United States, 878 F.2d 62, 66 (2d Cir. 1989) (noting that "conclusory averments of the existence of fraud made upon information and belief and unaccompanied by a statement of clear and convincing probative facts which support such belief do not serve to raise the issue of the existence of fraud") (citation omitted).
In the case sub judice, the fraudulent misrepresentation claim survives. The Amended Complaint names the perpetrators of the fraudulent statement and/or omission. It also lists the content of those statements, i.e., that Defendants represented that they would assist Lujan with emotional disorders but omitted the fact that this therapy involved separation from her parents as well as the implantation of memories of satanic rituals, abuse, and deviant sexual assaults. (See Am. Compl. PP 88-91 (alleging "Defendants fraudulently misrepresented the nature and results of their 'therapy' and used deceit and false statement to induce Plaintiff to enter into a contract with them" and these representations were a "substantial factor" in bringing about Lujan's injuries)).
Count VI theorizes that Defendants fraudulently told Lujan they would help her with her emotional disorders but failed to tell her that the therapy involved the implantation of memories of bizarre satanic rituals and sexual assaults. According to Lujan, these representations and omissions induced her to begin therapy. Lujan has stated a claim for fraudulent misrepresentation. Because the relationship involved matters known to Defendants that Lujan was entitled to know because of a fiduciary relation of trust and confidence between her and Defendants, allegations of "omissions" will support Lujan's claim for fraudulent misrepresentation. See Duquesne Light Co. v. Westinghouse Elec. Corp., 66 F.3d 604 (3d Cir. 1995) (finding "liability may be imposed on a party to a business transaction only when it has a duty to speak. That duty . . . exists only in limited circumstances, including (1) when there is a fiduciary or confidential relationship between the parties") (citing Restatement (Second) of Torts § 551 (1977)).
E. Breach of Confidentiality
Defendants argue that in Count VI, Lujan confusingly omitted a title. Defendants read that count as presenting either a claim for invasion of privacy or breach of confidentiality. Lujan resolves this ambiguity in her Response, which simply states "plaintiff seeks through Count VI to recover damages for breach of confidentiality." (Pl.'s Resp. at (E.)). Defendants protest that the breach of confidentiality claim fails because the Amended Complaint fails to state that Lujan did not consent to participate in group therapy. They also argue that the Amended Complaint reveals neither the specific therapy sessions at issue nor the confidences revealed.
The Amended Complaint baldly asserts "throughout the course and scope of her treatment, the Defendants routinely and regularly told others in group therapy statements made by plaintiff which she had told them in confidence." (Am. Compl. P 77). Pennsylvania case law recognizes a cause of action for "breach of confidentiality." See Ms. B. v. Montgomery County Emergency Serv., Inc., 799 F. Supp. 534, 538 (E.D. Pa. 1992) (recognizing the harm caused by breach of patient-physician confidentiality as including "direct negative consequences for the patient;" "harm simply from knowing that elements of the intimate details of [her] life have been laid bare for the uninvited viewer;" and "harm to [her] public image . . . that cannot be rehabilitated through legal action"), aff'd, 989 F.2d 488 (1993); Moses v. McWilliams, 379 Pa. Super. 150, 549 A.2d 950, 953 (Pa. Super. Ct. 1988) (recognizing claim for breach of confidentiality), appeal denied, 521 Pa. 631, 558 A.2d 532 (Pa. 1989).
Admittedly, the skeletal allegations in the Amended Complaint omit details indicating the content of the statements, their subject matter, the topic of the confidences revealed, their timing, to whom the statements were made, etc. Dismissing the breach of confidentiality claim for these inadequacies, however, would constitute an implicit application of Federal Rule of Civil Procedure 9(b). The Court would in effect apply a heightened pleading standard by erroneously requiring particularity in a cause of action that need only satisfy Federal Rule of Civil Procedure 8(a)(2). Lujan has pled that a psychiatrist-patient relationship existed with Defendants, that confidences were entrusted to Defendants, and that Defendants breached this confidentiality by revealing Lujan's confidences in group therapy. Lujan has provided the Court with a short and plain statement declaring her entitlement to relief on the breach of confidentiality claim, and Defendants are aware of the basic conduct for which they must answer.
G. RICO Count
Defendants maintain Lujan has failed to properly plead a RICO claim, asserting fraud has not been alleged with sufficient particularity and a "pattern" of racketeering has not been established. Defendants protest the Amended Complaint's skeletal reference to their (1) use of the United States Postal Service to send letters and bills and (2) placing numerous telephone calls to Lujan and the police. The Amended Complaint, argue Defendants, fails to set forth sufficient facts to establish a pattern of racketeering activity. The Court agrees.
In order to survive Defendants' Motion to Dismiss, Lujan's RICO claim must allege "(1) the conducting of, (2) an enterprise, (3) through a pattern, (4) of racketeering activity." Heintz Corp. v. Electro Methods, Inc., 1995 U.S. Dist. LEXIS 8346, No. 94-6916, 1995 WL 405721, at *2 (E.D. Pa. June 20, 1995) (citation omitted).
RICO "defines a 'pattern' of racketeering activity as requiring 'at least two acts of racketeering activity' within a ten year period." Tabas v. Tabas, 47 F.3d 1280, 1290 (3d Cir. 1995) (quoting 18 U.S.C.A. § 1961(5)), cert. denied, 132 L. Ed. 2d 275, 115 S. Ct. 2269 (1995).
A complaint alleges such a pattern if "'the racketeering predicates are related, and. . . they amount to or pose a threat of continued criminal activity.'" Id. 47 F.3d at 1292 (citation omitted). Under the "relatedness requirement," "predicate acts are related if they 'have the same or similar purposes, results, participants, victims, or methods of commission, or otherwise are interrelated by distinguishing characteristics and are not isolated events.'" Id. (citation omitted).
To comply with the "continuity" prong of the analysis, the complaint must allege "continuity of racketeering activity, or its threat.'" Id. (citation omitted). Continuity may be either closed-ended, referring "to a closed period of repeated conduct," or open-ended, meaning "past conduct that by its nature projects into the future with a threat of repetition." Id. (citation omitted). With regard to closed-ended conduct, the related predicates must extend over a substantial period of time, generally exceeding one year. Tabas, 47 F.3d at 1293.
"Open-ended continuity is established when the commission of the predicate acts is a 'regular way of conducting defendant's ongoing legitimate business.'" Id. at 1295.
Barticheck v. Fidelity Union Bank/First National State, 832 F.2d 36 (3d Cir. 1987), however, recognized that:
the existence of a RICO pattern does not turn on the abstract characterization of racketeering acts as 'continuous' and 'related' but rather on a combination of specific factors such as the number of unlawful acts, the length of time over which the acts were committed, the similarity of the acts, the number of victims, the number of perpetrators, and the character of the unlawful activity.
Id. at 39.
The Amended Complaint lacks information needed to enable Defendants to formulate a defense to Lujan's RICO claim. The RICO claim merely states that several letters and bills were mailed to Lujan encouraging her beliefs, and numerous phone calls were made to Lujan and the police in an effort to promote fraudulent misrepresentations, all in violation of 18 U.S.C.A. §§ 1341, 1343, and 1961. The Amended Complaint neglects to identify either the "enterprise" or the "persons" engaged in the unlawful conduct. See Heintz, 1995 U.S. Dist. LEXIS 8346 at *5, 1995 WL 405721 at *2 (noting "plaintiff identifies EMI as the 'enterprise' and the individual defendants as the 'persons'"). A properly pleaded RICO count includes enterprise descriptions that contain inter alia (1) the names of the individuals, partnerships, associations, or other legal entities that constitute the enterprise; (2) the structure, purpose, function and course of conduct of the enterprise; (3) information on whether any defendants are employees, officers or directors of the alleged enterprise; (4) a statement as to whether defendants are associated with the enterprise; and (5) a statement as to whether defendants are individuals or entities separate from the alleged enterprise, are the enterprise itself, or are members of the enterprise.
The Amended Complaint also fails to (1) indicate the specific provision(s) of 18 U.S.C.A. § 1961 that has (have) been violated, i.e., §§ 1961(a), (b), (c), and/or (d); (2) provide a list of responsible defendants that reveals the alleged misconduct perpetrated by each defendant and the basis of each Defendant's liability; and (3) describe in detail the pattern of racketeering activity that includes inter alia information relating to the predicate acts and the specific provisions violated. While Lujan did reveal the specific acts violated, 18 U.S.C.A. §§ 1361, 1363, she did not describe how the predicate acts form a pattern of racketeering activity, how they relate to each other as part of a common plan, and have they pose a threat of continued criminal activity.
Lujan requests an opportunity to file a second Amended Complaint in the event that the Court finds the RICO Count inadequate. Serious questions arise as to Lujan's ability to state a valid RICO claim based on a case that now appears as a state-law dispute over the propriety and integrity of the counseling and therapy allegedly administered by Defendants. This dispute may very well amount to nothing more than a civil controversy with nothing really to be gained by introducing into the case the difficult application of federal RICO pertaining to (1) a "pattern of racketeering activity" and (2) the question of whether Defendant or Defendants individually engaged in any criminal, predicate acts.
If Lujan chooses to file a second amended complaint pleading RICO, she should exercise special care in pleading the necessary elements as to each Defendant named. In that regard, Lujan should be guided by the Court's "RICO Case Statement" form in determining and stating such requested amendments. Accordingly, the Court will dismiss Lujan's RICO Count without prejudice and allow her leave to amend, a second time, the Amended Complaint.
An appropriate Order follows.
AND NOW, this 13th day of March, 1997, upon consideration of Defendants' Motions to Dismiss (Doc. Nos. 11, 12, 13, 17), Plaintiff's Responses thereto (Doc. Nos. 14, 15, 18), and Defendants' Rebuttal (Doc. No. 16), IT IS HEREBY ORDERED THAT :
1. Defendants' Motions are GRANTED with respect to Count VII, and Count VII is DISMISSED WITHOUT PREJUDICE.
2. Defendants' Motions are DENIED in all other respects.