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Florida Lawsuit Accuses Commercial Landlord of RICO Violations

The Chattanoogan.com recently posted a story about a lawsuit filed at the U.S. District Court for the Middle District of Florida. The legal claim was filed against CBL & Associates, a large real estate investment firm. According to the complaint, there are allegations that CBL has been consistently overcharging its tenants for electricity. Notably, while this case is fundamentally a commercial landlord-tenant dispute, the lawsuit claims that CBL is in violation of the Racketeer Influenced and Corrupt Organization (RICO) Act . Increasingly, it is common for businesses to face civil RICO claims. If this issue is affecting your Florida business, you should contact an experienced West Palm Beach RICO claims attorney for immediate legal help.

Civil RICO Action

When most people hear the term ‘racketeering’, they think of criminal enterprises. However, RICO claims can be brought against legitimate businesses as well. Both federal and Florida RICO statutes allow for the recovery of civil damages against an enterprise that has engaged in a ‘pattern of racketeering activity’. The federal RICO statute defines a pattern of racketeering activity as at least two distinct acts that occurred within ten years of each. On the surface that is a very broad standard. The Supreme Court has refined that standard and indicated that those elements are required for a RICO claim, but they are not always sufficient. One of the most important RICO cases is the Supreme Court case H.J. Inc. v. NW Bell Tel. Co. In this case, the Court established a ‘relationship plus continuity’ standard to assess alleged civil RICO violations. The relationship plus continuity standard requires:

  • A pattern of repeated conduct;
  • Which is connected and has occurred in a closed period; and
  • Is likely to continue to occur into the future.

Is it a RICO Case or Merely a Landlord Tenant Dispute?

Intentionally, and repeatedly, overcharging a tenant does initially appear as though it could meet the broad standards of the relationship and continuity test. But, does that mean that practically every landlord tenant dispute could potentially lead to RICO action? After all, the very nature of a landlord-tenant relationship often produces patterns of conduct. Courts have recognized that plaintiffs are abusing the RICO statute. This is likely because civil RICO claims offer treble damages. The term treble damages simply means that courts will triple the amount of the actual damage that occurred when awarding compensation. So, there is considerable incentive for plaintiffs to bring their dispute as a RICO claim whenever possible. Recently, the Court of Appeals for the Third Circuit confronted this issue in the case Delrio Mocci v. Connolly Properties, Inc. In that case, a tenant brought his dispute as a civil RICO claim. The court dismissed his claim stating that it could not imagine that congress had intended such a dispute to fall under the RICO statute. This is in line with many other courts, which have also established limits to what qualifies as a legitimate civil RICO claim.

Contact An Experienced West Palm Beach RICO Claims Attorney

RICO cases are notoriously complex. Because the plaintiffs can recover additional damages, many businesses are at risk of facing civil RICO action. At Pike & Lustig, LLP our legal team has extensive experience protecting Florida businesses from frivolous RICO lawsuits. If your business is facing civil RICO action, you should contact our West Palm Beach office as soon as possible.

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