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3. Predicate Acts Of Racketeering Constitute A Pat-
tern Only If They Are Typical And Characteristic

Of The Way In Which The Defendant Conducts His
Activities

As we have shown, the term "pattern" should be construed to require that the predicate acts of racketeering constitute a typical and characteristic course of criminal conduct. But that formulation does not answer the question of what must be typified: to what are the predicate acts to be compared in order to determine whether they are typical and characteristic? In our view, the pattern element focuses on the conduct of the defendant and serves to demarcate the category of people who are the intended target of RICO: professional or habitual criminals who engage in racketeering crimes as a regular course of conduct. Under this standard, predicate acts of racketeering constitute a pattern only if they are typical and characteristic of the way in which the defendant conducts his activities.

This interpretation is supported by three overriding considerations. First, it gives the same meaning to the term "pattern" in each of the provisions of Section 1962,

RICO and fail to give adequate notice of the prohibition and sanctions to which the defendant is subject (i.e., that particular conduct is a RICO violation and not simply a series of predicate offenses). Application of the rule of lenity is not barred by the "liberal construction" clause in RICO, which provides that "[t]he provisions of this title shall be liberally construed to effectuate its remedial purposes." Pub. L. No. 91-452, § 904 (a), 84 Stat. 947, 18 U.S.C. § 1961 note. As discussed above, the "purposes" of the statute were to strike at organized crime and professional career criminals; an expansive definition of "pattern" that brings legitimate businessmen and garden-variety commercial disputes within the statute is hardly necessary to effectuate those purposes. The Court in Sedima recognized that "[t]he strict- and liberal-construction principles are not mutually exclusive"; the definitional and substantive provisions in Sections 1961 and 1962, which apply to both criminal and civil actions, "can be strictly construed without adopting that approach" in interpreting the private damages remedy in Section 1964 (c), "where RICO's remedial purposes are most evident" (473 U.S. at 492 n.10).

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which is the statutory structure Congress most likely intended. See Sedima, 473 U.S. at 489 ("[w]e should not lightly infer that Congress intended the [same] term to have wholly different meanings in neighboring subsec tions"). Second, it is most faithful to the legislative history of RICO. And third, it provides a meaningful and workable standard that, consistent with congressional intent, limits the statute to its proper scope and restrains abuses of the private treble-damages provision.

We start with the language of RICO. Section 1962 (a)—which prohibits the investment in an enterprise of income derived from a pattern of racketeering activity— clearly contemplates that the pattern element will be measured by reference to the activities of the defendant; it is plainly the defendant's criminal conduct in obtaining the money, which is then invested in an enterprise, that is the focus of the pattern requirement. Thus, where the defendant typically and characteristically engages in a course of racketeering acts, his conduct constitutes a pattern of racketeering activity, and his investment of the proceeds of those crimes violates Section 1962 (a).

The same definition of "pattern" is equally applicable in Sections 1962 (b) and 1962 (c). In each subsection, the pattern element should be defined to require that the predicate acts be typical and characteristic of the defendant's activities. As in subsection (a), the pattern requirement identifies the type of professional or habitual criminal who is subject to the severe sanctions of RICO.

Of course, pattern is not the only element of a violation under Section 1962 (b) or (c). In addition, the de

Because "the major purpose of [RICO] is to address the infiltration of legitimate business by organized crime” (United States v. Turkette, 452 U.S. 576, 591 (1981)), Sections 1962(a) and 1962(b) are especially significant in discerning the congressional intent underlying the statute. Section 1962 (c) was added to the bill at the suggestion of the Department of Justice to prohibit criminal conduct by racketeers once they had infiltrated the enterprise. See Measures Relating to Organized Crime: Hearings Before the Subcomm. on Criminal Laws and Procedures of the Senate Comm. on the Judiciary, 91st Cong., 1st Sess. 387 (1969).

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fendant must acquire or maintain an interest in the enterprise, or conduct the affairs of the enterprise, "through" his racketeering activity. The term "through" requires that there be a causal connection between the defendant's criminal conduct and the enterprise. Sections 1962 (b) and (c) are violated only when the defendant acts "through"-that is, as part of or by means of-a pattern of racketeering activity in order to infiltrate or operate the enterprise. See Sedima, 473 U.S. at 496-497 ("[M]ere commission of the predicate offenses ・・・ [is] not in itself a violation of § 1962

[T]he essence of the violation is the commission of those [predicate acts forming a pattern] in connection with the conduct of an enterprise"); 116 Cong. Rec. at 18940 (remarks of Sen. McClellan) ("[u]nless an individual.. engages in a pattern of such violations, and uses that pattern to obtain or operate an interest in an interstate business, he is not made subject to proceedings under [RICO]").

Thus, the unified standard of "pattern" we propose leads to a consistent and coherent interpretation of each of the provisions of Section 1962. Under this reading of the statute, the predicate racketeering acts must be part of a course of criminal conduct that is typical and characteristic of the way the defendant conducts his activities (the "pattern" element) and must have the required nexus to the enterprise (the "through" element) for the particular RICO violation alleged. RICO is violated if the defendant, as part of or by means of a pattern of racketeering activity sufficient to mark him as a professional or habitual criminal, (a) derives income that he invests in an enterprise, (b) acquires or maintains an interest in an enterprise, or (c) conducts the affairs of an enterprise.

By contrast, alternative typicality standards do not permit a uniform interpretation of the pattern element. If the pattern requirement turns on whether racketeering acts are typical of the enterprise itself and its overall operations, as Section 1962 (c) plausibly can be read to

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say, that standard would be inapplicable to subsections (a) and (b), which do not depend upon the nature or character of the enterprise. Likewise, an interpretation that requires the racketeering acts to be typical of the defendant's relationship to or activities concerning the enterprise—that is, that they be typical of the way in which he acquired or maintained an interest in the enterprise or conducted the enterprise's affairs-while a plausible reading of Sections 1962 (b) and (c), cannot be squared with subsection (a). Accordingly, in order to give the term "pattern" a single consistent meaning, as Sedima requires, it should be construed to mean that the predicate acts of racketeering must be typical and characteristic of the activities of the defendant.

In addition to being supported by the text of RICO, this definition of "pattern" best comports with the legislative history of the statute. As described above (see pages 9-14, supra), RICO is directed at members of organized crime and other professional or career criminals for whom ongoing criminality is a way of life. The construction we propose precisely captures this purpose by using the pattern element to identify such people as the category of defendants who are subject to RICO.

This standard would allow RICO to be invoked in the kinds of cases that were Congress's target in enacting the statute. The organized crime member who takes over or operates a company through acts of violence or fraud, the beer distributor or jukebox supplier who conducts his business by force and threats against reluctant customers or competitors, the "boiler room" operator who sells fraudulent securities, the motorcycle gang that is in the business of selling drugs or committing arson-for-hire— all of these situations, which were the intended focus of RICO, would remain well within the ambit of the statute."

The legislative history offers an example (116 Cong. Rec. at 607. 18940, 36296), which petitioners cite (Br. 17), of the leader of the New Jersey Cosa Nostra using murder and arson to sell substandard laundry detergent to the A&P Tea Company. This example is easily encompassed by our pattern definition.

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Our proposed pattern definition likewise would not interfere with proper criminal enforcement of RICO. RICO's sanctions would remain fully available in the great run of cases, involving professional criminals and illegitimate enterprises-in-fact, in which the government has actually brought criminal prosecutions. Indeed, the Department of Justice Guidelines on RICO already direct federal prosecutors that "[n]o indictment shall be brought charging a violation of 18 U.S.C. § 1962 (c) based upon a pattern of racketeering activity growing out of a single criminal episode or transaction." United States Attorneys' Manual $9-110.340 (Mar. 9, 1984) (emphasis added). See pages 5-6, supra.

At the same time, this definition will restrict RICO to its proper scope in a way that is both more meaningful and more practical than alternative standards. An inherent difficulty in formulations that tie the pattern to either the enterprise or the defendant's relationship with the enterprise is that the term "enterprise" is exceedingly broad. See 18 U.S.C. § 1961 (4); United States v. Turkette, 452 U.S. 576 (1981). It is up to the plaintiff to allege the relevant enterprise in any particular case (or even different enterprises for different RICO counts in the same case, as this litigation illustrates), and the enterprise allegations are often manipulated through "artful[] plead [ing]" (Jones v. Lampe, 845 F.2d at 757). Thus, under any legal standard that focuses the pattern requirement on the enterprise, the plaintiff can effectively determine the pattern issue by virtue of his control over the enterprise allegations. For this reason, two RICO cases that are otherwise identical, but involve different enterprise allegations, could arbitrarily lead to different results.

Of equally great importance, this interpretation of the pattern element provides a workable standard that can feasibly be applied in litigation. Consistent with the requirement of Fed. R. Civ. P. 11 that a complaint be "warranted" by law and "not interposed for any improper purpose," a great many inappropriate RICO cases that

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