Opinion
No. 99 C 2504.
March 27, 2001.
ORDER
Facts
The following facts are taken from plaintiffs' amended complaint and are assumed to be true for the purposes of this motion to dismiss.
Vehicles that are abandoned, involved in accidents, or otherwise unable to move need to be towed (called "TBT" vehicles). The Lake County Sheriff's Department dispatches towing companies according to the following protocol. If the vehicle operator requests a specific towing company, an officer will have a dispatcher call the specific company selected by the vehicle operator. If the vehicle operator does not request a specific towing company, then the dispatcher calls upon "the towing company in whose Sheriff-approved ¶ `territory' that TBT vehicle is located, and requests a tow from that company." (Am. Compl. 21.) Roger Whitmore ("Whitmore"), who owns Roger Whitmore's Automotive Service, Inc. ("Whitmore's"), operates a tow service and was listed on the "Towing List" from which the Sheriff calls towers for TBT vehicles. Whitmore's was also allocated a certain piece of territory in Lake County. If a TBT vehicles was located in this territory and the vehicle's driver had not requested a specific tower, Whitmore's was given the business of towing the vehicle.
Gary Del Re is the Sheriff of Lake County. He won both the primary and general elections for county sheriff in 1998. The primary election occurred in April, 1998, and the general election occurred in November, 1998.
During the primary election, plaintiffs supported Del Re's opponent, Willie Smith. Plaintiffs allege that Del Re's partisans approached them during the election and asked why they were not supporting Del Re. Despite plaintiffs' support of Smith and the subsequent election of Del Re as county sheriff, plaintiffs were assured, after the election, that Whitmore's towing services would not be adversely affected.
Plaintiffs allege that during Del Re's election campaigns, Del Re received bribes in the form of campaign contributions from at least two towers, Max Johnson and Kevin DePerte, in exchange for increases in their towing territories. Plaintiffs allege that following the Johnson transaction, Del Re directed the mailing of letters to towers in April, 1999 purporting to modify their towing territories slightly in order to "maintain organizational efficiency." (Am. Compl. ¶ 34.) In addition, plaintiffs allege that Del Re, Gary Stryker (the undersheriff), Johnson, Wally Herman, and Edward Kohlmeyer visited towers in order to pressure them into giving campaign contributions. Plaintiffs allege that Del Re threatened them with reduced business if they did not give money to his campaign. Plaintiffs also allege that Del Re's campaign sent mailings in which Del Re invited towers to purchase fundraising tickets. Plaintiffs allege that these mailings were sent to raise money and again pressure towers into making contributions out of fear of retribution. They further further allege that Del Re used some of his fund-raisers, Thomas Crichton, Jack Alan Diamond and Nick Gountanis, to help solicit and negotiate the sale of towing territories, usually over the telephone, in exchange for campaign contributions.
After the election of Del Re as county sheriff, plaintiffs allegedly lost 50% of Whitmore's towing territory and 75% of its towing business to Max Johnson. Plaintiffs trace their loss of business to the defendants' alleged pattern of racketeering, fraud, conspiracy, and intentional interference with prospective business advantage as well as to retribution for plaintiffs' support of Del Re's opponent in the primary.
Analysis
The purpose of a motion to dismiss is to test the sufficiency of the complaint, not to decide its merits. Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990). A court should dismiss a claim only if "it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations of the complaint." Cook v. Winfrey, 141 F.3d 322, 327 (7th Cir. 1998) (citations omitted). The court must accept all well-pleaded factual allegations in the light most favorable to the plaintiff. Colfax Corp. v. Illinois State Toll Highway Auth., 79 F.3d 631, 632 (7th Cir. 1996).
Counts 1-4: RICO
Plaintiffs attempt to allege violations of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1961 et seq. ("RICO"). In Counts 1-4 of the amended complaint, plaintiffs allege that various combinations of defendants violated 18 U.S.C. § 1961(a), (b), (c), and (d).
Plaintiffs agree that Lake County is not a proper defendant (Pl. Resp. at 3, n. 1).
Plaintiffs' pleading method consists of setting out fifty-four paragraphs of alleged factual material followed by the four RICO counts, each consisting of nothing but legal boilerplate, alleged as to all or most of the defendants without differentiation. Plaintiffs have made no effort to guide the court to an understanding of what factual allegations are relied on to state each RICO claim. This pleading method leaves it entirely to the court and the defendants to try to discern what factual allegations plaintiffs rely on to make out each alleged RICO violation and then to try to assess whether the claims, as they imagine them, are adequate.
A RICO plaintiff is not excused from the strictures of Rule 8. See Vicom, Inc. v. Harbridge Merchant Services, Inc., 20 F.3d 771, 775 (7th Cir. 1994). The plaintiff must give the court and the defendants notice of what is being claimed. This is particularly true in RICO cases where the facts and legal theories are extremely complex. The court must ensure that each element of RICO is adequately pleaded, and it cannot do so — without inordinate effort and guesswork on its own part — when the plaintiffs have failed even to attempt to describe what they rely on to make out each RICO element.
The court will not take the time to point out specifically all the pleading defects in plaintiffs' RICO claims since they are legion. Suffice it to say, as just one example, that to attempt to allege a RICO conspiracy as plaintiffs do in paragraph 55, when the Seventh Circuit has made perfectly clear the degree of specificity required as to each defendant, see, e.g., Goren v. New Vision, Int'l, Inc., 156 F.3d 721, 727 (7th Cir. 1998), borders on the sanctionable.
Accordingly, Counts 1 through 4 are dismissed. Plaintiffs may replead, but if they do, they must provide a minimum of the following information as to each RICO claim: (1) who the plaintiff[s] and the defendant[s] are; (2) the elements of that RICO claim together with the factual allegations relied on to make out each element (and in the case of allegations of fraud, facts pled with particularity); (3) what plaintiffs rely on to show the requisite connection between the alleged RICO violation and the injury plaintiffs suffered; and (4) the specific predicate acts underlying the RICO activity and their dates of occurrence. To guide plaintiffs in any attempt to replead, the court is attaching to this order a copy of an order from the United States District Court for the Western District of Pennsylvania, used by Judge Shadur of this court, which lists the RICO elements and sets forth basic information which must be provided as to each claim. Plaintiffs should provide the information called for, to the extent it is relevant to their claims, either in their complaint or in a "RICO Statement" filed with their complaint.
The court has struggled greatly, and without success, to make sense of this pleading. Its willingness to work this hard for plaintiffs is exhausted. Plaintiffs will be given one last chance to replead. If they choose to do so, they must file a motion seeking leave within 30 days. The defendants need not respond to any new RICO pleading until the court has satisfied itself that it can tell, from reading the complaint and any RICO Statement which accompanies it, what plaintiffs rely on to satisfy the elements of each RICO claim.
Count 5-Conspiracy to Commit Common Law Fraud
All the defendants move to dismiss this count for various pleading inadequacies, particularly in meeting the particularity standard of Rule 9(b) and adequately alleging a conspiracy.
In order to state a claim for conspiracy, a complaint must allege (1) an agreement between at least two people for the purpose of accomplishing some unlawful purpose or some lawful purpose by unlawful means, and (2) at least one tortious act by one of the co-conspirators in furtherance of the agreement. See Adcock v. Brakegate, Ltd., 164 Ill.2d 54, 62, 645 N.E.2d 888, 894 (Ill.App.Ct. 1994). In order to state a claim for common law fraud in Illinois, a plaintiff must allege: (1) a false statement of material fact; (2) the party making the statement knew or believed it to be untrue; (3) the party to whom the statement was made had a right to rely on the statement; (4) the party to whom the statement was made did rely on the statement; (5) the statement was made for the purpose of inducing the other party to act; and (6) the reliance by the person to whom the statement was made led to that person's injury. See Typographics, Inc. v. I.M. Estrada Co., 2000 WL 10006572, *2 (N.D.Ill. July 19, 2000).
Besides incorporating the previous eighteen pages of the Amended Complaint by reference, Count 5 consists of two brief paragraphs of legal conclusions followed by a prayer for relief. As with their RICO claim, plaintiffs throw on the defendants and the court the task of sifting through an undifferentiated mass of factual allegations to try to find the fraud elements. The defendants should not be required to do so and the court will not do so. Not only can the court not tell whether the claim is pleaded with particularity but it cannot tell whether it is pleaded at all. Count 5 is dismissed.
Count 6: Intentional Interference with Prospective Business Advantage
Count 6 seeks to allege a cause of action for intentional interference with prospective business advantage against defendants Diamond, DePerte and Kevin's Towing. DePerte and Kevin's move to dismiss on the grounds that Count 6 contains no allegation of improper conduct by these defendants. DePerte and Kevin's also maintain that plaintiffs' allegations concerning the Tollway, the Nissan dealership and Kiley Center do not appear to be related to the claims involving Sheriff Del Re, Lake County or 1998 campaign contributions and should be brought, if at all, in a separate action in state court. Defendant Diamond argues that plaintiffs have failed adequately to plead this cause of action because they have failed to plead that they had a reasonable expectancy of entering into a valid business relationship with the county and that Diamond's alleged action, in terminating Whitmore's when he worked as towing supervisor for the Illinois Tollway and for Kiley Center is privileged under Illinois law and not actionable unless malicious.
As will be noted below in connection with Counts 7 and 8, the only way the court can tell which defendants plaintiffs seek to name in this count is to refer to the prayer for relief.
Plaintiffs respond to Kevin's and DePerte's improper joinder argument by asserting that the allegations relating to the Tollway, the Nissan dealership and the Kiley Center are included only to demonstrate a "modus operandi". What plaintiffs appear to be doing in Count 6 is pleading their evidence, a surprising approach for a pleader who in other counts pleads nothing but legal conclusions. In any event, while the court will never permit Count 6 to be submitted to a jury in its present form, it may stand with the understanding that plaintiffs seek no relief for the alleged Tollway, Nissan and Kiley Center incidents. At an appropriate time, the court will strike these allegations as surplusage.
The elements of a claim under Illinois law for tortious interference with a prospective business advantage are (1) plaintiff's reasonable expectation of entering a valid business relationship; (2) defendant's knowledge of the plaintiff's expectancy; (3) purposeful or intentional interference by the defendant which prevents the plaintiff's legitimate expectation from ripening into a valid business relationship; and (4) damages to the plaintiff resulting from such interference. See Oil Exp. Nat'l v. Burgstone, 1996 WL 666698, *9 (N.D.Ill Nov. 14, 1996). In addition, the plaintiff must show that the defendant acted with actual malice, that is, with a desire to harm the plaintiff which was unrelated to the interest he was attempting to protect in bringing about the breach. See id. But see Belden Corp. v. InterNorth, Inc., 413 N.E.2d 98, 102 n. 1 (Ill.App.Ct. 1980) (malice in this context means only unjustified interference and is better omitted as a separate element). Where the tort involved is interference with an expectancy, rather than with a contract, there is no cause of action unless the circumstances indicate unfair competition, an unprivileged interference. Belden Corp., 413 N.E.2d at 102. Regardless of whether malice is viewed as a separate element, Rule 9(b) provides that it may be averred generally.
Count 6, at least insofar as it addresses the conduct of all three defendants in connection with the alleged bribes-for-territory scheme, appears to allege adequately all elements of the tort described above. Whitmore's had been on the Sheriff's Towing List for twenty-five years, creating a reasonable expectancy of a continuing business relationship. Diamond and DePerte, acting on his own behalf and on behalf of Kevin's, with knowledge of Whitmore's expectancy, intentionally interfered with this expectancy by paying bribes to Del Re so that he would increase Kevin's towing territory at the expense of plaintiffs. Plaintiffs allege that they were damaged in the form of a reduced towing area.
Reading the amended complaint liberally, as the court must, it can be read to allege that Diamond and DePerte, on his own behalf and on behalf of Kevin's, solicited and paid bribes to obtain towing territory for Kevin's that had previously been plaintiffs'. Since paying bribes to obtain another's towing territory is at least the equivalent of unfair competition and clearly an unprivileged interference, plaintiffs have adequately stated a cause of action.
The motion to dismiss Count 6 is denied; the allegations concerning past acts of defendant Diamond will be stricken before the case goes to trial.
Counts 7-8: Freedom of Speech-Federal and Illinois Constitutions
Counts 7 and 8 seek to assert claims against Sheriff Del Re and Lake County (vicariously) for violations of plaintiffs' rights to free speech under the federal and state constitutions, respectively. Plaintiffs concede that the county is not a proper party defendant (Pl. Resp. at 4), and these counts, insofar as they are directed at the county, are dismissed.
Plaintiffs do not do the court and the other parties the courtesy of indicating plainly the identity of the defendants for each claim. Since the prayer for relief seeks relief only against the county and Del Re, the court assumes that they are the only parties against whom this count is aimed.
The court cannot imagine how plaintiffs can justify naming the county in these counts consistently with Rule 11.
Sheriff Del Re also argues that Roger Whitmore, the individual, has no First Amendment cause of action because the injury he alleges was inflicted on Roger Whitmore's Automotive Service, the corporate party. The court cannot rule out the possibility that Whitmore the individual will be able to show a violation of his individual rights consistent with the allegations of the complaint. The motion to dismiss Whitmore the individual as a party plaintiff for Counts 7 and 8 is denied.
Sheriff Del Re does not dispute that plaintiffs have stated a cause of action for a First Amendment violation in Count 7. He seeks dismissal of Count 8, however, on the grounds that there is no private right of action under the cited provisions of the Illinois Constitution and that Count 8 is merely redundant of Count 7, consisting not of a separate cause of action but merely of an alternative legal theory.
Neither party cites any case law dispositive of the issue of whether there is a private right of action for a deprivation of free speech rights under the Illinois Constitution; neither side addresses whether, even if there is a private right of action, it can be asserted against an individual officeholder. The court will assume, for present purposes, that plaintiffs can bring such a cause of action since the presence of this legal theory in the case should make no difference in how the parties approach the case and prepare for trial. If this case progresses to the point where it is close to trial, the court will reconsider this issue, assuming that the parties file briefs adequate to the resolution of what appears to be a difficult issue of first impression.
With respect to the argument that the Illinois free speech theory should be included in Count 7 rather than separately pleaded in Count 8, the issue seems of no consequence at this point in the case. Again, if this case progresses to the point of trial, and if the plaintiffs seek to place their Illinois constitutional claim before the jury, the court will address the issue of the form in which it should be presented.
The motion to dismiss Count 7 is denied except with respect to Lake County. The motion to dismiss Count 8 is denied without prejudice.
Conclusion
For the reasons set forth above, Counts 1-5 are dismissed. Lake County is dismissed from this action. The motions to dismiss Counts 6 and 7 are denied. The motion to dismiss Count 8 is denied without prejudice. Plaintiffs may seek leave to replead by filing a motion within 30 days of the date of this Order.
Any amendment must comply with the terms of this Order. Defendants need not answer or otherwise plead until ordered to do so.
The case is set for status at 9:30 A.M. on Thursday, May 3, 2001.