Belt v. Arizona, State of

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 Daniel B Belt, No. CV-22-00409-PHX-DJH 10 Plaintiff, ORDER 11 v. 12 Greg Hanchett, 13 Defendant. 14 15 Pending before the Court is Defendant Greg Hanchett’s (“Defendant”) Motion to 16 Dismiss (Doc. 14). Pro se Plaintiff Daniel Belt (“Plaintiff”) filed a Response (Doc. 16). 17 Defendant filed a Reply (Doc. 17). Also pending is Plaintiff’s Demand for Equal 18 Protection of the Law (Doc. 18). Defendant did not file a Response and the time to do so 19 has passed. See LRCiv 7.2(c). 20 I. Background 21 On June 8, 2021, Plaintiff filed a Homeowners Association (“HOA”) Dispute 22 Process Petition (“Petition”) with the Arizona Department of Real Estate (“ADRE”) 23 alleging the Beaver Valley Improvement Association (“BVIA”) violated A.R.S. § 33- 24 1812(6). (Doc. 1-1 at 26). On September 10, 2021, the ADRE’s Office of Administrative 25 Hearings (“OAH”) held a hearing before Administrative Law Judge (“ALJ”) Sondra 26 Vanella. Plaintiff and BVIA both appeared along with two witnesses. (Id.) On October 27 5, 2021, the ALJ dismissed Plaintiff’s Petition because he failed to prove by a 28 preponderance of the evidence that the BVIA violated A.R.S. § 33-1812(6). (Id. at 29). 1 Plaintiff then submitted a timely rehearing request of the ALJ’s decision to the ADRE 2 Commissioner. (Id. at 30). On December 13, 2021, the Commissioner granted a rehearing 3 and assigned the case to the same ALJ, Sondra Vanella. (Id. at 44). 4 On January 19, 2022, the OAH Director Greg Hanchett (“Director”) ordered the 5 BVIA to respond to Plaintiff’s request for a change of judge. (Id. at 51). On January 31, 6 2022, the Director rescinded this order because Plaintiff was not seeking a request for a 7 change of judge. (Id. at 54). Instead, the Director concluded that Plaintiff sought to have 8 him “review the earlier proceedings in some appellate capacity and pass judgment on the 9 propriety of that proceeding.” (Id.) The Director declined to do so, stating there was “no 10 authority contained in either statute or rule that would permit the Director to undertake 11 such action.” (Id.) 12 Defendant represents that a rehearing of Plaintiff’s Petition occurred on March 10, 13 2022, and that Plaintiff did not participate. (Doc. 14 at 4). According to Defendant, at the 14 rehearing the ALJ found that Plaintiff failed to meet his burden and dismissed his petition 15 against the BVIA. (Id.) Defendant further represents Plaintiff did not seek judicial review 16 of the final decision and instead filed this action. (Id.) In his Response Plaintiff does not 17 contest these representations regarding the rehearing and affirms he “stated unequivocally 18 that he would not participate in the rehearing and did not participate in the rehearing.”1 19 (Doc. 16 at ¶ 5). 20 On April 5, 2022, Plaintiff filed his Amended Complaint, alleging Defendant 21 violated the Equal Protection Clause because Defendant failed to review and justify the 22 ALJ’s decision and failed to enforce various criminal statutes. (Doc. 10 at 22–33). On 23 May 5, 2022, Defendant filed a Motion to Dismiss under Rules 12(b)(1) and 12(b)(6) of 24 the Federal Rules of Civil Procedure, arguing the Court lacks subject matter jurisdiction 25 and that Defendant is immune from suit. (Doc. 14 at 4–7). 26 II. Legal Standard 27 Under Federal Rule of Civil Procedure (“Rule”) 12(b)(1), a defendant may seek to 28 1 The Court notes neither Plaintiff nor Defendant provided a record of the rehearing. 1 dismiss a complaint for lack of jurisdiction over the subject matter. A federal court is one 2 of limited jurisdiction. See Gould v. Mut. Life Ins. Co. v. New York, 790 F.2d 769, 774 (9th 3 Cir. 1986). It therefore cannot reach the merits of any dispute until it confirms its own 4 subject matter jurisdiction. See Steel Co. v. Citizens for a Better Environ., 523 U.S. 83, 95 5 (1998). Plaintiff, as the party seeking to invoke jurisdiction, has the burden of establishing 6 that jurisdiction exists. See Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 7 (1994). 8 III. Discussion 9 Defendant argues Plaintiff’s Amended Complaint is an improper collateral attack 10 on the ALJ’s final decision. (Doc. 14 at 4). Defendant contends Plaintiff’s request to find 11 Defendant violated the Equal Protection Clause because of Defendant’s failure to review 12 and justify the decision is a de facto appeal of the ALJ’s decision that is precluded by the 13 Rooker–Feldman doctrine. (Id.) Defendant further argues Plaintiff’s claim is barred by 14 res judicata. (Id. at 6). In Response, Plaintiff argues that he is not seeking review of the 15 administrative decision and that his failure to appeal the decision in state court is “a 16 monument to misdirection and illogic.” (Doc. 16 at ¶ 5). Instead, he argues the Amended 17 Complaint “is a direct and vociferous attack on wantonly egregious violations of Arizona 18 felony criminal statutes, which violations have been aided and abetted by Defendant 19 Hanchett, at the expense of BVIA property owners’ Constitutional right to Equal Protection 20 of the Laws.” (Id.) 21 I. Rooker–Feldman 22 The Rooker–Feldman doctrine prohibits federal district courts from exercising 23 subject matter jurisdiction over final state court judgments. Reusser v. Wachovia Bank, 24 N.A., 525 F. 3d 855, 858-59 (9th Cir. 2008). The doctrine may also apply “where the 25 parties do not directly contest the merits of a state court decision, as the doctrine ‘prohibits 26 a federal district court from exercising subject matter jurisdiction over a suit that is a de 27 facto appeal from a state court judgment.’” Id. (internal citations omitted) (emphasis in 28 original). A federal action constitutes a de facto appeal where the “claims raised in the 1 federal court action are ‘inextricably intertwined’ with the state court’s decision.” Id. 2 (quoting Bianchi v. Rylaarsdam, 334 F.3d 895, 898 (9th Cir. 2003). Accordingly, the Court 3 must first determine whether Plaintiff’s equal protection clause claim constitutes a de facto 4 appeal of the ALJ’s decision. 5 Defendant argues Plaintiff’s equal protection clause claim constitutes a de facto 6 appeal of the ALJ’s final decision and thus the Rooker–Feldman doctrine bars Plaintiff’s 7 action. Defendant relies on Dommisse v. Napolitano to support this proposition. 474 F. 8 Supp. 2d 1121, 1128 (D. Ariz. 2007), aff’d, 340 F. App’x 384 (9th Cir. 2009). There, the 9 plaintiff had a full hearing before the Arizona Medical Board (“Board”) and appealed the 10 Board’s censure decision to the Arizona Superior Court (“Superior Court”). Id. at 1124. 11 The Superior Court affirmed the Board’s findings and conditions of censure. Id. The 12 plaintiff did not appeal the Superior Court’s decision or the Board’s censure decision. He 13 instead filed suit in federal court, claiming the Board violated his constitutional procedural 14 due process and equal protection rights. Id. 15 In Dommisse, the federal court concluded it was divested of jurisdiction over the 16 claim under the Rooker–Feldman doctrine. The court reasoned that the plaintiff’s 17 constitutional claims were inextricably related to his disciplinary case and “if this court 18 were to find the Board denied [the plaintiff] procedural due process, this court would be 19 implicitly overruling the Superior Court’s judgment upholding in part the decision of the 20 Board.” Id. at 1132. The court found Rooker–Feldman forbade that and thus the plaintiff’s 21 only recourse was to seek review from the United States Supreme Court. Id. The Ninth 22 Circuit affirmed the court’s findings. 23 Here, Plaintiff’s equal protection claim is similarly a de facto appeal of the ALJ’s 24 decision. In his Amended Complaint, Plaintiff alleges that ALJ Sondra Vanella aided and 25 abetted “felony crimes” committed by the HOA Vice President when the ALJ did not justly 26 resolve Plaintiff’s issues with the HOA in his favor. (Doc. 10 at ¶ 11). Plainly, Plaintiff’s 27 constitutional claim is inextricably intertwined with the ALJ’s decision and thus a 28 “forbidden de facto appeal.” See Bianchi v. Rylaarsdam, 334 F.3d 895, 900 n.4 (9th Cir. 1 2003) (explaining that under the Rooker–Feldman doctrine “[i]t is immaterial that [the 2 plaintiff] frames his federal complaint as a constitutional challenge to the state court[’s] 3 decision[ ], rather than as a direct appeal of [that decision]”); Noel v. Hall, 341 F.3d 1148, 4 1156 (9th Cir. 2003) (“when a losing plaintiff . . . brings a suit in federal district court 5 asserting as legal wrongs the allegedly erroneous legal rulings of the state court and seeks 6 to vacate or set aside the judgment of that court, the federal suit is a forbidden de facto 7 appeal”). Under the Rooker–Feldman doctrine, this Court is without jurisdiction to review 8 Plaintiff’s equal protection clause claim and it will be dismissed. Contra Noel, 341 F.3d 9 at 1156 (“On the other hand, where the federal plaintiff does not complain of a legal injury 10 caused by a state court judgment, but rather of a legal injury caused by an adverse party, 11 Rooker–Feldman does not bar jurisdiction.”).2 12 II. Res Judicata 13 Even if Plaintiff’s Amended Complaint is not dismissed for lack of subject matter 14 jurisdiction under the Rooker–Feldman doctrine, it may still be subject to dismissal under 15 res judicata. See Dommisse, 474 F. Supp. 2d at 1125 (citing Exxon Mobil Corporation v. 16 Saudi Basic Industries Corp., 544 U.S. 280, 284 (2005) (“Rooker–Feldman does not 17 override or supplant preclusion doctrines of comity and abstention, such as collateral 18 estoppel and res judicata.”)). This is because preclusion is not a jurisdictional matter. Id. 19 at 291–93. 20 Federal courts must accord the same preclusive effect to a state administrative 21 decision that the state itself would apply. Id. at 1128 (citing Univ. of Tenn. v. Elliott, 478 22 U.S. 788, 798–99 (1986)). Under Arizona law, a party to an administrative determination 23 may file an appeal with the superior court. Olson v. Morris, 188 F.3d 1083, 1086 (9th 24 Cir.1999); A.R.S. § 12–902. “Failure to do so makes the administrative decision final and 25 res judicata.” Id. at 1131 (citing Olson, 188 F.3d at 1086). “‘This doctrine binds the same 26 party standing in the same capacity in subsequent litigation on the same cause of action not 27 only upon facts actually litigated but also upon those points that might have been 28 2 Here, Plaintiff does not complain of a legal injury caused by a state court judgment but does complain the ALJ deprived him of equal protection of the laws. (Doc. 10 at ¶ 11). 1 litigated.’” Id. 2 A. Final Decision 3 Defendant argues that Plaintiff’s Amended Complaint is barred by the doctrine of 4 res judicata because it seeks to relitigate issues heard and decided by the ALJ that were not 5 appealed and became final. (Doc. 14 at 7). The Court must therefore first determine 6 whether the ALJ’s decision at issue here was final. 7 A.R.S. § 12-904(A) provides that an appeal from a final administrative decision 8 must be filed with the superior court within 35 days after the date of the decision. The ALJ 9 dismissed Plaintiff’s Petition on October 5, 2021. (Id. at 26). On November 9, 2021, 10 Plaintiff filed a rehearing petition with the Commissioner. (Id. at 30). On December 13, 11 2021, the Commissioner granted a rehearing and assigned the case to the same ALJ, Sondra 12 Vanella. (Id. at 44). Defendant represents, and Plaintiff confirms, a rehearing ultimately 13 occurred on March 10, 2022, and that Plaintiff did not participate. (Doc. 14 at 4). 14 According to Defendant, at the rehearing the ALJ found that Plaintiff failed to meet his 15 burden and dismissed his petition against the BVIA. (Id.) Plaintiff did not seek judicial 16 review of the decision and instead filed this action. (Id.) 17 Based on this timeline, Plaintiff was required to file any appeal of the ALJ’s decision 18 with the Maricopa County Superior Court by April 15, 2022. Nothing in the record 19 indicates Plaintiff did so. Plaintiff’s failure to appeal makes the administrative decision 20 final. Olson, 188 F.3d at 1086. 21 B. Adequacy of State’s Administrative Forum 22 Before applying res judicata, however, the Court must first assess the state’s 23 administrative forum to ensure “that, at a minimum, it meets the state’s own criteria 24 necessary to require a court of that state to give preclusive effect to the state agency’s 25 decisions.” Olson, 188 F.3d at 1086. The Supreme Court has provided the following 26 fairness requirements: (1) that the administrative agency acted in a judicial capacity, (2) 27 that the agency resolved disputed issues of fact properly before it, and (3) that the parties 28 had an adequate opportunity to litigate. United States v. Utah Construction & Mining Co., 1 384 U.S. 394, 422 (1966). 2 Neither Defendant nor Plaintiff addresses whether the ADRE’s OAH process 3 comported with the requirements of Utah Construction. Nonetheless, it is clear to the 4 Court that the state administrative process here comport with these requirements. First, 5 Plaintiff filed an HOA Petition with the ADRE and the ADRE’s OAH held a hearing on 6 September 10, 2021, before ALJ Sondra J. Vanella. (Doc. 1-1 at 26, ¶ 1). The ADRE thus 7 acted in a judicial capacity. Second, Plaintiff’s petition alleged the BVIA (“Respondent”) 8 violated A.R.S. § 33-1812(6) because it “refused to give [Plaintiff] the ballots containing 9 the names, addresses and signatures, in compliance with A.R.S. 33-1812(6).” (Id. at ¶ 2). 10 The ALJ dismissed Plaintiff’s Petition because he failed to prove by a preponderance of 11 the evidence that Respondent violated A.R.S. § 33-1812(6). (Id. at 29, ¶ 6). The ALJ 12 found the Respondent permitted Plaintiff the opportunity to review the ballots at issue, but 13 Plaintiff declined to do so and instead “demanded copies of the ballots” and “the way in 14 which each member cast their respective votes.” (Id.) The ballots, however, were intended 15 to be secret pursuant to the community documents, and A.R.S. § 33-1895(B)(4) also 16 precluded Respondent from disclosing such personal information. (Id.) The ALJ therefore 17 found Plaintiff failed to sustain his burden to establish Respondent violated the statute. 18 (Id.) Based on this analysis, the Court finds the ALJ resolved the disputed issues of fact 19 properly before her. Last, both parties made appearances and two witnesses testified, one 20 on Plaintiff’s behalf and the other on Defendant’s. (Id. at ¶ 3). The parties thus had an 21 adequate opportunity to litigate the issue. The Court therefore finds the ADRE’s OAH 22 process comported with the requirements of Utah Construction. Because those 23 requirements are met, the OAH’s decision must be given preclusive effect. See Elliott, 478 24 U.S. at 798–99. 25 C. Application of Res Judicata 26 In his Amended Complaint, Plaintiff alleges the Defendant violated the equal 27 protection clause because Defendant failed to review and justify the ALJ’s decision and 28 failed to enforce various criminal statutes. (Doc. 10 at 22–33). Under Arizona law, 1 however, “an unappealed administrative decision is ‘conclusively presumed to be just, 2 reasonable and lawful.’” Olson, 188 F.3d at 1086. “This principle applies even to alleged 3 constitutional errors that might have been corrected on proper application to the court 4 which has jurisdiction of the appeal.” Id. Plaintiff represents he “stated unequivocally that 5 he would not participate in the rehearing and did not participate in the rehearing.” (Doc. 6 16 at ¶ 5). Plaintiff made this choice. Likewise, Plaintiff did not appeal the ALJ’s final 7 rehearing decision. It is now res judicata and may not be challenged in federal court. His 8 allegation that Defendant violated the equal protection clause could have been brought 9 before the state court under A.R.S. § 12-904(B). However, Plaintiff failed to do so and is 10 precluded from litigating it now. See Olson, 188 F.3d at 1083 (finding that under res 11 judicata an unappealed final administrative decision precluded plaintiff from litigating 12 “those points that might have been litigated”); Dommisse, 474 F. Supp. 2d at 1128 (finding 13 plaintiff’s failure to appeal the final administrative decision precluded him from raising 14 constitutional claims in the district court because he could have raised those claims in the 15 state proceeding). 16 A pro se Plaintiff should normally be given an opportunity to amend the complaint 17 to overcome a deficiency unless it is clear that no amendment can cure the defect. See 18 Lopez v. Smith, 203 F.3d 1122, 1129–1131 (9th Cir. 2000). Here, however, res judicata 19 bars Plaintiff’s claim and thus no amendment can cure the defects. The Court will therefore 20 dismiss the Complaint without leave to amend it. See Cook, Perkiss and Liehe, Inc. v. 21 Northern Calif. Collection Serv., Inc., 911 F.2d 242, 247 (9th Cir. 1990) (the court need 22 not grant leave to amend when amendment would not cure the defects in the pleading). 23 Accordingly, 24 IT IS HEREBY ORDERED that Defendant Greg Hanchett’s Motion to Dismiss 25 (Doc. 14) is granted and Plaintiff’s Motion for Equal Protection of the Laws (Doc. 18) is 26 denied. 27 … 28 … 1 IT IS FURTHER ORDERED that the Clerk of Court shall terminate this matter. 2 Dated this 28th day of November, 2022. 3 4 ( . Do ee S norable' Diang/4. Hunfetewa 6 United States District Fudge 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -9-