Antitrust Law Daily Wrap Up, RICO—11th Cir.: Dismissal of RICO claims reversed in dispute between plumbing material suppliers, (Feb 10, 2014)
Law Firms Mentioned:Corona Law Firm, PA | Leonard Feuer, PA | Mayback & Hoffman, PA
Organizations Mentioned:Corcel Corp. | Ferguson Enterprises, Inc. | Holland & Knight, LLP | Line-Tec, Inc. | Sbe, Inc. | Vista Continental Corp.
By Jody Coultas, J.D.
A district court improperly dismissed a Racketeer Influenced and Corrupt Organizations Act (RICO) claim filed by Corcel Corporation, Inc. against competitor Ferguson Enterprises, Inc., the U.S. Court of Appeals in Atlanta has held (Corcel Corp. v. Ferguson Enterprises, Inc., February 7, 2014, Per Curiam.).
The companies were business competitors in the plumbing supply and construction trade. Corcel alleged that Ferguson and Line-Tec, Inc. (LT) joined with a prime construction contractor to create two enterprises to fraudulently procure plumbing supply and construction contracts through improper use of the County’s Small Business Enterprise Program (SBE). Specifically, the enterprises allegedly solicited and prepared false and misleading documents and repeatedly submitted those documents to obtain contracts. The companies also allegedly executed a fraudulent scheme by listing LT as an SBE subcontractor on the contractor’s construction contract bids even though the companies knew that LT was certified as a SBE only because of LT and Ferguson’s prior fraudulent actions. The district court dismissed the complaint for lack of proximate causation.
Corcel sufficiently alleged a direct relation between its claimed injury and the RICO violations, according to the court. Proximate cause requires some direct relation between the injury and the defendant’s conduct. The companies’ scheme of knowingly misrepresenting LT’s qualifications for SBE status resulted in Corcel losing out on contracts it would have received absent the fraudulent conduct. Corcel was next in line to receive the contracts at issue and the damages sustained by Corcel should be ascertainable. There was no risk of duplicative recoveries and no other immediate victims of the alleged RICO violations were more likely to vindicate the laws by pursuing their own claims than Corcel.
The case is No. 13-13284.
Attorneys: Ricardo Corona (Corona Law Firm, PA) for Corcel Corp. Christopher N. Bellows (Holland & Knight, LLP) for Ferguson Enterprises, Inc. Leonard Feuer (Leonard Feuer, PA) for Line Tec, Inc. James A. Stepan (Mayback & Hoffman, PA) for AKA Services, Inc.
Companies: Corcel Corp.; Ferguson Enterprises, Inc.; Line-Tec, Inc.
Cases: RICO AlabamaNews FloridaNews GeorgiaNews