employees acting at his direction, "Shouten, or other Wenco
employees acting at his direction, and Wenco" entered into a
scheme to have Farberware buy a controller for a CNC computer.
Allegedly, on or about February 11, 1988, Wenco purchased the
controller from Groben "through an actual or fictitious entity
owned or controlled by Groben and/or David Groben called
Adirondack Machinery Sales ("Adirondack")." Amended Complaint
¶ 53(d). Plaintiff alleges the mailing of an invoice by
Adirondack to Wenco on or about February 11, and the mailing of
an invoice from Wenco to Farberware on or about February 12,
Plaintiff also alleges that in November 1988, Shouten or
other Wenco employees used the telephone and mails to arrange
the purchase by Farberware from Wenco of a digital rollfeed
for $50,827, allegedly twice its value. Plaintiff alleges the
mailing of a purchase order confirmation by Groben to Shouten
on or about November 1, 1988. Id. ¶ 53(d)(i).
Plaintiff further alleges that "on numerous occasions in
1987 and 1988" Groben and Shouten arranged for Wenco to
purchase goods from Groben through fictitious companies and
resell them to Farberware "irrespective of whether Farberware
had any need for such items and often at inflated prices."
Id. ¶ 53(d)(ii). Plaintiff alleges that the goods never left
Groben's office. Plaintiff also alleges similar purported
purchases by Wenco from non-moving defendant Marvin E. (a/k/a
George) Louramore ("Louramore"). Plaintiff alleges use of the
mails and telephone in connection with these purchases, and
alleges the mailing of invoices by Groben to Wenco on at least
eight specific dates between December 2, 1987, and October 12,
1988. Plaintiff also alleges the mailing of purchase orders by
Farberware on or about the same dates, as well as the mailing
of checks by Wenco to Groben's fictitious companies and to
As set forth above, these allegations are pled in
considerable detail, which the Court finds to be sufficient
under Rule 9(b).
B. Sufficiency Under Rule 12(b)(6)
The Court will address the sufficiency under Federal Rule of
Civil Procedure 12(b)(6) of only those claims that have
survived defendants' Rule 9(b) motions.
"The court's function on a Rule 12(b)(6) motion is not to
weigh the evidence that might be presented at a trial but
merely to determine whether the complaint itself is legally
sufficient." Festa v. Local 3 International Brotherhood of
Electrical Workers, 905 F.2d 35, 37 (2d Cir. 1990); see also
Ryder Energy Distribution Corp. v. Merrill Lynch Commodities,
Inc., 748 F.2d 774, 779 (2d Cir. 1984) ("The function of a
motion to dismiss `is merely to assess the legal feasibility of
the complaint, not to assay the weight of the evidence which
might be offered in support thereof.'" (quoting Geisler v.
Petrocelli, 616 F.2d 636, 639 (2d Cir. 1980))).
Thus, a motion to dismiss must be denied "unless it appears
beyond a doubt that the plaintiff can prove no set of facts in
support of his claim which would entitle him to relief."
Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40
L.Ed.2d 90 (1974) (citing Conley v. Gibson, 355 U.S. 41, 45-46,
78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957)); see also Morales v. New
York State Dep't of Corrections, 842 F.2d 27, 30 (2d Cir.
1988). In deciding a motion to dismiss, the Court must limit
its analysis to the four corners of the complaint,*fn3 see
Kopec v. Coughlin, 922 F.2d 152, 154-55 (2d Cir. 1991), and
must accept the plaintiff's allegations of fact as true,
together with such reasonable inferences as may be drawn in his
favor. Papasan v. Allain, 478 U.S. 265, 283, 106 S.Ct. 2932,
2943, 92 L.Ed.2d 209 (1986); Murray v. Milford, 380 F.2d 468,
470 (2d Cir. 1967); Hill v. Sullivan, 125 F.R.D. 86, 90
(S.D.N.Y. 1989) ("[A]ll allegations in plaintiffs' amended
complaint must be accepted as true and
liberally construed."); see also Scheuer, supra, 416 U.S. at
236, 94 S.Ct. at 1686. Federal Rule of Civil Procedure 8(a)
requires only a "`short and plain statement of the claim' that
will give the defendant fair notice of what plaintiff's claim
is and the ground upon which it rests." Conley, supra, 355 U.S.
at 47, 78 S.Ct. at 103 (quoting Fed.R.Civ.P. 8(a)).
Section 1964(c) of Title 18 of the United States Code
provides a civil remedy for "[a]ny person injured in his
business or property by reason of a violation of section 1962
of this chapter. . . ." 18 U.S.C. § 1964(c). To state a claim
for violation of § 1962(c), under which these claims are
brought, a plaintiff must allege "(1) that the defendant (2)
through the commission of two or more acts (3) constituting a
`pattern' (4) of `racketeering activity' (5) . . . participates
in (6) an `enterprise' (7) the activities of which affect
interstate or foreign commerce." Moss v. Morgan Stanley, Inc.,
719 F.2d 5, 17 (2d Cir. 1983), cert. denied, 465 U.S. 1025, 104
S.Ct. 1280, 79 L.Ed.2d 684 (1984); see also Clapp v. Greene,
743 F. Supp. 273, 277 (S.D.N.Y. 1990) (quoting Moss,
supra, 719 F.2d at 17); Wanamaker v. Columbian Rope Co.,
740 F. Supp. 127, 139 n. 5 (N.D.N.Y. 1990) (same).
1. Sufficiency of the RICO
To state a claim under the RICO statute, a plaintiff must
allege a "pattern" of racketeering activity, which is defined
by the statute as two or more acts of racketeering activity
within a ten-year period. 18 U.S.C. § 1961(5). Determining
whether a "pattern" exists within the meaning of the RICO
statute is not, however, as simple as mechanically applying the
definition provided by the statute. Rather, as the Supreme
Court noted in Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 496
n. 14, 105 S.Ct. 3275, 3285 n. 14, 87 L.Ed.2d 346 (1985),
"while two acts are necessary, they may not be sufficient."
More recently, the Supreme Court further expounded upon the
pattern requirement in RICO cases, holding that "RICO's
legislative history reveals Congress' intent that to prove a
pattern of racketeering activity a plaintiff or prosecutor must
show that the racketeering predicates are related, and that
they amount to or pose a threat of continued criminal
activity." H.J., Inc. v. Northwestern Bell Telephone Co.,
492 U.S. 229, 239, 109 S.Ct. 2893, 2900, 106 L.Ed.2d 195 (1989)
(emphasis in original); see also Beauford v. Helmsley,
865 F.2d 1386 (2d Cir.) (en banc), vacated, 492 U.S. 914, 109 S.Ct.
3236, 106 L.Ed.2d 584, and adhered to, 893 F.2d 1433 (2d Cir.),
cert. denied, ___ U.S. ___, 110 S.Ct. 539, 107 L.Ed.2d 537
(1989). There are thus two distinct, although overlapping,
constituents of RICO's pattern requirement.
The Supreme Court in H.J., Inc. held that, as to the
"relatedness" of the predicate acts, "[c]riminal conduct forms
a pattern if it embraces criminal acts that 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." H.J., Inc.,
supra, 492 U.S. at 240, 109 S.Ct. at 2901; see also United
States v. Indelicato, 865 F.2d 1370, 1382 (2d Cir.) ("An
interrelationship between acts, suggesting the existence of a
pattern, may be established in a number of ways. These include
proof of their temporal proximity, or common goals, or
similarity of methods, or repetitions."), cert. denied,
491 U.S. 907, 109 S.Ct. 3192, 105 L.Ed.2d 700 (1989); Friedman v.
Arizona World Nurseries Limited Partnership, 730 F. Supp. 521,
547-48 (S.D.N.Y. 1990). "[T]he involvement of similar
participants is sufficient to demonstrate a relationship among
the predicate acts." United States v. Simmons, 923 F.2d 934,
951 (2d Cir.), cert. denied, ___ U.S. ___, 111 S.Ct.
2018, 114 L.Ed.2d 104 (1991).
In the instant case, the moving defendants have addressed
their challenges principally to plaintiff's pleading of
continuity. With respect to the "continuity" element of the
test for a RICO "pattern," the Supreme Court has held that
"[c]ontinuity" is both a closed- and open-ended
concept, referring either to a closed period of
repeated conduct, or to past conduct that by its
into the future with a threat of repetition. . .
. A party alleging a RICO violation may
demonstrate continuity over a closed period by
proving a series of related predicates extending
over a substantial period of time. Predicate acts
extending over a few weeks or months and
threatening no future criminal conduct do not
satisfy this requirement: Congress was concerned
in RICO with long-term criminal conduct.
H.J. Inc., supra, 492 U.S. at 241-42, 109 S.Ct. at 2902; see
also Azurite Corp. v. Amster & Co.,