Ambellu v. Re'Ese Adbarat Debre Selam Kidist Mariam

• Decision Date: 03 September 2019
• Docket Number: Case No. 1:18-cv-02177 (TNM)
• Citation: 406 F.Supp.3d 72
• Court: U.S. District Court — District of Columbia
• Parties: Alemework AMBELLU, et al., Plaintiffs, v. RE'ESE ADBARAT DEBRE SELAM KIDIST MARIAM, the Ethiopian Orthodox Tewhado Religion Church, et al., Defendants.

406 F.Supp.3d 72

Alemework AMBELLU, et al., Plaintiffs,

v.RE'ESE ADBARAT DEBRE SELAM KIDIST MARIAM, the Ethiopian Orthodox Tewhado Religion Church, et al., Defendants.

Case No. 1:18-cv-02177 (TNM)

United States District Court, District of Columbia.

Signed September 3, 2019

Diona F. Howard-Nicolas, Bruch Hanna LLP, Robert N. Kelly, Jackson & Campbell, P.C., Washington, DC, for Plaintiffs.

Thomas Michael Guiffre, Squire Patton Boggs (US) LLP, Washington, DC, for Defendants.

MEMORANDUM OPINION

TREVOR N. McFADDEN, U.S.D.J.

The Plaintiffs are former parishioners (the "Parishioners") of the Re'ese Adbarat Debre Selam Kidist Mariam Church. They claim that a group of current members and clergy (the "Current Leaders") conspired to take control of the Church, its operations, and its assets in violation of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. §§ 1961 et seq. , and related torts. The Court granted the Current Leaders' Motion to Dismiss, finding, among other things, that the Amended Complaint failed to adequately plead RICO violations and that the Free Exercise Clause barred adjudication of other fundamentally religious matters. See Ambellu v. Re'ese Adbarat Debre Selam Kidist Mariam , 387 F. Supp. 3d 71 (D.D.C. 2019) ( Ambellu I ).

The Court now must decide whether the proposed Second Amended Complaint ("SAC") meets the pleading requirements to move forward. Concluding that the SAC does not fix the failures of the original complaint, the Court will deny the Parishioners' Motion for Leave to File. The Court will also deny the Parishioners' alternative request for limited jurisdictional discovery, and for the reasons below, the case will be dismissed.

I.

In Ambellu I , the Court outlined the relevant history of the Church dispute. See id. at 76-77. In short, the Parishioners allege that for two years a committee of congregants "held a number of regular meetings for the express purpose of conspiring to devise a scheme to obtain control of the money and property of the Church by means of false or fraudulent pretenses, representations and promises." SAC, ECF No. 26-3, ¶ 176. Their planning culminated at the end of church services one Sunday in 2015, when the leader of the committee allegedly "announced that the serving members of the Church's Board of Trustees ... were dismissed." Id. ¶ 177. The Parishioners argue that, "through false or fraudulent pretenses and representations," the Current Leaders appointed an interim Board that assumed control of the Church and has denied the Parishioners access to the Church and its assets ever since. Id. ¶ 176-87.

In response to Ambellu I , the Parishioners have pleaded additional facts hoping to establish a "pattern of racketeering activity" under RICO. See 18 U.S.C. § 1962. And they have provided the Church's Articles of Incorporation and two versions of its By-Laws to identify "neutral principles of law" the Court can apply without violating the First Amendment. See Pls.' Ex. B-D, ECF No. 26-3 at 69-132;¹ Presbyt'n Church in the U.S. v. Mary Eliz. Blue Hull Mem. Presbyt'n Church , 393 U.S. 440, 449, 89 S.Ct. 601, 21 L.Ed.2d 658 (1969). The Current Leaders renew their arguments from Ambellu I that the claims must be dismissed. Defs.' Mem. Opp. to Pls.' Mot. for Leave to File ("Defs.' Opp."), ECF No. 27, at 1. They contend that the "[SAC] presents nothing new" and oppose the Motion for Leave to File as "futile" because it cannot survive a motion to dismiss. Id.

On RICO, the Current Leaders argue that the SAC still fails to satisfy Federal Rule of Civil Procedure Rule 9(b), which requires that "a party must state with particularity circumstances constituting fraud or mistake." See Defs.' Opp. at 2-3. They argue that not one of the "forty-one amended paragraphs provides any additional details concerning ‘any false statements transmitted using the Postal Service, radio, wires, or television,’ as [ Ambellu I ] explained was necessary."² Id. at 3. And as they argued previously, the Current Leaders claim that even if Rule 9(b) does not apply, the Parishioners' claims of fraud do not show "the continuity required to establish a pattern of racketeering activity." Id. at 4.

As for the tort claims, the Current Leaders maintain that the Court lacks neutral criteria to adjudicate the dispute without "delving into the Church's practices and customs" that are "close to the core of ecclesiastical concern." Id. at 5-6 (quoting Ambellu I , 387 F. Supp. 3d at 81 ). The Current Leaders argue that the Parishioners' "attempt to re-characterize their claims by introducing By-Laws and Articles of Incorporation did not change their fundamental nature." Id. at 6. The Current Leaders argue these are still claims about denial of the Parishioners' "ability to worship," thus forbidden by the Free Exercise Clause. Id. See also Burgess v. Rock Creek Baptist Church , 734 F. Supp. 30, 33 (D.D.C. 1990) ("[T]his Court must not interfere with the fundamental ecclesiastical concern of determining who is and who is not [a] Church member.").

II.

On motion to amend a party's pleading, the Court "should freely give leave when justice so requires." Fed. R. Civ. P. 15(a)(2). Congress intended Rule 15(a)(2) "to permit amendment broadly to avoid dismissal of suits on technical grounds." Swan v. Clinton , 100 F.3d 973, 980 (D.C. Cir. 1996). Courts must therefore read Rule 15(a)(2) as creating "a generally favorable policy toward amendments." Hill v. U.S. Dep't of Def. , 70 F. Supp. 3d 17, 19 (D.D.C. 2014). In other words, "[i]f the underlying facts or circumstances relied upon by a plaintiff may be a proper subject of relief, he ought to be afforded an opportunity to test his claim on the merits." Foman v. Davis , 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962).

But there are limits to that generally favorable policy. See, e.g. , Klee v. Pittsburgh & W.V. Ry. Co. , 22 F.R.D. 252, 255 (W.D. Pa. 1958) ("The requirement of judicial approval suggests that there are instances where leave should not be granted.").

When a plaintiff fails to establish the facts or circumstances to make a claim, amendment is futile and the Court acts within its discretion to refuse amendment. Foman , 371 U.S. at 182, 83 S.Ct. 227. The same is true if a party has shown "repeated failure to cure deficiencies by previous amendments." Firestone v. Firestone , 76 F.3d 1205, 1208 (D.C. Cir. 1996) (internal brackets omitted). Failure to plead fraud with particularity can establish futility. Id. at 1209. And the Court may also deny amendment because the resulting complaint "would not survive a motion to dismiss." James Madison Ltd. v. Ludwig , 82 F.3d 1085, 1099 (D.C. Cir. 1996).

Federal Rule of Civil Procedure 12(b)(6) permits dismissal when a plaintiff "fail[s] to state a claim upon which relief can be granted." A valid claim must consist of factual allegations that, if true, "state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). Mere "labels and conclusions" or "naked assertion[s] devoid of further factual enhancement" are insufficient. Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quotations omitted). Rather, "[a] claim has facial plausibility 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. Under Rule 12(b)(6), the Court must construe the Parishioners' allegations in the light most favorable to them and accept as true all reasonable factual inferences drawn from well-pleaded allegations. In re United Mine Workers of Am. Emp. Benefit Plans Litig. , 854 F. Supp. 914, 915 (D.D.C. 1994). The Court need not, however, accept legal conclusions or conclusory statements as true. Iqbal , 556 U.S. at 678, 129 S.Ct. 1937.

III.

A.

The SAC's Counts I through III allege a conspiracy to violate RICO, 18 U.S.C. § 1962(b) and (c). Section (b) makes it unlawful to acquire control of an enterprise "through a pattern of racketeering activity." 18 U.S.C. § 1962(b). Section (c) makes it unlawful for an employee or associate to participate in the enterprise's affairs "through a pattern of racketeering activity." Id. § 1962(c). And § 1962(d) makes it unlawful for persons to "conspire to violate" subsections (b) or (c). The statute creates a private cause of action available to "[a]ny person injured in his business or property by reason of a violation of section 1962." 18 U.S.C. § 1964(c) ; see also Anza v. Ideal Steel Supply Corp. , 547 U.S. 451, 453, 126 S.Ct. 1991, 164 L.Ed.2d 720 (2006).

As the statutory text makes clear, to bring a successful claim under these sections, a plaintiff must allege a "pattern of racketeering activity." A "pattern" requires at least two predicate acts of racketeering activity. Salinas v. United States , 522 U.S. 52, 62, 118 S.Ct. 469, 139 L.Ed.2d 352 (1997). A plaintiff "must show that the racketeering predicates are related, and that they amount to or pose a threat of continued criminal activity." H.J. Inc. v. N'west'n Bell Tel. Co. , 492 U.S. 229, 239, 109 S.Ct. 2893, 106 L.Ed.2d 195 (1989) (emphasis in original). Of the acts that encompass "racketeering activity" in 18 U.S.C. § 1961(1), the Parishioners base their RICO claims on alleged mail and wire fraud. SAC ¶ 218.

The elements of federal mail and wire fraud are "(1) a scheme to defraud, and (2) use of the mails or wires for the purpose of executing the scheme." United States v. Alston , 609 F.2d 531, 536 (D.C. Cir. 1979) ; see also Johnson v. Computer Tech. Servs., Inc. , 670 F. Supp. 1036, 1039 (D.D.C. 1987) (applying Alston to a civil RICO claim).

The first prong reaches "any scheme to deprive another of money or property by means of false or fraudulent pretenses, representations, or promises." Carpenter v. United States , 484 U.S. 19, 27, 108 S.Ct. 316, 98 L.Ed.2d 275 (1987). "The scheme to defraud must threaten some cognizable...