BURGESE et al v. STARWOOD HOTELS & RESORTS WORLDWIDE, INC. et al

Filing 88

OPINION. Signed by Judge Renee Marie Bumb on 4/14/2015. (tf, )

[Dkt. Ent. 79]
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
CAMDEN VICINAGE

JOSEPH BURGESE and ANNA
BURGESE,

Civil Action No. 13-cv-03341

Plaintiffs,

OPINION

v.
STARWOOD HOTELS & RESORTS
WORLDWIDE, INC., et al.,
Defendants.

Appearances:
Lance Rogers
Rogers & Associates, LLC
25 Elliott Avenue
Bryn Mawr, PA 19010
Attorney for Plaintiffs
Jay A. Gebauer
Mark Gregory Materna
Post & Schell, PC
Overlook Center
100 Overlook Drive
2d Floor
Princeton, NJ 08540
Attorneys for Defendants
BUMB, UNITED STATES DISTRICT JUDGE:
This matter comes before the Court upon a partial motion to
dismiss filed by Defendants 2201 Collins Fee, LLC (“2201
Collins”), Starwood Hotels & Resorts, Inc. (“Starwood”), and W
Hotel Management, Inc. (“W Hotel,” and collectively the
“Defendants”). (Dkt. Ent. 79.) Defendants seek to dismiss Counts
1

I and II of the Amended Complaint, which allege violations of
the Florida Civil Remedies for Criminal Practices Act, Fla.
Stat. § 772.101 et seq., Florida’s equivalent of the federal
Racketeer Influenced and Corrupt Organizations Act (“RICO”). 1
I.

Factual Background
This matter arises out of an incident that occurred on

January 19, 2013 while Plaintiffs Joseph and Anna Burgese (the
“Plaintiffs”) were guests of the W South Beach Hotel in Miami
Beach, Florida. (Am. Compl. ¶¶ 8-10.) Plaintiffs regularly
stayed at the W South Beach Hotel. (Id. at ¶ 9.) Plaintiffs
allege that, on January 19, Plaintiffs were walking through the
hotel lobby when Plaintiff Anna Burgese (“Ms. Burgese”) “was the
subject of an unprovoked, sudden, violent attack by an unknown
number” of Jane Doe defendants. (Id. at ¶ 10.) Specifically, Ms.
Burgese, “a petite lady,” was tackled by a woman from behind
“with such force that she flew out of her shoes” and “was driven
face first into the stone floor,” where her attacker 2 struck her
repeatedly. (Id. at ¶¶ 11-14.) Plaintiffs further allege that
Mr. Burgese sought the assistance of a hotel employee and

1

The Florida statute is hereinafter referred to as the
“Florida RICO Act.”
2

Although the Amended Complaint alleges that the number of
attackers is unknown, several allegations refer to only a single
attacker. (Compare Am. Compl. ¶ 10 (referring to unknown
number), with id. at ¶ 11 (alleging Ms. Burgese was tackled by a
single assailant).)
2

demanded that the staff detain the attackers until the police
could arrive. (Id. at ¶ 15.) Hotel staff allegedly informed Mr.
Burgese they would do so and one employee purportedly stated
that staff knew the assailant’s identity. (See id. at ¶¶ 16-17.)
Plaintiffs relied upon the hotel staff’s assurances, and so
“took no further action to pursue, identify or detain the
attackers at that time.” (Id. at ¶ 19.) Ms. Burgese apparently
went to the hospital in an ambulance. (Id. at ¶ 23.)
According to the Amended Complaint, however, the staff
assisted the attacker(s) with obtaining a taxi or taxis to
facilitate their escape, and failed to identify them for either
Plaintiffs or the police. (Id. at ¶¶ 21, 57.) Staff also later
claimed not to know the identity of the attacker(s). (Id. at
¶ 20.) Consequently, the attacker(s) remain unidentified. (See
id. at ¶ 22.) Despite the fact that the identity or even number
of the attackers is unknown, Plaintiffs allege that their
investigation revealed that they were prostitutes who “would
have provided information that demonstrated Starwood and W
Hotels [sic] complicity in the prostitution activity at the
South Beach W.” (Id. at ¶¶ 54-55.)
After Plaintiffs filed suit in May 2013, they and their
agents undertook an investigation into prostitution activity at
W Hotels in South Beach and New York, New York. (See id. at
¶ 27.) Plaintiffs allege that their investigation reveals that
3

Starwood and W Hotels “welcome prostitutes into their hotels in
order to entice wealthy customers to spend money on hotel
services,” informed employees that prostitutes were “welcome and
good for business,” and staff openly arrange meetings between
prostitutes and guests. (See id. at ¶¶ 37, 38, 41, 45.)
Plaintiffs further allege that management is aware of the
prostitution activity and “manages it.” (Id. at ¶ 45.) It is
alleged that Starwood and W Hotels “not only tolerate[], but
openly allow[] and promote[] prostitution” at their hotels (see,
e.g., id. at ¶¶ 67, 72, 82), so as to “entice wealthy customers
to spend money on hotel services, thus increasing corporate
profits” (id. at ¶ 37).
II.

Procedural Background
Plaintiffs commenced this action on May 28, 2013 against

Defendants Starwood, 2201 Collins, and unnamed individuals who
allegedly attacked Ms. Burgese. (Dkt. Ent. 1.) United States
Magistrate Judge Ann Marie Donio subsequently scheduled a
settlement conference for March 21, 2014, and ordered the
parties to exchange settlement memoranda. (Dkt. Ent. 35.) On
August 14, 2014, Judge Donio entered an amended scheduling order
establishing an August 29, 2014 deadline for filing amended
pleadings. (Dkt. Ent. 53.)
On August 29, 2014 Plaintiffs filed a motion for leave to
file an amended complaint that included additional allegations
4

discovered through an “investigation” that Plaintiffs undertook
at other Starwood hotels subsequent to the filing of this
matter. Defendants opposed the motion, arguing among other
things that the proposed amended complaint contained “lurid,
sensational and salacious allegations.” In addition, Defendants
argued that Plaintiffs had been using the anticipated negative
publicity from these allegations to pressure Defendants into a
higher settlement. (See Dkt. Ent. 58 at 3.) On September 30,
2014, this Court held a hearing on Plaintiffs’ motion, and
denied leave to amend but permitted Plaintiffs to file a second
motion for leave to amend. (Dkt. Ent. 67.)
On October 14, 2014, Plaintiffs filed their second motion
(Dkt. Ent. 70), which Defendants again opposed. The Court held a
hearing on the second motion on November 3, 2014, and directed
Plaintiffs to file a pared-down version of their amended
complaint. They filed the instant Amended Complaint on November
7, 2014, setting forth causes of action for violations of the
Florida RICO Act (Counts I and II), negligence (Count III), and
loss of consortium (Count VI) against all defendants, premises
liability (Count IV) against Starwood and 2201 Collins, and
assault (Count V) against the unnamed defendants.
Defendants Starwood, W Hotel, and 2201 Collins have moved
to dismiss the Florida RICO Act counts, Counts I and II.

5

III.

Standard
To withstand a motion to dismiss under Federal Rule of

Civil Procedure 12(b)(6), “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 Bell Atlantic Corp. v. Twombly, 550
U.S. 544, 570 (2007)). “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. at 663. “[A]n unadorned, the-defendantunlawfully harmed-me accusation” does not suffice to survive a
motion to dismiss. Id. at 678. “[A] plaintiff's obligation to
provide the ‘grounds' of his ‘entitle[ment] to relief’ requires
more than labels and conclusions, and a formulaic recitation of
the elements of a cause of action will not do.” Twombly, 550
U.S. at 555 (quoting Papasan v. Allain, 478 U.S. 265, 286
(1986)).
In reviewing a plaintiff’s allegations, the district court
“must accept as true all well-pled factual allegations as well
as all reasonable inferences that can be drawn from them, and
construe those allegations in the light most favorable to the
plaintiff.” Bistrian v. Levi, 696 F.3d 352 n.1 (3d Cir. 2012).
Only the allegations in the complaint, and “matters of public
record, orders, exhibits attached to the complaint and items
6

appearing in the record of the case” are taken into
consideration. Oshiver v. Levin, Fishbein, Sedran & Berman, 38
F.3d 1380, 1384 n.2 (3d Cir. 1994) (citing Chester County
Intermediate Unit v. Pennsylvania Blue Shield, 896 F.2d 808, 812
(3d Cir. 1990)).
IV.

Analysis
Pursuant to the Florida RICO Act, it is unlawful for any

person:
(1) Who has with criminal intent received any proceeds
derived, directly or indirectly, from a pattern of
criminal activity or through the collection of an
unlawful debt to use or invest, whether directly or
indirectly, any part of such proceeds, or the proceeds
derived from the investment or use thereof, in the
acquisition of any title to, or any right, interest,
or equity in, real property or in the establishment or
operation of any enterprise.
(2) Through a pattern of criminal activity or through
the collection of an unlawful debt, to acquire or
maintain, directly or indirectly, any interest in or
control of any enterprise or real property.
(3) Employed by, or associated with, any enterprise to
conduct or participate, directly or indirectly, in
such enterprise through a pattern of criminal activity
or the collection of an unlawful debt.
(4) To conspire or endeavor to violate any of the
provisions of subsection (1), subsection (2), or
subsection (3).
Fla. Stat. § 772.103(1)-(4). In order to assert a claim, the
plaintiff must establish a RICO enterprise and “a pattern of
racketeering activity.” See, e.g., Jackson v. BellSouth
Telecomm’ns, 372 F.3d 1250, 1264 (11th Cir. 2004).

7

Defendants argue that (1) Plaintiffs lack standing under
the Florida RICO Act because they have failed to allege an
injury to their business or property, which Defendants contend
is required under § 772.104; (2) Plaintiffs lack standing
because they have failed to identify or plead a viable RICO
enterprise; (3) Plaintiffs cannot demonstrate that their
injuries were proximately caused by the predicate acts; and
(4) these deficiencies also necessitate dismissal of the Florida
RICO Act conspiracy claim. In addition, Defendants contend they
are entitled to reasonable attorneys’ fees as Plaintiffs’ claims
lack substantial factual or legal support. The Court addresses
these arguments in turn below.
A. Injury to Business or Property
Defendants first argue that Plaintiffs’ Florida RICO Act
claims must be dismissed for failure to allege an injury to
“business or property.” In support, Defendants cite extensive
case law interpreting a similar civil remedies provision of 18
U.S.C. § 1964, the federal RICO statute. Section 1964(c)
provides, in relevant part:
Any person injured in his business or property by
reason of a violation of section 1962 of this chapter
may sue therefor in any appropriate United States
district court and shall recover threefold the damages
he sustains and the cost of the suit, including
reasonable attorneys’ fees . . . .

8

18 U.S.C. § 1964(c). This section has been interpreted by the
courts to preclude those actions in which a plaintiff alleges
only physical injury or pecuniary losses flowing from that
personal injury. See, e.g., Zimmerman v. HBO Affiliate Grp., 834
F.2d 1163, 1169 (3d Cir. 1987) (“The named plaintiff has alleged
only injury in the nature of mental distress, not an injury ‘in
his business or property.’ Therefore he has no cause of action
on a RICO claim . . . .”); Ehrich v. B.A.T. Indus. P.L.C., 964
F. Supp. 164, 167 (D.N.J. 1997) (“In the instant case,
plaintiffs’ core injuries are medical in nature (i.e., nicotine
addiction, carcinoma and lung tumors, and lung cancer), not
proprietary, and any incidental financial consequences do not
give rise to a claim under 18 U.S.C. § 1964(c).”); Evans v. City
of Chicago, 434 F.3d 916, 930-31 (7th Cir. 2006) (“Accordingly,
we reaffirm our holding in Doe v. Roe, and in doing so reiterate
this court’s understanding that personal injuries, and the
pecuniary losses flowing from those injuries, are insufficient
to establish standing under the civil RICO, § 1964(c). We also
hold that foregone earnings stemming from the lost opportunity
to seek or gain employment are, as a matter of law, insufficient
to satisfy § 1964(c)’s injury to ‘business or property’
requirement where they constitute nothing more than pecuniary
losses flowing from what is, at base, a personal injury.”); see
also Magnum v. Archdiocese of Phil., 253 F. App’x 224, 229 (3d
9

Cir. 2007) (“[W]e conclude that any damages Appellants may have
sustained from the lost opportunity to bring personal injury
tort claims against the Archdiocese do not constitute ‘injury to
business or property’ within the meaning of 28 U.S.C.
§ 1964(c).”). As the Third Circuit has recognized, the “business
or property” injury limitation ensures that “RICO is not
expanded to provide a federal cause of action and treble damages
to every tort plaintiff.” Maio v. Aetna, Inc., 221 F.3d 472, 483
(3d Cir. 2000) (quoting Steele v. Hospital Corp. of Am., 36 F.3d
69, 70 (9th Cir. 1994)).
Because the Florida statute was “patterned” after the
federal statute, Defendants ask this Court to import the same
restriction under the Florida RICO Act. Indeed, “Florida courts
often look to the Federal RICO decisions for guidance in
interpreting and applying [the Florida RICO Act].” Jackson v.
BellSouth Telecomm’ns, 372 F.3d 1250, 1264 (11th Cir. 2004)
(quoting Fla. Software Sys., Inc. v. Columbia/HCA Healthcare
Corp., 46 F. Supp. 2d 1276, 1284 (M.D. Fla. 1999)); see also
Palmas Y Bambu, S.A. v. E.I. Dupont De Nemours & Co., Inc., 881
So.2d 565, 570 (Fla. App. 3d Dist. 2004) (“Because of the
similarities between Florida and federal RICO acts, Florida
looks to federal authority regarding the interpretation and
application of its act.” (citations omitted)); O'Malley v. St.
Thomas Univ., Inc., 599 So.2d 999, 1000 (Fla. App. 3d Dist.
10

1992) (“Since Florida RICO is patterned after federal RICO,
Florida courts have looked to the federal courts for guidance in
interpreting and applying the act. Therefore, federal decisions
should be accorded great weight.” (citations omitted)). 3 The
Court declines to do so.
Although the Florida and federal RICO statutes are very
similar, they differ in one key respect. Section 772.104 sets
forth the civil cause of action under the Florida RICO Act and
provides, in relevant part:
Any person who proves by clear and convincing evidence
that he or she has been injured by reason of any
violation of the provisions of s. 772.103 shall have a
cause of action for threefold the actual damages
sustained and, in any such action, is entitled to
minimum damages in the amount of $200, and reasonable
attorney’s fees and court costs in the trial and
appellate courts.
Fla. Stat. § 772.104(1) (emphasis added). Unlike the federal
RICO statute, the Florida RICO Act by its plain language does
not restrict injuries to “business or property” injuries.
Indeed, this is precisely what the court held in Townsend v.
City of Miami, et al., No. 03-21072, slip op. (S.D. Fla. Nov. 7,
2007). There, the plaintiff sued former police officers and city

3

In its opening motion papers, Defendants rely heavily on
the Florida District Court of Appeals’ decision in O’Malley v.
St. Thomas University, Inc. That decision, however, rested on
the plaintiffs’ failure to plead a direct injury under the
Florida RICO Act and did not address whether the Florida RICO
Act required an injury to “business or property” like its
federal counterpart. See 599 So.2d at 999-1000.
11

officials for inter alia violations of the federal and Florida
RICO Acts, alleging lost employment, employment opportunities,
wages, and personal injuries in the form of actual physical
harm. Slip op. at 2. The court noted that “[t]he phrase
‘business or property’ [in the federal RICO statute] is a
limiting one that excludes personal injuries and resulting
pecuniary losses such as loss of earnings and pain and
suffering,” and thus dismissed the federal RICO claims. Id. at 3
(citing Grogan v. Platt, 835 F.2d 844, 846-47 (11th Cir. 1988)).
As to the Florida RICO Act, however, the court held:
The defendants further argue that Mr. Townsend’s
failure to allege a business or property injury is
also fatal to his claim under the Florida RICO
statute. I disagree. Unlike its federal counterpart,
the Florida RICO statute is not limited to ‘business
or property’ injuries. See Fla. Stat. § 772.104(1). To
state a civil claim under the Florida RICO statute,
all a plaintiff has to allege is (1) a violation of
Fla. Stat. § 772.103, and (2) an injury as a result of
this violation. See Fla. Stat. § 772.104(1). The plain
language of the Florida statute does not exclude
pecuniary losses resulting from personal injury.
Accordingly, Mr. Townsend can sue under the Florida
RICO statute for his loss of employment and personal
injuries.
Slip op. at 4. The Court finds the reasoning of the court’s
decision in Townsend persuasive. 4 See also Ruth v. Dep’t of Legal

4

According to Plaintiffs, “[t]he Eleventh Circuit Court of
Appeals affirmed without opinion the Townsend decision.” (Opp.
at 8.) It is perplexing how Plaintiffs can make such statement.
It appears from a review of the docket that this issue was never
even appealed to the Circuit; rather, the parties appealed the
denial of sovereign immunity, which the Circuit dismissed for
12

Affairs, 684 So.2d 181, 184-85 (Fla. 1996) (finding “the federal
RICO act does not provide us with any guidance” as to whether
the court has jurisdiction to determine property rights in a
civil forfeiture action because “[u]nlike the Florida RICO act,
the federal RICO act does not include a civil forfeiture
provision”).
Plaintiffs also rely upon Spadara v. City of Miramar, 855
F. Supp. 2d 1317, 1352-53 (S.D. Fla. 2012), arguing that, in
Spadaro, “the Court went on to permit the plaintiff to proceed
with Florida RICO claims by specifically recognizing that ‘the
Florida RICO statute, unlike its federal counterpart, does not
require an injury to business or property.’” (Opp. at 8 (citing
id. at 1352 n.29).) Plaintiffs blatantly misstate the holding in
Spadaro. The footnote in which this language cited by Plaintiffs
is found states in whole:
In his opposition, Caravella argues that the Florida
RICO statute, unlike its federal counterpart does not
require an injury to business or property. City
Response at 27 (citing Fla. Stat. § 772.104(1)).
However, the City Defendants only argue that
Caravella’s claims brought pursuant to 18 U.S.C.
§ 1962 should be dismissed on this basis. See City
Motion at 28.
Spadara, 855 F. Supp. 2d at 1352 n.29 (emphasis added). In other
words, the City Defendants argued only that the federal RICO

lack of jurisdiction. See Townsend, No. 03-21072, Dkt. Ents.
228, 284. The case settled soon thereafter. Id., Dkt. Ent. 290.
13

claims must be dismissed for failure to allege an injury to
business or property; because they did not move to dismiss the
Florida RICO Act claim on this ground, the district court was
not required to address the plaintiff’s argument. In any event,
the district court did not hold, as Plaintiffs contend, that the
Florida RICO Act does not require an injury to business or
property. Moreover, the court dismissed the Florida RICO Act
claims in Spadaro on other grounds, including the failure to
allege a pattern of racketeering activity. See id. at 1252-53.
As such, this case does not support Plaintiffs’ arguments.
Regardless, persuaded by Townsend, this Court finds that
Plaintiffs have adequately alleged injuries cognizable under the
Florida RICO Act. The Amended Complaint alleges that Ms. Burgese
was the subject of a violent and unprovoked attack by a
prostitute and suffered serious physical injury and mental
anguish that has prevented her from returning to work. (See Am.
Compl. ¶¶ 10, 24, 93, 95.) Such allegations are sufficient to
survive a motion to dismiss.
B. Enterprise
Defendants next argue that Plaintiffs have failed to allege
a RICO “enterprise” for several reasons. First, Defendants
contend that Plaintiffs have failed to allege a distinct RICO
“enterprise” through which Defendants allegedly engaged in
racketeering activity. “A RICO enterprise exists ‘where a group
14

of persons associates, formally or informally, with the purpose
of conducting illegal activity.’” Jackson, 372 F.3d at 1264
(United States v. Hewes, 729 F.2d 1302, 1311 (11th Cir. 1984));
Spadaro, 855 F. Supp. 2d at 1348. The Florida RICO Act defines
an enterprise as
any individual, sole proprietorship, partnership,
corporation, business trust, union chartered under the
laws of this state, or other legal entity, or any
unchartered union, association, or group of
individuals associated in fact although not a legal
entity; and the term includes illicit as well as licit
enterprises and governmental, as well as other,
entities.
Fla. Stat. § 772.102(3).
Courts have held that the “enterprise” must be distinct
from the defendant person sued under the statute.

See Palmas Y

Bambu, 881 So.2d at 570. “Where [] an entity is both the
‘person’ [sued] and the sole entity comprising the ‘enterprise,’
the distinctness required does not exist.” Id. (emphasis added).
Distinctness cannot be overcome by alleging an enterprise
consisting of a corporate defendant associating with its
employees and carrying out the defendant’s regular business. See
id. at 575 (“Under these facts, no distinctness exists because
the distinctness requirement cannot be circumvented by ‘alleging
a RICO enterprise that consists merely of a corporate defendant
[person] associated with its own employees or agents carrying on
the regular affairs of the defendant’ . . . .” (citation

15

omitted)). This is so because a corporation can only act through
its employees and agents and thus all activities could be viewed
as acts of an “enterprise” that exists only of the defendant.
See id. (quoting Riverwoods Chappaqua Corp. v. Marine Midland
Bank, N.A., 30 F.3d 339, 344 (2d Cir. 1994)). However, “[t]he
prohibition against the unity of person and enterprise applies
only when the singular person or entity is defined as both the
person and the only entity comprising the enterprise.” United
States v. Goldin Indus., Inc., 219 F.3d 1271, 1275 (11th Cir.
2000). Such is not the case here.
When viewed in a light most favorable to Plaintiffs, the
Amended Complaint alleges that Starwood, W Hotel, and 2201
Collins, each acting through their employees, and various
unnamed prostitutes associated with one another for the purpose
of increasing profits through institutionalized prostitution.
(See, e.g., Am. Compl. ¶ 41 (“Starwood and W Hotels staff openly
arrange meetings with prostitutes.”); ¶ 42 (Starwood and W
Hotels employees were on duty and working under the eye of
management when they engaged in acts in furtherance of the
prostitution activity.”); ¶ 43 (Starwood and W Hotels employees
took pictures with prostitutes in the main lobby of the W Hotels
(South Beach W), security guards checked with front desk staff
about the availability of prostitutes (Hollywood W) and used the
concierge’s desk to store their purse and charge their cell
16

phones (New York W).”); ¶ 45 (“A W Hotels manager (S.) stated
that management was aware of the prostitution activity and
‘manages it.’”); ¶ 46 (“There is a conspiratorial relationship
between the W Hotels and prostitutes.”); ¶ 86 (“The predicate
acts of racketeering all have the same method of commission,
bellboys/doormen and security guards, acting at either the
explicit or tacit direction of management, obtained prostitutes
for guests at W Hotels.”).) Thus, even if the W Hotel, Starwood,
and 2201 Collins are all deemed a single entity operating
through its employees, the Amended Complaint can be read to
allege that the prostitutes are also part of the enterprise.
Second, Defendants argue that Plaintiffs have failed to
plead a controlling association or a common purpose. The Supreme
Court of Florida has held that under the Florida RICO Act, an
“enterprise” consists of “(1) an ongoing organization, formal or
informal, with a common purpose of engaging in a course of
conduct, which (2) functions as a continuing unit.” Gross v.
State, 765 So.2d 39, 45 (Fla. 2000) (citing United States v.
Turkette, 452 U.S. 576, 583 (1981)). In so holding, the Florida
Supreme Court specifically declined to adopt a narrow approach
to “enterprise” that required proof of an “ascertainable
structure” such as that suggested by Defendants here. See Gross,
765 So.2d at 45; see also United States v. Zielie, 734 F.2d
1447, 1463 (11th Cir. 1984), abrogated on other grounds by
17

United States v. Chestang, 849 F.2d 528, 531 (11th Cir. 1988)
(“An enterprise need not be a ‘duly formed corporation that
elects officers and hold annual meetings . . . .’ It can be a
loose and informal ‘amoeba-like infra-structure that controls a
secret criminal network . . . .’ The precedent in this circuit
clearly indicates that ‘a RICO enterprise exists where a group
of persons associate, formally or informally, with the purpose
of conducting illegal activity.’” (citations omitted)).
Here, Plaintiffs allege a “loose” association consisting of
Defendants (acting through their employees and managers) and
unnamed prostitutes whereby Defendants’ employees would contact
the prostitutes and arrange meetings with hotel guests. (See Am.
Compl. ¶¶ 41-46.) Moreover, Plaintiffs’ Amended Complaint can be
read to allege a “common purpose” of furthering an
institutionalized prostitution scheme to increase profits for
the participants. (See Am. Compl. ¶¶ 44, 85); Gross, 765 So.2d
at 46 (“The first element, requiring proof of the existence of
an ongoing organization with a common purpose of engaging in a
course of conduct, . . . may be proved with evidence of the
common purpose among the members.”). These allegations, though
thin, are sufficient for purposes of this motion. 5

5

The Court notes that, to the extent Defendants challenge
the bareness of Plaintiffs’ allegations regarding the enterprise
and the roles of the various associates, employees, and members,
Defendants had earlier sought to pare down Plaintiffs’ proposed
18

C. Pattern of Racketeering Activity
Defendants also argue that the Florida RICO Act claims must
be dismissed for failure to allege a pattern of racketeering
activity. Specifically, Defendants contend that Plaintiffs must
allege two or more predicate acts, at least one of which must
predate the injury. Under the Act, a pattern of criminal
activity
means engaging in at least two incidents of criminal
activity that have the same or similar intents,
results, accomplices, victims, or methods of
commission or that otherwise are interrelated by
distinguishing characteristics and are not isolated
incidents; provided that the last of such incidents
occurred within 5 years after a prior incident of
criminal activity.
Fla. Stat. § 772.102(4). To successfully allege a pattern of
racketeering activity, a plaintiff must aver that: (1) the
defendants committed two or more predicate acts within the
applicable time period; (2) the predicate acts were related to
one another; and (3) the predicate acts demonstrated criminal
conduct of a continuing nature. See Jackson, 372 F.3d at 1264;
Spadaro v. City of Miramar, No. 11-61607, slip. op. at 7, Dkt.
Ent. 154 (S.D. Fla. July 24, 2012). Plaintiffs here allege an
“open-ended scheme [that] poses a clear threat of continuation.”
(Am. Compl. ¶ 89.) “To establish open-ended continuity, a

amended complaints so as to eliminate the “lurid” and
“sensational” detailed allegations that they seemingly now
assert are necessary to state a claim.
19

plaintiff must establish that the predicate acts were the
enterprise’s ‘regular way of doing business’ or threaten
repetition in the future.” Spadaro, 855 F. Supp. 2d at 1351.
This necessitates proof of the “‘similarity and interrelatedness
of racketeering activities [and] proof that a continuity of
particular criminal activity exists.’” Lugo v. State, 845 So.2d
74, 99 (Fla. 2003) (quoting State v. Lucas, 600 So.2d 1093, 1094
(Fla. 1992)).
Plaintiffs have alleged several predicate acts
demonstrative of a pattern of racketeering activity:
(1) obstruction of justice and tampering with witnesses,
victims, or informants by assisting Ms. Burgese’s attacker(s),
who were prostitutes, with escaping and then lying to prevent
Plaintiffs or the police from ascertaining the attacker(s)’
identity, or uncovering the prostitution scheme; (23) racketeering and facilitating prostitution at the South Beach
W based upon Plaintiffs’ October 2013 investigation; and (45) racketeering and facilitating prostitution at the New York W
based upon Plaintiffs’ November 2013 investigation. The Amended
Complaint alleges that this conduct is related and constitutes
part of the scheme to increase profits through prostitution.
(See, e.g., Am. Compl. ¶¶ 84-85.) It further alleges that the
predicate acts have the “same method of commission” and “same

20

participants” in that employees, acting at the direction of
management, obtain prostitutes for guests. (See id. at ¶ 86.)
Even if, as Defendants suggest, at least one predicate act
must occur prior to the alleged injury, Plaintiffs have done so
here. Plaintiffs allege that the assailant(s) were prostitutes
with knowledge of the prostitution scheme and Defendants’ roles
therein, such that it became necessary for Defendants’ employees
to facilitate the attacker(s)’ escape so as to prevent them from
informing the police of the scheme. (Am. Compl. ¶¶ 54-59.) In
other words, Ms. Burgese’s assailants participated in the
prostitution scheme and were present at the South Beach W on
January 19, 2013 in that capacity. While Plaintiffs ultimately
may be unable to prove these facts, and, thus, their Florida
RICO Act claims may ultimately fail on the merits (see Am.
Compl. ¶ 22 (“the persons who attacked Plaintiff Anna Burgese
have not been conclusively identified”)), these allegations are
sufficient at this stage to demonstrate promotion of
prostitution activity and subsequent obstruction of justice in
order to cover up the evidence of prostitution activity. 6

6

The Court makes the following observation. Plaintiffs have
alleged an inability to conclusively identify the purported
assailant(s), but have also alleged that they were prostitutes
with knowledge of the prostitution scheme that forms the sole
basis of Plaintiffs’ RICO claims. It is their participation in
the prostitution scheme and their determination to protect it
that allegedly resulted in the attack on Ms. Burgese. Should
Plaintiffs be unable to prove the identity of the assailant(s),
21

Because the Amended Complaint alleges that similar
activities occurred several months later, in October and
November 2013, Plaintiffs have sufficiently alleged a pattern of
racketeering activity that has been continuous and threatens to
continue in the future.
D. Proximate Cause
Defendants next contend that the alleged predicate acts are
not the proximate cause of Plaintiffs’ injuries. As with its
federal counterpart, under the Florida RICO Act, the plaintiff
must demonstrate that her injuries were proximately caused by
the injurious conduct. See, e.g., Bortell v. White Mountains
Ins. Grp., 2 So.3d 1041, 1047 (Fla. App. 4th Dist. 2009). “A
wrongful act is ‘a proximate cause if it is a substantial factor
in the sequence of responsible causation.’” Green Leaf Nursery
v. E.I. Dupont De Nemours & Co., 341 F.3d 1292, 1307 (11th Cir.
2003) (finding alleged witness tampering in federal products
liability action not involving plaintiffs were not proximate
cause of plaintiff’s injuries in federal RICO case). In
addition, “indirect injuries, that is, injuries sustained not as
a direct result of predicate acts under [the Florida RICO Act]
. . . will not allow recovery under Florida RICO.” O’Malley, 599

their profession(s), or that they were present at the hotel
pursuant to Defendants’ alleged prostitution scheme, it is hard
to see how Plaintiffs could prevail on their Florida RICO Act
claims. Nevertheless, the claims may proceed at this stage.
22

So.2d at 1000; see also Bortell, 2 So.3d at 1047 (“Indirect harm
is insufficient to sustain a cause of action under the RICO
statutes.”). Thus,
It may well be true that the commission of the
predicate acts constituted the “but for” cause of the
[injury]. However, that tenuous a relation between the
harm and the predicate acts is not sufficient to
confer standing . . . RICO does not provide a remedy
for every injury that may be traced to a predicate
act.
Id. (quoting O’Malley v. O’Neill, 887 F.2d 1557, 1561 (11th Cir.
1989)).
Plaintiffs aver that “but for” Defendants’ and the unnamed
prostitutes’ concerted promotion of prostitution activity in the
South Beach W on January 19, 2013, Ms. Burgese would not have
been attacked by the prostitutes and that Plaintiffs’ injuries
were “foreseeable” because “[p]rostitution is a crime inherently
rife with drugs and violence.” (Am. Compl. ¶ 96.) Even if true,
it is clear under O’Malley that being the “but for” cause or
“reasonably foreseeable” result alone is insufficient. Here,
however, the Court finds that Plaintiffs have sufficiently
alleged at this stage a direct injury. Ms. Burgese’s attacker(s)
were allegedly present at the hotel as part of the prostitution
scheme, and, according to Plaintiffs, attacked Ms. Burgese in an
attempt to protect their organization. (See Opp. at 2.) Thus,
the Amended Complaint adequately alleges that Ms. Burgese’s
physical injuries and the losses stemming therefrom were a
23

direct consequence of the promotion of prostitution activity by
Defendants.
E. Florida RICO Conspiracy
Finally, Defendants argue that Plaintiffs’ conspiracy claim
fails for the same reasons that Plaintiffs’ substantive RICO
claim fails. The Court rejects these arguments for the same
reasons set forth above.
In addition, Defendants contend that Plaintiffs have failed
to adequately allege an agreement or knowledge that the
predicate acts were part of a pattern of racketeering activity.
See K. Kay Shearin v. E.F/. Hutton Grp., Inc., 885 F.2d 1162,
1166 (3d Cir. 1989) (setting forth elements of federal RICO
conspiracy claim as “the period of the conspiracy, the object of
the conspiracy, and the certain actions of the alleged
conspirators taken to achieve that purpose,” as well as
agreement and knowledge). The Court disagrees. Plaintiffs have
alleged that Defendants welcome prostitutes into their hotels
and that management informs employees that prostitutes are
welcome. (Am. Compl. ¶¶ 37, 38.) Staff allegedly arranges
meetings between prostitutes and guests, facilitates the storage
of prostitutes’ personal effects while they are at the hotel,
and at least one manager stated that hotel management is aware
of the prostitution activity and “manages it.” (Id. at ¶ 45.)

24

These allegations are sufficient to demonstrate agreement and
knowledge for purposes of this motion.
F. Attorneys’ Fees
Defendants contend that they are entitled to reasonable
attorneys’ fees in defending Plaintiffs’ “baseless” Florida RICO
Act claims. Under the Florida RICO Act, a defendant “shall be
entitled to recover reasonable attorney’s fees and court costs
in the trial and appellate courts upon a finding that the
claimant raised a claim which was without substantial fact or
legal support.” Fla. Stat. § 772.104(3). As Defendants correctly
note, this standard is “less strict” than other Florida feeshifting provisions; “it is not necessary that the court find a
“complete absence of a justiciable issue of either law of fact,
but only “that the claim lacked ‘substantial fact or legal
support.’” Hartford Ins. Co. of the Midwest v. Miller, 681 So.2d
301, 302 (Fla. App. 3d Dist. 1996) (quoting Foreman v. E.F.
Hutton & Co., 568 So.2d 531, 532 (Fla. App. 3d Dist. 1990)).
This fee-shifting provision is designed “to discourage frivolous
Rico claims or claims brought for the purpose of intimidation
because the stigma and burden of defending such claims is so
great.” Id. While Defendants ultimately may be entitled to fees
in the event that the Florida RICO Act claims are dismissed with

25

prejudice or a verdict is entered in Defendants’ favor, 7 the
Court must deny the request without prejudice in light of its
finding that the claims may proceed at this stage.
V.

Conclusion
For the reasons set forth above, the Court finds that, at

this stage and drawing all reasonable inferences in Plaintiffs’
favor, the Amended Complaint adequately alleges claims under the
Florida RICO Act and, therefore, Defendants’ motion must be
denied.

s/Renée Marie Bumb
RENÉE MARIE BUMB
UNITED STATES DISTRICT JUDGE

7

Moreover, Defendants may be entitled to fees even if
Plaintiffs were to prevail on other counts. See Hartford Ins.
Co., 681 So.2d at 302.
26