Walters Land And Livestock Llc v. Perdue Agribusiness Llc

MOTION to Dismiss Amended Third-Party Complaint, MOTION to Dismiss for Failure to State a Claim

E.D. Wash.April 25, 2017

MOTION TO DISMISS AMENDED THIRD-PARTY COMPLAINT NO. 4:17-CV-05026 SMJ - 1 GARVEY SCHUBERT BARER A PARTNERSHIP OF PROFESSIONAL CORPORATIONS e i g h t e e n t h f l o o r 1 1 9 1 s e c o n d a v e n u e s e a t t l e , w a s h i n g t o n 9 8 1 0 1 - 2 9 3 9 2 0 6 4 6 4 3 9 3 9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 David H. Smith, WSBA #10721 Tyler W. Arnold, WSBA #43129 Garvey Schubert Barer Eighteenth Floor 1191 Second Avenue Seattle, Washington 98101-2939 (206) 464-3939 Attorneys for Third-Party Defendants Commodities Plus, Inc., Commodities Plus II, Inc. and Matt Bake UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WASHINGTON WALTERS LAND AND LIVESTOCK, LLC, a Washington Limited Liability Company, Plaintiff and Counterclaim Defendant, v. PERDUE AGRIBUSINESS, LLC, a Maryland Limited Liability Company, Defendant and Counterclaim Plaintiff. NO. 4:17-cv-05026 SMJ MOTION TO DISMISS AMENDED THIRD-PARTY COMPLAINT With Oral Argument: June 29, 2017 at 1:30 p.m. Richland, Washington PERDUE AGRIBUSINESS, LLC, a Maryland Limited Liability Company Third-Party Plaintiff, v. WALTERS, INC., a Washington corporation, TOM WALTERS and JANE DOE WALTERS, husband and wife, MITCH CARNLINE, JESS WALTERS, MATT BAKE, COMMODITIES PLUS, INC. a Washington corporation, and COMMODITIES PLUS II, INC., a Washington corporation, Third-Party Defendants. Case 4:17-cv-05026-SMJ Document 35 Filed 04/25/17 MOTION TO DISMISS AMENDED THIRD-PARTY COMPLAINT NO. 4:17-CV-05026 SMJ - 2 GARVEY SCHUBERT BARER A PARTNERSHIP OF PROFESSIONAL CORPORATIONS e i g h t e e n t h f l o o r 1 1 9 1 s e c o n d a v e n u e s e a t t l e , w a s h i n g t o n 9 8 1 0 1 - 2 9 3 9 2 0 6 4 6 4 3 9 3 9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 I. INTRODUCTION Third-Party Defendants Commodities Plus, Inc., Commodities Plus II, Inc., and Matt Bake (collectively, “CP”) respectfully request that the Court enter an order pursuant to Fed. R. Civ. P. 12(b)(6) dismissing Perdue Agribusiness, LLC’s third-party claims against CP in its Amended Counterclaims and Third-Party Complaint for failure to state a claim for relief. CP recently filed a Motion for More Definite Statement with the intention of forcing Perdue to provide more clarity regarding its allegations before moving to dismiss them. In light of the Court’s recent order re-noting that motion to the same date as motions to dismiss from the other third-party defendants, CP now asks the Court to dismiss Perdue’s claims or, in the alternative, to grant the Motion for More Definite Statement. II. STATEMENT OF FACTS The facts regarding Perdue’s federal RICO allegations are described in detail in CP’s Motion for More Definite Statement, and, in the interest of judicial economy, CP incorporates by reference those facts rather than repeating them. The follow factual discussion relates only to Perdue’s state law allegations. In its Amended Counterclaims and Third-Party Complaint, Perdue alleges that Walters, Inc., Walters Land and Livestock, LLC, Tom Walters (collectively, “Walters”), CP, Mitch Carnline, and Jess Walters violated the Washington Case 4:17-cv-05026-SMJ Document 35 Filed 04/25/17 MOTION TO DISMISS AMENDED THIRD-PARTY COMPLAINT NO. 4:17-CV-05026 SMJ - 3 GARVEY SCHUBERT BARER A PARTNERSHIP OF PROFESSIONAL CORPORATIONS e i g h t e e n t h f l o o r 1 1 9 1 s e c o n d a v e n u e s e a t t l e , w a s h i n g t o n 9 8 1 0 1 - 2 9 3 9 2 0 6 4 6 4 3 9 3 9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Criminal Profiteering Act, Ch. 9A.82 RCW. Dkt. #1-1 at pp. 47-48. Perdue alleges that Walters, CP, Carnline, and Jess Walters “committed and attempted for financial gain” theft under RCW 9A.56.030, and trafficking in stolen property under RCW 9A.82.050. Perdue does not add any factual allegations beyond those it alleged for its federal RICO claims. Perdue further alleges that Walters, CP, Mitch Carnline, and Jess Walters are liable for conversion because they “wrongfully interfered with Perdue’s right to possession and ownership of Perdue’s property, which had been entrusted to Walters, Inc. as a bailee for hire for transloading, safekeeping and delivery to third-parties.” Dkt. #1-1 at p. 43. Perdue does not allege, however, that any of CP’s dairy customers (the third parties Perdue is presumably referring to when discussing delivery) received less than they contracted for from Perdue. III. ARGUMENT Perdue’s Amended Counterclaims and LCR 3.2 RICO Case Statement fail to plead particular and plausible facts showing it has a valid claim against CP. To survive a motion to dismiss, Perdue must allege “sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “Threadbare recitals of the elements of a cause of action, Case 4:17-cv-05026-SMJ Document 35 Filed 04/25/17 MOTION TO DISMISS AMENDED THIRD-PARTY COMPLAINT NO. 4:17-CV-05026 SMJ - 4 GARVEY SCHUBERT BARER A PARTNERSHIP OF PROFESSIONAL CORPORATIONS e i g h t e e n t h f l o o r 1 1 9 1 s e c o n d a v e n u e s e a t t l e , w a s h i n g t o n 9 8 1 0 1 - 2 9 3 9 2 0 6 4 6 4 3 9 3 9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 supported by mere conclusory statements, do not suffice.” Id. (citing Twombly, 550 U.S. at 557). Where the plaintiff alleges “facts that are ‘merely consistent with’ a defendant’s liability, it ‘stops short of the line between possibility and plausibility of ‘entitlement to relief.’” Id. (quoting Twombly, 550 U.S. at 557). And while the Court must accept factual allegations at the pleading stage, it need not accept Perdue’s legal conclusions. Iqbal, 556 U.S. at 678. 1. Perdue Fails to Plead a Federal RICO Claim against CP In the context of a federal RICO claim, Perdue must plead with the same level of specificity as would be required for a claim of fraud under Fed. R. Civ. P. 9(b). “Because a RICO claim threatens the same kind of harm to a professional reputation as a fraud claim, a RICO plaintiff should plead the facts constituting the predicate offenses with the particularity required by Rule 9(b).” Schnitzer v. Oppenheimer & Co., Inc., 633 F. Supp. 92, 97 (D. Or. 1985); see also Wagh v. Metris Direct, Inc., 363 F.3d 821, 827 (9th Cir. 2003), overruled in part on other grounds by Odom v. Microsoft Corp., 486 F.3d 541, 551 (9th Cir. 2007); Miranda v. Ponce Fed. Bank, 948 F.2d 41, 44 (1st Cir. 1991) (“RICO is an unusually potent weapon—the litigation equivalent of a thermonuclear device. The very pendency of a RICO suit can be stigmatizing and its consummation can be costly.”). Case 4:17-cv-05026-SMJ Document 35 Filed 04/25/17 MOTION TO DISMISS AMENDED THIRD-PARTY COMPLAINT NO. 4:17-CV-05026 SMJ - 5 GARVEY SCHUBERT BARER A PARTNERSHIP OF PROFESSIONAL CORPORATIONS e i g h t e e n t h f l o o r 1 1 9 1 s e c o n d a v e n u e s e a t t l e , w a s h i n g t o n 9 8 1 0 1 - 2 9 3 9 2 0 6 4 6 4 3 9 3 9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 To state a federal RICO claim, Perdue must plead particularized facts to show that (1) each defendant committed crimes, referred to as predicate acts; (2) those predicate acts were part of a pattern; (3) the defendants formed an enterprise intending to commit the pattern of predicate acts; and (4) the crimes caused Perdue injury. See Grimmett v. Brown, 75 F.3d 506, 510 (9th Cir. 1996) (citing 18 U.S.C. §§ 1964(c), 1962(c)). Perdue fails to plead plausible facts establishing any element of a RICO claim against CP. A. Perdue Fails to Allege Plausible Facts Showing CP Committed Predicate Acts Perdue’s RICO allegations fall short on the very first required element: establishment that CP committed crimes considered predicate acts under the RICO statute. See United Bhd. of Carpenters of Am. v. Bldg. & Constr. Trades Dep’t, AFL-CIO, 770 F.3d 834, 837-38 (9th Cir. 2014). Perdue largely parrots the relevant statutes, alleging that CP committed (1) theft from interstate shipment under 18 U.S.C. § 659, (2) transportation of stolen goods under 18 U.S.C. § 2314, and (3) sale of stolen goods under 18 U.S.C. § 2315. Perdue fails to plead particular facts establishing any of these predicate acts. i. Theft from Interstate Shipment To establish theft against CP, Perdue must prove that CP unlawfully took Perdue’s property moving in interstate shipment “with intent to convert to his Case 4:17-cv-05026-SMJ Document 35 Filed 04/25/17 MOTION TO DISMISS AMENDED THIRD-PARTY COMPLAINT NO. 4:17-CV-05026 SMJ - 6 GARVEY SCHUBERT BARER A PARTNERSHIP OF PROFESSIONAL CORPORATIONS e i g h t e e n t h f l o o r 1 1 9 1 s e c o n d a v e n u e s e a t t l e , w a s h i n g t o n 9 8 1 0 1 - 2 9 3 9 2 0 6 4 6 4 3 9 3 9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 own use” that property. 18 U.S.C. § 659; see also United States v. Kiff, 377 F. Supp. 2d 586, 590 (E.D. La. 2005). Perdue must show that CP (1) took (2) Perdue’s property (3) moving in interstate shipment (4) with intent to convert it to CP’s own use. Perdue barely even attempts to satisfy the elements of theft. Perdue does not allege that CP took Perdue’s canola meal. It vaguely alleges that Walters “would systematically steal a small amount . . . of the canola meal BNSF delivered to Walters.” Dkt. #19 at p. 3. Perdue does not give dates for when feed was allegedly stolen or transported to buyers. It simply points to the so-called “canola stash spreadsheet,” but does not explain which deliveries listed CP was allegedly involved in; which deliveries involved Perdue’s property (the sheet itself refers to Gavilon, another trader, showing that at least some of the deliveries did not involve Perdue), and whether these deliveries all involved stolen grain (they did not). Perdue further fails to establish that CP took Perdue’s property. Perdue contractually acknowledged that one percent of its product would be lost in shipping due to shrink, Dkt. #26 at pp. 23, 40, and it made Walters its bailee (without paying Walters as such), Dkt. #1-1 at p. 43, giving Walters the right to dispose of abandoned or damaged product. Case 4:17-cv-05026-SMJ Document 35 Filed 04/25/17 MOTION TO DISMISS AMENDED THIRD-PARTY COMPLAINT NO. 4:17-CV-05026 SMJ - 7 GARVEY SCHUBERT BARER A PARTNERSHIP OF PROFESSIONAL CORPORATIONS e i g h t e e n t h f l o o r 1 1 9 1 s e c o n d a v e n u e s e a t t l e , w a s h i n g t o n 9 8 1 0 1 - 2 9 3 9 2 0 6 4 6 4 3 9 3 9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Perdue also fails to plead any facts showing that CP intended to convert Perdue’s property for its own use. Perdue concludes, without any factual support, that Perdue alleges only that Matt Bake “knew that canola stash meal had been stolen from Perdue in Washington State by Walters, Inc. Dkt. #19 at p. 6. Conclusory allegations of a defendant’s knowledge are insufficient to survive a Fed. R. Civ. P. 12(b)(6) challenge. See Iqbal, 556 U.S. at 678 (rejecting allegations that defendant “knew of” improper conduct as “nothing more than a ‘formulaic recitation of the elements’” of plaintiff’s claim) (quoting Twombly, 550 U.S. at 555). Perdue’s basis for the allegation that CP converted property “for its own use” is that CP’s alleged involvement in the scheme “inured [sic] Walters’ continued patronage of” CP. Dkt. #19 at p. 15. This fundamentally misunderstands the parties’ relationships. CP worked for the dairy farms, which bought product from traders like Perdue. Walters was simply the entity that transloaded the product and hauled it to the dairies. CP was in no way reliant on Walters’s’ “continued patronage.” Perdue has therefore failed to plead facts sufficient to show that CP committed the predicate act of theft. ii. Transportation of Stolen Goods Perdue similarly fails to plead facts sufficient to establish that CP Case 4:17-cv-05026-SMJ Document 35 Filed 04/25/17 MOTION TO DISMISS AMENDED THIRD-PARTY COMPLAINT NO. 4:17-CV-05026 SMJ - 8 GARVEY SCHUBERT BARER A PARTNERSHIP OF PROFESSIONAL CORPORATIONS e i g h t e e n t h f l o o r 1 1 9 1 s e c o n d a v e n u e s e a t t l e , w a s h i n g t o n 9 8 1 0 1 - 2 9 3 9 2 0 6 4 6 4 3 9 3 9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 transported stolen goods in violation of 18 U.S.C. § 2314. That crime requires proof that each defendant transported goods in interstate commerce, “knowing the same to have been stolen, converted or taken by fraud.” 18 U.S.C. § 2314; United States v. Lazarenko, 564 F.3d 1026, 1035 (9th Cir. 2009) (requiring proof that the transported property is “‘directly traceable’ to the fraud or theft”). As with theft, Perdue has failed to allege any facts showing that CP knew the canola meal allegedly being transported was stolen or converted. Perdue simply alleges that Matt Bake located buyers and negotiated prices for canola meal for smaller dairy farms. Dkt. #19 at p. 4. Considering that acting as a commodities broker requires doing just that, this allegation is hardly noteworthy. And again, Perdue’s conclusory allegation that Matt Bake “knew” the canola meal was stolen is insufficient to meet federal pleading standards. iii. Sale of Stolen Goods Perdue has also failed to establish the elements of sale of stolen goods under 18 U.S.C. § 2315. That statute requires proof that: (1) the goods were stolen; (2) their aggregate value exceeded $5,000; (3) the defendant knew the goods were stolen; and (4) the goods were moving in interstate commerce. 18 U.S.C. § 2315; United States v. Cyphers, 604 F.2d 635, 636 (9th Cir. 1979). Perdue’s primary problem here is that it does not provide any facts to show Case 4:17-cv-05026-SMJ Document 35 Filed 04/25/17 MOTION TO DISMISS AMENDED THIRD-PARTY COMPLAINT NO. 4:17-CV-05026 SMJ - 9 GARVEY SCHUBERT BARER A PARTNERSHIP OF PROFESSIONAL CORPORATIONS e i g h t e e n t h f l o o r 1 1 9 1 s e c o n d a v e n u e s e a t t l e , w a s h i n g t o n 9 8 1 0 1 - 2 9 3 9 2 0 6 4 6 4 3 9 3 9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 what goods were stolen, when they were stolen, or where they went. There is thus no way to tell whether the goods were in fact stolen (or were instead simply disposed of by Walters in its role as bailee); whether the value of what was stolen exceeded $5,000; or whether the goods were actually moved in interstate commerce. Perdue’s complete lack of specificity with respect to the alleged RICO conspiracy is fatal to Perdue’s claims and they should therefore be dismissed under Fed. R. Civ. P. 12(b)(6). B. Perdue Fails to Plead Facts Plausibly Showing a Pattern of Racketeering Activity Perdue’s vague allegations are similarly fatal in their failure to establish a pattern of racketeering activity. “To prove a pattern of racketeering activity a plaintiff . . . must show that the racketeering predicates are related, and that they amount to or pose a threat of continued criminal activity.” H.J. Inc. v. Nw. Bell Tel. Co., 492 U.S. 229, 239 (1989) (emphasis in original). “The target of [RICO] is thus not sporadic activity. The infiltration of legitimate business normally requires more than one ‘racketeering activity’ and the threat of continuing activity to be effective. It is this factor of continuity plus relationship which combines to produce a pattern.” S. Rep. No. 91-617, p. 158 (1969) (emphasis added), quoted in Paul Batista, Civil RICO Practice Manual § 4.03 (3d ed. 2017 Supp.). Perdue fails to establish any continuity or relationship among the alleged Case 4:17-cv-05026-SMJ Document 35 Filed 04/25/17 MOTION TO DISMISS AMENDED THIRD-PARTY COMPLAINT NO. 4:17-CV-05026 SMJ - 10 GARVEY SCHUBERT BARER A PARTNERSHIP OF PROFESSIONAL CORPORATIONS e i g h t e e n t h f l o o r 1 1 9 1 s e c o n d a v e n u e s e a t t l e , w a s h i n g t o n 9 8 1 0 1 - 2 9 3 9 2 0 6 4 6 4 3 9 3 9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 predicate acts. Perdue fails to identify the dates of any alleged predicate acts, or to allege facts showing how they are related. Perdue simply points to its canola stash spreadsheet and several random bills of lading. None of the allegations establish a continuous and related pattern of predicate acts, especially with respect to CP. C. Perdue Fails to Allege Facts Sufficient to Show an Enterprise As with each previous element, Perdue fails to plead facts establishing the existence of a RICO enterprise. “To show the existence of an enterprise . . . , plaintiffs must plead that the enterprise has (A) a common purpose, (B) a structure or organization, and (C) longevity necessary to accomplish the purpose.” Eclectic Props. E., LLC v. Marcus & Millichap Co., 751 F.3d 990, 997 (9th Cir. 2014); see also Doan v. Singh, 617 F. App’x 684, 686 (9th Cir. 2015) (upholding dismissal of RICO claim because “it is not clear what exactly each individual did, when they did it, or how they functioned together as a continuing unit”). The enterprise must be “separate and apart from the pattern of activity in which it engages.” United States v. Pelullo, 924 F.2d 193, 211 (3d Cir. 1992); see United States v. Turkette, 452 U.S. 576, 583 (1971). Perdue’s allegations against CP are entirely reliant on what it claims Matt Bake did. But Perdue’s allegations against Matt Bake are vague and, by Perdue’s Case 4:17-cv-05026-SMJ Document 35 Filed 04/25/17 MOTION TO DISMISS AMENDED THIRD-PARTY COMPLAINT NO. 4:17-CV-05026 SMJ - 11 GARVEY SCHUBERT BARER A PARTNERSHIP OF PROFESSIONAL CORPORATIONS e i g h t e e n t h f l o o r 1 1 9 1 s e c o n d a v e n u e s e a t t l e , w a s h i n g t o n 9 8 1 0 1 - 2 9 3 9 2 0 6 4 6 4 3 9 3 9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 own admission, not based in fact. Perdue alleges that “[u]pon information and belief,” Matt Bake “played a leading role in the Canola Stash Conspiracy.” Dkt. # 19 at p. 11. In other words, Perdue has no facts to support its allegations, but believes that Mr. Bake must have been a leader in the so-called conspiracy. Perdue alleges that Mr. Bake identified customers, directed deliveries, and set prices for the sale of canola. But that was always CP’s lawful role in canola meal transactions, including those involving Perdue (although Perdue explains the roles inaccurately). As Perdue itself notes, CP is a commodities broker. Dkt. #19 at p. 2. In that role, CP would locate suppliers for its dairy farm customers, negotiate prices for the canola meal, and coordinate delivery with Perdue and Walters. But an enterprise cannot simply be “a corporate defendant associated with its own employees or agents carrying on the regular affairs of the defendant.” Riverwoods Chappaqua Corp. v. Marine Midland Bank, N.A., 30 F.3d 339, 344 (2d Cir. 1994). Perdue’s allegations thus fail to satisfy federal pleading standards. D. Perdue Fails to Plead Facts Showing an Injury Perdue lastly fails to plead facts showing that it suffered injury due to the alleged RICO conspiracy. The RICO statute, 18 U.S.C. § 1964(c), requires Perdue to establish that the alleged conspiracy caused injury to its business or Case 4:17-cv-05026-SMJ Document 35 Filed 04/25/17 MOTION TO DISMISS AMENDED THIRD-PARTY COMPLAINT NO. 4:17-CV-05026 SMJ - 12 GARVEY SCHUBERT BARER A PARTNERSHIP OF PROFESSIONAL CORPORATIONS e i g h t e e n t h f l o o r 1 1 9 1 s e c o n d a v e n u e s e a t t l e , w a s h i n g t o n 9 8 1 0 1 - 2 9 3 9 2 0 6 4 6 4 3 9 3 9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 property. At a fundamental level, Perdue should at least be able to allege how much canola meal it shipped to Walters’s’ facilities and how much reached the end-buyer dairy farms that Perdue sold its product to. But—despite having a claim against Walters for conversion pending for over a year, see Dkt. #1-1 at pp. 20-26, Perdue has yet to produce a single piece of documentation or statement showing either quantity. Perdue has also not alleged that its dairy customers received less than they contracted for from Perdue. Furthermore, Perdue fails to address the fact that it compelled Walters into the role of bailee, see Dkt. #19 at p. 40, or that it contractually acknowledged that one percent of its product would be lost in shipping due to shrink, Dkt. #26 at pp. 23, 40. Perdue cannot show that it had any reasonable expectation that it would see a return from the one percent written off as shrink, or that the amounts allegedly stolen exceeded that one percent. As such, Perdue’s vague allegations do not set forth plausible facts showing the existence of a civil RICO claim against CP, and those allegations must be dismissed. 2. Perdue Fails to Plead a Claim for Violation of the Washington Criminal Profiteering Act Perdue similarly fails to allege facts sufficient to plead a claim for violation of Washington’s Criminal Profiteering Act, Ch. 9A.82 RCW. This statute is Washington’s version of the federal RICO statute, and is often referred to as Case 4:17-cv-05026-SMJ Document 35 Filed 04/25/17 MOTION TO DISMISS AMENDED THIRD-PARTY COMPLAINT NO. 4:17-CV-05026 SMJ - 13 GARVEY SCHUBERT BARER A PARTNERSHIP OF PROFESSIONAL CORPORATIONS e i g h t e e n t h f l o o r 1 1 9 1 s e c o n d a v e n u e s e a t t l e , w a s h i n g t o n 9 8 1 0 1 - 2 9 3 9 2 0 6 4 6 4 3 9 3 9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Washington’s “Little RICO” statute. Winchester v. Stein, 135 Wash. 2d 835, 848, 959 P.3d 1077 (1998). Washington’s Little RICO is narrower than federal RICO, as it requires three predicate acts over five years (as opposed to two over ten years under federal RICO) and “requires that the predicate crimes be motivated by economic gain.” Id. at 848 n.3. Because of the similarities between the federal and state RICO laws, “the law construing the federal RICO act is of assistance in construing [Washington’s] state profiteering act.” Id. at 848 (citing State v. Barnes, 85 Wash. App. 638, 667, 932 P.2d 669 (1997)). The elements of Washington’s Little RICO largely mirror those of the federal RICO act. Perdue must show that CP engaged in criminal profiteering, i.e. commission of one of the predicate crimes defined in Little RICO as profiteering; that the predicate crimes were part of a pattern, meaning at least three acts in five years that “have the same or similar intent, results, accomplices, principals, victims or methods of commission, or [are] otherwise interrelated by distinguishing characteristics including a nexus to the same enterprise, and must not be isolated events;” and Perdue suffered injury as a result. Winchester, 135 Wash. 2d at 849-50. Perdue fails to plead a pattern and injury under Little RICO for the same reasons it failed to plead those elements under federal RICO, as explained above. Case 4:17-cv-05026-SMJ Document 35 Filed 04/25/17 MOTION TO DISMISS AMENDED THIRD-PARTY COMPLAINT NO. 4:17-CV-05026 SMJ - 14 GARVEY SCHUBERT BARER A PARTNERSHIP OF PROFESSIONAL CORPORATIONS e i g h t e e n t h f l o o r 1 1 9 1 s e c o n d a v e n u e s e a t t l e , w a s h i n g t o n 9 8 1 0 1 - 2 9 3 9 2 0 6 4 6 4 3 9 3 9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Perdue’s Little RICO allegations also fail to set forth plausible facts establishing the underlying predicate crimes. Perdue first alleges that CP committed theft under RCW 9A.56.030. Theft requires proof that the defendant “wrongfully obtain[ed] or exert[ed] unauthorized control over the property or services of another or the value thereof, with intent to deprive him or her of such property or service.” RCW 9A.56.020(1)(a). Perdue fails to allege anything beyond conclusory statements regarding these elements. Fundamentally, Perdue never alleges facts showing that CP intended to deprive Perdue of its property. It simply concludes that Matt Bake “knowingly” located buyers and coordinated deliveries for spot deliveries of canola meal. Furthermore, Perdue fails to state a plausible claim showing that CP and the counterclaim and third-party defendants wrongfully obtained Perdue’s property, or that Perdue was actually injured. As previously discussed, Perdue admittedly made Walters its bailee for hire, which gave Walters certain rights to dispose of excess or waste canola meal.1 And Perdue has not alleged that any of the end-buyers of its canola meal, the dairy farms, received less than they 1 Walters need not establish that it actually had the rights it exercised, either; it must simply show that it acted “under a claim of title made in good faith, even though the claim be untenable.” RCW 9A.56.020(2)(a). Case 4:17-cv-05026-SMJ Document 35 Filed 04/25/17 MOTION TO DISMISS AMENDED THIRD-PARTY COMPLAINT NO. 4:17-CV-05026 SMJ - 15 GARVEY SCHUBERT BARER A PARTNERSHIP OF PROFESSIONAL CORPORATIONS e i g h t e e n t h f l o o r 1 1 9 1 s e c o n d a v e n u e s e a t t l e , w a s h i n g t o n 9 8 1 0 1 - 2 9 3 9 2 0 6 4 6 4 3 9 3 9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 contracted to receive from Perdue. Perdue thus has not stated a plausible claim for theft, a necessary predicate to its Little RICO claim. Perdue similarly fails to set forth facts establishing that CP trafficked in stolen property under RCW 9A.82.050. That statute requires Perdue to show that CP “knowingly” initiated or directed theft of Perdue’s property, or knowingly trafficked that stolen property. RCW 9A.82.050(1). Perdue does not allege any facts showing CP’s knowledge of Walters’s’ alleged theft or trafficking of stolen property. Perdue’s conclusory allegations fail to set forth a plausible claim for relief under Washington’s Little RICO, and its allegations against CP must therefore be dismissed. 3. Perdue Fails to Plead a Claim for Conversion against CP Perdue lastly alleges that CP, along with Walters and the two individual third-party defendants, are liable for conversion. To state a claim for conversion, Perdue must allege plausible facts showing that CP unjustifiably and willfully interfered with and deprived Perdue of its property. See In re Marriage of Langham and Kolde, 153 Wash. 2d 553, 564, 106 P.3d 212 (2005). “The burden is on the plaintiff to establish ownership and a right to possession of the converted property.” Meyers Way Dev. Ltd. P’ship v. Univ. Sav. Bank, 80 Wash. App. 655, 675, 910 P.2d 1308 (1996) (citing Eggert v. Vincent, 44 Wash. App. 851, 854-55, Case 4:17-cv-05026-SMJ Document 35 Filed 04/25/17 MOTION TO DISMISS AMENDED THIRD-PARTY COMPLAINT NO. 4:17-CV-05026 SMJ - 16 GARVEY SCHUBERT BARER A PARTNERSHIP OF PROFESSIONAL CORPORATIONS e i g h t e e n t h f l o o r 1 1 9 1 s e c o n d a v e n u e s e a t t l e , w a s h i n g t o n 9 8 1 0 1 - 2 9 3 9 2 0 6 4 6 4 3 9 3 9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 723 P.2d 527 (1986)). Again, Perdue alleges no facts showing that CP willfully (i.e. intentionally) interfered with Perdue’s property, or that Perdue even maintained a property interest in the goods allegedly converted given Walters’s’ status as bailee. Perdue has failed to plead a plausible claim for relief against CP, and thus its claims for conversion should be dismissed. IV. CONCLUSION For the foregoing reasons, CP respectfully request that the Court enter an order dismissing Perdue’s third-party claims against CP with prejudice. DATED this 25th day of April, 2017. GARVEY SCHUBERT BARER By s/David H. Smith David H. Smith, WSBA #10721 Tyler W. Arnold, WSBA #43129 Garvey Schubert Barer 1191 Second Avenue, Suite 1800 Seattle, Washington 98101-2939 Phone: (206) 464-3939 Email: Dsmith@gsblaw.com Email: Tarnold@gsblaw.com Attorneys for Third-Party Defendants Commodities Plus, Inc., Commodities Plus II, Inc. and Matt Bake Case 4:17-cv-05026-SMJ Document 35 Filed 04/25/17 MOTION TO DISMISS AMENDED THIRD-PARTY COMPLAINT NO. 4:17-CV-05026 SMJ - 17 GARVEY SCHUBERT BARER A PARTNERSHIP OF PROFESSIONAL CORPORATIONS e i g h t e e n t h f l o o r 1 1 9 1 s e c o n d a v e n u e s e a t t l e , w a s h i n g t o n 9 8 1 0 1 - 2 9 3 9 2 0 6 4 6 4 3 9 3 9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 CERTIFICATE OF SERVICE I hereby certify that on April 25, 2017, I caused to be electronically filed the foregoing MOTION TO DISMISS AMENDED THIRD-PARTY COMPLAINT with the Clerk of the Court using the CM/ECF system which causes parties who are registered ECF participants to be served by electronic means. Dated this 25th day of April, 2017, at Seattle, Washington. GARVEY SCHUBERT BARER By s/David H. Smith David H. Smith GSB:8574792.1 Case 4:17-cv-05026-SMJ Document 35 Filed 04/25/17