IN THE SUPREME COURT OF FLORIDA Case No. SC08-

Transcription

1 IN THE SUPREME COURT OF FLORIDA Case No. SC08- On Petition for Discretionary Review of A Decision of the Fifth District Court of Appeal, Fifth District Case Nos. 5D , 5D , 5D , 5D STATE OF FLORIDA, Office of the Attorney General, Petitioner, v. BRADENTON GROUP, INC., et al., Respondents. PETITIONER S BRIEF ON JURISDICTION BILL McCOLLUM ATTORNEY GENERAL Scott D. Makar (FBN ) Solicitor General Louis F. Hubener (FBN ) Chief Deputy Solicitor General Courtney Brewer (FBN ) Deputy Solicitor General Office of the Attorney General PL-01, The Capitol Tallahassee, FL (850) Fax (850)

2 TABLE OF CONTENTS TABLE OF CONTENTS...i TABLE OF AUTHORITIES...ii STATEMENT OF THE CASE AND FACTS...1 SUMMARY OF ARGUMENT...3 ARGUMENT...4 I. The Decision Below Creates Express and Direct Conflict....4 A. The decision conflicts with holdings of this Court and the Second District regarding collateral estoppel...4 B. The decision conflicts with this Court s decision in Bradenton II by precluding certain predicates for RICO liability...7 II. The Decision Below Expressly Affects a Class of Constitutional Officers Because it Gives State Attorneys as a Class the Power to Estop Civil Forfeiture Actions by the Attorney General....8 III. Review is Appropriate Because Jurisdiction Exists and the Matters Presented Pose Serious Operational and Financial Impacts on the Office of the Attorney General....9 CONCLUSION...10 CERTIFICATE OF SERVICE...12 CERTIFICATE OF COMPLIANCE...12 APPENDIX...Tab A i

3 TABLE OF AUTHORITIES Cases Bradenton Group, Inc. v. Dep't of Legal Affairs, 701 So. 2d 1170 (Fla. 5th DCA 1997)...1 Bradenton Group, Inc. v. State, 32 Fla. L. Weekly D2665 (Fla. 5th DCA Nov. 9, 2007)...passim Dep t of Legal Affairs v. Bradenton Group, Inc., 727 So. 2d 199 (Fla. 1998)...passim Gordon v. Gordon, 59 So. 2d 40 (Fla. 1952)...3, 5 Krug v. Meros, 468 So. 2d 299 (Fla. 2d DCA 1985)...3, 6 Lamar v. Pondella Hall for Hire, Inc., 8 Fla. L. Weekly Supp. 830 (Fla. 9th Cir. Oct. 1, 2001)...4 Marks v. State, 937 So. 2d 1211 (Fla. 4th DCA 2006)...8 Parker Tampa Two, Inc. v. Somerset Dev. Corp., 544 So. 2d 1018 (Fla. 1989)...9 State v. Bowman, 437 So. 2d 1095 (Fla. 1983)...9 Vest v. Travelers Ins. Co., 753 So. 2d 1270 (Fla. 2000)...8 Statutes 18 U.S.C U.S.C. 1961(1)...2 ii

4 16.01(4), (5), & (7), Fla. Stat (2007) , Fla. Stat. (1991) (3), Fla. Stat. (1991)...1 Constitutional Provisions Article IV, Article V, 3(b)(3)...9 iii

5 STATEMENT OF THE CASE AND FACTS In November 1995, Petitioner, the Office of the Attorney General, brought a civil action against Respondents, Bradenton Group, Inc., Pondella Hall for Hire, Inc., Eight Hundred, Inc., and Philip Furtney (collectively Bradenton ) seeking an injunction and forfeiture of real property and proceeds resulting from Bradenton s bingo-related operations. Bradenton Group, Inc. v. State, 32 Fla. L. Weekly D2665, D2665 (Fla. 5th DCA Nov. 9, 2007) (Bradenton III). The complaint asserted that the operations of these for-profit companies violated section , Florida Statutes (1991) (the Bingo Statute ), constituted a pattern of racketeering activity under section (3), Florida Statutes (1991), and were illegal lotteries giving rise to RICO liability. Id. The trial court entered a temporary injunction prohibiting Bradenton from conducting bingo games, later granting Bradenton s motion to require a $1.4 million injunction bond. Both the Fifth District 1 and this Court affirmed this decision on appeal. 2 This Court also held that routine violations of the Bingo Statute did not constitute racketeering activity subject to RICO liability. 3 1 Bradenton Group Inc. v. Dep t of Legal Affairs, 701 So. 2d 1170, 1180 (Fla. 5th DCA 1997) (Bradenton I). 2 See Dep t of Legal Affairs v. Bradenton Group, Inc., 727 So. 2d 199, 202 (Fla. 1998) (Bradenton II). 3 Id. 1

6 The case was then remanded to the trial court. Bradenton III, 32 Fla. L. Weekly at D2666. Bradenton filed motions to dismiss and for summary judgment, after which the Attorney General filed a second amended complaint in July That complaint changed the dates of the predicate acts, alleged additional predicate acts, and added additional defendants to various predicate acts. Id. In its revised complaint, the Attorney General contended that Bradenton conducted lotteries and gambling games, in violation of 18 U.S.C. 1955, which prohibits illegal gambling businesses, and that lottery violations other than bingo occurred. The trial court denied Bradenton s summary judgment motion, accepting that Bradenton II did not foreclose the theory that Florida s RICO statute includes as a predicate offense any conduct defined by 18 U.S.C. 1961(1) as racketeering, and that 1961(1) includes any act under 18 U.S.C. 1955, which prohibits an illegal gambling business. Bradenton III, 32 Fla. L. Weekly at D2666. Following a two-week trial in February 2005, the jury found Bradenton had engaged in racketeering activity. Id. The amended final judgment, order on posttrial motions, and a consolidated order on the injunctions and damages held that Bradenton engaged in racketeering activity, was not entitled to damages under the injunction, and forfeited its property interests. Id. The trial court remitted the damages amount assessed against Bradenton to $10,000. Id. On appeal, the Fifth District reversed, holding that collateral estoppel barred 2

7 the Attorney General s action. Id. at D2667. The Fifth District also held that because the underlying predicate offenses in the second amended complaint in essence were violations of the Bingo Statute, the RICO action could not stand under this Court s decision in Bradenton II. Id. The court concluded that the trial court on remand should consider Bradenton s entitlement to damages resulting from the temporary injunction. Id. SUMMARY OF ARGUMENT The Fifth District applied collateral estoppel to bar the Attorney General s action, even though several of the issues in the instant case were not actually litigated in the case upon which collateral estoppel was based. In doing so, the Fifth District s decision directly conflicts with this Court s decision in Gordon v. Gordon, 59 So. 2d 40 (Fla. 1952), and the Second District s decision in Krug v. Meros, 468 So. 2d 299 (Fla. 2d DCA 1985), which held that collateral estoppel applies only to matters actually adjudicated in a prior litigation, and not to matters that might have been, but were not actually litigated. The Fifth District s decision also creates express and direct conflict because it misapplied this Court s decision in Bradenton II, 727 So. 2d 199 (Fla. 1998). The specific grounds for this Court s decision in Bradenton II were that routine violations of Florida s Bingo Statute could not form the basis for RICO violations predicated on the lottery provisions. On the basis of this holding, the Fifth District 3

8 held that RICO could also not be predicated on violations of a federal statute. The Fifth District s broad interpretation of this Court s holding in Bradenton II results in a misapplication of and express and direct conflict with this Court s decision because Bradenton II expressed no holding to so severely constrain the application of RICO laws. The decision also expressly affects a class of constitutional or state officers. By holding that the Attorney General is estopped by the independent actions of a state attorney, a separate constitutional officer, the Fifth District has granted to state attorneys as a class the extraordinarily broad power to take actions that estop the Office of the Attorney General from performing its constitutionally and statutorily defined roles, including enforcing gambling and racketeering laws. Moreover, given the important legal and public policy reasons presented, and the tremendous adverse impact the Fifth District s decision may have on the Office of the Attorney General, this Court should accept review. ARGUMENT I. The Decision Below Creates Express and Direct Conflict. A. The decision conflicts with holdings of this Court and the Second District regarding collateral estoppel. First, express and direct conflict exists due to the Fifth District s decision that the Attorney General was collaterally estopped from bringing the instant action on the basis of a related circuit court case, Lamar v. Pondella Hall for Hire, 4

9 Inc., 8 Fla. L. Weekly Supp. 830 (Fla. 9th Cir. Oct. 1, 2001). There, the state attorney in the Ninth Judicial Circuit charged two of the Respondents 4 for their operations of a public gambling house and illegal lotteries based on their 1993 bingo violations in Orange and Osceola Counties. Bradenton III, 32 Fla. L. Weekly at D2668 n.3. In Lamar, the Ninth Circuit granted the defendants motion for summary judgment, finding that the conduct of bingo games could not form the basis for racketeering violations in accordance with Bradenton II. The Fifth District held that collateral estoppel applied in the instant case because Lamar represented a final adjudication of the overriding, dispositive issue: whether bingo violations could form the predicate for RICO forfeiture. Id. at D2667. The Attorney General argued that the requirements of collateral estoppel were not met, but the Fifth District held that the Lamar judgment was not required to address every permutation of every argument by which the State could classify bingo offenses as RICO violations. Id. This holding conflicts with this Court s decision in Gordon v. Gordon, 59 So. 2d 40 (Fla. 1952), which set forth a clear standard for collateral estoppel (estoppel by judgment): If the second suit is bottomed upon a different cause of action than that alleged in the prior case estoppel by judgment comes into play and only those matters actually litigated and determined in the initial action are 4 In Lamar, Respondents Philip Furtney and Pondella Hall for Hire, Inc. were the defendants; Bradenton Group, Inc. and Eight Hundred, Inc. were not charged. 5

10 foreclosed not other matters which might have been, but were not, litigated or decided. Id. at 43 (citations omitted) (emphasis added). The Court continued: the principle of estoppel by judgment is applicable where the two causes of action are different, in which case the judgment in the first suit only estops the parties from litigating in the second suit issues that is to say points and questions common to both causes of action and which were actually adjudicated in the prior litigation. Id. at 44 (emphasis added). Similarly, the Second District has held that the judgment in the first action only estops the parties or their privies from relitigating in the second suit issues common to both causes of action which were actually presented, fully litigated, and resolved in the first suit. Krug v. Meros, 468 So. 2d 299, 302 (Fla. 2d DCA 1985) (emphasis added). Despite this precedent, the Fifth District recognized that in the instant case there were permutation[s] and argument[s] not raised in Lamar, but still applied collateral estoppel. Bradenton III, 32 Fla. L. Weekly at D2667. The Fifth District also set forth that in the instant case two of the predicate acts considered by the jury concerned the same Orange and Osceola Counties bingo halls during the same timeframes at issue in Lamar. Id. at D2668 n.3. Despite the existence of additional predicate acts in the instant matter that were not at issue in Lamar, the Fifth District nonetheless concluded that the instant case was entirely estopped. Id. at D2667. Thus, the Fifth District decision conflicts with the above cited cases 6

11 because it applies collateral estoppel despite the presence of additional issues in the instant case not present in Lamar. This conflict on the issue of the scope of collateral estoppel creates discretionary jurisdiction in this Court. B. The decision conflicts with this Court s decision in Bradenton II by precluding certain predicates for RICO liability. Second, express and direct conflict exists due to a misapplication of this Court s decision in Bradenton II. In that case, this Court noted that it was unwilling to transform routine bingo offenses into lottery and RICO violations. Bradenton II, 727 So. 2d at 202. The Court therefore held that under the present statutory scheme violations of the bingo statute are not punishable under the lottery or RICO statutes. Id. In addressing the instant case, the Fifth District held that the State s attempt to create RICO liability for bingo violations through (1)(b) is directly contrary to the supreme court s decision and reasoning in Bradenton II. Bradenton III, 32 Fla. L. Weekly at D2667 (emphasis added). The Fifth District noted that it interpreted this Court s opinion to prohibit RICO violations predicated on the conduct of bingo games and violations of the Bingo Statute. Id. The Fifth District s holding misapplies this Court s decision. As the Fifth District noted, following Bradenton II the Office of the Attorney General amended the complaint against Bradenton and added violations of the federal statute prohibiting illegal gambling operations, which qualify as RICO predicates. The Fifth District has taken this Court s holding, which prohibits RICO violations 7

12 predicated on routine violations of the Bingo Statute, and applied it to RICO violations predicated on federal gambling law violations. This Court did not hold that a predicate offense for RICO violations could never occur during, at, or in connection with a bingo operation. Rather, it found that routine violations of Florida s Bingo Statute could not establish a RICO predicate. Bradenton II did not foreclose all RICO forfeiture actions on the facts of the present case, but foreclosed RICO liability predicated on the theories of the case presented then. Accordingly, the Fifth District applied this Court s holding so broadly as to result in express and direct conflict with this Court s decision. See Vest v. Travelers Ins. Co., 753 So. 2d 1270, 1272 (Fla. 2000) (conflict created by misapplication of this Court s precedent established jurisdiction under article V, 3(b)(3), Fla. Const.). II. The Decision Below Expressly Affects a Class of Constitutional Officers Because it Gives State Attorneys as a Class the Power to Estop Civil Forfeiture Actions by the Attorney General. Third, the Attorney General and the State Attorney are separate and distinct governmental entities. Marks v. State, 937 So. 2d 1211, 1214 (Fla. 4th DCA 2006) (the two offices are created under separate articles of the Florida Constitution. ). By holding that the state attorney s actions in Lamar estopped the Attorney General from proceeding against Bradenton, the Fifth District has expressly affected the powers of the state attorneys and granted them broad authority to estop RICO forfeiture actions (and potentially others) brought by the Attorney General. 8

13 Art. V, 3(b)(3), Fla. Const.; see State v. Bowman, 437 So. 2d 1095 (Fla. 1983) (jurisdiction exists where forfeiture actions of state attorneys affect state interests and make the Attorney General a party to such proceedings). Moreover, by considering these offices to be essentially one, the Fifth District s decision allows any adverse judgment against one state attorney or the Attorney General to estop other state attorneys who would proceed with similar actions in other jurisdictions. III. Review is Appropriate Because Jurisdiction Exists and the Matters Presented Pose Serious Operational and Financial Impacts on the Office of the Attorney General. Because express and direct conflict exists and a class of constitutional officers is expressly affected, this Court has discretion to review the Fifth District s decision. Art. V, (3)(b)(3), Fla. Const. Beyond the decision s impact in seriously blurring the scope of collateral estoppel and the application of RICO, the Fifth District here remanded the case for a determination of whether Bradenton is entitled to damages on the basis of a wrongful injunction. Bradenton III, 32 Fla. L. Weekly at D2668. But the temporary injunction in this case was never adjudicated on the merits at all, wrongful or otherwise. The court below disregarded the Attorney General s argument on this issue. Id. Precedent from this Court, however, requires that an injunction be dissolved on the merits before damages can be imposed, and only where sufficient evidence exists will dissolution on grounds other than the merits suffice for a determination that an injunction was wrongfully 9

14 entered. See Parker Tampa Two, Inc. v. Somerset Development Corp., 544 So. 2d 1018, (Fla. 1989). This error requires this Court s review. Finally, if not most importantly, this case carries with it the potential to have a ruinous impact on the Office of the Attorney General due to Bradenton s claimed entitlement to damages in excess of $7.1 million. See State v. Bradenton Group, Inc., Case No. CI (9th Cir. Ct. Order filed Aug. 7, 2005). The effect of the decision below is to chill an Attorney General from fulfilling his or her constitutional and statutory duties 5 as Florida s chief legal officer, placing this office in the objectionable position of foregoing prosecution of legitimately contested matters due to the actions of state attorneys. It also places the Attorney General in the objectionable position of foregoing prosecution of legitimately contested matters to avoid exposure to ruinous damages for injunctions obtained, here against for-profit entities engaged in unauthorized but purportedly not-forprofit bingo operations who now seek millions in alleged lost profits. CONCLUSION For all of the foregoing reasons, the Attorney General respectfully requests that this Court accept jurisdiction. 5 See Art. IV, 4, Fla. Const.; 16.01(4), (5), & (7), Fla. Stat. (2007) (Attorney General shall appear and attend to all civil or criminal suits or prosecutions in the state or federal court systems on behalf of the State of Florida). 10

15 Respectfully submitted, BILL McCOLLUM ATTORNEY GENERAL /s/ Louis F. Hubener Scott D. Makar (FBN ) Solicitor General Louis F. Hubener (FBN ) Chief Deputy Solicitor General Courtney Brewer (FBN ) Deputy Solicitor General Office of the Attorney General PL-01, The Capitol Tallahassee, FL (850) Fax (850)

16 CERTIFICATE OF SERVICE I certify that on this 24th day of January, 2008 a true copy of the foregoing Jurisdictional Brief was sent by U.S. Mail to: Thomas F. Egan Steven G. Mason 204 Park Lake Street 1643 Hillcrest Street Orlando, FL Orlando, FL /s/ Louis F. Hubener Attorney CERTIFICATE OF COMPLIANCE I HEREBY CERTIFY that this computer-generated brief is prepared in Times New Roman 14-point font, and complies with the font requirement of Rule 9.210(a)(2), Florida Rules of Appellate Procedure. /s/ Louis F. Hubener Attorney 12