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Vulcan Golf, LLC v. Google Inc.

July 31, 2008

VULCAN GOLF, LLC, JOHN B. SANFILIPPO & SON, INC., BLITZ REALTY GROUP, INC., AND VINCENT E. "BO" JACKSON, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, PLAINTIFFS,
v.
GOOGLE INC., OVERSEE.NET, SEDO LLC, DOTSTER, INC., A/K/A REVENUE DIRECT.COM., INTERNET REIT, INC., D/B/A IREIT, INC., AND JOHN DOES I-X DEFENDANTS.



The opinion of the court was delivered by: Hon. Blanche M. Manning

MEMORANDUM AND ORDER

I. Background

The court assumes familiarity with the facts of this case based on its prior order of March, 20, 2008, but briefly sets out some basic relevant facts. Plaintiffs Vulcan Golf, LLC, John B. Sanfilippo & Son, Inc. ("JBSS"), Blitz Realty Group, Inc., and Vincent E. "Bo" Jackson, have filed a complaint styled as a class action lawsuit against the following defendants: Google, Inc., Oversee.net, Sedo LLC, Dotster, Inc. a/k/a revenuedirect.com, Internet Reit, Inc., d/b/a Ireit, Inc., and John Does I-X.

The plaintiffs allege that Google and the other defendants have engaged in a wide-ranging scheme whereby they receive "billions of dollars in ill-gotten advertising and marketing revenue" by knowingly and intentionally registering, licensing and monetizing purportedly deceptive domain names at the expense of the plaintiff-mark owners. The court granted in part the defendants' motion to dismiss the First Amended Complaint with leave to replead the dismissed counts, specifically: (1) the RICO counts; (2) trademark infringement as to plaintiff Bo Jackson; (3) dilution of trademark as to plaintiff Blitz; (4) the Illinois Consumer Fraud and Deceptive Business Practices Act ("ICFDBPA") count; (5) the declaratory judgment count; (6) the intentional interference with current economic advantage count; (7) the unjust enrichment count, and (8) the civil conspiracy count.

Currently before the court is the defendants' consolidated motion to dismiss the Third Amended Complaint ("TAC"), which realleges all of the claims stated in the First Amended Complaint but does not seek a declaratory judgment or relief under the ICFDBPA. The defendants have filed a consolidated motion to dismiss the RICO counts, the claim for tortious interference with prospective economic advantage, the unjust enrichment count and the conspiracy count.*fn1

For the reasons stated below, the motion to dismiss is granted in part and denied in part.

I. Standard on Motion to Dismiss

On a motion to dismiss under Fed. R. Civ. P. 12(b)(6), the court accepts the allegations in the complaint as true, viewing all facts, as well as any inferences reasonably drawn therefrom, in the light most favorable to the plaintiff. See Marshall-Mosby v. Corporate Receivables, Inc., 205 F.3d 323, 326 (7th Cir. 2000). "While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the 'grounds' of his 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1964-65 (2007)(citations omitted).

The Seventh Circuit has interpreted Bell Atlantic as follows:

Rule 12(b)(6) permits a motion to dismiss a complaint for failure to state a claim upon which relief can be granted. To state such a claim, the complaint need only contain a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). The Supreme Court has interpreted that language to impose two easy-to-clear hurdles. First, the complaint must describe the claim in sufficient detail to give the defendant "fair notice of what the ... claim is and the grounds upon which it rests." Bell Atlantic Corp. v. Twombly, --- U.S. ----, ----, 127 S.Ct. 1955, 1964, 167 L.Ed.2d 929 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)) (alteration in Bell Atlantic ). Second, its allegations must plausibly suggest that the plaintiff has a right to relief, raising that possibility above a "speculative level"; if they do not, the plaintiff pleads itself out of court. Bell Atlantic, 127 S.Ct. at 1965, 1973 n. 14. E.E.O.C. v. Concentra Health Services, Inc., 496 F.3d 773, 776 (7th Cir. 2007). See also Killingsworth v. HSBC Bank Nevada, N.A., 507 F.3d 614, 618-19 (7th Cir. 2007) (observing that Supreme Court in Bell Atlantic "retooled federal pleading standards" such that a complaint must now contain "enough facts to state a claim for relief that is plausible on its face.").

III. Analysis

A. RICO Counts

The first three counts of the TAC seek relief under the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961, et. seq. Count I pleads a claim under 18 U.S.C. 1962(a), Count II is a claim under 18 U.S.C. § 1962(c), and Count III alleges a claim under 18 U.S.C. § 1962(d). The court addresses the motion to dismiss each of these counts in turn.

1. § 1962(c)

Under the federal RICO statute, it is "unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity ." 18 U.S.C. § 1962(c). Under section 1962(c), a plaintiff must allege a defendant's (1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity. Lachmund v. ADM Investor Servs., Inc., 191 F.3d 777 (7th Cir. 1999).

An "enterprise" is "any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity." 18 U.S.C. § 1961(4). "While a RICO enterprise can be formal or informal, some type of organizational structure is required." Stachon v. United Consumers Club, Inc., 229 F.3d 673 (7th Cir. 2000). Indeed, the "hallmark of an enterprise is 'structure.'" United States v. Korando, 29 F.3d 1114, 1117 (7th Cir. 1994)(citation omitted). Specifically, a RICO enterprise must have "an ongoing 'structure' of persons associated through time, joined in purpose, and organized in a manner amenable to hierarchical or consensual decision making." Jennings v. Emry, 910 F.2d 1434, 1440 (7th Cir. 1990)(citations omitted). Further, there must be "an organization with a structure and goals separate from the predicate acts themselves." United States v. Masters, 924 F.2d 1362, 1367 (7th Cir. 1991). "Thus, in order to adequately plead a claim under § 1962(c), the complaint must identify an 'association in fact' that is meaningfully different in the RICO context from the units that go to make it up." Williams v. Ford Motor Company, 11 F. Supp. 2d 983, 986 (N.D. Ill. 1998)(citation omitted).

The TAC alleges that the RICO enterprise is the Google Network, which it defines as: (1) Defendant Google; (2) the Parking Company Defendants; (3) Google Search Network (America Online, CompuServe, Netscape, AT& T WorldNet, EarthLink, Sympatico, and others); (4) Google Content site partners (New York Post Online Edition, Mac Publishing (includes Macworld.com, JavaWorld, LinuxWorld), HowStuffWorks, and others); (5) Google Adsense Network (Parking Company Defendants, Domain Aggregators, Domain Registrants, and other third party website owners, blog sites, domain registrants, licensees and aggregators that enter into agreements with Defendant Google for the monetization of domains under their license/control/ownership). See TAC at ¶ 214. It further alleges that each defendant is a "person" within the meaning of the RICO statute. Id. at ¶ 212.

The court agrees with the defendants that the TAC fails to repair the fatal deficiences of the First Amended Complaint regarding the allegations of structure and enterprise. As an initial matter, the plaintiffs' rote recitation of the legal requirements of a RICO claim fail to satisfy ...


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