United States Court of Appeals for the Ninth Circuit · 1996-04-04
18usc1962: author: Fable · historical QA: PASS (QA2, neov2/qa/cases-QA2.md) · changed after review; current content not independently reviewed
Case and law context
Role: applied; posture: civil; second amended complaint dismissed under 12(b)(6) without leave to amend for failure to allege an enterprise; plaintiffs appeal; affirmed; result: claimant-lost; claim: (c),(d)
Uncertainty
None recorded
Misfit
The holding is a RELATION between two elements (enterprise must be structurally separate from the pattern of racketeering), same shape as the person/enterprise distinctness misfit in Cedric Kushner; recorded under `enterprise` with a failure-mode variant. The .law file now has both a sub-element enterprise.distinct-from-pattern and a constraint on (enterprise, pattern); these blocks were left on the bare id, and a block cannot attach to a constraint.
The Turkette two-prong test (ongoing organization / continuing unit) splits the element and the court decides the prongs oppositely. `enterprise.continuing-unit` is now declared in the .law file, but prong 1 has no sub-id (enterprise.organization) and sits on the bare `enterprise` id.
The rule announced here (ascertainable structure beyond the predicate acts) was later abrogated/relaxed (Odom v. Microsoft, 9th Cir. 2007 en banc; Boyle, 2009); the notation has no field for "rule superseded" or temporal validity of a `rule` line.
Circuit-split survey (six circuits vs two) is the bulk of the opinion; no construct for "court chose interpretation A over B", only the resulting `rule`.
Denial of leave to amend (procedural, futility) is part of the result but has no place in the element model.
B · Case × element grid
Top-level elements follow claim order in panels of up to six elements. Case rows repeat across panels. Every recorded block retains its holding and basis; multiple blocks are not merged into a case-level verdict. ✓ satisfied · ✗ not satisfied · ○ not reached · · not addressed. Muted blocks are not counted. Sub-element evidence remains on case and element pages.
Elements 1–6 of 19
| Case | Culpable person (§ 1961(3)) distinct from the enterprise under (c) | Pattern of racketeering activity (§ 1961(5)): at least two predicate acts with relatedness and continuity | Racketeering activity (§ 1961(1) enumerated state and federal predicate offenses) | Collection of an unlawful debt (§ 1961(6)) — alternative to pattern of racketeering activity | Use or investment of racketeering income in an enterprise (§ 1962(a)) | Enterprise (§ 1961(4)): legal entity or association-in-fact |
|---|---|---|---|---|---|---|
| Chang v. Chen — 80 F.3d 1293 (1996) · United States Court of Appeals for the Ninth Circuit · 1996 (18usc1962: author: Fable · historical QA: PASS (QA2, neov2/qa/cases-QA2.md) · changed after review; current content not independently reviewed) | ○ not reached · basis not recordedNot counted: applied/merits | ○ not reached · basis not recordedNot counted: applied/merits | ○ not reached · basis not recordedNot counted: applied/merits | · not addressed | · not addressed |
Elements 7–12 of 19
| Case | Interstate or foreign commerce nexus | De minimis open-market securities investment proviso (§ 1962(a)) | Acquire or maintain interest in or control of an enterprise (§ 1962(b)) | Defendant employed by or associated with the enterprise (§ 1962(c)) | Conduct or participate in the conduct of enterprise affairs (§ 1962(c) operation or management test) | Conspiracy to violate § 1962(a), (b), or (c) (§ 1962(d)) |
|---|---|---|---|---|---|---|
| Chang v. Chen — 80 F.3d 1293 (1996) · United States Court of Appeals for the Ninth Circuit · 1996 (18usc1962: author: Fable · historical QA: PASS (QA2, neov2/qa/cases-QA2.md) · changed after review; current content not independently reviewed) | · not addressed | · not addressed | · not addressed | · not addressed | ○ not reached · basis not recordedNot counted: applied/merits |
Elements 13–18 of 19
| Case | Civil RICO injury to business or property (18 U.S.C. § 1964(c)) | But-for and proximate causation ("by reason of", 18 U.S.C. § 1964(c)) | Statute of limitations (4-year civil under Agency Holding; 5-year criminal under 18 U.S.C. § 3282) | Claim preclusion / release by prior class-action settlement | Civil aiding and abetting a RICO violation (rejected as a private cause of action) | Fifth Amendment Double Jeopardy bar against successive RICO conspiracy/substantive prosecutions |
|---|---|---|---|---|---|---|
| Chang v. Chen — 80 F.3d 1293 (1996) · United States Court of Appeals for the Ninth Circuit · 1996 (18usc1962: author: Fable · historical QA: PASS (QA2, neov2/qa/cases-QA2.md) · changed after review; current content not independently reviewed) | · not addressed | · not addressed | · not addressed | · not addressed | · not addressed | · not addressed |
Elements 19–19 of 19
| Case | Parol evidence rule raised to bar extrinsic evidence of fraudulent misrepresentations |
|---|---|
| Chang v. Chen — 80 F.3d 1293 (1996) · United States Court of Appeals for the Ninth Circuit · 1996 (18usc1962: author: Fable · historical QA: PASS (QA2, neov2/qa/cases-QA2.md) · changed after review; current content not independently reviewed) | · not addressed |
Instances and excluded annotation blocks
| Case | Element | Holding and scope | Pattern | Exact source quotations |
|---|---|---|---|---|
| Chang v. Chen — 80 F.3d 1293 (1996) · United States Court of Appeals for the Ninth Circuit · 1996 — not reached (18usc1962: author: Fable · historical QA: PASS (QA2, neov2/qa/cases-QA2.md) · changed after review; current content not independently reviewed) | Conduct or participate in the conduct of enterprise affairs (§ 1962(c) operation or management test) | not_reached Excluded from merits counts applied / merits claim: (c),(d) Dictum only: had the brokerage itself been pleaded as the enterprise, the sellers could not be defendants absent management/control over it (Reves). | Unspecified route | No source quotation recorded for this block. |
| Chang v. Chen — 80 F.3d 1293 (1996) · United States Court of Appeals for the Ninth Circuit · 1996 — not · pleaded (18usc1962: author: Fable · historical QA: PASS (QA2, neov2/qa/cases-QA2.md) · changed after review; current content not independently reviewed) | Conspiracy to violate § 1962(a), (b), or (c) (§ 1962(d)) | not Counted merits instance applied / merits basis: pleaded; claim: (c),(d) (d) claim falls with the (c) claim; no independent analysis of agreement. | derivative-of-substantive-claim/no-enterprise-alleged | Without a proper allegation of an enterprise, neither the § 1962(c) nor the § 1962(d) claims can survive Appellees’ motion to dismiss.Source: docroot/ir/caselaw/f3d_80.jsonl#/f3d/80/1293-01; Unicode character offsets [25246:25380] (end exclusive); SHA-256 26cde6fa4ab06011a337a0eb0c4944860e40f7ebb537337a05e0b8e6b410e5bb. |
| Chang v. Chen — 80 F.3d 1293 (1996) · United States Court of Appeals for the Ninth Circuit · 1996 — not · pleaded (18usc1962: author: Fable · historical QA: PASS (QA2, neov2/qa/cases-QA2.md) · changed after review; current content not independently reviewed) | Enterprise (§ 1961(4)): legal entity or association-in-fact | not Counted merits instance applied / merits basis: pleaded; claim: (c),(d); theory: separate structure supplied by naming the non-party brokerage George Realty as a member; subject: theory=separate structure supplied by naming the non-party brokerage George Realty as a member A corporate member supplies separate structure only if it actually plays a role (shield, front, conduit for proceeds); merely listing a legal entity does not. | passive-corporation-named-as-member | The second amended complaint alleged that George Realty was part of the enterprise, but did not name George Realty as a defendant and did not explain George Realty’s relationship to or participation in the alleged enterprise, except to note that Eddie Lin was the real estate agent representing George Realty.Source: docroot/ir/caselaw/f3d_80.jsonl#/f3d/80/1293-01; Unicode character offsets [23320:23629] (end exclusive); SHA-256 26cde6fa4ab06011a337a0eb0c4944860e40f7ebb537337a05e0b8e6b410e5bb.Although George Realty had a legal existence separate from the racketeering activity, Appellants did not allege that it participated in the racketeering activity.Source: docroot/ir/caselaw/f3d_80.jsonl#/f3d/80/1293-01; Unicode character offsets [23630:23792] (end exclusive); SHA-256 26cde6fa4ab06011a337a0eb0c4944860e40f7ebb537337a05e0b8e6b410e5bb.It is true that the involvement of a corporation, which has an existence separate from its participation in the racketeering activity, can satisfy the enterprise element’s requirement of a separate structure.Source: docroot/ir/caselaw/f3d_80.jsonl#/f3d/80/1293-01; Unicode character offsets [21908:22116] (end exclusive); SHA-256 26cde6fa4ab06011a337a0eb0c4944860e40f7ebb537337a05e0b8e6b410e5bb.Thus, the mention of George Realty in the description of the alleged enterprise fails to satisfy the separate structure requirement.Source: docroot/ir/caselaw/f3d_80.jsonl#/f3d/80/1293-01; Unicode character offsets [24413:24545] (end exclusive); SHA-256 26cde6fa4ab06011a337a0eb0c4944860e40f7ebb537337a05e0b8e6b410e5bb. |
| Chang v. Chen — 80 F.3d 1293 (1996) · United States Court of Appeals for the Ninth Circuit · 1996 — not · pleaded (18usc1962: author: Fable · historical QA: PASS (QA2, neov2/qa/cases-QA2.md) · changed after review; current content not independently reviewed) | Enterprise (§ 1961(4)): legal entity or association-in-fact | not Counted merits instance applied / merits basis: pleaded; claim: (c),(d); party: Lin and the two Gabryehs (sellers + sales agent); theory: association-in-fact structured only by the repeated land-fraud transactions; subject: party=Lin and the two Gabryehs (sellers + sales agent); theory=association-in-fact structured only by the repeated land-fraud transactions Same roles repeated across ~31 transactions (same modus operandi) is not structure: no decision-making apparatus, no separate mechanism for distributing proceeds. One allegation that sellers "directed" the agent shows at most a conspiracy, and a conspiracy is not an enterprise. Adopts the then-majority "separate ascertainable structure" test (later relaxed by Boyle v. United States, 2009 -- not in this opinion). | no-structure-beyond-predicate-acts | According to the second amended complaint, Appellee Eddie Lin, Appellee Eugene Gabryeh, Appellee Marian Gabryeh and George Realty formed a RICO enterprise by associating in fact to conduct the above described fraudulent real estate transactions.Source: docroot/ir/caselaw/f3d_80.jsonl#/f3d/80/1293-01; Unicode character offsets [4539:4784] (end exclusive); SHA-256 26cde6fa4ab06011a337a0eb0c4944860e40f7ebb537337a05e0b8e6b410e5bb.Each Appellee allegedly was in charge of and played a vitally important role in controlling and managing a specific phase of the enterprise’s activities.Source: docroot/ir/caselaw/f3d_80.jsonl#/f3d/80/1293-01; Unicode character offsets [4785:4938] (end exclusive); SHA-256 26cde6fa4ab06011a337a0eb0c4944860e40f7ebb537337a05e0b8e6b410e5bb.Each Appellee conducted his or her role in the alleged fraudulent real estate transactions autonomously.Source: docroot/ir/caselaw/f3d_80.jsonl#/f3d/80/1293-01; Unicode character offsets [19639:19743] (end exclusive); SHA-256 26cde6fa4ab06011a337a0eb0c4944860e40f7ebb537337a05e0b8e6b410e5bb.The proceeds were allocated to Appellees in a manner consistent with ordinary real estate transactions.Source: docroot/ir/caselaw/f3d_80.jsonl#/f3d/80/1293-01; Unicode character offsets [21324:21427] (end exclusive); SHA-256 26cde6fa4ab06011a337a0eb0c4944860e40f7ebb537337a05e0b8e6b410e5bb.We hold that a RICO enterprise must have an ascertainable structure separate and apart from the structure inherent in the conduct of the pattern of racketeering activity.Source: docroot/ir/caselaw/f3d_80.jsonl#/f3d/80/1293-01; Unicode character offsets [1065:1235] (end exclusive); SHA-256 26cde6fa4ab06011a337a0eb0c4944860e40f7ebb537337a05e0b8e6b410e5bb.The structure should provide “some mechanism for controlling and directing the affairs of the group on an ongoing, rather than an ad hoe, basis.”Source: docroot/ir/caselaw/f3d_80.jsonl#/f3d/80/1293-01; Unicode character offsets [17926:18071] (end exclusive); SHA-256 26cde6fa4ab06011a337a0eb0c4944860e40f7ebb537337a05e0b8e6b410e5bb.Rather, it is sufficient to show that the organization has an existence beyond that which is merely necessary to commit the predicate acts of racketeering.Source: docroot/ir/caselaw/f3d_80.jsonl#/f3d/80/1293-01; Unicode character offsets [18362:18517] (end exclusive); SHA-256 26cde6fa4ab06011a337a0eb0c4944860e40f7ebb537337a05e0b8e6b410e5bb.Appellants have not alleged a structure to the organization beyond that which was inherent in the alleged acts of racketeering-activity.Source: docroot/ir/caselaw/f3d_80.jsonl#/f3d/80/1293-01; Unicode character offsets [19041:19177] (end exclusive); SHA-256 26cde6fa4ab06011a337a0eb0c4944860e40f7ebb537337a05e0b8e6b410e5bb.This lone statement that the Gabryches directed Lin’s actions is insufficient to establish that there was an enterprise separate and apart from the predicate acts.Source: docroot/ir/caselaw/f3d_80.jsonl#/f3d/80/1293-01; Unicode character offsets [20225:20388] (end exclusive); SHA-256 26cde6fa4ab06011a337a0eb0c4944860e40f7ebb537337a05e0b8e6b410e5bb. |
| Chang v. Chen — 80 F.3d 1293 (1996) · United States Court of Appeals for the Ninth Circuit · 1996 — satisfied · pleaded (18usc1962: author: Fable · historical QA: PASS (QA2, neov2/qa/cases-QA2.md) · changed after review; current content not independently reviewed) | Continuing-unit requirement for association-in-fact enterprise | satisfied Counted merits instance applied / merits basis: pleaded; claim: (c),(d) Turkette prong 2 met; the claim fails on prong 1 (organization/structure) alone. | continuing-unit/same-participants-repeated-transactions | The complaint described in detail three land transactions between Appellants and Appellees, and referred to twenty-eight additional transactions involving Appel-lees and buyers who are not parties to the present action.Source: docroot/ir/caselaw/f3d_80.jsonl#/f3d/80/1293-01; Unicode character offsets [2893:3112] (end exclusive); SHA-256 26cde6fa4ab06011a337a0eb0c4944860e40f7ebb537337a05e0b8e6b410e5bb.establishing the existence of an associated-in-fact enterprise requires proof (1) of an ongoing organization, formal or informal, and (2) that the various associates function as a continuing unit.Source: docroot/ir/caselaw/f3d_80.jsonl#/f3d/80/1293-01; Unicode character offsets [7959:8155] (end exclusive); SHA-256 26cde6fa4ab06011a337a0eb0c4944860e40f7ebb537337a05e0b8e6b410e5bb.The second amended complaint adequately alleged that Appellees, as associates, functioned as a continuing unit.Source: docroot/ir/caselaw/f3d_80.jsonl#/f3d/80/1293-01; Unicode character offsets [8187:8298] (end exclusive); SHA-256 26cde6fa4ab06011a337a0eb0c4944860e40f7ebb537337a05e0b8e6b410e5bb. |
| Chang v. Chen — 80 F.3d 1293 (1996) · United States Court of Appeals for the Ninth Circuit · 1996 — not reached (18usc1962: author: Fable · historical QA: PASS (QA2, neov2/qa/cases-QA2.md) · changed after review; current content not independently reviewed) | Pattern of racketeering activity (§ 1961(5)): at least two predicate acts with relatedness and continuity | not_reached Excluded from merits counts applied / merits claim: (c),(d) | Unspecified route | No source quotation recorded for this block. |
| Chang v. Chen — 80 F.3d 1293 (1996) · United States Court of Appeals for the Ninth Circuit · 1996 — not reached (18usc1962: author: Fable · historical QA: PASS (QA2, neov2/qa/cases-QA2.md) · changed after review; current content not independently reviewed) | Culpable person (§ 1961(3)) distinct from the enterprise under (c) | not_reached Excluded from merits counts applied / merits claim: (c),(d) | Unspecified route | No source quotation recorded for this block. |
| Chang v. Chen — 80 F.3d 1293 (1996) · United States Court of Appeals for the Ninth Circuit · 1996 — not reached (18usc1962: author: Fable · historical QA: PASS (QA2, neov2/qa/cases-QA2.md) · changed after review; current content not independently reviewed) | Racketeering activity (§ 1961(1) enumerated state and federal predicate offenses) | not_reached Excluded from merits counts applied / merits claim: (c),(d) District court also found two predicate acts not pleaded with particularity against two defendants; the panel expressly declined to resolve that. | Unspecified route | No source quotation recorded for this block. |
Court interpretations recorded from this case
interpretation
establishing the existence of an associated-in-fact enterprise requires proof (1) of an ongoing organization, formal or informal, and (2) that the various associates function as a continuing unit.
Chang v. Chen — 80 F.3d 1293 (1996) · United States Court of Appeals for the Ninth Circuit · 1996 (18usc1962: author: Fable · historical QA: PASS (QA2, neov2/qa/cases-QA2.md) · changed after review; current content not independently reviewed)
establishing the existence of an associated-in-fact enterprise requires proof (1) of an ongoing organization, formal or informal, and (2) that the various associates function as a continuing unit.Source:
docroot/ir/caselaw/f3d_80.jsonl#/f3d/80/1293-01; Unicode character offsets [7959:8155] (end exclusive); SHA-256 26cde6fa4ab06011a337a0eb0c4944860e40f7ebb537337a05e0b8e6b410e5bb.Associates must function as a continuing unit over time rather than committing isolated, uncoordinated offenses.