2. Sufficiency of Plaintiff's RICO Claims
Defendants next argue that plaintiffs Complaint should be dismissed
pursuant to Federal Rule of Civil Procedure 12(b)(6). More specifically,
defendants contend that plaintiffs fraud based RICO claims are not pled
with the particularity required under Federal Rule of Civil Procedure
Under Rule 12(b)(6), a court should dismiss a claim for failure to
state a cause of action only if it appears to a certainty that no relief
could be granted under any set of facts which could be proved. See Hishon
v. King & Spalding, 467 U.S. 69, 73 (1984).
Because granting such a motion results in a determination on the merits
at such an early stage of a plaintiffs' case, the district court "must
take all the well pleaded allegations as true, construe the complaint in
the light most favorable to the plaintiff, and determine whether, under
any reasonable reading of the pleadings, the plaintiff may be entitled to
relief." Colburn v. Upper Darby Township, 838 F.2d 663, 664-65 (3rd Cir.
1988), cert. denied, 489 U.S. 1065 (1989) (quoting Estate of Bailey by
Oare v. County of York, 768 F.2d 503, 506 (3d Cir. 1985)).
When a RICO Complaint sounds in fraud, Federal Rule of Civil Procedure
Rule 9(b) applies to the Complaint. See Chovanes v. Thoroughbred Racing
Ass'n, 2001 WL 43780, at *2 (E.D.Pa. Jan 18, 2001). Accordingly, Rule
9(b) provides that "[i]n all averments of fraud or mistake, the
circumstances constituted fraud or mistake shall be stated with
However, this requirement must be read in conjunction with the liberal
pleading rules that the Rules embrace. See, e.g., Beascoechea v. Sverdrup
& Parcel and Assoc., Inc., 486 F. Supp. 169, 174 (E.D.Pa. 1980). Thus,
the purposes of Rule 9(b) are to provide notice of the precise misconduct
with which defendants are charged and to "safeguard defendants against
spurious charges of immoral and fraudulent behavior." Seville Indus.
Mach. v. Southmost Mach., 742 F.2d 786, 791 (3rd Cir. 1984); see also
Rolo v. City Investing Co., 155 F.3d 644, 658 (3rd Cir. 1998) (citations
omitted). A Complaint is adequate if the allegations of fraud reflect
precision and some measure of substantiation. See Seville, 742 F.2d at
Here, defendants do not argue that plaintiffs fail to allege a prima
facie case under RICO;*fn2 rather they argue that plaintiffs have failed
to sufficiently allege mail or wire fraud. Upon a review of plaintiffs'
Complaint, the Court finds that plaintiffs' RICO claims are pled with
sufficient particularity. Plaintiffs make numerous specific allegations'
concerning defendants' fraudulent conduct, and after each allegation,
plaintiffs aver that defendants
committed such conduct using the mails,
wires and telephones.*fn3
Additionally, defendants fail to argue that they lack notice as to
plaintiffs' precise charges. Instead, defendants contend that plaintiffs
Complaint is nothing more than an attempt to "convert a garden variety
contract dispute between an attorney and a client into a RICO case."
Defendants should know better than to make such an argument. In
Perlberger I, where defendants represented Messody Perlberger, defendants
defeated a Motion to Dismiss in large part because Judge Padova held that
even if a claim amounts to garden variety fraud, such a characterization
is not fatal to a RICO claim. See Perlberger v. Perlberger, 1998 WL
76310, at *4 (E.D.Pa. Feb 24, 1998). Indeed, the Third Circuit has
recognized that the inclusion of mail and wire fraud within the scope of
civil RICO extends RICO beyond the world of racketeers to the realm of
common law, "garden variety" fraud found in commercial litigation. See
Tabas v. Tabas, 47 F.3d 1280, 1290 (3rd Cir. 1995).
To the extent defendants' argue that the Court should decline to
exercise supplemental jurisdiction over plaintiffs' state law claims, the
Court finds defendants' argument unpersuasive. Defendants' fail to offer
any legal support for their position, and fail to otherwise articulate a
basis for their argument.
For the reasons set forth above, the Court will deny defendants
Motion to Dismiss.