Summary
dismissing claims against defendant who did not join in other defendants' motion to dismiss because "precisely the same points control the claims against it"
Summary of this case from Salim v. Mobile Telesystems PJSCOpinion
01 Civ. 4023 (LAK)
December 20, 2001
ORDER
The first amended complaint in this action alleges three claims for relief. The first is grounded in the RICO statute, specifically 18 U.S.C. § 1962(c) and (d). The second and third are brought under state law. Defendants Afternic.com and Register.com move to dismiss the RICO claims for failure to state a claim upon which relief may be granted and the state law claims for lack of subject matter jurisdiction.
The RICO Claims
The RICO claims are that the defendants conducted and conspired to conduct the affairs of a putative enterprise through a pattern of racketeering activity. See, e.g., Cpt. ¶¶ 24, 28. The alleged enterprise is said to have consisted of the three defendants, Afternic.com, Register.com and Unodotcom, which are alleged to have been "a group of individuals associated in fact" the purpose of which was for the members to "subscribe to various criminal activities . . ." Id. ¶ 27.
This conclusory assertion simply is insufficient. As this Court explained in Pavlov v. Bank of New York Co., 135 F. Supp.2d 426, 429-30 (S.D.N.Y. 2001):
"While RICO applies equally to legitimate and illegitimate groups, it is well in construing the term `enterprise' to remember the statute's overriding purpose — to create a weapon useful in combating organized crime. Congress quite plainly had in mind organizations with characteristics similar to those that have been documented in many organized crime trials and become the stuff of popular culture in movies, books, and even a current television series. Thus, while an `enterprise' need not exhibit all of the characteristics of familiar criminal organizations, the Supreme Court long ago held that a RICO enterprise is a `group of persons associated together for a common purpose of engaging in a course of conduct' that `is proved by evidence of an ongoing organization, formal or informal, and by evidence that the various associates function as a continuing unit.' In other words, it has a `hierarchy, organization and activities' and it `must exhibit structural continuity' which `exists where there is an organizational pattern or system of authority that provides a mechanism for directing the group's affairs on a continuing, rather than an ad hoc, basis.'
"Implicit in these statements is a further proposition: that there must be more to an `enterprise than simply an aggregation of predicate acts of racketeering activity. In other words, an `enterprise' must exhibit more structure than is inherent simply in the alleged pattern or racketeering activity. It `"cannot simply be the undertaking of the acts of racketeering, neither can it be the minimal association which surrounds these acts."'"
This requirement plainly is not satisfied here.
The State Law Claims
Plaintiff asserts that this Court would have subject matter jurisdiction on the basis of diversity of citizenship even if the RICO claims were dismissed. But it ignores the facts that one of the defendants is a limited partnership and that the complaint fails to allege the citizenship of any of the partners. (Cpt. ¶ 6) As a limited partnership is a citizen of every state of which any of its partners, limited or general, is a citizen, plaintiff has failed to allege complete diversity of citizenship. Carden v. Arkoma Associates, 494 U.S. 185 (1990); The Cats Co. v. TIG Insurance Co., No. 01 civ. 5967 (LAK), 2001 WL 747283 (S.D.N.Y. July 3, 2001).
Conclusion
The RICO claims are dismissed for failure to state a claim upon which relief may be granted. The state law claims are dismissed for lack of subject matter jurisdiction. As plaintiff previously has been granted leave to amend to cure its deficient enterprise allegation, and as no request for further leave to amend has been made, the dismissal of the RICO claims is with prejudice. Although Unodotcom evidently has not been served and did not join in this motion, this order dismisses as to it on the same grounds, as precisely the same points control the claims against it. The Clerk shall close the case.
SO ORDERED.