Ambellu v. Re'ese Adbarat Debre Selam Kidist Mariam, the Ethiopian Orthodox Tewhado Religion Church ( 2019 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
ALEMEWORK AMBELLU et al.,
Plaintiffs,
v. Case No. 1:18-cv-02177 (TNM)
RE’ESE ADBARAT DEBRE SELAM
KIDIST MARIAM, THE ETHIOPIAN
ORTHODOX TEWHADO RELIGION
CHURCH et al.,
Defendants.
MEMORANDUM OPINION
For years, two rival factions have fought bitterly for control over the Re’ese Adbarat
Debre Selam Kidist Mariam Ethiopian Orthodox Tewhado Church. After starting in the local
courts, this fight has now been brought here by dozens of former parishioners (the
“Parishioners”). They claim that a group of current members and priests conspired to take
control of the Church, its operations, and its assets. Alleging violations of the Racketeer
Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. §§ 1961 et seq., and related
tortious acts, the Parishioners filed this suit against the Church and dozens of its members
(collectively, the “Current Leaders”).
The Current Leaders have moved to dismiss these claims. They argue that the First
Amendment’s Free Exercise Clause prohibits the Court from resolving this dispute, as it involves
inherently religious matters. The Court agrees in part. It is barred from hearing some of the
Parishioners’ arguments and will dismiss these for lack of subject matter jurisdiction. The
Current Leaders also contend that the Parishioners have failed to plead sufficiently their RICO
allegations. Again, the Court agrees, and it will dismiss the Parishioners’ RICO allegations for
failure to state a claim. And it declines to exercise supplemental jurisdiction over the
Parishioners’ remaining claims. The Court will therefore grant the Current Leaders’ motion to
dismiss.
I.
The origins of this dispute are unclear. The Parishioners suggest that, “beginning in
around 2012, various controversies over Church governance arose.” Am. Compl. 32, ECF No. 6.
Akilu Habte, one of the Current Leaders, alleges that he and other Church members had “serious
concerns about the misconduct of several of the [Church’s] Board of Trustees members.” Id.,
Ex. A, ECF No. 6-1, at 2. 1 The Board members, Mr. Habte contends, “remained on the Board
beyond the limits of their terms,” “failed to conduct elections in 2012 or 2013, in violation of the
[Church’s] bylaws,” terminated employees and clergy members without cause or process, and
impermissibly altered the Church’s bylaws. Id. at 2-4.
Perhaps because of these concerns, “in 2013 a number of other members of the
congregation formed [a] Committee, led by Defendant Akilu Habte, which decided to take over
control of the Church.” Am. Compl. 32. They allegedly did so without the Parishioners’
knowledge. Id. Over the next two years, the Parishioners contend, the Committee “held a
number of regular meetings for the express purpose of conspiring to devise a scheme to obtain
control of the money and property of the Church by means of false or fraudulent pretenses,
representations and promises.” Id.
Then, at the end of Church services on a Sunday in 2015, Mr. Habte allegedly
1
The Court notes that Mr. Habte’s statements were attached by the Parishioners as an exhibit to their First
Amended Complaint. These statements are therefore “a part of the pleading for all purposes.” Fed. R.
Civ. P. 10(c). The Court relies on them only to provide background, and not to discredit the Parishioners’
factual allegations. See Banneker Ventures, LLC v. Graham, 798 F.3d 1119, 1133 (D.C. Cir. 2015).
2
“announced that the serving members of the Church’s Board of Trustees . . . were dismissed.”
Id. The Parishioners believe that, “through false or fraudulent pretenses and representations,”
Mr. Habte appointed an interim Board that assumed control of the Church. Id. at 32-33. Since
this appointment, the interim and current Boards have purportedly denied the Parishioners access
to the Church and its assets. Id. at 33.
The Parishioners argue that the Current Leaders used false or fraudulent pretenses to
obtain control of the Church and its financial assets. Id. at 36. They “provided broad and
repeated notice to all Church Members” of the Committee’s “intention to hold a vote to dismiss
the elected members of the Board of Trustees” and replace them with an interim Board. Id. But
no such vote occurred. See id. at 38. Instead, the Committee members, “along with other groups
within the Church,” allegedly decided to dismiss the Board unilaterally and replace it with an
interim Board. Id.
These and other actions, according to the Parishioners, constitute a conspiracy to commit
civil RICO violations by wresting control over the Church through fraud. Id. at 36-43. The
Parishioners also allege negligent and intentional infliction of emotional distress, conversion,
unjust enrichment, negligence, and breach of fiduciary duties. See id. at 44-55.
The Current Leaders have moved to dismiss these claims for two reasons. First, they
contend that the Court lacks subject matter jurisdiction over the case. The First Amendment,
they suggest, bars judicial resolution of the parties’ fight because the Court’s review “would
require an examination of ecclesiastical cognizance and Church governance.” Defs.’ Mot. to
Dismiss (“Defs.’ Mot.”), ECF No. 9, at 16. 2 And the Free Exercise Clause forbids the Court
“from interpreting standards of ecclesiastical conduct or examining a church’s financial affairs.”
2
Citations are to the page numbers generated by this Court’s CM/ECF system.
3
Id. at 17.
Second, the Current Leaders contend that the Parishioners have failed to plead
sufficiently their RICO claims. Id. at 19. They argue that allegations of a conspiracy to commit
fraud are subject to Federal Rule of Civil Procedure 9(b). Id. Rule 9(b) requires that the
“circumstances constituting fraud or mistake” be stated “with particularity.” Fed. R. Civ. P. 9(b).
The requisite particularity, the Current Leaders urge, is lacking from the Parishioners allegations.
Defs.’ Mot. at 19. And even if Rule 9(b) does not apply, they argue, the Parishioners’ claims of
fraud “do not constitute a pattern of racketeering” as required by the RICO statute. Id. These
claims therefore warrant dismissal. See id. at 27-29. The Current Leaders also contend that if
the Court dismisses the RICO allegations, it should dismiss the Parishioners’ remaining claims
and decline to exercise supplemental jurisdiction. Id. at 30-31.
The parties submitted thorough briefing on these issues and presented oral arguments.
The Parishioners’ claims and the Current Leaders’ Motion to Dismiss are now ripe for review.
II.
Before it may turn to the merits of the Parishioners’ claims, the Court must first confirm
its subject matter jurisdiction over the case. The Current Leaders argue that the First
Amendment prohibits judicial resolution of the parties’ dispute. Defs.’ Mot. at 16. They thus
seek dismissal under Federal Rule of Civil Procedure 12(b)(1).
To survive a motion to dismiss under this rule, the Parishioners bear the burden of
establishing that the Court has subject matter jurisdiction over their claims. See Moms Against
Mercury v. FDA, 483 F.3d 824, 828 (D.C. Cir. 2007). In conducting its review, the Court may
consider “the complaint supplemented by undisputed facts plus the [C]ourt’s resolution of
disputed facts.” Herbert, 974 F.2d at 197. It accepts as true all factual allegations in the
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complaint. Wright v. Foreign Serv. Grievance Bd., 503 F. Supp. 2d 163, 170 (D.D.C. 2007). It
also gives the Parishioners “the benefit of all favorable inferences that can be drawn from the
alleged facts.” Id.
At this early stage, the Parishioners have partially met their burden of establishing the
Court’s jurisdiction. Generally, the First Amendment bars courts from adjudicating matters of
“ecclesiastical cognizance.” See Serbian E. Orthodox Diocese v. Milivojevich, 426 U.S. 696,
698 (1976). To allow otherwise would create a “substantial danger that the State will become
entangled in essentially religious controversies” or that it will “intervene on behalf of groups
espousing particular doctrinal beliefs.” Id. at 709.
But there are narrow exceptions. Courts may resolve church property disputes to which
they can apply “neutral principles of law.” Presbyt’n Church in the U.S. v. Mary Eliz. Blue Hull
Mem. Presbyt’n Church, 393 U.S. 440, 449 (1969). And the Supreme Court has suggested that
“marginal” civil court review may be appropriate where fraud or collusion underlies the actions
of a church or its members. See Milivojevich, 426 U.S. at 711-13.
Examined in the light most favorable to the Parishioners, some of their claims are
capable of resolution using secular legal principles. 3 Counts I-III of the First Amended
Complaint, for instance, allege civil RICO violations. Am. Compl. at 40-43. The Parishioners
3
The Current Leaders suggest that, because of the First Amendment concerns raised, a complaint
challenging church action is subject to a heightened pleading requirement. See Defs.’ Reply, ECF No. 17,
at 12-13. They cite a D.C. Court of Appeals case for this proposition. See id. (discussing Bible Way
Church of Our Lord Jesus Christ of the Apostolic Faith v. Beards, 680 A.2d 419 (D.C. 1996)).
Neither the Current Leaders nor the Bible Way decision identify binding precedent that suggests the
existence of a heightened pleading standard. That said, the Court agrees that where judicial review of
inherently religious matters is a possibility, careful review of the pleadings is required. And, in any event,
the Parishioners’ factual allegations require “closer scrutiny” under a Rule 12(b)(1) motion than under
motions to dismiss for failure to state a claim. See Wright, 503 F. Supp. 2d at 170. The Court thus
applies this level of scrutiny to assess the Parishioners’ claims.
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argue that the Current Leaders illegally took control of the Church and its assets. They
purportedly did so by falsely “promis[ing] that a vote to dismiss the Serving Board would be
held.” Id. at 38. No vote occurred, and the Current Leaders instead dismissed the Board through
“unilateral action.” Id. at 39. They thus took “effective control of the Church through false or
fraudulent pretenses.” Id.
The Parishioners do not ask the Court to reinstate the Church’s former Board of Trustees.
Id. at 40-43. 4 Nor do they seek resolution of any questions about the control or leadership of the
Church. Id. Instead, they seek money damages under the RICO provisions for civil remedies, 18
U.S.C. § 1964. Id.
As pleaded, these claims do not “turn on the resolution by civil courts of controversies
over religious doctrine and practice.” Presbyt’n Church in the U.S., 393 U.S. at 449. Rather,
they involve the “narrow rubrics of ‘fraud’ or ‘collusion’” that may permit “marginal civil court
review” when “church tribunals act in bad faith for secular purposes.” Milivojevich, 426 U.S. at
713. At this stage of the litigation, proceeding to the merits of these claims would not
improperly entangle the Court in an essentially religious controversy.
Counts XI and XII, which allege breaches of fiduciary duties, also survive the Current
Leaders’ jurisdictional challenge. The Parishioners claim that the Church is a “non-profit
member corporation organized under the laws of the District of Columbia.” Am. Compl. at 27.
Under D.C. law, a board of trustees may owe a fiduciary duty of loyalty to the corporation and
its members. See, e.g., Willens v. 2720 Wis. Ave. Co-op. Ass’n, Inc., 844 A.2d 1126, 1136 (D.C.
4
A group of Parishioners sued some of the Current Leaders in the Superior Court for the District of
Columbia claiming that the removal of the former Board was invalid under the Church’s bylaws. See
ECF No. 9-2 at 4. The trial court ruled against them, and their suit is now pending appeal before the D.C.
Court of Appeals. See ECF No. 9-5 at 2-57.
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2004). Both Counts XI and XII allege a breach of this duty by the Church’s new Board. Am.
Compl. at 51-53.
These claims could, in theory, be resolved through application of neutral principles of
corporate law. See, e.g., Jones v. Wolf, 443 U.S. 595, 607-08 (1979) (discussing the potential
resolution of a church dispute using a neutral “presumptive rule of majority representation”).
These principles may include, for example, generally applicable rules about when a fiduciary
duty of loyalty is owed or whether a corporation can remove the duty of loyalty through its
charter or bylaws. So considering the merits of these claims at the motion to dismiss stage would
not violate the First Amendment.
The Parishioners’ remaining allegations, however, must be dismissed for lack of
jurisdiction. Counts IV-VII allege negligent and intentional infliction of emotional distress. Am.
Compl. at 44-47. Count XIII alleges negligence. Id. at 54. Central to these claims is the
Parishioners’ contention that the “effective denial” “of [Parishioners’] ability to worship at the
Church proximately caused the [Parishioners] serious and verifiable emotional distress.” See id.
at 44-47.
Whether someone may worship at a church is plainly a matter of ecclesiastical
cognizance. See Burgess v. Rock Creek Baptist Church, 734 F. Supp. 30, 33 (D.D.C. 1990)
(“[T]his Court must not interfere with the fundamental ecclesiastical concern of determining who
is and who is not [a] Church member.”). Indeed “exclusion from a religious community, is not a
harm for which courts can grant a remedy.” Id. To hold otherwise would risk entanglement in a
fundamentally religious endeavor—defining and applying the requirements of church
membership. Excommunication has been practiced by churches since biblical times. See 1
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Corinthians 5:13 (NIV) (“Expel the wicked person from among you.”). It is not for civil courts
to question the propriety of ecclesiastical discipline.
During oral argument, the Parishioners’ counsel suggested that “our state law claims are
based upon a very simple definition of [Church] membership that does not really go to the
[Church’s] bylaws.” Hr’g Tr. 50:23-25. Instead, these claims invoke “membership, the way it
has been practiced,” which “involved the right to vote on budgets” and which “means
ownership” in the Church. Id. at 50:25-51:3. But without resort to plausibly secular governance
documents—like an entity’s bylaws—the Court is even less convinced that it can identify neutral
principles of law that it can use to define the Parishioners’ membership rights in the Church.
Because the Court cannot determine whether the Parishioners were rightly excluded from the
Church, it cannot assess the emotional distress that may have resulted from this exclusion.
Similarly, Counts XIII, IX, and X must be dismissed. In these counts, the Parishioners
allege that they “made regular dues contributions towards the Church’s operating expenses and
reserve funds.” Am. Compl. 31. They contend that the Current Leaders have engaged in
conversion of these contributions by depriving the Parishioners of their right to vote on how the
monies are used. Id. at 48-49. They also allege unjust enrichment and ask the Court to place the
Church’s assets into a constructive trust. Id. at 50.
Judicial review of these claims would fall afoul of the First Amendment. How a church
spends worshippers’ contributions is, like the question of who may worship there, central to the
exercise of religion. And placing its assets in trust for the Parishioners at the expense of the
Current Leaders would constitute an impermissible judicial interference with the Church’s ability
to make governance and spending decisions. Indeed, evaluating the Parishioners’ claims would
require the Court to decide who is rightfully empowered to make financial decisions for the
8
Church. The Free Exercise Clause requires that the Court to decline to do so. Accord Nunn v.
Black, 506 F. Supp. 444, 446 (W.D.Va. 1981) (declining on First Amended grounds to hear the
claims of former parishioners who alleged, among other things, that they “contributed
considerable sums of money to the construction, maintenance, and upkeep of the Church
property” and that “the acts of the defendants in the expulsion” of the parishioners “denied
[them] of their beneficial interest in the Church without due process of law”).
During oral argument, the Parishioners’ counsel suggested that “fairness and equity”
require that the money the Parishioners contributed to the Church should be returned to them “at
least in proportion to what they paid in.” Hr’g Tr. 15:8-11. But the Parishioners cite no
authority for the extraordinary proposition that donations to a non-profit corporation vest the
contributors with any rights to those funds. And they identify no neutral principles of law the
Court may use to determine whether contributions to a church create such rights.
Ultimately, in the 12(b)(1) context, the burden is on the Plaintiffs to show the Court has
jurisdiction over their claims. Commonwealth v. U.S. Dep’t of Educ., 340 F. Supp. 3d 7, 12
(D.D.C. 2018) (noting the court “presumes that it lacks jurisdiction unless the contrary appears
affirmatively from the record”). They have not met this burden.
The Parishioners’ arguments to the contrary are unpersuasive. True, courts have resolved
church property disputes “without resolving underlying controversies over religious doctrine.”
Pls.’ Opp. to Mot. to Dismiss (“Pls.’ Opp.”), ECF No. 16, at 11. But these cases show the
shortcoming of the Parishioners’ claims.
In Minker v. Baltimore Annual Conference of United Methodist Church, for instance, a
Methodist minister sued a church, alleging age discrimination and breach of contract. 894 F.2d
1354, 1356 (D.C. Cir. 1990). The D.C. Circuit affirmed a dismissal of the age discrimination
9
claim on First Amendment grounds. Id. But it allowed one of the contract claims to move
forward. Id. That claim was on firmer footing than any here, though.
The minister had alleged that a district church superintendent breached an oral contract to
find him a more suitable congregation. Id. at 1355. The court found that, “[a]s a theoretical
matter, the issue of breach of contract can be adduced by a fairly direct inquiry into whether [the
minister’s] superintendent promised him a more suitable congregation, whether [the minister]
gave consideration in exchange for that promise, and whether such congregations became
available but were not offered to [him].” Id. at 1360. It therefore concluded that judicial review
of this discrete claim “will not necessarily create an excessive entanglement” with the exercise of
religion. Id. Even then, the court cautioned that the minister was only “entitled to prove up his
claim of breach of an oral contract to the extent that he can divine a course clear of the Church’s
ecclesiastical domain.” Id. at 1361.
Unlike in Minker, there is no “fairly direct inquiry” the Court can use to resolve the
Parishioners’ broad tort claims. Rather, review of these allegations would require delving into
the Church’s practices and customs. And it would inevitably invoke issues that are “close to the
core of ecclesiastical concern.” Burgess, 734 F. Supp. at 34. The Parishioners allege harm, for
example, to their “spiritual and emotional well-being” that “was necessarily implicated by their
close and devout relationship with the Church.” Am. Compl. 44. The First Amendment
prohibits review of such claims. The Court will therefore dismiss the Parishioners’ non-RICO
claims, except for those alleging breach of a fiduciary duty, for lack of subject matter
jurisdiction.
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III.
While the Parishioners’ RICO and fiduciary duty claims overcome the jurisdictional
hurdle, they fail to clear the Current Leaders’ remaining challenges.
A.
Consider first the RICO allegations. The Parishioners allege a conspiracy to violate
18 U.S.C.§§ 1962(b) and (c). The former section makes it unlawful to acquire control of an
enterprise “through a pattern of racketeering activity.” 18 U.S.C. § 1962(b). Similarly, the latter
makes it unlawful for an employee or associate to participate in the enterprise’s affairs “through
a pattern of racketeering activity.” Id. § 1962(c). “[C]entral to the Parishioners’ RICO counts is
§ 1962(d), which makes it unlawful for persons to ‘conspire to violate’ subsections (b) and (c).”
Pls.’ Opp. at 14 (quoting 18 U.S.C. § 1962(d)).
As the statutory text makes clear, to bring a successful claim under these sections, a
plaintiff must allege a “pattern of racketeering activity.” A “pattern” requires at least two
predicate acts of racketeering activity. Salinas v. United States, 552 U.S. 52, 62 (1997). And
“racketeering activity” encompasses many nefarious acts, including mail and wire fraud. See 18
U.S.C. § 1961(1). Here, the Parishioners base their RICO claims on alleged mail and wire fraud
conducted by the Current Leaders to gain control of the Church. See Am. Compl. 36-43; Pls.’
Mot. at 14 (noting that racketeering activity “may be based—as here—on mail fraud and wire
fraud).
The Current Leaders seek dismissal of these claims for two reasons. First, they contend
that the Parishioners have failed to plead their allegations of fraud with sufficient particularity, as
required by Federal Rule of Civil Procedure 9(b). Second, they suggest that the Parishioners
have failed to state legally cognizable claims and that these allegations should therefore be
11
dismissed under Rule 12(b)(6). Both arguments are correct. And each serves as an independent
basis to dismiss the Parishioners’ claims.
1.
Rule 9(b) states that, “[i]n alleging fraud or mistake, a party must state with particularity
the circumstances constituting fraud or mistake.” Fed. R. Civ. P. 9(b). A party pleading fraud
must therefore “state the time, place[,] and content of the false misrepresentations, the fact
misrepresented[,] and what was retained or given up as a consequence of the fraud.” Kowal v.
MCI Commc’ns Corp., 16 F.3d 1271, 1278 (D.C. Cir. 1994).
Allegations of fraud lie at the heart of the Parishioners’ RICO claims. They suggest that
the Current Leaders conspired to take control of the Church “through false or fraudulent
pretenses, representations[,] and/or promises.” Am. Compl. 39; see also id. at 41-42. Rule 9(b)
therefore applies to their pleadings.
The Parishioners’ protestations to the contrary are misguided. To begin with, during oral
argument they conceded that “fraud needs to be pled with particularity,” and that, “because of
the fraud allegation[s]” in their Complaint, they must plead the fraud with particularity. Hr’g Tr.
22:22-23:14. They also agreed that “whether or not 9(b) applies,” they “needed to plead fraud
with particularity.” Id. at 24:1-7. In other words, the Parishioners appear to concede that Rule
9(b)’s particularity requirement—or its functional equivalent—applies here.
Even so, their brief suggests, citing only an out-of-circuit case, that “conspiracy claims
have not been held to the Rule 9(b) pleading standard.” Pls.’ Opp. at 13 (citing S. Broward
Hosp. Dist. v. MedQuist Inc., 516 F. Supp. 2d 370, 393 n.14 (D.N.J. 2007)). Perhaps. But the
plain meaning of Rule 9(b) requires that any claim that alleges “fraud or mistake” must be
“state[d] with particularity.” Fed. R. Civ. P. 9(b). Nothing in the text of the rule suggests that a
12
claim alleging conspiracy to commit fraud is immune from this requirement. See, e.g., FC Inv.
Grp. LC v. IFX Markets, Ltd., 529 F.3d 1087, 1098 (D.C. Cir. 2008) (noting, in the context of a
claim alleging conspiracy to commit civil fraud, that a plaintiff must “plead with particularity the
conspiracy as well as the overt acts . . . taken in furtherance of the conspiracy”).
And where a RICO claim is based on predicate acts involving fraud, courts have
routinely applied Rule 9(b). See, e.g., Moore v. PaineWebber, Inc., 189 F.3d 165, 172 (2d Cir.
1999) (“Federal Rule of Civil Procedure 9(b) states that in averments of fraud, ‘the
circumstances constituting fraud . . . shall be stated with particularity.’ This provision applies to
RICO claims for which fraud is the predicate illegal act.”); Wall v. Michigan Rental, 852 F.3d
492, 496 (6th Cir. 2017) (applying Rule 9(b) to allegations of wire and mail fraud). In short, the
Court finds that because the Parishioners’ claims include allegations of fraud, they must state the
circumstances of this fraud with particularity.
They fail to do so. Count I, for example, suggests that the Current Leaders conspired to
use “false or fraudulent pretenses” to obtain control of the Church. Am. Compl. 36. But beyond
this conclusory statement, it offers no further specifics about this alleged fraud. Instead, it
contends that
• The Current Leaders “provided broad and repeated notice to all Church Members” of
their “intention to hold a vote to dismiss the elected members of the Board of
Trustees” and replace them with an interim Board “until a new Board could be
elected.” Am. Compl. 36;
• This intention to hold a vote was “articulated in a written position statement that was
read aloud to the General Assembly of the Church on August 30, 2015.” Id. at 37;
13
• This intention was reiterated at least twice by the Church’s clergy and other Current
Leaders. Id.;
• But “no such vote was conducted. Instead Defendant Habte ‘announced’ that [the
Current Leaders] along with other groups within the Church ‘had decided to dismiss
the eight elected members of the [Board of Trustees] and replace them with an
interim committee until a new Board could be elected.’” Id. at 38.
These allegations fail to identify any fraud, much less state fraud with particularity. Read most
logically, they suggest that the Current Leaders promised the Church a vote that never occurred.
But a broken promise alone is not necessarily fraudulent. And, without more specificity, the
Court cannot reasonably infer that the Current Leaders had an intent to deceive or misrepresent
when making statements about a forthcoming vote.
Indeed, the remaining allegations in Count I only reinforce this conclusion. The
Parishioners suggest that the Current Leaders “regularly discussed” their desire to “take control
of the Church on Abyssinia Radio,” a local station catering to the Ethiopian community. Id. at
37. And the Current Leaders purportedly “held numerous meetings in person or by telephone” to
“devise a scheme to obtain control of the Church.” Id.
These allegations are at best inconclusive regarding fraud. Airing a grievance over the
radio is not a fraudulent act. Indeed, this allegation suggests the intended takeover was open and
notorious, not clandestine and duplicitous. Nor is “scheming” to effectuate a change in
organizational leadership a fraudulent act. After all, holding meetings, publicly criticizing
leaders, and discussing a change through elections—all legal acts—are forms of “scheming.”
Simply put, Count I provides ample detail about various statements, representations, meetings,
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and actions. But it fails to provide any particularity about the time, place, or content of any
fraudulent statement.
Counts II and III suffer from the same defect. Count II describes the “Individual Current
Leaders” as “co-conspirators” in “the scheme to acquire and maintain” control of the Church.
Am. Compl. 40-41. But it offers no details about how these Current Leaders joined in the
alleged conspiracy, their roles in perpetrating any fraud, or the time or place of any fraudulent
misrepresentations they may have made.
Count III alleges that the Current Leaders “regularly solicited” “contributions from
members of the congregation” while “[k]nowing that they planned to acquire control of the
Church” and its assets. Id. at 42. The Parishioners describe this as conversion “by fraud.” Id.
But the Parishioners identify no specific false representations or promises made by any of the
Current Leaders to solicit these contributions.
In fact, during oral argument, the Parishioners suggested that these contributions went
into a “building fund.” Hr’g Tr. 13:9-16. And this fund, they conceded, is “frozen right now”
and “was frozen by the [District of Columbia’s] Superior Court.” Id. at 13:21-24. It is thus
unclear what harm the Parishioners allege about the contributions they made, as these
contributions remain frozen at the direction of the Superior Court.
Contrast these allegations with those raised in a similar case. In Jericho Baptist Church
Ministries, Inc. (District of Columbia) v. Jericho Baptist Church Ministries, Inc. (Maryland), 223
F. Supp. 3d 1 (D.D.C. 2016), the court also considered RICO claims. There, like here, the
plaintiff alleged “in essence, a scheme by the Individual Current Leaders to usurp the corporate
identity and assets” of a church. Id. at 8. But the plaintiff made more detailed contentions. It
alleged that the defendants conspired to fraudulently secure the resignations of two named board
15
members and excluded a third from board meetings. Id. The defendants also purportedly
“surreptitiously reconstitute[d]” the board without notice to the former members. Id.
One defendant allegedly “made cash withdrawals from [the church’s] bank accounts,
wrote checks to herself or her husband, or made credit card payments totaling nearly $85,000 for
her personal use.” Id. Another defendant “received nearly $250,000 in unexplained payments”
from the church’s corporate bank accounts. Id. The court found that, based on these claims, the
plaintiff had sufficiently alleged civil RICO violations. Id. As even this cursory review makes
clear, the vague and generalized contentions the Parishioners offer here fall far short of the
particularity that courts have typically required for fraud claims.
More still, mail and wire fraud serve as the required predicate acts for the Parishioners’
RICO claims. See Am. Compl. 36-43. But they fail to allege any false statements transmitted
using the Postal Service, radio, wires, or television. True, the Parishioners do mention the
broadcasts on Abyssinia Radio. Am. Compl. 37. But they contend only that the Current Leaders
“regularly discussed the need to replace the [Board of Trustees] and thereby take control of the
Church.” Id. Indeed, during oral argument, the Parishioners’ counsel suggested that there was a
“fair inference” that the Current Leaders had used the mail and wires. Hr’g Tr. 20:3-6. That is
not nearly enough. See Bates v. Nw. Human Servs., Inc., 466 F. Supp. 2d 69, 89 (D.D.C. 2006).
Similarly, the Parishioners claim that the Current Leaders used the Postal Service to ask a
bank to freeze the Church’s accounts. Id. at 43. But recall that the Parishioners’ counsel
explained that, in fact, it was the Superior Court that has frozen these accounts. Hr’g Tr. 13:21-
24. In any event, they offer little more than this claim. They fail to allege, for instance, that the
Current Leaders falsely claimed that they had the authority to make such a request. Nor do they
suggest that the Current Leaders used false pretenses to induce the bank to freeze the accounts.
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See id. The Parishioners fail, in other words, to show how any mailings or transmissions
“furthered the fraudulent scheme.” Bates, 466 F. Supp. 2d at 89. Their allegations are far more
nebulous than the embezzlement claims at issue in Jericho Baptist. See 223 F. Supp. 3d at 8.
For these reasons, the Court finds that Counts I-III of the Parishioners’ Amended
Complaint fail to assert fraud with the particularity required by Rule 9(b). It will therefore
dismiss these claims.
2.
Even if Rule 9(b) does not require dismissal of the RICO claims, the Court finds that
their dismissal is warranted under Rule 12(b)(6). This rule permits dismissal when a plaintiff
“fail[s] to state a claim upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). A valid
claim must consist of factual allegations that, if true, “state a claim to relief that is plausible on
its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). Mere “labels and conclusions”
or “naked assertion[s] devoid of further factual enhancement” are insufficient. Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009) (quotations omitted). Rather, “[a] claim has facial plausibility when
the plaintiff pleads factual content that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.” Id.
Under Rule 12(b)(6), the Court must construe the Parishioners’ allegations in the light
most favorable to them and accept as true all reasonable factual inferences drawn from well-
pleaded allegations. In re United Mine Workers of Am. Emp. Benefit Plans Litig., 854 F. Supp.
914, 915 (D.D.C. 1994). The Court need not, however, accept legal conclusions or conclusory
statements as true. Iqbal, 556 U.S. at 678.
Dismissal is warranted under Rule 12(b)(6) because the Parishioners have failed to allege
a plausible pattern of racketeering activity. First, recall that the Parishioners’ mail and wire
17
fraud allegations identify no false statements or misrepresentations the Current Leaders made
through use of the radio or the Postal Service. Their “mere conclusory statements” are “not
entitled to the assumption of truth.” Id. The Court finds that these statements fail under the less
exacting 12(b)(6) standard, too.
But even if the mail and wire fraud allegations are sufficiently pleaded, they do not save
the Parishioners’ claims. Beyond multiple predicate offenses, a “pattern of racketeering activity”
requires two additional elements: relatedness and continuity. See H.J. Inc. v. Nw. Bell Tele. Co.,
492 U.S. 229, 239 (1989). To prove continuity, it must be “shown that the predicates themselves
amount to, or that they otherwise constitute a threat of, continuing racketeering activity.” Id. at
240 (emphasis in original).
“Predicate acts extending over a few weeks or months and threatening no future criminal
conduct do not satisfy this requirement.” Id. at 242. And RICO liability “depends on whether
the threat of continuity is demonstrated.” Id. See also Edmondson & Gallagher v. Alban Towers
Tenants Ass’n, 48 F.3d 1260, 1265 (D.C. Cir. 1995) (holding that allegations of a “single
scheme” that entails “but a single discrete injury” suffered by a “small number of victims” do not
constitute a pattern of racketeering activity). Something less is not enough.
A “single scheme” that threatens “no future criminal conduct” is precisely what the
Parishioners have alleged here. Taken as true, their allegations show that the Current Leaders
wrested control of the Church and its assets away from the Board of Trustees through false
promises and representations. They did so over a roughly two-year period, with most of the
relevant events occurring in August and September of 2015. See Am. Compl. 32, 37. That
scheme ended when the Current Leaders ousted the Parishioners from the Church.
18
Contrast these allegations with an example discussed by the D.C. Circuit in Edmondson
& Gallagher. There, the court reviewed a case in which the defendants allegedly “committed
fraud by separate mailings to the tenants of over 8,000 apartments in dozens of apartment
buildings . . . over a period of 13 years.” Edmondson & Gallagher, 48 F.3d at 1265. These
mailings were designed to fraudulently induce the sale of apartment units. Id. The court noted
that, at the time of the lawsuit, “40% of the apartments remain[ed] unsold.” Id. There was thus
“reason to believe that more fraud would follow, creating an open-ended threat of continuity.”
Id. (cleaned up).
By contrast, the Parishioners here have alleged no continuing acts of wire or mail fraud.
And they identify no other reasons to believe that the specter of RICO violations remains. They
have therefore failed to plausibly allege the type of “long-term criminal conduct” that Congress
was concerned with in enacting the RICO statute. H.J. Inc., 492 U.S. at 242.
In sum, under either Rule 9(b)’s particularity standard or the familiar Rule 12(b)(6)
standard, the Parishioners’ RICO claims fail. The Court will therefore dismiss them.
B.
Having dismissed the RICO claims, the Court declines to exercise supplemental
jurisdiction over the allegations that only invoke D.C.’s laws. The Court exercised federal
question jurisdiction over the RICO claims, as it may do for claims arising under federal law.
See 28 U.S.C. § 1331. But it requires another basis for resolving claims brought under local law.
And it lacks diversity jurisdiction, because some Parishioners and Current Leaders are D.C.
residents. See, e.g., Am. Compl. 13, 28. Thus, the Court may hear only the remaining
allegations through a discretionary exercise of its supplemental jurisdiction. See 28 U.S.C. §
1367.
19
District courts “may decline to exercise supplemental jurisdiction” over a state law claim
for four reasons. Id. § 1367(c). 5 Two are relevant here. First, the Court may do so when it has
“dismissed all claims over which it has original jurisdiction.” Id. § 1367(c)(3). Second, it may
also do so if a claim “raises a novel or complex issue of State law.” Id. § 1367(c)(1).
The Parishioners agree that the RICO allegations are the only claims over which the
Court has original jurisdiction. See Pls.’ Opp. at 22 (noting that Section 1367(c)(3) would apply
if the Court “acted to dismiss all claims over which it has original jurisdiction – the RICO
claims”). Because the Court has dismissed the RICO counts, it finds that declining to exercise
jurisdiction is proper. See Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350 n.7 (1988)
(noting that “in the usual case in which all federal-law claims are eliminated before trial, the
balance of factors to be considered under the pendent jurisdiction doctrine—judicial economy,
convenience, fairness, and comity—will point toward declining to exercise jurisdiction over the
remaining state-law claims”).
The Court also finds that the Parishioners’ claims raise some “complex issue[s] of State
law.” 28 U.S.C. § 1367(c)(1). The Current Leaders suggest, for instance, that “whether a church
has a fiduciary duty to its parishioners” is an unsettled legal question in the District. Defs.’ Mot.
at 31. The Parishioners do not disagree. See Pls.’ Opp. at 22 n.4. The Court finds that the local
courts are “better equipped to resolve the unsettled legal questions in this case.” Edmondson &
Gallagher, 48 F.3d at 1266. It will therefore decline to rule on the Parishioners’ non-RICO
claims, and dismiss the Amended Complaint.
5
For the purposes of supplemental jurisdiction, the term “State” includes the District of Columbia. 28
U.S.C. § 1367(e).
20
IV.
For these reasons, the Current Leaders’ Motion to Dismiss will be granted. The
Parishioners’ First Amended Complaint will be dismissed. A separate Order accompanies this
Opinion.
2019.06.21
13:53:40 -04'00'
Dated: June 21, 2019 TREVOR N. McFADDEN, U.S.D.J.
21