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Smith v. Jones

December 5, 2008

DONALD E. SMITH, PLAINTIFF,
v.
JONES, GREGG, CREEHAN & GERACE, LLP., RICHARD B. SANDOW, ESQ., DAVID M. HUNTLEY, ESQ., BYRON W. KING, ESQ., JOHN P. CORCORAN, JR., ESQ., RAYMOND M. ROBERTS, ESQ., MICHAEL A. CARR, ESQ., ANTHONY W. SAVEIKIS, ESQ., STOCKEY & KELLY, WILLIAM E. STOCKEY, ESQ., THE DOLAN GROUP, LLC., JOHN S. DOLAN, CPA, DAGNON & DENNEHY, JOHN M. DAGNON, CPA, PNC FINANCIAL SERVICES GROUP, JOEL GOLD, ESQ., LAZARUS M. PALNICK, ESQ., CHARLES DATZ, CLYDE H. SLEASE, ESQ., THOMAS E. CUNNINGHAM, BERNADETTE J. CUNNINGHAM, CHRISTIN S. MILLER, DAVID K. MILLER, RICHARD J. BARKO, AND STACIE L. BARKO, DEFENDANTS.



The opinion of the court was delivered by: Terrence F. McVerry United States District Court Judge

MEMORANDUM ORDER

Now pending before the Court are numerous Motions to Dismiss the Amended Complaint pursuant to Fed. R. Civ. P. 12(b)(6) and/or Motions for a More Definite Statement pursuant to Fed. R. Civ. P. 12(e) filed by all Defendants (Document Nos. 83, 88, 90, 92, 96, 98, 100, 102, 103, 104, 130, 132, 133).*fn1 Also pending are PLAINTIFF'S MOTION FOR STAY PENDING PARALLEL PROCEEDINGS BY THE FEDERAL BUREAU OF INVESTIGATION (Document No. 85), Plaintiff's MOTION TO STRIKE AND REMOVE ATTORNEY ROBERT O. LAMPL FOR CONFLICT OF INTEREST (Document No. 136) and Plaintiff's MOTION FOR A HEARING AT DOCKET NO. 85 (Document No. 138). Plaintiff has filed responses to the Defendants' motions (Document Nos. 105, 134, 135, 137, 139, 140, 142) and they are ripe for disposition.

Procedural History

Plaintiff Donald E. Smith is pro se. In a Memorandum Order dated March 27, 2008, as part of its evaluation (and ultimate denial) of Plaintiff's request to appoint counsel, the Court performed a preliminary analysis of the only two claims in the original complaint that may have supported the exercise of original subject-matter jurisdiction in this Court. In relevant part, the Court stated:

The Court harbors significant doubts as to Plaintiff's ability to overcome the threshold hurdle [i.e., whether the claimant's case has some arguable merit in fact and law]. The Complaint is extraordinarily lengthy and its chronological allegations are exhaustive. However, the gravamen of the complaint concerns control over a closely-held corporation, which Defendants allegedly drove into bankruptcy. . . . As explained by the Supreme Court in Bell Atlantic Corp. v. Twombly, --- U.S. ----, 127 S.Ct. 1955, 1964 (2007), Plaintiff must state a "plausible" claim for relief.

There are four basic elements that a plaintiff must establish to prove any civil RICO action: (1) the existence of a RICO enterprise; (2) the existence of a pattern of racketeering activity; (3) a nexus between the defendant, the pattern of racketeering activity or the RICO enterprise; and (4) resulting injury to the plaintiff's business or property. Rosenberg v. JCA Assoc., 2007 WL 1038893 (D.N.J. 2007). Because Plaintiff is alleging predicate acts based on fraud, the RICO claim must be stated with particularity. Fed. R. Civ. P. 9.

The instant Complaint is flawed in numerous respects. It does not identify the RICO "enterprise." Although unclear, Plaintiff does not appear to be alleging that Total Industrial and Packaging Corporation ("TIP"), of which he is or was a 49% owner, is the "enterprise," but rather, that TIP is the victim of the alleged RICO scheme. Similarly, although ¶¶ 243, 246-249 attempt to generally identify eight predicate acts under RICO, the complaint does not set forth with particularity the conduct by any specific defendant which would satisfy all the elements of a specific predicate offense. Such conduct as preparing loan applications, taking an entity into bankruptcy, not signing a Forbearance Agreement or threatening to initiate litigation, without more, is not inherently unlawful. . . . Most troubling, the Complaint names approximately 25 defendants, yet the operative RICO allegations do not specify which defendant or defendants engaged in any particular activity. Thus, the "nexus" element is completely lacking as to each named Defendant.

At this stage of the case, the Court need only preliminarily assess the relative merits of the claim and Defendants have not yet had an opportunity to be heard. Accordingly, the Court will not dismiss the RICO claim, but will merely conclude that at this stage, appointment of counsel is not justified.

Plaintiff subsequently sought to amend the complaint and informed the Court that counsel would be entering an appearance on his behalf. In a Memorandum Order dated June 9, 2008, the Court granted Plaintiff's motion to amend, but cautioned that "participation by Plaintiff's counsel would be of substantial benefit in this factually and legally complex case" and opined that ideally counsel would draft the amended complaint. The Court extended the deadline for filing an amended complaint if an attorney entered an appearance, explaining that "additional time is intended to provide counsel with an opportunity to become familiar with the facts of the case." On July 1, 2008, the Court granted Plaintiff's motion for a further extension of time to obtain counsel. To date, no attorney has filed an appearance on behalf of Plaintiff.

On August 13, 2008, Smith filed his pro se Amended Complaint, which sets forth nineteen counts in 288 numbered paragraphs and 143 pages. In addition, Smith attached 148 exhibits to the Amended Complaint. There is no diversity of citizenship between the parties, as Plaintiff and most of the Defendants are citizens of Pennsylvania. Only Count I, which asserts a claim under the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. §§ 1961-1968, would be within the Court's original subject-matter jurisdiction. Plaintiff asks the Court to exercise supplemental jurisdiction pursuant to 28 U.S.C. § 1367 over the remaining eighteen counts of the complaint, which are all based on state law.

Standard of Review

The proper standard for evaluating motions to dismiss has been the subject of two recent precedential decisions. In Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955 (2007), all nine justices of the United States Supreme Court agreed that the oft-quoted standard that a complaint may not be dismissed "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief" has been retired and "is best forgotten." Id. at 1968.*fn2 The Court explained that a complaint must allege enough "facts" to show that a claim is "plausible" and not merely conceivable. Id. at 1965. The term "plausible" is not suspectible of mathematical quantification, but lies somewhere on the rhetorical spectrum between `"conceivable" or "speculative" and "probable." Indeed, the Twombly Court made a distinction between facts that were merely "consistent" with a wrongful conspiracy and facts that would be "suggestive" enough to render the alleged conduct plausible. Id. at 1966. In particular, the Court upheld dismissal of a complaint which alleged an antitrust conspiracy, despite "stray averments" that defendants had entered into an unlawful agreement, explaining that the plaintiff had alleged "merely legal conclusions." Id. at 1970. The Supreme Court also emphasized the need for district courts to prevent unjustified litigation expenses resulting from claims that are "just shy of a plausible entitlement." Id. at 1967, 1975.

In Phillips v. County of Allegheny, 515 F.3d 224 (3d Cir. 2008), the United States Court of Appeals for the Third Circuit further refined the Twombly standard. As the Court of Appeals explained, "notice pleading" pursuant to Rule 8(a)(2) remains intact, but requires the pleader to make a "showing" of entitlement to relief, and to give the defendant fair notice of what the claim is and the grounds upon which it rests. A pleader may not simply make a "bare averment that he wants relief and is entitled to it." Id. at 233. Labels, conclusions, and a formulaic recitation of the elements of a cause of action will not suffice. Id. at 231. Rather, the now-applicable pleading standard is as follows: stating a claim requires a ...


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