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HomeMy Public PortalAboutGS information IPM.Note GS information Kelly Avery EX /O=GULFSTREAMTH/OU=FIRST ADMINISTRATIVE GROUP/CN=RECIPIENTS/CN=KAVERY GS information Kelly Avery EX /O=GULFSTREAMTH/OU=FIRST ADMINISTRATIVE GROUP/CN=RECIPIENTS/CN=KAVERY scottmorgan75@gmail.com Sent Items GS information Scott – I tried to forward this information to you, but it didn’t work. This information was sent from Dottie Costonis (Richman, Greer) on 4/16/15. Kelly Avery Deputy Clerk Town of Gulf Stream 100 Sea Rd. Gulf Stream, FL 33483-7427 561-276-5116 561-737-0188 fax kavery@gulf-stream.org <mailto:kavery@golf-stream.org> Confidentiality Notice: This e-mail message, including any attachments, is for the sole use of the intended recipient(s). If you are not the intended recipient, please contact the sender by reply e-mail and destroy all copies of the original message. Florida has a very broad public records law. Written communications regarding Town of Gulf Stream business are public records available to the public upon request. Your e-mail communications are therefore subject to public disclosure. Under Florida law, e-mail addresses are public records. If you do not want your e-mail address released in response to a public records request, do not send electronic mail to this entity. Instead, contact this office by phone or in writing. <34705fa78c7f4539b0ce90574875d7e5@GSEXCH-1.GulfstreamTH.local> Scott – I tried to forward this information to you, but it didn’t work. This information was sent from Dottie Costonis (Richman, Greer) on 4/16/15. Kelly Avery Deputy Clerk Town of Gulf Stream 100 Sea Rd. Gulf Stream, FL 33483-7427 561-276-5 Access Computers Access Computers EX /O=GULFSTREAMTH/OU=FIRST ADMINISTRATIVE GROUP/CN=RECIPIENTS/CN=ACADMIN EX /O=GULFSTREAMTH/OU=FIRST ADMINISTRATIVE GROUP/CN=RECIPIENTS/CN=ACADMIN Kelly Avery Kelly Avery Access Computers Access Computers en 15.0 10.0.0.31 ::1 scottmorgan75@gmail.com SMTP scottmorgan75@gmail.com scottmorgan75@gmail.com 'scottmorgan75@gmail.com' scottmorgan75@gmail.com scottmorgan75@gmail.com DE 34 - Omnibus Response to Motions to Dismiss-6557796.pdf IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA WEST PALM BEACH DIVISION Case No.: 15-cv-80182-KAM TOWN OF GULF STREAM, a municipality organized and existing under the laws of Florida on its own behalf and on behalf of those municipalities similarly situated, and WANTMAN GROUP, INC., a domestic company on its own behalf and on behalf of those companies similarly situated, Plaintiffs, v. MARTIN E. O’BOYLE, an individual, CHRISTOPHER O’HARE, an individual, WILLIAM RING, an individual, JONATHAN R. O’BOYLE, an individual, DENISE DEMARTINI, an individual, GIOVANI MESA, an individual, NICKLAUS TAYLOR, an individual, RYAN WITMER, an individual, AIRLINE HIGHWAY, LLC, COMMERCE GP, INC., CG ACQUISITION CO., INC., CRO AVIATION, INC., ASSET ENHANCEMENT, INC., COMMERCE REALTY GROUP, INC., PUBLIC AWARENESS INSTITUTE, INC., CITIZENS AWARENESS FOUNDATION, INC., OUR PUBLIC RECORDS, LLC, STOPDIRTYGOVERNMENT, LLC, COMMERCE GROUP, INC., and THE O’BOYLE LAW FIRM, P.C., INC., Defendants. _____________________________________/ CLASS ACTION PLAINTIFFS’ OMNIBUS RESPONSE TO DEFENDANTS’ MOTIONS TO DISMISS Case 9:15-cv-80182-KAM Document 34 Entered on FLSD Docket 04/06/2015 Page 1 of 24 Case No.: 15-cv-80182-KAM 2 Plaintiffs, TOWN OF GULF STREAM and WANTMAN GROUP, INC., by and through the undersigned counsel and pursuant to Local Rule 7.1, hereby respond to the Defendants’ Motions to Dismiss1, and state in support thereof as follows: I. INTRODUCTORY STATEMENT The Complaint filed in this case alleges a complex scheme to defraud and extort being carried out by the Defendants and their RICO Enterprise. The scheme begins with a pre-textual public records request made by one of the Defendants for the sole purpose of staging public records litigation. The request is made using the wires or the mails and contains fraudulent information as to the party making the request to avoid having to pay the costs associated with responding to the request as allowed by statute. The request is also fraudulent in that oftentimes it is made by a purported “non-profit,” with a carefully selected name in an effort to fool the recipient into believing an innocent non-profit with a do-good name (i.e. stopdirtygovernment, Citizen Awareness Foundation, etc.) requires the information for its mission and purpose. Once the public records request is made, the RICO Enterprise now uses the one-sided fee provision contained in the public records law as a “hammer,” to crush the class members into submission and extract an ill-gotten and illegal settlement payment in excess of any costs and attorneys’ fees incurred. 1 On March 9, 2015, Defendants Giovanni Mesa, Nicklaus Taylor and Ryan Witmer filed a substantive Motion to Dismiss which will be referred to as “Mesa MTD.” On March 13, 2015, Defendants Martin E. O’Boyle, Airline Highway, LLC, Commerce GP, Inc., CG Acquisition Co., Inc., CRO Aviation, Inc., Asset Enhancement, Inc., Commerce Realty Group, Inc., and Commerce Group, Inc. filed a substantive Motion to Dismiss which will be referred to as “O’boyle MTD.” On March 16, 2015, Defendants Denise DeMartini, Citizens Awareness Foundation, Inc., Our Public Records, LLC, Stopdirtygovernment, LLC, and Public Awareness Institute, filed a notice of joinder (“Non-Profits Joinder”) in the Mesa MTD and the O’Boyle MTD, and elaborated briefly on the comparison of this case to that of FLSA and ADA cases raised in footnote 1 of the O’Boyle MTD. Also on March 16, 2015, Defendants William Ring, Jonathan O’Boyle and the O’Boyle Law Firm, P.C., fined a notice of joinder (“Law Firm Joinder”) in the Mesa MTD, the O’Boyle MTD, and the Non-Profit Joinder. Finally, on March 18, 2015, Defendant Christopher O’Hare filed a notice of joinder in the Mesa MTD, the O’Boyle MTD, the Non-Profits’ Joinder and the Law Firm Joinder, adding a vague allegation that the Plaintiffs’ RICO case is in retaliation for his vexations public records campaign against the Town. Case 9:15-cv-80182-KAM Document 34 Entered on FLSD Docket 04/06/2015 Page 2 of 24 Case No.: 15-cv-80182-KAM 3 To accomplish this, the RICO Enterprise again uses the mails or the wires and demands a settlement amount designed to be small enough to be an attractive option as opposed to protracted litigation, yet large enough to include an illegal profit above and beyond the fees and costs allowed under the Public Records law. Finally, if the settlement proposal is not agreed to, the RICO Enterprise uses threats and intimidation of additional public records requests and frivolous litigation to extort the recipient into compliance and pay over the settlement demand to the RICO Enterprise. Through their Motions to Dismiss, the Defendants make a series of arguments that analyze the allegations in the complaint “as a general matter,” and without regard to context. For example, the Defendants suggest that because Florida law permits a public records request irrespective of any motive underlying the requests, the act of making a public records request is untouchable. And while “as a general matter,” this may be true, in the context of the alleged wrongdoing of a RICO Enterprise, the underlying motivation of the Enterprise’s actions, including making public records requests, becomes very relevant. Similarly, the Defendants argue that under judicial precedent, the threat of litigation, no matter how frivolous, can never constitute the predicate act of extortion. Again, while “as a general matter,” the threat of litigation standing alone does not constitute extortion under RICO, when the threat of frivolous litigation is part of a larger scheme to defraud and extort, accompanied by additional predicate acts, courts have found that the threat of litigation can be extortion under the RICO laws. The Defendants also argue that attorneys’ fees are not sufficient damages to sustain a RICO claim because of causation issues. Once more, while “as a general matter,” this may be true, in instances in which the design of the scheme to defraud and extort is to cause the victim to incur unnecessary attorneys’ fees as a punishment for non-compliance with an extortionate Case 9:15-cv-80182-KAM Document 34 Entered on FLSD Docket 04/06/2015 Page 3 of 24 Case No.: 15-cv-80182-KAM 4 demand, the courts have found attorneys’ fees are sufficient damages for a RICO claim. Finally, the Defendants argue that Gulf Stream, and presumably the other municipal class members, do not have standing to bring a RICO claim because part of the alleged damages are the costs incurred in having to respond to the pre-textual public records request—money spent to act governmentally and outside the ambit of recoverable damages. Once again, while “as a general matter,” this may be true, in this case, a state statute grants Plaintiffs a property right in these costs making them recoverable damages in this RICO case. Plaintiffs briefly raise some additional arguments, each of which is addressed below. The allegations made in this case are anything but “the general matter,” as the Defendants try to label them, and cannot be analyzed in isolation as Defendants try and do, but instead, must be read as a whole. When read as a whole, it is obvious that the Complaint alleges an actionable complex racketeering case involving a very well-thought scheme to defraud and extort. II. LEGAL ARGUMENT a. The Complaint Contains the Requisite Particularity to State a RICO Cause of Action. The Defendants argue at great length that the Complaint fails to contain the requisite particularity for a fraud-based RICO claim in that it fails to allege a misrepresentation along with reasonable reliance, and also fails to provide the “who, what, where, when, and why,” of the fraud. (See Mesa MTD, p. 2; O’Boyle MTD, p. 12). These assertions are not only factually wrong, but the argument that they are required is legally inaccurate. And even though the law does not require the level of specificity the Defendants argue for, the Complaint provides it. i. The Complaint Alleges Misrepresentations and Reasonable Reliance. “In general, ‘[p]laintiffs must plead ... mail [or wire] fraud with particularity, and establish that the [communications] were in furtherance of a fraudulent scheme.’” Angermeir v. Case 9:15-cv-80182-KAM Document 34 Entered on FLSD Docket 04/06/2015 Page 4 of 24 Case No.: 15-cv-80182-KAM 5 Cohen, 14 F.Supp.3d 134, 145 (S.D.N.Y. 2014) citing Lundy v. Catholic Health Sys. of Long Island Inc., 711 F.3d 106, 119 (2d Cir. 2013). “However, courts…have applied a different standard in cases where ‘[a] plaintiff claims that ... mails or wires were simply used in furtherance of a master plan to defraud,’ but does not allege that ‘the communications [themselves] ... contained false or misleading information.’” Id. citing In re Sumitomo Copper Litig., 995 F.Supp. 451, 456 (S.D.N.Y. 1998). “In such cases, including ‘complex civil RICO actions involving multiple defendants, Rule 9(b) does not require that the temporal or geographic particulars of each mailing or wire transmission made in furtherance of the fraudulent scheme be stated with particularity. Instead, ‘Rule 9(b) requires only that the plaintiff delineate with adequate particularity in the body of the complaint, the specific circumstances constituting the overall fraudulent scheme.’” Id; see also Curtis & Assocs., P.C. v. Law Offices of David M. Bushman, Esq., 758 F.Supp.2d 153, 177 (E.D.N.Y. 2010) (“[I]n cases where plaintiffs allege that the mails or wires were simply used in furtherance of a master plan to defraud, .... particularity as to the mailings themselves is unnecessary ....” (internal quotation marks and citations omitted)). Even where a defendant’s mailings or wires do not contain any false or misleading statements, but are “incident to an essential part” of the underlying scheme which itself has a fraudulent or deceptive purpose, a “scheme to defraud” may be established. Schmuck v. United States, 489 U.S. 705, 712-715 (1989). As such, particularity to the mailings or wires themselves is not required under Rule 9(b), but rather particularity as to the circumstances constituting the overall fraudulent scheme is required.” AIU Ins. Co v. Olmecs Medical Supply, Inc., 2005 WL 3710370 , at *11 (E.D.N.Y. 2005). Here, the Complaint sets forth, with particularity, an overall fraudulent scheme in which the mailings or wires were used in furtherance of the overall scheme. (Compl., ¶¶36-38). The Case 9:15-cv-80182-KAM Document 34 Entered on FLSD Docket 04/06/2015 Page 5 of 24 Case No.: 15-cv-80182-KAM 6 Complaint not only alleges that the scores of frivolous and pretextual public records requests contained false and misleading information “to fool the recipient into thinking a not-for-profit had a genuine desire to see the documents requested” and to “try and circumvent the conditional payment provided for in the Public Records law,” (Compl, ¶ 37 n. 2) but provides, in excruciating detail, the date the request was made, the name of the defendant making the request and to whom the request was made, a description of the records requested, and other information. (See Exhibit “B,” to the Complaint).2 The Complaint also alleges reliance on the various misrepresentations (Compl, ¶ 135). The Complaint provides similar information for all public records litigation that was commenced against the Town as part of the RICO Enterprise’s’ scheme along with the alleged damages caused by this conduct. (See Exhibits “E” and “F” to the Complaint). ii. The Complaint Contains Allegations Indicating the Role Each Defendant Had in Advancing the Interest of the Enterprise. “‘Where multiple defendants are asked to respond to allegations of fraud, the complaint should inform each defendant of the nature of his alleged participation in the fraud.’” Angermeir, 14 F.Supp.3d at 147 citing DiVittorio v. Equidyne Extractive Indus., Inc., 822 F.2d 1242, 1247 (2d Cir.1987). “Rule 9(b) does not require Plaintiffs to allege a ‘specific connection between fraudulent representations ... and particular defendants ... where ... defendants are insiders or affiliates participating in the [allegedly fraudulent conduct] in question.’” Id. (internal citations omitted). “At a minimum, therefore, Plaintiffs must ‘allege that the [each Defendant] personally knew of, or participated in, the fraud.’” Id. (internal citations omitted) (emphasis in original). 2 The Defendants have argued that Exhibit “B” is illegible. While admittedly, it is difficult to read, it is not completely illegible. Be that as it may, Exhibit “B” can be found at the following websites: http://www2.gulf-stream.org/WebLink8/DocView.aspx?id=43621&dbid=0 & http://www2.gulf-stream.o rg/WebLink8/DocView.aspx?id=43640&dbid=0. Case 9:15-cv-80182-KAM Document 34 Entered on FLSD Docket 04/06/2015 Page 6 of 24 Case No.: 15-cv-80182-KAM 7 Plaintiff’s Complaint painstakingly identifies and specifies the manner by which each and every Defendant either knew of or participated in the fraudulent scheme. (Compl., ¶ 124). Accordingly, Defendants’ reliance upon Robinson v. Section 23 Prop. Owner’s Ass’n, Inc., 2014 WL 4358486 (M.D.Fla. Sept. 2, 2014), is misplaced. Here, unlike in Robinson where the defendants’ conduct was all “lump[ed] together,” the Complaint individually identifies each and every Defendant and specifies the role for each individual or entity in the fraudulent scheme sufficiently placing each Defendant on notice of the claims against him/her/it in satisfaction of the rule. b. The Filing of Public Records Litigation is Actionable Under RICO i. Public Records Requests are not Above the Law. Defendants’ attempts to utilize language from FLSA or ADA cases as a basis to dismiss this RICO action must also fail. Defendants improperly rely upon Flores v. Osaka Health Spa, Inc., 474 F. Supp. 2d 523, 529 (S.D.N.Y. 2007). The Court in Flores did not hold that the acts complained of were not predicate acts supportive of a RICO violation; rather, the Court held that the counter-plaintiff’s “failure to identify her property rights, if any, an injury thereto, and a causal connection between the injury and a RICO violation, are fatal to a finding that [she] has standing to assert a civil RICO claim.” Flores, 474 F. Supp. 2d at 529. Defendants’ suggestion or innuendo that the Eleventh Circuit, or other courts, have taken the position that these types of suits or settlement demands cannot be included as a predicate act for the basis of a RICO violation is false and unsupported, especially whereas here, the lawsuits are just one piece of the fraudulent scheme put in place by the defendants. Defendants also cite to cases in which the Courts have determined that “tester” suits are permitted. The cases cited, including Houston v. Marod Supermarkets, Inc., 733 F.3d 1323 (11th Cir 2013), Havens Realty Corp. v. Coleman, 455 Case 9:15-cv-80182-KAM Document 34 Entered on FLSD Docket 04/06/2015 Page 7 of 24 Case No.: 15-cv-80182-KAM 8 U.S. 363 (1982), and Watts v. Boyd Properties, 758 F.2d 1482 (11th Cir. 1985) only confirm that a “tester” plaintiff has standing to pursue such suits and has no relation to claims, in any fashion, under a RICO analysis. Defendants continue to misunderstand Plaintiffs claims, as the allegations reach far beyond a matter of standing. Plaintiffs do not allege that lawsuits cannot be filed pursuant to Florida Statute, nor does the “tester” plaintiff, in and of itself, create a violation. However, the cooperation and acting in concert with multiple Defendants to extort impermissible settlement for monies not permitted by statute by threat of further requests and litigation is not a permissible act and is a violation of RICO. ii. The Threat of Litigation as Part of an Ongoing Scheme to Defraud and Extort Does Constitute the Predicate Act of Extortion. Next, the Defendants allege that threatening or instituting litigation, no matter how frivolous, does not constitute extortion. (See O’Boyle MTD, p. 7, and Mesa MTD, p. 6). The Defendants oversimplify the allegations raised in the Complaint. The Complaint does not allege a simple case of threatened litigation and try and label it as extortion, but instead, a complicated scheme to defraud and extort of which a component part is the systematic threats of frivolous litigation completely irrelevant to the dispute in which the threats are made. Under these circumstances, courts have found that the body of law relied upon by Defendants is inapposite as it deals with simple threats of litigation, and instead determined that when a RICO defendant sues or threatens to sue as part of an overriding scheme or plan to extort money that it otherwise has no right to, and the suit threatened or brought has no relation to the dispute in which the threat was made (i.e. resolution of the threatened litigation could not resolve the dispute in which the threat is made), such a threat does constitute the predicate act of extortion for purposes of RICO. Case 9:15-cv-80182-KAM Document 34 Entered on FLSD Docket 04/06/2015 Page 8 of 24 Case No.: 15-cv-80182-KAM 9 In the case of Calabrese v. CSC Holdings, Inc., 283 F.Supp.2d 797 (E.D.N.Y. 2003), the Court found that threatened frivolous litigation could in fact constitute the predicate act of extortion when the threats were used as part of an alleged scheme to compel individuals to pay money they were not otherwise obligated to pay. Id. at 809-810. There, a cable company was sending purchasers of “pirate boxes” (an electronic box which could be used to obtain free cable television programming) a demand letter accusing them of stealing cable programming and threatening to sue them unless they pay the cable company’s settlement demands. Id. at 804805. Because it was not economical to litigate against the cable company, the individuals were forced to pay the settlement demands irrespective of any wrongdoing. Id. at 805. The Defendants filed a motion to dismiss arguing that the threat of litigation can never be considered extortion for purposes of RICO. The court disagreed, finding that the plaintiffs’ allegations amounted to much more than a simple threat of litigation, including allegations of a scheme through which the defendants “entered into an agreement and formed an association for the purpose of compelling individuals to pay money to them …[and by using] misrepresentations, threats and lawsuits… whether or not the Defendants had any legal entitlement to the monies.” Id. at 809.3 Courts have also found that when the litigation (or threatened litigation) has no nexus to the extorter’s demand to pay money (i.e. is not the basis for the demand to pay money), and the “victim of the extortionate activity had a preexisting right to be free from the threats invoked,” the threat constitutes extortion sufficient to be a RICO predicate act. La Suisse Societe D’Assurances sur la Vie v. Kraus, 2014 WL 3610890, No. 06 Civ. 4404 (CM)(GWG) (S.D.N.Y., 3 Ultimately, the Court concluded that while the allegations of threatened litigation was sufficient to constitute the predicate act of extortion and did constitute a Hobbs Act violation, because there was no allegation tying the extortionate acts to interstate commerce, the Hobbs Act violation could not be used as a RICO predicate act. Id. at 810-811. Case 9:15-cv-80182-KAM Document 34 Entered on FLSD Docket 04/06/2015 Page 9 of 24 Case No.: 15-cv-80182-KAM 10 July 21, 2014). Stated differently, when the threatened litigation could not resolve a dispute between the party making the threat and the victim of the threat, it is extortion. Id. In Kraus, an insurance company that sold “marriage policies”4 brought a RICO action against the brokers that were selling the policies alleging that: (1) the brokers intentionally misrepresented key facts that went into the underwriting of the policies5; (2) that the brokers were funding the premiums and taking the benefits without the carriers knowledge; and (3) that the brokers directed or initiated in excess of 50 policyholder lawsuits in three countries and threatened more as a way to coerce the carrier to pay the brokers to go away. Id. at 3-5. As to the extortionate lawsuits, the Court acknowledged that while “courts are nearly unanimous in the view that the pursuit of frivolous litigation does not constitute the predicate RICO act of extortion,” the court found the facts presented were significantly different, and consisted of more than just a “trumped-up complaint about frivolous litigation.” Id. at 9. The Kraus Court determined that because the frivolous policy-holder lawsuits that were used as leverage to extort a settlement payment from the carrier to the broker could not resolve a dispute between the carrier and the broker (but only the carrier and the policy holders), and that the carrier had a preexisting right to be free from such litigation and threats of litigation, the brokers’ conduct in bringing the lawsuits, threating more suits, and offering to settle all suits in exchange for a direct payment to the broker, constitutes the RICO predicate act of extortion. Id. at 9-10. See also Hall American Center Associates. Ltd. Partnership v. Dick, 726 F.Supp. 1083 (E.D. Mich. 1989) (holding that the filing of lawsuits was extortion under the Hobbs Act because “the 4 A “marriage policy” is a policy of insurance which pays the benefit “when the insured person reaches age 26, dies, or marries, whichever happens first.” Id. at 3. 5 The brokers represented that they would be selling the policies to the Jewish population at large, with an average age of marriage between 26-29, when in reality the brokers were selling the policies to the Chassidic Jewish community with an average age of marriage significantly lower—around 19. Case 9:15-cv-80182-KAM Document 34 Entered on FLSD Docket 04/06/2015 Page 10 of 24 Case No.: 15-cv-80182-KAM 11 plaintiffs have alleged that the defendants filed the lawsuits and notices of lis pendens as part of an extortionate scheme to obtain property to which they are not entitled.”) (emphasis in original). As in Kraus, this case does not present a “trumped-up complaint about frivolous litigation,” or run-of-the-mill litigation wherein a threat to sue absent satisfactory payment is not only expected, but often times required. The allegations of this case include a complicated scheme to defraud and extort, where the threatened litigation and public records requests were “part of an extortionate scheme to obtain property to which they were not entitled.” Hall, 726 F.Supp. at 1097. The Complaint alleges that “the acts of extortion were directly intended to cause the Plaintiffs to spend money defending frivolous actions having no nexus or relation to the original settlement demands as to which they were being coerced to comply with and pay.” (Compl. ¶ 138). Stated differently, “the resolution of the threatened public records requests and litigation would not impact the resolution of the case in which the threats were made but for the extortionate nature of the threats.” Id. In this case, as in Kraus, the frivolous litigation being threatened by the RICO Enterprise is completely artificial—manufac tured by the Enterprise to create leverage to coerce a payment from the Plaintiffs, litigation that the Plaintiff had a pre-existing right (before the threat) to be free from. The basis for the to-be-filed threatened litigation did not even exist at the time the threat was made. Rather, the Enterprise threatened to create the basis (i.e. send a public records request) and then bring the litigation (i.e. the follow-up lawsuit to enforce the public records request) if its settlement demands in unrelated litigation and disputes were not met. It is not as though the threatened litigation was to resolve an actual existing dispute between the RICO Enterprise and the Plaintiffs. To the contrary, it was to create a dispute. Case 9:15-cv-80182-KAM Document 34 Entered on FLSD Docket 04/06/2015 Page 11 of 24 Case No.: 15-cv-80182-KAM 12 Defendants’ rely on a pair of cases out of the Eleventh Circuit: Raney v. Allstate Insurance Comp., 370 F.3d 1086 (11th Cir., 2004) and U.S. v. Pendergraft, 297 F.3d 1198 (11th Cir. 2002) in support of their argument. Plaintiffs do not dispute the holding of these cases; that the threat of frivolous litigation alone, does not constitute extortion under the Hobbs Act. What Plaintiffs do dispute is the applicability of both Raney and Pendergraft to the facts of this case. In Pendergraft, an abortion provider, Dr. Pendergraft, threatened to sue Marion county commissioners who opposed the opening of a new abortion clinic unless they settled with him. Id. at 1200-1203. Ultimately, the FBI got involved and Pendergraft was prosecuted and found guilty for conspiracy to commit extortion based on his threat of litigation. In reversing Pendergraft’s conviction, the Eleventh Circuit held that allowing the threat of litigation between litigants to constitute extortion “would open yet another collateral way for litigants to attack one another,” essentially “transforming a state common-law action [for malicious prosecution] into a federal crime.” Id. at 1207-1208. Under the circumstances presented in Pendergraft, this makes sense--nearly every law suit ultimately filed is preceded by a discussion between the parties which in all likelihood contains a threat to sue if settlement demands are not met—it is simply a quintessential part of our system of jurisprudence. It is worth noting that the Pendergraft court described its holding as “a narrow one.” Id. at 1208. The Raney decision, which is largely based on Pendergraft, is equally inapposite. There, Raney, a frequent protestor at abortion clinics, was sued by three separate abortion clinics for violation of the Freedom of Access to Clinic Entrances Act (18 U.S.C. § 248), as well as his homeowner’s insurance carrier, seeking a declaration that it was not obligated to defend the clinics’ suits. After these suits were dismissed, Raney filed a RICO claim against the clinics and his carrier. Following Pendergraft, the court found that the clinics’ filing of a lawsuit could not Case 9:15-cv-80182-KAM Document 34 Entered on FLSD Docket 04/06/2015 Page 12 of 24 Case No.: 15-cv-80182-KAM 13 be “wrongful” under the Hobbs Act, and therefore, could not be a RICO predicate act. Id. at 1088. The facts of this case stand in stark contrast to that of both Pendergraft and Raney. In this case, the Complaint alleges that the Defendants entered into an agreement to associate to illegally obtain money from the Plaintiffs by maliciously threatening not only a pattern of litigation against the Plaintiffs, but also a pattern of additional frivolous public records requests, as part of a complicated scheme to defraud and extort Plaintiffs with the goal of profiteering. (Compl., ¶¶ 37-38; 40; 108-135). Similar to the facts of Kraus, Martin O’Boyle and Chris O’Hare attempted to negotiate payments directly to the RICO Enterprise in exchange for the dismissal or forbearance of thousands of public records requests and accompanying litigation by various entities. (See Compl. at ¶¶ 108; 127-134). Neither Martin O’Boyle nor Chris O’Hare have any recognizable interest in the resolution of these public records requests or public records litigation sufficient to claim the protections of Pendergraft and Raney. To the contrary, under the statutory framework of the public records law, there can be no proceeds in a public records case—only a reimbursement of attorneys’ fees and costs. It follows that the threat to bring additional and unrelated public records requests or associated litigation is completely unrelated to whatever dispute the Defendants had with the Plaintiffs, and as such, constitutes extortion actionable as a predicate act under RICO. c. The Plaintiffs and Class Members Have Sustained Recoverable RICO Damages. Defendants further argue that the Plaintiffs have not suffered actionable RICO damages. Specifically, the Defendants argue that the attorneys’ fees and costs incurred in responding to the extortionate and frivolous public records request and accompanying extortionate and frivolous Case 9:15-cv-80182-KAM Document 34 Entered on FLSD Docket 04/06/2015 Page 13 of 24 Case No.: 15-cv-80182-KAM 14 litigation were not caused by any predicate act as Plaintiffs have failed to allege an actionable predicate act. Defendants also argue that the amount of money the municipal Plaintiffs spent in responding to public records requests was spent in a capacity of governing and not as a “market participant,” and as such, the municipal Plaintiffs have no property interest in these monies sufficient to convey standing to seek them. (O’Boyle MTD, p. 9-12; Mesa MTD, p. 11-13). Once again, these assertions are in error. A civil RICO claimant is required to show that the predicate act or offense “not only was a ‘but for’ cause of his injury, but was the proximate cause as well.” Holmes v. Securities Investor Protection Corp., 503 U.S. 258, 268 (1992). “When a court evaluates a RICO claim for proximate causation, the central question it must ask is whether the alleged violation led directly to the plaintiff’s injuries.” Anza v. Ideal Steel Supply Corp., 547 U.S. 451, 461 (2006). This requires “some direct relation between the injury asserted and the injurious conduct alleged.” Id. Importantly, “a plaintiff need not show that the injurious conduct was the sole cause of the injury asserted,” but rather, just that there exists “‘some direct relation’ between the injury asserted and the injurious conduct.” Corcel Corp., at 576. i. Attorneys’ Fees Are Recoverable RICO Damages in This Case. Defendants argue that because the only attorneys’ fees and costs asserted as RICO damages were those incurred in public records litigation, they are not recoverable because they could not flow directly from the predicate act as there are no actionable predicate acts. (See O’Boyle MTD, p. 11). Notably, the Defendants do not argue that there is a lack of proximate cause, but rather, that there is no predicate act from which causation could flow into damages. (O’Boyle MTD, p. 11). Thus, Plaintiffs are unsure if Defendants are arguing that Plaintiffs have not suffered a sufficiently direct injury so that Plaintiffs have standing to bring its RICO claim; Case 9:15-cv-80182-KAM Document 34 Entered on FLSD Docket 04/06/2015 Page 14 of 24 Case No.: 15-cv-80182-KAM 15 or whether it is true proximate causation that Defendants have failed to allege—separate and distinct concepts implicated in the “by reason of” argument advanced by Defendants. Corcel Corporation, Inc. v. Ferguson Enterprises, Inc., 551 Fed.Appx. 571, 575 (11th Cir. 2014) (“The ‘by reason of’ requirement implicates two concepts: (1) a sufficiently direct injury so that a plaintiff has standing to sue and (2) proximate cause.”). It matters not which concept Defendants intended to raise in their motions to dismiss as the substantial attorneys’ fees and costs the class members have incurred were not incurred by anyone else more directly and were only incurred “by reason of” and “flowed directly from” the predicate acts of extortion, mail fraud, and wire fraud. Attorneys’ fees proximately caused by a RICO violation are recoverable as RICO damages. Stochastic Decisions, Inc. v. DiDomenico, 995 F.2d 1158, 1167 (2d Cir. 1993) (“Further,... we explicitly ruled in Bankers Trust that legal fees may constitute RICO damages when they are proximately caused by a RICO violation.”), citing Bankers Trust Co. v. Rhoades, 859 F.2d 1096, 1105 (2d Cir. 1988). See also Lehman v. Lucom, 2012 WL 1802453, No. 1123479-Civ., (S.D. Fla., May 17, 2012) (discussing attorneys’ fees spent defending an onslaught of personal attacks in various court proceedings and holding: “The expenditure of money to counter the attacks from an alleged RICO enterprise is an injury suffered as a result of the alleged RICO enterprise.”); see also Angermeir v. Cohen, 14 F.Supp.3d 134, 152-153 (S.D.N.Y. 2014) (finding that plaintiffs’ claim that they “‘had to waste considerable time and effort’ in response to the fraudulent lawsuits,” was insufficient as RICO damages; however, finding as sufficient RICO damages, monetary losses in the form of legal fees they had to pay in response to Defendants’ allegedly fraudulent lawsuits.”). Case 9:15-cv-80182-KAM Document 34 Entered on FLSD Docket 04/06/2015 Page 15 of 24 Case No.: 15-cv-80182-KAM 16 In this case, the Complaint alleges that the Defendants’ RICO conduct “damaged and injured the class members … by requiring the Class Member to defend against several spurious lawsuits brought only to increase the pressure and ultimately force the Class Member to accept the extorted settlement amount.” (Compl., ¶ 39). Indeed, the Plaintiffs allege that the RICO Enterprise was designed to use the threat of damage to property in the form of expenditures in frivolous and unrelated public records requests and litigation to coerce extortionate payments from the class members. (Compl., ¶¶ 38-40; 108; 127-134; 138). The attorneys’ fees and costs associated with responding to the frivolous public records requests and accompanying public records litigation were incurred “by reason of” the Enterprises’ use of these records requests and litigation as extortion to coerce a large settlement payment from the Plaintiffs. Accordingly, they flow directly from the Defendants’ wrongful conduct and are proper damages in this case. ii. Monies Spent on Responding to the Public Records Requests Are Recoverable Damages. The Defendants also argue that the money the municipal class members spent on responding to the endless stream of frivolous public records requests is not recoverable as RICO damages because these expenditures were made in the municipalities’ performance of a government function. (O’Boyle MTD, p. 9; Mesa MTD, p. 11). In support of this argument, Defendants rely on Canyon County v. Syngenta Seeds, Inc., 519 F.3d 969 (9th Cir. 2008), and Town of West Hartford v. Operation Rescue, 915 F.2d 92 (2d Cir. 1990). Because the language in Town of West Hartford upon which Defendants rely has since been described as “dicta” by the Second Circuit6, and in any case was decided on the lack of any predicate act and explicitly 6 See Attorney General of Canada v. R.J. Reynolds Tobacco Holdings, Inc., 268 F.3d 103, 132 n. 40 (2d Cir. 2001). Case 9:15-cv-80182-KAM Document 34 Entered on FLSD Docket 04/06/2015 Page 16 of 24 Case No.: 15-cv-80182-KAM 17 disavows any holding relating to damages (i.e. standing), it is inapposite.7 And even if it was not explicitly decided on other grounds or subsequently labeled as dicta, it is inapposite for the same reasons Canyon County is. In Canyon County, the plaintiff, a county in Idaho, brought a RICO claim against four companies and one individual alleging that the defendants engaged in a scheme of hiring and harboring undocumented and illegal immigrant workers which resulted in an increase in the county’s expenditures on health care and criminal justice services. Id. at 971-972. The Ninth Circuit affirmed dismissal of the county’s RICO claim, finding that under RICO a claimant must be injured in his “business or property,” and that the applicable state law (Idaho), did not recognize the county’s property interest in the health or criminal justice services it provided in its sovereign capacity and not as a “market participant.” Id. at 976-981. Of course, this case stands in stark contrast to the facts of Canyon County as in this case, every single one of the municipal class members, including Gulf Stream, is granted a property interest in the funds spent on responding to public records requests under Florida law. The Public Records Act authorizes a custodian to collect a fee, prior to disclosing the records, for the cost of copying the records8 as well as a special service charge for requests that “require extensive use of information technology resources or extensive clerical or supervisory assistance ....” (Fla. Stat. § 119.07(4)(d))..); see also Board of County Com’rs of Highlands County v. Colby, 976 So.2d 31 (Fla. 2d DCA 2008) (finding that the cost of labor, including both salary and benefits, as well as the costs of duplication, is allowed under the statute as is the requirement of an advance deposit as “the taxpayers should not shoulder the entire expense of 7 “We need not rule, however, that the Town's view of section 1964(c) [relating to its injury of increased costs for police services] is so implausible that, standing alone, it would warrant dismissal of the Town's RICO claim for failure of subject matter jurisdiction.” Id. at 104. 8 Fla. Stat. § 119.07(4) (providing the custodian “shall furnish a copy ... of the record upon payment of the fee prescribed by law.”). Case 9:15-cv-80182-KAM Document 34 Entered on FLSD Docket 04/06/2015 Page 17 of 24 Case No.: 15-cv-80182-KAM 18 responding to an extensive request for public records.”); see also Lozman v. City of Riviera Beach, 995 So.2d 1027 (Fla. 4th DCA 2008) (approving the City’s refusal to respond to subsequent document requests by the same requesting party until the party first paid for a previous request made.). Indeed, the Complaint recites this very provision of Florida law. (Compl. at ¶ 49). The Complaint also itemizes the exact amount of damages sustained by the Town as a result of the excessive public records requests, costs the Town has a property interest in pursuant to Fla.Stat. ¶ 119.07(4). (Compl., ¶ 137; Exhibits “E” and “F”). As such, this case presents a completely different set of circumstances than those presented in Canyon County, circumstances that the Ninth Circuit in Canyon County acknowledged would allow for the recovery of these damages. d. The Complaint Sufficiently Alleges The Existence of A RICO Enterprise Separate and Apart From the Members of the Enterprise. The Defendants also argue that: (i) the Complaint fails to allege that the corporate defendants operated or managed the RICO Enterprise (O’Boyle MTD, at p. 17); and (ii) that the attorney defendants were just doing their job, and there is no allegation that they conducted or participated in the conduct of the RICO Enterprise (Mesa MTD, p. 15). Both assertions are wrong. The Defendants rely on the Supreme Court’s opinion in Reves v. Ernst & Young, 507 U.S. 170 (1993), in arguing that the Complaint fails to allege that the corporate defendants operated or managed the RICO Enterprise. (O’Boyle MTD, at p. 17). And, while it is true the Reves opinion held that “one must participate in the operation or management of the enterprise itself,” the opinion makes equally clear that “RICO liability is not limited to those with primary responsibility for the enterprise’s affairs…[or] to those with a formal position in the enterprise,” but would extend to “lower rung participants in the enterprise who are under the direction of Case 9:15-cv-80182-KAM Document 34 Entered on FLSD Docket 04/06/2015 Page 18 of 24 Case No.: 15-cv-80182-KAM 19 upper management.” Id. at 179 and 184. In Reves, the High Court determined that an outside accounting firm who simply prepared the financial statements of a co-op allegedly involved in a RICO scheme did not direct or participate in the activities of the RICO enterprise. It is also true that a RICO Enterprise, particularly an association-in-fact enterprise, must have a structure; however, this structure does not need to extend beyond three structural features: (1) a purpose; (2) some relationship with those associated with the enterprise; and (3) sufficient longevity to allow the associated persons to pursue the purpose. Boyle v. U.S., 556 U.S. 938, 947 (2009), citing with approval, United States v. Turkette, 452 U.S. 576 (1981). These structural features can be inferred from evidence showing that persons associated with the enterprise engaged in a pattern of racketeering activity. Id. There is no requirement that an association-infact possess: (i) any hierarchy; (ii) role differentiation; (iii) a unique modus operandi; (iv) a chain of command; (v) professionalism and sophistication of organization; (vi) diversity and complexity of criminal acts; (vii) membership dues, rules, or regulations; (viii) internal discipline mechanism; (ix) regular meetings regarding the affairs of the enterprise; (x) a name for the enterprise; or (x) any indication or initiation ceremonies. Id. at 947-948. Finally, while it is true that to successfully establish liability under § 1962(c), a claimant must allege and prove the existence of both a “person” and an “enterprise” distinct from the “person,” it is a relatively low threshold, requiring no more separateness than that between a corporation and its employees—two different legal entities. Cedric Kushner Promotions, Ltd. v. King, 533 U.S. 158, 163 (2001). In this case the Complaint goes into great detail about the genesis of the scheme to defraud and extort (Compl., ¶¶ 53-102), its engineers, its history, and the interrelationships and structure of the various members of the RICO Enterprise (Compl., ¶¶ 9-29), and the actions that Case 9:15-cv-80182-KAM Document 34 Entered on FLSD Docket 04/06/2015 Page 19 of 24 Case No.: 15-cv-80182-KAM 20 each member has taken in participating in the affairs of the Enterprise, at all levels. (Compl., ¶¶ 122-125). The Complaint attaches exhibits which indicate which predicate acts were taken by which Defendant and what damages have been sustained as a result of these acts. (Compl., Exhibits “B,” “E,” and “F.”). Suffice it to say, there are sufficient allegations tying every Defendant to the workings of the Enterprise, participation in the conduct and affairs of the Enterprise, and causing the damages to the Plaintiffs. e. The Claims of the Class Members are Sufficiently Common and Typical to Justify Class Treatment. “It is well settled that a court is not to conduct a preliminary inquiry into the merits of a suit when deciding whether it may be maintained as a class action.” Hammett v. Am. Bankers Ins. Co., 203 F.R.D. 690, 693 (S.D. Fla. 2001) citing Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 177–178, 94 S.Ct. 2140, 40 L.Ed.2d 732 (1974) (stating “[i]n determining the propriety of a class action, the question is not whether the plaintiff or plaintiffs have stated a cause of action or will prevail on the merits, but rather whether the requirements of Rule 23 are met”) (quoting Miller v. Mackey Int'l, 452 F.2d 424, 427 (5th Cir.1971)). F.R.C.P. 23(a) requires numerosity, commonality, typicality and adequate representation of the class as pre-requisites to pursing a class action. Here, Defendants improperly argue that Plaintiffs are unable to satisfy commonality and typicality. “Rule 23(a)(2) requires the presence of at least one issue affecting all or a significant number of proposed class members.” Hammett, 203 F.R.D. at 694 (internal citations omitted). “Where…the allegations involve a common course of conduct by the Defendants, class members' claims involve common questions of law or fact.” Id. citing Kennedy v. Tallant, 710 F.2d 711, 718 (11th Cir.1983). This case involves common questions of fact with respect to the fraudulent scheme of Defendants used against class members and the manner in which the Defendants extorted or attempted to extort monies for Case 9:15-cv-80182-KAM Document 34 Entered on FLSD Docket 04/06/2015 Page 20 of 24 Case No.: 15-cv-80182-KAM 21 improper settlements from class members for alleged public records requests, regardless of whether said requests were authorized by law. (Compl. ¶¶ 40-41). Accordingly the question of commonality is satisfied. As for typicality, “[r]ule 23(a)(3) requires that the representative's claims or defenses are typical of the claims or defenses of the class. In other words, typicality requires a nexus between the class representative's claims or defenses and the common questions of fact or law which unite the class.” Id. citing Kornberg v. Carnival Cruise Lines, 741 F.2d 1332, 1337 (11th Cir. 1984). “The class representative's claims are typical if [the] claim and those of the class arise from the same event or pattern or practice and are based on the same legal theory.” Id. The claims of the representatives are identical to those of the class and based upon the same legal theory emanating from Defendants’ pattern and practice of extortion and fraud. Defendants’ contention that the Court must make individualized inquiries into the merits of each and every public records request and lawsuit destroys the ability to pursue a class action is simply false. This Court need not determine whether the individual records requests were valid to analyze the fraudulent scheme to extort monies from public and private entities under the guise of statutory authority- which conduct included settlement demands for monies not permitted by statute and the threat of further inundating requests and litigation as a result of one’s failure to settle for the amount/s demanded. In this case, the Complaint has alleged that any public records request made by any of the Defendants is inherently without merit and done so as part of the RICO Enterprises’ scheme to defraud and extort—a tool of extortion to coerce acceptance of the unreasonable and unlawful payment demands of the Defendants. Thus, there is no such thing as a genuine or meritorious public records request by any of these Defendants. Finally, it is worth noting that any issues Case 9:15-cv-80182-KAM Document 34 Entered on FLSD Docket 04/06/2015 Page 21 of 24 Case No.: 15-cv-80182-KAM 22 relating to class certification will be fully briefed in accordance with the Court’s scheduling order as it relates to a motion for class certification. III. Conclusion. In light of the foregoing, the Plaintiffs on their own behalf and on behalf of the class members respectfully request the Court enter an Order denying the Defendants’ pending Motions to Dismiss and for such other relief as the Court deems proper and just. Dated: April 6, 2015 Respectfully Submitted, By: /s/ Gerald F. Richman__ GERALD F. RICHMAN Florida Bar No.: 066457 grichman@richmangreer.com dcostonis@richmangreer.com ERIC M. SODHI Florida Bar No.: 0583871 esodhi@richmangreer.com mramirez@richmangreer.com LEORA B. FREIRE Florida Bar No.: 0013488 lfreire@richmangreer.com RICHMAN GREER, P.A. 250 Australian Ave. South, Ste. 1504 West Palm Beach, Florida 33401 Telephone: (561) 803-3500 Facsimile: (561) 820-1608 Counsel for Plaintiffs REQUEST FOR ORAL ARGUMENT Pursuant to Local Rule 7.1(b), Plaintiffs hereby request oral argument on Defendants’ Motions to Dismiss. This case, and the arguments raised in the briefing on the Motions To Dismiss, touch upon novel issues that arise in the context of a complex RICO fact pattern and which have ramifications for the law in this District. Due to the fact-intensive nature of this case, and the way in which the facts distinguish this case from others, Plaintiffs believe oral Case 9:15-cv-80182-KAM Document 34 Entered on FLSD Docket 04/06/2015 Page 22 of 24 Case No.: 15-cv-80182-KAM 23 argument may assist the Court in resolving the Motions to Dismiss as oftentimes distinguishing factors are more easily conveyed in person as opposed to in writing. CERTIFICATE OF SERVICE I HEREBY CERTIFY that on April 6, 2015 a true and correct copy of the foregoing, was electronically filed with the Clerk using the CM/ECF filing system and served upon on all counsel of record and/or pro se party(ies) listed below, either via transmission of Notices of Electronic Filing generated by the CM/ECF filing system or, if indicated, in some other authorized manner for those counsel or parties who are not authorized to receive electronically Notices of Electronic Filing. Steven D. Weber sweber@bergersingerman.com drt@bergersingerman.com ltorres@bergersingerman.com Etan Mark emark@bergersingerman.com dtr@bergersingerman.com ltorres@bergersingerman.com Mitchell W. Berger mberger@bergersingerman.com BERGER SINGERMAN Las Olas Centre II 350 E. Las Olas Blvd. Suite 1000 Fort Lauderdale, FL 33301 Tel: 954.525.9900 Attorneys for Martin E. O’Boyle, Airline Highway LLC, Commerce Gp Inc., GC Acquisition Co. Inc., CRO Aviation Inc., Asset Enhancement Inc., Commerce Realty Group Inc., and Commerce Group Inc. Daniel DeSouza ddesouza@desouzalaw. com DESOUZA LAW, P.A. 1515 N. University Drive Suite 209 Coral Springs, FL 33071 Tel: 954.551.5320 Attorneys for Denise DeMartini, Citizens Awareness Foundation Inc., Our Public Records LLC, Stop Dirty Government LLC, and Public Awareness Institute, Inc. Stuart R. Michelson smichelson@smichelsonlaw.com LAW OFFICES OF STUART MICHELSON 800 SE 3rd Avenue, 4th Floor Fort Lauderdale, FL 33316 Tel: 954.463.6100 Attorneys for Giovanni Mesa, Nicklaus Taylor and Ryan Witmer Adam T. Rabin arabin@mccaberabin.com Robert C. Glass rglass@mccaberabin.com MCCABE RABIN, P.A. 1600 Forum Place, Suite 505 Palm Beach, FL 33401 Tel: 561.659.7878 Attorneys for William Ring, Jonathan O’Boyle Case 9:15-cv-80182-KAM Document 34 Entered on FLSD Docket 04/06/2015 Page 23 of 24 Case No.: 15-cv-80182-KAM 24 And The O’Boyle Law Firm, P.C., Inc. Mark J. Hanna mhanna@g3mlaw.com service@g3mlaw.com GMM MADISON, P.A. 401 South County Road #3272 Palm Beach, Florida 33480 Tel: 561.223.9990 Attorney for Christopher O’Hare /s/ Eric M. Sodhi ERIC M. SODHI Case 9:15-cv-80182-KAM Document 34 Entered on FLSD Docket 04/06/2015 Page 24 of 24 .pdf DE34-O~1.pdf DE 34 - Omnibus Response to Motions to Dismiss-6557796.pdf EnUs DE 35 - Defs' Mesa, Taylor & Witmer's Reply in Suppport of their MTD Plt....pdf IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA WEST PALM BEACH DIVISION CASE NO: 15-CV-80182-KAM TOWN OF GULF STREAM, et. al. CLASS ACTION Plaintiffs, v. MARTIN E. O'BOYLE, et. al. Defendants. --------------------------------·' DEFENDANTS' GIOVANI MESA, NICKLAUS TAYLOR AND RYAN WITMER'S REPLY IN SUPPORT OF THEIR MOTION TO DISMISS PLAINTIFFS' CLASS ACTION COMPLAINT Defendants, Giovani Mesa (hereinafter "Mesa"), Nicklaus Taylor (hereinafter "Taylor"), and Ryan Witmer (hereinafter "Witmer"), file this Reply to Plaintiffs' Omnibus Response to Defendants' Motion to Dismiss as follows: 1 I. The Eleventh Circuit Has Ruled That Access To The Courts Should Not Be Denied and that Congress did not intend to punish citizens for accessing the legal system. Plaintiffs' Complaint should be dismissed because RICO claims based on litigation or the threat of litigation have been rejected by binding Eleventh Circuit precedent holding that litigation, even that proven to be frivolous, cannot support a conspiracy sufficient to support a RICO claim. See Raney v. Allstate Insurance Company, 370 F.3d 1086 (11th Cir. 2004); United States v. Pendergraft, 297 F.3d 1198 (11th Cir. 2002). These cases confirm the concept that access to the For efficiency, in this Reply, Defendants address only Plaintiffs' arguments with respect to controlling Eleventh Circuit precedent regarding the predicate act for a RICO violation. Defendants adopt the remaining Defendants' responses to Plaintiffs' other arguments. Case 9:15-cv-80182-KAM Document 35 Entered on FLSD Docket 04/14/2015 Page 1 of 10 courts should not be infringed. In light of Raney and Pendergraft, this case should be dismissed with prejudice. /d. In response to Defendants' citation of binding precedent which holds that the threat of filing lawsuits and the actual filing of lawsuits, even frivolous lawsuits, do not constitute predicate acts under RICO, Plaintiffs have cited several cases, some unreported, none of which are from within the Eleventh Circuit. Some of these cases predate both Pendergraft and Raney, and, as such, even assuming they supported Plaintiffs when published, were implicitly overruled by those Eleventh Circuit cases. 370 F.3d at 1 088; 297 F.3d at 1208. None of the cases that Plaintiffs offer in response to Defendants' Motion would support this Court should it disregard Pendergraft and Raney. 370 F.3d at 1088; 297 F.3d at 1208. For example, Plaintiffs suggest that Calabrese v. CSC Holdings, Inc. , 283 F. Supp.2d 797 (E.D.N.Y. 2003) "found that threatened frivolous litigation could in fact constitute the predicate act of extortion . ... " [D.E. 34, p. 9.] This is an over simplification of the facts in Calabrese, not to mention that it suggests that a district court in New York holds greater sway than the Eleventh Circuit. Moreover, contrary to Plaintiffs' distortion of the holding in Calabrese, the court was careful to note the scheme it was considering "amounts to much more than the institution of frivolous litigation ... . " See 283 F. Supp.2d at 809-10. Plaintiffs have not alleged the "much more" sufficient to pass the test suggested in Calabrese, even assuming it overruled Pendergraft and Raney. 370 F.3d at 1088; 297 F.3d at 1208. Similarly, La Suisse, Societe D'Assurances Sur La Vie v. Kraus, 2014 WL 3610890, at *28 (S.D.N.Y. July 21 , 2014) does not provide a basis for this Court 2 Case 9:15-cv-80182-KAM Document 35 Entered on FLSD Docket 04/14/2015 Page 2 of 10 to disregard Pendergraft and Raney. 370 F.3d at 1088; 297 F.3d at 1208. Again, even assuming this Court were inclined to follow a district court in New York and not the Eleventh Circuit, Kraus concerned not a motion to dismiss but an "inquest" into damages as the underlying RICO claim had been admitted due to a default. Kraus, 2014 WL 3610890 at *1 . Because the default had the effect of admitting the allegations of the complaint, the Kraus Court's analysis was limited as there was no party advocating against the Plaintiff's position. See id. Essentially, Kraus concerns the damages elements of a RICO claim, not the underlying conspiracy requirement. See id. Moreover, unlike Plaintiffs, the Kraus court found that the relevant defendants "attempted to leverage their control and influence over the policy holders by instituting policyholder litigations .... " See Kraus, 2014 WL 3610890, at *28. In Kraus, the defendant brokers compounded their fraud by threatening the carrier, to whom they owed a fiduciary duty, with litigation by the policy holders. This was blatant fraud by a fiduciary. No such facts are alleged here. While the United States Magistrate Judge noted that "courts are nearly unanimous in the view that the pursuit of frivolous litigation does not constitute the predicate RICO act of extortion," it held that the lawsuits controlled by Kraus and Caruso constituted extortion for RICO purposes because Kraus and Caruso did not have a legitimate claim of right to the proceeds of the lawsuit at issue. The allegations of the Kraus case are far afield from those involved here? In any 2 Plaintiffs have chosen to rely on an unpublished out-of-circuit district court opinion when there is Eleventh Circuit precedent on point. 3 Case 9:15-cv-80182-KAM Document 35 Entered on FLSD Docket 04/14/2015 Page 3 of 10 event, Kraus does not support this Court disregarding Pendergraft and Raney. 370 F.3d at 1088; 297 F.3d at 1208. Plaintiffs claim that their lawsuit is distinct from binding Eleventh Circuit precedent because Defendants threatened to bring "additional and unrelated public records requests," in addition to the filing of frivolous lawsuits. [D.E. 34, p. 13.] That is a distinction without a difference. The Eleventh Circuit has clearly held that "Congress did not intend to punish citizens for accessing the legal system." Raney, 370 F.3d at 1088. Yet that is exactly what Plaintiffs propose to do, even going so far as to sue the lawyers who filed the lawsuits. Courts have uniformly explained that litigants desiring to challenge what they believe are improper lawsuits must utilize the proper mechanisms, such as Rule 11 and Fla. Stat.§ 57.105. See, e.g., Raney, 370 F.3d at 1088. In no event should filing a lawsuit or public records requests, frivolous or not, subject a lawyer to the threat of criminal sanctions. Indeed, it is precisely this danger-the desire of a litigant to attempt to criminalize the actions of an opponent through the Federal statutes-that has led the Eleventh Circuit to prohibit cases such as Plaintiffs'. See, e.g., id. One reported New York District Court case which the Plaintiffs failed to cite, that is, Findthebest.com, Inc., v. Lumen View Technology LLC, 20 F. Supp.3d 451 , 457-61 (S.D. N.Y. 2014), noted that the Courts of Appeals that have addressed the question have all agreed that filing meritless lawsuits does not establish a predicate RICO act of extortion, citing, among others, Pendergraft and I.S. Joseph Co., Inc. v. J. Lauritzen AIS, 571 F.2d 255, 267-68 (8th Cir. 1984). The court further noted that, while the Second Circuit had yet to address 4 Case 9:15-cv-80182-KAM Document 35 Entered on FLSD Docket 04/14/2015 Page 4 of 10 the issue, the circuit's district courts had held that the filing of meritless or malicious litigation does not constitute a predicate RICO act. Findthebest.com, 20 F. Supp.3d at 457. This Court need look no further than the Pendergraft and Raney cases to enter a dismissal of Plaintiffs' Complaint with prejudice. The Eleventh Circuit held that it has long been the law that "a threat to file a lawsuit, even in bad faith" can never constitute a predicate act under RICO. Pendergraft, 299 F.3d at 1206 (emphasis added). The court noted that challenging the government is a sacred American right, and reversed the convictions, despite finding Pendergraft's scheme of extorting money from the county with threatened litigation, backed up with purged affidavits, not insignificant. /d. 1207-08. The Eleventh Circuit explained that it would not permit state court litigants to use RICO as an arsenal to tip the scales of state court litigation. /d. The Eleventh Circuit affirmed the breadth of its holding in Pendergraft two (2) years later in Raney. 370 F .3d at 1088. In a per curium opinion, the court rejected Raney's attempt to limit Pendergraft to threatened litigation, as compared with actual litigation, which had been visited upon Raney. /d. So that there could be no doubt, the Eleventh Circuit explained that "courts possess adequate procedures to distinguish valid claims from invalid claims and held that Congress did not intend to punish citizens merely for accessing the legal system." /d. The court also reiterated its "expressed concern about transforming every state-law malicious prosecution action into a federal crime." /d. It may be that at one time, or even today, threatened litigation was a possible predicate act for RICO in the various jurisdictions cited by Plaintiffs. 5 Case 9:15-cv-80182-KAM Document 35 Entered on FLSD Docket 04/14/2015 Page 5 of 10 However, some of the authority relied upon by Plaintiffs pre-date both Raney and Pendergraft. The Eleventh Circuit has clearly and definitively held that neither a threat to litigate or actual litigation can constitute a predicate act under RICO. Raney, 370 F.3d at 1088; Pendergraft, 297 F.3d at 1208. The Eleventh Circuit has never made an exception for lawsuits in which one has no interest, as Plaintiffs try to argue. The authority relied upon by Plaintiffs would not pass muster in the Eleventh Circuit. This case should be dismissed with prejudice. II. Florida Law Forbids Denying Citizens Access To Public Records. Even assuming that Plaintiffs' alleged scheme is not simply litigation and the threat thereof, accessing the public records system cannot support a RICO claim because it is nothing more than exercising a Florida Constitutional Right and a procedure provided for by Fla. Stat. § 119. This was addressed in greater detail in Defendants' Motion to Dismiss. [D.E. 9, pp. 3, 4, 8-11]. In summary, because Florida's public records laws makes accessing public records a right, alleged abuse of that system cannot form a conspiracy for RICO purposes. Florida law does not permit a regulated entity to inspect the intent of the party requesting public records. Therefore, Plaintiffs repeated assertions that Defendants' public records requests were "pre-textual" or "frivolous" are irrelevant. As set forth in Defendants' Motion to Dismiss, [D.E. 9, pp. 8-11] it has long been held that a governmental entity may not even inquire as to the reason for a public records request. This restriction applies whether the requestor makes one (1) public records request or fifty. Since intent is irrelevant, Plaintiffs' assertions regarding Defendants' motivations fail to advance their claims. See Chandler v. City of Greenacres, 140 So.3d 1080, 1084 (Fla. 4th DCA 2014). 6 Case 9:15-cv-80182-KAM Document 35 Entered on FLSD Docket 04/14/2015 Page 6 of 10 Plaintiffs further allege the public records requests are "also fraudulent in that oftentimes it is made by a purported 'non-profit,' with a carefully selected name in an effort to fool the recipient into believing an innocent non-profit with a do-good name (i.e. stopdirtygovernment, Citizen Awareness Foundation, etc.) requires the information for its mission and purpose." [D.E. 34, p. 2]. The name of the requesting party is irrelevant in that it is not a requirement of Fla. Stat. § 119 that the requestor even provide a name as a condition to receiving the requested public documents. [D.E. 9, pp. 8-11]. See id. Plaintiffs highlighting of irrelevancies fails to support a RICO claim. There is nothing criminal about requesting public records in the name of a shell entity. No amount of commentary can save Plaintiffs' fatally flawed complaint. In the introduction to the Plaintiffs' Omnibus Response Plaintiffs allege: Once the public records request is made, the RICO Enterprise now uses the one-sided fee provision contained in the public records law as a "hammer," to crush the class members into submission and extract an ill-gotten and illegal settlement payment in excess of any costs and attorneys' fees incurred. [D. E. 34, p. 2]. This is simply a preposterous and fantastic statement that has no facial plausibility. See Motion to Dismiss [D.E. 9, pp. 1-3]. Under Florida law, only a court may award attorney's fees and costs. The attorneys' fees provision in Fla. Stat. § 119 is not self-executing. Fees may only be obtained by presenting evidence to a judge, who then hears evidence from the opposing parties before entering an award. Any award is subject to an appeal. Plaintiffs' talk about a "hammer" and "crushing class members" is inconsistent with reality not only because it ignores these safeguards, but also because it disregards the fact that 7 Case 9:15-cv-80182-KAM Document 35 Entered on FLSD Docket 04/14/2015 Page 7 of 10 a timely response to a public records request shields a party from attorneys' fees and costs. Plaintiffs use the word "complicated" to describe the alleged RICO scheme throughout the response several times. However, there are no reported cases that provide that if a complaint is complicated, then litigation can be used as a wrongful predicate act under RICO. Moreover, Plaintiffs' complaint does not describe a complicated scheme. Prolixity does not establish complexity. The Complaint merely alleges that the Defendants filed public records requests, sometimes through shell entities, that these public records requests were "inconspicuous," that the Defendants would then submit inflated settlement demands which were "far exceeding the actual costs and fees incurred" when they negotiated settlement, and as a negotiating tool they would threaten to file additional public requests if their demands were not met. This is not complicated. It is just an allegation of a scheme that depends on the threat of litigation and actual litigation in some instances as its conspiracy. As such, the "scheme" described in Plaintiffs' uncomplicated but lengthy complaint fails to establish an actionable conspiracy for RICO purposes, at least in the Eleventh Circuit. See, e.g., Raney, 370 F.3d at 1088; Pendergraft, 297 F.3d at 1208. Plaintiffs' claims should be dismissed because they lack a RICO predicate. Raney, 370 F.3d at 1088; Pendergraft, 297 F.3d at 1208. Defendants' Motion to Dismiss should be granted. Plaintiffs' Complaint should be dismissed with prejudice. 8 Case 9:15-cv-80182-KAM Document 35 Entered on FLSD Docket 04/14/2015 Page 8 of 10 Respectfully submitted, LAW OFFICE OF STUART R. MICHELSON Attorney for Defendants, Mesa, Taylor and Witmer 800 S.E. Third Avenue, 4th Floor Fort Lauderdale, FL 33316 Telephone: 954-463-6100 Facsimile: 954-463-5599 Email: smichelson@smichelsonlaw.com --~Y ~~ uartR. Michelson Florida Bar No. 286982 CERTIFICATE OF SERVICE I hereby certify that on the 14th day of April, 2015, I electronically filed the foregoing document with the Clerk of the Court using CM/ECF. I also certify that the foregoing document is being served this day on all counsel of record or pro se parties identified on the attached Service List in the manner specified, either via transmission of Notices of Electronic Filing generated by CM/ECF or in some other authorized manner for those counsel or parties who are not authorized to receive electronically Notices of Electronic Filing. ~ Florida Bar No. 286982 9 Case 9:15-cv-80182-KAM Document 35 Entered on FLSD Docket 04/14/2015 Page 9 of 10 SERVICE LIST Gerald F. Richman Richman Greer, P.A. One Clearlake Centre, Suite 1504 250 Australian Avenue, South West Palm Beach, FL 33401-5016 Telephone: (561) 803-3500 grichman@richmangreer.com dcostonis@richmangreer.com Eric M. Sodhi esodhi@richmangreer.com mramirez@richmangreer.com kkadlac@richmangreer.com Leora B. Freire lfreire@richmangreer.com dcostonis@richmangreer.com Attorneys for Town of Gulf Stream and Wantman Group, Inc. Mitchell W. Berger Berger Singerman Las Olas Centre II 350 E. Las Olas Blvd., Suite 1000 Fort Lauderdale, FL 33301 Telephone: (954) 525-9900 mberger@bergersingerman.com Steven D. Weber sweber@bergersingerman.com Etan Mark emark@bergersingerman.com Attorneys for Martin E. O'Boyle, Airline Highway LLC, Commerce Gp Inc., GC Acquisition Co. Inc., CRO Aviation Inc., Asset Enhancement Inc., Commerce Realty Group Inc. and Commerce Group Inc. 10 Daniel DeSouza DeSouza Law, P.A. 1515 N. University Drive, Suite 209 Coral Springs, FL 33071 Telephone: (954) 551-5320 ddsouza@desouzalaw. com Attorneys for Denise DeMartini, Citizens Awareness Foundation Inc., Our Public Records LLC, Stop Dirty Government LLC, and Public Awareness Institute, Inc. Adam T. Rabin McCabe Rabin, P.A. 1601 Forum Place, Suite 505 West Palm Beach, FL 33401 Telephone: (561) 659-7878 arabin@mccaberabin .com Robert C. Glass rglass@mccaberabin.com Attorneys for William Ring, Jonathan O'Boyle and The O'Boyle Law Firm, P.C., Inc. Mark J. Hanna GMM Madison, P.A. 401 South County Road, #3272 Palm Beach, Florida 33480 Telephone: (561) 223-9990 mhanna@g3mlaw.com service@g3mlaw.com Attorney for Christopher O'Hare Case 9:15-cv-80182-KAM Document 35 Entered on FLSD Docket 04/14/2015 Page 10 of 10 .pdf DE35-D~1.pdf DE 35 - Defs' Mesa, Taylor & Witmer's Reply in Suppport of their MTD Plt....pdf EnUsScott –   I tried to forward this information to you, but it didn’t work.  This information was sent from Dottie Costonis (Richman, Greer) on 4/16/15.      Kelly Avery Deputy Clerk Town of Gulf Stream 100 Sea Rd. Gulf Stream, FL 33483-7427 561-276-5116 561-737-0188 fax HYPERLINK "mailto:kavery@golf-stream.org"kavery@gulf-stream.org   Confidentiality Notice: This e-mail message, including any attachments, is for the sole use of the intended recipient(s). If you are not the intended recipient, please contact the sender by reply e-mail and destroy all copies of the original message. Florida has a very broad public records law. Written communications regarding Town of Gulf Stream business are public records available to the public upon request. Your e-mail communications are therefore subject to public disclosure. Under Florida law, e-mail addresses are public records. If you do not want your e-mail address released in response to a public records request, do not send electronic mail to this entity. Instead, contact this office by phone or in writing.