Rosalba Cisneros v. Petland, Inc.
972 F.3d 1204
11th Cir.2020Background
- In December 2015 Rosalba Cisneros bought a Shih Tzu puppy (Giant) from Petland Kennesaw (a Petland, Inc. franchise); the puppy was diagnosed with parvovirus days later and died within about a week.
- Cisneros received a purchase contract promising ten-day disease warranties and free/post-purchase care at My Pets Vet (Dr. Waller); she also dealt with PAWSitive, identified by the store as a post-sale contact.
- She sued Petland (franchisor), Petland Kennesaw (franchisee), and PAWSitive asserting federal RICO violations (18 U.S.C. § 1962(c) and § 1962(d)) on behalf of a nationwide class, and a Georgia RICO claim for Georgia purchasers.
- Complaint alleged a nationwide conspiracy: franchisor control of franchisees, purchase of sick animals from puppy mills, payments to preferred vets to certify animals healthy, and PAWSitive and vets obfuscating illness post-sale.
- The district court dismissed the federal RICO claims under Rule 12(b)(6) and declined supplemental jurisdiction over the state RICO claim; on appeal the Eleventh Circuit affirmed dismissal of federal claims, held CAFA provided original jurisdiction, but remanded to instruct dismissal with prejudice of the state claim for the same substantive defects.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Existence of a RICO enterprise (association-in-fact) | Alleged franchisor, franchisees, preferred vets, and PAWSitive formed a nationwide association to sell sick pets for profit and cover up problems | Allegations describe ordinary franchise controls and fail to plead a shared, fraudulent common purpose or concrete directives from Petland or PAWSitive | Dismissed: plaintiff did not plausibly plead a common purpose or relationships amounting to a RICO association-in-fact distinct from the corporate defendants |
| Pattern of racketeering activity (predicate acts; Rule 9(b); continuity) | Multiple uses of mail/wire in December 2015 (credit-card charge, calls, AKC sale and mailings, vet calls) show repeated mail/wire fraud | Predicate acts are limited, many arise from a single transaction and short timeframe; pleading lumps defendants together and lacks particularity required by Rule 9(b) | Dismissed: pleaded acts are from a single episode, over an insufficient time to show continuity, and fail Rule 9(b) particularity for each defendant |
| RICO conspiracy (§ 1962(d)) | Conspiracy claim flows from the substantive RICO allegations of a nationwide scheme | You cannot conspire to violate RICO where the substantive RICO claim is not adequately alleged | Dismissed: conspiracy claim fails because the substantive RICO theory itself is inadequately pled |
| Georgia RICO and jurisdiction (CAFA / supplemental jurisdiction) | CAFA gives original federal jurisdiction over the proposed Georgia subclass; Georgia RICO claim parallels federal RICO but is an independent remedy | District court lacked reason to decline jurisdiction under CAFA; on merits Georgia RICO fails for same reasons as federal RICO | Court vacated district court's refusal to exercise jurisdiction (CAFA applies) but remanded with instructions to dismiss Georgia RICO with prejudice for the same pleading defects |
Key Cases Cited
- H.J. Inc. v. Nw. Bell Tel. Co., 492 U.S. 229 (1989) (association-in-fact and continuity requirements for RICO pattern)
- Boyle v. United States, 556 U.S. 938 (2009) (three structural features of association-in-fact enterprise)
- Bridge v. Phoenix Bond & Indem. Co., 553 U.S. 639 (2008) (gravamen of mail/wire fraud is the scheme to defraud)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility pleading standard)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading must permit reasonable inference of liability)
- Cedric Kushner Promotions, Ltd. v. King, 533 U.S. 158 (2001) (enterprise must be distinct from defendant)
- Jackson v. BellSouth Telecommunications, 372 F.3d 1250 (11th Cir. 2004) (continuity, threat of repetition, and conspiracy limits)
- Ray v. Spirit Airlines, Inc., 836 F.3d 1340 (11th Cir. 2016) (elements of a civil RICO claim)
- Almanza v. United Airlines, Inc., 851 F.3d 1060 (11th Cir. 2017) (12(b)(6) review standards)
- Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479 (1985) (RICO requires at least two predicate acts)
- Crawford v. Franklin Credit Mgmt. Corp., 758 F.3d 473 (2d Cir. 2014) (multiple mail/wire acts supporting a single transaction do not create a pattern)
- Efron v. Embassy Suites (P.R.), Inc., 223 F.3d 12 (1st Cir. 2000) (same caution about molding RICO patterns from single transaction)
- Feldman v. American Dawn, Inc., 849 F.3d 1333 (11th Cir. 2017) (Georgia RICO parallels federal RICO; failure under federal RICO warrants dismissal under Georgia statute)