RICO — Continuity — The Longer the Duration, The Less Significant Other Factors Become
From Fresh Meadow Food Services, LLC v. RB 175 Corp., 2008 U.S. App. LEXIS 13392 (2d Cir. June 24, 2008):
As we have repeatedly observed, we have "never found a closed-ended pattern where the predicate acts spanned fewer than two years." First Capital Asset Mgmt., Inc. v. Satinwood, Inc., 385 F.3d 159, 181 (2d Cir. 2004); see also Cofacredit v. Windsor Plumbing Supply Co., 187 F.3d 229, 242 (2d Cir. 1999); GICC Capital Corp. v. Tech. Fin. Group, Inc., 67 F.3d 463, 467 (2d Cir. 1995). We have further held that just because "multiple schemes are not required in all circumstances does not mean that the number and nature of the schemes alleged by a plaintiff in a given case are entirely irrelevant. Rather, a plaintiff must provide some basis for a court to conclude that defendants' activities were 'neither isolated nor sporadic.'" GICC, 67 F.3d at 467. In GICC we identified some "non-dispositive factors" courts have considered in determining whether closed-ended continuity exists, " including, inter alia, the length of time over which the alleged predicate acts took place, the number and variety of acts, the number of participants, the number of victims, and the presence of separate schemes." ***
Although GICC identified several "non-dispositive factors" that courts must consider in assessing whether closed-ended continuity has been established, 67 F.3d at 467, those factors are more significant in cases where the period of time over which the alleged racketeering acts borders on "substantial." Where the racketeering acts span nearly three and one-half years, as they do here, the presence or absence of the other factors is less critical. ***
Lastly on the subject of closed-ended continuity, this case does not resemble Schlaifer Nance & Co. v. Estate of Andy Warhol, 119 F.3d 91 (2d Cir. 1997). In that case the alleged fraud spanned three years, yet we held that closed-ended continuity was not established. Id. at 97-98. But plaintiffs in that case had "artificially fragment[ed] a singular act [i.e., the negotiation of a licensing agreement] into multiple acts simply to invoke RICO." Id. at 98. The alleged pattern here does not suffer from such a defect.
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