Petition for Writ of Certiorari — Drivers, Chauffeurs & Helpers Local Union No. 639 v. Yellow Bus Lines, Inc.

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Supreme Court, U.S.

88-190 FILED

Ne. annuc

AUG 2 988

(OL, UR. |

IN THE a

Supreme Cunt of the United States

OCTOBER TERM, 1988

DRIVERS, CHAUFFEURS AND HELPERS LOCAL UNION No. 639

a/w INTERNATIONAL BROTHERHOOD OF TEAMSTERS,

CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA,

AFL-CIO, and JAMES F.. WOODWARD,

Petitioners,

YELLOW BUS LINES, INC.,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

HUGH J. BEINS

Counsel of Record

JOHN R. MOONEY

BEINS, AXELROD & OSBORNE, P.C.

2033 K Street, N.W.

Suite 300

Washington, D.C. 20006-1002

(202) 429-1900

Attorneys for Petitioners

WILSON - EPES PRINTING Co., INC. - 789-0096 - WASHINGTON, D.C. 20001

——ee

QUESTIONS PRESENTED

1. Whether a labor organization’s lawful recognitional

strike constitutes participation in the affairs of the em-

ployer as an enterprise within the meaning of the federal

RICO statute.

2. Whether four sporadic acts occurring during a labor

organization’s lawful four day recognitional strike con-

stitute a pattern of racketeering activity within the mean-

ing of the federal RICO statute.

PARTIES BELOW AND AFFILIATES OF PETITIONER

Pursuant to Supreme Court Rule 21(b), Petitioner

Local 639 states that it is affiliated with the International

Brotherhood of Teamsters, Chauffeurs, Warehousemen

and Helpers of America, AFL-CIO. In addition, the

individual owners of Respondent, Maria Triggs, Paula

Westgate and Peter McKinnon, were parties in the pro-

ceeding below.

(i)

TABLE OF CONTENTS

Page

OPINIONS BELOW l

JURISDICTION i 2

STATUTORY PROVISIONS INVOLVED 2

STATEMENT OF THE CASE 3

A. The Organizing Effort 3

B. The Litigation 4

REASONS FOR GRANTING THE WRIT )

I. A Lawful Organizational] Strike as Participation

in The Affairs of an Employer 10

Il. The Pattern of Racketeering Activity 14

CONCLUSION 19

(iii)

TABLE OF AUTHORITIES

CASES Page

Agency Holding Corp. v. Malley-Duff & Assoc.,

Inc., 483 U.S. , 97 L.Ed.2d 121 (1987) ........ 18

American Ship Building Co. v. NLRB, 380 U.S. 300

1 OD ER EERE Rae Peay Bet LAL Nt Bae RS 11

Automobile Workers v. Russell, 356 U.S. 634

CH isitisorcinttastisiniiee enemas ned 14

Rank of America National Trust & Savings Asso-

ciation v. Touche Ross & Co., 782 F.2d 966 (11th

> i RENEE EEnCERS Am ae iced 15

Barticheck v. Fidelity Union Bank:/First National

State, 832 F.2d 36 (3d Cir. 1987) .......................... 17

Beauford v. Helmsley, 843 F.2d 103 (2d Cir.

PUI cccvldicoccithan cibbantachakeacodenanation scutes ies utndcdaithianka: 16

Bonanno Linen Service v. NLRB, 454 U.S. 404

ERS eR a a cee Oo AF Re a 13

Brotherhood of Railroad Trainmen v. Jacksonville

Terminal Co., 394 U.S. 369 (1969) 00000. 1]

California Architectural Bldg. Products, Ine. v.

Franciscan Ceramics, 818 F.2d 1466 (9th Cir.

1987), cert. denied, U.S. ——, 98 L.Ed.2d

IEEE cee ee ee pS PRED 17

Carpenters v. Scott, 463 U. S. 825 (1983) _...... reco 14

Creative Bath Products, Inc. v. Connecticut Gen-

eral Life Ins. Co., 837 F.2d 561 (2d Cir. 1988) __ 16

Field v. Trump, F.2d ——, 1988 U.S. App.

Lexis 9167 (2d Cir. 1968) ....................................... 16

First National Maintenance Corp. v. NLRB, 452

ns a a 12

Flip Mortgage Corp. v. McElhone, 841 F.2d 531

I i 16

Golden State Transit Corp. v. Los Angeles, 475

a I A a 11

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

Sr a I 16

H.J., Inc. v. Northwestern Bell Telephone Com-

pany, U.S. , 99 L.Ed.2d 420 (1988),

citation below, 829 F.2d 648 (8th Cir. 1987) 10

Jones v. Lampe, 845 F.2d 755 (7th Cir. 1988) ....... 18

TABLE OF AUTHORITIES—Continued

Linn v. United Plant Guard Workers, 383 U.S. 53

CIID cercessnctsisnicnnscseisisscsnisgirtatndidoansanntinnecicnniisintasiantint

Machinists v. Wisconsin Employment Relations

Commission, 427 U.S. 132 (1976) .............. eee

Marshall-Silver Construction Co. v. Mendel, 835

eR TE, FE ae

Medical Emergency Service Associates Ss. C. %.

Foulke, 844 F.2d 391 (7th Cir. 1988) —................

Medallion Television Enterprises, Inc. v. SelecTV

of Cal., Inc., 833 F.2d 1360 (9th Cir. 1987) ........

Milk Wagon Drivers Union, Local 753 v. Meadow-

moor Dairies, 312 U.S. 287 (1941) ...... at edie

NLRB v. Brown, 380 U.S. 278 (1965) _...................

NLRB v. Erie Resistor Corp., 373 U.S. 221 (1963) ..

NLRB v. Insurance Agents’ International Union,

RO Ee ae eR eee

NLRB v. Teamsters Local 639 (Curtis Bros.), 362

8 AB RE ee ee neo ee

North Cambria Fuel Co., Inc. v. NLRB, 645 F.2d

177 (3d Cir.), cert. denied, 454 U.S. 1123

| aS SS a EE AES a SEN

Pitts v. Turner & Boisseau, Chtd., F.2d ——,

1988 U.S. App. Lexis 9108 (10th Cir. 1988) .......

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

Cir. 1985) _.... aa a ae

Republic Steel Corp. v. NLRB, 107 F.2d 472 (3d

Cir. 1939), modified, 311 U.S. 7 (1940) _.............

Saporito v. Combustion Engineering, Inc., 843 F.2d

OB OS Sr PA See oe ee eee ve

Smith v. Ayres, 845 F.2d 1360 (5th Cir. 1988)...

Smith v. Cooper/T. Smith Corp., 846 F.2d 325 (5th

cata RRR eR ae RRs Sav

Sedima S.P.R.L. v. Imrex Co., 473 US. 479

CRRITIIIED :sninaneciveinclstnanenpocnineipdunseplasstannananmssebinatid 5, 8, 14,

Steelworkers v. NLRB (Carrier Corp.), 376 U.S.

PEAS ST IELIRRS F: ecee ee OC re aI

Sun Savings & Loan Assoc. v. Dierdorff, 825 F.2d

SE Ge EDD vicincciccnncnvnpsinnpcsntiandavintabiotnbdtestsidadess

Page

16, 17

11, 13

15, 18

TABLE OF AUTHORITIES—Continued

Page

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

Re Ee ee ee ee re ae 16

Teamsters v. Morton, 377 U.S. 252 (1964)... 11

Tellis v. U.S. Fidelity & Guaranty Co., 826 F.2d

ne Gee Ge SE a oe 18

Terre Du Lac Association, Inc. v. Terre Du Lac,

Inc., 834 F.2d 148 (8th Cir. 1987) ciieecasl 16

United Construction Workers v. Laburnum Con-

struction Corp., 347 U.S. 656 (1954) . lo 14

United Energy Owners Committee, Ine. v. . United

Energy Management Systems, Inc., 837 F.2d 356

SD EINE, nphalccdlinciinanraecteistesdSitaael Tom 17

United States v. Dennis, 458 F.Supp. 197 (E. D.

Mo. 1978), aff'd, 625 F.2d 782 (8th Cir. 1980). 13

United States v. Enmons, 410 U.S. 396 (1973)... 14

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

HITE nivsstectactcsniectebutenniaiieshistaun iene eee | 16

United States v. LeRoy, 687 F.2d 610 (2d Cir.

1982), cert. denied, 459 U.S. 1174 (1983) __. 13

United States v. Scotto, 641 F.2d 47 (2d Cir. 1980),

cert, denied, 452 U.S. 961 (1981)... 12

United States v. Yanon, 800 F.2d 164 (7th Cir.

1986), cert. denied, 107 S.Ct. 930 (1987)... ion 13

Wilson v. Garcia, 471 U.S. 261 (1985) 18

STATUTES

Racketeer Influenced and Corrupt Organizations

Act, 18 U.S.C. § 1961, et seq... passim

National Labor Relations Act, as amended, 29

Te eee OO COR, oe i et er passim

In THE

Supreme Court of the United States

OCTOBER TERM, 1988

No.

DRIVERS, CHAUFFEURS AND HELPERS LOCAL UNION No. 639

a/w INTERNATIONAL BROTHERHOOD OF TEAMSTERS,

CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA,

AFL-CIO, and JAMES F. WOODWARD,

Petitioners,

YELLOw Bus LINES, INC.,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

The Petitioners, Drivers, Chauffeurs and Helpers Local

Union No. 639 (hereinafter “Local 639” or “Union”) and

James F. Woodward, respectfully petition for a Writ of

Certiorari to review the judgment of the United States

Court of Appeals for the District of Columbia Circuit

entered in this case.

OPINIONS BELOW

The decision of the United States Court of Appeals

for the District of Columbia Circuit is reported at 839

F.2d 782 and is reproduced in the Appendix hereto at

App. la-25a. The decisions of the United States District

Court for the District of Columbia are unreported and

are reproduced at App. 26a-35a; 36a-54a; 55a-65a.

JURISDICTION

The judgment of the Court of Appeals for the District

of Columbia Circuit was entered on February 12, 1988,

and is reproduced at App. 66a-67a. A timely petition for

rehearing and suggestion for rehearing en banc was filed

by the Petitioners on March 14, 1988. The court’s order

denying rehearing was entered on April 12, 1988, and

is reproduced at App. 68a. Respondent filed a petition

for rehearing on March 11, 1988. The court’s order

denying rehearing was entered on May 6, 1988, and is

reproduced at App. 73a. This Petition is timely filed

with this Court under 28 U.S.C. §2101(c). The juris-

diction of this Court is invoked under 28 U.S.C. § 1254/1).

STATUTORY PROVISIONS INVOLVED

The Racketeer Influenced and Corrupt Organizations

provisions of the United States Code (“RICO”), 18

U.S.C. § 1961, et seq., provide in relevant part:

. Section 1961(5): “pattern of racketeering activity”

requires at least two acts of racketeering activity,

one of which occurred after the effective date of this

chapter [enacted Oct. 15, 1970] and the last of which

occurred within ten years (excluding any period of

imprisonment) after the commission of a prior act

of racketeering activity; .. .

Section 1962(c): It shall be unlawful for any person

employed by or associated with any enterprise en-

gaged in, or the activities of which affect, interstate

or foreign commerce, to conduct or participate, di-

rectly or indirectly, in the conduct of such enter-

prise’s affairs through a pattern of racketeering

ated or collection of unlawful debt.

Section 7 of the National Labor Relations Act, 29 U.S.C.

§ 157, provides:

Employees shall have the right to self-organization,

to form, join, or assist labor organizations, to bar-

gain collectively through representatives of their own

choosing, and to engage in other concerted activities

for the purpose of collective bargaining or other

mutual aid or protection, and shall also have the

right to refrain from any or all of such activities

except to the extent that such right may be affected

by an agreement requiring membership in a labor

organization as a condition of employment as au-

thorized in section 8(a) (3) [29 U.S.C. § 158(a) (3) ).

Section 13 of the National Labor Relations Act, 29 U.S.C.

§ 163, provides:

Nothing in this Act [29 U.S.C. §§ 151-168], except

as specifically provided for herein, shall be construed

so as either to interfere or impede or diminish in any

way the right to strike, or to affect the limitations

or qualifications on that right.

STATEMENT OF THE CASE

A. The Organizing Effort

Yellow Bus Lines, Inc. (“Yellow Bus” or “Company

was created in 1979 and, due to undercapitalization, ex-

perienced financial difficulties from its creation through

its demise in 1984. The Company was always delinquent

in paying taxes, operated with antiquated and dilapi-

dated equipment, and paid its employees low wages and

no benefits. In response to their substandard conditions,

the employees of Yellow Bus contacted the Union in Oc-

tober 1981 to discuss organizing for the purpose of col-

lectively bargaining. ‘ App. 3a, 9a, 29a, 32a’.

After a majority of the employees (‘eight of twelve)

designated Local 639 as their collective bargaining agent,

organizer James Woodward made a demand for recog-

nition. The Company refused to recognize or bargain

with the Union. Upon learning of the Company’s refusal,

the employees met and decided to strike in support of

their demand. A four day strike commenced on Novem-

ber 9, 1981. (App. 3a, 29a, 37a).

Although the eight strikers comprised a majority of

the Company’s drivers, Yellow Bus was able to operate

throughout the four day strike. According to Yellow Bus,

the strike was marred by threats and vandalism against

Company property. (App. 3a, 29a, 37a). The property

damage occurring during this time totalled approximately

$1,800. The Company claimed that Woodward had

threatened to burn Company property on the first morn-

ing of the strike. Owner Triggs then contacted a police

officer and procured Woodward’s arrest. (App. 3a, 37a).

Soon after the strike, the Union filed a representation

petition with the National Labor Relations Board

(“NLRB” or “Board”). An election was held in De-

cember 1981 but was set aside by the Board because of

the Company’s inisconduct. The Board also issued a

Complaint against Yellow Bus charging multiple viola-

tions of Section 8(a)(1), (3) and (5) of the National

Labor Relations Act (“NLRA” or “Act’”). 29 U.S.C.

§158(a) (1), (3) and (5). In settlement of the Com-

plaint, Yellow Bus agreed to a second election and rein-

stated with full back pay an employee it had accused of

vandalism during the strike. The Union prevailed in the

December 1982 election and was certified by the Board.

Despite months of bargaining, the parties never reached

agreement on a contract.

B. The Litigation

The federal court litigation began almost one year

after the strike. Initially, Woodward filed an action for

false arrest against the Company and its owners, as well

as the District of Columbia. His suit was based on the

discovery that police officer Michael DiPalermo, who was

responsible for his arrest, was engaging in an illicit

affair with Company owner Triggs at the time of his

arrest. Yellow Bus and its owners counterclaimed for

malicious destruction of property, intentional interfer-

ence with contract, intentional infliction of emotional

harm and abuse of process. (App. 3a-4a, 30a, 37a).

In April 1983, Yellow Bus and its owners initiated

their action against the Union and Woodward. In addi-

tion to the common law tort claims, they charged Local 639

and Woodward with violations of the secondary boycott

prohibition contained in 29 U.S.C. §§ 158(b) (4) and 187,

and with violations of RICO Sections 1962(c) and (d).

In essence, they claimed that the Union was totally re-

sponsible for their business failures, including their fail-

ure to remit payroll taxes to the Internal Revenue Serv-

ice. The Union was also allegedly responsible for Mc-

Kinnon’s departure from Yellow Bus.! Inasmuch as

McKinnon was the only skilled mechanic Yellow Bus

could afford to retain, his abrupt departure caused a

rapid deterioration of the ancient equipment. (App. 4a,

9a, 32a, 38a).

In June 1984, the district court dismissed the racketeer-

ing and secondary boycott charges against Local 639.

(App. 52a-54a). The RICO claim was dismissed on the

grounds that Local 639 could not be both the requisite

enterprise and a culpable defendant under Section 1962

(c). (App. 12a, 41la-46a). In October 1984, the racket-

eering charges against Woodward were dismissed because

Yellow Bus failed to allege a racketeering injury.? (App.

12a, 56a, 58a-62a). By that time Woodward had received

some $3,000 in settlement of the false arrest suit with

1In 1982 McKinnon suffered a psychotic episode and experienced

delusions that he was the second coming of Christ. He repeatedly

threatened the other owners with physical harm and attempted to

murder co-owner Westgate, his sister. After Westgate and Triggs

refused to buy out his one-third interest in Yellow Bus, he van-

dalized one-third of the Company’s buses. (App. 32a).

2 The district court issued its ruling dismissing the RICO claim

against Woodward prior to this Court’s decision in Sedima S.P.R.L.

v. Imrex Co., 473 U.S. 479 (1985).

the District of Columbia. He then dismissed his action.

(App. 10a, 34a-35a).

Despite dismissal of all federal claims, the district

court elected to retain jurisdiction of the case. (App.

58a, 638a-65a). The trial on the remaining charges began

in February 1985. After three weeks of trial, the jury

returned a verdict in favor of Yellow Bus on three counts

with damages totalling $133,200. Yellow Bus was

awarded $1,280 against Woodward and $1,920 against

the Union for malicious destruction of property, and

$40,000 against Woodward and $60,000 against the

Union for intentional interference with contractual rela-

tions. The jury also awarded Yellow Bus and its owners

$15,000 from both Woodward and the Union for abuse

of process. (App. 2a, 4a).

In January 1986, the district court overturned all of

the jury’s findings except for the verdict concerning

Woodward’s liability for strike-related vandalism. It then

entered judgment against Woodward for approximately

$1,200. (App. 26a-27a, 35a).

In reviewing the factual background surrounding the

creation of Yellow Bus and the history of the litigation,

the trial court analyzed Yellow Bus’ claim that its busi-

ness demise was the responsibility of the Union and

Woodward. In the first instance, the district court cited

the undisputed record evidence that Yellow Bus’ diffi-

culties with the Jewish Day School, its primary if not

exclusive customer, occurred one year after the strike.

(App. 3la). The court then found that there were two

reasons for the loss of the contract: (1) the company’s

failure to properly perform under the contract, and (2)

its tax-related problems with the Internal Revenue Serv-

ice. “Neither of these arose from [the Union or Wood- :

ward’s| activities.” (App. 3la). As to the allegations

concerning employees’ post-strike activities, the court re-

lied on the owners’ admissions in concluding that there

was no evidence that the Union or Woodward bore any

“responsibility for any of the drivers’ absenteeism, tardi-

ness or maintenance problems.” (App. 32a). The district

court concluded that there was “no proof, clear or other-

wise, of a causal connection between defendants’ alleged

conduct” and the financial demise of Yellow Bus. (App.

31a).

The appellate panel substantially upheld the trial court’s

factual findings. In particular, it agreed with the lower

court that there was no proof of any connection between

the Union’s and Woodward’s activities and the loss of

Yellow Bus’ contract with the Jewish Day School. (App.

8a-9a). The panel noted that “the two factors precipitat-

ing the cancellation—Yellow Bus’ tax liabilities and in-

adequate service--had nothing to do with [Defendants’]

activities.” (App. 8a-9a). In upholding the lower court’s

decision to overturn the verdict on the issue of inter-

ference with contracts,* the court of appeals stated that:

Yellow Bus’ difficulties with the IRS pre-dated the

Local’s involvement with the company. Abundant

testimony linked the company’s poor performance to

lax employee discipline and the rapid deterioration

of the company’s stock of antiquated buses after the

departure of its only skilled mechanic in the fall of

1982. A number of Yellow Bus’ own witnesses ad-

mitted that these difficulties were not traceable to

appellees’ efforts or actions. [ (App. 9a).]

In addition to issues relating to the entry of judgment

notwithstanding the verdict, the panel reviewed the dis-

missal of the racketeering claims. Although the court of

8 The appellate court also upheld the district court’s ruling over-

turning the verdict on the abuse of process claim. (App. 9a-10a).

In addition, it reversed the trial judge’s decision to overturn the

claim against the Union concerning strike-related vandalism, hold-

ing that, under settled agency principles, the Union is liable for

Woodward’s activities. (App. 4a-8a). The Union does not contest

this reversal.

appeals agreed with the district court that the Union

could not be both the enterprise and a defendant, it

stated that Yellow Bus could properly designate itself as

the affected enterprise. (App. 12a, 17a). Moreover, the

court ruled that solely as a result of the lawful recog-

nitional strike, the Union and Woodward became suffi-

ciently related to Yellow Bus’ business for it to claim

that they were participating in its affairs within the

meaning of Section 1962(c). (App. 22a).

Finally, the panel held that the four alleged incidents

of threats or vandalism occurring during the strike con-

stituted a pattern of racketeering activity within the

statutory definition contained in Section 1961(5). (App.

lla, 28a). Acknowledging this Court’s direction that the

predicate acts comprising a pattern must demonstrate

“continuity plus relationship,” the court ruled that Yellow

Bus’ accusations of “acts of vandalism and intimidation

during a specific time period in pursuit of a unitary

goal” met the statutory standards. (App. lla). See

Sedima S.P.R.L. v. Imrex Co., 473 U.S. 479, 496 n. 14

(1985).

Judge Edwards concurred in the panel decision but

admitted to having “nagging doubts” about the holding

that the Union’s and Woodward’s organizational activities

were “affairs” of Yellow Bus. (App. 25a). Labeling

such a result “strangely at odds with certain funda-

mental precepts of labor law and collective bargaining,”

he concurred “albeit with pause.” (App. 25a).

The Union and Woodward sought rehearing and sug-

gested an en banc review by the full court of appeals.

Dissenting from the court’s denial of that petition, Judge

Sentelle, joined by Judge Starr, acknowledged the “seri-

ous errors” of the panel’s decision. In particular, the

dissent noted that the decision disturbed the precarious

balance between labor and management struck by federal

labor laws. (App. 7la). They also recognized that the

court’s interpretation of a RICO “pattern” conflicted with

— a ee ee a es ee ee ee ee

rulings in at least four other circuits. (App. 7la). Fi-

nally, the dissent warned that the practical intersection

of these two “misreadings” of RICO would serve to chill

the exercise of the right to strike protected by federal

law. (App. 7la-72a). |

REASONS FOR GRANTING THE WRIT

This case presents two significant issues warranting

this Court’s review. The first question concerns the appli-

cation of the civil racketeering provisions to the tradi-

tional and lawful organizing activities of a labor organ-

ization. The court of appeals decision held that by

engaging in a recognitional strike against Yellow Bus,

activity protected by federal labor laws, the Union par-

ticipated in the affairs of Yellow Bus under RICO, the

federal racketeering law. The decision below extended

the scope of RICO, for the first time, in a manner that

will seriously disrupt the balance between the economic

weapons available to participants in labor disputes and

impair the right to strike, the most fundamental right

accorded employees and protected by law. In converting

the Union’s entirely legal, but inherently adversarial,

conduct into participation in the “affairs” of an employer

for purposes of RICO, the court of appeals ignored the

statutory provisions protecting such activity as well as

the decisions of this Court seeking to preserve this pre-

carious balance. The unprecedented decision below to

extend RICO into an area protected by federal labor

policy raises labor law issues of far-reaching consequence

and should be addressed by this Court.

The second issue presented for review extends beyond

the field of labor relations. The court of appeals inter-

preted the pattern requirement of Section 1962(c) in

such an expansive manner as to allow a RICO plaintiff

to premise its action on minor and unrelated incidents

occurring over a brief and limited period of time in pur-

suit of a single legitimate goal. The appellate decisions

on this issue are widely divergent and the ruling below

is directly contrary to the decisions of a number of other

circuits. In view of the clear schism within the circuits,

this Court must resolve this issue so as to assure uniform

interpretation of RICO throughout the nation.*

The most compelling reason warranting review, how-

ever, results from the combined effect of the two holdings

challenged above. If the ruling below is allowed to stand,

every time two minor incidents occur in the context of a

single organizational campaign, the union and employees

will be subject to federal civil racketeering actions.

(App. 62a, 7la-72a). The chilling effect of such proposi-

tion will only serve to thwart the exercise of the rights

federal labor law seeks to protect. Moreover, in view

of the treble damages and attorneys fees available under

RICO, the decision will also encourage employers to

ignore traditional remedies in state forums and to liti-

gate strike misconduct cases in federal courts. (App.

61a-62a).

I. A Lawful Organizational Strike as Participation in

The Affairs of an Employer

The panel’s pronouncement that a union’s traditional

organizational activities can be considered an “affair”

of an employer so as to enable the employer to bring a

RICO action under Section 1962(c) has created a doc-

trine that will seriously disrupt national labor policy.

As noted by Judge Edwards, the court of appeals’ read-

ing of RICO is “strangely at odds” with fundamental

principles of labor law and collective bargaining. (App.

25a).

4On March 21, 1988, this Court granted a writ of certiorari in

H.J., Inc. v. Northwestern Bell Telephone Company, U.S. '

99 L.Ed.2d 420 (1988), citation below, 829 F.2d 648 (8th Cir.

1987). The specific question presented for review in that matter is

whether there was a pattern of racketeering under RICO.

PFE Lo in et cl aaah A cts th te AB

In enacting the National Labor Relations Act and its

progeny, Congress endeavored to establish a single body

of law that would govern disputes between labor and

management. NLRB v. Erie Resistor Corp., 373 U.S.

221, 236 (1963). At the foundation of this regulatory

scheme is the recognition of the adversarial tension and

dynamics inherent in labor management disputes. In

NLRB v. Insurance Agents’ International Union, 361

U.S. 477, 488 (1960), this Court noted that labor rela-

tions and collective bargaining “proceed from contrary,

and to an extent antagonistic viewpoints and concepts

of self interest.” Justice Brennan, writing for the Court,

added that:

[t]he presence of economic weapons in reserve, and

their actual exercise on occasion by the parties, is

part and parcel of the system that the Wagner and

Taft-Hartley Acts have recognized. [Jd. at 489.]

Recognizing the need for regulation of these available

economic measures, federal labor law has carefully pre-

served a precarious balance between those weapons avail-

able to labor organizations and to employers during a

labor dispute. American Ship Building Co. v. NLRB,

380 U.S. 300, 316-17 (1965); NLRB v. Brown, 380 U.S.

278 (1965); Golden State Transit Corp. v. Los Angeles,

475 U.S. 608, 618-20 (1986); Machinists v. Wisconsin

Employment Relations Commission, 427 U.S. 132, 143-

46 (1976); Teamsters v. Morton, 377 U.S. 252, 258-59

(1964).

Paramount among the economic weapons available to

unions and employees is the right to strike. The right

to strike is protected concerted activity under Sections

7 and 13 of the Act. 29 U.S.C. §§ 157, 163. Steelworkers

v. NLRB (Carrier Corp.), 376 U.S. 496, 499 (1964) ;

Brotherhood of Railroad Trainmen v. Jacksonville Termi-

nal Co., 394 U.S. 369, 385 (1969). Indeed the Act states

that it shall nct be construed “to interfere with or im-

pede or diminish in any way the right to strike” except

as expressly provided by law. 29 U.S.C. § 163. When

coupled with the fundamental right to organize, it be-

comes clear that an organizational strike is likewise pro-

tected under the federal labor laws. NLRB v. Teamsters

Local 639 (Curtis Bros.), 362 U.S. 274, 290-91 (1960).

The application of a civil RICO action to traditional

labor activity occurring during a legitimate labor dis-

pute provides a new and devastating weapon to em-

ployers and upsets the sensitive balance that Congress

established between labor and management. In order to

fit traditional labor activity into the RICO statutory

scheme, the panel was compelled to characterize the Un-

ion as having participated in the affairs of the struck

company and to conclude that “Yellow Bus and the union

had a full-fledged ‘business relationship.’” (App. 22a).

This statement is ironic in the context of this case, where

the strike was unsuccessful, and reflects a fundamental

misunderstanding of the generally adversarial nature of

labor relations. See First National Maintenance Corp. v.

NLRB, 452 U.S. 666, 676 (1981) (“Congress had no

expectation that the elected Union representative would

become an equal partner in the running of the business

enterprise .. .’’).°

5In support of its reasoning, the panel relied primarily upon

United States v. Scotto, 641 F.2d 47 (2d Cir. 1980), cert. denied,

452 U.S. 961 (1981). (App. 20a). That case, however, is readily

distinguished and suggests a result contrary to that reached by the

panel. Indeed, it supports the common sense finding by the district

court that Local 639 was the only appropriate enterprise under

Section 1962(c). (App. 4la-43a) In Scotto, a union president and

executive vice president were convicted of RICO violations for ob-

taining illegal payments from employers that employed the union’s

members and with which the union had a collective bargaining

relationship. The faulty parallel to the instant matter is that

Yellow Bus was an employer allegedly being intimidated by the

organizing activities. In Scotto, however, the requisite enterprise

under the Section 1962(c) charge was Local 1814 of the Interna-

tional Longshoremen’s Association, i.e., the union in which the de-

}

If a defendant pursues an illicit joint venture with

persons representing the enterprise for an unlawful pur-

pose it may well be appropriate to deem the defendant

to be participating in the enterprise’s affairs. United

States v. Yanon, 800 F.2d 164 (7th Cir. 1986), cert.

denied, 107 S.Ct. 930 (1987). Union activity such as

Local 639’s and Woodward’s, however, has an object that

is intrinsically antagonistic to the employer as well as

lawful and legitimate—the organization of the company’s

employees. There is no criminal or collusive element in-

herent in a union’s attempt to organize an employer nor

ean the goal of a collective bargaining relationship be

reasonably deemed a “full-fledged business relationship.”

The tense reality of the picket line has been long rec-

ognized by this Court. A strike can be a heated affair, a

“brute contest of economic power,” in which the avail-

ability of strong economic weapons is the keystone to

effective collective bargaining and ultimately to labor

peace. NLRB v. Insurance Agents’ International Union,

361 U.S. at 489. See also Bonanno Linen Service v.

NLRB, 454 U.S. 404 (1982). Reckless and imprecatory

language and overzealous conduct that in other contexts

might be subject to sanction is a natural outgrowth of

the intense feelings that develop in labor disputes and a

reality of industrial life. Linn v. United Plant Guard

Workers, 383 U.S. 53, 58 (1966); Milk Wagon Drivers

Union, Local 753 v. Meadowmoor Dairies, 312 U.S. 287,

293 (1941) ; Republic Steel Corp. v. NLRB, 107 F.2d 472,

479 (3d Cir. 1939), modified, 311 U.S. 7 (1940). Minor

scuffles, abusive language, and annoying incidents of mu-

fendants held positions. It was the union’s affairs, not the em-

ployers’, with which the defendants were associated and the union’s

affairs that they conducted through a pattern of racketeering. See

also United States v. LeRoy, 687 F.2d 610, 616-617 (2d Cir. 1982),

cert. denied, 459 U.S. 1174 (1983); United States v. Dennis, 458

F.Supp. 197 (E.D. Mo. 1978), aff’d on other grounds, 625 F.2d 782

(8th Cir. 1980).

tual harassment are commonplace. North Cambria Fuel

Co., Inc. v. NLRB, 645 F.2d 177, 181 (3d Cir.), cert.

denied, 454 U.S. 1123 (1981). Even incidents of overt

violence have been examined in light of the purposes

underlying the federal labor statutes and been found to

be beyond the reach of other federal statutory schemes.

United States v. Enmons, 410 U.S. 396 (1973) (violence

during labor dispute to induce employer’s agreement to

legitimate collective bargaining demands is not extortion-

ate nor actionable under the Hobbs Act, 18 U.S.C. § 1951).

See also Carpenters v. Scott, 463 U.S. 825, 838-39 (1983).

The necessarily antagonistic nature of any traditional

labor strike provides both the environment and the in-

centive for the employer to retaliate against the union

by filing a RICO action. If the ruling below is allowed to

stand, RICO-based suits will become part and parcel of

every strike.*®

In view of the above, and the “likely, if not inevit-

abl[e]” recurrence of such situations (App. 71a), this

Court must intervene in order to preserve the balance

that Congress established between labor and management

as well as to protect the rights accorded unions and em-

ployees under federal labor law.

II. The Pattern of Racketeering Activity

In order to establish a claim under Section 1962/c),

a plaintiff must establish that the affairs of the enter-

prise were conducted “through a pattern of racketeering

activity.” Section 1961(5). In Sedima S.P.R.L. v. Imrex

6 Certain types of conduct including allegations of threats, vio-

lence and property damage are so deeply rooted in local feeling and

responsibility that they are properly left to the states for adjudi-

cation. See Automobile Workers v. Russell, 356 U.S. 634 (1958):

United Construction Workers v. Laburnum Construction Corp.,

347 U.S. 656 (1954). Because of the treble damages and attorneys

fees available under RICO (18 U.S.C. § 1964(c)), the predictable

effect of the panel’s opinion will be to federalize these traditionally

local actions.

Co., Ine., 473 U.S. 479 (1985), this Court suggested that

the “‘extraordinary” uses to which civil RICO had been

applied were due in part to “the failure of Congress and

the courts to develop a meaningful concept of pattern.”

Id. at 500. In footnote 14, the Court reviewed the Con-

gressional directive that a pattern is not properly com-

prised of sporadic and isolated events but must evidence

a “continuity plus relationship.” Jd. at 496, n. 14. The

dissent also stated that the statutory provision “may

logically be interpreted as meaning that the presence

of the predicate acts is only the beginning: something

_ more is required for a pattern to be proved.” Jd. at 527.

Since this Court’s 1985 pronouncement, the lower courts

have struggled to apply the “continuity plus relation-

ship” language to civil RICO actions. The result, how-

ever, has been a confusing and inconsistent assortment

of decisions. There currently exist among the circuits

variant interpretations of this language resulting in con-

tradictory rulings. The interpretation of the “pattern”

requirement adopted by the court below squarely con-

flicts with the decisions of several courts.

In the instant case, the panel joined those circuits

adopting an expansive definition of pattern. The ap-

pellate panel stated that four incidents occurring during

the four day strike in pursuit of union recognition prop-

erly satisfied the “continuity plus relationship” test.

(App. lla, 23a). Thus the District of Columbia Circuit

appears to have adopted the liberal approach of the Fifth

and Eleventh Circuits. See R.A.G.S. Couture v. Hyatt,

774 F.2d 1350 (5th Cir. 1985) (two predicate acts alone

suffice to establish a pattern); Smith v. Ayres, 845 F.2d

1360, 1365 n. 18 (5th Cir. 1988) (despite substantial

authority to the contrary the panel is bound by R.A.G.S.) ;

Smith v. Cooper/T. Smith Corp., 846 F.2d 325, 329

(5th Cir. 1988); Bank of America National Trust &

Savings Association v. Touche Ross & Co., 782 F.2d 966

(11th Cir. 1986).

In stark contrast to the liberal approach, the Fourth,

Eighth and Tenth Circuits have relied on Sedima to hold

that the mere existence of several predicate acts does not

establish a pattern. Flip Mortgage Corp. v. McElhone,

841 F.2d 531, 588 (4th Cir. 1988) (acknowledging split

in the circuits and holding that a single scheme to de-

fraud does not establish pattern); International Data

Bank, Ltd. v. Zepkin, 812 F.2d 149, 155 (4th Cir. 1987) ;

Pitts v. Turner & Boisseau, Chtd, —— F.2d ——, 1988

U.S. App. Lexis 9108, 6 (10th Cir. 1988) (requirement

of separate schemes); Superior Oil Co. v. Fulmer, 785

F.2d 252, 257 (8th Cir. 1986) (where evidence reveals

one scheme, no pattern exists regardless of the number of

predicate acts involved in that scheme); Terre Du Lac

Association, Inc. v. Terre Du Lac, Inc., 834 F.2d 148,

149-50 (8th Cir. 1987); United States v. Kragness, 830

F.2d 842, 858 (8th Cir. 1987).

The other circuits have also grappled with the proper

scope of the pattern requirement. In Beauford v. Helms-

ley, 843 F.2d 103, 108-110 (2d Cir. 1988), and Creative

Bath Products, Inc. v. Connecticut General Life Ins. Co.,

837 F.2d 561, 564 (2d Cir. 1988), the Second Circuit has

relied on the fact that the alleged schemes were carried

out in pursuit of a single short-lived goal and therefore

ruled that they did not satisfy the continuity require-

ment.’ Obviously, if this reasoning were applied by the

District of Columbia Circuit, the RICO allegations

against Local 639 and Woodward would have been dis-

missed.

In Marshall-Silver Construction Co. v. Mendel, 835 F.2d

63, 66-67 (3d Cir. 1987), the Third Circuit held that

7 The Second Circuit has recognized that it suffers from an in-

ternal split and has granted a petition for rehearing en banc in

Creative Bath Products, Inc., supra. Nevertheless, the court con-

tinues to pursue the proper scope of the pattern requirement. See

Field v. Trump, ——- F.2d ——. 1988 U.S. App. Lexis 9167, 35-36

(2d Cir. 1988).

RICO is aimed at the eradication of activity that “be-

cause of its organization, duration, and objective poses,

or during its existence posed, a threat of serious injuries

over a significant period of time.” Because the activity

in that case invoived a single victim with a single injury,

and involved a single brief scheme with a small number

of perpetrators, the court upheld dismissal of the RICO

claim. Jd. at 67. Once again, if the facts of the instaat

case were evaluated under that standard, Yellow Bus’

RICO claims would have been properly dismissed. Despite

the Marshall-Silver decision, the Third Circuit has con-

tinued its efforts to decipher the riddle of what consti-

tutes a pattern. See Saporito v. Combustion Engineering,

Inec., 843 F.2d 666, 676-77 (3d Cir. 1988); Barticheck v.

Fidelity Union Bank/First National State, 832 F.2d 36,

40 (3d Cir. 1987).

Similarly, the Ninth Circuit has ruled that civil RICO

does not reach a single scheme affecting a single victim

that terminates on a date certain. Medallion Television

Enterprises, Inc. v. SelecTV of Cal., Inc., 833 F.2d 1360,

1363-64 (9th Cir. 1987); California Architectural Bldg.

Products, Ine. v. Franciscan Ceramics, 818 F.2d 1466

(9th Cir. 1987), cert. denied, _— U.S. ——, 98 L.Ed.2d

650 (1988) (a single fraud perpetrated upon a single

victim is not sufficiently continuous). Cf. Sun Savings &

Loan Assoc. v. Dierdorff, 825 F.2d 187, 193-94 (9th Cir.

1987) (separate schemes are not required, only acts that

are not sporadic or isolated). The only “scheme” alleged

in the case sub judice was the effort to obtain recognition

and the only alleged “victim” was Yellow Bus. Moreover,

the “scheme” terminated upon cessation of the four day

strike. Under this analysis, the action would have been

dismissed. Compare United Energy Owners Committee,

Inc. v. United Energy Management Systems, Inc., 837

F.2d 356, 360-61 (9th Cir. 1988) ( multiple acts of fraud

involving multiple victims over more than one year es-

tablishes sufficient pattern).

Finally, the Seventh Circuit has taken the approach

that the question of whether a pattern exists is. “a fact

specific question encompassing many relevant factors.”

Jones v. Lampe, 845 F.2d 755, 757 (7th Cir. 1988). In-

cluded among the factors are the number and variety of

predicate acts, the number of victims, the presence of

separate schemes and the occurrence of distinct injuries.

Id. Relying on these factors, the Seventh Circuit has

held that multiple predicate acts in furtherance of a sin-

gle scheme involving one victim does not constitute a

pattern of racketeering. Tellis v. U.S. Fidelity & Guar-

anty Co., 826 F.2d 477, 478 (7th Cir. 1987). See also

Medical Emergency Service Associates S.C. v. Foulke,

844 F.2d 391 (7th Cir. 1988) (several predicate acts re-

lating to single victim with single injury occurring

within two month period do not constitute a pattern).

As previously recognized by this Court, “the heart of

any RICO complaint is the allegation of a pattern of

racketeering.” Agency Holding Corp. v. Malley-Duff &

Assoc., Inc., 483 U.S. , 97 L.Ed.2d 121, 182 (1987)

(emphasis in original). In Agency Holding Corp., this

Court recognized that a uniform limitations period was

required “to avoid intolerable ‘uncertainty and time con-

suming litigation.’” Jd. at 129, citing Wilson v. Garcia,

471 U.S. 261, 272 (1985). Accordingly, here as in

Sedima, supra, this Court should grant certiorari because

of ‘the variety of approaches taken by the lower courts

and the importance of the issues.” 473 U.S. at 486. Pe-

titioners submit that these considerations must apply to

the instant matter and that the conflicts now existing on

this issue lying at the heart of every RICO action must

be resolved.

CONCLUSION

For the foregoing reasons, the petition for a writ

of certiorari should be granted.

Respectfully submitted,

HUGH J. BEINS

Counsel of Record

JOHN R. MOONEY

BEINS, AXELROD & OSBORNE, P.C.

2033 K Street, N.W.

Suite 300

Washington, D.C. 20006-1002

(202) 429-1900

Attorneys for Petitioners

August 1988

APPENDIX

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

No. 86-5135

YELLOW Bus LINES, INC.,

Appellant

DRIVERS, CHAUFFEURS & HELPERS

LOCAL UNION 639, et al.

No. 86-5136

JAMES F. WOODWARD

MICHAEL DIPALERMO, et al.

MARIA TRIGGS, Secretary/Treasurer,

YELLOW Bus LINES, et al.,

Appellants

Appeals from the United States District Court

for the District of Columbia

(Civil Action Nos. 83-01232 and 82-03154)

Argued September 15, 1987

Decided February 12, 1988

Thomas G. Corcoran, Jr. for appellant.

John R. Mooney, with whom Hugh J. Beins was on

the brief for appellees.

Before: WALD, Chief Judge, MIkvA and EDWARDS,

Circuit Judges.

Opinion for the Court filed by Circuit Judge MIKVA.

Concurring statement filed by Circutt Judge EDWARDS.

Mikva, Circuit Judge: This litigation arises from

events surrounding a four day strike by employees of

Yellow Bus Lines, Inc. for recognition by the company

of a union local, Drivers, Chauffers, and Helpers Local

639 (“Local 639” or “the Local”), as their collective

bargaining representative. Believing that the union had

engaged in a campaign of violence to sabotage the com-

pany and obtain labor concessions, Yellow Bus and three

of its officers (“Yellow Bus” or “appellants’”) filed claims

and counterclaims in these consolidated cases against the

Local and its business agent and trustee James Wood-

ward, accusing them of engaging in a “pattern of rack-

eteering activity” in violation of § 1962 (c) and (d) of

the Racketeer Influenced and Corrupt Organizations Act

(RICO), 18 U.S.C. §§ 1961 et seg. (1982) and alleging

violations of tort law.

After the judge dismissed the RICO charges, the re-

maining counts were tried before a jury. The jury

awarded damages against the Local and Woodward on

three tort claims. Yellow Bus appeals from the district

court judge’s partial grant of appellees’ motion for judg-

ment notwithstanding the verdict (JNOV) setting aside

each verdict except that against Woodward for malicious

destruction of property. Appellants also challenge vari-

ous pre-trial orders, including denial of leave to amend

the RICO complaint and dismissal of the RICO counts.

Because we find that the RICO dismissal and the de-

nial of leave to amend were error, we reverse and remand

on that ground. For reasons set forth below, we also

vacate the judgment notwithstanding the verdict against

the Local on malicious destruction of property. In all

other respects, we affirm the judgment of the district

court.

I. BACKGROUND

In 1979, appellants Maria Triggs, Paula Westgate, and

her brother Peter McKinnon created Yellow Bus Lines,

Inc., a Virginia corporation located and operated in the

District of Columbia. In October 1981, a number of Yel-

low bus employees met with Local 639 business director

Woodward for the purpose of organizing the company

employees. After Yellow Bus refused to recognize and

bargain with the union, a strike was called on November

9, 1981.

According to Yellow Bus, the strike was marred by

threats and violence against company property by Wood-

ward and other strikers. As a result of one incident in

which Woodward allegedly threatened to “burn the com-

pany buses”, Ms. Triggs called the police. Woodward was

briefly arrested and charged in a three-count felony in-

dictment for threatening to damage the buses.

Proceedings in the court below were initiated one year

after the strike, when Woodward filed suit on November

4, 1982 against District of Columbia police officer

Michael DiPalermo, the city, and three officers of Yellow

Bus alleging abuse of process and false arrest. The de-

fendants in that action, Woodward v. DiPalmero, et al.,

Civ. No. 82-3154, then counterclaimed, alleging malicious

destruction of property and intentional interference with

contract as well as intentional infliction of emotional dis-

tress. They also charged Woodward and the Local with

abuse of process, claiming that Woodward filed his false

arrest claim to discover information essential to his crim-

inal defense and to induce Yellow Bus to agree to the

Local’s proposed contract terms. In April 1983, Yellow

Bus filed additional charges against Woodward and the

Local alleging violations of RICO, 18 U.S.C. §§ 1962(c)

and (d). By October 1984, the district court had dis-

missed all the federal claims, but elected to retain juris-

diction over the tort claims. In May 1984, Woodward’s

false arrest claim was dismissed after Woodward reached

a settlement with the District of Columbia. The trial on

the remaining counts began in February 1985, and the

jury returned a verdict in favor of appellants on three

counts, awarding a total of $133,200. Yellow Bus was

awarded $1,280 against Woodward and $1,920 against

Local 639 for malicious destruction of property, and

$40,000 against Woodward and $60,000 against the Local

for intentional interference with contractual relations.

The jury also awarded the company and its three officers

$15,000 against Woodward and $15,000 against the Local

for abuse of process. In March 1985, the court entered

judgment for these amounts. In January 1986, the court

partially granted appellees’ JNOV motion and set aside

all except the $1,280 judgment against Woodward for

malicious destruction of property.

II. JNOV oN MALICIOUS DESTRUCTION OF PROPERTY

In support of its claim of malicious destruction, Yellow

Bus introduced testimony of damage to vehicles observed

by employees at the strike site. Although no employee

saw Woodward participate directly in vandalism, the

court found that “circumstantial” evidence linking Wood-

ward to property damage, coupled with threats made by

Woodward and other strikers, was sufficient to support

the jury determination that Woodward was liable for

the property damage. The court decided, however, that

the evidence against the Local was insufficient to support

liability under § 6 of the Norris-LaGuardia Act, which

requires clear proof of union responsibility for the acts

of its agents.

Section 6 of the Norris-LaGuardia Act states that

No officer or member of any association or organ-

ization, and no association or organization partici-

pating or interested in a labor dispute shall be held

responsible or liable in any court of the United States

for the unlawful acts of individual officers, members,

or agents, except upon clear proof of actual partici-

pation in, or actual authorization of, such acts, or of

ratification of such acts after actual knowledge

thereof.

29 U.S.C. §106 (1982). Section 6 applies in “federal

court adjudications of state tort claims arising out of

labor disputes.” United Mine Workers v. Gibbs, 383 U.S.

715, 737 (1965). See also Ramsey v. United Mine Work-

ers, 401 U.S. 302, 310 (1970). In order to support a

grant of the motion for JNOV, the trial judge must

conclude that a reasonable jury could not have found

“clear proof” of the union’s participation or authoriza-

tion. See Anderson v. Liberty Lobby, Inc. 106 S. Ct.

2505, 2512-13 (1986). After reviewing the record and

taking all justifiable inferences in favor of appellants,

we conclude that a reasonable jury could have found

“clear proof” of union ratification or authorization of

Woodward’s actions, and that the damage award against

the Local on this count should not have been set aside.

In evaluating whether Local 639 “ratified” the de-

structive acts ascribed to Woodward “after actual knowl-

edge” of their perpetration, the district court failed to

take into account a crucial piece of evidence concern-

ing the Local’s awareness of the events which transpired

during the Yellow Bus strike. At trial, counsel for Yel-

low Bus introduced without objection a letter sent by

Yellow Bus and received by Mr. George, President of

Teamsters Local 639, on November 10, 1981. This letter

described with particularity “numerous incidents of

threats, violence, property damage, and verbal abuse”

by Woodward and other strike participants. Following

this communication, the record shows that business con-

tinued as usual at the Yellow Bus strike and Mr. Wood-

ward remained on-site as the Local’s man in charge.

There is nothing in the record to indicate that the union

took any action to investigate the allegations or to curb

any excesses of Woodward or the strikers.

In the circumstances of this case, the combination of

the Local’s notification of events early in the strike, cou-

pled with the complete failure to act on that knowledge,

fulfills the requirement of “proof, either that the union

approved the violence which occurred, or that it partici-

pated actively or by knowing tolerance in further acts

which were in themselves actionable under state law.”

Gibbs, 383 U.S. at 739. A union may “ratify” or “au-

thorize” without going so far as to openly encourage or

embrace the tactics of its official representative. Section

6 does not impose a requirement of such formal authori-

zation by the union. See James R. Snyder Co. v. Edward

Rose & Sons., Inc., 546 F.2d 206 (6th Cir. 1976). Rather,

“proof of authorization or ratification can be based upon

circumstantial evidence, but that proof, although circum-

stantial, must nevertheless be clear.” Jd. at 209. From

the Local’s apparent lack of concern with the violence

brought to its attention, the jury plausibly could conclude

that the Local “knowingly tolerated” this state of affairs.

No more is required to support a finding of ratification.

In short, there was clear proof that the other officials at

the Local ratified by knowing tolerance those acts of vio-

lence in which Woodward was shown to have partici-

pated.

Moreover, specific proof of “knowing tolerance” by

other union officials was not required in order to hold the

Local directly responsible for Woodward’s actions because

Woodward was clothed with plenary authority to direct

the strike on behalf of the union. Section 6 was meant

to “change[] the substantive law of agency,” Brother-

hood of Carpenters v. United States, 330 U.S. 395, 403

(1946), by nullifying the doctrine of respondeat superior

in those cases where a union member or official has not

been charged with directing union activities. That pro-

vision does not serve to absolve a union of ordinary re-

sponsibility for actions undertaken by officers exercising

authoritative responsibility. For example, in Charles D.

Bonanno Linen Service, Inc. v. McCarthy, 708 F.2d 1,

11 (1st Cir.), cert. denied, 464 U.S. 936 (1983), evidence

that a union representative “with the pc wer and author-

ity” to orchestrate a strike and discipline participants

took no action to curb strike violence was held sufficient

to establish liability of a union local. As the Bonanno

court observed, “the Supreme Court has held that the

union need do no more than authorize an agent’s general

activity.” Id. at 12 (citing Brotherhood of Carpenters v.

United States, 330 U.S. at 410 (“The grant of author-

ity to an officer of a union to negotiate agreements with

employers * * * may well be sufficient to make the union

liable.”’) )

As the union’s authorized representative, Woodward

was empowered to conduct the union’s business at Yellow

Bus. Since Woodward was the designated union presence

on the site authorized to run the strike, his acts can be

considered the union’s acts for which the union is respon-

sible. See United Mine Workers of America v. Meadow

Creek Coal Co., 263 F.2d 52, 63 (6th Cir.), cert. denied,

359 U.S. 1013 (1959) (high union official in charge of

a strike and directly involved in its unlawful activity

“was high enough in the hierarchy * * * to render [the]

organization liable for the consequences of conduct of its

members under his general leadership’). See also

Kayser-Roth Corp. v. Textile Workers Union of America,

479 F.2d 524, 527-28 (6th Cir.), cert. denied, 414 U.S.

976 (1973) (acts of high officials in violation of state

law deemed “participation” for purposes of union liabil-

ity under § 6).

In sum, “[{i]f a union delegates to an agent unre-

stricted authority going beyond the norms of union con-

duct, §6 does not immunize it from liability for his

illegal acts. Similarly, if it continues him in a previous

position of high responsibility after knowledge of his

illegal activities, § 6 affords no shelter.” Harlem River

Consumers Coop., Inc. v. Associated Grocers of Harlem,

Inc., 450 F.2d 271, 273-274 (2d Cir. 1971) (citing Car-

penters, 330 U.S. at 409-410). The record supports that

Local 639 both knowingly tolerated Woodward’s acts and

fully authorized Woodward to act. In either case, the

jury verdict against the union comports with statutory

requirements and should be upheld.

III. JNOV on ABUSE OF PROCESS AND INTENTIONAL

INTERFERENCE WITH CONTRACT

The jury awarded a total of $100,000 against Wood-

ward and the Local for intentional interference with a

contract between Yellow Bus and the Charles Smith Jew-

ish Day School (“JDS”). The district court set aside

this verdict, finding that Yellow Bus had failed to offer

proof, “clear or otherwise”, of causal connection between

appellees’ alleged conduct and the decision by JDS to

terminate the contract. See Tuxedo Contractors, Inc.

v. Swindell-Dressler Co., 613 F.2d 1159, 1160 (D.C. Cir.

1979) (complainant must prove “contract, knowledge of

contract, intentional procurement of its breach by defend-

ant, and damages resulting from breach”). We agree

with the district court and uphold its judgment notwith-

standing the verdict.

First, Yellow Bus offered no evidence whatsoever of

the Local’s intent to procure a breach of this particular

contract. Additionally, Yellow Bus completely failed to

establish any link between the damage suffered during

the strike and the subsequent cancellation of the JDS

contract over one year later. The two factors precip-

itating the cancellation by JDS—Yellow Bus’ tax lia-

bilities and inadequate service—had nothing to do with

appellees’ activities. Yellow Bus’ difficulties with the

IRS pre-dated the Local’s involvement with the company.

Abundant testimony linked the company’s poor perform-

ance to lax employee discipline and the rapid deteriora-

tion of the company’s stock of antiquated buses after the

departure of its only skilled mechanic in the fall of 1982.

A number of Yellow Bus’ own witnesses admitted that

these difficulties were not traceable to appellees’ efforts

or action. Since appellants failed to offer the most ele-

mentary evidence of any causal connection between the

cancellation and the appellees’ malefaction, the motion

for a judgment notwithstanding the verdict was appro-

priately granted.

Appellants’ objection to the grant of JNOV on abuse

of process also has no merit. To prevail on abuse of

process, a plaintiff must demonstrate that process is be-

ing used “to compel the party affected by it to do some

collateral thing which he could not legally and regularly

be compelled to do.” Hall v. Hollywood Credit Clothing

Co., 147 A.2d 866, 868 (D.C. App. 1959). See also Ja-

cobson v. Thrifty Paper Boxes, Inc., 230 A.2d 710, 711

(D.C. App. 1967) (citing 1 Am. Jur. 2d Abuse of Proc-

ess § 4 (1962)). Plaintiff must demonstrate not only ul-

terior motive, but success in achieving illegitimate ends

with resulting injury. Morowitz v. Marvel, 423 A.2d 196,

198 (D.C. App. 1980) (“[I]n addition to ulterior motive,

one must allege and prove that there has been a perver-

sion of the judicial process and achievement of some end

not contemplated in the regular prosecution of the

charge.”’) ; see also Hall v. Hollywood Credit Clothing Co..,

147 A.2d at 868; McCarthy v. Kleindienst, 741 F.2d

1406, 1414 (D.C. Cir. 1984).

Appellants’ abuse of process claim fails because one of

the alleged ulterior aims is implausible, and the other was

not achieved. The appellants claimed that Woodward

sought to discover information vital to his criminal de-

10a

fense and to coerce the company to make labor conces-

sions. However, the fact that Woodward’s lawyer did not

commence discovery until after Woodward’s criminal

charges were dropped conclusively discredits discovery as

an “ulterior motive’. As for the coercive contract claim,

Woodward responded to the company’s resistance by

abandoning the “collateral” demand that Yellow Bus

agree to sign a collective bargaining agreement as a con-

dition of settlement of Woodward’s lawsuit. He eventu-

ally agreed to drop the action in exchange for $3,000.

However, even if Woodward had initially commenced

legal action to induce Yellow Bus to acquiesce in his la-

bor demands, appellants suffered no actionable injury be-

cause Woodward did not accomplish this impermissible

purpose. See Morowitz v. Marvel, 423 A.2d at 198

(“TWlithout more, [the] proffer that [defendant] filed

[a claim] with the ulterior motive of coercing settlement

is deficient.”) Moreover, the procurement of an “ordi-

nary” settlement will not ground abuse of process; the

settlement must accomplish some outrageous end and

represent a “perversion” of the judicial process. See 2d.

In sum, plaintiffs have failed to make out essential ele-

ments of their abuse of process claim. The district court’s

decision to set aside the jury award for abuse of process

was appropriate.

IV. RICO COMPLAINT

In its original complaint, Yellow Bus alleged that the

conduct of Woodward and the Local violated 18 U.S.C.

§§ 1962(c) and (d) of the Racketeer Influenced and Cor-

rupt Organizations Act and requested treble damages

under 18 U.S.C. §1964(c). Section 1962(c) makes it

“unlawful for any person employed by or associated with

any enterprise engaged in * * * interstate commerce, to

conduct or participate, directly or indirectly, in the con-

duct of such enterprise’s affairs through a pattern of

racketeering activity.” Section 1962(d) prohibits any

conspiracy to violate subsection (c). Section 1961 (1)

lla

and (5) of the statute define “racketeering activity” to

include acts or threats involving murder, arson, and ex-

tortion punishable under state law. A “pattern” of such

activity requires at least two acts occurring within ten

years. 18 U.S.C. §1961(4). The predicate acts which

combine to produce the pattern of illegal activity must be

marked by the factors of “continuity plus relationship.”

S. Rep. No. 617, 91st Cong., 2d Sess. 158 (1969). See

also Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 496

n.14 (1985).

Yellow Bus listed ten predicate acts allegedly per-

formed by the Local and Woodward in violation of D.C.

and Maryland laws punishing extortion, including threats

against property and threats of bodily harm. A careful

examination of the pleadings reveals that five of the

counts involve violence against property or persons un-

connected with Yellow Bus or its labor organizing ef-

fort. These allegations are not properly part of Yellow

Bus’ § 1962(c) RICO claim against appellees. Of the

remaining counts, four allege direct threats to Yellow

Bus property or employees which qualify as offenses

listed in the §1961(1) definition of racketeering ac-

tivity. Additionally, these predicate acts appear to ful-

fill the requirement for a “pattern”—‘“continuity plus re-

lationship”—as stated in the Senate Report. The defini-

tion of “pattern” of conduct, provided by Congress later

in the same bill, indicates that this term embraces “crim-

inal acts that have the same or similar purposes, results,

participants, victims, or methods of commission * * *

and are not isolated events.” 18 U.S.C. § 3575(e) (1982).

See also Sedima, 473 U.S. at 496 n.14. Here, appellees

are accused of engaging in acts of vandalism and intimi-

dation during a specific time period in pursuit of a uni-

tary goal. We believe this scenario meets the statutory

requirements for a “pattern of racketeering activity.”

Nevertheless, the district court, in two separate orders,

dismissed the RICO complaints against appellees. The

12a

count against the Local was dismissed because it desig-

nated the Local as both the RICO “person” and the RICO

“enterprise”, violating the requirement that these be sep-

arate and distinct entities under § 1962(c). The court

refused to allow the appellants to cure this deficiency by

amending the complaint to name Yellow Bus as the “en-

terprise”, reasoning that the amended complaint would

not state a valid RICO claim because the Local did

not fulfill the statutory requirement of participation in

the conduct of Yellow Bus’ affairs. The court also indi-

cated that the motion had “come too late.” In a second

order dismissing the RICO complaint against Woodward,

the court relied on the now repudiated requirement of

demonstrating a distinct “RICO injury’—injury differ-

ent in kind from that occurring as a result of the predi-

cate acts themselves. See Sedima, S.P.R.L. v. Imrex Co.,

741 F.2d 482 (2d Cir. 1984), rev’d, 473 U.S. 479 (1985).

While the trial in this case was proceeding, the Su-

preme Court reversed the Court of Appeals decision in

Sedima by holding that RICO required no allegation of

a separate “racketeering injury”. See Sedima, 473 U.S.

at 493-500. On the basis of this clarification, we conclude

that the district court erred in dismissing the RICO

cause of action against Woodward. Our conclusion that

the dismissal of the RICO count against the Local was

error requires more extensive analysis. At the outset,

we agree with the district court that the designation of

the Local as both the “enterprise” and the defendant

“person” does not comport with statutory language or

design. In refusing to permit amendment of the com-

plaint because of the timing of the request, however, the

court abused its discretion. A complaint amended to name

Yellow Bus as the RICO “enterprise” would state a cog-

nizable claim under §1962(c), and that amendment

should be permitted.

13a

A. The “person” and the “enterprise” under § 1962(c)

Section 1962(c) is directed at “any person employed

by or associated with any enterprise” who participates in

the enterprise’s affairs by racketeering. (emphasis

added). All but one of the Courts of Appeals considering

the question have required that the “person” and “enter-

prise” be different entities under this section. See, e.g.

Schofield v. First Commodity Corp., 793 F.2d 28, 30-31

(1st Cir. 1986); Bennett v. U.S. Trust Co., 770 F.2d

308, 315 (2d Cir.), cert. denied, 474 U.S. 1058 (1986) ;

Haroco, Inc. v. American Nat’l Bank & Trust Co., 747

F.2d 384, 399-402 (7th Cir. 1984) ; but see United States

v. Hartley, 678 F.2d 961, 989-90 (11th Cir. 1982) ; Ber-

gen v. Rothschild, 648 F. Supp. 582, 589 (D.D.C. 1986)

(allowing identity of person and enterprise partnership).

See generally, Enterprise: Relation of Liable Person, 5

RICO L. Rep. 364-365 (1987).

In perceiving and justifying this requirement, the

courts rely on both the language of the provision and the

policy behind the act. Logic alone dictates that one entity

may not serve as the enterprise and the person asso-

ciated with it because, as Judge Posner of the Seventh

Circuit has stated, “you cannot associate with yourself.”

McCullough v. Suter, 757 F.2d 142, 144 (7th Cir. 1985).

The majority rule also reflects Congress’ apparent deci-

sion in § 1962(c) to target criminal activity of a particu-

lar kind—the exploitation and appropriation of legiti-

mate business by corrupt individuals. Congress was

aware that organized crime often operates by infiltration

of legitimate enterprises through a pattern of racketeer-

ing activity. See S. Rep. No. 617, 91st Cong., 1st Sess.

76-78 (1969). In considering the intention of the pro-

visions’ drafters, courts have reasoned that section

1962(c) was intended to punish the person who conducts

the affairs of an otherwise legitimate business in an il-

legal manner. “Such a distinction focuses the section on

the culpable party and recognizes that the enterprise it-

14a

self is often a passive instrument or victim of the rack-

eteering activity.” Bennett v. U.S. Trust Co., 770 F.2d

at 315. Allowing identity of person and enterprise would

permit punishment of the exploited “victim” enterprise

as well as the infiltrator person or entity. This conse-

quence is both unintended and undesirable.

Under the rule requiring distinct entities, however,

§ 1962(c) liability usually cannot be imposed on those

organizations created solely for illegal purposes and op-

erated to the detriment of third parties by corrupt direc-

tors or controlling partners. Consequently, an exception

to the non-identity rule has at times been made for the

institution that functions as both “perpetrator” and “vic-

tim.” See eg., United States v. Hartley, 678 F.2d at

989 (because plaintiff could have named culpable cor-

porate directors as defendant ‘“association-in-fact” dis-

tinct from corporate enterprise, court “pierced the cor-

porate veil” to allow corporation to be named as both

defendant and enterprise) .

It is important to realize, however, that corrupt or-

ganizations which conduct their own affairs by illegal

means may often be subject to direct liability under an-

other section of RICO. Section 1962(a) prohibits the

receipt and subsequent investment of racketeering pro-

ceeds into an “enterprise”. Under this section—which

does not contain the language of subsection (c) implying

that the person and enterprise must be distinct—a num-

ber of courts have rejected a non-identity requirement.

At least three Courts of Appeals have concluded that “a

corporation-enterprise may be held liable under subsec-

tion (a) where the corporation is also a perpetrator”

and not merely a passive instrument of the racketeering

activity. See Haroco, 747 F.2d at 402 (7th Cir.) ; Scho-

field, 793 F.2d at 31 (1st Cir.). See also Schreiber Dis-

tributing Co. v. Serve-Well Furniture Co., 806 F.2d

1393, 1398 (9th Cir. 1986) (allowing corporation that is

the “direct or indirect beneficiary” of pattern of rack-

15a

eteering activity to be both “person” and “enterprise”

under 1962(a)). When interpreted in this way, section

1962(a) provides one mechanism to punish such cor-

rupt organizations by depriving them of their ill-gotten

gains.

It is thus apparent that the language of each section

contemplates a different role the enterprise may play in

a variety of corrupt schemes. See Haroco, 747 F.2d at

401 (Under the respective subsections of 1962, “the enter-

prise may play the various roles of victim, prize, instru-

ment, or perpetrator. The RICO liability of the enter-

prise should depend on the role played.”) Through sec-

tion (a), Congress provided for punishment of organiza-

tions which in fact gain from their wrongdoing by focus-

ing on profits gleaned from illegal activities, thus “spar-

ing” organizations that do not so profit. Section (c)

likewise immunizes organizations which are merely “vic-

tims”, but this result depends on the requirement of non-

identity of person and enterprise which also places some

corrupt organizations beyond reach. The use of (c) to

impose liability on some types of organizations covered

by (a) carries the danger of exposing innocent organiza-

tions to prosecution. Absent the non-identity require-

ment, respondeat superior could operate to impose § 1962

racketeering activities of its agents and has not been

enriched by those activities. Since we agree with the

court in Schofield, 793 F.2d at 32, that “the concept of

vicarious liability is directly at odds” with the Congres-

sional intent behind § 1962(c), we think it wise not to

risk this consequence by disturbing Congress’ carefully

crafted scheme. We therefore hold with those courts that

forbid identity of person and enterprise under § 1962(c)

and conclude that the ofiginal complaint naming the

Local as person and enterprise was properly dismissed.

Yellow Bus attempts to avoid this legal result by de-

picting the RICO enterprise as an “association-in-fact”

16a

comprised of the Local and Woodward, an entity dis-

tinct from each of these named defendants. This attempt

is unavailing. It is true that under the expansive § 1961

definition of “enterprise”, some courts have permitted the

enterprise to be defined as an association composed of

some number of the distinct individual defendants or

defendant corporations. See Cullen v. Margiotta, 811 F.2d

698, 729-730 (2d Cir.), cert. denied sub nom. Nassau

County Republican Committee v. Cullen, 107 S.Ct. 3266

(1987) (“[W]Je see no reason why a single entity could

not be both the RICO ‘person’ and one of a number of

members of the RICO ‘enterprise.’”) ; Fustok v. Conti-

commodity Services, Inc., 618 F. Supp. 1070, 1076

(S.D.N.Y. 1985) (group of individual corporate defend-

ants may qualify as “association-in-fact” enterprise) ;

see also United States v. Perholtz, 657 F. Supp. 603,

605 (D.D.C. 1986); but cf. Beck v. Cantor Fitzgerald

& Co., 621 F. Supp. 1547, 1563 (N.D. Ill. 1985) (asso-

ciation of defendants may constitute an ‘enterprise’ only

if that enterprise has a “separate and sufficiently lasting

identity apart from the ‘person’ or ‘persons’ * * * who

are employed [by] or associated with it.”) Several

courts, however, have disallowed a § 1962(c) claim where

the relationship among the members of the enterprise

association is the relationship of parts to a whole. That

is, while the corporate or organizational defendant may

itself be a member of the enterprise association, the

members of the enterprise association may not simply be

subdivisions, agents, or members of the defendant or-

ganization. See Hanline v. Sinclair Global Brokerage

Corp., 652 F. Supp. 1457, 1462 (W.D. Mo. 1987) (en-

terprise association of corporation with its employees not

distinct from corporation defendant); see also Atkinson

v. Anadarko Bank & Trust Co., 808 F.2d 438, 441 (5th

Cir), cert. denied, 107 S. Ct. 3276 (1987) (bank, holding

company, and three emplovees have no distinct existence

apart from defendant bank) ; Tarasi v. Dravo Corp., 613

F. Supp. 1235, 1236-37 (W.D. Pa. 1985) (corporate de-

17a

fendant may not be associated with its agent to form

1962(c) enterprise).

In short, an organization cannot join with its own

members to do that which it normally does and thereby

form an enterprise separate and apart from itself.

Where, as here, the organization is named as defendant,

and the organization associates with its member to form

the enterprise ‘“association-in-fact’’, the requisite distinct-

ness does not obtain. As the district court pointed out,

there is no difference between the union as an entity in-

cluding Woodward as officer, and the union plus Wood-

ward, since “the whole is no different than the sum of its

parts in this context.” Furthermore, allowing plaintiffs

to generate such “contrived partnerships” consisting of

an umbrella organization and its subsidiary parts, would

render the non-identity requirement of section 1962(c)

meaningless. We decline to permit such an “end run”

around the statutory requirements.

B. “Participate in the conduct of the affairs”

The district court rejected Yellow Bus’ attempt to

charge the local as a RICO defendant under § 1962(c)

by amending the complaint to name itself as the “enter-

prise”. In addition to objecting to the timing of the re-

quest, the court concluded that the amended complaint

would fail to state a proper RiCO claim because the

union’s acts were not committed in the conduct of Yellow

Bus’ affairs; rather, Yellow Bus was merely the “setting”

for the union’s activities. We disagree with the district

court’s assessment of the relationship between the bus

company and the Local’s alleged conduct, and reject as

overly restrictive any interpretation of the language of

§ 1962(c) which would necessitate a dismissal of the

RICO claim against the Local in this case.

Unlike “enterprise” and “pattern”, the terms “con-

duct”, “participate” and “through” do not have statutory

definitions. The Act has been challenged as unconstitu-

18a

tionally vague for this reason. See United States v. Stof-

sky, 409 F. Supp. 609 (S.D.N.Y. 1973). In rejecting the

vagueness argument the court in Stofsky explained:

The statute does not define [the] connection by dis-

tinguishing between predicate acts which play a

major or a minor role, or any role at all in what

might seem as the usual operation of the enterprise;

nor does it require that such acts be in furtherance

of the enterprise, as defendants suggest it must.

In this Court’s view, the statute fails to state these

requirements because Congress did not intend to re-

quire them in these terms. The perversion of legiti-

mate business may take many forms. The goals of

the enterprise may themselves be perverted. Or the

legitimate goals may be continued as a front for un-

related criminal activity. Or the criminal activity

may be pursued by some persons in direct conflict

with the legitimate goals, pursued by others. Or the

criminal activity may, indeed, be utilized to further

otherwise legitimate goals. No good reason suggests

itself as to why Congress should want to cover some,

but not all of these forms; nor is there any good

reason why this Court should construe the statute to

do so. It plainly says that it places criminal respon-

sibility on both those who conduct and those who

participate, directly or indirectly, in the conduct of

the affairs of the enterprise, without regard to what

the enterprise was or was not about at the time in

question. This may be broad, but it is not vague.

Id. at 613. Thus, in Stofsky’s view, the “requisite nexus”

between unlawful acts and enterprise activities was left

undefined “for the simple reason that no particular de-

gree of interrelationship is required.” United States v.

Field, 432 F. Supp. 55, 58 (S.D.N.Y. 1977) (citing

Stofsky).

Notwithstanding Stofsky’s refusal to clarify the reach

of § 1962(c), courts have struggled to define the scope of

19a

behavior chargeable under that section. Attempts have

been made to formalize the intuition that § 1962(c) was

not meant to punish predicate activity which forms no

part of the ordinary affairs of the enterprise, and is only

incidentally related to its day-to-day business. See, eg.,

U.S. v. Yonan, 623 F. Supp. 881, 883 (N.D. Ill. 1985),

aff'd in part and rev'd in part, 800 F.2d 164 (7th Cir.

1986) (seeking a test for “association” and “participa-

tion” to disqualify, for example, “robbing a bank twice’).

Some federal courts have required that the defendant

participate in the “direction” or “management” of the

organization, or have fashioned other rules to restrict the

universe of relationships subject to § 1962(c) liability.

See, e.g. Bennett v. Berg, 710 F.2d 1361, 1364 (8th Cir.),

cert. denied sub nom. Prudential Ins. Co. v. Bennett, 464

U.S. 1002 (1983) (“{Slome participation in the opera-

tion or management of the enterprise itself” is ordinarily

required) ; Bank of America v. Touche Ross & Co., 782

F.2d 966, 970 (11th Cir. 1986) (chargeable predicate

acts must be “helpful or necessary” to the operation of

the enterprise) ; United States v. Ladmer, 429 F. Supp.

1231, 1244 (E.D.N.Y. 1977) (dismissing a RICO charge

based on unauthorized expenditure of union funds for

personal travel expenses because unrelated to the enter-

I 66

prise’s “essential” or “core” function).

Other federal courts, however, merely impose an open-

ended requirement that the predicate acts relate to, or

have some effect upon, the affairs of the enterprise. See,

e.g., United States v. Welch, 656 F.2d 1039, 1060-62

(5th Cir. 1981), cert. denied sub nom. Cashell v. U.S.,

456 U.S. 915 (1982) (holding that 1962(c) requires

a “sufficient nexus between the racketeering activities

and the affairs of the enterprise” and rejecting the re-

quirement of “benefit” to the enterprise) ; United States

v. Carter, 721 F.2d 1514, 1525-27 (11th Cir.), cert. de-

nied sub nom. Morris v. U.S., 469 U.S. 819 (1984) (al-

lowing “proof of effect on the common everyday affairs

—

20a

of the enterprise’). In United States v. Scotto, 641 F.2d

47, 54-55 (2d Cir. 1980), cert. denied, 452 U.S. 961

(1981), union officials were accused of forgiving con-

tract requirements and steering business in exchange for

illegal payoffs. The court refused to embrace the “core

functions” formula of Ladmer, or the Berg requirement

that the conduct relate to the operation or management

of the enterprise. Citing with approval to the district

court decision in United States v. Stofsky, the Scotto

court fashioned a two part test for “conducting the

activities of an enterprise”, holding that the proper con-

nection is established when “1) one is enabled to commit

the predicate offenses solely by virtue of [one’s] position

in the enterprise or involvement in or control over the

affairs of the enterprise, or 2) the predicate offenses are

related to the activities of that enterprise.” Jd. at 54.

The court went on to note that “[s]imply committing

predicate acts which are unrelated to the enterprise or

one’s position within it would be insufficient.” Jd. An-

other Court of Appeals restated the Scotto test in United

States v. Cauble, 706 F.2d 1322 (5th Cir. 1983), cert.

denied, 465 U.S. 1005 (1984), finding the demands of

§ 1962(c) satisfied when “the defendant’s position in the

enterprise facilitated his commission of the racketeering

acts” and “the predicate acts had some effect on the law-

ful enterprise.” Jd. at 1333. See also United States v.

Provenzano, 688 F.2d 194, 200 (3rd Cir.), cert. denied,

459 U.S. 1071 (1982) (following Scotto).

We decline to adopt a more restrictive standard than

that enunciated in Cauble and Scotto. Section 1962(c) of

RICO refers to direct as well as indirect participation in

the enterprise’s affairs, and imposes no requirement that

participation be at the management level or relate to

“core functions”. Moreover, Congress has expressed its

intention that RICO be “liberally construed to effectuate

its remedial purposes.” Pub. L. No. 91-452, § 904(a), 84

Stat. 947 (1969). The inappropriateness of artificially

2la

restricting the types of relationships satisfying § 1962

(ec) is especially apparent in cases of predicate acts com-

mitted by enterprise “outsiders” rather than “insiders’’.

In such instances, a stringent test threatens to frustrate

RICO’s broad remedial purpose. See United States v.

Elliott, 571 F.2d 880, 903 (5th Cir.), cert. denied sub

nom. Delph v. United States, 439 U.S. 953 (1978) (“The

substantive proscriptions of the RICO statute apply to

insiders and outsiders—those merely ‘associated with’

an enterprise—who participate directly and indirectly

in the enterprise’s affairs. [Citations omitted.] Thus

the RICO net is woven tightly to catch even the smallest

fish, those peripherally involved with the enterprise.”’)

Mindful of these flexible terms, a number of courts

have permitted RICO actions in bribery cases against

those seeking to influence organizations in which they

hold no official position of authority. See, eg., United

States v. Forsythe, 560 F.2d 1127, 1136 (3rd Cir. 1977)

(reversing a lower court holding that a magistrate who

accepts bribes from a bonding company is not sufficiently

“associated with” the bonding company enterprise’s af-

fairs). See also United States v. Bright, 630 F.2d 804,

830 (5th Cir. 1980) (holding that bribing and influ-

encing a sheriff qualified as participation in the affairs

of the sheriff’s office}; United States v. Lee Stoller

Enterprises, 652 F.2d 1313, 1320-21 (7th Cir.), cert.

denied, 454 U.S. 1082 (1981) (businessman paying kick-

backs to sheriff in exchange for lucrative contracts held

to participate in sheriff’s office affairs) ; United States v.

Blackwood, 768 F.2d 131, 137-38 (7th Cir.), cert. denied,

474 U.S. 1020 (1985) (applying Cauble to allow

§ 1962(c) RICO charge against a police officer charged

with soliciting bribes to influence county court case dis-

position); United States v. Yonan, 800 F.2d 164, 167

(7th Cir. 1986), cert. denied, 107 S. Ct. 930 (1987) (re-

versing the dismissal of a RICO count against a criminal

defense attorney charged with bribing a state district

attorney).

22a

The Yonan court stressed that defendant need not have

a stake or ongoing interest in the enterprise, nor any di-

rect contact with managers of the enterprise, as long as

the predicate acts formed part of a “business relation-

ship.” Jd. at 168. In a context not involving official cor-

ruption, the court in State of New York v. O’Hara, 652

F. Supp. 1049, 1053-54 (W.D.N.Y. 1987), applied the

analysis in Yonan to uphold a RICO claim against a pri-

vate contractor who allegedly submitted fraudulent bids

on a municipal waste clean-up contract. The court held

that this activity fulfilled the statutory requirement of

association with the City of Niagara Falls through in-

direct participation in its affairs. See also United States

v. Starnes, 644 F.2d 673, 679 (7th Cir.), cert. denied,

454 U.S. 826 (1981) (arsonist hired by company official

to “torch” its headquarters “associates with” and “par-

ticipates” in the company’s affairs under § 1962(c)).

The alleged relationship between the Local and Yellow

Bus falls well within the scope of activity contemplated

by the words of the statute, and meets the appropriately

minimal requirements set out in Scotto, Cauble, and

Yonan and their progeny. As in Yonan, Yellow Bus and

the union had a full-fledged “business relationship”—

Yellow Bus was not merely a “setting” for crimes other-

wise unrelated to the company’s affairs. As we have

shown, it matters not that Woodward and the Local did

not direct or manage the “core” day-to-day transporta-

tion activities of Yellow Bus, or that the union initially

exerted its influence over the conduct of employees, rather

than management. A strike for recognition of the union

as a collective bargaining representative is an activity

sufficiently related to the company’s ongoing role as a

business enterprise and employer to establish the requi-

site nexus. Although the Local and the bus company

were associated for a limited period, their relationship

had vital significance for the economic destiny of Yellow

Bus. The elaborate legal structure which governs all as-

——

23a

pects of management-labor interaction only serves to em-

phasize that a strike by a union seeking to bargain with

an employer is an important “affair” of the employer

company. More often than not, it is a momentous event

in the life of that enterprise.

Having established that the strike and organizational

effort were “affairs” of Yellow Bus, we must decide

whether appellees’ actions, if proved, would amount to

participation in the conduct of those affairs “through a

pattern of racketeering activity.” Yellow Bus alleges that

the violence was committed with the intent to influence

the company’s conduct. Allegations of a requisite num-

ber of intentional destructive acts or threats during the

strike would alone satisfy the participation requirement

for the purpose of stating a RICO claim. Any further

showing of success in influencing concrete company

choices through violent extortion is unnecessary. In con-

tending that appellees chose to avail themselves of vio-

lent tactics as one way of conducting the strike, Yellow

Bus charges that appellees participated in the conduct

of the company’s affairs for the duration of the strike by

means of these activities, among others. This clearly

serves to fulfill the requirement of participation in the

affairs of the company.

V. RULE 15(a) LEAVE TO AMEND

Finally, we hold that the district court abused its dis-

cretion to the extent that it relied on lack of timeliness

to justify its refusal of leave to amend. Fed. R. Civ.

P. 15(a) declares that leave to amend “shall be freely

given when justice so requires’. As the Supreme Court

forcefully stated in Foman v. Davis, 371 U.S. 178, 182

(1962), “this mandate is to be heeded.” These pleading

rules were designed to facilitate a proper decision on the

merits, and the opportunity to test the merits should or-

dinarily be accommodated if injustice will not otherwise

result. See generally 6 C. Wright & A. Miller, Federal

Practice and Procedure § 1484 (1971).

24a

The reasons recognized as justifying denial of motion

to amend—“undue delay, bad faith or dilatory motive

** * repeated failure to cure deficiencies * * * , undue

prejudice to the opposing party * * * , futility of the

amendment,” 371 U.S. at 182—are not applicable here.

Only two months elapsed betweer. the March 31, 1984

hearing at which the court first expressed doubts about

the deficiencies of the original pleadings and Yellow Bus’

request to amend those pleadings. When the court ruled

in late June on the Local’s April 13 motion to dismiss

the original RICO claim against the union, commence-

ment of trial was still over eight months away. Con-

sideration of this timetable indicates that Yellow Bus

moved with more than reasonable alacrity to correct

its pleadings, and that ample time was available to de-

fendants for trial preparation. Amendment of the com-

plaint, in any event, would not have imposed any addi-

tional burdens on the Local because the restated RICO

claim required consideration of no new facts and argu-

ments. Since there was no evidence of prejudice to ap-

pellees or of deliberate delay or bad faith, leave to amend

was appropriate and should have been granted.

CONCLUSION

We remand to the district court for a trial on the

RICO charges after Yellow Bus has had the opportunity

to lodge revised pleadings. We also reinstate the judg-

ment against the Local for malicious destruction of prop-

erty. After considering the remaining contentions on

appeal, we find them to be without merit. Accordingly,

the judgment of the district court is affirmed in part and

reversed in part, and the case is remanded to the dis-

trict court for further proceedings.

25a

EDWARDS, Circuit Judge concurring: I have nagging

doubts about our holding that “the strike and organiza-

tional effort were ‘affairs’ of Yellow Bus,” maj. op. at

23, and that, consequently, plaintiff might be able to

state a cause of action under section 1962(c) of RICO.

This result seems strangely at odds with certain funda-

mental precepts of labor law and collective bargaining.

However, I recognize that this holding finds support in

the case law, and that it is not inconsistent with RICO’s

broad remedial purpose. I therefore concur, albeit with

pause.

26a

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

Civil Action No. 82-3154

JAMES F.. WOODWARD,

Plaintiff,

¥.

MICHAEL DIPALERMO, et al.,

Defendants.

Civil Action No. 83-1232

YELLOW Bus LINES, INC., et al.,

Plaintiffs,

DRIVERS, CHAUFFEURS & HELPERS,

LOCAL UNION 6839, et al.,

Defendants.

[Filed Jan. 16, 1986]

JUDGMENT

After consideration of defendants’ motion for judg-

ment notwithstanding the verdict, or alternatively, for

modification of the judgment or for a new trial, the op-

position thereto, and the entire record herein, it is, by the

court, this 16th day of January, 1986,

ORDERED, ADJUDGED, and DECREED that the

motion for judgment notwithstanding the verdict is

27a

granted with regard to defendant Drivers, Chauffeurs &

Helpers Local Union 639 and judgment is entered in favor

of defendant Drivers, Chauffeurs & Helpers Local Union

639 on all counts; and it is further

ORDERED, ADJUDGED, and DECREED that the

motion for judgment notwithstanding the verdict is

granted with regard to defendant James Woodward on

the counts of tortious interference with contractual rela-

tions and abuse of process, and judgment is entered in

favor of James Woodward on those counts; and it is

further

ORDERED, ADJUDGED, and DECREED that the

motion for judgment notwithstanding the verdict is de-

nied with respect to defendant James Woodward on the

count of malicious destruction of property, as is defend-

ants’ alternative motion for modification of the judgment

or for a new trial; and it is further

ORDERED, ADJUDGED and DECREED that judg-

ment be entered in favor of Yellow Bus Lines, Inc.

against James Woodward in the amount of $1,280.00.

/s/ Thomas A. Flannery

United States District Judge

28a

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

Civil Action No. 82-3154

JAMES F.. WOODWARD,

Plaintiff,

Vv.

MICHAEL DIPALERMO, et al.,

Defendants.

Civil Action No. 83-1232

YELLOW BUS LINES, INC., et al.,

Plaintiffs,

¥.

DRIVERS, CHAUFFEURS & HELPERS,

LOCAL UNION 689, et al.,

Defendants.

[Filed Jan. 16, 1986j

MEMORANDUM

In this case, a jury returned a verdict in favor of

plaintiffs on three counts: malicious destruction of prop-

erty, intentional interference with contractual relations,

and abuse of process. In response to a special verdict

form, the jury awarded damages of approximately

$56,000 against defendant James Woodward and ap-

proximately $77,000 against defendant union. This mat-

29a

ter now comes before the court on defendants’ motion for

judgment notwithstanding the verdict, or alternatively,

for modification of the judgment or a new trial. Because

the verdicts are obviously against the clear weight of the

evidence on the counts alleging intentional interference

with contractual relations and abuse of process, the court

will set aside the jury verdicts in favor of plaintiffs on

those counts, and enter judgments notwithstanding the

verdicts in favor of the defendants. On the count alleging

malicious destruction of property, the court will modify

the verdict.

I. Background

Plaintiff Yellow Bus Lines Inc. (“Yellow Bus”) was a

Virginia corporation located in the District of Columbia

and engaged in providing bus service for schools. In

November of 1981, some eight employees of Yellow Bus

struck for recognition of defendant Drivers, Chauffeurs

& Helpers Local Union 639 (“Local 639”). Defendant

Woodward was the Local 639 representative who sought

to organize the employees and to establish Local 639 as

their collective bargaining representative.

Though the company continued to operate throughout

a four-day strike in November of 1981, plaintiffs con-

tended that Local 639 and Woodward engaged in a sys-

tematic campaign to undermine the company. This was

allegedly done during the strike by encouraging employ-

ees to commit various acts of vandalism and after the

strike by instructing the employees to damage property

and be late or absent. Plaintiffs alleged that Woodward

threatened Yellow Bus managers that if Yellow Bus re-

sisted unionization, then litigation and other tactics would

be used to hurt Yellow Bus. The labor dispute continued

after the strike, and in the summer of 1983, Yellow Bus

discontinued most of its operations, alleging that defend-

ants’ activities caused its demise.

30a

Proceedings in this court were initiated on November

4, 1982, when Woodward filed a suit alleging false arrest

against D.C. police officer Michael DiPalermo, the Dis-

trict of Columbia, and Yellow Bus. Plaintiffs counter-

claimed with federal and state claims in April of 1983

against Woodward and Local 639. By October 1984, this

court had dismissed all of the federal claims, but elected

to retain jurisdiction over the state claims. In May of

1984, Woodward’s claim for false arrest was settled with

the District of Columbia and was dismissed against Yel-

low Bus on Woodward’s motion to dismiss.

On February 18, 1985, trial commenced on the re-

maining claims. On March 8, 1985, a verdict was re-

turned in favor of plaintiffs on three counts. Defendants

now contend that notwithstanding the jury’s verdict,

judgment should be granted defendants because there

was insufficient proof on each count.

Judgment notwithstanding the verdict should be en-

tered when “the evidence, together with all inferences

that can reasonably be drawn therefrom, is so one-sided

that reasonable men could not disagree on the verdict.”

Coburn v. Pan American World Airways, Inc., 711 F.2d

339, 342 (D.C. Cir. 1983). Of course, only when the

probative facts are undisputed and reasonable minds can

draw but one inference does the question become one of |

law for the court. Aylor v. Intercounty Constr. Corp., ;

381 F.2d 930, 934 (U.S. App. D.C. 1967). An additional |

element in the standard of review exists in this case: ,

by federal law, no union, agent or member of a union

shall be held liable in any court for the unlawful acts of

individual officers or members except upon “clear proof

of actual participation in, or actual authorization of,

sch acts... .” 29 U.S.C. § 106 (1982).

The counts and the evidence supporting them are each

discussed separately.

3la

II. Interference with Business Contract

The largest portion of the jury’s award (cumulatively

$100,000) was based on a finding that defendants inten-

tionally interfered with the 1982-83 contract between

Yellow Bus and the Charles Smith Jewish Day School

(“JDS”). In order to prevail on this claim, there must

be clear proof of a specific intent to procure the breach

of a specific contract thereby causing a specific and as-

certainable injury. Tuxedo Contractors, Inc. v. Swindell-

Dressler Co., 613 F.2d 1159 (D.C. Cir. 1979).

The only specific contract mentioned at trial was be-

tween Yellow Bus and JDS, which was entered into in

October of 1982. The Chairman of the JDS Transpor-

tation Committee, Howard Wilchins, testified without im-

peachment that JDS’s difficulties with Yellow Bus oc-

curred almost one year after the strike, after the con-

tract was negotiated in October of 1982. Transcript, at

1507, 1508. It was in January of 1983 that JDS took

action to curtail the contract because of Yellow Bus’

poor service. Transcript, at 1509. But even then the

contract continued. It was only when the president and

route manager of Yellow Bus, Paula Westgate, informed

JDS of Yellow Bus’ financial problems with the IRS that

Wilchins terminated the contract. Transcript, at 1511;

Defendants’ Exhibit 22.

This court finds that there is no proof, clear or other-

wise, of a causal connection between defendants’ alleged

conduct and the termination of the contract. The two

reasons for termination of the contract were Yellow Bus’

poor performance and its difficulty with the IRS. Tran-

script, at 921, 1513. Neither of these arose from de-

fendants’ activities. The plaintiffs also had to prove that

defendants intentionally produced a breach of the con-

tract, yet there was no evidence supporting this element.

While driver attendance may have been a problem,

Paula Westgate admitted at trial that defendants were

32a

not responsible for the problems of an overwhelming ma-

jority of drivers. In fact, ail of plaintiffs’ witnesses

admitted that they had no proof of defendants’ respon-

sibility for any of the drivers’ abstenteeism, tardiness, or

maintenance problems. Rather, the evidence showed that

the company had significant drug and alcohol problems,

and had internal problems among the three owners:

Paula Westgate, Maria Triggs (secretary-treasurer and

office manager), and Peter McKinnon (vice president and

company mechanic). In fact, McKinnon at one point at-

tempted to destroy the company, declared he was Christ,

and threatened to murder Westgate, his sister. More-

over, no evidence was introduced at trial that any of the

vandalism occurred after the allegedly affected contract

was executed.

There was also no evidence that defendants were re-

sponsible for the company’s tax liabilities. Maria Triggs

testified that the company had difficulty paying its taxes

from its inception. The obligations stemmed from the

company’s withholding FICA and social security deduc-

tions from employees, but then not remitting the deducted

amounts to the federal government. This practice began

June of 1981, before the union ever started negotiating

with Yellow Bus.

The evidence pointed to a different cause for Yellow

Bus’ poor performance after the execution of the 1982-83

contract with JDS: the deterioration of the buses. Tran-

script, at 1110-1111, 1509. That deterioration came

about from the age of the buses: Yellow Bus never

bought a new bus and every model was a 1971 or earlier

model. Transcript at 578-579, 586-587. By January

1983, half of the buses owned by Yellow Bus were in-

operable. Transcript, at 361. After McKinnon departed

in the fall of 1982 there was no one skilled enough to

keep the buses running. Transcript, at 1111. This was

when JDS sent several complaints to Yellow Bus. Tran-

seript of 1983, the school reduced the number of Yellow

33a

Bus routes, Transcript, at 1508-09, but the school in-

tended to continue its contractual relationship with Yel-

low Bus. Transcript, at 1510. Only when JDS learned

of Yellow Bus’ tax liability to the IRS did JDS terminate

the Yellow Bus contract. Transcript 1511-13, 1137, and

938.

Finally, there was no clear proof of the damages suf-

fered as a consequence of the alleged interference. The

award of $100,000 is not supported by any specific evi-

dence in the record; this single contract could not have

generated such profits. First, it only generated approxi-

mately $2,232 of gross income per day for a term of 183

school days per year. Second, the contract was totally

performed for the first five months and there was 80%

performance for the next two months. Defendants’ Ex-

hibit 21. This only leaves lost profits from two routes

for two months (grossing approximately $10,400) and all

routes for two months (grossing approximately $49,250).

After subtracting cost of performance, this leaves a fig-

ure nowhere near $100,000.

Plaintiffs respond that Triggs and Westgate’s testi-

mony, supported by the company’s tax returns, showed

that the company’s profits went from approximately

$3,000 the first year to approximately $20,000 the second

year. Though the buses were old, the company almost

tripled its business from 1979 to 1981. After the strike,

absenteeism increased due to the union activity. Plain-

tiffs’ Exhibit 19(a). That increase led to losses of

$128,517. Plaintiffs’ Exhibits 17 and 19(d). Even if

this were so, such damages are not tied to the contract

in issue for 1982-83, and therefore cannot be used to

determine compensation on that count.

Thus, plaintiffs have failed to show intentional pro-

curement of a breach since they failed to demonstrate

that defendants’ actions contributed in any way to JDS’s

decision to terminate-the contract. Further, plaintiffs’

34a

evidence provided an inadequate showing of damages

from the breach. Therefore, this court must set aside

the verdict on this count and grant judgment to de-

fendants.

III. Abuse of Process

To prove abuse of process, plaintiffs had to show: (1)

the issuance of legal process; (2) an ulterior purpose;

(3) an improper act in the use of process; and (4) ac-

tual injury. Jacobsen v. Thrifty Paper Bowes, Inc., 230

A.2d 710, 711 (D.C. App. 1967).

Element (1) was not in dispute. With regard to ele-

ments (2) and (8), plaintiffs alleged that Woodward

filed his lawsuit to gain information pertaining to his

impending criminal trial and that Woodward offered to

withdraw the suit if the company would pay its drivers

five dollars per hour. In this action, plaintiffs’ burden

was to show by clear proof that Woodward’s suit against

plaintiffs resulted in a perversion of the judicial process

and achieved some end not regularly contemplated by

the law. Morowitz v. Marvel, 423 A.2d 196, 198 (D.C.

1980). Such perversion requires a gross deviation from

what is eensidered acceptable by the community. Epps

v. Vogel, 454 A.2d 320, 324 (D.C. 1982).

This court finds that no reasonable trier could find

on this 2vidence that an abuse of process occurred. Wood-

ward testified without contradiction that his attorney

alone r.ade the decisions as to when and how to pursue

discovery in Woodward’s case. The discovery never ac-

tushy occurred, at plaintiffs’ request, until after the crim-

inal case was dismissed. Sufficient evidence came out

at trial regarding the peculiarities of Woodward’s ar-

rest which refute any finding of “perversion” in the

filing of his suit. In Woodward’s civil suit for false ar-

rest, co-defendants with Yellow Bus settled the case for

more than three thousand dollars ($3,000). This is fur-

35a

ther proof that there was no basis for a jury finding that

Woodward’s filing of his civil suit resulted in a perver-

sion of the judicial process.

IV. Malicious Destruction of Property

To find malicious destruction of property, the jury had

to find clear proof that: (1) it was defendants that

destroyed the property; (2) it was not the property of

the defendants; (3) defendants destroyed the property

maliciously; and (4) the property destroyed had some

value. Nichols v. United States, 343 A.2d 336, 341

(D.C. 1975).

The jury found that these elements had been met and

so awarded to Yellow Bus $1,280 against Woodward and

$1,920 against Local 639. During the four-day strike in

November of 1981, there was sufficient evidence to find

defendant Woodward liable for damages sustained dur-

ing that four-day period. There was circumstantial evi-

dence linking Wocdward to the various items introduced

into evidence, such as rocks, strips of wood and a curtain

rod beth with nails protruding, and a beer can with nails

in it. These items of physical evidence coupled with the

threats by Woodward and other strikers made in Wood-

ward’s presence provide a sufficient evidentiary basis for

the jury to hold Woodward responsible for the damages

sustained during the period of the four-day strike. The

plaintiffs failed, however, to provide clear proof that

Local 639 was implicated in any way in the destruction

of the property or that it ratified Woodward’s actions in

any manner. Therefore, the judgment against Local 639

must be set aside. Defendant Woodward’s motion to set

aside the verdict against Woodward on the count will be

denied.

Judgment will be entered in accordance with the fore-

going.

/s/ Thomas A. Flannery

United States District Judge

36a

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

Civil Action No. 82-3154

JAMES F. WOODWARD,

Plaintiff,

Vv.

MICHAEL DIPALERMO, et al.,

Defendants.

Civil Action No. 83-1232

YELLOw Bus LINES, INC.,

Plaintiff,

Vv.

DRIVERS, CHAUFFEURS & HELPERS

LOCAL UNION 639, et al.,

Defendants.

[Filed June 28, 1984]

MEMORANDUM

This matter came before the court on several pretrial

motions. By Order dated June 1, 1984, the court ruled

on all outstanding motions so that the parties could in-

telligently prepare for the upcoming trial. The purpose

of this Memorandum is to set forth the court’s reasons

for its rulings on the dispositive motions.’

1In its June 1, 1984 Order, the court also affirmed Magistrate

Dwyer’s Order regarding Yellow Bus’ use of Mr. David Stamp as a

new expert witness. Yellow Bus appealed from the Magistrate’s

——————————

37a

GENERAL BACKGROUND

The events underlying the claims and counterclaims

filed in this case occurred in the Fall of 1981, during an

attempt by the Drivers, Chauffers & Helpers Local Union

639 (“Local 639” or “union”) to organize the employees

of the Yellow Bus Lines, Inc. Local 639, allegedly through

its business agent James Woodward, allegedly staged a

strike at Yellow Bus as part of an attempt to gain recog-

nition as exclusive bargaining agent for Yellow Bus’ em-

ployees. During the course of the strike and thereafter,

both sides allegedly made threatening remarks, various

acts of violence were allegedly committed, and Woodward

was allegedly arrested without cause. The labor dispute

continued after the strike, and in the summer of 1983

Yellow Bus discontinued most of its operations, alleging

that the union’s activities caused its demise.

Proceedings in this court were initiated on November

4, 1982, when Woodward filed a suit against three Yellow

Bus officers, the District of Columbia, and a D.C. police

officer who allegedly caused Woodward’s unlawful arrest

after the strike, see Complaint in Woodward, Civ. Act.

No. 82-3154. Woodward alleged that his federal constitu-

tional and statutory rights were violated by the defend-

ants, acting together, when they caused him to be ar-

rested in order to stop his union activities. Yellow Bus’

officers filed a compulsory counterclaim against Wood-

ward for intentional infliction of emotional distress and

abuse of process, and the court permitted the addition

of Local 639 as co-plaintiff/counter-defendant and the

assertion of these counterclaims against both Woodward

and Local 639, see May 5, 1983 Order in Woodward.

Order, but the appeal was denied on the ground that the Magis-

trate’s Order was not clearly erroneous. It does not appear to this

court that Yellow Bus will suffer substantial prejudice if it is not

permitted to use Mr. Stamp as an expert, and Yellow Bus’ attempt

to substitute a new expert well past the deadline established by

the court was therefore properly denied.

38a

Further, the court permitted Yellow Bus to intervene

as a defendant/counter-plaintiff, and to file counterclaims

against Woodward and Local 639 for malicious destruc-

tion of property and interference with contractual rela-

tions, see id. At about that time, Yellow Bus filed a

separate suit against Woodward and Local 639, wherein

it alleged federal RICO violations, a secondary boycott

claim, malicious destruction of property (again), inter-

ference with contractual relations (again), and abuse of

process against both defendants, see Complaint in Yellow

Bus, Civ. Act. No. 83-1232. On June 7, 1983, this court

consolidated the Woodward and Yellow Bus cases. On

July 25, 1983, the court granted Woodward’s motion to

dismiss the Yellow Rus secondary boycott claim against

him,? but denied his motion with respect to the RICO

claim and the pendent tort claims.

DISCUSSION

A. Motions to dismiss Woodward’s claims

On May 16, 1984, James Woodward, the plaintiff in

the original Woodward action, represented through a

motion filed by Local 639 that his original claims against

the District of Columbia and police officer DiPalermo had

been settled. Woodward, Local 639, and counsel for the

District and DiPalermo represented in this motion and

later at a hearing that they all wished to see Woodward’s

original claims dismissed in light of the settlement. At

the May 31, 1984 hearing, Woodward, appearing pro se,

also moved to dismiss his claims against the Yellow Bus

officers. By these two motions, then, Woodward sought

to remove himself as a plaintiff in this case by dismissing

all of his original claims in Woodward.

2 The court notes that in its June 1, 1984 Order, it inadvertently

dismissed Yellow Bus’ secondary boycott claim against Woodward

again. The original dismissal on July 25, 1983 disposed of this

claim.

39a

These motions were opposed by Yellow Bus and its

officers, who expressed doubt that the court would retain

jurisdiction over their state law counterclaims if the

court should permit Wooward to dismiss his federal

claims in the original Woodward action. Because of this

jurisdictional problem, argued Yellow Bus and its offi-

cers, Fed. R. Civ. P. 42(a) (2) bars the court from dis-

missing Woodward’s ciaims. The court, however, believes

that it can retain jurisdiction over the Yellow Bus and

Yellow Bus officer counterclaims even if Woodward’s

claims are dismissed, and hence sees no reason to prevent

Woodward from dismissing his claims. As this court

previously held, it has ancillary jurisdiction over the

state based counterclaims originally filed by the Ye low

Bus officers and by Yellow Bus in the Woodward case,

see May 5, 1983 Memorandum in Woodward. As several

cases have held, the court can, in its discretion, retain

ancillary jurisdiction over such counterclaims even if the

plaintiff’s original claim is dismissed, see Dery v. Wyer,

265 F.2d 804, 808 (2d Cir. 1959) ; accord, Hill v. Rolleri,

615 F.2d 886, 889 (9th Cir. 1980). As discussed more

fully below, the interests of justice and judicial economy

would best be served if Woodward’s claims are dismissed

and the court retains jurisdiction over the Yellow Bus

and Yellow Bus officers counterclaims. Further, with re-

gard to Yellow Bus (although not its officers), the court

has pendent jurisdiction over its state claims against

Woodward, since those claims, originally brought as coun-

terclaims in Woodward, were asserted again by Yellow

Bus as claims in Yellow Bus, and are still pendent to the

federal RICO claim that remains against Woodward indi-

vidually. Thus, because dismissal of Woodward’s original

claims is in the interest of judicial economy and presents

no jurisdictional bar to the continued assertion of any

counterclaims, the court granted Woodward’s motions

to dismiss.

40a

B. Motion for Summary Judgment and/or to Dismiss

filed by Local 639

Local 639 filed a motion for summary judgment seek-

ing the dismissal of Yellow Bus’ claims against the union

asserted in the Yellow Bus complaint. The union argues

that Yellow Bus’ RICO and secondary boycott claims

against the union should be dismissed on summary judg-

ment, and that the pendent state tort claims against the

the union should then be dismissed for lack of subject

matter jurisdiction. For the reasons discussed below, the

court held on June 1, 1984 that the union’s motion would

be granted with respect to the RICO and secondary boy-

cott claims, but that the state tort claims would not be

dismissed.

All of Yellow Bus’ claims against the union arise out

of events which occurred during and shortly after

the November, 1981 strike. Yellow Bus alleges that

James Woodward and others, at the union’s direction,

engaged in various illegal acts, including threats, vio-

lence, extortion, arson, and property destruction in an

effort to intimidate Yellow Bus into recognizing Local

639 as the exclusive bargaining representative of its em-

ployees. Yellow Bus alleges that these actions constituted

a pattern and practice of illegal acts by Woodward and

the union designed to further the union’s organizing goals

and in violation of the Racketeering Influenced & Corrupt

Organizations Act (RICO). Further, Yellow Bus alleges

that threats and acts of violence against two secondary

businesses—the Jewish Day School and McMichael Bus

Service—constituted an illegal secondary boycott pro-

hibited by the National Labor Relations Act, and that the

union committed several state law torts against Yellow

Bus during and after ‘he strike.

1. The RICO claim against Local 639.

In Count One of the Yellow Bus complaint, Yellow Bus

seeks treble damages and attorneys’ fees against both

ha + 2c ns

4la

Woodward and Local 639 under the RICO Act, 18 U.S.C.

§§ 1961 et seg. In pertinent part, 18 U.S.C. § 1962(c),

which Yellow Bus alleges the union has violated, reads as

follows:

It shall be unlawful for any person employed by or

associated with any enterprise . .. to conduct or

participate, directly or indirectly, in the conduct of

such enterprise’s affairs through a pattern of rack-

eteering activity....

18 U.S.C. § 1962(c) [emphasis added]. Here Yellow Bus

claims that Woodward, an officer in Local 639, and Local

639 itself are “persons” within the meaning of the Act,

and that they both engaged in a “pattern of racketeering

activity” to further the enterprise’s goal of unionizing”

Yellow Bus. Yellow Bus maintains that the “enterprise”

in this case is made up of both Woodward and Local 639.

Yellow Bus catalogues numerous “predicate acts” alleg-

ediy committed by Woodward or the union in furtherance

of the goals of the “enterprise.” Yellow Bus further

alleces that the “predicate acts” are crimes under local

law, and that these acts of violence and extortion, which

occurred around the time of the strike, form a “pattern”

of racketeering activity.

Local 639 challenges Yellow Bus’ RICO claim against

it on several grounds. The court, however, finds it un-

necessary to address each of these grounds because it

finds that one of them is dispositive. Even if the court

were to find that Yellow Bus had properly pled the

existence of qualified “predicate acts,” had shown that

these acts formed a “pattern of racketeering activity,”

and had alleged a “RICO” injury, the court would find

that Yellow Bus’ RICO claim against the union must fail

because, under the facts alleged or admitted by Yellow

Bus, Local 639 is not a suable “person” but is a non-

suable RICO “enterprise.”

The court is persuaded by the reasoning of the RICO

cases which have held that RICO was not intended to

42a

impose civil liability upon a criminal “enterprise,” but

was intended to allow monetary recovery only against

“persons” who have participated in the affairs of an

enterprise through a pattern of racketeering activity,

Saine v. A.I.A., Inc., 582 F. Supp. 1299, 1306-07 (D.C.

Col. 1984) ; Fields v. National Republic Bank of Chicago,

546 F. Supp. 123, 124 n.5 (N.D. Ill. 1982); Bays v.

Hunter Savings Assoc., 5389 F.Supp. 1020, 1024 (S.D.

Ohio 1982); Van Schaick v. Church of Scientology of

California, Inc., 585 F. Supp. 1125, 1186 (D. Mass.

1982), see also Parnes v. Heinold Commodities, Inc., 548

F. Supp. 20, 23 (N.D. Ill. 1982). As the court stated in

Bay, supra,

The language of § 1962 clearly contemplates the in-

teraction of a person and an enterprise, both sepa-

rately defined by the Act. RICO prohibits any per-

son, employed by or associated with an enterprise,

from participating in the conduct of such enterprise

through a pattern of racketeering activity. RICO

does not hold the enterprise . . . liable, but only

those persons who seek to participate in the affairs of

the enterprise through a pattern of racketeering ac-

tivity. .. . The language of RICO has been found

to be ambiguous on other issues, but we find this

language is clear and that our interpretation is

supported by the case law.

539 F. Supp. at 1023-24. It is true, as Yellow Bus con-

tends, that a union local can sometimes be considered a

“person” under RICO, and in some circumstances may

be sued in this capacity. For example, if a union local

was engaging in a pattern and practice of racketeering

in order to aid an outside criminal organization in the

achievement of some objective, then the local may be

considered a RICO “person” and the overarching organi-

zation an “enterprise.” However, a union local cannot

simultaneously be considered a RICO “person” and a

RICO “enterprise.” As the majority of courts, including

eee

oe Mate Ren SN,

43a

all of the courts analyzing RICO civil liability and the

one court from the District of Columbia that has ad-

dressed this issue have held, a RICO “enterprise” cannot

simultaneously be a RICO “person’”/defendant. Rae v.

Union Bank, 725 F.2d 478, 481 (9th Cir. 1984) ; Bennett

v. Berg, 685 F.2d 1058, 1061 (8th Cir. 1982), cert. denied

sub nom., Prudential Insurance Co. v. Bennett, 104 S.Ct.

527 (1983); United States v. Computer Sciences Corp.,

689 F.2d 118i, 1190 (4th Cir. 1982), cert. denied, 103

S.Ct. 729 (1983) ; Saine, 582 F. Supp. at 1306-07; Guer-

rero v. Katzen, 571 F. Supp. 714, 722 n.9 (D.D.C. 1983) ;

Van Schaick, 535 F. Supp. at 1136. The few cases that

have permitted such identity of RICO “person” with

RICO “enterprise” are distinguishable or unpersuasive.*

Therefore, if Local 639 in this case is properly viewed as

the “enterprise,” it is not a suable “person” under RICO.

Yellow Bus attempts to circumvent this legal difficulty

in an effort to reach the economically viable union by

alleging that the “enterprise” here is not simply Local

639, but is the union plus Woodward.* But Yellow Bus

3 Yellow Bus points to two cases which have held that the “enter-

prise” and the “person” can be the same entity in some circum-

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

1982), cert. denied, 103 5.Ct. 815 (1983); United States v. Benny,

559 F. Supp. 264, 267-71 (N.D. Cal. 1983). Both were criminal

cases, and, as Fields pointed out, their logic, even if accepted in

this Circuit, would not necessarily apply to civil cases, Fields, 546

F. Supp. at 124 n.5. Further, in Hartley unique facts would have

made it possible for the government to charge the person/enterprise

without facing the “identity” problem by drawing the indictment

in an equally logical but different way. As discussed infra, n.5, this

is not the case here. Finally, although Benny offers the strongest

support for Yellow Bus’ position on this isue, it was implicitly

reversed by the Ninth Circuit’s decision in Rae v. Union Bank,

725 F.2d 478, 481 (9th Cir. 1984).

4 This is not completely clear from the face of Yellow Bus’ Com-

plaint. It alleges that “defendants” are the “enterprise” and that

“defendants” violated RICO. Such confused, or “blurred’’, defini-

tions have been held to bar recovery under RICO, see Guerrero v.

44a

also alleges, and it is uncontradicted, that Woodward is

an officer (business agent) in Local 639. The court fails

to see any distinction between the union as an entity, of

which Woodward is already included as an officer, and

the union plus Woodward. The whole is no different than

the sum of its parts in this context. Hence the “enter-

prise” in this case, as argued by Local 639, is properly

viewed as Local 639 by itself. Local 639’s goals are

allegedly being furthered by Woodward’s racketeering

activities, and Woodward is clearly “employed by and

associated with’ Local 639. The union is the sort of

distinct legal entity that is logically labelled a RICO

“enterprise.” On the other hand, the “enterprise” al-

leged by Yellow Bus is a contrived partnership that is

no different in fact or legal significance than the union

by itself, since Woodward is a union officer. Because

the union is properly viewed as the “enterprise” in this

case, it is not suable, for the related reasons discussed

above that RICO does not contemplate suits against an

“enterprise,” and that an entity cannot be considered a

(suable) RICO “person” if it is properly classified as the

“enterprise.” ®

Katzen, 571 F. Supp. 714, 722 (D.D.C. 1983). Nevertheless, since

Yellow Bus asserts in its pleadings that it intends the “enterprise”

to be defined as Local 639 plus Woocward, the court will begin its

analysis by accepting that allegation.

5 See cases cited supra. Yellow Bus argues that there is no reason

why the enterprise cannot consist of a union plus one of its officers.

It argues that this is analogous to an enterprise consisting of a

corporation plus its officers, and that such “enterprises” have been

approved in Moss v. Morgan Stanley, Inc., 719 F.2d 5 (2d Cir.

1983), cert. denied sub nom., Moss v. Newman, 104 S.Ct. 1280

(1984). However, Moss did not approve of such an enterprise—the

RICO enterprise there consisted of three corporate officers (and

not the corporation), id. at 22. Further, in Moss, where the cor-

poration was originally named as a RICO defendant, the district

judge dismissed the corporation—analogous to this court’s dis-

missal of the union as a defendant, id. at 9 n.4. In the one other case

pointed to by Yellow Bus in which a union was sued together with

le tO OS ets ted Et a et

45a

If this court were to allow a RICO “enterprise” to be

defined as a legally distinct umbrella organization plus

one of its officers, or subparts, then civil RICO plaintiffs

would always be able to sue the umbrella organization

its officers under RICO, the union was also dismissed as a defendant,

United States v. Local 560, 581 F. Supp. 279, 337 (D.N.J. 1984).

Attempts to create an “enterprise” for RICO purposes have been

rejected when the enterprise is alleged to be an umbrella entity plus

one of its subparts. As Yellow Bus itself points out, the court in

United States v. Computer Sciences, 689 F.2d 1181, 1190 (4th Cir.

1982), cert. denied, 103 S.Ct. 729 (1983), saw no distinction be-

tween a corporation and its unincorporated subdivision, and held

that a RICO suit did not lie against the corporation because it

was really an “enterprise.”

Yellow Bus also apparently ignores the requirement that there

must be some proof that the enterprise alleged actually existed and

is not simply a legal fiction. As its pleadings filed subsequent to the

hearing indicate, Yellow Bus is eager to amend its complaint in any

way to avoid the legal bar against identity of RICO defendant and

RICO enterprise. But the new combinations it proposes are obvi-

ously not based in fact, and still do not qualify as enterprises that

would permit suit against the union as a defendant. In particular,

Yellow Bus’ proposal to name Yellow Bus as the enterprise would

not permit suit against the union because the union’s acts were not

committed in the conduct of Yellow Bus’ affairs; Yellow Bus was,

if anything, merely the “setting” for the union’s activities, see

United States v. Scotto, 641 F.2d 47, 54-55 (2d Cir. 1980), cert.

denied, 452 U.S. 961 (1981); Engl v. Berg, 511 F. Supp. 1146, 1155

-(E.D. Pa. 1981). For this reason, and because Yellow Bus’ attempts

to change its definition of “enterprise” come too late and do not

properly defeat a summary judgment motion, the court denied

Yellow Bus’ motion to amend its complaint by interlineation.

The court also notes that its holding that the union cannot be sued

in this case in no way defeats Congress’ intent to stop union cor-

ruption through RICO prosecutions. First, even from the passage

in RICO’s legislative history cited by Yellow Bus, it is clear that

Congress intended to stop such corruption primarily by creating

a right of action against allegedly corrupt individuals within unions,

and did not clearly contemplate suits against the union itself as an

entity, see S. Rep. No. 91-617, 91st Cong., Ist Sess. at 78 (1969).

Second, as discussed supra, the court’s holding that the union as

an entity cannot be sued in this case does not imply that RICO

suits against unions would be barred in all cases.

46a

by simply alleging that the “enterprise” consists of the

organization plus one of its members, making the or-

ganization alone a distinct and suable RICO “person.” As

discussed above, RICO does not contemplate such suits

against organizations whose goals are allegedly being

furthered by the activities or groups within such organi-

zations; such organizations are labelled “enterprises.” In

fact, even in a case heavily relied upon by Yellow Bus for

the proposition that an entity can be both an enterprise

and a person under RICO, the court recognized that in

situations analogous to that presented here, the Act con-

templates suits against responsible individuals, not against

the organization they belong to, see United States v.

Benny, 559 F. Supp. 264, 269 (N.D. Cal. 1983) (“The

argument against identification of defendant and enter-

prise might be viable where a corporate [or union] de-

fendant is involved. In such a situation, the government

remains able to prosecute the culpable individuals—

agents, officers, employees—associated with the corporate

[or union] enterprise.’’) ; see also Saine, 582 F. Supp. at

1306-07 & n.7. Here, Yellow Bus is free to proceed with

its RICO claim against Woodward, but its claim against

Local 639 must be dismissed, since Local 639 is properly

viewed as the “enterprise” and cannot be sued as a RICO

defendant.

2. The “secondary boycott’ claim against Local 639

It is an unfair labor practice under § 8(b) (4) of the

National Labor Relations Act, 29 U.S.C. § 158(b) (4), to

engage in what has come to be known as a “secondary

boycott” during a labor dispute with the “primary” em-

ployer. The statute bans “secondary” activity, but simul-

taneously protects “primary” activity; and as the United

States Supreme Court has noted, the dividing line between

the two is often very difficult to draw, see Brotherhood

of Railroad Trainmen v. Jacksonville Terminal Co., 394

U.S. 369, 388, 89 S.Ct. 1109, 1121 (1969) ; United Steel-

—

workers v. N.L.R.B., 376 U.S. 492, 496, 84 S.Ct 899, 902

(1964). The problem stems from the fact that all primary

strikes have the intentionally coercive effect of prevent-

ing others from doing business with the primary em-

ployer, in apparent violation of § 8(b) (4), yet such pri-

mary activity is clearly permissible under federal labor

statutes in general and has been repeatedly held not to

violate § 8(b) (4) in particular. After careful considera-

tion, the court has concluded that the activities alleged by

Yellow Bus to be “secondary” in this case, although

violent and possibly illegal under other provisions of law,

are not secondary activities violative of § 8(b) (4).

Yellow Bus, in its Complaint, does not specifically

enumerate which alleged acts are deemed to constitute

unlawful secondary activity, but instead merely refers to

a catalogue of acts set forth in {| 7 of its Complaint and

alleges that, taken together, they constitute a violation

of §8(b) (4). Most of these acts are clearly primary

activity, despite counsel’s cursory argument to the con-

trary.* However, four of the alleged acts arguably con-

stitute secondary activity, and have been the focus of

debate on this issue. First, Yellow Bus alleges that de-

fendants ice-picked the tires of six buses parked on the

lot of the Jewish Day School, Yellow Bus’ most important

contract. Yellow Bus Complaint at | 7(b). Second, Yel-

low Bus alleges that strikers told the parents of Jewish

Day School (“JDS”) children that drivers were car7y-

ing guns and that the brake lines of the buses used during

the strike would be cut. Jd. at 1 7(0), (p). Third, an

® Counsel for Yellow Bus argued that violence directed against

the private property of Yellow Bus employees who refused to strike,

see Complaint at {| 7(h)-(1), constituted secondary activity barred

by § 8(b)(4), and that the strikers’ refusal to permit Yellow Bus

buses to leave the lot, because it prevented Yellow Bus from doing

business with others, also constituted a violation of § 8(b)(4).

Such activity, however, because directed exclusively at Yellow Bus

and its employees, is primary activity and not violative of § 8(b) (4)

despite its incidental effects.

48a

agent of defendants’ allegedly telephoned McMichael Bus

Service, which was handling Yellow Bus routes during

the strike, and said that if McMichael Bus continued to

assist Yellow Bus during the strike it would get “the

same treatment.” Jd. at {7(q). Fourth, an unknown

agent of defendants allegedly cut the brake lines on a

McMichael Bus used during the strike to assist Yellow

Bus. Id. at ] 7(r).

All of these acts are violent or threatening in nature,

and constitute reprehensible behavior, if they in fact oc-

curred. However, the Supreme Court has explicitly held

that ever violent and threatening acts are not violations

of §$8(b) (4) if they are primary, and not secondary,

activities. United Steelworkers, 376 U.S. at 501-502, 84

S.Ct. at 905; accord, Federal Prescription Service v.

Amalgamated Meat Cutters, Inc., 527 F.2d 269, 274 (8th

Cir. 1975); Clark Engineering & Construction Co. v.

United Brotherhood of Carpenters, 510 F.2d 1075, 1081

(1975). In other words, the violent nature of defendants’

alleged activity does not transform it into secondary ac-

tivity; the court must proceed to analyze each act to de

termine if it is properly classified as “primary” or unlaw-

ful “secondary” activity.

The two alleged acts against McMichael Bus Service,

upon even cursory examination, are not proscribed sec-

ondary activity because they were directed against an

entity *hat was hired by Yellow Bus to handle work that

would ciherwise have been performed by striking em-

ployees. Yellow Bus so alleges, see Complaint at { 7(q),

and the role of McMichael was confirmed by Yellow Bus’

counsel during oral argument. McMichael is therefore

an “ally” of Yellow Bus, and Yellow Bus employees had

a legitimate primary interest in preventing it from per-

forming work in place of themselves. Carpet, Lenoleum,

Etc., Local Union No. 419 v. N.L.R.B., 429 F.2d 747,

752-54 (D.C. Cir. 1970); N.L.R.B. v. Business Machine

& Office Appliance Mechanics, Etc., (“Royal Type-

oes a oly La

49a

writer”), 228 F.2d 553, 558-59 (2d Cir. 1955); see

Jacksonville Terminal Co., 394 U.S. at 388-89, 89 S.Ct. at

1121. The acts alleged against McMichael are therefore

not “secondary” activity, and are not proscribed by § 8

(b) (4).

The striking employees’ alleged ice-picking of the

tires of Yellow Bus’ buses parked on the Jewish Day

School lot is also properly considered primary activity,

even though it has the incidental effect of penalizing JDS

for doing business with Yellow Bus, and of preventing

such business. First, it is not clear from the facts alleged

or proffered that the strikers’ activity was aimed directly

at JDS or its employees; to the contrary, the destruction

of Yellow Bus’ property appears to have been aimed

directly at Yellow Bus. In any event, the dispositive

point is that because Yellow Bus routinely parked its

buses at JDS, a fact not controverted by Yeliow Bus,

activity at the JDS lot must be considered primary, and

is not violative of § 8(b) (4) under the “common situs”

doctrine, Teamsters Local 294 (Montgomery Ward Co.),

192 NLRB 155 (1972); see United Steelworkers, 376

U.S. at 496-500, 84 S.Ct. at 902-904; accord, Jackson-

ville Terminal Co., 394 U.S. at 388-390, 89 S.Ct. at 1121-

22. Again, although the alleged violent and destructive

nature of the strikers’ alleged activity is condemnable,

because it was directed against Yellow Bus’ property

parked in its usual location, the activity does not fall

within the prohibition of § 8(b) (4).

Finally, the court has concluded that the strikers’ al-

leged threats directed against parents of JDS children

cannot be considered proscribed secondary activity. The

threat allegedly made to Mr. Sotsky was uttered from

picketers at the Yellow Bus premises, see Sotsky Affidavit,

filed in Woodward on July 14, 1983. There is no indica-

tion that the strikers were interested in unionizing JDS

employees or in closing down JDS—their clear intention

was to stop JDS from using Yellow Bus buses during the

50a

strike. Coercion against JDS parents, whose children rode

Yellow Bus buses, is analogous to picketing of a primary

employers’ wholesale buyer’s premises to persuade retail

consumers from buying the primary employer’s product

from the picketed store. Under the “Tree Fruits” doc-

trine, such activity directed against consumers is not vio-

lative of § 8(b) (4), N.L.R.B. v. Vegetable Packers and

Warehousemen, Local 760, 377 U.S. 58, 84 S.Ct. 1063

(1964); Local 14055, United Steelworkers of America v.

N.L.R.B., 524 F.2d 853 (D.C.Cir. 1975), vacated and

remanded due to intervening circumstances, Dow Chemi-

cal Co. v. Local 14055, United Steelworkers, 429 U.S. 807

(1976).

In sum, none of the activities alleged by Yellow Bus

constitute unlawful secondary activity, even though they

may have had an incidental effect of coercing others not

to do business with Yellow Bus. Therefore, even if Yellow

Bus’ Complaint is taken as true, Local 639 has not vio-

lated § 8(b) (4), and summary judgment was granted in

the union’s favor on Count Two.

3. Yellow Bus’ state tort claims against Local 639

The merits of Yellow Bus’ tort claims against Local

639, alleged in Counts Three through Five of the Yellow

Bus Complaint, were not extensively contested by the

union in its motion for summary judgment. Instead,

Local 639 argued that because these claims are pendent

to Yellow Bus’ federal claims, dismissal of the federal

claims should result in dismissa] of the state claims for

lack of subject matter jurisdiction. However, although

United Mine Workers of America v. Gibbs, 383 U.S. 715,

86 S.Ct. 1130 (1966) recommends dismissal of pendent

claims if federal claims are dismissed prior to trial, it

does not require it. To the contrary, Gibbs makes it clear

that the court has jurisdiction to hear such claims, and

that it is within the court’s discretion to retain jurisdic-

tion over the state claims if such action is in the interest

5la

of judicial economy, convenience, and fairness to liti-

gants, id., 383 U.S. at 726, 86 S.Ct. at 1139. In this

case, the court finds that retention of Yellow Bus’ state

claims serves these interests. This case was filed over

18 months ago, and numerous depositions have already

been taken. The parties are fully prepared to go forward

in this court. There is still one federal claim in the case

(a RICO claim against Woodward). According to Local

639’s Statement of Material Facts, there is also diversity

of citizenship between Yellow Bus and the union, so if

the court were to dismiss Yellow Bus’ pendant claims

against the union here, Yellow Bus could refile those same

tort claims in federal court as a diversity action. The

court, therefore, has elected to retain its jurisdiction

over the tort claims brought by Yellow Bus against the

union, to be tried along with the other remaining claims

by Yellow Bus and its officers against Woodward. Such

retention of jurisdiction after dismissal of federal claims

has commonly been upheld, see, e.g., Rosado v. Wyman,

397 U.S. 397, 402-05; 90 S.Ct. 1207, 1212-14 (1970);

Lentino v. Fringe Employee Plans, Inc., 611 F.2d 474,

479 (3d Cir. 1979); Gray v. International Ass’n of Heat

& Frost Insulators, 447 F.2d 1118, 1120 (6th Cir. 1971);

Gem Corrugated Box Corp. v. National Kraft Container

Corp., 427 F.2d 499, 501 n.1 (2d Cir. 1970).

/s/ Thomas A. Flannery

United States District Judge

52a

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

Civil Action No. 82-3154

JAMES F. WOODWARD,

Plaintiff,

Vv.

MICHAEL DIPALERMO, et al.,

Defendants.

Civil Action No. 83-1232

YELLOW Bus LINES, INC.,

Plaintiff,

DRIVERS, CHAUFFEURS & HELPERS

LOCAL UNION 639, et al.,

Defendants.

[Filed June 1, 1984]

ORDER

This matter came before the court on several motions

that call for resolution prior to pretrial. A hearing was

held on all of these motions on May 31, 1984, and the

court has carefully considered the arguments advanced

by counsel at the hearing and in the papers filed. In the

near future, the court will issue a Memorandum Opinion

to explain the reasons for this Order, but in order to

53a

apprise the parties of the court’s disposition of all pend-

ing motions most expeditiously, the court has decided to

issue this Order prior to issuing its opinion. Accordingly,

for the reasons to be stated in a forthcoming Memoran-

dum Opinion, after careful consideration of the pending

motions, the oppositions thereto, arguments of counsel,

and the entire record in this case, it is, by the court, this

1st day of June, 1984,

ORDERED that Yellow Bus’ Notice of Appeal from

the Magistrate’s April 18, 1984 Order regarding use of

expert witnesses is denied; and it is further

ORDERED that the motion for dismissal of James

Woodward’s action against the District of Columbia and

Michael DiPalermo is granted; and it is further

ORDERED that James Woodward’s oral motion to dis-

miss all remaining claims brought by him is granted;

and it is further

ORDERED that defendant Local 639’s motion for sum-

mary judgment and/or to dismiss is granted in part and

denied in part; and it is further

ORDERED that defendant Local 639’s motion for sum-

mary judgment is granted with respect to Count I of

Yellow Bus’ complaint, the RICO claim; and it is further

ORDERED that defendant Local 639’s motion for sum-

mary judgment is granted with respect to Count II of

Yellow Bus’ complaint, the secondary boycott claim; and

it is further

ORDERED that defendant Local 639’s motion for sum-

mary judgment is denied with respect to Counts III, IV

and V of Yellow Bus’ complaint, as the court has deter-

mined it would not be in the interests of justice or judi-

cial economy to dismiss these pendent claims at this late

stage of the litigation; and it is further

54a

ORDERED, sua sponte, that, in the interests of justice,

Yellow Bus’ secondary boycott claim against pro se de-

fendant Woodward, in Count II of Yellow Bus’ complaint,

is dismissed; and it is further

ORDERED that Yellow Bus’ motion for leave to file

amendment by interlineation is denied.

/s/ Thomas A. Flannery

United States District Judge

55a

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

Civil Action No. 82-3154

JAMES F. Woopwarp,

Plaintify,

Vv.

MICHAEL DIPALERMO, et al.,

Defendants.

Civil Action No. 83-1232

YELLOW Bus COMPANY, INC.,

Plaintiff,

DRIVERS, CHAUFFEURS & HELPERS

LOCAL UNION 6389, et al.,

Defendants.

[Filed Oct. 27, 1984]

ORDER

This matter came before the court on defendant Local

639’s motion for summary judgment and/or to dismiss,

or, in the alternative, for a separate trial. For the rea-

sons set forth in the accompanying Memorandum, and

after careful consideration of defendant’s motion, plain-

tiff’s several oppositions thereto, and the entire record in

this case, it is, by the court this 29th day of October,

1984,

56a

ORDERED that defendant Local 639’s motion for sum-

mary judgment and/or to dismiss or, in the alternative,

for a separate trial is denied; and it is further

ORDERED that defendant Local 639’s request that

plaintiff's RICO claim against defendant Woodward be

dismissed is granted; and it is further

ORDERED that pretrial and trial dates for plaintiff’s

remaining claims will be established at a status confer-

ence to be held on November 9, 1984 at 9:30 a.m.

/s/ Thomas A. Flannery

United States District Judge

57a

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

Civil Action No. 82-3154

JAMES F. WOODWARD,

Plaintiff,

MICHAEL DIPALERMO, et al.,

Defendants.

Civil Action No. 83-1232

YELLOW Bus COMPANY, INC.,

Plaintiff,

DRIVERS, CHAUFFEURS & HELPERS

LOCAL 639, et al.,

Defendants.

[Filed Oct. 29, 1984]

MEMORANDUM

This matter came before the court on a motion by

defendant Drivers, Chauffeurs & Helpers Local Union 639

(“Local 639” or “union”) for summary judgment and/or

to dismiss or, in the alternative, for a separate trial. For

the reasons stated herein, defendant’s motion to dismiss

is granted in part and denied in part. The court will

dismiss the RICO claim against defendant Woodward,

but retain jurisdiction over the remaining state tort

claims against Woodward and Local 639.

58a

The facts and background of this case are set forth in

the court’s previous Memorandum opinion of June 28,

1984. For the reasons set forth therein, the court dis-

missed plaintiff’s two federal claims against defendant

Local 639. However, the court elected to retain jurisdic-

tion over plaintiff’s four state tort claims against the

union, and to try those claims along with plaintiff’s

claims against Local 639 business agent Woodward for

violation of the Racketeering Influenced & Corrupt Or-

ganizations Act (“RICO”) and for allegedly committing

several state law torts.

Although recent decisions of the United States Court of

Appeals for the Second Circuit now convince the court

that plaintiff’s RICO claims against defendant Woodward

must be dismissed on summary judgment, the court is

persuaded that under Rule 41{a) (2) of the Federal Rules

of Civil Procedure and the doctrines of pendent and an-

cillary jurisdiction it has both the obligation and the

authority to retain jurisdiction over the remaining state

law claims in this case. Because the court has dismissed

the RICO claim against Woodward, any danger of con-

fusion and prejudice to defendant Local 639 by trying

these cases together has been eliminated, and the union’s

motion for a separate trial will therefore be denied.

- DISCUSSION

1. The RICO claim against Woodward

Yellow Bus seeks treble damages and attorneys’ fees

under the RICO Act, 18 U.S.C. §§ 1961 et seg. Section

1962(c), which Yellow Bus alleges Woodward has vio-

lated, makes it

unlawful for any person employed by or associated

with any enterprise engaged in, or the activities of

which affect, interstate or foreign commerce, to con-

duct or participate, directly or indirectly, in the con-

59a

duct of such enterprise’s affairs through a pattern of

racketeering activity ....

18 U.S.C. § 1962(c). Section 1962(d) prohibits any con-

spiracy to violate subsection (c). Yellow Bus claims it is

entitled to relief for alleged violations of these RICO pro-

visions under section 1964(c), the so-called “civil RICO”

provision, which provides that

[a]ny person injured in his business or property by

reason of a violation of section 1962 ... may sue

therefore in any appropriate United States district

court and shall recover threefold the damages he sus-

tains and the cost of the suit, including a reasonable

attorney’s fee.

18 U.S.C. § 1964(c).

Defendant argues that the civil remedy under section

1964(¢c) is available only to plaintiffs who can demon-

state a separate and distinct injury caused by the pattern

of racketeering activity rather than by the underlying

predicate acts that constitute the pattern. In adopting

defendants’ position, the court recognizes that the mean-

ing of section 1964(c) is still in dispute. Nevertheless,

the court holds that recent rulings on this precise issue

by the Second Circuit Court of Appeals, as well as prior

rulings by this and other district courts, are persuasive.’

1JIn late July, 1984, the United States Court of Appeals for the

Second Circuit announced decisions in three cases which support

defendant’s position on a moie narrow interpretation of the ci’

remedy under section 1964(c). In Bankers Trust Co. v. Rhoades,

the court affirmed the dismissal of a complaint for failure to state

a claim under the civil RICO provision. No. 83-7636 (2d Cir. July

26, 1984). The court held that although the complaint alleged a

scheme to defraud plaintiff through concealment of assets and

bribery, slip op. at 3, the injury alleged was only caused by the

individual predicate acts, rather than “a distinct RICO injury, i.e.,

an injury caused by a violation of § 1962.” Slip op. at 15. Re-

jecting plaintiff’s argument that it is conceptually impossible to

distinguish between the injury flowing from the predicate acts and

60a

On the authority of those decisions, the court thus holds

that

the injury flowing from a “pattern of racketeering activity,” the

court held that

[il]f a plaintiff’s injury is caused by the predicate acts them-

selves, he is injured regardless of whether or not there is a

pattern; hence he cannot be said to be injured by the pattern,

and the pattern cannot be said to be the but-for cause of the

injury.

Slip op. at 14 (emphasis in oviginal).

In Sedima, S.P.R.L. v. Imrex Co., Inc., No. 83-7965 (2d Cir.

July 25, 1984), the court similarly affirmed the dismissal of a

civil RICO action for failure to allege a “RICO-type injury” and for

the additional reason that a prior criminal conviction is a prerequi-

site to a civil RICO action. Slip op. at 20. As in Bankers Trust,

the court in Sedima held that the “by reason of” language in sec-

tion 1964 “requires that plaintiffs allege injury caused by an ac-

tivity which RICO was designed to deter, which, whatever it may

be, is different from that caused simply by such predicate acts as

are alleged here.” Slip op. at 16-17. The court held that the “by

reason of” language was intended as a standing limitation, allowing

a plaintiff to bring an action under civil RICO only upon a showing

of the harm that RICO was intended to prevent, that is, the “sys-

temic harm to competition and the market” caused by the infiltra-

tion of legitimate enterprises by mobsters and organized crime.

Slip op. at 19. The court further held that a plaintiff may not bring

a private civil RICO action absent criminal convictions on the under-

lying predicate offenses. Slip op. at 32. While this court declines

to adopt the latter holding on the necessity of a criminal conviction,

Sedima is persuasive on the need for an allegation of a “RICO-type

injury” in addition to the injury caused by the underlying predi-

cate acts. Finally, in a third case, Furman v. Cirrito, No. 84-7113

(2d Cir. July 27, 1984), the court disagreed with Bankers Trust

and Sedima on the “RICO injury” issue, but abided by the prior

rulings and affirmed the district court’s dismissal on the -asis that

the plaintiff had failed to allege a “separate, distinct racketeering

enterprise injury.” Slip op. at 2.

The position that an action under section 1964(c) must allege

more than the commission of the underlying crimes also finds sup-

port in a prior decision of this court. In Guerrero v. Katzen, 571

F. Supp. 714 (D.D.C. 1983), Chief Judge Robinson held that based

on the “by reason of” language of section 1964(c), a plaintiff must

6la

if a complaint alleges a proprietary injury that is

caused by the defendant’s predicate acts, rather

than by its use of a pattern of racketeering activity

in connection with a RICO enterprise, the injury

cannot be said to have been caused by ‘a violation -

of section 1962.’

Bankers Trust Co. v. Rhoades, et al., Civ. No. 83-7636,

slip op. at 13 (2d Cir. July 26, 1984).

The question then remains whether, as in Bankers

Trust, Sedima, and Guerrero, Yellow Bus has failed to

state a valid claim under civil RICO. That question must

be answered in the affirmative. The only injuries al-

leged by Yellow Bus result as a direct consequence of the

predicate acts, and involve no distinct proprietary in-

jury caused by a RICO violation. See Bankers Trust,

slip op. at 10, 13. A civil RICO plaintiff must “show

injury different in kind from that occurring as a result

of the predicate acts themselves, or not simply caused

by the predicate acts, but also caused by an activity

which RICO was designed to deter.” Sedima, S.P.R.L.

v. Imrex Co., Inc., No. 83-7965, slip op. at 20 (2d Cir.

July 25, 1984); see also Guerrero v. Katzen, 571 F.

Supp. 714, 718-19 (D.D.C. 1983). Here, in contrast,

Yellow Bus has failed to allege any injury apart from

that which would result directly from the alleged predi-

cate acts ennumerated in paragraph 12 of its complaint.

An interpretation of RICO broad enough to encompass

the allegations in plaintiff’s complaint would effectively

federalize the state claims underlying Yellow Bus’ com-

allege that the injuries sustained were caused by the “distinctive

RICO violation, and not simply by the commission of the predicate

offenses.” 517 F. Supp. at 718. “In other words,” the court held,

“a plaintiff must plead a ‘RICO injury’ or a ‘racketeering enterprise

injury.’” Id. Because the RICO allegations made by plaintiff were

deemed to add nothing to the substance of plaintiff’s claim that it

was injured by reason of defendant’s fraud, the court held that

plaintiff had failed to state a claim under civil RICO. Jd. at 720-22.

62a

plaint, enabling plaintiffs to sue for treble damages and

attorney’s fees under RICO “nearly anytime they could

allege injury caused by two acts which are violations

of any one of the predicate acts listed in RICO.” See

Sedima, slip op. at 5. That is an outcome which, at least

absent guidance from our own Court of Appeals, this

court refuses to accept.

Although the court’s resolution of the availability of

a RICO cause of action against Woodward eliminates

the last remaining federal claim in the suit between

Woodward and Yellow Bus, the court will still exercise

jurisdiction over the remaining state law claims. As the

court previously held, it retains ancillary jurisdiction

over the state-based counterclaims originally filed by the

Yellow Bus officers and by Yellow Bus in the Woodward

case after Woodward’s original claim was dismissed. See

June 28, 1984 Memorandum at 5 and cases cited therein.

Indeed, as the court recognized in its June 28 Memoran-

dum, dismissal of Woodward’s federal claims in the

original Woodward action would have been improper un-

less the counterclaims could remain pending for inde-

pendent adjudication by this court. See Fed. R. Civ. P.

41(a)(2). Since this court’s jurisdiction over the state

law counterclaims thus did not depend upon the exist-

ence of the federal RICO allegation against Woodward,

dismissal of that claim does not deprive this court of

jurisdiction over the remaining state law claims.

2. Jurisdiction over state tort claims against Local

639

When the court issued its June 28, 1984 Memorandum,

it was under the impression that there was diversity

of citizenship between Local 639 and plaintiff Yellow

Bus. See June 28, 1984 Memorandum at 17. The court

reasoned that dismissal of plaintiff’s state law claims

against the union, which had been pending for many

months, would have been an empty exercise, since plain-

63a

tiff could have turned around the next day and filed a

diversity action against the union in federal court. In

addition, the court recognized that this case had already

been before the court for more than eighteen months,

and that numerous depositions had already been taken.

Therefore, the court held that the interests of judicial

economy, convenience, and fairness to litigants would all

be furthered by retaining jurisdiction. See id. at 16-17.

It has since come to the court’s attention that there

is no diversity between Local 639 and plaintiff. See

United Steel Workers v. R.H. Bouligny, Inc., 382 U.S.

145, 86 S. Ct. 272 (1965). In Bouwligny, the Supreme

Court held that an unincorporated labor union was not

a citizen of the state in which it had its principal place

of business for purposes of federal diversity jurisdiction,

but rather that its citizenship was that of each of its

members. /d., 382 U.S. at 153, 86 S. Ct. at 276. In the

present case the plaintiffs claim citizenship in Maryland

and Virginia. The union members reside, work, and

receive representation and other services from the union

in the District of Columbia, Maryland, and Virginia.

See Affidavit of John Catlett in Support of Defendant’s

Motion for Summary Judgment and/or to Dismiss. There-

fore, because Bouligny precludes recognition of the union

as a citizen solely of the District of Columbia for pur-

poses of diversity jurisdiction, there would be no di-

versity between Yellow Bus and Local 639 and plain-

tiff would be unable to obtain a federal forum for its

state law claims against the union if it brought a sepa-

rate suit in diversity.

Nevertheless, the court has decided to exercise its dis-

cretion under the doctrine of pendent jurisdiction to re-

tain jurisdiction over the remaining state law claims

against Local 639. Although the court’s discretionary

power to hear pendent state claims is not normally exer-

cised if the federal claims are dismissed prior to trial,

see United Mine Workers v. Gibbs, 383 U.S. 715, 726,.

64a

86 S. Ct. 1130, 1139 (1966), this court retains the power

to decide the pendent state claims, see Financial General

Bankshares, Inc. v. Metzger, 680 F.2d 768, 769 (D.C.

Cir. 1982), and considerations of judicial economy, con-

venience, and fairness to the litigants dictate that this

court retain jurisdiction.

Several factors demonstrate that this exercise of the

court’s discretion is proper. First, the court notes that

it was Woodward, not Yellow Bus or its officers, who

chose the federal forum to litigate the claims upon which

this case originated and upon which the subsequent

claims of the defendant union have been appended. In

the time that has passed since that original suit, new

nearly two years, Woodward, the union, Yellow Bus, and

its officers have expended considerable time and effort

in this court narrowing the issues and developing their

cases in preparation for trial. The remaining claims

against Woodward and Local 639 are virtually identical,

thus eliminating any likelihood of jury confusion in

treating divergent theories of relief as cautioned against

in Gibbs. 383 U.S. at 727, 86 S. Ct. at 1139. Further,

dismissal of the remaining RICO count against Wood-

ward removes the threat of prejudice to the union that

would be presented by trying the state claims against the

union together with the RICO count against Woodward.

In fact, with the RICO claim removed, counsel for Yel-

low Bus has represented that there will be an almost

complete identity between the evidence introduced against

Woodward and that presented to support Yellow Bus’

claim against Local 639. Finally, although some of plain-

tiff’s claims might properly be considered unusual, this

case will not require the court to resolve unsettled issues

of District of Columbia law more properly dealt with by

local courts. This court anticipates little difficulty in ob-

taining adequate guidance from local jurisprudence on

the issues of causation and damages presented in this

action. See Financial General Bankshares, Inc. v. Metzger,

65a

680 F.2d at 776. Given that this court may well be

required to address these issues in the context of the

counterclaims over which this court has ancillary juris-

diction in the Woodward case, no purpose would be served

by dismissing those same claims for local court adjudica-

tion in Yellow Bus. On the basis of all these factors, the

court holds that dismissing the pendent state tort claims

and forcing Yellow Bus to refile in the District of Co-

lumbia courts would not be a prudent exercise of this

court’s discretion. See Financial General Bankshares,

Ine. v. Metzger, 680 F.2d at 773.

For the reasons stated above, the remaining RICO

claim against Woodward is dismissed. The motion of

Local 639 for dismissal and/or a separate trial on the

remaining state law claims against it is denied. Pre-

trial and trial dates for the state law tort claims against

Woodward and Local 639 will be set at a status con-

ference to be scheduled by the court.

An appropriate Order accompanies this Memorandum.

/s/ Thomas A. Flannery

United States District Judge

66a

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

September Term, 1987

No. 86-5135

YELLOW BUS LINES, INC.,

Appellant

DRIVERS, CHAUFFEURS & HELPERS

LOCAL UNION 6339, et al.

Civil Action No. 83-01232

No. 86-5136

JAMES F’. WOODWARD

MICHAEL DIPALERMO, et al.

MARIA TRIGGS, SECRETARY /TREASURER,

YELLOW Bus LINES, et al.,

Appellants

Civil Action No. 82-03154

[Filed Feb. 12, 1988]

67a

Appeals from the United States District Court

for the District of Columbia

Before: WALD, Chief Judge, MIKVA and EDWARDS,

Circuit Judges.

JUDGMENT

These causes came on to be heard on the records on

appeal from the United States District Court for the

District of Columbia, and were argued by counsel. On

consideration thereof, it is

ORDERED and ADJUDGED, by the Court, that the

judgment of the District Court appealed from in these

causes is hereby affirmed in part and reversed in part,

and these cases are remanded, in accordance with the

Opinion for the Court filed herein this date.

Per Curiam

For the Court

/s/ Constance L. Dupre

CONSTANCE L. DUPRE

Clerk

Date: February 12, 1988

Opinion for the Court filed by Circuit Judge Mikva.

Concurring statement filed by Circuit Judge Edwards.

68a

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

September Term, 1987

No. 86-5135

YELLOW Bus LINES, INC.,

Appellant

Vv.

DRIVERS, CHAUFFEURS & HELPERS

LOCAL UNION 689, et al.

and consolidated case 86-5136

Civil Action No. 83-01232

[Filed Apr. 12, 1988]

Before: Wald, Chief Judge; Mikva and Edwards,

Circuit Judges.

ORDER

Upon consideration of Appeliees’ Petition for Rehear-

ing, Filed March 14, 1988, it is

ORDERED, by the Court, that the Petition is denied.

Per Curiam

FOR THE COURT:

CONSTANCE L. DUPRE

Clerk

By: /s/ Robert A. Bonner

ROBERT A. BONNER

Deputy Clerk

69a

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

September Term, 1987

No. 86-5135

YELLOW Bus LINES, INC.,

Appellant

DRIVERS, CHAUFFEURS & HELPERS

LOCAL UNION 639, et al.

and consolidated case 86-5136

C.V. No. 83-01232

[Filed Apr. 12, 1988]

Before: Wald, Chief Judge; Robinson, Mikva, Ed-

wards, Ruth B. Ginsburg, Starr, Silberman,

Buckley, Williams, D. H. Ginsburg and Sen-

telle, Circuit Judges

ORDER

Appellees’ Suggestion for Rehearing En Banc has been

circulated to the full Court. The taking of a vote thereon

was requested. Thereafter a majority of the Judges of

the Court in re

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