On Tuesday, the Sixth Circuit revived a group of plaintiffs’ extortion and conspiracy claims under RICO related to alleged fraud in conjunction with their attempts to adopt children from Guatemala. Heinrich v. Waiting Angels Adoption Services, Inc., Case No.: 09-2470 (6th Cir. February 7, 2012)
The Sixth Circuit reversed the district court’s dismissal of the complaint, concluding that the plaintiffs had sufficiently pled four predicate acts of mail and wire fraud, including a claim of fraudulent misrepresentation about the availability of twin children, and, on three separate occasions, fraudulent inducement to pay foster care expenses for children that never required the service. To determine if the four predicate acts could qualify as a pattern of racketeering activity, the Court looked to the “relationship plus continuity” test articulated in H.J. Inc. v. Nw. Bell Tel. Co., 492 U.S. 229 (1989).
The Court found the relationship prong easily met, noting that the acts were all committed by the same participants, for similar purposes, with similar victims, using similar methods of communication (i.e. email correspondence, telephone conversations and a website) to defraud hopeful adoptive parents. Likewise, the plaintiffs had satisfied the continuity prong because there was no indication that the pattern of behavior would not have continued indefinitely into the future. Based on the satisfaction of these two prongs, the Court found the predicate acts sufficiently alleged a pattern of racketeering activity to survive dismissal at the pleading stage.
The Court also reversed the dismissal of the plaintiffs’ conspiracy claim after finding that they had adequately pled a claim under RICO and an agreement to participate in that violation.