Court Opinion

ID: 8966958
Source: CourtListenerOpinion
Date Created: 2022-11-27 10:10:08.887434+00
Date Added: 2024-06-11T17:10:20.568083
License: Public Domain

OAKES, Circuit Judge
(dissenting) (with whom Judges LUMBARD and FEINBERG join):
I welcome the clarification of Second Circuit RICO law provided by today’s two *1394opinions: “Continuity” and relatedness” are aspects of a “pattern of racketeering activity,” and not of the “enterprise.” However, I must still dissent in this case, for the actions alleged here constitute a single scheme that is discrete and finite. There is no continuity, or the threat of continuity; hence, there is no pattern of racketeering activity.
I continue to agree with the district court that since “[a]ll alleged misrepresentations appear in one document, the offering plan for condominium conversion,” 650 F.Supp. at 551, there can be no “pattern.” It does not matter how many people received that document or how many amendments were mailed without remedying the original fraud. The alleged scheme has a discrete, finite nature even though it involved a very large condominium conversion lasting over a long period of time.
Two additional factors distinguish this case from United States v. Indelicato. •The first is that the enterprises here, the sponsoring partnership and the individuals associating to sell the apartments, are not illegitimate enterprises such as the enterprise there, the Commission of La Cosa Nostra. This does not exempt the enterprises here from RICO liability, Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 499, 105 S.Ct. 3275, 3286, 87 L.Ed.2d 346 (1985), but it does affect the manner of proving the pattern of racketeering activity. In Indelicato, evidence concerning the nature of the enterprise also proved the existence of a pattern by showing relatedness and continuity. See Indelicato at 1385 (Oakes, J., concurring). Here, however, that sort of evidence is unavailable.
The second factor distinguishing this case from Indelicato is the predicate acts involved — here alleged mail frauds, there murders to achieve Commission goals. As pointed out by Judge Cudahy:
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 (here, the mailings) 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.
Lipin Enters Inc. v. Lee, 803 F.2d 322, 325 (7th Cir.1986) (concurring opinion); see also United States v. Horak, 833 F.2d 1235, 1240 (7th Cir.1987) (recognizing same). In this case, the mailing of copies of a single document to many people, followed by amendments that did not correct the alleged misstatements, may yield many counts of mail fraud, but it does not suffice to show continuity.
To me, today’s ruling pushes civil RICO to its logical extreme, a regrettable development. Any real estate conversion involving the mailing of an offering plan with one misrepresentation to apartment house tenants, coupled with the mailing of an amendment to the plan that fails to remedy the fraud, is now subject to civil RICO charges. This decision invites plaintiffs into federal court and arms them with a civil RICO that, for all practical purposes, is unlimited. In many cases, reliance on tort or contract law, or any resort to the state courts, will become unnecessary. The majority has declined to accept the Supreme Court’s invitation to “develop a meaningful concept of ‘pattern,’” Sedima, 473 U.S. at 500, 105 S.Ct. at 3287, and would instead, in its own words, “open the door to far more civil RICO cases than have heretofore survived our scrutiny.” (Majority opinion at 1393.) Accordingly, I dissent.