7 F. Supp. 3d 468
E.D. Pa.2014Background
- Macauley filed a civil RICO action and various state-law claims against twenty defendants; the court granted six motions for judgment on the pleadings and dismissed the federal claims with prejudice, declining supplemental jurisdiction over state-law claims.
- Factual core: Macauley alleges Hill fraudulently acquired properties in Macauley’s name; refinancing and purchases occurred without her knowledge between 2006–2007; she learned of the actions after foreclosure notices and credit discoveries in 2007.
- Key transactions include Berry Brow Drive property refinanced by Gateway Funding and Bear Stearns with mortgages totaling overvalued appraisals, with title work by Chase Abstract and related parties; several Philadelphia properties were purchased in Macauley’s name.
- Macauley and Hill separated in 2007; divorce finalized in 2008; Macauley later filed bankruptcy in January 2008, eventually discharged in May 2008.
- Macauley did not list any claims in her Chapter 7 petition; the court held the bankruptcy estate, not Macauley personally, owns pre-petition claims unless the trustee is substituted under Rule 17(a)(3).
- The court noted Macauley had deposed Hill in 2012 and issued a RICO Case Statement, but Macauley did not amend her complaint; the court considered bankruptcy filings as part of the record.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| standing under § 1964(c) | Macauley seeks to pursue RICO claims despite bankruptcy status. | The bankruptcy trustee should be substituted as real party in interest; Macauley lacks standing. | Macauley lacks standing; claims belong to the bankruptcy estate. |
| enterprise and pattern under § 1962 | Wasubul Investments and the Hill Enterprise constitute RICO enterprises with a pattern of activity. | Allegations fail to plead a cognizable enterprise or a pattern of racketeering across a substantial period. | Enterprise and closed-ended pattern insufficient; no plausible entitlement to relief. |
| § 1962(a)-(d) viability | Defendants engaged in a pattern of racketeering with various predicate acts causing injury. | Injury not adequately alleged and continuity/pattern not proven; several subsections fail as a matter of law. | Claims under § 1962(a)-(d) dismissed; no viable RICO claim. |
| statutes of limitations and private right of action for RESPA, ECOA, HMDA | Limitations should not bar RESPA/ECOA/HMDA claims given injuries and discovery. | RES PA and ECOA claims barred by statute of limitations; HMDA has no private right of action. | RESPSA and ECOA claims barred; HMDA claim dismissed; limitations fatal to RESPA/ECOA. |
| supplemental jurisdiction and amendment | Dismissal of federal claims should not preclude state-law considerations. | With federal claims dismissed, court should decline supplemental jurisdiction. | State-law claims declined; dismissal with prejudice of federal claims; case closed. |
Key Cases Cited
- H.J. Inc. v. Northwestern Bell Tel. Co., 492 U.S. 229 (Supreme Court 1989) (continuity and pattern elements in a RICO claim; enterprise and pattern requirements)
- Ins. Brokerage Antitrust Litig., 618 F.3d 300 (3d Cir. 2010) (plaintiffs must plead plausible RICO claims with sufficient specificity)
- Lightning Lube, Inc. v. Witco Corp., 4 F.3d 1153 (3d Cir. 1993) (standing and injury requirements under RICO; causation standards)
- Maio v. Aetna, Inc., 221 F.3d 472 (3d Cir. 2000) (injury to business or property requirement for RICO standing)
- Reves v. Ernst & Young, 507 U.S. 170 (Supreme Court 1993) (conduct of enterprise’s affairs; participation requirement)