The massive federal lawsuit over Erie entrepreneur Samuel P. "Pat" Black III's dwindling fortune includes allegations of family intrigue and lavish spending, but, at this early stage in the case, one of the main matters is more technical than dramatic.
Where will the case be tried?
Will it stay in U.S. District Court in Erie?
Or will it return to Erie County Common Pleas Court, where Black filed the full civil complaint in April before it was transferred to federal court in May?
The main defendant in the case, Sumi James-Black, whom Black adopted as his daughter in 2019, when she was 44 and he was 77, is pushing a strategy that could get the case sent back to Common Pleas Court.
James-Black is claiming that Pat Black has no evidence to support his claims that she and others defrauded him of at least $200 million from about 2017 to 2022 in a manner that amounted to civil violations of the Racketeer Influenced and Corrupt Organizations Act, the federal law designed to dismantle organized crime.
The RICO claims led to the transfer of the case to federal court. With those claims gone, the case could go back to Common Pleas Court to litigate the non-federal claims, such as allegations of unjust enrichment and breach of fiduciary duty.
A fight over civil claims of racketeering
James-Black's lawyers, John Mizner and Joseph Caulfield, have been fighting for dismissal of the RICO claims since they filed their first objections to the lawsuit, in September. The lawyers renewed their efforts on Tuesday, when, in asking U.S. District Judge Susan Paradise Baxter to toss the entire case, they argued that the RICO claims are particularly deficient.
Mizner and Caulfield faulted Black's lawyers for failing to file what is known as a RICO case statement to clarify their allegations. In a RICO case statement, a plaintiff making a RICO claim must detail each defendant and what the plaintiff says is each's misconduct, among other things.
A RICO case statement, Mizner and Caulfield argue in a filing docketed on Tuesday, "is a critical component of the Court's ability to stop a Plaintiff from improperly filing a claim that appears on its face to label their opponent a racketeer in the public eye."
The filing was in response to Black's contention that Baxter should decline to toss the case, including the RICO claims. In opposing the dismissal requests, one of Black's lawyers, Elliot Segel, said in a filing on Oct. 28 that Black's lawsuit is legally sufficient to proceed — including on the RICO claims.
Segel said Black has yet to submit a RICO case statement because the lawsuit was initially filed in Common Pleas Court, where a RICO case statement is not required. Segel also said the 327-page lawsuit, with 526 pages of exhibits, adequately details the RICO claims, but that Black's legal team will file a RICO case statement "in whatever time and manner the Court may instruct, if the Court deems such to be necessary."
Legal barbs fly as parties await hearing date
Baxter has yet to set a hearing on the dismissal requests. Also asking for the case to be tossed are the two other defendants, whom the suit claims conspired with James-Black to defraud Black.
The other defendants are the Erie law firm of Knox, McLaughlin, Gornall & Sennett, which represented Black and his companies; and Nicole Buzzard, a certified public accountant who was vice president of management and accounting at Erie Management Group. It runs Black's businesses, including the Hero BX biofuels plant on East Lake Road.
Black, 82, remains the head of Erie Management Group. James-Black, 49, was a high-level officer at the business — including its interim CEO and chief operating officer — for about seven years until Black fired her in August 2022.
Black is also president of Black Insurance Group, the insurance agency his father, Samuel P. Black Jr., started on the way to leaving behind a personal fortune of more than $318 million when he died at 99 in 2001.
Pat Black's fraud lawsuit is one of the largest filed in Erie County history. A resolution could take years if Baxter declines to dismiss the case outright. The lawyers for Black and James-Black show no signs of softening their stances based on how they are criticizing one another in the dispute over the RICO case statement.
In arguing against dismissal over the lack of the RICO case statement, Segel, one of Black's lawyers, said in the Oct. 28 filing that James-Black's position "mischaracterizes the nature of this non-filing" and "lacks applicable caselaw support."
In their response filed on Tuesday, Mizner and Caufield, James-Black's lawyers, called the "ongoing failure" to file the RICO case statement "inexcusable."
Original Article by: Ed Palattella, Erie Times News. Contact epalattella@timesnews.com or 814-870-1813. Follow him on X @ETNpalattella.