APPENDIX 10.-BRIEF OF THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTS AS AMICUS CURIAE IN SUPPORT OF RESPONDENTS IN THE CASE OF H.J. Inc., et al. v. Northwestern Bell Telephone Co., et al.

BRIEF OF THE AMERICAN INSTITUTE
OF CERTIFIED PUBLIC ACCOUNTANTS

AS AMICUS CURIAE IN SUPPORT OF RESPONDENTS

LOUIS A. CRACO
WILKIE FARR &
GALLAGHER
153 East 53rd Street
New York, NY 10022
Of Counsel

PHILIP A. LACOVARA
Counsel of Record
GEOFFREY F. ARONOW
DAVID PAUL NICOLI

HUGHES HUBBARD & REED
1201 Pennsylvania Ave., N.W.
Washington, D.C. 20004
(202) 626-6200
Attorneys for American

Institute of Certified
Public Accountants

INTRODUCTION: A PROPOSED JURY INSTRUC-

TION ON THE "PATTERN" ELEMENT

ARGUMENT

I. RICO'S "PATTERN" ELEMENT REQUIRES

ALLEGATIONS AND PROOF THAT "RACK-

ETEERING ACTIVITY" WAS TYPICAL OR

CHARACTERISTIC OF THE CONDUCT OF

THE ALLEGEDLY CORRUPT PERSON OR

ENTERPRISE

A. The Plain Meaning Of “Pattern" Is That The

Sample Of Actions Is "Typical" Or "Charac-

teristic"

B. RICO's Legislative History Also Supports

Interpreting The "Pattern" Element To Re-

quire A Showing That The "Racketeering

Activity" Was Typical Or Characteristic Of

The Conduct Of The Allegedly Corrupt Per-

son Or Enterprise

1. Congress Intended to Protect Legitimate

Businesses from Professional Criminals

Without Attempting to Outlaw Directly
Membership in Organized Criminal As-
sociations

2. Congress Created and Then Tightened

the "Pattern" Element as Part of the

Effort to Arrive at a Functional Defini-

tion of Professional or Habitual Criminal

Activity

C. The Rule Of Lenity Also Supports The Inter-

pretation Of "Pattern" To Require Allega-

tions And Proof That The Criminal Behavior

Was Characteristic Or Typical

ii

TABLE OF CONTENTS-Continued

II. THE CONTEXT IN WHICH THE "PAT-

TERN" ELEMENT ARISES VARIES WITH-

IN RICO, AND ITS APPLICATION TO IDEN-

TIFY CONDUCT THAT CHARACTERIZES

HABITUAL CRIMINALITY MUST VARY DE-

PENDING ON THE RICO SUBSECTION AT

ISSUE.

A. The "Relationship" Between The "Racket-

eering Activity" And RICO's Proscribed

Conduct

B. The "Continuity" Of "Racketeering Activity"

In Connection With RICO's Proscribed Con-

duct .....

III. OTHER PROPOSED INTERPRETATIONS OF

THE "PATTERN" ELEMENT OF RICO FAIL

TO CARRY FORTH ITS MEANING AND

PURPOSE

A. The "Multiple Transactions" Test

B. The Interpretation Proposed By The Solici-

tor General ......

23

IV. UNDER THE PROPER INTERPRETATION

OF "PATTERN," THE JUDGMENT BELOW

IS CORRECT

CONCLUSION

Cases:

iii

TABLE OF AUTHORITIES

Barticheck v. Fidelity Union Bank/First Nat'l
State, 832 F.2d 36 (3d Cir. 1987)

Blue Chip Stamps v. Manor Drug Stores, 421 U.S.
723 (1975)

Page

22

2,23

Dunn v. United States, 442 U.S. 100 (1979) ...........
Elliott v. Chicago Motor Club, Ins., 809 F.2d 347
(7th Cir. 1986) ...

16

21

Exeter Towers Assoc. v. Bowditch, 604 F. Supp.
1547 (D. Mass. 1985)

Gatoil (U.S.A.), Inc. v. Forest Hill State Bank, 822
F.2d 55 (4th Cir. 1987)...

8

Ghouth v. Conticommodity Services, Inc., 642 F.
Supp. 1325 (N.D. Ill. 1986) .....

Huddleston v. United States, 415 U.S. 814 (1974)..
International Data Bank, Ltd. v. Zepkin, 812 F.2d
149 (4th Cir. 1987)

Lipin Enterprises Inc. v. Lee, 803 F.2d 322 (7th
Cir. 1986)

7

Morgan v. Bank of Waukegan, 804 F.2d 970 (7th
Cir. 1986)...

19

Papai v. Cremosnik, 635 F. Supp. 1402 (N.D. III.
1986)....

Richards v. United States, 369 U.S. 1 (1962)

Roeder v. Alpha Indus., Inc., 814 F.2d 22 (1st Cir.
1987)

22

Russello v. United States, 464 U.S. 16 (1983) ...
Sedima, S.P.R.L. v. Imrex Co., Inc., 473 U.S. 479

..passim

(1985)

passim

Sun Sav. & Loan Ass'n v. Dierdorff, 825 F.2d 187
(9th Cir. 1987)

21

Tellis v. United States Fidelity & Guar. Co., 826

F.2d 477 (7th Cir. 1987).....

19

Thompson v. Wyoming Alaska, Inc., 652 F. Supp.

1222 (D. Utah 1987)

20

Torwest DBC, Inc. v. Dick, 628 F. Supp. 163 (D.
Colo. 1986), aff'd, 810 F.2d 925 (10th Cir.
1987)

18

Torwest DBC, Inc. v. Dick, 810 F.2d 925 (10th Cir.

1987)

28

iv

TABLE OF AUTHORITIES-Continued

Page

United States v. Anderson, 626 F.2d 1358 (8th Cir.
1980), cert. denied, 450 U.S. 912 (1981)
United States v. Campos-Serrano, 404 U.S. 293
(1971)

18

15

26

United States v. Cauble, 706 F.2d 1322 (5th Cir.
1983), cert. denied, 465 U.S. 1005 (1984)
United States v. Elliott, 571 F.2d 880 (5th Cir.),
cert. denied, 439 U.S. 953 (1978)

United States v. Gambino, 566 F.2d 414 (2d Cir.
1977), cert. denied, 435 U.S. 952 (1978)
United States v. Local 560, 780 F.2d 267 (3d Cir.
1985), cert. denied, 476 U.S. 1140 (1986)
United States v. Navarro-Ordas, 770 F.2d 959
(11th Cir. 1985), cert. denied, 475 U.S. 1016
(1986).

18, 27

27

27

27

United States v. Turkette, 452 U.S. 576 (1981)....8, 15, 17,

27

Statutes:

Organized Crime Control Act of 1970, Pub. L. No.