531 F.Supp.3d 993
E.D. Va.2021Background:
- Devin G. Nunes, a U.S. Representative and then-Chair of the House Permanent Select Committee on Intelligence, sued Fusion GPS (Bean LLC) and Glenn Simpson alleging a campaign of ethics complaints and media smears tied to a dossier to interfere with his committee work.
- Nunes’ Second Amended Complaint alleged six predicate acts (multiple ethics complaints, creation/publication of a dossier and related press coverage) and asserted civil RICO claims, a RICO conspiracy, requests for injunctive relief, and state-law tort claims.
- Defendants moved to dismiss for lack of personal jurisdiction and for failure to state RICO and state-law claims; the Court considered prior dismissal and allowed Nunes one amendment (this is his third complaint in the case).
- The Court found personal jurisdiction proper under RICO’s nationwide-service provision (18 U.S.C. § 1965(d)) because defendants did not show extreme inconvenience and the RICO claim was colorable for jurisdictional purposes.
- On the merits the Court dismissed the RICO claims: Nunes failed to plausibly plead an association-in-fact enterprise, valid predicate acts (obstruction/witness tampering/wire fraud), a pattern (relatedness and continuity), RICO injury to business or property, and proximate causation.
- RICO conspiracy and injunctive-relief claims were dismissed as derivative; the Court declined supplemental jurisdiction over state-law tort claims; RICO claims were dismissed with prejudice (amendment futile) and Rule 11 sanctions were denied.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Personal jurisdiction under RICO’s nationwide service | §1965(d) authorizes service nationwide and jurisdiction over Fusion GPS and Simpson | RICO claim is implausible/insubstantial so plaintiff cannot invoke nationwide service; lack of contacts | Jurisdiction proper under §1965(d); defendants didn’t show extreme inconvenience and claim was colorable for jurisdictional use |
| Existence of an association‑in‑fact RICO enterprise | Fusion GPS, Simpson, Campaign for Accountability, McClatchy, Liz Mair and others formed an enterprise to obstruct justice and smear Nunes | Allegations are conclusory; show only parallel/independent acts, lack required purpose, structure, relationships, and longevity | Dismissed: complaint fails to plausibly allege a distinct enterprise (conclusory recitations; insufficient longevity, coordination) |
| Predicate acts, pattern (relatedness/continuity), injury, proximate cause | Ethics complaints, dossier creation/publication, and related acts constitute obstruction, witness tampering, wire fraud causing reputational and pecuniary injury to Nunes’ office | Alleged acts do not satisfy the criminal statutes cited; facts don’t show intent, use of wires in a fraud scheme, a pattern over time, injury to business/property, or proximate causation | Dismissed: no predicate acts adequately pleaded; no related/continuous pattern; alleged reputational/out‑of‑pocket harms are not RICO business/property injuries; proximate cause insufficient |
| RICO conspiracy, equitable relief, state torts, sanctions | Conspiracy and injunctive relief follow from substantive RICO claims; state torts arise from same facts; sanctions unwarranted | Conspiracy fails if substantive RICO fails; injunctive relief likely unavailable; seek Rule 11 sanctions for repeated, baseless filings | Conspiracy and injunctive claims dismissed; state claims dismissed (court declined supplemental jurisdiction); Rule 11 sanctions denied, but RICO claims dismissed with prejudice and no further amendment allowed |
Key Cases Cited
- Int'l Shoe Co. v. Washington, 326 U.S. 310 (establishes minimum contacts personal jurisdiction standard)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (due process and forum convenience in personal jurisdiction analysis)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (plausibility pleading standard)
- Ashcroft v. Iqbal, 556 U.S. 662 (legal conclusions not accepted; plausibility standard applied)
- H.J., Inc. v. Nw. Bell Tel. Co., 492 U.S. 229 (requirements for RICO pattern of racketeering activity)
- Sedima, S.R.L. v. Imrex Co., Inc., 473 U.S. 479 (civil RICO standing and elements)
- Reves v. Ernst & Young, 507 U.S. 170 (RICO requires defendant to have conducted enterprise affairs, not just their own)
- ESAB Grp., Inc. v. Centricut, Inc., 126 F.3d 617 (nationwide service under RICO and burden on defendants to show undue hardship)
- GE Inv. Private Placement Partners II v. Parker, 247 F.3d 543 (two predicate acts alone do not necessarily establish a RICO pattern)
- Slay's Restoration, LLC v. Wright Nat'l Flood Ins. Co., 884 F.3d 489 (RICO proximate-cause requirement)