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1 IN THE UNITED STATES DISTRICT COURT
2 FOR THE WESTERN DISTRICT OF MICHIGAN
3 SOUTHERN DIVISION
4 CHRISTOPHER JEROME, ET AL.,
5 Plaintiffs, No. 1:16cv1116
6 vs.
7 JOEL FERGUSON, ET AL.,
8 Defendants.
9
Before:
10
THE HONORABLE JANET NEFF,
11 U.S. District Judge
Grand Rapids, Michigan
12 Thursday, February 9, 2017
Premotion Conference Proceedings
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APPEARANCES:
14
MR. MICHAEL A. COX
15 The Mike Cox Law Firm, PLLC
17430 Laurel Park Dr., N
16 Suite 120E
Livonia, MI 48152
17 734-591-4002
18 On behalf of the Plaintiff;
19 MR. JOHN D. PIRICH
MS. ANDREA L. HANSEN
20 Honigman Miller Schwartz and Cohn
222 N. Washington Square
21 Suite 400
Lansing, MI 48933
22 517-377-0712
23 On behalf of the Defendants Ferguson
Development, Joel Ferguson, Christopher Stralkowski, and Red
24 Cedar Investor, LLC;
25
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MR. MICHAEL S. BOGREN
2 Plunkett Cooney
950 Trade Centre Way
3 Suite 310
Kalamazoo, MI 49002
4 269-226-8822
5 MR. JAMES SMIERTKA
Office of City Attorney
6 City of Lansing
124 W. Michigan Avenue, 5th Fl.
7 Lansing, MI 48933
517-483-4572
8
On behalf of the Defendant Bernero;
9
MR. DEAN F. PACIFIC
10 Warner Norcross & Judd LLP
111 Lyon Street, NW
11 Suite 900
Grand Rapids, MI 49503
12 616-752-2424
13 MR. JEFFREY W. BRACKEN
Warner Norcross & Judd LLP
14 120 N. Washington Square
Suite 410
15 Lansing, MI 48933
517-679-7400
16
On Behalf of the Defendants LEAP, Robert
17 Trezise, Jr.;
18 MR. PATRICK A. FACCA
Facca Richter & Pregler P.C.
19 6050 Livernois
Troy, MI 48098
20 248-398-9900
21 On Behalf of the Defendants Clark
Construction and Charles Clark;
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MR. TODD J. OHLMS
2 Freeborn & Peters
311 South Wacker Drive
3 Suite 3000
Chicago, IL 60606
4 312-360-6000
5 On Behalf of the Defendants Kass,
Continental Development, Hallmark Campus Communities, and
6 Ferguson/Continental Lansing, LLC
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REPORTED BY: MS. KATHY J. ANDERSON, RPR, FCRR
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1 February 9, 2017
2 PROCEEDINGS, 2:29 p.m.
3 THE LAW CLERK: All rise. The court is now in
4 session. Please be seated.
5 THE COURT: A cast of thousands. Good afternoon,
6 everybody.
7 MR. COX: Good afternoon, Your Honor.
8 THE COURT: This is the date and time set for hearing
9 on a number of requests to file dispositive motions in case
10 number 1:16cv1116, which is Jerome, et al. versus Ferguson, et
11 al. Counsel, may I please have appearances.
12 MR. COX: Good afternoon, Your Honor. Michael Cox.
13 I'm here on behalf of the plaintiffs in this matter; that would
14 be Mr. Christopher Jerome, Mr. Leo Jerome, as well as the Story
15 Companies, LLC.
16 THE COURT: Thank you.
17 MR. COX: Thank you.
18 MR. OHLMS: Good afternoon, Your Honor. Todd Ohlms on
19 behalf of defendants Frank Kass, Continental Development,
20 Ferguson Continental, LLC and Hallmark Campus Communities.
21 THE COURT: Thank you. I'm going to ask you to speak
22 up so that I can hear you clearly, and that the court reporter
23 can hear you clearly.
24 MR. BOGREN: Good afternoon, Your Honor.
25 Michael Bogren on behalf of defendant Virgil Bernero.
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1 THE COURT: Thank you.
2 MR. FACCA: Good afternoon, Your Honor. Patrick Facca
3 on behalf of Charles Clark and Clark Construction.
4 THE COURT: Thank you.
5 MR. SMIERTKA: Good afternoon, Your Honor, Jim
6 Smiertka, City Attorney, co-counsel on behalf of Mayor
7 Virg Bernero.
8 THE COURT: Thank you.
9 MR. PIRICH: Good afternoon, Your Honor. John Pirich
10 on behalf of defendants Joel Ferguson, Christopher Stralkowski,
11 Ferguson Development and Red Cedar Investor, LLC.
12 THE COURT: And who are -- Mr. Pacific, who are you
13 here for?
14 MR. PACIFIC: Lansing Economic Area Partnership and
15 Mr. Robert Trezise.
16 MR. BRACKEN: I'm co-counsel with Dean Pacific. My
17 name is Jeff Bracken on behalf of LEAP and Mr. Trezise.
18 THE COURT: Thank you.
19 MS. HANSEN: I'm Andrea Hansen, co-counsel with John
20 Pirich on behalf of Joel Ferguson, Christopher Stralkowski,
21 Ferguson Development, and Red Cedar Investor, LLC.
22 THE COURT: Thank you all. Also present in the
23 courtroom this afternoon is my current extern, Wendi Price.
24 I would ask defense counsel, since most of you are not
25 familiar in our courtroom, we know Mr. Pacific, we know
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1 Mr. Bogren, I'm not too sure I have seen any of the others of
2 you. So because there are so many of you, when you get up to
3 speak, would you please state your name again so that the court
4 reporter can accurately record who is speaking.
5 There are a number of things that I want to talk about
6 before we launch into the real question of the premotion
7 conferences, and frankly, I'm not sure we are going to actually
8 get there this afternoon.
9 But the first thing I want to ask defense counsel is
10 on at least two of your requests for premotion conference, the
11 Continental defendant's request, I'm sorry, the LEAP
12 defendant's request and Mayor Bernero's request, you allude to
13 the potential that the plaintiffs might not have standing in
14 this case. And so my question to you is do you intend to raise
15 a standing argument? Mr. Bogren, are you here for LEAP?
16 MR. BOGREN: No, Your Honor, I'm here for Mayor
17 Bernero.
18 THE COURT: Mayor Bernero. Okay. And I'm summarizing
19 here based on my law clerk's memo, but one of the things you
20 lay out in your request for a premotion conference is that the
21 request for a proposal doesn't provide a legal basis for the
22 claims, et cetera. And then you say, "And the plaintiffs were
23 not even a party to the proposal." So is it your, are you
24 taking a position that they have no standing here?
25 MR. BOGREN: Yes, Your Honor.
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1 THE COURT: Okay. So that's going to be I presume at
2 some point perhaps a separate defense.
3 MR. BOGREN: Yes. It would certainly be a separate
4 argument in a 12(b)(6) motion. Well, yeah.
5 THE COURT: Okay. And can I assume that is also the
6 position taken by LEAP?
7 MR. PACIFIC: Mr. Pacific, Your Honor. Yes, I think
8 it's a standing issue to a certain extent. It's also a
9 substantive issue to a certain extent in the sense that there
10 is a question of as we are trying to determine do these
11 plaintiffs have any contract or property rights under this
12 process, are they -- if anybody can have it is one question but
13 do they have it in particular is a separate question. So I do
14 think it's a standing issue to a certain extent but it also
15 blends into a substantive question of do they have a property
16 right that they are being deprived of.
17 THE COURT: I see your point. Okay. That's one side
18 of the courtroom. Now, Mr. Cox, are you the drafter of the
19 complaint?
20 MR. COX: Judge, I am one of them, that's correct.
21 THE COURT: Okay.
22 MR. COX: For today's purposes I am --
23 THE COURT: Okay.
24 MR. COX: -- totally responsible.
25 THE COURT: I just want you to know that I spent an
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1 entire -- you don't have to stand up at this point -- I spent
2 an entire afternoon reading all 62 pages, and it was one of the
3 more painful afternoons of my life as a lawyer.
4 I'm not -- I'm not certain who you intended the
5 audience of this document to be, and I don't know exactly what
6 your intent was in drafting this complaint. But it is -- it
7 is full of repetitive, irrelevant, conclusory statements, many
8 of which I found a very difficult time having, seeing a
9 connection between the case and the paragraph. And, you know,
10 as I said, I made a lot of notes.
11 I couldn't figure out, for instance, why you kept
12 mentioning that Mr. Ferguson is the chairman of the board of
13 Michigan State University Trustees. I quit counting after I
14 numbered eight of those references. I couldn't figure out why
15 you kept saying that Mr. Ferguson has a lot of political power.
16 I quit counting after 13 of those references. I think that was
17 on about page 42. And so forth. There are just an enormous
18 number of paragraphs in this complaint that to me represent
19 just a stream of consciousness. They appear to be an
20 outpouring of emotion and anger and I don't know what other
21 emotion might be involved there.
22 But what they don't do is, particularly with the RICO
23 claims that you attempt to raise, what they don't do is set out
24 a comprehensive, careful statement of a RICO cause of action.
25 Now, I will grant you that RICO is a very complicated and
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1 difficult bit of legislation, and you probably have been around
2 long enough to know that when it was originally adopted by
3 Congress nobody even ever conceived of it as a civil cause of
4 action. It was always considered at the beginning to be a
5 criminal statute. And then there were some creative lawyers,
6 and God knows I love creative lawyers, who came up with the
7 civil way to pursue RICO.
8 But it remains a very, very difficult cause of action
9 to plead and to prove.
10 And your complaint, Mr. Cox, just, I don't know how as
11 a defense lawyer one would ever answer this.
12 What do you say when you point out somewhere in here
13 that Mr. Bernero's wife and Mr. Ferguson's I forget what
14 language you used to impugn her integrity, but that his, his
15 companion when shopping together on Rodeo Drive on information
16 and belief. I mean how the heck do you answer something like
17 that? And what possible relevance can something like that
18 have?
19 I'm reluctant, frankly, to even consider the motions,
20 the Rule 12 motions by these defendants on this complaint
21 because I know what I'm going to get. And with five of them, I
22 know what you're going to get. You're going to get, and I
23 don't know all of these lawyers, but I know a couple of them
24 and they are very good, and they are good drafters, and they
25 know how to point out weaknesses. But what's going to get,
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1 what I'm going to get from them and what you're going to get
2 from them is something that is going to be a total disaster.
3 And trying to -- well, trying to answer their
4 motions, if I allow them to proceed with Rule 12 motions at
5 this time, I really, if I were in your shoes, I would, I don't
6 know what I would do. I would probably go south somewhere and
7 put my head in the sand. I mean this, this just is not --
8 this complaint just is not a workable document in this court.
9 Now, if you want to respond, that's fine. But I'm
10 telling you right now that what I'm going to require is an
11 amended complaint because -- and I'll tell you honestly, I had
12 one other occasion where this happened to me, although it was,
13 wasn't anywhere near 62 pages and I sent the lawyer out to do
14 an amended complaint and it came back almost as bad as the
15 first one. So I gave up. But I'm not going to give up here.
16 What you have to do here, and this is particularly,
17 particularly on the RICO counts, I think you have got to go
18 back to the statute, you have got to go back to cases like
19 Boyle versus U.S., and U.S. v Chance, and Paycom versus
20 Payment, you've got to go back to those cases and understand
21 what it takes to plead and prove a RICO claim.
22 You might have a valid cause of action here. I just
23 couldn't find it because there is so much junk in here. And
24 that's the only -- Well, I've thought of other ways to say it
25 but they aren't very polite. There is no excuse for this.
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1 There really isn't. I mean you've been a lawyer for a long
2 time; you have had very responsible positions, and I respect
3 that. But I just can't believe that you would have filed this.
4 In any event, you need to go back to the statute, you
5 need to go back to the case law, figure out what it takes to
6 plead and prove a RICO claim. And I'm sort of giving you a do
7 over. In a way I think I'm being kind of nice about that.
8 And one of the things that I'm going to instruct you
9 to do is when you rewrite this complaint, when you amend this
10 complaint, you should have at least one attachment, one
11 exhibit, and it should be in the form of a chart and that chart
12 should delineate each defendant and what exactly they did that
13 you claim specifically and concisely violate the elements of
14 the claims that you're making. And I don't mean to overlook
15 the other three claims.
16 You've a tortious interference. What's the other one?
17 You've got the two RICO claims, you've got a Fourth Amendment
18 due process claim, then you've got the two business, tortious
19 interference with business expectancy claims. You're going to
20 have to do that for every one of these counts if you're going
21 to keep all five.
22 You mix and match these defendants, if I counted
23 correctly there are 13 of them, in a way that I'm a very visual
24 person and I need to be able to look at a chart that tells me
25 I'm claiming these five defendants violated RICO because they
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1 engaged in an enterprise to commit a racketeering activity, and
2 that racketeering activity was. And I think you'll find the
3 case law and the statute itself will be of great benefit in
4 what you have to plead. You have to be very specific in your
5 pleading.
6 I really didn't intend this to be a lecture but I
7 guess it sort of turned out that way. But I've already spent
8 so much time with your complaint and trying to figure out what
9 you were thinking about.
10 I'm sorry. If you want to respond, now is your
11 opportunity to do it.
12 MR. COX: Judge, if the Court wants an amended
13 complaint, that's what we will do.
14 THE COURT: I don't want you to just amend the
15 complaint. I want you to do it right. I want you to do it in
16 a way that complies with the statute and the case law. And
17 once you have done that, then I'm going to ask defense counsel
18 to, I'm going to give you 14 days to do it, I'm going to ask
19 defense counsel within 14 days of when you file your amended
20 complaint to tell me whether they wish to either amend their
21 motion, their request for a premotion conference or keep them
22 as they are, which I would hope there would be an amendment
23 because if you are more specific, if you are properly specific
24 and particular in your pleading, I think they will almost have
25 to amend. But if they don't, if they want to remain with
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1 their -- the second part of that would be if they should tell
2 me if they want to simply leave the responses or the requests
3 as they are, and then sometime after that, which will be in
4 about 30 days, we will come back here and we will conduct a
5 proper premotion conference discussion on these requests for
6 the ability, the right to file dispositive motions.
7 MR. COX: Judge, I have a personal family issue the
8 last week in February. Is it possible I could move it seven
9 more days?
10 THE COURT: Say again, please.
11 MR. COX: I have a family potential conflict the last
12 week in February. Could we move it to two weeks from today,
13 would be the 23rd, could I move it to the 2nd or the 9th of
14 March?
15 THE COURT: Sure. Yes, I mean there is nothing magic
16 about those dates.
17 MR. COX: Just err on the side of caution. Could we
18 have 28 days then until March 9th?
19 THE COURT: I'm sorry?
20 MR. COX: 28 days until March 9th?
21 THE COURT: Sure.
22 MR. COX: Thank you.
23 THE COURT: Anything further from defense counsel this
24 afternoon?
25 MR. BOGREN: No, Your Honor.
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1 MR. OHLMS: No, Your Honor.
2 MR. PIRICH: No, Your Honor.
3 MR. SMIERTKA: No, Your Honor.
4 MR. PACIFIC: No, Your Honor.
5 THE COURT: Okay. Thank you. All right. I will --
6 thank you. I'll look forward to hearing from you further and
7 we will -- I don't know, my case manager is on vacation this
8 week so I don't know what kind of a date he may provide for a
9 continued premotion conference date.
10 Kathie, did you have anything, any other questions or
11 comments? Do we need anything else for the order?
12 THE LAW CLERK: No, I don't believe we need anything,
13 and an order will issue.
14 THE COURT: Okay. There will be an order out either
15 today or tomorrow.
16 MR. PIRICH: Your Honor, if I could add one thing.
17 Depending upon Mr. Cox's filing his amended complaint, and I
18 think March 9th was the date that you used, I believe you said
19 we have 14 days thereafter to file an amended request. I would
20 only suggest that the first week of April not be used for
21 conference date because I have grandchildren that I'm taking to
22 Mexico and I don't want to be divorced or lose my
23 grandchildren.
24 THE COURT: Good for you. No, that's fine.
25 MR. PIRICH: Thank you.
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1 THE COURT: Let Kathie know what dates are
2 problematic. She can plug those into the order. As I say, I
3 have plenty to do between now and the end of April, so whatever
4 works for you guys is fine with me. Okay.
5 MR. PIRICH: Thank you, Your Honor.
6 THE COURT: We are adjourned.
7 THE LAW CLERK: Court is adjourned.
8 (Proceedings concluded, 2:53 p.m.)
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1 REPORTER'S CERTIFICATE
3 I, Kathy J. Anderson, Official Court Reporter for the
4 United States District Court for the Western District of
5 Michigan, appointed pursuant to the provisions of Title 28,
6 United States Code, Section 753, do hereby certify that the
7 foregoing is a full, true and correct transcript of the
8 proceedings had in the within entitled and numbered cause on
9 the date hereinbefore set forth; and I do further certify that
10 the foregoing transcript has been prepared by me or under my
11 direction.
12
13
14 /s/ Kathy J. Anderson
15 Kathy J. Anderson, RPR, FCRR
16 U.S. District Court Reporter
17 412 Federal Building
18 Grand Rapids, Michigan 49503
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