DT Boring, Inc. v. Chicago Public Building Commission, The et al

Filing 110

Memorandum Opinion and Order signed by the Honorable Robert W. Gettleman on 3/8/2017: Motions to dismiss 73 76 are denied. Defendant Harbour's motion to strike 78 is denied. A joint status report is due by 4/12/2017. Status hearing is set for 4/20/2017 at 9:00 a.m. Mailed notice (gds)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
DT BORING, INC.,

)
)
Plaintiff,
)
v.
)
)
THE CHICAGO PUBLIC BUILDING
)
COMMISSION, HARBOUR CONTRACTORS, )
INC., an Illinois corporation,
)
ENVIRONMENTAL DESIGN
)
INTERNATIONAL, INC., an Illinois corporation, )
and JOHN DIMOS, an individual,1
)
)
Defendants.
)

Case No. 15 C 11222
Judge Robert W. Gettleman

MEMORANDUM OPINION AND ORDER
Plaintiff DT Boring, Inc. (“DT Boring”) filed a ten-count amended complaint against
defendants The Chicago Public Building Commission (“PBC”), Harbour Contractors, Inc.
(“Harbour”), Environmental Design International, Inc. (“EDI”), and John Dimos, alleging that
Harbour, EDI, and Dimos violated the Racketeer Influenced and Corrupt Organizations Act, 18
U.S.C. § 1962 (“RICO”), (Counts I, II, and III), PBC and Harbour engaged in common law fraud
(Counts IV and V), and PBC and Harbour tortiously interfered with contractual relations (Counts
VI, VII, and VIII). Plaintiff also asserts claims for unjust enrichment (Count IX) and promissory
estoppel (Count X) against PBC and Harbour. Harbour filed a motion to strike certain allegations
in the amended complaint and PBC filed two motions to dismiss Counts IV and VI–X of the
amended complaint; one for lack of supplemental jurisdiction and one for failure to state a claim.
For the reasons discussed below, the court denies all of defendants’ motions.

1

A summons was issued to defendant Dimos on February 4, 2016. Service, however, was
never returned executed and Dimos has not filed an appearance in this matter.

BACKGROUND2
I.

Procedural History
The issues and parties before the court are not new. On January 18, 2013, plaintiff filed

an action in this court against essentially identical parties,3 alleging most of the same causes of
action presently before the court. See DT Boring, Inc v. Chicago Pub. Bldg. Comm'n, No. 13-C450 (“DT Boring I”). On October 28, 2013, this court dismissed DT Boring I pursuant to Rule
12(b)(1) for lack of RICO standing because plaintiff was pursuing collateral sources of recovery.
DT Boring, Inc v. Chicago Pub. Bldg. Comm'n, 2013 WL 5835703 (N.D. Ill. Oct. 28, 2013).
After dismissing the RICO claim, the court declined to exercise jurisdiction over plaintiff’s
remaining state law claims.
Plaintiff filed its first complaint in the instant case on December 14, 2015, alleging
counts nearly identical to those currently before the court. Harbour, PCB, and EDI each filed
motions to dismiss for, among other things, failure to exhaust other sources of recovery, and
cited this court’s October 28, 2013, memorandum opinion and order in DT Boring I to support
their argument. The court determined that, because plaintiff had settled its state court case, it
was no longer seeking relief from another source, and that it had sufficiently pled a RICO claim
under 18 U.S.C. § 1962(d). Accordingly, the court denied defendants’ motions with respect to

2

The following facts are taken from plaintiff’s complaint and are assumed to be true for
purposes of defendants’ motions to dismiss. See Murphy v. Walker, 51 F.3d 714, 717 (7th Cir.
1995).
3

Plaintiff’s 2013 complaint named Optimal Energy, LLC, as a defendant and did not
name John Dimos as a defendant. All other parties are identical.
2

Count III.4 Harbour also argued that plaintiff’s RICO claims should be dismissed for failure to
plead fraud with particularity, as required by Rule 9(b), and for failure to comply with Rule 8(a).
The court found Harbour’s arguments unconvincing and denied those motions. Plaintiff’s
amended complaint followed, as did the new round of defendants’ motions.
II.

Facts
Plaintiff is an Illinois corporation that consults on geothermal energy, as well as designs,

drills, and installs geothermal well fields and geothermal heating and ventilation systems for
governmental, commercial, and residential structures. Tom Shelton and his wife own plaintiff in
joint tenancy. In October 2010, Shelton received from Optimal Energy, LLC (“Optimal”) an
abbreviated version of bid documents produced by defendant PBC, a municipal corporation that
controls and oversees the construction and renovation of public buildings in Chicago, for
construction of the 12th District Police Station in Chicago, Illinois (the “12th District Project”).
Optimal subsequently sent Shelton a draft subcontractor’s agreement, under which plaintiff
would act as a subcontractor for Optimal on the 12th District Project, performing the drilling of
88 geothermal boreholes and other related work.
Included with the draft subcontractor agreement were revised plans for the geothermal
portion of the 12th District Project taken from PBC’s bid documents. The revised bid documents
stated that the property on which the police station was to be built had previously contained
Chicago Housing Authority (“CHA”) residential buildings that had been removed from the site
in 2009. In addition, the bid documents stated that “[r]emaining subsurface structures were

4

The court found that plaintiff had not sufficiently pled a claim under §§ 1962(b) and (c),
and granted EDI and Harbour’s motions as to Counts I and II (the individual RICO counts).
3

removed in April 2010 [from the property] as a part of the site preparation for the construction of
the 12th District Police Station.” Plaintiff alleges that it relied on these statements when
preparing and submitting its revised bid to Optimal. Plaintiff subsequently entered into a
contract with Optimal to perform the above referenced work for the 12th District Project.
Optimal in turn entered into a subcontract with defendant Harbour, which served as the general
contractor for the 12th District Project.
Plaintiff alleges that the revised bid documents fraudulently asserted that the “remaining
subsurface structures” from the residential housing on the project site had been removed.
According to the complaint, “numerous, steel rebar-reinforced, concrete foundations from those
[residential] buildings remained buried on the site several feet below grade.” The complaint
further alleges that “buried several feet below ground . . . were numerous asbestos-wrapped
steam pipes.”
Plaintiff alleges that PBC, Harbour, and EDI, which was hired to complete preconstruction environmental testing on the project site, knew about both the underground concrete
obstructions and asbestos prior to PBC preparing the project’s bid documents. Months before
the residential housing buildings were demolished, PBC and EDI allegedly received site plans
from the CHA identifying the asbestos-wrapped steam lines. The complaint alleges that in April
2009, PBC and EDI “agreed that EDI would do environmental test borings around the Project
site looking for contaminated soil, but that the test borings would deliberately avoid coming near
the underground, asbestos-wrapped steam lines.” Plaintiff further alleges that EDI hired a
subcontractor during its environmental testing that identified 36 underground anomalies during
testing on the project site, and therefore recommended further testing on each anomaly. EDI and

4

PBC, however, “agreed that EDI would do test borings near only 17 of the 36 ‘anomalies’ . . . to
avoid ‘discovering’ the underground, asbestos-wrapped steam lines.” According to the
complaint, EDI, “in order to satisfy PBC, a major customer, . . . states whatever is necessary to
protect PBC’s position” with respect to the environmental conditions of PBC’s projects.
A.

Drill Rig Relocation

The complaint alleges that “within days” of beginning work on the 12th District Project
site in May 2011, plaintiff “encountered the first of the underground steel rebar-reinforced
underground obstructions.” After finding the obstruction, plaintiff alleges that Shelton
immediately notified Harbour’s project manager, “explaining that the obstruction had not been
disclosed on any of the bid documents given to Shelton.” Plaintiff alleges that an “on-site
meeting” between Harbour, PBC, and plaintiff then occurred, during which Harbour and PBC
agreed to have plaintiff “relocate its drilling rigs anywhere within a 2-foot radius of the original,
specified location for the borehole.”
According to the complaint, the day after the on-site meeting, Shelton spoke with PBC’s
assistant project manager Andy Horn, who inquired about how much it would cost PBC for
plaintiff to relocate its drilling rigs when it encountered the previously undisclosed underground
obstructions. Shelton told Horn that plaintiff would charge a flat three hours of time at a cost of
$1,650 for each drill rig plaintiff had to relocate, plus the additional cost of removing excess soil.
Horn allegedly agreed to pay plaintiff at this rate. The complaint alleges that on May 26, 2011,
“Shelton received an email over the interstate wires that contained another email, also sent over
the interstate wires, dated May 17th, 2011, and sent from Horn to [James] Harrell [PBC’s project
manager], and other PBC staff members expressly authorizing [plaintiff] to relocate its drilling

5

rigs a maximum of 2 feet in any direction in order to avoid undisclosed, underground
obstructions.”
Plaintiff alleges that in early June 2011 Shelton inquired with Harbour’s project manager,
Sam Rae, as to why plaintiff had not received written field orders from Harbour for the drill rig
relocations. Rae allegedly informed Shelton that “Harbour had not issued any Field Orders
because Harbour had to ‘package’ [plaintiff’s] drill rig relocation costs as change orders with
other subcontractors’ change orders, before submitting them all to the PBC for payment.”
According to the complaint, “Rae told Shelton again that [plaintiff] would be paid for its drill rig
relocation costs, and he also told Shelton to have [plaintiff] continue with its work including
relocating the drill rigs when necessary.” As a result, plaintiff alleges that it continued drilling
the remaining 88 boreholes for the 12th District Project.
The complaint alleges that PBC’s and Harbour’s statements to plaintiff orally authorizing
the drill relocation and agreeing to pay plaintiff for the extra work “were all intentionally false
and fraudulent when made.” Plaintiff alleges that the statements were intended to induce it to
continue drilling the boreholes, but that PBC and Harbour had no intention of paying for the
work. According to the complaint, “Rae, on behalf of Harbour, and Harrell, on behalf of the
PBC, had already made a secret agreement [that] when [plaintiff] encountered the first of the
undisclosed, underground obstructions that the PBC and Harbour would deliberately withhold all
payments for [plaintiff’s] drill rig relocations until [plaintiff] had completed all of its work on the
geothermal portion of the Project . . . in the hope that no payment would be necessary because of
a credit owed to PBC by Optimal.” Plaintiff alleges that “Harbour and the PBC hoped that

6

Optimal’s credit owed to the PBC would fully offset the amount owed to [plaintiff] for the drill
rig relocations so that the PBC would not have to pay [plaintiff] anything” for the extra work.
Unaware of this agreement, plaintiff alleges that it continued to submit timely invoices
for the extra work to Optimal as directed by Rae. “In reality, Rae and Harbour directed
[plaintiff] to submit its invoices to Optimal for transmission to Harbour simply to ensure that
payments for [plaintiff’s] drill rig relocation costs had to pass through Optimal so that those
payments could be offset by Optimal’s credit owed to the PBC.” The complaint alleges that into
September 2011 Harbour continued to assure plaintiff that it would be paid for the extra work,
but that it was still “packaging” plaintiff’s change orders. Specifically, plaintiff alleges that Rae
sent Shelton an email on September 14, 2011, stating that “Harbour was waiting for the
necessary backup and documentation for each change order,” and that it was “Harbour’s opinion
that the additional work was performed, and that the PBC was aware that the work was taking
place.” These statements, plaintiff alleges, were made “to fraudulently induce [it] to continue
working on the Project.”
According to the complaint, plaintiff’s additional costs associated with the undisclosed
obstructions “quickly exceeded the amount of any credit that Optimal owed to the PBC.” As a
result, plaintiff alleges that Harbour began submitting the change orders to PBC, that were then
rejected “with a ‘wink and a nod’ as ‘insufficient.’” The complaint alleges, however, that on
September 21, 2011, during a meeting at Harbour’s headquarters with Harbour project executive
Mark Karaskiewicz, Rae, and two principals from Optimal, Rae “expressly stated that the change
orders had been ‘approved’ by Harrell and were being sent downtown to the PBC for ‘final
approval’ and payment.”

7

B.

Asbestos-Related Downtime

The complaint alleges that in August 2011, while working on the trenches, Shelton
discovered a large pipe encased in wrapping that was later determined might be asbestos. EDI
was subsequently called to the site to examine the piping insulation, concluding before samples
were sent to the lab that the asbestos was non-friable, meaning that it could not move through the
air, and therefore was not dangerous. The area where the pipe was located was cordoned off and
plaintiff was ordered to resume work in a different area of the project. Because only limited
work could be completed in that area, plaintiff alleges that with the exception of Shelton, all of
its crew “had to stand idle.”
On September 1, 2011, Optimal personnel examined the trenches in which plaintiff’s
employees had been working for several weeks, and concluded that they too might contain
asbestos. Plaintiff alleges that Optimal issued a formal Notice of Delay, halting plaintiff’s work
on the project. EDI, however, once again declared that the asbestos was non-friable, informing
Harbour, Optimal, and plaintiff that work on the trenches could continue if plaintiff’s employees
worked downwind. Harbour issued a formal back to work order on September 2, 2011.
Plaintiff alleges that on September 9, 2011, the Occupational Safety and Health
Administration (“OSHA”) conducted a site visit and concluded that friable asbestos was present
in significant quantities on the project site. That same day, Optimal received test results from
samples it had taken, which also showed the presence of friable asbestos. The complaint alleges
that Optimal issued a stop work order that day. Harbour subsequently “agreed that the stop work
order could remain in effect until [ ] abatement measures had been taken to remove the asbestoscontaminated soil.” Following the stop work order, plaintiff alleges that “Shelton repeatedly told

8

Harbour – and specifically Karaskiewicz – that, because [plaintiff] had not been released from
the Project, [it] had to continue paying its employees even while they were unable to work.”
According to the complaint, during a September 21, 2011, meeting at Harbour’s
headquarters, Karaskiewicz inquired about plaintiff’s per diem costs resulting from Harbour’s
decision not to release it from the project. Shelton allegedly reported that it cost plaintiff
approximately $4,200 per day to have its employees and equipment sit idle, which plaintiff
alleges Harbour subsequently agreed to pay. The complaint alleges that plaintiff’s employees
and equipment sat idle from September through November 18, 2011, at which time plaintiff was
terminated from the project. Plaintiff alleges that defendants continued to fraudulently represent,
as late as January 26, 2012, that it would be paid for its extra work and down-time related to the
undisclosed obstructions.
C.

RICO Scheme

The complaint alleges that neither Harbour nor PBC has ever paid plaintiff for the money
owed to it for the extra work associated with the undisclosed underground obstructions or
asbestos-related downtime. As a result of the non-payment, plaintiff alleges that its working
capital was exhausted and it was forced out of business. Plaintiff alleges that defendants’ actions
on the 12th District Project were consistent with a greater fraudulent scheme perpetrated by
defendants. Specifically, the complaint alleges that PBC heads and controls a RICO enterprise
made up of a group of “second-tier” pre-approved general contractors such as Harbour and
“third-tier” minority/women owned subcontractors such as Optimal, as well as consultants like
EDI. According to the complaint, “the goal of the enterprise, through fraud and extortion, is to
benefit the PBC by constructing and/or renovating public buildings . . . at or below their actual

9

construction cost while enriching both the second tier general contractors, and the third tier
minority/women owned subcontractors at the expense of the bottommost project subcontractors.”
The process by which the enterprise allegedly accomplishes this goal begins with PBC
requesting project bids from a group of general contractors, including those that are a part of the
RICO enterprise. The general contractors subsequently request preliminary bids from the thirdtier minority/women owned subcontractors, also a part of the enterprise, who in turn request bids
from the lower-tier subcontractors, such as plaintiff. The lower-tier subcontractors then submit
their bids, with a reasonable profit margin, to the third-tier subcontractors. The second-tier
general contractor, however, demands that the lower-tier subcontractors reduce their bids in
order to be included in the general contractor’s overall bid to PBC. The lower-tier
subcontractors do so by eliminating their own profit margins. The general contractor
subsequently submits its overall proposed bid to PBC, fraudulently leaving out its own profit
margin to ensure that it is the lowest bidder.
Plaintiff alleges that once PBC awards the project to the RICO enterprise general
contractor, the general contractor is tasked with both ensuring that the project is completed at or
below the actual construction cost so as to benefit PBC and regaining its own profit margins that
were intentionally omitted from its bid. To accomplish this, plaintiff alleges that the general
contractor extorts funds and performance from the lower-tier subcontractors by: (a) “refusing to
process change orders approving work performed outside the scope of the original contracts and
subcontracts so that PBC gets the benefit of additional work and materials for free”;
(b) “trumping up phony ‘back charges’ for the subcontractor’s purportedly defective work so the
general contractor can withhold the amount of those fraudulent back charges”; (c) “refusing to

10

pay the subcontractor at all”; and/or (d) “agreeing to pay the retainage, change orders and/or
amounts due, but only if the subcontractor agrees to a ‘buyout’ which is a reduction in the
amount owed to the subcontractor.”
DISCUSSION
I.

Motions to Dismiss
PBC has filed two motions to dismiss Counts IV and VI through X; a motion pursuant to

Rule 12(b)(6), and a motion for lack of supplemental jurisdiction. Although the pleadings are
lengthy and complex, they boil down to one question: whether plaintiff has sufficiently stated its
claim of fraud against PBC. The court answers that question in the affirmative.
A.

Rule 12(b)(6)

When ruling on a Rule 12(b)(6) motion to dismiss, the court accepts the complaint's wellpleaded factual allegations as true and draws all reasonable inferences in the plaintiff's favor.
Sprint Spectrum L.P. v. City of Carmel, Indiana, 361 F.3d 998, 1001 (7th Cir. 2004). The
pleading must describe the claim in sufficient detail to give the defendant fair notice of what the
claim is and the grounds on which the claim rests. Bell Atlantic Corp. v. Twombly, 550 U.S.
544, 555 (2007). The allegations must plausibly suggest that the plaintiff has a right to relief,
raising the possibility above the “speculative level.” Id.
This standard demands that a complaint allege more than legal conclusions or
“[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory
statements.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “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.” Id.

11

The crux of PBC’s motion to dismiss Count IV (common law fraud) is that, “PBC
expressly retained [contractual] liability for unforeseen underground conditions, making the
alleged fraud impossible.” According to PBC, that contractual liability means that it “could not
gain even if it concealed the underground conditions and as a matter of law imposed no
detriment on the plaintiff.” The fatal flaw in PBC’s argument is that it assumes that PBC
intended to honor its contractual obligations. This argument ignores plaintiff’s allegations that it
was fraudulently induced to enter into the contract, and that PBC and Harbour deliberately and
fraudulently prevented plaintiff from exercising its contractual rights that PBC and Harbour had
no intention to honor.
PBC urges the court to follow the reasoning of the Circuit Court of Cook County when it
decided Harbour Contractors, Inc. v. Public Building Commission of Chicago, 2014 CH 16728,
and find that the contract terms that impose liability on PBC for costs associated with unforeseen
underground conditions make the alleged fraud legally and factually impossible.5 The court
declines to do so. In Harbour Contractors, Harbour alleged that PBC knew about the
underground obstructions, but intentionally concealed that knowledge from Harbour, which
caused Harbour to incur substantial construction costs beyond those it considered when it
submitted its bid to PBC for the 12th District Project. There, the court reasoned that there could
be no fraud because PBC accepted liability for costs associated with unforseen underground
conditions, even if PBC intentionally concealed them. Regardless of whether the circuit court’s

5

Plaintiff argues that the court should convert PBC’s Rule 12(b)(6) motion into a Rule 56
Summary Judgment motion because PBC attached documents associated with the circuit court
litigation and excerpts of several contracts to its motion. Because the court need not consult
those documents in denying PBC’s motion, it will not address plaintiff’s argument.
12

reasoning was sound, its decision is inapposite. In the instant case, plaintiff alleges not just that
PBC intentionally and fraudulently concealed the underground obstructions. Plaintiff also
alleges that PBC did so as part of a large conspiracy, along with Harbour, to fraudulently induce
low-tier subcontractors like plaintiff into submitting artificially low bids, and ultimately doing
the “unforeseen” work, all the while knowing that PBC and Harbour had no intention of paying
the subcontractors for it. Given that plaintiff’s fraud claim is premised on its allegations that
PBC entered into the contract intending to defraud plaintiff, PBC’s argument that Count IV
should be dismissed due to plaintiff’s ability to pursue damages through its contractual remedies
is unavailing.
Putting the issues presented to the circuit court aside, plaintiff has sufficiently pled a
fraud claim against PBC. Rule 9(b) requires a plaintiff alleging fraud to satisfy heightened
pleading standards, answering the “who, what, when, where, and how of the fraud.” Camasta v.
Jos. A. Bank Clothiers, Inc., 761 F.3d 732, 737 (7th Cir. 2014). The complaint alleges that PBC,
along with the other defendants, knew about the underground concrete obstructions on the 12th
District Project site prior to plaintiff beginning its work. Specifically, PBC allegedly revised bid
documents to include the following false statement: “[r]emaining subsurface structures were
removed in April 2010 as part of the site preparation work for the construction of the 12th District
Police Station.” Plaintiff further alleges that PBC knew that steel rebar-reinforced concrete
foundations and asbestos-wrapped pipes remained buried several feet below ground, and that
PBC revised the bid documents so that plaintiff would submit an artificially low bid for the work
that it would do on the project. Defendants, including PBC, allegedly knew these obstructions
would require additional work from plaintiff. Plaintiff further alleges that PBC induced this

13

extra work from plaintiff through false representations that plaintiff would be paid for the work,
knowing that it would not. The heightened standard that Rule 9(b) demands is met in the instant
case.
PBC’s argument that Counts VI through X should be dismissed is hinged entirely on
whether the court dismisses Count IV. Because the court declines to do so, PBC’s motion to
dismiss for failure to state a claim is denied in its entirety.
B.

Supplemental Jurisdiction

PBC also argues that plaintiff’s claims against PBC should be dismissed for lack of
supplemental jurisdiction because plaintiff (correctly) does not assert a RICO claim against PBC.
According to PBC, the fact that plaintiff has not alleged a RICO claim against PBC means that
“[t]he Illinois courts are better equipped to handle the plaintiff’s claims against the PBC.” The
court disagrees.
As plaintiff points out, and PBC acknowledges, the reason plaintiff has not asserted a
RICO claim against PBC is that PBC, a municipal corporation, is immune from civil claims
under the RICO Act. See Reyes v. City of Chicago, 585 F. Supp. 2d 1010, 1014 (N.D. Ill.
2008); Pelfresne v. Vill. of Rosemont, 22 F. Supp. 2d 756, 761 (N.D. Ill. 1998). Nevertheless,
PBC argues that the state law claims outnumber and outweigh the federal claims, to which it is
not a party. Although the RICO claims may be outnumbered by the state claims, they are
certainly not outweighed and, in fact, all of the claims “derive from a commun nucleus of
operative fact.” Menard v. City of Chicago, 1999 WL 608716 at *1 (N.D.Ill. Aug. 5, 1999)
(quoting United Mine Workers v. Gibbs, 383 U.S. 715, 725 (1966)). Further, all of plaintiff’s
claims arise out of the same incidents “and would be expected to be tried in the same case.” Id.

14

The evidence required to prove the RICO claim is largely the very same evidence that would be
required to prove the state law claims. And, as PBC recognizes, “supplemental jurisdiction is a
doctrine of discretion.” Id. at *2. The court declines PBC’s invitation to exercise that discretion
to dismiss plaintiff’s state law claims against it. Accordingly, PBC’s motion is denied.
II.

Motion to Strike
Harbour has moved to strike certain allegations in plaintiff’s amended complaint because

they are: (1) wholly immaterial to the present litigation, scandalous and prejudicial to Harbour,
or (2) improperly pled with respect to claims of fraud. As for the second argument, Harbour
acknowledges that the court already rejected it in its June 28, 2016, memorandum opinion and
order. See DT Boring, Inc. v. Chicago Pub. Bldg. Comm'n, 2016 WL 3580756 (N.D. Ill. June
28, 2016). This time around, Harbour attacks plaintiff’s claims made “on information and
belief,” arguing that the Seventh Circuit has held that such claims generally do not satisfy the
heightened pleading standard of Rule 9(b). Cincinnati Life Ins. Co. v. Beyrer, 722 F.3d 939, 948
(7th Cir. 2013). But, as Harbour points out, allegations of fraud based “on information and
belief” are permissible when: “(1) the facts constituting the fraud are not accessible to the
plaintiff and (2) the plaintiff provides the grounds for his suspicions.” Pirelli Armstrong Tire
Corp. Retiree Med. Benefits Trust v. Walgreen Co., 631 F.3d 436, 443 (7th Cir. 2011). The
amended complaint meets those requirements.
Harbour attempts to support its motion by citing to this court’s June 28, 2016, opinion,
which found that detailed allegations that certain Harbour employees made statements on certain
dates satisfied the heightened pleading requirements. It was not, as Harbour appears to argue,
implicit in that ruling that any allegations that were not specifically mentioned by the court

15

would not satisfy the heightened pleading requirements. Indeed, the allegations that Harbour
now objects to were alleged in the first complaint, for the most part verbatim, but were not
attacked by Harbour in its previous motion. The court declines to give Harbour a second bite at
the Rule 9(b) apple. Its motion based on those grounds is denied.
The court also rejects Harbour’s argument that certain allegations in plaintiff’s amended
complaint are immaterial, scandalous, and prejudicial. First, much as with Harbour’s Rule 9(b)
argument, the allegations that it now objects to were included, for the most part verbatim, in the
first complaint. It is unclear to the court why Harbour failed to object to them in its first motion
to dismiss. That aside, the court does not find that the complaint, though verbose, is intended to
confuse the matters at issue, as Harbour alleges.
First, Harbour is mistaken when it claims that the only allegations relevant to this
litigation are those that relate to the construction of the 12th District Police Station. Harbour’s
mistake is premised on its claim that the amended complaint “repeatedly alleges that the 12th
District Project is the only project at issue in this dispute” (emphasis in original). However,
Harbour’s references to the amended complaint do not support this contention, but rather
highlight plaintiff’s claim of a long-standing RICO enterprise. If plaintiff’s allegations were, in
fact, limited to the 12th District Project, the paragraphs Harbour objects to could very well be
considered immaterial, scandalous, and prejudicial. Plaintiff’s allegations are not so limited.
Plaintiff alleges a much broader swath of misconduct than that which allegedly occurred during
the 12th District Project. The amended complaint, though lengthy, is understandably so
considering the allegations it contains. See Pennsylvania Chiropractic Ass'n v. Blue Cross Blue
Shield Ass'n, 2010 WL 1979569, at *5 (N.D. Ill. May 17, 2010) (“In complex cases like the

16

RICO [ ] claims at issue here, a fuller set of factual allegations may be necessary to show that the
plaintiff’s claim is not largely groundless.”) (internal quotation omitted).6
Second, the court finds that plaintiff has largely followed its order “to streamline its
allegations so as to avoid some of the extraneous and unnecessary allegations.” Plaintiff has
managed to cut a substantial number of pages, and extraneous allegations, such that the
“unnecessary clutter” has been removed to properly frame the issues of the case. Because the
court finds that the allegations in the Amended Complaint are not immaterial, scandalous, or
prejudicial, Harbour’s Motion to Strike is denied.
CONCLUSION
For the foregoing reasons, PBC’s motions to dismiss (docs. 73 and 76) are denied.
Harbour’s motion to strike (doc. 78) is denied. Defendants are directed to answer the amended
complaint on or before April 5, 2017. The parties are ordered to submit a joint status report on
this court’s form on or before April 12, 2017. This matter is set for a report on status on
April 20, 2017, at 9:00 a.m.

ENTER:

March 8, 2017

__________________________________________
Robert W. Gettleman
United States District Judge

6

Additionally, this court found that plaintiff’s original complaint, which was nearly
twenty pages longer than its amended complaint, complied with FRCP 8(a). DT Boring, Inc.,
2016 WL 3580756, at *9 n.7.
17