Feed distributor's attempt to extricate itself from RICO lawsuit partially successful

By John Breslin | Jun 1, 2018

An animal feed distribution company has attempted to extricate itself from a lawsuit that alleges one of its senior executives and others were involved in a conspiracy to take control of the supply and sale of nutritional supplements for dairy cows.

SAN FRANCISCO – An animal feed distribution company has attempted to extricate itself from a lawsuit that alleges one of its senior executives and others were involved in a conspiracy to take control of the supply and sale of nutritional supplements for dairy cows.

California-headquartered JD Heiskell is accused of being responsible for the alleged actions of a company vice president, Todd Gearheart, and what the plaintiffs, supplement distributor Bunnett and related company Energy Feeds International, describe in court papers as co-conspirators.

Gearheart, whose company was one of the plaintiffs' largest customers, is accused with others of engineering a takeover of a new distribution network in a bid to edge the supplement firm out of business.

The plaintiffs filed the  lawsuit in March of 2017, claiming the "defendants engaged in a conspiracy in violation of the Racketeer Influenced and Corrupt Organization Act."

They accused Gearheart of involvement in a scheme "through activities including perjury, money laundering, mail and wire fraud, and bankruptcy fraud." JD Heiskell were accused of being ""vicariously liable" for the activities of its executive.

A previously filed complaint against JD Heiskell was dismissed by the U.S. District Court for the Northern District of California on the grounds that the plaintiffs did not reveal facts showing that Gearheart's alleged "conduct was of a kind he was hired to perform."

While the court did not explicitly state the plaintiffs could file an amended complaint, they  did so, and included new allegations against JD Heiskell and its alleged knowledge of the scheme.

JD Heiskell asked the court to strike the amended complaint on the grounds the plaintiffs were given no permission to file,  and to dismiss the core allegations. The court refused to strike the complaint against the company in its entirety, but did dismiss two counts under the civil RICO laws.

"Plaintiffs’ amended claims for relief will be considered on the merits and JDH’s motion to strike is denied," the court ruled. 

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