In Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479 (1985), the Supreme Court stated that the RICO pattern element required more than merely proving two predicate acts of racketeering. The Court looked at the legislative history to RICO indicating that RICO pattern was not designed to cover merely sporadic or isolated unlawful activity, but rather activity which demonstrated “relationship” and the “threat of continuing activity.” Sedima, at 496.
Relationship Plus Continuity
The Supreme Court in H.J. Inc. v. Northwestern Bell Tel. Co., 492 U.S. 229 (1989) then set forth the “relationship” plus “continuity” requirements in order to find a PORA. Regarding relationship, the Court stated that “a pattern is an arrangement or order of things or activity,” it is not the number of predicates but the relationship that they bear to each other or to some external organizing principle that renders them “ordered” or arranged. H.J. Inc., at 238, emphasis added. The Court in H.J. Inc. also pointed to the legislative history of RICO which indicates that Congress intended RICO to cover the diversified criminal activities of organized crime.
Thus, it is not necessary to prove that the racketeering acts always be similar in nature or directly related to each other, but rather a PORA may be found if the predicate acts are related to the activities of the alleged enterprise. The racketeering acts may be found to be related to the activities of the alleged enterprise by proof that (1) the racketeering acts furthered the goals of or benefitted the enterprise; (2) the enterprise or the defendant’s role in the enterprise enabled the defendant to commit, or facilitated the commission of, the racketeering acts, (3) the racketeering acts were committed at the behest of, or on behalf of, the enterprise, or (4) the racketeering acts had the same or similar purposes, results, participants, victims, or methods of commission.
Closed and Open-Ended Continuity
The Supreme Court in H.J. Inc., supra, specifically described “continuity” as both a closed and open-ended concept. Regarding “closed-ended” continuity, the Court stated that a party alleging RICO must demonstrate continuity over a closed period by proving a series of related predicates extending over a substantial period of time. Id. at 241. Courts have generally found that when analyzing the “closed-ended” continuity requirement, that conduct lasting less than one or two years is not sufficient to satisfy the continuity requirement. Regarding the “threat of continuity,” the Court stated that proving this sub-element depends on the specific facts of each case, and the Court set forth some examples. One way is if the related predicates themselves involve a distinct threat of long-term racketeering activity, either implicit or explicit, such as threats which include a specific threat of repetition extending indefinitely into the future. Id. at 241-243.
Another example cited by the Court is that the threat of continuity may be established by showing that the predicate acts or offenses are part of an ongoing entity’s regular way of doing business. Thus, predicate acts which are small in number, even just two predicates, and which occur close in time, may constitute a PORA under the threat of continuity test if committed in furtherance of the affairs of a criminal enterprise that existed for a considerable time period, such as an organized crime family, or a motorcycle gang.
As a result, the continuity prong may present complex questions in civil RICO litigation when the enterprise in question, an association-in-fact, may have only existed for a short time period and the racketeering activity may be short-lived. However, courts have found the requisite continuity when the racketeering acts were a “regular way of conducting defendant’s ongoing business,” such as, for example, when a judge routinely receives bribes in the conduct of the affairs of his office (the enterprise). Because the facts are not always clear-cut as to whether the defendant’s regular way of conducting a defendant’s business was through racketeering activity, closed-ended continuity may be the preferable way to prove a PORA in civil RICO actions.
Moreover, RICO requires that the last act must have been committed within ten years of a prior act, excluding any period of imprisonment. By way of example, a RICO action which meets the statute of limitations must have at least two acts within ten years of each other, for example, if the last act occurred in year 2012, then there must have been an act occurring in or after year 2002 to meet the PORA requirement.
