Town of Gulf Stream v. Martin E. O'Boyle , 654 F. App'x 439 ( 2016 )

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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 15-13433
Non-Argument Calendar
________________________
D.C. Docket No. 9:15-cv-80182-KAM
TOWN OF GULF STREAM,
a municipality organized and existing under the laws
of Florida on its own behalf and on behalf of those
municipalities similarly situated,
WANTMAN GROUP, INC.,
a domestic company on its own behalf
and on behalf of those companies similarly situated,
Plaintiffs - Appellants,
versus
MARTIN E. O'BOYLE,
an individual,
CHRISTOPHER O'HARE,
an individual,
WILLIAM RING,
an individual,
JONATHAN O'BOYLE,
an individual,
DENISE DEMARTINI,
an individual,
GIOVANI MESA,
an individual, et al.,
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Defendants - Appellees.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(June 21, 2016)
Before WILSON, ROSENBAUM and JILL PRYOR, Circuit Judges.
PER CURIAM:
The Town of Gulf Stream, Florida (“Gulf Stream” or the “town”) and its
contractor Wantman Group, Inc. (“Wantman”) (collectively the “plaintiffs”) appeal
the dismissal of their class action complaint 1 under the Racketeer Influenced and
Corrupt Organizations Act (“RICO”), 18 U.S.C. §§ 1962(c), 1964(c). The
plaintiffs’ complaint was premised on, among other actions, the defendants’
alleged efforts to inundate the town with public records requests in an attempt to
cause a violation of Florida’s Public Records Act, Fla. Stat. § 119.07 (the “Act”),
and then to threaten litigation and the possibility of liability for attorneys’ fees to
1
The plaintiffs defined the proposed class to include the following:
All state or local municipalities, municipal agencies, or private contractors in the
State of Florida, who have been served with a public records request by any of the
Defendants and who either (a) paid a settlement amount in conjunction with, or to
resolve the public records request; or (b) incurred attorneys’ fees and costs to
respond to or litigate against public records requests from any of the Defendants.
Compl. ¶ 31, Doc. 1. Citations to “Doc.” refer to docket entries in the district court record in this
case.
2
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extort an unreasonable settlement. The district court recognized the “very difficult
situation” the plaintiffs allegedly found themselves in, Doc. 47 at 4, but
nevertheless held that the plaintiffs failed to allege at least two predicate acts in
support of their RICO claim. After careful review, we agree that the plaintiffs’
allegations, although troubling, fail to state a claim under RICO. Therefore, we
affirm.
I.
Gulf Stream is a tiny town of under 1,000 residents and just 17 full time
employees.2 The defendants—Martin E. O’Boyle, William F. Ring, Christopher
O’Hare, Jonathan R. O’Boyle, Denise DeMartini, and their associated
companies—pummeled the town with nearly 2,000 public records requests, many
of them frivolous, with no intention of actually reviewing the results. Examples of
such requests included
• “All email addresses created or received by the Town of Gulf
Stream,” Compl. Ex. B, Doc. 4-2 at 2 (No. 1);
• “All phone numbers in the town’s records,” id. (No.3); and
• “Any and all records containing a social security number,” id. at
10, No. 322.
2
We derive these facts from the complaint’s well-pled allegations, which we accept as
true for purposes of the motions to dismiss. See Chaparro v. Carnival Corp., 693 F.3d 1333,
1335 (11th Cir. 2012).
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These and other bogus requests were “an essential first-step” in a “scheme to
defraud and extort money from the class members.” Compl. ¶ 37, Doc. 1.
The purpose of this onslaught of records requests was to induce a violation
of the Act and then threaten a lawsuit, or actually file one, which could entitle the
defendants to prevailing party attorneys’ fees under Fla. Stat. § 119.12.3 “It is this
threat of prevailing party attorneys’ fees,” the plaintiffs alleged, “that is the nucleus
around which the Defendants created their scheme to defraud and extort, and
organized their RICO Enterprise to carry out that scheme.” Compl. ¶ 52, Doc. 1.
The defendants then demanded unreasonable settlements and threatened to file
more frivolous records requests if the town did not settle the claims. Since 2013,
the defendants have filed 43 public records suits against the town. 4
3
Florida Statutes § 119.12 provides:
If a civil action is filed against an agency to enforce the provisions of this chapter
and if the court determines that such agency unlawfully refused to permit a public
record to be inspected or copied, the court shall assess and award, against the
agency responsible, the reasonable costs of enforcement including reasonable
attorneys’ fees.
Fla. Stat. § 119.12.
4
In addition to the public records disputes litigated in state court, Martin O’Boyle and the
town have had other disagreements, some of which have been litigated in federal court. See, e.g.,
O’Boyle v. Thrasher, Ward, & Town of Gulf Stream, No. 15-10997, __ F. App’x __, 2016 WL
158757 (11th Cir. Jan. 14, 2016) (affirming the district court’s dismissal of O’Boyle’s claims
against the town under 42 U.S.C. § 1983); O’Boyle v. Town of Gulf Stream, et al., No. 9:14-cv-
80317-DMM (S.D. Fla. Mar. 30, 2015) (granting the defendants’ motion for summary judgment
and dismissing a First Amendment challenge to the town’s sign ordinance), appeal docketed, No.
15-13964 (11th Cir. Sept. 3, 2015). We recently affirmed the award of attorneys’ fees in the
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In addition, defendant O’Hare employed aliases when making public records
requests to avoid incurring a special service charge the town would have otherwise
imposed. Florida authorizes the town to condition public records production on the
payment of certain costs and expenses, but only “[i]f the nature or volume of
public records requested to be inspected or copied . . . is such as to require
extensive use of information technology resources or extensive clerical or
supervisory assistance by personnel of the agency involved, or both.” Fla. Stat.
§ 119.07(4)(d). When the town began to assess special service charges against
O’Hare for his voluminous requests, he started using fake names to hide his
identity.
The defendants also lodged a bogus public records request with Wantman, a
government contractor also covered by the Act. See Fla. Stat. § 119.0701.5 When
the defendants did not receive the document requested, they filed suit and promptly
demanded nearly $4,000 to settle the claim.
§ 1983 action. O’Boyle v. Thrasher, Ward & Town of Gulf Stream, No. 15-10997, __ F. App’x
__, 2016 WL 1426013 (11th Cir. Apr. 12, 2016).
5
During the relevant time, Fla. Stat. § 119.0701(2) (2003) provided that “each public
agency contract for services must include a provision that requires the contractor to comply with
public records laws.” Florida recently amended this statute to specify precisely when a public
records requester may bring suit against a contractor. See 2016 Fla. Law Serv. ch. 2016-20
(CS/HB 273) (codified at Fla. Stat. § 119.0701(3)-(4) (2016)).
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Based on these and similar allegations, the plaintiffs filed a class action
complaint on their own behalf and on behalf of other similarly situated state or
local municipalities, municipal agencies, or private contractors. They alleged that
each defendant committed at least one predicate act of mail fraud, wire fraud, or
extortion, constituting a pattern of racketeering activity in violation of RICO, 18
U.S.C. §§ 1962(c), 1964(c). The defendants moved to dismiss arguing, among
other points, that neither filing frivolous public records requests nor threatening to
file or actually filing a lawsuit is a predicate act under RICO. The district court
agreed, granted the defendants’ motions to dismiss, and dismissed the case with
prejudice. This appeal followed.
II.
“We review de novo the district court’s grant of a Rule 12(b)(6) motion to
dismiss for failure to state a claim, accepting the complaint’s allegations as true
and construing them in the light most favorable to the plaintiff.” Chaparro v.
Carnival Corp., 693 F.3d 1333, 1335 (11th Cir. 2012) (internal quotation marks
and citation omitted). 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 Atl. Corp. v. Twombly, 550 U.S.
544, 570 (2007)). A complaint is insufficient if it “tenders naked assertions devoid
of further factual enhancement.” Id. (internal quotations marks and citation
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omitted). To survive a motion to dismiss, the plaintiff must plead “factual content
that allows the court to draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Id.
III.
To establish a federal civil RICO violation under §§ 1962(c) and 1964(c),
the plaintiffs must prove the conduct of an enterprise through a pattern of
racketeering activity and an injury to business or property by reason of the RICO
enterprise. See Williams v. Mohawk Indus., Inc., 465 F.3d 1277, 1282-83 (11th
Cir. 2006). The district court dismissed the plaintiffs’ RICO claim on the ground
that the plaintiffs failed to allege a pattern of racketeering activity. We therefore
focus on this element of the claim.
A RICO “pattern of racketeering activity” requires at least two “qualifying
predicate acts,” each of which constitutes “a violation of one of the state or federal
laws described in 18 U.S.C. § 1961(1).” Raney v. Allstate Ins. Co., 370 F.3d 1086,
1087 (11th Cir. 2004). The plaintiffs argue that they have adequately pled two
types of predicate acts: (1) extortion under the Hobbs Act, 18 U.S.C. § 1951, and
(2) mail and wire fraud under 18 U.S.C. §§ 1341, 1343. See 18 U.S.C. § 1961(1)
(listing violations of the Hobbs Act and the mail and wire fraud statutes). We
consider each type of predicate act in turn.
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A.
The Hobbs Act prohibits extortion, defined as “the obtaining of property
from another, with his consent, induced by wrongful use of actual or threatened
force, violence, or fear, or under color of official right.” 18 U.S.C. § 1951(b)(2).
The plaintiffs contend that the defendants’ “systematic use of unjustified lawsuits
as part of a more extensive extortion scheme to obtain money” supports a claim of
extortion under the Hobbs Act. Appellants’ Br. at 18. Our precedent commands
otherwise.
We held in United States v. Pendergraft that a “threat to file litigation
against [the government], even if made in bad faith and supported by false
affidavits, [was] not ‘wrongful’ within the meaning of the Hobbs Act.” 297 F.3d
1198, 1208 (11th Cir. 2002). The issue was whether a threat to add a bogus claim
in a federal lawsuit against a county government in an effort to force a large
settlement could support a Hobbs Act violation. “[U]nder our system,” we
explained, “parties are encouraged to resort to courts for the redress of wrongs and
the enforcement of rights.” Id. at 1206. Thus, “litigants may be sanctioned for
only the most frivolous of actions.” Id. And even then, such sanctions—through
tort actions for malicious prosecution, for example—“are heavily disfavored.” Id.
We also expressed confidence in the “time-tested procedures” of the courts to
resolve disputes in litigation by “separating validity from invalidity, honesty from
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dishonesty.” Id. Moreover, citizens have a constitutional right to petition the
government for redress under the First Amendment. Id. at 1207. For these
reasons, we rejected the contention that a threat to file litigation against the
government can trigger Hobbs Act liability. Id. at 1206-1207.
We clarified in Raney, a civil RICO case, that Pendergraft applies both to
threats of litigation and actual litigation. Raney, 370 F.3d at 1088. In Raney, the
plaintiff alleged that the defendants filed frivolous lawsuits in an effort to extort
money from him. Id. at 1087. We held unequivocally that “the filing of a lawsuit
may not state a claim for extortion under the federal RICO statutes.” Id.
The material difference between this case and Pendergraft or Raney is the
number of times the defendants allegedly threatened to file a lawsuit or actually
sued in an effort to extort money. Indeed, assuming the allegations in the
complaint are true, as we must, the defendants have engaged in a pattern of
frivolous litigation activity while abusing, on a grand scale, their statutory right to
request public documents from the government. Nonetheless, the same concerns
driving our decisions in Pendergraft and Raney are equally present here. Our
judicial system, and the Act in particular, encourages citizens to use the courts to
resolve public records disputes. Moreover, citizens have a constitutional right to
petition the government for redress. We believe that regardless of the scope and
scale of the litigation, the courts are amply equipped to deal with frivolous
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litigation. See, e.g., The Florida Bar v. Committe, 916 So. 2d 741, 749 (Fla. 2005)
(sanctioning an attorney for, among other things, “repeatedly attempt[ing] to
relitigate the same nonmeritorious issue in an attempt to frustrate the legal process
and to harass [an] attorney debt-collector”). Thus, Pendergraft and Raney control,
and the alleged misconduct cannot as a matter of law constitute the predicate act of
extortion for purposes of the plaintiffs’ civil RICO claim.
The plaintiffs also alleged that the defendants abused their right to request
public records; they argue on appeal that this abuse amounted to a RICO predicate
act. As alleged in the complaint, the defendants intentionally set the town up to
violate the Act. Whether it was a setup or not, the town may be on the hook for
attorneys’ fees if it failed to respond timely to the requests. See Bd. of Trustees,
Jacksonville Police & Fire Pension Fund v. Lee, 189 So. 3d 120, 124-25 (Fla.
2016) (holding that once the court determines that the defendant “unlawfully
refused” to permit a public record to be inspected or copied, the court must assess
reasonable attorneys’ fees, whether or not the defendant acted in good faith (citing
Fla. Stat. § 119.12)); Promenade D’Iberville, LLC v. Sundy, 145 So. 3d 980, 983
(Fla. 1st DCA 2014) (holding that a delay in producing non-exempt public records
for no legally sufficient reason constitutes a violation of the Public Records Act).
We nevertheless agree with the district court that the alleged abuse of the Act
“must be addressed in the individual lawsuits filed, or through a change in the laws
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by the Florida Legislature.” Doc. 47 at 8. RICO and the Hobbs Act in particular
do not provide the remedy the plaintiffs seek.
B.
The plaintiffs next contend that mail and wire fraud constitute the predicate
acts necessary to support their RICO claim. Specifically, they argue that O’Hare’s
use of aliases to avoid incurring a special service charge when lodging public
records requests amounted to fraud. We are unpersauded.
“The elements of mail and wire fraud are: (1) intentional participation in a
scheme to defraud, and, (2) the use of the interstate mails or wires in furtherance of
that scheme.” United States v. Maxwell, 579 F.3d 1282, 1299 (11th Cir. 2009).
“Nondisclosure of material information can constitute a violation of the mail and
wire fraud statutes where a defendant has a duty to disclose, either by statute or
otherwise.” McCulloch v. PNC Bank Inc., 298 F.3d 1217, 1225 (11th Cir. 2002);
accord Am. United Life Ins. Co. v. Martinez, 480 F.3d 1043, 1065 (11th Cir. 2007)
(holding that the failure to allege a duty to disclose is fatal to a RICO claim
premised on mail fraud arising out of alleged nondisclosure of material
information).
Although the plaintiffs argue that O’Hare’s concealment of his true identity
to avoid incurring a special service charge constituted fraud, they alleged no facts
to plausibly suggest that O’Hare had any duty to disclose that information. To the
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contrary, Florida law recognizes a person’s right to request public records
anonymously. See Chandler v. City of Greenacres, 140 So. 3d 1080, 1084-85 (Fla.
4th DCA 2014) (holding that a city cannot require a public records requester to
provide identifying information, which “could have a chilling effect on access to
public records and is not required by the Public Records Act”). Accordingly, the
plaintiffs failed to allege the predicate acts of mail and wire fraud to support their
RICO claim. Because we conclude that the plaintiffs’ mail and wire fraud
allegations fail on this basis,6 we do not consider the defendants’ alternative
reasons for rejecting it.
IV.
The allegations in the plaintiffs’ complaint paint a frustrating picture.
Accepting those allegations as true, the defendants have engaged in a concerted
effort to capitalize on the relatively unfettered access to public records Florida has
granted its citizens by bombarding small towns and municipalities with public
records requests to which they cannot respond adequately. As distasteful as this
6
See Thomas v. Cooper Lighting, Inc., 506 F.3d 1361, 1364 (11th Cir. 2007) (“We may
affirm the district court’s judgment on any ground that appears in the record, whether or not that
ground was relied upon or even considered by the court below.”).
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conduct may be, the allegations do not support a RICO claim under our precedent.
We therefore affirm the dismissal of the plaintiffs’ complaint. 7
AFFIRMED.
7
Some of the defendants have also filed a motion for sanctions under Federal Rule of
Appellate Procedure 38. We DENY that motion.
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