Source: cases/18usc1962/f3d-660-346-crest-construction-ii-v-doe.case
Case source: https://www.neochart.com/catalog/cases/f3d/volume_660/0346_01/index.html
we note that these assertions are more of the same eonclusory allegations that altogether fail to establish how the Defendants are associated with each other or the RICO enterprise.
The district court found Plaintiffs failed to properly plead the RICO elements of an enterprise, a pattern of racketeering activity, and at least two predicate acts committed by each defendant. We agree.
The complaint also fails to satisfy the continuity element alleging a scheme that began in December 2003 and continued until June 2004, a period of less than seven months.
The scheme allegedly lasted less than seven months, which is legally insufficient “to constitute the requisite pattern of racketeering activity.”
We reject Plaintiffs’ conclusory assertion that Defendants’ activities constituted an open-ended fraudulent scheme because the “true nature of the Defendants’ long term threat [was] not only [as] to Plaintiffs but as to the multiple victims over a significant period of time.”
A RICO claim must be pleaded with particularity under Rule 9(b).
We also note that Plaintiffs’ RICO claim is fatally flawed because the complaint fails to adequately specify the predicate acts.
While the complaint is awash in phrases such as “ongoing scheme,” “pattern of racketeering,” and “participation in a fraudulent scheme,” without more, such phrases are insufficient to form the basis of a RICO claim.
Considered in its entirety, however, the complaint presumes rather than details any use of the U.S. mails or electronic wire carrier in perpetrating the alleged scheme.
Finally, we note that Plaintiffs’ failure to meet the heightened pleading requirements of Rule 9(b) in alleging mail and wire fraud also provided an independent basis for dismissal.
casedsl 1 case /f3d/660/0346-01 name Crest Construction II, Inc. v. Doe cite 660 F.3d 346 (2011) court United States Court of Appeals for the Eighth Circuit date 2011-10-31 url catalog/cases/f3d/volume_660/0346_01/index.html source ir/caselaw/f3d_660.jsonl sha1=40eea0ea8854bb0caf437524d7fcc3f2bae7dcfe chars=33723 law 18usc1962 (c) role applied posture civil; investor/financier sues used-car dealer, its owners and affiliated companies; RICO count dismissed under 12(b)(6)/9(b), leave to amend denied, state claims declined; plaintiffs appeal; affirmed result claimant-lost element enterprise : not-satisfied [pleaded] variant association-in-fact/conclusory-web-of-related-companies fact @9089..9578 [supports] | The complaint broadly and nonspecifically alleges Defendants formed and operated an “association in fact” that fraudulently grew a “web of interrelated” commonly-owned and managed companies that engaged in a host of “fraudulent and illegal” business practices, including mail and wire fraud, and used this association in fact to fraudulently induce Plaintiffs to purchase third-party vehicle loan accounts from On Time Auto and to purchase — then lose — an equity interest in On Time Auto. fact @9670..9818 [supports] | The complaint further asserts that Defendants used On Time Auto as a front to maximize and divert the revenues and profits of the illegal enterprise fact @19056..19254 [cuts-against absent] | In their complaint, Plaintiffs merely suggest that at indefinite times, in nondescript ways, and for unidentified purposes, some, but not all Defendants provided On Time Auto with funds or services. rule @13086..13322 [quoted] | In deciding whether an alleged RICO enterprise has an ascertainable structure distinct from the pattern of racketeering activity, we must “determine if the enterprise would still exist were the predicate acts removed from the equation.” held @15813..15994 | we note that these assertions are more of the same eonclusory allegations that altogether fail to establish how the Defendants are associated with each other or the RICO enterprise. held @11595..11798 | The district court found Plaintiffs failed to properly plead the RICO elements of an enterprise, a pattern of racketeering activity, and at least two predicate acts committed by each defendant. We agree. gloss Listing commonly-owned companies and lenders/backers of one dealership, without facts showing how they relate to each other or share a purpose, pleads no association-in-fact. Court cites Boyle's three features but applies the older circuit "ascertainable structure distinct from the pattern" test. element pattern.continuity : not-satisfied [pleaded] scope alternative theory closed-ended continuity variant continuity/closed-ended-too-short fact @629..879 [supports] | In December 2003, Randall Robb (Robb), doing business as Crest, was approached by business acquaintance Larry Myers (Myers) about purchasing third-party auto sales contracts and promissory notes (Loan Accounts) from On Time Auto, Inc. (On Time Auto). fact @3450..3620 [cuts-against] | In June 2004, Myers unilaterally withdrew from the day-to-day operations of On Time Auto and used the entire amount in the Reserve Account ($40,000) for his own purposes. rule @23781..23916 [quoted] | We have held that closed-ended continuity “can be shown by related acts continuing over a period of time lasting at least one year____” held @23609..23780 | The complaint also fails to satisfy the continuity element alleging a scheme that began in December 2003 and continued until June 2004, a period of less than seven months. held @24081..24226 | The scheme allegedly lasted less than seven months, which is legally insufficient “to constitute the requisite pattern of racketeering activity.” gloss Eighth Circuit bright-ish line: closed-ended continuity needs about a year; under seven months (single investor, one dealership) fails as a matter of law. element pattern.continuity : not-satisfied [pleaded] scope alternative theory open-ended continuity variant continuity/open-ended-conclusory-threat fact @18651..18848 [supports] | Plaintiffs argue the district court failed to “recognize the true nature of the Defendants’ long term threat not only to Plaintiffs but as to the multiple victims over a significant period of time” held @24804..25080 | We reject Plaintiffs’ conclusory assertion that Defendants’ activities constituted an open-ended fraudulent scheme because the “true nature of the Defendants’ long term threat [was] not only [as] to Plaintiffs but as to the multiple victims over a significant period of time.” gloss Unnamed "multiple victims" and labels like "ongoing scheme" do not plead a threat of future repetition. element pattern : not-satisfied [pleaded] scope alternative theory two specific predicate acts per defendant variant two-acts-per-defendant/boilerplate-group-pleading fact @11421..11491 [cuts-against absent] | Plaintiffs’ RICO claim identified some, but not all, named defendants. rule @8553..8617 | A RICO claim must be pleaded with particularity under Rule 9(b). held @25542..25670 | We also note that Plaintiffs’ RICO claim is fatally flawed because the complaint fails to adequately specify the predicate acts. held @19523..19738 | While the complaint is awash in phrases such as “ongoing scheme,” “pattern of racketeering,” and “participation in a fraudulent scheme,” without more, such phrases are insufficient to form the basis of a RICO claim. gloss § 1962(c) must be established per defendant: two specific predicate acts each; lumping all defendants together fails. element racketeering.mail-fraud : not-satisfied [pleaded] scope alternative count mail and wire fraud predicates variant rule-9b-particularity/no-who-what-when-where-how fact @10962..11235 [supports] | Throughout the complaint, Plaintiffs repeatedly alleged that Defendants executed these fraudulent and illegal activities by using U.S. mails, telephones, and electronic communications with the specific intent to defraud and steal from numerous victims, including Plaintiffs fact @22861..23023 [supports] | Rather, Plaintiffs circularly argue Defendants committed mail fraud by sending documents and funds through the U.S. mails in managing On Time Auto’s loan accounts held @23266..23434 | Considered in its entirety, however, the complaint presumes rather than details any use of the U.S. mails or electronic wire carrier in perpetrating the alleged scheme. held @26109..26290 | Finally, we note that Plaintiffs’ failure to meet the heightened pleading requirements of Rule 9(b) in alleging mail and wire fraud also provided an independent basis for dismissal. element commerce : not-reached gloss Pleaded only by reciting the statute; not discussed. element conduct : not-reached element person : not-reached element injury : not-reached element causation : not-reached misfit Failure is one of PLEADING SPECIFICITY (Twombly/Iqbal plausibility + Rule 9(b)), not that the alleged facts fall outside the element: "not-satisfied [pleaded]" cannot distinguish "facts as alleged do not meet the test" (the seven-month continuity holding) from "no facts alleged at all" (enterprise, predicates). The `absent` fact tag now marks the individual lines, but a basis like [unpleaded] or a pleading-standard defense slot is still missing. misfit Wire fraud shares the block with mail fraud under racketeering.mail-fraud; the court treats them jointly. A block cannot carry two predicate sub-ids. misfit The three further grounds (pattern "assuming, arguendo," an enterprise; two acts per defendant; Rule 9(b)) are now `scope alternative`, which also drops them from the instance count although the seven-month continuity ruling is a fully reasoned holding of the panel; v1 has no "alternative but independently dispositive" and no pointer to WHICH block's failure is being assumed away. misfit "Two predicate acts per defendant" is a per-person quantifier over pattern/racketeering; recorded under `pattern` with a two-acts-per-defendant variant, but it is really a constraint linking person x racketeering. misfit Background narrative (seven-month dealing between investor and dealership) supplies the continuity facts but the court never ties specific narrated events to predicate acts; the fact lines for continuity mark only the start and end of the period. misfit Denial of leave to amend (untimely + futile) and declining supplemental jurisdiction are part of the judgment but outside the element model. misfit Opinion cites the statute as "28 U.S.C. § 1961" (court's own typo) -- statute-citation resolvers keyed on title 18 would miss it.