Commercial Litigation and Arbitration

Law Firm Is Not Sufficiently Distinct from 3 of Its Partners to Constitute RICO Enterprise — Firm’s Activities Limited to Conducting Customary Legal Business

From Thomas v. Thompson, 2011 U.S. Dist. LEXIS 5600 (N.D. Miss. Jan. 20, 2011):

The enterprise must be "an entity separate and apart from the pattern of activity in which it engages." *** "Moreover, plaintiffs must plead specific facts, not mere conclusory allegations, which establish the enterprise." ***

Plaintiff described the enterprise as "a limited liability partnership composed of partner and associate attorneys whose purpose, functioning and course of conduct is to prosecute the claims of their plaintiff clients against various defendants." The record here contains no evidence that the law firm engaged in any activities separate and apart from its normal functions. Plaintiff alleges that the law firm "cloaked" the racketeering activity in the day-to-day functions of a law firm in "prosecuting its clients' case, negotiating settlement, and disbursing proceeds from those settlements." However, Plaintiff attempts to delineate the actions of the law firm under the facts in this case by noting that "Defendants devised a scheme to defraud certain of their clients in order to recover unreimbursed expenses for the enterprise that resulted from other failed litigation." The actions involving the law firm were performed in the course of their regular business. See Atkinson, 808 F.3d at 441 (noting that plaintiffs' mail fraud RICO violation which included mailing of loan statements, was an activity of the bank and thus, not separate and apart from normal functions to constitute an enterprise). Plaintiff wholly failed to establish the existence of any entity separate and apart from the law firm. Thus, there is no enterprise, and Plaintiff cannot sustain the RICO claims against Defendants.

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