unlawful activity, the purpose or effect of which is to derive pecuniary gain. Further, it is not the intent of the General Assembly that legitimate business organizations doing business in this State, having no connection to, or any relationship or involvement with organized unlawful elements, groups or activities be subject to suit under the provisions of [the North Carolina RICO].
At the time North Carolina RICO was passed, the General Assembly intended it to mirror federal RICO, and the United States Supreme Court had held that "ties to criminal activity" need not be alleged in order to state a federal civil RICO claim. H.J., Inc. v. Northwestern Bell, supra, at 248. To that end, the undersigned finds that failure to allege a tie to organized crime, in and of itself, is not fatal to an North Carolina RICO claim.
VIII. Edwards's Defamation Claim
This claim is procedurally barred for Edwards's failure to bring it within the one-year period of limitation. Even if not so barred, defendants have properly pleaded and unequivocally proved qualified privilege, as discussed supra. Therefore, the undersigned will recommend that this claim be dismissed.
IX. Supplemental Claims for Breach of Contract, Libel and Slander, Negligence, and Wrongful Discharge
Where the original jurisdiction of the federal court is invoked, as it was here,
the district courts shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution. Such supplemental jurisdiction shall include claims that involve the joinder or intervention of additional parties.28 U.S.C. § 1367 (a). Where the court dismisses all claims over which the court has original jurisdiction, Section 1367(c) provides for dismissal of the supplemental claims in the discretion of the district court. The undersigned would, therefore, recommend that any supplemental state-law claims that remain be dismissed without prejudice as to refiling in an appropriate state forum.
In the interest of judicial economy, the undersigned has made recommendations as to plaintiffs' state constitutional and statutory claims, which are coextensive with the mirror federal claims. In addition, the undersigned has entered a recommendation as to the defamation claim, inasmuch as such claim was substantively addressed in the Section 1983 defamation analysis.
RECOMMENDATION
IT IS, THEREFORE, RESPECTFULLY RECOMMENDED that defendants' Motion for Summary Judgment be ALLOWED in part and DENIED in part, as discussed above.
The parties are hereby advised that, pursuant to 28, United States Code, Section 636(b)(1)(C), written objections to the findings of fact, conclusions of law, and recommendation contained herein must be filed within ten (10) days of service of same. Failure to file objections to this Memorandum and Recommendation with the district court will preclude the parties from raising such objections on appeal. Thomas v. Arn, 474 U.S. 140 (1985), reh'g denied, 474 U.S. 1111 (1986); United States v. Schronce, 727 F.2d 91 (4th Cir.), cert. denied, 467 U.S. 1208 (1984).
This Memorandum and Recommendation is entered in response to defendants' Motion for Summary Judgment (#13).
This 26th day of April, 2000.