United States District Court, N.D. Alabama, Northwestern Division
K. KALLON UNITED STATES DISTRICT JUDGE.
Moss and Florida Pharmacy Solutions, Inc. (“FPS”)
bring this action against Joseph Schilleci, Jason Tortorici,
and the firm Schilleci and Tortorici, P.C. (the
“Schilleci Defendants”),  for violations of Section
1962 (c) and (d) of the Racketeer Influenced and Corrupt
Organizations Act. See doc. 1. The court has for
consideration the Schilleci Defendants motion for summary
judgment, doc. 81, which is ripe for review, see
docs. 86, 89, and is due to be granted.
SUMMARY JUDGMENT LEGAL STANDARD
Rule 56(c)(2) of the Federal Rules of Civil Procedure,
summary judgment is proper “if the pleadings, the
discovery and disclosure materials on file, and any
affidavits show that there is no genuine issue as to any
material fact and that the movant is entitled to judgment as
a matter of law.” “Rule 56(c) mandates the entry
of summary judgment, after adequate time for discovery and
upon motion, against a party who fails to make a showing
sufficient to establish the existence of an element essential
to that party's case, and on which that party will bear
the burden of proof at trial.” Celotex Corp. v.
Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d
265 (1986). The moving party bears the initial burden of
proving the absence of a genuine issue of material fact.
Id. at 323. The burden then shifts to the nonmoving
party, who is required to “go beyond the
pleadings” to establish that there is a “genuine
issue for trial.” Id. at 324 (citation and
internal quotation marks omitted). A dispute about a material
fact is genuine “if the evidence is such that a
reasonable jury could return a verdict for the nonmoving
party.” Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
court must construe the evidence and all reasonable
inferences arising from it in the light most favorable to the
non-moving party. Adickes v. S. H. Kress & Co.,
398 U.S. 144, 157, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970);
see also Anderson, 477 U.S. at 255 (all justifiable
inferences must be drawn in the non-moving party's
favor). Any factual disputes will be resolved in the
nonmoving party's favor when sufficient competent
evidence supports the nonmoving party's version of the
disputed facts. See Pace v. Capobianco, 283 F.3d
1275, 1276, 1278 (11th Cir. 2002) (a court is not required to
resolve disputes in the nonmoving party's favor when that
party's version of events is supported by insufficient
evidence). However, “mere conclusions and unsupported
factual allegations are legally insufficient to defeat a
summary judgment motion.” Ellis v. England,
432 F.3d 1321, 1326 (11th Cir. 2005) (per curiam) (citing
Bald Mountain Park, Ltd. v. Oliver, 863 F.2d
1560, 1563 (11th Cir. 1989)). Moreover, “[a] mere
‘scintilla' of evidence supporting the opposing
party's position will not suffice; there must be enough
of a showing that the jury could reasonably find for that
party.” Walker v. Darby, 911 F.2d 1573, 1577
(11th Cir. 1990) (citing Anderson, 477 U.S. at
one of the owners of FPS, a compounding pharmacy. Doc. 82-1
at 4. In early 2015, FPS began negotiations with James Brown,
Janice Brown, Edie Hand, and Robert Hubbard to buy stock in
Mill City Gold (“MCG”), as part of a plan to
“form a new company and to sell [pharmaceutical] pain
creams in Asia.” Doc. 82-1 at 12. The conversations
evolved into a potential stock exchange, and, in April of
2015, Moss began discussing with Brown (MCG's president)
the sale and exchange of FPS shares for MCG shares. Doc. 82-2
Schilleci Defendants had no involvement in the share exchange
until late July, when Moss tasked the law firm with producing
documents to Brown. Docs. 82-2 at 8-9, 19-20; 82-3 at 4. Moss
later asked the Schilleci Defendants their opinions on
certain provisions in the final agreement due to his concerns
about losing control of FPS. Doc. 82-3 at 8.
Moss, FPS's board of directors, and MCG executed a Letter
of Agreement in which FPS and MCG agreed to effectively swap
their stock. Docs. 82-1 at 14; 86-9. Plaintiffs contend that
the MCG shares they received were worthless. Doc. 82-3 at 25.
Also, although Moss eventually received his FPS shares back,
they were allegedly worth less than before the merger.
Id. at 24.
claim that “Brown, assisted by Schilleci and Tortorici,
trick[ed] Moss into signing” the Letter of Agreement.
Doc. 1 at 7. Allegedly, Brown and the Schilleci and Tortorici
defendants formed an “enterprise within the meaning of
18 U.S.C. § 1961 (4) . . . to formulate and to carry out
. . . [a] racketeering . . . scheme . . . requiring
Plaintiffs to make certain payments and [allowing the
defendants to] take . . . control of FPS, in order to steal
from and defraud Plaintiffs.” Doc. 1 at 16-17.
Schilleci Defendants raise multiple arguments in support of
their motion, which the court addresses below.
The Plaintiffs' Claims are Barred by the
the Private Securities Litigation Reform Act (PSLRA), absent
a criminal conviction, “no person may rely upon any
conduct that would have been actionable as fraud in the
purchase or sale of securities to establish a [RICO]
violation.” 18 U.S.C. § 1964(c). This RICO bar is
applied broadly, “regardless of whether the plaintiff
explicitly relied upon securities fraud as a predicate act or
even had standing to pursue a securities fraud claim.”
Licht v. Watson, 567 F. App'x 689, 693 (11th
Cir. 2014). “[A] district court properly dismiss[es a
plaintiff's] RICO claims [when a plaintiff] rel[ies] on
predicate acts barred by the PSLRA.” Id.
Furthermore, a plaintiff may not avoid this bar by
“pleading mail fraud, wire fraud and bank fraud as
predicate offenses in a civil RICO action if the conduct
giving rise to those predicate offenses amounts to securities
fraud.” Id. (citing Bald Eagle Area Sch.
Dist. v. Keystone Fin., 189 F.3d 321, 330 (3d ...