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The Proper Actions to Take When Someone Files a Meritless Georgia Rico Complaint Against You

Poole Huffman, LLC

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.

Nine years and one month after the foreclosures, the developer sued the bank. Among other things, the developer accused the bank of a violation of the Georgia RICO Act.

The bank quickly spotted — and exploited — a major problem in the developer’s case. The Georgia RICO Act contains within it a statute of limitations that says that the limitations period is five years. Obviously, the developer’s case fell far outside that five-year window.

To combat that, he asserted that, based on the exact sort of alleged misconduct in which the bank engaged, a different statute of limitations applied and gave him 20 years to file his case, not five.

What Do When the Other Side’s Case Flies ‘in the Face of Established Law and Clear Facts’

That’s didn’t work. The bank was successful in winning its motion to dismiss before the federal district court for the Northern District of Georgia.

The developer didn’t stop there, appealing the dismissal to the 11th Circuit Court of Appeals. At that point, the bank sought sanctions. The bank argued that it was entitled to receive the penalty award because the RICO arguments that the developer kept advancing clearly were frivolous ones.

Under Rule 38 of the federal rules, a federal court can award you sanctions in your RICO case if the other side advanced “clearly frivolous claims in the face of established law and clear facts.”

That’s what happened in the bank’s case. O.C.G.A. Section 16-14-8 plainly lays out a five-year limitations period for all Georgia RICO cases. The law explicitly says that “notwithstanding any other provision of law, a criminal or civil action or proceeding under this chapter may be commenced up until five years after the conduct in violation of a provision of this chapter terminates or the cause of action accrues.” The developer inexplicably tried to argue that, somehow, the word “notwithstanding” did not rule out the possibility of other limitations periods applying to Georgia RICO cases. This was “utterly devoid of merit,” and so the developer was obligated to pay the bank double the costs of the appeal plus reasonable attorneys’ fees.

Success in defending against a civil RICO action begins with taking the right steps at the outset. Those steps include retaining knowledgeable counsel. The team of skilled Atlanta civil RICO attorneys at Poole Huffman, LLC is here to help. Put the power of our in-depth RICO knowledge and extensive experience to work for you. Contact our attorneys online or by calling 404-373-4008 to schedule your confidential consultation.

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