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November 20, 1992

TECHNOLOGY LICENSING CONSULTANTS, INC., a corporation, ANITA FRENCH, individually and as an officer of the corporation, LOWELL L. FRENCH, individually and as an officer of the corporation, INTERNATIONAL PRODUCT DESIGN, a corporation, ROBERT WAXMAN, individually and as an officer and/or owner of the corporation, DARRELL MORMANDO, individually and as an officer of the corporation, and AL LEVASSEUR, individually and as an officer of the corporation, Defendants.


The opinion of the court was delivered by: ALAN N. BLOCH


BLOCH, District J.

 Presently before the Court are two separate motions to dismiss filed by Technology Licensing Consultants, Inc. (TLCI), Anita French, and Lowell L. French (TLCI defendants) and International Product Design (IPD), Robert Waxman, Darrell Mormando and Al Levasseur (IPD defendants). For the reasons stated below, those motions will be granted in part and denied in part.

 I. Standard of review

 In ruling on a motion to dismiss, the applicable standard of review requires the Court to accept as true all allegations in the complaint and all reasonable inferences that can be drawn therefrom, and view them in the light most favorable to the non-moving party. Rocks v. Philadelphia, 868 F.2d 644, 654 (3d Cir. 1989). The question before the Court is not whether the plaintiffs will ultimately prevail; rather, it is whether the plaintiffs can prove any set of facts in support of their claim that will entitle plaintiffs to relief. Hishon v. King & Spalding, 467 U.S. 69, 73, 81 L. Ed. 2d 59 , 104 S. Ct. 2229 (1984).

 In ruling on motions to dismiss under the Racketeering Influenced and Corrupt Organizations Act, 18 U.S.C. § 1962, et seq. (RICO), this Court is mindful of the Supreme Court's instruction in Sedima, S.P.R.L. v. Imrex Co., Inc., 473 U.S. 479, 87 L. Ed. 2d 346 , 105 S. Ct. 3275 (1985), regarding the interpretation of the RICO Act.

RICO is to be read broadly. This is the lesson not only of Congress' self-consciously expansive language and overall approach, see United States v. Turkette, 452 U.S. 576, 586-87, 69 L. Ed. 2d 246 , 101 S. Ct. 2524 (1981), but also of its express admonition that RICO is to "be liberally construed to effectuate its remedial purposes," Pub. L. 91-452, § 904(a), 84 Stat. 947.

 Sedima, 473 U.S. at 496. See also United States v. Local 560 of International Broth., etc., 780 F.2d 267, 295 (3d Cir. 1985), cert. denied, 476 U.S. 1140 (1986).

 II. Facts

 Pro se plaintiffs, Stephen E. Hughes, Albert D. Pope, Chad L. Chasser and Richard P. McGough, allege that they are former employees of TLCI, which, according to plaintiffs, is in the business of marketing invention ideas. Plaintiffs allege that since 1985, the TLCI defendants have been defrauding consumers by inducing them to pay fees to TLCI with false promises of financial gain through the TLCI defendants' marketing of their inventions. Plaintiffs assert that the Federal Trade Commission (FTC) prosecuted the TLCI defendants for these activities and obtained a consent decree from them. The consent decree required that all TLCI employees agreed to abide by it, and all employees entered into contracts to comply with the decree.

 Plaintiffs allege that they resigned from TLCI in order to avoid participating in the illegal scheme. Plaintiffs further allege that other TLCI employees would also like to resign, however, these employees are being extorted to remain at TLCI. Plaintiffs allege that the TLCI defendants are threatening to render them unemployable in the industry by exposing the employees' contracts to abide by the consent decree.

 Plaintiffs allege that the TLCI defendants conspired with the IPD defendants to put teeth into the threat by having the IPD defendants discharge the plaintiffs, so that the TLCI defendants could hold plaintiffs' discharge up to other employees as examples of the fate awaiting them. The amended complaint asserts violations of §§ 1962(a), (b) and (d) of RICO. The complaint also alleges supplementary state claims of tortious interference with contractual rights.

 III. 18 U.S.C. 1962(a)

 In order to have standing to recover under RICO, plaintiffs must plead (1) a § 1962 violation, and (2) an injury to business or property by reason of such violation. 18 U.S.C. § 1964(c); Shearin v. E. F. Hutton Group, Inc., 885 F.2d 1162, 1164 (3d Cir. 1989). Both groups of defendants have moved to dismiss all of the RICO claims alleging, among other things, that plaintiffs lack standing to bring such claims. Each will be addressed below.

 Plaintiffs have asserted that "defendants TLCI, Anita French, Lowell French, used income that they derived from the above-described pattern of racketeering in the operation of the enterprise, the activities of which affect interstate commerce, in violation of 18 U.S.C. § 1962(a)." (Amended complaint at P 24). *fn1" The TLCI defendants have moved to dismiss this claim, asserting that "the injury which plaintiffs claim is the loss of their job. The plaintiffs do not claim that they lost their jobs as a result of the TLCI defendants investing money obtained through racketeering activity. Rather, they claim injury by the IPD defendants' act of discharging them, as part of the scheme to extort other employees. These allegations are insufficient to state a claim under § 1962(a)." (Memorandum in support of [TLCI defendants'] motion to dismiss (TLCI memorandum) at 3-4). The TLCI defendants are correct.

 Under 18 U.S.C. § 1962(a), it is illegal to use or invest income derived "from a pattern of racketeering activity" to acquire an interest in or to operate an enterprise engaged in interstate commerce. 18 U.S.C. § 1962 (a); H. J., Inc. v. Northwestern Bell, 492 U.S. 229, 233, 106 L. Ed. 2d 195 , 109 S. Ct. 2893 (1989). A person who has been injured by such a violation may bring a civil cause of action under 18 U.S.C. § 1964(c).

 The Third Circuit has held that "§ 1962(a) is directed specifically at the use or investment of racketeering income, and requires that a plaintiff's injury be caused by the use or investment of income by the enterprise." Brittingham v. Mobil Corp., 943 F.2d 297, 303 (3d Cir. 1991). "Requiring the allegation of income use of investment injury is consistent with both the literal and the fair import of the [language of § 1962(a)]." Rose v. Bartle, 871 F.2d 331, 358 (3d Cir. 1989) (citation omitted). See generally Princeton Economics Group v. AT&T, 768 F. Supp. 1101, 1111-15 (D.N.J. 1991).

 Plaintiffs' amended complaint fails to plead the necessary "investment injury." Glessner v. Kenny, 952 F.2d 702, 708 (3d Cir. 1991). In the instant case, plaintiffs have alleged that the defendants committed wire fraud, mail fraud and extortion, which constituted patterns of racketeering activity. (Amended complaint at P 20). The injuries alleged by the plaintiffs are:

As a direct and proximate result of the foregoing violations of 18 U.S.C. § 1962 by defendants, plaintiffs were fired from their jobs sustaining injury by loss of income.

 (Amended complaint at P 29).

 In their RICO statement, plaintiffs are unable to set forth the causal relationship between the alleged injury and the § 1962(a) violation of the RICO statute. (See RICO statement at 116). Instead, plaintiffs refer the Court to the RICO statement's listing of the allegations of defendants' scheme to defraud consumers. (See id. at P 5). Plaintiffs' assertion that losing their job in some way resulted from the investment of proceeds from racketeering activity is without merit. The injury has not been specifically linked to the use or investment of income in any named enterprise, because, in fact, it was not. Kehr Packages, Inc. v. Fidelcor, Inc., 926 F.2d 1406, 1411 (3d Cir.), cert. denied, 115 L. Ed. 2d 1007, 111 S. Ct. 2839 (1991). Thus, § 1962(a) cannot be a basis for liability in this case. Because no "investment injury" has been pled, plaintiffs have no standing to bring a § 1962(a) claim and the § 1962(a) claim must be dismissed.

 IV. 18 U.S.C. 1962(b)

 Plaintiffs also assert a § 1962(b) RICO claim against the TLCI defendants, stating that the TLCI defendants "acquired or maintained as interest in or control of the enterprise, the activities of which affected interstate commerce in violation of 18 U.S.C. § 1962(b)." (Amended complaint at P 25). The TLCI defendants have moved to dismiss this claim, contending that plaintiffs "failed to assert the required nexus as to all TLCI defendants . . . rather, the facts which they allege show only that the TLCI defendants used their control over TLCI wrongfully." (TLCI memorandum at 4-5). The TLCI defendants are correct.

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