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Patterns of Racketeering Activity, Rico Enterprises, and Obtaining a Dismissal of a Rico Claim in Georgia

Poole Huffman, LLC

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.

The business’s owners — two self-described conservative Republicans — alleged that Google secretly “blacklisted” the company’s website on its search engine results, having done so because of the owners’ political affiliations.

The Essential ‘Pattern of Racketeering Activity’

The business’s lawsuit contained multiple fatal flaws. The federal RICO law requires plaintiffs to allege six essential things. The third and fourth elements require a plaintiff to allege “a pattern of racketeering activity that included at least two predicate acts of racketeering.”

Many RICO plaintiffs may allege that the enterprise was a scheme or artifice to defraud and that the predicate acts were mail fraud and wire fraud. Just alleging these things in a broad way isn’t enough, though. The plaintiff who sued you must also lay out how those mail and wire communications “were for the purpose of executing” the scheme or artifice to defraud. The plaintiff’s allegations must also set out each member’s actions in support of the scheme, and those allegations must demonstrate that the members acted with a common purpose.

These were two areas where the business owners’ Amended Complaint fell short, although they corrected that deficiency in their Second Amended Complaint.

Alleging a Valid RICO ‘Enterprise’

What remained deficient, and doomed the business owners’ case, was the second of the six essential items: the “enterprise” requirement. Within that requirement, a plaintiff must allege “two distinct entities: (1) a ‘person’; and (2) an ‘enterprise.’ The key word there is distinct. The legal person behind the RICO activity cannot be the same as the enterprise. For example, if you’re asserting that Twitter engaged in a pattern of racketeering activity, you cannot also allege that Twitter was the RICO enterprise.

In this case, the business owners alleged that “Google was part of an association-in-fact enterprise.” The alleged enterprise included Google’s CEO, its parent corporation, one of its subsidiaries (YouTube), and its board of directors. However, the business owners never explained how those people or companies “operated outside their official capacity.” The fallout of that was the business owners functionally alleged an enterprise consisting only of Google, which was identical to the “person” they alleged, which is a fatal flaw.

Of course, simply prevailing on a motion to dismiss may not represent a truly complete recovery. Depending on the specific facts of your case, you may be able to persuade the court that it should order the party who sued you to pay your attorneys’ fees, which is what recently happened in the Google case, as the court issued an order demanding that the plaintiffs pay Google’s legal fees.

Civil RICO is often overused by plaintiffs and plaintiffs’ counsel, but these claims still deserve your utmost attention if you’re on the receiving end of one. Count on the skilled Atlanta civil RICO attorneys at Poole Huffman, LLC to deal with your RICO case and not just get the matter addressed, but addressed as swiftly as possible. Contact our attorneys online or by calling 404-373-4008 to schedule your confidential consultation today.

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