7 F. Supp. 3d 260
E.D.N.Y2014Background
- ESI filed RICO and New York state claims against Unity Fuels, Grease Lightning, and RGS for alleged oil theft and related torts.
- Unity and RGS moved to dismiss under Fed. R. Civ. P. 8, 9(b), and 12(b)(6); Pristine Properties was voluntarily dismissed.
- Court declined to convert the motion to summary judgment, allowing discovery before summary judgment.
- Plaintiff alleged theft of used cooking oil from ESI-branded containers at customer sites and misrepresentation to customers.
- Court addressed both RICO and state-law claims and retained certain claims for further proceedings while dismissing §349 claims.
- Court ultimately granted ESI broad preliminary injunctive relief restricting interference with ESI’s contracts and oil removals.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the complaint pleads two or more predicate acts of racketeering. | ESI pleads NSAP transport/sale and wire fraud acts. | Defendants contest sufficiency of predicate acts and pleading standards. | Yes; two or more predicate acts adequately pled. |
| Whether an ongoing enterprise and open-ended continuity are pled for RICO. | ESI alleges interrelated entities acting in concert. | Defendants argue lack of established enterprise and continuity. | Plaintiff pleads a RICO enterprise with open-ended continuity. |
| Whether the complaint states a RICO conspiracy claim. | Defendants conspired to commit RICO through pattern of racketeering. | Conspiracy claim fails with substantive RICO issues. | RICO conspiracy adequately pleaded. |
| Whether ESI states a sufficient tortious interference with contract claim. | Defendants knowingly procured breach by fraud and interference. | Challenges to contract validity and damages. | Sufficient evidence to proceed on tortious interference. |
| Whether NY General Business Law § 349 claim survives. | Claim targets consumer deception by defendants. | Private, private-restaurant disputes not consumer-oriented. | § 349 claim dismissed. |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (pleading requires plausible claims, not mere conclusory allegations)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (pleading must state plausible, not speculative, claims)
- First Nationwide Bank v. Gelt Funding Corp., 27 F.3d 763 (2d Cir. 1994) (protects proximate cause and causation in RICO contexts)
- H.J. Inc. v. Northwestern Bell Tel. Co., 492 U.S. 229 (U.S. 1989) (set forth pattern-of-racketeering and continuity concepts)
- Cofacredit, S.A. v. Windsor Plumbing Supply Co., 187 F.3d 229 (2d Cir. 1999) (explains open-ended continuity and narrow application to ongoing illegality)