Appendix — Tal v. Hogan, 127 S. Ct. 1334 (2007) (No. 06-823)
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Supreme Court, U.S.
FILED
06-823 DEC 11 2006
No. __
6 FFICE OF THE CLERK
IN THE
Supreme Court of the Anited States
MOSHE TAL: BRICKTOWN 2000, INC.:and TAL
TECHNOLOGIES, INC..
Petitioners,
v.
DAN RANDOLPH HOGAN; TMK/HOGAN JOINT
VENTURE. a.k.a. COMMERCIAL REAL ESTATE
SERVICES JOINT VENTURE: HOGAN PROPERTY
MANAGEMENT, L.L.C.; BRICKTOWN-TMK/ HOGAN
PARKING, L.L.C.;: BRICKTOWN-TMK/HOGAN
ENTERTAINMENT, L.L.C.: MARK D. ELGIN:
STONEGATE MANAGEMENT COMPANY, L.L.C.:
ELGIN DEVELOPMENT COMPANY, L.L.C.; TDC
COMPANY, L.L.C.; and, TIANA P. DOUGLAS
Respondents.
Ow PETITION FoR A WRIT OF CERTIORARI
To THE TENTH Circttr COURT OF APPEALS
APPENDIX TO PETITION
FOR A WRIT OF CERTIORARI
James E. Dunn Moshe Tal
116 S. Walker 1004 S.W. 95” Street
Oklahoma City. OK 73102 Oklahoma City. OK 73139
Tel: (405)239-1000 Tel: (405) 691-2414
Counsel for Corp. Petitioners Pro se, Petitioner
Dated: December I 1. 2006.
i
APPENDIX TO
PETITION FOR A WRIT OF CERTIORARI
TABLE OF CONTENTS
Item Page(s)
I.
RULE 14 1(h)(i){i): Opinion and order entered in
conjunction with the judgment sought to be reviewed
1.
Published Opinion, United States Court of Appeals for the
Tenth Circuit’s Tal et al., v. Hogan, et al., 453 F.3d 1244
(10" Cir. 2006) - Dated 6/29/06 o.....eeeeceseeeeeeee 1-45
Order - Tenth Circuit Court of Appeals, Tal et al., v. Hogan,
et al., Appeal No. 03-6293 - Denying Appellants’ Petition
For Rehearing - Dated 9/11/06 ..............ceseeeeeeeeeeeee 46
Order - U.S. District Court for the Western District of
Oklahoma, Tal, et al., v. Hogan, et al., CIV-02-324F,
dismissing all of Tals’ claims - filed 9/30/03 ....... 47-75
Judgment - U.S. District Court for the Western District of
Oklahoma, Tal, et al., v. Hogan, et al., C1V-02-324F,
dismissing all of Tals’ claims - filed 9/30/03 ....... 76-77
Order- U.S. District Court for the Western District of
Oklahoma, Jal, et al., v. Hogan, et al., CIV-02-324F,
dismissing all of Moshe Tal’s personal claims, and other
ee BL Es reno er 78-80
Transcript of Hearing held tn the District Court -
LT FIGS, scocccvisctcenniensihaccersubantmissammameaann 81-101
il
Itl. RULE 14 1(h)(i)(vi): Other Material
Essential to Understand the Petition:
1. Second Amended Complaint -
nsec iscrsesainonssesenkewsreiesesseners 102-183
2. RICO Case Statement- filed 12/16/02 .....0........ 184-200
3. The Tals’ Joint Petition for Rehearing to the
Tenth Circuit- filed 7/13/06 .........cosesccsssseseseeeees 201-247
4. First Amended Complaint - filed 4/1/02 ........... 248-314
5. Petitioners’ Response to all Defendants’ Motions to
Dismiss, filed in District Court on 3/12/03 ....... 315-352
Appendix - 1
453 F.3d 1244
MOSHE TAL; BRICKTOWN
2000, in ©. TAL
TECHNOLOGIES, INC., Plaintiffs
- Appellants, v. DAN RANDOLPH
HOGAN; TMK/HOGAN JOINT
VENTURE, also known as
Commercial Real Estate Services;
HOGAN PROPERTY
MANAGEMENT, LLC;
BRICKTOWN-TMK/HOGAN
PARKING, LLC., also known as
Bricktown-SMC/Hogan, LLC;
BRICKTOWN-TMK/HOGAN
ENTERTAINMENT, LLC, also
known as Bricktown
Entertainement, LLC; MARK D.
ELGIN; STONEGATE
MANAGEMENT COMPANY,
LLC; ELGIN DEVELOPMENT
COMPANY, LEiCs Tec
COMPANY, LLC; TIANA P.
DOUGLAS, Defendants - Appellees.
THE CITY OF OKLAHOMA
CITY; OKLAHOMA CITY
URBAN RENEWAL
AUTHORITY, Amici-Curie.
No. 03-6293
UNITED STATES COURT OF
APPEALS FOR THE TENTH
CIRCUIT
453 F.3d 1244; 2006 U.S. App.
Appendix - 2
LEXIS 16437; 2006-1 Trade Cas.
(CCH) P75,319
June 29, 2006, Filed
PRIOR HISTORY: [**1] Appeal from the United States
District Court for the Western District of Oklahoma. (D.C. No.
02-CV-324-F). City of Oklahoma City v. Oklahoma City Urban
Renewal Auth., 1999 OK 71, 988 P.2d 901, 1999 Okla. LEXIS
85 (Okla., 1999)
DISPOSITION: AFFIRMED.
COUNSEL: Submitted on the Briefs: *
* After examining the briefs and the appellate record, this
panel has determined unanimously that oral argument
would not materially assist in the determination of this
appeal. See Fed. R. App. P. 34(a); 10th Cir. R. 34.1. The
case is therefore ordered submitted without oral argument.
Moshe Tal, Pro se, Plaintiff-Appellant.
James E. Dunn, James FE. Dunn & Associates, P.C., of
Oklahoma City, Oklahoma, for Plaintiffs-Appellants Bricktown
2000, Inc. and Tal Technologies, Inc.
Melvin R. McVay, Jr., Robert N. Sheets, Lloyd T. Hardin, Jr.,
Heather L. Hintz, Phillips, McFall, McCaffrey, McVay &
Murrah, P.C., Oklahoma City, Oklahoma, for Defendants-
Appellees Hogan, TMK/Hogan Joint Venture; Hogan Property
Management, LLC; Bricktown-TMK/Hogan Parking, LLC;
Bricktown-TMK/Hogan Entertainment, LLC; Mark D. Elgin;
Stonegate Management Company, LLC; Elgin Development
Company, LLC, and TDC Company, LLC.
Gerard F. Pignato, Tom Cooper and Brad L. Roberson, Pignato
Appendix - 3
& Cooper, P.C., Oklahoma [**2] City, Oklahoma, for
Defendant-Appellee Tiana P. Douglas.
William R. Burkett, Daniel T. Brummitt, Office of Municipal
Counselor, Oklahoma City, Oklahoma, for Amicus Curiae The
City of Oklahoma City.
Leslie V. Batchelor, Dan Batchelor, Center for Economic
Development Law, Oklahoma City, Oklahoma, for Amicus
Curiae Oklahoma City Urban Renewal Authority.
JUDGES: Before BRISCOE, MURPHY and O'BRIEN, Circuit
Judges.
OPINION BY: O'Brien
OPINION: [*1249] O'Brien, Circuit Judge.
This case is the latest in a long running dispute between
Moshe Tal, the founder and president of both Tal Technologies,
Inc., (Tal, Inc.) and Bricktown 2000, Inc. (Bricktown, Inc.), and
Oklahoma City, the Oklahoma City Urban Renewal Authority
(Renewal Authority) and various private Developers nl over the
condemnation of Tal, Inc.'s land and Bricktown, Inc.'s failure to
acquire redevelopment rights for the area in downtown
Oklahoma City known as Bricktown. On March 14, 2002, Tal,
Tal, Inc. and Bricktown, Inc. filed suit in the United States
District Court for the Western District of Oklahoma against the
Developers and the executive director of the Renewal Authority,
Tiana Douglas, alleging violations of the Racketeer Influenced
{**3] and Corrupt Organizations Act (RICO), /8 U.S.C. §
1962, and the Sherman Act, /5 U.S.C. § 2. They also asserted
pendant state law claims for tortious interference with business
and fraudulent condemnation of Tal, Inc.'s land. On September
30, 2003, the district court dismissed the [*1250] claims and
the plaintiffs appealed. We exercise jurisdiction under 28 U.S.C.
§ 1291 and AFFIRM.
Appendix - 4
nl The Developers include: Dan Randolph Hogan;
TMK/Hogan Joint Venture, a.k.a. Commercial Real
Estate Services Joint Venture; Hogan Property
Management, LLC.; Bricktown-TMK/Hogan Parking,
LLC, a.k.a. Bricktown-SMC/Hogan, LLC; Bricktown-
TMK/Hogan Entertainment, LLC, a.k.a. Bricktown
Entertainment, LLC; Mark D. Elgin; Stonegate
Management Company, LLC; Elgin Development
Company, LLC; and TDC Company, LLC.
BACKGROUND
Under the Oklahoma Urban Redevelopment Law, 11 OKLA.
STAT. TIT. § § 38-101 to 123, cities in Oklahoma may create
urban renewal authorities, which can [**4] prepare urban
renewal plans for specific urban renewal areas. 11 OKLA. STAT.
TIT. § § 38-101(11), 38-106(A). The powers of an urban
renewal authority are exercised by commissioners. 11 OKLA.
STAT. TIT. § 38-107(E). However, under 11 OKLA. STAT. TIT.
§ 38-107(F), urban renewal authorities "may employ an
executive director . . . and such other agents and employees,
permanent and temporary, as it may require. . . ." The urban
renewal plans must meet the requirements of the statute and be
approved by the municipal governing body. 11 OKLA. STAT.
TIT. § 38-106. One statutory requirement is that the plan allow
private developers the opportunity to obtain redevelopment
contracts. 11 OKLA. STAT. TIT. $ 38-104.
Pursuant to the Oklahoma Urban Redevelopment Law,
Oklahoma City created the Renewal Authority, "a public body
corporate." 11 OKLA. STAT. TIT. § 38-107(A). In 1976, the
Renewal Authority proposed an Urban Renewal Plan covering
an area in Oklahoma City known as Bricktown. In 1993, the
residents of Oklahoma City approved a sales tax to be used to
redevelop sections of the city under the guidance of the
Oklahoma City Metropolitan Area projects program (MAPS).
The Bricktown redevelopment [**5] plan was amended in 1997
Appendix - 5
as the MAPS Sports-Entertainment-Parking Support
Redevelopment Plan. Tiana Douglas served as the executive
director of the Renewal Authority during the period at issue.
On March 25, 1997, the City brought a condemnation action
against Tal, Inc. seeking to condemn two parcels of Tal, Inc.'s
land, totaling 1.4 acres, that fronted a canal running into
Bricktown. The City's intended use was public parking, public
recreation and parks. Tal, Inc. objected to the condemnation,
challenging the public necessity of the taking. The trial court
overruled Tal, Inc.'s objection and entered a condemnation order
on August 28, 1997, which was modified on October 2, 1997.
The City then transferred the land to the Renewal Authority
"with the proviso that [the] City would receive the net proceeds
from the sale of the property by [the Renewal Authority] and
that the price paid to the Urban Renewal Authority for the
property would be not less than the actual fair market value of
[the] property." City of Okla. City v. Okla. City Urban Renewal
Auth., 1999 OK 71, 988 P.2d 901, 905 (Okla. 1999) (Tal I)
(internal quotations omitted).
Also in 1997, in an [**6] effort to encourage development
of a new sports and entertainment district by private developers,
the city council approved the Bricktown redevelopment plan.
Tal I, 988 P.2d at 905. The Renewal Authority requested
proposals from developers interested in obtaining the
redevelopment contract for Bricktown. Tal, Inc. and Bricktown,
Inc. applied for the contract but "the City Council, after widely
publicized hearings and based on an extremely close vote,
ultimately awarded the [redevelopment contract] to...
TMK/Hogan rather than to Tal's group. The final decision was
made by the City Council only after two years of public
meetings, public notices, public hearings, and citizen review."
n2 /d. [*1251] The Renewal Authority then "received fair
market value for the [condemned] property" from the
Developers in the amount of $ 3.3 million. /d.
n2 Specifically, the Renewal Authority and
Appendix - 6
TMK/Hogan entered into the redevelopment contract on
July 21, 1998. The city council also awarded a parking
redevelopment contract to Bricktown Parking Investors,
LLC, on December 19, 1997. Bricktown Parking
Investors, LLC is not a party to the present dispute.
[**7]
Subsequently, Tal along with the organization Taxpayers
Against Ripoffs (TAR), filed a state gui tam action against the
Renewal Authority alleging Tal, Inc.'s land had been
impermissibly taken for private use and the redevelopment
contract was awarded amid "bid-rigging.” They also demanded
that the City file a lawsuit to recover the property and declare the
contract void. Tal I, 988 P.2d at 903-04. On January 26, 1999,
the City filed a declaratory action against the Renewal Authority
to settle whether the condemnation and the transfer to the
Renewal Authority had been valid. Jd. at 904. Tal and TAR
sought to intervene twice but were denied. See Tal I, 988 P.2d
at 904-05; Okla. ex rel. Tal v. City of Okla. City, 2000 OK 70,
19 P.3d 268 (Okla. 2000), cert. denied, 534 U.S. 814, 122 S. Ct.
40, 151 L. Ed. 2d 13 (2001) (Tal IID). n3
n3 Tal [] was an attempt by Tal and TAR to challenge
the operation of a baseball stadium located in Bricktown.
The district court dismissed and the Oklahoma Supreme
Court affirmed. See Okla. ex rel. Tal v. Norick, 1999 OK
85, 991 P.2d 999, 1001 (Okla. 1999) (Tal Il). Tal IV was
an appeal of the award of attorney's fees against Tal and
TAR in Tal ///. Although the Oklahoma Supreme Court
reversed the award of attorney's fees, it did reiterate Ta/
[IT's holding that Tal, Inc. was precluded from asserting
fraud was appropriate. See Okla. ex rel. Tal. v. City of
Okla. City, 2002 OK 97, 61 P.3d 234, 247 (Okla. 2002)
(Tal IV). The Oklahoma Supreme Court recently
dismissed as premature an appeal from summary
judgment in favor of the City and the Renewal Authority
Appendix - 7
involving the validity of the underlying transactions. See
Okla. City Urban Renewal Auth. v. City of Okla. City,
2005 OK 2, 110 P.3d 550 (Okla. 2005) (Tal V). These
enumerated 7a/ cases are separate from the initial
condemnation action and the corresponding direct
appeals.
[**Si
On September 28 and November 2, 1999, almost two years
after the entry of the condemnation order, Tal, Inc. filed two -
motions to reconsider the condemnation order based on newly
discovered evidence. In both motions, Tal, Inc. claimed the City
had fraudulently deceived the court and delivered the land to the
Renewal Authority for sale to private developers, which it
argued was a non-public use. Tal, Inc. also argued the Renewal
Authority had exceeded the scope of its eminent domain power
by condemning the land for use as parking, a usage for which
Tal, Inc. had already intended the land, and then by changing the
development of the land from parking to non-parking. The trial
court denied both motions. Tal, Inc. appealed to the Oklahoma
Court of Civil Appeals which construed the appeal as alleging
that the City had obtained the condemnation order by fraud. City
of Oklahoma City v. Tal Techs., Inc., Case No. 94,045, at 5 n.3
(Okla. Civ. App. July 31, 2001). The Court of Civil Appeals
affirmed, holding Tal, Inc. had waived its fraud claim by failing
to exercise due diligence in discovering the fraud. It also
coneluded that the City had properly condemned Tal, Inc.'s land
for a valid [**9] public purpose. /d. at 7. Tal, Inc.'s subsequent
petitions for certiorari to the Oklahoma Supreme Court and the
United States Supreme Court were denied. See Tal Techs., Inc.
v. City of Okla. City, 535 U.S. 987, 122 S. Ct. 1539, 152 L. Ed.
2d 465 (2002).
On March 14, 2002, Tal, Bricktown, Inc. and Tal, Inc. filed
a complaint against the Developers and Douglas in the United
States District Court for the Western District of Oklahoma. They
alleged the Developers and Douglas conspired to fraudulently
Appendix - 8
condemn Tal, Inc.'s land; plotted to monopolize under the
Sherman Act, /5 U.S.C. § 2; participated in "bid-rigging" in
violation of RICO, /8 U.S.C. § 1962, and engaged in tortious
interference with business under Oklahoma law. On April 1,
[*1252] 2002, Plaintiffs filed their First Amended Complaint.
Both the Complaint and the First Amended Complaint were
signed by Tal, appearing pro se for all three plaintiffs. On March
18, 2002, the district court, acting sua sponte, ordered
Bricktown, Inc. and Tal, Inc. to retain counsel within thirty days.
Tal filed a motion to reconsider, which was denied on July 2,
2002. Thereafter, Tal, Inc. [**10] and Bricktown, Inc. secured
counsel.
On May 31, 2002, the Developers and Douglas filed motions
to dismiss the First Amended Complaint. n4 The district court
heard the motions on October 30, 2002, and entered a written
order granting Defendants’ motions on October 31. However,
Bricktown, Inc. was granted leave to refile its RICO and
Sherman Act claims and Tal, Inc. was granted leave to refile its
RICO claims. All of Tal's individual claims were dismissed.
n4 On June 4, 2002, the Renewal Authority and the
City filed an amicus curiae brief in support of the motions
to dismiss.
On December 16, 2002, Tal, Inc. and Bricktown, Inc. filed
a Second Amended Complaint and a RICO Case Statement. Tal,
Inc. realleged its conspiracy to condemn by fraud claim against
Douglas. n5 Tal, Inc. and Bricktown, Inc. alleged RICO
violations against the Developers under § /962(b), against
Douglas under ¢ 1962(c), and against the Developers and
Douglas under § /962(d). Bricktown, Inc. asserted conspiracy
to monopolize under the Sherman [**11] Act, /5 U.S.C. § 2,
against the Developers and Douglas. The Second Amended
Complaint also included state law claims for tortious
interference with business against the Developers and
conspiracy to condemn by fraud against Douglas. On January
31, 2003, the Developers and Douglas filed motions to dismiss
Appendix - 9
the Second Amended Complaint under FED. R. CIV. P.
12(b)(6).
n5 The district court did not rule on the conspiracy to
condemn by fraud claim in its October 31, 2001 order
because the claim had been voluntarily withdrawn.
On September 30, 2003, the district court granted the
Developers and Douglas’ motions to dismiss the Second
Amended Complaint. This appeal followed.
DISCUSSION
A motion to dismiss under FED. R. CIV. P. 12(b)(6) "admits
all well-pleaded facts in the complaint as distinguished from
conclusory allegations." Mitchell v. King, 537 F.2d 385, 386
(10th Cir. 1976). "The court's function [**12] on a Rule
12(b)(6) motion is not to weigh potential evidence that the
parties might present at trial, but to assess whether the plaintiff's
complaint alone is legally sufficient to state a claim for which
relief may be granted." Sutton v. Utah State Sch. for the Deaf &
Blind, 173 F.3d 1226, 1236 (10th Cir. 1999) (quotation
omitted). The legal sufficiency of a complaint under Rule
12(b)(6) is a question of law which this Court reviews de novo.
Id.; see §. Disposal, Inc. v. Tex. Waste Memt., 161 F.3d 1259,
1261-62 (10th Cir.1998). "In doing so, all facts alleged in the
complaint are taken as true and all reasonable inferences are
indulged in favor of the plaintiffs." GF Gaming Corp. v. City of
Black Hawk, Colo., 405 F.3d 876, 881 (10th Cir. 2005). "This
court can affirm the district court's dismissal on any ground
sufficiently supported by the record." /d. at 882.
I. Tal’s Individual Claims
The district court dismissed Tal's individual antitrust and
RICO claims in the First Amended Complaint for lack of
standing. Tal challenges this ruling as well as the district court's
order denying him the ability [**13] to represent Tal, Inc. and
Appendix - 10
Bricktown, Inc. pro se.
[*1253] A. Standing to file antitrust and RICO claims
In order to have standing under Article LI of the
Constitution, a plaintiff must allege an "injury-in-fact." Lujan v.
Defenders of Wildlife, 504 U.S. 555, 560, 112 S. Ct. 2130, 119
L. Ed. 2d 351 (1992). However, the standing requirements in the
antitrust context are more rigorous than that of the Constitution.
Thus, "{h]arm to the antitrust plaintiff is sufficient to satisfy the
constitutional standing requirement of injury in fact, but the
court must make a further determination whether the plainttff is
a proper party to bring a private antitrust action.” Assoc. Gen.
Contractors of Calif., Inc. v. Calif. State Council of Carpenters,
459 U.S. 519, 535 n.31, 103 S. Ct. 897, 74 L. Ed. 2d 723 (1983).
This additional determination stems from section 4 of the
Clayton Act, /5 U.S.C. § 15, which states "[a]ny person .. .
injured in his business or property by reason of anything
forbidden in the antitrust laws may sue . . . and shall recover
threefold the damages . . . sustained, and . . . a reasonable
attorney's fee." n6 Thus, antitrust standing requires [**14] a
private plaintiff to show "(1) an ‘antitrust injury’; and (2) a direct
causal connection between that injury and a defendant's
violation of the antitrust laws." Ashley Creek Phosphate Co. v.
Chevron USA, Inc., 315 F.3d 1245, 1254 (10th Cir. 2003); see
Sports Racing Services, Inc. v. Sports Car Club of America, Inc.,
131 F.3d 874, 882 (10th Cir. 1997); City of Chanute, Kan. v.
Williams Natural Gas Co., 955 F.2d 641, 652 (10th Cir. 1992).
n7 An antitrust injury is defined as an "injury of the type the
antitrust laws were intended to prevent and that flows from that
which makes defendants’ acts unlawful." Brunswick Corp. v.
Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489, 97 S. Ct. 690, 50
L. Ed. 2d 701 (1977).
n6 "The private antitrust action continues to be the
principal mechanism by which the antitrust laws are
enforced. As many as 90% of antitrust cases are brought
by private plaintiffs." HERBERT HOVENKAMP,
Appendix - 11
FEDERAL ANTITRUST POLICY: THE LAW OF
COMPETITION AND ITS PRACTICE 593 (2d ed.
1999),
n7 In Reazin v. Blue Cross and Blue Shield of Kansas,
Inc., we pointed out that there may be some
interdependence between "antitrust injury" and "antitrust
standing." 899 F.2d 951, 960-61 (10th Cir. 1990). In City
of Chanute, we clarified "[a}n antitrust injury is different
from antitrust standing. Standing cannot be established
without an antitrust injury, but the existence of an
antitrust injury does not automatically confer standing."
955 F.2d at 652 n.14 (internal citation omitted and
emphasis added). See also Bell v. Dow Chem. Co., 847
F.2d 1179, 1182 (Sth Cir. 1988) ("Antitrust injury is a
component of the standing inquiry, not a separate
qualification.").
[** 15]
Section 4 of the Clayton Act has been held to exclude
personal injuries, Reiter v. Sonotone Corp., 442 U.S. 330, 339,
99 S. Ct. 2326, 60 L. Ed. 2d 931 (1979), as well as derivative
injuries such as loss of stock value or employment opportunities.
Sharp v. United Airlines, Inc., 967 F.2d 404, 407-08 (10th Cir.
1992); Curtis v. Campbell-Taggart, Inc., 687 F.2d 336, 338
(10th Cir. 1982). "It is settled law that shareholders and
employees do not have standing to sue for antitrust violations
that injure a corporation.” Jones v. Ford Motor Co., 599 F.2d
394, 397 (10th Cir. 1979). This prohibition also includes
corporate officers. Nat'l Indep. Theatre Exhibitors, Inc. v. Buena
Vista Distrib. Co., 748 F.2d 602, 608 (11th Cir. 1984) ("Neither
an officer nor an employee of a corporation has standing to bring
an action in his own right for an antitrust violation causing
injury to the corporation and its business.").
Similarly, RICO allows "|a|ny person injured in his business
or property by reason of a violation of section 1962 of this
Appendix - 12
chapter [to] sue therefor in any appropriate United States district
court and... [**16] recover threefold the damages he sustains
[*1254] and the cost of the suit, including a reasonable
attorney's fee... ." 18 U.S.C. § 1964(c). "Congress modeled §
1964(c) on the civil-action provision of the federal antitrust
laws, § 4 of the Clayton Act. .. ." Holmes v. Secs. Investor
Protection Corp., 503 U.S. 258, 267, 112 S. Ct. 1311, 117 L. Ed.
2d 532 (1992). Thus, like the Sherman Act, standing for private
individuals under RICO requires a plaintiff to have "been
injured in his business or property by the conduct constituting
the violation." Sedima, S.P.R.L. v. Imrex, Co., 473 U.S. 479,
496, 105 S. Ct. 3275, 87 L. Ed. 2d 346 (1985). Similarly,
corporate presidents ordinarily do not have standing to assert an
individual RICO claim for conduct which harmed the
corporation, because such injuries are derivative. Manson v.
Stacescu, 11 F.3d 1127, 1132-33 (2d Cir. 1993).
As the district court held, Tal does not have standing to
assert his individual RICO and antitrust claims because he has
not shown that he suffered an antitrust injury as a result of the
Appellees’ actions. At best, Tal, Inc., as owner of the condemned
property, suffered from the [**17] alleged fraudulent
condemnation, and Bricktown, Inc., which submitted the
redevelopment bid, suffered from the alleged Sherman Act and
RICO violations as they relate to the award of development
contracts. However, all of Tal's claims derive from his role as
the president of Tal, Inc. and Bricktown, Inc. These injuries are
the companies’ and the companies have the right to vindicate
them. Tal cannot assert personal injury based on the
condemnation of property he did not own, nor may he claim lost
profits and business opportunities from the Appellces' alleged
"bid-rigging."” Additionally, injury to his reputation, dignity and
emotional damages are not the type of injuries redressable by the
antitrust laws or RICO which are expressly limited to injuries to
“business or property.” /5 U.S.C. § 15; 18 U.S.C. § 1964(c);
see Reiter, 442 U.S. at 339; Manson, I1 F.3d at 1132.
B. Right to represent the corporations pro se
Appendix - 13
It has been our long-standing rule that a corporation must be
represented by an attorney to appear in federal court. n8
Consistent with that rule, Local Rule 17.1 of the United States
District [**18] Court for the Western District of Oklahoma
provides: "[p]arties who are not natural persons may not appear
pro se." Thus, the district court did not err in denying Tal the
right to represent Tal, Inc. and Bricktown, Inc. pro se and
requiring the corporations to secure counscl.
n8 See Harrison v. Wahatoyas, LLC, 253 F.3d 552,
556 (10th Cir. 2001) ("As a general matter, a corporation
or other business entity can only appear in court through
an attorney and not through a non-attomey corporate
officer appearing pro se."); De Villiers v. Atlas Corp., 360
F.2d 292, 294 (10th Cir. 1966) ("[A] corporation can
appear in a court of record only by an attorney at law.");
Flora Consir. Co. v. Fireman's Fund Ins. Co., 307 F.2d
413, 414 (10th Cir. 1962) ("The rule is well established
that a corporation can appear in a court of record only by
an attorney at law."). See also Rowland v. California
Men's Colony, 506 U.S. 194, 201-02, 113 S. Ct. 716, 121
L. Ed. 2d 656 (1993) ("It has been the law for the better
part of two centuries . . . that a corporation may appear in
the federal courts only through licensed counsel.");
Commercial & R.R. Bank of Vicksburg v. Slocomb,
Richards & Co., 39 U.S. (14 Pet.) 60, 65, 10 L. Ed. 354
(1840) ("[A] corporation cannot appear but by attorney. .
..") overruled in part by 43 U.S. (2 How.) 497, 11 L. Ed.
353 (1844); Osborn v. Bank of the United States, 22 U.S.
(9 Wheat.) 738, 830, 6 L. Ed. 204 (1824) ("A corporation,
it is true, can appear only by attorney, while a natural
person may appear for himsclf."). See generally Strong
Delivery Ministry Ass'n v. Bd. of Appeals of Cook County,
543 F.2d 32, 33-34 (7th Cir. 1976) (explaining the
justification for the rule).
{**19]
Appendix - 14
[*1255] Tal tries to avoid this result by arguing: (1)
Oklahoma statutes give directors the right to sue on behalf of the
corporation; (2) allowing a shareholder to be held liable for a
company's shortcomings but not allowing a shareholder to
appear pro se for the company creates a double standard; (3)
small companies may not be able to afford to hire an attorney;
and (4) a company has a constitutional right to allow its directors
to represent it pro se.
Tal's arguments are without merit. First, no Oklahoma
statute confers on directors the right to appear pro se, only the
right to institute suits on behalf of a corporation. See 1/8 OKLA.
STAT. TIT. § 1016(2). Moreover, such a right must be exercised
in conformity with court rules that require corporations to be
represented by counsel. See Massongill v. McDevitt, 1989 OK
CIV APP 82, 828 P.2d 438, 439-40 (Okla. Ct. App. 1989). Tal's
double standard argument ignores the benefits of corporate
status. Shareholders, including Tal, enjoy limited liability, unless
the corporate veil is pierced because the company is an
instrumentality or alter ego of its shareholders. See Key v. Liquid
Energy Corp., 906 F.2d 500, 503-04 (10th Cir. 1990) {**20]
(discussing piercing of corporate veil). Moreover, Tal's
argument ignores his power as a director to institute a suit,
through counsel, on behalf of Tal, Inc. and Bricktown, Inc.
There 1s little reason to believe that a company director will be
hindered in advancing the interests of the company by requiring
the company to be represented by an attorney.
Finally, Tal seeks to stretch the Constitution beyond elastic
limits by arguing, "[i]f... a criminal defendant has the right to
proceed Pro Se, the right should [] apply with even greater force
in a civil context. While criminal defendants are entitled to
representation by counsel at no charge, . .. no comparable right
exists for civil litigants." (Tal's Br. at 30.) Tal's comparison with
a criminal defendant's right to an attorney or to appear pro se
fails for the obvious reason that the Corstitution only guarantees
a right of representation to criminal defendants. Tal may proceed
Appendix - 15
pro se, but Tal, Inc. and Bricktown, Inc. may not. Corporations
bear the costs associated with filing suit until their claims are
vindicated.
II. Tal, Inc.'s Condemnation Claim and the Rooker-Feldman
Doctrine
Tal, Inc. alleges [**21] Appellees violated RICO by
engaging in a conspiracy to condemn its property through fraud.
The district court held this claim was barred under the Rooker-
Feldman doctrine as a prior state court case had addressed the
propriety of the condemnation. n9 Tal, Inc. tries to avoid this
result by arguing: (1) the City committed fraud on appeal to the
Oklahoma Court of Civil Appeals and this fraud creates new
grounds for yet another appeal; (2) the Defendants in this case
were not the defendants in the prior case; (3) the state
condemnation case is still pending; (4) the Oklahoma courts
ignored the difference in condemnation powers possessed by
municipalities and urban renewal authorities; and (5) the
condemned property was sold to the developers far below
market value.
n9 The Rooker-Feldman doctrine traces bazk to
Justice Willis Van Devanter's seminal opinion in Rooker
v. Fidelity Trust Coompany, 263 U.S. 413, 44 S. Ct. 149,
68 L. Ed. 362 (1923) and its elaboration in District of
Columbia Ceurt of Appeals v. Feldman, 460 U.S. 462,
103 S. Ct. £203, 75 L. Ed. 2d 206 (1983).
[**22)
Pursuant to 28 U.S.C. § 1257(a), “federal review of state
court judgments can be obtained only in the United States
Supreme Court." Kiowa Indian Tribe of Okla. v. Hoover, 150
F.3d 1163, 1169(10th Cir. 1998). The Rooker-Feldman doctrine
precludes “cases brought by state-court [*1256] losers
complaining of injuries caused by state-court judgments
rendered before the district court proceedings commenced and
inviting district court review and rejection of those judgments.”
Appendix - 16
Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280,
125 S. Ct. 1517, 1521-22, 161 L. Ed. 2d 454 (2005). Thus, the
Rooker-Feldman doctrine prevents "a party losing in state court
.. . from seeking what in substance would be appellate review
of [a] state judgment in a United States district court, based on
the losing party's claim that the state judgment itself violates the
loser's federal rights." Johnson v. De Grandy, 512 U.S. 997,
1005-06, 114 S. Ct. 2647, 129 L. Ed. 2d 775 (1994).
The Rooker-Feldman doctrine "prohibits a lower federal
court [both] from considering claims actually decided by a state
court, and claims inextricably intertwined [**23] with a prior
state-court judgment." Kenman Eng’g v. City of Union, 314 F.3d
468, 473 (10th Cir. 2002) (internal citation and quotations
omitted). nl0 A claim is inextricably intertwined if "the state-
court judgment caused, actually and proximately, the injury for
which the federal-court plaintiff seeks redress." Id. at 476. A
federal case does not involve an "inextricably intertwined" state
court judgment if the complaint challenges the constitutionality
of the state law, so long as the state court did not address it and
the plaintiff does not request the federal court to upset the state
court judgment. /d.
n10 The Supreme Court has recently begun narrowing
the scope of the Rooker-Feldman doctrine. See Exxon
Mobil Corp., 544 U.S. at 292 (holding Rooker-Feldman
inapplicable to parallel state and federal litigation); and
Lance v. Dennis, 126 S. Ct. 1198, 1202, 163 L. Ed. 2d
1059 (2006) ("The Rooker-Feidman doctrine does not bar
actions by nonparties to the earlier state-court judgment
simply because, for purposes of preclusion law, they
could be considered in privity with a party to the
judgment.") overruling in part, Kenman Eng'g, 314 F.3d
at 481. However, none of these limitations are applicable
to this case.
[**24]
Appendix - 17
Here, the district court correctly concluded the Rooker-
Feldman doctrine precluded Tal, Inc.'s condemnation claim in
federal court. Oklahoma courts squarely considered and rejected
Tal, Inc.'s claims that the initial condemnation order had been
obtained through fraud on the part of the City, City of Okla. City
v. Tal Techs., Inc., and that the property was undervalued. Jal /,
988 P.2d at 905 ("The property was appraised on three separate
occasions by professional appraisers before it was sold. The trial
court found and the record supports that the Urban Renewal
Authority received fair market value for the property.").
All of Tal, Inc.'s attempts to avoid this result are unavailing.
It is true that new allegations of fraud might create grounds for
appeal, but that appeal should be brought in the state courts. See
Rooker v. Fidelity Trust Co., 263 U.S. 413, 415, 44 8. Ct. 149,
68 L. Ed. 362 (1923). nll Additionally, Tal, Inc. does not
specifically raise new allegations of fraud but only contends the
City itself continues to make false claims: "[i]n its 9/20/00
response to [Tal, Inc.'s] Appeal, the City filed an Answer Brief
which contained numerous other [**25] [*1257] false and/or
inaccurate factual representations, including, continuation of its
false initial assertion that [Tal, Inc.'s] property was condemned
for 'public use." (Corporate Br. at 7 (emphasis added).) Thus,
the Oklahoma Civil Court of Appeals was confronted with and
reviewed the same "fraud" as the trial court. Its holding is
equally applicable to the "fraud" alleged at the trial court level
(or "before the trial court") as it was to the "fraud" allegedly
perpetrated before its very eyes. Moreover, and not withstanding
Tal, Inc.'s disagreement, the Okiahoma courts’ determination
that "public use" includes economic development- does not
constitute fraud. See Kelo v. City of New London, 125 S. Ct.
2655, 2665-66, 162 L. Ed. 2d 439 (2005) (holding "public
purpose" allows economic development by private parties if the
development may lead to new jobs or increased tax revenue).
nll In Rooker, the Court specifically stated that errors in
state cases should be reviewed and settled through the state
Appendix - 18
appellate process.
If the constitutional questions stated in the bill
actually arose in the cause, it was the province
and duty of the state courts to decide them;
and their decision, whether right or wrong,
was an exercise of jurisdiction. If the decision
was wrong, that did not make the judgment
void, but merely left it open to reversal or
modification in an appropriate and timely
appellate proceeding. Unless and until so
reversed or modified, it would be an effective
and conclusive adjudication.
Id.
[**26]
Tal's addition of new defendants in federal court also does
not change the nature of the underlying state court ruling which
upheld the validity of the condemnation. Lavasek v. White, 339
F.2d 861, 863 (10th Cir. 1965). n12 The state condemnation
proceeding need not be final in order to serve as grounds for
Rooker-Feldman preclusion. Kenman Eng'g, 314 F.3d at
474.412 In Lavasek, we confronted a challenge to the
condemnation of land by the State of New Mexico. There we
held:
The substance of the instant action is not
changed by naming as defendants the
present public officials and a county. The
acts complained of are the outgrowth of a
condemnation, judicially sanctioned, and
remain the acts of the State of New Mexico
through a complete privity of parties. Nor
does appellants’ claim of a denial of
constitutional rights alter the situation.
Appendix - 19
Id.
Finally, Tal's challenge to the Renewal Authority's power of
condemnation is irrelevant to the present [**27] case because
the City, not the Renewal Authority, condemned the land. Even
if the Oklahoma courts had ignored the allegedly critical
differences between the condemnation powers of municipalities
and urban renewal authorities, it would not eliminate Rooker-
Feldman preclusion. The doctrine would mean nothing if it
applied only when federal courts agreed with the state court
holding. Tal, Inc. argued its case in the Oklahoma state courts
and even raised grounds for post-judgment relief. Its failure in
state court does not mean it can now seek to relitigate these
issues in federal court. Just the opposite, a joss in state court
precludes a second round in federal court.
Hi. Tal, inc. and Bricktown, Inc.'s Sherman Act claims
Tai, Inc. and Bricktown, Inc. alleged the Developers and
Douglas conspired to monopolize in violation of the Sherman
Act. Specifically, Tal, Inc. and Bricktown, Inc. claimed
Appellees engaged in "bid-rigging" which led to the award of
the Bricktown redevelopment contract to the Developers. The
district court dismissed Tal, Inc.'s claim for lack of standing and
held Defendants were immune from liability for Bricktown,
Inc.'s claim under Parker v. Brown, 317 U.S. 341, 63 S. Ct. 307,
87 L. Ed. 315 (1943), |**28] and the Noerr-Pennington
doctrine. n13
nl3 The Noerr-Pennington doctrine is drawn from the
Supreme Court's opinions in Eastern Railroad Presidents
Conference v. Noerr Motor Freight, Inc., 365 U.S. 127,
81S. Ct. 523, 5 L. Ed. 2d 464 (1961) and United Mine
Workers of American v. Pennington, 381 U.S. 657, 85 S.
Ct. 1585, 14 L. Ed. 2d 626 (1965).
A. Tal, Inc.'s antitrust standing
Like Tal, Tal, Inc. must allege, inter alia, a cognizable
Appendix - 20
antitrust injury to establish standing. Ashley Creek, 315 F.3d at
1254 . To establish an antitrust injury, a plaintiff "must allege a
business [*1258] or property injury, an antitrust injury, as
defined by the Sherman Act." City of Chanute, 955 F.2d at 652.
The primary concern of the antitrust laws is the corruption of the
competitive process, not the success or failure of a particular
firm. Brunswick Corp., 429 U.S. at 488 ("The antitrust laws . .
were enacted for the protection of competition not
competitors.") (internal [**29] quotation omitted). Thus, when
a company fails because of legitimate competitive forces, it is
not entitled to recover under the antitrust laws. Additionally,
"only buyers and sellers in the defendants’ market are within the
target of the antitrust laws." Comet Mech. Contractors, Inc. v.
E.A. Cowen Constr., Inc., 609 F.2d 404, 406 (10th Cir. 1980);
see Reibert v. Atlantic Richfield Co., 471 F.2d 727, 731 (10th
Cir. 1973). This excludes secondary or remote injuries, such as
those suffered by companies that desire to obtain a subcontract
from a company injured by an antitrust violation. Comet, 609
F.2d at 406-07.
Tal, Inc. lacks standing because it did not suffer a cognizable
antitrust injury. Tal, Inc. was not a buyer or seller in the affected
market. Rather, Tal, Inc.'s allegation of an antitrust violation
centers around the alleged "bid-rigging" between the Developers
and Douglas which resulted in Bricktown, Inc.'s failure to
receive the Bricktown redevelopment contract. Tal, Inc. claims
it would have benefitted had Bricktown, Inc. received the
redevelopment contract because Tal, Inc. would have received
redevelopment subcontracts [**30] from Bricktown, Inc. and it
owned land adjacent to Bricktown, Inc.'s proposed development
area of Bricktown which would have increased in value had
Bricktown, Inc.'s bid been accepted. This alleged injury,
however, is insufficient to support Tal, Inc.'s antitrust claim. The
fact Tal, Inc. could potentially benefit as a result of a derivative
future business relationship with Bricktown, Inc. or through
incidental and speculative increases in property value is
insufficient to constitute an antitrust injury. Comet, 609 F.2d at
Appendix - 21
406-07. Accordingly, Tal, Inc. lacks standing to bring its
antitrust claim.
B. The dismissal of Bricktown, Inc.'s Sherman Act claim
against the Developers and Douglas
Bricktown, Inc. alleges both the Developers and Douglas
engaged in a conspiracy to rig bids in violation of the antitrust
laws in order to ensure the Developers were awarded the
Bricktown redevelopment contract. The district court
determined the Developers and Douglas were immune under the
Parker and Noerr-Pennington immunity doctrines. It also
questioned whether Bricktown, Inc. had adequately stated an
antitrust claim.
1. Parker and Noerr-Pennington {**31| immunity
doctrines
Bricktown, Inc. argues the Parker and Noerr-Pennington
immunity doctrines are unavailable to Appellees because the
Developers are private persons and Douglas was acting outside
of her official duties. Additionally, it argues these immunity
doctrines "do not apply when conspiracy to rig public bids are at
issue." (Corporate Br. at 31.)
a. Parker immunity
Generally, a state's anticompetitive actions are immune from
civil antitrust laws. Parker v. Brown, 317 U.S. 341, 350-52, 63
S. Ct. 307, 87 L. Ed. 315 (1943). This federalism-based state
immunity can, under certain circumstances, apply to
municipalities. Cmty. Commc'ns Co. v. City of Boulder, Colo.,
455 U.S. 40, 51, 102 S. Ct. 835, 70 L. Ed. 2d 810 (1982). To be
protected, a municipality must be "authorized by the State
pursuant to state policy to displace competition with regulation
[*1259] or monopoly public service." Town of Hallie v. City of
Eau Claire, 47] U.S. 34, 39, 105 S. Ct. 1713, 85 L. Ed. 2d 24
(1985) (internal quotation omitted). This requires that the state
legislature authorize the challenged action and intend to displace
Appendix - 22
competition with regulation. Jacobs, Visconsi & Jacobs, Co. v.
City of Lawrence, Kan., 927 F.2d 1111, 1120 (10th Cir. 1991).
[**32]
In this case, the State of Oklahoma authorized the creation
of urban renewal authorities. // OKLA. STAT. TIT. § § 38-101
to -123. The district court held that the authorizing statutes
"clearly contemplate anticompetitive activity." (Appellants'
App., Ex. 3 at 23.) In support, the district court cited 11 OKLA.
STAT. TIT. § 38-108(A) which gives an urban renewal authority
the power "[t]o undertake and carry out the urban renewal
projects within its area of operation . . . and to make and execute
contracts . . . necessary or convenient to the exercise of its
powers under this article."
We agree with the district court's analysis. In an analogous
case, Buckley Construction, Inc. v. Shawnee Civic & Cultural
Development Authority, we upheld state immunity for a
development authority that coordinated bidding under the
Oklahoma Public Competitive Bidding Act of 1974, 61 OKLA.
STAT. TIT. § § 101-136 (1981). 933 F.2d 853, 856 (10th Cir.
1991). We held the Competitive Bidding Act "clearly
contemplates anticompetitive activity," in part because the
statute "gives the public agency discretion to reject any or all
bids if it determines that is in the best interest of the State [**33]
of Oklahoma." /d. Like the Oklahoma Competitive Bidding Act
at issue in Buckley Construction, the statute at issue in this case
gives urban renewal authorities the discretion to make contracts
"necessary or convenient to the exercise of its powers." This
language has a foreseeable anticompetitive effect no less than
the Competitive Bidding Act which was found to confer
immunity in Buckley Construction. Thus, the Renewal Authority
was not required to select the lowest bidder for the
redevelopment contract if it was not "convenient to the exercise
of its powers." Consequently, Douglas, as the executive director
of the Renewal Authority, is entitled to Parker immunity,
regardless of anticompetitive results or intent, assuming her
actions were in furtherance of her Renewal Authority
Appendix - 23
responsibilities.
Bricktown, Inc. alleges Douglas was acting outside of her
official responsibilities by engaging 1n "bid-rigging." However,
no facts support Bricktown, Inc.'s claim, and there is no
evidence Douglas had a personal interest in the contract being
awarded to the Developers. Moreover, the city council approved
her actions by adopting resolutions in support of the Developers’
proposal. [**34] Bricktown, Inc.'s naked allegations of a "bid-
rigging" conspiracy do not render Douglas’ actions outside of her
official duties and thus do not deprive her of immunity.
b. Noerr-Pennington immunity
A corollary of Parker immunity is the Noerr-Pennington
doctrine, which "exempts from antitrust liability any legitimate
use of the political process by private individuals, even if their
intent is to eliminate competition." Zimomra v. Alamo Rent-A-
Car, Inc., 111 F.3d 1495, 1503 (10th Cir. 1997); see also City
{*1260] of Columbia v. Omni Outdoor Adver., Inc., 499 U.S.
365, 379-80, 111 S. Ct. 1344, 113 L. Ed. 2d 382 (1991). The
doctrine is grounded in the First Amendment and “arises from
the [Supreme] Court's conclusion that the Sherman Act was not
intended to derogate the First Amendment right of citizens to
petition the government for a redress of grievances." GF
Gaming Corp., 405 F.3d at 883. The actual intent of the parties
petitioning the government or of the government agent involved
is irrelevant. City of Columbia, 499 U.S. at 380; Zimomra, 111
F.3d at 1503.
Of course, this immunity does not encompass fraudulent
{**35] or illegal actions. Oberndorf v. City & County of
Denver, 900 F.2d 1434, 1440 (10th Cir. 1990). But, to establish
fraud or illegality, there must be more than a mere aliegation of
a "conspiracy." City of Columbia, 499 U.S. at 383.
"[C]ultivating close ties with government officials is the essence
of lobbying." Boone v. Redevelopment Agency of the City of San
Jose, 841 F.2d 886, 894 (9th Cir. 1988). "It would be unlikely
that any effort to influence legislative action could succeed
Appendix - 24
unless one or more members of the legislative body became . .
. cO-conspirators in some sense with the private party urging
such action." City of Columbia, 499 U.S. at 383. Therefore,
"{flor purposes of Noerr-Pennington, there is no distinction
between petitioning government officials and conspiring with
them." GF Gaming Corp., 405 F.3d at 883.
Bricktown, Inc. argues the Developers are not entitled to
Noerr-Pennington immunity because they are private entities
and because Noerr-Pennington immunity does not apply when
a "conspiracy to rig public bids [is] at issue." (Corporate Br. at
31.) However, Bricktown, [**36] Inc. is clearly wrong that the
Noerr-Pennington doctrine does not apply to private entities;
that is precisely for whom the immunity was created. Zimomra,
111 F.3d at 1503. Nor does the fact the alleged antitrust
violation is a "bid-rigging" claim automatically remove it from
Noerr-Pennington immunity. nl4 The Developers, even though
potentially acting with anticompetitive intent, are covered under
the Noerr-Pennington doctrine unless there is some colorable
claim of fraud or illegality. In this case, there is only an
allegation the Developers participated in an abstract "bid-rigging
conspiracy." Bricktown, Inc. does not proffer any facts that, if
credited, would support the charge of conspiracy or indicate any
fraudulent behavior on the part of the Developers or Douglas.
Bricktown, Inc.'s only specific factual allegations are that the
Developers "made two out of the five Urban Renewal's
Commissioner[s] partners in a number of business ventures;
managed an office building of a third Commissioner below
market value; and similarly, [were] the landlord[s] of Urban
Renewal and leased it office space in one [of] the Hogan Team's
downtown buildings below [**37] market value.” (Corporate
Br. at 37.)
nl4 Perhaps Bricktown, Inc. believes immunity is
unavailable because "bid-rigging" has been held a per se
violation of Section / of the Sherman Act. United States
¥. Flom, 558 F.2d 1179, 1183 (Sth Cir. 1977); United
Appendix - 25
States v. Finis P. Ernest, Inc., 509 F.2d 1256, 1261 (7th
Cir. 1975). But a per se violation only means that if the
Developers are found to be guilty of the complained
conduct, they can offer no business justification, not that
they cannot assert immunity.
According to the Developers, Bricktown, Inc. is merely
complaining that they "vigorously petitioned [the Renewal
Authority] to consider [their] proposal! for the development of
South Bricktown, lobbied the city council in promotion of
[their] development proposal, lobbied the city council to adopt
the resolutions that would be necessary to implement that
proposal, and made !egal campaign contributions." (Developers
Br. at 31.) We agree and reject Bricktown, [**38] Inc.'s
challenge to the district court's application of Noerr-Pennington
immunity.
2. Failure to adequately plead an antitrust violation
Even if the Developers and Douglas were not immune under
Parker and |*1261| Noerr-Pennington, Bricktown, Inc. failed
to allege sufficient facts to support its antitrust claim.
Bricktown, Inc. alleges it adequately plead an antitrust violation
because it "clearly alleged that the Defendants engaged in a
conspiracy scheme of bid-rigging (pre-determined befrre
publication of bid), and that the submission of TMK/Hogan's
RFP Proposal was collusive, fabricated, and non-competitive."
(Corporate Br. at 31.)
"A complaint is subject to dismissal where it does little more
than recite the relevant antitrust laws." 7V Commc'ns Network,
Inc. v. Turner Network Television, Inc., 964 F.2d 1022, 1027
(10th Cir. 1992) (interna! quotation omitted). Conclusory
allegations are insufficient. /d. at ]024. Bare bones accusations
of a conspiracy without any supporting facts are insufficient to
state an antitrust claim. Mountain View Pharmacy v. Abbott
Labs., 630 F.2d 1383, 1388 (10th Cir. 1980). Morcover, "[t]he
|**39] use of antitrust 'buzz words' does not supply the factual
circumstances necessary to support . . . conclusory allegations."
Appendix - 26
TV Commc'ns, 964 F.2d at 1026.
Bid-rigging has been found to violate Section J of the
Sherman Act when two or more competitors coordinate their
bids to a third party. United States v. Mobile Materials, Inc., 881
F.2d 866, 869 (10th Cir. 1989). However, Bricktown, Inc.'s bid-
rigging antitrust claim suffers from the lack of factual support.
nl5 Its bald allegations of "conspiracy" and "bid-rigging"” are
insufficient to support an antitrust claim and are no better than
claiming that the defendants violated "the antitrust laws" in the
abstract. Indeed, Douglas had no economic interest in the
Developers receiving the bid as she was not a competitor or
owner, nor was there any evidence of bribery. At best, the
conduct complained of includes the Developers' zealous
lobbying of the city council to approve their proposed
renovation plan. This conduct does not constitute collusion
among competitors to fix a bid price, nor is there anything
illegal about lobbying. Absent specific factual allegations that
support a claim of bid-rigging, [**40] Bricktown, Inc.'s use of
antitrust buzz-words and parroting of general antitrust theories
is insufficient to support a Sherman Act violation.
n15 An additional problem with Bricktown, Inc.'s claim
is that the alleged bid-rigging involved Douglas who was
a third party, and not a competitor. A traditional bid-
rigging claim involves collusion among competitors
against the third party who requested the bid. See Mobile
Materials, 881 F.2d at 869.
IV. Tal, Inc. and Bricktown, Inc.'s Rico Claims
As stated previously, Tal, Inc. and Bricktown, Inc.
brought RICO claims against the Developers under /8 U.S.C. §
1962(b), against Douglas under /8 U.S.C..§ 1962(c) and against
the Developers and Douglas under /8 U.S.C. § 1962(d). The
eiements of a civil RICO claim are (1) investment in, control of,
or conduct of (2) an enterprise (3) through a pattern (4) of
racketeering activity. /8 U.S.C. § 1962(a) [**41] , (6), & (c).
Appendix - 27
nl6 "Racketeering activity" is defined in 1/8 USC. $
1961(1)(B) as any "act which is indictable" under federal law
and specifically includes mail fraud, wire fraud and racketeering.
These underlying acts are "referred to as predicate acts, because
they form the basis for liability under RICO." BancOklahoma
Mortgage Corp. v. Capital Title Co., 194 F.3d 1089, 1102 (10th
Cir. 1999) (internal quotation omitted). "[A] [*1262] person
does not have to be formally convicted of any predicate act
before liability under 78 U.S.C. § 1962[] may attach." n17 /d.
("42
nl6 Under /8 U.S.C. § 1964(c), persons injured in their
business or property by reason of a violation of § 1962
may bring a RICO claim and recover treble. damages,
costs and attorney's fees.
nl7 The Developers urge this Court to require an
indictability standard in the pleadings. The district
court of Utah has required a plaintiff to show "that a
party has committed at least two indictable acts." Bache
Halsey Stuart Shields, Inc., v. Tracy Collins Bank &
Trust Co., 558 F. Supp. 1042, 1045 (D. Utah 1983)
(internal quotation omitted). Thus, "a party must allege
two acts of 'racketeering’ with enough specificity to
show there is probable cause the crimes were
committed. An offense is not ‘indictable’ merely
because it is alleged. Rather, to be indictable it must be
‘well-founded’ and based on probable cause." /d. This
pleading standard, however, has never been adopted by
this Court and has been expressly rejected by the
seventh circuit. Haroco, Inc. v. Am. Nat'l. Bank & Trust
Co. of Chicago, 747 F.2d 384, 403-04 (7th Cir. 1984).
Although such a standard would make this case easier
to dispose of, a heightened pleading requirement is not
necessary to affirm the district court's ruling, and we
decline to consider it here.
Appendix - 28
In the Second Amended Complaint and RICO Case
Statement, nl8 Bricktown, Inc. and Tal, Inc. alleged the
Developers and Douglas engaged in predicate acts of mail fraud
in violation of /8 U.S.C. § 1341, wire fraud in violation of /8
U.S.C. § 1343 and bribery in violation of /8 U.S.C. § 20]. n19
Specifically, Bricktown, Inc. and Tal, Inc. allege the Developers
fraudulently procured the Bricktown redevelopment contract by
misrepresenting to the Renewal Authority and the city council
that they were backed by Torchmark Corporation. They also
allege the Developers "acquired or maintained . . . interest in or
control over" the Renewal Authority and the city council
through bribery. (Appellants' App., Ex. 1 at 58.) The district
court dismissed the subsection (b) claim against the Developers
for failure to specifically allege predicate acts and failure to
show an interest in or control over the Renewal Authority or the
city council. It dismissed the subsection (c) claim against
Douglas for failure to specifically allege predicate acts and
failure to show a continuing threat to other parties from the
alleged RICO activities. [**43] The district court also
dismissed the subsection (d) claim against the Developers and
Douglas for failing to [*1263] sufficiently allege a predicate
violation of subsections (b) or (c). Because subsections (b) and
(c) both require allegations of racketeering activity, we first
determine whether Bricktown, Inc. and Tal, Inc. sufficiently
alleged predicate acts that can serve as a basis for RICO liability.
nl8 When evaluating the sufficiency of pleadings
under Rule 12(b)(6) of the Federal Rules of Civil
Procedure, we may consider the allegations made in a
plaintiff's RICO Case Statement in conjunction with the
complaint. See Fox v. Maulding, 112 F.3d 453, 460 (10th
Cir. 1997).
n19 Bricktown, Inc. and Tal, Inc. also argue the City's
allegedly fraudulent condemnation of Tal, Inc.'s land
constitutes a predicate act for purposes of RICO, relying
on Pelfresne v. Stephens, 35 F. Supp. 2d 1064 (N.D. Ill.
Appendix - 29
1999). However in this case, unlike in Pelfresne, we are
confronted with a state court determination that the
condemnation of Tal, Inc.'s land was proper and are
barred by the Rooker-Feldman doctrine from
reconsidering this determination on its merits. We cannot
consider the condemnation as a possible predicate act
without calling into question the validity of the state court
judgment. Thus, Tal, Inc.'s allegation that the
condemnation was fraudulent and constituted a predicate
act for RICO purposes is inextricably intertwined with the
_ State court judgment and precluded by Rooker-Feldman.
See Kenmen Eng'g, 314 F.3d at 473 (precluding claims
inextricably intertwined with state court case); Fox, //2
F.3d at 460 (excluding RICO claim barred by failure to
raise issue in state court). As to Bricktown, Inc.'s use of
the condemnation claim as a predicate act, it also fails
because the City, which was responsible for the
condemnation, is not a named defendant but is the alleged
"enterprise." The defendant must be separate from the
enterprise. See Cedric Kushner Promotions, Ltd. v. King,
533 U.S. 158, 161-63, 121 S. Ct. 2087, 150 L. Ed. 2d 198
(2001); Brannon v. Boatmen's First Nat'l Bank of Okla.,
153 F.3d 1144, 1146 (10th Cir. 1998); Bd. of County
Comm'rs of San Juan County v. Liberty Group, 965 F.2d
879, 885 (40th Cir. 1992). This is true even if we credited
Plaintiffs’ statement that the Renewal Authority was also
involved in the fraudulent condemnation.
[**44]
A. Pattern of racketeering activity
Plaintiffs allege Defendants engaged in predicate acts of
mail fraud, wire fraud and bribery. To establish the predicate act
of mail fraud, Bricktown, Inc. and Tal, Inc. must allege "(1) the
existence of a scheme or artifice to defraud or obtain money or
property by false pretenses, representations or promises, and (2)
use of the United States mails for the purpose of executing the
Appendix - 30
scheme." Bacchus Indus., Inc. v. Arvin Indus., Inc., 939 F.2d
887, 892 (10th Cir. 1991). See United States v. Kennedy, 64
F.3d 1465, 1475 (10th Cir. 1995). "The elements of wire fraud
are very similar, but require that the defendant use interstate
wire, radio or television communications in furtherance of the
scheme to defraud." BancOklahoma Mortgage Corp., 194 F.3d
at 1102 (internal quotation omitted).
[T]he common thread among. . . these crimes
is the concept of "fraud." Actionable fraud
consists of (1) a representation; (2) that is
false; (3) that is material; (4) the speaker's
knowledge of its falsity or ignorance of its
truth; (5) the speaker's intent it be acted on;
(6) the hearer's ignorance [**45] of the falsity
of the representation; (7) the hearer's reliance;
(8) the hearer's right to rely on it; and (9)
injury.
Id. at 1103. Failure to adequately allege any one of the nine
elements is fatal to the fraud claim.
The particularity requirement of Rule 9(b), Federal Rules of
Civil Procedure, applies to claims of mail and wire fraud. n20
Robbins v. Wilkie, 300 F.3d 1208, 1211 (10th Cir. 2002);
Farlow v. Peat, Marwick, Mitchell & Co., 956 F.2d 982, 989-90
(10th Cir. 1992); Cayman Exploration Corp. v. United Gas Pipe
Line Co., 873 F.2d 1357, 1362 (10th Cir. 1989). Thus, "a
complaint alleging fraud [must] 'set forth the time, place and
contents of the false representation, the identity of the party
making the false statements ard the consequences thereof.”
Koch v. Koch Indus., 203 F.3d 1202, 1236 (!0th Cir. 2000)
(quoting Lawrence Nat'l Bank v. Edmonds (In re Edmonds), 924
F.2d 176, 180 (10th Cir. 1991)). A plaintiff asserting "fraud
must also identify the purpose of the mailing within the
defendant's fraudulent scheme." McLaughlin v. Anderson, 962
F.2d 187, 191 (2d Cir. 1992). |**46]
Appendix - 31
n20 "In all averments of fraud or mistake, the
circumstances constituting fraud or mistake shall be stated
with particularity. Malice, intent, knowledge, and other
condition of mind of a person may be averred generally."
FED. R. CIV. P. 9(b).
The federal anti-bribery statute, /8 U.S.C. § 201(b), requires
the bribes to be directed toward "public official[s|" or "person[s]
.. . Selected to be a public official" within the meaning of /8
U.S.C. § 201(a).n21 Section 201(a) generally limits application
of the federal bribery statute to federal officials or persons
"acting for or on behalf of the United States, or any department,
agency or branch of Government thereof... ." /8 U.S.C. §
201 (a)(1).
To determine whether any particular individual
falls within this category, the proper inquiry is not
simply whether the person had signed a contract
with the [*1264] United States or agreed to serve
as the Government's [**47] agent, but rather
whether the person occupies a position of public
trust with official federal responsibilities. Persons
who hold such positions are public officials within
the meaning of section 201] and liable for
prosecution under the federal bribery statute.
Dixson v. United States, 465 U.S. 482, 496, 104 S. Ct. 1172, 79
L. Ed. 2d 458 (1984). The federal anti-bribery law also applics
to bribes offered to state and tocal officials if the "organization,
government, or agency receives in any one year period, benefits
in excess of $ 10,000 under a Federal program involving a grant,
contract, subsidy, loan, guarantee, insurance, or other form of
Federal assistance." /8 U.S.C. § 666(b).
n21 /8 U.S.C. § 201 (a)(2) provides that "the term
‘person who has been selected to be a public official’
means any person who has been nominated or appointed
Appendix - 32
to be a public official, or has been officially informed that
such person will be so nominated or appointed. . . ."
Bricktown, [**48] Inc. and Tal, Inc. set forth their
allegations of predicate acts in Section X of their Second
Amended Complaint. In support of their mail fraud allegation,
Bricktown, Inc. and Tal, Inc. listed forty-six letters with
descriptions of the parties, dates and general statements
concerning the title or contents of the letters. Tal, Inc. and
Bricktown, Inc.'s allegations of mail fraud center around the
alleged "Torchmark misrepresentation."
The "Torchmark misrepresentation" consists of
TMK/Hogan's alleged intentional misrepresentation to the
Renewal Authority and the city council during the bidding
process that it "was backed by the $ 11 billion Torchmark
Corporation," (Appellants' App., Ex. 2 at 2), which Tal, Inc. and
Bricktown, Inc. allege "was a major factor in [its] selection as
[a] developer for the project, and in Plaintiffs’ failure to be
selected as [the] developer .. . ." (/d., Ex. 1 at 29.) Tal, Inc. and
Bricktown, Inc. alleged that Stonegate, not Torchmark was "the
true 50% partner [with] Defendant Hogan Property in Defendant
TMK/Hogan." (/d., Ex. 2 at 3.) In other words, "Defendants'
Torchmark Misrepresentation stated that Defendant
TMK/Hogan is a 50/50 joint [**49] venture between Defendant
Hogan Property and Torchmark Development Corporation, and
not between Defendant Hogan Property and Defendant
Stonegate, as the official Oklahoma Secretary of State's record
shows." n22 (/d. at 5.)
n22 Stonegate refers to Stonegate Management
Company, LLC.
In support of their "Torchmark misrepresentation" claim,
Tal, Inc. and Bricktown, Inc. alleged Hogan sent a letter to the
Renewal Authority on July 26, 1996, detailing TMK/Hogan's
qualifications and financial responsibility which included a
statement that "Defendant TMK/Hogan's 50% partner was
Appendix - 33
Defendant TDC, identified by Defendants therein as 'a wholly
owned subsidiary’ of Torchmark." (/d., Ex. 1 at 14-15.) Tal, Inc.
and Bricktown, Inc. also alleged Hogan and Elgin mailed
various financial documents detailing information about
Torchmark on several occasions. n23 This material itself is not
alleged to have been false, but rather was used in support of the
initial misrepresentation.
n23 These primarily included Torchmark's 1995
through 1998 10-K Annual Report and Financial
Statements. (/d. at 47-48.)
[**50]
In the district court, the Developers argued Stonegate was a
wholly owned subsidiary of Torchmark. In support, they cited to
the public records of the Alabama Secretary of State which
allegedly show that Torchmark formed TDC on June 10, 1988,
and was subsequently merged into TDC Company, LLC, on
November 24, 1999. Further, they argued that Oklahoma County
Clerk records indicated that TDC and Hogan Property
Management filed a Fictitious Name Certificate on January 12,
1996, which stated that those entities "associated themselves as
partners under the name of TMK/ Hogan Joint Venture.” n24
(Appellees' Supp. App. Vol IV [*1265] at 0966 (internal
quotation omitted).) The Developers also alleged that TDC
assigned its interest in TMK/Hogan in November 1996 to its
wholly-owned subsidiary Stonegate Management Corporation
which was then merged into Stonegate Management Company,
LLC.
n24 Exhibits attached to a complaint are properly
treated as part of the pleadings for purposes of ruling on
a motion to dismiss. /ndus. Constructors Corp. v. United
States Bureau of Reclamation, 15 F.3d 963, 964-65 (10th
Cir. 1994). Ordinarily, consideration of material attached
to a defendant's answer or motion to dismiss requires the
court to convert the motion into one for summary
Appendix - 34
judgment and afford the parties notice and an opportunity
to present relevant evidence. FED. R. CIV. P. 12(b);
David v. City & County of Denver, 101 F.3d 1344, 1352
(10th Cir. 1996). However, facts subject to judicial notice
may be considered in a Rule 12(b)(6) motion without
converting the motion to dismiss into a motion for
summary judgment. See Grynberg v. Koch Gateway
Pipeline Co., 390 F.3d 1276, 1278 n.1 (10th Cir. 2004)
(citing 27A Fed. Proc., L. Ed. § 62:520 (2003)). This
allows the court to "take judicial notice of its own files
and records, as well as facts which are a matter of public
record." Van Woudenberg ex rel. Foor v. Gibson, 211
F.3d 560, 568 (10th Cir. 2000), abrogated on other
grounds by McGregor v. Gibson, 248 F.3d 946, 955 (10th
Cir. 2001). However, "[t]he documents may only be
considered to show their contents, not to prove the truth
of matters asserted therein." Oxford Asset Mgmt., Lid v.
Jaharis, 297 F.3d 1182, 1188 (11th Cir. 2002).
[**51]
The Second Amended Complaint acknowledged that
Stonegate Management Company was formed on November 22,
1999, and Stonegate Management Corporation was merged into
it on November 24, 1999. It also alleged TDC Company, LLC,
was created on November 22, 1999, and merged with
Torchmark Development Corporation on November 24, 1999.
But the complaint specifically alleged there was no affiliation
between Stonegate and Torchmark Development. n25 According
to Tal, Inc. and Bricktown, Inc., the purpose of the separate
creation and mergers of Torchmark Development Corporation,
Torchmark Development Company, Stonegate Management
Corporation and Stonegate Management Company was to
"retroactively cover up and conceal [the] Torchmark
Misrepresentation . . . by representing that Defendant Elgin
Development is the owner of Defendant TDC and that TDC
wholly owns Defendant Stonegate." (Appellants' App., Ex. 2 at
Appendix - 35
3.)
n25 According to the Second Amended Complaint,
"TMK/Hogan's two partners, as of 1996, were Defendants
Hogan Property and Stonegate, and not. . any entity
affiliated with Torchmark." (/d. at 15.)
[**52]
The district court's order did not specifically address the
"Torchmark misrepresentation." Rather, it found that none of the
alleged mail communications sufficiently pled fraud with
particularity. We disagree. The details of the "Torchmark
misrepresentation" alleged in the Second Amended Complaint
coupled with the documents listed in support of that claim
sufficiently satisfy Rule 9(b)'s requirements. Tal, Inc. and
Bricktown, Inc. identified the parties, the dates, the content of
the communications, how they were allegedly fraudulent and
how they furthered the fraudulent enterprise. Although the
Developers' argument that Stonegate is a wholly owned
subsidiary of Torchmark may be fully borne out by the public
records of Alabama and Oklahoma, we decline to consider these
materials. n26 Rule 12(b)(6) [*1266] motions to dismiss are not
designed to weigh evidence or consider the truth or falsity of an
adequately pled complaint. Sutton, 173 F.3d at 1236. This is
especially controlling in the face of a direct claim to the contrary
in the complaint and in the absence of a ruling on the issue from
the district court. Thus, Tal, Inc. and Bricktown, Inc. sufficiently
alleged an act [**53] of mail fraud based on the alleged
"Torchmark misrepresentation.”
n26 Even assuming that Stonegate is a wholly owned
subsidiary of Torchmark, that fact does not necessarily
foreclose a claim of misrepresentation. Tal, Inc. and
Bricktown, Inc. might still have a claim if the bid
submitted to the Renewal Authority by the Developers
claimed Torchmark was a partner in TMK/Hogan, when
in fact Stonegate, a wholly owned subsidiary of
Torchmark, was Hogan's partner at the time of the bid.
Appendix - 36
Whether the listing of a parent of a wholly owned
subsidiary as a partner in a development company, rather
than the actual subsidiary partner, in a bid constitutes
misrepresentation is an issue we decline to address.
In addition, we agree with the district court that the May 18,
1998 letter authored by Mr. Tolbert, which was allegedly caused
to be mailed by the Developers, satisfies the requirements of
Rule 9(b). This letter allegedly supported TMK-Hogan's earlier
fraudulent statement on July 17, 1997-- that the Bricktown
Association [**54] was a partner with TMK/Hogan.
(Appellants’ App., Ex. 1 at 36-37.) Like the "Torchmark
misrepresentation," this allegedly false statement was designed
to increase the appeal of TMK/Hogan as a developer and help it
secure the award of the development contract.
As to the remaining letters, we again agree with the district
court that they “appear to be innocuous business
communications." (Appellants' App., Ex. 3 at 13.) While the
Second Amended Complaint references these letters their
fraudulent nature is not apparent on their face. This is especially
problematic because Tal, Inc. and Bricktown, Inc. not only failed -
to allege how these communications were fraudulent but also
how they specifically furthered the fraudulent enterprise.
Moreover, eighteen of the forty-six exchanges occurred after
July 21, 1998, the date the contract was awarded to the
Developers. Thus, the eighteen post-award letters were at best
concealment and could not have been used "for the purpose of
executing the scheme." See Kann v. United States, 323 U.S. 88,
94-95, 65 S. Ct. 148, 89 L. Ed. 88 (1944); United States v.
Cardall, 885 F.2d 656, 680-82 (10th Cir. 1989). Therefore,
Bricktown, Inc. and [**55] Tal, Inc.'s allegations of mail fraud
as a predicate act are limited to the documents involving the
Torchmark and Bricktown Association misrepresentations.
In support of their wire fraud allegation, Bricktown, Inc. and
Tal, Inc. list twenty-seven telephone calls, emails, faxes and
cable broadcasts involving Appellees and the process granting
Appendix - 37
the development contract to the Developers. All but three of the
electronic transmissions relied upon suffer from the same
problems as the majority of the communications supporting the
mail fraud claim. Only three were alleged with sufficient
particularity to establish cognizable claims for wire fraud: (1)
the August 1, 1997 submission by Douglas to the city council of
a fax sent to Douglas by TMK/Hogan, (Appellants’ App., Ex. 1
at 32-33); (2) the August 5, 1997 broadcast of the city council
meeting where Douglas allegedly made an intentionally
fraudulent statement about her role in the selection process, (/d
at 33, 53); and (3) telephone conversations occurring between
May 11, 1998, and May 18, 1999, between Hogan, Elgin and
Douglas and Mr. Tolbert, the president of the Bricktown
Association. (/d. at 36, 54.) Unlike the other twenty-four [**56]
wire communications alleged (and the forty-six letters), these
three communications not only describe the date, the parties to
the communication and the subject matter, but also how they
were fraudulent and what they were designed to accomplish.
Thus, Bricktown, Inc. and Tal, Inc. adequately alleged three acts
of mail fraud in violation of /8 U.S.C. § 1343.
In support of their bribery claim under /8 U.S.C. § 207,
Bricktown, Inc. and Tal, Inc. list ten actions by both the
Developers and members of the Renewal Authority, including
Douglas, that arguably benefitted |{*1267] each other. n27
However, Douglas, the Renewal Authority Commissioners and
the city council are all municipal state actors with no ties to
federal programs apparent from the pleadings. This is fatal to
Bricktown, Inc. and Tal, Inc.'s bribery claim because they fail to
adequately allege that the relevant parties are "public officials"
or acting on behalf of the federal government under /8 U.S.C. §
201 (a) or § 666. Bricktown, Inc. and Tal, Inc. conceded to the
district court that they could not state a claim against Douglas
under the [**57] federal anti-bribery statute but argued she
violated a state anti-bribery statute. n28 While violations of state
bribery laws can serve as predicate acts under RICO, see United
States v. Welch, 327 F.3d 1081 (10th Cir. 2003), the plaintiffs
Appendix - 38
failed to plead that Douglas had violated a state anti-bribery
statute in either their RICO Case Statement or their Second
Amended Complaint. Additionally, as noted by the district court,
Bricktown, Inc. and Tal, Inc. never requested leave to amend
their complaint in order to allege a violation of a state anti-
bribery statute. (Appellants' App., Ex. 3 at 14.)
n27 Included in these acts are: (1) the renting of office
space to the Renewal Authority at below-market rates; (2)
bribing Renewal Authority Commissioner Hall by making
him a 50% partner in an East Wharf development project;
(3) bribing Renewal Authority Commissioner Nichols by
offering the Mid-American Tower at below-market rates;
(4) securing Commissioner Talbot a position on the
Myriad Garden Trust and the Renewal Authority; (5)
bribing Councilman Liebmann by contributing to a
political fundraiser which led to his appointment to
political positions with various City trusts; and (6) bribing
Mayor Humphreys.
[**58]
n28 Specifically, they allege Douglas violated 21
OKLA. STAT. TIT. § 38] which makes it a felony to:
give|], offer[], or promise[] to any executive,
legislative, county, municipal, judicial, or other
public officer, or any employee of the State of
Oklahoma or any political subdivision thereof, . . .
any gift or gratuity whatever, with intent to
influence his act, vote, opinion, decision, or
judgment on any matter, question, cause, or
proceeding which then may be pending, or may by
law come or be brought before him in his official
Capacity ....
Bricktown, Inc. and Tal, Inc.'s belated request on appeal that
"if the Court finds that some of the allegations stated in the
Appendix - 39
almost 300 paragraphs and sub-paragraphs are not too clear, at
the least, the Court should point to the unclear allegations and
permit the Appellants to amend and clarify these issues," comes
too late to offer escape from an adverse Rule 12(b)(6) order.
(Corporate Br. at 43.) Bricktown, Inc. and Tal, Inc. could and
should have sought leave to amend their Second Amended
Complaint with the district court, not [**59] with this Court on
appeal. See The Tool Box, Inc. v. Ogden City Corp., 419 F.3d
1084, 1088 (10th Cir. 2005) ("Courts have refused to allow a
postjudgment amendment when, as here, the moving party had
an opportunity to seek the amendment before entry of judgment
but waited until after judgment before requesting leave.") Thus
the only allegations sufficient to support a claim of a predicate
act are the letters involving the Torchmark and Bricktown
Association misrepresentations and the three wire
communications which allege Douglas, Hogan and Elgin
engaged in wire fraud. ~
As a final point, we question whether Plaintiffs’ allegations
of predicate acts satisfied the requirement of "a pattern of
racketeering activity." A "pattern" of racketeering is defined as
"at least two acts of racketeering activity, . . . which occurred
within ten years” of each other. /8 U.S.C. § 1961(5). However,
because "RICO is not aimed at the isolated offender," Resolution
Trust Corp., 998 F.2d at 1544, proof of two or more predicate
acts [*1268] are not sufficient to prove a pattern unless there is
a relationship between the predicate acts and a threat of [**60]
continuing activity. H.J. Inc. v. Northwestern Bell Tel. Co., 492
U.S. 229, 239, 109 S. Ct. 2893, 106 L. Ed. 2d 195 (1989); Duran
v. Carris, 238 F.3d 1268, 1271 (10th Cir. 2001). Continuity of
threat requires both proof of "a series of related predicates
extending over a substantial period of time," as well as a
"showing that the predicates themselves involve a distinct threat
of long-term racketeering activity .. . or that the predicates are
a regular way of conducting the defendant's ongoing legitimate
business or the RICO enterprise." Resolution Trust Corp., 998
F.2d at 1543. To determine continuity we examine both the
Appendix - 40
duration of the related predicate acts and the extensiveness of
the RICO enterprise's scheme. /d. In determining the
extensiveness of the predicate acts we consider a variety of
factors as well as "external facts that are not necessarily charged
as predicate acts." /d. at 1544.
Here, none of the Appellants specifically allege a continuing
threat by the Developers and Douglas to control the Renewal
Authority and the city council. The allegations are confined to
the award of one, albeit large, development contract [**61] to
the Developers. There is no reason to believe that the grant of
one development contract acquired through misrepresentation of
financial backing and partnership constitutes "a distinct threat of
long-term racketeering activity." Jd. at 1543. In theory, we could
consider material outside of the alleged predicate acts to find a
more extensive threat to the Renewal Authority and the city |
council. /d. at 1544. However, because the extensiveness of the
threat is a question of fact, id., we will assume for the purposes
of this opinion that the predicate acts alleged by Bricktown, Inc.
and Tal, Inc. establish a pattern of racketeering activity. We next
consider whether the pattern of racketeering activity states a
claim under /8 U.S.C. § 1962(b), (c), or (d).
B. Section 1962(b)
18 U.S.C. § 1962(b) makes it illegal for "any person through
a pattern of racketeering activity or through collection of an
unlawful debt to acquire or maintain, directly or indirectly, any
interest in or control of any enterprise which is engaged in...
interstate . . . commerce." The purpose of the statute is “to
prohibit [**62] efforts to muscle in on legitimate business
through the commission of a pattern of racketeering activity."
SMITH & REED, CIVIL RICO, P6.04[5][b]. To state a claim
under section 1962(b), the plaintiff must allege the defendant (1)
acquired or maintained an interest in or control of (2) an
enterprise engaged in interstate commerce (3) through a pattern
(4) of racketeering activity, or collection of an unlawful debt.
See Sowell v. Butcher & Singer, Inc., 926 F.2d 289, 296 (3d Cir.
Appendix - 41
1991). As with other section 1962 claims, the injury must be
attributable to the prohibited action. Danielsen v. Burnside-Ott
Aviation Training Ctr., Inc., 291 U.S. App. D.C. 303, 941 F.2d
1220, 1231 (D.C. Cir. 1991).
Section 1962(b) claims are relatively uncommon because the
first element requires sufficient allegations of "an interest in or
control of" an enterprise, as opposed to the less demanding
requirement of "association" with the enterprise in section
1962(c) claims. "Interest in or control of" requires more than a
general interest in the results of its actions, or the ability to
influence the enterprise through deceit. See Univ. of Maryland
at Baltimore v. Peat, Marwick, Main & Co., 996 F.2d 1534,
1539-40 (3d Cir. 1993) [**63] (allegedly preparing false
financial statements on behalf of the enterprise is not
participation), Rather, it requires some ownership of the
[*1269] enterprise or an ability to exercise dominion over it.
n29
n29 See United States v. Jacobson, 691 F.2d 110, 113
(2d Cir. 1982) ("interest' in fact encompasses all ‘property
rights’ in a business enterprise" for purposes of $
1962(b)); United States v. Martino, 681 F.2d 952, 954
(Sth Cir. 1982) (en banc) (participation in the advantage,
profit and responsibility of the enterprise is an "interest");
Moffatt Enters., Inc. v. Borden Inc., 763 F. Supp. 143, 147
(W.D. Pa. 1990) ("it is clear that the ‘interest'
contemplated in... § /962(b) is in the nature of a
proprietary one, such as the acquisition of stock, and that
the 'control’ contemplated is in the nature of the control
one gains through the acquisition of sufficient stock to
affect the composition of a board of directors."). But see,
Ikuno v. Yip, 912 F.2d 306, 310 (9th Cir. 1990) (“control
within the meaning of § /962(b) need not be formal
control and ‘need not be the kind of control that 1s
obtained, for example, by acquiring a majority of the
stock of a corporation.) (quoting Sutliff, Inc. v. Donovan
Appendix - 42
Cos., 727 F.2d 648, 653 (7th Cir. 1984)).
[**64]
Bricktown, Inc. and Tal, Inc.'s claims founder on the
combination of elements (1) and (4). They failed to adequately
allege Appellees acquired or maintained an interest in or control
of the Renewal Authority or the city council through the
predicate acts. Bricktown, Inc. and Tal, Inc.'s alleged three acts
of wire fraud fall short of demonstrating control of or an interest
in the Renewal Authority and the city council; at best they show
a misrepresentation to those bodies. Perhaps the allegations of
bribery might have been sufficient to demonstrate an interest in
or control of the Renewal Authority or the city council, n30 if
they had been adequately plead. But in the absence of sufficient
allegations of bribery, Bricktown, Inc. and Tal, Inc. did not
adequately allege the defendants acquired or maintained an
interest in or control of the Renewal Authority or the city
council based on the three alleged acts of wire fraud.
n30 But see In re Am. Honda Motor Co., Inc.
Dealerships Relations Litigation, 941 F. Supp. 528, 556
(D. Md. 1996) (holding bribery fails to establish
investment in or acquiring interest in an enterprise for
RICO purposes).
[**65]
C. Section 1962(c):
18 US.C. § 1962(c) makes it illegal "for any person
employed by or associated with any enterprise engaged in, or the
activities of which affect, interstate or foreign commerce, to
conduct or participate, directly or indirectly, in the conduct of
such enterprise's affairs through a pattern of racketeering activity
...." To survive a Rule 12(b)(6) motion, a civil RICO claim
must allege the defendants (1) participated in the conduct (2) of
an enterprise (3) through a patter (4) of racketeering activity.
Cayman Exploration Corp., 873 F.2d at 1362; see Sedima,
Appendix - 43
S.P.R.L., 473 U.S.at 496. The Supreme Court has adopted the
"operation or management” test to determine whether the
defendant has conducted or participated in the conduct of the
enterprise by having some part in directing the affairs of the
enterprise. Reves v. Ernst & Young, 507 U.S. 170, 179, 113 S.
Ct. 1163, 122 L. Ed. 2d 525 (1993). "For liability to be imposed
under that test, the defendants must have participated in the
operation or management of the RICO enterprise,"
BancOklahoma Mortgage Corp., 194 F.3d at 1100, "although it
is not [**66] necessary for the participant to have significant
control." Resolution Trust Corp., 998 F.2d at 154i(internal
quotation omitted).
In this case, Bricktown, Inc. and Tal, Inc. have failed to
allege sufficient predicate acts to establish Appellees
participated in the operation or management of the Renewal
Authority or the city council. All the alleged predicate acts relate
to TMK/Hogan's bid for the award of the Bncktown
development contract, and at [*1270] most involve an attempt
to influence the Renewal Authority and the city council through
misrepresentations, not through operation or management-
Misrepresenting material facts to influence a selection process
is a serious allegation to be sure, but does not rise to the level of
participation in the operation or management of the Renewal
Authority and the city council. Again, had Appellants adequately
alleged Douglas was involved in any of the predicate acts, this
would be a different case, as it would be if the Appellants had
adequately alleged bribery. See Resolution Trust Corp., 998 F.2d
at 1542 (holding chief executive officer of the enterprise
participated in the conduct of the enterprise); Reves, 507 U.S. at
184 |**67| (noting "[a]n enterprise also might be operated or
managed by others associated with the enterprise who exert
control over it... by bribery.") (internal quotations omitted). As
it stands, Appellants' allegations of mail and wire fraud fail to_
establish a violation of $ /962(c).
D. Section 1962(d):
Appendix - 44
18 U.S.C. § 1962(d) makes it illegal "for any person to
conspire to violate any of the provisions of subsection (a), (b),
or (c) of this section." Tal, Inc. and Bricktown, Inc.'s § 1962(d)
claim also fails. By its terms, § 1962(d) requires that a plaintiff
must first allege an independent violation of subsections (a), (b),
or (c), in order to plead a conspiracy claim under subsection (d).
See United States v. Hampton, 786 F.2d 977. 978 (10th Cir.
1986) ("The object of a RICO conspiracy must be to violate a
substantive RICO provision."); Schroder v. Volcker, 864 F.2d
97, 98 (10th Cir. 1988). If a plaintiff has no viable claim under
§ 1962(a), (b), or (c), then its subsection (d) conspiracy claim
fails as a matter of law. See Condict v. Condict, 826 F.2d 923,
927 (10th Cir. 1987) ("[A]ny claim under [**68] § 1962(d)
based on a conspiracy to violate the provisions of 18 U.S.C. §
1962(a), (b), or (c) must necessarily fall if the substantive claims
are themselves deficient."); BancOklahoma Mortgage, 194 F.3d
at 1103; Edwards v. First Nat'l Bank, Bartlesville, Okla., 872
F.2d 347, 352 (10th Cir. 1989); Grider v. Texas Oil & Gas
Corp., 868 F.2d 1147, 1151 (10th Cir. 1989); Torwest DBC, Inc.
v. Dick, 810 F.2d 925, 927 n.2 (10th Cir. 1987). Because
Appellants have failed to allege a sufficient claim under
subsections (b) or (c), their subsection (d) conspiracy claim fails
as a matter of law.
V. Pendant State Law Claims
Tal argues the district court improperly declined to exercise
its pendant jurisdiction over the state law claims of fraudulent
condemnation and tortious interference with business, because
they alleged violations of the Fifth and Fourteenth Amendments
Conversely, both Douglas and the City argue the tort clair:
should be dismissed with prejudice. Douglas argues the tort
claim is barred by the statute of limitations. The City argues it
is barred by the Oklahoma Governmental [**69] Tort Claims
Act. We need not decide these issues.
Appendix - 45
The district court was precluded from considering the
Appellants’ Fifth Amendment claim by the Rooker-Feldman
doctrine. As for the other state law tort claims, we note that
"(t]he Fourteenth Amendment [is not] a font of tort law."
Daniels v. Williams, 474 U.S. 327, 332, 106 S. Ct. 662, 88 L. Ed.
2d 662 (1986). Additionally, the court was not required to
consider either the merits or the procedural issues attendant to
the state law claims. Because the district court properly
dismissed all of Appellants' federal claims, it was well within its
discretion under 28 U.S.C. § 1367(c)(3) to decline to exercise
supplemental jurisdiction over plaintiffs’ state-law claims. Exum
v. United States [*1271] Olympic Comm., 389 F.3d 1130,
1138-39 (10th Cir. 2004); Lancaster v. Indep. Sch. Dist. No. 5,
149 F.3d 1228, 1236 (10th Cir. 1998). The court, therefore, did
not err in dismissing the state interference with business claims
without prejudice.
CONCLUSION
We AFFIRM the district court's dismissal of Tal's
Complaint, and Tal, Inc. and Bricktown, Inc.'s Second Amended
Complaint [**70] under Rule 12(b)(6) of the Federal Rules
Civil Procedure. We also AFFIRM the district court's dismissal
of the pendant state law claims without prejudice.
Appendix - 46
UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT
MOSHE TAL, et a!.,
Plaintiffs - Appellants,
V.
DAN RANDOLPH HOGAN, et al., No. 03-6293
Defendants - Appellees,
THE CITY OF OKLAHOMA CITY, et al.,
Amicus Curiae.
ORDER
Filed September 11, 2006
Before BRISCOF, MURPHY and O'BRIEN, Circuit Judges.
Appellant’s petition for rehearing is denied. Appellant’s
motion to file supplemental exhibits to appellant’s petition for
rehearing ahd application for leave of court to accept said
supplemental public record documents two business days late is
denied.
Entered for the Court
ELISABETH A. SHUMAKER, Clerk
By: S/Deputy Clerk
Deputy Clerk
Appendix - 47
IN THE UNITED STATES DISTRICT COURT FOR
THE WESTERN DISTRICT OF OKLAHOMA
BRICKTOWN 2000, INC.., ) [“FILED”
and TAL TECHNOLOGIES, INC., ) 9/30/03]
)
Plaintiffs, )
vs. - ) Case No.
) CIV-02-0324-F
DAN RANDOLPH HOGAN, : ee
et al., )
)
Defendants. )
ORDER
Before the court is the Motion to Dismiss Plaintiffs’
Second Amended Complaint of Defendants Dan Randolph
Hogan; TMK/Hogan Joint Venture (nka Commercial Real
Estate Services Joint Venture); Hogan Property Management
L.L.C.; Bricktown-TMK/Hogan Parking, L.L.C. (nka
Bricktown-SMC/Hogan L.L.C.); Bricktown-TMK/Hogan
Entertainment, L.L.C. (nka Bricktown Entertainment L.L.C.);
Mark D. Elgin; Stonegate Management Company, L.L.C.; Elgin
Development Company, L.L.C; and TDC Company, L.L.C, filed
January 31, 2003 (docket entry no. 113), and Defendant Tiana
P. Douglas’ Motion to Dismiss, filed January 31,2003 (docket
entry no. 115). Upon review of all of the parties’ submissions in
support of and in opposition to the motions, as well as the Brief
Amicus Curiae of the City of Oklahoma City and the Oklahoma
City Urban Renewal Authority in Support of the Motions to
Dismiss Second Amended Complaint, and Plaintiff's Response
to Amicus Brief, the court makes its determination.
Fed.R.Civ.P. 12(b)(6) Standard
Appendix - 48
The purpose of a Fed.R.Civ.P. 12(b)(6) motion to
dismiss is to test the» ‘‘ciency of the complaint, and the court
must accept all well-L.caded allegations, as distinguished from
conclusory allegations, as true and must construe those well-
pleaded allegations in the light most favorable to the plaintiffs.
Maher v. Durango Metals, Inc. 144 F.3d 1302, 1304 (10" Cir.
1998); Coosewoon v. Meridian Oil Co., 25 F.3d 920 924 (10"
Cir. 1994). The issue in reviewing the sufficiency of the
complaint is no. whether the plaintiffs will prevail, but whether
the plaintiffs are entitled to offer evidence in- support of their
claims, Scheuer v. Rhodes, 416 U.S. 232, 236 (1974) overruled
on other grounds by Harlow v. Fitzgerald, 457 U.S. 800 (1982).
Dismissal under Rule 12(14(6) is a “harsh remedy which must
be cautiously studied, not only to effectuate the spirit of the
liberal rules of pleading but also to protect the \interests o
justice.” Cayman Exploration Corp. v. United Gas Pipe Line
Co.,873 F.2d 1357, 1359 (10 Cir. 1989). A complaint should
not be dismissed for failure to state claim”unless it appears
beyond doubt that the plaintiff[s] can prove no set of facts in
support of [their] claim[s] which would entitle [them] to relief.”
Conley v. Gibson, 35 U.S. 41, 45-46 (1957).
The Rooker-Feldman Doctrine
The threshold question for the court is whether plaintiffs’ claims
survive the jurisdictional bar of the Rooker-Feldman doctrine.
See, Rooker v. Fidelity Trust Co. 263 U.S. 413, 414-416 (1923);
District of Columbia Court of Appeals v. Feldman, 460 U.S.
462, 482 (1983). The court must undertake this inquiry before
addressing the non-jurisdictional issues raised by defendants.
Long v. Shorebank Dev. Corp., 182 F.3d 548, 554-555 (7th Cir.
1999).
The Rooker-Feldman doctrine provides that federal
courts, other than the Unite States Supreme Court, lack
jurisdiction to adjudicate claims seeking review of state court
judgments. See, Feldman, 460 U.S. at 486; Rooker, 263 U.S. at
Appendix - 49
415-416. The party losing in a state court proceeding is generally
“barred from seeking what in substance would be appellate
review of the state judgment in a United States district court,
based on the losing party’s claim that the state judgment itself
violates the loser’s federal rights.” Johnson v. De Grandy, 512
U.S. 997, 1005-1006 (1994). Review of the state court judgment
must proceed to the state’s highest court and then to the United
States Supreme Court pursuant to 28 U.S.C. § 1257. See, Facio
v. Jones, 929 F.2d 541, 543 (10" Cir. 1991). -
The Rooker-Feldman doctrine bars not only cases
seeking direct review of state court judgments; it also bars cases
that are “inextricably intertwined” with a prior state court
judgment. See, Feldman, 460 U.S. at 482 n. 16. In determining
whether the federal claims are inextricably intertwined with the
state court judgment, the court must ask “whether the imjury
alleged by the federal plaintiff resulted from the state court
judgment itself or is distinct from that judgment.” Kenmen
Engineering v. City of Union, 314 F.3d 468, 476 (10" Cir.
2002).
The Tenth Circuit has previously held that the Rooker-
Feldman doctrine should not be applied against “non-parties.”
Johnson _v. Riddle, 305 F.3d 1107, 1116 (10" Cir. 2002).
According to the court, “this general rule follows from Rooker-
Feldman’s underlying premise: the doctrine prohibits suits in
lower federal court that would be in substance, appellate review
of state-court judgments.” Kenmen Engineering, 314 F .3d at
480. “Because ‘judgments’ only decide nghts of ‘parties,’ a
person would gencrally have no basis (or right) to appeal a
judgment to which that person was not a party.” Jd.
Although the Supreme Court has not decided the
question, the Tenth Circuit has also applied the Rooker-Feldman
doctrine to judgments of intermediate state courts. See, Kenmen
Engineering, 314 F.3d at 473.
Appendix - 50
- In their motions, defendants contend that all of plaintiffs’
claims are barred under the Rooker-Feldman doctrine because
they are inextricably intertwined with the state court judgments
in City of Oklahoma City v. Oklahoma City Urban Renewal
Authority, 988 P.2d 901 (Okla. 1999) (“Tal I’’)', State ex rel. Tal
v. City of Oklahoma City, 19 P.3d 268 (Okla. 2000) (“Tai It”
' On January 12, 1999, a group of taxpayers of the City of Oklahoma
City (“City”), calling themselves Taxpayers Against Ripoffs
(“TAR.”), submitted a gui tam Written Demand to the City Clerk
pursuant to Okla. Stat. tit, 62, §§ 372 and 373, regarding several
transactions related to the Oklahoma City Metropolitan Area Projects
program, known as “MAPS.” On January 26, 1999, the City brought
a declaratory judgment action against Oklahoma City Urban Renewal
Authority (““OCURA”), Bricktown Parking Investors, L.L.C.
(defendant, Bricktown-TMK/Hogan Parking, L.L.C.) and defendant,
Bricktown-TMK/Hogan Entertainment, L.L.C., seeking a declaration
that the Parking Redevelopment Agreement, the Ground Lease and
the Redevelopment Agreement were valid, or in the alternative, a
declaration that the agreements were void and ordering the return of
MAPS property and any amounts owed to the City. During trial,
Moshe Tal (the purported principal of plaintiffs) and the other T.A.R.
members moved to intervene and for continuance of the action. The
motion to intervene was formulated as a qui tam action under Okl.
Stat. tit. 62, §§ 372 and 373 based upon the Written Demand. The
trial court denied the motion. The Oklahoma Supreme Court. in City
of Oklahoma City v. Oklahoma City Urban Renewal Authority, 988
P.2d 901 (Okla. 1999) affirmed the trial court’s ruling and concluded
that Moshe Tal and T.A.R. lacked standing to intervene in the
declaratory judgment action. The court found that the City had
adequately represented the interests of all taxpayers, including
T.A.R., and was entitled to the presumption that it was doing so in
good faith.
? On March 15, 2000, Moshe Tal and other T. A.R. members filed a
qui tam action against the City, defendants herein and others, based
on the January 12, 1999 Written Demand. Defendants moved to
dismiss on the basis that Tal I held that Moshe Tal and T.A.R. lacked
standing to prosecute a qui tam action. The trial court granted the
motion. In State cx rcl. Tal v. City of Oklahoma City, 19 P.3d 268
Appendix - 51
and/or City of Oklahoma City v. Tal Technologies Inc., Case
No. 94,045 (Okla. Civ. App. July 31, 2001) (“Condemnation
Action”).°
(Okla. 2000) (per curium), the Oklahoma Supreme Court held that Tal
and TAR.’s claims in the gui tam action were clearly and
unequivocally disposed of in Tal I.
> On March 25, 1997, the City of Oklahoma City brought a
condemnation action against Tal Technologies, Inc. (plaintiffherein),
seeking to condemn Parcels 8016 & 8019 (the 1.4 acres at issue in
this action). The trial court entered orders on August 29, 1997 and
October 2, 1997, granting the City’s right to condemn. On September
25, 1999, Tal Technologies, Inc. filed a motion to reconsider and
modify the orders, claiming, in part, that it had discovered that the
parcels were never part of the MAPS plan, and thus, the City’s claim
of need of the property for MAPS was false and deceived the court
and that the parcels had been transferred to OCURA for the purpose
of selling the parcels to a private developer who would use the
property not for parking, public park or any public recreation, but for-
profit restaurants and retail shops. The trial court denicd the motion.
Tal Technologies, Inc. filed a second motion to reconsider, which was
also denied. On appeal, the Oklahoma Court of Civil Appeals, in Case
No. 94,045, treated Ta! Technologics, Inc.’s first motien to reconsider
as the requisite pleading to invoke the statutory power of the court to
vacate a judgment under Okla, Stat. tit. 12, § 1031. See, Civil Court
of Appeals’ Opinion, Exhibit D of Hogan Defendants’ Appendix to
Motion to Dismiss Second Amended Complaint, pp. 5-6. The court
found that the pleading sufficiently alleged fraud, practiced by the
successful party, in obtaining a judgment or order under § 1031(4). Jd.
at p. 6. The court, however, found that Tal Technologies, Inc. had
failed to show how it was prevented by the City from discovering the
alleged fraud prior to judgment. id. at p. 7. In addition, the court
found a lack of diligence on the part of Tal Technologies, Inc. in
trying to discover and exposc the fraud. The court also found that the
corporation had waived its challenge. /d. at p. 8. Furthermore, the
court found that the City “had a valid public purpose for acquiring the
lots and had discretion to devote the lots to any of several purposes
within the MAPS project, including redevelopment.” /d., p. 9.
Appendix - 52
As to plaintiff, Bricktown 2000, Inc., the court finds that
its claims against defendants are not barred by the Rooker-
Feldman doctrine. Bricktown 2000 was not a party to the state
court litigation in Tal I or Tal III, and, therefore, was unable to
appeal either judgment in state court.* The Rooker-Feldman
doctrine presupposes that the proper recourse for an
unsuccessful party in state court litigation is to appeal the
adverse judgment through the state court system. Having had no
occasion (or standing) to appeal the subject state court decisions,
the court finds that plaintiff, Bricktown 2000, Inc., cannot be
bound by the Rooker-Feldman doctrine. Despite
defendants’ arguments to the contrary, the court finds that the
circumstances in this casc are clearly distinguishable from the
circumstances in Kenmen Engineering. There, three of the
plaintiffs, although not named as defendants in the state court
action but one of which was an officer and two of which were
agents of the named defendant, were clearly found to he within
the ambit of the state court’s injunction which was directed to
the named defendant and “its officers, agents, servants,
employees, attorneys or representatives.” Furthermore, the
damages sought by these plaintiffs in the federal action were a
* In Tal I, the Oklahoma Supreme Court stated: “[b]ecause we
conclude that Moshe Tal’s petition for intervention was correctly
denied, he stands excluded as a party litigant below and has no
standing to tender for our review any errors made by the trial court.”
988 P.2d at 906. In State ex rel. Tal v. City of Oklahoma City, 61 P.2d
234, 241 (Okla. 2002), the Oklahoma Supreme Court further stated
“Tal I also, in effect ruled that because taxpayers were properly
denicd intervention they were excluded as party litigants and had no
standing to tender for our review in that appeal an errors that may
have been made in the judgment upholding the Agreements as lawful.
.. Thus. although Ta/ / discussed the Agreements, it did not affirm the
trial court judgment declaring their lawfulness.”
If the taxpayers, including Moshe Tal, in Tal I did not have
standing to appeal the trial court’s rulings, plaintiff, Bricktown 2000,
Inc., clearly did not have standing to appeal the rulings.
Appendix - 53
result of having to comply with the state court’s injunction, and
absent that state court injunction, plaintiffs would not have had
standing to bring their federal suit. Kenmen Engineering, 314
F.3d at 481. Such is not the case for plaintiff, Bricktown 2000,
Inc. Its alleged injuries did not result from the judgments in Tal
I and Tal III and its standing is not based upon the judgments.
As to plaintiff Tal Technologies, Inc., the court finds
that its claims against defendants, to the extent they seek
recovery of damages predicated on the loss of the 1.4 acres, are
barred by the Rooker-Feldman doctrine. As already noted in
footnote number 3, the City of Oklahoma brought a
condemnation proceeding to acquire two parcels of land (the 1.4
acres which are the subject of this action) owned by Tal
Technologies, Inc. After the trial court entered orders
adjudicating the City’s right to condemn, Tal Technologies, Inc.
filed two motions to reconsider. The motions were denied.
Treating the first motion as the requisite pleading to invoke the
statutory power of the court to vacate a judgment under Okla.
Stat. tit. 12, § 1031, and finding a sufficient allegation of fraud
under § 1031(4), the Oklahoma Court of Civil Appeals affirmed
the trial court’s denial of the motions to reconsider. In so doing,
the appellate court concluded that Tal Technologies, Inc. had not
shown how it was prevented by the City from discovering the
alleged fraud prior to judgment. See, Civil Court of
Appeals’ Opinion, Exhibit D of Hogan Defendants’ Appendix to
Motion to Dismiss Second Amended Complaint, p. 7. The court
additionally found a lack of diligence by Ta Technologies, Inc.
in discovering and exposing the fraud and that it had waived it
challenge by failing to plead it. /d. at p. 8. However, the
appellate court further found that the City had ‘a valid public
purpose for acquiring the property and had th discretion to
devote the lots to any of several purposes within the MAPS
project including redevelopment.” /d. at p. 9.
As previously discussed, the appropriate inquiry is
whether the injury alleged b the federal plainuff resulted from
Appendix - 54
the state court judgment itself or is distinct from the judgment.
Kenmen Engineering v. City of Union, 314 F.3d at 476. Many
of the injuries of which plaintiff Tal Technologies, Inc.
complains in this actiorrare the losses to plaintiff resulting from
the property being condemned by the City. In all of plaintiff
claims, plaintiff is at least seeking the value of the property
(alleged to be about $7 million). And for the RICO claims, the
RICO Case Statement shows additional losses which may
include losses resulting from the property being condemned.
See, RICO Case Statement, subsection (ii) to question no. 4, p.
7. All of the losses relating to the 1.4 acres stem directly from
the state court judgment condemning the property. Plaintiff's
effort to portray these injuries as RICO’, Sherman Act’ and state
law violations is insufficient to overcome the Rooker-Feldman
doctrine. If this court were to grant the relief plaintiff seeks, this
result would effectively reverse the state court judgment
condemning the property (adjudicating the issues of public
necessity an alleged fraud) and awarding an amount of just
compensation to the plaintiff for the property. The claims of
plaintiff, Tal Technologies, Inc., are inextricably intertwined
with the state court judgment in the Condemnation Action.
Therefore, plaintiff claims, to the extent they seek recovery of
damages predicated on the loss of the 1.4 acres, are barred under
the Rooker-Feldman doctrine.
As to plaintiff, Tal Technologies, Inc.’s claims, to the
extent they seek to recover damages for losses based on
something other than 1.4 acres, the court concludes that the
Rooker-Feldman doctrine does not apply. Tal Technologies, Inc.
was ‘not a part to the Tal I and Tal III actions and these claims
have not been shown to be inextricably intertwined with the
Condemnation Action. Racketeer Influenced and Corrupt
* Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §
1961, ef seq.
“ISUS.C. § 2.
Appendix - 55
Organizations Act, 18 U.S.C. § 1961, et seg.
RICO claims
18 U.S.C. § 1962(b)
In the Second Amended Complaint, plaintiffs allege that
defendants violated I U.S.C. § 1962(b). Section 1962(b) makes
it unlawful for “any person through a patter of racketeering
activity or through collection of an unlawful debt to acquire or
maintain directly or indirectly, any interest in or control of any
enterprise which is engaged ir or the activities of which affect,
interstate or foreign commerce.” 18 U.S.C. § 1 962(b). The
purpose of the statute is “to prohibit efforts to muscle in on
legitimate business through the commission of a pattern of
racketeering activity.” Smith & Reed, Civil RICO, ] 6.04[5][b].
In order to state a claim under section 1962(b), a plaintiff must
allege injury arising from the acquisition or maintenance of any
interest in or control of any enterprise. See, Discon, Inc. v.
NYNEX Corn., 93 F.3d 1055, 1063 (2”° Cir. 1996) (dismissing
section 1962(b) claim where plaintiff did not allege injury from
defendants acquisition or maintenance of a telephone company
enterprise), rev ‘d on other grounds, 525 U.S. 128 (1998); see
also, Advocacy Organization for Patients an Providers v. Auto
Club Ins. Ass'n, 176 F.3d 315, 330-33 1(6th Cir.), cert. denied,
528 U.S. 871 (1999); Lightning Lube, Inc. v. Witco Corp., 4
F.3d 1153, 1190 (3 Cir. 1993). The “acquisition or
maintenance” injury must be distinct from that resulting from
the commission of the predicate acts. See, Id.
The court finds that plaintiffs have failed to allege an
acquisition or maintenance injury distinct from injury caused by
the alleged commission of the predicate acts. As alleged,
plaintiffs’ injuries resulted from the alleged predicate acts of
mail and wire fraud and bribery. See e.g, RICO Case Statement,
answer to question no. 16, p. 12. The injuries alleged are not
separate and distinct injuries caused by the alleged acquisition
or maintenance of the alleged enterprises, the Oklahoma City
Appendix - 56
Urban Renewal Authority (“OCURA”) and the City Council.
“Without a distinct ‘acquisition injury,’ [a plaintiff] cannot state
a cause of action under subsection 1962(b).” Discon, 93 F.3d at
1063. Because plaintiffs have failed to allege a distinct
acquisition or maintenance injury, the court finds that they have
failed to state a claim against defendants under 18 U.S.C. §
1962(b).
in addition, the court finds that plaintiffs have failed to
sufficiently set forth facts to show that each of the defendants
acquired or maintained an interest in or control of the alleged
enterprises, OCURA and the City Council. Paragraph 183 of the
First Cause of Action alleges that “defendants Hogan, Hogan
Property, Bricktown, TMK/Hogan Entertainment, Elgin, Elgin
Development Company, persons within the meaning of RICO,
acquired or maintained, directly or indirectly, interest in or
control over the two 18 U.S.C. [§] 1964 enterprises herein.” In
addition to not including all of the defendants in their allegation,
plaintiffs simply parrot the language of the RICO statute in
alleging interest in or control of the two enterprises. Interest or
control is not shown simply by parroting the language of the
RICO statute. Advocacy Organization, 176 F.3d at 329. At
paragraph 184 of the First Cause of Action, plaintiffs set forth
allegations of alleged control through bribery and mail fraud.
These allegations, however, are not sufficient to show
defendants acquiring or maintaining control over OCURA or the
City Council. in their response, plaintiffs contend that
defendants’ arranging financial support of OCURA via
operating as the landiord at a below-market rate clearly qualifies
under 18 U.S.C. § 1962(b). However, the cases cited by
plaintiffs for support of its “arranging financing” theory are
clearly distinguishable from this case.’ The court concludes that
’ First Interregional Advisors Corp. v. Wolff, 956 F. Supp. 480, 487
(S.D.N.Y. 1997); Constellation Bank, N.A. v. C.L.A. Management
Co., 1995 WL 42285, at *4 (E.D.N.Y. 1995); and First National City
Bank & Trust Co. v. Federal Deposit Ins. Co., 730 F.Supp. 501
(E.D.N.Y. 1990).
Appendix - 57
those cases do not support the finding of acquisition or
maintenance of control of OCURA. Moreover, the court finds
that the bribery allegations are insufficient to show control over
OCURA or the City Council. Plaintiffs, in answer to question
no. 5 of the RICO Case Statement, state that “Defendants’ broad
pattern of mail and wire fraud, combined with Defendants’
bribery served to .. . seal [ ] Defendants’ control over both
Urban Renewal and the City Council, by assuring that key
members of both entities support Defendants’ fraudulent
Scheme.” See, RICO Case Statement, answer to question no. 5,
p 9. The allegation that mail and wire fraud® and bribery sealed
support by “key” members of both entities is insufficient, in the
court’s view, to show acquisition or maintenance of control over
OCURA and the City Council. The racketeering activity must
lead to the acquisition or maintenance of an interest in or control
of the enterprise. Advocacy Organization, 176 F.3d at 328-329;
Lightening Lube ,4 F.3d at 1190-1191; In re VMS Sec. Litig.,
752 F. Supp. 1373, 1403-1404 (N.D. Ill. 1990). Plaintiffs’
allegations in the Second Amended Complaint’ do not show the
alleged racketeering activities resulted in defendants’ acquisition
or maintenance of interest in or control of OCURA and/or the
City Council. Therefore, plaintiffs have failed to state a claim
under 18 U.S.C. 1962(b)."°
* Although wire fraud is referred to in the RICO Case Statement,
plaintiffs do not allege in the First Cause of Action that defendants
exercised control over OCURA and the City Council via wire fraud.
* The RICO Case Statement does not set forth any additional factual
allegations to show interest in or control of the two enterprises. It
refers the court to the First Cause of Action of the Second Amended
Complaint for a description in detail of the acquisition or maintenance
of an interest in or control of the enterprises. See, answer to question
no. 12, p. Il.
'° In light of the court’s analysis in regard to this claim, the
court need not address argument proffered by defendants tn
Appendix - 58
18 U.S.C. § 1962(c)
Plaintiffs, in the Second Amended Complaint, allege that
defendant, Tiana Douglas, violated 18 U.S.C. § 1962©. Section
1962© makes it unlawful for “any person employed by or
associated with any eriterprise engaged in, or the activities of
which affect, interstate or foreign commerce, to conduct or
participate, directly or indirectly, in the conduct of such
enterprise’s affairs through a pattern of racketeering activity or
collection of unlawful debt.” In order to state a violation under
§ 19620, plaintiffs must allege (1) conduct (2) of an enterprise
(3) through a pattern of racketeering. Brannon v. Boatmen’s
First Nat. Bank of Oklahoma, 153 F.3d 11441150 (10" Cir.
1998); Boone v. Carlsbad Bancorporation, Inc., 972 F.2d 1545,
1555 n.7 (10" Cir. 1992).
RICO defines “racketeering activity” as any act that
constitutes specified state and federal crimes, including mail
fraud, wire fraud and bribery. 18 U.S.C. § 1961(1) These acts are
referred to as “predicate acts” because they form the basis of
liability under RICO. Banc Oklahoma Mortgage Corp. v. Capital
Title Company, Inc., 194 F.3d 1089, 1102 (10th Cir. 1999),
However, a defendant does not have to be formally convicted of
any predicate act before liability under § 1962© may attach. /d.
Plaintiffs allege that defendant, Tiana Douglas,
committed predicate acts of mail fraud, 18U.S.C.
1341,wirefraud, 18U.S.C. § 1343 and of bribery, 18 U.S.C. § 201.
To state a claim of mail fraud under § 1341, plaintiffs must
allege (1) the existence o a scheme or artifice to defraud or
obtain money or property by false pretenses representations or
promises, and (2) use of the United States mails for the purpose
0 executing the scheme. Banc Oklahoma Mortgage Corp., 194
F.3d at 1102. “*The elements of wire fraud are very similar, but
support of dismissal of the § 1962(b) claim.
Appendix - 59
require that the defendant ‘use interstate wire, radio, television
communications in furtherance of the scheme to defraud.’” Jd.
(quoting Bacchus Industr., Inc. v. Arvin Industr., Inc., 939 F.2d
887,892 (10th Cir. 1991)).
Fed.R.Civ.P. 9(b)’s particularity requirement applies to
claims of mail and wire fraud. Cayman Exploration Corp., 873
F.2d at 1362.'' Allegations of predicate mail and wire fraud acts
should state the contents of the communications, who was
involved where and when they took place and explain why they
were fraudulent. Mills v. Polar Molecular Corp., 12 F.3d 1170,
1175 (2nd Cir. 1993). Allegations should also show how the
communications furthered the fraudulent scheme. McLauglin v.
Anderson, 962 F.2d 187, 191 (2 Cir. 1992),
In the instant ease, plaintiffs set forth the predicate acts
in Section X of the Second Amended Complaint. The
allegations of mail fraud set forth in Section X(a) as to
defendant, Tiana Douglas, fail to satisfy the particularity
requirement of Rule 9(b). Although plaintiffs, in Section X(a),
identify the contents of the mail communications, the speaker,
where and when they took place, there are no allegations of how
such communications were fraudulent nor are there allegations
of how the communication furthered the alleged scheme to
defraud. The communications, as pled, appear to th innocuous
business communications of defendant, Tiana Douglas. In a
footnote at p. 18 of their response brief, plaintiffs attempt to
demonstrate how the mailings wen fraudulent. The paragraphs
of the Second Amended Complaint referenced by plaintiff do
not provide sufficient facts to demonstrate how the mailings
were fraudulent or how they furthered the alleged fraudulent
scheme to defraud. These mailings therefore cannot qualify as
predicate acts. Although not mentioned in the footnote, the May
'' Fed.R.Civ.P. 9(b) provides in pertinent part that ‘[i]n all averments
of fraud or mistake, the circumstances constituting fraud or mistake
shall be stated with particularity.”
Appendix - 60 ~
18 1998 letter by Mr. Tolbert, which “Defendants” allegedly
caused to be mailed, does appear to satisfy Rule 9(b). See,
Second Amended Complaint, 4} 134 (letter intended by
“Defendant TMK-Hogan to support its fraudulent July 17, 1997
representation that the Bricktown Association was as of the date
of said proposal Defendant’s partner’).'* _
As to the alleged wire fraud communications in Section
X(b), the August 1, 1997 submission (see, further description at
4 117 of Second Amended Complaint) the August 5, 1997
communication at city council meeting (see, further description
at § 119) and the telephone conversations concerning Mr.
Tolbert’s letter (see, further description of letter and intent at 4
134) appear to satisfy Rule 9(b). However plaintiffs have not
shown through Section X(b), their response brief, or other
allegations of the Second Amended Complaint, how the other
alleged wire fraud communications satisfy Rule 9(b).'’
Consequently, these other alleged wire fraud communications
cannot pass muster as predicate acts.
? Plaintiffs, in Section X(a), have alleged mailings occurring after
July 21, 1998 as violation of 8 U.S.C. § 1341. When a fraudulent
scheme has reached fruition, mailings thereafter cannot be said to be
for the purpose of executing the scheme and thus do not satisfy’ the
second require clement of mail fraud. See, United States v. Cardall,
885 F.2d 656, 680-682 (10" Cir. 1989). The allegations of the Second
Amended complaint show that defendant, TMK-Hogan, was selected
as the developer of the entire 51 acres on July21, 1998. The court
therefore concludes that none of the mailings sent after July 21, 1998
occurred in furtherance of the alleged scheme to defraud plaintiffs of
their business-development rights.
'* The court notes that plaintiffs have alleged predicate mail and wire
fraud acts as to other defendants, however, the requirements of §
1962(c) must be established as to each individual defendant. De Falco
v. Bemas, 244 F.3d 286, 315 n. 19 (2” Cir. 2001).
Appendix - 61
Plaintiffs also allege defendant, Tiana Douglas,
committed bribery under 18 U.S.C. § 201. Defendant has
challenged the viability of a bribery claim under 18 U.S.C-§ 201
and plaintiffs have conceded that they cannot state a bribery
claim under that section. However, plaintiffs argue that
“racketeering activity under 18 U.S.C. 1961 includes ‘any act
involving. .. bribery. .. which is chargeable under State law and
punishable by imprisonment for more than one year.” See,
Plaintiffs’ response, p. 20. They contend that an act in violation
of Okla. Stat. ut. 21, § 381 (“Bribing officers”) qualifies as a
racketeering activity. /d.
Neither the Second Amended Complaint nor the RICO
Case Statement allege a violation of Okla. Stat. tit. 21, § 381 by
defendant, Tiana Douglas. In addition plaintiffs have not
requested leave to amend their Second Amended Complaint to
allege a violation of § 381. Even if the court were to allow such
amendment or construe th Second Amended Complaint as
alleging a violation of § 381, it 1s not at all clear to the court that
the alleged bribery of Mayor Humphreys or Commissioner
Nichols, as pled would constitute a violation of § 381. However,
for purposes of the court’s ruling, the court assumes that the
alleged bribery acts of defendant, Tiana Douglas, would
constitute a violation of § 381.
Although plaintiffs have alleged racketeering activity
consisting of mail fraud wire fraud and bribery, the court finds
that plaintffs have failed to allege sufficient facts to show a
“pattern of racketeering activity.” RICO defines “pattern of
racketecring—activity” as requiring “at least two acts of
racketeering activity” within a ten-year penod. 18 U.S.C. §
1961(5). In order to satisfy RICO’ s pattern requirement,
plaintiffs must show two elements — “a relationship between the
predicates” and “the threat of continuing activity.” Duran v.
Carns, 238 F.3d 1268, 1271 (10° Cir. 2001). Only the
continuity prong of the pattern element !s at issue in this case.
“Continuity’ 1s both a closed and open-ended concept: closed-
Appendix - 62
ended referring to aclosed period of repeated conduct and open-
ended referring to conduct that by its nature projects into the
future with a threat of repetition.” Resolution Trust Corp. v
Stone, 998 F.2d 1534, 1543 (10" Cir. 1993). A plaintiff “may
demonstrate continuity over a closed period by proving a series
of related predicates extending over a substantial period of time.
Predicate acts extending over a few weeks or months are
insufficient to show closed-ended continuity.” /d. In contrast,
“{o]pen-ended continuity depends upon the facts of each case,
and may be established by showing that the predicates
themselves involve a distinct threat of long-term racketeering
activity, either implicit or explicit, or that the predicates are a
regular way of conducting the defendant’s ongoing legitimate
business or the RICO enterprise.” /d. Two factors are
particularly relevant to the determination of continuity: the
duration of the related predicate acts and the extensiveness of
the RICO enterprise’s scheme. /d. Under the extensiveness
prong, the court 1s to consider the number of victims, the
number of racketeering acts, the variety of racketeering acts,
whether the injuries caused were distinct, the complexity and
size of the scheme, and the nature or character of the enterprise
or unlawful activity. Jd.
The Second Amended Complaint fails to specifically
identify the predicate acts through which defendant, Tiana
Douglas, allegedly conducted or participated in the conduct of
OCURA and the predicate acts through which defendant
allegedly conducted or participated in the conduct of the City
Council. Nonetheless, assuming that the mail and wire fraud
communications, which satisfy Rule 9(b), and the bribery acts
apply to conducting or participating in the conduct of both
enterprises, the court finds that plaintiffs’ allegations fail to
show that defendant participated in the conduct of the
enterprises through a “pattern of racketeering activity.” As
stated, a plaintiff who alleges a RICO violation may demonstrate
continuity over a closed period by proving a series of related
predicates extending over a substantial period of time.
Appendix - 63
Resolution Trust Corp., 998 F.2d at 1543. Plaintiffs have failed
to sufficiently allege a closed period of continuity. Plaintiffs
have failed to allege a series of related predicates involving both
enterprises over a substantial period of time.'* They have further
failed to allege facts to show a threat of continuing activity. Jd.’’
Even assuming that the court’s Rule 9(b) analysis of the
alleged predicate acts of mail and wire fraud under is unduly
myopic, the court also finds that plaintiffs’ allegations, taken as
true, would not show a closed-ended continuity. While the
duration of defendants’ alleged predicate acts in furtherance of
the alleged scheme to defraud (from March, 1997 to July, 1998)
'4 In the Section X(c)(iii) and (c)(x), plaintiffs allege that “[f]rom
July 1998 through the time of filing this Complaint, Defendant
Douglas caused the appointment of Councilman [Guy] Licbmann to
political positions with various City trusts, and additionally appointed
Liebmann director of Second Century, in exchange for Liebmann’s
vote as stated in § 157 of this Second Amended Complaint” and
“{f]rom about February 1997, though about carly part of 2001,
Defendant, Douglas, Hogan and Elgin further bribed Urban Renewal
Commissioner [Larry] Nichols by using their political influence and
political position and persuading and causing City officials to make
substantial public improvements surrounding the Mid America Tower
building in exchange for Nichols’ support of all Defendant’]s.”
Although these allegations allege bribery over a substantial time,
rather than a few weeks or months, see, H.J.. Inc. v. Northwestern
Bell Telephone Co., 492 U.S, 229, 252 (1989), the acts are for
payment of Liebmann’s vote in July, 1998 in favor of, and Nichols’
support of, the selection of TMK/Hogan as developer. Therefore, the
court concludes that these acts do not show a series of rclated
predicates over a substantial time. Furthermore, these acts do not
suggest a threat of continuing criminal activity.
'- In Section W of the Second Amended Complaint, plaintiffs set
forth allegations about “Defendants” East Wharf Fraud” to show
continuity. However, none of those allegations show that
defendant, Tiana Douglas, was involved in the alleged fraud.
Appendix - 64
and the number and variety of those racketeering acts may
satisfy a finding of continuity, see, Resolution Trust Corp., 998
F.2d at 1544, the number of victims, the injuries suffered, the
complexity and size 0 the scheme and the nature of the scheme,
do not favor a finding of continuity. The nature of the scheme
(defrauding plaintiffs of their business development rights), in
particular, had a limited purpose and courts have found no
continuity in such cases. Jd. at p. 1545. Once TMK-Hogan was
selected as developer, the alleged scheme to defraud was
completed. The alleged scheme was a single scheme with a
discrete goal. The allegations of the Second Amended
Complaint do not show a threat of continuing illegal activity. At
best, plaintiffs are “alleging a closed-end series of predicate act
constituting a single scheme . . . to accomplish a discrete goal
[approval of TMK-Hogan as developer] directed at a finite
group ‘with no potential to extend to other persons or entities.”
Duran, 238 F.3d at 1271 (quoting Boone, 972 F.2d at
1556)(quoting SIL-FLO, Inc. v. SFHC, Inc., 917 F.2d 1507,
1516 (10" Cir. 1990)). Thus, the allegations in the Second
Amended Complaint do not meet the closed-ended continuity
element.’® Plaintiffs therefore have not alleged the type of
activity in regard to defendant, Tiana Douglas, that RICO was
enacted address. Accordingly, plaintiffs RICO claim against
defendant, Tiana Douglas, for violation of § 1962© must b
dismissed under Fed.R.Civ.P. 1 2(b)(6).
18 U.S.C. § 1962(d)
In the Second Amended Complaint, plaintiffs allege that
the defendants violated 18 U.S.C. § 1962(d), which makes it
unlawful for “any person to conspire to violate” 18 U.S.C. §
1962(b) or § 1962(c).
As the court has found no viable claim against
'© The court also finds that plaintiffs have failed to allege sufficient
facts to establish open-ended continuity.
Appendix - 65
defendants under § 1962(b), the § 1962(d) claim for conspiracy
against defendants to violate § 1962(b) must fail as a matter of
law. Lightning Lube, Inc.,4 F.3d at 1191.
In addition, the court finds that plaintiffs’ conspiracy
claims under § 1962(d) for violation of § 1962(c) (and violation
of § 1962(b) assuming a viable claim under § 1962(b) exists)
fail Under Fed.R.Civ.P. 12(b)(6). To state a claim under §
1962(d), plaintiffs must allege facts to support a conclusion that
each of the defendants consciously agreed to commit predicate
acts. Hecht v. Commerce Clearing House, Inc., 897 F.2d 21, 25
(2! Cir. 1990). Conclusory allegations of a conspiracy are
insufficient. /d. (Because the core of a KICO civil conspiracy is
an agreement to commit predicate acts, a RICO civil conspiracy
complaint, at the very least, must specifically allege such an
agreement.) There are no allegations in the Second Amended
Complaint (or the RICO Case Statement) to support a
conclusion (or inference) that each of the defendants consciously
agreed to commit predicate acts. There are no allegations
sufficient to infer that defendants agreed to violate the
substantive RICO offense of § 1962©. The court therefore
concludes that dismissal of the conspiracy claims under §
1962(d) is appropriate.
Section 2 of the Sherman Act
Plaintiffs, in the Second Amended Complaint, allege that
defendants have violated section 2 of the Sherman Act, 15
U.S.C. § 2. Section 2 makes a combination or conspiracy to
monopolize unlawful.’ “To establish a claim for conspiracy to
'’ The relevant portion of section 2 provides”
Every person who shall... combine or conspire with
any other person or persons, to monopolize any part
of the trade or commerce among the sever States . .
shall be deemed guilty of a felony. -
Appendix - 66
monopolize in violation of section 2, a plaintiff must plead facts
sufficient to support four elements: (1) ‘the existence of a
combination or conspiracy to monopolize’; (2) ‘overt acts done
in furtherance of the combination or conspiracy’; (3) ‘an effect
upon an appreciable amount of interstate commerce’; and (4) ‘a
specific intent to monopolize.” TV Communications Network,
Inc. v. Turner Network Television, Inc., 964 F.2d 1022, 1026(1
Ut)) Cir. 1992) (quoting Olsen v. Progressive Music Supply,
Ing., 703 F.2d 432, 438 (10" Cir.), cert. denied, 464 U.S. 866
(1983)).
In the Second Amended Complaint, plaintiffs allege that
“Defendants conspired with each other, and wilfully, knowingly
and intentionally engaged in unlawful acts and practices
described above, to fabricate and create the illusion of a “legal”
public hid, when in fact, the outcome of the 6/26/97 published
RFP was predetermined by agreements between all Defendants.”
Plaintiffs allege that defendants engaged in unfair, improper and
illegal conduct and set forth such conduct in thirteen paragraphs.
Plaintiffs then allege that “Defendants’ activities and
participation in the bid-rigging and other related conduct...
constitutes unlawful, improper, anti-competitive, deceptive and
unfair conduct in violation of the Sherman Act, 15 U.S.C. § 2...”
Plaintiffs further allege that defendants’ ‘anti-competitive
activities affected channels of interstate commerce ...”
Upon review, the court finds that plaintiffs’ allegations
are insufficient to state a claim of conspiracy to monopolize.
Plaintiffs have failed to plead any facts to show or infer a
conspiracy to achieve or further monopoly power. Plaintiffs use
antitrust language, in their amended complaint, such as “bid-
rigging” and “anti-competitive,” but have failed to elaborate on
these allegations. The use of antitrust “buzz words” does not
supply the factual circumstances necessary to support plaintiffs’
1S U.S.C. § 2.
Appendix - 67
conclusory allegations of a conspiracy to “monopolize.” TV
Communications Network, Inc., 964 F.2d at 1026. Furthermore,
plaintiffs have failed to plead any facts to show or infer a
specific intent by defendants to monopolize. There are no facts
to show or infer that defendants specifically intended to conspire
to achieve or further defendant, TMK/Hogan’s monopoly power.
“A complaint is subject to dismissal where it does ‘little
more than recite relevant antitrust laws.” TV Communications
Network, Inc., 964 F.2d at 1027 (quoting Mountain View
Pharmacy v. Abbott Labs., 630 F.2d 1383, 1387 (10" Cir.
1980)). The court finds that plaintiffs have failed to state a claim
against defendants for conspiracy to monopolize.
Even if plaintiffs stated an antitrust claim against
defendants, the court finds that defendants are entitled to
immunity from such claim. Defendant, Tiana Douglas,
specifically pleads immunity based upon the Parker state action
immunity doctrine while the remainder of the defendants plead
antitrust immunity under the Noerr-Pennington doctrine.
Generally, a state’s anticompetitive actions are immune
from civil antitrust laws. Parker v. Brown, 317 U.S. 341, 350-52
(1943). Relying on principles of federalism, the Supreme Court
in Parker held that federal antitrust law did not apply because the
State “as sovereign, imposed the restraint as an act of
government which the Sherman Act did not undertake to
prohibit.” /d. at 352. The Supreme Court recognized “nothing in
the language of the Sherman Act or in its history ... suggests that
its purpose was to restrain a state or its officers or agents from
activities directed by its legislature.” /d. at 350-351.
Parker clearly sets out the rule of state action immunity
for the state as sovereign. However, in the instant case, the
challenged activities are not directly attributed to the state
legislature. In California Retail Liquor Dealers Ass'n v. Midcal
Aluminum, Inc., 445 U.S. 97 (1980), the Supreme Court set
Appendix - 68
forth a two-part test to determine whether the state action
immunity is available to entities other than state legislatures.
“First, the challenged restraint must be ‘one clearly articulated
and affirmatively expressed as state policy’; second, the policy
must be ‘actively supervised’ by the State itself’ /d. at 105
(quoting City of Lafayette, La. v. Louisiana Power & Light Co.,
435 U.S. 389, 410 (1978)). In Town of Hallie v. City of Eau
Claire, 471 U.S. 34,46(1985), the Supreme Court held that the
active supervision requirement of Midcal does not apply to
municipalities. The Court explained:
Where a private party is engaging in the anti-
competitive activity, there is a real danger that
he is acting to further his own interests, rather
than the governmental interests of the State.
Where the actor is a municipality, there is little
or no danger that it is involved in a private
price-fixing arrangement. The only real danger
is that it will seek to further purely parochial
public interests at the expense of more
overriding state goals. This danger is minimal,
however, because of the requirement that the
municipality act pursuant to a clearly
articulated state policy. Once it is clear that
state authorization exists, there is no need to
require the State to supervise actively the
municipality’s execution of what it is a
properly delegated function.
Id. at 47.
The Tenth Circuit has adopted a two-part test for
evaluating municipal state action immunity. “First, the state
legislature must have authorized the action under challenge.
Second, the legislature must have intended to displace
competition with regulation.,” Allright Colorado Inc. v. The City
and County of Denver, 937 F.2d 1502, 1506 (10th Cir. 1991)
Appendix - 69
(quoting Jacobs, Visconsi & Jacobs Co v. City of Lawrence,
Kan., 927 F.2d 1111, 1120 (10" Cir. 1991)); see also, Buckley
Constr., Inc .v. Shawnee Civic & Cultural Dev. Auth., 933 F.2d
853, 855 (10” Cir. 1991); Oberndorf v. City & County of
Denver, 900 F.2d 1434, 1438 (10" Cir.), cert. denied, 498 U.S.
845 (1990)).
The Noerr-Pennington corollary to the Parker doctrine
instructs that “federal antitrust laws also do not regulate the
conduct of private individuals in seeking anticompetitive action
from the government.” City of Columbia v. Omni Outdoor
Advertising. Inc., 499 U.S. 365, 379-380 (1991). That doctrine,
distilled from two Supreme Court cases, and based upon
' prudential and constitutional concerns, instructs that the
Sherman Act does not reach political activities, no matter how
nefarious those activities may be. While the Parker doctrine
applies to state action, the Noerr-Pennington doctrine applies to
private parties seeking government action. In Eastern R.R.
Presidents Conference v. Noerr Motor Freight, Inc.. 365 U.S.
127 (1961), the Supreme Court held that “the Sherman Act does
not prohibit two or more persons from associating together in an
attempt to persuade the legislature or executive to take particular
action with respect to a law that would produce a restraint or
monopoly.” /d. at 136. In United Mine Workers of America v.
Pennington, 381 U.S. 657 (1965), a case involving attempts to
influence the Secretary of Labor to set a higher minimum wage,
the Supreme Court extended Noerr, stating that “Noerr shields
from the Sherman Act a concerted effort to influence public
officials regardless of intent or purposes.” /d. at 670.
In Omni, supra, the Supreme Court emphasizing the
broad nature of the Parker doctrine, held that no “conspiracy
exception” could overcome state action immunity. The Court
reasoned that:
The rationale of Parker was that, in light of our
national commitment to federalism, the general
Appendix - 70
language of the Sherman Act should not be
interpreted to prohibit anticompetitive actions
by the States in their governmental capacities
as sovereign regulators.
Id. at 374. The Court emphasized the strength of those
principles when considering whether a limited conspiracy
exception, only applicable to illegal conduct, such a bribery, is
warranted. The Supreme Court states:
Another approach 1s possible, which has the
virtue of practicality but the vice of being
unrelated to the purposes [ofthe Sherman Act].
That is the approach which would consider
Parker inapplicable only if, in connection with
the government action in question, bribery or
some other violation of state or federal law has
been established. Such unlawful activity has no
necessary relationship to whether the
governmental action is in the public interest. .
[We] reaffirm our rejection of any
interpretation of the Sherman Act that would
allow plaintiffs to look behind the actions of
state sovereigns to base their claims on
perceived conspiracies to restrain trade.
Id. at 378-379 (internal citations and quotations omitted).
As with Parker, Noerr-Pennington’s reach also was
extended by Onmi in that the Supreme Court held that no
conspiracy exception existed for Noerr-Pennington either, even
one limited to situations involving “some element of
unlawfulness.” Omni, 499 U.S. at 383.
As to the immunity of defendant Tiana Douglas, the
court finds that Oklahoma’ detailed urban renewal legislation
(Okla. Stat. tit. § 38-101 through § 38-123 authorized OCURA
Appendix - 71
to conduct the activities challenged by plaintiffs in the Second
Amended Complaint. In addition, the court finds that the Urban
Renewal statute clearly contemplate anticompetitive activity.
See, Okla. Stat. tit. 11, § 38-108. Such conduct is the
foreseeable result of authorizing OCURA to “make and execute
contracts and other instruments necessary or convenient to the
exercise of its powers,” “to acquire by purchase, lease, option,
gift, grant, bequest, devise, eminent domain a otherwise, any real
property,” “to dispose of any real property” and “to enter into an
contracts necessary.” /d. The court concludes that the Urban
Renewal statutes, taken together, demonstrate that the
challenged activities are “clearly articulated an affirmatively
expressed as state policy.” Midcal, 445 US. at 410.
As to the state supervision requirement of Midcal, the
court finds that sue requirement does not apply to OCURA and
defendant, Tiana Douglas, acting a executive director of
OCURA. In Town of Hallie, the Supreme Court held that such
requirement does not apply to municipalities. /d. at 46. The
court has previously discussed the rationale for that decision.
The court concludes that this reasoning should apply equally to
OCURA and’ defendant, Tiana Douglas. See, Porter Testing
Laboratory v. Board of Regents for the Oklahoma Agriculture
and Mechanical Colleges, 993 F.2d 768, (10" Cir. 1993) (board
of regents, executive secretary to the board and university did
not have to show active state supervision of challenge activity).
Given the nature of OCURA and its executive director,
defendant, Tiana Douglas, the court finds that a showing of
active supervision is not necessary to qualify for state action
immunity. Therefore, the court concludes that defendant, Tiana
Douglas, acting in her capacity as Executive Director of
OCURA, is immune from liability for the challenged actions.
In their response, plaintiffs contend that defendant, Tiana
Douglas, is not entitle to state action immunity because
“OCURA, in the instant case, was not acting pursuant to [11]
OS. § 38-101, but instead precisely according to 61 O.S. §§ 101,
Appendix - 72
et seq., the Oklahoma Public Buildings and Public Works Public
Competitive Bidding Act of 1974 (“Public Bidding Act”).” See,
Plaintiffs’ response, p. 34 (emphasis in original Plaintiffs argue
that OCURA was not acting in its own right in the Bricktown
MAPS project but instead was acting as the City’s appointed
agent. Jd. The subject agreements and resolution cited in support
of plaintiffs’ argument do not support a contention that OCURA
was not acting pursuant to the Urban Renewal statutes. The
documents show otherwise. Nonetheless, even if OCURA was
acting pursuant to the Public Bidding Act and did not choose
CCBT partnership as the purported low bidder, the court
concludes that defendant, Tiana Douglas, is still entitled to
immunity because the competitive bidding act clearly authorizes
anticompetitive action by permitting an entity to reject the bid of
any bidder if it determines that is in the best interest of the State
of Oklahoma. Okla. Stat. tit. 61, § 119; see, Buckley
Construction, Inc., 933 F.2d at 856.
Analyzing the applicability of the Noerr-Pennington
doctrine as to the remaining defendants, the court concludes that
Noerr-Pennington immunity is available. The Supreme Court
has clearly stated that efforts to influence public officials will
not subject individuals to liability, even when the sole purpose
of the activity is to drive competitors out of business. See,
Pennington, 381 U.S. at 670; see also, Oberndorf 900 F.2d at
1439. The Second Amended Complaint reveals nothing more
than defendants’ attempts to persuade political figures or bodies
to act in their favor. Therefore, the conduct falls squarely with
the Noerr-Pennington doctrine and immunity is required for
those acts.'*
'* To the extent that plaintiffs argue that defendant, Tiana Douglas,
was acting beyond her capacity as executive director, the court finds
the defendant, in the individual capacity, is entitled to Noerr-
Pennington immunity from suit for attempts to influence
governmental bodies. See Bayou Flect, Inc. v. Alexander, 26 F. Supp.
2d 894, 896 (E.D. La. 1998); Erie Builders Concrete Co. v. Erie-
Western Pennsylvania Port Authority, 705 F. Supp. 1125, 1130-1131
Appendix - 73
Plaintiffs’ allegations of bribery and mail and wire fraud
do not abrogate Parker and Noerr-Pennington antitrust
immunity. The Omni decision clearly holds that illegal actions
do not remove a case from the ambit of Parker or Noerr-
Pennington. As stated by the Omni court “[t]o use unlawful
political influence as the test of legality of state regulation-
undoubtedly vindicates (in a rather blunt way) principles of good
government. But the [antitrust acts are not] directed to that end.”
Omni, 499 U.S. at 378. Omni teaches that criminal activity in
the political realm is not governed by the antitrust laws.
Consequently, attempts to influence governmental officials, such
as officials of OCURA or the City Council, arc shielded from
antitrust immunity. See, Trigen Oklahoma City Energy Corp. v.
Oklahoma Gas & Elec. Co., 244 F.3d 1220, 1227 (10th Cir.
2001) (alleged bad acts of improper payments, undue influence
and lavish entertainment to gain business did not destroy state
action immunity). Therefore, the court finds that plaintiffs’
antitrust claim should be dismissed because all defendants are
immune from Sherman Act liability for the political
manipulation alleged by plaintiffs in the Second Amended
Complaint.
State Law Claims
With the preceding analysis, the court has effectively
disposed of all of plaintiffs’ claims arising under federal law.
Thus, the basis for federal subject matter jurisdiction has been
extinguished. Under these circumstances, the court may decline
to exercise supplemental jurisdiction over plaintiffs’ state law
claims. See, 28 U.S.C. § 1367(c)(3)'? ; see also, Lancaster v.
(W.D. Pa. 1989); Chambers Dev. Co., Inc. v. Municipality of
Monroevile, 617 F. Supp. 820, 823 (W.D. Pa 1985).
'? Section 1367(c)(3) provides that “[t]he district courts may decline
to exercise supplemental jurisdiction over a claim under subsection
(a) if... the district court has dismissed all claims over which it has
Appendix - 74
Independent School Dist. No. 5, 149 F.3d 1228, 1236 (10" Cir.
1996). Pursuant to 28 U.S.C. § 1367(c)(3), the court, in its
discretion, declines to exercise supplemental jurisdiction over
plaintiffs’ state law claims Therefore, plaintiffs’ state law claim
for tortious interference with business and conspiracy to
condemn by fraud claims are dismissed without prejudice.”
Conclusion
Based upon the foregoing, the Court ORDERS as
follows:
1. The Motion to Dismiss Plaintiffs’ Second Amended
Complaint of Defendant Dan Randolph Hogan; TMK/Hogan
Joint Venture (nka Commercial Real Estate Services Joint
Venture); Hogan Property Management, L.L.C.; Bncktown
TMK/Hogan Parking, L.L.C. (nka Bricktown-SMC/Hogan,
L.L.C.); Bricktown TMK/Hogan Entertainment, L.L.C. (nka
Bricktown Entertainment, L.L.C.); Mark D Elgin; Stonegate
Management Company, L.L.C.; Elgin Development Company,
L.L.C. and TDC Company, L.L.C., filed January 31, 2003
(docket entry no. 113), anc Defendant Tiana P. Douglas’ Motion
to Dismiss, filed January 31, 2003 (docket entry no. 115) are
GRANTED.
2. Plaintiff, Tal Technologies, Inc.’s claims predicated
upon the loss of the 1.4 acres are dismissed as barred under the
Rooker-Feldman doctrine. Plaintiff, Bncktown 2000, Inc.'s
original jurisdiction ...”
°° The court is declines to exercise supplemental jurisdiction over
plaintiff, Tal Technologics, Inc’s state law claims, to the extent they
can be predicated upon somcthing other than the loss of the 1.4 acres.
To the extent they are predicated upon the loss of the 1.4 acres, they
arc subject to dismissal under the Rooker-Feldman doctrine as
previously discussed.
- Appendix - 75
RICO and Sherman Act claims and Plaintiff, Tal Technologies,
Inc..s RICO and Sherman Act claims, predicated upon
something other than the loss of the 1.4 acres, are dismissed
pursuant to Fed.R.Civ.P. 12(b)(6). Plaintiff, Bricktown 2000.
Inc.’s state law claims and Plaintiff, Tal Technologies, Inc.’s
state law claims. predicated upon something other than the loss
of the 1.4 acres, are dismissed without prejudice.
3. Further leave to amend the RICO and Sherman Act
claims is DENIED. Plaintiffs have not requested such leave in
their response papers and plaintiffs have had previous
opportunities to amend the complaint, as well as the opportunity
to provide further details of the RICO claims in the RICO Case
Statement. In addition, amendments of plaintiffs’ Sherman Act
claim and plaintiff, Tal Technologies, Inc.’s RICO and Sherman
Act claims, predicated upon the loss of the 1.4 acres, would be
futile.
4. The court's ruling on defendants’ motions disposes
of all claims before the court. Judgment shall issue
contemporaneously with this order.
DATED September 30, 2003.
S/S.P. Fnot
STEPHEN P. FRIOT
UNITED STATES DISTRICT JUDGE
Appendix - 76
IN THE UNITED STATES DISTRICT COURT FOR
THE WESTERN DISTRICT OF OKLAHOMA
BRICKTOWN 2000, INC., and, )
TAL TECHNOLOGIES, INC., )
)
Plaintiffs, )
VS. ) No. CIV-02-324-F
DAN RANDOLPH HOGAN, |)
et al., )
)
Defendants. )
JUDGMENT
This matter came before the court upon the Motion to
Dismiss Plaintiffs’ Second Amended Complaint of Defendants
Dan Randolph Hogan; TMK/Hogan Joint Venture (nka
Commercial Real Estate Services Joint Venture); Hogan
Property Management, L.L.C.; Biicktown-TMK/Hogan Parking,
L.L.C. (nka_ Bricktown-SMC/Hogan L.L.C.); Bricktown-
TMK/Hogan Entertainment, L.L.C. (nka_ Bricktown
Entertainment, L.L.C); Mark D. Elgin; Stonegate Management
Company, L.L.C.; Elgin Development Company, L.L.C.; and
TDC Company, L.L.C., filed January 31,2003 (docket entry
no.113), and Defendant Tiana P. Douglas’ Motion to Dismiss,
filed January 31, 2003 (docket entry no. 115), and the motions
having been duly considered and the court having made its
rulings by way of a separate order entered on this date, IT IS
HEREBY ORDERED AND ADJUDGED that plaintiff, Tal
Technologies, Inc.’s claims predicated upon the loss of the | .4
acres are dismissed as barred under the Rooker-Feldman
doctrine. Plaintiff, Bricktown 2000, Inc.’s RICO and Sherman
Act claims and Plaintiff, Tal Technologies, Inc.’s RICO and
Sherman Act claims, predicated upon matters other than the loss
of the 1 A acres, are dismissed pursuant to Fed.R.Civ.P.
12(b)(6). Plaintiff, Bricktown 2000, Inc.'s state law claims and
Appendix - 77
Plaintiff Tal Technologies, Inc’s state law claims, predicated
upon matters other than the loss of the 1.4 acres, are dismissed
without prejudice
DATED at Oklahoma City, this [30" ] of September,
2003.
S/Stephen P.Friot
STEPHEN P. FRIOT
UNITED STATES DISTRICT JUDGE
Appendix - 78
IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF OKLAHOMA
ROOM 1210, U.S. COURTHOUSE
OKLAHOMA CITY, OKLAHOMA 73102
Date: October 31, 2002
MOSHE TAL, et al., )
Plaintiffs,
-VS- ae No. CIV-02-324-F
DAN RANDOLPH HOGAN, et al.;
Defendants.
ENTER ORDER:
Upon hearing in open court on October 30, 2002, the court rules
as follows:
Attorney Peter Joseph is granted leave to appear pro hac vice on
behalf of plaintiff Moshe Tal. Attorney Robert Keel is also
deemed to represent plaintiff Moshe Tal.
The motion to strike the affidavit of Moshe Tal is granted.
Judgment is entered against plaintiff Moshe Tal on all claims,
with no leave to amend.
The court notes that the claim for conspiracy to condemn by
fraud is voluntarily withdrawn.
Appendix - 79
As to the defendant Tiana Douglas, the state law claim for
tortious interference is dismissed without leave to amend
because it is barred by limitations.
With respect to the state law claim for tortious interference as to
the other defendants, the claim is dismissed without leave to
amend insofar as it is asserted by plaintiff Tal, because Mr. Tal
lacks standing. The state law claim for tortious interference as
asserted by plaintiff Tal Technologies, Inc. and Bricktown 2000
is not dismissed as to any defendants other than defendant
Douglas, as to whom that claim is dismissed without leave to
amend because it is barred by limitations.
With respect to the Sherman Act claim, as to all defendants, the
motions to dismiss are denied as to the limitations defense. The
motions to dismiss are granted as to the requirement of pleading
relevant channels of interstate commerce, with 30 days to
amend: The motions to dismiss for lack of standing on the part
of plaintiff Tal and Tal Technologies, Inc. are granted, without
leave to amend.
With respect to the RICO claim, the motions to dismiss are
denied as to limitations. The motion to dismiss for lack of
standing is granted as to plaintiff Tal, without leave to amend.
The motion to dismiss for lack of standing is denied as to
plaintiff Tal Technologies, Inc. As to the motions to dismiss the
RICO claims for deficient substantive RICO allegations, the
motions are granted. Plaintiffs Bricktown 2000 and Tal
Technologies are granted 30 days to amend and file a RICO
statement.
By direction of Judge Stephen P. Friot, we have entered the
above enter order.
Robert D. Dennis, Clerk
Appendix - 80
By: S/Lori Gray
Deputy Clerk
cc: all parties
02 -324 p014 wpd
Appendix - 81
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF OKLAHOMA
MOSHE TAL, ct al.,
Plaintiffs,
VS Case No. CIV-02-324-F
DAN RANDOLPH HOGAN, et al
Defendants.
TRANSCRIPT OF HEARING ON MOTIONS TO DISMISS
BEFORE THE HONORABLE STEPHEN P. FRIOT
UNITED STATES DISTRICT JUDGE
OCTOBER 30, 2002
Appendix - 82
APPEARANCES
FOR THE PLAINTIFFS: Mr. Peter A. Joseph
Attorney at Law
185 Madison Avenue,
10th Floor
New York, New York 10016
Mr. Robert T. Keel
Attorney at Law
1412 South Agnew
Oklahoma City, Oklahoma 73108
FOR THE DEFENDANTS: Mr. Melvin R. McVay, Jr.
Attorney at Law
One Leadership Square,
12th Floor
211 North Robinson Avenue
Oklahoma City, OK 73102
Mr. Brad L. Roberson
Attorney at Law
1120 Robinson Renaissance
119 North Robinson
Oklahoma City, Oklahoma 73102
Mr. Daniel |. Brummitt
Attorney at Law
200 North Walker, Suite 400
Oklahoma City, Oklahoma 73102
Mr. William R. Burkett
Attorney at Law
200 North Walker, Suite 400
Oklahoma City, Oklahoma 73102
Appendix - 83
Ms. Leslie Batchelor
Attorney at Law
301 North Harvey, Suite 200
Oklahoma City, Oklahoma 73102
Appendix - 84
THE COURT: Weare here in case number Civil 02-324,
Moshe Tal and others versus Hogan and others. Counsel for the
. parties and any pro se parties will please make your appearances.
MR. JOSEPH: I’m Peter Joseph, Your Honor. You
allowed me in pro hac vice on Monday, and I’m not exactly sure
which party I represent. | believe Mr. Keel represents the two
corporate plaintiffs, and I would be assisting him. And then Mr.
Tal, 1 think, is going to stay pro Se, and I would be assisting him
also.
THE COURT: — Now, Mr. Josephs, say that again, what
you anticipate your role will be vis-a-vis Mr. Tal.
MR. JOSEPH: - That I would be assisting Mr. Tal, Your
Honor. We haven't quite decided at this point what our
respective statuses would be, but at this point I would be
assisting him.
THE COURT: _ Well, then, if you are going to assist him
in any way, you need to file an entry of appearance on his behalf.
Are you prepared to do that?
MR. JOSEPH: Well, I don’t understand, Your Honor, the
difference between the pro hac vice admission and that ——
THE COURT: Well, as you stand here today, do you
represent Mr. Tal as an individual?
MR. JOSEPH: Yes, sir.
THECOURT: Okay. Then! need an entry of appearance
signed by you on his behalf and the clerk will be happy to give
you one.
MR. JOSEPH: Fine, Your Honor.
Appendix - 85
THE COURT: — Okay. So the plaintiffs are collectively
represented, then, by Mr. Josephs. And we’ll have appearances
for the defendants, please.
MR.McVAY: Your Honor, Mel Mcvay for all of the
defendants with the exception of Tiana Douglas.
THE COURT: — Okay.
MR. ROBERSON: Your Honor, Pm Brad Roberson, for
Tiana Douglas.
THE COURT: _ That's Roberson?
MR. ROBERSON: Yes.
THE COURT: Okay.
MR. BRUMMITT: Daniel Brurnmitt, for the City of
Oklahoma City, the amicus — one of the amicus.
THE COURT: Well, we have two amicis, the City and
the Urban Renewal Authority.
MS. BATCHELOR: Yes, Your Honor, I’m Leslie
Batchelor, and | represent the Oklahoma City Urban Renewal
Authority, the other amicus 1n this action.
THE COURT: And we have another individual.
MR.KEEL: Yes, sir. Robert T. Keel for Bricktown 2000,
Inc., and Tal Technologies, Inc.
THE COURT: | am reminded, Mr; Josephs, that your
motion to appear pro hac vice was only on behalf of the two
entity plaintiffs. In light of the representations you have made
Appendix ~ 86
here, the Court will, instanter, grant you pro hac status on behalf
of Mr. Tal.
MR. JOSEPH: _ | appreciate that, Your Honor.
THE COURT: And in so stating, I assume Mr. Keel is
disposed to continue in the same capacity as to the individual
plaintiff as with the entity plaintiffs. Am I right about that, Mr.
Keel?
MR. KEEL: Yes, sir.
THE COURT: — And we'll proceed on that basis, then,
with Messrs. Josephs and Keel on behalf of Mr. Tal.
MR. JOSEPH: — Excuse me, Your Honor. I just want to
make one remark that a lot of people refer to me as “Josephs.”
I’m actually “Joseph.”
THE COURT: Joseph. Okay. I will delete the S, and I
appreciate your mentioning that.
Obviously, we have a number of motions. The motions
cover a number of grounds, some of which overlap, some of
which do not. And I’m not going to hear argument on all issues.
We could spend several days with arguments on all issues
presented by these motions. The issues have for the most part
been thoroughly briefed and well—briefed. And | am
well—-satisfied that it is not necessary to hear argument on all
issues.
What I’m going to do is invite argument on issues that I
think warrant argument, and | intend to take up the motions in
the following order: The first motion that will be heard and
resolved, and actually not heard, I’m ready to resolve it without
argument, is the Hogan defendants’ motion to strike the affidavit
of Moshe Tal.
Appendix - 87
By the way, is that the right pronunciation?
MR. TAL: = Moshe Tal.
THE COURT: — Moshe Tal. Thank you, sir.
I will next hear argument on one issue that we'll get to
relating to the Tiana Douglas motion to dismiss; we will then
address what I'll call the Hogan group’s motion to dismiss; and
then the motions to dismiss of TDC, Stonegate Management
Company, LLC, and Elgin is it Elgin or Elgin?
MR. McVAY: _ Itis Elgin, Your Honor.
THE COURT: — Elgin Development Company, LLC. So
we’ ll address the motions in that order.
First, the Hogan defendants’ motion to strike is granted. I
don’t want to convert the motions to dismiss into motions for
summary judgment. Motions to dismiss do have their own
inherent limitations, with which we are all very familiar. And 1n
fact the standard to be applied on a 12(b) (6) motion to dismiss
is a very stringent standard and very favorable to the party
against whom the motion is made.
Be that as it may, I do not have any desire to convert the
motions to dismiss into motions for summary judgments
because, particularly in a matter of this complexity, I believe that
there is, within reason, something to be gained by having an
initial round of motions directed only to the matters which may
be addressed under Rule 12. Obviously, at a later stage of the
case, the parties will be free, on both sides, to assert their
positions by way of motions for summary judgment or partial
summary judgment. I won't be a bit surprised if we get to that
stage as to some of these claims and so I believe that it is simply
premature and, for numerous other reasons, inadvisable to in
effect convert these motions to dismiss into motions for
Appendix - 88
summary judgment, and for that reason the Hogan defendants’
motion to strike the affidavit of Moshe Tal is granted.
We have an additional counsel, I believe, present in the
courtroom and he will make his appearance.
MR. BURKETT: William R. Burkett, City Attorney.
THE COURT: Very well.
That brings us to Tiana Douglas’s motion to dismiss. And
the Tiana Douglas motion to dismiss addresses all the claims.
And I’m focusing now on the motion to dismiss as it relates to
the state law claims. We have pleaded state law claims for
tortious interference and conspiracy to condemn by fraud, but
that brings m
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