758 F. Supp. 2d 153
E.D.N.Y2010Background
- Curtis & Associates, P.C. and W. Robert Curtis sue multiple law offices and lawyers in the Eastern District of New York, asserting federal RICO claims and state-law claims stemming from alleged misconduct by former Curtis clients and their new counsel.
- Plaintiffs allege that former clients DeGregorio, Turansky Callaghan, and Nichols engaged in “litigation activities” (mail and wire communications) to obstruct Curtis’s fee collection and file phony malpractice suits against Curtis.
- Defendants Bushman, Levitt, Levy, DeGregorio, Turansky, and Nichols are alleged to have used mail and wire communications in furtherance of schemes to defraud Curtis and its insurer, and to have encouraged or engaged in related fraudulent conveyances.
- The complaint asserts ten federal and several state-law causes of action; the federal claims are premised on RICO §1962 predicates, including mail/wire fraud and conspiracy.
- The court grants the motions to dismiss the federal RICO claims for failure to plead a pattern of racketeering activity and fraud with particularity, declines supplemental jurisdiction over state-law claims, and denies leave to amend as futile.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiffs plead a pattern of racketeering activity | Curtis asserts predicate acts via alleged mail/wire fraud tied to ongoing litigation | Defendants contend litigation activities cannot constitute predicate acts | Counts One–Five dismissed for lack of a pattern of racketeering activity |
| Whether plaintiffs plead fraud with particularity under Rule 9(b) | Mail/wire predicate acts alleged as part of fraud scheme | Allegations lack specific misrepresentations and scheme details | Counts One–Five dismissed for failure to plead fraud with particularity |
| Whether RICO conspiracy claims survive given failure of substantive RICO claims | Conspiracy claims sweep in despite lack of pattern | No conspiracy claim without viable substantive RICO violation | Counts Six–Ten dismissed as dependent on dismissed substantive RICO claims |
| Whether court should retain jurisdiction over state-law claims | State-law claims should remain in federal court | With federal claims dismissed, supplemental jurisdiction should not be exercised | State-law claims dismissed without prejudice; no supplemental jurisdiction |
| Whether amendment to cure deficiencies would be futile | Proposed Second Amended Complaint would cure defects | Amendment futile; would not cure core defects | Motion to amend denied; amendments would be futile |
Key Cases Cited
- City of New York v. Smokes-Spirits.com, Inc., 541 F.3d 425 (2d Cir. 2008) (fraud predicates require particularity under Rule 9(b))
- Bridge v. Phoenix Bond & Indem. Co., 553 U.S. 639 (U.S. 2008) (mailing may satisfy the mail-fraud element if incidental to a scheme to defraud)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (pleading standards for plausibility)
- S.Q.K.F.C. Inc. v. Bell Atl. Tricon Leasing Corp., 84 F.3d 629 (2d Cir. 1996) (requirement to plead fraud with particularity in RICO cases)
- Spool v. World Child Int’l Adoption Agency, 520 F.3d 178 (2d Cir. 2008) (pattern of racketeering must be adequately alleged)