against the attorneys who handled the establishment of the partnership for malpractice. I do not find Brennan to be particularly relevant to the present issue. Moreover, I believe that the court's conclusion in Biggans that the sole source of private causes of action is 501 is correct.
The Spector, Cohen defendants have, at the last minute, advanced a rather novel argument based on the decisions in Wilson v. Garcia, 471 U.S. 261, 105 S. Ct. 1938, 1947, 85 L. Ed. 2d 254 (1985) and Malley-Duff & Associates, Inc. v. Crown Life Insurance Co., 792 F.2d 341 (3d Cir. 1986). In Wilson v. Garcia, the Court held that, to avoid uncertainty and time-consuming litigation, a single, broad characterization of all § 1983 claims for selecting the appropriate statute of limitations best fits the statute's remedial purposes. 105 S. Ct. at 1945. Following this reasoning, the court in Malley-Duff, held that all civil RICO cases should be characterized uniformly and that the state limitations period most appropriate for all civil RICO claims should be applied. The court concluded that for RICO claims arising in Pennsylvania, the six year residual statute of limitations would govern.
Defendants contend that based on the analysis applied in Wilson v. Garcia and Malley-Duff, the issue of whether a particular defendant can be held liable under the Pennsylvania Securities Act is no longer relevant. Instead, defendants contend that the courts must select the statute of limitations most appropriate for all federal securities claims. Therefore, they contend, the issue before me is which Pennsylvania statute of limitations is most "analogous" to the plaintiff's federal securities law claims: the statute of limitations found in the Pennsylvania Securities Act or Pennsylvania's "catchall" statute of limitations.
To reach the conclusion defendants suggest would be to fly directly in the face of the holdings of the Third Circuit in Sharp v. Coopers & Lybrand, 649 F.2d 175 (3d Cir. 1981); Biggans v. Bache Halsey Stuart Shields, 638 F.2d 605 (3d Cir. 1981). More importantly, I do not believe that the Supreme Court or the Third Circuit intended the uniform characterization approach developed in Wilson v. Garcia to govern all cases in which federal law provides the rule of decision. Rather, uniform characterization is an approach to be applied where there can be no precise counterpart in state law for the federal cause of action. A claim pursuant to § 1983 has no precise counterpart in state law, and as the Malley-Duff court noted, "Civil RICO is as far removed from any traditional state cause of action as is § 1983." slip op. at 347.
Actions under the federal securities acts, however, do not present the same problem. Parallel actions do exist under state law. Applying Pennsylvania law, a buyer or a seller has an action against his or her seller or buyer; if the federal action is similar, the Pennsylvania securities act statute of limitations is applied. If the defendant is not a buyer or seller, the residual six year statute of limitations is applied. There is not the same uncertainty as governs actions under § 1983 and RICO. Accordingly, I will decline defendants' suggestion that I expand the analysis of Wilson v. Garcia, and Malley-Duff to the area of securities law. Therefore, because I do not believe that plaintiff would have a cause of action under the Pennsylvania Securities Act, the statute of limitations set forth in section 504 is inapplicable and plaintiff's claim is timely under the six year statute of limitations governing claims for common law fraud.
RICO claim - - Statute of Limitations
Defendants also contend that plaintiff's RICO claims are untimely. Their motions are based on the theory that the analogous state cause of action is common law fraud, and the appropriate statute of limitations is two years. In Malley-Duff v. Crown Life Insurance Co., 792 F.2d 341 (3d Cir. 1986), however, the court held that all civil RICO claims would be governed by the residual six year statute of limitations. 42 Pa. Cons. Stat. Ann. § 5527. Relying on the Court's analysis in Wilson v. Garcia, 471 U.S. 261, 105 S. Ct. 1938, 85 L. Ed. 2d 254 (1985), the court held that in borrowing state limitation periods for civil RICO claims, the court must select the state period most appropriate for all civil RICO claims. The court then held that the six year period was most applicable to all RICO claims. Therefore, defendants' theory as to plaintiff's RICO claim fails.
Failure to Differentiate Among Defendants
Defendants contend that plaintiff's complaint should be dismissed because plaintiff has failed to differentiate among defendants. Although I agree that plaintiff's complaint could be more specific, I do not believe that it would be appropriate to dismiss the complaint. Defendants will be able to force plaintiff to flesh out his theories against each of them through full and complete discovery.
Failure to State a Rico claim
Finally, defendants contend that plaintiff's complaint fails to state a RICO claim because it does not allege properly a pattern of racketeering activity. A "pattern of racketeering activity" is defined in the RICO state 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). Plaintiff has alleged a series of misrepresentations and omissions constituting securities fraud, interstate transport of stolen property and mail fraud. Defendants contend that each of these acts were part of a single transaction or scheme and therefore cannot constitute a pattern of activity for purposes of RICO.
In Sedima S.P.R.L. v. Imrex Co., 473 U.S. 479, 105 S. Ct. 3275, 87 L. Ed. 2d 346 (1985) the Court, in a footnote stated that:
The legislative history supports the view that two isolated acts of racketeering activity do not constitute a pattern. As the Senate Report explained: "The target of [RICO] is thus not sporadic activity. The infiltration of legitimate business normally requires more than one 'racketeering activity' and the threat of continuing activity to be effective. It is this factor of continuity plus relationship which combines to produce a pattern." (citation omitted).