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Azim v. Tortoise Capital Advisors, LLC

United States District Court, D. Kansas

September 2, 2014

ARSHAD AZIM, Plaintiff,
v.
TORTOISE CAPITAL ADVISORS, LLC, et al., Defendants.

MEMORANDUM AND ORDER

DANIEL D. CRABTREE, District Judge.

This matter comes before the Court on plaintiff's Appeal of Magistrate Judge Decision (Doc. 48), in which plaintiff objects to the portion of the Order (Doc. 46) issued by Magistrate Judge James P. O'Hara denying in part plaintiff's motion for leave to amend his Complaint. For the reasons explained below, the Court overrules plaintiff's objections and affirms the decision by the Magistrate Judge.

I. Background[1]

Plaintiff filed this action pro se alleging religious and national origin discrimination claims against his former employer under 42 U.S.C. § 2000e (Title VII), and claims against two individuals affiliated with his former employer under 42 U.S.C. § 1981. Plaintiff worked for defendant Tortoise Capital Advisors, an investment management firm, as a Vice President in the business development department from September 2011 until April 30, 2012. He claims that his supervisor, Michelle Kelly, harassed and discriminated against him throughout his employment because of his national origin and religion. He also alleges that he learned during his employment that defendants made misrepresentations so it could become certified as a minority business enterprise, made other false and fraudulent representations and failed to disclose conflicts of interest trying to gain potential investments and investors, and made misrepresentations in documents filed with the Securities and Exchange Commission. On April 16, 2012, plaintiff complained to defendant's human resources manager, Tabitha Boissonneau, about the fraudulent representations defendant Tortoise Capital Advisors made to obtain certification as a minority business enterprise, other securities law violations, and racial and religious discrimination that he allegedly experienced during his employment. On April 30, 2012, plaintiff met with Boissonneau and Kevin Birzer, defendant's chief executive officer. During that meeting, Boissonneau and Birzer attempted to coerce and intimidate plaintiff into signing a release agreement that waived his right to file any lawsuit arising from his employment. Also during that meeting, Boissonneau and Birzer terminated plaintiff's employment.

On November 19, 2013, plaintiff filed a Motion for Leave to File a Third Amended Complaint (Doc. 35) seeking to add additional defendants and four new claims: (1) a claim under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 ("Dodd-Frank"), 15 U.S.C. § 78u-6(h)(1)(A)(i) (Count III); (2) a conspiracy claim under 42 U.S.C. § 1985(3) (Count IV); (3) a claim under the Racketeer Influenced and Corrupt Organization Act ("RICO"), 18 U.S.C. § 1962(c) (Count V); and (4) a RICO conspiracy claim, 18 U.S.C. § 1962(d) (Count VI).

In an Order dated February 24, 2014 (Doc. 46), Judge O'Hara granted plaintiff's motion for leave to amend in part and denied it in part. Specifically, Judge O'Hara gave plaintiff leave to amend his Complaint to add the Dodd Frank claim (Count III) and the conspiracy claim under 42 U.S.C. § 1985(3) (Count IV). Judge O'Hara denied plaintiff leave to amend his Complaint to assert the RICO claim and RICO conspiracy claim because he determined that plaintiff lacked standing to bring a RICO claim, and consequently, plaintiff could not state a RICO conspiracy claim without a viable RICO claim. Thus, Judge O'Hara concluded that allowing plaintiff to amend his Complaint to assert these two claims would be futile.

Plaintiff objects to Judge O'Hara's ruling and argues that his decision denying plaintiff leave to amend to assert his RICO claim and RICO conspiracy claim was clearly erroneous. The Court addresses plaintiff's arguments below.

II. Standard of Review

Fed. R. Civ. P. 72(a) allows a party to provide specific, written objections to a magistrate judge's order. When reviewing a magistrate judge's order deciding nondispositive pretrial matters, the district court applies a "clearly erroneous or contrary to law" standard of review. See First Union Mortg. Corp. v. Smith, 229 F.3d 992, 995 (10th Cir. 2000) (quoting Ocelot Oil Corp. v. Sparrow Indus., 847 F.2d 1458, 1461-62 (10th Cir. 1988)); 28 U.S.C. § 636(b)(1)(A); Fed.R.Civ.P. 72(a). Under the clearly erroneous standard, the district court does not conduct a de novo review of the factual findings; rather, it must affirm a magistrate judge's order unless a review of the entire evidence leaves it "with the definite and firm conviction that a mistake has been committed." Ocelot Oil Corp., 847 F.2d at 1464. In contrast, "the contrary to law" standard permits the district court to conduct an independent review of purely legal determinations made by the magistrate judge. Sprint Commc'ns Co. L.P. v. Vonage Holdings Corp., 500 F.Supp.2d 1290, 1346 (D. Kan. 2007) (citations omitted). A magistrate judge's order is contrary to law if it "fails to apply or misapplies relevant statutes, case law or rules of procedure." Walker v. Bd. of Cnty. Comm'rs of Sedgwick Cnty., No. 09-1316-MLB, 2011 WL 2790203, at *2 (D. Kan. July 14, 2011) (quotation omitted).

III. Analysis

Rule 15(a) of the Federal Rules of Civil Procedure provides that leave to amend the pleadings "shall be freely given when justice so requires." Fed.R.Civ.P. 15(a). However, the court may deny leave to amend on the grounds of undue delay, bad faith or dilatory motive by the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party, or futility of the proposed amendment. Minter v. Prime Equip. Co., 451 F.3d 1196, 1204 (10th Cir. 2006) (citing Foman v. Davis, 371 U.S. 178, 182 (1962)). The decision to grant leave to amend the pleadings under Fed.R.Civ.P. 15(a) is within the district court's sound discretion. Id. (quoting Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321, 330 (1971)).

"A proposed amendment is futile if the amended complaint would be subject to dismissal." Little v. Portfolio Recovery Assoc., LLC, 548 Fed.App'x 514, 515 (10th Cir. 2013) (citing Jefferson Cnty. Sch. Dist. No. R-1 v. Moody's Investor's Servs., Inc., 175 F.3d 848, 859 (10th Cir. 1999)). The Court applies the standard governing motions to dismiss under Fed.R.Civ.P. 12(b)(6) to determine whether the proposed amendment is futile. Id. That is, the Complaint "must present enough facts to state a claim to relief that is plausible on its face.'" Id. (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). When deciding whether plaintiff has stated a plausible claim, the Court accepts as true all factual allegations in the Complaint and views them in the light most favorable to the plaintiff. Id. (citing Smith v. United States, 561 F.3d 1090, 1098 (10th Cir. 2009)). "Conclusory statements, threadbare recitals of elements, and legal conclusions, however, are not entitled to a presumption of truth." Id. (citing Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). However, because plaintiff proceeds pro se in this case, the Court construes his pleadings liberally and applies a less stringent standard than it applies to pleadings filed by lawyers. Whitney v. New Mexico, 113 F.3d 1170, 1173-74 (10th Cir. 1997) (citation omitted).

A. Civil RICO Claim

In his Proposed Amended Complaint (Doc. 35-1), plaintiff seeks to assert a RICO claim alleging that defendants violated 18 U.S.C. § 1962(c) by conducting the affairs of an enterprise engaged in interstate commerce "through a pattern of racketeering activity via multiple RICO predicate acts...." Doc. 35-1 at ¶ 206. Plaintiff alleges that defendants committed mail fraud in violation of 18 U.S.C. § 1341 and wire fraud in violation of 18 U.S.C. § 1343 by making false representations in an effort to obtain certification as a minority business enterprise. He also alleges that defendants violated the National Stolen Property Act (18 U.S.C. §§ 2314 & 2315) by transporting through interstate commerce funds knowingly procured by fraud. Finally, plaintiff alleges that all defendants, through Birzer and Boissonneau, obstructed justice in violation of 18 U.S.C. § 1512 by tampering with a witness when they attempted to coerce, harass, and intimidate plaintiff into signing a release agreement which waived his right to file any suit arising ...


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