kerik v tacopina / opinion and order

8/21/2019 Kerik v Tacopina / Opinion and Order

1/63

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

BERNARD B. KERIK,

Plaintiff,

- against -

JOSEPH TACOPINA,

Defendant.

14 Cv. 2374 (JGK)

OPINION & ORDER

JOHN G. KOELTL, District Judge:

The pl ai nt i f f , Ber nard Ker i k, a f or mer New Yor k Ci t y Pol i ce

Commi ssi oner , br i ngs t hi s act i on al l egi ng vi ol at i ons of t he

Racket eer I nf l uenced and Cor r upt Or gani zat i ons Act , 18 U. S. C.

1961 et seq. ( RI CO) , agai nst J oseph Tacopi na, t he at t or ney who

def ended Ker i k i n a st at e cr i mi nal pr osecut i on and gui l t y pl ea.

The pl ai nt i f f al so br i ngs cl ai ms under st at e l aw f or breach of

f i duci ar y dut y and def amat i on.

Ker i k al l eges t hat Tacopi na f or mer l y def ended Ker i k agai nst

st at e cr i mi nal char ges, t hen subsequent l y cooper at ed wi t h

f eder al pr osecut or s, assi st i ng t hem i n br i ngi ng f eder al cri mi nal

char ges agai nst Ker i k. Al l of t he cl ai ms ar i se f r om t he

br eakdown of t he par t i es pr of essi onal and per sonal

r el at i onshi ps. The act i on al l eges t hat t he def endant commi t t ed

var i ous act s of wi r e f r aud, obst r uct i on of j ust i ce, and

ext or t i on i n t he cour se of t he def endant s l aw pr act i ce,

br eached f i duci ar y dut i es t o t he pl ai nt i f f by cooper at i ng wi t h

1

Case 1:14-cv-02374-JGK Document 58 Filed 12/03/14 Page 1 of 63


2/63

f eder al aut hor i t i es and def r audi ng t he pl ai nt i f f i n an unr el at ed

t r ansact i on, and t hen publ i cl y def amed t he pl ai nt i f f bef or e and

af t er t he pl ai nt i f f f i l ed t hi s l awsui t .

J ur i sdi ct i on i s proper under 28 U. S. C. 1332 because

t her e i s di ver s i t y of ci t i zenshi p. J ur i sdi ct i on i s al so pr oper

under 28 U. S. C. 1331 because t he pl ai nt i f f has assert ed a

cl ai m f or vi ol at i on of f eder al l aw, namel y RI CO, 18 U. S. C.

1961 et seq. The def endant moves t o di smi ss al l of t he cl ai ms

f or f ai l ur e t o st at e a cl ai m. For t he r easons expl ai ned bel ow,

t he def endant s mot i on i s granted.

I.

I n deci di ng a mot i on t o di smi ss pur suant t o Rul e 12( b) ( 6) ,

t he al l egat i ons i n t he compl ai nt ar e accept ed as t r ue, and al l

r easonabl e i nf er ences must be dr awn i n t he pl ai nt i f f ' s f avor .

McCar t hy v. Dun & Br adst r eet Corp. , 482 F. 3d 184, 191 ( 2d Ci r .

2007) . The Cour t ' s f unct i on on a mot i on t o di smi ss i s not t o

wei gh t he evi dence that mi ght be pr esent ed at a t r i al but mer el y

t o det er mi ne whet her t he compl ai nt i t sel f i s l egal l y

suf f i ci ent . Gol dman v. Bel den, 754 F. 2d 1059, 1067 ( 2d Ci r .

1985) . The Cour t shoul d not di smi ss t he compl ai nt i f t he

pl ai nt i f f has st at ed enough f acts t o st at e a cl ai m t o r el i ef

t hat i s pl ausi bl e on i t s f ace. Bel l At l . Cor p. v. Twombl y, 550

U. S. 544, 570 ( 2007) . A cl ai m has f aci al pl ausi bi l i t y when t he

pl ai nt i f f pl eads f act ual cont ent t hat al l ows t he cour t t o dr aw

2



3/63

t he r easonabl e i nf er ence t hat t he def endant i s l i abl e f or t he

mi sconduct al l eged. Ashcr of t v. I qbal , 556 U. S. 662, 678

( 2009) . Whi l e t he Cour t shoul d const r ue t he f act ual al l egat i ons

i n t he l i ght most f avor abl e t o t he pl ai nt i f f , t he t enet t hat a

cour t must accept as t r ue al l of t he al l egat i ons cont ai ned i n

t he compl ai nt i s i nappl i cabl e t o l egal concl usi ons. I d. When

pr esent ed wi t h a mot i on t o di smi ss pur suant t o Rul e 12( b) ( 6) ,

t he Cour t may consi der document s t hat are ref erenced i n t he

compl ai nt , document s t hat t he pl ai nt i f f r el i ed on i n br i ngi ng

sui t and t hat ar e ei t her i n t he pl ai nt i f f ' s possessi on or t hat

t he pl ai nt i f f knew of when br i ngi ng sui t , or mat t er s of whi ch

j udi ci al not i ce may be t aken. SeeChamber s v. Ti me War ner ,

I nc. , 282 F. 3d 147, 153 ( 2d Ci r . 2002) ; see al so 4 K & D Corp.

v. Conci er ge Auct i ons, LLC, 2 F. Supp. 3d 525, 532- 33 ( S. D. N. Y.

2014) .

II.

The Cour t accept s t he pl ai nt i f f ' s al l egat i ons i n t he

Amended Compl ai nt as t r ue f or pur poses of t hi s mot i on t o

di smi ss. The pl ai nt i f f , Ker i k, a f or mer New Yor k Ci t y Pol i ce

Commi ssi oner , i s a f or mer cl i ent and f or mer f r i end of t he

def endant , Tacopi na, a par t ner i n t he l aw f i r m of Tacopi na

Sei gel & Tur ano, P. C. Am Compl . 9, 33, 36. The pl ai nt i f f

r esi des i n New J er sey, and t he def endant r esi des and has hi s

of f i ce i n New Yor k. Am. Compl . 6, 9- 10.

3



4/63

A.

I n December 2004, Pr esi dent Geor ge W. Bush nomi nat ed Ker i k

t o be Secr etary of t he Uni t ed St ates Depar t ment of Homel and

Secur i t y. Am. Compl . 34. Ker i k subsequent l y wi t hdr ew hi s

name f r om consi der at i on f or t he post . Am. Compl . 35. The

hei ght ened at t ent i on dr ew i ncr eased scr ut i ny t owar d Ker i k, whi ch

l ed t o i nvest i gat i ons by t he Br onx Count y Di st r i ct At t or ney and

t he New Yor k Ci t y Depar t ment of I nvest i gat i on of Ker i k s

accept ance of cer t ai n benef i t s whi l e he was Commi ssi oner of t he

New Yor k Ci t y Depar t ment of Cor r ect i ons. Am. Compl . 37.

Begi nni ng i n December 2004, Tacopi na began r epr esent i ng Ker i k i n

r espondi ng t o medi a i nqui r i es af t er t he nomi nat i on, and

def endi ng Ker i k agai nst t he st at e i nvest i gat i on. Am. Compl .

36, 39- 40.

On J une 30, 2006, Ker i k ul t i mat el y pl eaded gui l t y i n t he

Supr eme Cour t , Br onx County, t o t wo st ate mi sdemeanors of

f ai l i ng t o r epor t a l oan and accept i ng a gi f t . Am. Compl . 44;

Decl . of J udd Bur st ei n ( Bur st ei n Decl . ) Ex. E. Al t hough Ker i k

does not chal l enge t hi s gui l t y pl ea, Ker i k al l eges t hat he was

convi nced t o pl ead gui l t y as a resul t of f al se r epr esent at i ons

by t he def endant . Am. Compl . 42- 44. Ker i k cont ends t hat

Tacopi na r epr esent ed t o hi m t hat once Ker i k pl eaded gui l t y, al l

ot her st at e and f eder al i nvest i gat i ons agai nst Ker i k woul d be

r esol ved. Am. Compl . 43.

4



5/63

Ker i k s st at e gui l t y pl ea di d not end al l ot her

i nvest i gat i ons. I n J ul y 2006, t he Uni t ed St at es At t or ney s

Of f i ce f or t he Sout her n Di st r i ct of New Yor k began a gr and j ur y

i nvest i gat i on of Ker i k f or f i nanci al and t ax cr i mes. Am. Compl .

4, 135. I n t he cour se of t he i nvest i gat i on, on Mar ch 12,

2007, f eder al pr osecut or s ser ved Tacopi na wi t h a gr and j ur y

subpoena and Tacopi na ceased r epr esent i ng Ker i k. Am. Compl .

136- 37. On J une 11, 2007, Tacopi na, who was al so under

f eder al i nvest i gat i on, began cooper at i ng wi t h f eder al

pr osecut or s, pr ovi di ng i nf or mat i on about Ker i k i n f i ve separ at e

meet i ngs. Am. Compl . 47. Ker i k al l eges t hat Tacopi na

pr ovi ded i nf or mat i on t hat had ar i sen f r om Tacopi na s

r epr esent at i on of Ker i k i n t he st at e case. Am. Compl . 49- 50.

Ker i k was i ndi ct ed on f ederal charges on November 8, 2007.

Am. Compl . 143. On November 15, 2007, f ederal prosecut or s

pr esent ed Ker i k s at t or ney, Kennet h Br een, wi t h a l i st of

wi t nesses t hat i ncl uded Tacopi na. Am. Compl . 144. The

f eder al pr osecut or s t hen request ed t hat Br een, who had al so

r epr esent ed Ker i k i n t he st at e case, r ecuse hi msel f f r om

r epr esent i ng Ker i k i n t he f eder al case. Am. Compl . 53- 55.

When Br een decl i ned, Ker i k al l eges t hat on November 19, 2007,

Tacopi na provi ded i nf or mat i on about Br een s pr i or r epr esent at i on

of Ker i k, enabl i ng t he f eder al pr osecut or s t o move successf ul l y

t o di squal i f y Br een. Am. Compl . 56- 57. Ker i k al so al l eges

5



6/63

t hat dur i ng Tacopi na s pr of f er sessi ons wi t h f eder al

aut hor i t i es, Tacopi na l i ed r egar di ng Tacopi na s own hi st or y of

per sonal and pr of essi onal mi sconduct , and al so enl i st ed an

empl oyee t o l i e t o t he pr osecut ors f or hi m. Am. Compl . 61-

62, 70- 71.

Dur i ng t he cour se of t he f eder al i nvest i gat i on, Ker i k and

Tacopi na st ayed i n t ouch. Am. Compl . 141. I n September 2007,

Tacopi na sought Ker i k s assi st ance r egar di ng a r eal est at e

vent ur e i n whi ch Tacopi na was r epr esent i ng a cl i ent , Raf f ael l o

Fol l i er i . Am. Compl . 75. Tacopi na t ol d Ker i k t hat i f Ker i k

coul d obt ai n f undi ng f or t hi s t r ansact i on ( t he Fol l i er i

vent ur e) , t hen Ker i k and Tacopi na woul d spl i t a $1. 5 mi l l i on

f i nder s f ee. Am. Compl . 76. Ker i k subsequent l y l ocat ed an

i nvest or f or t he vent ur e. Am. Comp. 78- 79. Ker i k l at er

l ear ned t hat t he f i nder s f ee agr eement was f or $2. 5 mi l l i on and

had been si gned on Oct ober 5, 2007. Am. Compl . 82.

On December 2, 2007, af t er Tacopi na l ear ned t hat Ker i k was

awar e of t he $1 mi l l i on di scr epancy, Tacopi na sent an e- mai l t o

one of Ker i k s empl oyees, assur i ng Ker i k t hat t he si ze of t he

f ee had onl y r ecent l y i ncr eased and t hat Tacopi na woul d spl i t i t

wi t h Ker i k. Am. Compl . 86. On December 9, 2007, Tacopi na

cal l ed Ker i k, despi t e bei ng awar e that Tacopi na was on a no-

cont act l i st as a wi t ness agai nst Ker i k. Am. Compl . 87.

Tacopi na di scussed t he Fol l i er i vent ure wi t h Ker i k, assur i ng

6



7/63

Ker i k t hat Tacopi na woul d get t he money f or Ker i k no mat t er

what , s t at i ng, I know where hi s money i s and I know what l i ens

t o put on t hi ngs, and I m gonna do t hat . Am. Compl . 88.

On November 5, 2009, Ker i k pl eaded gui l t y i n t hi s Cour t t o

f eder al char ges of Obst r uct i ng t he Admi ni st r at i on of t he

I nt er nal Revenue Law i n vi ol at i on of 26 U. S. C. 7212( a) , Ai di ng

i n t he Pr epar at i on of a Fal se I ncome Tax Ret ur n i n vi ol at i on of

26 U. S. C. 7206( 2) , Maki ng Fal se St atement s on a Loan

Appl i cat i on i n vi ol at i on of 18 U. S. C. 1014, and Maki ng Fal se

St at ement s t o t he Execut i ve Br anch i n vi ol at i on of 18 U. S. C.

1001. Uni t ed St at es v. Ker i k, No. 07cr 1027, ( S. D. N. Y. Nov. 5,

2009) ; Bur st ei n Decl . Ex. D. The pl ai nt i f f was subsequent l y

sent enced t o f or t y- ei ght mont hs i mpr i sonment .

B.

Ker i k al l eges t hat Tacopi na commi t t ed var i ous act s of

mi sconduct f r om2008 t o 2013, many of whi ch do not di r ect l y

i nvol ve Ker i k. Ker i k al l eges t hat i n J une 2008, Tacopi na

r ecei ved a quest i on f r om an onl i ne j our nal i st r egar di ng

Tacopi na s r el at i onshi p wi t h Ker i k. Am. Compl . 93. Ker i k

al l eges t hat r at her t han respondi ng, Tacopi na thr eat ened t he

j our nal i st wi t h a f r i vol ous def amat i on l awsui t t o prevent t he

j our nal i st f r om wr i t i ng anythi ng unf avorabl e about Tacopi na.

Am. Compl . 95. Ker i k al l eges t hat si mi l ar event s occur r ed i n

7



8/63

J une 2010 and i n September or Oct ober 2013. Am. Compl . 100-

102, 108- 110.

I n l at e December 2013, Ker i k f i l ed a compl ai nt agai nst

Tacopi na wi t h t he at t or ney di sci pl i nar y commi t t ee of t he

Appel l ate Di vi si on of t he New Yor k St at e Supr eme Cour t , al l egi ng

var i ous act s of mi sconduct ar i si ng f r om Tacopi na s

r epr esent at i on of Ker i k and Tacopi na s cooper at i on wi t h f eder al

aut hor i t i es. See Am. Compl . Ex. C. Shor t l y t her eaf t er ,

Tacopi na and hi s counsel deni ed t he accusat i ons i n a December

28, 2013 ar t i cl e i n the New York Dai l y News and a December 29

New Yor k Post ar t i cl e. Am. Compl . 160. I n t he December 28

ar t i cl e, Tacopi na st at ed t hat he onl y met wi t h t he f eder al

pr osecut or s once or t wi ce, despi t e Ker i k s al l egat i on t hat

Tacopi na met wi t h t hem f i ve separ at e t i mes. Am. Compl . 47,

160. Tacopi na al so accused Ker i k of spr eadi ng l i es and

i nnuendo. Am. Compl . 160. I n t he December 29 art i cl e,

Tacopi na deni ed t hat he knew he was on t he wi t ness l i st when he

cal l ed Ker i k whi l e t he f eder al pr osecut i on was pendi ng, and

st at ed that he had spoken wi t h pr osecut or s wi t h Ker i k s

bl essi ng. Am. Compl . 160. Ker i k al l eges t hat dur i ng hi s

phone cal l wi t h Tacopi na, Tacopi na had r ef er r ed t o t he f act t hat

Tacopi na was on t he wi t ness l i st . Am. Compl . 88.

Ker i k al l eges t hat Tacopi na or Tacopi na s counsel made

sever al def amat or y st at ement s dur i ng t he pendency of t hi s case.

8



9/63

On May 12, 2014, Tacopi na and hi s counsel deni ed t hat Tacopi na

had cooperated wi t h t he Government , and st ated t hat notes f r om

Tacopi na s prof f er sess i ons woul d ve shown even mor e evi dence

of Mr . Ker i k s al l er gy t o t he t r ut h. Am. Compl . 160.

On or about May 15, 2014, Tacopi na, t hr ough hi s counsel ,

wr ot e a l et t er t o f eder al pr osecut or s r equest i ng t hat t hey

pur sue per j ur y char ges agai nst Ker i k based mai nl y on Ker i k s

al l egat i on i n t he or i gi nal compl ai nt t hat Tacopi na s act i ons had

l ed t o hi s gui l t y pl ea i n f eder al cour t . Am. Compl . Ex. D. The

l et t er st at es, I know t hat l awyer s i n ci vi l l i t i gat i ons of t en

t r y to convi nce pr osecut or s t o pur sue cr i mi nal cases agai nst an

opposi ng par t y, and t he pur pose of t hi s l et t er i s t o do j ust

t hat . Am. Compl . Ex. D. The l et t er cl ai ms t hat Ker i k has

made a mockery of t he oath he t ook when he pl ed gui l t y by

al l egi ng i n t he swor n or i gi nal compl ai nt i n t hi s act i on t hat

but f or Tacopi na s conduct , Ker i k woul d not have `been

char ged by f eder al pr osecut or s or `pl ed gui l t y t o f eder al

char ges. Am. Compl . 125, Ex. D; Compl . 67. The l et t er

st at es t hat Ker i k s swor n gui l t y pl ea al l ocut i on and hi s swor n

Compl ai nt . . . cannot be har moni zed. As such, he either

perjured himself during his sworn guilty plea allocution or in

his sworn Complaint. Am. Compl . Ex. D ( emphasi s i n or i gi nal ) .

I n a May 19, 2014 New Yor k Post art i cl e r egardi ng t he

l et t er , Tacopi na s counsel st at ed t hat he hopes pr osecut or s do

9



10/63

what s r i ght and pur sue per j ur y char ges agai nst Ker i k, and

st ated t hat Ker i k has been br azenl y wavi ng hi s t humbs at t he

j udi ci al syst em. . . . I gnor i ng what Ber ni e Ker i k has done woul d

be si mi l ar t o a pol i ceman st andi ng around watchi ng someone rob a

bank. See Am. Compl . 160; Bur st ei n Decl . Ex. I .

Addi t i onal l y, Ker i k al l eges t hat on May 27, 2014, f ol l owi ng a

hear i ng i n t hi s Cour t , Tacopi na s counsel t ol d r epor t er s t hat

Ker i k i s a con man who bel ongs i n a sani t ar i um. Am. Compl .

160; Bur st ei n Decl . Ex. G.

C.

On J anuar y 23, 2014, Ker i k br ought t hi s act i on i n t he

Uni t ed St at es Di st r i ct Cour t f or t he Di st r i ct of New J er sey. On

Apr i l 3, 2014, t hat cour t gr ant ed Tacopi na s mot i on t o t r ansf er

t he case to t he Sout her n Di st r i ct of New Yor k, hol di ng t hat

venue was not pr oper i n t he Di st r i ct of New J er sey and t hat

t r ansf er woul d be i n t he i nt er est of j ust i ce pur suant t o 28

U. S. C. 1406. Ker i k v. Tacopi na, No. 14cv488, ( D. N. J . Apr . 3,

2014) . Ker i k t her eaf t er f i l ed an Amended Ver i f i ed Compl ai nt i n

t hi s Cour t on J une 3, 2014.

III.

The pl ai nt i f f br i ngs a cl ai m under t he RI CO Act , 18 U. S. C.

1961 et seq. Sect i on 1964( c) pr ovi des t hat [ a] ny per son

i nj ur ed i n hi s busi ness or pr oper t y by reason of a vi ol at i on of

[ 18 U. S. C. 1962] may sue ther ef or i n any appr opr i at e Uni t ed

10



11/63

St at es di st r i ct cour t . 18 U. S. C. 1964( c). The pl ai nt i f f

al l eges t hat t he def endant vi ol at ed 18 U. S. C. 1962( c) . Under

1962( c) ,

[ i ] t shal l be unl awf ul f or any per son empl oyed by orassoci at ed wi t h any ent er pr i se engaged i n, or t heact i vi t i es of whi ch af f ect , i nt er st at e or f or ei gn commer ce,t o conduct or par t i ci pat e, di r ectl y or i ndi r ectl y, i n t heconduct of such ent er pr i se' s af f ai r s t hr ough a pat t er n ofr acket eer i ng act i vi t y or col l ect i on of unl awf ul debt .

I d. 1962( c) . I n or der t o st at e a cl ai m under 1962( c) , a

pl ai nt i f f must al l ege ( 1) conduct ( 2) of an ent er pr i se ( 3)

t hr ough a pat t er n ( 4) of r acket eer i ng act i vi t y. DeFal co v.

Ber nas, 244 F. 3d 286, 306 ( 2d Ci r . 2001) ( quot i ng Sedi ma,

S. P. R. L. v. I mr ex Co. , 473 U. S. 479, 496 ( 1985) ) . Racket eer i ng

act i vi t y encompasses, among ot her t hi ngs, any act i ndi ct abl e as

a cr i me enumer at ed under 18 U. S. C. 1961( 1) ( B) , whi ch i ncl udes,

f or pur poses r el evant t o t hi s mot i on, wi r e f r aud ( 18 U. S. C.

1343) , obst r uct i on of j ust i ce ( 18 U. S. C. 1503) , and ext or t i on

( 18 U. S. C. 1951) . To est abl i sh a pat t er n of r acket eer i ng

act i vi t y, a pl ai nt i f f must pl ead at l east t wo pr edi cat e act s,

[ and] show t hat t he pr edi cat e act s are r el at ed, and t hat t hey

amount t o, or pose a t hr eat of , cont i nui ng cr i mi nal act i vi t y.

Schl ai f er Nance & Co. v. Est at e of War hol , 119 F. 3d 91, 97 ( 2d

Ci r . 1997) ( ci t i ng H. J . I nc. v. Nor t hwest er n Bel l Tel . Co. , 492

U. S. 229, 239 ( 1989) ) . Predi cat e act s ar e r el at ed f or RI CO

pur poses when t hey have t he same or si mi l ar pur poses, r esul t s,

11



12/63

par t i ci pant s, vi ct i ms, or met hods of commi ssi on, or ot her wi se

ar e i nt er r el at ed by di st i ngui shi ng char act er i st i cs and ar e not

i sol at ed event s. I d. ( quot i ng H. J . I nc. , 492 U. S. at 240) ;

see al so 4 K & D Corp. , 2 F. Supp. 3d at 535.

A.

The def endant f i r st ar gues t hat t he 1962( c) cl ai m f ai l s

because t he pl ai nt i f f has f ai l ed t o al l ege a RI CO ent er pr i se

di st i nct f r om t he per son al l eged t o have vi ol at ed 1962( c) .

A pl ai nt i f f asser t i ng a RI CO cl ai m ar i si ng under 1962( c) must

al l ege and pr ove t he exi st ence of t wo di st i nct ent i t i es: ( 1) a

per son ; and ( 2) an ent er pr i se t hat i s not si mpl y t he same

per son r ef er r ed t o by a di f f er ent name, Cedr i c Kushner

Pr omot i ons, Ltd. v. Ki ng, 533 U. S. 158, 161 (2001) , because t he

st at ut e appl i es onl y to per son[ s] who ar e empl oyed by or

associ at ed wi t h t he ent er pr i se. I d. ( ci t i ng and quot i ng 18

U. S. C. 1962( c) ) ( al t er at i on i n or i gi nal ) . Under such a

di st i nct ness r equi r ement , a cor por at e ent i t y may not be bot h

t he RI CO per son and the RI CO ent er pr i se under sect i on 1962( c) .

Ri ver woods Chappaqua Corp. v. Mar i ne Mi dl and Bank, N. A. , 30 F. 3d

339, 344 ( 2d Ci r . 1994) ( ci t at i on omi t t ed) ; see al so 4 K & D

Cor p. , 2 F. Supp. 3d at 535- 36. Even when t he pl ai nt i f f i s

al l egi ng an associ at i on- i n- f act ent er pr i se, t he ent er pr i se

must have a di st i nct i dent i t y f r om t he RI CO per son and consi st

12



13/63

of mor e t han one member . See Rosenson v. Mor dowi t z, No.

11cv6145, 2012 WL 3631308, at *9- 10 ( S. D. N. Y. Aug. 23, 2012) .

Cour t s have r epeat edl y di smi ssed 1962( c) cl ai ms al l egi ng

t hat a cor porat i on was si mul t aneousl y a RI CO per son and a RI CO

ent er pr i se ( or par t of a RI CO ent er pr i se f r om whi ch t he

cor por at i on i s not di st i nct ) . See, e. g. , Cr uz v. FXDi r ectDeal er ,

LLC, 720 F. 3d 115 ( 2d Ci r . 2013) ; Anat i an v. Cout t s Bank

( Swi t zer l and) Ltd. , 193 F. 3d 85, 89 (2d Ci r . 1999) ; Ri ver woods,

30 F. 3d at 344. I n Ri ver woods, t he Second Ci r cui t Cour t of

Appeal s hel d t hat a compl ai nt f ai l ed t o st at e a cl ai m under

1962( c) because t he pl ai nt i f f s al l eged t hat t he cor por at i on

was a RI CO per son and t hat t he cor por at i on pl us al l i t s

empl oyees and agent s was t he RI CO enterpr i se, 1 f r om whi ch t he

cor por at i on can har dl y be consi der ed di st i nct . 30 F. 3d at 344.

Si mi l ar l y, i n Cr uz, a deci si on on whi ch t he def endant r el i es,

t he Cour t of Appeal s hel d t hat t he compl ai nt ' s al l egat i ons

f ai l ed t o sat i sf y t he di st i nct ness r equi r ement i n a case i n

whi ch a corporat i on was al l eged t o be a RI CO per son conduct i ng

t he decept i ve pr act i ces of a RI CO ent er pr i se not di st i nct f r om

t he cor por at i on. Cr uz, 720 F. 3d at 12021. Af t er di sr egar di ng

var i ous al l eged members of t he ent erpr i se because t hey l acked

1 I ndeed, i n Cedr i c Kushner , t he Supr eme Cour t cal l ed t hi s ent er pr i se i nRi ver woods an oddl y const r uct ed ent i t y, and not ed t hat [ i ] t i s l essnat ur al t o speak of a cor por at i on as empl oyed by or associ ated wi t h suchan ent i t y. 533 U. S. at 164 ( ci t i ng Ri ver woods, 30 F. 3d at 344) .

13



14/63

a common pur pose t o engage i n a part i cul ar f r audul ent cour se of

conduct , t he Cour t of Appeal s was l ef t wi t h an ent er pr i se

t hat was al l eged t o consi st of t he cor por at i on i t sel f , i t s

par ent company, i t s chi ef oper at i ng of f i cer , and i t s cor por at e

counsel . I d. ( i nt er nal ci t at i ons omi t t ed) . Ther ef or e, cases

l i ke Cr uz and Ri ver woods make i t cl ear t hat , i f a pl ai nt i f f

al l eges a cor por at i on to be a RI CO per son whi ch conduct s or

par t i ci pat es i n t he af f ai r s of an ent er pr i se t hr ough a pat t er n

of r acket eer i ng act i vi t y i n vi ol at i on of 1962( c) , t he RI CO

ent er pr i se cannot consi st sol el y of t he cor por at i on pl us i t s

owners and/ or empl oyees.

On the ot her hand, t he di st i nct ness r equi r ement may be

sat i sf i ed i f a compl ai nt al l eges a cor por at i on i t sel f t o be t he

RI CO ent er pr i se, wi t h i t s owner s or empl oyees bei ng t he RI CO

per sons conduct i ng t he af f ai r s of t he cor por at i on t hr ough a

pat t er n of r acket eer i ng act i vi t i es. Cedr i c Kushner, 533 U. S. at

163. I n Cedr i c Kushner, a unani mous Supreme Cour t f ound a

compl ai nt t o have sat i sf i ed t he di st i nct ness r equi r ement even

t hough the al l eged RI CO per son was t he pr esi dent and sol e

shar ehol der of t he cor por at i on whi ch was t he al l eged RI CO

ent er pr i se. I d. The Supr eme Cour t r easoned t hat [ t ] he

cor por at e owner / empl oyee, a nat ur al per son, i s di st i nct f r om t he

cor por at i on i t sel f , a l egal l y di f f er ent ent i t y wi t h di f f er ent

r i ght s and respons i bi l i t i es . . . , i d. , and that 1962( c) does

14



15/63

not r equi r e any mor e di st i nct ness t han such a l egal separ at i on

bet ween t he per son and t he cor por at e ent i t y. I d. at 165.

Subsequent cases have f ol l owed t hi s di st i nct i on. 2 See, e. g. , 4 K

& D Corp. , 2 F. Supp. 3d at 536- 37; Kal i mantano GmbH v. Mot i on

i n Ti me, I nc. , 939 F. Supp. 2d 392, 405 ( S. D. N. Y. 2013) ;

U1I T4l ess, I nc. v. FedEx Cor p. , 896 F. Supp. 2d 275, 28788

( S. D. N. Y. 2012) ( f i ndi ng suf f i ci ent di st i nct ness wher e a par ent

cor por at i on and i t s subsi di ar y ar e al l eged t o be t he RI CO

per son, and a separ at el y i ncor por at ed subsi di ar y i s al l eged t o

be t he RI CO ent er pr i se ) .

I n t hi s case, Ker i k al l eges t hat t he ent er pr i se i s t he

Tacopi na Fi r m, whi ch he descr i bes as t he members, part ners,

and associ at es of t he l aw f i r m of J oseph Tacopi na PC, and i t s

successor i n i nt er est , Tacopi na Sei gel & Tur ano, P. C. Am.

Compl . 11. The pl ai nt i f f appear s t o al l ege t hat t hi s i s an

associ at ed i n f act ent er pr i se. Am. Compl . 12. The

def endant cont ends t hat t he pl ai nt i f f has f ai l ed t o pl ead a RI CO

ent er pr i se because a RI CO ent er pr i se may [ not ] consi st mer el y

of a cor por at e def endant associ at ed wi t h i t s own empl oyees or

agent s car r yi ng on t he r egul ar af f ai r s of t he def endant . Cr uz,

2 I ndeed, i n Ci t y of New Yor k v. SmokesSpi r i t s. com, I nc. , 541 F. 3d 425 (2dCi r . 2008) , r ev' d and r emanded on ot her gr ounds s ub nom. Hemi Gr p. , LLC v.Ci t y of New Yor k, 559 U. S. 1 ( 2010) , t he Second Ci r cui t Cour t of Appeal s hel dt hat even a sol e pr opr i etor shi p coul d be a RI CO ent er pr i se and sat i sf y t hedi st i nct ness r equi r ement , so l ong as t he sol e pr opr i et or shi p i s not st r i ctl ya one- man show. I d. at 44849 ( quot i ng and ci t i ng McCul l ough v. Suter, 757F. 2d 142, 144 ( 7t h Ci r . 1985) ) ( i nt ernal quot at i on marks omi t t ed) .

15



16/63

720 F. 3d at 121 ( ci t at i on omi t t ed) . However , unl i ke Cr uz, t her e

i s no cor por at e def endant i n t hi s case, onl y an i ndi vi dual

def endant ( Tacopi na) who al l egedl y conduct ed and par t i ci pat ed i n

t he af f ai r s of t he ent er pr i se ( t he Tacopi na Fi r m) . Thi s case

t hus f al l s squar el y i nt o t he r ul e set out i n Cedr i c Kushner ,

because t he cor por at e/ owner empl oyee, a nat ur al per son, i s

di st i nct f r om t he cor por at i on i t sel f . 533 U. S. at 163. See

Pal at kevi ch v. Choupak, No. 12cv1681, 2014 WL 1509236, at *14- 15

( S. D. N. Y. J an. 24, 2014) ( f i ndi ng di st i nct ness r equi r ement met

f or associ at i on- i n- f act ent er pr i se wher e the def endant per son

i s a nat ur al per son who wor ks f or a cor por at i on i nst ead of t he

cor por at i on i t sel f ) ; see al so G- I Hol di ngs, I nc. v. Bar on &

Budd, 238 F. Supp. 2d 521, 547 ( S. D. N. Y. 2002) ( [ Def endant s] ,

as named par t ners and members of t he l aw f i r m of Baron & Budd,

ar e separ at e and di st i nct l egal ent i t i es f r om t he l aw f i r m t hey

cont r ol , and whi ch i n t ur n pur por t edl y cont r ol s t he B & B

Ent er pr i se. )

I t makes no di f f er ence t hat t he pl ai nt i f f may be al l egi ng

an associ at i on- i n- f act ent er pr i se t hat i ncl udes peopl e out si de

of t he def endant s l aw f i r m. A RI CO ent erpr i se based on an

associ at i on- i n- f act t heor y i s a gr oup of per sons associ at ed

t ogether f or a common pur pose of engagi ng i n a cour se of

conduct , t he exi st ence of whi ch i s pr oved by evi dence of an

ongoi ng or gani zat i on, f or mal or i nf or mal , and by evi dence t hat

16



17/63

t he var i ous associ at es f unct i on as a cont i nui ng uni t . Ci t y of

New Yor k v. Smokes- Spi r i t s. com, I nc. , 541 F. 3d 425, 447 ( 2d Ci r .

2008) ( quot i ng Uni t ed St at es v. Tur ket t e, 452 U. S. 576, 583

( 1981) ) , r ev' d and r emanded on ot her grounds sub nom. Hemi

Gr p. , LLC v. Ci t y of New Yor k, N. Y. , 559 U. S. 1 ( 2010) . To

det er mi ne whet her t he pl ai nt i f f has suf f i ci ent l y pl eaded an

associ at i on- i n- f act ent er pr i se, cour t s l ook t o t he hi er ar chy,

or gani zat i on, and act i vi t i es t o det er mi ne whet her an al l eged

associ at i on f unct i oned as a uni t . I d. ( ci t at i on and quot at i ons

omi t t ed) . The pl ai nt i f f has al l eged t hat al l of t he member s of

t he Tacopi na Fi r m, t he member s, par t ner s, and associ at es of

t he def endant s l aw f i r m, have worked t ogether t o commi t var i ous

act s of wi r e f r aud and ext ort i on f or t he common pur pose of

gener at i ng pr of i t s f or t he f i r m. The def endant i s t he

cont r ol l i ng f i gur e, and he was al l egedl y assi st ed by t he

coor di nat ed ef f or t s of t he f i r m. These al l egat i ons suf f i ce t o

show a cont i nui ng uni t wi t h one or more common pur pose[ s] .

Pal at kevi ch, 2014 WL 1509236, at *12 ( ci t at i ons and quot at i on

omi t t ed) ( hol di ng t hat t he pl ai nt i f f al l eged an associ at i on- i n-

f act ent er pr i se) .

The def endant poi nt s t o a f ootnot e i n t he Amended Compl ai nt

i n whi ch t he pl ai nt i f f al l eges t hat t he ent er pr i se i ncl udes a

host of i ndi vi dual s, such as i nvest i gat or s, i nt er ns, of - counsel

at t or neys, and ot her s hi r ed t o assi st t he Tacopi na Fi r m i n any

17



18/63

capaci t y. Am. Compl . 11 n. 1. The def endant ar gues t hat t he

pl ai nt i f f cannot show how al l of t hese i ndi vi dual s f unct i on as a

uni t , and t her ef or e has not pl eaded an associ at i on- i n- f act .

However , t he al l egat i on t hat t he Tacopi na Fi r m, i ncl udi ng i t s

par t ners and members, was t he ent erpr i se, woul d have been

suf f i ci ent t o al l ege an ent er pr i se suf f i ci ent l y di st i nct f r om

t he def endant Tacopi na. Cedr i c Kushner , 533 U. S. at 163; G- I

Hol di ngs, I nc. , 238 F. Supp. 2d at 547. The f act t hat t he

pl ai nt i f f has embr oi der ed t he descr i pt i on of t he ent er pr i se does

not det r act f r om t he pl ai nt i f f s adequat e pl eadi ng of a cor e

ent er pr i se.

B.

To st at e a RI CO cl ai m, t he pl ai nt i f f must al l ege t wo or

mor e r el at ed pr edi cat e act s t hat const i t ut e a pat t er n of

r acket eer i ng act i vi t y. Schl ai f er Nance & Co. , 119 F. 3d at 97.

A pl ai nt i f f must al l ege, at a mi ni mum, t hat a def endant

personal l y commi t t ed or ai ded and abet t ed t he commi ss i on of t wo

pr edi cat e act s. McLaughl i n v. Ander son, 962 F. 2d 187, 192 ( 2d

Ci r . 1992) ( ci t i ng H. J . I nc. , 492 U. S. at 237; Sedi ma, 473 U. S.

at 496 n. 14) ; see al so 4 K & D Cor p. , 2 F. Supp. 3d at 537.

I n t hi s case, t he pl ai nt i f f al l eges el even pr edi cat e act s

consi st i ng of wi r e f r aud i n vi ol at i on of 18 U. S. C 1343,

obst r uct i on of j ust i ce i n vi ol at i on of 18 U. S. C. 1503, and

ext or t i on and at t empt ed ext or t i on i n vi ol at i on of 18 U. S. C.

18



19/63

1951. The def endant ar gues that t he pl ai nt i f f has f ai l ed t o

pl ead t he el ement s of any pl ausi bl e, act i onabl e pr edi cat e act .

i.

The pl ai nt i f f s f i r st al l eged predi cat e act al l eges wi r e

f r aud i n vi ol at i on of 18 U. S. C. 1343, and cent er s on t he

def endant s repr esent at i on of t he pl ai nt i f f i n t he pl ai nt i f f s

st ate case i n t he New Yor k St ate Supr eme Cour t , Br onx Count y.

The pl ai nt i f f al l eges t hat t he def endant mi sl ed t he pl ai nt i f f i n

phone cal l s and e- mai l s concerni ng t he consequences of t he

pl ai nt i f f s gui l t y pl ea, t el l i ng hi m t hat hi s pl ea woul d end

ot her i nvest i gat i ons agai nst t he pl ai nt i f f when i n f act i t di d

not . The def endant ar gues that t he pl ai nt i f f has f ai l ed t o

pr ove pr oxi mate cause because hi s acknowl edgment of hi s gui l t i n

t he Supreme Cour t severed any chai n of causat i on between the

def endant s al l egedl y mi sl eadi ng act s and any har m suf f er ed by

pl ai nt i f f as a r esul t of t he pl ea.

Under RI CO, [ a] ny per son i nj ur ed i n hi s busi ness or

pr oper t y by r eason of a vi ol at i on of sect i on 1962 of t hi s

chapt er may sue ther ef or i n any appr opr i at e Uni t ed St at es

di st r i ct cour t . 18 U. S. C. 1964( c). Ther ef or e, [ t ] o sat i sf y

RI CO' s st andi ng r equi r ement s, a pl ai nt i f f must demonst r at e, ( 1)

a vi ol at i on of sect i on 1962; ( 2) i nj ur y t o busi ness or pr oper t y;

and ( 3) causat i on of t he i nj ur y by t he vi ol at i on. Mot or ol a

Cr edi t Cor p. v. Uzan, 322 F. 3d 130, 135 ( 2d Ci r . 2003) ( quot i ng

19



20/63

Hecht v. Commer ce Cl ear i ng House, I nc. , 897 F. 2d 21, 23 ( 2d Ci r .

1990) ) .

The causat i on prong r equi r es t hat a pl ai nt i f f br i ngi ng a

ci vi l RI CO cl ai m demonst r at e t hat t he pl ai nt i f f suf f er ed an

i nj ur y pr oxi mat el y caused by the def endant s vi ol at i on of

1962. See 18 U. S. C. 1964( c) ; Anza v. I deal St eel Suppl y Cor p. ,

547 U. S. 451, 457 ( 2006) ; Hol mes v. Sec. I nvest or Prot . Cor p. ,

503 U. S. 258, 268 ( 1992) . I n par t i cul ar , [ w] her e a RI CO

vi ol at i on i s pr edi cat ed on act s soundi ng i n f r aud, a pl ai nt i f f

must al l ege t hat t he def endant ' s act s wer e not onl y the

but - f or cause of pl ai nt i f f ' s i nj ur y, but t he pr oxi mat e cause

as wel l , necessi t at i ng some di r ect r el at i on bet ween t he i nj ur y

asser t ed and t he i nj ur i ous conduct al l eged ; [ a] l i nk t hat i s

t oo r emot e, pur el y cont i ngent , or i ndi r ect i s i nsuf f i ci ent .

Pet r osur ance, I nc. v. Nat ' l Ass' n of I ns. Comm' r s, 888 F. Supp.

2d 491, 50304 ( S. D. N. Y. 2012) ( quot i ng and ci t i ng Hemi Gr p. ,

LLC v. Ci t y of New Yor k, 559 U. S. 1, 9 ( 2010) ) , af f ' d, 514 Fed.

Appx. 51 ( 2d Ci r . 2013) .

I n Hol mes, t he Supr eme Cour t expl i ci t l y r ej ect ed t he

pr oposi t i on t hat mer e but - f or causat i on woul d sat i sf y the

st at ut ory requi r ement f or r ecover y and hel d t hat t he by r eason

of l anguage r equi r es t hat t he vi ol at i on of 1962 be t he

pr oxi mat e cause of t he pl ai nt i f f ' s i nj ur y. Hol mes, 503 U. S.

at 26568. The Hol mes Cour t i dent i f i ed t hr ee pol i cy

20



21/63

consi der at i ons i n eval uat i ng whet her a pl ai nt i f f ' s al l eged har m

sat i sf i es t he pr oxi mat e cause requi r ement f or pur poses of

ci vi l RI CO cl ai ms: ( 1) whet her r ecogni zi ng t he pl ai nt i f f s

cl ai ms woul d l ead t o a di f f i cul t t ask of ascer t ai n[ i ng] t he

amount of a pl ai nt i f f ' s damages at t r i but abl e t o t he vi ol at i on,

as di st i nct f r om ot her , i ndependent , f act or s; ( 2) whet her

r ecogni zi ng such cl ai ms woul d f or ce cour t s t o adopt compl i cat ed

r ul es appor t i oni ng damages among pl ai nt i f f s r emoved at di f f er ent

l evel s of i nj ur y f r om t he vi ol at i ve acts, t o obvi at e t he r i sk of

mul t i pl e r ecover i es; and ( 3) whet her t he di r ect l y i nj ur ed

vi ct i ms can vi ndi cat e t he l aw as pr i vat e at t or neys gener al ,

wi t hout any of t he pr obl ems at t endant upon sui t s by pl ai nt i f f s

i nj ur ed more r emotel y. Hol mes, 503 U. S. at 26970 ( ci t at i ons

omi t t ed) ; see al soCommer ci al Cl eani ng Ser vs. , L. L. C. v. Col i n

Ser v. Sys. , I nc. , 271 F. 3d 374, 38182 (2d Ci r . 2001) ; 4 K & D

Cor p. , 2 F. Supp. 3d at 540- 41.

A pl ai nt i f f has not pl eaded pr oxi mat e cause when f act or s

ot her t han t he def endant ' s [ pr edi cat e act ] ar e an i nt er veni ng

di r ect cause of a pl ai nt i f f ' s i nj ur y, because t hat same i nj ur y

cannot be sai d t o have occur r ed by reason of t he def endant ' s

act i ons. Fi r st Nat i onwi de Bank v. Gel t Fundi ng Cor p. , 27 F. 3d

763, 769 ( 2d Ci r . 1994) . I n t hi s case, what ever t he ef f ect of

t he def endant s al l egedl y mi sl eadi ng st at ement s, t he pl ai nt i f f

subsequent l y accept ed r esponsi bi l i t y f or hi s cr i mi nal vi ol at i ons

21



22/63

i n st at e cour t by hi s own f r ee wi l l . I ndeed, t he pl ai nt i f f

expl i ci t l y st at es i n hi s Amended Compl ai nt t hat he i s not

r ecant i ng hi s gui l t y pl ea and hi s Amended Compl ai nt shoul d not

be const r ued as a col l at er al at t ack on hi s convi ct i on. Am.

Compl . 32 n. 3. The ensui ng i nvest i gat i ons agai nst t he

pl ai nt i f f wer e caused di r ect l y by hi s own gui l t y pl ea, sever i ng

any chai n of causat i on agai nst t he def endant . See Pant oj a v.

Banco Popul ar , No. 11cv3636, 2012 WL 4069297, at *5 ( S. D. N. Y.

Aug. 9, 2012) ( hol di ng t hat t he pl ai nt i f f s gui l t y pl ea

admi t t i ng t o f r aud di sr upt [ ed] any possi bl e chai n of pr oxi mat e

cause necessar y t o st at e a RI CO cl ai m agai nst def endant s f or

t hei r f r audul ent act i ons) , af f ' d, 545 F. App' x 47 ( 2d Ci r .

2013) ; Moor e v. Guesno, 485 F. Supp. 2d 300, 306 ( W. D. N. Y. 2007)

( hol di ng t hat wher e pl ai nt i f f concede[ d] t hat he pl eaded gui l t y

i n t he pr esence of counsel , he coul d not est abl i sh t hat t he

al l eged har m was t he resul t of anythi ng ot her t han hi s own

admi t t ed cr i mi nal conduct ) , af f ' d, 301 F. App' x 17 ( 2d Ci r .

2008) . Because t he pl ai nt i f f cannot show causat i on, t he

pl ai nt i f f s f i rs t al l eged predi cat e act f ai l s to s tat e a cl ai m

f or a RI CO vi ol at i on based on wi r e f r aud.

I n any event , any cl ai m based on t hi s act i s al so t i me-

bar r ed. RI CO cl ai ms ar e subj ect t o a f our - year s t at ut e of

l i mi t at i ons. SeeRot el l a v. Wood, 528 U. S. 549, 552 ( 2000) ;

Agency Hol di ng Cor p. v. Mal l eyDuf f & Assocs. , I nc. , 483 U. S.

22



23/63

143, 156 ( 1987) ; Pear l v. Ci t y of Long Beach, 296 F. 3d 76, 79

n. 1 ( 2d Ci r . 2002) . Feder al cour t s . . . gener al l y appl y a

di scover y accrual r ul e when a st at ut e i s si l ent on t he i ssue, as

ci vi l RI CO i s her e. Rot el l a, 528 U. S. at 555; I n r e Mer r i l l

Lynch Ltd. P' shi ps Li t i g. , 154 F. 3d 56, 60 ( 2d Ci r . 1998) . The

cl ock begi ns t o r un when t he pl ai nt i f f has i nqui r y not i ce of

hi s i nj ur y, namel y when he di scover s or r easonabl y shoul d have

di scover ed t he RI CO i nj ur y. Koch v. Chr i st i e' s I nt ' l PLC, 785

F. Supp. 2d 105, 114 ( S. D. N. Y. 2011) ( ci t i ng Banker s Trust Co.

v. Rhoades, 859 F. 2d 1096, 1102 ( 2d Ci r . 1988) ) , af f ' d, 699 F. 3d

141 ( 2d Ci r . 2012) .

The f i r st st ep i n t he st at ute of l i mi t at i ons anal ysi s i s t o

det er mi ne when t he pl ai nt i f f sust ai ned t he al l eged i nj ur y f or

whi ch t he pl ai nt i f f seeks redr ess. The cour t t hen det er mi nes

when t he pl ai nt i f f di scover ed or shoul d have di scover ed t he

i nj ur y and begi n[ s] t he f our - year st at ut e of l i mi t at i ons per i od

at t hat poi nt . Mer r i l l Lynch P' shi ps, 154 F. 3d at 59. As a

gener al mat t er , t he l i mi t at i ons per i od does not begi n t o run

unt i l [ a pl ai nt i f f ] ha[ s] act ual or i nqui r y not i ce of t he

i nj ur y. I d. at 60. See al so Koch v. Chr i st i e' s I nt ' l PLC, 699

F. 3d 141, 148, 150- 51 ( 2d Ci r . 2012) .

Even accept i ng pl ai nt i f f s al l egat i ons of i nj ur y and

causat i on, t he l at est dat e on whi ch t he pl ai nt i f f coul d

pl ausi bl y be sai d t o have not i ce of t he i nj ur yt he al l eged

23



24/63

consequences of hi s gui l t y pl eai s when t he pl ai nt i f f was

i ndi ct ed on f eder al char ges i n November 2007, wel l over f our

year s bef or e t he pl ai nt i f f s f i l i ng of t hi s compl ai nt i n J anuar y

2014.

The pl ai nt i f f r esponds gener al l y t o t he def endant s

ar gument s r egar di ng t he st at ut e of l i mi t at i ons t hat t he

pl ai nt i f f i s al l egi ng a pat t er n of r acket eer i ng acti vi t y, wi t h

at l east one pr edi cat e act occur r i ng l ess t han f our year s pr i or

t o t he f i l i ng of t he compl ai nt and no t en- year gaps bet ween

act s. See Uni t ed St at es v. Eppol i t o, 543 F. 3d 25, 50 ( 2d Ci r .

2008) . I n ci vi l RI CO cl ai ms, t he except i on based on new

i nj ur i es caused by t he same def endant i s r ef er r ed t o as t he

separ at e accrual r ul e. Mer r i l l Lynch P`shi ps, 154 F. 3d at 59.

The separ at e accr ual r ul e provi des t hat a new f our - year per i od

i s t r i gger ed each t i me t he pl ai nt i f f di scover s, or shoul d have

di scovered, a new i nj ur y caused by ot her wi se t i me- bar r ed

pr edi cat e act s. Bi ngham v. Zol t , 66 F. 3d 553, 559- 60 ( 2d Ci r .

1995) . The Cour t of Appeal s has been car ef ul t o not e t hat t he

i nj ur y had t o be new and i ndependent t o be act i onabl e. Mer r i l l

Lynch P shi ps, 154 F. 3d at 59 ( ci t i ng Bi ngham, 66 F. 3d at 560) .

Even i n t he case of a new and i ndependent i nj ur y, t he

pl ai nt i f f can wi n compensat i on onl y f or i nj ur i es di scover ed or

di scover abl e wi t hi n t he f our - year wi ndow bef or e sui t was

f i l ed. Bi ngham, 66 F. 3d at 560. Because t he pl ai nt i f f s

24



25/63

i nj ur y di d not occur wi t hi n f our year s bef or e t he f i l i ng of t hi s

sui t , he can no l onger r ecover f or i t now.

To t he ext ent t he pl ai nt i f f r el i es on cr i mi nal RI CO

cases t o argue t hat t he def endant s al l eged scheme i s a RI CO

conspi r acy t hat i s not compl et e [ f or st at ut e of l i mi t at i ons

pur poses] unt i l t he pur poses of t he conspi r acy have been

accompl i shed or abandoned, Eppol i t o, 543 F. 3d at 47 ( ci t at i on

omi t t ed) , t hi s ar gument i s wi t hout mer i t . [ T] her e ar e

si gni f i cant di f f er ences bet ween ci vi l and cr i mi nal RI CO act i ons,

and [ t he Supr eme Cour t ] has hel d t hat cr i mi nal RI CO does not

pr ovi de an apt anal ogy f or t he pur pose of det er mi ni ng t he ci vi l

l i mi t at i ons per i od. Kl ehr v. A. O. Smi t h Cor p. , 521 U. S. 179,

188 ( 1997) . See al so Zahl v. Kosovsky, No. 08cv8308, 2011 WL

779784, at *13 ( S. D. N. Y. Mar . 3, 2011) ( r ej ect i ng r el i ance on

cr i mi nal RI CO act i ons t o extend t he f our - year wi ndow af t er

di scover y of i nj ur y) , af f ' d, 471 F. App' x 34 ( 2d Ci r . 2012) .

The pl ai nt i f f s f i r st al l eged act i s t her ef or e t i me- bar r ed.

Fi nal l y, t he pl ai nt i f f ar gues t hat t he st at ut e of

l i mi t at i ons shoul d not appl y because f or any act s t hat t he Cour t

f i nds ar e t i me- barr ed, he i s seeki ng not compensat ory damages

but i nj unct i ve r el i ef , such as di ssol vi ng t he RI CO ent er pr i se,

t he Tacopi na Fi r m, or bar r i ng t he def endant f r om pr act i ci ng l aw

i n t hi s Di st r i ct . Sect i on 1964( a) aut hor i zes cour t s t o pr event

and r est r ai n vi ol at i ons of [ RI CO] by i ssui ng appr opr i at e or der s,

25



26/63

i ncl udi ng, but not l i mi t ed t o: or der i ng any per son t o di vest

hi msel f of any i nt er est , di r ect or i ndi r ect, i n t he ent er pr i se;

i mposi ng r easonabl e r est r i ct i ons on t he f ut ur e act i vi t i es or

i nvest ment s of any per son, . . . or or der i ng di ssol ut i on or

r eor gani zat i on of any ent er pr i se. 18 U. S. C. 1964( a) ; Uni t ed

St at es v. Pr i vat e Sani t at i on I ndus. Ass' n of Nassau/ Suf f ol k,

I nc. , 995 F. 2d 375, 377 ( 2d Ci r . 1993) . However , 1964( c)

st at es t hat pr i vat e l i t i gant s may seek monet ar y damages, and

whet her pr i vat e l i t i gant s may obt ai n i nj unct i ve r el i ef under

1964( a) i s an open and quest i onabl e pr oposi t i on i n t hi s

Ci r cui t . See Sedi ma, S. P. R. L. v. I mr ex Co. , I nc. , 741 F. 2d 482,

489 n. 20 ( 2d Ci r . 1984) ( Whi l e post - enact ment l egi sl at i ve

hi st or y i s not by any means concl usi ve, i t cannot mer el y be

i gnor ed. I t t hus seems al t oget her l i kel y t hat 1964( c) as i t

now st ands was not i nt ended t o pr ovi de pr i vat e par t i es

i nj unct i ve r el i ef . ) ( i nt er nal ci t at i on omi t t ed) , r ev' d. on

other gr ounds, 473 U. S. 479 ( 1985) ; Am. Med. Ass ' n v. Uni t ed

Heal t hcare Cor p. , 588 F. Supp. 2d 432, 445 ( S. D. N. Y. 2008)

( not i ng t hat no case wi t hi n t hi s j ur i sdi ct i on t hat r emai ns good

l aw has r ecogni zed a r i ght t o i nj unct i ve r el i ef f or pr i vat e

l i t i gant s ) .

Even i f t he pl ai nt i f f wer e abl e t o obt ai n i nj unct i ve

r el i ef , t he pl ai nt i f f has ci t ed no l aw t o suppor t t he

pr oposi t i on t hat t he st at ut e of l i mi t at i ons does not appl y t o a

26



27/63

pl ai nt i f f seeki ng i nj unct i ve r el i ef r at her t han damages.

Mor eover , any pl ai nt i f f seeki ng i nj unct i ve r el i ef must show t hat

he has sust ai ned or i s i mmedi at el y i n danger of sust ai ni ng some

di r ect i nj ur y as t he r esul t of t he chal l enged . . . conduct .

Wi l l i ams v. Ci t y of New Yor k, No. 12cv6805, 2014 WL 3639153, at

*3 ( S. D. N. Y. J ul y 22, 2014) ( ci t i ng Shai n v. El l i son, 356 F. 3d

211, 215 ( 2d Ci r . 2004) ) . The pl ai nt i f f admi t s t hat he wi l l not

be hi r i ng Tacopi na or anyone f r om hi s f i r m agai n, and t hus

cannot show t hat he i s i n danger of sust ai ni ng any i nj ur y f r om

Tacopi na s pract i ce of l aw. Ther ef or e, t he pl ai nt i f f has no

st andi ng t o seek i nj unct i ve r el i ef i n t hi s case.

ii.

The pl ai nt i f f s second t hrough f i f t h al l eged predi cat e act s

al l r el at e t o t he def endant s cooper at i on wi t h f eder al

aut hor i t i es dur i ng t hei r i nvest i gat i on of t he pl ai nt i f f f or

f i nanci al cri mes. The pl ai nt i f f al l eges t hat t he def endant s

al l eged di scl osur e of pr i vi l eged i nf or mat i on, l yi ng about t he

def endant s own mi sconduct dur i ng t he i nt er vi ews, and enl i st i ng

anot her t o l i e f or hi m i n or der t o assi st t he f eder al

aut hor i t i es i n t hei r i nvest i gat i on const i t ut es obst r ucti on of

j ust i ce under 18 U. S. C. 1503.

Because t he pl ai nt i f f pl eaded gui l t y t o t he f eder al char ges

agai nst hi m, he cannot sat i sf y the causat i on r equi r ement f or

t hese act s f or t he same r easons expl ai ned wi t h r espect t o t he

27



28/63

st at e case. What ever i mpr opr i et i es t he def endant commi t t ed i n

cooper at i ng wi t h f eder al aut hor i t i es, t he pl ai nt i f f s vol unt ar y

and wi l l i ng deci si on t o pl ead gui l t y sever s t he causal chai n

between t he def endant s act s and any harm suf f ered by the

pl ai nt i f f as a r esul t of hi s convi ct i on.

These al l eged act s ar e al so t i me- bar r ed. The Compl ai nt

al l eges t hat t he def endant f i r st began cooper at i ng wi t h f eder al

aut hor i t i es i n J une 2007. The pl ai nt i f f was i ndi ct ed on t he

f ederal charges i n November 2007, and t he Compl ai nt al l eges t hat

t he pl ai nt i f f f i r st l ear ned t hat t he def endant di scl osed

pr i vi l eged i nf ormat i on i n December 2007. Am. Compl . 146- 47.

Ther ef or e, t he l at est t he pl ai nt i f f l earned about any i nj ury

ar i si ng f r om t hese al l eged act s i s wel l bef or e J anuar y 2010,

whi ch i s f our year s pr i or t o t he dat e t hi s act i on was br ought .

As di scussed above, t he pl ai nt i f f s ar gument t hat t her e i s a

cont i nuous conspi r acy does not extend t he st at ut e of l i mi t at i ons

f or t hese t i me- bar r ed pr edi cat e act s.

iii.

The pl ai nt i f f s si xt h al l eged predi cat e act r el at es t o t he

Fol l i er i Vent ur e. The pl ai nt i f f argues t hat t he def endant

commi t t ed an act of wi r e f r aud under 18 U. S. C. 1343 by

mi sl eadi ng t he pl ai nt i f f about t he f i nder s f ee, or i gi nal l y

i nf or mi ng hi m t hat i t was $1. 5 mi l l i on when i t was act ual l y $2. 5

mi l l i on. The pl ai nt i f f al l eges that t he def endant sent hi m an

28



29/63

e- mai l cl ai mi ng not t o know about t he f ee, and al so t ol d t he

pl ai nt i f f over t he phone t hat t he f ee was i nt ended t o be spl i t

wi t h t he pl ai nt i f f . The pl ai nt i f f does not al l ege i n t he

Compl ai nt t hat t hi s f ee was event ual l y pai d or t hat t he

def endant has wi t hhel d i t f r om hi m.

I n or der t o pl ead st andi ng under RI CO, t he pl ai nt i f f must

al l ege t hat he i ncur r ed a cogni zabl e i nj ur y t o hi s busi ness or

pr oper t y. 18 U. S. C. 1964( c) ; Uzan, 322 F. 3d at 135. The

pl ai nt i f f must al l ege i nj ur y t hat i s t o [ hi s] pr oper t y, and

not , f or exampl e, physi cal , emot i onal or r eput at i onal har m.

Wor l d Wr est l i ng Ent m' t , I nc. v. J akks Pac. , I nc. , 530 F. Supp.

2d 486, 518 ( S. D. N. Y. 2007) ( quot i ng St at e Far m Mut . Aut o. I ns.

Co. v. CPT Med. Ser vs. , P. C. , 375 F. Supp. 2d 141, 152 ( E. D. N. Y.

2005) ) , af f ' d, 328 F. App' x 695 ( 2d Ci r . 2009) . The pl ai nt i f f

must al l ege actual, quant i f i abl e i nj ur y. McLaughl i n v. Am.

Tobacco Co. , 522 F. 3d 215, 227 ( 2d Ci r . 2008) ( emphasi s i n

or i gi nal ) , abr ogat ed on other gr ounds by Br i dge v. Phoeni x Bond

& I ndem. Co. , 553 U. S. 639, 659 ( 2008) . Cour t s have r equi r ed

t hat t he pl ai nt i f f show concret e f i nanci al l oss i n or der t o

show i nj ur y under RI CO. Makowski v. Uni t ed Bhd. of Carpent ers &

J oi ner s of Am. , No. 08cv6150, 2010 WL 3026510, at *12 ( S. D. N. Y.

Aug. 2, 2010) ( ci t i ng Evans v. Ci t y of Chi cago, 434 F. 3d 916,

932 ( 7t h Ci r . 2006) ) ; Mai o v. Aet na, I nc. , 221 F. 3d 472, 482- 83

29



30/63

( 3d Ci r . 2000) ) ; see al so Chaset v. Fl eer / Skybox I nt ' l , LP, 300

F. 3d 1083, 1087 ( 9t h Ci r . 2002) .

Her e, t he pl ai nt i f f i s al l egi ng t hat hi s shar e of t he

act ual f i nder s f ee t hat he was owed f or successf ul l y f i ndi ng an

i nvest or f or t he Fol l i er i Vent ur e was gr eat er t han he was

or i gi nal l y i nf or med. Ther ef or e, t he pl ai nt i f f s onl y i nj ur y

t hat he coul d al l ege i s t he expect at i on of r ecei vi ng a l ar ger

f i nder s f ee. However , he does not al l ege t hat he has r ecei ved

any of t he f i nder s f ee at al l , or t hat t he def endant has

r ecei ved t he f ee and i s wi t hhol di ng i t f r om hi m. Consequent l y,

t he pl ai nt i f f has not shown any act ual , quant i f i abl e i nj ur y t o

hi s busi ness or pr oper t y, and l acks st andi ng under RI CO t o st at e

a cl ai m based on t hi s al l eged act .

Fur t her mor e, t hi s al l eged pr edi cat e act i s t i me- bar r ed.

The Compl ai nt al l eges t hat t he pl ai nt i f f f i r st l earned f r om a

r epr esent at i ve of t he i nvest or t hat t he f i nder s f ee was

actual l y $2. 5 mi l l i on on November 30, 2007. Am. Compl . 81.

The pl ai nt i f f t her ef or e has f ai l ed t o pl ead t hat t hi s act

occur r ed wi t hi n t he r equi si t e f our - year per i od pr i or t o t he

f i l i ng of t he cur r ent l awsui t .

iv.

The pl ai nt i f f s sevent h t hrough ni nth al l eged predi cat e

act s r el at e t o t he def endant s al l eged ext or t i on of var i ous

30



31/63

j our nal i st s t o prevent t hemf r om wr i t i ng unf avorabl e ar t i cl es

about t he def endant . 3

The pl ai nt i f f pl ai nl y does not have st andi ng t o br i ng a

RI CO cl ai m on t he gr ounds t hat t he def endant extor t ed ot her

peopl e. The pl ai nt i f f ar gues the f ol l owi ng causal chai n: by

t hr eat eni ng f r i vol ous l i t i gat i on, t he def endant coer ced sever al

j our nal i st s i nto not publ i shi ng unf avorabl e st or i es about t he

def endant ( except f or t he ni nt h al l eged act , i n whi ch t he st or y

was publ i shed) ; once t hose st or i es wer e not pr i nt ed, t he

def endant was abl e t o pr ot ect hi s f al sel y i nf l at ed i mage and

hi de t he pl ai nt i f f s si de of t he st or y ( t o t he ext ent t he

stor i es per t ai ned t o t he pl ai nt i f f ) ; t he pl ai nt i f f suf f er ed

r eput at i onal damage as a r esul t .

Fi r st , r eput at i onal i nj ur i es ar e i nsuf f i ci ent t o suppor t a

ci vi l RI CO cl ai m. See, e. g. , J akks Pac. , 530 F. Supp. 2d at

518. Second, t he at t enuated connect i on between t he

def endant s conduct and t he pl ai nt i f f s al l eged i nj ur y

i mpl i cat es t he same f undament al concerns of causat i on

descr i bed i n Anza. 547 U. S. at 459. As i n t hat case, i f t he

pl ai nt i f f has been i nj ur ed at al l , he has onl y been i nj ur ed

i ndi r ect l y, and t her e ar e thi r d par t i es t hat have al l egedl y been

i nj ur ed who can be expect ed t o vi ndi cate t he l aws by pur sui ng

3 One of t he al l eged act s occur r ed i n J une 2008, and i s t her ef or e t i me- bar r ed.The ot her t wo occur r ed i n 2010 and 2013. These RI CO predi cat e act s ar et her ef or e t i mel y f i l ed.

31



32/63

t hei r own cl ai ms. I d. at 460. Mor eover , even i f any

r eput at i onal i nj ur y suf f er ed by t he pl ai nt i f f as a r esul t of

t hese act s wer e cogni zabl e, i t woul d be di f f i cul t t o di scer n how

much of i t was due t o t hese act s and not t o ot her f act or s.

I d. at 465- 66.

Fur t her mor e, t he pl ai nt i f f s al l egat i ons do not pl ausi bl y

st at e a cl ai m of ext or t i on or at t empt ed extor t i on under t he

Hobbs Act , 18 U. S. C. 1951. To pl ead ext or t i on, t he pl ai nt i f f

must show t hat t he def endant obt ai ned pr oper t y, wi t h a vi ct i m s

consent , i nduced by wr ongf ul use of act ual or t hr eat ened f or ce,

vi ol ence or f ear or under col or of of f i ci al r i ght . 18 U. S. C.

1951( b) ( 2) . See al so Ben Hur Movi ng & St orage, I nc. v. Bet t er

Bus. Bureau of Met r o. New Yor k, I nc. , No. 08cv6572, 2008 WL

4702458, at *4 ( S. D. N. Y. Oct . 3, 2008) . The Supr eme Cour t has

cl ar i f i ed t hat t he pr oper t y obt ai ned must be transferable

t hat i s, capabl e of passi ng f r om one per son t o anot her . Sekhar

v. Uni t ed St at es, 133 S. Ct . 2720, 2725 ( 2013) ( emphasi s i n

or i gi nal ) . Af t er det ai l i ng t he common l aw def i ni t i on of

ext or t i on and i t s hi st or y under t he Hobbs Act , t he Cour t i n

Sekhar hel d t hat i t must be al l eged t hat t he def endant extort ed

somet hi ng of val ue f r om t he vi ct i m t hat can be exer ci sed,

t r ansf er r ed, or sol d, and not , as was at i ssue i n t hat case, an

i nt angi bl e pr oper t y ri ght t o gi ve di si nt er est ed l egal advi ce.

I d. at 2726- 27.

32



33/63

I n t hi s case, t he onl y pr oper t y t hat t he def endant

pl ausi bl y coul d be sai d t o have ext or t ed f r om t he t hi r d par t i es

was t hei r i nt angi bl e r i ght t o publ i sh an ar t i cl e about hi m.

Ther ef or e, t her e i s no t r ansf er abl e i t em of val ue bei ng passed

f r om t he t hi r d par t i es t o t he def endant . I d. at 2725. See al so

Spi t er i v. Russo, No. 12cv2780, 2013 WL 4806960, at *47- 48

( E. D. N. Y. Sept . 7, 2013) ( di smi ssi ng pl ai nt i f f s ext or t i on cl ai m

when he al l eged t hat he was ext ort ed out of cont i nui ng a

l awsui t ) .

Fi nal l y, i n most cases, a t hr eat of l i t i gat i on, even i f i t

i s mer i t l ess, does not const i t ut e wr ongf ul use of act ual or

t hr eat ened f or ce, vi ol ence, or f ear . 18 U. S. C. 1951( b) ( 2) ;

Fi ndTheBest . com, I nc. v. Lumen Vi ew Tech. LLC, No. 13cv6521,

2014 WL 2050610, at *4- 5 ( S. D. N. Y. May 19, 2014) . Al t hough t he

Cour t of Appeal s of t he Second Ci r cui t has not addr essed t he

quest i on, numer ous cour t s of appeal s f or ot her ci r cui t s and

sever al di st r i ct cour t j udges wi t hi n t hi s di st r i ct have hel d

t hat t he f i l i ng of mer i t l ess l i t i gat i on, or even mal i ci ous

pr osecut i on, i s not a pr edi cat e RI CO act . Fi ndTheBest . com,

2014 WL 2050610, at *4 ( col l ect i ng cases) . Thi s i s t r ue because

a l awsui t f i l ed by l awf ul means i s not wr ongf ul , as def i ned by

t he Hobbs Act , and cour t s woul d be wary of hol di ng t hat t he

f i l i ng of a mer i t l ess l awsui t i s . . . ext or t i onat e l est ever y

unsuccessf ul l awsui t l ead t o an ext or t i on cl ai m and t hus chi l l

33



34/63

r esort t o t he cour t s. Chevron Cor p. v. Donzi ger , 974 F. Supp.

2d 362, 577 ( S. D. N. Y. 2014) . I n Donzi ger , t he cour t f ound an

except i on t o t hi s gener al r ul e because the l awsui t was not

pur sued by l awf ul met hods al one. I d. at 577- 78. Ther e i s no

al l egat i on i n t hi s case t hat t he def endant pur sued l i t i gat i on by

usi ng any unl awf ul met hods. Ther ef or e, t he pl ai nt i f f has not

al l eged extor t i on or at t empt ed extor t i on i n any of t he sevent h

t hr ough ni nt h pr edi cat e act s.

v.

The pl ai nt i f f s t ent h al l eged predi cat e act r el at es t o t he

def endant s adver t i si ng on hi s websi t e about t he pl ai nt i f f . The

pl ai nt i f f al l eges t hat t he def endant i s pr omi nent l y di spl ayi ng

f al se i nf or mat i on about t he def endant s r epr esent at i on of t he

pl ai nt i f f , cl ai mi ng t o have achi eved var i ous successes. The

pl ai nt i f f cl ai ms t hat t hese mi sr epr esent at i ons ar e ai med at

i nf l at i ng t he def endant s i mage, and const i t ut e wi r e f r aud under

18 U. S. C. 1343.

As wi t h t he cl ai ms of ext or t i on, t he pl ai nt i f f cannot

pl ausi bl y al l ege t hat he i s t he di r ect t ar get of t hi s al l egedl y

f r audul ent scheme. The def endant s websi t e i s open t o t he

gener al publ i c, and any i nf l at i ng of t he def endant s i mage i s

pr esumabl y ai med at pr ocur i ng more busi ness f r ompeopl e ot her

t han t he pl ai nt i f f , who has no i nt ent i on of pr ovi di ng any

f ur t her busi ness t o t he def endant . The pl ai nt i f f does not have

34



35/63

st andi ng t o br i ng a RI CO act i on based on t he al l eged def r audi ng

of ot her peopl e, wi t hout any showi ng of di r ect har m t o t he

pl ai nt i f f . See Anza, 547 U. S. at 460.

Fi nal l y, t he pl ai nt i f f s el event h al l eged pr edi cat e act

r el at es t o t he l et t er wr i t t en by def endant s counsel t o f eder al

aut hor i t i es request i ng t hat t hey i nvest i gat e t he pl ai nt i f f f or

per j ur y. The pl ai nt i f f cont ends t hat t hi s l et t er const i t ut es a

vi ol at i on of t he Rul es of Pr of essi onal Conduct and an at t empt t o

convi nce f eder al aut hor i t i es t o br i ng f al se cr i mi nal char ges

agai nst t he pl ai nt i f f , and i s t her ef or e an obst r uct i on of

j ust i ce under 18 U. S. C. 1503.

The def endant ar gues t hat because t he Compl ai nt does not

al l ege t hat any i nvest i gat i on has been i ni t i at ed i n r esponse t o

t hi s l et t er , t he pl ai nt i f f has not shown t hat he has suf f er ed

any damages yet or t hat he ever wi l l , and hi s cl ai m i s t her ef or e

not r i pe. A cause of act i on does not accr ue under RI CO unt i l

t he amount of damages becomes cl ear and def i ni t e. Fi r st

Nat i onwi de Bank, 27 F. 3d at 768. The Cour t of Appeal s f or t he

Second Ci r cui t has hel d a pl ai nt i f f who cl ai ms t hat a debt i s

uncol l ect i bl e because of t he def endant ' s conduct can onl y pur sue

t he RI CO t r ebl e damages r emedy af t er hi s cont r act ual r i ght s t o

payment have been f r ust r at ed. I d. Ther ef or e, a l ender s cl ai m

agai nst a debt or f or r ecover y of a secur ed l oan i s not r i pe

35



36/63

unt i l t he l ender has sought f or ecl osur e. I d. ; Uzan, 322 F. 3d at

135- 36.

I n t hi s case, t he pl ai nt i f f has not al l eged t hat f eder al

aut hor i t i es have begun an i nvest i gat i on i nt o t he pl ai nt i f f as a

r esul t of t he def endant s l et t er , or t hat any adver se act i on has

been t aken at al l . The pl ai nt i f f t hus has not shown t hat any

damages t hat coul d concei vabl y ar i se f r om t he l et t er have become

cl ear and def i ni t e yet . See Har bi nger Capi t al Par t ner s Mast er

Fund I , Lt d. v. Wachovi a Capi t al Mket s, LLC, No. 07cv8139, 2008

WL 3925175, at *4 ( S. D. N. Y. Aug. 26, 2008) ( Because col l ect i on

ef f ort s i n t he ongoi ng bankr upt cy pr oceedi ng have not been

compl eted, whether and t o what ext ent t he est ate' s r ecover y

agai nst t hi r d par t i es may of f set pl ai nt i f f s' damages r emai ns

uncer t ai n. ) , af f ' d, 347 F. App' x 711 ( 2d Ci r . 2009) .

Mor eover , t he pl ai nt i f f has f ai l ed t o al l ege t he el ement s

of obst r uct i on of j ust i ce i n vi ol at i on of 18 U. S. C. 1503. To

pl ead a vi ol at i on of 1503 based on an al l eged obst r uct i on of

j ust i ce i n connect i on wi t h a grand j ury proceedi ng, t her e must

be an al l egat i on t hat t he gr and j ur y pr oceedi ng was pendi ng or

ant i ci pat ed. Uni t ed St at es v. Schwar z, 283 F. 3d 76, 106- 07 ( 2d

Ci r . 2002) . I f t he gr and j ur y i nvest i gat i on t o be obst r uct ed i s

onl y f or eseeabl e, i t i s suf f i ci ent t hat a def endant had r eason

t o bel i eve t hat t he gr and j ur y pr oceedi ng woul d begi n and one

i n f act di d. I d. at 107. I n t hi s case, t her e i s no al l egat i on

36



37/63

t hat any gr and j ur y i nvest i gat i on was i ni t i at ed as a r esul t of

t he l et t er .

The pl ai nt i f f t her ef or e cannot st at e a RI CO cl ai m based on

t he el event h pr edi cat e act .

I n l i ght of t he f or egoi ng, t he pl ai nt i f f has not pl ausi bl y

st at ed a cl ai m t hat t he def endant has commi t t ed any act i onabl e

pr edi cate act s under RI CO. The def endant s mot i on t o di smi ss

t he pl ai nt i f f s RI CO cl ai m i s ther ef or e granted.

IV.

I n hi s second cl ai m, t he pl ai nt i f f cl ai ms t hat t he

def endant br eached hi s f i duci ar y dut y to t he pl ai nt i f f as hi s

at t or ney by commi t t i ng sever al act s wi t h t he same f act ual

pr edi cat es as many of t he al l eged RI CO act s. The def endant

moves t o di smi ss t hi s cl ai m f or f ai l ur e t o st at e a cl ai m upon

whi ch r el i ef can be gr ant ed.

To al l ege a breach of f i duci ar y dut y, t he def endant must

al l ege t he exi st ence of a f i duci ar y r el at i onshi p, mi sconduct by

t he def endant , and damages di r ect l y caused by t he def endant s

mi sconduct . Margr abe v. Sext er & Warmf l ash, P. C. , 353 F. App' x

547, 549 ( 2d Ci r . 2009) ( summary or der) ( ci t i ng Berman v. Sugo

LLC, 580 F. Supp. 2d 191, 204 ( S. D. N. Y. 2008) ) . See al so Renaud

37



38/63

v. Young Men' s Chr i st i an Ass ' n Ret . Fund, No. 11cv524, 2012 WL

363561, at *1 (S. D. N. Y. Feb. 3, 2012) . 4

The pl ai nt i f f s al l egat i ons concer ni ng t he def endant s

br eaches of dut y can be gr ouped i nt o f i ve gener al act s: 1) t he

def endant made f al se r epr esent at i ons t o i nduce t he pl ai nt i f f s

gui l t y pl ea whi l e r epr esent i ng hi m on t he st at e cr i mi nal

char ges; 2) t he def endant act ed agai nst t he pl ai nt i f f s

i nt er est s by cooper at i ng wi t h f eder al aut hor i t i es whi l e t he

pl ai nt i f f bel i eved t he def endant was st i l l r epr esent i ng hi m, and

by cal l i ng t he pl ai nt i f f despi t e bei ng on t he no- cont act l i st ;

3) t he def endant appear ed t o be repr esent i ng t he pl ai nt i f f i n

t he Fol l i er i vent ur e and l i ed about t he cont ent s of t he deal ; 4)

t he def endant publ i cl y def amed t he pl ai nt i f f r egar di ng t he deal ;

and 5) t he def endant t hr eat ened cr i mi nal char ges t o gai n

advant age i n t hi s case.

4 Because t hi s case was t r ansf er r ed f r om t he Di st r i ct Cour t f or t he Di st r i ctof New J ersey pur suant t o 28 U. S. C. 1406, New Yor k choi ce of l aw r ul esdetermi ne whi ch st ate s l aw appl i es. Car i bbean Whol esal es & Serv. Corp. v.

US J VC Cor p. , 855 F. Supp. 627, 629 (S. D. N. Y. 1994) ( I f t he t r ansf er wasmade pursuant 28 U. S. C. 1406( a) , because venue was i mpr oper i n t he t r ansf erorcour t , t hen t he t r ansf er ee st at e' s l aw i s appl i cabl e. )Nevert hel ess, t he part i es appear t o agr ee t hat New Yor k l aw appl i es here.The Cour t wi l l accept t hi s ass umpt i on f or purposes of t he breach of f i duci ar yduty cl ai m. See Kr umme v. West Poi nt St evens I nc. , 238 F. 3d 133, 138 ( 2d Ci r .2000) ( The part i es' br i ef s assume that New Yor k l aw cont r ol s, and such i mpl i ed consent . . . i s suf f i c i ent t o establ i sh choi ce of l aw. ) ( i nt ernalci t at i on omi t t ed) .

38



39/63

A.

As wi t h t he RI CO cl ai m, t he def endant ar gues t hat t he

pl ai nt i f f s cl ai m f or br each of f i duci ar y dut y based on t he

st at e gui l t y pl ea and t he meet i ngs wi t h f eder al pr osecut or s

f ai l s t o st at e a cl ai m because t he pl ai nt i f f cannot pr ove

causat i on and t he cl ai m i s t i me- bar r ed.

The pl ai nt i f f al l eges t hat t he def endant made mi sst at ement s

t hat al l egedl y i nduced t he pl ai nt i f f t o pl ead gui l t y i n st at e

cour t . I n t he cont ext of at t or ney l i abi l i t y, or cl ai ms

r el at i ng t o t o t he manner i n whi ch [ an] at t or ney pur sued t he

under l yi ng case, New Yor k l aw r egar di ng br each of f i duci ar y

dut y and at t or ney mal pr act i ce ar e coextensi ve. Ki r k v. Heppt ,

532 F. Supp. 2d 586, 591- 92 ( S. D. N. Y. 2008) . See al so Ul i co

Cas. Co. v. Wi l son, El ser , Moskowi t z, Edel man & Di cker , 865

N. Y. S. 2d 14, 20- 21 ( App. Di v. 2008) ( hol di ng t hat , al t hough

br each of f i duci ar y dut y cl ai m was not dupl i cat i ve of

mal pr act i ce cl ai m, New Yor k mal pr act i ce l aw shoul d be appl i ed) ;

Gui l es v. Si mser , 826 N. Y. S. 2d 484, 485 ( App. Di v. 2006)

( Pl ai nt i f f ' s cause of act i on, l abel ed as a br each of her

at t or ney' s f i duci ar y dut y, was essent i al l y a cl ai m of l egal

mal pr act i ce. ) ; Wei l , Got shal & Manges, LLP v. Fashi on Bout i que

of Shor t Hi l l s, I nc. , 780 N. Y. S. 2d 593, 596 ( App. Di v. 2004)

( di smi ssi ng br each of f i duci ar y dut y cl ai m as dupl i cat i ve of

mal pr act i ce cl ai m) .

39



40/63

To prove causat i on f or a mal pract i ce cl ai m under New Yor k

l aw, t he pl ai nt i f f must show t hat but f or t he at t or ney' s

conduct t he cl i ent woul d have pr evai l ed i n t he under l yi ng mat t er

or woul d not have sust ai ned any ascert ai nabl e damages. Wei l

Got shal , 780 N. Y. S. 2d at 596. Gi ven t hat t he pl ai nt i f f

vol unt ar i l y admi t t ed hi s gui l t of t he st at e cri mes i n hi s gui l t y

pl ea, t he pl ai nt i f f cannot make t hi s showi ng. See, e. g. , Yong

Wong Park v. Wol f f & Samson, P. C. , 867 N. Y. S. 2d 424, 424 (App.

Di v. 2008) ( di smi ssi ng pl ai nt i f f s mal pr act i ce cl ai m r egar di ng

at t or ney s wr ong l egal advi ce of consequences of gui l t y pl ea

as bar r ed by [t he pl ai nt i f f s] undi st ur bed gui l t y pl ea) ; Sash

v. Schwar t z, No. 04cv9634, 2007 WL 30042, at *7 ( S. D. N. Y. J an.

4, 2007) ( An undi st ur bed gui l t y pl ea pr ecl udes a def endant f r om

r ai si ng an i ssue of l egal mal pr act i ce. ) , af f ' d, 356 F. App' x

555 ( 2d Ci r . 2009) .

However , t he pl ai nt i f f s al l egat i ons t hat t he def endant

vi ol at ed t he dut y of l oyal t y and conf i dent i al i t y by cooper at i ng

wi t h f eder al pr osecut or s agai nst hi m and r i sked t he def endant s

l i ber t y i nt er est by cal l i ng hi m whi l e on t he no- cont act l i st

r el at e t o t he manner i n whi ch [ t he def endant i nt er act ed wi t h

hi s cl i ent ; t her ef or e, t he br each of f i duci ar y dut y st andar d

appl i es r at her t han a mal pr act i ce st andar d. Ki r k, 532 F. Supp.

2d at 592 ( quot i ng Schwei zer v. Mul vehi l l , 93 F. Supp. 2d 376,

400 n. 29 ( S. D. N. Y. 2000) ) ( hol di ng t hat f or br each of f i duci ar y

40



41/63

dut y cl ai m, t he pl ai nt i f f need onl y pr ove t he exi st ence of a

f i duci ar y r el at i onshi p and br each of dut y) .

Never t hel ess, t hese cl ai ms ar e t i me- bar r ed. The New Yor k

Cour t of Appeal s has hel d t hat f or a br each of f i duci ar y dut y

cl ai m, t he appl i cabl e l i mi t at i ons per i od depends on t he

subst ant i ve r emedy t hat t he pl ai nt i f f seeks. I DT Cor p. v.

Morgan St anl ey Dean Wi t t er & Co. , 907 N. E. 2d 268, 272 ( N. Y.

2009) . Where t he r emedy sought i s pur el y monetary i n natur e,

cour t s const r ue t he sui t as al l egi ng i nj ur y t o pr oper t y wi t hi n

t he meani ng of CPLR 214 ( 4) , whi ch has a t hr ee- year l i mi t at i ons

per i od. I d. Wher e, however , t he r el i ef sought i s equi t abl e

i n nat ur e, t he si x- year l i mi t at i ons per i od of CPLR 213 ( 1)

appl i es . I d.

The pl ai nt i f f seeks monet ar y damages and di sgor gement of

hi s at t or ney f ees pai d t o t he def endant , whi ch al so qual i f i es as

monetary damages. See Access Poi nt Med. , LLC v. Mandel l , 963

N. Y. S. 2d 44, 47 ( App. Di v. 2013) . Ther ef or e, as t he pl ai nt i f f

concedes, t he l i mi t at i ons per i od f or t hese cl ai ms i s t hr ee

year s. The pl ai nt i f f s cl ai m accr ued when he f i r st suf f er ed

i nj ur y as a r esul t of t he def endant s al l eged br each of dut y.

I DT Cor p. , 907 N. E. 2d at 273. The pl ai nt i f f s cl ai m t hus

accr ued i n November 2007 when he was i ndi ct ed on f ederal charges

or i n December 2007 when he f i r st l ear ned t hat t he def endant had

al l egedl y di scl osed pr i vi l eged i nf or mat i on t o f eder al

41



42/63

aut hor i t i es. Because t he pl ai nt i f f f i l ed t hi s case i n J anuar y

2014, t he cl ai m accrued wel l bef or e t he t hr ee- year per i od pr i or

t o t he f i l l i ng of t he compl ai nt .

The pl ai nt i f f ar gues t hat t he st at ute of l i mi t at i ons shoul d

have been t ol l ed t hr oughout t hi s t i me because t he def endant has

been engaged i n a cont i nuous cour se of conduct , and the

def endant s mor e recent br eaches of dut y ar e wi t hi n t he thr ee-

year wi ndow. I nt ' l St r at egi es Gr p. , Lt d. v. Ness, 645 F. 3d 178,

183- 84 ( 2d Ci r . 2011) . Thi s ar gument i s wi t hout mer i t . The

cont i nuous cour se of conduct doct r i ne di scussed i n Ness, based

i n Connect i cut l aw, woul d not be appl i cabl e her e, and nei t her

woul d any doct r i nes based i n New Yor k l aw. See i d. ( hol di ng

t hat l i mi t at i ons per i od i s t ol l ed wher e pl ai nt i f f can show ( A)

a speci al r el at i onshi p bet ween t he par t i es gi vi ng r i se t o such a

cont i nui ng dut y, or ( B) some l at er wr ongf ul conduct of a

def endant r el at ed t o t he pr i or act ) ( i nt er nal ci t at i ons

omi t t ed) ; Di gnel l i v. Ber man, 741 N. Y. S. 2d 66, 68 ( App. Di v.

2002) ( di scussi ng cont i nuous r epr esent at i on doct r i ne under New

York l aw, r equi r i ng t he def endant t o st i l l be r epr esent i ng t he

pl ai nt i f f on a r el at ed mat t er ) ; Schandl er v. New Yor k Li f e I ns.

Co. , No. 09cv10463, 2011 WL 1642574, at *11 ( S. D. N. Y. Apr . 26,

2011) ( st at i ng t hat under New Yor k l aw, when t he pl ai nt i f f

al l eges a cont i nui ng wr ong, a new cause of act i on accrues each

t i me def endant commi t s t he wr ong) .

42



43/63

The pl ai nt i f f has not pl ausi bl y al l eged t hat t he def endant

was st i l l r epr esent i ng hi m any t i me af t er December 2007 when t he

pl ai nt i f f al l egedl y l ear ned t hat t he def endant had di scl osed

conf i dent i al i nf or mat i on t o t he f eder al pr osecut or s. Ther e i s

no al l egat i on t hat t he def endant was r epr esent i ng t he pl ai nt i f f

i n t he t hr ee year s pr i or t o J anuar y 2014 when t hi s act i on was

br ought . The pl ai nt i f f has al so f ai l ed t o al l ege any wr ongs

t hat ar e r el at ed t o t he def endant s al l eged br eaches of

f i duci ar y dut y her e t hat occur r ed i n t hat per i od. The

pl ai nt i f f s br each of f i duci ar y dut y cl ai ms r el at ed t o t he

def endant s cooper at i on wi t h t he f eder al pr osecut or s ar e

t heref ore di smi ssed. See Schandl er , 2011 WL 1642574, at *11

( hol di ng t hat t he pl ai nt i f f s br each of dut y cl ai m woul d be

t i me- bar r ed when t he onl y al l eged wr ong occur r ed out si de t he

l i mi t at i ons per i od) .

B.

The def endant ar gues t hat t he pl ai nt i f f s al l egat i ons

concer ni ng t he Fol l i er i vent ur e ar e al so t i me- bar r ed, t hat t he

pl ai nt i f f cannot show damages, and t hat t her e was no exi st i ng

f i duci ar y r el at i onshi p.

I f an al l egat i on of f r aud i s essent i al t o a br each of

f i duci ar y dut y cl ai m, cour t s i n New Yor k appl y a si x- year

st at ut e of l i mi t at i ons under CPLR 213 ( 8) . I DT Cor p. , 907

N. E. 2d at 272. Ther ef or e, f or t he pl ai nt i f f s cl ai m t hat t he

43



44/63

def endant def r auded hi m on t he Fol l i er i vent ur e to be t i mel y

pl eaded, t he pl ai nt i f f s cl ai m must have accr ued af t er J anuar y

2008. However , t he Compl ai nt al l eges t hat t he pl ai nt i f f l ear ned

on November 30, 2007 t hat t he f i nder s f ee i n t he Fol l i er i

vent ur e was hi gher t han t he def endant had t ol d hi m. Any cl ai m

t hat t he pl ai nt i f f coul d pl ausi bl y al l ege accr ued at t hat poi nt ,

and t he pl ai nt i f f s cl ai m i s consequent l y t i me- bar r ed.

Fur t her mor e, t he pl ai nt i f f cannot pl ausi bl y al l ege t hat he

i ncur r ed damages as a r esul t of t he def endant s act s i n

connect i on wi t h t hi s cl ai m. To st at e a cl ai m f or br each of

f i duci ar y dut y, a pl ai nt i f f must show t hat t he def endant s

br each r esul t ed i n damages. SCS Commc' ns, I nc. v. Her r i ck Co. ,

I nc. , 360 F. 3d 329, 342 ( 2d Ci r . 2004) . I n some cases, t he

pl ai nt i f f need not al l ege an act ual i nj ur y t o t he pl ai nt i f f i f

t he pl ai nt i f f can show t hat t he def endant was unj ust l y enr i ched.

Sotheby' s, I nc. v. Mi nor , No. 08cv7694, 2009 WL 3444887, at *11

n. 2 ( S. D. N. Y. Oct . 26, 2009) ( ci t i ng Zacki va Commc' ns Cor p. v.

Hor owi t z, 826 F. Supp. 86, 88 ( S. D. N. Y. 1993) ) .

The pl ai nt i f f has not al l eged t hat he suf f er ed any act ual

damages as a resul t of hi s ef f or t s i n f i ndi ng an i nvest or f or

t he Fol l i er i vent ur e, or t hat t he def endant has i mpr oper l y

benef i t t ed at t he pl ai nt i f f s expense. Because t he pl ai nt i f f

cannot show any damages, hi s br each of f i duci ar y dut y cl ai m must

be di smi ssed. See, e. g. , Benedi ct v. Whi t man Br eed Abbot t &

44



45/63

Mor gan, 973 N. Y. S. 2d 341, 344 ( App. Di v. 2013) ( af f i r mi ng

di smi ssal of br each of f i duci ar y dut y cl ai m wher e pl ai nt i f f

f ai l ed to pr ove any damages) .

C.

The def endant ar gues t hat f or t he al l egat i ons wi t hi n t he

l i mi t at i ons per i od, namel y t he al l egedl y def amat or y publ i c

st atement s made i n December 2013 and t he l et t er sent t o f ederal

aut hor i t i es i n May 2014 seeki ng pr osecut i on of t he pl ai nt i f f ,

t her e was no f i duci ar y r el at i onshi p bet ween t he pl ai nt i f f and

t he def endant .

A f i duci ar y r el at i onshi p ar i ses bet ween t wo per sons when

one of t hem i s under a dut y to act f or or t o gi ve advi ce f or t he

benef i t of anot her upon mat t er s wi t hi n t he scope of t he

r el at i on. Put di f f er ent l y, a f i duci ar y r el at i on exi st s when

conf i dence i s r eposed on one si de and t her e i s r esul t i ng

super i or i t y and i nf l uence on t he ot her . Eur ycl ei a Par t ner s, LP

v. Seward & Ki ssel , LLP, 910 N. E. 2d 976, 980 ( N. Y. 2009)

( i nt er nal quot at i ons and ci t at i ons omi t t ed) . Thi s i s a f act -

speci f i c i nqui r y. I d. ; see al so Roni LLC v. Ar f a, 963 N. E. 2d

123, 125 ( N. Y. 2011) .

Mor e speci f i cal l y, t he exi st ence of an at t or ney- cl i ent

r el at i onshi p does not depend sol el y on whet her t her e i s a f or mal

agr eement bet ween t he par t i es; r at her , cour t s l ook t o t he wor ds

and act i ons of t he par t i es t o ascer t ai n t he exi st ence of such a

45



46/63

r el at i onshi p. Mor an v. Hur st , 822 N. Y. S. 2d 564, 566 ( App. Di v.

2006) ( i nt er nal ci t at i ons omi t t ed) ; see al soSt ei nbeck v.

St ei nbeck Her i t age Found. , 400 F. App' x 572, 577 ( 2d Ci r . 2010)

( summar y or der ) ( hol di ng t hat al l egat i ons t hat at t or neys hel d

t hemsel ves out t o be exper t s and t ol d t he pl ai nt i f f t hey had hi s

best i nt er est s i n mi nd wer e i nsuf f i ci ent t o show an at t or ney-

cl i ent r el at i onshi p, especi al l y when t he pl ai nt i f f was

r epr esent ed by ot her counsel ) .

The Amended Compl ai nt al l eges t hat t he def endant r ecei ved a

subpoena f or t he f eder al i nvest i gat i on of t he pl ai nt i f f on Mar ch

12, 2007, and subsequent l y cl ai med t o be conf l i ct ed f r om

kerik v tacopina / opinion and order

Documents