Adventure Outdoors, Inc. v. Bloomberg

• Decision Date: 21 September 2007
• Docket Number: Civil Action No. 1:06-CV-2897-JOF.
• Citation: 519 F.Supp.2d 1258
• Parties: ADVENTURE OUTDOORS, INC., a Georgia Corporation, et al., Plaintiffs, v. Michael BLOOMBERG, Mayor of the City of New York, in his capacity as Mayor of New York City, and individually, et al., Defendants.
• Court: U.S. District Court — Northern District of Georgia

519 F.Supp.2d 1258

ADVENTURE OUTDOORS, INC., a Georgia Corporation, et al., Plaintiffs, v. Michael BLOOMBERG, Mayor of the City of New York, in his capacity as Mayor of New York City, and individually, et al., Defendants.

Civil Action No. 1:06-CV-2897-JOF.

United States District Court, N.D. Georgia, Atlanta Division.

September 21, 2007.

Edwin Marger, Robert L. Barr, Jr., Law Offices of Edwin Marger, Jasper, GA, for Plaintiffs.

Marcia Bull Stadeker, Dow Lohnes & Albertson, Matthew D. Crawford, Peter Crane Canfield, Dow Lohnes PLLC, Atlanta, GA, for Defendants.

OPINION AND ORDER

J. OWEN FORRESTER, Senior District Judge.

Until further notice, the court DIRECTS the Clerk of the Court to SEAL the court's order of September 20, 2007. In lieu thereof, the Clerk of the Court is DIRECTED to file the attached redacted version of the order. The Clerk of the Court is FURTHER DIRECTED to SEAL Exhibits 5 through 10 filed in conjunction with Plaintiffs' response to Defendants' Motion to Dismiss, Docket Entry 12.

REDACTED OPINION AND ORDER

This matter is before the court on Plaintiffs' motion to remand [3-1]; Defendants' motion for leave to file excess pages [6-1]; Defendants' motion to dismiss [7-1] or in the alternative to transfer case to the United States District Court for the Eastern District of New York [7-2]; Plaintiffs' renewed motion to remand [13-1]; Plaintiffs' motion to amend complaint [14-1]; and Plaintiffs' motion to amend complaint [18-1].

I. Procedural History

A. Background

On May 15, 2006, The City of New York filed suit in the United States District Court for the Eastern District of New York against numerous gun brokers around the country, including Adventure Outdoors, Inc., located in Smyrna, Georgia. The City contends that the gun brokers knowingly permitted straw transactions to take place during gun purchases, a practice which violates federal law. In compiling evidence to file its complaint, the City hired numerous private investigators to pose as gun purchasers and go to various gun dealers around the country. The investigators would engage in behavior designed to simulate straw purchases to determine whether the gun broker would permit a sale under circumstances which purportedly mimic a straw purchase. Several gun brokers, including Adventure Outdoors, sold guns to the investigators hired by the City. The City alleges the gun dealer's actions in these purchases constitute various forms of nuisance and negligence. The court will refer to this lawsuit as the "New York Action."

Adventure Outdoors and its owners Jay, Cecilia, and Eric Wallace, then filed suit in the Superior Court of Cobb County contending that various officials of New York City defamed them in a news conference called to announce the filing of the New York Action. Adventure Outdoors also claims that the City's use of private investigators to simulate straw purchases was negligent. Defendants to Adventure Outdoors' complaint removed the suit to this court, and Adventure Outdoors filed the instant motion to remand. To sort through the jurisdictional issues raised in the parties' briefings, the court finds it necessary to review in detail the opposing suits filed by the parties.

B. The New York Action

In the New York Action, the City alleges that from March 1994 through October 2001, at least 21 guns sold by Adventure Outdoors were recovered in New York City in the hands of individuals prohibited from possessing a gun and involved in violent crimes. See New York Complaint, ¶ 6. The complaint further avers that from 1996 to 2000, a total of 254 guns sold by Adventure Outdoors were recovered in connection with crimes around the country. Id. The City contends that the guns sold by the defendants

are recovered in the hands of prohibited persons in disproportionate numbers because each Defendant sells handguns in a manner that either intentionally violates federal law or is contrary to industry practice or otherwise and therefore negligent. Specifically, upon information and belief, Defendants intentionally or negligently sell handguns to prohibited persons through "strawman" purchases, in which an individually legally able to buy a handgun purchases the gun from a licensed gun dealer, intending to transfer it immediately to a prohibited person.

Id., ¶ 21.

With respect to Adventure Outdoors, the complaint states that on April 8, 2006, a male and female investigator retained by the City of New York went to the store and engaged in a "simulated straw purchase that displayed all of the observable, in-store characteristics of the straw purchases described above 1, without any subsequent transfer of the gun to the `straw purchaser.'" Id., ¶ 91.

Only the male investigator interacted with an Adventure Outdoors sales person in discussing and selecting a Glock 9mm handgun to purchase. Once the male investigator had the gun and indicated a desire to purchase it, the female investigator, who had not been a part of the discussion, was summoned to the counter to make the purchase.

Id. The female investigator filled out the paperwork. Id., ¶ 92. "When the male investigator attempted to pay for the gun, the salesperson said that the male investigator needed to initial the form because he was paying for the gun. The male investigator initialed the form, the salesperson performed the background check, and the transaction was completed." Id.¹ The City contends that "Adventure Outdoors' participation in the simulated straw sale violates Sections 922, 923, 924 and 1001 of Title 18 of the U.S. Code and that violation is a proximate cause of the City's injury." Id., ¶ 94.

The City of New York raises causes of action of public nuisance, statutory nuisance, negligence per se, negligence, and negligent entrustment. It seeks an injunction ordering inter alia "each Defendant to comply with federal, state and local laws related to the sale of guns, including ceasing to engage in straw sales." Id. at 77. On the day the lawsuit was filed, the City of New York held a press conference announcing the suit and discussing actions of the gun dealers.

C. The Georgia Action

Thereafter, Plaintiffs, Adventure Outdoors, Inc., Jay Wallace, and Cecilia Wallace, filed a lawsuit in the Superior Court of Cobb County against Defendants, New York City; Michael Bloomberg, the Mayor of New York City; Michael A. Cardozo, Corporation Counsel of the City of New York; Raymond Kelly, Chief of Police of the New York Police Department; and John Feinblatt, Criminal Justice Coordinator of New York City. The court will refer to these Defendants as the New York City Defendants.² Plaintiffs also sued the various private investigators used by New York City to simulate the straw purchases, specifically, the Nooner Investigative Group; Tanya Marie Nooner,³ a Georgia resident and principal of Nooner Investigative Group; Melissa Merced, of Nooner Investigative Group; Joseph Tounsel, of Nooner Investigative Group; James Mintz, principal of The James Mintz Group; and The James Mintz Group. The court will refer to these Defendants as the Investigator Defendants.

Plaintiffs assert that Defendants Nooner, Tounsel, and perhaps Merced, entered Adventure Outdoors on April 8, 2006 in order to falsely and fraudulently purchase a firearm. See Cmplt., ¶¶ 14-15. Plaintiffs contend that Defendants lied orally and on the written purchase form "to induce agents of Plaintiffs' business to sell" the firearm. Id., ¶ 15. Plaintiffs asserts that the New York City Defendants met and directed Defendants Nooner, Tounsel, and Merced to go into Adventure Outdoors to commit fraud. Id., ¶ 16.

Plaintiffs also assert that the New York Defendants maliciously libeled and slandered Plaintiffs "by dissemination of statements to, among others, the news media, both print and electronic; and both national and local, which the New York Defendants knew, or by the exercise of minimal due diligence would have known, were untrue." Id., ¶ 20. This included characterizing Plaintiffs as "rogue gun dealers." Id., ¶ 21.

Count One of Plaintiffs' complaint for libel and slander sets forth specific statements made by Defendants Bloomberg, Cardozo, Feinblatt, and Kelly on May 15 and 21, 2006, including "these dealers are the worst of the worst," "a scourge on our society," "group of bad apples who routinely ignore federal regulations," and "[p]lain and simple these dealers have New Yorkers blood on their Hands." Id., ¶ 27.

Counts Two and Three of Plaintiffs' complaint are for gross negligence and negligence, respectively, for failing to (a) investigate whether the 21 guns referenced in the New York Action were negligently or unlawfully sold, (b) contact the Special Agent in Charge of the Atlanta ATF to determine "the truth and legality" of Plaintiffs' business, (c) inquire of Plaintiffs what firearms' sale safeguards were in place at the business, and (d) to "debrief' Defendant Nooner as to why she was asked to initial the "straw-man" purchase paragraph on April 8, 2006. Id., ¶ 31.

Count Four asserts a claim of aiding and abetting. Count Five raises special violations against Defendant Bloomberg based on his meeting with Atlanta Mayor Shirley Franklin "to present and persist in presenting egregious slander against the Georgia Plaintiffs." Id., ¶¶ 36-38. Plaintiffs also assert a claim of tortious interference with business relations. Id., ¶ 39.

D. Contentions

Defendants argue that a substantial question of federal law exists in the case because the court must determine whether the gun brokers' sales violated federal law prohibiting straw purchases of guns in order to adjudicate Plaintiffs' negligence and defamation claims. In the alternative, Defendants argue that the court should dismiss Plaintiffs' complaint because certain Plaintiffs do not have standing; the court does not have personal jurisdiction over Defendants; Plaintiffs did not properly file ante litem notices; and Plaintiffs' claims for libel, slander, negligence,...