Viking Construction Group LLC v. Satterfield and Pontikes Construction Inc.
2:17-cv-12838
E.D. La.Jan 12, 2018Background
- Plaintiffs (Viking, EEC, Novo, HCC, Perle, TBI) sued Satterfield & Pontikes (S&P) and CDW in Louisiana state court alleging a Louisiana RICO scheme to win federally funded construction contracts, inflate change orders, and defraud subcontractors.
- CDW, a Louisiana citizen (member Chris Walker), was alleged to have participated by subcontracting on the Jackson Barracks project and filing a verified state-court petition that contained allegedly false statements to remove Perle’s lien.
- Defendants removed the case to federal court asserting diversity jurisdiction; plaintiffs moved to remand arguing CDW’s Louisiana citizenship destroys complete diversity.
- Defendants contended CDW was improperly joined and thus its citizenship should be disregarded for removal; the central question became whether there was any possibility plaintiffs could recover against CDW under Louisiana RICO.
- The Court found the only alleged racketeering act by CDW was the March 22, 2011 verified petition (alleged false public record), but Perle knew of and litigated the injury in 2011; Louisiana RICO carries a five-year prescription period.
- Because the RICO claim against CDW accrued in 2011 and plaintiffs filed in 2017, the Court concluded claims against CDW are time-barred and dismissed CDW without prejudice; remand and sanctions were denied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether CDW was properly joined (affects diversity) | CDW is a real defendant whose Louisiana citizenship defeats diversity | CDW was improperly joined; plaintiffs have no possibility of recovery against CDW | CDW improperly joined; its citizenship ignored for diversity; removal proper |
| Whether plaintiffs stated a Louisiana RICO claim against CDW | CDW’s verified state-court petition was racketeering activity (false public record) | Even if petition qualifies, any claim is prescribed | RICO claim against CDW is prescribed; no possibility of recovery |
| Whether prescription (statute of limitations) bars CDW claim | Plaintiffs did not dispute prescription or assert tolling | Prescription applies—five-year period; injury discovered in 2011 | Claims arising from 2011 petition accrued then and are time-barred |
| Whether plaintiffs are entitled to costs, fees, or Rule 11 sanctions | Plaintiffs sought costs, fees, and Rule 11 sanctions against defendants | Removal was proper; procedural defects in plaintiffs’ Rule 11 attempt | Motion for costs and sanctions denied; plaintiffs failed to meet Rule 11 requirements |
Key Cases Cited
- Smallwood v. Illinois Cent. R.R. Co., 385 F.3d 568 (5th Cir. 2004) (standard for improper joinder inquiry and two methods to prove improper joinder)
- Guillory v. PPG Indus., Inc., 434 F.3d 303 (5th Cir. 2005) (courts look for any possibility plaintiff might recover; resolve factual disputes for plaintiff in improper-joinder analysis)
- Int'l Energy Ventures Mgmt., LLC v. United Energy Grp., Ltd., 818 F.3d 193 (5th Cir. 2016) (federal pleading standards apply in 12(b)(6)-style improper-joinder review)
- Brown v. Protective Life Ins. Co., 353 F.3d 405 (5th Cir. 2003) (elements of a civil cause of action under Louisiana RICO)
- Rotella v. Wood, 528 U.S. 549 (U.S. 2000) (injury-discovery rule governs accrual of civil RICO claims)