Hazzard v. Schaaf

Background

Gene Hazzard proceeded without a lawyer and sued the City of Oakland, Mayor Libby Schaaf, David Silver, Barbara J. Parker, Courtney Ruby, and Ed Reiskin, referred to collectively as the City Defendants. The opinion states that Mialisa Bonta, Andy Fremder, Rob Bonta, and Sabrina Landreth had not yet appeared.

Hazzard alleged that the City Defendants improperly used City resources in connection with Oakland Promise, failed to comply with provisions of the Internal Revenue Code, made false statements about the initiative’s status as an organization exempt under Section 501(c)(3), and filed false tax returns. He asserted claims based on 26 U.S.C. §§ 501, 6033, 7206, 7207, and 6104, as well as 18 U.S.C. § 1001. He also asserted state-law claims.

Hazzard sought orders requiring disclosures about Oakland Promise’s nonprofit status, restoration of funds to the City, and revocation of Oakland Promise’s business registration by the Secretary of State.

Analysis

The City Defendants moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which permits dismissal when a complaint does not state a legally sufficient claim. The court explained that it had to accept the complaint’s factual allegations as true for this motion and interpret Hazzard’s filings liberally because he was representing himself. That liberal standard did not allow the court to supply essential parts of claims that Hazzard had not pleaded.

The City Defendants argued that the federal statutes Hazzard cited did not create a private right of action—that is, a right for a private person to sue for a violation of those statutes. The court found that none of the statutes expressly provided such a right and that the weight of authority supported the defendants’ position. The court also stated that Sections 7206 and 7207 provide criminal penalties and do not provide a private right of action.

Ruling

The court granted the City Defendants’ motion to dismiss. It concluded that Hazzard could not state a claim based on the alleged violations of the cited federal statutes, but it granted him an opportunity to amend because it could not conclude at that stage that there was no possible basis for relief.

The court dismissed Hazzard’s state-law claims without prejudice because he had failed to state a federal claim and the parties were not diverse. The court stated that Hazzard could renew those claims if he later stated a viable federal claim.

Hazzard had to file any amended complaint by November 1, 2022, and serve it on defendants who had not appeared. Those defendants would have 21 days after service to answer or otherwise respond.