United States District Court, W.D. New York
WILLIAM J. MACKIN, Plaintiff,
JOHN T. AUBERGER, JOSEPH T. LOSZYNSKI, and others known or unknown, Defendants
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For William J. Mackin, Plaintiff: Jeffrey Wicks, LEAD ATTORNEY, Jeffrey Wicks, PLLC, Rochester, NY.
For John T. Auburger, Joseph F. Loscynski and others known or unknown Defendants: Paul J. Sweeney, LEAD ATTORNEY, Coughlin & Gerhart, LLP, Binghamton, NY.
DECISION AND ORDER
ELIZABETH A. WOLFORD, United States District Judge.
Plaintiff William J. Mackin (" Plaintiff" or " Mackin" ) brings this action against John T. Auberger (" Auberger" ) and Joseph F. Loszynski (" Loszynski" ) (collectively " Defendants" ), alleging violations of the Racketeer Influenced and Corrupt Organizations Act (" RICO" ), 18 U.S.C. § § 1961 et seq. (Dkt. 11). Defendants have filed a motion to dismiss the amended complaint pursuant to Fed.R.Civ.P. 12(b)(1) and 12(b)(6). (Dkt. 13).
With this lawsuit, Plaintiff has attempted to transform an employment and political dispute into a federal racketeering case. Plaintiff's tactics offend RICO's intended purpose and do not withstand scrutiny under Rule 12(b)(6). Because Plaintiff's amended complaint fails to state a plausible RICO claim, Defendants' motion is granted and the amended complaint is dismissed in its entirety.
Plaintiff, the former Deputy Chief of the Greece Police Department (" GPD" ), alleges that Defendants Auberger, the former Supervisor of the Town of Greece, and Loszynski, the former Public Safety Director of the Town of Greece, committed RICO violations to bring about " the demise of the then-existing structure of the GPD." (Dkt. 4 at ¶ 5(g)). Plaintiff alleges that the racketeering activities " began in or around 2002 by Auberger and continued throughout 2009 when Loszynski was hired and beyond." (Dkt. 11 at ¶ 14). The latest predicate act cited by Plaintiff in his amended complaint allegedly occurred on July 28, 2010. ( Id. at ¶ ¶ 35, 52-53). The statement of facts that follows is based on the allegations contained in Plaintiff's amended complaint.
I. Plaintiff's Amended Complaint
In 2002, Plaintiff was Captain of the GPD. ( Id. at ¶ 15). At that time, Plaintiff and three other officers sent a letter to the Monroe County Sheriff's Department requesting a promotional exam for the position of Deputy Chief. ( Id. at ¶ 17). Plaintiff alleges that Auberger called the applicants, including Plaintiff, into his office and demanded that they withdraw their requests for promotional exams, as he wanted his own candidate, Michael Ceretto, to fill the Deputy Chief position. ( Id.). Plaintiff refused to withdraw the letter, and the promotional exam was held. ( Id. at ¶ 18). Plaintiff and the other officers took and passed the exam in March 2002. ( Id. at ¶ 19). An " open competitive exam" also was given, and Ceretto, Auberger's candidate, scored second highest on that exam. ( Id.). Plaintiff alleges that New York law required Auberger to select the Deputy Chief from the promotional list before selecting a candidate from the open competitive list. ( Id. at ¶ 20).
Sometime in or around July 2002, Auberger allegedly summoned Merritt Rahn, Chief of the GPD, to his home. ( Id.). Plaintiff alleges that the meeting took place in a " highly coercive atmosphere." ( Id.). Auberger demanded that Rahn instruct Plaintiff to " sign off," or remove himself from the Deputy Chief list so that he could make Ceretto the Deputy Chief. ( Id. at ¶ 21). Plaintiff alleges that " [i]n exchange for Rahn's doing so, Auberger clearly made a threat -- either directly or impliedly -- that if Rahn did not do so, he would lose his job as he knows it, i.e., the conditions and authority of his employment, and such conditions and authority may be taken over from him by Auberger." ( Id.). Plaintiff further alleges that Rahn " clearly received value and benefit" by complying with Auberger's orders, and that the interaction between Auberger and Rahn constituted the crime of " bribery, in violation of New York Penal Law section 200.00 and U.S.C. section 1961(1)." ( Id.).
Rahn reluctantly told Plaintiff to remove himself from the Deputy Chief list, but Plaintiff refused to do so. ( Id. at ¶ 22). Auberger continued to pursue Rahn to pressure Plaintiff to remove himself from the Deputy Chief list. ( Id. at ¶ 23). Rahn also informed Plaintiff that Auberger made Plaintiff " a marked man," that Auberger " hate[d]" Plaintiff, and that Auberger was " out to get" Plaintiff. ( Id.).
As a result of Auberger's actions, Plaintiff discussed with Rahn the possibility of arresting Auberger for coercion and official misconduct. ( Id. at ¶ 24). Plaintiff also consulted the then-Monroe County District Attorney, Howard Relin (" Relin" ), to discuss Auberger's actions. ( Id. at ¶ 25). Relin advised Plaintiff against arresting Auberger due to the disorder it would cause in the Town of Greece. ( Id.). Plaintiff followed Relin's advice. ( Id.).
Auberger ultimately hired Plaintiff for the Deputy Chief position. ( Id. at ¶ 26). Plaintiff alleges that Auberger hired him " solely for the purpose of doing him harm and punishing him," and did so by reducing his salary, depriving him of a secretary, restricting Plaintiff's use of his official GPD police vehicle, and not allowing him to be present during the interviews of prospective hires. ( Id. at ¶ ¶ 26-27). Plaintiff alleges that, by depriving him of these benefits, " Auberger instilled a fear in Mackin through Rahn that if Mackin did not give up the aforementioned benefits, i.e. property, injury may come to Mackin or someone else. . . ." ( Id. at ¶ 28). Plaintiff alleges that Auberger's conduct constituted the " crime of extortion, in violation of New York Penal Law section 155(2)(e) and U.S.C. section 1961(1)" because Auberger " wrongfully took or with[held] the aforementioned benefits and property from an owner, i.e. Mackin." ( Id.).
In or around May 2009, Loszynski, a former state police deputy superintendent for internal affairs, was hired by Auberger as the Director of Public Safety. ( Id. at ¶ ¶ 31-32). Plaintiff alleges that Loszynski was hired " to effect, continue, strengthen and further Auberger's dominion and control over the GPD," and that Loszynski served as Auberger's " bulldog." ( Id. at ¶ ¶ 33-34). For example, in late 2009, Loszynski allegedly told GPD officers that if they ever brought up Auberger's name in connection with any wrongdoing, they would be terminated, and their benefits would be curtailed or ended. ( Id. at ¶ 34). Plaintiff alleges that Loszynski's threats " constituted the crime of extortion, in violation of New York Penal Law section 155(2)(e) and U.S.C. section 1961(1), since by the aforementioned acts, Auberger and Loszynski wrongfully threatened to take or withhold the aforementioned benefits and property from an owner. . ." ( Id.).
Plaintiff further alleges that he was wrongfully accused of shredding subpoenaed documents. On Saturday, April 25, 2009, Plaintiff was shredding daily reports which were " completely unrelated to any subpoena . . . issued by the Monroe County District Attorney's Office. . . ." ( Id. at ¶ ¶ 54-55). The shredding was " an innocuous act which was part of Mackin's daily routine every day for years," and the documents being shredded were " personal copies, not originals, and had been in Mackin's filing cabinet since approximately 1997." ( Id. at ¶ 55). Sergeant Richard Downs allegedly heard Plaintiff's shredder and inaccurately concluded that Plaintiff was shredding subpoenaed documents named in a subpoena issued by the Monroe County District Attorney's office on the previous day. ( Id. at ¶ 57). Downs contacted Lieutenant Patrick Phelan and Lieutenant Steve Chatterton with this information, and either Phelan or Chatterton contacted the New York State Police. ( Id. at ¶ 58).
Plaintiff alleges that on April 26, 2009, at 2:30 a.m., he was awakened by a phone call to his department-issued cell phone from Lieutenant Steve Wise, who asked Plaintiff to come to the front door of his home. ( Id. at ¶ 59). Wise informed Plaintiff that he was being suspended, and he was to turn over his vehicle, badge, gun, and computer. ( Id. at ¶ 60). Wise did not offer an explanation as to why Plaintiff
was being suspended. ( Id.). As Plaintiff was complying with Wise's orders, he received a phone call from Rahn, who also had been suspended. ( Id. at ¶ 61).
Plaintiff further alleges that on Sunday, April 26, 2009, at 12:00 p.m., only hours after he had been suspended, the Greece Town Board (" Town Board" ) was called to an emergency meeting. ( Id. at ¶ 63). Auberger told board members that Plaintiff, Rahn, and Sergeant Brian Ball (" Ball" ) were being suspended, based on charges drafted by Loszynski. ( Id.). The Town Board allegedly was not given any reason for the suspensions because the investigation was confidential. ( Id. at ¶ ¶ 63-64). The Town Board " reluctantly" voted to approve the suspensions at 1:00 p.m. that day. ( Id. at ¶ 64).
Plaintiff alleges that Auberger's telling the Town Board that Plaintiff, Rahn, and Ball were being suspended, and that the investigation was confidential and that no information could be disclosed, constituted " a threat to the Board -- delivered by the de facto head of the Republican Party -- that it would not benefit from the backing of the Republican Party if it did not vote as he instructed." ( Id. at ¶ 66). Plaintiff further alleges that Auberger previously told individuals with positions of power in Greece that if they did not follow his instructions, that " they would be out." ( Id. at ¶ 67). Plaintiff alleges that Auberger's " message" to the Town Board on April 26, 2009, was " do as I tell you, or you're out and you receive no political support from me." ( Id. at ¶ 68). Plaintiff alleges that Auberger's actions constituted bribery of the Town Board, in violation of the New York Penal Law § 200.00 and 18 U.S.C. § 1961(1). ( Id.). Plaintiff also alleges that by seeking to improperly influence the Town Board, Auberger and Loszynski committed obstruction of criminal investigations, in violation of 18 U.S.C. § 1510. ( Id. at ¶ 69).
Plaintiff retained attorney John F. Speranza (" Speranza" ) soon after he was suspended. ( Id. at ¶ 74). Prior to charges being filed, Plaintiff was allegedly forced to give " compelled testimony" while in the presence of Speranza, but Speranza was not permitted to act on Plaintiff's behalf. ( Id. at ¶ 75).
Plaintiff alleges that he was " kept in the dark" regarding the reason for his suspension and the nature of the charges until June 24, 2009, when 36 charges were filed and served against him. ( Id. at ¶ ¶ 70-71). The charges included failing to perform various official functions relating to the case of Sergeant Nicholas Joseph, who had a well-publicized motor vehicle accident in June 2008, followed by criminal charges and a conviction after trial; impeding investigations by shredding official documents of the Town of Greece; aiding and abetting Rahn in covering up facts regarding Rahn's missing GPD-issued weapon; and violating GPD rules and regulations by directing Sergeant Richard Downs to speak to a private investigator assisting in the defense of GPD officer Gary Pignato, who was arrested, tried, and convicted after allegedly sexually groping a woman while on duty as an officer. ( Id. at ¶ 72). Plaintiff alleges that all of these charges are " untrue and falsely made, drafted and authored." ( Id. at ¶ 73).
Plaintiff alleges that Speranza submitted an answer to the charges on June 30, 2009, and an amended answer on July 17, 2009, with defenses, including that the charges and specifications against Plaintiff were illegal and unlawful, as the board members did not read, consider, or otherwise deliberate on the charges, and that the vote by the Town Board was not a free exercise of each member's voting authority. ( Id. at ¶ ¶ 76-77).
Following service of the charges, Plaintiff was suspended without pay. ( Id. at ¶ 78). Plaintiff alleges that, while he had a right to a hearing, he decided to retire because defense of the charges would have been lengthy and expensive, and an emotional strain on him and his family. ( Id. at ¶ 79). The Town Board voted on the charges against Plaintiff on June 24, 2009. ( Id. at ¶ 80). Plaintiff alleges that Auberger again pressured the Town Board to vote in favor of the charges and therefore bribed the Town Board, in violation of New York Penal Law § 200.00 and 18 U.S.C. § 1961(1). ( Id.). Plaintiff also alleges that by seeking to improperly influence the Town Board, Auberger and Loszynski committed obstruction of criminal investigations, in violation of 18 U.S.C. § 1510. ( Id. at ¶ 81).
Plaintiff further alleges that on July 28, 2010, Auberger authorized the release of the " Loszynski Report," a report on an investigation of the GPD, which was written and authored by Loszynski at the direction of Auberger. ( Id. at ¶ 35). The report was the product of Loszynski's April 2010 internal investigation of the GPD. ( Id. at ¶ 36). Plaintiff alleges that the investigation occurred at a time when Auberger was running a " hotly contested" reelection campaign for Town Supervisor. ( Id. at ¶ 37). Plaintiff alleges that the report, while largely uncritical of the political leadership in Greece, " cleared Auberger of wrongdoing while attributing responsibility for any and all alleged misconduct to GPD officers, including most particularly Rahn." ( Id. at ¶ 39). Plaintiff alleges that the investigation cost taxpayers over $900,000. ( Id. at ¶ 40). The report stated that several senior GPD officers had engaged in misconduct by deceiving town officials, " holding them at arm's length, fabricating background investigation materials, nurturing a culture of cronyism at the top, and intimidating subordinates who were willing to go along to get along." ( Id. at ¶ ¶ 42-43). Plaintiff alleges that the Loszynski Report was inaccurate in this respect, as Auberger was intimately involved in GPD business, often " encroaching" upon what would be the activities of the Chief of Police, such as hiring, promotion, discipline, and firing decisions. ( Id. at ¶ ¶ 45-46). Plaintiff alleges one instance where he was pressured by Auberger to hire an individual named Gary Pignato for a position with the police department, and Auberger allegedly ordered alterations to Pignato's background investigation. ( Id. at ¶ ¶ 47-48).
Plaintiff alleges that the following statements in the Loszynski Report are false: GPD personnel wrongly shredded subpoenaed documents; a senior GPD officer had his service weapon stolen from his unlocked patrol vehicle parked at his residence; two GPD officers used official vehicles for out-of-state personal trips, and one used a town credit card to purchase gas for that trip; there was systematic abuse of the overtime program by some members of the GPD; and a senior GPD officer failed to comply with the conditions stipulated in a memorandum of understanding pertaining to the GPD's participation in a military surplus program with respect to accountability, usage, and disposition of the property acquired under this program. ( Id. at ¶ ¶ 50-51). Plaintiff alleges that the Loszynski Report, having been mailed to the public and displayed on the internet, constituted repeated mail fraud, pursuant to 18 U.S.C. § 1341, and repeated wire fraud, pursuant to 18 U.S.C. § 1343. ( Id. at ¶ ¶ 52-53).
II. Procedural History
Plaintiff filed his complaint on April 26, 2013, alleging violations of 18 U.S.C. § 1962(c) (RICO's substantive provision)
and 18 U.S.C. § 1962(d) (RICO's conspiracy provision). (Dkt. 1). Plaintiff subsequently filed a RICO case statement as required by L. R. Civ. P. 9, on August 30, 2013. (Dkt. 4). Defendants moved to dismiss the complaint on September 11, 2013. (Dkt. 6). This motion was withdrawn due to Plaintiff's filing of an amended complaint on October 2, 2013. (Dkt. 11 and 12). Defendant Auberger filed a motion to dismiss the amended complaint on October 23, 2013, and the motion was amended to include Defendant Loszynski as a movant on October 31, 2013. (Dkt. 13 and 16). The case was transferred to the undersigned on January 15, 2014. (Dkt. 18). Plaintiff filed a response to the motion to dismiss on March 17, 2014, and Defendants filed a reply on March 27, 2014. (Dkt. 21 and 22). Oral argument was held on May 29, 2014. (Dkt. 24).
I. Legal Standard
A. Defendants' Motion to Dismiss Pursuant to Fed.R.Civ.P. 12(b)(1)
Defendants bring this motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6), for failure to state a claim, and pursuant to Fed.R.Civ.P. 12(b)(1), for lack of subject matter jurisdiction. (Dkt. 13). Defendants argue that dismissal is appropriate under Fed.R.Civ.P. 12(b)(1) because Plaintiff has not alleged RICO standing. (Dkt. 13-2 at 24).
Although Defendants move under Rule 12(b)(1) to dismiss Plaintiff's claims for lack of RICO standing, " RICO standing is not jurisdictional, and therefore . . . a court has original jurisdiction over a RICO claim even if plaintiff's lack standing under the RICO statute." Denney v. Deutsche Bank AG, 443 F.3d 253, 266 (2d Cir. 2006). As the Second Circuit Court of Appeals explained in Lerner v. Fleet Bank, N.A., 318 F.3d 113 (2d Cir. 2003):
[D]espite describing the proximate causation requirement as " RICO standing," such standing is not jurisdictional in nature under Fed.R.Civ.P. 12(b)(1), but is rather an element of the merits addressed under a Fed.R.Civ.P. 12(b)(6) motion for failure to state a claim. RICO standing is sufficiently intertwined with the merits of the action, such that its determination requires an evaluation of the merits of the action and makes any potential distinction between the merits and RICO standing exceedingly artificial.
Id. at 129-30; see also Motorola Credit Corp. v. Uzan, 388 F.3d 39, 55 (2d Cir. 2004) (order of dismissal of plaintiff's RICO claims for lack of standing was " on the merits rather than for lack of subject-matter jurisdiction." ); DeSilva v. N. Shore-Long Island Jewish Health Sys., 770 F.Supp.2d 497, 519 (E.D.N.Y. 2011) (" 'Standing' under RICO, for purposes of a motion to dismiss, is not a jurisdictional concept, but instead is analyzed as a merits issue under Federal Rule of Civil Procedure 12(b)(6)." ); DLJ Mortg. Capital, Inc. v. Kontogiannis, 726 F.Supp.2d 225, 236 n.9 (E.D.N.Y. 2010) (" The Court's dismissal of DLJ's RICO claims for lack of statutory standing, as set forth infra, is therefore pursuant to Rule 12(b)(6), not Rule 12(b)(1)." ). Therefore, the Court evaluates Defendants' RICO standing argument as a determination on the merits pursuant to Fed. R. Civ P. 12(b)(6), rather than a jurisdictional determination under Fed.R.Civ.P. 12(b)(1).
B. Defendants' Motion to Dismiss Pursuant to Fed.R.Civ.P. 12(b)(6)
" 'In considering a motion to dismiss for failure to state a claim under Fed.R.Civ.P. 12(b)(6), a district court must limit itself to facts stated in the complaint or in documents attached to the complaint as exhib
its or incorporated in the complaint by reference.'" Newman & Schwartz v. Asplundh Tree Expert Co., 102 F.3d 660, 662 (2d Cir. 1996) (quoting Kramer v. Time Warner, Inc., 937 F.2d 767, 773 (2d Cir. 1991)). A court should consider the motion " accepting all factual allegations in the complaint and drawing all reasonable inferences in the plaintiff's favor." Ruotolo v. City of New York, 514 F.3d 184, 188 (2d Cir. 2008) (internal quotations and citation omitted). To withstand dismissal, a plaintiff must set forth " enough facts to state a claim to relief that is plausible on its face." Bell A. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). '" A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.'" Turkmen v. Ashcroft, 589 F.3d 542, 546 (2d Cir. 2009) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009)).
" While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitle[ment] to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555 (alteration in original) (internal quotations and citations omitted). Thus, " at a bare minimum, the operative standard requires the plaintiff [to] provide the grounds upon which his claim rests through factual allegations sufficient to raise a right to relief above the ...