Petition for Writ of Certiorari — Abrahams v. Young & Rubicam Inc.

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yp PILED

No.

IN THE

Supreme Court of the United States

Nctober Term, 1996

ERIC ANTHONY ABRAHAMS,

Petitioner,

against

YOUNG & RUBICAM INC., ROBERT LOWELL MOORE a/k/a ROBIN

MOORE, ARTHUR KLEIN, THOMAS SPANGENBERG, STEVEN M.

MCKENNA, MIKE SLOSBERG, FREDERICK STURGES, EDWARD J.

DALEY, EDWARD NEY and ALEX KROLL,

Respondents.

PETITION FOR WRIT OF CERTIORARI TO THE UNITED STATES

COURT OF APPEALS FOR THE SECOND CIRCUIT

PETITION FOR A WRIT OF CERTIORARI

HARRY KRESKY

Counsel of Record for Petitioner

250 West 57th Street, Suite 2015

New York, NY 10107

(212) 581-1516

RIDGELEY WHITMORE BROWN

TERENCE P. O'LEARY

FRANCIS W. WOOD

Of Counsel

THE REPORTER CO., INC.- Walton, NY 13856 - 800-252-7181

Syracuse Office, University Building, Syracuse, NY 13202 - 315-426-1235

NYC Office - 30 Vesey St., New York, NY 10007 - 212-732-6978 - 800-800-4264

(2152 — 1996)

Printed on Recycled Paper

i

QUESTIONS PE#SENTED

Has the U.S. Court of Appeals for the Second Circuit unduly

restr‘ted the scope of civil actions under the Racketeering

Influenced and Corrupt Organizations Act ("RICO") and

misconsirued Congressional intent in a manner which conflicts

with previous holdings of this Court and the other Circuits by

adopting an approach to the question of whether plaintiff was

injured "by reason of a violation" of the statute which abandons

common law proximate cause?

Does an individual suffering damage to his business interests

from a bribery conspiracy's deliberate, but incorrect identifica-

tion of him as a bribe recipient have a claim under civi! RICO

against the conspirators who made him the specific target of the

scheme, that is, the person sought to be bribed?

ii

PARTIES TO THE PROCEEDING

The petitioner, who was plaintiff and appellant below, is Eric

Anthony Abrahams.

The respondents, who were respondents and appellees below,

are Young & Rubicam Inc. ("Y & R"), Arthur Klein, Thomas

Spangenberg, Steven McKenna, Mike Slosberg, Edward J.

Daley, Edward Ney and Alex Kroll. According to representa-

tions to the Court below, Young & Rubicam Inc. has no

subsidiary or affiliate that has issued shares to the public.

Table of Contents

Page

i ey el sa hi kha ere eke heed WA ewes 2

ere ee Leer eh te tek rekernnarerness 2

Constitutional, Statutory and Regulatory Provisions ........ 2

eta cre dah pd bore seeks ele sa ReS 2

os oil pw cha ee 6.6 se eee eb ee ea 0 5

i ne eee ae a 1]

iV

Index to Appendix

Opinion of the United States Court of Appeals for the

Second Circuit Decided March 8, 1996 ............ la

Order of the United States Court of Appeals for the Second

Circuit dated March 8, 1996 .................... 5a

nig EE POET PEER PETE ry ate Maine Pata, aves 17a

Decision of United States District Court, D. Connecticut

fg gs Penne ene Or er eens 20a

—* e Aecnater bea

Vv

Table of Authorities

Page

CASES:

Alexander Grant and Company v. Tiffany Industries Inc., 742

Pe BR BR eee trp ane 6

Bass v. Campagnone, 838 F. 2d 10 (Ist Cir. 1988) ........ 6

Beiter Co. v. Blomquist, 987 F.2d 1319, 1325 (8th Cir.

| ee ee eee ern eA too ar Phe oT hy 9

Cox v. Administrator U.S. Steel & Carnegie, 17 F.3d 1386,

CPPr CU a BS 6 ios hecnreea esas adine desde 9

Gots ¥. Saotl, Lak. PEK. Eee tIePee vc occa veceecdewexs 7

Hecht v. Commerce Clearing House, 897 F.2d 21 (2d Cir.

POOR) Sawisedd sas cusa usu sce veers eee 5

Holmes v. Securities Investor Protection Corp., 112 S.Ct.

CSEE, See ee oo oS 0h ee Meek Sheek 5,8

In re American Express Co. Shareholder Litig., 39 F.3d 395,

See CG SOEE | ores Fol ereee Seer ewee ens 6

Kaufman v. Seidman, 984 F.2d 182 (6th Cir. 1993) ....... 9

Mendelovitz v. Vosicky, 40 F.3d 182, 184 (7th Cir. 1994)... 9

Mid Atlantic Telecom, Inc. v. Long Distance Services, Inc.,

15 F356 200, 209 (GCA, TOFS osc crccrcevevdnnede 9

vi

O'Malley v. O'Neill, 887 F.2d 1557, 1561 (11th Cir. 1989) .

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

Sperber v. Boesky, 849 F.2d 60 (2d Cir. 1988) ..........

Terre du Lac Association v. Terre Du Lac., Inc. 772 F.2d 467

COUR OM, EDS): sve es cep cdncnsenn ee

Whalen v. Carter, 954 F.2d 1987, 1091 (Sth Cir. ye

STATUTES:

No. 96-

IN THE

SUPREME COURT OF THE UNITED STATES

October Term, 1996

ERIC ANTHONY ABRAHAMS,

Petitioner,

-against-

YOUNG & RUBICAM INC., ROBERT LOWELL MOORE

a/k/a ROBIN MOORE, ARTHUR KLEIN, THOMAS

SPANGENBERG, STEVEN M. MCKENNA, MIKE

SLOSBERG, FREDERICK STURGES, EDWARD J. DALEY,

EDWARD NEY AND ALEX KROLL,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

PETITION FOR A WRIT OF CERTIORARI

Eric Anthony Abrahams ("Abrahams") petitions for a writ of

certiorari to review the judgment of the United States Court of

Appeals for the Second Circuit.

2

OPINIONS BELOW

The opinion of the Court of Appeals (1a) is reported at 79 F.3d

234 (2d Cir. 1996). The opinion of the District Court (20a) is

reported at 793 F.Supp. 404 (D. Conn. 1992).

JURISDICTION

The judgment of the Court of Appeals affirming the District

Court's dismissal of plaintiff's civil RICO claim was entered on

March 8, 1996. The jurisdiction of this Court is invoked

pursuant to 28 U.S.C. Sec. 1254()).

CONSTITUTIONAL, STATUTORY AND

REGULATORY PROVISIONS INVOLVED

18 U.S.C. Sec. 1964(c) provides in pertinent part:

[a]ny person injured in his business or property by

reason of a violation of section 1962 of this chapter may

sue therefor.

STATEMENT OF THE CASE

This appeal arises from the District Court's dismissal,

pursuant to FRCP 12(b)(6), of petitioner's complaint alleging

claims for relief under 18 U.S.C. Sec. 1964(c) and the Connecti-

cut Unfair Trade Practices Act ("CUTPA") along with claims

sounding in common law negligence and defamation. Federal

jurisdiction of the civil RICO claim is based on 28 U.S.C. Sec.

1331 and over the remaining claims on 28 U.S.C. 1332(a)(2).

3

The essential facts giving rise to these claims, as alleged in

the complaint and summarized by the Court of Appeals are, as

follows:

(3-4a)

Abrahams was once the Minister of Tourism and Infor-

mation for the Government of Jamaica. He also had a

private consulting business and other business interests.

Y & R, an advertising firm, embarked on a scheme to

bribe Abrahams in order to secure the Jamaican Tourist

Board ("JTB") advertising account. The plot was

hatched by Arnold Foote, a Jamaican, and his associate

Robert Lowell (a/k/a Robin) Moore, an American writer

with connections in Jamaica. In the early 1980's, Foote

and Moore approached Y & R, holding themselves out

as "consultants" to the Jamaican government and claim-

ing that they could obtain the JTB advertising account

for Y & R by bribing Abrahams. As a result, Y & R paid

a total of almost one million dollars to Foote and Moore,

most of which was to be funneled to Abrahams. How-

ever, Abrahams was never involved in the scheme, and

Moore and Foote kept the bribe money for themselves.

Abrahams learned of the scheme only when he, Y & R

and others were indicted in the District of Connecticut

on October 6, 1989. Y & R pleaded guilty under the

Foreign Corrupt Practices Act, 15 U.S.C. Sec. 78dd-2 to

one count of conspiracy to bribe foreign officials. At the

plea colloquy, Y & R conceded that there was "no

evidence" that any of the money it paid ever actually

went to Abrahams. The government thereafter dropped

charges against the other defendants including

Abrahams, who at all times maintained his innocence.

4

In the civil action Abrahams claimed injuries to his reputation

and emotional, financial, political and social status as a result of

the dissemination of false information about his role in the

bribery scheme. He also sought damages for the resultant

destruction of his consulting business and other business

interests. The District Court dismissed the RICO, CUTPA and

common law negligence claims on the grounds that the acts

alleged were not the proximate cause of Abrahams injuries.

Abrahams's defamation claim was dismissed on other grounds.

The Court of Appeals affirmed the dismissal of the RICO claim,

reversed the dismissal of the common law negligence and

defamation claims, and certified the CUTPA claim to the

Connecticut Supreme Court for determination of the proximate

cause and related issues. The Court of Appeals held that facts

could be proven which would support a claim sounding in

negligence that Y & R "hatched a scheme that, if exposed,

would injure an innocent person in Abrahams's circumstances."

With regard to the RICO claim, however, the Court of Appeals

held that, the existence of proximate cause (linking the acts

alleged to have been committed by Y & R and the injuries to

plaintiffs business and property) notwithstanding:

. :» RICO was not intended to protect plaintiffs such as

Abrahams from the harm that befell him and [that] his

complaint fails to allege a claim for relief under RICO.

(10a) The Court of Appeals stressed that Abrahams was not the

target of the Racketeering enterprise—the bribery scheme—and

that:

...Abrahams's injuries "did not flow from the harms that

the predicate acts—bribery, kickbacks, extortion,

fraud—were intended to cause and the laws against them

were intended to prevent.

(9a)

5

RIEASONS FOR GRANTING THE WRIT

The writ should be granted to review the actions of the Court

of Appeals for the Second Circuit in adopting an approach to the

question of causation in civil RICO actions which conflicts with

other Circuits and with the approach taken by this Court in

Holmes v. Securities Investor Protection Corp., 112 S. Ct. 1311,

1317-18 (1992). Without precedent in case law or guidance

from the legislative history, the Court of Appeals has abandoned

the use of proximate cause as an analytic tool for determining

whether illegal acts give rise to civil liability. In so doing, it has

denied this plaintiff relief and other plaintiffs in the Second

Circuit guidance as to whether they have a viable claim.

In a line of cases beginning with Sperber v. Boesky, 849 F.2d

60 (2d Cir. 1988), the Court of Appeals for the Second Circuit

imposed more and stringent requirements for a finding of

proximate cause in an obvious effort to narrow vie scope of civil

RICO.' In Sperber, supra, it was held that persons who allegedly

purchased stock at an inflated value as a result of defendant's

action could not recover because defendant "had no duty to

protect plaintiffs from the effects of his racketeering." /d., at 62.

In Hecht v. Commerce Clearing House, 897 F.2d 21 (2d Cir.

1990) recovery was denied to an employee of defendant who

was fired for refusing to participate in racketeering activities:

. .. Because Hecht was 'neither the target of the racke-

teering enterprise nor the competitor [] nor the customer

‘It is to be remembered in this regard that in Sedima, S.P.R.L. v. Imrex

Co., 473 U.S. 479 (1985) this Court reversed a holding by the Second Circuit

which imposed requirements of a prior conviction for the predicate acts and

"injury caused by the activity RICO was designed to deter” before a civil

RICO action could be commenced.

6

[] of the racketeers] . . .,' the injury to Hecht . . . was not

reasonably foreseeable as a natural consequence of the

RICO violations."

In In re American Exress Co. Shareholder Litig., 39 F.3d

395, 399-400 (2d Cir. 1994), it was held that alleged RICO

violations were not the proximate cause of injury to shareholders

because the latter were "not the intended targets of the RICO

violations."

While the method of analysis in these cases appeared to

derive from the application of traditional principles of proximate

cause, the results were strikingly different from those in other

circuits. Thus, in Alexander Grant and Company v. Tiffany

Industries Inc., 742 F.2d 408 (8th Cir. 1984) recovery was

allowed for an accounting firm who incurred increased expenses

for the auditing of defendant because of the latter's RICO

violations. In Terre du Lac Association v. Terre Du Lac., Inc.,

772 F.2d 467 (8th Cir. 1985) a property owners’ association was

allowed to recover from a developer for fraudulent acts which

increased the maintenance costs of its members. In neither of

these cases were plaintiffs the targets of the RICO scheme. In

Bass v. Campagnone, 838 F.2d 10 (1st Cir. 1988) members of

a union local were allowed to recover under RICO because

fraudulent acts of the local's leadership directed towards persons

other than local members substantially weakened the local to the

detriment of plaintiffs. Contrast this result to that in American

Express, supra, where shareholders could not recover for

damage to the company caused by illegal acts of high ranking

company officials.

In deciding the case at bar, the Court of Appeals was faced

with a situation where the application of traditional principles of

proximate cause could only result in allowing recovery. Respon-

7

dent's bribery scheme was organized in so reckless a way

(through the payment of money to intermediaries whose

representations that the money reached petitioner were taken at

face value), it was a foreseeable consequence that the scheme's

exposure would injure an innocent person in petitioner's

situation. Indeed, the Second Circuit so held when it reinstated

the common law negligence claim. (12a) Moreover, it is

respectfully submitted that, the Court below's holding to the

contrary notwithstanding, petitioner was indeed the target of the

bribery scheme, to wit, the putative bribee. Thus, it was neces-

sary for the Court below to seek to place the question of what

and whose injuries the perpetrator of civil RICO predicate acts

is liable for on a different footing. It is for this reason that the

Second Circuit invoked the following wholly new standard:

. .. With statutory claims, the issue is, instead, one of

statutory intent: was the plaintiff (even though

foreseeably injured) in the category the statute meant to

protect, and was the harm that occurred (again, even if

foreseeable), the "mischief" the statute sought to avoid.

See Gorris v. Scott, L.R. 9 Ex. 125 (1874) (preamble of

statute made clear that the "mischief" the statute sought

to prevent was only disease and did not encompass the

risk of losing sheep off the side of a ship.)

(7a) No other precedent is cited. Nor is there any reference to

the legislative history of the RICO statute.

8

In abandoning the principles of proximate cause,’ the Second

Circuit not only finds itself alone among the Courts of Appeals,

but at odds with this Court as well. In Holmes v. Securities

Investor Protection Corp.,112 $.Ct. 1311, 1317-18 (1992),

Justice Souter, writing for the majority, states:

The reasoning applies just as readily to Sec, 1964(c).

We may fairly credit the 91st Congress which enacted

RICO, with knowing the interpretation federal courts

had given to words earlier Congresses had used first in

Sec. 7 of the Sherman Act, and later in the Clayton Act's

Sec. 4. It used the same words, and we can only assume

it intended then to have the same meaning that courts

had already given them. Proximate case is thus required.

Here we use "proximate cause" to label generically

the "judicial tool used to limit a person's responsibility

for the consequences of his Own acts. At bottom, the

notion of proximate cause reflects "ideas of what justice

*Footnote three of the Court of Appeals decision specifically rejects the

use of proximate cause. The footnote concludes:

. . . Were such a statute in issue, substantial problems could arise

from the continued use of "proximate cause" language to define

when plaintiffs are meant by the legislature to be given a cause of

action. It is for these reasons, as well as a reluctance to give the

same term "proximate cause" two different meanings unnecessarily,

that we choose to describe the question before us in terms of what

we think it has always involved, rather than by the language

frequently used.

(8a)

9

demands and what is administratively possible and

convenient", . .

(citations omitted) The concurring opinion of Justices O'Connor,

White and Stevens (/d., at 1322) and that of Justice Scalia, /d.,

at 1327 also employ proximate cause analysis and principles.

The Eleventh Circuit employs these principles in construing

civil RICO. Cox v. Administrator U.S. Steel & Carnegie, 17

F.3d 1386, 1399 (11th Cir. 1994) ("It is well established that

RICO plaintiffs must prove proximate causation in order to

recover"); O'Mally v. O'Neill, 887 F.2d 1557, 1561 (11th Cir.

1989) ("Therefore, by there own allegations, the proximate

cause of plaintiff's injuries . . ." Likewise, the Eighth, Beiter Co.

v. Blomquist, 987 F.2d 1319, 1325 (8th Cir. 1993) ("The

Supreme Court has construed the "by reason of" language to

incorporate the traditional requirements of proximate or legal

causation. . . "; the Seventh, Mendelovitz v. Vosicky, 40 F.3d

182, 184 (7th Cir. 1994) ("Thus, because courts presume

Congress to intend that language used in one place will have the

same meaning when used in another, Section 4 [of the Clayton

Act] contains a proximate cause requirement. So it is with

RICO. . .") the Sixth, Kaufman v. Seidman, 984 F.2d 182 (6th

Cir. 1993) (finding of no proximate cause in state claim pre-

cludes such a finding in civil RICO action); the Fifth, Whalen v.

Carter, 954 F.2d 1987, 1091 (Sth Cir. 1992) (". . . a plaintiff has

statutory standing to bring a claim as long as the defendants’

predicate acts constitute both a factual and proximate cause of

plaintiff's alleged irijury"); and Fourth, Mid Atlantic Telecom,

Inc. v. Long Distance Services, Inc., 18 F.3d 260, 263 (4th Cir.

1994) ("Causation principles generally applicable to tort liability

must be considered applicable).

10

In passing the RICO statute Congress was informed by the

Clayton and Sherman Acts and centuries of common law efforts

to grapple with the concept and application of proximate cause.

The Second Circuit rejects this history in the name of "statutory

intent." However there is no indication of any such intent and,

indeed, much indication that the statute was written to incorpo-

rate common law principles of proximate cause. The Second

Circuit has entered unchartered waters without any navigational

tools except, perhaps, a divining rod to discover what the

drafters of the civil RICO statute intended to require for

recovery (other than proximate cause) when the drafters

themselves give no indication that anything other than the

principles of proximate cause is to be applied.

RICO is too important and controversial a statute, and this

Court's efforts to insure uniform and proper construction too

strenuous, to allow the result below and its rationale to remain.

11

CONCLUSION

For the reasons stated, the writ should be granted.

Dated: New York, NY

May 28, 1996

Respectfully submitted,

Harry Kresky

Counsel of Record

for Petitioner

250 West 57th Street (Suite 2015)

New York, NY 10107

(212) 581-1516

Of Counsel:

Ridgeley Whitmore Brown

Terence P. O'Leary

Francis W. Wood

A : j J 4 a Seat ; the

ee ee LO are Pe Pe A eee A lee at hee : CP oe ee te

la

APPENDIX

Opinion of the United States Court of Appeals for the

Second Circuit Decided March 8, 1996

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

No. 1314—August Term, 1994

(Argued: July 20,1995 Decided: March 8, 1996)

Docket No. 94-7802

ERIC ANTHONY ABRAHAMS,

Plaintiff-Appellant,

—vV.—

YOUNG & RUBICAM INC., ROBERT LOWELL MOORE

a/k/a ROBIN MOORE, ARTHUR KLEIN, THOMAS

SPANGENBERG, STEVEN M. MCKENNA, MIKE

SLOSBERG, FREDERICK STURGES, EDWARD J. DALEY,

EDWARD NEY and ALEX KROLL,

Defendants-Appellees.

Before:

WINTER, LEVAL, and CALABRESI,

Circuit Judges.

2a

Appeal from an order by the United by the United States

District Court for the District of Connecticut (Peter C. Dorsey,

Chief Judge), dismissing a complaint alleging claims based on

RICO, the Connecticut Unfair Trade Practices Act ( "CUTPA"),

intentional infliction of emotional distress, negligence, and

defamation.

Dismissal of the RICO and intentional tort claims is affirmed;

dismissal of the negligence and defamation claims is reversed.

We sever and certify the CUTPA claim to the Connecticut

Supreme Court.

HARRY KRESKY, New York, New York (Terrence

P.O'Leary and Francis W. Wood, of Counsel), for

Plaintiff-Appellant.

STEPHEN S. MADSEN, Cravath, Swaine & Moore, New

York, New York (Thomas D. Barr, of counsel), for

Defendants-Appellees Young & Rubicam Inc., Arthur

Klein, Thomas Spangengerg, Steven M. McKenna, Mike

Slosberg, Edward J Daley, Edward Ney, and Alex

Kroll.

WINTER, Circuit Judge:

Eric Anthony Abrahams, a citizen of Jamaica, appeals from

Chief Judge Dorsey's dismissal of his complaint. The complaint

asserted claims against Young & Rubicam Inc. and various

employees (collectively "Y & R"), Robert Lowell Moore a/k/a

eg ee eee

3a

Robin Moore, and Frederick Sturges,’ based on alleged viola-

tions of the Racketeering Influenced and Corrupt Organizations

Act ("RICO"), 18 U.S.C. § 1961 ef seq., violations of the

Connecticut Unfair Trade Practices Act ("CUTPA"), Conn. Gen.

Stat. § 42-110a ef seg., common law intentional infliction of

emotional distress, negligence (including the negligent infliction

of emotional distress), and defamation. We affirm dismissal of

the RICO and intentional infliction of emotional distress claims;

we reverse the dismissal of the negligence and defamation

claims. We certify the CUTPA claim to the Connecticut

Supreme Court.

BACKGROUND

Although Abrahams's complaint appears to have been drafted

by counsel, this action has been essentially prosecuted, pro

se,until counsel drafted a reply brief and argued the appeal in

this court. The essential allegations of the complaint were as

follows. Abrahams was once the Minister of Tourism and

Information for the Government of Jamaica. He also had a

private consulting business and other business interests. Y & R,

an advertising firm, embarked on a scheme to bribe Abrahams

in order to secure the Jamaican Tourist Board ("JTB") advertis-

ing account. The plot was hatched by Arnold Foote, a Jamaican,

and his associate Robert Lowell (a/k/a Robin) Moore, an

American writer with connections in Jamaica. In the early

1980's, Foote and Moore approached Y& R, holding themselves

'The status of appellee Frederick Sturges is unclear. The docket sheet

indicates that he is represented by the same counsel that represents Y & R.

However, it appears that Sturges is not a Y & R employee, and the Y & R

brief does not list him as one of the parties on whose behalf the brief was

submitted. No papers were submitted on his behalf. We leave his status to

amplification in further proceedings.

themselves.

Abrahams learned of the scheme only when he, Y & R, and

others were indicted in the District of Connecticut on October 6,

Abrahams then brought the instant action, claiming injuries

to his reputation and to his emotional, financial, political, and

defamation claims against Moore. Abrahams v. Young &

Sa

made to law enforcement authorities and thus privileged or were

internal communications within Y & R and therefore not

published. /d. at 407-08. The motion was denied with regard to

the two defamation claims against Moore. /d. at 408.

On March 22, 1994, the district court ordered Abrahams to

appear for a deposition pertaining to the two remaining claims

against Moore. Abrahams requested that the defamation claims

against Moore be dismissed without prejudice or that he be

allowed to amend his complaint to drop those claims so that he

could appeal the dismissal of the claims against Y & R. He

explained to the court that the dismissal of his other claims

"placed [him] both procedurally and financially in a very

difficult position" and that forcing him to come to the United

States for a deposition would "force [him] to expend [his]

limited funds solely as against defendant Moore," against whom

a judgment might be uncollectible. However, on June 15, 1994,

the court dismissed with prejudice, pursuant to Federal Rule of

Civil Procedures 37(b)(2)(C) and 41(b), the remaining claims

against Moore as a sanction for Abrahams's failure to appear for

a deposition.

Abrahams then appealed. Neither his pro se main brief nor a

reply brief filed on his behalf by counsel discussed the propriety

of the dismissal of the claims against Moore, and we deem them

waived.’

?We could not reinstate the claims against Moore without affording him

an opportunity to respond to arguments regarding why the dismissal as a

sanction was inappropriate and why the complaint states a claim(s) for relief

against him. Because the first issue was not argued either by Abrahams pro

se or by counsel in his reply brief, and the second was argued only by

implication, we would have to draft those arguments sua sponte so that

Moore might respond. Given Abraham's representations to the district court

that he was willing to abandon the claims against Moore and the failure to

6a

DISCUSSION

Abrahams's claims fall into two categories: statutory claims

under RICO and CUTPA, and common law claims. We address

these in turn.

A. Statutory Claims

In a "suit on statute"—that is, a suit in which the statute itself

grants the recovery, creates the jurisdiction, or permits special

damages—the plaintiff must show both that he is within the

class the statute sought to protect and that the harm done was

one that the statute was meant to prevent. See W. Page Keeton

et al., PROSSER AND KEETON ON THE LAW OF TORTS

§ 36, at 224-25 (Sth ed. 1984) (hereinafter PROSSER &

KEETON) (in order to maintain an action based on a particular

statute, a plaintiff must bring himself within the class of

individuals the legislature intended to protect, and the harm

must be one that the statute was intended to prevent); see also

Gorris v. Scott, L.R. 9 Ex. 125 (1874) (no liability for the loss

of sheep washed overboard in a storm, because the purpose of

the statute requiring shipboard pens was to prevent disease, not

to prevent sheep from being swept overboard).

These requirements are frequently discussed in terms of

causation. See, e.g, Holmes v. Securities Investors Protection

Corp., 503 U.S. 258, 265-70 (1992) (to establish injury to

business or property "by reason of" a RICO violation, a plaintiff

must allege that the predicate acts both factually and proxi-

mately caused his injury): Jn re American Express Co. Share-

holder Litig., 39 F.3d 395, 399-400 (2d Cir. 1994) (alleged

RICO violations were not the proximate cause of losses by

American Express shareholders, because the shareholders were

make pertinent arguments here, we deem the claims waived.

Ta

"not the intended targets of the RICO violations"). But liability,

although discussed under the rubric of causation, does not turn

on the existence of factual, but-for-causation. Nor does it depend

on whether there is proximate causation as that term is used at

common law. At common law, so long as the plantiff is foresee-

able, there is no requirement that the risk of injury to the

plaintiff, and the risk of the harm that actually occurred, were

what made the defendant's actions wrongful in the first place.

With statutory claims, the issue is, instead, one of statutory

intent; was the plaintiff (even though foreseeably injured) in the

category the statute meant to protect, and was the harm that

occurred (again, even if foreseeable), the "mischief" the statute

sought to avoid. See Gorris v. Scott, L.R. 9 Ex. 125 (1874)

(preamble of statute made clear that the "mischief" the statute

sought to prevent was only disease and did not encompass the

risk of losing sheep off the side of a ship).’

*The courts that have employed causation language used that language to

ask precisely the same questions that we ask—that is, was the plaintiff in the

category of people meant by the statute to be safeguarded, and was the harm

that which the act meant to avoid? See, e.g., Holmes, 503 U.S. at 265-70;

American Express, 39 F.3d at 399-400; Hecht v. Commerce Clearing House,

Inc., 897 F.2d 21, 24 (2d Cir. 1990); Sperber v. Boesky, 849 F.2d 60, 64-65

(2d Cir. 1988). It may therefore seem that the difference in ways of speaking

is of no significance. In one sense, that is true. And the results of all the cases

cited are completely consistent with the result we reach today.

But the difference in terminology is nonetheless important. First, use of

"no proximate cause" language as the ground for dismissal in statutory cases

frequently leads to confusion when the issue of proximate cause is raised in

related common law claims. Thus, the district court in the case before us,

after analyzing the RICO claim in terms of proximate cause, also dismissed

the negligence claim "for the reasons previously adduced" with respect to

RICO. See Abrahams v. Young & Rubicam, 793 F. Supp. 404, 407 (D. Conn.

ee

8a

We therefore now turn to the question of whether RICO and

CUTPA were intended by the legislatures that enacted them to

protect Abrahams from the harms he alleges.

1. RICO

Abrahams's complaint sought relief under RICO, 18 U.S.C.

§1964(c), which allows recovery of treble damages and fees by

a plaintiff "injured in his business or property by reason of a

violation of [the substantive RICO Statute.]" /d. To state a valid

RICO claim, Abrahams had to allege, inter alia, the commission

of two or more predicate acts constituting a "pattern of racke-

teering activity." 18 U.S.C. §1961(5). To that end, Abrahams

1992). Second, even if courts or commentators recognize the different

meaning that proximate cause (as they use it) has in Statutory contexts, as

against cornmon-law settings, confusion is likely. Thus, it is easy to think that

proximate cause runs further at common law than it does in statutory cases.

But this is true only if, as is usually the case, the statutory intent is narrower

than the common law rules governing the existence of proximate cause. That

is not necessarily the case, however. Thus, at common law, since Palsgraf v.

Long Island Railroad, 248 N.Y. 339 (1928), liability will typically not be

found if the category of plaintiff is unforeseeable. Statutory liability is usually

more limited, since usually a statute intends to protect only some categories

of plaintiff among the large number of foreseeable ones. But, conceivably,

some statutes might go beyond the common law and create rights of recovery

for plaintiffs who are not foreseeable and who are injured by defendants’

wrongdoing. A legislature could do so if it wished. Were such a statute in

issue, substantial problems could arise from the continued use of "proximate

cause” language to define when the plaintiffs are meant by the legislature to

be given a cause of action. !t is for these reasons, as well as reluctance to give

the same term "proximate cause" two different meanings unnecessarily, that

we choose to describe the question before us in terms of what we think it has

always involved, rather than by the language frequently used.

9a

alleged forty-one predicate acts in violation of New York and

Connecticut law. All of these acts involv. * the bribery conspir-

acy.

The relationship between the predicate acts and Abrahams's

injuries is analogous to that of other RICO plaintiffs to whom

we have denied relief. See American Express, 39 F.3d at 400

(RICO violations do not give rise to recovery by American

Express shareholders because they were "not intended targets of

the RICO violations"); Hecht, 897 F.2d at 24 (no recovery for

employee's loss of his job and of anticipated commissions

because he refused to aid and abet his employer's RICO viola-

tions); Sperber v. Boesky, 849 F.2d 60, (4-65 2d Cir. 1988) (no

RICO recovery by plaintiff investors whose share values

declined in the wake of arbitrageur Ivan Boesky’s plea of guilty

to insider trading).

Abraham's failure to establish a RICO claim stems from the

fact that he was not "the target of the racketeering enterprise."

American Express, F.3d at 399 (quoting Sperber, 849 F.2d at

65); see also Hecht, 897 F.2d at 24. That is to say, Abrahams's

injuries did not flow from the harms that the predicate

acts—bribery, kickbacks, extortion, fraud—were intended to

cause and the laws against them were intended to prevent. See

PROSSER AND KEETON § 36, at 224-25. The Y & R scheme

was designed to corrupt the process by which the JTB advertis-

ing contract was let and to disadvantage Y & R's rivals for that

contract. The laws in question were not designed to prevent such

conduct. Abrahams was neither an intended target of the scheme

nor an intended beneficiary of the laws prohibiting it.

In American Express, we addressed closely analogous

circumstances and held that a complaint failed to allege a RICO

violation. That decision involved a scheme in which American

Express published defamatory information about a commercial

rival. Id, 39 F.3d at 396-98. The scheme was designed to

10a

impede the rival's quest for a license allowing it to enter the

Swiss banking market in competition with a bank owned by

American Express. /d. After the scheme was exposed, American

Express paid $8 million in settlement. /d. at 398. The appeal was

from the dismissal of a derivative action against American

Express management for damages to the corporation. We held

that "the shareholders of American Express were certainly not

the intended targets of the RICO violations." /d. at 400. Rather.

the targets were a competitive rival and the Swiss Regulatory

authorities. The harm to the sharcholders was caused by the

public exposure of the scheme and not by the scheme itself. /d

Similarly, Abrahams was not the target of Y & R's scheme.

Instead, the targets were Y & R's commercial rivals, the JTB,

and the Jamaican government. Abrahams was injured, as were

the shareholders in American Express, by the fallout from the

scheme's exposure.

We conclude, therefore, that RICO was not intended to

protect plaintiffs such as Abrahams from the harm that befell

him and that his complaint fails to allege a claim for relief under

RICO.

2. CUTPA

CUTPA prohibits "unfair methods of competition and unfair

or deceptive acts or practices in the conduct of any trade or

commerce." Conn. Gen. Stat. § 42-110b(a). It allows "[a]ny

person who suffers any ascertainable loss of money or property,

real or personal, as a result of the use or employment of a

method, act or practice prohibited by [the Act to] bring an action

. .. to recover actual damages." Conn. Gen. Stat. §42-110g(a).

The claim before us is rather unusual. Bribery to obtain a

commercial advantage is surely an unfair trade practice.

Abrahams alleges that he was injured by the bribery scheme in

his various roles as a public official and a private businessman.

SSRs ha Rare

lla

The district court held that Abrahams could not recover because,

as it had held with regard to the RICO claim, the CUTPA

violation and Abrahams's injuries were not causally related.

There is no dispositive Connecticut case law as to whether

CUTPA protects a person in Abrahams's position against the

harm that befell him. Any decision of that issue would involve

setting parameters on CUTPA claims that might affect numer-

ous other factual situations. We are reluctant to put either a

narrowing or expanding gloss on the statute; not only might it

misconstrue Connecticut law, but it might also lead to forum

shopping to achieve or avoid federal disposition of unusual

CUTPA claims. We therefore sever the CUTPA claim and

certify it to the Connecticut Supreme Court by a separate order

of this court.

B. Common Law Claims.

We next address Abrahams's common law claims.

1. Intentional Infliction of Emotional Distress

Abrahams's complaint fails to allege that the appellees

intended to injure him. His claim for the intentional infliction of

emotional distress was thus properly dismissed.

2. Negligence

The district court dismissed Abrahams's negligence claims

also on causation grounds. The court stated that although

Abrahams alleged that appellees knew or should have known

that their actions would injure him, "it is . . . the indictment and

events surrounding it that resulted in plaintiff's harm. While it is

clear that the decision by the United States Attorney to indict

plaintiff cannot be the subject of a negligence . . . claim, neither

12a

can defendants’ original commission of illegal acts, for the

reasons previously adduced [with regard to RICO]." Abrahams,

793 F. Supp. at 407. We disagree.

We are unable to say that Abrahams an prove no set of facts

based on his complaint that would entitle him to relief on his

negligence claim. First, the RICO ruling is not dispositive of a

negligence claim. As noted, RICO is a statute designed to

protect certain classes of persons from particular kinds of harms.

In the case of a claim based on the violation of a statute, a

plaintiff who is either outside the class of beneficiaries or not a

victim of the kind of injury the legislation was intended to

prevent cannot assert a valid claim. See PROSSER & KEETON

§36, at 224-27. However, the duty to act with reasonable care

establishes a general standard of conduct and is not limited to

protecting certain classes of persons from particular kinds of

harms. Appellees are alleged to have hatched a scheme that, if

exposed, would injure an innocent person in Abrahams's

circumstances. At this stage of the proceeding, we cannot say

that no set of facts can be proven under such an allegation that

would support an award for legally cognizable damages. Given

the infancy of this matter and the recent entry of new counsel to

represent Abrahams, we decline to analyze this claim further.

Second, we are unclear as to the district court's thinking

regarding the damage caused by the indictment. We cannot tell

whether the court regarded the indictment as an intervening

force relieving appellees of their responsibility for the results of

their negligence, see RESTATEMENT (SECOND) OF TORTS

§441; PROSSER & KEETON §44, or whether it believed that

as a matter of law a private party cannot be liable for damages

resulting from a negligently caused indictment. Moreover, it is

unclear why the court believed that damages cannot be recov-

ered for negligently caused "events surrounding" an indictment,

whatever they may be. See Abrahams, 793 F. Supp. at 407.

l3a

Again, we comment no further but leave development of these

issues to further proceedings in the district court.

3. Defamation

Abrahams alleged defamation by Y & R and some of its

employees for stating that Abrahams had demanded bribe

money and had in fact been bribed. The district court applied

Connecticut defamation law in dismissing these claims, holding

that all the alleged statements were either: (1) privileged

because they were made in the course of judicial proceedings, or

(2) unpublished because they were made within the corporate

confines of Y & R. Abrahams, 793 F. Supp. at 407-08. It then

dismissed the defamation claims. /d.

We agree that statements by Y & R personnel to the Internal

Revenue Service, the grand jury, and the United States Attor-

ney's Office are privileged because they were made in the course

of judicial proceedings. See id. (citing Petyan v. Ellis, 200

Conn. 243 (1986)). However, a recent decision of the Connecti-

cut Supreme Court has undermined the district court's conclu-

sion that the statements circulated within Y & R were not

"published" for purposes of a defamation claim. Connecticut,

like New York,’ now recognizes that dissemination of a

defamatory communication among employees of a corporation

can constitute the requisite publication. See Torosyan v.

Beohringer Pharmaceuticals, Inc., 234 Conn. 1, 27-28, 662

A.2d 89, 103 (1995) (allegedly defamatory statement included

in personnel file constitutes "publication"); see also Kennedy v.

Butler, 245 N.Y. 204, 156 N.E. 666 (1927) (permitting libel

‘Neither the district court nor the parties fully addressed the questions of

choice of law or statute of limitations. We must in any event remand and

therefore also do not address them other than to flag their existence for

further proceedings.

l4a

action based on circulation of allegedly defamatory letter by

corporation to its store managers). In supplementary letter

briefs, appellees acknowledge that a publication may thus have

occurred when a 1983 memorandum discussing Abrahams and

the bribery scheme was circulated among Y & R's employees in

New York. Whether there were yet other defamatory statements

published does not matter at this stage because we must reverse.

CONCLUSION

We affirm dismissal of the RICO claim. We sever the

CUTPA claim and certify it to the Connecticut Supreme Court.

We atfirm the dismissal of the intentional infliction of emotional

harm claim. We reverse the dismissal of the negligence and

defamation claims. Because we believe that the disposition of

the certified question by the Connecticut Supreme Court will not

affect the discovery needed and that a delay in remanding the

reversed common law claims awaiting that disposition is

therefore unnecessary, we remand the negligence and defama-

tion claims to the district court. See Horta v. Sullivan, 36 F.3d

210 (ist Cir. 1994). We of course retain jurisdiction of the

CUTPA claim pending disposition of the certified question.

15a

Order of the United States Court of Appeals for the Sec-

ond Circuit dated March 8, 1996

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

At a stated term of the United States Court of Appeals for the

Second Circuit, held at the United States Courthouse, Foley

Square, in the City of New York, on the 8th day of March, one

thousand nine hundred and ninety-six.

Present: HONORABLE RALPH K. WINTER,

HONORABLE PIERRE N. LEVAL,

HONORABLE GUIDO CALABRESI,

Circuit Judges.

ERIC ANTHONY ABRAHAMS,

Plaintiff-Appellant,

against

YOUNG & RUBICAM INC., ROBERT LOWELL MOORE

a/k/a Robin Moore, ARTHUR KLEIN, THOMAS

SPANGENBERG, STEVEN M. McKENNA, MIKE

SLOSBERG, FREDERICK STURGES, EDWARD J. DALEY,

EDWARD NEY, and ALEX KROLL,

Defendants-Appellees.

Order #94-7802

l6a

This appeal from the United States District Court for the

District of Connecticut (Peter C. Dorsey, Chief J udge) came to

be heard on the transcript of record from said district court and

was argued by counsel. The dismissal of two claims has been

affirmed. The dismissal of two claims has been reversed, and

they have been remanded to the district court.

With regard to the remaining claim, based upon the Connecti-

cut Unfair Trade Practices Act, Conn. Gen. Stat.

§ 42-110a et. seq., we have severed it, and it is hereby OR-

DERED that the Clerk of the Court transmit to the Clerk of the

Supreme Court of Connecticut a Certificate in the form attached,

together with a complete set of briefs, appendices, and record

filed by the parties with this court.

This panel retains jurisdiction over the severed claim so that,

after we receive a response from the Connecticut Supreme

Court, we may dispose of it. The parties are hereby ordered to

bear equally such fees and costs, if any, as may be requested by

the Connecticut Supreme Court.

So ordered.

s/Hon. Ralph K. Winter, U.S.C.J.

Hon. Ralph K. Winter, U.S.C.J.

s/Hon. Pierre N. Leval, U.S.C.J.

Hon. Pierre N. Leval, U.S.C.J.

s/Hon. Guido Calabresi, U.S.C.J.

Hon. Guido Calabresi, U.S.C.J.

wa. oe or

as Sa OO Oa A i Se te

17a

Certificate to Connecticut Supreme Court Dated

March 8, 1996

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

Ata stated term of the United States Court of Appeals for the

Second Circuit, held at the United States Courthouse, Foley

Square, in the City of New York, on the 8th day of March, one

thousand nine hundred and ninety-six.

Present: HONORABLE RALPH K. WINTER,

HONORABLE PIERRE N. LEVAL,

HONORABLE GUIDO CALABRESI,

Circuit Judges.

ERIC ANTHONY ABRAHAMS,

Plaintiff-Appellant,

against

YOUNG & RUBICAM INC., ROBERT LOWELL MOORE

a/k/a Robin Moore, ARTHUR KLEIN, THOMAS

SPANGENBERG, STEVEN M. McKENNA, MIKE

SLOSBERG, FREDERICK STURGES, EDWARD J. DALEY,

EDWARD NEY, and ALEX KROLL,

Defendants-Appellees.

Order #94-7802

18a

Certificate to the Connecticut Supreme Court pursuant to

Local Rule 0.27 and Connecticut General Statutes §51-199a.

1. The case concerns a complaint that alleges the following.

Defendant Young & Rubicam, Inc. ("Y & R") is a New York

corporation engaged in the business of worldwide advertising.

Various individuals are also named as defendants. All these

individuals, except for Moore and Sturges, were employees and

agents of Y & R. (The claims against Moore have been dis-

missed as waived.)

Plaintiff, Eric Anthony Abrahams ("Abrahams"), is a citizen

and subject of Jamaica. From October 1980 to February 1989,

Abrahams was an elected member of the Jamaican Parliament.

In October 1980, Abrahams was also appointed Jamaican |

Minister of Tourism and Information and served in that position

until about August 1984. In addition, Abrahams had served as

the Jamaican Director of Tourism and as a consultant on

international tourism and marketing with the Organization of

American States. Following his service as Minister of Tourism,

Abrahams acted as a consultant to various international busi-

nesses in Jamaica.

Unbeknownst to Abrahams, a scheme was concocted by

Robin Moore, a writer, and Arnold Foote, Jr., a Jamaican

advertising executive. Many activities in furtherance of this

scheme took place within the State of Connecticut.

Messrs. Moore and Foote persuaded Y & R that bribes and

kickbacks would have to be paid to Foote and to Abrahams to

influence the decisions of the Jamaican Tourist Board ("JTB")

to insure that Y & R would receive the lucrative JTB advertising

account. During the course of the scheme, Y & R paid close to

one million dollars ($1,000,000) in bribes to Moore and Foote.

However, no money was ever paid to Abrahams, who neither

demanded money nor was in a position to influence the award

of the JTB contract.

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19a

In October 1989, the scheme was publicly exposed by a

federal indictment (Cr. No. N-89-68-PCD), returned by a grand

jury in Hartford, Connecticut. On February 9, 1990, Y & R pled

guilty to knowingly and intentionally conspiring to pay bribes to

influence the decision of the JTB in awarding its advertising

account. Because Y & R and other defendants falsely implicated

Abrahams in their scheme, Abrahams was also indicted.

However, his indictment was later dismissed.

News regarding the criminal indictment of Y & R, including

false statements by a number of defendants that depicted

Abrahams as a criminal, was widely published. As a result,

Abrahams's professional reputation was damaged, and his

consulting business was destroyed. His personal reputation was

also severely impaired, and he suffered severe emotional

distress, humiliation, and depression.

2. The principal questions presented are whether the facts as

stated above, if proven, constitute "unfair methods of competi-

tion and unfair or deceptive acts or practices in the conduct of

any trade or commerce" within the meaning of Conn. Gen. Stat.

§42-110b and whether Abrahams is "[a] person who [has]

suffere[d] [a] . . . loss of money or property . . . as a result of the

use or employment of [such] a method, act, or practice" within

the meaning of Conn. Gen. Stat. §42-110g(a).

3. These questions should be decided by the Connecticut

Supreme Court at this time because the issues involve defining

the kinds of claims that may be properly asserted under the

Connecticut Unfair Trade Practices Act. That definition will

affect numerous other cases, and because there is no dispositive

Connecticut caselaw, any resolution of the issues by a federal

court might lead to considerable forum shopping.

FOR THE COURT

s/George Lange III, Clerk

George Lange III, Clerk

es

20a

Decision of United States District Court, D. Connecticut

Decided June 26, 1992

Eric Anthony ABRAHAMS

v.

YOUNG & RUBICAM, INC.., et al.

Civ. No. 5:91cv688 (PCD).

United States District Court,

D. Connecticut.

June 26, 1992.

Jamaican official brought action against various defendants

allegedly responsible for his indictment. On defendants’ motion

to dismiss, the District Court, Dorsey, J., held that allegations of

causation by Jamaican official who was indicted as result of

alleged scheme to bribe Jamaican Tourist Board were insuffi-

cient to state civil Racketeer Influenced and Corrupt Organiza-

tion Act (RICO) claim against persons involved in bribery

scheme.

Motion granted in part and denied in part.

Robert P. Herzog, New York City, Eileen McGann, West

Redding, Conn., for plaintiff.

Robert N. Chatigny, Hartford, Conn., Thomas D. Barr,

Stephen S. Madsen, Frances M. Lynch, Cravath, Swaine &

Moore, New York City, for defendants Young & Rubicam,

Arthur Klein, Thomas Spangenberg, Steven M. McKenna, Mike

Slosberg, Alex Kroll and Edward Ney and Edward J. Daley.

Robert L. Moore, pro se.

2la

RULING ON MOTIONS TO DISMISS

DORSEY, District Judge.

Plaintiff, a citizen of Jamaica and formerly its Minister of

Tourism and Information, brings this action against Young &

Rubicam and several of its employees and their associates,

alleging violations of 18 U.S.C. § 1961, et seg. ("RICO"); Conn.

Gen Stat. § 42-110b ("CUTPA"); negligence; negligent inflic-

tion of emotional distress; intentional infliction of emotional

distress; libel and slander. Defendants Young & Rubicam,

Arthur Klein, Thomas Spanenberg, Steven McKenna, Mike

Slosberg, Edward Ney, and Alex Kroll move to dismiss.

Defendants Robert Lowell Moore and Edward Daley each move

separately to dismiss.

Facts

The events giving rise to this action largely were those alleged

in a criminal action in this court in 1990, United States v. Young

& Rubicam, 741 F.Supp. 334. Plaintiff's allegations comprehen-

sively repeat those in the indictment against Young & Rubicam

and others and will not be restated herein in their entirety. The

gravamen of the complaint is as follows: In October of 1989,

Young & Rubicam and several of its officers were indicted for

criminal racketeering stemming from an alleged scheme to pay

bribes in order to influence the award of a multi-million dollar

advertising contract with the Jamaican Tourist Board ("JTB").

Complaint 94. Plaintiff was also named in the indictment as the

object of the alleged bribes, as was Arnold Foote, a Jamaican

through whom Young & Rubicam allegedly funnelled payments

to Abrahams. Complaint 94, 25. The scheme to bribe

Abrahams was allegedly masterminded by Foote and Moore,

who represented themselves as "consultants" to the Jamaican

22a

government and who claimed to be able to obtain for Young &

Rubicam the JTB advertising account given sufficient pay-offs

to plaintiff. Complaint 411. In fact, plaintiff alleges, Moore and

Foote concocted the scheme without his knowledge, keeping all

bribes, and engaged in various acts with Young & Rubicam to

conceal the scheme. Complaint $911, 64. Plaintiff contends that

he had no knowledge of the conspiracy until the indictment was

returned on October 6, 1989. Complaint 995. Plaintiff further

argues that statements made by each of the defendants in

memoranda circulated within Young & Rubicam, and subse-

quently to the government, were widely disseminated and led to

eventual damage to his reputation and thus to his emotional,

financial, political, and social status.’ {Complaint 5, 189.

Discussion

A motion to dismiss involves a determination as to whether

plaintiff has stated a claim upon which relief may be granted.

That standard is articulated more fully in Fischman v. Blue

Cross Blue Shield, 755 F.Supp. 528 (D.Conn.1990).

1. RICO Claims

[1] Defendants move to dismiss Counts I and II, alleging

violation of RICO and conspiracy to violate RICO, 18 U.S.C. §

1962(c) and (d). In order to satisfy his pleading burden under

RICO, plaintiff must first allege a violation of 18 U.S.C.§ 1962,

the substantive RICO statute. See Town of West Hartford v.

Operation Rescue, 915 F.2d 92 (2d Cir.1990). This requires:

*On February 9, 1990, Young & Rubicam pled guilty to one count of

conspiracy to bribe foreign officials. In return, all additional bribery and

RICO charges against the remaining defendants, including plaintiff, were

dropped. Complaint 492.

23a

(1) that the defendant (2) through the commission of two

or more acts (3) constituting a "pattern" (4) of "racke-

teering activity" (5) directly or indirectly invests in, or

maintains an interest in, or participates in (6) an "enter-

prise" (7) the activities of which affect interstate com-

merce.

Id., quoting Moss v. Morgan Stanley, Inc.719 F.2d 5, 17 (2d

Cir.1983), cert. denied, 465 U.S. 1025, 104 S.Ct. 1280, 79

L.Ed.2d 684 (1984). Plaintiff must further allege that he was

injured in his business and property by reason of a violation of

$1962. See id.

[2] Plaintiff alleges no less than forty-one predicate acts

allegedly committed by defendants in furtherance of their

scheme to bribe and to conspire to bribe the JTB, all involving

the underlying events for which defendants were indicted in the

criminal proceeding. However, plaintiff must additionally allege

in what way these predicate acts proximately caused injury to his

business or property, a burden he has failed to satisfy in this

instance. See Sperber v. Boesky, 849 F.2d 60, 64 (2d Cir.1988),

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

F.2d 384, 398 (7th Cir.1984), aff'd. 473 U.S. 607, 105 S.Ct.

3291, 87 L. Ed.2d 437 (1985) ("A defendant who violates

section 1962 is not liable for treble damages to everyone he

might have injured by other conduct,’ but only to anyone whose

injuries were caused ‘by reason of a violation of section 1962."").

Plaintiff clearly staves that he knew nothing of the illegal

activities of defendants until after the indictment was handed

down and received no benefits from them. Plaintiff suggests

unequivocally that it was the indictment against him, and the

subsequent publicity, that caused injury to his reputation, to his

business and political opportunities, and to his social standing.

To the extent that plaintiff asserts a claim for indirect injury -

that is, defendants’ alleged acts caused the government to indict

him, which caused his claimed injuries - the causal connection

24a

is too tenuous to satisfy the element of proximate cause required

by the statute. See Sperber, 849 F.2d at 65 ("Plaintiffs here were

neither the target of the racketeering nor the customers of the

racketeer. [Defendant] did not cheat or deceive plaintiffs in any

way with regard to the particular stocks in question since they

did not know he had purchased them illegally."); Hecht v.

Commerce Clearing House, Inc., 897 F.2d 21, 24 (2d Cir.1990)

("Although [plaintiff's] loss of employment may have been

factually caused by defendants’ RICO violations, it was not a

foreseeable natural consequence sufficient for proximate

causation."). Plaintiff claims that defendants engaged in a course

of conduct allegedly intended to bribe him, as a result of which

they and he were indicted. The result is the events and his

asserted damages claimed herein. That result is not alleged to

have been the intended, nor even foreseeable, result. Indeed, it

is alleged that, except for Moore, the other defendants’ scheme

was to bribe plaintiff, i.e., that they intended, by their actions, to

pay money, indirectly, to plaintiff. The scheme was discovered

and plaintiff as well as defendants were prosecuted. As the

indictment of plaintiff was not intended, nor was the indictment

of any one, it cannot be said that defendants' conduct was a

substantial factor reasonably foreseeable as likely to bring about

plaintiff's indictment and his resulting damages. Plaintiff was

neither the intended target nor victim of defendants’ illegal

activities.

What is not alleged is that defendants, except Moore, knew

that plaintiff was not involved in the scheme, had no knowledge

of it, and did not receive the money. The company and its

employees would clearly have thought to the contrary. It is

totally illogical that money be paid if the person for whom it was

intended was not in fact involved. Plaintiff was a necessary

participant for the payments to achieve their purpose, as he was

the person who could deliver the JTB contract. Thus, it cannot

be inferred that Young & Rubicam and its employees have

25a

intended, or knew, that plaintiff would be indicted unjustifiably.

Even if they should have foreseen indictments resulting from the

scheme, their knowledge necessarily suggested that an indict-

ment of plaintiff, if foreseeable, would have been justified, as

they would seemingly have acted on the assumption that

plaintiff was part of the scheme. That being the case, his

indictment would not have been unjustified.

Further, the implication of plaintiff in the scheme, whether

voluntarily or per force of the law enforcement investigation,

simply demonstrated the clear belief of Young & Rubicam and

its employees that plaintiff was the ultimate recipient of the

alleged bribes, because they were led to so believe by Foote and

Moore and because plaintiff was the person who could produce

the intended purpose, delivery of the JTB contract. The United

States Attorney credited the story attributed to Foote and Moore

that plaintiff was involved, because that evidence was submitted

to the Grand Jury. So also, the Grand Jury credited it and found

probable cause to believe plaintiff was involved, leading to his

indictment.

For all these reasons, plaintiff has failed to allege causation of

his injuries by the commission of predicate, substantive RICO

violations. Therefore, defendants’ motion to dismiss Counts |

and II is granted.

2. State Law Claims

[3] Plaintiff contends that defendants violated CUTPA

through the commission of those same predicate acts alleged in

Counts I and II. CUTPA provides, in relevant part, that:

[a]ny person who suffers any ascertainable loss of

money or property, real or personal, as a result of the use

of employment of a method, act or practice prohibited by

section 42-110b, may bring an action . . . to recover

actual damages.

26a

Conn.Gen.Stat § 42-110g(a). Here, again, plaintiff fails to

causally link the allegations of defendants’ illegal activities, of

which he allegedly knew nothing, with his alleged injuries.

Absent allegations asserting the loss of money or property as a

result of defendants' prohibited acts, the motion to dismiss

Count III is granted.

_ Similarly, plaintiff's claims of negligence, negligent infliction

of emotional distress, and intentional infliction of emotional

distress, Counts IV, V and VI°, must also be dismissed for

failure to allege causation. Although plaintiff claims that

defendants knew, or should have known, that their illegal acts

would cause harm and damage to plaintiff, it is once again the

indictment and events surrounding it that resulted in plaintiff's

harm. While it is clear that the decision by the United States

Attorney to indict plaintiff cannot be the subject of a negligence

or infliction of emotional distress claim, neither can defendants’

original commission of illegal acts, for the reasons previously

adduced, be denominated the proximate cause of plaintiff's

emotional injuries. The motion to dismiss Counts IV, V and VI

is, accordingly, granted.

[4-6] Plaintiff also sets forth claims of libel and slander in

Counts [X and X against the Young & Rubicam defendants and

in Counts VII and VIII against Moore individually. In order to

establish a claim for defamation, plaintiff must demonstrate that

defendant has published or uttered an unprivileged, false and

defamatory statement. See Strada v. Connecticut Newspapers,

Inc., 193 Conn. 313, 477 A.2d 1005 (1984). Here, with respect

to Counts IX and X, plaintiff refers to statements that were

published or uttered initially through internal, private communi-

cations within Young & Rubicam, and subsequently to the

investigating authorities in the United States Attorney's Office

*In fact, plaintiff declines to address Count VI in its entirety in his

memorandum in opposition to defendants' motion to dismiss.

27a

or the Internal Revenue Service. To the extent that the first of

these statements constitute the subject of plaintiff's claim, they

are, by definition, non-public statements published in confiden-

tial memoranda or uttered between and among defendants alone

and thus cannot appropriately comprise libelous or slanderous

forms of speech. To the extent that plaintiff intends to draw the

court's attention instead to statements made to the Internal

Revenue Service, the Grand Jury, or the United States Attorney's

Office, such statements made in the course of judicial proceed-

ings are strictly privileged and are thus precluded from being the

source of a libel or slander action. See Petyan v. Ellis, 200 Conn.

243, 510 A.2d 1337 (1986). As such, defendants’ motion to

dismiss Counts [X and X is granted.

Counts VII and VIII, however, while failing to clearly identify

to whom or in what manner Moore's allegedly defamatory

statements were disseminated beyond the confines of non-public

circulation or to investigating authorities in the course of a

criminal proceeding, suggest that plaintiff's claims against

Moore are of a different nature than those against the Young &

Rubicam defendants. Plaintiff refers, for example, to Moore's

"written chronicles" distributed to the JTB, in addition to the

defendants and to the United States prosecuting agencies. These

communications do not clearly fall within either of the catego-

ries established above of non-public or privileged statements.

Moore mistakenly relies on the Young & Rubicam memoran-

dum in support of his motion to dismiss, although the parties are

not similarly situated with respect to the allegations; addition-

ally, defendant curiously raises a factual matter not appearing

the complaint concerning a previous libel action by plaintiff

against a Connecticut newspaper. Absent any refutation by

defendant that the communications identified by plaintiff were

either strictly non-public or strictly privileged, defendant's

motion to dismiss Counts VII and VIII denied.

28a

Conclusion

For the foregoing reasons, defendants’ motions to dismiss

Counts I, II, Ill, 1V, V, VI, IX and X (documents #18 and #23)

are granted. Defendant Moore's motion to dismiss Counts VII

and VIII (document #43) is denied.

SO ORDERED.