Secure Source Claims Company, LLC v. Miller

Background

Secure Source Claims Company, LLC sued multiple defendants. The case was referred to Magistrate Judge Wang for general pretrial matters and dispositive motions. Defendant Eric Scott moved to dismiss Counts I and II for failure to state claims under the Racketeer Influenced and Corrupt Organizations Act (RICO).

Judge Wang issued a Report and Recommendation recommending that the motion be denied. The recommendation concluded that the Second Amended Complaint added sufficient details about Scott’s participation in the alleged wrongful acts. Scott filed timely objections.

Scott’s objections

Scott argued that the new allegations were substantively indistinguishable from allegations in the First Amended Complaint, which the court had previously found insufficient to state a claim. The district court concluded that the new allegations were substantively different and sufficient to satisfy the pleading requirements at this stage.

Scott also argued that the Second Amended Complaint did not adequately allege two or more predicate acts or open-ended continuity. The court stated that it had already determined that the alleged scheme involved multiple predicate acts and that the complaint pleaded open-ended continuity. According to the court, the earlier dismissal of claims against Scott was based on the failure to show Scott’s connection to the alleged enterprise, described as an “association-in-fact.”

The court agreed with the recommendation that the Second Amended Complaint cured that problem by explaining how Scott participated in the alleged fraudulent conduct. It found that the complaint described with particularity the manner and method of Scott’s alleged involvement in the scheme.

Finally, Scott argued that the RICO conspiracy claim failed along with the substantive RICO claim. The court rejected that argument because it found that the substantive RICO claim was sufficiently alleged.

Ruling

After reviewing the motions, the Report and Recommendation, Scott’s objections, and the plaintiff’s responses, the district court found the recommendation well reasoned and concluded that none of Scott’s objections had merit. Judge Jessica G. L. Clarke adopted the Report and Recommendation in its entirety and denied Scott’s motion to dismiss. The Clerk of Court was directed to terminate the motion from the docket.