"racketeering activity." Am. Complaint ¶ 116.
Defendants' motion to dismiss the RICO claims will be granted
because plaintiffs have not satisfied the pleading requirements
for a RICO violation with respect to the "continuity" element.
At the most, the predicate acts occurred over a period of four
months, assuming that Morgan Guarantee was a part of the
scheme; at the least, approximately six weeks. As we stated
above, predicate acts extending over a few weeks or months and
threatening no future criminal conduct do not satisfy the
continuity requirement. H.J., Inc., 492 U.S. at ___, 109 S.Ct.
at 2902, 106 L.Ed.2d at 209. Furthermore, the predicate acts
relate to Emerson's purchase of the assets of ERP for $10
million, thus, there is no indication of future criminal
activity posing a threat to society.
Since we have denied defendants' motion to dismiss the
securities claim, we will deny defendants' motion to dismiss
the pendent state law claims, see United Mine Workers v. Gibbs,
383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966), and we will
address defendants' motion for partial summary judgment on the
PARTIAL SUMMARY JUDGMENT
Federal Rule of Civil Procedure 56(c) provides that summary
judgment may be granted "if the pleadings, depositions, answers
to interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to
any material fact and that the moving party is entitled to
judgment as a matter of law." Fed.R.Civ.P. 56(c).
When confronted with a motion for summary judgment, it is not
the court's function to weigh the evidence and determine the
truth of the matter, but it is the court's job to decide
whether there is a genuine issue for trial. Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91
L.Ed.2d 202 (1986). An issue is genuine only if the evidence is
such that a reasonable jury could return a verdict for the
nonmoving party. Anderson, 477 U.S. at 248, 106 S.Ct. at 2510.
The moving party has the burden to identify those portions of
pleadings, depositions, answers to interrogatories, and
admissions on file, together with affidavits, if any, which it
believes demonstrates the absence of a genuine issue of
material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106
S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). The nonmoving party
then must go beyond the pleadings and by affidavits,
depositions, answers to interrogatories, and admissions on
file, designate facts showing that there is a genuine issue for
trial. Celotex, 477 U.S. at 324, 106 S.Ct. at 2553.
Defendants argue that they are entitled to summary judgment
on the securities claims for two primary reasons. First, they
assert that prior to the securities transaction on which
plaintiffs base their securities claim, they disclosed to
plaintiff's agents, Jeff Feuer, plaintiffs' financial advisor
and J. Nelson Happy, an attorney of Patterson Belknap, every
fact allegedly omitted or misrepresented. Second, they maintain
that such disclosures establish the absence of scienter.
Plaintiffs argue, to the contrary, that plaintiffs did not
have full knowledge of the undisclosed information.
As can be clearly seen, the disagreement over whether
plaintiffs knew the information allegedly not disclosed to them
before the vote on December 22, 1989 raises a factual dispute
which precludes summary judgment from being granted. Therefore,
defendants' motion for partial summary judgment on the
securities claim will be denied.
An appropriate order will issue.
AND NOW, to-wit, this 15th day of January, 1991, for the
reasons stated in the foregoing opinion, it is ORDERED,
ADJUDGED, and DECREED that:
1. Plaintiffs' Motion for Class Certification pursuant to
Fed.R.Civ.P. 23(b)(3) be and hereby is GRANTED;
2. Plaintiffs Hoffman Electric, Inc., Lawrence R. Musselman
and Georgiana R. Musselman, as Co-Trustees of the Lawrence R.
Musselman and Georgiana R. Musselman Trust, and Walter Winius,
Jr., be and hereby are CERTIFIED to sue as the representative
plaintiffs on behalf of all persons who, on or about December
20, 1990, redeemed or sold limited partnership interests in
Emerson Research Partners L.P.;
3. The law firms of Patterson, Belknap, Webb & Tyler and
Ambrose & Friedman be and hereby are DESIGNATED as counsel for
4. The plaintiff class representatives shall give the members
of the class the best notice practicable under the
circumstances, including individual notice to all members who
can be identified through reasonable effort, pursuant to
5. Defendants' motion to dismiss be and hereby is DENIED as
to the securities claim and pendent claim, but be and hereby is
GRANTED as to the RICO claims;
6. Defendants' motion for partial summary judgment be and
hereby is DENIED as to the securities claim.
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