Simmons v. Jackson et al

Motion to Dismiss for Failure to State a Claim

N.D. Tex.August 16, 2016

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS DALLAS DIVISION JASON SIMMONS, Plaintiff, V. RAY JACKSON, METHODIST HOSPITALS OF DALLAS, SIMON D. WHITING, OSCAR SAN MIGUEL, TEXAS MEDICAL BOARD, Defendants. § § § § § § § § § § § § CIVIL ACTION NO. 3:15-CV-1700-D ______________________________________________________________________________ DEFENDANT SIMON D. WHITING’S INITIAL 12(b)(6) MOTION TO DISMISS and BRIEF IN SUPPORT ______________________________________________________________________________ TO THE HONORABLE JUDGE FITZWATER: This Court should dismiss Plaintiff Jason Simmons (“Plaintiff”) claims against Defendant Simon D. Whiting (“Whiting”) for fraud and conspiracy under 18 U.S.C.1962 (a)–(d) because these claims are barred by attorney immunity, and Plaintiff fails to state a claim upon which relief may be granted. I. INTRODUCTION Even though both of his meritless employment discrimination suits were dismissed, Plaintiff now seeks again to recover against the same parties, their attorney, and his own attorneys, claiming the parties (and his own attorneys) were involved in a RICO scheme. Plaintiff’s 187-page complaint consists of a string of conclusory allegations regarding actions undertaken by the parties and their attorneys in lawsuits. SIMON D. WHITING’S INITIAL MOTION 12(b)(6) MOTION TO DISMISS AND BRIEF IN SUPPORT 1 2516411v1 04335.277 Case 3:15-cv-01700-D Document 106 Filed 08/16/16 Page 1 of 20 PageID 3835 Plaintiff’s claims against Whiting should be dismissed because (1) Plaintiff’s claims are barred by the attorney immunity doctrine, and (2) Plaintiff’s Complaint fails to state a claim. Specifically, Plaintiff has not adequately pleaded the necessary elements to recover under 18 U.S.C. § 1962(a), (b), (c), or (d). For these reasons, Plaintiff’s claims against Whiting should be dismissed. II. FACTUAL HISTORY This suit arises from two previously filed—and dismissed—employment discrimination suits. First, on January 4, 2011, Plaintiff filed suit in the Northern District of Texas against Methodist Hospitals of Dallas (“Methodist Hospital”), alleging employment discrimination based on race (the “First Suit”). (ECF 1) In the First Suit, Plaintiff was represented by Ray Jackson (“Jackson”), and Methodist Hospital was represented by Whiting. (ECF 1, 4) On behalf of Methodist Hospital, Whiting filed a motion for summary judgment on January 27, 2012. (ECF 12) On February 3, 2012, the parties agreed to forego mediation, (ECF 15), and on April 26, 2012, Methodist Hospital’s motion for summary judgment was granted, dismissing the First Suit. (ECF 31) On August 18, 2014, proceeding pro-se, Plaintiff again filed suit in the same court against Methodist Hospitals of Dallas (“Methodist Hospital”), alleging the same employment discrimination claims he had asserted in the First Suit (the “Second Suit”). (ECF 3) Methodist Hospital was again represented by Whiting in the Second Suit. (ECF 8, 9) On October 14, 2014, Whiting filed a motion to dismiss on Methodist Hospital’s behalf. (ECF 15). On May 1, 2015, Methodist Hospital’s motion to dismiss was granted, dismissing Plaintiff’s Second Suit with prejudice. (ECF 35). SIMON D. WHITING’S INITIAL MOTION 12(b)(6) MOTION TO DISMISS AND BRIEF IN SUPPORT 2 2516411v1 04335.277 Case 3:15-cv-01700-D Document 106 Filed 08/16/16 Page 2 of 20 PageID 3836 On May 7, 2015, Plaintiff filed suit against his former attorney, Jackson, alleging various fraud and breach of fiduciary duty claims related to the First Suit. (Plaintiff’s Original Complaint, ECF 1) Plaintiff amended his complaint for the third time on July 8, 2016, and added Whiting as a Defendant, asserting several baseless claims for fraud, conspiracy, and racketeering under federal law. (Plaintiff’s Third-Amended Complaint, ECF 80) Plaintiff’s claims against Whiting are based entirely on actions undertaken by Whiting in the course of representing Methodist Hospital in the First and Second Suits. III. RULE 12(B)(6) MOTION TO DISMISS ALL CLAIMS AGAINST WHITING A. The Legal Standard Under Federal Rule of Civil Procedure 12(b)(6) Following the United States Supreme Court’s decision in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), the pleading standard under Rule 8 of the Federal Rules of Civil Procedure demands more than “unadorned accusations” that the defendant caused unlawful harm. Aschroft v. Iqbal, 556 U.S. 662, 678 (2009). In order to survive a Rule 12(b)(6) motion, a plaintiff’s complaint must state the grounds for entitlement to relief, including factual allegations sufficient to show that the claim is facially plausible. Id. at 555–56; Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555–56 (2007); see also FED. R. CIV. P. 12(b)(6). “The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Iqbal, 556 U.S. at 663 (quoting Twombly, 550 U.S. at 556). A claim is not facially plausible unless the facts alleged in the complaint, taken as true, allow the court to draw a reasonable inference that the defendant is liable for the misconduct alleged. Twombly, 550 U.S. 555–56; Iqbal, 556 U.S. at 663 (“Where a complaint pleads facts that are merely consistent with a defendant’s liability, it stops short of the line between possibility and plausibility of entitlement to relief.”) (internal citations omitted). While the court SIMON D. WHITING’S INITIAL MOTION 12(b)(6) MOTION TO DISMISS AND BRIEF IN SUPPORT 3 2516411v1 04335.277 Case 3:15-cv-01700-D Document 106 Filed 08/16/16 Page 3 of 20 PageID 3837 should accept as true all allegations in the complaint and the reasonable inferences that can be drawn from them, the court is not bound to accept as true legal conclusions couched as factual allegations. Iqbal, 556 at 679. In fact, the court may disregard such legal conclusions when the complaint includes only “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements.” Twombly, 550 U.S. at 678–79. Simply put, under Twombly and Iqbal, a pleading that offers “labels and conclusions” or “a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 557. And a complaint that tenders “naked assertions” devoid of further factual enhancement will not suffice. Id.; see also Iqbal, 556 U.S. at 678. As set forth below, the First Amended Complaint fails to meet the most basic of pleading standards and should be dismissed as to Whiting. B. PLAINTIFF’S CLAIMS ARE BARRED BY THE ATTORNEY IMMUNITY DOCTRINE. Under Texas law, attorneys are immune from civil liability to non-clients “for actions taken in connection with representing a client in litigation.” Cantey Hanger, LLP v. Byrd, 467 S.W.3d 477, 482 (Tex. 2015) (citing Alpert v. Crain, Caton & James, P.C., 178 S.W.3d 398, 405 (Tex. App.—Houston [1st Dist.] 2005, pet. denied)); see Barcelo v. Elliott, 923 S.W.2d 575, 577 (Tex. 1996) (“[A]n attorney does not owe a professional duty of care to third parties who are damaged by the attorney’s . . . representation of a client.”). Although attorney immunity is an affirmative defense in Texas, it operates as a complete bar to civil liability, and “[c]onduct covered by attorney immunity is ‘not actionable.’” Troice v. Proskauer Rose, L.L.P., 816 F.3d 341, 347 (5th Cir. 2016) (quoting Cantey Hanger, 467 S.W.3d at 481). Attorney immunity doctrine’s purpose is to “allow an attorney to fulfill his duty and zealously represent his clients within the bounds of the law by fully taking advantage of a client’s rights and defenses without the threat of liability.” Santiago v. Mackie Wolf Zientz & SIMON D. WHITING’S INITIAL MOTION 12(b)(6) MOTION TO DISMISS AND BRIEF IN SUPPORT 4 2516411v1 04335.277 Case 3:15-cv-01700-D Document 106 Filed 08/16/16 Page 4 of 20 PageID 3838 Mann, P.C., 05-13-00620-CV, 2014 WL 4072131, at *2 (Tex. App.—Dallas Aug. 19, 2014, pet. denied). As such, when evaluating attorney immunity, Texas courts focus on the type of conduct performed by the attorney and not the conduct’s nature. See Alpert, 178 S.W.3d at 406. Thus, an attorney is immune from liability even if his conduct is allegedly fraudulent, as long as that conduct is “part of the discharge of the lawyer’s duties in representing his or her client.” Cantey Hanger, 467 S.W.3d at 482–83; see Dixon Fin. Servs., Ltd. v. Greenberg, Peden, Siegmyer & Oshman, P.C., No. 01–06–00696–CV, 2008 WL 746548, at *9 (Tex. App.—Houston [1st Dist.] March 20, 2008, pet. denied) (mem. op. on reh’g) (“Characterizing an attorney’s action in advancing his client’s rights as fraudulent does not change the rule that an attorney cannot be held liable for discharging his duties to his client.”); Alpert, 178 S.W.3d at 406 (holding that merely labeling an attorney’s conduct “fraudulent” does not and should not remove it from the scope of client representation or render it “foreign to the duties of an attorney.”). Texas courts have deemed actions such as filing lawsuits and pleadings, providing legal advice to the client, or any other conduct that requires the professional training, skill and authority of an attorney as being part of the discharge of an attorney’s duties in representing his client, regardless of the action’s allegedly-fraudulent nature. See Alpert v. Crain, Caton & James, P.C., 178 S.W.3d 398, 408 (Tex. App.—Houston [1st Dist.] 2005, pet. denied) (holding that a claim against an attorney for conspiracy to defraud was not actionable under attorney immunity doctrine where “the complained-of actions involve[d] the filing of lawsuits and pleadings, the providing of legal advice upon which the client acted, and awareness of settlement negotiations—in sum, acts taken and communications made to facilitate the rendition of legal services to [the client]”); see also Highland Capital Mgmt., LP v. Looper Reed & McGraw, P.C., 05-15-00055-CV, 2016 WL 164528, at *6 (Tex. App.—Dallas Jan. 14, 2016, pet. denied) SIMON D. WHITING’S INITIAL MOTION 12(b)(6) MOTION TO DISMISS AND BRIEF IN SUPPORT 5 2516411v1 04335.277 Case 3:15-cv-01700-D Document 106 Filed 08/16/16 Page 5 of 20 PageID 3839 (“Nonetheless, the actions themselves—acquiring documents from a client that are the subject of litigation against the client . . . making demands on the client’s behalf . . . speaking about an opposing party in a negative light, [and] advising a client on a course of action . . . are the kinds of actions that are part of the discharge of an attorney’s duties in representing a party in hard- fought litigation.”); Dixon Fin. Servs., 2008 WL 746548, at *7 (“[A]n attorney cannot be held liable to a third party for conduct that requires the office, professional training, skill, and authority of an attorney.” (citation and internal quotation marks omitted)). Here, Plaintiff alleges several claims against Whiting in his Third-Amended Complaint, including claims for fraud and conspiracy under federal law. (Plaintiff’s Third-Amended Complaint, ECF 80) But each of Plaintiff’s claims is based on actions undertaken by Whiting in the course of his legal representation of Methodist Hospital. (Plaintiff’s Third-Amended Complaint, ECF 80, ¶ 144:3927–145:3945) Specifically, Plaintiff complains that: (1) acting as Methodist Hospital’s agent, Whiting facilitated communication between the hospital and Jackson regarding the alleged conspiracy against Plaintiff (Plaintiff’s Third-Amended Complaint, ECF 80, ¶ 43:415–416); (2) Whiting strategized in order to agree with Jackson to forego mediation and quickly dispose of Plaintiff’s suit (Plaintiff’s Third-Amended Complaint, ECF 80, ¶ 43:416– 419); and (3) Whiting filed false affidavits to obtain dismissal of Plaintiff’s claims. (Plaintiff’s Third-Amended Complaint, ECF 80, ¶ 54:775–777). Accepting Plaintiff’s allegations as true, each of these actions falls squarely within the ambit of Whiting’s discharge and rendering of legal services to his client. Plaintiff’s claims against Whiting are therefore barred as a matter of law. See Alpert, 178 S.W.3d at 408; Highland Capital Mgmt., LP, 2016 WL 164528 at *6. And even if Whiting’s actions were fraudulent (which they were not), as Plaintiff alleges, Whiting’s conduct reflects that of an attorney advocating for his client. See Cantey Hanger, 467 S.W.3d at SIMON D. WHITING’S INITIAL MOTION 12(b)(6) MOTION TO DISMISS AND BRIEF IN SUPPORT 6 2516411v1 04335.277 Case 3:15-cv-01700-D Document 106 Filed 08/16/16 Page 6 of 20 PageID 3840 482–83; Alpert, 178 S.W.3d at 406; Santiago, 2014 WL 4072131 at *2. As such, Plaintiff’s claims against Whiting are barred by the attorney immunity doctrine, and Whiting asks that the Court dismiss Plaintiff’s claims. C. Plaintiff Fails to State a Claim Against Whiting Under RICO (18 U.S.C. § 1962(a), (b),(c), and (d)) Plaintiff alleges that Whiting and his client, Methodist Hospital, violated 18 U.S.C. § 1962(a), (b), (c), and (d) of the Racketeer Influence and Corrupt Organization Act (“RICO”). (ECF 80 at 36, ¶¶ 182–184) Because of the cost and stigma of defending RICO claims, courts must closely scrutinize them and “should strive to flush out frivolous RICO allegations at an early stage of the litigation.” Ruiz v. Alegria, 896 F.2d 645, 650 (1st Cir. 1990). The onus of asserting clear and understandable allegations falls squarely on the plaintiff, who cannot avoid that obligation by filing a confusing complaint that requires the court or the defendant to strain in an attempt to comprehend the incomprehensible. See, e.g., Old Time Enterprises, Inc. v. Int’l Coffee Corp., 862 F.2d 1213, 1218 (5th Cir. 1989) (dismissing RICO allegations and stating “[i]t is perhaps not impossible that a RICO claim may lie hidden or buried somewhere in [plaintiff’s] complaints and the Standing Order case statement. [Plaintiff’s] pleadings do not unequivocally negate such a possibility. However, they also do not state a RICO claim against defendants with sufficient intelligibility for a court or opposing party to understand whether a valid claim is alleged and if so what it is.”) In the simplest terms 18 U.S.C. § 1962(a), (b), (c), and (d) provide that: (a) a person who has received income from a pattern of racketeering activity cannot invest that income in an enterprise; (b) a person cannot acquire or maintain an interest in an enterprise through a pattern of racketeering activity; (c) a person who is employed or associated with an enterprise cannot conduct the affairs of the enterprise through a pattern of racketeering activity; and SIMON D. WHITING’S INITIAL MOTION 12(b)(6) MOTION TO DISMISS AND BRIEF IN SUPPORT 7 2516411v1 04335.277 Case 3:15-cv-01700-D Document 106 Filed 08/16/16 Page 7 of 20 PageID 3841 (d) a person cannot conspire to violate subsections (a), (b), or (c). Crowe v. Henry, 43 F.3d 198, 203 (5th Cir. 1995). Each subsection of section 1962 has common elements that apply to all RICO claims. Specifically, to adequately state a RICO claim, there must be (1) a RICO person, (2) a pattern of racketeering activity, and (3) a RICO enterprise. See, e.g., St. Paul Mercury Ins. Co. v. Williamson, 224 F.3d 425, 439 (5th Cir. 2000). Even if these three common elements are adequately pleaded (they are not here), additional substantive pleading requirements must be met for each specific subsection. See Elliot v. Foufas, 867 F.2d 877, 880 (5th Cir. 1989) (commenting on “deceptively simple” nature of common elements because “each concept is a term of art which carries its own inherent requirements of particularity”). Here, Plaintiff fails to plead sufficient facts to establish “a pattern of racketeering activity,” as well as, an “enterprise.” Plaintiff also fails to plead claims under 18 U.S.C. § 1962 (a), (b), (c), and (d) with sufficient specificity to survive a motion to dismiss. 1. Plaintiff Fails to Plead a “Pattern of Racketeering Activity” Racketeering activity must consist of at least two predicate offenses, defined in RICO as “any act or threat involving” certain state law crimes or any act indictable under specified federal statutes and certain federal offenses. See 18 U.S.C. § 1961(1); Dennis v. General Imaging, Inc., 918 F.2d 496, 511 (5th Cir. 1990). To establish a pattern of racketeering activity, a plaintiff must allege: (1) the predicate acts of racketeering activity, and (2) a pattern of such acts. Dennis, 918 F.2d at 511. A pattern of racketeering activity includes two or more acts of racketeering. See 18 U.S.C. §1961(5). A “‘pattern’ requires both that the acts are ‘related’ to each other and that they have ‘continuity.’” In re Burzynski, 989 F.2d 733, 742 (5th Cir. 1993). “It is this factor of continuity plus relationship which combines to produce a pattern.” H.J., Inc. v. Nw. Bell Tel. Co., 492 U.S. 229, 239 (1989) (emphasis in original). The plaintiff must allege facts showing SIMON D. WHITING’S INITIAL MOTION 12(b)(6) MOTION TO DISMISS AND BRIEF IN SUPPORT 8 2516411v1 04335.277 Case 3:15-cv-01700-D Document 106 Filed 08/16/16 Page 8 of 20 PageID 3842 that the predicate acts are related, i.e., they “have the same or similar purposes, results, participants, victims, or methods of commission, or otherwise are interrelated by distinguishing characteristics and are not isolated events.” H.J., Inc., 492 U.S. at 240. And the continuity element requires that the related acts “constitute or threaten long-term criminal activity.” Burzynski, 989 F.2d at 742 (citing H.J., Inc., 492 U.S. at 239). Continuity may be proved by “a closed period of repeated conduct, or . . . past conduct that by its nature projects into the future with a threat of repetition.” H.J., Inc., 492 U.S. at 241. “A closed period of conduct may be demonstrated ‘by proving a series of related predicates extending over a substantial period of time,’” while “[a]n open period of conduct involves the establishment of ‘a threat of continued racketeering activity.’” Word of Faith World Outreach Ctr. Church, Inc. v. Sawyer, 90 F.3d 118, 122 (5th Cir.1996) (citing H.J., Inc., 492 U.S. at 242–43). Plaintiff has failed to plead sufficient facts to establish the necessary predicate acts, much less that the alleged acts are related and have continuity. Plaintiff alleges Defendants committed numerous predicate acts arising from the defense of the two underlying lawsuits, including, among other things, mail fraud, wire fraud, perjury. (See, e.g., ECF 80 at 44, ¶¶ 444–461) But Plaintiff’s Third Amended Complaint does little more than recite the statutory text of the alleged offenses in conclusory fashion and does not include any facts to suggest allegedly wrongful conduct. Elliot, 867 F.2d at 880 (finding inadequate “allegations [that] substantially rescript the language of the statute in conclusory form”). The offenses of mail and wire fraud must be pleaded with particularity, including the time, place, and specific content of the fraudulent communications, as well as the parties to the communication, and the how the communications advanced the alleged scheme. See Elliott, 867 F.2d at 882. But here, Plaintiff eschews such necessary factual specificity in favor of vague and conclusory SIMON D. WHITING’S INITIAL MOTION 12(b)(6) MOTION TO DISMISS AND BRIEF IN SUPPORT 9 2516411v1 04335.277 Case 3:15-cv-01700-D Document 106 Filed 08/16/16 Page 9 of 20 PageID 3843 allegations that fall far short. (ECF 80 at 44, ¶¶ 444–461) Plaintiff’s strategy of lumping together all Defendants and alleging that they collectively committed vaguely-described predicate acts makes it impossible to discern which Defendants committed the alleged predicate acts of racketeering activity or when such acts occurred. Plaintiff’s Third Amended Complaint fares no better with respect to pleading that the predicate acts are “related” and have “continuity.” Plaintiff fails to plead any facts in support of his allegations that the predicate acts are “related” and have “continuity, other than to generally allege that the Defendants’ predicate acts all involved the same participants, victim, and purpose, and were committed “spanned from June 2010 to June 2014.” (ECF 80, at 55, ¶ 847) Plaintiff’s conclusory allegations are unsupported by facts, and he fails to demonstrate that the alleged predicate acts are related or that they amount to or pose a threat of continued criminal activity. See World of Faith Outreach Ctr. Church, Inc. v. Sawyer, 90 F.3d 118, 122 (5th Cir. 1996). 2. Plaintiff Fails to Plead an “Enterprise” RICO was enacted to combat organized crime, i.e., an aggregation of persons and/or entities who have made criminal activity into a business. Its original purpose underscores the fundamental premise that without an “enterprise,” i.e., an overarching organization separate and apart from criminal acts, even those engaged in collectively, there is no RICO violation. See Delta Truck & Tractor, Inc. v. J.I. Case Co., 855 F. 2d 241, 242 (5th Cir. 1988) (“[RICO’s] sanctions . . . were not intended to extend to fraudulent commercial transactions affecting interstate commerce.”). A plaintiff asserting a RICO claim must allege the existence of a RICO enterprise, which can be either a legal entity or an association-in-fact. Crowe, 43 F.3d at 204. The establishment of a RICO enterprise must be pleaded using specific facts, not merely conclusory allegations. Montesano v. Seafirst Commercial Corp., 818 F.2d 423, 427 (Tex. 1987); see also Stanissis v. SIMON D. WHITING’S INITIAL MOTION 12(b)(6) MOTION TO DISMISS AND BRIEF IN SUPPORT 10 2516411v1 04335.277 Case 3:15-cv-01700-D Document 106 Filed 08/16/16 Page 10 of 20 PageID 3844 DynCorp. Int’l LCC, Nos. 3:14-CV-2736-D; 3:15-CV-2026-D, 2015 WL 9478184, at *4 (N.D. Tex. Dec. 29, 2015). Because “enterprise” is a specific term that means more than just a group of co- conspirators acting with a common scheme, pleading a RICO enterprise is a demanding exercise. “RICO defines an enterprise as ‘any individual, partnership, corporation, association or other legal entity, and any union or group of individuals associated in fact although not a legal entity.’” Allstate Ins. Co. v. Plambeck, 802 F.3d 665, 673 (5th Cir. 2015); see also 18 U.S.C. § 1961(4). An “association-in-fact enterprise is a group of persons associated together for a common purpose of engaging in a course of conduct . . . proved by evidence of an ongoing organization, formal or informal, and by evidence that the various associates function as a continuing unit.” Boyle v. United States, 556 U.S. 938, 945–46 (2009) (citations omitted). An association-in-fact enterprise “(1) must have an existence separate and apart from the pattern of racketeering, (2) must be an ongoing organization and (3) its members must function as a continuing unit as shown by a hierarchical or consensual decision making structure.” Calcasieu Marine Nat’l Bank v. Grant, 943 F.2d 1453, 1461 (5th Cir.1991). Furthermore, the enterprise “must be ‘an entity separate and apart from the pattern of activity in which it engages.’” Montesano, 818 F.2d at 427 (quoting United States v. Turkette, 452 U.S. 576, 583 (1981)). Based on the allegations in Plaintiff’s Third Amended, it is impossible to decipher who or what comprises the purported RICO enterprise (because there is no such enterprise), and whether such enterprise is comprised of an individual, partnership, corporation, association or other legal entity, or an association in fact. On the one hand, Plaintiff claims that Methodist of Dallas Hospital “exists to provide medical services for patients and to train resident medical doctors” (ECF 80 at 41, ¶¶ 350–51), that the attorney defendants “are all licensed attorneys by the Texas SIMON D. WHITING’S INITIAL MOTION 12(b)(6) MOTION TO DISMISS AND BRIEF IN SUPPORT 11 2516411v1 04335.277 Case 3:15-cv-01700-D Document 106 Filed 08/16/16 Page 11 of 20 PageID 3845 State Bar” (ECF 80 at 41, ¶¶ 356–57); “Cristal Cienfuegos provides notary services for the state of Texas” (ECF 80 at 41, PP362–363); and the “Texas Medical Board operates to oversee the credentialing of medical doctors and to provide medical licensing services” (ECF 80 at 42, ¶¶ 367–68). On the other hand, Plaintiff follows these allegations with a conclusory assertion that the “‘MHD Enterprise’ formed for the criminal purposes of: depriving the plaintiff of the ability to exercise his property right, depriving plaintiff of the ability to protect his property right, and; defrauding the US government.” (ECF 80 at 42, ¶¶ 374–76). On their face, these allegations fail to articulate the existence of a RICO enterprise. See Stanissis, 2015 WL 9478184, at *4.1 Even assuming Plaintiff’s First Amended Complaint could be read to allege that Whiting and his client, Methodist Hospital, comprised an association-in-fact, together with the other named attorneys, Plaintiff still fails to adequately plead the existence of a RICO enterprise. There is no allegation of an ongoing organization. See Stanissis, 2015 WL 9478184, at *3. There is no allegation of the existence of an organization or association separate and apart from the alleged pattern of racketeering. Elliot, 867 F.2d at 881 (“The fact that officers or employees of a corporation, in the course of their employment, associated to commit predicate acts does not establish an association-in-fact enterprise distinct from the corporation.”). Furthermore, there is no allegation that Whiting, his client, Methodist Hospital, and the other Defendants are (or ever did) function as a continuing unit, apart from the commission of predicate acts. Montesano, 818 F.2d at 427 (holding that an association “is not an enterprise within the purview of RICO because it lacks continuity,” and noting that “association-in-fact enterprises . . . must have an ongoing organization or be a continuing unit, such that the enterprise has an existence that can be 1 Plaintiff makes no allegation that Methodist of Dallas Hospital alone is the RICO enterprise. Even if it did, such claim would be insufficient to plead the existence of a RICO enterprise because “[i]f the defendant is a legal entity, the plaintiffs must do more than merely establish that the corporation, through its agents, committed the predicate acts in the conduct of its own business.” Elliot v. Foufas, 867 F.2d 877, 881 (5th Cir. 1989). SIMON D. WHITING’S INITIAL MOTION 12(b)(6) MOTION TO DISMISS AND BRIEF IN SUPPORT 12 2516411v1 04335.277 Case 3:15-cv-01700-D Document 106 Filed 08/16/16 Page 12 of 20 PageID 3846 defined apart from the commission of the predicate acts.”) Because “the plaintiff must plead specific facts which establish that the association exists for purposes other than simply to commit the predicate acts,” and because Plaintiff has not done so, it fails to state a claim under RICO. Elliot, 867 F.2d at 881. Additionally, Plaintiff makes no allegations regarding a decision making structure. See Marriott Bros. v. Gage, 704 F. Supp. 731, 742 (N.D. Tex. 1988) (“[T]he enterprise must have an ascertainable structure distinct from the pattern of racketeering activity. If nothing joins the association members except the commission of the predicate acts, there is no enterprise. The enterprise must also have a decision-making structure, be it consensual or hierarchical, which directs the enterprises’ affairs on an on-going, not ad hoc basis.”) (citations omitted). At most, Plaintiff’s assertions amount to a conclusory and speculative assertion that the various defendants conspired to commit fraud. This kind of allegation is not enough to establish an association-in-fact RICO enterprise. See Bachman v. Bear, Stearns & Co., Inc., 178 F.3d 930, 931–32 (7th Cir. 1999) (affirming dismissal of RICO claims under Rule 12(b)(6) because allegations failed to establish RICO enterprise; although allegations may have amounted to conspiracy to defraud plaintiff “if [the defendants] are a RICO organization, then every conspiracy to commit fraud is a RICO organization and consequently every fraud that requires more than one person to commit is a RICO violation. That is not the law.”). Because Plaintiff has not adequately pleaded the existence of a RICO enterprise, the Court should dismiss each of Plaintiff’s claims under each subsection of 18 U.S.C. § 1962. 3. Plaintiff Fails to State a Claim Under 18 U.S.C. § 1962(a) Although Plaintiff generally alleges claims under 18 U.S.C. § 1962(a)–(d) (ECF at 36, ¶¶ 182–184), Plaintiff’s Third Amended Complaint does not appear to state a claim under 1962(a), which prohibits a person who has received income from a pattern of racketeering activity from SIMON D. WHITING’S INITIAL MOTION 12(b)(6) MOTION TO DISMISS AND BRIEF IN SUPPORT 13 2516411v1 04335.277 Case 3:15-cv-01700-D Document 106 Filed 08/16/16 Page 13 of 20 PageID 3847 investing that income in an enterprise.” North Cypress Med. Ctr. Operating Co. v. Cigna Healthcare, 781 F.3d 182, 202 (5th Cir. 2015) (citing Crowe, 43 F.3d at 203). To state a claim under section 1962(a), Plaintiff had to plead: “(1) the existence of an enterprise, (2) the defendant’s derivation of income from a pattern of racketeering activity, and (3) the use of any part of that income in acquiring an interest in or operating the enterprise.” Id. Plaintiff was also required to plead a nexus between the claimed violation and Plaintiff’s injury. Id. In other words, any injury must flow from the use or investment of racketeering income. Crowe, 43 F.3d at 205. “An injury arising ‘solely from the predicate racketeering acts themselves is not sufficient.’” Abraham v. Singh, 480 F.3d 351, 356 (5th Cir. 2007) (quoting Nolen v. Nucentrix Broadband Networks, Inc., 293 F.3d 296, 929 (5th Cir. 2002)). Plaintiff’s allegations fail to allege any facts that would support a claim under 18 U.S.C. § 1962(a). 4. Plaintiff Fails to State a Claim Under 18 U.S.C. § 1962(b) Although Plaintiff generally pleads claims under 18 U.S.C. § 1962(a)–(d), Plaintiff does not state a single allegation to support a claim under 1962(b). (ECF 80 at 57). As such, and to the extent Plaintiff intended to or purports to assert a claim under 18 U.S.C. § 1962(b), such claim must fail.2 5. Plaintiff Fails to State a Claim Under 18 U.S.C. § 1962(c) Section 1962(c) was intended to prevent the operation of a legitimate business or union through racketeering. See In re MasterCard Int’l Inc., Internet Gambling Litig., 132 F. Supp. 2d 468, 487 (E.D. La. 2001), aff’d sub nom. In re MasterCard Int’l Inc., 313 F.3d 257 (5th Cir. 2002) (citations omitted). Section 1962(c) imposes liability on a discrete group, i.e., those who 2 To state a claim under section 1962(b), Plaintiff had to show that its injuries “were proximately caused by a RICO person gaining an interest in, or control of, the enterprise through a pattern of racketeering activity.” Crowe v. Henry, 43 F.3d 198, 203 (5th Cir. 1995). A plaintiff must allege facts to show that its injuries were “proximately caused by a RICO person gaining an interest in, or control of, the enterprise through a pattern of racketeering activity.” Abraham, 480 F.3d at 357. Plaintiff’s complaint sets forth no facts that would show a causal relationship between its alleged injuries and Whiting’s acquisition or maintenance of an interest in an enterprise. SIMON D. WHITING’S INITIAL MOTION 12(b)(6) MOTION TO DISMISS AND BRIEF IN SUPPORT 14 2516411v1 04335.277 Case 3:15-cv-01700-D Document 106 Filed 08/16/16 Page 14 of 20 PageID 3848 “conduct or participate, directly or indirectly, in the conduct of such enterprise’s affairs through a pattern of racketeering activity.” 18 U.S.C. § 1962(c); see also North Cypress Med. Ctr., 781 F.3d at 203. “To state a claim under subsection (c), a plaintiff must demonstrate . . . that the RICO person is distinct from the RICO enterprise.” Abraham, 480 F.3d at 357. This enterprise- person distinction requirement is based upon the language of section 1962(c).18 U.S.C. §1962(c). Courts have also narrowly interpreted the term “conduct” to hold liable only those individuals who “participate in the operation or management of the enterprise itself.” Reves v. Ernst & Young, 507 U.S. 170, 185 (1993). “A defendant need not be upper level management to satisfy the operation or management test, rather a defendant may participate in the conduct of an enterprise ‘by knowingly implementing decisions, as well as by making them.’” MasterCard Int’l, 132 F. Supp. 2d at 488 (quoting MCM Partners, Inc. v. Andrews–Bartlett & Associates, Inc., 62 F.3d 967, 978 (7th Cir.1995)). Here, Plaintiff violates the enterprise-person distinction requirement to the extent he alleges that Whiting and Methodist Hospital were RICO persons and also that they were an association-in-fact enterprise. See Crowe, 43 F.3d at 205–06. Courts have routinely criticized the inclusion of a corporate defendant as a member of an association-in-fact enterprise. See St. Paul Mercury Ins. Co. v. Williamson, 224 F.3d 425, 447 (5th Cir. 2000); Brittingham v. Mobil Corp., 943 F.2d 297, 300–02 (3d Cir. 1991) (finding, for section 1962(c) purposes, that an association in fact enterprise cannot consist of combinations of individuals or entities affiliated with a defendant corporation). These courts reason that an “enterprise must be more than an association of individuals or entities conducting the normal affairs of a defendant corporation.” St. Paul, 224 F.3d at 447 n.16. Plaintiff’s claim under 18 U.S.C. § 1962(c) should, therefore, be dismissed because the alleged association-in-fact enterprise is not distinct from Whiting. SIMON D. WHITING’S INITIAL MOTION 12(b)(6) MOTION TO DISMISS AND BRIEF IN SUPPORT 15 2516411v1 04335.277 Case 3:15-cv-01700-D Document 106 Filed 08/16/16 Page 15 of 20 PageID 3849 Furthermore, the Third Amended Complaint does not allege any facts from which this Court could infer that Whiting “participate[d] in the operation or management of the enterprise itself,” or that Whiting made or knowingly implemented decisions for the alleged enterprise. Reves, 507 U.S. at 185; MasterCard Int’l, 132 F. Supp. 2d at 48. Although Plaintiff makes the conclusory assertions that Defendants participated in a pattern of racketeering activity (see, e.g., ECF 80 at 60, 72), these allegations are merely a recitation of the elements of a claim under 18 U.S.C. § 1962(c) and lack sufficient specificity to state a claim for relief. Nowhere in the Third Amended Complaint does Plaintiff allege facts to show anything other than that Whiting represented Plaintiff’s litigation opponent. Such allegations do not indicate that Whiting took part in directing the affairs of any enterprise. See MasterCard Int’l, 132 F. Supp. 2d at 490. Accordingly, Plaintiff failed to state a claim against Whiting under 18 U.S.C. § 1962(c), and his RICO claims should be dismissed. 6. Plaintiff Fails to State a Claim Under 18 U.S.C. § 1962(d) “To prove a RICO conspiracy, the [plaintiff] must establish (1) that two or more people agreed to commit a substantive RICO offense and (2) that the defendant knew of and agreed to the overall objective of the RICO offense.” Trugreen Landcare LLC v. Scott, 512 F. Supp. 2d 613, 625 n.11 (N.D. Tex. 2007) (quoting United States v. Delgado, 401 F.3d 290, 296 (5th Cir.2005)).“[B]ecause the core of a RICO civil conspiracy is an agreement to commit predicate acts, a RICO civil conspiracy complaint, at the very least, must allege specifically such an agreement.” Tel-Phonic Servs. Inc. v. TBS Int’l, Inc., 975 F.2d 1134, 1140 (5th Cir. 1992). While Plaintiff has plead the conclusory allegation that “Defendants conspired to violate and did violate Section 1962(a) and (c), in violation of Section 1962(d),” nowhere does Plaintiff allege facts from which this Court could infer that Whiting was a party to any agreement to commit predicate acts of racketeering. See Crowe, 43 F.3d at 206. And in any event, because Plaintiff has failed to SIMON D. WHITING’S INITIAL MOTION 12(b)(6) MOTION TO DISMISS AND BRIEF IN SUPPORT 16 2516411v1 04335.277 Case 3:15-cv-01700-D Document 106 Filed 08/16/16 Page 16 of 20 PageID 3850 state a claim under 18 U.S.C. § 1962 (a) and (c), as well as 18 U.S.C. § 1962(b) to the extent such a claim is asserted, Plaintiff has not stated a claim for a RICO conspiracy. Therefore, the Court should dismiss Plaintiff’s RICO conspiracy claim. See Orthoflex, Inc. v. ThermoTek, Inc., Nos. 3:11-CV-0870-D; 3:10-CV-2618-D, 2012 WL 2864510, at *4 (N.D. Tex. July 12, 2012). a.) Plaintiff has failed to adequately plead fraud with particularity. Plaintiff’s allegations of predicate acts are based on allegedly fraudulent conduct. In his Third Amended Complaint, Plaintiff alleges the following: • The steps taken by Ray Jackson and Whiting were to “defraud the plaintiff.” (ECF 80 at 38–39, ¶¶ 265–67) • Whiting would work with Ray Jackson to “defraud the court in 2012, and keep the plaintiff ignorant of the conspiracy against him.” (ECF 80 at 42, ¶¶ 389–93) • Methodist Hospital, along with its agent Whiting, and Ray Jackson “committed a conspiracy to defraud the United States.” (ECF 80 at 54, ¶¶ 778–79) • Plaintiff requests relief under Rule60(d)(3) of the FRCP due to “a fraud upon the court committed by Defendants: Methodist Hospital of Dallas [and] Attorney Simon D. Whiting.” (ECF 80 at 180, ¶¶ 5127–29) Because these allegations are fundamentally grounded in fraud, “rule 9(b) applies and the predicate acts alleged must be plead with particularity.” Walsh v. America’s Tele-Network Corp., 195 F. Supp. 2d 840, 846 (E.D. Tex. 2002) (citing Williams v. WMX Techs., Inc., 112 F.3d 175, 177 (5th Cir. 1997)); FED. R. CIV. P. 9(b) (“In all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity.”). Thus, Plaintiff’s fraud allegations must specifically refer to the “time, place, and contents of the false representations, as well as the identity of the person making the representation and what the person obtained thereby.” Tel-Phonic Servs., Inc. v. TBS Int’l, Inc., 975 F.2d 1134, 1138 (5th Cir. 1992); Skidmore Energy, Inc. v. KPMG, No. 3:03-CV-2138-B, 2004 U.S. Dist. LEXIS 28396, at *7–8 (N.D. Tex. Dec. 28, 2004) (Boyle, J.) (unpublished). SIMON D. WHITING’S INITIAL MOTION 12(b)(6) MOTION TO DISMISS AND BRIEF IN SUPPORT 17 2516411v1 04335.277 Case 3:15-cv-01700-D Document 106 Filed 08/16/16 Page 17 of 20 PageID 3851 Here, Plaintiff offers no factual support for his claims at all. He merely recites, over and over, that Whiting, along with Methodist Hospital and Jackson, engaged in a conspiracy to defraud Plaintiff, the United States, and this court. Plaintiff failed to identify any facts surrounding the purported fraudulent actions. These barebones allegations—without more—are not sufficient to establish a fraud claim. Given these fatal defects, the Court should dismiss Plaintiff’s RICO action. b.) Plaintiff has failed to plead a conspiracy. Although difficult to ascertain, it seems that Plaintiff’s RICO claims against Whiting are rooted in conspiracy and fraud. (ECF 80) For example, Plaintiff alleges that “[Methodist Hospital], along with its agent [Whiting] and, Ray Jackson committed a conspiracy to defraud the United States.” (ECF 80 at 54, ¶ 778–79) (emphasis added). To establish a conspiracy claim, Plaintiff must be able to show, inter alia, a meeting of the minds of two or more persons on the object or course of action. Massey v. Armco Steel, 652 S.W.2d 932, 934 (Tex. 1983). “However, the acts of a corporate agent are the acts of the corporation, and a corporation cannot conspire with itself.” Elliott v. Tilton, 89 F.3d 260, 264–65 (5th Cir. 1996) (citing Fojtik v. First National Bank, 752 S.W.2d 669, 673 (Tex. App.—Corpus Christi 1988, writ denied)); see also Orthoflex, Inc. v. ThermoTek, Inc., 3:10-CV-2618-D, 2012 WL 2864510, at *6 (N.D. Tex. July 12, 2012). “As a matter of law, a corporation or other company cannot conspire with itself, no matter how many of its agents participate in the complained of action.” Elliott, 89 F.3d at 265 (quoting Wilhite v. H.E. Butt Co., 812 S.W.2d 1, 5 (Tex. App.—Corpus Christi 1991, no writ)). Here, each of Plaintiff’s allegations against Whiting is based on his actions as Methodist Hospital’s agent. (ECF 80 ¶¶ 43–44 (“Simon D. Whiting acting as agent of the Methodist Hospital of Dallas from 2010 to 2014”)) Specifically, Plaintiff complains that: (1) acting as SIMON D. WHITING’S INITIAL MOTION 12(b)(6) MOTION TO DISMISS AND BRIEF IN SUPPORT 18 2516411v1 04335.277 Case 3:15-cv-01700-D Document 106 Filed 08/16/16 Page 18 of 20 PageID 3852 Methodist Hospital’s agent, Whiting facilitated communication between the hospital and Jackson regarding the alleged conspiracy against Plaintiff (ECF 80 at 43, ¶¶ 415–416); (2) while representing Methodist Hospital, Whiting strategized in order to agree with Jackson to forego mediation and quickly dispose of Plaintiff’s suit (ECF 80 at 43, ¶¶ 416–419); and (3) Whiting filed false affidavits on Methodist Hospital’s behalf to obtain dismissal of Plaintiff’s claims. (ECF 80 at 54, ¶¶ 775–777) Because Whiting acted as Methodist Hospital’s agent, Whiting’s acts were that of the hospital. As such, Whiting could not conspire with Methodist Hospital because Methodist Hospital “cannot conspire with itself.” Elliot, 89 F.3d at 265; Orthoflex, 2012 WL 2864510 at *6. Thus, Plaintiff’s conspiracy claims fail, and this Court should dismiss Plaintiff’s RICO claims. VI. PRAYER WHEREFORE, PREMISES CONSIDERED, Defendant Simon D. Whiting respectfully requests that the Court grant this Motion to Dismiss, in whole or in part, that the Court dismiss each of Plaintiff’s claims against him with prejudice, and that the Court award such other and further relief to which Whiting may show himself to be justly entitled. Respectfully Submitted, THOMPSON, COE, COUSINS & IRONS, L.L.P. By: /s/ Alison H. Moore Alison H. Moore State Bar No. 24043743 amoore@thompsoncoe.com Plaza of the Americas 700 North Pearl Street, Twenty-Fifth Floor Dallas, Texas 75201-2832 Telephone: (214) 871-8221 Facsimile: (214) 871-8209 COUNSEL FOR SIMON D. WHITING SIMON D. WHITING’S INITIAL MOTION 12(b)(6) MOTION TO DISMISS AND BRIEF IN SUPPORT 19 2516411v1 04335.277 Case 3:15-cv-01700-D Document 106 Filed 08/16/16 Page 19 of 20 PageID 3853 CERTIFICATE OF SERVICE This is to certify that on the 16th day of August, 2016, a true and correct copy of the foregoing document has been forwarded to all counsel of record via U.S. Mail and via the electronic case filing (“ECF”) system of the U.S. District Court, Northern District of Texas, Dallas Division. Jason Simmons 417 Myrtle Avenue, Box #2 Brooklyn, NY 11205 jsimmsmd@gmail.com Pro Se Plaintiff Ray Jackson The Jackson Law Firm 1700 Pacific Avenue, Ste 3890 Dallas, TX 75201 rjackson@jacksonfirm.net Counsel for Defendant Ray Jackson Sean C Urich Ogletree Deakins Nash Smoak & Stewart PC Preston Commons West 8117 Preston Road Suite 500 Dallas, TX 75225 sean.urich@ogletreedeakins.com Counsel for Defendant Method Hospital of Dallas /s/ Alison H. Moore Alison H. Moore SIMON D. WHITING’S INITIAL MOTION 12(b)(6) MOTION TO DISMISS AND BRIEF IN SUPPORT 20 2516411v1 04335.277 Case 3:15-cv-01700-D Document 106 Filed 08/16/16 Page 20 of 20 PageID 3854