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February 20, 1986


The opinion of the court was delivered by: HUYETT


 Defendants have filed a motion to dismiss plaintiffs' RICO action. *fn1" For the reasons outlined below, I will deny this motion.

 In deciding a motion to dismiss, I must accept as true all factual allegations made in the complaint and must resolve all reasonable inferences to be drawn from those allegations in the light most favorable to plaintiff. Dismissal is appropriate only when it appears beyond a doubt that plaintiff can prove no set of facts in support of his claim which would entitle him to relief. Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1975).

 Defendants first contend that plaintiffs have failed to plead a pattern of racketeering activity. A "pattern of racketeering activity" is defined in the RICO statute as follows:

"Pattern of racketeering activity" requires at least two acts of racketeering activity, one of which occurred after the effective date of this chapter and the last of which occurred within ten years (excluding any period of imprisonment) after the commission of a prior act of racketeering activity.

 18 U.S.C. § 1961(5). There have been few cases which have addressed the definition of a pattern of racketeering activity. Plaintiffs have alleged that defendants committed several acts of mail fraud and wire fraud as those terms are defined in 18 U.S.C. §§ 1341 and 1343 by using the mails and telephones to make their promises and misrepresentations to plaintiffs. Defendant contends that each of these acts was part of a single transaction and therefore cannot constitute a pattern of activity for purposes of RICO.

 I find that defendants' argument fails for two reasons. First, I believe that defendants have confused the burden plaintiffs carry to state a claim and the burden they have to prevail on a RICO claim. Plaintiffs have clearly alleged two or more predicate acts which is all that is required to state a claim. Defendant relies extensively on Justice Powell's dissent in Sedima v. Imrex Company, Inc., 473 U.S. 479, 87 L. Ed. 2d 346, 105 S. Ct. 3275 (1985) in which he stated:

The definition of "pattern" may thus logically be interpreted as meaning that the presence of the predicate acts is only the beginning: Something more is required for a "pattern" to be proved.

 87 L. Ed. 2d at 378. Even if I were to accept Justice Powell's comments in his dissent as indicative of the direction the Court would go if faced with the issue of what constitutes a "pattern," I do not believe his comments assist defendants in their motion to dismiss. Justice Powell stated that something more is required for a "pattern" to be proved; it does not follow that something more than predicate acts need be alleged to state a claim.

 Moreover, defendants contend that there was only a single transaction between the parties and therefore no pattern can possible be established. As the court in United States v. Starnes, 644 F.2d 673, 678 (7th Cir. 1981) held, "the fact that there is but one objective underlying the separate acts does not diminish the applicability of RICO to those acts." Although Starnes was a criminal case, I believe that the court's reasoning is equally applicable here. In Starnes, defendants had argued that RICO cannot apply to a conspiracy to commit a single arson; the predicate acts were mail fraud and interstate travel with the intent to commit arson. The court held that although there was a single objective, the arson, several acts of racketeering were necessary to meet the single objective. Similarly, while there may have been only one transaction intended or one objective, defendants allegedly committed several racketeering acts to entice plaintiffs to enter that transaction. Therefore, defendants' motion to dismiss on the grounds of failure to plead a pattern of racketeering activity will be denied.

 Defendants also contend that plaintiffs have failed to plead an enterprise separate from the defendants. In B.F. Hirsch v. Enright Refining Co., Inc., 751 F.2d 628, 633-34 (3d Cir. 1984), the court held that the "person" charged with the RICO violation cannot be the same entity as the "enterprise" under section 1962(c). The court concluded that this holding was mandated by the Congressional intent to punish infiltrating racketeers rather than the legitimate corporation which might be an innocent victim of the racketeering activity.

 Plaintiffs have alleged two counts in their RICO complaint; these will be examined in seriatim. In count one of their complaint, plaintiffs allege that each of the following is an enterprise within the meaning of 18 U.S.C. § 1962(c): (1) Dumas, (2) Mega Corp., and (3) "the association Defendants entered into with McElroy, Dumas, and Mega for the purposes of providing mortgage financing for commercial projects in general, and for the purpose of providing mortgage financing for Plaintiffs in particular." Defendants contend first that plaintiffs have not pleaded sufficient facts to establish that Mega and Dumas are RICO enterprises. Again, I believe that defendants have confused what must be pleaded with what must be proved. As the court in Seville Indus. Machinery v. Southmost Machinery, 742 F.2d 786 (3d Cir. 1984) noted, United States v. Riccobene, 709 F.2d 214 (3d Cir.), cert. denied sub nom. Ciancaglini v. United States, 464 U.S. 849, 104 S. Ct. 157, 78 L. Ed. 2d 145 (1983) and United States v. Turkette, 452 U.S. 576, 69 L. Ed. 2d 246, 101 S. Ct. 2524 (1981) upon which defendants rely, do not address what must be pleaded in order to state a cause of action. The Seville court held that the rules of pleading require nothing more than that the plaintiff identify the four entities it believed were the enterprises that ...

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