(7th Cir. 1973)). The requirement that the RICO enterprise affect interstate commerce is separate from the same requirement listed in § 1961(1). Therefore, allegations of wire communications that were solely intrastate in character, even if they are pled as predicate acts in conjunction with an enterprise alleged to affect interstate commerce, are insufficient to plead wire fraud. Consequently those portions of the Complaint that use wire fraud as a predicate offense for the RICO claim are dismissed.
Count III alleges a cause of action against Whitehall under a theory of respondeat superior for purported violations of § 1962(c) of RICO through a pattern of mail and wire fraud by Whitehall's agents and employees. The defendants argue that respondeat superior is inapplicable to RICO cases. Vicarious liability in civil RICO cases is appropriate "when 1) the corporation has derived some benefit from the RICO violation and 2) imposing vicarious liability is not inconsistent with the intent of Congress." Liquid Air Corp. v. Rogers, 834 F.2d 1297, 1306 (7th Cir. 1987), cert. denied, 492 U.S. 917, 106 L. Ed. 2d 588, 109 S. Ct. 3241 (1989). Congressional intent with respect to § 1962(c) suggests that vicarious liability is not appropriate where a finding of such liability "would require the 'person' and 'enterprise' to be the same entity." Id. at 1306-1307.
In Count III, plaintiff alleges that Weber is the "enterprise," that Mulder, and Whitehall's other officers, agents, and employees are the "person(s)," and that Whitehall is responsible under a theory of respondeat superior for the RICO violations of its officers, agents, and employees. In Count III, plaintiff fails to state a cause of action, because he does not properly plead the underlying RICO claim for the same reasons that the RICO claim in Count I was dismissed (i.e., there are no allegations that Whitehall's officers, agents, and employees participated in the operation or management of Weber). Substituting Whitehall for Weber as the enterprise in Count III would not revive the claim, because Whitehall then would be both the "person" and the "enterprise." This kind of allegation would therefore violate the second prong of the Liquid Air test, as it is applied to respondeat superior claims based on purported violations of § 1962(c).
COUNTS VIII and IX
Count VIII alleges a cause of action against Whitehall and Mulder under the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1 et seq. (Supp. 1993). Count IX alleges a cause of action against Whitehall and Mulder for fraud under Illinois common law.
The defendants first argument against Counts VIII and IX--that plaintiff has failed to plead fraud with the particularity required by Federal Rule of Civil Procedure 9(b)--fails for the same reason here as it did when made against Counts I and II (i.e., the plaintiff has pled all the facts that were within his possession).
Next, the defendants argue that the plaintiff failed to plead all the elements of statutory and common law fraud. With regard to the statutory fraud claim, the defendants argue that the plaintiff failed to allege that: (a) the statements made by the defendants were made without regard as to the defendants' knowledge or lack of knowledge as to the untrue statements; (b) that the statements were made for the purpose of inducing reliance on the part of the plaintiff or members of the putative class; and (c) the plaintiff or members of the putative class relied on the untrue statements.
With regard to the common law fraud claim, the defendants argue that the plaintiff failed to allege that: (a) the defendants knew or believed that the statements made ware untrue; (b) the plaintiff or any of the putative class members had a right to rely on the defendants' statements; and (c) that the statements were made by the defendants for the purpose of inducing the plaintiff or any of the putative class members to act.
The objections defendants raise to plaintiff's pleading of common law and statutory fraud have been addressed and rejected as meritless by the Court in conjunction with defendant's objections to plaintiff's pleading of mail fraud. The only claim that has not been previously addressed (i.e., that plaintiff failed to allege that the defendants' statements were made without regard as to the defendants' knowledge or lack of knowledge as to the falsity of these statements), imputes an element to the offense that does not exist under the Illinois Consumer Fraud and Deceptive Business Practices Act. The element that the defendants are referring to requires an allegation of a statement "that was untrue, without regard to the defendant's knowledge or lack thereof of such untruth."
See Roche v. Fireside Chrysler-Plymouth, Mazda, Inc., 235 Ill. App. 3d 70, 79, 600 N.E.2d 1218, 1227, 175 Ill. Dec. 760 (2d Dist. 1992). A statutory fraud claim only requires the plaintiff to establish that the statements made were untrue. Plaintiff has satisfied this pleading requirement. Therefore, the defendants' Motion to Dismiss the plaintiffs' causes of action in Counts VIII and IX under the Illinois Consumer Fraud and Deceptive Business Practices Act and under Illinois common law fraud is denied.
C. Punitive Damages
Finally, the defendants argue that plaintiff's request for punitive damages under Counts VIII and IX should be stricken pursuant to Rule 12(f), because there is no evidence that the defendants acted willfully, with actual malice, or with the intention of cheating the plaintiff and the putative class members with such utter indifference as to indicate a wanton disregard for their rights. Nor is there any evidence that punitive damages are appropriate. Rule 12(f) authorizes the Court to strike "from any pleading any insufficient defense or any redundant, immaterial, impertinent, or scandalous matter." The ground cited by the defendants for invoking Rule 12(f)--the lack of evidence in the Complaint to support a theory of recovery--does not fit into any category of material the Court is authorized to strike under 12(f). Moreover, at this stage of the process the Court is looking at the Complaint to determine whether the plaintiff can recover, assuming his allegations are supported by the evidence, and is not looking to determine whether the evidence presented supports those allegations. Therefore, the defendants' Motion to Strike plaintiff's request for punitive damages under Counts VII and IX is denied.
For the above-stated reasons, this Court hereby grants defendants' Motion to Dismiss Counts I and III. The Clerk of the Court is therefore directed to dismiss Counts I and III with prejudice. Defendants' Motion to Dismiss Counts II, VIII, IX and X is denied. Defendants' Motion to Strike also is denied.
After careful review of the relevant pleadings, this Court also hereby grants Plaintiffs' pending Motion to Compel. The Court finds that the limited privacy interests involved in the disputed invoices can be protected through the entry of an appropriate protective order. The Court therefore orders that the defendants turn over all documents in its possession which are responsive to plaintiff's Motion to Compel by April 28, 1994.
Plaintiff is hereby ordered to file a Motion for Class Certification, and supporting brief, by June 1, 1995. This case is set for status on June 2, 1995 at 9:00 a.m.
United States District Judge
March 24, 1995.