D. Tonge v. State of New Jersey ( 2018 )

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
____________
No. 17-2220
____________
D. RICHARD TONGE; JUST NEW HOMES, INC.,
Appellants
v.
STATE OF NEW JERSEY;
NEW JERSEY REAL ESTATE COMMISSION
____________
On Appeal from the United States District Court
for the District of New Jersey
(D.N.J. No. 3-16-cv-01319)
District Judge: Honorable Peter G. Sheridan
____________
Submitted Under Third Circuit L.A.R. 34.1(a)
September 7, 2018
Before: HARDIMAN, KRAUSE, and BIBAS, Circuit Judges.
(Filed: September 11, 2018)
____________
OPINION*
____________
*
This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does
not constitute binding precedent.
HARDIMAN, Circuit Judge.
D. Richard Tonge and Just New Homes, Inc. (collectively, Tonge) appeal the
District Court’s order dismissing their complaint for lack of subject matter jurisdiction.
Because Tonge’s claims are barred by the Eleventh Amendment, we will affirm.
I
Tonge was licensed as a real estate broker in New Jersey. He attracted customers
by offering incentives that apparently ran afoul of New Jersey law. The New Jersey Real
Estate Commission initiated disciplinary action in 2005, and five years later entered a
final order revoking Tonge’s real estate license and imposing a fine of $123,500. The
Appellate Division of the New Jersey Superior Court affirmed, and the Supreme Court of
New Jersey declined to hear Tonge’s case.
In 2016, Tonge filed this suit against the Commission and the State of New Jersey
in the United States District Court for the District of New Jersey. He asserted several
causes of action, each of which rested on one basic claim. Tonge had argued to the
Commission that New Jersey regulators had already approved his practices as part of an
earlier settlement agreement. But the Commission found no such agreement or approval
ever existed. The Appellate Division deemed this finding supported by the “undisputed
record,” Supp. App. 44, but Tonge’s federal complaint alleged the Commission had
procured that result by fraudulently “misrepresenting, denying, omitting or concealing the
existence of a settlement agreement . . . confirm[ing] that [Tonge’s] . . . business operated
lawfully.” App. 744 (Am. Compl. ¶ 1).
2
The District Court dismissed Tonge’s initial complaint for lack of subject matter
jurisdiction but granted leave to amend. Tonge did so, but the Court found his amended
complaint did not differ materially from his first effort, and again dismissed his case, this
time with prejudice. Ruling from the bench, the District Court determined it lacked
jurisdiction under both the Rooker-Feldman doctrine and the Eleventh Amendment to the
United States Constitution. This appeal followed.
II1
We agree that the Eleventh Amendment deprived the District Court of jurisdiction
over Tonge’s suit. The Eleventh Amendment “bar[s] all private suits against non-
consenting States in federal court.” Karns v. Shanahan, 879 F.3d 504, 512 (3d Cir. 2018)
(quoting Lombardo v. Pa. Dep’t of Pub. Welfare, 540 F.3d 190, 194 (3d Cir. 2008)).
“[W]here . . . the Eleventh Amendment precludes a suit, the court in which the plaintiff
filed the action lacks subject matter jurisdiction.” Baltimore Cty. v. Hechinger
Liquidation Tr. (In re Hechinger Inv. Co. of Del., Inc.), 335 F.3d 243, 249 (3d Cir. 2003)
(citing Seminole Tribe v. Florida, 517 U.S. 44, 64 (1996)).
This means New Jersey is amenable to private suit in federal court only to the
extent it has waived or Congress has abrogated its immunity, neither of which occurred
here. Tonge suggests he can vindicate his rights under the Fourteenth Amendment, but
1
In the District Court, Tonge asserted jurisdiction under 28 U.S.C. § 1331. We
have appellate jurisdiction under 28 U.S.C. § 1291. Since this case comes to us on a
motion to dismiss, we accept as true Tonge’s well-pleaded factual allegations, and
“review de novo the legal grounds underpinning [Defendants’] claim of . . . [Eleventh
Amendment] immunity.” Karns v. Shanahan, 879 F.3d 504, 512 (3d Cir. 2018) (citations
omitted).
3
the ratification of that amendment did not itself open the States up to suit. Rather, Section
5 of the Fourteenth Amendment empowered Congress to abrogate New Jersey’s Eleventh
Amendment immunity, but it has not done so with respect to Tonge’s claims. See Karns,
879 F.3d at 519 (citations omitted) (noting that States are not “persons” for purposes of
42 U.S.C. § 1983).
Nor may Tonge sue the Commission in federal court. In addition to States
themselves, the Eleventh Amendment also protects “those entities that are so intertwined
with them as to render them ‘arms of the state.’” Id. at 512–13 (citation omitted). We
have little trouble concluding that the Commission, a division of the New Jersey
Department of Insurance—the members of which are appointed and removable by the
Governor of New Jersey, N.J. STAT. ANN. § 45:15-5, and the surplus revenues of which
flow to the state treasury, id. § 45:1-3—is an arm of the State of New Jersey for Eleventh
Amendment purposes. See Karns, 879 F.3d at 512–19.
Finally, Tonge contends he should have been allowed to amend his complaint a
second time to add claims against Commission officials in their individual capacities. It is
settled law that a District Court does not abuse its discretion in denying leave to amend
where the plaintiff makes a cursory request without providing a proposed amended
complaint. Ramsgate Court Townhome Ass’n v. West Chester Borough, 313 F.3d 157,
161 (3d Cir. 2002). Tonge requested a second chance to replead only in passing at oral
argument, stating that “an amendment is not futile, because we could add the state
officials.” Supp. App. 69. Absent more, the Court “had nothing upon which to exercise
4
its discretion,” and we will not disturb its decision to deny leave to amend. Ramsgate,
313 F.3d at 161.
* * *
Because we will affirm the dismissal of Tonge’s complaint on Eleventh
Amendment grounds, we do not reach the separate question of whether it was also barred
by Rooker-Feldman.
5