Gregory G. Schultz v. John Ashcroft , 174 F. App'x 534 ( 2006 )

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________ FILED
U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
Nos. 05-12282 and 05-13807
April 5, 2006
Non-Argument Calendar THOMAS K. KAHN
________________________ CLERK
D. C. Docket No. 02-02216-CV-T-30EAJ
GREGORY G. SCHULTZ,
on behalf of himself and all others similarly
situated,
Plaintiff-Appellant,
PAUL MILUS, et al.,
Plaintiffs,
versus
JOHN ASHCROFT, individually, et al.,
Defendants,
MARY M. DELANO, individually,
JOHN DOES, 2 unknown agents of the Florida Dept.
of Law Enforcement,
JOHN DOE, 1 unknown agent of the Florida
Department of Banking and Finance,
GARY D. LIPSON, individually,
JORWORSKI ROBINSON, individually, et al.,
Defendants-Appellees.
________________________
Appeals from the United States District Court
for the Middle District of Florida
_________________________
(April 5, 2006)
Before CARNES, MARCUS and PRYOR, Circuit Judges.
PER CURIAM:
In these appeals, which we sua sponte consolidate, Gregory G. Schultz, an
attorney proceeding pro se, appeals the district court’s grant of summary judgment
in favor of defendants Mary M. Delano, Robert Cornell, J. Jeffrey Deery, Albert
Gregory Melchior, Jorworski Robinson, Michael Deleon, Rachelle Des Vaux
Bedke, and Michael Runyon in this civil rights action filed pursuant to 42 U.S.C.
§ 1983. Schultz also appeals the award of prevailing-party costs to Delano,
Melchior, and Cornell, pursuant to Federal Rule of Civil Procedure 54(d)(1) and 28
U.S.C. § 1920. The district court entered summary judgment in favor of (1)
defendant Deery on Count 1 after finding that Deery was not a state actor; (2)
defendants Delano and Melchior on Count 1 after determining that they were
entitled to qualified immunity; and (3) defendants Delano, Cornell, Robinson,
Deleon, Bedke, and Runyon on Count 2 based on Schultz’s failure to present any
evidence establishing the existence of a conspiracy. After careful review, we
affirm.
I.
We review de novo the district court’s grant of summary judgment, applying
the same standard as the district court and viewing all evidence and factual
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inferences reasonably drawn from the evidence in the light most favorable to the
nonmoving party. See Burton v. Tampa Hous. Auth., 271 F.3d 1274, 1276-77
(11th Cir. 2001). Summary judgment is appropriate if the pleadings, depositions,
answers to interrogatories, and admissions on file, together with the affidavits, if
any, show there is no genuine issue as to any material fact and that the moving
party is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56. A party
moving for summary judgment has the initial burden of showing that there is no
genuine issue of material fact. See Eberhardt v. Waters, 901 F.2d 1578, 1580 (11th
Cir. 1990). Once the moving party meets its burden, the burden shifts to the
nonmoving party to come forward with specific facts showing that there is a
genuine issue for trial. See Bailey v. Allgas, Inc., 284 F.3d 1237, 1242-43 (11th
Cir. 2002). The nonmoving party may not rest upon mere allegations or denials of
the pleadings, but must set forth specific facts showing that there is a genuine issue
for trial. See Eberhardt, 901 F.2d at 1580.
We review a district court’s award of costs to a prevailing party for abuse of
discretion. See Chapman v. AI Transp., 229 F.3d 1012, 1039 (11th Cir. 2000)(en
banc).
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II.
The parties are familiar with the relevant facts and we only summarize them
here. This action arose out of an investigation, which was conducted by the
Florida Department of Banking and Finance (“FDBF”), into alleged violations of
state and federal securities laws. In connection with its investigation, the FDBF
sought and obtained a temporary injunction (“Injunction”) against eleven
corporations, including seven companies collectively known as “the Stonehenge
Groups,” and four relief defendants, including Schultz. The Injunction ordered the
defendant corporations, by and through the relief defendants, to grant the FDBF
and Gary D. Lipson,1 who was appointed as Receiver, and their agents and
representatives unfettered access to the following:
all property, business premises, papers, records, books of account,
computer records and computer-stored data and computer terminals
and equipment, files, documents, computer data backups, or other
things of or pertaining in any way to the subject matter of this
litigation (of whatever nature and wherever situated) in their
possession or under their control, and such access shall include the
right to access and to inspect and to copy in any form such papers,
records, books of account, computer records and computer stored
data, files, documents, and computer data backups.
On the day the Injunction was issued, Defendants Delano, Lipson, and
Melchior entered an office space that was shared by several entities, including: (1)
1
Lipson was named as a defendant in Count 1, but the district court dismissed him from the
action because he was never served. Schultz does not appeal that decision.
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the Stonehenge Groups, (2) two companies that were not listed as defendant-
corporations in the injunctive order, and (3) the law offices of Schultz &
Associates. Schultz alleged that Delano and Lipson seized a computer tape labeled
“Schultz & Associates Legal Files,” which contained attorney-client privileged
information that was not within the scope of the Injunction. Schultz also asserted
that these defendants destroyed computer files when they attempted to access the
computer server without the appropriate passwords, despite being warned that
doing so could damage the computers. Schultz further alleged that these
defendants conspired with others to use the seized information to add additional
defendant-corporations to the scope of the Injunction.
Schultz filed this action against the following defendants, among others:
(1) Mary M. Delano, a Financial Investigator for the FDBF; (2) Robert Cornell, an
employee of the State of Florida; (3) J. Jeffrey Deery, a private attorney; (4) Albert
Gregory Melchior, FDBF legal counsel; (5) Jorworski Robinson, a Postal Inspector
for the United States Postal Service; (6) Michael Deleon, a Special Agent for the
Federal Bureau of Investigation; (7) Rachelle Des Vaux Bedke, an Assistant
United States Attorney (“AUSA”); and (8) Michael Runyon, an AUSA. In Count
1, Schultz alleged, inter alia, that Delano, Lipson, Melchior, and Deery (in his
capacity as counsel for Receiver Lipson) violated due process and state law when
they participated in the seizure of records and destroyed computer files that were
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beyond the scope of the Injunction. In Count 2, Schultz asserted that AUSA
Runyon, AUSA Bedke, Special Agent Deleon, and Postal Inspector Robinson
conspired with Delano and Cornell to violate Schultz’s constitutional rights.2
Schultz sought damages in excess of $100 million dollars.
Defendants Delano, Cornell, and Melchior filed motions for summary
judgment in which they asserted that they were entitled to qualified immunity from
suit under § 1983. They also urged that Schultz’s conspiracy allegations were
insufficient to state a claim under § 1983. Delano, Cornell, and Melchior
submitted several depositions in support of their summary judgment motions.
From these affidavits, we glean the following additional facts, which, in large part,
were undisputed by Schultz.
Schultz provided legal counsel to the Stonehenge Groups and served as an
officer for one of them. He also was a principal owner of one of the defendant-
corporations listed in the Injunction and the sole shareholder and president of two
others. Schultz and his law practice, Schultz & Associates, shared office space, a
telephone system, a bookkeeper, overhead expenses, and computer equipment with
several defendant-companies, including the Stonehenge Groups, and two
2
Specifically, Schultz alleged that Special Agent Deleon omitted information from his
affidavit in support of an arrest warrant. Schultz also contended that Deleon, Postal Inspector
Robinson, Delano, and Cornell agreed not to disclose information about the destruction of the
computer server, and that Deleon, AUSA Runyon, AUSA Bedke, and Robinson conspired with
Delano and Cornell to cover up the alleged wrongful seizure of legal files and damage to the
computer server. Finally, Shultz asserted that Runyon and Bedke retaliated against him for filing
his lawsuit by filing an indictment .
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companies not listed in the Injunction. The Stonehenge Groups owned the shared
computer equipment, which included a server. Each entity that occupied the
office, including the Stonehenge Groups, stored data on a single hard drive within
the shared server. The tape labeled “Schultz & Associates Legal Files,” which was
taken by the defendants, pursuant to the Injunction, contained business records and
information related to the Stonehenge Groups, as well as other defendant-
corporations listed in the Injunction.
Defendant Deery also moved for summary judgment, arguing that Schultz
failed to state a cause of action against him under § 1983 because he was not a state
actor but a private attorney retained as counsel by the Receiver. Deery also stated,
in his affidavit in support of summary judgment, that before the Receiver retained
him, he did not represent the State of Florida or participate in any way in the
drafting or filing of pleadings in the underlying investigation. Moreover, Deery
stated that he was not present during the execution of the Injunction. In his own
deposition, Schultz conceded that he had no personal knowledge as to whether
Deery was present when the Injunction was executed.
The district court granted summary judgment in favor of all of the
defendants, finding, inter alia, that: (1) Deery was entitled to summary judgment
on Count 1 because he was not present during the execution of the Injunction and
was not a state actor; (2) Delano and Melchior were entitled to qualified immunity
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on Count 1 because (a) the computer tape at issue reasonably fell within the scope
of the Injunction, (b) their attempt to retrieve information from the server was
reasonable, and (c) they did not intentionally destroy any computer files;
(3) Schultz’s proper remedy for recovering damage to his property was under state
law, not § 1983; and (4) Delano, Cornell, Robinson, Deleon, Bedke, and Runyon
were entitled to summary judgment on Count 2 because Schultz “failed to present
sufficient evidence establishing the existence of an agreement between the
Defendants to violate his constitutional rights.”
Thereafter, Delano, Melchior, and Cornell filed a bill of costs and a
supporting affidavit, seeking taxation of prevailing-party costs, pursuant to Fed. R.
Civ. P. 54(d)(1) and 28 U.S.C. § 1920, against Schultz in the amount of $6,073.94.
This amount consisted of fees for summonses and subpoenas, payment to the court
reporter for transcripts, fees paid to witnesses, copying costs, and mediation
expenses. Approximately two months after the bill of costs was filed and Schultz
had not replied or objected to it, the district court awarded costs to Delano,
Melchior, and Cornell in the requested amount .
III.
First, we consider the entry of summary judgment in favor of Deery, the
private attorney hired to represent the receiver. “In order to prevail on a civil rights
action under § 1983, a plaintiff must show that he or she was deprived of a federal
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right by a person acting under color of state law.” Griffin v. City of Opa-Locka,
261 F.3d 1295, 1303 (11th Cir. 2001). Only in rare circumstances will a private
party be viewed as a state actor for § 1983 purposes. Rayburn ex rel. Rayburn v.
Hogue, 241 F.3d 1341, 1347 (11th Cir. 2001). Where a private party acts either
jointly or with or through a state actor, the private party acts under color of state
law, within the meaning of § 1983. See Tower v. Glover, 467 U.S. 914, 920
(1984); Harvey v. Harvey, 949 F.2d 1127, 1130 (11th Cir. 1992). From our review
of the summary judgment materials, it is clear that Schultz failed to establish a
sufficient nexus between Deery, who was not present during execution of the
Injunction, and the state defendants. Accordingly, the district court did not err by
concluding that Deery, a private attorney, was not a state actor and therefore was
entitled to summary judgment.
Schultz also argues that Melchior and Delano were not entitled to qualified
immunity because they acted outside the scope of the Injunction when they seized
the “Schultz & Associates Legal Files” tape and destroyed computer files. Again,
we are unpersuaded. A government official who is sued under § 1983 may seek
summary judgment on the ground that he is entitled to qualified immunity.
Holloman ex rel. Holloman v. Harland, 370 F.3d 1252, 1263 (11th Cir. 2004). To
be eligible for qualified immunity, the official must first establish that he was
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performing a “discretionary function” at the time the alleged violation of federal
law occurred. Id. at 1263-64.
Once the official has established that he was engaged in a discretionary
function, the plaintiff bears the burden of demonstrating that the official is not
entitled to qualified immunity. Id. at 1264. In order to demonstrate that the
official is not entitled to qualified immunity, the plaintiff must show two things:
(1) that the defendant has committed a constitutional violation and (2) that the
constitutional right the defendant violated was “clearly established” at the time he
did it. Saucier v. Katz, 533 U.S. 194, 201 (2001); Holloman, 370 F.3d at 1264.
This two-step inquiry is designed to “provide[ ] ample protection to all but the
plainly incompetent or those who knowingly violate the law.” Malley v. Briggs,
475 U.S. 335, 341(1986). There is no dispute that Melchior and Delano were
acting within their discretionary authority during the execution of the injunctive
order. Therefore, Schultz had the burden to satisfy the Saucier two-part test.
On the first Saucier prong, in an analogous context, we have held that law
enforcement officers are entitled to qualified immunity for the seizure of property
if the officers had “reasonable suspicion” that the property was included within the
scope of a warrant. See Maughon v. Bibb County, 160 F.3d 658, 660-61 (11th Cir.
1998); see also Lindsey v. Storey, 936 F.2d 554, 559 (11th Cir. 1991) (holding
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that police officer was entitled to qualified immunity “unless there was clearly no
reasonable suspicion to seize the property”).
In the instant case, the district court found that both seizure of the computer
tape and accessing the shared server reasonably fell within the language of the
Injunction, which directed the seizure of computer data backups, computer records,
computer-stored data, computer equipment, and computer files. Indeed, Schultz
conceded that the seized tape contained, along with other materials, items relating
to entities that were named in the Injunction. Moreover, Melchior and Delano’s
seizure of the tape labeled “Schultz & Associates Legal Files” also reasonably fell
within the scope of the Injunction because: (1) the Injunction specifically included
computer records and computer files; (2) Schultz was a named relief defendant and
had an ownership interest in some of the defendant-corporations, which shared
office space and computer equipment with Schultz & Associates; and (3) the tape
contained business records and information that were related to those defendant-
corporations. In short, the defendants were acting under a reasonable interpretation
of the Injunction during its execution and, accordingly, they were entitled to
qualified immunity as to Count 1.
Next, Schultz contends the district court’s entry of summary judgment on
Count 2 was error because Delano, Cornell, Robinson, Deleon, Bedke, and Runyon
conspired to prevent him from “seeking legal redress” concerning the wrongful
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taking and destruction of his property. He summarily argues that the state
defendants’ failure to “abid[e] by” the Injunction constituted a conspiracy and that
this failure “was expanded by the complicity of the federal employees to block
[his] efforts.”
“To establish a prima facie case of § 1983 conspiracy, a plaintiff must show,
among other things, that the defendants reached an understanding to violate his
rights.” Rowe v. City of Fort Lauderdale, 279 F.3d 1271, 1283 (11th Cir. 2002)
(quotations and citation omitted). “For a conspiracy claim to survive a motion for
summary judgment, a mere scintilla of evidence will not suffice; there must be
enough of a showing that the jury could reasonably find for that party.” Id. at 1284(quotations and citation omitted). Here, Schultz presented no evidence of an
agreement between the defendants. Accordingly, Count 2 could not survive the
defendants’ motion for summary judgment.
IV.
Finally, under the mistaken belief that the district court granted sanctions,
under Federal Rule of Civil Procedure 11, Schultz makes various arguments as
why sanctions were not warranted here. Notably, he raises no challenge based on
Fed. R. 54(d)(1) or 28 U.S.C. § 1920, which are the provisions that formed the
basis for the district court’s award of prevailing-party costs. Rule 54(d)(1) allows
a prevailing party to receive costs other than attorneys’ fees. Fed. R. Civ. P.
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54(d)(1); Arcadian Fertilizer, L.P. v. MPW Indus. Serv., Inc., 249 F.3d 1293, 1296
(11th Cir. 2001). Moreover, under 54(d), “[t]he presumption is in favor of
awarding costs.” Arcadian, 249 F.3d at 1296. Such costs, however, may not
exceed those permitted by 28 U.S.C. § 1920. Maris Distrib. Co. v. Anheuser-
Busch, Inc., 300 F.3d 1207, 1225 (11th Cir. 2002). Costs that may be awarded
under § 1920 include: “(1) fees of the clerk and marshal; (2) fees of the court
reporter for all or any part of the stenographic transcript necessarily obtained for
use in the case; (3) fees and disbursements for printing and witnesses; [and]
(4) fees for exemplification and copies of papers necessarily obtained for use in the
case.” 28 U.S.C. § 1920(1)-(4).
Since we have affirmed the grant of summary judgment to Delano,
Melchior, and Cornell, as prevailing parties, these defendants were entitled to costs
under Rule 54(d)(1), as permitted by § 1920. Schultz did not respond to the bill of
costs in the district court and does not argue on appeal that the award of costs
under Rule 54(d)(1) and § 1920 was improper. Simply put, we discern no abuse of
discretion in the costs award.
AFFIRMED.
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