Opinion ID: 566797
Heading Depth: 2
Heading Rank: 1

Heading: Were Predicate Acts Properly Pleaded?

Text: 25 As the Court has recently stated, the definitional section of the RICO statute, 18 U.S.C. § 1961, does not so much define a pattern of racketeering activity as state a minimum necessary condition for the existence of such a pattern. H.J. Inc. v. Northwestern Bell Telephone Co., 492 U.S. 229, 237, 109 S.Ct. 2893, 2899, 106 L.Ed.2d 195 (1989). In Congress' view, such a pattern requires at least two acts of racketeering activity, one of which occurred after [October 15, 1979] and the last of which occurred within ten years (excluding any period of imprisonment) after the commission of a prior act of racketeering activity. 18 U.S.C. § 1961(5); see also H.J., 492 U.S. at 237, 109 S.Ct. at 2899; Fleet Credit Corp. v. Sion, 893 F.2d 441, 444 (1st Cir.1990). The predicate acts of which the RICO statute speaks are, basically, acts indictable under any one or more of certain specified criminal laws. See 18 U.S.C. § 1961(1)(B). This compendium includes the mail and wire fraud statutes, 18 U.S.C. §§ 1341, 1343, and the Travel Act, 18 U.S.C. § 1952. 26 Whether or not the appellants succeeded in setting out the appellees' involvement in the racketeering acts essential to the RICO claim depends, in the last analysis, on the appellants' allegations of mail and wire fraud. 8 It is settled law in this circuit that Fed.R.Civ.P. 9(b), which requires a party to plead fraud with particularity, extends to pleading predicate acts of mail and wire fraud under RICO. See New England Data Services, Inc. v. Becher, 829 F.2d 286, 290 (1st Cir.1987). As in any other fraud case, the pleader is required to go beyond a showing of fraud and state the time, place and content of the alleged mail and wire communications perpetrating that fraud. Id. at 291. The appellants have not carried that burden. 27 In the section of their complaint entitled fraudulent activities, the plaintiffs averred: 28 Beginning in late 1985 and continuing thereafter to the present, the Defendants herein together or with other persons known and unknown, devised a scheme to defraud Plaintiffs and conducted their affairs through a pattern of racketeering activity in violation of 18 U.S.C., Section 1962(c) and (d). This pattern of racketeering activity consisted of various acts in violation of 18 U.S.C., Section 1341 relating to mail fraud, [and] 18 U.S.C. [s] 1343 relating to wire fraud.... 29 Neither in this part of the complaint nor in count 1 proper did the plaintiffs supply any additional detail as to when the communications occurred, where they took place, or what they contained. 9 Absent this rudimentary information, the complaint fell measurably short of meeting Rule 9(b)'s specificity requirement. It is not enough for a plaintiff to file a RICO claim, chant the statutory mantra, and leave the identification of predicate acts to the time of trial. See Becher, 829 F.2d at 292 (merely stat[ing] conclusory allegations of mail and wire fraud ... with no description of any time, place or content of the communication does not satisfy the pleader's burden). 30 In a garden-variety fraud case, this deficit would eliminate the need for further inquiry. See, e.g., Powers v. Boston Cooper Corp., 926 F.2d 109, 111 (1st Cir.1991) (Rule 9(b) entails specifying in the pleader's complaint the time, place, and content of the alleged false or fraudulent representations); McGinty v. Beranger Volkswagen, Inc., 633 F.2d 226, 228 (1st Cir.1980) (similar). But, we have placed a special gloss on Rule 9(b) in the RICO context. In Becher, after concluding that the plaintiff's complaint was insufficient to pass Rule 9(b) muster, we determined that the district court, regardless, abused its discretion in dismissing the action without allowing a brief period for further discovery to aid the plaintiff's ongoing effort to achieve compliance with the rule. 829 F.2d at 292. We held, in essence, that there are certain circumstances in the RICO context where the district court must not only apply Rule 9(b), but must proceed a step further before granting a motion to dismiss: 31 In an appropriate case, where, for example[,] the specific allegations of the plaintiff make it likely that the defendant used interstate mail or telecommunications facilities, and the specific information as to use is likely in the exclusive control of the defendant, the court should make a second determination as to whether the claim as presented warrants the allowance of discovery and if so, thereafter provide an opportunity to amend the defective complaint. 32 Becher, 829 F.2d at 290. 33 The Becher precedent does not assist the appellants. There, the plaintiff had explicitly requested, and was refused, an opportunity for discovery and a chance to file a further amended complaint. 10 Here, however, the plaintiffs initiated no discovery. They did not ask the district court to stay its hand pending an opportunity for discovery. They neither sought leave to amend their complaint nor suggested to the court below that, by amending, they could cure the infirmities that infected the RICO count in terms of the supposed culpability of the six appellees. These distinctions set the instant case well apart from Becher. 34 We have written that [c]ourts, like the Deity, are most frequently moved to help those who help themselves. Paterson-Leitch Co. v. Massachusetts Municipal Wholesale Elec. Co., 840 F.2d 985, 989 (1st Cir.1988) (holding that Rule 56(f), permitting delay of summary judgment proceedings to allow an objector to conduct discovery, did not avail a party who neglected seasonably to invoke the rule). Here, the plaintiffs slept upon what they now claim were their entitlements. On appeal, they contend for the first time that they should have been granted discovery and the right to amend before the district court ended their attempt to sue the appellees under RICO. In our judgment, that lament comes too late: 35 It is the practice in this circuit that, when a plaintiff, rather than amending, chooses to appeal from a judgment of dismissal, the court of appeals, if the order of dismissal is affirmed, will not permit an amended complaint to be filed. 36 Royal Business Group, Inc. v. Realist, Inc., 933 F.2d 1056, 1066 (1st Cir.1991); accord Powers, 926 F.2d at 112; Rivera-Gomez v. de Castro, 843 F.2d 631, 635-36 (1st Cir.1988). In this case, there is no sound reason to overlook the usual rules of pleading and practice and relieve the appellants from their seemingly deliberate choice to stand or fall upon their complaint as pleaded. See Beaulieu v. United States IRS, 865 F.2d 1351, 1352 (1st Cir.1989) (it is a party's obligation to seek any relief that might fairly have been thought available in the district court before seeking it on appeal); James v. Watt, 716 F.2d 71, 78 (1st Cir.1983) (plaintiffs should not ordinarily be allowed to stand on their complaint as pleaded, pursue a case to judgment and then, if they lose, to reopen the case by amending their complaint to take account of the court's decision), cert. denied, 467 U.S. 1209, 104 S.Ct. 2397, 81 L.Ed.2d 354 (1984); cf. Paterson-Leitch, 840 F.2d at 989 & n. 4 (objector who elected to meet summary judgment motion head-on, without invoking Fed.R.Civ.P. 56(f), and lost, could not thereafter employ the rule to spare it from the consequences of its own lack of diligence). 37 To recapitulate, we are not so foolhardy as to require district judges to act as mind readers. Although Becher may in certain circumstances give a plaintiff a second bite at the apple, its generous formulation is not automatically bestowed on every litigant. In a RICO action where fraud has not been pleaded against a given respondent with the requisite specificity and Rule 9(b) has been flouted, dismissal should follow as to that respondent unless the plaintiff, at a bare minimum, suggests to the district court, in a timely manner, that a limited period of discovery will likely allow him to plug the holes in the complaint and requests leave (i) to conduct discovery for this limited purpose and (ii) thereafter to amend his complaint. It is only then that a district court must take a second look to ascertain whether a particular case is appropriate, Becher, 829 F.2d at 290, for the special unguent of deferral. 38