Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

GILBERT v. PRUDENTIAL-BACHE SECS.

April 7, 1986

DOROTHY GILBERT, on behalf of herself and all others similarly situated, Plaintiffs,
v.
PRUDENTIAL-BACHE SECURITIES, INC., et al., Defendants



The opinion of the court was delivered by: FULLAM

FULLAM, J.

 The efforts of counsel for the parties in pursuing pretrial motions addressing the RICO claims asserted in Count IV of plaintiff's Complaint have been vigorous, tireless, and seemingly endless.

 At an early stage, I dismissed the RICO claims under F.R.Civ.P. 12(b)(6), opining that RICO was not intended to supplant or supplement the existing scheme of remedies for violations of the securities laws. I certified that ruling for interlocutory appeal pursuant to 28 U.S.C. § 1292(b). In due course, in the wake of Sedima S.P.R.L. v. Imrex Co., Inc., 473 U.S. 479, 105 S. Ct. 3275, 87 L. Ed. 2d 346 (1985), the Court of Appeals reversed and remanded the RICO claims. Since my ruling had been based upon the erroneous view that Congress did not intend RICO to apply at all in this situation, the Court of Appeals expressly declined to consider defendants' alternative argument that no separate "enterprise" had been adequately identified, hence dismissal was proper under B.F. Hirsch v. Enright Co., Inc., 751 F.2d 628 (3d Cir. 1984).

 After the remand, defendants again sought dismissal, invoking the Enright decision. The motion was denied, on the theory that it was now the "law of the case" that plaintiff's Complaint withstood dismissal under F.R.Civ.P. 12(b)(6). Meanwhile, however, individual plaintiffs in related cases arising in the same factual context as the present class action were denied leave to amend their Complaints to add a RICO claim, on the basis of the Enright decision.

 The defendant Bache has now filed a motion for partial summary judgment, again seeking dismissal of the RICO count; and the matter has again been extensively briefed (memorandum in support of defendant's motion, memorandum in response, reply memorandum, and supplemental memorandum in response to the reply).

 It is helpful to review the pertinent statutory provisions. 18 U.S.C. § 1964(c) provides:

 
"Any person injured in his business or property by reason of a violation of § 1962 of this chapter may sue therefore in any appropriate United States District Court and shall recover threefold the damages he sustains and the cost of the suit, including a reasonable attorney's fees."

 Section 1962, violation of which may give rise to a civil cause of action under this language, contains four subsections, the pertinent parts of which provide as follows:

 
"(a) It shall be unlawful for any person who has received any income derived, directly or indirectly, from a pattern of racketeering activity . . . to use or invest, directly or indirectly, any part of such income, or the proceeds of such income, in acquisition of any interest in, or the establishment or operation of, any enterprise which is engaged in, or the activities of which affect, interstate or foreign commerce . . . ."
 
"(b) It shall be unlawful for any person through a pattern of racketeering activity . . . to acquire or maintain, directly or indirectly, any interest in or control of any enterprise which is engaged in, or the activities of which affect, interstate or foreign commerce.
 
"(c) 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.
 
"(d) It shall be unlawful for any person to conspire to violate any of the provisions of subsections (a), (b), or (c) of this section."

 The defendant Bache argues that plaintiff's Complaint asserts only claims under subsection (c) and possibly subsection (d), and must be dismissed because no "enterprise" other than the defendant itself can be shown to have been involved in the alleged pattern of racketeering activities. Plaintiffs dispute this, contending that, broadly read, the Complaint suffices to allege claims arising under subsection (a) as well, and that, under subsection (a), no separate "enterprise" need be shown. The defendant counters with the assertion that this amounts to an untimely motion to amend the Complaint.

 Initially, I reject defendants' procedural argument. I believe the Complaint can properly be read to assert claims under any and all sections of the RICO statute which may be pertinent. In any event, the various subparts of § 1962 are so closely related that it is unlikely that such an amendment would be likely to cause prejudice. And the argument about untimeliness loses much of its force by virtue of the recent joint request by all parties for postponement of the scheduled trial. I therefore address the merits of the ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.