Court Denies Defendants’ Motion to Dismiss Civil RICO Claim Finding Sufficient “Injury” and Also Recognizing Equitable Relief for Civil RICO Claims

Smith v. FirstEnergy Corp., et al, 2021 WL 496415 (S.D. Ohio, Feb. 10, 2021)

The court denied the Defendants’ motion to dismiss a civil RICO claim. In the summer of 2020, former Speaker of the Ohio House of Representatives Larry Householder and his political associates were indicted for a $60 million-dollar federal racketing conspiracy. The criminal complaint alleged that in exchange for hefty bribes from “Company A,” Householder and members of his racketeering enterprise (“Householder Enterprise”) worked to pass and uphold House Bill 6 (“HB 6”), a near billion-dollar nuclear power plant bailout for FirstEnergy Corp. Plaintiffs, individual and commercial ratepayers of FirstEnergy Corp., bring civil claims on behalf of a proposed class against Defendants, FirstEnergy Corp., FirstEnergy Service Co., and various individuals in decision-making roles at either entity. Plaintiffs allege that as a result of FirstEnergy’s racketeering alongside the Householder Enterprise, they have been injured by having to pay costs and fees set forth in HB 6.

The crux of Plaintiffs’ RICO and OCPA claims is that Defendants violated the statutes by engaging in a pattern of racketeering activity by making bribes to the Householder Enterprise to ensure the ultimate enactment of HB 6.  The Court found that Plaintiffs’ complaint pleaded both injury and causation adequately under § 1964(c) and rejected Defendants contention that Plaintiffs have not suffered a cognizable injury because HB 6’s surcharge provision had not yet taken effect and may never take effect.  The court stated that a federal civil RICO claim is ripe when the injury is “ascertainable and definable.” Id. at *4, citing case.   Plaintiffs injury is ascertainable and definable because the exact amount of injury—85 cents or $2,400 per month—and the imminent date at which it will begin—January 2021—are exceedingly clear. Thus, Defendants’ argument was purely a matter of statutory standing, or interpretation of the word “injured.”

The court stated that unlike an unknowable future injury at an undiscernible point in time, the injury here is defined monetarily and there is no vague contingent future event—the surcharges are part of an enacted law with an effective date.  Moreover, under Defendant’s position prospective equitable relief would never be appropriate under the statute. Equitable relief is generally available under § 1964(c), and no court has concluded that this excludes any particular type of equitable relief. 

Defendants provide no authority demonstrating that an award of preliminary injunctive relief in parallel state proceedings renders an injury pleaded in an already-filed complaint incognizable, or even unripe. State proceedings, legislative or judicial, could certainly moot this case at some point or impact the relief available to Plaintiffs. But these concerns are not raised before the Court. The issue here is one of statutory standing, and Defendants failed to show that “injured” in § 1964(c) does not contemplate imminent, ascertainable, and specified injuries.

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