Viking Construction Group LLC et al v. Satterfield and Pontikes Construction Inc. et al
ORDER AND REASONS: IT IS ORDERED that 12 Motion to Dismiss for Failure to State a Claim is GRANTED and that all claims asserted against S&P in the above-captioned matter are DISMISSED WITH PREJUDICE. Signed by Judge Lance M Africk on 1/12/2018. (ajn)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
GROUP, LLC ET AL.
SATTERFIELD & PONTIKES
CONSTRUCTION GROUP INC. ET AL.
ORDER & REASONS
Before the Court is an uncontested motion1 to dismiss filed by defendants
Satterfield & Pontikes, LLC (“S&P, LLC”) and Satterfield and Pontikes, Inc. (“S&P,
Inc.) (collectively “S&P”). For the following reasons, the motion is granted.
The claims asserted in this case are rooted in the Louisiana Racketeering Act
(“Louisiana RICO”). Plaintiffs allege that S&P formed an enterprise for the purpose
of securing federally funded construction projects in Orleans Parish by submitting
bids that members of the enterprise knew would be low enough to guarantee
awarding of the contracts but insufficient to adequately and timely complete the work
through subcontractors.2 Plaintiffs assert that, after securing contracts, S&P would
R. Doc. No. 12. S&P filed its motion on December 19, 2017 and set it for submission
on January 10, 2018. Accordingly, plaintiffs’ response was due on January 2, 2018.
See Local Rule 7.5. To date, no response has been filed, and no extension has been
sought. Therefore, the Court may properly assume that plaintiffs have no opposition
to S&P’s motion. Johnson v. Colvin, 2014 WL 4186790, *1 n.2 (Aug. 22, 2014) (Zainey,
J.). Further, the Court may grant S&P’s unopposed, dispositive motion so long as it
has merit. See Braly v. Trail, 254 F.3d 1082 (5th Cir. 2001); John v. State of La., 757
F.2d 698 (5th Cir. 1985).
2 R. Doc. No. 1-1 ¶ 12.
negotiate change orders so as to increase overall payments from the government
while also defrauding subcontractors out of labor, materials, supplies, and funds.3
Plaintiffs further contend that defendant CDW Services, LLC (“CDW”) participated
in this enterprise by conspiring with S&P and by filing materially false public
Plaintiffs filed this lawsuit in state court on October 27, 2017.5 Defendants
filed a timely notice of removal on November 20, 2017, asserting diversity
jurisdiction.6 Plaintiffs then filed a motion to remand on December 15, 2017, arguing
that complete diversity does not exist.7 On December 19, 2017, S&P filed the instant
motion to dismiss, arguing that plaintiffs fail to state a claim upon which relief can
be granted.8 On January 12, 2018, the Court denied plaintiffs’ motion to remand and
dismissed all claims against defendant CDW. The Court now turns to S&P’s motion
to dismiss, to which plaintiffs have not responded.
Id. at ¶ 34.
6 R. Doc. No. 1.
7 R. Doc. No. 9-1.
8 R. Doc. No. 12.
Rule 12(b)(6) of the Federal Rules of Civil Procedure permit a district court to
dismiss a complaint, or any part of it, when a plaintiff has not set forth well-pleaded
factual allegations that would entitle him to relief. See Bell Atl. Corp. v. Twombly,
550 U.S. 544, 555 (2007); Cuvillier v. Taylor, 503 F.3d 397, 401 (5th Cir. 2007). A
plaintiff’s factual allegations must “raise a right to relief above the speculative level.”
Twombly, 550 U.S. at 555. In other words, 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. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570)).
A facially plausible claim is one where “the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the defendant is liable for the
misconduct alleged.” Iqbal, 556 U.S. at 678. If the well-pleaded factual allegations
“do not permit the court to infer more than the mere possibility of misconduct,” then
“the complaint has alleged—but it has not ‘show[n]’—‘that the pleader is entitled to
relief.’” Iqbal, 556 U.S. at 679 (quoting Fed. R. Civ. P. 8(a)(2)) (alteration in original).
In assessing the complaint, the Court must accept all well-pleaded factual
allegations as true and liberally construe all such allegations in the light most
favorable to the plaintiff. Spivey, 197 F.3d at 774; Lowrey v. Tex. A&M Univ. Sys.,
117 F.3d 242, 247 (5th Cir. 1997). Where “the complaint ‘on its face show[s] a bar to
relief,’” then dismissal is the appropriate course. Cutrer v. McMillan, 308 Fed. App’x.
819, 820 (5th Cir. 2009) (quoting Clark v. Amoco Prod. Co., 794 F.2d 967, 970 (5th
To state a valid civil claim under Louisiana RICO, a party must show that (1)
a person engaged in (2) a pattern of racketeering activity (3) connected to the
acquisition, establishment, conduct, or control of an enterprise.9 Brown v. Protective
Life Ins. Co., 353 F.3d 405, 407 (5th Cir. 2003). The term “pattern of racketeering
engaging in at least two incidents of racketeering activity
that have the same or similar intents, results, principals,
victims, or methods of commission or otherwise are
interrelated by distinguishing characteristics and are not
isolated incidents, provided at least one of such incidents
occurs after August 21, 1992, and that the last of such
incidents occurs within five years after a prior incident of
La. Rev. Stat. 15:1352(C). “Racketeering activity” means “committing, attempting to
commit, conspiring to commit, or soliciting, coercing, or intimidating another person
to commit any crime that is punishable under” one of 65 specified Louisiana criminal
statutes. La. Rev. Stat. 15:1352(A)(1)–(65).
S&P argues that plaintiffs have failed to state a claim upon which relief can be
granted, as all of plaintiffs’ Louisiana RICO claims are time-barred. Louisiana RICO
is subject to a five-year prescriptive period. La.Rev.Stat. § 15:1356(H); Ames v. Ohle,
“Because of the parallel between [federal] RICO and Louisiana's [RICO] statute,
federal decisions in this area are persuasive.” State v. Touchet, 759 So.2d 194, 197
(La. Ct. App. 3d Cir. 2000) (citing State v. Nine Sav. Accounts, 553 So.2d 823 (La.
97 So.3d 386, 391 (La. Ct. App. 4th Cir. 2012). “Prescription begins to run against a
claimant when he obtains actual or constructive knowledge of facts indicating a cause
of action.” Ames, 97 So.3d at 394 (citing Barbe v. Am. Sugar Refining, Inc., 83 So.3d
75, 83 (La. Ct. App. 4th Cir. 2011)). “Constructive knowledge of facts indicating a
cause of action is whatever notice is enough to excite attention and put the injured
party on guard and call for further inquiry.” Id. Likewise, the Fifth Circuit “has
adopted an ‘injury discovery rule,’ whereby ‘a civil RICO claim accrues when the
plaintiff discovers, or should have discovered, the injury.’” Joseph v. Bach &
Wasserman, 487 Fed. App’x 173, 176. “It is discovery of the injury, and not other
elements of a RICO claim, that starts the limitations period running.” Id. (citing
Rotella v. Wood, 528 U.S. 549, 556 (2000)). This injury discovery rule applies to
Louisiana RICO claims. See Farmer v. D&O Contractors, Inc., 640 Fed. App’x 302,
304 n.3 (5th Cir. 2016) (“Both [the federal and Louisiana RICO] limitations periods
begin to run when a plaintiff has knowledge or constructive knowledge of the injury
giving rise to a cause of action.”).
Further, “consistent with, and based on, the ‘injury discovery’ rule,”
racketeering claims involving a string of separate injuries are subject to a “separate
accrual” rule. Love v. Nat’l Med. Enter., 230 F.3d 765, 775 (5th Cir. 2000). This rule
“allows a civil RICO claim to accrue for each injury when the plaintiff discovers, or
should have discovered, that injury.” Id. at 773. Accordingly, when a RICO claim
involves alleged racketeering activity that occurred both inside and outside the
limitations period, recovery is allowed “for injury caused by the commission of a
separable, new predicate act within the limitations period.” Id.
Under the separate accrual rule, however, a plaintiff is not permitted to “use
an independent, new predicate act as a bootstrap to recover for injuries caused by
other earlier predicate acts that took place outside the limitations period.”
(quoting Klehr v. A.O. Smith Corp., 521 U.S. 179, 190 (1997)). Stated another way, a
plaintiff may only recover for racketeering injuries discovered or discoverable within
the limitations period. See Jaso v. Coca Cola Co., 435 Fed. App’x 346, 355 (5th Cir.
2011) (holding, in a case involving alleged racketeering activity spanning from 1994
to 2010, that even if plaintiff knew of RICO injuries in 1994, he could still recover for
injuries caused by racketeering activity that took place within the limitations period);
see also Bingham v. Zolt, 66 F.3d 553, 560 (2d Cir. 1995) (“As long as separate and
independent injuries continue to flow from the underlying RICO violations—
regardless of when those violations occurred—plaintiff may wait indefinitely to sue,
but may then win compensation only for injuries discovered or discoverable within
[the limitations period], together, of course, with any provable future damages.”).
Plaintiffs filed their state court petition on October 27, 2017. Therefore, any
claims regarding injuries arising before October 27, 2012 about which plaintiffs had
actual or constructive knowledge are prescribed.
Plaintiffs’ state court petition alleges that the defendants’ RICO enterprise
began on November 5, 2009 and ended on October 30, 2012.10 All of plaintiffs’ alleged
R. Doc. No. 1-1 ¶ 13.
injuries, however, were sustained long before October 27, 2012, and plaintiffs had
actual or constructive knowledge of those injuries prior to that time.
Plaintiff Perle’s injury dates back to 2011.11 According to plaintiffs’ state court
petition, S&P received a construction contract and provided $7.3 million in bonds for
the project. The contract and bonds were then filed into the mortgage records of the
Parish of Orleans. Soon after, S&P subcontracted a portion of the work required on
the project to CDW, who in turn subcontracted with plaintiff Perle. Ultimately,
plaintiffs allege, CDW failed to pay some of Perle’s invoices, leading Perle to file a
lien in the mortgage records.
Subsequently, CDW filed a verified petition for summary proceeding in the
Civil District Court for the Parish of Orleans in order to remove the lien filed by Perle.
This petition allegedly contained materially false statements—namely, that CDW
never had any subcontract or contract of any kind with Perle and that Perle had never
been a subcontractor or otherwise provided labor for CDW on the project.
Additionally, an S&P representative evidently testified on behalf of CDW at a hearing
on the petition.
Plaintiffs allege that CDW’s petition constitutes racketeering activity, as it is
a false public record filed in violation of Louisiana Revised Statute 14:133.12
even assuming this filing constitutes racketeering activity for Louisiana RICO
Id. ¶¶ 15–37.
R. Doc. No. 9-1, at 6.
purposes, CDW’s petition was filed on March 22, 2011, well outside the five-year
prescriptive period. Further, plaintiff Perle obviously knew of the injury that resulted
from the petition and the legal proceedings surrounding it. Indeed, as part of those
proceedings, Perle filed a reconventional demand for concursus and damages in the
Civil District Court for the Parish of Orleans on May 12, 2011, a demand that
included virtually identical allegations to the ones alleged here.
Similarly, plaintiff Hall Collums Construction’s (“HCC”) stated injury occurred
in early 2010.13 HCC claims that it had an agreement with S&P to provide work on
a Jackson Barracks project. HCC evidently began work on site demolition on March
16, 2010. It worked for “several weeks” before submitting a payment request to S&P.
The only injury HCC asserts occurred in 2010, when it was supposedly not paid the
amount it was owed. HCC was clearly aware of this injury, as it had submitted an
invoice for services rendered and billed, an invoice S&P allegedly refused to pay.
Additionally, HCC hired legal counsel, who eventually managed to obtain for HCC
an “unconditional tender of half of what was owed.”14
With respect to plaintiff Viking, the pertinent injury appears to have occurred
on July 25, 2012, when an attorney for S&P allegedly threatened to report Viking’s
owner for federal payroll fraud, somehow preventing him from testifying and
R. Doc. No. 1-1 ¶¶ 38–56.
Id. ¶ 55.
“presenting his claim” in an arbitration proceeding.15 Viking further claims that S&P
ultimately did report Viking for payroll fraud. Viking fails to specify exactly what
type of injury it suffered at the hands of S&P or how any of S&P’s conduct with respect
to it constitutes racketeering activity. In any event, however, S&P’s conduct took
place outside the prescriptive period, and Viking knew of any injuries S&P’s conduct
may have caused it at that time. Indeed, Viking’s owner, in light of the July 2012
threat, refrained from testifying in the arbitration proceeding, and Viking apparently
retained counsel to defend against the payroll fraud charge.
Finally, plaintiffs Educational Electronics Corporation (“EEC”), Novo
Communications, LLC (“Novo”), and Tom Branighan, Inc. (“TBI”) trace their injuries
back to a project at L.B. Landry High School.16 In connection with that project, EEC
was contracted by TBI to install special systems. EEC installed the fire alarm,
intercom, gymnasium, and cafeteria sound systems; security camera systems; and
data, television, and phone wiring. EEC hired Novo to assist with the data, television,
and phone components of this work. S&P was the general contractor on the project
and allegedly “forced” a quality control representative on the subcontractors, over the
objections of TBI and EEC. S&P purportedly threatened to “back charge EEC, TBI,
and Novo a substantial amount at [its] discretion if they didn’t shut up and pay” the
quality control representative. EEC, TBI, and Novo do not specify exactly how this
Id. ¶¶ 61–66.
Id. ¶¶ 67–76.
conduct harmed them. Nevertheless, they were aware of any injury the conduct may
have caused. Not only did they “report” the “scheme” in a 2011 state court lawsuit,
but EEC notified the Federal Bureau of Investigation of the allegations “months
In each of the aforementioned instances, the ostensibly injured plaintiffs
knew or should have known of their injuries prior to October 27, 2012.17 Hence,
Plaintiffs’ lengthy state court petition identifies only a single instance of
alleged racketeering activity that took place after October 27, 2012. The petition
states that on October 30, 2012, S&P, LLC filed a “Plan of Short Form Merger” with
the Louisiana Secretary of State representing that S&P, LLC was to become a wholly
owned subsidiary of S&P, Inc. Plaintiffs contend that this action constitutes the filing
of a false public record in violation of Louisiana Revised Statute 14:133. The filing is
false, plaintiffs claim, because the relevant documents were signed by George
Pontikes (“Pontikes”), who, having previously transferred his membership interest in
S&P, LLC, did not have authority to enter into the merger.
Under the injury discovery rule and the corollary separate accrual rule, this
purportedly defective merger is the only relevant conduct for which plaintiffs could
possibly recover. Indeed, it is the only racketeering activity alleged to have occurred
within five years of the plaintiffs bringing suit, and the only activity that could have
injured the plaintiffs within that prescriptive period. Yet plaintiffs have failed to
identify, and the Court cannot discern, any injury attributable to the merger.
Even assuming that the documents signed by Pontikes and filed by S&P suffice
to establish a criminal violation for filing false public records, plaintiffs do not allege
any facts that show how the filing has damaged them in any way. Rather, as S&P
argues, it appears that “[p]laintiffs are relying upon the merger (which in no way
affected them) to salvage their right to pursue wholly unrelated claims . . .” This they
cannot do. See Sedima, S.P.R.L. v. Imrex Co., Inc., 473 U.S. 479, 496 (1985) (A RICO
“plaintiff only has standing if, and can only recover to the extent that, he has been
injured in his business or property by the conduct constituting the violation.”); see
also Landry v. Airline Pilots Ass’n Int’l AFL-CIO, 892 F.2d 1238, 1260–61 (5th Cir.
1990) (“[T]he acts of sabotage are not actionable because the pilots did not allege or
show that they sustained any injury as a result.”).
plaintiffs’ Louisiana RICO claims are prescribed and must be dismissed. 18
IT IS ORDERED that S&P’s motion to dismiss is GRANTED and that all
claims asserted against S&P in the above-captioned matter are DISMISSED WITH
New Orleans, Louisiana, January 12, 2018.
LANCE M. AFRICK
UNITED STATES DISTRICT JUDGE
Because the Court concludes that all of plaintiffs’ claims are prescribed, it need not
address S&P’s other arguments regarding plaintiffs’ substantive failure to plead a
cause of action under Louisiana RICO.
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