Sasmor v. Meisels
708 F. App'x 728
| 2d Cir. | 2017Background
- Jon Sasmor, pro se tenant at 287 Franklin Ave. (a Brooklyn rooming house), sued owners, managers, and others under civil RICO (18 U.S.C. § 1964) and NY GBL §§ 349, 350, alleging a scheme of money laundering, mail/wire fraud, and extortion related to his tenancy and eviction.
- Sasmor claimed he paid rent in May 2010 because of defendants’ misrepresentations/pressure and later incurred litigation expenses defending eviction proceedings that defendants wrongfully pursued.
- Defendants moved for summary judgment; the District Court granted summary judgment for defendants, finding Sasmor failed to show a cognizable RICO injury and alternatively failed to prove an enterprise; the court declined supplemental jurisdiction over state-law claims.
- On appeal, the Second Circuit reviewed summary judgment de novo and affirmed, focusing on causation and whether Sasmor’s harms were proscribed RICO injuries.
- The Court found no evidence that (a) Sasmor would have paid different rent or refused to move in but for defendants’ alleged fraud, or (b) the eviction litigation amounted to mail fraud or extortion that proximately caused his litigation expenses.
- The Court also affirmed the denial of additional bank-record discovery as within the district court’s discretion because it was unlikely to produce evidence relevant to Sasmor’s RICO injury claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Sasmor suffered an injury to business or property proximately caused by RICO predicate acts | Sasmor: paid rent and incurred eviction-defense costs because defendants’ wire/mail fraud and extortion forced payment and litigation | Defendants: payment and litigation costs were not caused by any actionable RICO conduct; misstatements in litigation are litigation positions, not fraud/extortion | No RICO injury; summary judgment for defendants affirmed |
| Whether misrepresentations about room legality and rent direction constitute RICO predicate causing damages | Sasmor: misrepresentation about legality induced him to move in and pay rent; misdirection of rent check constituted fraud | Defendants: no evidence Sasmor would have paid less or not moved in; rent was inexpensive and he lived months rent-free | Misrepresentation did not establish but-for or proximate causation for a RICO injury |
| Whether eviction proceedings and defendants’ litigation positions amounted to mail fraud or extortion | Sasmor: eviction filings and false capacity claims by Ronald Henry Land Trust were fraudulent and extortive, causing litigation costs | Defendants: state-court litigation positions—even unsuccessful ones—are not mail fraud or extortion absent a scheme to defraud or wrongful use of force | Court: litigation positions do not equal mail fraud/extortion; no RICO causation for litigation expenses |
| Whether district court abused discretion denying discovery of bank records | Sasmor: bank records would show money laundering and support RICO claims | Defendants: discovery unlikely to yield evidence of RICO injury and would unduly extend deadlines | No abuse of discretion; discovery unlikely to affect the RICO-injury determination |
Key Cases Cited
- Litton Indus., Inc. v. Lehman Bros. Kuhn Loeb Inc., 967 F.2d 742 (2d Cir. 1992) (standard of de novo review for summary judgment on appeal)
- UFCW Local 1776 v. Eli Lilly & Co., 620 F.3d 121 (2d Cir. 2010) (elements of a civil RICO claim: substantive violation, injury to business or property, and causation)
- Holmes v. Sec. Investor Prot. Corp., 503 U.S. 258 (U.S. 1992) (but-for and proximate causation in civil RICO claims)
- Fed. Treasury Enter. Sojuzplodoimport v. SPI Spirits Ltd., 726 F.3d 62 (2d Cir. 2013) (district court discretion to decline supplemental jurisdiction after dismissal of federal claims)
- Jackson v. Fed. Express, 766 F.3d 189 (2d Cir. 2014) (standard for reversal of district court discovery rulings)
- Deck v. Engineered Laminates, 349 F.3d 1253 (10th Cir. 2003) (meritless litigation is not extortion under § 1951)
- Coach Leatherware Co. v. AnnTaylor, Inc., 933 F.2d 162 (2d Cir. 1991) (sua sponte summary judgment against defaulting party harmless when issues identical to moving party’s)
- Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61 (2d Cir. 1981) (district court may require proof of facts to determine liability despite default)