Está en la página 1de 48

Case 1:15-cv-02865-KBF Document 27 Filed 06/05/15 Page 1 of 48

UNITED STATES DISTRICT COURT


SOUTHERN DISTRICT OF NEW YORK
_________________________________________
:
:
:
:
Plaintiffs,
:
:
v.
:
:
SHALOM LAMM, et al.,
:
:
Defendants.
:
:
_________________________________________ :
TOWN OF MAMAKATING and
VILLAGE OF BLOOMINGBURG,

No. 1:15-cv-02865-KBF

MEMORANDUM OF LAW IN SUPPORT OF MOTION TO DISMISS OF


DEFENDANTS SHALOM LAMM, KENNETH NAKDIMEN, SULLIVAN FARMS II,
INC., RAYMOND FARMS, LLC, AND BLOOMINGBURG RENTALS, LLC

DECHERT LLP
1095 Avenue of the Americas
New York, New York 10036
(212) 698-3500
(212) 698-3599 (facsimile)
Attorneys for Defendants Shalom Lamm,
Kenneth Nakdimen, Sullivan Farms II, Inc.,
Raymond Farms, LLC, and Bloomingburg
Rentals, LLC

Case 1:15-cv-02865-KBF Document 27 Filed 06/05/15 Page 2 of 48


TABLE OF CONTENTS
Page
TABLE OF AUTHORITIES ........................................................................................................ iii
PRELIMINARY STATEMENT ................................................................................................... 1
STATEMENT OF FACTS ............................................................................................................ 3
A.

Sullivan Farms Acquires Property to Build Chestnut Ridge ................................. 4

B.

The Phony Bribery Allegations ............................................................................. 5

C.

The Village Board of Trustees and the Village Planning Board


Repeatedly and Publicly Approve the 396-Unit Project ........................................ 7

D.

The RCC Emerges To Oppose the Chestnut Ridge Project ................................. 10

E.

The Voter Fraud in the 2014 and 2015 Village Elections ................................ 11
1.

The March 2014 Election......................................................................... 11

2.

The September 2014 Election .................................................................. 12

3.

The March 2015 Election......................................................................... 12

ARGUMENT ............................................................................................................................... 13
I.

THE COURT REVIEWS RICO CLAIMS WITH SKEPTICISM .................................. 13

II.

THE RICO CLAIMS (CLAIMS TWO THROUGH FIVE) SHOULD BE


DISMISSED .................................................................................................................... 14
A.

B.

Plaintiffs RICO Claims Are Time-Barred .......................................................... 14


1.

Plaintiffs Had Actual Notice of Their RICO Injury Since at Least


2009.......................................................................................................... 15

2.

Plaintiffs Were Also On Inquiry Notice .................................................. 16

3.

Plaintiffs Injuries From More Recent Actions Are Also Untimely ........ 18

Plaintiffs Do Not State Any Cognizable RICO Claims ....................................... 19


1.

Plaintiffs Voter Fraud Allegations ...................................................... 19

2.

Plaintiffs Mail and Wire Fraud Allegations Against Ms. Berentsen ...... 22

3.

Plaintiffs Wire Fraud Allegations Against Mr. Roe ............................... 24

4.

Plaintiffs Bribery Allegations ................................................................. 27

C.

Plaintiffs Fail to Allege a Pattern of Racketeering Through Continuity ............. 29

D.

Plaintiffs Fail To Allege a RICO Conspiracy (Claims Three and Five) .............. 32

III.

PLAINTIFFS CLAIMS ARE PRECLUDED BY RES JUDICATA ............................. 32

IV.

PLAINTIFFS STATE LAW CLAIMS SHOULD BE DISMISSED ............................. 34


A.

The Court Should Decline Supplemental Jurisdiction ......................................... 34

B.

Plaintiffs Do Not State a Declaratory Judgment Claim (Claim One) .................. 35


-i-

Case 1:15-cv-02865-KBF Document 27 Filed 06/05/15 Page 3 of 48


TABLE OF CONTENTS
(continued)
Page
C.

Plaintiffs May Not Void the Development Agreement (Claim Six).................... 36

D.

Plaintiffs Do Not State a Claim for Injunctive Relief (Claim Seven) .............. 38

E.

Plaintiffs Do Not State a Claim for Fraud (Claim Eight) .................................... 38

CONCLUSION ............................................................................................................................ 39

-ii-

Case 1:15-cv-02865-KBF Document 27 Filed 06/05/15 Page 4 of 48

TABLE OF AUTHORITIES
CASES

PAGE

7 West 57th Street Realty Co. LLC v. Citigroup, Inc.,


No. 13 Civ. 981, 2015 WL 1514539 (S.D.N.Y. Mar. 31, 2015) .......................................33, 34
Agency Holding Corp. v. Malley-Duff & Assoc.,
483 U.S. 143 (1987) .................................................................................................................14
Amsterdam Tobacco Inc. v. Philip Morris Inc.,
107 F. Supp. 2d 210 (S.D.N.Y. 2000)......................................................................................13
Anza v. Ideal Steel Supply Corp.,
547 U.S. 451 (2006) .................................................................................................................19
Aronov v. Mersini,
No. 14-cv-7998 (PKC), 2015 WL 1780164 (S.D.N.Y. Apr. 20, 2015) ........................... passim
Ashcroft v. Iqbal,
556 U.S. 662 (2009) ...........................................................................................................30, 32
Baiul v. William Morris Agency,
No. 13 Civ. 8683, 2014 WL 1804526 (S.D.N.Y. May 6, 2014) ..............................................15
Bankers Trust, Co. v. Rhoades,
859 F.2d 1096 (2d Cir. 1988)...................................................................................................26
Bell Atlantic Corp. v. Twombly,
550 U.S. 544 (2007) ...........................................................................................................14, 32
Boniel v. U.S. Bank N.A.,
No. 12-cv-3809, 2013 WL 458298 (E.D.N.Y. Feb. 6, 2013) ..................................................38
Bldg. Indus. Fund v. Local Union No. 3, Intl Bhd. of Elec. Workers, AFL-CIO,
992 F. Supp. 162 (E.D.N.Y. 1996) ..........................................................................................29
Buckeye Check Cashing, Inc. v. Cardegna,
546 U.S. 440 (2006) ................................................................................................................37
Carnegie-Mellon Univ. v. Cohill,
484 U.S. 343 (1988) .................................................................................................................37
Chiste v. Hotels.com L.P.,
756 F. Supp. 2d 382 (S.D.N.Y. 2010)......................................................................................38
City of N.Y. v. JAM Consultants, Inc.,
889 F. Supp. 103 (S.D.N.Y. 1995) ..............................................................................20, 24, 28
-iii-

Case 1:15-cv-02865-KBF Document 27 Filed 06/05/15 Page 5 of 48


TABLE OF AUTHORITIES
(continued)

Cofacredit, S.A. v. Windsor Plumbing Supply Co.,


187 F.3d 229 (2d Cir. 1999).........................................................................................29, 30, 32
Cohen v. Koenig,
25 F.3d 1168 (2d Cir.1994)......................................................................................................24
Commercial Union Assur. Co. PLC v. Milken,
17 F.3d 608 (2d Cir.1994)........................................................................................................26
Cougar Audio, Inc. v. Reich,
No. 99 Civ. 4498, 2000 WL 420546 (S.D.N.Y. Apr. 18, 2000) ..................................20, 21, 28
Cruz v. FXDirectDealer, LLC,
720 F.3d 115 (2d Cir. 2013).....................................................................................................30
D. Penguin Bros. Ltd. v. City Natl Bank,
587 F. Appx. 663 (2d Cir. 2014) ........................................................................................29, 30
DeFalco v. Bernas,
244 F.3d 286 (2d Cir. 2001).....................................................................................................29
Elsevier, Inc. v. WHPR, Inc.,
692 F. Supp. 2d 297 (S.D.N.Y. 2010)......................................................................................26
First Capital Asset Mgmt., Inc. v. Satinwood, Inc.,
385 F.3d 159 (2d Cir. 2004)...............................................................................................29, 31
First Nationwide Bank v. Gelt Funding Corp.,
27 F.3d 763 (2d Cir. 1994) ......................................................................................................20
Frankel v. Cole,
313 F. Appx 418 (2d Cir. 2009) .............................................................................................15
Fuji Photo Film U.S.A., Inc. v. McNulty,
640 F. Supp. 2d 300 (S.D.N.Y. 2009)......................................................................................32
Galef v. Alexander,
615 F.2d 51 (2d Cir. 1980).......................................................................................................37
Ganino v. Citizens Utilities Co.,
228 F.3d 154 (2d Cir. 2000).......................................................................................................8
GICC Capital Corp. v. Tech. Fin. Grp., Inc.,
67 F.3d 463 (2d Cir. 1995).......................................................................................................31

-iv-

Case 1:15-cv-02865-KBF Document 27 Filed 06/05/15 Page 6 of 48


TABLE OF AUTHORITIES
(continued)

Gross v. Waywell,
628 F. Supp. 2d 475 (S.D.N.Y. 2009)......................................................................................23
H.J. Inc. v. N.W. Bell Tel. Co.,
492 U.S. 229 (1989) .................................................................................................................29
Hecht v. Commerce Clearing House, Inc.,
897 F.2d 21 (2d Cir. 1990)...........................................................................................18, 26, 28
In re Merrill Lynch Ltd. Pships Litig.,
154 F.3d 56 (2d Cir. 1998)...........................................................................................14, 15, 18
Intl Bhd. of Teamsters v. Carey,
297 F. Supp. 2d 706 (S.D.N.Y. 2004)................................................................................13, 31
Isaak v. Trumbull Sav. & Loan Co.,
169 F.3d 390 (6th Cir. 1999) ...................................................................................................16
John Wiley & Sons, Inc. v. Visuals Unlimited, Inc.,
No. 11-CV-5453, 2011 WL 5245192 (S.D.N.Y. Nov. 2, 2011) ..............................................35
Kalodukas v. Berentsen,
No. 517973 (N.Y. App. Div. 3d Dept) ....................................................................................6
Kimm v. Chang Hoon Lee & Champ, Inc.,
196 F. Appx 14 (2d Cir. 2006) .........................................................................................20, 26
Kramer v. Time Warner Inc.,
937 F.2d 767 (2d Cir. 1991).......................................................................................................8
Long Island Lighting Co. v. Imo Indus. Inc.,
6 F.3d 876 (2d Cir. 1993).........................................................................................................18
Mahmood v. Research in Motion Ltd.,
905 F. Supp. 2d 498 (S.D.N.Y. 2012) (Forrest, J.) ..................................................................33
Makowski v. United Bhd. of Carpenters and Joiners of Amer.,
No. 08 civ. 6150, 2010 WL 3026510 (S.D.N.Y. Aug. 2, 2010) ..............................................20
Mareno v. Dime Sav. Bank of N.Y.,
421 F. Supp. 2d 722 (S.D.N.Y. 2006)......................................................................................35
Matsumura v. Benihana Natl Corp.,
542 F. Supp. 2d 245 (S.D.N.Y.2008).......................................................................................24

-v-

Case 1:15-cv-02865-KBF Document 27 Filed 06/05/15 Page 7 of 48


TABLE OF AUTHORITIES
(continued)

McGee v. State Farm Mut. Auto. Ins. Co,


No. 08-cv-392, 2009 WL 2132439 (E.D.N.Y. July 10, 2009).................................................34
Menowitz v. Brown,
991 F.2d 36 (2d Cir. 1993).......................................................................................................16
Miller v. Wells Fargo Bank, N.A.,
994 F. Supp. 2d 542 (S.D.N.Y. 2014)......................................................................................38
Mills v. Everest Reinsurance. Co.,
410 F. Supp. 2d 243 (S.D.N.Y. 2006)......................................................................................37
Mills v. Polar Molecular Corp.,
12 F.3d 1170 (2d Cir.1993)......................................................................................................23
Monahan v. N.Y. City Dept of Corr.,
214 F.3d 275 (2d Cir. 2000).....................................................................................................33
Natl Grp. for Commcns & Computers Ltd. v. Lucent Technologies Inc.,
420 F. Supp. 2d 253 (S.D.N.Y. 2006)......................................................................................19
N.E. Mut. Life Ins. Co. v. Caruso,
73 N.Y.2d 74 (1989) ................................................................................................................37
Nightingale Grp., LLC v. CW Capital Mgmt., LLC,
No. 11 Civ. 9293, 2012 WL 2674539 (S.D.N.Y. July 5, 2012) ..............................................21
Novak v. Kasaks,
216 F.3d 300 (2d Cir. 2000)...............................................................................................21, 23
OCallaghan v. N.Y. Stock Exchange,
No. 12 Civ. 7247, 2013 WL 3984887 (S.D.N.Y. Aug. 2, 2013), affd, 563 F. Appx.
11 (2d Cir. 2014), cert denied, 135 S. Ct. 216 (2014) ............................................................33
Pharr v. Evergreen Gardens, Inc.,
No. 03 CIV. 5520, 2004 WL 42262 (S.D.N.Y. Jan. 7, 2004), affd sub nom. Pharr v.
Evergreen Garden, Inc., 123 F. Appx 420 (2d Cir. 2005) .....................................................18
Rural Cmty. Coal. v. Vill. of Bloomingburg,
127 A.D.3d 1304 (3d Dept Apr. 2, 2015) ...............................................................................14
Rural Cmty. Coal. v. Vill. of Bloomingburg,
No. 0212-2014 (Jan. 24, 2014) ................................................................................................33
Rural Cmty. Coal. v. Vill. of Bloomingburg,
No. 2888-12 (Sup. Ct., Sullivan Cnty.) .............................................................................17, 18
-vi-

Case 1:15-cv-02865-KBF Document 27 Filed 06/05/15 Page 8 of 48


TABLE OF AUTHORITIES
(continued)

Salinger v. Projectavision, Inc.,


934 F. Supp. 1402 (S.D.N.Y. 1996).........................................................................................16
SEC v. Czarnik,
No. 10 Civ. 745, 2010 WL 4860678 (S.D.N.Y. Nov. 29, 2010) ...............................................8
Segal v. Gordon,
467 F.2d 602 (2d Cir.1972)......................................................................................................25
Spool v. World Child Intern. Adoption Agency,
520 F.3d 178 (2d. Cir. 2008)....................................................................................................13
Tafflin v. Levitt,
493 U.S. 455 (2000) .................................................................................................................34
Takeuchi v. Sakhai,
227 F. Appx 106 (2d Cir. 2007) .............................................................................................16
Thompson v. Metro. Life Ins. Co.,
149 F. Supp. 2d 38 (S.D.N.Y. 2001)........................................................................................16
Town of West Hartford v. Operation Rescue,
915 F.2d 92 (2d Cir. 1990).................................................................................................20, 26
Tr. of Plumbers and Pipefitters Natl Pension Fund v. Transworld Mech., Inc.,
886 F. Supp. 1134 (S.D.N.Y 1995)..........................................................................................26
United States v. Alfisi,
308 F.3d 144 (2d Cir. 2002).....................................................................................................27
United States v. Ganim,
510 F.3d 134 (2d Cir. 2007).....................................................................................................27
United States v. Kincaid-Chauncey,
556 F.3d 923 (9th Cir. 2009) ...................................................................................................28
United States v. Thai,
29 F.3d 785 (2d Cir. 1994).......................................................................................................29
Velez v. City of NY.,
730 F.3d 128 (2d Cir. 2013).....................................................................................................23
W. 79th St. Corp. v. Congregation Kahl Minchas Chinuch,
No. 03 Civ. 8606, 2004 WL 2187069 (S.D.N.Y. 2004) ..........................................................13

-vii-

Case 1:15-cv-02865-KBF Document 27 Filed 06/05/15 Page 9 of 48


TABLE OF AUTHORITIES
(continued)

World Wrestling Entertainment, Inc. v. Jakks Pacific, Inc.


328 F. Appx 695 (2d Cir. 2009) .......................................................................................15, 16
World Wrestling Entertainment, Inc. v. Jakks Pacific, Inc.
530 F. Supp. 2d 486 (S.D.N.Y 2007)...........................................................................20, 24, 31
STATUTES
18 U.S.C. 1346 ............................................................................................................................27
18 U.S.C. 1961 ............................................................................................................................19
18 U.S.C. 1962 ................................................................................................................19, 20, 32
N.Y. Penal Code 200.00 .............................................................................................................27
N.Y. Vill. Law 4-400 ..............................................................................................................7, 28
OTHER AUTHORITIES
FED. R. CIV. P. 8 ..................................................................................................................... passim
FED. R. CIV. P. 9 ..................................................................................................................... passim
FED. R. CIV. P. 12 ................................................................................................................... passim
Jane Anderson, Questioning a Developments Religion: Possible Hasidic Presence
Raises Bloomingburg Residents Ire, SHAWANGUNK JOURNAL, May 24, 2012,
http://www.gunkjournal.com/ 2012/05/24/news/1205243.html ..............................................10

-viii-

Case 1:15-cv-02865-KBF Document 27 Filed 06/05/15 Page 10 of 48

Shalom Lamm, Kenneth Nakdimen, Sullivan Farms II, Inc., Raymond Farms, LLC, and
Bloomingburg Rentals, LLC (collectively, Sullivan Farms or Defendants) respectfully
submit this memorandum of law in support of their motion to dismiss the Complaint.1
PRELIMINARY STATEMENT
Mamakating Supervisor Bill Herrmann and Bloomingburg Mayor Frank Gerardi have
chosen to waste scarce municipal resources by pursuing the same conspiracy theories that were
previously peddled by the Rural Community Coalition (RCC) and rejected by the state courts.
The Complaint is filled with invective, hyperbole, and defamatory accusations against the
Sullivan Farms Defendants, Bloomingburgs Hasidic Jewish citizens (labeled John Does #1250), and the prior elected officials of Bloomingburg and Mamakating, whom Mr. Herrmann
and Mr. Gerardi accuse of consisting uniformly of knaves or fools.
The Complaint does not stop with maligning former officials. Remarkably,
Bloomingburg accuses one of its own sitting trustees, Aaron Rabiner, of being one of defendant
Lamms minions. Compl. 470(m). The Complaint offers no factual allegations to question
Mr. Rabiners integrity, but he is a Hasidic Jew, which evidently is a sufficient accusation in the
eyes of the current leaders of Mamakating and Bloomingburg.
Evaluated as an act of public policy, the Complaint would appear to be a public relations
stunt that reveals the biases and lowers the dignity of these municipal officers. Evaluated as a
matter of law, it constitutes an issue-spotting exercise in how not to file a federal complaint.
Stripped of the rhetoric and its unsupported legal assertions, which are invariably hedged as
being made on information and belief, the Complaint alleges few particular actions by
Defendants, and none that would state a claim. The RICO allegations are patently time-barred
1

The Sullivan Farms Defendants include all defendants except Duane Roe and Mark Berentsen.

Case 1:15-cv-02865-KBF Document 27 Filed 06/05/15 Page 11 of 48

because the Complaint alleges RICO injuries known to Plaintiffs long before the four-year
statute of limitations. But the allegations do not state any claims at all. They challenge actions
that Plaintiffs approved, that do not allege a RICO injury, that are not unlawful, and that are
otherwise not well pled. The remaining state law claims have previously been rejected by the
state courts and are not susceptible to resolution here.
Back in 2006, Sullivan Farms saw the chance to turn empty land in the Catskills into a
vibrant, townhome community and agreed to replace Bloomingburgs failing wastewater
treatment plant in return. Mamakating and Bloomingburg worked with Defendants until 2012,
when (as reported by the local papers), rumors first emerged of Hasidic migration. While
Plaintiffs claim that only deception and bribery could explain the prior six years of approvals,
even taking their non-conclusory allegations as true, they allege only that three officials labored
under conflicts of interests and offer no plausible explanation for why a dozen others provided
the approvals necessary for the project.
Plaintiffs claim that Sullivan Farms original sin was an oral promise, made in the
spring of 2006, to build a 125-unit project with a golf course, but they cannot cite a single
document referencing such parameters. To the contrary, the Complaint is replete with citations
to public approvals, beginning in 2009, in which the Village endorsed the 396-unit planned
development. If Plaintiffs were duped into granting initial approvals by Defendants, they
discovered the fraud by then, and the action is patently time-barred. More fundamentally,
Plaintiffs fail to explain how or when it became a federal crime to build, with the Villages
approval, a 396-unit residential project without a golf course.
In addition, the Complaint should be dismissed for numerous other reasons, including:

The voter fraud allegations neither involve Sullivan Farms nor state an injury to
business or property under civil RICO.
2

Case 1:15-cv-02865-KBF Document 27 Filed 06/05/15 Page 12 of 48

The wire and mail fraud allegations do not identify any concrete loss or false statements,
and otherwise flunk the requirements of Federal Rule of Civil Procedure 9(b).

The bribery allegations do not identify any quid pro quo or concrete loss, and cannot
show proximate causation, since the challenged actions were all approved by a majority
of unchallenged officers.

Plaintiffs fail to allege the other elements of a RICO claim, offering no allegations of a
continuing racketeering enterprise or a RICO conspiracy.

Res judicata bars this action because the state courts previously adjudicated the state law
claims, and the RICO claims arise out of the same events.

The challenge to the Development Agreement is barred by an arbitration clause and does
not allege any state law grounds for rescission.

The fraud claim is time-barred and insufficient under Rule 9(b).

The Complaint is frivolous and should be dismissed with prejudice.


STATEMENT OF FACTS
The Complaint alleges a long term five phase plan to dupe Mamakating and
Bloomingburg over a 12-year period. Compl. 22-35. This scheme has been and is openended and continuous, and it remains in operation to this day. Id. 35, 469. Defendants first
organized this alleged enterprise in 2003 or 2004, id. 56, and first injured Plaintiffs in 2006,
when the municipalities approved the annexation of the Chestnut Ridge property based upon the
material misrepresentations that it would consist of a 125 unit gated luxury second home
community, with a golf course and a swimming pool, id. 28.
Plaintiffs first discovered this RICO injury when they learned that Sullivan Farms true
objective was to build a 396-unit high density cluster housing project. Id. 30. The problem
for Plaintiffs is that this truth was unquestionably revealed, at the latest, in January 2009, when
the Village publicly considered and approved the plans for a 396-unit development. See, e.g., id.
152 (in January 2009, Sullivan Farms filed a site plan with the Village Planning Board, which
called for the creation of 396 high density residential units and infrastructure); id. 170-71
3

Case 1:15-cv-02865-KBF Document 27 Filed 06/05/15 Page 13 of 48

(on March 12, 2009, the Village accepted the Draft Environmental Impact Statement (DEIS),
which called for 396 units of housing). Despite Plaintiffs needing 158 pages to describe their
fabricated conspiracy, these few factual allegations are all that is required for dismissal.
A.

Sullivan Farms Acquires Property to Build Chestnut Ridge

For many years, Mr. Lamm and Mr. Nakdimen have been working to develop land in
Sullivan County. Id. 48-49, 56-60. In Phase I of the conspiracy, they acquired the Chestnut
Ridge property by working with Duane Roe, a local developer, who had an extremely high level
of acceptance in the community. Id. 27, 56, 59-61. Mr. Roe, who was the sole shareholder
in Sullivan Farms, acquired the land and contracted with Raymond Farms. Id. 62-63. The
Complaint does not allege that a developers effort to purchase property quietly and with local
partners is either uncommon or unlawful. Although Plaintiffs malign Mr. Roe as a secret front
man and a shill, id. 70, such invective does not actually state any claim.
After Sullivan Farms purchased the land, Defendants began the lengthy process of
seeking approval to develop the Chestnut Ridge project. The Village would first annex 198 acres
of land from the Town; the Village would shepherd the project through environmental reviews;
the Village Planning Board would review and approve the site plan and the subdivision plan; and
the Village Board of Trustees would enter into a Development Agreement pursuant to which
Sullivan Farms agreed to build a new wastewater treatment plant. The Complaint refers to these
events as Phase II and Phase III of the conspiracy. Id. 28-30.
The Complaint alleges that at a public meeting on May 4, 2006, Mr. Roe informed the
Village of his proposal to build a 125 unit luxury townhouse second home community with a
golf course and swimming complex which would be available to the general public. Id. 86.
The oldest plans submitted to the Village, which are a matter of public record, were dated Spring
2006; they contain a golf course and over 400 townhouse units. See Affirmation of Steven A.
4

Case 1:15-cv-02865-KBF Document 27 Filed 06/05/15 Page 14 of 48

Engel, Esq. (Engel Aff.) Ex. A.2 While it is not clear that Plaintiffs have a good faith basis for
these allegations, for purposes of the motion to dismiss, Defendants assume that Mr. Roe
proposed a 125-unit community. Even if he did, Plaintiffs do not allege that anyone committed
in writing to such a proposal or that any resolution ever required such limitations. No matter
what Mr. Roe proposed, the Towns transfer of land to the Village did not give Sullivan Farms
the right to build any particular project, be it 125 units or 396 units. Rather, the November 2006
annexation started the lengthy process pursuant to which Sullivan Farms sought the necessary
approvals, and the Village decided what project was suitable and appropriate under its land use
regulations. See id. 29, 113-14.
B.

The Phony Bribery Allegations

The Complaint alleges on information and belief that Defendants corrupted


Bloomingburgs two prior Mayors by purchasing land in which their families had an interest.
Since Defendants have purchased significant amounts of land in Bloomingburg, it is not
surprising that Plaintiffs can identify land bought from Village citizens. In both instances, the
land transactions occurred well after the Mayors had acted to support Chestnut Ridgein one
case, four years after the Mayor left office. In neither case is there any allegation that the Mayor
agreed to perform any act for Defendants. Rather, it is simply alleged that everything each
Mayor did to advance the Chestnut Ridge project was done with a corrupt motive.
The Complaint alleges that Defendants corrupted Mayor Saunders by purchasing two
properties for far more than their actual market value. Id. 116-20. Notably, the Complaint

As the former Village Engineer confirmed during his deposition in the Bloomingburg Jewish
Education Center action, the golf course was dropped and the layout of the townhomes changed
because of existing wetlands regulations. See also Compl. 238. This fact, however, is
irrelevant to the motion to dismiss, since as discussed infra pp. 7-10, the Village itself confirmed
and approved the final plans well before the four-year limitations period.
5

Case 1:15-cv-02865-KBF Document 27 Filed 06/05/15 Page 15 of 48

does not allege that Mayor Saunders received this bribe while in office. In fact, the land was
purchased in 2012, six years after the annexation and four years after he left office. Plaintiffs
offer no other allegations supporting the bribe: they do not identify any official acts that Mayor
Saunders performed in return or plausibly explain why a bribe was necessary at a time when Mr.
Roe was the Villages golden boy, and Chestnut Ridge was widely supported. Id. 121.
The Complaint is no more coherent when it comes to Sullivan Farms efforts to corrupt
the next Mayor. On information and belief, Mayor Berentsen agreed prior to his election, that
if he became Mayor, in exchange for things of value, he would allow his office to become
corrupted. Id. 130. No allegations support such a belief. During the new Mayors first year
in office, from April 2008 to March 2009, he allegedly acted corruptly, even though he had not
received anything. See id. 133-156. In November 2008, Sullivan Farms sought to solidify
their influence over him. Id. 158. The Complaint then neglects to say what Defendants did in
November 2008 or why Plaintiffs have selected that month as an important date.3
Without missing a beat, the Complaint jumps to March 5, 2009, when Defendants
approached Mayor Berentsen, evidently for the third time, and finally offered him something
of value. Id. 159. Plaintiffs identify the bribe as Sullivan Farms agreement to swap land
with Mayor Berentsens father, Morris. Id. 160. Plaintiffs admit that Sullivan Farms had a
legitimate need for the Berentsen land, because Morris owned logistically important property
for the Chestnut Ridge project. Id. These real estate transactions allegedly closed on March 5,
2009, the very same day that Mayor Berentsen was approached. How Plaintiffs know that

The RCC previously raised these allegations in a prior action to remove Mayor Berentsen
under Public Officers Law 36. See Kalodukas v. Berentsen, No. 517973 (N.Y. App. Div. 3d
Dept). That proceeding was dismissed as moot after Mr. Berentsen was not re-elected.
6

Case 1:15-cv-02865-KBF Document 27 Filed 06/05/15 Page 16 of 48

Sullivan Farms approached him on that date, and how Sullivan Farms managed to close
multiple land deals on that very same day, are left entirely to conjecture.
The Complaint calls the land swap a quid pro quo bribery reward, id. 163, but does
not identify the quid or the quo. The Complaint asserts, on information and belief, that the
sold land was at above-market rates, that the purchased land was at substantially reduced
prices, and that Mayor Berentsen received some undefined portion for himself. Id. 162. The
Complaint asserts on information and belief that the acquired properties have appreciated to $1
million (because of the sewer improvements provided by Sullivan Farms), but does not identify
the current value of the sold properties. Id. 168. The Complaint does not identify what Mayor
Berentsen promised to do in return. Instead, the Complaint summarily asserts that everything he
and his wife did from one year before the bribe until five years after was done corruptly.
The Complaints bribery allegations are further hampered by the fact that the Mayor had
little power to act by himself. Bloomingburg acts through a three-person board of trustees,
including the Mayor, see N.Y. Vill. Law 4-400, and the Complaint contains no allegations that
the other two trustees were ever corrupted. In addition, the five-person Village Planning Board
exercises jurisdiction separate from the Village Board. See id. The Complaint does not allege
that anyone ever corrupted the Village Planning Board.
C.

The Village Board of Trustees and the Village Planning Board


Repeatedly and Publicly Approve the 396-Unit Project

Before Sullivan Farms could build Chestnut Ridge, it was required to obtain the approval
of the Village Board of Trustees in New Yorks State Environmental Quality Review Act
(SEQRA) process, as well as approvals from the Village Planning Board. This process, which
started in at least January 2009, consisted of over two dozen public meetings, many of which are
cited in the Complaint. Compl. 152, 154, 176, 191-92. Indeed, as admitted in the Complaint,
7

Case 1:15-cv-02865-KBF Document 27 Filed 06/05/15 Page 17 of 48

on January 8, 2009, the subdivision and site plan was filed with the Village Planning Board
and called for the creation of 396 high density residential units. Id. 152.
In February 2009, the Village Board of Trustees approved a DEIS reciting that Chestnut
Ridge would have 396 units. Id. 154; see DEIS at p. III.K-6, Engel Aff. Ex. B. The DEIS was
circulated widely throughout the State. The Village received comments from the State
Department of Transportation, the Sullivan County Division of Planning and Environmental
Management, the State Department of Environmental Conservation (NYSDEC), and the
Office of Parks, Recreation and Historic Preservation. See Final Environmental Impact Study
(FEIS) at 57-66, Engel Aff. Ex. C.4 In June 2009, the Village Board of Trustees approved the
FEIS, which noted that there would be 396 units and omitted the golf course. Compl. 192;
Engel Aff. Ex. C at i-1. The Village Board of Trustees adopted the SEQRA findings on July 9,
2009. See July 9, 2009 Resolution of the Village Board of Trustees, Engel Aff. Ex. M.
Consistent with New York law, both the Village Trustees and the Village Planning Board
approved these documents at public meetings. These documents were likewise publicly
accessible through Environmental Notice Bulletins published by the NYSDEC. Compl. 176.
Were that not enough, Sullivan Farms cause[d] the DEIS to be published in a website online.
Id. 176, 181 (emphasis added). Plaintiffs thus were unquestionably on notice that Chestnut
Ridge would consist of 396 units since early 2009, and the Village provided the public approvals
4

The Court may consider the DEIS and the FEIS on the motion to dismiss because the
Complaint incorporates them by reference. See Compl. 132, 154-55, 170-83, 191-92, 203,
229. The Court also may take notice of the fact of those documents, as well as the Village
resolutions and minutes, because they are public records not subject to reasonable dispute. See,
e.g., Ganino v. Citizens Util. Co., 228 F.3d 154, 166 n.8 (2d Cir. 2000); Kramer v. Time Warner
Inc., 937 F.2d 767, 773-74 (2d Cir. 1991) (court may consider extrinsic facts that are capable of
accurate and ready determination by resort to sources whose accuracy cannot reasonably be
questioned, all of which may properly be considered on a motion to dismiss); SEC v. Czarnik,
No. 10 Civ. 745, 2010 WL 4860678, at *3 (S.D.N.Y. Nov. 29, 2010).
8

Case 1:15-cv-02865-KBF Document 27 Filed 06/05/15 Page 18 of 48

for the development. At an April 22, 2010 public hearing, the Village Planning Board discussed
the Chestnut Ridge project. See April 22, 2010 Minutes of the Village Planning Board, Engel
Aff. Ex. D. According to the minutes, one member of the Planning Board publicly expressed
concern[] that the project was not going to be a golf community and this would mean children
and what was the draw. Engel Aff. Ex. D at 2. Another explained that they are designating
areas for parks to make up for the golf course. Id.
On May 6, 2010, Sullivan Farms and the Village entered into a Development Agreement
pursuant to which Sullivan Farms agreed to replace the Villages failing wastewater treatment
plant that was not operating efficiently and ha[d] been cited by the [NYSDEC] for violation of
its SPDES permit. Compl. 207, Compl. Ex. B. The Development Agreement noted on its
first page that Chestnut Ridge would include 396 homes, and that the Village Mayor has been
authorized by resolution to sign the Agreement on behalf of the Village. Id.
On May 27, 2010, the Village Planning Board reviewed the Chestnut Ridge project at
another public meeting. Compl. 212. The Complaint alleges that the Planning Board had
otherwise met in relative secrecy, id., whatever that means, but does not deny that all prior
meetings were public and that the May 27 meeting invited public comment. At that meeting, the
Planning Board approved a resolution reciting there would be 396 residential units at Chestnut
Ridge. See May 27, 2010 Resolution of the Village Planning Board, Engel Aff. Ex. E. On June
10, 2010, the Planning Board granted conditional site plan approval for the project and on June
24, 2010, subdivision plat approval. Both resolutions recited Chestnut Ridge would have 396
units. See June 10, 2010 Resolution of the Village Planning Board, Engel Aff. Ex. F; June 24,
2010 Resolution of the Village Planning Board, Engel Aff. Ex. G. Public discussion referenced
the 396 units and absence of a golf course. See June 24, 2010 Minutes of the Village Planning

Case 1:15-cv-02865-KBF Document 27 Filed 06/05/15 Page 19 of 48

Board, Engel Aff. Ex. N at 3 (We can only build 396 units.); see id. at 5 (They also did away
with the golf course besides adding another 100 units.). The Village Planning Board resolution
also recited that the subdivision plat had been submitted to the County Planning Board for its
comment, and on September 16, 2009, the County Planning Board had recommended approval.
See Engel Aff. Ex.G.
D.

The RCC Emerges To Oppose the Chestnut Ridge Project

Despite years of public approvals and open discussion, it was not until the spring of 2012,
that a group of citizens voiced concerns about the project. Compl. 233. Plaintiffs claim that
the citizens expressed concern about the process for getting approvals to get the project started.
Id. But those were not the concerns reported by local newspapers; rather, they focused upon the
citizens objections to Hasidic Jews moving into the Village. See, e.g., Jane Anderson,
Questioning a Developments Religion: Possible Hasidic Presence Raises Bloomingburg
Residents Ire, May 24, 2012, Shawangunk Journal, available at http://www.gunkjournal.com/
2012/05/24/news/1205243.html (last visited May 29, 2015). According to that article, Deputy
Mayor Clifford Teich specifically asked whether there is a way for the village to ensure there
will be no religious community moving in. Id. Its insane that you just asked me that
question, the Village Attorney answered. Id.
The Complaint alleges that at the April 2012 meeting, Mayor Berentsen stated that the
housing project will consist of 396 units and that the New York environmental regulators had
blocked the golf course. Compl. 234, 238. While Plaintiffs allege that it finally became
clear that the public had been deceived, id. 241, Mayor Berentsens statement was entirely
consistent with the Villages many public acts since 2009. Indeed, Plaintiffs own allegations
confirm that these facts were well known. Id. 152, 154, 176, 191-92, 196-97, 199, 246. The
real issue was not the development process, but Hasidic Jewish migration.
10

Case 1:15-cv-02865-KBF Document 27 Filed 06/05/15 Page 20 of 48

E.

The Voter Fraud in the 2014 and 2015 Village Elections

According to the Complaint, Phase IV of the RICO conspiracy concerned a massive


effort by Hasidic Jewish voters to vote in Bloomingburg elections. Id. 32, 282. The
Complaint alleges that none of these 250 registered voters actually resided in Bloomingburg. Id.
Instead, the Complaint claims, implausibly, that these fraudulent voters registered, traveled to
Bloomingburg from Brooklyn and New Jersey, voted, signed affidavits under penalty of perjury,
and then defended themselves against the RCC and the Board of Elections multiple challenges.
Id. Supposedly, the voters took these actions, not to protect their right to vote, but to take the
government of Bloomingburg away from the non-Hasidic residents who live there. Id. 279.
Although devoting 70 pages to these allegations, the Complaint lacks any non-conclusory
assertions about the unlawful acts of any named defendants. The Complaint does not explain
what role, if any, Sullivan Farms played in the alleged voter fraud. The Complaint also alleges
nothing other than intangible injuries from these actions, contending that the voter fraud
deprived Mamakating of jurisdiction over Bloomingburg, id. 472(h), and defamed the Village
of Bloomingburg, id. 479(n).
1.

The March 2014 Election

In March 2014, the Village conducted an election for the mayor and two new trustees.
Id. 280. The Complaint does not allege that Mr. Lamm, Mr. Nakdimen, or any other defendant
committed any particular unlawful act. Instead, it offers the conclusory allegation that Lamm
and Nakdimen, and others both known and unknown, conspired and plotted to recruit and import
large numbers of individuals from Brooklyn, New Jersey and elsewhere to knowingly file false
voter registrations. Id. 282. It claims that Mr. Lamm directed non-party Chaim Rosenbaum
to file a registration challenge, without explaining how Mr. Lamm provided such a direction, his
authority to direct Mr. Rosenbaum, and why Mr. Rosenbaums challenges were unlawful. Id.
11

Case 1:15-cv-02865-KBF Document 27 Filed 06/05/15 Page 21 of 48

289. It alleges that Mr. Lamm signed a nominating petition and participated in litigation to
defend his voter registration and the registrations of other Jewish voters. Id. 281, 289.
Ultimately, the RCCs candidates won the March 2014 election. Id. 378.
2.

The September 2014 Election

In September 2014, Bloomingburg voted on whether to dissolve itself. Id. 380-81,


388. Again, the Complaint does not identify any acts taken by any defendant with respect to that
election or the alleged fraud. Plaintiffs assert that all of the Hasidic Jews fraudulently registered
and voted in that election. Id. 384-86, 404-08. The RCC once again challenged their votes.
Id. 384, 389-91, 410. After litigation ensued, the Board of Elections required the challenged
voters to submit affidavits swearing to their residency and then had their votes sequestered. Id.
386. The state court later determined that those ballots were lawful votes that must be counted,
and the dissolution vote failed. Id. 416-17.
3.

The March 2015 Election

In March 2015, Bloomingburg held an election for one trustee. Once again, Defendants
are not alleged to have taken any specific acts with respect to this alleged voter fraud.
Defendants are alleged to have filed a contrived federal lawsuit and relentless public relations
campaign. Id. 435, 437. According to the Complaint, the RCCs effort to challenge
Bloomingburgs registered Hasidic Jewish population was motivated by the groups sincere
belief that not a single one of those voters actually lives there. The Complaint continues that
despite the RCCs good faith efforts to strike Hasidic Jews from the voter rolls, Defendants
invented false allegations of anti-Semitism and then brought meritless voting rights litigation.
Id. 435. Plaintiffs assert that Defendants did not succeed in their scheme to stuff the ballot
box, which would appear to nullify any claimed injury. Id. 434. Plaintiffs admit, however,
that the New York court ruled that the challenged votes must be counted in the March 2015
12

Case 1:15-cv-02865-KBF Document 27 Filed 06/05/15 Page 22 of 48

election, and the incumbent RCC-affiliated trustee was defeated by Mr. Rabiner. Id. 439-40,
442-45.5
ARGUMENT
I.

THE COURT REVIEWS RICO CLAIMS WITH SKEPTICISM


Recognizing the potential for abuse, this Court closely scrutinizes RICO complaints. The

civil provisions of RICO are the most misused statutes in the federal corpus of law. See W.
79th St. Corp. v. Congregation Kahl Minchas Chinuch, No. 03 Civ. 8606, 2004 WL 2187069, at
*5 (S.D.N.Y. 2004). Because the mere assertion of a RICO claim . . . has an almost inevitable
stigmatizing effect on those named as defendants . . . courts should strive to flush out frivolous
RICO allegations at an early stage of the litigation. See id. (internal quotation omitted)). To
this end, courts must be wary of putative civil RICO claims that are nothing more than sheep
masquerading in wolves clothing. Id. If this Complaint could speak, it would bleat.
In reviewing the Complaint, the Court is not required in a RICO case to accept
conclusions of law or unwarranted deductions [as true]. Amsterdam Tobacco Inc. v. Philip
Morris Inc., 107 F. Supp. 2d 210, 213 (S.D.N.Y. 2000). The Court will focus on factual
allegations, as distinguished from . . . conclusory recitation of RICO-related legal propositions.
Intl Bhd. of Teamsters v. Carey, 297 F. Supp. 2d 706, 716 (S.D.N.Y. 2004). While the Court
accepts well-pled factual allegations as true, bald assertions and conclusions of law will not
suffice . . . [t]he pleadings must create the possibility of a right to relief that is more than
speculative. Spool v. World Child Intern. Adoption Agency, 520 F.3d 178, 183 (2d. Cir. 2008)

While promising a five phase plan, the Complaint addresses the fifth phase only in the
introduction. Id. 33-34. The Complaint then describes only the first four phases, mistakenly
labeling the fourth phase as Phase V. Id. at p. 52. Reader disappointment aside, Phase V
evidently refers to the related litigation before this Court. Id. 33-34, 435 n.4. Such lawsuits
are not, and cannot be, alleged as RICO predicate acts.
13

Case 1:15-cv-02865-KBF Document 27 Filed 06/05/15 Page 23 of 48

(citations and quotations omitted). Ultimately, when the allegations in a complaint, however
true, could not raise a claim of entitlement to relief, or where a plaintiff has not nudged [its]
claims across the line from conceivable to plausible, the[] complaint must be dismissed. Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 558, 570 (2007).
II.

THE RICO CLAIMS (CLAIMS TWO THROUGH FIVE) SHOULD BE


DISMISSED
Bloomingburg and Mamakating filed this action because, under their current leadership,

the municipalities now regret granting the prior approvals for Chestnut Ridge, despite the fact
that those approvals led directly to the Villages new wastewater treatment plant and to the
appreciating property values referenced in the Complaint. Rural Cmty. Coal. v. Vill. of
Bloomingburg, 127 A.D.3d 1304, 1305 (3d Dept Apr. 2, 2015), Engel Aff. Ex. H. Plaintiffs
objections to the Hasidic migration into the area, however, do not make criminals out of Sullivan
Farms or Bloomingburgs prior mayors, and this lawsuit constitutes a textbook misuse of the
civil RICO statute. Plaintiffs RICO claims should be dismissed because they are (i) timebarred, (ii) fail to allege any racketeering activity that caused injury to Plaintiffs business or
property, (iii) fail to allege a continuing threat of criminal conduct related to any alleged RICO
enterprise, and (iv) fail to allege a conspiracy to commit a substantive RICO violation.
A.

Plaintiffs RICO Claims Are Time-Barred

Because RICO has a four-year statute of limitations, Plaintiffs may not bring a RICO
claim for an alleged injury first caused in 2006, and known since at least 2009. See Agency
Holding Corp. v. Malley-Duff & Assoc., 483 U.S. 143, 156 (1987). RICOs statute of limitations
period begins to run when the plaintiff discovers or should have discovered the RICO injury.
In re Merrill Lynch Ltd. Pships Litig., 154 F.3d 56, 58 (2d Cir. 1998). Because RICO claims
arise from the discovery of the injury, the limitations period will run even though plaintiffs have
14

Case 1:15-cv-02865-KBF Document 27 Filed 06/05/15 Page 24 of 48

not discover[ed] or should have discovered the underlying pattern of racketeering activity, even
if the pattern of racketeering activity includes fraud. See Frankel v. Cole, 313 F. Appx 418,
419-20 (2d Cir. 2009). In addition, the limitations period will run from discovery of the first
injury, even if the enterprise has caused additional injuries. See, e.g., Merrill Lynch, 154 F.3d at
59-60; World Wrestling Entertainment, Inc. v. Jakks Pacific, Inc. (WWE), 328 F. Appx 695,
697 (2d Cir. 2009); Baiul v. William Morris Agency, No. 13 Civ. 8683, 2014 WL 1804526, at *6
(S.D.N.Y. May 6, 2014) (Forrest, J.) (dismissing untimely RICO claim where plaintiff alleged
multiple acts of theft running from 2000 to December 2012).
Courts routinely address the question of RICOs statute of limitations on a motion to
dismiss. See In re Merrill Lynch, 154 F.3d at 60 (2d Cir. 1998) ([T]he question of inquiry
notice need not be left to a finder of fact.); Baiul, 2014 WL 1804526 at *6 (inquiry notice is
properly resolved on a motion to dismiss if it appears on the face of the complaint and any other
document the Court may consider). Here, Plaintiffs allege that they suffered their first RICO
injury when they were duped into approving the annexation. Plaintiffs were on notice of that
claimed fraud by early 2009 at the latest, and the RICO claims thus must be dismissed.
1.

Plaintiffs Had Actual Notice of Their RICO Injury Since at Least 2009

The Complaint alleges that Plaintiffs first suffered a RICO injury in 2006, when they
were allegedly defrauded by material misrepresentations concerning the Chestnut Ridge
project. Compl. 20. Mr. Roe allegedly tricked Plaintiffs into approving the annexation based
upon the false representations that Chestnut Ridge would consist only of 125 units and a golf
course. Id. 21, 27-30, 472(a)-(e), 479(a)-(d).
Plaintiffs plainly knew by 2009, that Chestnut Ridge would consist of 396 units and no
golf course, because these were matters of public record. The Village itself, by resolutions and
other official statements, affirmatively endorsed the 396-unit development. See supra at pp. 715

Case 1:15-cv-02865-KBF Document 27 Filed 06/05/15 Page 25 of 48

10. Indeed, the approval documents all recited Chestnut Ridge would have 396 units. See, e.g.,
Compl. 154, 169, 218, 231; see also id. Compl. Ex. B at 1 (Development Agreement: 396
residential townhouses); Engel Aff. Exs. B at I-1 (396 residential units), C at I-2 (396
residential units), E (396 residential units). The Village Planning Board discussed these
matters at public meetings and in resolutions in 2010. See, e.g., Engel Aff. Exs. D at 2, E at 1, F
at 1, G at 1, N at 3, 5. If Plaintiffs were injured by a fraud in 2006, they knew of that injury by
2009.
2.

Plaintiffs Were Also on Inquiry Notice

These public documents establish the Villages actual knowledge, but they are also
sufficient to put both Plaintiffs on inquiry notice, which is all that is required. As the Second
Circuit has recognized, the RICO limitations period begins to run so long as there were storm
warnings that should have prompted an inquiry. WWE, 328 F. Appx at 697 (citations
omitted).6 Plaintiffs may properly be charged with notice of publicly accessible documents that
disclose an alleged fraud. See Salinger v. Projectavision, Inc., 934 F. Supp. 1402, 1410 n.5
(S.D.N.Y. 1996) (plaintiff has inquiry notice of publicly filed documents, especially those on
which complaint relies); see also Menowitz v. Brown, 991 F.2d 36, 42 (2d Cir. 1993)
([P]laintiffs were placed on inquiry notice of their claims by the very SEC-mandated disclosure
documents they rely upon in their complaints.).

See also Takeuchi v. Sakhai, 227 F. Appx 106, 107 (2d Cir. 2007) (rejecting plaintiffs
argument that, while they were on notice of [defendants] possible misrepresentations, they
were not on notice that they had actually been injured by those misrepresentations); Isaak v.
Trumbull Sav. & Loan Co., 169 F.3d 390, 399 (6th Cir. 1999) ([T]he clock begins to tick when
a plaintiff senses storm warnings, not when he hears thunder and sees lightning.); Thompson
v. Metro. Life Ins. Co., 149 F. Supp. 2d 38, 48 (S.D.N.Y. 2001) (Plaintiffs do not need to
understand every permutation of [their] injury, rather the plaintiff simply needs to have a hint
or suspicion of the injury and its cause to be put on inquiry notice.).
16

Case 1:15-cv-02865-KBF Document 27 Filed 06/05/15 Page 26 of 48

In addition to the public records, the Complaint itself contains numerous allegations
confirming the public knew of Chestnut Ridges size and the absence of a golf course long
before the RCC launched its anti-Hasidic campaign. In August 2008, and again in January 2009,
Deputy Mayor Teich asked about public access to the golf course and swimming pool, and was
told to ask the Planning Board. Compl. 138, 151. In December 2009 and in February 2010,
members of the public asked Mayor Berentsen about the golf course community project, and
he told them there would be no golf course. Id. 196-97, 199. On May 27, 2010, the Village
Board held a public hearing on the site plan and preliminary subdivision plat approval, which
consisted of 396 units and no golf course. Id. 212.
The state courts have confirmed that the Chestnut Ridge plans were a matter of public
knowledge in Bloomingburg and Mamakating. In the Complaint, Plaintiffs pretend that the state
appellate court endorsed their view that the 2006 annexation may have been the product of
chicanery or worse conduct. Id. 457 (quoting the Appellate Division). In fact, what the
Appellate Division observed was that the state case was about development approvals given
well after the annexation that the municipalities now regret granting, and which allegedly may
have been obtained as a result of chicanery or worse conduct. Engel Aff. Ex. H at 3 (emphasis
added). The lower court went on:
[P]laintiffs were fully aware of this proposed project by virtue of public hearings
and their notifications thereof yet failed to make efforts to timely challenge the
determination. Instead, they waited to commence [that] action after substantial
work and expense had been undertaken through the demolition of [a] barn and
silo on the project site, the construction of the three model townhouses and the
commencement of construction on the Villages wastewater treatment plant.
Apr. 9, 2013 Order, Rural Cmty. Coal. v. Vill. of Bloomingburg, No. 2888-12 (N.Y. Sup. Ct.
Sullivan Cty.), Engel Aff. Ex. I at 7. The state court thus recognized that it was too late under

17

Case 1:15-cv-02865-KBF Document 27 Filed 06/05/15 Page 27 of 48

state law to challenge the annexation decisions that Plaintiffs now seek to undo here. See Engel
Aff. Exs. H, I.7 The same result applies to bar Plaintiffs untimely civil RICO claims.
3.

Plaintiffs Injuries From More Recent Actions Are Also Untimely

Nearly all of the Complaints alleged injuries fall outside the limitations period. See, e.g.,
Compl. 472(a)-(g), (i), 479(a)-(m). The only injuries falling within the limitations period
are not cognizable RICO injuries at all, as they concern alleged voter fraud and false claims of
anti-Semitism, neither of which constitutes a cognizable injury, and only the first of which is
tied to a RICO predicate act. Id. 472(h), (j), 479(n)-(o); see also infra pp. 19-21. Even so,
these allegations are time-barred, because they are alleged to have arisen as part of a single,
ongoing scheme that became actionable outside the limitations period.
The Second Circuit has recognized that the RICO limitations period runs from the time of
the initial injury, even if the RICO enterprise causes subsequent injuries. See Merrill Lynch, 154
F.3d at 59; see also Long Island Lighting Co. v. Imo Indus. Inc., 6 F.3d 876, 887 (2d Cir. 1993);
Baiul, 2014 WL 1804526 at *6; Pharr v. Evergreen Gardens, Inc., No. 03 CIV. 5520, 2004 WL
42262, at *2 (S.D.N.Y. Jan. 7, 2004), affd, 123 F. Appx 420 (2d Cir. 2005).
Here, Plaintiffs assert that their injuries arise from a long term five phase plan to take
over Mamakating and Bloomingburg. Compl. 21-22. Defendants RICO enterprise has been
and is open-ended and continuous, and by necessity, operated in small but potent doses so
the enterprise could consolidate absolute power and secure the monopoly. Id. 25, 469.
Plaintiffs allegations describe a multi-year campaign that was nearly a fait accompli 8 years
later and supposedly continues to this day. Id. 26, 32, 35, 451-52, 469. Because Plaintiffs

The RCC first sued in October 2012, to challenge approvals for Chestnut Ridge. See Rural
Cmty. Coal. v. Vill. of Bloomingburg, No. 2888-12 (Sup. Ct., Sullivan Cnty.), Engel Aff. Ex. J.
That action was dismissed as untimely in April 2013. See Engel Aff. Ex. I.
18

Case 1:15-cv-02865-KBF Document 27 Filed 06/05/15 Page 28 of 48

discovered, or could have discovered, their injuries in connection with a single, unlawful
scheme, these injuries attributable to a common scheme, are not new and independent. See
Natl Grp. for Commcns & Computers Ltd. v. Lucent Technologies Inc., 420 F. Supp. 2d 253,
266 (S.D.N.Y. 2006). The statute of limitations began to run when the first injury was
discovered in early 2009, and the RICO claims are thus time-barred.
B.

Plaintiffs Do Not State Any Cognizable RICO Claims

While the RICO claims are time-barred, Plaintiffs also do not allege any viable claims.
In order to have standing to maintain a claim, a plaintiff must show (1) a violation of 18 U.S.C.
1962; (2) injury to business or property; and (3) proximate causation of the injury by the
violation. See Hecht v. Commerce Clearing House, Inc., 897 F.2d 21, 23 (2d Cir. 1990); see also
Anza v. Ideal Steel Supply Corp., 547 U.S. 451, 461 (2006) (When a court evaluates a RICO
claim for proximate causation, the central question it must ask is whether the alleged violation
led directly to the plaintiffs injuries.) (emphasis added). To state a violation of Section
1962(b), Plaintiffs must allege predicate acts that would constitute crimes. See 18 U.S.C.
1961(1)(B). While Plaintiffs try to allege 13 predicate acts, they do not allege that Defendants
committed a single one, much less one that proximately caused injury to a business or property
interest.
1.

Plaintiffs Voter Fraud Allegations

Plaintiffs allege that Sullivan Farms committed RICO predicate acts by submitting
hundreds of fraudulent voter registration forms, questionnaires, and unsigned affidavits in
connection with three different elections, Compl. 470(a), (g), and by causing other coconspirators to travel in interstate commerce to vote in Bloomingburg, id. 470(l)-(m).
Plaintiffs allege that the voter fraud in connection with the September 2014 dissolution
referendum unlawfully denied Mamakating jurisdiction over the territory comprising the
19

Case 1:15-cv-02865-KBF Document 27 Filed 06/05/15 Page 29 of 48

Village of Bloomingburg, id. 472(h), and the voter fraud otherwise has defamed the
Village of Bloomingburg and falsely cast the legitimacy of the government of the Village of
Bloomingburg in doubt, id. 479(n).8
First, these allegations do not allege an injury to business or property. To state a claim
for injury, a plaintiff must show that its injury is to its property, and not, for example, physical,
emotional or reputational harm. World Wrestling Entertainment, Inc. v. Jakks Pacific, Inc.
530 F. Supp. 2d 486, 518 (S.D.N.Y. 2007) (quoting State Farm Mut. Auto. Ins. Co. v. CPT Med.
Servs., P.C., 375 F. Supp. 2d 141, 152 (E.D.N.Y. 2005)). The plaintiff may not allege intangible
injuries that are indefinite and unprovable. First Nationwide Bank v. Gelt Funding Corp., 27
F.3d 763, 768 (2d Cir. 1994). Bloomingburg plainly may not premise a RICO injury on
generalized reputational harm. Kimm v. Chang Hoon Lee & Champ, Inc., 196 F. Appx 14, 16
(2d Cir. 2006). Mamakating also may not premise an injury on its intangible ability to carry out
its functions. Town of West Hartford v. Operation Rescue, 915 F.2d 92, 104 (2d Cir. 1990); see
also Makowski v. United Bhd. of Carpenters and Joiners of Amer., No. 08 civ. 6150, 2010 WL
3026510, at *12 (S.D.N.Y. Aug. 2, 2010) (injury to an intangible right, without more, does not
confer RICO standing); Cougar Audio, Inc. v. Reich, No. 99 Civ. 4498, 2000 WL 420546, at *4
(S.D.N.Y. Apr. 18, 2000) (an abstract form of harm is not sufficient to allege a RICO
injury); City of N.Y. v. JAM Consultants, Inc., 889 F. Supp. 103, 106 (S.D.N.Y. 1995) (same).
Plaintiffs do not allege any concrete injury from the alleged voter fraud.
Second, the Complaint fails to identify any particular acts that any particular Sullivan
Farms defendant took in violation of 18 U.S.C. 1962. The Complaints allegations of mail and
8

Plaintiffs contention that Sullivan Farms has cast the legitimacy of the government of the
Village of Bloomingburg in doubt is somewhat ironic considering that the Complaint alleges
that Bloomingburg was run by crooks from 2006 to 2014. If anyone has cast doubt on the
legitimacy of Bloomingburgs government, it is Plaintiffs.
20

Case 1:15-cv-02865-KBF Document 27 Filed 06/05/15 Page 30 of 48

wire fraud are subject to the heightened pleading standard of Rule 9(b). See, e.g., Aronov v.
Mersini, No. 14-cv-7998, 2015 WL 1780164, at *4 (S.D.N.Y. Apr. 20, 2015); Nightingale Grp.,
LLC v. CW Capital Mgmt., LLC, No. 11 Civ. 9293, 2012 WL 2674539, *6 n.14 (S.D.N.Y. July
5, 2012) (Rule 9(b) applies to RICO counts premised on fraud). To satisfy the particularized
pleading threshold of Rule 9(b), a complaint must (1) specify the statements that the plaintiff
contends were fraudulent, (2) identify the speaker, (3) state where and when the statements were
made, and (4) explain why the statements were fraudulent. Novak v. Kasaks, 216 F.3d 300, 306
(2d Cir. 2000). The plaintiff also must allege detrimental reliance on the fraud. Cougar
Audio, 2000 WL 420546 at *4.
Read charitably, the Complaint alleges that 250 Hasidic Jewish voters submitted
fraudulent registrations and then traveled in interstate commerce to commit voter fraud. These
voters, however, are not named parties, and the Complaint does not identify any false statements
by Sullivan Farms; it does not allege that either Mamakating or Bloomingburg detrimentally
relied upon those statements; and it does not identify how any Defendant caused fraud or
conspired with the voters. The only particular acts that Mr. Lamm and Mr. Nakdimen are
alleged to have done is to vote, to have signed petitions, and to have participated in state election
litigation. Compl. 281, 299, 343-45. None of these acts constitutes a RICO predicate, and the
Complaint does not identify any act, agreement, or anything else that ties Defendants to the
alleged voter fraud. Even if Plaintiffs could recover for the vague, intangible injuries alleged,
they have not offered any non-conclusory allegations to tie Defendants to those acts.9

Plaintiffs claims against Defendant Bloomingburg Rentals also should be dismissed on the
ground that they do not identify any act that it has taken, other than the fact that it has leased
apartments to Hasidic Jews who allegedly have only sham tenancies created for the purpose of
illegal voter registration. Id. 55, 328, 336, 348. Plaintiffs admit that these individuals
21

Case 1:15-cv-02865-KBF Document 27 Filed 06/05/15 Page 31 of 48

2.

Plaintiffs Mail and Wire Fraud Allegations Against Ms. Berentsen

Plaintiffs allege that Susan Berentsen committed mail fraud and wire fraud by
sending out the DEIS for comment and by publishing the FEIS, because those documents
allegedly contained an inaccurate prediction of how many people would live at Chestnut Ridge.
Id. 470(b), (d), (f).10 Plaintiffs further allege that Ms. Berentsen committed mail fraud by
sending out a truthful notice of a 2012 Village meeting that Mr. Lamm would attend, because at
the meeting, Mr. Lamm would make a presentation and unsuccessfully seek to quell the
growing public questioning concerning that project and well test reports. Id. 470(e).
Plaintiffs allege that the Village suffered an injury from those actions because they impaired the
DEIS process and deprive[d] the public including Village citizens of actual notice of the size,
scope and character of the project. Id. 479(g)(iii), (h). Plaintiffs also assert that Ms.
Berentsen gave deficient descriptions or late notice of certain public hearings, but the Complaint
does not tie those injuries to any alleged predicate act. See id. 479(g)(i)-(ii), (iv)-(vi).
Plaintiffs can hardly believe that these allegations constitute RICO predicate acts or have
proximately caused any tangible injury to business or property. First, none of the Sullivan
Farms Defendants here is alleged to have made any false statement. Rather, these allegations are
all made against Ms. Berentsen in her capacity as Village Clerk. If the Village Clerk made any
false statements, they would be false statements of the Village, and the Village could not have

entered into leases with Bloomingburg Rentals, and they do not identify any acts or knowledge
of the company to support the allegations of sham. See Aronov, 2015 WL 1780164, at *4.
10

Plaintiffs also allege, somewhat absurdly, that Defendants committed mail fraud by
causing various New York state government agencies to mail written comments and
critiques on the DEIS. Id. 470(c). Plaintiffs cannot seriously contend that these New York
state agencies committed mail fraud by providing non-fraudulent comments on the DEIS. Nor
do Plaintiffs allege that Defendants had the ability to cause these New York state agencies to
send comments or that their actions otherwise could be attributed to any defendant.
22

Case 1:15-cv-02865-KBF Document 27 Filed 06/05/15 Page 32 of 48

relied upon such statements to its detriment. See Velez v. City of N.Y., 730 F.3d 128, 136 (2d Cir.
2013) ([A] municipality may acquire knowledge through any of its agents . . . [.]). For its part,
Mamakating asserts no injuries related to any of these allegations.
Second, even if Ms. Berentsen were capable of defrauding the Village by speaking on its
behalf, Plaintiffs do not allege that she made any false statements. Rather, they allege that she
truthfully circulated the DEIS and the notice of an upcoming Village meeting. Plaintiffs admit
that the DEIS accurately stated that Chestnut Ridge planned to have 396 units. Compl. 154;
see Engel Aff. Ex. B. They allege, however, that the DEIS represented, falsely, that the planned
development would have a permanent population of fewer than 810 persons, even though
ultimately, Chestnut Ridge will house a permanent population of over 3,000 people. Compl.
156. Plaintiffs offer no allegations suggesting that Ms. Berentsen knew the 810-person
prediction was untrue, that her circulating the DEIS amounted to her ratifying it, or that anyone
acted in detrimental reliance upon those statements.
To the extent that Plaintiffs are alleging that the DEIS was a statement of any actual
Defendant, Plaintiffs do not satisfy the requirements of Rule 9(b). See Novak, 216 F.3d at 306;
see also Gross v. Waywell, 628 F. Supp. 2d 475, 483 (S.D.N.Y. 2009). These allegations do not
identify which defendants is the speaker who made the false statement. See Mills v. Polar
Molecular Corp., 12 F.3d 1170, 1175 (2d Cir.1993) (Rule 9(b) is not satisfied where the
complaint vaguely attributes the alleged fraudulent statements to defendants.). They do not
provide any allegations supporting an inference that this targeted speaker knew it to be untrue.
Indeed, the Complaint does not even explain how Plaintiffs know that over 3,000
people will live in the 396-unit complex; they evidently predict that on average, more than
seven people will live in each townhouse. As implausible as that sounds, no one has moved into

23

Case 1:15-cv-02865-KBF Document 27 Filed 06/05/15 Page 33 of 48

Chestnut Ridge, and a prediction concerning its future occupancywhether made five years ago
in the DEIS or nowcan only be a prediction, not a false statement of material fact. See, e.g.,
Matsumura v. Benihana Natl Corp., 542 F. Supp. 2d 245, 252 (S.D.N.Y. 2008) (It is axiomatic
. . . that predictive or opinion statements about future events, without more, are not
misrepresentations); Cohen v. Koenig, 25 F.3d 1168, 1172 (2d Cir.1994) (statements will not
form the basis of a fraud claim when they are mere puffery or are opinions as to future
events). In fact, the SEQRA process itself contained a debate over Chestnut Ridges expected
occupancy, and the FEIS describes both positions relating to that matter. See Engel Aff. Ex. C at
1, 57-66. There is no sense in which the DEIS could be described as containing a false
statement of material fact.
Finally, even if the Village had alleged mail or wire fraud in connection with these
assertions, these allegations concerning the deficiencies in the SEQRA process and the public
notices related to hearings fall far short of any tangible injury to business or property. See
WWE, 530 F. Supp. 2d at 518; City of N.Y., 889 F. Supp. at 105. The Complaint alleges no
concrete financial loss related to these alleged statements, much less a loss suffered by
detrimental reliance upon the DEIS.
3.

Plaintiffs Wire Fraud Allegations Against Mr. Roe

Plaintiffs contend that Mr. Roe committed wire fraud by faxing an October 17, 2006
letter to the Village falsely representing that he owned and represented Sullivan Farms, and
that he intended to build a scenic golf course and residential community when he instead
intended to create a high-density cluster housing project. Compl. 470(h). Mamakating
contends that the annexation (but not the letter) caused it injury through its loss of jurisdiction
over the property and its loss of an undefined amount of fees. Id. 472(a)-(g). While

24

Case 1:15-cv-02865-KBF Document 27 Filed 06/05/15 Page 34 of 48

Bloomingburg presumably gained what Mamakating lost, the Complaint nonetheless asserts that
the annexation somehow injured the Village. Id. 479(a)-(d).
First, Plaintiffs mail fraud allegations flunk Rule 9(b)s requirements. Plaintiffs must
plead fraud with specificity, not simply on information and belief. Aronov, 2015 WL
1780164, at *4; see Segal v. Gordon, 467 F.2d 602, 608 (2d Cir.1972). Yet the Complaint
alleges only on information and belief that Mr. Roe knew that the letter was false. Compl.
111. In fact, the Complaint does not even allege that Mr. Roe made any false statements. As
Plaintiffs concede, Mr. Roe was the owner and sole shareholder of Sullivan Farms, and he
was certainly its representative. Id. 50, 61. The fact that Raymond Farms had an option to
acquire Sullivan Farms, id. 63, does not render those statements false.
In addition, while Plaintiffs elsewhere claim that Mr. Roe lied about the number of units
at Chestnut Ridge, this letter did not repeat that assertion. Rather, Mr. Roe allegedly expressed
an interest in building a scenic golf course and residential community. Id. 470(h). Yet this
was plainly true. Chestnut Ridge was, and will be, a residential community. In addition, the
spring 2006 plans identified a golf course, see Engel Aff. Ex. A, and the golf course was still on
the table at the time of the DEIS in 2009. See Compl. 153; Engel Aff. Ex. B at II-1. The
Complaint does not contain any specific allegations supporting the conclusion that three years
before, Mr. Roe did not believe there would be a golf course.
Second, the Complaint does not contain any allegations that Plaintiffs relied on Mr. Roes
letter to their detriment. By the time of the letter, Mr. Roe had allegedly made a presentation to
the Village touting a 125-unit project, Compl. 86, and the Village had already signed the
annexation petition, id. 106. Mr. Roe also appeared at a November 2006 meeting where the
annexation was approved. Id. 112. Plaintiffs have not alleged and cannot allege that they acted

25

Case 1:15-cv-02865-KBF Document 27 Filed 06/05/15 Page 35 of 48

in detrimental reliance upon Mr. Roes letter, which made no mention of the 125-unit promise
that Plaintiffs elsewhere allege to be the critical misrepresentation.
Third, Plaintiffs do not allege any injury to business or property from Mr. Roes
October 17, 2006 letter. The Town cannot allege an injury based on its intangible right to
jurisdiction. See, e.g., Kimm, 196 F. Appx at 16; Town of West Hartford, 915 F.2d at 104. The
Village alleges no concrete injury at all; indeed, the Towns loss is the Villages gain. The Town
alleges that, but for the annexation, it would have received a $1,000 per unit fee. Compl.
472(d). But the Town may not recover for speculative losses or where the amount of damages
is unprovable. Tr. of Plumbers and Pipefitters Natl Pension Fund v. Transworld Mech., Inc.,
886 F. Supp. 1134, 1146 (S.D.N.Y 1995); see Bankers Trust, Co. v. Rhoades, 859 F.2d 1096,
1106 (2d Cir. 1988). The Second Circuit has recognized the injuries in the form of loss of
employment and loss of commissions are too speculative to confer standing. Hecht, 897 F.2d
at 24. While such injuries may have been factually caused by RICO violations, they are not
proximately caused by the violations. Id.
The Towns injuries here are even more speculative than in Hecht. Absent the
annexation and without sewer service, the Town does not allege that any units would have been
built. To the contrary, the Complaint alleges that, but for Mr. Roes duplicity, the Town would
blocked the Chestnut Ridge development. Had the Town done so, then there would have been
no fees to collect. See, e.g., Commercial Union Assur. Co. PLC v. Milken, 17 F.3d 608, 612 (2d
Cir. 1994) (affirming dismissal of RICO claim because plaintiffs ha[d] already been placed in
the position they would have been in but for the illegal conduct and without provable
damages, no viable RICO cause of action [could] be maintained.); Elsevier, Inc. v. WHPR, Inc.,
692 F. Supp. 2d 297, 311 (S.D.N.Y. 2010) (RICO damages cannot place plaintiffs in a better

26

Case 1:15-cv-02865-KBF Document 27 Filed 06/05/15 Page 36 of 48

position than they would have been had the racketeering not occurred). The Complaint thus does
not allege that Mr. Roes letter deprived the Town of a non-speculative amount of fees.
In addition, the Complaint cannot allege that Mr. Roes letter proximately caused the
Town to lose a particular number of fees. The Chestnut Ridge development has required
numerous approvals since the original annexation. Each and every instance when the full scope
of Chestnut Ridge was reviewed and approved severed any link between the supposed fraud and
Plaintiffs alleged harm. Even today, seven years later, only 51 units have been built and none is
currently occupied. The Town cannot pursue a RICO claim based upon the speculative notion
that, but for Mr. Roes letter, it would have identifiable fees from any units developed.
4.

Plaintiffs Bribery Allegations

Plaintiffs allege that Sullivan Farms violated New York law and 18 U.S.C. 1346 by
paying bribes to Mayor Saunders and Mayor Berentsen. Compl. 470(i)-(k). The Village
alleges that the bribes deprive[d] the Village of Bloomingburg and its electorate and citizens of
the intangible right to [the Mayors] honest services. Id. 479(f), 479(g)(vi). The Village also
allegedly suffered injuries because the bribed officials worked to push through the agenda of the
racketeering enterprise. Id. 479(i).
These allegations, once again, fail to state a RICO claim. First, the Village does not
allege the elements of bribery under New York or federal law. To state a claim, the plaintiff
must allege that a government official was provided with a benefit in return for an official act.
See, e.g., United States v. Ganim, 510 F.3d 134, 148 (2d Cir. 2007) ([T]he crime of bribery
requires a quid pro quo.); United States v. Alfisi, 308 F.3d 144, 148 (2d Cir. 2002) ([B]ribery ...
requires a quid pro quo element.); N.Y. Penal Code, 200.00 et seq. (requiring proof of an
agreement or understanding that in return for the benefit, the public servants vote, opinion,
judgment, action, decision or exercise of discretion . . . will thereby be influenced).
27

Case 1:15-cv-02865-KBF Document 27 Filed 06/05/15 Page 37 of 48

The Complaint does not contain any allegations that either Mayor agreed to perform any
particular act in return for a bribe. The Complaint claims that each mayor benefited from certain
land transactions. Compl. 118-20, 160-66. Yet one transaction occurred years after Mayor
Saunders left office, and the other occurred one year into Mayor Berentsens tenure, after he had
allegedly supported Chestnut Ridge. Even wishing away this fatal timing problem, the
Complaint does not explain what either Mayor agreed to do in return. In both cases, the Mayors
are simply alleged to have favored the Chestnut Ridge development. Such allegations claim, at
most, conflicts of interest and do not plausibly state a claim for bribery.
Second, Plaintiffs fail to allege any cognizable injury from the alleged bribery. The law
is clear that the publics intangible right to honest services cannot be construed as property
traditionally understood. United States v. Kincaid-Chauncey, 556 F.3d 923, 941 n.14 (9th Cir.
2009) (The publics intangible right to honest services cannot be construed as property
traditionally understood.), abrogated on other grounds by Skilling v. U.S., 561 U.S. 358 (2010);
see Cougar Audio, 2000 WL 420546 at *4; City of N.Y., 889 F. Supp. at 106. Bloomingburgs
allegation that it was harmed by the deprivation of its intangible right to honest services is a
prototypical example of an injury not recoverable in a civil RICO action.
Finally, Plaintiffs do not establish proximate cause between any alleged bribe and
claimed injury. See Hecht, 897 F.2d at 23-24. Plaintiffs imply that, but for the bribery, the
Village would not have granted Chestnut Ridge its various approvals. Compl. 479(i). Yet
neither Mayor had the authority to grant any approval. The Mayor has only one vote on the
three-member Board of Trustees, N.Y. Vill. Law 4-400, and no votes on the Planning Board,
see id. The Development Agreement specifically recites that the Board of Trustees had
authorized the Mayor to sign it. Compl. Ex. B at 2. Every Village approval thus required the

28

Case 1:15-cv-02865-KBF Document 27 Filed 06/05/15 Page 38 of 48

votes of other officials, whose motives have not been challenged. Such intervening decisionmakers break the chain of proximate causation.
C.

Plaintiffs Fail to Allege a Pattern of Racketeering Through Continuity

Plaintiffs have also failed to allege other elements requirements by the RICO statute. To
state a claim, Plaintiffs must allege a pattern of ongoing racketeering activity that is related
to the enterprises activities. United States v. Thai, 29 F.3d 785, 800, 815 (2d Cir. 1994); see
DeFalco v. Bernas, 244 F.3d 286, 306 (2d Cir. 2001). To allege such a pattern, Plaintiffs must
allege not only the commission of a related series of acts, but that those acts amount to or pose a
threat of continu[ing] criminal activity. H.J. Inc. v. N.W. Bell Tel. Co., 492 U.S. 229, 239
(1989); Cofacredit, S.A. v. Windsor Plumbing Supply Co., 187 F.3d 229, 243 (2d Cir. 1999).
Where, as here, the RICO enterprise concerns a legitimate business, Plaintiffs must plead
facts supporting a threat of continued criminal activity. See Cofacredit, 187 F.3d at 242.
Plaintiffs fail to meet these requirements. First, Plaintiffs identify Raymond Farms as the
enterprise at issue, see Compl. 53, but they do not offer any nexus between the predicate acts
and Raymond Farms. A complaint does not state a RICO claim merely by alleging racketeering
activity and denominating a legal entity a RICO enterprise. D. Penguin Bros. Ltd. v. City
Natl Bank, 587 F. Appx 663, 667 (2d Cir. 2014). A plaintiff must also plausibly allege that a
nexus exist[s] between the enterprise and the racketeering activity that is being conducted. Id.
(quoting First Capital Asset Mgmt., Inc. v. Satinwood, Inc., 385 F.3d 159, 174 (2d Cir. 2004));
see Bldg. Indus. Fund v. Local Union No. 3, Intl Bhd. of Elec. Workers, AFL-CIO, 992 F. Supp.
162, 178 (E.D.N.Y. 1996). The Complaint must allege that the predicate acts were related to
the enterprises activities or that the defendant was enabled to commit the offense solely by
virtue of his position in the enterprise. Thai, 29 F.3d at 815; see Building Indus. Fund, 992 F.

29

Case 1:15-cv-02865-KBF Document 27 Filed 06/05/15 Page 39 of 48

Supp. at 179 (recognizing that relatedness requires some clear link between the activities and
the enterprise) (internal citation omitted).
Plaintiffs presumably selected Raymond Farms because they wished to name Sullivan
Farms as a RICO defendant and were mindful of the need to keep the RICO enterprise distinct
from the RICO defendants. See, e.g., Cruz v. FXDirectDealer, LLC, 720 F.3d 115, 120-21 (2d
Cir. 2013). Having arbitrarily selected Raymond Farms, Plaintiffs offer no factual allegations
plausibly linking the company to the events alleged. The Complaint inadequately allege[s] that
the RICO defendants engaged in racketeering activity through Raymond Farms and does not
allege that they leveraged the Raymond Farms corporate structure to perpetrate the fraud.
Penguin Bros., 587 F. Appx. at 667.
Indeed, the Complaint does not identify anything about Raymond Farms ongoing
business at all. Plaintiffs contend that in early 2006, Raymond Farms contracted with Mr. Roe
and acquired an option to purchase Sullivan Farms. Compl. 63. The Complaint does not
identify a single act with regard to Raymond Farms in the nine years since. The Complaint does
not allege that Raymond Farms exercised its option to acquire Sullivan Farms, that it currently
owns Sullivan Farms, or that it conducts any business at all. Nor does the Complaint allege that
the alleged predicate acts were taken through Raymond Farms or otherwise leveraged its
corporate structure. Penguin Bros., 587 F. Appx. at 667. Instead, the Complaint offers only the
conclusory allegation that everything Defendants have done should be attributed to the business
of Raymond Farms. Compl. 471. Such naked assertions devoid of further factual
enhancement are insufficient. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
Second, Plaintiffs have failed to allege a pattern of racketeering acts that amount to or
pose a threat of continu[ing] criminal activity. Cofacredit, 187 F.3d at 242 (quoting H.J. Inc.,

30

Case 1:15-cv-02865-KBF Document 27 Filed 06/05/15 Page 40 of 48

492 U.S. at 239) (emphasis added). Plaintiffs allege that the Raymond Farms enterprise operates
an open-ended, continuous scheme. Compl. 22-23, 30-32, 35, 56, 451-52. Yet the acts
alleged have all ended. See First Capital Asset Mgmt., Inc., 385 F.3d at 180-81. Sullivan Farms
allegedly duped Plaintiffs into approving the annexation and then bribed their way through the
next six years of Village approvals. By 2014, however, the community, led by the RCC, had
supposedly elected the current incumbents and put an end to the scheme. These alleged acts of
fraud and bribery were inherently finite and have been completed. See GICC Capital Corp.
v. Tech. Fin. Grp., Inc., 67 F.3d 463 (2d Cir. 1995) (recognizing that purported scheme to loot
assets was inherently terminable once all assets were looted); Intl Bhd. of Teamsters, 297
F.Supp.2d at 715-18 (Once the election occurred, the schemes, and their alleged sponsoring
enterprise, necessarily came to an end.).
Plaintiffs appear to contend that the RICO enterprise continues because of the possibility
of future voter fraud. Yet Raymond Farms has never been plausibly linked to the voter
fraud and as discussed above, those allegations neither constitute predicate acts nor offer a nonspeculative risk of recurrence. See GICC Capital Corp., 67 F.3d. at 467 (court looks only at
period of actual racketeering activity to measure continuity); WWE, 530 F. Supp. 2d at 517 (no
open-ended continuity where misconduct was alleged six years after licensing deal was
fraudulently approved). Indeed, in each election, the voter fraud allegations have been heavily
litigated and reviewed by the Sullivan County Board of Elections and by the state courts (and are
also pending in front of this Court). Plaintiffs, having discovered and stopped the scheme,
cannot plausibly allege that Sullivan Farms and Raymond Farms are committing involved in any
continuing criminal activity on that basis to support a civil RICO claim.

31

Case 1:15-cv-02865-KBF Document 27 Filed 06/05/15 Page 41 of 48

D.

Plaintiffs Fail To Allege A RICO Conspiracy (Claims Three and Five)

Because the substantive RICO claims fail, the RICO conspiracy claims fail, too. See,
e.g., Cofacredit, 187 F.3d at 244-45; Fuji Photo Film U.S.A., Inc. v. McNulty, 640 F. Supp. 2d
300, 312 (S.D.N.Y. 2009). In addition, the conspiracy claims should be dismissed because
Plaintiffs offer nothing more than naked recitations of the elements of conspiracy.
For the conspiracy claims to survive, Plaintiffs must plead, as to each co-conspirator:
(1) an agreement to join the conspiracy; (2) acts in furtherance of the conspiracy; and (3) that
each knowingly participated in the scheme. See Fuji Photo Film, 640 F. Supp. at 312. To do so,
a plaintiff must allege more than an unadorned, the-defendant-unlawfully-harmed-me
accusation. Iqbal, 556 U.S. at 678. Moreover, a plaintiffs obligation to provide the grounds
of his entitle[ment] to relief requires more than labels and conclusions, and a formulaic recitation
of the elements of a cause of action will not do. Twombly, 550 U.S. at 555 (internal quotation
omitted). Nor does a complaint suffice if it tenders naked assertion[s] devoid of further
factual enhancement. Iqbal, 556 U.S. 678.
Plaintiffs allege only that, upon information and belief, each Sullivan Farms Defendant,
as well as others, knew that their acts were part of an unlawful scheme. See, e.g., Compl. 85,
115, 130, 140, 142. These bare legal allegations do nothing more than repeat the elements of 18
U.S.C. 1962(d). The Complaint is utterly devoid of anything that could be construed as
alleging an agreement to join the conspiracy or actual knowledge of the conspiracy itself.
These summary allegations fail to state a claim.
III.

PLAINTIFFS CLAIMS ARE PRECLUDED BY RES JUDICATA


Plaintiffs claims are barred by res judicata. Both the Town and the Village were parties

to a prior state court suit where the RCC sought to annul the 2006 annexation and to challenge
the same approvals at issue here. See Engel Aff. Exs. K, J. Once Mr. Herrmann and Mr. Girardi
32

Case 1:15-cv-02865-KBF Document 27 Filed 06/05/15 Page 42 of 48

were elected, Plaintiffs supported the RCCs efforts and the Town filed affirmative claims
seeking to void both the prior approvals and the Development Agreement. See Mar. 5, 2014
Answer and Cross-Claims, Rural Cmty. Coal. v. Vill. of Bloomingburg, No. 0212-2014 (N.Y.
Sup. Ct. Sullivan Cnty.), Engel Aff. Ex. L. The state courts thus adjudicated Claims One, Six,
and Seven of this Complaint, Engel Aff. Exs. H, I, K, and Plaintiffs could have raised their
parallel RICO claims there as well. Having litigated these matters and lost, res judicata bars
Plaintiffs from re-litigating these issues before this Court.
For the res judicata bar to apply, a party must show that (1) the previous action involved
[a final] adjudication on the merits; (2) the previous action involved the plaintiffs or those in
privity with them; [and] (3) the claims asserted in the subsequent action were, or could have
been raised in the prior action. Mahmood v. Research in Motion Ltd., 905 F. Supp. 2d 498, 502
(S.D.N.Y. 2012) (Forrest, J.); see Monahan v. N.Y. City Dept of Corr., 214 F.3d 275, 285 (2d
Cir. 2000). A dismissal on statute of limitations grounds reflects a final adjudication on the
merits. See Mahmood, 905 F. Supp. 2d at 503. In addition, the litigating parties need not be
precisely the same as those in the prior proceeding where the interests of the non-party were
adequately represented by the parties in the previous case. OCallaghan v. N.Y. Stock
Exchange, No. 12 Civ. 7247, 2013 WL 3984887, at *8 (S.D.N.Y. Aug. 2, 2013), affd, 563 F.
Appx. 11 (2d Cir. 2014), cert denied, 135 S. Ct. 216 (2014). And [w]hether a claim that was
not raised in the previous action could have been raised therein depends in part on whether the
same transaction or connected series of transactions is at issue, whether the same evidence is
needed to support both claims, and whether the facts essential to the second were present in the
first. 7 West 57th Street Realty Co. LLC v. Citigroup, Inc., No. 13 Civ. 981, 2015 WL 1514539,
at *23 (S.D.N.Y. Mar. 31, 2015).

33

Case 1:15-cv-02865-KBF Document 27 Filed 06/05/15 Page 43 of 48

Here, the New York court granted judgment on the merits. See Engel Aff. Ex. H at 4
([T]he challenge to the annexationcommenced over seven years after it was completedis
barred by the statute of limitations.); id. (affirming the dismissal of the remaining causes of
action). Mamakating, Bloomingburg, and Sullivan Farms were parties to that action, which
involved the same transaction or connected series of transactions. See Engel Aff. Exs. H, I, J,
K. While the prior action did not involve federal claims, Plaintiffs could readily have asserted
them. See, e.g., 7 West 57th Street Realty Co., 2015 WL 1514539 at *28 (applying res judicata
to federal RICO claim because plaintiff in state court could have asserted the same RICO
counterclaims); see also Tafflin v. Levitt, 493 U.S. 455, 467 (2000) ([S]tate courts have
concurrent jurisdiction over civil RICO [claims.]). Res judicata thus bars Plaintiffs from relitigating their prior claim or advancing new theories concerning the same events.
IV.

PLAINTIFFS STATE LAW CLAIMS SHOULD BE DISMISSED


A.

The Court Should Decline Supplemental Jurisdiction

Plaintiffs RICO claims represent their only federal claims in this action. [I]n 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 . . . will point toward declining to exercise
jurisdiction over the remaining state-law claims. Carnegie-Mellon Univ. v. Cohill, 484 U.S.
343, 350 n.7 (1988). Accordingly, the Court may decline to exercise supplemental jurisdiction
over Plaintiffs remaining state-law claims. See Aronov, 2015 WL 1780164, at *4 (declining
jurisdiction over state-law claims upon dismissal of RICO); McGee v. State Farm Mut. Auto. Ins.
Co, No. 08-CV-392, 2009 WL 2132439, at*6 (E.D.N.Y. July 10, 2009) (same). In any event,
Plaintiffs have otherwise failed to state a claim.

34

Case 1:15-cv-02865-KBF Document 27 Filed 06/05/15 Page 44 of 48

B.

Plaintiffs Do Not State A Declaratory Judgment Claim (Claim One)

Plaintiffs first cause of action seeks a declaratory judgment that the 2006 annexation of
the Chestnut Ridge property is void. Plaintiffs do not identify an affirmative cause of action
pursuant to which they seek a declaration. The Declaratory Judgment Act gives the Court
jurisdiction to settle legal rights and remove uncertainty where a potential defendant fears a
future lawsuit and the Court otherwise has jurisdiction. See, e.g., John Wiley & Sons, Inc. v.
Visuals Unlimited, Inc., No. 11-CV-5453, 2011 WL 5245192, at *3-4 (S.D.N.Y. Nov. 2, 2011).
The statute does not create jurisdiction, and the Complaint does not identify the cause of action
pursuant to which it submits this question to the Court.
Plaintiffs effort to have this Court address this state law issue fails for numerous other
reasons. First, as Plaintiffs admit, the New York Appellate Division has resolved this precise
issue against them. That court held Plaintiffs attempt, in conjunction with the RCC, to
challenge the 2006 annexation was time-barred. See Engel Aff. Ex. H. Plaintiffs are thus not
only bound by claim preclusion, see supra pp. 32-34, but they are also bound by issue
preclusion. Second, Plaintiffs claim is barred by the Rooker-Feldman doctrine. The Town
alleges that it is appealing the Third Departments decision to the New York Court of Appeals.
Compl. 457. This Court, however, does not have appellate jurisdiction over the state court
decision, and Rooker-Feldman thus bars Plaintiffs effort to collaterally attack the judgment. See
Mareno v. Dime Sav. Bank of N.Y., 421 F. Supp. 2d 722, 726 (S.D.N.Y. 2006) (RookerFeldman doctrine precludes cases brought in lower federal courts by state-court losers
complaining of injuries caused by state-court judgments.) (internal citations omitted). Third,
Plaintiffs are barred by principles of equitable estoppel, because they ask this Court to overturn
an annexation decision that they themselves approved and upon which Defendants relied. See

35

Case 1:15-cv-02865-KBF Document 27 Filed 06/05/15 Page 45 of 48

Compl. 104-09; see Engel Aff. Ex. H. Plaintiffs approved Chestnut Ridge approximately ten
years ago and may not ask the Court to unwind the approvals they themselves granted.
Finally, Plaintiffs effort to challenge the annexation is barred by the statute of
limitations. As the Third Department recognized, it is well-settled that a party may not
circumvent the limitations period under Article 78 by seeking to challenge municipal approvals
on the ground that the party seeks a declaratory judgment. Indeed, the RCCs 2012 suit was
dismissed on precisely this ground. See Engel Aff. Ex. I at 7. The Third Department likewise
recognized that under New York law, the RCC and the Towns efforts to challenge the
annexation were time-barred. See Engel Aff. Ex. H at 4.
C.

Plaintiffs May Not Void the Development Agreement (Claim Six)

The Village asks this Court to void a contract with Sullivan Farms II, Inc. for the
purpose of granting a monopoly to said Defendants over the water and sewer services to be
installed by significantly limiting access of the Village and other properties in the Village to
those services. Compl. 486. The Village does not identify the contract with any specificity,
but they appear to be referring to the Development Agreement. Id. The Town previously raised
such an argument in the RCC action (to which the Village was a party), and the argument was
rejected by the state court. See Engel Aff. Ex. H.
Under the Development Agreement, Sullivan Farms agreed to build a new wastewater
treatment plant at its own expense that would handle the Villages existing needs and an
additional 250,000 gallons per day, which would be used for Chestnut Ridge and any future
developments in the Village. Compl. Ex. B at 1. Plaintiffs claim that Sullivan Farms has
obtained a monopoly, but that monopoly is nothing other than its right to use the additional
wastewater treatment capacity that it built at its own expense.

36

Case 1:15-cv-02865-KBF Document 27 Filed 06/05/15 Page 46 of 48

Plaintiffs effort to void the Development Agreement thus suffers from multiple
problems. First, the Development Agreement contains an arbitration clause, and therefore, the
Court lacks jurisdiction to hear disputes arising under the agreement. See id. at 21. As the
Supreme Court has confirmed, where parties dispute the enforcement of a contract with an
arbitration clause, the federal courts are obliged to dismiss claims in favor of arbitration. See
Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 444 (2006). The enforceability of the
Development Agreement, if it is a bona fide question, is a question for arbitration.
Second, Plaintiffs do not state a claim for voiding the contract under New York law. A
contract is void as against public policy only if it violates the law of the State, whether found in
the Constitution, statutes or decisions of the courts. Mills v. Everest Reinsurance. Co., 410 F.
Supp. 2d 243, 253 (S.D.N.Y. 2006); see N.E. Mut. Life Ins. Co. v. Caruso, 73 N.Y.2d 74, 81
(1989). Plaintiffs here fail to cite to a single statute, regulation or court decision that would
void a contract, Mills, 410 F. Supp. 2d at 253, and the claim thus must be dismissed.
In addition, Plaintiffs do not provide any logical reason to void the Agreement. They
assert that the contract was inequitable, but they fail to explain what would be inequitable in
Sullivan Farms using the excess treatment capacity that it built. Under the Development
Agreement, Sullivan Farms has built and gifted to the Village a new wastewater treatment plant.
What would be inequitable would be for the Village to receive the benefits of that plant while
denying Sullivan Farms its rights. Plaintiffs also suggest that the bribe to Mayor Berentsen
induced him to support the contract, but the two other trustees who approved the Development
Agreement had no such conflict of interest. Compl. 207, 209. Therefore, the contract may
not be avoided on that basis. See, e.g., Galef v. Alexander, 615 F.2d 51, 57 (2d Cir. 1980).

37

Case 1:15-cv-02865-KBF Document 27 Filed 06/05/15 Page 47 of 48

D.

Plaintiffs Do Not State a Claim for Injunctive Relief (Claim Seven)

Plaintiffs independent cause of action for Injunctive Relief fails to state a claim. As
the Court has recognized, injunctions are remedies, not causes of action. Chiste v. Hotels.com
L.P., 756 F. Supp. 2d 382, 406 (S.D.N.Y. 2010). A request for an injunction is either duplicative
of some other substantive claim or no claim at all. See Miller v. Wells Fargo Bank, N.A., 994 F.
Supp. 2d 542, 558 (S.D.N.Y. 2014) (dismissing a standalone cause of action for declaratory and
injunctive relief). Plaintiffs seventh claim should be dismissed.
E.

Plaintiffs Do Not State a Claim for Fraud (Claim Eight)

Plaintiffs common law fraud claim fails under Federal Rule of Civil Procedure 9(b).
See, e.g., Boniel v. U.S. Bank N.A., No. 12-cv-3809, 2013 WL 458298, *2 (E.D.N.Y. Feb. 6,
2013) (Claims of fraud must be pled with particularity, under both New York and Federal rules
of procedure.). The fraud claim should be dismissed for reasons similar to those discussed
under the RICO claims. The Complaint does not identify any particular fraudulent statements
made by any particular defendant. Instead, it simply asserts that Defendants made false and
fraudulent statements that induced Plaintiffs to grant permissions, enter into contracts, annex
lands, etc. Compl. 500. In addition, because these claims are subject to New Yorks six-year
statute of limitations, they are time-barred to the extent they concern the annexation or any other
statements made before April 14, 2009.

38

Case 1:15-cv-02865-KBF Document 27 Filed 06/05/15 Page 48 of 48

CONCLUSION
For the foregoing reasons, the Defendants motion should be granted in its entirety.
Dated: June 4, 2015
DECHERT LLP
/s/ Steven A. Engel
Steven A. Engel
Benjamin M. Rose
Jamie R. Hacker
1095 Avenue of the Americas
New York, New York 10036
(212) 698-3500
(212) 698-3599 (facsimile)
steven.engel@dechert.com
Attorneys for Defendants Shalom Lamm,
Kenneth Nakdimen, Sullivan Farms II, Inc.,
Raymond Farms, LLC, and Bloomingburg
Rentals, LLC

39