The Complaint likewise does not differentiate allegations against each Defendant, nor does it inform Defendants separately o f the allegations surrounding any alleged participation in the fraud. General statements that the enterprise caused Mortenson to make various false statements relating to his life experiences do not satisfy Twombly and Iqbal standards. Pleaded examples of how the enterprise marketed and promoted the Books also fail to satisfy appropriate pleading standards. Members ofthe enterprise cannot be expected to defend against Plaintiffs' claims, when each participant's role is only vaguely described, if at all. Furthermore, it is not clear what role Relin played in this matter, aside from coauthoring Three Cups of Tea, as all references to him are lumped together with Mortenson and Penguin, and any alleged wrongdoings attributed to him are clearly "labels and conclusions" or "naked assertions."
The Complaint's conclusory allegations referencing the legal clements ofa RICO enterprise fail. The "enterprise" element is not met. See U.S. v. Turkette, 452 U.S. 576, 583 (1981). Moreover, no RICO claim through an "associate-in fact enterprise" theory, is pleaded. Evidence supporting such a theory is missing from the Complaint.
As noted, the primary wrongdoing claimed is that Detendants allegedly knew ofthe Books' falsehoods and decided to write, promote, and sell them under the guise ofnonfiction. Those conciusory statements as to the Defendants' alleged intentional wrongdoings are included without reference to their factual context, much like the plaintiff in Iqbal. With the exception of Mortenson, upon whose life experiences the Books are based, this Court cannot give credit to such unsupported accusations. The Complaint does not satisfy RICO elements. The RICO claims are not plausible and fail.
B. Counts V and VI - Fraud and Deceit
A common law fraud pleading must allege nine elements: "(1) a representation; (2) its falsity; (3) its materiality; (4) the speaker's knowledge of its falsity or ignorance of its truth; (5) the speaker's intent that it should be acted upon by the person and in the manner reasonably contemplated; (6) the hearer's ignorance of its falsity; (7) the hearer's reliance upon its truth; (8) the right o f the hearer to rely upon it; and (9) the hearer's consequent and proximate injury or damage" caused by their reliance on the representation. May v. ERA Landmark Real Estate of Bozeman, 15 P.3d 1179, 1182 (Mont. 2000). The heightened pleading standard of Rule 9(b) must be met. See Bly-Magee v. California. 236 F.3d 1014, 1018 (9th Cir. 2001); Iiraunhofer v. Price, 594 P.2d 324, 328 (Mont. 1979).
Under Montana law, deceit may be proven if "[0]ne ... willfully deceives another with [the] intent to induce that person to alter the person's position to [his] injury or risk." Mont. Code Ann. § 27-1-712. Deceit can be either: (a) suggesting a falsity as a fact "by one who does not believe it to be true;" (b) asserting "as a fact (something] which is not true by one who has no reasonable ground for believing it to be true;" (c) suppressing "a fact by one who is bound to disclose it or who gives information of other facts that are likely to mislead for want of communication ofthat fact; or (d) a promise made without any intention of performing it. Id. Additionally, "[0)ne who practices ... deceit with intent to defraud the public or a particular class of persons is considered to have intended to defraud every individual in that class who is actually misled by the deceit. Id. Deceit is essentially grounded in fraud, therefore, Rule 9(b)'s heightened pleading standard applies. Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1103-05 (9th Cir.2003).
The fraud and deceit claims incorporate allegations from the RICO claims. Formulaic recitations ofelements offraud and deceit are added.
Plaintiffs assert that the fraud and deceit claims meet Rule 9(b)'s specificity requirements. Not so. The fraud pleadings in point of fact are weakened by incorporation ofthe flawed RICO allegations. Moreover, the Complaint fails to specify what representation the Plaintiffs relied upon or the materiality ofthat representation. Plaintiffs are not entitled to rely on general allegations of purported lies within the Books' content. At a minimum, Plaintiffs must show that they relied on some particular statement by the Defendants made outside the text of the Books. A formulaic statement of the elements of fraud in this instance is insufficient. Here, important, and indeed, necessary, facts supporting the elements aremlssmg. The fraud claim (CountV) as pleaded is not plausible and must be dismissed. The same conclusion applies to the deceit claim (Count VI), which likewise lacks factual support allowing it to continue.
