Livingston v. N.C. State Bar, 7:18-CV-5-D

• Decision Date: 04 February 2019
• Docket Number: No. 7:18-CV-5-D,7:18-CV-5-D
• Citation: 364 F.Supp.3d 587
• Court: U.S. District Court — Eastern District of North Carolina
• Parties: Christopher W. LIVINGSTON, Plaintiff, v. NORTH CAROLINA STATE BAR, et al., Defendants.

364 F.Supp.3d 587

Christopher W. LIVINGSTON, Plaintiff,

v.NORTH CAROLINA STATE BAR, et al., Defendants.

No. 7:18-CV-5-D

United States District Court, E.D. North Carolina, Southern Division.

Signed February 4, 2019

Christopher W. Livingston, White Oak, NC, pro se.

David Richard Johnson, North Carolina State Bar, Philip Alan Collins, Bailey & Dixon, L.L.P., Raleigh, NC, for Defendants.

ORDER

JAMES C. DEVER III, United States District Judge

On January 9, 2018, Christopher W. Livingston ("Livingston" or "plaintiff") filed a complaint against the North Carolina State Bar ("NCSB") and the 13th Judicial District Bar ("District Bar") alleging that annual District Bar dues, as authorized by North Carolina General Statute § 84-18.1, are unconstitutional [D.E. 1]. The NCSB is an agency of the State of North Carolina. See N.C. Gen. Stat. § 84-15. The District Bar is a subdivision of the NCSB. See id. § 84-18.1. On April 12, 2018, Livingston filed an amended complaint against NCSB, Lee Wilson Bettis Jr. ("Bettis"), Leanor Bailey Hodge ("Hodge"), and John Silverstein ("Silverstein") (collectively, "defendants") [D.E. 6].¹ Bettis is a member of the NCSB and was a witness in a disciplinary proceeding involving Livingston. Silverstein is a member of the NCSB and served as NCSB councilor and chair of the Grievance Committee in April 2015 in a state disciplinary action against Livingston. Hodge is deputy counsel with the NCSB's Office of Counsel and prosecuted disciplinary actions against Livingston. In his amended complaint, Livingston also alleged selective prosecution due to defendants' failure to pursue attorney discipline proceedings against other attorneys. Id.

Livingston seeks relief under 42 U.S.C. § 1983 and the North Carolina Constitution. Id. On April 26, 2018, NCSB and District Bar moved to dismiss Livingston's amended complaint for lack of subject-matter jurisdiction and for failure to state a claim upon which relief can be granted [D.E. 8] and filed a memorandum in support [D.E. 9]. On June 15, 2018, Livingston responded in opposition [D.E. 15]. On July 30, 2018, Bettis moved to dismiss Livingston's amended complaint for lack of subject-matter jurisdiction and for failure to state a claim [D.E. 20] and filed a memorandum in support [D.E. 21]. On August 15, 2018, Hodge and Silverstein moved to dismiss Livingston's amended complaint for lack of subject-matter jurisdiction and failure to state a claim [D.E. 26] and filed a memorandum in support [D.E. 27]. On September 9, 2018, Livingston responded in opposition to Bettis's motion [D.E. 32] and to Hodge's and Silverstein's motion [D.E. 33].

On November 28, 2018, Livingston moved for leave to file a second amended complaint [D.E. 35] and filed a memorandum in support [D.E. 36]. On December 19, 2018, defendants responded in opposition [D.E. 37, 38]. On January 7, 2019, Livingston replied [D.E. 39]. As explained below, the court grants defendants' motions to dismiss and denies as futile Livingston's motion to amend.

I.

Livingston resides in Bladen County, North Carolina. See [D.E. 6] ¶ 5; [D.E. 1] ¶ 18. In March 2004, Livingston, who was then a member of the North Carolina State Bar, began to represent clients against Capital Acquisitions and Management Company ("Camco"), a debt collector based in Rockford, Illinois. See [D.E. 6] ¶ 43. On March 12, 2004, Livingston filed suit against Camco and its counsel in Wake County District Court in North Carolina. See id. ¶ 50. Camco removed the action to the United States District Court for the Eastern District of North Carolina. See id. ¶ 52.² Livingston applied for admission to the North Carolina Eastern District Bar but failed to "take the oath of office before a U.S. Magistrate Judge in open court before appearing in court." Id. ¶¶ 53–55. On September 8, 2004, Livingston appeared before the Honorable Terrence W. Boyle, who noted that Livingston had not yet been admitted to appear in the Eastern District of North Carolina. See id. ¶¶ 57–58. Livingston acknowledged that he had yet do so. See id. ¶ 58. Judge Boyle also questioned Livingston's motive in bringing suit against Camco. See id. ¶¶ 59–61.

After the hearing, Livingston moved to disqualify Judge Boyle. See id. ¶ 63. Livingston describes the tone and statements within the motion as "unprofessional and extremely regrettable." Id. ¶ 64. In December 2004, NCSB commenced a grievance investigation against Livingston, alleging that he had unauthorizedly practiced law and noting that Livingston's "motion to disqualify Judge Boyle was cause for professional discipline." Id. ¶ 70. Livingston alleges that NCSB initiated the disciplinary proceeding in retaliation for Livingston "[holding] debt collectors accountable for violating the law." Id. ¶ 72. Livingston also alleges that, in August 2006, the Disciplinary Hearing Commission ("DHC") heard oral arguments in Livingston's disciplinary proceeding and indicated that Livingston ought to prevail. See id. ¶¶ 90–91. In October 2007, DHC scheduled another hearing concerning Livingston's disciplinary proceeding. See id. ¶ 94. On January 3, 2008, DHC entered a final order of discipline that admonished Livingston for Livingston's unauthorized practice of law in both the Eastern District of North Carolina and the District of Utah. See id. ¶ 102; Livingston, 6 DHC 11, at 5. Livingston then sued NCSB for malicious administrative prosecution and selective prosecution. Superior Court Judge Donald Stephens dismissed the complaint for failure to state a claim. [D.E. 6] ¶¶ 105–06; cf. Livingston v. Bakewell, 232 N.C. App. 337, 757 S.E.2d 525, 2014 WL 457905, at *1–2 (2014) (per curiam) (unpublished table decision). On February 4, 2014, the North Carolina Court of Appeals affirmed. See Livingston, 2014 WL 457905, at *6.

In February 2008, Philip Manger ("Manger") contacted Livingston about representing consumers in debt collection matters. See [D.E. 6] ¶ 247. Manager worked for the Credit Collections Defense Network ("CCDN"). See id. ¶ 249. Livingston accepted clients from CCDN and served as an "Associate Attorney" even after Livingston learned that CCDN engaged in the unauthorized practice of law. See id. ¶¶ 251, 254–56; N.C. State Bar v. Livingston, 809 S.E.2d 183, 186 (N.C. Ct. App. 2017), disc. review denied, 812 S.E.2d 853 (N.C. 2018). Eventually, Livingston terminated his agreement with CCDN, and he began to represent clients in matters against CCDN. See [D.E. 6] ¶¶ 257–64. Bettis represented CCDN in some of the matters. See id. ¶ 277. Livingston alleges that Bettis violated numerous rules of professional responsibility while representing CCDN. See, e.g., id. ¶¶ 278–90, 300–01, 315, 348. Over the course of several years, Livingston filed actions on behalf of multiple clients against CCDN, and Livingston and Bettis had repeated negative encounters. See, e.g., id. ¶¶ 274–451.

On April 10, 2015, NCSB filed a complaint against Livingston based on Livingston's conduct during the CCDN litigation. See id. ¶ 108. Following a four-day trial, DHC found that Livingston had violated numerous rules of professional conduct and suspended his license for five years. See id. ¶ 109; N.C. State Bar v. Livingston, 15 DHC 15 (Disciplinary Hr'g Comm'n July 8, 2016), https://www.ncbar.gov/handlers/DisciplinaryOrderHandler.ashx?url=\Livingston,% 20Christopher% 20Order% 20of% 20Disc% 2015DHC15.pdf. On December 19, 2017, the North Carolina Court of Appeals affirmed Livingston's suspension. See Livingston, 809 S.E.2d at 200.

Livingston contends that NCSB, Hodge (Deputy Counsel for NCSB), and Silverstein (Chair of NCSB's Grievance Committee) "instituted and maintained [the disciplinary] action primarily in retaliation for [Livingston's] success" in the prior disciplinary proceeding and for Livingston's "truthful criticisms of NCSB and Judge Boyle." [D.E. 6] ¶ 113. Livingston maintains that NCSB would have pursued disciplinary action against Bettis and other attorneys if not for NCSB's retaliatory motive. Id.

On January 9, 2018, Livingston filed a complaint against NCSB and the District Bar alleging that mandatory bar dues, as authorized by N.C. Gen. Stat. § 84-18.1, are unconstitutional both facially and as applied to Livingston. See [D.E. 1] 5. On April 12, 2018, Livingston amended his complaint, adding Hodge, Silverstein, and Bettis as defendants and removing the District Bar as a defendant [D.E. 6]. Livingston's amended complaint includes four claims: (1) a section 1983 claim against defendants for illegal taxation in violation of the Fifth and Fourteenth Amendments, (2) a section 1983 claim against defendants for selective prosecution in violation of the First and Fourteenth Amendments, (3) an illegal taxation claim in violation of the North Carolina Constitution, and (4) and a selective prosecution claim in violation of the North Carolina Constitution. See id. ¶¶ 453–56. Livingston seeks monetary damages, injunctive relief, and a declaration that N.C. Gen. Stat. § 84-18.1 is unconstitutional. Id.

On May 9, 2018, the Supreme Court of North Carolina denied discretionary review of Livingston's suspension. See N.C. State Bar v. Livingston, 812 S.E.2d 853, 853–54 (N.C. 2018).

II.

A.

Defendants move to dismiss Livingston's selective prosecution claim. See Fed. R. Civ. P. 12(b)(1). A motion to dismiss under Rule 12(b)(1) of the Federal Rules of Civil Procedure tests subject-matter jurisdiction, which is the court's "statutory or constitutional power to adjudicate the case." Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 89, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998) (emphasis omitted); see Holloway v. Pagan River Dockside Seafood, Inc., 669 F.3d 448, 453 (4th Cir. 2012) ; Constantine v. Rectors & Visitors of George Mason Univ., 411 F.3d 474, 479–80 (4th Cir. 2005) A federal court "must determine that it has subject-matter jurisdiction over the case before it can pass on the merits of that case." Constantine, 411 F.3d at 479–80. As the party invoking federal jurisdiction, Livingston...