LANCE M. AFRICK, District Judge.
Before the Court is an uncontested motion
The claims asserted in this case are rooted in the Louisiana Racketeering Act ("Louisiana RICO"). Plaintiffs allege that S&P formed an enterprise for the purpose of securing federally funded construction projects in Orleans Parish by submitting bids that members of the enterprise knew would be low enough to guarantee awarding of the contracts but insufficient to adequately and timely complete the work through subcontractors.
Plaintiffs filed this lawsuit in state court on October 27, 2017.
Rule 12(b)(6) of the Federal Rules of Civil Procedure permit a district court to dismiss a complaint, or any part of it, when a plaintiff has not set forth well-pleaded factual allegations that would entitle him to relief. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007); Cuvillier v. Taylor, 503 F.3d 397, 401 (5th Cir. 2007). A plaintiff's factual allegations must "raise a right to relief above the speculative level." Twombly, 550 U.S. at 555. In other words, a complaint "must contain sufficient factual matter, accepted as true, to `state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570)).
A facially plausible claim is one where "the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678. If the well-pleaded factual allegations "do not permit the court to infer more than the mere possibility of misconduct," then "the complaint has alleged—but it has not `show[n]'—`that the pleader is entitled to relief.'" Iqbal, 556 U.S. at 679 (quoting Fed. R. Civ. P. 8(a)(2)) (alteration in original).
In assessing the complaint, the Court must accept all well-pleaded factual allegations as true and liberally construe all such allegations in the light most favorable to the plaintiff. Spivey, 197 F.3d at 774; Lowrey v. Tex. A&M Univ. Sys., 117 F.3d 242, 247 (5th Cir. 1997). Where "the complaint `on its face show[s] a bar to relief,'" then dismissal is the appropriate course. Cutrer v. McMillan, 308 Fed. App'x. 819, 820 (5th Cir. 2009) (quoting Clark v. Amoco Prod. Co., 794 F.2d 967, 970 (5th Cir. 1986)).
To state a valid civil claim under Louisiana RICO, a party must show that (1) a person engaged in (2) a pattern of racketeering activity (3) connected to the acquisition, establishment, conduct, or control of an enterprise.
La. Rev. Stat. 15:1352(C). "Racketeering activity" means "committing, attempting to commit, conspiring to commit, or soliciting, coercing, or intimidating another person to commit any crime that is punishable under" one of 65 specified Louisiana criminal statutes. La. Rev. Stat. 15:1352(A)(1)-(65).
S&P argues that plaintiffs have failed to state a claim upon which relief can be granted, as all of plaintiffs' Louisiana RICO claims are time-barred. Louisiana RICO is subject to a five-year prescriptive period. La.Rev.Stat. § 15:1356(H); Ames v. Ohle, 97 So.3d 386, 391 (La. Ct. App. 4th Cir. 2012). "Prescription begins to run against a claimant when he obtains actual or constructive knowledge of facts indicating a cause of action." Ames, 97 So.3d at 394 (citing Barbe v. Am. Sugar Refining, Inc., 83 So.3d 75, 83 (La. Ct. App. 4th Cir. 2011)). "Constructive knowledge of facts indicating a cause of action is whatever notice is enough to excite attention and put the injured party on guard and call for further inquiry." Id. Likewise, the Fifth Circuit "has adopted an `injury discovery rule,' whereby `a civil RICO claim accrues when the plaintiff discovers, or should have discovered, the injury.'" Joseph v. Bach & Wasserman, 487 Fed. App'x 173, 176. "It is discovery of the injury, and not other elements of a RICO claim, that starts the limitations period running." Id. (citing Rotella v. Wood, 528 U.S. 549, 556 (2000)). This injury discovery rule applies to Louisiana RICO claims. See Farmer v. D&O Contractors, Inc., 640 Fed. App'x 302, 304 n.3 (5th Cir. 2016) ("Both [the federal and Louisiana RICO] limitations periods begin to run when a plaintiff has knowledge or constructive knowledge of the injury giving rise to a cause of action.").
Further, "consistent with, and based on, the `injury discovery' rule," racketeering claims involving a string of separate injuries are subject to a "separate accrual" rule. Love v. Nat'l Med. Enter., 230 F.3d 765, 775 (5th Cir. 2000). This rule "allows a civil RICO claim to accrue for each injury when the plaintiff discovers, or should have discovered, that injury." Id. at 773. Accordingly, when a RICO claim involves alleged racketeering activity that occurred both inside and outside the limitations period, recovery is allowed "for injury caused by the commission of a separable, new predicate act within the limitations period." Id.
Under the separate accrual rule, however, a plaintiff is not permitted to "use an independent, new predicate act as a bootstrap to recover for injuries caused by other earlier predicate acts that took place outside the limitations period." Id. (quoting Klehr v. A.O. Smith Corp., 521 U.S. 179, 190 (1997)). Stated another way, a plaintiff may only recover for racketeering injuries discovered or discoverable within the limitations period. See Jaso v. Coca Cola Co., 435 Fed. App'x 346, 355 (5th Cir. 2011) (holding, in a case involving alleged racketeering activity spanning from 1994 to 2010, that even if plaintiff knew of RICO injuries in 1994, he could still recover for injuries caused by racketeering activity that took place within the limitations period); see also Bingham v. Zolt, 66 F.3d 553, 560 (2d Cir. 1995) ("As long as separate and independent injuries continue to flow from the underlying RICO violations— regardless of when those violations occurred—plaintiff may wait indefinitely to sue, but may then win compensation only for injuries discovered or discoverable within [the limitations period], together, of course, with any provable future damages.").
Plaintiffs filed their state court petition on October 27, 2017. Therefore, any claims regarding injuries arising before October 27, 2012 about which plaintiffs had actual or constructive knowledge are prescribed.
Plaintiffs' state court petition alleges that the defendants' RICO enterprise began on November 5, 2009 and ended on October 30, 2012.
Plaintiff Perle's injury dates back to 2011.
Subsequently, CDW filed a verified petition for summary proceeding in the Civil District Court for the Parish of Orleans in order to remove the lien filed by Perle. This petition allegedly contained materially false statements—namely, that CDW never had any subcontract or contract of any kind with Perle and that Perle had never been a subcontractor or otherwise provided labor for CDW on the project. Additionally, an S&P representative evidently testified on behalf of CDW at a hearing on the petition.
Plaintiffs allege that CDW's petition constitutes racketeering activity, as it is a false public record filed in violation of Louisiana Revised Statute 14:133.
Similarly, plaintiff Hall Collums Construction's ("HCC") stated injury occurred in early 2010.
With respect to plaintiff Viking, the pertinent injury appears to have occurred on July 25, 2012, when an attorney for S&P allegedly threatened to report Viking's owner for federal payroll fraud, somehow preventing him from testifying and "presenting his claim" in an arbitration proceeding.
Finally, plaintiffs Educational Electronics Corporation ("EEC"), Novo Communications, LLC ("Novo"), and Tom Branighan, Inc. ("TBI") trace their injuries back to a project at L.B. Landry High School.
In each of the aforementioned instances, the ostensibly injured plaintiffs knew or should have known of their injuries prior to October 27, 2012.
Accordingly,
Under the injury discovery rule and the corollary separate accrual rule, this purportedly defective merger is the only relevant conduct for which plaintiffs could possibly recover. Indeed, it is the only racketeering activity alleged to have occurred within five years of the plaintiffs bringing suit, and the only activity that could have injured the plaintiffs within that prescriptive period. Yet plaintiffs have failed to identify, and the Court cannot discern, any injury attributable to the merger.
Even assuming that the documents signed by Pontikes and filed by S&P suffice to establish a criminal violation for filing false public records, plaintiffs do not allege any facts that show how the filing has damaged them in any way. Rather, as S&P argues, it appears that "[p]laintiffs are relying upon the merger (which in no way affected them) to salvage their right to pursue wholly unrelated claims . . ." This they cannot do. See Sedima, S.P.R.L. v. Imrex Co., Inc., 473 U.S. 479, 496 (1985) (A RICO "plaintiff only has standing if, and can only recover to the extent that, he has been injured in his business or property by the conduct constituting the violation."); see also Landry v. Airline Pilots Ass'n Int'l AFL-CIO, 892 F.2d 1238, 1260-61 (5th Cir. 1990) ("[T]he acts of sabotage are not actionable because the pilots did not allege or show that they sustained any injury as a result.").