United States District Court for the District of New Jersey · 1983-07-08
Case and law context
Role: applied; posture: civil; district court; defendants' motion to dismiss the RICO count under Rules 9(b) and 12(b)(6); result: claimant-lost; claim: (b),(c),(d)
Instances and excluded annotation blocks
| Case | Element | Holding and scope | Variant | Exact source quotations |
|---|---|---|---|---|
| /f-supp/567/1146-01 — United States District Court for the District of New Jersey · 1983 | Acquire or maintain interest in or control of an enterprise (§ 1962(b)) | not_reached Excluded from merits counts applied / merits claim: (b),(c),(d) (b) pleaded but falls with the enterprise element; no separate analysis beyond noting a person cannot acquire an interest in himself. | Unspecified variant | No source quotation recorded for this block. |
| /f-supp/567/1146-01 — United States District Court for the District of New Jersey · 1983 | Interstate or foreign commerce nexus | not_reached Excluded from merits counts applied / merits claim: (b),(c),(d) | Unspecified variant | No source quotation recorded for this block. |
| /f-supp/567/1146-01 — United States District Court for the District of New Jersey · 1983 | Conduct or participate in the conduct of enterprise affairs (§ 1962(c) operation or management test) | not_reached Excluded from merits counts applied / merits claim: (b),(c),(d) | Unspecified variant | No source quotation recorded for this block. |
| /f-supp/567/1146-01 — United States District Court for the District of New Jersey · 1983 | Conspiracy to violate § 1962(a), (b), or (c) (§ 1962(d)) | not Counted merits instance applied / merits basis: pleaded; claim: (b),(c),(d) | agreement/only-to-commit-predicates-not-to-further-enterprise | Although plaintiff does allege that defendants conspired to commit mail fraud and wire fraud, plaintiff fails to allege a RICO conspiracy since it does not state that defendants made their agreement in order to further the affairs of a RICO “enterprise.”Source: docroot/ir/caselaw/f_supp_567.jsonl#/f-supp/567/1146-01; Unicode character offsets [24628:24882] (end exclusive); SHA-256 3836bc32665b8e1a72ea181c77043419d514089c013853f5fc10624d665e146c.The Court stated that an agreement merely to commit the predicate offenses would not be sufficient to support a RICO conspiracy.Source: docroot/ir/caselaw/f_supp_567.jsonl#/f-supp/567/1146-01; Unicode character offsets [23725:23853] (end exclusive); SHA-256 3836bc32665b8e1a72ea181c77043419d514089c013853f5fc10624d665e146c.Therefore, the First Count of plaintiff’s complaint fails to allege that defendants violated Section 1962(d), the conspiracy subsection of RICO.Source: docroot/ir/caselaw/f_supp_567.jsonl#/f-supp/567/1146-01; Unicode character offsets [24883:25027] (end exclusive); SHA-256 3836bc32665b8e1a72ea181c77043419d514089c013853f5fc10624d665e146c. |
| /f-supp/567/1146-01 — United States District Court for the District of New Jersey · 1983 | Enterprise (§ 1961(4)): legal entity or association-in-fact | not Counted merits instance applied / merits basis: pleaded; claim: (b),(c),(d); party: Southmost, Tri-State, Gellman and Alfieri (two corporations and two officers), individually or collectively; subject: party=Southmost, Tri-State, Gellman and Alfieri (two corporations and two officers), individually or collectively Bare label "defendants are enterprises"; an alleged conspiracy to defraud is not itself an enterprise. Also holds a group of corporations + individuals is not a "group of individuals associated in fact". (Reversed on appeal, 742 F.2d 786 (3d Cir. 1984) -- annotator's knowledge, not in this text.) | association-in-fact/defendants-merely-named-as-enterprises | First, plaintiff merely asserts that “defendants Southmost, Tri-State, Gellman and Alfieri are enterprises” (eomplaint, First Count, ¶ 17) without clarifying whether all four defendants comprise one enterprise or whether each defendant constitutes an “enterprise.”Source: docroot/ir/caselaw/f_supp_567.jsonl#/f-supp/567/1146-01; Unicode character offsets [8537:8801] (end exclusive); SHA-256 3836bc32665b8e1a72ea181c77043419d514089c013853f5fc10624d665e146c.Aside from assertions that the four defendants conspired with each other and committed numerous fraudulent acts, plaintiff does not mention any identifiable structure which would encompass all four defendants.Source: docroot/ir/caselaw/f_supp_567.jsonl#/f-supp/567/1146-01; Unicode character offsets [10020:10229] (end exclusive); SHA-256 3836bc32665b8e1a72ea181c77043419d514089c013853f5fc10624d665e146c.In fact, defendant Alfieri is only alleged to be an officer and controlling person of defendant Southmost and is not alleged to have any connection with defendant Tri-State.Source: docroot/ir/caselaw/f_supp_567.jsonl#/f-supp/567/1146-01; Unicode character offsets [14712:14885] (end exclusive); SHA-256 3836bc32665b8e1a72ea181c77043419d514089c013853f5fc10624d665e146c.The Third Circuit held that the first requirement of an “ongoing organization” is a showing that a structure exists for group decision making, whether it be hierarchial or consensual.Source: docroot/ir/caselaw/f_supp_567.jsonl#/f-supp/567/1146-01; Unicode character offsets [8079:8262] (end exclusive); SHA-256 3836bc32665b8e1a72ea181c77043419d514089c013853f5fc10624d665e146c.If it were to be determined that an “enterprise” is sufficiently pleaded whenever a plaintiff avers that any two or more otherwise unassociated individuals agree to commit two or more acts of business fraud, this would effectively eliminate the enterprise element of RICO and drastically expand federal jurisdiction over all business torts which involve use of the mails or telephones.Source: docroot/ir/caselaw/f_supp_567.jsonl#/f-supp/567/1146-01; Unicode character offsets [12825:13210] (end exclusive); SHA-256 3836bc32665b8e1a72ea181c77043419d514089c013853f5fc10624d665e146c.For all the above reasons, I find that the First Count of plaintiff’s complaint is deficient since it fails to allege the existence of an “ongoing organization” which is the first element of the RICO “enterprise” requirement.Source: docroot/ir/caselaw/f_supp_567.jsonl#/f-supp/567/1146-01; Unicode character offsets [15169:15394] (end exclusive); SHA-256 3836bc32665b8e1a72ea181c77043419d514089c013853f5fc10624d665e146c. |
| /f-supp/567/1146-01 — United States District Court for the District of New Jersey · 1983 | Continuing-unit requirement for association-in-fact enterprise | not Counted merits instance applied / merits basis: pleaded; claim: (b),(c),(d) | continuing-unit/no-common-purpose-or-roles-alleged | Plaintiff merely alleges that from May 1981 to the date of the complaint, the defendants conspired to defraud plaintiff in connection with the title, purchase, shipment, and sale of plaintiff’s industrial machinery.Source: docroot/ir/caselaw/f_supp_567.jsonl#/f-supp/567/1146-01; Unicode character offsets [16774:16989] (end exclusive); SHA-256 3836bc32665b8e1a72ea181c77043419d514089c013853f5fc10624d665e146c.Nor does plaintiff allege the individual roles that each of the defendants played within the enterprise.Source: docroot/ir/caselaw/f_supp_567.jsonl#/f-supp/567/1146-01; Unicode character offsets [16669:16773] (end exclusive); SHA-256 3836bc32665b8e1a72ea181c77043419d514089c013853f5fc10624d665e146c.The Court explained that each person must perform a role in the group which is consistent with the enterprise’s organizational structure and which furthers the activities of the organization.Source: docroot/ir/caselaw/f_supp_567.jsonl#/f-supp/567/1146-01; Unicode character offsets [16272:16463] (end exclusive); SHA-256 3836bc32665b8e1a72ea181c77043419d514089c013853f5fc10624d665e146c.This is simply not sufficient to aver a “continuing unit functioning for a common purpose.”Source: docroot/ir/caselaw/f_supp_567.jsonl#/f-supp/567/1146-01; Unicode character offsets [17379:17470] (end exclusive); SHA-256 3836bc32665b8e1a72ea181c77043419d514089c013853f5fc10624d665e146c. |
| /f-supp/567/1146-01 — United States District Court for the District of New Jersey · 1983 | Enterprise as an element distinct from the pattern of racketeering activity | not Counted merits instance applied / merits basis: pleaded; claim: (b),(c),(d) | distinct-from-pattern/enterprise-defined-only-by-predicate-acts | In fact, the alleged “enterprise” involving Southmost, Tri-State, Gellman, and Alfieri only can be understood in terms of the fraudulent acts that plaintiff claims the defendants committed.Source: docroot/ir/caselaw/f_supp_567.jsonl#/f-supp/567/1146-01; Unicode character offsets [18371:18560] (end exclusive); SHA-256 3836bc32665b8e1a72ea181c77043419d514089c013853f5fc10624d665e146c.As the Third Circuit interprets this third requirement, it is necessary for the plaintiff to show that the enterprise has an existence beyond that which is necessary merely to commit the alleged predicate racketeering offenses.Source: docroot/ir/caselaw/f_supp_567.jsonl#/f-supp/567/1146-01; Unicode character offsets [17774:18001] (end exclusive); SHA-256 3836bc32665b8e1a72ea181c77043419d514089c013853f5fc10624d665e146c.I find that the First Count of plaintiff’s complaint fails to satisfy the separate existence requirement since it pleads the existence of an “enterprise” which is apparently synonymous with the defendants’ alleged “pattern of racketeering activity.”Source: docroot/ir/caselaw/f_supp_567.jsonl#/f-supp/567/1146-01; Unicode character offsets [18597:18846] (end exclusive); SHA-256 3836bc32665b8e1a72ea181c77043419d514089c013853f5fc10624d665e146c. |
| /f-supp/567/1146-01 — United States District Court for the District of New Jersey · 1983 | Civil RICO injury to business or property (18 U.S.C. § 1964(c)) | satisfied Counted merits instance applied / merits basis: pleaded; claim: (b),(c),(d) Defendants framed this as causation ("by reason of"); the court treats it as the racketeering-injury question and rejects the extra requirement. | direct-injury/no-separate-racketeering-injury-required | In the instant case, plaintiff alleges that it has suffered business and property damages of $759,039.Source: docroot/ir/caselaw/f_supp_567.jsonl#/f-supp/567/1146-01; Unicode character offsets [30293:30395] (end exclusive); SHA-256 3836bc32665b8e1a72ea181c77043419d514089c013853f5fc10624d665e146c.However, this judicially imposed requirement of a “racketeering enterprise injury” seems artificial and unwarranted by the language of the RICO statute.Source: docroot/ir/caselaw/f_supp_567.jsonl#/f-supp/567/1146-01; Unicode character offsets [32442:32594] (end exclusive); SHA-256 3836bc32665b8e1a72ea181c77043419d514089c013853f5fc10624d665e146c.The First Count of the complaint clearly alleges that plaintiff suffered direct injury from defendants’ alleged racketeering activity and will not be dismissed for its failure to allege a separate and distinct “racketeering injury.”Source: docroot/ir/caselaw/f_supp_567.jsonl#/f-supp/567/1146-01; Unicode character offsets [33827:34059] (end exclusive); SHA-256 3836bc32665b8e1a72ea181c77043419d514089c013853f5fc10624d665e146c. |
| /f-supp/567/1146-01 — United States District Court for the District of New Jersey · 1983 | Pattern of racketeering activity (§ 1961(5)): at least two predicate acts with relatedness and continuity | not Counted merits instance applied / merits basis: pleaded; claim: (b),(c),(d) Pattern fails derivatively: no adequately pleaded predicate acts. Pre-Sedima/H.J. view that any two listed offenses make a pattern. | predicate-acts/predicates-insufficiently-pleaded | It appears from the definition of “pattern of racketeering activity” that any combination of two listed offenses may constitute a “pattern” for RICO purposes.Source: docroot/ir/caselaw/f_supp_567.jsonl#/f-supp/567/1146-01; Unicode character offsets [26020:26178] (end exclusive); SHA-256 3836bc32665b8e1a72ea181c77043419d514089c013853f5fc10624d665e146c.The First Count of plaintiff’s complaint will be dismissed because it fails to allege at least two acts of racketeering activity with sufficient particularity and thus fails to allege that defendants engaged in a “pattern of racketeering activity” as required by 18 U.S.C. § 1962.Source: docroot/ir/caselaw/f_supp_567.jsonl#/f-supp/567/1146-01; Unicode character offsets [31169:31449] (end exclusive); SHA-256 3836bc32665b8e1a72ea181c77043419d514089c013853f5fc10624d665e146c. |
| /f-supp/567/1146-01 — United States District Court for the District of New Jersey · 1983 | Culpable person (§ 1961(3)) distinct from the enterprise under (c) | not_reached Excluded from merits counts rule-announced / merits claim: (b),(c),(d) Court doubts the Third Circuit requires person/enterprise distinctness as a "fourth element" and leaves it open, though it reasons elsewhere that a single-person enterprise cannot violate (b) or (c). | distinct-from-enterprise/defendants-named-as-both-person-and-enterprise | Plaintiff alleges that defendants are both the “enterprise” and the racketeers operating the enterprise.Source: docroot/ir/caselaw/f_supp_567.jsonl#/f-supp/567/1146-01; Unicode character offsets [18960:19064] (end exclusive); SHA-256 3836bc32665b8e1a72ea181c77043419d514089c013853f5fc10624d665e146c.A corporation such as Southmost and Tri-State could not employ itself or associate with itself.Source: docroot/ir/caselaw/f_supp_567.jsonl#/f-supp/567/1146-01; Unicode character offsets [9355:9450] (end exclusive); SHA-256 3836bc32665b8e1a72ea181c77043419d514089c013853f5fc10624d665e146c.It is unnecessary to reach this question, however.Source: docroot/ir/caselaw/f_supp_567.jsonl#/f-supp/567/1146-01; Unicode character offsets [21884:21934] (end exclusive); SHA-256 3836bc32665b8e1a72ea181c77043419d514089c013853f5fc10624d665e146c. |
| /f-supp/567/1146-01 — United States District Court for the District of New Jersey · 1983 | Mail or wire fraud predicate (18 U.S.C. §§ 1341, 1343) | not Counted merits instance applied / merits basis: pleaded; claim: (b),(c),(d); count: mail fraud and wire fraud (treated together); subject: count=mail fraud and wire fraud (treated together) Use of mails/wires "in furtherance" and >=2 acts within ten years WERE adequately alleged; the failure is only Rule 9(b) particularity (no dates, places, contents). | rule-9b-particularity/no-who-what-when-where-how | It is further asserted that Southmost and Tri-State, acting through their controlling persons Gellman and Alfieri, by means of fraudulent and misleading information induced plaintiff to sell or transfer possession of plaintiff’s machinery to defendants for resale.Source: docroot/ir/caselaw/f_supp_567.jsonl#/f-supp/567/1146-01; Unicode character offsets [2223:2487] (end exclusive); SHA-256 3836bc32665b8e1a72ea181c77043419d514089c013853f5fc10624d665e146c.According to the complaint, defendants have retained for their own use the money which they have received from these dealings instead of paying it over to plaintiff.Source: docroot/ir/caselaw/f_supp_567.jsonl#/f-supp/567/1146-01; Unicode character offsets [3224:3389] (end exclusive); SHA-256 3836bc32665b8e1a72ea181c77043419d514089c013853f5fc10624d665e146c.Plaintiff fails to describe the date, place, or time of any phone calls or letters or other forms of interstate communication.Source: docroot/ir/caselaw/f_supp_567.jsonl#/f-supp/567/1146-01; Unicode character offsets [28615:28741] (end exclusive); SHA-256 3836bc32665b8e1a72ea181c77043419d514089c013853f5fc10624d665e146c.The elements of an indictable offense under the federal mail and wire fraud statutes are: (1) a scheme designed to defraud or to obtain money or property by false pretenses and (2) use of the mails or interstate wires (including interstate telephone calls) in furtherance of the fraudulent scheme.Source: docroot/ir/caselaw/f_supp_567.jsonl#/f-supp/567/1146-01; Unicode character offsets [27057:27354] (end exclusive); SHA-256 3836bc32665b8e1a72ea181c77043419d514089c013853f5fc10624d665e146c.I find that this lack of specificity caused plaintiff’s allegations of mail fraud and wire fraud to be deficient.Source: docroot/ir/caselaw/f_supp_567.jsonl#/f-supp/567/1146-01; Unicode character offsets [28875:28988] (end exclusive); SHA-256 3836bc32665b8e1a72ea181c77043419d514089c013853f5fc10624d665e146c. |
| /f-supp/567/1146-01 — United States District Court for the District of New Jersey · 1983 | Interstate transportation of stolen or fraudulently obtained property (18 U.S.C. §§ 2314, 2315) | not Counted merits instance applied / merits basis: pleaded; claim: (b),(c),(d) | interstate-transport-of-fraud-proceeds/value-and-knowledge-not-alleged | Plaintiff further alleges that since May 1981 defendants have transported and sold or caused to be transported and sold in interstate commerce, the industrial machinery fraudulently obtained from plaintiff.Source: docroot/ir/caselaw/f_supp_567.jsonl#/f-supp/567/1146-01; Unicode character offsets [26610:26816] (end exclusive); SHA-256 3836bc32665b8e1a72ea181c77043419d514089c013853f5fc10624d665e146c.However, the complaint does not specify whether defendants transported or caused to transport over $5,000 worth of fraudulently obtained goods.Source: docroot/ir/caselaw/f_supp_567.jsonl#/f-supp/567/1146-01; Unicode character offsets [30396:30539] (end exclusive); SHA-256 3836bc32665b8e1a72ea181c77043419d514089c013853f5fc10624d665e146c.plaintiff must allege that defendants transported or caused to transport with unlawful and fraudulent intent and with knowledge that the property was fraudulently obtainedSource: docroot/ir/caselaw/f_supp_567.jsonl#/f-supp/567/1146-01; Unicode character offsets [29850:30021] (end exclusive); SHA-256 3836bc32665b8e1a72ea181c77043419d514089c013853f5fc10624d665e146c.For the above reasons, I find plaintiff’s allegations of interstate transportation of fraudulently obtained goods to be deficient.Source: docroot/ir/caselaw/f_supp_567.jsonl#/f-supp/567/1146-01; Unicode character offsets [31038:31168] (end exclusive); SHA-256 3836bc32665b8e1a72ea181c77043419d514089c013853f5fc10624d665e146c. |
Court interpretations recorded from this case
interpretation
A corporation such as Southmost and Tri-State could not employ itself or associate with itself.
/f-supp/567/1146-01 — United States District Court for the District of New Jersey · 1983
A corporation such as Southmost and Tri-State could not employ itself or associate with itself.Source:
docroot/ir/caselaw/f_supp_567.jsonl#/f-supp/567/1146-01; Unicode character offsets [9355:9450] (end exclusive); SHA-256 3836bc32665b8e1a72ea181c77043419d514089c013853f5fc10624d665e146c.Under § 1962(c), a corporate defendant cannot be both the "person" and the "enterprise" (nor can it evade distinctness merely by defining the enterprise as the corporation plus its own employees/agents acting in the course of business).
interpretation
The Court explained that each person must perform a role in the group which is consistent with the enterprise’s organizational structure and which furthers the activities of the organization.
/f-supp/567/1146-01 — United States District Court for the District of New Jersey · 1983
The Court explained that each person must perform a role in the group which is consistent with the enterprise’s organizational structure and which furthers the activities of the organization.Source:
docroot/ir/caselaw/f_supp_567.jsonl#/f-supp/567/1146-01; Unicode character offsets [16272:16463] (end exclusive); SHA-256 3836bc32665b8e1a72ea181c77043419d514089c013853f5fc10624d665e146c.Associates must function as a continuing unit over time rather than committing isolated, uncoordinated offenses.
interpretation
It appears from the definition of “pattern of racketeering activity” that any combination of two listed offenses may constitute a “pattern” for RICO purposes.
/f-supp/567/1146-01 — United States District Court for the District of New Jersey · 1983
It appears from the definition of “pattern of racketeering activity” that any combination of two listed offenses may constitute a “pattern” for RICO purposes.Source:
docroot/ir/caselaw/f_supp_567.jsonl#/f-supp/567/1146-01; Unicode character offsets [26020:26178] (end exclusive); SHA-256 3836bc32665b8e1a72ea181c77043419d514089c013853f5fc10624d665e146c.Alternative to `debt` ("or collection of unlawful debt"). Under H.J. Inc. v. Northwestern Bell, statutory minimum of two predicates within 10 years is necessary but not sufficient: requires relatedness + continuity (`pattern.relatedness` and `pattern.continuity`).
interpretation
The elements of an indictable offense under the federal mail and wire fraud statutes are: (1) a scheme designed to defraud or to obtain money or property by false pretenses and (2) use of the mails or interstate wires (including interstate telephone calls) in furtherance of the fraudulent scheme.
/f-supp/567/1146-01 — United States District Court for the District of New Jersey · 1983
The elements of an indictable offense under the federal mail and wire fraud statutes are: (1) a scheme designed to defraud or to obtain money or property by false pretenses and (2) use of the mails or interstate wires (including interstate telephone calls) in furtherance of the fraudulent scheme.Source:
docroot/ir/caselaw/f_supp_567.jsonl#/f-supp/567/1146-01; Unicode character offsets [27057:27354] (end exclusive); SHA-256 3836bc32665b8e1a72ea181c77043419d514089c013853f5fc10624d665e146c.Most common civil RICO predicate; subject to Rule 9(b) particularity and resistance from courts where plaintiffs attempt to dress up an ordinary breach of contract as mail/wire fraud.
interpretation
plaintiff must allege that defendants transported or caused to transport with unlawful and fraudulent intent and with knowledge that the property was fraudulently obtained
/f-supp/567/1146-01 — United States District Court for the District of New Jersey · 1983
plaintiff must allege that defendants transported or caused to transport with unlawful and fraudulent intent and with knowledge that the property was fraudulently obtainedSource:
docroot/ir/caselaw/f_supp_567.jsonl#/f-supp/567/1146-01; Unicode character offsets [29850:30021] (end exclusive); SHA-256 3836bc32665b8e1a72ea181c77043419d514089c013853f5fc10624d665e146c.Enumerated in § 1961(1)(B).
interpretation
However, this judicially imposed requirement of a “racketeering enterprise injury” seems artificial and unwarranted by the language of the RICO statute.
/f-supp/567/1146-01 — United States District Court for the District of New Jersey · 1983
However, this judicially imposed requirement of a “racketeering enterprise injury” seems artificial and unwarranted by the language of the RICO statute.Source:
docroot/ir/caselaw/f_supp_567.jsonl#/f-supp/567/1146-01; Unicode character offsets [32442:32594] (end exclusive); SHA-256 3836bc32665b8e1a72ea181c77043419d514089c013853f5fc10624d665e146c.Damages must be concrete, clear, and definite (not speculative or unripe pending exhaustion of contractual/collateral remedies), and must be domestic under RJR Nabisco v. European Community (579 U.S. 325 (2016)).