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Rittenhouse Entertainment, Inc v. City of Wilkes-Barre; Thomas Leighton

August 16, 2012

RITTENHOUSE ENTERTAINMENT, INC.; THE MINES, INC.; G NET COMM. CO.; PHOENIX ESTATES; AND THOMAS J. GRECO; PLAINTIFFS,
v.
CITY OF WILKES-BARRE; THOMAS LEIGHTON, INDIVIDUALLY AND AS MAYOR OF WILKES-BARRE;
GERALD DESSOYE, INDIVIDUALLY AND AS CHIEF OF POLICE OF WILKES-BARRE;
J.J. MURPHY, INDIVIDUALLY AND AS CITY ADMINISTRATOR OF WILKES-BARRE;
TONY THOMAS, JR., KATHY KANE, WILLIAM BARRET, RICK CRONAUER, AND
MICHAEL MERRITT, INDIVIDUALLY AND AS MEMBERS OF THE WILKES-BARRE CITY COUNCIL;
BUTCH FRATI, INDIVIDUALLY AND AS DIRECTOR OF OPERATIONS OF WILKES-BARRE;
LUZERNE COUNTY; MICHAEL SAVOKINAS, INDIVIDUALLY AND AS LUZERNE COUNTY SHERIFF;
KING'S COLLEGE; AND FATHER THOMAS J. O'HARA, ROBERT MCGONIGLE, PAUL LINDENMUTH, AND
JOHN MCANDREW, INDIVIDUALLY AND AS OFFICERS AND EMPLOYEES OF KING'S COLLEGE; DEFENDANTS.



The opinion of the court was delivered by: Judge Caputo

MEMORANDUM

Presently before the Court are motions to dismiss Plaintiffs' Amended Complaint (Doc. 36) filed by three sets of Defendants: the "City Defendants" (the City of Wilkes-Barre, Thomas Leighton, Gerald Dessoye, J.J. Murphy, Tony Thomas Jr., Kathy Kane, William Barrett, Rick Cronauer, Michael Merritt, and Butch Frati) (Doc. 40); the "College Defendants" (King's College, Father Thomas O'Hara, Robert McGonigle, Paul Lindenmuth, and John McAndrew) (Doc. 41); and the "County Defendants" (Luzerne County and Michael Savokinas). (Doc. 39.) For the reasons that follow, the motions will be granted in part and denied in part.

I. Factual Background

The facts as alleged in Plaintiffs' original pleading and contained in the Amended Complaint are as follows:

A. The Mines Nightclub

Plaintiff Thomas Greco is an officer, director, and principal of two of the Plaintiff Corporations: The Mines, Inc. and Rittenhouse Entertainment, Inc. (collectively, the "Entertainment Corporations"). Mr. Greco and the Entertainment Corporations own and operate a nightclub and bar called The Mines, located across the street from Defendant King's College in Wilkes-Barre, Pennsylvania. Mr. Greco owns the real property where The Mines is located. Mr. Greco and the Entertainment Corporations invested over $900,000 in the development of The Mines.

In early 2009, The Mines was open from Thursday through Saturday evenings from 5:00 p.m. until 2:00 a.m. The nightclub's patrons were 30-40% black and Latino, including minority students from King's College. The Mines enforced a strict dress code and identification policy, and it used metal detectors and an identification scanner with digital back-up. It had an extremely limited number of disturbances--fewer than typical for a nightclub.

B. Concern from the City of Wilkes-Barre and King's College

At the beginning of January, 2009, Defendants the City of Wilkes-Barre, its Mayor Thomas Leighton, its Chief of Police Gerald Dessoye, and its City Administrator J.J. Murphy all faced increasing public criticism and scrutiny. There had been an upsurge in violent crimes, and the public was concerned that these Defendants were failing to provide adequate law enforcement.

Mr. Murphy and Chief Dessoye suggested that Mr. Greco speak with Chief Dessoye about The Mines. During that conversation, Chief Dessoye stated that The Mines was not a "good mix" with King's College and that it attracted "the wrong crowd." Mr. Greco advised the Chief that recent criminal incidents near the college did not involve nightclub customers, were near other bars in the area, or occurred on nights when the nightclub was closed.

Defendant Robert McGonigle, the Associate Vice President for Student Affairs at King's College, with the assistance of Defendant John McAndrew, the college's Dean of Students, sent an e-mail to the students at King's College on about April 5, 2009. The e-mail alleged that there were problems with the Mines and invited students to a forum to discuss how to file complaints with the Pennsylvania Liquor Control Board ("PLCB") against the nightclub. On about April 8, 2009, Mr. Greco met with Defendant Father Thomas J. O'Hara, who is President of King's College, and other King's College staff. Father O'Hara advised Mr. Greco that he was under pressure from parents of students at King's College who were threatening to remove their students from the College unless there was action taken against the Mines or it was shut down. Father O'Hara also said that the clientele at The Mines was not a "good mix" with the College and that the nightclub attracted "the wrong crowd." Defendant Paul Lindenmuth, the Chair of the Department of Criminal Justice and Sociology at King's College, falsely told students and staff that there had been drug busts at The Mines and that the nightclub had lost its licenses.

C. The Campaign of Harassment

Starting on about April 16, 2009, the City of Wilkes-Barre and Luzerne County began a campaign of harassment against the black and Latino patrons of The Mines. The College Defendants acted in concert with the City and County in order to shut down The Mines and cause damage to Mr. Greco and the Entertainment Corporations. The City began the harassment by creating and embellishing police reports to make it appear as if criminal incidents were occurring on Mr. Greco's nightclub property. After the harassment began, Father O'Hara told Mr. Greco that King's College would try to shut down The Mines because it had "the wrong crowd." Father O'Hara then met with Mayor Leighton and Chief Dessoye to discuss The Mines.

The following weekend, on about April 23, 2009, six police cruisers and fifteen policemen (including a K-9 drug dog) stationed themselves at the nightclub property for hours. The officers stood in the driveways of the nightclub's parking lots and down the block from the nightclub, harassing and arresting people who attempted to enter The Mines. They conducted breathalizer blood alcohol tests of patrons leaving The Mines and had the drug dog approach people coming or going from the nightclub. In one instance, the police beat up a patron. The police told the nightclub's manager, "We are closing your boss's place down."

The harassment escalated a week later around April 30, 2009. There were thirty law enforcement officers outside The Mines. This included Defendant Luzerne County Sheriff Michael Savokinas, eight Sheriff's deputies from Defendant Luzerne County, four vehicles, three Pennsylvania State Liquor Control Enforcement agents, a Wilkes-Barre SWAT team, eight Wilkes-Barre police vehicles, a motorcycle police officer, and two K-9 dogs. The officers did not arrest anyone or issue any citations. The law enforcement presence was merely for the purposes of targeting and harassing Mr. Greco, the Entertainment Corporations, and prospective patrons of The Mines. Then on about May 15 and 16, 2009, Wilkes-Barre police set up seatbelt check points in front of The Mines for two nights.

Prior to this police harassment, the Mines had never received a citation from the PLCB or had any legal or law enforcement action against it. Other bars in the area whose patrons were 95-99% white had numerous incidents of crime, violence, noise, PLCB citations, and liquor license removals. The City and its police did not undertake similar law enforcement actions against the bars with predominantly white clientele.

All this police activity was pursuant to a custom or policy of the City and the County to discourage businesses in Wilkes-Barre and Luzerne County from serving black and Latino patrons, to use those businesses as scapegoats for the City's and County's law enforcement failures, and to prevent black and Latino people from living in or spending time in the City and the County. The City has previously taken action to close down several other bars and restaurants that served black and Latino clientele.

Because of the police crackdown, there was a decline in business at the Mines. Currently, the nightclub opens approximately once every ten days in order to maintain its liquor license. Mr. Greco and the Entertainment Corporations have lost significant income and income prospects. Mr. Greco has also suffered damage to his reputation.

D. Felony Charges Against Mr. Greco

Mayor Leighton and Chief Dessoye induced FBI Agent Joseph Noone to manipulate Mr. Greco into becoming vulnerable to the charge of misprision. Mayor Leighton and Chief Dessoye were friends of Agent Noone and like him, were alumni of King's College. They acted in retaliation against Mr. Greco for threatening a civil rights lawsuit against the City based on the police harassment at The Mines. As a result of Agent Noone's efforts, Mr. Greco pled guilty to misprision on about November 10, 2010. He was sentenced to two years probation and fifty hours of community service and was fined $10,000.

E. Denial of Tax Benefits

Mr. Greco is also a principal of the two other Plaintiff corporations: G Net Comm. Co. and Phoenix Estates (the "Development Corporations"). G Net and Phoenix own real estate in the City of Wilkes-Barre. The City and Mayor Leighton had been considering providing tax and other benefits to the Development Corporations as part of the Keystone Opportunity Zone ("KOZ") program.

Mr. Greco, G Net, and Phoenix invested over $2,900,000 to develop the companies' properties as an advanced broadband economic development project and community green energy geothermal district heating and cooling authority. They had worked on a Pennsylvania bill creating funding grants for geothermal projects using abandoned mine water as a source for green energy. Local Representative Eddie Day Pashinski and Governor Rendell both supported Mr. Greco and the Development Corporations. Because G Net and Phoenix were prime candidates for funding under the bill, Mr. Greco and the Development Corporations urged the City to apply for the grant.

In November and December of 2009, Mayor Leighton, Chief Dessoye and Defendant Butch Frati, who is the City's Director of Operations, convinced Representative Pashinski that he should not support the geothermal project or return phone calls to Mr. Greco, G Net, and Phoenix. This occurred after those Defendants had learned that Mr. Greco was facing charges for a felony. Further, Mayor Leighton, Chief Dessoye, and members of the Wilkes- Barre City Council (Defendants Tony Thomas, Jr., Kathy Kane, William Barrett, Rick Cronauer, and Michael Merritt) obstructed the granting of KOZ tax benefits to G Net and Phoenix. Specifically, these Defendants failed to grant a site development work extension to the Development Corporations' property, even though the property qualified for an extension and the Defendants granted it to other properties. These Defendants took this action in retaliation for Mr. Greco's involvement with The Mines and his complaints about civil rights violations. Because of the loss of the tax benefits, Mr. Greco and the Development Corporations have incurred financial damage.

F. The Amended Complaint

In addition to those allegations as set forth above, the Amended Complaint includes the following averments:

The College Defendants' efforts to shut down The Mines began in March 2009, prior to the e-mail being sent to the student body. Prior to the distribution of that e-mail, the individual College Defendants met with the City's administrators to develop a plan to close the bar. The plan to shut down The Mines included, but was not limited to, King's College complaining to the Pennsylvania Liquor Control Enforcement ("PLCE") and the City of Wilkes-Barre contacting the PLCE to file a complaint and supply an extraordinarily high number of incident reports (for which the PLCE ultimately determined The Mines operations had no responsibility). Subsequently, Mr. Murphy planned and caused to be filed a spurious complaint with the PLCE against The Mines. The City and College also planned to assemble the students of King's College to further facilitate their plan by advising the students to file complaints about noise and other incidents in an effort to create a record which would cause the closure of The Mines.

Subsequent to this meeting of City and College officials, an e-mail was distributed to the students at King's College concerning actions being taken to shut down The Mines. The e-mail was authored and sent on behalf of a number of King's College officials, including Father O'Hara and Mr. McGonigle.

Thereafter, Mr. Greco met with Father O'Hara and the College's senior staff at Father O'Hara's office to discuss the e-mail. At the meeting, Mr. Greco requested permission to attend the planned forum, but his offer was refused. And, despite promising at the meeting to do so, King's College refused to cooperate with Mr. Greco and The Mines in addressing the College's concerns about The Mines.

At the forum at King's College, which was also attended by Mr. Murphy and Chief Dessoye, the City and College furthered their plan to close The Mines by encouraging students to create incident reports concerning activities at The Mines. Father O'Hara subsequently called Mr. Greco and informed him that the College was under pressure from alumni and parents who threatened to remove their children from the College. As such, Father O'Hara advised Mr. Greco that he would act to close The Mines down.

Father O'Hara and other King's College officials then met and coordinated with City of Wilkes-Barre officials, including Chief Dessoye, Mayor Leighton, and Mr. Murphy, concerning the action to be taken against The Mines in April and May of 2009. The College's Head of Security then arranged for their security guards to work with the City of Wilkes-Barre to implement the actions taken outside of The Mines, including staging from the College's property.

On April 23, 2009, when the police began camping out on or around The Mines property, the actions were coordinated by Luzerne County, Sheriff Savokinas, Mr. Murphy, and other City of Wilkes-Barre officials. In addition, during the week of April 24, 2009, Mr. Frati assigned the City's building inspector to cause an unwarranted inspection of The Mines. Then, on or about April 25 and 26, 2009, College and City officials coordinated a plan with the PLCE to find a violation against The Mines. And, on April 30, 2009, Sheriff Savokinas was contacted by City of Wilkes-Barre officals to join City law enforcement personnel in patrolling The Mines. As a result of that request, a group of eight Luzerne County sheriffs joined City employees and agents patrolling The Mines.

And, in June of 2009, Luzerne County Commissioner Chairman Petrilla and Commissioner Skrepnak agreed to support the KOZ approval for Mr. Greco, G Net, and Phoenix Estates. However, KOZ approval was ultimately denied because Mayor Leighton, Mr. Murphy, and other City administrators contacted Luzerne County prior to the Commissioners' meeting to conspire to deny the approval.

During Plaintiffs' efforts to obtain funding for the geothermal projects, Plaintiffs requested Mr. Frati and the City of Wilkes-Barre to submit a "letter of intent" so they could apply for Department of Energy grant funds. Mr. Frati, as the City's Director of Operations, was copied on emails pertaining to this project, met with Mr. Greco, attended City Council meetings, and was directly involved in the decision-making process for grants and KOZ approvals. Mr. Murphy also attended City Council meetings and worked with Council members to block G Net and Phoenix Estates' participation in the KOZ project. Ultimately, Mr. Murphy, Mr. Frati, Mayor Leighton, and the City acted together to deny Plaintiffs the opportunity to obtain those funds and approvals.

The following June, Luzerne County breached its lease obligations to Phoenix Estates and refused to continue to meet its rental obligations. And, in September of 2011, Luzerne County refused to entertain a bid in response to a Request for Proposal for Luzerne County to lease office space even though Mr. Greco and Phoenix Estates were the only responsive bidders. And, as a result of these events, Rittenhouse, Mr. Greco, and The Mines have lost an investment of over $900,000.00.

II. Procedural History

The Plaintiffs filed the instant action on April 4, 2011. After the City, College, and County Defendants each filed separate motions to dismiss, the Court, on March 19, 2012, granted the motions in part and denied the motions in part. As to the City Defendants, the Court dismissed the following: (1) the §§ 1983 and 1985 claims against all City Defendants asserted by Mr. Greco and Rittenhouse in Count I; (2) the §§ 1981 and 1982 claims against the City Council Members in Count II; (3) the § 1983 claims against all City Defendants in Count II; (4) Rittenhouse's § 1985 claims against all City Defendants in Count II; (5) the Fifth Amendment claim against all City Defendants in Count III; (6) the Fifth Amendment and Equal Protection claims against all City Defendants in Count IV; (7) the defamation and trade disparagement claims against all City Defendants in Count V; (8) the tortious interference with business relationships claim against the City of Wilkes-Barre in Count V; (9) the claim for attorneys' fees against all City Defendants in Count VIII; and (10) all claims against Mr. Murphy and Mr. Frati. (Docs. 31; 32.)

As to the College Defendants, the claims in Counts I, II, III, VI, and VIII were dismissed. (Id.) And, as to the County Defendants, the following claims were dismissed:

(1) the § 1983 claims asserted by Mr. Greco and Rittenhouse in Count I; (2) the § 1985 claims in Count I; (3) the claims asserted in Count II; (4) the Fifth Amendment claims asserted in Count III; (5) the claims asserted ...


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