Molina v. Aaa
| Decision Date | 09 November 2010 |
| Docket Number | Civil No. 05–2356 (FAB). |
| Parties | Jose Osvaldo MOLINA, Plaintiff,v.UNION INDEPENDIENTE AUTENTICA DE LA AAA, et al., Defendants. |
| Court | U.S. District Court — District of Puerto Rico |
OPINION TEXT STARTS HERE
Ericson Sanchez–Preks, Godwin Aldarondo–Girald, Aldarondo Girald Law Office, San Juan, PR, for Plaintiff.Harry Anduze–Montano, Jose A. Morales–Boscio, Harry Anduze Montano Law Office, Angel L. Tapia–Flores, Tapia & Aviles Law Office, Guillermo J. Ramos–Luina, San Juan, PR, for Defendants.
On December 30, 2005, plaintiff Jose Osvaldo Molina (“Molina”) filed a complaint against defendants Union Independiente Autentica (“Union”), Jesus M. Diaz–Allende, Hector Rene Lugo, Jorge Urbina, Jose Morales, Pedro Irene Maymi, Juan Garcia, Wilfredo Medina, and Andres Carrasquillo, in their official and personal capacities. (Docket No. 1.) The complaint alleged violations of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1962 (“RICO”); the Consolidated Omnibus Budget Reconciliation Act of 1985, 5 U.S.C. § 8905a (“COBRA”); the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq. (“ERISA”); the Labor Management Reporting and Disclosure Act, 29 U.S.C. § 401 et seq. (“LMRDA”); and Puerto Rico tort law 31 L.P.R.A. § 5141. (Docket No. 1.)
On May 8, 2008, 555 F.Supp.2d 284 (D.P.R.2008), this Court issued an Opinion and Order, adopting a United States Magistrate Judge's Report and Recommendation. 1 The order granted in part and denied in part defendants' motion to dismiss and granted defendants' motion to submit extrinsic documents only as to the Union's constitution and denied as to the other documents.2 (Docket No. 60.) Specifically, the Court's order dismissed Molina's claims under LMRDA and under COBRA with prejudice. The Court also dismissed Molina's Puerto Rico tort law claims which arose before December 30, 2004 with prejudice.3 Finally, the Court ordered Molina to file an amended complaint including detailed, conforming RICO allegations to cure the defects of his prior RICO pleadings. The Court's order stated that “failure to comply with this order will result in the dismissal with prejudice of plaintiff's RICO claims.” (Docket No. 60.)
Molina's amended complaint alleges that the defendants violated RICO, ERISA, 29 U.S.C. § 1001 (hereafter “ERISA”), and Puerto Rico's General Tort statute, Article 1802 of the Civil Code, P.R. Laws Ann. Tit. 31 § 5141. Id. On June 20, 2008, defendant Union 4 moved to dismiss the amended complaint on the grounds that “plaintiff [however] still failed to state a RICO and ERISA claim against the UIA, upon which relief should be granted.” (Docket No. 68.)
The Court agrees with defendants that plaintiff's amended complaint does not comply with pleading standards set forth under RICO and under ERISA, and, therefore, fails to state a claim under which this Court could grant relief.
To survive a motion to dismiss, a complaint must allege “a plausible entitlement to relief.” Rodriguez–Ortiz v. Margo Caribe, Inc., 490 F.3d 92, 95 (1st Cir.2007) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 559, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). To avoid dismissal, the complaint must contain factual allegations that “raise a right to relief above the speculative level,” or in other words, plaintiffs must “nudge[ ] their claims across the line from conceivable to plausible.” 5 Twombly, 550 U.S. at 555, 127 S.Ct. 1955.
The Court accepts all well-pleaded factual allegations as true, and draws all reasonable inferences in plaintiff's favor. See Correa–Martinez v. Arrillaga–Belendez, 903 F.2d 49, 51 (1st Cir.1990). The Court need not credit, however, “bald assertions, unsupportable conclusions, periphrastic circumlocutions, and the like” when evaluating the complaint's allegations. Aulson v. Blanchard, 83 F.3d 1, 3 (1st Cir.1996). When opposing a Rule 12(b)(6) motion, “a plaintiff cannot expect a trial court to do his homework for him.” McCoy v. Massachusetts Institute of Tech., 950 F.2d 13, 22 (1st Cir.1991). Plaintiffs are responsible for putting their best foot forward in an effort to present a legal theory that will support their claim. Id. at 23 (citing Correa–Martinez, 903 F.2d at 52). Plaintiffs must set forth “factual allegations, either direct or inferential, regarding each material element necessary to sustain recovery under some actionable theory.” Gooley v. Mobil Oil Corp., 851 F.2d 513, 514 (1st Cir.1988).
In his amended complaint, plaintiff alleges that defendants deprived him of his property by, inter alia, removing plaintiff from his position as Delegate without due process, imposing monetary sanctions and threatening plaintiff with expulsion from the Union, depriving plaintiff of his health insurance plan, wrongfully withholding plaintiff's weekly stipend from him, embezzling Union funds belonging to the Plan de Salud de la Union Independiente Autentica, Inc. (“Health Plan”) and the Union members, and conspiring to do the same. In his opposition to defendant's motion to dismiss, plaintiff alleges that defendants are liable for violations of subsections (a) and (c) of 18 U.S.C. § 1962,6 which provide:
(a) It shall be unlawful for any person who has received any income derived, directly or indirectly, from a pattern of racketeering activity or through collection of an unlawful debt in which such person has participated as a principal within the meaning of section 2, title 18, United States Code, to use or invest, directly or indirectly, any part of such income, or the proceeds of such income, in acquisition of any interest in, or the establishment or operation of, any enterprise which is engaged in, or the activities of which affect, interstate or foreign commerce ...
* * *
(c) It shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt.
“ ‘To state a claim under section 1962(c) [or (a) ], a plaintiff must allege each of the four elements required by the statute: (1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity.’ ” Fabrica de Muebles J.J. Alvarez, Inc. v. Westernbank de Puerto Rico, No. 09–1558, 2009 WL 4730776, at *4 (D.P.R. December 4, 2009) (citing North Bridge Ass., Inc. v. Boldt, 274 F.3d 38, 42 (1st Cir.2001)).
The Court adopted in its entirety 7 the United States Magistrate Judge's Report and Recommendation regarding an earlier motion to dismiss filed in this case. That report determined that the plaintiff's original complaint failed to state a cause of action under RICO because the complaint failed to allege (1) the existence of a RICO “enterprise” and (2) a pattern of racketeering activity. We now address whether plaintiff's amended complaint can withstand a motion to dismiss.
Plaintiff alleges that defendants are liable pursuant to section 1962(a) because the Union received and retained funds from the pattern of racketeering activity. Plaintiff did not allege any injury, however, “ ‘resulting from the investment of racketeering income distinct from an injury caused by the predicate acts themselves.’ ” Compagnie De Reassurance D'Ile de France v. New England Reinsurance Corp., 57 F.3d 56, 91 (1st Cir.1995) (citations omitted). In order to recover in a RICO action pursuant to section 1962(a), a plaintiff must prove that he or she was harmed as a result of defendant's use or investment of income derived from a pattern of racketeering activity in some enterprise. See id. Plaintiff has alleged injuries caused by defendant's “misappropriations of funds”; however, “[t]he subsequent use or investment of these funds has not resulted in any injury distinct from that caused by the predicate acts averred by Plaintiff.” Fabrica de Muebles, 2009 WL 4730776, at *5 (). Because plaintiff has failed to allege such an injury here, his claim pursuant to section 1962(a) cannot withstand a motion to dismiss.
The First Circuit Court of Appeals has held that in order for a plaintiff's section 1962(c) claim to survive a motion to dismiss, “the ‘person’ identified pursuant to section 1962(c) must be distinct from the ‘enterprise.’ ” Bessette v. Avco Financial Services, Inc., 230 F.3d 439, 448 (1st Cir.2000). Plaintiff has identified the Union and the individual defendants as “persons” liable for engaging in the pattern of racketeering activity. In his opposition to defendant's motion to dismiss, plaintiff maintains that (Docket No. 78.) Plaintiff alleges that the Health Plan “is a separate and different entity to that of Defendant.” Id. The evidence, however, shows otherwise.
According to the amended complaint, the Health Plan is a non-profit corporation organized by the Union, and the “Health Plan's Board of Directors was composed of the same individuals as the Union's Board of Directors, among them Co-defendants.” (Docket No. 61.) Thus, plaintiff admits that there is overlap in the identity of the “persons” and the “enterprise”, which is fatal to his claim pursuant to section 1962(c). The statute requires that the “persons” (i.e. the Union and the individual defendants) engaged in racketeering be distinct from the “enterprise” (in this case, the Health Plan) whose activities he or she seeks to conduct through...
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