United States District Court, S.D. Indiana, New Albany Division
F & J APARTMENTS, LLC, et al. Plaintiffs,
v.
G. ROBERT HALL Individually and in his Official Capacity as Mayor of the City of Charlestown, Indiana, et al. Defendants. MICHAEL A GILLENWATER, Interested Party.
ORDER GRANTING DEFENDANTS' MOTIONS FOR PARTIAL
JUDGMENT ON THE PLEADINGS
SARAH
EVANS BARKER, JUDGE
Now
before the Court are the following motions: (1) Motion for
Judgment on the Pleadings [Dkt. 24] filed by Defendants G.
Robert Hall, M. Anthony Jackson, Eric Vaughn, Ted Little,
Mike Vaughn, Brian Hester, George Roberts, and Ben Ledbetter
(“the City Officials”) in their official
capacities; The City of Charlestown, Indiana; The Charlestown
Board of Public Works and Safety; and The Charlestown,
Indiana, Redevelopment Commission (collectively, “the
City Defendants”); (2) Motion for Judgment on the
Pleadings [Dkt. 28] filed by Defendants Pleasant Ridge
Redevelopment, LLC, Neace Ventures, LLC, Neace Enterprises,
LLC, John Neace, and John Hampton (collectively, “PRR
Defendants”); and (3) Motion to Join PRR
Defendants' Ripeness Defense [Dkt. 32] filed by the City
Defendants. Each of these motions is filed pursuant to Rule
12(c) of the Federal Rules of Civil Procedure and seeks
judgment on the pleadings as to Count 3 of Plaintiffs'
Second Amended Complaint, which alleges a civil RICO
violation. For the reasons detailed below, we GRANT
Defendants' Motions.
Factual
Background
Plaintiffs
are residents of Indiana and Kentucky who are current and
former owners of rental properties in the Pleasant Ridge
neighborhood located within the City of Charlestown, Indiana.
Plaintiffs allege in this action that the City of Charlestown
(“the City”) believed that Pleasant Ridge was in
dire need of redevelopment and, to that end, beginning in
2016, conspired with a private development company, Pleasant
Ridge Redevelopment, LLC (“PRR”), and its
representatives to coerce through extortion Plaintiffs into
selling their real estate to the PRR Defendants below market
value at a price of no more than $10, 000.00 per property.
Specifically,
Plaintiffs allege that the City Defendants forced them to
sell by imposing significant and punitive fines against them
for various code violations-up to $5, 600 per day-and then
agreeing to waive the fines if Plaintiffs sold their
properties to the PRR Defendants. According to Plaintiffs,
although PRR theoretically assumed responsibility for the
daily accumulating fines after the sales, the City agreed to
waive all such fines if PRR agreed to demolish the homes on
the properties at some undetermined point in the future.
Plaintiffs allege that, although most of the homes had not
yet been demolished at the time this action was filed and the
daily fines were continuing to accrue, the City Defendants
had not collected on any of the fines against PRR nor
required PRR to make any of the repairs previously identified
by the City as necessary for the properties to comply with
the City's property maintenance code. Plaintiffs allege
that Defendants conspired and “associated together for
the common purpose of using extortion to acquire all 354
homes located in Pleasant Ridge and redevelop Pleasant Ridge
for the private enrichment of some or all Defendants.”
Sec. Am. Compl. ¶ 168.
Plaintiffs
filed this action on January 19, 2018, alleging that
Defendants' conduct violated Plaintiffs' rights
guaranteed by the United States Constitution and also
constituted illegal racketeering activity under RICO.
Plaintiffs amended their complaint on February 9, 2018 and
again on July 13, 2018. Defendants have all moved for partial
judgment on the pleadings as to Plaintiffs' civil RICO
claim.
Legal
Analysis
I.
Applicable Legal Standard
Federal Rule of Civil Procedure 12(c) permits a party to move
for judgment after the pleadings are closed, but early enough
not to delay trial. We review motions for judgment on the
pleadings under the same standard by which we review motions
to dismiss for failure to state a claim under Rule 12(b)(6).
Buchanan-Moore v. County of Milwaukee, 570 F.3d 824,
827 (7th Cir. 2009); Pisciotta v. Old Nat'l
Bancorp, 499 F.3d 629, 633 (7th Cir. 2007). “Like
Rule 12(b) motions, courts grant a Rule 12(c) motion only if
‘it appears beyond doubt that the plaintiff cannot
prove any facts that would support his claim for
relief.'” N. Indiana Gun & Outdoor Shows,
Inc. v. City of South Bend, 163 F.3d 449, 452 (7th Cir.
1998) (quoting Craigs, Inc. v. General Elec. Capital
Corp., 12 F.3d 686, 688 (7th Cir. 1993)). In determining
the sufficiency of a claim under this standard, the court
considers all allegations in the nonmovant's pleading to
be true and draws such reasonable inferences as required in
the nonmovant's favor. Jacobs v. City of Chi.,
215 F.3d 758, 765 (7th Cir. 2000).
II.
Discussion
A.
The City Defendants' Motion for Judgment on the Pleadings
[Dkt. 24]
The
City Defendants (the municipal defendants and the City
Officials in their official capacities) have moved for
partial judgment on the pleadings on Plaintiffs' civil
RICO claim as set forth in Count 3 of the Second Amended
Complaint on the ground that municipalities cannot be held
liable for such claims. Although the parties have not cited,
and we have not found Seventh Circuit authority directly on
point, Plaintiffs do not dispute that the prevailing position
of other circuit courts as well as district courts in this
circuit support a holding that municipalities are not subject
to liability for civil RICO claims. See, e.g.,
Reyes v. City of Chi., 585 F.Supp.2d 1010, 1014
(N.D. Ill. 2008) (“Defendants are correct in that
municipalities are not liable for civil RICO claims.”)
(collecting cases, including Third and Ninth Circuit
authority); Lathrop v. Juneau & Assocs., Inc.
P.C., 220 F.R.D. 330, 334 (S.D. Ill. 2004)
(“[M]unicipalities are not liable for civil RICO
claims.”).
Plaintiffs
cursorily argue that, because the Seventh Circuit has held
that corporations can be held liable for civil RICO
violations, it would be “logically consistent” to
conclude that a municipality could also be liable for civil
RICO violations. Dkt. 36 at 3. However, tenuous as this
argument appears to be on its face, it has not been
sufficiently developed by Plaintiffs. Accordingly, we
GRANT the City Defendant's Motion for Judgment
on the Pleadings as to Count 3 of Plaintiffs' Complaint.
All civil RICO claims against the City of Charlestown,
Indiana, the Charlestown Board of Public Works and Safety,
and the Charlestown, Indiana Redevelopment Commission, as
well as the civil RICO claims brought against Defendants G.
Robert Hall, M. Anthony Jackson, Eric Vaughn, Ted Little,
Mike Vaughn, Brian Hester, George Roberts, and Ben Ledbetter
in their official capacities are hereby dismissed.
B.
The PRR Defendants' Motion for Judgment on the Pleadings,
Joined by the ...