New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.

Commercial Litigation and Arbitration

New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.
Commercial Litigation and Arbitration
« Back to Complex Lit Blog

RICO Pleading and Particularity Requirements

Download PDF

Cory v. Straub Int’l, 2012 Kan. App. Unpub. LEXIS 10 (Kan. Ct. App. Jan. 6, 2012):

Bill J. Cory, acting pro se, sued the defendants, Straub International, Ron Straub, and Scott DeWerff after he purchased from them a used piece of farm equipment known as a swather. He alleged the machine did not operate properly and the defendants had violated the Kansas Consumer Protection Act (KCPA) and the Racketeer Influenced and Corrupt Organizations Act (RICO). The district court granted the defendants' summary judgment motion, finding the KCPA did not apply because the purchaser of the machine was actually a corporation and Cory had failed to properly plead the RICO cause of action. The court also granted the defendants sanctions in the form of their attorney fees. Cory appeals, again pro se.***

As to Cory's claim of RICO violations, *** in setting forth his RICO claims in his petition, Cory made several conclusory allegations without particularity.

One of the elements of a civil RICO claim is that the plaintiff suffered an injury "by reason of defendant's violation of section 62." Joseph, Civil RICO, A Definitive Guide, pp. 27-28, 35 (American Bar Association 2d ed. 2000). Here, Cory alleged that Dewerff and Straub conducted their business through a pattern of racketeering activity in violation of 18 U.S.C. 1962(c) (2006) and conspired to do so which, under 18 U.S.C. 1962(d) (2006), amounted to another violation.

18 U.S.C. 1962(c) states:

"It shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt."

Section (d) of the statute then makes it unlawful to conspire to violate section (c).

"Racketeering activity" consists of no more and no less than the commission of a predicate act.' Sedima, S.P.R.L. v. Imrex Co., Inc., 473 U.S. 479, 495 (1985)." Joseph Civil RICO, p. 79. 18 U.S.C. 1961(1) (2006) defines such activity by setting "forth an exhaustive list of predicate offenses," which include both state and federal law offenses. See Joseph Civil RICO, pp. 79-81.

From what we can gather from our review of Cory's somewhat rambling and disjointed petition, it alleged in very conclusory fashion that the defendants committed several acts that violated either 18 U.S.C. § 1341 (2006) (relating to mail fraud), or section 18 U.S.C. §1343 (2006) (relating to wire fraud). The details are lacking, however.

In order to state a violation of the wire or mail fraud statute, "it is necessary to show (1) a scheme to defraud, (2) participation by the defendant[s] in the scheme, (3) specific intent to defraud, and (4) the use of the United States wires or mails in furtherance of the scheme." Joseph Civil RICO, pp. 82-84. In one of Cory's allegations, he states merely that the defendants processed the check used to purchase the swather through the Federal Reserve System. He also lists what appear to be the dates of several phone calls without setting forth their content and how they were fraudulent. Additionally, since the crimes of both wire and mail fraud sound in fraud, Cory's pleading must satisfy the particularity requirements of K.S.A. 60-209(b). Cory's petition falls woefully short in this regard.

As to his claims that the defendants violated section (d) of 18 U.S.C. 1962 (conspira-cy), Cory again sets forth allegations that the defendants conspired to commit RICO violations without particularity as to their unlawful and fraudulent nature. Under Section 1962(d), the plaintiff's complaint must allege, "at a mini-mum (1)[] the parties' specific agreement to commit at least two predicate acts and (2) contain supportive factual allegations. Mere conclusions are not enough." Joseph Civil RICO, p. 162. In conclusion, Cory failed to satisfy the RICO pleading requirements. The Tenth Circuit Court of Appeals has recognized that the district court is not required to "match the factual assertions with the elements of all subsections of the RICO statute to determine if the complaint states a claim for relief." Glenn v. First Nat'l Bank in Grand Junction, 868 F.2d 368, 371 (10th Cir. 1989). The court then stated: "After reviewing the record . . . , we conclude the trial court did not err in refusing to attempt to create order out of chaos. The complaint failed to state a claim under any conceivable matching of allegations." Glenn, 868 F.2d at 372. The same can be said for Cory's petition here.

Share this article:

Facebook
Twitter
LinkedIn
Email

Recent Posts

Court’s Inherent Power to Police the Conduct of Litigants and Attorneys Extends to Persons Engaged in the Unauthorized Practice of Law Before Them

(1) Inherent Power Sanctions — Duty to Correct or Withdraw — Strategic Silence As Bad Faith — Failure to Advise Court of Absence of Diversity Jurisdiction for 15 Months for Strategic Reasons, Only “Pull[ing] Out The Diversity-Destroying Card” After Losing = “A Textbook Example of Bad Faith” — (2) Under Goodyear, The Court’s Fundamental Job Is to Decide Whether Fees Would Have Been Incurred Absent the Sanctioned Conduct — (3) Appellate Review: While Sanctions Orders Are Reviewed for Abuse of Discretion, A Finding of Bad Faith Is Reviewed for Clear Error — (4) When There Are Two Permissible Views of The Evidence, The Factfinder’s Choice Between Them Cannot Be Clearly Erroneous — (5) “A District Court Is Not Required To Consider Irrelevant Evidence” — (Good Quotes)

Criminal Spoliation Can Be A Due Process Violation — Defendant Must Show That (1) The Evidence Had Exculpatory Value Before It Was Destroyed, (2) Defendant Is Unable to Obtain Comparable Evidence by Reasonable Means, and (3) Bad Faith Failure to Preserve

1) Rule 11 Sanctions: “No First Amendment Exception to a Rule 11 Violation” — “[T]he First Amendment Covers Novel, Nonfrivolous Arguments, But Many Frivolous Arguments Are Also Novel” (Good Quotes) — Frivolous To Continue To Make Rejected Novel Arguments; (2) FRAP 38 Sanctions: District Court In Best Position to Set Sanctions, Attorney’s Fees and Costs

3 Prerequisites for Inherent Power and § 1927 Sanctions in Second Circuit: (1) Bad Faith, (2) Conduct That Is Entirely Without Color [Thus, An Ill-Motivated Colorable Position Appears to Be Protected in the Second Circuit], and (3) Improper Purpose— “To Gain A Strategic Advantage” Is An Improper Purpose — Due Process Satisfied by Opponent’s Motion and Multiple Court Conferences, After Which Target Was Allowed to Submit Additional Letters

Inherent Power Sanctions — Untimeliness as Laches — Laches Properly Applied to Deny Sanctions Motion — Note Waived Defenses to Laches

Rule 37(c)(1) Sanctions: Substantial Justification or Harmless Error (Ninth Circuit Factors) — Erie: When State Supreme Court Has Not Squarely Addressed an Issue, Circuit Must Predict How It Would Rule, Using Intermediate Appellate Decisions, Decisions from Other Jurisdictions, Statutes, Treatises And Restatements for Guidance

(1) Appellate Review of Inherent Power Sanctions (7th Circuit): Factual Findings Reviewed for Clear Error, Choice of Sanction for Abuse of Discretion — 4-Element Test for Reversal; (2) Sanctions and Class Actions: Monetary Sanctions Properly Imposed on Defendants for Improper Communications with Class Members (Represented Parties) — “[I]f The Class And The Class Opponent Are Involved In An Ongoing Business Relationship, Communications From The Class Opponent To The Class May Be Coercive” (Good Quote); (3) Monetary Sanctions under Goodyear v. Haeger: If Same Fact-Gathering Would Have Been Conducted Absent The Misconduct, No But-For Causation — But Only “Rough Justice” Required, “Not Accountant-Like Precision” (Good Quote) — Once Misconduct Is Clear, Time Spent Ferreting It Out Compensable under Goodyear; (4) Goodyear Did Not Overrule Long-Standing Rule That Courts May Impose Modest Civil Monetary Sanctions to Curb Litigation Abuse; (5) Appellate Jurisdiction Lacking Where Sanctioned Attorney Fails to File Notice of Appeal and Lawyer’s Intent to Appeal Not Apparent from Client’s Notice; (5) Rule 11 Improper Purpose — Party May Have Many Purposes for Pursuing Claim — As Long As Claim Is Supported by Good Faith Belief in the Merits, “A Parallel Reason Does Not Violate Rule 11” — To Deny A Motion for Sanctions, The District Court Need Not Address Every Argument: “Arguments Clearly Without Merit Can, And For The Sake Of Judicial Economy Should, Be Passed Over In Silence” (Good Quote); Non-Monetary Sanction on Counsel: Complete Twice The Required Amount Of Professional Responsibility Hours For Her Next Continuing Legal Education Cycle Imposed By The State Bar

(1) Spoliation: Sanctions Are Warranted Only If the Movant Establishes That A Reasonable Trier of Fact Could Find That The Destroyed Evidence Would Support A Claim Or Defense — § 1927 Sanctions: “Courts Often Refuse to Award Sanctions When Both Parties Contributed to the Waste of Judicial Resources” (Good Quote)

No Sanctions Imposed on Counsel Who Submitted A.I.-Generated Phony Cases Without Checking Them in Good Faith on The Mistaken Assumption They Had Been Provided by Highly Respected Co-Counsel Rather Than His Criminally-Convicted, Disbarred Client — No Sanctions on Client Who Had No Access to LEXIS or Westlaw to Check the Phony Cases and Submitted Them in Good Faith: “It Would Have Been Downright Irrational For Him To Provide Fake Cases For [His Lawyer] To Include In The Motion Knowing They Were Fake —

Archives
New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.
New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.

New York Office

© 2024 Joseph Hage Aaronson LLC  
Disclaimer | Attorney Advertising Notice | Legal Notice