Cisneros v. Petland, Inc.

• Decision Date: 25 August 2020
• Docket Number: No. 18-12064,18-12064
• Parties: Rosalba CISNEROS, On behalf of herself and all others similarly situated, Plaintiff - Appellant, v. PETLAND, INC., BKG Pets, Inc., Pets BKG LLC, PAWSitive Solutions, Inc., Defendants - Appellees.
• Court: U.S. Court of Appeals — Eleventh Circuit

972 F.3d 1204

Rosalba CISNEROS, On behalf of herself and all others similarly situated, Plaintiff - Appellant,

v.PETLAND, INC., BKG Pets, Inc., Pets BKG LLC, PAWSitive Solutions, Inc., Defendants - Appellees.

No. 18-12064

United States Court of Appeals, Eleventh Circuit.

August 25, 2020

Kelsey Rinehart Eberly, Animal Legal Defense Fund, Cotati, CA, Anthony T. Eliseuson, Animal Legal Defense Fund, Chicago, IL, Michael Ira Fistel, Jr., William Woodhull Stone, Johnson Fistel, LLP, Marietta, GA, Jessica June Sleater, Andersen Sleater Sianni, LLC, New York, NY, David Aaron Weisz, Andrews Law Firm, Tallahassee, FL, for Plaintiff - Appellant

Robert G. Cohen, Kegler Brown Hill & Ritter, Columbus, OH, Henry D. Fellows, Jr., Michael Coleman Gretchen, Fellows LaBriola, LLP, Atlanta, GA, for Defendant - Appellee Petland, Inc.

Fredric J. Bold, Jr., John E. Floyd, Steven Jason Rosenwasser, Bondurant Mixson & Elmore, LLP, Atlanta, GA, for Defendants - Appellees BKG Pets, Inc., Pets BKG LLC

Robert A. Luskin, Goodman McGuffey, LLP, Atlanta, GA, Eric Stephen Boos, Daniel B. Rogers, Shook Hardy & Bacon, LLP, Miami, FL, for Defendant - Appellee PAWSitive Solutions, Inc.

Before BRANCH and MARCUS, Circuit Judges, and UNGARO,^* District Judge

MARCUS, Circuit Judge:

In December 2015, Rosalba Cisneros bought a puppy from a Petland franchise in Kennesaw, Georgia ("Petland Kennesaw"). Less than a week later, it was dead. The question before us is whether Cisneros has plausibly alleged that her puppy's death was the result of a nationwide racketeering conspiracy.

Cisneros brought this case pursuant to the civil provisions contained in the Racketeer Influenced and Corrupt Organizations Act ("RICO"), a statute originally designed to combat the mafia. Since its passage, the Supreme Court has recognized that RICO is a broad statute that offers the government and private plaintiffs remedies against organized criminal malfeasance in many forms. But it cannot be invoked every time a group of people causes an injury. RICO's punitive power -- treble damages, in the civil context -- is necessarily cabined by a series of elements established by its terms and refined in its case law. To survive a Rule 12(b)(6) motion to dismiss, a civil plaintiff must plausibly allege each of these elements.

Two elements are particularly relevant here. First, the plaintiff must plead the existence of a RICO "enterprise." Second, the plaintiff must plead that each defendant engaged in the conduct of the affairs of the RICO enterprise through a pattern of racketeering activity involving at least two predicate criminal acts. On these elements, Cisneros's complaint does not pass muster. Her complaint fails to plead facts that plausibly support the inference that the defendants shared a common purpose to commit the massive fraud she alleges. Moreover, as we see it, Cisneros has failed to allege with particularity that each defendant engaged in a pattern of racketeering activity. For these reasons, neither Cisneros's substantive RICO claim nor her RICO conspiracy claim can proceed. Accordingly, we affirm the judgment of the district court dismissing Cisneros's RICO complaint for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6).

After resolving Cisneros's federal claims in favor of the defendants, the district court declined to exercise supplemental jurisdiction over Cisneros's state-law claim under Georgia's RICO statute. It should not have done so. Cisneros adequately alleged in her complaint that the Class Action Fairness Act vested the district court with original jurisdiction over this claim. On the merits, however, we agree that Cisneros's Georgia RICO claim must be dismissed for the same reasons that the federal RICO claims were dismissed. Thus, we vacate the portion of the district court's order declining to exercise supplemental jurisdiction and remand with instructions to dismiss Cisneros's state-law RICO claim with prejudice.

The facts of this case tell a sad story. To be clear, our holding expresses no view on Cisneros's depiction of the practices of Petland and its affiliates, and we are sympathetic to Cisneros and the loss of her puppy. Cisneros's complaint paints a troubling picture of animal abuse and neglect, consumer deception, and aggressive sales practices, particularly at Petland Kennesaw. We hold only that RICO does not provide Cisneros, as she has pled this case, the remedy she seeks.

I.

According to her complaint, on December 10, 2015, Rosalba Cisneros purchased a Shih Tzu puppy named Giant from Petland Kennesaw, a Kennesaw, Georgia franchise of Petland, Inc. ("Petland"), for $2,400. The store was owned and operated by BKG Pets, Inc. and Pets BKG, LLC. Cisneros alleges that at the point of sale she received a "Certificate of Veterinary Inspection" from Petland Kennesaw that certified Giant was healthy, fit for adoption, and free of parvovirus, an often lethal disease found in puppies. She also received and signed a purchase contract, attached to her complaint. That contract (1) entitled Giant to free, post-purchase veterinary care with Dr. Walton Waller at his clinic, My Pets Vet; (2) provided for a refund or a replacement pet under certain circumstances; and (3) warrantied against the development of certain diseases, including parvovirus, within a ten-day window. The contract also identified PAWSitive Solutions, Inc. ("PAWSitive") as Cisneros's point of contact for major issues arising from the purchase of the puppy. Although PAWSitive was allegedly represented to Cisneros by Petland Kennesaw as a "Concern Specialist," Cisneros claims that it advertises itself to pet stores as "more [of] a business consultant, to help pet store owners increase their profitability, than ... a service company."

Problems arose with Giant's health immediately. Cisneros alleges that the puppy was sick from the moment she took him home, and she brought him to Dr. Waller on December 14, 2015. Dr. Waller prescribed antibiotics without making a diagnosis, but after Giant showed no improvement, Cisneros took him to a third-party emergency veterinarian on December 15. That veterinarian diagnosed the dog as suffering from parvovirus and, as required by state law, reported the diagnosis to the Georgia Department of Agriculture ("GDOA"). Cisneros called Petland Kennesaw, which told her to take Giant to Dr. Waller if she wanted the costs of treatment reimbursed. She did so. Dr. Waller allegedly provided no treatment and told a GDOA investigator that Giant had liver disease. Giant died sometime between December 16 and December 19, 2015.

Cisneros does not know the exact date of the puppy's death because she did not learn of his demise until she received a report from the Georgia Department of Agriculture on December 21, 2015. Cisneros's daughter recovered Giant's body from Dr. Waller later that day, but only after calling the police to challenge his office's claim that it no longer had the pet. Upon receiving the body, Cisneros discovered that Dr. Waller had removed the puppy's organs, a practice which the complaint tells us is "not usual or customary." Meanwhile, PAWSitive had called Cisneros on December 19, told her that Giant's health was improving, and sold her an American Kennel Club registration for approximately $100.

From these facts, Cisneros concluded that what happened to Giant was no accident but rather the intended result of a nationwide conspiracy between Petland; all of its franchisees, including Petland Kennesaw (the only franchisee mentioned by name); PAWSitive; and a network of preferred veterinarians such as Dr. Waller to sell sick puppies for premium prices and engage in a campaign of obfuscation after the sale to aid Petland in avoiding its warranties. The remainder of her complaint is dedicated to alleging the contours of the purported conspiracy, which she describes this way. Cisneros alleges that the franchisor, Petland, supervises and manages this scheme through tight control of its franchisees. The franchisees allegedly purchase unhealthy puppies from "puppy mills" for approximately $50 to $200, pay a network of "preferred veterinarians" a flat fee to literally rubber-stamp certificates stating that the animals are healthy, and sell the puppies to unwitting customers for thousands of dollars. When customers buy these puppies, they receive sales documents allegedly designed to lend legitimacy to the sale and distract from the fraud. After the sale, the preferred veterinarians downplay illnesses while PAWSitive discourages independent veterinary care and distracts customers with other product sales.

Cisneros raised these claims in this class action complaint filed on behalf of herself and all other purchasers of puppies or kittens from Petland franchises across the country from July 2013 to the present. Her complaint named Petland, Petland Kennesaw, and PAWSitive as the defendants and broadly asserted three claims: (1) a violation of the federal RICO statute, 18 U.S.C. § 1962(c) ; (2) a conspiracy to violate the federal RICO statute, 18 U.S.C. § 1962(d) ; and (3) with respect to a Georgia subclass of persons who purchased a cat or dog from a Petland franchise in Georgia from July 2013 to the present, a violation of Georgia's state RICO statute, O.C.G.A. § 16-14-4. The district court dismissed Cisneros's federal causes of action for failure to state a claim, pursuant to Federal Rule of Civil Procedure 12(b)(6), and declined to exercise supplemental jurisdiction over her remaining state-law claim, pursuant to 28 U.S.C. § 1367(c).

This timely appeal followed.

II.

We review a district court's grant of a Rule 12(b)(6) motion to dismiss for failure to state a claim de novo. Almanza v. United Airlines, Inc., 851 F.3d 1060, 1066 (11th Cir. 2017). In so doing, we "accept the factual allegations in the complaint as true and construe them in the light most favorable to the plaintiff." Id. To survive a motion to dismiss, however, a complaint must plead ...