Raineri Constr., LLC v. Taylor
| Decision Date | 31 January 2014 |
| Docket Number | Case No. 4:12-CV-2297 (CEJ) |
| Court | U.S. District Court — Eastern District of Missouri |
| Parties | RAINERI CONSTRUCTION, LLC, Plaintiff, v. KEITH TAYLOR, et al., Defendants. |
This matter is before the Court on defendants' motion to dismiss Counts I through IV of the first amended complaint for failure to state a claim for relief, pursuant to Fed.R.Civ.P. 12(b)(6). Plaintiff has filed a response in opposition and the issues are fully briefed. Also before the Court is the motion of the individual defendants to dismiss the claims against them in Count VIII. Plaintiff has conceded this motion.
Plaintiff Raineri Construction, LLC (Raineri) is a construction contractor. Defendant Carpenters District Council of Greater St. Louis and Vicinity (CDC) is a labor union that represents carpenters and other skilled workers in collective bargaining with construction contractors. The individual defendants, Keith Taylor, Scott Byrne, Paul Higgins, Al Bond, Mark Kabuss, Michael Ebert, Christopher Woods, George Wingbermuehle III, Tod Wingbermuehle, and Terry Nelson, are officers or members of the CDC.
In the first amended complaint, plaintiff asserts claims of violation of the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. §§ 1961-1968(Counts I-IV), tortious interference with business relations (Count V), civil conspiracy (Count VI), injurious falsehood (Count VII), and unfair labor practice, in violation of the Labor-Management Relations Act (LMRA), 29 U.S.C. § 158(b)(4) (Count VIII). Plaintiff alleges that, beginning in November 2011 and continuing "to date," defendants implemented a conspiracy to extort money and inflict substantial damages upon plaintiff by making threats of physical violence and property damage, stalking and harassing plaintiff's management and employees, defamation, filing frivolous complaints with the St. Louis City Building Department and the U.S. Department of Labor-Occupational Safety and Health Administration, and unlawfully interfering with plaintiff's existing and prospective business relations.
Defendants filed the instant motions seeking to dismiss plaintiff's amended complaint. Defendants argue that plaintiff does not have standing to assert claims based on RICO and that plaintiff has failed to state a claim in Counts I through IV.
The purpose of a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure is to test the legal sufficiency of the complaint. The factual allegations of a complaint are assumed true and construed in favor of the plaintiff, "even if it strikes a savvy judge that actual proof of those facts is improbable." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 556 (2007) (citing Swierkiewicz v. Sorema N.A., 534 U.S. 506, 508 n.1 (2002)); Neitzke v. Williams, 490 U.S. 319, 327 (1989) (); Scheuer v. Rhodes, 416 U.S. 232, 236 (1974) (). The issue is not whether the plaintiff will ultimately prevail, but whether the plaintiff is entitled to present evidence in support of his claim. Id. A viable complaint must include "enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp., 550 U.S. at 570. See also id. at 563 () "Factual allegations must be enough to raise a right to relief above the speculative level." Id. at 555.
Defendants argue that plaintiff does not have standing to assert RICO claims. "A RICO plaintiff only has standing if . . . he or she has been injured in his or her business or property by the conduct constituting a violation." Hamm v. Rhone-Poulenc Rorer Pharmaceuticals, Inc., 187 F.3d 941, 950 (8th Cir. 1999) (quoting Sedima S.P.R.L. v. Imrex Co., 473 U.S. 479, 495-96 (1985)). "Thus, the two requirements for RICO standing are (1) an injury to 'business or property' (2) caused 'by reason of' a RICO violation." Id. "[A] showing of injury requires proof of concrete financial loss, and not mere injury to a valuable intangible property interest." Gomez v. Wells Fargo, 676 F.3d 655, 660 (8th Cir. 2012) (quoting Regions Bank v. J.R. Oil Co., LLC, 387 F.3d 721, 728 (8th Cir. 2004)); Ironworkers Local Union 68 v. AstraZeneca, 634 F.3d 1352, 1361 (11th Cir. 2011) ().
In the instant case, the first amended complaint contains claims of loss of business expectancies and personal injury to the owner of the plaintiff corporation that are insufficient on their own to support RICO standing. See Cox, Cox, Filo, Camel &Wilson, LLC v. Sasol N. Am., Inc., 2013 U.S. Dist. LEXIS 120297, *8 (W.D. La. Aug. 21, 2013) (citing Price v. Pinnacle Brands, Inc., 138 F.3d 602, 607 (5th Cir. 1998) (); Vickers v. Weeks Marine, Inc., 414 Fed.Appx. 656, 656 (5th Cir. 2011) ().
However, plaintiff does allege that some of the defendants took actions that adversely affected the business, such as interfering with its current customer relationships, interfering with business operations, and causing property damage. [Doc. #32, at 8-15]. These types of allegations are sufficient to show economic loss, especially at this early stage of the litigation. Robbins v. Wilkie, 300 F.3d 1208, 1210 (10th Cir. 2002). Furthermore, a general allegation that defendants injured the plaintiff's business and/or property interests has been held to be sufficient to confer standing under RICO. See id. (citing NOW v. Scheidler, 510 U.S. 249, 256 (1994)). Thus, the Court finds that plaintiff has standing to bring its RICO claims (Count I-IV).
Defendants further argue that plaintiff has failed to properly plead its RICO claims. Section 1962(c) provides: "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[.]" 18 U.S.C. § 1962(c). Thus, in order to sufficiently plead a violation under § 1962(c), a plaintiff must show that the defendant engaged in (1) the conduct of an enterprise; (2) through a patternof racketeering. Schoedinger v. United Healthcare of Midwest, Inc., 557 F.3d 872, 876 (8th Cir. 2009).
"In order to avoid dismissal for failure to state a claim, a plaintiff must plead specific facts, not mere conclusory allegations, which establish the existence of an enterprise." Elliot v. Foufas, 867 F.2d 877, 881 (5th Cir. 1989). An enterprise can include any "union or group of individuals associated in fact although not a legal entity." 18 U.S.C. § 1961(4). However, the alleged enterprise must be an entity separate and distinct from the pattern of racketeering activity in which it engages. United States v. Turkette, 452 U.S. 576, 583 (1981). In other words, "there must be some showing of an ascertainable structure beyond that inherent in the pattern of racketeering activity." Rao v. BP Products North America, Inc., 589 F.3d 389, 399 (7th Cir. 2009).
In addition, a plaintiff must show that the association-in-fact possesses three structural features: (1) a common purpose or interest; (2) relationships among those associated with the enterprise; (3) and longevity sufficient to permit the associates to pursue the enterprise's purpose. Boyle v. United States, 556 U.S. 938 (2009). Plaintiff must show that each of the "defendants conducted or participated in the conduct of the 'enterprises's affairs,' not just their own affairs." Reeves v. Ernst & Young, 507 U.S. 170, 185 (1993).
"In deciding whether an alleged RICO enterprise has an ascertainable structure distinct from the pattern of racketeering activity, [a court] must 'determine if theenterprise would still exist were the predicate acts removed from the equation.'" Crest Constr. II, Inc. v. Doe, 660 F.3d 346, 354-55 (8th Cir. 2011) (quoting Handeen v. Lemaire, 112 F.3d 1339, 1342 (8th Cir. 1997)); Diamonds Plus, Inc. v. Kolber, 960 F.2d 765, 770 (8th Cir. 1992) (); see also Walters v. McMahen, 684 F.3d 435, 440 (11th Cir. 2001) ().
In framing its RICO claims, plaintiff pleads the existence of two association-in-fact enterprises: (1) the Carpenters Enterprise and (2) the Carpenters Funds Enterprise. Plaintiff alleges that the legitimate purpose of the Carpenters Enterprise is to attract and retain members engaged in carpentry to provide manpower services to construction contractors. Plaintiff alleges that the legitimate purpose of the Carpenters Funds Enterprise is to provide cost-effective and qualified health insurance and pension plans to CDC members, retirees, and their families. The plaintiff further alleges that the individual defendants utilized both enterprises to further their illegitimate purpose of extorting money and property from plaintiff.
The Court finds that plaintiff has sufficiently alleged that the Carpenters Enterprise and the Carpenters Funds Enterprise are structures separate and distinct from the alleged acts of racketeering. If these two enterprises were to cease their alleged extortion against plaintiff, they would continue to exist as entities providing services to construction contractors and health insurance and pension plans. See United...
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