Second Circuit Rules Liability for Only RICO conspiracy Not Inconsistent

Ruocco v. Hemmerdinger Corporation, 2017 WL 4387184 (2d Cir., Oct. 10, 2017)

The Court affirmed the denial of Defendants Ruocco and Tomicic’s post-trial motions for judgment as a matter of law or a new trial after a jury had found the Defendants liable under RICO conspiracy.

Hemmerdinger sued the Defendants for state law fraud (“Claim One”), a substantive claim under the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1962(c) (“Claim Two”), and a claim for conspiracy to violate RICO, § 1962(d) (“Claim Three”). The jury found Tomicic and McCambridge liable for fraud (Claim One), and concluded that Ruocco, ETI, Tomicic, and Recycle Technology had participated in a RICO conspiracy (Claim Three), but NOT Claim Two. The court entered judgment on June 6, 2016. Ruocco, ETI, and Tomicic then filed post-trial motions for judgment as a matter of law and a new trial. When these motions were denied, Ruocco and Tomicic filed a timely notice of appeal.

On appeal, Ruocco and Tomicic argued that the jury verdict was inconsistent, and that the district court’s jury instruction as to the RICO conspiracy claim (Claim Three) was flawed because the jury did not find on Claim Two (1962(c)) that a civil enterprise existed among the defendants. The jury had found there was an agreement among two or more persons to participate in an enterprise that would affect interstate commerce through a pattern of racketeering activity and thus had found liability as to Claim Three (RICO conspiracy).

Defendants also asserted that a jury may not find defendants liable for a RICO conspiracy after it has expressly found that a RICO “enterprise” does not exist. Ruocco and Tomicic argued, in addition, that a RICO conspiracy claim cannot succeed unless at least one defendant is found liable for a substantive RICO offense, so finding liability for Claim Three (§ 1962(d), RICO conspiracy) but not Claim Two (§ 1962(c), a substantive RICO offense) is inconsistent. This claim was rejected.

The trial judge had answered a question during deliberations in the affirmative that

“are claim two and claim three independent of each other as in the defendants can be found guilty of claim three, irrespective of the outcome of claim two?”

Even Ruocco’s attorney had agreed that the answer was yes, and no other party objected.

Ruocco and Tomicic both acknowledged that the instruction to which they object is taken from Leonard B. Sand, et al., Modern Federal Jury Instructions, CIVIL, # 84–35 (Lexis 2016), and that they did not raise this challenge either during the district court’s charge conference or in their post-trial motions.

Thus, the court found the district court did not err in setting aside the verdict as
inconsistent, and that “endorsement [of a jury charge] might well be deemed a true waiver, negating even plain error review.” The Court did not find the verdict to be inconsistent, and Defendants/Appellants’ second attack on the consistency of the jury verdict was waived.

The Court stated that it has held that when, as here, a trial court based jury instructions on pattern jury instructions that reflect current law, there is no plain error. The Modern Federal Jury Instructions supplied the very language that Ruocco and Tomicic now object to, and they have not cited any authority that plainly shows the Modern Federal Jury Instructions were incorrect.

Ed Note: This case importantly stands for the proposition, even without considering waiver by Defendants/Appellants that a defendant can be found liable under RICO conspiracy irrespective of the outcome of substantive RICO claim.




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