MICHELLE'S RESTAURANT OF GEORGETOWN INC et al v. ADVANCED DISPOSAL SERVICES SOUTH et al

Filing 14

ORDER granting in part and denying in part 4 Motion to Dismiss; denying 5 Motion to Remand. Defendants' alternative motion for a more definite statement is granted, and Plaintiffs shall file their amended complaint on or before March 24, 2014. Ordered by U.S. District Judge CLAY D LAND on 03/03/14 (bsh)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
COLUMBUS DIVISION
MICHELLE’S RESTAURANT OF
*
GEORGETOWN, INC., and THE
COMMUNITY CORNER d/b/a DISCOUNT *
ZONE,
*
Plaintiffs,
*
vs.
*
ADVANCED DISPOSAL SERVICES,
INC., and ADVANCED DISPOSAL
*
SERVICES SOLID WASTE SOUTHEAST,
INC.,
*
Defendants.

CASE NO. 4:13-CV-488 (CDL)

*
O R D E R

Plaintiffs

contracted

disposal services.

with

Defendants

for

solid

waste

Their relationship soured, and Plaintiffs

now maintain that Defendants overcharged them.

To remedy this

perceived wrong, Plaintiffs filed a putative class action in
state

court

alleging

claims

under

the

Georgia

Racketeer

Influenced and Corrupt Organizations Act, O.C.G.A. § 16-14-1 et
seq. (“Georgia RICO Act”).

Plaintiffs also assert claims for

trespass, unjust enrichment, and breach of contract.

Plaintiffs

seek damages and injunctive relief for themselves and others who
are similarly situated.
this

Court

basing

Defendants timely removed the action to

federal

jurisdiction

Fairness Act, 28 U.S.C. § 1332(d) (“CAFA”).

on

the

Class

Action

Plaintiffs now move to remand this action to state court,
arguing

that

the

amount

in

controversy

does

not

exceed

$5,000,000 jurisdictional amount required under CAFA.

the

In the

alternative, they seek to stay the action while they conduct
jurisdictional discovery.

Defendants respond that the present

record clearly establishes that the jurisdictional amount has
been met and that Plaintiffs’ motion to remand should be denied.
Defendants seek dismissal of Plaintiffs’ injunctive relief claim
for lack of standing and dismissal of Plaintiffs’ RICO claim for
failure to plead the claim with the requisite particularity.
For the following reasons, Plaintiffs’ motion to remand (ECF No.
5) is denied, Defendants’ motion to dismiss Plaintiffs’ claim
for

injunctive

relief

is

granted,

and

Defendants’

dismiss Plaintiff’s RICO claim (ECF No. 4) is denied.

motion

to

The Court

does order Plaintiffs to restate their RICO claim with more
particularity.
FACTUAL BACKGROUND
Defendants

provide

solid

individuals and businesses.

waste

disposal

services

to

Plaintiffs Michelle’s Restaurant of

Georgetown, Inc. and the Community Corner d/b/a Discount Zone
are customers of Defendants.

Plaintiffs and Defendants entered

into form contracts that establish a monthly service rate for
Defendants’ services.
Defendants

charge

In addition to the monthly service rate,
and

collect

2

a

“fuel

surcharge,”

a

“fuel/environmental fee,” and “administration fees.”

Plaintiffs

base their RICO claim on the collection of these additional
fees.

Plaintiffs

further

allege

that

Defendants

illegally

altered the terms of the agreements between the parties, and
they

seek

to

enjoin

Defendants

from

enforcing

these

terms.

Compl. ¶ 28, ECF No. 1-2.
DISCUSSION
I.

Motion to Remand or, in
Jurisdictional Discovery

the

Alternative,

Motion

for

Defendants removed this class action asserting that federal
jurisdiction

exists

certain

class

exceeds

the

under

actions
sum

§ 1332(d)(2).

or

CAFA,

“in

which

which

value

the

of

allows

for

matter

in

$5,000,000.”

removal

of

controversy
28

U.S.C.

Plaintiffs seek remand arguing that Defendants

have failed to establish the jurisdictional amount.

The burden

of establishing federal jurisdiction is on the removing party.
Pretka v. Kolter City Plaza II, Inc., 608 F.3d 744, 752 (11th
Cir. 2010).

If “the plaintiff has not pled a specific amount of

damages, the removing defendant must prove by a preponderance of
the

evidence

that

jurisdictional
omitted).

amount

requirement.”

in
Id.

controversy
(internal

exceeds

quotation

the
marks

The removing party may use its own evidence, such as

declarations
amount.

the

or

affidavits,

to

establish

the

jurisdictional

Id. at 768, 771 (concluding that in cases arising under

3

the first paragraph of § 1446(b), “the evidence the defendant
may use to establish the jurisdictional facts is not limited to
that which it received from the plaintiff or the court.”).
In

support

of

removal,

Defendants

produced

evidence

demonstrating that they have “recognized revenues” attributable
to the fees that Plaintiffs challenge in excess of $5,000,000.00
during the time period alleged in the Complaint.

Notice of

Removal ¶ 21, ECF No. 1; Arnold Aff. ¶ 10, ECF No. 3.

Randy

Arnold, “the Senior Vice President - Operations for ADS South
and ADS Solid Waste Southeast” states in his affidavit that “ADS
South’s subsidiaries’ business units recognized revenues [well
in excess of $5,000,000] in fuel surcharges, fuel/environmental
fees, and administration fees.”

Arnold Aff. ¶ 10.

Mr. Arnold

provided a breakdown showing the recognized revenues from each
fee.

Id.

Defendants have therefore shown by a preponderance of

the evidence that the amount in controversy exceeds $5,000,000
and

that

the

other

requirements

for

federal

jurisdiction

pursuant to CAFA have been met.
Plaintiffs argue that “recognized revenues” should not be
considered in determining the amount in controversy.

Instead,

Plaintiffs contend that the amount in controversy is the amount
of fees that the putative class members have actually “paid.”
Plaintiffs maintain that it is sheer speculation as to whether
“recognized revenues” is the same thing as “fees paid.”

4

The

Court finds this linguistic argument unpersuasive.
that

the

amount

in

controversy

Plaintiffs’ point of view.

must

be

It is true

determined

from

the

Ericsson GE Mobile Commc’ns, Inc. v.

Motorola Commc’ns & Elecs., Inc., 120 F.3d 216, 219 (11th Cir.
1997).

But the revenues Defendants received from the fees paid

is exactly what Plaintiffs have put in controversy in this case,
and Defendants have established that amount to be in excess of
$5,000,000.

Accordingly,

the

jurisdictional

amount

is

satisfied, and Plaintiffs’ motion to remand is denied.
II.

Motion to Dismiss
A.

Motion to Dismiss Plaintiffs’ Claim for Injunctive
Relief Pursuant to Federal Rule of Civil Procedure
12(b)(1)

Plaintiffs allege that Defendants “altered the terms of the
written service agreement entered into between Plaintiffs and
[Defendants] . . . by implementing an Arbitration Agreement,
Jury Trial Waiver, And Class Action Waiver Clause.”
¶ 28.

According

to

Plaintiffs,

these

alterations

unlawful and unauthorized change of terms.”

Id.

Compl.
are

“an

Plaintiffs

seek to enjoin Defendants from “enforcing and implementing th[e]
agreement.”

Id.

¶

49.

Curiously,

Plaintiffs

make

this

injunctive relief claim even though the alleged alterations to
their agreement do not apply to them.

Because these changes do

not apply to Plaintiffs, Defendants argue that Plaintiffs lack
standing to assert these claims for injunctive relief.

5

And they

seek

dismissal

of

jurisdiction.
Inc.,

524

these

claims

for

lack

of

subject

matter

See Stalley v. Orlando Reg’l Healthcare Sys.,

F.3d

1229,

1232

(11th

Cir.

2008)

(per

curiam)

(“Because standing is jurisdictional, a dismissal for lack of
standing has the same effect as a dismissal for lack of subject
matter jurisdiction under Fed. R. Civ. P. 12(b)(1).”) (internal
quotation marks omitted).
Standing requires a plaintiff to “have suffered an ‘injury
in fact’—an invasion of a legally protected interest which is
(a)

concrete

imminent.”
(1992)

and

particularized

.

.

.

and

(b)

actual

or

Lujan v. Defenders of Wildlife, 504 U.S. 555, 560

(internal

quotation

marks

omitted).

“The

‘injury-in-

fact’ demanded by Article III requires an additional showing
when injunctive relief is sought.
plaintiff

seeking

injunctive

In addition to past injury, a

relief

must

show

a

sufficient

likelihood that he will be affected by the allegedly unlawful
conduct in the future.”

Houston v. Marod Supermarkets, Inc.,

733 F.3d 1323, 1328 (11th Cir. 2013) (internal quotation marks
omitted).

Along with the “injury-in-fact” requirement, there

must be a “casual connection between the injury and the conduct
complained of” and “it must be likely, as opposed to merely
speculative, that the injury will be redressed by a favorable
decision.”

Lujan, 504 U.S. at 560-61 (internal quotation marks

omitted).

6

The present record establishes that Plaintiffs opted out of
the

amended

terms

which

form

the

basis

of

their

injunctive

relief claims by timely objecting to them in writing.
Mot. to Dismiss 2, ECF No. 4.

Defs.

Plaintiffs do not dispute that

they timely opted out and are not bound by those terms.
Resp. to Defs. Mot. To Dismiss 3, ECF No. 7.

Pls.

It is therefore

difficult to discern how they have suffered an injury-in-fact
and how they are likely to suffer future injury as a result of
the amended terms that do not apply to them.

They argue that

the mere sending of the proposed amendments by Defendants caused
a sufficient injury for purposes of standing.
Mot. to Dismiss 3, ECF No. 7.

Pls. Resp. to

The Court is unconvinced.

The

mere receipt of the proposed amendments does not rise to the
level of a concrete injury sufficient to support standing.

Even

if the receipt of the proposed amendments were an injury-infact, Plaintiffs have not shown that it is likely they will be
injured

in

the

future.

Moreover,

they

have

not

shown

how

enjoining Defendants from enforcing the amendments would redress
their

alleged

injury.

Defendants

agree

that

the

challenged

amendments do not apply to Plaintiffs, and no injunction is
necessary to confirm that.

Plaintiffs lack standing to pursue

their injunctive relief claims, and therefore, those claims must
be dismissed.

7

B.

Motion to Dismiss Plaintiffs’ Georgia RICO Claim
Pursuant to Federal Rules of Civil Procedure 12(b)(6)
and 9(b)

Defendants

contend

that

Plaintiffs

have

not

pled

their

Georgia RICO claim with sufficient specificity, and therefore,
it should be dismissed pursuant to Rules 12(b)(6) and 9(b).

For

purposes of this motion to dismiss, the Court accepts as true
all facts set forth in Plaintiffs’

complaint and limits

its

consideration to the pleadings and exhibits attached thereto.
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007); Wilchombe
v. TeeVee Toons, Inc., 555 F.3d 949, 959 (11th Cir. 2009).

“To

survive a motion to dismiss, a complaint must contain sufficient
factual matter, accepted as true, to ‘state a claim to relief
that is plausible on its face.’”
662,

678

(2009)

(quoting

Ashcroft v. Iqbal, 556 U.S.

Twombly,

550

U.S.

at

570).

The

complaint must include sufficient factual allegations “to raise
a right to relief above the speculative level.”
U.S. at 555.

“[A] formulaic recitation of the elements of a

cause of action will not do[.]”
must

contain

expectation

Twombly, 550

factual
that

allegations

discovery

will

Id.

Although the complaint

that
reveal

“raise

a

evidence

reasonable
of”

the

plaintiff’s claims, id. at 556, “Rule 12(b)(6) does not permit
dismissal of a well-pleaded complaint simply because ‘it strikes
a savvy judge that actual proof of those facts is improbable,’”

8

Watts v. Fla. Int’l Univ., 495 F.3d 1289, 1295 (11th Cir. 2007)
(quoting Twombly, 550 U.S. at 556).
In

addition

to

the

Rule

12(b)(6)

plausibility

standard,

civil RICO claims predicated upon fraud must meet the heightened
pleading requirements of Federal Rule of Civil Procedure 9(b).
See Ambrosia Coal & Constr. Co. v. Pages Morales, 482 F.3d 1309,
1316 (11th Cir. 2007) (affirming dismissal of federal civil RICO
claim for failing to meet Rule 9(b) standards).1

Under Rule

9(b), a complaint sounding in fraud must allege the following if
the

information

is

reasonably

ascertainable

at

the

time

the

complaint is filed: “(1) the precise statements, documents, or
misrepresentations made; (2) the time and place of and person
responsible for the statement; (3) the content and manner in
which the statements misled the Plaintiffs; and (4) what the
Defendants gained by the alleged fraud.”

Id. at 1316-17.

Plaintiffs allege that Defendants committed violations of
Georgia RICO by engaging in an enterprise of unlawful activity
for pecuniary gain.
makes

it

“unlawful

Compl. ¶¶ 30-39.
for

any

person,

The Georgia RICO statute
through

a

pattern

of

racketeering activity or proceeds derived therefrom, to acquire

1

“Because Georgia’s RICO statutes are essentially identical to the
federal RICO statutes,” analysis of a Georgia RICO claim tracks that
of a federal RICO claim. See Morast v. Lance, 807 F.2d 926, 933 (11th
Cir. 1987) (analyzing and dismissing a federal RICO claim and then
affirming dismissal of a Georgia RICO claim without analysis “because
Georgia’s RICO statutes are essentially identical to the federal RICO
statutes.”).

9

or

maintain,

directly

or

indirectly,

any

interest

personal property of any nature, including money.”
16-14-4(a).

in

.

.

.

O.C.G.A. §

Plaintiffs allege that Defendants engaged in the

“racketeering

activities”

of

theft

by

deception, mail fraud, and wire fraud.

taking,

theft

Compl. ¶ 34.

by

Theft by

deception, mail fraud, and wire fraud are fraud-based claims
that must meet the requirements of Rule 9(b).
Having reviewed Plaintiffs’ Complaint, the Court finds that
Plaintiffs have not pled their fraud based RICO claims with
sufficient

particularity.

They

have

lumped

many

of

the

allegations together, and it is difficult to ascertain from the
allegations “who” did “what” “where” and “when.”

See Brooks v.

Blue Cross & Blue Shield of Fl., Inc., 116 F.3d 1364, 1381 (11th
Cir. 1997) (per curiam) (finding civil RICO claims inadequately
pled pursuant to Rule 9(b) when “plaintiffs have simply lumped
together all of the Defendants in their allegations of fraud.”)
Rather

than

dismiss

the

Complaint,

the

Court

orders

that

Plaintiffs file a more specific amended Complaint on or before
March 24, 2014.

See Friedlander v. Nims, 755 F.2d 810, 813

(11th Cir. 1985) (“[A] district court should give a plaintiff an
opportunity to amend his complaint rather than dismiss it when
it appears that a more carefully drafted complaint might state a
claim upon which relief could be granted.”)

10

Defendants’ motion

to dismiss is denied, but their alternative motion for more
definite statement is granted.
CONCLUSION
Plaintiffs’
Defendants’

Motion

Motion

to

to

Remand

Dismiss

(ECF

(ECF
No.

No.
4)

5)

is

is

denied.

granted

as

to

Plaintiffs’ injunctive relief claim and denied as to Plaintiffs’
other

claims.

Defendants’

alternative

motion

for

a

more

definite statement is granted, and Plaintiffs shall file their
amended complaint on or before March 24, 2014.

The previous

stay of discovery by the Court pending a ruling on the Motion to
Remand is hereby lifted, and a Rule 16/26 Order shall be issued.

IT IS SO ORDERED, this 3rd day of March, 2014.
S/Clay D. Land
CLAY D. LAND
UNITED STATES DISTRICT JUDGE

11