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F.2d 531, 538 (4th Cir. 1988) ("the heightened civil and criminal penalties of RICO are reserved for schemes whose scope and persistence set them above the routine'

[because they involve an] extended, widespread, or particularly dangerous pattern of racketeering").

The Eighth Circuit's "multiple schemes" standard is one salutary effort to return civil RICO to its congressionally intended scope. By requiring that the defendant must have engaged in multiple criminal schemes, the Eighth Circuit eliminates most routine commercial disputes from the reach of the statute, thereby curbing the primary abuse of civil RICO. See 116 Cong. Rec. 35193 (1970) (remarks of Rep. Poff) (emphasis added) (a pattern of racketeering activity requires "at least two independent offenses").

There is, however, a more refined standard that is securely grounded in the language and history of RICO and that, we believe, better serves to restrict the statute to its intended sphere. This approach recognizes that the concepts of "pattern" and "continuity" are composed of two elements: recurrence and typicality. Under this test, predicate acts of racketeering have the necessary continuity to form a pattern where (i) at least two of the acts occurred at substantially different times as part of separate criminal episodes or transactions, and (ii) the acts are typical and characteristic of the defendant's conduct.

B. The Pattern Standard Requires That The Racketeering Activity Must Have Occurred At Substantially Different Times As Part Of Separate Criminal Episodes Or Transactions

As indicated by the common meaning of "pattern" and "continuity," RICO is properly read to require that the defendant must have engaged in repeated and ongoing criminality, not merely in one criminal incident that technically constitutes two offenses. Thus, to constitute a pattern, at least two of the acts of racketeering must have occurred at substantially different times as part of separate criminal episodes or transactions.

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The courts of appeals have generally recognized that a single criminal episode or objective, even though carried out through a number of illegal acts, fails the pattern requirement as a matter of law. See, e.g., Roeder v. Alpha Industries, Inc., 814 F.2d 22 (1st Cir. 1987); Eastern Pub. & Adv. v. Chesapeake Pub. & Adv., 831 F.2d 488 (4th Cir. 1987); Medical Emer. Serv. Assoc. v. Foulke, 844 F.2d 391 (7th Cir. 1988); Garbade v. Great Divide Min. & Mill. Corp., 831 F.2d 212 (10th Cir. 1987). Accordingly, the racketeering acts, "[i]n order to be sufficiently continuous to constitute a pattern of racketeering activity, must be ongoing over an identified period of time so that they can fairly be viewed as constituting separate transactions." Morgan v. Bank of Waukegan, 804 F.2d at 975.

This element of the pattern standard serves the important purpose of excluding essentially one-shot offenses, "limited in occurrence, in scope, and in purpose, that have been the traditional subjects of state tort law [and] were not intended to be swept into RICO's reach by Congress" (Eastern Pub. & Adv., 831 F.2d at 492).1 For example, the distribution of a fraudulent prospectus in separate mailings to different investors does not constitute a pattern of racketeering activity. See International Data Bank, Ltd. v. Zepkin, 812 F.2d 149 (4th Cir. 1987). Likewise, a series of letters or telephone calls in the course of a single fraudulent endeavor is not a pattern. See Condict v. Condict, 826 F.2d 923, 927-929 (10th Cir. 1987). And the payment of a bribe, even if made in separate installments that amount to multiple offenses under the criminal code, does not establish a pattern. See Roeder, 814 F.2d at 30-31.

1 Nearly 30% of the civil RICO cases decided in 1986 involved allegations of racketeering activity limited to a single episode. See Blakey & Cessar, Equitable Relief Under Civil RICO: Reflections on Religious Technology Center v. Wollersheim: Will Civil RICO Be Effective Only Against White-Collar Crime?, 62 Notre Dame L. Rev. 526, 619 (1987).

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In applying this standard, the courts have "realize[dl that skilled attorneys may artfully plead their civil RICO case" to contrive separate criminal episodes or transac tions "so as to prevail over a defendant's motion to dismiss." Jones v. Lampe, 845 F.2d 755, 757 (7th Cir 1988). This is especially true for racketeering acts in volving fraud, since "any "scheme" to defraud can be broken down into its component acts'" (id. at 758). Thus. "the existence of a multiplicity of predicate acts

[of fraud] may be no indication of the requisite continuity of the underlying fraudulent activity.'" Elliott v. Chicago Motor Club Ins., 809 F.2d 347, 350 (7th Cir. 1987). See also, e.g., Walk v. Baltimore & Ohio R.R., No. 87-3585 (4th Cir. May 31, 1988), slip op. 13-14 ("Iv]irtually every action taken by a corporation is sub. ject to challenge as either mail or securities fraud"); Fli Mortg. Corp., 841 F.2d at 538 ("a great many ordinary business disputes ⚫ could be described as multiple individual instances of fraud"); International Data Bank. 812 F.2d at 154-155 ("[i]t will be the unusual fraud that does not enlist the mails and wires in its service at least twice"); Morgan v. Bank of Waukegan, 804 F.2d at 976 ("[t]he existence of multiple predicate acts [of fraud] is only because the acquisition of stock in this context is a complicated transaction that requires many separate statements from a variety of persons").

To avoid this problem of artful pleading and artificially constructed episodes, it is the responsibility "of the district court to carefully scrutinize the allegations con tained in the complaint to determine whether they state a claim" (Jones v. Lampe, 845 F.2d at 757). Althoug! the court ordinarily accepts the plaintiff's factual allega tions as true, "it need not close its eyes to the content of these allegations," and "conclusory allegations" and "label[s]" concerning multiple schemes are not controlling (id. at 757, 758). Instead, the plaintiff's "characterization of events must be consistent with the factalleged in the complaint" (id. at 758). See also, c.g.. Manar v. McNamara, 842 F.2d 808, 811 (5th Cir. 1988

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("plaintiffs in RICO claims 'must plead specific facts, not mere conclusory allegations' ").

In sum, the requirement of separate criminal episodes or transactions, rigorously applied to screen out inappropriate RICO claims, represents an important element of the pattern definition. But while that requirement is a necessary part of the concept of "pattern," it is not a sufficient and complete standard by itself. Rather, the proper definition of "pattern" must contain an additional element: typicality.

C. The Pattern Standard Requires That The Racketeering Acts Be Typical And Characteristic Of The Defendant's Activities

In addition to separate criminal episodes or transactions, the pattern element requires that the alleged racketeering activity must constitute a typical and characteristic course of the defendant's conduct. This requirement is supported by the plain language of RICO and the commonly understood meaning of "pattern," as well as by the legislative history and purposes of the statute. Under this interpretation, the predicate acts of racketeering constitute a pattern only if they are typical and characteristic of the way in which the defendant conducts his activities.

1. The Plain Meaning Of “Pattern” Requires Typical And Characteristic Conduct

Where a term "is not specifically defined in the RICO statute," the Court must assume "that the legislative purpose is expressed by the ordinary meaning of the words used.'" Russello v. United States, 464 U.S. 16, 21 (1983). See also Organized Crime Control: Hearings on S. 30, and Related Proposals, Before Subcomm. No. 5 of the House Comm. on the Judiciary, 91st Cong., 2d Sess. 665 (1970) ("1970 House Hearings") (statement of Ronald L. Gainer, United States Department of Justice) (the bill "says 'pattern,' and pattern has to be construed with its normal meaning"). The ordinary meaning of

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"pattern" unmistakably denotes the idea of typical and characteristic conduct.

This central feature of "pattern" has been expressed in a number of ways. For example, "pattern" is defined as "a representative instance" or "a typical example." Webster's Third New International Dictionary 1657 (unabridged 1971). See also, e.g., VII Oxford English Dictionary 565 (1970) ("a typical, model, or representative instance"). Similarly, "pattern" means "a reliable sample of traits, acts, or other observable features characterizing an individual." Webster's Third New International Dictionary 1657 (unabridged 1971); Black's Law Dictionary 1015 (5th ed. 1979). "Pattern" also refers to "a regular, mainly unvarying way of acting or doing." Webster's New World Dictionary 1042 (2d college ed. 1980). And more generally, "pattern" is a "habit," "custom," "practice," or "characteristic." Roget's International Thesaurus ¶ 642.4 at 494 (4th ed. 1977).

These definitions of "pattern" all point to the same conclusion: predicate acts of racketeering, to constitute a pattern, must represent a "typical" and "characteristic" form of the defendant's behavior.

2. The Legislative History Demonstrates That RICO Is Directed Against Habitual Criminal Conduct By Professional Criminals

This interpretation of "pattern," requiring a typical and characteristic course of conduct, is reinforced by the legislative history and purposes of RICO. In enacting the special (and especially severe) provisions of RICO, Congress aimed the statute at organized and habitual criminal conduct committed by professional or career crimi nals for whom crime is a way of life. Properly understood, RICO was not intended to sweep in legitimate busi nessmen who may be alleged to have committed two pred icate offenses in the course of their otherwise legitimat activities.

The lengthy history of RICO is already familiar to thi Court. See, e.g., Sedima, 473 U.S. at 486-488; id. at 510