Articles Posted in RICO

A recent RICO claim in federal court, tossed following a motion to dismiss, contains some useful lessons for both plaintiffs and defendants. For potential plaintiffs, it is important to understand that not every wrong that involved a collective of people acting in concert is a civil RICO violation, and if what harmed you was a possible RICO case, success almost never begins with a vague, bare-bones complaint. For businesses who find themselves on the receiving end of such a complaint, it is equally important to recognize the many exacting pleading requirements the law imposes and that those requirements may be the key to getting that RICO claim dismissed early in the litigation process. Whichever side you’re on, a RICO claim should be undertaken or opposed with paramount seriousness and diligence. If your case involves such a cause of action, make sure you’ve consulted with an Atlanta civil RICO lawyer experienced and well-versed in this area of the law.

The federal case involved S.S., a Black woman who delivered a local newspaper in Jonesboro, Ark. She allegedly suffered racial discrimination when her employer illegally underpaid her while paying two White colleagues the proper rate. On that basis, she sued, presenting claims for discrimination under federal and Arkansas law. She also included a civil RICO claim.

The employer opposed the RICO claim and the trial court swiftly dismissed it. Earlier this month, the Eighth Circuit Court of Appeals summarily upheld that decision.

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When you’re confronted by a complaint alleging civil RICO violations, it’s reasonable to be trepidatious. After all, a plaintiff’s success in a RICO case has the potential to trigger triple damages. Take heart, though, as there are also numerous opportunities for you to defeat that RICO claim before it even gets to trial. Whether it’s continuity, causation, the pattern of racketeering activity, or some other required element of RICO pleading, RICO law has many requirements where the price for failing to plead properly is dismissal. If your business has encountered such a complaint, look to an experienced Atlanta civil RICO lawyer to help you achieve your best possible result.

In this post, we’ll focus on one requirement in particular — causation — and one recent RICO case where that was the crux to the defense’s success.

The parties were a startup company that manufactured pallets and one of the startup’s lenders. After the startup defaulted, the lender sued in both state and federal courts. In the federal lawsuit, the lender alleged that a group that included two of the startup’s shareholders, plus two of the startup’s employees, in addition to another of the startup’s lenders and that company’s principals engaged in a RICO conspiracy.

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Being served with a lawsuit is stressful for any business owner. Being served with a civil Racketeer Influence and Corrupt Organization (RICO) Act lawsuit — with its ominous-sounding title and the risk of possibly owing triple damages(!) — can be eminently more stress-inducing. Before having a panic attack, however, keep in mind that many civil RICO claims are bogus, improperly pled, or both. That doesn’t mean you should not take it seriously; quite the opposite. Rather, it means that, with the help of a knowledgeable Atlanta civil RICO lawyer, you have the possibility of getting that RICO claim dismissed before trial.

There are many very specific pleading requirements that civil RICO imposes, which means you may have multiple areas of attack within your motion to dismiss, as a recent 11th Circuit Court of Appeals RICO case demonstrates.

The plaintiff, in that case, was a Florida-based “assisted living and senior care services company” that ran a website through which service providers would connect with seniors in need of care.

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Non-lawyers often associate the Racketeer Influenced and Corrupt Organizations (RICO) Act with mobsters and gangs. RICO’s reach spans far beyond that, though. The statute allows for civil actions, making a federal RICO claim a potentially powerful weapon in a business dispute. Pleading requirements for federal civil RICO are complex, however, creating many traps for the inexperienced. If you or your company is on the receiving end of one of these weaponized RICO claims, get in touch with a knowledgeable Atlanta civil RICO lawyer, who can review your case, and perhaps dispatch that RICO claim before a trial even begins.

Some years ago, the federal First Circuit Court of Appeals in Boston described civil RICO claims as “the litigation equivalent of a thermonuclear device.” That’s partly because civil RICO claims offer plaintiffs the potential of recovering large sums via the treble (in other words, triple) damages. Sometimes, these claims are a means to an end, such hopefully forcing a defendant to agree to a settlement.

As a pair of recent cases illustrate, there are numerous ways a plaintiff’s federal civil RICO claim can fail. In a Missouri federal court, a bank accused the heirs of a famous 20th Century American painter of violating the RICO law. The judge noted a glaring weakness in the bank’s case, which dealt with the required “pattern of racketeering activity,” according to NPR in Kansas City.

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A recent federal appellate decision could amount to something very important to businesses that may need to pursue, or defendant against, a Racketeer Influenced and Corrupt Organizations (RICO) Act claim. The ruling potentially represents a broadening of what kind of causal linkage is direct enough to meet the causation requirement of a RICO claim, which is important because any broadening of that requirement could make for a boon to those considering pursuing a RICO case. While substantial aspects of RICO law are well-settled, some areas continue to evolve to one degree or another, which is why it always pays to have a truly knowledgeable Atlanta civil RICO lawyer on your side who’s fully up-to-date on all the changes in the law.

The RICO case that spawned the new federal court decision involved the business of high-dollar bankruptcy advice and consulting. After one company (“M”) successfully defeated the other company (“A”) in securing several of these clients, A sued M.

The crux of A’s case was that M was able to beat A for clients, in part, by “knowingly and repeatedly filing disclosure statements in the Bankruptcy Court containing incomplete, misleading, or false representations concerning conflicts of interest” and thereby rigging the process. M also allegedly erected a “pay-to-play” scheme where it arranged meetings between its clients and certain bankruptcy lawyers in exchange for exclusive referrals from those attorneys.

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If you operate a business long enough, you’re almost certain to be sued at some point. Sometimes, those civil suits may present scary and intimidating causes of action, such as accusing you and your business of engaging in racketeering activity. While they may seem unnerving to you, they are often, in the eye of an experienced Atlanta civil RICO lawyer, clearly insufficient. With the right legal team on your side, you may very possibly be able to get these kinds of insufficient claims dismissed at the outset.

Fans of the TV medical drama House may remember a recurring bit based upon the disease lupus. When the younger doctors would (frequently) suggest that a particularly confounding case was lupus, Dr. House almost always rejected the diagnosis by stating either “it’s not lupus” or “it’s never lupus.” Many times, a RICO claim in a civil lawsuit is a bit like a lupus diagnosis on House. To the less familiar, a set of facts might seem to point in that direction. The more experienced, however, recognize why it’s not.

A recent RICO case from the world of sports, reported by ESPN, makes for a good illustration. B.B., the plaintiff, was a star high school player who was recruited to play at a major Atlantic Coast Conference university. At that time, many observers believed that B.B. would eventually be selected in the first round of the NBA draft when he entered the professional basketball ranks.

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If you have a business in Georgia, you have likely been sued or eventually will be sued. If you receive a complaint that alleges that you violated racketeer influenced and corrupt organizations (RICO) laws, it may be easy to say… that is completely ridiculous! Indeed, it may well be. However, even if you fervently believe the plaintiff’s arguments are unserious, this lawsuit is something that you should treat with the utmost seriousness. That starts with getting in touch with an experienced Georgia civil RICO lawyer.

There are a couple of very big reasons why you should be extremely proactive after you’ve been sued in a RICO case, even if the claim seems blatantly inadequate. First, any claim existing against your business is something that can cost you money, so the sooner it is dispatched, the better for your business. Secondly, if you can demonstrate the depth of the claim’s facial insufficiency to the court, you may have open an opportunity to recover compensation of your own through an award of sanctions.

As to how that’s done, a recent RICO case from here in North Georgia makes for a good illustration. The plaintiff, R.W., was a Georgia real estate developer. In 2010, his bank approached him about restructuring some of his commercial loans. The developer agreed to the plan, which called for him to pledge his and his mother’s homes as collateral. Eight months later, the bank foreclosed on both homes.

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While Georgia’s Racketeer Influenced and Corrupt Organizations Act is modeled upon the federal RICO Act, it has some very clear differences that make Georgia’s RICO law more expansive than its federal counterpart. Even still, Georgia’s RICO law is limited in scope and, in many cases where it’s asserted as a claim, the alleged wrongdoing doesn’t fall within the narrow goalposts the law erects. If your ordinary business dispute has spun up into a claim of Georgia RICO violations by the other side, make sure you have an Atlanta RICO attorney experienced in handling these cases and in getting the claim dismissal or other positive outcome you need.

There are actually several ways that a civil claim under Georgia’s RICO law can come up short. For one thing, O.C.G.A. Section 16-14-4(a) requires that a RICO plaintiff prove that the defendant, by use of a “pattern of racketeering activity” or the proceeds from that activity, obtained “an interest in or control of any enterprise, real property, or personal property of any nature, including money.”

This last requirement was what felled one businessman’s recent RICO claim. That businessman, L.D., was someone who, according to some news reports, frequently acted as an intermediary between college football players and professional football agents.

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