Opinion ID: 483247
Heading Depth: 2
Heading Rank: 2

Heading: The Interrogatory Answers

Text: 143 RICO Sec. 1962(c), to the extent applicable to plaintiffs' claims in the present action, makes it unlawful for any person ... 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.... Plaintiffs' complaint asserted that the RICO enterprises at issue were the Nassau County Republican Party and its affiliates. 144 With respect to the RICO claims, the jury was given four interrogatories (numbered 7-10), each with a number of parts. In response to interrogatories 7 and 8, the jury found that nine named public officials, acting within the scope of their employment, had committed a total of 13 Hobbs Act violations as RICO predicate acts, when they knowingly and willfully through fear of opportunity for enhanced employment benefits induced or attempted to induce eleven named public employees to make political contributions. 145 Interrogatory 9 had four parts, each part having four subparts. The initial question of each part concerned a possible enterprise made up of three of the four defendants. Thus, the jury was asked whether any of the following defendant trios constituted a RICO enterprise: 146 9(a)(i): Town k County k Town Committee 9(b)(i): Town k County k County Committee 9(c)(i): Town k Town Committee k County Committee 9(d)(i): County k Town Committee k County Committee 147 Of these groupings, the jury answered only 9(c)(i) in the affirmative, thus finding that only the Town, the Town Committee, and the County Committee had formed an enterprise. In the third question of each part of interrogatory 9, the jury was asked if the defendant not included in the trio shown in part (i) was an entity which knowingly and willfully engaged in a pattern of illegal activity. In response to these questions (numbered (iii)) the jury found that the County was not such an entity but that each of the other three defendants was. Finally, in connection with each of the trios listed above, the jury was asked whether the defendant not included in the trio was an entity associated with the enterprise which, through a pattern of illegal activity knowingly and willfully conducted or participated directly or indirectly in the conduct of the enterprise's affairs? The jury answered all four of these questions (numbered (iv)) in the negative. 148 Thus, the jury found no wrongdoing on the part of the County. It found that only one of the possible RICO enterprises about which it was asked had existed, i.e., that composed of the Town, the Town Committee, and the County Committee; and it found that each of the three members of that RICO enterprise was an entity that had knowingly and willfully engaged in a pattern of illegal activity. But it found that none of those three was an entity associated with the enterprise which, through a pattern of illegal activity knowingly and willfully conducted or participated directly or indirectly in the conduct of the enterprise's affairs. 149 Finally, in response to interrogatory 10, the jury found that the combination of all four defendants was not a RICO enterprise. The jury was not asked whether any of the three defendants other than the County had participated in the conduct of the affairs of an enterprise that did not include the County. 150 In its Posttrial Decision, the district court dismissed the RICO claims against all defendants, finding that the jury had concluded that plaintiffs failed to establish that any one of these defendants was an entity associated with an enterprise which, through a pattern of illegal activity, participated in the conduct of the enterprise's affairs. Posttrial Decision at 12-13. Stating that [p]rior to the return of the verdict plaintiffs had consistently maintained that the offender was each defendant, and that, as to each, the enterprise consisted of the combination of the other three defendants, and that [t]he case was tried on that theory, id. at 15, the court concluded that the questions submitted to the jury, to which plaintiffs had agreed, included all of the enterprise combinations posited by the plaintiffs. Id. at 14-15. Thus, the court declined either to permit what it viewed as an amendment of plaintiffs' theory of liability at this late date, id. at 16, or to decide that any defendant had participated in the conduct of a RICO enterprise as a matter of law, id. at 15. We conclude that the court's decision to dismiss the RICO claims on the basis of the jury's interrogatory answers was factually, doctrinally, and procedurally flawed. 151 As a factual matter, we disagree with the court's view that plaintiffs had eschewed pursuit of all RICO claims save those asserting that one defendant had participated in an enterprise comprising precisely the other three. The complaint made the broad allegation that the RICO enterprises were the Nassau County Republican Party and its affiliates. Construed liberally, as is required by Fed.R.Civ.P. 8, this allegation cannot be deemed either limited to enterprises that included the County or limited to enterprise participation only by a person that was not a member of the enterprise. Further, while plaintiffs plainly did consent to the form of interrogatory 9, they also hypothesized other formations that could meet the requirements of Sec. 1962(c) and stated that for the sake of clarity they did not object to the questions as posed in interrogatory 9. Thus, to the extent that the proof at trial would have supported a conclusion that the Town, or the Town Committee, or the County Committee--each of which was found to have been part of a RICO enterprise and to have willfully and knowingly engaged in a pattern of illegal activity--had thereby participated in the affairs of the enterprise, the district court should not have concluded that such proof went beyond the scope of the pleadings. 152 Further, we note that the trial court's instructions to the jury were broader than the interrogatories posed, for the instructions explicitly did not limit the jury to finding a RICO enterprise that consisted only of a combination of three or all of the four defendants. Rather, in both its oral and written charge, the court stated that the jury could find that any combination of the defendants, any ... two or more of the defendants, could constitute a RICO enterprise. Thus, the written charge stated in part as follows: 153 Any combination of two or more of the defendants charged may constitute an enterprise. If you find two or more of the defendants combining for the purpose of soliciting contributions from public employees in violation of their First Amendment rights, then you may find such combination an enterprise. 154 Finally, we think it significant that interrogatory 10 submitted to the jury asked whether all four of the defendants constituted an enterprise, yet the jury was not asked whether any particular defendant was associated with that enterprise or participated in its activities. The omission of such follow-up questions seems to imply that if all four defendants constituted a RICO enterprise, a fortiori each would be found to have been associated with it and participated in its activities. 155 Nor was there any doctrinal impediment to a verdict in plaintiffs' favor based on a finding that one of the defendants had participated in the affairs of an enterprise of which it was a part. While we have held that a solitary entity cannot, as a matter of law, simultaneously constitute both the RICO person whose conduct is prohibited and the entire RICO enterprise whose affairs are impacted by the RICO person, see Bennett v. United States Trust Co., 770 F.2d 308, 315 (2d Cir.1985), cert. denied, --- U.S. ----, 106 S.Ct. 800, 88 L.Ed.2d 776 (1986), we see no reason why a single entity could not be both the RICO person and one of a number of members of the RICO enterprise. The definitions of both terms are intentionally broad. See, e.g., H.R.Rep. No. 1549, 91st Cong., 2d Sess. 56 (1970), reprinted in 1970 USCCAN 4007, 4032. The term  'person' includes any individual or entity capable of holding a legal or beneficial interest in property, 18 U.S.C. Sec. 1961(3); and  'enterprise' includes 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. Sec. 1961(4). In consequence, infiltration of any associative group by any individual or group capable of holding a property interest can be reached. H.R.Rep. No. 1549, at 56, reprinted in 1970 USCCAN at 4032. Indeed, the very terms of Sec. 1962(c) appear to envision that the same entity may be both the RICO person and a member of the enterprise, for the section speaks of a person ... associated with any enterprise. Thus, though we rejected in Bennett the notion that an entity may be deemed associated with only itself, there is neither a conceptual nor a doctrinal difficulty in positing an entity associated with a group of which it is but a part. 156 We conclude, therefore, that there was no sound basis for not asking the jury whether, as to an enterprise consisting of Town + Town Committee + County Committee, any of these three defendants was an entity that, through a pattern of unlawful activity, knowingly participated in the affairs of that enterprise. And had the court posed such a question, the trial record seems to suggest that the jury would have answered that question in the affirmative. We base this surmise in part on the fact that the jury consistently exonerated the County and consistently found wrongdoing by the Town and the defendant Committees, and in part on a question sent to the court by the jury during its deliberations. In considering interrogatory 9, and in particular the subparts numbered (iv), the jury sent the court a note asking 157 Does the enterprise referred to in subparagraph (iv) always refer to the enterprises described in (i) and (ii) [ (ii) was a question as to the subpart (i) trio's relationship to interstate commerce] or are they independent questions? 158 The court in effect answered that enterprise in the subparts numbered (iv) was the enterprise referred to in the corresponding subparts (i) and (ii). Because the interrogatories, as thus interpreted, asked about a given defendant's participation only in the affairs of an enterprise comprising the other three defendants, the jury was not allowed to find that the Town or either of the defendant Committees participated in the affairs of an enterprise without also finding that the County was part of an enterprise. Given this constrictive answer to the jury's question, the court's conclusion in the Posttrial Decision that the jury found that the plaintiffs had failed to establish that any defendant was an entity associated with an enterprise (emphasis added) was plainly overbroad. In fact, had the jury been instructed that the Town or the Committees could be found to have participated in the affairs of an enterprise of which it was a member and the County was not a member, the jury's note and its pattern of interrogatory answers strongly suggest that it would have found that participation. 159 Since the jury was not allowed to answer that question, however, the court itself should have answered it. Fed.R.Civ P. 49(a) provides, in pertinent part, as follows: 160 If in [submitting questions to the jury] the court omits any issue of fact raised by the pleadings or by the evidence, each party waives his right to a trial by jury of the issue so omitted unless before the jury retires he demands its submission to the jury. As to an issue omitted without such demand the court may make a finding; or, if it fails to do so, it shall be deemed to have made a finding in accord with the judgment on the special verdict. 161 In making the finding required by Rule 49(a) the court is theoretically free to make a finding favoring the defendant, see Cote v. Estate of Butler, 518 F.2d 157, 160 (2d Cir.1975), or favoring the plaintiff, even on an essential element of plaintiff's claim, see, e.g., Graphic Products Distributors, Inc. v. Itek Corp., 717 F.2d 1560, 1569 (11th Cir.1983) (relevant markets in antitrust case); J.C. Motor Lines, Inc. v. Trailways Bus System, Inc., 689 F.2d 599, 602 (5th Cir.1982) (individual defendant's negligence); Langenderfer v. Midrex Corp., 660 F.2d 523, 526 (4th Cir.1981) (intent in equitable estoppel case); Hyde v. Land-of-Sky Regional Council, 572 F.2d 988, 991 (4th Cir.1978) (authority of agent or ratification in contract case); Brenham v. Southern Pacific Co., 328 F.Supp. 119, 123 (W.D.La.1971) (proximate cause in negligence action), aff'd, 469 F.2d 1095 (5th Cir.), cert. denied, 409 U.S. 1061, 93 S.Ct. 560, 34 L.Ed.2d 513 (1972). 162 In their posttrial motion, plaintiffs here asked the court to enter judgment in their favor on the RICO claims on the basis that the jury's various findings against the three defendants other than the County compelled the inference that each of the three had, in violation of 18 U.S.C. Sec. 1962(c), been associated with an enterprise and participated in the conduct of its affairs through a pattern of racketeering activity. In its Posttrial Decision the court declined to make a finding that the Town or either Committee had participated in the affairs of a RICO enterprise as a matter of law. 163 Rule 49(a), however, required the court only to make a finding on this issue as a matter of fact. The ultimate question after trial is whether or not the plaintiff has proved its claim. If the interrogatories given to the jury do not include a factual question needed for a complete answer to the ultimate question, the consequence under Rule 49(a) is not that the plaintiff's case is to be dismissed but simply that the right to have that fact issue determined by the jury is waived and any gap is to be filled by the court. Proper application of Rule 49(a) is particularly important in a complex case such as this where there are a large number of asserted permutations, any of which could be credited by the jury. We can appreciate the difficult task confronting the trial judge who wishes to pare down the number of possibilities in order to avoid confronting the jury with a package that is neither manageable nor understandable. But it must be recognized that the availability of special interrogatories is not designed to be a trap for counsel who, failing to anticipate the precise distinctions the jury may make between parties or the judgments it may make as to the credibility of various witnesses, thereby fail to insist on the presentation of interrogatories as to details that later prove crucial. 164 Finally, we note that Rule 49(a) states that when the trial court has failed to make a finding as to an omitted issue, the court shall be deemed to have made a finding in accord with the judgment on the special verdict. Construing this provision in a manner designed to secure the just ... determination of [the] action, Fed.R.Civ.P. 1, we think it inappropriate to deem the court to have made a finding on the issue in question here, since the court believed plaintiffs were asking only for a ruling as a matter of law and expressly disavowed making a finding. See Wood v. Old Security Life Ins. Co., 643 F.2d 1209, 1215-16 (5th Cir.1981). 165 Accordingly, we vacate the judgment dismissing plaintiffs' RICO claims against the Town, the Town Committee, and the County Committee, and remand to the district court for factual findings as to (1) whether plaintiffs proved, by a preponderance of the evidence, see Sedima, S.P.R.L. v. Imrex Co., 105 S.Ct. at 3282-83 (stating obiter that there is no indication that Congress intended to depart from the preponderance standard in civil RICO cases); Armco Industrial Credit Corp. v. SLT Warehouse Co., 782 F.2d 475, 481 (5th Cir.1986), United States v. Local 560 of the International Brotherhood of Teamsters, 780 F.2d 267, 279-80 n. 12 (3d Cir.1985), cert. denied, --- U.S. ----, 106 S.Ct. 2247, 90 L.Ed.2d 693 (1986), that the Town, or the Town Committee, or the County Committee participated, through the illegal racketeering activity found by the jury in the affairs of the RICO enterprise found by the jury, or (2) whether plaintiffs' trial evidence established any other civil RICO claim. 166 For the reasons stated in part V.A. above, RICO claims relating to the conduct of the Town, the Town Committee, and the County Committee prior to 1973 remain to be tried. 167