Court Opinion

ID: 74929
Source: CourtListenerOpinion
Date Created: 2010-04-26 09:00:46+00
Date Added: 2024-06-11T09:39:32.826954
License: Public Domain

234 F.3d 514 (11th Cir. 2000)
Lisa M. AYRES, on behalf of herself and other persons similarly situated, Ronald L. Swann, Administrator of the Estate of Richard W. Swann, et al., Plaintiffs- Appellees,v.GENERAL MOTORS CORPORATION and Delco Electronics Corporation, Defendants- Appellants.
No. 98-8696.
United States Court of Appeals, Eleventh Circuit.
November 29, 2000.December 11, 200

Appeal from the United States District Court for the Northern District of  Georgia.(No. 96-02476-1-CV-GET), G. Ernest Tidwell, Judge.
Before ANDERSON, Chief Judge, and TJOFLAT and FAY, Circuit Judges.
ANDERSON, Chief Judge:

1
This is an interlocutory appeal by Defendants-Appellees General Motors  Corporation ("General Motors") and Delco Electronics Corporation ("Delco") of  the district court's denial of their motion for summary judgment. The district  court certified the appeal as one involving a question of law as to which there  is substantial ground for difference of opinion and with respect to which an  immediate appeal from the order may materially advance the ultimate termination  of this litigation; thus, we have appellate jurisdiction under 28 U.S.C.   1292(b). For the reasons stated below, we reverse.

2
Lisa Ayres, George Collins, and Helen Woodson ("Plaintiffs") each purchased an  automobile which was manufactured by General Motors and contained a GMP-4  Electronic Control Module ("ECM") manufactured by Delco.1 Each of these  plaintiffs purchased the automobile as a used automobile. These Plaintiffs2  brought suit against General Motors and Delco ("Defendants") under Georgia's  civil RICO statute, O.C.G.A.  16-14-1 et seq., in the Superior Court of Fulton  County, Georgia.3 The Plaintiffs claim that the ECMs are defective and that this  defect can cause engine stalling, engine surging, erratic operation and other  performance problems which could result in an unsafe situation. In addition, the  Plaintiffs claim that the Defendants knew of the defect but fraudulently  concealed it because of the great expense in remedying the defect. This  fraudulent concealment, they argue, caused them injury, in particular the  resultant diminution in the value of their cars and the expense of assorted  repairs allegedly related to the defect. However, the Plaintiffs have identified  no misrepresentation made by the Defendants to them related to the alleged  defect; in fact, the Defendants made no communications at all to the  Plaintiffs.4 The Plaintiffs complain that the Defendants failed to disclose the  defect to them.

3
The Defendants removed the action to the United States District Court for the  Northern District of Georgia and moved for summary judgment. The district court  denied summary judgment on the Georgia RICO claims. In particular, the court  found that the Plaintiffs established, at least for summary judgment purposes,  that the Defendants had violated the federal mail fraud and wire fraud statutes,  18 U.S.C.  1341, 1342, which are predicate offenses constituting racketeering  under Georgia's RICO statute. The district court held that "[n]on-disclosure of  information can be a violation of the mail fraud statute when a party has some  independent duty to disclose." The court then concluded that the National  Traffic and Motor Vehicle Safety Act ("Safety Act"), 49 U.S.C.  30118 et seq.,  created such an independent duty for the Defendants to disclose alleged safety  defects to the Plaintiffs and that the Defendants' failure to disclose  constitutes mail and wire fraud, which in turn forms the basis of the Georgia  civil RICO claim.

4
As a preliminary matter, we address Plaintiffs' motion to dismiss for lack of  jurisdiction, asserting that the district court lacked jurisdiction when  Defendants removed. Removal is proper when a federal court would have original  jurisdiction. See 28 U.S.C.  1441(a). When the Defendants removed in September  1996, the Plaintiffs moved for remand. The district court denied this motion. It  concluded that original jurisdiction, in this case diversity jurisdiction,  existed under 28 U.S.C.  1332 because the parties were diverse and the amount  in controversy requirement was satisfied by aggregating the punitive damages as  permitted by Tapscott v. MS Dealer Service Corp., 77 F.3d 1353 (11th Cir.1996).  Although the original complaint was filed in December 1995, the district court  found that the removal was timely because prior to Tapscott, which was decided  after Plaintiffs filed their complaint, the Defendants could not have aggregated  punitive damages to reach the amount in controversy requirement.

5
During the course of this appeal, the Eleventh Circuit in Cohen v. Office Depot,  Inc., 204 F.3d 1069 (11th Cir.2000), held that the binding former Fifth Circuit  decision, Lindsey v. Alabama Tel. Co., 576 F.2d 593 (5th Cir.1978),5 controlled  the issue of whether or not punitive damages can be aggregated for amount in  controversy purposes and held that such aggregation is not permitted. See Cohen,  204 F.3d at 1073-76. Accordingly, the Cohen Court abrogated Tapscott under the  prior precedent rule and held that punitive damages must be divided by the  number of class members and attributed to each member of the class. Thus, the  district court's aggregation of punitive damages as permitted by Tapscott is no  longer a sound basis for jurisdiction.

6
Nonetheless, we believe that there is a sound basis for removal jurisdiction. In  particular, 28 U.S.C.  1441(b) provides removal jurisdiction for "any civil  action of which the district courts have original jurisdiction founded on a  claim or right arising under the Constitution, treaties or laws of the United  States." See also 28 U.S.C.  1331. In Gully v. First National Bank in Meridian,  299 U.S. 109, 57 S.Ct. 96, 81 L.Ed. 70 (1936), Justice Cardozo explained:

7
How and when a case arises "under the Constitution or laws of the United  States" has been much considered in the books. Some tests are well  established. To bring a case within the statute, a right or immunity created  by the Constitution or laws of the United States must be an element, and an  essential one, of the plaintiff's cause of action. The right or immunity must  be such that it will be supported if the Constitution or laws of the United  States are given one construction or effect, and defeated if they receive  another. A genuine and present controversy, not merely a possible or  conjectural one, must exist with reference thereto, and the controversy must  be disclosed upon the face of the complaint, unaided by the answer or by the  petition for removal. Indeed, the complaint itself will not avail as a basis  of jurisdiction in so far as it goes beyond a statement of the plaintiff's  cause of action and anticipates or replies to a probable defense.

8
Id. at 112-13, 57 S.Ct. at 97-98. Although a case may arise under federal law  "where the vindication of a right under state law necessarily turned on some  construction of federal law," Franchise Tax Board v. Construction Laborers  Vacation Trust, 463 U.S. 1, 9, 103 S.Ct. 2841, 2846, 77 L.Ed.2d 420 (1983), "the  mere presence of a federal issue in a state cause of action does not  automatically confer federal-question jurisdiction." Merrell Dow  Pharmaceuticals, Inc. v. Thompson, 478 U.S. 804, 813, 106 S.Ct. 3229, 3234, 92  L.Ed.2d 650 (1986).

9
Such federal-question jurisdiction is available here because, as this opinion  makes clear below, a violation of the federal mail and wire fraud statutes is an  essential element of the Plaintiffs' cause of action, the proof of which  involves resolution of a substantial, disputed question of federal law.6 Again  as made clear below, resolution of this case depends entirely on interpretation  of the federal mail and wire fraud statutes and their interaction with the  Safety Act. See Jairath v. Dyer, 154 F.3d 1280, 1282 (11th Cir.1998)  ("[F]ederal-question jurisdiction may also be available if a substantial,  disputed question of federal law is a necessary element of a state cause of  action."); Ormet Corp. v. Ohio Power Co., 98 F.3d 799, 806 (4th Cir.1996)  (recognizing that, even though a cause of action may be created by state law, it  may involve the "resolution of a federal question sufficiently substantial to  arise under federal law within the meaning of 28 U.S.C.  1331"). Plaintiffs'  Fourth Amended and Recast Complaint claims that "[t]he defendants have  repeatedly used the mails and wires to perpetrate their scheme of fraudulent  concealment of the defects with engine control modules" and bases the Georgia  RICO claim on Defendants' conspiracy to "deprive Plaintiffs of money by multiple  illegal acts which involved use of the mails and wires and which constitute a  pattern of racketeering activity in violation of the Georgia RICO Act."7  Examination of the Georgia RICO statute, see infra n. 13, and Plaintiffs'  argument makes it abundantly clear that this part of their complaint refers to  the federal right, enforceable through the federal RICO statute, to be free from  violations of the federal mail and wire fraud statutes.8 Thus, establishing a  violation of the federal mail and wire fraud statutes is an essential element of  Plaintiffs' cause of action.9 We note that the instant situation-in which  Plaintiffs must prove federal crimes involving a violation of the federal mail  and wire fraud statutes to satisfy the necessary predicate acts of their Georgia  RICO cause of action-would seem to fall squarely within the language of Gully  and Franchise Tax Board, in which the Supreme Court indicated that it was well  established that federal question jurisdiction exists where a plaintiff's cause  of action has as an essential element the existence of a right under federal law  which will be supported by a construction of the federal law concluding that the  federal crime is established, but defeated by another construction concluding  the opposite. However, to find federal question jurisdiction in this case, we  need not go so far as to hold that every state RICO cause of action which  depends upon proving, as necessary predicate acts, a violation of the federal  mail and wire fraud statutes establishes federal question jurisdiction.10 The  particular controversy in this case may very well make this case one of those  exceptional cases requiring that we decide "a federal question substantial  enough to confer federal question jurisdiction." City of Huntsville, 24 F.3d at  174.

10
As indicated below, this case requires that we decide whether or not a breach of  the disclosure duty under the Safety Act constitutes a federal mail and wire  fraud crime. We conclude that this federal question constitutes a federal  question which may be substantial enough to confer federal question  jurisdiction. The magnitude of the federal question at issue in this case is at  least comparable to that of other federal questions which courts have found  sufficient to confer federal question jurisdiction. See Ormet, 98 F.3d at 807  (holding that resolution of a contractual dispute requiring the interpretation  and application of the Clean Air Act was sufficiently substantial to justify  invocation of federal question jurisdiction given the important federal interest  in the Acid Rain Program); Milan Express Co., Inc. v. Western Sur. Co., 886 F.2d  783, 787 (6th Cir.1989) (holding that plaintiffs' claims, in which they sought  proceeds of surety bonds prescribed by the Interstate Commerce Commission,  should be heard in a federal forum due to the federal interest in the regulation  of interstate commerce); West 14th St. Commercial Corp. v. 5 West 14th Owners  Corp., 815 F.2d 188, 196 (2nd Cir.1987) (concluding that the federal element in  plaintiffs' state cause of action was sufficiently substantial to confer federal  question jurisdiction because, "[i]n construing the Condominium Relief Act in a  state cause of action, the federal issue is decisive because upon that Act's  construction the vindication of rights and definition of relationships created  by federal law depends"). The federal question at issue in this case, whether  the alleged violations of the Safety Act constitute federal mail and wire fraud  crimes, is a matter of considerable magnitude and substantial federal interest.

11
We find federal question jurisdiction in this case because the case involves  both (1) the necessity for Plaintiffs to prove, as an essential element of their  state law cause of action, the existence of federal mail and wire fraud crimes  as predicate acts, which crimes would be enforceable in a federal civil RICO  cause of action; and (2) the fact that proof of the alleged federal mail and  wire fraud crimes involves a very substantial federal question.11

12
For the foregoing reasons, we conclude that the district court had subject  matter jurisdiction, and we decline to order a remand to state court.  Accordingly, Plaintiffs' motion to dismiss is denied.12

13
We now turn to the merits of this case. The district court's denial of summary  judgment is reviewed de novo, with all facts and reasonable inferences therefrom  reviewed in the light most favorable to the nonmoving parties. See Carnival  Brand Seafood Co. v. Carnival Brands, Inc., 187 F.3d 1307, 1309 (11th Cir.1999).  Summary judgment was due to be granted only if the forecast of evidence before  the district court showed that there was no genuine issue as to any material  fact and that the moving parties, i.e., General Motors and Delco, were entitled  to judgment as a matter of law. Fed.R.Civ.P. 56(c).

14
As a simple matter of statutory incorporation, federal mail and wire fraud are  predicate acts of racketeering under the Georgia civil RICO statute, as they are  under the federal RICO statute.13 Therefore, the critical question is whether  the Defendants have violated the mail and wire fraud statutes, 18 U.S.C.   1341, 1343.14 We believe they have not. In Pelletier v. Zweifel, 921 F.2d 1465,  1498 (11th Cir.1991), this Court explained that "[m]ail or wire fraud occurs  when a person (1) intentionally participates in a scheme to defraud another of  money or property and (2) uses the mails or wires in furtherance of that  scheme." It is undisputed that, if such a scheme exists here, the Defendants  used the mails and wires in furtherance of that scheme. Therefore, the  Plaintiffs must show a scheme to defraud. "Under the mail and wire fraud  statutes, a plaintiff only can show a scheme to defraud if he proves that some  type of deceptive conduct occurred." Id. at 1500.

15
As noted, the Plaintiffs have identified no affirmative misrepresentation on the  part of the Defendants. However, Plaintiffs argue that the Defendants' failure  to disclose the information they possessed about the ECM did violate the mail  and wire fraud statutes. Plaintiffs rely primarily upon the theory that  nondisclosure of material information can constitute a violation of the mail and  wire fraud statutes where a defendant has a duty to disclose. Ample case law  supports Plaintiffs' legal theory. See, e.g., United States v. Brown, 79 F.3d  1550, 1557 (11th Cir.1996) (holding that nondisclosure can violate the federal  fraud statutes where a special relationship of trust, such as a fiduciary  relationship, requires disclosure of material facts); United States v. Waymer,  55 F.3d 564, 571 (11th Cir.1995) ("A defendant's breach of a fiduciary duty may  be a predicate for a violation of the mail fraud statute where the breach  entails the violation of a duty to disclose material information.... An  affirmative duty to disclose need not be explicitly imposed; it may instead be  implicit in the relationship between the parties.").15

16
Applying the foregoing theory to the facts of this case, the Plaintiffs argue  that the Defendants had a duty to disclose the ECM defect under the Safety Act,  and that their failure to do so violated the mail and wire fraud statutes, thus  satisfying the predicate acts of racketeering under Georgia's civil RICO  statute. The viability of this argument rests upon two assumptions: first, that  the Defendants did have a duty under the Safety Act to disclose the information  possessed by the Defendants with respect to the ECM, and second, assuming such a  duty, that a breach of this duty would constitute mail or wire fraud. We assume  arguendo that both General Motors and Delco did have such a duty under the  Safety Act.16 Thus, the crucial issue before us is whether a breach of such duty  to disclose would constitute mail or wire fraud. For the reasons that follow, we  conclude that the Safety Act was not meant to create the kind of duty, a breach of which would create criminal liability or civil liability under RICO statutes.

17
The Safety Act establishes its own extensive array of administrative remedies  for a violation of its notification obligations. For example, the Secretary of  Transportation can determine that a defect exists and order the manufacturer to  notify and/or "take specified action" to meet the notification requirements. 49  U.S.C.  30118(b), (e). The Safety Act provides for hearings upon a motion of  the Secretary or any interested person at which "[a]ny interested person may  make written and oral presentations of information, views, and arguments on  whether the manufacturer has reasonably met the notification requirements." 49  U.S.C.  30118(e). Any interested person can also file a petition with the  Secretary of Transportation requesting the Secretary to begin a proceeding to  decide whether to issue an order requiring a manufacturer to give notice under   30118. See 49 U.S.C.  30162(a). Furthermore, the Attorney General is authorized  to bring a civil action to enforce the Safety Act and the notification  obligations. See 49 U.S.C.  30121(b), 30163. A person found in violation of   30118's notification requirement in this civil action is liable to the United  States Government for a civil penalty of not more than $1000 for each violation  and not more than $800,000 for a related series of violations. See 49 U.S.C.   30121(a), (b), 30165(a).17 Lastly, the Safety Act does not make violation of the  notification requirements criminal.18 In light of this extensive administrative  scheme, we think it clear that Congress did not intend to equate a violation of  the Safety Act's notification requirements in and of itself with the felony of  mail or wire fraud. Moreover, given the limits on the civil penalties, the  absence of a private right of action, and the option of private parties to  petition for administrative action, it is also clear that Congress did not  intend for a violation of the Safety Act's notification requirements to be the  basis for a private civil RICO action, which would permit unlimited, treble  damages.

18
The foregoing discussion also makes it clear that the Safety Act confers no  private cause of action to enforce its notification requirements.19 The question of whether a private cause of action is conferred is essentially one of  interpreting Congressional intent. See California v. Sierra Club, 451 U.S. 287,  293, 101 S.Ct. 1775, 1779, 68 L.Ed.2d 101 (1981) ("Cases subsequent to Cort have  explained that the ultimate issue is whether Congress intended to create a  private cause of action."); Till v. Unifirst Federal Savings & Loan Ass'n, 653  F.2d 152, 157 (5th Cir. Unit A Aug.1981). The inquiry is guided by the Cort  four-prong test.20 Examination of the Safety Act in light of both the second and  third prongs of this test unequivocally indicates that Congress did not intend  to create a private cause of action here. With respect to the second prong,  nothing in the language of the Safety Act or its legislative history supports an  inference that Congress intended to create a private cause of action for a  violation of the notification requirements. To the contrary the extensive array  of administrative remedies, including participation there by "interested  parties,"and the specific provision authorizing the Attorney General to bring a  civil enforcement action create a strong inference that Congress did not intend  to create a private right of action. Likewise the express provision of a private  cause of action for a distributor or dealer to enforce the obligations of a  manufacturer or distributor related to safety defects or safety standard  violations found in a vehicle prior to its sale to a consumer, as provided by 49  U.S.C.  30116,21 is strong evidence that Congress knew how to create a private  cause of action to enforce the notification requirements and would have done so  expressly if it had intended to create such a private cause of action. See  Touche Ross & Co. v. Redington, 442 U.S. 560, 571, 99 S.Ct. 2479, 2488, 61  L.Ed.2d 82 (1979); Till, 653 F.2d at 160. The Plaintiffs also fail the third  prong because implying a private cause of action would be inconsistent with the  legislative scheme of the Safety Act. Implying such a private cause of action to  enforce the notification requirements would undermine the administrative  remedies.22 See District Lodge No. 166 v. TWA Services, Inc., 731 F.2d 711,  715-16 (11th Cir.1984) (finding no private right of action in the Service  Contract Act because in part " 'it would be flatly inconsistent with the express  provision of a limited governmental cause of action to imply a wide-ranging  private right of action as an alternative to a governmental suit' ") (quoting  Miscellaneous Service Workers, Local 427 v. Philco-Ford Corp., 661 F.2d 776, 780  (9th Cir.1981)). "[W]hen an examination of one or more of the Cort factors  'unequivocally reveals congressional intent, there is no need for us to trudge  through all four of the factors.' " Florida v. Seminole Tribe of Florida, 181  F.3d 1237, 1247 (11th Cir.1999) (quoting Liberty Nat'l Ins. Holding Co. v.  Charter Co., 734 F.2d 545, 558 (11th Cir.1984) (internal quotation marks  omitted) (quoting Merrill Lynch, Pierce, Fenner & Smith v. Curran, 456 U.S. 353,  388, 102 S.Ct. 1825, 1844, 72 L.Ed.2d 182 (1982))). Thus, we readily conclude  that Congress did not intend to create a private cause of action to enforce the  notification requirements found in the Safety Act. Cf. Seminole Tribe, 181 F.3d  at 1247-50 (finding no implied private cause of action in the Indian Gaming  Regulatory Act based on the second and third prongs of the Cort test). The only  other circuit court to address this issue has concluded that there is no private  cause of action under the Safety Act. See Handy v. General Motors Corp., 518  F.2d 786, 788 (9th Cir.1975) (per curiam) ("The district court correctly ruled  that Congress did not intend to create private rights of action [under the  Safety Act] in favor of individual purchasers of motor vehicles when it adopted  the comprehensive system of regulation to be administered by the NHTSA.").

19
Given the extensive array of administrative remedies for violation of the Safety  Act, including specific provisions for participation by "any interested person,"  and given the specific provision for the civil enforcement action by the  Attorney General with no mention of a corresponding private cause of action, and  given the limits on the civil penalties and lack of criminal penalties, and  finally given the absence of a private cause of action, we conclude that  Congress did not intend for a violation of the Safety Act's notification  requirement to constitute the crime of mail or wire fraud. It follows that  Congress did not intend for a violation of the Safety Act to be the basis for a  private civil RICO action, which would permit unlimited, trebled damages.  Reaching the same conclusion in an analogous context, the D.C. Circuit in  Danielsen v. Burnside-Ott Aviation Training Center, 941 F.2d 1220, 1229  (D.C.Cir.1991), affirmed the dismissal of a federal RICO claim based on  violations of the Service Contract Act ("SCA"). In Danielsen, the plaintiffs  argued that the defendants' non-compliance with the contract requirements of the  SCA amounted to mail fraud and that this mail fraud was the racketeering  activity supporting their RICO claim. The court rejected this argument reasoning  that:

20
The very fact that Congress enacted the SCA with its complex framework for administrative recovery suggests that Congress did not contemplate that  violation of SCA constituted the criminal felony of mail fraud.... [I]t would  seem likely that either the statute or at least the legislative history would  have indicated as much.

21
Id. at 1229. Likewise, in Norman v. Niagara Mohawk Power Corp., 873 F.2d 634 (2d  Cir.1989), the Second Circuit rejected the plaintiffs' attempt to circumvent the  extensive administrative scheme established by the Energy Reorganization Act of  1974, by pleading their claim in RICO terms. In the court's words, "[a]rtful  invocation of controversial civil RICO, particularly when inadequately pleaded,  cannot conceal the reality that the gravamen of the complaint herein is section  210 harassment." Id. at 637. Thus, the plaintiffs were limited to the  administrative remedies created by the relevant federal act and could not use  RICO to get treble damages and its other attendant benefits. See id. at 636-37.  We agree with the reasoning of these courts. To permit plaintiffs to convert  non-compliance with the notification requirement found in the Safety Act, a  regulatory statute with its own administrative remedies, into mail and wire  fraud and thereby to maintain a civil RICO action would upset the purposes and  contradict the intent of the statute.23

22
Apparently foreseeing our holding that the Plaintiffs have established no duty  to disclose which might constitute mail or wire fraud, the Plaintiffs assert in  their brief on appeal that the absence of such a duty is not dispositive. They  cite language in a number of cases to the effect that nondisclosure of material  facts intending to create a false and fraudulent representation might constitute  mail fraud. See United States v. O'Malley, 707 F.2d 1240, 1247 (11th Cir.1983)  ("Fraud, for purposes of a mail fraud conviction, may be proved through the  defendant's non-action or non-disclosure of material facts intended to create a  false and fraudulent representation."); Pelletier v. Zweifel, 921 F.2d 1465,  1509 (11th Cir.1991) (citing O'Malley for the proposition that "nondisclosure of  material fact with intent to create a false or fraudulent representation can  constitute scheme to defraud under mail fraud statutes"). However, the  Plaintiffs' brief on appeal is extremely vague with respect to the application  of such a theory to the facts of the instant case. They point merely to the  facts that the Defendants never notified the Plaintiffs or other similar owners  and that such a notification would have been costly. We cannot conclude that  Plaintiffs have created a genuine issue of fact that Defendants failed to  disclose material facts intending to create a false or fraudulent  representation.24

23
In sum, the district court erred in concluding that the duty to notify found in  the Safety Act was such that its breach constituted mail and wire fraud, and the  Plaintiffs have not otherwise established that Defendants violated the mail or  wire fraud statutes. Thus, the Plaintiffs have failed to establish that the  Defendants committed the racketeering activity of mail and/or wire fraud and  therefore they cannot succeed on their Georgia civil RICO claim. The Defendants  are entitled to summary judgment on this claim. Accordingly, we reverse the  district court's denial of the Defendants' motion for summary judgment with  respect to the RICO claim and remand for further proceedings consistent with  this opinion.

REVERSED and REMANDED.25

NOTES:

1
  Plaintiffs seek class certification representing the 4.5 million consumers with  vehicles containing the defective ECM, but as of yet no class has been  certified.

2
  Ronald Swann, as executor of his father Richard Swann's estate, also was a  plaintiff below. The Defendants state that discovery conducted after the  preparation of the record for appeal conclusively shows that the vehicle  purchased new by Richard Swann did not contain the defective ECM and the  Plaintiffs do not name Swann in their appellate brief. However, in light of our  ultimate disposition of this appeal, whether Swann's vehicle did or did not  contain the ECM in question is immaterial to the resolution of this case and we  therefore do not address it.

3
  In addition to the Georgia civil RICO claim, the Plaintiffs brought additional  state law claims for fraud and deceit and breach of warranty. The district court  granted the Defendants' summary judgment motion with respect to the fraud and  deceit and breach of warranty claims. This grant of summary judgment is not on  appeal here.

4
  The Plaintiffs assert that the Defendants engaged in a "pattern and practice of  fraudulent suppression and deceit" but do not identify any misrepresentations.  In light of the requirement of Fed.R.Civ.P. 9(b) that "[i]n all averments of  fraud or mistake, the circumstances constituting fraud or mistake shall be  stated with particularity," we conclude Plaintiffs' assertions mean no more than  that the Defendants did not disclose the defect to the Plaintiffs or attempt to  remedy the defect.

5
  In Bonner v. City of Prichard, 661 F.2d 1206 (11th Cir.1981) (en banc), the  Eleventh Circuit Court of Appeals adopted as binding precedent the decisions of  the former Fifth Circuit issued before October 1, 1981.

6
  We reject Plaintiffs' argument that, because Defendants originally based removal  on diversity jurisdiction, it is too late for them to raise the issue of federal  question jurisdiction on appeal due to the thirty day limitation set forth in 28  U.S.C.  1446(b). All of the cases Plaintiffs cite in support of this argument  differ substantially from the case sub judice because the district courts in  those cases did not consider the merits of the case before ordering a remand due  to an untimely removal. In this case, however, the district court considered the  merits of the case when it granted summary judgment on certain of Plaintiffs'  claims and refused to grant summary judgment on the Georgia RICO claim.  Considering the interests of "finality, efficiency, and economy," the Supreme  Court has held that a district court's failure to remand a case improperly  removed "is not fatal to the ensuing adjudication if federal jurisdictional  requirements are met at the time judgment is entered." Caterpillar Inc. v.  Lewis, 519 U.S. 61, 64-75, 117 S.Ct. 467, 471-76, 136 L.Ed.2d 437 (1996).  Considering these same interests, we believe that to remand this case which  satisfies all federal jurisdictional requirements to state court "would impose  an exorbitant cost on our dual court system, a cost incompatible with the fair  and unprotracted administration of justice." Id. at 77, 117 S.Ct. at 477.

7
  We are not troubled by the fact that this elaboration of the basis of the  Georgia RICO claim was added by a post-removal amendment of the complaint. The  complaint at the time of the removal stated the Georgia RICO cause of action  without identifying the predicate acts. The subsequent amendment makes clear  that, in a well-pleaded complaint, Plaintiffs' cause of action contains, as an  essential element, a federal issue, i.e., whether the Defendants violated the  federal mail and wire fraud statutes. See 14B Wright, Miller & Cooper, Federal  Practice and Procedure: Jurisdiction  3732, at 333 (3d ed. 1998) ("[R]emoval  will be held proper when the plaintiff has concealed a legitimate ground of  removal by .... inadvertence, or artful pleading.... [T]he plaintiff may be said  to have engaged in 'artful pleading' in particular when he pleads ... a state  cause of action the merits of which turn on an important federal question.");  cf. In re Uniroyal Goodrich Tire Company, 104 F.3d 322, 324 (11th Cir.1997)  ("The untimeliness of a removal is a procedural, instead of a jurisdictional,  defect."). And, in any event, once the complaint was amended it could have been  removed. See 28 U.S.C.  1446(b).

8
  We reject Plaintiffs's argument that Merrell Dow Pharmaceuticals Inc. v.  Thompson, 478 U.S. 804, 106 S.Ct. 3229, 92 L.Ed.2d 650 (1986), precludes  federal-question jurisdiction because there is no private right of action under  the federal mail and wire fraud statutes. Plaintiffs are correct that Merrell  Dow holds that a claim does not arise under federal law where "a complaint  alleg[es] a violation of a federal statute as an element of a state cause of  action, when Congress has determined that there should be no private, federal  cause of action for the violation." Id. at 817, 106 S.Ct. at 3237; see id. at  812, 106 S.Ct. at 3234 ("The significance of the necessary assumption that there  is no federal cause of action thus cannot be overstated."). Plaintiffs are  incorrect, however, when they contend that the federal mail and wire fraud  statutes do not have a private right of action. In fact, these federal statutes  are enforceable through a private federal RICO action in the same manner that  the Plaintiffs attempt to enforce them through a private Georgia RICO action.  See 18 U.S.C.  1961(1)(B), 1962, 1964(c).

9
  We note that our conclusion, explained below, that the Plaintiffs fail to  establish a violation of the federal mail and wire fraud statutes, in which case  their Georgia RICO cause of action fails as would any federal RICO cause of  action, does not deprive the court of subject matter jurisdiction. See Bell v.  Hood, 327 U.S. 678, 682, 66 S.Ct. 773, 776, 90 L.Ed. 939 (1946) ("Jurisdiction,  therefore, is not defeated ... by the possibility that the averments might fail  to state a cause of action on which petitioners could actually recover. For it  is well settled that the failure to state a proper cause of action calls for a  judgment on the merits and not for a dismissal for want of jurisdiction.");  M.H.D. v. Westminster Schools, 172 F.3d 797, 802 n. 12 (11th Cir.1999)

10
  Thus, we do not so hold.

11
  Because we rely on both of the facts mentioned in the text, we need not in this  case decide whether either, by itself, is sufficient to confer federal question  jurisdiction.

12
  We recognize that there are district court cases which suggest that a complaint  asserting violations of the federal mail and wire fraud statutes as predicate  acts to Georgia's RICO statute is not sufficiently substantial to confer federal  question jurisdiction. See Graham Commercial Realty, Inc. v. Shamsi, 75  F.Supp.2d 1371 (N.D.Ga.1998); Patterman v. Travelers, Inc., 11 F.Supp.2d 1382  (S.D.Ga.1997). Nothing in those cases suggests a federal question of the  magnitude involved here, and thus they are distinguishable. We express no  opinion as to their correctness. See supra n. 10 and accompanying text.

13
  In particular, O.C.G.A.  16-4-3(9)(A) of the Georgia RICO statute states that "  '[r]acketeering activity' means to commit ... any crime which is chargeable by  indictment under the following laws of this state: ... (xxix) Any conduct  defined as 'racketeering activity' under 18 U.S.C. Section 1961(1)(A), (B), (C),  and (D)," and 18 U.S.C.  1961(1)(B), part of the federal RICO statute, states  that " 'racketeering activity' means any act which is indictable under ... [18  U.S.C.] section 1341 (relating to mail fraud), [and] section 1343 (relating to  wire fraud)."

14
  Both  1341 and 1343 state in pertinent part that "[w]hoever, having devised or  intending to devise any scheme or artifice to defraud ... shall be fined under  this title or imprisoned not more than five years, or both."

15
  In United States v. Brown, 79 F.3d 1550 (11th Cir.1996), we stated: "As we have  pointed out, long-established common law fraud concepts inform-but do not  control-our discussion of the evidence necessary to support a conviction under  the mail fraud statute, especially in light of the requirement that federal  criminal statutes be interpreted narrowly." Id. at 1559; see also Neder v.  United States, 527 U.S. 1, 119 S.Ct. 1827, 1840-41, 144 L.Ed.2d 35 (1999)  (relying on the rule that Congress intends to incorporate the well-settled  meaning of the common-law terms it uses to hold that materiality of falsehood is  an element of the federal mail and wire fraud statutes). An examination of the  common law with respect to when a failure to disclose is fraudulent also  supports the proposition that a nondisclosure of material information can  constitute fraud when there is a duty to disclose. In Chiarella v. United  States, 445 U.S. 222, 100 S.Ct. 1108, 63 L.Ed.2d 348 (1980), the Supreme Court  explained:
At common law, misrepresentation made for the purpose of inducing reliance upon  the false statement is fraudulent. But one who fails to disclose material  information prior to consummation of a transaction commits fraud only when he is  under a duty to do so. And the duty to disclose arises when one party has  information "that the other [party] is entitled to know because of a fiduciary  or other similar relation of trust and confidence between them." Id. at 227-28, 100 S.Ct. at 1114 (quoting Restatement (Second) of Torts   551(2)(a) (1976)).

16
  The Safety Act requires a manufacturer of a motor vehicle or replacement  equipment to "notify the Secretary [of Transportation] by certified mail, and  the owners, purchasers, and dealers of the vehicle or equipment as provided in   30119(d) of this section, if the manufacturer (1) learns the vehicle or  equipment contains a defect and decides in good faith that the defect is related  to motor vehicle safety." 49 U.S.C.  30118(c). In this summary judgment  posture, we assume that this duty was triggered for both defendants.

17
  In addition, 49 C.F.R.  578.6(a) provides for a $1100 limit for each violation  and a $925,000 limit for a series of related violations. Although these limits  are in apparent contravention of the statutory limits of $1000 for each  violation and $800,000 for a series of related violations found in 49 U.S.C.   30165, we need not decide which controls here. In any event, these limits to  recovery would be circumvented if a private party could sue to enforce the  Safety Act's notification requirements directly or via a state or federal RICO  statute.

18
  In fact, an amendment that would have added criminal penalties for knowingly and  willfully violating safety standards promulgated under the Safety Act was  considered and rejected by the Senate because, among other reasons, the Senate  was "not dealing with mobsters and gangsters.... What we are trying to do is  sensibly and realistically to promote safety for the benefit of the public. We  are not trying to pass a law that will be punitive. We are not reaching down to  eliminate gangsterism by this bill. We are trying to promote safety." 112 Cong.  Rec. 14249 (1966) (statement of Sen. Pastore); see 112 Cong. Rec. 14247-52.

19
  Plaintiffs do not argue that the Safety Act creates a private right of action.  Instead, they argue that they brought suit under the private right of action  provided by the Georgia civil RICO statute and that the Safety Act's lack of a  private right of action does not preclude them from proceeding under this state  law theory. In Lowe v. General Motors Corp., 624 F.2d 1373 (5th Cir.1980), this  Court explained that a state negligence case in which a violation of the Safety  Act was used as evidence of the defendant's negligence is not the same as an  action to enforce the act's notification requirements. In other words, "[t]he  mere fact that the law which evidences negligence is Federal while the  negligence action itself is brought under State common law does not mean that  the state law claim metamorphoses into a private right of action under Federal  regulatory law." Id. at 1379. Thus, the Plaintiffs are correct that the lack of  a private right of action under the Safety Act does not preclude them acting  under a state law cause of action. However, the lack of a private right of  action for a violation of the Safety Act's notification requirements is strong  evidence that a violation of these requirements does not constitute the  predicate act of mail or wire fraud. As explained above, the Plaintiffs' cause  of action under the Georgia civil RICO statute fails because Plaintiffs cannot  show a violation of the federal mail or wire fraud statutes, not because they  could not proceed under a private right of action provided by the Safety Act.

20
  In Cort v. Ash, 422 U.S. 66, 95 S.Ct. 2080, 45 L.Ed.2d 26, (1975), the Supreme  Court set forth the following four guidelines:
In determining whether a private remedy is implicit in a statute not expressly  providing one, several factors are relevant. First, is the plaintiff one of the  class for whose especial benefit the statute was enacted, that is, does the  statute create a federal right in favor of the plaintiff? Second, is there any  indication of legislative intent, explicit or implicit, either to create such a  remedy or to deny one? Third, is it consistent with the underlying purposes of  the legislative scheme to imply such a remedy for the plaintiff? And finally, is  the cause of action one traditionally relegated to state law, in an area  basically the concern of the States, so that it would be inappropriate to infer  a cause of action based solely on federal law?
Id. at 78, 95 S.Ct. at 2088 (internal quotations and citations omitted).

21
  Section 30116 does not involve the notification duties. It provides in pertinent  part:
(a) If, after a manufacturer or distributor sells a motor vehicle or motor  vehicle equipment to a distributor or dealer and before the distributor or  dealer sells the vehicle or equipment, it is decided that the vehicle or  equipment contains a defect related to motor vehicle safety or does not comply  with applicable motor vehicle safety standards prescribed under this chapter -
(1) the manufacturer or distributor immediately shall repurchase the vehicle or  equipment at the price paid by the distributor or dealer, plus transportation  charges and reasonable reimbursement of at least one percent a month of the  price paid prorated from the date of notice of noncompliance or defect to the  date of repurchase; or
(2) if a vehicle, the manufacturer or distributor immediately shall give to the  distributor or dealer at the manufacturer's or distributor's own expense, the  part or equipment needed to make the vehicle comply with the standard or correct  the defect.
. . . .
(c) The parties shall establish the value of the installation and the amount of  reimbursement under this section. If the parties do not agree, or if a  manufacturer or distributor refuses to comply with subsection (a) or (b) of this  section, the distributor or dealer purchasing the motor vehicle or motor vehicle  equipment may bring a civil action. The action may be brought in a United States  district court for the judicial district in which the manufacturer or  distributor resides, is found, or has an agent, to recover damages, court costs,  and a reasonable attorney's fee. An action under this section must be brought  not later than 3 years after the claim accrues. 49 U.S.C.  30116.

22
  For example, a private cause of action could result in damages far in excess of  the civil penalties contemplated by the Safety Act thus undermining the civil  penalty limits. See 49 U.S.C.  30165(a) (limiting the civil penalty for  violations of  30118, which creates the notification duty, to $1000 for each  violation and to $800,000 for a related series of violations).

23
  On appeal, Plaintiffs have pointed only to the Safety Act as a source of any  duty to disclose on the part of the Defendants; they articulate no other duty to  disclose. Indeed, the district court expressly rejected Plaintiffs' argument  below that such a duty existed under Georgia law because of "confidential  relations" or "special circumstances."

24
  Thus, we need not explore whether or under what other circumstances mail and  wire fraud might be proved by nondisclosure of material facts intended to create  a false and fraudulent representation.

25
  Plaintiffs' Motion for Stay of Consideration of Appeal is denied.