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Wesley Health System, LLC v. Forrest County Board of Supervisors

United States District Court, S.D. Mississippi, Eastern Division

May 12, 2014



KEITH STARRETT, District Judge.

For the reasons stated below, the Court grants in part and denies in part Spruill's Motion to Strike [283] and denies Spruill's Motion for Sanctions [36, 276].

A. Motion to Strike [283]

In support of its response to Spruill's motion for sanctions, Plaintiff provided notes [281-1] from a meeting between representatives of the Southeast Trauma Care Region and Plaintiff. Plaintiff's attorney, Kathryn Gilchrist [286-1], took the notes during the meeting. Spruill argues that the Court should strike the notes as hearsay.

Hearsay is an out-of-court statement offered to prove the truth of the matter asserted therein. FED. R. CIV. P. 801(c). While the Court can not accept the notes as evidence of the matters asserted within them, it can accept the notes [281-1] and affidavit [286-1] as evidence that Plaintiff received such information from its attorney prior to filing its complaint. Therefore, the Court grants Spruill's Motion to Strike [283] insofar as the Court will not consider the notes [281-1] as evidence of the matters asserted within them, but the Court denies the motion insofar as it will consider the notes [281-1] and affidavit [286-1] as evidence that Plaintiff's attorney provided it with such information prior to the initiation of this litigation.

B. Motion for Sanctions [36, 276] - Rule 11

Rule 11 provides that when a lawyer submits a pleading to the court, he certifies that any representation made therein "is not being presented for any improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation;" that the claims "are warranted by existing law or by a non-frivolous argument for extending, modifying, or reversing existing law or for establishing new law;" and that "the factual contentions have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery." FED. R. CIV. P. 11(b).

"Rule 11 does not require that the legal theory espoused in a filing prevail." CJC Holdings, Inc. v. Wright & Lato, Inc., 989 F.2d 791, 792 (5th Cir. 1993). Rather, the Court considers "factual questions regarding the nature of the attorney's prefiling inquiry and the factual basis of the pleading or other paper." Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 399, 110 S.Ct. 2247, 110 L.Ed.2d 359 (1990). The Court also determines whether the attorneys charged with violating Rule 11 "fulfilled their duty of reasonable care into the relevant law." CJC Holdings, 989 F.2d at 792. "Even if erroneous, a legal posture does not violate Rule 11 unless it is unreasonable from the point of view both of existing law and of its possible extension, modification, or reversal." Id. "[A] trial court should not impose Rule 11 sanctions for advocacy of a plausible legal theory, particularly where... the law is arguably unclear." Id.

Plaintiff alleged [21] that Spruill committed a substantive RICO violation under 18 U.S.C. § 1962(c) and participated in a RICO conspiracy under 18 U.S.C. § 1962(d). Section 1962(d), the conspiracy provision, does not require an overt act or even an "agreement to commit or facilitate each and every part of the substantive offense." Salinas v. United States, 522 U.S. 52, 63, 118 S.Ct. 469, 139 L.Ed. 352 (1997). But Section 1962(c) requires at least two acts of "racketeering activity." Id. Accordingly, Plaintiff alleged [21] that all Defendants - including Spruill - committed the predicate acts of kidnapping and wire fraud. Spruill's motion for sanctions [36, 276] specifically focuses on these allegations. He contends that Plaintiff's claims that he committed the crimes of kidnapping and wire fraud were frivolous and without basis.

Among other arguments in response [41, 281], Plaintiff contends that its claims against Spruill were never premised on the claim that he personally committed each element of the pertinent crimes. Rather, Plaintiff claims that its allegations were based on the theory that Spruill had committed kidnapping and wire fraud by directing or causing others to commit the requisite acts.

To commit wire fraud, it is not necessary for a party to actually use wire communications. United States v. Simpson, 741 F.3d 539, 548 (5th Cir. 2014). Rather, one may commit wire fraud by causing the use of wire communications in furtherance of a scheme to defraud. Id. (citing United States v. Stalnaker, 571 F.3d 428, 436 (5th Cir. 2009)). Additionally, Mississippi has adopted the Fifth Circuit's law of aiding and abetting. See Wilson v. State, 967 So.2d 32, 39 (Miss. 2007); Milano v. State, 790 So.2d 179, 184-85 (Miss. 2001).

The guilt of a defendant in a criminal case may be established without proof that the defendant personally did every act constituting the offense alleged.... [A]nything a person can do for himself may also be accomplished by that person through the direction of another person as his or her agent....
If another person is acting under the direction of the defendant..., then the law holds the defendant responsible for the acts and conduct of such other persons just as though the defendant had committed the acts or engaged in such conduct.

Milano, 790 So.2d at 185 (quoting FIFTH CIRCUIT PATTERN JURY INSTRUCTIONS (CRIMINAL) 2.06 (1998)). Accordingly, in Mississippi a defendant may commit kidnapping where he directs an agent to commit the acts required by the statute. Cf. Wilson, 967 So.2d at 38 (defendant was guilty of shoplifting where she did not ...

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