Heinrich v. Waiting Angels Adoption Services, Inc.
2012 U.S. App. LEXIS 2390
| 6th Cir. | 2012Background
- Seven plaintiff couples sued Waiting Angels Adoption Services, Inc. and two principals for fraud and RICO-related claims arising from adoption efforts in Guatemala.
- The district court dismissed the RICO claims under Rule 12(c)/9(b), but allowed amendment; the third amended complaint asserted predicate acts of mail/wire fraud, extortion, and related RICO claims.
- Plaintiffs allege Waiting Angels advertised available children online and misrepresented nonprofit status to induce fees and payments.
- Specific alleged acts include: January–February 2006 payments for multiple adoptions and foster care, with later claims that referrals and birth mother consents were unavailable.
- The district court found only four predicate acts plausibly alleged and concluded no pattern of racketeering or viable RICO conspiracy existed.
- The Sixth Circuit reversed, holding sufficient predicate acts and open-ended continuity to plead a pattern and upholding a viable conspiracy claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether additional alleged predicate acts should be considered | Heinriches argue other emails/web representations show fraud. | District court did not convert to summary judgment; those acts not pled in the operative complaint. | No; court correctly limited to pleaded acts. |
| Whether extortion was adequately alleged as a predicate act | Defendants extorted via threats to continue/advance adoptions financially. | Threats were not wrongful or did not obtain property; not actionable extortion. | Not adequately alleged; extortion not shown. |
| Whether the four pleaded predicate acts establish a pattern of racketeering | Acts in January–February 2006 show a continued scheme; open-ended continuity exists. | Closed-ended continuity fails; lack of ongoing pattern. | Open-ended continuity adequately pled; pattern established. |
| Whether the RICO conspiracy claim is adequately alleged | Boraggina and Beauvais conspired to conduct Waiting Angels through racketeering. | No separate requirement beyond underlying violations; need not plead additional elements. | Adequately alleged; conspiracy claim survives. |
Key Cases Cited
- Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479 (1985) (establishes pattern-of-racketeering elements for RICO)
- H.J. Inc. v. Northwestern Bell Tel. Co., 492 U.S. 229 (1989) (relationship plus continuity test for pattern)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (plausibility pleading standard)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (facilitates plausibility standard in pleading)
- Bridge v. Phoenix Bond & Indem. Co., 553 U.S. 639 (2008) (reliance and proximate causation in fraud context)
- Jamieson v. United States, 427 F.3d 394 (6th Cir. 2005) (elements of mail and wire fraud)
- DeSantis v. United States, 134 F.3d 760 (6th Cir. 1998) (scienter in fraud pleading)
- Sinito v. United States, 723 F.2d 1260 (6th Cir. 1983) (requirements for RICO conspiracy)
- United States v. Busacca, 936 F.2d 232 (6th Cir. 1991) (continuity analysis in open-ended pattern)