Opinion
Civil Action No. 01-CA-7269.
May 10, 2004
Memorandum and Order
Michael Breslin brought suit against numerous defendants, alleging a deprivation of his federal civil rights under 42 U.S.C. § 1983 (Count I); a state law conspiracy claim (Count II); a substantive violation of the Racketeering Influenced and Corrupt Organizations Act ("RICO") under 18 U.S.C. § 1962(c) (Count III); and a RICO conspiracy claim under 18 U.S.C. § 1962(d) (Count IV). Defendants moved for summary judgment as to Counts II, III, and IV. I granted their motion and entered judgment against the plaintiff on Counts III and IV of the Amended Complaint and dismissed Count II of the Amended Complaint without prejudice. October 14, 2003 Memorandum and Order (Doc. No. 155).
I previously granted the motion for summary judgment of David M. Knorr who was the sole defendant in Count I.
Defendant McNamara moved for summary judgment pursuant to Rule 56(c) of the Federal Rules of Civil Procedure as to Counts II, III, and IV; defendants Brainard, Reilly, Oswald, Argeros, Heim and Vanderwoude moved for summary judgment pursuant to Rule 56(c) as to Counts II, III, and IV; and defendants International Brotherhood of Teamsters, Hoffa, Smith and Keyser moved for summary judgment pursuant to Rule 56(c) as to Counts II, III, and IV.
Now before me is Breslin's motion for reconsideration, defendants' opposition and memorandum in support of their opposition, Breslin's reply, the oral arguments of the parties and supplemental briefs by all parties. Breslin contends that there was a clear error of law and that reconsideration is necessary to prevent manifest injustice. Breslin's motion for reconsideration will be denied because he has failed to establish, under the standards promulgated by the Third Circuit, that I should reverse my decision because it contained a clear error of law or will cause manifest injustice. North River Ins. Co. v. Cigna Reinsurance Co., 52 F.3d 1194 (3d. Cir. 1995).
Standard of Review
Federal Rule of Civil Procedure 59(e) provides that a party may bring a motion for reconsideration within ten days of the entry of the judgment. Fed.R.Civ.Pro. 59(e). The "purpose of a motion for reconsideration is to correct manifest errors of law or fact or to present newly discovered evidence." Harsco Corp. v. Zlotnicki, 779 F.2d 906, 909 (3d Cir. 1985). A motion for reconsideration will be granted only if: (1) new evidence becomes available; (2) there has been an intervening change in the controlling law; or (3) a clear error of law or manifest injustice must be corrected. NL Indus. v. Commerical Union Ins. Co., 65 F.3d 314, 324 n. 8 (3d Cir. 1995).
Plaintiff brings this motion in accordance with Local Rule 7.1(g).
DISCUSSION
Plaintiff argues pursuant to the third ground for reconsideration that this court overlooked certain facts and failed to make certain inferences and that these deficiencies "resulted in manifest errors of law and fact." Plaintiff asks this court to grant its motion for reconsideration and to vacate the October 14, 2003 Memorandum and Order.
In that memorandum and order, I found that the defendants' alleged illegal trafficking of contraband cigarettes and their alleged operation of an illegal gambling business could not be considered predicate acts in support of plaintiff's RICO claim. I explained that plaintiff failed to initially plead these acts and that plaintiff failed to offer any evidence that this conduct, if proved, was in any way the proximate cause of his injury. Without these predicate acts, plaintiff's claim failed for lack of continuity.
Plaintiff contends that he did initially plead these acts but that this court overlooked facts in the RICO Case Statement that specifically discussed the gambling and cigarette trafficking as it related to plaintiff's RICO counts. Plaintiff also argues that this court overlooked factual and legal references to the record with regard to causation. These two deficiencies will be considered in turn.
I. Whether the Court Overlooked Facts in the RICO Case Statement
Plaintiff argues that the RICO Case Statement is a pleading that may be considered part of the operative complaint. Pl.'s Memo. at 5 (citing Lorenz v. CSX Corp., 1 F.3d 1406 (3d Cir. 1993); Allen Neurosurgical Assoc., Inc. v. LehighValley Network, 2001 WL 41143 at *3 (E.D. Pa. 2001); Smith v. Berg, 1999 WL 1081065 at *3-5 (E.D. Pa. 1999)).
Each of these cases reviews the RICO Case Statement to determine whether the plaintiff alleged sufficient facts.
Plaintiff argues that in declining to consider the cigarette trafficking and gambling business as predicate acts, the court overlooked portions of the Rico Case Statement that expressly listed the cigarette and gambling act violations as predicate acts. Pl.'s Memo. at 3-5. Plaintiff points to several instances in which he claims the court overlooked language which made clear that plaintiff alleged these violations as predicate acts. Id.
First, plaintiff points to a paragraph on page 12 of the RICO Case Statement to show that he referred to the cigarette trafficking violation as a predicate act. Id. at 3. There, plaintiff describes defendant Reilly's and defendant Vanderwoude's trafficking of contraband cigarettes, in violation of 18 U.S.C. § 2341-2346. Id. Plaintiff underscores his statement that "[d]iscovery is continuing with regard to defendants' participation in the remaining predicate acts" as evidence to show that he characterized this violation as a predicate act in the RICO Case Statement. Id. (emphasis in plaintiff's memorandum).
Second, plaintiff points to pages 12-13 of his RICO Case Statement where he referred to trafficking in contraband cigarettes, operating illegal gambling businesses, and submitting false claims to the Local 115 health and welfare fund as predicate acts. RICO Case Statement at 12-13. There, plaintiff added that "the predicate acts of economic extortion and witness intimidation directed toward plaintiff were part of the larger pattern of racketeering and are related to each other as part of a common plan which amount to or threaten continuous criminal activity." Id.
Finally, when asked to describe the direct causal relationship between the alleged injury and the violation of the RICO statute, the plaintiff answered: Breslin's loss was "directly caused by the defendants' violations of 18 U.S.C. § 1951(b)(2) and 18 U.S.C. § 1512(b)(1), which were engaged in in an effort to prevent the detection of defendants' trafficking in contraband cigarettes, . . ., operating illegal gambling businesses, . . . and submitting false claims to the Local 115 health and welfare fund." Id. (citing RICO Case Statement at 15).
Plaintiff also notes that he referred to the cigarette and gambling act violations as predicate acts in response to other inquiries. RICO Case Statement, see Response Nos. 2 at 4; 3a(1) (2) at 7; and 3a(5) at 9.
In footnote 11 of its order, the court gave two reasons that these alleged acts by the defendants could not be called predicate acts. The court began by explaining that plaintiff failed to mention these acts at all in his 18 page, 61 paragraph amended complaint:
When describing his claim under 18 U.S.C. § 1962(c), plaintiff listed only the witness tampering and extortion acts as predicate acts. Amend. Compl. at ¶¶ 57, 58. There was no mention of the illegal trafficking in contraband cigarettes or the operation of an illegal gambling business under Count III of the amended complaint. Amend. Compl. at ¶¶ 55-59.
The court then noted that the plaintiff mentioned the cigarette and gambling acts only in its RICO Case Statement. But even there, the court found that it was not evident that plaintiff was asserting these acts as predicate acts for purposes of his § 1962(c) claim. The court noted that when asked to describe the predicate acts underlying his claim, the plaintiff stated "[t]he predicate acts as they relate to plaintiff include witness intimidation and economic coercion," which the court assumed was in reference to 18 U.S.C. § 1512 (relating to witness tampering) and 18 U.S.C. § 1951 (relating to extortion). RICO Case Stmt. at 11. The court also noted that the plaintiff first mentioned the cigarette and gambling acts when he was describing the predicate acts of witness tampering and extortion:
The purpose of these predicate acts [meaning the witness tampering and extortion acts] was to ensure plaintiff would not reveal the existence of the pre-Local 115 trusteeship agreement, the existence of which would cast into doubt the validity of the "emergency" trusteeship and possibly lead to the discovery of the predicate acts of trafficking in contraband cigarettes, in violation of 18 U.S.C. § 2341-2346, operating illegal gambling businesses, in violation of 18 U.S.C. § 1955, and submitting false claims to the Local 115 health and welfare fund, in violation of 18 U.S.C. § 664.
RICO Case Stmt. at 11.
On the basis of these findings, the court concluded that plaintiff never expressly listed the cigarette and gambling act violations as predicate acts for the 1962(c) claim. A fair inference is that these alleged violations of the law were belatedly added by the plaintiff in an effort to establish a claim of continuity. Even if this is not correct, and if correct not fatal to the plaintiff, the language used by the plaintiff is that the purpose of the predicate acts alleged in the amended complaint (witness tampering and extortion) was to prevent disclosure of other criminal acts (cigarette smuggling and gambling), not that these latter acts themselves were predicate acts themselves for the ultimate RICO violation.
Plaintiff did not identify the alleged conduct as predicate acts in his RICO Case Statement as clearly as he could have, making it difficult to interpret his pleadings. However, giving the plaintiff the benefit of every doubt, I will assume for purposes of the motion that the plaintiff has sufficiently included cigarette trafficking and illegal gambling as predicate acts in his pleadings. The causation question remains.
Even if the cigarette trafficking and illegal gambling activities are considered for the "continuity" prong of establishing a pattern of racketeering, they do not satisfy the "relatedness" prong. To be related, acts must have the same or similar purposes, results, participants, victims or methods of commission, or otherwise . . . interrelated by distinguishing characteristics. Plaintiff was given the benefit of every possible inference when I found the alleged predicate acts of extortion and tampering with a federal witness to be related. However, the trafficking in contraband cigarettes and illegal gambling do not share any of these factors and are not related.
II. Whether the Court Overlooked Factual and Legal Matters with Regard to Causation
Plaintiff also argues that the court improperly dismissed the predicate acts of trafficking contraband cigarettes and operating illegal gambling for purposes of considering the § 1962(c) claim on the basis that the plaintiff could not show that termination of Breslin's job was caused by these acts. Pl.'s Memo. at 5. Plaintiff contends that the court overlooked facts that show causation as well as the legal standard that allows a plaintiff to prove causation by circumstantial evidence. Pl.'s Memo. at 6.
This court found that "[e]ven the most generous reading of the record does not allow a reasonable inference that the decision of the Huff Paper Co. to terminate plaintiff's employment was caused by the acts of some of the defendants who allegedly engaged in cigarette trafficking and illegal gambling." Memorandum and Order at 15 n. 11. The court also noted that plaintiff failed to offer any facts in support of the allegation that these acts caused the loss of Breslin's job. Id. The court concluded that the plaintiff could not establish a causal connection between the defendants' alleged conduct and the loss of his job.
Plaintiff argues that defendants' alleged violations of 18 U.S.C. § 2341-2346 and 18 U.S.C. § 1955 led to Breslin's termination. Pl.'s Memo. at 6 (citing Pl.'s Statement of Claims and Citations to the Supporting Evidence at 24). Plaintiff argues causation on the basis that the defendants who were involved in the alleged cigarette trafficking violations were the same defendants involved in the witness tampering. Id. Plaintiff asserts that "nobody bothered plaintiff" until these defendants were under scrutiny for their alleged cigarette trafficking and gambling violations. Id. This scrutiny, the plaintiff argues, "led to the conduct intended to keep Breslin quiet and ultimately caused his injury." Id.
In order to have standing to bring suit under RICO, a plaintiff must allege facts sufficient to establish that the RICO pattern of racketeering activity complained of is the proximate cause of the plaintiff's injuries. The circumstantial evidence, as presented by plaintiff, does not invite a logical inference that the alleged cigarette trafficking and gambling violations caused Breslin's job loss. Plaintiff's causation argument is now that some of the defendants were involved in cigarette trafficking and illegal gambling activities. They feared that these actions would be disclosed by Morris; therefore, they sought an emergency trusteeship in order to supplant Morris as the union head and engaged in witness tampering and extortion in order to further the emergency trusteeship. These latter actions resulted in plaintiff's arrest for a violation of parole by an independent state parole agent which resulted in a decision by the independent Pennsylvania Board of Probation and Parole (after hearing with plaintiff being represented by counsel) that plaintiff was in violation of parole resulting a period of incarceration, which period of incarceration caused Huff Paper Company to independently decide to terminate plaintiff's job. To state this strained chain of circumstances is to reveal the obvious lack of merit in plaintiff's claim of proximate causation. The burden is on the plaintiff to present sufficient evidence of proximate cause through either direct or circumstantial evidence. Breslin himself states that the "reason [he] ceased to appear at work was defendants' successful implementation of their violation of 18 U.S.C. § 1512 (relating to witness tampering)." At oral argument, plaintiff agreed that the acts involved in cigarette trafficking and illegal gambling did not involve and were not directed at Breslin. Indeed, Breslin denied at his deposition that he had knowledge of either and plaintiff does not contend that Breslin had knowledge of either. No reasonable fact-finder could infer that Breslin's job loss was proximately caused by the alleged cigarette trafficking and gambling violations. As a result, Breslin lacks standing to pursue those alleged violations as predicate acts.
Plaintiff also argues that this court overlooked the legal standard with regard to the number of predicate acts from which an injury must occur. Plaintiff argues that he need only establish an injury caused by a single act of racketeering or an act that is otherwise wrongful under RICO. Id. (citing Beck v. Prupis, 529 U.S. 494, 505 (2000)). Breslin contends that the court has found that the witness tampering violation is a predicate act under RICO, and therefore, plaintiff need not also demonstrate a causal connection between his injury and any of the other predicate acts. Pl.'s Memo. at 7. He argues that he need not demonstrate that his injury is caused by each and every act that constitutes the pattern of racketeering. Id. at 8. Instead, plaintiff contends that he need only demonstrate that "all alleged members who participated at one time or another were part of an ongoing enterprise with a shared `organizational pattern' and `system of authority.'" Id. at 7 (citing U.S. v. Parise, 159 F.3d 790, 795).
Plaintiff misreads Beck for the proposition that the plaintiff need only show that injury was caused by one predicate act. Plaintiff relies on the following language for his argument that causation may be shown by only one predicate act: "we conclude that injury caused by an overt act that is not an act of racketeering or otherwise wrongful under RICO . . . is not sufficient to give rise to a cause of action." This statement by the Court in Beck does not specifically provide the rule of law that plaintiff hopes for and cannot be read so narrowly. Plaintiff also cites Parise for the proposition that continuity is established because defendants "were part of an on-going enterprise with a shared `organizational pattern' and `system of authority'"; however, Parise's rule does not dispense with the causation requirement as plaintiff suggests. The Supreme Court has found that "[t]he compensable injury necessarily is the harm caused by predicate acts sufficiently related to constitute a pattern, for the essence of the [1962(c)] violation is the commission of [predicate] acts in connection with the conduct of an enterprise. . . . Any recoverable damages occurring by reason of a violation of § 1962(c) will flow from the commission of predicate acts." Sidema v. Imrex Co., 473 U.S. 479, 497 (1985) (emphases added). Plaintiff must demonstrate a causal nexus between the predicate acts and his injury. Kramer v. Bachan Aerospace Corp., 912 F.2d 151, 154 (6th Cir 1990); Morast v. Lance, 807 F.2d 926, 933 (11th Cir. 1987). Plaintiff has failed to make this showing.
Plaintiff argues without explanation that Kramer can be "of no guidance in the case at bar" because it is the "existence of defendants' conduct in violation of 18 U.S.C. § 1512 (relating to witness tampering) which makes Mr. Breslin different from the plaintiff in Kramer." Plaintiff fails to explain why this should have any bearing on the application of Kramer, and the other circuit cases upon which Kramer relies, to Breslin's case.
Order
And now, this ____ day of May, 2004, upon consideration of plaintiff's motion for reconsideration pursuant to Fed.R.Civ.P. 59(e) (Doc. #157), defendants' opposition thereto and memorandum of law in support thereof, plaintiff's reply and after oral argument and supplemental briefing, it is hereby ORDERED that plaintiff's motion for reconsideration is DENIED.