Opposition Brief — Marshall-Silver Construction Co. v. Mendel

Supreme Court, US,

FILED

>) MAR 11 198

¥ JOSEPH F. SPANIOL, JR,

No. 87-1358

IN THE

Supreme Court of the United States

OCTOBER TERM, 1987

MARSHALL-SILVER CONSTRUCTION COMPANY, INC.,

AND

SILVER CONSTRUCTION, INC.,

Petitioners,

Vv.

M. Mark MENDEL, Individually

DANIEL E. Murray, Individually, and

M. MARK MENDEL, Limited,

Respondents.

BRIEF IN OPPOSITION

H. ROBERT FIEBACH

(Counsel of Record)

DaviD I. BOOKSPAN

Twelfth Floor Packard Building

15th and Chestnut Streets

Philadelphia, Pennsylvania 19102

(215) 977-2000

Attorneys for Respondents

OF COUNSEL: |

WoLF, BLockK, SCHORR AND SOLIS-COHEN |

Twelfth Floor Packard Building

15th and Chestnut Streets

Philadelphia, Pennsylvania 19102

(215) 977-2000

sence ntant

ae

QUESTION PRESENTED

Whether the decision by a unanimous panel of the Court of Ap-

peals for the Third Circuit affirming the dismissal of a RICO claim

which alleged only a single victim, a single injury, and a single,

short-lived scheme with only a single active perpetrator mandates

the issuance of a Writ of Certiorari?

TABLE OF CONTENTS

Page

.RUESTION PRESENTED... 06.0550555042009005e ene i

TAME OF CONTENTS « .... 0650s cnsSsa0a5 cee il

TABLE OF AUTHORITIES .......5..4....545..52 eee il

COPMIIOMS BELOW... 500.045 55sceusduss eee l

PORIICTION ooo ocd vo ccnhs scan dzae eee 2

STATUTES INVOLVED «20. (0550css0sa00be eee 2

STATEMENT OF THE CASE ... 6c. <.00ck0 eee ee 2

PARGUMMENT ooo d coc ccnsccandsne dese 4

A. The “Pattern” Requirement ..................... 5

B. The Writ Should Be Denied Because Plaintiffs’

RICO Claim Would Fail Under Any of the

Courts of Appeals’ Approaches to Pattern ........ 7

1. The Consensus Comtti ... cases 9

2. The Other Circuit Courts of Agpeals 22.0680 14

Lae 4.’ 2 eee hee kd ee a 18

ill

TABLE OF AUTHORITIES

CASES:

Appley v. West, 832 F.2d 1021 (7th Cir. 1987) .......

Bank of Amenca National Trust and Savings Ass’n v.

Touche Ross & Co., 782 F.2d 966 (11th Cir. 1986)

Barticheck v. Fidelity Union Bank, 832 F.2d 36 (3d

RE ONE ee

Beck v. Manufacturers Hanover Trust Co., 820 F.2d

46 (2d Cir. 1987), cert. denied, 108 S. Ct. 698

PE REC an Gee Wen eas cere danse 64 scence.

Calhforma Architectural Building Products v. Franciscan

Ceramics, Inc., 818 F.2d 1466 (9th Cir. 1987), cert.

eee, see oe. Oe. OG (IFES)... 2... ens.

Condict v. Condict, 826 F.2d 923 (10th Cir. 1987).....

Cowan v. Corley, 814 F.2d 223 (5th Cir. 1987) .......

Croker v. Federal Deposit Insurance Corp., 826 F.2d

347 (5th Cir. 1987), petition for cert. filed, 56

ioe. 2422 (ipecember 1, 1987) ..............

Davis v. United States, 417 U.S. 333 (1974) .........

Eastern Publishing & Advertising, Inc. v. Chesapeake

Publishing & Advertising, Inc., 831 F.2d 488 (4th

re ee anh Svie's a cw sw vn desde es es

Ellictt v. Chicago Motor Club Insurance, 809 F.2d

I draped gas kacacdascessrcccess

Garbade v. Great Divide Mining and Milling Corp.,

ae eG Oe 0)

H_.J. Inc. v. Northwestern Bell Telephone Co., 829

ee US OEE ask scenes ssncccssvccs.

HMK Corp. v. Walsey, 828 F.2d 1071 (4th Cir.

1987), cert. denied, 108 S. Ct. 706 (1988) .........

Holmberg v. Mornsette, 800 F.2d 205 (8th Cir.

1986), cert. denied, 107 S. Ct. 1953 (1987)........

Page

|

Table of Authorities Continued

Page

International Data Bank Ltd. v. Zepkin, 812 F.2d

PO Cee SE ED oc cae Settee eon ee 10

Jarvis v. Regan, 833 F.2d 149 (9th Cir. 1987)....... 12

Kearny v. Hudson Meadows Urban Renewal Corp.,

829 F.2d 1263 (3d Cir. 1987) .......... spa ist yn 10

Lipin Enterprises, Inc. v. Lee, 803 F.2d 322 (7th

De, ERE IN i ARDS atl ane ie in Ak SS 10, 11

Liquid Air Corp. v. Rogers, 834 F.2d 1297 (7th Cir.

pt aren Rp ye a Ses Tg, lad NCR aap ram ot Rt 8, 11

Marks v. Pannell Kerr Forster, 811 F.2d 1108 (7th

GS TE Ct ote ak sacs iin adie sane band bl aGan 11

Marshall & Ilsley Trust Co. v. Pate, 819 F.2d 806

CFO et ED) vanes bos. bd doadabiea eek chook es 8

Marshall-Silver Construction Co. v. Mendel, 835

ee Sees ED bby se ua chek cnbesataens es dx 4,7,9,

17

Medallion Television Enterprises, Inc. v. SelecTV of

Caltfornia, Inc., 833 F.2d 1360 (9th Cir. 1987)..... 8, 12

Montesano v. Seafirst Commercial Corp., 818 F.2d

ee Rs To bas oc cc dea eek cake ekace unas 16, 17

Morgan v. Bank of Waukegan, 804 F.2d 970 (7th

Se SED ck Sara va Ok eee ee desi cade wre erry 11

Ornest v. Delaware North Companies, Inc., 818 F.2d

hg Ge as SEAR ok ss hdc necked oes eeaeix ies 17

Petro-Tech, Inc. v. Western Co. of North Amenca,

ee Fe Nee CON -Gee. PORT) iy ocawn nc cccaccceac cee 9, 10

R.A.G.S. Couture, Inc. v. Hyatt, 774 F.2d 1350 (5th

Rl RE Ge nae ssn ea ee ea Pieee MER RER ES COO 15, 16

Roeder v. Alpha Industnes, Inc., 814 F.2d 22 (Ist

Se EEE kk awk ced Ree EER CU Ree 7,9

Schreiber Distnbuting Co. v. Serv-Well Furniture

Co., 806 F.2d 1393 (9th Cir. 1986) ............... 12

Table of Authorities Continued

Page

Sedima, §.P.R.L. v. Imrex Co., 473 U.S. 479 (1985) 5, 6. 7,

13, 35

Smoky Greenhaw Cotton Co. v. Mernil Lynch,

Pierce, Fenner & Smith, Inc., 785 F.2d 1274 (5th

Cir. 1986), rehearing denied, 785 F.2d 1282 (5th

CPs PWD vcs asa scekaseeaaanaalaee eae ednteasouen 15, 16

Sun Savings & Loan Association v. Dierdorff, 825

ae BT CUE Gar. WEED oo nn occ batcecsdnaresneehs 8, 12

Superior Oil Co. v. Fulmer, 785 F.2d 252 (8th Cir.

| CE rn er tpn ya re rane? 17

Tellis v. United States Fidelity & Guaranty Co., 826

we ree t, fe Ae, | eer eee re 11, 12

Torwest DBC, Inc. v. Dick, 810 F.2d 925 (10th Cir.

1987) ...... Ph Eee he Ey ar hay" 8, 13

United States v. Benevento, 836 F.2d 60 (2d Cir.

FED nec alek acc nedusac ada pened cee aes 14

United Siates v. Ianniello, 808 F.2d 184 (2d Cir.

1986), cert. denied, 107 S. Ct. 3230 (1987)...... a 14

United States v. Kragness, 830 F.2d 842 (8th Cir.

pe PO RCMP ar NM GAN EY AO cant 52, ROE 17

Yellow Bus Lines, Inc. v. Drnvers, Chauffeurs &

Helpers Local Union 639, No. 86-5135 (D.C. Cir.

PUY: Sa, SNE. Sa Fea cnseaes chances dnuaanen) 8, 13

STATUTES:

TEED Coat 2.) Epp RMU NpeA tatters aes 3

SE Ue et ee hak van sense sin kabaaneenenan 2, Sy Te

14

PD AA BOTA bss laacisesacaceasasaenaneeei 13

EER Crt? f° pa BLO On Aen Ine An ror 3

eG A. ee) oe es ev eo cues Cova 2

OUSE E10. eee eee 3

Table of Authorities Continued

LEGISLATIVE MATERIALS

H.R. 2983, 100th Cong., Ist Sess. (1987)

H.R. 3240, 100th Cong., Ist Sess. (1987)

H.R. 5445, 99th Cong., Ist Sess. (1986)

S. 1523, 100th Cong., Ist Sess. (1987)

United States House of Representatives Legislative

Calendar, Committee on the Judiciary, 99th Cong

lst Sess 205 { 19RG)

IN THE

Supreme Court of the United States

MARSHALL-SILVER CONSTRUCTION COMPANY, IN(¢

and

SILVER CONSTRUCTION, IN¢

etilioner

M. MARK MENDEL, Individually

DANIEL E. Murray, Individually, and

M. MARK MENDEL, Limited,

Ry Aner ler

BRIEF IN OPPOSITION

Respondents M. Mark Mendel, Daniel E. Murray and M. Mark

Mendel, Ltd.' respectfully request that the Court deny Petitioners’

request for a Writ of Certiorari to the United States Court of Ap-

peals for the Third Circuit

OPINIONS BELOW

[he opinion of the unanimous panel of the Court of Appeals for

the Third Circuit is reported at 835 F.2d 63 (3d Cir. 1987), and the

slip opinion is reprinted in the Petition Appendix. The District

Court’s bench ruling and Order are not reported but are included in

the Petition Appendix

Pursuant to Rule 28.1, defendants state that M. Mark Mendel, |

rporate respondent M. Mark Mendel, Ltd. has no parent companies

JURISDICTION

lhe judgment of the Court of Appeals for the Third Circuit was

entered on December 9, 1987, and a petition for rehearing er

was denied on January 5, 1988. This Court has jurisdiction to hear

the Petition pursuant to 28 U.S.C. §1254(1

STATUTES INVOLVED

Phe Organized Crime Control Act of 1970, Title IX (Racketeer

Influenced and Corrupt Organizations), 18 U.S.C. §§ 1961-1968, as

amended (RICQO)

lhe relevant sections of Unis statute are set forth in the Petitior

STATEMENT OF THE CASE

[his action arises from the failed business of petitioners Mar-

shall-Silver Construction Company, Inc. (“Marshaill-Silver”) and

Silver Construction Inc ‘Silver Construction”) (716) Respon-

dents, M. Mark Mendel and Daniel E. Murray are lawyers admit-

ted to practice in Pennsylvania and employees of respondent M

Mark Mendel, Ltd., a Philadelphia lawfirm.’

From 1983 to 1984, Marshalli-Silver was in business as a genera!

contractor for construction projects (1916, 18). Defendants’ client

Barton & Co. (“Barton’’) was a subcontractor on several of Mar-

shall-Silver’s projects (121). During 1984 several disputes arose be-

tween Marshall-Silver and Barton relating to Marshall-Silver’s re-

fusal to pay Barton for completed work (Exhibits “A” and “B”

‘

the Complaint; see App. at A-14, A-20).* After a June 29, 1984

meeting (124). Mr. Mendel wrote strongly worded demand letters

dated July 2 and 3, 1984, demanding on behalf of his client Barto:

Pa ig ip frences are t he )

I eren MW Case he } c cit ¢ ¢ r i v

c eit Ic iS piain tf ) esponae is ete nt

‘ nA

Als 84, Marshall-Silver changed its n Silver (

c re er ) to Marst Silve —ultel new corpora 0 KNOW ‘

©

er ons é Inc., had beer ed Ma ] n D }

A Ww ine sx w rie ott or yx ( wres VY

that Marshall-Silver pay Barton (Exhibits “A” and “B” to the com-

plaint, see App. at A-14, A-20).° Approximately six months later

when Marshall-Silver still had not paid Barton, defendants, on be-

half of Barton and two other Marshall-Silver creditors, filed a Peti-

tion for Involuntary Bankruptcy against Marshall-Silver in the

United States Bankruptcy Court for the Eastern District of Penn-

sylvania on December 28, 1984 (9937, 39; see App. at A-22).° The

Bankruptcy Court set bonds on the petition totalling $850,000 (142)

The petition was dismissed on February 8, 1985, after the petition-

ing creditors did not post the bonds (143).

After the petition was dismissed, Marshall-Silver filed a com-

plaint against Barton and the other petitioning creditors in Bank-

ruptcy Court, (the “Bankruptcy Complaint’’), pursuant to 28 U.S.C

§§157, 1334 and Section 303(i) of the Bankruptcy Code, 11 U.S.C.

§303(i) (Bankruptcy Complaint 15). The conduct and injuries al-

leged, and damages sought in the complaint dismissed in this action

are virtually identical to those alleged in the Bankruptcy Complaint.

The bankruptcy case has been tried and is pending disposition.*

While the bankruptcy action was pending, plaintiffs filed this

lawsuit charging defendants with violations of RICO and various

state laws.” On defendants’ motion, the District Court dismissed

Plaintiffs did noi allege any injury resulting from the demand letters

The filing of the bankruptcy petition, along with the resultant publicity in the

trade, was the only act of defendants alleged to have caused plaintiffs any harm

(1937, 44-46, 59, 63, 65)

Compare 1166, 69, 37, urth Bankruptcy Complaint 1928, 49, 60; and 1137, 46

57(3), 63, with Bankruptcy Complaint 1127(c), 47(c), 41, 40, 42, 27(a), 47(a

27(b), 47(b); and 146, uzth Bankruptcy Complaint 140-41

The bankruptcy action, captioned Marshall-Silver Construction Company, In

Barion & Co., Nesler Brothers, Inc., RJ. Skelding Co., Inc., No. 85-0300

(Bankr. E.D. Pa.) was tried in the United States Bankruptcy Court for the Eastern

District of Pennsylvania before the Honorable Emil P. Goldhaber. Al! parties sub-

mitted proposed findings of fact and conclusions of law. Judge Goldhaber retired

from the bench without ruling

Jurisdiction in this action was founded solely on [federal question jurisdiction

premised on the RICO claim. A virtually identical complaint to the one dismissed

ind appealed here was filed by plaintiffs’ principal, Marc I. Silver, individually

and is pending before the United States District Court for the Eastern District of

Pennsylvania under the caption Marc 1. Silver v. M. Mark Mendel, Dantel E

Murray, and M. Mark Mendel, Lid., Civil Action No. 86-7104 (E.D. Pa.) (the

Silver action”). In addition to RICO, jurisdiction in the S:/ver action is premised

f

(footnote continued on next page

4

plaintiffs’ RICO claim and dismissed plaintiffs’ pendent state law

claims without prejudice for plaintiffs to bring them in a proper fo-

rum.

A unanimous panel of the Court of Appeals for the Third Circuit

affirmed, holding that plaintiffs’ allegations of “a single victim,” a

single injury, and a single, short-lived scheme with only two active

perpetrators,”"' did not constitute a pattern of racketeering.’? Mar-

shall-Stlver Construction Co. v. Mendel, 835 F.2d 63, 67 (3d Cir.

1987). Plaintiffs’ petition for rehearing en banc was denied.

ARGUMENT

Plaintiffs urge the Court to issue a Writ of Certiorari to the

United States Court of Appeals for the Third Circuit to address a

conflict among the courts of appeals in interpreting the requirement

of a “pattern of racketeering activity” under RICO, 18 U.S.C.

§1962(c). This case is ill-suited for resolving the pattern question,

however, because none of the various approaches of the courts of ap-

peals would find a RICO pattern based on plaintiffs’ allegations of a

single victim, a single injury, and a single, short-lived scheme with

(footnote continued from preceding page)

on diversity of citizenship. The RICO claim and several state law claims in the Si/-

ver action were dismissed on the merits, and that action is awaiting trial in district

court on plaintiffs’ state law claim of wrongful use of civil proceeding.

'© Marc I. Silver was the principal and/or sole owner of both Marshall-Silver and

Silver Construction. (124; Silver action complaint 116). Moreover, the complaint

does not allege any action taken by defendants with respect to Silver Construction,

or any injury suffered by Silver Construction. Thus, the complaint alleges a single

victim— M arshall-Sil ver.

"' The Mendel lawfirm was alleged to have participated in the affairs of Barton

only through the activities of Messrs. Mendel and Murray. See Marshall-Silver

Construction Co. v. Mendel, 835 F.2d 63, 67 n.4 (3d Cir. 1987). Similarly, the only

substantive allegation against defendant Murray was that he signed the Petition for

Involuntary Bankruptcy (1137, 39). This solitary allegation of a single predicate

act cannot support a RICO claim against Mr. Murray. Thus, the complaint al-

leged only a single active perpetrator.

'2 Plaintiffs place great emphasis on their “offer” to amend the com laint; an is-

P gr P P

sue that never was properly before either the District Court or the Court of Ap-

peals. Plaintiffs never filed a motion seeking leave to amend. Moreover, as is dis-

cussed below, see infra note 27, the new allegations offered by plaintiffs add nothing

to their RICO claim.

—

only a single active perpetrator.’ Every court of appeals that has

rendered an opinion on the factors which satisfy the elements of a

RICO claim would dismiss this case because plaintiffs’ allegations

fail to meet its standards. The Writ, therefore, should be denied be-

cause this case does not hone the issue sufficiently for meaningful

resolution by the Court.

A. The “Pattern” Requirement

RICO provides a private civil right of action to “any person in-

jured in his business or property....” 18 U.S.C. §1964(c). Plain-

tiffs’ complaint purported to allege a RICO claim pursuant to 18

U.S.C. §1962(c) (183), which renders unlawful the conduct of an

enterprise through a “pattern of racketeering activity.” A ““pattern

of racketeering activity’ requires at least two acts of racketeering ac-

tivity....” 18 U.S.C. §1961(5). In Sedima, S.P.R.L. v. Imrex Co.,

473 U.S. 479 (1985), this Court explained that the definition con-

tained in section 1961(5) “states that a pattern ‘requires at least two

acts of racketeering activity’... not that it ‘means’ two such acts.”

Id. at 496 n.14 (emphasis in original).

The implication is that while two acts are necessary, they

may not be sufficient. Indeed, in common parlance two of

anything do not generally form a “pattern.”

Id. The Court then challenged the lower courts and Congress “to

develop a meaningful concept of ‘pattern’” to combat “the ‘ex-

traordinary’ uses to which civil RICO has been put.” Jd. at 500.

Towards this end the Court offered the following guidance: “The

legislative history supports the view that two isolated acts of racke-

teering activity do not constitute 2 pattern.” Jd. at 496 n.14.

Among the sources the Court looked to was the Senate Report em-

phasizing that RICO: 1) was not directed at sporadic activity; 2) re-

quired a threat of continuing activity to be triggered; and 3) required

continuity plus relationship to satisfy the pattern requirement.

3

Moreover, although different courts of appeals historically have adopted varied

and sometimes conflicting approaches to pattern, a consensus is emerging among the

courts of appeals that adopts a case-by-case analysis of a variety of factors to deter-

mine whether the conduct alleged constitutes a pattern of racketeering activity.

6

As the Senate Report explained: “The target of [RICO] is

thus not sporadic activity. The infiltration of legitimate busi-

ness normally requires more than one ‘racketeering activity’

and the threat of continuing activity to be effective. It is this

factor of continuity plus relationship which combines to pro-

duce a pattern.” S. Rep. No. 91-617, p. 158 (1969)(emphasis

added).

Id.

The Court also found instructive the statements of Representative

Poff that RICO is “not aimed at the isolated offender,’ and Senator

McClellan, the sponsor of the Senate bill, that “pattern” requires re-

lationship among the acts and two acts standing alone are insuffi-

cient.

Similarly, the sponsor of the Senate bill, after quoting this

portion of the Report, pointed out to his colleagues that “(t]he

term ‘pattern’ itself requires the showing of a relation-

ship.... So, therefore, proof of two acts of racketeering ac-

tivity, without more, does not establish a pattern....” 116

Cong. Rec. 18940 (1970) (statement of Sen. McClellan). See

also id., at 35193 (statement of Rep. Poff) (RICO “not aimed

at the isolated offender”); House Hearings, at 665.

Id. ‘

The Court also directed attention to the definition of “pattern”

given in a later section of the same bill. This definition requires that

the acts have the same or similar: 1) purposes, 2) results, 3) partici-

pants, 4) victims, 5) methods of commission, or 6) otherwise are in-

terrelated and 7) are not isolated events.

Significantly, in defining “pattern” in a later provision of the

same bill, Congress was more enlightening: “criminal con-

duct forms a pattern if it embraces criminal acts that have the

same or similar purposes, results, participants, victims, or

methods of commission, or otherwise are interrelated by dis-

tinguishing characteristics and are not isolated events.” 18

U.S.C. §3575(e). This language may be useful in interpret-

ing other sections of the Act.

Id. (citation omitted).

Since Sedima, the courts have taken up the cudgel of fashioning a

meaningful concept of “pattern.”’* Eleven courts of appeals have ad-

dressed the issue.'°

B. The Wnt Should Be Denied Because Plaintiffs’ RICO Claim

Would Fail Under Any of the Courts of Appeals’ Approaches to

Pattern

In analyzing “pattern” the courts have focused on Sedima’s em-

phasis of “continuity plus relationship.” Although different courts

of appeals evaluate different factors and weigh them differently, the

consensus emerging from the eight courts of appeals for the First,

Third, Fourth, Seventh, Ninth, Tenth, Eleventh, and the District of

Columbia Circuits eschews any litmus test measure of pattern in

favor of a case-by-case factual analysis of many factors to determine

continuity plus relationship."* These factors include: the number,

character, and variety of the predicate acts; whether the predicate

'* Congress also has carried the torch. In the 99th Congress H.R. 5445, which

passed the House of Representatives by a vote of 371 to 28, Untitled Slales House of

Represenialives Legislative Calendar, Commillee on the Judiciary, 99th Cong., 1st

Sess. 205 (1986), would have amended section 1962(c) and legislatively defined pat-

tern to require multiple, divisible criminal episodes. Although this bill ultimately

died in the Senate Judiciary Committee, H.R. 3240 which currently is before Con-

gress incorporates this idea and would amend section 1961(6) to define pattern as

requiring that the predicate acts not be “so closely related to each other and con-

nected in point of time and place that the acts constitute a single episode involving

only one victim. ... .”

Also pending in this 100th Congress are H.R. 2983 and parallel S. 1523.

These bills would amend section 1964(c) to curtail substantially the availability of a

private right of action under RICO.

Thus, Congress is working on the very legislative question that plaintiffs sig-

gest the Court resolve judicially, and Congress has proposed resolutions very differ-

ent from that urged by plaintiffs.

15

The Court of Appeals for the Sixth Circuit has not addressed the pattern ques-

tion since Sedima was decided.

16

First Circwt. See Roeder v. Alpha Industnes, Inc., 814 F.2d 22, 31 (1st Cir.

1987) (“no one characteristic can be considered as controlling in determining

whether a pattern exists”).

Third Circuil. See, e.g., Marshall-Silver Construction Co. v. Mendel, 835 F.2d

63, 66 (3d Cir. 1987) (discussing factors relevant to case-by-case analysis); Bar-

licheck v. Fidelity Union Bank, 832 F.2d 36, 40 (3d Cir. 1987) (“We decline to

adopt a verbal formula for determining when unlawful activity is sufficiently exten-

sive to be ‘continuous.’ This determination necessarily depends on the ircum-

stances of the particular case.’’)

(footnote continued on next page)

8

acts were in pursuit of a single objective or multiple objectives; the

time period over which the acts were committed; the similarity of the

acts; the number of victims; the number of perpetrators; the number

of injuries; the context in which the acts were committed; the pres-

ence of separate schemes; whether the scheme was open-ended; and

whether the acts were discrete or inerely preparatory to a single of-

fense.

Although the Court of Appeals for the Second, Fifth and Eighth

Circuits have not formally adopted this consensus approach, the

Court of Appeals for the Second Circuit gives consideration to these

same factors in its analysis of “enterprise” under RICO, the Court

of Appeals for the Fifth Circuit has reconsidered its approach, and

even plaintiffs concede that this case would fail to meet the criteria of

“pattern” adopted by the Court of Appeals for the Eighth Circuit.

Plaintiffs’ allegations of a single victim, single injury, and a single,

short-lived scheme with only a single active perpetrator, therefore,

(footnote continued from preceding page)

Fourth Circuil. See, e.g., Eastern Publishing & Advertising, Inc. v. Chesa-

peake Publishing & Adveriising, Inc., 831 F.2d 488, 492 (4th Cir. 1987) (no

mechanical test can determine the existence of a RICO pattern; the question neces-

sarily is a matter of criminal dimension and degree to be decided on a case-by-case

basis); HMK Corp. v. Walsey, 828 F.2d 1071, 1073 (4th Cir. 1987), cerl. denied,

108 S. Ct. 706 (1988) (case-by-case standard looking to criminal dimension and de-

gree).

Seventh Circutl. See, e.g., Liquid Air Corp. v. Rogers, 832 F.2d 1297, 1304

(7th Cir. 1987) (‘“‘fact-specific inquiry, in which no single factor” determinative);

Marshall & Ilsley Trust Co. v. Pale, 819 F.2d 806, 809-10 (7th Cir. 1987) (exis-

tence of pattern “fact specific question encompassing many relevant factors”).

inth Circutl. See, e.g., Medallion Television Enterprises, Inc. v. SelecTV of

California, Inc., 833 F.2d 1360, 1363 (9th Cir. 1987) (‘“The circumstances of the

case... must suggest that the predicate acts are indicative of a threat of continuing

activity”); Sun Savings & Loan Assoctalion v. Dierdorff, 825 F.2d 187, 194 (9th Cir.

1987) (examine predicate acts to see whether isolated or sporadic).

Tenth Circuit. See, e.g., Torwest DBC, Inc. v. Dick, 810 F.2d 925, 929 (10th

Cir. 1987) (“we decline to go beyond the facts before us to formulate a bright-line

test in the abstract’’).

Eleventh Circuil. See Bank of America National Trust & Savings Associalion

v. Touche Ross & Co., 782 F.2d 966, 971 (11th Cir. 1986) (analyzing number and

type of acts, parties, time period, and purposes).

Distinct of Columbia Circuil. See Yellow Bus Lines, Inc. v. Drivers, Chauffeurs

& Helpers Local Union 639, No. 86-5135 (D.C. Cir. February 12, 1988) (available

on LEXIS) (analyzing number of acts, victims and perpetrators, type of acts, time

period and goal).

9

would fail to establish a pattern under the approaches of each of the

eleven courts of appeals that have addressed the question.

1. The Consensus Courts

Although the eight courts of appeals that utilize a case-by-case

factual analysis of pattern vary in the weight they give to specific

factors, plaintiffs’ allegations would not establish a pattern under

any approach.

First Circuit. In Roeder v. Alpha Industnes, Inc., 814 F.2d 22

(Ist Cir. 1987), the Court of Appeals for the First Circuit held that

racketeering acts “do not constitute a pattern simply because they

number two or more. The constituent elements must be sufficiently

related to one another and threaten to be more than an isolated oc-

currence.” Jd. at 30. Applying this standard the Court found that a

single bribe paid in three installments and which involved eleven

telephone calls and eight letters did not constitute a pattern of racke-

teering activity. Jd. at 31. Similarly, here plaintiffs’ allegations of

two letters, a single meeting and the filing of a single pleading, all

with the single alleged purpose of putting Marshalli-Silver out of

business would not constitute a pattern of racketeering activity under

the approach of the Court of Appeals for the First Circuit.

Third Circuit. The Court of Appeals for the Third Circuit ana-

lyzes pattern by evaluating such factors as: 1) the number of unlaw-

ful acts, 2) the length of time over which the acts were committed, 3)

the similarity of the acts, 4) the number of victims, 5) the number of

perpetrators, and 6) the character of the unlawful activity. Mar-

shall-Silver Construction Co. v. Mendel, 835 F.2d 63, 66 (3d Cir.

1987); Barticheck v. Fidelity Union Bank, 832 F.2d 36, 39 (3d Cir.

1987). See Petro-Tech, Inc. v. Western Co. of North America, 824

F.2d 1349, 1355 (3d Cir. 1987). Applying this analysis to this case

the Court held that plaintiffs’ allegations of “a single victim, a single

injury, and a single, short-lived scheme with only two active perpe-

trators,”'’ Mendel, 835 F.2d at 67, failed to establish a pattern of

racketeering activity. Jd."

'" See supra note 11.

'§ Plaintiffs erroneously suggest that the Court of Appeals’ decision in Mendel is

inconsistent with decisions of other panels of that Court. Not only would such an

intramural conflict be an insufficient basis for granting the Writ, see Davis v

Uniled Slates, 417 U.S. 333, 340 (1974), but no such conflict exists.

(footnote continued on next page)

10

Fourth Circuit. The Court of Appeals for the Fourth Circuit has

adopted a pattern analysis that inquires into “criminal dimension

and degree.” International Data Bank Ltd. v. Zepkin, 812 F.2d

149, 155 (4th Cir. 1987). Under this analysis “the predicate acts

must be related and must be part of a continuous criminal endeav-

or.” Id. at 154. In Zepkin, the Court of Appeals found that:

There must be some indication of a “threat of continuing ac-

tivity” by the defendants, not just one instance of fraud with

a single victim.

Id. at 155 (quoting Lipin Enterpnses v. Lee, 803 F.2d 322, 324 (7th

Cir. 1986)). Here plaintiffs alleged no more than

a single, non-recurring scheme to defraud a single entity. . .

in a quite narrow business context. There is no inference

that the scheme embodies a threat of continued like activity in

the future. Just as the scheme alleged in Zepkin was found

wanting in the required degree of continuity of conduct, so is

that here. The complaint fails to allege a RICO pattern of

racketeering activity.

Eastern Publishing & Advertising, Inc. v. Chesapeake Publishing &

Advertising, Inc., 831 F.2d 488, 492 (4th Cir. 1987)."” Here again,

plaintiffs’ allegations of a single scheme, over a short period of time,

~

(footnote continued from preceding page)

Given the factors that the Court considers it is not surprising that it found that

plaintiffs’ allegations here of a single victim, a single injury, and a single, short-lived

scheme with only one active perpetrator did not constitute a pattern, while finding

in other cases: fraud by several individuals and two separate entities in marketing

oil and gas limited partnerships, involving repetition of similar misrepresentations

to more than twenty investors and considerably more than two acts of mail fraud did

constitute a pattern, Barlicheck, 832 F.2d at 39; four people acting in concert over a

long period of time, participating in two separate schemes to bribe city officials, and

paying the bribes in multiple installments to assure that the municipal decisional

process was corrupted at every stage, satisfied the pattern requirement, Kearny v.

Hudson Meadows Urban Renewal Corp., 829 F.2d 1263, 1268 (3d Cir. 1987); or

defrauding numerous persons with respect tg materials and services for eighty oil

wells owned by nineteen parties and serviced by a twentieth, over a period of eleven

months as part of work done under two separate contracts pertaining to different

time periods constituted a RICO pattern. Pelro-Tech, Inc. v. Weslern Co. of North

Amenca, 824 F.2d 1349, 1355 (3d Cir. 1987).

19

See also HMK Corp. v. Walsey, 828 F.2d 1071 (4th Cir. 1987), cert. denied,

108 S. Ct. 706 (1988) (no pattern in single scheme extending more than four years

and involving numerous predicate acts aimed at corrupting political processes to

gain competitively advantageous zoning and condemnation rulings).

11

with a single perpetrator and a single victim also would fail to pass

muster as a RICO claim under the test of the Court of Appeals for

the Fourth Circuit.

Seventh Circuit. In Morgan v. Bank of Waukegan, 804 F.2d 970

(7th Cir. 1986), the Court of Appeals for the Seventh Circuit held

that an ongoing fraudulent scheme to defraud investors spanning ap-

proximately four years, involving several acts of mail fraud relating

to two separate foreclosure sales occurring two years apart and

others relating to the initial loan transaction, satisfied RICO’s pat-

tern requirement. /d. at 976. The Court adopted a case-by-case ap-

proach holding that a pattern required that the predicate acts “be

ongoing over an identified period of time so that they can fairly be

viewed as constituting separate transactions, 1.e., ‘transactions

“somewhat separated in time and place.”’” 7, at 975 (citations

omitted). Factors to be considered in the pattern analysis “include

the number and variety of predicate acts and the length of time over

which they were committed, the number of victims, the presence of

separate schemes and the occurrence of distinct injuries.” Jd. Using

the analysis employed in the Seventh Circuit, plaintiffs’ allegations

here of a single victim, a single injury, and a single, short-lived

scheme with only one active perpetrator, would fail to constitute a

pattern.” See Marks v. Pannell Kerr Forster, 811 F.2d 1108 (7th

® Plaintiffs erroneausly suggest that the Court of Appeals for the Seventh Circuit

may be shifting away from the analysis enunciated in Morgan. The Court of Ap-

peals for the Seventh Circuit, however, consistently has followed Morgan using its

case-by-case analysis and looking at the factors discussed in Morgan. See, ¢.g., Liq-

uid Air Corp. v. Rogers, 834 F.2d 1297, 1304-05 (7th Cir. 1987) (nineteen separate

acts resulting in repeated infliction of distinct economic injuries sufficient to estab-

lish pattern); Appley v. West, 832 F.2d 1021, 1027-28 (7th Cir. 1987) (predicate

acts causing discrete injuries sufficient for pattern); Tellts v. Untled Stales Fidelity

& Guaranty Co., 826 F.2d 477, 479 (7th Cir. 1986) (multiple predicate acts over a

two month period, relating to same transaction, involving single victim, and in-

flicting single injury does not establish a pattern); Marks v. Pannell Kerr Forster,

811 F.2d 1108, 1112 (7th Cir. 1987) (mailing of false tax schedules to former part-

ner on two occasions, filing false partnership tax returns, and denying former part-

ner information and documents over a period of several months and relating to a

single scheme to defraud a single victim in a “one-shot” effort to inflict a single inju-

ry do not comprise a pattern); Elltolt v. Chicago Molor Club Insurance, 809 F.2d

347, 350 (7th Cir. 1986) (several acts of mail fraud over several years in furtherance

of scheme to defraud five family members injured in car accident does not constitute

pattern because all claims arose out of same accident and same insurance policy);

Ligin Enlerpnises, Inc. v. Lee, 803 F.2d 322, 324 (7th Cir. 1986) (at least twelve

separate acts of mail fraud relating to various items in sale of business not a pattern

because all designed to defraud one victim on one occasion).

12

Cir. 1987); Tellis v. United States Fidelity & Guaranty Co., 826

F.2d 477 (7th Cir. 1986).

Ninth Circuit. The Court of Appeals for the Ninth Circuit ap-

plies a case-by-case analysis of predicate acts to determine whether

the acts were isolated or sporadic, Sun Savings & Loan Association v.

Dierdorff, 825 F.2d 187 (9th Cir. 1987), or whether there is a threat

of continuing activity. Medallion Television Enterprises, Inc. v.

SelecTV of Calijornia, Inc., 833 F.2d 1360, 1364 (9th Cir. 1987).

“{D]iscreet [sic] activity which has a distinct and easily defined be-

ginning and end, even though supported by several alleged predicate

acts of mail and wire fraud” does not constitute a pattern of racke-

teering. Jarvis v. Regan, 883 F.2d 149, 153 (9th Cir. 1987).

In Schreiber Distnbuting Co. v. Serv-Well Furniture Co., 806

F.2d 1393 (9th Cir. 1986), the Court held that, as here, a single

fraudulent purpose perpetrated on a single victim did not satisfy the

pattern requirement. Jd. at 1399. In Caltfornia Architectural Build-

ing Products v. Franciscan Ceramics, Inc., 818 F.2d 1466 (9th Cir.

1987), cert. denied, 108 S. Ct. 698, 699 (1988) the Court described

its holding in Schreiber:

we held that plaintiffs failed to state a RICO claim by alleg-

ing acts of mail or wire fraud relating to the diversion of a

single shipment of products.... That was a single fraud

perpetrated on a single victim.

Id. at 1469 (citation omitted). Applying the standard of the Court of

Appeals for the Ninth Circuit to the facts alleged by plaintiffs here:

“This case involved but a single alleged fraud with a single victim.”

SelecTV, 833 F.2d at 1364. Therefore, as there was no threat of con-

tinuing activity, there was no pattern. Jd. at 1363-64. Once again,

the allegations here of a single short-lived scheme and a single victim

would fail to measure up against the criteria established by the

Court of Appeals for the Ninth Circuit.

Tenth Circuit. Although the Court of Appeals for the Tenth Cir-

cuit has not stated what is a RICO pattern, it has applied a case-by-

case factual analysis to determine what is not a pattern. Garbade v.

Great Divide Mining and Milling Corp., 831 F.2d 212, 214 (10th

13

Cir. 1987).”' The allegations of plaintiffs’ complaint here fit well in-

to the holdings of the Court of Appeals for the Tenth Circuit:

A scheme to achieve a single discrete objective does not in and

of itself create a threat of ongoing activity, even when that

goal is pursued by multiple illegal acts, because the scheme

ends when the purpose is accomplished.

Torwest, 810 F.2d at 928-29; Garbade, 831 F.2d 214. In Torwest,

Garbade and here there is nothing from which there could be in-

ferred a continuing scheme. The continuity element is absent here.

Thus, plaintiffs allegations of a single objective to drive Marshall-

Silver out of business over short duration with a single victim and a

single perpetrator would not meet the pattern standard of the Court

of Appeals for the Tenth Circuit.

Eleventh Circuit. Although the Court of Appeals for the Eleventh

Circuit has not explicitly stated its pattern analysis, in Bank of

Amenca National Trust and Savings Ass’n v. Touche Ross & Co.,

782 F.2d 966 (11th Cir. 1986), the Court discussed the definition of

pattern provided in 18 U.S.C. §3575(e) and analyzed the number

and type of predicate acts, the scope and duration of the scheme, and

the number and type of victims. Using this analysis, the Court held

that nine separate acts of mail and wire fraud over three years, in-

volving numerous false financial statements, inducing five banks to

extend $60 million in credit to a firm on verge of bankruptcy, satis-

fied the pattern requirement. Applying this analysis to the com-

plaint here, the single victim, single injury, and single, short-lived

scheme with only one active perpetrator pled by plaintiffs does not

constitute a pattern.

District of Columbia Circuit. Although the Court of Appeals for

the District of Columbia Circuit has not faced the pattern question

squarely, it recently discussed the pattern requirement. Yellow Bus

Lines, Inc. v. Drivers, Chauffeurs & Helpers Local Union 639, No.

86-5135 (D.C. Cir. February 12, 1988) (available on LEXIS). In

Yellow Bus, the trial court had dismissed the RICO claims prior to

this Court’s decision in Sedima. Although the discussion of pattern

is fleeting (apparently the question of pattern was not raised by the

parties in either the District Court or the Court of Appeals), the

21

See Condicl v. Condtcl, 826 F.2d 923 (10th Cir. 1987); Torwest DBC, Inc. v.

Dick, 810 F.2d 925 (10th Cir. 1987).

14

Court looked to 18 U.S.C. §3575(e) for guidance and found that

multiple perpetrators committing ten predicate acts of vandalism and

intimidation against multiple victims, appeared to meet the pattern

requirement. Again, plaintiffs’ allegations of a single victim, single

injury, and a single short-lived scheme with only one active perpe-

trator would fail to establish a pattern under this test.

2. The Other Circuit Courts of Appeals

Aithough the Courts of Appeals for the Second, Fifth and Eighth

Circuits have not formally adopted the case-by-case factually orient-

ed approach of the other courts of appeals, the Court of Appeals for

the Second Circuit subsumes its inquiry of continuity plus relation-

ship into its analysis of enterprise, and the Courts of Appeals for the

Fifth and Eighth Circuits have expressed interest in abandoning

their more rigid applications in favor of the consensus analysis.

Even under their current formulations, however, each of these courts

of appeals would find that plaintiffs’ allegations are insufficient to

establish a RICO pattern.

Second Circuit. Although plaintiffs’ petition correctly cites the

“pattern” test of the Court of Appeals for the Second Circuit and

correctly notes that here substance is given to the continuity concept

through the analysis of enterprise, plaintiffs leave the mistaken im-

pression that the allegations here would meet the test in the Second

Circuit.” The Court of Appeals for the Second Circuit gives content

“to the factor of ‘continuity plus relationship’ discussed in Sedima

through [its] interpretation of the ‘enterprise’ element of RICO, 18

U.S.C. §§1961(4), 1962(c),” Beck v. Manufacturers Hanover Trust

Co., 820 F.2d 46, 51 (2d Cir. 1987), cert. denied, 108 S. Ct. 698

(1988), recognizing that this departure is one of form not substance.

Id.; United States v. Ianniello, 808 F.2d 184, 191 (2d Cir. 1986),

cert. denied, 107 S. Ct. 3230 (1987). In order to establish a RICO

enterprise a plaintiff must prove that the associates function as a

continuing operation and that the predicate acts are related to their

common purpose. /d.; Beck, 820 F.2d at 51. See also United States

v. Benevento, 836 F.2d 60, 72 (2d Cir. 1987).

As Janniello recognized, whether one looks for the requisite

continuity and relatedness by examining the pattern or the

enterprise is really a matter of form, not substance. ...A

22

Petition at 11-12 and n.7 and n8.

15

consequence of that observation for this case is that with the

elimination of Phase I from consideration, the enterprise al-

leged by plaintiffs had but one straightforward, short-lived

goal, the sale of the U.S. collateral at a reduced price. At the

conclusion of the sale, the alleged enterprise ceased function-

ing.

Beck, 820 F.2d at 51 (citation omitted). Under the approach in the

Second Circuit, therefore, where as here “the enterprise alleged by

plaintiffs had but one straightforward, short-lived goal”—putting

Marshall-Silver out of business—‘“‘[s]uch an association is not suffi-

ciently continuing to constitute an ‘enterprise’... .”” Beck, 820 F.2d

at 51. Thus, plaintiffs’ RICO claim fails under the analysis used by

the Court of Appeals for the Second Circuit.

Fifth Circut. Plaintiffs argue that R.A.G.S. Couture, Inc. v. Hy-

att, 774 F.2d 1350 (5th Cir. 1985), holding that two related predi-

cate acts sufficed to allege a RICO claim, is “({t}he leading case” in

the Fifth Circuit. Petition at 13. R.A.G.S., however, does not pre-

sent a viable conflict because it has been drained of its vitality by

subsequent decisions of the Court of Appeals for the Fifth Circuit.

R.A.G.S. was decided within three months of Sedima, and com-

pletely ignored the continuity requirement of Sedima. Ever since

R.A.G-S., the Court of Appeals for the Fifth Circuit has been mov-

ing away from it. In Smoky Greenhaw Cotton v. Mermill Lynch,

Pierce, Fenner and Smith, Inc., 785 F.2d 1274 (5th Cir.), rehearing

demed, 785 F.2d 1282 (5th Cir. 1986), the Court of Appeals direct-

ed the trial court to consider carefully on remand the facts as devel-

oped with respect to the pattern requirement as enunciated by this

Court in Sedima.

In Sedima, however, the Supreme Court appeared to chal-

lenge the lower courts to develop a more rigorous interpreta-

tion of “pattern.” 105 S. Ct. at 3285 n. 14, 3287, 87 L.Ed.2d

at 358 n. 14, 361. Responding to or anticipating this chal-

lenge, a number of lower courts have rejected the earlier

broad interpretations of pattern.... Given the present state

of the record, we are not required to pass on this issue and

express no opinion at this time. Should Greenhaw elect to

16

retry the RICO claim, the District Court will have to consid-

er carefully the meaning of the “pattern of racketeering activ-

ity” in the context of the facts actually developed

Id. at 1280-81 n.7 (citations omitted)

Moreover, Judge Politz, a member of the R.A.G.S panel, was a

member of the panel in Montesano 1 Seafirst Commercial Corp.,

818 F.2d 423 (5th Cir. 1987). one of two panels that urged that

R.A.G.S. be overruled en banc,” and wrote the opinion for the Court

in Cowan v. Corley, 814 F.2d 223 (5th Cir. 1987), one of two subse-

quent decisions that simply ignored R.A.G.S.% In Cowan, Judge

Politz wrote:

We read this language in Sedima to direct a narrower defini-

tion of pattern than had been sometimes employed. Consis-

tent therewith, the district court correctly concluded that two

illegal acts will not constitute a RICO pattern in every in-

stance.

Id. at 227 (footnote omitted).

In Montesano the Court limited R.A.G.S by applying the con-

linuity analysis ignored in R.A.G.S. to the enterprise requirement.

Montesano, 818 F.2d at 426-27. In holding that an association in

fact enterprise joined together to commit a discrete offense does not

establish a RICO enterprise the Court noted: “Proof of a ‘pattern of

racketeering activity’ does not necessarily establish an ‘enterprise’

because ‘pattern’ as defined by R.A.G.S. does not require this con-

tinuity.” Jd. at 427. Thus, these post-R.A.G.S. cases show a strong

tilt away from the doctrinaire approach of R.A.G.S. and it would

seem that plaintiffs’ allegations here of a single, straightforward.

See Montesano, 818 F.2d at 426 (urging that R.A.G_S. Couture be replaced |

test that would recognize that a scheme to achieve a single discrete objective, even

pursued by multiple illegal acts does not constitute a pattern); Croker v. Federal D:

posil Insurance Corp , 826 F.2d 347, 348 n.? (Sth Cir. 1987), petition for cer

56 U.S.L.W. 3425 (December 1. 1987

See Cowan, 814 F.2d at 226-77. Sm ky Greenhaw Collon. 785 F.2d at 1280-81

This approach is similar to that of the Court of Appeals for the Second Circ

17

short-lived goal would fail to establish a RICO enterprise under the

analysis of the Court of Appeals for the Fifth Circuit.”

Eighth Circutt. In Supenor Oil Co. v. Fulmer, 785 F.2d 252, (8th

Cir. 1986), the United States Court of Appeals for the Eighth Cir-

cuit held that continuity sufficient to establish a pattern required

multiple criminal schemes or other criminal episodes. Jd. at 257.

The Court held that several related predicate acts committed over a

substantial period of time did not constitute a pattern because “the

record reveals one isolated fraudulent scheme.” /d. Plaintiffs here

in effect concede that their complaint alleging a single scheme to put

Marshall-Silver out of business, does not satisfy the pattern test of

the Court of Appeals for the Eighth Circuit.”’

Although the Court of Appeals for the Eighth Circuit has adhered

to its bright-line, multiple scheme requirement for pattern,”* mem-

bers of the Court recently have expressed an interest in reconsidering

‘ais test in light of the evolution of pattern in other courts of appeals.

See, e.g., HJ. Inc. v. Northwestern Bell Telephone Co., 829 F.2d

648, 650, 651 (8th Cir. 1987) (McMillian, J., concurring and Gib-

son, J., concurring).

Thus, plaintiffs’ allegations would fail under any of the approach-

es developed by the courts of appeals. The Writ should be denied,

Although not faced with the question in Moniesano, the Court suggested that its

continuity analysis would not apply where the enterprise alleged was a corporation

Montesano, 818 F.2d at 427 Although the enterprise here alleged is subject to

much dispute, there is no reason to distinguish between association in fact enter-

prises and corporate enterprises. If the continuity analysis is to be conducted

through the enterprise element of RICO, the proper ing uiry is not whether the en-

terprise itself continues to exist, but rather whether the emterprise’s unlawful activi-

ty continues.

Plaintiffs mistakenly argue that Fulmer would permit Marshall-Silver to

amend its complaint to litigate unsubstantiated claims of a separate episode. As dis-

cussed above, see supra note 12, plaintiffs never sought leave to amend their com-

plaint to allege a second scheme. Thus, as in Fulme;, the complaint of “record

reveals one isolated fraudulent scherae.” 785 F.2d at 257. Moreover, the proposed

second episode would invulve allegations completely unrelated to and lacking in con-

tinuity with the scheme alleged in the complaint Thus, even the “offered” amend-

ment would fail as a matter of law See Mendel, 835 F.2d at 67 n5

See, e.g., United Slates v Kragness, 830 F.2d 842, 851 (8th Cir 1987) (multi-

ple drug importation schemes satisfies pattern requirement); Ornest v. Delaware

North Companies, Inc , 818 F.2d 651 (8th Cir 1987) (defrauding plaintiffs of com-

missions not pattern); Holmberg v. Mornsetie, 800 F.2d 205, 209-10 (8th Cir

1986), cert. denied, 107 § Ct. 1953 (1987) (acts t aiken to draw down three letters of

credit one scheme and not a pattern)

18

therefore, because this case fails to focus any conflict among the

courts of appeals.”

CONCLUSION

Plaintiffs’ petition does not raise any questions that require this

Court to settle. The Court below correctly applied the RICO statute

to the facts before it. Further, there is a consensus emerging among

the courts of appeals analyzing pattern on a case-by-case factual in-

quiry of many factors to determine continuity plus relationship.

Moreover, this case is ill-suited for addressing the question of “pat-

tern” under RICO because plaintiffs’ allegations of a single victim, a

single injury, and a single short-lived scheme with a single active

perpetrator would not establish a pattern under the standards of any

of the courts of appeals.

Thus, Respondents respectfully request that the Writ be denied.

Respectfully submitted,

Hl. ROBERT FIEBACH

(Counsel of Record)

Davip I. BOOKSPAN

Twelfth Floor Packard Building

15th and Chestnut Streets

Philadelphia, Pennsylvania 19102

(215) 977-2000

Attorneys for Respondents

OF COUNSEL:

WoLF, BLocK, SCHORR and SOLis-COHEN

Twelfth Floor Packard Building

15th and Chestnut Streets

Philadelphia, Pennsylvania 19102

(215) 977-2000 ~

29

The defective allegations of pattern is only one of the deficiences of the RICO

allegations raised below by defendants. In addition, the complaint failed to allege a

proper enterprise and did not plead actionable racketeering activity. Although these

deficiencies were not addressed by the Court of Appeals, they provide independent

bases for affirming the dismissal of the complaint. Thus, the Writ also should be

denied because the Court need not reach the question of pattern to affirm the judg-

ment of the Court of Appeals