Trier et al v. Genesee County et al

Filing 46

ORDER granting 26 plaintiffs' Motion to Amend Complaint and denying defendants' Motion requesting that this court enter an order requiring plaintiffs to complete and file a civil Rico case statement 19 20 Signed by District Judge George Caram Steeh. (MBea)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

WILLIAM TRIER et al.,

CASE NO. 2:17-CV-10236
HON. GEORGE CARAM STEEH

Plaintiffs,
v.
GENESEE COUNTY et al.,
Defendants.
________________________/
ORDER GRANTING PLAINTIFFS’ MOTION TO AMEND COMPLAINT
(Doc. 26) AND DENYING DEFENDANTS’ MOTION REQUESTING
THAT THIS COURT ENTER AN ORDER REQUIRING PLAINTIFFS TO
COMPLETE AND FILE A CIVIL RICO CASE STATEMENT (Doc. 20)
I. INTRODUCTION
Plaintiffs are Genesee County process servers who claim that
defendants Genesee County, Sheriff Robert Pickell, Scott Hope, Charissa
Hope, and Allen & Hope Process Serving Management Co. Inc. extorted
them in violation of the Racketeer Influenced and Corrupt Organizations
Act (RICO) 18 U.S.C. § 1961 et seq. Plaintiffs also claim that their First
Amendment rights were violated under 42 U.S.C. § 1983 when Defendants
allegedly refused to deputize Plaintiffs in retaliation for their support of
Pickell’s political opponent.

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This matter comes before the court on two motions: first, Plaintiffs’
Motion to Amend the Complaint (Doc. 26) and second, Defendants’ Motion
Requesting that this Court Enter an Order Requiring Plaintiffs to Complete
and File a Civil RICO Case Statement. (Doc. 20). This matter is decided
without a hearing pursuant to Local Rule 7.1(f)(2). For the reasons stated
below, Plaintiffs’ Motion to Amend the Complaint is GRANTED and
Defendants’ Motion Requesting that this Court Enter an Order Requiring
Plaintiffs to Complete and File a Civil RICO Case Statement is DENIED.
II. BACKGROUND
Because the court is addressing a motion to amend, the court must
accept the allegations of the complaint as true. Accordingly, the facts
summarized here are those alleged in the Second Amended Complaint.
Plaintiffs allege that from 2006 to December of 2016, Plaintiffs were
deputized by defendant Sheriff Pickell to act as agents of the Genesee
County Sheriff’s Department, which would allow Plaintiffs to be paid for
work received from the Genesee courts. (Doc. 26 at 4). Plaintiffs allege that
Pickell charged each Plaintiff between $65.00 and $300.00 per year in
exchange for being deputized and that the checks were made payable to
either Pickell, Scott Hope, Charissa Hope, Pickell’s secretary, the
Committee to Retain Sheriff Pickell, or to a charity selected by Defendants.
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(Doc. 26-3 at 6). Plaintiffs further allege that Scott Hope, acting as Pickell’s
agent, endorsed the checks and deposited them for the personal financial
gain of Defendants. Id.
On April 11, 2017, the parties discussed a proposed civil RICO case
statement and a possible settlement agreement where Defendants
“advised Plaintiffs that the case could only be settled if all of the other
process servers with possible claims gave Defendant, Pickell and Genesee
County an indication of whether they intended on filing claims in the future.”
(Doc. 26 at 5; see also Doc. 20 at 3; see also Doc. 23 at 3). The parties did
not agree on the motion, so on April 12, 2017, Defendants filed a Motion
Requesting that this Court Enter an Order Requiring Plaintiffs to Complete
and File a Civil RICO Case Statement, which this court has considered.
On April 19, 2017, Pickell sent a message to additional process
servers who had possible claims against him and asked them if they
intended to file a lawsuit. (See Doc. 26-2 at 2). As a result of Pickell’s letter,
six additional process servers retained Plaintiffs’ counsel. (Doc. 26 at 5).
On May 12, 2017, Plaintiffs filed a Motion to Amend the Complaint, which
this court has considered. The Motion to Amend seeks to add six process
servers as plaintiffs and to add Charissa Hope as a defendant. (Doc. 26 at

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5). Plaintiffs also request to further “clarify its pleadings regarding their
RICO claim to address Defendants’ concerns.” (Doc. 23 at 3).
III. LEGAL STANDARD
The standard for granting leave to amend is set forth at Federal Rule
of Civil Procedure 15(a), which provides that courts “should freely give
leave [to amend] when justice so requires.” The Supreme Court has
explained that courts may deny leave to amend where there is “undue
delay, bad faith or dilatory motive on the part of the movant, repeated
failure to cure deficiencies by amendments previously allowed, undue
prejudice to the opposing party by virtue of allowance of the amendment,
[and/or] futility of amendment.” Foman v. Davis, 371 U.S. 178, 182 (1962).
The standard for determining futility is whether the amendment could
withstand a Rule 12(b)(6) motion to dismiss. Rose v. Hartford Ins. Co., 203
F.3d 417, 420 (6th Cir. 2000). To survive a Rule 12(b)(6) motion to dismiss,
Plaintiffs’ complaint must allege sufficient factual allegations to make their
alleged legal conclusions plausible. 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. The court must assume

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“that all of the complaint's allegations are true.” Bell Atl. Corp. v. Twombly,
550 U.S. 544, 545 (2007).
IV. ANALYSIS
A. Plaintiffs’ Motion to Amend the Complaint
Plaintiffs seek leave to file a second amended complaint to: (1) add
six process servers as plaintiffs; (2) add Charissa Hope as a defendant;
and (3) to clarify the RICO allegations. (Doc. 26 at 5). On May 25, 2017,
Defendants filed a response to Plaintiffs’ Motion to Amend where
Defendants opposed Plaintiffs’ Motion to Amend. Defendants argue that
“Plaintiff’s proposed Second Amended Complaint lacks sufficient
information regarding exactly how Defendants Hope and the proposed new
Defendant Charissa Hope are liable under RICO.” (Doc. 28 at 2). Here,
Defendants appear to argue that the Proposed Second Amended
Complaint should be denied due to futility of amendment.
Defendants further argue that granting Plaintiffs’ motion to amend
would result in “numerous amendments of the pleadings and greatly
increase the cost of litigation to Defendants Hope. This is simply unfair.”
(Doc. 28 at 2). Here, Defendants appear to argue that the Proposed
Second Amended Complaint should be denied due to undue prejudice.
Essentially, Defendants make vague and unspecific objections to Plaintiffs’
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Motion to Amend, which fail to demonstrate that the amendment would be
futile or would result in undue prejudice to them. The court finds that
Plaintiffs’ RICO claims and all proposed amendments survive a motion to
dismiss.
1. Futility of Amendment
To determine whether an amendment would be futile, the court
evaluates whether Plaintiffs’ allegations against Defendants are sufficient to
state a plausible claim under any of the statutes or common law claims
pled in the original complaint. In doing so, the court must ignore legal
conclusions and accept all allegations in the complaint as true. Iqbal, 556
U.S. at 678. The court considers whether a plausible RICO claim may lie
against Defendants based on the allegations in the motion to amend, and
finds that it does. A violation of § 1962(c) requires Plaintiffs to prove the
following elements: “(1) conduct (2) of an enterprise (3) through a pattern
(4) of racketeering activity.” Sedima v. Imrex Co., 473 U.S. 479, 496
(1985). Plaintiffs’ general factual allegations, taken as true, provide
sufficient facts for this court to draw the reasonable inference that
Defendants are liable for the alleged violation of § 1962(c). (See Doc. 26-3
at 5-9). In particular, Plaintiffs’ Second Amended Complaint specifically

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alleges that Defendants violated each element of § 1962(c). Id. at 9. The
court considers each element of § 1962(c) below.
a. Enterprise
A RICO enterprise requires a “‘structure,’ but ‘an ascertainable
structure beyond that inherent in the pattern of racketeering activity in
which it engages’ [is not required].”  Scharnitzke v. Sedgwick Claims Mgmt.
Servs., No. 09-11529, 2010 U.S. Dist. LEXIS 22792, at *84 (E.D. Mich.
Mar. 11, 2010) (quoting Boyle v. United States, 556 U.S. 938, 941 (2009)).
“[A]n association-in-fact enterprise must have at least three structural
features: a purpose, relationships among those associated with the
enterprise, and longevity sufficient to permit these associates to pursue the
enterprise's purpose.” Boyle, 556 U.S. at 946.
Plaintiffs allege that Defendants formed an enterprise that had a
common purpose of engaging in the alleged misconduct of exchanging
deputization for money. (Doc. 26-3 at 9-10). Plaintiffs further allege that
“there were relationships among those associated with the enterprise” and
“there was longevity as the relationships between the members of the
Enterprise began in 2006 at the latest and continued up until at least year
2016.” Id. at 10. Therefore, Plaintiffs’ Second Amended Complaint alleges
sufficient factual allegations to support the enterprise element. Id. at 9-10.
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b. Conduct
The conduct element of § 1962(c) requires one to “participate in the
operation or management of the enterprise itself.” Reves v. Ernst & Young,
507 U.S. 170, 185 (1993). Plaintiffs claim that:
Defendants participated in the “operation or management” of
the Enterprise’s affairs. Pickell was the central figure in the
association in fact who demanded payment of monies from
Plaintiffs in order to have deputization duties. Hope acted as
Pickell’s appointed agent and representative, and endorsed the
checks and deposited them into a bank account for the
personal financial gain/benefit of Defendants. In exchange for
Defendant Hope’s patronage and illegal activities, Defendant
Pickell rewarded Defendant Hope by awarding his company
Allen & Hope Inc. the exclusive rights to all process serving
activities for Defendant, Genesee County and termination
Plaintiffs. Defendant, C. Hope working with co-Defendants
planned and devised the method to extort Plaintiffs and
assisted and managed the affairs of the enterprise with CoDefendants by determining and implementing schemes to
increase revenues for Allen and Hope. These acts were
condoned by Genesee County which had the custom, practice,
and policy to take money not due the County by virtue of
Defendant Pickell’s influence and political office.
(Doc. 26-3 at 10).
The Second Amended Complaint sufficiently describes how the
proposed defendant C. Hope and others engaged in misconduct violating §
1962(c). The court finds that the factual context created by these specific
allegations together with the general factual allegations constitutes
sufficient support for the conduct element.

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c. Pattern of Racketeering Activity
A pattern of racketeering activity “requires at least two acts of
racketeering activity.” 18 U.S.C. § 1961(5). As to the question of activity,
first, Plaintiffs allege that Defendants engaged in extortion under color of
official right through Pickell’s office in Genesee County. (Doc. 26-3 at 11).
Second, Plaintiffs allege that Defendants:
engaged in predicate acts of extortion in violation of federal law,
as Defendant Pickell, as aided and abetted by Hope, C. Hope
and Allen & Hope, obtained property from Plaintiffs, i.e.,
payments of for [sic] $65.00 to $150.00 a year, with their
consent, wrongfully induced under fear of economic harm, all in
violation of 18 U.S.C. § 1951, as Plaintiffs were told that if they
did not make the payments, which were unlawful and not
required under law, they would not be selected to provide paid
deputization duties, all in violation of 18 U.S.C. § 1951.
Id. at 11-12.
The court finds that these factual allegations, taken as true, are
sufficient to support a plausible claim. In regards to the pattern of
racketeering, Plaintiffs allege that Defendants engaged in exchanging
deputization for money from December 2006 until December 2016. (Doc.
26-3 at 12). Plaintiffs allege both the “continuity” and “relatedness” prongs
of the pattern of racketeering activity element. Id. at 13. As to relatedness:
[h]ere, the acts of extortion were related to the affairs of the
Enterprise as the Defendants worked together so that
Defendant Pickell could obtain something of value, i.e., the
annual payments from Plaintiffs, to which he had no official
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right, and in return Defendant Pickell would reward deputization
designations to the Plaintiffs. Defendants Hope, C. Hope, and
Hope’s company Allen & Hope aided and abetted Defendant
Pickell in return for obtaining exclusive rights to process-serving
activities in Genesee County.
(Doc. 26-3 at 13).
Plaintiffs satisfy the “relatedness” prong because they essentially
allege that Defendants engaged in “criminal acts that have the same or
similar purposes, results, participants, victims, or methods of commission,
or otherwise are interrelated by distinguishing characteristics and are not
isolated events.” H.J. Inc. v. Nw. Bell Tel. Co., 492 U.S. 229, 230 (1989)
(quoting 18 U.S.C. § 3575(e)).
In regards to continuity, Plaintiffs allege:
Plaintiffs alleges [sic] that the pattern of racketeering activity
constituted close-ended continuity as these were continuous
acts occurring over a substantial period of time, i.e., at least
eleven (11) years. Plaintiffs alleges [sic] that the pattern of
racketeering activity constituted “open-ended” continuity based
upon a threat of continuing racketeering activity because the
predicate activity constituted the regular way Defendants did
business. Because such criminal conduct was part of the
regular way Pickell, Hope, and C. Hope did business it gives
rise to the inference that such offenses will continue indefinitely
if not interrupted. Hope and C. Hope continue to maintain the
exclusive right to process serving in the County and continue
their close relationships with County officials, including
Defendant Pickell.
(Doc. 26-3 at 13).

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“‘Continuity’ is both a closed- and open-ended concept,
referring either to a closed period of repeated conduct, or to past
conduct that by its nature projects into the future with a threat of
repetition.” H.J. Inc., 492 U.S. at 241. The court finds that Plaintiffs
have sufficiently alleged the continuity prong by pleading enough to
establish both closed and opened continuity. In particular, the
predicate acts pleaded in the Second Amended Complaint cover an
approximately eleven year period. (Doc. 26-3 at 13). Furthermore,
Plaintiffs allege that the continuous acts will continue indefinitely
because Defendants “continue to maintain the exclusive right to
process serving in the County and continue their close relationships
with County officials, including Defendant Pickell.” (Doc. 26-3 at 13).
i. Closed Continuity
“A party alleging a RICO violation may demonstrate continuity over a
closed period by proving a series of related predicates extending over a
substantial period of time.” H.J. Inc., 492 U.S. at 242. Although there is no
firm rule as to what establishes a “substantial period of time,” the Supreme
Court has held that acts alleged to occur “only over a ‘few weeks or months
and threatening no future criminal conduct’ do not satisfy the continuity
requirement.” Id. at 253. Here, Plaintiffs allege conduct spanning nearly
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eleven years. (Doc. 26-3 at 13). Furthermore, Plaintiffs allege that
Defendants purpose was to personally enrich themselves by “obtaining
exclusive rights to process-serving activities in Genesee County.” Id. The
court finds that Plaintiffs’ allegations, taken as true, satisfy closed continuity
because they allege the necessary “long term criminal conduct” that
Congress intended RICO to address. See 492 U.S. at 242.
ii. Open Continuity
Open continuity may be alleged by allegations:
that the predicates establish a threat of long-term racketeering
activity—for example, because the predicates themselves
involve a distinct threat of such activity; because they are part
of the regular way of doing business for an ongoing entity such
as a criminal association or legitimate business; or because
they are a regular means of conducting or participating in an
ongoing RICO enterprise.
Id. at 230.
Plaintiffs argue that open continuity stands:
based upon a threat of continuing racketeering activity because
the predicate activity constituted the regular way Defendants
did business. Because such criminal conduct was part of the
regular way Pickell, Hope, and C. Hope did business it gives
rise to the inference that such offenses will continue indefinitely
if not interrupted. Hope and C. Hope continue to maintain the
exclusive right to process serving in the County and continue
their close relationships with County officials, including
Defendant Pickell.
(Doc. 26-3 at 13).

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Here, Plaintiffs sufficiently allege that absent intervention, there is a
risk of continued racketeering. Furthermore, Plaintiffs allege that the
conduct of Pickell, Hope, and C. Hope was a regular way of conducting
their ongoing business, Allen & Hope Process Serving Management Co.,
Inc. Moreover, Plaintiffs obtained letters signed by Pickell that read in part:
[e]ffective January 1, 2017, the Office of Genesee County
Sheriff will exclusively use the firm of Allen-Hope & Associates
to serve orders for seizure, evictions, claims and delivery, and
foreclosures… [i]f you fail to complete orders for seizure,
evictions, or claims and foreclosures by December 31, 2016 at
midnight, you are expected to contact Scott Hope.
(Doc. 4-2 at 2).
Per the Second Amended Complaint, there are twelve Genesee
County process servers who have been victims of Defendants’
alleged scheme to deputize the process servers in exchange for
money and conferring on defendant Scott Hope the exclusive rights
to process serving. (Doc. 26 at 3-5). Furthermore, the letters allegedly
signed by Pickell provide another reason for this court to draw the
reasonable inference that Defendants are liable for the alleged
misconduct. Taken as true, Plaintiffs’ allegations support the
existence of open continuity. Plaintiffs have pled sufficient facts in
support of their civil RICO claim to survive a motion to dismiss.
Accordingly, amendment would not be “futile.”
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2. Undue Prejudice
Having found that amendment would not be “futile,” the court turns to
the second question: whether amendment would unduly prejudice the
defendants. Undue prejudice is often found when the delay in amending
the pleadings is unexplained, unjustified, and the case has already reached
an advanced stage of litigation. See, e.g., Niemi v. NHK Spring Co., Ltd.,
543 F.3d 294, 307 (6th Cir. 2008) (affirming district court’s refusal to allow
plaintiff to amend his complaint after his properly pleaded claims were
dismissed at summary judgment); Duboc v. Green Oak Twp., 312 F.3d
736, 752-53 (6th Cir. 2002) (affirming district court’s refusal to allow plaintiff
to file a second amended complaint after the case was trial ready as an
eleventh hour amendment would prejudice the defendant). None of those
situations are present here. The Sixth Circuit has found prejudice to the
opposing party where a defendant sought to amend its answer three years
after filing its original responsive pleading, and just as its opponent “was
preparing to litigate the remaining issues by motion for summary judgment.”
Owens Corning v. National Union Fire Ins. Co. of Pittsburgh, PA, 257 F.3d
484, 496-97 (6th Cir. 2001). In contrast, no undue prejudice exists from
amended pleadings simply because the opposing party would have to
defend against new or better pleaded claims.
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The court finds Defendants’ assertion that granting leave to amend
would result in undue prejudice unpersuasive. There is no undue prejudice
because this matter is still in its infancy, no scheduling conference has
been held yet, and no scheduling order is in place. More importantly, the
Proposed Second Amended Complaint seeks to add six process servers
that Defendants also seek to add in order to facilitate a possible settlement.
(Doc. 26 at 5). Furthermore, Plaintiffs have provided a more detailed RICO
complaint by alleging violation each element of § 1962(c). Thus, there is no
undue prejudice.
B. Defendants’ Motion Requesting that this Court Enter an Order
Requiring Plaintiffs to Complete and File a Civil RICO Case Statement.
Defendants have filed a Motion Requesting that this Court Enter an
Order Requiring Plaintiffs to Complete and File a Civil RICO Case
Statement, a form required to be filed in some jurisdictions. Defendants
argue that “use of the proposed Civil RICO Case Statement would be of
vital help in the instant action by, not only narrowing the issues, but also
curtailing anticipated extensive motion practice directed at dismissing all or
parts of Plaintiffs’ Complaint.” Again, the court finds these vague assertions
unpersuasive. Here, there is no standing order requiring a RICO case
statement, nor does this court have a local rule requiring a RICO case
statement. More importantly, Plaintiffs’ Second Amended Complaint pled
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sufficient facts to support a plausible RICO claim and added the additional
process servers that Defendants identified. The benefits of requiring
preparation of a case statement can all be achieved by appropriate
discovery requests. Accordingly, Defendants’ Motion Requesting this Court
Enter an Order Requiring Plaintiffs to Complete and File a Civil RICO Case
Statement is DENIED as moot.
V. CONCLUSION
For the reasons set forth above, Plaintiffs’ Motion to Amend (Doc. 26)
is GRANTED. Consistent with the analysis herein, Defendants’ Motion
Requesting this Court Enter an Order Requiring Plaintiffs to Complete and
File a Civil RICO Case Statement (Doc. 26) is DENIED as moot.
IT IS SO ORDERED.
Dated: August 2, 2017
s/George Caram Steeh
GEORGE CARAM STEEH
UNITED STATES DISTRICT JUDGE

CERTIFICATE OF SERVICE
Copies of this Order were served upon attorneys of record on
August 2, 2017, by electronic and/or ordinary mail.
s/Marcia Beauchemin
Deputy Clerk

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