The opinion of the court was delivered by: Curtis L. Collier Chief United States District Judge
Chief Judge Curtis L. Collier
The Court addresses two separate but related motions here. First, Plaintiffs Star Waste Services, LLC, et al. ("Plaintiffs") filed a motion to amend their complaint to add additional information they have received since originally filing (Court File No. 21). Defendants U.S. Waste, LLC, et al. ("Defendants") filed a motion in opposition (Court File Nos. 23, 24).
Second, Defendants filed a motion to dismiss the Plaintiffs' federal claims under the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. §§ 1962, 1964 and to dismiss the remaining state claims (Court File No. 5). In its analysis, the Court also considers Defendants' supporting memorandum (Court File No. 6), Plaintiffs' response in opposition (Court File No. 9), Defendants' reply (Court File No. 10), and the arguments made by counsel at the hearing on April 30, 2008.
Because the motion to amend was filed early in the litigation, will not cause undue prejudice to Defendants, and justice so requires, the Court will GRANT Plaintiffs' motion to amend the complaint (Court File No. 21).
Because Plaintiffs have met their factual burdens to survive a Federal Rule of Civil Procedure ("Fed. R. Civ. P.") 12(b)(6) motion to dismiss on the first two grounds and because the federal claims support supplemental jurisdiction over the state claims, this Court will DENY Defendants' motion to dismiss (Court File No. 5).
Plaintiffs and Defendant U.S. Waste, LLC are businesses in the commercial waste disposal industry (see Court File No. 4, pp. 1-2). The remaining, individual defendants are members of the Emmer family, who operate or otherwise are connected to defendant U.S. Waste, LLC (id., pp. 2-6). According to Plaintiffs, Defendants proposed a joint venture in the commercial waste business, which Plaintiffs accepted (id., pp. 9-10). Defendants then proceeded to use various tactics to steal Plaintiffs' property through fraud and out-right theft (id., pp. 12-37). Defendants, having illicitly obtained or unsuccessfully sought to obtain the majority of Plaintiffs' assets, then renounced the agreement (Court File No. 1, ¶ 51).*fn1
Plaintiffs allege they are one of many victims in Defendants' history of similar schemes (see Court File No. 21, Attachments 1, 2). Plaintiffs allege fraud, the theft of other companies' equipment, the use of chop-shops to conceal and alter stolen goods for personal use or resale, and the use of personal aliases and varying company names to perpetuate their fraudulent schemes are all part of the continuing way in which Defendants do business (Court File No. 21, p. 5, Attachment 2).
The parties have previously litigated and continue to litigate matters which appear material to this suit in state court (see Court File No. 1, ¶¶ 67, 76). The parties informed this Court at a scheduling conference on January 18, 2008 that the pending state case is of limited scope - dealing only with two plaintiffs and two defendants, and dealing with a fraction of the property and damages involved here, namely three trucks and an unspecified number of commercial trash containers. Both parties represented to this Court the federal proceedings need not be delayed pending the resolution of the state court case.
In reviewing a Fed. R. Civ. P. 12(b)(6) motion to dismiss, the Court construes the complaint in the light most favorable to the plaintiff, Bloch v. Ribar, 156 F.3d 673, 677 (6th Cir. 1998), accepts the complaint's factual allegations as true, Broyde v. Gotham Tower, Inc., 13 F.3d 994, 996 (6th Cir. 1994), and determines whether the plaintiff has pleaded "enough facts to state a claim to relief that is plausible on its face," Bell Atl. Corp. v. Twombly, __ U.S. __, 127 S.Ct. 1955, 1974 (May 21, 2007) (rejecting traditional Fed. R. Civ. P. 12(b)(6) standard set forth in Conley v. Gibson, 355 U.S. 41, 45-46 (1957)). The Court may not grant a 12(b)(6) motion based upon its disbelief of a complaint's factual allegations, Miller v. Currie, 50 F.3d 373, 377 (6th Cir. 1995), nor should the Court weigh the evidence or evaluate the credibility of witnesses, id. (citing Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)). The question is not whether the plaintiff will ultimately prevail but whether "the claimant is entitled to offer evidence to support the claims." Kroll v. United States, 58 F.3d 1087 (6th Cir. 1995); Ecclesiastical Order of the Ism. of Am., Inc. v. Int'l Revenue Serv., 725 F.2d 398, 403 (6th Cir. 1984). At the same time, bare assertions of legal conclusions are insufficient, and the complaint "must contain either direct or inferential allegations respecting all the material elements to sustain a recovery under some viable legal theory." Scheid v. Fanny Farmer Candy Shops, Inc., 859 F.2d 434, 436 (6th Cir. 1988).
When a suit involves fraud or fraud-based claims, a plaintiff must plead his case with sufficient particularity as to the factual circumstances underlying the fraud. Fed. R. Civ. P. 9(b); see Bender v. Southland Corp., 749 F.2d 1205, 1216 (6th Cir. 1984) (In order to allege predicate acts with the requisite specificity under Fed. R. Civ. P. 9(b), a plaintiff must provide the time, place, and contents of any misrepresentations.)
In interpreting RICO, a court must construe RICO broadly to effectuate its purpose. Sedima, S.P.R.L. v. Imrex Co., Inc., 473 U.S. 479, 497-98 (1985) ("RICO is to be read broadly. This is the lesson not only of Congress' self-consciously expansive language and overall approach, but also of its express admonition that RICO is to be liberally construed to effectuate its remedial purposes . . .") (citation and internal quotations omitted).
A. Plaintiffs' Motion to Amend
Plaintiffs move to amend their complaint, adding newly-discovered evidence to support their allegations (Court File No. 21). Defendants' oppose the amendment, arguing the additional evidence does not rectify the inadequacies in the complaint that warrant dismissal, and thus amendment is futile (Court File No. 23, unnumbered p. 2).
Pursuant to Fed. R. Civ. P. 15(a)(2), Plaintiffs may amend their pleading with leave of the Court "when justice so requires." Upon reviewing the newly-discovered evidence, the Court determines this evidence is relevant to Plaintiffs' claim and the legal burdens Plaintiffs face in avoiding a dismissal under Fed. R. Civ. P. 12(b)(6). The Court therefore rejects Defendants' argument as to the futility of the amendment. Furthermore, the Court determines, because the motion to amend was made early in the litigation (prior even to discovery) and Plaintiffs' claims do not warrant dismissal at this stage, Defendants are not unduly prejudiced by the amendment.
The Court will GRANT Plaintiffs' motion to amend ...