Plaintiff Alleged a Prima Facie Civil RICO Claim and thus the Court granted Plaintiff’s Ex Parte Motion for Leave of Court to Serve Third-Party Subpoenas Duces Tecum Prior to the Service To Any Defendant

Cothran v. Abdul Koomson, 2020 WL 6450498 (E.D. Tex., Nov. 3, 2020)

Plaintiff alleged that Defendants conspired to lure Cothran into believing she was wiring funds to an individual romantic suitor when, in truth, she was wiring funds to the criminal enterprise. Cothran requests discovery from Capital One Bank and Bank of America to document and establish the allegedly fraudulent circumstances of the transfer of money to the Capital One Bank account, including the purpose of identifying unknown defendants who are anonymous Internet users.

Although the Federal Rules do not provide an exact standard for a court’s granting such authorization, the court stated that several other federal courts within the Fifth Circuit, including the Eastern District of Texas, have used a “good cause” standard to determine whether a party is entitled to early discovery.

In a good-cause analysis, the court weighs five factors: (1) whether the plaintiff has made a prima facie case of actionable harm; (2) the specificity of the discovery request; (3) the absence of alternative means to obtain the subpoenaed information; (4) whether there is a central need for the subpoenaed information to advance the claim; and (5) the user’s expectation of privacy.

Specifically, when “a party seeks a subpoena for identifying information of anonymous Internet users…‘the court must also balance the need for disclosure against the defendant’s expectation of privacy.’ ” Ensor, 2019 WL 4648486, at *2 (quoting Malibu Media, LLC v. Doe, SA-19-CV-00601, 2019 WL 3884159, at *1 (W.D. Tex. Aug. 16, 2019)). The court, when determining whether to authorize early discovery, enjoys “broad discretion to tailor discovery narrowly and to dictate the sequence of discovery.” 

Regarding Factor One, prima facie case, the Court concluded that Cothran demonstrated good cause has made a prima facie case of actionable harm and thus is entitled to limited early discovery for the purpose of identifying the unknown defendants. To establish a prima facie civil RICO claim, a plaintiff must allege: (1) a substantive predicate violation of 18 U.S.C. § 1962; (2) injury to his [or her] business or property; and (3) a causal connection between the racketeering activity and the injury.” 

The court found Cothran has alleged all three elements listed above. In particular, Cothran alleges that each of the individual Defendants is a “person” as defined in Section 1961(3) of RICO. Cothran further alleges that each of the individual Defendants conducted, participated in, or conspired to conduct or participate in a pattern of racketeering activity in connection with the defrauding enterprise’s conduct.  She claims that this enterprise is an “association in fact.”  Cothran alleges in detail how Defendants conspired to lure Cothran into believing she was wiring funds to an individual romantic suitor when, in truth, she was wiring funds to the criminal enterprise. She specifically alleges that Defendants engaged in a pattern of RICO predicate acts when they “repeatedly and systematically utilized wire fraud and bank fraud to defraud victims, divert the money to their own benefit, launder their proceeds,…and conceal the existence of their Enterprise.”  see 18 U.S.C. § 1961(1) (listing, among others, wire fraud and money laundering as RICO predicate acts). Cothran has therefore met the first prong of her prima facie RICO case.

Under the second prong of a prima facie Section 1962 violation, a civil RICO plaintiff must allege that he or she “suffered injuries ‘by reason of’ [the defendant’s violation of § 1962].” Ocean Energy II, Inc. v. Alexander & Alexander, Inc., 868 F.2d 740, 746 (5th Cir. 1989)(quoting 18 U.S.C. § 1964(c)). Cothran has alleged that, as a direct and proximate result of Defendants’ RICO violations, Cothran suffered extensive injuries, including damages of at least $153,943.32. Cothran has met the second prong of a prima facie showing.

For the third prong, a civil RICO plaintiff must assert his or her “right to sue” by pleading facts that demonstrate that the defendant’s violation of Section 1962 was both a “but-for” and “proximate” cause of his or her injuries. Holmes v. Sec. Inv’r Prot. Corp., 503 U.S. 258, 268, 112 S.Ct. 1311, 117 L.Ed.2d 532 (1992). Cothran has alleged that her injuries were the “direct and proximate result” of Defendants’ RICO acts. Cothran has met the third prong of her prima facie case.

The court also found that the remaining factors [Factors 2-5] of the good-cause analysis were satisfied.

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