Commercial Litigation and Arbitration

RICO — Dismissal for Failure to Plead Enterprise with Specificity

Before Twombly, courts vacillated as to whether non-fraud elements of a civil RICO claim must be pled with specificity. Since Twombly (and now, Iqbal), vacillation has largely disappeared. From Brunig v. Clark, 2009 U.S. App. LEXIS 3513 (5th Cir. Feb. 17, 2009):

In order to state a claim under RICO, a plaintiff must allege, among other elements, the existence of an enterprise. Brunig's complaint does not make plausible that either a legal enterprise or an association-in-fact existed. His complaint alleges that "Clark, the Trust, CPLI, Liedtke, BBC, and others, known and unknown, associated themselves in fact." This is a conclusory statement, a recitation of the elements masquerading as facts. It does not make it any more or less probable that the listed parties have an existence separate and apart from the pattern of racketeering, are an ongoing organization, and function as a continuing unit as shown by a hierarchical or consensual decision making structure. We affirm the dismissal of Brunig's RICO claims.

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