# Opposition Brief — Fryar v. Abell

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 1992
- **Citation:** 504 U.S. 911

## Text

alt Supreme Court, U,S,
(3) FILED
No. 91-1470 APR 13 1992

———— ———!

OFFICE OF THE CLERK

In The

Supreme Court of the United States

October Term, 1991
*

JOE E. FRYAR,

Petitioner,
versus

EDWARD C. ABELL, JR. AND CAREY WALTON,
INDIVIDUALLY AND AS REPRESENTATIVES OF THE
CLASS OF PURCHASERS OF WESTSIDE
HABILITATION CENTER REVENUE BONDS,

Respondents.

+

On Petition For Writ Of Certiorari
To The United States Court Of Appeals
For The Fifth Circuit

¢

BRIEF ON BEHALF OF EDWARD C. ABELL, JR.
AND CAREY WALTON, INDIVIDUALLY AND AS
REPRESENTATIVES OF THE CLASS OF
PURCHASERS OF WESTSIDE HABILITATION
CENTER REVENUE BONDS OPPOSING JOE E.
FRYAR’S PETITION FOR CERTIORARI

*

Puitur A. WittMaANN
KyYLe SCHONEKAS
Jupy Y. Barrasso
C. LAwrENcE ORLANSKY
Of
STONE, PIGMAN, WALTHER,
WITTMANN & HurcHINson
546 Carondelet Street
New Orleans, Louisiana 70130
Telephone: (504) 581-3200

Attorneys for Respondents

COCKLE LAW BRIEF PRINTING CO, (800) 225-6964
OR CALL COLLECT (402) 342-283

TABLE OF CONTENTS

Page
WRRIO GIP CITI ooo ce cca nin vncccsccne i
ey ey. ee ii
STATEMENT OF THE CASE.....................5. 1
Es EE ea Waals ban Favs Moee kee Goats eas The court of appeals reversed the judgment in favor of
the class on its securities law and State law fraud claims. The
court affirmed the jury verdict finding Fryar liable to Abell and
Walton individually for violations of § 10(b) of the Securities &
Exchange Act. Abell v. Potomac Insurance Co., 858 F.2d 1104,
1147 (Sth Cir. 1988).

13

All American was performing more obligations
than it had actually undertaken.

858 F.2d at 1130.

The Fifth Circuit also affirmed the RICO damage award
in favor of the plaintiff class against Fryar, holding that
“the jury awarded plaintiffs considerably less than the
damages which they proved at trial.” 858 F.2d at 1140.

On March 13, 1989, Fryar filed a Petition for Cer-
tiorari to the United States Supreme Court, arguing that —
plaintiffs failed to establish a pattern of racketeering
activity because distinct multiple schemes were not estab-
lished. On July 3, 1989, the United States Supreme Court
granted petitions for certiorari in nine cases, including
this one, in which the issue of sufficiency of a pattern of
racketeering activity was raised. Fryar v. Abell, 492 U.S.
914, 109 S. Ct. 3236 (1989). The Court systematically
remanded the nine cases for reconsideration in light of
the decision in H.J. Inc. v. Northwestern Bell Telephone Co.,
Inc., 492 U.S. 229, 109 S. Ct. 2893 (1989) pertaining to the
appropriate standard for establishing a pattern of rack-
eteering activity under RICO. Abell v. Potomac Insurance
Co., 946 F.2d 1160, 1164 (5th Cir. 1991).

On September 12, 1989, the Court of Appeals
remanded the matter to the district court for further
consideration in light of H.J. and Fryar’s pending bank-
ruptcy proceeding. Abell v. Potomac Insurance Co., 884
F.2d 196 (Sth Cir. 1989). The plaintiffs moved for

6 Fryar commenced a proceeding under Chapter 11 of the
United States Bankruptcy Code on May 2, 1989. The

(Continued on following page)

14

reinstatement of the jury’s RICO verdict and the award of
attorney’s fees, and Fryar-moved to dismiss plaintiffs’
RICO claims, arguing fof the first time that the RICO
Statute was unconstitutionally vague. (A-20).

The district court granted plaintiffs’ motion, uphold-
ing the jury’s RICO verdict in light of H.J. The district
court stated:

In consideration of the principles enunci-
ated in H.J., this Court still holds that the find-
ing of RICO violations is abundantly supported
by the evidence. . . . H.J. defines a “pattern of
racketeering activity” to require a showing of
related racketeering predicates amounting to or
posing a threat of continued criminal activity.

The district court rejected Fryar’s argument that the
RICO statute is unconstitutionally vague.

On appeal, the Fifth Circuit again affirmed the jury’s
RICO verdict, finding that Fryar’s conduct “easily sur-
passed the RICO threshold”. The court explained:

[T]his Court has already affirmed the judg-
ment for plaintiffs’ RICO claims against Fryar
for the activities in question, noting that the

(Continued from previous page)

proceeding was converted to a Chapter 7 proceeding on July
13, 1990. By order dated January 3, 1990, the court granted
plaintiffs’ motion for relief from Stay, permitting them to pur-
Sue these claims. Plaintiffs filed an adversary proceeding,
alleging that Fryar’s debt to Abell, Waiton, and the class is
nondischargeable pursuant to 11 U.S.C. §§ 523(a)(2)(A) and (B),
(a)(4) and (a)(6); 523(c) and Bankruptcy Rule 4007. The bank-
ruptcy court has continued the proceeding, pending resolution
of Fryar’s appeal.

15

“evidence strongly supports the jury’s RICO ver-
dict.” 858 F.2d 1130 (emphasis added). H.J. has,
if anything, resolved rather than revolutionized
the law, and the Fryar facts have not
changed... .

H.J.’s relatedness and continuity tests are
fact-specific and the facts adduced at trial and
piled up high against Fryar — some 500 bond-
holders were cheated out of millions of dollars
in a scheme that spread itself out over more
than six years - are damning. We have no need
to sharpen our pencils for subtle RICO analysis:
Fryar’s mail fraud violations and the fact that
these violations were, as observed by the district
court, strung together by the making-money-at-
the-expense-of-bondholders objective realized
by Fryar are enough. Fryar’s conduct has, there-
fore, easily surpassed the RICO threshold, and
we affirm the district court’s RICO judgment
against him.

946 F.2d at 1167-68.

The Court of Appeals expressly rejected Fryar’s con-
stitutional challenge to the RICO statute, noting that it
was untimely and, more importantly, fatally flawed. The
court explained:

In bringing his constitutional contention to
us, Fryar is apparently overlooking the principle
that ‘outside the First Amendment context, a
party has standing to raise a vagueness chal-
lenge only insofar as the statute is vague as
applied to his or her speeific conduct.’ [Citations
omitted.] . .. A myriad of fraudulent acts span-
ning more than six years and involving more
than five hundred victims — based on the evi-
dence adduced at trial, it follows that Fryar’s

———————————————

16

facial attack on the constitutionality of RICO is
simply too superficial to accept.

946 F.2d at 1167.
(Emphasis in original).

3. Fryar’s Petition for Certiorari.

Fryar now seeks review of the Court of Appeals’
decision affirming the reinstatement of the jury verdict
finding Fryar liable for violations of RICO. In support of
his petition, Fryar asserts three untimely constitutional
challenges: (1) the RICO statute is unconstitutionally
vague; (2) his due process rights were violated because
reconsideration of the jury’s verdict in light of H.J. some-
how constitutes an impermissible application of a sub-
stantive change in the law; (3) and his right to a trial by
jury was violated by reconsideration of the jury verdict in
light of H.J. by the district court rather than a jury.

4. Reasons for Denying the Writ.

Fryar has failed to identify any special or important
reasons for granting his petition for writ of certiorari.
Indeed, no such special or important reasons obtain to
this case. No other court of appeals has rendered a deci-
sion that conflicts with the decision rendered in the court
below. The decision below does not conflict with applica-
ble decisions of this Court. Nor did the decision below
decide an important question of federal law which has
not been but should be settled by this Court. Indeed, two
of the three arguments asserted were not even considered
by the Court of Appeals. Hence, this case is inappropriate
for review.

17

More importantly, the Court of Appeals merely found
that fraudulent conduct cheating 500 bondholders out of
millions of dollars in a scheme that spanned more than
six years “easily surpassed the RICO threshold”. 946 F.2d
at 1168. The decision is correct and should not be
reviewed. Further, Fryar’s constitutional arguments are
untimely and meritless.

5. Fryar’s Newly-Raised Constitutional Attacks Cannot
be Considered.

Six years after commencement of this case, four years
after a nine-week jury trial resulting in a jury verdict in
favor of the plaintiffs, and two and one-half years after
the Fifth Circuit affirmed the jury’s RICO verdict, Fryar
asserted for the first time on remand a constitutional
attack on the RICO statute. Fryar argued that the RICO
statute is unconstitutionally vague requiring dismissal of
plaintiffs’ RICO claims. Subsequent to the second Court
of Appeals’ decision, Fryar asserted for the first time on
Petition for Rehearing two additional constitutional argu-
ments: (1) retroactive application of H.]. violated his due
process rights; and (2) reconsideration by the Court
rather than a new jury infringed upon his right to trial by
jury. Fryar’s newly-raised constitutional attacks should
not be considered.

It is well established that issues not raised before trial
are considered waived and cannot be considered on
appeal or remand. See e.g., Shingleton v. Armor Velvet
Corp., 621 F.2d 180, 183 (5th Cir. 1980); Martin Oil Co. v.
Gulf Insurance Co., 605 F.2d 197, 199 (5th Cir. 1979). In

18

Glass v. Pfeffer, 849 F.2d 1261 (10th Cir. 1988), the Tenth
Circuit has explained:

[b]y failing to raise a § 1985(2) legal theory
before the district court, plaintiffs foreclosed
themselves from arguing that theory on appeal
or on remand...

849 F.2d at 1264.
(Emphasis supplied).

That the case was remanded with an explicit mandate
for reconsideration in light of H.J. did not reopen the case
for consideration of all issues. As explained by the court
below:

We did not lower a pinata of issues for
Fryar to split open, returning to this Court with
his arms full.

946 F.2d at 1165.

The decision below is consistent with other courts of
appeals decisions. In U.S. v. Church, No. 89-8509, 1992
U.S. App. LEXIS 3931 (11th Cir. 1992), the Eleventh Cir-
cuit refused to consider a vagueness challenge to the
RICO statute “because appellants failed to raise it in the
district court”. In Robinson v. Ariyoshi, 854 F.2d 1189 (9th
Cir. 1988), the Ninth Circuit considered the scope of a
remand pursuant to language identical to the language
used in remanding this case, and concluded that a
remand on one narrow question does not reopen the
whole case for reconsideration of all issues, including
issues that may have been changed by law in the interim.
Rather, upon remand the court may consider only the
effect of the Supreme Court’s decision and its progeny
upon the case before it. See also Ostrofe v. H.S. Crocker Co.,

eee eee

19

740 F.2d 739, 748 (9th Cir. 1984) (remand required recon-
sideration in light of Associated General Contractors and
nothing more); Minpeco, S.A. v. Hunt, 724 F. Supp. 259,
260 (S.D.N.Y. 1989) (defendants criticized for first assert-
ing a constitutional challenge to RICO after trial and
disposition of post-trial motions).

Ignoring these decisions, Fryar has offered no argu-
ment supporting his attempt to have legal issues consid-
ered for the first time on remand or on petition for
rehearing in the Court of Appeals. Fryar’s constitutional
attacks are untimely and should not be considered.

6. The RICO Statute is Not Unconstitutionally Vague.

Although the Court of Appeals found Fryar’s vague-
ness argument untimely it, nevertheless, considered and
rejected the constitutional attack on the RICO statute. 946
F.2d at 1165-67. The court reasoned that “outside the First
Amendment context, a party has standing to raise a
vagueness challenge only insofar as the statute is vague
as applied to his or her specific conduct”. 946 F.2d at
1167. That is, “Fryar would have had to show . . . that the
scope of RICO’s ‘pattern’ element was so unclear that a
person of ordinary intelligence in Fryar’s position would
not have had adequate notice that his actions constituted
‘a pattern of racketeering activity.’ ” Id. Considering the
evidence adduced at trial - “[a] myriad of fraudulent acts
spanning more than six years and involving more than
five hundred victims” — the court concluded that “Fryar’s
facial attack on the constitutionality of RICO is simply too
superficial to accept”. Id. (Emphasis in original).

20

The Court of Appeals’ decision is consistent with the
decisions of the majority of courts which have considered
the vagueness argument urged here by Fryar. Since H.J.,
seven circuits, including the court below, have rejected
the argument. In U.S. v. Van Dorn, 925 F.2d 1331, 1334 n.2
(11th Cir. 1991) the Eleventh Circuit found defendants’
vagueness argument to be “completely lacking in merit.”
In U.S. v. Glecier, 923 F.2d 496, 497-98 n.1 (7th Cir.), cert.
denied, __ U.S. __, 112 S. Ct. 54 (1991), the Seventh
Circuit rejected a vagueness challenge, noting that
“[w]e . . . join the First and Third Circuits in reaffirming
that the RICO statute is not unconstitutional despite Jus-
tice Scalia’s statements concerning the pattern require-
ment in his concurrence in H.J....” In U.S. v. Tripp, 782
F.2d 38, 41-42 (6th Cir.), cert. denied, 475 U.S. 1128, 106 S.
Ct. 1656 (1986), the Sixth Circuit squarely rejected the
vagueness argument. In U.S. v. Coiro, 922 F.2d 1008, 1017
(2d Cir.), cert. denied, __ U.S. __, 111 S. Ct. 2826 (1991),
the Second Circuit reiterated that RICO was not uncon-
Stitutionally vague. In U.S. v. Pungitore, 910 F.2d 1084,
1102-05 (3rd Cir. 1990), cert. denied sub nom, Scarfo v. U.S.
—___: U.S. __, 111 S. Ct. 2009, 111 S. Ct. 2010, 111 S. Ct.
2011 (1991), the Third Circuit rejected a vagueness chal-
lenge. In U.S. v. Angiulo, 897 F.2d 1169, 1179-80 (1st Cir.),
cert. denied, __ U.S. __, 111 S.Ct. 130 (1990), the First
Circuit rejected a vagueness argument. A flood of district
court cases likewise have rejected vagueness attacks. See
e.g., U.S. v. Marchese, No. 89 Cr. 229, 1991 U.S. Dist. LEXIS
4767 (S.D.N.Y. 1991) (rejecting argument that RICO stat-
ute is unconstitutionally vague); Chase Manhattan Bank v.
Malatesta, No. 86 Civ. 1808, 1990 U.S. Dist. LEXIS 9222
(S.D.N.Y. 1990) (rejecting vagueness argument in light of

Ee

21

Supreme Court’s recent interpretation of “pattern” and
fair warning provided by statutes listed under § 1961(1));
Uniroyal Goodrich Tire Co. v. Mutual Trading Corp., 749 F.
Supp. 869 (N.D. Ill. 1990) (finding RICO’s pattern require-
ment constitutional); In Re Crazy Eddie Securities Litiga-
tion, 747 F. Supp. 850 (E.D.N.Y. 1990) (finding the statute
constitutional); In Re Par Pharmaceutical, Inc. Securities
Litigation, 733 F. Supp. 668, 683 n.15 (S.D.N.Y. 1990)
(declining to strike down RICO statute).

Fryar has not cited one decision holding to the con-
trary. Instead, ignoring the numerous decisions squarely
rejecting the vagueness argument in a RICO case, Fryar
relies heavily on Justice Scalia’s dictum in his H.J. concur-
rence and argues that the statute is void on its face.
Fryar’s reliance is misplaced. Justice Scalia’s language
seized upon by Fryar does not hold that the RICO statute
is unconstitutionally vague. Indeed, Justice Scalia
acknowledged that “[n]o constitutional challenge to this
law has been raised in the present case, and so that issue
is not before us.” 109 S. Ct. at 2909. Justice Scalia’s com-
ments merely are dictum.

More importantly, Fryar’s facial challenge to the
RICO statute ignores the well-established principle recog-
nized by the Court of Appeals that outside the First
Amendment context, a facial challenge to a statute will
not lie.” Rather, the vagueness challenge must be limited

” Fryar also argues without authority that in a civil action
suit the RICO statute must be considered a criminal statute. To
the contrary, courts, including this one, have held that RICO is
not to be judged by criminal standards. Shearson/American
Express, Inc. v. McMahon, 482 U.S. 220, 240, 107 S. Ct. 2332, 2344

(Continued on following page)

22

to whether the statute is vague as applied to the defen-
dant’s conduct. U.S. v. Pungitore, 910 F.2d 1084, 1104 (3rd
Cir. 1990), cert. denied sub nom Scarfo v. U.S.,__ US. _,
111 S. Ct. 2009, 111 S. Ct. 2010, 111 S. Ct. 2011 (1991)
(“outside the First Amendment context, a party has
standing to raise a vagueness challenge only insofar as
the statute is vague as applied to his or her specific
conduct”); U.S. v. Angiulo, 897 F.2d 1169, 1179 (1st Cir.),
cert. denied, ___ U.S. ___, 111 S. Ct. 130 (1990) (in absence
of First Amendment considerations, vagueness challenge
must be examined in light of a case’s particular facts); see
also U.S. v. National On Lelong Chinese Merchants Ass‘n,
No. 90 CR 760, 1991 U.S. Dist. LEXIS 2341 (N.D. Ill. Feb.
15, 1991). Thus, the proper inquiry is whether persons of
ordinary intelligence would know that Fryar’s myriad of
criminal offenses at issue here constitutes a pattern of
racketeering activity. Fryar has not and cannot establish
that the statute failed to give fair notice that his conduct
was forbidden. A person of ordinary intelligence could
hardly not realize that Fryar’s repeated use of the mails
and wires to knowingly mislead over 500 prospective
bondholders about a land transaction that significantly
affected Westside’s financial structure from which he

(Continued from previous page)

(1987) (rejecting argument that RICO claims were quasi-crimi-
nal and not subject to arbitration); Liquid Air Corp. v. Rogers,
834 F.2d 1297, 1302-03 (7th Cir. 1987), cert. denied, 492 U.S. 917,
109 S. Ct. 3241 (1989) (rejecting the argument that RICO was
quasi-criminal in nature); U.S. v. Cappetto, 502 F.2d-1351 (7th
Cir. 1974), cert. denied, 420 U.S. 925, 95 S. Ct. 1121 (1975) (a civil
RICO action should not be judged by the criminal standards of
constitutional protection).

23

te AD A A

enriched himself by more than $2,000,000 did not fall
within the ambit of RICO. Fryar’s constitutional chal-
lenge is totally devoid of merit.

7. Fryar’s Due Process Rights Were Not Violated.

Fryar argued for the first time in his Petition for
Rehearing (A-51) to the Court of Appeals that recon-
sideration of the jury verdict in light of this Court's
decision in H.J. constitutes an “impermissible retroactive
application of a change of substantive law” violative of
his due process rights.§ Fryar cites no authority for this
novel proposition. Moreover, the basic premise of Fryar’s
argument is faulty - that this Court’s decision in H.J.
constituted a substantive expansive change in the law.
(Petition for Certiorari, pp. 35-36). To the contrary, as
explained by the Court of Appeals:

H.J. has, if anything, resolved rather than
revolutionized the law .. .

946 F.2d at 1167.

Fryar, nevertheless, argues that this Court’s decision
in H.J. expanded the parameters of RICO. Fryar’s argu-
ment turns logic on its head. H.J., if anything, casts a
significantly smaller net over RICO defendants than
under R.A.G.S. Couture, Inc. v. Hyatt, 774 F.2d 1350 (5th
Cir. 1985), the prior Fifth Circuit precedent under which
proof of only two predicate acts established a pattern of

® The Court of Appeals specifically identified the three
questions of law before it on appeal. 946 F.2d at 1165. Cortspic-
uously absent from the list are Fryar’s due process and Sev-
enth Amendment arguments asserted here.

24

racketeering activity. H.J., thus, narrowed and clarified
the statute rather than expanded it. No authority has
been found supporting the proposition that application of
a decision clarifying and narrowing of a statute violates
due process.? Indeed, courts have rejected Fryar’s argu-
ment where judicial expansion of a Statutory construction
occurs if such construction is expected and defensible.
U.S. v. Martino, 648 F.2d 367 (Sth Cir. 1981), cert. denied
sub nom, Lazzara v. U.S., 456 U.S. 943, 102 S. Ct. 2007
(1982), cert. denied, 456 U.S. 949, 102 S. Ct. 2020 (1982);
U.S. v. Angiulo, 847 F.2d 956 (1st Cir.), cert. denied sub nom,
Cincotti v. U.S., 488 U.S. 852, 109 S. Ct. 138, cert. denied,
488 U.S. 928, 109 S. Ct. 314 (1988) (rejecting due process
argument where change of construction of RICO statute
regarding “enterprise” was foreseeable). If an expected
and defensible judicial expansion of a statute may be
retroactively applied without violating due process, a
fortiori judicial narrowing and classification of a statute
may be retroactively applied.

Further, acceptance of Fryar’s argument does not
require review of the decision below. If Fryar’s argument
is correct, then the law in effect at the time as enunciated

* In contrast, where a decision clearly expands the scope
of a criminal statute prohibiting conduct implicating First
Amendment ‘values, the decision cannot be applied retroac-
tively. Marks v. U.S., 430 U.S. 188, 97 S. Ct. 990 (1977) (peti-
tioners entitled to jury instructions fashioned under prior case
law where decision expanded definition of obscenity); Bouie v.
City of Columbia, 378 U.S. 347, 84 S. Ct. 1697 (1964) (judicial
expansion of criminal statute cannot be applied retroactively).
The principles of Marks and Bouie cited by Fryar do not apply
to this case involving neither a criminal Statute nor First
Amendment conduct.

6

aa cara eaecemailmiaaaai

25

in R.A.G.S. must apply. Under R.A.G.S., Fryar’s conduct
clearly was violative of RICO, as previously found by the
Fifth Circuit. Abell v. Potomac Ins. Co., 858 F.2d 1104 (5th
Cir. 1988). Further review is not required.

8. Reconsideration by the District Court did not
Infringe Upon Fryar’s Right to Trial by Jury.

Fryar also argued for the first time in his Petition for
Rehearing that reconsideration of the jury verdict in light
of H.J. by the district court infringed upon his right to a
trial by jury, violative of the Seventh Amendment. Fryar’s
argument is disingenuous and diametrically opposed to
Fryar’s contentions in the Court of Appeals. Rather than
arguing that a jury must reconsider the verdict in light of
H.J., in the Court of Appeals Fryar sought to prevent the
district court from considering the issues. In a Motion to
Recall the order remanding the case to the district court,
Fryar argued to the Court of Appeals that “the legality of
respondents’ civil RICO claims against movant should be
decided by this Court based on the record on appeal”.
(A-61). Fryar never requested that the issue be considered
by a jury. (A-59). Having so argued that the case should
be reconsidered based on the record on appeal, and hav-
ing failed to request a new trial by jury or to object to
entry of the judgment on that ground, Fryar clearly has
waived his right to do so. U.S. v. 1966 Beechcraft Aircraft
Model King Air, 777 F.2d 947 (4th Cir. 1985) (claimants
failure to object to district court’s resolution of issues
constitutes a waiver of right to jury trial).

Further, Fryar’s argument rests upon a faulty prem-
ise - that every remand for reconsideration of a jury

26

verdict in light of a subsequent appellate decision
requires a remand to the district court for a new trial. To
the contrary, as Fryar Previously argued the Supreme
Court’s directive clearly contemplated that “the legality
of respondents’ civil RICO claims against movant should
be decided by this Court based on the record on appeal. The
resolution of that legal question by this Court will impart
finality thereto, except as the Supreme Court may decide
to review such a decision on application for a writ of
certiorari.” (A-61-62). Accordingly, Fryar’s right to a jury
trial has not been infringed.

¢

CONCLUSION

Fryar’s failure to timely urge the arguments offered
in his Petition for Certiorari is fatal; the untimely argu-
ments should not be considered. Moreover, the argu-
ments are meritless. The RICO statute as applied to
Fryar’s fraudulent conduct spanning more than ten years
and victimizing over 500 bondholders is not unconstitu-
tionally vague. Consideration of the jury’s verdict in light
of H.J. neither is violative of Fryar’s due process rights or

27

the right to a trial by jury. For these reasons, Fryar’s
Petition for Writ of Certiorari should be denied.

Respectfully submitted,

PHiture A. WITTMANN, 13625

KYLE SCHONEKAS, 11817

Jupy Y. Barrasso, 2814

C. LAwreNcE OrLANSKy, 2039
OF

STONE, PIGMAN, WALTHER,
WITTMANN & HuTCHINSON

546 Carondelet Street

New Orleans, Louisiana 70130

Telephone: (504) 581-3200

Attorneys for Respondents

A-1

UNITED STATES of America,
Plaintiff-Appellee,

v.
Joe E. FRYAR, Defendant-Appellant.
No. 88-4200.

United States Court of Appeals,
Fifth Circuit.

March 1, 1989.
Rehearing Denied April 18, 1989.

Clinard J. Hanby, Houston, Tex., J. Minos Simon,
Lafayette, La., for defendant-appellant.

John P. Lydick, Asst. U.S. Atty., Joseph S. Cage, Jr.,
U.S. Atty., John A. Broadwell, Asst. U.S. Atty., Shre-
veport, La., for plaintiff-appellee.

Appeal from the United States District Court for the
Western District of Louisiana.

Before BROWN, JOHNSON and DAVIS, Circuit
Judges.

W. EUGENE DAVIS, Circuit Judge:

Appellant, Joe E. Fryar, challenges his-conviction fol-
lowing a jury’s guilty verdict on eight counts of jury
tampering and conspiracy to corruptly influence a jury.
We find no error and affirm.

a

A jury convicted Fryar on eight counts of obstruction
of justice, conspiracy, and aiding and abetting under 18

|

A-2

U.S.C. §§ 2, 371, and 1503. The charges stemmed from
efforts to bribe three jurors during the trial of a civil case
in the United States District Court for the Western Dis-
_trict of Louisiana, in which Fryar was a defendant. The
government presented evidence that Fryar conveyed
bribe offers to two jurors using intermediaries. Two of
those intermediaries testified for the prosecution.

On the government’s motion, the district court
sequestered the jury that was hearing Fryar’s jury tam-
pering case in a section of the Holiday Inn in Monroe,
Louisiana. Two marshals were stationed in an end room
at the head of the staircase; another was positioned in a
room at the other end of the jurors’ rooms. The drapes in
both rooms were open. The marshals also placed yellow
cones bearing “No Trespassing” signs at each end of the
balcony.

As the jurors chatted in the courthouse jury room on
Saturday, January 30, 1988, juror Steven Faulkner stated
that a woman had come to his room about 1:30 a.m.
Saturday. Several jurors, including Pam Guillot, advised
him to report the visit to the marshals. Faulkner said he
had told the marshals about the visit that morning, and
then clarified his description of the visit. Faulkner, whose
room, 250, was three doors down from the guards’ com-
mand post room, told the other jurors that a young
woman had knocked on his motel door the night before
looking for a fraternity party. He said he told the woman
he knew nothing about the party and closed his door.

While the jurors watched a movie Saturday night in
one of the hotel rooms, a dance scene prompted Guillot io
ask Faulkner if the dancer looked like the woman who

A-3

had come to his room the night before. Deputy Marshal
James Rea overheard the remark and asked Guillot what
she was talking about; she repeated Faulkner’s earlier
statements. Rea told two other marshals about the state-
ment, after which the three marshals asked Faulkner to
step out of the room. When they asked him which mar-
shal he had told about the visit, Faulkner said he could
not remember.

On Sunday morning one of the marshals told Deputy
Marshall James Pleicones about Faulkner’s statements.
Faulkner repeated his story to Pleicones outside the pres-
ence of the other jurors. When Pleicones asked which
marshal Faulkner had informed, Faulkner first said he
had told Pleicones. After Pleicones denied being told,
Faulkner said he must have told Deputy Marshal David
Murphy. When Murphy also denied being told, Faulkner
said he could not remember who he had told but added
that juror Guillot would know. Pleicones then talked with
Guillot alone, who recounted her jury room conversation
with Faulkner but said she did not see Faulkner tell any
marshals about the incident.

After the morning break on Monday, February 1,
1988, the district court recessed the trial temporarily to
interview the marshals and jurors in chambers. The three
marshals on guard duty during the Friday-to-Saturday
overnight shift told the court they neither saw nor heard
anyone walking on the balcony or knocking on the jurors’
doors. The district court then interviewed Faulkner and
Guillot separately. Faulkner described the visit and its
aftermath again. Guillot confirmed the jury room conver-
sation with Faulkner but stated that she did not think the
visit had occurred. Guillot also stated that the Faulkner

A-4

incident would not influence her ability to decide the case
fairly and impartially. The court did not ask Faulkner
whether he still could decide the case fairly and impar-
tially.

The district court then excused Faulkner from the
jury over Fryar’s objection. The court concluded that
Faulkner lied about the visit, had continued to lie in the
face of questioning, and thus was not fit to serve as a
juror. Alternate juror Eddie Rice took Faulkner’s place
and eventually became the foreman. The court denied
Fryar’s motion to remove Guillot from the jury.

The court then interviewed the remaining jurors sep-
arately about the incident. Five said they believed the
visit had not occurred, five thought it had occurred, and
three said they were not sure. All said the Faulkner
incident would not affect their impartiality. The court
admonished each juror individually not to discuss the
interview with the other jurors.

After reconvening, the district court instructed all of
the jurors with Fryar’s consent to draw no conclusions or
inferences from Faulkner’s excusal. Fryar moved for a
mistrial on grounds that the taint of Faulkner’s dismissal
persisted because five jurors believed his story about the
visit. The court denied this motion and Fryar’s renewed
motion to excuse Guillot.

Fryar moved for a new trial after his conviction on
grounds that the district court had excused juror Fau-
Ikner erroneously. During a post-trial hearing on the
motion, Fryar presented Karen Gant and her sister,
Juanita Woods, in an effort to prove that a woman had
knocked on Faulkner’s door early Saturday mornifg.

.

A-5

Gant testified that her sister had told her that a
fraternity would be holding a party Friday night, January
29, 1988, in room 254 or 250 at the Holiday Inn in Monroe.
She stated that she knocked on three or four doors in the
250-series while looking for the party; one person fitting
the general physical description of juror Faulkner opened
the door and told her she had the wrong room, according
to Gant. She testified that she spoke loudly at the doors,
Saw No warning signs or open drapes, and saw nothing to
distinguish the row of rooms from any other in the hotel.

Deputy Marshal Richard Frandsen also testified dur-
ing the hearing about the placement of warning signs in
the hotel stairwells. Frandsen, who was not on duty that
Friday night, said he told each deputy of the sign require-
ment and, in anticipation of the fraternity party, warned
them to be especially watchful Friday night. Frandsen
stated that the warning signs were in open view each
time he visited the hotel during the jury’s sequestration.
The district court concluded that Gant did not know for
certain which doors she had knocked on that night and
denied Fryar’s new trial motion.

Following the sentencing and after filing notice of
appeal, Fryar moved for release on bond pending appeal
and filed a supplement to the motion. The supplement
alleged that juror Eddie Rice had failed to disclose a prior
conviction for driving while intoxicated after being asked
on voir dire whether he had ever been convicted of or
pled guilty to a crime. The court, with the parties’ con-
sent, treated the supplement as a motion for new trial and
ordered a hearing. Rice acknowledged at the hearing that
he had pled guilty to a D.W.I. charge in 1987. However,

tee)

ee

A-6

the court concluded that Rice had mistakenly but justifia-
bly assumed that a D.W.I. conviction was considered a
traffic offense rather than a crime, and denied Fryar’s
motion for new trial. Fryar appeals.

IT.
a

In his first attack, Fryar seeks to portray the alleged
visit to Faulkner as an extrinsic influence on a juror
regarding a matter pending before the jury, which creates
a rebuttable presumption of prejudice to the defendant.
Remmer v. Uniled States, 347 U.S. 227, 229, 74 S.Ct. 450,
451, 98 L.Ed. 654 (1954); United States v. Webster, 750 F.2d
307, 338 (Sth Cir.1984), cert. denied, 471 U.S. 1106, 105 S.Ct.
2340, 85 L.Ed.2d 855 (1985). But the Faulkner incident is
more properly characterized as juror misconduct given
the district court’s finding that the purported visit did
not happen. As such, we review the district court’s
actions under the abuse of discretion standard. See United
States v. Dominguez, 615 F.2d 1093, 1095 (5th Cir.1980);
United States v. Smith, 550 F.2d 277, 285 (5th Cir.) cert.
denied sub nom. Wallace v. United States, 434 U.S. 841, 98
S.Ct. 138, 54 L.Ed.2d 105 (1977). Further, the Remmer
presumption of prejudice does not come into play here
even if we assume that the contact occurred because
absolutely no evidence suggests that the purported visi-
tor tried to talk to Faulkner about the trial. See Remmer,
347 U.S. at 229, 74 S.Ct. at 451; United States v. Burke, 496
F.2d 373, 377 (5th Cir.), cert. denied, 419 U.S. 966, 95 S.Ct.
229, 42 L.Ed.2d 182 (1974).

A-7

Fryar, relying heavily on the testimony of Karen
Gant, argues that the district court erred when it con-
cluded that no visit occurred and dismissed Juror Fau-
lkner. We cannot agree that the district court’s resolution
of this fact issue, based on the conflicting testimony of
Faulkner, Gant and the marshals, is “wholly unsupported
by the evidence.” See United States v. O'Keefe, 722 F.2d
1175, 1178 (Sth Cir.1983); United States v. Granza, 427 F.2d
184, 185 (5th Cir.1970).

Gant’s testimony about the incident was imprecise
and uncertain. She recalled that she knocked on doors 254
and 250 while searching for the party, yelled or talked
loudly through the hotel doors, and stated that a short
and sleepy-looking black man answered door 250. She
also stated that she saw no warning signs, marshals or
open drapes. But Gant, who testified that she was
“vague” about the details of her search because she was
anticipating the party at the time, repeatedly said she was
not sure about particular room numbers.

The district court was entitled to weigh this equivo-
cal testimony against the statements of the marshals on
guard duty that night. The marshals stated that (1) they
heard and saw no visitors in the hall that night; and (2)
the placement of their guard posts — one of which was
three doors down from Faulkner’s room - made it
unlikely that a visitor could escape detection while
knocking and yelling at the jurors’ doors.

The marshal’s testimony supports the distict court’s
decision to reject Faulkner’s testimony. The district court
also was entitled to resolve the dispute about whether
Faulkner reported the alleged visit to the marshals and

A-8

conclude that Faulkner lied about reporting it. The court
did not abuse its discretion in concluding that the visit
did not occur and that Faulkner had lied.

The district court has the discretion to excuse an
untruthful juror. See Dominguez, 615 F.2d at 1095; Smith,
550 F.2d at 285. Nor did the court exceed its discretion
when it evaluated juror Guillot’s statements, accepted her
pledge of impartiality and refused to excuse her for lack
of candor or her contacts with Faulkner. Her conversa-
tions with the marshals and the Court related to the
Faulkner incident, not to Fryar’s case.

Similarly, the scope of an investigation into juror
misconduct rests with the court’s discretion. Tillman v.
United States, 406 F.2d 930, 938 (Sth Cir.), vacated on other
grounds, 395 U.S. 830, 89 S.Ct. 2143, 23 L.Ed.2d 742 (1969).
We detect no abuse of that discretion in the court’s indi-
vidual interviews with the jurors and marshals, or in its
instruction that the jurors should draw no conclusions
from Faulkner’s dismissal. Nor do we detect any actual
Prejudice to Fryar from this incident. All of the remaining
jurors affirmed their ability to decide this case impar-
tially; we see no reason to doubt the district court’s
determination that they were sincere. See Smith v. Phillips,
455 U.S. 209, 217 n. 7, 102 S.Ct. 940, 946 n. 7,71 L.Ed.2d 78
(1982).

We decline Fryar’s invitation to presume that this
juror misconduct prejudiced Fryar because the miscon-
duct and investigation inv>ived a sequestered jury hear-
ing a jury tampering case. Fryar’s reliance on !Jnited
States v. Shapiro, 669 F.2d 593 (9th Cir.1982), is misplaced.
In Shapiro, the Ninth Circuit held that the district court

A-9

should have granted a mistrial after one juror attempted
to extort money from a party in return for a favorable
verdict. The Ninth Circuit concluded that the entire panel
had been tainted because: (1) several jurors’ responses to
a special voir dire indicated that the jurors had discussed
the case among themselves; and (2) the form of the dis-
trict court’s voir dire questioning planted the idea in
jurors’ minds that out-of-court misconduct by the pros-
ecution or the defendants had prompted the questioning. !
Given this situation, the Ninth Circuit presumed that the
defendants had been prejudiced. Id. at 603.

* The Ninth Circuit included this excerpt from the trial
transcript:

THE COURT: Do you have any idea or suspicion
about the reason for this questioning of you?

JUROR CHUMLEY: I really hadn’t thought about it,
but no, I don’t. It does make a person wonder. There
obviously has to be a reason.

THE COURT: Do you think this questioning has
been occasioned by any out-of-court misconduct by
the prosecution or any of the defendants?

JUROR CHUMLEY: Now this is what I should have
been — normally would have been thinking about
during lunch and everything, but we had a large
lunch and we have been playing cards and I really
had not thought about it.

THE COURT: I am just planting thoughts in your
mind, huh?

JUROR CHUMLEY: In a sense, yes.

Shapiro, 669 F.2d at 601. Another juror responded unequivo-
cally that she did believe a party’s misconduct had prompted
the court’s questioning. Id. at 602.

A-10

Fryar’s case does not present such an egregious situ-
ation. The district court asked the jurors individually (1)
what they had heard about the incident; (2) what infer-
ences they drew from it; and (3) whether it would affect
their ability to be fair and impartial. Unlike that court’s
questions in Shapiro, these generic questions do not sug-
gest misconduct by either party.

Similarly, Faulkner’s misconduct itself is insufficient
to create a presumption of prejudice here. The Fifth Cir-
cuit considered Shapiro in a case in which a juror
announced in the jury room before closing arguments had
ended that the defendants “were guilty from day one
[and] that he . . . wasn’t listening to the argument.”
Webster, 750 F.2d at 336. The court dismissed the offend-
ing juror, interviewed the remaining jurors individually
and concluded that they had not been tainted. Id. at 337.
In refusing to adopt Shapiro's presumption of prejudice in
these circumstances this court stated:

[S]itting as we do far from the daily rigors of
trial, we are in a particularly inappropriate posi-
tion from which to judge the effect of a juror’s
premature expression of an opinion as to guilt
on the minds of the other members of the jury
panel. That is precisely why we have tradi-
tionally left the manner of handling jury mis-
conduct to the sound discretion of the trial
judge.

Webster, 750 F.2d at 338 (citations omitted). This reasoning
applies with equal force to Fryar’s situation.

Finally, Fryar asks us to find prejudice in the mar-
Shals’ interviews with Faulkner and Guillot on Saturday

A-11

and Sunday. Once again we perceive no abuse of discre-
tion in the district court’s refusal to grant a new trial
based on these contacts. See United States v. Albert, 595
F.2d 283, 290 (Sth Cir.), cert. denied, 444 U.S. 963, 100 S.Ct.
448, 62 L.Ed.2d 375 (1979). We also note that Fryar has
waived any argument to excuse Guillot based on the
contacts with marshals because he made no motion below
to excuse her on these grounds.

r

Fryar argues that juror Eddie Rice’s failure to dis-
close on voir dire a prior conviction for driving while
intoxicated denied him the right to an impartial jury. We
review the district court’s refusal to grant a new trial on
these grounds for abuse of discretion. United States v.
Fowler, 735 F.2d 823 (5th Cir.1984).

At the post-trial hearing Rice admitted that he had
pled guilty to a D.W.I. charge in 1987. However, he stated
that he did not remember hearing the question about
prior convictions when the district court asked it gener-
ally of the jurors. Rice also stated that if he had heard the
question he would have considered D.W.I. to be a mere
traffic violation rather than a “crime;” he added that his
lawyer told him it counted as a traffic violation.

The court concluded that Rice probably heard the
question but did not purposely answer it untruthfully.
The court noted a possible source of Rice’s confusion in
its colloquy with another juror; when that juror asked if
traffic violations counted as “crimes,” the court
responded that speeding was not a crime. Under these
facts we perceive neither an abuse of discretion by the

A-12

district court nor any reason to presume bias to Fryar
from Rice’s inaccurate answer. See United States v. Nell,
526 F.2d 1223, 1229 (5th Cir.1976). Thus, we find no merit
in Fryar’s companion argument that Rice’s inaccurate
answer impaired Fryar’s ability to exercise his peremp-
tory challenges.

3.

In his next point, Fryar claims that the district court
improperly excluded evidence of prior grand jury testi-
mony during his cross-examination of Richard Davis,
who testified for the government under a grant of immu-
nity. Davis testified that Fryar asked him to find a way to
contact three jurors and get them to vote in Fryar’s favor
in the civil case. During an offer of proof outside the
jury’s presence, Davis stated that he had testified before
grand juries in 1960, 1972 and 1983 or ‘84; he testified
under a grant of immunity at the 1972 grand jury appear-
ance. The district court, finding that the potentially-preju-
diciai effect of the testimony exceeded its probative
value, excluded the testimony under Fed.R.Evid. 403.

The scope of cross-examination and its limits rest
with the district court’s discretion. United States v. Bal-
liviero, 708 F.2d 934, 940 (Sth Cir.), cert. denied, 464 US.
939, 104 S.Ct. 351, 78 L.Ed.2d 316 (1983). Fryar argues that
Davis’ prior grand jury appearances were crucial to his
theory that Davis acted on his own in trying to bribe the
jurors because he knew he could make a deal with the
government if he got into trouble. We find no abuse of
discretion in the court’s conclusion that the danger of
prejudice from evidence of a fifteen-year-old grant of

A-13

immunity and two unrelated grand jury appearances dat-
ing back twenty-eight years outweighed the probative
value. This history provides no significant support to
Fryar’s argument that the government would approve
future grants of immunity.

4.

Finally, Fryar claims that the district court infringed
his sixth amendment right to confront witnesses when it
denied his request to reveal a confidential informant’s
identity.

Under Roviaro v. United States, 353 U.S. 53, 62, 77 S.Ct.
623, 628, 1 L.Ed.2d 639 (1957), courts must make dis-
closure decisions by balancing the individual’s right to
prepare a defense against the public interest in encourag-
ing the flow of information from informants by preserv-
ing their anonymity. In applying this test, this court has
held that Roviaro does not require the disclosure of the
identities of “mere tipsters.” United States v. Fisher, 531
F.2d 783, 787 (5th Cir.1976); see also United States v. De Los
Santos, 810 F.2d 1326, 1334-35 (5th Cir.) (informant’s privi-
lege overrides sixth amendment right to confrontation),
cert denied, __ U.S. __, 108 S.Ct. 490, 98 L.Ed.2d 488
(1987).

After reviewing the sealed F.B.I1. documents included
in this record and the edited transcript from the civil trial
hearing at which the F.B.I. first brought the information
to light, we conclude that the informant was a tipster. The

A-14

district court did not err in denying disclosure of the
tipster’s identity.

The court’s judgment of conviction is

AFFIRMED.

) A-15

EXHIBIT 3

TO MAX RE: FLEMING

THE TRIAL IS A CIVIL ACTION AND OCCURS ON
DECEMBER 1, 1986. IT IS NOT CRIMINAL - FLEMING
DOES NOT HAVE TO TESTIFY AND SHOULD NOT.

FLEMING SHOULD RESIST BEING DEPOSED.
HARGAN IS ACQUAINTED WITH THE CASE AND
SHOULD REPRESENT HIM. THE FOLLOWING POINTS

ARE MADE:

1.

A.A. IS AN EXEMPT COMPANY AND
SHOULD BE PROTECTED BY BERMUDA’S
SECRECY LAWS.

FLEMING HAS A DUTY AND OBLIGA-
TION OF CONFIDENTIALITY REGARD-
ING HIS ‘CLIENTS BUSINESS AND
RECORDS.

FLEMING HAS NO RIGHT TO POSSESS
ANY ORIGINALS, COPIES, CORRESPON-
DENCE, RECORDS OR RECOLLECTIONS
PERTAINING TO A.A. AND SHOULD
IMMEDIATELY SURRENDER ANY THAT
HE HAS TO THE COMPANY AND FORGET
ANYTHING THAT HE RECALLS.

TESTIMONY RELATIVE TO FUNDING
A.A. VIA ANGLO AND FRYAR’S
INVOLVEMENT WITH ANGLO WOULD
BE VERY DAMAGING TO A.A.’S EFFORTS
TO RECOVER THE BONDS.

ANY LOSS THAT A.A. SUFFERS BECAUSE
OF FLEMING’S RECORDS, TESTIMONY
OR VIOLATING THE CONFIDENTIALITY
OF A.A.’S BUSINESS WILL CAUSE A.A. TO

A-16

SEEK ECONOMIC RECOVERY VIA LEGAL
ACTION AGAINST FLEMING.

6. IF HE AVOIDS BEING DEPOSED OR UPON
BEING DEPOSED, RESPECTS THE CONFI-
DENTIAL RELATIONSHIP BETWEEN HIM-
SELF AND A.A., THEN HE CAN EXPECT
TO RETAIN A GOOD AND GENEROUS
CLIENT. BUT IF HE DIVULGES OUR BUSI-
NESS, THEN IT WILL BE INCUMBENT ON
A.A. THRU THE COURTS TO LET HIS PRE-
SENT AND FUTURE CLIENTS KNOW THE
LOOSENESS WITH WHICH THEIR BUSI-
NESS DEALINGS ARE HANDELED [sic].

~ THIS WILL HARDLY INSPIRE CONFI-
DENCE IN CLIENTS OF FLEMING.

J. H. SMITHERS

A-17

89-160
CRIMINAL DOCKET ,

TITLE OF CASE

THE UNITED STATES
US.
MICHAEL WAYNE BOUDREAUX (CTS. 1 - 14)

JOSEPH E. FRYAR (CTS. 7 - 11)
MALCOLM ZIEGLER (CTS. 7-11 &
14)
LUTHER RICHARDSON, JR. Crs. 7, 9, 1%)
Super. Indict.- LEO FONTENOT (CT. 7)
THOMAS M. BOUTWELL
RORY HARRIS

REPORT CURRENCY TRANSACTIONS

18:371 Ct. 7
18:1956(a)(3) Cts. 8 & 9

18:2 Cts. 8-11 & 14
31:5313(a) Cts. 1 - 6 & 10 - 14)
31:5322(b) Cts. 1 - 6 & 10 - 14)
31:5324(3) Cts. 2, 4, 6 & 13)

31:5324(1) Cts. 10 & 11

A-18

31CFR 103.22 Cts. 1-6 & 10 - 14)
31CFR 103.25 Cts. 1-6 & 10-14)

ATTORNEYS

For U.S.: | WALTER BECKER
500 Camp St.
New Orleans, LA 70130
William McSherry

For Defendant! DANIEL MARKEY
2912 Canal St.
New Orleans, LA 70199
(504) 821-1886
For: Ziegler & Fryar
FRANK SLOAN
148 Crapemyrtle Rd.
Covington, LA 70433
(504) 893-4058
For: Richardson

ADDL ATTYS CO:

CASH RECEIVED AND DISBURSED

DATE
MONDAY, OCTOBER 30, 1989
9:30 AM

Courtroom Deputy: Pam Radosta
Court Reporter - Tom Conrad

ARRAIGNMENT ON 4th SUPERSEDING
INDICTMENT (DEFT. JOSEPH FRYAR)

Deft. present to Plea Guilty as to COUNTS 2 AND 6 of
the 4th Superseding Indictment.

A-19

Deft. Sworn and questioned by the court.

Deft. informed of rights to trial by jury or the court and
waives same.

4th Superseding Indictment (Cts 2 & 6) read to the deft
by the court.

Deft. informed of the maximum penalties.
Deft. informed of sentence guidelines.
Deft. enters a plea of Guilty.

Plea Bargain disclosed to the court in letter form and
same is filed.

Government states the facts of the case to the court

Plea Accepted and deft. is Adjudged Guilty on plea
Guilty.

Pre-sentence investigation ORDERED.
Deft. remanded

DATE OF ENTRY NOV 02 1989

A-20

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
LAFAYETTE-OPELOUSAS DIVISION

EDWARD C. ABELL, JR., and CIVIL
CAREY WALTON, ET AL ACTION
VERSUS NUMBER:
POTOMAC INSURANCE 84-1786 “O
COMPANY, ET AL (JUDGE SHAW)
(MAGISTRATE
METHVIN)

MEMORANDUM IN SUPPORT OF DEFENDANT'S
MOTION TO DISMISS CIVIL RICO CLAIMS AND IN
OPPOSITION TO PLAINTIFFS’ MOTION FOR ORDER
UPHOLDING JURY VERDICT, READJUSTING ATTOR-
NEYS’ FEE AWARD, AND RECALCULATING INDIVID-
UAL PLAINTIFFS’ DAMAGE AWARD

MAY IT PLEASE THE COURT:

(1). STATEMENT OF THE CASE

This Court has granted defendant Joe E. Fryar until
Monday, May 7, 1990, to provide it with his pleadings
and memoranda directed to the issues raised by the
United States Court of Appeals for the Fifth Circuit's
remand of the above captioned civil action for further
proceedings in light of H.J. Inc. v. Northwestern Bell
Telephone Company, 492 U.S. __, 109 S.Ct. 2893, 106
L.Ed.2d 195 (1989). Defendant has responded by filing

A-21

simultaneously herewith a motion to dismiss the civil
RICO claims asserted against him by the plaintiff-class of
bondholders in Westside Rehabilitation Center (plain-
tiffs). Defendant submits this memorandum in support of
his motion to dismiss and in opposition to plaintiffs’
motion for order upholding jury verdict, readjusting
attorneys’ fee award, and recalculating individual plain-
tiffs’ damage award.

Defendant’s motion to dismiss sets forth the tortured
procedural history of this case in detail, as well as the
grounds relied upon for the relief he seeks. Succinctly
stated, defendant alleges that this Court should find that
18 U.S.C. §§ 1961, et. seq., violates the procedural due
process guarantee of U.S.C. Const. Amend. 5 that appro-
priate notice of a proscription must be given before a
person can be held accountable for its violation. Alter-
natively, defendant alleges that this Court should find
that 18 U.S.C. §§ 1961, et. seq., does not reach the isolated
and sporadic criminal acts shown by respondents in this
case. Thereafter, based on either of these findings, this
Court should dismiss the civil RICO claims asserted by
plaintiffs against defendant.

(II). LAW AND ARGUMENT

(A). 18 U.S.C. §§ 1961, ET. SEQ., IS VOID
FOR VAGUENESS

Defendant initially contends that 18 U.S.C. §§ 1961,
et. seq., violates one of the procedural due process guar-
antees emanating from U.S.C. Const. Amend. 5, i.e.,
appropriate notice of a proscription must be given before

A-22

a person can be held accountable for its violation. Plain-
tiffs’ civil RICO claims asserted against defendant arise
under 18 U.S.C. §§ 1961, et. seq. In particular, plaintiffs
rely on 18 U.S.C. § 1964(c), which provides:

Ҥ 1964. Civil remedies

(c) Any person injured in his business or
property by reason of a violation of section
1962 of this chapter may sue therefor in any
appropriate United States district court and
shall recover threefold the damages he sustains
and the cost of the suit, including a reasonable
attorney’s fee.” (Emphasis added). (COPR. (C)
WEST 1990 NO CLAIM TO ORIG. U.S. GOVT.
WORKS).

Consequently, plaintiffs alleged and attempted to
prove that defendant violated 18 U.S.C. Ҥ 1962, which
provides:

Ҥ 1962. Prohibited activities

(a) It shall be unlawful for any person
who has received any income derived, directly
or indirectly, from a pattern of racketeering
activity or through collection of an unlawful
debt in which such person has participated as a
principal within the meaning of section 2, title
18, United States Code, to use or invest, directly
or indirectly, any part of such income, or the
proceeds of such income, in acquisition of any
interest in, or the establishment or operation of,
any enterprise which is engaged in, or the activ-
ities of which affect, interstate or foreign com-
merce. A purchase of securities on the open
market for purposes of investment, and without
the intention of controlling or participating in
the control of the issuer, or of assisting another

A-23

to do so, shall not be unlawful under this sub-
section if the securities of the issuer held by the
purchaser, the members of his immediate family,
and his or their accomplices in any pattern or
racketeering activity or the collection of an
unlawful debt after such purchase do not
amount in the aggregate to one percent of the
outstanding securities of any one class, and do
not confer, either in law or in fact, the power to
elect one or more directors of the
issuer. (b) It shall be unlawful for any per-
son through a pattern of racketeering activity
or through collection of an unlawful debt to
acquire or maintain, directly or indirectly, any
interest in or control of any enterprise which is
engaged in, or the activities of which affect,
interstate or foreign commerce.

(c) It shall be unlawful for any person
employed by or associated with any enterprise
engaged in, or the activities of which affect,
interstate or foreign commerce, to conduct or
participate,directly or indirectly, in the conduct
of such enterprise’s affairs through a pattern of
racketeering activity or collection of unlawful
debt. sa

(d) It shall be unlawful for any person to
conspire to violate any of the provisions of sub-
section (a), (b), or (c) of this section.” (Emphasis
added). (COPR. (C) WEST 1990 NO CLAIM TO
ORIG. U.S. GOVT. WORKS).

Based on this statutory language, 18 U.S.C. §§ 1962
and 1964 render civilly liable “any person” who uses or
invests income derived “from a pattern of racketeering
activity” to acquire an interest in or to operate an enter-
prise engaged in interstate commerce, 18 U.S.C. § 1962(a);

+f

¢

A-24

who acquires or maintains an interest in or control of
such an enterprise “through a pattern of racketeering
activity,” 18 U.S.C. § 1962(b); who, being employed by or
associated with such an enterprise, conducts or partici-
pates in the conduct of its affairs “through a pattern of
racketeering activity,” 18 U.S.C. § 1962(c); or, finally, who
conspires to violate the first three subsections of 18
U.S.C. § 1962, 18 U.S.C. § 1962(d). RICO provides for
drastic remedies: conviction for a violation of RICO car-
ries severe criminal penalties and forfeiture of illegal
proceeds, 18 U.S.C. § 1963; and a person found in a
private civil action to have violated RICO is liable for
treble damages, costs, and attorney’s fees, 18 U.S.C.
§ 1964(c).

The essential elements a plaintiff must prove to
establish a civil RICO claim depend upon which subsec-
tion of 18 U.S.C. § 1962 the plaintiff is alleging the defen-
dant violated. However, the well-settled jurisprudence
establishes that there are certain essential elements com-
mon to all civil RICO claims. The district court in Occu-
pational-Urgent Care Health Systems, Inc. v. Sutro &
Company, Inc., 711 F. Supp. 1016 (E.D. Ca. 1989), noted
the essential elements common to all civil RICO claims,
when it held:

“The precise requirement for establishing a
civil RICO cause of action depends on which
subsection of the statute a plaintiff invokes;
however, the following are essential elements of
any civil RICO action: (I) the existence of a
RICO ‘enterprise’ (2) the existence of a ‘pattern
of racketeering activity’; (3) a nexus between
the defendant and either the pattern of rack-
eteering activity or the RICO ‘enterprise’; and

A-25

(4) resulting injury to plaintiff, in his ‘business
or property.’ See [citations omitted].” (Emphasis
added). (COPR. (C) WEST 1990 NO CLAIM TO
ORIG. U.S. GOVT. WORKS).

Id. p. 1021.

See also Klapper v. Commonwealth Realty Trust, 657
F.Supp. 948 (D. Del. 1987); and, Eaby v. Richmond, 561
F.Supp. 131 (E.D. Pa. 1983).

Thus, it is essential to the proscriptions of 18 U.S.C.
§§ 1961, et. seq., to determine what is meant by a “pat-
tern of racketeering activity”. A defendant may not be
held civilly or criminally liable under 18 U.S.C. §§ 1961,
et. seq., unless a “pattern of racketeering activity” can be
shown to exist. 18 U.S.C. § 1961(5) purports to define this
essential element of a “pattern of racketeering activity”:

§ 1961. Definitions
As used in this chapter -

(5) “pattern of racketeering activity”
requires at least two acts of racketeering activ-
ity, one of which occurred after the effective
date of this chapter and the last of which
occurred within ten years (excluding any period
of imprisonment) after the commission of a
prior act of racketeering activity; ... ”
(Emphasis added). (COPR. (C) WEST 1990 NO
CLAIM TO ORIG. U.S. GOVT. WORKS).

Clearly, 18 U.S.C. § 1961(5) does not set forth a
definition or notice of what constitutes a “pattern of
racketeering activity.” Instead, the statute only sets forth a
minimum necessary condition for the existence of such a
pattern. 18 U.S.C. §§ 1961, et. seq., does not contain any

A-26

other provision relating to the essential element of a
“pattern of racketeering activity.”

U.S.C. Const. Amend. 5 provides:“Amendment
5 - Grand jury indictment for capital crimes;
Double jeopardy; Self-incrimination; Due pro-
cess of law; Just compensation for property

No person shall be held to answer for a
capital, or otherwise infamous crime, unless on
a presentment or indictment of a Grand Jury,
except in cases arising in the land or naval
forces, or in the Militia, when in actual service
in time of War or public danger; nor shall any
person be subject for the same offence to be
twice put in jeopardy of life or limb; nor shall be
compelled in any criminal case to be a witness
against himself, nor be deprived of life, liberty,
or property, without due process of law; nor
shall private property be taken for public use,
without just compensation.” (Emphasis added).
(COPR. (C) WEST 1990 NO CLAIM TO ORIG.
U.S. GOVT. WORKS).

=

As such, U.S.C. Const. Amend. 5 guarantees to
defendant the right not to be deprived of his property
without due process of law. This guarantee of procedural
due process includes the requirement that defendant be
given appropriate notice of the proscriptions of 18 U.S.C.
§§ 1961, et. seq., before he can be held accountable for
violating those statutes. The fact that plaintiffs are pro-
ceeding under the civil provisions of 18 U.S.C. §§ 1961,
et. seq., is of no moment, as the aforementioned pro-
cedural due process guarantee applies to civil statutes as
well criminal statutes.

A-27

The Supreme Court in A. B. Small Company v. Amer-
ican Sugar Refining Company, 267 U.S. 233, 45 S.Ct. 295,
69 L.Ed. 589 (1925) affirmed a district court’s judgment,
which held certain portions of the Lever Act regulating
profits made on the sale of certain necessaries such as
sugar to be unconstitutional. In particular, the district
court found that those sections which utilized terms such

‘4

as “unjust”, “unreasonable” and “excessive” in describ-
ing prohibited transactions were unconstitutionally
vague. On Writ of Error to the Supreme Court, the defen-
dants argued that the void-for-vagueness doctrine
applied only to criminal statutes and thus could not be
used to invalidate the civil statute at issue. A. B. Small
Company, supra, rejected the defendants’ arguments,
holding:

“The defendant attempts to distinguish
those cases because they were criminal prosecu-
tions. But that is not an adequate distinction.
The ground or principle of the decisions was not
such as to be applicable only to criminal pros-
ecutions.It was not the criminal penalty that
was held invalid, but the exaction of obedience
to a rule or standard which was so vague and
indefinite as really to be no rule or standard at
all. Any other means of exaction, such as declar-
ing the transaction unlawful or stripping a par-
ticipant of his rights under it, was equally
within the principle of those cases. They have
been so construed and applied by other courts in
civil proceedings. [citations omitted]. In the first
of these citations, the Court of Appeals of New
York, referring to this court’s ruling in the
Cohen Grocery Co. Case, well said:

A-28

‘The ground on which it placed its judg-
ment applies, and with like consequences,
to civil suits as well. The prohibition was
declared a nullity because too vague to be
intelligible. No standard of duty had been
established. * * * The variant views of
judges of the District Courts were quoted as
evidence of the absence of a standard. If this
is the rationale of the decision, its conse-
quences are not limited to criminal prosecu-
tions.A prohibition so indefinite as to be
unintelligible is not a prohibition by which
conduct can be governed. It is not a rule at
all; it is merely exhortation and entreaty.’

Id. 45 S.Ct., at p. 297.

See also Giaccio v. State of Pennsylvania, 382 U.S.
399, 86 S.Ct. 518, 15 L.Ed.2d 447 (1966); Jones v. City of
Lubbock, 727 F.2d 364 (5th Cir. 1984); Exxon Corporation
v. Busbee, 644 F.2d 1030 (5th Cir. 1981); and, Leonen v.
Johns-Manvilie Corporation, 717 F.Supp. 272 (D. N.J.
1989).

The standards for evaluating vagueness were enunci-
ated by the Supreme Court in Grayned v. City of Rock-
ford, 408 U.S. 104, 92 S.Ct. 2294, 33 L.Ed.2d 222 (1972). In
that case, the Supreme Court upheld an anti-noise ordi-
nance against a challenge that it was unconstitutionally
vague. However, in discussing the principles underlying
the void-for-vagueness doctrine, Grayned, supra, held:

“The anti-noise ordinance reads, in perti-
nent part, as follows:

A-29

Appellant claims that, on its face, this ordi-
nance is both vague and overbroad, and there-
fore unconstitutional. We conclude, however,
that the ordinance suffers from neither of these
related infirmities.

A. Vagueness

It is a basic principle of due process that an
enactment is void for vagueness if its prohibi-
tions are not clearly defined.Vague laws offend
several important values. First, because we
assume that man is free to steer between lawful
and unlawful conduct, we insist that laws give
the person of ordinary intelligence a reasonable
opportunity to know what is prohibited, so that
he may act accordingly. Vague laws may trap
the innocent by not providing fair warning. Sec-
ond, if arbitrary and discriminatory enforce-
ment is to be prevented, laws must provide
explicit standards for those who apply them. A
vague law impermissibly delegates basic policy
matters to policemen, judges, and juries for res-
olution on an ad hoc and subjective basis, with
the attendant dangers of arbitrary and discrimi-
natory application. Third, but related, where a
vague statute ‘abut(s) upon sensitive areas of
basic First Amendment freedoms,’ it ‘operates to
inhibit the exercise of (those) freedoms.’ Uncer-
tain meanings inevitably lead citizens to “steer
far wider of the unlawful zone’... than if the
boundaries of the forbidden areas were clearly
marked.’ ” (Emphasis added). (COPR. (C) WEST
1990 NO CLAIM TO ORIG. U.S. GOVT.
WORKS).

Id. 92 S.Ct., at pp. 2298 and 2299.

A-30

See also Village of Hoffman Estates v. Flipside, Hoff-
man Estates, Inc., 455 U.S. 489, 102 S.Ct. 1186, 71 L.Ed.2d
362 (1982); Papachristou v. City of Jacksonville, 405 U.S.
156, 92 S.Ct. 839, 31 L.Ed.2d 110 (1972); United States v.
Professional Air Traffic Controllers Organization, 678
F.2d 1 (1st Cir. 1982); and, Postscript Enterprises, Inc. v.
Whuley, 658 F.2d 1249 (8th Cir. 1981).

Similarly, in DiLeo v. Greenfield, 541 F.2d 949 (2nd
Cir. 1976), the United States Court of Appeals for the
Second Circuit noted the constitutional requirement of
adequate, prior warning of prohibited behavior, holding:

“The notion of due process requires that
sanctions be imposed on individuals only if
they could reasonably have known in advance
that their questioned behavior had been pro-
scribed. In accordance with this principle, the
Supreme Court has held that a statute may be
void for vagueness in order to ensure that indi-
viduals are fairly apprised in advance regarding
the specific conduct which the legislature has
prohibited. See [citations omitted]. DiLeo con-
tends that the Connecticut statute which autho-
rized his dismissal for “other due and sufficient
cause” failed sufficiently to inform him of the
kind of conduct which is proscribed. We dis-
agree.

We do not agree with the district court that
vagueness in the statute could be cured by sub-
sequent explanation by the Board of which acts
it charged as falling within the scope of
§ 10-151(b)(6). Due process requires prior notice
of what constitutes forbidden behavior. See
[citation omitted].” (Emphasis added). (COPR. |

A-31

(C) WEST 1990 NO CLAIM TO ORIG. US.
GOVT. WORKS).

Id. p. 953.

The Supreme Court in Federal Communications
Commission v. American Broadcasting Company, Inc., et
al, 347 U.S. 284, 74 S.Ct. 593, 98 L.Ed. 699 (1954), had
occasion to construe certain statutes that, like the RICO
statutes, provided both civil and criminal penalties for
their violation. In that case, the Supreme Court rejected
the FCC’s contention that the statutes could be broadly
construed in the civil context, but narrowly construed in
the criminal context. Federal Communications Commis-
sion, supra, held:

“It is true, as contended by the Commis-
sion, that these are not criminal! cases, but it is
a criminal statute that we must interpret. There
cannot be one construction for the Federal Com-
munications Commission and another for the
Department of Justice. If we should give § 1304
the broad construction urged by the Commis-
sion, the same construction would likewise
apply in criminal cases. We do not believe this
construction can be sustained. Not only does it
lack support in the decided cases, judicial and
administrative, but also it would do violence to
the well-established principle that penal stat-
utes are to be construed strictly.” (Emphasis
added). (COPR. (C) WEST 1990 NO CLAIM TO
ORIG. U.S. GOVT. WORKS).

Id. 74 S.Ct., at pp. 600-601.

In his dissent in H.J., Inc., Justice Scalia cites Federal
Communications Commission, supra, for the proposition
that RICO, since it has criminal applications, must, even

A-32

in its civil applications, possess the degree of certainty
required for criminal laws. Thus, a court may not broadly
construe RICO’s provisions in the civil context, but then
narrowly construe those same provisions in the criminal
context. As a penal statute, RICO is to be strictly con-
strued whatever its meaning.

The United States Court of Appeals for the Fifth
Circuit in Exxon Corporation, supra, noted that the void-
for-vagueness doctrine is most rigorously applied in the
context of penal statutes. On this issue, Exxon Corpora-
tion, supra, held:

“While it is true that the void-for-vagueness
doctrine is most rigorously applied in the con-
text of penal statutes, [citation omitted], and in
the area of first amendment rights, [citation
omitted], the Supreme Court has recognized
that “(v)ague laws in any area suffer a constitu-
tional infirmity.” [citations omitted].”
(Emphasis added). (COPR. (C) WEST 1990 NO
CLAIM TO ORIG. U.S. GOVT. WORKS).

Id. p. 1033.

The holdings of Federal Communications Commis-
sion, supra, and Exxon Corporation, supra, are important
because the United States Court of Appeals for the Fifth
Circuit has recognized in the case sub judice that the civil
RICO statutes are penal in nature. On this point, Abell, et
al v. Potomac Insurance Company, et al, 858 F.2d 1104
(5th Cir. 1988), rehearing en banc denied 863 F.2d 882 (5th
Cir. 1988), held:

“We hold that the portion of RICO damages
in excess of actual damages is penal. Those
added damages are “not limited to the damages

iaaeeenineemeeneeeiel

A-33

suffered”; they seem more designed to deter than
fo compensate. As Congress constructed them,
the civil provisions of RICO compensate primar-
ily victims of fraud or fraudulent schemes. Had
Congress merely wanted to make whole this
new class of plaintiffs, it would have limited
civil RICO damages to the actual damages com-
monly available to fraud victims.

However, in promulgating RICO, Congress
expressly found that the problem of racketeer-
ing was primarily public, not private, including
draining resources from the economy, subvert-
ing the democratic process, and undermining
the general welfare, [citations omitted]. We con-
clude, therefore, that Congress trebled RICO
damages as as [sic] part of this overall attack
on the public wrongs of organized crime.”
(Emphasis added). (COPR. (C) WEST 1990 NO
CLAIM TO ORIG. U.S. GOVT. WORKS).

Id. p. 1141.

Under this well-settled jurisprudence, a statute can
neither forbid nor require “the doing of an act in terms s
vague that men of common intelligence must necessarily
guess at its meaning and differ as to its application
Stated another way, no statute may exact “obedience to a
rule or standard so vague and indefinite as really to be n
standard at all.” In enacting 18 U.S.C. §§ 1961, et. seq.,
The Congress was required to adhere to these require
ments of procedural due process.

18 U.S.C. § 1961(5) purports to define the essential!
element of “pattern of racketeering activity” found in 18
U.S.C. § 1962(a), (b) and (c), but this subsection does
nothing more than set forth a minimum requirement

A-34

therefor, i.e., “two acts of racketeering activity, one of
which occurred after the effective date of this chapter and
the last of which occurred within ten years (excluding
any period of imprisonment) after the commission of a
prior act of racketeering activity.” Nowhere in 18 U.S.C.
§§ 1961, et. seq., is any further definition or guidance
given with respect to the meaning of “pattern of rack-
eteering activity.”

_ This constitutional defect existing in 18 U.S.C.
§§ 1961, et. seq., was recognized by Justice Scalia, in his
concurring opinion in H.J. Inc., supra, wherein he stated:

“Four terms ago, in [citation omitted], we
gave lower courts the following four clues con-
cerning the meaning of the enigmatic term “pat-
tern of racketeering activity” in the Racketeer
Influenced and Corrupt Organizations Act
(RICO or the Act), [citation omitted]. First, we
stated that the statutory definition of the term in
18 U.S.C. § 1961(5) implies “that while two acts
are necessary, they may not be sufficient.” [cita-
tion omitted]. Second, we pointed out that “two
isolated acts of racketeering activity,” “sporadic
activity,” and “proof of two acts of racketeering
activity, without more” would not be enough to
constitute a pattern. [citation omitted]. Third,
we quoted a snippet from the legislative history
stating “[i]t is this factor of continuity plus rela-
tionship which combines to produce a pattern.”
[citation omitted]. Finally, we directed lower
courts’ attention to [citation omitted], which
defined the term “pattern of conduct which was
criminal” used in a different title of the same
Act, and instructed them that “[t]his language
may be useful in interpreting other sections of
the Act,” [citation omitted]. Thus enlightened,

A-35

the district and circuit courts set out “to
develop a meaningful concept of ‘pattern,’ ”
[citation omitted], and promptly produced the
widest and most persistent circuit split on an
issue of federal law in recent memory, see, e.g.,
[citation omitted]. Today, four years and count-
less millions in damages and attorney’s fees
later (not to mention prison sentences under the
criminal provisions of RICO), the Court does
little more than repromulgate those hints as to
what RICO means, though with the caveat that
Congress intended that they be applied using a
“flexible approach.” [citation omitted].

Thus, when 18 U.S.C. §§ 1961(5) says that a
pattern “requires at least two acts of racketeer-
ing activity” it is describing what is needful but
not sufficient. (If that were not the case, the
concept of ‘pattern’ would have been unnecess-
ary, and the statute could simply have attached
liability to ‘multiple acts of racketeering activ-
ity.") But what that something more is, is
beyond me. As I have suggested, it is also
beyond the Court. Today’s opinion has added
nothing to improve our prior guidance, which
has created a kaleidoscope of circuit positions,
except to clarify that RICO may in addition be
violated when there is a “threat of continuity.”
It seems to me this increases rather than
removes the vagueness. There is no reason to
believe that the Courts of Appeals will be any
more unified in the future, than they have in the
past, regarding the content of this law.

That situation is bad enough with respect
to any statute, but it is intolerable with respect

A-36

to RICO. For it is not only true, as Justice Mar-
shall commented in [citation omitted], that our
interpretation of RICO has “quite simply revolu-
tionize[d] private litigation” and “validate[d]
the federalization of broad areas of state com-
mon law of frauds,” [citation omitted], so that
clarity and predictability in RICO’s civil applica-
tions are particularly important; but it is also
true that RICO, since it has criminal applica-
tions as well, must, even in its civil applica-
tions, possess the degree of certainty required
for criminal laws, [citation omitted]. No consti-
tutional challenge to this law has been raised in
the present case, and so that issue is not before
us. That the highest Court in the land has been
unable to derive from this statute anything
more than today’s meager guidance bodes ill for
the day when that challenge is presented.”
(Emphasis added). (COPR. (C) WEST 1990 NO
CLAIM TO ORIG. U.S. GOVT. WORKS).

Id. 109 S.Ct. at 2906 through 2909.

Similarly, the majority in H.J., Inc., supra, virtually
conceded the constitutional infirmities existing in 18
U.S.C. §§ 1961, et. seq., when it held:

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

A-37

(Emphasis added). (COPR. (C) WEST 1990 NO
CLAIM TO ORIG. U.S. GOVT. WORKS).

Id. 109 S.Ct., at p. 2902.

Certainly, if the justices of the Supreme Court, the
circuit judges sitting on the various Courts of Appeals
and the district court judges are unable to discern the
meaning of “pattern of racketeering acitity” from 18
U.S.C. §§ 1961, et. Seq., then men of common intelligence
must necessarily guess at its meaning and differ as to its
application. As such, 18 U.S.C. §§ 1961, et. seq., violates
the procedural due process guarantee of U.S.C. Const.
Amend. 5 that appropriate notice of a proscription must
be given before a person can be held accountable for its
violation. In particular, 18 U.S.C. §§ 1961, et. seq., forbids
“the doing of [acts] in terms so vague that men of com-
mon intelligence must necessarily guess at its meaning
and differ as to its application.” Stated another way, 18
U.S.C. §§ 1961, et. Seq., exacts “obedience to a rule or
standard so vague and indefinite as really to be no stan-
dard at all.”

For these reasons, this Court should find that 18
U.S.C. §§ 1961, et. seq., violates the procedural due pro-
cess guarantees of U.S.C. Const. Amend. 5, and it should
dismiss plaintiffs’ civil RICO claims asserted against
defendant under those statutes.

(B). PLAINTIFFS FAILED TO PROVE ANY-
THING MORE THAN “ISOLATED” AND
“SPORADIC” CRIMINAL ACTS

Alternatively, defendant contends that plaintiffs
failed to prove “a pattern of racketeering activity” under

A-38

the specific facts of this case, as that essential element is
vaguely defined in H.J. Inc., supra. In particular, plain-
tiffs failed to produce any evidence of racketeering activ-
ities engaged in by defendant that amounted to or
threatened long-term criminal activity, i.e., the “continu-
ity” requirement for proving the existence of a “pattern of
racketeering activity”. Instead, plaintiffs were only able
to show that defendant engaged in isolated and sporadic
criminal acts related to the Westside bond offer. Plaintiffs
were thus unable to establish the “continuity” require-
ment for a “pattern of racketeering activity”, which
requirement was described by the Supreme Court in H.]J.,
Inc., supra, as racketeering activities that amount to or
threaten long-term criminal activity. Plaintiffs’ failure to
prove “continuity” was memorialized by the Court of
Appeals in Abell, supra, when it held:

“Fryar also contends that RICO requires
plaintiffs to prove at least two related predicate
acts arising from DISTINCT schemes. See 18
U.S.C. § 1962 (requiring a RICO plaintiff to
prove a “pattern of racketeering”). Fryar’s brief
correctly notes that “[p]laintiffs have fashioned
their RICO claim from the matrix of their secu-
rities law fraud claims.” From this observation,
Fryar concludes that the plaintiffs failed to
prove the predicate acts necessary to establish a
“pattern of racketeering.”

Our cases, however, belie Fryar’s legal anal-
ysis. In [citation omitted], we held that RICO
requires only that the predicate acts alleged be
related, not that they arise from separate
schemes or incidents. Here, plaintiffs have
alleged over half a dozen acts of mail fraud and
wire fraud, each of which stems from Westside’s

A-39

bond offer. R.A.G.S. requires no more. But see
[citations omitted]. (Each of these cases criti-
cizes R.A.G.S., but notes that only the court
sitting en banc or the Supreme Court may over-
turn R.A.G.S.).” (Emphasis added). (COPR. (C)

WEST 1990 NO CLAIM TO ORIG. U.S. GOVT
WORKS).

Id. p. 1120.

Certainly, a half dozen acts of mail fraud and wire
fraud spread over a seven (7) year period (a half dozen
racketeering acts occurring between 1976 and 1983
according to plaintiffs) all of which are related to a single,
discrete objective which is accomplished do not amount
to or threaten long-term criminal activity. Parenthetically,
as noted by the Supreme Court in H.J., Inc., supra, The
Congress did not intend that 18 U.S.C. §§ 1961, et. seq.,
: reach such isolated and sporadic criminal acts as those
) shown by plaintiffs in this case. Rather, The Congress

intended that the RICO statutes reach long-term criminal
activity:

“Insofar as the concurrence seems to sug-
gest, post, at __ that very short periods of
criminal activity that do not in any way carry a
threat of continued criminal activity constitute
“obvious racketeer[ing]” to which Congress
intended RICO, with its enhanced penalties, to
apply, we have concluded that it is mistaken,
and that when Congress said predicates must
demonstrate “continuity” before they may form
a RICO pattern, it expressed an intent that
RICO reach activities that amount to or
threaten long-term criminal activity.”
(Emphasis added). (COPR. (C) WEST 1999 NO
CLAIM TO ORIG. U.S. GOVT. WORKS).

A-40

Id. 109 S.Ct., at p. 2902 (footnote 4)

The majority in H.J., Inc., supra, began its unsuccess-
ful attempt to define the “continuity” requirement for a
“pattern of racketeering activity” by describing the con-
cept and stating what is not sufficient to show that it
exists:

“[sic]|“Continuity” is both a closed- and
open-ended concept, referring either to a closed
period of repeated conduct, or to past conduct
that by its nature projects into the future with a
threat of repetition. See [citation omitted]. It is,
in either case, centrally a temporal concept -
and particularly so in the RICO context, where
what must be continuous, RICO’s predicate acts
or offenses, and the relationship these predi-
cates must bear one to another, are distinct
requirements. A party alleging a RICO violation
may demonstrate continuity over a closed
period by proving a series of related predicates
extending over a substantial period of time.
Predicate acts extending over a few weeks or
months and threatening no future criminal con-
duct do not satisfy this requirement: Congress
was concerned in RICO with long-term criminal
conduct. Often a RICO action will be brought
before continuity can be established in this way.
In such cases, liability depends on whether the
threat of continuity is demonstrated. See [cita-
tion omitted].” (Emphasis added). (COPR. (C)
WEST 1990 NO CLAIM TO ORIG. U.S. GOVT.
WORKS).

Id. 109 S.Ct., at 2902.

The majority in H.J., Inc., supra, then proceeded to
give examples of those situations it believed would show
that “continuity” was present in a given case:

A-41

“Whether the predicates proved establish a
threat of continued racketeering activity
depends on the specific facts of each case. With-
out making any claim to cover the field of possi-
bilities - preferring to deal with this issue in the
context of concrete factual situations presented
for decision ~ we offer some examples of how
this element might be satisfied. A RICO pattern
may surely be established if the related predi-
cates themselves involve q distinct threat of
long-term racketeering activity, either implicit
or explicit. Suppose a hoodlum were to sell
“insurance” to a neighborhood’s storekeepers to
cover them against breakage of their windows,
telling his victims he would be reappearing each
month to collect the “premium” that would con-
tinue their “coverage.” Though the number of
related predicates involved may be small and
they may occur close together in time, the rack-
eteering acts themselves include a specific threat
of repetition extending indefinitely into the
future, and thus supply the requisite threat of
continuity. In other cases, the threat of continu-
ity may be established by showing that the
predicate acts or offenses are part of an ongoing
entity’s regular way of doing business. Thus, the
threat of continuity is sufficiently established
Where the predicates can be attributed to a
defendant Operating as part of a long-term
association that exists for criminal purposes.
Such associations include, but extend well
beyond, those traditionally 8rouped under the
Phrase “organized crime.” The continuity
requirement is likewise satisfied where it is
shown that the predicates are a regular way of
conducting defendant's ongoing legitimate busi-
ness (in the sense that it is not a business that

A-42

exists for criminal purposes), or of conducting
or participating in an ongoing and legitimate
RICO “enterprise.” (Emphasis added). (COPR.
(C) WEST 1990 NO CLAIM TO ORIG. U.S.
GOVT. WORKS).

Id. 109 S.Ct., at p. 2902.

A study of these examples establishes that the
Supreme Court was merely restating the same basic idea
throughout, i.e., there must be evidence of racketeering
activities that amount to or threaten long-term criminal
activity. The impossibility of extracting anything more
than this simple core concept from H.J., Inc., supra, is
amply demonstrated by one of the most recent decisions
of the United States Court of Appeals for the Fifth Circuit
on the civil RICO statutes, i.e., Howell Hydrocarbons, Inc.
v. Adams, 897 F.2d 183 (5th Cir. 1990). In that case, the
Fifth Circuit affirmed a district court’s summary judg-
ment rendered in favor of the defendants on the ground
that the plaintiff had failed to prove the existence of a
“pattern of racketeering activity”. In noting the plaintiff’s
failure, Howell, supra, held:

“The Racketeer Influenced and Corrupt
Organizations Act, [citation omitted], imposes
civil liability on those who engage in certain
“prohibited activities,” defined as requiring
proof of either “a pattern of racketeering activ-
ity” or “collection of an unlawful debt.” [cita-
tion omitted]. “Racketeering activity” means
any act indictable under various specified fed-
eral statutes, and certain federal offenses. [cita-
tion omitted]. The statute indicates only that a
“yattern” “requires at least two acts of rack-
eteering activity” within a ten year period.
[citation omitted].

A-43

A civil RICO claim under [citation omitted]
must involve a person who engages in a pattern
of racketeering activity connected to the acquisi-
tion, establishment, conduct or control of an
enterprise. [citations omitted]. The Supreme
Court has rejected both the view that predicate
acts of racketeering may form a pattern only
when they are part of separate illegal schemes,
see [citation omitted], and the equally extreme
view that a pattern is established merely by
proving two predicate acts, see, e.g., [citation
omitted]. H.J. Inc., [citation omitted]. “While
two acts are necessary, they may not be suffi-
cient.” [citation omitted].

RICO’s legislative history reveals Congress’
intent that to prove a pattern of racketeer-
ing activity a plaintiff... must show that
the racketeering predicates are related, and
that they amount to or pose a threat of
continued criminal activity.

[citation omitted]. The Supreme Court further
explained this concept of “continuity” as either
“a Closed period of repeated conduct,” or “past
conduct that by its nature projects into the
future with a threat of repetition.” [citation
omitted]. But, “predicate acts extending over a
few weeks or months and threatening no future
criminal conduct do not Satisfy this require-
ment.” [citation omitted]. The Court provided
several examples of activity showing this conti-
nuity, all indicating activities that amount to or
threaten long-term criminal activity. [citation
omitted].

A-44

There has been no indication of activities that
amount to or threaten long term criminal activ-
ity. See [citation omitted].” (Emphasis added).
(COPR. (C) WEST 1990 NO CLAIM TO ORIG.
U.S. GOVT. WORKS).

Id. p. 190 and 193.

Thus, at this point in time, this Court has nothing
more than the vague concept of “activities that amount to
or threaten long term criminal activity” to utilize in deter-
mining whether plaintiffs proved that the requirement of
“continuity” for the essential element of a “pattern of
racketeering activity” existed in this case. The United
States Court of Appeals for the Seventh Circuit in Suther-
land v. O'Malley, 882 F.2d 1196 (7th Cir. 1989), described
some of the factors it considered relevant to a determina-
tion of whether the racketeering activities alleged to exist
in a particular case have the “continuity” required to
constitute a “pattern of racketeering activity”:

“Ms. Sutherland cannot, however, establish
that these predicate acts have the continuity
required to constitute a pattern of racketeering
activity. To satisfy the continuity element, the
plaintiff must show that the alleged predicate
acts “themselves amount to, or that they other-
wise constitute a threat of, continuing rack-
eteering activity.” [citation omitted]. The
plaintiff must prove “continuity of racketeering
activity, or its threat, simpliciter.” [citation omit-
ted]. The Court has not formulated any general
test for continuity in the abstract. Instead, the
specific facts of each case must be examined to
determine whether the predicate acts relied
upon by the plaintiff establish a threat of con-
tinuing racketeering activity. [citation omitted].

A-45

Courts must examine a number of relevant fac-
tors when determining whether the predicate
acts alleged are sufficiently continuous to con-
Stitute a pattern; these factors include “ ‘the
number and variety of predicate acts and the
length of time over which they were committed,
the number of victims, the presence of separate
schemes and the occurrence of distinct injuries.’ ”
[citations omitted] (“The quest for ‘continuity
plus relationship’ necessarily involves a fact-
specific analysis.”); [citation omitted]. The
Supreme Court in [citation Omitted] also
explained, however, that “[p]redicate acts
extending over a few weeks or months and
threatening no future criminal conduct do not
Satisfy [the continuity] requirement: Congress
was concerned in RICO with long-term criminal
conduct.” [citations omitted] (“Our cases dem-
onstrate an expansive reading of civil RICO, but
only where a true ‘pattern’ of prohibited activ-
ity, not just sporadic or isolated instances of
fraud, are shown.”); [citation omitted] (continy-
ity requirement not satisfied where case
“involves the type of ‘isolated event’ that fails
to manifest the threat of continuing illegal
activity indicative of a ‘pattern’ of racketeering
activity”).

In light of these standards, we conclude that
Mr. O’Malley’s allegedly wrongful conduct does
not satisfy the pattern requirement’s continuity
element. While a RICO pattern can be estab-
lished, in some circumstances, by proof of a
single scheme, it is not irrelevant, in analyzing
the continuity requirement, that there is only
one scheme. See [citation omitted] (“proof that a

RICO defendant has been involved in multiple

A-46

criminal schemes would certainly be highly rel-
evant to the inquiry into the continuity of the
defendant's racketeering activity”).” (Emphasis
added). (COPR. (C) WEST 1990 NO CLAIM TO
ORIG. U.S. GOVT. WORKS).

Id. p. 1204.

See also Phelps v. Wichita Eagle-Beacon, 886 F.2d
1262 (10th Cir. 1989); and, Menasco v. Wasserman, 886
F.2d 6891 (4th Cir. 1989).

In the case sub judice, plaintiffs have failed to prove
anything more than related racketeering acts occurring at
the rate of less than one per year. Parenthetically, plain-
tiffs were only able to show that defendant engaged in
isolated and sporadic criminal acts related to the West-
side bond offer. Consequently, plaintiffs were unable to
establish the “continuity” requirement for a “pattern of
racketeering activity”, which requirement was described
by the Supreme Court in H.J., Inc., supra, as racketeering
activities that “amount to or threaten long-term criminal
activity.” Plaintiffs’ failure to prove “continuity” was
memorialized by the Court of Appeals in Abell, supra,
when it found that “plaintiffs have alleged over half a
dozen acts of mail fraud and wire fraud, each of which
stems from Westside’s bond offer.”

For these reasons, this Court should find that 18
U.S.C. §§ 1961, et. seq., does not reach the isolated and
sporadic criminal acts shown by plaintiffs in this case,
and it should dismiss plaintiffs’ civil RICO claims
asserted against defendant under those statutes.

A-47

(C). THE ATTORNEY’S FEES AWARDED TO
PLAINTIFFS SHOULD BE SUBSTANTIALLY
REDUCED OR ELIMINATED ALTOGETHER

Defendant contends that this Court should substan-
tially reduce or eliminate altogether its award of attor-
ney’s fees to plaintiffs. Defendant's contention is based
on the decision of the United States Court of Appeals for
the Fifth Circuit in Abell, supra, wherein it held:

“Nonetheless, we cannot simply affirm the
district court’s award, for that court awarded
attorneys’ fees against all of the defendants who
Stood trial. Thus, the court awarded attorneys’
fees for all of the legal work necessary to
develop and try plaintiffs’ case. Plaintiffs devel-
oped much of their case, however, to obtain a
verdict against WL]. Several of plaintiffs’ legal
theories and arguments applied only to WL];
indeed, at least one of their claims (for legal
malpractice) implicates only WLI]. Conse-
quently, the district court must readjust the
attorneys’ fees award to compensate plaintiffs
only for the legal resources which they expended
to develop a case against Fryar and All Ameri-
can. For this purpose, we will remand.’
(Emphasis added). (COPR. (C) WEST 1990 NO
CLAIM TO ORIG. USS. GOVT. WORKS).

Id. p. 1142.

Thus, the Court of Appeals itself envisioned a sub.
stantial reduction in the attorney’s fees this Court
awarded to plaintiffs. As noted by the Court of Appeals
plaintiffs developed much of their case to obtain a verdict
against defendant Wright, Lindsey & Jennings, and this
Court awarded Plaintiffs attorney’s fees for that legal
work. However, this Court's award of attorney’s fees

A-48

must now be reduced to reflect only the legal resources
expended by plaintiffs to develop their case against
defendant. Of course, if this Court dismisses plaintiffs’
civil RICO claims against defendant, it will be required to
virtually eliminate the award of attorney’s fees made to
plaintiffs.

For these reasons, this Court should substantially
reduce or eliminate altogether the attorney’s fees awards
made to plaintiffs.

(III). CONCLUSION

Defendant has shown that 18 U.S.C. §§ 1961, et. seq.,
is void-for-vagueness. This is so because 18 U.S.C.
§§ 1961, et. seq., forbids “the doing of [acts] in terms so
vague that men of common intelligence must necessarily
guess at its meaning and differ as to its application.”
Stated another way, 18 U.S.C. §§ 1961, et. seq., exacts
“obedience to a rule or standard so vague and indefinite
as really to be no standard to all.” Alternatively, defen-
dant has shown that plaintiffs failed to prove the “conti-
nuity” requirement necessary for the existence of a
“pattern of racketeering activity.” This is because plain-
tiffs were only able to show that defendant engaged in
isolated and sporadic criminal acts related to the West-
side bond offer. Finally, defendant has shown that this
Court’s award of attorney’s fees to plaintiffs must be
substantially reduced or eliminated altogether. Clearly,
such a course of action is mandated by the specific find-
ings of the United States Court of Appeals for the Fifth
Circuit in Abell, supra.

A-49

FOR THE FOREGOING REASONS, this Court should
dismiss the civil the civil [sic] RICO claims asserted
against defendant Joe E. Fryar by the plaintiff-class of
bondholders in Westside Rehabilitation Center.

FURTHER, this Court should substantially reduce or
eliminate altogether the attorney’s fees awarded to plain-
tiffs.

Respectfully submitted:

LAW OFFICES OF

J. MINOS SIMON
Attorneys at Law
1408 West Pinhook Road
Post Office Box 52116
Lafayette, Louisiana 70505-2116
(318) 233-4625

By: /s/ J. Minos Simon
J. MINOS SIMON
Bar Roll No. 12278

By: /s/ Miles Edward Tilly
MILES EDWARD
TILLY
Bar Roll No. 12795

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a copy of this memoran-
dum in support of defendant’s motion to dismiss civil
RICO claims and in Opposition to plaintiffs’ motion for
order upholding jury verdict, readjusting attorneys’ fee
award, and recalculating individual plaintiffs’ damage
award has this date been supplied to Opposing counsel of

A-50

record by United States Mail, postage prepaid and prop-
erly addressed.

Lafayette, Louisiana, this 7th day of May, 1990.

/s/ J. Minos Simon
J. MINOS SIMON

A-51

IN THE
UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT

DOCKET NUMBER: 90-4737

EDWARD C. ABELL, JR., and
CAREY WALTON, ET AL
Plaintiffs-Appellees and
Cross-Appellants

VERSUS

POTOMAC INSURANCE COMPANY, ET AL
Defendants

Joe E. Fryar, Wright, Lindsey and Jennings, and
Valley Forge Insurance Company
Defendants-Appellants and
Cross-Appellees

ON APPEAL FROM THE UNITED STATES DISTRICT
COURT FOR THE WESTERN DISTRICT OF LOUISIANA,
HONORABLE JOHN M. SHAW, UNITED STATES
DISTRICT JUDGE PRESIDING

PETITION OF JOE E. FRYAR,
DEFENDANT-APPELLANT, FOR REHEARING

J. MINOS SIMON, LTD.
1408 West Pinhook road
Post Office Box 52116
Lafayette, Louisiana 70505
(318) 233-4625

By: J. MINOS SIMON

ATTORNEY FOR
DEFENDANT-
APPELLANT JOE E. FRYAR

A-52

TO THE HONORABLE, THE UNITED STATES COURT
OF APPEAL, FIFTH CIRCUIT:

Petitioner, Joe E. Fryar, defendant-appellant in the
captioned cause, respectfully petitions the Court to grant
a rehearing as to the decision of the Court of November
13, 1991, in support whereof petitioner respectfully gives
the Court to understand the following:

1.

The November 13, 1991 decision works a violation of
your petitioner’s constitutional rights in that:

A. It denies to petitioner his due process rights under
the Fifth Amendment to the United States Constitu-
tion, and

B. It denies to petitioner his right to trial by jury in
violation of the Seventh Amendment to the United
States Constitution.

A. IT DENIES TO PETITIONER HIS DUE PRO-
CESS RIGHTS UNDER THE FIFTH AMEND-
MENT TO THE UNITED STATES
CONSTITUTION

On July 5, 1984 a class action was filed on behalf of
the bondholders of Westside Habilitation, Inc. setting
forth, among others, a claim against petitioner pursuant
to the provisions of 18 U.S.C., § 1961, et seq., (a RICO
civil claim).

Trial on the merits to a jury commenced on December
8, 1986 and concluded in February, 1987.

A-53

On October 30, 1985, which date subsumes all mate-
rial time periods involved in the RICO civil claims
against Joe E. Fryar, this Court decided the case of
R.A.G.S. Couture, Inc. 0. Hyatt, 774 F.2d 1350. In that
decision this Court expressly held that two (2) related
acts of mail fraud constituted a “pattern of racketeering
activity”, without more, within the meaning of the RICO
Statute. Thus as of October 30, 1985, continuously
through the trial date of the RICO civil claims filed
against petitioner, the rule of law applicable to the RICO
claims against petitioner was that a “pattern of racketeer-
ing activity” consisted of two (2) or more related predi-
cate acts, without more. The RICO civil claims against
petitioner were to be tested and actually were in fact
tested according to the rule of law established by
R.A.G.S., supra. On appeal from an adverse judgment
concerning the RICO civil claims, petitioner challenged
the correctness of the R.A.G.S. decision. But this Court
affirmed R.A.G.S. Abell v. Potomac Insurance Company, 858
F.2d 1104 (5th Cir. 1988).

On June 26, 1989 the Supreme Court decided the case
of H.J., Inc., et al v. Northwestern Bell Telephone Company, et
al, 109 S.Ct. 2893. That decision expanded the meaning of
“pattern of racketeering activity” far beyond the rule of
law established by R.A.G.S., supra. H.J. established two
(2) essential constituents of the pattern requirement of the
RICO statute: (a) relationship or relatedness of two or
more predicate acts and (b) continuity or threatening
future criminal conduct.

The November 13, 1991 decision of this Court
engaged the Court in utilizing the H.J. decision, which
expanded the “pattern of racketeering activity” rule of

A-54

law far beyond the compass of R.A.G.S., as a procrustean
bed, upon which the perceived body of evidence devel-
oped during petitioner’s trial was placed, and its limbs
were extended, rather than chopped off, to make that
body of evidence fit the procrustean bed. In short the
newly expanded meaning of “pattern of racketeering
activity” established in 1989 by H.J. was retroactively
applied to conduct attributed to petitioner originating in
1976, some nine (9) years prior to the 1985 R.A.G.S. deci-
sion, thus creating a judicial ex post facto rule of law.

At all times material to the RICO civil claims against
petitioner, your petitioner had no warning of the H.].
conduct which imposed civil and criminal liability upon
him; he had no warning of what conduct to avoid or to
defend against. He was not informed, for example, that
“predicate acts extending over a few weeks or months
and threatening no future criminal conduct do not satisfy
this requirement” (109 S.Ct. at p. 2902). Thus he was not
given the opportunity or informed of the right to so tailor
his conduct as to fall within the shelter of this defined
“pattern of racketeering activity”. Nor was petitioner
informed that “though the number of related predicates
involved may be small and they may occu: close together
in time, the racketeering acts themselves include a specific
threat of repetition extending indefinitely into the future,
and thus supply the requisite threat of continuity” (109
S.Ct. at p. 2902). Had he been informed of the multi-
factors involved in the H.J. definition of “pattern of rack-
eteering activity”, then during his trial he would have
had the opportunity to present evidence to rebut any
incriminatory evidence and particularly the conclusion
that “the racketeering acts themselves include a specific

A-55

threat of repetition extending indefinitely into the
future”. Moreover, generally speaking, had petitioner
been placed on notice of the conduct proscribed by H./.,
he could have avoided the Prohibited conduct, and dur-
ing trial, he could have presented evidence in defense of
the claims asserted against him and thus could have had
the Opportunity to exonerate himself completely from
liability.

Petitioner’s right to “fair warning” of the nature and
character of the conduct Proscribed “is fundamental to
Our concept of constitutional liberty. (citations omitted)
As such, that right is protected against judicial action by
the Due Process Clause of the Fifth Amendment”. Marks
v. United States, 97 S.Ct. 9909 (1977). See also Bouie v. City of
Columbia, 378 U.S. 347, 84 S.Ct. 1697 (1964). Thus the
November 13, 1991 decision of this Court complained of
herein operates to deny to petitioner his due process
rights in violation of the Fifth Amendment.

B. IT DENIES TO PETITIONER HIS RIGHT TO
TRIAL BY JURY IN VIOLATION OF THE SEV-
ENTH AMENDMENT TO THE UNITED STATES
CONSTITUTION

Pertinent to this assignment of error is the following
excerpt of this Court from its November 13, 1991 deci-
sion:

“Along with these relatedness and continuity
requirements, the Court introduced tests to
establish their presence. See Kehr Packages, Inc.,
v. Fidelcor, Inc., 926 F.2d 1406, 1412-13 (3rd Cir.
1991). For relatedness, the Court adopted a
broad multi-factor test that turns on whether the

A-56

alleged predicate acts ‘are interrelated by distin-
guishing characteristics and are not isolated
events.’ H.J. 492 U.S. at 240, 109 S.Ct. at 2901
(quotation omitted). As for continuity, the Court
noted that proof of multiple schemes is “highly
relevant’ to the question of continuity but not a
prerequisite!?, and defined continuity as ‘refer-
ring either to a closed period of repeated con-
duct, or to past conduct that by its nature
projects into the future with a threat of repeti-
tion.’ Id. at 241, 109 S.Ct. at 2902. As was recog-
nized by the Court, these tests are highly fact-
and case- specific. See id. at 237, 242, 109 S.Ct. at
2899, 2902; Kehr Packages, 926 F.2d at 1412-13.”

(page 748 of the opinion)

Paraphrasing this Court’s foregoing statement, if
indeed “these tests are highly fact- and case-specific”,
then, in petitioner’s case, they are to be decided by the
jury impaneled to try the case against your petitioner.
The fact question of whether the predicate acts attributa-
ble to petitioner “are interrelated by distinguishing char-
acteristics and are not isolated events” was never
presented to the jury involved in the trial of petitioner’s
case. Thus none of the multiple factors involved in the
issues of relatedness of the predicate acts and the conti-
nuity requirements of the RICO statute was ever pre-
sented to the jury called upon to try petitioner’s case.
Petitioner’s case indeed was a suit at common law, and
the value in controversy exceeded Twenty and No/100
($20.00) Dollars. As to such a suit the Seventh Amend-
ment provides:

12 See id. 492 U.S. at 240, 109 S.Ct. at 2901.

A-57

“In suits at common law, where the value in
controversy shall exceed $20.00, the right of trial
by jury shall be preserved, and no fact tried bya
jury, shall be otherwise re-examined in any
court of the United States, than according to the
rules of the common law.”

Overriding and essential fact questions involved in
the RICO claims against your petitioner and relied upon
by this Court for its November 13, 1991 decision were
never presented to the jury impaneled to try petitioner’s
case. The jury in petitioner’s case was never called upon
to render a verdict as to the relatedness of the alleged
Predicate acts and as to the continuity factual characteris-
tics of these alleged Predicate acts. The November 13,
1991 decision complained of herein instances the act of
this Court usurping the prerogative of the jury in deter-
mining these facts. In so doing this Honorable Court has
denied to your Petitioner trial by jury in violation of the
Seventh Amendment to the United States Constitution.

Thus, the November 13, 1991 decision works a viola-
tion of your petitioner’s constitutional rights in that (a) it
denies to petitioner his due Process rights under the Fifth
Amendment to the United States Constitution, and (b) it
denies to petitioner his right to trial by jury in violation
of the Seventh Amendment to the United States Constitu-
tion.

WHEREFORE petitioner respectfully prays that his
petition for rehearing be granted and on rehearing that
the November 13, 1991 decision be recalled and the deci-
sion of the district court be reversed as Originally prayed

A-58

for by petitioner in his appeal from the district court
decision.

J. MINOS SIMON, LTD.

1408 West Pinhook Road

Post Office Box 52116
Lafayette, Louisiana 70505-2116
(318) 233-4625

By: /s/ J. Minos Simon
J. MINOS SIMON
Bar Roll No. 12278

CERTIFICATE

I HEREBY CERTIFY that a copy of the foregoing
rehearing application has been forwarded to all counsel
of record by United States Mail, postage prepaid and
properly addressed.

Lafayette, Louisiana, this 22nd day of November,
1991.

/s/ J.Minos Simon
J. MINOS SIMON

A-59

IN THE
UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT

EDWARD C. ABELL, JR., and
CAREY WALTON, ET AL

VERSUS DOCKET NUMBER: 87-4260
POTOMAC INSURANCE COMPANY, ET AL

a TT Tee ielnleteeeeELLLT T e t eee

MOTION TO RECALL ORDER

COMES NOW, through undersigned counsel, defen-
dant-appellant Joe E. Fryar (movant), who respectfully
moves this Honorable Court to recall its order of Septem-
ber 12, 1989, remanding this cause to the district court, in
Support whereof movant gives this Court to understand
the following:

OPERATIVE SALIENT FACTS

1. On February 19, 1987, the district court, in accor-
dance with a jury’s verdict, entered judgment in the
amount of Twelve Million Ninety-Six Thousand Eight
Hundred Sixty-Six and 80/100 ($12,096,866.80) Dollars in
favor of plaintiffs-appellees Edward C. Abell, [r., and
Carey Walton, et al, (respondents) and against movant
and others in that certain civi| action entitled “Edward C.
Abell, Jr., et al v. Potomac Insurance Company of IIli-
nois, et al”, Docket Number 84-1786 “O”, United States
District Court for the Western District of Louisiana,
Lafayette-Opelousas Division.

A-60

2. The district court’s judgment in favor of respon-
dents and against movani was affirmed in part, reversed
in part, and remanded by this Court in Abell, et al ov.
Potomac Insurance Company, et al, 858 F.2d 1104 (5th
Cir. 1988), rehearing en banc denied 863 F.2d 882 (5th Cir.
1988), to the district court for a redetermination of the
attorneys’ fees and damages awards made against
movant.

3. Subsequently, in Fryar v. Abell, et al,___ U.S. __,
109 S.Ct. 3236, 106 L.Ed.2d 584 (1989), a petition for writ
of certiorari filed by movant was granted by the Supreme
Court, summarily vacating that portion of this Court’s
judgment which had affirmed the district court’s judg-
ment holding movant liable to respondents on the civil
RICO claims asserted against him. The Supreme Court's
order vacating this Court’s judgment specifically pro-
vided that “the case is remanded to the United States
Court of Appeals for the Fifth Circuit for further con-
sideration in light of H.J. Inc. v. Northwestern Bell Tele-
phone Company, 492 U.S. ___, 109 S.Ct. 2893, 106 L.Ed.2d
195 (1989).”

4. On July 3, 1989, in Edward C. Abell, Jr., et al v.
Wright, Lindsey & Jennings, et al, ___ U.S. __, 109 S.Ct.
3242, __ L.Ed.2d ___ (1989), the Supreme Court denied
respondents’ petition for writ of certiorari, imparting
finality to this Court’s judgment that had reversed the
district court’s nearly Ten Million and No/100
($10,000,000.00) Dollars judgment against movant on
respondents’ securities law claims.

5. In Abell, et al v. Potomac Insurance Company, et
al, 884 F.2d 196 (5th Cir. 1989), this Court entered an

A-61

order, remanding respondents’ case against movant to the
district court for further consideration in light of H.J. Inc.,
supra. Additionally, this Court directed the district court
to consider the appropriate disposition of this matter in
light of movant’s pending bankruptcy proceeding, i.e
“In Re Joe E. Fryar, Debtor”, Docket Number 89-
BK-80,595, United States Bankruptcy Court for the West-
ern District of Louisiana, Alexandria Division.

6. On January 3, 1990, an order was entered by Hon.
Henley A. Hunter in the aforementioned bankruptcy pro-
ceeding, lifting the automatic bankruptcy stay for the
purpose of completing the litigation between movant and
respondents. Thus, there is no longer any basis for an
concerns this Court might have had regarding the auto-
matic stay imposed by law upon the filing of movant’s
bankruptcy petition and the effect thereof on its ability t
Proceed to a determination of this matter.

7. In light of the foregoing, and for the additional!
reasons hereinafter recited, the remand of this case to the
district court is without substantive legal basis and prac-
tical support. Additionally, this remand, if continued, wil!
work to impose undue burden on the district court,
which is already overextended by virtue of an existing
vacant judgeship, and unnecessary and oppressive
expense on the parties.

8. The Supreme Court’s directive Clearly contem
plated that the legality of respondents’ civil RICO claims
against movant should be decided by this Court based on
the record on appeal. The resolution of that legal question
by this Court will impart finality thereto, except as the

A-62

Supreme Court may decide to review such a decision on
application for a writ of certiorari.

9. To have the district court, instead of this Court,
decide the legality of respondents’ civil RICO claims
against movant but invites a circvity of judicial proceed-
ings in that such a decision would be appealable to this
Court. On appeal, this Court would be called upon to
decide the very legal question which the Supreme Court
has already directed it to determine. Consequently, this
circuitous judicial misadventure would exact a heavy toll
on the interests of judicial economy and efficiency and an
oppressive financial burden on the parties.

10. For all these reasons, this Court’s recall of its
order of September 12, 1989, is in the interests of judicial
efficiency and economy, as well as the parties’ interests in
attaining an expeditious and economical resolution of
this controversy. This recall will allow this Court to
reconsider this matter based on the record on appeal,
resulting in substantial savings of judicial time to the
district court and of litigation expenses to the parties.

WHEREFORE, MOVANT RESPECTFULLY PRAYS
that this Court recall, vacate and set aside its order of
September 12, 1989, remanding this case to the district
court.

Respectfully submitted:

LAW OFFICES OF J. MINOS SIMON
Attorneys at Law

1408 West Pinhock Road

Post Office Box 52116

Lafayette, Louisiana 70505-2116

(318) 233-4625

A-63

By: /s/ J. Minos Simon
J. MINOS SIMON
Bar Roll No. 12278

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a
recall order has this date been
counsel of record by United States
and properly addressed.

copy of this motion to
Supplied to Opposing
Mail, postage prepaid

Lafayette, Louisiana, this 22nd day of March, 1990.

/s/ J. Minos Simon
J. MINOS SIMON

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386011_0339%3A3. Public record. Not legal advice.