UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
March 16, 2012
WADE ROBERTSON, PLAINTIFF,
WILLIAM C. CARTINHOUR, JR. ET AL., DEFENDANTS.
The opinion of the court was delivered by: Ellen Segal Huvelle United States District Judge
This case involves parties and events that have been before this and other courts many times. Previously, Wade Robertson sued William Cartinhour in this Court, but the jury found against Robertson and returned a verdict in Cartinhour's favor for $3.5 million in compensatory damages and $3.5 million in punitive damages for breach of fiduciary duties as a partner and as a lawyer and for legal malpractice. Now, Robertson has sued Cartinhour and the lawyers who represented him, as well as several of Cartinhour's Serbian associates. In this new suit, which was originally filed in the Southern District of New York, Robertson recasts as a conspiracy the events underlying the first suit, seeking to recover $3.83 million in damages based on claims under the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1962, and for fraud, defamation, and tortious interference. Defendants have filed motions to dismiss all counts which, for the reasons set forth, will be granted.*fn1
I. ROBERTSON I
A. Factual Background
The facts giving rise to the instant suit have been detailed in a raft of opinions, but most comprehensively in Robertson I, 691 F. Supp. 2d 65, 68 (D.D.C. 2010), and In re W.A.R. LLP, No. 11-cv-1574, 2012 U.S. Dist. LEXIS 9565 (D.D.C. Jan. 27, 2012). *fn2 The long and tortured history of Robertson's relationship with Cartinhour and proceedings in appellate, district, and bankruptcy courts need not be restated at length here, but a summary of the factual and procedural history of Robertson's attempts to stop Cartinhour from recovering his $3.5 million investment in W.A.R., LLP ("WAR") is necessary to address the instant motions.
In September 2004, Robertson, an attorney, and Cartinhour, an 82-year-old retired physician, entered into a partnership, WAR, to invest in class action securities litigation. Robertson I, 691 F. Supp. 2d at 68. From September 2004 to April 2006, Cartinhour contributed a total of $3.5 million. Id. From September 2004 to August 2009, Robertson allegedly contributed legal services, which he values at $3.83 million, almost entirely in the class action securities suit Liu v. Credit Suisse First Boston Corp, No. 04-cv-03757 (S.D.N.Y. 2004). Id. at 68--69. Ultimately, the Liu case was dismissed and, as a result, WAR recovered nothing. Id. at 69; Robertson I, 2012 U.S. Dist. LEXIS 9565, at **9--10.
Even though the Liu litigation was dismissed by the district court in April 2005, Cartinhour contributed his final $1.5 million to WAR in April 2006 and, that same month, by Robertson's request, Cartinhour signed three agreements. Robertson I, 691 F. Supp. 2d at 68--69. The first, the Indemnification Agreement, purported to release Robertson from all claims by Cartinhour for "any future injuries, losses, or damages not known or anticipated" and required Cartinhour to indemnify him for any damages if he filed suit against him. Id. at 68--69.*fn3 The second was an amended partnership agreement giving Robertson "exclusive" control over WAR and allowing partners to take out interest-free loans from WAR without having to repay them until the partnership was liquidated. Id. at 69 n. 5. Third, Cartinhour signed an "Attestation and Certification of No Attorney-Client Relationship with Wade Robertson," which relinquished any claims that Cartinhour may have against Robertson "that could arise from any attorney-client relationship, whether actual or mistakenly assumed, or otherwise." Id. at 70. One month later, the Second Circuit affirmed the district court's dismissal of Liu and the Supreme Court thereafter denied certiorari. Id at 69.
Despite failures in the Liu litigation and unbeknownst to Cartinhour, Robertson borrowed $3.405 million from the partnership via two interest-free loans, the repayment of which was not due until January 2030 and January 2040, respectively. Robertson I, 429 Fed. Appx. at 1. He deposited this money into an account opened in his own name and quickly lost $1.9 million of this money in the stock market. See Robertson I, Preliminary Injunction Hearing Tr. 93:3--6 (D.D.C. Mar. 26, 2010). All of the money for the loans to Robertson came from Cartinhour's investment. Robertson I, 2012 U.S. Dist. LEXIS 9565, at *13.
After the Liu litigation collapsed, Robertson stopped responding to Cartinhour's inquiries about the status of the case and his investment. Robertson I, 691 F. Supp. 2d at 69. Finally, on January 9, 2009, and February 6, 2009, Cartinhour's attorney, Albert Schibani, wrote a letter demanding that Robertson return Cartinhour's money. (Compl. ¶ 72.) When Robertson did not comply, another one of Cartinhour's attorneys, Carlton Obecny of the law firm Selzer Gurvitch Rabin & Obecny ("SGRO"),*fn4 sent two demand letters in August 2009 and threatened to file suit. (Id. ¶ 76.) Robertson still did not return the money. Robertson I, 691 F. Supp. 2d at 69.
B. Robertson I
Instead, on August 28, 2009, Robertson filed suit in this Court, seeking a declaratory judgment that he was not liable for Cartinhour's investment in WAR based on the agreements signed by Cartinhour in April 2006 that supposedly authorized him to take interest-free loans and released him from all liability. SGRO, on Cartinhour's behalf, answered, demanded the return of his investment, and counterclaimed for fraud, breach of fiduciary duty as a partner and lawyer, legal malpractice, and various other torts and equitable causes of action. Robertson I, 429 Fed. Appx. at 1--2.
In response to Cartinhour's counterclaims, Robertson filed an answer and asserted "counter-counter claims" for breach of contract, setoff, quantum meruit, and misrepresentation relating to his contributed legal services to WAR. *fn5 However, since they were improperly asserted in his answer as counter-counterclaims to Cartinhour's counterclaims, they were therefore stricken upon Cartinhour's unopposed motion. At the time, the Court informed Robertson that those claims must be asserted by amending his complaint in accord with Rule 15.*fn6
Nevertheless, he never did so.
As with Robertson's unrelated litigation in California, *fn7
the ensuing litigation here was tumultuous. His incessant
filings-described as "vexatious," "meritless," "reckless," and "bad
faith"- ultimately elicited warnings and sanctions from this Court, as
well as the Court of Appeals, for frustrating proceedings and imposing
unnecessary costs on Cartinhour.*fn8
Robertson's litigiousness reached new heights when Cartinhour attempted to preserve the small amount of Cartinhour's $3.5 million that remained. After it became apparent that Cartinhour's investment, $3.405 million of which had been moved by Robertson to his personal accounts though self-authorized loans, had been dissipated and only $700,000 remained in Robertson's personal accounts, the Court froze the accounts. Robertson I, 691 F. Supp. 2d at 70--71. In the midst of this, Robertson showed up at Cartinhour's home, without his attorneys' knowledge or consent, and threatened Cartinhour with "prolonged and costly" litigation if he did not settle. Id. at 72. Cartinhour's attorneys moved to enjoin Robertson from contacting him without counsel present, but the very next day and before this Court could rule, Robertson again went to Cartinhour's apartment and spoke to him through the door since Cartinhour refused to allow Robertson inside. Id. The Court, with the eventual consent of Robertson's counsel, issued a restraining order requiring Robertson to stay away from Cartinhour. See id. at 72. Subsequently on March 26, 2010, the Court entered a second freezing order, which was ultimately upheld on appeal by the D.C. Circuit. Robertson I, 429 Fed. Appx. at 1--2, 4.
Increasingly dissatisfied with the proceedings in this Court, Robertson unleashed a barrage of motions in this Court and the Court of Appeals. In addition, he moved for recusal, arguing that that Court was biased. Robertson I, 691 F. Supp. 2d at 74. When that motion was denied, he again went to the Court of Appeals, but his request for a new judge, his petition for a writ of mandamus ordering recusal, and his many interlocutory appeals were summarily denied.*fn9
Finally, he filed a motion in the Court of Appeals to sanction and disqualify Cartinhour's attorneys in Robertson I, arguing that they had fabricated evidence and had failed to disclose key facts, which was also denied as groundless and unwarranted. Robertson I, Order, 10-7033 (D.C. Cir. Sept. 21, 2010).
C. The Trial
The legal claims and defenses presented in Robertson I were tried to a jury over six days in February 2011. The jury heard evidence relating to the signing of the original WAR partnership agreement, the Indemnification Agreement, and the Attestation of No Attorney-Client Relationship.
At trial, Robertson argued that the WAR partnership agreement and
other agreements were valid, knowing, and voluntary.*fn10
He claimed that he was not liable to Cartinhour because he
had not been Cartinhour's attorney, Cartinhour understood the
agreements he signed, and Cartinhour had been represented by
independent attorney, Robert "Larry" Ash, when he signed the
partnership agreement.*fn11 Robertson cross-examined
both Cartinhour*fn12 and Ash,*fn13 and
both testified that Ash had not reviewed any of the agreements Cartinhour
signed, consulted with Cartinhour about the agreements, or represented
him on the matter.*fn14
On February 18, 2011, after a day of deliberations, the jury returned a $7 million verdict in Cartinhour's favor: $3.5 million in compensatory damages and $3.5 million in punitive damages. In response to Cartinhour's special verdict form, the jury found that an attorney-client relationship existed between Robertson and Cartinhour, that Robertson breached his fiduciary duties to Cartinhour as his business partner and as an attorney, and that Robertson committed legal malpractice. See Robertson I, Verdict Form (Feb. 18, 2011). In addition, the jury found that the Indemnification Agreement was procured by undue influence, was unconscionable, and thus, was unenforceable by Robertson. Id.*fn15
In his appeal, Robertson challenges this verdict and objects to many of the Court's rulings, arguing that the Court should have enforced the partnership and indemnification agreements, and challenging the ruling that any recompense for his services must be asserted as a claim against the partnership rather than Cartinhour. Robertson I, No. 11-7026, Corrected Br. for Appellant at 33, 48 (D.C. Cir. Jan. 4, 2011) ("Robertson I Appeal Br."). Further, he contends that the trial was fundamentally unfair because of the purported misrepresentations by Cartinhour and his attorneys during discovery and pretrial proceedings. Id. at 56.
D. Bankruptcy Proceedings
In an effort to sidetrack the trial in Robertson I and to find a more
favorable forum, Robertson filed first for a stay,*fn16
then initiated actions in two other jurisdictions.
First, in the Western District of Tennessee, Robertson sought to stay Robertson I based on bankruptcy proceedings filed against WAR. The Tennessee bankruptcy court, as well as this Court, rejected his attempts to invoke the automatic stay provision of the U.S. Bankruptcy Code, 11 U.S.C. § 362, ruling that "[it] does not stay claims against Robertson because he is not the debtor." See Robertson I, 2012 U.S. Dist. LEXIS 9565, at **6--8.
The Tennessee bankruptcy court transferred the case to the District of Columbia Bankruptcy Court on January 4, 2011, due to the significant adversarial proceedings already underway in the District of Columbia.*fn17 Robertson I, 2012 U.S. Dist. LEXIS 9565, at *9. Finding "no property available for distribution from the estate," the bankruptcy trustee in this Court filed a report of no distribution on March 30, 2011, id. at **9--10, which was affirmed by Bankruptcy Court Judge Teel and then by Chief Judge Lamberth. Id. at *20.
II. ROBERTSON II
Second, he filed a new suit in the Southern District of New York ("Robertson II"),*fn18 naming Cartinhour, all of the lawyers who were working on Robertson I,*fn19 and a cast of others. See Robertson II, No. 10-cv-8442, 2011 U.S. Dist. LEXIS 126030, at *13 (S.D.N.Y. Nov. 9, 2010). Although it was styled as a civil RICO complaint, it centered on the same facts and claims as were presented in Robertson I. The defendants who had been served (Cartinhour and his lawyers) filed a motion to dismiss or, in the alternative, to transfer the case to the District of Columbia, which Judge Swain granted, observing:
Robertson's decision to file suit in the Southern District of New York appears to have been principally a tactical maneuver to avoid the jurisdiction of the D.C. Court, and so should be accorded little deference.
Id.*fn20 Upon transfer, this case was initially assigned to Judge Bates. Robertson filed a Notice of Related Case in Robertson II but, contrary to his obligations to the Court, he identified only the bankruptcy case as related under LCvR 40.5(b)(3). *fn21 Defendants, however, filed notice identifying this case as related to Robertson I.*fn22 Thereafter, the case was reassigned to this Court.
In a total about-face, Robertson now claims in Robertson II that he was the victim and that it was he who was defrauded by Cartinhour into entering into their partnership agreement, and by Cartinhour and his lawyers' actions in Robertson I, which constitute evidence of a RICO conspiracy against him.*fn23
Specifically, his first RICO claim centers on an alleged criminal enterprise consisting of Cartinhour, his attorneys in Robertson I, and members of the William C. Cartinhour, Jr. Foundation, a Serbian charity ("Charity") (Compl. ¶¶ 43, 52), to which Cartinhour's financial interest in WAR was assigned. He claims that he was fraudulently induced by Cartinhour to enter into and remain in the partnership, that Cartinhour was the one pulling the wool over his eyes, and that all defendants are liable for predicate acts including immigration fraud, tax fraud, extortion, and misrepresentations during the Robertson I litigation.*fn24 (Id. ¶¶ 112, 114, 120, 122; Pl.'s Opp'n to Defs.' Mots. to Dismiss ("Pl.'s Opp'n") at 5--8.)
His second RICO claim names Cartinhour's attorneys in Robertson I as a racketeering enterprise based on his accusation that they committed wire and mail fraud, extortion, obstruction of justice, and witness retaliation based on acts including failing to disclose Ash's name in discovery requests, filing an inaccurate letter stating that Robertson was Cartinhour's counsel for TCT, making defamatory statements about Gray, and presenting false affidavits. (Id. ¶¶ 128, 130, 136, 138; Pl.'s Opp'n at 5--8.)
In addition, he charges all defendants with fraud, defamation, business defamation and tortious interference based on these same allegations. (Id. ¶¶ 141--49.)
In terms of damages, Robertson contends that he is owed $3.83 million in legal services to WAR (id. ¶ 106), which is the very setoff he sought-and still seeks- in Robertson I. See Robertson I Appeal Br. at 48. He conveniently omits any mention of the $3.405 million of Cartinhour's money that he loaned himself, the $1.9 million he lost in the stock market, or the $7 million judgment in Robertson I, most of which remains unsatisfied.
Cartinhour and the attorney-defendants have filed motions to dismiss all counts. *fn25
I. EFFECT OF PRIOR PROCEEDINGS
Given the significant overlap in Robertson I and Robertson II, many of Robertson's claims are barred by res judicata,*fn26 judicial estoppel, and the requirement that challenges to trial procedures be litigated on appeal rather than by initiating new cases. Consequently, he is precluded from now claiming that Cartinhour was the one who defrauded him with respect to the partnership agreements, that Cartinhour owes him for his services to WAR, that he did not serve as Cartinhour's attorney after they entered into the partnership agreements, and that Cartinhour and his attorneys engaged in a conspiracy against him and this Court through their litigation conduct in Robertson I.
"The preclusive effect of a judgment is defined by claim preclusion and issue preclusion, which are collectively referred to as 'res judicata.'" Taylor v. Sturgell, 553 U.S. 880, 892 (2008). "By 'preclud[ing] parties from contesting matters that they have had a full and fair opportunity to litigate,' these two doctrines protect against 'the expense and vexation attending multiple lawsuits, conserv[e] judicial resources, and foste[r] reliance on judicial action by minimizing the possibility of inconsistent decisions.'" Id. (quoting Montana v. United States, 440 U.S. 147, 153--54 (1979)); see also Hardison v. Alexander, 655 F.2d 1281, 1288 (D.C. Cir. 1981) ("The doctrine is designed to conserve judicial resources, avoid inconsistent results, engender respect for judgments of predictable and certain effect, and  prevent serial forum-shopping and piecemeal litigation.").
Claim preclusion "bars relitigation not only of matters determined in
a previous litigation but also ones that a party could have raised,"
NRDC v. Thomas, 838 F.2d 1224, 1252 (D.C. Cir. 1988),*fn27
to prevent "litigation of matters that should have been
raised in an earlier suit." SBC Communs., Inc. v. FCC, 407 F.3d 1223, 1230 (D.C. Cir. 2005) (quoting
Marrese v. Am. Acad. of Orthopaedic Surgeons, 470 U.S. 373, 376 n.1
(1985)).*fn28 Issue preclusion, by contrast, "bars
"successive litigation of an issue of fact or law actually litigated
and resolved in a valid court determination essential to the prior
judgment." Taylor, 553 U.S. at 748 (quoting New Hampshire, 532 U.S. at
748--49).*fn29 A defendant who was not a party to the
earlier litigation may assert issue preclusion as a defense "to
prevent a plaintiff's litigation of issues the plaintiff previously
litigated and lost" even though the defendant is not bound by the
prior judgment. See McCord v. Bailey, 636 F.2d 606, 609 n.1 (D.C.
Cir.1980) (citing Blonder-Tongue Labs., Inc. v. Univ. of Ill. Found.,
402 U.S. 313, 328--29 (1971); Parklane Hosiery v. Shore, 439 U.S. 322,
In Robertson II, he now claims that Cartinhour was the one who defrauded him and misrepresented his intentions regarding WAR,*fn30 and he contends that he is owed money for the in-kind legal services that he provided to the attorneys who worked on the Liu litigation.*fn31 As an initial matter, Robertson has already asserted his claim for those services, and this Court has ruled that he cannot seek it from Cartinhour, as opposed to the partnership. See Robertson I, Minute Order (Feb. 24, 2011).*fn32 If his aim is to say that the alleged fraud rendered the partnership agreement invalid and therefore he can now bring claims against Cartinhour for his services, that claim would be barred as well. He had the opportunity to amend his complaint to assert fraud or any other legal claims, but chose not to do so. See Robertson I, Status Conf. Tr. 155:12--23, 166:22--167:03 (D.D.C. Mar. 22, 2010). Res judicata precludes him from doing so now because it would essentially nullify the jury's findings in Robertson I. See Capitol Hill Group v. Pillsbury, Winthrop, Shaw, Pittman, LLC, 569 F.3d 485, 492 (D.C. Cir. 2009) (explaining that res judicata bars claims when "the successful prosecution of the second action would nullify the initial judgment or impair the rights established in the initial action") (quoting Restatement (Second) of Judgments § 22(2)(b)). Nor can Robertson avoid the jury's finding that Robertson and Cartinhour in fact had an attorney-client relationship. Therefore, res judicata bars his claims that Cartinhour's sworn affirmations of such a relationship constitute wire fraud, mail fraud, extortion, and obstruction of justice.*fn33 Despite the fact that Robertson attempts to restyle his claims, "[t]here are no new facts. [He] is simply raising a new legal theory. This is precisely what is barred by res judicata." Apotex, Inc. v. FDA, 393 F.3d 210, 217--18 (D.C. Cir. 2004). *fn34
Judicial estoppel also precludes him from now attacking the validity of the partnership agreement because it "'prevents a party from asserting a claim in a legal proceeding that is inconsistent with a claim taken by that party in a previous proceeding.'" New Hampshire, 532 U.S. at 749 (quoting 18 Moore's Fed. Practice § 134.30 (3d ed. 2000)).*fn35 In Robertson I and his appeal, Robertson argued that the partnership agreement was valid and enforceable. To permit Robertson to argue the opposite now would impose substantial hardship on Cartinhour, who has spent significant money and years of his life embroiled in litigation with Robertson.
Finally, Robertson's claims regarding misrepresentations by Cartinhour and his attorneys during Robertson I cannot be recast as predicate acts for a RICO claim or a fraud claim.*fn36 He made these same arguments*fn37 unsuccessfully to the Court of Appeals when seeking to sanction and disqualify Cartinhour's attorneys, *fn38 and Cartinhour's alleged misrepresentations have again been raised in the Robertson I appeal.*fn39 Nonetheless, he attempts to make four separate predicate acts out of the alleged failure to disclose Ash in discovery documents, and three more based on Cartinhour's statement that he was not represented by Ash when signing the initial partnership agreement. (Compl. ¶¶ 80--82, 83, 90, 95--98; see also Pl.'s Opp'n at 6--8.) Moreover, the belated disclosure of Ash's role was of no consequence in the prior litigation since Robertson deposed him months before trial, he cross-examined both Ash and Cartinhour at trial,*fn40 and neither Ash nor Cartinhour supported Robertson's contention that Ash reviewed the agreements prior to Cartinhour signing them. (See supra nn. 12--14.)
If litigants are permitted to do what Robertson attempts here-that is bring entirely new law suits based on alleged errors (particularly harmless ones) in earlier suits-the concept of finality would be rendered a nullity. It is for this reason that "[t]he appeal process is available to correct error; subsequent litigation is not." See Hardison v. Alexander, 655 F.2d 1281, 1288 (D.C. Cir. 1981); Restatement (Second) of Judgments, § 19 ("The general rule stated in this Section requires that errors underlying a judgment be corrected on appeal or other available proceedings to modify the judgment or to set it aside, and not made the basis for a second action on the same claim.")*fn41 Robertson has exercised his right of appeal and that is all he is entitled under our judicial system.
II. JUDICIAL PROCEEDINGS PRIVILEGE
Robertson also asserts claims against the attorney-defendants based on these same alleged misrepresentations during Robertson I relating in large part to Ash. (See Pl.'s Opp'n at 6--8; Compl. ¶¶ 80--83, 85, 90--92, 94--98.)*fn42 As noted above, this is a familiar refrain.*fn43 Nonetheless, Robertson argues that he may raise this issue here because the attorney-defendants were not parties in Robertson I. (Pl.'s Opp'n at 29.)*fn44
This argument is unavailing. The attorney-defendants' representations in litigation cannot be a basis for suit because they are protected by the judicial proceedings privilege. This "absolute" privilege "'protects the attorney from liability . . . irrespective of his purpose . . . , his belief in its truth, or even his knowledge of its falsity.'" Finkelstein, Thompson & Loughran v. Hemispherx Biopharma, Inc., 774 A.2d 332, 338 (D.C. 2001) (quoting Restatement (Second) of Torts § 586 cmt. a). "For the absolute immunity of the privilege to apply, two requirements must be satisfied: (1) the statement must have been made in the course of or preliminary to a judicial proceeding; and (2) the statement must be related in some way to the underlying proceeding." Arneja v. Gildar, 541 A.2d 621, 623 (D.C. 1988).
Clearly, this privilege applies to the attorney-defendants' submissions of Cartinhour's affidavits to this Court, statements to the Court, and discovery responses in Robertson I. McNair Builders, Inc. v. Taylor, 3 A.3d 1132, 1135 n.1 (D.C. 2010) (applying the judicial proceedings privilege to preclude claims of fraud and misrepresentation). It also applies to the demand letters which warned Robertson of the litigation that eventually materialized when Cartinhour filed his counterclaims in Robertson I. See Messina v. Fontana, 260 F. Supp. 2d 173, 178 (D.D.C. 2003) (explaining that "'[t]he fact that the statements were made prior to the filing of an action . . . does not . . . defeat the privilege . . . . The statements were made in contemplation of litigation to the very individuals who would have an interest in the outcome of such litigation.'") (alteration in original) (quoting Conservative Club of Washington v. Finkelstein, 738 F. Supp. 6, 14 (D.D.C. 1990)), aff'd, Messina v. Krakower, 439 F.3d 755, 759-- 61 (D.C. Cir. 2006).
The principles applicable here-res judicata, the judicial proceedings privilege, and the requirement that challenges to trial court rulings and procedures be litigated on appeal- have a common purpose: to prevent parties from relitigating issues that were already litigated or could have been litigated before. These doctrines preclude Robertson from claiming that Cartinhour defrauded him with respect to the partnership agreements (Compl. ¶¶ 36--37, 39, 41, 67); that Cartinhour owes him for his services to WAR (id. ¶¶ 106, 115, 123, 131, 139); that he was extorted when Cartinhour's attorneys demanded that he return Cartinhour's money (id. ¶¶ 72-- 78); or that the defendants defrauded him and this Court through misrepresentations during the course of the Robertson I litigation. (Id. ¶¶ 80--83, 85, 90--92, 94--98.)
III. RICO CLAIMS (COUNTS I-IV)
Once these claims are eliminated, little, if anything, remains except for vague allegations that the Charity was a sham and claims about Tim Gray.*fn45 These remaining RICO claims cannot survive.
A. Legal Standard for Civil RICO Claims
A RICO violation under § 1962(c) consists of four elements: (1) conducting (2) an enterprise (3) through a pattern (4) of racketeering activity. W. Assocs. Ltd. P'ship v. Mkt. Square Assocs., 235 F.3d 629, 633 (D.C. Cir. 2001); see 18 U.S.C. § 1962(c) ("It shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of the enterprise's affairs through a pattern of racketeering activity . . . ."). "Racketeering activity" refers to the commission of statutorily-defined predicate criminal acts. W. Assocs. Ltd. P'ship, 235 F.3d at 633.*fn46 Conspiring to violate any subsection of 18 U.S.C. § 1962 is a separate violation of the RICO statute. See 18 U.S.C. § 1962(d).
To establish a pattern of racketeering activity under RICO, there must be at least two overt acts, 18 U.S.C. § 1961(5), which must be related and "amount to or pose a threat of continued criminal activity." H.J. Inc. v. Nw. Bell Tel. Co., 492 U.S. 229, 239 (1989).
"[C]ontinuity" refers 'either to a closed period of repeated conduct, or to past conduct that by its nature projects into the future with a threat of repetition.'" Edmondson & Gallagher v. Alban Towers Tenants Ass'n, 48 F.3d 1260, 1264 (D.C. Cir. 1995) (quoting H.J. Inc, 492 U.S. at 241). To determine whether closed-ended continuity has been established, the court must consider " the number of unlawful acts,  the length of time over which the acts were committed,  the similarity of the acts,  the number of victims,  the number of perpetrators, and  the character of the unlawful activity." Edmondson, 48 F.3d at 1265 (quoting Kehr Packages, Inc. v. Fidelcor, Inc., 926 F.2d 1406, 1411-13 (3d Cir. 1991)). These factors "should be applied in a manner that is fluid, flexible, and commonsensical, rather than rigid or formulaic." W. Assocs. Ltd. P'ship, 235 F.3d at 637. However, it is clear that "[p]redicate acts extending over a few weeks or months and threatening no future criminal conduct do not satisfy [the closed period] requirement." H.J. Inc., 492 U.S. at 242.
RICO authorizes civil enforcement by "any person injured in his business or property by reason of a violation of [the RICO statute]." 18 U.S.C. § 1964(c). Therefore, standing to sue under RICO requires a plaintiff to allege that (1) he suffered an injury to his business or property and (2) the predicate acts were the proximate cause of the injury. See Holmes v. Sec. Investor Prot. Corp., 503 U.S. 258, 268 (1992). Further, the plaintiff must show "some direct relation between the injury asserted and the injurious conduct alleged." Holmes, 503 U.S. at 268 (emphasis added); see also Anza v. Ideal Steel Supply Corp., 547 U.S. 451, 457 (2006) (reaffirming Holmes). "A link that is too remote, purely contingent, or indirect is insufficient." Hemi Grp., LLC v. City of New York, 130 S. Ct. 983, 989 (2010) (internal citations omitted).
B. Robertson II's RICO Claims (Counts I--IV)
Robertson alleges two patterns of racketeering with two enterprises-one being the Charity, plus Cartinhour and some attorney-defendants, and the other being the SGRO attorney- defendants. These form the basis for two substantive RICO violations under 18 U.S.C. § 1962(c) and two counts of conspiracy to violate RICO under 18 U.S.C. § 1962(d). (See Pl.'s Opp'n at 2.)
In Counts I and II, Robertson alleges that the Charity, Cartinhour, and certain SGRO attorneys constitute a criminal enterprise that has engaged in a pattern of racketeering consisting of predicate acts of mail fraud, wire fraud, financial institution fraud, extortion, obstruction of justice, and witness retaliation. (Compl. ¶¶ 112, 114, 120, 122; Pl.'s Opp'n at 2, 5--6, 8.)*fn47
These allegations are based on Robertson's contentions that the Charity committed immigration and tax fraud, extorted him by attempting to prevent him from reporting it, extorted an unnamed Serbian businessman, and that Kearney, Bramnick, or someone acting along with them made statements regarding Gray to a California attorney and Gray's landlord. (Id. at 17--21.)*fn48
In Counts III and IV, Robertson alleges that SGRO is the relevant enterprise and that it has engaged in a pattern of racketeering through mail fraud, wire fraud, obstruction of justice, and witness retaliation based on the statements about about Tim Gray. (Compl. ¶¶ 128, 130, 136, 138; Pl.'s Opp'n at 3--4, 6--8.)*fn49 Robertson's RICO claims fail for a variety of reasons. First, he lacks standing to bring any of these RICO claims since he has not been injured "by the conduct constituting the [RICO] violation." Sedima, S.P.R.L. v. Imrex Co., Inc., 473 U.S. 479, 496 (1985). Even if plaintiff was not recompensed for the time he allegedly spent on the Liu action, and even if such a claim were not barred, there is simply no direct connection between the alleged predicate criminal act and the injury for which he seeks to recover. Anza, 547 U.S. at 461 ("When a court evaluates a RICO claim for proximate causation, the central question it must ask is whether the alleged violation led directly to the plaintiff's injuries.")
Plaintiff's only allegation of injury is the loss of $3,833,440.00, which supposedly represents the sum of his uncompensated legal services to WAR. (Compl. ¶¶ 106, 115, 123, 139.) *fn50 However, his litany of predicate acts did not the cause this loss. Rather, Robertson could not collect for his time because the Liu litigation failed, and as a result, WAR had no income and the partnership had no funds to distribute. See Robertson I, 2012 U.S. Dist. LEXIS 9565, at **15, 19. In fact, the depletion of WAR's funds was caused by Robertson's self-authorized loans and the loss of more than $1.9 million when he bought stocks with Cartinhour's investment. Therefore, without a directly-caused injury, all of Robertson's RICO claims fail for lack of standing. See Anza, 547 U.S. at 457; Lopez, 657 F. Supp. 2d at 106, aff'd, 383 Fed. Appx. 1; Meng v. Schwartz, 116 F. Supp. 2d 92, 97 (D.D.C. 1992), aff'd, 48 Fed. Appx. 1 (D.C. Cir. 2002); see also Greenpeace, Inc. v. Dow Chem. Co., No. 10-cv-2037, 2011 U.S. Dist. LEXIS 101428, at **17--31 (D.D.C. Sept. 9, 2011).
In addition, Robertson's RICO claims against the Charity fail on the
merits. Because there is no relatedness or continuity, the alleged
predicate acts in Counts I and II do not form a "pattern" of
racketeering activity. See Edmondson, 48 F.3d at 1265. Here, the only
predicate acts remaining are fraud and extortion on the part of TCT,
LLC (which is not part of the "RICO enterprise" and was clearly
disavowed by Cartinhour) (Compl. ¶¶ 57, 60, 61); vague allegations
that the Charity extorted some unnamed Serbian business partner at an
unknown time (id. ¶ 58); Charity's failure to report the transfer of
funds from the United States to Serbia (id. ¶¶ 47--49); and the acts
that the SGRO attorney-defendants are alleged to have taken against
Gray (id. ¶ 89). These acts lack sufficient specificity.*fn51
More importantly, they are not related for they are
dissimilar, undertaken by different individuals, for entirely distinct
reasons, and through different methods. See, e.g., Edgenet, Inc. v.
GS1, AISBL, 742 F. Supp. 2d 997, 1019 (E.D. Wis. 2010) (finding no
relatedness where acts "have a different purpose, result, victim, and
method of commission"); see also Breslin v. Brainard, No. 01-cv-729,
2004 U.S. Dist. LEXIS 8594, at *10
n. 6 (E.D. Pa. May 7, 2004); Bonavitacola Elec. Contr., Inc. v. Boro
Developers, Inc., 87 Fed. Appx. 227, 232 (3d Cir. 2003); cf. H.J.
Inc., 492 U.S. at 250 (finding acts related where there was frequent
commission of a common act (bribery) of common group (officials)
unified by a common purpose (winning contract)).
Also, there is neither open nor close-ended continuity here, as there is no threat of future criminal conduct,*fn52 nor a series of predicate acts that has occurred over a substantial period of time. See H.J. Inc., 492 U.S. at 241; Bonavitacola Elec. Contr. 87 Fed. Appx. at 232 ("Finding no relatedness between the . . . separate transactions, [the Court] cannot measure continuity by collectively considering the numerous alleged acts . . . . [t]hus the Amended Complaint lacks predicate acts occurring over a 'substantial period of time' necessary for a proper allegation of closed-ended continuity.") Ultimately, "[t]he only 'pattern' [Robertson] describes is the alleged combination of defendants' efforts to his detriment," Wright v. Towns, No. 90-cv-0565, 1991 U.S. Dist. LEXIS 12527, at *13 (D.D.C. May 30, 1991), and therefore, he has not stated a claim under RICO. See Edmondson, 48 F.3d at 1265; see also Efron v. Embassy Suites (P.R.), Inc., 223 F.3d 12, 19 (1st Cir. 2000) (collecting cases).*fn53
Similarly, even if he were to have standing, Robertson cannot sustain a RICO claims against the attorney-defendants. Since the demand letters and the litigation activity are protected by the judicial proceedings privilege, only the allegations related to Gray remain. (See Compl. ¶ 89.) Even taking the allegations as true, as we must, this conduct is simply not a pattern: at best, it involves one victim and one injury. See W. Assocs. Ltd. P'ship, 235 F.3d at 633 ("[I]f a plaintiff alleges only a single scheme, a single injury, and few victims it is 'virtually impossible for plaintiffs to state a RICO claim.'") (quoting Edmondson, 48 F.3d at 1263).
In sum, plaintiff cannot parse the events underlying Robertson I and turn them into predicate acts to make a RICO case nor can he proceed on a RICO theory where he cannot establish standing or the elements of RICO. Accordingly, Counts I--IV must be dismissed.
IV. CHOICE OF LAW
The four common law claims in Counts V--VIII require that the Court first determine the applicable law. Because this case was transferred, the Court must "apply the state law that would have been applied if there had been no change of venue." Van Dusen v. Barrack, 376 U.S. 612, 639 (1964) ("A change of venue under § 1404(a) generally should be, with respect to state law, but a change of courtrooms."). However, "[t]he choice of law rules of the state of a transferring court does not follow the case to a transferee court if the originating court did not have personal jurisdiction over all defendants." Mar-Jac Poultry, Inc. v. Katz, 773 F. Supp. 2d 103, 112 n.4 (D.D.C. 2011). In this case, Judge Swain found that she had subject matter jurisdiction in the Southern District of New York, but declined to consider defendants' challenge to personal jurisdiction and the parties now disagree as to whether New York or District of Columbia law should apply. This Court need not inquire further, however, as there is no real conflict since both jurisdictions follow the "significant interests" test to determine the state law applicable to common law torts.*fn54 See USA Waste of Md., Inc. v. Love, 954 A.2d 1027, 1032 (D.C. 2008) ("A conflict of laws does not exist when the laws of the different jurisdictions are identical or would produce the identical result on the facts presented."). Therefore, since "there is no true conflict, the [C]court [will] apply the law of the forum." Owens v. Republic of Sudan, No. 08-cv-1349, 2011 U.S. Dist. LEXIS 135961, at * 65 (D.D.C. Nov. 28, 2011).
V. FRAUD CLAIM (COUNT V)
In Count V, Robertson claims that "all defendants are liable for
damages resulting from their conspiracy to defraud [him]" and
incorporates by reference all of the factual allegations in the
complaint. (Compl. ¶¶ 141--43.) To plead common law fraud in the
District of Columbia, a plaintiff must state "with particularity,"
Fed. R. Civ. P. 9(b), that "the defendant, with the intent to induce
reliance, knowingly misrepresented or omitted a material fact upon
which the plaintiff reasonably relied to his detriment." Media Gen.
Inc. v. Tomlin, 532 F.3d 854, 858 (D.C. Cir. 2008).*fn55
"To prevail on such a claim, 'the plaintiff must also have
suffered some injury as a consequence of his reliance on the
misrepresentation.'" Busby v. Capital One, N.A., 772 F. Supp. 2d 268,
275 (D.D.C. 2011) (quoting Chedick v. Nash, 151 F.3d 1077, 1081 (D.C.
Cir. 1998)) (citation omitted).
The deficiencies that doomed Robertson's RICO claims apply here as well. He cannot prove detrimental reliance because the only damage alleged, the loss of recompense for his in-kind services, was not caused by defendants' acts. (See supra Section III(B).) This claim also lacks particularity, for, despite a rambling 149--paragraph complaint, there is no factual support for claiming fraud by "all defendants." (Compl. ¶¶ 142--43.) See Busby, 772 F. Supp. 2d at 276 ("[B]ecause 'fraud' encompasses a wide variety of activities, the requirements of Rule 9(b) guarantee all defendants sufficient information to allow for preparation of a response."); Wright, 1991 U.S. Dist. LEXIS 12527, at **10--11 (finding allegations that did not identify the speakers, dates and times of the communications, recipients of the information, or substance of the allegedly fraudulent statements were insufficient under Rule 9(b)). In addition, to the extent that he alleges some type of conspiracy to defraud (see Compl. ¶ 143), he cannot do so without meeting the pleading requirements for an underlying tort, see Nader v. Democratic Nat'l Comm., 567 F.3d 692, 697 (D.C. Cir. 2009), which he has not done.
VI. DEFAMATION AND TORTIOUS INTERFERENCE (COUNTS VI-VIII)
Robertson's remaining claims-defamation, business defamation, and tortious interference-are based on statements allegedly made by unidentified persons to third-parties about Robertson and Gray. (See Compl. ¶¶ 89,107--08,144--49.)
"In the District of Columbia, 'a statement is defamatory if it tends to injure [the] plaintiff in his [or her] trade, profession or community standing or lower him in the estimation of the community.'" Guilford Transp. Indus., Inc. v. Wilner, 760 A.2d 580, 594 (D.C. 2000) (first alteration in original) (quoting Howard Univ. v. Best, 484 A.2d 958, 989 (D.C. 1984)). To state aclaim for defamation, a plaintiff must show:
(1) that the defendant made a false and defamatory statement concerning the plaintiff; (2) that the defendant published the statement without privilege to a third party; (3) that the defendant's fault in publishing the statement amounted to at least negligence; and (4) either that the statement was actionable as a matter of law irrespective of special harm or that its publication caused the plaintiff special harm.
Williams v. Dist. of Columbia, 9 A.3d 484, 491 (D.C. 2010) (quoting Beeton v. Dist. of Columbia, 779 A.2d 918, 923 (D.C. 2001)).
In Counts VI and VII, Robertson attempts to hold all defendants liable for defamation of himself and his business. (Compl.¶¶ 89, 144--47.) Relying only on "information and belief," Robertson alleges that Kearney and Bramnick or someone acting in concert with them*fn56
published defamatory statements to a California attorney who was opposing counsel in Robertson's California lawsuit (see supra note 7) and to Gray's landlord accusing Gray and Robertson of defrauding Cartinhour and violating federal criminal law. (Id. ¶ 89; Pl.'s Opp'n at 14.) Obviously statements about Gray do not provide any basis for recovery by Robertson. Moreover, Robertson acknowledges that he has no identifying information about who made the statements and admits that neither he nor Gray have actually seen any letter to Gray's landlord.*fn57
(Compl. ¶ 89.) Nor can he allege damages, but instead contends that the statements constitute defamation per se. (Pl.'s Opp'n at 14.)
As an initial matter, the statements are not capable of conveying a defamatory meaning because they are substantially true. As plaintiff acknowledges (Pl.'s Opp'n at 13-14), this Court must first "determin[e] that the publication is capable of bearing a defamatory meaning." White v. Fraternal Order of Police, 909 F.2d 512, 518 (D.C. Cir. 1990); Parnigoni v. St. Columba's Nursery Sch., 681 F. Supp. 2d 1, 14 (D.D.C. 2010) ("The first task for the Court is to determine whether the defendants made a false and defamatory statement concerning the plaintiffs.") Although false charges of criminal conduct are considered defamatory, Washburn v. Lavoie, 357 F. Supp. 2d 210, 214 (D.D.C. 2004), aff'd on other grounds, 437 F.3d 84 (D.C. Cir. 2004), that is not the case here. Robertson was in fact the subject of a criminal investigation by the U.S. Attorney's Office, which he chose to disclose on the public record. See Robertson I, Mot. for Stay Pending Civil Proceedings and Lift or Modify Preliminary Injunction at 4--5 (D.D.C. Mar. 21, 2010); see also Robertson I,Preliminary Injunction Hearing Tr. 55:04--55:10 (D.D.C. Mar. 26, 2010). In addition, the Robertson I jury found that Robertson was liable for breaching fiduciary duties, legal malpractice, procuring the Indemnification Agreement from Cartinhour through undue influence and/or coercion, and awarded compensatory as well as punitive damages of $3.5 million. See Robertson I, Verdict Form (D.D.C. Feb. 18, 2011). In light of these undisputed facts, there is no basis for a defamation claim. See Jolevare v. Alpha Kappa Alpha Sorority, Inc., 521 F. Supp. 2d 1, 13 (D.D.C. 2007) (finding no defamation when "the 'gist' of the statement is true . . . as it would be understood by its intended audience.") (internal citations and quotations omitted)).
These claims are deficient for additional reasons as well. To the extent that this communication was made by Kearney and Bramnick and related to Robertson I, which it did, it is protected by the judicial proceedings privilege. See Messina, 260 F. Supp. 2d at 177--78.*fn58
And finally, the unfounded allegation of conspiracy (Compl. ¶ 145),*fn59 provides no basis to hold Cartinhour and the other defendants liable. See Chandler v. Jones, 802 F. Supp. 2d 13, 21 (D.D.C. 2011) (dismissing claims where "complaint utterly fail[ed] to show or allege any wrongdoing" on the part of defendants).
Under District of Columbia law, a plaintiff claiming tortious interference "must plead '(1) the existence of a valid business relationship or expectancy, (2) knowledge of the relationship or expectancy on the part of the interferor, (3) intentional interference inducing or causing a breach or termination of the relationship or expectancy, and (4) resultant damage.'" Browning v. Clinton, 292 F.3d 235, 242 (D.C. Cir. 2002) (quoting Bennett Enters. v. Domino's Pizza, Inc, 45 F.3d 493, 499 (D.C. Cir. 1995)).
In Count VIII, Robertson alleges that the communication with the California attorney and Gray's landlord tortiously interfered with a payroll tax recovery business that he and Gray had planned to start because it dissuaded Gray from going into business with him and caused "damage[s] in an amount yet to be determined." (Compl. ¶¶ 107--08, 148--49.) Essentially, Robertson seeks an unknown amount of damages for some undefined injury to his ability to pursue a business that did not exist based on a call by an unknown attorney whom he believes was from the state of Maryland. (Id. ¶¶ 89, 107--08, 148--49.) Not surprisingly, this claim fails for a host of reasons.
To state a claim for tortious interference in the District of Columbia, the business expectancy must be "commercially reasonable to anticipate." See Browning, 292 F.3d at 242 (internal quotation marks and citation omitted). "A valid business expectancy requires a probability of future contractual or economic relationship and not a mere possibility." Wash. Metro. Area Transit Auth. v. Quik Serve Foods, Inc., No. 04-cv-838, 2006 U.S. Dist. LEXIS 24510, at **17--18 (D.D.C. Apr. 28, 2006). Robertson's imagined economic gain from a nonexistent business is nothing but speculation. Furthermore, there is no factual basis in the complaint upon which to infer that any defendant knew of or intended to interfere with the plan to start a business. See Browning, 292 F.3d at 242. Accordingly, Count VIII will be dismissed.
For the foregoing reasons, the Court grants defendants' motions to dismiss. A separate order accompanies this Memorandum Opinion.