United States District Court, S.D. Texas, Houston Division
MEMORANDUM AND ORDER
KEITH P. ELLISON, UNITED STATES DISTRICT JUDGE
before the Court is Defendants' Motion for Judgment on
the Pleadings (Doc. No. 18). After considering the Motion,
the response thereto, and all applicable law, the Court
determines that the Motion should be granted and the case
remanded to the District Court of Montgomery, Texas.
case began as a writ of mandamus to compel inspection of
corporate documents. Defendant BioPsych Health Systems, Inc.
counterclaimed for breach of confidentiality agreements and
theft of trade secrets. Plaintiff subsequently added
additional parties and claims, including a claim under the
Racketeer Influenced and Corrupt Organizations Act (RICO).
Defendants removed the case to this Court on June 25, 2015 on
the basis of federal question jurisdiction. On February 1,
2017, Defendants filed a Motion for Judgment on the
Pleadings. (Doc. No. 18.)
may hear a party's motion for judgment on the pleadings
after the pleadings are closed. Fed.R.Civ.P. 12(c). The
standard for deciding a Rule 12(c) motion is the same as that
for a Rule 12(b)(6) motion to dismiss for failure to state a
claim. Vanderbrook v. Unitrin Preferred Ins. Co.,
495 F.3d 191, 205 (5th Cir. 2007) (citing Great Plains
Trust Co. v. Morgan Stanley Dean Witter & Co., 313
F.3d 305, 313 n. 8 (5th Cir. 2002)).
to Rule 12(b)(6), a court may dismiss a complaint for
''failure to state a claim upon which relief can be
granted." When considering a Rule 12(b)(6) motion to
dismiss, a court must "accept the complaint's
well-pleaded facts as true and view them in the light most
favorable to the plaintiff' Johnson v. Johnson,
385 F.3d 503, 529 (5th Cir. 2004). "To survive a Rule
12(b)(6) motion to dismiss, a complaint "does not need
detailed factual allegations, ' but must provide the
plaintiffs grounds for entitlement to relief-including
factual allegations that when assumed to be true 'raise a
right to relief above the speculative level.'"
Cuvillier v. Taylor, 503 F.3d 397, 401 (5th Cir.
2007) (citing Bell Atl. Corp. v. Twombly, 550 U.S.
544, 555 (2007)). That is, "a complaint must contain
sufficient factual matter, accepted as true, to 'state a
claim to relief that is plausible on its face.'"
Ashcroft v. Iqbal, 556 U.S. 562, 678 (2009) (quoting
Twombly, 550 U.S. at 570).
order to state a RICO claim, a plaintiff must allege three
elements: "(1) & person who engages in (2)
a pattern of racketeering activity (3) connected to
the acquisition, establishment, conduct, or control of an
enterprise." St. Paul Mercury Ins. Co. v.
Williamson, 224 F.3d 425, 439 (5th Cir. 2000) (emphasis
in original). "A pattern of racketeering activity
requires two or more predicate acts and a demonstration that
the racketeering predicates are related and amount to or pose
a threat of continued criminal activity." Id.
at 441. The RICO statute lists numerous predicate acts,
including various acts of embezzlement and fraud, that
constitute racketeering activity. 18 U.S.C. § 1961(1).
alleges that Defendants committed the following unlawful acts
in violation of RICO:
(a) receiving income derived (directly or indirectly) from a
pattern of racketeering activity to use or invest (directly
or indirectly) any part of such income (or the proceeds of
such income) in the acquisition of any interest in (or the
establishment or operation of) an enterprise, (b) acquiring
or maintaining (directly or indirectly), any interest or
control of an enterprise, or (c) conduct or participate
(directly or indirectly) in the conduct of an
enterprise's affairs through a pattern of racketeering.
First Am. Pet. ¶ 25. Although Plaintiff repeatedly
states that the Defendants engaged in racketeering activity,
he does not specify any predicate acts. To the extent that
Plaintiff alleges unlawful activity in other parts of the
First Amended Petition, the allegations are not specific
enough to satisfy the pleading standard for Rule 12(c). For
example, based on Defendants' alleged refusal to allow
Plaintiff to inspect corporate documents, Plaintiff concludes
that "[a]ll of the evasiveness, lack of transparency,
and secreting corporate assets demonstrates, not only total
lack of ongoing business operations, but unlawful
conduct." Id. ¶ 9. Plaintiff further
alleges that Defendants "made transfers or incurred
obligations without receiving a reasonably equivalent value
in exchange, " resulting in insolvency. Id.
¶ 20. Given the vagueness of Plaintiff s factual
allegations, his RICO claim does not meet the standard for
Rule 12(c) and must be dismissed.
Court exercised federal question jurisdiction over Plaintiffs
RICO claim and supplemental jurisdiction over Plaintiffs
other claims. See 28 U.S.C. § 1367(a). Because
the RICO claim is the only federal question claim in the
First Amended Petition, its dismissal leaves the Court
without original jurisdiction over the remaining claims. In
that circumstance, 28 U.S.C. § 1367(c)(3) provides that
a district court may decline to exercise supplemental
jurisdiction over the remaining claims. District courts enjoy
wide discretion in making that determination. Noble v.
White, 996 F.2d 797, 799 (5th Cir. 1993). In the instant
case, the Court declines to exercise supplemental
jurisdiction over the remaining claims.