Opinion ID: 504005
Heading Depth: 2
Heading Rank: 3

Heading: Combustion Engineering's Liability

Text: 51 Appellants alleged in Count III that the individual defendants each violated 18 U.S.C. Sec. 1962(c), and that C-E itself violated 18 U.S.C. 1962. J.A. at 58. Section 1962(c) states: 52 It shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt. 53 18 U.S.C. 1962(c) (emphasis added). C-E contends that, although the district court did not reach the issue, its dismissal of Count III was proper as to C-E because civil RICO Sec. 1962(c) makes it unlawful for persons to engage in certain criminal activity, yet appellants pleaded that C-E was not a person but an enterprise. In B.F. Hirsch v. Enright Refining Co., 751 F.2d 628 (3d Cir.1984), we held that for the purposes of Sec. 1962(c) a person and an enterprise may not be the same entity, hence that an enterprise may not be held liable under the section. Appellants agree that their pleadings designated C-E as an enterprise and not as a person, but make two responses. 54 First, appellants respond that C-E can still be held liable under the doctrine of respondeat superior. However, we held in Petro-Tech, Inc. v. Western Co. of North America, 824 F.2d 1349, 1358 (3d Cir.1987), that although the doctrine of respondeat superior may be applied under RICO where the structure of the statute does not otherwise forbid it, the doctrine may not be applied to actions under Sec. 1962(c). Second, in the event respondeat superior liability is unavailable, appellants contend that Count III refers to Sec. 1962 generally and not specifically to Sec. 1962(c). Although appellants do not indicate which subsection Count III refers to, we note that 1962(a) provides in relevant part: 55 It shall be unlawful for any person who has received any income derived, directly or indirectly, from a pattern of racketeering activity ... to use or invest, directly or indirectly, any part of such income, in acquisition of any interest in, or the establishment or operation of, any enterprise which is engaged in, or the activities which affect, interstate or foreign commerce. 56 We observed in Petro-Tech that the language of Sec. 1962(a) differs from the language in Sec. 1962(c), and that  '[s]ubsection (a) does not contain any of the language in subsection (c) which suggests that the liable person and the enterprise must be separate.'  824 F.2d at 1360 (quoting Haroco, Inc. v. American Nat'l Bank & Trust Co., 747 F.2d 384, 402 (7th Cir.1984), aff'd per curiam, 473 U.S. 606, 105 S.Ct. 3291, 87 L.Ed.2d 437 (1985)). 57 As a result, we held in Petro-Tech that so long as the enterprise does in fact benefit from the racketeering activity challenged, there is no reason why we must ignore the corporation's role in the activity, if any, and no reason why an injured third party may not recover from the enterprise. 824 F.2d at 1361. However, because Count III does not specify whether appellants are claiming under Sec. 1962(a) or Sec. 1962(c), we conclude that there was insufficient information to determine whether Count III should have been dismissed as to C-E. We will therefore reverse the district court's dismissal of Count III and remand with instructions to allow appellants to amend the complaint to provide greater specificity.