Opinion ID: 195809
Heading Depth: 2
Heading Rank: 2

Heading: Appellants' Preclusion Argument Based on the

Text: Relationship of Count VII to Other Counts The appellants challenge the district court's denial of their motion for judgment as a matter of law on Count VIII, the RICO substantive charge alleging Aetna as the enterprise, and Count IX, the RICO conspiracy charge. They contend that once the district court granted defendants' motion for judgment as a matter of law on Count VII (the RICO substantive violation alleging an association-in-fact enterprise including all defendants), the district court should have granted, also, defendants' motion for judgment as a matter of law on Counts VIII and IX. (This argument was not made in the trial court as to defendants' motion for judgment as a matter of law on Count VI, nor is it asserted on appeal. Count VI, alleging Arsenal Auto as the enterprise, alleges a scheme of a smaller scope than that alleged in Count VII. Thus, no plausible argument can be made that the court's dismissal of Count VII requires the dismissal of Count VI.) -17- Appellants do not clearly state the legal premises of their preclusion argument. Reading generously to appellants, however, to assure that we address any contention that might even plausibly be presented, we infer that some asserted principle of preclusion is at least implicitly if not explicitly suggested. For example, appellants say: The trial judge's ruling directing a verdict for all Defendants on Count VII of the Complaint, because there was insufficient evidence to sustain Count 7, an overall association-in-fact enterprise, (App. 4092), separated the Arsenal Defendants from the other Defendants in the case and thereby disassociated [sic] the actions of the Allston Group from the acts of the Arsenal Defendants. Without the association-in-fact enterprise to meld the acts of the various Defendants into an overall conspiracy, the link between the Arsenal Defendants and the Allston Group was severed thereby absolving the Arsenal Defendants from any wrongdoing concerning bribery. As such, the trial judge's ruling, by implication, absolved the Arsenal Defendants from bearing the burden of the Allston Group's bribery. Appellants' Brief at 41-42. It is true that each of Counts VII, VIII, and IX alleges a fraudulent scheme that includes all the body shops. These three theories have the same scope in the sense that each of them would support the judgment against the Arsenal individual defendants in the amount of $2,369,901.72. Nevertheless, each count asserts a distinctive theory, and none of the three theories has all of the elements of any other of the three. Counts VII and VIII allege RICO substantive violations under -18- 1962(c), but the entities alleged as the enterprise are different. In contrast to these substantive violations, Count IX alleges a RICO conspiracy under 1962(d). Since each of the three counts requires different elements of proof, the appellants are incorrect when they say that the dismissal of one of these counts, namely Count VII, requires the dismissal of one or both of the other two counts. Although the appellants' argument fails as a matter of law, we proceed to consider the possibility of some other implicit premise that may have led to such a patently incorrect statement of law. One premise that may be inferred from appellants' argument is that in order to prove Count VIII, the RICO substantive violation with Aetna as the enterprise, the plaintiff had to prove the same relationships between the defendants that were essential to the association-in-fact enterprise alleged in Count VII. This assumption is incorrect. Section 1961 defines an enterprise for the purposes of RICO to include any individual, partnership, corporation . . . or other legal entity, and any union or group of individuals associated-in-fact although not a legal entity. 18 U.S.C. 1961(4). Thus to satisfy the enterprise element of a RICO substantive violation, a plaintiff may prove either the existence of a legal entity, such as a corporation, or that a group of individuals were associated-in-fact. Since Aetna is a corporation, Aetna can constitute an enterprise for the purpose -19- of Count VIII, even if there is no proof of an association-infact enterprise. In contrast, Count VII requires proof of an association-in-fact enterprise. An association-in-fact enterprise is an ongoing organization, with members function[ing] as a continuing unit, which is separate and apart from the pattern of racketeering in which it engages. United States v. Turkette, 452 U.S. 576, 583 (1981). Since no party has challenged the district court's grant of the defendants' motion for judgment as a matter of law on Count VII, we need not determine the precise elements required for a plaintiff to prove an association-in-fact enterprise. Nevertheless, it is clear that an association-in-fact enterprise is different from an enterprise that is a legal entity, like Aetna. Since different proof is required to establish these different kinds of an enterprise, the court's determination as a matter of law in favor of the defendants on Count VII is consistent with the court's determination that fact issues remained for the jury to decide with respect to Count VIII. Another possible premise, which is not explicitly articulated or acknowledged by the appellants, is that in order to prove a RICO conspiracy of the scope alleged in Count IX, the plaintiff was required to prove the existence of an associationin-fact enterprise of that same scope. This premise is not valid. Section 1962(d) does not require proof of an association-in-fact enterprise. Any -20- enterprise meeting the definition of enterprise in 1961 will do. Under 1961 an enterprise may include a legitimate legal entity like Aetna as the victim of the racketeering activity. This court has previously upheld convictions under both 1962(c) and 1962(d), that alleged a victim enterprise like Aetna. See United States v. Boylan, 898 F.2d 230 (1st Cir.), cert. denied, 498 U.S. 849 (1990) (victim enterprise was the Boston Police Department). Therefore, in order to satisfy the enterprise element of a RICO conspiracy of the scope alleged in Count IX, the plaintiff needed only to prove some kind of enterprise of that scope, not necessarily an association-in-fact enterprise. In the case at hand, proving a RICO conspiracy with Aetna as the enterprise was sufficient. For these reasons, the trial judge's ruling as a matter of law for defendants on Count VII, based on the conclusion that there was not enough evidence to go to the jury on the theory of an association-in-fact enterprise, is entirely consistent with the jury findings of a 1962(c) substantive violation (with Aetna as the victim enterprise) and of a 1962(d) conspiracy (with Aetna as the victim enterprise).