Fall 2003-07 Soto Negrn v. Taber Partners Limited I affirmed

Number 53Fall 2003

Follow up

Soto Negrón v. Taber Partners Limited I affirmed

In the Winter, 2003, issue of Puerto Rico Business Law Developments we reported on the U.S. District Court decision in this case, and expounded on the elements that must be present to prevail under RICO-the Racketeering Influenced and Corrupt Organizations Act. The U.S. Court of Appeals for the First Circuit has now affirmed the District Court decision [ Soto Negrón v. Taber Partners Limited I, 333 F.3d 35 (1st Cir. 2003)].

“Pattern”

Like the trial court, the Court of Appeals bypassed the issue of whether there was any racketeering activity at all, and focused instead on whether the activity alleged in the complaint constituted a “pattern” under RICO.

A “pattern” intimates more than sporadic activity. It commands continuity, the court said, and requires that the actions alleged pose a threat of continued criminal activity.

Soto Negrón dealt with six checks, all dated within a week of each other. All four known dates of payment were within a single five-day period. “This time frame is too narrow to meet the continuity requirement.”

No threat of repetition

The court also pointed out that there is no allegation in the complaint tantamount to a threat of repetition. “Without the threat of an ‘open ended’ pattern of racketeering activity, the complaint cannot overcome the narrow time period alleged.”

The Court of Appeals affirmed the District Court’s dismissal of the complaint, and awarded costs to the defendant.

© 2003 Goldman Antonetti