Rothschild v. Gildred

Background

Thomas E. Rothschild was proceeding without paying the filing fee in advance. The court had previously screened his original complaint and allowed him to amend it to address problems concerning federal subject-matter jurisdiction. Rothschild filed a second amended complaint that added defendants and claims for conspiracy, Title II of the Americans with Disabilities Act, the Fair Housing Act, civil conspiracy, unfair business practices, breach of contract, and tortious interference with business expectancy.

Rothschild alleged that he remodeled and invested $1.5 million in property in Burlingame, California, that defendants sold the property without his knowledge or participation, and that he was denied an equitable interest in the property.

Screening Standard

Under 28 U.S.C. § 1915(e)(2), the court must screen a complaint filed without prepaying the filing fee and dismiss it if, among other things, it is frivolous, fails to state a claim, or seeks money from a defendant who is immune from such relief. The court explained that a complaint must contain factual allegations that plausibly support each claim, not merely legal conclusions or a list of the claim’s elements. Because the court determined that the deficiencies might be cured, it allowed another amendment.

Federal Claims and Jurisdiction

The court found that Rothschild’s Americans with Disabilities Act and Fair Housing Act claims were supported mainly by conclusory statements. He alleged that the claims related to a recent real-estate transaction and that his disability involved alcoholism and drug addiction at the time of the transaction, but he did not explain what discriminatory actions defendants took, what accommodations he needed, or how defendants denied them.

The court also held that Title II of the Americans with Disabilities Act applies only to public entities. The complaint did not identify any defendant as a state or local government or other governmental entity, so it did not state a plausible Title II claim.

As to the Fair Housing Act, Rothschild did not identify which provision or provisions defendants allegedly violated. The court found that the lack of supporting facts and the uncertainty about the relevant statutory provision did not allow it to infer more than a possibility of misconduct.

The court also addressed diversity jurisdiction. Rothschild alleged that he was domiciled in Scottsdale, Arizona, and that Stephanie Gildred was domiciled in Tacoma, Washington. But the complaint did not adequately allege the citizenship of Kurt Stiehl or Murphywood, Inc., and did not clearly state whether certain addresses represented defendants’ residences, domiciles, principal places of business, or places of incorporation. The court therefore could not determine whether complete diversity existed.

Other Claims

The court found that several state-law claims also relied on bare recitations of legal elements with little or no factual support. It specifically identified the claims for tortious interference with business expectancy, breach of contract, and civil conspiracy. The tortious-interference claim did not identify defendants or actions they allegedly took; it instead stated only the elements of the claim.

Financial-Status Information

Rothschild’s second amended complaint said that he lived intermittently at a sober house for alcohol treatment in Florida and worked in real estate. His earlier financial application, submitted under penalty of perjury, said that he had received no income from business, professional, or other self-employment during the preceding twelve months and that his only income was monthly Social Security disability benefits. The court ordered him to file a revised application stating whether he currently worked in real estate, whether he did so when he filed the earlier application, and why any undisclosed income was omitted.

Disposition

The court found that the second amended complaint failed to state a claim under § 1915(e)(2)(B). It ordered Rothschild to file a third amended complaint and revised financial application addressing the identified deficiencies by September 22, 2023. The court stated that it would recommend dismissal if he failed to file a timely third amended complaint or failed to address all of the listed issues. It also continued the case-management conference by 90 days.