Commercial Litigation and Arbitration

RICO — Open-Ended Continuity — Predicate Acts, Not Other Conduct, Must Form the Enterprise’s Regular Way of Doing Business

From Carson v. Vernon Township, 2010 U.S. Dist. LEXIS 73620 (D.N.J. July 21, 2010):

Plaintiff, Richard Carson, a member of the Township Council ("Council") of Defendant, Vernon Township ("Township"), filed a Complaint and subsequently an Amended Complaint against the Defendants, who include the Township, its Police Department, a police officer, the Vernon Township Republican Committee ("VRC"), a number of individuals who were members of the VRC and, in some cases, also members of the Council, including its Mayor. The Amended Complaint charges that Defendants engaged in a conspiracy and through the use of a coordinated pattern of threats, extortion, coercion, harassment and intimidation of Plaintiff sought to force Plaintiff to vote and take positions on public issues as Defendants demanded and ultimately to force him to resign his position as a member of the Council. ***

Defendants take great umbrage at the charges contained in the Amended Complaint. ***

In essence these Defendants contend that Plaintiff wrote a note to a fellow council member to the effect that he wished he could punch members of the public in the mouth; the note was obtained and published by a reporter, Jesse Palladini; and the emails that Plaintiff quoted were designed to warn Plaintiff of dangers that the note had created for Plaintiff and to help protect him politically.

Quite obviously these factual allegations have no place in response to a motion to dismiss, where only well pleaded averments of the complaint can be considered. ***

RICO plaintiffs may *** satisfy the threat of continued criminal activity element by a showing of "open ended continuity." To establish this type of continuity, it need not be shown that predicate acts were engaged in over an extended period of time. Instead, plaintiff must show that there was a threat of continuing criminal activity "extending indefinitely into the future." H.J., 492 U.S. at 242. One way of establishing open ended continuity is to prove that the predicate acts "are part of an ongoing entity's regular way of doing business." Id. Note that it must be the predicate acts, not some other type of misbehavior, that form part of the entity's regular way of doing business. Gregory P. [Joseph], Civil RICO A Definitive Guide 148 (3rd ed. 2010).

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