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Paradise Northwest Inc v. Satvinder Palsingh Randhawa


January 13, 2011


The opinion of the court was delivered by: Morrison C. England, Jr. United States District Judge


Presently before the Court is Defendants' Motion for Partial Summary Judgment as to Plaintiff's First Cause of Action, which alleges a civil RICO claim under 18 U.S.C. § 1962(c). Plaintiff provided hydrology-related engineering services to Defendants in connection with a water project located in India. Plaintiff contends that it was not paid even though Defendants themselves received remuneration for Plaintiff's services from the Indian government.

Defendants' motion, although brought as a motion for summary adjudication as to the RICO claim, in essence attacks Plaintiff's charging allegations as contained in the complaint. A review of the Court's docket in this matter does not reveal that Plaintiff challenged the sufficiency of the pleadings prior to bringing this motion.

"To prevail on a civil RICO claim, a plaintiff must prove that the defendant engaged in (1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity and, additionally, must establish that (5) the defendant caused injury to plaintiff's business or property." Chaset v. Fleer/Skybox Intern., LP, 300 F.3d 1083, 1086 (9th Cir. 2002) (citing 18 U.S.C. §§ 1962(c), 1964(c).

Defendants' challenge to the RICO claim asserted by Plaintiff here hinges on whether the requisite "enterprise" can be established. As Defendants point out, for RICO purposes the term contemplates two variants. First, an enterprise can be "any individual, partnership, corporation, association or other legal entity". Second, and alternatively, an enterprise can also be present with respect to "any union or group of individuals associated in fact although not a legal entity." Id. According to Defendants, while Plaintiff has "unambiguously pleaded an enterprise under the first category", it has failed to allege an enterprise under the second. See Defs.' Mot., 1:17-18 Because Defendants maintain that the Eastern Export and Trading Company was simply a fictitious business name maintained by the Randhawas as husband and wife, they assert that Eastern Export cannot qualify as an enterprise under the first category.

Given that shortcoming, and because Plaintiff made no effort in its complaint to identify an enterprise under the second category, Defendants claim they are entitled to summary adjudication as to Plaintiff's RICO claim.

In opposition, Plaintiff does not dispute the inapplicability here of any claimed enterprise under the first category. Instead, Plaintiff makes it clear that its opposition is based on the fact that the Randhawas' fictitious name statement can qualify under the second definition of enterprise for RICO purposes as "any union or group of individuals associated in fact although not a legal entity." Pl.'s Opp'n, 3:19-21. Defendants counter that they "can only move for summary judgment upon the pleading that is on file," which, as stated above, relies only on the first category. See Defs.' Reply, 5:15.

While this may be true, Plaintiff requests within its opposition leave to amend its Complaint in order to properly reflect Plaintiff's reliance on the second category of enterprise in stating its RICO claim. Defendants' reply, while continuing to reiterate that the pleadings as presently constituted are insufficient, does not take issue with that request to amend.

As the Supreme Court has recognized, the terms of RICO are "to be liberally construed to effectuate its remedial purposes." Boyle v. U.S., 129 S. Ct. 2237, 22243 (2009). Moreover, there is authority for the proposition that this Court has discretion to permit a party opposing summary judgment to offer an amended pleading that sets forth a different theory of liability.

See Zaidi v. Ehrlich, 732 F.2d 1218, 1220 (5th Cir. 1984).

Given that discretion, particularly when coupled with the liberal construction to be awarded RICO claims, the Court finds it is proper at this time to grant Plaintiff's request to file an amended pleading. Discovery will not close for more than three months, and Defendants have articulated no prejudice resulting from an amendment at this juncture.

Plaintiff is accordingly granted twenty (20) days from the date this Order is signed within which to file an amended complaint. Given the fact that amendment will be permitted, Defendants' Motion for Partial Summary Judgment (ECF No. 68) is DENIED,*fn1 without prejudice to refiling at a later time after a First Amended Complaint is filed, or in the absence of such filing, after the time for doing so has expired.

Finally, the Court notes that on December 1, 2010, Plaintiff filed a request with the Court that it accept a later, signed version of Dennis Williams' Declaration in Opposition to the Motion for Partial Summary Judgment. Plaintiff's counsel indicates that it inadvertently filed an earlier, unsigned draft of that declaration rather than the final version and seeks leave to substitute the finalized declaration.

No opposition was received to Plaintiff's request in that regard. Given that fact, and good cause appearing, Plaintiff's Motion for Leave (ECF No. 79) is GRANTED.


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