Page:Michael Anthony Jewelers v. Peacock Jewelry.pdf/12

 the charms were not original at the time it applied for copyright protection, given its long history of casting the Old Mr. Craftsman’s charms and the fact that the Old Mr. Craftsman had sold each of the charms prior to the date MAJ claimed to have first published them. See ¶ 142. These allegations are sufficient to survive dismissal under rule 9(b). Accordingly, MAJ’s objections on those grounds are rejected, and the application to dismiss the antitrust counterclaim is denied in all respects.


 * 2. The Civil RICO Counterclaim.

The Racketeer Influenced and Corrupt Organizations Act prohibits four types of conduct: using or investing income derived from a pattern of racketeering to acquire an enterprise engaged in or affecting commerce, 18 U.S.C. § 1962(a); acquiring an interest in or control of such an enterprise through a pattern of racketeering activity, id. § 1962(b); conducting the affairs of an enterprise through a pattern of racketeering activity, id. § 1962(c); and conspiring to commit any of the previously mentioned violations, id. § 1962(d). See Jacobson v. Cooper, 882 F.2d 717, 719 (2d Cir.1989). Section 1964(c) creates a private right of action. Peacock’s amended countercomplaint asserts violations of all four RICO subsections.

In order to satisfy the threshold pleading requirements under any of those subsections, Peacock must allege the following: that the defendants (2) through the commission of two or more predicate acts (3) constituting a pattern (4) of “racketeering activity” (5) directly or indirectly invest in, or maintain an enterprise in or participate in, (6) an “enterprise” (7) the activities of which affect interstate or foreign commerce. Moss v. Morgan Stanley, Inc., 719 F.2d 5, 17 (2d Cir.1983), ''cert. denied'', 465 U.S. 1025, 104 S.Ct 1280, 79 L.Ed.2d 684 (1984). In addition, because this is a civil action, Peacock must demonstrate that it was injured in its business or property “by reason of” the commission of the predicate acts. Sedima, S.P.R.L. v. Imrex, [sic] Co., 473 U.S. 479, 496, 105 S.Ct. 3275, 3285, 87 L.Ed.2d 346 (1985); Sperber v. Boesky, 849 F.2d 60, 61 (2d Cir.1988).

During the first oral argument in September 1991, MAJ asserted that the RICO counterclaim was unduly vague and suffered from a number of substantive deficiencies. Peacock appears to have taken MAJ’s criticisms into account in drafting the amended counterclaim, which attempts to set forth the contours of the RICO violation with greater specificity. According to the amended countercomplaint, “[t]he racketeering enterprise involved in this case is MAJ, and the ‘persons’ involved in directing that enterprise are Michael and Anthony Paolercio.” ¶ 167. The predicate acts are of three types: violations of the Mann Act, state and federal narcotics offenses, and various acts of mail fraud. ¶ 169. The amended countercomplaint further alleges that the commission of these predicate acts comprised “a common scheme to profit from the predicate felonies, and advance MAJ in the market.” ¶ 171.

Despite Peacock’s efforts to clarify the pleading of its RICO claims, MAJ argues that dismissal is still warranted for a number of reasons, including Peacock’s failure to allege two viable predicate acts. As the following discussion of each of the predicate acts will reflect, we agree and therefore dismiss the RICO counterclaim for failure to state a cause of action.

The Narcotics Offenses.

As one of the predicates for its RICO violation, Peacock alleges that MAJ engaged in “[m]ultiple acts of the possession and distribution of controlled substances in violation of state and federal laws.” ¶ 169(c). As the basis for those charges, Peacock points to its allegations regarding the provision of cocaine to MAJ’s customers and employees. MAJ contends that these allegations are too vague to survive even the requirements of “notice pleading” under Fed.R.Civ.P. 8, and that they therefore cannot serve as an adequate predicate for the RICO violation.

We have reviewed Peacock’s allegations with respect to the alleged narcotics offenses, and agree that they are too imprecise to provide MAJ with notice of the conduct with which it is being charged. As