Joaquin v. Directv Group Holdings, Inc. et al

BRIEF in Opposition

D.N.J.January 23, 2017

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY ANGELA JOAQUIN, on behalf of herself and all others similarly situated, Plaintiff, v. LONSTEIN LAW OFFICES, P.C., a New York Professional Corporation; JULIE COHEN LONSTEIN; WAYNE LONSTEIN, SIGNAL AUDITING, INC., and STEVEN LEVINE, Defendants. Civil Action No. 3:15-cv-08194-MAS-DEA PLAINTIFF’S BRIEF IN OPPOSITION TO MOTION TO DISMISS FILED BY DEFENDANTS LONSTEIN LAW OFFICES, P.C., JULIE COHEN LONSTEIN, AND WAYNE LONSTEIN, AND IN OPPOSITION TO MOTION TO DISMISS FILED BY DEFENDANTS SIGNAL AUDITING, INC. AND STEVEN LEVINE THE WOLF LAW FIRM, LLC By: Henry P. Wolfe 1520 U.S. Hwy 130, Suite 101 North Brunswick, NJ 08902 (732) 545-7900 / fax: (732) 545-1030 BARROOD & BARROOD, P.C. By: Phillip K. Barrood 3060 Highway 27 Kendall Park, New Jersey 08824 (732) 249-6200 / fax: (732) 249-0111 Attorneys for Plaintiff and the Putative Class Return Date: February 21, 2017 Case 3:15-cv-08194-MAS-DEA Document 69 Filed 01/23/17 Page 1 of 37 PageID: 1208 ii TABLE OF CONTENTS STATEMENT OF FACTS……………………………………………………………………..1 I. STANDARD FOR DECIDING RULE 12(b)(6) MOTIONS ...........................................1 II. OPPOSITION TO THE MOTIONS TO DISMISS THE CFA CLAIMS. .......................2 A. OPPOSITION TO THE LONSTEIN DEFENDANTS’ MOTION TO DISMISS THE CFA CLAIM: The learned professional exception does not apply to a professional’s unlawful acts undertaken in connection with a sale of something other than professional services, such as satellite television services. ........................................................................ 3 B. OPPOSITION TO THE SAI DEFENDANTS’ MOTION TO DISMISS THE CFA CLAIM: The CFA broadly covers “any person” including persons other than the seller, and applies to any post-sale misconduct undertaken “in connection with” the sale and with the “subsequent performance.” .................................................................................................... 9 III. THE PLAINTIFF HAS SUFFICIENTLY STATED A CLAIM UNDER THE NJRICO .....................................................................................................................................16 A. An overview of the NJRICO Act. .................................................................................. 16 B. The Plaintiff has sufficiently stated predicate “racketeering activity” as to both the Lonstein Defendants and the SAI Defendants. .................................................................... 19 C. The Plaintiff has alleged sufficient facts to state a claim as to the existence of an “enterprise,” a “pattern of racketeering activity,” and violations of the NJRICO through “participation.” .................................................................................................................... 25 D. The Plaintiff has alleged sufficient facts to state standing to bring a claim for treble damages under the NJRICO. ............................................................................................... 31 IV. THE PLAINTIFF HAS PLEADED ANY CLAIMS SUBJECT TO RULE 9(b) WITH SUFFICIENT PARTICULARITY. ALTERNATIVELY, IF THE COURT FINDS ANY DEFICIENCIES, THE PLAINTIFF REQUESTS LEAVE TO AMEND TO CORRECT FORMAL DEFICIENIES, IF ANY. .........................................................................................34 CONCLUSION ............................................................................................................................. 35 Case 3:15-cv-08194-MAS-DEA Document 69 Filed 01/23/17 Page 2 of 37 PageID: 1209 1 STATEMENT OF FACTS The Plaintiff refers to the statement of facts submitted by the Lonstein Law Offices, P.C., Julie Cohen Lonstein, and Wayne Lonstein (the “Lonstein Defendants”), along with the facts alleged in the Plaintiff’s Second Amended Complaint, in opposition to the motions to dismiss filed by the Lonstein Defendants and by Signal Auditing, Inc. (“SAI”) and Steven Levine (the “SAI Defendants.) ARGUMENT IN OPPOSITION TO THE DEFENDANTS’ MOTIONS I. STANDARD FOR DECIDING RULE 12(b)(6) MOTIONS “A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) may be granted only if, accepting all well-pleaded allegations in the complaint as true and viewing them in the light most favorable to the plaintiff, a court concludes that the plaintiff failed to set forth fair notice of what the claim is and the grounds upon which it rests that make such a claim plausible on its face.” Gretzula v. Camden Cty. Tech. Sch. Bd. of Educ., 965 F. Supp. 2d 478, 483 (D.N.J. 2013)(citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007)). In deciding whether a pleading meets this standard, “the facts alleged must be taken as true and the complaint may not be dismissed merely because it appears unlikely that the plaintiff can prove those facts or will ultimately prevail on the merits.” Phillips v. Cnty. of Allegheny, 515 F.3d 224, 231 (3d. Cir. 2008)(citing Twombly, supra, 127 S. Ct. at 1964-65, 1969 n.8). The standard requires only that Case 3:15-cv-08194-MAS-DEA Document 69 Filed 01/23/17 Page 3 of 37 PageID: 1210 2 the complaint "must not be 'so undeveloped that it does not provide a defendant the type of notice of claim which is contemplated by [Fed. R. Civ. P. 8]'" Umland v. PLANCO Fin. Servs., Inc., 542 F.3d 59, 64 (3d Cir. 2008) (citing Phillips at 233). “In addition, ‘if a complaint is vulnerable to 12(b)(6) dismissal, a district court must permit a curative amendment, unless an amendment would be inequitable or futile.’” Gretzula v. Camden Cty. Tech. Sch. Bd. of Educ., 965 F. Supp. 2d 478, 484 (D.N.J. 2013)(citing Phillips at 236). II. OPPOSITION TO THE MOTIONS TO DISMISS THE CFA CLAIMS. The Lonstein Defendants’ motion identifies only one basis for dismissal of the Plaintiff’s CFA claim, and the SAI Defendants’ motion identifies two. The Lonstein Defendants’ sole ground for dismissal is their assertion of immunity from CFA liability under the “learned professional exception.” ECF Doc 62-6, Lonstein Brief, pp. 8-12. The Signal Auditing Defendants’ two arguments are (1) that the CFA claim should be dismissed against them because they were the party that sold the Plaintiff the satellite television services at issue, but are sellers of “investigatory services” which are not “merchandise” under the CFA, and (2) that the Plaintiff failed to allege that they engaged in any specific misrepresentation. ECF Doc 68-1, SAI Brief, pp. 5-8. Notably, none of the Defendants raised any challenges as to any other elements of the Plaintiff’s CFA claim, such as ascertainable loss and causation, and Case 3:15-cv-08194-MAS-DEA Document 69 Filed 01/23/17 Page 4 of 37 PageID: 1211 3 no such challenges may be raised on reply. See Advertisers Exch., Inc. v. Bayless Drug Store, Inc., 3 F.R.D. 178, 178 (D.N.J. 1942)(Motions to dismiss under Rule 12(b)(6), like all motions must “state with particularity the grounds” for the asserted “failure of complaint to state a claim upon which relief can be granted.”)(citing Fed. R. Civ. P. 7(b)); United States v. 64.88 Acres of Land, 25 F.R.D. 88, 90 (W.D. Pa. 1960)(The particularity requirement applicable to Rule 12(b)(6) and other motions is not “a mere technical requirement but rather…'real and substantial"…. [T]he 'requirements are mandatory; compliance is essential to orderly procedure…”)(citations omitted); Pitman v. Ottehberg, 2015 U.S. Dist. LEXIS 4438, at *25 n.9 (D.N.J. Jan. 14, 2015)(Noting that the defendant “has the burden under Rule 12(b)(6) to demonstrate that the allegations fail to state a claim” and ruling that the defendant could meet that burden by raising new objections to the pleadings for the first time in its reply brief). A. OPPOSITION TO THE LONSTEIN DEFENDANTS’ MOTION TO DISMISS THE CFA CLAIM: The learned professional exception does not apply to a professional’s unlawful acts undertaken in connection with a sale of something other than professional services, such as satellite television services. Contrary to the Lonstein Defendants’ claim that attorneys and other professionals are broadly immune from CFA liability, the New Jersey Supreme Court has clarified that the “learned professional exception” is a limited exception, applicable only where the transaction at issue in a CFA claim is one for Case 3:15-cv-08194-MAS-DEA Document 69 Filed 01/23/17 Page 5 of 37 PageID: 1212 4 professional services, and even then, only where the conduct alleged to violate the CFA was undertaken in the defendant’s professional capacity. See Manahawkin Convalescent v. O'Neill, 85 A.3d 947, 962 (2014)(Under the exception, “certain transactions fall outside the CFA's purview because they involve services provided by learned professionals in their professional capacity.”)(emphasis added, citation omitted). The transaction from which the Plaintiff’s CFA claims arose was the sale satellite television services1, not the sale or advertisement of legal or other professional services, and so the exception is not applicable here. Under the Erie doctrine, this Court is required to "predict how the New Jersey Supreme Court would rule if presented with this case." Repola v. Morbark Indus., Inc., 934 F.2d 483, 489 (3d Cir. 1991). The New Jersey Supreme Court’s most recent discussion of the learned professional exception, in Manahawkin Convalescent v. O'Neill, confirms that the Court does not consider it to be a broad rule of immunity, as the Defendants argue, but rather a narrow exception to the CFA applicable to only to “certain transactions” and even then only when the conduct undertaken is in the person’s “professional capacity.” Manahawkin, supra, 85 A.3d at 962. In Manahawkin, the defendant, a nursing home, was 1 Specifically, the Plaintiff has alleged that the Defendants engaged in “unconscionable commercial practices…in connection with” the sale of satellite television services in violation of N.J.S.A. 56:8-2, as discussed further at point heading II.B., infra. Case 3:15-cv-08194-MAS-DEA Document 69 Filed 01/23/17 Page 6 of 37 PageID: 1213 5 alleged to have violated the New Jersey Nursing Home Act (NHA) and therefore the CFA by requiring a resident’s daughter to guaranty payments and by attempting to collect from her following her mother’s death. Id. at 951. The trial court dismissed, and the Appellate Division affirmed, holding that the nursing home’s conduct did not violate the NHA or CFA, and that the learned professional exception broadly “precludes [the CFA’s] application to Manahawkin.” Manahawkin v. O’Neill, 43 A.3d 1197, 1203 (N.J. App. Div. 2012). The Supreme Court affirmed on the grounds that the conduct did not violate the CFA, but then took the time to call into question the Appellate Division’s application of the learned professional exception: We have serious doubts that the billing and collection function at issue in this case would qualify for the learned professional exception to the CFA, "whereby certain transactions fall outside the CFA's purview because they involve services provided by learned professionals in their professional capacity." Manahawkin, supra, 85 A.3d at 962, quoting Lee v. First Union Nat. Bank, 971 A.2d 1054 (2009) (emphasis added). Again, this is the Court’s most recent pronouncement regarding the exception, and therefore the most probative in predicting how broadly or narrowly the Court would apply the exception, notwithstanding that it was provided in dicta. See McKenna v. Ortho Pharm. Corp., 622 F.2d 657, 662 (3d Cir. 1980)(“Considered dicta by the state's highest court may also provide a federal court with reliable indicia of how the state tribunal might rule on a particular question.”) Case 3:15-cv-08194-MAS-DEA Document 69 Filed 01/23/17 Page 7 of 37 PageID: 1214 6 By defining the learned professional exception as one “whereby certain transactions fall outside the CFA’s purview” rather than one “whereby certain professionals fall outside the CFA’s purview,” the Court in Manahawkin clearly rejected the sort of broad immunity asserted by the Lonstien Defendants, and confirmed that the exception operates narrowly to exclude transactions for professional services from the NJCFA’s reach. This formulation focuses on the nature of the services being sold or advertised to determine whether they are “merchandise” covered by the CFA, which addresses the primary rationale given for the rationale when it was adopted. See Dicarlo v. St. Mary's Hosp., 2006 U.S. Dist. LEXIS 49000, at *23 (D.N.J. July 19, 2006)(Although the CFA’s definition of covered “‘merchandise’ generally includes services… “the nature of [professional] services does not fall into the category of consumerism.”)(citing Neveroski v. Blair, 358 A.2d 473, 481 (N.J. App. Div. 1976)). The CFA claim here does not depend on the Lonstien Defendant’s professional services being classified as “merchandise” or within “the category of consumerism” because the Plaintiff does not allege misconduct in the sale or advertisement of those services. Put another way, the Plaintiff is not a consumer of the Lonstein Defendant’s professional services. Rather, the Plaintiff’s claims arise from the sale of satellite television service, and she alleges unlawful conduct in connection with that sale and the subsequent performance. The Plaintiff is not claiming that the Lonstein Case 3:15-cv-08194-MAS-DEA Document 69 Filed 01/23/17 Page 8 of 37 PageID: 1215 7 Defendants attempted to sell or advertise legal or other professional services to her, and so this action does not involve the type of transaction or the type of merchandise excluded from the CFA by the professional exception. This distinction was aptly recognized by the New Jersey Appellate Division in Blatterfein v. Larken Assocs., 732 A.2d 555 (N.J. App. Div. 1999), in which the Court held that an architect who had designed houses for a developer was not immune from CFA liability for misrepresentations that he made to prospective purchasers when attempting to sell the houses: If [the defendant’s] architectural services had been retained by any of the plaintiffs directly there might be some merit to his argument that [the learned professional exception] established a basis to bar plaintiffs' consumer fraud claims against him. But that is not the situation with which we are confronted. Blatterfein at 561. The other caselaw applying the learned professional exception confirms that it applies only to CFA claims alleging professionals’ misconduct in connection with the sale or advertisement of professional services to consumers, and not to such conduct in connection with the sale or advertisement of non-professional services. For example, in Macedo v. Dello Russo, 840 A.2d 238 (2004), the Court held that the exception applied to a physician’s misrepresentation of his medical qualifications in advertisements of his services to consumers, stating, “Under [the exception], advertisements by learned professionals in respect of the rendering of Case 3:15-cv-08194-MAS-DEA Document 69 Filed 01/23/17 Page 9 of 37 PageID: 1216 8 professional services are insulated from the CFA.” Id at 242. Notably, the Court in Macedo stated that the “advertisements…are insulated from the CFA” rather than the learned professionals themselves, consistent with the principle that the exception is limited to the sale or advertisement of professional services, and with Court’s later observation that that exception is one “whereby certain transactions fall outside the CFA's purview.” Manahawkin, supra, 85 A.3d at 962. Accordingly, the published judicial decisions applying the exception have consistently involved transactions or advertisements for professional services to the consumer-plaintiff. See e.g., Macedo, supra, 840 A.2d at 242 (applying the exception to false statements in advertisement of medical services to consumers); DiCarlo v. St. Mary Hosp., 530 F.3d 255, 260 (3d Cir. 2008)(applying the exception to unlawful billing practices in connection with the sale of medical services to consumers)2; Plemmons v. Blue Chip Ins. Servs., Inc., 904 A.2d 825, 834 (N.J. App. Div. 2006)( applying the exception to misrepresentations in sale of insurance brokerage services to a consumer); Vort v. Hollander, 257 607 A.2d 2 DiCarlo, which held that a hospital’s billing practices are sufficiently within the associated physicians’ “professional capacity” to be subject to the learned professional exception, is of questionable validity given the New Jersey Supreme Court’s subsequent expression of “serious doubts” as to that proposition. Manahawkin at 962. But the point remains that DiCarlo involved conduct in connection with a sale of professional services to the consumer, unlike the professional services at issue here, which sold to the Lonstein Defendants’ client, DirecTV and not to the Plaintiff. Case 3:15-cv-08194-MAS-DEA Document 69 Filed 01/23/17 Page 10 of 37 PageID: 1217 9 1339, 1342 (N.J. App. Div. 1992)( applying the exception to unlawful billing practices in connection with the sale of legal services to consumers); Hampton Hosp. v. Bresan, 672 A.2d 725, 726 (N.J. App. Div. 1996) (applying the exception to unlawful billing practices in connection with the sale of medical services to a consumer). To counsel’s knowledge, the exception has never been applied to immunize attorneys who engage in conduct in connection with their clients’ sales of non-professional goods or services. B. OPPOSITION TO THE SAI DEFENDANTS’ MOTION TO DISMISS THE CFA CLAIM: The CFA broadly covers “any person” including persons other than the seller, and applies to any post-sale misconduct undertaken “in connection with” the sale and with the “subsequent performance.” The SAI Defendants’ argument that the CFA cannot apply to their conduct as providers of “investigatory services” reflects a misunderstanding of the Plaintiff’s CFA claim as pleaded and of the scope of the CFA itself. The does not allege that the SAI Defendants were sellers of the satellite television services at issue, or that the SAI Defendants attempted to sell the Plaintiff its “investigatory services” (regardless of whether those services are not “merchandise,” as SAI argues). Rather, the Plaintiff alleges that the SAI Defendants engaged in unconscionable commercial practices in connection with the sale of satellite Case 3:15-cv-08194-MAS-DEA Document 69 Filed 01/23/17 Page 11 of 37 PageID: 1218 10 television services to the Plaintiff and/or in connection with the subsequent performance of that transaction. See N.J.S.A. 56:8-2. The CFA applies not only to sellers, but broadly to “any person,” and prohibits not only deceptive conduct in the inducement of sales, but also “any unconscionable commercial practice… in connection with the sale…of merchandise,” including “subsequent performance.” N.J.S.A. 56:8-2 (emphasis added). New Jersey courts, recognizing the “sweeping language” chosen by the Legislature, have construed these provisions broadly. See Allen v. V & A Bros., Inc., 26 A.3d 430, 440-42 (2011); Gonzalez v. Wilshire Credit Corp., 25 A.3d 1103, 1116 (N.J. 2011). There is no reason why it should not cover the SAI Defendants, or their alleged unconscionable commercial conduct in surveilling and photographing her small business to intimidate her to pay $10,000 for doing nothing more than using satellite television services that she paid for, using a subscription chosen for her by the seller when it installed the service at her beauty salon, as the Defendants knew or should have known from their access to the seller’s records, and from their experience in at least one other instance in which a small business owner who they surveilled, photographed, and accused of “unauthorized” use of DirecTV non-commercial services provided them with confirmation the use was in fact “authorized” by a DirecTV authorized agent. See Am. Compl. Ex. A. Case 3:15-cv-08194-MAS-DEA Document 69 Filed 01/23/17 Page 12 of 37 PageID: 1219 11 As to the applicability of the CFA to non-sellers such as the Defendants, N.J.S.A. 56:8-2 provides that The act, use or employment by any person of any unconscionable commercial practice, deception, fraud, false pretense, false promise, misrepresentation, or the knowing, concealment, suppression, or omission of any material fact with intent that others rely upon such concealment, suppression or omission, in connection with the sale or advertisement of any merchandise or real estate, or with the subsequent performance of such person as aforesaid, whether or not any person has in fact been misled, deceived or damaged thereby, is declared to be an unlawful practice. (emphasis added). Moreover, the CFA broadly defines “person” as follows: The term "person" as used in this act shall include any natural person or his legal representative, partnership, corporation, company, trust, business entity or association, and any agent, employee, salesman, partner, officer, director, member, stockholder, associate, trustee or cestuis que trustent thereof[.] N.J.S.A. 56:8-1(d)(emphasis added). The New Jersey Supreme Court has held that this “sweeping language” indicates a Legislative intent to cover not just sellers but also any individuals who engage in conduct in connection with a sale or its subsequent performance. See Allen v. V & A Bros., Inc., 26 A.3d 430, 440-42 (2011) (“In light of the broad remedial purposes of the CFA and the expansive sweep of the definition of 'person,' it is clear that an individual who commits an affirmative act or a knowing omission that the CFA has made actionable can be liable individually.") As to the applicability to the CFA to post-sale conduct, it is well established that, under the plain statutory language, the statute applies not just to misconduct in Case 3:15-cv-08194-MAS-DEA Document 69 Filed 01/23/17 Page 13 of 37 PageID: 1220 12 the inducement of sales, but also to any subsequent unconscionable commercial practices in connection with sales or their subsequent performance. Gonzalez v. Wilshire Credit Corp., 25 A.3d 1103, 1116 (N.J. 2011)(“[C]ollecting or enforcing a loan, whether by the lender or its assignee, constitutes the "subsequent performance" of a loan, an activity falling within the coverage of the CFA.”); Weiss v. First Unum Life Ins. Co., 482 F.3d 254, 266 (3d Cir. 2007) (“Here, Weiss has alleged that First Unum embarked on a fraudulent scheme to deny insureds their rightful benefits, clearly an unconscionable commercial practice in connection with the performance of its obligations subsequent to the sale of merchandise, i.e. payment of benefits. The CFA covers fraud both in the initial sale… and fraud in the subsequent performance… We conclude that…the New Jersey Supreme Court[‘s] sweeping statements regarding the application of the CFA to deter and punish deceptive insurance practices makes us question why it would not conclude that the performance in the providing of benefits, not just sales, is covered…”); Jefferson Loan Co., Inc. v. Session, 938 A.2d 169, 178 (N.J. App. Div. 2008)(“For a plaintiff to recover under the CFA, the plaintiff need not prove that the defendant was directly involved in the original contract negotiations or sale.”) The Defendants’ alleged misconduct was undeniably “in connection with the sale” of DirecTV satellite television services to the Plaintiff, or “in connection with Case 3:15-cv-08194-MAS-DEA Document 69 Filed 01/23/17 Page 14 of 37 PageID: 1221 13 the subsequent performance” of the sale of those services. The Amended Complaint alleges that was a sale of DirecTV satellite television services to the Plaintiff at a price offered and subscription type unilaterally chosen by the seller’s representative. It further alleges that the Plaintiff continued meeting her payment obligations under the sale, and that DirecTV continued to subsequently perform the sale by providing services, until the Defendants’ engaged in the alleged misconduct. Notably, the alleged misconduct included interrupting the seller’s continued subsequent performance by discontinuing services, and attempting to change the sale’s payment terms by demanding increased monthly payments for continued services, along with a large penalty. While the amended complaint alleges that the Defendants acted with considerable autonomy and not at the direction of DirecTV, their conduct was made possible by their relationship with the seller, and their conduct was indisputably “in connection with” DirecTV’s sale of services to the Plaintiff, and with “the subsequent performance” in the ordinary sense of those terms. Again, there is nothing in the CFA’s language that would suggest that the Defendants’ alleged conduct would not be covered by the CFA. They are clearly within the CFA’s definition of “person” and their conduct was clearly “in connection with” the sale of satellite television services and/or the “subsequent performance” of such sales. To search for some rationale for excluding these Case 3:15-cv-08194-MAS-DEA Document 69 Filed 01/23/17 Page 15 of 37 PageID: 1222 14 Defendants or their conduct from the CFA outside of the statutory language would be to disregard the New Jersey Supreme Court’s numerous directives that the Act must be construed liberally and expansively to combat the sort of abusive practices in the marketplace alleged here. Finally, the amended complaint has sufficiently alleged unlawful acts as to all Defendants, specifically “unactionable commercial practices” in violation of N.J.S.A. 56:8-2. Contrary to the SAI Defendants’ contention that the Plaintiff was required to allege a specific instance of “misrepresentation” (SAI Brief, at 8), The CFA does not… require an affirmative statement or representation. A CFA claim may proceed based on allegations of an "unconscionable commercial practice." As the New Jersey Supreme Court has noted, "unconscionability is 'an amorphous concept obviously designed to establish a broad business ethic . . . .'" Cox v. Sears Roebuck & Co., 138 N.J. 2, 647 A.2d 454, 462 (N.J. 1994) (quoting Kugler v. Romain, 58 N.J. 522, 279 A.2d 640, 651 (N.J. 1971)). Dewey v. Volkswagen AG, 558 F. Supp. 2d 505, 525 (D.N.J. 2008). The SAI Defendants are also incorrect that the Plaintiff’s CFA claims are subject the heightened pleading standards applicable to fraud claims under Rule 9(b), because “[u]nconscionable commercial practice claims are distinct from NJCFA claims sounding in fraud, and so the heightened pleading standard of Rule 9(b) does not apply.” Katz v. Live Nation, Inc., 2010 U.S. Dist. LEXIS 60123, at *14 (D.N.J. June 17, 2010). The Third Circuit has likewise noted that Case 3:15-cv-08194-MAS-DEA Document 69 Filed 01/23/17 Page 16 of 37 PageID: 1223 15 as elaborated in Cox [v. Sears], because the intent to deceive or actual deception is not required for a CFA claim, a heightened pleading standard under FRCP Rule 9 is not warranted. 647 A.2d at 462; see also Katz, 2010 U.S. Dist. LEXIS 60123, 2010 WL 2539686 at *5 (citing Dewey v. Volkswagen AG, 558 F.Supp.2d 505, 525 (D. N.J. 2008)). Ciser v. Nestle Waters N. Am., Inc., 596 F. App'x 157, 162 n.6 (3d Cir. 2015). Notably, the SAI Defendants do not present any challenges as to the “unconscionable commercial practice” element of the CFA claim beyond their inapt objections of lack of alleged misrepresentation and insufficient Rule 9(b) specificity, which is dispositive of their motion on this point. See, Advertisers Exch., Inc. v. Bayless, supra, 3 F.R.D. at 178 (Rule 12(b)(6) motions must “state with particularity the grounds” for the asserted “failure of complaint to state a claim upon which relief can be granted.”). In fact, the SAI Defendants admit that, absent the perceived failure to plead misrepresentation Rule 9(b) and defects, “the Complaint might suggest… that the Signal Defendants engaged in some type of misconduct through their association with other non-parties and the Lonstein Defendants.” SAI Brief at 8. Granted, they admit that this suggestion of misconduct would require a “tortured reading of the Complaint” which perhaps is a fair summary of the Rule 12(b)(6) standard through the lens a defendant facing a lawsuit. Gretzula v. Camden Cty. Tech. Sch. Bd. of Educ., 965 F. Supp. 2d 478, 483 (D.N.J. 2013)( Rule 12(b)(6) requires review of complaint “accepting all well- Case 3:15-cv-08194-MAS-DEA Document 69 Filed 01/23/17 Page 17 of 37 PageID: 1224 16 pleaded allegations in the complaint as true and viewing them in the light most favorable to the plaintiff…”) III. THE PLAINTIFF HAS SUFFICIENTLY STATED A CLAIM UNDER THE NJRICO The Defendants collectively challenge the Plaintiff’s claim under the NJRICO on three general grounds. First, they argue that the none of the conduct alleged by the Plaintiff constitutes a “predicate act” under the NJRICO. ECF Doc 62-6, Brief, pp. 14-15; ECF Doc 68-1, Brief, pp. 10-11. Second, they argue that the even if the conduct did constitute a sufficient NJRICO predicate, the Plaintiff failed to sufficiently plead the other elements of a NJRICO claim, such as the existence of an enterprise and a pattern of racketeering activity. ECF Doc 62-6, Brief, pp. 14-15; ECF Doc 68-1, Brief, pp. 5-8. Third, the Defendants argue that the Plaintiff failed to allege damages caused by alleged the NJRICO violation and thus lacks standing. ECF Doc 62-6, Brief, pp. 14-15; ECF Doc 68-1, Brief, pp. 5-8. A. An overview of the NJRICO Act. The NJRICO, at N.J.S.A. 2C:41-2, prohibits four separate types of activities, any one of which constitutes an actionable violation. The broadest of these makes it a violation for “any person” to simply “participate, directly or indirectly, in the conduct of the enterprise’s affairs through a pattern of racketeering activity.” N.J.S.A. 2C:41-2(c). Case 3:15-cv-08194-MAS-DEA Document 69 Filed 01/23/17 Page 18 of 37 PageID: 1225 17 This prohibition obviously derives its meaning and operation from the terms “person,” “enterprise,” and “pattern of racketeering activity,” and “racketeering activity” all of which are defined in the statute at N.J.S.A. 2C-41-1: a. “Racketeering activity” means any of the following crimes which are crimes under the laws of New Jersey or are equivalent crimes under the laws of any other jurisdiction: *** (h) extortion *** (n) theft and all crimes defined in chapter 20 of Title 2C of the New Jersey Statutes (o) forgery and fraudulent practices and all crimes defined in chapter 21 of Title 2C of the New Jersey Statutes *** (2) any conduct defined as “racketeering activity” under Title 18, U.S.C. § 1961(1)(A), (B) and (D)[which includes mail fraud] b. “Person” includes any individual or entity or enterprise as defined herein holding or capable of holding a legal or beneficial interest in property. c. “Enterprise” includes any individual, sole proprietorship, partnership, corporation, business or charitable trust, association, or other legal entity, any union or group of individuals associated in fact although not a legal entity, and it includes illicit as well as licit enterprises and governmental as well as other entities. d. “Pattern of racketeering activity” requires: (1) Engaging in at least two incidents of racketeering conduct one of which shall have occurred after the effective date of this act and the last of which shall have occurred within 10 years (excluding any period of imprisonment) after a prior incident of racketeering activity; and (2) A showing that the incidents of racketeering activity embrace criminal conduct that has either the same or similar purposes, results, participants or victims or methods of commission or are otherwise interrelated by distinguishing characteristics and are not isolated incidents. Case 3:15-cv-08194-MAS-DEA Document 69 Filed 01/23/17 Page 19 of 37 PageID: 1226 18 Thus, "[t]he gravamen of a RICO violation . . . is the involvement in the affairs of an enterprise through a pattern of racketeering activity." State v. Ball, 661 A.2d 251, (N.J. 1995) "A 'pattern of racketeering activity' requires '[e]ngaging in at least two incidents of racketeering conduct' that 'embrace criminal conduct' and are interrelated." Franklin Med. Assocs. v. Newark Pub. Schs., 828 A.2d 966 (N.J. App. Div. 2003) (alteration in original) (citing N.J.S.A. 2C:41-1(d)). Although the NJRICO is modelled from the federal RICO, the New Jersey statute differs from the federal statute in several important respects. First, It is important to note that NJRICO is broader in scope than the federal RICO statute. The New Jersey courts take a liberal stance in permitting plaintiffs to plead NJRICO violations, rejecting the narrow construction of the federal statute that many circuits, including this one, have adopted. Ford Motor Co. v. Edgewood Props., 2012 U.S. Dist. LEXIS 125197, at *86 (D.N.J. Aug. 31, 2012) (citing State v. Ball, 632 A.2d 1222 (N.J. App. Div. 1993) aff'd, 141 661 A.2d 251 (N.J. 1995)). While the federal RICO’ stated purpose is to “eradicate organized crime,” the NJRICO was enacted to also eliminate “organized crime type activities” because the drafters “did not want to limit the scope of the bill to the traditional… notion of organized crime as either the Mafia or La Cosa Nostra [but also] to go into organized criminal activity, which could reach labor racketeering, traditional organized crime activities, business or commercial activities.” State v. Ball, 632 A.2d 1222, 1239-40 (N.J. App. Div. 1993)(citing Case 3:15-cv-08194-MAS-DEA Document 69 Filed 01/23/17 Page 20 of 37 PageID: 1227 19 Assembly Committee testimony). Thus, to achieve that expanded purpose, the NJRICO’s definitions of “person,” “enterprise” and “pattern of racketeering conduct” are broader than those ascribed in the federal statute, as discussed further at point heading III.C., infra. B. The Plaintiff has sufficiently stated predicate “racketeering activity” as to both the Lonstein Defendants and the SAI Defendants. The NJRICO defines “racketeering activity” as including, inter alia, “extortion,” “theft and all crimes defined in chapter 20 of Title 2C of the New Jersey Statutes,” “forgery and fraudulent practices and all crimes defined in chapter 21 of Title 2C of the New Jersey Statutes,” and “any conduct defined as ‘racketeering activity’ under Title 18, U.S.C. § 1961(1)(A), (B) [of the federal RICO],” which includes violation of the federal mail fraud statute, 18 U.S.C. § 1341. Here, the Plaintiff alleges that the Lonstein Defendants, with the aid of the SAI Defendants, attempted to intimidate her to pay $10,000 by sending her letters accusing her of signal theft in violation of the federal communications act, enclosing pictures that SAI had secretly taken of her and her customers, and threatening to initiate an action for penalties and attorney’s fees if she did not pay. The Plaintiff further alleges that the Defendants knew or purposefully disregarded evidence that her use of the DirecTV subscription at her business establishment was authorized because DirecTV records show that the receivers were installed and the subscription activated and authorized at that location by a DirecTV agent. The Case 3:15-cv-08194-MAS-DEA Document 69 Filed 01/23/17 Page 21 of 37 PageID: 1228 20 Plaintiff alleges that the Defendants have acted similarly with respect to other small businesses, and identified another such case, including an affidavit from that case supporting the allegation that the Defendants engage in their threats and demands for payment even when provided with evidence contrary to their accusations of unauthorized use of services. Compl. ¶¶, Exh. A. Moreover, the Plaintiff alleges that the Defendants have initiated this scheme, including the claim of piracy against the Plaintiff, in the context of the considerable autonomy DirecTV provided to them in policing genuine cases of piracy of their services, and not at the specific direction of their client, contrary to the Lonstein Defendants’ position that they were merely attorneys negotiating a dispute between their client and the Plaintiff. These allegations, taken as true, support a number of predicate acts under New Jersey Criminal laws, including N.J.S.A. 2C:21-7(h) (Deceptive business practices, which include “Mak[ing] a false or misleading written statement for the purpose of obtaining property or credit” in the course of business), N.J.S.A. 2C:20- 5(b) and (c) (Theft by extortion, which provides “A person extorts if he purposely threatens to…. (b) Accuse anyone of an offense3 or cause charges of an offense to 3 The statute that the letters accused the Plaintiff of violating provides for criminal prosecution. 47 U.S.C. sec. 605(e)(1) (“Any person who willfully violates subsection (a) shall be fined not more than $2,000 or imprisoned for not more than 6 months, or both.”) Case 3:15-cv-08194-MAS-DEA Document 69 Filed 01/23/17 Page 22 of 37 PageID: 1229 21 be instituted against any person, (c) Expose or publicize any secret or any asserted fact, whether true or false, tending to subject any person to hatred, contempt or ridicule, or to impair his credit or business repute”) ), N.J.S.A. 2C:20-4(a) (Theft by deception, which provides that a “person deceives if he purposely…[c]reates or reinforces a false impression, including false impressions as to law, value, intention or other state of mind, and including, but not limited to, a false impression that the person is soliciting or collecting funds for a charitable purpose.”), and the New Jersey attempt and accomplice provisions applicable to the foregoing crimes, N.J.S.A. 2C:2-6 and N.J.S.A. 2C:5-1. The alleged conduct states violations of applicable federal criminal laws also, including the mail fraud statute, 18 U.S.C. § 1341, which prohibits use of the mails in furtherance of a "scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses,” as well as attempted extortion under the Hobbs Act at 18 U.S.C. § 1951(a)(Prohibiting “extortion or attempts or conspires so to do” and defining extortion as “the obtaining of property from another, with his consent, induced by wrongful use of actual or threatened force, violence, or fear, or under color of official right.”) Alleged attempts to wrongfully coerce money through threats of legal action have been held to support RICO predicates, including some of the same predicates alleged by the Plaintiff, even where the victim did not pay the demanded money. Case 3:15-cv-08194-MAS-DEA Document 69 Filed 01/23/17 Page 23 of 37 PageID: 1230 22 Desmond v. Siegel, 2012 U.S. Dist. LEXIS 109579, at *29 (D.N.J. Aug. 6, 2012)(finding prima facie RICO predicate violations of the Hobbs Act and the New Jersey Theft by Extortion statute where the defendant sent letters accusing the plaintiff “copyright theft” and demanding payment). While the facts of Desmond are admittedly not precisely the same as those presented here (the defendant also threatened to publically accuse the plaintiff of “financial rape”) the Court’s discussion is instructive: The Amended Complaint… sets forth acts of attempted extortion committed by Mr. Siegel against Mr. Desmond in violation of the Hobbs Act. To establish a violation of the Hobbs Act, there must be a showing that "(1) the defendant committed 'robbery or extortion' or attempted or conspired to do so, and (2) that the conduct 'obstruct[ed], delay[ed], or affect[ed] commerce or the movement of any article or commodity in commerce.'" United States v. Walker, 657 F.3d 160, 178-79 (3d Cir. 2011) (quoting 18 U.S.C. § 1951(a)). "The Hobbs Act defines the term 'commerce' broadly to include 'all . . . commerce over which the United States has jurisdiction." Id. at 179 (quoting 18 U.S.C. § 1951(b)(3)); see also Stirone v. United States, 361 U.S. 212, 215, 80 S. Ct. 270, 4 L. Ed. 2d 252 (1960) ("[The Hobbs Act] speaks in broad language, manifesting a purpose to use all the constitutional power Congress has to punish interference with interstate commerce by extortion…"). Mr. Siegel attempted to extort money from Mr. Desmond through fear. Specifically, On June 15, 2010, Mr. Siegel sent a letter on Globecon letterhead… stating that one of Mr. Desmond's companies stole intellectual property from Globecon and that "while I am not a speck as successful or powerful as you, I wager I am certainly one of the most tenacious people you would ever meet. Thus, my character requires me to achieve a just resolution on my own terms if I do not hear from you further." In a July 2, 2010 letter to Mr. Desmond, Mr. Siegel wrote: "when the facts of your financial rape and copyright theft are in the open there will be little denying it . . . light will truly be the best disinfectant," and "[i]f you cannot Case 3:15-cv-08194-MAS-DEA Document 69 Filed 01/23/17 Page 24 of 37 PageID: 1231 23 gather the courage to act like a man then you will do as you want, as will we." Defendants argue that these statements merely amount to a business dispute between Mr. Siegel and Mr. Desmond, for which Mr. Siegel was seeking a just resolution. While Mr. Siegel's letters stated that he sought to "resolve . . . [the] unfortunate situation[] in a reasonable manner" and that he "look[ed] forward to a fair commercial arrangement to resolve this matter, such statements are not inconsistent with an act of attempted extortion. Indeed, they serve to encourage Mr. Desmond to compensate Mr. Siegel for the alleged theft of intellectual property under threat of being subject to public allegations of "financial rape and copyright theft" and a "a just resolution on [Mr. Siegel's] own terms." ….These allegations also satisfy the elements of attempted extortion under New Jersey State Law. See N.J.S.A. 2C:20-5(c) (extortion) ("A person is guilty of theft by extortion if he purposely and unlawfully obtains property of another by . . . . Expos[ing] or publiciz[ing] any secret or any asserted fact, whether true or false, tending to subject any person to hatred, contempt or ridicule, or to impair his credit or business repute") Desmond, supra, 2012 U.S. Dist. LEXIS 109579, at *30-35. Despite the more colorful language of the letters in Desmond, Lonstein’s letters to the Plaintiff were arguably more egregious incidents of extortion, as they were directed to a small, sole proprietorship in a distressed, inner-city neighborhood threatening ruinous legal action on behalf of a large corporation. By contrast, the letters in Desmond were directed to a wealthy and powerful entrepreneur who was clearly not intimidated by them. Moreover, the Lonstein letters enclosed surveillance photos of the Plaintiff and her customers clearly intended to shock and frighten the recipient, disclosing that she had been secretly stalked, photographed, and videotaped by a stranger. The letters accused her of Case 3:15-cv-08194-MAS-DEA Document 69 Filed 01/23/17 Page 25 of 37 PageID: 1232 24 violating the anti-piracy provision of the Federal Communications Act, 47 U.S.C. sec. 605, which carries criminal penalties for knowing violations. One of the letters accuses the Plaintiff, without explanation or supporting facts, that “[i]n order for you to have received the programming on your television, it had to have been affirmative actions intended to purposely defraud DIRECTV, LLC. Said action could only have been accomplished by overt acts done to avoid paying the legal subscription rate for a business viewing account within a commercial establishment.” These statements are clearly intended to intimidate, and Lonstien had no factual basis for making them, or for failing to consider the obvious alternative explanation that the choice of subscription was made by a DirecTV agent, for the perfectly rational purpose of making a sale and providing a revenue stream that the company would it would not have if it had charged a substantially higher price. The Plaintiff has also sufficiently alleged predicate violations of the mail fraud statute, which prohibits the use of the United States Postal Service in furtherance of “any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations…” 18 U.S.C. § 1341. This language as been interpreted as prohibiting a much broader range of conduct than ordinary common law fraud, similar to the CFA’s “unconscionable commercial practice” standard. Blachly v. United States, 380 F.2d 665, 671 (5th Case 3:15-cv-08194-MAS-DEA Document 69 Filed 01/23/17 Page 26 of 37 PageID: 1233 25 Cir. 1967)(“The crime of mail fraud is board in scope. The fraudulent aspect… is measured by a nontechnical standard. Law puts its imprimatur on the accepted moral standards and condemns conduct which fails to match the ‘reflection of moral uprightness, of fundamental honesty, fair play and right dealing in the general and business life of members of society.’)(citations omitted). However, even though “[a] scheme or artifice to defraud need not be fraudulent on its face, [it] must involve some sort of fraudulent misrepresentation or omission reasonably calculated to deceive persons of ordinary prudence and comprehension.” Brokerage Concepts, Inc. v. U.S. Healthcare, Inc., 140 F.3d 494, 528 (3d Cir. 1998) (citation omitted). Here, the Lonstien Defendants’ use of the mails to pressure the Plaintiff to pay $10,000 evinced a lack of “moral uprightness” as well as dishonesty and deception. The letter made unqualified and unfounded representations that the Plaintiff’s use of the subscription that was activated at her salon was “unauthorized” and necessarily “had to have been… intended to purposely defraud DIRECTV, LLC [and] could only have been accomplished by overt acts done to avoid paying the legal subscription rate for a business viewing account within a commercial establishment” that Defendants had no knowledge or evidence to support. C. The Plaintiff has alleged sufficient facts to state a claim as to the existence of an “enterprise,” a “pattern of racketeering activity,” and violations of the NJRICO through “participation.” Case 3:15-cv-08194-MAS-DEA Document 69 Filed 01/23/17 Page 27 of 37 PageID: 1234 26 The Defendants arguments regarding the existence of an “enterprise” fail to account for the very broad meaning of the term under the NJRICO in comparison to the federal statute. Under the NJRICO, [t]he "enterprise" element will be satisfied if there exists a group of people, no matter how loosely associated, whose existence or association provides or implements the common purpose of committing two or more predicate acts. We go so far as to hold [that] the "enterprise" element is satisfied if the "enterprise" is no more than the sum of the racketeering acts. Thus, the "enterprise" does not have to be an organization whose purpose is greater than the predicate acts, nor does it have to evidence any definable structure. State v. Ball, 661 A.2d 251, 260 (1995)(citing and adopting the Appellate Division’s holding at 632 A.2d 1222] Clearly, the Plaintiff has sufficiently alleged an the existence of such a “group of people, no matter how loosely associated, whose existence or association provides or implements the common purpose of committing two or more predicate acts.” Id. The amended complaint alleges the existence of the Lonstien Law Firm, and its principals, Julie and Wayne Lonstien, whose demand letters and access to DirecTV customer lists allegedly implement the alleged extortion and other predicates, as well as SAI and Levine, whose role in soliciting strangers through internet advertisements to hunt down, spy on, and photograph beauticians and other small shop owners with non- commercial DirecTV subscriptions also “implements” the extortion and other predicates. Under the NJRICO, nothing else is required. Case 3:15-cv-08194-MAS-DEA Document 69 Filed 01/23/17 Page 28 of 37 PageID: 1235 27 The Defendants’ contention that the Plaintiff failed to identify a “RICO person” separate from the enterprise, even if correct, is irrelevant under the NJRICO, as this requirement, called the “Enright Rule” or “distinctiveness rule,” is applicable only to the federal statute, as observed by other judges in this district: Under the federal RICO statute, a plaintiff cannot name an enterprise as a defendant. Glessner v. Kenny, 952 F.2d 702, 711-12 (3d Cir. 1991); Brittingham v. Mobil Corp., 943 F.2d 297, 300-03 (3d Cir. 1991). This became known as the Enright rule, which was established to prevent the "persons" who make up the enterprise, from using the "enterprise" as a pass through to "extract money from third parties." Petro-Tech, Inc. v. Western Co. of North America, 824 F.2d 1349, 1359 (3d Cir. 1987). In stark contrast, the New Jersey courts have determined that NJRICO departs from its federal counterpart in defining "enterprise." Under N.J.S.A. 2C:41-1(b), a "'person' includes any individual, entity, or enterprise as defined [t]herein holding or capable of holding a legal or beneficial interest in property." Likewise, under N.J.S.A. 2C:41-1(c): "'Enterprise' includes any individual, sole proprietorship, partnership, corporation, business or charitable trust, association, or other legal entity, any union or group of individuals associated in fact, although not a legal entity, and it includes illicit as well as licit enterprises and governmental as well as other entities." The New Jersey courts have reasoned that since a "broader definition of 'person' eliminates the Enright distinctiveness rule for an action under New Jersey RICO," a plaintiff may name the enterprise and the various individuals who constitute that enterprise within the same count. Ball, 268 N.J. Super. at 107; Maxim Sewerage Corp., 273 N.J. Super at 95. Ford Motor Co. v. Edgewood Props., 2009 U.S. Dist. LEXIS 4172, at *40-42 (D.N.J. Jan. 20, 2009). See also Prudential Ins. Co. of Am. v. Credit Suisse Secs. LLC, 2013 U.S. Dist. LEXIS 142191, at *62 (D.N.J. Sep. 30, 2013)(“The weight of authority is that there is no distinctiveness requirement in New Jersey.”); New Case 3:15-cv-08194-MAS-DEA Document 69 Filed 01/23/17 Page 29 of 37 PageID: 1236 28 Jersey Reg'l Council of Carpenters v. D.R. Horton, Inc., 2011 U.S. Dist. LEXIS 109746, at *28 n.3 (D.N.J. Sept. 27, 2011)(“The New Jersey RICO statute has no distinctness requirement.”) The amended complaint also alleges sufficient facts to establish a “pattern of racketeering activity,” which is also more broadly defined by the NJRICO, requiring two “incidents” of racketeering activity, rather than the two “acts” required by the federal statute. N.J.S.A. 2C:41-1(d); 18 USCS § 1961(5). This been interpreted to include two incidents of conduct undertaken in furtherance of the same crime as to the same victim over a short period of time, provided the incidents are sufficiently related, as explained by another judge of this district: Unlike the federal statute, NJRICO, as interpreted by the New Jersey courts, does not place as much emphasis on "continuity," but instead, focuses on the "relatedness" of the activity. Metz v. United Counties Bancorp, 61 F. Supp. 2d 364, 373 (D.N.J. 1999) (citing Ball, 141 N.J. at 166-69) The New Jersey Supreme Court, opining in Ball, interpreted NJRICO to include short-term patterns of racketeering activity: In the most likely setting, predicate incidents [acts] of racketeering conduct will occur sequentially over a period of time. New Jersey's legislative discussions, unlike Congress', do not indicate a concern for reaching only long-term criminal activity. But short-term criminal activity, to be covered, must encompass incidents of criminal conduct that are not disconnected or isolated. Incidents of racketeering that occur sequentially, to overcome any inference that they are totally disconnected or isolated, must exhibit some temporal connection or continuity over time. Case 3:15-cv-08194-MAS-DEA Document 69 Filed 01/23/17 Page 30 of 37 PageID: 1237 29 Ball, 141 N.J. at 169…. Ford argues that Edgewood cannot plead a NJRICO claim, since the grounds of the claim are based upon a "single incident" involving a "single victim." (Ford's Opp. Br. at 15). Ford further argues that the nine-month time frame in which the alleged acts took place was too narrow to be actionable under NJRICO. Id. at 16. The statute, it argues, requires multiple incidents to more than one victim over a longer stretch of time, and in support of their position cite cases from this circuit interpreting federal RICO in that vain. Id…. This Court takes note that where the New Jersey courts are silent on a particular part of NJRICO, courts will look to federal law. But, there is guidance from the New Jersey courts on this issue. In Ball, liberally interpreting NJRICO, established that the statute permits short-term patterns of activity, provided that the related incidents are not disconnected or isolated. Ball, 141 N.J. at 169 Ford Motor Co. v. Edgewood Props., 2009 U.S. Dist. LEXIS 4172, at *44-48 (D.N.J. Jan. 20, 2009). The amended complaint sufficiently alleges the two incidents necessary to qualify as a “pattern of racketing activity” under the RICO, including the mailing of a letter on August 6, 2015 and another letter on August 16, 2015 by the Lonstein Law Firm and Julie Lonstein in furtherance of the alleged attempted extortion and other predicate crimes. Am. Compl. ¶¶41 - 45. The complaint also alleges that SAI and Levine took possession of a DirecTV commercial customer list for the purpose of identifying the Plaintiff, as well as other small business owners, as a target of the extortion and other predicates, advertised for and hired a person to spy on and photograph the Plaintiff and her customers, and, through its hired agent, Case 3:15-cv-08194-MAS-DEA Document 69 Filed 01/23/17 Page 31 of 37 PageID: 1238 30 spied on and photographed and the Plaintiff and her customers.4 See Am. Compl. ¶¶ 9, 10, 15, 16, 42. To the extent that the precise dates the SAI incidents and the names of the hires involved are not included, it is because they are known only the Defendants at this time, and any pleading defects resulting from this circumstance can be addressed following discovery, and in any event do not at all diminish the amended complaint’s sufficiency as notice to the Defendants of the nature of the claims against them. Finally, the amended complaint sufficiently alleges that the Defendants violated the NJRICO, at N.J.S.A. 2C:41-2(c), which prohibits any person from participating in racketeering activity in the conduct of an enterprise. “In order to prove a violation of N.J.S.A. 2C:41-2(c), a plaintiff must allege: ‘(1) the existence of an enterprise; (2) that the enterprise engaged in or its activities affected trade or commerce; (3) that defendant was employed by, or associated with the enterprise; (4) that he or she participated in the affairs of the enterprise; and (5) that he or she participated through a pattern of racketeering activity.’ Shan Indus., LLC v. Tyco Int'l (US), Inc., 2005 U.S. Dist. LEXIS 37983, at *46-47 (D.N.J. Sep. 9, 2005)(citing State v. Ball, supra, 661 A.2d at 271). As discussed 4 Even under the federal RICO standard, the Plaintiff has sufficiently alleged a pattern by identifying another, similar incident in which the Defendants attempted to extort money from another small business owner by accusing him of “unauthorized” commercial use his DirecTV subscription, but whose subscription had in fact been installed, activated, and authorized for use in a commercial setting by DirecTV through its agent. Am. Compl., ¶25, Exh. A. Case 3:15-cv-08194-MAS-DEA Document 69 Filed 01/23/17 Page 32 of 37 PageID: 1239 31 earlier, the amended complaint states the existence of an enterprise, and each Defendants’ participation through a pattern of racketeering activity. The other elements are easily met (and not challenged by the Defendants), and unlike its federal counterpart, the NJRICO does not limit “participation” violations to managers and supervisors: [W]e conclude that the New Jersey statute does not contain a requirement that in order "to conduct or participate in an enterprise," a defendant must be found to exercise responsibilities of "operation or management." We hold that under N.J.S.A. 2C:41-2c, a person is "employed by or associated with an enterprise" if he or she has a position or a functional connection with the enterprise that enables him or her to engage or participate directly or indirectly in the affairs of the enterprise. Further, we hold that to conduct or participate in the affairs of an enterprise means to act purposefully and knowingly in the affairs of the enterprise in the sense of engaging in activities that seek to further, assist or help effectuate the goals of the enterprise. Those activities may include acts that are managerial or supervisory or exercise control and direction over the goals, or over the methods used to achieve the goals, of the enterprise. Participatory conduct or activities also may be found in acts that are below the managerial or supervisory level, and do not exert control or direction over the affairs of the enterprise, as long as the actor, directly or indirectly, knowingly seeks to carry out, assist, or further the operations of the enterprise or otherwise seeks to implement or execute managerial or supervisory decisions. State v. Ball, at 267-268. The above requirements for association and participation are alleged in the amended complaint as to all Defendants, and have not been challenged by the Defendants. D. The Plaintiff has alleged sufficient facts to state standing to bring a claim for treble damages under the NJRICO. Case 3:15-cv-08194-MAS-DEA Document 69 Filed 01/23/17 Page 33 of 37 PageID: 1240 32 The NJRICO provides a right of action for treble damages and attorney’s fees to “[a]ny person damaged in his business or property by reason of a violation…” N.J.S.A. 2C:41-4. Here the Plaintiff has sufficiently alleged such damage caused by the Defendants’ attempted extortion and other predicate acts, including the imposition of wrongful debt, attorney’s fee obligations incurred to address the threats of legal action, and the disconnection of satellite television services for which she had paid. Courts have found sufficient damages and standing in cases of attempted extortion, even where the victim refused to pay the money demanded. See, e.g., Desmond v. Siegel, 2012 U.S. Dist. LEXIS 109579, at *19-22 (D.N.J. Aug. 6, 2012); Northeast Women's Center, Inc. v. McMonagle, 689 F. Supp. 465, 473-74 (E.D. Pa. 1988). In Northeast Women’s Center, the court recognized that requiring victims of to pay the wrongful demands before suing would subject them to untenable hardship and subvert the statue’s purpose: Defendants claim that the court erred by instructing the jury that a conspiracy to commit extortion or attempted extortion may be proper predicate offenses under RICO, since, by definition, the required impact on plaintiffs' business and property is absent. This court disagrees. Sufficient evidence was adduced at trial and the jury so found that plaintiffs' property and business was harmed due to the actions of the defendants -- whether the actions go under the label of actual extortion, attempted extortion, or conspiracy to commit extortion. If defendants' assertion was correct, innocent parties would have to be completely driven out of business in order to collect damages under RICO, rather than obtaining relief from, and damages for the actions of violators when they are ongoing and continuous. Case 3:15-cv-08194-MAS-DEA Document 69 Filed 01/23/17 Page 34 of 37 PageID: 1241 33 Interpreting the law as defendants assert would reward them for their valiant but unsuccessful attempts. Northeastern Woman’s Center, at 473-74. In Desmond v. Siegel, 2012 U.S. Dist. LEXIS 109579 (D.N.J. Aug. 6, 2012), the court held that damages in cases of attempted extortion may include “costs associated with remediating or taking legal action against RICO conduct amount to an "out-of-pocket loss" that is actionable under RICO.(citing Weiss v. First Unum Life Ins. Co., 482 F.3d 254, 258 n. 2 (3d Cir. 2007)). Recently, the 2nd Circuit has held that “[t]he imposition of a wrongful debt5 constitutes an injury to one's business or property” even if it has not been paid. Chevron Corp. v. Donziger, 833 F.3d 74, 135 (2d Cir. 2016). In Chevron, the plaintiff was subjected to a fraudulent lawsuit in a corrupt, foreign court and incurred a substantial wrongful debt. Id. The Court held that this “imposition of wrongful debt” constituted sufficient damage to confer standing under RICO, notwithstanding that the plaintiff did not pay or intend to pay it. Id. The Court also identified as injuries the plaintiff’s temporary loss of use of funds as a result of attachments issued on the wrongful judgment, as well as legal fees incurred by the plaintiff in defending the wrongful lawsuit and in the federal suit against the defendant. Id. 5 The term “wrongful debt” is intended in the ordinary sense, , and is not to be confused with “unlawful debt” which is a specifically defined term of art in the NJRICO, at N.J.S.A. 2C:41-1 meaning debt imposed by illegal gambling or usury. Case 3:15-cv-08194-MAS-DEA Document 69 Filed 01/23/17 Page 35 of 37 PageID: 1242 34 Thus, there is ample authority to support the damages alleged by the Plaintiff as “damage to property or business” caused by the Defendants’ extortion to confer standing to sue under the NJRICO. IV. THE PLAINTIFF HAS PLEADED ANY CLAIMS SUBJECT TO RULE 9(b) WITH SUFFICIENT PARTICULARITY. ALTERNATIVELY, IF THE COURT FINDS ANY DEFICIENCIES, THE PLAINTIFF REQUESTS LEAVE TO AMEND TO CORRECT FORMAL DEFICIENIES, IF ANY. The chief judge of this district has recently noted that "The purpose of Rule 9(b) is to provide notice, not to test the factual allegations of the claim." Morganroth & Morganroth v. Norris, McLaughlin & Marcus, P.C., 331 F.3d 406, 414 n.2 (3d Cir. 2003). "[T]he law does not require specificity just for specificity's sake. The level of particularity required is sufficient details to put Defendants on notice of the "precise misconduct with which they are charged." Smajlaj, [v. Campbell Soup Co., 782 F. Supp. 2d 84, 104 (D.N.J. 2011)] Plaintiff has clearly put Defendant on notice as to the basis for its fraud claim: Defendant's use of the MCI and TruMotion rating systems. Additional specificity as to all the locations where those systems were used would be "specificity just for specificity's sake." Smajlaj, 782 F. Supp. 2d at 104. Eberhart v. LG Elecs. USA, Inc., 2015 U.S. Dist. LEXIS 173073, at *13 (D.N.J. Dec. 30, 2015). The amended complaint lays out the nature of the Defendants’ scheme to extort money from the Plaintiff and other small business owners through their access to DirecTV customer records, and knowledge of the existence of a vulnerable population of small business owners who were sold non-commercial services by authorized agents of DirecTV. It describes the parties involved, their roles, the dates Case 3:15-cv-08194-MAS-DEA Document 69 Filed 01/23/17 Page 36 of 37 PageID: 1243 35 of the letters and other instances when available. In short, the complaint puts the Defendants on notice of the claims against them sufficient to satisfy Rule 9(b). To the extent that the Court perceives any deficiencies in the level of specificity of pleading of claims subject to Rule 9(b), the Plaintiff requests leave to amend her complaint. While the Defendants are correct that there has already been an amendment, it was made to address the dismissal of parties and to pare claims, and not to address pleading deficiencies, and so should not prejudice the Plaintiff’s entitlement to an additional amendment. See In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1435 (3d Cir. 1997)(“Ordinarily, complaints dismissed under Rule 9(b) are dismissed with leave to amend.” CONCLUSION Plaintiff therefore requests that the Court deny Defendants’ motions . January 23, 2017 s/ Henry P. Wolfe________ Henry P. Wolfe, The Wolf Law Firm, LLC Co-counsel for the Plaintiff Case 3:15-cv-08194-MAS-DEA Document 69 Filed 01/23/17 Page 37 of 37 PageID: 1244 Case 3:15-cv-08194-MAS-DEA Document 69-1 Filed 01/23/17 Page 1 of 1 PageID: 1245