The opinion of the court was delivered by: Milton I. Shadur Senior United States District Judge
MEMORANDUM OPINION AND ORDER*fn1
In response to the proposal of plaintiff Victor Santana ("Santana") to file an amendment to replace his prior First Amended Complaint ("FAC") with a Second Amended Complaint ("SAC") that repleads a civil RICO claim under 18 U.S.C. §1964(c) as its Count V, three sets of defendants have filed separate responses challenging the RICO claim. Santana's counsel has responded with a highly repetitive 31-page memorandum, apparently feeling the need to make the same points again and again--both out of seeming frustration and in the understandable desire to persuade this Court that defendants' attacks do not withstand analysis.
Santana's memorandum begins with a statement of facts drawn from the proposed Count V. Because it is a straightforward summary of the allegations there, a copy of that statement is attached as Ex. 1 to this opinion. It is to that statement that the requisite analysis must be applied.
To that end, whether or not this Court has guessed correctly as to the motivation for Santana's oversized memorandum, that memorandum has unquestionably been successful. It has demonstrated persuasively that defense counsel have to know better--or at least that they should. It is clear that defendants' positions have seriously mischaracterized the rules of federal pleading in general and the rules of civil RICO pleading in particular.
To begin with the latter, it is flat-out wrong for defense counsel to universalize RICO pleading as though it were fully governed by the standard of Fed. R. Civ. P. ("Rule") 9(b)--that is, as always requiring that the circumstances of defendants' alleged wrongdoing be pleaded with particularity. To be sure, where the predicate acts that form the gravamen of a civil RICO claim are themselves fraudulent--say under the rubrics of mail fraud (18 U.S.C. §1341) or wire fraud (18 U.S.C. §1343)-- the more demanding standard of Rule 9(b) is brought into play. But where any of the predicate acts referred to in 18 U.S.C. §1961(1) are not themselves fraud-based charges (and there are plenty of those), the Supreme Court's unanimous decisions in Leatherman v. Tarrant County Narcotics Intelligence & Coordination Unit, 507 U.S. 163, 168-69 (1993) and Swierkiewicz v. Sorema N.A., 534 U.S. 506, 512-13 (2002) are still applicable to reject any requirement of a heightened fact pleading test for the sufficiency of a complaint's allegations (see, among the numerous cases confirming that proposition, Estate of Sims v. County of Bureau, 506 F.3d 509, 514 (7th Cir. 2007)).
Even where fraud charges are involved (whether under the RICO rubric or otherwise), one other aspect of the pleading requirements of Rule 9(b) bears mention. That has to do with the often-repeated newspaper-lead-paragraph approach first voiced in DiLeo v. Ernst & Young, 901 F.2d 624, 527 (7th Cir. 1990). That prescription really does not fit where the charged fraudulent conduct (whether RICO-violative or otherwise) is an entire pattern of activity over a period of time. DiLeo's formulation is not a one-size-fits-all pleading recipe. In situations such as those alleged in the proposed Count V, heed must be given to an important part of the Rule 9(b) language that is typically given little attention: its directive that what must be stated with particularity are "the circumstances constituting fraud," rather than a laundry-list recital itemizing the particulars of each individual fraudulent statement. That "circumstances" requirement is well satisfied by the type of allegations that are set out in Count V, rather than the detailed evidentiary pleading that defendants would demand.
Nor is the distortion of RICO pleading principles the only attempted manipulation of doctrine on the part of defense counsel. They also engage in revisionist transmutation by attempting to turn the Twombly-Iqbal pairing into a judicial command to plead evidence.
That is a position our own Court of Appeals has been at pains to reject on a repeated basis. Indeed, to single out just a few of its opinions such as the thoughtful discussion in Vincent v. City Colleges of Chicago, 485 F.3d 919, 923-24 (7th Cir. 2007)(issued just before Twombly) and the post-Twombly expositions in Tamayo v. Blagojevich, 526 F.3d 1074, 1082-83 (7th Cir. 2008) and Bissessur v. Ind. Univ. Bd. of Trustees, 581 F.3d 599, 602-03 (7th Cir. 2009), all of which Santana's counsel cite in their memorandum, would seriously understate our Court of Appeals' repeated emphasis on the principle that the Twombly- Iqbal duo have not inaugurated an era of evidentiary pleading.
Accordingly, the defense motions targeting SAC Count V are denied. Defendants are ordered to answer all portions of the SAC that have not been covered by their previously-filed answers to the FAC on or before October 27, and the case ...