USCA1 Opinion

October 11, 1996

United States Court of Appeals

For the First Circuit
____________________

No. 95-2107
ROMA CONSTRUCTION COMPANY AND PETER ZANNI,
Plaintiffs, Appellants,

v.

RALPH A. ARUSSO, ET AL.,

Defendants, Appellees.

____________________

ERRATA SHEET
ERRATA SHEET

The

concurring opinion

by

Judge Lynch

in

the

above-captio

case, issued on September 27, 1996, is corrected as follows:

On page 36, line 3: insert "in" before "stating"

On page

36, footnote 16:

change "footnote 7

supra" to "footnote
_____

supra"
_____

On page 38, line 6: insert "that" after "likely"

On page 40, line 9: change "operate" to "have operated"

On page 42, line 8: change "supra footnote 10" to "supra footnote 1

_____
_____

UNITED STATES COURT OF APPEALS

FOR THE FIRST CIRCUIT

____________________

No. 95-2107

ROMA CONSTRUCTION COMPANY

AND PETER ZANNI,

Plaintiffs - Appellants,

v.

RALPH R. ARUSSO, ET AL.,

Defendants - Appellees.

____________________

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF RHODE ISLAND

[Hon. Francis J. Boyle, Senior U.S. District Judge]

__________________________

____________________

Before

Torruella, Chief Judge,

___________

Cyr and Lynch, Circuit Judges.

______________

_____________________

G. Robert Blakey, with

_________________

whom Ina P. Schiff,

______________

Henry F. Spal
_____________

and Spaloss & Rosson were on brief for appellants.

________________
Kathleen M. Powers, with
____________________
Offices
_______

were on

Zurier, with
______

brief for

whom Marc DeSisto and

_____________

appellee

Town of

whom Julius C. Michaelson and

_____________________

were on brief for appellees aRusso, et al.

____________________

September 27, 1996

____________________

Johnston.

DeSisto
________

Samuel
_______

Michaelson & Michael

_____________________

TORRUELLA,
TORRUELLA,

Construction Co,

Chief Judge.
Chief Judge.
____________

Inc. ("Roma")

(collectively, "the plaintiffs"),

dismissal

of their

claims

Plaintiffs-Appellants

and Peter Zanni

(collectively,

("Peter Zanni")

challenge the district court's

against

Defendants-Appellees

Ralph R. aRusso ("aRusso"), Councilman Benjamin

Zanni"), Domenic

individual

Mayor

Zanni ("Benjamin

DeConte, Vincent Iannazi, Anthony

"the

Roma

defendants"), and

Izzo, et al.
______

the

Town of

Johnston, Rhode Island ("the Town") (together with the individual

defendants, "the defendants").

granted

judgment

on

racketeering claims

the

against

Specifically, the district court

pleadings

regarding:

the individual

(1) Roma's

defendants and

the

Town under the Racketeer Influenced and Corrupt Organizations Act

("RICO"), 18 U.S.C.

1964(a),

seq. ("state RICO"); and (2)

____

the individual

For

Laws

7-15-1

Roma's civil rights claims

defendants and the

Roma also challenges

pro hac vice

____________

and R.I. Gen.

Town under 42

the district court's

against

U.S.C.

1983.

decision to deny

admission of attorney G. Robert

et
__

the

Blakey ("Blakey").

the following reasons, we reverse the dismissal of the RICO,

state RICO and civil rights claims, reverse the district

court's

decision

not

to

admit

Blakey,

and

we

remand

for

to Fed.

R.

further

proceedings in accordance with this opinion.

I.
I.

We

review

BACKGROUND
BACKGROUND

dismissals

P.

under the

properly

pleaded facts are to be drawn in the plaintiffs' favor.

Crespo-Guill n, 25
______________

-2-

all reasonable

Civ.

12(b)(6)

P rez-Ruiz v.
__________

rubric that

pursuant

F.3d 40, 42

inferences from

(1st Cir.

1994);

Dartmouth Review v. Dartmouth College, 889 F.2d 13, 16 (1st Cir.

_________________
_________________

1989).

Drawing all

the tale proceeds

Roma

and

as follows.

entered into a

Russell

reasonable inferences for

The plaintiffs

real estate development

DePetrillo ("the

plaintiffs, the DePetrillos had

and was

venture with Harry

Unknown to

the

the Town, with aRusso as "the

would be made to this

enterprise in

After the DePetrillos

Zanni was informed of

warned that his

and

entered into an arrangement with

order to obtain necessary approvals.

their share, Peter

Peter Zanni

DePetrillos").

the alleged de facto government of

Boss," under which payments

the plaintiffs,

sold

this preexisting deal,

project was "dead"

if he did

not make

payments.

Having invested heavily in the project, and reasonably

believing that he was dealing with a racketeering enterprise that

had extorted and stolen for years during its control of the Town,

Peter Zanni paid up.

he

was

able to

He

continued paying for three years, until

sell his

share of

the

development.

He then

informed the FBI, and cooperated with its investigation and later

with prosecutions of official corruption in the Town.

Peter Zanni

racketeering

and Roma

claims and

that they were

brought federal and

federal civil

injured by the conduct

individual defendants, as well

dismissed these charges on

rights

The

plaintiffs

claims, charging

of aRusso and his

as the Town.

The

fellow

district court

the grounds that the plaintiffs'

conduct rendered them unable to maintain

claims.

state civil

appeal

the

own

standing to press their

dismissals

of

their

-3-

racketeering1 and civil

court's

decision to

rights claims, as

deny the

well as the

district

pro hac vice admission

_____________

of their

desired counsel, G. Robert Blakey ("Blakey").

II.
II.

We

address

first

DISCUSSION
DISCUSSION

the

plaintiffs'

challenge

to the

dismissals

of their

appeal

the district

of

causes of

action, and then

court's decision

confront their

to deny

admission to

Blakey.

A.
A.

Causes of Action
Causes of Action

After setting forth the applicable

we

turn

first to

the

plaintiffs'

standard of review,

challenge to

court's dismissal of their racketeering claims.

the

district

We then shift to

the issue of the plaintiffs' section 1983 claims.

1.
1.

Upon

Standard of Review
Standard of Review

considering a

state a claim under Fed. R.

motion to

dismiss for

failure to

Civ. P. 12(b)(6), the district court

should not grant the motion unless it appears to a certainty that

the plaintiff

would be unable to recover under any set of facts.

Hospital Bldg. Co. v. Trustees of Rex Hosp., 425 U.S.

___________________
______________________

(1976); Gonz lez-Bernal v. United States,

_______________
_____________

Cir. 1990).

We review under

738, 746

907 F.2d 246, 248 (1st

the same standard, Holt Civic Club

________________

v. City of Tuscaloosa, 439 U.S. 60, 66 (1978).

__________________

____________________

At oral

argument, the plaintiffs stated that, on appeal, they

did not wish to challenge the district court's dismissal of their

racketeering claims against the Town.
that they would
Town

not attempt

in the future.

Plaintiffs also stipulated

to assert such

claims against

Accordingly, vis-a-vis the

Town, the only

damage claims we address are those pursuant to section 1983.

-4-

the

2.
2.

The Racketeering Claims

The Racketeering Claims

RICO creates

a civil remedy for

in his business or property

1962

of this chapter."

section

1962, in

person employed

or

the

the conduct

racketeering

by reason of a violation of

18 U.S.C.

turn, declares

1964(c).

that it

section

Subsection (c) of

is unlawful

"for any

by or associated with any enterprise engaged in,

activities

commerce, to

"[a]ny person injured

of

which

affect,

interstate

conduct or participate, directly

of such

enterprise's affairs

activity or

or

foreign

or indirectly, in

through a

collection of unlawful

pattern of

debt."

Id.
___

1962(c).

An "enterprise" is

defined to include "any individual,

partnership, corporation, association or other legal entity,

and

any union or group of individuals associated in fact although not

a legal entity."

any

Id.
___

1961(4). "Racketeering activity" includes

one of a number of enumerated criminal acts indictable under

federal

or

state law.

See id.
___ ___

1961(1).

"'pattern of

racketeering activity' requires at least two acts of racketeering

activity . . . the last of which

occurred within ten years . . .

after the commission

act of racketeering

Id.
___

of a prior

activity."

1961(5).

The district court dismissed the plaintiffs' civil RICO

claims on

the ground

that, by

their own pleadings,

were not innocent victims and therefore could

plaintiffs

not maintain civil

RICO

standing.

The

district

proposition that only innocent

civil

RICO in

the legislative

court

found

support

for

the

victims could collect damages via

history of

the provision.

See
___

-5-

Organized Crime Control: Hearings on S. 30 Before the Subcomm.

_________________________________________________________________

No. 5 of the House Committee on the Judiciary, 91st Cong.,

_______________________________________________

2d.

Sess. (1970) (stating, in the Act's "Findings and

Purpose," that

"Congress finds that . . . organized crime activity in the United

States

116

harms innocent

Cong. Rec.

Steiger, the

the

investors and

H35,346-47

(Oct. 7,

private civil

intent of

parties who are

1970)

(statement of

remedy provision's sponsor)

this body,

I am

the victims of

obtain proper redress.").

competing organizations");

certain, to

Rep.

("It is

see that

innocent

organized crime have a

right to

The district court's reasoning can

be

better delineated in conjunction with a recitation of plaintiffs'

claims.

Drawing inferences

in favor of

pleadings suggest the following situation.

the

DePetrillos

DePetrillos

had

in

entered

real estate

into

the plaintiffs,

The plaintiffs joined

venture,

scheme

their

in

unaware

which

that the

regulatory

approvals

had

DePetrillos'

associates.

DePetrillos

years

for

already

payment

been

granted

of $10,000

to

The plaintiffs

had agreed

were

to pay an

in

exchange

aRusso

similarly

and his

for

the

purported

unaware that

additional $40,000.

the

Several

later, defendant Councilman Benjamin Zanni approached them

the

purported

emphasized,

refuse

project,

"balance

the plaintiffs

to pay, jeopardizing

and

as

the

obligation, go immediately

due."

As

then faced

the

a dilemma.

their $2 million

district

court

district

was

their

Or, they

could

submit to this extortion to protect their investment.

-6-

They could

investment in the

suggested

to the authorities.

court

They chose

the latter route.

all

The plaintiffs state that they

rules

and

regulations,

treatment,

but

paid to

Specifically,

statement

the plaintiffs point

to Plaintiff Peter

partnership

did

not

avoid threatened

unless the balance was paid.

their

and

interests

seek

to Benjamin

Zanni's alleged

venture was "dead"

Three years later,

the

preferential

adverse consequences.

Zanni that the

in

complied with

venture,

after they sold

the

plaintiffs

contacted the FBI, and assisted agents in a sting operation.

Looking at these contentions, one reasonable conclusion

is

that the plaintiffs made these payments without any intent or

desire to

subvert governmental processes, but

pay

to protect their substantial investment

did

not contact the FBI until they

investment.

However,

the district

under this favorable view

not be considered innocent

felt compelled to

in the venture, and

had mitigated risks to their

court concluded

that, even

of the plaintiffs' conduct they

parties, and so could

could

not, according

to the district court's interpretation of RICO standing, maintain

a civil RICO claim.

The district court concluded that, since the

plaintiffs' own pleadings indicate that they paid $40,000 to

individual defendants to assure

approvals

"neither

necessary

for

their

innocent nor victims."

the

timely processing of permits and

project,

the

plaintiffs

were

Roma Constr. Co. v. aRusso, 906

________________
______

F. Supp. 78, 82 (D.R.I. 1995).

The plaintiffs challenge the district court's dismissal

of

that

their civil RICO claims on the pleadings.

there is any "innocent

Plaintiffs dispute

party" requirement under

RICO.

In

-7-

the alternative, the plaintiffs

an "innocent

contend that, even assuming such

party" requirement, the

district court erred

as a

matter

view

of law in concluding, that even taking the most favorable

of the

"innocent

plaintiffs'

parties."

"innocent party"

pleadings, they

Although

were necessarily

the district

court spoke

not

of the

requirement as one of "standing," it appears to

have also considered its "innocent party" requirement as being in

the nature of an affirmative defense which could be determined at

the pleadings stage.

cases

under

The

the Clayton

defense is recognized.

v.

Berner, 472 U.S. 299,

______

district court analogized to antitrust

Act

in which

an

"equal involvement"

See Bateman Eichler, Hill Richards Inc.

___ ____________________________________

310-11 (1985); Perma Life Mufflers v.

____________________

International Parts Corp., 392

_________________________

U.S. 134 (1968).

Whether

there exists such an "innocent

party" requirement is a

or not

question

of first impression in this circuit and, indeed, we are not aware

of any

not,

cases anywhere that

however, decide whether or

"innocent party"

limitation,

might take the form

defense, because

their

a requirement.

to what extent

or whether

any

we conclude

nonculpability

that the

such

requirement

an affirmative

district court

prove no set of facts

under

We need

RICO imposes an

of a standing requirement or

finding that plaintiffs could

show

adopt such

all

potentially

erred in

which would

applicable

criminal statutes.2
____________________

In deciding not to address the broader issues discussed in the

concurring

opinion, we

need

not necessarily

respected

colleague's analysis.

complaint

based

"equal

on

involvement"

appellees'
defense

Concededly,
assertion

would

-8-

be

of

quarrel with

our

dismissal of

the

a fact-intensive

inappropriate

on

the

Our

analysis

standards under

which the

behavior.

In

forced

to conclude

it

victims, the

commences

deciding

district

with an

district court

that such

that

examination

payments,

even if

were

two authorities.

coerced,

not innocent

See
___

Constr. Co., 906 F. Supp. at 81-82 (citing R.I. Gen. Laws

___________

4 (1994) and Model Penal

Code

the

evaluated plaintiffs'

the plaintiffs

court cited

of

240.1 commentary at

Roma
____

11-7-

41 (1980)).

Initially, the district court noted that Rhode Island General Law

11-7-4 states that

[n]o person shall

corruptly give

. .

any gift or valuable consideration to . .

. any public official as an inducement or
reward

for

doing or

forebearing

to do

. . . any act in relation to the business

of . . . the state, city or town of which
he or she is an official.

R.I. Gen. Laws

11-7-4 (1994).

address the question of

an innocent victim.

fail

The

statutory language does not

whether one who pays due

to coercion is

The district court did not refer

to find, any Rhode

Island authority for

to, and we

direction on this

point.

Rather, the

district court

drew on the

commentary to

____________________

undeveloped record

presently before

the court.

The concurring

opinion hypothesizes that the substance of any such defense would

be informed by preexisting
defenses.
entirely

By contrast,
on

the

federal statutes embodying comparable

the district court's

existence,

vel
___

non,
___

dismissal depends

of either

an

innocent-victim "standing"

requirement or

delicto
_______

which, by

very nature,

defense,

readily susceptible

each of

said is meant to

either

such

law-based in
__

pari
____

is more

to summary disposition than a fact-intensive

"equal involvement" defense.

have

its

absolute

Thus

we caution

suggest that Congress

a "standing"

requirement

defense.

-9-

or

that nothing

we

intended to create
an

in pari
__ ____

delicto
_______

the Model Penal Code's definition of bribery to conclude that the

plaintiffs'

payments, even

if construed

coercion, constituted illegal bribery.

F. Supp. at

81.

The

to be

the product

of

See Roma Constr. Co., 906

___ ________________

cited commentary to

section 240.1 of

the

Model Penal Code states that

[a]

private citizen

official's
paying

threat

money

to

who responds

to an

of adverse

action by

secure more

favorable

treatment evidences thereby a willingness

to

subvert

the legitimate

government

constitutes

processes of
Such

degree of

conduct

cooperation in

the undermining of governmental integrity

that

is

inconsistent with

the complete

exoneration from criminal liability.

Model

Penal Code

court

thus concluded that

pleadings

that

240.1 commentary

most

at 41 (1980).

since even the

favors

the

The district

interpretation of the

plaintiffs

requires

determination that plaintiffs capitulated to official

threats of

adverse action, they were not "innocent parties."

Taken together

with

that RICO

its

reading

of

the

legislative

history

was

intended to protect "innocent parties" and with its assessment of

public policy in the form of "economic

court

proceeded

pleadings.

to

dismiss

the

incentives," the district

plaintiffs'

claims

on

the

Roma Constr. Co., 906 F. Supp. at 83.

________________

The district court thus ultimately relied on the policy

concerns it understood to

Assuming for

issue

in

be addressed in the Model

Penal Code.

the sake of argument that lack of "innocence" is an

a civil

RICO claim,

the

question must

be addressed

whether the district court considered the correct sources for the

definition of

"innocence."

We believe that

where racketeering

-10-

statutes provide for a civil remedy, at the very least we

deny RICO remedies only

not on policy grounds.

Co.,
___

473

U.S. 479,

statutory language

interpretation,

with reference to statutes or

case law,

See generally Sedima, S.P.R.L. v.

_____________ _________________

498-500

(1985)

(rejecting,

and legislative history that

should

court

of

appeals-imposed

due

to

Imrex
_____

RICO

counsel a broad

RICO

standing

limitation as inappropriate

judicial "statutory amendment"

though

the

the

Court

shared

"extraordinary" uses

of RICO).

question

the

of whether

federal common law for

issue

lower

As a

court's

concerns

result, we

presented

even

about

turn to

is properly

which the Model Penal Code might

one

the

of

prove a

legitimate source of uniform legal principles, or one to which we

would apply Rhode Island law.

The Supreme

have the power

rule

of

to formulate

decision

interests" or when

develop

Inc.,
____

Court has

is

U.S.

federal common law

necessary to

Congress has

substantive law.

451

recognized that federal

630, 640

protect

when a

federal

"uniquely

federal

given the courts

Texas Indus. v.
_____________

(citing

courts

the power

to

Radcliff Materials,
___________________

Banco Nacional de Cuba

________________________

v.

Sabbatino,
_________

U.S. 647,

376 U.S. 398, 426 (1964) and Wheeldin v. Wheeler, 373

________
_______

652 (1963)).

include areas such as

States, interstate

conflicting

and

rights

of

Areas of

"uniquely federal

interests"

"the rights and obligations of

the United

international disputes

States

nations, and admiralty cases."

concluded

that

RICO

does

or our

relations

Id. at 641.
___

not

-11-

implicating

implicate

with

the

foreign

Several courts have

"uniquely

federal

interests," since "[r]egulation of

within

the

above

categories

organized crime does not fall

and,

although

RICO

is

federal

legislation, individual states also take active roles in fighting

organized crime and providing

Friedman v.
________

Minpeco v.
_______

Hartmann,
________

redress for its injured citizens."

787 F.

Supp. 411,

Conticommodity Servs. Inc., 677

___________________________

(S.D.N.Y. 1988) ("RICO, although

417 (S.D.N.Y.

F.

1992);

Supp. 151,

reflecting Congress' intent

155

in

providing creative federal responses to the problems of organized

crime, does not address

Electric
________

a uniquely federal interest."); Seminole

________

v. Tanner, 635 F. Supp. 582,

______

584 (M.D. Fla. 1986).

agree that RICO does not concern uniquely federal interests.

We

As a result, we

--

is

RICO standing

inquire whether the question presented

limited

within an area in which

was properly

Texas Industries, 451 U.S.

________________

power

at 640.

and its relationship to a

party's innocence

decided as a matter of uniform federal common law.

district court

trends as guides for

would

-- falls

district court, in effect, decided that the issue of federal

civil RICO standing

The

parties?

Congress has given the courts the

to develop substantive law.

The

to "innocent"

foster what

underlying civil

looked to uniform

model codes

fashioning a federal common law

it perceived

RICO.

The district

Congress that enacted RICO in

legislative history to the

as important

and emergent

rule which

federal interests

court suggested that

1970, which referred obliquely

the

in

purpose of aiding "innocent parties,"

would be cognizant of the emerging Model Penal

law

Code trend in the

of bribery, presupposing that Congress gave courts the power

-12-

to develop substantive law regarding this issue.

We find

the "innocence"

no evidence

of any congressional

of a RICO "victim"

uniform federal common

law rule.

should be made to

Neither party

intent that

turn on a

cites, and

we

have

been unable

history

statutory provisions

evidencing such a grant

been a great deal

of

to find,

of authority.

or legislative

While there has

of commentary regarding the

appropriate scope

federal common law, see, e.g., Morgan v. South Bend Community

___ ____ ______
____________________

Sch. Corp.,
___________

797

F.2d

471, 475

(7th

Cir.

1986)

(collecting

commentary), it is not disputed that "when the federal government

is

not a

"neutral

should

party to

state rules

be

the litigation" --

that

applied unless

do not

some

as is

the case

undermine federal

statute

(or the

here --

interests

Constitution)

authorizes the federal court[s] to create a rule of federal law,"

id. at
___

(1977)).

475 (citing Miree

_____

More

v. DeKalb County,
_____________

specifically, the

433 U.S. 25,

Supreme Court

judicially created restriction on RICO

28-33

has rejected

standing, despite voicing

agreement with the

question.

assuming

See
___

--

plaintiffs to

limited

policy concerns that drove

Sedima,
______

without

be

473

U.S. at

concluding,

innocent

parties

as

the limitation in

498-500.

we

As a

ultimately

-- that

RICO

result,

find

standing

the

is

to "innocent parties," we believe that the question of a

party's innocence must be resolved via the incorporation of state

law into the federal law of

instant question.

law into federal

We

RICO standing in order to answer the

recognize that the incorporation

law implicates a serious problem

-13-

of state

of uniformity

of federal law throughout

not implicate

the states.

uniquely federal

However, since

interests and

RICO does

since there

is a

lack of support for the view that Congress authorized the federal

courts

to

generate

federal

incorporation of state law is

common

law

in

this

area,

the preferable alternative.

the

See,
___

e.g., In re Sunrise Sec. Litig., 916 F.2d 874, 881 (3d Cir. 1990)
____ _________________________

(finding it appropriate

deciding

whether

"to look

plaintiffs

to state law

have

[shareholders']

claim,

rather

fashion federal common

than to

[enabling

stated

them to

for guidance

in

nonderivative

maintain

standing,]

law"); Leach

v. Federal

_____

Deposit Ins. Corp.,

____________________

(concluding

whether

that "the

860

F.2d

1266,

incorporation of

a shareholder has been

problem

of uniformity

(5th

state law

civil

RICO

common law

action,

where

1988)

to determine

despite the possibility of

of

federal

law throughout

states"); cf. In re Bieter Co., 16 F.3d 929, 935

___ ________________

(applying federal

Cir.

injured under RICO is preferable

to generating federal common law"

serious

1274

_______

the

(8th Cir. 1994)

of attorney-client privilege

such application

is

"a

to a

authorized

by

Supreme Court Standard 503 and Supreme Court case law).

As a

must

apply

concluded

result, in

Rhode

that

the

Island

assessing

bribery

pleadings

plaintiffs' innocence,

law.

rendered

The

the

we

district

court

plaintiffs

"not

innocent"

vis-a-vis charges of

bribery.

See
___

Roma Constr. Co.,

________________

906 F. Supp. at 83 (stating that to allow the plaintiffs standing

might

result in

rule under

which

"[p]ersons, such

as

the

plaintiffs, could engage in bribery of public officials with full

-14-

knowledge that if the bribery scheme . . . broke down, they could

seek a treble

return on their illicit,

but failed investment").

Turning

to Rhode Island law, however,

reconciled

with Rhode

this conclusion cannot be

Island's bribery

court relied on the Model

statute.

The district

Penal Code's bribery provision,

states that

[a] person is guilty

the

of bribery, a felony of

third degree, if

agrees

he offers, confers, or

to confer upon

another, or solicits,

accepts or agrees to accept from another:

(1)

any

pecuniary

consideration

for

benefit
the

as

recipient's

decision,

opinion, recommendation,

vote

or

exercise

as a

other

of

discretion

public servant, party official, or voter;

or

(2) any benefit as consideration for the

recipient's
recommendation
official

decision,
or

discretion

other
in

vote,
exercise

of

judicial

or

administrative proceeding; or

(3) any benefit

as consideration for

which

violation

of

a known

legal

duty as

public servant or party official.

Model

Penal Code

Matters").

240.1

under

Rhode

commentaries expressly

Island law.

n.2 (1980).

Penal Code

the Model

that this fact counsels for the same

Island

law,

recognize that

Part II Model

Moreover,

Political

have rightly concluded

not innocent of bribery under

Penal Code, we do not think

Rhode

Official and

While the district court may

that the plaintiffs are

conclusion

("Bribery in

since

the

Code's

the Code does

not follow

Penal Code and Commentaries 6,

unlike Rhode Island's statute,

provision contains

no requirement that

-15-

own

the Model

a payor

act

"corruptly."

corruptly
_________

Compare R.I. Gen. Laws

_______

11-7-4 ("[n]o person shall

give") (emphasis added) with Model Penal Code

____

240.1

("[a] person is guilty of bribery . . . if he offers, confers, or

agrees to confer upon another").3

The

plaintiffs

argue

that

the

Model

Penal

Code's

omission of the term "corruptly" is no mere semantic distinction;

rather,

it represents a shift

from the common

law in expanding

the

scope of bribery sanctions for payors to situations in which

the

payor does not act corruptly.

See generally James Lindgren,

_____________

The Elusive Distinction Between Bribery and Extortion: From the

_________________________________________________________________

Common Law to the Hobbs Act,

____________________________

(1988).

We agree.

35 U.C.L.A. L. Rev.

815, 824 n.41

"[A] statutory term is generally presumed

have its common-law meaning."

Evans v. United States,

_____
_____________

to

504 U.S.

255, 259 (1992); United States v. Aguilar, ___ U.S. ___, ___, 115
_____________
_______

S. Ct. 2357, 2370

(1995) (Scalia, J., dissenting) (stating

that

____________________

The federal bribery

does not, by its

involved in
cases

terms, apply to

the instant

have held

administer

and gratuity statute,

the

federally

statute,

where

local officials such as

U.S.C.

where local

funded programs.

See
___

jail

was under

those

officials

United States
_____________

142 (4th Cir. 1988) (concluding

"public official" with respect

county

201,

201(a)(1), although

statute applicable

Vel zquez, 847 F.2d 140,

_________
sheriff was a

case, 18

18 U.S.C.

v.

deputy

to federal bribery

contract

with

federal

government

to

Gallegos, 510
________
government

supervise
F. Supp.

employee

federal official

federal prisoners);
1112, 1114 (D.N.M.

who

worked

1981) (ruling

direct

in administration of federal

"public official" for purpose of

see United States v.
___ ______________
(concluding city

under

United States v.
______________

supervision

administrator who was

F.2d

of

grant program was

federal bribery statute).

Del Toro, 513

_________

state

656, 662

But
___

(2d

Cir.)

city employee was

not a

public official even though he administered model cities program,

for which

the federal

denied, 423 U.S.

______

government provided 100%

826 (1975).

funding), cert.
_____

No allegation has been

made that

the defendants' bribery/extortion scheme was in connection with a

federal contract or federal funding.

-16-

"the term 'corruptly'

in criminal laws

well-accepted meaning").

The term "corruptly"

of corrupt intent to the crime

2370 (endorsing the

has a long-standing

of bribery.

with

proposition that "[a]n act is done corruptly

unlawful result or a

a hope

benefit

1st Sess. 18

bribery statute)

also

lawful result by

or expectation

to oneself or a

87th Cong.,

adds the element

See generally id. at

_____________ ___

if it's done voluntarily and intentionally to

an

and

of either

bring about either

some unlawful method,

financial gain

benefit of another

person"); H.R. 748,

(1961) (reporting section

(stating that "[t]he word

or other

201 federal

'corruptly' which is

used in obstruction of justice statutes (18 U.S.C.

1505) means with wrongful or dishonest intent").

1503-

We agree that the term "corruptly" indicates a specific

corrupt

intent

that

differs

commentary's condemnation

manifesting

"a

governmental

degree

of an

of

integrity

commentary

concerns the

at

41.

the

intention to

the

mens rea
_________

Model Penal

implicated

obtain ill-gotten gain;

the Model Penal Code converts the

Penal

Code

conduct as

undermining

inconsistent with

liability."

The

Model

involuntary payor's

cooperation in

that is

exoneration from criminal

from

the complete

Code

240.1

by "corruptly"

by contrast,

lack of willpower to stand

to abusive authority into a degree of culpability.

of

up

See Lindgren,
___

supra at 824 n.41 (stating that "[t]he Model Penal Code has taken
_____

the questionable approach of

an extortion threat").

making it bribery to capitulate

Admittedly, to

delve into questions

to

of

what

is done

"corruptly" is

more difficult

than to

apply the

-17-

Model Penal Code's standard.

But as one commentator

has noted,

"[t]he best that can be said for the [Model Penal Code's bribery]

provision

is

definition

ignoring the

that

easy, but

settled

it

makes

this

law of

difficult

clarity is

questions

bought

centuries and

at the

of

crime

cost

of

current notions

of

right and wrong."

Id.
___

As a result, we

must apply the common law

standard of

specific corrupt intent, as included in the Rhode Island statute,

to

the plaintiffs' story.

The plaintiffs claim

that they paid

only to avoid adverse consequences, that their properties met the

standards required for

received nothing

these claims

think

the approvals in question,

beyond fair

with an

treatment from payees.

eye towards

that a set of facts could

reasonably

inferred that

and that they

Examining

detecting corrupt intent,

we

be found from which it could be

the plaintiffs

did not

make payments

voluntarily to bring about an unlawful result, with the hope of a

gain for

victims of

themselves,

but rather

a criminal enterprise.

that

they were

the

innocent

As a result, we conclude that

Rhode Island's

bribery statute

does not foreclose

a conclusion

that they are "innocent parties."

Citing

United States
_____________

v. Mariano,
_______

Cir. 1993) and United States v. Hathaway,

_____________
________

1976),

the defendants assert

"bribery

and

extortion are

Mariano, 983 F.2d at 1159;

_______

we

think

these cases

mutually

previously held that

exclusive concepts,"

Hathaway, 534 F.2d at 395.

________

unavailing

-18-

for

1150 (1st

534 F.2d 386 (1st Cir.

that we have

not

983 F.2d

three

reasons.

However,

First,

neither deals with Rhode Island's bribery statute.

Second,

even

if these cases compelled us to conclude that bribery and coercive

extortion are

not mutually

Island statute, in the

fact

remains as to

based on

exclusive concepts under

instant case a genuine issue

the plaintiffs'

a reading of

intent in

the pleadings in

the Rhodes

of material

making payments,

the best light

for the

plaintiffs.

Third,

defendants

who

and finally,

pled

guilty

[some]thing of value" to

Mariano, at
_______

to

least, involved

"corruptly

giv[ing]

two

local government officials "with intent

to influence or reward" those officials, where the officials were

part

of a

governmental unit

subsidies, in violation of

F.2d at 1153.

that received

18 U.S.C.

application

of

bribery

rather than

the guideline

illegal gratuity.

they

its

1159.

perpetrators, of

erroneous

"guideline

the sentencing

Id. at
___

received nothing

clearly

666(a)(2).

Mariano, 983
_______

On appeal, both defendants challenged the district

court's

victims, not

substantial federal

extra

standard of

guideline

appropriate to

They argued

relating

providing an

that "they

an extortionate scheme,

in return."

review,

analogy chosen by the district

Id.
___

we

to

were

and that

Applying

the

concluded that

the

court was well within

purview," noting that "when there are two plausible views of

the record,

the

sentencing court's

adoption of

one such

view

cannot be clearly erroneous."

St. Cyr,
_______

977 F.2d 698, 706

Id. at 1160; see United States v.

___
___ _____________

(1st Cir. 1992).

In particular, we

noted that the Mariano defendants could not "expect the courts to
_______

-19-

swallow their tale uncritically."

In this

Mariano, 983 F.2d at 1160.

_______

case, the district court

improperly dismissed

the plaintiffs' case before it had a chance to swallow, let alone

digest,

their story.

plausible view is

coercive

At this

that the

extortion, and

stage

of the

plaintiffs were in

since they

have not

game,

since one

fact victims

pled guilty

of

to a

crime that involves "corrupt intent" as an element as we noted of

the defendants in Mariano, 983 F.2d at 1159, we conclude that the

_______

plaintiffs in the instant case may press on with their claim.

result, we

reverse

plaintiffs' federal

the

district

the

RICO claims.

court's

dismissal

jurisdiction, see 28 U.S.C.

___

to R.I. Gen. Laws

federal

and

state

district

court's dismissal

the

Accordingly, we

also reverse

for

supplemental

lack

of

1367, of state RICO claims pursuant

7-15-2, 7-15-3 and 9-1-2.4

RICO

of

As

claims

for

further

We

remand both

proceedings

in

accordance with this opinion.

____________________

Similar

to federal RICO, R.I. Gen.

Laws

7-15-2(c) provides

that

[i]t

shall

employed

be unlawful

by

or

associated

enterprise to conduct
the

conduct

for

of

the

enterprise through

any person
with

or participate
affairs

of

any
in
the

racketeering activity

or collection of an unlawful debt.

Rhode Island law also uses broad standing language that resembles
that of 18 U.S.C.

1964(c) in its provision for civil

for racketeering offenses.

that "[w]henever
reason of the

any person
__________

See R.I. Gen. Laws

___
shall suffer

commission of any crime

9-1-2 (stating

any injury
__________

or offense .

she] may recover his [or her] damages for such injury
action against the offender") (emphasis added).

-20-

liability

. . .
. . he

by

[or

in a civil

Because we conclude that

even if RICO's civil remedies

were limited to innocent parties, we would apply Rhode Island law

to the

question of the

plaintiffs' innocence, and

Rhode Island

law compels a reversal of the district court's dismissal of their

claims, we leave

for a later time the question

of whether those

who are not innocent parties can be denied civil RICO remedies.

3.
3.

The Civil Rights Claim

The Civil Rights Claim

The district court also dismissed the plaintiffs' claim

that

state

the individual defendants and the Town acted under color of

authority

and

plaintiffs of property

municipal

practice,

and rights

and

deprived

in violation of

the

42 U.S.C.

1983.

Section

1983 authorizes

and/or damages against "[e]very

. .

equitable relief

person who under color of

any .

custom or usage, of any State or Territory . . . subjects or

causes to be subjected any citizen

person . . .

immunities

1983.

actions for

to the

of the United States or other

deprivation of any

secured by the Constitution

rights, privileges,

and laws."

or

42 U.S.C.

Furthermore, those who commit actionable wrongs under that

section "shall be

liable to the

party injured in

an action

law, suit in equity, or other proper proceeding in redress."

at

Id.
___

In

construing the terms "custom"

and "usage," the Supreme Court

has instructed that

Congress included customs and

usages [in

section 1983] because

persistent

and

widespread

of state

of the

discriminatory practices

officials . . .

. Although not

authorized by written law, such practices

of

state

officials

could

well

be

so

-21-

permanent

and

well

settled

as

to

constitute a

"custom or usage"

with the

force of law.

Monell v. Department of Social Servs. of New York, 436 U.S. 658,

______
________________________________________

691

(1978) (quoting Adickes v.

_______

S.H. Kress & Co., 398 U.S. 144,

_________________

167-68 (1970)); see Bordanaro v. McLeod, 871 F.2d 1151, 1156 (1st
___ _________
______

Cir. 1989).

Courts have

set forth two requirements for maintaining

a section 1983 action grounded upon an unconstitutional municipal

custom.

First, the

the municipality."

settled

Id. at 1156.
___

and widespread

municipality can

knowledge

custom or practice "must be

of

that the

be said to

it yet

That is, "it must be so

well-

policymaking officials

of the

have either actual

did nothing

attributable to

to

end the

or constructive

practice."

Id.
___

Second,

"the custom must

have been the cause

of and the moving

force behind the deprivation of constitutional rights."

Id.
___

The district court concluded that in the facts alleged,

"there

[was] no

evidence

that

the

Town

[]

had

any

policy

endorsing or advocating extortion and the acceptance of bribes by

town

officials."

Furthermore,

Roma Constr. Co.,

__________________

the district

court

went on

906

to

F.

Supp.

at

state that,

83.

even

assuming "that there was a de facto municipal policy of extortion

promulgated

by

defendants," the

aRusso

perpetrated

plaintiffs could

1983 claim because the

constitutional

and

harm.

by

not succeed in

alleged policy was not

Id.
___

the

Noting that there

other

named

their section

the cause of

any

must be a "direct

causal link" between a municipal policy or custom and the alleged

-22-

constitutional violation

to find section 1983

liability, id. at
___

84 (quoting City of Canton v. Harris, 489 U.S. 378, 385 (1989)),

_______________
______

the

link'

district court

or

'moving

concluded

force'

that "in

behind

violations is the plaintiffs' . . .

this case,

any perceived

the 'causal

constitutional

continual, voluntary payment

of bribes to the defendants," id.

___

For

regarding

the

reasons

we

bribery and coercive

fact could

reasonably infer

have stated

in

our

extortion, we think

that the plaintiffs'

discussion

a finder of

payments were

made pursuant to coercive extortion, and thus did not necessarily

constitute "voluntary payment of bribes" with corrupt intent.

At

this stage, we must resolve reasonable inferences in favor of the

plaintiffs.

Thus, we

conclude that the plaintiffs could

show a

direct causal link between the defendants' coercive extortion and

the plaintiffs' losses.

As

coercive

result,

extortion, if

facto municipal
_____

policy.

we

turn

to the

found, could

be

question

of

whether

attributed to

some de
__

"An unconstitutional policy

or custom

may be inferred from

a single decision

or act .

. . [but]

the

isolated action must be taken by a municipal official with 'final

policy-making

business."

Mass.

authority'

Rodr quez
_________

v. Furtado,
_______

1991) (citations omitted).

particular

official

discretion in the

without

in the

more,

--

even

exercise of

give rise

to

relevant

area

771 F. Supp.

However,

a policymaking

a particular

municipal

-23-

of the

city's

1245, 1257

"[t]he fact

official

that a

--

function does

liability

(D.

based on

has

not,

an

exercise of that discretion."

Pembaur v. City of Cincinnati, 475

_______
__________________

U.S. 469, 481-82 (1986) (Brennan, J., plurality opinion).

In their pleadings,

aRusso

the plaintiffs

have alleged

that

as Mayor, Benjamin Zanni as a town councilman, and others

operated a de facto government which controlled the Town for more

________

than

decade,

routinely

engaging

corruption and other unlawful

in

bribery,

activities.

While a

extortion,

showing that

aRusso acted illegally in the exercise of his discretion as Mayor

might

not by itself give

that under

set

of

rise to municipal

liability, we think

these pleadings, the plaintiffs could

facts

from

which

trier

of

fact

indeed prove a

could

infer

an

unconstitutional

government.

For example,

extortion of

1985)

(5th

with respect

fact finder

could

1985), cert. denied,

_____________

(1987).

As a

U.S. 1064

(1986),

480

the plaintiffs' section 1983

U.S. 916

cert. dismissed,
_______________

claim on the

proven,

(1st Cir.

F.2d 161, 171

(1987)),

480 U.S.

cert.
_____

257

court's dismissal

pleadings, and we

remand for further proceedings on their claim.

B.
B.

conclude that

F.2d 801, 806

result, we reverse the district

Town's

done'" in the Town.

(quoting Grandstaff v. City of Borger, 767

__________
_______________

Cir.

to the

or developers, if

things are done and have been

v. City of Springfield, 777

____________________

granted, 475
_______

of

custom

outsiders, businessmen,

was "'the way

See Kibbe
___ _____

policy or

Blakey's Pro Hac Vice Admission

Blakey's Pro Hac Vice Admission
____________

The plaintiffs also appeal the

of admission pro hac vice

_____________

("Blakey").

On May

district court's denial

of their attorney,

G. Robert

15, 1995, the plaintiffs moved

Blakey

for Blakey's

-24-

admission pro hac vice.

____________

June

2,

1995.

On

The district court denied the motion

June

12,

1995, the

plaintiffs

on

moved for

reconsideration of

the court's order; the

district court denied

the motion for reconsideration on September 25, 1995.

The district court articulated two grounds for

Blakey's pro hac vice admission.

____________

that a previous

motion by the

denying

First, the district court noted

plaintiffs seeking the

admission

pro hac vice of another of their attorneys, Spaloss, had already

_____________

been granted.

Second, the district court expressed concern about

the amount of attorney's fees being generated by the plaintiffs.5

The Supreme Court has recognized that "in many District

Courts, the decision

an out-of-state

Heebe,
_____

argue

on whether to grant pro hac vice status to

_____________

attorney is

482 U.S. 641, 651

that the

purely discretionary."

n.13 (1987).

U.S. District

Court for

Frazier v.
_______

However, the plaintiffs

the District

of Rhode

Island is

not one

of

those courts.

Local

Rule

5(c) of

the

District of Rhode Island provides in pertinent part that

[a]ny

attorney who is

standing of the bar

a member

in good

of the United States

Supreme Court, of any other United States

District court,
of

any

or of the

state,

shall on
motion be
______________________

permitted to appear
____________________
year in a case
in

once in

a calendar

or group of related cases

association with a

of this court who

the practice

highest court

member of the bar

is actively engaged in

of law within

the State of

Rhode Island . . . .

D.R.I.

R. 5(c) (emphasis added).

The plaintiffs

argue that in

____________________

successful

attorney's fees

civil RICO
in

addition

plaintiff
to

1964(c).

-25-

treble

may collect
damages.

reasonable
18

U.S.C.

contrast

to the

Local

Rules of

circuit,

Rhode Island's rule does

the court's discretion.

be

permitted to

discretion of

Mass.

particular

appear") with
____

case

("may

by

other districts

not by its

in

this

terms provide for

Compare D.R.I. R. 5(c) ("shall on motion

_______

the Court

R. 6(b)

the

. .

D. Me. R.

. be

appear and

leave

3(d)(1) ("may

permitted to

practice

granted

in the

at the

practice"); D.

in this

court in

discretion

of

the

court"); D.N.H. R. 5(b)

("may at the discretion of

D.P.R. R. 204.2 ("may be permitted").

the District of Rhode

the court");

The plaintiffs assert that

Island has promulgated a rule

under whose

clear language pro hac vice admission is not discretionary.

____________

result,

matter

the plaintiffs

of law

in

claim,

the district

concluding that

it

Blakey's pro hac vice admission, or

_____________

court

As a

erred as

had discretion

to

deny

alternatively, the district

court abused whatever discretion it had.

We

do not consider the

issue of whether

this pro hac

_______

vice rule, which may be nondiscretionary, nonetheless leaves some

____

discretion

to deny

admission.

Even

assuming that

discretion

existed, the district court's denial of such admission to

Blakey

was

an abuse

articulated

of

that discretion.

grounds

simply

The district

cannot

support its

district court stated that "[w]e already have

. . [and we're] not going to take

may

has

permitted

multiple

action.

The

We

that the District of Rhode

pro hac vice

______________

admissions

proceedings that were contemporaneous with the instant case.

-26-

two

one pro hac vice .

____________

more than one on a case."

take judicial notice of the fact

Island

court's

in

See
___

Cohen
_____

v.

Brown
Univ.,
_____________

Furthermore, regarding

were represented

two;

F.

Supp.

expense, in

by more than

additionally, if

attorney

879

185

(D.R.I.

the instant

ten attorneys, the

the court

was concerned

1995).

case defendants

plaintiffs by

about excessive

fees, it could have addressed that matter later, if and

when the plaintiffs submitted their attorney fee application.

While

vice
____

it may

admission,

be that Blakey

see Leis
___ ____

v. Flynt,
_____

has no right

439

U.S. 438,

(holding that an attorney does not have a federal right

________

court pro hac vice

____________

another

matter.

admission), the rights of the

Particularly

here,

where

to pro hac
_______

452 (1979)

to state
_____

plaintiffs are

the

plaintiffs

identified

specific,

conclude that

logical

the district

reasons

for

their

court's decision, based

request,6 we

on criteria

that are not set forth in writing, that do not reasonably support

its

action, and

policy of

that do

not appear to

the District of Rhode

respond to

any general

Island, amounts to an

abuse of

discretion.

CONCLUSION
CONCLUSION

As

result of

district court is reversed.

reversed.
________

the

foregoing, the

judgment

Appellants are allowed costs.

____________________________

of the

____________________

See,
___

e.g.,
____

Kevin Roddy,

RICO in Business and Commercial

__________________________________

Litigation (1993) (describing Blakey as "the acknowledged author"

__________
of

the federal RICO

statute and of

RICO application).

-27-

"excellent" commentaries on

Concurrence Follows

-28-

LYNCH, Circuit Judge, concurring.

LYNCH, Circuit Judge, concurring.
_____________

the plaintiffs have stated

Civ.

relief

P.7

The

could be

a claim under Rule 12(b)(6),

plaintiffs' complaint

granted under

cannot

any set of

proved consistent with the allegations."

S. Ct. 798, 803 (1994).

because it imported

At issue is whether

a standing

victims."

aRusso, 906
______

(D.R.I. 1995).

"if

could be

NOW v. Scheidler,
___
_________

plaintiffs must be "innocent

F. Supp. 78, 81

be dismissed

facts that

The district court

into RICO

Fed. R.

114

dismissed the claims

requirement that

the

See Roma Constr. Co. v.

___ _________________

The

review by this

court of the dismissal is de novo.

1, 3 (1st

Cir. 1996).

in error.

The

here.

Because

Aulson v.
______

This ruling, one of

Blanchard, 83 F.3d
_________

law, was, I believe,

question is, concededly, one of

I analyze

the matter differently

first impression

than does

the

majority, I write separately.

The question of who has standing to bring actions under

RICO is a matter of federal law.

The pertinent provision of RICO

provides:

Any

person injured

property
section

by

in

reason

1962 of

of

this

his business
a

or

violation of

chapter

may

sue

therefor in any appropriate United States

district

court

and

shall

recover

threefold the damages he sustains and the

cost of the

suit, including a reasonable

attorney's fee.

18 U.S.C.

"any

1964(c).

person injured

There is no

qualification on

in his business

or property"

the phrase

limiting the

____________________

At oral argument, plaintiffs stipulated that their RICO claim

is not asserted against the town, but only against the individual
defendants.

-29-

phrase

to "innocent" persons.

individual or

entity capable

RICO defines a

of holding

"person" as "any

a legal

or beneficial

interest in property."

18 U.S.C.

1961(3).

On the language of

the statute, plaintiffs meet this definition.8

In general,

the intent

of Congress manifested

in the

text of the statute governs the issue of standing:

In determining the scope of a statute, we

look

first

to

its

language.

If

the

statutory language is unambiguous, in the

absence

of

"a

clearly

legislative intent to the

language must ordinarily

expressed

contrary, that
be regarded

as

conclusive."

United States v.
______________

580 (1981)

(quoting

Consumer Product Safety Comm'n v.

_______________________________

GTE Sylvania, Inc.,

__________________

447 U.S.

102,

of

108

(1980)).

primary guide

Turkette, 452
________

The language

to determining

U.S. 576,

RICO should

Congressional intent.

thus

be the

See Sedima
___ ______

S.P.R.L.
________

v. Imrex Co., 473

_________

the Supreme Court

RICO

in

has consistently

interpreting

requirements not

U.S. 479, 495

its

found in

an economic

motive behind

adhered to

meaning

and

the statutory

Scheidler, 114 S. Ct. at 806

_________

n.13 (1985).

Indeed,

the language

rejected

language.

of

surplus

See, e.g.,
___ ____

(holding that RICO does not require

the racketeering activity);

Reves v.
_____

Ernst & Young, 507 U.S. 170, 177-79 (1993) (looking to statutory
______________

language

or

to determine the scope

"participation"); Sedima,
______

private actions under RICO

of RICO liability for "conduct"

473 U.S.

at 488-92

(holding that

do not require a criminal

conviction

____________________

Of

course,

other questions

about

the parameters

of

RICO

standing are not raised by this case, which concerns only whether
there is an "innocent victim" requirement.

-30-

on the underlying predicate offenses); Turkette, 452 U.S. at 580________

87 (holding that

restricted

to

the term

"enterprise" as used

criminal enterprises);

Investor Protection
Corp.,
____________________________

(construing

the

word "injury"

503

to

cf. Holmes
___ ______

U.S.

require

258,

in RICO is

not

v. Securities
__________

265-69

(1992)

proximate cause

by

reference to

statutory history

and

judicial interpretation

of

same language in Clayton Act).

Despite the

in

the statutory

isolated

language, the

statement

requirement

lack of any "innocent

in

the

victim" requirement

district court

legislative history

relied upon

to

fashion

that only "innocent victims" be allowed to sue.

district court's

lifted out of

reliance on

context,9 to

a snippet of

an

The

legislative history,

create an absolute

standing bar

to

____________________

The court relies on a

October 7,
certain,

to see

organized
Cong.
debate

1970, that

statement by Representative Steiger on

"[i]t is

that innocent

crime have

a right

Rec. 35,346-47

(1970).

over

a proposed

the intent of
parties who
to obtain
That

are the

statement was

amendment, ultimately

characterization

1.4,

at 30 (1991).

of the remarks

The

as coming from

I am

victims of

proper redress."

would have authorized private injunctive relief.

Law of Civil RICO
__________________

this body,

116

made during

withdrawn, which

See Abrams, The

___
___

district court's

"the sponsor of

the

provision that

could cause a
bill filed
Judiciary
included

misapprehension.

in

the Senate,

Committee had
"the

RICO

1964(c), which
debate in

eventually created

S.

a private

In fact, RICO
30.

By

originated in

October 7,

already reported

provision

out that

ultimately

enacted

created a treble damage remedy."

which Representative

civil remedy"

1970,

the

bill, which
as

section

Id. at 30.
___

Steiger made the

The

quoted remarks

was over private injunctive relief.

Further, Representative
remarks

relied

upon

"organized crime."
Senate

that

organized

the

crime.

by

Steiger referred,
the

district

Yet it was
reach

of

"Congress

in

court,

the very
to

clear to both the

civil

RICO

knew what

extended
it

same

victims

of

House and the

well

was doing

beyond
when

it

adopted commodious language capable of extending beyond organized

crime."

H.J., Inc. v. Northwestern Bell Tel. Co., 492 U.S. 229,

___________
__________________________

-31-

anyone

not "innocent," was inappropriate.

read this statement to

"[E]ven if we were to

say what [defendants] say[] it

means, it

would not amount to more than background noise drowned out by the

statutory

language."

Holmes, 503
______

selection from the legislative

U.S.

at

269

n.15.

This

history cannot overcome the plain

text of RICO, which is unambiguous.

It represents "a rather thin

reed upon which to base a requirement . . . neither expressed nor

. .

fairly

implied in

the

Scheidler, 510 U.S. at 805.

_________

the

legislative history

says only

that the

operative sections

of

[RICO]."

Even were there occasion to consider

relied upon by

statute will

the district

protect innocent

court, it

victims, not

that the statute will deny standing to those who are not innocent

victims.

See Turkette, 452

___ ________

inference[s]"

need

not be

U.S. at 591

drawn

from

(noting that "negative

positive statements

in

legislative history).

The

RICO's

Supreme Court

language:

racketeering

injure the

"If

activity

has emphasized

the defendant

. .

and

the broad

engages

reach of

in a

pattern of

the racketeering

activities

plaintiff in his business or

property, the plaintiff

____________________

246 (1989); see also Sedima, 473 U.S. at 499 ("Congress wanted to
________ ______
reach both

'legitimate'

and 'illegitimate'

enterprises.

The

former enjoy neither an inherent incapacity for criminal activity

nor

immunity from its consequences.

used against respected businesses

of

specifically

identified

The fact that

1964(c) is

allegedly engaged in a pattern

criminal

conduct

is

hardly

sufficient

reason

for

assuming

misconstrued." (citation
("RICO's

name

Developments

omitted)); Abrams,

might suggest

reaches primarily

that the

that the

provision

is

being

supra,
_____

1.1,

at 5

private cause

racketeers and other organized

since RICO's

1970

of action

crime figures.

enactment, however,

have

laid

firmly to rest any suggestion of limited reach.").

-32-

has

a claim under

1964(c).

language for an additional

at 495.

There is nothing

There

is no room in the statutory

. . . requirement."

Sedima, 473 U.S.

______

in the language of RICO which suggests

that Congress

alleged

intended to

to have

deny standing

committed

bribery or

to plaintiffs who

are

paid extortion,

whether

analytically

distinct

under coercion or not.

Standing

involves

requirements: injury-in-fact,

injury and the conduct

be redressed.

61

(1992).

satisfied

alleged

three

causal connection

complained of, and whether the

the

wrong may

Lujan v. Defenders of Wildlife, 504 U.S. 555, 560_____

_____________________

All

on the

three elements

pleadings

here.

injury-in-fact (financial

of

the standing

Plaintiffs have

loss),

(defendants' corruptly demanding payments),

will be redressed by

damages).

between

See
___

causal

inquiry

adequately

connection

and that the

a favorable decision (availability of

Sedima,
______

473

U.S.

at

496

(noting

are

that

injury

RICO

RICO

plaintiff

has standing

only

if "he

has

been injured

in

his

business or property by the conduct constituting the violation");

Libertad v. Welch, 53 F.3d 428, 436 (1st Cir. 1995).

________
_____

case

others.

where the

Cf.
___

plaintiffs attempt

Carter v.
______

Berger, 777
______

to

assert the

F.2d 1173 (7th

This is not

rights of

Cir. 1985)

(county, not individual taxpayers, may sue under RICO for bribery

scheme resulting in underpayment of taxes).

Accordingly, I would

end the standing analysis there.

In

standing

considering whether there

requirement, I

doubt

is an

that Congress

-33-

"innocent victim"

intended for

the

federal

courts to

defendants argue

found

in the

refer to

and incorporate

that the innocent

distinction,

bribery and coercive

found in

extortion.

state law.10

victim requirement is

some

state laws,

to be

between

They buttress their argument by

reference to provisions

of the Model Penal Code.

whether

in

the activities

The

which these

The matter of

plaintiffs engaged

fit

within the category of bribery or of coercive extortion is, in my

view, not relevant to the issue of standing.11

Although RICO references state law in its definition of

"racketeering

activity,"12 it

makes no

substantive distinction

____________________

10

Caselaw holding

to

their property apart from the

and so

that minority shareholders suffer

injury the corporation suffers

have no standing to sue under RICO provides no comfort to

defendants.

Such caselaw

reference should be made

does not

refer to
as opposed

(5th

to corporations to

Cir. 1988),

Indus., 814 F.2d

______
principles

See, e.g.,
___ ____

of

22, 29-30

interests of shareholders

Leach v. FDIC,
_____
____
U.S.

this circuit,

hold that a

former may

860 F.2d 1266

905 (1989).
see Roeder
___ ______

(1st Cir. 1987),

of corporate law to

sue under RICO to vindicate a

the contours

determine whether the

cert. denied, 491

_____________

including that

that

It is true that some decisions

state law to define property

a RICO action.

caselaw,

support the principle

to state law to determine

of any "innocent victim" defense.

bring

no injury

refers to

Other

v. Alpha
_____

general

shareholder may not

duty owed to the corporation.

Rand v. Anaconda Ericsson, Inc.,

____
________________________

794 F.2d 843,

849 (2d

See
___

Cir.),

cert. denied, 479 U.S. 987 (1986); Warren v. Manufacturer's Nat'l

____________
______
____________________
Bank of Detroit, 759
_________________
supra,
_____

F.2d 542,

3.3.6, at 147-52.

545

(6th Cir.

In any event, the

1985); Abrams,

issue of whether

state law should be referenced in defining the term "property" is

simply not present in this case.

11

If it were, then I

is impossible

to

would agree that on the facts pleaded

draw the

conclusion that

this case

it

involves

exclusively bribery.

12

This

reference to

definition of

state law

predicate offenses.
________

is in

the context

From this,

of RICO's

defendants would

infer a Congressional desire -- expressed nowhere in

the statute

-- to reference state law with respect to affirmative defenses as

________
well.

-34-

between "bribery"

and "extortion."

activity" in 18 U.S.C.

or

RICO

1961(1)(A) to mean, inter alia, "any act

_____ ____

threat involving . . . bribery [or]

chargeable

more than

under State

one

year."

defines "racketeering

law and

Thus,

extortion . . . which is

punishable by

the federal

imprisonment for

statute

recognizes,

without distinction, acts "involving" either bribery or extortion

as predicate offenses

defining

such a

for purposes

of RICO.

predicate offense,

state

Further, even

law plays

role:

The labels placed

not

determine

proscribes
RICO

on a state statute
whether

bribery

statute.

that

for purposes

Congress

do

statute
of the

intended

for

"bribery" to be defined

generically when

it

a predicate act.

H.R.

included bribery as

Rep. No. 1549, 91st Cong., 2d Sess.

in

a limited

(1970), reprinted in 1970 U.S. Code Cong.

_________ __
& Admin. News 4007, 4032 ("State offenses
are

included by

generic designation.").

Thus, any statute that proscribes conduct

which

could

be

generically defined

bribery can be the

as

basis for a predicate

act.

United States v.
_____________

cert. denied,
____________

Forsythe,
________

Garner, 837
______

486

560 F.2d

U.S. 1035

1127,

F.2d 1404, 1418

(1988);

1137

(3d

(7th Cir.

accord United States

______ ______________

Cir.

1977).

plaintiffs' complaint also alleges, in addition

predicate offense,

U.S.C.

delay,

a predicate federal offense,

1951 (wrongful use

and effect

1987),

the

to the state law

violation of 18

of official authority

commercial activity in

Here,

v.

to obstruct,

interstate commerce).

That statute also does not draw the distinction defendants urge.

Nonetheless,

standing

issues

aside,

the

question

remains

whether there is some form of requirement in RICO, which

-35-

may be tested on a motion to dismiss, that plaintiffs be innocent

victims.

At least two other possibilities

requirement is inherent

emerge:

in the cause of action or

that such a

that it is an

affirmative defense.

To the extent that

the existence of a cause

of action

is a matter analytically distinct from the issue of standing, see

___

Libertad,
________

here.13

that

53 F.3d at 438 n.5, a

There is nothing in

only innocent

Scheidler,
_________

114 S.

unambiguous and

the language of RICO which suggests

plaintiffs

Ct.

[the]

at

cause of action has been stated

806

have a

cause

of action.

("[T]he statutory

legislative history

See
___

language

[evidences] no

is

such

'clearly expressed legislative intent to the contrary' that would

warrant

a different

construction." (citation omitted)).

Under

the proximate causation test of Holmes, 503 U.S. at 268, there is

______

cause of

action stated.14

The damages

alleged here

on the

____________________

13 But cf. Sunstein, Standing and the Privatization of Public

________
___________________________________________
Law,
___

88. Colum. L. Rev.

1432, 1433 (1988)

(arguing that "[f]or

purposes of

standing, the

principal question should

be whether

Congress has created a cause of action").

14

It may also be,

as the district court

suggested, see Roma,

___ ____

906 F. Supp. at 82 n.1, that the plaintiffs' relative culpability

may

be

considered

in

deciding, under

Holmes,
______

proximate causation based on the evidence

the

presented.

issue

of

See, e.g.,
___ ____

Perma Life Mufflers, Inc. v. International Parts Corp.,

_________________________
_________________________

392 U.S.

134,

relative

142-47

culpability,
analysis),

(White,
in

J.,

concurring)

antitrust

context,

overruled on other grounds by

_______________________________

Independence Tube Corp., 463

_________________________
proximate

as

cause may not be

U.S. 752

(treating
part

causation

Copperweld Corp.
________________

(1984).

decided at the

of

The

v.

issue of

pleading stage given

the allegations in this complaint.

Relative culpability may also

damages.

The

opinions in

be relevant to the

Perma Life
_____ ____

posit that

measure of

the benefits

received by a plaintiff from its participation in wrongdoing "can

of

course be

taken

into consideration

-36-

in computing

damages."

pleadings are

neither remote nor speculative.

have

direct

alleged

requires.

injury

Holmes, 503
______

to their

These plaintiffs

property,

U.S. at 265-69;

see also
________

which

Holmes
______

id. at 276-86
___

(O'Connor, J., concurring) (analyzing the causation issue as part

of

the standing

issue).

Again, viewing

whether

there is

an "innocent

stating

of

pertinent.

cause

action, I

this as

victim" requirement

do

not

believe

a matter

of

inherent in

state law

is

The

"innocent

district

court

victim" argument

defense.

If so,

contours of the

may be

there are

defense.

defense if the plaintiff

opinion also

suggests

available as

a range

that

an affirmative

of possibilities

The range includes

for the

a sort of absolute

has done anything wrong, which

is what

the district court thought and

to which it applied the label

an in pari delicto
__ ____ _______

At the other end of

the

position

irrelevant.

defense.15

that

the

That,

relative

guilt

believe, cannot

of

be

the

the

of

the range is

plaintiff

so,16 and

even

is

the

____________________

Perma Life,
_____ ____
Antitrust Law
_____________

15

392 U.S.

see also
________

II Areeda &

Hovenkamp,

365c3, at 248 (1995 rev. ed.).

This common

delicto

at 140;

law

defense derives

potior est conditio defendentis:

from

the Latin

in pari
__ ____

"In a case of equal or

_______

______ ___ ________ ___________

mutual fault .

the better one."

. the condition

of the [defending] party

Black's Law Dictionary 791 (6th ed. 1990).

______________________

is

The

in pari delicto defense, though "[i]n its classic formulation . .

__ ____ _______
. narrowly limited

to situations where the

plaintiff truly bore

at least substantially equal responsibility for his injury . . ."

is

now generally given "a broad application to bar actions where

plaintiffs simply
of wrongdoing'
Inc.
____

have been involved generally in 'the same sort

as defendants."

Bateman Eichler, Hill Richards,

________________________________

v. Berner, 472 U.S. 299, 306-07 (1985) (quoting Perma Life,

______
_____ ____

392 U.S. at 138).

16

See, e.g., discussion in footnote 14 supra.

___ ____
_____

-37-

plaintiffs do not

defenses,

argue that position.

While some

affirmative

such as the statute of limitations, may on occasion be

decided on the pleadings, the assertion of an affirmative defense

here would not afford a basis to dismiss the complaint under Rule

12(b)(6).

defense,

Under

any of

the plausible articulations

the inferences to be drawn

of such

from the facts pled here do

not permit dismissal.

I would

reject the

proposition, urged

by defendants,

that an absolute in pari delicto defense is embedded in RICO.

__ ____ _______

In

construing

the language of RICO, the Supreme Court has looked to

precedent

under the Clayton Act, the statute upon which RICO was

modeled.

See Holmes, 503 U.S. at 268 ("We may fairly credit the
___ ______

91st

Congress,

interpretation

Congresses

Clayton

which

enacted

federal

courts

RICO,

had

given

with

knowing

the

words

the

earlier

had used first in [the Sherman Act], and later in the

Act's

4.

It

used the

same words,

and we

can only

assume that it intended them to have the same meaning that courts

had

already

given them."

(citations

omitted)).

The

Supreme

Court, in Perma Life Mufflers, Inc. v. International Parts Corp.,

_________________________
_________________________

392

U.S.

134, 138-40

(1968),

overruled on other grounds by

________________________________

Copperweld Corp. v. Independence Tube Corp., 463 U.S. 752 (1984),

________________
_______________________

explicitly

rejected the existence of

under the Clayton Act.

the

Court

reaffirmed

an in pari delicto defense

__ ____ _______

In Pinter v. Dahl, 486 U.S.

______
____

that

in

its

contemporary

622 (1988),

"broadened"

construction,

district

precisely the

court

here,

the

construction

in
__

pari
____

contemplated

delicto
_______

defense

by

the

"is

not

-38-

appropriate

statutes."

in

litigation

arising

under

federal

regulatory

Id. at 632; see Sullivan v. National Football League,

___
___ ________
________________________

34 F.3d 1091, 1107-09 (1st

Cir. 1994), cert. denied, 115 S.

____________

Ct.

1252

(1995).

would

seem

antitrust

For the

to be

treble

Seagram & Sons,

_______________

same reasons, an

unavailable, as

damage

it is

action.

340 U.S.

"unclean hands" defense

See
___

211, 214

not

a defense

to an

Kiefer-Stewart Co.
___________________

v.

(1951), overruled on other

___________________

grounds by Copperweld Corp. v. Independence Tube Corp., 463 U.S.

___________ ________________
_______________________

752

(1984);

see also
___ ____

Simpson
_______

v. Union Oil Co., 377

_______________

U.S. 13

(1964).

That

there is

no defense at

plaintiffs

in RICO

there is no in pari delicto defense does not mean

__ ____ _______

an

all in which

may be weighed.

It is

"equal involvement"

involvement" defense

the relative guilt

of the

far more likely that there is

defense similar

recognized under

to the

the Clayton Act

"equal

in Perma
_____

Life.17
____

Recognition of such a defense, patterned on the Clayton

____________________

17

In

Perma Life,
__________

opinions,
defense.

five concurring Justices,

recognized

the

existence

of

in four

the equal

separate

involvement

Justice White wrote that he "would deny recovery

plaintiff and defendant

for [the] injury

bear substantially equal

resulting to one of them . .

146 (White, J., concurring).

the fault of the

where

responsibility

. ."

392 U.S. at

According to Justice Fortas, "[i]f

parties is reasonably within the

if the

'delictum' is approximately
________

should

bar recovery."

'par' -___

same scale --

then the

doctrine

392 U.S. at 147 (Fortas, J., concurring).

Justice Marshall wrote that he "would hold that where a defendant

in

a private antitrust suit can show that the plaintiff actively

participated in

the formation

and implementation of

scheme,

substantially

equally at

should
U.S.

and is

fault, the

an illegal

plaintiff

be barred from imposing liability on the defendant."

at 149 (Marshall, J.,

opinion

joined by

should

be

substantially
U.S. at 156

allowed

concurring).

Justice Stewart,
in

cases

Justice

indicated that

where

"the

Harlan, in an

the defense

plaintiffs

as much responsible . . . as the defendants."

(Harlan, J.,

concurring in part

-39-

392

and dissenting

were

392

in

Act

defense,

was

extended

to securities

Eichler, Hill Richards, Inc. v.

______________________________

(1985).

Berner, 472
______

in

U.S. 299,

Bateman
_______

306-11

The equal involvement defense is more demanding of those

asserting it than the

claims of

actions

in pari delicto defense and

__ ____ _______

plaintiff who

"truly bore

at least

only bars the

substantially

equal responsibility [as the defendant] for the violation" of the

federal law at issue.

Id. at 308.
___

This circuit

defense

in antitrust

plaintiff's

has also recognized an

actions.

'complete,

participation' in

voluntary,

an illegal

precludes recovery

Sullivan, 34
________

and

F.3d at

1107 ("A

substantially

practice under the

for that antitrust

Inc. v. Raytheon Co.,

____
____________

equal involvement

equal

antitrust laws

violation." (quoting CVD,

____

769 F.2d 842, 856

(1st Cir. 1985),

cert.
_____

denied, 475 U.S. 1016 (1986))).

______

Testing the

Supreme Court's

this complaint

allegations of

articulation of

survives

a Rule

the complaint

the equal

12(b)(6)

involvement defense,

motion.

defense:

a private action for damages . . . may be

barred on the

against the

grounds of the plaintiff's

Under

that

own

culpability

direct

result

plaintiff
equal

bears

only
of his

where
own

at least

responsibility for

he seeks to

(1)

as

actions, the
substantially
the violations

redress, and (2)

preclusion

of suit would not significantly interfere

with the effective enforcement

of [RICO]

and the protection of the . . .

public.

____________________

part).

-40-

Bateman,
_______

court

472 U.S. at

have

cautioned

310-11.

Both

against

the Supreme Court

deciding such

and this

defenses

in

absence of factual development.

See id. at 311 n.21 ("We

___ ___

however,

of

the

respondents'

inappropriateness

fault solely on

resolving

the basis

the

note,

the question

of the

of

allegations set

forth in the complaint."); Sullivan, 34 F.3d at 1109 ("Ultimately

________

. . . these are factual questions for the jury . . . .").

The

favor of

defendants make

a misplaced

the more defendant-helpful

attempt to

in pari delicto
__ ____ _______

relying on Tafflin v. Levitt, 493 U.S. 455 (1990).

_______
______

urge,

weakens the

analogy

of RICO

to

argue in

defense by

Tafflin, they
_______

the Clayton

Act,

and,

therefore, to

the equal involvement

Court held that RICO

federal

defense.

In Tafflin,
_______

did not vest exclusive jurisdiction

the

in the

courts where the language of the statute did not purport

to do so and

the legislative history did not

addressed the question.

argument

Id. at 460-62.
___

The

show that Congress

Court rejected the

that it should derive such an exclusivity from the fact

that actions under the Clayton Act may only be brought in federal

court.

Id. at 462-63.
___

provide the

operated

answer because

against a

when there was

There

is

The analogy to the Clayton

no

Congress was

backdrop of

also presumed

well-established

exclusive federal jurisdiction.

such

defendants' favor

"judicial default

here.

Cf.

Act did not

rule"

law governing

Id. at
___

which

Landgraf v. U.S.I.

to have

459-60.

operates in

Film Products,

___

114 S. Ct. 1483,

________

_____________________

1505 (1994) (discussing judicial

default rules

in the context of retroactivity of statutes).

-41-

Similarly, there

Supreme

Court's

rejection

"antitrust injury" rule

is no

in

to RICO.

comfort for defendants

Sedima
______

of

application

"[T]his is

so because

in the

of

the

'RICO

injury'

would [otherwise] be

an unintelligible requirement, not

because there is no parallel between

v.

Berger, 777
______

F.2d

1173, 1176

the two statutes."

(7th

Cir. 1985)

Carter
______

(noting

the

Court's remark in Sedima, 473 U.S. at 489-90 & n.8, that Congress
______

relied on the analogy to antitrust).

Indeed, RICO was enacted in

1970, after the Perma Life

__________

decision, of which Congress was undoubtedly aware.

of

RICO

on the

Clayton Act

was done

The modelling

against the

judicial recognition of an equal involvement defense.

of

legislative history relied upon

it

should be considered

the proposition

backdrop of

The piece

by defendants, to the extent

at all, may be

equally read to support

that Congress implicitly allowed

equal involvement defense as under the Clayton Act.

an affirmative

But defendants do

Clayton Act is not perfect.

have a

point.

The

analogy to

the

Indeed, the American Bar Association

report from which the civil RICO provisions emerged suggests that

not all the accoutrements

into

RICO.

See 115
___

of the Clayton Act should

Cong. Rec.

6995 (1969) (Report

Antitrust Section); Abrams, supra,

_____

situation where

Congress did

1.4, at

25-26.

not explicitly

be imported

of A.B.A.

This may be

contemplate the

question and so congressional "intent" in the classic formulation

simply does

not

exist.

The

courts

delicate task of providing the answer.

-42-

then are

left

with

the

very

"innocence" for

much

that the

purposes of the equal

ordinarily involve

as the

doubt

definition

The Supreme Court

state law to define the defense

nor should we do so here.

to define the defense under

of

involvement defense would

reference to and incorporation

majority asserts.18

Perma Life.
_____ ____

federal

of state law,

did not look

to

in either Perma Life or Bateman,

_____ ____
_______

Nor has this court looked to state law

the Clayton Act in the

aftermath of

To say there

the

is some form of

equal involvement

content of such

defense does

a defense.

Even

Perma Life did not agree on

_____ ____

In the absence of

of the

honing

reluctance

affirmative defense like

not describe

precisely the

the Supreme Court Justices

the content.

in

See supra footnote 17.

___ _____

factual findings in which to set the questions

of such

defense,

to engage now in

there is,

and

such refinement.

should

be,

The precision of

any standard awaits further development.

It is enough now to say

that

-- that

the positions

disables

a plaintiff

at the

extremities

or that

wrongdoing is

any wrongdoing

irrelevant --

are

untenable.
____________________

18
has

There may be situations, not present here, in which the state

such

an

enforcement of

exceptionally
its

own

laws

strong

policy

that

Congress

interest
would

in

choose

the

to

accommodate
may be

that interest in the

more true under

Congress has

referred

RICO than other

to violations

predicate offenses under

bribery

and

of an

law in

1961(1)(A).

This

much as

defining

However,

the

in enforcement is not the same as the

interest

extortion

statutes in as

of state

18 U.S.C.

recognition of an interest
recognition

RICO enforcement scheme.

in a

defense.

statutes

do

overwhelming interest in affording

not

The

Rhode

evidence

Island
such

an

defendants an in pari delicto

__ ____ _______

defense, even before reaching the issue of whether Congress would

have wanted to import Rhode Island law into RICO.

-43-

The

equal involvement

defense

recognized

under

the

Clayton

Act and

the Securities

federal

policy as recognized by

Act derives

its contours

federal statutes.

from

There is no

reason not to apply that paradigm to RICO.19

As to the claim under 42 U.S.C.

1983, the plaintiffs

have adequately alleged that the harm they suffered was caused by

the

extortionist

policies

officials are claimed

to

delve into

bribery.

the

and

practices

to have engaged.

distinction between

in

which

Again, there

the

town

is no need

coercive extortion

and

____________________

19

The district

rewarding people

court

was

who pay

very troubled

bribes to public

by

the

notion of

officials with

treble damages, whatever the circumstances of the payment.

RICO

Roma,
____

906 F. Supp. at 82-83.

That is certainly a

Policy arguments may be

made both for and against such a result.

In

reasonable concern.

the antitrust field, the Supreme Court has noted that because

of the "important public purposes" served by private suits, it is

inappropriate
Perma
_____

to invoke

"broad common-law barriers

Life, 392 U.S. at 138.

____

reward of
than
the

Thus "the plaintiff who reaps the

treble damages may

the defendant, but the

to relief."

be no

less morally

law encourages his

overriding public policy in

reprehensible

suit to further

favor of competition."

Id. at
___

139.

This strong
RICO,

a statute

enforcement rationale
intended

to increase

striking at criminal activity.

unfair

to deny

where their

plaintiffs any

fault is relatively

certainly
the

is present

arsenal of

in

weapons

In addition, it may be inherently

ability to
small.

pursue a

RICO claim

An absolute

"innocent

victim" requirement would create such an undesirable imbalance.

-44-