Opinion ID: 1212404
Heading Depth: 2
Heading Rank: 4

Heading: The RICO Enterprise and Pattern Requirements

Text: To the extent pertinent to this case, the normative sections of RICO provide as follows: (c) 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 . . . . (d) It shall be unlawful for any person to conspire to violate any of the provisions of subsection . . . (c) of this section. 18 U.S.C. §§ 1962(c), (d) (emphases added). RICO defines enterprise to include[] any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity. Id. § 1961(4). The existence of an enterprise may be proved by evidence of an ongoing organization, formal or informal, and by evidence that the various associates function as a continuing unit. United States v. Turkette, 452 U.S. 576, 583, 101 S.Ct. 2524, 69 L.Ed.2d 246 (1981). An individuals associated in fact enterprise, 18 U.S.C. § 1961(4), may continue to exist even though it undergoes changes in membership. See, e.g., United States v. Coonan, 938 F.2d 1553, 1560-61 (2d Cir.1991), cert. denied, 503 U.S. 941, 112 S.Ct. 1486, 117 L.Ed.2d 628 (1992). The RICO statute defines `racketeering activity' to include crimes such as murder, kidnaping, bribery, and controlled substance offenses that are felonies under state law; drug trafficking crimes that are felonies under federal law; and other federal crimes such as obstructing a criminal investigation, retaliating against a witness, money laundering, and engaging in monetary transactions in property derived from specified unlawful activity. 18 U.S.C. §§ 1961(1)(A), (B), (D). As discussed below, a pattern of racketeering activity is . . . a series of criminal acts as defined by the statute. Turkette, 452 U.S. at 583, 101 S.Ct. 2524. The evidence used to establish the enterprise and the pattern may in particular cases coalesce, id.; and evidence of prior uncharged crimes and other bad acts that were committed by defendants [] may be relevant . . . to prove the existence, organization and nature of the RICO enterprise, and a pattern of racketeering activity by each defendant [], United States v. Diaz, 176 F.3d 52, 79 (2d Cir.), cert. denied, 528 U.S. 875, 120 S.Ct. 121, 315, 145 L.Ed.2d 153 (1999). RICO provides that a `pattern of racketeering activity' requires at least two acts of racketeering activity, one of which occurred after the effective date of this chapter [ i.e., October 15, 1970] 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). The Supreme Court in H.J. Inc. v. Northwestern Bell Telephone Co., 492 U.S. 229, 109 S.Ct. 2893, 106 L.Ed.2d 195 (1989), noted that this provision does not so much define a pattern of racketeering activity as state a minimum necessary condition for the existence of such a pattern, and that it places an outer limit on the concept of a pattern of racketeering activity that is broad indeed. Id. at 237, 109 S.Ct. 2893. The Court noted that the dictionary definition of `pattern' is an ` arrangement or order of things or activity,' id. at 238, 109 S.Ct. 2893 (quoting 11 Oxford English Dictionary 357 (2d ed.1989)) (emphasis ours), and it pointed out that the mere fact that there are a number of predicates is no guarantee that they fall into any arrangement or order. It is not the number of predicates but the relationship that they bear to each other or to some external organizing principle that renders them ordered or arranged. The text of RICO conspicuously fails anywhere to identify, however, forms of relationship or external principles to be used in determining whether racketeering activity falls into a pattern for purposes of the Act. H.J. Inc., 492 U.S. at 238, 109 S.Ct. 2893 (emphasis added). The Court concluded that [i]t is reasonable to infer, from this absence of any textual identification of sorts of pattern that would satisfy § 1962's requirement, in combination with the very relaxed limits to the pattern concept fixed in § 1961(5), that Congress intended to take a flexible approach, and envisaged that a pattern might be demonstrated by reference to a range of different ordering principles or relationships between predicates, within the expansive bounds set. Id. (emphasis added). Looking to RICO's legislative history, the Court found discussions showing that Congress used the term pattern in order to exclude activity that was isolated or sporadic and to require instead the showing of a relationship between the predicates, . . . and of the threat of continuing activity. Id. at 239, 109 S.Ct. 2893 (internal quotation marks omitted). `It is this factor of continuity plus relationship which combines to produce a pattern.' Id. (quoting Report of the Senate Judiciary Committee, S.Rep. No. 91-617, 91st Cong., 1st Sess. (Dec. 18, 1969), at 158) (emphasis in H.J. Inc. ). The Court concluded that RICO's legislative history reveals Congress' intent that to prove a pattern of racketeering activity a plaintiff or prosecutor must show that the racketeering predicates are related, and that they amount to or pose a threat of continued criminal activity. H.J. Inc., 492 U.S. at 239, 109 S.Ct. 2893 (emphasis in original). As to relatedness, the H.J. Inc. Court noted that in another part of the legislation that included RICO, Congress had stated that [c]riminal conduct forms a pattern if it embraces criminal acts that have the same or similar purposes, results, participants, victims, or methods of commission, or otherwise are interrelated by distinguishing characteristics and are not isolated events. Id. at 240, 109 S.Ct. 2893 (internal quotation marks omitted). The Court concluded that there was no reason to suppose that Congress had intended any more constrained a notion as to what relationships between RICO predicate acts would suffice to show a pattern of racketeering activity. See id. As to the continuity component of the RICO pattern element, the Court noted that while continuity and relatedness are concepts that are analytically separate, proof of the two will often overlap. Id. at 239, 109 S.Ct. 2893. The Court noted that the threat of continuity is sufficiently established where the predicates can be attributed to a defendant operating as part of a long-term association that exists for criminal purposes. Id. at 242-43, 109 S.Ct. 2893 (emphasis added). But because continuity or its threat may be proven in a variety of ways, it is difficult to formulate in the abstract any general test for continuity. Id. at 241, 109 S.Ct. 2893 (emphasis added). With no general abstract test for continuity, and with the uncertainty inherent in RICO's pattern component, the Court observed that [t]here is no obviously 'correct' level of generality for courts to use in describing the criminal activity alleged in RICO litigation. Id. at 241 n. 3, 109 S.Ct. 2893.