Anderson v. Smithfield Foods, Inc., 8:01CV441T17TBM.

• Decision Date: 13 February 2002
• Docket Number: No. 8:01CV441T17TBM.,8:01CV441T17TBM.
• Parties: Eugene C. ANDERSON, et al., Plaintiffs, v. SMITHFIELD FOODS, INC., et al., Defendants.
• Court: U.S. District Court — Middle District of Florida

209 F.Supp.2d 1270

Eugene C. ANDERSON, et al., Plaintiffs, v. SMITHFIELD FOODS, INC., et al., Defendants.

No. 8:01CV441T17TBM.

United States District Court, M.D. Florida, Tampa Division.

February 13, 2002.

Diana Lynn Fuller, Smith & Fuller, P.A., Tampa, FL, Stephen Herre Echsner, J. Michael Papantonio, Neil Duane Overholtz, Levin, Middlebrooks, Thomas, Mitchell, Echsner, Proctor & Papantonio, P.A., Pensacola, FL, Joe R. Whatley, Jr., Whatley Drake, L.L.C., Birmingham, AL, Herbert Tobias Schwartz, F. Kenneth Bailey, Jr., William Bailey Law Firm, L.L.P., Houston, TX, Charles F. Speer, Payne & Jones, Chartered, Overland Park, KS, Robert F. Kennedy, Jr., Law Office of Robert F. Kennedy, Jr., White Plains, NY, Hiram Eastland, Eastland Law Offices, Greenwood, MS, Thomas M. Sobol, Jan Schlichtmann, Lieff, Cabraser, Heimann & Bernstein, Boston, MA, Howard F. Twiggs, Douglas B. Abrams, Twiggs, Abrams, Strickland & Trehy, Raleigh, NC, Stephen Weiss, Seeger Weiss LLP, New York City, Richard H. Middleton, Jr., Suggs, Kelly & Middleton, Savannah, GA, for Eugene C. Anderson.

Diana Lynn Fuller, Smith & Fuller, Tampa, FL, Stephen Herre Echsner, J. Michael Papantonio, Neil Duane Overholtz, Levin, Middlebrooks, Thomas, Mitchell, Echsner, Proctor & Papantonio, P.A., Pensacola, FL, Herbert Tobias Schwartz, F. Kenneth Bailey, Jr., William Bailey Law Firm, L.L.P., Houston, TX, Charles F. Speer, Payne & Jones, Chartered, Overland Park, KS, Robert F. Kennedy, Jr., Law Office of Robert F. Kennedy, Jr., White Plains, NY, Hiram Eastland, Eastland Law Offices, Greenwood, MS, Thomas

M. Sobol, Jan Schlichtmann, Lieff, Cabraser, Heimann & Bernstein, Boston, MA, for Cynthia Bailey Watson, Roger Dae Pickett, Marvin Carnagey, Keith Dotson.

Diana Lynn Fuller, Smith & Fuller, P.A., Tampa, FL, for Jim Braum, Linus Solberg, Betty Janssen.

Benjamin H. Hill, III, Hill, Ward & Henderson, P.A., Tampa, FL, J. William Boland, Richard Cullen, Rosewell Page, III, Anne Marie Whittemore, Eugene E. Mathew, III, David E. Evans, McGuire Woods LLP, Richmond, VA, for Smithfield Foods, Inc.

Benjamin H. Hill, III, Hill, Ward & Henderson, P.A., Tampa, FL, John H. Beisner, O'Melveny & Myers LLP, Washington, DC, Ira H. Raphaelson, John B. Owens, O'Melveny & Myers LLP, Washington, DC, for Joseph W. Luter, III.

ORDER

KOVACHEVICH, Chief Judge.

THIS CAUSE is before the Court on Defendant Smithfield Food, Inc.'s Motion to Dismiss First Amended Class Action Complaint and Memorandum of Law (Dkt. Nos. 36-37); Defendant Joseph W. Luter, III's Motion to Dismiss First Amended Class Action Complaint and Memorandum of Law in (Dkt. Nos. 34-35); Defendant Joseph W. Luter, III's Amended Memorandum in Support of Motion to Dismiss First Amended Class Action Complaint (Dkt. No. 45); Plaintiffs' Memorandum of Law in Opposition to Defendants' Motions to Dismiss the First Amended Complaint (Dkt. No. 50); Defendants' Joint Reply Memorandum of Law Supporting their Motions to Dismiss (Dkt. No. 53); and Plaintiffs' First Amended Class Action Complaint (Dkt. No. 23).

Background

Eugene C. Anderson, Cynthia Bailey Watson, Roger Dae Pickett, Marvin Carnagey, Keith Dotson, Jim Braun, Linus Solberg, and Netty Janssen, individually and on behalf of the proposed Primary Class and Sub-Class (Plaintiffs), have filed suit against Smithfield Foods, Incorporated (Defendant Smithfield) and Joseph W. Luter, III (Defendant Luter) for violations of the Racketeer Influenced and Corrupt Organizations (RICO) Act, Title 18, United States Code, Section 1961, et seq.¹ Defendant Smithfield is a large pork processor and hog producer which manufactures a wide variety of processed meats. Defendant Luter was Chairman of the Board, President, and/or Chief Executive Operating Officer for Defendant Smithfield, during the time period of Plaintiffs' allegations. Plaintiffs allege that Defendant Smithfield has systematically, deliberately, and continuously dumped pollutants on property and into waterways, in violation of federal environmental laws. According to Plaintiffs, as a result of these actions, Defendants have misrepresented their compliance with environmental laws to the public, and have used the proceeds stemming from the violation of environmental laws to reinvest the income to carry on the business, thereby violating RICO. Essentially, Plaintiffs allege that Defendants, as a result of carrying on the business, have polluted the environment, and, to continue the violation of federal environmental laws, have engaged in acts of mail fraud, wire fraud, money laundering and violations of the Travel Act. Plaintiffs contend these acts serve as the predicate acts necessary to establish a violation of RICO.

Defendants move to dismiss the Amended Complaint on the grounds that Plaintiffs have failed to state a claim of relief upon which relief can be granted under Rule 12(b)(6) of the Federal Rules of Civil Procedure. Specifically, Defendants claim that Plaintiffs' Amended Complaint fails to allege that Defendants' actions caused Plaintiffs' injury, that Defendants committed any predicate acts, or that a RICO enterprise exists.

Standard of Review

In ruling on a motion to dismiss, the court should not dismiss a complaint unless it appears beyond doubt that the plaintiff can prove no set of facts that would entitle him to relief. Conley v. Gibson, 355 U.S. 41, 56-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). In considering a motion to dismiss, the court must take all material allegations of the complaint as true and liberally construe those allegations in favor of the Plaintiff. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974). However, a Plaintiff may not merely "label" claims to survive a motion to dismiss. Blumel v. Mylander, 919 F.Supp. 423, 425 (M.D.Fla.1996). At a minimum, the complaint must provide a "short and plain statement of the claim" that "will give the defendant fair notice of what the Plaintiff's claim is and the grounds upon which it rests." Conley, 355 U.S. at 47, 78 S.Ct. 99 (quoting Fed. R.Civ.P. 8(a)(2)). When, on the basis of a dispositive issue of law, no construction of the factual allegation will support the cause of action, dismissal of the complaint is appropriate. Executive 100, Inc. v. Martin County, 922 F.2d 1536 (11th Cir. 1991).

Discussion

I. Defendant Smithfield's Motion to Dismiss

Defendants argue that Plaintiffs' Amended Complaint should be dismissed because it fails to state a claim under the Federal Racketeering Influenced and Corrupt Organizations Act (RICO), Title 18, United States Code, Section 1961, et seq. Specifically, Defendants argue that Plaintiffs' Amended Complaint fails to allege that Defendants' actions caused Plaintiffs' injury, that Defendants committed any predicate acts, or that a RICO enterprise exists.

The RICO Claim

Congress designed RICO as a flexible tool to fight organized crime. As such, it makes the following activities unlawful:

(a) investing income derived, directly or indirectly, from a pattern of racketeering activity through collection of an unlawful debt in any enterprise which affects interstate commerce; (b) acquiring or maintaining an interest in any enterprise which affects interstate commerce through a pattern of racketeering activity or through collection of an unlawful debt; (c) conducting or participating in the affairs of any enterprise which affects interstate commerce through a pattern of racketeering activity or collection of an unlawful debt; or (d) conspiring to violate any of the provisions of Section 1962(a)-(c).

18 U.S.C. § 1962.

"Racketeering activities" covers a wide range of federal and state crimes, including acts that are "`chargeable' under several generically described state criminal laws, any act `indictable' under numerous specific federal criminal provisions, including mail and wire fraud, and any `offense' involving bankruptcy or securities fraud or drug-related activities that [are] `punishable' under federal law." Sedima, S.P.R.L. v. Imrex Co. Inc., 473 U.S. 479, 482, 105 S.Ct. 3275, 87 L.Ed.2d 346 (1985) (quoting 18 U.S.C. § 1961(1)).

To engage in a "pattern of racketeering activity," the defendant must have participated in "at least two acts of racketeering activity, one of which occurred after the effective date of [RICO] and the last of which occurred within ten years (excluding any term of imprisonment) after the commission of a prior act of racketeering activity." 18 U.S.C. § 1961(5). Finally, "enterprise" is defined under the statute as "any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity." Id. § 1961(c).

RICO establishes both criminal and civil penalties for violations of Section 1962. The civil remedies provision provides a private cause of action for "any person injured in his business or property by reason of a violation of Section 1962." 18 U.S.C. § 1961(c). However, as the United States Supreme Court noted, "in its private civil version, RICO is evolving into something quite different from the original conception of its enactors." Sedima, 473 U.S. at 482, 105 S.Ct. 3275. The elements of a civil RICO claim are: "(1) a violation of section 1962; (2) injury to business or property; and (3) that the violation caused the injury." Avirgan v. Hull, 932 F.2d 1572, 1577 (11th Cir.1991).

A. Violation of Section 1962

To establish a violation of Section 1962, the plaintiff must allege facts demonstrating that the defendant engaged in a pattern of racketeering activity and that an enterprise existed. Bill Buck Chevrolet v. GTE Fla., 54 F.Supp.2d 1127, 1137 (M.D.Fla.1999).

Pattern of Racketeering Activity

In showing a pattern of racketeering activity, the plaintiff must allege at least two racketeering predicate acts that are related and that amount to, or threaten the likelihood of, continued criminal activity. H.J. Inc. v. Northwestern Bell Tele. Co., 492 U.S. 229, 237-238, ...