Opinion ID: 666893
Heading Depth: 2
Heading Rank: 1

Heading: Dismissal of Vicom's Amended Complaint

Text: 18 The defendants invite us to affirm the district court's dismissal of Vicom's amended complaint under Rule 8(a) on the basis of the amended complaint's prolixity. The district court appears to have come close to taking this route. Because we too are dismayed by Vicom's 119-page, 385-paragraph less-than-coherent amended complaint, we shall address the defendants' argument. 19 Rule 8(a)(2) requires a short and plain statement of the claim showing that the pleader is entitled to relief. In addition, Rule 8(e)(1) states that [e]ach averment of a pleading shall be simple, concise, and direct. The primary purpose of these provisions is rooted in fair notice: Under Rule 8, a complaint  'must be presented with intelligibility sufficient for a court or opposing party to understand whether a valid claim is alleged and if so what it is.'  Wade v. Hopper, 993 F.2d 1246, 1249 (7th Cir.) (citations omitted), cert. denied, --- U.S. ----, 114 S.Ct. 193, 126 L.Ed.2d 151 (1993); see also Jennings v. Emry, 910 F.2d 1434, 1436 (7th Cir.1990) (stating that a complaint must be presented with clarity sufficient to avoid requiring a district court or opposing party to forever sift through its pages in search of what it is the plaintiff asserts). A complaint that is prolix and/or confusing makes it difficult for the defendant to file a responsive pleading and makes it difficult for the trial court to conduct orderly litigation. See 2A Moore's Federal Practice Sec. 8.13, at 8-58 (noting that Rule 8 compliance allows a defendant to answer the complaint, and that Rule 8 prevents problems with conducting pretrial discovery, formulating pretrial orders, and applying res judicata); see also Michaelis v. Nebraska State Bar Assoc., 717 F.2d 437, 439 (8th Cir.1983) (affirming dismissal with prejudice of needlessly prolix and confusing complaint because the style and prolixity of these pleadings would have made an orderly trial impossible). Thus, courts should not allow plaintiffs to plead[ ] by means of obfuscation. Jennings, 910 F.2d at 1436. 20 Because it is difficult to file a pleading in response to a prolix and confusing complaint, doing so also can be costly. The Ninth Circuit discussed the expenditure of a defendant's resources, as well as the costs to nonparty litigants, when it affirmed the district court's dismissal with prejudice of a plaintiff's verbose and confusing amended complaint: 21 The appellees herein have had to spend a large amount of time and money defending against Cissna's poorly drafted proceedings in this and related actions. The right of these defendants to be free from this costly and harassing litigation and the rights of litigants awaiting their turns to have other matters resolved must be considered and the judgment of dismissal with prejudice affirmed. 22 Nevijel v. North Coast Life Ins. Co., 651 F.2d 671, 675 (9th Cir.1981) (citation omitted). 3 23 Many plaintiffs attempt to excuse lengthy and confusing complaints by pointing to the type of claim or theory under which they are pleading. RICO plaintiffs, for instance, often state that the complexity of the RICO statute somehow exempts RICO complaints from the strictures of Rule 8. Vicom stated as much at oral argument in this case. However, the caselaw is clear that, although RICO complaints often might need to be somewhat longer than many complaints, RICO complaints must meet the requirements of Rule 8(a)(2) and Rule 8(e)(1). See, e.g., Hartz v. Friedman, 919 F.2d 469, 471 (7th Cir.1990) (stating that trial court could have dismissed 125-page RICO complaint pursuant to Rule 8(a)(1)); Jennings, 910 F.2d at 1434 (stating that the fact that RICO is being pled does not make Rule 8(e)(1) any less applicable). Moreover, the particularity demands of pleading fraud under Rule 9(b) in no way negate the commands of Rule 8. See, e.g., Thornton v. Evans, 692 F.2d 1064, 1082 n. 41 (7th Cir.1982) (stating that detailed allegations required by Rule 9(b) must 'be [made] consistently with the general philosophy of Rule 8(e)(1)' ) (quoting 5 Wright & Miller, Federal Practice and Procedure Sec. 1281, at 364 (1969)); see also Moore's Federal Practice Sec. 8.13, at 8-57, 8-58. 24 Vicom's confusing, redundant, and seemingly interminable amended complaint violated the letter and the spirit of Rule 8(a). However, the district court decided not to dismiss it under Rule 8(a) because the court did not believe that dismissal with leave to replead would have resulted in a vastly improved second amended complaint. The district court's reluctance to give Vicom a third chance is understandable. But given the fact that Vicom had already amended its complaint once, we think the district court should have given more serious consideration to dismissing Vicom's amended complaint with prejudice. Nonetheless, despite Vicom's egregious violation of Rule 8(a), we shall treat the complaint on its merits because the district court chose to do so. Hartz, 919 F.2d at 471; see also Wade v. Hopper, 993 F.2d 1246, 1249 (7th Cir.1993) (same); Jennings, 910 F.2d at 1436 (same).
25 The district court dismissed one of the RICO counts in Vicom's amended complaint for failing to plead fraud with particularity as required by Rule 9(b). Further, although the district court dismissed the rest of the counts alleged in the amended complaint on other grounds, it held in the alternative that another of Vicom's counts failed to meet the requirements of Rule 9(b). Moreover, the defendants direct our attention to all the counts Vicom alleges in its amended complaint; they essentially submit that the entire amended complaint was devoid of the specifics Rule 9(b) demands. 26 Rule 9(b) states that [i]n all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity. The rule is said to serve three main purposes: (1) protecting a defendant's reputation from harm; (2) minimizing strike suits and fishing expeditions; and (3) providing notice of the claim to the adverse party. See UniQuality, Inc. v. Infotronx, Inc., 974 F.2d 918, 924 (7th Cir.1992); DiVittorio v. Equidyne Extractive Indus., Inc., 822 F.2d 1242, 1247 (2d Cir.1987). Although some have questioned Rule 9(b)'s effectiveness in serving these purposes, 4 the caselaw and commentary agree that the reference to circumstances in the rule requires the plaintiff to state 'the identity of the person who made the misrepresentation, the time, place and content of the misrepresentation, and the method by which the misrepresentation was communicated to the plaintiff.'  Uniquality, 974 F.2d at 923 (quoting Bankers Trust Co. v. Old World Republic Ins. Co., 959 F.2d 677, 683 (7th Cir.1992)); see also Midwest Grinding Co. v. Spitz, 976 F.2d 1016, 1020 (7th Cir.1992) (stating that in a RICO action the complaint must, at a minimum, describe the predicate acts with some specificity and 'state the time, place, and content of the alleged communications perpetrating the fraud' ) (quoting Graue Mill Dev. Corp. v. Colonial Bank & Trust Co., 927 F.2d 988, 992 (7th Cir.1991)); DiLeo v. Ernst & Young, 901 F.2d 624, 627 (7th Cir.) (stating that Rule 9(b) particularity means the who, what, when, where, and how: the first paragraph of any newspaper story), cert. denied, 498 U.S. 941, 111 S.Ct. 347, 112 L.Ed.2d 312 (1990); 5 Wright & Miller, supra, Sec. 1297, at 590. 27 The district court concluded that two RICO counts in Vicom's amended complaint failed to satisfy any of these particularized pleading requirements. The district court focused specifically on Vicom's failure to allege the specific identity of the individuals who made the alleged misrepresentations. Many of the allegations simply state that the misrepresentations were made at the direction, under the supervision, or with the knowledge and consent of all the defendants. Such pleading would appear to fall short of the standards set forth in the caselaw. Because fair notice is [p]erhaps the most basic consideration underlying Rule 9(b), Wright & Miller, supra, Sec. 1298, at 648, the plaintiff who pleads fraud must reasonably notify the defendants of their purported role in the scheme. Midwest Grinding, 976 F.2d at 1020. Therefore, in a case involving multiple defendants, such as the one before us, the complaint should inform each defendant of the nature of his alleged participation in the fraud. DiVittorio, 822 F.2d at 1247; see also Mills v. Polar Molecular Corp., 12 F.3d 1170, 1175 (2d Cir.1993) (Rule 9(b) is not satisfied where the complaint vaguely attributes the alleged fraudulent statements to 'defendants.' ); Balabanos v. North Am. Inv. Group, Ltd., 708 F.Supp. 1488, 1493 (N.D.Ill.1988) (stating that in cases involving multiple defendants the complaint should inform each defendant of the specific fraudulent acts that constitute the basis of the action against the particular defendant). We previously have rejected complaints that have lumped together multiple defendants. For instance, in Sears v. Likens, 912 F.2d 889, 893 (7th Cir.1990), we affirmed the district court's dismissal of the plaintiff's complaint with prejudice because the complaint was bereft of any detail concerning who was involved in each allegedly fraudulent activity. Instead, the complaint lump[ed] all the defendants together and [did] not specify who was involved in what activity. Id.; see also Design, Inc. v. Synthetic Diamond Technology, Inc., 674 F.Supp. 1564, 1569 (N.D.Ill.1987) (discussing the prohibition on lumping defendants together). 5 28 An examination of the amended complaint brings us to the conclusion that, at many points, Vicom's complaint lacks the requisite specifity. Vicom has often failed to identify with particularity the actors who participated in the various schemes it alleges. Moreover, Vicom seems not to have done so because of lack of knowledge, but rather out of poor pleading. For example, in Count 1, Vicom alleges that a Peach Tree sales representative misrepresented to a merchant that its lease for the electronic credit card processing equipment was cancelable. The amended complaint states neither who made the misrepresentation nor on what date it was made. Amended Complaint at p 235. However, in Exhibit G of the amended complaint, Vicom has included the letter in which the misrepresentation was made, and that letter contains both the name of the Peach Tree sales representative and the date of the misrepresentation. 29 We certainly can see why the district court concluded that, at least with respect to some allegations, Vicom had not met Rule 9(b) standards. Nonetheless, instead of parsing the 119-page, 385-paragraph, we think it more expeditious to decide the main substantive issue presented by this appeal: whether Vicom has pleaded successfully the RICO violations at the heart of the amended complaint. See In re Scarlata, 979 F.2d 521, 525 n. 5 (7th Cir.1992) (stating that we may affirm dismissal of a complaint on any grounds consistent with the facts alleged).
30 Vicom's amended complaint alleges counts of RICO violations based on 18 U.S.C. Sec. 1962(c) and Sec. 1962(a). A RICO plaintiff alleging a violation of Sec. 1962(c) must show (1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity. Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 496, 105 S.Ct. 3275, 3285, 87 L.Ed.2d 346 (1985) (footnote omitted). A Sec. 1962(a) violation, on the other hand, requires the receipt of income from a pattern of racketeering activity, and the use of that income in the operation of an enterprise. Morgan v. Bank of Waukegan, 804 F.2d 970, 972-73. 6 Although the subsections vary in some of their requirements, a pattern of racketeering activity must exist to find a violation of either subsection. A pattern of racketeering activity consists of at least two predicate acts of racketeering committed within a ten-year period. 18 U.S.C. Sec. 1961(5). Because the RICO statute has nothing more to say about its pattern requirement, the Supreme Court has attempted to sharpen the contours of the pattern requirement in order to effectuate the congressional intent with respect to the statute's use. The Court has stated that, because Congress enacted RICO not out of concern for a sporadic fraudulent act but out of concern for long-term conduct, a plaintiff ... must show that the racketeering predicates are related, and that they amount to or pose a threat of continued criminal activity. H.J., Inc. v. Northwestern Bell Tel. Co., 492 U.S. 229, 239, 109 S.Ct. 2893, 2900, 106 L.Ed.2d 195 (1989); see also Sedima, 473 U.S. at 496 n. 14, 105 S.Ct. at 3285 n. 14. The relationship part of this continuity plus relationship test requires that the predicate acts be committed somewhat closely in time to one another, involve the same victim, or involve the same type of misconduct. Morgan, 804 F.2d at 975. However, as with the vast majority of cases dealing with the RICO pattern requirement, the case before us does not turn on the relatedness of the alleged predicate acts. Instead, we must focus on whether the pattern of racketeering Vicom alleges satisfies the continuity prong of that test. 31 In H.J., Inc., the Supreme Court stated that continuity is both a closed- and open-ended concept, referring either to a closed period of repeated conduct, or to past conduct that by its nature projects into the future with a threat of repetition. 492 U.S. at 241, 109 S.Ct. at 2901. Yet regardless of which type of continuity is at issue, continuity is centrally a temporal concept. Id. at 242, 109 S.Ct. at 2902. Because allegations of conduct that can be characterized as either closed- or open-ended suffice to satisfy the continuity prong of the pattern requirement, we shall examine whether the conduct alleged in Vicom's amended complaint meets either standard. 32
33 In order to demonstrate a pattern over a closed period, a RICO plaintiff must prov[e] a series of related predicates extending over a substantial period of time. Id. In H.J., Inc., the Supreme Court emphasized this durational aspect of closed-ended continuity: Predicate acts extending over a few weeks or months and threatening no future criminal conduct do not satisfy this requirement: Congress was concerned in RICO with long-term conduct. Id. In order to analyze the continuity prong of the pattern requirement, our post-H.J., Inc. caselaw has continued to find helpful the factors we set out in Morgan v. Bank of Waukegan, 804 F.2d 970, 975 (7th Cir.1986). 7 These factors include the number and variety of predicate acts and the length of time over which they were committed, the number of victims, the presence of separate schemes and the occurrence of distinct injuries. Id. at 975. We are to apply these factors with an eye toward achieving a  'natural and commonsense'  result, recognizing that  'Congress was concerned in RICO with long-term criminal conduct.'  United States Textiles, 911 F.2d at 1267 (quoting H.J., Inc., 492 U.S. at 237, 109 S.Ct. at 2899). 34 With this background in mind, we examine Vicom's RICO allegations with respect to duration--the length of time over which the alleged predicate acts were committed. Duration is perhaps the closest thing we have to a brightline continuity test. Midwest Grinding Co. v. Spitz, 976 F.2d 1016, 1024 (7th Cir.1992). In several recent cases, this court has placed great importance on the length of time the alleged predicate acts have spanned. In Midwest Grinding, for instance, the court found it significant that the predicate acts behind the closed-ended period of racketeering activity went on for only nine months. Id. Similarly, in UniQuality, Inc. v. Infotronx, Inc., 974 F.2d 918, 922 (7th Cir.1992), the court concluded that one scheme that lasted at most seven to eight months was precisely the type of short-term, closed-ended fraud that, subsequent to H.J., Inc., this circuit consistently has held does not constitute a pattern. See also Olive Can, 906 F.2d at 1151 (calling six months in the same context a short period of time). 35 In both its amended complaint and its opening brief, Vicom concedes that the predicate acts behind the alleged schemes took place over a time span of less than nine months (i.e., July 1988 to April 1989). We have not ventured as far as the Third Circuit in holding that predicate acts spanning less than one year do not as a matter of law constitute a substantial period of time as required by H.J., Inc., 492 U.S. at 242, 109 S.Ct. at 2902. See Hughes v. Consol-Pennsylvania Coal Co., 945 F.2d 594, 611 (3d Cir.1991) (We hold that twelve months is not a substantial period of time.), cert. denied, --- U.S. ----, 112 S.Ct. 2300, 119 L.Ed.2d 224 (1992); see also Primary Care Inv. v. PHP Healthcare Corp., 986 F.2d 1208, 1215 (8th Cir.1993) (stating that the activity lasted between ten and eleven months and ... we deem this period insubstantial). Nonetheless, Vicom's amended complaint nonetheless suffers from serious durational problems. The cases in our circuit, set out above, such as Midwest Grinding, 976 F.2d at 1024, demonstrate that a time frame of less than nine months likely does not satisfy the duration requirement. In fact, none of our cases has held that such a short time frame satisfies the durational aspect of closed-ended continuity. 8 Indeed, many of our cases have held that time frames longer than the one Vicom alleges do not constitute a substantial period of time. See, e.g., J.D. Marshall Int'l v. Redstart, Inc., 935 F.2d 815, 821 (7th Cir.1991) (thirteen months); see also Midwest Grinding, 976 F.2d at 1024 (cataloging Seventh Circuit cases and time frames). 9 Under our caselaw, then, Vicom's amended complaint cannot meet the durational aspect of closed-ended continuity. 36 Although duration is the single most important aspect of the closed-ended continuity analysis, we still must examine Vicom's amended complaint under the rest of the Morgan factors. We therefore consider the number and variety of the predicate acts. See Morgan, 804 F.2d at 975. Although Vicom's prolixity makes it seem as though Vicom alleges innumerable predicate acts to support its causes of action, a careful reading of the amended complaint reveals otherwise. When all the verbiage is weeded out, Vicom manages to allege a very few acts of mail or wire fraud in each count. Just as important, Vicom's amended complaint does not allege a variety of predicate acts as that phrase is understood in the caselaw. Instead, the only predicate acts that Vicom offers to support its Sec. 1962(c) claims throughout its complaint are acts of mail and wire fraud. The Seventh Circuit, however, does not look favorably on relying on many instances of mail and wire fraud to form a pattern. Hartz v. Friedman, 919 F.2d 469, 473 (7th Cir.1990). This position has been reiterated in various cases, usually by means of an oft-quoted remark in Lipin Enterprises, Inc. v. Lee, 803 F.2d 322 (7th Cir.1986): 37 Mail fraud and wire fraud are perhaps unique among the various sorts of 'racketeering activity' possible under RICO in that the existence of a multiplicity of predicate acts ... may be no indication of the requisite continuity of the underlying fraudulent activity. Thus, a multiplicity of mailings does not necessarily translate directly into a 'pattern' of racketeering activity. 38 Id. at 325 (Cudahy, J., concurring); see also Hartz, 919 F.2d at 473 (quoting Lipin remark); United States Textiles, 911 F.2d at 1268 (same); Sutherland v. O'Malley, 882 F.2d 1196, 1205 n. 8 (7th Cir.1989) (same); Ashland Oil, Inc. v. Arnett, 875 F.2d 1271, 1278 (7th Cir.1989) (stating that the number of [mail and wire fraud] offenses is only tangentially related to the underlying fraud, and can be a matter of happenstance). 39 The next Morgan factor, the number of victims involved, see Morgan, 804 F.2d at 975, is more difficult. Although the defendants submit that Vicom was the sole alleged victim, it appears that Vicom has alleged the merchants to be victims as well. It is true that the schemes themselves were not directed at the merchants; nevertheless, the predicate acts in which Vicom alleges the defendants have engaged to further the alleged schemes would have victimized the merchants. However, this consideration, standing alone, is in no way dispositive of whether the predicate acts alleged in the amended complaint can support a finding that continuity exists. For instance, in Olive Can, 906 F.2d at 1151, there were a large number of predicate acts and a number of victims, but the court still found that the short time frame and the lack of variety in the predicate acts militated against finding continuity. The Morgan court itself stated that the doctrinal requirement of a pattern of racketeering activity is a standard, not a rule--with no one factor being necessarily dispositive. Morgan, 804 F.2d at 976. 40 Another factor we look to under Morgan is the number of schemes involved. See Morgan, 804 F.2d at 975. Despite its attempts to allege otherwise, Vicom essentially alleges that Peach Tree had one scheme--to sell as much equipment as possible in order to increase the net worth of the company. Vicom's complaint alleges five schemes, but does so in the same manner that it alleges predicate acts. A careful, but charitable, reading of the complaint reveals that the other schemes (e.g., inducing merchants to enter into fraudulent leases, inducing Vicom to enter into fraudulent leases) all revolve around Vicom's allegation that Peach Tree intended to increase its net worth by any means necessary. The Supreme Court has held that courts can no longer conclude that the pattern requirement has not been satisfied solely on the basis that the plaintiff alleged only one scheme. H.J., Inc., 492 U.S. at 235, 109 S.Ct. at 2898. Nonetheless, as our continued use of the Morgan factors makes clear, the number of schemes is still relevant as to whether continuity exists. 41 Finally, the last Morgan factor which we consider in determining whether closed-ended continuity exists is the occurrence of distinct injuries. Morgan, 804 F.2d at 975. From Vicom's perspective, a distinct injury was inflicted through every individual predicate act. On previous occasions, however, we have rejected such an approach. For instance, in United States Textiles, 911 F.2d at 1269, we did not find that the defendant suffered [a distinct] economic injury each time [the plaintiff] ordered and it shipped ... under the [contract] terms. Instead, we stated that a natural and common sense approach to the pattern element of RICO would instruct that identical economic injuries suffered over the course of two years stemming from a single contract were not the type of injuries which Congress intended to compensate via the civil provisions of RICO. Id. Such is the case with Vicom's allegations of economic injury. They stem from the same original contract and similar predicate acts. Thus, Vicom's alleged injuries--losses on cancelable or potentially cancelable leases--are not distinct. 42 In short, we conclude that Vicom has not alleged closed-ended continuity in its amended complaint. Many circuits would not have gone any further than determining that the predicate acts spanned only nine months, thereby failing to constitute a substantial period of time under H.J., Inc., 492 U.S. at 242, 109 S.Ct. at 2898. See, e.g., Fleet Credit Corp. v. Sion, 893 F.2d 441, 445-47 (1st Cir.1990) (finding Morgan factors no longer viable after H.J., Inc. directed courts to focus on duration); Hughes v. Consol-Pennsylvania Coal Co., 945 F.2d 594, 611 (3d Cir.1991) (We hold that twelve months is not a substantial period of time.), cert. denied, --- U.S. ----, 112 S.Ct. 2300, 119 L.Ed.2d 224 (1992). Nonetheless, even under our more extensive Morgan analysis, Vicom has failed to allege sufficiently closed-ended continuity so as to satisfy the continuity prong of the pattern requirement. 43
44 Because the predicate acts alleged in Vicom's amended complaint cannot support a finding of closed-ended continuity, we now examine whether Vicom can fulfill the continuity prong by establishing open-ended continuity. Continuity as an open-ended concept refers to past conduct that by its nature projects into the future with a threat of repetition. H.J., Inc., 492 U.S. at 241, 109 S.Ct. at 2901. When a RICO action [is] brought before [closed-ended] continuity can be established, liability depends on whether the threat of continuity is demonstrated. Id. at 242, 109 S.Ct. at 2902. Thus, although a RICO plaintiff must show duration to allege closed-ended continuity, open-ended continuity may satisfy the continuity prong of the pattern requirement regardless of its brevity. See id.; Midwest Grinding, 976 F.2d at 1023 (An open-ended period of racketeering ... is a course of criminal activity which lacks the duration and repetition to establish continuity.). Open-ended continuity is present when (1) a specific threat of repetition exists, (2) the predicates are a regular way of conducting [an] ongoing legitimate business, or (3) the predicates can be attributed to a defendant operating as part of a long-term association that exists for criminal purposes. H.J., Inc., 492 U.S. at 242-43, 109 S.Ct. at 2902; see also Midwest Grinding, 976 F.2d at 1023. We now examine each of these ways of showing open-ended continuity. 45 In assessing whether a threat of continued racketeering activity exists, we have made clear that schemes which have a clear and terminable goal have a natural ending point. Such schemes therefore cannot support a finding of any specific threat of continuity that would constitute open-ended continuity. For instance, we based our decision in Olive Can, 906 F.2d at 1151, 46 primarily on the undisputed evidence that the purpose of the allegedly fraudulent scheme was to pay [the defendant's] loan. The scheme, therefore, had a natural ending with no threat of continued criminal activity. This single scheme was to be short-lived and there is no evidence that, had the scheme worked, it would have been repeated in the future. 47 We thus concluded that no  'specific threat of repetition'  existed. Id. (quoting H.J., Inc., 492 U.S. at 242, 109 S.Ct. at 2902). Similarly, in UniQuality, Inc. v. Infotronx, Inc., 974 F.2d 918 (7th Cir.1992), the plaintiff brought a RICO action based on the defendant's alleged scheme to defraud the plaintiff by not paying for services for which it had promised to pay. On appeal from a motion to dismiss, we concluded that the plaintiff failed to allege any threat of repetition because the scheme had a natural end point: the completion of the labor scheduling program[.] Id. at 922; see also Midwest Grinding, 976 F.2d at 1023 (concluding that no specific threat of repetition existed because of ending point). Thus, the caselaw demonstrates that acts that focus on a clearly defined, discrete, and finite goal often import no inherent threat of continuing misconduct. Gregory P. Joseph, Civil RICO: A Definitive Guide 89 (1992) (citing Phelps v. Wichita Eagle-Beacon, 886 F.2d 1262, 1272-73 (10th Cir.1989) (stating that the plaintiff failed to show open-ended continuity because he had merely alleged a scheme to accomplish 'one discrete goal,' which he alleges was accomplished) (citations omitted)). 48 Because Vicom alleges a scheme that had a natural ending point, it too has failed to show a specific threat of continued racketeering activity. Vicom alleges throughout its amended complaint that Peach Tree had attempted to sell as much equipment as possible in order to inflate its value in the eyes of a prospective purchaser. For instance, Vicom states that the defendants' collective goal was to sell as much Equipment to plaintiff as possible in a short period of time with the intent to sell Peach Tree. Amended Complaint at p 83. 10 In alleging such a scheme, Vicom basically concedes that there existed no specific threat of continued racketeering activity. There was, as the cases above point out, a natural end point that precluded such a threat. See UniQuality, 974 F.2d at 922. Finally, Vicom's cursory and unparticularized allegations that defendant James Elliot continues to engage in racketeering activity through a new company does not alter our conclusion. A threat of continuity cannot be found from bald assertions such as James Elliot continues his racketeering activities. Amended Complaint at p 227. 49 If no specific threat of continuity exists, however, a RICO plaintiff can also allege open-ended continuity by showing that the predicate acts are a regular way of conducting [the] defendant's ongoing legitimate business. H.J., Inc., 492 U.S. at 243, 109 S.Ct. at 2902. Although the caselaw is somewhat sparse on this method of showing open-ended continuity, Vicom has little ground on which to make an argument under this method. H.J., Inc. stated that the predicate acts had to be part of the RICO defendant's regular way of conducting an ongoing business. Id. at 242-43, 109 S.Ct. at 2902-03. The Court did not say that demonstrating continuity in this fashion could be based on mere common law fraud. In Fleet Credit Corp. v. Sion, 893 F.2d 441 (1st Cir.1990), the First Circuit recognized this distinction: 50 A threat of continued criminal activity for purposes of RICO is not established merely by demonstrating that the [defendant's] acts of common law fraud were a regular way of conducting their ongoing businesses. Rather, [the plaintiff] must demonstrate that the predicate acts--here the acts of mail fraud--were a regular way of conducting the ongoing businesses. 51 Id. at 448; see also Johnston v. Wilbourn, 760 F.Supp. 578, 588 n. 13 (S.D.Miss.1991) (The law is clear that proof of a threat of continued criminal activity based on the regular way a business is conducted requires proof that the predicate acts themselves were a regular way of conducting the ongoing business.). In this case, Vicom has not even attempted to allege that the predicate acts of mail and wire fraud supporting its Sec. 1962(a) and Sec. 1962(c) claims, the only predicate acts on which Vicom's RICO claims are based, were part of Peach Tree's regular way of conducting its business. 52 Because the third way to show open-ended continuity concerns long-term association[s] that exist[ ] for criminal purposes, H.J., Inc., 492 U.S. at 243, 109 S.Ct. at 2902, it is not applicable to this case. Thus, Vicom has failed to allege either closed- or open-ended continuity and, as a result, has failed to show that the predicates themselves amount to, or that they otherwise constitute a threat of, continuing racketeering activity. Id. at 240, 109 S.Ct. at 2901. Because Vicom has failed to make a showing of continuity, it has not sufficiently alleged a pattern of racketeering activity. The RICO counts in Vicom's amended complaint were therefore properly dismissed for failure to state a claim upon which relief can be granted pursuant to Rule 12(b)(6). 11 53