A goverment that is big enough to give you all you want is big enough to take it all away. -- Barry Goldwater
excerpted from Manual for Complex Litigation, 1995 ed.
33.8 Civil RICO fn1273
.82 Defining and Managing the Issues
.83 Related Litigation
.85 Final Pretrial Conference
The pleadings play an especially important role in civil RICO fn1274 cases. Because RICO applies to a broad range of conduct, often occurring over an extended period of time and involving a large number of people or entities, the complaint will often assert numerous claims against numerous parties. Since most RICO complaints allege underlying acts of mail, wire, or securities fraud, which must be pleaded with particularity under Fed. R. Civ. P. 9(b), the complaint may be lengthy and complex.
The strict pleading requirements peculiar to RICO (discussed further below) may result in extensive motion practice directed at dismissing all or parts of the complaint. Decision of these motions can significantly affect the scope of the litigation; eliminating claims will not only obviate discovery and other proceedings related to the claims themselves, but may remove the jurisdictional predicate for supplemental state law claims, fn1275 allowing them to be dismissed as well (usually without prejudice). fn1276
The court should therefore adopt procedures for RICO cases designed to test the sufficiency of the pleadings early on, before other significant litigation activity commences. Some courts have standing orders requiring parties alleging RICO claims to file RICO case statements, amplifying and clarifying the allegations in the pleading. In courts that do not, the court may adopt a case order requiring submission of such statements before responsive motions or pleadings are due. fn1277
These statements, together with a careful reading of the complaint, will help narrow the issues and allow early identification of claims insufficient on their face, which may be dismissed (with or without prejudice) before significant time and effort is spent on them. The length and complexity of RICO complaints may justify granting defendants additional time to respond. The court should consider entering an order immediately following assignment of the litigation suspending the time for defendants to respond until after the initial conference. At the conference, counsel and the court may be able to narrow the issues, avoiding unnecessary motion practice. At the conclusion of the conference or shortly thereafter, the court should set a schedule for filing motions and opposing and reply briefs, as well as responsive pleadings.
33.82 Defining and Managing the Issues
Efficient management of RICO litigation requires that the disputed legal and factual issues and the precise statutory violations alleged be identified and, where possible, narrowed, as early as possible. This is made difficult by the complexity of the RICO statute and the fact that the terms it employs, such as "person," "enterprise," "conduct," and "pattern," have been given varying and sometimes confusing interpretations. Reference to the four categories of unlawful conduct specified in 18 U.S.C. 1962 will assist the process:
1. Section 1962(a): Investment of income. This subsection makes it unlawful for "any person who has received any income derived . . . from a pattern of racketeering activity . . . to invest . . . any part of such income . . . in acquisition of an interest in, or the establishment or operation of, any enterprise . . . ."
Most courts have ruled that the only injury compensable under 1962(a) is that resulting from a defendant's investment of racketeering income. fn1278 Therefore, claims under 1962(a) alleging injury resulting from racketeering activity alone, rather than from the investment of income so derived, may be subject to early dismissal.
2. Section 1962(b): Interest/control.
This subsection makes it unlawful for a person "to acquire or maintain . . . any interest in or control of any enterprise" through a pattern of racketeering activity. Most courts have required that the alleged injury to the plaintiff proximately result from the defendant's acquisition of an interest in, or control over, an enter-prise. fn1279 If the complaint does not allege injury arising specifically from such an acquisition, 1962(b) claims may be subject to dismissal.
3. Section 1962(c): Conduct of an enterprise.
Most civil RICO claims are filed under 1962(c), which makes it unlawful to "conduct or participate, directly or indirectly, in the conduct" of an enterprise through a pattern of racketeering activity. The four primary elements of this subsection, as set out by the Supreme Court, are "(1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity." fn1280
The interpretation of the first three of these requirements (the fourth is relatively uncontroversial) is shrouded in considerable uncertainty, only some of which has been resolved by the Court. The judge should therefore give early attention to determining the definitions applied in the circuit.
* "Conduct." The Supreme Court has ruled that liability for "participat[ing]" in the "conduct" of the enterprise extends only to those who "have some part in directing [the enterprise's] affairs," adopting the "operation or management" test articulated by the Eighth Circuit. fn1281 The defendant need not be in upper management; liability may extend to lower-level employees under the direction of upper management, persons associated with the enterprise who exert control over it (for example, by bribery), and outsiders who participate in the operation or management of the enterprise. fn1282
Nevertheless, the allegations against at least some defendants, particularly outsiders (such as accountants, attorneys, or lenders), may fail to satisfy the conduct requirement. In some cases, a Rule 12 motion or a motion for summary judgment may be an appropriate vehicle to resolve this issue. fn1283
* "Enterprise" and "Person." Most courts have ruled that 1962(c) was designed to punish only the persons who run an enterprise illegally and not the enterprise itself, which often will be an innocent victim of the racketeering activity. fn1284 Therefore, 1962(c) requires pleading and proof of two separate entities a "person" and an "enterprise" with only the "person" being liable for damages. fn1285
Three different theories have been used to attempt to reach the assets of a corporate enterprise despite this requirement: (1) affiliated corporations; (2) vicarious liability; and (3) association-in-fact enterprises.
Circuit law has been divided on these issues. Some courts have ruled that a subsidiary is an "affiliated corporation," which conducts the affairs of its separate parent corporation, and thus can be held liable for damages under 1962(c). fn1286 By contrast, all of the federal appeals courts that have considered the issue have held that an employer alleged to be the RICO "enterprise" cannot be held vicariously liable under 1962(c) for the acts of its employees. fn1287
Note, however, that Claims alleging the existence of "association-in-fact enterprises" pose a more difficult problem, and may not be appropriate for summary resolution under Rule 12(b)(6) or 56. RICO provides that an enterprise may be composed of "any union or group of individuals associated in fact although not a legal entity." fn1288
A RICO enterprise must, however, be a continuing unit that has some type of organization and constitutes an entity separate and apart from the alleged pattern of racketeering; fn1289 claims alleging association-in-fact enterprises have been dismissed on pretrial motions for failure to allege the requisite continuity, or for failure to identify an enterprise that is more than a corporate entity and its agents conducting their regular business. fn1290
* "Pattern." The Supreme Court's most recent attempt to define the "pattern" requirement was in H.J. Inc. v. Northwestern Bell Telephone Co., in which it ruled that proving a pattern requires showing that the racketeering acts "are related" and "amount to or pose the threat of continued criminal activity." Fn1291 The Court defined "related" acts as those "that have the same or similar purposes, results, participants, victims, or methods of commission, or otherwise are interrelated by distinguishing characteristics and are not isolated events." fn1292
The Court defined "continuity" to require either "a closed period of repeated conduct" or "past conduct that by its nature projects into the future with a threat of repetition." fn1293 Whether the acts "establish a threat of continued racketeering activity depends on the specific facts of each case." fn1294
Following H.J., courts have dismissed 1962(c) claims in two overlapping areas for failure to satisfy the pattern requirement. First, where the allegations involve completed ("closed-ended") conduct lasting twelve months or less, and where there is no threat of future criminal conduct, courts have dismissed the claims on motions to dismiss or for summary judgment. fn1295
Second, courts have held that claims involving only a single (or a few) victims cannot pose a threat of long-term criminal conduct, and should be dismissed even where the conduct complained of lasted for many months or even years. fn1296
In other cases, courts have applied a multifactor test to determine whether a pattern of racketeering activity has been pleaded or proved. The factors considered typically include the nature, number, and variety of predicate acts; the duration or time span involved; fn1297 the number of victims; the number of separate transactions involving unlawful conduct; and the presence of distinct injuries. fn1298
4. Section 1962(d): Conspiracy.
This subsection makes it unlawful to conspire to violate the previous three. To state a claim under 1962(d), a plaintiff must plead that the defendant agreed to join the conspiracy, agreed to commit predicate acts, and knew that those acts were part of a pattern of racketeering activity. fn1299 The agreement to commit predicate acts, standing alone, is not enough. fn1300
There is a circuit split on two important issues under 1962(d). First, some courts have held that a RICO conspiracy claim may be stated where a plaintiff is injured by any acts that further a RICO conspiracy, fn1301 while others require that the acts complained of all be predicate acts as defined by 1961. fn1302 Second, some courts require that a defendant agree to commit at least two predicate acts, fn 1303 while others hold that it is sufficient if a defendant agreed that some member of the enterprise would commit the predicate acts. fn1304
* Additional issues.
The following issues may also arise in RICO litigation:
- standing: whether a RICO plaintiff has the necessary standing to sue may be appropriate for resolution under Rule 12 or 56; fn1305
- proximate cause: whether a claimed injury is sufficiently related to the claimed RICO violation may be appropriate for resolution under Rule 12 or 56; fn1306
- propriety of damage claims: some categories of damages, such as claims for personal injury, may not be allowable under RICO; fn1307
- statute of limitations: although the appeals courts have divided on when a RICO claim accrues, fn1308 the issue may be appropriate for early resolution;
- availability of equitable relief: although the RICO statute provides for certain equitable remedies, fn1309 these may not be available to private litigants; fn1310
- arbitration: since an arbitration clause in an agreement between the parties will be enforced by a federal court to require arbitration of RICO claims, fn1311 the court should determine early on whether such an agreement existsthe right to arbitrate may be lost if not promptly invoked; fn1312 and
- miscellaneous defenses: in some RICO cases, dismissal may be appropriate under theories of preemption, fn1313 abstention, fn1314 act of state, fn1315 primary jurisdiction, fn1316 and res judicata or collateral estoppel (discussed further below). fn1317
33.83 Related Litigation
Because the "pattern" pleaded may involve activities in several states, related RICO actions may be filed in several districts. The procedures for consolidation or coordination discussed in supra section 31 should therefore be considered, as appropriate. Because criminal racketeering activity is an element of civil RICO liability, civil RICO defendants will often be, or have been, the subject of criminal investigation or prosecution. The court should determine the existence and status of any related criminal proceedings, which may have an effect on pretrial and trial planning. Where criminal and civil RICO cases are proceeding concurrently, the criminal charges should ordinarily be tried first, without a general stay being imposed in the civil action.
If related cases have been concluded, the trial judge must consider potential claim and issue preclusion. RICO provides that a final judgment in favor of the United States in a criminal proceeding shall estop the defendant from denying the essential allegations of the criminal offense in any civil proceeding brought by the United States. fn1318 The statute is silent on the use of such convictions in civil cases brought by private parties, but courts may still apply claim and issue preclusion. fn1319 Preclusion may also arise from prior civil litigation, whether in federal or state court. fn1320
Prior administrative proceedings fn1321 or arbitration awards fn1322 may also be accorded preclusive effect. Some courts, however, have held that prior adjudications in bankruptcy court will not bar subsequent civil RICO actions based on claims which could have been raised in bankruptcy. fn1323
While claim and issue preclusion ordinarily bar the parties or those in privity with them from relitigating claims or defenses which were, or which could have been, litigated in a prior proceeding, and from relitigating factual or legal issues which were actually litigated and essential to a final judgment, there are considerations common to civil RICO cases that may operate to bar application of these doctrines in some cases. Different burdens of proof, fn1324 inability to litigate the issue in the prior proceeding, fn1325 or lack of knowledge regarding the facts required to allege a RICO violation fn1326 may prevent application of preclusion doctrines in a civil RICO action.
The specific elements required to prove a RICO violation may pose special problems in discovery. The "pattern" requirement may involve discovery into a RICO defendant's conduct and practices over an extended period of time and with respect to numerous transactions.
The existence of related criminal proceedings may raise issues such as the defendant's Fifth Amendment privilege against self-incrimination and the discoverability of grand jury material. Civil RICO claims may also require discovery involving foreign countries. These issues must be addressed early in the litigation, before depositions begin, in order to avoid unnecessary conflict and discovery motions.
To establish a pattern of racketeering activity, a civil RICO plaintiff must allege separate predicate acts that are both related and pose a threat of continuity. fn1327 While discovery into unrelated alleged criminal acts should therefore ordinarily not be permitted, fn1328 courts must be careful not to curtail unduly a plaintiff's discovery into alleged wrongdoing, especially where it relates to other alleged victims of the same pattern of racketeering activity or to acts within the exclusive knowledge of the defendant. fn1329
33.85 Final Pretrial Conference fn1330
It may not be possible to determine the sufficiency of some RICO claims until the parties have conducted discovery. Prior to the final pretrial conference, the court should require the parties to file statements and memoranda setting out the claims and defenses that remain viable and the factual and legal bases therefor. The parties should attempt to reach stipulations where possible; where disagree-ments remain, motions for summary judgment, filed in advance by a specified deadline, can be resolved or at least considered at the conference. If the elimination of RICO or other federal claims removes the jurisdictional basis for supplemental state law claims, the court should decide whether it will retain jurisdiction over those claims.
Some of the technical issues in civil RICO trials may be particularly confusing to lay jurors. The court should therefore explain to the jurors the general nature of the claims. This should be done at an early stage, either during voir dire or before the parties' opening statements.
In addition to briefly noting the general nature of the case, the court should outline some of the characteristics and elements of a civil RICO case. These include the fact that the case is a civil action, not a criminal proceeding; that the burden of proof is by a preponderance of the evidence, not beyond a reasonable doubt; fn1331 and that the plaintiff need not prove that the defendant is a "racketeer" in the everyday sense of that term or is associated with "organized crime."
The court should urge the parties to submit a joint set of preliminary comments or instructions for this purpose. To avoid confusion, and to direct the jurors' attention to the sufficiency of each separate statutory and common law claim submitted for their decision, special verdicts or a general verdict with interrogatories should usually be employed.
Issues may be submitted to the jury for decision sequentially, both to
simplify deliberations and to obviate deliberation on issues rendered moot
by an earlier verdict. Some courts have held that the jury should not be
informed that damages awarded on a RICO verdict will automatically be
1273. With acknowledgment to Edward F. Mannino, Esq.
1274. Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 19611968.
1275. See 28 U.S.C. 1367 (supplemental jurisdiction).
1276. See, e.g., Parker & Parsley Petroleum Co. v. Dresser Indus., 972 F.2d 580, 58490 (5th Cir. 1992); Spiegel v. Continental Ill. Nat. Bank, 790 F.2d 638, 64950 (7th Cir. 1986).
1277. See Sample Form infra 41.54.
1278. See, e.g., Parker & Parsley, 972 F.2d at 584; Danielsen v. Burnside- Ott Aviation Training Ctr., Inc., 941 F.2d 1220, 122930 (D.C. Cir. 1991); Craighead v. E. F. Hutton & Co., 899 F.2d 485, 494 (6th Cir. 1990); Ouaknine v. MacFarlane, 897 F.2d 75, 8283 (2d Cir. 1990); Rose v. Bartle, 871 F.2d 331, 35658 (3d Cir. 1989); Grider v. Texas Oil & Gas Corp., 868 F.2d 1147, 114951 (10th Cir. 1989). Contra Busby v. Crown Supply, Inc., 896 F.2d 833, 837 (4th Cir. 1990) (en banc).
1279. See, e.g ., Danielsen v. Burnside-Ott Aviation Training Center, Inc., 941 F.2d 1220 (D.C. Cir. 1991); Kehr Packages, Inc. v. Fidelcor, Inc., 926 F.2d 1406 (3d Cir.), cert. denied , 111 S. Ct. 2839 (1991); Airlines Reporting Corp. v. Barry, 666 F. Supp. 1311, 1315 (D. Minn. 1987).
1280. Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 496 (1985).
1281. Reves v. Ernst & Young, 113 S. Ct. 1163, 116870 (1993), referring to Bennett v. Berg, 710 F.2d 1361, 1364 (8th Cir. 1983) (en banc).
1282. Reves, 113 S. Ct. at 1173.
1283. Outsiders may still be liable as conspirators (under 1962(d)) or under an "aiding and abetting" theory, which has been recognized by two federal appeals courts. See Petro-Tech, Inc. v. Western Co., 824 F.2d 1349, 1356, 135960 (3d Cir. 1987); Armco Indus. Credit Corp. v. SLT Warehouse Co., 782 F.2d 475, 48586 (5th Cir. 1986).
1284. See, e.g., Board of County Comm'rs v. Liberty Group, 965 F.2d 879, 885 (10th Cir.), cert. denied , 113 S. Ct. 329 (1992); Yellow Bus Lines, Inc. v. Local Union 639, 883 F.2d 132, 13940 (D.C. Cir. 1989); Schofield v. First Commodity Corp., 793 F.2d 28, 2930 (1st Cir. 1986); Bennett v. United States Trust Co., 770 F.2d 308, 315 (2d Cir. 1985); B.F. Hirsch v. Enright Refining Co., 751 F.2d 628, 634 (3d Cir. 1984); Rae v. Union Bank, 725 F.2d 478, 481 (9th Cir. 1984).
1285. See, e.g., Bennett v. Berg, 685 F.2d 1053, 106162 (8th Cir. 1982).
1286. See, e.g., Haroco, Inc. v. American Nat. Bank & Trust Co., 747 F.2d 384, 40203 (7th Cir. 1984), aff'd on other grounds, 473 U.S. 606 (1985); Center Cadillac, Inc. v. Bank Leumi Trust Co., 808 F. Supp. 213, 23637 (S.D.N.Y. 1992). Contra NCNB Nat'l Bank v. Tiller, 814 F.2d 931, 93637 (4th Cir. 1987), overruled on other grounds, Busby v. Crown Supply, Inc., 896 F.2d 833, 84041 & n.8 (4th Cir. 1990) (en banc); In re Tucker Freight Lines, Inc., 789 F. Supp. 884, 893 (W.D. Mich. 1991).
1287. See Parker & Parsley Petroleum Co. v. Dresser Indus., 972 F.2d 580, 584 (5th Cir. 1992); Board of County Comm'rs v. Liberty Group, 965 F.2d 879, 885, 886 (10th Cir.), cert. denied, 113 S. Ct. 329 (1992); Miranda v. Ponce Fed. Bank, 948 F.2d 41, 45 (1st Cir. 1991); Brittingham v. Mobil Corp., 943 F.2d 297, 30003 (3d Cir. 1991); Landry v. Air Line Pilots Ass'n Int'l, 901 F.2d 404, 425 (5th Cir. 1990); Yellow Bus Lines, Inc. v. Local Union 639, 883 F.2d 132, 140 (D.C. Cir. 1989); D & S Auto Parts, Inc. v. Schwartz, 838 F.2d 964, 96768 (7th Cir. 1988); Petro-Tech, Inc. v. Western Co., 824 F.2d 1349, 135960 (3d Cir. 1987); Luthi v. Tonka Corp., 815 F.2d 1229, 1230 (8th Cir. 1987); Schofield v. First Commodity Corp., 793 F.2d 28, 32 (1st Cir. 1986). Note, however, that some courts permit vicarious liability where an employer is benefited by its employees' 1962(c) violations, if the employer is distinct from the enterprise. See, e.g., Brady v. Dairy Fresh Prods. Co., 974 F.2d 1149, 1154 (9th Cir. 1992); Petro-Tech, 824 F.2d at 136162. Vicarious liability has also been found proper under other subsections of 1962. See, e.g., Quick v. Peoples Bank of Cullman County, 993 F.2d 793, 79798 (11th Cir. 1993) ( 1962(b)). See generally A Proposal for the Application of Vicarious Liability Under Civil RICO (American College of Trial Lawyers 1994).
1288. 18 U.S.C. 1961(4). While some have argued that this definition limits associations-in-fact to groups of individuals, that argument has found little support in the decisions. See, e.g., Atlas Pile Driving Co. v. DiCon Fin. Co., 886 F.2d 986, 995 n.7 (8th Cir. 1989); Shearin v. E.F. Hutton Group, Inc., 885 F.2d 1162, 116566 (3d Cir. 1989). But see In re Tucker Freight Lines, Inc., 789 F. Supp. 884, 893 (W.D. Mich. 1991).
1289. United States v. Turkette, 452 U.S. 576, 583 (1981).
1290. See, e.g., Parker & Parsley, 972 F.2d at 583; Brittingham v. Mobil Corp., 943 F.2d 297, 30003 (3d Cir. 1991) ("a 1962(c) enterprise must be more than an association of individuals or entities conducting the normal affairs of a defendant corporation"); Yellow Bus Lines, 883 F.2d at 141 ("allowing plaintiffs to generate such 'contrived partnerships' consisting of an umbrella organization and its subsidiary parts, would render the non- identity requirement of section 1962(c) meaningless. We decline to permit such an 'end run' around the statutory requirements."); Atkinson v. Anadarko Bank & Trust Co., 808 F.2d 438 (5th Cir. 1987); Haroco, 747 F.2d at 401, aff'd on other grounds , 473 U.S. 606 (1985). But see Atlas Pile Driving, 886 F.2d 986 (two members of "association in fact" enterprise could also be "persons" liable).
1291. 492 U.S. 229, 239 (1989).
1292. Id. at 240.
1293. Id. at 241.
1294. Id. at 242.
1295. See, e.g., Midwest Grinding Co. v. Spitz, 976 F.2d 1016 (7th Cir. 1992); Uni*Quality, Inc. v. Infotronx, Inc., 974 F.2d 918 (7th Cir. 1992); Tel-Phonic Servs., Inc. v. TBS Int'l, Inc., 975 F.2d 1134 (5th Cir. 1992); Hughes v. Consol-Pennsylvania Coal Co., 945 F.2d 594, 60911 (3d Cir. 1991), cert. denied , 112 S. Ct. 2300 (1992) (holding that "twelve months is not a substantial period of time" for continuity purposes in a closed-ended scheme); Feinstein v. RTC, 942 F.2d 34 (1st Cir. 1991); Kehr Packages, Inc. v. Fidelcor, Inc., 926 F.2d 1406 (3d Cir.), cert. denied , 111 S. Ct. 2839 (1991); Pyramid Sec., Ltd. v. IB Resolution, Inc., 924 F.2d 1114 (D.C. Cir.), cert. denied, 112 S. Ct. 85 (1991); American Eagle Credit Corp. v. Gaskins, 920 F.2d 352 (6th Cir. 1990); Delta Pride Catfish, Inc. v. Marine Midland Bus. Loans, Inc., 767 F. Supp. 951, 96768 (E.D. Ark. 1991); Johnston v. Wilbourn, 760 F. Supp. 578, 58889 n.16 (S.D. Miss. 1991) (collecting cases and concluding that in no case in which predicate acts spanned less than one year in a closed-ended scheme had courts found a pattern).
1296. See, e.g., Boone v. Carlsbad Bancorporation, Inc., 972 F.2d 1545, 1556 (10th Cir. 1992); Hindes v. Castle, 937 F.2d 868, 87276 (3d Cir. 1991) ("[i]t remains an open question whether RICO liability is ever appropriate for a single-scheme, single-victim conduct threatening no future harm"); Lange v. Hocker, 940 F.2d 359 (8th Cir. 1991); Banks v. Wolk, 918 F.2d 418, 422 (3d Cir. 1990); United States Textiles, Inc. v. Anheuser-Busch Cos., 911 F.2d 1261, 126769 (7th Cir. 1990); Sil-Flo, Inc. v. SFHC, Inc., 917 F.2d 1507, 1516 (10th Cir. 1990).
1297. In gauging the duration in cases charging mail or wire fraud, some courts have held that only the duration of the fraudulent acts is relevant, and that innocent mailings may not be considered. See, e.g ., Feinstein v. RTC, 942 F.2d 34, 46 (1st Cir. 1991); Kehr Packages, 926 F.2d at 1418, cert. denied , 111 S. Ct. 2839 (1991).
1298. See, e.g., Midwest Grinding, 976 F.2d at 102325. These factors are followed by courts which established this test before H.J. While that test was not followed in H.J., and while some courts have since found it no longer permissible, see, e.g., Fleet Credit Corp. v. Sion, 893 F.2d 441, 44546 (1st Cir. 1990), other courts still utilize it. See, e.g., Banks v. Wolk, 918 F.2d 418, 423 (3d Cir. 1990); United States Textiles, 911 F.2d at 126769.
1299. See, e.g., Glessner v. Kenny, 952 F.2d 702, 714 (3d Cir. 1991); Reddy v. Litton Indus. Inc., 912 F.2d 291 (9th Cir. 1990); Hecht v. Commerce Clearing House, Inc., 897 F.2d 21 (2d Cir. 1990).
1300. See, e.g., Seville Indus. Mach. Corp. v. Southmost Mach. Corp., 742 F.2d 786, 792 n.8 (3d Cir. 1984).
1301. Schiffels v. Kemper Fin. Servs., Inc., 978 F.2d 344, 34851 (7th Cir. 1992); Shearin v. E.F. Hutton Group, Inc., 885 F.2d 1162, 1169 (3d Cir. 1989).
1302. Bowman v. Western Auto Supply Co., 985 F.2d 383 (8th Cir.), cert. denied , 113 S. Ct. 2459 (1993); Reddy v. Litton Indus., Inc., 912 F.2d 291 (9th Cir. 1990); Hecht, 897 F.2d 21.
1303. See, e.g., Miranda v. Ponce Fed. Bank, 948 F.2d 41 (1st Cir. 1991); United States v. Rastelli, 870 F.2d 822 (2d Cir. 1989).
1304. See, e.g., United States v. Pryba, 900 F.2d 748 (4th Cir. 1990); United States v. Kragness, 830 F.2d 842, 860 (8th Cir. 1987); United States v. Joseph, 835 F.2d 1149 (6th Cir. 1986); United States v. Neapolitan, 791 F.2d 489, 49498 (7th Cir. 1986); United States v. Adams, 759 F.2d 1099 (3d Cir. 1985); United States v. Tille, 729 F.2d 615, 619 (9th Cir. 1984); United States v. Carter, 721 F.2d 1514 (11th Cir. 1984).
1305. See, e.g., In re Sunrise Sec. Litig., 916 F.2d 874 (3d Cir. 1990); Mid-State Fertilizer Co. v. Exchange Nat. Bank, 877 F.2d 1333, 133436 (7th Cir. 1989); Warren v. Manufacturers Nat. Bank, 759 F.2d 542 (6th Cir. 1985). See also Ceribelli v. Elghanayan, 990 F.2d 62 (2d Cir. 1993).
1306. See, e.g., Holmes v. Securities Investor Protection Corp., 112 S. Ct. 1311 (1992); Imagineering, Inc. v. Kiewit Pac. Co., 976 F.2d 1303, 131112 (9th Cir. 1992), cert. denied, 113 S. Ct. 1644 (1993); Zervas v. Faulkner, 861 F.2d 823 (5th Cir. 1988); Brandenburg v. Seidel, 859 F.2d 1179 (4th Cir. 1988).
1307. See, e.g., Genty v. RTC, 937 F.2d 899, 91819 (3d Cir. 1991); Grogan v. Platt, 835 F.2d 844 (11th Cir. 1988); Drake v. B.F. Goodrich Co., 782 F.2d 638 (6th Cir. 1986).
1308. See, e.g., McCool v. Strata Oil Co., 972 F.2d 1452, 146466 (7th Cir. 1992); Bivens Gardens Office Bldg., Inc. v. Barnett Bank, 906 F.2d 1546, 155455 (11th Cir. 1990); Keystone Ins. Co. v. Houghton, 863 F.2d 1125, 1130 (3d Cir. 1988). 1309. 18 U.S.C. 1964(a).
1310. Compare In re Fredeman Litig., 843 F.2d 821 (5th Cir. 1988) and Religious Technology Ctr. v. Wollersheim, 796 F.2d 1076 (9th Cir. 1986) with Aetna Casualty & Surety Co. v. Liebowitz, 570 F. Supp. 908, 910 n.11 (E.D.N.Y. 1983), aff'd on other grounds, 730 F.2d 905 (2d Cir. 1984).
1311. See, e.g., Shearson/American Express, Inc. v. McMahon, 482 U.S. 220 (1987); Kerr-McGee Ref. Corp. v. M/T Triumph, 924 F.2d 467 (2d Cir.), cert. denied , 112 S. Ct. 81 (1991).
1312. See, e.g., Van Ness Townhouses v. Mar Indus. Corp., 862 F.2d 754, 75859 (9th Cir. 1988); Faircloth v. Jackie Fine Arts, Inc., 682 F. Supp. 837, 841 (D.S.C. 1988), modified on other grounds, 938 F.2d 513 (4th Cir. 1991). See also Nesslage v. York Sec., Inc., 823 F.2d 231, 234 (8th Cir. 1987).
1313. See, e.g., Smith v. Fidelity Consumer Discount Co., 898 F.2d 907 (3d Cir. 1989).
1314. Coopers & Lybrand v. Sun-Diamond Growers, 912 F.2d 1135 (9th Cir. 1990); Brandenburg, 859 F.2d at 119095.
1315. W.S. Kirkpatrick & Co. v. Environmental Tectonics Corp., Int'l, 110 S. Ct. 701 (1990).
1316. See, e.g., H.J. Inc. v. Northwestern Bell Tel. Co., 734 F. Supp. 879 (D. Minn. 1990), aff'd , 954 F.2d 485 (8th Cir.), cert. denied, 112 S. Ct. 2306 (1992).
1317. See, e.g., Saud v. Bank of New York, 929 F.2d 916 (2d Cir. 1991). See supra 33.82.
1318. 18 U.S.C. 1964(d).
1319. See, e.g., Appley v. West, 832 F.2d 1021 (7th Cir. 1987); Roso v. Saxon Energy Corp., 758 F. Supp. 164, 16770 (S.D.N.Y. 1991); Anderson v. Janovich, 543 F. Supp. 1124, 1132 (W.D. Wash. 1982).
1320. See, e.g., Saud, 929 F.2d 916; Polur v. Raffe, 912 F.2d 52, 5657 (2d Cir. 1990); Evans v. Dale, 896 F.2d 975, 97778 (5th Cir. 1990); McCarter v. Mitcham, 883 F.2d 196, 199201 (3d Cir. 1989).
1321. See Fry v. General Motors Corp., 728 F. Supp. 455, 45960 (E.D. Mich. 1989).
1322. See, e.g ., Central Transport, Inc. v. Four Phase Sys., Inc., 936 F.2d 256 (6th Cir. 1991); Benjamin v. Traffic Executive Ass'n E. R.R., 869 F.2d 107 (2d Cir. 1989); Rudell v. Comprehensive Accounting Corp., 802 F.2d 926 (7th Cir. 1986); Greenblatt v. Drexel Burnham Lambert, Inc., 763 F.2d 1352, 136062 (11th Cir. 1985).
1323. Barnett v. Stern, 909 F.2d 973, 97882 (7th Cir. 1990); Howell Hydrocarbons, Inc. v. Adams, 897 F.2d 183 (5th Cir. 1990).
1324. See, e.g., Wilcox v. First Interstate Bank, 815 F.2d 522 (9th Cir. 1987).
1325. See, e.g., George v. United Ky. Bank, Inc., 753 F.2d 50 (6th Cir. 1985).
1326. See, e.g., Norris v. Wirtz, 703 F. Supp. 1322 (N.D. Ill. 1989).
1327. H.J. Inc. v. Northwestern Bell Tel. Co., 492 U.S. 229 (1989). See supra 33.81.
1328. See, e.g., Jolley v. Welch, 904 F.2d 988, 992 (5th Cir. 1990); Olive Can Co. v. Martin, 906 F.2d 1147, 115253 (7th Cir. 1990); Zerman v. E.F. Hutton & Co., 628 F. Supp. 1509, 1512 (S.D.N.Y. 1986); PMC, Inc. v. Ferro Corp., 131 F.R.D. 184 (C.D. Cal. 1990).
1329. See, e.g., Michaels Bldg. Co. v. Ameritrust Co., N.A., 848 F.2d 674, 67981 (6th Cir. 1988); Halperin v. Berlandi, 114 F.R.D. 8, 1113 (D. Mass. 1986). 1330. See generally supra 21.6.
1331. See, e.g., Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 491 (1985); In re EDC, Inc., 930 F.2d 1275, 1280 (7th Cir. 1991); Wilcox v. First Interstate Bank, N.A., 815 F.2d 522, 53032 (9th Cir. 1987).
1332. See Lerchen v. Merrill Lynch, Pierce, Fenner & Smith, Inc., No. 86- 1158 (E.D. Mich. 1985), aff'd, 817 F.2d 756 (6th Cir. 1987). See also Pollock & Riley, Inc. v. Pearl Brewing Co., 498 F.2d 1240 (5th Cir. 1974) (antitrust).
Civil RICO Case-Statement Order
It is ORDERED:
The proponent of the civil RICO claim shall file and serve [within days of ] a case statement that shall include the facts relied on to initiate the RICO claim. In particular, the statement shall use the numbers and letters set forth below, unless filed as part of an amended and restated pleading (in which latter case, the allegations of the amended and restated pleading shall reasonably follow the organization set out below), and shall state in detail and with specificity the following information:
1. State whether the alleged unlawful conduct is in violation of 18 U.S.C. 1962(a), (b), (c), and/or (d). If you allege violations of more than one 1962 subsection, treat each as a separate RICO claim.
2. List each defendant, and state the alleged misconduct and basis of alleged liability of each defendant.
3. List the alleged wrongdoers, other than the defendants listed above, and state the alleged misconduct of each wrongdoer.
4. List the alleged victims, and state how each victim allegedly was injured.
5. Describe in detail the pattern of racketeering activity or collection of
an unlawful debt alleged for each RICO claim. A description of the pattern
of racketeering activity shall:
(a) list the alleged predicate acts and the specific statutes allegedly violated by each predicate act;
(b) state the dates of the predicate acts, the participants in the predicate acts, and a description of the facts surrounding each predicate act;
(c) if the RICO claim is based on the predicate offenses of wire fraud, mail fraud, fraud in the sale of securities, or fraud in connection with a case under U.S.C. Title 11, the "circumstances constituting fraud or mistake shall be stated with particularity," Fed. R. Civ. P. 9(b) (identify the time, place, and contents of the alleged misrepresentation or omissions, and the identity of persons to whom and by whom the alleged misrepresentations or omissions were made);
(d) describe in detail the perceived relationship that the predicate acts bear to each other or to some external organizing principle that renders them "ordered" or "arranged" or "part of a common plan"; and
(e) explain how the predicate acts amount to or pose a threat of continued criminal activity.
6. Describe in detail the alleged enterprise for each RICO claim. A
description of the enterprise shall:
(a) state the names of the individuals, partnerships, corporations, associations, or other entities allegedly constituting the enterprise;
(b) describe the structure, purpose, roles, function, and course of conduct of the enterprise;
(c) state whether any defendants are employees, officers, or directors of the alleged enterprise;
(d) state whether any defendants are associated with the alleged enterprise, and if so, how;
(e) explain how each defendant participated in the direction of the affairs of the en-terprise;
(f) state whether you allege [(i) that the defendants are individuals or entities separate from the alleged enterprise, or (ii) that the defendants are the enterprise itself, or (iii) that the defendants are] members of the enterprise; and
(g) if you allege any defendants to be the enterprise itself, or members of the enterprise, explain whether such defendants are perpetrators, passive instruments, or victims of the alleged racketeering activity.
7. State whether you allege, and describe in detail, how the pattern of racketeering activity and the enterprise are separate or have merged into one entity.
8. Describe the alleged relationship between the activities and the pattern of racketeering activity. Discuss how the racketeering activity differs from the usual and daily activities of the enterprise, if at all.
9. Describe what benefits, if any, the alleged enterprise and each defendant received from the alleged pattern of racketeering activity.
10. Describe the effect of the activities of the enterprise on interstate or foreign commerce.
11. If the complaint alleges a violation of 18 U.S.C. 1962(a), provide the
(a) State who received the income derived from the pattern of racketeering activity or through the collection of an unlawful debt; and
(b) Describe the use or investment of such income.
12. If the complaint alleges a violation of 18 U.S.C. 1962(b), provide the
(a) Describe in detail the acquisition or maintenance of any interest in or control of the alleged enterprise; and
(b) State whether the same entity is both the liable "person" and the "enterprise" under 1962(b).
13. If the complaint alleges a violation of 18 U.S.C. 1962(c), provide the
(a) state who is employed by or associated with the enterprise; [and]
(b) state whether the same entity is both the liable "person" and the "enterprise" under 1962(c).
14. If the complaint alleges a violation of 18 U.S.C. 1962(d), describe in detail the alleged conspiracy.
15. Describe the alleged injury to business or property.
16. Describe the relationship between the alleged injury and violation of the RICO statute.
17. List the damages sustained by reason of the violation of 1962, indicating the amount for which each defendant allegedly is liable.
18. Provide any additional information you feel would be helpful to the Court in processing your RICO claim.
United States District Judge
Note: This order has been designed to establish a uniform and efficient procedure for deciding civil actions containing claims made pursuant to 18 U.S.C. 19611968 ("civil RICO").
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