Tassio v. OneMain Financial, Inc. et al
ORDER ADOPTING REPORT AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE AND DISMISSING CASE for 45 Report and Recommendation. It is ORDERED that Plaintiff's objections are overruled and the Report of the Magistrate Judge (Dkt. #45) is ADOPTED as the opinion of the court. It is further ORDERED that Defendants' Motion to Dismiss Plaintiff's Amended Complaint Under Rule 12(b)(6) (Dkt. #32) and Defendants Supplemental Motion to Dismiss Plaintiff's Amended Complaint Under Rule 12(b)(6) (Dkt. #37) are GRANTED and the above- styled civil action is DISMISSED WITH PREJUDICE. All costs are taxed to Plaintiff. The Clerk of Court is directed to close the case. Signed by Judge Ron Clark on 12/16/2016. (kls, )
**NOT FOR PRINTED PUBLICATION**
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
STEVEN CHARLES TASSIO,
ONEMAIN FINANCIAL, INC., and
CIVIL ACTION NO. 4:15-cv-00484
(Judge Clark/Judge Johnson)
ORDER ADOPTING REPORT AND RECOMMENDAITON OF UNITED STATES
MAGISTRATE JUDGE AND DISMISSING CASE
Came on for consideration the Report of the United States Magistrate Judge in
this action, this matter having been heretofore referred to the United States Magistrate
Judge pursuant to 28 U.S.C. § 636. On October 28, 2016, the Report of the Magistrate
Judge was entered containing proposed findings of fact and recommendations that
Defendants’ Motion to Dismiss Plaintiff’s Amended Complaint Under Rule 12(b)(6)
(Dkt. #32) and Defendants’ Supplemental Motion to Dismiss Plaintiff’s Amended
Complaint Under Rule 12(b)(6) (Dkt. #37) should be GRANTED and that the above
titled and numbered cause of action be dismissed with prejudice. See Dkt. #45 (the
“Report of the Magistrate Judge”).
On November 16, 2016, pro se Plaintiff filed objections to the report (see
Pro se Plaintiff Steven Charles Tassio (the “Plaintiff”) filed this suit against
Defendants OneMain Financial, Inc. (“OneMain”) and Christi Merritt (collectively,
“Defendants”) on July 16, 2015. Plaintiff argues that Defendant OneMain improperly
accounted for and applied Plaintiff’s payments on his personal loan from OneMain (the
“Loan”). According to Plaintiff, Defendant Merritt is the branch manager of OneMain’s
McKinney, Texas office.
Under his claims for relief in his original complaint, Plaintiff asserted violations
of “18 U.S.C. § 1962(c) and (d) RICO Statutes.” Dkt. #1 at p. 9. After the Magistrate
Judge recommended dismissal of his original complaint, Plaintiff filed an amended
complaint. Out of an abundance of caution and because Plaintiff had not yet amended his
complaint, the Magistrate Judge withdrew its recommendation of dismissal allowing
Plaintiff the opportunity to amend.
Plaintiff’s amended complaint was filed February 22, 2016, which maintained
assertions of violations of “18 U.S.C. § 1962(c) and (d) RICO Statutes.” See Dkt. #31.
Defendants filed the present Motion to Dismiss on March 7, 2016. See Dkt. #32. Plaintiff
filed a response on March 14, 2016. See Dkt. #35. Defendants filed a reply on
March 24, 2016. See Dkt. #38. Defendants filed a Supplemental Motion to Dismiss on
March 22, 2016. See Dkt. #37. Plaintiff filed a response to the Supplemental Motion on
March 28, 2016. See Dkt. #39. Defendants filed a reply on April 6, 2016. See Dkt. #40.
In their motion to dismiss, Defendants argue “Plaintiff grossly exaggerates the
scope of the dispute by referencing previous federal fines assessed against OneMain’s
corporate parent and OneMain’s filings with the Securities and Exchange Commission
and claiming that Defendants’ attempt to collect on the Loan amounts to mail fraud and
credit collection by extortionate means in violation of the Racketeer Influenced and
Corrupt Organizations Act (‘RICO’).” See Dkt. #32 at p. 1. Defendants seek dismissal of
Plaintiff’s RICO claim for failure to state a plausible RICO claim. Specifically,
Defendants argue that Plaintiff failed to plead a RICO person; that Plaintiff failed to
sufficiently plead a pattern of racketeering in his allegations of mail fraud or credit
collection by extortionate means; that Plaintiff failed to plead a pattern of predicate acts;
that Plaintiff failed to plead a RICO enterprise; and that Plaintiff failed to plead a
subsection (d) RICO claim.
In their supplemental motion to dismiss, Defendants further argue that
(1) Plaintiff does not contend that Defendants associated with Citigroup as the alleged
RICO enterprise, and (2) Plaintiff does not contend that Defendants conducted or
participated in the conduct of the alleged RICO enterprise.
REPORT OF THE MAGISTRATE JUDGE
The Magistrate Judge first determined that Plaintiff failed to plead the necessary
elements of alleged predicate acts in support of his RICO claims. First, the court found
that Plaintiff failed to plead mail fraud, as Plaintiff had not stated the fraudulent
representation made by Defendants. Specifically, Plaintiff had not stated with
particularity any payment demands by Defendants on the Loan or how such demands
were false or constituted misrepresentations as to the payments owed under the Loan.
Further, the Magistrate Judge determined that Plaintiff did not sufficiently plead
credit collection by extortionate means, as Plaintiff’s complaint does not allege any
violence or threats of harm to Plaintiff by Defendants.
Therefore, the Magistrate Judge found that Plaintiff had simply not alleged any
predicate acts sufficient to plead a pattern of racketeering under RICO and moreover,
Plaintiff’s allegations did not state a pattern of predicate acts or the continuity required to
state a RICO claim. As recently explained by the Fifth Circuit:
“To establish continuity, plaintiffs must prove ‘continuity of racketeering
activity, or its threat.’” Word of Faith World Outreach Ctr. Church, Inc. v.
Sawyer, 90 F.3d 118, 122 (5th Cir. 1996) (quoting H.J. Inc. v. Nw. Bell
Tel. Co., 492 U.S. 229, 241, 109 S. Ct. 2893, 106 L .Ed.2d 195 (1989)).
“This may be shown by either a closed period of repeated conduct, or an
open-ended period of conduct that ‘by its nature projects into the future
with a threat of repetition.’” Id. (quoting H.J. Inc., 492 U.S. at 241, 109
S.Ct. 2893). Continuity over a closed period requires proof of “a series of
related predicates extending over a substantial period of time.” H.J. Inc.,
492 U.S. at 242, 109 S.Ct. 2893. “Predicate acts extending over a few
weeks or months and threatening no future criminal conduct do not satisfy
this requirement....” Id. Continuity over an open period requires “a threat
of continued racketeering activity.” Id. This may be established where the
predicate acts “themselves involve a distinct threat of long-term
racketeering activity” or “are part of an ongoing entity's regular way of
doing business.” Id. at 242–43, 109 S. Ct. 2893.
Zastrow v. Houston Auto Imports Greenway Ltd., 789 F.3d 553, 561 (5th Cir. 2015). The
Magistrate Judge determined that no facts were stated to show a pattern of racketeering
activity as required under the Fifth Circuit authority and, therefore, recommended that
Plaintiff’s RICO claims be dismissed. See In re MasterCard Int’l Inc., 313 F.3d 257, 264
(5th Cir. 2002) (“Because Thompson and Bradley cannot prove a necessary element of a
civil RICO claim, namely that the Defendants engaged in a pattern of racketeering
activity or the collection of unlawful debt, we hold that dismissal is proper under Rule
The court also found that even if Plaintiff was able to allege some predicate act,
he had not—and could not—allege an enterprise sufficient to state a RICO claim.
Plaintiff’s amended complaint lists Citigroup (“Citi”) as the RICO enterprise. See
Dkt. #31 at p. 4. Plaintiff identified Citi as the parent of Defendant OneMain, but it was
not pled that Defendants are or were employed by, or associated with, Citi as the RICO
enterprise. The Magistrate Judge concluded that this was insufficient to state a claim
under § 1962(c), particularly because there was no allegation that either Defendant acted
with members of the alleged Citi enterprise, nor was there an allegation that either
Defendant had a role in directing even some part of the alleged enterprise’s affairs. See
Reves v. Ernst & Young, 507 U.S. 170, 185 (1993).
The court concluded that since no RICO claim had been stated, Plaintiff failed to
state a conspiracy claim under 1962(d) as well. Further the Magistrate Judge determined
that Plaintiff did not sufficiently allege in his complaint that Defendants OneMain and
Merritt agreed to violate RICO, which would be necessary to prevail on a RICO
conspiracy claim. See N. Cypress Med. Ctr. Operating Co. v. Cigna Healthcare, 781 F.3d
182, 203 (5th Cir. 2015).
The Magistrate Judge, therefore, recommended the dismissal of Plaintiff’s claims
Plaintiff’s objections largely contain accusations and attacks against the integrity
of the court and Defendants rather than substantive responses to the Report of the
Magistrate Judge. Plaintiff contends that Defendants have avoided and continue to avoid
answering his charges by resorting to “shyster techniques.” See Dkt. #47 at p. 3. Plaintiff
presents no evidence or alleges any facts that could amount to improper actions by the
court or Defendants’ attorneys.
Plaintiff contends that he was blocked from needed evidence, citing a Rule 37
Motion to Compel Discovery (Dkt. #21) that he argues was ignored by the court. See Dkt.
#47 at pp. 2-3. Plaintiff argues that Defendants withheld information that would allow
him to detail parts of the complaint pertaining to RICO and the RICO nature of the
persons involved, the time span, the number of other victims, and the intent of
Defendants to continue in a similar manner. See Dkt. #47 at p. 3.
Far from being ignored, Plaintiff’s Rule 37 Motion to Compel Disclosure was
denied as moot on February 3, 2016. See Dkt. #28. After the Magistrate Judge withdrew
his initial report and recommendation, Plaintiff did not file an additional motion to
There is no ignored motion to compel disclosure before the
court. Further, the present motion relates to the sufficiency of Plaintiff’s pleadings, and
would not turn on discovery evidence sought by Plaintiff in his Motion to Compel.
Plaintiff asserts, for the first time, a specific payment amount that he contends is a
fraudulent representation. See Dkt. #47 at pp. 4-5. This issue is raised for the first time in
Plaintiffs' objections, and therefore, is not properly before the court. Finley v. Johnson,
243 F.3d 215, 218 n.3 (5th Cir. 2001) (issues raised for the first time in objections to the
Report of the Magistrate Judge are not properly before the District Court). Even
considering this, however, Plaintiff does not explain how the charge is false or constitutes
a misrepresentation of payment owed under the Loan. Even if the court found this
allegation stated a predicate act, Plaintiff fails to demonstrate a pattern of predicate acts
or the continuity required to state a RICO claim.
Plaintiff argues that his amended complaint clearly includes a claim for relief that
is so labeled. See Dkt. #47 at p. 5. Plaintiff confuses, however, the labeling of a claim for
relief and the assertion of a claim upon which relief could be granted. “To survive a
motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to
‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (quoting Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (1955)). The court does
not question whether Plaintiff identified and labeled what he views as claims for relief
due to RICO violations. See Dkt. #31 at pp. 4-7. The court’s determination on the present
motion to dismiss for failure to state a claim is focused, however, on whether Plaintiff
sufficiently alleges RICO claims such that relief could be possible.
Plaintiff further contends that Defendants have refused settlement offers, the
company Citi has been previously fined for predatory lending and other financial based
activities, and Plaintiff has a valid demand for a right to trial by jury. See Dkt. #47 at p. 5.
None of these arguments substantively contravene the findings of the Magistrate Judge.
The court has conducted a de novo review of the portions of the Magistrate
Judge's proposed findings and recommendations to which the Plaintiff objected. See
28 U.S.C. § 636(b)(1) (district judge shall “make a de novo determination of those
portions of the report or specified proposed findings or recommendations to which
objection is made.”) Upon such de novo review, the Court has determined that the Report
of the Magistrate Judge is correct and the Plaintiff's objections are without merit.
Accordingly, it is ORDERED that Plaintiff’s objections are overruled and the
Report of the Magistrate Judge (Dkt. #45) is ADOPTED as the opinion of the court.
It is further ORDERED that Defendants’ Motion to Dismiss Plaintiff’s Amended
Complaint Under Rule 12(b)(6) (Dkt. #32) and Defendants’ Supplemental Motion to
Dismiss Plaintiff’s Amended Complaint Under Rule 12(b)(6) (Dkt. #37) are GRANTED
and the above-styled civil action is DISMISSED WITH PREJUDICE.
All costs are taxed to Plaintiff. The Clerk of Court is directed to close the case.
So ORDERED and SIGNED this 16 day of December, 2016.
Ron Clark, United States District Judge
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