162 F. Supp. 3d 1341
S.D. Ga.2016Background
- Plaintiffs (Mexican nationals and other Mexico residents/exempt passengers) allege airlines charged a mandatory Mexican tourism tax to exempt passengers when selling tickets from U.S. to Mexico and retained the funds rather than refunding or remitting them properly.
- Defendants are several U.S. and Mexican carriers and members of CANAERO; CANAERO negotiated a contract/procedures with the Mexican government requiring collection of the tax, identification of exempt passengers, and reimbursement where appropriate.
- Plaintiffs allege the airlines routinely included the tax as a line-item on tickets/confirmations, failed to disclose exemption/refund rights, and thus formed an association‑in‑fact enterprise that engaged in mail and wire fraud to enrich themselves—bringing RICO claims (18 U.S.C. §§ 1962(a),(c),(d)).
- Defendants moved to dismiss for failure to state a RICO claim (and raised additional jurisdictional/venue/service and extraterritoriality defenses); Plaintiffs moved for leave to amend after the dismissal briefing/hearing.
- The court dismissed the Complaint, concluding Plaintiffs failed to plead (1) an association‑in‑fact enterprise (allegations show parallel conduct, not agreement) and (2) predicate mail/wire fraud acts with the particularity required by Rule 9(b); leave to amend was denied as futile.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Existence of a RICO enterprise | Airlines, via CANAERO meetings/contract, agreed (expressly or tacitly) to uniformly collect tax from exempt passengers, forming an association‑in‑fact enterprise | Allegations show only parallel competitive conduct and CANAERO membership; no factual allegations of an agreement, shared management, or common decision‑making | Dismissed — pleadings show at most parallel conduct; conclusory agreement allegations disregarded; no plausible association‑in‑fact enterprise pleaded |
| Mail/wire fraud predicates (pattern) | Tickets, confirmations, invoices, website communications and manifests constituted fraudulent communications or omissions (failure to disclose exemption/refund rights) used to further scheme | Line‑item charges are truthful statements that tax was charged; no duty to disclose; plaintiffs do not identify specific false statements or how they were misled; fails Rule 9(b) particularity | Dismissed — no specific misrepresentations/omissions pleaded that misled plaintiffs; mail/wire fraud predicates inadequately alleged |
| Leave to amend / futility | Plaintiffs proffered additional facts (minutes, officials’ meetings, CANAERO house staff, manifests/reports) showing coordination and false reporting to Mexican authorities and sought to add them | Defendants oppose amendment; court must consider futility and Rule 15 factors | Denied — even amended allegations would not cure absence of predicate misrepresentations to plaintiffs or show how governmental filings misled class; amendment would be futile |
| Jurisdictional/other defenses (venue, service, extraterritoriality) | Plaintiffs asserted proper venue and jurisdiction; urged case proceed on merits | Defendants raised failure to join parties, personal jurisdiction/service, improper venue, and extraterritoriality | Court did not reach merits of these defenses because dismissal for failure to state a RICO claim was dispositive; those arguments rejected as lacking merit where considered |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading must state plausible claim; courts ignore mere conclusions)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (parallel conduct alone insufficient to state conspiracy; plausibility standard)
- Boyle v. United States, 556 U.S. 938 (2009) (association‑in‑fact enterprise requires common purpose and continuing unit)
- Sanchez v. Aerovias de Mexico, S.A. de C.V., 590 F.3d 1027 (9th Cir. 2010) (ADA preemption and limits on state‑law claims against airlines over pricing/collection practices)
- Am. Dental Ass'n v. Cigna Corp., 605 F.3d 1283 (11th Cir. 2010) (RICO/mail‑and‑wire‑fraud‑based RICO claims require Rule 9(b) particularity)
- Ambrosia Coal & Constr. Co. v. Pages Morales, 482 F.3d 1309 (11th Cir. 2007) (civil RICO claims based on mail/wire fraud must satisfy Rule 9(b))
- United Food & Commercial Workers v. Walgreen Co., 719 F.3d 849 (7th Cir. 2013) (RICO does not reach parallel, uncoordinated fraud; conscious parallelism insufficient)