The PK Defendants argue that the First Claim for Relief is fatally deficient because the same persons and entities named as Defendants are also claimed to comprise the "enterprise." CitingB.F. Hirsch v. Enright Refining Co., Inc., 751 F.2d 628 (3d Cir. 1984), and Metcalf v. PaineWebber, Inc., 886 F.Supp. 503 (W.D. Pa. 1995), aff'd, 79 F.3d 1138 (3d Cir. 1996) (table), the PK Defendants argue that the inclusion of named Defendants as constituent members of the alleged enterprise warrant dismissal of the First Claim for Relief.
The plaintiff must assert that the person and the enterprise are separate and distinct. Lightning Lube, 4 F.3d at 1191;Metcalf v. Painewebber Inc., 886 F. Supp. 503, 511 (W.D.Pa. 1995),aff'd, 79 F.3d 1138 (3d Cir. 1996); Dugan, 876 F. Supp. at 719. A corporation cannot be held liable under section 1962(c) unless it engages in activity as a "person" in a separate enterprise.
However, even after its decision in Jaguar Cars, the Third Circuit affirmed a case holding that a corporation is nor distinct from an enterprise that included its subsidiaries and affiliates. See Metcalf v. PaineWebber, Inc., 886 F. Supp. 503, 513-14 n. 12 (W.D.Pa. 1995) (construing Jaguar Cars as limited to distinctiveness issues related to corporate officers and employees), aff'd without op., 79 F.3d 1138 (3d Cir. 1996) (table); see also Brannon v. Boatmen's Bancshares, Inc., 952 F. Supp. 1478. 1486-57 (W.D.Okla. 1997) (construing Jaguar Cars similarly and noting that Metcalf; 886 F. Supp. at 513-14 refused to extend the holding in Jaguar Cars to corporate entities). The Third Circuit affirmed the district court's decision in Metcalf.
See Discon, 93 F.3d at 1063-64; Odishelidze v. Aetna Life Casualty Co., 853 F.2d 21, 23-24 (1st Cir. 1988); Lorenz v. CSX Corp., 1 F.3d 1406, 1411-1412 (3d Cir. 1993); Brittingham v. Mobil Corp., 943 F.2d 297, 300-301 (3d Cir. 1991); NCNB Nat'l Bank v. Tiller, 814 F.2d 931, 936 (4th Cir. 1987), overruled on other grounds, Busby v. Crown Supply, Inc., 896 F.2d 833, 840-42 (4th Cir. 1990) ( en banc); Metcalf v. Paine-Webber Inc., 886 F. Supp. 503 (W.D.Pa. 1995), aff'd, 79 F.3d 1138 (3d Cir. 1996) (table).
The analogy fails, however, for the simple reason that corporations can act only through their employees and agents. See Metcalf v. PaineWebber Inc., 886 F. Supp. 503, 514 n. 12 (W.D. Pa. 1995) (concluding that the holding in Jaguar Cars cannot be extended to corporate defendants), aff'd mem., 79 F.3d 1138 (3d Cir. 1996). As the Supreme Court has held, plaintiffs must allege that the "defendant conduct[s] or participat[es] in the conduct of the `enterprise's affairs,' not just [its] own affairs."
Instead, the issue is whether defendants participated in the conduct of a distinct RICO “enterprise,” or merely conducted their own business affairs. Cedric Kushner Promotions, 533 U.S. at 163, 121 S.Ct. 2087; see alsoMetcalf v. PaineWebber Inc., 886 F.Supp. 503, 513–14 (W.D.Pa.1995), aff'd without op.,79 F.3d 1138 (3d Cir.1996) (stating that in order “to satisfy the enterprise requirement, a complaint must include an allegation that the enterprise included some person or entity operating outside of the ... defendants' normal scope of business”).
Such a reading of Jaguar Cars has been rejected by a number of courts and adopted by none. See Brannon v. Boatmen's First Nat'l. Bank of Okla., 153 F.3d 1144, 1148 n. 4 (10th Cir. 1998); Emery v. American General Finance, Inc., 134 F.3d 1321, 1324-25 (7th Cir. 1998); Dow Chem Co. v. Exxon Corp., 30 F. Supp.2d 673, 700-01 (D.Del. 1998); Eli Lilly and Company v. Roussel Corp., 23 F. Supp.2d 460, 488 n. 43 (D.N.J. 1998); Metcalf v. PaineWebber Inc., 886 F. Supp. 503, 513-14 n. 12 (W.D.Pa. 1995), aff'd, 79 F.3d 1138 (3d Cir. 1996). Jaguar Cars stands for the statutorily consistent and unremarkable proposition that an insider who controls a corporate entity and conducts its affairs through a pattern of racketeering activity may be liable as a "person" under 1962(c).
The decisions cited by defendants are in accord. See Metcalf v. Paine Webber Inc., 886 F. Supp. 503, 512-14 (W.D.Pa. 1995) (to satisfy distinctiveness requirement, "a complaint must include an allegation that the enterprise included some person or entity operating outside of the defendant's or defendants' normal scope of business"), aff'd, 79 F.3d 1138 (3rd Cir. 1996); see also Dow Chemical Co. v. Exxon Corp., 30 F. Supp.2d 673, 699-702 (D.Del. 1998). Caldwell v. KFC Corn., 958 F. Supp. 962 (D.N.J. 1997), cited in defendants' reply brief, discusses vicarious liability for a common-law battery claim and makes no mention of the RICO statute.
The decisions cited by defendants are in accord. SeeMetcalf v.PaineWebber Inc. , 886 F. Supp. 503, 512-14 (W.D.Pa. 1995) (to satisfy distinctiveness requirement, "a complaint must include an allegation that the enterprise included some person or entity operating outside of the defendant's or defendants' normal scope of business"), aff'd, 79 F.3d 1138 (3rd Cir. 1996); see also Dow Chemical Co. v. Exxon Corp., 30 F. Supp.2d 673, 699-702 (D.Del. 1998). Caldwell v. KFC Corp., 958 F. Supp. 962 (D.N.J. 1997), cited in defendants' reply brief, discusses vicarious liability for a common-law battery claim and makes no mention of the RICO statute.
An enterprise which consists of an association-in-fact of Aetna with its various plans — i.e. a parent and its subsidiary corporations — cannot be a valid RICO enterprise where the defendants are not distinct from the enterprise. SeeMetcalf v. PaineWebber Inc., 886 F. Supp. 503, 513-14 (W.D.Pa. 1995), aff'd, 79 F.3d 1138 (3d Cir. 1996). Plaintiffs' second purported enterprise consists of a series of associations-in-fact of Aetna and its subsidiaries with the various doctors and IPAs associated with the plans.