Holy Bible Missionary Baptist Church, Johnathan Johnson, and Deronda Powell, on behalf of themselves and those similarly situated v. City of Harvey, Christopher Clark, Richard Seput, and Corean Davis

Summary

The United States District Court for the Northern District of Illinois granted the defendants’ Rule 12(b)(6) motion to dismiss claims arising from alleged overbilling for municipal water services. The court held that the complaint failed to plausibly plead RICO racketeering activity, individual defendants’ involvement, predicate mail or wire fraud acts, or an association-in-fact enterprise. The state-law claims were dismissed without prejudice, and plaintiffs were granted leave to amend by March 27, 2026, subject to stated limitations.

Holdings

1. The complaint did not plausibly allege racketeering activity because allegations that Harvey's water bills were inaccurate or excessive did not support an inference of a fraudulent scheme rather than negligence, incompetence, or mistake.
2. The complaint failed to plead the alleged mail- and wire-fraud predicate acts with the particularity required by Rule 9(b) because it did not identify any mailing or wiring with sufficient detail regarding time, place, content, or participants.
3. The complaint failed to plausibly allege that Clark, Seput, or Davis personally participated in the alleged RICO conduct.
4. The complaint did not plausibly allege an association-in-fact RICO enterprise because it did not plead the required purpose, relationships among the associates, or longevity sufficient to pursue the enterprise's purpose.
5. Plaintiffs were not permitted to replead a RICO claim against the City of Harvey because the weight of authority holds that municipalities are not proper RICO defendants, and plaintiffs themselves asserted that the City was not the wrongdoer.
6. The court dismissed the state-law claims without prejudice after dismissing the only claim supporting federal subject-matter jurisdiction.

Questions Presented

1. Whether the complaint plausibly alleged a RICO claim under 18 U.S.C. § 1962(c).
2. Whether the alleged RICO predicate acts of mail fraud, wire fraud, or state-law theft were pleaded with the specificity required by Federal Rule of Civil Procedure 9(b).
3. Whether the complaint plausibly alleged the individual defendants' participation in the alleged RICO scheme.
4. Whether the complaint plausibly alleged an association-in-fact RICO enterprise.
5. Whether the City of Harvey could be repleaded as a RICO defendant.
6. Whether the court should retain supplemental jurisdiction over the state-law claims after dismissing the federal claim.

Disposition

dismissed