
USCA1 Opinion

	




                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                 ____________________          No. 97-1355                                AUGUSTUS JOHN CAMELIO,                                Plaintiff - Appellant,                                          v.                          AMERICAN FEDERATION, ETC., ET AL.,                               Defendants - Appellees.                                 ____________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS                     [Hon. William G. Young, U.S. District Judge]                                             ___________________                                 ____________________                                        Before                               Torruella, Chief Judge,                                          ___________                           Godbold,* Senior Circuit Judge,                                     ____________________                           and Barbadoro,** District Judge.                                            ______________                                _____________________               Lee  H. Kozol, with  whom Debra Dyleski-Najjar,  Penny Kozol               _____________             ____________________   ___________          and Friedman & Atherton were on brief for appellant.              ___________________               Andrew D. Roth, with whom  Devki K. Virk, Bredhoff & Kaiser,               ______________             _____________  __________________          P.L.L.C.,  William J. Hardy,  Prescott M. Lassman  and Kleinfeld,          ________   ________________   ___________________      __________          Kaplan & Becker were on brief for appellees.          _______________                                 ____________________                                    March 5, 1998                                 ____________________                                        ____________________          *  Of the Eleventh Circuit, sitting by designation.          **  Of the District of New Hampshire, sitting by designation.                    BARBADORO, District  Judge.  Augustus Camelio, a former                    BARBADORO, District  Judge.                               _______________          employee and member of a labor  union, brought this suit in state          court  against the union and  fourteen members of its leadership.          Camelio alleges  that defendants had  him fired from his  job and          forced  him  out of  the  union  in  violation of  the  Racketeer          Influenced and  Corrupt Organizations Act  ("RICO"), 18  U.S.C.A.             1961-1968  (West 1994 & Supp. 1997), and several provisions of          Massachusetts state  law.  After  defendants removed the  case to          federal  court, the district court below dismissed Camelio's RICO          claim and several  of his state law causes of  action for failure          to  state a claim.  The  court then remanded the remaining claims          to state court.  Camelio appeals the dismissal of his federal and          state  claims.   We affirm  in  part, concluding  that the  court          properly dismissed  his RICO claim.   We disagree,  however, with          the district court's decision to  dismiss the state law causes of          action.   Rather than  dismissing these claims,  the court should          have remanded  them to  state court along  with the  rest of  the          state law claims.                                    I.  BACKGROUND1                                   I.  BACKGROUND1                                       __________                    Augustus  Camelio served  for  nearly thirty  years  as          General  Counsel  to Council  93  of the  American  Federation of          State, County and Municipal Employees  ("AFSCME").  In 1995,  the          United  States Department  of  Labor  and  the  Internal  Revenue                                        ____________________          1  As this appeal  arises from a dismissal for failure to state a          claim,  we treat as true the complaint's well-pleaded allegations          and construe those  allegations in Camelio's  favor.  See,  e.g.,                                                                ___   ____          Miranda  v. Ponce  Fed. Bank,  948 F.2d  41, 43 (1st  Cir. 1991);          _______     ________________          Nodine v. Textron, Inc., 819 F.2d 347 (1st Cir. 1987).          ______    _____________                                         -2-          Service  initiated  investigations  into Council  93's  financial          affairs   that  threatened  to   expose  an  ongoing   scheme  to          misappropriate  union funds  by several  members  of the  union's          leadership.   In response, Camelio alleges, defendants engaged in          a concerted effort to thwart the two federal investigations.                    Camelio  launched  his own  investigation  into Council          93's financial affairs  after learning of the  federal inquiries.          He  claims that  the individual  defendants, all  members of  the          union leadership, initially rebuffed his requests for information          and later had him fired when he persisted with his investigation.          Camelio continued to investigate even after he lost his job, this          time relying  on his  right  as a  union  member to  inspect  the          union's books and  records.  He also announced  his candidacy for          vice  president  of  AFSCME's  northern  New  England  region,  a          position that would  allow him to further his  investigation.  In          an  attempt  to thwart  Camelio's  candidacy  and  keep him  from          uncovering any evidence of  defendants' criminal scheme, however,          several of the individual defendants first threatened Camelio and          ultimately forced  him out of  the union when their  threats were          not heeded.                      Camelio sued Council  93 and the  individual defendants          in  Massachusetts  state  court.    He  alleged claims  based  on          Massachusetts  law for  breach of  contract, wrongful  discharge,          tortious  interference with  contract,  violations  of the  state          constitution, intentional  and negligent infliction  of emotional          distress, defamation,  and false light  invasion of privacy.   He                                         -3-          also  alleged that the individual defendants violated the federal          RICO statute.  See 18 U.S.C.A.    1962(c), 1964(c).                           ___                    Relying on  Camelio's RICO  claims, defendants  removed          the case to  federal court in the District of Massachusetts.  See                                                                        ___          28 U.S.C.A.   1441(a)&(b) (West  1994).  Defendants then moved to          dismiss for failure to state a claim.  The district court allowed          Camelio to  amend his  complaint to more  specifically state  his          allegations,  but  ultimately  concluded that  he  had  failed to          sufficiently allege  a RICO claim against any  of the defendants.          The  court also  dismissed three  of Camelio's  state law  claims          against all defendants (breach of  contract, negligent infliction          of  emotional distress, and false  light invasion of privacy) and          parts  of  two  other  claims   as  to  some  defendants   (state          constitutional violations and intentional infliction of emotional          distress) before remanding the remaining claims to state court.                                   II.  DISCUSSION                                   II.  DISCUSSION                                        __________                    The district  court  dismissed  Camelio's  RICO  claims          because it concluded  Camelio's complaint failed to  sufficiently          allege that  his injuries  were proximately caused by any of  the          predicate  acts of  racketeering  on which  the RICO  claims were          based.    The court  gave  only  a  cursory explanation  for  its          dismissal  of  the  state  law  claims  over  which  it  retained          jurisdiction.  Camelio challenges both rulings.                     A.  The RICO Claims                    A.  The RICO Claims                        _______________                    In  addition  to criminal  penalties,  RICO  provides a          private right of action for  treble damages and attorneys fees to                                         -4-          "[a]ny person  injured in his business or property by reason of a          violation  of section  1962."   18 U.S.C.A.    1964(c).   Camelio          bases his  RICO claims on   1962(c),  which makes it unlawful for          any person  to  conduct the  affairs of  an enterprise  affecting          interstate  commerce by  means  of  a  "pattern  of  racketeering          activity."  18 U.S.C.A.   1962(c).   The Act also provides a list          of actions and statutory violations that constitute "racketeering          activity" and states  that a "pattern" of  such activity requires          at least  two acts of  racketeering.  18 U.S.C.A.    1961(1)&(5).          When  a plaintiff  attempts  to  base a  civil  RICO  claim on             1962(c),  that claim cannot succeed unless  the injuries of which          the  plaintiff  complains were  caused  by  one  or more  of  the          specified acts  of racketeering.2    Miranda v. Ponce  Fed. Bank,                                               _______    ________________          948  F.2d 41,  46-7 (1991).   Moreover,  merely proving  that the          alleged  predicate  acts were  a "cause  in fact"  of plaintiff's          injuries will  not be  sufficient.   Instead,   1964(c)  requires          proof that at least one of the defendant's predicate acts was the          proximate  cause  of   the  plaintiff's  injuries.     Holmes  v.                                                                 ______          Securities Investor Protection Corp., 503 U.S. 258, 268 (1992).          ____________________________________                    Camelio  alleges   that  defendants   injured  him   by          depriving him of his property interests  in his job and his union          membership.  He asserts that defendants engaged  in the following          pattern  of RICO  predicate acts:   misappropriation of  funds in                                        ____________________          2  Although it is not at issue  in this case, this court has held          that  the same causation  requirement applies to  RICO conspiracy          claims under   1962(d).  Miranda v. Ponce Fed. Bank, 948 F.2d 41,                                   _______    _______________          48 & n.9 (1st Cir. 1991).                                         -5-          violation   of  29  U.S.C.A.     501(c)  (West  1985);  attempted          extortion in  violation of the  Hobbs Act, 18 U.S.C.A.    1961(1)          (West 1984 & Supp. 1997); and obstruction of justice in violation          of 18 U.S.C.A.     1510 and 1512 (West  1984 & Supp. 1997).3   In          his complaint,  Camelio asserts  a myriad  of  claims in  various          combinations against  fourteen individual defendants  as well  as          against Council 93.  For the sake of clarity of our  analysis, we          treat  all of the defendants together, rather than individually.4          Accordingly,  to  satisfy  RICO's causation  requirement  at  the          motion to dismiss stage, Camelio's complaint must allege that the          injuries of which he complains  were proximately caused by one or          more of  these predicate acts.  We examine the sufficiency of the          complaint's causation allegations by addressing each category  of          predicate acts in turn.                      1.  Misappropriation of Funds Claims                          ________________________________                    Camelio  claims that  nine of  the fourteen  individual          defendants  misappropriated  union  funds   in  violation  of  18          U.S.C.A.    501(c)  by taking  such  funds for  personal use  and          causing union money to be paid for legal services that were never          rendered.                     A  violation of     501(c)  qualifies  as  a  predicate          racketeering  act  under  RICO.    See  29  U.S.C.A.     1961(1).                                             ___                                        ____________________          3    Camelio  alleges these  violations  in  various combinations          against each of the fourteen  individual defendants.  In no event          does  he  allege  less  than  two  violations  against   any  one          defendant.          4   For  the  sake  of clarity,  we  treat Camelio's  allegations          against the defendants collectively.                                         -6-          However, even if we assume  that Camelio has sufficiently alleged          that  defendants  violated     501(c),  these  violations  cannot          satisfy  RICO's  causation  requirement  because  the  connection          between the violations  and Camelio's injuries is  insufficiently          close to say that one proximately caused the other.  See Miranda,                                                               ___ _______          948 F.2d at 47 (bribery not cause of plaintiff's job loss); Pujol                                                                      _____          v. Shearson/American Express, Inc., 829 F.2d 1201, 1205 (mail and             _______________________________          wire fraud not proximate cause  of plaintiff's job loss); Nodine,                                                                    ______          819 F.2d at 349 (mail and wire fraud not cause of plaintiff's job          loss).  In  other words, even if defendants did  violate   501(c)          by stealing  union funds,  their misappropriations  were too  far          removed from Camelio's  loss of his job and  his union membership          to serve as the proximate cause of his injuries.                      2.  Extortion Claims                          ________________                    Camelio continued his investigation  after he lost  his          job,  relying  on his  right  as a  union member  to  inspect the          union's  financial   records.   See  29 U.S.C.A.    431(c)  (West                                          ___          1985).  He also announced his candidacy for vice president of the          union's northern New England region.  Camelio claims that several          of the defendants attempted to stifle his investigation and force          him to abandon his candidacy by threatening to deprive him of his          membership in the  union if he did  not desist.  He  asserts that          such conduct  violates the  Hobbs Act, 18  U.S.C.A.    1951(a), a          crime which  qualifies as  a predicate  act under  RICO.   See 18                                                                     ___          U.S.C.A.   1961(1).                                          -7-                    Like Camelio's  misappropriation claims, his  Hobbs Act          claims cannot  satisfy RICO's  causation requirement  because the          Hobbs Act violations he alleges did not cause the loss  of either          his  job or  his union  membership.   The Hobbs Act  punishes any          person  who "obstructs,  delays  or  affects commerce  .  . .  by          robbery or  extortion or  attempts or conspires  to do  so."   18          U.S.C.A.     1951(a).    The  Act  defines  "extortion"  as  "the          obtaining of property  from another, with his  consent induced by                                               ____ ___  _______          wrongful use of actual or threatened force, violence, or fear, or          under  color  of  official  right."   18  U.S.C.A.     1951(b)(2)          (emphasis added).  If Camelio's complaint successfully pleads any          Hobbs Act violations, those violations resulted  from defendants'          attempts to  induce Camelio  to abandon  certain property  rights          attendant to his union membership (e.g., his right to inspect the          union's financial records  and his right  to seek union  office).          As Camelio  concedes that  these attempts did  not succeed,  they          could  not have  caused  his injuries.    Instead, the  complaint          alleges  that  Camelio's   injuries  were   actually  caused   by          defendants' unilateral acts which, although reprehensible, do not          violate the Hobbs Act.5                                        ____________________          5     Camelio  alleges   that  defendants,   acting  in   various          combination: denied  him  the right  to attend  a union  hearing;          changed the means of collecting union dues  so as to put his dues          in  arrears and  thereby deprive  him of  his  status as  a union          member; rebuffed his subsequent efforts to pay his dues; declared          him ineligible  to seek office  within the union and  removed his          name  from the  ballot; and  denied his  repeated requests  for a          hearing on  the issue of  his membership.  Such  unilateral acts,          though possibly unlawful on some other grounds, do not fall under          the express  terms of  the Hobbs Act,  which prohibits  only "the          obtaining of property from another, with his  consent, induced by                                              ____ ___  _______                                         -8-                      3.  Obstruction of Justice Claims                          _____________________________                    Camelio's final argument is  that defendants are liable          under  RICO because  they engaged  in a  campaign  of obstructive          conduct  in  violation  of  two  federal  criminal  statutes,  18          U.S.C.A.      1510  and  1512.    Violations  of  these  statutes          constitute predicate acts of "racketeering activity" under  RICO.          See 18  U.S.C.A.    1961(1).  Further,  Camelio has  sufficiently          ___          alleged that  defendants' obstructive conduct caused his injuries          to satisfy RICO's  proximate cause requirement.   Camelio's final          attempt to  salvage his RICO  claims fails, however,  because the          conduct of which he complains does not violate either obstruction          statute.                    The two statutes on which Camelio relies are similar in          focus and  effect.   Section  1510(a) makes  it a  crime for  any          person to "willfully endeavor[] by means  of bribery to obstruct,          delay,  or prevent the communication of information relating to a          violation  of  any   criminal  statute  .  .  .   to  a  criminal          investigator."   18 U.S.C.A.   1510(a).   Similarly,   1512(a)(2)          punishes  any person who  "intentionally harasses  another person          and  thereby hinders, delays,  prevents, or dissuades  any person                                        ____________________          wrongful use of actual or  threatened force, violence, or  fear."          18 U.S.C.   1951(b)(2) (emphasis added); see also Evans v. United                                                   ________ _____    ______          States,  504  U.S.  255, 265  (1992)  (reasoning  that  where the          ______          defendant  is  a private  actor  --  and  not a  public  official          extorting under color of official right  -- "the victim's consent                                                                    _______          must be  induced by wrongful  use of actual or  threatened force,          violence  or   fear.")  (emphasis  added)   (internal  quotations          omitted); United States  v. Bucci, 839 F.2d 825,  827 (1st Cir.),                    _____________     _____          cert. denied, 488 U.S. 844 (1988); United States v. Hathaway, 534          _____ ______                       _____________    ________          F.2d 386, 393 (1st Cir.), cert. denied, 429 U.S. 819 (1976).                                    _____ ______                                         -9-          from  . .  . reporting  to a  law enforcement  officer . .  . the          commission  .  .  .  of  a  Federal  offense."    18  U.S.C.A.             1512(c)(2).   Both  statutes  focus  on a  specific  step in  the          criminal  investigatory process,  namely  the "communication"  or          "reporting" of information to criminal investigators.  See, e.g.,                                                                 ___  ____          United States v. Siegel, 717 F.2d 9,  20 (2d Cir. 1983) (in order          _____________    ______          to convict under   1510(a), prosecution must prove that defendant          had a reasonably founded belief that information had or was about          to  be given  to a  federal investigator);  United States  v. San                                                      _____________     ___          Martin, 515  F.2d 317, 320-21  (5th Cir. 1975)  (prosecution must          ______          prove  that  "[defendant]   knew  or  reasonably  believed   that          [informant] had information which she had given or would give" to          federal investigators).                      The conduct  on which  Camelio bases  his claims  falls          outside  the  scope  of both  statutes  because  he alleges  that          defendants engaged in  their obstructive conduct in an  effort to          prevent him from uncovering information of wrongdoing rather than          to   prevent  him  from  reporting  information  he  had  already          uncovered.   Conduct that is  aimed only at preventing  a private          citizen from  uncovering evidence  of a  crime, while  undeniably          wrong, is not within the purview of either obstruction of justice          statute.   Accordingly, Camelio  cannot save  his RICO  claims by          relying on either statute.                    This is  the fourth time  in recent years that  we have          been  called upon  to evaluate  the sufficiency  of a  RICO claim          arising from an employment dispute.  In all four cases, the claim                                         -10-          has failed to survive a  motion to dismiss.  See,  e.g., Miranda,                                                       ___   ____  _______          948 F.2d at 47; Pujol, 829 F.2d at 1205; Nodine, 819 F.2d at 349.                          _____                    ______          Although  we are  not prepared today  to address  the issue  in a          categorical  fashion,  we  emphasize  the  court's  statement  in          Miranda:   "While it  may be theoretically  possible to  allege a          _______          wrongful  discharge which results directly from the commission of          a RICO predicate act . . . any such safe harbor would be severely          circumscribed."   948 F.2d  at 41.  Whatever  the future may hold          for  this  category of  claims,  Camelio's RICO  claims  are well          outside any safe harbor that may exist.                    B.  The State Law Claims                    B.  The State Law Claims                        ____________________                    After properly  dismissing Camelio's  RICO claims,  the          district court proceeded to dismiss three of his state law claims          against  all of  the defendants  (breach  of contract,  negligent          infliction of  emotional distress,  and false  light invasion  of          privacy) and parts  of two other claims as  to several individual          defendants  (state  constitutional   violations  and  intentional          infliction of emotional  distress).  The  court then declined  to          exercise supplemental jurisdiction over the remaining  claims and          remanded them  to state court.   Camelio  challenges the  court's          dismissal of  the state law  claims.  Rather than  addressing the          merits  of these  claims, we  conclude  that the  court erred  in          retaining  supplemental jurisdiction  over the  state law  claims          after it dismissed the  federal claims on which  jurisdiction was          based.                                         -11-                    A federal  court exercising original  jurisdiction over          federal claims also has "supplemental jurisdiction over all other          claims that are  so related to  the claims in  the action  within          such original jurisdiction  that they form part of  the same case          or  controversy   under  Article   III  of   the  United   States          Constitution."  28 U.S.C.A.    1367(a) (West 1993).  If, however,          the  court dismisses  the foundational  federal  claims, it  must          reassess its jurisdiction, this time  engaging in a pragmatic and          case-specific  evaluation of a variety of considerations that may          bear on the  issue.  Roche v. John Hancock Mut. Life Ins. Co., 81                               _____    _______________________________          F.3d 249,  256-57 (1st Cir.  1996).  Among the  factors that will          often prove  relevant to  this calculation  are the interests  of          fairness, judicial economy, convenience, and comity.  Id.  Comity                                                                ___          is  a particularly  important concern  in  these cases.   As  the          Supreme Court observed in United  Mine Workers v. Gibbs, 383 U.S.                                    ____________________    _____          715, 726 (1966),                     Needless  decisions of  state  law should  be                    avoided both  as a  matter of  comity and  to                    promote  justice  between   the  parties,  by                    procuring for them a surer-footed reading  of                    applicable  law.   Certainly, if  the federal                    claims  are  dismissed   before  trial,  even                    though not unsubstantial  in a jurisdictional                    sense, the  state claims should  be dismissed                    as well.          Accordingly,  the balance  of competing  factors  ordinarily will          weigh strongly  in favor of declining jurisdiction over state law          claims  where the foundational federal claims have been dismissed          at  an early  stage in the  litigation.   See Rodr guez  v. Doral                                                    ___ _________     _____          Mortgage Corp., 57 F.3d 1168, 1177 (1st Cir. 1995).            ______________                                         -12-                    A  variety of  factors  counsel  against  retention  of          jurisdiction over the state law claims  in this case.  First, the          court  dismissed the only federal  claims well before trial under          circumstances   in  which  the  parties  would  not  be  unfairly          prejudiced by a  remand of the state law claims.  Second, it does          not appear that the district  court's disposition of some but not          all  of the state law claims will  materially shorten the time it          will take to resolve the  parties' dispute as the remanded claims          concern  the  same nucleus  of  operative fact  as  the dismissed          claims.   Third, and perhaps  most importantly in this  case, the          claims  that the court  dismissed raise substantial  questions of          state law that  are best  resolved in  state court.   For all  of          these reasons, we hold that the district court erred in retaining          jurisdiction over the state law claims.                                   III.  CONCLUSION                                   III.  CONCLUSION                                         __________                    For  the  foregoing  reasons,   we  conclude  that  the          district  court properly dismissed Camelio's RICO claims.  Having          dismissed  the federal  claims, however,  the  court should  have          refrained   from   exercising  supplemental   jurisdiction   over          Camelio's state law claims and remanded them to state court.                    The district court's dismissal of Camelio's RICO claims          is  affirmed.   As  to  the supplemental  state  law claims,  the              affirmed              ________          court's  judgment  is  vacated with  instructions  to  remand the                                 vacated                                 _______          remaining claims to state court.                                         -13-
