Rothschild v. The Pacific Companies

Background

Thomas Etienne Rothschild filed a complaint against The Pacific Companies and applied to proceed without paying the filing fee. He alleged that construction of a five-story parking garage in Burlingame, California, lasted about four years, created constant noise and dust, and contributed to breathing problems. He also alleged that the construction involved dangerous conditions and that complaints to The Pacific Companies did not resolve them.

Rothschild asserted claims for breach of the covenant of quiet enjoyment, breach of warranty, fraud, Clean Air Act violations, negligence, negligence per se, and strict liability. He sought compensatory and punitive damages, interest, attorney fees, other relief, and $300 million. He purported to sue on behalf of himself and others similarly situated.

Screening and Jurisdiction

The court granted the application to proceed without paying the filing fee after finding that Rothschild met the economic eligibility requirement. Because he was proceeding without prepaying the filing fee, the court screened the complaint under 28 U.S.C. § 1915(e)(2)(B). That statute requires the court to dismiss an action that is frivolous, fails to state a claim for relief, or seeks monetary relief from an immune defendant. The court explained that such a screening dismissal is not a decision on the merits and that the same complaint may still be filed by paying the filing fee.

The court found that the complaint did not adequately allege subject-matter jurisdiction, meaning the federal court’s legal authority to hear the case. The complaint relied on federal-question jurisdiction and diversity jurisdiction.

For federal-question jurisdiction, the court noted that all claims except the Clean Air Act claim arose under state law. The court explained that the Clean Air Act’s citizen-suit provision permits certain suits involving emission standards, limitations, or related government orders, but provides only for injunctive relief or specified civil penalties. It does not create a free-standing nuisance claim for compensatory damages. The court therefore found no adequate federal-question basis from the Clean Air Act allegations.

For diversity jurisdiction, the court explained that the parties must be citizens of different states and that the amount in controversy must exceed $75,000, excluding interest and costs. Rothschild alleged that he resided in Florida and that The Pacific Companies resided in Tacoma, Washington. But a corporation’s citizenship depends on its state of incorporation and principal place of business, not simply where it resides. The complaint did not identify The Pacific Companies’ state of incorporation or principal place of business. The court also found that alleging residence in Florida was insufficient to establish Rothschild’s citizenship because citizenship depends on domicile—the person’s permanent home and intent to remain or return.

Motion to Amend and Disposition

Rothschild moved to amend the complaint, add defendants, correct venue, and limit defendants’ subpoenas to a time period. The motion appeared to seek the addition of Stephanie Gildred, Clarum Companies, and Byldan Corporation as defendants, along with claims under the Americans with Disabilities Act and Fair Housing Act, civil conspiracy, unfair business practices, breach of contract, and tortious interference with business expectancy.

The court granted the motion to amend because the case was at an early stage and the only named defendant had not yet been served. It stated that an amended complaint could add defendants and claims but had to establish a basis for federal subject-matter jurisdiction and proper venue. The court denied without prejudice the request to limit subpoenas because no defendants had been served and discovery had not begun.

In its conclusion, the court granted the application to proceed without paying the filing fee, found that the complaint failed to state a claim under Section 1915(e)(2)(B) because it lacked a sufficient jurisdictional basis, and granted the motion to amend. It ordered Rothschild to file a first amended complaint addressing the identified deficiencies by July 12, 2023. The court stated that if he did not file a timely amended complaint, it would recommend that the action be dismissed.