state law provisions invoked by Oak is of that ilk.
Finally, Oak alleges violations of several federal criminal
statutes, including: the federal continuing financial crimes
enterprise statute, 18 U.S.C. § 225; the federal anti-Klan
conspiracy statute, 18 U.S.C. § 241; the federal stolen property
statutes, 18 U.S.C. § 2314, 2315; the federal interference with
interstate commerce statute, 18 U.S.C. § 1951; the federal
racketeering in interstate commerce statute, 18 U.S.C. § 1952;
the federal embezzlement and theft in interstate commerce
statute, 18 U.S.C. § 659; and the federal money laundering and
money transactions with respect to illegally derived property
statutes, 18 U.S.C. § 1956, 1957. With the exception of the
stolen property statutes, Oak does not dispute Defendants'
argument that none of these provisions is relevant to this case.
Because, as discussed below, Oak has failed to allege a RICO
pattern, I need not reach the question of whether the stolen
property statute applies to this case.
Oak's allegations are insufficient for closed-ended continuity.
Although Oak alleges that the scheme began in 1997 or
thereabouts, the earliest predicate act alleged occurred on
January 9, 1998, when We Can sent a fax to Oak asserting that Oak
owed We Can a sum of money for PREBC. (Cplt. ¶ 1525.) Apart from
the brevity of the enterprise, Oak has alleged none of the other
countervailing factors that might point to closed-ended
continuity; Oak alleges the existence of only one scheme, Oak was
the only victim of that scheme, and the scheme was devised for
only one purpose. For these reasons, I conclude that Oak has
failed to sufficiently allege closed-ended continuity. See,
e.g., Schnell v. Conseco, Inc., 43 F. Supp.2d 438 (S.D.N.Y. 1999)
(allegations of predicate acts over period of 23 months
consisting entirely of mail and wire fraud and directed toward a
single goal not sufficient for closed-ended continuity).
(b) Open-Ended Continuity
To demonstrate open-ended continuity, a plaintiff need not show
that the predicates extended over a substantial period of time,
but must show "that there was a threat of continuing criminal
activity beyond the period during which the predicate acts were
performed." Cofacredit, 187 F.3d at 242 (citation omitted). The
determinative factors in the open-ended continuity analysis are
the nature of the RICO enterprise and the predicate acts. Id.
(citation omitted). Specifically, "[w]here the enterprise is
engaged primarily in racketeering activity, and the predicate
acts are inherently unlawful, there is a threat of continued
criminal activity, and thus open-ended continuity." Id. (citing
H.J., Inc., 492 U.S. at 242-43, 109 S.Ct. 2893). Where,
however, the enterprise conducts primarily a legitimate business,
"there must be some evidence from which it may be inferred that
the predicate acts were the regular way of operating that
business, or that the nature of the predicate acts themselves
implies a threat of continued criminal activity." Id.
Oak argues only that the latter situation is present in this
case — i.e., that the nature of the predicate acts perpetrated by
Defendants carries a threat that the container-redemption scheme
will continue indefinitely into the future. For the very reasons
discussed in connection with Oak's failure to allege proximate
cause, however, I find that no such threat exists on the facts
alleged. Oak is admittedly aware of the scheme, and is in a
position to prevent further illegal redemption. Indeed, it
appears from the complaint that Oak has done so by terminating
its dealings with several of the Defendants: Oak does not allege
any business with We Can after We Can closed its upper Manhattan
redemption center in June 1998, and the complaint alleges no
movements of bottles or cans from TOMRA's facility during the
three months prior to the filing of the complaint.
In this respect, the case Oak relies upon, Beauford v.
Helmsley, 865 F.2d 1386 (2d
Cir.) (en banc), vacated and remanded, 492 U.S. 914, 109 S.Ct.
3236, 106 L.Ed.2d 584, original decision adhered to,
893 F.2d 1433, cert. denied, 493 U.S. 992, 110 S.Ct. 539, 107 L.Ed.2d
537 (1989), is readily distinguishable. In that case, the
plaintiff's RICO complaint alleged that the defendants, partners
in a real estate business sponsoring the conversion of an
apartment complex into condominiums, the business's sales agent,
an engineering firm and an individual engineer made a number of
material misrepresentations to current or potential tenants as to
the condition of the complex. The Second Circuit reversed
dismissal of the case, concluding that the plaintiff had
adequately plead open-ended continuity, on the ground that the
predicate acts alleged — roughly 8,000 fraudulent mailings to
tenants of the complex or individuals potentially interested in
purchasing the apartments — were likely to continue, because many
of the apartments remained unsold. See id. at 1392.
In the present case, Oak, unlike the victims of the mail fraud
scheme in Beauford, is aware not only of the existence of the
scheme, but the manner in which it was carried out. It is also
the sole victim of the alleged enterprise. The prospect of
ongoing racketeering activity is therefore not present. Oak may
not argue that open-ended continuity exists because it has
decided to allow the scheme to continue.
For the above reasons, I conclude that Oak has failed to allege
a pattern of RICO activity. Oak's substantive RICO claims under §
1962(c) are therefore dismissed.
(3) Remaining Arguments — Fraud and RICO Enterprise
The Defendants further argue that Oak has failed to allege (1)
the predicate acts of mail and wire fraud with requisite
particularity under Fed.R.Civ.P. 9(b), and (2) the existence of a