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

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 1996
- **Citation:** 519 U.S. 816

## Text

/ | atc taat” ee a
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

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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.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386002_1411%3A1. Public record. Not legal advice.