The opinion of the court was delivered by: CURTIN
John T. Curtin, United States District Judge.
The six plaintiffs in this case are former employees of defendant Atlantic Richfield Company, Inc. [Arco], who briefly became employees of defendant American Brass Company, L.P. [ABC]
when Arco's Metals Division was sold to ABC. ABC discharged the plaintiffs a few days after the sale.
Plaintiffs seek to allege two causes of action. Plaintiffs' first claim asserts that defendants violated the Racketeer Influenced and Corrupt Organization Act [RICO], 18 U.S.C. § 1961, et seq. by engaging in actions, partly through use of the United States mail, which constituted a "pattern of racketeering activity" (Item 1, para. 4). Plaintiffs assert that defendants' actions deprived plaintiffs of Arco severance benefits, which were superior to ABC severance benefits. Plaintiffs' second claim arises under state law and alleges that plaintiffs' discharge constituted a breach of plaintiffs' alleged employment agreement.
All defendants have moved for dismissal of the complaint pursuant to Fed.R.Civ.P. 12(b)(6) and 12(b)(7). Defendants contend that plaintiffs' RICO claim should be dismissed because it fails to state a claim upon which relief can be granted and that plaintiffs' state law claim should be dismissed without prejudice, due to lack of federal jurisdiction.
For reasons discussed below, I grant the motions of all defendants.
Plaintiffs allege that before Arco sold its Metals Division to ABC, Arco told its employees affected by the sale, including plaintiffs, that they could quit and receive early severance benefits, or stay on and become employees of ABC. Plaintiffs allege that Arco told them that ABC would continue their employment with the same or better fringe benefits. Plaintiffs also allege that Arco promised that they would have 20 days' notice before the sale, but that the sale occurred without notice on September 6, 1985. ABC discharged all six plaintiffs a few days later (September 10-12, 1985).
Plaintiffs claim that the severance benefits they were offered by ABC are significantly inferior to what Arco offered before the sale. Furthermore, plaintiffs note that ABC conditions the provision of its benefits upon plaintiffs' signing a form generally releasing ABC from any other obligations or liabilities. Plaintiffs allege that that form, or a letter explaining it, was sent by the U.S. mail to each plaintiff. Plaintiffs have refused to sign the waiver and, to date, have been denied any benefits.
In sum, plaintiffs allege that they were "identified for termination by the defendants prior to the sale and were terminated after the sale with the purposeful intent to defraud . . . [them] of their . . . severance benefits." (Item 1, para. 24.) Plaintiffs allege that this "scheme and course of activity" (Item 1, para. 6) was conducted in part through mail fraud (the mailing by ABC of one letter to each plaintiff, indicating the necessity for signing the ABC release forms), which is a predicate act constituting "racketeering activity" under 18 U.S.C. § 1961.
In order to state a claim under RICO, a plaintiff must allege the existence of seven constituent elements. These elements are:
(1) that the defendant (2) through the commission of two or more acts (3) constituting a "pattern" (4) of "racketeering activity" (5) directly or indirectly invests in, or maintains an interest in, or participates in (6) an "enterprise" (7) the activities of which affect interstate or foreign commerce.
All defendants assert that plaintiffs' complaint fails to allege facts supporting the existence of the requisite "pattern of racketeering activity" or "enterprise" and that the complaint should therefore be dismissed for failure to state a claim.
In considering the motions of the defendants to dismiss, this court is bound by the general rule that a complaint should not be dismissed pursuant to Rule 12(b)(6) unless it appears beyond doubt that the plaintiffs can prove no set of facts in support of their claim which would entitle them to relief. Goldman v. Belden, 754 F.2d 1059, 1065 (2d Cir. 1985), quoting Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957). Since I find that plaintiffs cannot prove a set of facts which support the existence of a "pattern of racketeering activity"
within the meaning of RICO, I grant the motions of the defendants to dismiss on that ground, and address it only.
In Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 105 S. Ct. 3275, 87 L. Ed. 2d 346 (1985), the Supreme Court observed that Congress and the courts had failed to develop a "meaningful concept" of the pattern requirement of RICO. That failure, the Court stated, was a primary reason why "in its private civil [application], RICO is evolving into something quite different from the original conception of its enactors." Id. at 3287. The Court noted in dicta that while "two acts of racketeering activity" are necessary to form a pattern under RICO, they may not be sufficient. Id. at 3284 n.14. The Court quoted at length from RICO's legislative history, which indicates that RICO requires not only more than one "racketeering activity," but also the threat of continuing activity. "The target of [RICO]," the Senate Report explained, "is . . . not ...