UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

AMERICAN BIOCARE, INC., et al.,

 Plaintiffs, No. 14-cv-14464

vs. Hon. Gerald E. Rosen

HOWARD & HOWARD ATTORNEYS, PLLC;

JIRA LLC; JIRA III, LLC; REDEMPTION

HEALTH CARE, LLC; and

SHCC SERVICES TX, LLC,

Defendants.

______________________________________/

OPINION AND ORDER GRANTING

DEFENDANTS’ MOTIONS TO DISMISS

At a session of said Court, held in

 the U.S. Courthouse, Detroit, Michigan

on September 30, 2016

PRESENT: Honorable Gerald E. Rosen

 United States District Judge

I. INTRODUCTION

Plaintiffs American Biocare, Inc. (“ABI”) and various ABI “subsidiaries” have

brought this suit alleging that Howard & Howard Attorneys PLLC (“Howard &

Howard”), four of the firm’s current or former clients -- JIRA, LLC (“JIRA”), JIRA III,

LLC (“JIRA III”), Redemption Health Care, LLC (“Redemption”) and SHHC Services

TX, LLC (“SHHC”) (collectively the “JIRA Defendants”) -- and various non-party

individuals and entities engaged in racketeering activity, and converted property that ABI

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claims it owned. Plaintiffs’ 76-page, 275-paragraph First Amended Complaint contains

three substantive counts: a claim against all of the defendants for violation of the

Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1961 et seq.,

(“RICO”) (Count I); a claim under state law for conversion against the JIRA Defendants

(Count IV), and a claim against Howard & Howard for aiding and abetting that

conversion (Count V).1

Howard & Howard and the JIRA Defendants now move, in separately-filed

motions, to dismiss all of Plaintiffs’ claims against them. Both Howard & Howard and

the JIRA Defendants seek dismissal pursuant to Fed. R. Civ. P. 12(b)(6). The JIRA

Defendants also seek dismissal pursuant to Fed. R. Civ. P. 12(b)(1). Responses, Reply

Briefs, and Supplemental Briefs have been filed.

Having reviewed and considered the parties’ briefs, supporting documents, and

the entire record of this matter, the Court has determined that oral argument is not

necessary. Therefore, pursuant to Eastern District of Michigan Local Rule 7.1(f)(2), this

matter will be decided on the briefs. This Opinion and Order sets forth the Court’s

ruling.

1

 Counts II and III are pled in the alternative, but neither Count sets forth a

substantive claim. In Count II, Plaintiffs seek a declaratory judgment that they own the

property they claim was converted by virtue of a non-party secured creditor’s asset

foreclosure sale to some of the defendants, and in, the alternative, in Count III Plaintiffs

seek a constructive trust regarding that property. Plaintiffs have withdrawn their

constructive trust claim, therefore, Count III will be dismissed. Plaintiffs’ claims in

Count II will be addressed in conjunction with their claim for conversion in Count IV.

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FACTUAL BACKGROUND

Plaintiff American Biocare, Inc. (“ABI”) has been embroiled in litigation with

Howard & Howard and clients of the law firm since early 2013. ABI is a holding

company allegedly formed to raise capital for the acquisition of home health care

agencies. In 2011, various entities owned by ABI or in which ABI had some interest (the

“ABI Entities”)2 purchased several home health care agencies in Michigan, Tennessee

and Texas. To finance the purchase, the ABI Entities borrowed $3.9 million from

Citizens Bank (the “Loan”) and another $4.3 million in private financing from Peachtree

Equity Partners. ABI itself was not a borrower but it guaranteed repayment of the Loan.

To secure the guaranty, ABI and the ABI Entities pledged the Entities’ assets,

membership interests and shares in the ABI Entities (the “Pledged Assets”) as collateral.3

Less than a year after the Loan closing, the Loan was in default and ABI and the

2

 The entities were JIRA Holdings, LLC (“JIRA Holdings”), KJJ Holdings, LLC

(“KJJ Holdings”), Health Care Partners, Inc. (“HCP”), Southwest Home Health Care

Holdings, LLC (“SWHHC Holdings”), SWHHC Management-Central Texas,

LLC(“SWHHC Management”), Southwest Home Health Care of Harris, LLC

(“SWHHC-Harris”), Southwest Home Health Care-Central Texas (“SWHHC-Central

Texas”); Southwest Home Heath Care of East Texas, LLC (“SWHHC-East Texas”),

Southwest Home Health Care of Dallas, LLC (“SWHHC-Dallas”), Care Choices of

Tennessee, Inc. and CC Tennessee Holdings, LLC. All but the last two of these

entities -- Care Choices of Tennessee, Inc. and CC Tennessee Holdings, LLC -- are

named as party-plaintiffs (the “New Plaintiffs”) in this action. The New Plaintiffs were

added to this action when ABI filed the First Amended Complaint

3

 The Pledged Assets included membership interests in the ABI Entities along

with “all existing accounts, accounts receivable, health-care insurance receivables,

deposit accounts, inventory, equipment and general intangibles” of some of the entities.

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ABI Entities defaulted on their guaranty. FirstMerit Bank (“FirstMerit”), as successor to

Citizens Bank, foreclosed on the Pledged Assets and sold them at a UCC private

foreclosure sale to Defendants JIRA, JIRA III, and SHHC as follows:

C To JIRA III: ABI’s membership interests in SWHHC Holdings and JIRA

Holdings (including JIRA Holdings’ membership interest in KJJ Holdings

(which includes KJJ Holdings’ capital stock in HCP)) and SWHHCHarris’s membership interest in SWHHC-East Texas;

C To SHHC: all existing accounts, accounts receivable, health-care

insurance receivables, deposit accounts, inventory, equipment and general

intangibles of SWHCC Management, SWHHC-Central Texas, SWHHCHarris, SWHHC-East Texas, and SWHHC-Dallas; and

C To JIRA: all existing accounts, accounts receivable, health-care insurance

receivables, deposit accounts, inventory, equipment and general intangibles

of JIRA Holdings, KJJ Holdings and HCP.

[See JIRA Defendants’ Ex. D; Howard & Howard Ex. H]

Shortly after JIRA, JIRA III and SHHC purchased the assets and membership

interests in the New Plaintiffs, they were assigned to Redemption Health Care, LLC

(“Redemption”), another party-defendant in this action. Id.

ABI’S LITIGATION HISTORY

Meanwhile, on April 29, 2013, i.e., between the time of ABI’s default on the Loan

guaranty and FirstMerit’s November 2013 asset foreclosure sale, ABI filed a lawsuit in

Oakland County Circuit Court against Kevin Ruark, Jamin Ruark, Jason Laing (the

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“Ruark Individuals”), certain companies owned by them, and other individuals.4

 See

American Biocare, Inc. v. Kevin Ruark, et al., Oakland County Circuit Court No. 2013-

133540-CK. The case was assigned to Judge Colleen O’Brien.

5

 In Judge O’Brien’s

case, ABI alleged that Kevin Ruark made misrepresentations to ABI that caused ABI to

purchase certain other home health care companies -- including JIRA and several other

entities named as parties in this action, some of which were companies in which Kevin

Ruark had an interest -- and that after the acquisition, the Ruark Individuals violated noncompetition agreements with ABI.6

 Howard & Howard represented the defendants in the

O’Brien case.

Simultaneously with the filing of their complaint in the O’Brien case, ABI sought

injunctive relief by bringing a motion for a temporary restraining order to prohibit the

Ruark Individuals from engaging in further competition with ABI and its affiliated

companies. 

4

 The Ruark Individuals also have membership interests in some or all of the

JIRA Defendants. However, none of the JIRA Defendants were named as parties in this

Oakland County action.

5

 The Court takes notice that during the pendency of the instant motions, this

Oakland County action was reassigned to Judge Cheryl A. Matthews. See

https://courtexplorer.g2gcloud.com/oaklandcounty. However, the Court will continue to

refer to it as the “O’Brien case” as this is how the parties refer to the case in their briefs.

6

 Plaintiffs make these same allegations in this case. See First Amended

Complaint, ¶¶ 58-77. The non-compete agreement at issue in Judge O’Brien’s case

allegedly arose out of agreements entered into as part of ABI’s acquisition deal. See id.,

¶¶ 66-68.

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On July 11, 2013, in order to resolve ABI’s motion for a TRO, the parties in the 

O’Brien case stipulated to the entry of a limited Status Quo Order which provided, in

relevant part:

IT IS HEREBY ORDERED that until further order of this Court,

defendants Kevin Ruark, Jamin Ruark and Jason Laing will not take

employment, or have any ownership, in a company that operates or

manages a home health care agency in the States of Michigan, Tennessee

and Texas, excluding San Antonio, Texas (i.e., using the area specifically

stated in Section 9.1 of th Texas Purchase Agreement), and excluding John

Paul Home Care, Inc.

* * *

IT IS HEREBY FURTHER ORDERED that nothing in this Order

shall be construed as an admission of liability or a waiver of any rights or

remedies of any Party. It is agreed and acknowledged that this Order and

its provisions may not be used for purposes of seeking or opposing

injunctive or other relief (other than a violation of this Order).

[See Howard & Howard Ex. E.]

Thereafter, on November 6, 2013, Judge O’Brien granted Howard & Howard’s

clients’ motion for partial summary disposition, dismissing four counts of the

complaint -- including ABI’s claim for fraud/misrepresentation -- in their entirety.

Subsequently, on January 17, 2014, ABI filed a motion in the case asking the

Court to hold Howard & Howard and its clients in contempt of court. ABI argued that

JIRA, JIRA III and SHHC’s purchase of the Pledged Assets from FirstMerit following

ABI’s default on the acquisition Loan constituted a violation of the Status Quo Order

entered in July 2013 because the Ruark Individuals owned or controlled one or more of

the entities that purchased the Pledged Assets, and these entities were engaged in the

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home health care business in Michigan.

Judge O’Brien apparently agreed with ABI because on February 19, 2014, she

entered an order finding Kevin Ruark, Jamin Ruark and Jason Laing to be in civil

contempt for violating the Status Quo Order, reserving the issue of damages for violation

of the Order for trial. (Howard & Howard was not held in contempt.) No trial, however,

was ever held because on March 28, 2014, Kevin Ruark filed for Chapter 7 bankruptcy,

and on April 7, 2014, ABI and the other parties stipulated to administratively close the

case in its entirety, without prejudice, due to the bankruptcy. The case remains closed to

this date.

The Second Oakland County Lawsuit

Not long after stipulating to administratively close the O’Brien case, on July 22,

2014, ABI filed a new lawsuit in Oakland County Circuit Court, this time naming as

defendants Howard & Howard, JIRA, JIRA III, and Redemption, i.e., the same entities

named as defendants in this case. See American Biocare, Inc. v. Howard & Howard

Attorneys PLLC, et al.,Oakland County Circuit Court No. 2014-141991-CZ. The case

was initially assigned to Judge Michael Warren but then was re-assigned to Judge James

Alexander. The Complaint in Judge Alexander’s case alleged that the defendants

(excluding Howard & Howard) were liable for conversion by purchasing the Pledged

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Assets from FirstMerit, and that Howard & Howard aided and abetted this conversion.

7

However, shortly after filing the second Oakland County lawsuit, ABI voluntarily

dismissed the case on September 5, 2014.

Plaintiffs Filed this Action

Two months later, on November 21, 2014, ABI filed its Complaint in this matter,

making substantially the same allegations against the same parties and alleging the same

conversion claims it made in the second Oakland County lawsuit, but adding SHHC as a

party-defendant, and adding a RICO violation claim.

8

Defendants now move to dismiss this action in its entirety.

III. DISCUSSION

A. APPLICABLE STANDARDS

Fed. R. Civ. P. 12(b)(1) is the applicable procedural rule for challenging lack of

subject matter jurisdiction. “When subject matter jurisdiction is challenged under Rule

12(b)(1), the plaintiff has the burden of proving jurisdiction in order to survive the

motion.” Madison-Hughes v. Shalala, 80 F.3d 1121, 1130 (6th Cir. 1996).

Motions to dismiss for lack of subject matter jurisdiction fall into two general

categories: facial attacks and factual attacks. United States v. Ritchie, 15 F.3d 592, 598

7

 These are the same claims alleged by Plaintiffs in Counts IV and V of the First

Amended Complaint in this case.

8

 It is only the newly-added RICO claim that provides the basis for federal subject

matter jurisdiction.

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(6th Cir. 1994). A facial attack on subject matter jurisdiction goes to whether the

plaintiff has properly alleged a basis for subject matter jurisdiction, and in such a case,

the trial court takes the allegations of the complaint as true. Ohio Nat’l Life Ins. Co. v.

United States, 922 F.2d 320, 325 (6th Cir. 1990). A factual attack is a challenge to the

factual existence of subject matter jurisdiction. Because at issue in a factual 12(b)(1)

motion is the trial court’s jurisdiction -- its very power to hear the case -- “the trial court

is free to weigh the evidence and satisfy itself as to the existence of its power to hear the

case.” RMI Titanium Co. v. Westinghouse Elec. Corp., 78 F.3d 1125, 1134 (6th Cir.

1996) (citation omitted). In such a motion, “no presumptive truthfulness attaches to the

plaintiff’s allegations, and the existence of disputed material facts will not preclude the

trial court from evaluating for itself the merits of jurisdictional claims.” Id. Thus, in

ruling on Rule 12(b)(1) motions challenging the factual basis for subject matter

jurisdiction, the court may look to evidence outside the pleadings. Nichols v. Muskingum

College, 318 F.3d 674, 677 (6th Cir. 2003).

Fed. R. Civ. P. 12(b)(6) authorizes the Court to dismiss a complaint if it “fail[s] to

state a claim upon which relief can be granted. . . .” In deciding a motion brought under

Rule 12(b)(6), the Court must construe the complaint in the light most favorable to the

plaintiff and accept all well-pled factual allegations as true. League of United Latin

American Citizens v. Bredesen, 500 F.3d 523, 527 (6th Cir. 2007). Yet, “the tenet that a

court must accept as true all of the allegations contained in a complaint is inapplicable to

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legal conclusions.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 1949 (2009). 

Moreover, “[w]hile a complaint attacked by a Rule 12(b)(6) motion to dismiss does not

need detailed factual allegations, a plaintiff’s obligation to provide the grounds of his

entitlement to relief requires more than labels and conclusions, and a formulaic recitation

of the elements of a cause of action will not do.” Bell Atlantic Corp. v. Twombly, 550

U.S. 544, 555, 127 S. Ct. 1955, 1964-65 (2007) (internal quotation marks, alteration, and

citations omitted). Rather, to withstand a motion to dismiss, the complaint’s factual

allegations, accepted as true, “must be enough to raise a right to relief above the

speculative level,” and “state a claim to relief that is plausible on its face.” Twombly, 550

U.S. at 555, 570, 127 S. Ct. at 1965, 1974. “A claim has facial plausibility when the

plaintiff pleads factual content that allows the court to draw the reasonable inference that

the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678, 129 S. Ct. at

1949. The plausibility standard, however, “asks for more than a sheer possibility that a

defendant has acted unlawfully.” Id. “Where a complaint pleads facts that are ‘merely

consistent with’ a defendant’s liability, it ‘stops short of the line between possibility and

plausibility of entitlement to relief.’” Id. (quoting Twombly, 550 U.S. at 557, 127 S.Ct.

1955).

In applying this 12(b)(6) standard, matters outside the pleadings cannot be

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considered.9

 However, documents attached to a Rule 12(b)(6) motion to dismiss that are

referred to in the Complaint and central to the claim are deemed to form part of the

pleadings, and as such, may properly be considered. Greenberg v. Life Ins. Co. of

Virginia, 177 F.3d 507, 514 (6th Cir. 1999); Armengau v. Cline, 7 Fed. App’x 336, 344

(6th Cir. 2001). Further, “[a] court may consider matters of public record in deciding a

motion to dismiss without converting the motion to one for summary judgment.”

Commercial Money Ctr., Inc. v. Illinois Union Ins. Co., 508 F.3d 327, 336 (6th Cir.

2007).

The Court will apply the foregoing standards in deciding Defendants’ Rule

12(b)(1) and 12(b)(6) motions in this case.

B. THE NEW PLAINTIFFS HAVE NOT AUTHORIZED THIS LAWSUIT AND

ABI LACKS STANDING TO BRING SUIT ON THEIR BEHALF 

The Court must first address the issue of subject matter jurisdiction as raised by the

JIRA Defendants in their Rule 12(b)(1) motion. “Subject matter jurisdiction is always a

threshold determination.” American Telecom Co. v. Republic of Lebanon, 501 F.3d 534,

537 (6th Cir.2007) ( citing Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 101, 118

S.Ct. 1003, 140 L. Ed. 2d 210 (1998)). Defendants contend that the Court lacks

jurisdiction over this matter because Plaintiffs lack standing to bring this suit.

9

 If on a Rule 12(b)(6) motion matters outside the pleadings are presented to the

court, the motion must be treated as a motion for summary judgment under Rule 56. See

Fed. R. Civ. P. 12(d).

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A motion to dismiss on the grounds that the plaintiff lacks standing is properly

considered as a motion for lack of subject matter jurisdiction. Murray v. United States

Dep’t of Treasury, 681 F.3d 744, 748 (6th Cir. 2012). Standing is “a jurisdictional

matter, and a plaintiff’s lack of standing is said to deprive a court of jurisdiction.” Ward

v. Alternative Health Delivery Sys., 261 F.3d 624, 626 (6th Cir. 2001); see also

Children’s Healthcare is a Legal Duty, Inc. v. Deters, 92 F.3d 1412, 1419 (6th Cir.

1996) (the requirement of standing is jurisdictional and the burden to establish it persists

at every phase of the litigation).

As the Sixth Circuit explained in Murray:

Article III of the Constitution gives federal courts subject matter

jurisdiction over actual cases or controversies, neither of which exists

unless a plaintiff establishes his standing to sue. ASARCO Inc. v. Kadish,

490 U.S. 605, 613, 109 S.Ct. 2037, 104 L.Ed.2d 696 (1989); Allen v.

Wright, 468 U.S. 737, 750, 104 S.Ct. 3315, 82 L.Ed.2d 556 (1984); see

U.S. Const. art. III § 2. Because federal courts “sit ‘solely ... to decide on

the rights of individuals,’” Hein v. Freedom from Religion Found., Inc.,

551 U.S. 587, 598, 127 S.Ct. 2553, 168 L.Ed.2d 424 (2007) (quoting

Marbury v. Madison, 1 Cranch 137, 170, 2 L.Ed. 60 (1803)), standing is

“the threshold question in every federal case.” Coyne v. Am. Tobacco Co.,

183 F.3d 488, 494 (6th Cir.1999) (quoting Warth v. Seldin, 422 U.S. 490,

498, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975)).

Murray, 681 F.3d at 748.

“‘The irreducible constitutional minimum of standing contains three elements.’” 

King v. IB Property Holdings Acquisition, 635 F. Supp. 2d 651, 657 (E.D. Mich. 2009)

(quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d

351 (1992). First, a plaintiff must show that he has suffered an “injury in fact.” Id. He

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must have suffered “a harm that is both ‘concrete’ and ‘actual or imminent, not

conjectural or hypothetical.’” Id. (quoting Vermont Agency of Natural Resources v.

United States ex rel. Stevens, 529 U.S. 765, 771, 120 S.Ct. 1858, 146 L.Ed.2d 836

(2000), quoting, Whitmore v. Arkansas, 495 U.S. 149, 155, 110 S.Ct. 1717, 109 L.Ed.2d

135 (1990)). Second, a plaintiff must establish a causal connection between the alleged

injury and the conduct of which he complains. Lujan, 504 U.S. at 560, 112 S.Ct. 2130.

That is, the injury must be “fairly traceable” to the defendant’s actions. Id. Third, a

plaintiff must demonstrate that the injury is redressable in the action. Vermont Agency,

529 U.S. at 771, 120 S.Ct. 1858.

Further, standing is to be gauged by the specific claims that a party presents, i.e.,

“whether the particular plaintiff is entitled to an adjudication of the particular claims

asserted.” Allen v. Wright, 468 U.S. 737, 752, 104 S.Ct. 3315, 3325 (1984) (abrogated

on other grounds, Lexmark Int’l, Inc. v. Static Control Components, Inc., 572 U.S. ___,

134 S.Ct. 1377 (2014)) (emphasis added). In other words, the claim must relate to the

particular plaintiff’s own legal rights and interests, rather than the legal rights or interests

of third parties. Elk Grove Unified School Dist. v. Newdow, 540 U.S. 1, 14, 124 S.Ct.

2301, 2310 (2004). The burden is on the party who seeks the exercise of jurisdiction in

its favor “clearly to allege facts demonstrating that [it] is a proper party to invoke judicial

resolution of the dispute.” United States v. Hays, 515 U.S. 737, 743, 115 S.Ct. 2431,

2435 (1995).

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In this case, ABI, through counsel, filed an Amended Complaint which added

nine New Plaintiffs -- JIRA Holdings, LLC, KJJ Holdings, LLC, Health Care Partners,

Inc., Southwest Home Health Care Holdings, LLC, SWHHC Management Central

Texas, LLC, Southwest Home Health Care-Central Texas, LP, Southwest Home Health

Care of Harris, LLC, Southwest Home Health Care of East Texas, LLC, and Southwest

Home Health Care of Dallas, LLC.

10 However, ABI did not, at the time of filing, nor

does it now, own or control these New Plaintiffs.

It is axiomatic that a corporate parent which owns the shares of a subsidiary does

not, for that reason alone, own or have legal title to the assets of the subsidiary; and, it

follows with even greater force, the parent does not own or have legal title to subsidiaries

of the subsidiary. Dole Foods, Inc. v. Patrickson, 538 U.S. 468, 475 (2003) (citing 1W.

Fletcher, Cyclopedia of the Law of Private Corporations, § 31 at 514 (1999)) (“The

properties of two corporations are distinct, though the same shareholders own or control

both. A holding corporation does not own the subsidiary’s property.”)

More importantly, ABI admits that FirstMerit Bank foreclosed on its ownership

interests in, and the assets of, all of the New Plaintiffs, see First Amended Compl., ¶¶ 53,

133; Defendants’ Ex. D, H, and sold them to Defendants JIRA, JIRA III and SHHC Id.,

Compl., at ¶¶134-136; Defendants’ Ex. D, H. Further, the New Plaintiffs’ present

10 All of these New Plaintiffs are represented in this action by the same counsel as

ABI.

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owners did not authorize the filing of the Amended Complaint, and, in fact, have

demanded the dismissal of all claims in this action brought on behalf of JIRA Holdings,

KJJ Holdings, HCP, SWHHC-Harris, SWHHC-East Texas, SWHHC Management,

SWHHC-Central Texas, SWHHC-Dallas, and SW Holdings. See Affidavit of Jason

Laing, JIRA Defendants’ Ex. E, ¶¶ 7-8; 14-15.

Plaintiffs argue that the Court should decide the standing issue here under Rule

12(b)(6) standards and, as such, the Court should disregard Jason Laing’s affidavit

attesting to ABI’s lack of ownership rights in the New Plaintiffs and ABI’s lack of

authority to assert any claims on their behalf. As support for this proposition, Plaintiffs

cite Block v. BAC Home Loans Servicing LP, 2012 WL 2031640 (E.D. Mich. June 6,

2012). Plaintiffs’ reliance on Block is misplaced.

Block was a quiet title action brought to set aside a real estate mortgage

foreclosure on the plaintiffs’ principal residence which involved the Michigan

foreclosure-by-advertisement statute. The defendants in that case moved for dismissal of

the action under Rule 12(b)(1), arguing that the plaintiffs lacked standing to assert their

claim to quiet title to the foreclosed property after the statutory 6-month redemption

period had expired. The court stated that “the term ‘standing’ is ‘a bit of a misnomer’ in

the context of this sort of mortgage-related claim. . . . [A] plaintiff’s failure to assert a

claim during the redemption period is an issue that goes to the claim’s merits.” 2012 WL

2031640 at *2. Therefore, the Block court determined that the motion to dismiss in that

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case should be decided under the standards governing Rule 12(b)(6) motions.

11

This case does not involve a Michigan real estate property foreclosure-byadvertisement, nor does it involve an analogous post-foreclosure sale statutory period of

redemption.

12

Here, Article III standing principles are squarely at issue. The New Plaintiffs are

no longer owned by ABI; ABI’s interests in the New Plaintiffs were foreclosed upon by

FirstMerit Bank, a non-party to this action, and the new owners of the “New Plaintiffs”

have not authorized that this suit be brought on behalf of their behalf.

ABI argues that the new owners, JIRA, JIRA III and SHCC, were not good faith

transferees such that they acquired the New Plaintiffs from FirstMerit free of the rights

and interests of ABI and its borrowing subsidiary entities as provided in M.C.L. §

440.9617(2). However, as explained in the Uniform Commercial Code Comments,

generally it is when a transferee has knowledge of defects in the sale or buys in collusion

with the secured party that he may be deemed to not be acting in good faith. M.C.L. §

440.8617, U.C.C. Comment 3. There is nothing of record showing any defect in

FirstMerit’s sale and there is no allegation that FirstMerit colluded with JIRA, JIRA III

11 Applying the Rule 12(b)(6) standards, the court ultimately granted the

defendant’s motion to dismiss. See Block, 2012 WL 2031640 at *6.

12 Indeed, in marked contrast to real property foreclosures, in the UCC asset

foreclosure context, there is no post-disposition-of-property right of redemption in

Michigan. A debtor, any secondary obligor, or any other secured party or lienholder may

only redeem collateral before the secured creditor has disposed of the collateral or

entered into a contract for its disposition. See M.C.L. § 440.9623(3).

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or SHCC.

Plaintiffs argue that because Jason Laing, a non-party in this case, was one of

individuals subject to the Status Quo Order entered in Judge O’Brien’s Oakland County

four months before the foreclosure sale, and because Laing is a member of JIRA III,

LLC, one of the foreclosure asset purchasers and a member of Redemption Health Care

Holdings, LLC, which is the sole member of Redemption Health Care, LLC, the postforeclosure sale assignee of all of the JIRA Defendants purchased assets, [see Laing

2/27/15 Affidavit], the JIRA Defendants had to have known that they could not purchase

the foreclosed assets. While the purchase of the assets ultimately did subject Laing to

being found in contempt of court, it still does not confer Article III standing on ABI to

bring this suit on behalf of the New Plaintiffs who did not and do not consent to pursuing

this litigation. Hence, there is no actual case or controversy with regard to the New

Plaintiffs over which the Court has subject matter jurisdiction. The JIRA Defendants’

12(b)(1) motion to dismiss, therefore, will be GRANTED, and the New Plaintiffs -- JIRA

Holdings, KJJ Holdings, Health Care Partners, SWHHC Holdings, SWHHC

Management, SWHHC-Central Texas, SWHHC-Harris, SWHHC-East Texas, and

SWHHC-Dallas -- are DISMISSED from this action.

C. ABI HAS NOT STATED A CLAIM FOR WHICH RELIEF CAN BE

GRANTED FOR ANY VIOLATION OF RICO 

The civil remedy provisions of RICO state that “[a]ny person injured in his

business or property by reason of a violation of section 1962 of this chapter may sue

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therefore in any appropriate United States district court and shall recover threefold the

damages he sustains and the cost of the suit, including a reasonable attorney’s fee. . . .” 

18 U.S.C. § 1964(c).

Section 1962(c) makes it “unlawful for any person employed by or associated with

any enterprise engaged in” activities affecting “interstate or foreign commerce. . . to

conduct or participate, directly or indirectly, in the conduct of such enterprise’s affairs

through a pattern of racketeering activity.” 18 U.S.C. § 1962(c). Thus, to allege a RICO

claim, a plaintiff “must show ‘(1) conduct (2) of an enterprise (3) through a pattern (4) of

racketeering activity.’” Heinrich v. Waiting Angels Adoption Servs., Inc., 668 F.3d 393,

404 (6th Cir. 2012) (quoting Sedima S.P.R.L. v. Imrex Co., 473 U.S. 479, 495-96, 105

S.Ct, 3275 (1985)). “A plaintiff must allege each element . . . to properly state a claim”

for RICO. Id. In addition, a plaintiff must show injury to his business or property. 

Jackson v. Sedgwick Claims Mgmt Serv’s, Inc., 731 F.3d 556, 562 (6th Cir. 2013) (en

banc). Section 1962(d) adds as an additional element “the existence of an illicit

agreement to violate one of RICO’s criminal provisions. Heinrich, 668 F.3d at 411

(quoting United States v. Sinto, 723 F,2d 1250, 1260 (6th Cir. 1983).

To prevail under Section 1962(c), a plaintiff “must set forth allegations to

establish that the defendant conducted or participated, ‘directly or indirectly, in the

conduct of [the RICO] enterprise’s affairs.” Ouwinga v. Benistar 519 Plan Serv’s, 694

F.3d 783, 791-92 (6th Cir. 2012) (citing (18 U.S.C. § 1962(c) (brackets in original)). 

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Participation in the conduct of an enterprise’s affairs requires proof that the defendant

participated in the “operation or management” of the enterprise. Reves v. Ernst & Young,

507 U.S. 170, 183, 113 S.Ct. 1163 (1993). Defendants must have “conducted or

participated in the conduct of the ‘enterprise’s affairs,’ not just their own affairs.” Id. at.

185 (emphasis in original).

In order to establish the existence of an ‘enterprise’ under Section 1962(c)

a plaintiff is required to prove: (1) an ongoing organization with some sort

of framework or superstructure for making and carrying out decisions; (2)

that the members of the enterprise functioned as a continuing unit with

established duties; and (3) that the enterprise was separate and distinct from

the pattern of racketeering activity in which it engaged.

United States v. Chance, 306 F.3d 356, 372 (6th Cir. 2002 (citing Frank v. D’Ambrosi, 4

F.3d 1378, 1386 (6th Cir. 1993).

A “pattern of racketeering activity” requires, at a minimum, two acts of

racketeering activity, 18 U.S.C. § 1961(5). Though two predicate acts are necessary they

“are not necessarily sufficient[;] a plaintiff must show that the racketeering predicates are

related, and that they amount to or pose a threat of continued criminal activity.” 

Ouwinga 694 F.3d at 795 (quoting H.J., Inc. v. Nw. Bell Tel. Co., 492 U.S. 229, 237-39,

109 S.Ct. 2893 (1989); Brown v. Cassens Transp. Co., 546 F.3d 347, 354 (6th Cir. 2008)

(although necessary to sustain a RICO claim, the pleading of two predicate acts may not

be sufficient because § 1961(5) “assumes that there is something to a RICO patter

beyond the number of predicate acts involved.”) “Predicate acts extending over a few

weeks or months and threatening no future criminal conduct do not satisfy [the

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continuity] requirement.” H.J. Inc., 492 U.S. at 242.

“Predicate acts” which comprise “racketeering activity “are defined in 18 U.S.C. §

1961(1)(B) as including any act ‘indictable’ under certain enumerated criminal statutes,

including 18 U.S.C. § 1341, which makes mail fraud a criminal offense, and 18 U.S.C. §

1343, which makes wire fraud a crime.” Schreiber Distributing Co. v. Serv-Well

Furniture Co., 806 F.2d 1393, 1399 (9th Cir. 1986).

Here, ABI makes passing reference to four purported predicate acts: violation of

the Michigan conversion statute, M.C.L. § 600.2919a; mail fraud, 18 U.S.C. § 1341;

wire fraud, 18 U.S.C. § 1343; and bank fraud, 18 U.S.C. § 1344. The Michigan

conversion statute is a tort statute, not a criminal statute, and a violation of that statute

does not constitute a predicate act that may support a RICO claim, see 18 U.S.C. §

1961.

13 And, only a defrauded financial institution may assert bank fraud as a predicate

act for a federal RICO claim. See W&S Life Ins. Co. v. JP Morgan Chase Bank, N.A.,

2014 WL 5308422 at * 22 (S.D. Ohio Oct. 16, 2014); Tunne v. Hendrick, 2012 WL

3644825 at * 13 (W.D. Ky. Aug, 24, 2012); Infocision Mgmt. Corp. v. Foundation for

Moral Law, Inc., 2009 WL 650282 at * 9 (N.D. Ohio Jan. 14, 2009); Herrick v. Liberty

League Int’l, 2008 WL 2230702 at * 4 (S.D. Ohio May 28, 2008).

13 With respect to violations of state statutes, only acts or threats involving

“murder, kidnapping, arson robbery, bribery, extortion, dealing in obscene matter, or

dealing in a controlled substance” . . . which are “chargeable under State law and

punishable by imprisonment for more than one year” may constitute predicate acts for

purposes of RICO. 18 U.S.C. § 1961(1).

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To allege a violation of the mail fraud statute

it is necessary to show that (1) the defendants formed a scheme or artifice

to defraud; (2) the defendants used the United States mails or caused a use

of the United States mails in furtherance of the scheme; and (3) the

defendants did so with the specific intent to deceive or defraud.

Central Distributors of Beer, Inc. v. Conn, 5 F.3d 181, 183-84 (6th Cir. 1993) (some

internal punctuation omitted). Courts have interpreted the wire fraud statute as having

essentially the same elements as the mail fraud statute except for the use of the wires

instead of the mails. United States v. Bibby, 752 F.2d 1116, 1126 (6th Cir. 1985); see

also United States v. Merklinger, 16 F.3d 670, 678 (6th Cir. 1994).

JIRA Defendants

Despite bringing its RICO claim in this action against all Defendants, ABI makes

no allegations concerning the activities of any of the JIRA Defendants. The sum total of

Plaintiff’s allegations in support its RICO claim concern alleged actions of Howard &

Howard and various non-parties. The fact that some of the non-party individuals alleged

to have participated in the “Ruark Enterprise” were affiliated with some of the JIRA

Defendants is not enough to make out a fraud-based RICO claim against these

defendant-entities.

Fed. R. Civ. P. 9(b) requires that a plaintiff alleging fraud plead such fraud with

particularity as to the circumstances constituting the fraud. See Fed. R. Civ. P. 9(b). 

“Courts rigorously enforce Fed. R. Civ. P. 9(b)’s pleading requirements in RICO cases in

which the predicate acts are mail fraud and wire fraud, and have further required specific

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allegations as to which defendant caused what to be mailed (or made which telephone

calls), and when and how each mailing (or telephone call) furthered the fraudulent

scheme.” Thomas v. Daneshgari, 997 F. Supp. 2d 754, 763 (E.D. Mich. 2014) (citations

omitted). Plaintiff here alleges no particular facts that would constitute a legitimate

RICO predicate act of mail or wire fraud, does not state which JIRA Defendant did what

act(s) or when, nor has ABI stated any injury to its business as a result of any act or

omission by the JIRA Defendants. Though Plaintiff does state that it was injured to the

extent that it lost its membership interests in and lost receivables of the New Plaintiffs, as

explained above, ABI’s interest in those entities became the property of FirstMerit by

virtue of ABI’s default on the loan guaranty and FirstMerit’s foreclosure -- not because

of the subsequent sale of the Pledged Assets by FirstMerit to the JIRA Defendants.

The Court, therefore, concludes that Plaintiff has failed to state a claim for

violation of RICO against any of the JIRA Defendants.

Howard & Howard

The RICO predicate acts which Plaintiff alleges were perpetrated by Defendant

Howard & Howard can be divided into two categories: (1) allegations concerning a

misrepresentation made to FirstMerit Bank, and (2) allegations concerning a

misrepresentation made to another lender Contemporary Health Care Fund I, L.P.

(“CHC”) in connection with an entirely unrelated loan transaction.

CHC provided Kevin Ruark financing to facilitate the growth of certain of his

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businesses in 2009 and 2010. When Ruark subsequently defaulted on the CHC loan, he

requested that CHC forbear on collection and asked that the lender restructure the loan. 

CHC agreed to do so. ABI alleges that Howard & Howard made fraudulent statements

in communicating with CHC during the CHC loan restructuring. The allegations of

fraud perpetrated against CHC consist of the following:

52. Attorney Booth, while employed by Howard & Howard, directly

participated in Defendants’ fraudulent enterprise by drafting

correspondence to CHC that contained materially false representations

regarding certain assets owned by Kevin Ruark. Booth authored this letter

in order to secure a refinancing from CHC in furtherance of the Ruark

Enterprise’s goals of acquiring, partnering with, and looting the assets of

viable HHCCs. Booth communicated this letter to CHC via email and/or

regular mail.

***

199. Howard & Howard also made express representations in support of

Ruark’s quest to restructure and expand the CHC Loan. CHC which

represented that Ruark, directly or indirectly, wholly owned the Michigan

Entities (the “H&H Letter”). The H&H Letter expressly stated that Ruark

wholly owned Superior, Superior wholly owned Life Care; and Life Care

wholly owned FHHS. Howard & Howard communicated the July 3, 2012

letter to CHC via email and/or regular mail.

200. In reliance on Ruark’s representations and documents, and

specifically in reliance upon the H&H Letter, CHC agreed to forbear from

exercising and enforcing its rights arising from existing defaults under the

original CHC Loan and instead entered into the Second Amended and

Restated Loan Agreement, dated July 3, 2012 (the “Second CHC Loan”).

***

207. Moreover, Howard & Howard’s Letter was knowingly false when

drafted and submitted to CHC by Brandon Booth to fraudulently induce the

closing of the Second CHC Loan.

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***

209. Ruark and Howard & Howard knowingly and intentionally misled

CHC into believing that Ruark owned the Michigan Entities [the assets of

which were provided as collateral] on the date of the CHC closing and was

authorized to cause them to execute the Loan Documents and pledge their

assets, under circumstances where they knew that Ruark did not own the

Michigan Entities and did not have authority to bind them to the

restructured CHC Loan.

210. As a result of Ruark’s fraudulent representations, CHC agreed to

forebear from the exercise of its rights and remedies arising from the

outstanding defaults under the Original Loans, and agreed to enter into the

Loan Documents pursuant to which it re-issued existing debt and lent

additional funds to the Borrowers.

[See First Amended Complaint, ¶¶ 191-210.]

The sum and substance of these allegations is that Howard & Howard defrauded

CHC by an opinion letter dated July 3, 2012, stating that Kevin Ruark owned or had

ownership interests in several entities, which ABI claims he did not actually have. See

First Amended Compl., ¶ 199. However, even if this letter was, as ABI claims,

fraudulent, ABI does not allege any injury to its business or property as a result of it. 

ABI only state that as a result of the letter, CHC “agreed to forbear from the exercise of

its rights and remedies. . . .” Id. at ¶ 200. But ABI has not alleged any connection

between ABI and CHC so even if by forbearing from the exercise of its rights and

remedies somehow injured CHC, there is no injury to ABI alleged. Nothing shows any

involvement by ABI in the financing CHC extended to Kevin Ruark, nor are there any

allegations of ABI’s interests in the entities to which financing was extended.

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If CHC believes it has been the victim of criminal conduct it certainly is capable

of bringing suit itself,

14 and according to ABI, it already has a money judgment against

Kevin Ruark for $4,200,000. [First Amended Compl., ¶ 234,] RICO does not allow

ABI to seek relief under RICO when it has not been injured. See Jackson v. Sedgwick

Claims Mgmt Serv’s, supra, 731 F.3d at 562. Because ABI fails to allege any harm to its

business or property as a result of the alleged fraudulent opinion letter lent to CHC, ABI

cannot state a claim against Howard & Howard for violation of RICO based on the CHC

opinion letter.

Similarly, ABI cannot establish that its alleged injury -- i.e., the loss of the Pledge

Assets at the foreclosure sale -- was caused by Howard & Howard’s alleged fraudulent

statement to FirstMerit Bank. ABI’s allegations of fraud relating to FirstMerit are as

follows:

54. Howard & Howard facilitated the purchase of the ABI Subsidiaries’

assets and ABI’s membership interests in the ABI Subsidiaries by

representing to and assuring FirstMerit, through its counsel, that the Ruark

Individuals were legally authorized to engage in the transaction without

violating the Oakland County Circuit Court’s order. Booth’s

representations to FirstMerit’s counsel were patently untrue at the time he

made them. In fact, the Ruark Individuals were ultimately held in contempt

of court by entering into the transaction with First Merit because it violated

14 See e.g., Hemi Group, LLC v. City of New York, NY, 559 U.S. 1, 12 (2010)

(“The State certainly is better situated than the [Plaintiff] City to seek recovery from

[Defendant] Hemi. And the State has an incentive to sue....”); Anza v. Ideal Steel Supply

Corp., 547 U.S. 451, 460 (2006) (“[Plaintiff] Ideal acuses the [Defendant] Anzas of

defrauding the State out of a substantial amount of money. If the allegations are true, the

State can be expected to pursue appropriate remedies.”)

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the Oakland County Circuit Court’s “non-compete” order.

***

56. In September 2014, FirstMerit’s counsel stated to ABI’s counsel that

it would never have entered into the purchase agreement with the Ruark

Individuals if it had known that the transaction violated the Oakland

County Circuit Court order.

57. FirstMerit Senior Vice President Charles Flint confirmed that, had

FirstMerit known that its sale of assets to the Ruark Individuals would have

violated a court order, FirstMerit wold not have conducted the transaction

with the Ruark Individuals.

***

128. FirstMerit engaged in negotiations with the Ruark Individuals and

Howard & Howard in spite of the fact that FirstMerit knew that ABI had

another financier lined up, Peachtree Equity Partners, to purchase its debt

from FirstMerit received from the Ruark Individuals. During these

negotiations, Howard & Howard sent numerous email communications to

FirstMerit’s representatives, including drafts of purchase agreements.

***

142. If FirstMerit had not consummated a sale to the Ruark Individuals, it

would have undertaken a transaction with Peachtree, which was the only

other “suitor” at the time. On information and belief, Peachtree intended to

purchase FirstMerit’s loan position and not the assets of ABI or the ABI

Subsidiaries. On information and belief, Peachtree also intended to

provide additional financial support to ABI and the ABI Subsidiaries on a

going forward basis.

***

144. Prior to November 7, 2013, to induce FirstMerit to enter the sale, the

Ruark Individuals (most specifically, Jason Laing) and Howard & Howard

(by its partner, attorney Brandon Booth) expressly represented to FirstMerit

that the transaction would not violate any agreements or court orders which

bound or applied to the purchasers.

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145. On Thursday, September 4, 2014 via telephone, counsel for

FirstMerit Bank, Donald F. Baty (“Baty”) told ABI’s counsel that Howard

& Howard attorney Brandon Booth expressly represented to him that the

asset foreclosure sale would not violate any court orders. Baty further

stated that Booth’s representation to Baty was the reason that a warranty

and representation to that effect was expressly included in the sale

agreements. Howard & Howard communicated its representations via

telephone calls and emails.

146. On September 4, 2014, Baty stated to ABI’s counsel that FirstMerit

relied upon the statements made by Brandon Booth/Howard & Howard

and, had FirstMerit believed or known that entering into the asset

foreclosure sale would violate court orders, FirstMerit would not have

entered into the asset foreclosure sale with the Ruark Individual sand the

JIRA Entities.

***

175. If not for the concerted actions of Howard & Howard and the Ruark

Individuals, Peachtree Equity Partners and/or certain other of ABI’s

financing sources would have purchased FirstMerit Bank’s position and

made additional investments and loans to ABI to finance and support

operations. Indeed, at the time of the November 7, 2013 foreclosure sale,

Peachtree was the only other party seeking to consummate a deal with

FirstMerit.

176. Another particularly injurious result of the Ruark Individuals’ and

Howard & Howard’s actions is that formerly aligned plaintiffs (ABI and its

subsidiaries Subsidiary Companies) purportedly became adverse to one

another it the Oakland County Litigation and had to find new counsel

under applicable ethics rules.

177. Though FirstMerit was the financial institution upon which this

particular fraud was perpetrated, ABI was the actual and intended target

and victim of the fraud and a direct victim of the Ruark Individuals’ and

Howard & Howard’s fraudulent scheme to purchase ABI’s assets.

[See First Amended Complaint].

To state a claim for violation of RICO, the plaintiff must show that a predicate

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offense”not only was a ‘but for’ cause of [its] injury, but was the proximate cause as

well. Hemi Group, LLC v. City of New York, NY, 559 U.S. 1, 9 (2010). Proximate

causation requires “some direct relation between the injury asserted and the injurious

conduct alleged.” Id. (citation omitted). “A link that is too remote, purely contingent, or

indirect, insufficient.” Id. “When a court evaluates a RICO claim for proximate

causation, the central question it must ask is whether the alleged violation led directly to

the plaintiff’s injuries.” Anza v. Ideal Steel Supply Corp., 547 U.S. 451, 461 (2006).

“A predicate act does not proximately cause an injury if it merely furthers,

facilitates, permits or conceals an injury to happen or could have happened independent

of the act.” Vicon Fiber Optics Corp. v. Scrivo, 201 F. Supp. 2d 216 (S.D.N.Y. 2002)

(citation omitted). 

To sustain its RICO claim in this case, ABI’s asserted injury -- loss of its Assets --

must have come about “by reason of” the predicate mail or wire fraud allegedly

perpetrated by Howard & Howard against FirstMerit. The fatal flaw in ABI’s claim is

that the conduct causing the supposed harm -- ABI’s failure to comply with its loan

obligations resulting in the sale of the Pledged Assets -- is distinct from the conduct

giving rise to the alleged fraud -- Howard & Howard’s alleged statement to FirstMerit

that the asset foreclosure sale would not violate any court orders. In other words, without

ABI’s default on the FirstMerit Loan there could not have been a sale of the assets in the

first place. Therefore, ABI cannot establish the Howard & Howard’s alleged predicate

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offense proximately caused its supposed injury. Accordingly, ABI’s RICO claim against

Howard & Howard must be dismissed.

D. ABI CANNOT STATE A CLAIM OF RICO CONSPIRACY

Section 1962(d) makes it unlawful for any person to conspire to violate RICO’s

criminal prohibitions. 18 U.S.C. § 1962(d). To state a RICO conspiracy claim, the

plaintiff must successfully allege all the elements of a RICO violation, as well as allege

“the existence of an illicit agreement to violate the substantive RICO provision.” United

States v. Sinito, 723 F.2d 1250, 1260 (6th Cir. 1983). As set forth above, ABI has failed

to make out a claim for a violation of RICO. Therefore, it also has not claim under

Section 1962(d) for RICO conspiracy.

For all of the foregoing reasons, Plaintiffs’ claims for violation of RICO are

DISMISSED, with prejudice.

E. THE COURT DECLINES TO EXERCISE SUPPLEMENTAL JURISDICTION

OVER THE REMAINING STATE LAW CLAIMS 

A district court “may decline to exercise supplemental jurisdiction” if “the district

court has dismissed all claims over which it has original jurisdiction.” 28 U.S.C. §

1367(c)(3). District courts have “broad discretion in deciding whether to exercise

supplemental jurisdiction over state law claims.” Musson Theatrical v. Fed. Express

Corp., 89 F.3d 1244, 1254 (6th Cir.1996). Generally, “[w]hen all federal claims are

dismissed before trial, the balance of considerations usually will point to dismissing the

state law claims, or remanding them to state court if the action was removed.” Id. at

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1254-55. In fact, the Sixth Circuit has directed that “the usual course is for the district

court to dismiss the state-law claims without prejudice if all federal claims are disposed

of on summary judgment.” Brandenburg v. Housing Authority of Irvine, 253 F.3d 891,

900 (6th Cir. 2001). This is particularly true where, as here, the remaining state law

claim entirely dominates the case at this point in the proceedings. See 29 U.S.C. §

1367(c)(2), (3). This rule accords with principles of federalism: “Needless decisions of

state law should be avoided both as a matter of comity and to promote justice between

the parties, by procuring for them a surer-footed reading of applicable law.” Gibbs, 383

U.S. at 726, 86 S.Ct. 1130. These comity interests further persuade the Court that it

should not exercise jurisdiction over the state law claims in this case where ther remains

pending (albeit presently stayed) a state court action, in which some or all of these claims

may have been, or could have been, raised.

Guided by the foregoing principles, the Court concludes that it should decline to

exercise supplemental jurisdiction over Plaintiffs’ remaining conversion/aiding and

abetting and declaratory judgment claims in Counts II, IV and V.

15 Therefore,

CONCLUSION

For all of the reasons stated above in this Opinion and Order,

IT IS HEREBY ORDERED that Defendants’ Motions to Dismiss [Dkt. Nos. 35

15 As noted above, Plaintiffs have withdrawn their constructive trust claim in

Count III, and that claim, accordingly, is DISMISSED, without prejudice.

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& 36] are GRANTED, as follows:

(1) The JIRA Defendants’ Fed. R. Civ. P. 12(b)(1) Motion to Dismiss the claims

of the claims of the New Plaintiffs JIRA Holdings, KJJ Holdings, Health Care Partners,

SWHHC Holdings, SWHHC Management, SWHHC-Central Texas, SWHHC-Harris,

SWHHC-East Texas, and SWHHC-Dallas is GRANTED, and the claims asserted on

behalf of these plaintiffs are DISMISSED for lack of subject matter jurisdiction.

(2) The JIRA Defendants’ and Howard & Howard’s Fed. R. Civ. P. 12(b)(6)

Motions to Dismiss are GRANTED with respect to the RICO claims in Count I of

Plaintiffs’ First Amended Complaint, and those claims, accordingly, are DISMISSED,

WITH PREJUDICE.

The Court having concluded that it should decline to exercise supplemental

jurisdiction over Plaintiffs’ remaining state law claims,

IT IS FURTHER ORDERED that Plaintiffs’ remaining state law claims are

DISMISSED, without prejudice.

Let Judgment be entered accordingly.

s/Gerald E. Rosen 

United States District Judge

Dated: September 30, 2016

I hereby certify that a copy of the foregoing document was served upon the parties and/or

counsel of record on September 30, 2016, by electronic and/or ordinary mail.

s/Julie Owens 

Case Manager, (313) 234-5135

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