not persuade this court. Plaintiffs do specify that defendants defrauded Humane by misleading Humane as to the purpose of UFF and thus being able to obtain money from Humane for the private purposes of UFF on July 30, 1986 and on other occasions. Amended Complaint paras. 27-37. Plaintiffs also identify an underlying theme of an intentional scheme to use fraudulently obtained Humane funds to harass and harm plaintiffs in their business and especially to deprive plaintiff DeHaven of her employment and interest in FISC. This is certainly an allegation of an "active" scheme. Finally, the detrimental reliance is implicit; it can be inferred from plaintiffs' Amended Complaint that, but for defendant McKay and Stevenson's representations about the purposes of UFF and its tax-exempt (charitable) status, Humane would not have funded defendants' fraudulent purposes.
Defendants also claim that plaintiffs do not make out a claim for extortion, at least under the law they cite. In the District of Columbia, where the parties are all incorporated and where most of the acts took place, a person commits extortion if she "obtains or attempts to obtain the property of another with the other's consent which was induced by wrongful threat of economic injury." District of Columbia Code § 22-3851. Plaintiffs have specified instances where defendants have threatened them with information gained from wiretapping, to deprive them of their property, including attempts to keep them from selling their business, thus depriving them of cash, and attempts to eliminate plaintiff DeHaven's interest in FISC.
Defendants do not contest the adequacy of pleading in regard to the claim that defendant Richard Boyd transported stolen property in interstate commerce; they only contest that this claim alone can be construed as a pattern under RICO, because, they claim, it was really only one single offense even though it occurred over a course of approximately a month. Because this court finds that other predicate acts are present, it is not necessary to determine whether this claim alone would amount to a pattern under RICO. The claims of plaintiffs, if true, would amount a pattern under RICO. Even though the scheme plaintiffs allege could be seen as singular, this does not disqualify an otherwise valid claim for RICO relief under the doctrine announced by the Supreme Court in H.J. Inc. v. Northwestern Bell Telephone Co., supra. The "relationship" requirement is met by the common purpose of harming plaintiffs' business and plaintiff DeHaven's interest in FISC. The "continuity" requirement is met by the fact that the events took place over a number of years, and threatens to extend into the future, and that there are a number of victims of and methods to defendants' predicate acts.
Sufficiency of conspiracy allegations under § 1962 (d).
Defendants contend that the pleadings are insufficient as to § 1962 (d) because they do not allow each defendant to identify their alleged role in the conspiracy. In addition, defendants claim that plaintiffs must state facts to show that all five defendants objectively manifested their assent to the conspiracy. Defendants cite Barlow v. McLeod, 666 F. Supp. 222 (D.C.C. 1986) for the proposition that a RICO conspiracy allegation requires a plaintiff to plead the existence of at least one overt act by a defendant in furtherance of the conspiracy and the assent of each defendant to the conspiracy. This court agrees that plaintiffs must allege at least one overt act in furtherance of the conspiracy for each defendant. Some of the overt acts alleged include defendants McKay and Stevenson's acts misleading Humane so as to establish and fund UFF; defendant Richard Boyd's theft of plaintiffs' mail and transportation of the stolen mail in interstate commerce; and defendant Forrest Boyd's illegal wire intercepting and use of that information to threaten FISC. This court does not agree that plaintiffs must, in their pleadings, allege an act that proves overt assent to the conspiracy. Although Barlow, and the Ohio District Court case upon which it relies, do deal with a civil RICO case at the pleadings stage, see, Barlow, supra; Van Dorn Co., Central States Can Co. Division v. Howington, 623 F. Supp. 1548, 1559 (N.D. Ohio 1985), the cases cited by the Ohio case that discuss this issue, and the cases cited by those cases, are appeals of criminal convictions which are weighing the evidence after a trial. See, United States v. Riccobene, 709 F.2d 214 (3rd Cir. 1983); United States v. Sutherland, 656 F.2d 1181 (5th Cir. 1981); United States v. Elliott, 571 F.2d 880 (5th Cir. 1978). The test for sufficiency of evidence after trial in a criminal case is certainly different than the standard of pleading at a pre-discovery stage of the civil case. Any requirement that plaintiffs allege each defendant's assent to the conspiracy can be met through inference from each defendant's act in furtherance of the conspiracy.
The use of FISC as an enterprise for the purposes of § 1962(a) and (b).
Defendants claim that because they have no control or influence over the affairs of FISC, the counts which predicate RICO liability on § 1962 (a) and (b) must be dismissed. The former subsection prohibits the use of income from racketeering "to use or invest, directly or indirectly, any part of such income, or the proceeds of such income, in acquisition of any interest in . . . any enterprise [engaged in interstate commerce]." Plaintiffs allege that through racketeering activity, defendants received income which they are using to acquire interest in FISC. Simply because defendants are not attempting to buy FISC on the open market does not mean that they are not attempting to acquire an interest. Defendants claim that any attempts by UFF to establish their interest in FISC is based on the transferral by Richard Boyd of his claim in FISC, which predates the alleged racketeering. Plaintiffs counter that the money taken from Humane was used for the consideration paid to Richard Boyd for his assignment of his claim, citing paras. 57-58 of the Amended Complaint. The court finds that these allegations make out a sufficient claim.
Section 1962 (b) prohibits any person, acting "through a pattern of racketeering activity . . . to acquire or maintain, directly or indirectly, any interest in or control of any enterprise which is engaged in [interstate commerce]." It seems clear to the court that plaintiffs' allegations that defendants have used information illegally obtained to threaten plaintiffs to force certain corporate actions is an allegation of an attempt to "control" FISC through a pattern of racketeering, namely extortion.
Plaintiffs' standing to assert a RICO claim.
Finally, defendants have challenged plaintiffs' standing to bring a claim under RICO, arguing that plaintiffs are not harmed in their business or property. Defendants claim that, at most, plaintiffs have alleged an injury to Emily Gleockler of Humane and that their claims of "extensive damages" as a result of the various predicate acts are not specific enough. Plaintiffs do, however, allege that $ 11,399.00 in checks were stolen from them; that mail containing company records and bills was stolen from time to time thus disrupting the orderly and efficient business of FISC; that their business reputation and goodwill have been tarnished by release of information gained in illegal wiretapping; and that a potential sale of the business was frustrated by the defendants. It can be inferred that the sale of the business would have been advantageous. These allegations do amount to sufficient harm to plaintiffs to give them standing to bring this action.
Turning to defendants' arguments that plaintiffs have no standing to bring a claim based on racketeering directed at Humane, this case presents a perfect example of the sort of racketeering injury the absence of which has served in several circuits as grounds for dismissal. The statute, 18 U.S.C. § 1962(a), prohibits "any person who has received any income derived, directly or indirectly, from a pattern of racketeering activity" from using or investing any part of such income "in the acquisition of any interest in, or the establishment or operation of, any enterprise which is engaged in, or the activities of which affect, interstate or foreign commerce." The statute gives litigants standing to sue if they are "injured in [their] business or property by reason of a violation of section 1962. . . ." 18 U.S.C. § 1964(c).
Under the law now adopted by several circuits, but not yet addressed by the Court of Appeals for this Circuit, plaintiffs would be in a better position than Humane to bring a claim based on those allegations, at least under § 1962(a), because they were harmed by the use and investment of the racketeering money, not just the racketeering itself. See Grider v. Texas Oil & Gas Corp., 868 F.2d 1147 (10th Cir. 1989) (plaintiff must be injured by reason of use or investment of racketeering income, not the racketeering itself, to have standing under 18 U.S.C. § 1962(a)); Ouaknine v. MacFarlane, 897 F.2d 75 (2nd Cir. 1990) (same); Rose v. Bartle, 871 F.2d 331 (3rd Cir. 1989) (same). But c.f. Busby v. Crown Supply, Inc., 896 F.2d 833 (4th Cir. 1990) (those harmed by the operation of the racketeering also have standing). No matter which way this split in the circuits is ultimately resolved, plaintiffs here would have standing to complain of the use and investment of racketeering income from the racketeering at Humane to the extent that it affects plaintiffs' business or property.
In conclusion, the court finds that plaintiffs have made out sufficient RICO claims in their Amended Complaint to survive defendants' motion to dismiss, and upon consideration of the foregoing, the court this day shall enter the attached order, denying defendants' motion to dismiss and for partial summary judgment.
Upon consideration of defendants' motion to dismiss and for partial summary judgment, and the opposition and reply memoranda thereto, and for the reasons stated in the attached memorandum opinion of this day, it hereby is
ORDERED that defendants' motion to dismiss and for partial summary judgment is DENIED.