
USCA1 Opinion

	




        November 21, 1995       [NOT FOR PUBLICATION]                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                                            ____________________        No. 95-1055                                WILLIAM GABOVITCH, ETC.,                                Plaintiff, Appellant,                                          v.                                MAURICE SHEAR, ET AL.,                                Defendants, Appellees.                                 ____________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS                     [Hon. William G. Young, U.S. District Judge]                                             ___________________                                 ____________________                                        Before                                Torruella, Chief Judge,                                           ___________                           Stahl and Lynch, Circuit Judges.                                            ______________                                 ____________________            William Gabovitch on brief pro se.            _________________            Brian A. Davis,  Julie B. Brennan,  and Choate, Hall &  Stewart on            ______________   ________________       _______________________        brief for appellees.                                 ____________________                                 ____________________                 Per  Curiam.   Pro  se  plaintiff  William Gabovitch,  a                 ___________            certified  public  accountant  and  non-practicing  attorney,            served  for nearly  eighteen  years as  a  co-trustee of  two            irrevocable inter vivos trusts created by Maurice Shear.   In            1992, in connection with litigation filed in 1987 by Gertrude            Shear (Maurice's wife and  the contingent life beneficiary of            the  trusts), a state court  judge removed plaintiff from his            position  as  trustee  and  ordered him  to  pay  substantial            damages   because  of  his   mismanagement  of   the  trusts.            Plaintiff's  appeal from  that  decision remains  pending  in            state  appellate court.    Claiming that  the allegations  of            mismanagement were  frivolous and  that his removal  had been            fraudulently obtained, plaintiff  pursued various  collateral            actions in state court--all without avail.  He then turned to            federal court,  filing the instant civil  RICO action against            the  Shears  (and  others),  seeking  injunctive  relief  and            damages on behalf  of both himself  and the  trusts.  See  18                                                                  ___            U.S.C.   1964(c).   The district court, following a  hearing,            dismissed the complaint for failure to state a claim.  Having            reviewed  the  record  in  full,  and  having  construed  the            complaint  in the  light  most favorable  to plaintiff,  see,                                                                     ___            e.g., Feinstein v.  Resolution Trust Corp.,  942 F.2d 34,  37            ____  _________     ______________________            (1st Cir. 1991), we now affirm.1                                            ____________________            1.  While we  have accepted all well-pled  allegations in the            complaint  as true  and  drawn all  reasonable inferences  in            plaintiff's  favor,   there  is   an  inconsistency   in  his                                         -3-                 Extended  discussion is  unnecessary.   To state  a RICO            claim,  plaintiff  was  required  to  allege that  defendants            conducted  an enterprise  through  a pattern  of racketeering            activity.  See,  e.g., Libertad  v. Welch, 53  F.3d 428,  441                       ___   ____  ________     _____            (1st Cir.  1995).  As well, he was required to allege that he            suffered  injury in his business or property "by reason of" a            RICO  violation.   18 U.S.C.    1964(c);  see,  e.g., Sedima,                                                      ___   ____  _______            S.P.R.L.  v.  Imrex  Co.,  473  U.S.  479, 496  (1985)  ("the            ________      __________            plaintiff has standing if, and can only recover to the extent            that,  he has been injured in his business or property by the            conduct  constituting the [RICO] violation"); see also Holmes                                                          ________ ______            v. Securities  Investor Protection  Corp., 503 U.S.  258, 268               ______________________________________            (1992)  (RICO  plaintiff  must  allege, not  only  "but  for"            causation,  but  also  proximate  causation  requiring  "some            direct relation between the injury asserted and the injurious            conduct alleged").                 This causation requirement enables us, at the outset, to            put  to  the side  vast  portions  of plaintiff's  voluminous            complaint.    For  example, plaintiff  has  detailed numerous            instances  of  criminal  and  fraudulent  activity  allegedly            undertaken by various of the defendants during the 1970's and                                            ____________________            narrative.   The Shears' principal motivation  for filing the            1987  lawsuit,  plaintiff  contends,  was to  remove  him  as            trustee  and  thereby gain  control  of  the trusts'  primary            asset--the Mount Pleasant Hospital.  Yet  plaintiff elsewhere            explains  that the  trusts  had sold  their  interest in  the            hospital  the previous  year  (and only  reacquired ownership            thereof in 1991).                                         -4-            1980's.  Yet no contention is made that such conduct resulted            in  injury to  plaintiff's business  or  property.   In turn,            plaintiff  charges that  defendants  have engaged  in various            misdeeds  following his  ouster as  trustee in  January 1992.            Again,  such  actions  are  not linked  to  any  business  or            property loss suffered by plaintiff.  We note  that plaintiff            lacks  standing   to  complain   of  injury  to   the  trusts            themselves,  having been removed  as trustee by  the time the            instant suit was filed.   And the suggestion that  his status            as  a potential creditor of the trusts grants him standing to            sue on his own behalf  is misplaced.  See, e.g., id.  at 271;                                                  ___  ____  ___            National Enterprises v. Mellon  Financial Services, 847  F.2d            ____________________    __________________________            251, 254 (5th Cir. 1988).                 The  only business  or  property injury  alleged in  the            complaint is  that stemming  from the state  court judgment--            i.e.,  plaintiff's  loss  of  his position  as  trustee;  the            accompanying  monetary damages;  the  resulting harm  to  his            reputation and  client base; and the  legal expenses incurred            in litigating that action.  The question thus becomes whether            plaintiff  has set forth a predicate act of racketeering that            has proximately caused such injury.  Plaintiff insists he has            done  so in  two  respects.   He argues  that  the filing  by            defendants of the  state court  suit (as part  of a  broader,            unlawful scheme) constituted attempted extortion in violation            of  the Hobbs  Act, 18  U.S.C.    1951.   And he  argues that                                         -5-            Gertrude Shear, by proffering false  affidavits and testimony            to  the state court (allegedly at the behest of her husband),            committed mail  fraud in violation of  18 U.S.C.   1341.   We            disagree that such  claims establish the  necessary predicate            act.                 Numerous courts have held that the filing of litigation-            -no  matter  how  lacking  in merit--does  not  constitute  a            predicate racketeering  act  of extortion.    "If a  suit  is            groundless  or filed  in  bad faith,  the  law of  torts  may            provide  a remedy.  Resort  to a federal  criminal statute is            unnecessary."   I.S. Joseph Co. v. J. Lauritzen A/S, 751 F.2d                            _______________    ________________            265,  267-68 (8th  Cir.  1984); accord,  e.g., First  Pacific                                            ______   ____  ______________            Bancorp, Inc.  v. BRO, 847 F.2d 542, 545 (9th Cir. 1988); von            _____________     ___                                     ___            Bulow by Auersperg v.  von Bulow, 657 F. Supp.  1134, 1143-45            __________________     _________            (S.D.N.Y.  1987) (holding  that  malicious prosecution  claim            does   not   constitute  predicate   act   of  racketeering).            Plaintiff's reliance on Hall American Center Assocs. v. Dick,                                    ____________________________    ____            726  F. Supp. 1083 (E.D. Mich. 1989), proves unavailing.  The            defendants there had engaged in spurious litigation described            by the  district court as a "clear abuse of process."  Id. at                                                                   ___            1086.  The defendants here prevailed in the state court suit.            And Lemelson v. Wang Laboratories, Inc., 874 F. Supp. 430 (D.                ________    _______________________            Mass. 1994),  offers minimal  succor to plaintiff,  since the            court there was addressing the subject of RICO  injury rather            than predicate acts.                                         -6-                 Plaintiff's  mail fraud claim likewise proves deficient.            For one thing, it  lacks the specificity required by  Fed. R.            Civ. P. 9(b).  See, e.g.,  New England Data Services, Inc. v.                           ___  ____   _______________________________            Becher, 829 F.2d  286, 290  (1st Cir. 1987).2   Moreover,  to            ______            the  extent  his  argument  amounts to  the  allegation  that            Gertrude  Shear committed  perjury,  his cause  would not  be            advanced; perjury does not constitute an act of racketeering.            See, e.g.,  Pyramid Securities, Ltd. v.  IB Resolution, Inc.,            ___  ____   ________________________     ___________________            924 F.2d  1114, 1118-19 (D.C.  Cir.), cert. denied,  502 U.S.                                                  ____________            822 (1991); United States v. Williams, 874 F.2d 968, 973 n.17                        _____________    ________            (5th Cir. 1989).                   To be  sure, as plaintiff observes,  several courts have            indicated that a mail fraud claim premised largely on charges            of perjury can suffice as a predicate act.  See, e.g., United                                                        ___  ____  ______            States v. Eisen,  974 F.2d 246,  254 (2d Cir. 1992)  ("use of            ______    _____            the  mail fraud  offense as  a RICO  predicate act  cannot be            suspended  simply because perjury  is part  of the  means for            perpetrating  the  fraud"), cert.  denied,  113  S. Ct.  1840                                        _____________                                            ____________________            2.  The   suggestion   that   the    information   concerning            defendants' use of the mails was in their exclusive control--            such that plaintiff  should be allowed to amend his complaint            following further  discovery, see, e.g., Becher,  829 F.2d at                                          ___  ____  ______            290--falls  short.   As  a party  to  the state  court  suit,            plaintiff obviously was  (or should have  been) aware of  the            circumstances  surrounding  the  defendants'   submission  of            allegedly  fraudulent affidavits  to the  court.   See, e.g.,                                                               ___  ____            Feinstein, 942 F.2d  at 44 ("Although  Becher may in  certain            _________                              ______            circumstances give  a plaintiff a  second bite at  the apple,            its  generous formulation  is  not automatically  bestowed on            every litigant.").                                         -7-            (1993);  see  also Midwest  Grinding Co.  v. Spitz,  976 F.2d                     _________ _____________________     _____            1016, 1022-23 (7th Cir. 1992) (leaving question open).  Here,            however, perjury is  said to constitute the  entire means for            perpetrating the fraud.  As well, the Midwest Grinding  court                                                  ________________            noted that in cases "allowing perjury to serve as a predicate            act  [by  way  of a  mail  fraud  or  obstruction of  justice            allegation], ...  the defendant had either  been convicted of            perjury before the civil RICO action commenced or had perjury            established as  a matter of record in a separate proceeding."            Id. at 1022 n.3 (citations omitted).  Nothing of the sort has            ___            occurred  here; quite to the contrary, the state court deemed            Gertrude Shear's evidence credible.                   In   essence,  simply   by  alleging   that  defendants'            litigation stance  in the state court  case was "fraudulent,"            plaintiff is insisting upon a right to relitigate that entire            case  in federal court (while the case remains pending in the            state appellate court).  The  RICO statute obviously was  not            meant  to endorse any such occurrence.  Cf. Willis v. Lipton,                                                    ___ ______    ______            947 F.2d 998,  1001 (1st  Cir. 1991) ("An  extension of  RICO            standing in these circumstances would serve to 'federalize' a            substantial   volume   of   common   law   fraud   litigation            traditionally left to state courts.").3                                            ____________________            3.  Plaintiff's  two  remaining  arguments  can   be  readily            rejected.  The  district court  was not  required to  convert            defendants' motion  to dismiss into one  for summary judgment            before  taking judicial notice of court papers from the state            court  litigation.  See, e.g.,  Edward v. John Hancock Mutual                                ___  ____   ______    ___________________                                         -8-                 Affirmed.                 _________                                            ____________________            Life Ins. Co., 973 F.2d 1027, 1030 n.1 (1st Cir. 1992);  Mack            _____________                                            ____            v.  South Bay  Beer Distributors, Inc.,  798 F.2d  1279, 1282                __________________________________            (9th Cir. 1986).   Nor did it abuse its discretion in denying            plaintiff's  post-judgment  request  to  amend  his complaint            (following further discovery), where any such amendment would            have  been futile.   See,  e.g., Arzuaga-Collazo  v. Oriental                                 ___   ____  _______________     ________            Federal Sav. Bank, 913  F.2d 5, 7 (1st Cir.  1990); Nodine v.            _________________                                   ______            Textron, Inc., 819 F.2d 347, 349 (1st Cir. 1987).              _____________                                         -9-
