Collingsworth Scherer RICO Motion To Dismiss

FILED
Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 1 of 58
2015 Aug-12 PM 12:40

U.S. DISTRICT COURT
N.D. OF ALABAMA
IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
)
)
)
)
Plaintiffs
)
vs.
)
)
TERRENCE P. COLLINGSWORTH, individually )
)
and as agent of Conrad & Scherer, LLP,
)
International Rights Advocates, Inc., and Albert
)
van Bilderbeek; CONRAD & SCHERER, LLP;
)
WILLIAM R. SCHERER, JR., individually and as )
agent of Conrad & Scherer, LLP;
)
INTERNATIONAL RIGHTS ADVOCATES, )
INC.; IVAN ALFREDO OTERO MENDOZA; )
)
FRANCISCO RAMIREZ CUELLAR; and
)
ALBERT VAN BILDERBEEK,
)
)
Defendants.
DRUMMOND COMPANY, INC. and
DRUMMOND LTD.,
Case No. 2:15-cv-00506-RDP
DEFENDANTS CONRAD & SCHERER, LLPS AND WILLIAM R. SCHERER, JR.S

MOTION TO DISMISS COMPLAINT
Robert K. Spotswood
Michael T. Sansbury
William T. Paulk
SPOTSWOOD SANSOM & SANSBURY LLC
One Federal Place
1819 Fifth Avenue North, Suite 1050
Birmingham, Alabama 35203
Tel: 205-986-3620
Fax: 205-986-3639
rks@spotswoodllc.com
msansbury@spotswoodllc.com
wpaulk@spotswoodllc.com
[Counsel list continued on next page]
Attorneys for Conrad & Scherer, LLP and William R. Scherer, Jr.
Of Counsel for Defendants Conrad & Scherer, LLP and William R. Scherer, Jr.
Kenneth E. McNeil
Pro Hac Vice to be filed
Texas State Bar No. 13830900
Stuart V. Kusin
Texas State Bar No. 11770100
SUSMAN GODFREY LLP
1000 Louisiana Street, Suite 5100
Houston, Texas 77002-5096
Telephone: 713/651-9366
Facsimile: 713/654-6666
kmcneil@susmangodfrey.com
skusin@susmangodfrey.com
Lindsey Godfrey Eccles
WASB No. 33566
SUSMAN GODFREY LLP
1201 Third Avenue
Suite 3800
Seattle, Washington 98101
Telephone: 206/516-3880
Facsimile: 206/516-3883
leccles@susmangodfrey.com
Christopher S. Niewoehner
Steptoe & Johnson LLP
115 South LaSalle Street, Suite 3100
Chicago, IL 60604
Tel: 312-577-1240
Fax: 312-577-1370
cniewoehner@steptoe.com
Kendall R. Enyard
Steptoe & Johnson LLP
1330 Connecticut Avenue NW
Washington, DC 20036
Tel: 202-429-6405
Fax: 202-429-3902
kenyard@steptoe.com
TABLE OF CONTENTS
TABLE OF AUTHORITIES ......................................................................................................... iii
INTRODUCTION ...........................................................................................................................1
ARGUMENT ...................................................................................................................................5
I.
II.
III.
The First Amendments Petition Clause Prohibits RICO-based

Collateral Attacks on Defendants Litigation Conduct ............................................5
A.
The Alleged RICO Predicate Acts Fail Basic Pleading

Requirements and Are Entirely Limited to Protected Litigation
Conduct ........................................................................................................6
B.
Defendants Litigation Conduct is Constitutionally Protected

from Collateral Attack Based on Federal Statutory Law,
Including RICO ..........................................................................................12
Even if Its Allegations of Litigation Misconduct are Accepted as True,

Drummond Should not be Allowed to use RICO Predicate Acts to
Collaterally Attack the Underlying Litigation .......................................................16
A.
Under Pendergraft, Even Blatant Litigation Misconduct

Cannot Support the Predicate Acts of Extortion, Mail Fraud or
Wire Fraud .................................................................................................16
B.
This Court Should Recognize that Pendergrafts Reasoning

Applies Equally to the Additional Predicate Acts Alleged
Here ............................................................................................................21
C.
Any Sham Litigation Exception Does Not Apply ..................................24
D.
After Pendergraft, District Courts in the Eleventh Circuit Have

Properly Characterized Claims Based on Litigation Misconduct
as Malicious Prosecution, Not Extortion ...................................................26
E.
The Pendergraft Analysis Survives Even in States with NearAbsolute Litigation Immunity....................................................................27
F.
Despite Surface Similarities, This Case is Nothing Like

Chevron v. Donziger ..................................................................................28
The Only Cognizable RICO Injury Drummond Alleges is Barred by

RICOs Four-Year Statute of Limitations, and it Therefore Lacks
Standing to Sue ......................................................................................................31
A.
Drummonds Reputational and Intangible or Speculative

Business Injuries are Insufficient to Confer RICO Standing .................32
B.
To the Extent Drummonds RICO Claim Rests on Its Legal

Fees Injury, it is Barred by the Injury Discovery Rule ............................35
IV.
Drummonds RICO Conspiracy Claim Fails for the Same Reasons as

Its RICO Claim ......................................................................................................43
V.
Drummonds State Law Claims Also Fail .............................................................44

A.
Civil Conspiracy ........................................................................................44
B.
Willful Misrepresentation ..........................................................................44
C.
Fraudulent Concealment ............................................................................45
CONCLUSION ..............................................................................................................................46
ii
TABLE OF AUTHORITIES
CASES
Adell v. Macon Cnty. Greyhound Park, Inc.,
785 F. Supp. 2d 1226 (M.D. Ala. 2011) ....................................................................... 6, 34
Agency Holding Corp. v. Malley-Duff & Assocs., Inc.,
483 U.S. 143 (1987) .......................................................................................................... 36
Am. Dental Ass'n v. Cigna Corp.,
605 F.3d 1283 (11th Cir. 2010) .............................................................................. 9, 11, 44
Am. Nursing Care of Toledo, Inc. v. Leisure,
609 F.Supp. 419 (N.D.Ohio 1984) .............................................................................. 18, 19
Ambrosia Coal & Const. Co. v. Pages Morales,
482 F.3d 1309 (11th Cir. 2007) ........................................................................................ 10
Andrx Pharm., Inc. v. Elan Corp., PLC,
421 F.3d 1227 (11th Cir. 2005) ........................................................................................ 26
Ashcroft v. Iqbal,
556 U.S. 662 (2009) ...................................................................................................... 7, 11
Atico Intern. USA, Inc. v. LUV N'Care, Ltd.,
No. 09-60397-CIV-COHN, 2009 WL 2589148 (S.D. Fla. Aug. 19, 2009) ..................... 24
Auburn Med. Ctr., Inc. v. Andrus,
9 F.Supp.2d 1291 (M.D.Ala. 1998) ............................................................................ 19, 20
BE&K Construction Co. v. NLRB,
536 U.S. 516 (2002) .............................................................................................. 13, 14, 25
Bell Atl. Corp. v. Twombly,
550 U.S. 544 (2007) ........................................................................................................ 7, 8
Blackburn v. Calhoun,
No. 207CV166, 2008 WL 850191(N.D. Ala. Mar. 4, 2008) ...................................... 37, 38
Boothby Realty Co. v. Haygood,
114 So. 2d 555 (Ala. 1959) ........................................................................................... 6, 18
Brooks v. Blue Cross & Blue Shield of Fla., Inc.,
116 F.3d 1364 (11th Cir.1997) ..................................................................................... 9, 10
Bryant v. Avado Brands, Inc.,
187 F.3d 1271 (11th Cir. 1999) ........................................................................................ 39
iii
California Motor Transport Co. v. Trucking Unlimited,

404 U.S. 508 (1972) .......................................................................................................... 13
Chevron Corp. v. Donziger,
974 F.Supp. 2d 362 (S.D.N.Y. 2014)................................................................................ 29
City of Chicago Heights, Ill. v. Lobue,
914 F. Supp. 279 (N.D. Ill. 1996) ..................................................................................... 33
Columbia Pictures Indus., Inc. v. Prof'l Real Estate Investors, Inc.,
944 F.2d 1525 (9th Cir. 1991) .................................................................................... 14, 15
Daddona v. Gaudio,
156 F.Supp.2d 153 (D.Conn. 2000) .................................................................................. 19
Deck v. Engineered Laminates,
349 F.3d 1253 (10th Cir. 2003) ........................................................................................ 22
Driver v. W.E. Pegues, Inc.,
No. 7:11-CV-1374 LSC, 2012 WL 3042939 (N.D. Ala. July 19, 2012) .......................... 44
Dysart v. BankTrust,
No. CV-11-RRA-1917-S, 2012 WL 2577534 (N.D. Ala. Apr. 12, 2012) ........................ 37
E. R. R. Presidents Conference v. Noerr Motor Freight, Inc.,
365 U.S. 127 (1961) .......................................................................................................... 13
First Pacific Bancorp, Inc. v. Bro,
847 F.2d 542 (9th Cir. 1988) ............................................................................................ 18
Foremost Ins. Co. v. Parham,
693 So. 2d 409 (Ala. 1997) ............................................................................................... 45
GI Holdings, Inc. v. Baron & Budd,
179 F.Supp.2d 233 (S.D.N.Y. 2001)................................................................................. 18
Green Leaf Nursery v. E.I. DuPont De Nemours & Co.,
341 F.3d 1292 (11th Cir. 2003) .................................................................................. 28, 29
Grogan v. Platt,
835 F.2d 844 (11th Cir. 1988) .......................................................................................... 32
Gunn v. Palmieri,
No. 87 CV 1418, 1989 WL 119519 (E.D.N.Y. Sept. 29, 1989) ....................................... 11
Hamm v. Rhone-Poulenc Rorer Pharm., Inc.,
187 F.3d 941 (8th Cir. 1999) ............................................................................................ 33
iv
Harrington v. JohnsonRast & Hays Co.,

577 So.2d 437 (Ala.1991) ................................................................................................. 45
Heights Cmty. Cong. v. Smythe, Cramer Co.,
862 F.Supp. 204 (N.D.Ohio 1994) .................................................................................... 18
I.S. Joseph Co. v. J. Lauritzen A/S,
751 F.2d 265 (8th Cir. 1984) .................................................................................. 5, 18, 24
In re AndroGel Antitrust Litig. (No. II),
888 F. Supp. 2d 1336 (N.D. Ga. 2012) ............................................................................. 26
In re Terazosin Hydrochloride Antitrust Litig.,
335 F. Supp. 2d 1336 (S.D. Fla. 2004) ............................................................................. 25
In re Towne Services, Inc. Securities Litigation,
184 F.Supp.2d 1308 (N.D. Ga. 2001) ................................................................................. 5
Jackson v. Bellsouth Tele., Inc.,
181 F.Supp.2d 1345 (S.D. Fla. 2001) ............................................................................... 11
Jones v. BP Oil Co., Inc.,
632 So.2d 435 (Ala.1993) ........................................................................................... 44, 45
Kimm v. Chang Hoon Lee & Champ, Inc.,
196 F. App'x 14 (2d Cir. 2006) ......................................................................................... 34
Klehr v. A.O. Smith Corp.,
521 U.S. 179, 117 S.Ct. 1984, 138 L.Ed.2d 373 (1997) ................................................... 38
Lawson v. Harris Culinary Enterprises, LLC,
83 So. 3d 483 (Ala. 2011) ................................................................................................. 46
Levin, Middlebrooks, Mabie, Thomas, Mayes & Mitchell, P.A. v. U.S. Fire Ins. Co.,
639 So. 2d 606 (Fla. 1994)................................................................................................ 28
Levitan v. Patti,
No. 3:09CV321 MCR MD, 2011 WL 1299947 (N.D. Fla. Feb. 8, 2011) ........................ 27
Livingston Downs Racing Ass'n, Inc. v. Jefferson Downs Corp.,
257 F. Supp. 2d 819 (M.D. La. 2002) ......................................................................... 21, 27
Maio v. Aetna, Inc.,
221 F.3d 472 (3d Cir. 2000)........................................................................................ 34, 35
Maiz v. Virani,
253 F.3d 641 (11th Cir. 2001) .......................................................................................... 37
McCaleb v. A.O. Smith Corp.,

200 F.3d 747 (11th Cir. 2000) .......................................................................................... 38
McGuire Oil Co. v. Mapco, Inc.,
958 F.2d 1552 (11th Cir. 1992) .................................................................................. 13, 23
Oscar v. Univ. Students Co-op. Ass'n,
965 F.2d 783 (9th Cir. 1992) ............................................................................................ 35
Patterson v. Mobil Oil Corp.,
335 F.3d 476 (5th Cir. 2003) ............................................................................................ 34
Paul S. Mullin & Assocs., Inc. v. Bassett,
632 F.Supp. 532 (D.Del. 1986) ......................................................................................... 19
Powell v. Gorham,
No. 2:13-CV-0055-LSC, 2013 WL 3151632 (N.D. Ala. June 14, 2013) ......................... 36
Prof'l Real Estate Investors, Inc. v. Columbia Pictures Indus., Inc.,
508 U.S. 49 (1993) ...................................................................................................... 24, 26
Raney v. Allstate Ins. Co.,
370 F.3d 1086 (11th Cir. 2004) ........................................................................................ 22
Regions Bank v. J.R. Oil Co., LLC,
387 F.3d 721 (8th Cir. 2004) ............................................................................................ 34
Rogers v. Nacchio,
241 Fed.Appx. 602 (11th Cir. 2007) ................................................................................. 44
Rotella v. Wood,
528 U.S. 549 (2000) ........................................................................................ 36, 37, 38, 41
Simpson v. Sanderson Farms, Inc.,
744 F.3d 702 (11th Cir. 2014) .............................................................................. 2, 3, 4, 34
Snyder v. Faget,
295 Ala. 197, 326 So. 2d 113 (1976) ................................................................................ 45
Sosa v. DIRECTV, Inc.,
437 F.3d 923 (9th Cir. 2006) ...................................................................................... passim
Special Purpose Accounts Receivable Co-op. Corp. v. Prime One Capital Co.,
202 F. Supp. 2d 1339 (S.D. Fla. 2002) ............................................................................. 11
Steele v. Hosp. Corp. of Am.,
36 F.3d 69 (9th Cir.1994) ............................................................................................... 6, 7
vi
United Mine Workers v. Pennington,

381 U.S. 657 (1965) .......................................................................................................... 12
United States v. Pendergraft,
297 F.3d 1198 (11th Cir. 2002) ................................................................................. passim
Vemco, Inc. v. Camardella,
23 F.3d 129 (6th Cir. 1994) .............................................................................................. 18
von Bulow v. von Bulow,
657 F.Supp. 1134 (S.D.N.Y. 1987) .................................................................................. 19
Warnock v. State Farm Mut. Auto. Ins. Co.,
833 F. Supp. 2d 604 (S.D. Miss. 2011)............................................................................. 21
Williams v. Mohawk Indus., Inc.,
465 F.3d 1277 (11th Cir. 2006) .................................................................................... 2, 32
STATUTES
18 U.S.C. 1343 ....................................................................................................................... 3, 10
18 U.S.C. 1503 ....................................................................................................................... 3, 10
18 U.S.C. 1512 ....................................................................................................................... 3, 10
18 U.S.C. 1951 ............................................................................................................................. 3
18 U.S.C. 1956(a)(2)(A) ............................................................................................................ 10
18 U.S.C. 1961 ............................................................................................................................. 1
18 U.S.C. 1962 ................................................................................................................... 2, 8, 32
18 U.S.C. 1962(c) and (d) .......................................................................................................... 21
18 U.S.C. 1964(c) ...................................................................................................... 2, 32, 33, 35
18 U.S.C. 1965(a)(2)(A) .............................................................................................................. 3
18 U.S.C. 201 ......................................................................................................................... 3, 10
18 U.S.C.A. 1951(a) .................................................................................................................... 9
18 U.S.C.A. 1951(b)(2)................................................................................................................ 9
28 U.S.C. 1927 ........................................................................................................................... 30
Alabama Code Section 6-5-101 .................................................................................................... 45
vii
Alabama Code Section 6-5-102 .................................................................................................... 46

U.S. Const. Amend. I ...................................................................................................................... 5
RULES
Fed. R. Civ. P. 12(b)(6)................................................................................................................... 1
Fed. R. Civ. P. 60(b)(3)................................................................................................................. 28
Fed. R. Civ. P. 9(b) ....................................................................................................... 9, 11, 45, 46
Fed. R. Evid. 201(b)(2) ................................................................................................................. 39
OTHER AUTHORITIES
54 C.J.S. Malicious Prosecution 4 at 525 (1987) ....................................................................... 18
viii
Pursuant to Federal Rules of Civil Procedure 12(b)(6) and 9(b), Defendants William R.
Scherer and Conrad & Scherer LLP (Defendants)1 respectfully move the Court to dismiss with
prejudice the Complaint brought by Drummond Company, Inc. and Drummond Ltd. (Plaintiffs
or Drummond) under the provisions of the Racketeer Influenced and Corrupt Organizations
Act (RICO), 18 U.S.C. 1961, et seq.
INTRODUCTION
At the outset of this 192-page Complaint, Drummond promises to prove that Defendants
have targeted it with a massive scheme to extort. See, e.g., Compl. 1. But not a single one of
the 228 predicate acts enumerated in the five Appendices alleges Hobbs Act extortion. Compl.
196, Appendices A-E. Indeed, a reader looking for predicate acts of extortion searches
dozens and dozens of pages in vain, until one paragraph on page 70 alludes to a single phone call
proposing settlement negotiations that never happened. Compl. 142. Drummond alleges no
further Hobbs Act violations. Nor could it, because Defendants actions targeting Drummond,
Compl. 50, 153, 198, are pure litigation conduct, and therefore protected by the First
Amendment. This case is not about a scheme to extort. Heres what it is about.
Defendants William Scherer and Conrad & Scherer are a respected, experienced
trial lawyer and his firm, who have brought several lawsuits (the Underlying
Litigation)2 against Drummond based on its mining operations in Colombia.
Compl. 1.
Defendants William R. Scherer and Conrad & Scherer LLP join in the arguments presented in Defendant
Collingsworths concurrently-filed Motion to Dismiss.
The Underlying Litigation consists of Juan Aquas Romero v. Drummond Company, Inc., et al., No. 7:03-cv00575-KOB, (N.D. Ala. March 13, 2003), (Romero); Freddy Locarno Baloco, et al., v. Drummond Company,
Inc., et al., No. 7:09-cv-00557-RDP (N.D. Ala. March 20, 2009) (Baloco); Jane Doe 1, et al., v. Drummond
Company, Inc., et al., No. 2:09-cv-01041-RDP (N.D. Ala. May 27, 2009) (Balcero); and Marisol Melo Penaloza,
et al. v. Drummond Company, Inc., et al., No. 2:13-cv-00393-RDP (N.D. Ala. Feb. 26, 2013) (Melo). Of these
four lawsuits, Melo alone survives, and the parties in Melo recently responded to an order from the Court to show
cause why that case should not be dismissed as well. Melo, Dkt. Nos. 52, 53.
2
Over a fifteen year period, Defendants have lost every one of those cases either
on a dispositive motion or after a jury trial except for certain remaining claims
in one action. See supra n. 1.
Defendants have received nothing in settlement recoveries much less extorted

a single dime from Drummond. See id.
The victim of the alleged extortionate scheme is a company owned by what

Forbes Magazine calls the richest man in Alabama who has virtually unlimited
resources to throw at litigation against these human rights lawyers. See
http://www.forbes.com/pictures/emlm45fedgm/alabama/ (visited Aug. 10, 2015).
To establish their alleged federal RICO civil violations Drummond must satisfy four
elements of proof: (1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering
activity. In civil cases RICO plaintiffs must also satisfy the requirements of 18 U.S.C.
1964(c) (1) the requisite injury to business or property, and (2) that such injury was by
reason of the substantive RICO violation. Williams v. Mohawk Indus., Inc., 465 F.3d 1277,
1282-83 (11th Cir. 2006) (internal citations omitted). Racketeering activity is shown by
alleging a pattern of predicate acts under 18 U.S.C. 1962. Simpson v. Sanderson Farms,
Inc., 744 F.3d 702, 705 (11th Cir. 2014). Those predicate acts must proximately cause the
injury suffered by Drummond to its business or property. Id.
In the Appendices to the Complaint, Drummond alleges no less than 228 violations of
various federal criminal statutes. Compl., Apps. A-E. These are the alleged predicate acts that
form the basis of Drummonds RICO claims. Compl. 196. Appendices A, B and C deal with
witness assistance payments made to the families of some of the witnesses who provided
testimony in the Underlying Litigation, to promote their safety in what was becoming a very
dangerous situation in Colombia. These three Appendices generally (and conclusorily) allege
violations of 18 U.S.C. 1343 (wire fraud); 18 U.S.C. 201 (witness bribery); 18 U.S.C.
1965(a)(2)(A) (money laundering); 18 U.S.C. 1503 (obstruction of justice); [and] 18 U.S.C.
1512 (witness tampering). See Compl., Apps. A-C. Appendix D provides a list of declarations,
2
interrogatory responses and other litigation documents filed and/or served by some of the
Defendants that allegedly concealed those witness assistance payments. Compl., App. D.
Drummond alleges in a similarly conclusory fashion that these documents and other statements
violated federal law against obstruction of justice and mail and wire fraud. Appendix E lists a
number of equally conclusory violations of the federal wire and mail fraud statutes based on
Defendants communications with the press, government officials, human rights organizations,
and Defendant Albert van Bilderbeek. Compl., App. E.
There is no Appendix F listing predicate acts for extortion. Although Drummond accuses
Defendants of scheming to extort and recites the elements of Hobbs Act extortion, 18 U.S.C.
1951, Compl. 183-88, not one of the 228 violations alleged in the Appendices is as alleged
to be a predicate act of extortion.
The only clearly identified predicate allegation of
extortion is Defendant William Scherers unsuccessful settlement overture in June 2012.

Compl. 142. This extortionate act consisted of a single phone call from Mr. Scherer,
Managing Partner at the Conrad & Scherer law firm in Florida, to a lawyer at Akin Gump in
Washington and fellow friend of President George W. Bush, who in turn called his friend
William Jeffries at Baker Botts in Houston to see if there was a way to end this matter. He was
told, Hell no. That is the extortion that is the cornerstone of this case. This overture was
rejected, and thus, wrongful or not, caused no injury. See id.
If they were true, which they are not, Drummonds allegations might support a malicious
prosecution or sanctions action. But the flaws in its RICO claim are fatal.
The First Amendments Petition Clause protects Defendants litigation conduct,

and the Eleventh Circuit explicitly rejects targeting litigation conduct with a
RICO action based on extortion.
Drummond has been aware of its sole quantifiable injurypayment of attorney

feessince 2003, when the Underlying Litigation began. See Compl. 7; infra
3
III.B. As a result, its claims are time-barred under RICOs injury discovery rule.
Id. And of course, Drummond has known about the allegedly fraudulent and
false allegations in the Underlying Litigation for just as long.
And though Drummond does its best to shoehorn the facts of this case into the
Southern District of New Yorks Chevron v. Donziger case, Donziger was an
attempt by Chevron to use the United States courts to remedy litigation
misconductresulting in a fraudulently-obtained multibillion-dollar judgment
that the Ecuadorian judicial system seemed incapable of remedying itself. See
infra II.F.3
Drummonds RICO claim is, among other things, ridiculous. To the extent that Defendants have
tried to extract any windfall from Drummond, extortionate or otherwise, that attempt has been
a miserable, ongoing failure. See infra n. 1. As the Court is well aware, all but one of the suits
in the Underlying Litigation have already resulted in dismissal or a loss at trial. Id. Drummond
has already sued Defendants for defamation in this same Court, based on many of the same
alleged acts that form the predicates of this so-called RICO claim. Drummond Co., Inc. v.
Collingsworth, et al., No. 2:11-cv-03695-RDP (N.D. Ala. 2011).
Defendants are prepared to continue to vigorously defend that defamation suit by proving
the truth of the allegedly libelous statements. It has been reported that in late May 2015, a key
Drummond executive, Alfredo Araujo, was detained by Colombian authorities in connection
with
the
murders
in
2002
of
the
Drummond
union
officials.
See
http://colombiareports.com/drummond-executive-arrested-over-paramilitary-murder-charges/
(visited August 10, 2015). 4 The facts are finally starting to come out, and Drummonds RICO
allegations are nothing more than a desperate ploy to distract the court from the truth.
Defendants respectfully urge the Court not to allow itself to be taken in. It should dismiss
3
Donziger is not, of course, precedential, and as argued below in Section II.F., it is not at all clear that the Eleventh
Circuit would affirm its outcome if it were. The Donziger appeal was argued to a Second Circuit panel on April 20,
2015. Chevron Corp. v. Stephen Donziger, et al., No. 14-826 (2d Cir.).
The Court may take judicial notice of press accounts to establish that particular statements were made if not
necessarily for the truth of those statements. See In re Towne Services, Inc. Securities Litigation, 184 F.Supp.2d
1308, 1313 (N.D. Ga. 2001).
4
Drummonds frivolous claims and instead refocus its and the parties energies on Drummonds
libel suit, where Defendants eagerly await the opportunity to show the jury what has really been
going on in Colombia for the last fourteen years.
Defendants urge the Court to DISMISS Drummonds RICO claims WITH PREJUDICE.
ARGUMENT
I.
The First Amendments Petition Clause Prohibits RICO-based Collateral Attacks

on Defendants Litigation Conduct
Judges and lawyers often complain that the courts are inundated with a flood of
litigation, but the fact remains that litigation is as American as apple pie. I.S. Joseph Co. v. J.
Lauritzen A/S, 751 F.2d 265, 26768 (8th Cir. 1984). Nothing is more apple pie than the First
Amendment and our right to petition the Government for a redress of grievances. U.S. Const.
Amend. I. Courts, including the Eleventh Circuit, routinely urge limits on the civil RICO action
and caution against its misuse as a collateral attack on protected litigation conduct. See, e.g.,
United States v. Pendergraft, 297 F.3d 1198, 1207 (11th Cir. 2002) (Sanctions for filing
lawsuits lead to collateral disputes and a piling of litigation on litigation without end.
Allowing litigants to be charged with extortion would open yet another collateral way for
litigants to attack one another.) (quoting Boothby Realty Co. v. Haygood, 114 So. 2d 555, 559
(Ala. 1959)).
See also Adell v. Macon Cnty. Greyhound Park, Inc., 785 F. Supp. 2d 1226, 1237
(M.D. Ala. 2011) ([T]he statutory standing requirement ensures that RICO is not expanded to
provide a federal cause of action and treble damages to every tort plaintiff.) (quoting Steele v.
Hosp. Corp. of Am., 36 F.3d 69, 70 (9th Cir.1994)). Most courts focus on misuse of the RICO
statute by disappointed litigants who would leverage RICO to undermine the finality of a
judgment that did not go their way. See infra at II.D., E. By contrast, Drummond has mounted
this collateral attack on a legal process in which it has been almost uniformly triumphant. See
supra n. 1.
A.
The Alleged RICO Predicate Acts Fail Basic Pleading Requirements and Are
Entirely Limited to Protected Litigation Conduct
As explained in the Introduction, the alleged RICO predicate actsaside from one phone
call by Defendant Scherer, upon which rests the sole allegation of extortionconsist of 228
so-called violations that are listed in what might generously be described as a conclusory
manner in the five Appendices to the Complaint. Most of these violations are alleged to be
wire and/or mail fraud, as well as, in many cases, witness bribery, money laundering,
obstruction of justice, and/or witness tampering.
Compl., Apps. A-E.
Each of the
violations in Appendices A through D,5 which generally deal with assistance payments to
witnesses in the Underlying Litigation and statements regarding the same to opposing parties or
the Court, is intimately related to and inseparable from the conduct of the Underlying Litigation
against Drummond. Id. For this reason, as explained in Section II.B. below, Drummonds RICO
claim, if allowed, would impermissibly burden Defendants First Amendment rights to petition
the courts.
Drummonds allegations must meet the basic Twombly/Iqbal standard and, where
applicable, the more stringent requirements of Rule 9(b). To survive a motion to dismiss, a
complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is
plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 678 (quoting Bell Atl. Corp. v. Twombly,
550 U.S. 544, 570 (2007)). Determining whether a complaint states a plausible claim for relief
[is] ... a context-specific task that requires the reviewing court to draw on its judicial experience
and common sense. Iqbal at 679 (citation omitted). [F]acial plausibility exists when the
5
Appendix E is a reprise of the allegations in Drummonds libel suit. See supra I.A.2.
plaintiff pleads factual content that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged. Iqbal at 678 (citing Twombly, 550 U.S. at 556).
The standard also calls for enough facts to raise a reasonable expectation that discovery will
reveal evidence of the claim. Twombly, 550 U.S. at 556. Factual allegations must be enough
to raise a right to relief above the speculative level. Id. at 555.
The descriptions of each individual violation fail to enumerate or, in most cases, even
refer to the elements of the predicate acts listed. In Appendices A through C at the least, they
utterly fail to explain how the information in the Description column is meant to inform the
conclusory legal citations in the Violations column. None of these Violations plead a
plausible claim for relief, and few of them provide sufficient noticeor indeed any noticeto
Defendant Scherer or his law firm as to how they might go about defending against Drummonds
claims.
1.
Drummonds Allegations as to Defendant William Scherer Fail to

Meet Twombly Standards
As to Defendant William Scherer, Drummond entirely fails to meet the Twombly

standard. In fact, Defendant Scherer is cited in the Appendices only one time, for signing an
unidentified filing explaining why witness assistance payments were necessary in the
Underlying Litigation. App. D, #18. Although Drummond implies that Mr. Scherer thereby
committed obstruction of justice, mail, and wire fraud, it fails to explain how this filing
allegedly met the requirements of any of those predicate acts. Aside from conclusory and
implausible allegations that Bill Scherer knew of and approved the witness assistance
payments listed in the Appendicesand dozens more not listedthe Complaint entirely fails to
explain how Mr. Scherer allegedly conduct[ed] or participate[d], whether directly or
indirectly, in the conduct of [the] enterprise's affairs through a pattern of racketeering activity.
7
18 U.S.C.A. 1962 (West). See Compl. 77, 89, 116, 132. The Complaint does not contain a
single factual allegation explaining how Mr. Scherer allegedly approved those payments or
conducted the alleged payment scheme.
Drummonds only allegation focused on Mr. Scherers own conduct, dramatically
entitled The Ask, describes an unsuccessful attempt to engage Drummond in preliminary
settlement negotiations. Compl. 142. Mr. Scherer did not ask Drummond for anything; he
simply asked a mutual friend whether Drummond might perhaps be willing to consider
settlement discussions. Id. The Ask fails to plausibly state a claim pursuant to the Hobbs Act:
Whoever in any way or degree obstructs, delays, or affects commerce or the
movement of any article or commodity in commerce, by robbery or extortion or
attempts or conspires so to do, or commits or threatens physical violence to any
person or property in furtherance of a plan or purpose to do anything in violation
of this section shall be fined under this title or imprisoned not more than twenty
years, or both.
18 U.S.C.A. 1951(a). Extortion as defined for Hobbs Act purposes requires obtaining of
property from another, with his consent, induced by wrongful use of actual or threatened force,
violence, or fear, or under color of official right. 18 U.S.C.A. 1951(b)(2). The notion that Mr.
Scherers attempt to engage Drummond in settlement negotiations via a mutual acquaintance
somehow equates to wrongful use of actual or threatened force, violence, or fear is implausible
under Twombly standards and would also be offensive were it not so thoroughly ridiculous. As
to Mr. Scherer, Drummonds allegations entirely fail to state a claim and should be dismissed.
2.
Drummonds Mail and Wire Fraud Allegations Fail to Meet Rule 9(b)
Standards
Predicate acts of mail and wire fraud must be pled in compliance with Fed. R. Civ. P.
9(b)s heightened pleading standard, which requires that [i]n alleging fraud or mistake, a party
must state with particularity the circumstances constituting fraud or mistake. Am. Dental Ass'n
v. Cigna Corp., 605 F.3d 1283, 1291 (11th Cir. 2010). [P]ursuant to Rule 9(b), a plaintiff must
8
allege: (1) the precise statements, documents, or misrepresentations made; (2) the time, place,
and person responsible for the statement; (3) the content and manner in which these statements
misled the Plaintiffs; and (4) what the defendants gained by the alleged fraud.
Am. Dental,
605 F.3d at 1291 (citing Brooks v. Blue Cross & Blue Shield of Fla., Inc., 116 F.3d 1364, 1380
81 (11th Cir.1997) The plaintiff must allege facts with respect to each defendants participation
in the fraud. Am. Dental, 605 F.3d at 1291 (citing Brooks, 116 F.3d at 1381).
Drummond fails to plead its mail and wire fraud predicate actswhich include almost
every single Violation in each of the five Appendiceswith particularity as required by Rule
9(b). Specifically, Drummond fails to allege for each act (3) the content and manner in which
these statements misled the Plaintiffs; and (4) what the defendants gained by the alleged fraud.
Id.at 1291 (emphasis added).
Drummond also fails to allege facts with respect to each
defendants participation in the fraud. Id. (emphasis added). To be clear, a civil RICO
complaint based on mail or wire fraud must include specific allegations with respect to each
defendant. Ambrosia Coal & Const. Co. v. Pages Morales, 482 F.3d 1309, 1316-17 (11th Cir.
2007) (citing Brooks, 116 F.3d at 1381) (noting that in Brooks the plaintiffs lumped together all
of the defendants in their allegations of fraud.). [I]n a case involving multiple defendants ...
the complaint should inform each defendant of the nature of his alleged participation in the
fraud. Ambrosia, 482 F.3d at 1317 (citing Brooks, 116 F.3d at 1381).
Merely as an example, the first violation, typical of those listed in Appendices A
through C, which deal with witness assistance payments, identifies an alleged payment to a
woman named Mery Luz Molina Morales from a man named Ricardo Garzon, an alleged co-
conspirator.6 Compl., App. A at p. 1. Ms. Molina is alleged to be a member or friend of

Charriss family. Id. The Method is alleged to be an International wire followed by a cash
deposit into Charris bank account. Id. The Description explains that Richard Gordon
withdraws cash from Conrad & Scherers bank account in the United States and sends it via
Western Union to Colombia to Ricardo Garzon, a member of Collingsworths litigation team and
co-conspirator.
Garzon then deposits 3,000,000 Colombian pesos into Charris wifes
Colombian bank account. Id. And finally, the Violations column simply lists 18 U.S.C.
1343 (wire fraud); 18 U.S.C. 201 (witness bribery); 18 U.S.C. 1956(a)(2)(A) (money
laundering); 18 U.S.C. 1503 (obstruction of justice); 18 U.S.C. 1512 (witness tampering).
Id.
This first violation fails to meet basic pleading requirements. Although Drummond
assures the Court that each of the violations as alleged in Appendix A includ[es] how it
furthered the fraudulent scheme, Compl. 180; in fact it does not. Compl., App. A at p. 1. The
violation simply describes the fact of a payment by one alleged non-party co-conspirator,
nothing more. [T]he tenet that a court must accept as true all of the allegations contained in a
complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of
action, supported by mere conclusory statements, do not suffice. Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009). The first violation also fails Rule 9(b)s requirement that mail and wire fraud
allegations be pleaded with particularity and show either how Drummond was misled by the
alleged fraud or what any Defendant gained thereby. See Am. Dental, 605 F.3d at 1291. It also
fails to allege specific facts with respect to each (or indeed, any) Defendants participation. Id.
Defendants include this discussion of alleged witness assistance payments to Ms. Molina subject to their objection
that Drummond included this information in the Complaint in violation of this Courts protective order. By doing
so, Defendants do not waive any relevant objections to Drummonds misuse of confidential information.
10
The following 227 alleged violations are similarly deficient. As another example,
each of the line items in Appendix D is alleged to be an obstruction of justice. See also
Compl. 190-192. Appendix D is a list of Court Filings and Sworn Testimony in which
Defendants allegedly Fraudulently Conceal[ed] the witness payments described in Appendices
A through C. Compl., App. D. p. 1. Mere acts of concealment, however, may not be
considered predicate acts under Eleventh Circuit law. Special Purpose Accounts Receivable
Co-op. Corp. v. Prime One Capital Co., 202 F. Supp. 2d 1339, 1351 (S.D. Fla. 2002) (citing
Jackson v. Bellsouth Tele., Inc., 181 F.Supp.2d 1345, 1360 (S.D. Fla. 2001) (noting that [u]nder
Eleventh Circuit law, litigation activities that are nothing more than attempts to cover up
other acts are legally insufficient to establish predicate acts)). In other words, to the extent that
any obstruction of justice allegation depends on an alleged attempt to conceal another
predicate act, that attempt may not form an independent predicate act.
See also Gunn v.
Palmieri, No. 87 CV 1418, 1989 WL 119519, at *1 (E.D.N.Y. Sept. 29, 1989) aff'd, 904 F.2d 33
(2d Cir. 1990) ([O]ne of the predicate acts set forth in the RICO statute as pled here is
ridiculous. If serving and filing an answer or a motion by any defendant in a federal action could
be considered obstruction of justice, this Court would be flooded with motions to amend
complaints by plaintiffs seeking to add RICO claims based upon mail fraud and obstruction of
justice as soon as an answer was served. Such an interpretation of the RICO statute is
untenable.).
Appendix E consists entirely of wire (and one mail) fraud violations, none of which
alleges that any Defendant thereby intended to deceive the victim of the so-called fraud,
Drummond. Compl., App. E. The title of the Appendix helpfully acknowledges that the target
of each allegedly fraudulent communication is the Media, the United States Department of
11
Justice, and Other Third Parties. Id. at p. 1. But the federal mail and wire fraud statutes do not
criminalize fraudulent conduct aimed at third parties rather than the alleged victim of the
crime. For that reason alone, each of the allegations in Appendix E fails to establish a predicate
act. Appendix E in its entirety is nothing more than a cut-and-paste attempt by Drummond to
import its defamation allegations wholesale into this lawsuit.
In sum, none of the 228 violations alleged by Drummondor the Ask by Mr.
Schererare properly pleaded, and none extends the alleged pattern of racketeering activity,
Compl. 1, beyond litigation conduct that, as explained below, is nothing more or less than
petitioning activity protected by the First Amendment.
B.
Defendants Litigation Conduct is Constitutionally Protected from Collateral

Attack Based on Federal Statutory Law, Including RICO
The Supreme Court has long recognized that the First Amendment is the source of the
Noerr-Pennington doctrine,7 which immunizes individuals petitioning activities from federal
statutory liability. See McGuire Oil Co. v. Mapco, Inc., 958 F.2d 1552, 1558-59 (11th Cir. 1992)
(citing California Motor Transport Co. v. Trucking Unlimited, 404 U.S. 508 (1972)). In 2006
the Ninth Circuit observed that the Noerr-Pennington doctrine stands for a generic rule of
statutory construction, applicable to any statutory interpretation that could implicate the rights
protected by the Petition Clause. Sosa v. DIRECTV, Inc., 437 F.3d 923, 930-31 (9th Cir. 2006)
(citing BE&K Construction Co. v. NLRB, 536 U.S. 516, 525 (2002) (noting that, in 2002, the
Supreme Court extended the Noerr-Pennington doctrine beyond the antitrust context)). Federal
statutes, including RICO, must be construed so as to avoid burdening conduct that implicates
the protections afforded by the Petition Clause unless the statute clearly provides otherwise.
This doctrine is derived from the Supreme Courts decisions in Eastern Railroad Presidents Conference v. Noerr
Motor Freight, Inc., 365 U.S. 127 (1961), and United Mine Workers v. Pennington, 381 U.S. 657 (1965).
7
12
Sosa, 437 F.3d at 931. Courts must not lightly impute to Congress an intent to invade First
Amendment freedoms. E. R. R. Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S.
127, 138 (1961).
In Sosa, the satellite television broadcaster DIRECTV sent tens of thousands of demand
letters alleging that the recipients had accessed DIRECTVs satellite television signal illegally
and would be sued if they did not quickly settle. Sosa, 437 F.3d at 926. DIRECTV sent these
demand letters despite the fact that it had absolutely no information as to whether the letter
recipients were using smart card programming technology to steal its signal. Id. at 926. And
in fact, the smart card equipment purchased by the demand letter recipients ha[d] a number of
lawful applications such as implementing secure access to computer networks or controlling
physical access to buildings or rooms. Id. at 926. In other words, so far as DIRECTV knew,
many of its demand letters were false. And although they maintained their innocence of
DIRECTVs accusations, a number of recipients of the false demand letters paid cash settlements
to DIRECTV rather than incur the expense to respond to DIRECTVs allegations. Id. at 926-27.
After an unsuccessful state court action, they brought a RICO suit in federal court in California,
accusing DIRECTV of extortion. Id. at 927.
The district court dismissed the claim on the grounds of Noerr-Pennington immunity, and
the Ninth Circuit affirmed, id. at 929, 942, reasoning as follows:
Applying these principles here, we must determine whether Sosa's RICO lawsuit
burdens DIRECTV's petitioning activities. If it does, we must examine the
precise petitioning conduct DIRECTV engaged in to determine whether the
burden identified may be imposed consistently with the Constitution. If there is a
substantial question that it may not, we must determine whether RICO or the
RICO predicate acts Sosa alleges clearly provide for liability for the conduct at
issue. If a reasonable construction of RICO or the predicate act statutes exists that
avoids the burden, we will adopt that construction. Only where the statutes clearly
provide for the burden posed by the lawsuit will we address whether the statute
may be applied to the petitioning conduct consistently with the Constitution.
13
Id. at 932 (applying the First Amendment principles set out by the Supreme Court in BE & K
Const. Co. v. N.L.R.B., 536 U.S. 516, 524-25 (2002)). Finding that a RICO claim based on the
false and misleading demand letters clearly burdened DIRECTVs litigation conduct, the court
moved on to consider whether that burden ran afoul of the Petition Clause. Id. at 933. The
court noted that petitions include assorted documents and pleadings, in which plaintiffs or
defendants make representations and present arguments to support their request that the court do
or not do something. Id. at 933. The Petition Clause also precluded burdening documents and
activities that are not themselves petitionslike DIRECTVs demand lettersso as to preserve
the breathing space required for the effective exercise of the rights it protects. Id. [T]o
exercise its petitioning rights meaningfully, a party may not be subjected to liability for conduct
intimately related to its petitioning activities. Id. at 934.
The court also noted its previous
ruling that where the underlying litigation fell within the protection of the Petition Clause, any
incidental conduct would also be protected. Id. at 935 (citing Columbia Pictures Indus., Inc. v.
Profl Real Estate Investors, Inc., 944 F.2d 1525, 1528-29 (9th Cir. 1991)).
The Ninth Circuit ultimately concluded that the connection between presuit demand
letters and access to the courts is sufficiently close that the Petition Clause issues raised by
providing a treble-damages remedy with regard to such letters are indeed substantial. Id. at 936.
The court identified several reasons for its conclusion, including the following, among others.
Id. First, a pre-suit invitation to engage in settlement negotiations is a common feature of
modern litigation. Id. Second, the intimate relationship between presuit settlement demands
and the actual litigation process is highlighted by many states pre-litigation communication
privileges. Id. Third, protecting presuit demand letters serves the same interests that are
implicated in the protection of private litigation. Id.
14
In next evaluating whether RICO could be construed to avoid reaching the constitutional
issue, the Ninth Circuit relied in part on the Eleventh Circuits decision in United States v.
Pendergraft, 297 F.3d 1198, 1208 (11th Cir. 2002). Id. at 941. The Ninth Circuit found that
neither RICO nor the predicate statutes permitted a lawsuit based on DIRECTVs demand letters.
Id. at 942. The court emphasized that federal statutes, including RICO, must be construed so as
to avoid burdens on activity arguably falling within the scope of the Petition Clause of the First
Amendment. Id. at 942.
The court found that RICO did not unambiguously include the
accused litigation conduct within the scope of conduct it enjoins, and affirmed the district
courts decision dismissing the complaint. Id. at 942.
Drummonds Complaint also fails Sosas test. By seeking to impose RICOs treble
damages on Defendants based on their conduct in prosecuting their clients human rights claims
against Drummond, Compl. 199, the Complaint quite plainly burdens Defendants, and their
clients, petitioning activities. See id. at 932-33. Also, given the precise petitioning conduct,
this burden cannot be imposed consistently with the Constitution. See id. at 932. Witness
assistance payments are intimately related to the presentation of witnesses to support
Defendants, and their clients, petitioning activity.
Mistakes or evenif Drummonds
allegations are to be believedmisrepresentations in discovery responses and to this Court are

exactly the sort of incidental conduct, like Sosas false and misleading demand letters, that
must be left unburdened by federal statutory liability, including RICO, so as to preserve the
breathing space required for the exercise of First Amendment rights in our system of justice.
Id. at 933-35.
Although the Eleventh Circuit has not yet had occasion to consider the Ninth Circuits
application of the Noerr-Pennington doctrine to RICO claims, the Eleventh Circuits reasoning
15
in Pendergraft strongly influenced the Ninth Circuits determination that RICO must be
construed so as to preclude liability for the Sosa defendants litigation conduct. See id. at 940 n.
10, 941.
As discussed immediately below, Pendergraft gives every indication that if the
Eleventh Circuit were to consider whether a civil RICO suit based purely on alleged litigation
misconduct should be precluded by the protections afforded by the Petition Clause of the First
Amendment, it would reach a similar conclusion to the Ninth Circuits and construe RICO so as
not to burden litigation conduct, including litigation misconduct like that of DIRECTV in Sosa.
Defendants in this case should receive the benefit of that analysis, and Drummonds suit should
be dismissed.
II.
Even if Its Allegations of Litigation Misconduct are Accepted as True, Drummond

Should not be Allowed to use RICO Predicate Acts to Collaterally Attack the
Underlying Litigation
Each of the so-called predicate acts is pure litigation conduct of the type that, in the
Eleventh Circuit, among many others, cannot support a claim based on extortion.8 Pendergraft,
297 F.3d at 1208 ([P]rosecuting litigation activities as federal crimes would undermine the
policies of access and finality that animate our legal system. Moreover, allowing such charges
would arguably turn many state-law actions for malicious prosecution into federal RICO
actions.). It is also the type of litigation conduct that the Ninth Circuit has recognized as
immune from civil RICO claims, as explained above.
A.
Under Pendergraft, Even Blatant Litigation Misconduct Cannot Support the

Predicate Acts of Extortion, Mail Fraud or Wire Fraud
The Pendergraft defendants, James Scott Pendergraft and Michael Spielvogel, were
convicted of attempted extortion and mail fraud, among other crimes. Id. at 1200. These
charges arose out of their threat to seek damages in a lawsuit and to use false evidence in
Only one alleged predicate actThe Askis identified as extortion, but Drummond nevertheless repeatedly
frames its allegations as a massive or multifaceted scheme to extort. Compl. 17-24, 142, 178, 179, 193.
8
16
support of the lawsuit. Id. (emphasis added). The appellate court reversed these convictions
because that threat was neither (1) wrongful for Hobbs Act (extortion) purposes nor (2) a
scheme to defraud for mail fraud purposes. Id.
The underlying lawsuit in Pendergraft arose out of the defendants efforts to open and
operate an abortion clinic in Ocala, Florida. Id. at 1200. When Pendergrafts request to the city
and county to provide off-duty law enforcement officers for security was denied, he (along with
the clinic) sued for injunctive relief. Id. at 1201. He then threatened to add a claim for actual
and punitive damages as well as fees and costs based on certain threats that defendants falsely
alleged Spielvogel had received from the Chairman of the County Board of Commissioners. Id.
at 1201-02. Unbeknownst to Spielvogel, his conversations with the Board Chairman had been
taped by the FBI. Id. at 1202. Thus, the defendants in the injunction lawsuit knew that the
allegations, and the supporting affidavits, were false.
Despite the fact that the Pendergraft defendants had gone so far as to make explicit
threats to use false evidence in a damages claim, the Eleventh Circuit reversed their convictions
of conspiracy to commit extortion and mail fraud. Id. at 1212. As to extortion, the Court noted
that [s]everal courts have held [in the civil RICO context] that a threat to file a lawsuit, even if
made in bad faith, is not wrongful within the meaning of the Hobbs Act. [In a]ll of these cases
litigants have included a threat to file a lawsuit as the predicate act of extortion.
Pendergraft, 297 F.3d at 1205 (citing Vemco, Inc. v. Camardella, 23 F.3d 129, 134 (6th Cir.
1994); First Pacific Bancorp, Inc. v. Bro, 847 F.2d 542, 547 (9th Cir. 1988); I.S. Joseph Co., 751
F.2d at 26768; GI Holdings, Inc. v. Baron & Budd, 179 F.Supp.2d 233, 259 (S.D.N.Y. 2001);
Heights Cmty. Cong. v. Smythe, Cramer Co., 862 F.Supp. 204, 207 (N.D.Ohio 1994); Am.
Nursing Care of Toledo, Inc. v. Leisure, 609 F.Supp. 419, 430 (N.D.Ohio 1984). Most of these
17
courts have re-characterized the extortion charges as actions for malicious prosecution and have
held that malicious prosecution is not a RICO predicate act. Id.
The Court explained that because fear of economic loss is an animating force of our
economic system, it is not inherently wrongful. Id. at 1206.9 A threat to litigate was also
not necessarily wrongful for Hobbs Act extortion purposes, because under our system, parties
are encouraged to resort to courts for the redress of wrongs and the enforcement of rights. Id. at
1206 (citing Boothby Realty Co. v. Haygood, 114 So. 2d 555, 559 (Ala. 1959) and 54 C.J.S.
Malicious Prosecution 4 at 525 (1987)).
The crucial question was whether the use of
economic fear via the deliberate, bad faith fabrication of evidence in an effort to induce
the payment of money (while certainly not rightful) was wrongful for purposes of
alleging a Hobbs Act violation. Id. at 1206-08. The Court determined that it was not wrongful.
Id. at 1208.
Despite its grand talk of a massive and multifaceted scheme to exort, the Complaint
features just one meager predicate act of Hobbs Act extortion: Mr. Scherers single phone call to
find out, via an intermediary, whether Drummond might be willing to settle the Underlying
Litigation. Compl. 2, 142, 174. Drummond has not allegedand cannot allegethat this
one phone call involved the wrongful use of actual or threatened force, violence, or fear
sufficient to state a claim under the Hobbs Act. See supra at 9. But even if it had, such a threat
would have been no different and no worse than the Pendergraft defendants attempt to use the
threat of economic fear, based on fabrication of evidence, to induce the payment of
9
Before Pendergraft, the Eighth Circuit held that a threat to frighten [plaintiff] into paying or guaranteeing
[defendants] debts was not criminal extortion. I.S. Joseph Co. v. J. Lauritzen A/S, 751 F.2d 265, 267-68 (8th Cir.
1984). The court could not agree that the threat alleged constituted the infliction of fear for purposes of the
extortion statute even if the threat to sue was groundless and made in bad faith. Such conduct may be tortious
under state law, but we decline to expand the federal extortion statute to make it a crime. Id. at 267.
18
money. Pendergraft, 297 F.3d at 1208. The truth is that this is a much easier extortion case
than Pendergraft.
The Pendergraft court similarly found that absent certain circumstances, litigation
conduct could not serve as the basis of a mail fraud claim. A number of courts have considered
whether serving litigation documents by mail can constitute mail fraud, and all have rejected that
possibility. Id. at 1208 (citing Daddona v. Gaudio, 156 F.Supp.2d 153, 16264 (D.Conn.
2000); Auburn Med. Ctr., Inc. v. Andrus, 9 F.Supp.2d 1291, 1300 (M.D.Ala. 1998); von Bulow v.
von Bulow, 657 F.Supp. 1134, 114246 (S.D.N.Y. 1987); Paul S. Mullin & Assocs., Inc. v.
Bassett, 632 F.Supp. 532, 540 (D.Del. 1986); and Am. Nursing Care of Toledo, Inc. v. Leisure,
609 F.Supp. 419, 430 (N.D.Ohio 1984)). As in the Hobbs Act context, these courts have
rejected this mail-fraud theory on policy grounds, recognizing that such charges are merely
artfully pleaded claims for malicious prosecution. Id. at 1208 (quoting Auburn Med. Ctr.,
Inc., 9 F. Supp. 2d at 1297).
For allegations of mail and wire fraud predicate acts, the inquiry turned on the meaning
of scheme to defraud. While both the mail-fraud and wire-fraud statutes use the phrase
scheme to defraud, neither statute defines what a scheme to defraud is.
Id. at 1208.
Instead, the meaning of scheme to defraud has been judicially defined. Id. at 1208. Courts
have defined the phrase broadly, allowing it to encompass deceptive schemes that do not fit the
common-law definition of fraud.
Id. at 1208 (internal citation omitted).
Nevertheless,
Congress did not strip the word defraud of all its meaning; the word still signifies the
deprivation of something of value by trick, deceit, chicane, or overreaching. Id. at 1208-09
(internal citation omitted). There are limits to the types of schemes that the mail-fraud statute
encompasses. Id. at 1209 (internal citation omitted).
19
The possibility of an unfavorable verdict, based on perjurious testimony, may have

caused [the defendant] to fear the lawsuit. But fear is different from fraud. A scheme to frighten
is simply not criminalized by the mail-fraud statute. Id. at 1209. [I]f deceit, as well as fear, is
intended, then the actions may be criminal. Id. at 1209. But, crucially, because the defendants
knew that they could not deceive the defendants in the underlying litigationbecause the
defendants in the underlying litigation knew that the false allegations were untruethe RICO
defendants could not have had an intent to deceive. Id. at 1209 (emphasis added). Since
there was no intent to deceive, there was no scheme to defraud, and [the] mailing of litigation
documents, even perjurious ones, did not violate the mail-fraud statute. Id. at 1209 (emphasis
added). The Court found that the mail fraud allegations failed as a matter of law. Id. at 1209.
See also Sosa, 437 F.3d at 941 ([L]etters cannot amount to mail fraud where the sender
knows the recipient will not be deceived by the falsehoods.). Because [the false] statements
concerned [plaintiffs] own conduct, [defendant] could not have intended that he would be
deceived by them and was therefore necessarily lacking in the intent requisite to have committed
mail or wire fraud. Id. (citing Pendergraft, 297 F.3d at 1209).10
Surely Drummond, like the defendants in the underlying litigation in Pendergraft, would
take the position that it knows that Defendants false allegations are untrue. Given the
gravity of Defendants allegations, and Drummonds repeated protestations of innocence, how
could it not? But if Drummond knows, and has always known, that any allegation by any
witness, paid or unpaid, that it conspired with Colombian terrorists in the murder of three union
leaders and dozens of innocent civilians must be untrue, then like the Pendergraft defendants,
See also Warnock v. State Farm Mut. Auto. Ins. Co., 833 F. Supp. 2d 604, 609 (S.D. Miss. 2011) (Because the
evidence demonstrates only the transmittal of allegedly false litigation materials, this Court agrees that under
Pendergraft and the related cases, Warnock has not proven the predicate acts of mail or wire fraud. For this reason
alone, Warnock's RICO claims under 1962(c) and (d) must fail.).
10
20
Defendants here could never have had the requisite intent to deceive Drummond, the victim of
the alleged fraud. And the target of the deceit matters. Any intent to deceive the court, though
unsavory and inadvisable, is not sufficient to form a RICO predicate act. As in Pendergraft, if
the Defendants sought to deceive anyone, it was the courts . Defendants allegedly presented
the courts with misleading information and baseless claims in the hope that they would be
fooled into depriving [Plaintiff] of the necessary legal backing to open their business. [Plaintiff]
does not allege and presents no evidence that Defendants at any point sought to deceive it.
Without that intent to deceive, there can be no mail fraud violation. Livingston Downs Racing
Ass'n, Inc. v. Jefferson Downs Corp., 257 F. Supp. 2d 819, 830-31 (M.D. La. 2002).
Drummonds allegations of extortion and of mail and wire fraud fail under Pendergraft.
B.
This Court Should Recognize that Pendergrafts Reasoning Applies Equally

to the Additional Predicate Acts Alleged Here
Two years after Pendergraft, the Eleventh Circuit confirmed that its holding extended
beyond threats of litigation to actual litigation and reaffirmed Pendergrafts reasoning. Raney v.
Allstate Ins. Co., 370 F.3d 1086, 1087-88 (11th Cir. 2004).
In light of our decision in
Pendergraft, we doubt that the filing of a lawsuit could ever be wrongful for the purposes of
RICO. Id. at 1088 (internal citation omitted). In Pendergraft, [w]e noted that courts possess
adequate procedures to distinguish valid claims from invalid claims and held that Congress did
not intend to punish citizens merely for accessing the legal system. We found ourselves
troubled by any use of this federal criminal statute to punish civil litigants. We noted that
allowing litigants to be charged with extortion would open yet another collateral way for litigants
to attack one another. We also expressed concern about transforming every state-law malicious
prosecution action into a federal crime. Raney, 370 F.3d at 1088 (internal citations omitted).
The court also noted that other courts have explicitly applied this reasoning to litigation that has
21
already been filed. Id. at 1088 (citing Deck v. Engineered Laminates, 349 F.3d 1253, 1258
(10th Cir. 2003) (citing Pendergraft and rejecting meritless litigation as a predicate act under
RICO)).
In Pendergraft, the Eleventh Circuit was especially concerned about the effect that
treating allegations of false testimony and other litigation misconduct as extortion or wire fraud
might have on witnesses. The law jealously guards witnesses who participate in judicial
proceedings; witnesses should be unafraid to testify fully and openly. Id. at 1207 (internal
citations omitted). Our judicial system already features sufficient checks to ensure that allegedly
false testimony receives no more weight than it deserves. Because the rigors of crossexamination and the penalty of perjury sufficiently protect the reliability of witnesses, courts
have been unwilling to expand the scope of witness liability, since, by doing so, the risk of selfcensorship becomes too great. Id. at 1207 (internal citations omitted). Though Pendergraft did
not involve allegations of obstruction of justice, bribery, money laundering (based on alleged
bribery), or witness tampering, Defendants urge this Court to recognize that Pendergrafts logic
regarding protection of witnesses from chilling influences applies equally to all allegations of
litigation misconduct. Drummond does its best to dodge Pendergraft by padding its violations
with conclusory allegations of obstruction of justice, money laundering, and so on, and by shying
away from explicit allegations of extortion in its Appendices. But this Court should not ignore
binding Eleventh Circuit precedent because of Drummonds artful pleading.
Without a doubt, claims for obstruction of justice, bribery, money laundering, and
witness tampering could be RICO predicate acts, if properly pleaded in the right context. For
example, a drug smuggler who bribed or intimidated witnesses in a federal prosecution based on
his larger criminal enterprise could be guilty under RICO for those predicate acts, among others.
22
But where, as here, the alleged pattern of racketeering activity is itself nothing more than a
lawsuit or lawsuits, and the plaintiff cannot identify any predicate acts that are not themselves
intimately related to Defendants petitioning activities, RICO must be construed carefully
and narrowly to avoid reaching constitutionally protected litigation conduct. Sosa, 437 F.3d at
934. The Eleventh Circuit has recognized that when the plaintiff does not allege any facts
independent of plaintiffs pre-litigative and litigative activities there is no predicate act
that constitutes an independent violation of federal law. McGuire Oil. Co. v. Mapco, Inc., 958
F.2d 1552, 1561 (11th Cir. 1992) (emphasis added) (finding that [n]othing in any case
suggests that a conspiracy to use in good faith the adjudicative process to achieve anticompetitive goals violates the Sherman Act).
Following McGuire, a district court in the
Eleventh Circuit more recently found that pre-litigative and litigative activity is
constitutionally protected from state law claims for deceptive trade practices, among other
claims. Atico Intern. USA, Inc. v. LUV NCare, Ltd., No. 09-60397-CIV-COHN, 2009 WL
2589148, at *1 (S.D. Fla. Aug. 19, 2009). This Court should find that this alleged pattern of
racketeering activity, consisting entirely of litigation conduct and nothing more, cannot support a
civil RICO suit.
This Court must not allow Drummond to use civil RICO as a blunt instrument for
collateral attack. If courts allow RICO suits like this one to go forward, they will open the gates
to a flood of civil RICO suits by powerful litigants seeking retaliation against litigation
conduct that is as American as apple pie. See I.S. Joseph Co., 751 F.2d at 267. If a suit is
groundless or filed in bad faith, the law of torts may provide a remedy. Resort to a federal
criminal statute is unnecessary. Id. at 267-68. Allowing suits like this one to go forward would
23
have an inevitable chilling effect on those who seek justice in civil litigation. It should be
dismissed.
C.
Any Sham Litigation Exception Does Not Apply
Drummond may argue that First Amendment protection is unavailable because the
Underlying Litigation is a sham. See Prof'l Real Estate Investors, Inc. v. Columbia Pictures
Indus., Inc., 508 U.S. 49, 51 (1993). Any such suggestion would be an insult to this Court,
which has presided over the Underlying Litigation since 2009.
Further, the Underlying
Litigation does not meet the Supreme Courts two-part definition of sham litigation. Id. at
60-61. First, a sham lawsuit must be objectively baseless. Id. at 60. Second, the baseless
lawsuit must also be an attempt to interfere directly with the business relationships of a
competitor. Id. at 60-61. A lawsuit is not a sham unless it satisfies both prongs of the two-part
test. BE & K Const. Co. v. N.L.R.B., 536 U.S. 516, 526 (2002) (For a suit to violate the antitrust
laws, then, it must be a sham both objectively and subjectively.) (emphasis added). Because the
Underlying Litigation is not objectively baseless, it fails at least the first part of the Supreme
Courts two-part test, and therefore cannot be considered a sham.
Drummond cannot claim with a straight face that the Underlying Litigation meets the
objective prong of the two-part test for sham litigation.
Unsuccessful lawsuits are not
necessarily shams, and [a]nalyzing whether the lawsuits were objectively baseless requires a
look at the outcomes of each case. In re Terazosin Hydrochloride Antitrust Litig., 335 F. Supp.
2d 1336, 1357 (S.D. Fla. 2004). The first action in the Underlying Litigation, Romero, went all
the way to a jury verdict, surviving summary judgment on claims of extrajudicial killing
pursuant to the Alien Tort Claims Act under a theory of aiding and abetting liability. Romero,
Dkt. Nos. 329, 408, 486.
Balcero survived multiple motions to dismiss, but was lost on
24
summary judgment because of an intervening Supreme Court decision that this Court compared
to an earthquake that has shaken the very foundation of Plaintiffs claims. Balcero, Dkt. Nos.
31, 44, 142, 455 at p. 1.11 Baloco was dismissed at the summary judgment stage on grounds of
res judicata. Baloco at Dkt. No. 95. Melo is still an active case. See Melo, Dkt. Nos 51, 53.
The fact that the Underlying Litigation has not been ultimately successful is not an
indication that it was a sham. [W]hen the defendant has lost the underlying litigation, a
court must resist the understandable temptation to engage in post hoc reasoning by concluding
that an ultimately unsuccessful action must have been unreasonable or without foundation.
The court must remember that even when the law or the facts appear questionable or unfavorable
at the outset, a party may have an entirely reasonable ground for bringing suit. Prof'l Real
Estate Investors, 508 U.S. at 61 n. 5 (internal citations omitted). See also Andrx Pharm., Inc. v.
Elan Corp., PLC, 421 F.3d 1227, 1234 (11th Cir. 2005) (holding that even though plaintiff in
allegedly sham patent litigation had not won, it had made a winning argument against
contentions of patent invalidity and therefore its claims were not objectively baseless); In re
AndroGel Antitrust Litig. (No. II), 888 F. Supp. 2d 1336, 1344 (N.D. Ga. 2012) (Plaintiffs must
satisfy a heavy burden to show that the Underlying Litigation was objectively baseless. Under
this exacting standard, the plaintiff's case in the Underlying Litigation must have had no
objective foundation.) (internal citations omitted).
Unless Drummond can show that the Underlying Litigation was objectively baseless
which it cannotthis Court must not inquire into Defendants subjective motivation in
bringing those lawsuits. Prof'l Real Estate Investors, 508 U.S. at 60 (Only if challenged
In determining whether an action was objectively baseless, the Court must look to the state of the law at the
time of filing. See In re Terazosin Hydrochloride Antitrust Litigation, 335 F.Supp.2d at 1359-64 (evaluating
whether underlying patent infringement suits were objectively baseless in light of an intervening change in the law
governing application of the on-sale bar and concluding that they were not).
11
25
litigation is objectively meritless may a court examine the litigants subjective motivation.).
The Supreme Court has explicitly rejected a purely subjective definition of sham and held
that litigation is not a sham merely because a subjective expectation of success does not
motivate the litigant. Id. at 57-58 (We now hold that an objectively reasonable effort to
litigate cannot be sham regardless of subjective intent.). In other words, Defendants are not
required to show that the Underlying Litigation was not an attempt to interfere directly with
[Drummonds] business relationships in order to defeat the sham litigation exception. Showing
that the Underlying Litigation was not objectively baseless is enough. The sham exception
does not apply.
D.
After Pendergraft, District Courts in the Eleventh Circuit Have Properly

Characterized Claims Based on Litigation Misconduct as Malicious
Prosecution, Not Extortion
None of the above should be understood to suggest that victims of litigation misconduct
are or should be left in want of a remedy in the Ninth or Eleventh Circuits or anywhere else. For
many, the answer is a tort action for malicious prosecution. See Levitan v. Patti, No. 3:09CV321
MCR MD, 2011 WL 1299947, at *16 (N.D. Fla. Feb. 8, 2011) (citing Pendergraft, 297 F.3d at
120607) (The heart of plaintiffs claims in this section is that defendants made false statements
to further litigation and filed false criminal charges. These acts are properly characterized as
malicious prosecution, not extortion, and malicious prosecution is not a RICO predicate act.).
And where a Plaintiff could have brought suit against the defendants for malicious prosecution,
[t]here is no reason to expand the scope of mail and wire fraud statutes to include attempts to
obtain a third partys property by deceiving the courts , especially when independent causes
of action exist to serve the same end. Livingston Downs Racing Ass'n, Inc. v. Jefferson Downs
Corp., 257 F. Supp. 2d 819, 831 (M.D. La. 2002) (emphasis added).
26
When a litigant misbehaves in court, whether by deliberately falsifying evidence or

otherwise, [w]e trust the courts, and their time-tested procedures, to produce reliable results,
separating validity from invalidity, honesty from dishonesty. While our process is sometimes
expensive, and occasionally inaccurate, we have confidence in it. When a citizen avails himself
of this process, his doing so is not inherently wrongful. Pendergraft, 297 F.3d at 1206-07. In
other words, it was and is this Courts responsibility and prerogative to use the procedures
available to it in the Underlying Litigation to ensure the fair and efficient administration of
justice, and Drummond has never alleged that the Court failed to do so. Nor has Drummond
alleged that it was in some way unfairly prevented from protecting its own interests, including
seeking attorney fees, in the Underlying Litigation. Drummond also cannot deny that in the
event of an adverse judgment procured by any alleged fraud in the Underlying Litigation, it
would have had recourse to Federal Rule of Civil Procedure 60(b)(3). With such sanctions and
remedies available, Drummond had no need to avail itself of the RICO statute.12 Its claims
should be dismissed.
E.
The Pendergraft Analysis Survives Even in States with Near-Absolute

Litigation Immunity
Florida law features an explicit litigation privilege, which provides that absolute
immunity must be afforded to any act occurring during the course of a judicial proceeding,
regardless of whether the act involves a defamatory statement or other tortious behavior so
long as the act has some relation to the proceeding.
Levin, Middlebrooks, Mabie, Thomas,
Mayes & Mitchell, P.A. v. U.S. Fire Ins. Co., 639 So. 2d 606, 608 (Fla. 1994). In evaluating the
12
This is not to say that any attempt by Drummond to impose sanctions would likely have been successful. The
Pendergraft court noted that litigants may be sanctioned for only the most frivolous of actions. These sanctions
include tort actions for malicious prosecution and abuse of process, and in some cases recovery of attorney's fees,
but even these remedies are heavily disfavored because they discourage the resort to courts. Pendergraft, 297 F.3d
at 1206 (emphasis added).
27
effect of the litigation privilege, the Eleventh Circuit has bolstered and provided further insight
into its reasoning in Pendergraft. See Green Leaf Nursery v. E.I. DuPont De Nemours & Co.,
341 F.3d 1292, 1296 (11th Cir. 2003).
Green Leaf Nursery alleged that after settling their case, they discovered that
[Defendant] had engaged in a massive scheme of perjury, falsification of evidence, and
fraudulent concealment of evidence to induce themselves and other plaintiffs to settle their
claims for less than the claims fair value. Green Leaf Nursery, 341 F.3d at 1296. The court
noted that Floridas near-absolute litigation immunity does not leave parties without a remedy
for misconduct occurring during or relating to litigation. For example, a trial judge has the
inherent power to do those things necessary to enforce its orders, to conduct its business in a
proper manner, and to protect the court from acts obstructing the administration of justice.
Green Leaf Nursery, 341 F.3d at 1302 (citation omitted). Further, Plaintiffs could have filed a
contempt motion before the trial court in the Underlying Litigation as a remedy for [Defendants]
misconduct. Plaintiffs chose instead to pursue fraud actions in subsequent litigation. Green
Leaf Nursery, 341 F.3d at 1302 (internal citation omitted). Even though Florida provides limited
alternatives to a party claiming litigation misconduct, the Eleventh Circuit nevertheless affirmed
dismissal of the related RICO claim. Id. at 1296.
F.
Despite Surface Similarities, This Case is Nothing Like Chevron v. Donziger
This Complaint is an obvious attempt to wedge the facts of the Underlying Litigation into
the very different shoe of Chevron Corp.s RICO case against attorney Steven Donziger, which
recently resulted in a favorable judgment for Chevron barring enforcement of an enormous
Ecuadorian judgment in the United States. See Chevron Corp. v. Donziger, 974 F.Supp.2d 362
(S.D.N.Y. 2014). But Terry Collingsworth is not Steven Donziger, and this case is not Chevron.
28
When Chevron brought suit, attorney-defendant Donziger was preparing to enforce a

multibillion dollar judgment obtained against Chevron in a corrupt foreign judicial system that
was rife with intimidation of judges, including by the President of Ecuador himself, who publicly
favored the plaintiffs in the underlying case and took drastic steps to undermine the
independence of the judiciary. Id. at 383-84; 608-617. The Donziger court went so far as to find
that Ecuador, at no time relevant to this case, provided impartial tribunals or procedures
compatible with the due process of law. Id. at 617.
To secure his multibillion dollar judgment, Donziger engaged in a prolonged, deliberate
schemeexplicitly documented in a series of documentary film outtakes, see, e.g., id. at 393-94,
as well as in Donzigers own personal journal, see, e.g., id. at 420that included bribery,
threats, and coercion of judicial officials and purportedly neutral experts. Id. at 384. The
Donziger court found that Donziger and his team forged one supposedly neutral experts report
and bought and paid for another. Id. at 412-14; 422-37. The Donziger court also found that he
bribed the presiding judge and hired a disgraced former judge to ghostwrite the final judgment
(in a jurisdiction where parties are not even permitted to submit proposed orders). Id. at 482535; 499.
The situation here is, to say the least, very different.
Drummond has been almost
completely victorious in each of the lawsuits that make up the Underlying Litigation. See supra
n. 1. The Underlying Litigation was prosecuted in the United States District Courts, surely a
model worldwide for a functioning and fair judicial system. To the extent that the Underlying
Litigation was ill-founded, Drummond has always had available to it all the usual remedies and
sanctions for frivolous litigation, including Rule 11 sanctions, Rule 37 sanctions, sanctions
pursuant to the inherent power of the Court, sanctions under 28 U.S.C. 1927, a Rule 54 motion
29
for attorney fees and costs, or a motion pursuant to Rule 60 to set aside the judgment. The Court
and (in Romero) the jury had a full opportunity to evaluate the credibility of the purportedly
false evidence submitted in support of the claims in the Underlying Litigation, to the extent
that such evidence came into play.
Drummond has suffered no harm that is in any way
comparable to the multi-billion dollar judgment entered against Chevron.
Furthermore,
Donziger is on appeal and could itself shortly become bad law. And in light of Pendergraft, it is
not at all clear that the Eleventh Circuit would affirm the Chevron decision, even on its far more
extreme facts.
The Court should also note that Donziger featured testimony of a key witness who
received assistance paymentsfrom Chevron. The Ecuadorian litigation underlying Donziger
was initially assigned to Judge Alberto Guerra Bastidas (Guerra), then the president of the
Lago Agrio court. Id. at 392. Ultimately, Guerra was removed from the bench in May 2008, id.
at 502, after allegations of misconduct. Id. at 505 n. 7. Guerra himself admitted to selling his
testimony and influence to the highest bidder, and acknowledged that since being removed from
the bench, his arrangements with the presiding judge were his main source of income. Id. at
518-19; 505. He was the beneficiary of what amounts to a private witness protection program
created for him by Chevron. Id. at 504. Chevron paid to relocate Guerra and his family from
Ecuador to the United States, and continued to pay him $10,000 a month in living expenses at
least through trial. Id. at 517. Chevron also paid for Guerras and his familys health insurance,
hired him a lawyer, and leased him a car. Id.
Guerra was worth it. He was Chevrons star witness, and Judge Kaplans decision relied
heavily on his testimony. See id. at 533-35. Acknowledging that Guerras credibility [was] not
impeccable, id. at 483, Judge Kaplan noted that there are no saints here, id. at 504, and went
30
on to credit Guerras allegations that the Donziger plaintiffs procured the final judgment in their
favor by bribing the sitting judge to sign an order they had Guerra ghostwrite. See id. at 534.
Like Guerra, the witnesses whose families received assistance payments in the
Underlying Litigation here are no saints, and like Guerra, they gave testimony whose
credibility could be tested by corroboration and other traditional means. As in Chevron, there
was nothing wrongful about providing assistance to those witnesses to offset the dangers they
brought on themselves and their families by agreeing to provide truthful testimony in this Court.
Unlike Chevron, which suffered a multibillion dollar injury in the form of a judgment procured
by fraud, Drummond cannot show that it was harmed by those witness assistance payments in
any way.
III.
The Only Cognizable RICO Injury Drummond Alleges is Barred by RICOs FourYear Statute of Limitations, and it Therefore Lacks Standing to Sue
Not only does Drummond fail to allege a pattern of racketeering activity that meets
Eleventh Circuit and constitutional standards, it has filed suit far too late.
Defendant
Collingsworth filed his first lawsuit against Drummond fourteen years ago, alleging the same
human rights violations the Underlying Litigation plaintiffs have continued to allege ever since.
The moment Drummond received its first invoice for attorney fees to defend that first suit, its
RICO injury began. Only now, after spending millions more in attorney fees defending the
same and similar suits, does Drummond recognize its injury and decide to pursue a remedy.
Drummond has waited too long.
In enacting the civil RICO statute, Congress conferred standing to sue on [a]ny person
injured in his business or property by reason of a violation of section 1962 of this chapter. 18
U.S.C. 1964(c) (emphasis added). The Eleventh Circuit views RICO standing and proximate
cause as overlapping inquiries: [T]he by reason of requirement contained in 1964(c)
31
implicates two concepts: (1) a sufficiently direct injury so that a plaintiff has standing to sue; and
(2) proximate cause. Despite some significant overlap, we address the proximate cause and
standing concepts separately. Williams v. Mohawk Indus., Inc., 465 F.3d 1277, 1287 (11th Cir.
2006) (emphasis added). Only a sufficiently direct injury confers standing to sue. Id. The
Eleventh Circuit has recognized that [t]he words business or property are, in part, words of
limitation. Grogan v. Platt, 835 F.2d 844, 846 (11th Cir. 1988) (emphasis added).
Drummonds attempts to allege injury consist of the following damages to its
reputation and business interests: more than $10 million in legal costs,13 Compl. 7;
enormous damage to Drummonds business interests and damage to its goodwill and
reputation, Compl. 8; damage to Drummonds business interests in Europe, Compl. 157;
and inordinate time and expense [spent] dealing with the European response to PAXs antiDrummond campaign, Compl. 169. Almost none of these injuries are quantified in any of
the 225 paragraphs or five Appendices of the Complaint. Only the more than $10 million in
legal costs, Compl. 7, Drummond claims to have spent defending itself, primarily against the
allegations in Balcero, is a relatively concrete allegation even arguably sufficient to confer RICO
standingthough it too fails for other reasons.
A.
Drummonds Reputational and Intangible or Speculative Business

Injuries are Insufficient to Confer RICO Standing
Drummond alleges that its goodwill and reputation have been injured by Defendants
activities. Reputational injuries, however, cannot confer RICO standing. Personal injury,
including damage to reputation, is not an injury to business or property within the meaning
of 18 U.S.C. 1964(c). See Hamm v. Rhone-Poulenc Rorer Pharm., Inc., 187 F.3d 941, 954
13
Drummond fails to allege which of the plaintiff Drummond entities, Drummond Company, Inc. or Drummond
Ltd., incurred and/or paid these legal costs.
32
(8th Cir. 1999) (holding that employees of a pharmaceutical company did not have standing to
assert RICO claims based on damage to their business reputations). See also City of Chicago
Heights, Ill. v. Lobue, 914 F. Supp. 279, 285 (N.D. Ill. 1996).
In Chicago Heights, the
reputational injury was personal for RICO purposes even though the victim was not a natural
person but a city. Id. (As losses, the City cites the bad press it received as a locus of crooked
dealing and corrupt officials, and an unspecified amount of royalties due . Neither of these are
the type of direct losses that are recoverable under RICO.). A reputational injury that results in
lost future business is also not cognizable under RICO. [G]eneralized reputational harms ,
including the risk of future lost business commissions, are too speculative to constitute an injury
to business or property. Kimm v. Chang Hoon Lee & Champ, Inc., 196 F. App'x 14, 15 (2d Cir.
2006) (internal citation omitted).
Similarly, Drummonds allegations of enormous damage to [its] business interests
and inordinate time and expense are insufficiently definite to be considered RICO injuries. An
alleged injury must be supported by concrete facts or data in the complaint. Simpson v.
Sanderson Farms, Inc., 744 F.3d 702, 710 (11th Cir. 2014). [I]ntangible propery injuries are
insufficient to confer RICO standing.
Adell v. Macon Cnty. Greyhound Park, Inc., 785
F.Supp.2d 1226, 1241 (M.D. Ala. 2011) (collecting clear holdings from the Fifth, Eighth and
Ninth circuits that intangible property injuries are not RICO injuries). See also Regions Bank v.
J.R. Oil Co., LLC, 387 F.3d 721, 730 (8th Cir. 2004) (denying RICO standing to a secondary
lienholder in a bankruptcy where the priority lienholders held complete claims over the only
assets because [i]njury to these intangible property interests is not injury that may support
standing to bring RICO claims). Because Drummonds damage to its business interests is
33
insufficiently concrete or tangible, it cannot be an injury sufficient to support RICO

standing.
A RICO injury must be a concrete financial loss, Patterson v. Mobil Oil Corp., 335
F.3d 476, 492 n. 16 (5th Cir. 2003), not mere injury to a valuable intangible property interest.
Maio v. Aetna, Inc., 221 F.3d 472, 483 (3d Cir. 2000) (internal citation omitted). The Maio court
considered whether plaintiffs who claimed to have paid too much for health insurance failed to
allege RICO injury. Id. The court held that appellants cannot establish that they suffered a
tangible economic harm compensable under RICO unless they allege that health care they
received under Aetna's plan actually was compromised or diminished as a result of Aetna's
management decisions challenged in the complaint. Maio, 221 F.3d at 488. [T]he nature of
appellants' property interests at stake is [a] contractual right. Maio, 221 F.3d at 489. The court
asked, what is the external event or condition which would cause appellants to have suffered
economic harm, and have appellants alleged facts demonstrating that the necessary injurycausing event has occurred? Id. at 490. Because the necessary injury-causing event had not
yet occurred, plaintiffs lacked standing. Id. at 490. Similarly, Drummond has not pointed to any
injury-causing event that has led to any actual, quantifiable harm to its business interests in
Europe or elsewhere. See also Oscar v. Univ. Students Co-op. Assn, 965 F.2d 783, 786 (9th Cir.
1992) (finding that plaintiff, a neighbor of drug-dealing Berkeley students, who alleged no outof-pocket expenditures as a direct or indirect result of the racketeering activity suffered no
financial loss that which would be compensable under RICO, noting that the alleged loss was
purely speculative).
Aside from its claim for legal costs, Drummonds allegations of injury consist of vague,
non-specific allegations of reputational injury, as well as unrealized injury to unspecified future
34
business interests. As such, they are not concrete enough to confer RICO standing. To the
extent that Drummond attempts to satisfy the requirement of RICOs civil enforcement provision
that it show an injur[y] in [its] business or property, 18 U.S.C. 1964(c), via these allegations,
its claims should be dismissed.
B.
To the Extent Drummonds RICO Claim Rests on Its Legal Fees Injury, it
is Barred by the Injury Discovery Rule
The only quantifiable injury Drummond alleges consists of attorneys fees spent
defending itself against three of the four cases in the Underlying Litigation: more than $10
million overall, $8.5 million of which was spent on the Balcero case. Compl. 7. Drummond
should have discovered this injury in 2003, when it began incurring legal fees to defend the
Romero case. On this basis alone, to the extent that Drummond attempts to satisfy RICOs
injury requirement with its legal costs, its claims are barred by RICOs statute of limitations.14
1.
Drummond was Injured and Discovered Its Injury in 2003
As discussed above, only Drummonds alleged $10 million in legal costs even arguably
meets the RICO injury standard.
Civil RICO claims are subject to a four-year statutory
limitations period, Agency Holding Corp. v. Malley-Duff & Assocs., Inc., 483 U.S. 143, 156
(1987), which begins to run when the plaintiff discovered or reasonably should have discovered
his injury. This is the injury discovery rule announced in Rotella v. Wood, 528 U.S. 549, 55354 (2000). See also Powell v. Gorham, No. 2:13-CV-0055-LSC, 2013 WL 3151632, at *18
(N.D. Ala. June 14, 2013) (The statute of limitations begins to run on the date that a plaintiff
has knowledge of his injury.). If Drummond was injured in that it was forced to pay legal
costs, that injury began in or around March 2003approximately twelve years before it filed this
In fact, Drummonds alleged reputational and business injuries may also be time-barred, but they are too
vague to bear analysis as required under the injury discovery rule. This deficiency only underscores why they are
insufficiently definite to confer standing.
14
35
RICO claimwhen it paid its first bill for attorney fees to defend itself against the first suit in
the Underlying Litigation (Romero).15 It discovered its imminent injury slightly earlier, when it
received that first bill.
2.
Failure to Discover the Source of Its Injury in Time Does Not

Rescue Drummond from the Statute
Under Rotella, there is no question that discovery of the injury, not discovery of the
other elements of a claim, is what starts the clock. Rotella, 528 U.S. at 555. In other words,
Drummonds clock started in or around March 2003, when it received its first legal bill.
Having discovered its injuryoutgoing attorney fees to defend the Underlying Litigation
Drummond was immediately put on inquiry notice that it must begin to investigate the source
of its injury or risk time preclusion. See Dysart v. BankTrust, No. CV-11-RRA-1917-S, 2012
WL 2577534, at *10 (N.D. Ala. Apr. 12, 2012) (In the RICO context, inquiry notice
controls.). Put another way, the limitations period begins to run when the plaintiff is placed on
notice that something is wrong. Blackburn v. Calhoun, No. 207CV166, 2008 WL 850191, at
*23 (N.D. Ala. Mar. 4, 2008) aff'd, 296 F. App'x 788 (11th Cir. 2008). At that point, the plaintiff
has a duty to commence inquiry. Id. From that time, the plaintiff has four years from the
date he first sensed he should inquire to file [the] case. Id.
The Eleventh Circuit has emphasized that the limitations period begins to run at the point
of discovery of injury, regardless of whether the plaintiff ever discovers the pattern of
racketeering activity. [T]he limitations period for a civil RICO action begins to run when the
injury was or should have been discovered, regardless of whether or when the injury is
discovered to be part of a pattern of racketeering. Maiz v. Virani, 253 F.3d 641, 676 (11th Cir.
Even accepting Drummonds unexplained decision to exclude Romero from the alleged multifaceted criminal
campaign, Compl. 2 n.1, its injury cannot have begun later than March 2009, when it began paying attorney fees
to defend Baloco. Similarly, Drummond can make no credible argument that it did not discover its injury at that
time.
15
36
2001) (internal citation omitted) (emphasis added). As the Supreme Court explained, [t]he fact
that difficulty in identifying a pattern is inherent in civil RICO only reinforces our
reluctance to parlay the necessary complexity of RICO into worse trouble in applying its
limitations rule. Rotella, 528 U.S. at 559 (2000) (internal citation omitted). RICO is a civil
enforcement scheme aimed at rewarding the swift. Rotella, 528 U.S. at 559.
Before Rotella was decided, this Circuit had already held that the civil RICO statute of
limitations would not be tolled for plaintiffs who did not investigate the problems [of which
they now complain] or try to ascertain their problems cause. The limitations period for civil
RICO claims was not tolled because the [plaintiffs] were not reasonably diligent in trying to
discover their cause of action. McCaleb v. A.O. Smith Corp., 200 F.3d 747, 752 (11th Cir.
2000) (citing Klehr v. A.O. Smith Corp., 521 U.S. 179, 194, 117 S.Ct. 1984, 138 L.Ed.2d 373
(1997) (lack of reasonable diligence precludes tolling of statute of limitations based on
fraudulent concealment)).
[P]rotection of the non-diligent plaintiff is not the rule in civil RICO cases. Blackburn,
2008 WL 850191 at *23 (declining to casually invoke equitable tolling).
It makes no
difference, for limitations purposes, when Drummond may have discovered the so-called
violations it accuses as predicate acts. This is true even when, as alleged here, the pattern of
predicate acts may be complex, concealed, or fraudulent. Rotella, 528 U.S. at 556 (2000)
(emphasis added). Rotella was untroubled by [t]he fact that a considerable effort may be
required before a RICO plaintiff can tell whether a pattern of racketeering is demonstrable. The
Court was also unconcerned by the effect of the RICO plaintiffs ignorance of the underlying
RICO pattern on his ability to investigate the cause of his injuries. Rotella, 528 U.S. at 55657. Even though Defendants alleged predicate acts involve alleged concealment of and alleged
37
misrepresentations regarding witness payments, therefore, it was not discovery of those acts that
started the limitations clock. Rotella leaves no doubt that the connection between civil RICO
and fraud [is] an insufficient ground for recognizing a limitations period beyond four years.
Rotella, 528 U.S. at 557. The clock starts with injury.
3.
The Underlying Litigation Pleadings Gave Drummond More Than

Ample Notice that it Must Inquire into the Source of its RICO
Injury
The pleadings in three of the four lawsuits in the Underlying Litigation, Romero, Balcero,
and Baloco (the Underlying Pleadings), the first of which was filed twelve years ago, contain
more than enough information to put Drummond on notice that it was being forced to spend
money defending itself against allegations that it collaborated with the so-called United SelfDefense Forces of Colombia (the AUC) in the murders of the three union leaders and scores
of innocent civilians.16 Some of the allegations in the Underlying Pleadings have a specific,
named, source, and some do notbut all of them are set out with sufficient clarity and
specificity to put Drummond on clear notice of the nature of the allegations against which it
would have to spend legal fees defending itself.
In March of 2003, Defendant Collingsworth filed the Romero case against Drummond,
including allegations that it collaborated with Colombian paramilitary organizations in the
murder of trade union leaders for the purposes of protecting its business interests. See, e.g.,
Romero, Dkt. No. 1, 3 (Valmore Locarno Rodriquez, Victor Hugo Orcasita Amaya, and
Gustavo Soler Mora were murdered in 2001 by paramilitary agents working for [Drummond]
in a campaign to eliminate effective leaders of the trade union representing Drummond workers,
16
In considering this Motion to Dismiss, the Court may take judicial notice of the pleadings in the Underlying
Litigation, the contents of whichas distinct from the truth of the allegations pleadedare not subject to
reasonable dispute and can be accurately and readily determined from sources whose accuracy cannot reasonably
be questioned. See Fed. R. Evid. 201(b)(2); Bryant v. Avado Brands, Inc., 187 F.3d 1271, 1278 (11th Cir. 1999).
38
and to intimidate other workers from joining the union or assuming a union leadership
position.). Having become aware of these false allegations, and the injury they would cause
in the form of legal costs spent in its defense, Drummond had a responsibility to investigate the
source and foundation of the claims.
The Romero plaintiff alleged that one of the eventually murdered union leaders, Gustavo
Soler, had publicly denounced the murders of Locarno and Orcasita and publicly stated his
belief that someone at the La Loma mines must have told the paramilitaries which specific bus
was carrying them on the fateful night of March 12, 2001. Romero, Dkt. No. 1, 45. The
plaintiff himself alleged that in May 2002, he heard a Drummond executive threaten[] that
union leaders who make demands were wearing their own tombstones on their backs. He also
learned that (Ret.) Colonel Edgar Ruis Garzon, a security officer for the Drummond Defendants,
compiled a list of trade union leaders who were viewed as problems by the company, and he
gave the list to the paramilitaries working for Drummond. Romero, Dkt. No. 1, 48. The
plaintiff also alleged that the Colombian Administrative Department of Security (DAS)
informed him that there was little or nothing they could do to guarantee his safety if he
continued working at Drummond. They offered to place him in the internally displaced
category, and assist him to go into hiding. On October 11, 2002, Plaintiff officially went into
hiding with assistance from the DAS. Romero, Dkt. No. 1, 49. The Romero Complaint also
repeatedly referred to the alleged business relationship between Drummond and the AUC
paramilitaries. Romero, Dkt. No. 1, 60, 65. For example, [a]fter the murders of Locarno,
Orcasita and Soler, no action was taken to provide security for the remaining union leaders, and
no action [w]as taken to terminate the business relationship between Drummond and the AVC
paramilitaries. Romero, Dkt. No. 1, 65 (emphasis added).
39
Drummond cannot deny that it was on notice, as early as 2003, that it would be forced to
defend a lawsuit alleging that it collaborated with the AUC in the 2001 killings of Locarno,
Orcasita, and Soler. It was on notice that it had been accused of entering into a business
relationship involving payments to the AUC (which accusation it now claims was utterly
untrue) and that certain witnesses, including Soler and the Romero plaintiff himself, had made
statements supporting those allegations. Drummond will surely disagree. But to the extent that
the six-year effort Drummond expended defending the Romero litigation was not enough to put it
on notice that it should look into the source of the injury of which it now complains, the filings
of Baloco and Balcero in March and May, respectively, of 2009 certainly were.
The initial pleadings in both Baloco and Balcero put Drummond on notice no later than
May 2009 that despite its claim that it has never paid Colombian paramilitaries, or any other
illegal group in Colombia, Compl.
7, it would be forced to pay legal fees to defend
fraudulent lawsuits and false allegations, Compl. 2, 7, 8, based on testimony of

eyewitnesses who alleged that it paid the AUC to kill Locarno, Orcasita, and Soler and to
massacre dozens of additional Colombian civilians. The foundation of some of the false
allegations is no mystery, as the source is named:
Indeed, Rafael Garcia, a former DAS official, has stated under oath that the DAS
worked closely with the AUC [and] that as a DAS official he witnessed Drummond
making payments to the AUC to murder the union leaders at Drummond. Balcero, Dkt.
No. 1, 104 (emphasis added).
Rafael Garcia witnessed the payment of monies by an individual he believed to be

then Drummond Ltd. President Augusto Jimenez to Jorge Castro Pacheco, a sitting
Colombian Senator and a representative of the AUC Northern Bloc commander Jorge
Cuarenta. It was clear that the exchange of money was in return for the AUC's
agreement to carry out the killings of Valmore Locarno and Victor Orcasita. Baloco,
Dkt. No. 1, 47.
In early 2001, Garcia attended a meeting at the Hotel Sicarare in Valledupar with
Jorge Castro Pacheco, 3rd succentor to Roberto Perez, a Senator from Sucre,
40
Colombia. Also in attendance was Guillermo Sanchez Quintero, who at the time was
Mayor of Ariguani and Alfredo Araujo, who was Drummonds Director of Community
Relations. At this meeting, Garcia witnessed Defendant Araujo give Jorge Castro
Pacheco a suitcase filled with money. Garcia heard Defendant Araujo say to Jorge
Castro Pacheco that the money was to be given to Jorge 40 to carry out the killings of
certain union leaders at Drummond. Defendant Araujo specifically said that he
wanted the AUCs help with these guys that were causing problems. Balcero, Dkt.
No. 1, 6C. See also id., Dkt. No. 1, 115.
Recently, Salvatore Mancuso, who became the head of the AUC after Castano was
killed (or disappeared), specifically testified that Drummond had paid the AUC to
assassinate the top union leaders at the Drummond coal mine in Cesar Province,
Colombia. Balcero, Dkt. No. 1, 6.
For others, the inclusion of specific names, places, dates, and/or quotations would
reasonably lead Drummond to look into the source of the false allegation and investigate the
credibility and motivation of the witness or witnesses making the claims.
[T]he President of the La Loma mines, Defendant Augusto Jimenez, made veiled threats
against the union leaders, telling them on several occasions that the fish dies from
opening his mouth. Baloco, Dkt. No. 1, 44. See also Romero, Dkt. No. 1, 38.
The paramilitaries boarded the bus and asked for Locarno and Orcasita by name, saying
that these two had a problem with Drummond. Locarno was pulled off the bus
and shot in the head several times in front of the other workers. Orcasita was tied up
and thrown in the paramilitaries vehicle. He was found dead by the side of the road
several hours later, shot in the head. Baloco, Dkt. No. 1, 50.
Defendant James Atkins, who was the Director of Security for Drummond in Colombia
was present in November, 2000 at a meeting between Drummond officials and top
AUC leaders. Defendant Atkins was accompanied by Defendant Araujo and Jaime
Blanco... For the AUC, Jorge 40 was present, along with Oscar Jose Ospino Pacheco,
alias Tolemaida, and several other armed AUC members. At this meeting, Defendant
Atkins, on behalf of Drummond, approved a payment to the AUC for the assassination of
the top leaders of the Drummond union, including Valmore Locarno Rodriquez
(hereinafter Locarno) and Victor Hugo Orcasita Amaya (hereinafter Orcasita). Balcero,
Dkt. No. 1, 6B.
At a subsequent meeting in early May, 2001, Defendants Atkins and Araujo met again
with the top leaders of the AUC, including Jorge 40, Tolemaida, Don Luis, and several
AUC operatives who worked closely with Jorge 40, including Kener, EI Chino, EI Toro,
Samario, Machoman, and 05. The meeting was held at a farm on the road between
Bosconia and Plato. In front of the entire group, including Atkins and Araujo, Jorge 40
41
congratulated Tolemaida for the successful operation of executing the two Drummond
union leaders Locarno and Orcasita. Balcero, Dkt. No. 1, 116.
At this meeting Drummond, through Atkins and Araujo, made an agreement with Jorge
40 to make a large cash payment to the AUC of approximately $1.5 million (U.S.) and
regular monthly payments of approximately $100,000 (U.S.) to continue to support the
AUC troops and equipment for the Juan Andres Alvarez Front to provide security and
other services for Drummond. This additional funding was to allow the Juan Andres
Alvarez Front to maintain a permanent base and to have the arms and equipment
necessary to provide Drummond's rail line with ongoing security. Balcero, Dkt. No. 1,
117.
[I]t was common knowledge in Colombia that the highest levels of the AUC, including
Jorge 40, planned the murders of the Drummond union leaders at the behest of the
Drummond Defendants. Baloco, Dkt. No. 1, 10-17 (emphasis added).
These are simply a few examples of allegations that should have put Drummond on
notice well before March 2011 of the injuryattorney fees spent defending false claims of
human rights violations in Colombiait claims here. Further, Drummond alleges that the
Balcero case survived dismissal at the pleadings stage based almost exclusively on the false
accusations of El Tigre. Compl. 7. Drummond appears to be referring to this Courts
decision granting in part and denying in part Drummonds motion to dismiss the First Amended
Complaint in Balcero, issued April 30, 2010. See Balcero, Dkt. No. 43 at pp. 22-23 (citing
allegations in the First Amended Complaint resting on statements attributed to El Tigre). For the
$8.5 million in legal fees Drummond attributes to El Tigres false accusations, then, Compl.
7, the statute of limitations ran out, at the very latest, on April 30, 2014, almost a year before this
suit was filed.
In March 2003, Drummond was on inquiry notice that it would be forced to pay money to
defend allegations that it collaborated with Colombian right-wing paramilitaries to commit
multiple acts of murder. By December 4, 2009, when the First Amended Complaint in Balcero
was filed, Balcero, Dkt. No. 35, Drummond was aware of the allegedly false accusations by El
42
Tigre which, according to Drummond, forced it to pay the vast majority of the legal fees that
make up its damages. Compl. 7. Drummond has claimed that the Underlying Litigation was
entirely false and fraudulent, and that it never paid a dime to the AUC. Compl. 2, 7-8. If
the Court and Defendants take Drummonds position as true, as they must for purposes of this
motion, then Drummond knew by December 2009, at the very latest, that it was the victim of
fraudulent allegations supported by testimony of witnesses who, from Drummonds
perspective, must have been lying. Whether some of those witnesses received payments from
Defendants, whether those payments were wrongful, and whether and how those payments may
have been concealed are questions that are irrelevant to Drummonds obligation to diligently
investigate the source of its alleged injurythat is, to get to the bottom of why it was being
forced to defend what must have been absolutely shocking, as well as false, allegations that it
had collaborated in the contract killing of innocent Colombian civilians merely because it
believed those civilians were interfering with its business.
Drummond did not bother to
complete that investigation in the four-year period permitted by statute. Its claims are timebarred.
IV.
Drummonds RICO Conspiracy Claim Fails for the Same Reasons as Its RICO
Claim
Drummonds RICO conspiracy claim is based on the same alleged predicate acts and
events as its RICO claim. See Compl. 200-05. [W]here a plaintiff fails to state a RICO claim
and the conspiracy count does not contain additional allegations, the conspiracy claim
necessarily fails. Am. Dental Ass'n v. Cigna Corp., 605 F.3d 1283, 1296 (11th Cir. 2010)
(quoting Rogers v. Nacchio, 241 Fed.Appx. 602, 609 (11th Cir. 2007)). For the same reasons
that its RICO claim fails, Drummonds RICO conspiracy claim must also be dismissed.
43
V.
Drummonds State Law Claims Also Fail

The Court should also dismiss Drummonds claims under Alabama law.
A.
Civil Conspiracy
Drummonds claim for civil conspiracy fails because Drummond does not allege an
underlying claim. Civil conspiracy rests upon the existence of an underlying claim. Jones v.
BP Oil Co., Inc., 632 So.2d 435 (Ala.1993). If there is no underlying cause of action, there
cannot be a conspiracy. Id. Driver v. W.E. Pegues, Inc., No. 7:11-CV-1374 LSC, 2012 WL
3042939, at *6 (N.D. Ala. July 19, 2012). Though Drummond does not so plead, to the extent
that the entire RICO cause of action might be deemed its underlying claim, the conspiracy
claim fails with the RICO claim. As the trial court correctly noted, liability for civil conspiracy
rests upon the existence of an underlying wrong and if the underlying wrong provides no cause
of action, then neither does the conspiracy. Jones v. BP Oil Co., 632 So. 2d 435, 439 (Ala.
1993) (holding that because the plaintiffs underlying claims were properly dismissed on
summary judgment, the conspiracy claim must be dismissed as well).
Furthermore, Alabama recognizes a general rule which denies a right of action [for civil
conspiracy] based upon testimony offered in a judicial proceeding. Snyder v. Faget, 295 Ala.
197, 203, 326 So. 2d 113, 118 (1976). Drummond offers no explanation as to why this rule
should not apply here. For all these reasons, its civil conspiracy claim should be dismissed.
B.
Willful Misrepresentation
Drummonds claim for willful and/or reckless misrepresentation is based on Alabama

Code Section 6-5-101.
Section 6-5-101 requires Drummond to plead, per Rule 9(b)s
particularity requirement, reliance on the alleged misrepresentation or concealment. Foremost

Ins. Co. v. Parham, 693 So. 2d 409, 422 (Ala. 1997) (The elements of a misrepresentation claim
are 1) a misrepresentation of material fact, 2) made willfully to deceive, recklessly, without
44
knowledge, or mistakenly, 3) which was justifiably relied on by the plaintiff under the
circumstances, and 4) which caused damage as a proximate consequence.) (citing Ala.Code
1975, 65101; Harrington v. JohnsonRast & Hays Co., 577 So.2d 437 (Ala.1991)).
Drummond could not have justifiably relied on statements it allegedly knew to be false and
fraudulent. Compl. 2. Drummond also does not and cannot plead the requisite intent to
deceive, because there is no dispute that the alleged misrepresentations and concealments were
made with alleged intent to deceive third parties such as this Court and others, rather than
Drummond itself. See supra I.A.2. For these reasons, its misrepresentation claim must be
dismissed.
Drummonds claims for Willful Misrepresentation and Fraudulent Concealment against
Defendant Scherer should be dismissed for the additional reason that, as explained above, they
fail to allege with plausibility or particularity Mr. Scherers individual involvement in any
scheme to defraud Drummond. See supra I.A.1.
C.
Fraudulent Concealment
Alabama Code Section 6-5-102 requires a showing that 1) that the defendant had a duty
to disclose material facts, 2) that the defendant concealed or failed to disclose those facts, 3) that
the concealment or failure to disclose induced the plaintiff to act; and 4) that the defendant's
action resulted in harm to the plaintiff. Lawson v. Harris Culinary Enterprises, LLC, 83 So. 3d
483, 492 (Ala. 2011). Drummond fails to specifically plead per Rule 9(b) how it was induced
to act by the concealment of any facts related to the violations in its five Appendices. See
Compl. 213. Indeed, it cannotregardless of the fact or propriety of witness assistance
payments to any of the witnesses who provided testimony in the Underlying Litigation,
Drummonds position that those witnesses testimony was false, and the Underlying Litigation
45
fraudulent, would surely have remained the same. Its claim for fraudulent concealment should
be dismissed.
CONCLUSION
The right to petition the courts for redress of wrongsregardless of the strength of the
underlying claimsis a fundamental freedom of our system of government. This RICO action is
nothing more than a brutal swipe by powerful private interest at a group of lawyers who have
spent considerable time, effort, and resources helping the powerless to exercise that fundamental
right. Drummond had its day in court, and it won. This Court should not tolerate Drummonds
cynical attempt to punish Defendants further by means of this purely retaliatory lawsuit.
For the foregoing reasons, Defendants respectfully urge that the Complaint be
DISMISSED WITH PREJUDICE in its entirety.
DATE: August 12, 2015
Respectfully submitted,
/s/ Robert K. Spotswood

Robert K. Spotswood (SPO 001)
Michael T. Sansbury (SAN 054)
William T. Paulk (PAU 016)
SPOTSWOOD SANSOM & SANSBURY LLC
1819 5th Avenue N., Suite 1050
Telephone: (205) 986-3620
rks@spotswoodllc.com
msansbury@spotswoodllc.com
wpaulk@spotswoodllc.com
Attorneys for Defendants Conrad & Scherer LLP
and William R. Scherer, Jr.
46
Of Counsel for Defendants Conrad & Scherer LLP and William R. Scherer, Jr.
Kenneth E. McNeil (pro hac vice)
Stuart V. Kusin (pro hac vice)
SUSMAN GODFREY L.L.P.
1000 Louisiana, Suite 5100
Houston, Texas 77002
Telephone: (713) 653-9366
kmcneil@susmangodfrey.com
skusin@susmangodfrey.com
Lindsey Godfrey Eccles (pro hac vice)
SUSMAN GODFREY L.L.P.
1201 Third Avenue, Suite 3800
Seattle, Washington 98101
Telephone: (206) 516-3880
leccles@susmangodfrey.com
Christopher S. Niewoehner (pro hac vice)
STEPTOE & JOHNSON LLP
115 S. LaSalle Street, Suite 3100
Chicago, Illinois 60603
Telephone: (312) 577-1240
cniewoehner@steptoe.com
Kendall R. Enyard (pro hac vice)
STEPTOE & JOHNSON LLP
1330 Connecticut Avenue NW
Washington, D.C. 20036
Telephone: (202) 429-6489
kenyard@steptoe.com
47
CERTIFICATE OF SERVICE
I hereby certify that on this 12th day of August, 2015, a true and correct copy of the
foregoing document was served upon all parties of record via the Courts CM/ECF system and/or
by electronic mail:
William Anthony Davis, III
H. Thomas Wells, III
Benjamin T. Presley
STARNES DAVIS FLORIE LLP
P.O. Box 59812
Birmingham, AL 35259
Phone (205) 868-6000
Fax (205) 868-6099
tdavis@starneslaw.com
twells@starneslaw.com
bpresley@starneslaw.com
Sara E. Kropf
LAW OFFICE OF SARAH KROPF PLLC
1001 G St. NW, Suite 800
Washington DC 20001
Phone (202) 627-6900
sara@kropf-law.com
W. Percy Badham III
2001 Park Place North
Suite 500
Phone: (205) 521-0036
Fax: (205) 521-0037
pbadham@badhambuck.com
/s/ Robert K. Spotswood

Rober K. Spotswood
48

Collingsworth Scherer RICO Motion To Dismiss

Diunggah oleh

Informasi Dokumen

Judul Asli

Hak Cipta

Format Tersedia

Bagikan dokumen Ini

Bagikan atau Tanam Dokumen

Opsi Berbagi

Apakah menurut Anda dokumen ini bermanfaat?

Apakah konten ini tidak pantas?

Hak Cipta:

Format Tersedia

Collingsworth Scherer RICO Motion To Dismiss

Diunggah oleh

Hak Cipta:

Format Tersedia

FILED

Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 1 of 58

2015 Aug-12 PM 12:40

IN THE UNITED STATES DISTRICT COURT

Case No. 2:15-cv-00506-RDP

DEFENDANTS CONRAD & SCHERER, LLPS AND WILLIAM R. SCHERER, JR.S

Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 2 of 58

Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 3 of 58

The First Amendments Petition Clause Prohibits RICO-based

The Alleged RICO Predicate Acts Fail Basic Pleading

Defendants Litigation Conduct is Constitutionally Protected

Even if Its Allegations of Litigation Misconduct are Accepted as True,

Under Pendergraft, Even Blatant Litigation Misconduct

This Court Should Recognize that Pendergrafts Reasoning

Any Sham Litigation Exception Does Not Apply ..................................24

After Pendergraft, District Courts in the Eleventh Circuit Have

Despite Surface Similarities, This Case is Nothing Like

The Only Cognizable RICO Injury Drummond Alleges is Barred by

Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 4 of 58

Drummonds Reputational and Intangible or Speculative

To the Extent Drummonds RICO Claim Rests on Its Legal

Drummonds RICO Conspiracy Claim Fails for the Same Reasons as

Drummonds State Law Claims Also Fail .............................................................44

Civil Conspiracy ........................................................................................44

Willful Misrepresentation ..........................................................................44

Fraudulent Concealment ............................................................................45

Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 5 of 58

Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 6 of 58

California Motor Transport Co. v. Trucking Unlimited,

Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 7 of 58

Harrington v. JohnsonRast & Hays Co.,

Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 8 of 58

McCaleb v. A.O. Smith Corp.,

Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 9 of 58

United Mine Workers v. Pennington,

Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 10 of 58

Alabama Code Section 6-5-102 .................................................................................................... 46

Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 11 of 58

Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 12 of 58

Defendants have received nothing in settlement recoveries much less extorted

The victim of the alleged extortionate scheme is a company owned by what

Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 13 of 58

The only clearly identified predicate allegation of

extortion is Defendant William Scherers unsuccessful settlement overture in June 2012.

The First Amendments Petition Clause protects Defendants litigation conduct,

Drummond has been aware of its sole quantifiable injurypayment of attorney

Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 14 of 58

Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 15 of 58

The First Amendments Petition Clause Prohibits RICO-based Collateral Attacks

Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 16 of 58

Compl., Apps. A-E.

Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 17 of 58

Drummonds Allegations as to Defendant William Scherer Fail to

As to Defendant William Scherer, Drummond entirely fails to meet the Twombly

Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 18 of 58

Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 19 of 58

Drummond also fails to allege facts with respect to each

Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 20 of 58

conspirator.6 Compl., App. A at p. 1. Ms. Molina is alleged to be a member or friend of

Garzon then deposits 3,000,000 Colombian pesos into Charris wifes

Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 21 of 58

See also Gunn v.

Case 2:15-cv-00506-RDP Document 14 Filed 08/12/15 Page 22 of 58