NOT RECOMMENDED F OR F ULL-TEXT PUBLICATION File Na me: 13a0575n.06 Nos. 12-5739/12-6042/12-6230 UNITED STAT ES COURT OF AP P EALS F OR THE S IXTH CIRCUIT ROBERT T . STO OKSBURY, JR., P laintif f- App ellee,

v. MICHAE L L. ROSS, dba Rarity Pointe Realty, db a Rarity Realty; LTR P ROP ERTIES , INC.; RP L P R O P E R T I E S , L L C ; L C D E V E L O P M E N T C OM P A N Y , LL C ; R

A R I TY COMMU N I TI ES , I N C . ; TEL LICO LAKE P ROP ERTIES , L.P.; TEL LICO COMMU NITIES , INC.; NICK AJACK SHORE S H O L DI NG S , L L C ; R A R I T Y I N V E S T M E N T COMP ANY, LLC; RARITY CORP ORATION; RARITY MANA GEM ENT COMP ANY, LLC; RARITY RIDG E CL UB , INC.; RARITY CLUB C O R P O R A T I O N ; R A R I T Y P R O P E R T Y M A N A G E M E N T , I n c . ; B R O A D B E R R Y DEVELOPMENT COMP ANY, LLC; HIAWASSE E P ROP ERTIES LLC; RM COMP ANY, LLC; LOM D E V E L O P M E N T C O M P A N Y , L L C ; V P I COMP ANY, L L C; RE B E CC A RO SE ROSS J O R D A N ; P A T R I C I A R O S S , a s P e r s o n a l Repre sentative of the Estate of Dale Ross, Defendan ts- Appellants, and GREGORY BAK

ER, et al., Defendan ts. / ON AP P EAL F RO M THE UNITED STATE S DISTRICT COURT F OR THE EASTE RN DI STRICT OF TENNES SEENos. 12-5739/12-6042/12-6230

BEFORE: CLAY and COOK, Circ uit Jud ges; and OLIVE R, Distric t Judge. * CLAY, Circuit Judge. Def endants Michae l L

. Ross, the estate of his late brother, and their associate s and busi ness entit ies, (collec tively “Ross Defe ndants”), a

ppeal f rom the di strict court’s denial of their motions for a direc ted verdic t and new trial afte r a j u ry awa rded Plaintiff Robert Stooksbury , J r., over $36 milli on in da mag es on his f

eder al claims under the Racke teer I nfluenc ed and Corrupt Org anization Act (“RI CO”), 18 U.S.C. § 1962, and his state claims of fra ud and brea ch of fiduciar

y duty under Tenne ssee law. The Ross Def endants challeng e the district court’s entry of defa ult judg ment ag ainst them as a discovery sanction, its failure to g rant their pre- trial motions to dismiss on standing g rounds, and its failure to g rant their post-trial motions for judgme nt of acquittal and a new trial simil arly on stan d i ng g rounds. I nterve ning Def endant, Athena of SC, L L C (“A thena” ), appea ls from the district court’s subsequent judgme nts in which the court g rante d Plaintiff’s motions for preliminary injunction, enjoining Athena from fore closing on its secur ity interest in some of the Ross De fenda nts’ rea l property

. For the following rea sons, w e AF F IRM the district c ourt’s order s denying the motions for judgme nt as a matter of law or a new trial an d en joining Athena from fore closing on the rea l proper ty

.

The Honora

ble Solomon Oliver, J r., Chief J udg e, Un ited States District Court for the * Norther n District of Ohio, sitting by desig nation.

2Nos. 12-5739/12-6042/12-6230 BACK GR OUND A. F actual Background The following fac ts wer e establi shed by Plaintiff’s first amende d complaint. Be tween J anuar y 2004 and J une 2009, the Ross Def endants operated a fra

udulent rea l-estate enter

prise throug h various sham entities, including named defe ndant entities, controlled by Def endant Michae l Ross and his late brother. As part of this conspirac y , Ross, throug h his solely owned company , L TR Properties, I nc. (“L TR”), established Tellico L anding, L L C (“Te llico”), to develop and marke t proper ty called Rarity Ba

y , which had been purcha sed from Pla i ntiff and his associate

. Plaintiff invested as a minority partne r in Tellico, owning 25% of the company , while Ross maintained a 50% stake. Howeve r, Tellico, unbeknownst to Plaintiff, was used as y et another instrumen t i n Ross’s illega l enter

prise. Only af

t er P l aintiff filed for Tellico’s dissoluti on, leer y of R oss’s reluc tance to disclose financ ial information, did he discove r the e x istence of the enter prise. The Ross Def

endants’ enter

prise materia lly misrepre sented and falsely adver tised the amenities and value of Rarity Ba y , and other proper

ties, to incre ase s al es ; co nducted fra udulent transac tions a

nd insider deals betwee n the Ross Def endants and their associate s to inflate proper ty values; and co-ming led and conver ted Tellico funds for person a l u s e a nd to fac ilitate their enter

prise. This condu ct re s u l ted ultimately in a cra sh in proper ty values that injured investors, including Plaintiff. Plaintiff specific ally claimed that Tellico was a sham entity , i.e., an alter eg o of Ross, and that the RI CO scheme cause d him to unknowing ly contribute capital to the criminal enter prise; and that he suffe red losses from the sales of proper ty that wer e not disclosed to him, a cra sh in proper ty

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values, and conver sion of his funds and profits by the Ross Def endants for persona l use or to further the enter prise. B. P roce dural Hi story 1. The RICO Litigation I n November 2009, Pla i n t i ff fi led the instant action in district court ag ainst the Ross Def endants alleg ing violations of RI CO, 18 U.S.C. § 1962(a) –(d), and fra ud and brea ch of fiduciar

y duty under Tenne ssee law. After the claims under § 1962(a) and (b) wer e dismiss ed, a sche duling order set trial on the rema ining claims for April 2011. Shortly there afte r, in Aug ust and September 2010, Plaintiff serve d discovery reque sts on the Ross Def endants. Howeve r, b et we en t h e fall of 2010 and J anuar

y 2012, the R o s s De fendants wer e found to have frustrate d discovery in this case (as we ll as in contemporane ous state litigation). 1 The Ross Def

endants violated a J une 2011 discovery order by failing to respond to Plaintiff’s discovery reque sts and interrog ato ries from the previous y ear . Plaintiff moved for sanctions, and afte r a hear ing on Plaintiff’s motion in September 2011, the mag istrate judge rec ommended the entry of defa ult judgme nt. T h e m agistrate judge found that the Ross Def endants had a “total lack of forthrig htness” in re fu s i n g t o comply with the discovery order , respond to the district court’s inquiries, or provide an explanation fo r t h eir admitted noncompliance

. (R. 185, Report & Recommenda tion, PI D# 2679–82.) Additionally , the near 40,000-pag e discovery submissi on was

A Tenne ssee trial court, in Aug ust 2011, sanctioned the Ross Def endants that wer e parties 1 to that litigation for their “contumac ious conduct” and intentional delay afte r find i n g t h at a n ear 40,000-pag e discovery submissi on was unresponsive, lacke d basic information, such as tax returns and fina ncial stateme nts, and prejudice d Plaintiff. (R.291, Ex .7, PI D# 4001). 4Nos. 12-5739/12-6042/12-6230

an unresponsive “docume nt dump” that also failed to include Bates stamp numbers as require d. ( Id. at PI D# 2680.) The mag istrate judge conclude d that the Ross Def endants’ conduct “amount[ed] to bad fa ith and a willful dec ision not t o cooper ate in discove ry .” ( Id. ) I n November 2011, over Def endants’ objections and claims that they wer e not informed by counsel of the discovery failure s, the district court adopted the mag istrate judge ’s finding s as to the lack of forthrig htness and bad faith, but d ec l i n ed to enter a default judgme nt. I nstead, the district court imposed sanctions for attorney s’ fee s and costs and g rante d the Ross Def endants an additional ten day s to comp l y wi t h t h e J une 2011 discovery order

. The district court war ned the Ross Def endants that “fa ilure to so comply may result in the imposit ion of further sanctions, including entry of def ault.” (R.209, Or der, PI D# 2982.) N o tw it h s ta nding these war

nings, the Ross Def

endants f il e d s u p p le me n ta l r e s p o n s e s th a

t w e r e still unresponsive; they i n cl u ded boilerplate objections and failed to provide basic acc ounting documents or Bates stamp ref ere nces for the ear lier document dump. Plaintiff rene wed his motion for defa ult judgme nt. The district court, on J anuar y 30, 2012, enter ed a d ef ault judgme nt ag ainst Def endants on all claims afte r g o i n g t h rough the rele vant fac tors established in Bank One of Cleveland, N.A. v

. Abbe , 916 F.2d 1067 (6th Cir. 1990) , to f ind that: 1) Def

endants acte d willfully i n fa i l i n g to comply with the di scover y order s; 2) P laintiff was prejudice d there by ; 3) Defendan t s

wer e fairly war

ned of the possibili ty of a defa ult judgme nt; and 4) less drastic sanctions, like the fee s previously imposed, would be unavailing

. The district court denied the Ross Def endants’ later motions to set aside the defa ult judgme nt on the basis that Def endants could not p ro v e that their discovery abuses r esulted fr om excusable neg lect.

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Def endants then filed a Fe dera l Rule of Civil Proced u re 12(b)( 7) motion to dismiss for “fa ilure to join a Rule 19 party or for lack of s t an d ing.” Def endants claimed that Plaintiff lacke d RI CO standing beca

use his injury was mere ly d er i v at i v e as a minority partne r in Tellico, the true victim of the alleg ed RI CO scheme. T hat motion was denied a s untimely

. The fac tual alleg ations in the complaint wer e acc epted as true per the defa ult judgme nt, and thus trial commence d on Fe bruar y 21, 2012, solely on the issue of damag es. I n t h e first phase of trial, conce rning compensa tory damag es, the Ross Def endants called no witnesses and prese nted no evidenc e. The jury awa

rded Pl aintiff over $3.5 milli on on the R I CO violations and $11.3 milli on for the state-law claims, jointly and seve rally

ag ainst the Ross De fenda nts. I n the second phase of trial, the jury awa

rded punitive damag es in vary ing amounts ag ainst sever al of the Ross Def endants, totaling $15 milli on. The district court there afte r trebled the compensa tory RI CO damag es pursuant to 18 U.S.C. § 1964(c), there by incre asing that portion of the aw ard to $10.64 million. The Ross Def

endants moved for a direc ted verdic t and a new trial under Rules 50(b) and 59, respe ctively

. They challeng ed the entry of defa ult judgme nt, the subsequent denial of their motion to set aside the defa

ult judgme nt, Plaintiff’s RI CO standing , and the evidentiar y basis on which the jury awa rded RI CO d am age s . The district court denied the motions, finding , in rele vant part: 1) Def endants’ claims that they complied with discovery lacke d merit; and 2) Plainti ff ’s amende d complaint sufficie ntly established RI CO standing in that he was direc tly and proxi mately injured by the Ross Def

endants’ RI CO predic ate acts independe nt of Tellico. The Ross Def endants timely appea led.

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2. P relim inary Injun ctions During the above- descr ibed di s co v er y ab uses, in September 2011 (ar ound the time of the mag istrate judge ’s rec ommendation of a defa ult judgme nt), the Ross De fenda nts be g an convey

ing milli ons of dollars’ worth of assets t o v arious entities controlled by Def endant Michae l Ross’s associate , Ted Doukas. One of the entities to which as s ets wer e convey ed was intervening defe ndant, Athena. Specifica lly , at i s s u e o n appea l is Athena’ s secur ed interest in Rarity Ba y condom i n i u m s and lots, owned respe ctively by two Ross Def endants, L TR and Tellico L ake P ro p erties, L P (“TL P”). SunTrust Ba nk transfe rre d notes that encumbe red the rea l proper ty , (t h e “SunTrust notes”), to a non-par ty , T en n es s ee L and and L akes (“Te nnessee L and”) , who in turn transfe rre d the not es t o Athena throug h what appe are d to be a f acia lly valid deed of

trust. Athena later soug ht to forec lose on its interest in the rea l property

. On April 19, 2012, Plaintiff m o v ed t h e district court to bar the Ross Def endants from transfe rring their assets and for the c ourt to appoint a rec eiver

. He later moved to e njoin Athe na’s fore closure on L TR’s condominiums pending the rec eiver ’s repor t. A mag istrate judge g rante d the motion for a rec eiver afte r deter mining that Plaintiff had a valid claim resulting from the jury verdic t; that fra udulent conduct had likely occur red, and would likely continue to occur , to frustra te Plaintiff’s claim if the court did not appoint a rec ei v er ; t h at there was an imminent dang er that proper ty would diminis h in value or be lost in transfe rs, particula rly in convey ance s to Athena; and that other leg al and eq u itable reme dies would be insufficient to protec t Plaintiff’s interest. The district court there afte r g rante d the motion to enjoin At h e na’s fore closure on the L TR condominiums until a rec eiver could deter mine the proper dispositi on of the Ross De fe n d ants ’ assets. The

7Nos. 12-5739/12-6042/12-6230

injunction was g rante d for many of the same rea sons stated by the mag istrate judge , and particula rly in light of the timing of various transfe rs to Athena and other entities owned by Doukas, which sug g ested that Athena was acting in conce rt with the Ross Def endants to conce al proper ty

. Athena moved to vacate the injunction, which the district cour t denied. A couple months later, P l aintiff moved for a second injunction to enjoin Athena from fore closing on the Rarity Ba y lots owned by TL P, pending compl etion of the Rece iver’s repor t. After finding that the SunTrust notes encumbe ring T L P ’s lots wer e rela ted to the series of transac tions—including t he transfer and attempted forec losure of L TR’s condominiums—already found likely to be fra

udulent, the district court g rante d the second motion for an injunction. Athena timely appea led both injunctive order s. DISCUSSIO N We ta ke in tur n below eac h of the claims on appea l to find that the district court did not err in: 1) enter ing the defa

ult judgme n t or denying Def endants’ motion to set it aside; 2) denying the Rule 12(b)( 7) motion; 3) finding that Plaintiff had established standing and proxi mate cause to support the jury awa

rd; and 4) enjoining Athena from fore closing on the rea l proper ty owned by L TR and TL P pending the Rece iver’s r eport. I. Default Jud gm ent A. Stand ard of Review an d App licable Law We revie w for an abuse of discretion the order of a defa ult judgme nt pursuant to Fe dera l Rule of Civil P roce dure 37, Bank One , 916 F.2d a t 1073, and the denial of a motion to set aside def ault pursuant to Rule 60(b), Bur rell v. Hende rson, 434 F.3d 826, 831 (6th Cir. 2006). Whil e “[j] udg ment

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by defa ult is a drastic step which should be resor ted to only in the most extreme case s,” United Coin Mete r Co. v. Seaboard Coastli ne R.R. , 705 F.2d 839, 845 (6th Cir. 1983), the district court does not abuse its discretion in enter ing a default judgme nt wher e a “par ty has t he abilit y to comply with a discovery order and does not,” Bank One , 916 F.2d at 1073 (q u o t i n g R eg’l Refuse Sys. v. Inland Rec lamation Co. , 842 F.2d 150, 154 (6th Cir. 1988)). I n revie wing the defa ult judgme nt order , we consider: 1) whether the defa ulting party ’s failure to cooper ate with discovery was willful and in bad faith as oppose d to an inabili ty to cooper ate; 2) whether the adversar y was prejudiced; 3) whether the def aulting pa rty was wa rned tha t his failure to coope rate could lead to a defa ult judg ment; a

nd 4 ) wh ether less drastic sanctions wer e imposed or considere d befor e the defa ult judgme nt wa s order ed. Id. B. Analysis I n the instant case , the Ross Def endants asser

t first that they substantially complied with the discovery order as demonstrated by the near 40,000-pag e discovery submissi on, and second, that the district court should have imposed a less-seve re sanction. The rec ord demonstrates that both contentions lack merit. The mag istrate judge and district court (as well as the state court) found that the discovery submissi on was mere ly a document dump of mostly unresponsive information and that the Ross Def

endants failed to provide even the most basic acc ounting information, s u ch as tax returns, financ ial statements, and bank rec ords. More o v er, the Ross Def endants failed to comply with two discovery order s, i.e., the J une and November 2011 order s, which require d them to identify the documents produce d by Bates stamp numbers and complete the discovery that was re q u ested

more than one y ear ear lier. Fur ther, their counsel admitted their noncompliance with respe ct to the

9Nos. 12-5739/12-6042/12-6230

J une order befor e the mag istrate judge

. Thus, the contenti o n that they substantially complied is simply belied by the re cord. To their second point, we find that the district court proper ly established all of the Bank One fac tors to suppor

t the entry of defa

ult judg ment. For the first fac tor, willful c onduct and bad faith, the mag istrate judge detailed how the Ross Def endants lacke d forthrig htness, failed t o direc tly respond to the C ourt ’s inquiries about t he dis cover y matters, offere d no explanation for their lack of compli ance , and d emonstrated “bad faith and a willful decision not to cooper ate in discovery .” (R.185, at PI D# 2680.) Fur ther, this finding was bolstered by the Ross Def endants’ continued failure to comply afte r the district court g rante d them a 10-day extension or respond to Plaintiff’s rene wed motion for defa

ult judgment. Turning to the second fac tor, prejudice to Plaintiff, the district court noted that the discovery dispute had been ong oing for over a y ear despite the Plaintiff’s eff orts and the court’s intervention, and that two continuance s had alre ady been g rante d, thus delay ing the proce eding s. The discovery abuses imposed excessive costs o n Plaintiff, who had to sort throug h the document dump, and undermined Plaintiff’s proof on the issue of liability

. I ndeed, the trial was less than a month a way when the district court was forc ed to enter defa ult judgme nt o n P l ai ntiff’s motion that the Ross Def endants fa iled to even c ontest. Finally , turning to the third and fourth Bank One fac tors, whether the Ross Def endants wer e fair ly w a r n ed and whether less-seve re sanctions wer e considere d, we find that both wer e established. The Ross Def

endants’ first war

ning arg uably came from the mag istrate judge whose

rec ommendation of a defa ult judgme nt for their discovery abuses was not acc epted by the d i s t ri ct

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court. I f that was not a clea r indication that a defa

ult judgme nt was possible, the district court, afte r enter ing a less-seve re sanction for the violation of the J une discovery order , specific ally war ned the Ross De fenda

nts tha t a defa

ult judg ment could result from continued noncompliance

. Despite the fair war ning and imposit ion of a less-seve re sanction, the Ross Def endants failed to comply with the ten-da y extension or explain why they did not comply

. I t a

ppear s that the Ross De fenda nts f orce d the district court’s hand in order ing the defa ult judgme nt; there fore , we find no abuse of discretion. See B ank One , 916 F.2d a t 1078–79. C. Rule 60(b) Mot ion Wit h respe ct to the claimed err or in the district court’s denial of the Rule 60(b) motion, the Ross Def endants place blame on their attorney s, alleg ing that they wer e unaware of t h e discovery failure s and Plaintiff’s rene wed motion for defa ult judgme nt. Even assuming this to be true, which is belied by the rec ord, the Ross Def endants’ claim does not justif y setting aside the defa

ult judgme nt. Although this C o u rt i s reluctant to uphold a defa ult judgme nt on acc ount of an err ant attorney , Buck

v. United States De

p’t of Agric. , 960 F.2d 603, 608–09 (6th Cir. 1992), clients are g ener ally liable for the acts and omissions of their counsel, Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. , 507 U.S. 380, 396–97 (1993). The discovery abuses here did not amount to “mistake, inadver tence , surprise, or excusable neg lect” so as to justify relief under Rule 60(b)( 1). See Capitol Indem

. Corp. v. Jellinick , 75 F. App’ x 999, 1001–03 (6th Cir. 2003). And while the district court may exercise its discretion to g rant relief under Rule 60 (b)( 6) wher e, despite the counsel’s inexcusable conduct, the moving party “display ed rea sonable diligenc e in attempting to discover the status of his case ,” Fuller v. Quire , 916 F.2d 358, 361 (6th Cir. 1990), there is no evidenc e that such

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was the case here

. What we have here is a “cle ar rec ord of delay ,” near ly one and a half y ear s to be prec ise, and findings o f “c o n t umacious conduct” such that the entry of defa ult judgme nt was

war rante d in this case. Buck, 960 F.2d a t 608. I n sum, we fi n d t h at the district court did not abuse its discretion in enter ing the defa ult judgme nt or denying the Rule 60(b) motion. II. 12(b)(7) M otion - RICO Standi ng versus Artic le III Stand ing The Ross Def

endant s’ next claim of err or is that the district court improperly denied their Rule 12(b)( 7) motion as untimely when it raised the issue of RI CO standing afte r the entry of defa ult judgme nt. Such a deter

mination would undoubtedly be err oneous if the motion raised jurisdictional challeng es, which can be raised at any time. See Arbaugh v. Y & H C o r p . , 5 4 6 U.S

. 500, 508, 514 (2006). The Ross Def

endants asser

t that RI CO standing is jurisdictional such that the district court

was require d to consider the arg ument at any time during the litigation. They appar ently confuse the statutory standing require ments of RI CO, under 18 U.S.C. § 1964(c) , wi t h Ar t i cle I I I standing

. Article I I I standing , which require s a “conc rete and particula rized” injury to be “fa irly trac eable ” to the defe ndant’s conduct and be redr essable, Heartwood, Inc. v. Agpaoa , 628 F.3d 261, 266 (6th Cir. 2010), is less onerous than RI CO standing , which require s that the injury be direc tly cause d by the defe ndant’s pre dicate acts, Perry v. Am. T obacco Co., Inc. , 324 F.3d 845, 848 (6th Cir. 2003). I n confla ting the two require ments, the Ross Def endants fail to adequately explain why RI CO standing should be construed as jurisdictional. Our revie w of the case law leads us to conclude that, contra ry to Defe ndants’ conc lusory asser tion, RI CO standing is not jurisdictional.

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I n rec ent y ear s, the Supreme Court has urg ed courts to ref rain from l ab el i n g ru l es as jurisdictional “[b] eca

use the conseque nces that attach to the jurisdictional label may be so drastic.” Hende rson ex rel. Hende rson v. Shinseki , — U.S. —, 131 S.Ct

. 1197, 1202 (2011). I ndeed, courts

are oblige d to raise j u ri s d i ct i onal matters sua sponte and jurisdictional rules defy all time limit s established for raising various matters in a litigation, and can prejudice a preva iling party and waste judicial resour ces w hen conside red a fter a case has bee n resolved. Id. Thus, “[n] ot all mandatory ‘pre scriptions, howeve r emphatic, are . . . proper ly ty ped ‘jurisdictional.’’” Union Pac. R.R. Co. v. Brotherhood of

Locomotive Eng’rs & Trainmen , 558 U.S. 67, 81 (2009) (quoting Arbaugh , 546 U.S. at 510 (interna l quotation marks om i t t ed )). Only those “delineating the classes of case s (subjectmatter juri s d i ct i on) and the persons (per sonal jurisdiction) falling within a court’s adjudicator y authority ” should be c lassified as “ jurisdictional.” Kontrick v. Ry an , 540 U.S. 443, 455 (2004). I n Arbaugh , the Court established a “re adily administrable b rig ht line” test for assessing whether statutory require ments, such as RI CO standing, a re jurisdictional: I f the L eg islature cle arly

states t hat a threshold l imitation on a statute’s scope sha ll count as jurisdictional, the n courts and litiga nts w ill be duly instructed and will not be left to wre stl e wi t h t h e issue

. . . . But when Congr ess does not rank a statutory limit ation on a cover ag e as jurisdictional, c ourts should tre at the restric tion a s nonjurisdictional in chara cter

. 546 U.S. at 515–16 (footnote a nd citation omitted). Section 1964(c) lacks any lang uag e which sugg ests that the direc t injury require ment is jurisdictional. See 18 U.S.C. § 1964(c)

. Fur ther, it is not a delineation of the persons or classes of

case s falling under the court’s power . See Kontrick , 540 U.S. a t 455. Rather, Congr ess expressly used subsection (a) instead to define the class of case s falling within the fede ral courts’ adjudicator y

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authority

. See 18 U.S.C. § 1964(a) (“The district courts of the United States shall have jurisdiction to preve nt and restra in [R I CO] violations

. . . by issuing appropr iate order s . . . .”). Moreove r, RI CO standing , particula

rly the issue of proxi mate cause , is sufficie ntly intertwined with the merits, which also counsels ag ainst considering the question to be jurisdictional in nature

. See Steel Co. v. Citi zens for a Better Env’t , 523 U.S. 83, 97 & n.2 (1998); see also Lerner v. Fleet Bank, N.A. , 318 F.3d 113, 129–30 (2d Cir. 2003). Acc ording ly , we must disag ree with the Ross Def endants and find that RI CO standing is a non-jurisdictional issue. This conclusion alig ns with our prec edent wher e, althoug h we have not explicitl y ruled on the is s u e, we have trea ted RI CO standing as a non-jurisdictional matter. See Troll inger v. Tyson Foods, Inc. , 370 F.3d 602, 612–15 (6th Cir. 2004) (treating as distinct issues subject matter jurisdiction and RI CO standing nece ssary for stating a claim). We also find support in the case s of

our sister circ uits that have either expli citly or implicitl y found RI CO standing to be nonj u risdictional. See, e.g. , Canyon Cnty. v. Syngenta Seeds, Inc. , 519 F.3d 969, 974 & n. 7 (9 t h C i r. 2008) (noting that RI CO standing is non-jurisdictional wher e Article I I I s t anding is alre ady established); Anderson v. Ayling , 396 F.3d 265, 269 (3d Cir. 2005) (“Civil R I C O ‘standing ’ is usually viewed as a 1 2 (b )( 6 ) question of stating an actionable claim, rathe r than as a 12(b)( 1) question of subject matter jurisdiction.”); Lerner , 318 F.3d at 129 (collec ting case s). But see Evans

v. Ci t y o f C h i ca g o , 434 F.3d 916, 924 (7th Cir. 2006) (finding that the causation and injury require ments of RI CO were jurisdictional require ments). Consequently , beca

use Plaintiff’s RI CO standing , i.e., whe t h er his injury was sufficie ntly direc t under 18 U.S.C. § 1964(c) , is non-jurisdictional, the proper question is whether the district

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court abused i ts discretion in finding the Ross Defe ndants’ 12(b) (7) motion untimely

. See Inge v. Rock Fin. Corp. , 281 F.3d 613, 625 (6th Cir. 2002) (re viewing for a n abuse of discretion a district court’s de nial of motion to amend on untimeliness gr ounds under Rule 16(b)); Stough v. May ville Cmty. Sch. , 138 F.3d 612, 614 (6th Cir. 1998) (re viewing for an abuse of discretion dis m issal for noncompliance with local rules). W e fi n d t h at it did not. The motion was not only well past the deadline for dispositi ve motions, but the entry of defa u l t judgme nt barr ed any merits-base d challeng es i nsofar as P laintiff’s complaint sufficie ntly pleade d RI CO standing

. See U nited States v. Conce s , 507 F.3d 1028, 1038–39 ( 6th Cir. 2007). III. P laintif

f’s Pleading of

RICO Standi ng A. Stand ard of Review We review de novo the district c ourt’s denial of a motion for judg ment as a ma tter of law

. Jack son v. FedEx Corp. Servs., Inc. , 518 F.3d 388, 391–92 (6th Cir. 2008). Apply ing the same defe rential standa

rd as the district c ourt, we w ill reverse the l ower court only

if “a rea sonable jury would not have a leg ally sufficie nt evidentiar y basis to find for the party on that issue.” Fe d. R. Civ. 2 P. 50(a). That is, “when viewed i n the l ight of those infer ence s most favorable to the nonmovant, there is either complete absenc e of proof on the issues or no controve rted issues of fac t upon which

rea sonable persons could di ffe r.” Spengler v. W orthington Cylin der

s , 6 1 5 F.3d 481, 488–89 (6th Cir. 2010) (citation and internal quotation marks omitted). Where the revie w of the merits arises

Be ca u s e our revie w of a Rule 59 motion for a new trial on rea sonablene ss g rounds is 2 substantially

simil ar y et more de fer ential, Balsley v. LFP, I nc. , 691 F.3d 747, 761 ( 6th Cir. 2012), we rely on our analy sis above if the Ross Def endants cannot preva il on Rule 50(b) g rounds. Additionally , the standard for a direc ted verdic t under Tenne ssee law is also substantially the same as the fe dera l standard. Culver v. CCL Label, Inc. , 455 F. App’ x 625, 627 n.2 (6th Cir. 2012). 15Nos. 12-5739/12-6042/12-6230

from a defa

ult judg ment, the question become s whether the complaint sufficie ntly pleade d fac ts to establish liability

. See Gen. Conference Corp. of Seve nth-Day Adve ntists v. McG ill , 617 F.3d 402, 406 (6th Cir. 2010). We fi n d , as the district court did, that Plaintiff sufficie ntly pleade d RI CO standing for the jur

y ’s awa rd of da mag es. B. Appli cable Law I n order to establish RI CO standing, a plaintiff must show (1) a violation of § 1962, ( 2) an injury to his b usiness or proper ty , and (3) that his injury was proxi mately cause d by the RI CO violation. Holmes v. Sec. Inve stor Prot. Corp. , 503 U.S. 258, 268–69 (1992); see also 18 U.S

. C

. § 1964(c)

. The Ros s Def endants a rg ue that Plaintiff has failed to establish the t hird prong , which require s a p l ai n t i ff t o show that he suffe red a direc t injury as opposed to a remote “har m flowing

mere ly from the misfortunes visited upon a third person” or entity

. Holmes , 503 U.S. at 268; accord Perry v. Am. T

obacco Co., Inc. , 324 F.3d 845, 848 (6th Cir. 2003). The mi sfor t u n e s uffe red by a share holder—i.e., diminuti on in corpor ate assets and depleted share values—whe n a company falls victim to RI CO violations is ty pically too remote to confe r RI CO standing on that share holder. See e.g. , Sanders Confectionery Prods., Inc. v. Heller Fin., Inc. , 9 7 3 F.2d 474, 487 (6th Cir. 1992); W arren v. M

frs. Nat ’l Bank , 759 F.2d 542, 544 ( 6th Cir. 1985). Def endants contend that Plaintiff

was mer ely

a par tner in Tellico who suf

fer ed injuries only

deriva tive of Tellico’ s losses. C. Analysis Although Plaintiff pleade d that, by virtue of the predic ate acts, Tellico’s value was depleted, he also pleade d a direc t injury

. Separate and apar t from just depleted value in investment, Plaintiff established that Ross used Tellico as his alter eg o to further the Ross Def endants’ criminal enter

prise

16Nos. 12-5739/12-6042/12-6230

of materia lly misrepre senting and artificia lly inflating proper ty values an d ca u s ed Plaintiff to unknowing ly contribute capital and resour ces to the enter p ri s e’ s s cheme , resulting in the misappropriation of Plaintiff’s f unds and profits. State law may be used to confe r R I CO standing

on an otherwise improper plaintiff. See W halen v. Carter , 9 5 4 F.2d 1087, 1093 (5th Cir. 1992) (applying state law exception to bar on deriva tive suits to confe r RI CO standing on limit ed partne r). Under Tenne ssee law, the corpor ate entity is g ener ally disreg arde d particula rly wher e the “sepa

rate corpor ate entity ‘is a sham or a dummy ’” or wher e “nec essar y to acc omplish justic e. ” CAO Holdings, Inc. v. Trost , 333 S.W .3d 73, 88–89 (Tenn. 2010) (ci t at i o n omitted). Plaintiff’s first amende d complaint es t ablished that Tellico was Ross’s alter eg o, and as such, the entity was a nullity ; the re was no basis for bring ing a suit on its behalf

. Cf. Gagan v. Am. Cablevision, I nc. , 77 F.3d 9 5 1, 960 (7th Cir. 1996) (finding limit ed partne r established RI CO standing wher e the partne rship was dissolved). Moreove r, if Tellico was joined, as the Ross Def endants sug g est, Ross would eff

ectively be expected to “vindicate the law” ag ainst himsel f an d could potentially be apportioned an awa

rd of damag es ag ainst himself. See Holmes , 503 U.S. at 269–70. Such an outcome would be unte nable. I n sum, Plain t i ff sufficie ntly pleade d that he, independe nt of Tellico, was injured by the conspirac y . The district court proper ly denied the post-trial motions for judgme nt as a matter of law and a ne w trial. IV. P relim inary Injun ctions Finally , we turn to the appea l by the intervening defe ndant, Athena. Athena challeng es the district c ourt’s injunctions ba rring Athena from fore closing , as a secur ed cre ditor, on rea l pr operty

17Nos. 12-5739/12-6042/12-6230

owned by Def endants L TR and TL P. Athena primar ily arg ues t hat t here was no evidence that the deed of trust, which transf err ed the SunTrust notes encumbe ring the rea l pr operty from Tenne ssee L and to Athena, was inval i d

. W e find that the district court did not abuse its discretion when it g rante d the pre liminary

injunctions. A. Stand ard of Review an d App licable Law I n deter mining whether the movant has met his burden for injunctive relief , we must balanc e the following fa ct o rs : “( 1) whether the movant has shown a strong likelihood of succe ss on the

m er its; (2) whether the movant will suffe r irrepa rable harm if the injunction is not issued; (3 ) whether the issuance of the injunction would cause substantial ha rm to others; and (4) whether the public interest would be serve d by issuing the injunction.” Ove rstreet v. Lexington-Faye tte Urban Cnty. Gov’t , 305 F.3d 566, 573 ( 6th Cir. 2002). The first fac tor—likelihood of succe ss—is distinctly a questi o n of law revie wed de novo , while the ultimate deter

mination to g rant a preliminary injunction, afte r weig hing the fac tors, is revie wed for an abuse of d i s cr et i o n. Certified Restoration Dry Cleaning Network, LLC v. Tenke Corp. , 511 F.3d 535, 541 (6th Cir. 2007)

. This “ highly defe rential” standard pe rmits us to di sturb the d istrict court’s ultimate deter mination “only if the district court relied upon clea rly err oneous fi n dings of fac t, improperly applied the g overning law, or used an err oneous leg al standard.” Id

. (citations and inter

nal quotation marks omitted).

18Nos. 12-5739/12-6042/12-6230

B. Analysis 1. F actor One - Likelih ood of Success This fac tor weig hs in f

avor of g ranting the motion if the plaintiff “shows more than a mere possibili ty of success” and, instead, “raise[s] questions g oing to the m erits s o serious, subs tantial, difficult, and doubtful as to mak e t h em a fa i r g round for litigation and thus for more delibera te investigation.” Six Clini cs Holding Corp., II v. Cafcomp Sys., Inc. , 119 F. 3 d 393, 402 (6th Cir. 1997). Howeve r, “a party is not require d to prove his case in full at a preliminary injunction hear ing”

as the evidenc e “is less complete than a trial on the merits.” Certified Restoration , 511 F.3d at 542 (citation and internal quotation marks omi tted); see also In re Eagle-Pic her Indus., Inc

. , 963 F.2d 8 5 5 (6 th Cir. 1992) (holding t hat t he dis trict court did not err in g ranting a preliminary injunction wher e it relied pr imarily

on the three non-likelihood fac tors). Athena urg es, in vain, that we consider in isolation its acquisition of the SunTrust Ba nk notes beca use Plaintiff has not proven that the fac ially -valid deed of trust was illegitimate. Howeve r, the validity of the transfe rs cannot be considere d in a vacuum. On less than complete evidenc e, Plaintiff need only proff

er sufficie nt evidenc e to r aise serious questions a bout the leg itimacy of the transfe r to Athena. See Certifi ed Restorati on , 511 F.3d at 542; Six Clinics , 119 F.3d a t 402. We find that Plaintiff met his burden. Plaintiff’s uncontested proof establi s h ed t h at Doukas, sole owner of Athena , wa s Ross’s associate who once share d office space with him; and that Doukas acquir ed persona lly and throug h his entities mi l l i o ns of dollars’ worth of assets from sever al of the Ross Def endants shortly afte r the mag istrate judge in the underly ing RI CO action rec ommended entry of defa ult judgme nt. At least one of those transfe rs, for proper ty owned by another Ross Def endant,

19Nos. 12-5739/12-6042/12-6230

appea red to be without considera tion beca use pay ment for the proper

ties wer e to be made by another Doukas entity , Americ an Har per Corp., to Athena. And the rec ord demonstrated that, shortly befor e the SunTrust note transfe rs, Tenne ssee L and enter ed a cooper ation ag ree ment with two of the Ross Def endants, in which it ag ree d to transfe r to Athena its security

interest in other pr operties owne d by the Ross Defe ndants for no mone tary consideration. Thus, while not conclusively disproving Athena’ s claim that its acquisition of the SunTrust notes was above board, this evidenc e, albeit circ umstantial, raises a strong infere nce that Tenne ssee L and and Athena collaborated with Def endant Ross and sever al of the defe ndant entities to transfe r assets t o Doukas, through Athena and his other entities. Acc ording ly , this fac tor weig hs in favor

3 of g ranting the pre liminary injunction. 4 2. F actor s Tw o and T hree - Balan cing the Harm s The district court found that Plaintiff would suffe r irrepa rable harm beca

use Plaintiff would not be able to enfor ce the RI CO judgme nt ag ainst Def endants L TR and TL P if Athena was permitted to fore close on the Rarity Ba y co ndominiums and lots encumbe red by the SunTrust notes. The district court di d not clea rly err in this deter

mination since courts have the inhere nt authority to

The Re ceiver later confirme d the district court’s suspicions, finding that Tenne ssee L and 3 served as a “surr og ate” purcha ser of the SunTrust notes for Athena beca use Athena financ ed Tenne ssee L and’s purcha se of the SunTrust note s and De fenda nt Ross benefitted bec ause the deal permitted him to continue running the Rarity Ba y development. Additionally , in ligh t o f t he above analy sis, the district court proper ly conclude d that the 4 evidenc e demonstrated that Athena probably acte d in conce rt with the Ross Def endants so as to bind Athena to its ruling under Rule 65(d)( 2). See Blackard v. Mem phis Area Med. Ctr. for W omen, Inc. , 262 F.3d 568, 574 (6th Cir. 2001) (“[A] decr ee of injunction not only binds the parties defe ndant but also those identified with them in interest[ or] in ‘privity ’ with them.”) (quoting Regal Knitw ear Co. v. NLRB , 324 U.S. 9, 14 (1945)). 20Nos. 12-5739/12-6042/12-6230

prese rve proper

ty that may be the subject of a final decr ee. See USACO Coal Co. v. Carbomin Energy, Inc. , 689 F.2d 94, 98 (6th Cir. 1982). Moreove r, assuming the transfe r to Athena was valid, the risks of delay in the foreclosure proce eding s wer e adequately cover ed by the bond the district court order ed Plaintiff to pay . Ther e was no harm to Athena’ s interest that was not adequately protec ted by the bond, wher eas Plaintiff’s interest in rec overing from L TR and TL P would have been larg el y u n p rot ecte d absent an injunction. Acc ording ly , we find that the district court proper ly weig hed these fac tors in Plainti ff’ s favor

.

3. F actor F our - The P ubl ic Intere st The district court weig hed the public interest of permitting secur ed cre ditors to fore close on their secur ity interests ag ainst the interest in preve nting defe ndants from thwarting court judgme nts and found that the injunction adequa tely serve d both. The Rece iver will be able to evalua te the fore closure and protec t the Ross Def endants’ assets while ensuring compliance with the judgme nt. We find no err or in this conclusion; this factor wa s proper ly weig hed in Plaintiff’s fa vor. I n sum, afte r revie wing the rec ord and considering the rele vant fac tors, there is no evidenc e that the district court abused its discretion in order ing the pre l i m i n ar y injunctions pending the Rece iver’s r eport. CONCLUSION For the fore g oing rea sons, w e AF F IRM the district c ourt’s order s denying the motions for judgme nt as a matter of law or a new trial and enjoining Athen a fr o m fore closing on the rea l proper ty

.

21