28 IV. UNDER THE PROPER INTERPRETATION OF "PATTERN," THE JUDGMENT BELOW IS CORRECT. In three counts of their complaint, petitioners ("plaintiffs") alleged that the defendants had violated RICO because of nine instances of alleged bribery over a fiveyear period. See J.A. I. Under the proper understanding of the "pattern" element, plaintiffs' complaint was inadequate because they failed to allege in it directly or by inference that the alleged "racketeering activity" was a substantial portion of the relevant conduct under each of the counts. As to the count under Section 1962 (a) (Count II), there is no allegation that a substantial portion of the money that Northwestern Bell invested in itself during the five-year period at issue was generated by the allegedly criminal acts. To the extent that it is plausible. to credit allegations that acts of alleged bribery enabled Northwestern Bell to acquire or maintain an "interest in or control of" the Minnesota Public Utilities Commission within the meaning of Section 1962 (b), there is no allegation that Northwestern Bell's ability to influence the Commission's regulatory decisions resulted primarily or substantially from the alleged "racketeering activity" rather than from ordinary filings and argument, and thus Count III must fail. Finally, the claim in Count IV under Section 1962 (c) is deficient because there is no allegation or basis for inferring that the illegal activity alleged against Northwestern Bell characterized or typified the conduct of the Minnesota Public Utilities Commission because it represented a substantial portion of the way that enterprise conducted its activities under Northwestern Bell's influence.18 1 Plaintiffs also alleged that defendants conspired to violate RICO. J.A. I at 81; see 18 U.S.C. § 1962(d). Since the underlying RICO claims are not adequately pleaded, the conspiracy count also fails. See, e.g., Torwest DBC, Inc. v. Dick, 810 F.2d 925, 927 n.2 (10th Cir. 1987). 29 In sum, the plaintiffs have not alleged all of the elements necessary to demonstrate the requisite "pattern" of pervasive criminality. Therefore, the district court properly dismissed the RICO claims, and the court of appeals properly affirmed. CONCLUSION The judgment of the court of appeals should be affirmed. Respectfully submitted. LOUIS A. CRACO WILKIE FARR & 153 East 53rd Street PHILIP A. LACOVARA Counsel of Record HUGHES HUBBARD & REED Attorneys for American Institute of Certified June 1988 APPENDIX 11.-STATEMENT OF JAMES T. CORCORAN, VICE PRESIDENT, GOVERNMENT AFFAIRS, THE GREYHOUND CORP. MR. CHAIRMAN AND MEMBERS OF THE JUDICIARY COMMITTEE: In My name is Tames T. Corcoran. I am Vice President of The Greyhound Corporation. The thrust of my testimony today is that civil RICO has been a valuable legal tool that has been used by many plaintiffs, including many reputable corporations, to attack increasingly sophisticated forms of interstate business crime. recent years, we have seen many forms of such wrongdoing involving insider trading abuses, commercial bribery and financial fraud. These new forms of organized white-collar crime have preyed in part upon financially oriented businesses such as insurance companies, finance companies and insured financial institutions and have injured the integrity of our economic system just as the organized crime that was cited long ago by the Kefauver Commission. Much has been written about alleged "abuses" of RICO, especially in the context of commercial litigation. If one credited these charges, one would conclude that the federal courts are choked with thousands of civil RICO suits, brought without any merit. That's not correct. The facts indicate that RICO has been used by some of the nation's most respected and responsible corporations to combat new and increasingly sophisticated forms of economic crime. I recognize that RICO is far from perfect and deserves scrutiny for possible revision. Nevertheless, "reform" that would retroactively eliminate treble damages for corporate RICO plaintiffs, such as that found in S.438 and H.R.1046 would unwisely and unfairly take away the effectiveness of RICO. "Reform" that would retroactively and discriminatorily kill RICO should be rejected in favor of more moderate steps intended to correct the problems that have become identified. Specifically, I would urge the Committee to oppose any reform that would effectively eliminate the availability of a treble damage recovery to corporate plaintiffs while continuing to make them liable for such recovery, and to reject any attempt to apply such "reform" retroactively, which would only take away matured rights, defeating the legitimate expectations of RICO plaintiffs and principally benefiting colluding wrongdoers. LEGISLATION PENDING BEFORE CONGRESS SHOULD AVOID DISCRIMINATORY REFORM AND FOCUS ON TARGETED REMEDIES TO REAL PROBLEMS. Rather than attack abuses, they discriminate against corporate victims of fraud. These bills are mistakenly premised on the belief that RICO is being abused by every plaintiff its treble damage provision of RICO and its efficacy. - largely because of and blindly cut back on both the scope Such reforms might reduce the volume of RICO cases, but at the unacceptable expense of retroactively eviscerating worthy RICO actions and immunizing wrongdoeers form the consequences of their acts. More targeted responses identify the correct direction for future RICO reforms. RETROACTIVE ELIMINATION OF TREBLE DAMAGES IS GROSSLY UNFAIR. Under both S.438 and H.R.1046, the elimination of treble damages would apply retroactively, so that victims of organized white-collar crime who brought suit in reliance on the expectation that, if successful, they would receive treble damages, instead may well be limited to compensatory damages only. If discriminatory elimination of treble damages generally is unwise, retroactive elimination of treble damages is even more misguided and fundamentally unfair. RETROACTIVE RICO REFORM SHOULD BE AVOIDED. As a matter of general principle, Congress should abstain from retroactive revisions of the law, except in cases of great emergency. Retroactive laws, although passed from time to time, run counter to the traditional legislative rule of making laws that sanction or penalize only future conduct. Retroactivity is objectionable because it negates antecedent rights between private parties and places a heavy hand on the scales of justice in pending litigation to alter the outcome to the benefit of one side and the detriment of the other and discriminates between different kinds of claimants based on their legal status. The retroactivity contained in S.438 and H.R.1046 would, without good reason, dramatically, harmfully and discriminatorily take away accrued rights and defeat the legitimate expectations of RICO plaintiffs and renege on the promise made by Congress in enacting RICO. It proposes to do so after many plaintiffs have devoted |