Opinion
9:18-cv-2590-DCN-MGB
03-05-2021
Zdenek Bakala, Plaintiff, v. Pavol Krupa, Adam Swart, and Crowds on Demand LLC, Defendants.
REPORT AND RECOMMENDATION
MARY GORDON BAKER, UNITED STATES MAGISTRATE JUDGE
This case is before the Court on Plaintiff Zdenek Bakala's Motion for Default Judgment against Defendant Pavol Krupa. (Dkt. No. 181.) Pursuant to the provisions of Title 28, United States Code, Section 636(b)(1) and Local Rule 73.02(B)(2)(e), D.S.C., all pretrial matters in cases involving pro se litigants are referred to a United States Magistrate Judge for consideration. For the following reasons, the undersigned recommends that Plaintiff's Motion be granted.
Bakala has reached a settlement with Defendants Crowds on Demand and Adam Swart. (Dkt. No. 182; Dkt. No. 188.) Krupa, the only remaining defendant, is representing himself from the Slovak Republic.
BACKGROUND
Plaintiff filed this suit on September 21, 2018, seeking damages and relief for purported extortion and interference with his business affairs. (Dkt. No. 1.) Plaintiff filed an Amended Complaint on October 11, 2018. (Dkt. No. 15.) His Amended Complaint brings claims for violations of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), defamation, and tortious interference. (Id.) More specifically, Plaintiff claims that Defendant Krupa launched a “harassment campaign” intended to defame him by promoting and administering slanderous social media accounts and organizing fake demonstrations in front of Plaintiff's homes. (Id.)
Plaintiff filed Proof of Service of the Amended Complaint as to the Swart Defendants on October 15, 2018 and October 17, 2018. (Dkt. No. 16; Dkt. No. 17; Dkt. No. 18; Dkt. No. 19.) On November 13, 2018, the Swart Defendants filed a Motion to Dismiss Plaintiffs claims in their entirety. (Dkt. No. 26.) On November 30, 2018, Plaintiff filed a Motion to Stay the case until Defendant Krupa had been served and given an opportunity to respond to the Amended Complaint. (Dkt. No. 32.)
The Swart Defendants voluntarily withdrew their Motion to Dismiss on January 8, 2020, in accordance with the Settlement Agreement signed by Plaintiff and the Swart Defendants on January 6, 2020. (Dkt. No. 116.)
Plaintiff's Motion to Stay was dismissed as moot on September 20, 2019. (Dkt. No. 87.)
On March 8, 2019, Plaintiff filed Proof of Service as to Defendant Krupa. (Dkt. No. 53.) On March 14, 2019, Defendant Krupa filed a Motion for Extension of Time to file his Answer. (Dkt. No. 56.) Defendant Krupa's Motion was granted on that same day. (Dkt. No. 58.) However, he did not timely file an Answer to Plaintiffs Amended Complaint.
On October 24, 2019, the Honorable David C. Norton, United States District Judge, held a status conference in the case. (Dkt. No. 95.) During that conference, the parties explained that Defendant Krupa had yet to make an appearance, but that Plaintiff and the Swart Defendants were close to reaching a settlement agreement. (Id.) Accordingly, Judge Norton ordered Defendant Krupa to serve a responsive pleading to Plaintiffs Amended Complaint within 21 days of the status conference. (Dkt. No. 96.)
On November 19, 2019, Krupa filed a document entitled “Answer to the Complaint/Response to the Plaintiff Action.” (Dkt. No. 98.) In that pleading, Defendant Krupa addressed some of the Amended Complaint's allegations, generally denied all of them, and objected to this Court exercising personal jurisdiction over him. (Id.) Plaintiff timely filed a Motion to Strike this pleading, asserting that it failed to comply with the requirements of the Federal Rules of Civil Procedure. (Dkt. No. 101.) In the course of considering Plaintiffs Motion to Strike, the undersigned determined that, liberally construed, Defendant Krupa's filing was both an Answer and a Rule 12(b)(2) Motion to Dismiss for Lack of Personal Jurisdiction. (Dkt. No. 130 at 4.) Because personal jurisdiction is an essential element of the district court's power, the undersigned considered Defendant Krupa's jurisdictional challenge before ruling on Plaintiffs Motion. (Id.) Accordingly, the undersigned issued a Report and Recommendation on this issue on March 30, 2020, recommending that Defendant Krupa's preliminary challenge to the Court's exercise of personal jurisdiction over him be denied. (Dkt. No. 140.) Judge Norton adopted the Report and Recommendation on May 8, 2020. (Dkt. No. 147.) Soon thereafter, the undersigned granted Plaintiffs Motion to Strike the pleading. (Dkt. No. 149.) In doing so, the undersigned ordered Defendant Krupa to file and serve a new Answer within twenty-one days of its May 11, 2020 Order. (Id.) Defendant Krupa failed to respond.
A copy of the Court s May 11, 2020 Order was mailed to Defendant Krupa on May 12, 2020. (See Dkt. No. 150.) Nonetheless, Defendant Krupa never responded or contacted the Court in any way regarding this Order.
Plaintiff requested an entry of default against Defendant Krupa on June 5, 2020. (Dkt. No. 157.) The Clerk of Court entered such default on June 8, 2020. (Dkt. No. 159.) On January 5, 2021, Plaintiff filed the instant Motion for Default Judgment. (Dkt. No. 181.) Defendant Krupa failed to respond to Plaintiffs Motion by the January 19, 2021 deadline. (Id.) As such, Plaintiff's Motion is ripe for disposition.
The undersigned notes that Plaintiff was properly served with Plaintiff's entry of default and Plaintiff's Motion for Default Judgment pursuant to Rule 4 of the Federal Rules of Civil Procedure. (Dkt. No. 157-1; Dkt. No. 181-33.) Still, Defendant Krupa has never responded or contacted the Court in any way regarding these filings.
LEGAL STANDARD
Federal Rule of Civil Procedure 55 sets forth the process for obtaining a default judgment. “Prior to obtaining a default judgment under either Rule 55(b)(1) or Rule 55(b)(2), there must be an entry of default as provided by Rule 55(a).” 10A Charles Alan Wright, Arthur R. Miller, & Mary Kay Kane, Federal Practice & Procedure § 2682 (3d ed.). Entry of default isproper “[w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise[.]” Fed.R.Civ.P. 55(a).
After the clerk has entered default against a party, the plaintiff may move the court for default judgment. Fed.R.Civ.P. 55(b). Upon entry of default, a defendant “admits the plaintiff's well-pleaded allegations of fact, is concluded on those facts by the judgment, and is barred from contesting on appeal the facts thus established.” Ryan v. Homecomings Fin. Network, 253 F.3d 778, 780 (4th Cir. 2001) (citation omitted). Still, “a default is not treated as an absolute confession by the defendant of his liability and of the plaintiff's right to recover.” Id. (citation omitted). Instead, it is up to the Court to determine whether the unchallenged facts support the relief sought. Id. Although the Fourth Circuit has “repeatedly expressed a strong preference that, as a general matter, defaults be avoided, ” Colleton Preparatory Acad., Inc. v. Hoover Univ., Inc., 616 F.3d 413, 417 (4th Cir. 2010), default judgment “may be appropriate when the adversary process has been halted because of an essentially unresponsive party.” S.E.C. v. Lawbaugh, 359 F.Supp.2d 418, 421 (D. Md. 2005) (citation omitted). Thus, it is within the Court's discretion to grant default judgment when a defendant is unresponsive. See Park Corp. v. Lexington Ins. Co., 812 F.2d 894, 896 (4th Cir. 1987) (upholding a default judgment when the defendant did not respond within the proper period); see also Lawbaugh, 359 F.Supp.2d at 422 (concluding that default judgment was appropriate because defendant was “unresponsive for more than a year” after denial of his motion to dismiss, even though he was properly served with plaintiff's motions for entry of default and default judgment).
DISCUSSION
I. Causes of Action
As noted above, default was entered against Defendant Krupa on June 8, 2020. (See Dkt. No. 159.) Accordingly, the undersigned accepts Plaintiff's well-pleaded factual allegations as true. See Fosberry v. Coyle Bus. Prod., Inc., No. 2:10-cv-799-RMG-BHH, 2012 WL 1532750, at *2 (D.S.C. April 2, 2012), adopted, 2012 WL 1533550 (D.S.C. Apr. 30, 2012) (citing DIRECTV, Inc. v. Rawlins, 523 F.3d 318, 322 n.2 (4th Cir. 2008)) (“As a result of Fosberry's default, the undersigned accepts Coyle's well-pleaded factual allegations as true.”); see also Ryan, 253 F.3d at 780 (“The defendant, by his default, admits the plaintiff's well-pleaded allegations of fact . . . .” (quoting Nishimatsu Constr. Co., Ltd. v. Houston Nat'l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975))).
Having found that the facts set forth in Plaintiff's Amended Complaint are deemed admitted by default, the undersigned must ensure that the Amended Complaint sets forth claims as to which relief may be granted. Anderson v. Foundation for Advancement, Educ. and Employment of Indians, 155 F.3d 500 (4th Cir. 1999). Accordingly, the undersigned considers whether Plaintiff has set forth claims for which relief can be granted pursuant to the standard of Federal Rule of Civil Procedure 12(b)(6). See Joe Hand Promotions, Inc. v. Scott's End Zone, Inc., 759 F.Supp.2d 742, 747 (D.S.C. 2010).
As noted above, the Swart Defendants filed a Motion to Dismiss Plaintiff's claims on November 13, 2018. (Dkt. No. 26.) However, the Swart Defendants voluntarily withdrew this motion on January 8, 2020, in accordance with the Settlement Agreement signed by Plaintiff and the Swart Defendants on January 6, 2020. (Dkt. No. 116.) As such, this Court has never considered the merits of the Swart Defendants' Motion to Dismiss.
The Rule 12(b)(6) standard requires that a plaintiff “allege ‘enough facts to state a claim to relief that is plausible on its face.'” Giarratano v. Johnson, 521 F.3d 298, 302 (4th Cir. 2008) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Moreover, “[a court] must determine whether it is plausible that the factual allegations in the complaint are ‘enough to raise a right to relief above the speculative level.'” Andrew v. Clark, 561 F.3d 261, 266 (4th Cir. 2009) (quoting Twombly, 550 U.S. at 555). “A plaintiff's obligation to provide the ‘grounds' of his ‘entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555 (quoting Papasan v. Allain, 478 U.S. 265, 286 (1986)).
For purposes of Rule 12(b)(6), the district court must “take all of the factual allegations in the complaint as true.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The Court must “accept the complainant's well-pleaded allegations as true and view the complaint in the light most favorable to the non-moving party.” Stansbury v. McDonald's Corp., 36 Fed.Appx. 98, 98-99 (4th Cir. 2002) (citing Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993)). However, while the Court must draw all reasonable inferences in favor of the plaintiff, it need not accept “legal conclusions drawn from the facts, . . . unwarranted inferences, unreasonable conclusions or arguments.” Nemet Chevrolet, Ltd. v. Consumeraffairs.com, Inc., 591 F.3d 250, 253 (4th Cir. 2009) (citing Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir. 1999); Giarratano, 521 F.3d at 298). The undersigned considers Plaintiff's allegations under the Rule 12(b)(6) standard, below.
A. Section 1962(c) RICO Claim
Section 1962(c) of RICO provides that “[i]t shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt.” 18 U.S.C. § 1962(c). To state a claim under § 1962(c), Plaintiff must show: “(1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity.” Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 496 (1985).
For RICO purposes, an “enterprise” is “any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity.” 18 U.S.C. § 1961(4). “A recovery of money damages under 18 U.S.C. § 1964(c) is not against a RICO enterprise, but against a RICO defendant who is a ‘person employed by or associated with' a RICO enterprise.” Id. Accordingly, “[t]he enterprise must be distinct from the persons alleged to have violated § 1962(c).” Palmetto State Med. Cent. v. Operation Lifeline, 117 F.3d 142, 148 (4th Cir. 1997) (citing New Beckley Mining Corp. v. Int'l Union, United Mine Workers of Am., 18 F.3d 1161, 1163 (4th Cir. 1994)).
Racketeering activity includes, inter alia, extortion, mail fraud, wire fraud, and interstate and foreign travel in aid of racketeering enterprises. See 18 U.S.C. § 1961(1). A pattern of racketeering activity is “two or more predicate acts of racketeering . . . committed within a ten-year period.” 18 U.S.C. § 1961(5); see also ePlus Tech., Inc. v. Aboud, 313 F.3d 166, 181 (4th Cir. 2002). A plaintiff must show that the predicate acts of racketeering are related and that they amount to or pose a threat of continued criminal activity. Palmetto State Medical Ctr., 117 F.3d at 148.
In his Motion, Plaintiff argues that “Krupa orchestrated and directed a pattern of racketeering activity in an attempt to unlawfully extort payments from Mr. Bakala, among others, since 2017.” (Dkt. No. 181-1 at 9.) Plaintiff states that Defendant Krupa financed, developed, and implemented a pattern of racketeering activities through his companies, Arca Capital and Krupa Global Investments. (Id.) Plaintiff contends that “Arca Capital and Krupa Global Investments constitute an ‘enterprise' within the meaning of 18 U.S.C. §§ 1961(4) and 1962(c)” and that Defendant Krupa “clearly participated” in the enterprise. (Id.)
More specifically, Plaintiff's Amended Complaint states:
104. Krupa, Swart, and Crowds on Demand (the “RICO Defendants”) are “persons” within the meaning of 18 U.S.C. §§ 1961(3) and 1962(c).
105. Arca Capital and Krupa Global Investments constitute an “enterprise” within the meaning of 18 U.S.C. §§ 1961(4) and 1962(c) (the “Arca/Krupa Global Enterprise”). The Arca/Krupa Global Enterprise is directed by Krupa who financed, developed, and implemented the RICO Fraud/Extortion Scheme.
106. In violation of 18 U.S.C. § 1962(c) Krupa, Swart, and Crowds on Demand conducted and/or participated in the conduct of the Arca/Krupa Global Enterprise's affairs, directly or indirectly, through a pattern of racketeering activity attempting to unlawfully seize control of properties and extort payments from numerous victims (“the RICO Fraud/Extortion Scheme”), including but not limited to: Mr. Bakala, Blackstone, and Round Hill.
107. Krupa, Swart, and Crowds on Demand participated in the operation or management of the Arca/Krupa Global Enterprise by, among other things, providing instruction, material support and financing to implement the RICO Extortion/Fraud Scheme. Krupa, Swart, and Crowds on Demand also solicited and hired agents to assist in and fulfill necessary roles in the implementation of the RICO Fraud/Extortion Scheme, including but not limited to, paid actors and fake protestors.(Dkt. No. 15 at 36-37.)
Here, Plaintiff alleges that Arca Capital and Krupa Global Investments constitute an enterprise operating separately and distinctly from Defendant Krupa. (Id.) Plaintiff further alleges that Defendant Krupa is associated with such enterprise by way of “participat[ing] in the operation or management of the Arca/Krupa Global Enterprise by . . . providing instruction, material support and financing” and that the enterprise “is directed by Krupa.” (Id. at 37.) As such, Plaintiff has sufficiently pled the existence of a RICO enterprise under the Rule 12(b)(6) standard. See Jones v. Ram Med., Inc., 807 F.Supp.2d 501, 515 (D.S.C. 2011) (finding that plaintiffs adequately pled the existence of a RICO enterprise).
With respect to Defendant Krupa's conduct and pattern of racketeering activities, Plaintiff alleges:
108. The common purpose of the members and agents of the Arca/Krupa Global Enterprise was to extort money and/or property from Mr. Bakala and other victims and profit thereby. Krupa, Swart, and Crowds on Demand have engaged in racketeering and other activities affecting interstate commerce since at least April 2017.
109. The pattern of racketeering activity consisted of Krupa, Swart, and Crowds on Demand committing, directing, and aiding and abetting the commission of numerous acts of racketeering activity including extortion, wire fraud, and interstate and foreign travel in aid of racketeering enterprises, in violation of 18 U.S.C. §§ 1343, 1951, 1952, and 1961(1).(Dkt. No. 15 at 37.)
As noted above, racketeering activity can include extortion, mail and wire fraud and interstate and foreign travel when in aid of racketeering enterprises. See 18 U.S.C. § 1961(1).
Plaintiff alleges these activities exactly. (Dkt. No. 15 at 37.) With regard to Plaintiff's mail fraud and wire fraud claims, the undersigned notes that where allegations of fraud are pled as the basis of a RICO claim, a plaintiff must meet the heightened pleading requirements set forth in Rule 9(b) of the Federal Rules of Civil Procedure. Menasco, Inc. v. Wasserman, 886 F.2d 681, 684 (4th Cir. 1989) (citing Schreiber Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d 1393, 1400-01 (9th Cir. 1986) (“plaintiff must plead ‘circumstances of the fraudulent acts that form the alleged pattern of racketeering activity with sufficient specificity pursuant to Fed.R.Civ.P. 9(b)'”)). Rule 9(b) states: “[i]n alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake.” Fed.R.Civ.P. 9(b). Here, Plaintiff has met this heightened standard. For example, Plaintiff's Amended Complaint provides a twenty-two-page factual background that describes Plaintiff's relevant personal and business affairs and the relationship between the parties. (Dkt. No. 15 at 4-36.) Plaintiff also explains Defendant Krupa's alleged wrongdoings, the effect of Defendant Krupa's actions on Plaintiff's professional and personal life, and Defendant Krupa's presumed motivations for his misconduct. (Id.)
Further, Plaintiff's Amended Complaint provides a detailed description of Defendant Krupa's fraudulent acts, including:
113. In violation of 18 U.S.C. § 1343, Krupa, Swart, and Crowds on Demand engaged in a scheme or artifice to defraud Mr. Bakala and his business and philanthropic contacts in order to obtain money or property from Bakala by means of false or fraudulent pretenses and representations. Specifically, as noted above, Krupa demanded that Mr. Bakala pay him 500 million crowns (approximately $23 million) in exchange for ceasing the harassment campaign against him. When Mr. Bakala refused to meet this demand, Krupa employed a scheme or artifice to defraud Mr. Bakala's business contacts to induce them to sever business ties with him through numerous false representations as noted above.(Dlt. No. 15 at 39.) In alleging that Defendant Krupa facilitated and participated in this “scheme or artifice to defraud, ” Plaintiff states that “after being informed that Mr. Bakala would not pay [] extortion money, Krupa hired Swart and Crowds on Demand to bring his campaign of defamation, extortion, and harassment to the United States.” (Id. at 13.) Plaintiff then alleges:
114. In furtherance of this scheme or artifice, Krupa, Swart, and Crowds on Demand transmitted or caused to be transmitted numerous emails and telephone calls by means of wire communication in interstate commerce, including but not limited to the following writings:
a. On July 5, 2018, Swart emailed the office of the Dean of the Tuck School of Business at Dartmouth College in an attempt to damage Mr. Bakala's reputation and destroy his relationship with the school.
b. On July 19, 2018, Swart contacted the potential purchaser of NorthLine in an attempt to smear Mr. Bakala and disrupt a pending real estate transaction.
c. On July 11, 2018, Swart sent an email to the General Counsel for The Aspen Institute, insisting that Mr. Bakala be expeditiously removed from the organization.
d. On July 16, 2018 Swart emailed the Dartmouth President's office in an attempt to damage Mr. Bakala's reputation and destroy his relationship with the school.
e. On August 28, 2018, an individual using the email address- rebecca@stopbakala.org-sent an email to the executive assistant to the Dean of the Tuck School of Business falsely claiming that “Mr. Bakala is facing civil litigation and criminal investigation in the Czech Republic, the United States, Switzerland, Poland, and the United Kingdom.” The executive assistant also received harassing phone calls at 3:47 p.m. and 3:54 p.m. on August 28, 2018.
f. On August 9, 2018, an individual using the email address- rebecca@stopbakala.org-threatened future protests, possibly at The Aspen Institute, unless The Aspen Institute engaged with StopBakala.org.
g. On August 13, 2018, “Oscar Feria” sent an email to a professor at Dartmouth's Tuck School of Business threatening that “[t]o avoid protestors at your door, perhaps it might be best to consider his association with your board…”
115. The common purpose of each of these wire transmissions was to further the RICO Extortion/Fraud Scheme by making misrepresentations to Mr. Bakala's business contacts in an effort to defraud them and economically injure Mr. Bakala.
116. In violation of 18 U.S.C. § 1952(a), the RICO Defendants traveled in interstate and/or foreign commerce and/or used facilities in interstate and foreign commerce (including but not limited to wire, telephone and internet communications), with intent to promote, manage, establish, carry on, or facilitate the promotion, management, establishment, or carrying on, of unlawful activities including extortion in violation of both state and federal law, including but not limited to:
a. On July 5, 2018, Swart emailed the Dean of the Tuck School of Business at Dartmouth College in an attempt to damage Mr. Bakala's reputation and destroy his relationship with the school.
b. On July 19, 2018, Swart contacted the potential purchaser of North-Line in an attempt to smear Mr. Bakala and disrupt a pending real estate transaction.
c. On July 11, 2018, Swart sent an email to the General Counsel for The Aspen Institute insisting that Mr. Bakala be expeditiously removed from the organization.
d. On July 16, 2018, Swart emailed the Dartmouth President's office in an attempt to damage Mr. Bakala's reputation and destroy his relationship with the school.(Id. at 39-41.) Based on the above, Plaintiff has alleged the time, place, and content of the alleged fraud with sufficient particularity to satisfy the requirements of Rule 9(b). Accordingly, the undersigned finds that Plaintiff has established the requisite predicate acts of mail and wire fraud for purposes of this Motion. See Jones, 807 F.Supp.2d at 513 (finding that plaintiffs pled two or more predicate acts of racketeering activity occurred through defendants' alleged mail fraud and wire fraud with the requisite particularity to satisfy Rule 9(b)).
In addition, Plaintiff has alleged extortion and interstate and foreign travel in aid of a racketeering enterprise with enough specificity to meet the Rule 12(b)(6) standard. Plaintiff's Amended Complaint states:
111. As set forth above, in violation of S.C. Code Ann. § 16-17-640, Krupa, Swart, and Crowds on Demand repeatedly threatened and subsequently implemented a false harassment campaign accusing Mr. Bakala of criminal offenses, unethical conduct, and business misdeeds, in numerous verbal, written and electronic communications, with the intent to extort money from Mr. Bakala.
112. Likewise, in violation of 18 U.S.C. § 1951 Krupa, Swart, and Crowds on Demand attempted to obstruct, delay, or affect commerce through the wrongful use of extortion, threats and demands, which caused Mr. Bakala to fear for his personal and economic well-being as well as the safety of his family. Specifically, Krupa, Swart, and Crowds on Demand engaged in a continuing extortionate scheme using threats of physical, reputational, and economic harm if Mr. Bakala did not meet their payment demands. Mr. Bakala's refusal to meet the extortion demand resulted in the RICO Defendants' organizing and financing a widespread harassment campaign against Mr. Bakala in the United States engaging “crowds-for-hire” to create a façade of negative public opinion targeting organizations Mr. Bakala supports, serves, and conducts business with. The purpose of this fake campaign is to harm and instill fear in Mr. Bakala so that he will pay the extortion demand. . . .
118. In conducting the pattern of racketeering activity as set forth above, the RICO Defendants regularly exchanged communications across state and foreign borders, and therefore were engaged in and affected interstate and foreign commerce. In furtherance of the extortionate scheme, members of the enterprise have made payments to one another, and in doing so, passed money through the United States' banking system. Additionally, demands made by members of the enterprise necessarily intended that, as both purpose and effect, funds would be transferred to or from South Carolina across state and foreign borders as part of their extortionate scheme.(Dkt. No. 15 at 41-42.) Here, Plaintiff has provided facts sufficient to show that Defendants engaged in extortion and interstate and foreign travel in aid of a racketeering enterprise. See Twombly, 550 U.S. at 555 (explaining that a plaintiff must allege more than mere labels and conclusions).
Accordingly, Plaintiff has alleged “two or more predicate acts of racketeering . . . committed within a ten-year period, ” 18 U.S.C. § 1961(5), that are related and amount to or pose a threat of continued criminal activity. Palmetto State Medical Ctr., 117 F.3d at 148. Plaintiff notes that Defendants have engaged in racketeering activities “[o]ver the past several years, ”(Dkt. No. 181-1 at 6), and “since at least April 2017.” (Dkt. No. 15 at 37.) He explains:
117. The acts of racketeering activity referred to in the previous paragraphs constitute a “pattern of racketeering activity” within the meaning of 18 U.S.C. § 1961(5). The criminal racketeering activity described above employs a common, ongoing course of conduct intended to pressure Mr. Bakala and other victims into paying money in exchange for ending a harassment campaign against them. The racketeering activity is related, having (1) common participants, (2) the same victims, and (3) the same purpose and result of benefiting the RICO Defendants or co-conspirators at the expense of Mr. Bakala. The predicate acts constituting a pattern of racketeering activity also are interrelated, as each of the foregoing acts can be traced to a coordinated harassment campaign against Mr. Bakala. A specific threat of repetition exists, in that the RICO Defendants have promised to escalate their harassment campaign while demanding millions of dollars to end the harassment campaign. In addition, the RICO Defendants' use of a similar pattern of racketeering activity against other victims suggests a threat of continuing racketeering activity against both Mr. Bakala and future victims. . . .
119. As a direct and proximate result of the RICO Defendants' conduct and participation in the enterprises' racketeering activity, including its predicate acts, Mr. Bakala has been injured by reason of the violations of 18 U.S.C. § 1962(c). The RICO Defendants' violations of 18 U.S.C. § 1962(c), have caused economic injuries to Mr. Bakala's business, property, and reputation, as well as other injuries and damages to be proven at trial. Further, Defendants' racketeering activity continues, as do Mr. Bakala's injuries.(Id. at 41-42.) Plaintiff has plainly alleged a pattern of racketeering activity with the requisite specificity. See H.J. Inc. v. Northwestern Bell Telephone Co., 492 U.S. 229, 239 (“It is this factor of continuity plus relationship which combines to produce a pattern.”); see also Jones, 807 F.Supp.2d at 513 (“To be deemed related, predicate acts must have the same or similar purposes, results, participants, victims, or methods of commission, or otherwise [be] interrelated by distinguishing characteristics and [not be] isolated events.” (internal quotation marks omitted) (citing ePlus Tech. Inc., 313 F.3d at 182; H.J. Inc., 492 U.S. at 240)).
Based on the above, Plaintiff has sufficiently alleged “(1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity.” Sedima, S.P.R.L., 473 U.S. at 496. Accordingly, the undersigned recommends that default judgment should be granted with respect to this claim.
B. Section 1962(d) Claim
Section 1962(d) of RICO states that “[i]t shall be unlawful for any person to conspire to violate any of the provisions of subsection (a), (b), or (c).” 18 U.S.C. § 1962(d). As such, Plaintiff must show that Defendant Krupa conspired to violate § 1962(c) in order to prove his claim for RICO conspiracy under § 1962(d). Palmetto State Medical Ctr., 117 F.3d at 148. In other words, Plaintiff must establish that Defendant Krupa “objectively manifested, through words or actions, an agreement to participate in the conduct of the affairs of the enterprise through the commission of two or more predicate crimes.” Allstate Ins. Co. v. Weir, No. 5:07-cv-00498-BR, 2010 WL 11561561, at *2 (E.D. N.C. Apr. 9, 2010) (citing United States v. Starrett, 55 F.3d 1525, 1543 (11th Cir. 1995) (internal quotation marks and citation omitted). However, Plaintiff need only show that Defendant Krupa agreed to participate in the overall enterprise; he does not need to show that Defendant Krupa intended to participate in each individual predicate act. Id.
The undersigned finds that Plaintiff's Amended Complaint sufficiently alleges the elements of a § 1962(d) RICO claim. As Plaintiff points out in his Motion, the Amended Complaint alleges that “[e]ach of the Defendants agreed and worked together to develop and implement the scheme of extortion and harassment in order to extort money from Mr. Bakala and other victims” and “[e]ach of the Defendants agreed and participated in the false and defamatory statements made on the StopBakala.org website; the harassing and defamatory phone calls and emails; and the decision to hire fake protestors to protest at [his] home . . . and [at his children's school].” (Dkt. No. 181-1 at 12) (internal citations omitted). The Amended Complaint itself states:
123. Defendants agreed and conspired to participate in, or to facilitate the commission of, predicate acts as stated above, and agreed and conspired to facilitate the acts leading to the substantive offense of conducting the affairs of the enterprise through a pattern of racketeering activity, which included the repeated acts alleged above, in violation of 18 U.S.C. § 1962(d).
124. The object of this conspiracy has been and is to conduct or participate in, directly or indirectly, the conduct of the affairs of the section 1962(c) enterprise described previously through a pattern of racketeering activity.
125. As demonstrated in detail above, Defendants have engaged in numerous overt and predicate racketeering acts in furtherance of the conspiracy, including material misrepresentations, wire fraud and extortion designed to deprive Mr. Bakala of his money and/or property.
126. The nature of the above-described RICO Fraud/Extortion scheme gives rise to an inference that the members of the enterprise not only agreed to the objective of a RICO conspiracy under 18 U.S.C. § 1962(d) by conspiring to violate 18 U.S.C. § 1962(c), but also that they were aware that their ongoing extortionate acts have been and are part of an overall pattern of racketeering activity.
127. As a direct and proximate result of Defendants' conspiracy to participate in the conduct of the affairs of the enterprise alleged herein, Mr. Bakala has been and continues to be injured in his property and person, as set forth above.(Dkt. No. 15 at 43.) These paragraphs adequately allege that Defendant Krupa “objectively manifested, through words or actions, an agreement to participate in the conduct of the affairs of the enterprise through the commission of two or more predicate crimes.” Starrett, 55 F.3d at 1543 (internal quotations and citation omitted). The undersigned therefore recommends that Plaintiff's Motion for Default Judgment be granted as to his § 1962(d) RICO claim. See Twombly, 550 U.S. at 570 (stating that a plaintiff must allege “enough facts to state a claim to relief that is plausible on its face” to satisfy the Rule 12(b)(6) standard).
C. Defamation
Under South Carolina law, “the tort of defamation allows a plaintiff to recover for injury to his or her reputation as the result of the defendant's communications to others of a false message about the plaintiff.” Holtzscheiter v. Thomson Newspapers, Inc., 506 S.E.2d 497, 501 (S.C. 1998). Defamatory communications take two forms: libel and slander. Id. “Slander is a spoken defamation while libel is a written defamation or one accomplished by actions or conduct.” Id. To state a cause of action for defamation, a plaintiff must show that “(1) a false and defamatory statement was made; (2) the unprivileged publication was made to a third party; (3) the publisher was at fault; and (4) either actionability of the statement irrespective of special harm or the existence of special harm caused by the publication.” Logan v. Greenville News, No. 6:18-cv-1684-TMC-KFM, 2018 WL 3371556, at *2 (D.S.C. June 22, 2018), adopted, 2018 WL 3369006 (D.S.C. July 10, 2018) (citation omitted).
Here, Plaintiff argues that “Defendants made false statements that Mr. Bakala committed misconduct in the course of his trade, profession, or occupation.” (Dkt. No. 181-1 at 13.) Plaintiff explains that “the actors hired to protest near Mr. Bakala's home carried signs stating ‘Scammer of the Decade Lives Here'” and “other ‘protestors' carried signs showing pictures of Mr. Bakala above the word ‘Scam' and ‘Fraud.'” (Id.) Moreover, Plaintiff states that “[t]he first page of StopBakala.org states that Mr. Bakala is a ‘criminal.'” (Id.)
Plaintiff further contends that “Krupa knew that each of the defamatory statements were false at the time they were made. . . . The publications of these false and defamatory statements were not privileged.” (Id. at 14) (internal citation omitted). Finally, Plaintiff contends that “Mr. Bakala suffered substantial damages due to the defamatory statements. (Id.)
Plaintiff's Amended Complaint supports Plaintiff's arguments. It states:
130. Defendants have made numerous false and defamatory statements concerning Mr. Bakala. As discussed in more detail above, these false and defamatory statements include the emails Swart and Crowds on Demand sent (at Krupa's direction) to The Aspen Institute, Dartmouth College, Blackstone Group, Round Hill Capital, the potential purchaser of NorthLine, The Design Museum, and the Dox Centre. Krupa, Swart, and Crowds on Demand also made numerous false and defamatory statements about Mr. Bakala on the StopBakala.org website. Further, paid agents of the defendants congregating outside of Mr. Bakala's property in Hilton Head, South Carolina, and in other locations carried signs directing observers to the StopBakala.org website.
131. These false and defamatory statements were published to third parties, including individuals at The Aspen Institute; Dartmouth College; Blackstone Group; Round Hill Capital; the potential purchaser of North-Line; The Design Museum; the Dox Centre; visitors and residents at Hilton Head, South Carolina; and the general public via the StopBakala.org website.
132. The emails and website referred to Mr. Bakala by name, the website included his picture, and the statements were understood by those who read them to be about and concerning Mr. Bakala.
133. The false and defamatory statements are defamatory on their face. Defendants made false statements alleging that Mr. Bakala committed misconduct in the course of his trade, profession, or occupation. Defendants also falsely stated that Mr. Bakala engaged in criminal conduct of moral turpitude.
134. Moreover, Mr. Bakala suffered damages due to Defendants' defamatory statements.
135. The publications of these false and defamatory statements were not privileged.
136. Krupa, Swart, and Crowds on Demand knew that each of the defamatory statements were false at the time they made them, or else Defendants made the statements with reckless disregard of whether they were false or not.(Dkt. No. 15 at 44-45.) Based on these excerpts, Plaintiff has sufficiently alleged the elements of defamation and his Motion should be granted as to this claim. See Logan, 2018 WL 3371556, at *2, adopted, 2018 WL 3369006 (explaining the elements a plaintiff must demonstrate to assert a defamation claim).
D. Tortious Interference
Lastly, Plaintiff claims that Defendant Krupa intentionally interfered with Plaintiff's prospective contractual relations. (Dkt. No. 15 at 45; Dkt. No. 181-1 at 15.) The elements of a cause of action for intentional interference with prospective contractual relations are: (1) intentional interference with prospective contractual relations; (2) for an improper purpose or by improper methods; (3) resulting in injury. See Charleston Advancement Academy High Sch. v. Acceleration Academies., LLC, No. 2:20-cv-01676-DCN, 2020 WL 4016256, at *7 (D.S.C. July 16, 2020) (citing Eldeco, Inc. v. Charleston Cty. Sch. Dist., 642 S.E.2d 726, 731 (S.C. 2007)).
Plaintiff's Amended Complaint alleges all three elements. After noting that Defendant Krupa hired the Swart Defendants to conduct a campaign of defamation, extortion, and harassment against Plaintiff, (Dkt. No. 15 at 13), Plaintiff explains:
92. Crowds on Demand and Adam Swart's actions have damaged Mr. Bakala's business relationships with the purchaser [of one of his companies]. Defendants are attempting to derail the as-yet uncompleted North-Line transaction. At a minimum, Swart's and Crowds on Demand's interference has weakened Mr. Bakala's negotiating position with the purchaser and may result in Mr. Bakala being required to provide additional representations or warranties. Further, Defendants' actions may make the purchaser less likely to do business with Mr. Bakala in the future. . . .
138. Defendants intentionally interfered with Plaintiff's potential contractual relations. For example, Defendants intentionally contacted numerous individuals at The Aspen Institute, Dartmouth College, The Design Museum, and the Dox Centre, four institutions with which Mr. Bakala is affiliated, and demanded that he be immediately removed from each respective Board. Further, Defendants intentionally contacted the potential buyer of NorthLine in an attempt to interfere with the transaction. The StopBakala.org website also warned investors in Citibank, Blackstone, and CBRE about potential negative consequences of doing business with Mr. Bakala.
139. Defendants contacted The Aspen Institute, Dartmouth College, the North-Line purchaser, The Design Museum, and the Dox Centre with the sole purpose of harming Mr. Bakala, and did so using improper methods and means.
140. Defendants' conduct has caused injury to Mr. Bakala's business relationships.(Id. at 33, 45.) Plaintiff's Motion for Default Judgment further explains:
Krupa and the Swart Defendants intentionally interfered with Mr. Bakala's current and potential contractual relations with the intent to harm Mr. Bakala. For example, Defendants intentionally contacted numerous individuals at the Aspen Institute, Dartmouth College, and The Design Museum, three institutions with which Mr. Bakala is affiliated, and demanded that he be immediately removed from each respective Board. Defendants also intentionally contacted Blackstone Group, a multinational private equity and financial services firm, and Round Hill Capital, a global real estate investment firm, to defame Mr. Bakala and interfere with his actual or potential business relationships with those entities. Defendants intentionally contacted the potential buyer of the Forum Karlin in an attempt to tortiously interfere with Mr. Bakala's sale of the property. StopBakala.org website also warned investors in Berkshire Hathaway, Wellington Management Company, Fidelity Investments, JP Morgan Chase, and Blackstone about potential negative consequences of doing business with Mr. Bakala, and social media posts by defendants made similar warnings to investors in Citibank and CBRE. Defendants' conduct has caused injury to Mr. Bakala's business relationships.(Dkt. No. 181-1 at 15.)
Plaintiff has demonstrated that Defendant Krupa intentionally interfered with Plaintiff's prospective contractual relations for an improper purpose and by improper methods, resulting in injury to Plaintiff. Eldeco, Inc., 642 S.E.2d at 731. Plaintiff outlines several business opportunities with which Defendant Krupa has interfered. (Dkt. No. 15 at 21-34.) Plaintiff explains that Defendant Krupa's interference with these prospective contractual relations was for an improper purpose-as part of a harassment campaign against Plaintiff. (See generally Dkt. No. 15.) Plaintiff also explains that Defendant Krupa's interference was conducted by improper methods, i.e., protests and defamatory statements. (Id.) Further, Plaintiff alleges that Defendant Krupa's improper interference has injured his business relationships. (Id. at 45.) Thus, Plaintiff has alleged facts sufficient to state a claim to relief for tortious interference that is plausible on its face, and the undersigned therefore recommends that Plaintiff's Motion be granted with respect to this claim. See Twombly, 550 U.S. at 570 (stating that a plaintiff must set forth “enough facts to state a claim to relief that is plausible on its face” to satisfy the Rule 12(b)(6) standard).
II. Requested Relief
A. Damages
Having recommended that liability is established with respect to each of Plaintiff's claims, the undersigned must next determine damages. EEOC v. Carter Behavior Health, No. 4:09-cv-122-F, 2011 WL 5325485, at *4 (E.D. N.C. Oct. 7, 2011) (citing Ryan, 253 F.3d at 780- 81) (“If the court finds that liability is established, it must then determine damages.”).
The Federal Rules of Civil Procedure require that a default judgment must not “differ in kind from, or exceed in amount, what is demanded in the pleadings.” Fed. R. of Civ. P. 54(c). When the damages amount is not a sum certain, the Court may convene an evidentiary hearing, or rely on affidavits or other documentary evidence in the record to determine the appropriate sum. J&J Sports Productions, Inc. v. Romenski, 845 F.Supp.2d 703, 706 (W.D. N.C. 2012).
Plaintiff's Amended Complaint seeks the following relief:
a. Actual damages in excess of $75,000, together with compensatory, consequential, treble, and punitive damages, with pre-judgment and post-judgment interest thereon at the highest rate allowed by law;
b. A preliminary and permanent injunction preventing Defendants from continuing their orchestrated harassment campaign against Mr. Bakala;
c. Attorneys' fees and costs of court as allowed by law; and,
d. All other relief, legal or equitable, to which Mr. Bakala shows himself entitled.(Dkt. No. 15 at 46.) Plaintiff's Motion for Default Judgment requests that Plaintiff be awarded: (1) actual damages in the amount of $24,452,906.00 (before trebling under the RICO statute); (2) attorney fees and costs in the amount of $2,828,817.76; and (3) permanent injunctive relief. (Dkt. No. 181-1 at 16-20.)
In support of the damages requested in his Motion for Default Judgment, Plaintiff has submitted a personal declaration attesting to at least $24,452,906.00 in actual damages. (Dkt. No. 181-30 at 9.) Plaintiff requests that his damages be trebled to $73,358,718.00, pursuant to the RICO statute. (Id.) More specifically, Plaintiff explains:
19. As set forth in detail in the Amended Complaint, Krupa tried to extort payment from me in the amount of $23 million. I have learned from documents produced by Swart and Crowds on Demand and from the declaration and deposition of Swart that Krupa paid Swart and Crowds on Demand a total of approximately $1,452,906 during the period of 2018 through 2019.
20. It is impossible for me to put a precise monetary value upon the damages inflicted upon me by Krupa, but I think it is reasonable to place that value at at least the amount Krupa sought to extort from me, plus the amount he paid to Swart and Crowds on Demand. Although money damages will never fully compensate me for the injury that has been caused to my reputation as well as the fear, distress, mental anguish, and concern I have experienced for the safety of my family and friends, it is my sincere belief that this amount represents a reasonable level of recompense for the injuries that Krupa's wrongful actions have caused me.
21. Accordingly, I request an entry of judgment against Krupa in the amount of $24,452,906.00, trebled to $73,358,718.00 pursuant to the RICO statute, together with attorney fees and expenses in the amount of $2,828,817.76 which I incurred in prosecuting this lawsuit, as set forth in the Declaration of Marshall Winn filed separately in this case.(Id.) As Plaintiff notes, he has submitted a declaration from attorney Marshall Winn to justify his requested attorney fees and costs. (Dkt. No. 181-31.) Mr. Winn's declaration includes a forty-three-page appendix detailing services provided by Wyche, P.A. and a thirty-six-page appendix describing work completed by Quinn Emanuel Urquhart & Sullivan, LLP. (Id.)
Plaintiff is correct that any person injured in his business or property shall recover three times the actual damages sustained and reasonable attorney's fees under § 1964(c) of RICO. See 18 U.S.C. § 1964(c). However, the undersigned notes that a defendant does not concede damages by default. See Fed. R. Civ. P. 8(b) (“An allegation-other than one relating to the amount of damages-is admitted if a responsive pleading is required and the allegation is not denied.”). Rather, “[t]he court must make an independent determination regarding damages and cannot accept as true factual allegations of damages.” Int'l Painters & Allied Trades Indus. Pension Fund v. Capital Restoration & Painting Co., 919 F.Supp.2d 680, 684 (D. Md. 2013) (citing Lawbaugh, 359 F.Supp.2d at 421).
Although the undersigned recognizes that “in some circumstances a district court entering a default judgment may award damages ascertainable from the pleadings without holding a hearing, ” the undersigned cannot determine Plaintiff's appropriate damages with sufficient certainty based on the documents currently in the record. Anderson, 155 F.3d at 507; see also Frame v. S-H, Inc., 967 F.2d 194, 204 (5th Cir. 1992) (“If the damages can be computed with certainty by reference to the pleadings and supporting documents alone, an evidentiary hearing may not be necessary.”). Plaintiff states only that he “think[s] it is reasonable” to recover $24,452,906.00, trebled to $73,358,718.00. (Dkt. No. 181-30 at 9.) The undersigned therefore recommends that the Court conduct an evidentiary hearing to determine whether the amount of Plaintiff's requested damages is appropriate. See Fed. R. Civ. P. Rule 55(b)(2) (stating that the Court may conduct a hearing “when, to enter or effectuate judgment, it needs to: (A) conduct an accounting; (B) determine the amount of damages . . . .”); see also Cascade Capital, LLC v. DRS Processing LLC, No. 3:17-cv-0470-RJC, 2018 WL 310134, at *7 (W.D. N.C. Jan. 5, 2018) (ordering that plaintiff's Motion for Default Judgment be granted and reserving question of damages for evidentiary hearing); Auld v. Montoya-Hernandez, Civil No. ELH-11-0969, 2012 WL 1379452, at *7 (D. Md. Apr. 17, 2012) (recommending that the Court: (1) grant plaintiff's Motion for Default Judgment with regard to liability; (2) enter a default judgment in plaintiff's favor; and (3) hold an evidentiary hearing to determine the amount of damages); Virgin Records Am., Inc. v. Lacey, 510 F.Supp.2d 588, 593 (S.D. Ala. 2007) (noting that an entry of default judgment “in no way obviates the need for determinations of the amount and character of damages”).
Though Plaintiff has provided a detailed breakdown of the attorney fees and costs incurred throughout the course of this litigation, the undersigned recommends that the Court reserve all questions regarding monetary damages for the evidentiary hearing, so that Plaintiff's award of damages may be decided as a whole. (Dkt. No. 181-31.)
B. Permanent Injunctive Relief
Plaintiff further argues that he is entitled to permanent injunctive relief under § 1964(a) of RICO. (Dkt. No. 181-1 at 18.) Plaintiff requests “an order that requires Krupa to cease permanently his extortion campaign against Mr. Bakala.” (Id.) More specifically, Plaintiff seeks an order instructing Defendant Krupa to:
cease any and all activities, directly or indirectly - including any acts that disparage Mr. Bakala, discourage others from associating with him, or interfere with, harass, or disrupt him - against Mr. Bakala and/or any persons or entities reasonably known by Krupa to be associated or affiliated with Mr. Bakala, including but not limited to: (A) Dartmouth College and Dartmouth's Tuck School of Business; (B) Blackstone Group and Round Hill Capital; (C) The Aspen Institute; (D) Berkshire Hathaway; (E) North-Line a.s.; (F) The Design Museum; (G) The Dox Centre for Contemporary Art; (H) Quick Step Bicycle Team, the Vaclav Havel Library, (I) Swiss Foundations, (J) Conservatoire de l'Ouest Vaudois; and (K) any of Mr. Bakala's business, charitable, or personal relationships, activities, or endeavors reasonably known to Krupa to be associated with Mr. Bakala (A-K above, the “Bakala Associated Parties”)[.](Id. at 18-19.) Plaintiff also requests an order directing Defendant Krupa “to refrain in the future from directly or indirectly engaging in any similar activities involving the Bakala Associated Parties which disparage Bakala.” (Id. at 19.)
“The decision whether to grant or deny injunctive relief rests within the equitable discretion of the district courts, and [] such discretion must be exercised consistent with traditional principles of equity . . . .” eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 394 (2006). As noted above, Plaintiff argues that he should be granted injunctive relief under § 1964(a) of RICO. (Dkt. No. 181-1 at 18.) Section 1964(a) authorizes the Court to “issu[e] appropriate orders, including, but not limited to: . . . imposing reasonable restrictions on the future activities or investments of any person, including, but not limited to, prohibiting any person from engaging in the same type of endeavor as the enterprise engaged in, the activities of which affect interstate and foreign commerce . . . .” 18 U.S.C. § 1964(a).
However, an analysis of relevant case law suggests that injunctive relief is not an available remedy under the RICO statute. See Johnson v. Collins Entertainment Co., 199 F.3d 710, 726 (4th Cir. 1999) (faulting the district court's reliance on its “inherent equitable power” to issue an injunction, noting that “[n]o federal statute expressly authorized the relief that [the] plaintiffs sought, ” because § 1964(c) of RICO “makes no mention whatever of injunctive relief, ” creating “‘substantial doubt whether RICO grants private parties . . . a cause of action for equitable relief'” (quoting Dan River, Inc. v. Icahn, 701 F.2d 278, 290 (4th Cir. 1983))); see also Hengle v. Asner, 433 F.Supp.3d 825, 880-86 (E.D. Va. 2020), appeal granted, No. 3:19-cv-250-DJN, 2020 WL 855970 (E.D. Va. Feb. 20, 2020) (finding that “RICO does not provide private plaintiffs with a right to injunctive relief” after discussing approaches of sister circuit courts and analyzing congressional intent in enacting RICO statute); B2Gold Corp. v. Christopher, No. 1:18-cv-1202-TSE-IDD, 2019 WL 4934969, at *16 (E.D. Va. July 10, 2019), adopted in part, rejected in part, 2019 WL 4015890 (E.D. Va. Aug. 26, 2019) (“Although the Fourth Circuit has yet to expressly address this issue, dictum indicates that the Fourth Circuit and its district courts align themselves with the Ninth Circuit's ruling . . . that injunctive relief is not available to a private party in a civil RICO action.”); Potomac Elec. Power Co. v. Elec. Motor & Supply, Inc., 119 F.Supp.2d 546, 551 (D. Md. 2000) (refraining to provide equitable relief under RICO), aff'd in part, rev 'd in part on other grounds, and remanded by 262 F.3d 260 (4th Cir. 2001); see generally 18 U.S.C. § 1964. Accordingly, the undersigned recommends that Plaintiff be ordered to show cause as to why injunctive relief is an appropriate remedy given the aforementioned case law.
The undersigned notes that Plaintiff does not request injunctive relief as a separate cause of action in his Amended Complaint. (See Dkt. No. 15.) Rather, Plaintiff requests “[a] preliminary and permanent injunction preventing Defendants from continuing their orchestrated harassment campaign against Mr. Bakala” in the Prayer for Relief section of his Amended Complaint. (Id. at 46.) Further, Plaintiff's Motion for Default Judgment only argues that Plaintiff is entitled to permanent injunctive relief under 18 U.S.C. § 1964(a). (Dkt. No. 181-1 at 18-19.) To the extent Plaintiff contends that he is entitled to permanent injunctive relief based on his defamation and/or tortious interference claims, the undersigned recommends that Plaintiff address those contentions in his response to the Court's order to show cause.
CONCLUSION
Based on the above, the undersigned RECOMMENDS that Plaintiffs Motion for Default Judgment as to Defendant Krupa (Dkt. No. 181) be GRANTED with respect to liability, and that a default judgment be ENTERED in Plaintiffs favor. The undersigned further RECOMMENDS that the Court schedule a hearing to determine the appropriate amount of damages to be awarded to Plaintiff. In addition, the undersigned RECOMMENDS that Plaintiff be ordered to show cause as to why injunctive relief is an appropriate remedy under 18 U.S.C. § 1964.
IT IS SO RECOMMENDED.
Notice of Right to File Objections to Report and Recommendation
The parties are advised that they may file specific written objections to this Report and Recommendation with the District Judge. Objections must specifically identify the portions of the Report and Recommendation to which objections are made and the basis for such objections. “[I]n the absence of a timely filed objection, a district court need not conduct a de novo review, but instead must ‘only satisfy itself that there is no clear error on the face of the record in order to accept the recommendation.'” Diamond v. Colonial Life & Acc. Ins. Co., 416 F.3d 310 (4th Cir. 2005) (quoting Fed.R.Civ.P. 72 advisory committee's note).
Specific written objections must be filed within fourteen (14) days of the date of service of this Report and Recommendation. 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b); see Fed. R. Civ. P. 6(a), (d). Filing by mail pursuant to Federal Rule of Civil Procedure 5 may be accomplished by mailing objections to:
Robin L. Blume, Clerk
United States District Court
Post Office Box 835
Charleston, South Carolina 29402
Failure to timely file specific written objections to this Report and Recommendation will result in waiver of the right to appeal from a judgment of the District Court based upon such Recommendation. 28 U.S.C. § 636(b)(1); Thomas v. Arn, 474 U.S. 140 (1985); Wright v. Collins, 766 F.2d 841 (4th Cir. 1985); United States v. Schronce, 727 F.2d 91 (4th Cir. 1984).