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UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION
THE GIL RAMIREZ GROUP, L.L.C.; AND GIL RAMIREZ, JR. Plaintiffs, V. HOUSTON INDEPENDENT SCHOOL DISTRICT; LAWRENCE MARSHALL; EVA JACKSON; AND RHJ-JOC, INC. Defendants. Case No. 4:10-CV-04872

DEFENDANT MARSHALL & ASSOCIATES' MOTION FOR A MORE DEFINITE STATEMENT AND MOTION TO DISMISS PLAINTIFFS' SECOND AMENDED ORIGINAL COMPLAINT
TO THE HONORABLE JUDGE OF SAID COURT: COMES NOW Defendant MARSHALL & ASSOCIATES, by and through undersigned counsel, with their Motion to Dismiss pursuant to Rules 12(b)(6) and 8(a) of the Federal Rules of Civil Procedure and Motion for More Definite Statement as to Plaintiffs' Second Amended Original Complaint (Doc 62), and in support thereof would respectfully show the Court as follows:

I. INTRODUCTION
In their Second Amended Original Complaint, Plaintiffs, the Gil Ramirez Group, L.C.C. and Gil Ramirez, Jr. (hereinafter collectively referred to as "Plaintiffs") added Defendant Marshall & Associates as a party to the lawsuit. The complaint, however, fails to assert any claims against Marshall & Associates and it fails to allege any facts indicating Marshall & Associates was involved in the events that serve as the basis of Plaintiffs' claims. Because

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Plaintiffs Second Amended Original Complaint fails to satisfy the pleading standards of the Federal Rules of Civil Procedure, Defendant Marshall & Associates requests that this Court issue an order dismissing Plaintiffs' claims against it under Rule 12(b)(6) and 8(a) for failure to state a claim upon which relief may be granted. Alternatively, Marshall & Associates requests that this Court issue an order requiring Plaintiffs to amend their complaint pursuant to Rule 12(e) of the Federal Rules of Civil Procedure, specifying the claims and factual allegations asserted against Marshall & Associates.

DEFENDANT'S MOTION TO DISMISS

A. Standard

A cause of action can fail to state a "claim upon which relief can be granted" if it fails to comply with the requirements of Rule 8(a)(2). Bradley v. Phillips Petroleum Co., 527 F.Supp.2d 661 (S.D. Tex. 2007); See, e.g., Buerger v. Sw. Bell Tel. Co., 982 F.Supp. 1247, 1249-50 (E.D. Tex. 1997); Bank of Abbeville & Trust Co. v. Commonwealth Land Title Ins. Co., 201 Fed.

Appx. 988, 990 (5 th Cir. 2006). "Rule 8(a)(2) still requires a showing, rather than a blanket assertion, of entitlement to relief. Without some factual allegation in the complaint, it is hard to see how a claimant could satisfy the requirement of providing not only fair notice of the nature of the claim, but also grounds on which the claim rests." Ashcroft, 129 S.Ct. 1937 (2009). "[A] Rule 12(b)(6) motion to dismiss for failure to state a claim may be a proper vehicle to challenge the sufficiency of a pleading under Rule 8." Abbeville, 201 Fed. Appx. at 990. "A statement of facts that merely creates a suspicion that the pleader might have a right of action" is insufficient to overcome a motion to dismiss. Campbell v. City of San Antonio, 43 F.3d 973, 975 (5th Cir. 1995); see also Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007); see also Ashcroft v. -2Twombley, 550 U.S. 544 (2007);

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Iqbal, 129 S.Ct. 1937 (2009). A plaintiff is obligated to provide "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555-56 (2007) (quoting Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986); See also Ashcroft, 129 S.Ct. at 1949. "Factual allegations must be enough to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555;

Ashcroft, 129 S.Ct. at 1949; Lexington Ins. Co. v. S.HR.M Catering Servs., Inc., 567 F.3d 182, 184 (5th Cir. 2009). Plaintiffs' Second Amended Original Complaint fails to meet the pleading requirement set forth in the Federal Rules of Civil Procedure with respect to Marshall & Associates. In the introductory paragraph of their complaint, Plaintiffs indicate that they intend to refer to both Defendant Lawrence Marshall and Defendant Marshall & Associates throughout the complaint as "Marshall." (Plaintiffs' Second Amended Original Complaint at p. 1). While Plaintiffs assert claims against "Marshall", Plaintiffs failed to specifically assert any claims against Marshall & Associates. Furthermore, Plaintiffs fail to allege any facts supporting the proposition that Marshall & Associates was involved in the alleged events that serve as the basis of Plaintiffs' claims in this lawsuit. Id. at J 15-81. B. Plaintiffs' 14 th Amendment claim against Marshall and Associates should be dismissed. Plaintiffs failed to specifically assert a claim under Section 1983 against Marshall & Associates, and they have likewise failed to allege any facts that would support such a claim. To state a claim under 42 U.S.C. 1983, Plaintiffs must allege violation of rights secured by the Constitution and laws of United States, and they must show that alleged deprivation was committed by a person acting under color of state law. 42 U.S.C.A. 1983. The definition of acting under color of state law requires that the defendant in a 1983 action exercise power -3-

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possessed by virtue of state law and made possible only because the defendant is clothed with authority of state law. 42 U.S.C.A. 1983; West v. Atkins, 487 U.S. 42, 108 S.Ct. 2250 (1988). Plaintiffs fail to allege any facts supporting the position that Marshall & Associates was clothed with the authority of state law or that it was acting in any official capacity pursuant to state law. Accordingly, Plaintiffs' claim under the 14 th Amendment should be dismissed with respect to Marshall & Associates. C. Plaintiffs' RICO claim against Marshall & Associates should be dismissed. Plaintiffs have alleged violations of various subsections of RICO, 18 U.S.C. 1962(b)(d), against Marshall & Associates. According to the Fifth Circuit, these subsections, in their simplest terms, state that (a) a person cannot acquire or maintain an interest in an enterprise through a pattern of racketeering activity; (b) a person who is employed by or associated with an enterprise cannot conduct the affairs of the enterprise through a pattern of racketeering activity, and (c) a person cannot conspire to violate subsections (a), (b), or (c). Crowe v. Henry, 43 F.3d 198, 203 (5 th Cir. 1995). RICO claims under these subsections require: "(1) a person who engages in (2) a pattern of racketeering activity (3) connected to the acquisition, establishment, conduct, or control of an enterprise." Id.; In re Mastercard Intl, Inc., 313 F.3d 257, 261 (5th Ci r. 2002) (citing Crowe). Plaintiffs fail to specifically assert a RICO claim against Marshall & Associates, and they fail to allege any facts in support of a RICO claim against Marshall & Associates. 1. Plaintiffs fail to allege facts supporting the existence of an enterprise.

An enterprise under RICO is a group of persons or entities associating together for the common purpose of engaging a course of conduct. Whelan v. Winchester Prod. Co., 319 F.3d

225, 229 (5 th Cir. 2003) (citing 18 U.S.C. 1961(4)). An enterprise may be a legal entity or any union or group of individuals associated in fact, who are associating together for the common -4-

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purpose of engaging in a course of conduct.

Id. The existence of a legal entity alone is not

enough to constitute an enterprise under RICO. Id. A RICO enterprise must "have at least three structural features: a purpose, relationships among those associated with the enterprise, and longevity sufficient to permit these associates to pursue the enterprise's purpose." Boyle v. US., 129 S.Ct. 2237, 2244 (2009). When the relationship between members of an alleged enterprise does not "exist for purposes other than simply to commit the predicate acts and reap the resultant rewards," the relationship is not a RICO enterprise. In re McCann, 268 Fed. Appx. 359, 366 (5 th Cir. 2008); Whelan, 319 F.3d at 229 ("The enterprise is not a pattern of racketeering activity, but must exist separate and apart from the pattern of racketeering activity in which it engages"). Plaintiffs contend in their Second Amended Original Complaint that Defendants formed an enterprise, and they alternatively attempt to establish the existence of an association-in-fact enterprise. (Plaintiffs Second Amended Original Complaint at lj 93-94.) An "association-infact" enterprise is "a group of persons associated together for a common purpose of engaging in a course of conduct."

US. v. Turkette, 452 U.S. 576, 583, 109 S.Ct. 2893, 106 L.Ed.2d 195

(1981). Such an enterprise "(1) must have an existence separate and apart from the pattern of racketeering, (2) must be an ongoing organization and (3) its members must function as a continuing unit as shown by a hierarchical or consensual decision making structure." Turkette, 452 U.S. at 583; Gray v. Upchurch, 2007 WL 2258906 (S.D. Miss.). Plaintiffs fail to make factual allegations in support of any of these elements with respect to Marshall & Associates or any other Defendant. Specifically, Plaintiffs do not allege facts to support the existence of a RICO enterprise, that the alleged "association-in-fact" enterprise had an existence separate and apart from the pattern of racketeering, that there is an ongoing organization or that the members

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of the enterprise function as a continuing unit as shown by a hierarchical or consensual decision making structure. (Plaintiffs Second Amended Original Complaint at

TT 93-94)

In short, Plaintiffs have asserted no facts that could reasonably suggest that there was an enterprise sufficient to support their RICO claim. Id. at

IN 91-112. They have pleaded no facts

that the alleged enterprise existed for any other purpose but to simply commit the predicate acts of bribery, wire fraud and money laundering. Id. Plaintiffs' pleadings merely alleged various players purportedly involved in the loss of their contract, but have offered no allegations to show any association between them. Id. Thus, Plaintiffs' complaint fails to allege sufficient facts to show that there was any enterprise that existed separate and apart from the purported pattern of racketeering. Dispositively, Plaintiffs failed to make any factual allegations that Marshall & Associates took any action related to the operation of an "enterprise," or that Marshall & Associates formed or was a member of a legal entity with any other Defendant to associate together for any common purpose. Because Plaintiffs Second Amended Original Complaint fails to set forth any allegations that Marshall & Associates was involved in an "enterprise" or an "association-in-fact enterprise" as required to bring claim under RICO, Count 2 of the Complaint should be dismissed with respect to Marshall & Associates. 2. Plaintiffs fail to allege facts supporting a pattern of racketeering activity.

To allege that Defendants engaged in a pattern of racketeering activity, the Plaintiffs must plead that Defendants committed two or more predicate acts that (1) are related, and (2) amount to or pose a threat of continued criminal activity. Word of Faith World Outreach Ctr. Church,

Inc. v. Sawyer, 90 F.3d 118, 122 (5 th Cir. 1996); Delta Truck & Tractor, Inc. v. JI Case Co., 855 F.2d 241, 243 (5th Cir. 1988). In their complaint, Plaintiffs contend that one or more of the Defendants engaged in bribery, money laundering and/or wire fraud. (Plaintiffs' Second -6-

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Amended Original Complaint at

in 103-107). Plaintiffs' pleadings, however, fail to state facts

attributing any of the alleged predicate acts to Marshall & Associates. Id. a. Wire Fraud (18 U.S.C. 1343)

To state a claim for wire fraud under 1343, a plaintiff must establish three elements: "(1) a scheme or artifice to defraud or to obtain money or property by means of false pretenses, representations, or promises; (2) a use of the interstate mails or wires for the purpose of executing the scheme; and (3) a specific intent to defraud either by revising, participating in, or abetting the scheme." Jan. 25, 2007). Additionally, Texas law requires that a fraud claimant plead and prove that: (1) a material representation was made; (2) the representation was false; (3) when the representation was made, the speaker knew it was false or made it recklessly without any knowledge of the truth and as a positive assertion; (4) the speaker made the representation with the intent that the other party should act upon it; (5) the party acted in reliance on the representation; and (6) the party thereby suffered injury. Aquaplex, Inc. v. Rancho La Valencia, Inc., 297 S.W.3d 768, 774 (Tex. 2009) (per curiam). Rule 9(b) of the Federal Rules of Civil Procedure imposes a heightened pleading standard for fraud claims and requires that a party "state with particularity the circumstances constituting fraud." The Fifth Circuit has interpreted Rule 9(b) to "require specificity as to the statements (or omissions) considered to be fraudulent, the speaker, when and why the statements were made, and an explanation why they are fraudulent." Plotkin v. IP Axess Inc., 407 F.3d 690, 696
(5th

Hewlett-Packard Co. v. Byd:Sign, Inc., 2007 WL 275476 (E.D. Tex.

Cir. 2005). "Put simply, Rule 9(b) requires 'the who, what, when, where, and how' to be laid out." Shandong Yinguang Chem. Indus. Joint Stock Co., Ltd. v. Potter, 607 F.3d 1029, 1032 (5 th Cir. 2010) (quoting Benchmark Electronics, Inc. v. JM Huber Corp., 343 F.3d 719, 724 (5 th Cir. -7-

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2003)). Rule 9(b) requires a plaintiff to allege the existence of facts sufficient to warrant the pleaded conclusion that fraud has occurred. See In re Haber Oil Co., 12 F.3d 426, 439 (5 th Cir. 1994). Plaintiffs' fraud allegations do not identify any specific statements, the speaker, or when any allegedly fraudulent statement was made. Complaint at irg 105-106). While Rule 9(b) provides that intent and knowledge "may be alleged generally," this is not a license to base claims of fraud upon conclusory allegations. City of Clinton, Ark. v. (See Plaintiffs' Second Amended Original

Pilgrim's Pride Corp., F.3d , No. 10-10039, 2010 WL 5162041 (5 th Cir. 2010). Proving the knowledge element of fraud requires more than a simple allegation that a defendant had fraudulent intent it requires specific facts that support an inference of fraud. Tuchman, 14 F. 3d

at 1068. The requirements for such specific facts can be satisfied by (1) alleging facts that show a defendant's motive to commit fraud, or (2) identifying circumstances that indicate conscious behavior on the part of the defendant, with the strength of such circumstantial allegations being correspondingly greater. Id.; Ashcroft v. lqbal, 129 S.Ct. 1937, 1949 (2009) ("Threadbare

recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice."). Plaintiffs do not allege facts that support an inference of fraud as to Defendants, nor have they pleaded any specific facts to show the requisite intent or meet the heightened pleading requirement under Rule 9(b). b. Bribery (18 US. C. 201)

It is unlawful to directly or indirectly, corruptly give, offer or promise anything of value to any public official or person who has been selected to be a public official, or offer or promise any public official or any person who has been selected to be a public official to give anything of value to any other person or entity, with the intent to influence. 18 U.S.C. 201. It is also

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unlawful for a public official or person selected to be a public official, to directly or indirectly, corruptly demand, seek, receive, accept, or agree to receive or accept anything of value personally or for any other person or entity, in return for being influenced. Id. To constitute

bribery under Section 201, payment to a public official must be made in exchange for an explicit promise to perform or not perform an official act. Id. The payment must also be made with the intent to bribe. United States v. Tomblin, 46 F.3d 1369, 1379 (5th Cir. 1995).

Plaintiffs' Second Amended Complaint fails to set forth Marshall & Associates' purported involvement in any of the acts of bribery alleged in the complaint. (Plaintiffs' Second Amended Original Complaint at 104). In fact, the only allegation in Plaintiffs' complaint regarding bribery is a statement that "the bribery included payments and other emoluments to Defendant Marshall in exchange for preferential treatment to other Defendants." Id. Plaintiffs' allegation, based solely on its characterization of political contributions, is conclusory at best.' Even if it were read to implicate Marshall & Associates, it fails to identify the payments made, the party who made the payments, the amount of the payments, or the preferential treatment that was secured by the alleged payments. Because Plaintiffs failed to plead facts sufficient to support their allegations of bribery, their claim should be dismissed with respect to Marshall & Associates. c. Money Laundering (18 US. C. sC 1956)

To establish the substantive offense of money laundering under 18 U.S.C. 1956(a)(1)(A)(i), a plaintiff must show that the defendant "(1) knowingly conducted a financial transaction; (2) which involved the proceeds of an unlawful activity; and (3) with the intent to promote or further unlawful activity." US. v. Dovalina, 262 F.3d 472, 475 (5 th Cir. 2001). To
Evidence of political contributions alone is insufficient to support a claim of bribery. See United States v. Allen, 10 F.3d 405,411 (7th Cir. 1993).

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satisfy the final element of a money laundering conviction, Plaintiffs must show that a Defendant conducted the financial transaction in question with the specific intent of promoting the specified unlawful activity. Id. Plaintiffs fail to assert any specific facts as to what financial transaction was conducted, who conducted it, or when it was conducted. (Plaintiffs' Second Amended Original Complaint at ty 107). Plaintiffs similarly fail to assert facts that this financial transaction involved in some way the proceeds of an unlawful activity or that the parties had the requisite intent required for money laundering. Id. Finally, Plaintiffs fail to allege any facts or assert any claims indicating that Marshall & Associates was involved in money laundering. Id. D. Plaintiffs' claims for tortious interference should be dismissed. Plaintiffs asserted claims for tortious interference with existing and prospective contracts against "Marshall," but failed to plead facts sufficient to support such a claim. (Plaintiffs' Second Amended Original Complaint at J 132-142.) Plaintiffs' claim for tortious interference with an existing contract simply sets forth the elements in a conclusory statement alleging that "Marshall" and other Defendants "willfully and intentionally interfered" with Plaintiffs' contract with HISD. Id. At 134. Similarly, Plaintiffs contend that "Marshall" and other Defendants interfered with the relationship between Plaintiffs and HISD that, with a "reasonable probability," would have resulted in additional contracts. Id. at 138-139. Plaintiffs' complaint utterly fails to allege any facts supporting either claim, and nowhere in their complaint do they allege any facts indicating that Marshall & Associates interfered with an existing or prospective contract. Accordingly, Plaintiffs' claims for tortious interference with existing and prospective contracts should be dismissed with respect to Marshall & Associates for failure to state a claim.

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E.

Plaintiffs' claim for "civil conspiracy" should be dismissed.

Once again, Plaintiffs have failed to assert that Marshall & Associates was involved in any alleged conspiracy and none of the facts alleged in Plaintiffs' Second Amended Petition would support such a claim. (Plaintiffs Second Amended Original Complaint at J 146-151.) Even if Plaintiffs had pled such facts, their claim for civil conspiracy is improper. Civil conspiracy is not an independent claim, but requires an "underlying tort which the alleged conspirators agreed to commit[.]" Zarzana v. Ashley, 218 S.W.3d 152, Tex. App.Houston [14th Dist.], 2007; Baker v. Stewart Title & Trust of Phoenix, 197 Ariz. 535, 5 P.3d 249, 259 (Ariz. Ct.App. 2000). "Allegations of conspiracy are not actionable absent an underlying [tort]"). Tobacco Co. v. Grinnell, 951 S.W.2d 420, 438 (Tex. 1997); See also Askanase v. Fatjo, 130 F.3d 657, 676 (5 th Cir. 1997). Plaintiffs failed to identify the tort underlying their allegations of conspiracy. (Plaintiffs' Second Amended Original Complaint at J 146-151.) Accordingly, Plaintiffs' claim for conspiracy should be dismissed with respect to Marshall & Associates.

DEFENDANT'S MOTION FOR MORE DEFINITE STATEMENT

A. Standard

A party may move for a more definite statement of a pleading to which a responsive pleading is allowed by which is so vague or ambiguous that the party cannot reasonably prepare a response. FED. R. Civ. P. 12(e); Sisk v. Texas Parks & Wildlife Dept., 644 F.2d 1056, 1059 (5th Cir. 1981). If the Court orders a more definite statement and the order is not obeyed within 14 days after notice of the order or within the time the court sets, the court may strike the pleading or issue another appropriate order. Id.

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B.

Plaintiffs fail to state what, if any, claims they assert against Marshall & Associates
As was discussed above, Plaintiffs indicate in the introductory paragraph of their Second

Amended Complaint that they intend to refer to both Defendant Lawrence Marshall and Defendant Marshall & Associates throughout the complaint as "Marshall." (Plaintiffs' Second Amended Original Complaint at p. 1). While Plaintiffs assert claims against "Marshall", Plaintiffs failed specifically assert any claims against Marshall & Associates. Furthermore, Plaintiffs fail to allege any facts supporting the proposition that Marshall & Associates was involved in the alleged events that serve as the basis of Plaintiffs' claims in this lawsuit. See Id. at IN 15-81. In failing to do so, Plaintiffs have failed to meet the pleading requirements set forth in the Federal Rules of Civil Procedure and the Second Amended Complaint is so vague or ambiguous with respect to Marshall & Associates that it cannot reasonably prepare its response. In the event that the Court denies Marshall & Associates' motion to dismiss, Plaintiffs should be ordered to re-plead and place Marshall & Associates on notice as to the claims asserted against it.

Iv.
CONCLUSION Defendant Marshall & Associates respectfully requests the Court to order Plaintiffs to amend their complaint, specifying the facts and/or causes of action asserted against Marshall & Associates. Alternatively, Marshall & Associates requests that the Court dismiss Plaintiffs' claims against them pursuant to Rules 12(b)(6) and 8(a) of the Federal Rules of Civil Procedure, and for the Court to award Defendant Marshall & Associates such further relief as the Court deems appropriate under the circumstances.

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Respectfully submitted, BRACE WELL & GIULIANI LLP By: /s/ Jarvis V Hollingsworth Jarvis V. Hollingsworth Attorney-in-Charge State Bar No. 00787708 SDT Bar No. 216068 Richard F. Whiteley State Bar No. 24013744 SDT Bar No. 24408 David W. Morris State Bar No. 24046481 SDT Bar No. 585631 Melissa A. Mihalick State Bar No. 24045589 SDT Bar No. 808466 711 Louisiana, Suite 2300 Telephone: (713) 221-1563 Facsimile: (713) 221-1212 ATTORNEY FOR DEFENDANT LAWRENCE MARSHALL

CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the foregoing document has been forwarded to counsel of record pursuant to the Federal Rules of Civil Procedure via the Court's electronic filing service unless the Court record indicates other means of service on the 12th day of December, 2011. /s/ David W. Morris David W. Morris

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