and "To the extent Mr. Jasper engaged in recommending investments to persons other than plaintiffs, plaintiffs do not know if he withheld from such persons the same information he withheld from them." Id., at 6.
Although the precise meaning of the term "pattern of racketeering activity" has not yet been finalized, and may never be in the sense of a "cookbook" formula applicable to every possible RICO claim, the outer limits of the term have now been limned. In the statute itself, "pattern of racketeering activity" is defined only in terms of requiring at least two acts of racketeering activity within a specified time frame. It has now been further explained, however, that establishing this element requires more than proof by the plaintiff that the defendant engaged in at least two predicate acts. Plaintiffs are required to prove, in addition, that the predicates are related and that they pose a threat of continuing racketeering activity. H.J., Inc. v. Northwestern Bell Telephone Co., 492 U.S. 229, slip op. at 1 (1989). Thus, plaintiffs' statements that: (1) there is no evidence as to whether the predicate acts were related to each other in a common scheme; (2) there is no evidence as to whether defendant ever engaged in the alleged predicate acts before or since the instances of which plaintiffs complain; (3) the pattern of racketeering activity consists simply in the fact that three predicate acts of racketeering activity occurred within the proper time limit, demonstrate that, as a matter of law, plaintiffs cannot prove an essential element of their RICO claim. Consequently, the Court has no recourse but to dismiss that claim.
Moreover, even absent the most recent Supreme Court pronouncement regarding the contours of the RICO pattern requirement, this Court would have been required to reach the same result. Unequivocal notice that the bare recitation of a statutorily sufficient number of alleged predicate acts is nevertheless insufficient to state a cognizable RICO claim was first given in Sedima, S.P.R.L. v. Imrex Co., Inc., 473 U.S. 479, 105 S. Ct. 3275, 87 L. Ed. 2d 346 (n. 14) (1985). The Court of Appeals for the Third Circuit subsequently, but before plaintiffs' RICO case statement in this case was ordered, fashioned a six point test to aid in determining whether the alleged predicate acts amount to a RICO pattern. Barticheck v. Fidelity Union Bank, 832 F.2d 36 (3d Cir. 1987). That test continues to be used in this circuit, see, e.g., Shearin v. E.F. Hutton Group, Inc., 885 F.2d 1162 slip op. at 8 (3d Cir. 1989), and would thus be employed at trial to determine whether plaintiffs had presented sufficient evidence of the RICO claim for a jury to return a verdict thereon in their favor. Assuming that plaintiffs would present evidence of a pattern of racketeering activity in accordance with their RICO case statement, it is obvious that the jury could not, on that basis return a verdict in plaintiffs' favor. In fact, the Court could not permit the RICO claim to be considered by the jury if plaintiffs fail to present any evidence to support an essential element thereof.
As noted, if the securities claims, which are the predicate acts, were also tried as independent claims, the waste of judicial resources inherent in allowing the RICO claim to proceed simultaneously until the directed verdict stage would be minimal. Now, however, evidence of the securities claims would be necessary and permitted only in connection with proof of the RICO claims. If there is insufficient evidence, and indeed, no attempt to adduce or provide sufficient evidence of an essential element of those claims, trial on plaintiffs' federal claims would be futile and an unnecessary waste of time and resources.
In accordance with the Court's decisions regarding the statute of limitations with respect to plaintiffs' securities fraud claim and plaintiffs' inability to state a cognizable RICO claim, there will no longer be any federal claims for trial before this Court. We will, therefore, exercise our discretion to dismiss, without prejudice, plaintiffs' state law claims so that plaintiffs may assert them in an appropriate forum.
ORDER - October 12, 1989, Entered
AND NOW, this 10th day of October, 1989, upon consideration of defendant's motion for summary judgment and plaintiffs' response thereto, IT IS ORDERED that the motion is GRANTED, in part, and judgment is entered in favor of the defendant and against the plaintiff as to Count I of the Amended Complaint.
IT IS FURTHER ORDERED that, in accordance with the accompanying Memorandum, Count II of the Amended Complaint is DISMISSED with prejudice and the remainder of the Amended Complaint is DISMISSED without prejudice.