Pleading — Incorporation by Reference and Rules 8(a)(2) & 10(c)

It is not often that a civil RICO complaint brought by the federal government against a union with a checkered history is dismissed on pleading grounds, but that is what happened in Brooklyn Federal Court on November 1, 2007. The Government’s Amended Complaint in United States v. Int’l Longshoremen’s Ass’n, 2007 U.S. Dist. LEXIS 80924 (E.D.N.Y. Nov. 1, 2007), was 85 pages long with 13 exhibits totaling over 400 pages, including lengthy pleadings that the Government had filed in previous civil and criminal RICO actions dating back to 1990. At oral argument on the defendants’ motion to dismiss, in response to the Court's observation that the Amended Complaint apparently failed to plead many fundamental elements of the alleged predicate acts, counsel for the Government explained that the specific allegations regarding those acts were incorporated into the Amended Complaint by reference to the attached indictments and complaints. District Judge I. Leo Glasser found this approach both ‛incoherent“ and in violation of Federal Rules of Civil Procedure 8(a)(2) and 10(c) because, inter alia:

1. Failure to Incorporate Attached Documents. ‛[N]otwithstanding the Government's repeated assertions to the contrary at oral argument, the Court notes that nowhere in the Amended Complaint does the Government expressly incorporate by reference any portions of the attached exhibits. ‘Although there is no prescribed procedure for referring to incorporated matter, the references to prior allegations must be direct and explicit, in order to enable the responding party to ascertain the nature and extent of the incorporation’“ (citations omitted).

2. Lack of Notice for Failure to Specify Which Portions of Attachments Incorporated. ‛The Amended Complaint ... gives the impression that the exhibits are attached simply as background to the factual allegations alleged in the Amended Complaint; it does not provide the ‘direct and explicit’ notice necessary to incorporate extraneous matter by reference. The Government's failure to specifically identify which portions of the hundreds of pages of exhibits it intends to incorporate by reference into the Amended Complaint makes it impossible for the Court or the defendants to ascertain the nature and extent of the incorporation, and the purported incorporation is therefore invalid.“

3. Incoherence by Incorporation. The pleading that the Government attached to its Amended Complaint included several RICO pleadings that asserted different RICO ‛enterprises“ and ‛patterns.“ Consequently, ‛While ... the Government may intend to incorporate the exhibits in their entirety, doing so would render the Amended Complaint utterly incoherent.... [I]f all of the allegations in the prior pleadings are deemed to be incorporated into the Amended Complaint, then the Amended Complaint would become an unintelligible morass of self-contradictory allegations. Thus, the Court must conclude that the Government did not really intend to incorporate every statement in every one of the indictments and complaints attached to the allegations — though even if it did, that would in itself be grounds for dismissing the Amended Complaint pursuant to Rules 12(b)(6) and 8(a)(2).“

4. The Other Side of Rule 8(a)(2). No one can possibly know what Rule 8(a)(2) means any more. Before Bell Atlantic, courts would occasionally find complaints too long and detailed to satisfy the ‛short and plain statement of the case“ requirement of Rule 8(a)(2). (See, e.g., our post of May 26, 2007.) Bell Atlantic then proceeded to read Rule 8(a)(2) as requiring fact pleading. Judge Glasser reverted to the old view in holding that ‛the Government's proposed method of pleading necessary elements of its RICO claim by incorporating factual allegations contained in several prior lengthy criminal and civil RICO pleadings is ... a blatant violation of Rule 8(a)(2)'s direction that a civil plaintiff provide a ‘short and plain statement of the claim showing that the pleader is entitled to relief.’“

5. Violating Rule 8(a)(2) by Incorporating Essential Allegations from Incorporated Pleadings. ‛If the Government's position were accepted, the defendants would be forced to respond in their Answer not only to each of the 258 paragraphs of the Amended Complaint, but also to each and every paragraph of every attached pleading, some of which, as noted above, are inconsistent with the allegations made in the Amended Complaint itself. While the precise Rule 8 issue posed by the Government's unusual pleading in this action has rarely been presented to federal courts, other courts in similar circumstances have found Rule 8 to be violated where a plaintiff seeks to incorporate factual allegations essential to its claim for relief by incorporating pleadings from prior cases.

6. Rule 10(c) and ‛Prior Pleadings.“ provides that: "Statements in a pleading may be adopted by reference in a different part of the same pleading or in another pleading or in any motion.“ Judge Glasser noted, but did not hold, that: ‛Some authority suggests that the reference to "prior pleadings" in Rule 10(c) is limited to prior pleadings in the same action, not pleadings in prior actions, even those involving the same parties.“

7. Rule 10(c) and ‛Written Instruments.“ Rule 10(c) provides that: ‛A copy of any written instrument which is an exhibit to a pleading is a part thereof for all purposes." Not every document is a ‛written instrument,“ however. ‛A ‘written instrument' is a document evidencing legal rights or duties or giving formal expression to a legal act or agreement, such as a deed, will, bond, lease, insurance policy or security agreement.’“ That does not include prior pleadings.

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