Opinion ID: 626814
Heading Depth: 3
Heading Rank: 4

Heading: Adequacy of the Pleadings

Text: The plaintiffs have plausibly alleged an enterprise and Dr. Margules's role in its operation or management. For purposes of RICO, an enterprise includes any union or group of individuals associated in fact, elsewhere described as a group of persons associated together for a common purpose of engaging in a course of conduct. Boyle v. United States, 556 U.S. 938, 944, 129 S.Ct. 2237, 2243, 173 L.Ed.2d 1265 (2009) (internal quotation marks omitted). Such an association must have a purpose, relationships among those associated with the enterprise, and longevity sufficient to permit these associates to pursue the enterprise's purpose. Id. at 2244. The requirements are interpreted flexibly. For example, members do not need to hold fixed roles, and a chain of command is not required. Id. at 2245.
[A] corporation cannot be both the `enterprise' and the `person' conducting or participating in the affairs of that enterprise.... [A] corporation may not be liable under section 1962(c) for participating in the affairs of an enterprise that consists only of its own subdivisions, agents, or members. [14] Begala v. PNC Bank, Ohio, N.A., 214 F.3d 776, 781 (6th Cir.2000), cert. denied, 531 U.S. 1145, 121 S.Ct. 1082, 148 L.Ed.2d 958 (2001). This principle is known as the non-identity or distinctness requirement. Id. Also, a plaintiff may plead in the alternative and the pleading is sufficient if any one of [the theories that the plaintiff pleads] is sufficient. Fed.R.Civ.P. 8(d)(2). The alleged enterprise consists of Cassens and Crawford, or Cassens, Crawford, and Dr. Margules. R. 1 (Compl. ¶ 20). Crawford and Cassens can comprise an enterprise on their own because Crawford act[ed] as an agent for, or in concert with, Cassens. R. 1 (Compl. ¶ 18) (emphasis added). Moreover, the plaintiffs' allegations suggest that Dr. Margules is a distinct actor with whom the other defendants have a long-standing business relationship. Id. ¶ 11; see also Appellee Margules Br. at 29 ([The complaint] establishes that Dr. Margules was in practice for himself.). Therefore, the allegations satisfy the distinctness requirement. Moreover, the complaint meets Twombly 's plausibility standard. The complaint alleges that the Defendants expressly or implied[ly] communicated to Dr. Margules that [they] wanted him to write reports stating plaintiff was not disabled due to work-related injuries, regardless of the true circumstances. R. 1 (Compl. ¶ 12). Thus, the plaintiffs have plausibly pleaded the existence of an enterprise.
The plaintiffs have adequately alleged Dr. Margules's involvement in the operation or management of the enterprise. Reves v. Ernst & Young held that, although liability is not limited to upper management, a person can be liable under RICO only if he or she is part of the operation or management of the enterprise. 507 U.S. 170, 185, 113 S.Ct. 1163, 122 L.Ed.2d 525 (1993). The defendants in Reves were not part of the operation of the enterprise because they simply prepared standard financial statements based on information from management's accounting system. Id. at 186, 113 S.Ct. 1163. Dr. Margules, on the other hand, allegedly did more than participate in his  own affairs of evaluating medical conditions. Id. at 184-85, 113 S.Ct. 1163. According to the complaint, Dr. Margules's evaluations were not objective medical reports. Dr. Margules was a `cut off' doctor... upon whom Crawford and Cassens could rely for opinions which they could cite as grounds for cutting off or denying benefits. R. 1 (Compl. ¶ 6B). He allegedly fraudulently slanted his medical evaluations to serve the purposes of the enterprise, with the express or implied promise of future payment of money. Id. Therefore, the complaint adequately alleges that Dr. Margules was part of the operation or management of the enterprise.