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Cranberry Promenade, Inc. v. Cranberry Township

February 22, 2010


The opinion of the court was delivered by: Nora Barry Fischer United States District Judge

Judge Nora Barry Fischer


This matter involves a dispute related to a proposed commercial retail development in Cranberry Township between Plaintiffs Cranberry Promenade, Inc., NAP Associates, Inc., NAP Associates 2, Inc., and Thomas W. Petrarca, d/b/a The Petrarca Companies (collectively, "Plaintiffs") and Defendants Cranberry Township, Richard Hadley, John Skorupan, John W. Milius, Dave Root, Bruce Mazzoni, Ron Henshaw and John K. Trant, Jr. (collectively, "Defendants"). Plaintiffs allege that Defendants, Cranberry Township and its employees and elected officials, have fraudulently thwarted their retail development in favor of a development plan for a contingent parcel, the developer of which has promised millions of dollars in infrastructure improvements to Cranberry Township in conjunction with its plan. (Docket No. 1). Plaintiffs contend that the Defendants' actions are criminal in nature and have asserted claims against them for civil violations of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1961, et seq. ("RICO"), among others. (Id.). Specifically, Plaintiffs allege the following: a RICO claim under 18 U.S.C. § 1962(c) for injury to their business or property resulting from the Defendants' pattern of racketeering activity; a claim for RICO conspiracy under 18 U.S.C. § 1962(d), alleging a conspiracy to violate section 1962(c); a claim under 42 U.S.C. § 1983 for violations of their rights to equal protection under the laws, procedural due process and substantive due process; and, a claim for civil conspiracy under Pennsylvania law. (Id.). Presently before the Court is Defendants' Motion to Dismiss, wherein Defendants have moved to dismiss all of Plaintiffs claims. (Docket No. 14).

Defendants filed their motion to dismiss and brief in support on November 19, 2009, arguing that Plaintiffs' claims are barred by the applicable statutes of limitations, and otherwise have failed to meet the pleading standards under Rules 8 and 9(b) of the Federal Rules of Civil Procedure. (Docket Nos. 14, 15). Defendants also claim immunity from suit with respect to Plaintiffs' state law civil conspiracy claim and Cranberry Township contends that it cannot be subject to liability for RICO violations. (Docket No. 15). In response, Plaintiffs filed their brief in opposition on December 14, 2009, conceding only that Cranberry Township is afforded immunity from suit under Pennsylvania law with respect to the civil conspiracy claim, but arguing that the remainder of their claims are not barred by the statutes of limitations and are properly pled. (Docket No. 19). Thereafter, Defendants filed their reply brief on December 24, 2009, rebutting many of the Plaintiffs' arguments and contending that the Court should disregard the Plaintiffs' brief in opposition as untimely filed. (Docket No. 21).

Upon consideration of the parties' submissions, the arguments raised during oral argument on January 20, 2010, the allegations in the Plaintiffs' Complaint,*fn1 and in light of the applicable pleading requirements under Rule 8, see Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009); Rule 9(b) as to the allegations of fraud, Lum v. Bank of America, 361 F.3d 217, 223-24 (3d Cir. 2004)(heightened pleading under Rule 9(b) applies to RICO claims based on allegations of wire/mail fraud); and the standard for a motion to dismiss under Rule 12(b)(6), see Ashcroft v. Iqbal, 556 U.S. ---, 129 S.Ct. 1937 (2009), Fowler, 578 F.3d at 210, Defendants' motion to dismiss [14] is granted, in part and denied, in part.

1. Timeliness of Plaintiffs' Brief in Opposition

At the outset, the Court addresses the timeliness of the filing of Plaintiffs' brief in opposition to the Defendants' motion to dismiss. The Court will not strike Plaintiffs' brief in opposition as untimely filed and grant Defendants' motion to dismiss for lack of opposition. Under a liberal reading of Rule 6(d), Plaintiffs' submission on Monday, December 14, 2009 in response to the Defendants' motion filed on November 20, 2009, was timely made. See FED.R.CIV.P. 6(d) ("When a party may or must act within a specified time after service and service is made under Rule 5(b)(2)(C), (D), (E), or (F), 3 days are added after the period would otherwise expire under Rule 6(a)"). Moreover, this Court is required to consider the merits of Plaintiffs' allegations in their complaint when ruling on Defendants' motion to dismiss under Rule 12(b)(6), even if unopposed. See Husick v. Allegheny County, 304 Fed.Appx. 977, 979 (3d Cir. 2008)(not precedential) ("a Rule 12(b)(6) motion should not be granted without an analysis of the merits of the underlying complaint notwithstanding local rules regarding the granting of unopposed motions."). Accordingly, the Court will consider Plaintiffs' submission as timely filed. The Court now turns to the merits of Plaintiffs' claims.

2. Statute of Limitations Defenses

Defendants next argue that Plaintiffs' claims should be dismissed based on the applicable statutes of limitations. A grant of a motion to dismiss may be premised on statute of limitations grounds only if the bar is apparent on the face of the complaint. Robinson v. Johnson, 313 F.3d 128, 134-35 (3d Cir. 2002)("If the bar is not apparent on the face of the complaint, then it may not afford the basis for a dismissal of the complaint under Rule 12(b)(6)."). The statute of limitations for civil RICO claims is four years, see e.g., Agency Holding Corp. v. Malley-Duff Assocs., 483 U.S. 143, 156 (1987); Forbes v. Eagleson, 228 F.3d 471, 483 (3d Cir. 2000), but the statute of limitations is not triggered until Plaintiffs "knew or should have known of their injury" as well as the source of their injury, Prudential Ins. Co. of America v. U.S. Gypsum Co., 359 F.3d 226, 233 (3d Cir. 2004)(citing Forbes, 228 F.3d at 485). The RICO statute of limitations may also be tolled if Plaintiffs demonstrate fraudulent concealment. Forbes, 228 F.3d at 486-87. A two year statute of limitations applies to Plaintiffs' § 1983 claim, Cowell v. Palmer Tp., 263 F.3d 286 (3d Cir. 2001), and Pennsylvania civil conspiracy claim, Kingston Coal Co. v. Felton Min. Co., Inc., 456 Pa.Super. 270, 277 n1 (Pa.Super.Ct. 1997); 42 Pa.C.S.A. § 5524(7). The discovery rule and equitable tolling doctrines may also be available to toll these statutes of limitations. See e.g., Murray v. DiGuglielmo, 2010 WL 381557, at *1 (3d Cir. Feb. 1, 2010)(not precedential)(discovery rule applies to § 1983 claims); Crawford v. Washington County CYS, 2009 WL 4048862 (3d Cir. Nov. 24, 2009)(not published)(continuing violation doctrine may apply to § 1983 claims); Pocono Intern. Raceway, Inc. v. Pocono Produce, Inc., 503 Pa. 80, 85 (Pa. 1983)(discovery rule under Pennsylvania law). Plaintiffs' Complaint contains detailed factual allegations of Defendants' conduct which occurred during the period of 2002-2009, and they attach voluminous exhibits in support of same, the communication of which by Defendants allegedly constitutes wire and/or mail fraud. (See generally Docket No. 1). In this Court's estimation, given these allegations and the potential applicability of the discovery rule and other tolling doctrines to any statute of limitations, it is not clear from the face of the complaint that Plaintiffs' claims are time-barred. See Robinson, 313 F.3d at 134-35; see also Magnum v. Archdiocese of Philadelphia, Civ. A. No. 06-2589, 2006 WL 3359642, at *12 (E.D.Pa. Nov. 17, 2006)(denying motion to dismiss RICO claims based on statute of limitations). Accordingly, Defendants' motion to dismiss based on the statute of limitations defenses is denied, without prejudice to Defendants later raising the statute of limitations as a defense to Plaintiffs' claims.

3. RICO Claims

Plaintiffs have alleged claims against Defendants under RICO sections 1962(c) and 1962(d).

See 18 U.S.C. §§ 1964(c), 1962(c), 1962(d). Defendants raise several arguments in support of their motion to dismiss the RICO claims. Many of the arguments relate to alleged pleading deficiencies, while their final argument pertains to the liability of Cranberry Township, a municipality, for RICO violations.

With respect to the alleged pleading deficiencies, the Court has carefully considered the parties' arguments and, after accepting the allegations in the Complaint as true, finds that the Plaintiffs have set forth sufficient factual allegations to state a claim for relief under RICO "that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. ---, 129 S.Ct. 1937, 1949 (2009)(quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). In so holding, the Court notes the following.

The Plaintiffs have sufficiently alleged injuries to their businesses or properties which were proximately caused by the Defendants in order to establish standing under RICO, see Maio v. Aetna, Inc., 221 F.3d 472, 482 (3d Cir. 2000)(citations omitted)(discussing requirements to establish standing under RICO), and have adequately set forth facts in support of the elements of a RICO action under section 1962(c), that is "(1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity." Kuznyetsov v. West Penn Allegheny Health System, Inc., Civil A. No. 09-379, 2009 WL 2175585, at *5 (W.D.Pa. 2009)(citing Sedima, S.P.R.L. v. Imrex Company, Inc., 473 U.S. 479, 496, 105 S.Ct. 3275, 3285, 87 L.Ed.2d 346 (1985)). Plaintiffs have also met the requirement that they sufficiently plead two predicate acts which are indictable under federal law in order to support their allegation of a "pattern of racketeering activity," 18 U.S.C. §§ 1961(1), 1961(5), as they have clearly pled more than two alleged violations of the mail and wire fraud statutes, 18 U.S.C. §§ 1341 and 1343, respectively, and those allegations are pled with specificity in accord with Rule 9(b).*fn2 See Lum v. Bank of America, 361 ...

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