Beresford Booth Wins Dismissal Releasing Client from $30 Million In Exposure On Racketeering Claims

On April 17, 2013, the Hon. Richard A. Jones issued an order dismissing the majority of the pled claims in Stillaguamish Tribe of Indians v. Nelson et. al. Case No. 2:10-cv-00327-RAJ (W.D. Wash) (the “Order”).  A complete copy of the Order can be found here: [wpdm_file id=1]

In February 2010, Plaintiff, the Stillaguamish Tribe of Indians (the “Tribe”) commenced an action against multiple defendants alleging a multitude of causes of action, all centered around the Tribe’s real estate transactions, construction and operation of a methadone clinic, and a smoke shop operated on tribal lands.  Beresford Booth substituted in as counsel of record for defendants Nathan and Laura Chapman (the “Chapmans”) in May 2011.  The pled claims against the Chapmans, which were dismissed as discussed below, included both Federal and State Racketeer Influenced and Corrupt Organizations Act (“RICO”) claims, multiple breaches of fiduciary duty, fraud, civil conspiracy, and unjust enrichment claims.  The Tribe’s primary claims where the RICO claims – RICO provides a private cause of action for any person injured in his business or property by reason of a violation of RICO’s criminal provisions. 18 U.S.C. § 1964.   Section 1962(c), invoked by the Tribe, makes it “unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect interstate . . . commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise’s affairs through a pattern of racketeering activity.”

After over two years of discovery, Chapman argued on summary judgment that the Tribe could not prove RICO proximate cause—that the alleged wrongdoing led directly to the Tribe’s pled damages.  Judge Jones agreed, dismissing all of the RICO claims against the Chapmans, and other co-defendants.  At the heart of Judge Jones’ ruling was the fundamental problem that the Tribe failed to connect the claimed bad actions by defendants to the millions of dollars in alleged damages.  In light of the dismissal, it never became necessary for the court to address Chapman’s actions, which Chapman continuously contended were entirely appropriate and were actions taken to further the interests of the tribe.  The Court could not determine, based on the facts before it, whether the Tribe’s damages were the result of the purported bad acts of the defendants, larger forces like the economic recession, or other economic, social, or business decisions made by the Tribe or third parties.  The majority of the state court claims were also dismissed by the Court in the Order, and the remaining claims were swiftly settled on amicable terms by the parties.

The Tribe was represented by counsel at Lane Powell PC, Kilpatrick Townsend & Stockton LLP, and Sedgwick LLP.

As a public interest side note, Hon. Judge Jones is the half-brother of legendary musician Quincy Jones.

Should you wish to seek a fresh perspective on your complex commercial litigation matter, contact our commercial litigation department at Beresford Booth.

Source:

http://en.wikipedia.org/wiki/Richard_A._Jones

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