Document: 492 U.S. 229 109 S.Ct. 2893 106 L.Ed.2d 195 H.J. INC., et al., etc., Petitionersv.NORTHWESTERN BELL TELEPHONE COMPANY al. No. 87-1252. Argued Nov. 8, 1988. Decided June 26, 1989. Syllabus The Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. §§ 1961-1968, which is Title IX of the Organized Crime Control 1970 (OCCA), imposes criminal civil liability upon persons who engage in certain "prohibited activities," each defined to include, as a necessary element, proof "pattern racketeering activity," § 1962. "Racketeering activity" means "any act or threat involving" specified state-law crimes, any "act" indictable under federal statutes, "offenses." 1961(1). A "pattern" requires "at least two acts within 10-year period. 1961(5). Petitioners, customers respondent Northwestern Bell, filed action District Court against Bell d other respondents, including members Minnesota Public Utilities Commission (MPUC)—which responsible for determining Bell's rates—seeking an injunction treble damages. They raised four separate claims 1962(a), (b), (c), (d), based on factual allegations that between 1980 1986, made various cash in-kind payments MPUC members, thereby influenced them approve rates company excess fair reasonable amount. dismissed complaint, Federal Rule Civil Procedure 12(b)(6), failure state claim relief could be granted, ground fraudulent alleged was "committed furtherance single scheme influence commissioners" rather than multiple illegal schemes. Appeals affirmed, confirming its precedent, insufficient establish pattern activity. Held: 1. In order prove activity, plaintiff prosecutor must show at predicates are related amount to, threaten likelihood of, continued Proof neither relationship nor continuity showing were committed Pp. 236-249. (a) Section 1961(5) states period RICO pattern, but implies may not sufficient. thus assumes there something beyond merely number involved. normal usage, word would also taken require simply multiplicity predicates, arranged ordered by reason they bear some external organizing principle. text fails identify forms principles used determine whether fall into pattern. RICO's legislative history, however, establishes Congress intended both "relationship" "continuity"—that related, either constitute long-term 237-239. (b) Relationship distinct requirements, though their will often overlap. notion no more constrained X OCCA, "criminal conduct if it embraces have same similar purposes, results, participants, victims, methods commission, otherwise interrelated distinguishing characteristics isolated events." 3575(e). Continuity activity likewise demonstrated variety ways. centrally temporal concept, closed- open-ended. party alleging violation demonstrate over closed proving series extending substantial time. Otherwise, shown activity—for example, because themselves involve such activity; part regular way doing business ongoing entity association legitimate business; conducting participating enterprise. Although schemes relevant this inquiry continuity, only continuity. Adopting Appeals' test bring rigidity present idea "continuity" itself, introduce concept—the "scheme"—that does appear language history. 239-243. (c) Neither history supports rule defendant's activities form characteristic organized crime. No restriction appears text. Nor suggesting scope should limited individual acting alone. Moreover, Congress' approach can contrasted with decision enact explicit limitations crime statutes. E.g., Omnibus Safe Streets 1968, 601(b). argument broad read restrictively congruous purpose eradicate rejected: shows had mind. 243-249. 2. erred affirming Court's dismissal petitioners' complaint allege facts sufficient activity." Consistent petitioners able satisfy requirements hence element. 249-250. 829 F.2d 648, reversed remanded. BRENNAN, J., delivered opinion Court, WHITE, MARSHALL, BLACKMUN, STEVENS, JJ., joined. SCALIA, concurring judgment, REHNQUIST, C.J., O'CONNOR KENNEDY, joined, post, p. 251. Mark Reinhardt, St. Paul, Minn., petitioners. John D. French, Minneapolis, respondents. Justice BRENNAN Court. 1 (RICO Act), Pub.L. 91-452, IX, 84 Stat. 941, amended, 1961-1968 (1982 ed. Supp. V), those activities." Each prohibited 1962 one "a "collection unlawful debt." mean "offenses," 1961(1) ed., V); term statute says "requires period, We called case consider what meets requirement. 2 * renders criminally civilly liable person" uses invests income derived "from acquire interest operate enterprise engaged interstate commerce, 1962(a); acquires maintains control "through 1962(b); who, being employed associated enterprise, conducts participates affairs 1962(c); or, finally, conspires violate first three subsections 1962, 1962(d). provides drastic remedies: conviction carries severe penalties forfeiture proceeds, 1963 person found private violated damages, costs, attorney's fees, 1964(c). 3 Telephone Co., putative class 1986 Minnesota. Petitioners violations (d) oth r respondents—some telephone company's officers employees, (MPUC), unnamed individuals corporations sought damages provisions, 1964(a) (c). 4 body charge. Petitioners' five-count performance duties—and fact caused amount—by making commissioners, negotiating regarding future employment, paying parties meals, tickets sporting events like, airline tickets. Based these allegations, count pendent claim, asserting bribery statute, Minn.Stat. 609.42 (1988), well common law prohibiting bribery. RICO. Count II that, from involving predicate "enterprise." III claimed 1962(b), through respondents acquired MPUC, IV, asserted participated contrary 1962(c). Finally, V conspired together contravening 5 granted respondents' 12(b)(6) motion, dismissing granted. 648 F.Supp. 419 (Minn.1986). court "[e]ach [petitioners] commissioners detriment ratepayers." Id., 425. It held therefore mandated Eighth Circuit's Superior Oil Co. v. Fulmer, 785 252 (1986), interpreted adopting "extremely restrictive" required "multiple schemes." F.Supp., 425.1 Circuit affirmed precedent "[a] effort insufficient" 650 (1987), agreeing scheme, ibid. Two panel suggested concurrences, reconsider (McMillian, J.); id., 651 (J. Gibson, J.). Most Courts rejected interpretation concept allegation schemes,2 we certiorari resolve conflict. 485 958, 108 1219, 99 420 (1988). now reverse. 6 Sedima, S.P.R.L. Imrex 473 479, 105 3275, 87 346 (1985), restrictive 1964(c) condition maintaining defendant already been convicted violation, special injury. so, acknowledged concern quarters use "legitimate" businesses, "mobsters criminals"—a frankly led see 499-500, S.Ct., 3286-3287. But expansive "appear primarily result breadth offenses, particular inclusion wire, mail, securities fraud, courts develop meaningful 'pattern' "—both factors apply applications Act. 500, 3287; 501-502, 3292-3293 (MARSHALL, dissenting). has done nothing interim further illuminate key requirement racketeering; plethora different views expressed since Sedima demonstrates, n. 2, supra, developing existing statutory framework proved easy task. 7 is, nevertheless, task undertake decide case. Our guides endeavor find support sources proposition, espoused Ei hth case, when agree established acts, see, e.g., United States Jennings, 842 159, 163 (CA6 1988), amici argue refers indicative perpetrator involved functional equivalent. our view, natural commonsense element mind, intending stringent envisioning might encompass amounted threatened A. 8 begin, course, text, followed [of] utilizing terms concepts breadth." Russello States, 464 16, 21, 104 296, 299, 78 17 (1983). As remarked U.S., 496, 14, 3285, section headed "definitions," 1961 so much define minimum existence Unlike provisions tell us "mean," phrase occurred after [October 15, 1970,] last ten years (excluding imprisonment) commission prior places outer limit indeed. 9 indicate envisioned circumstances racketeering—otherwise drawn narrower boundary liability, requiring greater predicates. But, time, statement least" "that while necessary, sufficient." 14; 527, 3289 (Powell, concerns pattern; bears out interpretation, principal sponsor Senate bill expressly indicated "proof without more, pattern." 116 Cong.Rec. 18940 (1970) (statement Sen. McClellan). identify, though, additional prerequisites establishing 10 addition 1961(5), "start assumption ordinary meaning words used." Richards 369 1, 9, 82 585, 591, (1962). here just "arrangement things 11 Oxford English Dictionary 357 (2d 1989), mere guarantee arrangement order. principle "order d" "arranged." conspicuously anywhere falls purposes infer, absence textual identification sorts 1962's requirement, combination very relaxed limits fixed take flexible approach, envisaged reference range ordering relationships bounds set. For specific guidance "pattern," look past cases construing See 486-490, 3279-3282 (majority opinion); 510-519, 3297-3302 dissenting); 524-527, 3287-3289 26-29, 302-304; Turkette, 452 576, 586-587, 589-593, 101 2524, 2530-2531, 2531-2534, 69 246 (1981). 12 discussed indeed fairly formed "sporadic S.Rep. 91-617, 158 (1969), cannot "be subjected sanctions title committing widely separated offenses," Cong. Rec., (Sen. Instead, "[t]he itself relationship" ibid., " 'the continuing activity,' quoting 158. "It factor plus combines produce Ibid. (emphasis added). reveals intent pose B 13 analytic constituents stated separately, practice relatedness easier define, provision elsewhere 922, IX. OCCA included Dangerous Special Offender Sentencing Act, 3575 seq. (now partially repealed). provided enhanced sentences where, among things, felony conspiracy conduct. noted X's solely another: "[C]riminal suppose mind component suffice. 14 tells us, alone enough To elves 3575(e) assistance. aspect spawned scheme" adopted lower courts, F.2d, ("In appellants 'had endeavors [it was] activities.' . insufficient"). although certainly highly implausible thought brings available itself; moreover, introducing nowhere Act.3 adopt less inflexible seems derive commonsense, everyday understanding gloss it. What threat, simpliciter. This ways, difficult formulate abstract general can, begin delineate 15 "Continuity" open-ended referring repeated conduct, nature projects repetition. Barticheck Fidelity Union Bank/First National State, 832 36, 39 (CA3 1987). concept—and particularly context, where continuous, another, requirements. ext nding Predicate few weeks months threatening do requirement: concerned Often brought before way. cases, depends demonstrated. 16 Whether Without cover field possibilities preferring deal issue context concrete situations presented decision—we offer examples how satisfied. surely implicit explicit. Suppose hoodlum sell "insurance" neighborhood's storekeepers breakage windows, telling his victims he reappearing month collect "premium" continue "coverage." Though small occur close include repetition indefinitely future, supply requisite offenses entity's business. Thus, sufficiently attributed operating exists purposes. Such associations extend beyond, traditionally grouped "organized crime." satisfied (in sense purposes), "enterprise."4 combine precise proved, advance clarity always apparent exists. development await absent revisit provide clearer Act's scope. Various urge narrowly senses outlined above, traditional sense, organized-crime-type perpetrator, dedicated offenses.5 Like rule, reading limitation whatever merits demerits initial matter, finds odds tenor 19 One evident problem suggestion perpetrator—in sense—is seem work group, supplies grounds believe meant impose second indication explicitly stated. titles did intend new law's application crime, said so. Thus V, authorizing witness protection program, Attorney General security witnesses "in legal proceedings 933, note preceding 3481 (since And VI permitted deposition preserve testimony proceeding, motion certifying "the proceeding believed 3503(a). 601(b), 90-351, 209 (defining crime" organized, disciplined supplying goods services, gambling, prostitution, loan sharking, narcotics, labor racketeering, organizations"). strongly narrow constitutes here. 20 argued, nonetheless, enacting RICO, revealed title, OCCA's preamble, 923 (Congress seeking eradication States"), combat crime; coextensive purpose. accept narrowing construction terms. 21 sure, focused on, debates reports illustrate operation concern, predations mobsters. doubt major target, recognized elsewhere. Russello, 302; 2532. definition conduct" 240, quite capable conceiving dependent tying objective law, 923. create good skepticism about despite capacious used, pick nexus. And, indeed, knew commodious 22 Opponents criticized precisely failed statute's reach See, 215 (Sens. Hart Kennedy complaining "goes activity"). response, sponsors omission accident, reflection breadth. Senator McClellan most plain respect: 23 "The danger posed crime-type society has, occasion examination working system justice. follow proposals stemming crime? 24 "[T]his line analysis seriously defective several regards. Initially, confuses reexamining justice proper lesson reexamination. 25 26 "In addition, objection role court. Out lawmaking function, ought confine judgments them. fulfilling examine instances, whole problems. connection, duty piecemeal legislation. Whatever problem, principled solution entire problem. Comprehensive solutions identified problems translated integrated programs. 27 objection, practical theoretical defects. Even [the bill] needed real degree strictly confined cases. On hand, justified prosecutions maximum possible, preserving ability administer effectiveness enforcement tool." Rec. 18913-18914 (1970). 28 Representative Poff, another legislation, answered critics complained needed: 29 true many parts bill. part, probably impossible definitively I ask my friend, object procedures applicable type defendant?" 35204. 30 35344 (Rep. Poff) ("organized shorthand method large varying group diverse circumstances," concept). 31 thrust explanations reasonably clear. percei ed need cogent reasons chose which, focus, picked fully realized individually anything approaching perfect fit McClellan) ("It draw effective reaches commercial yet commonly outside well"). 32 seems, unlikely "it define." 35204 Poff). stereotypical view consisting circumscribed set activities, gambling prostitution—a preamble—was longer satisfactory expanded enterprises. 590-591, 2532-2533. generous "racketeering acknowledges breakdown conception responds situation wholly drafted broadly wide taking likely attract array perpetrators counterproductive mismeasure congressional 33 stressed rejecting pinched action, perceived non-organized-crime defendants "abuse" "Congress wanted 'legitimate' 'illegitimate' enterprises." 499, 3286. Legitimate businesses "enjoy inherent incapacity immunity consequences"; and, result, 1964(c)'s "against respected allegedly specifically hardly assuming misconstrued." If plaintiffs' defect, said, "inherent written," power correct. poorly statute; rewriting job Congress, inclined, There room "self-consciously overall approach" imposition "amorphous 'racketeering injury' requirement" 495, 498, 3284, decline invitation invent IV 34 turn Because prevailed light favorable w affirm clear consistent allegations." Hishon King & Spalding, 467 69, 73, 2229, 2232, 81 59 (1984). 35 alleges times course 6-year noncommissioner gave five numerous bribes, forms, objective—in successful—of causing unfair unreasonable Bell. defines 1961(1), acts. 36 Under forth purpose, carrying duties win approval unfairly unreasonably high Furthermore, frequency Alternatively, trial bribes business, MPUC. 37 plead judgment reversed, remanded opinion. 38 ordered. whom THE CHIEF JUSTICE, O'CONNOR, KENNEDY join, judgment. Four Terms ago, following clues concerning enigmatic V). First, 14. Second, pointed "two more" Third, quoted snippet stating "[i]t directed courts' attention 3575(e), criminal" instructed "[t]his useful interpreting sections Act," 3285. enlightened, "to 'pattern,' "id., 3287, promptly produced widest persistent split recent memory, ante, 235, Today, countless millions fees later (not mention prison RICO), little repromulgate hints means, caveat applied using "flexible approach." Ante, 238. 40 Elevating level counsels courts: 'continuity relationship.' 239 deleted). me helpful "life fountain." Of talismanic phrase, "easier define," definition, toto: '[C]riminal events,' 240. feel solidly rooted direct quotation Unfortunately, (and sensible) rules followed, 3575(e)—which contained rendered RICO—suggests assuredly that. "[W]here includes omits generally presumed intentionally purposely disparate exclusion." 23, 300, really utterly uninformative anyway. closes target know "relatedness" "purposes, [just vague enough] otherwise." Is women enough? Or enriching defendant? coparticipants coemployees? instructions "pattern"—which says. 41 precisely. "Continuity," says, "is repetition." 241. "closed means. Virtually all suits, relate periods "closed" (unless expects crimes did, still them), "repeated," multiple-act thought, initially, distinction between, (multiple acts) "closed-ended" totality, "scheme" "episode"—which unless (for described 242-243) well—and, schemes—which invoke rejects exclusive touchstone applications, "introduc[es] 241, "amorphous" exist eye beholder," 3. extending, "substantial time," "few 242. Since "schemes" "episodes" criterion "threatening conduct," think saying knows more?) free, far concerned. period" sort safe harbor too long, matter involved, long "establish gang hoodlums commits extortion Monday New York, Chicago Tuesday, third San Francisco Wednesday, week, then finally completely disbands, reached am sure intends, imagine else murky discussion possibly mean. 42 operates direction letting obvious racketeers get makes hitherto dubious category included, nonexclusive nonexistent. discern, substantive contribution guidance—and potential covered "threat continuity." gives list presumably polar extremely purposes," 243, business," vaguer still. 43 critical effort, unable significantly application. prologue describes relatively focus crime," Statement Findings Purpose, 1970, 922-923, import describing needful (If unnecessary, attached me. suggested, Today's added improve guidance, created kaleidoscope positions, except clarify increases removes vagueness. unified past, content law. 44 That bad respect intolerable true, MARSHALL commented "quite revolutionize[d] litigation" "validate[d] federalization areas frauds," 501, 3292 (dissenting opinion), predictability important; well, must, even possess certainty laws, FCC American Broadcasting 347 284, 74 593, 600-601, 98 L.Ed. 699 (1954). constitutional challenge us. highest land today's meager bodes ill day presented. 45 However unhelpful be, correct proposition constituting (or episode) never cause rested concur reversing below. conclusively determined excessive reasonable, "filed rate" doctrine independent complaint. 428-429. issue, address express Dist ict "allege 'enterprise' 'person' identified," 1962(a). 428. Roeder Alpha Industries, Inc., 814 22, 30-31 (CA1 1987) (rejecting requirement; occurrence); Indelicato, 865 1370, 1381-1384 (CA2 1989) (en banc) sufficient); 39-40 case-by-case multifactor test); International Data Bank, Ltd. Zepkin, 812 149, 154-155 (CA4 mechanical test; insufficient, continuous escape penalties); R.A.G.S. Couture, Inc. Hyatt, 774 1350, 1355 (CA5 1985) (two 1988) potentially enough); Morgan Bank Waukegan, 804 970, 975-976 (CA7 1986) (refusing rule; test, "separate transactions"); Sun Savings Loan Assn. Dierdorff, 825 187, 193 (CA9 events); Torwest DBC, Dick, 810 925, 928-929 (CA10 (holding inferred insufficient); America Trust Touche Ross 782 966, 971 (CA11 Yellow Bus Lines, Drivers, Chauffeurs Helpers Local 639, 268 U.S.App.D.C. 103, 110, 839 782, 789 (1988) (requiring events). identifying advantage lessening uncertainty component, 'scheme' self-defining term." 39. beholder, generality viewed. attempted subvert public utility voting obtain rate, votes ratemaking decision. Similarly, interference spanning decisions advantageous objective, equally plausibly regarded own "scheme." obviously "correct" litigation. generalizability, elastic. definitional arise inevitably lead scope—whatever adopted—we prefer confront directly, "by perhaps amorphous analysis" basis Insofar concurrence suggest, 253-254, short carry "obvious racketeer[ing]" penalties, apply, concluded mistaken, Brief Washington Legal Foundation Amicus Curiae 11, 15-16; Federation Labor Industrial 17. Briefs Association Manufacturers, Institute Certified Accountants, Amici Curiae. Lower scope, concepts, 741 482, 492, 1984) (citing cases), rev'd, 3292, (1985); Moss Stanley 719 5, 1983) ("The premise connection crime"), cert. denied sub nom. Newman, 465 1025, 1280, 79 684 (1984); Schacht Brown, 711 1343, 1353-1356 1983).

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