IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ALABAMASOUTHERN DIVISION DRUMMOND COMPANY, INC. and DRUMMOND LTD., Plaintiffsvs. TERRENCE P. COLLINGSWORTH, individually and as agent of Conrad & Scherer, LLP, International Rights Advocates, Inc., and Albert van Bilderbeek; CONRAD & SCHERER, LLP; WILLIAM R. SCHERER, JR., individually and as agent of Conrad & Scherer, LLP; INTERNATIONAL RIGHTS ADVOCATES, INC.; IVANALFREDO OTERO MENDOZA; FRANCISCO RAMIREZ CUELLAR; and ALBERT VAN BILDERBEEK,

Defendants. )))))))))))) ) ) ) ) ) ) ) ) Case No. 2:15-cv-00506-RDP DEFENDANTS CONRAD & SCHERER, LLPS AND WILLIAM R. SCHERER, JR.S MOTION TO DISMISS COMPLAINT Robert K. Spotswood Michael T. Sansbury William T. Paulk SPOTSWOOD SANSOM & SANSBURY LLC One Federal Place 1819 Fifth Avenue North, Suite 1050 Birmingham, Alabama 35203 Tel: 205-986-3620 Fax: 205-986-3639 rks@spotswoodllc.com msansbury@spotswoodllc.com wpaulk@spotswoodllc.com [Counsel list continued on next page] Attorneys for Conrad & Scherer, LLP and William R. Scherer, Jr. FILED 2015 Aug-12PM 12:40U.S. DISTRICT COURTN.D. OF ALABAMACase 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 1 of 58 Of Counsel for Defendants Conrad & Scherer, LLP and William R. Scherer, Jr. Kenneth E. McNeil Pro Hac Vice to be filed Texas State Bar No. 13830900 Stuart V. Kusin Pro Hac Vice to be filed Texas State Bar No. 11770100 SUSMAN GODFREY LLP 1000 Louisiana Street, Suite 5100 Houston, Texas 77002-5096 Telephone: 713/651-9366 Facsimile: 713/654-6666 kmcneil@susmangodfrey.com skusin@susmangodfrey.com Lindsey Godfrey EcclesPro Hac Vice to be filed WASB No. 33566 SUSMAN GODFREY LLP 1201 Third Avenue Suite 3800 Seattle, Washington 98101 Telephone: 206/516-3880Facsimile: 206/516-3883 leccles@susmangodfrey.com Christopher S. NiewoehnerPro Hac Vice to be filedSteptoe & Johnson LLP 115 South LaSalle Street, Suite 3100 Chicago, IL 60604 Tel: 312-577-1240 Fax: 312-577-1370 cniewoehner@steptoe.com Kendall R. Enyard Pro Hac Vice to be filedSteptoe & Johnson LLP 1330 Connecticut Avenue NW Washington, DC 20036 Tel: 202-429-6405 Fax: 202-429-3902 kenyard@steptoe.com Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 2 of 58 TABLE OF CONTENTS TABLE OF AUTHORITIES ......................................................................................................... iii INTRODUCTION ...........................................................................................................................1 ARGUMENT ...................................................................................................................................5 I.TheFirstAmendmentsPetitionClauseProhibitsRICO-based Collateral Attacks on Defendants Litigation Conduct ............................................5 A.TheAllegedRICOPredicateActsFailBasicPleading Requirements and Are Entirely Limited to Protected Litigation Conduct ........................................................................................................6 B.DefendantsLitigationConductisConstitutionallyProtected fromCollateralAttackBasedonFederalStatutoryLaw, Including RICO ..........................................................................................12 II.Even if Its Allegations of Litigation Misconduct are Accepted as True, DrummondShouldnotbeAllowedtouseRICOPredicateActsto Collaterally Attack the Underlying Litigation .......................................................16 A.UnderPendergraft,EvenBlatantLitigationMisconduct Cannot Support the Predicate Acts of Extortion, Mail Fraud or Wire Fraud .................................................................................................16 B.ThisCourtShouldRecognizethatPendergraftsReasoning AppliesEquallytotheAdditionalPredicateActsAlleged Here ............................................................................................................21 C.Any Sham Litigation Exception Does Not Apply ..................................24 D.After Pendergraft, District Courts in the Eleventh Circuit Have Properly Characterized Claims Based on Litigation Misconduct as Malicious Prosecution, Not Extortion ...................................................26 E.ThePendergraftAnalysisSurvivesEveninStateswithNear-Absolute Litigation Immunity....................................................................27 F.DespiteSurfaceSimilarities,ThisCaseisNothingLike Chevron v. Donziger ..................................................................................28 III.TheOnlyCognizableRICOInjuryDrummondAllegesisBarredby RICOsFour-YearStatuteofLimitations,anditThereforeLacks Standing to Sue ......................................................................................................31 Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 3 of 58ii A.DrummondsReputationalandIntangibleorSpeculative Business Injuries are Insufficient to Confer RICO Standing .................32 B.TotheExtentDrummondsRICOClaimRestsonItsLegal Fees Injury, it is Barred by the Injury Discovery Rule ............................35 IV.DrummondsRICOConspiracyClaimFailsfortheSameReasonsas Its RICO Claim ......................................................................................................43 V.Drummonds State Law Claims Also Fail .............................................................44 A.Civil Conspiracy ........................................................................................44 B.Willful Misrepresentation ..........................................................................44 C.Fraudulent Concealment ............................................................................45 CONCLUSION ..............................................................................................................................46 Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 4 of 58iii TABLE OF AUTHORITIES CASES Adell v. Macon Cnty. Greyhound Park, Inc., 785 F. Supp. 2d 1226 (M.D. Ala. 2011) ....................................................................... 6, 34 Agency Holding Corp. v. Malley-Duff & Assocs., Inc., 483 U.S. 143 (1987) .......................................................................................................... 36 Am. Dental Ass'n v. Cigna Corp., 605 F.3d 1283 (11th Cir. 2010) .............................................................................. 9, 11, 44 Am. Nursing Care of Toledo, Inc. v. Leisure, 609 F.Supp. 419 (N.D.Ohio 1984) .............................................................................. 18, 19 Ambrosia Coal & Const. Co. v. Pages Morales, 482 F.3d 1309 (11th Cir. 2007) ........................................................................................ 10 Andrx Pharm., Inc. v. Elan Corp., PLC, 421 F.3d 1227 (11th Cir. 2005) ........................................................................................ 26 Ashcroft v. Iqbal, 556 U.S. 662 (2009) ...................................................................................................... 7, 11 Atico Intern. USA, Inc. v. LUV N'Care, Ltd., No. 09-60397-CIV-COHN, 2009 WL 2589148 (S.D. Fla. Aug. 19, 2009) ..................... 24 Auburn Med. Ctr., Inc. v. Andrus, 9 F.Supp.2d 1291 (M.D.Ala. 1998) ............................................................................ 19, 20 BE&K Construction Co. v. NLRB, 536 U.S. 516 (2002) .............................................................................................. 13, 14, 25 Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) ........................................................................................................ 7, 8 Blackburn v. Calhoun, No. 207CV166, 2008 WL 850191(N.D. Ala. Mar. 4, 2008) ...................................... 37, 38 Boothby Realty Co. v. Haygood, 114 So. 2d 555 (Ala. 1959) ........................................................................................... 6, 18 Brooks v. Blue Cross & Blue Shield of Fla., Inc., 116 F.3d 1364 (11th Cir.1997) ..................................................................................... 9, 10 Bryant v. Avado Brands, Inc., 187 F.3d 1271 (11th Cir. 1999) ........................................................................................ 39 Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 5 of 58iv California Motor Transport Co. v. Trucking Unlimited, 404 U.S. 508 (1972) .......................................................................................................... 13 Chevron Corp. v. Donziger, 974 F.Supp. 2d 362 (S.D.N.Y. 2014)................................................................................ 29 City of Chicago Heights, Ill. v. Lobue, 914 F. Supp. 279 (N.D. Ill. 1996) ..................................................................................... 33 Columbia Pictures Indus., Inc. v. Prof'l Real Estate Investors, Inc., 944 F.2d 1525 (9th Cir. 1991) .................................................................................... 14, 15 Daddona v. Gaudio, 156 F.Supp.2d 153 (D.Conn. 2000) .................................................................................. 19 Deck v. Engineered Laminates, 349 F.3d 1253 (10th Cir. 2003) ........................................................................................ 22 Driver v. W.E. Pegues, Inc., No. 7:11-CV-1374 LSC, 2012 WL 3042939 (N.D. Ala. July 19, 2012) .......................... 44 Dysart v. BankTrust, No. CV-11-RRA-1917-S, 2012 WL 2577534 (N.D. Ala. Apr. 12, 2012) ........................ 37 E. R. R. Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127 (1961) .......................................................................................................... 13 First Pacific Bancorp, Inc. v. Bro, 847 F.2d 542 (9th Cir. 1988) ............................................................................................ 18 Foremost Ins. Co. v. Parham, 693 So. 2d 409 (Ala. 1997) ............................................................................................... 45 GI Holdings, Inc. v. Baron & Budd, 179 F.Supp.2d 233 (S.D.N.Y. 2001)................................................................................. 18 Green Leaf Nursery v. E.I. DuPont De Nemours & Co., 341 F.3d 1292 (11th Cir. 2003) .................................................................................. 28, 29 Grogan v. Platt, 835 F.2d 844 (11th Cir. 1988) .......................................................................................... 32 Gunn v. Palmieri, No. 87 CV 1418, 1989 WL 119519 (E.D.N.Y. Sept. 29, 1989) ....................................... 11 Hamm v. Rhone-Poulenc Rorer Pharm., Inc., 187 F.3d 941 (8th Cir. 1999) ............................................................................................ 33 Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 6 of 58v Harrington v. JohnsonRast & Hays Co., 577 So.2d 437 (Ala.1991) ................................................................................................. 45 Heights Cmty. Cong. v. Smythe, Cramer Co., 862 F.Supp. 204 (N.D.Ohio 1994) .................................................................................... 18 I.S. Joseph Co. v. J. Lauritzen A/S, 751 F.2d 265 (8th Cir. 1984) .................................................................................. 5, 18, 24 In re AndroGel Antitrust Litig. (No. II), 888 F. Supp. 2d 1336 (N.D. Ga. 2012) ............................................................................. 26 In re Terazosin Hydrochloride Antitrust Litig., 335 F. Supp. 2d 1336 (S.D. Fla. 2004) ............................................................................. 25 In re Towne Services, Inc. Securities Litigation, 184 F.Supp.2d 1308 (N.D. Ga. 2001) ................................................................................. 5 Jackson v. Bellsouth Tele., Inc., 181 F.Supp.2d 1345 (S.D. Fla. 2001) ............................................................................... 11 Jones v. BP Oil Co., Inc., 632 So.2d 435 (Ala.1993) ........................................................................................... 44, 45 Kimm v. Chang Hoon Lee & Champ, Inc., 196 F. App'x 14 (2d Cir. 2006) ......................................................................................... 34 Klehr v. A.O. Smith Corp., 521 U.S. 179, 117 S.Ct. 1984, 138 L.Ed.2d 373 (1997) ................................................... 38 Lawson v. Harris Culinary Enterprises, LLC, 83 So. 3d 483 (Ala. 2011) ................................................................................................. 46 Levin, Middlebrooks, Mabie, Thomas, Mayes & Mitchell, P.A. v. U.S. Fire Ins. Co., 639 So. 2d 606 (Fla. 1994)................................................................................................ 28 Levitan v. Patti, No. 3:09CV321 MCR MD, 2011 WL 1299947 (N.D. Fla. Feb. 8, 2011) ........................ 27 Livingston Downs Racing Ass'n, Inc. v. Jefferson Downs Corp., 257 F. Supp. 2d 819 (M.D. La. 2002) ......................................................................... 21, 27 Maio v. Aetna, Inc., 221 F.3d 472 (3d Cir. 2000)........................................................................................ 34, 35 Maiz v. Virani, 253 F.3d 641 (11th Cir. 2001) .......................................................................................... 37 Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 7 of 58vi McCaleb v. A.O. Smith Corp., 200 F.3d 747 (11th Cir. 2000) .......................................................................................... 38 McGuire Oil Co. v. Mapco, Inc., 958 F.2d 1552 (11th Cir. 1992) .................................................................................. 13, 23 Oscar v. Univ. Students Co-op. Ass'n, 965 F.2d 783 (9th Cir. 1992) ............................................................................................ 35 Patterson v. Mobil Oil Corp., 335 F.3d 476 (5th Cir. 2003) ............................................................................................ 34 Paul S. Mullin & Assocs., Inc. v. Bassett, 632 F.Supp. 532 (D.Del. 1986) ......................................................................................... 19 Powell v. Gorham, No. 2:13-CV-0055-LSC, 2013 WL 3151632 (N.D. Ala. June 14, 2013) ......................... 36 Prof'l Real Estate Investors, Inc. v. Columbia Pictures Indus., Inc., 508 U.S. 49 (1993) ...................................................................................................... 24, 26 Raney v. Allstate Ins. Co., 370 F.3d 1086 (11th Cir. 2004) ........................................................................................ 22 Regions Bank v. J.R. Oil Co., LLC, 387 F.3d 721 (8th Cir. 2004) ............................................................................................ 34 Rogers v. Nacchio, 241 Fed.Appx. 602 (11th Cir. 2007) ................................................................................. 44 Rotella v. Wood, 528 U.S. 549 (2000) ........................................................................................ 36, 37, 38, 41 Simpson v. Sanderson Farms, Inc., 744 F.3d 702 (11th Cir. 2014) .............................................................................. 2, 3, 4, 34 Snyder v. Faget, 295 Ala. 197, 326 So. 2d 113 (1976) ................................................................................ 45 Sosa v. DIRECTV, Inc., 437 F.3d 923 (9th Cir. 2006) ...................................................................................... passim Special Purpose Accounts Receivable Co-op. Corp. v. Prime One Capital Co., 202 F. Supp. 2d 1339 (S.D. Fla. 2002) ............................................................................. 11 Steele v. Hosp. Corp. of Am., 36 F.3d 69 (9th Cir.1994) ............................................................................................... 6, 7 Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 8 of 58vii United Mine Workers v. Pennington, 381 U.S. 657 (1965) .......................................................................................................... 12 United States v. Pendergraft, 297 F.3d 1198 (11th Cir. 2002) ................................................................................. passim Vemco, Inc. v. Camardella, 23 F.3d 129 (6th Cir. 1994) .............................................................................................. 18 von Bulow v. von Bulow, 657 F.Supp. 1134 (S.D.N.Y. 1987) .................................................................................. 19 Warnock v. State Farm Mut. Auto. Ins. Co., 833 F. Supp. 2d 604 (S.D. Miss. 2011)............................................................................. 21 Williams v. Mohawk Indus., Inc., 465 F.3d 1277 (11th Cir. 2006) .................................................................................... 2, 32 STATUTES 18 U.S.C. 1343 ....................................................................................................................... 3, 10 18 U.S.C. 1503 ....................................................................................................................... 3, 10 18 U.S.C. 1512 ....................................................................................................................... 3, 10 18 U.S.C. 1951 ............................................................................................................................. 3 18 U.S.C. 1956(a)(2)(A) ............................................................................................................ 10 18 U.S.C. 1961 ............................................................................................................................. 1 18 U.S.C. 1962 ................................................................................................................... 2, 8, 32 18 U.S.C. 1962(c) and (d) .......................................................................................................... 21 18 U.S.C. 1964(c) ...................................................................................................... 2, 32, 33, 35 18 U.S.C. 1965(a)(2)(A) .............................................................................................................. 3 18 U.S.C. 201 ......................................................................................................................... 3, 10 18 U.S.C.A. 1951(a) .................................................................................................................... 9 18 U.S.C.A. 1951(b)(2)................................................................................................................ 9 28 U.S.C. 1927 ........................................................................................................................... 30 Alabama Code Section 6-5-101 .................................................................................................... 45 Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 9 of 58viii Alabama Code Section 6-5-102 .................................................................................................... 46 U.S. Const. Amend. I ...................................................................................................................... 5 RULES Fed. R. Civ. P. 12(b)(6)................................................................................................................... 1 Fed. R. Civ. P. 60(b)(3)................................................................................................................. 28 Fed. R. Civ. P. 9(b) ....................................................................................................... 9, 11, 45, 46 Fed. R. Evid. 201(b)(2) ................................................................................................................. 39 OTHER AUTHORITIES 54 C.J.S. Malicious Prosecution 4 at 525 (1987) ....................................................................... 18 Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 10 of 581 PursuanttoFederalRulesofCivilProcedure12(b)(6)and9(b),DefendantsWilliamR. Scherer and Conrad & Scherer LLP (Defendants)1 respectfully move the Court to dismiss with prejudice the Complaint brought by Drummond Company, Inc. and Drummond Ltd. (Plaintiffs orDrummond)undertheprovisionsoftheRacketeerInfluencedandCorruptOrganizations Act (RICO), 18 U.S.C. 1961, et seq.INTRODUCTION At the outset of this 192-page Complaint, Drummond promises to prove that Defendants have targeted it with a massive scheme to extort.See, e.g., Compl. 1.But not a single one of the 228 predicate acts enumerated in the five Appendices alleges Hobbs Act extortion.Compl. 196,AppendicesA-E.Indeed,areaderlookingforpredicateactsofextortionsearches dozens and dozens of pages in vain, until one paragraph on page 70 alludes to a single phone call proposingsettlementnegotiationsthatneverhappened.Compl.142.Drummondallegesno further Hobbs Act violations.Nor could it, because Defendants actions targeting Drummond, Compl.50,153,198,arepurelitigationconduct,andthereforeprotectedbytheFirst Amendment.This case is not about a scheme to extort.Heres what it is about. DefendantsWilliamSchererandConrad&Schererarearespected,experienced triallawyerandhisfirm,whohavebroughtseverallawsuits(theUnderlying Litigation)2againstDrummondbasedonitsminingoperationsinColombia.Compl. 1. 1DefendantsWilliamR.SchererandConrad&SchererLLPjoinintheargumentspresentedinDefendant Collingsworths concurrently-filed Motion to Dismiss. 2TheUnderlyingLitigationconsistsofJuanAquasRomerov.DrummondCompany,Inc.,etal.,No.7:03-cv-00575-KOB,(N.D.Ala.March13,2003),(Romero);FreddyLocarnoBaloco,etal.,v.DrummondCompany, Inc.,etal.,No.7:09-cv-00557-RDP(N.D.Ala.March20,2009)(Baloco);JaneDoe1,etal.,v.Drummond Company, Inc., et al., No. 2:09-cv-01041-RDP (N.D. Ala. May 27, 2009) (Balcero); and Marisol Melo Penaloza, etal.v.DrummondCompany,Inc.,etal.,No.2:13-cv-00393-RDP(N.D.Ala.Feb.26,2013)(Melo).Ofthese four lawsuits,Meloalonesurvives, and theparties inMelorecently responded to an order from theCourt to show cause why that case should not be dismissed as well.Melo, Dkt. Nos. 52, 53. Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 11 of 582 Over a fifteen year period, Defendants have lost every one of those cases either on a dispositive motion or after a jury trial except for certain remaining claims in one action.See supra n. 1. Defendants have received nothing in settlement recoveries much less extorted a single dime from Drummond.See id. Thevictimoftheallegedextortionateschemeisacompanyownedbywhat ForbesMagazinecallstherichestmaninAlabamawhohasvirtuallyunlimited resourcestothrowatlitigationagainstthesehumanrightslawyers.See http://www.forbes.com/pictures/emlm45fedgm/alabama/ (visited Aug. 10, 2015). ToestablishtheirallegedfederalRICOcivilviolationsDrummondmustsatisfyfour elementsofproof:(1)conduct(2)ofanenterprise(3)throughapattern(4)ofracketeering activity.IncivilcasesRICOplaintiffsmustalsosatisfytherequirementsof18U.S.C. 1964(c)(1)therequisiteinjurytobusinessorproperty,and(2)thatsuchinjurywasby reasonofthesubstantiveRICOviolation.Williamsv.MohawkIndus.,Inc.,465F.3d1277, 1282-83(11thCir.2006)(internalcitationsomitted).Racketeeringactivityisshownby allegingapatternofpredicateactsunder18U.S.C.1962.Simpsonv.SandersonFarms, Inc., 744 F.3d 702, 705(11th Cir. 2014).Those predicate acts must proximately cause the injury suffered by Drummond to its business or property.Id. In the Appendices to the Complaint, Drummond alleges no less than 228 violations of various federal criminal statutes.Compl., Apps. A-E.These are the alleged predicate acts that form the basis of Drummonds RICO claims.Compl. 196.Appendices A, B and C deal with witnessassistancepaymentsmadetothefamiliesofsomeofthewitnesseswhoprovided testimonyintheUnderlyingLitigation,topromotetheirsafetyinwhatwasbecomingavery dangeroussituationinColombia.ThesethreeAppendicesgenerally(andconclusorily)allege violationsof18U.S.C.1343(wirefraud);18U.S.C.201(witnessbribery);18U.S.C. 1965(a)(2)(A) (money laundering); 18 U.S.C. 1503 (obstruction of justice); [and] 18 U.S.C. 1512 (witness tampering).See Compl., Apps. A-C.Appendix D provides a list of declarations, Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 12 of 583 interrogatoryresponsesandotherlitigationdocumentsfiledand/orservedbysomeofthe Defendantsthatallegedlyconcealedthosewitnessassistancepayments.Compl.,App.D.Drummond alleges in asimilarly conclusoryfashion that these documents and other statements violatedfederallawagainstobstructionofjusticeandmailandwirefraud.AppendixElistsa numberofequallyconclusoryviolationsofthefederalwireandmailfraudstatutesbasedon Defendantscommunicationswiththepress,governmentofficials,humanrightsorganizations, and Defendant Albert van Bilderbeek.Compl., App. E. There is no Appendix F listing predicate acts for extortion. Although Drummond accuses Defendants of scheming to extort and recites the elements of Hobbs Act extortion, 18 U.S.C. 1951, Compl. 183-88, not one of the 228 violations alleged in the Appendices is as alleged tobeapredicateactofextortion.Theonlyclearlyidentifiedpredicateallegationof extortionisDefendantWilliamScherersunsuccessfulsettlementovertureinJune2012.Compl.142.ThisextortionateactconsistedofasinglephonecallfromMr.Scherer, ManagingPartnerattheConrad&SchererlawfirminFlorida,toalawyeratAkinGumpin WashingtonandfellowfriendofPresidentGeorgeW.Bush,whointurncalledhisfriend William Jeffries at Baker Botts in Houston to see if there was a way to end this matter.He was told,Hellno.Thatistheextortionthatisthecornerstoneofthiscase.Thisoverturewas rejected, and thus, wrongful or not, caused no injury.See id.If they were true, which they are not, Drummonds allegations might support a malicious prosecution or sanctions action.But the flaws in its RICO claim are fatal. TheFirstAmendmentsPetitionClauseprotectsDefendantslitigationconduct, andtheEleventhCircuitexplicitlyrejectstargetinglitigationconductwitha RICO action based on extortion. Drummond has been aware of its sole quantifiable injurypayment of attorney feessince 2003, when the Underlying Litigation began.See Compl. 7; infra Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 13 of 584 III.B.As a result, its claims are time-barred under RICOs injury discovery rule.Id.Andofcourse,Drummondhasknownabouttheallegedlyfraudulentand false allegations in the Underlying Litigation for just as long. AndthoughDrummonddoesitsbesttoshoehornthefactsofthiscaseintothe SouthernDistrictofNewYorksChevronv.Donzigercase,Donzigerwasan attemptbyChevrontousetheUnitedStatescourtstoremedylitigation misconductresultinginafraudulently-obtainedmultibillion-dollarjudgmentthattheEcuadorianjudicialsystemseemedincapableofremedyingitself.See infra II.F.3 Drummonds RICO claim is, among other things, ridiculous.To the extent that Defendants have tried to extract any windfall from Drummond, extortionate or otherwise, that attempt has been a miserable, ongoing failure.See infra n. 1.As the Court is well aware, all but one of the suits in the Underlying Litigation have already resulted in dismissal or a loss at trial.Id.Drummond hasalreadysuedDefendantsfordefamationinthissameCourt,basedonmanyofthesame allegedactsthatformthepredicatesofthisso-calledRICOclaim.DrummondCo.,Inc.v. Collingsworth, et al., No. 2:11-cv-03695-RDP (N.D. Ala. 2011). Defendants are prepared to continue to vigorously defend that defamation suit by proving the truth of the allegedly libelous statements.Ithas been reported that in late May 2015, a key Drummondexecutive,AlfredoAraujo,wasdetainedbyColombianauthoritiesinconnection withthemurdersin2002oftheDrummondunionofficials.See http://colombiareports.com/drummond-executive-arrested-over-paramilitary-murder-charges/ (visited August 10, 2015).4The factsarefinallystarting to come out, and Drummonds RICO allegationsarenothingmorethanadesperateploytodistractthecourtfromthetruth.DefendantsrespectfullyurgetheCourtnottoallowitselftobetakenin.Itshoulddismiss 3 Donziger is not, of course, precedential, and as argued below in Section II.F., it is not at all clear that the Eleventh Circuit would affirm its outcome if it were.The Donziger appeal was argued to a Second Circuit panel on April 20, 2015.Chevron Corp. v. Stephen Donziger, et al., No. 14-826 (2d Cir.). 4TheCourtmaytakejudicialnoticeofpressaccountstoestablishthatparticularstatementsweremadeifnot necessarilyforthetruthofthosestatements.SeeInreTowneServices,Inc.SecuritiesLitigation,184F.Supp.2d 1308, 1313 (N.D. Ga. 2001).Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 14 of 585 DrummondsfrivolousclaimsandinsteadrefocusitsandthepartiesenergiesonDrummonds libel suit, where Defendants eagerly await the opportunity to show the jury what has really been going on in Colombia for the last fourteen years. Defendants urge the Court to DISMISS Drummonds RICO claims WITH PREJUDICE. ARGUMENT I.The First Amendments Petition Clause Prohibits RICO-based Collateral Attacks on Defendants Litigation Conduct Judgesandlawyersoftencomplainthatthecourtsareinundatedwithafloodof litigation, but the fact remains that litigation is as American as apple pie. I.S. Joseph Co. v. J. Lauritzen A/S, 751 F.2d 265, 26768 (8th Cir. 1984).Nothing is more apple pie than the First Amendment and our right to petition the Government for a redress of grievances.U.S. Const. Amend. I.Courts, including the Eleventh Circuit, routinely urge limits on the civil RICO action andcautionagainstitsmisuseasacollateralattackonprotectedlitigationconduct.See,e.g., UnitedStatesv.Pendergraft,297F.3d1198,1207(11thCir.2002)(Sanctionsforfiling lawsuitsleadtocollateraldisputesandapilingoflitigationonlitigationwithoutend.Allowinglitigantstobechargedwithextortionwouldopenyetanothercollateralwayfor litigants to attack one another.) (quotingBoothby Realty Co. v. Haygood, 114 So. 2d 555, 559 (Ala. 1959)).See also Adell v. Macon Cnty. Greyhound Park, Inc., 785 F. Supp. 2d 1226, 1237 (M.D. Ala. 2011) ([T]he statutory standing requirement ensures that RICO is not expanded to provide a federal cause of action and treble damages to every tort plaintiff.) (quoting Steele v. Hosp. Corp. of Am., 36 F.3d 69, 70 (9th Cir.1994)).Most courts focus on misuse of the RICO statutebydisappointedlitigantswhowouldleverageRICOtounderminethefinalityofa judgment that did not go their way.See infra at II.D., E.By contrast, Drummond has mounted Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 15 of 586 thiscollateralattackonalegalprocessinwhichithasbeenalmostuniformlytriumphant.See supra n. 1. A.The Alleged RICO Predicate Acts Fail Basic Pleading Requirements and Are Entirely Limited to Protected Litigation Conduct As explained in the Introduction, the alleged RICO predicate actsaside from one phone callbyDefendantScherer,uponwhichreststhesoleallegationofextortionconsistof228 so-calledviolationsthatarelistedinwhatmightgenerouslybedescribedasaconclusory mannerinthefiveAppendicestotheComplaint.Mostoftheseviolationsareallegedtobe wireand/ormailfraud,aswellas,inmanycases,witnessbribery,moneylaundering, obstructionofjustice,and/orwitnesstampering.Compl.,Apps.A-E.Eachofthe violationsinAppendicesAthroughD,5whichgenerallydealwithassistancepaymentsto witnesses in the Underlying Litigation and statements regarding the same to opposing parties or the Court, is intimately related to and inseparable from the conduct of the Underlying Litigation against Drummond.Id.For this reason, as explained in Section II.B. below, Drummonds RICO claim,ifallowed,wouldimpermissiblyburdenDefendantsFirstAmendmentrightstopetition the courts. DrummondsallegationsmustmeetthebasicTwombly/Iqbalstandardand,where applicable,themorestringentrequirementsofRule9(b).Tosurviveamotiontodismiss,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 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).Determining whether a complaint states a plausible claim for relief [is] ... a context-specific task that requires the reviewing court to draw on its judicial experience andcommonsense.Iqbalat679(citationomitted).[F]acialplausibilityexistswhenthe 5 Appendix E is a reprise of the allegations in Drummonds libel suit.See supra I.A.2. Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 16 of 587 plaintiffpleadsfactualcontentthatallowsthecourttodrawthereasonableinferencethatthe defendant is liable for the misconduct alleged.Iqbal at 678 (citing Twombly, 550 U.S. at 556).Thestandardalsocallsforenoughfactstoraiseareasonableexpectationthatdiscoverywill reveal evidence of the claim.Twombly, 550 U.S. at 556.Factual allegations must be enough to raise a right to relief above the speculative level.Id. at 555. The descriptions of each individual violation fail to enumerate or, in most cases, even refertotheelementsofthepredicateactslisted.InAppendicesAthroughCattheleast,they utterlyfailtoexplainhowtheinformationintheDescriptioncolumnismeanttoinformthe conclusorylegalcitationsintheViolationscolumn.NoneoftheseViolationspleada plausibleclaimforrelief,andfewofthemprovidesufficientnoticeorindeedanynoticeto Defendant Scherer or his law firm as to how they might go about defending against Drummonds claims.1.Drummonds Allegations as to Defendant William Scherer Fail to Meet Twombly Standards AstoDefendantWilliamScherer,DrummondentirelyfailstomeettheTwombly standard.Infact,DefendantSchereriscitedintheAppendicesonlyonetime,forsigningan unidentifiedfilingexplainingwhywitnessassistancepaymentswerenecessaryinthe UnderlyingLitigation.App.D,#18.AlthoughDrummondimpliesthatMr.Schererthereby committedobstructionofjustice,mail,andwirefraud,itfailstoexplainhowthisfiling allegedlymettherequirementsofanyofthosepredicateacts.Asidefromconclusoryand implausibleallegationsthatBillSchererknewofandapprovedthewitnessassistance payments listed in the Appendicesand dozens more not listedthe Complaint entirely fails to explainhowMr.Schererallegedlyconduct[ed]orparticipate[d],whetherdirectlyor indirectly, in theconduct of [the] enterprise's affairs througha pattern of racketeering activity.Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 17 of 588 18 U.S.C.A. 1962 (West). See Compl. 77, 89, 116, 132.The Complaint does not contain a singlefactualallegationexplaininghowMr.Schererallegedlyapprovedthosepaymentsor conducted the alleged payment scheme. DrummondsonlyallegationfocusedonMr.Scherersownconduct,dramatically entitledTheAsk,describesanunsuccessfulattempttoengageDrummondinpreliminary settlement negotiations.Compl. 142.Mr. Scherer did not ask Drummond for anything; he simplyaskedamutualfriendwhetherDrummondmightperhapsbewillingtoconsider settlement discussions.Id.The Ask fails to plausibly state a claim pursuant to the Hobbs Act:Whoeverinanywayordegreeobstructs,delays,oraffectscommerceorthe movementofanyarticleorcommodityincommerce,byrobberyorextortionor attemptsorconspiressotodo,orcommitsorthreatensphysicalviolencetoany person or property in furtherance of a plan or purpose to do anything in violation ofthissectionshallbefinedunderthistitleorimprisonednotmorethantwenty years, or both. 18U.S.C.A.1951(a).ExtortionasdefinedforHobbsActpurposesrequiresobtainingof property fromanother,with his consent, induced by wrongful use ofactual or threatened force, violence, or fear, or under color of official right. 18 U.S.C.A. 1951(b)(2).The notion that Mr. ScherersattempttoengageDrummondinsettlementnegotiationsviaamutualacquaintance somehow equates to wrongful use of actual or threatened force, violence, or fear is implausible under Twombly standards and would also be offensive were it not so thoroughly ridiculous.As to Mr. Scherer, Drummonds allegations entirely fail to state a claim and should be dismissed. 2.Drummonds Mail and Wire Fraud Allegations Fail to Meet Rule 9(b) Standards PredicateactsofmailandwirefraudmustbepledincompliancewithFed.R.Civ.P. 9(b)s heightened pleading standard, which requires that [i]n alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake.Am. Dental Ass'n v. Cigna Corp., 605 F.3d 1283, 1291 (11th Cir. 2010). [P]ursuant to Rule 9(b), a plaintiff must Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 18 of 589 allege:(1)theprecisestatements,documents,ormisrepresentationsmade;(2)thetime,place, andpersonresponsibleforthestatement;(3)the contentandmannerinwhichthesestatements misledthePlaintiffs;and(4)whatthedefendantsgainedbytheallegedfraud.Am.Dental, 605 F.3d at 1291 (citing Brooks v. Blue Cross & Blue Shield of Fla., Inc., 116 F.3d 1364, 138081 (11th Cir.1997) The plaintiff must allege facts with respect to each defendants participation in the fraud.Am. Dental, 605 F.3d at 1291 (citing Brooks, 116 F.3d at 1381).Drummondfailstopleaditsmailandwirefraudpredicateactswhichincludealmost every single Violation in each of the five Appendiceswith particularity as required by Rule 9(b).Specifically, Drummond fails to allege for each act (3) the content and manner in which these statements misled the Plaintiffs; and (4) what the defendants gained by the alleged fraud.Id.at1291(emphasisadded).Drummondalsofailstoallegefactswithrespecttoeach defendantsparticipationinthefraud.Id.(emphasisadded).Tobeclear,acivilRICO complaintbasedonmailorwirefraudmustincludespecificallegationswithrespecttoeach defendant.Ambrosia Coal & Const. Co. v. Pages Morales, 482 F.3d 1309, 1316-17 (11th Cir. 2007) (citing Brooks, 116 F.3d at 1381) (noting that in Brooks the plaintiffs lumped together all of the defendants in their allegations of fraud.). [I]n a case involvingmultiple defendants ... thecomplaintshouldinformeachdefendantofthenatureofhisallegedparticipationinthe fraud. Ambrosia, 482 F.3d at 1317 (citing Brooks, 116 F.3d at 1381). Merelyasanexample,thefirstviolation,typicalofthoselistedinAppendicesA throughC,whichdealwithwitnessassistancepayments,identifiesanallegedpaymenttoa womannamedMeryLuzMolinaMoralesfromamannamedRicardoGarzon,anallegedco-Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 19 of 5810 conspirator.6Compl.,App.Aatp.1.Ms.Molinaisallegedtobeamemberorfriendof Charriss family.Id.The Method is alleged to be an International wire followed by a cash depositintoCharrisbankaccount.Id.TheDescriptionexplainsthatRichardGordon withdrawscashfromConrad&ScherersbankaccountintheUnitedStatesandsendsitvia Western Union to Colombia to Ricardo Garzon, a member of Collingsworths litigation team and co-conspirator.Garzonthendeposits3,000,000ColombianpesosintoCharriswifes Colombianbankaccount.Id.Andfinally,theViolationscolumnsimplylists18U.S.C. 1343(wirefraud);18U.S.C.201(witnessbribery);18U.S.C.1956(a)(2)(A)(money laundering);18U.S.C.1503(obstructionofjustice);18U.S.C.1512(witnesstampering).Id. Thisfirstviolationfailstomeetbasicpleadingrequirements.AlthoughDrummond assurestheCourtthateachoftheviolationsasallegedinAppendixAinclud[es]howit furthered the fraudulent scheme, Compl. 180; in fact it does not.Compl., App. A at p. 1.The violationsimplydescribesthefactofapaymentbyoneallegednon-partyco-conspirator, nothing more.[T]he tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action,supportedbymereconclusorystatements,donotsuffice.Ashcroftv.Iqbal,556U.S. 662, 678 (2009).The first violation also fails Rule 9(b)s requirement that mail and wire fraud allegationsbepleadedwithparticularityandshoweitherhowDrummondwasmisledbythe alleged fraud or what any Defendant gained thereby.See Am. Dental, 605 F.3d at 1291.It also fails to allege specific facts with respect to each (or indeed, any) Defendants participation.Id. 6 Defendants include this discussion of alleged witness assistance payments to Ms. Molina subject to their objection that Drummond included this information in theComplaintin violation of this Courts protectiveorder.By doing so, Defendants do not waive any relevant objections to Drummonds misuse of confidential information. Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 20 of 5811 Thefollowing227allegedviolationsaresimilarlydeficient.Asanotherexample, eachofthelineitemsinAppendixDisallegedtobeanobstructionofjustice.Seealso Compl.190-192.AppendixDisalistofCourtFilingsandSwornTestimonyinwhich Defendants allegedly Fraudulently Conceal[ed] the witness payments described in Appendices AthroughC.Compl.,App.D.p.1.Mereactsofconcealment,however,maynotbe consideredpredicateactsunderEleventhCircuitlaw.SpecialPurposeAccountsReceivable Co-op.Corp.v.PrimeOneCapitalCo.,202F.Supp.2d1339,1351(S.D.Fla.2002)(citing Jackson v. Bellsouth Tele., Inc., 181 F.Supp.2d 1345, 1360 (S.D. Fla. 2001) (noting that [u]nder EleventhCircuitlaw,litigationactivitiesthatarenothingmorethanattemptstocoverup other acts are legally insufficient to establish predicate acts)).In other words, to the extent that anyobstructionofjusticeallegationdependsonanallegedattempttoconcealanother predicateact,thatattemptmaynotformanindependentpredicateact.SeealsoGunnv. Palmieri, No. 87 CV 1418, 1989 WL 119519, at *1 (E.D.N.Y. Sept. 29, 1989) aff'd, 904 F.2d 33 (2dCir.1990)([O]neofthepredicateactssetforthintheRICOstatuteaspledhereis ridiculous. If serving and filing an answer or a motion by any defendant in a federal action could beconsideredobstructionofjustice,thisCourtwouldbefloodedwithmotionstoamend complaintsbyplaintiffsseekingtoaddRICOclaimsbaseduponmailfraudandobstructionof justiceassoonasananswerwasserved.SuchaninterpretationoftheRICOstatuteis untenable.). AppendixEconsistsentirelyofwire(andonemail)fraudviolations,noneofwhich allegesthatanyDefendanttherebyintendedtodeceivethevictimoftheso-calledfraud, Drummond.Compl., App. E.The title of the Appendix helpfully acknowledges that the target ofeachallegedlyfraudulentcommunicationistheMedia,theUnitedStatesDepartmentof Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 21 of 5812 Justice, and Other Third Parties.Id. at p. 1.But the federal mail and wire fraud statutes do not criminalizefraudulentconductaimedatthirdpartiesratherthantheallegedvictimofthe crime.For that reason alone, each of the allegations in Appendix E fails to establish a predicate act.AppendixEinitsentiretyisnothingmorethanacut-and-pasteattemptbyDrummondto import its defamation allegations wholesale into this lawsuit. Insum,noneofthe228violationsallegedbyDrummondortheAskbyMr. Schererareproperlypleaded,andnoneextendstheallegedpatternofracketeeringactivity, Compl.1,beyondlitigationconductthat,asexplainedbelow,isnothingmoreorlessthan petitioning activity protected by the First Amendment. B.Defendants Litigation Conduct is Constitutionally Protected from Collateral Attack Based on Federal Statutory Law, Including RICO TheSupremeCourthaslongrecognizedthattheFirstAmendmentisthesourceofthe Noerr-Penningtondoctrine,7whichimmunizesindividualspetitioningactivitiesfromfederal statutory liability.See McGuire Oil Co. v. Mapco, Inc., 958 F.2d 1552, 1558-59 (11th Cir. 1992) (citingCaliforniaMotorTransportCo.v.TruckingUnlimited,404U.S.508(1972)).In2006 theNinthCircuitobservedthattheNoerr-Penningtondoctrinestandsforagenericruleof statutoryconstruction,applicabletoanystatutoryinterpretationthatcouldimplicatetherights protected by the Petition Clause.Sosa v. DIRECTV, Inc., 437 F.3d 923, 930-31 (9th Cir. 2006) (citingBE&KConstructionCo.v.NLRB,536U.S.516,525(2002)(notingthat,in2002,the Supreme Court extended the Noerr-Pennington doctrine beyond the antitrust context)).Federal statutes,includingRICO,mustbeconstruedsoastoavoidburdeningconductthatimplicates theprotectionsaffordedbythePetitionClauseunlessthestatuteclearlyprovidesotherwise. 7 This doctrine is derived from the Supreme Courts decisions inEastern Railroad Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127 (1961), and United Mine Workers v. Pennington, 381 U.S. 657 (1965). Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 22 of 5813 Sosa,437F.3dat931.CourtsmustnotlightlyimputetoCongressanintenttoinvadeFirst Amendmentfreedoms.E.R.R.PresidentsConferencev.NoerrMotorFreight,Inc.,365U.S. 127, 138 (1961). In Sosa, the satellite television broadcaster DIRECTV sent tens of thousands of demand lettersallegingthattherecipientshadaccessedDIRECTVssatellitetelevisionsignalillegally and would be sued if they did not quickly settle.Sosa, 437 F.3d at 926.DIRECTV sent these demandlettersdespitethefactthatithadabsolutelynoinformationastowhethertheletter recipients were using smart card programming technology to steal its signal. Id. at 926.And in fact, the smart card equipment purchased by the demand letter recipients ha[d] a number of lawful applications such as implementing secure access to computer networks or controlling physicalaccesstobuildingsorrooms.Id.at926.Inotherwords,sofarasDIRECTVknew, manyofitsdemandletterswerefalse.Andalthoughtheymaintainedtheirinnocenceof DIRECTVs accusations, a number of recipients of the false demand letters paid cash settlements to DIRECTV rather than incur the expense to respond to DIRECTVs allegations.Id. at 926-27.After an unsuccessful state court action, they brought a RICO suit in federal court in California, accusing DIRECTV of extortion.Id. at 927. The district court dismissed the claim on the grounds of Noerr-Pennington immunity, and the Ninth Circuit affirmed, id. at 929, 942, reasoning as follows: Applying these principles here, we must determine whether Sosa's RICO lawsuit burdensDIRECTV'spetitioningactivities.Ifitdoes,wemustexaminethe precisepetitioningconductDIRECTVengagedintodeterminewhetherthe burden identified may be imposed consistently with the Constitution. If there is a substantialquestionthatitmaynot,wemustdeterminewhetherRICOorthe RICOpredicateactsSosaallegesclearlyprovideforliabilityfortheconductat issue. If a reasonable construction of RICO or the predicate act statutes exists that avoids the burden, we will adopt that construction. Only where the statutes clearly providefortheburdenposedbythelawsuitwillweaddresswhetherthestatute may be applied to the petitioning conduct consistently with the Constitution. Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 23 of 5814 Id.at932(applyingtheFirstAmendmentprinciplessetoutbytheSupremeCourtinBE&K Const. Co. v. N.L.R.B., 536 U.S. 516, 524-25 (2002)).Finding that a RICO claim based on the falseandmisleadingdemandlettersclearlyburdenedDIRECTVslitigationconduct,thecourt movedontoconsiderwhetherthatburdenranafoulofthePetitionClause.Id.at933.The courtnotedthatpetitionsincludeassorteddocumentsandpleadings,inwhichplaintiffsor defendants make representations and present arguments to support their request that the court do or not do something.Id. at 933.The Petition Clause also precluded burdening documents and activities that are not themselves petitionslike DIRECTVs demand lettersso as to preserve thebreathingspacerequiredfortheeffectiveexerciseoftherightsitprotects.Id.[T]o exercise its petitioning rights meaningfully, a party may not be subjected to liability for conduct intimatelyrelatedtoitspetitioningactivities.Id.at934.Thecourtalsonoteditsprevious ruling that where the underlying litigation fell within the protection of the Petition Clause, any incidental conduct would also be protected.Id. at 935 (citing Columbia Pictures Indus., Inc. v. Profl Real Estate Investors, Inc., 944 F.2d 1525, 1528-29 (9th Cir. 1991)). TheNinthCircuitultimatelyconcludedthattheconnectionbetweenpresuitdemand lettersandaccesstothecourtsissufficientlyclosethatthePetitionClauseissuesraisedby providing a treble-damages remedy with regard to such letters are indeed substantial.Id. at 936.The court identified several reasons for its conclusion, including the following, among others.Id.First,apre-suitinvitationtoengageinsettlementnegotiationsisacommonfeatureof modernlitigation.Id.Second,theintimaterelationshipbetweenpresuitsettlementdemands andtheactuallitigationprocessishighlightedbymanystatespre-litigationcommunication privileges.Id.Third,protectingpresuitdemandlettersservesthesameintereststhatare implicated in the protection of private litigation.Id. Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 24 of 5815 In next evaluating whether RICO could be construed to avoid reaching the constitutional issue,theNinthCircuitreliedinpartontheEleventhCircuitsdecisioninUnitedStatesv. Pendergraft,297F.3d1198,1208(11thCir.2002).Id.at941.TheNinthCircuitfoundthat neither RICO nor the predicate statutes permitted a lawsuit based on DIRECTVs demand letters. Id. at 942.The court emphasized that federal statutes, including RICO, must be construed so as to avoid burdens on activity arguably falling within the scope of the Petition Clause of the First Amendment.Id.at942.ThecourtfoundthatRICOdidnotunambiguouslyincludethe accusedlitigationconductwithinthescopeofconductitenjoins,andaffirmedthedistrict courts decision dismissing the complaint.Id. at 942.DrummondsComplaintalsofailsSosastest.ByseekingtoimposeRICOstreble damages on Defendants based on their conduct in prosecuting their clients human rights claims against Drummond, Compl. 199, the Complaint quite plainly burdens Defendants, and their clients, petitioning activities.See id. at 932-33.Also, given the precise petitioning conduct, thisburdencannotbeimposedconsistentlywiththeConstitution.Seeid.at932.Witness assistancepaymentsareintimatelyrelatedtothepresentationofwitnessestosupport Defendants,andtheirclients,petitioningactivity.MistakesorevenifDrummonds allegations are to be believedmisrepresentations in discovery responses and to this Court are exactlythesortofincidentalconduct,likeSosasfalseandmisleadingdemandletters,that mustbeleftunburdenedbyfederalstatutoryliability,includingRICO,soastopreservethe breathingspacerequiredfortheexerciseofFirstAmendmentrightsinoursystemofjustice.Id. at 933-35.AlthoughtheEleventhCircuithasnotyethadoccasiontoconsidertheNinthCircuits applicationoftheNoerr-PenningtondoctrinetoRICOclaims,theEleventhCircuitsreasoning Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 25 of 5816 inPendergraftstronglyinfluencedtheNinthCircuitsdeterminationthatRICOmustbe construed so as to preclude liability for the Sosa defendants litigation conduct.See id. at 940 n. 10,941.Asdiscussedimmediatelybelow,Pendergraftgiveseveryindicationthatifthe EleventhCircuitweretoconsiderwhetheracivilRICOsuitbasedpurelyonallegedlitigation misconductshouldbeprecludedbytheprotectionsaffordedbythePetitionClauseoftheFirst Amendment, it would reach a similar conclusion to the Ninth Circuits and construe RICO so as not to burden litigation conduct, including litigationmisconduct like that of DIRECTV in Sosa.Defendants in this case should receive the benefit of that analysis, and Drummonds suit should be dismissed. II.Even if Its Allegations of Litigation Misconduct are Accepted as True, Drummond Should not be Allowed to use RICO Predicate Acts to Collaterally Attack the Underlying LitigationEachoftheso-calledpredicateactsispurelitigationconductofthetypethat,inthe Eleventh Circuit, among many others, cannot support a claim based on extortion.8Pendergraft, 297F.3dat1208([P]rosecutinglitigationactivitiesasfederalcrimeswouldunderminethe policiesofaccessandfinalitythatanimateourlegalsystem.Moreover,allowingsuchcharges wouldarguablyturnmanystate-lawactionsformaliciousprosecutionintofederalRICO actions.).ItisalsothetypeoflitigationconductthattheNinthCircuithasrecognizedas immune from civil RICO claims, as explained above.A.Under Pendergraft, Even Blatant Litigation Misconduct Cannot Support the Predicate Acts of Extortion, Mail Fraud or Wire Fraud ThePendergraftdefendants,JamesScottPendergraftandMichaelSpielvogel,were convictedofattemptedextortionandmailfraud,amongothercrimes.Id.at1200.These chargesaroseoutoftheirthreattoseekdamagesinalawsuitand to use false evidencein 8OnlyoneallegedpredicateactTheAskisidentifiedasextortion,butDrummondneverthelessrepeatedly frames its allegations as a massive or multifaceted scheme to extort.Compl. 17-24, 142, 178, 179, 193. Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 26 of 5817 supportofthelawsuit.Id.(emphasisadded).Theappellatecourtreversedtheseconvictions becausethatthreatwasneither(1)wrongfulforHobbsAct(extortion)purposesnor(2)a scheme to defraud for mail fraud purposes.Id. TheunderlyinglawsuitinPendergraftaroseoutofthedefendantseffortstoopenand operate an abortion clinic in Ocala, Florida.Id. at 1200.When Pendergrafts request to the city and county to provide off-duty law enforcement officers for security was denied, he (along with theclinic)suedforinjunctiverelief.Id.at1201.Hethenthreatenedtoaddaclaimforactual andpunitivedamagesaswellasfeesandcostsbasedoncertainthreatsthatdefendantsfalsely alleged Spielvogel had received from the Chairman of the County Board of Commissioners.Id. at 1201-02. Unbeknownst to Spielvogel, his conversations with the Board Chairman had been tapedbytheFBI.Id.at1202.Thus,thedefendantsintheinjunctionlawsuitknewthatthe allegations, and the supporting affidavits, were false. DespitethefactthatthePendergraftdefendantshadgonesofarastomakeexplicit threats to use false evidence in a damages claim, the Eleventh Circuit reversed their convictions of conspiracy to commit extortion and mail fraud.Id. at 1212.As to extortion, the Court noted that [s]everal courts have held [in the civil RICO context] that a threat to file a lawsuit, even if made in bad faith, is not wrongful within the meaning of the Hobbs Act.[In a]ll of these cases litigantshaveincludedathreattofilealawsuitasthepredicateactofextortion.Pendergraft,297F.3dat1205(citingVemco,Inc.v.Camardella,23F.3d129,134(6thCir. 1994); First Pacific Bancorp, Inc. v. Bro, 847 F.2d 542, 547 (9th Cir. 1988); I.S. Joseph Co., 751 F.2d at 26768; GI Holdings, Inc. v. Baron & Budd, 179 F.Supp.2d 233, 259 (S.D.N.Y. 2001); HeightsCmty.Cong.v.Smythe,CramerCo.,862F.Supp.204,207(N.D.Ohio1994);Am. Nursing Care of Toledo, Inc. v. Leisure, 609 F.Supp. 419, 430 (N.D.Ohio 1984).Most of these Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 27 of 5818 courts have re-characterized the extortion charges as actions for malicious prosecution and have held that malicious prosecution is not a RICO predicate act.Id. TheCourtexplainedthatbecausefearofeconomiclossisananimatingforceofour economic system, it is not inherently wrongful. Id. at 1206.9A threat to litigate was also not necessarily wrongful for Hobbs Act extortion purposes, because under our system, parties are encouraged to resort to courts for the redress of wrongs and the enforcement of rights.Id. at 1206(citingBoothbyRealtyCo.v.Haygood,114So.2d555,559(Ala.1959)and54C.J.S. MaliciousProsecution4at525(1987)).Thecrucialquestionwaswhethertheuseof economicfearviathedeliberate,badfaithfabricationofevidenceinanefforttoinduce thepaymentofmoney(whilecertainlynotrightful)waswrongfulforpurposesof alleging a Hobbs Act violation.Id. at 1206-08.The Court determined that it was not wrongful.Id. at 1208. Despite its grand talk of a massive and multifaceted scheme to exort, the Complaint features just one meager predicate act of Hobbs Act extortion: Mr. Scherers single phone call to findout,viaanintermediary,whetherDrummondmightbewillingtosettletheUnderlying Litigation.Compl.2,142,174.Drummondhasnotallegedandcannotallegethatthis onephonecallinvolvedthewrongfuluseofactualorthreatenedforce,violence,orfear sufficient to state a claim under the Hobbs Act.See supra at 9.But even if it had, such a threat would have been no different and no worse than thePendergraft defendants attempt to use the threatofeconomicfear,basedonfabricationofevidence,toinducethepaymentof 9BeforePendergraft,theEighthCircuitheldthatathreattofrighten[plaintiff]intopayingorguaranteeing [defendants] debts was not criminal extortion.I.S. Joseph Co. v. J. Lauritzen A/S, 751 F.2d 265, 267-68 (8th Cir. 1984).Thecourt couldnot agree that the threat alleged constituted theinfliction offearfor purposes of the extortionstatuteevenifthethreattosuewasgroundlessandmadeinbadfaith.Suchconductmaybetortious under state law, but we decline to expand the federal extortion statute to make it a crime.Id. at 267. Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 28 of 5819 money.Pendergraft, 297 F.3d at 1208.The truth is that this is a much easier extortion case than Pendergraft. ThePendergraftcourtsimilarlyfoundthatabsentcertaincircumstances,litigation conduct could not serve as the basis of a mail fraud claim.A number of courts have considered whether serving litigation documents by mail can constitute mail fraud, and all have rejected that possibility.Id.at1208(citingDaddonav.Gaudio,156F.Supp.2d153,16264(D.Conn. 2000); Auburn Med. Ctr., Inc. v. Andrus, 9 F.Supp.2d 1291, 1300 (M.D.Ala. 1998); von Bulow v. vonBulow,657F.Supp.1134,114246(S.D.N.Y.1987);PaulS.Mullin&Assocs.,Inc.v. Bassett, 632 F.Supp. 532, 540 (D.Del. 1986); andAm. Nursing Care of Toledo, Inc. v. Leisure, 609F.Supp.419,430(N.D.Ohio1984)).AsintheHobbsActcontext,thesecourtshave rejectedthismail-fraudtheoryonpolicygrounds,recognizingthatsuchchargesaremerely artfullypleadedclaimsformaliciousprosecution.Id.at1208(quotingAuburnMed.Ctr., Inc., 9 F. Supp. 2d at 1297). Forallegations of mail and wire fraud predicateacts, the inquiryturnedon the meaning ofschemetodefraud.Whileboththemail-fraudandwire-fraudstatutesusethephrase schemetodefraud,neitherstatutedefineswhataschemetodefraudis.Id.at1208.Instead, the meaning of scheme to defraud has been judicially defined. Id. at 1208.Courts have defined the phrase broadly, allowing it to encompass deceptive schemes that do not fit the common-lawdefinitionoffraud.Id.at1208(internalcitationomitted).Nevertheless, Congressdidnotstriptheworddefraudofallitsmeaning;thewordstillsignifiesthe deprivationofsomethingofvaluebytrick,deceit,chicane,oroverreaching.Id.at1208-09 (internal citation omitted). There are limits to the types of schemes that the mail-fraud statute encompasses.Id. at 1209 (internal citation omitted). Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 29 of 5820 Thepossibilityofanunfavorableverdict,basedonperjurioustestimony,mayhave caused [the defendant] to fear the lawsuit. But fear is different from fraud. A scheme to frighten is simply not criminalized by the mail-fraud statute.Id. at 1209.[I]f deceit, as well as fear, is intended, then the actions may be criminal.Id. at 1209.But, crucially, because the defendants knewthattheycouldnotdeceivethedefendantsintheunderlyinglitigationbecausethe defendants in the underlying litigationknew that the false allegations were untruethe RICO defendantscouldnothavehadanintenttodeceive.Id.at1209(emphasisadded).Since there was no intent to deceive, there was no scheme to defraud, and [the] mailing of litigation documents, even perjurious ones, did not violate the mail-fraud statute. Id. at 1209(emphasis added).The Court found that the mail fraud allegations failed as a matter of law.Id. at 1209.SeealsoSosa,437F.3dat941([L]etterscannotamounttomailfraudwherethesender knowstherecipientwillnotbedeceivedbythefalsehoods.).Because[thefalse]statements concerned[plaintiffs]ownconduct,[defendant]couldnothaveintendedthathewouldbe deceived by them and was therefore necessarily lacking in the intent requisite to have committed mail or wire fraud.Id. (citing Pendergraft, 297 F.3d at 1209).10 Surely Drummond, like the defendants in the underlying litigation in Pendergraft, would takethepositionthatitknowsthatDefendantsfalseallegationsareuntrue.Giventhe gravityofDefendantsallegations,andDrummondsrepeatedprotestationsofinnocence,how coulditnot?ButifDrummondknows,andhasalwaysknown,thatanyallegationbyany witness, paid or unpaid, that it conspired with Colombian terrorists in the murder of three union leadersanddozensofinnocentciviliansmustbeuntrue,thenlikethePendergraftdefendants, 10 See alsoWarnock v. State Farm Mut. Auto. Ins. Co., 833 F. Supp. 2d 604, 609 (S.D. Miss. 2011) (Because the evidencedemonstratesonlythetransmittalofallegedlyfalselitigationmaterials,thisCourtagreesthatunder Pendergraft and the related cases, Warnock has not proven the predicate acts of mail or wire fraud. For this reason alone, Warnock's RICO claims under 1962(c) and (d) must fail.). Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 30 of 5821 DefendantsherecouldneverhavehadtherequisiteintenttodeceiveDrummond,thevictimof the alleged fraud.And the target of the deceit matters.Any intent to deceive the court, though unsavory and inadvisable, is not sufficient to form a RICO predicate act.As in Pendergraft, if the Defendants sought to deceive anyone, it was the courts .Defendants allegedly presented thecourtswithmisleadinginformationandbaselessclaimsinthehopethattheywouldbe fooled into depriving [Plaintiff] of the necessary legal backing to open their business.[Plaintiff] doesnotallegeandpresentsnoevidencethatDefendantsatanypointsoughttodeceiveit. Without that intent to deceive, there can be no mail fraud violation. Livingston Downs Racing Ass'n,Inc.v.JeffersonDownsCorp.,257F.Supp.2d819,830-31(M.D.La.2002).Drummonds allegations of extortion and of mail and wire fraud fail under Pendergraft. B.This Court Should Recognize that Pendergrafts Reasoning Applies Equally to the Additional Predicate Acts Alleged Here TwoyearsafterPendergraft,theEleventhCircuitconfirmedthatitsholdingextended beyond threats of litigation to actual litigation and reaffirmed Pendergrafts reasoning.Raney v. AllstateIns.Co.,370F.3d1086,1087-88(11thCir.2004).Inlightofourdecisionin Pendergraft,wedoubtthatthefilingofalawsuitcouldeverbewrongfulforthepurposesof RICO.Id. at 1088 (internalcitation omitted).InPendergraft, [w]e noted that courts possess adequateprocedurestodistinguishvalidclaimsfrominvalidclaimsandheldthatCongressdid notintendtopunishcitizensmerelyforaccessingthelegalsystem.Wefoundourselves troubledbyanyuseofthisfederalcriminalstatutetopunishcivillitigants.Wenotedthat allowing litigants to be charged with extortion would open yet another collateral way for litigants to attack one another.We also expressed concern about transforming every state-law malicious prosecutionactionintoafederalcrime.Raney,370F.3dat1088(internalcitationsomitted).The court also noted that other courts have explicitly applied this reasoning to litigation that has Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 31 of 5822 alreadybeenfiled.Id.at1088(citingDeckv.EngineeredLaminates,349F.3d1253,1258 (10th Cir. 2003) (citingPendergraft and rejecting meritless litigation as a predicate act under RICO)). InPendergraft,theEleventhCircuitwasespeciallyconcernedabouttheeffectthat treating allegations of false testimony and other litigation misconduct as extortion or wire fraud mighthaveonwitnesses.Thelawjealouslyguardswitnesseswhoparticipateinjudicial proceedings;witnessesshouldbeunafraidtotestifyfullyandopenly.Id.at1207(internal citations omitted).Our judicial system already features sufficient checks to ensure that allegedly falsetestimonyreceivesnomoreweightthanitdeserves.Becausetherigorsofcross-examinationandthepenaltyofperjurysufficientlyprotectthereliabilityofwitnesses,courts have been unwilling to expand the scope of witness liability, since, by doing so, the risk of self-censorship becomes too great.Id. at 1207 (internal citations omitted).Though Pendergraft did notinvolveallegationsofobstructionofjustice,bribery,moneylaundering(basedonalleged bribery), or witness tampering, Defendants urge this Court to recognize that Pendergrafts logic regardingprotectionofwitnessesfromchillinginfluencesappliesequallytoallallegationsof litigation misconduct.Drummond does its best to dodge Pendergraft by padding its violations with conclusory allegations of obstruction of justice, money laundering, and so on, and by shying away from explicit allegations of extortion in its Appendices.But this Court should not ignore binding Eleventh Circuit precedent because of Drummonds artful pleading.Withoutadoubt,claimsforobstructionofjustice,bribery,moneylaundering,and witnesstamperingcouldbeRICOpredicateacts,ifproperlypleadedintherightcontext.For example, a drug smuggler who bribed or intimidated witnesses in a federal prosecution based on his larger criminal enterprise could be guilty under RICO for those predicate acts, among others.Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 32 of 5823 Butwhere,ashere,theallegedpatternofracketeeringactivityisitselfnothingmorethana lawsuitorlawsuits,andtheplaintiffcannotidentifyanypredicateactsthatarenotthemselves intimatelyrelatedtoDefendantspetitioningactivities,RICOmustbeconstruedcarefully andnarrowlytoavoidreachingconstitutionallyprotectedlitigationconduct.Sosa,437F.3dat 934.TheEleventhCircuithasrecognizedthatwhentheplaintiffdoesnotallegeanyfacts independentofplaintiffspre-litigative and litigative activitiesthereisnopredicateact that constitutes an independent violation of federal law.McGuire Oil. Co. v. Mapco, Inc., 958 F.2d1552,1561(11thCir.1992)(emphasisadded)(findingthat[n]othinginanycase suggeststhataconspiracytouseingoodfaiththeadjudicativeprocesstoachieveanti-competitivegoalsviolatestheShermanAct).FollowingMcGuire,adistrictcourtinthe EleventhCircuitmorerecentlyfoundthatpre-litigativeandlitigativeactivityis constitutionallyprotectedfromstatelawclaimsfordeceptivetradepractices,amongother claims.AticoIntern.USA,Inc.v.LUVNCare,Ltd.,No.09-60397-CIV-COHN,2009WL 2589148,at*1(S.D.Fla.Aug.19,2009).ThisCourtshouldfindthatthisallegedpatternof racketeering activity, consisting entirely of litigation conduct and nothing more, cannot support a civil RICO suit. ThisCourtmustnotallowDrummondtousecivilRICOasabluntinstrumentfor collateral attack.If courts allow RICO suits like this one to go forward, they will open the gates toafloodofcivilRICOsuitsbypowerfullitigantsseekingretaliationagainstlitigation conductthatisasAmericanasapplepie.SeeI.S.JosephCo.,751F.2dat267.Ifasuitis groundlessorfiledinbadfaith,thelawoftortsmayprovidearemedy.Resorttoafederal criminal statute is unnecessary.Id. at 267-68.Allowing suits like this one to go forward would Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 33 of 5824 haveaninevitablechillingeffectonthosewhoseekjusticeincivillitigation.Itshouldbe dismissed. C.Any Sham Litigation Exception Does Not Apply DrummondmayarguethatFirstAmendmentprotectionisunavailablebecausethe UnderlyingLitigationisasham.SeeProf'lRealEstateInvestors,Inc.v.ColumbiaPictures Indus.,Inc.,508U.S.49,51(1993).AnysuchsuggestionwouldbeaninsulttothisCourt, whichhaspresidedovertheUnderlyingLitigationsince2009.Further,theUnderlying LitigationdoesnotmeettheSupremeCourtstwo-partdefinitionofshamlitigation.Id.at 60-61.First,ashamlawsuitmustbeobjectivelybaseless.Id.at60.Second,thebaseless lawsuitmustalsobeanattempttointerferedirectlywiththebusinessrelationshipsofa competitor.Id. at 60-61.A lawsuit is not a sham unless it satisfies both prongs of the two-part test.BE & K Const. Co. v. N.L.R.B., 536 U.S. 516, 526 (2002) (For a suit to violate the antitrust laws, then, it must be a sham both objectively and subjectively.) (emphasis added).Because the UnderlyingLitigation isnot objectively baseless, it fails at least the first part of the Supreme Courts two-part test, and therefore cannot be considered a sham. DrummondcannotclaimwithastraightfacethattheUnderlyingLitigationmeetsthe objectiveprongofthetwo-parttestforshamlitigation.Unsuccessfullawsuitsarenot necessarilyshams,and[a]nalyzingwhetherthelawsuitswereobjectivelybaselessrequiresa look at the outcomes of each case.In re Terazosin Hydrochloride Antitrust Litig., 335 F. Supp. 2d 1336, 1357 (S.D. Fla. 2004).The first action in the Underlying Litigation,Romero, went all thewaytoajuryverdict,survivingsummaryjudgmentonclaimsofextrajudicialkilling pursuanttotheAlienTortClaimsActunderatheoryofaidingandabettingliability.Romero, Dkt.Nos.329,408,486.Balcerosurvivedmultiplemotionstodismiss,butwasloston Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 34 of 5825 summary judgment because of an intervening Supreme Court decision that this Court compared to an earthquake that has shaken the very foundation of Plaintiffs claims.Balcero, Dkt. Nos. 31, 44, 142, 455 at p. 1.11Baloco was dismissed at the summary judgment stage on grounds of res judicata.Baloco at Dkt. No. 95.Melo is still an active case.See Melo, Dkt. Nos 51, 53. ThefactthattheUnderlyingLitigationhasnotbeenultimatelysuccessfulisnotan indicationthatitwasasham.[W]henthedefendanthaslosttheunderlyinglitigation,a courtmustresisttheunderstandabletemptationtoengageinposthocreasoningbyconcluding thatanultimatelyunsuccessfulactionmusthavebeenunreasonableorwithoutfoundation.The court must remember that even when the law or the facts appear questionable or unfavorable attheoutset,apartymayhaveanentirelyreasonablegroundforbringingsuit.Prof'lReal Estate Investors, 508 U.S. at 61 n. 5 (internal citations omitted). See also Andrx Pharm., Inc. v. ElanCorp.,PLC,421F.3d1227,1234(11thCir.2005)(holdingthateventhoughplaintiffin allegedlyshampatentlitigationhadnotwon,ithadmadeawinningargumentagainst contentionsofpatentinvalidityandthereforeitsclaimswerenotobjectivelybaseless);Inre AndroGel Antitrust Litig. (No. II), 888 F. Supp. 2d 1336, 1344 (N.D. Ga. 2012) (Plaintiffs must satisfyaheavyburdentoshowthattheUnderlyingLitigationwasobjectivelybaseless.Under thisexactingstandard,theplaintiff'scaseintheUnderlyingLitigationmusthavehadno objective foundation.) (internal citations omitted). Unless Drummond can show that the Underlying Litigation was objectively baselesswhichitcannotthisCourtmustnotinquireintoDefendantssubjectivemotivationin bringingthoselawsuits.Prof'lRealEstateInvestors,508U.S.at60(Onlyifchallenged 11Indeterminingwhetheranactionwasobjectivelybaseless,theCourtmustlooktothestateofthelawatthe timeoffiling.SeeInreTerazosinHydrochlorideAntitrustLitigation,335F.Supp.2dat1359-64(evaluating whether underlying patent infringement suits were objectively baseless in light of an intervening change in the law governing application of the on-sale bar and concluding that they were not).Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 35 of 5826 litigationisobjectivelymeritlessmayacourtexaminethelitigantssubjectivemotivation.).TheSupremeCourthasexplicitlyrejectedapurelysubjectivedefinitionofshamandheld thatlitigationisnotashammerelybecauseasubjectiveexpectationofsuccessdoesnot motivatethelitigant.Id.at57-58(Wenowholdthatanobjectivelyreasonableeffortto litigatecannotbeshamregardlessofsubjectiveintent.).Inotherwords,Defendantsarenot requiredtoshowthattheUnderlyingLitigationwasnotanattempttointerferedirectlywith [Drummonds] business relationships in order to defeat the sham litigation exception.Showing that the Underlying Litigation was not objectively baseless is enough.The sham exception does not apply. D.After Pendergraft, District Courts in the Eleventh Circuit Have Properly Characterized Claims Based on Litigation Misconduct as Malicious Prosecution, Not Extortion None of the above should be understood to suggest that victims of litigation misconduct are or should be left in want of a remedy in the Ninth or Eleventh Circuits or anywhere else.For many, the answer is a tort action for malicious prosecution.See Levitan v. Patti, No. 3:09CV321 MCR MD, 2011 WL 1299947, at *16 (N.D. Fla. Feb. 8, 2011) (citingPendergraft, 297 F.3d at 120607) (The heart of plaintiffs claims in this section is that defendants made false statements tofurtherlitigationandfiledfalsecriminalcharges.Theseactsareproperlycharacterizedas maliciousprosecution,notextortion,andmaliciousprosecutionisnotaRICOpredicateact.).And where a Plaintiff could have brought suit against the defendants for malicious prosecution, [t]here is no reason to expand the scope of mail and wire fraud statutes to include attempts to obtain a third partys propertyby deceiving thecourts ,especially when independent causes of action exist to serve the same end.Livingston Downs Racing Ass'n, Inc. v. Jefferson Downs Corp., 257 F. Supp. 2d 819, 831 (M.D. La. 2002) (emphasis added). Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 36 of 5827 Whenalitigantmisbehavesincourt,whetherbydeliberatelyfalsifyingevidenceor otherwise,[w]etrustthecourts,andtheirtime-testedprocedures,toproducereliableresults, separatingvalidityfrominvalidity,honestyfromdishonesty.Whileourprocessissometimes expensive, and occasionally inaccurate, we have confidence in it.When a citizen avails himself of this process, his doing so is not inherently wrongful.Pendergraft, 297 F.3d at 1206-07.In otherwords,itwasandisthisCourtsresponsibilityandprerogativetousetheprocedures availabletoitintheUnderlyingLitigationtoensurethefairandefficientadministrationof justice,andDrummondhasneverallegedthattheCourtfailedtodoso.NorhasDrummond allegedthatitwasinsomewayunfairlypreventedfromprotectingitsowninterests,including seekingattorneyfees,intheUnderlyingLitigation.Drummondalsocannotdenythatinthe eventofanadversejudgmentprocuredbyanyallegedfraudintheUnderlyingLitigation,it would have had recourse to Federal Rule of Civil Procedure 60(b)(3).With such sanctions and remediesavailable,DrummondhadnoneedtoavailitselfoftheRICOstatute.12Itsclaims should be dismissed. E.The Pendergraft Analysis Survives Even in States with Near-Absolute Litigation Immunity Floridalawfeaturesanexplicitlitigationprivilege,whichprovidesthatabsolute immunitymustbeaffordedtoanyactoccurringduringthecourseofajudicialproceeding, regardlessofwhethertheactinvolvesadefamatorystatementorothertortiousbehaviorso longastheacthassomerelationtotheproceeding.Levin,Middlebrooks,Mabie,Thomas, Mayes & Mitchell, P.A. v. U.S. Fire Ins. Co., 639 So. 2d 606, 608 (Fla. 1994).In evaluating the 12ThisisnottosaythatanyattemptbyDrummondtoimposesanctionswouldlikelyhavebeensuccessful.The Pendergraftcourtnotedthatlitigantsmaybesanctionedforonlythemostfrivolousofactions.Thesesanctions includetortactionsformaliciousprosecutionandabuseofprocess,andinsomecasesrecoveryofattorney'sfees, but even these remedies are heavily disfavored because they discourage the resort to courts.Pendergraft, 297 F.3d at 1206 (emphasis added). Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 37 of 5828 effectofthelitigationprivilege,theEleventhCircuithasbolsteredandprovidedfurtherinsight intoitsreasoninginPendergraft.SeeGreenLeafNurseryv.E.I.DuPontDeNemours&Co., 341 F.3d 1292, 1296 (11th Cir. 2003). GreenLeafNurseryallegedthataftersettlingtheircase,theydiscoveredthat [Defendant]hadengagedinamassiveschemeofperjury,falsificationofevidence,and fraudulentconcealmentofevidencetoinducethemselvesandotherplaintiffstosettletheir claimsforlessthantheclaimsfairvalue.GreenLeafNursery,341F.3dat1296.Thecourt notedthatFloridasnear-absolutelitigationimmunitydoesnotleavepartieswithoutaremedy formisconductoccurringduringorrelatingtolitigation.Forexample,atrialjudgehasthe inherentpowertodothosethingsnecessarytoenforceitsorders,toconductitsbusinessina propermanner,andtoprotectthecourtfromactsobstructingtheadministrationofjustice.Green Leaf Nursery, 341 F.3d at 1302 (citation omitted).Further, Plaintiffs could have filed a contempt motion before the trial court in the Underlying Litigation as a remedy for [Defendants] misconduct.Plaintiffschoseinsteadtopursuefraudactionsinsubsequentlitigation.Green Leaf Nursery, 341 F.3d at 1302 (internal citation omitted).Even though Florida provides limited alternatives to a party claiming litigation misconduct, the Eleventh Circuit nevertheless affirmed dismissal of the related RICO claim.Id. at 1296.F.Despite Surface Similarities, This Case is Nothing Like Chevron v. Donziger This Complaint is an obvious attempt to wedge the facts of the Underlying Litigation into the very different shoe ofChevron Corp.s RICO case against attorney Steven Donziger, which recentlyresultedinafavorablejudgmentforChevronbarringenforcementofanenormous Ecuadorian judgment in the United States.See Chevron Corp. v. Donziger, 974 F.Supp.2d 362 (S.D.N.Y. 2014).But Terry Collingsworth is not Steven Donziger, and this case is not Chevron. Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 38 of 5829 WhenChevronbroughtsuit,attorney-defendantDonzigerwaspreparingtoenforcea multibilliondollarjudgmentobtainedagainstChevroninacorruptforeignjudicialsystemthat was rife with intimidation of judges, including by the President of Ecuador himself, who publicly favoredtheplaintiffsintheunderlyingcaseandtookdrasticstepstounderminethe independence of the judiciary.Id. at 383-84; 608-617.The Donziger court went so far as to find thatEcuador,atnotimerelevanttothiscase,providedimpartialtribunalsorprocedures compatible with the due process of law.Id. at 617. To secure his multibillion dollar judgment,Donziger engaged in aprolonged, deliberate schemeexplicitly documented in a series of documentary film outtakes, see, e.g., id. at 393-94, aswellasinDonzigersownpersonaljournal,see,e.g.,id.at420thatincludedbribery, threats,andcoercionofjudicialofficialsandpurportedlyneutralexperts.Id.at384.The Donziger court found that Donziger and his team forged one supposedlyneutral experts report and bought and paid for another.Id. at 412-14; 422-37.The Donziger court also found that he bribedthepresidingjudgeandhiredadisgracedformerjudgetoghostwritethefinaljudgment (inajurisdictionwherepartiesarenotevenpermittedtosubmitproposedorders).Id.at482-535; 499.Thesituationhereis,tosaytheleast,verydifferent.Drummondhasbeenalmost completely victorious in each of the lawsuits that make up the Underlying Litigation.See supra n.1.TheUnderlyingLitigationwasprosecutedintheUnitedStatesDistrictCourts,surelya modelworldwideforafunctioningandfairjudicialsystem.TotheextentthattheUnderlying Litigation was ill-founded, Drummond has always had available to it all the usual remedies and sanctionsforfrivolouslitigation,includingRule11sanctions,Rule37sanctions,sanctions pursuant to the inherent power of the Court, sanctions under 28 U.S.C. 1927, a Rule 54 motion Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 39 of 5830 for attorney fees and costs, or a motion pursuant to Rule 60 to set aside the judgment.The Court and(inRomero)thejuryhadafullopportunitytoevaluatethecredibilityofthepurportedly falseevidencesubmittedinsupportoftheclaimsintheUnderlyingLitigation,totheextent thatsuchevidencecameintoplay.Drummondhassufferednoharmthatisinanyway comparabletothemulti-billiondollarjudgmententeredagainstChevron.Furthermore, Donziger is on appeal and could itself shortly become bad law.And in light of Pendergraft, it is not at all clear that the Eleventh Circuit would affirm the Chevron decision, even on its far more extreme facts. TheCourtshouldalsonotethatDonzigerfeaturedtestimonyofakeywitnesswho receivedassistancepaymentsfromChevron.TheEcuadorianlitigationunderlyingDonziger wasinitiallyassignedtoJudgeAlbertoGuerraBastidas(Guerra),thenthepresidentofthe Lago Agrio court.Id. at 392.Ultimately, Guerra was removed from the bench in May 2008, id. at502,afterallegationsofmisconduct.Id.at505n.7.Guerrahimselfadmittedtosellinghis testimony and influence to the highest bidder, and acknowledged that since being removed from thebench,hisarrangementswith thepresidingjudgewerehismainsourceofincome.Id.at 518-19; 505.He was the beneficiary of what amounts to a private witness protection program createdforhimbyChevron.Id.at504.ChevronpaidtorelocateGuerraandhisfamilyfrom EcuadortotheUnitedStates,andcontinuedtopayhim$10,000amonthinlivingexpensesat least through trial.Id. at 517.Chevron also paid for Guerras and his familys health insurance, hired him a lawyer, and leased him a car. Id. Guerra was worth it.He was Chevrons star witness, and Judge Kaplans decision relied heavily on his testimony.See id. at 533-35.Acknowledging that Guerras credibility [was] not impeccable, id. at 483, Judge Kaplan noted that there are no saints here, id. at 504, and went Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 40 of 5831 on to credit Guerras allegations that the Donziger plaintiffs procured the final judgment in their favor by bribing the sitting judge to sign an order they had Guerra ghostwrite.See id. at 534.LikeGuerra,thewitnesseswhosefamiliesreceivedassistancepaymentsinthe UnderlyingLitigationherearenosaints,andlikeGuerra,theygavetestimonywhose credibilitycouldbetestedbycorroborationandothertraditionalmeans.AsinChevron,there was nothing wrongful about providing assistance to those witnesses to offset the dangers they brought on themselves and their families by agreeing to provide truthful testimony in this Court.Unlike Chevron, which suffered a multibillion dollar injury in the form of a judgment procured byfraud,Drummondcannotshowthatitwasharmedbythosewitnessassistancepaymentsin any way. III.The Only Cognizable RICO Injury Drummond Alleges is Barred by RICOs Four-Year Statute of Limitations, and it Therefore Lacks Standing to Sue NotonlydoesDrummondfailtoallegeapatternofracketeeringactivitythatmeets EleventhCircuitandconstitutionalstandards,ithasfiledsuitfartoolate.Defendant CollingsworthfiledhisfirstlawsuitagainstDrummondfourteenyearsago,allegingthesame human rights violations the Underlying Litigation plaintiffs have continued to allege ever since.ThemomentDrummondreceiveditsfirstinvoiceforattorneyfeestodefendthatfirstsuit,its RICOinjurybegan.Onlynow,afterspendingmillionsmoreinattorneyfeesdefendingthe sameandsimilarsuits,doesDrummondrecognizeitsinjuryanddecidetopursuearemedy.Drummond has waited too long.InenactingthecivilRICOstatute,Congressconferredstandingtosueon[a]nyperson injured in his business or property by reason of a violation of section 1962 of this chapter.18 U.S.C. 1964(c) (emphasis added). The Eleventh Circuit views RICO standingand proximate causeasoverlappinginquiries:[T]hebyreasonofrequirementcontainedin1964(c) Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 41 of 5832 implicates two concepts: (1) a sufficiently direct injury so that a plaintiff has standing to sue; and (2)proximatecause.Despitesomesignificantoverlap,weaddresstheproximatecauseand standing concepts separately.Williams v. Mohawk Indus., Inc., 465 F.3d 1277, 1287 (11th Cir. 2006)(emphasisadded).Onlyasufficientlydirectinjuryconfersstandingtosue.Id.The EleventhCircuithasrecognizedthat[t]hewordsbusinessorpropertyare,inpart,wordsof limitation.Grogan v. Platt, 835 F.2d 844, 846 (11th Cir. 1988) (emphasis added). Drummondsattemptstoallegeinjuryconsistofthefollowingdamagestoits reputationandbusinessinterests:morethan$10millioninlegalcosts,13Compl.7; enormousdamagetoDrummondsbusinessinterestsanddamagetoitsgoodwilland reputation, Compl. 8; damage to Drummonds business interests in Europe, Compl. 157; and inordinate time and expense [spent] dealing with the European response to PAXs anti-Drummond campaign, Compl. 169.Almost none of these injuries are quantified in any of the225paragraphsorfiveAppendicesoftheComplaint.Onlythemorethan$10millionin legal costs, Compl. 7, Drummond claims to have spent defending itself, primarily against the allegations in Balcero, is a relatively concrete allegation even arguably sufficient to confer RICO standingthough it too fails for other reasons. A.Drummonds Reputational and Intangible or Speculative Business Injuries are Insufficient to Confer RICO Standing Drummond alleges that its goodwill and reputation have been injured by Defendants activities.Reputationalinjuries,however,cannotconferRICOstanding.Personalinjury, including damage to reputation, is not an injury to business or property within the meaning of18U.S.C.1964(c).SeeHammv.Rhone-PoulencRorerPharm.,Inc.,187F.3d941,954 13DrummondfailstoallegewhichoftheplaintiffDrummondentities,DrummondCompany,Inc.orDrummond Ltd., incurred and/or paid these legal costs. Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 42 of 5833 (8thCir.1999)(holdingthatemployeesofapharmaceuticalcompanydidnothavestandingto assertRICOclaimsbasedondamagetotheirbusinessreputations).SeealsoCityofChicago Heights,Ill.v.Lobue,914F.Supp.279,285(N.D.Ill.1996).InChicagoHeights,the reputational injury was personal for RICO purposes even though the victim was not a natural person but a city.Id.(As losses, the City citesthe bad press it received as a locus of crooked dealing and corrupt officials, and an unspecified amount of royalties due . Neither of these are the type of direct losses that are recoverable under RICO.).A reputational injury that results in lostfuturebusinessisalsonotcognizableunderRICO.[G]eneralizedreputationalharms, including the risk of future lost business commissions, are too speculative to constitute an injury to business or property.Kimm v. Chang Hoon Lee & Champ, Inc., 196 F. App'x 14, 15 (2d Cir. 2006) (internal citation omitted). Similarly,Drummondsallegationsofenormousdamageto[its]businessinterests and inordinate time and expense are insufficiently definite to be considered RICO injuries.An allegedinjurymustbesupportedbyconcretefactsordatainthecomplaint.Simpsonv. Sanderson Farms, Inc., 744 F.3d 702, 710 (11th Cir. 2014).[I]ntangible propery injuries are insufficienttoconferRICOstanding.Adellv.MaconCnty.GreyhoundPark,Inc.,785 F.Supp.2d1226,1241(M.D.Ala.2011)(collectingclearholdingsfromtheFifth,Eighthand Ninth circuits that intangible property injuries are not RICO injuries).See also Regions Bank v. J.R.OilCo.,LLC,387F.3d721,730(8thCir.2004)(denyingRICOstandingtoasecondary lienholderinabankruptcywheretheprioritylienholdersheldcompleteclaimsovertheonly assetsbecause[i]njurytotheseintangiblepropertyinterestsisnotinjurythatmaysupport standingtobringRICOclaims).BecauseDrummondsdamagetoitsbusinessinterestsis Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 43 of 5834 insufficientlyconcreteortangible,itcannotbeaninjurysufficienttosupportRICO standing. ARICOinjurymustbeaconcretefinancialloss,Pattersonv.MobilOilCorp.,335 F.3d 476, 492 n. 16 (5th Cir. 2003), not mere injury to a valuable intangible property interest.Maio v. Aetna, Inc., 221 F.3d 472, 483 (3d Cir. 2000) (internal citation omitted).The Maio court considered whether plaintiffs who claimed to have paid too much for health insurancefailed to allegeRICOinjury.Id.Thecourtheldthatappellantscannotestablishthattheysuffereda tangibleeconomicharmcompensableunderRICOunlesstheyallegethathealthcarethey receivedunderAetna'splanactuallywascompromisedordiminishedasaresultofAetna's managementdecisionschallengedinthecomplaint.Maio,221F.3dat488.[T]henatureof appellants' property interests at stake is [a] contractual right.Maio, 221 F.3d at 489.The court asked,whatistheexternaleventorconditionwhichwouldcauseappellantstohavesuffered economicharm,andhaveappellantsallegedfactsdemonstratingthatthenecessaryinjury-causing event has occurred?Id. at 490.Because the necessary injury-causing event had not yet occurred, plaintiffs lacked standing.Id. at 490.Similarly, Drummond has not pointed to any injury-causingeventthathasledtoanyactual,quantifiableharmtoitsbusinessinterestsin Europe or elsewhere.See also Oscar v. Univ. Students Co-op. Assn, 965 F.2d 783, 786 (9th Cir. 1992) (finding that plaintiff, a neighbor of drug-dealing Berkeley students, who alleged no out-of-pocketexpendituresasadirectorindirectresultoftheracketeeringactivitysufferedno financial loss that which would be compensable under RICO, noting that the alleged loss was purely speculative). Aside from its claim for legal costs, Drummonds allegations of injury consist of vague, non-specific allegations of reputational injury, as well as unrealized injury to unspecified future Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 44 of 5835 businessinterests.Assuch,theyarenotconcreteenoughtoconferRICOstanding.Tothe extent that Drummond attempts to satisfy the requirement of RICOs civil enforcement provision that it show an injur[y] in [its] business or property, 18 U.S.C. 1964(c), via these allegations, its claims should be dismissed. B.To the Extent Drummonds RICO Claim Rests on Its Legal Fees Injury, it is Barred by the Injury Discovery Rule TheonlyquantifiableinjuryDrummondallegesconsistsofattorneysfeesspent defendingitselfagainstthreeofthefourcasesintheUnderlyingLitigation:morethan$10 million overall, $8.5 million of which was spent on theBalcero case.Compl. 7.Drummond shouldhavediscoveredthisinjuryin2003,whenitbeganincurringlegalfeestodefendthe Romerocase.Onthisbasisalone,totheextentthatDrummondattemptstosatisfyRICOs injury requirement with its legal costs, its claims are barred by RICOs statute of limitations.14 1.Drummond was Injured and Discovered Its Injury in 2003 As discussed above, only Drummonds alleged $10 million in legal costs even arguably meetstheRICOinjurystandard.CivilRICOclaimsaresubjecttoafour-yearstatutory limitationsperiod,AgencyHoldingCorp.v.Malley-Duff&Assocs.,Inc.,483U.S.143,156 (1987), which begins to run when the plaintiff discovered or reasonably should have discovered his injury.This is the injury discovery rule announced in Rotella v. Wood, 528 U.S. 549, 553-54(2000).SeealsoPowellv.Gorham,No.2:13-CV-0055-LSC,2013WL3151632,at*18 (N.D.Ala.June14,2013)(Thestatuteoflimitationsbeginstorunonthedatethataplaintiff hasknowledgeofhisinjury.).IfDrummondwasinjuredinthatitwasforcedtopaylegal costs, that injury began in or around March 2003approximately twelve years before it filed this 14Infact,Drummondsallegedreputationalandbusinessinjuriesmayalsobetime-barred,buttheyaretoo vagueto bear analysis as required under theinjury discovery rule.This deficiency onlyunderscoreswhy they are insufficiently definite to confer standing. Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 45 of 5836 RICOclaimwhenitpaiditsfirstbillf