United States District Court, E.D. New York
January 27, 2004.
ANDREA DOREEN LTD., DOROTHY LOGUIDICE, J.C.S. ENTERPRISES, INC., JACK C. STUART, J.C.S. CONSTRUCTION CO., INC., CONROC RECYCLING CORP., MICHAEL LOGUIDICE, ULTIMATE DEMOLITION, INC., and PAUL SCAGLIONE, Plaintiffs
BUILDING MATERIAL LOCAL UNION 282, affiliated with the INTERNATIONAL BROTHERHOOD OF TEAMSTERS, TOM GESUALDI, PAUL GATTUS, DENNIS GARTLAND, SR., GARY LABARBERA, LAWRENCE KUDLA and Others as TRUSTEES and FIDUCIARIES of LOCAL 282 WELFARE, PENSION, ANNUITY, JOB TRAINING, VACATION AND SICK LEAVE TRUST FUNDS, Defendants
The opinion of the court was delivered by: WILLIAM YOUNG, Chief Judge, District[fn1] [fn1] Of the District of Massachusetts, sitting by designation. Page 2
MEMORANDUM AND ORDER
The Plaintiffs, Andrea Doreen Ltd., Dorothy Loguidice, J.C.S.
Enterprises, Inc., Jack C. Stuart, J.C.S. Construction Co. Inc., CONROC
Recycling Corp., Michael Loguidice, Ultimate Demolition, Inc. and Paul
Scaglione (collectively "Doreen") brought suit under the Racketeer
Influence and Corrupt Organization Act, 18 U.S.C. § 1961 et. seq.
("RICO"), against Building Material Local Union 282 ("Local 282") and the
Trustees and Fiduciaries (the "Trustees") of Local 282's Welfare,
Pension, Annuity, Job Training, Vacation and Sick Leave Trust Funds (the
"Funds") (collectively the "Defendants"). This memorandum and order
addresses the summary judgment motions made by the Trustees and Local 282
[Doc. Nos. 318, 324]. Pertinent to resolution of these matters, however,
are (1) the arbitration decision, confirmed by this Court, regarding one
of Local 282's counterclaims in the instant RICO action, Andrea
Doreen, Ltd. v. Building Material Local Union 282,
250 F. Supp.2d 107 (E.D.N.Y. 2003); and (2) the Court's findings and rulings
and Doreen's admissions in a prior action brought by the Trustees against
Doreen, King v. JCS Enterprises, Inc., No. 94-4604
(E.D.N.Y. filed Sept. 30, 1994) (the "ERISA Collection Action").*fn2
A. Procedural History
On March 22, 1995, Building Material Local Union 282 ("Local 282")
entered a consent decree with the United States Government, acknowledging
that it, and certain of its members, had acted as a criminal enterprise,
in conjunction with organized crime. Amended Consent Judgment, Levine
Decl. Tab 3, at 1 (noting that the original Consent Judgment was ordered
by the District Court on or about March 22, 1995). The consent decree
enjoined Local 282 from engaging in further criminal and racketeering
misconduct. Local 282's Mem. in Supp. of Mot. for Summ. J. [Doc. No. 326]
("Local 282's Mem. in Supp.") at 4; Amended Consent Judgment, Levine
Decl. Tab 3.
Between 1994 and 1996, the Trustees initiated four separate actions
under section 502 of ERISA to collect fringe benefit contributions
allegedly owed to the Funds by Doreen under a Collective Bargaining
Agreement. Local 282's Mem. in Supp. at 10.*fn3 The four collection
actions were consolidated under the
ERISA Collection Action, No, 94-4604. In the first half of 1998,
the Trustees and Doreen completed discovery in the ERISA Collection
Action, and the Trustees moved for summary judgment. Doreen then brought
this related RICO action before the Court, No. 98-4838, against Local 282
and the Trustees under 18 U.S.C § 1962(c).*fn4 In this action,
Doreen alleges, inter alia, that the ERISA Collection Action was
brought against it as part of a criminal extortion conspiracy and "a sham
to retaliate against Doreen." Pls.' Mem. in Opp'n to Summ. J. [Doc. No.
337] ("Pls.' Mem. in Opp'n") at 3, 15, 22. In essence, Doreen claims that
Local 282 and the Trustees have during the time that the consent
decree has been in place engaged in a criminal conspiracy to
retaliate against Doreen and put Doreen out of business for refusing to
make unlawful payments. Id. at 3; see Doreen, No.
98-4838, 4-5 (E.D.N.Y. July 31, 2000) (order dismissing certain claims)
[Doc. No. 170]; Local 282's Mem. in Supp. at 2.
On September 11, 2000, Local 282 filed a counterclaim against Doreen in
the RICO action to collect wages that were
allegedly past due to drivers under the Collective Bargaining
Agreement. Local 282's Mem. in Supp. at 14, 10.*fn5
On June 15, 2001, Local 282 moved for partial summary judgment and for
an order to compel arbitration on the question of whether Doreen failed
to pay proper wages [Doc. No. 230], Doreen, on the same day, moved to
dismiss Local 282's counterclaim based on laches, waiver, failure to meet
a condition precedent, and lack of obligation under the Collective
Bargaining Agreement to arbitrate [Doc. No. 231]. pls.' Reply Mem. [Doc.
No. 241] at 4.
Despite Doreen's arguments and defenses against arbitration, at the
June 22, 2001 hearing, Judge Platt granted Local 282 partial summary
judgment and directed Local 282 and Doreen to proceed to arbitration on
all issues involved in this case, except the remaining RICO claim.
Hearing Tr. [Docket 256] at 9-10, 14 (5/22/01). The arbitration order did
not include the Trustees' claims in the ERISA Collection Action. Oct. 18,
2001 Letter from Judge Platt [Doc. No. 272].
On June 28, 2002, Arbitrator Richard Adelman issued an Opinion and
Award finding Doreen liable for failing to pay wages due its drivers
under the Collective Bargaining Agreement. Arbitration Opinion and Award,
Tab 1 to Levine Decl. [Doc. No.
327], at 2, 15. Because the parties had agreed to bifurcate
liability from remedy, id., damages were not assessed at the
On July 1, 2002, the Trustees and Local 282 separately moved for
summary judgement in the instant RICO case. On July 25, 2002, Doreen
opposed this motion. On September 30, 2002, this Court held a summary
judgment motion hearing via video conference*fn6 and took the matter
On March 3, 2003, this Court confirmed the Arbitration Award and
Opinion and directed Arbitrator Adelman to proceed to the remedy phase of
the arbitration as quickly as possible. Doreen, 250 F. Supp.2d
From May 12 through May 16, 2003, this Court conducted a bench trial in
the related ERISA Collection Action, King v. JCS
Enterprises, Inc., No. 94-4604. The relevant findings and rulings of
the Court are that: (1) the defendants in the ERISA
Collection action case, Doreen, manifested an intent to adopt the
Collective Bargaining Agreement for the period of 1993-1996
notwithstanding that no agreement was signed. Trial Tr. Vol. 5 at
556:11-17 (5/16/03); (2) the Trustees proved that Doreen failed to
maintain adequate records as matter of law and as such violated ERISA,
Section 209, 29 U.S.C. § 1059. Id. at 558:1-6;(3) Doreen
waived the written demand requirement found in the Collective Bargaining
Agreement "by [its] conduct in urging the joint review of . . . the
records in the course of these proceedings, the conduct that led up to
the KPMG report." Id. at 559:1-15 (remarking that "statutory
requirements of such payments into pension funds by ERISA cannot be
frustrated by the Trustees' failure strictly to follow the requirements
of the Collective Bargaining Agreement");*fn7 (4) the Trustees proved
failed to made adequate contributions to the pension plans as
required by the governing Collective Bargaining Agreement. Id.
at 558:15-25; and (5) the KPMG report is an adequate and reasonable basis
for concluding what sums are owed by Doreen. Id. at
561:20-24.*fn8 Following the conclusion of the trial, Doreen moved for
reconsideration of the Court's prior findings that the KPMG report was an
adequate and reasonable basis for determining the sums owed.*fn9 The
Court denied this motion. Subsequently, the parties agreed that Doreen
owed the Trustees a sum of $108,108 in delinquent contributions plus
interest, additional interest or liquidated damages, and attorneys fees
and costs, as calculated under the requirements of ERISA Section 502(g)
(2), 29 U.S.C. § 1132(g)(2). 7/11/03 Barbiero Letter; 7/15/03 Bauman
Letter. The Court adopted this agreement, applied a six percent interest
rate to the amount and entered judgment that JCS, Andrea Doreen, and
Conroc, jointly and severally, and Michael Loguidice and Dorothy
Loguidice, individually, are liable to the Trustees for the amount of
$204,662 plus attorneys fees and costs. King v. JCS
Enterprises, 288 F. Supp.2d 287, 291 (E.D.N.Y. 2003).
B. Doreen's RICO Claims and Supporting Facts
Because Local 282 and the Union moved for summary judgment, the
following facts are presented in the light most favorable to Doreen and
all reasonable inferences are drawn in Doreen's favor. Fed.R.Civ.P.
56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
255 (1986); Sutera v. Schering Corp., 73 F.3d 13, 15
(2d Cir. 1995) (citations omitted).
Doreen claims that Local 282 and the Trustees violated
18 U.S.C. § 1962 (c) by conducting an enterprise through a pattern
of racketeering activity. Am. Compl. [Doc. No. 137] at 21. More
specifically, it claims that the Defendants engaged in a pattern of
extortion, threats, damage to property, illegal union activity and
systematic mail and wire fraud directed against Doreen because Doreen
refused to pay bribes or otherwise play ball" with them. Pls.' Mem. in
Opp'n [Doc. No. 337] at 22. Doreen's main theory is that Local 282 used
its relationship with the Trustees and the Trust Funds to create a
false appearance of legality for these acts by falsely asserting that
Doreen was in arrears on fringe benefit payments (and had not paid
such deficiencies) without providing notice of or an opportunity to
cure such deficiencies. Pls.' Mem. in Opp'n at 47. Consistent with
this theory, Doreen alleges that Local 282 formed an "association-in-fact
for the purpose of using the monopoly power enjoyed by [it] to destroy"
Doreen's business, drive it out of the trucking industry, and prevent it
from completing contracts and subcontracts. Am. Compl. ¶ 52.
Doreen claims that the Defendants committed three different types of
predicate acts (as will be discussed in further detail infra): (1) Mail
and Wire Fraud under 18 U.S.C. § 1341 and 1343, respectively; (2)
Extortion as defined under the Hobbs Act, 18 U.S.C. § 1951 and New
York State Law; and (3) Illegal Payments to a Union or Fund, under
Section 302 of the Labor Management Relations Act ("LMRA"),
29 U.S.C. § 186. Id. ¶ 56.*fn10 In Doreen's Memorandum in
Opposition to Summary Judgment, Doreen
listed the predicate acts upon which it grounds its claims.*fn11
The following list details the acts as they are alleged, described
and supported by Doreen:*fn12
1) Spring 1994: Alleged Demand for a Bribe by
Local 282 Officials
(Doreen claims this was extortion)
Aldo Collusi, Anthony Conti and Peter Menechino
allegedly demanded a bribe from Doreen in order to
secure labor peace. Pls.' Mem. In Opp'n at 29. In
other words, Doreen alleges Local 282 demanded
money and threatened to strike if Doreen did not
comply. The original demand was allegedly $300,000
written on a piece of paper by Collusi given to
Michael Loguidice. M. Loguidice Dep., Ex. 3A to
Kramer Decl.[Doc. No. 338], at 61-62, 109-110. It
is undisputed that Doreen did not pay the demand.
Ex. 2A to Kramer Decl. at 3; Pls.' Mem. in Opp'n
at 29; M. Loguidice Dep., Ex. 3A to Kramer Decl.,
at 375 (noting he did not give Colussi any money).
Michael Loguidice testified that he said Collusi
"is crazy" and threw the piece of paper out of the
window of his car. Id. at 370. He then
told his wife, Dorothy Loguidice, to "forget about
it." Id. at 63. Michael Loguidice also
testified that Colussi was the only person he
remembers ever attempting to bribe him.
Id. at 109.
2) July 1994: Alleged "Revised Demand for a
Bribe" by Local 282 Officials
(Doreen claims this was extortion)
Aldo Collusi, Anthony Conti and Peter Menechino
allegedly "revised" their previous demand to
almost $500,000 or $25 per load. Pls.' Damage
Statement, Ex. 2A to Kramer Decl., at 3; Pls.'
Mem. in Opp'n at 29. It is undisputed that Doreen
refused to pay. Ex. 2A to Kramer Decl. at 3; Pls.'
Mem. in Opp'n at 3. Doreen, however, alleges that
all of the following acts stem from its refusal,
to succumb to these threats. Id.; Joint Pretrial
Order, Schedule B, at 16 (Dec. 4, 2001)(claiming
that Defendants harassed Doreen in
an effort to put it out of business for its
refusal to participate in the alleged
"shakedown"). Notwithstanding this allegation,
Dorothy Loguidice testified that she thought Conti
was just "fishing" and that his alleged demand for
money "was a joke." D. Loguidice Dep., Tab 10 to
Levine Decl., at 315; D. Loguidice Dep., Ex. 3B to
Kramer Decl., at 308-309 ("I considered
the statement to be fishing, to see if I would go
for the bait. . . . Dangling the bait, you know,
the hot dog in front of the dog with the
3) July 1994: Alleged Overpayment Coerced by
Local 282 (Doreen claims this was mail fraud and
Doreen claims that Richard Kane, a Local 282 Shop
Steward, entered information pertaining to "John
Does" (i.e., people who did not exist) into the
shop steward reports that were sent to the Funds
and stamped "entered 3/22/95." Pls.' Mem. In Opp'n
at 30. This, Doreen claims, resulted in payment
for hours of individuals who were not Doreen's
employees. Pls.' Mem. in Opp'n at 10. According to
Doreen, the Defendants intentionally inflated
amounts supposedly owing by using this John Doe
strategy and then relying on these calculations to
justify the December strike (outlined below).
Pls.' Mem. in Opp'n at 38.
In support, Doreen provides testimony from Clyde
Perdue (equipment superintendent) and Jack Stuart.
Perdue stated that there were times when he called
companies like JCS to supply trucks and drivers.
He said that Richard Kane had on at least one
occasion filled in John Doe names and fake
information when drivers who came to the job did
not provide the correct information. Perdue
Testimony, Ex. ID to Kramer Decl./ at 18-21. Jack
Stuart testified that there were "ghost drivers"
on the shop steward reports that "indicated that
the shop steward just put Doe or fictitious name."
Stuart Testimony, Ex. 3C to Kramer Decl., at
He did not testify, however, that he
believed the names were fictitious or that he had
personal knowledge that the names were false but
merely that the documentation indicated this.
There is also testimony from Stephanie Pantaliano
and Lorraine McCool confirming that the John Doe
information was included in the shop steward
reports and that shop steward reports generally
were compared with the JCS reported hours to
determine discrepancies. Pantaliano Dep., Ex. 1G
to Kramer Decl., at 150-51; McCool Dep., Ex. 1H to
Kramer Decl., at 145-46. Neither Pantaliano nor
McCool testified that they knew whether the John
Doe information was included in this comparison.
4) December 6, 1994: Strike Notice Sent by
the Defendants Based on Allegedly False and
Resulting in Strike on December 13, 1994
(Doreen claims this was mail fraud and
Doreen alleges that Local 282 sent a strike
notice, predicated on the assertion that Doreen
had failed to make proper fringe benefit
contributions, without disclosing that Doreen had
not been notified that monies were due or provided
an opportunity to cure. Pls.' Mem. In Opp'n at 30.
Moreover, the strike notice did not detail the
amount that was owed. Strike Notice, Ex IB to
Kramer Decl; (Dec, 6, 1994). Further, Doreen
alleges that this strike was not called because
Doreen was delinquent in Fund contribution
payments, but rather to retaliate against Doreen.
Pls.' Mem. in Opp'n at 37.
In support, Doreen provides testimony from (1) the
Funds' Collection Coordinator stating that she was
never asked, prior to the strike, whether Doreen
was in arrears; and, (2) the President of Local
282, admitting that he was not sure whether the
calculations of deficiencies were done before or
after the strike. Id. Moreover, Doreen
provides evidence that the actions taken by Local
282 did not conform to the Collective Bargaining
Agreement, because the strike letter did not
include an amount due, and because the strike
occurred less than ten days after the letter was
sent. Id. at 39-40, 42. (It is
undisputed that the Collective Bargaining
Agreement requires Local 282 to specify an amount
due and to provide an employer ten days to cure
the delinquency after notice.) Doreen argues
and supports with testimony that
the Defendants originally demanded from Doreen an
"exaggerated and inflated" amount, $70,000, to end
the work stoppage, Am. Compl. ¶ 47 (II) (E),
but then, after the strike, claimed Doreen only
owed $10,000. M. Loguidice Dep., Ex. 3D to Kramer
Decl., at 387-388. Finally, Doreen submits that it
was forced to pay the Funds approximately $10,000.
Notwithstanding these allegations, Doreen has
conceded that it owed at least $10,000 in
contributions at the time of the strike. Jack C.
Dep., Ex. S to Bauman Decl., at 363-65 ("I
believe JCS owed about $10,000 to $14,000.").
5) January 24, 1995: Alleged Pit Bull Threat
by Local 282 (Doreen claims this was
Allegedly Peter Menechino, Jr., Peter Menechino,
Sr., and three Local 282 agents arrived at the
Brooklyn Water Tunnel Job site with a pit bull,
Pls.' Mem. In Opp'n at 31. Subsequently, they
threw Rodney Warwick off the job and stated that
"[a]ny Local 813 man or non-union man would have
to meet my lion." Id. Then the men released the
pit bull, which attacked and bit one of the men.
Id. This, Doreen claims, slowed down
work and instilled injury, pain and suffering, and
fear and intimidation in its workers. Pls.' Damage
Statement, Ex. 2A to Kramer Decl., at 8-10; Pls.'
Mem. in Opp'n at 31.
In support, Doreen points to testimony by Dorothy
Loguidice, who stated that "[t]he whole thing was
about Rodney's Teamsters 813 book. At this point,
Rodney was not [Doreen's] employee, he was
employed by someone else, but it happened on
[Doreen's] job." D. Loguidice Dep., Ex. 3E to
Kramer Decl., at 400.*fn14
6) February 23. 1995: Alleged Slowdown and
Work Stoppage by Local 282
(Doreen claims this was extortion)
Doreen alleges that on February 23, 1995, Peter
Menechino, Jr. caused a slowdown of Doreen's work
and when Jack Stuart objected, Menechino, Jr.
ordered trucks to stop loading and said "[n]ot a
peep out of your mouth about Local 282 or Kelly,
or I will drag you out into the street and kick
the shit out of you." Pls.' Mem. in Opp'n at 31.
Later, according to Doreen, Menechino, Sr. arrived
and blocked the exit to the job. After that,
George Finch and Lawrence Kudla allegedly arrived
and threatened "[w]ho wants to fight? I want a
good fight." Id,
Doreen alleges that this was part of Defendants'
retaliation for Doreen's refusal to pay bribes. In
support, it provides testimony that suggests that
this act involved a power struggle. See,
e.g., D. Loguidice Dep., Ex. 3F to Kramer
Decl., at 325-328 (characterizing the fight as
"some sort of power struggle to see who was boss"
employees were directed not to get out of the
truck but to wait for the laborer to provide the
dump ticket while the shop stewards wanted the
driver to get out of the truck and walk to find
the laborer to get the dump ticket him or
herself). There is also evidence, however,
suggesting that the slowdown or work stoppage was
due to Local 282's belief that money was owed the
funds. See, e.g., D. Loguidice Dep., Ex.
3F to Kramer Decl., at 295 (explaining that she
was present during the confrontations that
occurred and "when they were yelling at them that
he owed the fund a lot of money").
7) August 15, 1995: Alleged Threats and
Intimidation to Create Fraudulent Records by Local
(Doreen claims this was mail fraud and
Allegedly, Local 282 employees required drivers to
sign in multiple times, resulting in a fraudulent
record that indicated drivers worked multiple
8-hour shifts. Pls.' Mem. In Opp'n at 32.
8) August 28, 1995: Alleged Threats and
Intimidation to Create Fraudulent Records by Local
(Doreen claims this was mail fraud and
On August 28, 1995, Local 282 employees allegedly
required drivers to sign phony entries in the shop
steward report to result in a fraudulent amount of
increased shifts. Id.
9-15) July 1996 April 1997: Alleged
Wire and Mail Fraud
It is undisputed that between July 1996 and April
1997, Local 282 and the Trustees sent out various
letters and made various phone calls to
contractors informing them that Doreen was in
arrears and that the contractors may be held
responsible. It is also undisputed that these
letters were sent without prior notice to Doreen
and without providing Doreen an opportunity to
cure as required under the Collective Bargaining
Agreement. Doreen alleges that these letters and
phone calls resulted in loss of work.
Id. at 32-34. Moreover, it alleges that
these letters contained false allegations.
16) The ERISA Collection Action
Although the ERISA collection action is not listed
in the chart detailing the alleged predicates,
Doreen repeatedly asserts in its Complaint and
Memorandum in Opposition to Summary Judgment that
the Trustees commenced a fraudulent lawsuit to
recover contributions that were not owing. Am.
Compl. ¶ 47 (II) (c); Pls.' Mem. in Opp'n at
40. Doreen claims that it was singled out and
placed under greater scrutiny than other
employers. Id. Further, it alleges that
the action was brought without following the
litigation procedures set out in the Collective
Bargaining Agreement, such as conducting an audit
and providing a written report. Id. at
39-40. Lastly, it claims that the revised estimate
of damages in the action was for one third the
original estimate and that this shows that the
action was commenced to punish Doreen for its
refusal to capitulate to the Defendants' demands
for kickbacks. Am. Compl. ¶ 47(11) (c).
Doreen argues that the above acts constitute a pattern of racketeering
activity as defined in 18 U.S.C. § 1961(1)(5). Am. Compl. ¶
C. Local 282 and the Trustees' Motions For Summary
Local 282 and the Trustees move for summary judgment because they
allege that Doreen cannot establish facts that would meet the legal
elements of RICO. Local 282's Mem. in Supp. at 17; Trustees' Mem. in
Supp. of Mot. for Summ. J. [Doc. No. 320] ("Trustees' Mem. in Supp.") at
20. Specifically, Local 282 claims that Doreen has failed to demonstrate
(1) the requisite two predicate acts; (2) a pattern of racketeering
activity; and (3) injury by reason of RICO violation. Trustees' Mem. in
at 22, 41, 42; Local 282's Mem. in Supp. at 19,' 29, 34. They
assert that the undisputed facts now show that (1) Doreen was not an
innocent, contract-abiding employer; and (2) that Local 282 and the
Trustees engaged in lawful and appropriate enforcement efforts in
response to Doreen's consistent underpayment of wages and fringe
benefits. Local 282's Mem. in Supp. at 2. As part of their basis for
asserting that Doreen has failed to demonstrate the two predicate acts
necessary, the Defendants rely on the doctrine of collateral estoppel as
it relates to the arbitrator's decision. As reviewed in the Procedural
Background section, since the motions for summary judgment were made,
this Court has conducted a trial in a related action, the ERISA
Collection Action, Because the argument is essentially the same, the
Court will also address whether any necessary findings or rulings or the
parties' admissions from the ERISA Collection Action collaterally estop
Doreen from making any of its current claims. See Broderick Wood
Prods. Co. v. United States. 195 F.2d 433
, 436 (10th Cir.
1952) ("[I]f the case is one appropriate for the entry of summary
judgment, the fact that it may be granted on a ground different from that
specified in the motion therefor does not warrant the disturbing of the
judgment on appeal."); Board of Natl. Missions of Presbyterian
Church in the United Statesv. Smith, 182 F.2d 362
(7th Cir. 1950) ("The fact that judgment was granted on a reason
different from that assigned by
the defendant in his summary judgment motion is immaterial, where,
as here, the motion was properly granted on the undisputed facts shown
and on an issue presented by plaintiff's complaint."); Time
Inc. v. Bernard Geis Assocs., 293 F. Supp. 130, 133
(S.D.N.Y. 1968) (granting summary judgment despite the fact that no
motion was made and reasoning that "[i]f defendants are entitled to
summary judgment, it may properly be granted by the Court even without a
written or formal motion"); but see John Deere Co. v. Am.
Nat'l Bank. 809 F.2d 1190
, 1191 (5th Cir. 1987) (holding that
summary judgment on grounds not urged by movant and without adequate
notice to non-movant was improper).
A, Legal Standard
Summary judgment is warranted if, after reviewing the facts in the
light most favorable to the nonmoving party, no genuine issues of
material fact remain. Fed.R.Civ.P. 56(c); Liberty Lobby. 477
U.S. at 255. A "genuine" issue of fact is one that a reasonable jury, on
the record before the court, could resolve in favor of either party. Id.
at 255. In making its determination, the court must view the evidence in
the light most favorable to the non-moving party and draw all reasonable
inferences in its favor. Id. The movant has the initial burden
of production, which it can meet either by offering evidence to disprove
an element of the non-movant's case or by showing the absence of any
material fact. The movant is not required to make an affirmative
showing that there are no material facts in issue. Celotex
Corp. v. Catrett, 477 U.S. 317, 325 (1986), Instead, the
movant only has to show an "absence of evidence to support the non-moving
party's case." Id. Once the movant has met its burden, the
non-moving party must "go beyond the pleadings, and by [its] own
affidavits, or by the `depositions, answers to interrogatories, and
admissions on file,' designate `specific facts showing there is a
material issue for trial.'" Id. at 323-324 (quoting
Fed.R.Civ.P. 56(e)); Scotto, 143 F.3d at 114; United
States v. Pent-R-Books, Inc. 538 F.2d 519, 529 (2d Cir.
1976) (stating that the non-moving party must "produce `significant
probative evidence' tending to support it [sic] position'" (quoting
First Nat'l Bank of Arizona v. Cities Serv. Co.,
391 U.S. 253, 289-90 (1968))). Summary judgment shall be granted "only if no
reasonable trier of fact could find in favor of the nonmoving party."
Sutera, 73 F.3d at 16 (citations omitted); Matsushita
Elec. Indus., Ltd. v. Zenith Radio Corp. 475 U.S. 574, 586
(1986) ("Where the record taken as a whole could not lead a rational
trier of fact to find for the non-moving party, there is no genuine issue
for trial.") (internal quotations and citations omitted);
Taggart v. Time, 924 F.2d 43, 46 (2d Cir. 1991)
B. Are Any of Doreen's Claims Precluded?
As alluded to above, prior decisions relevant to this case
along with Doreen's own admissions preclude Doreen from now
asserting some of its claims.
1. Collateral Estoppel Effect of Prior Proceedings
a. The ERISA Collection Action
The doctrine of collateral estoppel precludes relitigation of an issue
of law or fact that was decided in a prior proceeding.
Boauslavsky v. Kaplan, 159 F.3d 715, 719-720 (2d Cir.
1998). Collateral estoppel applies when four factors are met:
(1) the identical issue was raised in a previous
(2) the issue was actually litigated and decided
in the previous proceeding; (3) the party had a
full and fair opportunity to litigate the issue;
and (4) the resolution of the issue was necessary
to support a valid and final judgment on the
Id. at 720 (quotations and citations omitted).
In the admittedly related ERISA Collection Action, *fn17 this Court
found Doreen liable to the Trustees for underpayment of fund
contributions to the pension plans under the governing Collective
Bargaining Agreements for the period between 1993 and 1996,
notwithstanding that the agreement was not signed and that the Trustees
failed strictly to follow the Collective Bargaining Agreement's demand
requirements. Trial Tr. Vol. 5 at 556:11-17,
559:1-15. This factual finding meets the elements noted above and,
therefore, cannot be relitigated by Doreen now. That it was actually
litigated and decided is clear from the fact that the Court held that
Doreen owed contributions to the Funds for the time period in which the
letters were sent and the phone calls were made. The parties had a full
and fair opportunity to litigate the issue. This Court conducted a bench
trial from May 12 through May 16, 2003. Both sides had equal amounts of
time to present evidence and make arguments. This issue whether
Doreen actually owed funds to the Trustees was the central issue
of the case. Doreen was afforded the opportunity to provide defenses to
the allegations and so presented them to the Court. The Court found none
of these arguments persuasive. Moreover, this issue was "necessary to
support a valid and final judgment on the merits," as it was an ERISA
collection action for delinquent funds. The central issue was whether or
not Doreen owed fund contributions, and the Court found that it did.
Therefore, the fact that Doreen owed fund contributions to the Trustees
for the period between 1993 and 1996 cannot be relitigated now even if
the cause of action in the subsequent proceeding is different.
Benjamin v. Traffic Executive Ass'n Eastern R.R.s,
869 F.2d 107, 111 (2d Cir. 1989) ("Under collateral estoppel, once a
court decides an issue of fact or law necessary to its judgment, that
decision precludes relitigation
of the same issue on a different cause of action between the same
parties." (quoting Kremer v. Chemical Constr. Corp.,
456 U.S. 461, 466-67 n.6 (1982))); Boquslavsky, 159 F.3d at
719-720.*fn18 Accordingly, any of Doreen's RICO claims that are negated
by this factual finding cannot be litigated now. Cf. Benlamin,
869 F.2d at 114 (granting collateral estoppel effect to an arbitrator's
factual finding on an issue which undergirded the plaintiff's RICO
b. The Confirmed Arbitration Decision
Collateral estoppel is also applicable to factual findings
made in arbitration proceedings. Dean Witter Reynolds,
Inc. v. Byrd, 470 U.S. 213, 223 (1985) (acknowledging that
courts may give preclusive effect to arbitration proceedings to protect
federal interests); Boquslavsky, 159 F.3d at 720;
Benjamin, 869 F.2d at 112 (noting that collateral estoppel is
more appropriate than claim preclusion in the arbitration context). In a
counterclaim in this case, a neutral arbitrator found Doreen liable for
underpayment of wages to drivers in accordance with the 1993-1996 and
1996-1999 Collective Bargaining Agreements. Arbitration Opinion and
Award, Tab 1 to Levine Decl., at 2, 15. This Court confirmed that
decision, holding it to be "fundamentally fair." Doreen,
250 F. Supp.2d at 115-16. The decisions made by the arbitrator were within his
purview, and the parties were provided ample opportunity to present
evidence and defenses. Id.*fn20 Therefore, as in
Benjamin/ "[t]he policies behind collateral estoppel counsel
for its use in this instance,'even though the fact-finding process is
different in arbitration. Benjamin, 869 F.2d at 110, 112
(noting that the purpose of
collateral estoppel is to protect "adversaries from the expense and
vexation attending multiple lawsuits, conserve judicial resources, and
foster  reliance on judicial action by minimizing the possibility of
inconsistent decisions" (quoting Montana v. United
States. 440 U.S. 147, 153-54 (1979))). The parties were given a full
and fair opportunity to litigate the issue. The issue was the central one
for arbitration and, therefore, was necessary to the arbitrator's
decision. Moreover, as held in Doreen, 250 F. Supp.2d at 113,
it was a final judgment on the merits, notwithstanding that damages were
Thus, the fact that Doreen owed wages to Local 282 drivers cannot be
relitigated. Accordingly, any claims that are negated by such a fact
naturally fail. Benjamin, 869 F.2d at 110 (granting collateral
estoppel effect to arbitration panel's factual findings that underlie
acts upon which the RICO claim was based). In other words, Doreen cannot
pursue any RICO claims that rely on a fact inconsistent with the
arbitrator's finding that Doreen owed wages during these time periods.
2. What Claims Are Precluded?
a. Mail and Wire Fraud
Collateral estoppel prevents Doreen from now pressing its mail and wire
fraud claims. Although the actual claims in the RICO case are not
identical to those made in the ERISA Collection Action, underlying each
of Doreen's allegations of mail and wire
fraud is the contention that the Defendants intentionally or
recklessly defrauded it because Doreen did not owe benefit contributions
when the letters were sent. Thus, Doreen seeks to relitigate a factual
issue decided by this Court which it cannot do. Cf.
Benjamin, 869 F.2d at 114. To prove mail fraud under
18 U.S.C. § 1341, or wire fraud under 18 U.S.C. § 1343, Doreen would have
to show, inter alia, that Local 282 and the Trustees used mail or wire
for the purpose of executing a scheme to defraud or obtain money by means
of false pretenses or promises; and it would have to show a specific
intent to defraud either by devising, participating in, or abetting the
scheme. 18 U.S.C. § 1341; 18 U.S.C. § 1343. See S.Q.K.F.C.,
Inc. v. Bell Atl. TriCon Leasing Corp. 84 F.3d 629, 633
(2d Cir. 1996); O'Malley v. New York City Transit
Auth., 896 F.2d 704, 706 (2d Cir. 1990) (addressing mail fraud only
and stating that "intentional fraud or `reckless indifference to the
truth'" is a necessary component (internal citations omitted));
Morrow v. Black, 742 F. Supp. 1199, 1205 (E.D.N.Y.
1990) (noting that pleading requirements for wire fraud are almost
identical except that the defendants must have used interstate wire to
effect the scheme). Doreen does not allege that the Defendants claimed
more money than was actually owing, rather Doreen asserts that it did not
specify the amount due as required under the Collective
Bargaining Agreement.*fn21 Therefore, given the prior rulings of
this Court that Doreen owed benefit fund contributions during the time
period when each of the notices were allegedly sent and phone calls
allegedly made, Doreen cannot meet its burden.*fn22
Moreover, Doreen cannot claim that efforts by Local 282 or the
Trustees to collect delinquent funds lack a reasonable or good faith
basis, given this Court's finding that Doreen was delinquent at the time
the letters were sent. United States v. Alkins,
925 F.2d 541, 550 (2d Cir. 1991) (stating no intent to defraud if individual
believes that information in mailing is true); Crown Heights Jewish
Community Council, Inc. v. Fisher, 63 F. Supp.2d 231, 238
Finally, these claims fail because Doreen admitted during the ERISA
Collection Action trial that a finding by this Court that Doreen was
delinquent in fringe benefit contributions would negate all allegations
of mail fraud in this RICO case.
[W]hatever the merits of [the RICO lawsuit] it has
no bearing, does it, on the resolution of this
one, which is the dispute between the trust funds
and the, the [sic] corporations and individuals
you represent. This one can be resolved without
regard to the resolution of the other one. Isn't
Mr. Barbiero (Doreen's Counsel):
Your Honor, at the risk of weakening our position
in the RICO case I cannot agree with you,
sir. . . . if you find in this case that [Doreen]
is in violation of her fringe benefit
contributions, well sir, then there's no mail
Trial Tr. Vol. 5 at 534:20-24, 535:2-12. Thus, Doreen agreed that,
given the finding of the Court in the ERISA Collection Action, its
allegations of mail fraud must fail.*fn24
In so agreeing, Doreen also
implicitly disclaimed its allegations of wire fraud because those claims
are based on the exact same allegations, facts, and theories as the mail
fraud. See Morrow, 742 F. Supp. at 1205.
For the foregoing reasons, this Court holds that Doreen is
now precluded from making its original mail and wire fraud claims.
Thus, predicate acts numbered 9, 10, 11, 12, 13, 14, and 15 above are no
longer a part of this case. Additionally, the mail fraud allegations of
predicate acts 3, 4, 7, and 8 are also no longer a part of this case.
b. Alleged Illegal Payments to a Fund in
Violation of 29 U.S.C. § 186
Along with the allegations of mail and wire fraud, Doreen's allegations
of illegal payments to a Union or Fund in violation of section 302 of the
LMRA, 29 U.S.C. § 186, are also precluded. In the Amended Complaint,
these allegations were directed to "the false demands for contributions
and resulting payment" by Doreen. Am. Compl. ¶ 56(III) (A). As
discussed above, the Court found in the ERISA Collection Action that
Doreen was delinquent in fund contributions and Doreen has not claimed
with reference to this allegation that the demands were inflated. Thus,
Doreen cannot now claim that the Trustees' demands were false, for that
would result in relitigating what the Court has already decided as part
of a final judgment on the merits: Doreen was delinquent in fund
contributions. To allow Doreen to proceed with this claim could result in
an inconsistent finding. Therefore, Doreen is estopped from making this
Moreover, Doreen concedes, in the Amended Complaint, that the Funds are
qualified employee benefit plans under ERISA and that the monies received
from Doreen were invested in the Funds.
Am. Compl. ¶ 28. At no point has Doreen alleged that the Funds
were established for any reason other than the "sole and exclusive
benefit of the employees" and "for the purpose of paying . . . for the
benefit of employees." 29 U.S.C. § 186 (c)(5). At most, Doreen
alleges that the contributions to the Funds were diverted and converted
for the Defendants' own use.*fn25 Am. Compl. ¶ 53. According to the
Supreme Court, however, such alleged failure to comply with the purposes
of the Funds is "irrelevant." Local 144 Nursing Home Pension
Fund v. Demisay, 508 U.S. 581, 589 n.3 (1993).
[T]he exception to violation set forth in
paragraph (c)(5) relates not to the purpose for
which the trust fund is in fact used . . . but
rather to the purpose for which the trust fund is
"established, ". . . and for which the payments
are "held in trust." . . . The Trustees' failure
to comply with these latter purposes may be a
breach of their contractual or fiduciary
obligations . . . but it is no violation of §
Id. at 588-89; Arroyo v. United
States. 359 U.S. 419
, 423-24 (1959); see also Devito v.
Hempstead China Shop Inc., 38 F.3d 651
, 653-54 n.3 (2d Cir.
1994) (holding that Demisay precludes the argument that payment
would have been in violation of section 302(c)(5) of the Labor
Management Relations Act because defendant "[did] not contest that the
Benefit Fund was properly established under § 302(c)(5))" but only
contended that "it was subsequently operated in a manner inconsistent
with § 302(c)(5)").
Accordingly, any existing allegations of a 29 U.S.C. § 186
violation alternatively fail for these reasons.
Lastly, Doreen, in its Memorandum in Opposition, failed to object to
Defendants' arguments that summary judgment should be granted with
respect to allegations of a 29 U.S.C. § 186 violation. In fact, in
describing the predicate acts, plaintiffs allege only extortion, in
violation of New York Law and the Hobbs Act, 18 U.S.C. § 1951, and
mail fraud, in violation of 18 U.S.C. § 1341. Pls.' Mem. in Opp'n at
22. At this stage, Doreen's failure to "go beyond the pleadings, and by
[its] own affidavits, or by the depositions, answers to interrogatories,
and admissions on file, designate specific facts showing there
is a genuine issue for trial" is fatal. Liberty Lobby, 477 U.S.
at 324 (emphasis added and internal quotations omitted).
c. Propriety of the ERISA Collection Action
The Court's rulings in the ERISA Collection Action also necessarily
negate any arguments that it was brought as part of a RICO conspiracy to
retaliate against Doreen or put Doreen out of business. The Trustees'
claims of underpayment have been shown to be meritorious and, therefore,
the ERISA Collection Action cannot be included among the predicate acts
upon which Doreen's RICO claim is based because it would require
relitigation of the factual issue regarding delinquent fund
contributions. To prove extortion under the Hobbs Act or New York Law,
Doreen would have
to show "wrongful means and wrongful objective." Viacom
Int'l Inc. v. Icahn, 747 F. Supp. 205, 210 (S.D.N.Y. 1990)
(discussing the Hobbs Act); United States v. Enmons,
410 U.S. 396, 419 n.16 (1973) ("[E]xtortion requires an intent `to obtain
that which in justice and equity the party is not entitled to receive.'"
(quoting People v. Cuddihy, 271 N.Y.S. 450, 456
(1934), and referring to New York State Law)). Here, the objective
to collect delinquent fund contributions is not only a
rightful one but a duty. See Cent. States v. Cent.
Transp., Inc., 472 U.S. 559, 572-73 (1985); Liss v. Smith,
991 F. Supp. 278, 290-91 (S.D.N.Y. 1998) (holding that a fiduciary's
failure adequately to seek to collect delinquent contributions known to
be owing to the funds is a breach of the trustee's fiduciary duty.)
Moreover, the filing of such a lawsuit even if it were meritless
and for the purpose of harassment would not as matter of law
constitute extortion under New York or federal extortion law because it
does not involve threat of force, violence, or fear, as required under
both the N.Y. Penal Law § 155.05(2)(e) and the Hobbs Act,
18 U.S.C. § 1951. Elder. Indus. Fund, 992 F. Supp. at 176 n.9 ("The
filing of a meritless lawsuit or administrative action, even if for the
purpose of harassment, does not involve threat of force, violence or
fear."); Park South Assn. v. Fischbein, 626 F. Supp. 1108,
1112 (S.D.N.Y. 1986) (dismissing RICO action based on plaintiff's
allegations that defendant's
allegedly meritless lawsuit constituted extortion under state law
and the Hobbs Act),*fn26
In sum, the Trustees' ERISA Collection Action was not an attempt "to
obtain property `to which [they had] no lawful claim' " and therefore,
the Trustees did not commit extortion. Viacom. 747 F. Supp. at
210 (quoting Enmons, 410 U.S. at 400).
d. Allegations of Improper Strike Notice and Strike
(Mail Fraud & Extortion)
To the extent that this allegation includes one for mail fraud and
contract violations, it fails for the same reasons as noted above in
section III(B)(1)(a). Moreover, claims of extortion are also precluded.
First, as discussed, this Court found that Doreen owed benefit
contributions at the time that the strike notice was sent and the strike
occurred. Additionally, a neutral arbitrator found that Doreen owed wages
to drivers during this same time period. Arbitration Opinion and Award,
Tab 1 to Levine Decl., at 2, 15. As such, Doreen cannot now claim that
strike notices or the December 1994 strike by Local 282 to collect
delinquent payments lacked a-reasonable or good faith basis. Cf.
Benjamin, 869 F.2d 107, 110 (2d. Cir. 1989) (granting collateral
estoppel effect to arbitration panel's factual finding regarding the
underlying acts upon which the RICO claim was
based). To prevail on its extortion claims, Doreen would have to
show, inter alia, that the strike equated to threatened force
that was wrongful. 18 U.S.C. § 1951 (b)(2); Viacom Int'l
Inc. v. Icahn, 747 F. Supp. 205, 210 (S.D.N.Y. 1990)
("There are two elements to a Hobbs Act violation: wrongful means and
wrongful objective."). This is impossible given the prior findings
Moreover, the Supreme Court has held that "the Hobbs Act does not apply
to the use of force to achieve legitimate labor ends." United States v.
Enmons, 410 U.S. 396, 400-01 (1973). Here, it is undisputed
that (1) Local 282 had the contractual right to strike against employers
who were delinquent in fund contributions; (2) Local 282 had the
contractual right to send out strike notices; (3) Local 282 sent out
notices stating that Doreen was delinquent; and (4) Doreen, was, in fact
delinquent at the time of the strike. Doreen's arguments that the actions
taken-by Local 282 did not conform to the Collective Bargaining Agreement
because the letter did not include an amount and the strike occurred less
than ten days after the letter was sent do not bring the use of force in
the form of a strike back into the purview of the Hobbs Act. Along with
the Supreme Court, Congress has made clear that strike violence is not
encompassed by the Act. Enmons, 410 U.S. at 404-05 (explaining
that Congressman Hobbs himself stated that "the bill does not cover
strikes or any
question relating to strikes").
For that matter, strike violence is also not covered by New York's
Extortion Statute. In Enmons, the Supreme Court explained that
under the New York Statute, in order to convict an accused of extortion,
evidence must show that the person was "actuated by the purpose of
obtaining a financial benefit for himself . . . and was not attempting in
good faith to advance the cause of unionism. . . ." Enmons, 410
U.S. at 406 n.16 (quoting People v. Adelstein,
195 N.Y.S.2d 27, 28 (1959)). Given that a neutral arbitrator found that
Doreen owed wages to the drivers a finding confirmed by this
Court and that this Court held that Doreen owed benefit fund
contributions, Doreen simply cannot show the requisite lack of good
The legitimacy of the notice and strike is further supported by
Doreen's admission that it was delinquent in fund contributions at the
time of the strike. As detailed in the factual background, Jack Stuart
stated in his deposition that he "believe[d] JCS owed about $10,000 to
$14,000" at the time of the strike. Stuart Dep., Ex. S to Bauman Decl.,
Lastly, not only is Doreen is precluded from proving a fact necessary
to demonstrate extortion but Doreen is precluded from relitigating
whether the 1994 strike and strike notice was extortion resulting in
overpayment. In the ERISA Collection Action, Doreen made these very same
allegations. Counsel in
closing arguments explained very clearly that "the issues in this
case are whether there has been an underpayment of fringe benefit
contributions or whether as we claim there's been an overpayment because
of an illegal strike that extorted $10,000." Trial Tr. Vol. 5 at 529
(5/16/03); see also Trial Tr. Vol. 3 at 347-59
(5/14/03)(presenting evidence of illegal strike and failure to follow
contract provisions); Trial Tr. Vol. 4 at 514-15 (5/15/03)(same). The
Court, in deciding for the Defendants, necessarily decided against Doreen
and its allegations that the strike was illegal or that overpayments had
been made. If this were not the case, the Court would have, at the least,
ordered as it did with the Bull Dog billings that a
reduction to the total amount due should be made.
Doreen argues strenuously that the $70,000 demand was extortionate in
that it was knowingly inflated and exaggerated and that the strike was
predicated on this demand. While this Court has already found implicitly
that the strike was proper because, as Doreen admits, at least $10,000
was then due and owing, Doreen is not precluded by this finding from
pressing its claim that the $70,000 demand was extortionate (although it
is hard to see how such a demand and threat of a strike constitutes a
threat of force or violence (see infra) or how the resultant
justifiable strike (promptly settled upon payment of the amount due and
owing) caused Doreen any damage beyond the justifiable
C, Could a Reasonable Trier of Pact Find in Favor of
Doreen Based on its Remaining Claims?
The predicate acts that remain a part of Doreen's RICO action and that
are subject to the Defendants' summary judgment motions are Predicate
Acts numbered 1, 2, 3 (extortion allegations only), 5, 6, 7 (extortion
allegations only), and 8 (extortion allegations only), which Doreen
claims represent a scheme of threats and extortion to retaliate against
and destroy Doreen for refusing to pay bribes. Pls.' Mem. in Opp'n at 50.
To prevail in a RICO action under Section 1962(c), the plaintiff must
prove seven elements:
(1) that the defendant (2) through the commission
of two or more acts (3) constituting a pattern (4)
of "racketeering activity" (5) directly or
indirectly . . . participates in (6) an
"enterprise" (7) the activities of which affect
interstate or foreign commerce.
Moss v. Morgan Stanley, Inc., 719 F.2d 5
, 17 (2d.
Cir. 1983) (citing 18 U.S.C. § 1962 (a)-(c)); FD Property Holding.
Inc. v. U.S. Traffic Corp., 206 F. Supp.2d 362, 369
(E.D.N.Y. 2002). The two acts must be federal or state law crimes and
must have occurred within 10 years of each other. Econ. Opportunity
Commn. of Nassau County v. County of Nassau, Inc.,
47 F. Supp.2d 353, 362-63 (E.D.N.Y. 1999). To succeed in a RICO action, the
plaintiff must establish a pattern of racketeering activity.
18 U.S.C. § 1961(5); Agency Holding Corp. v. Malley-Duff &
Assoc., Inc., 483 U.S. 143
, 154 (1987) ("[T]he heart of any RICO
complaint is the allegation of a pattern of
racketeering.") (emphasis in original). To do so, a plaintiff must
demonstrate that (1) the two predicate acts are related and (2) they
amount to or pose a threat of continuing criminal activity.
Schlaifer Nance & Co. v. Estate of Andy Warhol,
119 F.3d 91, 97 (2d Cir. 1997); United States v.
Indelicato, 865 F.2d 1370
, 1381 (2d Cir. 1989).
1. The Trustees' Motion for Summary Judgment
In addition to demonstrating what is noted above, to prevail in a RICO
action under Section 1962(c), the plaintiff must show that
each defendant conducted or participated directly or indirectly
in the conduct of a RICO enterprise by committing at least two acts of
racketeering in furtherance of the illegal enterprise. 18 U.S.C. § 1961(5);
Sedima S.P.R.L. v. Imrex Co, 473 U.S. 479, 496 n.14
(1985); McLaughlin v. Anderson, 962 F.2d 187, 192 (2d
Cir. 1992) ("[T]he bare minimum of a RICO charge is that a defendant
personally committed or aided and abetted the commission of two predicate
acts."); Tarr v. Credit Suisse Asset Management,
Inc., 958 F. Supp. 785, 802 n.14 (E.D.N.Y. 1997), The only remaining
predicate act that Doreen alleges was conducted by someone associated
directly with the Trustees or the Funds is predicate act #6. Pls.' Mem.
in Opp'n at 31 (citing Lawrence Kudla as one of the actors directly
responsible). Because Doreen only alleges one predicate act against the
Trustees, Doreen's claim of a RICO violation against the Trustees
Furthermore, Doreen fails to submit any evidence that the Trustees
"conduct or participate, directly or indirectly, in the conduct of such
enterprise's affairs" by "participat[ing] in the operation or management
of [a RICO] enterprise." Reves v. Ernst & Young,
507 U.S. 170, 177, 185 (1993) (quoting 18 U.S.C. § 1962 (c));
18 U.S.C. § 1962 (c); De Falco v. Bernas,
244 F.3d 286, 309-312 (2d Cir. 2001); United States v. Alien,
155 F.3d 35, 40-43 (2d Cir. 1998); Blue Cross and Blue Shield of New
Jersey, Inc., v. Philip Morris Inc., 113 F. Supp.2d 345,
366 (E.D.N.Y. 2000). Doreen does not even allege that the evidence "will
show" such association or conduct by the Trustees it only does so
as it relates to Local 282. In its Memorandum in Opposition to Summary
Judgment, Doreen merely alleges that "Local 282, acting through the
individuals identified in the chart . . . directed the predicate
misconduct." Pls.' Mem. in Opp'n at 59 (emphasis added). Lawrence Kudla
is the only trustee mentioned in the chart and he is only mentioned in
relation to one predicate act. Furthermore, in discussing how the
predicate activity was conducted through the alleged enterprise, the only
involvement by the Funds that is even alleged generally concerns the
allegations of mail fraud which, as noted above, Doreen is now
precluded from pursuing. Pls.' Mem. in Opp'n at 47-48 (arguing that Local
282 used its relationship with the Funds and Trustees to "create a
false appearance of legality by asserting Plaintiffs were in arrears in
the payment of fringe benefits due to the Funds (and had not paid such
deficiencies)"); see also id, at 50-51 (asserting that "the
scheme was to spread lies backed up by the Trust Funds' paperwork,
throughout the industry, that Plaintiffs were not properly paying fringe
benefit contributions and would not cure such deficiencies").
Finally, there is no evidence in the record suggesting that Kudla was
understood to be acting as a representative of the Trustees or Funds. The
mere fact that Kudla, in addition to being a trustee, was also Local
282's business agent, "does not mean that [their] activities can
automatically be attributed" to the Funds. Bldg, Indus. Fund.
992 F. Supp. at 177 (granting summary judgment because the only evidence
that [a fund] had anything to do with the threats or acts of violence
directed toward plaintiffs was the fact that some of the members of the
Union were also employee representatives of [the fund]). While Doreen has
raised genuine issues of material fact as to whether Local 282
deliberately engaged in a campaign of harassment and retaliation against
it, the Court finds no reasonable trier of fact could conclude based on
this record that the Trustees acted as principals in this incident
[Predicate #6] simply because Kudla was a trustee of the Funds.
Id. at 177.
Ultimately, because the Trustees can only be liable for a RICO
violation if they engaged in two predicate acts, there is no material
issue of fact which precludes summary judgment for the Trustees.
Accordingly, this Court grants the Trustees' Motion for Summary Judgment.
Therefore, the remaining analysis pertains only to Local 282's motion for
summary judgment against Doreen.
2. Local 282's Motion for Summary Judgment
a. Alleged Predicate Acts #1, #2; Single Act or Multiple
As a preliminary matter, the Court holds that what Doreen has labeled
Predicate Acts #1 and #2 (the attempted bribery or "shakedown") is
actually only one predicate act. Although the Second Circuit has made
clear that multiple acts of racketeering are not to be excluded from the
reach of RICO "simply because . . . they further but a single scheme,"
plaintiffs cannot fragment a singular act into multiple acts in order to
invoke RICO. Indelicate, 865 F.2d at 1383; Schlaifer
Nance, 119 F.3d at 98 ("[C]ourts must take care to ensure that the
plaintiff is not artificially fragmenting a singular act into multiple
acts simply to invoke RICO."). This is not a situation like that in
Indelicato*fn27 or United States v.
Kaplan, 886 F.2d 536, 542-43
(2d Cir. 1989),*fn28 where more than one act was conducted at the
same time but still could be counted as two separate acts. Here, there is
allegedly one act attempted by the same officials against the same
victims on two occasions. Doreen implicitly admits that these acts are
actually only one attempt to extort money by claiming that after no money
was provided to Local 282 Officials in response to the first shakedown,
these officials made a "[r]evised [d]emand for a bribe [raised to almost
$500,000]." Pls.' Mem. in Opp'n at 29; see also id. at 3
("Local 282, subsequently demanded a modified bribe with a value of
almost $500,000."); Pls.' Damage Statement, Ex. 2A to Kramer Decl., at 3
(characterizing the second attempt as a "revised demand" and the whole
scenario as one bribe by stating "Plaintiff's refusal to pay this bribe,
set in motion . . ."); see also M. Loguidice Dep., Ex. 3A to
Kramer Decl. at 375 (stating that they only tried to shake him down
"once"). Thus, this Court holds that Doreen's classification of this
"shakedown" as two predicate acts "is an attempt . . . to go beyond
Congress's intent and fragment an act that plainly is unitary into
multiple acts." Indelicato, 865 F.2d at 1383.
This alleged demand for a bribe cannot constitute a predicate act in
furtherance of a RICO conspiracy because no reasonable trier of fact
based on the facts as asserted by Doreen could find that this act meets
the requirements of Section 1962(c) that the act be "related" to the
other alleged acts of racketeering. Matsushita, 475 U.S. at
586; Sutera, 73 F.3d at 15. As noted above, to succeed in a
RICO action, the plaintiff must establish that a defendant committed two
or more acts that constitute a pattern of racketeering activity.
Agency Holding Corp., 483 U.S, at 154. To establish such a
pattern, a plaintiff must demonstrate, inter alia, that the predicate
acts are related. H.J, Inc. v. Northwestern Bell Tel.
Co., 492 U.S. 229, 239 (1989); Schlaifer Nance. 119 F.3d
at 97; Indelicato, 865 F.2d at 1381; Econ.
Opportunity. 47 F. Supp.2d at 363. Here, the undisputed facts and
allegations by Doreen demonstrate that the alleged acts #1 and #2
which the Court has determined constitute only one act are not
sufficiently related to the remainder of the alleged RICO scheme to
comprise part of a pattern of racketeering activity.
The primary proof that these acts are not related to the alleged RICO
scheme comes from Doreen's own admissions. Doreen admits that after the
consent decree, the goal of the illegal enterprise "shifted" from bribery
to "retaliation and intimidation." Pls.' Mem. in Opp'n at 50. These
alleged acts of
soliciting a bribe occurred before the original consent decree was
in place (March 22, 1995). Accordingly, they were a part of the prior
criminal enterprise for which Local 282 was prosecuted and because of
which Local 282 entered into a consent decree. Doreen makes this
dichotomy clear in its Damage Statement. It claims two enterprises
existed. The first enterprise is the same enterprise as described in the
government's complaint against Local 282 (that resulted in the consent
decree) and involves the attempted bribery alleged in acts #1 and #2.
Pls.' Damage Statement, Ex. 2A to Kramer Decl., at 3. The "second and
distinct criminal enterprise consist[ed] of Local 282 and the Local 282
Trust Funds . . . (the `Local/Funds Enterprise')," and began after these
initial acts were conducted. Doreen explained that:
[its] refusal to pay this bribe [part of the first
enterprise], however, set in motion
separate criminal misconduct engaged in
through a distinct criminal enterprise,
the purpose of which was to retaliate against and
punish Plaintiffs, to make an example of them to
other construction industry participants, and
assure other construction enterprises would tow
the line and accede to demands of Local 282.
Pls.' Damage Statement, Ex, 2A to Kramer Decl., at 3 (emphasis
added). The subsequent criminal conduct allegedly engaged in by
Local 282 and the Trust Funds was committed, according to Doreen, for a
single purpose to retaliate against Doreen for refusing to pay
bribes which Local 282, through the pre-existing Gambino/Local 282
Enterprise, had unsuccessfully attempted to
extort from Doreen. Id. at 4.
Although Doreen attempts to incorporate the attempted shakedown into
the alleged existing enterprise, it is clear from Doreen's own
submissions that they are not a part of the same scheme. They do not
share a common goal or methodology with respect to the other predicate
acts. Indelicate, 865 F.2d at 1382 ("An interrelationship
between acts, suggesting the existence of a pattern, may be established
in a number of ways. These include proof of their temporal proximity, or
common goals, or similarity of methods, or repetitions."); Procter
& Gamble Co. v. Bio Apple Indus. Bldgs., Inc.,
879 F.2d 10, 16 (2d Cir. 1989) (stating that a pattern is shown if conduct
"embraces  acts that have the same or similar purposes, results,
participants, victims, or methods of commission, or otherwise are
interrelated by distinguishing characteristics and are not isolated
events" (quoting 18 U.S.C. § 3575 (e))). The goal of the other
predicate acts alleged was to "retaliate against [Doreen], by
intimidating them and other construction industry participants. The
scheme was to spread lies, backed up by the Trust Funds' paperwork,
throughout the industry, that [Doreen] w[as] not properly paying fringe
benefits contributions and would not cure such deficiencies." Pls.' Mem.
in Opp'n at 50-51; Pls.' Damage Statement, Ex. 2A to Kramer Decl., at 5.
The goal of the attempted shakedown, on the other hand, was not to punish
or drive them out of business but purely to extort money
unrelated to any allegations of underpayment. See M. Loguidice
testimony, Ex. 3A to Kramer Decl., at 61-63, 109-111 (testifying that
Collusi gave him a piece of paper with numbers on it and stated that "if
[Loguidice] want[s] labor peace, this is what we're looking for"); Am.
Compl. ¶ 45(A) (claiming that the shakedown was for kickbacks to
employees). Doreen itself explicitly admits that the shakedowns did not
share the same purpose as the other alleged acts. Pls.' Mem. in Opp'n at
52 (noting that "aside from Defendant's shake-down efforts and
pre-Consent Order racketeering, Defendant's post-1993 predicate
misconduct was for the same purpose, i.e., to intimidate a number of
different corporate entities, their owners and their employees and to
retaliate against them by financially injuring them, destroying their
ability to compete in New York" (emphasis added)).
Thus, when considering the attempted shakedown in light of Doreen's own
characterization of the goal of the criminal enterprise, it fails to be
sufficiently related. Therefore, the Court holds that the acts labeled #1
and #2 are not sufficiently related to the alleged enterprise to comprise
part of a pattern of racketeering activity. Moreover, since the attempted
shakedown has been found by this Court to be only one act, it cannot, on
its own, support a separate RICO enterprise since at
least two predicates are required.
Even if the attempted bribery were sufficiently related to the alleged
enterprise, it would fail to constitute a predicate act in furtherance of
RICO because there is no evidence upon which a jury could find that this
act constitutes extortion. Scotto, 143 F.3d at 114 ("To defeat
a [summary judgment] motion, `there must be evidence on which the jury
could reasonably find for the non-movant.'" (quoting Liberty
Lobby. 477 U.S. at 252)), As discussed earlier, to make out a claim
for extortion under New York or Federal Law, the plaintiff must,
inter alia, show that the defendant threatened force or violence
or instilled fear in the plaintiff. 18 U.S.C. § 1951 (b)(2); N.Y.
Penal Law § 155.05(2)(e); Bldg. Indus. Fund. 992 F. Supp.
at 176 n.9. Doreen points to absolutely no evidence in the record that
suggests the attempted shakedown allegedly committed by Local 282 was
conducted by force or violence or threat of force or violence or that
Local 282 officials instilled fear. While it is true that Doreen
submitted evidence that Conti and Collusi suggested that all of Doreen's
labor problems would cease if they paid the bribe, there is no evidence
that Doreen actually feared labor unrest or economic loss if it did not
agree. See United States v. Capo, 817 F.2d 947, 950 (2d Cir.
1987) (stating that the fear may be fear of purely economic loss), To the
shows that these bribes were not taken seriously* Dorothy Loguidice
considered them to be a "fishing" expedition and "a joke." Michael
Loguidice showed similar nonchalance by chalking it all up to Collusi
being "crazy," throwing the alleged written demand out the window, and
telling his wife to "forget about it." This testimony does not support
and Doreen points to no testimony that does support that
Doreen believed that the Defendants would use their power to Doreen's
detriment. See id. at 951. While the Court must view all
evidence in the light most favorable to Doreen at the summary judgment
stage, Doreen's failure to go beyond the pleadings and provide affidavits
or deposition testimony in support of its allegations is fatal,
Celotex, 477 U.S. at 323-324; Scotto, 143 F.3d at
114. Therefore, the Court holds in the alternative that this act is not
extortion and thus not a predicate act.
3. Predicate Acts #3, #5-8
The Court begins by analyzing whether or not there is a genuine issue
of material fact regarding relatedness of these remaining acts (#3, and
#5-8). Even viewing the record in the light most favorable to Doreen, it
is clear that predicate act #3 (the alleged overpayment stemming from
John Doe information included in the shop steward report) is not
sufficiently related to predicate acts #5-8 to support a RICO claim. The
participants, method of commission, victims, and results are very
different than those of predicates #5-8. H.J. Inc., 492 U.S. at
240 ("[C]riminal conduct forms a pattern if it embraces criminal acts
that have the same or similar purposes, results, participants, victims,
or methods of commission, or otherwise are interrelated by distinguishing
characteristics and are not isolated events.'" (quoting
18 U.S.C. § 3575 (e))). The major participant in predicate #3 is
Richard Kane. In predicates #5-8, the major participants were men that
were eventually removed from office for their previous RICO behavior,
e.g., Menechino Sr., Finch, and Conti. The method by which the act was
conducted is also distinguishable. In predicates #5-8 there was use of
force or threat of force aimed at the drivers themselves. While the
ultimate goal of predicates #5-8 may have been the same as that of
predicate #3, to cause loss of profits and create fraudulent records,
the immediate victims were the drivers. In predicate act #3, on the
other hand, there were no threats involved. Moreover, the drivers of
Doreen's trucks were not the victims in this act. They were not
negatively affected by this behavior. The only potential victim was
Doreen in that Doreen may possibly have been charged for drivers who
were not Doreen's employees.
For these reasons, the Court rules that predicate act #3 is not
sufficiently related to the other alleged predicates to be maintained.
Even if this were not the case, act #3 could not be considered a
predicate act because as alleged it is not extortion. There is no
allegation that this act involved the threat of force, violence or fear,
as required under both the N.Y. Penal Law § 155.05(2)(e) and the
Hobbs Act, 18 U.S.C. § 1951.
To establish a pattern of racketeering activity, the plaintiff must
show "a relationship between the predicates and . . . the
threat of continuing activity." H. J. Inc., 492 U.S. at 239
(emphasis added) (internal quotations and citation omitted);
Id. at 237 ("Congress was concerned in RICO with long-term
criminal conduct."); 6ICC Capital Corp. v. Tech. Finance Groups.
Inc., 67 F.3d 463, 466 (2d Cir. 1995) (explaining that plaintiff
must allege "either an `open-ended' pattern (i.e., past criminal conduct
coupled with a threat of future criminal conduct) or a "closed-ended'
pattern of racketeering activity (i.e., past criminal conduct extending
over a substantial period of time)").
The strongest arguments against finding closed-ended and open-ended
continuity here are that the alleged predicate acts were limited in
duration (seven months) and they posed no threat of long term continuing
racketeering activity because the officials behind the activity were
removed from office. These
arguments fail, however, for various reasons. See Arthur
R. Miller, The Pretrial Rush to Judgment: Are the "Litigation
Explosion,'" "Liability Crisis," and Efficiency Clich's Eroding Our Day
in Court and Jury Trial Commitments. 78 N.Y.U. L. Rev. 982, 1133
(2003) ("[A]n unfettered commitment to `efficiency' in the pretrial
disposition context whatever its motivation or however
articulated will erode other systemic values.").
It is true that the potential threat of continued activity was stymied.
A consent decree, specifically tailored against the type of activity
alleged in predicates #5-8, was put in place and a corruption officer was
appointed by the United States Attorney's office to investigate, gather
evidence, and take actions to eliminate the influence of corruption from
Local 282. Pls.' Damage Statement, Ex. 2A to Kramer Decl., at 2-3. As a
result of these efforts, most of the major actors in these alleged
predicates (Finch, Menechino Sr., and Collusi) were removed from their
positions of authority because of their corruption. Pls.' Mem. in Opp'n
at 50. Indeed, there are no allegations remaining of similar types of
retaliatory, intimidating behavior since the month these actors were
removed. Nevertheless, this does not negate the threat of continuing
racketeering activity here because "the analysis of the threat of
continuity cannot be made solely from hindsight." United States
v. Aulicino, 44 F.3d 1102, 1112 (2d Cir. 1995) (quoting
States v. Busacca, 936 F.2d 232, 238 (6th Cir.
1991)). Instead, the Court must consider the totality of the
circumstances surrounding the commission of the predicates to determine
whether there is a threat of continuing criminal activity. United
States v. Kaplan, 886 F.2d 536, 542-43 (2d Cir. 1989).
Here, the activities involved did not have an "inherently terminable"
goal like the sale of land. Cf. GICC Capital. 67 F.3d at 466
(finding no open-ended continuity when scheme was "inherently terminable"
and noting that "it defies logic to suggest that a threat of continued
looting activity exits when . . . there is nothing left to loot"). For
that matter, there is no basis for viewing Local 282's activities as a
"discrete and finite project that came to a natural end" a
distinction that the Second Circuit highlighted in Aulicino as
determinative. Aulicino, 44 F.3d at 1114 (finding 3 1/2 month
conspiracy satisfied continuity requirement). Instead, like in
Aulicino, the alleged RICO activity was stopped by the removal
of the primary people responsible for the behavior. Aulicino,
44 F.3d at 1114 (finding that the activity appeared to have ended because
of lack of leadership and fear of being caught). When considering this in
the overall context that Defendants actually engaged in RICO
activity in the past and had entered into a consent decree because of it
the Court cannot rule as matter of law that continuity does not
The defendants alternatively argue that there is no
continuity because the goal here had a foreseeable end-point in
that Doreen alleges in its complaint that the goal was to force Doreen
out of business in the industry. See, e.g., Trustees' Mem. in
Supp. at 45 (citing Am. Compl. ¶¶ 52, 53, 55 and relying on F.D.
Property Holding v. U.S. Traffic Corp., S206 F. Supp.2d
362, 370 (E.D.N.Y. 2002)). This argument, although persuasive, fails
because Doreen also alleged that the goal was to "retaliate against
[Doreen] by intimidating [it] and other industry participants." Pls.'
Mem. in Opp'n at 50. Indeed, the complaint taken as a whole alleges that
the Defendants' goal was not simply to put Doreen out of business but to
set up a regime to force Doreen and other companies to
pay bribes or suffer injury. See, e.g., Am. Compl. §§ 52 and
48. While it is true that Doreen has not pointed to any evidence
supporting its allegations that Defendants committed RICO activity
against other industry participants, it has submitted evidence upon which
a reasonable jury could believe its theory of retaliation and could
determine that this retaliatory conduct did not have a natural or
foreseeable end-point. Doreen does not allege that the Defendants had
nor does the evidence show a detailed plan to put Doreen
out of business in the foreseeable future like there was in Pier
Connection. Inc. v. Lakhani, 907 F. Supp. 72 (S.D.N.Y.
1995). Instead, the process of putting Doreen out of business was an end
in itself one that could work to send a
message to the industry that a company has to play ball with Local
282. The "fortuitous interruption of that activity" cannot be used to
show a lack of threat of continuity. Nafta v. Feniks Int'l
House of Trade, 932 F. Supp. 422, 427 (E.D.N.Y. 1996) (quoting
Busacca, 936 F.2d at 238). Therefore, a jury could find on this
record that "there was nothing to stop [these Local 282 officials] from
continuing" to threaten and intimidate Doreen had they not been removed
for corruption. Busacca. 936 F.2d at 238.
Moreover, the Supreme Court stated that open-ended continuity is
satisfied "where it is shown that the predicates are a regular way of
conducting defendant's ongoing legitimate business." H, J.
Inc., 492 U.S. at 243. Here, a reasonable jury could find that
threats and intimidation to extort from Doreen were a regular way of
conducting business, since it is undisputed that the Defendants committed
RICO misconduct and had entered into a consent decree to prevent just
this sort of behavior. Therefore, viewed in the light most favorable to
Doreen, the Court holds that a reasonable trier of fact could find that
the facts indicate that the activity was capable of repetition and
"likely to continue for the indefinite future, absent outside
intervention." Aulicino, 44 F.3d at 1112; Nafta,
932 F. Supp. at 427 ("Although a single scheme that is inherently terminable
or acts that focus on a clearly defined, discrete and finite goal,
generally cannot establish the threat of ongoing
continuity, such a threat does exist where the facts indicate that
the defendant was prepared to undertake an extended series of criminal
acts that would continue indefinitely." (internal quotations and
citations omitted)); H.J. Inc., 492 U.S. at 241.
Accordingly, the Trustees' motion for Summary Judgment [Doc, No. 318]
is ALLOWED and Local 282's motion for Summary Judgment [Doc. No. 324] is
ALLOWED in part (as to predicates #1-3 and #9-16) and DENIED in part (as
to predicates' #5-8).
*fn2 On February 24, 2003, this Court denied Doreen's motion for a
joint trial of all matters in this case with that in the ERISA Collection
Action [Doc. No. 311]. It granted, however, Doreen's alternative request
to proceed first with the ERISA Collection Action and then with this RICO
*fn3 The original complaint was brought against JCS Enterprises
(wholly owned by Jack Stuart) and JCS Construction (wholly owned by
Michael Loguidice) (collectively "JCS"). The Trustees, however, later
alleged that Andrea Doreen and Conroc Recycling Inc. were JCS's alter
egos and therefore jointly and severally liable for any delinquencies.
Additionally, the Trustees claimed that Michael Loguidice and Dorothy
Loguidice were individually liable. For the purposes of this memorandum
and order, the defendants in the ERISA Collection Action and the
plaintiffs in the RICO action are collectively referred to as
*fn4 Doreen also alleged a civil RICO violation under
18 U.S.C. § 1962(a), violations of the antitrust laws of the United
states, breaches of Collective Bargaining Agreements, and tortious
interference with Doreen's business relations. pls.' Am. Compl. [Doc.
No. 137]. These other claims, however, were dismissed by Judge Thomas
C. Platt. Doreen v. Local Union 282, No. 98-4838, 4-5 (E.D.N.Y.
July 31, 2000) (order dismissing certain claims) [Doc. No. 170].
*fn5 This claim is different from that in the ERISA Collection Action.
There, the Trustees claimed fund contribution delinquencies as opposed to
actual wages past due.
*fn6 Designated to sit as a visiting judge in the Eastern District of
New York, this Court has handled 38 jury-waived matters via the video
conferencing facilities of that court and the District of Massachusetts.
Among these are four trials held, in whole or in part, via video
conferencing, Kesses v. Bicker, No. 00-05325
(E.D.N.Y. filed Sept. 5, 2000); Sung Jin Fasteners, Ltd, v.
Northstar Equip. Corp., No. 99-3134 (E.D.N.Y. filed June 3,
1999) (appeal pending); Davox Corp. v. Mfg. Admin, and
Mat. Svs., No. 98-5020 (E.D.N.Y. filed Aug. 4, 1998);
United States v. Mazzeo, No. 98-3060 (E.D.N.Y. filed Apr. 22,
1998). This procedure, which promotes efficiency without sacrificing
justice, is also followed in the District of Arizona (20 cases), the
Middle District of Florida (13 cases), and the District of Maryland (1
*fn7 In February 1999, KPMG was jointly retained by Doreen and the
Trustees to conduct an independent review of both parties' records to
determine if Doreen owed benefit contributions. KPMG Report, Tab 37 to
Levine Decl., at 2; Arbitrator Award and Opinion, Tab 1 to Levine Decl.,
at 3. The KPMG auditor concluded that both Doreen's and the Trustees'
records were insufficient because they were incomplete or lacked
corroborating data such as employee time cards and time sheets. As a
result, KPMG relied on independent third party documents and records such
as dump tickets, certified payroll reports and purchase/sales records
from third parties. KPMG Report, Tab 37 to Levine Decl., at 3. Both
parties were appraised of the process and methodology used by KPMG and
both parties cooperated. Id. at 4-7; Arbitrator Award and
Opinion, Tab 1 to Levine Decl. at 4. In December of 1999, KPMG concluded
that Doreen underpaid the required remittances to the various Funds. KPMG
Report, Tab 37 to Levine Decl., at 21. After fixing a calculation error,
the amount owing was found to be at least $98,000 in fund contributions.
Arbitrator Award and Opinion, Tab 1 to Levine Decl., at 4.
*fn8 Although the Court found that the methodology of the KPMG report
was "reasonable and logical," it noted that Doreen had succeeded, in
part, in demonstrating that there might have been a more precise
calculation if the contributions owed had been based entirely on the dump
tickets and truck logs or Jack sheets. Trial Tr. Vol. 5 at 562-564. The
Court explained that these sources were not used by KPMG because Doreen
had improperly destroyed many of the pertinent records. Id. at
563. Therefore, the Court directed the parties to use the dump tickets
and truck logs where possible but "in default of more accurate
documentation, the KPMG report governs." Id. at 564:24-25.
*fn9 Doreen's motion for reconsideration was based on alleged errors
in the third party sales records relied on by KPMG. These records were
used in lieu of other primary sources, in part, because Doreen had
willfully destroyed such sources. The Court refused to reconsider its
findings and rulings.
*fn10 Allegations of wire fraud and extortion under New York Law were
first introduced in Doreen's Memorandum in Opposition and have not been
factually supported in any distinct manner. Moreover, neither of these
claims were included in the Joint Pre-Trial Order. Therefore, the Court
holds that these claims have been abandoned. See 6A Wright
& A. Miller, Fed. Prac. & Proc. Civ.3d § 1527 (2003)
(stating that it is up to the court's discretion whether to allow
evidence beyond the scope of the pretrial order); Wood County
Airport Auth. v. Crown Airways, Inc., 919 F. Supp. 960,
964 n.9 (S.D.W. Va. 1996) (holding that plaintiff abandoned claim by not
responding to defendant's argument for summary judgment on the issue and
"most importantly" for not referencing the claim in the pretrial order);
Cf. Morales v. Turman, 535 F.2d 864, 867 n.7 (5th
Cir. 1976), rev'd on other grounds, 430 U.S. 322 (1977) ("The pretrial
order supercedes the proceedings and becomes the governing pattern of the
*fn11 The Defendants argue that Doreen includes among the alleged
predicates some claims that Judge Platt dismissed. See, e.g.,
Trustees' Mem. in Supp. of Mot. for Summ. J. [Doc. No. 320] at 19.
Although Judge Platt dismissed many of Doreen's original claims found in
the Amended Complaint, some of the factual allegations supporting those
dismissed claims were specifically referenced in the remaining claims
and, therefore, are still included in this action. See, e.g.,
Count II of the Am. Compl. ¶ 50 ("Plaintiffs repeat and reallege each
and every allegation contained in paragraphs `1' through `49' hereof as
though fully set forth at length herein.").
That being said, in the Amended Complaint and in the Damage Statement,
Doreen alleged additional actions taken by Local 282 and the Trustees as
part of the scheme to put Doreen out of business. See, e.g.,
Am. Compl. ¶¶ 67-68; Pls.' Damage Statement, Ex. 2A to Kramer Decl.,
at 8-14. In its memorandum in opposition to summary judgment, however,
Doreen provided a detailed, chronological list of the acts it claims are
the RICO predicate acts and of the evidence supporting the allegations.
Pls.' Mem. in Opp'n at 29-34. This list is pared down from that in the
Amended Complaint and Damage Statement. Although Doreen states that this
chart sets forth "some of the predicate misconduct at issue," because it
is the most recent submission and it was provided in response to a
summary judgment motion, the Court considers this chart as inclusive of
all of Doreen's claims of predicate acts that are of genuine issue for
its case. Importantly, Doreen has failed to point to any evidence that
supports these additional allegations and the Court is "not required to
engage in a hunt and peck exercise to ferret out potentially relevant"
evidence. Cf. In re Relafen Antitrust Litigation, 286 F. Supp.2d 56,
64 (D. Mass. 2003) (quoting Pool Water Products v.
Olin Corp., 258 F.3d 1024, 1033 (9th Cir. 2001)). Moreover, at
this stage after discovery the Defendants are entitled to
a final statement of that of which they are accused and notice of the
alleged supporting evidence. This failure to designate specific support
in the record is fatal at the summary judgment stage. See Celotex
Corp. v. Catrettr 477 U.S. 317, 323-24 (1986) (stating
that once the movant has met its burden, the non-moving party must "go
beyond the pleadings, and by [its] own affidavits, or by the depositions,
answers to interrogatories, and admissions on file, designate
specific fapts showing there is a material issue for trial") (emphasis
added); Scotto v. Almanas, 143 F.3d 105, 114 (2d Cir.
1998); Bldg. Indus. Fund v. Local Union No. 3, Int'l Bhd.
of Elec. Workers, 992 F. Supp. 162, 170 (E.D.N.Y. 1996) (citations
omitted) (stating that the party must "produce significant probative
evidence tending to support [its position]"). Therefore, the Court holds
that the list of alleged predicate acts found in Doreen's Memorandum in
Opposition to Summary Judgment is exhaustive.
*fn12 The headings for the acts are a paraphrase of Doreen's
allegations and are not reflective of the Court's findings or
*fn13 Doreen also points to testimony from Dorothy Loguidice, Ex. 3C
to Kramer Decl., in support of this allegation. This testimony, however,
is irrelevant to whether John Doe names were actually put on the reports.
Dorothy merely refers to a letter sent on December 6, 1994, stating
neither the amount nor the time period for which Doreen was allegedly
delinquent. Doreen indicated, however, that the time period was not for
October but for September, whereas the time period of the alleged ghost
driver additions is July 1994.
*fn14 Doreen indicated in its Memorandum in Opposition that Rodney
Warwick's Statement also supported these allegations but included it in
the Kramer Declaration supplied to the Court as specified.
*fn15 Doreen also argues that its RICO claims are demonstrated by the
fact that it was treated disparately as compared with other employers.
Pls.' Mem. in Opp'n at 15-16.
*fn16 Although the two defendants moved separately, the substance of
their motions is almost identical. Therefore, the Court will address both
motions simultaneously but will point out any arguments or issues
specific to either defendant where relevant.
*fn17 As mentioned earlier, Doreen moved for joint trial of this case
and the ERISA Collection Action. For various reasons, the Court declined
to allow this motion. It is undisputed, however, that many of the facts
underlying the claims in both cases overlap.
*fn18 Arguments that the Union exaggerated the actual amount it
claimed was owing, however, are not collaterally estopped.
*fn19 As a defense against the ERISA Collection Action, Doreen claimed
that the Trustees failed to follow strict notice requirements and,
therefore, that it should be relieved of its obligations under the
Collective Bargaining Agreement. The Court ruled, however, that Doreen
waived the written demand requirement found in the Collective Bargaining
Agreement "by [its] conduct in urging the joint review of [its] records
in the course of these proceedings, the conduct that led up to the KPMG
report" and that the' `statutory requirements of such payments into
pension funds by ERISA cannot be frustrated by the Trustees' failure
strictly to follow the requirements of the Collective Bargaining
Agreement." King v. JCS Enterprises, Inc., Trial Tr.
Vol. 5 at 559:1-15. This ruling that allegations of breach of
contract notice provisions are waived is also one that cannot be
relitigated in the current case. Doreen was provided and took
advantage of a full opportunity to present this defense during
the Bench trial. It claimed, inter alia, that the failure to follow those
policies and procedures was done in order "break" Doreen. Id.
at 534. The Court decided based on the merits that Doreen had waived this
defense. Moreover, this decision was necessary to the judgment. Had the
Court not found waiver of the notice provisions, it could not have found
Doreen liable to the Trustees.
*fn20 Doreen argues strenuously that the arbitrator's factual findings
should not be given preclusive effect because it was not provided the
opportunity to present its defenses to arbitration. Pls.' Mem. in Opp'n
at 5-22. As explained in Doreen,"the defenses to which Doreen alluded
during the summary judgment hearing before this Court were
presented, heard, and decided against Doreen by both Judge Platt and
Arbitrator Adelman." Doreen, 250 F. Supp.2d at 113. Moreover,
Doreen is being provided another opportunity to present these defenses at
the damages phase in order to limit Local 282's recovery. Id.
Therefore, these arguments are not persuasive.
*fn21 For that matter, Doreen does not allege that any of the phone
calls or letters constituted extortion.
*fn22 The Defendants correctly contend that the wire fraud claims fail
irrespective of this Court's prior findings. The federal wire fraud
statute, 18 U.S.C. § 1343, prohibits the transmission "by means of
wire, radio or television communication in interstate or
foreign commerce [of] any writings . . . or sounds" in furtherance of
"any scheme or artifice to defraud." 18 U.S.C. § 1343 (emphasis
added). As such, this section does not cover telephone calls that are
purely intrastate. DiFiore v. DiLorenzo, No. 91-4209,
1997 WL 722697 at *4 (E.D.N.Y. Sept. 19, 1997); United States
v. Paredes, 950 F. Supp. 584, 587 n.3 (S.D.N.Y. 1996). Here,
the Amended Complaint and the current record does not support the
contention and Doreen does not even allege that
interstate telephone calls were made. Cf. Chazin v.
Lieberman, No. 89-5968, 1990 WL 115716, at *3 (S.D.N.Y. Aug. 6,
1990) (noting that "there are no factual allegations in the complaint
from which to draw the conclusion that interstate wire or electronic
communications were made" and holding that the "complaint [did] not
allege factual allegations sufficient to show any interstate wire
transmission") On the contrary, the only inference to be drawn from the
current record is that all of the actions took place in New York, because
all of the plaintiffs "are members of the construction industry in the
New York area," Pls.' Mem. in Opp'n at 1; Am. Compl. ¶ 5-16, and the
business was conducted at construction sites in New York City.
Id. ¶ 54; see also letters addressed to Asplundh
Construction Corporation and Cipico, Tabs 35 and 36 to Levine Decl.
(indicating these two companies to which phone calls were
allegedly made are located in New York). Moreover, in its Amended
Complaint, Doreen does not even allege wire fraud but only mail fraud;
and in its Memorandum in Opposition to Summary Judgment, Doreen does not
even attempt to explain how actions by the Defendants meet the
requirements of wire fraud pursuant to 18 U.S.C. § 1343. Given that
any claims of fraud, including RICO claims based on mail and wire fraud,
must be pled with particularity under Rule 9(b) of the Federal Rules of
Civil Procedure, Center Cadillac/ Inc. v. Bank Leumi Trust
Co. of New York. 808 F. Supp. 213, 228 (S.D.N.Y. 1992);
Wexner v. First Manhattan Co., 902 F.2d 169, 172 (2d
Cir. 1990), Doreen's claims of wire fraud fail.
*fn23 As part of the general support for its RICO claims and specific
evidence of mail fraud, Doreen also alleges that Local 282 and the
Trustees breached contract requirements such as strict notice provisions
and failed to inform the recipients of the delinquency notices that
Doreen had not been given an opportunity to cure. These allegations are
precluded because the Court already found these requirements to be
waived. See discussion supra.
Even if these claims were not precluded, they do not revitalize
Doreen's claims of mail fraud because they do not evince an intent to
commit mail fraud. See, e.g., Blount Financial Servs., Inc. v.
Walter E. Heller & Co., 819 F.2d 151, 152 (6th Cir. 1987),
especially when considered in light of the Court's prior ruling that
Doreen owed benefit funds, and the pleading requirements for fraud
pursuant to Fed. Rule Civ. P. 9(b). Such speculation as to intent creates
at most a speck of doubt, which is legally insufficient to create an
issue of fact in the mind of a reasonable fact-finder.
Matsushita, 475 U.S. at 586 (1986) ("When the moving party has
carried its burden under rule 56(c), its opponent must do more than
simply show that there is some metaphysical doubt as to the material
facts.") (footnote omitted). Doreen must produce "hard[er] evidence" than
this at the summary judgment phase. D'amico v. City of New
York, 132 F.3d 145, 149 (2d Cir. 1998). Moreover, these contract
violation allegations, even if true, do not amount to a RICO predicate
act. "Congress did not deploy RICO as an instrument against all unlawful
acts . . . [but] targeted only predicate acts catalogued under section
1961(1)." Hecht v. Commerce Clearing House, Inc.,
897 F.2d 21, 25 (2d Cir. 1990); 18 U.S.C. § 1961(1).
*fn24 This admission also negates its allegations that Doreen was
treated disparately as compared with other employers and that this
alleged disparate treatment evidences RICO scienter. Pls.' Mem. in Opp'n
*fn25 It does not appear that these allegations have been supported
with any evidence.
*fn26 Thus, any argument that the ERISA Collection Action was improper
and constituted extortion based on the fact that the original damage
request was two-thirds higher than the revised damage request fails as
*fn27 In Indelicato. the court held that nearly simultaneous
shooting and killing of three people to effect one goal constituted more
than one predicate, act of racketeering activity and sufficiently
established a pattern. Indelicato, 865 F.2d at 1381-1385.
*fn28 In Kaplan, the Defendant committed two distinct acts
of bribery during one conversation and the court counted the two bribes
as two predicate acts of racketeering activity. Kaplan, 886
F.2d at 542.
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