Commercial Litigation and Arbitration

Attorneys’ Fees and Cost of Defense of RICO-Violative Prosecution Afford Standing, But Embarrassment, Humiliation and Inconvenience ≠ RICO Injury

Attorneys' Fees and Cost of Defense of RICO-Violative Prosecution Afford Standing, But Embarrassment, Humiliation and Inconvenience ≠ RICO Injury From Kilper v. City of Arnold, 2009 U.S. Dist. LEXIS 63471 (E.D. Mo. July 23, 2009):

The Red Light Camera Ordinance. In June 2005, City passed Bill No. 2102 enacting the original Ordinance 2.2 ("Red Light Camera Ordinance" or "Ordinance"), which contained declarations that drivers who ran red lights caused many car crashes and numerous personal injuries each year; that it was impracticable for City to place police officers at each traffic signal at all times of the day to reduce these incidents; that automatic red light enforcement programs in other jurisdictions throughout the United States have been proven to significantly reduce the number of drivers who run red lights in those jurisdictions; and that vehicles are typically driven by their owners and it is therefore reasonable to assume, without evidence to the contrary, that the owner of a vehicle is driving the vehicle at a given time and place....

The Notices of Violation. The Notice of Violation sent to the owner of a vehicle photographed running a red light states that the owner may pay the fine online, by mail, or in person; may request a hearing to dispute the Notice of Violation in person; or, if the owner was not operating the motor vehicle at the time the vehicle was photographed running the red light, may transfer liability to the person operating the vehicle by completing an Affidavit of Non-Responsibility in which the owner identifies the person operating the motor vehicle at the time of the alleged violation....

Standing. In a footnote in their brief supporting the Joint Motion, Defendants suggest that the remaining "Plaintiffs lack standing because they have not paid their fines and, therefore, have suffered no injury in fact" ***

[T]he Court also finds Plaintiffs have standing to pursue some of their RICO claims at this stage of the proceedings. "RICO provides a private right of action for any person 'injured in his business or property by reason of a violation of' its substantive prohibitions. 18 U.S.C. § 1964(c)." Dahlgren v. First Nat'l Bank of Holdrege, 533 F.3d 681, 689 (8th Cir. 2008), cert. denied, 129 S.Ct. 1041 (2009). A plaintiff has standing to pursue RICO claims when, in relevant part, the plaintiff has suffered injury to the plaintiff's "business or property" due to RICO violations. Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 496 (1985) ("the plaintiff only has standing if, and can only recover to the extent that, he has been injured in his business or property by the conduct constituting the violation"); Hamm v. Rhone-Poulenc Rorer Pharms, Inc., 187 F.3d 941, 954 (8th Cir. 1999) (plaintiffs who did not show injury to "business or property" within the meaning of § 1964(c), but only damage to their reputation, lacked standing to pursue RICO civil claims). Here, for their RICO claims, Plaintiffs allege in relevant part that they are "injured in their property [in that] Plaintiff[s] have suffered embarrassment, humiliation, and inconvenience as well as being forced to hire attorneys and expend money for attorneys' fees and costs." ***

To the extent Plaintiff allege they have suffered embarrassment, humiliation, and inconvenience, Plaintiffs lack standing to pursue their RICO claims, as such injuries are more akin to personal injuries than to injuries to "business or property." Cf. Regions Bank v. J. R. Oil Co., 387 F.3d 721, 728-29 (8th Cir. 2004) (a showing of injury for a civil RICO claim "'requires proof of concrete financial loss, and not mere injury to a valuable intangible property interest'" (quoting Steele v. Hospital Corp. of Am., 36 F.3d 69, 70 (9th Cir. 1994)); Hamm, 187 F.3d at 954 ("[d]amage to reputation is generally considered personal injury and thus is not injury to 'business or property' within the meaning of 18 U.S.C. § 1964(c)").

"[M]oney . . . is a form of property," Reiter v. Sonotone Corp. , 442 U.S. 330, 338 (1979) (interpreting "business or property" in a consumer's antitrust case), however, and monetary losses or expenditures related to court proceedings before the RICO litigation may satisfy the "business or property" requirement for civil RICO claims. See Handeen v. Lemaire, 112 F.3d 1339, 1354 (8th Cir. 1997) (plaintiff had standing to pursue a RICO claim to recover attorneys' fees the plaintiff incurred in objecting to the defendants' allegedly fraudulent claims in bankruptcy).

Therefore, Plaintiffs have satisfied their burden to show perceptible harm for purposes of standing to pursue their civil RICO claims, but only to the extent they may have expended money for attorneys' fees and costs related to the defense of the Notices of Violation, and not to the extent they allege they have suffered embarrassment, humiliation, and inconvenience.

Share this article:


Recent Posts