Priscilla Edwards v. Marin Park, Inc., a California Corporation Marin Mobilehome Park Doris Bertram, Individually and as Personal Representative of George Bertram, Deceased Carole Holley John Kidd Connie Kidd

Citations: 356 F.3d 1058; 57 Fed. R. Serv. 3d 812; 2004 U.S. App. LEXIS 1083Docket: 06-1050

Court: Court of Appeals for the Ninth Circuit; January 25, 2004; Federal Appellate Court

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Priscilla Edwards filed an appeal against Marin Park, Inc. and several associated defendants in the United States Court of Appeals for the Ninth Circuit, concerning her allegations of harassment and retaliation stemming from her tenancy in a mobile home park in California. The appeal, heard on December 5, 2003, challenges the imposition of sanctions for her refusal to amend her complaint and clarifies the pleading standards for discrimination claims under the Fair Housing Act (FHA).

Edwards has resided in the Marin Park development since 1992 and claims she received unjustified pre-eviction notices, termed "7 Day Legal Notices," starting in January 1999, which she characterized as fraudulent and oppressive. Despite her written complaints to park management regarding these notices, she did not substantiate her allegations. After initially suing in state court, she dropped the complaint, believing the situation had improved. However, upon dismissal, she alleges that harassment resumed immediately.

In July 2001, Edwards raised concerns about unsafe living conditions to state officials, after which she was offered a less favorable lease renewal. She subsequently filed a federal lawsuit asserting multiple claims, including retaliation under the FHA, mail fraud under RICO, constitutional violations, common-law nuisance due to disrepair, and intentional infliction of emotional distress.

Defendants filed a motion to dismiss all claims under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. Edwards, after acquiring legal representation, secured an extension to respond. On July 25, 2002, the district court dismissed the Fair Housing Act (FHA) retaliation claim without leave to amend, stating that Edwards did not allege engagement in any 'protected activity' under the FHA, particularly noting that protesting unsafe living conditions does not qualify as such. The RICO claim was dismissed but allowed for amendment to meet the specificity requirements of Federal Rule of Civil Procedure 9(b). Constitutional claims were also dismissed since none of the defendants were state actors; however, Edwards could amend with potentially valid state constitutional claims against private parties. The nuisance and emotional distress claims were dismissed with prejudice, due to failure to meet statutory notice requirements and insufficiently outrageous conduct, respectively.

The court's dismissal of the RICO claim provided a deadline of August 2, 2002, for filing an amended complaint, warning that failure to do so would lead to dismissal with prejudice. Instead of amending, Edwards filed an "Election to Stand Upon the Sufficiency of Amended Complaint Pleadings" to expedite an appeal, which the court interpreted as a refusal to amend. Considering the factors from Ferdik v. Bonzelet, the court dismissed the complaint with prejudice for noncompliance with its order and entered judgment for the defendants.

Edwards appealed the dismissals of the FHA and RICO claims. The appellate review of the FHA claim was conducted de novo, emphasizing that dismissal under Rule 12(b)(6) is appropriate only when it is clear that no set of facts could support the claim. The appeal resulted in a reversal of the FHA claim dismissal but an affirmation of the RICO claim dismissal. The appellate court also addressed the state-law claims briefly.

Standards for pleading discrimination claims align with the relaxed notice pleading standard of Federal Rule of Civil Procedure 8(a), requiring only a "short and plain statement" that provides fair notice of the claim. The Supreme Court in Swierkiewicz v. Sorema N.A. overruled the Second Circuit's requirement to establish a prima facie case at the dismissal stage, emphasizing that this standard is evidentiary, not a pleading requirement. Thus, failure to present a prima facie case does not justify dismissal at the outset, although it may impact outcomes at summary judgment. This reasoning extends beyond employment discrimination to other claims, including Fair Housing Act (FHA) claims.

In the context of Edwards’s amended complaint, the allegations of retaliation for engaging in protected acts related to fair housing conditions, particularly affecting women, were outlined. The complaint included a letter to California officials highlighting uneven enforcement of housing codes. The district court dismissed the claim, stating that Edwards did not specify her engagement in a protected activity, thereby imposing a standard exceeding mere notice, contrary to the principles established in Swierkiewicz.

Edwards's allegations under the Fair Housing Act (FHA) are deemed sufficient to withstand a motion to dismiss, focusing on retaliation rather than discrimination. The FHA prohibits discrimination in housing based on various factors and makes it unlawful to intimidate or interfere with individuals exercising their rights under the Act. While the district court dismissed Edwards's claims related to gender discrimination as irrelevant, it acknowledged that Edwards presented a plausible claim that Marin Park attempted to intimidate her for aiding other women tenants against sex discrimination. Edwards contends that she was specifically targeted when denied a long-term lease while other tenants were offered one, indicating a retaliatory motive related to her activism.

The dismissal of her FHA claim under Rule 12(b)(6) is therefore found to be improper. Regarding Edwards's RICO claim, the district court dismissed it under Rule 41(b) as a sanction for her failure to amend the complaint, a decision the court deemed an abuse of discretion. Dismissal under Rule 41(b) is reserved for extreme circumstances, and Edwards's decision not to amend her complaint was appropriate. She prioritized appealing six claims over revising the seventh, influencing her choice to keep the RICO claim as initially pled, especially given the district court's warning that an amended claim would face close scrutiny under Rule 11.

A plaintiff can secure an appealable final judgment by filing a written notice of intent not to amend their complaint, as established in WMX Technologies. In this case, Edwards opted to expedite proceedings by asserting the sufficiency of her RICO claim without amending her complaint, a decision that should have led the district court to enter a final judgment dismissing all claims with prejudice, allowing for an appeal. The district court's dismissal was mistakenly influenced by the Yourish precedent, which suggests a Rule 41(b) dismissal is necessary when a plaintiff fails to amend after being granted leave. However, a closer reading of Yourish indicates it does not require such a dismissal when a plaintiff elects not to amend. Yourish involved a plaintiff who failed to amend within a designated timeframe after the court's order, leading to a Rule 41(b) dismissal for noncompliance. The Ninth Circuit upheld this dismissal, viewing it as a failure to comply with a court order. This approach raises concerns, as a plaintiff's choice not to amend should not be seen as disobedience. The earlier case, Ferdik, upheld a similar dismissal but applied five factors to determine whether the district court acted within its discretion. WMX Technologies, filed later, creates tension with Ferdik's broader interpretation, and it is the responsibility of the court to reconcile these cases to prevent conflicts within the circuit.

Yourish and Ferdik are applicable when a plaintiff fails to respond to a court's opportunity to amend or dismiss a complaint, leading to potential sanctions under Rule 41(b). In such cases, if a plaintiff does not act, a dismissal can be justified due to wasted judicial resources. However, if a plaintiff explicitly communicates a decision not to amend, this does not constitute disobedience to a court order, and the dismissal should transition from a Rule 12(b)(6) to a final judgment rather than a Rule 41(b) dismissal, which is a sanction for noncompliance. The two types of dismissals differ significantly: Rule 41(b) dismissals are reviewed for abuse of discretion based on sanction propriety, while Rule 12(b)(6) dismissals are subject to de novo review concerning the adequacy of claims. The court erred by converting a Rule 12(b)(6) dismissal into a Rule 41(b) sanction. 

Regarding the initial dismissal of the RICO claim, the complaint must meet Rule 9(b)'s specificity requirements for fraud allegations, necessitating details about the time, place, content of misrepresentations, and identities involved. While certain details were provided, the complaint lacked specific content regarding the fraudulent "7 Day Legal Notices" and did not attach them, leading to a failure in satisfying Rule 9(b).

The dismissal of Edwards's RICO claim is affirmed due to failure to state a valid claim, with no further opportunity to amend granted, as Edwards had previously declined to do so. Regarding Edwards's state law claims of emotional distress and nuisance, the court notes that the nuisance claim was not adequately addressed in her opening brief, leading to its dismissal on appeal. Although Edwards's emotional distress claim was more than a mere footnote, it lacked sufficient argumentation and legal citation to avoid waiver. Nevertheless, the court chose to address the emotional distress claim due to Marin Park’s reply brief discussing it.

Upon de novo review, the court affirms the dismissal of the emotional distress claim. Edwards alleged severe physical and psychological issues resulting from Marin Park's actions, which included conducting inspections and sending documents compliant with California law. However, the court finds that these actions do not rise to the level of "outrageous conduct" required for a claim of intentional infliction of emotional distress. Therefore, the emotional distress claim is dismissed.

In conclusion, the court reverses the dismissal of Edwards's Fair Housing Act (FHA) claim, affirms the dismissal of the RICO claim and the emotional distress claim, and remands for further proceedings, with all parties bearing their own costs on appeal. A separate disposition addresses Marin Park's cross-appeal regarding attorney fees.

Edwards's letter to Governor Gray Davis and state legislators is dated July 18, 2001, while Marin Park's lease offer, erroneously dated August 1, 2001, was postmarked July 21, 2001. Rule 9(b) mandates that claims of fraud or mistake must be detailed precisely. A plot leased for mobile home placement qualifies as a "dwelling" under the Fair Housing Act (FHA), 42 U.S.C. 3602(b). Edwards contends that the district court incorrectly dismissed her state-law claims with prejudice, despite the court's initial order indicating that failure to amend would lead to a dismissal without prejudice for those claims. However, Edwards misinterpreted the court's ruling; the dismissal order clarified that if she did not amend her RICO claim, there would be no federal claims remaining, resulting in a dismissal for lack of subject matter jurisdiction under 28 U.S.C. 1367(c)(3). The court specified that any remaining state-law claims would be dismissed without prejudice to later re-filing in state court. Importantly, the court dismissed all current state-law claims without leave to amend but permitted the addition of state constitutional claims, accurately reflecting the implications of 1367.