17

- 1162

- cv D’Addario v. D’Addario, et al.



# United States Court of Appeals

FOR THE SECOND CIRCUIT

______________

August Term, 2017

(Argued: October 31, 2017 Decided: August 14, 2018 )

Docket No. 17

- 1162

- cv

______________

V IRGINIA A. D’A DDARIO
, individually, and on behalf of the F. Francis D’Addario Testamentary Trust and the Virginia D’Addario Trust; and

V IRGINIA A. D’A DDARIO
, E XECUTRIX
, as Executrix of the Probate Estate of
Ann. T. D’Addario, Deceased, and on behalf of the F. Francis D’Addario Testamentary Trust and the Ann T. D’Addario Marital Trust,

Plaintiff s

- Appellant s ,

– v.

–

D AVID D’A DDARIO
, M ARY L OU D’A DDARIO K ENNEDY
, G REGORY S. G ARVEY
, R ED K NOT A CQUISITIONS
, LLC, S ILVER K NOT
, LLC, N ICHOLAS V ITTI
,

Defendants

- Appellants

. *

______________

B e f o r e :

L YNCH and C ARNEY
, C ircuit Judges , and H ELLERSTEIN
, District Judge

. †

______________ 1

* The Clerk of Court is directed to amend the caption to conform to the above.

† Judge Alvin K. Hellerstein, of the United States District Court for the Southern District of New

York

, sitting by designation

.2 Virginia D’Addario appeals the dismissal of her claim brought under the 1

Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § § 1961 et seq.

, 2 against her brother, David D’Addario ; her sister, Mary Lou D’Addario Kennedy ; 3 Gregory Garve y; Nicholas Vitti ; Red Knot Acquisitions, LLC ; and Silver Knot, LLC. 4 Virginia’s claim , which she asserts both individually and as Executrix of her mother’s 5

estate, arises out of the management of her father’s probate estate (the “Estate”) over 6

several decade s by her brother David

. 7

V irginia’s father, Connecticut resident and entrepreneur F . F rancis D’Addario, 8 died unexpectedly in 1986 and bequeathed his fortune

— once estimated to have a net 9

value above $111 million

— to his wife and their five children. Virginia ’s youngest 10
brother, David, has been an Executor of the Estate since their father’s death

. Since then

, 11 she alleges, he has systematically looted the assets of the Estate, with the active 12

assistance of their sister Mary Lou and David’s friends Nicholas Vit ti and Gregory 13 Garvey, and by means of two corporate entities formed by David and Garvey. Virginia 14

contends that the Estate

— which has remained open in Connecticut Probate Court for 15 more than thirty years

— is now insolvent and that , because of D efendants’ ac tions, 16

neither she nor her mother’s estate will receive any portion of the multi

- million

- dollar 17

inheritance to which they were entitled . Virginia seeks damages based on two types of 18 injury: the loss of the inheritance they would have received if not for David’s fraudulent 19

schemes and the approximately $200,000 in legal expenses that she has incurred in the 20

course of Connecticut state court proceedings in which she sought to remove David as 21

Executor. The United States District Court for the District of Con necticut (Arterton, J .) 22

dismissed her c omplaint under Federal Rule of Civil Procedure 12(b)(6) for failure to 23

state a claim , and declined to exercise supplemental jurisdiction over related state law 24

claims

. 25

We conclude that: (1) Virginia’s claim for distribution of her inheritance and that 26

of her mother’s estate is not ripe under RICO becaus e the Estate is not closed and the 27

amount of the lost inheritance is too speculative ; (2) her clai m under RICO for legal 28

expenses incurre d in pursuing her grievances against David and other defendants is 29 ripe; (3 ) she has plausibly alleged that her legal expense injuries were proximately 30 caused by Defendants’ RICO violations; ( 4 ) she has adequately pleaded that David, 31 Garvey, and Red Knot v iolated 18 U.S.C. § 1962(b); and (5 ) she has adequately pleaded 32 that all six defendants violated 18 U.S.C. § 1962(c). Accordingly, we VACATE the 33 District Court’s judgment dismissing in full Virginia’s RICO claim and related state law 343 claims both as brought on her own behalf and as Executrix, and we REMAND the ca u se 1 for further proceeding s in accordance with this opinion

. 2

V ACATED AND R EMANDED

.

______________ 3

F. D EAN A RMSTRONG ( Edward C. Taiman, Jr., Sabia Taiman, 4
LLC, Hartford, CT, on the brief )

, Armstrong Law Firm 5
PC, Frankfort, IL

, for Plaintiff s

- Appellant s

. 6

7

A LFRED U. P AVLIS ( Tony Miodonka, on the brief )

, Finn Dixon 8 & Herling LLP

, Stamford, CT

, for Defendants

- Appellees 9 David D’Addario, Mary Lou D’Addario Kennedy, Silver 10
Knot, LLC, and Nicholas Vitti

. 11

12

N ATHAN B UCHOK (Brian E. Spears

, on the brief )

, Spears 13 Manning LLC , Southport, CT

, for Defendants

- Appellees 14 Gregory S. Garvey and Red Knot Acquisitions, LLC

. 15

______________

S USAN L. C ARNEY
, Circuit Judge :

Virginia D’Addario appeals the dismissal of her clai m brought under the 16

Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. §§ 1961 et seq.

, 17

against her brother, David D’Addario; her sister, Mary Lou D’Addario Kennedy; 18

Gregory Garvey; Nicholas Vitti; Red Knot Acquisitions, LLC; and Silver Knot, LLC. 19

Virginia’s claim, which she asserts both individually and as Executrix of her mother’s 20

estate, arises out of the management of her father’s probate estate (the “Estate”) over 21

several decades by her brother David. 22

Virginia’s father, Connecticut resident and entrepreneur F. Francis D’Addario, 23

died unexpectedly in 1986 and bequeathed his fortune

— once estimated to have a net 244 value above $111 million

— to his wife and their five children. Virginia’s youngest 1

brother, David, has been an Executor of the Estate since their father’s death. Since then, 2

she alleges, David has systematically looted the assets o f the Estate, with the active 3

assistance of her sister Mary Lou, David’s friends Nicholas Vitti and Gregory Garvey, 4

and by means of two corporate entities formed by David and Garvey. Virginia contends 5

that the Estate

— which has remained open in Connecticut Probate Court for more than 6

thirty years

— is now insolvent and that, because of Defendants’ actions, neither she nor 7

her mother’s estate will receive any portion of the multi

- million

- dollar inheritance to 8

which they were entitled. Virginia seeks damages bas ed on two types of injury: the loss 9

of the inheritance they would have received if not for David’s fraudulent schemes and 10

the approximately $200,000 in legal expenses that she has incurred in the course of 11

Connecticut state court proceedings in which she s ought to remove David as Executor. 12

The United States District Court for the District of Connecticut (Arterton, J .) dismissed 13

her complaint under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim, 14

and declined to exercise supplemental ju risdiction over related state law claims. 15

We conclude that: (1) Virginia’s claim for distribution of her inheritance and that 16

of her mother’s estate is not ripe under RICO because the Estate is not closed and the 17

amount of the lost inheritance is too specu lative; (2) her claim under RICO for legal 18

expenses incurred in pursuing her grievances against David and other defendants is 19

ripe; (3) she has plausibly alleged that her legal expense injuries were proximately 20

caused by Defendants’ RICO violations; (4) sh e has adequately pleaded that David, 21

Garvey, and Red Knot violated 18 U.S.C. § 1962(b); and (5) she has adequately pleaded 22

that all six defendants violated 18 U.S.C. § 1962(c). Accordingly, we VACATE the 235 District Court’s judgment dismissing in full Virgini a’s RICO claim and related state law 1

claims both as brought on her own behalf and as Executrix, and we REMAND the cause 2

for further proceedings in accordance with this opinion

. 3

BACKGROUND 1 4

I. Francis’s d eath and David’s management of the Estate 5

F. Francis “Hi Ho” D’Adda rio (“Francis”), a successful Connecticut businessman 6

and th e head of D’Addario Industries, died unexpectedly in early 1986, the victim of an 7

airplane crash

. At the time of his death

, his net worth was estimated to exceed $111 8

million. He was su rvived by his wife, Ann, and their five children : in order of birth

, 9

Virginia, Larry, Mary Lou, Lisa, and David. 10

Shortly after the accident, Francis’s will (the “Will”) was filed for probate in the 11

Probate Court of Trumbull, Connecticut. That court appointed Francis’s two sons, 12

David and Larry, to serve with three non

- family members as Executors of the Estate. 2 13

At the time of his appointment , David, the youngest of the five D’Addario sibling s , was 14

24 years old and had been working for his fathe r’s business

. A s an Executor, David was 15

suddenly able to exert significant control over the entirety of the business empire 16

1 In reviewing the District Court’s grant of a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), “we accept as true all facts alleged in the Complaint, drawing all reasonable inferences in favor of the plaintiff.” K och v. Christie’s Int’l PLC , 699 F.3d 141, 145 (2d Cir. 2012). We therefore state the facts here as pleaded in the First Amended Complaint (“Complaint”). We express no view as to their accuracy.

2 The appointments of the three non

- family members ended over time. David and Larry have been the Estate’s sole executors for roughly the last 15 years.6 known as D’Addario Industries : substantially all of his father’s business assets lay 1

within the Estate. 2

The W ill provided that one

- half of Francis’s assets would be placed into a marital 3

trust for the benefit of his wife, Ann D’Addario (“Ann”); the other half would be 4

divided equally among their five children. The anticipated distributions, however, have 5

never been made. When the Dist rict Court dismissed Virginia’s Complaint in March 6

2017, m ore than thirty years after Francis’s death, his Estate remain ed open in the 7

Connecticut Probate Court , and the record before us reflects no change since then

. 8

The extensive passage of time has had a significant impact on the siblings’ 9

respective expectations regarding their inheritance s, both because of the extensive 10

transactions undertaken by David, as described in the Complaint, but also because, 11

u nder the terms of the W ill, if any of the five chi ldren predecease s the other s while the 12

Estate is still open , the deceased child ’s interests return to the Estate for pro rata 13

distribution to the remainin g siblings. Thus, i n 1990, when Lisa D’Addario died , her 14

interest as legatee passed back to the Estate in accordance with the Will’s provisions

. 3 15

3 Francis’s wife, Ann, also died in the interim between Francis’s death and the filing of this suit

, but her interest by way of the m arital trust has not devolved to the Estate; rather, Ann’ s own estate remains entitled to one

- half of Francis’s Estate. Virginia is Executrix of her mother’s estate. In this suit, Virginia asserted identical RICO and state law claims on behalf of Ann’s

e state as well as on her own behalf as a legatee under Francis’s Will and on behalf of several

trusts

. Thus

, i n its opinion dismissing the First Amended Complaint, the District Court uses
“Plaintiffs,” in the plural, to describe t he parties seeking relief. In this opinion, we refer simply to “Virginia” when discussing the proponent of the claims at issue on appeal, as no party has asserted any material difference between Virginia individually , and Virginia as Executrix, as

claimant s and legatees.7 In late 1987, Virginia obtained an advance from the Estate toward her 1

distributional interest . The advance took the form of a non

- recourse loan to her in the 2

amount of $3.9 million

, and was documented by a promi ssory note. In exchange for 3

permitting the advance , David extracted a promise from Virginia (as Virginia 4

acknowledges) that she would no longer “participate in or take part in Estate 5

deliberations or decisions as regards the Estate or its property,” and th at she would 6

waive “all rights . . . in her favor against the Executors as regards their administration of 7

the Estate and the validity of their decisions, . . . except for willful fraud, malfeasance or 8

dishonesty.” App. 62 (Am. Compl. ¶ 17). David also vow ed at the same time , Virginia 9

charges

, t hat Virginia “would never receive another penny from the Estate”

— by which 10

he meant that he did not intend for the Estate ever to pay out her distributional share. 11

Id. at 63 (Am. Compl. ¶ 18). Because of the Will’s provision with regard to the 12

consequences of the death of a sibling

, all understood that David would benefit 13

financially if Virginia ( but not David) died before the Estate closed. He told her , she 14

says, o n several occasions

, “I’m 15 years younger than you, I’ll outlive you, and I can 15

keep the Estate open until after you die.” Id. (emphasis omitted). 16

In keeping with that threat, Virginia alleges, the Estate remains open. N o 17

distributions h ad been made as of 201 6 , when she filed suit (or, indeed, has been m ade 18

to date)

. The Connecticut Probate Court has effected no meaningful oversight of 19

David’s activities , she charges

. Rather, David and t he Estate ha ve successfully side

20

stepped enforcement of court orders requiring produc tion of discover y related to the 21

Estate’s financial management. David has filed interim accountings of the Estate’s assets 22

with the Probate Court only infrequently, and , in any event, the accountings that he has 238 filed have been both vague and inaccurate because they omitted “numerous” pro perty 1

transactions

. Id. at 65 (Am. Compl. ¶ 24). V irginia also alleges that from 1986 until 2010 2

David made “substantial (but undisclosed)” contributions to the reelection campaign s 3

of the Connecticut Probate Court judge who presided over the Estate

. Id. a t 93 (Am. 4

Compl. ¶ 99). When the se contributions came to light in 2010, she asserts, the probate 5

judge recused himself from further supervision of the Estate

. Id. 6

II. David ’s s chemes for enrichment 7

The Complaint alleges that David “plunder[ed], pillage[d,] an d loot[ed] the 8

assets of the Estate to the extent that the Estate is now insolvent . . . .” App. 66 (Am. 9

Compl. ¶ 27)

. David “ran the Estate as his personal piggy bank,” conducting its affairs 10

for his own financial benefit , both to the detriment of his sister Virginia and his 11

mother’s estate and in violation of his fiduciary duties and RICO

. Id. at 64 (Am. Compl. 12

¶ 21). In the Complaint, Virginia identifies and details several specific “schemes” 13

through which David allegedly siph oned value from the Estate to himself . Virginia 14

alleges that defendant Nicholas Vitti , David’s “personal financial advisor and confidant 15

for matters pertaining to the Estate,” assisted and advised David in all matters related 16

to the Estate , including many of the identified schemes

. App. 60 (Am. Compl. ¶ 8.6). 17

The remaining defendants (Mary Lou, David’s friend Gregory Garvey, and the entities 18

Red Knot Acquisitions, LLC and Silver Knot , LLC ) were involved in only certain of the 19

questionable transactions , as s et forth below

. 4 W e describe th e se ventures in 20

4 Although Larry remains an Executor and was involved in (and would have benefited from) many of the schemes the Complaint describes, Virginia does not allege that he committed fraud
or “willful misconduct,” and does not name him as a defendant. App’x 100 (Am. Compl. ¶ 115).9 approximately the order of their inception , including here much of the narrative 1

provided in the Complaint, as its detail bears on the sufficiency of the Complaint in 2

fend ing off Defendants’ Rule 12(b)(6) chal lenges. 3

A. The Honeyspot Road s cheme 4

In 1986, t he Estate owned a 16

- acre undeveloped plot of real estate on Honeyspot 5

Road in Stratford, Connecticut

. The property was leased by Pace Motor Lines, Inc., a 6

trucking company owned by the Pacelli brothers, friends of the D’Addario family. 7

Shortly a fter Francis’s d eath , the p roperty was appraised and valued at $3.8 million. In 8

January 1989 , the Estate accepted an offer to purchase the land for $3.2 million. This 9

sale , however, never closed

. 10

Instead, “ [s] ometime afte r 1990,” David stopped having the Estate pay real estate 11

taxes on the p roperty

. App. 67 (Am. Compl. ¶ 32). In 1996, after the Estate had accrued 12

a real estate tax deliquency of more than $149,000, the Town scheduled the property for 13

a tax foreclosure sale. Rather than pa y the overdue taxes

— although the Estate was 14

legally and financially able to do so

— David allowed the foreclosure sale to occur

. At 15

that sale, in June 1996, t he p roperty was purchased by Dennis and William Miko, 16

friends of Mary Lou, for just o ver $179,000. 17

Although the Estate could have redeemed the property by paying its tax bill and 18

a penalty within one year of the sale , David elected not to do so. Instead, he set up a 19

limited liability company, Honeyspot Ventures, LLC (“HSV”), co

- owned by himself, 20

Mary Lou, and Larry

, and, in September 1997, HSV purchased the p roperty from the 21

Miko brothers for $250,000. Approximately one year after purchasing the parcel , HSV 22

sold it for $1.1 million to an entity owned by the Pacelli brothers. David, L arry, and 2310 Mary Lou divided the $850,000 profit evenly, and David proceeded to partner with the 1

Pace llis in a separate “very profitable” business venture. App. 69 (Am. Compl. ¶ ¶ 35

- 2

36). 3

B. The Red Knot f orbearance s cheme 4

When the Estate opened in March 1986, i t rep orted liabilities totaling $41,363,977 5

and assets totaling $162,636,000. Of the Estate’s roughly $41 million in debt, m ore than 6

half ($25,218,084) was owed to three banks: Connecticut National Bank, Connecticut 7

Bank and Trust Company, and People’s Bank (co llectively, the “Bank Group”). In 8

December 1990, the Bank Group , acting as one , loaned an additional $14 million to the 9

Estate. As a condition of the 1990 loan , the Executors agreed to abide by a “stringent 10

budget and strict reporting requirements,” with t he goal of selling assets to pay off the 11

Estate’s creditors

, including the Bank Group

, and timely clos ing the Estate. App. 73 12

(Am. Compl. ¶ 49). 13

The Executors breached these requirements and came nowhere near the stated 14

goal . Accordingly, in July 1992, the Bank Group turned to the Probate Court for relief

, 15

fil ing a “ Joint Application for Removal of Executors, ” and expressing “extreme[] 16

concern [] ” about the “negligent and improper manner in which the Executors have 17

administered this Estate

. ” App. 73

- 74 (Am. Compl. ¶¶ 50

- 51). They alleg ed that both 18

David and Larry had “serious conflicts of interest ” in light of their concurrent status as 19

Executors and beneficiaries of the Estate

. Id

. For five years thereafter, t he probate judge 20

who oversaw the Estate at that time issued no ruling on the removal motion. 21

By the end of December 1997, the Estate ow ed the Bank Group more than $48 22

million on the loan, in principal, accrued interest, and penalties

. Citing their own 2311 “ substantial financial difficulties,” the B ank Group offered to extinguish the entirety of 1

the Estate’s loan obligations to them, and release the liens it held on Estate assets

, in 2

exchange for a one

- time cash payment of $4,750,000. App. 75 (Am. Compl. ¶ 53). David 3

declined the offer . Instead, at David’s instance, his friend, defendant Gregory Garvey, 4

created an entity called Red Knot Acquisitions, LLC (“Red Knot”), as a vehicle for 5

purchas ing the entirety of the Estate’s debt to the Bank Group . It did so, paying the 6

$4,750,000 amount proposed by the lenders. 5 7

Red Knot and the Estate then also entered into a so

- called Forbearance 8

Agreement, prepared by David’s attorney (who is not a defendant here)

. The 9

Forbearance Agreement gave Red Knot a lien on “virtually all” assets of the Estate , and 10

provided that

, if David was ever removed as an Executor of the Estate

, Red Knot would 11

have the “immediate right” to foreclose on those assets and collect on the Estate’s 12

accumulated debts. App. 77 (Am. Compl. ¶ 59). This agreement has made it practically 13

impossibl e to remove David as an Executor. 14

Unsurprisingly, although it succeeded to the Bank Group’ s rights in other 15

respects, Red Knot did not pursue the Bank Group’s pending motion to remove David 16

and Larry as Executors. Red Knot also later opposed a Motion to R emove the Executors 17

filed by another Estate creditor, The Cadle Company, citing Red Knot’s position as “the 18

Estate’s largest secured creditor.” In 2002, Vitti represented to the Connecticut Superior 19

Court in related proceedings that, if David was removed a s Executor, Red Knot would 20

5 Virginia alleges that the Red Knot entity is David’s “alter

- ego,” although it is ostensibly owned by Ga rvey. App. 75 (Am. Compl. ¶ 54)

.12 promptly foreclose on the Estate’s assets

, and thereby “destroy” the Estate. App. 82 1

(Am. Compl. ¶ 70). 2

With his position as an Executor secured, David flagrantly mismanaged the 3

Estate, failing to pay its debts (which would have allowed him to close the Estate) and, 4

instead, continuing to loot its assets and usurp its business opportunities

. E gregiously

, 5

David failed to take advantage of a contractual provision in the Forbearance Agreement 6

(the “Estate Purchase O ption”) that would have allowed the Estate to re purchase the 7

Bank Group’s loan position from Red Knot at a “steep discount,” eliminating the largest 8

portion of the Estate’s overall debt, as long as the purchase was made by January 7, 9

2003. App. 78 (Am. Com pl. ¶ 60). On August 31, 2000, for example, the Estate could 10

have bought out Red Knot’s position under the Estate Purchase Option for a mere 11

$828,383, an amount that the Estate then had available in cash. Instead, David let the 12

o ption lapse, and Red Knot’s hold on the Estate grew in tandem with the size of the 13

debt

. By February 27, 2012, the Estate owed Red Knot (standing, in essence, in the Bank 14

Group’s stead) more than $100 million

. 15

C. Wrongful transfers of residential properties 16

The Estate held title to se veral residential properties . These includ ed furnished 17

condo minium s in New York City; San Francisco; Fort Lauderdale, Florida ; and Quechee 18

Lake, Vermont (along with a two

- acre lot in that state ) . For approximately the first 19

decade of the Estate’s pendency

— that is, until the late 1990s

— siblings David, Mary 20

Lou, and Larry had “free and unfettered use” of these properties, while the Estate paid 21

related expenses. App. 83

- 84 (Am. Compl. ¶ 73). In 1997, the New York City and 22

Vermont c ondo miniums were deeded to Da vid, and the Vermont l ot was deeded to 2313 Mary Lou. Neither David nor Mary Lou paid the Estate for these properties. In 1999, the 1

San Francisco condo minium was sold to an unrelated third party, and the proceeds of 2

that sale were deposited

— not into the Estate

— but in to a trust established in Larry’s 3

name. 4

D. The Frenchtown Road scheme 5

The Estate owned a 50% interest in a 34.4

- acre parcel of undeveloped land in 6

Trumbull, Connecticut, on Frenchtown Road . In a financial statement completed shortly 7

before Francis’s de ath, th at interest was valued at $1 .25 million . In the spring of 1998, 8

David discovered that the Town of Trumbull was interested in purchasing the p roperty 9

to use as a location for a new elementary school. He proceeded to form a limited 10

liability company, Sun ny Spot Associates, LLC (“SSA”), and at summer’s end that year

, 11

acting through SSA, David purchased the remaining 50% interest in the p roperty from 12

the then

- owners, paying $450,000. In October 1999 , the Town of Trumbull then 13

purchased the entire parcel from SSA and the Estate for $6 million

. Completing the 14

transaction, it seems, t he Estate then contributed $750,000 to the Town of Trumbull in 15

exchange for the right to have the school that would be built on the land name d after 16

Ann D’Addario, the siblings’ mother. 17

Virginia contends that , in this transaction, David breached his fiduciary duty by 18

usurping a business opportunity that rightfully belonged to the Estate. If the Estate had 19

purchase d the remain ing 50% interest in the Frenchtown Road p roperty in August 1998 20

on the same terms as SSA obtained, it would have earned a $2 .55 million profit . Instead, 21

David pocketed that profit himself. 2214 E. The Silver Knot scheme 1

I n early 1999, David and his friend Gregory Garvey created Silver Knot, LLC

, 2

ostensibly to acqui re a controlling interest in a particular producer of aluminum can 3

stock. Over several years, Silver Knot did just that. In 2014, fifteen years later, an 4

international aluminum company, Constellium N.V., purchased Silver Knot for $1.4 5

billion , $455 million of which was in cash . Virginia asserts that David funded the 6

venture with moneys misappropriated from the Estate, and accordingly, she argues, the 7

Estate is entitled to an equitable interest in the proceeds of the sale

. 8

F. The Cadle suit settlement scheme 9

O n May 31, 2012, The Cadle Company (“Cadle”)

— a creditor of the Estate that 10

tried unsuccessfully for decades to obtain payment on the $1 million promissory note it 11

held

— filed suit in the District of Connecticut against David, Garvey, Red Knot, and 12

others, alleging a civil RICO conspiracy similar to th at asserted here by Virginia

. (Cadle 13

had earlier pursued legal action against the Estate in state court, including, in 1997, by 14

filing a n unsucce s sful motion to rem ove Larry and David as Executors of the Estate .) 15

The district court (Young, J. ) “ administratively closed ” Cadle’s suit in June 2013 16

for a period of nine months, expressing a desire to allow David the opportunity to close 17

the Estate, App. 132, and ruling a t the same time that either party would be free to 18

move to reopen the case a t the end of the nine

- month period. When that time arrived

, 19

Cadle sought to reopen the case

. See The Cadle Co. v. D’Addario , No. 3:12

- cv

- 00816

- WGY, 20

Dkt. No. 154, (D. Conn. Mar. 17, 2014). That motion was granted, id. at Dkt. No. 155 (D. 21

Conn. Apr. 2, 2014), but , citing concerns about the ripeness of Cadle’s claim in light of 22

the pendency of the Estate, the district court once again ad ministratively closed the case 2315 without ruling on the defendants’ pending motions to dismiss, see The Cadle Co. v. 1

D’Addario , No. 12

- 00816

- WGY , 2014 WL 12760747, at * 4 (D. Conn. July 22, 2014). 2

Following these fruitless legal efforts , Cadle entered into a settlement agreement 3

with Red Knot and Garvey in February 2015

. I n exchange for the assignment of its 4

rights against the Estate to Red Knot and dismissal with prejudice of its RICO claims 5

against David and others , Cadle accepted a payment of approximately $5.1 million

, a 6

sum significantly larger than the approximately $3

. 17 million it was then owed by the 7

Estate . Red Knot, however, did not directly fund the settlement. Instead, the Estate 8

transferred one of its assets (the Hi Ho Motel , in Fairfield, Connecticut ) to Red Knot in 9

exchange for a $4 .5 mill ion “credit” on the Estate’s loan obligations

. Red Knot then sold 10

the m otel to third parties for $ 3.7 million and used that money toward the Cadle 11

settlement

. David personally contributed the additional $ 1.5 million in settlement 12

funds. 13

III. Procedural history 14

In January 2 016, after fruitless efforts in the Connecticut state courts, Virginia 15

filed this suit in the United States District Court for the District of Connecticut 16

( Arterton

, J .) against her brother

, David; her sister

, Mary Lou; Gregory Garvey; 17

Nicholas Vitti; Red Knot; and Silver Knot (together, “Defendants”) . Her primary claim 18

against D efendants rested on provisions of the Racketeer Influenced and Corrupt 19

Organizations Act (“RICO”) , 18 U.S.C. § § 196 1 et seq. Asserting a right to treble damages 2016 under section 1964(c), s he alleged violations of RICO sections 1962(b), (c), and (d)

. 6 1

Virginia also alleged several Connecticut law claims related to David’s alleged breach of 2

his fiduciary duty to the Estate. In May 2016, Virgin ia filed an Amended Complaint

— 3

the 144

- paragraph pleading at issue here. In it, she again alleg ed a RICO

- based claim; 4

she also assert ed new state law claims. 5

From the start, Virginia has sought RICO treble damages based on two types of 6

injurie s: first, loss of the inheritance she contend s that she (and her mother’s estate) 7

would have received from the Estate had David not rendered it insolvent ( the parties 8

refer to these as “lost debt” damages ) ; and

, second, the more than $200,000 in legal 9

expenses that she incurred in the four years before filing this suit, in her efforts to 10

oppose David’s mismanagement of the Estate and u nseat him as Executor ( the parties 11

refer to these as “collection expenses”) through various actions pursued in the courts of 12

Connectic ut

. ( David appears to have blocked Virginia’s attempted legal interference on 13

at least one earlier occasion by invoking the promise she made in exchange for the 1987 14

loan

. See D’Addario v. D’Addario , No. 27 86 23, 1991 WL 59744, at * 4 (Conn. Super. Ct. 15

Ma r. 14, 1991). ) 16

6 Section 1962(b) of title 18 prohibits “any person through a pattern of racketeering activity . . . [from] acquir[ing] or maintain[ing], directly or indirectly, any interest in or control of any enterprise which is engaged in, or the activities of which affect, interstate or foreign commerce.”

Section 1962(c) prohibits “any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, [from] conduct[ing] or participat[ing], directly or indirectly, in th e conduct of such enterprise’s affairs through a pattern of racketeering activity . . . .”

Section 1962(d) prohibits conspiracy to violate the other subsections of section 1962.17 The District Court granted Defendants’ motion to dismiss the Amended 1

Complaint. D’Addario v. D’Addario , No. 3:16cv99 (JBA), 2017 WL 1086772 (D. Conn. Mar. 2

22, 2017) (Arterton, J. )

. I n a detailed ruling, i t determined that Virginia’s claim for “lost 3

debt” damages was not ripe for adjudication under applicable RICO case law because it 4

remained uncertain whether Virginia would receive any distribution from the Estat e to 5

offset her claimed damages . This uncertainty made the amount she would ult imately be 6

owed too speculative for recovery and trebling under RICO

. The court ruled, i n 7

contrast, that her claim for collection expen ses already incurred was ripe. 8

A s to those expenses , however, the District Court concluded that the Complaint’s 9

allegati ons were in sufficient to state a civil RICO claim . It explained that Virginia had 10

failed to identify a distinct “ acquisition and maintenance” injury

, as required to make 11

out a claim based on a violation of section 1962(b). And it explained further that 12

Vir ginia had failed sufficiently to identify an “enterprise” to support a theory for 13

recovery under section 1962(c). Because the Complaint laid an inadequate basis for 14

finding a violation of either of these sub section s , the District Court also rejected 15

Virginia’s claim under section 1962(d) for RICO conspiracy . Having dismissed the only 16

federal claim presented in the Complaint , the District Court declined to exercise 17

supplemental jurisdiction over Virginia’s state law claims. 18

This appeal f ollowed. 19

DISCUSSION 20

Virginia contends that several aspects of the District Court ’s ruling are flawed

. 21

She identifies error in the court’s determination that her lost debt damages were not yet 2218 ripe. She also argues that, contra ry to the District Court’s con clusion , the facts set forth 1

in the Complaint are sufficient to establish that she suffered an “ acquisition or 2

maintenance injury ” as required by section 1962(b)

, and that Defendants were 3

associated with an “enterprise” as required to pursue r ecovery under section 1962(c). 4

Defendants , for their part, defend the District Court’s ruling on ripe ness as to the lost 5

debt injury, and, predictably, if cursorily, attack it as to collection expense damages. 6

They further adopt the District Court’s analys is of the Complaint’s insufficiency with 7

respect to claims based on sections 1962(b) and (c) , and they maintain in addition, in a 8

ground rejected by the District Court, that Virginia’s asserted injuries were not 9

proximately caused by their actions , making dismissal correct in their view for several 10

in dependent reasons

. 11

We review the District Court’s ruling de novo, construing the facts alleged in the 12

Complaint in the light most favorable to Virginia, and drawing all reasonable inferences 13

in her favor. Cruz v. FXDirectDealer, LLC , 720 F.3d 115, 118 (2d Cir. 2013) . On such 14

review, we conclude that the District Court correctly determined that Virginia’s claim 15

for her share of the Estate’s assets is unripe and that her claim for collection expenses is 16

ripe

. We a lso determine that Virginia has sufficiently alleged that her collection expense 17

injuries were proximately caused by the claimed RICO violations. In contrast to the 18

District Court, we rule that Virginia has sufficiently identified a distinct acquisition a nd 19

maintenance injury under section 1962(b) to support her collection expenses claim with 20

regard to David, Gregory Garvey, and Red Knot, but not with regard to the other 21

defendants. We further conclude that Virginia has also sufficiently alleged a section 22

1962(c) “enterprise” with regard to all six defendants , supporting her claim for 2319 collection expenses on this theory of recovery as well

. For these reasons, we vacate the 1

District Court’s dismissal as to Virginia’s RICO claim on her own behalf and on behalf 2

of her mother’s estate for collection expenses and remand that claim and her state law 3

claims for further proceedings consistent with this opinion. 4

I. Ripeness of private actions brought under RICO 5

Our Circu it’s statutory ripeness jurisprudence in the RICO context grows from 6

the Supreme Court’s decision in Zenith Radio Corp. v. Hazeltine Research, Inc. , 401 U.S. 7

321 (1971), in which the Court ruled

 in the context of a private action for treble 8

damages recovery under the She rman Act

 that a cause of action has not accrued when 9

“the fact of [future damages] is speculative or their amount and nature unprovable

. ” Id. 10

at 339; see also David B. Smith & Terrance G. Reed, Civil RICO , ¶ 6.04[5][a] (Matthew 11

Bender 2017). W e have conclu ded that no civil RICO cause of action treble damages 12

accrues “until the amount of damages becomes clear and definite.” First Nationwide 13

Bank v. Gelt Funding Corp. , 27 F.3d 763, 768 (2d Cir. 1994) ; see also id. at 767 (noting that 14

“injury to business or property” is one of three “conditions a plaintiff must meet to 15

satisfy RICO’s [statutory] standing requirements”). 16

A. Distribution of Estate assets : claim for “lost debt” injuries 17

We agree with the District Court t hat Virginia’s RICO claim for her rightful share 18

of the Estate is not yet ripe. Our Circuit has consistently ruled in the RICO context that 19

claims for “lost debt” injuries

— that is, for damages in the form of an owed, but as

- yet

20

uncollected, amount

— are unri pe when parallel proceedings to coll ect the amount owed 21

are ongoing in another forum. We have reason ed that, since “RICO [treble] damages are 22

netted against recovery obtained from collateral and other sources

, ” the outcome of the 2320 parallel proceedings could significantly affect the total amount owed in the case at bar

, 1

and that this fundamental uncertainty renders the claim not ready for adjudication. 2

Motorola Credit Corp. v. Uzan , 322 F.3d 130, 135

- 36 (2d Cir. 2003) ( finding unripe 3

plaintiffs’ RICO claim fo r injury based on unpaid loans where plaintiffs had not yet 4

foreclosed on loan security and related arbitrations were pending). Although some 5

other courts have taken a different approach, see, e.g. , Grimmett v. Brown , 75 F.3d 506 6

(9th Cir. 1996), o ur juris prudence on this point is long

- and well

- established. See, e.g.

, 7

First Nationwide Bank , 27 F.3d at 769 (finding unripe RICO claims for injury arising from 8

plaintiffs’ loans to defendant where, though information from defendants provided as a 9

basis for the loans was alleged to be false, no default had yet occurred ); Stochastic 10

Decisions, Inc. v. DiDomenico , 995 F.2d 1158, 1165

- 66 (2d Cir. 1993) (finding unripe a 11

RICO claim for injury in amount of two state court judgments entered against 12

defendant where (1) one judgment was satisfied after initiation of RICO suit

, and (2) 13

second judgment was “likely to be fully satisfied”); Bankers Trust Co. v. Rhoades , 859 F.2d 14

1096, 1105

- 06 (2d Cir. 1988) ( RICO claim for lost debt injury unripe because fraudulently 15

transfer red assets might yet be recovered during bankruptcy proceedings). 16

Proceedings regarding the Estate are underw ay in Connecticut P robate C ourt, as 17

we have described. That they have been ongoing for more than thirty years, however, 18

and that the F orbearance A greement is in place ( see Background Part II.B, supra )

, 19

unavoidabl y raises the question whether they will ever end

, and whether their 20

pendency can reasonably be treated as we have treated parallel proc eedings in the cases 21

just cited : that is, as grounds to preclude the related RICO suit. 2221 Nonetheless, the problem identified by the District Court and recognized in our 1

case law remains: t he amount of Virginia’s ultimate distribution from the Estate

— and, 2

thus, the amount of her damages

, as measured by the difference between any 3

distribution she actually receive s and the distribution she sh ould have received

— is 4

remarkably uncertain

. T he value of the Estate is not static: David and Larry are still 5

authorized, as co

- executors, to conduct the Estate’s busi ness , to buy and sell its real 6

estate and businesses, and thereby to control the Estate’s net value. In fact, many of the 7

“schemes” identified in the Complaint a re examples of David ’s misappropriating for 8

himself lucrative business opportunities that shoul d have been treated as belonging to 9

the Estate and the legatees

. We have held in the civil RICO setting that defendants are 10

“ not liable for all losses that may occur , but only for those actually suffered

. ” Motorola 11

Credit Corp. , 322 F.3d at 136 (quoting Fi rst Nationwide Bank , 27 F.3d at 768) (emphasis in 12

Motorola ). Applying this standard, we cannot escape the conclusion that Virginia’s lost 13

debt claim is not ripe because she cannot even estimate with reasonable certainty the 14

amount of her anticipated distributional share. 15

Virginia argues that there is no “realistic” possibility that the amount of her 16

damages will fluctuate in light of circumstances described in the Complaint, 17

Appellant’s Br. 67, because these have rendered the Estate “hopelessly insol vent ,” App. 18

66 (Am. Compl. ¶ 27). In her view, the likelihood that she will receive any distri butional 19

share when the Estate close s is nil , no matter what interim fluctuations in value the 20

Estate’s assets might experience

. 21

The argument has some force, but w e are skeptical that the law requires us to 22

accept at face value the claim that the Estate’s al leged insolvency is “hopeless[]

, ”given 2322 the variability of the Estate ’s assets and liabilities and the unpredictability of the market 1

forces at play

. For exampl e, V irginia has pleaded that the Estate’s liabilities outstrip its 2

assets, but she also alleges that David himself

— through Red Knot

— holds $1 00 million 3

of the Estate’s debt . That liability , accordingly, seems amenable to decrease or even 4

elimination . Moreover, Virginia asserts that the Estate has an equitable interest in Silver 5

Knot, because t he latter was funded with moneys stolen from the Estate . A balance 6

sheet that takes into account the Estate’s entitlem ent to some portion of the $455 million 7

ca sh payment that Silver Knot received in 2014 might reflect a more accurate 8

assessment of the Estate’s solvency. 9

Virginia’s assessment of the Estate’s condition also does not recognize that the 10

Connecticut Probate Court is empowered to alter the Estate’s b alance of assets and 11

liabilities in at least two potentially effective ways. First, the Probate Court may assess a 12

significant surcharge against David for any fiduciary breaches that the court identifies

. 13

Gaynor v. Payne , 261 Conn. 585, 596

- 97 (2002). Virg inia’s allegations suggest that David 14

would have access to assets sufficient to satisfy such a surcharge. Second, th at court is 15

authorized in certain circumstances to declare prior asset transfers null and void

, and to 16

impose a constructive trust on assets wrongfully transferred from an estate. See In the 17

Matter of Edwin A. Jarmoc , 29 Quinnipiac Prob. L. J. 443 , 451

- 52 (2016). 7 These powers 18

rais e the possibility that some of the asset transfers identified by Virginia as 19

“plundering” could be revoked and the assets returned to the E state, increasing its net 20

value and Virginia’s proportionate share upon distribution

. Accordingly, even those 21

7 Virginia suggests that a constructive trust claim would be time

- barred, but points to no legal authority suggesting that such a bar would bind the Probate Court’s hands.23 particular schemes for which a loss amount is theoretically calculable

— such as the 1

Honeyspot Road scheme

— do not yet g ive rise to clear and definite damages. Such acts 2

of rectification by the Connecticut Probate Court would doubtless not be eas y to 3

accomplish, b ut b ecause “[t]hese contingencies, and other conceivable contingencies, 4

remain,” our precedent teaches that Virg inia’s RICO claim for triple the value of her 5

distributional share of the Estate is not ripe for adjudication

. Motorola Credit Corp. , 322 6

F.3d at 136. 7

Virginia has also alleged that final assessments of the Estate’s value and 8

distributions to legatees will simply never come to pass. She asserts that David intends

, 9

and is likely able

, to keep the Estate open until her death ( at 70, she is David ’s elder by 10

15 years)

, and that the bona fides of his threat are evidence d by David’s undeniable 11

success in keep ing the Estate open for more than thirty years so far

. Abiding by our 12

RICO ripeness jurisprudence under these circumstances will , in effect, improperly 13

enable David to carry out h is unlawful plan , she insists : that is, he will kee p the Estate 14

unresolved until Virginia’s death, at which point her share will devolve to the Estate 15

and be divided equally among her surviving siblings. 16

We are not enabled by these pleas to depart from our precedent

. U nfortunate as 17

Virginia’s situation might be, the RICO statute as c onstrued in our Circuit simply does 18

not provide a remedy before a plaintiff has suffered reasonably ascertainable damages

. 19

Nor may a RICO plaintiff, through predictions of a defendant’s future plans, artificially 20

ripen a claim that is unripe under our juri sprudence. Cf. Kurtz v. Verizon New York, Inc.

, 21

758 F.3d 506, 516 (2d Cir. 2014) ( endorsing application of ripeness inquiry that governs 22

Fifth Amendment takings claims to due process claims as well to “prevent [] evasion of 2324 ripe ness test by artful pleading”). Moreover, even accepting Virginia’s allegations as 1

true, we are not convinced that

— barring something unexpected

— the Estate is sure not 2

to close until after Virginia’s death. A l though Virginia alleges that David has kept the 3

Estate open without significant interference by the Connecticut Probate Court, the 4

appointment of a new Probate Judge in 2010 and the Connecticut legislature’s 5

substantial reform of the Connecticut Probate Court system in 2011 rais e the possibility 6

that cl osure will now in fact occur

. See generally Margaret E. St. John, The Connecticut 7

Probate Court System Reform: A Step in the Right Direction , 24 Quinnipiac Prob. L. J. 290, 8

301

- 02 (2011). For instance, t he new judge appears to have been more active in 9

mana ging the Estate than was his predecessor in earlier years , as demonstrated by his 10

2012 order directing the Executors to file quarterly updates reporting on their steps 11

toward finalizing the administration of the Estate

. 12

For these reasons, we conclude that Virginia’s RICO claim for “lost debt” 13

damages based on the amount of her expected inheritance (and that of her mother’s 14

estate) is unripe. 15

B. RICO claim for c ollection expenses 16

Virginia’s claim for RICO damages based on the amount of collection expenses 17

that she has incurred to pursue a legal remedy to David’s alleged wrongdoing does not 18

suffer from the same infirmity. Virginia contends that she has incurred legal expenses in 19

excess of $200,000 in connection with her state

- court legal attempts , albeit uns uccessful, 20

to enforce her rights and halt David’s despoiling of the Estate

. We have long recognized 21

that a plaintiff may recover legal fees, including expenses incurred in one or more 22

attempt s to combat a defendant’s RICO violations through the legal syste m, as damages 2325 in a civil RICO action. See Bankers Trust Co. , 859 F.2d at 1105. Virginia’s claimed legal 1

expenses fall squarely within that category of cognizable damages. 2

Defendants mount only a cursory challenge to that conclusion: they assert by 3

way of a footnote that the collection expenses claim is not ripe since the full extent of the 4

expenses that she will ultimately have incur red

— including, presumably, from this 5

litigation

— is yet unknown

. The law of our Circuit does not support their contention

. 6

Unl ike her claims with respect to her future distributional interest

, as to which collateral 7

proceedings are pending , Virginia has already suffered a “clear” and “definite” loss in 8

the form of her legal expenses . Although the amounts may increase over time, t he past 9

expenses will not disappear when the Estate is closed. See First Nationwide Bank , 27 F.3d 10

at 768. The “collection expenses” damages Virginia claims in this litigation

— that is

, the 11

$200,000 that she allegedly incurred over the four years before she filed the Complaint 12

(as allowed by the RICO statute of limitations)

— are thus neither “speculative” nor 13

“unprovable. ” Bankers Trust Co. , 859 F.2d at 1 1 06. T he possibility that Virginia will bear 14

additional related legal expenses has no bearing on this c onclusion

. Her RICO claim 15

based on the legal expenses she has incurred is therefore ripe. 16

II. Proximate c ausation of Virginia’s legal expenses 17

Section 1964(c) of title 18 authorizes a private cause of action for “[a]ny person 18

injured in his business o r propert y by reason of a violation of section 1962 . . . .” T o 19

make out a claim under this section , Virginia must prove not only (1) that D efendants 20

violated section 196 2 and (2) that she suffered an injury to her “ business or property,” 21

but also (3) that her injury was caused “ by reason of” the RICO violation

 a standard 22

that we have equated to the familiar “proximate cause” standard

. See Sergeants 2326 Benevolent Ass’n Health and Welfare Fund v. Sanofi

- Aventis U.S. LLP

, 806 F.3d 71, 86 (2d 1

Cir. 2015)

. 8 Defendants contend that the Complaint sets forth allegations suggesting at 2

best that their alleged RICO violations proximately caused injury to the Estate , not to 3

Virginia as a legatee . For this reason, they urge, Virginia has no viable civil RICO claim 4

even if some portion of her damages are ripe, as we have determined that they are

. 5

As we have commented elsewhere, “p roximate cause requires . . . some direct 6

relation between the injury asserted and the injurious conduct al leged, and excludes . . . 7

those links that are too remote, purely contingent, or indirect.” Ideal Steel Supply Corp. v. 8

Anza , 652 F.3d 310, 323 (2d Cir. 2011) (internal quotation marks and alterations omitted). 9

Here, the causal relationship between Defenda nts’ conduct and Virginia’s collection 10

expenses injury is easily identifi able : Defendants (chiefly David), through their 11

violations of 18 U.S.C. § 1962(b) and (c), are alleged to have destroyed the value of the 12

Estate, in which Virginia, as a beneficiary, has an identifiable interest under Connecticut 13

law

. Virginia took steps and incurred related legal expenses to halt that wrongdoing

. 14

Gaynor , 261 Conn. at 592 (“It is well settled that a person’s right of inheritance vests at 15

the moment of the decedent’s de ath . . . .”). To the extent that an additional step may 16

separate the alleged RICO violations and Virginia’s claim for collection expenses 17

incurred

, we are bound by Circuit precedent recognizing such expenses to be a valid 18

8 Although th is causation requirement has sometimes been described as necessary to support “statutory standing,” we think it is better understood as an element e ssential to the viability of a plaintiff’s claim. See Am. Psychiatric Ass’n v. Anthem Health Plans, Inc. , 821 F.3d 352, 358

- 59 (2d Cir. 2016) (noting that “what has been called ‘statutory standing’ in fact is not a standing issue, but simply a question of whether the particular plaintiff ‘has a cause of action under the statute’” (quoting Lexmark Int’l, Inc. v. Static Control Components, Inc. , 134 S. Ct. 1377, 1387 (2014))).27 basis for RICO damages. See, e.g.

, Bankers Trust Co. , 859 F.2d at 1105; Stochastic Decisions, 1

Inc. , 995 F.2d at 1166

- 67. These expenses were incurred in an attempt to protect both the 2

Estate and Virginia’s share of that Estate , and, for purposes of our causation inquiry 3

here , the two are reasonably treated as indivisible

. 4

Defendants cite primarily to th e Sixth Circuit’s decision in Firestone v. Galbreath

, 5

976 F.2d 279 (6th Cir. 1992), in their effort to divorce these interests, but it is not to the 6

contrary. The Firestone court found that beneficiaries of a n estate had not suffered a 7

“direct injury” cognizable under RICO from the defendants’ alleged wrongdoing. Id. at 8

285. The re, the testator’s grandchildren, beneficiaries of her estate, brought various 9

fraud and RICO claims against certain relatives and former associates of the testator

, i d. 10

at 281

- 82, alleging that the defendants had “looted [the testator’s] estate as she lay 11

dying,” diminishing the ir inheritances when she later died

. Id. at 282

. Here, in contrast

, 12

the alleged looti ng took place after Francis died, when the Estate already existed and 13

Virginia’s interest in the Estate had vested , aligning her interest and that of the Estate 14

temporally and conceptually

. See Gaynor , 261 Conn. at 592. 15

Accordingly, we conclude that Virginia’s injuries are not so removed from 16

Defendants’ misdeeds as to place them outside the reach of the proximate causation 17

chain as a matter of law . T he expenses that she has incurred to stop the incursion are 18

sufficiently proximate to the identified RICO violations support a claim under section 19

1964(c). 2028 III. Section 1962(b) theory of recovery 1

Section 1962(b) makes it unlawful for a person, “through a pattern of 2

racketeering activity[,] . . . to acquire or maintain, directly or indirectly, any interest in 3

or control of any enterprise which is engaged in, or the activities of which affect, 4

interstate or foreign commerce.” Our Circuit , like many others, requires a plaintiff who 5

brings a civil RICO claim for a 1962(b) violation to d emonstrate an injury arising from 6

the defendants’ acquisition of an interest in, or maintenance of control over, an alleged 7

enterprise. See Jed S. Rakoff and Howard W. Goldstein, RICO: Civil and Criminal Law and 8

Strategy , § 3.03[2], 2 8

- 29 & n.23 (2011) (no ting that, as of 2011, all circuits but the Fourth 9

and Eighth require plaintiffs alleging a section 1962(b) violation to identify an 10

“acquisition or maintenance” injury). 11

T he “acquisition or maintenance” requirement in our Circuit stems from our 12

decision in Discon, Inc. v. NYNEX Corp. , 93 F.3d 1055 (2d Cir. 1996), vacated on other 13

grounds by NYNEX Corp. v. Discon, Inc. , 525 U.S. 128 (1998)

. In that case , p laintiff Discon, 14

a telephone equipment removal company, alleged that the defe ndants had committed 15

certain racketeering acts in connection with their control of NYTel, a local telephone 16

service provider. Id. at 1057

- 58. We ruled that Discon failed to state a RICO claim arising 17

out of a violation of section 1962(b) , primarily because it did not allege that defendant s’ 18

acquisition or control over NYTel was obtained through a pattern of racketeering 19

activity. Id. at 1063. At the same time, we observed that the section 1962(b) claim was 20

also flawed because Discon had failed to al lege that its injuries were caused by the 21

defendants’ acqu isition or maintenance of NYTel, rather than by the defendants’ 2229 various racketeering acts. Id. This alternative holding has taken on significance over 1

time. 2

Virginia has certainly alleged in some de tail that her collection expense injuries 3

are traceable to D efendants’ control over the Estate

, and that Defendants’ control was 4

maintained through a pattern of racketeering activity

. Although David is not alleged to 5

have “acquire [d] ” his position as an Ex ecutor through racketeering acts, t he facts as 6

stated in the Complaint provide a more than sufficient basis from which to infer that 7

David maintained his position (and its attendant control of the Estate ) through the Red 8

Knot f orbearance s cheme. 9

W hen David and Garvey created Red Knot, the Estate’s largest secured creditors 10

had sought to remove David as an Executor. By replacing those creditors with an entity 11

that he is alleged to control , David neutralized a threat that could have led to his 12

removal a s an Executor and fortified his position through the Forbearance Agreement, 13

purportedly making his position impervious to attack

. And, later, when Cadle sought a 14

court order removing him as an Executor, Red Knot oppose d that motion, invoking its 15

status as the Estate’s major secured creditor to give weight to its support of David

. 16

Several of the schemes

— including two sets in particular ( the allegedly wrongful 17

transfers of residential property from the Estate to David, Larry, and Mary Lou

, and the 18

Cadle suit settlement scheme, all of which directly removed assets from the Estate )

— 19

occurred after the Red Knot f orbearance s cheme had cemented David’s hold on the 20

Estate. The expense collection losses attributable to those alleged breaches can 21

reasonably be attributed to David’s “ maintenance ” of control over the Estate. 2230 Relying on Discon

, however, t he Di strict Court concluded that the expense 1

injuries attributable to Defendants’ alleged acquisition or maintenance of control over 2

the Estate were insufficiently “separate and distinct” from the injuries that resulted 3

from the predicate acts alleged in the Complaint. D’Addario , 2017 WL 1086772, at *18. 4

We disagree. To successfully plead a RICO claim, a plaintiff must indeed allege distinct 5

damages arising from the acquisition or maintenance of control of the enterprise. In 6

other words, those damages must be different from the damages that flow from the 7

predicate acts themselves. F or example, a racketeer might use a pattern of physical 8

t hreats and violence, includin g an act of arson against the plaintiff ’ s property, to extort 9

an interest in the plaintiff ’ s business. The cost of replacing or repairing property 10

damaged in the fire is a loss caused by the predicate act , the arson, not by the ultimate 11

acquisition of an i nterest in the plaintiff ’ s business . The “separate and distinct” damages 12

caused by the RICO violation, as opposed to by the predicate acts, is the value of the 13

share of the plaintiff’s business that the owner turned over to the defendant. 14

Similarly, in th is case, Virginia alleges losses specifically attribut able to the 15

predicate act s of fraud, such as the loss of the estate assets that were turned over to Red 16

Knot. But that scheme also maintained David's control of the Estate, by ma k ing his 17

position as Exe cutor impregnable. At a minimum, that entrench ment of control 18

contributed to Virginia ’ s collection damages, because David’ s enhanced position 19

meaningfully complicated her efforts to unseat him. We conclude , therefore, that 20

Virginia sufficiently pleaded a separate and distinct “ acquisition or maintenance ” 21

injury

. 2231 The question remains, however, whether Virginia has adequately pleaded such 1

an injury as to each of the six defendants: David, Mary Lou, Garvey, Vitti, Red Knot, and 2

Silver Knot . Of these defendants, only David as an Executor had a formal position 3

through which he exerted control over the Estate. ( Recall that Virginia did not name 4

Larry, her brother and now the other Executor, as a defendant in this suit.) W e accept 5

V irginia’s argument that the Complaint plausibly asserts that

, along with David, Red 6

Knot and Garvey also exerted significant control over the Estate , helping to perpetuate 7

David’s control and each contributing thereby to the requisite “acquisition or 8

maint enance” injury

. For example, the Complaint alleges that by purchasing the 9

Estate’s loans from the Bank Group, Red Knot gained not only a standard secured 10

creditor ’ s interest in the Estate’s assets, but also the contractual right under the 11

Forbearance Agree ment to initiate potentially disastrous wholesale foreclosure 12

proceedings upon David’s removal . Red Knot’s power to foreclose on “virtually all” of 13

the Estate’s assets in the event of a management change plausibly represents a 14

meaningful form of “control” over the Estate. App. 77 (Am. Compl. ¶ 59). And it would 15

be imprudent to conclude, at this early stage in the proceedings, that Gregory Garvey

— 16

as Red Knot’s nominal owner

— lacked any power or control over Red Knot, or, through 17

Red Knot, the Estate

. Accordingly, Virginia has pleaded a viable claim under section 18

1962(b) against Red Knot and Garvey

, as well as against David

. 19

The remaining defendants, however, are not themselves alleged to have exerted 20

any direct control over the Estate ’s management , muc h less control that was acquired or 21

maintained through any alleged racketeering acts. Virginia alleges generally that Mary 22

Lou, Silver Knot, and Vitti took part in (or, in Vitti’s case, advised David regarding ) one 2332 or more of the various schemes by which D avid looted the Estate. Without more, 1

however, participation as a third party in a business transaction with the Estate does 2

not constitute either maintenance of an “interest in” or exercise of “control over” the 3

Estate for purposes of section 1962(b) . Acc ordingly, Virginia failed sufficiently to allege 4

that Mary Lou, Silver Knot, or Vitti violated section 1962(b). 5

IV. Section 1962(c) theory of recovery 6

Section 1962(c) of title 18 makes it unlawful “ for any person employed by or 7

associated with any enterprise e ngaged in, or the activities of which affect, interstate or 8

foreign commerce, to conduct or participate, directly or indirectly, in the conduct of 9

such enterprise’s affairs through a pattern of racketeering activity.” The existence of an 10

“ enterprise ”

 one existing “separate and apart from the pattern of activity in which it 11

engages”

 is a necessary element of a section 1962(c) violation

. United States v. Turkette

, 12

452 U.S. 576, 583 (1981). 13

All six Defendants claim that , even accepting the Complaint’s allegations, they 14

were not associated with an “enterprise” within the meaning of the statute and, thus, 15

that Virginia has not adequate ly pleaded that they violated section 1962(c)

. Virginia 16

identifies two possible “enterprises” with which all Defendants pu rportedly associated: 17

(1) an “ association

- in

- fact ” consisting of all six Defendants

, and (2) the Estate itself. 9 18

9 We do not opine here on the question whether Virginia could plausibly allege a se ries of more

limited associations

- in

- fact, consisting of the participants in particular schemes pursuing more limited purposes than David D’Addario’s wholesale looting of the Estate. Although our recitation of the narrative above might be read to suggest a ny number of such associations, we

decline to construct associations

- in

- fact that Virginia has not identified. We agree with the Third33 A. Association

- in

- fact of the six Defendants 1

The RICO statute defines “enterprise” as “any individual, partnership, 2

corporation, association, or o ther legal entity, and any union or group of individuals 3

associated in fact although not a legal entity.” 18 U.S.C. § 1961(4). 10 The Supreme Court 4

has observed in this regard that “ [t] he term ‘any’ ensures that the definition has a wide 5

reach, and the very concept of an association in fact is expansive.” Boyle v. United States

, 6

556 U.S. 938, 944 (2009) (internal citations omitted). It has further instructed that, in 7

acco rdance with the law’s purposes, t he RICO statute is to be “liberally construed,” 8

giving a broad and flexible reach to the term “association

- in

- fact.” Id. 9

In line with this general approach, t he Supreme Court has rejected attempts to 10

graft onto the statute formal strictures that would tend to exclude amorphous or 11

disorganized groups of individuals from being treated as RICO “enterprise s. ” 12

Accordingly, it has explain ed

, RICO associations

- in

- fact need exhibit only t hree 13

structural features: (1) a shared purpose; (2) relationships among the associ ates; and (3) 14

“longevity sufficient to permit these associates to pursue the enterprise’s purpose.” Id. 15

at 946. 16

Defendants do not meaningfully contest that the Complaint adequately alleges 17

longevity

, inasmuch as D efendants’ charged association in connecti on with the Estate 18

Circuit that, where a plaintiff has “conspicuously refr ained, throughout the district[ ]court proceedings and on appeal, from asserting alternative [mu lti

- entity,] bilateral[,] or sin gle

- entity enterprises,” we should not endeavor to replace the enterprise identified by the plaintiff with an alternative, differently constituted enterprise with a different purpose. See In re Insurance Brokerage Antitrust Litig. , 618 F.3d 300, 375 (3d Cir. 2010).

10 This definition applies to the term “enterprise” as used in both section s 1962(b) and (c).34 has persisted for decades (and indeed, several of the individual schemes were carried 1

out over a period of years)

. T hey argue , however, that Virginia has failed to allege 2

sufficiently the existence of relationships among the D efendants o r a common purpose. 3

Rather, for example, they highlight David’s alleged purpose

 to enrich himself

 and 4

contrast it with each defendant’s self

- regarding, and separate, individual purpose in 5

individual transactions: for example, Mary Lou’s desire to obtain a particular residential 6

property and Garvey’s profit

- oriented investment in the aluminum can company 7

through Silver Knot

. Although not in the end dispositive, see infra Discussion Part IV.B, 8

w e find Defendants’ argument on this point persuasive. 9

The concept of an association

- in

- fact is protean, and , as such

, variability is 10

invited by the statutory language and the Supreme Court’s construction of that 11

language. District Courts and Courts of Appeals have taken various paths towards 12

providing some predic table shape for the notion , often drawing on established 13

conspiracy law for analogy and contrast. A number of courts

— although not our court

— 14

have found that a group of individuals related by a structure that mimic s so

- called 15

“rimless hub

- and

- spoke” conspira cies cannot be considered a RICO association

- in

- fact. 16

See, e.g.

, In re Insurance Brokerage Antitrust Litig. , 618 F.3d 300, 374

- 75 (3d Cir. 2010); Moss 17

v. BMO Harris Bank, N.A. , 258 F. Supp. 3d 289, 302

- 03 (E.D.N.Y. 2017); Cedar Swamp 18

Holdings, Inc. v. Zama n , 487 F. Supp. 2d 444, 451

- 52 (S.D.N.Y. 2007). In other word s , 19

when each defendant is alleged to have a relationship with a central figure, but the 20

defendants are not all alleged to be connected in some overarching way (such as by “an 21

agreement to further a single design or purpose”)

, these courts have found no RICO 22

association

- in

- fact. See Gregory P. Joseph, Civil RICO: A Definitive Guide 105

- 07 (3d ed. 2335 2010). Without such a limitation

, as commentators have observed, one malefactor’s 1

series of independent frauds could be cast as a RICO conspiracy, sweeping numerous 2

other individuals into a net of heightened liability under RICO

, and doing so even if 3

each fraud was perpetrated quite independently of the other s

. Such a sweep would 4

seem to run afou l of the principle adopted by the Supreme Court in Boyle that 5

individuals who act “independently and without coordination” may not be treated as 6

part of a RICO association

- in

- fact. Boyle , 556 U.S. at 947 n.4. 7

We agree further with Defendants that

, if prove n, the facts alleged in the 8

Complaint would establish that David engaged in a series of separate frauds involving 9

different set s of individuals

. T his , they say, is insufficient to make out relationships 10

among “the defendants as a whole” that would satisfy even Boyle ’s relaxed test for an 11

association

- in

- fact. D’Addario , 2017 WL 1086772, at *19. That each d efendant agreed to 12

join forces with David to defraud the Estate in a particular way does not support an 13

inference that they all agreed to join forces with each other to pursue a goal of 14

defrauding the Estate over decades in a variety of ways . Rather, at most, it suggests that 15

Defendants (and in a few cases, perhaps, a small subgroup of D efendants) each agreed 16

with David to engage i n individual schemes. 17

Proof that “several individuals, independently and without coordination, 18

engaged in a pattern of crimes listed as RICO predicates, . . . [is] not . . . enough to show 19

that the individuals were members of an enterprise.” Boyle , 556 U.S . at 947 n.4; see also In 20

re Insurance Brokerage , 618 F.3d at 374 (rejecting allegations that defendants took similar 21

actions because they “do not plausibly imply concerted action

— as opposed to merely 22

parallel conduct”); Rao v. BP Products N. Am., Inc. , 58 9 F.3d 389, 400 (7th Cir. 2009) 2336 (finding complaint did not make out an “enterprise” where it alleged “different [groups 1

of] actors for each event” and “d[id] not indicate how the different actors are 2

associated” or “act[ed] together for a common purpose”) ; cf. Crest Constr. II, Inc. v. Doe

, 3

660 F.3d 346 , 355 (8th Cir. 2011) (explaining that RICO enterprise is not adequately 4

alleged where “the only common factor that linked the individually named defendants 5

and defined them as a distinct group was their dire ct or indirect participation in the 6

engineered investment scheme to defraud the plaintiff” (internal quotation marks and 7

alteration omitted))

. 8

Nor does the allegation t hat the various Defendants and subgroups agreed at 9

different times to engage in variou s fraudulent schemes plausibly support the inference, 10

essential to a RICO association

- in

- fact enterprise, that they acted with a sufficiently 11

common purpose. The Complaint does not allege, for example, that Mary Lou was even 12

aware of the Red Knot f orbearan ce s cheme

, or that Garvey knew of David’s residential 13

property transfers from the Estate to himself , Mary Lou, and Larry

. And the schemes 14

themselves are not sufficiently similar in method or aim to suggest that D efendants 15

were acting in coordination: in some ( the Honey s pot Road s cheme and transfers of 16

residential property , for example ), participants funneled assets directly out of the E state 17

into their own pockets; in others ( the Red Knot and Cadle s uit s ettlement s cheme s, for 18

example ), the participants p rotected David’s position as Executor

, but did not directly 19

profit

 at least, insofar as the Complaint alleges ; and i n still others ( the Frenchtown 20

Road and Silver Knot s cheme s ), David allegedly usurped business opport unities that, 21

under fiduciary principle s, rightfully belonged to the Estate. 2237 For these reasons

, we conclude that the Complaint’s allegations do not plausibly 1

make out the association

- in

- fact enterprise proposed by Virginia, in which the six 2

D efendants together were “devoted to . . . allowing D avid. . . to acquire an interest in, 3

and then maintain control ove r, the affairs of the Estate, ” App. 20 0 (Amended RICO 4

Case Statement), under her section 1962(c) theory of recovery. 5

B. The Estate as association

- in

- fact RICO enterprise 6

A s adverted to above in our discussion of Virginia’s proposed enterprise among 7

the six defendants, however, a nother potential section 1962(c) enterprise eme rges from 8

the facts alleged : that is, the Estate itself. 11 As explained above, s ection 1961(4) provides 9

that any “legal entity ” may qualif y as a RICO enterprise, whether it is an ‘individual, 10

11 Defendants contend that Virginia forfeited the argument that the Estate is the actionable enterprise under section 1962(c) by failing to raise it in the District Court. In fact, Virginia’s attorney raised this argument in the District Court at oral argumen t regarding Defendants’ Motion to Dismiss the Amended Complaint. See App. 264 (“[T]here is enough evidence . . . alleged in the Complaint for us to prove the existence of an association [in] fact enterprise. But

. . . also the probate estate, under Gunther v [

. ] Dinger [547 F. Supp. 25 (S.D.N.Y. 1982)], the probate estate in and of itself . . . is a sufficient enterprise. So there’s two enterprises here.”). That mention was the first, however, and Virginia acknowledges that the issue was not briefed

in that court and the District Court did not have an opportunity to rule on the theory . Although on appeal we rarely consider arguments so undeveloped at the district court level, they are not irretrievably forfeited, and, in view of the complexity of this matter and the purely legal nature of this argument, we elect to exercise our discretion on appeal to address this contention. See

United States v. Gomez , 877 F.3d 76, 95 (2d Cir. 2017) (“[W]e have discretion to consider arguments waived or forfeited below becaus e our waiver and forfeiture doctrine is entirely prudential.” (internal quotation marks and alterations omitted)). As explained above, Virginia’s claim will be remanded to the extent that it involves a violation of section 1962(b). In our court,

her counse l has represented that, on remand, she will seek leave to amend her complaint further to identify the Estate as the actionable “enterprise” under section 1962(c). With efficiency goals in mind, we therefore address this argument now.38 partnership, corporation, association, ” and also that, i n the alternative, “any union or 1

group of individuals associated in fact although not a legal entity” may qualify as well

. 2

Conne cticut law holds that an estate is “not a legal entity. It . . . is merely a name 3

to indicate the sum total of the assets and liabilities of the decedent or incompetent.” 4

Freese v. De p ’t of Social Servs. , 169 A.3d 237, 251 (Conn. App. Ct. 2017) (quoting Is aac v. 5

Mount Sinai Hosp.

, 490 A.2d 1024, 1026 (Conn. App. Ct. 1985))

. Unlike the somewhat 6

eclectic group of defendants Virginia attempts to join together with David as an 7

association

- in

- fact, however, the individuals who were formally associated with the 8

(inchoate) Estate

— that is , David and Larry, the Executors

— indisputably comprise an 9

“association

- in

- fact.” They have a shared purpose , in fact one prescribed by law : 10

settling the Estate by paying off its debts and distributing its assets among the heirs. As 11

co

- Executors, t hey have a legal relationship with each another and a shared 12

responsibility of fulfilling that purpose. And, as the Estate is now in its fourth decade of 13

existence, this association of the Executors has the requisite longevity: it has certa inly 14

existed long enough to allow its members to pursue their purpose

. 12 We therefore 15

12 We recognize that th e import of this analysis is that probate estates, even those that are not recognized as legal entities under applicable law, may comprise associations

- in

- fact for RICO purposes. We have suggested as much with regard to bankruptcy estates. See

, e.g. , First Capital Asset Mgmt., Inc. v. Satinwood, Inc. , 385 F.3d 159, 175 (2d Cir. 2004) (“[U]nder certain circumstances, a bankruptcy estate may qualify as a RICO enterprise.”). This result should not be surprising. A probate estate, "although not a legal entity," 18 U.S.C. § 1961(4), would appear to be exactly the kind of "enterprise" that Congress intended to protect from infiltration or exploitation by criminal elements. See Gerard E. Lynch, Rico: The Crime of Being A Criminal, Parts

I & II

, 87 Colum. L. Rev. 66 1, 669

- 89 (1987) (recounting legislative history).39 conclude that the Estate

— an association

- in

- fact of David and Larry

— comprises an 1

“enterprise” under section 1961(4). 13 2

A perso n violates section 1962(c), and may thus be liable in an action brought 3

under section 1964, only if he “conduct[ed]” the enterprise’s affairs or participated in 4

that conduct . 18 U.S.C. § 1962(c). In Reves v. Ernst & Young , t he Supreme Court 5

interpreted th e operative language to require a RICO defendant charged with violating 6

section 1962(c) to have had “some part in directing [the enterprise’s] affairs.” Reves v. 7

Ernst & Young , 507 U.S. 170, 179 (1993) (emphasis added)

. A RICO defendant will not be 8

liable for mere participation in a rack eteering act, but will sustain liability under the 9

statute for participation in the “operation or management of an enterprise through a 10

pattern of racketeering activity.” Id. at 184; see also First Capital Asset Mgmt. v. Satinwood, 11

Inc. , 385 F.3d 159, 176 (2d Cir. 2004). 12

Virginia’s allegations as to David easily satisfy t h e Reves “operation or 13

management” test. Taking the facts alleged in the Complaint as true, David went far 14

beyond merely participating in the management of the Estate: he was a “dictatoria l” 15

Executor of the Estate

. App. 62 (Am. Compl. ¶ 15). Whether D efendants other than 16

David , however, may be said to satisfy the test by their alleged participation in the 17

Estate’s operation or management , despite not having an official position within it, i s 18

less clear. See Reves , 507 U.S. at 184; see also First Capital Asset Mgmt., Inc. , 385 F.3d at 178 19

(“[O]utsiders, like all other people, will be liable under RICO . . . if their actions satisfy 20

13 We refer to the association

- in

- fact consisting of David and Larry as the “Estate,” to distinguish it from the purported association

- in

- fact consisting of the six defendants discussed above.40 the operation or management test.”) (alteration omitted)

. While the “operation or 1

management” test presents a “relatively low hurdle for plaintiffs to clear, . . . especially 2

at the pleading stage,” RICO plaintiffs must plausibly allege that each defendant played 3

“ some part in directing the enterprise’s affairs” if the RICO claim is to survive a motion 4

to dismiss

. First C apital Asset Mgmt

. , 385 F.3d at 176 (internal cit ations and alterations 5

omitted). 6

In First Capital Asset Management

, we explained that a RICO plaintiff adequately 7

pleaded that a defendant parent h ad participated in the operation or management of 8

the defendant’s son’s bankruptcy estate, despite not having a formal position within 9

that estate

. Id. at 178. The defendant had aided her debtor son in defraud ing the 10

Bankruptcy Court in various material wa ys that adversely affected the administration 11

of the bankruptcy estate : for example, she accepted his transfer of assets to her (so that 12

the money would not be included in his bankruptcy estate), sent him monthly 13

payments from those fraudulently transferred assets , and made various false statements 14

and misrepresentations to the Bankruptcy Court

. Id. at 177

- 78 . Based on these actions, 15

we concluded that the defendant parent “participated in the conduct o f the affairs ” of 16

the enterprise sufficient to sustain section 1962(c) liability, i d. at 178, treating the 17

bankruptcy estate as the enterprise. (That we ultimately affirmed dismissal of the claim 18

based on the plaintiff’s failure sufficiently to plead a pattern of racketeering acts lessen s 19

the precedential force of this conclusion, it is true, but we nonetheless find the First 20

Capital Asset Management court’s detailed analysis persuasive for present purposes .) 21

T he same analysis applies to the remaining defendants here. The individual 22

defen dants ( Mary Lou, Garvey, and Vitti ) are alleged to have actively assisted David 2341 when he operated the Estate to effectuate his schemes , which directly affected his 1

management of the Estate . Although the entity defendants (Silver Knot and Red Knot) 2

were used simply to effectuate David’s schemes, they als o can be understood to have 3

sufficiently assisted David in his conduct of the Estate’s affairs simply by their 4

formation and existence: they were necessary tools for the schemes ’ operation

. Such 5

assistance may fairly be considered “participation” in the operation or management of 6

an enterprise, at least in the circumstances alleged here. 14 7

We bear in mind that the “operation or management” t est is “essentially one of 8

fact. ” I d. at 176 . Accordingly, at this early pleading stage in the suit, we conclude that 9

Virginia’s allegations suffice to support her claim that each Defendant participate d in 10

the operation or management of the E state as enterprise

, in violation of section 1962(c). 11

Thus, Virginia has sufficie ntly stated a civil RICO claim against all Defendants arising 12

out of their alleged violation of section 1962(c). Our legal conclusions as to the adequacy 13

of the Complaint’s pleadings of the theories under sections 1962(b) and (c) reanimate 14

Virginia’s RICO conspiracy theory under section 1962(d), as well. 15

14 S ection 1962(c) prohibits both “conduct[ing]” an enterprise’s affairs and “participat[ing]” in the conduct of an enterprise’s affairs, while section 1962(b) prohibition centers on “acquir[ing] or maintain[ing] . . . control of any enterprise.” Although Virg inia has not pleaded that Mary
Lou, Vitti, or Silver Knot “ acquire [ d ] or maintain [ ed ]” control over the Estate for section 1962(b)

purposes , see Part III, above , we conclude that her allegations are sufficient to make out a claim

that those defendants “ par ticipate [ d ]” in the conduct of the Estate’s affairs under section 1962(c)

. We identify an important difference between the two.42 CONCLUSION 1

For the reasons stated above, we conclude that Virginia has adequately pleaded a 2

RICO claim under 18 U.S.C. § 1964(c), and that her claim is ripe insofar as she seeks 3

damages in the amount of the collection expenses that she has incurred through the 4

filing of the Complaint

. Whether she will be entitled to collect those expenses from 5

D efendants, of course, will depend on whether she is able to prove her claims. Because 6

Virginia pleaded a cognizable federal RICO claim, we also conclude that the Dis trict 7

Court on remand should revisit the question whether to exercise supplemental 8

jurisdiction over Virginia’s state law claims. 9

We therefore VACA TE the District Court’s judgment and REMAND the cause 10

for further proceedings in the District Court. 11