# Opposition Brief — Tatum v. Columbia Natural Resources, Inc.

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 1996
- **Citation:** 516 U.S. 1158

## Text

No. 95-880

IN THE
SUPREME COURT OF THE UNITED STATES
OCTOBER TERM, 1995

ZACHARY TATUM, STRATA EXPLORATION, INC.,
TATUM PETROLEUM OHIO, INC. and TATUM
PETROLEUM CORPORATION

Petitioners,
Vs.

COLUMBIA NATURAL RESOURCES, INC. and
STOCKER & SITLER OIL COMPANY,

Respondents,

On Petition for Writ of Certiorari to the United States
Court of Appeals for the Sixth Circuit

RESPONDENTS’ BRIEF IN OPPOSITION

JO ELLEN DIEHL YEARY DAVID D. NOBLE
COLUMBIA NATURAL Counsel of Record
RESOURCES, INC. JOHN E. SULLIVAN
Lawyer for Respondent NOBLE & SULLIVAN
900 Pennsylvania Avenue Lawyers for Respondents
Charleston, 1025 Huron Road
West Virginia 25362 Cleveland, Ohio 44115

(304) 353-5166 (216) 771-1212

i
QUESTIONS PRESENTED

Petitioners’ first two Questions Presented have been
reduced to one question. It has been altered to state the facts
described in the Amended Complaint.

I. Whether the "pattern of racketeering activity"
element in the Racketeer Influenced and Corrupt
Organization Act, 18 U.S.C. § 1962(c), is unconstitutionally
void for vagueness because it failed to notify Petitioners of
potential RICO liability while they were committing
hundreds of counts of mail fraud, 28 counts of wire fraud
and one instance of Travel Act fraud to perpetrate multiple
schemes over a period of twelve years.

Petitioners’ Third Question Presented is not
appropriate for their Application for Certiorari because it
was neither argued nor ruled upon in either the district or
circuit courts.

il
LIST OF PARTIES

The parties to the proceedings are:

Petitioners: Zachary Tatum, Strata
Exploration, Inc., Tatum Petroleum Ohio,
Inc. and Tatum Petroleum Corporation

Respondents: Columbia Natural Resources,
Inc. and Stocker & Sitler Oil Company

Respondents represent that Stocker & Sitler Oil
Company has no parent companies or nonwholly owned
subsidiaries to list for purposes of Supreme Court Rule 29.6.

Respondents also represent that Columbia Natural
Resources, Inc. is a wholly owned subsidiary of The
Columbia Gas System, Inc. of Wilmington, Delaware. It
has no nonwholly owned subsidiaries to list for purposes of
Supreme Court Rule 29.6.

ili

TABLE OF CONTENTS

Questions Presented ...........,000~2~C*”

cepts nly tell a

Opinions Below, Jurisdiction, And Constitutional

And Statutory Provisions as a ee

Statement Of The ee

UP OS re ce eee eee.

I. Petitioners have presented no
credible reason for this court
to grant the Wnit of Certiorari .. _ .

iv

Contents

Page
II. The "pattern of racketeering
activity" element in_ the
racketeer influenced and
corrupt organizations act, 18
U.S.C. §1962(c), meets the
due process requirement of
notice when applied to
petitioners who committed
hundreds of counts of mail
fraud, 28 counts of wire fraud
and one count of travel act
fraud over a period of at least

pS Gch ce leo eee es 18

III. The confusing third question
presented should be dismissed
because it was not raised in
either the district or circuit
courts and because it is
foreclosed by
SS ina 6 aka 60d ale oe ele 27

A. New Arguments Are Prohibited
ee sea eee ee 8s 27

B. The Apparent Argument ..... 28
os Turkette Has Settled This Issue . 29

CS C8 gb ok be doe CS ee eee 30

icoeinnemnaniemeebataieiaaanatinl

ee ee

V

Contents
Page

TABLE OF CITATIONS

Cases Cited:

Abell v. Potomac Ins. Co., 946 F.2d 1160 (Sth Cir. 1991),

cert. denied, 504 U.S. 911 (1992) .............. 8, 14
Aetna Casualty Sur. Co. v. P & B Autobody, 43 F.3d 1546

CP Fe eas ry ne ee 14
Aldridge v. Lily-Tulip, Inc., 953 F.2d 587 (11th Cir. 1992),
cert. denied, 116 S.Ct. 565 ee ne es eee 14
Allwaste, Inc. v. Hecht, 65 F.3d 1523 (9th Cir. 1995) .... 14
American Credit Indem. Co. y. Legge, 829 F. Supp. 649
aerial lt. MERE ER i Oe 9
American Eagle Credit Corp. v. Gaskins, 920 F.2d 352
escalates, MEET EOE OEP ee Lea 14
Apparel Art Int'l v. Jacobson, 967 F.2d 720

(5 CR. SO os eee 14
Arenson v. Whitehall Convalescent & Nursing Home,

880 F. Supp. 1202 (N.D. Ill. “as SG Cee Oe. 15
Atlas Pile Driving Co. v. DiCon Financial Co., 886 F.2d 986
Gere, Te kee iv eee eee 14
Banks v. Wolk, 918 F.2d 418 (3rd Cir. ie, PES pe 13

Beck v. Edward D. Jones & Co., 735 F. Supp. 903
2 I eer rar ks A ete 3 9

vi

Contents

Page
Bingham v. Zolt, 823 F. Supp. 1126 (S.D.N.Y. 1993) ..... 9
Bonton v. Archer Chrysler Plymouth, 889 F. Supp. 995
G.@. FR. TR a ae i Oe eee ees 15
Bowdoin Constr. Corp. v. Rhode Island Hosp. Trust
Nat'l Bank, 869 F. Supp. 1004 (D. Mass. 1994) ....... 15
Brook v. Schlesinger, 898 F. Supp. 1076 (S.D.N.Y.
FOGG) civ cndvcebsh te eee eee eae 15
Bseirani v. Mahshie, 881 F. Supp. 778 (N.D.N.Y.
SOUND ve cevtandeuwsaes tee eee 4
Chapman v. United States, 500 U.S. 453 (1991) ....... 25
City of Springfield, Mass. v. Kibbe, 480 U.S. 257
(TRB) 6 0 oc wee ads cs area ae eee 27
Civil Service Commission v. Letter Carriers, 413 U.S. 548
(ISTS) 0. cnccccuces eubuaesebes ete 26
Coates v. City of Cincinnati, 402 U.S. 611 (1971) ...... 25
Columbia Natural Resources, Inc. v. Tatum, 58 F.3d 1101
COG Cir. TOGGR a ce cdnvwee seule eee 13, 21
Combs v. Bakker, 886 F.2d 673 (4th Cir. 1989) ........ 14
Conley v. Gibson, 355 U.S. 41 (1957) ............ 2, 20

Corporacion Insular De Seguros v. Munoz, 826 F. Supp. 599
(DPR. WE 6 .c sas 000s sees eee 9, 15

vii

Contents
Page

Cox v. Administrator U.S. Steel & Carnegie, 17 F.3d 1386
(11th Cir. 1994), cert. denied, 115 S.Ct. 900 (1995)... 8, 14

D'Orange v. Feely, 894 F. Supp. 159 (S.D.N.Y. 1995)

TOR TS eS Oot hele ke ee aed Eee ie ee 15
Davis v. Hudgins, 896 F. Supp. 561 (E.D. Va.
DeShaney v. Winnebago County Dept. of Social Services.

snare die Bessey ou. PET ee en 27
DeWit v. Firstar Corp., 879 F. Supp. 947 (N.D. lowa

WE 2 Hine TUN CR ee ee ee 15
Diamonds Plus, Inc., v. Kolber, 960 F.2d 765

POSS TOD 9-6-6: sae EE RR det 14
E.E.0.C. v. Federal Labor Relations Authority, 476 U.S. 19
aes, MEL CO i EE BIE 27
Edmondson & Gallagher v. Alban Towers Tenants Ass'n,

GS P-O0 TSOP ODL, WDD 6 oo bio vo vile Ke weds oc. 13
Farberware, Inc. v. Groben, 764 F. Supp. 296 (S.D.N.Y.

WE. ce wae bmw tan te ee ee cee
Firestone v. Galbreath, 747 F. Supp. 1556 (S.D. Ohio 1990),
aff'd on other grounds, 976 F.2d 279 (6th Cir. 1992) .... 10
First Nat'l Bank & Trust Co. v. Hollingsworth,

931 F.2d 1295 (8th Cir. 1991)................... 14

vili

Contents

Page
Flip Mortgage Corp. v. McEthone, 841 F.2d 531 (4th Cir.
Re eer reer reer re rer eT a ee ee 10
Food Lion v. Capital Cities/ABC, 887 F. Supp. 811
Re i EE: Woda bob 0 ao ee Se Oe wh ees 15
Fried v. Sungard Recovery Services, 900 F. Supp. 758
= FE APPS ee eee ee eT Te OTT Tee e 15
Giaccio v. Pennsylvania, 382 U.S. 399 (1966) ......... 25
GICC Capital Corp. v. Technology Finance Group,
GF Fie Ge Ge Gals SUP he eh cee dd oveceseese 13
Gotham Print, Inc. v. American Speedy Print Ctrs., Inc.,
863 F. Supp. 447 (E.D. Mich. 1994) .............. 16
Granfinanciera, S.A. v. Nordberg, 492 U.S. 33 (1989) ... 27
Grayned v. City of Rockford, 408 U.S. 104 (1972) .... 8, 24
Gruntal & Co., Inc. v. San Diego Bancorp,
Fe Fg 8k re 15
H.J. Inc. v. Northwestern Bell Telephone Co..,
492 U.S. 229 (1989) ........ 6, 10, 11, 15, 16, 18, 19, 23
H.J. Inc. v. Nortwestern Bell Tel. Co., 829 F.2d 648
(8th Cir. 1987), cert. granted, 485 U.S. 958 (1988) ..... 10

Haroco, Inc. v. American Nat’l Bank & Trust Co., 747 F.2d
384 (7th Cir. 1985), aff'd, 473 U.S. 606 (1985)..... 18, 28

Harris Custom Builders Inc. v. Hoffmeyer, 834 F. Supp. 256
8 ee ere rrerrs Cor rere ry ee ce 16

ix

Contents

Page
Hartz v. Friedman, 919 F.2d 469 (7th Cir. eee 13
Hindes v. Castle, 937 F.2d 868 (3rd Cir. 1991) ........ 13
Hoffman Estates v. Flipside, Hoffman Estates, Inc..
ee RUD oo: Shas 3% be wren Coy o'ele ee ae 8, 24
In re Crazy Eddie Sec. Litig., 747 F. Supp. 850
Ae re 9
In re Integrated Resources Real Estate Ltd. Partnerships
Sec. Litig., 850 F. Supp. 1105 (S.D.N.Y. are 9
J.D. Marshall Int’l., Inc. v. Redstart, Inc., 935 F.2d 815
re ee ee 13
Jacobson v. Cooper, 882 F.2d 717 (2nd Cir. 1989)...... 14
Kehr Packages v. Fidelcor, Inc., 926 F.2d 1406 (3rd Cir.
1991), cert. denied, 501 U.S. 1222 (1991) ........... 13
Kenty v. Bank One, Columbus, N.A., 1992 U.S. Dist.
LEXIS 16645 (S.D. Ohio 1992).................. 10
Lange v. Hocker, 940 F.2d 359 (8th Cir. 1991) ........ 14
Lavian v. Haghnazari, 884 F. Supp. 670 (E.D.N.Y.
ace eaare eos eee a read Oe os 15
Lemelson v. Wang Lab., 874 F. Supp. 430 (D. Mass.
rae hs Beets oie 15

Lui Ciro, Inc. v. Ciro, Inc., 895 F. Supp. 1365
EEE d's a cleus ee ak aie eee 15

x
Contents

Page
Lytle v. Household Mfg., Inc., 494 U.S. 545 (1990) ..... 27
Marshall-Silver Constr. Co. v. Mendel, 894 F.2d 593
Ss sc deo a6 os os dae U bee wears as 14
Mathon v. Marine Midland Bank, N.A., 875 F. Supp. 986
SM Te cneeeae sa vusnee wee eeeerhee se 15
Medical Soc. of N.Y. v. Cuomo, 777 F. Supp. 1157
(S.D. N.Y. 1991), aff'd, 976 F.2d 812 (2nd Cir. 1992)
Perr ST er Te eee ee ee PEP eer Tee 25
Naan Vv. U.5., £69 UB. SIS (IDES) oc ccc ccc ccc reves 26
New York v. Ferber, 458 U.S. 747 (1982) ............ 19
Norstar Bank v. Pepitone, 742 F. Supp. 1209
88 8 Re ee ere eee ee ee eee 9
NOW v. Scheidler, 897 F. Supp. 1047 (N.D. Ill. 1995) ....9
Olive Can Co., Inc. v. Martin, 906 F.2d 1147
1, Lt MS Pee eae ee 13
Parcoil Corp. v. Nowsco Well Service, Lid. , 887 F.2d 502
Ge: SE” oo oon bab Viele wale ORR SS eS wees 13
Parker v. Levy, 417 U.S. 733 (1974)... 2... 2 ee ees 26
Patrick Carter Assoc., Inc. v. Rent Stabilization Ass'n,
Fe @ 7 Ft hk Se Re errr es ee )

Pemberton Sales & Services v. Banco Popular de P. R.,
O77 F.. Sapp. SSl GD. VE. TSP ccccccccvccsccvess 15

————

xi
Contents

Page
Phelps v. Wichita Eagle-Beacon, 886 F.2d 1262 (10th Cir.
ME ot ean ube Rae a Gaye cg OTe 14
Primary Care Inv., Seven v. PHP Healthcare, 986 F.2d 1208
UI ed hone Sys Vnbn ce bok eecc. 6c. 14
Pyramid Secur. Lid. v. IB Resolution, Inc., 924 F.2d 1114
(D.D.C. 1991), cert. denied, 502 U.S. 822 .. Soe 14
R.A.G.S. Couture, Inc. y. Hyatt, 774 F.2d 1350
SUPE 0x Fue su Vouuea encore 29
Religious Technology Center vy. Wollersheim, 971 F.2d 364
(9th Cir. 1992), cert. denied, 479 U.S. 1103 ae Ait weak 14
Resolution Trust Corp. v. Stone, 998 F.2d 1534 (10th Cir.
meee LT eT re rene 13
Rini v. Zwirn, 886 F. Supp. 270 (E.D.N.Y. 1995) ...... 15

River City Markets, Inc. vy. Fleming Foods West, Inc..
960 F.2d 1458 (9th Cir. 1992), cert. denied, 113 §.Ct. 99

Ae wt Ss Wah Bw oop o 6 oo Sd veces 14
Roberts v. U.S., 226 F.2d 464 (6th Cir. 1955),

cert. denied, 350 U.S. 935 RPGS Ore Ae A ee 21
Rohland v. Syn-Fuel Associates--1982 Lid Partnership,

879 F. Supp. 322 (S.D.N.Y. 1995)................ 15
Rose v. Locke, 423 U.S. 48 ee ae | 26

xii

Contents

Page
Schroeder v. Acceleration Life Ins. Co., 972 F.2d 41
og A. re ere rr rea gr” 14
Sedima S.P.R.L. v. Imrex Co., Inc., 473 U.S. 479
SR ir ied woe oa 8 oo eee oa ee ee 11, 12, 18, 19, 23
Shearin v. E.F. Hutton Group, Inc., 885 F.2d 1162 (3rd Cir.
SUE <5 6's ee ees ocak one aba eeaean wane 13
Shuttlesworth v. Housing Opportunities Made Equal,
873 F. Supp. 1069 (S.D. Ohio 1994)............... 15
Smith v. Goguen, 415 U.S. 566 (1974) .............. 8
Sutherland v. O'Malley, 882 F.2d 1196 (7th Cir. 1989)
rere ere oer er eR ee PTE ROR IE Pree ko 13
Tel-Phonic Services, Inc. v. TBS Int'l, Inc., 975 F.2d 1134
as SUE Spee os eke 4 eeee se eee 14
Thai Airways Int’l v. United Aviation Leasing B.V.,
891 F. Supp. 113 (S.D.N.Y. 1994), aff'd, 59 F.3d 20
CE ob ete keep n de boas 00> Eee eee 15
Thompson v. Paasche, 950 F.2d 306 (6th Cir. 1991) ..... 14
Thornton v. First State Bank, 4 F.3d 650 (8th Cir. 1993)
eee SECS Pe CP Tee Ce ee er ee 14
Ticor Title Ins. Co. v. Florida, 937 F.2d 447 (9th Cir.
GED ais db ee ce heees 665 0k be Oe eee 14
Trans World Airline, Inc. v. Berger, 864 F. Supp. 106
PE GS SOD 6-8 05 bed eee eee 15

xiii

Contents

Page
Tribune Co. v. Purcigliotti, 869 F. Supp. 1076 (S.D.N.Y.
WO See e eee icc cscs ccces. ee 15
Trustee of Plumbers & Pipefitters Nat'l Pension Fund v.
Transworld Mechanical, 886 F. Supp. 1134
A ee 15
Trustees of the Plumber & Pipefitter Nat'l Pension Fund y.
De-Con Mechanical Contractors, 896 F. Supp. 342
I ee 15
U.S. v. Andrews, 749 F. Supp. 1520 (N.D. Ill. 1990) .... . 9
U.S. v. Angiulo, 897 F.2d 1169 (ist Cir. 1990),
cert. denied, 498 U.S. 845 (1990) ................. vy)
U.S. v. Ashman, 979 F.2d 469 (7th Cir. 1992) ......... 8
U.S. v. Bennett, 984 F.2d 597 (4th Cir. 1993),
cert. denied, 113 S.Ct. 2428 (1993) ................
U.S. v. Bohonus, 628 F.2d 1167 (9th Cir. 1980),
cert. denied, 447 U.S.928 (1980) ............. a
U.S. v. Busacca, 739 F. Supp. 370 (N.D. Ohio 1990),
aff'd, 936 F.2d 232 (6th Cir. 1991),
cert. denied, 502 U.S.985 (1991) ................. 9
U.S. v. Bustamante, 45 F.3d 933 (Sth Cir. 1995),
cert. denied, 116 §.Ct. 473 (1995) ................ 14

U.S. v. Church, 955 F.2d 688 (11th Cir. 1992),
cert. denied, 113 §.Ct. 233 (1992) ................ 14

xiv
Contents
U.S. v. Coiro, 922 F.2d 1008 (2nd Cir. 1991),
cert. denied, 501 U.S. 1217 (1991) ............

U.S. v. Conner, 752 F.2d 566 (11th Cir. 1985),
cert. denied, 474 U.S. 821 (1985) ............

U.S. v. Crosby, 789 F. Supp. 440 (D.D.C. 1992),
aff'd, 20 F.3d 480, cert. denied, 115 S.Ct. 221 (1994)

U.S. v. Dempsey, 768 F. Supp. 1256 (N.D. Ill. 1990)

U.S. v. Dischner, 974 F.2d 1502 (9th Cir. 1992),
cert. denied, 113 §.Ct. 1290 (1993) ...........

U.S. v. Eisenberg, 773 F. Supp. 662 (D.N.J. 1991) .

U.S. v. Feinberg, 535 F.2d 1004 (7th Cir. 1976),
cert. denied, 429 U.S. 929 (1976) ............

U.S. v. Field, 432 F. Supp. 55 (S.D.N.Y. 1977),
aff'd, 578 F.2d 1371 (2nd Cir. 1978) ..........

U.S. v. Gatto, 746 F. Supp. 432 (D.N.J. 1990) ....
U.S. v. Gigante, 737 F. Supp. 292 (D.N.J. 1990) ..

U.S. v. Khan, 53 F.3d 507 (2nd Cir. 1995),
cert. denied, 1196 U.S. LEXIS 18 (1996)........

U.S. v. Korando, 29 F.3d 1114 (7th Cir. 1994),
cert. denied, 115 S.Ct. 496 (1994) ............

U.S. v. Krout, 66 F.3d 1420 (Sth Cir. 1995) ......

U.S. v. Lobue, 751 F. Supp. 748 (N.D. Ill. 1990) ..

XV

Contents

Page
U.S. v. Louderman, 576 F.2d 1383 (9th Cir. 1978),
cert. denied, 439 U.S. 896 (1978) ................ 21
U.S. v. Masters, 924 F.2d 1362 (7th Cir. 1991),
cert. denied, 500 U.S.919 (1991) ................. 7)
U.S. v. Oreto, 37 F.3d 739 (ist Cir. 1994),
cert. denied, 115 S.Ct. 1161 (1995) ................ 8
U.S. v. Paccione, 738 F. Supp. 691 (S.D.N.Y. 1990) ..... 9
U.S. v. Parness, 503 F.2d 430 (2nd Cir. 1974),
cert. denied, 419 U.S. 1105 (1975) ................. 9
U.S. v. Pelullo, 964 F.2d 193 (3rd Cir. SN a ee dae 14
U.S. v. Pungitore, 910 F.2d 1084 (3rd Cir. 1990),
cert. denied, 500 U.S.915 (1991) .............. 9, 19
U.S. v. Quintanilla, 760 F. Supp. 687 (N.D. Ill. 1991),
aff'd, 2 F.3d 1469 (7th Cir. 1993) ................. )
U.S. v. Riggs, 743 F. Supp. 556 (N.D. Ill. Seer 21
U.S. v. Ruiz, 905 F.2d 499 (ist Cir. 1990) ........... 14
U.S. v. Sanders, 962 F.2d 660 (7th Cir. 1992),
cert. denied, 113 S.Ct. 262 (1992) ................. 8
U.S. v. Stofsky, 409 F. Supp. 609 (S.D.N.Y. 1973),
cert. denied, 429 U.S. 819 (1976) ................ 10
U.S. v. Swiderski, 593 F.2d 1246 (D.C. Cir. 1978),
cert. denied, 441 U.S. 993 (1979) ................. 7)

xvi

Contents

Page
U.S. v. Thevis, 474 F. Supp. 134 (N.D. Ga. 1979),
aff'd, 665 F.2d 616 (Sth Cir. 1982),
cert. denied, 459 U.S. 825 (1982) ..........5 005 eee 9
U.S. v. Tripp, 782 F.2d 38 (6th Cir. 1986),
cort. dented, 4735 U3. TiS (ieee 0 0k hc eeereeea ee v)
U.S. v. Turkette, 452 U.S. 576 (1981) .......-6-. 19, 29
U.S. v. Van Dorn, 925 F.2d 1331 (11th Cir. 1991) ....... 8
U.S. v. Wei, 862 F. Supp. 1129 (S.D.N.Y. 1994) ....... 9
U.S. v. Woods, 915 F.2d 854 (3rd Cir. 1990),
cert. denied, 499 U.S. 947 (1991) .. 0... eee ee ee es 9
Uniroyal Goodrich Tire Co. v. Mutual Trading Corp..,
149 F. Supp. 869 (N.D. Hl. 1DBG) nc ccc eee cenes )
Vild v. Visconsi, 956 F.2d 560 (6th Cir. 1992)......... 14
Water Int'l Network, Inc. v. East, 892 F. Supp. 1477
(M.D. Pee. 1956) oc ccc eee eee eae ee 15
Waters-Pierce Oil Co. v. Texas, 212 U.S. 86 (1909) ...... 8
Wobble Light v. McLain/Smigiel Partnership,
890 F. Supp. 721 (N.D. Ill. 1995) ..........00005 15

xvii

Contents

Page
Statutes Cited:
ee 22
CN 29
er i,, 2, 18, 28
United States Constitution Cited:
ome Ge, PM. Vw ccc ccc ee. 18
| a 18
Rules Cited:
A a 2, 20

Supreme Court Rule 29.6 ....................... ii

xvili

Contents
Page

Other Authority Cited:

Bauerschmidt, “Mother of Mercy - Is This The End of RICO?" -
Justice Scalia Invites Constitutional Void-for Vagueness
Challenge to RICO "Pattern", 65 Notre Dame Law Review
eee ey ee ere ee ee are 17

David W. Gartenstein and Joseph F. Warganz,
RICO’s "Pattern" Requirement: Void for Vagueness?,
90 Columbia Law Review 489 (1990) .............. 12

Getzendanner, Judicial "Pruning" of "Garden Variety Fraud"
Civil RICO Cases Does Not Work: It’s Time for Congress to
het, TS Va: Sas TE. Ge I. 0 6 0b 6 Sas Ces es 16

l

No. 95-880

IN THE
SUPREME COURT OF THE UNITED STATES
OCTOBER TERM, 1995

ZACHARY TATUM, STRATA EXPLORATION, INC.,
TATUM PETROLEUM OHIO, INC. and TATUM
PETROLEUM CORPORATION

Petitioners,
vs .

COLUMBIA NATURAL RESOURCES, INC. and
STOCKER & SITLER OIL COMPANY,

Respondents,

On Petition for Writ of Certiorari to the United States
Court of Appeals for the Sixth Circuit

RESPONDENTS’ BRIEF IN OPPOSITION

TO THE HONORABLE SUPREME COURT:

Respondents, Columbia Natural Resources, Inc. and
Stocker & Sitler Oil Company, respectfully request
that the Court deny the Petition for a Writ of
Certiorari submitted by Petitioners.

2

OPINIONS BELOW, JURISDICTION, AND
CONSTITUTIONAL AND STATUTORY
PROVISIONS INVOLVED

Respondents accept Petitioners’ Opinions Below,
Statement of Jurisdiction, and Constitutional and Statutory
Provisions Involved.

STATEMENT OF THE CASE

A. Procedural History

Petitioners’ statement of the procedural history is
substantially accurate with one exception. The Amended
Complaint does allege that Petitioners conspired to violate 18
U.S.C. § 1962(c). (Amended Complaint, p. 74 4 361.)
B. Course of Proceedings

Petitioners’ statement of the course of the proceedings
is accurate. It truthfully portrays that the issue in
Petitioners’ Third Question Presented was not raised or

considered in the lower courts. It is new to this appeal.

C. Statement of Facts

For purposes of the Rule 12(b)(6) Motion to Dismiss
granted by the trial court, the allegations of the Amended
Complaint must be taken as true. Conley v. Gibson, 355
U.S. 41 (1957). Therefore, the facts in this case are those
set forth in the Amended Complaint.

3

As described in the Amended Complaint, Petitioners
formed an association in fact enterprise which engaged in a
pattern of racketeering activity by committing hundreds of
related predicate acts continuously from 1981 to June 30.
1993, when the Amended Complaint was filed. The
predicate acts consist of hundreds of instances of mail fraud.
28 instances of wire fraud and one instance of Travel Act
Fraud. All are related to the theft of the Respondents’ oil
and gas leases, royalties and production income through
various schemes. The Petitioners continue to receive oil
and gas royalty and production income which should belong
to the Respondents. This will persist through the productive
lives of the oil and gas wells on the leases Petitioners stole
through fraud and deception.

A series of Farmout Agreements gave Petitioners the
Opportunity to drill shallow oil and gas wells and earn
shallow lease rights on 47 oil and gas leases belonging to the
Respondents’ predecessor. The lease rights to deeper
horizons remained with Respondents’ predecessor. These
Farmout Agreements included an express promise that any
new leases extending, renewing or replacing the original
leases would belong to Respondents’ predecessor and its
successors. The Petitioners embarked on a furtive and
intricate scheme to escape the fiduciary duties imposed by
this clause in order to steal ten million dollars
($10,000,000.00) worth of oil and gas lease rights, royalties
and production income belonging to Respondents.

On ten of the 47 oil and gas leases, the Petitioners
obtained new oil and gas leases from the landowners that
became effective if Petitioners failed to drill before

4

Respondents’ oil and gas leases expired.’ Of course,
Petitioners validated their “top leases" by refraining from
drilling until Respondents’ leases expired. On four of these
"top leases," Petitioners then drilled shallow wells. Instead
of honoring the renewal, replacement and extension clause
in the Farmout Agreements, Petitioners defrauded
Respondents of both the royalties for the shallow wells and
the right to drill deep wells.

When oil and gas exploration developments in the late
1980s made the deep drilling rights on these "top leases"
valuable, the Petitioners drilled deep wells and thereby
defrauded Respondents of substantial oil and gas production
income.

In addition, when deep drilling became profitable,
Petitioners took “top leases" on leases held by production
from shallow wells Petitioners had drilled pursuant to the
Farmout Agreements. Respondents’ predecessor had
retained the deep rights on these leases and later transferred
them to Respondents. Once Petitioners had these "top
leases," they plugged and abandoned their shallow wells that
maintained the validity of these leases. This simple

' Oil and gas leases generally, and these leases in particular,
have a primary term for a set period, and a secondary term that lasts so
long as oil and gas is produced. Therefore, a failure to drill within the
primary term causes an oil and gas lease to expire. In this case, the
primary term for most of the leases was 10 years, not the 20 years stated
in Petitioners’ Brief.

A new lease on real property already encumbered with a lease
is called a “top lease.” The “renewal, replacement and extension” clause
in the Farmout Agreements is designed to prevent a farmee from using
a “top lease” to “wash out” the interest of the farmor.

5

expedient caused Respondents’ lease rights to expire. Then
Petitioners used their "top leases" to drill new deep wells
without honoring their renewal, replacement and extension
Clause obligations. The result was theft of valuable oil and
gas production.

In order to perpetrate this thievery and delay its
detection, Petitioners made false and misleading statements
through interstate mails, wires and travel. Exhibits 24 to 30
to the Amended Complaint detail hundreds of mailings, 28
telephone calls and one act of interstate travel to promote
Petitioners’ fraudulent schemes.”

Now the Petitioners claim their theft of ten million
dollars ($10,000,000.00) was just "ordinary business" so
they could not know they might run afoul of the RICO law.

* Amended Complaint, pp. 65-69, 44 332 to 344.

6
REASONS FOR DENIAL OF THE WRIT

SUMMARY OF ARGUMENT

There is no need to grant the Writ. Ten circuits
agree; the "RICO pattern requirement” amply warns the
wary. It consistently passes due process muster. No circuit
believes it to be void for vagueness.

Since H.J. Inc. v. Northwestern Bell Telephone Co..,
492 U.S. 229, 256 (1989), the lower courts have applied the
"RICO pattern requirement” to hundreds of factual
configurations. In most cases, whether a “pattern” exists is
not a difficult question. When different considerations point
to conflicting conclusions regarding the existence of a
“pattern,” the lower courts balance the elements to reach
consistent results. This is called the "multifactor" approach.

The wary can avoid RICO liability. Before the
“pattern requirement” is satisfied, three thresholds must be
crossed. First is one racketeering crime. Second is a
second racketeering crime within ten years. Third is enough
related and continuous crimes to be a “pattern of
racketeering activity.” Petitioners only challenge the clarity
of the third threshold.

Petitioners do not claim the mail, wire and Travel
Act fraud statutes are vague. Therefore, the first two
thresholds are “bright line" warnings to the wary. When
Petitioners committed their first racketeering crime, they
knew this was the realm of the criminal. When they

7

committed their second racketeering crime within ten years,
they knew this was the realm of potential RICO liability.

Petitioners should have known they were engaged in
criminal activity every time they used the mails, the wires or
the instrumentalities of interstate commerce to further their
scheme to steal Respondents’ property. When they
committed hundreds of such violations during more than
twelve years, they should have had little doubt they were
establishing a pattern of racketeering activity in violation of
RICO. Petitioners’ only complaint is that they do not know
precisely when their criminality crossed the third threshold
and became a “pattern.”

The “pattern requirement" provides a standard with
at least as much clarity as many other tests this Court has
approved like "restraint of trade,” "an active part in
management of political campaigns," “conduct unbecoming
an officer and a gentleman,” and "crimes against nature."*

Petitioners’ third argument is new to this appeal. It
was not argued or ruled upon in either the district or circuit
courts. This alone suffices to deny review.

Further, Petitioners’ third argument, although
unclear, seems to be one that ignores logic and precedent.
Even if adequately preserved below, it is not appropriate for
review.

* See footnotes 29 to 32, infra p. 26.

8

ARGUMENT AND AUTHORITIES
FOR DENIAL OF THE WRIT

PETITIONERS HAVE PRESENTED NO
CREDIBLE REASON FOR THIS COURT TO GRANT
THE WRIT OF CERTIORARI

Petitioners have established no basis for review by
this Court. There is an adequate body of law on the due
process requirement of clarity in the law.‘

There is no conflict in the circuits. Ten circuits have
considered whether the RICO “pattern” requirement is
vague. All ten have found it to be understandable and in
compliance with due process requirements.* Likewise, all

* See, e.g., Hoffman Estates v. Flipside, Hoffman Estates, Inc.,
455 U.S. 489 (1982); Smith v. Goguen, 415 U.S. 566 (1974); Grayned
v. City of Rockford, 408 U.S. 104 (1972); and Waters-Pierce Oil Co. v.
Texas, 212 U.S. 86 (1909).

° U.S. v. Krout, 66 F.3d 1420 (Sth Cir. 1995); U.S. v. Oreto,
37 F.3d 739 (1st Cir. 1994), cert. denied, 115 S.Ct. 1161 (1995); U.S.
v. Korando, 29 F.3d 1114 (7th Cir. 1994), cert. denied, 115 S.Ct. 496
(1994); Cox v. Administrator U.S. Steel & Carnegie, 17 F.3d 1386 (11th
Cir. 1994), cert. denied, 115 S.Ct. 900 (1995); U.S. v. Bennett, 984
F.2d 597, 606 (4th Cir. 1993), cert. denied, 113 S.Ct. 2428 (1993); U.S.
v. Ashman, 979 F.2d 469 (7th Cir. 1992); U.S. v. Dischner, 974 F.2d
1502 (9th Cir. 1992), cert. denied, 113 S.Ct. 1290 (1993); U.S. v.
Sanders, 962 F.2d 660 (7th Cir. 1992), cert. denied, 113 S.Ct. 262
(1992); Abell v. Potomac Ins. Co., 946 F.2d 1160 (Sth Cir. 1991), cert.
denied, 504 U.S. 911 (1992); U.S. v. Van Dorn, 925 F.2d 1331, 1334

9

the district courts to consider the intelligibility of the RICO
“pattern” requirement have found it to be constitutional ,°

n.2 (11th Cir. 1991); U.S. v. Masters, 924 F.2d 1362, 1367 (7th Cir.
1991), cert. denied, 500 U.S. 919 (1991); U.S. v. Coiro, 922 F.2d 1008
(2nd Cir. 1991), cert. denied, 501 U.S. 1217 (1991); U.S. v. Woods,
915 F.2d 854 (3rd Cir. 1990), cert. denied, 499 U.S. 947 (1991); U.S.
v. Pungitore, 910 F.2d 1084 (3rd Cir. 1990), cert. denied, 500 U.S. 915
(1991); U.S. v. Angiulo, 897 F.2d 1169 (ist Cir. 1990), cert. denied,
498 U.S. 845 (1990); U.S. v. Tripp, 782 F.2d 38 (6th Cir. 1986), cert.
denied, 475 U.S. 1128 (1986); U.S. v. Swiderski, 593 F.2d 1246 (D.C.
Cir. 1978), cert. denied, 441 U.S. 993 (1979); U.S. v. Parness, 503
F.2d 430 (2nd Cir. 1974), cert. denied, 419 U.S. 1105 (1975).

6 NOW vy. Scheidler, 897 F. Supp. 1047 (N.D. Ill. 1995);
Bseirani v. Mahshie, 881 F. Supp. 778 (N.D.N.Y. 1995); U.S. v. Wei,
862 F. Supp. 1129 (S.D.N.Y. 1994); In re Integrated Resources Real
Estate Lid. Partnerships Sec. Litig., 850 F. Supp. 1105 (S.D.N.Y.
1993); American Credit Indem. Co. v. Legge, 829 F. Supp. 649
(S.D.N.Y. 1993); Corporacion Insular De Seguros v. Munoz, 826 F.
Supp. 599 (D.P.R. 1993); Bingham v. Zolt, 823 F. Supp. 1126
(S.D.N.Y. 1993); U.S. v. Crosby, 789 F. Supp. 440 (D.D.C. 1992),
aff'd, 20 F.3d 480, cert. denied, 115 S.Ct. 221 (1994); Schrag v.
Dinges, 788 F. Supp. 1543 (D. Kan. 1992); Patrick Carter Assoc., Inc.
v. Rent Stabilization Ass'n, 781 F. Supp. 207 (S.D.N.Y. 1991); U.S. v.
Eisenberg, 773 F. Supp. 662 (D.N.J. 1991); U.S. v. Dempsey, 768 F.
Supp. 1256 (N.D. Ill. 1990); Farberware, Inc. v. Groben, 764 F. Supp.
296 (S.D.N.Y. 1991); U.S. v. Quintanilla, 760 F. Supp. 687 (N.D. Ill.
1991), aff'd, 2 F.3d 1469 (7th Cir. 1993), U.S. v. Lobue, 751 F. Supp.
748 (N.D. Ill. 1990); U.S. v. Andrews, 749 F. Supp. 1520 (N.D. Ill.
1990); Uniroyal Goodrich Tire Co. v. Mutual Trading Corp., 749 F.
Supp. 869 (N.D. Ill. 1990); In re Crazy Eddie Sec. Litig., 747 F. Supp.
850 (E.D.N.Y. 1990); U.S. v. Gatto, 746 F. Supp. 432 (D.N.J. 1990);
Norstar Bank v. Pepitone, 742 F. Supp. 1209 (E.D.N.Y. 1990); U.S. v.
Busacca, 739 F. Supp. 370 (N.D. Ohio 1990), aff'd, 936 F.2d 232 (6th
Cir. 1991), cert. denied, 502 U.S. 985 (1991); U.S. v. Paccione, 738 F.
Supp. 691 (S.D.N.Y. 1990); U.S. v. Gigante, 737 F. Supp. 292 (D.N.J.
1990); Beck v. Edward D. Jones & Co., 735 F. Supp. 903 (C.D. Ill
1990); U.S. v. Thevis, 474 F. Supp. 134 (N.D. Ga. 1979), aff'd, 665

10

save in this case and two other cases in the Southern District
of Ohio.’

There was a conflict in the circuits regarding the
proper interpretation of the RICO "pattern" requirement
when this Court last considered RICO in A.J. Inc. v.
Northwestern Bell Telephone Co., 492 U.S. 229 (1989).
Some circuits, like the eighth circuit’s H.J. decision,*
believed there was a need for at least two different schemes
to meet the pattern requirement.’ Other circuits adopted a
"multifactor" approach. This Court rejected the two
schemes requirement. It interpreted "pattern" to require
predicate acts which are: 1) related to each other; and 2)
continue or threaten to continue for a significant period of
time.

This Court, however, did not seek to define a RICO
pattern with mathematical certainty. Instead, it chose to
await further developments in the lower courts. Justice
Brennan wrote:

F.2d 616 (Sth Cir. 1982), cert. denied, 459 U.S. 825 (1982); U.S. v.
Field, 432 F. Supp. 55 (S.D.N.Y. 1977), aff'd, 578 F.2d 1371 (2nd Cir.
1978); and U.S. v. Stofsky, 409 F. Supp. 609 (S.D.N.Y. 1973), cert.
denied, 429 U.S. 819 (1976).

’ Firestone v. Galbreath, 747 F. Supp. 1556 (S.D. Ohio 1990),
aff'd on other grounds, 976 F.2d 279 (6th Cir. 1992) and Kenty v. Bank
One, Columbus, N.A., 1992 U.S. Dist. LEXIS 16645 (S.D. Ohio 1992).

8 H.J. Inc. v. Nortwestern Bell Tel. Co. , 829 F.2d 648 (8th Cir.
1987), cert. granted, 485 U.S. 958 (1988).

® See also, Flip Mortgage Corp. v. McElhone, 841 F.2d 531 (4th
Cir. 1988).

1]

The limits of the relationship and
continuity concepts that combine to define a
RICO pattern, and the precise methods by
which relatedness and continuity or its threat
may be proved, cannot be fixed in advance
with such clarity that it will always be
apparent whether in a particular case a
“pattern of racketeering activity” exists. The
development of these concepts must await
future cases, absent a decision by congress to
revisit RICO to provide clearer guidance as to
the Act’s intended scope.

Id., 492 U.S. at 243.

This approach has proved to be wise. The lower
courts have used the guidance provided by H.J. Inc. to focus
on a "multifactor" approach to determine whether a RICO
pattern exists. This change was summarized by an article in
the Columbia Law Review:

In the wake of Sedima, the federal
courts set out to develop "a meaningful
concept" of pattern with little guidance from
the Court beyond the terms "continuity" and
“relationship.” Some courts read too much or
too little into the terms. But, since the
Court’s more explicit guidance in H.J. Inc.,
developments in pattern jurisprudence in the
various circuits are converging. Courts are
breaking down the two-pronged analysis -
"continuity plus relationship” - into a flexible,

12

more finely tuned "multifactor" approach in
which no single factor is always dispositive
whenever a defendant challenges the
sufficiency of an alleged RICO pattern.'°

The "multifactor" approach the lower courts are using
to determine whether a RICO pattern exists was well stated
by the court below in this case. The Sixth Circuit Court of
Appeals wrote:

Therefore, to state the inquiry simply,
a pattern is the sum of various factors
including: the length of time the racketeering
activity existed; the number of different
schemes (the more the better); the number of
predicate acts within each scheme (the more
the better); the variety of species of predicate
acts (the more the better); the distinct types of
injury (the more the better); the number of
victims (the more the better); and the number
of perpetrators (the less the better).
Therefore, at one extreme is a perpetrator
committing two predicate acts, in one day, in
one scheme, causing a single injury, to a
single victim. This is not a pattern. See
Sedima, 473 U.S. at 496 n.14. At the other
extreme, a perpetrator engineering dozens of
schemes, and using myriad predicate acts to

'° David W. Gartenstein and Joseph F. Warganz, R/ICO’s
"Pattern" Requirement: Void for Vagueness?, 90 Columbia Law Review
489, 497 (1990).

13

further each scheme, against numerous
victims causing numerous types of injuries,
beyond peradventure engages in a pattern of
racketeering activity.

Columbia Natural Resources, Inc. v. Tatum, 58 F.3d 1101,
1110 (6th Cir. 1995)."'

Other circuits have articulated and applied this same
"multifactor" approach in similar language.'? When the
predicate crimes are related and continuous, the circuits are
able to find a “pattern” by applying this “multifactor”

'' The Court of Appeals went on to detail the facts of this case
relevant to the “pattern” determination. It concluded, “The only factor
militating against a finding of a pattern is the fact that the number of
victims is limited. But there is no per se rule that a weakness in one area
is dispositive. Here the limited number of victims is more than balanced
by the strength presented in other areas.” 58 F.3d at 1111.

'2 See, e.g., GICC Capital Corp. v. Technology Finance Group,
67 F.3d 463, 467 (2nd Cir. 1995)(regarding continuity); Edmondson &
Gallagher v. Alban Towers Tenants Ass'n, 48 F.3d 1260, 1264-65
(D.D.C. 1995); Resolution Trust Corp. v. Stone, 998 F.2d 1534, 1543-44
(10th Cir. 1993)(regarding continuity); Hindes v. Castle, 937 F.2d 868,
873 (3rd Cir. 1991); J.D. Marshall Int’l., Inc. v. Redstart, Inc., 935
F.2d 815, 820 (7th Cir. 1991); Kehr Packages v. Fidelcor, Inc., 926
F.2d 1406, 1411-13 (3rd Cir. 1991), cert. denied, 501 U.S. 1222 (1991);
Hartz v. Friedman, 919 F.2d 469, 472 (7th Cir. 1990); Banks v. Wolk,
918 F.2d 418, 423 (3rd Cir. 1990); Olive Can Co.. Inc. v. Martin, 906
F.2d 1147, 1151 (7th Cir. 1990)("multifactor test for continuity");
Parcoil Corp. v. Nowsco Well Service, Lid., 887 F.2d 502, 504 (4th Cir.
1989); Shearin v. E.F. Hutton Group, Inc., 885 F.2d 1162, 1166 (3rd
Cir. 1989); and Sutherland v. O'Malley, 882 F.2d 1196, 1204-05 (7th
Cir. 1989).

14

approach.’* Similarly, when the crimes are not related or
the time period is very short, the circuits find no “pattern."'*

'? See, e.g., Allwaste, Inc. v. Hecht, 65 F.3d 1523 (9th Cir.
1995); U.S. v. Khan, 53 F.3d 507 (2nd Cir. 1995), cert. denied, 1196
U.S. LEXIS 18 (1996); U.S. v. Bustamante, 45 F.3d 933, 941 (Sth Cir.
1995), cert. denied, 116 S.Ct. 473 (1995); Aetna Casualty Sur. Co. v.
P & B Autobody, 43 F.3d 1546 (ist Cir. 1994); Cox v. Administrator
U.S. Steel & Carnegie, 17 F.3d 1386 (11th Cir. 1994); Schroeder v.
Acceleration Life Ins. Co., 972 F.2d 41 (3rd Cir. 1992); U.S. v. Pelullo,
964 F.2d 193, 209-210 (3rd Cir. 1992)(collecting cases); Diamonds Plus,
Inc., v. Kolber, 960 F.2d 765, 769 (8th Cir. 1992); U.S. v. Church, 955
F.2d 688 (11th Cir. 1992), cert. denied, 113 S.Ct. 233 (1992); Abell v.
Potomac Ins. Co., 946 F.2d 1160 (5th Cir. 1991), cert. denied, 504 U.S.
911 (1992); Ticor Title Ins. Co. v. Florida, 937 F.2d 447 (9th Cir.
1991)(3 forgeries over 13 months plus threat of continued misconduct);
First Nat'l Bank & Trust Co. v. Hollingsworth, 931 F.2d 1295, 1304 (8th
Cir. 1991); U.S. v. Ruiz, 905 F.2d 499 (ist Cir. 1990); Fleet Credit
Corp. v. Sion, 893 F.2d 441 (ist Cir. 1990); Combs v. Bakker, 886 F.2d
673 (4th Cir. 1989); Atlas Pile Driving Co. v. DiCon Financial Co. , 886
F.2d 986 (8th Cir. 1989); and Jacobson v. Cooper, 882 F.2d 717 (2nd
Cir. 1989).

'* Thornton v. First State Bank, 4 F.3d 650 (8th Cir. 1993);
Primary Care Inv., Seven v. PHP Healthcare, 986 F.2d 1208 (8th Cir.
1993); Tel-Phonic Services, Inc. v. TBS Int'l, Inc., 975 F.2d 1134 (Sth
Cir. 1992); Religious Technology Center v. Wollersheim, 971 F.2d 364
(9th Cir. 1992), cert. denied, 479 U.S. 1103 (1987); Apparel Art Int'l v.
Jacobson, 967 F.2d 720 (ist Cir. 1992); River City Markets, Inc. v.
Fleming Foods West, Inc., 960 F.2d 1458 (9th Cir. 1992), cert. denied,
113 S.Ct. 99 (1992); Vild v. Visconsi, 956 F.2d 560 (6th Cir. 1992);
Aldridge v. Lily-Tulip, Inc. , 953 F.2d 587 (11th Cir. 1992), cert. denied,
116 S.Ct. 565 (1995); Thompson v. Paasche, 950 F.2d 306 (6th Cir.
1991); Lange v. Hocker, 940 F.2d 359 (8th Cir. 1991); Pyramid Secur.
Lid. v. IB Resolution, Inc., 924 F.2d 1114 (D.D.C. 1991), cert. denied,
502 U.S. 822 (1991); American Eagle Credit Corp. v. Gaskins, 920 F.2d
352 (6th Cir. 1990); Marshall-Silver Constr. Co. v. Mendel, 894 F.2d
593 (3rd Cir. 1990); and Phelps v. Wichita Eagle-Beacon, 886 F.2d 1262
(10th Cir. 1989).

pews ibaa _

15

Since H.J. Inc., the district courts have been able to
determine whether particular facts constitute a "pattern" in
literally hundreds of reported cases."

As H.J. points out, shortness of time is of a factor in connection
with “closed-ended” continuity, but is not a factor in cases involving
“open-ended” continuity.

'S Recent district court cases finding a “pattern” include: Fried
v. Sungard Recovery Services, 900 F. Supp. 758 (E.D. Pa. 1995); Brook
v. Schlesinger, 898 F. Supp. 1076 (S.D.N.Y. 1995); Lui Ciro, Inc. v.
Ciro, Inc., 895 F. Supp. 1365 (D. Haw. 1995); D’Orange v. Feely, 894
F. Supp. 159 (S.D.N.Y. 1995); Water Int'l Network, Inc. v. East, 892
F. Supp. 1477 (M.D. Fla. 1995); Trustee of Plumbers & Pipefitters Nat'l
Pension Fund v. Transworld Mechanical, 886 F. Supp. 1134 (S.D.N.Y.
1995); Lavian v. Haghnazari, 884 F. Supp. 670 (E.D.N.Y. 1995);
Arenson v. Whitehall Convalescent & Nursing Home, 880 F. Supp. 1202
(N.D. Ill. 1995); Rohland v. Syn-Fuel Associates--1982 Ltd. Partnership,
879 F. Supp. 322 (S.D.N.Y. 1995); Lemelson v. Wang Lab., 874 F.
Supp. 430 (D. Mass. 1994); Shuttlesworth v. Housing Opportunities
Made Equal, 873 F. Supp. 1069 (S.D. Ohio 1994); Tribune Co. v.
Purcigliotti, 869 F. Supp. 1076 (S.D.N.Y. 1994); and Corparacion
Insular de Seguros v. Munoz, 849 F. Supp. 126 (D.P.R. 1994).

Recent district court cases finding no "pattern" include: Gruntal
& Co., Inc. v. San Diego Bancorp, 901 F. Supp. 607 (S.D.N.Y. 1995);
Davis v. Hudgins, 896 F. Supp. 561 (E.D. Va. 1995); Trustees of the
Plumber & Pipefitter Nat’l Pension Fund v. De-Con Mechanical
Contractors, 896 F. Supp. 342 (S.D.N.Y. 1995); Thai Airways Int'l v.
United Aviation Leasing B.V., 891 F. Supp. 113 (S.D.N.Y. 1994), aff'd,
59 F.3d 20 (1995); Wobble Light v. McLain/Smigiel Partnership, 890 F.
Supp. 721 (N.D. Ill. 1995); Bonton v. Archer Chrysler Plymouth, 889 F.
Supp. 995 (S.D. Tex. 1995); Food Lion v. Capital Cities/ABC, 887 F.
Supp. 811 (M.D. N.C. 1995); Rini v. Zwirn, 886 F. Supp. 270
(E.D.N.Y. 1995); DeWit v. Firstar Corp., 879 F. Supp. 947 (N.D. lowa
1995); Pemberton Sales & Services v. Banco Popular de P. R., 877 F.
Supp. 961 (D.V.1. 1994); Mathon v. Marine Midland Bank, N.A., 875
F. Supp. 986 (E.D.N.Y. 1995); Bowdoin Constr. Corp. v. Rhode Island
Hosp. Trust Nat'l Bank, 869 F. Supp. 1004 (D. Mass. 1994); Trans

16

That the lower courts have been successfully
determining whether a "pattern" exists in the cases since
H.J. Inc. demonstrates that the requirement is not vague. As
former Judge Getzendanner of the Northern District of
Illinois, who has written many RICO opinions, stated, "After
analyzing pattern in a number of cases, I found identifying
patterns a relatively easy, low-risk task.""®

This record proves the RICO "pattern" requirement
is understood by the lower courts. It is not vague. This
Court need not consider this challenge.

This entire matter of vagueness challenges to the
pattern requirement of RICO was summarized by Professor
Joseph Bauerschmidt:

The void-for-vagueness doctrine has
been well developed in its attendant sixty
years of use by the Supreme Court. Statutes
with independent scienter requirements are
never vague. Federal statutes are rarely
vague. Civil statutes which do not impinge
upon the first amendment are almost never
vague. For the Supreme Court to violate all

World Airline, Inc. v. Berger, 864 F. Supp. 106 (E.D. Mo. 1994);
Gotham Print, Inc. v. American Speedy Print Ctrs., Inc., 863 F. Supp.
447 (E.D. Mich. 1994); and Harris Custom Builders Inc. v. Hoffmeyer,
834 F. Supp. 256 (N.D. Ill. 1993).

'® Getzendanner, Judicial “Pruning” of "Garden Variety Fraud”
Civil RICO Cases Does Not Work: It’s Time for Congress to Act, 43
Vand. L. Rev. 673, 677 (1990).

Bred en te Ag Beate ey kn cn ot eee ae

17

these contours of the void-for-vagueness
doctrine would be unprincipled, indeed,
nothing less than “"Cheatin’ yourself at
solitaire. ”!”

'’ Bauerschmidt, “Mother of Mercy - Is This The End of RICO?”
- Justice Scalia Invites Constitutional Void-for Vagueness Challenge to
RICO “Pattern”, 65 Notre Dame Law Review 1106, 1124 (1990).

18
Il.

THE "PATTERN OF RACKETEERING
ACTIVITY" ELEMENT IN THE RACKETEER
INFLUENCED AND CORRUPT ORGANIZATIONS
ACT, 18 U.S.C. §1962(c), MEETS THE DUE PROCESS
REQUIREMENT OF NOTICE WHEN APPLIED TO
PETITIONERS WHO COMMITTED HUNDREDS OF
COUNTS OF MAIL FRAUD, 28 COUNTS OF WIRE
FRAUD AND ONE COUNT OF TRAVEL ACT FRAUD
OVER A PERIOD OF AT LEAST 12 YEARS.

Petitioners claim the "pattern of racketeering activity”
element of the Racketeer Influenced and Corrupt
Organizations Act, 18 U.S.C. §1962(c) as applied to their
conduct described in the Amended Complaint violates their
substantive due process rights guaranteed by Amendments V
and XIV to the United States Constitution. They assert the
pattern element is not sufficiently well defined to put them
on reasonable notice that the conduct detailed in the
Amended Complaint was prohibited.

In their first argument, Petitioners resurrect the
thoroughly discredited claim that RICO should be limited to
traditional organized crime or its equivalent.'* They try to
contrast their breaches of contract against the murder,
gambling and drug trafficking associated with organized

'* H.J. Inc. v. Northwestern Bell Telephone Co., 492 U.S. 229,
236-37, 243 (1989); and Sedima S.P.R.L. v. Imrex Co., Inc., 473 U.S.
479 (1985). See also, Haroco, Inc. v. American Nat’! Bank & Trust Co..,
747 F.2d 384, 390-91, 395 n.14, 399 (7th Cir. 1985), aff'd, 473 U.S.
606 (1985).

ase * *e* a 3 a ee De,

Vien a et ey Ae ek eS ee

19

crime. They ignore the charges of hundreds of instances of
criminal fraud in the Amended Complaint. They disregard
the holdings in H.J. Inc. and Sedima that RICO applies to
both legitimate and illegitimate enterprises.”

In their second argument, Petitioners claim this case
presents the constitutional challenge envisioned by Justice
Scalia in H.J. Inc. Because due process vagueness
challenges are considered on an “as applied” basis,”
Petitioners portray themselves as the diminutive David
suffering undeserved punishment from a competitive
Goliath.”” Throughout their Brief, Petitioners claim they are
not racketeers and their actions are not crimes. They seek
a mantle of innocence in order to claim they could not have
known RICO might apply to their activities.”

Actually, the Amended Complaint charges the
Petitioners with hundreds of counts of mail fraud, 28 counts

'? See also, U.S. v. Turkette, 452 U.S. 576 (1981).

® See, New York v. Ferber, 458 U.S. 747, 767-79 (1982) and
United States v. Pungitore, 910 F.2d 1084 (3rd Cir. 1990), cert. denied,
500 U.S. 915 (1991).

2! Petitioners’ Brief, p. 9.

” Petitioners start minimizing in the Questions Presented where
they claim this is "a commercial civil lawsuit premised on common law
fraud" instead of admitting the actual allegations of the Amended
Complaint charging hundreds of racketeering crimes. Petitioners’ Brief,
p. ii. This pattern of minimizing their crimes continues. Petitioners’
Brief, pp. 7, 9, 16, and 17.

20

of wire fraud and one count of Travel Act fraud.” All of
these crimes were directed to the perpetration of various
schemes to steal oil and gas leases, royalties and production
income from the Respondents. Petitioners are anything but
innocent. They have engaged in a long, continuous spree of
related crimes. Their fall to RICO’s "slingshot" is
surprising only because they did not expect to be caught.

This is not the constitutional challenge envisioned by
Justice Scalia. In that case, it will be difficult to determine
whether the charges constitute a “pattern of racketeering
activity.” This is not such a case. There are too many
related predicate acts supporting too many schemes over too
long a time period for there to be any question whether these
facts constitute a “pattern of racketeering activity."

Petitioners are not innocents caught in a web of
vagueness. According to the Amended Complaint, they
engaged in exactly the kind of unsavory business RICO was
designed to eradicate. These hundreds of crimes were
related by similarity and lasted more than 12 years. This is
a RICO “pattern” without any doubt.

The circuit court answered the Petitioners’ complaint
that they could not know their conduct might be a "pattern
of racketeering activity.” The court wrote:

” These allegations must be taken as true because the district
court granted a Rule 12(b)(6) motion to dismiss. Conley v. Gibson, 355
U.S. 41 (1957).

21

If one can take the time to avoid committing
mail fraud or wire fraud, or extortion, or
murder, or any of the other enumerated
predicate offenses, all of which are federal or
state criminal offenses in their own right, then
one can sleep safe in the knowledge that he
will not be found to have violated RICO.

The issue, bluntly and simply framed,
is whether a person of ordinary intelligence
would know that committing dozens if not
hundreds of acts of wire and mail fraud, over
the course of almost a decade against the
same victim, might constitute a pattern of
racketeering activity. Since, by its terms it
only takes a minimum of two acts, it is
simply implausible for a party to claim that it
was not aware that committing numerous
predicate acts would expose it to potential
RICO liability.”

The Petitioners do not claim the mail fraud, wire
fraud or Travel Act fraud statutes are vague because that
issue is settled. Therefore, they clearly knew or could

*58 F.3d 1101, 1108-09.

% See, e.g., U.S. v. Conner, 752 F.2d 566 (11th Cir. 1985),
cert. denied, 474 U.S. 821 (1985); U.S. v. Bohonus, 628 F.2d 1167 (9th
Cir. 1980), cert. denied, 447 U.S. 928 (1980); U.S. v. Louderman, 576
F.2d 1383 (9th Cir. 1978), cert. denied, 439 U.S. 896 (1978); U.S. v.
Feinberg, 535 F.2d 1004 (7th Cir. 1976), cert. denied, 429 U.S. 929
(1976); Roberts v. U.S., 226 F.2d 464 (6th Cir. 1955), cert. denied, 350
U.S. 935 (1956); and U.S. v. Riggs, 743 F. Supp. 556 (N.D. Ill. 1990).

22

have known they were engaging in criminal conduct each of
the multiple times they violated these statutes. Innocent
business persons they are not. They have been regularly
violating three constitutionally specific statutes for more than
twelve years. They mislead the Court with their claims of
innocence.

Petitioners ignore the fact they crossed the bright line
between the legal and the criminal each time they violated a
Statute prohibiting a RICO predicate act. Their argument
ignores their guilt of multiple predicate acts because the
predicate acts do warn the wary. Petitioners want this Court
to forget the fact they crossed this initial bright line literally
hundreds of times.

RICO provides a second bright line warning of
potential RICO liability in its definition of a “pattern of
racketeering activity.” Essentially, 18 U.S.C. § 1961(5)
provides that a "‘pattern of racketeering activity’ requires at
least two acts of racketeering activity, ... within ten years

Therefore, anyone seeking to avoid conducting a
“pattern of racketeering activity" need only avoid committing
two predicate acts within ten years of each other. By this
simple expedient, anyone can know they have not crossed
into the realm of RICO liability. Each successive crime by
Petitioners crossed this second bright line warning of
potential RICO liability.

While the commission of the second predicate act
may not make a pattern, it is certainly a second warning that

23

increased liability may attach. Petitioners do not deny the
brilliance of either of these lines.

Thus, there are two bright lines between the legal and
the "pattern of racketeering activity" required as an element
of RICO liability: 1) commission of one predicate act; and
2) commission of a second predicate act within ten years.

The vagueness claim advanced by Petitioners is that
after committing two predicate crimes within ten years, there
is no mathematical certainty how many additional crimes
will be required to create a “pattern of racketeering activity."

They fail to explain what authority grants them a
constitutional right to a third warning of their criminality
after crossing two irrefutably bright lines into the illegal.

Petitioners claim this Court's interpretation of the
"pattern" requirement is vague.” In Sedima S.P.R.L. v.
Imrex Co., Inc., 473 U.S. 479, 496 n.14 (1985) and H.J.
Inc. v. Northwestern Bell Telephone Co., 492 U.S. 229
(1989) this Court held “pattern” required a showing of
continuity plus relationship among the predicate acts which
combine to produce a pattern. While Justice Scalia is
correct that this definition is not mathematically precise, it
is an adequate standard to pass due process muster.

Due process does not require the specificity of a
mathematical formula. All the Constitution requires is a

* See Petitioners’ Second Question Presented.

24

reasonably understandable standard. As this Court said in
Grayned v. City of Rockford, 408 U.S. 102, 110 (1972):

Condemned to the use of words, we can
never expect mathematical certainty from our

language.

Due process requires a standard. "Pattern of
racketeering activity" as defined by this Court is undeniably
a standard. It clearly counsels anyone engaged in repeated
commission of RICO predicate crimes that they risk passing
from the just criminal into the realm of RICO liability.

The "pattern of racketeering activity” is the third
threshold for RICO liability. The first is the commission of
one predicate crime. The second is the commission of a
second predicate crime within a decade. Not even the
Petitioners are able to claim these first two thresholds are
vague. They only complain of the third threshold. Yet this
third threshold is well within the bounds of constitutional
clarity.

In Hoffman Estate. v. Flipside, Hoffman Estates, Inc. ,
455 U.S. 489, 498-499 (1982) this Court stated, "The
standards for evaluating vagueness were enunciated in
Grayned v. City of Rockford, 408 U.S. 104, 108-109
(1972)." There this Court noted the two considerations in
vagueness analysis are fair notice and fair enforcement.
"Economic regulation is subject to a less strict vagueness
test...." There is also greater tolerance for "enactments with
civil rather than criminal penalties because the consequences
of imprecision are less severe.”

25

This Court has also noted “[E]very reasonable
construction must be resorted to, in order to save a statute
from unconstitutionality." Chapman v. United States, 500
U.S. 453, 464 (1991).

This is especially true of civil statutes: "To
invalidate a civil statute, a reviewing court must find that ‘no
standard of conduct is specified at all." Medical Soc. of
N.Y. v. Cuomo, 777 F. Supp. 1157, 1165 (S.D. N.Y. 1991),
aff'd, 976 F.2d 812 (2nd Cir. 1992), quoting Coates v. City
of Cincinnati, 402 U.S. 611, 614 (1971).

In fact, there was no standard of any kind in Giaccio
v. Pennsylvania, 382 U.S. 399, 403 (1966), considering a
Pennsylvania statute authorizing a jury to determine whether
an acquitted criminal defendant should pay the costs of
prosecution. This Court found this statute void for
vagueness because it "left ... jurors free to decide, without
any legally fixed standards, what is prohibited and what is
not in each particular case."

The "pattern requirement" of RICO does provide a
comprehensible standard. This is best demonstrated by the
hundreds of lower court cases actually applying the
standard.”” The lower courts are not having unreasonable
difficulty determining which configurations of facts constitute
a "pattern" and which do not.

Petitioners supply no contrary analysis. They claim,
"The Courts of Appeals are now struggling with determining

”” See footnotes 12, 13, 14 and 15 supra.

26

pattern....""* But their only support for this claim is a list of
cases where the circuits have readily applied the "pattern of
racketeering activity" standard. In each case, there is an
analysis of the facts to determine whether the predicate acts
amount to a "pattern." There is no evidence of a struggle.

"Pattern of racketeering activity" is like many other
phrases in the law that lack mathematical precision but set a
constitutionally permissible standard. Other phrases this
Court has approved include: "restraint of trade," "an active
part in management of political campaigns," "conduct
unbecoming an officer and a gentleman,"*' and "crimes
against nature. "*

The RICO "pattern" requirement is no more difficult
than any of these phrases. There is no need for further
consideration of this matter by this Court.

* Petitioners’ Brief p. 23.
® Nash v. U.S., 229 U.S. 373 (1913).

%® Civil Service Commission v. Letter Carriers, 413 U.S. 548
(1973).

*' Parker v. Levy, 417 U.S. 733 (1974).

® Rose v. Locke, 423 U.S. 48 (1975).

27

Il.

THE CONFUSING THIRD QUESTION
PRESENTED SHOULD BE DISMISSED BECAUSE IT
WAS NOT RAISED IN EITHER THE DISTRICT OR
CIRCUIT COURTS AND BECAUSE IT IS
FORECLOSED BY PRECEDENT.

A. New Arguments Are Prohibited On Appeal

Petitioners’ Third Question Presented should be
rejected because it is new to this litigation. That it was not
argued or considered below is demonstrated by the
Petitioners’ Statement of the Case. Their Course of
Proceedings describes no consideration of this issue by the
lower courts.*

It is axiomatic that this Court will not hear arguments
raised for the first time on appeal. Lytle v. Household Mfg.,
Inc., 494 U.S. 545, 551 n.3 (1990); Granfinanciera, S.A. v.
Nordberg, 492 U.S. 33, 38 (1989); DeShaney v. Winnebago
County Dept. of Social Services, 489 U.S. 189, 195 n.2
(1989); and City of Springfield, Mass. v. Kibbe, 480 U.S.
257, 259 (1987).

The Court has said, "Our normal practice... is to
refrain from addressing issues not raised in the Court of
Appeals." E.E.0.C. v. Federal Labor Relations Authority,
476 U.S. 19, 24 (1986).

* Petitioners’ Brief, p. 4 - 5.

28

Petitioners’ third argument is entirely new to this
case. Below, Petitioners’ argued RICO is void for
vagueness. They never examined the relation between the
“enterprise” and “pattern” elements of RICO. See Haroco
v. American Nat. B. & T. Co. of Chicago, 473 U.S. 606,
608 (1985) (refusing to “consider petitioners’ late-blooming
argument that the complaint failed to allege a violation of §
1962(c)").

This Court should decline review of this question
because it is new to this case.

B. The Apparent Argument

According to Petitioners, RICO’s pattern clause
requires "a RICO defendant’s predicate acts [to] amount to
conduct (direction) of the alleged enterprise’s affairs and not
just the defendant’s own business affairs."™

Petitioners claim a defendant’s business affairs cannot
be actionable predicates. The individual components of their
argument require an enterprise to have a business life that
includes acts distinct from the predicates forming a pattern;
require a distinction between the business affairs of a
defendant and an enterprise; and require an “enterprise” to
consist of persons different from the defendants named in a
complaint. There is no authority for such requirements.

™* Petitioners’ Brief, p. 25.

29
C. Turkette Has Settled This Issue

Even if Petitioners adequately preserved their third
argument for review, the Court should deny certiorari
because the issue raised was foreclosed by United States v.
Turkette, 452 U.S. 576 (1981).

Petitioners’ argument ignores enterprises formed to
pursue only illegal ends with members who do nothing but
advance the enterprise's illicit interests. In a such a setting,
a defendant would be a full-time wrongdoer totally devoted
to the enterprise’s nefarious ends. This would obviate any
difference between a defendant's affairs and those of the

enterprise.

Yet under Petitioners’ view, such persons would be
immunized because they did not pursue acts distinct from the
racketeering that was the enterprise’s raison d’étre. Further,
in such an enterprise, all its members are wrongdoers and
should be exposed to liability. There is no rational or
statutory basis to distinguish between members of such an
enterprise and the persons exposed to liability. ji

Turkette \ong ago settled these issues in Respondents’
favor. Turkette established that RICO applies to "legitimate"
and wholly “illegitimate” enterprises. Turkette, 452 U.S. at
585 ("There is no inconsistency or anomaly in recognizing
that § 1962 applies to both legitimate and illegitimate
enterprises"). RICO accepts that “an enterprise may be
organized solely for illegitimate purposes." R.A.G.5.
Couture, Inc. v. Hyatt, 774 F.2d 1350, 1353 (Sth Cir.
1985), citing Turkette. Further, there is no need for

30

members of a RICO enterprise to pursue acts other than the
racketeering affairs of an enterprise.

There is no need to review Petitioners’ third
argument. It treads on worn ground.

CONCLUSION

The writ of certiorari should be denied.

Respectfully submitted,

DAVID D. NOBLE
Counsel of Record

JOHN E. SULLIVAN III
NOBLE & SULLIVAN
Lawyers for Respondents
1025 Huron Road
Cleveland, Ohio 44115
(216) 771-1212

JO ELLEN DIEHL YEARY
Lawyer for Respondent
COLUMBIA NATURAL
RESOURCES, INC.

900 Pennsylvania Avenue
Charleston, West Virginia
25362

(304) 353-5166

4
t

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386002_0885%3A2. Public record. Not legal advice.