One of the most difficult aspects of pursuing a Civil RICO case is proving that the defendant engaged in a “pattern of racketeering activity.” While Civil RICO provides plaintiffs with the opportunity to seek treble damages and attorney’s fees for harms caused by racketeering, establishing the necessary elements—particularly the pattern requirement—can be a significant hurdle. This article examines the concept of a “pattern” in Civil RICO litigation, the legal standards involved, and the challenges plaintiffs face in meeting this requirement.

What Constitutes a Pattern of Racketeering?

Under Civil RICO, a plaintiff must show that the defendant engaged in at least two predicate acts of racketeering activity within a 10-year period. However, merely committing two predicate acts is not sufficient to establish a pattern. Courts require that the predicate acts be related and amount to or pose a threat of continued criminal activity.

The U.S. Supreme Court clarified this requirement in H.J. Inc. v. Northwestern Bell Telephone Co. (1989), ruling that a “pattern” of racketeering activity requires both relatedness and continuity.

• Relatedness means that the predicate acts must have a similar purpose, result, victim, or method of commission.
• Continuity can be established in two ways:
  • Closed-ended continuity, where the racketeering acts occurred over a substantial period of time.
  • Open-ended continuity, where the acts pose a threat of continuing criminal conduct into the future.

Challenges in Proving a Pattern

One of the primary challenges plaintiffs face is proving continuity, particularly in cases involving white-collar crime or corporate disputes. Courts have generally held that isolated or sporadic acts do not constitute a pattern of racketeering, even if multiple predicate acts are involved. This creates a higher burden for plaintiffs to show that the defendant’s conduct was part of a long-term or ongoing scheme.

For example, if a defendant engaged in fraudulent activity for a short period of time, courts may rule that there is no closed-ended continuity. Conversely, in cases where the criminal activity has ceased, plaintiffs may struggle to prove open-ended continuity, as they must demonstrate that the criminal behavior will likely continue in the future.

In business-related Civil RICO cases, defendants frequently argue that the plaintiff has failed to show a pattern of racketeering. They may contend that the alleged misconduct was an isolated incident or part of a legitimate business dispute, rather than an ongoing criminal enterprise.

Key Cases and Legal Precedents

Several key cases have shaped the interpretation of the “pattern” requirement in Civil RICO cases. In Sedima, S.P.R.L. v. Imrex Co., the U.S. Supreme Court emphasized that a pattern of racketeering activity requires continuity and relatedness. Courts have continued to refine this standard in subsequent cases, with varying interpretations of what qualifies as sufficient continuity.

For instance, in Cofacredit, S.A. v. Windsor Plumbing Supply Co., Inc., the Second Circuit Court of Appeals held that racketeering acts spanning a 16-month period could satisfy the closed-ended continuity requirement. However, other courts have ruled that similar timeframes were insufficient, depending on the nature of the alleged misconduct and the number of predicate acts involved.

Practical Implications for Litigants

The difficulty in proving a pattern of racketeering means that Civil RICO plaintiffs must be meticulous in building their cases. It is not enough to show that the defendant committed multiple crimes; plaintiffs must present a cohesive narrative that links the predicate acts into a larger scheme of ongoing criminal behavior.

Defendants, on the other hand, often focus on breaking this link, arguing that the alleged conduct does not meet the stringent requirements for continuity or relatedness. The complexity of proving a pattern has led to numerous Civil RICO claims being dismissed at early stages of litigation.

Conclusion

The pattern requirement is one of the most challenging aspects of Civil RICO litigation. Plaintiffs must carefully assess whether the facts of their case meet the high standard for establishing a pattern of racketeering, and defendants often exploit the complexity of this requirement to seek dismissal of claims. As courts continue to refine the definition of a “pattern” in Civil RICO cases, litigants must stay abreast of evolving legal standards to build successful cases or defenses.

Next Steps for Businesses

If you have an issue related to civil litigation that may involve Civil RICO or any other issues involving complex legal matters, contact Possinger Law Group.

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About Possinger Law Group, PLLC

Founded in 2001, Possinger Law Group is a boutique law firm dedicated to elite levels of service to small and medium-sized businesses and the individuals that own them. When faced with serious problems, clients have reached out to Possinger Law Group to be a trusted advisor and advocate to be a guide through high conflict situations and complex legal challenges. In litigation matters, Possinger Law Group works with its clients to effectively resolve disputes, and when necessary, by being fiercely aggressive in litigation.

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