Conclusory Allegations Are Insufficient To Support A Conspiracy Claim

COONEY v. ROSSITER (September 30, 2009)

Deborah Cooney and her husband were divorced in 1998. The court granted her custody of their two sons. Her ex-husband later petitioned for a transfer of custody. The court appointed a lawyer to act as the children's representative. Cooney alleges that the representative arranged to have a psychiatrist appointed and then suggested to the psychiatrist that she suffered a particular mental illness. The psychiatrist's report did conclude that she suffered from the mental illness. Cooney alleges that her ex-husband received a copy of that report but that she did not. Based on the report, the court granted temporary custody to the ex-husband. She brought suit against the judge, the representative, the psychiatrist, the children's therapist and the ex-husband's lawyer. The court dismissed her complaint. Cooney appeals.

In their opinion, Judges Bauer, Posner and Wood affirmed. The Court first found the state court judge absolutely immune since he was acting in his judicial capacity. Next, the Court found that the psychiatrist and representative were also entitled to absolute immunity, since the acts complained of all occurred within their official duties. Finally, the Court concluded that the factual allegations against the two private persons failed to meet federal pleading standards. Although citing Bell Atlantic and Iqbal and the heightened pleading standard established therein, the Court found that Cooney's allegations were too vague to meet even the pre-existing heightened pleading requirement for conspiracy allegations.

RICO Statute Of Limitatins Begins To Run When Plaintiff Discovers, Or Should Have Discovered, That He Has Been Injured

THE CANCER FOUNDATION v. CERBERUS CAPITAL MANAGEMENT (March 19, 2009)

In the late 1990s, Martin Lapides and his corporate empire were suffering. He obtained a $23 million line of credit from the Gordon Brothers Group and others. Soon after, Gordon Brothers, working with Lapides' chief financial officer, began to wrest control of one of the corporations away from Lapides. Once Gordon Brothers and the others obtained control of the corporation, they placed it in bankruptcy. The bankruptcy triggered a whole host of financial troubles for Lapides. One of the victims of these troubles was the Cancer Foundation, when one of Lapides’ companies was unable to fulfill an $80 million pledge. Several individual investors in Lapides’ corporations filed suit and obtained a $7 million judgment against Lapides personally. The Cancer Foundation, Lapides and others who suffered harm from the conduct of Gordon Brothers filed suit in 2007 under the Racketeer Influenced and Corrupt Organization Act (RICO). The district court dismissed the complaint on the grounds that it was barred by the statute of limitations. Plaintiffs appeal.

In their opinion, Judges Ripple, Manion and Evans affirmed. The Court noted the "generous" four year statute of limitations for a RICO cause of action runs from the time when a plaintiff discovers the harm. A plaintiff does not have to know that the harm is actionable to begin the limitations period. The Court agreed with the district court in holding that the complaint was barred. The conduct complained of was complete an entire decade before the suit began. The Court rejected plaintiff’s argument that the statute did not begin to run until an article in Forbes alerted them to the alleged conspiracy. The plaintiffs were clearly aware of their injury, even if they were not aware of all of its particular elements, well outside of the limitations period.