Adell v. Macon County Greyhound Park Inc., Case No. 3:10–CV–122–WKW.

Decision Date31 March 2011
Docket NumberCase No. 3:10–CV–122–WKW.
Citation785 F.Supp.2d 1226
PartiesEthel ADELL, et al., Plaintiffs,v.MACON COUNTY GREYHOUND PARK, INC., et al., Defendants.
CourtU.S. District Court — Middle District of Alabama

OPINION TEXT STARTS HERE

Brian Paul Strength, Attorney at Law, Richard Keith Thomas, R. Keith Thomas, LLC, Tuskegee, AL, David Morrison Cowan, Teddy Lee Mann, Mann Cowan & Potter PC, Birmingham, AL, for Plaintiffs.Patricia C. Diak, Peter John Tepley, William Mayfield Slaughter, Haskell Slaughter Young & Rediker LLC, John Eric Getty, Lewis Conrad Anderson, IV, Balch & Bingham LLP, Daniel Evan McBrayer, Jeffrey Edward Holmes, Joseph Wendell Carlisle, Mitchel Hampton Boles, Robert Marcus Givhan, William Donald Jones, III, Johnston Barton Proctor & Rose LLP, Andrew Philip Walsh, William Glassell Somerville, III, Baker Donelson Bearman Caldwell & Berkowitz PC, Birmingham, AL, Charlanna White Spencer, John Merrill Bolton, III, Hill, Hill, Carter, Franco, Cole & Black P.C., David R. Boyd, Balch & Bingham, Emily Coody Marks, Tabor Robert Novak, Jr., Ball Ball Matthews & Novak PA, Montgomery, AL, for Defendants.

MEMORANDUM OPINION AND ORDER

W. KEITH WATKINS, District Judge.

Plaintiffs, all 853 of them, collectively bet millions of dollars playing electronic bingo machines at Victoryland in Macon County, Alabama. In the end, the machines made losers of them all. Now, they are betting on better odds in this federal lawsuit in which they seek to get back their lost wagers and more. They venture to do so under the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § 1961, et seq., and a 150–year–old Alabama statute that voids gambling contracts, Alabama Code § 8–1–150. Defendants, to include Victoryland's president and the machine manufacturers, call Plaintiffs' bluff in Rule 12(b)(1) and (b)(6) motions to dismiss, contending that the legal odds are on their side. See Fed.R.Civ.P. 12(b)(1) & (6).

Pending are six motions to dismiss filed by Defendants (1) Multimedia Games, Inc. (Docs. # 57–58), (2) Cadillac Jack, Inc. (Docs. # 59–60), (3) IGT, Inc. (Docs. # 61–62), (4) Nova Gaming, LLC (Docs. # 63–64), (5) Bally Gaming, Inc. (Docs. # 65–66), and (6) Macon County Greyhound Park and Milton E. McGregor (Docs. # 67–68). Plaintiffs filed a consolidated response to the six motions to dismiss (Doc. # 80), to which Defendants replied (Docs. # 82–89).1 Plaintiffs filed a surreply. (Doc. # 92.)

After careful consideration of the arguments of counsel, the law and the Complaint's allegations, the court finds that the motions are due to be granted on the RICO claim for failure of Plaintiffs to plead 18 U.S.C. § 1964(c)'s standing requirements, and denied on the § 8–1–150 claim.2

I. JURISDICTION AND VENUE

Subject matter jurisdiction over the RICO claim is exercised pursuant to 28 U.S.C. § 1331. Plaintiffs predicate subject matter jurisdiction over the state law claims pursuant to 28 U.S.C. § 1332(a), (d)(11)(A), and (d)(11)(B)(i). (Compl. ¶ 14.) Personal jurisdiction and venue are not contested, and there are adequate allegations of both.

II. STANDARD OF REVIEW
A. Rule 12(b)(6)

A Rule 12(b)(6) motion to dismiss tests the sufficiency of the complaint against the legal standard set forth in Rule 8: “a short and plain statement of the claim showing that the pleader is entitled to relief,” Fed.R.Civ.P. 8(a)(2). When evaluating a motion to dismiss pursuant to Rule 12(b)(6), the court must take “the factual allegations in the complaint as true and construe them in the light most favorable to the plaintiff.” Pielage v. McConnell, 516 F.3d 1282, 1284 (11th Cir.2008). However, “the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.” Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009).

“To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ Iqbal, 129 S.Ct. at 1949 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). “Determining whether a complaint states a plausible claim for relief [is] ... a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. at 1950 (brackets added; citation omitted). [F]acial plausibility” exists “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556, 127 S.Ct. 1955). The standard also “calls for enough fact to raise a reasonable expectation that discovery will reveal evidence” of the claim. Twombly, 550 U.S. at 556, 127 S.Ct. 1955. While the complaint need not set out “detailed factual allegations,” it must provide sufficient factual amplification “to raise a right to relief above the speculative level.” Id. at 555, 127 S.Ct. 1955; see also James River Ins. Co. v. Ground Down Eng'g, Inc., 540 F.3d 1270, 1274 (11th Cir.2008) ( Twombly formally retired “the often-criticized ‘no set of facts' language previously used to describe the motion to dismiss standard.” (citation omitted)).

In the Eleventh Circuit, where the substantive RICO violations are based upon fraud, the “allegations must comply not only with the plausibility criteria articulated in Twombly and Iqbal but also with Fed.R.Civ.P. 9(b)'s heightened pleading standard.” Am. Dental Ass'n v. Cigna Corp., 605 F.3d 1283, 1291 (11th Cir.2010); see also Ambrosia Coal & Constr. Co. v. Pages Morales, 482 F.3d 1309, 1316 (11th Cir.2007) (“Civil RICO claims, which are essentially a certain breed of fraud claims, must be pled with an increased level of specificity.”). In this context, Rule 9(b) requires a plaintiff to allege (1) the precise statements, documents, or misrepresentations made; (2) the time, place, and person responsible for the statement; (3) the content and manner in which these statements misled the [p]laintiffs; and (4) what the defendants gained by the alleged fraud.’ Am. Dental Ass'n, 605 F.3d at 1291 (quoting Brooks v. Blue Cross & Blue Shield of Fla., Inc., 116 F.3d 1364, 1380–81 (11th Cir.1997)).

B. Rule 12(b)(1)

A Rule 12(b)(1) motion to dismiss may assert either a factual or facial attack on subject matter jurisdiction. See McElmurray v. Consol. Gov't of Augusta–Richmond Cnty., 501 F.3d 1244, 1251 (11th Cir.2007); accord Lawrence v. Dunbar, 919 F.2d 1525, 1528–29 (11th Cir.1990). A factual attack challenges “the existence of subject matter jurisdiction in fact, irrespective of the pleadings, and matters outside the pleadings, such as testimony and affidavits, are considered.” Lawrence, 919 F.2d at 1529 (internal quotation marks omitted). A facial attack, on the other hand, “require[s] the court merely to look and see if [the] plaintiff has sufficiently alleged a basis of subject matter jurisdiction.” McElmurray, 501 F.3d at 1251 (quoting Lawrence, 919 F.2d at 1529). Because the allegations in the “complaint are taken as true” on a facial Rule 12(b)(1) motion, it provides a plaintiff “safeguards similar to those retained when a Rule 12(b)(6) motion is raised.” Id. (citation and internal quotation marks omitted).

III. BACKGROUND
A. Parties

At all times material to this litigation, Defendant Macon County Greyhound Park (MCGP) offered pay-to-play electronic bingo machines to the public at its facility in Macon County, Alabama, under the names Victoryland and Quincy's 777.3 (Compl. ¶ 3.) MCGP is an Alabama corporation, which is “owned, in whole or in part” by its president and chief operating officer, Defendant Milton McGregor (“McGregor”). (Compl. ¶¶ 3–4.) MCGP “conduct[s] the day-to-day operations of Victoryland.” (Compl. ¶ 72; see also Compl. ¶¶ 3, 39.)

The other Defendants are out-of-state manufacturers of the electronic bingo machines available for play at Victoryland. Multimedia Games, Inc. (“MMG”) is a Texas corporation; Cadillac Jack, Inc. (“Cadillac Jack”) is a Georgia corporation; Nova Gaming, LLC (“Nova”) is a South Carolina corporation; and IGT, Inc. (“IGT”), and Bally Gaming, Inc. (“Bally”) are Nevada corporations (collectively “Manufacturers”).4 (Compl. ¶¶ 5, 6, 7, 10, 11.) Plaintiffs allege that these Defendants collectively participated in the design, marketing, promotion, and operation of “illegal gambling operations” at Victoryland by offering electronic bingo machines to the public.5 (Compl. ¶¶ 3–12.)

Plaintiffs consist of 853 individuals who spent “millions of dollars” playing electronic bingo machines at Victoryland during the one-year period preceding the filing of the Complaint. (Compl. ¶¶ 3, 20, 22, 38.) Each Plaintiff asserts that his or her damages, “individually and standing alone [,] exceed $75,000.” (Compl. ¶ 15.) The majority of Plaintiffs are Alabama citizens; fewer than eighty Plaintiffs are citizens of other states. (Compl. ¶¶ 1–2.)

B. Amendment No. 744

The commencement of electronic bingo at Victoryland has as its origin Amendment No. 744. ( See Compl. ¶ 39 (Defendants claimed that their operation [of electronic bingo at Victoryland] was and is within the parameters of local amendment 744 to the Alabama Constitution.”)). In June 2004, Amendment No. 744 to the Alabama Constitution was ratified, having been approved by a majority of the qualified electors in Macon County. (Compl. ¶ 16); see Ala. Const. 1901 amend. No. 744. The constitutional amendment permits [t]he operation of bingo games for prizes or money by nonprofit organizations for charitable, educational, or other lawful purposes.” Ala. Const. 1901 amend. No. 744. The sheriff of Macon County is charged with “promulgat[ing] rules and regulations for the licensing and operation of bingo games within the county.” Id. The sheriff of Macon County also is charged with enforcement of Amendment No. 744.6 Id. Amendment No. 744 contains the following regulatory requirements:

(1) No person under the...

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