H. J. Inc. v. Northwestern Bell Telephone Co.

RICO defines a pattern as requiring at least two predicate acts within a specified 10-year period, but the statute does not say that those acts must arise from separate schemes. The Eighth Circuit’s multiple-scheme rule therefore added a rigid requirement that appears nowhere in RICO’s text or legislative history.

The legislative history states that a pattern requires both “continuity plus relationship.” Multiple schemes may be evidence of continuity, but they are not the exclusive means of proving it. Treating them as mandatory would improperly substitute the vague and nonstatutory concept of a “scheme” for the inquiry Congress actually contemplated.

Whether conduct is one scheme or many also depends on the level of generality used to describe the conduct. The alleged bribery here could be characterized as one broad scheme to secure favorable rates, or as several efforts to obtain favorable votes from individual commissioners. That elasticity made the multiple-scheme test an especially unreliable rule.

Section 1961(5) provides that a pattern “requires at least two acts” of racketeering activity. The phrase “at least” establishes a minimum number of acts, but it also indicates that two acts alone may not suffice. Otherwise, the statutory word “pattern” would do no independent work.

The relatedness requirement is met when acts have the same or similar purposes, results, participants, victims, or methods of commission, or are otherwise interrelated by distinguishing characteristics and are not isolated events. The Court drew this formulation from the related pattern definition in the Dangerous Special Offender Sentencing Act, another title of the same 1970 legislation.

Continuity is centrally temporal. It may be closed-ended, shown by a series of related predicate acts extending over a substantial period, or open-ended, shown by past conduct that projects into the future with a threat of repetition. Acts occurring only over a few weeks or months, with no threat of future criminal conduct, do not ordinarily show the long-term criminal activity Congress meant RICO to reach.

An open-ended threat of continuity may arise where the racketeering acts expressly or implicitly threaten long-term repetition. It may also be established where the acts are the regular way an ongoing criminal association operates, the regular way a legitimate business operates, or the regular way a defendant conducts or participates in an ongoing enterprise. The Court declined to create an exhaustive test because continuity depends on the facts of each case.

RICO’s text imposes no organized-crime limitation. Its provisions can apply to an individual acting alone, and Congress expressly used organized-crime language elsewhere in the Organized Crime Control Act when it intended such a limitation. The absence of comparable language in RICO was significant.

Although Congress enacted RICO principally in response to organized crime, it deliberately chose broad language capable of reaching criminal activity conducted through legitimate businesses as well as traditional criminal organizations. Congress recognized that an organized-crime limitation would be difficult to define and would leave gaps in the statute’s coverage.

The Court rejected the suggestion that concern over civil RICO suits against legitimate businesses justified narrowing the statute. If RICO’s broad predicates and remedies create undesirable consequences, those consequences stem from the statute Congress enacted and must be addressed by Congress rather than by judicially adding an organized-crime requirement.

The complaint alleged numerous acts of bribery directed at five MPUC commissioners over at least six years. Because bribery is a RICO predicate offense, these allegations described multiple predicate acts rather than a single isolated event.

The alleged bribes shared a common purpose: influencing regulators to approve unfairly high rates for Northwestern Bell. That common objective plausibly established the required relationship among the predicate acts.

The alleged six-year course of conduct could establish closed-ended continuity because it extended over a substantial period. Alternatively, petitioners might prove an open-ended threat of continuity by showing that bribery was a regular way Northwestern Bell conducted its ongoing business or participated in the ongoing MPUC enterprise. The lower courts therefore erred by dismissing solely because the complaint alleged one scheme.