Opposition Brief — Delta Truck & Tractor, Inc. v. J. I. Case Co.

", Supreme Court, US.

DY * FILED

No. 88-1206 FEB 23 8

In The

Supreme Court of the United States

October Term, 1988

fa’

Vv

DELTA TRUCK & TRACTOR, INC.,

Petitioner,

Versus

J. I. CASE COMPANY, TENNECO INC., and NAVI-

STAR INTERNATIONAL TRANSPORTATION COR-

PORATION (Formerly International Harvester Com-

pany),

Respondents.

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On Petition for Writ of Certiorari to the United States

Court of Appeals for the Fifth Circuit

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RESPONDENTS’ BRIEF IN OPPOSITION

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MILES P. CLEMENTS MAURICE J. McSWEENEY

LEMLE, KELLEHER, KOHLMEYER, MICHAEL FISCHER*

DENNE®Y, HUNLEY, MOSS & MICHAEL G. McCARTY

FRILC:Y :

601 Poydras Street FOLEY & LARDNER

21st Floor 777 East Wisconsin Avenue

New Orleans, Louisiana 70130- Milwaukee, Wisconsin 53202

yf (414) 271-2400

(504) 586-1241

*Counsel of Record

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964

or call collect (402) 342-: 2831

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QUESTION PRESENTED

Whether a plaintiff asserting a claim arising under

the Racketeer Influenced and Corrupt Organizations Act,

18 U.S.C. §§ 1961-1968 (“RICO”) must allege the existence

of a RICO enterprise which is separate and apart from

the alleged pattern of racketeering activity, as required

by United States v. Turkette, 452 U.S. 576 (1981).

PARTIES

The caption of the case in this Court contains the

names of all parties. (Supreme Court Rule 21.1(b)).

ii

TABLE OF CONTENTS

Page

QUESTION PRESENTED i |

PARTIES i

TABLE OF AUTHORITIES iii

COUNTER-STATEMENT OF THE CASE ...W. 1

A. STATEMENT OF FACTS 1

B. THE DECISIONS BELOW 4

C. REASONS FOR DENYING THE WRIT .....W.. 6

1. The courts below merely applied well-estab- |

lished precedent 220. 6

bo

Denial of the Petition need not be deferred

pending resolution of the “pattern” cases

presently before the Court .......

RE RE ick eeuauanuen

iil

TABLE OF AUTHORITIES

Page

CasEs:

Conley v. Gibson, 355 U.S. 41 (1957) 7

R.A.G.S. Couture, Inc. v. Hyatt, 774 F.2d 1350

(5th Cir. 1985) 5

United States v. Turkette, 452 U.S. 576 (1981)... 4,5, 6,7

STATUTES:

Racketeer Influenced and Corrupt Organizations

Act, 18 U.S.C. 1961-1968 7

—

COUNTER-STATEMENT OF THE CASE

A. STATEMENT OF FACTS.

Respondent J. I. Case Company (‘‘Case’’), is a

wholly-owned subsidiary of Respondent Tenneco Ince.

(‘‘Tenneco’’). Respondent Navistar International Trans-

portation Corporation was, until recently, known as the

International Harvester Company (‘‘International Har-

vester”). In November of 1984, Case and Tenneco agreed

to acquire certain of the assets of International Har-

vester’s farm equipment business. Prior to the sale,

both Case and International Harvester were manufac-

turers of farm implements and agricultural equipment,

each marketing their competing lines through a network

of independent Case or International Harvester dealers.’

Petitioner Delta Truck and Tractor, Ine. was an Interna-

tional Harvester dealer.

As a result of the crisis in the farm economy which

began during the 1981 recession, the businesses of virtually

every manufacturer of agricultural equipment suffered

serious and substantial misfortunes during the early 1980s.

International Harvester, in particular, suffered ruinous

losses during this period, and in 1984, it decided to with-

draw from the agricultural equipment business altogether.

Early in 1985, it completed the sale of certain of its assets

to Case and Tenneco. After the acquisition, Case began

to manufacture and sell a new and broader line of agri-

cultural equipment under the trade names ‘‘Case-IH’’ or

1Case also sold equipment directly through company-owned

stores. Most Case dealers carried other lines of equipment;

International Harvester dealers generally carried only Interna-

tional Harvester products.

‘¢Case-International.’’ International Harvester was no

longer in the farm equipment business.

Jase determined that it would offer Case-Interna-

tional dealership agreements to many of its existing deal-

ers and to many existing International Harvester dealers.

In making this determination, however, Case identified

more than 400 areas around the country where a Case

dealer and an International Harvester dealer were in such

close proximity that it would be virtually impossible for

both of them to become successful Case-International deal-

ers. In these ‘‘conflict’’ areas, Case elected to extend a

new Case-International dealership agreement to only one

of the two dealers. Every effort was made to select the

dealer who would be the most effective and successful

representative of Case in a highly competitive business.

There was no favoritism. Case offered more than 300

International Harvester dealers in conflict areas new

‘‘Case-International’’ dealership agreements; the Case

dealers in those conflict areas were not offered new con-

tracts, and their existing dealership agreements were ter-

minated subject to the notice provisions of their contracts

with Case.

Case determined that Petitioner and Scott Truck and

Tractor, a Case dealer, were in a conflict area. After a

careful evaluation of the situation, it was decided not to

extend a new Case-International dealership agreement to

Petitioner. The Asset Purchase Agreement among Case,

Tenneco and International Harvester did not require Ten-

neco or Case to assume International Harvester’s obliga-

tions to its independent dealers. Thus, Case did not

‘‘terminate’’ the dealership agreements of International

ST

Harvester dealers, such as Petitioner, who were not select-

ed. Case simply declined to offer them a Case-Interna-

tional dealership agreement. Since International Har-

vester was no longer in the farm equipment business,

those former International Harvester dealers who were

not selected no longer had access to International Har-

vester tractors, farm implements or repair parts. Peti-

tioner subsequently became a dealer for Ford and, later,

for Massey Ferguson.

The Asset Purchase Agreement among Tenneco, Case,

and International Harvester required Case to offer Inter-

national Harvester dealers who were not selected an ap-

propriate arrangement for the consolidation, relocation,

purchase or termination of their operations on terms at

least as favorable as they would have been entitled to

receive under their dealership contract with International

Harvester. Case attempted to negotiate appropriate buy-

out arrangements with dealers who were not selected. In

the vast majority of these cases, its efforts to negotiate a

fair and reasonable settlement with exiting dealers were

successful. Although a good faith effort was made to ne-

gotiate such a settlement agreement with Petitioner, no

agreement was reached. This litigation followed. In ad-

dition to the claim that Respondents have engaged in

racketeering activity, Petitioner has charged them with

breach of contract; bad faith; third-party beneficiary

breach of contract; breach of fiduciary duty; breach of

implied covenants; fraud; and a variety of antitrust vio-

lations and unfair trade practices. Those claims remain

pending before the United States District Court for the

Western District of Louisiana.

B. THE DECISIONS BELOW.’

The original complaint was amended twice in an effort

to state a RICO claim. Petitioner’s Eleventh Cause of Ac-

tion, which attempts to set forth its RICO claim, consists of

twenty-three typewritten pages, and contains numerous and

detailed allegations of facts. Respondents moved to dismiss

Petitioner’s RICO claim on the ground that the facts alleged

therein did not properly set forth a claim on which relief

eould be granted. The district court granted Respon-

dents’ motion. Having thoroughly reviewed Petitioner’s

lengthy and detailed RICO allegations, the district court

concluded that the RICO ‘‘enterprise’’ alleged by Peti-

tioner was an ‘‘association-in-fact’’ of Tenneco, Case and

International Harvester, formed for the limited purpose

of accomplishing the selection of new Case International

dealers.

The plaintiff contends that the named defendants,

International Harvester, Case, and Tenneco, partici-

pated in an “association in fact” to perform the

various acts outlined in plaintiff’s Original, First

Amended and Second Amended Complaints. How-

ever, the enterprise must be “an entity separate and

apart from the pattern of activity in which it en-

gages.” Turkette, 452 U.S. at 583, 101 S.Ct. at 2529, 69

L.Ed.2d at 255.

The plaintiff has failed to sufficiently allege any

facts to establish a ‘‘separate’’ existence. Rather,

it appears from the plaintiff’s pleadings that the as-

2The decision of the United States Court of Appeals for the Fifth

Circuit is reported at 855 F.2d 241 (5th Cir. 1988), and repro-

duced in Petitioner's Appendix at 31. The district court’s opin-

ion is unreported. It is reproduced in Respondents’ Appendix

at 1.

sociation of the various corporate defendants and

their employees was specifically related to the cor-

porate acquisition and merger of International Har-

vester by Case and Tenneco. Thus, the only connec-

tion among the corporate defendants in this case

forms the core facts of the alleged fraudulent activity.

As noted in Turkette, supra, the ‘‘enterprise’’ must

have an existence apart from the alleged acts of rack-

eteering. Thus, we find that the plaintiff’s First

and Second Amended Complaints fail to establish a

claim upon which relief can be granted.

Resp. App. at 6-7. The district court alternatively held

that the allegations in Petitioner’s complaint referred to

a single transaction, and that alleged instances of mail and

wire fraud in connection with a single transaction could

not establish a pattern of racketeering activity. Resp.

App. at 5.

The court of appeals, contrary to the district court’s

opinion, held that Petitioner had properly alleged a pat-

tern of racketeering activity. The controlling Fifth Cir-

cuit precedent on the RICO ‘‘pattern’’ requirement is set

forth in R.A.G.S. Couture, Inc. v. Hyatt, 774 F.2d 1350,

1355 (5th Cir. 1985). The R.A.G.S. decision holds that a

pattern of racketeering activity may be established by

pleading two related predicate crimes, even where the chal-

lenged conduct constitutes an isolated scheme or a single

criminal episode. The court of appeals concluded that

Petitioner’s complaint did satisfy the R.A.G.S. require-

ment, and the district court’s opinion thus was not affirm-

ed on ‘‘pattern’’ grounds.

The court of appeals further held, however, that the

facts alleged in Petitioner’s complaint failed to establish

a continuing ‘‘association-in-fact’’ enterprise that was

6

separate and apart from the pattern of racketeering ac-

tivity.

We have incorporated this notion of continuity into

our definition of such enterprises. An association-in-

fact enterprise (1) must have an existence separate

and apart from the pattern of racketeering, (2) must

be an ongoing organization and (3) its members must

function as a continuing unit as shown by a hierar-

chieal or consensual decision making structure. Manazx

v. McNamara, 842 F.2d 808, 811 (5th Cir. 1988) ; Foval

v. First Nat’l Bank of Commerce, 841 F.2d 126, 129-

30 (Sth Cir. 1988); Jontesano v. Seafirst Commercial

Corp., 818 F.2d 423, 426-27 (5th Cir. 1987); Atkinson

v. Anadarko Bank & Trust Co., 808 I°.2d 438, 440-41

(5th Cir.), cert. denied, — U.S. —, 107 S.Ct. 3276,

97 L.Fd.2d 780 (1987); Shaffer v. Williams, 794 F.2d

1030, 1032 (5th Cir. 1986). Thus, the enterprise must

not be one that briefly flourishes and fades. It must

be one that, in the words of Turkette, ‘‘functions as a

continuing unit.” 452 U.S. at 583, 101 S.Ct. at 2528.

855 F.2d at 243-44, Pet. App. at 41-42.

The court concluded that Petitioner had not alleged such

an enterprise, had not alleged that Respondents’ conduct

posed a continuing threat of criminal activity and, relying

on U.S. v. Turkette, 452 U.S. 576 (1981), affirmed the dis-

trict court’s decision.

C. REASONS FOR DENYING THE WRIT.

1. The courts below merely applied

well-established precedent.

The courts below merely applied well-established

precedent on the question of the RICO enterprise as set

forth in United States v. Turkette, supra.

The enterprise is an entity, for present purposes a

group of persons associated together for a common

purpose of engaging in a course of conduct. The pat-

tern of racketeering activity is, on the other hand, a

series of criminal acts as defined by the statute. 18

U.S.C. § 1961 (1) (1976 Ed., Supp. II1). The former

is proved by evidence of an ongoing organization,

formal or informal, and by evidence that the various

associates function as a continuing unit. The latter

is proved by evidence of the requisite number of acts

of racketeering committed by the participants in the

enterprise. While the proof used to establish these

separate elements may in particular cases coalesce,

proof of one does not necessarily establish the other.

The “enterprise” is not the “pattern of racketeering

activity’’; it 1s an entity separate and apart from the

pattern of activity in which it engages.’’

452 U.S. at 583 (emphasis added) Petitioner does not claim

that the courts below departed from the well-established

rule that, for purposes of deciding a motion to dismiss pur-

suant to Fed.R.Civ.P. 12(b) (6), the allegations of the com-

plaint must be accepted as true, and all inferences from the

facts alleged must be drawn in favor of the plaintiff. Con-

ley v. Gibson, 355 U.S. 41 (1957). See Pet. App. at 35;

Resp. App. at 3. Having applied this standard to Peti-

tioner’s lengthy and detailed RICO allegations, the courts

below concluded that the Complaint did not allege a RICO

enterprise separate and apart from the pattern of rack-

eteering activity. This Court’s decision in U.S. v. Tur-

kette, supra, therefore requires that Petitioner’s com-

plaint be dismissed.

2. Denial of the Petition need not be deferred

f pending resolution of the ‘‘pattern’’ cases

presently before the Court.

As Petitioner correctly points out, there are cases

pending before this Court which may provide an oppor-

tunity to further explain what conduct constitutes a ‘‘pat-

tern of racketeering activity’’ for RICO purposes. See,

e.g., H. J. Inc. v. Northwestern Bell Telephone Co., No.

87-1252 (argued November 8, 1988).

Respondents argued below that Petitioner’s complaint

failed to allege a pattern of racketeering activity because

the specific predicate crimes alleged were in furtherance

of a single scheme. The court of appeals did not agree.

Rather, it reluctantly endorsed the most liberal definition

of pattern available, holding that a pattern of racketeer-

ing activity could be established by proof of only two

predicate acts in furtherance of a single scheme. Pet. App.

at 40-41. This Court’s decision in any of the pending “pat-

tern” cases, regardless of the outcome, will provide no

basis for reversing the court of appeals, which applied

the least restrictive definition of pattern, but dismissed

the complaint on entirely separate “enterprise” grounds.

}

CONCLUSION

The decisions of the courts below were in accord with

well-established precedent on the issue of the RICO ‘‘en-

terprise”, and this case therefore raises no novel, impor-

tant or controversial question of law. The Petition should

be denied.

Dated this 22nd day of February, 1989.

Respectfully submitted

Maurice J. McSweeney

MicHarL FiscHER

MicuakEL G. McCarty

Fotry & LarpNerR

Mites P. CLEMENTS

LreMLE, KELLEHER, KOHLMEYER,

Dennery, Hunutey, Moss & FriLot

Attorneys for Respondents

App. 1

APPENDIX

IN THE UNITED STATES DISTRICT COURT FOR

THE WESTERN DISTRICT OF LOUISIANA

ALEXANDRIA DIVISION

DELTA TRUCK &

TRACTOR, INC. CIVIL

)

)

) ACTION

-VS- )

) NO. 85-2606

J. I. CASE COMPANY, ET AL _)

RULING

(Filed April 9, 1987)

This matter is now before us on plaintiff’s, Delta

Truck & Tractor, Inc. (Delta) Motion for Leave to File a

Second Amended Complaint, and defendants’, J. I. Case

Company, Tenneco, Inc., and International Harvester

Company, Motion to Dismiss filed on February 28, 1986,

as well as the defendants’ 12(b)(6) Motion to Dismiss in

relation to the plaintiff’s Second Amended Complaint.

We hereby grant the plaintiff leave to file its Second

Amended Complaint pursuant to Fed. R. Civ. P. 15(a).

Fed. R. Civ. P. 15(a) provides that leave to amend ‘‘shall

be freely given when justice so requires.’’ Ordinarily,

when the amendment will not prejudice the other side due

to untimeliness, the motion should be allowed. See, Bamm,

Inc. v. GAF Corporation, 651 F.2d 389 (5th Cir. 1981). The

plaintiff’s Second Amended Complaint merely adds detail

and factual clarity to the plaintiff’s First Amended Com-

plaint and the substantive claims under the Racketeer

Influenced and Corrupt Organization provisions of Title

9 in the Organized Crime Control Act, 18 U.S.C. § 1961

a ip. 2

et seq., (hereinafter RICO). Therefore, we grant the

plaintiff leave to file the Second Amended Complaint.

Next, as to the defendants’ original Motion to Dis-

miss filed on February 28, 1986, all but one of the defen-

dants’ arguments is moot. Originally, the defendants

made three arguments in the Motion to Dismiss. First,

the defendants argued that the RICO claim should be

dismissed against the individual defendants due to a lack

of personal jurisdiction and improper venue. The argu-

ments and Motion to Dismiss as to the individual defen-

dants are now moot because the parties entered into a

stipulation on August 26, 1986 dismissing the complaint

against all individual defendants.

Second, the defendants argued that the plaintiff failed

to plead with sufficient particularity under Fed. R. Civ.

P. 9. This matter is also moot, however, because the de-

fendants have in their opposition to the Second Amended

Complaint withdrawn the objections based on Fed. R.

Cov, F.. 3.

Third, in the original Motion to Dismiss defendants

contended that the plaintiff had failed to state a claim

upon which relief could be granted pursuant to Fed. R.

Civ. P. 12(b)(6). In the defendants’ Opposition to the

Second Amended Complaint, defendants retain and reite-

rate their objections to the First and Second Amended

Complaints based upon Fed. R. Civ. P. 12(b) (6).

Because defendants’ Motion to Dismiss pursuant to

Fed. R. Civ. P. 12(b)(6) has been reurged in defendants’

Opposition to the Second Amended Complaint, we will

treat the defendants’ Opposition to the Second Amended

App. 3

Complaint as a renewed 12(b)(6) Motion to Dismiss the

plaintiff’s eleventh cause of action asserting a claim under

RICO. Essentially, the defendants contend that plaintiff

has failed to allege either a ‘‘pattern of racketeering ac-

tivity,’’ or, an ‘‘enterprise.’’ Both of these elements are

prerequisites for a claim under RICO. 18 U.S.C. ¢ 1961,

1962.

In determining whether to dismiss a complaint pur-

suant to Fed. R. Civ. P. 12(b)(6), this court must read a

complaint as a whole, accepting material allegations and

drawing all inferences in favor of the plaintiff. Conley

v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-102, 2 L.Ed.2d

80 (1957). Although it is necessary to plead all of the

elements of a RICO violation within the complaint, a com-

plaint will be sufficient as long as it meets the ‘‘liberal

notice-pleading procedure of the Federal Rules of Civil

Procedure, and of Conley v. Gibson, 355 U.S. 41, 78 S.Ct.

99, 2 L.Ed.2d 80 (1957).’’ Mitsubishi Aircraft Internat’l,

Inc. v. Brady, 780 F.2d 1199 (5th Cir. 1986).

In plaintiff’s First Amended Complaint, plaintiff as-

serted a cause of action under the civil RICO provisions,

18 U.S.C. §1964(c). The provisions of §1964(c) apply

only when a violation of § 1962 has been alleged. This

section provides that a ‘‘pattern of racketeering activity’’

is unlawful only if (a) the challenged conduct provides

income which is used to acquire an interest in an ‘‘enter-

prise’’; (b) the challenged conduct is used to require or

maintain an interest in an ‘‘enterprise’’; or (c) the chal-

lenged conduct is used to participate in conduct in or con-

duct the affairs of an ‘‘enterprise.’’ The defendants in

the case at bar contend that the plaintiff has failed to

App. 4

allege either a ‘‘pattern or racketeering activity’’, or an

‘‘enterprise.’’

Substantively, 18 U.S.C. §1961(5) provides that to

constitute a ‘‘pattern’’ it ‘“‘requires at least two acts of

racketeering activity ....’’ RICO also defines ‘‘racketeer-

ing activity’? to include, among other things, any act

‘‘indictable’’? under numerous federal criminal provisions,

including mail and wire fraud. 18 U.S.C. § 1961(1)(B).

The plaintiff contends that the defendants made use of

the United States mails to implement a scheme to defraud

some 400 dealers of their businesses and various assets in

‘conflict areas’’. In particular, the plaintiff contends

that this scheme arose in connection with Tenneco and

Case’s acquisition of the International Harvester agri-

cultural equipment business, which constituted one event

in the alleged ‘‘pattern of racketeering activity’’ by which

Tenneco and Case acquired dealerships and dealership

assets from numerous terminated dealers across the

United States.

In Sedima, S.P.R.L. v. Emrex Co., — U.S. —, 105

S.Ct. 3275 (1985), the Supreme Court explained that

“The legislative history [of RICO] supports the view

that two isolated acts of racketeering activity do not

constitute a pattern. As the Senate Report explained :

‘The target of [RICO] is thus not sporadic activity.

The infiltration of legitimate business normally re-

quires more than the ‘racketeering’ activity and the

threat of continuing activity to be effective. It is this

factor of continuity plus relationship which combines

to produce a pattern.’ ’’ [citation omitted] (emphasis

added). 105 S.Ct. at 3285, n. 14.

App. 5

Ordinarily, two or more acts which occur in the course of

a single criminal episode do not constitute a ‘‘pattern of

racketeering activity.’’ See, Northern Trust Bank/

O’Hare v. Inryco, Inc., 615 F. Supp. 828 (N.D. Ill. 1985) ;

Richter v. Sudman, 634 F. Supp. 234 (S.D. N.Y. 1986). In

Fleet Management Systems, Inc. v. Archer-Daniels-Mid-

land Co., 627 F. Supp. 550 (C.D. Ill. 1986), the court ex-

plained that: ‘‘An isolated criminal episode, though ac-

complished through a number of fraudulent acts, does not

evidence such a threat of continuing criminal activity.’’

However, the Fifth Circuit in R.P.G.S. Couture, Inc. v.

Hyatt, 774 F.2d 1350 (5th Cir. 1985), has stated that two

‘‘related’’ acts of mail fraud could constitute a pattern of

racketeering activity. But, the court in Hyatt, supra,

failed to offer any explanation or analysis for its state-

ment. Additionally, the Court later stated in Armco In-

dustries Credit Corp. v. SLT Warehouse Co., 782 F.2d 475,

481 (5th Cir. 1986), that the ‘‘pattern of racketeering

activity’’ language in the RICO statute is something that

must be interpreted in ‘‘the future.’’

All the allegations in the plaintiff’s First and Second

Amended Complaint refer to a single transaction—the

Case and Tenneco acquisition of International Harvester’s

agricultural equipment business and its related efforts to

stabilize the combined dealer network. The alleged repeat-

ed violations of mail fraud within the plaintiff’s First and

Second Amended Complaint in furtherance of this business

endeavor or scheme cannot suffice to establish a ‘‘ pattern

of ‘racketeering activity.’’

Nevertheless, assuming that the plaintiff’s complaint

did allege sufficient facts to establish a ‘‘pattern of racke-

App. 6

teering activity’’, the plaintiff has failed to allege an ‘‘en-

terprise.’’

Although § 1961(4) does not provide an exact defini-

tion of ‘‘enterprise,’’ the term does include partnerships,

corporations, associations, and other legal entities, as well

as groups of individuals ‘‘associated in fact.’’ Despite the

ambiguities within the statute itself, in order to properly

plead a violation of the RICO statute, a plaintiff must al-

lege an ‘‘enterprise’’ that is ‘‘separate and apart’’ from

the challenged racketeering activity. United States v. Tur-

kette, 452 U.S. 576, 583 (1981). Furthermore, the ‘‘per-

sons’’ charged with violating the statute must be different

from the ‘‘enterprise.’’ Benneit v. Berg, 685 F.2d 1053

(8th Cir. 1982) ; Schreiber Distributing v. Serve-Well Fur-

niture Co., 806 F.2d 1393 (9th Cir. 1986). But see, United

States v. Hartley, 678 F.2d 961, 988 (11th Cir. 1982), cert.

denied, 459 U.S. 1183, 103 S.Ct. 834, 74 L.Ed.2d 1027

(1983), (“a corporation may be simultaneously both a de-

fendant and the enterprise’’ under § 1962(c)).*

The plaintiff contends that the named defendants,

International Harvester, Case, and Tenneco, participated

in an “association in fact” to perform the various acts out-

lined in plaintiff’s Original, First Amended and Second

Amended Complaints. However, the enterprise must be

“an entity separate and apart from the pattern of activity

in which it engages.” Turkette, 452 U.S. at 583, 101 S.Ct.

at 2529, 69 L.Ed.2d at 255.

* This finding was made strictly on the ground that the Court had

been furnished no authority holding that a corporation could

not be found to be in a dual capacity.

App. 7

The plaintiff has failed to sufficiently allege any facts

to establish a “separate” existence. Rather, it appears

from the plaintiff’s pleadings that the association of the

various corporate defendants and their employees was

specifically related to the corporate acquisition and merger

of International Harvester by Case and Tenneco. Thus,

the only connection among the corporate defendants in

this case forms the core facts of the alleged fraudulent

activity. As noted in Turkette, supra, the “enterprise”

must have an existence apart from the alleged acts of |

racketeering. Thus, we find that the plaintiff’s First and

Second Amended Complaints fail to establish a claim upon

which relief can be granted.

Alternatively, we also find that the plaintiff has failed

to identify an “enterprise” which is sufficiently distinct of

the “persons” charged with violating the statute. It is

clear that the defendants may not simultaneously be con-

sidered the “enterprise” and the “person” who conducts

the affairs of the enterprise through a pattern of rac-

keteering activity. See, e.g., Bennett v. United States

Trust Co., 770 F.2d 308, 315 (2d Cir. 1985), cert. denied,

106 S.Ct. 800, 88 L.Ed. 2d 776 (1986); B. F. Hirsch vt.

Enright Refining Co., 751 F.2d 628, 634 (3rd Cir. 1984) ;

Harrico, Inc. v. American National Bank & Trust Co., 747

F.2d 384, 400 (7th Cir. 1984), aff'd on other grounds, 105

S.Ct. 3291, 87 L.Ed.2d 437 (1985); Rae v. Union Bank, 725

I'.2d 478, 581 (9th Cir. 1984); United States v. Computer

Sciences Corp., 689 F.2d 1181, 1190 (4th Cir. 1982), cert.

denied, 459 U.S. 1105, 103 S.Ct. 729, 74 L.Ed.2d 953 (1983).

But see, United States v. Hartley, 678 F.2d 961, 987-90 (11th

App. 8

Cir. 1982), cert. denied, 459 U.S. 1170, 103 S.Ct. 815, 74

L.Ed.2d 1014 (1983).**

Defendants’ Motion to Dismiss pursuant to Fed. R.

Civ. P. 12(b)(6) is hereby GRANTED and the plaintiff’s

Eleventh Cause of Action asserting a claim under RICO

in both the First and Second Amended Complaint is hereby

DISMISSED.

DONE AND SIGNED at Alexandria, Louisiana, this

8th day of April, 1987.

/s/ Nauman S. Scott

UNITED STATES DISTRICT JUDGE

*We further note that Plaintiff's pleadings also fail to identify

or characterize the alleged “enterprise.” Instead, the First

Amended Complaint, as well as the Second Amended Com-

plaint, merely aver the existence thereof. It is inconsistent, even

with the liberal notice pleading of the federal rules, to allow

such deficiencies.