IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA
July 25, 2012
JOSEPH FUCE, II
The opinion of the court was delivered by: Savage, J.
In this pro se *fn1 action brought under the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § 1961-1968, Joseph Fuce II, alleges that his former employer's general manager, William West, engaged in unlawful racketeering activity by conspiring with an unidentified accountant and Sovereign Bank to steal money from Fuce's paycheck. West has moved to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6), arguing Fuce has failed to state a RICO claim. West asserts that no racketeering activity occurred because the money deducted from Fuce's paychecks was withheld for federal, state, and local taxes. *fn2
Although he characterizes West's actions as "robbery" and "embezzlement," Fuce actually alleges a breach of contract, which is not racketeering activity actionable under RICO. Because Fuce has failed to state a RICO claim, we shall grant West's motion to dismiss.
Standard of Review
When considering a motion to dismiss for failure to state a claim under Fed. R. Civ. P. 12(b)(6), all well-pleaded allegations in the complaint are accepted as true and viewed in the light most favorable to the plaintiff. Holk v. Snapple Beverage Corp ., 575 F.3d 329, 334 (3d Cir. 2009) (quoting Phillips v. Cnty. of Allegheny , 515 F.3d 224, 231 (3d Cir. 2008)). We may also consider documents attached to the complaint. Buck v. Hampton Twp. Sch. Dist. , 452 F.3d 256, 260 (3d Cir. 2006) (citation omitted). Additionally, the pro se plaintiff's pleadings must be considered deferentially, affording him the benefit of the doubt where one exists. Dluhos v. Strasberg , 321 F.3d 365, 369 (3d Cir. 2003) (citing Higgins v. Beyer , 293 F.3d 683, 688 (3d Cir. 002)). With these standards in mind, we shall accept as true Fuce's factual allegations and draw all possible inferences from these facts in his favor.
On June 23, 2011, Fuce was hired to work as a service technician for the New Life Services Company ("NLS"). He entered into a verbal employment contract to work twenty-five hours per week at an initial pay rate of $8.00 per hour. Although the exhibits to his complaint indicate that he worked for and was paid by NLS, *fn4
Fuce alleges that his employment contract was with West. *fn5
Fuce worked with NLS from June 24, 2011 to December 31, 2011, logging a total of 605 hours. The amount of each paycheck was less than the gross amount of his earnings.
On September 29, 2011, Fuce sent a letter to West requesting a
one-dollar pay raise and production of all documents he had signed
with NLS. West did not respond to this request. *fn6
Fuce sent a second letter to West on October 10, 2011
inquiring about the status of his previous requests. *fn7
He wrote that he was owed $419.68 in back pay and would
be imposing $100 "penalty" for each day West failed to respond to his
letters. *fn8 Fuce
sent a third letter to West on December 15, 2011, reiterating his
previous request and his intention to impose a $100 per diem
penalty. *fn9 On December 31, 2011, Fuce
ceased working at NLS. Three days later he attempted to hand-deliver a
bill to West for $2,252.71, including back pay and penalties. West
refused to accept the letter. *fn10
Fuce alleges that West conspired with an unnamed accountant and Sovereign Bank to steal money from his earnings. He identifies the accountant only as one who "engages in accounting of the collection of the unlawful debts." *fn11 He contends that Sovereign Bank participated in this unlawful enterprise by "supply[ing] the account(s) for the unlawful debts collected." *fn12
To state a civil RICO claim, the plaintiff must allege that the defendant engaged in one of the four "Prohibited activities" listed at 18 U.S.C. § 1962(a)-(d) (2006). *fn13
Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 482-83 (1985). Fuce alleges that West violated § 1962(d), which prohibits conspiring to commit one of the three object offenses defined in subsections (a), (b) or (c).
To state a claim under subsection (d), Fuce must first allege that the object of the conspiracy was a violation of either subsection (a), (b) or (c). See In re Ins. Brokerage Antitrust Litig. , 618 F.3d 300, 373 (3d Cir. 2010) (quoting Salinas v. United States , 522 U.S. 52, 65 (1997)); Lightning Lube, Inc. v. Witco Corp. , 4 F.3d 1153, 1191 (3d Cir. 1993). Absent that allegation, a § 1962(d) claim fails. Ins. Brokerage Antitrust Litig. , 618 F.3d at 373 (quoting Salinas , 522 U.S. at 65).
Fuce does not identify whether West conspired to violate (a), (b)
or (c). Each of these three subsections require him to allege West's
involvement in "racketeering activity" as defined in the RICO statute.
See 18 U.S.C. § 1962(a)-(c). Fuce fails to meet
that requirement. He cannot state a claim under any of the three.
RICO defines racketeering activity as comprising one of the offenses listed at § 1961(1), commonly referred to as "predicate offenses." See In re Schering Plough Corp. Intron/Temodar Consumer Class Action, 678 F.3d 235, 245 (3d Cir. 2012). The list includes specific federal crimes codified in the United States Code, such as bribery, embezzlement and fraud, and several types of state felonies that are punishable by imprisonment for more than one year, such as murder, kidnapping, robbery, bribery and extortion. 18 U.S.C. § 1961(1); Schering , 678 F.3d at 245. The list of predicate offenses is complete. Annulli v. Panikkar , 200 F.3d 189, 200 (3d Cir. 1999), overruled on other grounds by Rotella v. Wood , 528 U.S. 549 (2000); see also Beck v. Prupis , 529 U.S. 494, 497 n.2 (2000); Spool v. World Child Int'l Adoption Agency , 520 F.3d 178, 183 (2d Cir. 2008) ("The acts of racketeering activity that constitute the pattern must be among the various criminal offenses listed in § 1961(1) . . . ."). Thus, to state a RICO cause of action, Fuce must allege that West violated one of the predicate offenses listed in § 1961(1).
Fuce alleges that West committed two specific federal offenses--"neglect to prevent the collection of unlawful debt" in violation of 18 U.S.C. § 1986 *fn14 and "conspiracy against rights" in violation of 18 U.S.C. § 241. He also alleges that West committed "robbery" and "embezzlement." *fn15
Neither of the federal statutes Fuce cites is listed in § 1961(1). Hence, he cannot rely on violations of those provisions as predicate offenses for a RICO claim. See Annulli , 200 F.3d at 200.
Robbery in violation of 18 U.S.C. § 1951 is a predicate offense listed in § 1961(1). Section 1951 defines "robbery" as "the unlawful taking or obtaining of personal property from the person or in the presence of another, against his will, by means of actual or threatened force, or violence, or fear of injury . . . ." 18 U.S.C. § 1951(b)(1). Robbery punishable by imprisonment for more than one year under state law is also a predicate offense under § 1961(1). In Pennsylvania, an essential element of the crime of robbery is intentional infliction or threat of bodily harm. 18 Pa. Cons. Stat. Ann. § 3701 (West 2012). *fn16 There are no facts alleged that West inflicted or threatened to inflict bodily harm. Nor can one infer actual or threatened physical injury. See Ashcroft v. Iqbal , 556 U.S. 662, 678 (2009) (citing Bell Atl. Corp. v. Twombly , 550 U.S. 544, 556 (2007)). Therefore, the conclusory allegation of "robbery" does not make out a predicate offense for racketeering activity.
Embezzlement in violation of 29 U.S.C. § 501(c) or 18 U.S.C. § 664 is a predicate act. 18 U.S.C. § 1961(1). Section 501(c) prohibits embezzlement from union funds and § 664 prohibits embezzlement from pension and welfare funds. Fuce has not alleged that West committed either of these crimes.
State-law embezzlement, which is a form of theft, is not a predicate offense because it is not listed in § 1961(1). See Annulli , 200 F.3d at 199-200 (the state law crime of theft is not a predicate offense under § 1961(1)); Weizman Inst. of Sci. v. Neschis , 229 F. Supp. 2d 234, 255 (S.D.N.Y. 2002) (larceny by embezzlement under New York law is not a predicate offense); Toms v. Pizzo , 4 F. Supp. 2d 178, 183 (W.D.N.Y. 1998) (embezzlement is only a predicate offense when it violates 29 U.S.C. § 501(c) or 18 U.S.C. § 664), aff'd 172 F.3d 38, at *2 (2d Cir. 1998) (unpublished table decision). Fuce's bald allegation of embezzlement does not support a claim of racketeering activity.
Despite Fuce's efforts to transform West's conduct into criminal
offenses, it is clear that he alleges a breach of contract cause of
action. Fuce claims that West agreed to pay him a specific amount in
exchange for his work as a service technician. He alleges that West
paid him less than the agreed-upon amount. *fn17
Failing to honor the terms of an employment agreement is
a breach of contract, which is not actionable under RICO.
*fn18 Annulli , 200 F.3d at
199; Flip Mortg. Corp. v. McElhone , 841 F.2d 531,
538 (4th Cir. 1988); Blount Fin. Serv. Inc. v. Walter E.
Heller and Co. , 819 F.2d 151, 152 (6th Cir. 1987) (affirming
the district court's dismissal of a RICO claim in part because "[t]he
fact that the parties take different positions under the contract . .
. does not give rise to a valid claim for fraud.").
In sum, because Fuce has failed to plead that West was involved in a predicate offense of "racketeering activity" under 18 U.S.C. § 1961(1), he has failed to state a claim under § 1962(d) on which relief can be granted. Therefore, we shall grant West's motion to dismiss.
It is clear from Fuce's allegations that no racketeering activity actionable under RICO occurred. Accordingly, we shall not grant Fuce leave to amend because amendment would be futile.