126 F. Supp. 3d 1332
S.D. Fla.2015Background
- Plaintiffs sued Spirit Airlines under RICO alleging Spirit concealed a "Passenger Usage Fee" (PUF) on its website and in call-center transactions, presenting it amid "Taxes & Fees" so consumers would pay it believing it was an official tax.
- After multiple complaints and a dismissal of the Second Amended Complaint, the Court gave leave to amend and set a June 29, 2015 deadline for a Third Amended Complaint; Plaintiffs missed the deadline due to a miscalendaring, the case was closed, and Plaintiffs promptly moved under Rule 60(b)(1) and filed the Third Amended Complaint.
- The Court accepted that the missed filing was excusable neglect but considered whether allowing the Third Amended Complaint would be futile because it still would fail to state a RICO claim.
- Plaintiffs rely on an omission-based fraud theory analogous to Kemp v. AT&T, arguing nondisclosure of the PUF was material; Spirit argued the PUF was disclosed, lawful, and that plaintiffs failed to plead an enterprise and fraud with particularity.
- The Court found Plaintiffs’ allegations distinguishable from Kemp, held the Third Amended Complaint failed to allege a distinct RICO enterprise under § 1962(c), and concluded the mail/wire fraud predicates were not pled with the specificity required by Rule 9(b).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Timeliness / Rule 60(b)(1) excusable neglect | Missed deadline due to miscalendaring; filed promptly once aware | Missed deadline not excusable; even if excused, amendment would be futile | Court accepted excusable neglect but denied relief because amendment would be futile |
| Futility—failure to state a claim (Rule 12(b)(6) standard) | Third Amended Complaint cures prior defects; alleges omissions that constitute mail/wire fraud | Complaint still fails plausibly to allege fraud or RICO predicates | Complaint would be dismissed; leave to amend denied as futile |
| RICO enterprise distinctiveness under § 1962(c) | Alleged enterprise composed of Spirit, officers, Navitaire/Accenture, consultants, and marketing vendors | These are routine corporate agents/contractors; not a separate, independent enterprise | Plaintiffs failed to allege an enterprise that is structurally distinct from Spirit; RICO claim fails |
| Fraud pleading and reliance (Rule 9(b)) | Omission of conspicuous PUF notification caused Plaintiffs to pay; Kemp supports omission theory | PUF was labeled and disclosed; plaintiffs did not plead individualized website interactions, reliance, or amount of injury | Predicate mail/wire fraud not pled with particularity; reliance/injury inadequately alleged; obvious alternative explanations exist |
Key Cases Cited
- Kemp v. American Telephone & Telegraph Co., 393 F.3d 1354 (11th Cir. 2004) (omission can constitute mail/wire fraud where a duty to disclose exists)
- Boyle v. United States, 556 U.S. 938 (2009) (association-in-fact enterprise must have purpose, relationships, and longevity)
- Cedric Kushner Promotions, Ltd. v. King, 533 U.S. 158 (2001) (§ 1962(c) requires a person distinct from the enterprise)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (complaint must plead facts making liability plausible; court may reject inferences when obvious alternatives exist)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (plausibility standard; courts may use judicial experience and common sense)
- Ray v. Spirit Airlines, Inc., 767 F.3d 1220 (11th Cir. 2014) (private civil RICO requires pleading beyond unfair or deceptive practices)