SARA LIOI, District Judge.
On October 16, 2012, plaintiffs, Reggie Huff and Lisa Huff, filed a pro se complaint in this Court alleging: violations of the federal Racketeer Influenced and Corrupt
The allegations in the 43-page complaint are confusing, rambling, and, at times, inflammatory. Although much thought and attention appears to have gone into its preparation, the complaint is ultimately held together by a string of conclusory allegations.
The facts and circumstances of this RICO-based fraud case can be traced to a personal injury proceeding originating in the court of common pleas sitting in Trumbull County, Ohio.
Plaintiffs filed suit against Ohio Edison, defendant FirstEnergy Corporation, and Asplundh Tree Expert Company, the company hired to inspect and maintain trees and vegetation along Ohio Edison's power lines. The state trial court granted summary judgment to the defendants, finding that they owed no duty to Lisa Huff. With respect to Ohio Edison, the trial court found that it did not have actual or constructive notice of any defects in the tree or that it posed any threat of injury. Huff v. FirstEnergy Corp., 130 Ohio St.3d 196, 199, 957 N.E.2d 3 (2011). The state court of appeals reversed, finding that there was a question of fact as to whether Lisa Huff had enforceable rights under the contract between Ohio Edison Company and Asplundh as a third-party beneficiary. Id.
The Ohio Supreme Court first denied discretionary review. On reconsideration,
On October 16 2012, plaintiffs
Plaintiffs have alleged a conspiracy between judicial defendants and FirstEnergy defendants to influence litigation involving FirstEnergy defendants. In the complaint, plaintiffs aver:
(Compl. ¶ 12.)
According to the complaint, FirstEnergy defendants relied on bribes and a "straw donor" scheme to ensure that the judicial defendants would ultimately rule in Ohio Edison's favor in Lisa Huffs personal injury action. The straw donor scheme was allegedly executed by Vespoli and Alexander, who would (along with their spouses) make individual donations to the judicial defendants in an apparent effort to circumvent the monetary limits placed on corporate campaign contributions. (Id. ¶¶ 38-39.) Specifically, the complaint provides that:
(Compl. ¶¶ 37-38.)
Plaintiffs aver that the "so-called personal contributions" of Vespoli, Alexander, and their spouses "align[ed] perfectly" with FirstEnergy PAC FSL contributions, and suggest that unidentified evidence "supports allegations that spouses likely did not write separate checks or transfer funds in their own names independently, which is legal only as a segregated act from the overall pattern of unlawful conduct." (Compl. ¶ 39(A) and (D).) According to plaintiffs, "[t]his fact supports the conclusion that contributions were not the product of an independent family decision and did not involve actual losses to the spouse as they were to be reimbursed or had already been remunerated by
With respect to the related bribery scheme, the complaint provides:
(Compl. ¶ 13).
Plaintiffs surmise, without support, that after the court of appeals reversed the state trial court's judgment in the personal injury action, FirstEnergy defendants
(Compl. ¶¶ 45, 46.) According to the complaint, the judicial defendants'"end of the
FirstEnergy defendants bring the present motion under Rule 12(b)(6) of the Federal Rules of Civil Procedure, maintaining that the complaint fails to state a cause of action. To satisfy the pleading requirements of Rule 8, a complaint "must contain... a short and plain statement of the claim showing that the pleader is entitled
A complaint need not set down in detail all the particulars of a plaintiff's claim. However, "Rule 8 ... does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (This standard requires "more than an unadorned, the-defendant-unlawfully-harmed-me accusation.") "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. (citing Twombly, 550 U.S. at 555, 127 S.Ct. 1955); see Gregory v. Shelby County, 220 F.3d 433, 446 (6th Cir.2000) (the court should not accept conclusions of law or unwarranted inferences couched in the form of factual allegations). The complaint "must contain either direct or inferential allegations respecting all the material elements to sustain a recovery under some viable legal theory." Scheid v. Fanny Farmer Candy Shops, Inc., 859 F.2d 434, 436 (6th Cir.1988) (emphasis in original) abrogated on other grounds, Buckhannon Bd. & Care Home, Inc. v. W.Va. Dep't of Health and Human Resources, 532 U.S. 598, 121 S.Ct. 1835, 149 L.Ed.2d 855 (2001).
Because plaintiffs' RICO claims require proof of mail or wire fraud as an element, the plaintiffs must also satisfy the heightened particularity requirements of Federal Rule of Civil Procedure 9(b) with respect to the elements of fraud. Heinrich v. Waiting Angels Adoption Servs., Inc., 668 F.3d 393, 403 (6th Cir.2012). "Rule 9(b) states that `in alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake.'" Id. (quoting Fed.R.Civ.P. 9(b)). This includes alleging the "time, place, and content" of the alleged fraudulent acts; the existence of "the fraudulent scheme," the "intent" of the participants in the scheme, and "the injury resulting from the fraud." Heinrich 668 F.3d at 403 (internal quote and cite omitted). See Bender v. Southland Corp., 749 F.2d 1205, 1216 (6th Cir.1984) (upholding the district court's dismissal of RICO claims where the complaint failed to allege adequate particularity).
In considering the motion to dismiss, the Court is mindful that pro se complaints must be held "to less stringent standards than formal pleadings drafted by lawyers." Haines v. Kerner, 404 U.S. 519, 520, 92 S.Ct. 594, 30 L.Ed.2d 652 (1972); see Estelle v. Gamble, 429 U.S. 97, 106, 97 S.Ct. 285, 50 L.Ed.2d 251 (1976). Nonetheless, "pro se plaintiffs are not automatically entitled to take every case to trial." Pilgrim v. Littlefield, 92 F.3d 413, 416 (6th Cir. 1996). "As [the Sixth Circuit] has noted, the lenient treatment generally accorded to pro se litigants has limits." Id. (citing Jourdan v. Jabe, 951 F.2d 108, 110 (6th Cir.1991)). For example, where "a complaint consist[s] of nothing more than naked assertions, and set[s] forth no facts upon which a court could find a violation of the Civil Rights Acts, [it] fails to state a claim under Rule 12(b)(6)." Yusuf v. Vassar College, 35 F.3d 709, 713 (2d Cir.1994)
As a preliminary matter, the Court must address plaintiffs' motion to strike (Doc. No. 10). FirstEnergy defendants oppose the motion (Doc. No. 14), and plaintiffs have filed a reply (Doc. No. 16). By their motion, plaintiffs seek to strike defendants' entire Rule 12(b)(6) motion on the grounds that it relies upon matters that are beyond the pleadings. Specifically, plaintiffs complain that defendants have cited "extrinsic, false and out of context matters namely the idea that Plaintiffs have been sanctioned for `frivolous' litigation." (Doc. No. 10-1 at 3, Page ID #245.) While plaintiffs insist that these prior sanctions were "directed at obstructing justice for the benefit of well funded racketeers that had arranged to have litigation fixed rather than face severe punishment as commanded in Law[,]" plaintiffs argue that this extrinsic evidence is "immaterial," and can only serve to distract the Court and prejudice plaintiffs. (Id.)
Plaintiffs also take issue with the fact that defendants represented in their dispositive motion that the state appellate court affirmed a finding that Ohio Edison "owed no traditional tort duty to Ms. Huff." (Doc. No. 10-1 at 3, Page ID #245 [quoting Doc. No. 7-1 at 3, Page ID #154].) Plaintiffs insist that this statement is false, arguing that the appellate court did not conduct a de novo review, but, instead, sustained all of Lisa Huff's assignments of error. According to plaintiffs, this is a key issue in the present litigation.
FirstEnergy defendants argue that "`[a] motion to dismiss is not actually a `pleading' from which matter could be struck.'" (Doc. No. 14 at 1. Page ID #313 [quoting Clark v. Walt Disney Co., No. 2:08-cv-982, 2009 WL 1026451, at *1 (S.D.Ohio Apr. 15, 2009) (further citations omitted)].) This Court agrees. Under Rule 12(f) of the Federal Rules of Civil Procedure, "a court may strike only material that is contained in the pleadings." Fox v. Mich. State Police Dept., 173 Fed. Appx. 372, 375 (6th Cir.2006). Because Fed.R.Civ.P. 7(a) confines its definition of pleadings to "(1) a complaint; (2) an answer to a complaint; (3) an answer to a counterclaim designated as a counterclaim; (4) an answer to a crossclaim; (5) a third-party complaint; (6) an answer to a third-party complaint; and (7) if the court orders one, a reply to an answer[,]" a motion to dismiss cannot be considered a pleading within the meaning of Rule 7(a).
Moreover, it is well settled that federal courts may consider matters that are of public record or otherwise appropriate for taking judicial notice without converting a Rule 12(b)(6) motion to a Rule 56 motion. New England Health Care Employees Pension Fund v. Ernst & Young, LLP, 336 F.3d 495, 501 (6th Cir.2003); see Amini v. Oberlin Coll., 259 F.3d 493, 502
Thus, and for all of the reasons set forth above, plaintiffs' motion to strike FirstEnergy defendants' motion to dismiss is DENIED. However, the Court finds it unnecessary to consider whether plaintiffs have been sanctioned in other courts in order to resolve the pending dispositive motion. The question of sanctions is not before this Court. FirstEnergy defendants' motion merely requests that the Court evaluate the sufficiency of the complaint to determine whether it fails to state a cause of action under any of the pleaded statutes. Therefore, the Court shall confine itself to the analysis laid out in Rule 12(b)(6).
While plaintiffs complain that FirstEnergy defendants have relied upon matters outside of the four corners of the complaint in moving for dismissal under Rule 12(b)(6), plaintiff Reggie Huff, himself, moves the Court to take judicial notice of matters outside the pleadings. In a motion filed May 13, 2013, Reggie Huff invites the Court to take judicial notice of recently publicized remarks made by former Michigan Supreme Court Justice Elisabeth Weaver (Doc. No. 23).
FirstEnergy defendants oppose the motion, arguing both that the remarks and the book fail to meet the federal evidentiary criteria for judicial notice, and that the
Additionally, the Court finds it necessary to comment on the difference between possibility and plausibility. Federal Civil Rules of Procedure 8 and 9(b) require more than the theoretical possibility that public corruption may exist. Rather, such legal conclusions "must be supported by factual allegations" that give rise to an inference that the defendant is, in fact, liable for the misconduct alleged. Iqbal, 556 U.S. at 679, 129 S.Ct. 1937. The factual allegations must show more than a possibility that the defendant acted unlawfully. "Where a complaint pleads facts that are `merely consistent with' a defendant's liability, it `stops short of the line between possibility and plausibility of `entitlement to relief."" Id. at 678, 129 S.Ct. 1937 (quoting Twombly, 550 U.S. at 557, 127 S.Ct. 1955). The fact that plaintiffs perceive a general culture of corruption in our society, and can point to unrelated instances in the news and in other settings, brings them no closer to stating a cause of action for fraud against the defendants in this case. With that, the Court now turns to plaintiffs' complaint, and the allegations against FirstEnergy defendants.
FirstEnergy defendants contend that plaintiffs' claims should be dismissed for lack of subject matter jurisdiction because they are barred by the Rooker-Feldman doctrine. Specifically, they argue that plaintiffs are impermissibly attempting to collaterally attack the Ohio Supreme Court's decision, on reconsideration, to overturn the state appellate court's decision remanding the personal injury action back to the trial court. According to FirstEnergy defendants, this Court cannot rule in plaintiffs' favor "without reviewing and potentially rejecting the merits of the state-court decision." (Doc. No. 7-1 at 7, Page ID #158.)
Plaintiffs insist that they are not attempting to re-litigate any claims raised in state court. While they maintain that the "final legal conclusion in state court is wrong," they represent that they are seeking redress for the deprivation of the right to engage in state court in an environment free of the taint of judicial corruption. (Doc. No. 12 at 10, Page ID #273.) As such, they maintain that their complaint puts the Rooker-Feldman doctrine "out of sight." (Id.)
The Rooker-Feldman doctrine arose from two Supreme Court decisions interpreting 28 U.S.C. § 1257(a), a statute which is "designed to prohibit end-runs around state court judgments that might occur when parties go into federal court essentially seeking a review of a state-court decision."
Application of the Rooker-Feldman doctrine "is confined to cases of the
Thus, following the decision in Exxon, the pertinent inquiry is to determine the "source of the injury" that is addressed by a plaintiff's federal cause of action. See Kovacic, 606 F.3d at 309 (applying the "source of the injury" inquiry and rejecting the previously embraced "inextricably intertwined" standard); Lawrence, 531 F.3d at 368-69 (same); McCormick v. Braverman, 451 F.3d 382, 394-95 (6th Cir. 2006) (same). Under this inquiry, "[i]f the source of the injury is the state court decision, then the Rooker-Feldman doctrine would prevent the district court from asserting jurisdiction. If there is some other source of injury, such as a third party's actions, then the plaintiff asserts an independent claim." McCormick, 451 F.3d at 393.
In the present case, FirstEnergy defendants contend that plaintiffs are seeking to "vindicate wrongs allegedly caused by the Ohio Supreme Court's decision in [the state court action]," and argue that "the Court cannot make that determination without reviewing and potentially rejecting the merits of the state-court decision." (Doc. No. 7-1 at 7, Page ID #158.) In support of their position, defendants cite to various complaint allegations that suggest that the source of plaintiffs' injury is the state court ruling. (See Compl. ¶¶ 47(g), 63, 65, 75, 78, 81, 85.)
Plaintiffs counter, emphasizing that their claims:
(Doc. No. 12 at 9, Page ID #272.) Consistent with this position, the complaint repeatedly provides that plaintiffs have been harmed by the deprivation of the "honest services" of public officials "by and through the bribery of public officials, namely a super majority of the Ohio Supreme Court Justices." (Compl. ¶ 41; see
Courts are far from uniform in their treatment of similar allegations. In Karas v. Robbins, Civ. A. No. 08-5264(SRC), 2009 WL 2912778 (D.N.J. Sept. 9, 2009), a plaintiff filed a federal action alleging that her rights to a fair adjudication of her state landlord-tenant were violated by various state court judges, who allegedly accepted bribes and kickbacks in exchange for a ruling in favor of the plaintiff's tenants. The court found that the Rooker-Feldman doctrine barred the federal action because the federal action was "inextricably intertwined" with the prior state action, noting that a ruling by the district court in favor of plaintiff would "have the effect of overruling and/or vacating the orders and judgments rendered by the state court judges during the course of the state court action." 2009 WL 2912778, at *5. Similarly, in Castiglione v. Papa, 1:09-CV-0967 (LEK/DRH), 2010 WL 2044688 (N.D.N.Y. May 24, 2010), a plaintiff brought suit against state judges and private individuals alleging that defendants conspired to deprive her of her rights in probate to the proceeds of her father's estate. In imposing a Rooker-Feldman doctrine bar to the federal action, the district court reasoned that the federal claims were merely asserted as "a way of explaining the state court decisions" that plaintiff was requesting that the federal court review and reject. 2010 WL 2044688, at *7, aff'd, 423 Fed.Appx. 10 (2d Cir.2011).
The Seventh Circuit reached a contrary result in Loubser v. Thacker, 440 F.3d 439 (7th Cir.2006). There, the plaintiff alleged that defendants, her former husband, judges, court reports and others involved in her divorce proceedings, conspired to defraud her by corrupting those state court proceedings. In reversing the district court's dismissal, the court reasoned that "[t]he claim that a defendant in a civil rights suit `so far succeeded in corrupting the state judicial process as to obtain a favorable judgment' is not barred by the Rooker-Feldman doctrine." Loubser, 440 F.3d at 441 (citing Nesses v. Shepard, 68 F.3d 1003, 1005 (7th Cir.1995)). See also Davit v. Davit, 173 Fed.Appx. 515, 517 (7th Cir.2006) (reversing the district court's finding that Rooker-Feldman barred a civil RICO claim that defendants conspired to deprive plaintiff of a fair state court domestic relations proceeding, but affirming the district court's alternative ruling that the complaint failed to state a cause of action under Rule 12(b)(6)).
A district court in the Northern District of Alabama was faced with complaint allegations that contained the same general flavor as those presented in plaintiffs' complaint.
Like the plaintiff in Blackburn, plaintiffs insist that the source of their injury is the deprivation of a state judicial process free of the taint of public corruption, and that the denial of Lisa Huffs personal injury claim is merely a "RICO proceed." (Doc. No. 12 at 9, Page ID #272.) By alleging the deprivation of the honest services of the judicial defendants through bribery, the Court finds that plaintiffs have identified an injury separate and apart from the rulings issued in state court.
FirstEnergy defendants next contend that plaintiffs' claims must be dismissed for failure to state a cause of action. Plaintiffs assert substantive federal RICO claims under 18 U.S.C. §§ 1962(b) and (c). Under § 1962(b), plaintiffs must plead facts tending to establish that FirstEnergy defendants "(1) acquired or maintained (2) through a pattern of racketeering activity or the collection of an unlawful debt (3) an interest in or control of an enterprise (4) engaged in, or the activities of which affect, interstate or foreign commerce." Advocacy Org. for Patients & Providers v. Auto Club Ins. Ass'n, 176 F.3d 315, 321-22 (6th Cir.1999) (internal quotation and citation omitted). To state a civil RICO claim under § 1962(c), plaintiffs must plead the following elements: "(1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity." Sedima, S.P.R.L. v. Imrex Co., Inc., 473 U.S. 479, 496, 105 S.Ct. 3275, 87 L.Ed.2d 346 (1985); Moon v. Harrison Piping Supply, 465 F.3d 719, 723 (6th Cir.2006).
"Racketeering activity" is defined in 18 U.S.C. § 1961(1) as any one of a numerous list of state and federal offenses that qualify as racketing activity. Plaintiffs assert that FirstEnergy defendants engaged in
Plaintiffs allege that FirstEnergy defendants employed two mechanisms to deprive plaintiffs of their right to honest services of the judicial defendants: a straw-man donor scheme and a bribery scheme. A claim of honest-services fraud must allege the fraudulent deprivation of honest services through a bribery or kickback scheme. Skilling v. United States, 561 U.S. 358, 130 S.Ct. 2896, 2931, 177 L.Ed.2d 619 (2010). Therefore, a straw-man donor scheme, whose aim was allegedly to circumvent campaign donation limitations, cannot support a claim of honest services fraud. See United States v. Turner, 465 F.3d 667, 669 (6th Cir.2006) (use of "straw" donor scheme to avoid the personal campaign contribution limit constituted a scheme to deprive citizens of the right to honest elections and not the right to the honest services of elected officials) (emphasis added).
However, a bribery scheme may support a claim for honest services fraud, Skilling, 130 S.Ct. at 2931, so long as a plaintiff pleads facts establishing sufficient grounds to infer "a quid pro quo" — that "the payor provided a benefit to a public official intending that he will thereby take favorable official acts that he would not otherwise take." United States v. Wright, 665 F.3d 560, 568 (3d Cir.2012). Where, as here, the alleged bribe is a campaign contribution, the facts must show that the contribution was given "in return for a specific official action ... No generalized expectation of some future action will do." United States v. Siegelman, 640 F.3d 1159, 1171 (11th Cir.2011); see United States v. Terry, 707 F.3d 607, 613 (6th Cir.2013) ("A donor who gives money in the hope of unspecified future assistance does not agree to exchange payments for actions. No bribe thus occurs if the elected official later does something that benefits the donor. On the other hand, if the donor ... makes a contribution so that an elected official will `do what I ask him to do,' and the official ... accepts the payment with the same understanding, the donor and the official have formed a corrupt bargain.") (internal record citation omitted).
Here, plaintiffs allege the existence of a quid pro quo agreement whereby the judicial defendants agreed to take "unique, special, specific AND improper official acts needed to prevail in a major civil suit [the Huff personal injury suit] [,]" in exchange for a $150,000 bribe. (Compl. ¶ 13.) Such an agreement, properly supported by factual allegations, would seem to satisfy the quid pro quo necessary to mark the "difference between a run-of-the-mine contribution and a bribe." Terry, 707 F.3d at 613.
Nonetheless, the only facts offered in support of this conclusory allegation include the existence of campaign contributions, the reversal, on reconsideration, by the Ohio Supreme Court, the fact that this ruling benefited FirstEnergy defendants, plaintiffs' belief that such a ruling
Plaintiffs attempt to fill in the gaps with additional conclusory allegations that the reversal "smacks of a payoff[,]" that plaintiffs are "forced to suspect" that "an unlawful
In opposition to the motion to dismiss, plaintiffs also point to unrelated criminal public corruption trials over which this Court has presided in the past, their suspicions as to why the Ohio Supreme Court voted unanimously to reverse the court of appeals when only five justices voted to reconsider the appeal, and a 2003 law review article that plaintiffs believe demonstrates that courts engage in "docket clearing" techniques. (Doc. No. 12 at 2-14, Page ID #265-277.) The existence of evidence of unrelated public and judicial corruption, however, cannot support a complaint against FirstEnergy defendants. Likewise plaintiffs' views on the justice
At its core, plaintiffs' allegations of honest services fraud comprise nothing more than innocuous facts mixed with conclusory allegations. The complaint is wholly lacking in any factual support for plaintiffs' suspicions of fraud. See Bishop v. Lucent Techs., Inc., 520 F.3d 516, 519 (6th Cir. 2008) ("Even under Rule 12(b)(6), a complaint containing a statement of facts that merely creates a suspicion of a legally cognizable right of action is insufficient.") To allow this case to go forward on these allegations would unnecessarily expose defendants' reputations to unsubstantiated allegations of wrongdoing and amount to condoning a "fishing expedition in order to find a cause of action." Hollowell v. Cincinnati Ventilating Co., 711 F.Supp.2d 751, 769 (E.D.Ky.2010) (quoting Ranke v. Sanofi-Synthelabo Inc., 436 F.3d 197, 204 (3d Cir.2006)); see Chesbrough, 655 F.3d at 466. Thus, the Court concludes that the complaint fails to satisfy the general pleading requirements of Rule 8, and the more demanding pleading requirements of Rule 9(b) to establish the predicate acts of honest services fraud.
Plaintiffs also attempt to establish the existence of traditional mail and wire fraud as predicate acts for their RICO claims. Mail fraud consists of "(1) a scheme to defraud, and (2) use of the mails in furtherance of the scheme." United States v. Jamieson, 427 F.3d 394, 402 (6th Cir.2005). "The elements of wire fraud are essentially the same except that one must use the wires in furtherance of the scheme to defraud." Heinrich, 668 F.3d at 404 (citation omitted).
For purposes of mail and wire fraud, the scheme to defraud must include an intent to "deprive another ... of money or property[.]" See United States v. Cunningham, 679 F.3d 355, 370 (6th Cir.2012). According to the complaint, FirstEnergy defendants intended to deprive plaintiffs of Lisa Huffs personal injury claim. (Compl. ¶ 63.) FirstEnergy defendants argue that, "[e]ven if a civil claim could be money or property for purposes of §§ 134 and 1343," plaintiffs have failed to allege facts that would plausibly suggest that the property was lost due to alleged fraud. (Doc. No. 7-1 at 12, Page ID #163.) Plaintiffs offer the same conclusory allegations relating to the quid pro quo bribery scheme that failed to plausibly support a claim for honest service fraud to support their traditional mail and wire fraud claims, which the Court has already determined fall far short of satisfying Rule 8 and Rule 9(b).
Additionally, plaintiffs' allegations regarding the straw-donor scheme fail to state a claim for traditional mail or wire fraud because, "[i]n the context of election fraud [through a straw-donor scheme], the government and citizens have not been deprived of any money or property," but "have simply lost the intangible right to elect the official...." Turner, 465 F.3d at 680. Indeed, plaintiffs do not even allege that the strawdonor scheme was "intend[ed] to deprive" them — or someone else — "of money or property." Cunningham, 679 F.3d at 370 (internal quotation marks omitted). To the contrary, they assert that the intent was "to thwart the... contribution limits" (Compl. ¶ 38) and "to influence the judicial candidates[.]" (Id. ¶ 39(I)). Thus, the complaint fails to state a claim for mail or wire fraud.
To establish a "pattern of racketeering activity," a plaintiff must allege "at least two predicate acts of racketeering activity occurring within a ten-year period[,]" Moon, 465 F.3d at 723, and "show that the racketeering predicates are related, and that they amount to or pose a threat of continued criminal activity." H.J. Inc. v. Nw. Bell Tele. Co., 492 U.S. 229, 239, 109 S.Ct. 2893, 106 L.Ed.2d 195 (1989) (emphasis in original). "Continued activity" may be plead by demonstrating "a series of related predicates extending over a substantial period of time" ("closed continuity"), or "past conduct that by its nature projects into the future with a threat of repetition" ("open-ended continuity"). Moon, 465 F.3d at 724 (internal quotation and citation omitted).
With respect to closed continuity, "racketeering activity lasting only `a few weeks or months and threatening no future criminal conduct' is insufficient." Moon, 465 F.3d at 726 (quoting H.J. Inc., 492 U.S. at 242, 109 S.Ct. 2893). FirstEnergy defendants argue that, even if plaintiffs had established the existence of two predicate acts, they have alleged "[n]o other schemes, purposes, or injuries" beyond those related to the underlying state personal injury case. (Doc. No. 7-1 at 165 [quoting Moon, 465 F.3d at 725].)
In Vemco, Inc. v. Camardella, 23 F.3d 129, 134-35 (6th Cir.), cert. denied, 513 U.S. 1017, 115 S.Ct. 579, 130 L.Ed.2d 495 (1994), the Sixth Circuit held that a single scheme to defraud, growing out of a contract dispute, did not have the necessary continuity to support a finding of a pattern of racketeering activity. While the court noted that the existence of a single fraudulent scheme did not "automatically preclude the finding of a pattern," the court found that the single fraudulent scheme spanning 17 months was insufficient to support a RICO claim. Id. at 134-35; see Polzin v. Barna and Co., No. 3:07-CV-127, 2007 WL 2710705, at *8 (E.D.Tenn. Sept. 14, 2007) (single fraudulent scheme involving contract dispute did not support close-ended continuity).
While the complaint alleges, in conclusory fashion, that the personal injury lawsuit "was not the only future legal issue" that FirstEnergy defendants were hoping to influence, no other litigation is identified, and the remainder of the complaint focuses exclusively on the now completed state court personal injury action. (Compl. ¶¶ 37, 41, 43-47.) This one alleged fraudulent scheme, which affording a liberal construction to plaintiffs' complaint lasted 14 months and had as its sole objective "to have the Ohio Supreme Court destroy the suit no matter what path it took in getting to that Court[,]" see Compl. ¶ 37, is insufficient to show "long term criminal conduct." See H.J. Inc., 492 U.S. at 242, 109 S.Ct. 2893; see, e.g., Moon, 465 F.3d at 726 (single scheme to terminate the plaintiff's own worker's compensation benefits did not establish close-ended continuity).
Likewise, the Court finds that plaintiffs have insufficiently plead factual allegations that would support a finding of open-ended continuity. "While closed-end continuity looks at a substantial but finite period of time over which the alleged predicate acts took place, open-ended continuity contemplates short-term racketeering activity that could continue into the future." HMV Properties, LLC v. IDC Ohio Mgt., LLC, No. 2:08-cv-895, 2011 WL
The RICO statute defines an "enterprise" to include "any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity[.]" 18 U.S.C. § 1961(4). The enterprise must be separate from the "`person ... participating in an enterprise's affairs,'" and thus "a corporation cannot be named as the liable `person' and simultaneously fulfill the `enterprise' requirement as well." Puckett v. Tenn. Eastman Co., 889 F.2d 1481, 1489 (6th Cir.1989).
The complaint alleges that each of FirstEnergy, Ohio Edison, and FirstEnergy PAC is "an enterprise within the meaning of 18 U.S.C. § 1961(4). (Compl. ¶¶ 56-58, 67-69.) Because these same entities are also defendants in this action and allegedly engaged in the harm the complaint attempts to address, the complaint fails to establish "distinct entities that represent the `person' and the `enterprise[.]'" Puckett, 889 F.2d at 1489, and, consequently, the claim fails on this basis, as well.
FirstEnergy defendants insist that plaintiffs lack standing to bring a civil RICO claim under federal law because they have not alleged a cognizable injury relating to their business or property. A plaintiff claiming civil RICO violations "only has standing if ... he has been injured in his business or property by the conduct constituting the violation." Sedima, 473 U.S. at 496, 105 S.Ct. 3275; see 18 U.S.C. § 1964(c) (limiting recovery to those who have been "injured in [their] business or property by reason of racketeering). While plaintiffs assert, in conclusory fashion, that they have been "injured in their business and/or property," the only interest they allege has been damaged is the interest in the personal injury action and underlying personal injuries, themselves. FirstEnergy defendants argue these alleged injuries cannot bestow standing under the RICO statute.
"Whether a person has a `property' interest is traditionally a question of state law." EJS Props., LLC v. City of Toledo, 698 F.3d 845, 855 (6th Cir.2012) (citing Logan v. Zimmerman Brush Co., 455 U.S. 422, 430, 102 S.Ct. 1148, 71 L.Ed.2d 265 (1982)). For that reason, "`[i]njury to property' for RICO purposes is generally determined by state law." Isaak v. Trumbull Sav. & Loan Co., 169 F.3d 390, 397 (6th Cir.1999) (internal citation omitted). The Ohio Supreme Court has generally rejected the notion that an unliquidated personal injury claim is a property interest. See Groch v. Gen'l Motors Corp., 117 Ohio St.3d 192, 222-23, 883 N.E.2d 377 (Ohio 2008).
Likewise, recovery for personal injuries "is not allowed under civil RICO because it is not an injury to business or property." Brawn v. Cassens Transp. Co., 675 F.3d 946, 959 (6th Cir.2012); James v. Meow Media, Inc., 90 F.Supp.2d 798, 816 (W.D.Ky.2000) (personal injuries and mental suffering were not property interests under RICO). Moreover, "pecuniary losses proximately resulting from a personal injury caused by a RICO violation ... are also not recoverable[.]" Brown, 675 F.3d at 959. As such, neither plaintiffs' "economic hardship," nor their assertion of "lost opportunity" are compensable because both are "nothing more than pecuniary losses flowing from ... a personal injury."
Plaintiffs also bring a substantive RICO claim under Ohio law. Ohio's statute "is patterned after the federal RICO Act[,]" and therefore, "analysis of the [Ohio statute] is analogous to that of the federal RICO statute." Powell v. Wal-Mart Stores, Inc., No. 1:06CV 00603, 2007 WL 987321, at *2 (N.D.Ohio Mar. 30, 2007), aff'd, 303 Fed.Appx. 284 (2008). Plaintiffs incorporate the same factual allegations offered in support of their federal RICO claims into their state RICO claim under Ohio Rev.Code § 2923.32 (Compl. ¶ 66), and offer conclusory allegations to support the same bribery and straw-donor contribution schemes that they attempt to use to support their federal RICO claims. (Compl. ¶ 74.) Thus, plaintiffs' Ohio RICO claim is subject to dismissal for the same reasons that their federal claims fail to state a cause of action.
FirstEnergy defendants also maintain plaintiffs have failed to allege a RICO conspiracy under federal and Ohio law. "To plausibly state a claim for a violation of 18 U.S.C. § 1962(d), plaintiffs must successfully allege all the elements of a RICO violation, as well as alleg[e] `the existence of an illicit agreement to violate the substantive RICO provisions.'"
The only allegation connecting FirstEnergy defendants to the judicial defendants provides that these parties "formed an agreement to accept past, present and future cash payments as a
In Claim Six of the complaint, plaintiffs allege due process claims under 42 U.S.C. § 1983 against defendants Vespoli, Alexander and Pearson. (Doc. 1 at 41-42). Specifically, plaintiffs claim as follows:
(Compl. ¶¶ 83-84.)
To set forth a cognizable § 1983 claim, a plaintiff must establish that (1) he was deprived of a right secured by the Constitution or the laws of the United States, and (2) the deprivation was caused by a person acting under color of state law. See West v. Atkins, 487 U.S. 42, 48, 108 S.Ct. 2250,
In general, a plaintiff cannot assert a claim under § 1983 against a private party based on private conduct "no matter how discriminatory or wrongful" the party's conduct may have been. Tahfs v. Proctor, 316 F.3d 584, 590 (6th Cir.2003). However, "[i]f a private party has conspired with state officials to violate constitutional rights, then that party qualifies as a state actor and may be liable pursuant to § 1983...." Cooper v. Parrish, 203 F.3d 937, 952 n. 2 (6th Cir.2000).
The Supreme Court has specifically ruled that where a plaintiff alleges "that an official act of the defendant judge was the product of a corrupt conspiracy involving bribery of the judge ... private parties conspiring with the judge were acting under color of state law." Dennis, 449 U.S. at 28, 101 S.Ct. 183. Yet, the Supreme Court has cautioned that "merely resorting to the courts and being on the winning side of a judgment does not make a party a co-conspirator or a joint actor with the judge." Id.
Thus, in the wake of the Supreme Court's ruling in Iqbal, district courts afford no assumption of truth to a plaintiffs bare allegations that a judicial decision is the result of private parties conspiring with the judges to deprive a plaintiff of his constitutional rights. See, generally, Iqbal, 556 U.S. at 678, 129 S.Ct. 1937. While plaintiffs argue that they need not demonstrate an illegal quid pro quo agreement made with "express terms," they still must come forward with factual allegations that take their claim from possible to plausible. "[A]n allegation of parallel conduct and a bare assertion of conspiracy will not suffice. Without more, parallel conduct does not suggest conspiracy, and a conclusory allegation of agreement at some unidentified point does not supply facts adequate to show illegality." Twombly, 550 U.S. at 556-57, 127 S.Ct. 1955; see Gutierrez v. Lynch, 826 F.2d 1534, 1538 (6th Cir.1987) ("It is well settled that conspiracy claims must be pled with some degree of specificity and that vague and conclusory allegations unsupported by material fact will not be sufficient to state a claim under § 1983.") Plaintiffs rely on the same speculative allegations of collusion and conspiracy to support their § 1983 action that they offered in support of their RICO claims. (Compl. ¶ 82.) Plaintiffs allege no facts that, if viewed in the light most favorable to plaintiffs, would support a finding that FirstEnergy defendants entered into a conspiracy with the judicial defendants to deprive plaintiffs of their civil rights through bribery. Plaintiffs' § 1983 claim is also subject to dismissal.
Plaintiffs seek leave to amend their complaint to allege "potentially material events that have occurred since the original file date of this cause and to add material information regarding tangible damages to Plaintiffs property, an implicit quid pro quo and to correct a few minor clerical errors, etc." (Doc. No. 11 at 1, Page ID #250.) FirstEnergy defendants oppose any effort to amend on futility grounds (Doc. No. 13), and plaintiffs have filed a reply (Doc. No. 17).
Although this Court construes plaintiffs' pro se motion liberally, it finds that it would be futile for plaintiffs to amend to add the factual allegations and legal arguments detailed in their motion to amend. Plaintiffs wish to amend the complaint to add five categories of allegations. First, they seek to amend to allege that former Ohio Supreme Court Justice Yvette McGee Brown was recently made a partner at Jones Day, the law firm defending the present action on behalf of FirstEnergy defendants. Plaintiffs argue that former Justice McGee Brown is "heavily involved in this case[,]" and the fact that she "effectively works for the Defendants and their counsel she is no longer free to testify to anything that could in the slightest way affect the Defendant[`]s defense of this case."
While the Court does not share plaintiffs' concerns that this appointment would compromise Justice McGee Brown's ability to participate (should she be called) as a witness in this case, the more pressing
Second, plaintiffs seek to amend to add the details relating to the fees and expenses they have incurred in prosecuting the underlying state personal injury action. Apparently responding to FirstEnergy defendants' argument relating to standing, plaintiffs assert that "an actual cash investment establishes an irrefutable tangible interest in the subject property[.]" (Doc. No. 11 at 1, Page ID #250.) As previously discussed, the unliquidated personal injury action, and any damages or costs associated with pursing that claim, are not compensable. See Section III, D. 4, infra.; Brown, 675 F.3d at 959 ("Any pecuniary losses proximately resulting from a personal injury caused by a RICO violation, e.g., attorney fees, lost wages, and medical expenses, are also not recoverable because they, too, do not implicate harm to any legal entitlement."); Evans, 434 F.3d at 926 (same).
Third, plaintiffs wish to add unidentified facts and legal argument relating to their research of the cases FirstEnergy defendants cited showing that the Ohio Supreme Court regularly permits reconsideration of discretionary appeals. According to plaintiffs, their research will show that reconsideration always favored "large corporate donors." (Doc. No. 11 at 2, page ID #251.) However, even if the facts do support a finding that large corporate donors benefit from reconsideration, these facts would not take plaintiffs' allegations of fraud and conspiracy against FirstEnergy defendants from possible to plausible. Moreover, it would be neither appropriate nor helpful to permit plaintiffs to amend the complaint to add legal argument regarding the relevance of the cases cited by FirstEnergy defendants in their motion to dismiss.
Fourth, plaintiffs identify a March 16, 2009 blog (attached to the motion to amend as Doc. No. 11-1), which purports to be a news article prepared by an unknown individual discussing various encounters with Ohio Edison, and the author's views on the matters. One of the encounters discussed in the article involved Lisa Huff and the underlying personal injury action. The blog makes reference to an alleged taped conversation between Reggie Huff and an Ohio Edison employee. Plaintiffs suggest that this article places FirstEnergy defendants "in a poor light" and provides "motive" as to why Ohio Edison would not have wanted to risk a "publicized trial." (Doc. No. 11 at 2-3, Page ID #251-52.) Plaintiffs fail to demonstrate how any of the alleged facts set forth in this blog could be used to cure the deficiencies in the complaint. While plaintiffs suggest that the article shows that Ohio Edison is "indifferen[t] to the health and safety of the public" (Id.), this fact does not establish that FirstEnergy defendants engaged in the wrongdoing alleged in the complaint. Moreover, the fact that Ohio Edison arguably received negative press in its dealings with the public does not bridge the gap between possible and plausible.
Fifth and finally, plaintiffs request leave to amend to include "some potentially material information about the Defendants' efforts to buy influence of the Ohio Supreme Court at the exact time the Court was to rule on discretionary jurisdiction in the Plaintiff's personal injury suit." (Doc.
Ultimately, the Court finds that it would be futile to permit plaintiffs to amend their complaint. The proposed factual allegations in their motion to amend mirror those that have been found to be insufficient under Rule 8 and Rule 9(b). Such an amendment would not survive a motion to dismiss because the factual allegations offered do not state any claims for relief which are plausible, and do not, otherwise, cure the numerous deficiencies in the complaint set forth above. Accordingly, plaintiffs' motion to amend is DENIED.
For all of the foregoing reasons, FirstEnergy defendants' motion to dismiss is GRANTED. All claims in the complaint are hereby DISMISSED with prejudice.
