(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for
the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please
note that, in the interests of brevity, portions of any opinion may not have been summarized).
STATE OF NEW JERSEY V. PATRICK BALL, ET AL. (and related matters) (A-17/18/19-94)
Argued October 12, 1994 -- Decided July 20, 1995
HANDLER, J., writing for a unanimous Court.
Defendants participated in a lucrative but unlawful scheme to dump solid waste generated in New
York at several unauthorized New Jersey sites. Defendants Harvan and Bassi arranged for and operated
illegal dump sites in North Bergen, Newark, and at the Hackensack Meadowlands Development Commission
bailing facility. They located property to be filled and recruited haulers looking for inexpensive places to
dump. Defendants Hurtuk, Dulanie and Mocco were North Bergen public officials who accepted cash bribes
to protect and promote the illegal landfills in that town. Also involved in the operation was defendant Ball,
one of the haulers who carted the waste from New York and disposed of it at the sites arranged by Bassi
and Harvan at a lower cost than would have been paid to dump in New York. Other participants in the
dumping scheme included the lookouts at the dump sites, a money launderer, and a "fixer," who handled any
problems that arose during the operation.
On April 1, 1987, the grand jury handed down a 116-count indictment charging Bassi, Harvan,
Hurtuk, Mocco and Dulanie, among others, with various crimes, including racketeering and conspiracy to
commit racketeering pursuant to the New Jersey Racketeer Influenced and Corrupt Organizations (RICO)
Act. The RICO Act generally makes it a crime for a person to be employed by or associated with "an
enterprise" and to engage or participate or become involved in the business of the enterprise "through a
pattern of racketeering activity," N.J.S.A. 2C:41-2(b) and (c). The Act also makes it a crime for a person to
conspire to engage in such conduct, N.J.S.A. 2C:41-2(d)..
Bassi and Harvan were found guilty of, among other things, conspiracy to commit racketeering and
of racketeering under the RICO Act. Hurtuk, Dulanie and Mocco were convicted of conspiracy to commit
racketeering. Defendants appealed their convictions based on both RICO and non-RICO issues. The
Appellate Division affirmed the convictions. The Supreme Court granted defendants' petitions for
certification limited solely to the issues raised concerning the construction and interpretation of the above
referenced provisions of the RICO Act.
HELD: The trial court adequately instructed the jury in respect of the proper understanding and application
of N.J.S.A. 2C:41-2(c) and (d) of the New Jersey Racketeering Influenced and Corrupt
Organizations (RICO) Act. Furthermore, the evidence was sufficient to support the RICO
convictions under those provisions of the Act.
1. The heart of a RICO violation is the involvement in the affairs of an enterprise through a pattern of racketeering activity. Legislative history and caselaw dealing with both state and federal RICO statutes support the following conclusions. First, the RICO statute, in using the term "enterprise," contains no express or implied requirement for a distinct ascertainable structure; rather, it is framed broadly to include any group of persons "associated in fact." Second, legislative history demonstrates that "enterprise" was meant to be construed broadly since the statute itself commands liberal construction of the term. Moreover, the Legislature intended its statute to reach less-organized and less-traditional criminal elements as well as traditional elements. Under the RICO Act "enterprise" is an element separate from the "pattern of racketeering activity," and the State must prove the existence of both. Because the enterprise is distinct from the incidents constituting the pattern of activity, it must have an "organization." The organization of an
enterprise need not feature an ascertainable structure or a structure with a particular configuration; rather, it
must divide among its members the tasks necessary to achieve a common purpose. (pp. 10-20)
2. To constitute a RICO offense, a defendant's involvement in an enterprise must be accomplished "through
a pattern of racketeering activity." Some degree of continuity, or threat of continuity, is required and is
inherent in the "relatedness" element of the "pattern of racketeering activity." RICO is not designed to
punish mere repeated offenses; there must be some connection among criminal incidents. Thus, the primary
criterion of "pattern of racketeering activity" is "relatedness." That calls for the application of a broad
standard involving the totality of all relevant circumstances, which may include "continuity." (pp. 20-30)
3. The term "pattern of racketeering activity" is not unconstitutionally vague. The statute makes clear that
when certain conduct that the Legislature has already made criminal is committed in a certain way with a
certain purpose, it will carry an enhanced penalty. Moreover, the term is also not vague as applied to
defendants; any person of ordinary intelligence would realize that defendants' activities constituted conduct
that the law proscribed. (pp. 30-32)
4. The RICO Act does not require that a defendant be found to exercise responsibilities of operation or
management in order to "conduct or participate" in an enterprise. Under the Act, a person is employed by
or associated with an enterprise if he or she has a position or a functional connection with the enterprise that
enables him or her to engage in conduct or participate directly or indirectly in the affairs of the enterprise.
Further, to conduct or participate in the affairs of an enterprise means to act purposefully and knowingly in
the affairs of the enterprise in the sense of engaging in activities that seek to further, assist or help effectuate
the goals of the enterprise. (pp. 32-38)
5. A RICO conspiracy has two separate elements: an agreement to violate RICO and the existence of an
enterprise. The agreement to violate RICO also has two necessary aspects: 1) the agreement to conduct or
participate in the conduct of the affairs of the enterprise; and 2) an agreement to the commission of at least
two predicate acts. It can be inferred that the Legislature intended that general conspiracy law apply to
prosecutions for conspiracy to violate RICO. Thus, to establish a RICO conspiracy, the State must show that
a defendant agreed to participate directly or indirectly in the conduct of the affairs of the enterprise by
agreeing to commit or to aid other members of the conspiracy to commit at least two racketeering acts; and
that he or she acted knowingly and purposely with the knowledge of the unlawful objective of the conspiracy
and with intent to further its unlawful objective. The defendant need not agree to commit personally the two
predicate acts of racketeering. (pp. 39-46)
6. Defendants were at the center of a large-scale dumping scheme involving many people. All knew of the
illegal objective of the enterprise. The scheme displayed an "organization" of its members as evidenced by
the interaction of the participants, the extensive planning, coordination, and cooperation necessary to
effectuate its objectives. Moreover, the State provided ample evidence of a pattern of racketeering activity
under the totality of circumstances by demonstrating incidents of racketeering that are both related and are
neither isolated nor disconnected. (pp. 46-52)
7. The trial court's charge sufficiently embraces the standard now adopted in respect of the participation
requirement of the substantive crime of racketeering. In addition, there was ample evidence to conclude
such participation existed. Furthermore, the trial court's instructions correctly conveyed to the jury the
standards now adopted for determining a RICO conspiracy and the evidence was more than sufficient to
support the conspiracy convictions. (pp. 52-57)
Judgment of the Appellate Division is AFFIRMED.
CHIEF JUSTICE WILENTZ AND JUSTICES POLLOCK, O'HERN, GARIBALDI and STEIN join
in JUSTICE HANDLER's opinion. JUSTICE COLEMAN did not participate.
SUPREME COURT OF NEW JERSEY
A-17/18/
19 September Term 1994
STATE OF NEW JERSEY,
Plaintiff,
v.
PATRICK BALL and
BIG APPLE LEASING CO.,
Defendants.
----------------------------
STATE OF NEW JERSEY,
Plaintiff-Respondent,
v.
GEORGE HURTUK,
Defendant-Appellant.
-----------------------------
STATE OF NEW JERSEY,
Plaintiff-Respondent,
v.
JOSEPH DULANIE,
Defendant-Appellant.
-----------------------------
STATE OF NEW JERSEY,
Plaintiff-Respondent,
v.
JOSEPH MOCCO,
Defendant-Appellant.
-----------------------------
STATE OF NEW JERSEY,
Plaintiff-Respondent,
v.
MICHAEL HARVAN,
Defendant-Appellant.
-----------------------------
STATE OF NEW JERSEY,
Plaintiff-Respondent,
v.
RICHARD BASSI,
Defendant-Appellant.
Argued October 12, 1994 -- Decided July 20, 1995
On certification to the Superior Court,
Appellate Division, whose opinion is reported
at
268 N.J. Super. 72 (1993).
Harold J. Ruvoldt, Jr., argued the cause for
appellants George Hurtuk, Joseph Dulanie, and
Joseph Mocco (Ruvoldt & Ruvoldt, attorneys;
Mr. Ruvoldt and Kimberly A. Hintze-Wilce, on
the briefs).
Philip A. Ross, Designated Counsel, argued
the cause for appellant Richard Bassi (Susan
L. Reisner, Public Defender, attorney).
Donald T. Thelander, Assistant Deputy Public
Defender, argued the cause for appellant
Michael Harvan (Susan L. Reisner, Public
Defender, attorney; William P. Welaj,
Designated Counsel, on the letter brief).
Robert E. Bonpietro, Deputy Attorney General,
argued the cause for respondent (Deborah T.
Poritz, Attorney General of New Jersey,
attorney).
Harvey Weissbard argued the cause for amicus
curiae Association of Criminal Defense
Lawyers of New Jersey (Weissbard & Wiewiorka,
attorneys and Crummy, Del Deo, Dolan,
Griffinger & Vecchione, attorneys; Mr.
Weissbard and Lawrence S. Lustberg, on the
briefs).
The opinion of the Court was delivered by
HANDLER, J.
This criminal appeal arises from defendants' participation
in an unlawful scheme to dump solid waste generated in New York
at several unauthorized New Jersey sites. Defendants were
prosecuted and convicted under the New Jersey Racketeer
Influenced and Corrupt Organizations Act, commonly referred to as
the RICO Act. In appealing their convictions, defendants raised
several RICO issues, as well as many non-RICO issues. The
Appellate Division affirmed the convictions.
268 N.J. Super. 72
(1993). This Court granted defendants' petitions for
certification, "limited solely to the issues raised regarding
construction of the New Jersey Racketeer Influenced and Corrupt
Organizations Act."
135 N.J. 304, 305 (1994).
The RICO Act, generally, makes it a crime for a person to be
employed by or associated with "an enterprise" and to engage or
participate or become involved in the business of the enterprise
"through a pattern of racketeering activity." N.J.S.A. 2C:41-2b
and 2c. The Act also makes it a crime for a person to conspire
to engage in such conduct. N.J.S.A. 2C:41-2d. Defendants were
prosecuted and convicted under those provisions of the RICO Act.
The meaning and application of those provisions constitute
the central inquiry in this appeal. Ultimately, in light of our
interpretation of the RICO Act, the appeal presents the questions
of whether the trial court adequately instructed the jury with
respect to the proper understanding and application of the
critical RICO provisions, and whether the evidence was sufficient
to support the RICO convictions under those provisions.
The Legislature adopted the New Jersey Racketeer Influenced and Corrupt Organizations Act, N.J.S.A. 2C:41-1 to -6.2, in 1981. Convictions in this case were based on violations of N.J.S.A. 2C:41-2c and 2d. The extensive evidence introduced at trial is recited in detail in the opinion of the Appellate Division. 268 N.J. Super. at 82-88. That evidence, for the most part not disputed, consisted of testimony of witnesses to the dumpings, surveillance videotapes, recorded telephone conversations, and records created and maintained by the various defendants.
Defendants Michael Harvan and Richard Bassi were the "dirt brokers" who arranged for and operated the illegal dump sites in North Bergen, Newark, and at the Hackensack Meadowlands Development Commission (HMDC) baling facility. They located property to be filled and recruited haulers looking for inexpensive places to dump. Defendants George Hurtuk, Joseph
Dulanie, and Joseph Mocco were North Bergen public officials who
accepted cash bribes to protect and promote the illicit landfills
in that town. At the time of the scheme, Hurtuk was the license
inspector, Dulanie was the deputy chief of police, and Mocco was
the town clerk. Also necessary to the operation were haulers
such as defendant Patrick Ball, since deceased, who carted the
waste from New York and disposed of it at the sites arranged by
Bassi and Harvan at a lower cost than they would have had to pay
to dump in New York. Other participants in the dumping scheme
included the lookouts at the dump sites, a money launderer, and a
"fixer," who handled any problems that arose during the
operation.
The HMDC is a state agency controlling zoning and planning
in all or part of fourteen towns comprising the Hackensack
Meadowlands. The portions of North Bergen in which the dumping
occurred are within that area. Any landfill within the area
needed permits from the HMDC and from the Department of
Environmental Protection (DEP). To avoid obtaining the agency
permits, Bassi and Harvan bribed the North Bergen public-official
defendants to gain their permission to dump debris at both the
sites in North Bergen and the HMDC baler, and to obtain their
assurance that they would intercept and handle any permit
problems.
The evidence indicates that the dumping in North Bergen
began in January 1986 at 83rd Street and West Side Avenue. That
month, a North Bergen police officer encountered the dumping
activity while Harvan was present. Harvan told him that he was
in charge of the trucks at the site and that Hurtuk, the town
license inspector, had given him permission to use the property
for dumping.
In February, the dumping moved to a site near 69th Street
and West Side Avenue. For that site, Harvan hired a night
checker for $150 a day to copy the license-plate numbers of the
trucks dumping there and to record the number of loads dumped
each night. The night checker testified that Harvan was present
at the site every night it operated and that both Bassi and
Hurtuk were present on the first night the site was used. Harvan
instructed the checker to call Hurtuk if he had any trouble at
the site. The police investigated the dumping several times, and
eventually an order from Hurtuk was posted at police headquarters
stating that dumping was permitted at the 69th Street location.
In March, the dumping moved to another area near 83rd
Street. Later that month, both the Division of Criminal Justice
(DCJ) and the HMDC began investigating the landfill operation.
When DCJ personnel inquired about the dumping, the town clerk,
Mocco, assured the investigators that HMDC had granted permission
for the dumping, although it had not, and produced a license
issued to a fictitious M. Black.
Days later, the dumping ceased at 83rd Street and a new dump
opened at the Walsh Trucking property. The DCJ surveillance
continued, and the dumping proceeded at the Walsh site into the
second week of May. The investigators saw Bassi, Harvan, Hurtuk,
and Dulanie at the site during that period.
On May 15, pursuant to court orders, DCJ installed wiretaps
on Bassi's home telephone. Shortly after one truck had become
entangled in a utility wire and caused an explosion, in a
recorded conversation, Harvan told Bassi that Mocco had told him
"'don't worry about [the wire] . . . Keep rolling.'" The dumping
continued at both the 83rd Street and Walsh sites and the
enterprise also used the HMDC baling facility. The haulers who
had contracted with Bassi and Harvan indicated on HMDC forms that
the waste originated in a place approved for dumping at that
baler, such as Clifton, when in fact the waste came from New
York. In addition, the trucks had magnetic signs reading "Big M"
or "Harbas Trucking" placed over the name painted on the side of
the trucks.
By early June, the investigation had made dumping so risky
that Bassi and Harvan told the haulers to take loaded trucks back
to New York. Recorded conversations between Bassi and Harvan
reveal that they were annoyed by their problems in North Bergen
because they had paid their "rent" to the town officials. They
continued to work with the town officials, however, to try to
resume dumping in North Bergen.
The enterprise was financially rewarding to all its
participants. Seized financial records covering the period from
February to June 1986 revealed that the billings of Harvan and
Bassi for dumping totalled $888,220 and that they each netted
approximately $300,000 to $350,000 from the operation. Written
records of the expenses of the scheme covering a three-month
period show payments ranging from $100 to $1,000 to the "boss" or
"big guy," referring to Mocco, totalling $29,100; to the "chief,"
referring to Dulanie, totalling $42,100; and to the "fat man,"
referring to Hurtuk, totalling $27,500. The haulers benefitted
from the operation because Bassi and Harvan charged approximately
half of the estimated $575 that haulers would have had to pay to
dump legally in New York.
On April 1, 1987, the grand jury handed down a 116-count
indictment charging Bassi, Harvan, Hurtuk, Mocco, and Dulanie,
among others, with various crimes including racketeering,
conspiracy to commit racketeering, bribery, theft of services,
falsifying and tampering with public records, forgery, and the
unlawful engagement in the business of solid waste collection and
disposal. Defendants' trial began on October 11, 1988, and
lasted until April 17, 1989, and all were convicted of certain of
the charges.
The jury found Bassi and Harvan guilty of conspiracy to
commit racketeering, contrary to N.J.S.A. 2C:41-2d, and of
racketeering, contrary to N.J.S.A. 2C:41-2c. It also found them
both guilty of bribery, in violation of N.J.S.A. 2C:27-2c and -2d
and N.J.S.A. 2C:2-6; uttering a forged instrument, in violation
of N.J.S.A. 2C:21-1 and N.J.S.A. 2C:2-6; criminal mischief,
contrary to N.J.S.A. 2C:17-3a and N.J.S.A. 2C:2-6; and engaging
in solid-waste disposal without a certificate of public
convenience, contrary to N.J.S.A. 48:13A-6 and N.J.S.A. 48:13A-12. The jury convicted Hurtuk, Dulanie, and Mocco of conspiracy
to commit racketeering, contrary to N.J.S.A. 2C:41-2d, as well as
of bribery, contrary to N.J.S.A. 2C:27-2c, and of official
misconduct, contrary to N.J.S.A. 2C:30-2a. Dulanie and Hurtuk
were also found guilty of official misconduct, in violation of
N.J.S.A. 2C:30-2b. Lastly, Mocco and Hurtuk were convicted of
bribery, in violation of N.J.S.A. 2C:27-2d.
The court sentenced both Bassi and Harvan to aggregate terms
of seventeen years imprisonment and fined them each $150,000. It
also imposed Violent Crimes Compensation Board (VCCB) penalties
of $450 on each defendant. The court merged the conspiracy-to-commit-racketeering conviction with the racketeering conviction,
but did not merge the other convictions with those for
racketeering. The court sentenced Hurtuk to an aggregate prison
term of fifteen years, and ordered him to make restitution in the
amount of $27,000. The court also fined him $75,000 and imposed
a VCCB penalty of $90. Dulanie was sentenced to an aggregate
prison term of fifteen years, and was ordered to make restitution
in the amount of $41,600. The court fined him $75,000 and
imposed a VCCB penalty of $60. Mocco was sentenced to an
aggregate prison term of twenty years, and ordered to make
restitution in the amount of $56,300. The court fined him
$200,000 and imposed a VCCB penalty of $90. The sentencing court
did not merge any of the other convictions into the conspiracy-to-commit-racketeering conviction.
The gravamen of a RICO violation, frequently referred to as "racketeering," is the involvement in the affairs of an enterprise through a pattern of racketeering activity. Specifically, the RICO Act provides:
c. It shall be unlawful for any person employed by or associated with any enterprise engaged in or activities of which affect trade or commerce to conduct or participate, directly or indirectly, in the conduct of the enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt.
d. It shall be unlawful for any person to
conspire as defined in N.J.S. 2C:5-2, to
violate any of the provisions of this
section.
We consider first the interpretation to be accorded the term
"enterprise." N.J.S.A. 2C:41-1 provides a definition:
c. "Enterprise" includes any individual,
sole proprietorship, partnership,
corporation, business or charitable trust,
association, or other legal entity, any union
or group of individuals associated in fact
although not a legal entity, and it includes
illicit as well as licit enterprises and
governmental as well as other entities.
At the outset we note that the definitions of "enterprise" in the federal and New Jersey RICO statutes are similar.See footnote 1
Indeed, as originally introduced in the Assembly in February
1980, the New Jersey RICO statute paralleled federal RICO. The
Legislature, however, came to perceive purposes and goals to be
achieved by the proposed anti-racketeering statute distinct from
those of the federal statutory scheme. Consequently, in many
respects our Legislature departed from the federal example.
Nevertheless, because the federal statute served as an initial
model for our own, we heed federal legislative history and case
law in construing our statute.
The legislative history for federal RICO indicates that
Congress' prime concern was the eradication of "organized crime."
United State v. Turkette,
452 U.S. 576, 591,
101 S. Ct. 2524,
2532,
69 L. Ed.2d 246, 259 (1981). Congress' specific
intentions, though, were not in every respect apparent, and so
there has evolved an extensive and variegated jurisprudence on
federal RICO. Among the subjects debated in the jurisprudence is
the meaning of "enterprise." David Vitter, The RICO Enterprise
as Distinct from the Pattern of Racketeering Activity: Clarifying
the Minority View,
62 Tul.L.Rev. 1419 (1988).
The history of federal court attention to the problem of the
meaning of "enterprise" begins, for our purposes, with the United
States Supreme Court's decision in Turkette, supra, in which the
Court considered the meaning of the federal statute's
"enterprise" element. Prior to that decision, however, in New
Jersey in 1978 an Organized Crime Task Force issued a Report. It
noted that by 1968, New Jersey had acquired a national reputation
as a haven for organized crime. Organized Crime Task Force,
Report at 1 (1978) [hereinafter Report]. The Report evaluated
the steps New Jersey had taken to protect the integrity of local
government and law enforcement agencies, and made recommendations
for improving efforts to eradicate organized crime in this State.
The Task Force focused on the problem of infiltration of
organized crime into government and legitimate businesses.
The Legislature, however, refused to limit the statute's
application to cases of infiltration of legitimate business by
organized crime. N.J.S.A. 2C:41-1c. Moreover, the Legislature
decided not to limit the statute's application only to such
traditional organized crime interests as the Mafia. Instead, the
Legislature determined that the statute should broadly cover
"organized crime type activities." N.J.S.A. 2C:41-1.1c.
In 1981, the year of the enactment of the New Jersey
statute, the Supreme Court decided Turkette, supra. The Supreme
Court considered whether "enterprise" under RICO encompassed
wholly illegitimate as well as legitimate enterprises. It
concluded that illegitimate enterprises were covered, noting that
although the main aim of the legislation was to prevent the
infiltration of criminal elements into legitimate businesses, the
statutory language was not so limited. 452 U.S. at 580, 101 S.
Ct. at 2527, 69 L. Ed.
2d at 253. The Court defined "an
enterprise" as "a group of persons associated together for a
common purpose of engaging in a course of conduct," and held that
an enterprise is established by "evidence of an ongoing
organization, formal or informal, and by evidence that the
various associates function as a continuing unit." Id. at 583,
101 S. Ct. 2528-29, 69 L. Ed.
2d at 254.
In addition to interpreting "enterprise," the Supreme Court
in Turkette stated that prosecutors bear the burden of proof
under RICO to show the existence of both an enterprise and a
pattern of racketeering activity; although the proof used to
establish the separate elements may "coalesce," proof of one
would not necessarily establish the other. Id. at 583, 101 S.
Ct. at 2528-29, 69 L. Ed.
2d at 254-55. The Court thus took care
to distinguish the "enterprise" element from the "pattern of
racketeering activity" element, stating that the enterprise "is
an entity separate and apart from the pattern of activity in
which it engages." Id. at 583, 101 S. Ct. at 2525, 69 L.Ed.
2d at
255.
After Turkette, federal courts struggled to apply its rule
to particular cases. The Third Circuit Court of Appeals in
United States v. Riccobene,
709 F.2d 214, 221-24, cert. denied,
464 U.S. 849,
104 S. Ct. 157,
78 L. Ed.2d 145 (1983), determined
that according to Turkette, an enterprise had three components:
an ongoing organization, continuing membership, and a
separateness, and that the establishment of an "enterprise"
required proof of "some sort of structure." Id. at 222. The
Eighth Circuit Court of Appeals concluded that the "enterprise"
element required proof of an "ascertainable structure" distinct
from such organization as is necessary to the coordinated act of
racketeering. United States v. Bledsoe,
674 F.2d 647, 665, cert.
denied,
459 U.S. 1040,
103 S. Ct. 456,
74 L. Ed.2d 608 (1982).
In Bledsoe, the court explained that proof of an "ascertainable
structure" is essential to avoid collapsing the two components of
a RICO crime -- the involvement in a distinct enterprise and in a
pattern of racketeering activity -- into a single component. 674
F.
2d at 663-65.
Several courts have rejected the view that a distinct
"ascertainable structure" is a necessary component of a RICO
enterprise. Those courts have applied Turkette literally,
requiring proof only of an ongoing informal organization. See,
e.g., United States v. Cagnina,
697 F.2d 915, 921 (11th Cir.),
cert. denied,
464 U.S. 856,
104 S. Ct. 175,
78 L. Ed.2d 157
(1983); United States v. Pelullo,
964 F.2d 193, 212 (3rd Cir.
1992); United States v. Perholtz,
842 F.2d 343, 362-63
(D.C.Cir.), cert. denied,
488 U.S. 821,
109 S. Ct. 65,
102 L. Ed.2d 42 (1988); United States v. Mazzei,
700 F.2d 85, 89-90 (2nd
Cir.), cert. denied,
461 U.S. 945,
103 S. Ct. 2124,
77 L. Ed. 1304 (1983). In United States v. Bagaric,
706 F.2d 42, 56, cert.
denied.,
464 U.S. 840,
104 S. Ct. 134,
78 L. Ed.2d 128 (1983),
the Second Circuit Court of Appeals took perhaps the broadest
approach in stating that "any associative group" may be
characterized "in terms of what it does, rather than by abstract
analysis of its structure." (emphasis in original). The Eleventh
Circuit Court of Appeals observed in United States v. Weinstein,
762 F.2d 1522, 1537 (1985), cert. denied,
475 U.S. 110,
106 S.
Ct. 1519,
89 L. Ed.2d 917 (1986), that "the definitive factor in
determining the existence of a RICO enterprise [is] an
association of individuals, however loose or informal, which
furnishes a vehicle for the commission of two or more predicate
crimes." See Vitter, supra,
62 Tul. L. Rev. at 1438-40 (noting
that distinctness of enterprise is evidenced by many traits,
including "a decision-making structure" and "an advanced division
of labor").
Over thirty states have some form of anti-racketeering act,
all of which are modeled generally on federal RICO. Georgia, New
Mexico, and Oregon have rejected the position that an
ascertainable structure distinct from the pattern of racketeering
activity is required to prove an enterprise. See Martin v.
State,
376 S.E.2d 888, 892-93 (Ga. App. 1988); State v. Hughes,
767 P.2d 382, 387-88 (N.M. App. 1988); State v. Cheek,
786 P.2d 1305, 1307-08 (Or. App. 1990). In contrast, Florida, and New
York (whose statute is unique in that it explicitly requires an
enterprise to have "an ascertainable structure distinct from a
pattern of racketeering activity," N.Y. Penal Law § 460.10-3
(McKinney 1989)) insist that the State establish that the alleged
enterprise had a structure and that it was separate from the
pattern of racketeering activity. See Boyd v. State,
578 So.2d 718, 721-22 (Fla. App. 1991), review den.
581 So.2d 718; People
v. Wakefield Fin. Corp.,
590 N.Y.S.2d 382, 388-89 (Sup. Ct.
1992). Minnesota requires a showing "that there is an
organizational set-up, whether formal or informal, that not only
exists to commit the predicate acts but also does more, such as
coordinating those acts into an overall pattern of criminal
activity." State v. Huynh,
519 N.W.2d 191, 196 (Minn. 1994).
Idaho and Pennsylvania rely on Turkette for their definitions of
"enterprise." See State v. Hansen,
877 P.2d 898, 901-03 (Id.
1994); Commonwealth v. Donahue,
630 A.2d 1238, 1245-46 (Pa.
Super. 1993), review den.
645 A.2d 1316 (1994).
Clearly, courts have not found any one uncontroversial
definition of "enterprise." Indeed, an empirical study indicates
that, even as used in common parlance, the word "enterprise" has
no single, well-established meaning. See Clark D. Cunningham, et
al., Plain Meaning and Hard Cases, 103 Yale L.J. 1561 (1994).
The Appellate Division here reasoned that "'the nature of
the misconduct often provides the best clue toward defining the
enterprise . . . . [I]t is logical to characterize any
associative group in terms of what it does, rather than by
abstract analysis of its structure.'" 268 N.J. Super. at 107
(quoting Bagaric, supra, 706 F.
2d at 55-56). It accordingly held
that
[t]he "enterprise" element will be satisfied
if there exists a group of people, no matter
how loosely associated, whose existence or
association provides or implements the common
purpose of committing two or more predicate
acts. We go so far as to hold [that] the
"enterprise" element is satisfied if the
"enterprise" is no more than the sum of the
racketeering acts. Thus, the "enterprise"
does not have to be an organization whose
purpose is greater than the predicate acts,
nor does it have to evidence any definable
structure.
Our understanding of the term "enterprise" is derived from the extensive legislative history and decisional law dealing with both the State and federal RICO statutes. Those sources support the following conclusions. First, the RICO statute itself in using the term "enterprise" contains no express or implied requirement for a distinct ascertainable structure; rather, it is framed broadly to include any group of persons "associated in fact." Second, the legislative history shows that the term "enterprise" was meant to be construed broadly. The statute itself, N.J.S.A. 2C:41-6, commands the liberal construction of "enterprise." The drafters intended New Jersey RICO to encompass
more than traditional organized-crime families, which commonly
contain an internal command system or structure. Rather, the
Legislature intended its statute to reach less organized and non-traditional criminal elements as well.See footnote 2 Assembly Judiciary,
Law, Public Safety and Defense Committee, Meeting on A-1079, at 1
(Oct. 30, 1980) [hereinafter, Committee Meeting.] Further, the
definition of "enterprise" was changed to include sole
proprietorships, business and charitable trusts, illicit
enterprises, and governmental "as well as other entities,"
N.J.S.A. 2C:41-1c, which changes were meant "to broaden the
definition of enterprise." See Committee Meeting, supra.
In addition, the Legislature's intent not to cover small-scale operations by its broad definition of "enterprise" was
expressed in the statement in the Declaration of Policy and
Legislative Findings, N.J.S.A. 2C:41-1.1c, that the Act should
target only organized-crime-type activities that are substantial
in nature. See also Committee Meeting at 2 (RICO sanctions are
directed toward "substantial organized crime activity.").
Lastly, the Supreme Court's discussion of enterprise in Turkette
refers to organization, not structure, and fairly understood,
required only an informal organization functioning as a
continuing unit.
Accordingly, we hold, first, that under the RICO Act
"enterprise" is an element separate from the "pattern of
racketeering activity," and that the State must prove the
existence of both in order to establish a RICO violation. The
offenses proscribed in N.J.S.A. 2C:41-2a to -2d include both as
elements of the crime. The enterprise is the association, and
the pattern of racketeering activity consists of the predicate
incidents. Nevertheless, evidence that serves to establish such
an enterprise need not be distinct or different from the proof
that establishes the pattern of racketeering activity.
We hold, further, that because the enterprise is distinct
from the incidents constituting the pattern of activity, it must
have an "organization." The organization of an enterprise need
not feature an ascertainable structure or a structure with a
particular configuration. The hallmark of an enterprise's
organization consists rather in those kinds of interactions that
become necessary when a group, to accomplish its goal, divides
among its members the tasks that are necessary to achieve a
common purpose. The division of labor and the separation of
functions undertaken by the participants serve as the
distinguishing marks of the "enterprise" because when a group
does so divide and assemble its labors in order to accomplish its
criminal purposes, it must necessarily engage in a high degree of
planning, cooperation and coordination, and thus, in effect,
constitute itself as an "organization."
This understanding of the kind of organization that
establishes an "enterprise" is different from, but not
necessarily inconsistent with, that understanding of "enterprise"
premised on an "ascertainable structure." Thus, evidence showing
an ascertainable structure will support the inference that the
group engaged in carefully planned and highly coordinated
criminal activity, and therefore will support the conclusion that
an "enterprise" existed. Apart from an organization's structure
as such, however, the focus of the evidence must be on the number
of people involved and their knowledge of the objectives of their
association, how the participants associated with each other,
whether the participants each performed discrete roles in
carrying out the scheme, the level of planning involved, how
decisions were made, the coordination involved in implementing
decisions, and how frequently the group engaged in incidents or
committed acts of racketeering activity, and the length of time
between them.
The second major interpretive issue in the case involves the content of the element of "pattern of racketeering activity." We must consider, further, whether use of this phrase renders the statute unconstitutionally vague.
For criminal liability under RICO to attach, a defendant's
involvement in an enterprise must be accomplished "through a
pattern of racketeering activity." N.J.S.A. 2C:41-2c. A
"pattern of racketeering activity," according to N.J.S.A. 2C:41-1d, requires:
(1) Engaging in at least two incidents of
racketeering conduct one of which shall have
occurred after the effective date of this act
and the last of which shall have occurred
within 10 years (excluding any period of
imprisonment) after a prior incident of
racketeering activity; and
(2) A showing that the incidents of
racketeering activity embrace criminal
conduct that has either the same or similar
purposes, results, participants or victims or
methods of commission or are otherwise
interrelated by distinguishing
characteristics and are not isolated
incidents.
The New Jersey definition descends from the briefer federal
definition of "pattern of racketeering activity."See footnote 3 The debate
over how to interpret the federal "pattern of racketeering
activity,"
18 U.S.C.A.
§1961(5), began with Sedima, S.P.R.L. v.
Imrex Co.,
473 U.S. 479,
105 S. Ct. 3275,
87 L. Ed.2d 346
(1985). In a footnote, the Supreme Court noted that the
definition of "pattern of racketeering activity" differs from the
other definitions of the federal RICO statute in that it states
that a pattern requires at least two predicate acts, not that it
means two such acts. 473 U.S. at 496 n.14, 105 S. Ct. at 3285
n.14, 87 L. Ed.
2d at 358 n.14. Observing that two of anything
rarely forms a "pattern," the Court stated that the statute
implied that although two acts are necessary, they may not be
sufficient. Ibid.
The signal in Sedima produced decisional conflicts among the
circuits, which the Supreme Court resolved in H.J. Inc. v.
Northwestern Bell Telephone Co.,
492 U.S. 229,
109 S. Ct. 2893,
106 L. Ed.2d 195 (1989). The Supreme Court determined in H.J.
Inc. that the statutory definition of "pattern of racketeering
activity," by using the term "requires," placed a broad "outer
limit" on the concept of two predicate acts. Id. at 237, 109 S.
Ct. at 2899, 106 L. Ed.
2d at 206. From the legislative history,
the Court deduced that "'[i]t is th[e] factor of continuity plus
relationship which combines to produce a pattern.'" Id. at 239,
109 S. Ct. at 2900, 106 L. Ed.
2d at 208 (quoting 116 Cong. Rec.,
at 18940 (1970) (emphasis added)). Thus, according to the Court,
proof of a pattern required a showing that the predicate acts
"are related, and that they amount to or pose a threat of
continued criminal activity." Ibid.
The relatedness requirement, the Court explained, covers
"'criminal acts that have the same or similar purposes, results,
participants, victims, or methods of commission, or otherwise are
interrelated by distinguishing characteristics and are not
isolated events.'" Id. at 240, 109 S. Ct. at 2901, 106 L. Ed.
2d
at 208 (quoting and deriving its definition from the Dangerous
Special Offender Act,
18 U.S.C.A.
§3575(e), enacted in
conjunction with RICO).
"Continuity," according to the Court, is "both a closed- and
open-ended concept, referring either to a closed period of
repeated conduct, or to past conduct that by its nature projects
into the future with a threat of repetition. It is, in either
case, centrally a temporal concept." Id. at 241-42, 109 S. Ct.
at 2902, 106 L. Ed. at 209 (citation omitted). The Court further
determined that although relatedness and continuity make up two
distinct prongs of the "pattern" requirement, proof of the two
"will often overlap." Id. at 239, 109 S. Ct. at 2900, 106 L. Ed.
2d at 208.See footnote 4
The meaning of "pattern of racketeering activity" has long
perplexed courts. Indeed, before the United States Supreme Court
declared a definitive federal interpretation of the "pattern of
racketeering activity" element, lower federal courts produced a
variety of interpretations. Lisa Barsoomian, RICO "Pattern"
Before and After H.J. Inc.: A Proposed Definition, 40 Am. U.
L.Rev. 919, 925 (1991) (identifying five distinct understandings
of the element).
The Eighth Circuit Court of Appeals read "pattern of
racketeering activity" to require proof that the criminal
enterprise operates at least two distinct, unconnected schemes.
See Phenix Fed. Sav. & Loan v. Shearson Loeb Rhodes Inc.,
856 F.2d 1125, 1128 (1988), cert. denied,
489 U.S. 1066,
109 S. Ct. 1340,
103 L. Ed.2d 810 (1989). Other federal courts understood
"pattern of racketeering activity" to require not two distinct
schemes, but rather only participation "in two or more predicate
acts or crimes," e.g., United States v. Alexander,
850 F.2d 1500,
1506 (11th Cir. 1988), cert. denied,
489 U.S. 1068,
109 S. Ct. 1346,
103 L. Ed.2d 814 (1989), without the need to show some
cogent relationship connecting the plurality of acts. E.g.,
United States v. Elliott,
571 F.2d 880, 897 n.23 (5th Cir. 1978),
cert. denied
439 U.S. 953,
99 S. Ct. 349,
58 L. Ed.2d 344
(1978). Some federal courts before H.J. Inc. adopted a "totality
of the circumstances" approach, e.g., United States v.
Indelicato,
865 F.2d 1370, 1381 (2d Cir.), cert. denied,
493 U.S. 811,
110 S. Ct. 56,
107 L. Ed.2d 24 (1989); United States v.
Zauber,
857 F.2d 137, 149 (3d Cir. 1988), cert. denied,
489 U.S. 1066,
109 S. Ct. 1340,
103 L. Ed.2d 810 (1989); Barticheck v.
Fidelity Union Bank,
832 F.2d 36, 39 (3d Cir. 1987).
State definitions of "pattern" also have significantly
varied. The state statutes differ from New Jersey's and from one
another in a variety of ways and those differences have,
ultimately, influenced judicial interpretations. For example,
New Jersey is the only state that provides that the pattern
consists of at least two "incidents," as opposed to "acts." The
statute also requires that at least two of the "incidents" of
racketeering be related to each other. Cf. Fla. Stat. Ann §
895.02(4) (West 1994) (providing, unlike New Jersey, pattern
means at least two acts that are related to each other); Ga. Code
Ann. § 16-14-3(8) (Michie 1992) (same); Idaho Code § 18-7803(d)
(Michie 1987) (same); Ind. Code § 35-45-6-1 (Michie 1987) (same);
see also Col. Rev. Stat. Ann. § 18-17-103(3) (West 1986) (same
and providing also a relation of acts to the enterprise); Or.
Rev. Stat. § 166.715(4) (1993) (same). Some states have adopted
a "relationship and continuity" interpretation of their pattern
of racketeering activity element. E.g., State v. Lucas,
600 So.2d 1093, 1094-96 (Fla. 1992); Kollar v. State,
556 N.E.2d 936,
940-41 (Ind. App. 1990). Others reject the "continuity" element
of the H.J. Inc. test. E.g., People v. Chaussee,
880 P.2d 749,
753-59 (Colo. 1994); Larson v. Smith,
391 S.E.2d 686, 688 (Ga.
App. 1990); Computer Concepts, Inc. v. Brandt,
801 P.2d 800, 807-09 (Ore. 1990).
In ascertaining the meaning of "pattern of racketeering
activity," the Appellate Division concluded that the New Jersey
statute required relatedness but not continuity. It determined
that "to establish a 'pattern[,]' it need * * * be shown [only
that] the predicate acts are related. It is not necessary to
show continuity as required under Federal RICO." 268 N.J. Super.
at 144.
In reaching that conclusion, the Appellate Division found
explicit support in the statute itself for the relatedness
requirement, see N.J.S.A. 2C:41-1d(2), but none for a requirement
of continuity. 268 N.J. Super. at 142-43. The court found
persuasive the Oregon Supreme Court's reasoning in Computer
Concepts, supra, 801 P.
2d at 807-09, which emphasizes that the
Oregon statute expressly defines pattern in terms of relatedness
and that its legislature had not focused only on long-term or
future-oriented racketeering. Similarly, the Appellate Division
noted that the "Declaration of Policy and Legislative Findings"
contained in N.J.S.A. 2C:41-1.1 did not refer to "long term
criminal activity," but rather aimed to eliminate all organized
criminal activity, regardless of duration. Id. at 142. The
court also found that the New Jersey Legislature intended its
RICO statute to be even broader in scope than the federal act.
Id. at 107.
The Appellate Division reasonably found in the statute and
its legislative history an intent on the part of the Legislature
not to require "continuity" as an element of "pattern of
racketeering activity," at least not in any strong or distinctive
sense of the term. We do not conclude, however, that
"continuity" is irrelevant to demonstrating a "pattern of
racketeering activity." We note that in discussing the
definition of "pattern of racketeering activity," the Assembly
Committee observed that the new version "substituted 'incident'
for 'act' because "act" is a somewhat restrictive term . . .
whereas an incident more aptly represents -- a circumstance or
happening." Committee Meeting at 7. We infer from the
preference for the word "incident," with its perceived meaning of
"happening" or "circumstance," that the Legislature intended to
cover a broader spectrum of behavior than is connoted by "act."
The pattern of racketeering activity and the activity
criminalized under RICO should be, or threaten to be, ongoing.
In addition, the Legislature expressed its clear concern
that the underlying incidents not be isolated events. Ibid.
Chairman Herman remarked that criminal activity may have
"interruptions" without thereby defeating the "pattern" element.
A member of the Committee also commented that criminal activity
"doesn't have to be continuous, in other words. You can have
interruptions." Thus, the Committee recognized that there had to
be some "connective tissue among criminal incidents," but that it
need not be continuous in the sense of completely uninterrupted
as long as the incidents are not isolated or disconnected.
Thus, RICO was not designed to punish mere repeated
offenses. Id. at 8. The Deputy Attorney General acknowledged
that to be consistent with the Legislature's declaration of
purpose the pattern must be more than just a string of two or
more similarly-committed crimes. Id. at 2. Indeed, our statute
expressly enjoins use of the RICO statute to cover isolated
criminal incidents. N.J.S.A. 2C:41-1d(2). Thus, "continuity,"
understood as an antonym of the terms "isolated" or "sporadic,"
points to "incidents of criminal conduct" that exhibit some
ongoing connection. E.g., Indelicato, supra, 865 F.
2d at 1383;
Sun Savings & Loan Ass'n v. Dierdorff, supra,
825 F.2d 187, 192
(9th Cir. 1987). We agree with Amicus that the statute itself
implies some ongoing connection or continuity also in its express
specification that "incidents of racketeering activity embrace
criminal conduct that [is] . . . otherwise interrelated by
distinguishing characteristics. . . ." N.J.S.A. 2C:41-id(2)
(emphasis added).
We thus conclude that some degree of continuity, or threat
of continuity, is required and is inherent in the "relatedness"
element of the "pattern of racketeering activity."
Obviously, different interpretative avenues present
themselves. Although we do not require "continuity" as a
distinctive sub-element of "pattern," we find sound and
persuasive the reasoning of those courts that use a "totality of
the circumstances" approach in applying the federal "continuity
plus relationship" test for determining the existence of a
pattern of racketeering activity. See, e.g., Banks v. Wolk,
918 F.2d 418, 423 (3rd Cir. 1990) (finding multi-factor test to
survive H.J., Inc.). The theory underlying this totality-of-the
circumstances standard was articulated in Indelicato, supra. It
interpreted footnote 14 of Sedima, supra, as
not enshrin[ing] `continuity plus
relationship' as a determinative two-pronged
test. Rather, the [United States Supreme]
Court quotes this language to demonstrate how
the pattern requirement should be interpreted
to prevent the application of RICO to the
perpetrators of `isolated' or `sporadic'
criminal acts.
[865 F.
2d at 1383 (quoting Sun
Savings & Loan Ass'n, supra, 825
F.
2d at 192.]
The factor of "continuity," as acknowledged by the Supreme Court
in H.J. Inc., may itself be established by evidence that overlaps
the evidence establishing "relatedness." 492 U.S. at 239, 109 S.
Ct. at 2900, 106 L. Ed.
2d at 208. As the court in Zauber
stated:
[a] combination of specific factors, "such as
the number of unlawful acts, the length of
time over which the acts were committed, the
similarity of the acts, the number of
victims, the number of perpetrators, and the
character of the unlawful activity" could be
considered in determining whether a pattern
existed.
[857 F.
2d at 149 (quoting and
applying holding of Barticheck v.
Fidelity Union Bank, supra, 832
F.
2d at 39.]
An understanding of "relatedness" based on a totality of
circumstances is compatible with the statutory definition that
enumerates several factors -- purposes, results, participants,
victims and methods and other characteristics -- that may combine
or be "otherwise interrelated" to establish a pattern from the
"incidents of racketeering activity" that in any event may not be
"isolated." N.J.S.A. 2C:41-1d(2).
In the most likely setting, predicate incidents of
racketeering conduct will occur sequentially over a period of
time. New Jersey's legislative discussions, unlike Congress', do
not indicate a concern for reaching only long-term criminal
activity. But short-term criminal activity, to be covered, must
encompass incidents of criminal conduct that are not disconnected
or isolated. Incidents of racketeering that occur sequentially,
to overcome any inference that they are totally disconnected or
isolated, must exhibit some temporal connection or continuity
over time.
Accordingly, we conclude that the primary criterion of New
Jersey's "pattern of racketeering activity" is "relatedness."
That calls for the application of a broad standard involving the
totality of all relevant circumstances, which may include
"continuity."
We consider further defendant's contention that the RICO
statute, particularly its provision for "pattern of racketeering
activity," is unconstitutionally vague. The Appellate Division
found that the term "pattern of racketeering activity" was not
vague. 268 N.J. Super. at 144. We agree.
Vagueness challenges to RICO statutes have been rejected by
every circuit to consider the issue. United States v. Dischner,
974 F.2d 1502, 1508 (9th Cir. 1992), cert. denied, ___ U.S. ___,
113 S. Ct. 1290,
122 L. Ed.2d 682 (1993). Those courts confirm
that the lack of clarity in RICO does not necessarily mean that a
vagueness challenge will succeed. See, e.g., United States v.
Woods,
915 F.2d 854, 862-64 (3rd Cir. 1990), cert. denied,
499 U.S. 947,
111 S. Ct. 1413,
113 L. Ed.2d 466 (1991); United
States v. Angiulo,
897 F.2d 1169, 1178-80 (1st Cir.), cert.
denied,
498 U.S. 845,
111 S. Ct. 130,
112 L. Ed.2d 98 (1990);
United States v. Van Dorn,
925 F.2d 1331, 1334 n.2 (11th Cir.
1991); United States v. Glecier,
923 F.2d 496, 497 n.1 (7th
Cir.), cert. denied,
501 U.S. 1217,
112 S. Ct. 54,
116 L. Ed.2d 31 (1991); United States v. Coiro,
922 F.2d 1008, 1017 (2nd
Cir.), cert. denied, 501 U.S. ___,
111 S. Ct. 2826,
115 L. Ed.2d 996 (1991). Potential uncertainty in marginal fact situations
does not render RICO vague with respect to the challenging
defendant's conduct. Dischner, supra, 974 F.
2d at 1510.
The United States Supreme Court has not squarely confronted
a RICO "vagueness" challenge, but it has supplied some clues
about its views. In Fort Wayne Books, Inc. v. Indiana,
489 U.S. 46, 58,
109 S. Ct. 916, 924-25,
103 L. Ed.2d 34, 48 (1989), the
Court found that Indiana RICO was not vague as applied in the
context of the defendants' obscenity predicate offenses. The
Court observed that RICO is inherently less vague than any of the
statutes criminalizing the predicate acts because "a prosecution
under the RICO law will be possible only where all the elements
of [the underlying offense] are present, and then some." Id. at
58 n.7, 109 S. Ct. at 925 n.7, 103 L. Ed.
2d at 48 n.7. See
H.J., Inc., supra,
492 U.S. 229, 235,
109 S. Ct. 2893, 2898,
106 L. Ed.2d 195, 205 (rejecting a similar challenge in the course
of interpreting "pattern of racketeering activity").
A statute is vague on its face if "there is no conduct that
it proscribes with sufficient certainty." State v. Cameron,
100 N.J. 586, 593 (1985). A statute may also be vague as applied if
"the law does not with sufficient clarity prohibit the conduct
against which it is sought to be enforced." Ibid.
The Appellate Division concluded that defendants had not
demonstrated that the statute's definition of "pattern" failed to
put them on notice that their behavior constituted a pattern of
racketeering activity under RICO. 268 N.J. Super. at 117. The
court correctly noted that to succeed in an as-applied challenge
to RICO, a defendant must show that RICO could not reasonably be
applied to his or her alleged conduct. Id. at 117. The court
also found that even if RICO may be unconstitutionally vague in
some marginal situations, it was not vague with respect to these
defendants, whose actions involved submitting fraudulent forms at
the baler, bribing public officials for licenses, and money
laundering. Id. at 117-18. See State v. Passante,
225 N.J.
Super. 439, 446-50 (Law Div. 1987).
We conclude that the term "pattern of racketeering activity"
is not unconstitutionally vague. The statute makes clear that
when certain conduct that the Legislature has already made
criminal is committed in a certain way with a certain purpose, it
will carry an enhanced penalty. The term is also not vague as
applied to defendants. Any person of ordinary intelligence would
realize that defendants' activities constituted conduct that the
law proscribed.
The State charged that the defendants "participate[d], directly or indirectly, in the conduct of the enterprise's affairs," in violation of N.J.S.A. 2C:41-2c. Defendants were also charged under N.J.S.A. 2C:41-2d, which provides that "(i)t shall be unlawful for any person to conspire as defined by N.J.S. 2C:5-2, to violate any of the provisions of this section." Defendants contend that the State failed to prove that they had participated in the affairs of an enterprise or that they conspired to engage in such unlawful participation. The issues with respect to the meaning and application of these provisions are interrelated.
N.J.S.A. 2C:41-2c, as earlier noted, provides that
[i]t shall be unlawful for any person employed by or associated with any enterprise engaged in or activities of which affect trade or commerce to conduct or participate, directly or indirectly, in the conduct of the enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt.
In drafting this section of the statute, the Legislature again
for guidance looked to the parallel provision of the federal RICO
statute,
18 U.S.C. §1962(c), which uses virtually the same
terms.
The United States Supreme Court in Reves v. Ernst & Young,
507 U.S. ___,
113 S. Ct. 1163,
122 L. Ed.2d 525 (1993),
interpreted the phrase "to conduct or participate, directly or
indirectly, in the conduct of the enterprise's affairs," a phrase
identical to that used in the New Jersey provision. The Court
concluded that as both a noun and a verb, the word "conduct"
required an element of direction, and "participate" meant "to
take part in." Thus, to satisfy subsection (c), according to the
Court, one must have some part in directing the affairs of the
enterprise, and hence the Court imposed an "operation or
management" test. Id. at ___, 113 S. Ct. at 1169-70, 122 L. Ed.
2d at 536-37.
Justice Souter, joined by Justice White, dissented. He
stated that the noun "conduct" simply meant "carrying forward"
and implied no element of direction. Id. at ___, 113 S. Ct. at
1174, 122 L. Ed.
2d at 542. Moreover, even if the Court
"call[ed] it a tie" on the definitional analysis, the liberal-construction clause counseled against the majority's narrower
reading. Id. at ___, 113 S. Ct. at 1175, 122 L. Ed.
2d at 542-43. See Bryan T. Camp, Dual Construction of RICO: The Road Not
Taken in Reves, 51 Wash & Lee L.Rev. 61, 78-79 (1994)
(questioning the reasoning by which the Supreme Court deduced the
existence of the "operation-or-management" test).
Until the decision in Reves, supra, the operation-or-management test had not gained general acceptance in the federal
courts. Some courts did anticipate the Supreme Court's ultimate
decision and applied an operation-or-management test. See, e.g.,
United States v. Mandel,
591 F.2d 1347, 1374-75 (4th Cir. 1979),
rehearing den.
609 F.2d 1076, cert. denied,
445 U.S. 961, 100 S.
Ct. 1647, 64 L. Ed.2d 236 (1980); Bennett v. Berg, 710 F.2d 1361, 1364 (8th Cir. 1983) (en banc), cert. denied sub nom Pruden