MEMORANDUM OF DECISION AND ORDER
Henry W. Mathon (“Mathon” or the “plaintiff”), proceeding pro se, commenced this action alleging, among other things, that the defendants violated 18 U.S.C. § 1961 et seq., the Racketeer Influenced and Corrupt Organizations Act (“RICO”). Presently before the Court is a motion to dismiss the amended complaint by all of the defendants for failure to state a claim pursuant to Federal Rules of Civil Procedure (“Fed. R. Civ.P.”) 12(b)(6). The defendants also request that the Court decline to exercise supplemental jurisdiction causes of action over the remaining causes of action which arise under state law pursuant to 28 U.S.C. § 1367(c)(3).
I. BACKGROUND
A. Factual Background
The facts are taken from the amended complaint and are taken as true for the purposes of this motion.
From 1999 through 2000, Mathon was employed by Neil Feldstein (“Feldstein”) and Arthur Salm (“Salm”) in various capacities at Feldstein’s car dealerships. Sometime in the year 2000, Mathon resigned from his employment due to “abuse” by “Feldstein and Salm’s right hand man.” Am. Compl. ¶ 34.
In early 2001, while Mathon was employed elsewhere, Feldstein contacted Ma-thon by phone and requested that Mathon return to working for him. Mathon agreed to work as a used car manager at Feldstein’s Honda dealership.
From mid-March, 2001 through the end of September, 2001, Mathon earned gross profits for the used car department in excess of $2 million and Mathon earned
After subsequent conversations with Feldstein and Henson by phone and in person, Mathon presented a plan relating to “Special Finance” in the automotive industry that he had been working on for the past three years. Feldstein and Henson subsequently told Mathon to put together a business plan for the “Special Finance Entity” in which Mathon would be a 40% partner.
The plaintiff claims that he entered into a “valid oral contract” with Feldstein, Henson and Salm by which the plaintiff would receive 40% and Feldstein, Salm and Honda would receive 60% of the newly created “Special Finance Entity.” Feldstein represented by phone and in person that the “Special Finance Entity” would be implemented into Toyota, Buick, and Lincoln and would result in Mathon earning more than $500,000 per year. On or about November 8, 2001, Mathon, on his own time, began developing a business plan, advertising copy and layout, and a budget and estimate of start up costs which he subsequently presented to Feldstein, Henson and Honda on December 12, 2001.
During this time, the plaintiff was upset by some “rumblings” about him, namely that “individuals who were under the control of the enterprise a/k/a Feldstein, Salm, Henson, Lomax, Honda, Toyota, Buick, Lincoln and John Does were using the wire to discredit [his] reputation.” Am. Compl. ¶ 51. Feldstein and Henson told Mathon to disregard what' he - had heard and instead “put his efforts into a new business that would benefit him as partner.” Am. Compl. ¶ 53.
Feldstein and Honda agreed to the timing and directed Mathon to hire employees to implement the “Special Finance Entity.” The “Special Finance Entity” produced gross sales in excess of $1 million with $120,000 in gross profit by February, 2002. However, Lomax, Feldstein, Henson, Salm and Honda took out 100% of the “expenses” out of the “Special Finance Entity” instead' of the 60% originally agreed. Am. Compl. ¶ 70.
In mid-February, 2002, Lomax presented Mathon with a promissory note and threatened Mathon that if he did not sign the note, Mathon would not receive 40% of the “Special Finance Entity.” Am. Compl. ¶ 71. Lomax used “coercion and constraint,” Am. Compl. ¶ 72, and Feldstein used “undue influence with persuasion, pressure- and short of actual force, but stronger than mere advice that so overpowered Mathon’s free will,” Am. Compl. ¶ 73, to force Mathon sign the promissory note. The plaintiff claims that Feldstein and Lomax used “extortion by obtaining ... the promissory note as it was induced by wrongful use of actual and threatened force, and fear under color of official right.” Am. Compl. ¶ 77.
After coercing the plaintiff to sign the promissory note, the defendants systematically “looked to push Mathon out from the profitable .. [Special Finance] Entity,” Compl. ¶ 79, by cutting the budget and terminating key employees who were of “varied ethnicities, female and age.” Am. Compl. ¶ 82. The plaintiff was subsequently fired “[b]y wire.” Am. Compl. ¶ 84. Mathon wanted to “take action,” Am. Compl. ¶ 86, but was warned by various people that Feldstein would “destroy him,”
id.,
in the automobile industry. Ma-thon indicates that he was also fearful of
On or about June, 2002, Lomax demanded payment of the promissory note by phone and mail. Mathon refused and maintained that he did not owe any money to Feldstein.
In mid-October, 2002, Worldwide Automotive, LLC, d/b/a Neil Honda served the plaintiff with a summons and complaint to collect on the promissory note. See Worldwide Automotive, LLC d/b/a Neil Honda v. Henry W. Mathon, Index No. 02/014206 (Sup.Ct. Nassau County 2002) (J. Raab) (the “State Court Action”). That summons and complaint were prepared by the defendant Ackerman, Levine, Cullen & Brickman, LLP (“ALC & B”) and signed by James A. Bradley (“Bradley”), an attorney with ALC & B.
Thereafter, Mathon spoke to Bradley and Levine, another attorney at ALC & B, by telephone about settling the case. Ma-thon claims that Bradley represented to and gave Mathon the impression that such telephone conversations served as an answer to the State Court Complaint. Because Mathon had not filed an answer, Neil Honda entered a default judgment and Mathon was served with a subpoena in aid of the enforcement of judgment. Ma-thon then moved by order to show cause to vacate the judgment. Several court appearances followed, where, outside the courtroom, Bradley allegedly threatened Mathon about “what Feldstein was capable of.” Compl. ¶ 115. Bradley sent a letter to Justice Raab, who was then the presiding Justice, requesting that he rule on Mathon’s motion to vacate the default judgment. Mathon immediately responded to Bradley’s letter.
Mathon claims that “[b]y strong armed tactics and outright coercion, threats, extortion and collection of an unlawful debt by the practices of the employees and associates of the Enterprise through a pattern of racketeering activities,” Am. Compl. ¶ 122, the defendants have failed and refused to honor any and all contracts with regard to the “Special Finance Entity.” Mathon further claims that the defendants’ pattern is “an effort to destroy Mathon at any cost.” Am. Compl. ¶ 124.
The complaint sets forth eight causes of action, including the following which arise under federal law: (1) civil RICO; (2) extortion and (3) employment discrimination. Presently before the Court is the defendants’ motion to dismiss the above mentioned federal causes of action pursuant to Rule 12(b)(6) for failure to state a claim. The defendants also request that, pursuant to 28 U.S.C. § 1367(c)(3), the Court decline to exercise supplemental jurisdiction causes of action over the remaining causes of action for breach of contract, ethical violations, emotional distress and harassment, and “intentional interference with a prospective business advantage” which purport to arise under state law.
II. DISCUSSION
A. The Standard
1. Rule 12(b)(6)
In reviewing a motion to dismiss for failure to state a claim under Rule 12(b)(6), the Court should dismiss the complaint only if it appears beyond doubt that the plaintiff can prove no set of facts in support of his complaint which would entitle him to relief.
King v. Simpson,
In addition, the Court must liberally interpret the complaint of a
pro se
plaintiff.
Haines v. Kerner,
B. Civil RICO
Under civil RICO, it is unlawful to participate in the conduct of an enterprise’s affairs through a pattern of racketeering or to conspire to violate any of the substantive provisions of Section 1962.
See
18 U.S.C. § 1962(c)
&
(d). 18 U.S.C. § 1964 creates a private right of action for individuals to enforce the RICO statute. Under this section, a plaintiff must prove an injury resulting from “(1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity.”
Sedima, S.P.R.L. v. Imrex Co., Inc.,
1. Pattern of Racketeering Activity
As stated above, a plaintiff must prove an injury resulting from, among other things, “a pattern of racketeering activity.” “Racketeering activity” is defined as certain acts indictable under Federal law, including the predicate mail and wire fraud, 18 U.S.C. §§ 1341, 1343, and violations of the Hobbs Act, 18 U.S.C. § 1951.
See
18 U.S.C. § 1961(1)(B). These predicate-acts must be .crimes under state or federal law,
United States v. Angelilli,
To establish a pattern of racketeering activity, “a plaintiff must plead at least two predicate acts, show that the acts are related and that they amount to, or pose a threat of, continuing criminal activity.”
H.J. Inc. v. Northwestern Bell and Telephone Co.,
The plaintiff alleges the predicate acts of mail fraud, wire fraud, and extortion. However, as set forth below, the plaintiff fails to properly plead these predicate acts.
a. Mail and Wire Fraud
Claims of mail and wire fraud must -comply with Fed.R.Civ.P. 9(b). This rule provides that “[i]n alb averments of fraud ... the circumstances constituting fraud ... shall be stated with particularity. Malice, intent, knowledge, and other conditions of mind of a person may be averred generally.” When the predicate
i. Mail Fraud
As stated above, allegations of mail fraud must be made with the particularity required by Federal Rule of Civil Procedure 9(b). In discussing the predicate act of mail fraud, the Second Circuit has stated that
Pursuant to this higher pleading standard, the “complaint must adequately specify the statements it claims were false or misleading, give particulars as to the respect in which the plaintiffs contend the statements were fraudulent, state when and where the statements were made, and identify those responsible for the statements.” ... Plaintiffs asserting mail fraud must also identify the purpose of the mailing within the defendant’s fraudulent scheme.
McLaughlin v. Anderson,
The crux of mail fraud and wire fraud is “an intent to defraud.”
United States v. Bouyea,
The amended complaint alleges three acts by which mail was used: (1) In June, 2002, Lomax sent a demand for payment on the promissory note; (2) the summons and complaint for payment on the promissory note was sent by mail; and (3) the ALC & B law firm sent a letter to Justice Raab requesting that he rule on the plaintiffs order to show cause. Each of these mailings are directed to the defendants desire to be paid on the promissory note and relates to the State Court Action. In the Court’s view, none of these mailings constitute a fraudulent representation.
Moreover, the plaintiff fails to satisfy the heightened pleading requirement set forth in Fed.R.Civ.P. 9(b) as the plaintiff fails to set forth “the content of the items mailed and specify how each of the items were false and misleading.”
Official Publications, Inc. v. Kable News Co.,
Accordingly, the plaintiff fails to allege the predicate act of mail fraud.
ii. wire fraud
The elements of wire fraud are (1) a scheme to defraud and (2) use of interstate wire communication to further that scheme.
United States v. Lemire,
However, the plaintiff fails to identify the dates that these alleged conversations take place, where the phone calls took place and that during these phone calls, the defendants knowingly made false representations to the plaintiff. In addition, where, as here “all parties are New York residents, ^all telephone calls are presumed to be intrastate .and, absent any indication otherwise, the predicate act of wire fraud is not stated.’ ”
Id.
(quoting
McCoy v. Goldberg,
Given that any claims of fraud, including RICO claims based on mail and wire fraud, must be plead with particularity under Rule 9(b),
Center Cadillac, Inc. v. Bank Leumi Trust Co. of New York,
b. Extortion
A plaintiff claiming a Hobbs Act violation, 18 U.S.C. § 1951, as a predicate act in a civil RICO claim must establish that the defendant “obstructed], delay[ed], or affect[ed] commerce or the movement of any article or commodity in commerce, by ... extortion or attempted] or conspire[d] so to do, or committed] or threatened] physical violence to any person or property in furtherance of a plan or purpose to do [so].” 18 U.S.C. §
1951; see also McLaughlin v. Anderson,
Mathon claims that Lomax presented Mathon with a promissory note and threatened Mathon that if he did not sign the note, Mathon would not receive 40% of the “Special Finance Entity.” Am. Compl. ¶ 71. The plaintiff further claims in conclusory language that Feldstein and Lomax used “extortion by obtaining ... the promissory note as it was induced by wrongful use of actual and threatened force, and fear under color of official right” Am. Compl. ¶ 77, and that through “extortion”, “strong armed tactics and outright coercion [and] threats,” the defendants refused to honor the contracts with regard to the
Mathon’s conclusory allegations concerning the conduct of Feldstein and Lomax conduct with respect to the promissory note do not properly allege the predicate act of extortion. Rather, Mathon’s allegations seem to demonstrate “hard bargaining” by Lomax and Feldstein.
See Center Cadillac, Inc. v. Bank Leumi Trust Co.,
The amended complaint fails to allege the date the alleged “extortion” occurred, the nature of the alleged threats and coercion, an effect on interstate commerce, and the purpose of the defendants alleged actions.
Zito v. Leasecomm Corp.,
No. 02 Civ. 8074,
Because the amended complaint fails to allege a “pattern of racketeering activity,” the plaintiff fails to set forth a cause of action under civil RICO.
See Agency Holding Corp. v. Malley-Duff & Assoc., Inc.,
C. Extortion
In addition to the above mentioned alleged predicate acts of extortion,
see
B(l)(b), the plaintiff also asserts a separate cause of action for extortion under 18 U.S.C. § 871. Similarly, Mathon’s cause of action under 18 U.S.C. § 871 must also fail as “extortion is a federal crime ... [and] there is no federal statute creating a private civil cause of action for extortion.”
Schwartz v. Adler,
No. 84 Civ. 2891,
D. Employment Discrimination
' In Count Eight of the amended complaint, the plaintiff alleges that the defendants “in malicious, discriminatory actions violated Mathon’s rights secured by Federal Employment.” Am Compl. ¶ 171. In particular, the amended complaint also alleges that the defendants terminated “key employees” who were of “varied ethnicities, female and age.” Compl. ¶ 82. Although an employment discrimination complaint need not contain specific facts establishing a
prima facie
case under the framework of
McDonnell Douglas Corp. v. Green,
Thus, without more, these bare allegations cannot support a claim for employment discrimination under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e
et seq.
or any other federal or New York State Statute.
See Hilska,
E. New York State Law Causes of Action
The amended complaint includes New York State common law causes of action for breach of contract, ethical violations, emotional distress and harassment, and “intentional interference with a prospective business advantage.” Am. Compl. p. 25. Having dismissed all of the plaintiffs federal claims, the Court declines to exercise supplemental jurisdiction over the plaintiffs state law claims.
See Arroyo v. City of New York, et al.,
No. 99 Civ. 1458,
F. Leave to Amend
Rule 15(a) of the Federal Rules of Civil Procedure states that a party shall be given leave to replead when justice so requires.
Branum v. Clark,
The Court notes with approval Judge Leisure’s thoughtful comments in
Spier v. Erber,
No. 89 Civ. 1657,
It has become an all too common practice for litigants granted leave to replead to make only minor changes in the original complaint based on an overly restrictive reading of the dismissing court’s order, prompting a second motion to dismiss. An amended complaint which fails to replead with sufficient particularity after a finding of lack of specificity may well be regarded by the Court as a frivolous filing in violation of Fed. R.Civ.P. 11. Conversely, a renewed Rule 9(b) motion after an adequate and thorough repleading can also be viewed as frivolous.
III. CONCLUSION
Based on -the foregoing, it is hereby
ORDERED, that the defendants motion to dismiss the amended' complaint is granted in its entirety; and it is further
ORDERED, that the plaintiff is granted leave to file an amended complaint within thirty days from the date of this order and that the failure to file within this time period will render the dismissal of all of the plaintiffs claims with prejudice, and it is further
ORDERED, that the Clerk of the Court is directed to serve a copy of this Order on the plaintiff, Henry W. Mathon, by regular first class mail and by certified mail, return receipt requested at the address Ma-thon indicated on his amended complaint: 830 Anthony Drive, Lindenhurst, New York 11757.
SO ORDERED.
