marshall motion to dismiss 121211
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UNITED STATES DISTRICT COURTFOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
THE GIL RAMIREZ GROUP, L.L.C.;AND GIL RAMIREZ, JR.
Plaintiffs,
V . ase No. 4:10-CV-04872
HOUSTON INDEPENDENT SCHOOLDISTRICT; LAWRENCE MARSHALL;EVA JACKSON; AND RHJ-JOC, INC.
Defendants.
DEFENDANT MARSHALL & ASSOCIATES' MOTION FOR A MORE DEFINITESTATEMENT AND MOTION TO DISMISS
PLAINTIFFS' SECOND AMENDED ORIGINAL COMPLAINT
TO THE HONORABLE JUDGE OF SAID COURT:
COMES NOW Defendant MARSHALL & ASSOCIATES, by and through undersigned
counsel, with their Motion to Dismiss pursuant to Rules 12(b)(6) and 8(a) of the Federal Rules of
Civil Procedure and Motion for More Definite Statement as to Plaintiffs' Second Amended
Original Complaint (Doc 62), and in support thereof would respectfully show the Court as
follows:
I.
INTRODUCTION
In their Second Amended Original Complaint, Plaintiffs, the Gil Ramirez Group, L.C.C.
and Gil Ramirez, Jr. (hereinafter collectively referred to as "Plaintiffs") added Defendant
Marshall & Associates as a party to the lawsuit. The complaint, however, fails to assert any
claims against Marshall & Associates and it fails to allege any facts indicating Marshall &
Associates was involved in the events that serve as the basis of Plaintiffs' claims. Because
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Plaintiffs Second Amended Original Complaint fails to satisfy the pleading standards of the
Federal Rules of C ivil Procedure, Defendant Marshall & A ssociates requests that this Court issue
an order dismissing Plaintiffs' claims against it under Rule 12(b)(6) and 8(a) for failure to state a
claim upon which relief may be granted. Alternatively, Marshall & Associates requests that this
Court issue an order requiring Plaintiffs to amend their complaint pursuant to Rule 12(e) of the
Federal Rules of Civil Procedure, specifying the claims and factual allegations asserted against
Marshall & A ssociates.
DEFENDANT'S MOTION TO DISMISS
A . tandard
A cause of action can fail to state a "claim upon which relief can be granted" if it fails to
comply w ith the requirements of Rule 8(a)(2).Bradley v. Phillips Petroleum Co., 527 F.Supp.2d
661 (S.D. Tex. 2007); See, e.g., Buerger v. Sw. Bell Tel. Co., 982 F.Supp. 1247, 1249-50 (E.D.
Tex. 1997); Bank of Abbeville & Trust Co. v. Commonwealth Land Title Ins. Co., 201 Fed.
Appx. 988, 990 (5t h
Cir. 2006). "Rule 8(a)(2) still requires a showing, rather than a blanket
assertion, of entitlement to relief. Without some factual allegation in the complaint, it is hard to
see how a claimant could satisfy the requirement of providing not only fair notice of the nature
of the claim, but also grounds on which the claim rests." Twombley, 550 U.S. 544 (2007);
Ashcroft, 129 S.Ct. 1937 (2009).
"[A] Rule 12(b)(6) motion to dismiss for failure to state a claim may be a proper vehicle
to challenge the sufficiency of a pleading under Rule 8." Abbeville, 201 Fed. Appx. at 990. "A
statement of facts that merely creates a suspicion that the pleader might have a right of action" is
insufficient to overcome a motion to dismiss. Cam pbell v. City of San Antonio,43 F.3d 973, 975
(5 t h Cir. 1995); see also Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007); see also Ashcroft v.
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Iqbal, 129 S.Ct. 1937 (2009). A plaintiff is obligated to provide "more than labels and
conclusions, and a formulaic recitation of the elements of a cause of action will not do."
Twombly, 550 U.S. at 555-56 (2007) (quoting Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct.
2932, 92 L.Ed.2d 209 (1986); See also Ashcroft, 129 S.Ct. at 1949. "Factual allegations must be
enough to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555;
Ashcroft, 129 S.Ct. at 1949; Lexington Ins. Co. v. S.HR.M Catering Servs., Inc., 567 F.3d 182,
184 (5t h Cir. 2009).
Plaintiffs' Second Amended Original Complaint fails to meet the pleading requirement
set forth in the Federal Rules of Civil Procedure with respect to Marshall & Associates. In the
introductory paragraph of their complaint, Plaintiffs indicate that they intend to refer to both
Defendant Lawrence Marshall and Defendant Marshall & Associates throughout the complaint
as "Marshall." (Plaintiffs' Second Amended Original Complaint at p. 1). While Plaintiffs assert
claims against "Marshall", Plaintiffs failed to specifically assert any claims against Marshall &
Associates. Furthermore, Plaintiffs fail to allege any facts supporting the proposition that
Marshall & Associates was involved in the alleged events that serve as the basis of Plaintiffs'
claims in this lawsuit. Id . at J 15-81.
B . laintiffs' 14 t h Amendment claim against Marshall and Associates should bedismissed.
Plaintiffs failed to specifically assert a claim under Section 1983 against Marshall &
Associates, and they have likewise failed to allege any facts that would support such a claim. To
state a claim under 42 U.S.C. 1983, Plaintiffs must allege violation of rights secured by the
Constitution and laws of United States, and they must show that alleged deprivation was
committed by a person acting under color of state law. 42 U.S.C.A. 1983. The definition of
acting under color of state law requires that the defendant in a 1983 action exercise power
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possessed by virtue of state law and made possible only because the defendant is clothed with
authority of state law. 42 U.S.C.A. 1983; West v. Atkins, 487 U.S. 42, 108 S.Ct. 2250 (1988).
Plaintiffs fail to allege any facts supporting the position that Marshall & Associates was clothed
with the authority of state law or that it was acting in any official capacity pursuant to state law.
Accordingly, Plaintiffs' claim under the 14 t h Amendment should be dismissed with respect to
Marshall & A ssociates.
C. laintiffs' RICO claim against Marshall & Associates should be dismissed.
Plaintiffs have alleged violations of various subsections of RICO, 18 U.S.C. 1962(b)-
(d), against Marshall & Associates. According to the Fifth Circuit, these subsections, in their
simplest terms, state that (a) a person cannot acquire or maintain an interest in an enterprise
through a pattern of racketeering activity; (b) a person who is employed by or associated with an
enterprise cannot conduct the affairs of the enterprise through a pattern of racketeering activity,
and (c) a person cannot conspire to violate subsections (a), (b), or (c). Crow e v. Henry, 43 F.3d
198, 203 (5 th Cir. 1995). RICO claims under these subsections require: "(1) a person who
engages in (2) a pattern of racketeering activity (3) connected to the acquisition, establishment,
conduct, or control of an enterprise." Id.; In re Mastercard Intl, Inc., 313 F.3d 257, 261 (5th Cir.
2002) (citing Crowe). Plaintiffs fail to specifically assert a RICO claim against Marshall &
Associates, and they fail to allege any facts in support of a RICO claim against Marshall &
Associates.
1. laintiffs fail to allege facts supporting the existence of an enterprise.
An enterprise under RICO is a group of persons or entities associating together for the
common purpose of engaging a course of conduct. Whelan v. Winchester Prod. Co., 319 F.3d
225, 229 (5t h Cir. 2003) (citing 18 U.S.C. 1961(4)). An enterprise may be a legal entity or any
union or group of individuals associated in fact, who are associating together for the common
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purpose of engaging in a course of conduct. Id . The existence of a legal entity alone is not
enough to constitute an enterprise under RICO .Id . A RICO enterprise must "have at least three
structural features: a purpose, relationships among those associated with the enterprise, and
longevity sufficient to permit these associates to pursue the enterprise's purpose." Boyle v. US.,
129 S.Ct. 2237, 2244 (2009). When the relationship between members of an alleged enterprise
does not "exist for purposes other than simply to commit the predicate acts and reap the resultant
rewards," the relationship is not a RICO enterprise. In re McCann, 268 Fed. Appx. 359, 366 (5t h
Cir. 2008); Whelan, 319 F.3d at 229 ("The enterprise is not a pattern of racketeering activity, but
must exist separate and apart from the pattern of racketeering activity in w hich it engages").
Plaintiffs contend in their Second Amended Original Complaint that Defendants formed
an enterprise, and they alternatively attempt to establish the existence of an association-in-fact
enterprise. (Plaintiffs Second Amended Original Complaint at lj 93-94.) An "association-in-
fact" enterprise is "a group of persons associated together for a common purpose of engaging in
a course of conduct." US. v. Turkette, 452 U.S. 576, 583, 109 S.Ct. 2893, 106 L.Ed.2d 195
(1981). Such an enterprise "(1) must have an existence separate and apart from the pattern of
racketeering, (2) must be an ongoing organization and (3) its members must function as a
continuing unit as shown by a hierarchical or consensual decision making structure." Turkette,
452 U.S. at 583; Gray v. Upchurch, 2007 WL 2258906 (S.D. Miss.). Plaintiffs fail to make
factual allegations in support of any of these elements with respect to Marshall & Associates or
any other Defendant. Specifically, Plaintiffs do not allege facts to support the existence of a
RICO enterprise, that the alleged "association-in-fact" enterprise had an existence separate and
apart from the pattern of racketeering, that there is an ongoing organization or that the members
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of the enterprise function as a continuing unit as shown by a hierarchical or consensual decision
making structure. (Plaintiffs Second Amended Original Complaint at T T93-94)
In short, Plaintiffs have asserted no facts that could reasonably suggest that there was an
enterprise sufficient to support their RICO claim. Id . at I N 91-112. They have pleaded no facts
that the alleged enterprise existed for any other purpose but to simply commit the predicate acts
of bribery, wire fraud and money laundering. Id . Plaintiffs' pleadings merely alleged various
players purportedly involved in the loss of their contract, but have offered no allegations to show
any association between them. Id . Thus, Plaintiffs' complaint fails to allege sufficient facts to
show that there was any enterprise that existed separate and apart from the purported pattern of
racketeering. Dispositively, Plaintiffs failed to make any factual allegations that Marshall &
Associates took any action related to the operation of an "enterprise," or that Marshall &
Associates formed or was a member of a legal entity with any other Defendant to associate
together for any common purpose.
Because Plaintiffs Second Amended Original Complaint fails to set forth any allegations
that Marshall & Associates was involved in an "enterprise" or an "association-in-fact enterprise"
as required to bring claim under RICO, Count 2 of the Complaint should be dismissed with
respect to Marshall & A ssociates.
2. laintiffs fail to allege facts supporting a pattern of racketeering activity.
To allege that Defendants engaged in a pattern of racketeering activity, the Plaintiffs must
plead that Defendants committed two or more predicate acts that (1) are related, and (2) amount
to or pose a threat of continued criminal activity. Word of Faith World Outreach Ctr. Church,
Inc. v. Sawyer, 90 F.3d 118, 122 (5 t h Cir. 1996); Delta Truck & Tractor, Inc. v. JI Case Co.,
855 F.2d 241, 243 (5 t h Cir. 1988). In their complaint, Plaintiffs contend that one or more of the
Defendants engaged in bribery, money laundering and/or wire fraud. (Plaintiffs' Second
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Amended Original Complaint at i n 103-107). Plaintiffs' pleadings, however, fail to state facts
attributing any of the alleged predicate acts to Marshall & Associates.Id .
a. ire Fraud (18 U.S.C. 1343)
To state a claim for wire fraud under 1343, a plaintiff must establish three elements:
"(1) a scheme or artifice to defraud or to obtain money or property by means of false pretenses,
representations, or promises; (2) a use of the interstate mails or wires for the purpose of
executing the scheme; and (3) a specific intent to defraud either by revising, participating in, or
abetting the scheme." Hewlett-Packard Co. v. Byd:Sign, Inc., 2007 WL 275476 (E.D. Tex.
Jan. 25, 2007).
Additionally, Texas law requires that a fraud claimant plead and prove that: (1) a
material representation was made; (2) the representation was false; (3) when the representation
was made, the speaker knew it was false or made it recklessly without any knowledge of the
truth and as a positive assertion; (4) the speaker made the representation with the intent that the
other party should act upon it; (5) the party acted in reliance on the representation; and (6) the
party thereby suffered injury. Aquaplex, Inc. v. Rancho La Valencia, Inc., 297 S.W.3d 768, 774
(Tex. 2009) (per curiam).
Rule 9(b) of the Federal Rules of C ivil Procedure imposes a heightened pleading standard
for fraud claims and requires that a party "state with particularity the circumstances constituting
fraud." The Fifth Circuit has interpreted Rule 9(b) to "require specificity as to the statements (or
omissions) considered to be fraudulent, the speaker, when and why the statements were made,
and an explanation why they are fraudulent." Plotkin v. IP Axess Inc., 407 F.3d 690, 696 (5th
Cir. 2005). "Put simply, Rule 9(b) requires ' the who, what, when, where, and how' to be laid
out." Shandong Yinguang Chem. Indus. Joint Stock Co., Ltd. v. Potter,607 F.3d 1029, 1032 (5t h
Cir. 2010) (quoting Benchmark Electronics, Inc. v. JM Huber Corp., 343 F.3d 719, 724 (5t h
Cir.
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2003)). Rule 9(b) requires a plaintiff to allege the existence of facts sufficient to warrant the
pleaded conclusion that fraud has occurred. See In re Haber Oil Co., 12 F.3d 426, 439 (5t h
Cir.
1994). Plaintiffs' fraud allegations do not identify any specific statements, the speaker, or when
any allegedly fraudulent statement was made. (See Plaintiffs' Second Amended Original
Com plaint at irg 105-106).
While Rule 9(b) provides that intent and knowledge "may be alleged generally," this is
not a license to base claims of fraud upon conclusory allegations. City of Clinton, Ark. v.
Pilgrim's Pride Corp., F.3d , No. 10-10039, 2010 WL 5162041 (5t h
Cir. 2010). Proving
the knowledge element of fraud requires more than a simple allegation that a defendant had
fraudulent intent it requires specific facts that support an inference of fraud.Tuchman, 14 F. 3d
at 1068. The requirements for such specific facts can be satisfied by (1) alleging facts that show
a defendant's motive to commit fraud, or (2) identifying circumstances that indicate conscious
behavior on the part of the defendant, with the strength of such circumstantial allegations being
correspondingly greater. Id.; Ashcroft v. lqbal, 129 S.Ct. 1937, 1949 (2009) ("Threadbare
recitals of the elements of a cause of action, supported by mere conclusory statements, do not
suffice."). Plaintiffs do not allege facts that support an inference of fraud as to Defendants, nor
have they pleaded any specific facts to show the requisite intent or meet the heightened pleading
requirement under Rule 9(b).
b . ribery (18 US. C. 201)
It is unlawful to directly or indirectly, corruptly give, offer or promise anything of value
to any public official or person who has been selected to be a public official, or offer or promise
any public official or any person who has been selected to be a public official to give anything of
value to any other person or entity, with the intent to influence. 18 U.S.C. 201. It is also
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unlawful for a public official or person selected to be a public official, to directly or indirectly,
corruptly demand, seek, receive, accept, or agree to receive or accept anything of value
personally or for any other person or entity, in return for being influenced. Id. To constitute
bribery under Section 201, payment to a public official must be made in exchange for an explicit
promise to perform or not perform an official act. Id . The payment must also be made with the
intent to bribe. United States v. To mb lin,46 F.3d 1369, 1379 (5th C ir. 1995).
Plaintiffs' Second Amended Complaint fails to set forth Marshall & Associates'
purported involvement in any of the acts of bribery alleged in the complaint. (Plaintiffs' Second
Amended Original Complaint at 104). In fact, the only allegation in Plaintiffs' complaint
regarding bribery is a statement that "the bribery included payments and other emoluments to
Defendant Marshall in exchange for preferential treatment to other Defendants." Id . Plaintiffs'
allegation, based solely on its characterization of political contributions, is conclusory at best.'
Even if it were read to implicate Marshall & Associates, it fails to identify the payments made,
the party who made the payments, the amount of the payments, or the preferential treatment that
was secured by the alleged payments. Because Plaintiffs failed to plead facts sufficient to
support their allegations of bribery, their claim should be dismissed with respect to Marshall &
Associates.
c . oney Laundering (18 US. C. sC 1956)
To establish the substantive offense of money laundering under 18 U.S.C.
1956(a)(1)(A)(i), a plaintiff must show that the defendant "(1) knowingly cond ucted a financial
transaction; (2) which involved the proceeds of an unlawful activity; and (3) with the intent to
promote or further unlawful activity." US. v. Dovalina, 262 F.3d 472, 475 (5t h
Cir. 2001). To
Evidence of political contributions alone is insufficient to support a claim of bribery.See Un ited States v. Allen, 10F.3d 405,411 (7th Cir. 1993).
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satisfy the final element of a mon ey laundering conviction, Plaintiffs must show that a D efendant
conducted the financial transaction in question with the specific intent of promoting the specified
unlawful activity. Id .
Plaintiffs fail to assert any specific facts as to what financial transaction was conducted,
who conducted it, or when it was conducted. (Plaintiffs' Second Amended Original Complaint
at ty 107). Plaintiffs similarly fail to assert facts that this financial transaction involved in some
way the proceeds of an unlawful activity or that the parties had the requisite intent required for
money laundering. Id . Finally, Plaintiffs fail to allege any facts or assert any claims indicating
that Marshall & Associates was involved in money laundering.Id .
D. laintiffs' claims for tortious interference should be dism issed.
Plaintiffs asserted claims for tortious interference with existing and prospective contracts
against "Marshall," but failed to plead facts sufficient to support such a claim. (Plaintiffs'
Second Amended Original Complaint at J 132-142.) Plaintiffs' claim for tortious interference
with an existing contract simply sets forth the elements in a conclusory statement alleging that
"Marshall" and other Defendants "willfully and intentionally interfered" with Plaintiffs' contract
with HISD. Id . At 134. Similarly, Plaintiffs contend that "Marshall" and other Defendants
interfered with the relationship between Plaintiffs and HISD that, with a "reasonable
probability," would have resulted in additional contracts. Id. at 138-139. Plaintiffs' complaint
utterly fails to allege any facts supporting either claim, and nowhere in their complaint do they
allege any facts indicating that Marshall & Associates interfered with an existing or prospective
contract. Accordingly, Plaintiffs' claims for tortious interference with existing and prospective
contracts should be dismissed w ith respect to Marshall & Associates for failure to state a claim.
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E. laintiffs' claim for "civil conspiracy" should be dismissed.
Once again, Plaintiffs have failed to assert that Marshall & Associates was involved in
any alleged conspiracy and none of the facts alleged in Plaintiffs' Second Amended Petition
would support such a claim. (Plaintiffs Second Amended Original Complaint at J 146-151.)
Even if Plaintiffs had pled such facts, their claim for civil conspiracy is improper. Civil
conspiracy is not an independent claim, but requires an "underlying tort which the alleged
conspirators agreed to com mit[.]" Zarzana v. Ashley, 218 S.W.3d 152, Tex. App. Houston [14th
Dist.], 2007; Baker v. Stewart Title & Trust of Phoenix, 197 Ariz. 535, 5 P.3d 249, 259 (Ariz.
Ct.App. 2000). "Allegations of conspiracy are not actionable absent an underlying [tort]").
Tobacco Co. v. Grinnell,951 S.W .2d 420, 438 (Tex. 1997);See also Askanase v. Fatjo, 130 F.3d
657, 676 (5t h
Cir. 1997). Plaintiffs failed to identify the tort underlying their allegations of
conspiracy. (Plaintiffs' Second Amended Original Complaint at J 146-151.) Accordingly,
Plaintiffs' claim for conspiracy should be dismissed with respect to Marshall & Associates.
DEFENDANT'S MOTION FOR MORE DEFINITE STATEMENT
A . tandard
A party may move for a more definite statement of a pleading to which a responsive
pleading is allowed by which is so vague or ambiguous that the party cannot reasonably prepare
a response. FED. R. Civ. P. 12(e); Sisk v. Texas Parks & Wildlife Dept., 644 F.2d 1056, 1059
(5th Cir. 1981). If the Court orders a more definite statement and the order is not obeyed within
14 days after notice of the order or within the time the court sets, the court may strike the
pleading or issue another appropriate order.Id .
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B . laintiffs fail to state what, if any, claims they assert against Marshall & Associates
As was discussed above, Plaintiffs indicate in the introductory paragraph of their Second
Amended Complaint that they intend to refer to both Defendant Lawrence Marshall and
Defendant Marshall & Associates throughout the complaint as "Marshall." (Plaintiffs' Second
Amended Original Complaint at p. 1). While Plaintiffs assert claims against "Marshall",
Plaintiffs failed specifically assert any claims against Marshall & Associates. Furthermore,
Plaintiffs fail to allege any facts supporting the proposition that Marshall & Associates was
involved in the alleged events that serve as the basis of Plaintiffs' claims in this lawsuit. See Id.
at IN 15-81. In failing to do so, Plaintiffs have failed to meet the pleading requirements set forth
in the Federal Rules of Civil Procedure and the Second Amended Complaint is so vague or
ambiguous with respect to Marshall & Associates that it cannot reasonably prepare its response.
In the event that the Court denies Marshall & Associates' motion to dismiss, Plaintiffs should be
ordered to re-plead and place Marshall & Associates on notice as to the claims asserted against
it.
Iv.
CONCLUSION
Defendant Marshall & Associates respectfully requests the Court to order Plaintiffs to
amend their complaint, specifying the facts and/or causes of action asserted against Marshall &
Associates. Alternatively, Marshall & Associates requests that the Court dismiss Plaintiffs'
claims against them pursuant to Rules 12(b)(6) and 8(a) of the Federal Rules of Civil Procedure,
and for the Court to award Defendant Marshall & Associates such further relief as the Court
deems appropriate under the circumstances.
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Respectfully submitted,
B RACE WELL & GIULIANI LLP
B y: /s/ Jarvis V HollingsworthJarvis V. HollingsworthAttorney-in-ChargeState B ar No. 00787708SDT B ar No. 216068Richard F. Wh iteleyState B ar No. 24013744SDT B ar No. 24408David W. M orrisState B ar No. 24046481SDT B ar No. 585631Melissa A. MihalickState B ar No. 24045589SDT B ar No. 808466
711 Lo uisiana, Suite 2300Telephone: (713) 221-1563Facsimile: (713) 221-1212
ATTORNEY FOR DEFENDANTLAWRENCE MARSHALL
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the foregoing document has beenforwarded to counsel of record pursuant to the Federal Rules of Civil Procedure via the Court'selectronic filing service unless the Court record indicates other means of service on the 12th dayof December, 2011.
/s/ David W . MorrisDavid W. M orris
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