Antitrust Law Daily Wrap Up, RICO—11th Cir.: Partnership pockets $67M despite failed racketeering claim against TD Bank, (Jul 29, 2014)

By Greg Hammond, J.D.

Coquina Investments, an investment partnership that lost over $6.7 million in the notorious Scott Rothstein Ponzi scheme, was properly denied a motion to amend its RICO claim against TD Bank, the U.S. Court of Appeals in Atlanta decided today. In affirming the lower court’s decision, the appeals court determined that Coquina’s motion to amend was unduly delayed (Coquina Investments v. TD Bank, N.A., July 29, 2014, Anderson, R.).

Background. Coquina Investments was awarded $67 million for TD Bank’s involvement with the billion-dollar Ponzi scheme perpetrated by Scott Rothstein. According to the court, Coquina claimed that TD aided and abetted the Ponzi scheme; made fraudulent misrepresentations; and engaged in a pattern of racketeering activity in violation of RICO. However, the district court granted TD summary judgment on the RICO claim, finding that Coquina’s closed-ended pattern of racketeering activity theory was untenable. The district court also denied Coquina’s motion to amend its RICO claim, which was filed after summary judgment and immediately before trial. After TD filed an appeal of the $67 million judgment, Coquina cross-appealed the district court’s RICO decision.

RICO claim. In its complaint, Coquina asserted that TD Bank “engaged in a pattern of related and continuous [RICO] predicate acts over a substantial, but closed, period of time,” the court noted. In May 2011, TD moved for summary judgment on the RICO claim, arguing that the investment partnership failed to demonstrate a closed-ended pattern of racketeering activity. Additionally, in June 2011, TD filed a reply brief, citing case law that demonstrated a five-month period of predicate acts may be untenable. The court therefore found that Coquina was on notice by June 2011 that it had not pleaded open-ended continuity. Because the partnership then waited until after summary judgment and immediately before trial to request leave to amend its complaint, the district court did not abuse its discretion in finding that the motion was unduly delayed, the court concluded. The district court’s judgment was consequently affirmed.

The case number is 12-11161.

Attorneys: Miguel A. Estrada (Gibson Dunn & Crutcher, LLP) and David Scott Mandel (Mandel & Mandel, LLP) for Coquina Investments. Peter James Covington (McGuire Woods, LLP) and Lawrence Robbins (Robbins Russell Englert Orseck Untereiner & Sauber, LLP) for TD Bank, N.A.

Companies: Coquina Investments; TD Bank, N.A.

Cases: RICO AlabamaNews FloridaNews GeorgiaNews