GREENPEACE, INC., Plaintiff, v. The DOW CHEMICAL COMPANY, et al., Defendants.
Civil Action No. 10-2037 (RMC).
United States District Court, District of Columbia.
Sept. 9, 2011.
808 F. Supp. 2d 262
ROSEMARY M. COLLYER, District Judge.
trict must be entered on the plaintiff‘s claims of negligent supervision, training, and hiring.
Ms. Chen‘s contention that the District is vicariously liable for some negligent conduct on the part of Officer Ha, Monk, and/or Spears must fail because Ms. Chen has not articulated any theory under which the alleged actions of any of those officers could be held to constitute negligence, as opposed to an intentional or constitutional tort. See Chen v. District of Columbia, 256 F.R.D. at 273. Judgment for the defendant will be entered with respect to all of plaintiff‘s claims against the District of Columbia.
V. CONCLUSION
For the foregoing reasons, the motion for summary judgment filed by the District of Columbia and Nicole Ha will be granted in part and denied in part. Judgment will be entered for the defendants with respect to all claims against the District of Columbia and plaintiff‘s assault and battery claim against Officer Ha.
SO ORDERED.
Michael J. Lyle, Steven A. Tyrrell, Weil, Gotshal & Manges, LLP, Matthew H. Kirtland, Richard C. Smith, Fulbright & Jaworski, L.L.P., Dana E. Hill, Thomas A. Clare, Kirkland & Ellis LLP, Tina M. Maiolo, Paul J. Maloney, Carr Maloney, P.C., Abid Riaz Qureshi, Gabriel K. Bell, John S. Cooper, Roger Steven Goldman, Latham & Watkins LLP, Washington, DC, David J. Lender, James W. Quinn, Jennifer M. Oliver, Weil, Gotshal & Manges, L.L.P., New York, NY, Brynja M. Booth, David R. Thompson, Roy B. Cowdrey, Jr., Cowdrey Thompson, P.C., Easton, MD, W. Scott Sonntag, Law Offices of W. Scott Sonntag, P.A., Greenbelt, MD, for Defendants.
MEMORANDUM OPINION
ROSEMARY M. COLLYER, District Judge.
Greenpeace, Inc. (“Greenpeace“) accuses targets of its environmental campaigns and others of civil racketeering in connection with alleged corporate espionage intended to interfere with those campaigns. However, Greenpeace‘s Complaint fails to establish a direct connection between the alleged federal criminal acts and any injury Greenpeace might have suffered. The racketeering counts will be dismissed for failure to state a claim. The Court declines to exercise supplemental jurisdiction over the remaining claims, which are all cognizable under state law. Accordingly, the Complaint will be dismissed.
I. Facts
Greenpeace brings its Complaint against The Dow Chemical Company (“Dow“), Sasol North America, Inc. (“Sasol“), Ketchum, Inc. (“Ketchum“), Dezenhall Resources, Ltd. (“Dezenhall“) (collectively the “Corporate Defendants“); and Timothy Ward, Jay Arthur Bly, Michael Mika, and George Ferris (collectively the “Individual Defendants“) for compensatory, statutory, and punitive damages.
Greenpeace is a nonprofit corporation headquartered in Washington, D.C. and incorporated under the laws of California. Founded in 1971, Greenpeace is one of the oldest and largest environmental organizations in the world. It campaigns to protect the oceans and ancient forests and to end toxic pollution, global warming, nuclear hazards, and genetic engineering. Compl. ¶ 7 [Dkt. # 1].
Dow sells chemical, plastic, and agricultural products and services. Id. ¶ 8. As relevant here, Sasol (then CONDEA Vista)1 made ethylene dicloride and vinyl chloride at a manufacturing facility in Lake Charles, Louisiana. Id. ¶ 9. Ketchum and Dezenhall (then Nichols-Dezenhall)2 are public relations firms that were hired by Dow and Sasol, respectively, to aid in securing information regarding environmental campaigns affecting the compa-nies’
Greenpeace alleges that, between 1998 and 2000, all Defendants conspired to and did surveil, infiltrate, and steal confidential information from Greenpeace with the intention of preempting, blunting, or otherwise thwarting its environmental campaigns. It also alleges that BBI, Sasol, Dezenhall, and the Individual Defendants fraudulently infiltrated an environmental group that was an ally of Greenpeace, the Calcasieu League for Environmental Action Now (“CLEAN“), and used email to forward, i.e., “wire,” information about Greenpeace to BBI and, ultimately, Dezenhall and Sasol. Id. ¶¶ 33, 172(b).
During the relevant period, Greenpeace was involved in campaigns that targeted the practices or products of Sasol and Dow, specifically Sasol‘s vinyl chloride production, which allegedly emitted toxic chemicals into the Lake Charles region of Louisiana, and Dow‘s manufacturing activities, which create dioxin, as well as its products containing genetically modified organisms. Id. ¶ 18. In its efforts in Louisiana, Greenpeace was allied with CLEAN. Id. ¶ 33. In response to Greenpeace‘s campaigns, the Corporate Defendants retained BBI to gather and collect information regarding Greenpeace in surreptitious and allegedly illegal ways. The Complaint identifies two different conspir-acies involving BBI and the Individual Defendants to secure confidential information from Greenpeace, the first involving Sasol and Dezenhall and the second involving Dow and Ketchum. Id. ¶ 55. Greenpeace became aware of these activities through a 2008 article in Mother Jones that used information made available by a former BBI principal to expose the Defendants’ alleged illegal activities. Id. ¶¶ 24, 108.
According to the Complaint, BBI identified Greenpeace as a “target” and, in a 1998 memorandum, described its efforts to monitor “environmental activist groups,”3 through which it was able to provide “insight into the scheduling of environmental protests and actions of the group, corporate targets, the tracking of maritime cargo by the group, and internal political issues of the group.” Id. ¶ 122. As part of its monitoring activity, BBI is alleged to have broken into Greenpeace‘s offices, stolen its confidential documents, and engaged in physical and electronic surveillance of Greenpeace and its ally organizations. The Corporate Defendants allegedly paid for these activities. Id. ¶ 50. For example, between October 1998 and July 1999, Dezenhall paid BBI approximately $150,000 to work on the “U Street Project,” which provided information to Sasol. Id. ¶¶ 52-53. The objective of this project was to gather information from Greenpeace “about the organization‘s campaigns against the manufacture and sale of plastics containing polyvinyl chloride; its donors and funding sources; its connections with the United States Attorney General and other regulators in federal government; and its political support.” Id. ¶ 52. In addition, it is alleged that Sasol paid BBI directly for the “Lake Charles Project,” through which BBI
Defendants allegedly used various tactics in order to gain Greenpeace‘s confidential information. In particular, BBI allegedly obtained documents and records from dumpsters4 and recycling bins at Greenpeace‘s offices and also acquired documents through false pretenses, a practice defined by Greenpeace as “D-lines.”5 Id. ¶ 26. Each instance of purloining Greenpeace‘s internal, confidential documents allegedly “involved trespassing on private property and stealing documents where Greenpeace had a reasonable expectation of privacy.” Id. ¶ 127. Such incursions occurred “well over a hundred times over at least a two year period.” Id. (emphasis omitted). The Individual Defendants are alleged to have “personally directed and/or conducted [such activities] at Greenpeace‘s offices in Washington, D.C.” Id. ¶ 26. Defendants, directly and/or through their agents, moved documents stolen through these activities from the District of Columbia to Maryland.6 Id. ¶ 154.
The Individual Defendants and/or their agents are also alleged to have employed extensive physical surveillance, infiltration, and intrusion to obtain information from and about Greenpeace on behalf of the conspirators, such as: 1) sending a spy to pretend to apply for a position as a Green-peace volunteer who used the opportunity to tour its premises and gather information; 2) hiring an individual to infiltrate Greenpeace‘s ally in Louisiana, CLEAN, who eventually became a CLEAN board member and used his position to forward confidential information to BBI; and 3) breaking into Greenpeace‘s U Street offices and obtaining highly confidential personnel, financial and employment records. Id. ¶¶ 33-35. The Complaint also states that Individual Defendants Bly, Mika, Ferris, and/or their agents engaged in unspecified amounts of electronic surveillance, including wiretapping and computer hacking on behalf of the conspirators. Id. ¶ 36. In addition, BBI allegedly obtained records of calls made to and from cell phones leased by Greenpeace for use in Louisiana. Id. ¶ 69. As a result of these activities, BBI is alleged to have obtained a variety of confidential, internal Greenpeace documents, including:
campaign planning documents; confidential donor letters and records of contributions; internal communications; confidential legal memoranda; privileged attorney-client communications; financial reports, balance sheets and budgets; passwords for private electronic mailing lists; Greenpeace credit card account numbers; and highly-sensitive personal information about Greenpeace employees such as Social Security Numbers, personal bank account statements and employment agreements.
Id. ¶ 46. Allegedly, the confidential information obtained by BBI was generally
Greenpeace filed suit on November 29, 2010, after it was alerted of these activities through the 2008 Mother Jones article.7 Against all Defendants, it brings common law or state statutory claims for trespass, invasion of privacy by intrusion, conversion, trespass to chattel, and misappropriation of trade secrets under the District of Columbia Uniform Trade Secrets Act,
Specifically, the Complaint alleges a pattern of racketeering activity composed of “multiple predicate acts consisting of the transportation of stolen goods in violation of
All Defendants move to dismiss the Complaint for failure to state a claim under
II. Legal Standard
A. Motion to Dismiss
A motion to dismiss pursuant to
A court must treat the complaint‘s factual allegations as true, “even if doubtful in fact.” Twombly, 550 U.S. at 555. However, a court need not accept as true legal conclusions set forth in a complaint. Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. “While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations.” Id. at 1950.
In order to survive a motion to dismiss, a complaint must contain sufficient factual matter to state a claim for relief that is “plausible on its face.” Twombly, 550 U.S. at 570. “The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Iqbal, 129 S.Ct. at 1949. When a plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged, then the claim has facial plausibility. Id.
B. Civil RICO
A RICO violation under
RICO specifically allows civil enforcement:
[A]ny person injured in his business or property by reason of a violation of section 1962 of this chapter [18] may sue therefor in any appropriate United States district court and shall recover three fold the damages he sustains and the cost of the suit, including a reasonable attorney‘s fee. ...
In order to state a claim under civil RICO, injured parties must show that the RICO predicate offense was not only the “but for” cause of their injury, but the proximate cause as well. Holmes v. Securities Investor Protection Corp., 503 U.S. 258, 268, 112 S.Ct. 1311, 117 L.Ed.2d 532 (1992); Hemi Grp., LLC v. City of New York, 559 U.S. 1, 130 S.Ct. 983, 989, 175 L.Ed.2d 943 (2010). Proximate cause requires “some direct relation between the injury asserted and the injurious conduct alleged.” Holmes, 503 U.S. at 268. “A link that is too remote, purely contingent, or indirect is insufficient.” Hemi Grp., 130 S.Ct. at 989 (internal citations omitted).
III. Analysis
The Complaint fails to establish that Defendants’ RICO predicate acts were the proximate cause of Greenpeace‘s injuries. In this case, the injuries that allegedly stem from Defendants’ interstate transportation of stolen goods in fact stem from underlying violations of District of Columbia law that do not constitute racketeering activity for the purposes of
A. Counts Six and Eight (Interstate Transportation of Stolen Goods)
Greenpeace alleges that BBI, as agent of the Corporate Defendants, illicitly obtained Greenpeace‘s confidential documents and transported them across state lines. Compl. ¶ 154. As a result, in Counts Six and Eight of the Complaint, Greenpeace claims that all Defendants violated
Greenpeace describes three injuries arising from Defendants’ alleged activities: reduction in the value of its intellectual property, interference with its business of environmental campaigns, and costs of investigation. Id. ¶¶ 157, 175. It states: “Greenpeace‘s confidential documents—including work-product relating to its advocacy, legal memoranda, financial records and reports, and personal employee information—were stolen.” Pl.‘s Opp‘n to Mots. to Dismiss by Defs. Sasol, Dezen-hall
A RICO violation requires a direct connection between the predicate criminal act and the injury. Hemi Grp., 130 S.Ct. at 989; Anza v. Ideal Steel Supply Corp., 547 U.S. 451, 460, 126 S.Ct. 1991, 164 L.Ed.2d 720 (2006) (“When a court evaluates a RICO claim for proximate causation, the central question it must ask is whether the alleged violation led directly to the plaintiff‘s injuries.“). To maintain its RICO cause of action, Greenpeace must directly tie its injuries to the movement of its documents across state lines, i.e., from the District to Maryland. But, as Greenpeace admits, “[t]he diminished value of [its] property was a direct result of its theft and dissemination to a wide audience,” Pl.‘s Opp‘n at 20, not its interstate transportation.
Greenpeace‘s argument that Defendants’ RICO violations were “theft and interstate transportation of property,” Pl.‘s Opp‘n at 20, is inaccurate. “Theft” is a violation of the District of Columbia‘s criminal law, see, e.g.,
Greenpeace resists this conclusion. It argues that “there are no intervening steps between Defendants’ misconduct and the injuries alleged,” and that “[t]he theft of Greenpeace‘s property, and attendant reduction in its value, was a direct result of the D-Lines, infiltration, and surveillance perpetrated against it.” Pl.‘s Opp‘n at 21. Assuming that each of these allegations is true, as the Court must when considering a motion to dismiss, Leatherman v. Tarrant Cnty. Narcotics Intelligence & Coordination Unit, 507 U.S. 163, 164, 113 S.Ct. 1160, 122 L.Ed.2d 517 (1993), they continue to revolve around “theft” of goods and intelligence and not the alleged offense of interstate transportation of stolen goods.
Greenpeace recognizes that “the compensable injury necessarily is the harm caused by the predicate acts.” Pl.‘s Opp‘n to Mots. to Dismiss by Defs. Dow, Ketchum, and Individual Defendants at 21
It appears Greenpeace believes that because federal law makes it a crime to transport stolen goods across state lines, it can federalize the theft itself without regard to interstate transportation. Not so. Such an analysis offends the principles of federal-state relations; RICO was not intended to federalize offenses against state law where its requirements are not met. See HMK Corp. v. Walsey, 828 F.2d 1071, 1076 (4th Cir. 1987) (explaining that to permit plaintiffs that are not victims of a pattern of racketeering within the meaning RICO to bring federal claims “would deprive states of jurisdiction over local controversies in a way Congress never intended“); Gross v. Waywell, 628 F.Supp.2d 475, 482 (S.D.N.Y. 2009) (noting that an exercise of federal court jurisdiction in cases that fall short of RICO‘s substantive threshold implicates questions of federalism and would threaten to “federalize garden-variety state common law claims“). A theft committed in the District of Columbia violates the tranquility of its own citizens, not necessarily that of the citizens of neighboring states. When, however, a thief transports his booty from one state to another to sell there, neither state can fully prosecute because parts of the crime occurred in different jurisdictions. See United States v. Sheridan, 329 U.S. 379, 385, 67 S.Ct. 332, 91 L.Ed. 359 (1946) (explaining that in criminalizing interstate transportation of stolen goods Congress “contemplated coming to the aid of the states in detecting and punishing criminals whose offenses are complete under state law, but who utilize the channels of interstate commerce to make a successful getaway and thus make the state‘s detecting and punitive processes impotent“). Federal law addresses this issue, but it does not change the specific nature of the federal crime: knowingly transporting stolen goods across state lines. It is the knowing transportation of stolen goods, not the theft itself, that is a federal crime.
Even if Greenpeace were able to establish a link between its injuries and the interstate transportation of its confidential documents, its claim would still suffer because it fails to plead that Defendants engaged in the interstate transportation of stolen goods worth at least $5,000, as required by
B. Count Eight (Wire Fraud)
In addition to violations of
Here, too, Greenpeace faces an insurmountable hurdle arising from the requirement of proximate cause because the direct victim of Defendants’ alleged actions was a third party. Greenpeace stands at a distance from the criminal activity in question and fails to allege a direct link between the injury asserted and the alleged predicate acts as the Supreme Court instructs. See Holmes, 503 U.S. at 269-70, 112 S.Ct. 1311.
Although directness of relationship is not the sole requirement of [RICO] causation, it is one of its central elements for a variety of reasons. First, the less direct an injury is, the more difficult it becomes to ascertain the amount of a plaintiff‘s damages attributable to the violation, as distinct from other, independent factors. Second, quite apart from problems of proving factual causation, recognizing claims of the indirectly injured would force courts to adopt complicated rules apportioning damages among plaintiffs removed at different levels of injury from the violative acts, to obviate the risk of multiple recoveries. And, finally, the need to grapple with these problems is simply unjustified by the general interest in deterring injurious conduct, since directly injured victims can generally be counted on to vindicate the law as private attorneys general, without any of the problems attendant upon suits by plaintiffs injured more remotely.... [T]hese reasons apply with equal force to suits under
Id. (internal citations omitted). Therefore, “a plaintiff who complained of harm flowing merely from the misfortunes visited upon a third person by the defendant‘s acts was generally said [at common law] to stand at too remote a distance to recover.” Id. at 268-69, 112 S.Ct. 1311. This precise analysis was adopted and applied in Holmes to civil RICO claims. Id. at 270, 112 S.Ct. 1311.
Greenpeace complains that defendants Sasol, Dezenhall, and the Individual Defendants violated RICO through “wire fraud.” The relevant statute states:
Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire ... any writings ... for the purpose of executing such scheme or artifice, shall be fined....
The Anza analysis illuminates the proximate cause issues in this matter. Like the State of New York, it was CLEAN that was defrauded and dealt with under false pretenses,12 not Greenpeace. Greenpeace alleges that Mr. Rogers used wires to forward confidential e-mails and reports related to Greenpeace to BBI, see Compl. ¶ 172(b), but this confidential information belonged to CLEAN, not Greenpeace. As in Anza, the difficulties in quantifying damage stemming from actions remote to the plaintiff are present here. The damage suffered by Greenpeace from Mr. Rogers‘s alleged monitoring and forwarding
The distance between the scheme perpetrated against CLEAN and the alleged harms that Greenpeace suffered is too great. This Court can find no direct link between the actions against CLEAN and Greenpeace‘s RICO claims. Accordingly, Greenpeace‘s civil RICO claims based upon Defendants acts of wire fraud will be dismissed.
C. Counts Seven and Nine (Conspiracy)
Because Greenpeace fails to state a claim under
IV. Conclusion
For the reasons stated above, the RICO allegations in Counts Six through Nine of the Complaint will be dismissed because they fail to state a claim. The Court declines to extend supplemental jurisdiction over the state-law claims otherwise pled. See
A memorializing Order accompanies this Memorandum Opinion.