Opinion ID: 498391
Heading Depth: 2
Heading Rank: 2

Heading: The Racketeer Influenced and Corrupt Organizations Act

Text: 42 Count III of the complaint alleged that the defendants, by attempting to extort money by fraudulent pretenses from the plaintiff and members of the putative class, were engaging in a pattern of racketeering activity in violation of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C.A. Secs. 1961-1968 (RICO). The district court found that, even if the defendants had accused and demanded satisfaction from persons who were not receiving HBO programming illegally, their actions did not rise to the level of criminal or quasi-criminal conduct necessary to support a RICO charge. We agree that the complaint fails to state a cause of action under RICO, but our decision is based on a somewhat different ground. We need not consider the more complex question of whether the plaintiff has met his burden to allege satisfactorily racketeering activity under Sec. 1962. We find that the plaintiff has failed to carry his pleading burden under Sec. 1964(c). 43 A plaintiff seeking recovery under RICO must allege injury in his business or property caused by violation of the Act. 18 U.S.C.A. Sec. 1964. In Reuter v. Sonotone, 442 U.S. 330, 99 S.Ct. 2326, 60 L.Ed.2d 931 (1979), the Supreme Court construed identical language from the Clayton Act on which the RICO statute was patterned. The Court concluded that Congress intended the phrase business or property to exclude personal injuries. Id. at 339, 99 S.Ct. at 2331. 44 The named plaintiff has alleged only injury in the nature of mental distress, not an injury in his business or property. Therefore he has no cause of action on a RICO claim nor could he meet the requirement of Fed.R.Civ.P. 23 that his claim be typical of that which he seeks to assert on behalf of the putative class. It is well settled that to be a class representative on a particular claim, the plaintiff must himself have a cause of action on that claim. See, e.g., Haas v. Pittsburgh National Bank, 526 F.2d 1083 (3d Cir.1975); Bailey v. Patterson, 369 U.S. 31, 32-33, 82 S.Ct. 549, 550-51, 7 L.Ed.2d 512 (1962). 45 The plaintiff insisted at oral argument that, had the class been certified, class members who had paid money might have been located and persuaded to come forward as representatives. The plaintiff argues that the district court erred in dismissing the motion for certification as mooted by dismissal of the complaint instead of considering the merits of class certification. 46 Decisions regarding certification of a class are within the sound discretion of the district court, Eisenberg v. Gagnon, 766 F.2d 770, 784 (3d Cir.1985), and we find no abuse of discretion here. 47 The claims of the representative party must be typical of the claims of the class. Fed.R.Civ.P. 23(a). Adequacy of representation must be established before an action may proceed on behalf of a class. Id. Therefore we find no abuse of discretion in the district court's refusal to consider certification of a class before determining whether the named plaintiff, and a fortiori any putative class which the named plaintiff might properly seek to represent, had a federal cause of action. 48 No named plaintiff claims to have paid money to the defendants as a result of the allegedly extortionate letter. Accordingly we will affirm the district court's dismissal of that claim.