by Structured Settlement Watchdog®
No "RICO Suave" For Defendants
A Federal District Judge in Eastern Pennsylvania has denied motions to dismiss racketeering claims against Seneca One, JG Wentworth, 321 Henderson and Portsmouth Virginia lawyer and delegate Stephen Heretick in the matter of Larry G. Dockery et al. v Stephen E. Heretick et al. and New York Life Insurance Company, et al.Case 2:17-cv-04114-MMB.
Following are the list of motions and rulings by the Eastern Pennsylvania District Court on May 14, 2019:
Defendants' Motions to Dismiss Denied
- Count I of the Amended Complaint alleges violations of RICO, 18 U.S.C. § 1962(c), by
Seneca, Wentworth, 321 Henderson, and Stephen Heretick DENIED
- Counts II through IV also allege violations of RICO, 18 U.S.C. § 1962(c), but only against
- Count V alleges conspiracy to violate RICO, 18 U.S.C. § 1962(d) against Defendants. DENIED
Other Motions to Dismiss
- Count VI alleges unjust enrichment against Defendants. DISMISSED
- Count VII seeks a constructive trust against all Defendants and all Nominal Defendants. DISMISSED
- Count VIII Breach of Fiduciary Duty and Aiding and Abetting Said Breach DISMISSED
Plaintiff Overcame Rooker-Feldman Doctrine to keep case in Federal Court in Eastern Pennsylvania
In their Motions to Dismiss, Defendants argued that Rooker-Feldman [ see Rooker-Feldman definition below] prevents the Court from exercising jurisdiction over Plaintiff’s claims. Defendants contend that this case is essentially an improper federal appeal of the Virginia state court’s decision to grant the SSA transfer petitions".
The Court disagreed:
"Plaintiff alleged a complicated, years-long scheme meant to take advantage of annuitants and subvert the review of state-court judges. These allegations raise claims wholly separate from an appeal of the state-court orders, and present more for this Court to consider than a plain lie or fraud on the state court". [Larry G. Dockery et al. v Stephen E. Heretick et al. and New York Life Insurance Company, et al.Case 2:17-cv-04114-MMB Document 108 Filed 05/14/19 Page 21 ]
Noerr Pennington Doctrine Does Not Shield Stephen Heretick, Says Court
The Court also reasoned "Plaintiff’s claims are not based solely on Heretick’s petitioning activities before the Virginia state court. Rather, the Second Amended Complaint alleges that Heretick took part in an ongoing scheme meant to induce annuitants to sell their SSA (structured settlement annuity) streams on unfavorable terms, strip annuitants of their rights to independent counsel, and fashion transfer petitions in such a way that they would be granted despite procedural safeguards. The Noerr-Pennington doctrine therefore does not shield Heretick from Plaintiff’s claims
What is the Rooker-Feldman doctrine?
The Rooker–Feldman doctrine is a rule of civil procedure enunciated by the United States Supreme Court in two cases, Rooker v. Fidelity Trust Co., 263 U.S. 413 and District of Columbia Court of Appeals v. Feldman, 460 U.S. 462. The doctrine holds that lower United States federal courts—i.e., federal courts other than the Supreme Court—should not sit in direct review of state court decisions unless Congress has specifically authorized such relief. In short, federal courts below the Supreme Court must not become a court of appeals for state court decisions. The state court plaintiff has to find a state court remedy, or obtain relief from the U.S. Supreme Court [Wikipedia]
Unlike what has happened in Dockery, structured settlement secondary market defendants have previously been successful in arguing Rooker Feldman doctrine in Taylor v Structured Asset Funding et al., Lafontant v Imperial Structured Settlements et al to remove an action brought in federal court to state court.
In denying defendants' motion to dismiss the RICO claims the court reasoned " Plaintiff alleges that he was the beneficiary of an SSA (structured settlement annuity) and that, as a result of a scheme amongst Defendants, he entered into an unfair settlement on terms substantially worse than he would have obtained if he had access to independent financial or legal advice. Therefore, Plaintiff has alleged (1) a concrete loss, i.e., the difference between a fair settlement and an unfair settlement, and (2) that the scheme caused this loss through a process in which Defendants induced Plaintiff to settle without financial or legal advice and obtained judicial approved in a manner that guaranteed a lack of meaningful judicial review. This suffices for purposes of RICO standing. Read Judge Baylson's Memorandum Decision denying motions to dismiss Dockery
Last month the judge in the Terrence Taylor case recused himself following a motion made by Genex Capital Corporation on behalf of its investors. Our understanding is that the Portsmouth judiciary felt that any decision made by any one of them would be heavily scrutinized in light of the allegations in the Dockery case. Taylor's case, which has now been pending for over 4 years, will have to wait until a new judge is appointed from outside the Portsmouth circuit. Stephen Heretick was the lawyer representing the purchasers of structured settlement payment rights from Taylor that are the subject of that lawsuit.
The outcome of all of these lawsuits should be of interest to investors who have been sold scam labeled secondary market annuities.