Opinion
Civil Action No. 3:01-CV-2198-M
April 30, 2002
MEMORANDUM ORDER AND OPINION
On March 1, 2002, Defendants filed their second Motion to Dismiss for Lack of Subject Matter Jurisdiction, in response to Plaintiffs filing of its Amended Complaint on January 25, 2002. Having considered the Motion, the Court is of the opinion that it should be GRANTED.
In their original Complaint, Plaintiffs asserted two bases for subject matter jurisdiction: diversity jurisdiction and federal question jurisdiction. In its December 27, 2001 Order, the Court found that the parties were nondiverse; thus, the Court concluded that it maintained subject matter jurisdiction over this case only because of Plaintiffs' RICO claim. However, the Court found that Plaintiffs inadequately pleaded their RICO claim, and thus required Plaintiffs to submit an Amended Complaint that pleaded the claim with greater specificity. On March 1, 2002, Defendants moved to dismiss the Amended Complaint on the basis that Plaintiffs had not properly repleaded the elements of their RICO claim. The Court concurs with Defendants, and hereby dismisses Plaintiffs' RICO claim. The Court must therefore also dismiss Plaintiffs' remaining state law claims for lack of subject matter jurisdiction.
In addition to their RICO claim, Plaintiffs alleged the following state law causes of action: breach of the parties' settlement agreement, interference with a contractual agreement, conversion, and intentional infliction of emotional distress.
To properly plead a RICO claim, a plaintiff must allege the following elements: "(1) a person who engages in (2) a pattern of racketeering activity (3) connected to the acquisition, establishment, conduct, or control of an enterprise." St. Paul Mercury Ins. Co. v. Williamson, 224 F.3d 425, 439 (5th Cir. 2000). In their Amended Complaint, Plaintiffs have not properly alleged the existence of a pattern of racketeering activity or the existence of an enterprise. The Fifth Circuit has explained: "To prove a `pattern of racketeering activity,' a plaintiff must show at least two predicate acts of racketeering that are related and amount to or pose a threat of continued criminal activity." Tel-Phonic Serv's., Inc. v. TBS Int'l, Inc., 975 F.2d 1134, 1140 (5th Cir. 1992). Although Plaintiffs have alleged at least two predicate acts that are related, they have not averred that the acts "pose a threat of continued criminal activity." Rather, the alleged predicate acts appear to relate only to the isolated event of Defendants' auctioning off of Plaintiffs' property after Plaintiffs had stored the property at the storage facility of Defendant A-1 Freeman North American. As the Tel-Phonic court found,
RICO reaches activities that "amount to or threaten long-term criminal activity["] . . . . Predicate acts extending over a few weeks or months and threatening no future criminal conduct do not satisfy this requirement: Congress was concerned in RICO with long-term criminal conduct. . . . A RICO pattern may surely be established if the related predicates themselves involve a distinct threat of long-term racketeering activity, either implicit or explicit.Id. To satisfy the continuity requirement, a plaintiff must allege a "specific threat of repetition, " or suggest that "the predicate acts or offenses are part of Defendants' "regular way of doing business.'" Id. In sum, "[s]hort-term criminal conduct is not the concern of RICO." Calcasieu Marine Nat'l Bank v. Grant, 943 F.2d 1453, 1464 (5th Cir. 1991). The Court finds Plaintiffs' allegations as to Defendants' pattern of racketeering activity, which all involve Defendants' actions surrounding their seizure of Plaintiffs' belongings in the storage facility, to lack the element of continuity.
Furthermore, Plaintiffs have not sufficiently alleged the existence of a RICO enterprise. "[T]o establish an association in fact enterprise, the plaintiff must show "evidence of an ongoing organization, formal or informal, and . . . evidence that the various associates function as a continuing unit.'" Montesano v. Seafirst Commercial Corp., 818 F.2d 423, 426 (5th Cir. 1987). The enterprise must be "`an entity separate and apart from the pattern of activity in which it engages."' Id. at 427. Furthermore, the enterprise must be distinct from any legal entity named as a defendant in the suit. Elliott v. Foufas, 867 F.2d 877, 881 (5th Cir. 1989) ("If the defendant is a legal entity, the plaintiffs must do more than merely establish that the corporation, through its agents, committed the predicate acts in the conduct of its own business."). Finally, a plaintiff "must plead specific facts, not mere conclusory allegations, which establish the enterprise." Id.
Plaintiffs' only attempt to plead the existence of a RICO enterprise was the following allegation within Plaintiffs' Amended Complaint:
Through Discovery of Defendants and its' [sic] Enterprise, cell members; Louis M. Dakil, 3441 W. Memorial Road, Oklahoma City, Oklahoma 73134; James Freeman, President of A-1 Freeman North American Van Lines, Inc., Oklahoma City, Oklahoma; Judy Elliott, 3441 W. Memorial Road, Oklahoma City, Oklahoma 73134, and witnesses to the sell-off of Plaintiffs' property;
Helma Cleg and Adrian Cal Zada, Dallas, Texas Dallas, Texas
The activities of the Enterprise members in consortium with the Defendants surpasses the threshold requirements contained in: 18 U.S.C. § 1962 (a)(b)(c)(d).
Amended Complaint at 9, ¶ 43. The Court finds that these statements about Defendants' purported enterprise are "mere conclusory allegations" that do not satisfy the Fifth Circuit's pleading requirements. Plaintiffs have identified no continuing unit of individuals that exists separate and apart from the alleged pattern of racketeering activity. Because Plaintiffs have not properly plead the existence of a pattern of racketeering activity or an enterprise, the Court GRANTS Defendants' Motion to Dismiss the RICO claim. As the RICO claim was Plaintiffs' only viable basis for federal jurisdiction, the Court therefore must DISMISS Plaintiffs' suit in its entirety for lack of subject matter jurisdiction. In accordance with this Court's ruling, Plaintiffs' Motion to Preserve the Hartford Fidelity and Bonding Inc. Claim, filed on April 22, 2002, is DENIED as MOOT.
The Court recognizes that, because Plaintiffs are appearing pro se, the Court should not dismiss a claim unless "it appears `beyond doubt that the [Plaintiffs] can prove no set of facts in support of [their] claim which would entitle [them] to relief.'" Haines v. Kerner, 404 U.S. 519, 520-21 (1972). From a review of the factual allegations within Plaintiffs' Amended Complaint, the Court concludes that Plaintiffs can prove no set of facts in support of their RICO claim which would entitle them to relief. No continuous pattern of racketeering activity may be found within the factual allegations in this case, nor can the existence of a RICO enterprise. Therefore, even under the more lenient pleading requirements provided for pro se litigants, the Court finds it proper to dismiss Plaintiffs' RICO claim.
SO ORDERED.