312 F. Supp. 3d 201
D.D.C.2018Background
- Plaintiff Richard Langan is a solo attorney who drafted a one-hour addendum to an employment agreement for AMPM that did not alter a promissory note's acceleration clause.
- AMPM fired its former manager Foscaldo; Foscaldo sued and obtained a Massachusetts Superior Court judgment enforcing the note's acceleration clause.
- AMPM, Smith, and Beauregard sued Paster for malpractice (originally brought by Keegan/ Zayotti); Arrowood LLP (Arrowood and Kayatta) later represented AMPM and added Langan as a defendant in an amended malpractice complaint.
- Langan prevailed on summary judgment in the malpractice action and then sued in federal court alleging malicious prosecution, civil RICO (mail/wire fraud and extortion predicates), RICO conspiracy, and several state-law claims.
- Defendants moved to dismiss the complaint. The district court concluded the RICO claims failed as a matter of law and declined supplemental jurisdiction over the state-law claims, dismissing them without prejudice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether litigation conduct (settlement demand, filings, communications) can constitute extortion under 18 U.S.C. § 1951 as a RICO predicate | Langan: Arrowood's $50,000 settlement demand and related litigation conduct amounted to attempted extortion | Defendants: Litigation conduct—even abusive or in bad faith—cannot as a matter of law be extortion/RICO predicate; resort to courts is protected | Held: Litigation conduct alone cannot constitute extortion; RICO-extortion theory fails |
| Whether mail/wire fraud predicates are adequately pleaded based on litigation-related communications and filings | Langan: attorney calls, service omissions, appearances, and correspondence were fraudulent uses of mail/wire supporting RICO | Defendants: Allegations are routine litigation activities and, without more, do not plead mail/wire fraud (and fail Rule 9(b) specificity) | Held: Allegations amount to malicious prosecution-type claims, not mail/wire fraud; RICO fraud predicates fail |
| Whether the complaint pleads a pattern/continuity of racketeering activity sufficient for RICO | Langan: scheme spanned years, involved many predicate acts and victims, posing threat of repetition | Defendants: Conduct was a single, finite litigation episode tied to one dispute—not ongoing criminal enterprise | Held: No open- or closed-ended continuity; scheme was narrow and litigation-tethered, so pattern element not met |
| Whether RICO conspiracy (18 U.S.C. § 1962(d)) survives absent a viable substantive RICO claim | Langan: conspiracy claim based on same predicates and alleged coordination among defendants | Defendants: Conspiracy cannot stand when substantive RICO fails | Held: RICO conspiracy fails because substantive RICO claims fail |
Key Cases Cited
- H.J. Inc. v. Nw. Bell Tel. Co., 492 U.S. 229 (discusses continuity requirement for RICO pattern)
- Efron v. Embassy Suites (Puerto Rico), Inc., 223 F.3d 12 (1st Cir. 2000) (elements of civil RICO and pattern discussion)
- Home Orthopedics Corp. v. Rodriguez, 781 F.3d 521 (1st Cir. 2015) (open- and closed-ended continuity framework and indicia of continuity)
- Kim v. Kimm, 884 F.3d 98 (2d Cir. 2018) (litigation activities alone cannot be RICO predicates for fraud)
- Raney v. Allstate Ins. Co., 370 F.3d 1086 (11th Cir. 2004) (rejecting extortion/RICO based on malicious lawsuits)
- Deck v. Engineered Laminates, 349 F.3d 1253 (10th Cir. 2003) (meritless litigation is not extortion under § 1951)
- United States v. Eisen, 974 F.2d 246 (2d Cir. 1992) (example where extensive fraudulent litigation formed part of broader RICO scheme)
- Foley v. Wells Fargo Bank, N.A., 772 F.3d 63 (1st Cir. 2014) (Rule 12(b)(6) pleading standards and inference rules)