Buchanan v. Metz

• Decision Date: 15 July 2014
• Docket Number: No. 2:12–cv–15511.,2:12–cv–15511.
• Parties: John C. BUCHANAN, Jr., Plaintiff, v. James W. METZ II and Donovan Motley, Defendants.
• Court: U.S. District Court — Eastern District of Michigan

6 F.Supp.3d 730

John C. BUCHANAN, Jr., Plaintiff,

v.James W. METZ II and Donovan Motley, Defendants.

No. 2:12–cv–15511.

United States District Court,

E.D. Michigan,

Southern Division.

Signed March 3, 2014.

Order Denying Reconsideration July 15, 2014.

Elizabeth A. Downey, Elizabeth A. Downey, P.C., Jeffrey T. Stewart, Seikaly & Stewart, Farmington Hills, MI, for Plaintiff.

Joseph T. Froehlich, Mark E. Donnelly, Michigan Attorney General, Lansing, MI, for Defendants.

OPINION AND ORDER GRANTING DEFENDANT METZ'S MOTION TO DISMISS

GERALD E. ROSEN, Chief Judge.

I. INTRODUCTION

This civil rights litigation arises out of Plaintiff John C. Buchanan, Jr.'s involvement in attempting to redevelop a manufacturing plant into a film studio as part of Michigan's Film and Digital Media Tax Credit program. According to Plaintiff, the project ultimately fell through due to a politically-motivated criminal investigation by the Michigan Attorney General. Defendants James W. Metz II and Donovan Motley handled the investigation. Their investigation ultimately resulted in criminal charges against Plaintiff and another individual, which a Michigan state court subsequently dismissed for want of probable cause. Plaintiff now seeks relief in this Court, asserting causes of action under the Fourth Amendment and Michigan common law for malicious prosecution and false arrest. In short, Plaintiff complains that Metz and Motley decided to pursue charges against Plaintiff without probable cause and effectuated this by having Motley make false statements to a magistrate.

Metz has now moved to dismiss Plaintiff's Amended Complaint on the grounds that it fails to state a claim under Rule 12(b)(6), or, in the alternative, that he enjoys absolute or qualified immunity. Having reviewed and considered Metz's Motion and supporting brief, Plaintiff's response thereto, supplemental briefing, and the entire record of this matter, the Court has determined that the relevant allegations, facts, and legal arguments are adequately presented in these written submissions, and that oral argument would not aid the decisional process. Therefore, the Court will decide this matter “on the briefs.” See Eastern District of Michigan Local Rule 7.1(f)(2). The Court's Opinion and Order is set forth below.

II. PERTINENT FACTS

A. Michigan's Film and Digital Media Tax Credit

The origins of this matter arise out of the State of Michigan's tax incentives for the film industry. As pertinent here, the “Film and Digital Media Tax Credit” permits investors to claim a tax credit “for an investment in a qualified film and digital media infrastructure project ... equal to 25% of the taxpayer's base investment.” M.C.L. § 208.1457(1–2) (effective April 8, 2008).¹ The Michigan Film Office oversees the issuance of these credits, with the concurrence of Michigan's Treasurer. § 208.1457(1). A “qualified film and digital media infrastructure project” includes production and postproduction facilities, property and equipment related to the facility, and “any other facility that is a necessary component of the primary facility.” § 208.1457(11)(d). Finally, the tax credit defines a “base investment” as:

[T]he cost, including fabrication and installation, paid or accrued in the taxable year of tangible assets of a type that are, or under the internal revenue code will become, eligible for depreciation, amortization, or accelerated capital cost recovery for federal income tax purposes, provided that the assets are physically located in this state for use in a business activity in this state and are not mobile tangible assets expended by a person in the development of a qualified film and digital media infrastructure project. Base investment does not include a direct production expenditure or qualified personnel expenditure eligible for a credit under [a different provision of Michigan's film incentive, § 208.1455].

§ 208.1457(11)(a).

B. The Development of the Lear Plant into a Film Production Facility1. Alpinist and West Michigan Films Agree To Redevelop the Lear Plant

Alpinist Endeavors, LLC was a limited liability company co-owned by Plaintiff and his father. (Plf's Am. Compl., Dkt. # 18, at ¶ 9). It owned a former manufacturing plant just outside of Grand Rapids commonly known as the “Lear Plant” or “Hangar 42.” ( Id. at ¶¶ 10, 46). Recognizing that the large Lear Plant might have potential as a film production facility, Plaintiff began working with an investor, West Michigan Films, to redevelop the Lear Plant into a permanent film studio. ( Id. at ¶¶ 15–21). West Michigan Films, Alpinist, Plaintiff, and Plaintiff's father eventually reached two agreements to effectuate this redevelopment.

First, West Michigan Films agreed to purchase portions of the Lear Plant from Alpinist for $40 million on a land contract. ( Id. at ¶ 21(a)). West Michigan Films' purchase was contingent upon two things: (1) Alpinist making certain improvements to allow the facility to be used as a film studio; and (2) West Michigan Films qualifying for a $10 million infrastructure tax credit. ( Id.). Indeed, the infrastructure tax credit was the linchpin to the purchase agreement; it provided West Michigan Films with the necessary capital to be used for its down payment to Alpinist:

West Michigan Films intended to sell the infrastructure tax credit to an assignee, and use part of the proceeds to make a down payment to Alpinist. The land contract would require no payments for the first year; but would require West Michigan Films to pay a percentage of revenue each year until fully paid. Thus, without the infrastructure tax credit, the deal would not be done.

( Id.). Alpinist made the improvements and the parties eventually closed on this land contract on April 5, 2010, in escrow, pending the issuance of the infrastructure tax credit. ( Id. at ¶¶ 21(a), 71).

Second, Plaintiff entered into a separate agreement with his father concerning his father's stake in Alpinist. Specifically, Plaintiff's father agreed to transfer his interest in Alpinist to Plaintiff “for over $800,000 and other consideration (amounting to over $3 million). This agreement, which specifically referenced the anticipated sale of [the portions of the Lear Plant] to West Michigan Film[s] and gave Plaintiff clear title to the entire assets of Alpinist, was signed and put into escrow to be closed no later than February 15, 2010.” ( Id. at ¶ 21(b)).

2. The Redevelopment Plan Falls Apart

Pursuant to its agreement with Alpinist, West Michigan Films began working with the Michigan Economic Development Corporation (MEDC) and the Michigan Film Office to put together a business plan that would meet state approval for the infrastructure tax credit. ( Id. at ¶ 27). Ultimately, in November 2009, the MEDC, the Michigan Film Office, and the Treasurer approved West Michigan Films' application for the tax credit. ( Id. at ¶¶ 30, 34). In so approving, the MEDC and the Michigan Film Office knew that the base investment claimed on the Lear Plant was $40 million. ( Id. at ¶¶ 29, 31).

The redevelopment plan, however, fell apart, culminating with the Film Office's decision to not finalize the tax credit—declining to issue the “Infrastructure Expenditure Credit certificate”—on May 23, 2010. ( Id. at ¶ 79). Plaintiff asserts that the project's downfall began when “politics intervened.” ( Id. at ¶ 37). Specifically, various individuals and organizations began questioning the veracity of the project's $40 million base investment price, when it had previously been listed for sale a few months before for less than $10 million and had not undergone $30 million in improvements. ( Id. at ¶¶ 52, 77, 94). The claimed base investment price, according to these individuals and organizations, “was inflated purely to get the tax credit.” ( Id. at ¶ 52).

C. Plaintiff's Arrest and Prosecution

Needless to say, this situation received significant media and public attention. ( Id. at ¶¶ 46, 47, 50, 61, 81–83). For example, one individual with close ties to media in Grand Rapids sent at least one “whistleblower email” asserting that the project was a fraud to state legislators and various advocacy groups opposing tax credits. ( Id. at ¶ 45). The election-cycle, and more specifically, the Republican primary for governor in the summer of 2010, magnified this attention. Then-gubernatorial candidate Representative Pete Hoekstra called for a criminal investigation into the matter. ( Id. at ¶ 85). One of Representative Hoekstra's opponents in the upcoming Republican gubernatorial primary was then-Attorney General Mike Cox. Individuals in the Michigan Film Office characterized Representative Hoekstra's call for an investigation as “a political ploy ... to make ... Attorney General Cox ... either investigate or seem soft on fraud.” ( Id. at ¶ 87). By June 16, 2010, the Attorney General had launched such an investigation. ( Id. at ¶ 84). Metz was the Assistant Attorney General assigned to the investigation and Motley was the investigator. ( Id. at ¶¶ 88–89).

On August 2, 2010, the day before the Republican gubernatorial primary, the Attorney General's Office announced that it was filing criminal charges against Joe Peters, West Michigan Films' principal, for attempted fraud on the state. ( Id. at ¶ 91). Five months later, on January 25, 2011, Motley appeared before a magistrate, presented a sworn affidavit with facts uncovered during the investigation, and requested a warrant for Plaintiff's arrest on similar charges. ( Id. at ¶¶ 92, 102). The magistrate granted this request. ( Id. at ¶ 92). After Plaintiff's booking and subsequent release on bond, the state district court held preliminary examinations in May, July, and September 2011, and eventually dismissed the charges against Plaintiff and Peters for lack of probable cause. ( Id. at ¶¶ 103–05).

D. Plaintiff's Claims

The crux of this case deals not with the reason for and propriety of the state's ultimate denial of the tax credit. Nor does it...