IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION JUAN RAMON TORRES and EUGENE ROBISON § § Plaintiffs, § § v. § § CIVIL ACTION NO. SGE MANAGEMENT, LLC, STREAM GAS & § 4:09CV2056 ELECTRIC, LTD, STREAM SPE GP, LLC, STREAM § SPE, LTD, IGNITE HOLDINGS, LTD., CHRIS § DOMHOFF, ROB SNYDER, PIERRE KOSHAKJI, § DOUGLAS WITT, STEVE FLORES, MICHAEL § TACKER, DONNY ANDERSON, TREY DYER, STEVE § FISHER, RANDY HEDGE, BRIAN LUCIA, LOGAN § STOUT, AND PRESLEY SWAGERTY, § § Defendants. § DEFENDANTS’ MOTION TO DISMISS FOR IMPROPER VENUE, FOR FAILURE TO STATE A CLAIM AND FOR FAILURE TO PLEAD FRAUD WITH PARTICULARITY TABLE OF CONTENTS TABLE OF AUTHORITIES ........................................................................................................... i I. NATURE AND STAGE OF THE PROCEEDING.............................................................1 II. INTRODUCTION ...............................................................................................................2 III. STATEMENT OF THE ISSUES AND APPLICABLE STANDARDS.............................5 IV. BACKGROUND .................................................................................................................6 V. MOTION TO DISMISS FOR IMPROPER VENUE ..........................................................9 VI. MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM ....................................14 A. Plaintiffs’ mere recitals and conclusory statements do not meet the pleading standards of Rule 8(a)(2) as explained by the United States Supreme Court........14 B. Plaintiffs fail to state a cause of action under 18 U.S.C. § 1962(a).......................16 1. Income derived from a pattern of racketeering..........................................16 2. Used income to acquire interest in or establish an enterprise....................17 3. Enterprise engages in interstate commerce................................................19 4. Injury by reason of the use or investment of racketeering income............20 C. Plaintiffs fail to state a cause of action under 18 U.S.C. § 1962(b).......................21 D. Plaintiffs fail to state a cause of action under 18 U.S.C. § 1962(c).......................22 E. Plaintiffs fail to state a cause of action under 18 U.S.C. § 1962(d).......................23 VII. MOTION TO DISMISS FOR FAILURE TO PLEAD FRAUD WITH PARTICULARITY............................................................................................................24 VIII. PRAYER............................................................................................................................25 TABLE OF AUTHORITIES FEDERAL CASES Abraham v. Singh, 480 F.3d 351 (5th Cir. 2007)...............................................................20 AK Steel Corp. v. U.S.W., 2002 LEXIS 19676 (S.D. Ohio Mar. 30, 2002).......................22 Alexander v. U.S. Credit Mgmt, Inc., 384 F. Supp. 2d 1003 (N.D. Tex. 2005).................11 Alford v. Dean Witter Reynolds, Inc., 975 F.2d 1161 (5th Cir. 1992)...............................14 Armstrong v. Assocs. Int'l Holdings Corp., 242 ................................................................14 Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009) ................................................................5, 15, 18 Ashe v. Corley, 992 F.2d 540 (5th Cir. 1993)....................................................................23 Atkinson v. Anadarko Bk. & Trust Co., 808 F.2d 438 (5th Cir. 1987) ..............................19 Bachman v. Bear, Sterns & Co., 178 F.3d 930 (7th Cir. 1999).........................................19 Beck v. Prupis, 529 U.S. 494 (2000)..................................................................................23 Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007).................................................14, 15 Bonton v. Archer Chrysler Plymouth, Inc., 889 F. Supp. 995 (S.D. Tex. 1995) ...............18 Boyle v. United States, 129 S. Ct. 2237 (2009)..................................................................18 Brown v. Pacific Life Insurance Co., 462 F.3d 384 (5th Cir. 2006)..................................13 Clark v. National' Equities Holdings, Inc., 561 F. Supp. 632 (E.D. Tex. 2006), aff'd 2008 LEXIS 113 (5th Cir. 2008) .........................................................................18 Crowe v. Henry, 43 F.3d 198 (5th Cir. 1995)....................................................................21 Dillard v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 961 F.2d 1148 (5th Cir. 1992) ............................................................................................................................14 Fedmet Corp. v. M/V Buyalyki, 194 F.3d 674 (5th Cir. 1999)...........................................12 Fitzgerald v. Chrysler Corp., 116 F.3d 225 (7th Cir. 1997)..............................................19 Fogie v. Thorn, 190 F.3d 889 (8th Cir. 1999)....................................................................19 - i - Grigson v. Creative Artists Agency, L.L.C., 210 F.3d 524 (5th Cir. 2000) .......................13 Holmes v. Securities Investor Protection Corp., 503 U.S. 258 (1992)........................20, 21 Idea Media Corp. v. Encore Mktg Grp, Inc., 2009 LEXIS 3355 (N.D. Tex. Jan. 20, 2009) ......................................................................................................................13 Kessman & Associates, Inc. v. Barton-Aschman Associates, Inc., 10 F. Supp. 2d 682 (S.D. Tex. 1997)....................................................................................................10 Lim v. Offshore Specialty Fabricators, Inc., 404 F.3d 898 (5th Cir. 2005).............5, 10, 11 Montesano v. Seafirst Commercial Corp., 818 F.2d 423 (5th Cir. 1987)..........................18 Nolen v. Nucentrix Broadband Networds, 293 F.3d 926 (5th Cir. 2002)....................15, 20 PacifiCare Health System, Inc. v. Book, 538 U.S. 401 (2003) ..........................................14 Parker & Parsley Petroleum Co. v. Dresser Industries, 972 F.2d 580 (5th Cir. 1992) ............................................................................................................................18 Realpage, Inc. v. EPS, Inc., 560 F. Supp. 2d 539 (E.D. Tex. 2007)..................................10 Recursion Software, Inc. v. Interactive Intelligence, Inc., 425 F. Supp. 2d 756 (N.D. Tex. 2006)..........................................................................................................10 Reves v. Ernst & Young, 507 U.S. 170 (1993)...................................................................23 Scherk v. Alberto-Culver Co., 417 U.S. 506 (1974) ..........................................................10 Shearson/America Exp. Inc. v. McMahon, 482 U.S. 220 (1987).......................................14 U.S. v. Turkette, 452 U.S. 576 (1981)..........................................................................16, 18 U.S. v. Columbia/HCA Healthcare Corp., 125 F.3d 899 (5th Cir. 1997)..........................25 U.S. v. Masters, 924 F.2d 1362 (7th Cir. 1991).................................................................19 Via Viente Taiwan, L.P. v. UPS, 2009 LEXIS 12408 (E.D. Tex. Feb. 17, 2009) .............10 Vimar Seguros y Reaseguros, S.A. v. M/V Sky Reefer, 515 U.S. 528 (1995) ....................10 Washington Mutual Finance Group, LLC v. Bailey, 364 F.3d 260 (5th Cir. 2004) ..........13 Williams v. Coldwell Banker First Greenwood-LeFlore Realty, Inc., 2008 LEXIS 35067 (N.D. Miss. Mar. 13, 2008)...............................................................................13 - ii - Williams v. WMX Technologies, Inc., 112 F.3d 175 (5th Cir. 1997).............................5, 24 FEDERAL STATUTES 18 U.S.C. § 1341............................................................................................................2, 17 18 U.S.C. § 1343............................................................................................................2, 17 18 U.S.C. § 1961....................................................................................................15, 16, 24 18 U.S.C. § 1962........................................................................................................ passim 18 U.S.C. § 1964(c) ...............................................................................................15, 22, 24 Fed. R. Civ. P. 9(b) ............................................................................................5, 17, 24, 25 Fed. R. Civ. P. 12(b)(3)..............................................................................................5, 9, 10 Fed. R. Civ. P. 12(b)(6)......................................................................................5, 14, 24, 25 Fed. R. Civ. P. 8(a)(2)..................................................................................................14, 15 - iii - IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION JUAN RAMON TORRES and EUGENE ROBISON § § Plaintiffs, § § v. § § CIVIL ACTION NO. SGE MANAGEMENT, LLC, STREAM GAS & § 4:09CV2056 ELECTRIC, LTD, STREAM SPE GP, LLC, STREAM § SPE, LTD, IGNITE HOLDINGS, LTD., CHRIS § DOMHOFF, ROB SNYDER, PIERRE KOSHAKJI, § DOUGLAS WITT, STEVE FLORES, MICHAEL § TACKER, DONNY ANDERSON, TREY DYER, STEVE § FISHER, RANDY HEDGE, BRIAN LUCIA, LOGAN § STOUT, AND PRESLEY SWAGERTY, § § Defendants. § DEFENDANTS’ MOTION TO DISMISS FOR IMPROPER VENUE, FOR FAILURE TO STATE A CLAIM AND FOR FAILURE TO PLEAD FRAUD WITH PARTICULARITY TO THE HONORABLE JUDGE OF SAID