                                                                                                                           Opinions of the United
1995 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


2-13-1995

Tabas v Tabas
Precedential or Non-Precedential:

Docket 92-1495




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Recommended Citation
"Tabas v Tabas" (1995). 1995 Decisions. Paper 42.
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                 UNITED STATES COURT OF APPEALS
                     FOR THE THIRD CIRCUIT



                     Nos. 92-1495; 92-1529



              HARRIETTE S. TABAS; RICHARD S. TABAS;
                 NANCY C. TABAS; GERALD LEVINSON,
         As Executors of the Estate of CHARLES L. TABAS


Appellants

                               v.

               DANIEL M. TABAS; JOSEPH P. CAMPBELL;
         JAMES J. MCSWIGGAN; LEE A. TABAS; ROBERT TABAS;
             SUSAN TABAS TEPPER; LINDA TABAS STEMPEL;
     JOANNE TABAS WURZAK; CAROL TABAS STOFMAN; HOWARD WURZAK




         On Appeal From the United States District Court
            For the Eastern District of Pennsylvania
                 (D.C. Civil Action No. 91-01355)



                    Argued: January 26, 1993
               Before: GREENBERG, ROTH and LEWIS,
                          Circuit Judges

                Reargued In Banc October 18, 1994
       Before: SLOVITER, Chief Judge, BECKER, STAPLETON,
        MANSMANN, GREENBERG, HUTCHINSON, SCIRICA, COWEN,
               NYGAARD, ALITO, LEWIS, ROTH, MCKEE,
                          Circuit Judges

               (Opinion Filed February 13, 1995)



Richard A. Sprague, Esquire (Argued)
Daniel L. Lemisch, Esquire
Denise Pallante, Esquire
Sprague & Sprague
135 South 19th Street
Wellington Building, Suite 400
Philadelphia, PA 19103

Howard K. Goldstein, Esquire
Astor, Weiss, Kaplan & Rosenblum
Broad Street at Walnut
The Bellevue, Sixth Floor
Philadelphia, PA 19102
          Attorneys for Appellants

Harold E. Kohn, Esquire
Robert J. LaRocca, Esquire
Joanne Zack, Esquire (Argued)
Kohn, Nast & Graf, P.C.
1101 Market Street, 24th Floor
Philadelphia, PA 19107
          Attorneys for Appellees




                          OPINION OF THE COURT



ROTH, Circuit Judge:




             In this action, brought under the Racketeer Influenced
and Corrupt Organizations Act ("RICO"), Pub. L. 91-452, Title IX,

84   Stat.   941,   as   amended,   18   U.S.C.   §§   1961-1968,   we   are

presented with the question whether defendants' acts, as alleged,

constituted a "pattern of racketeering activity."           Specifically,

we must determine what showing is required for plaintiffs to meet

the "continuity" prong of RICO's "pattern" requirement.             Because

we find that plaintiffs have alleged a series of acts sufficient

to satisfy RICO's continuity requirement, we will reverse the
district court's grant of summary judgment and remand this case

for further proceedings consistent with this opinion.




               The plaintiffs are four of the executors of the Estate

of Charles Tabas ("the Estate"):                      Charles's widow, Harriette

Tabas;     Richard    Tabas     and    Nancy     Tabas,         two    of     Charles       and

Harriette's      children;      and    Gerald    Levinson,            one    of    Charles's

business    associates.1         In    addition       to    Daniel          Tabas,    who    is

President and Chief Executive Officer of Tabas Enterprises, the

named    defendants     include       Joseph    Campbell,        the       Executive       Vice

President of Tabas Enterprises; James McSwiggan, the Comptroller

of Tabas Enterprises; Daniel's children; and one of Daniel's

sons-in-law.

                                          I.

                                          A.

               In 1964, brothers Charles and Daniel Tabas formed a

partnership, Tabas Enterprises, to conduct real estate and other
business    ventures.          The    partnership       agreement           governing       the

brothers' joint property holdings required that, in the event of

the     death    of   either    partner,        the    surviving            partner    would

distribute      partnership     income     equally         to   himself        and    to    the

estate    of    the   deceased       partner,    regardless           of     any     personal


    1There are six heirs to the Estate, including the Charles L.
Tabas Foundation.
services either brother might render.               See Appendix ("App.") at

62 (Partnership Agreement ¶ 3).            The partnership agreement also

provided that:

        It is the intent of the parties that the survivor of
        them shall be free to exercise his judgment for the
        joint benefit of ownership . . . provided always, that
        the responsibility and obligation of the survivor to
        the estate of the deceased shall be that required of a
        fiduciary.


App. at 62 (Partnership Agreement ¶ 4(b)).

            In 1983, Charles Tabas died.               Soon after Charles's

death, John Van Der Wal, a financial advisor to Daniel and to

Tabas Enterprises, was asked by Daniel to recommend a reasonable

financial     arrangement      between    Daniel     and    Charles's      widow,

Harriette.       In response, Van Der Wal sent a letter to Harriette

in which he recommended that Daniel receive a $180,000 annual

management fee from Tabas Enterprises, prior to profit sharing by

the partners.      Van Der Wal further recommended that Harriette and

Daniel    each   receive   a   $10,000    monthly    draw   check   from    Tabas

Enterprises.2

            Beginning in March 1983, monthly distribution checks of

$10,000 were drawn on a Tabas Enterprises account and sent to

Harriette    through   the     United    States   mail.     Daniel   was     also

provided with a $10,000 monthly draw.               In addition, from March

    2
     Prior to Charles's death, each brother received a monthly
disbursement of $10,000 from Tabas Enterprises. In addition, the
brothers appeared to have an arrangement under which Tabas
Enterprises paid for many personal and business expenses.
1983       to   September      1986,   Tabas      Enterprises     paid     for   various

personal expenses incurred by Harriette and Daniel.

                 In    September   1986,    Tabas      Enterprises     stopped    paying

Harriette's           personal   expenses    and       also   eliminated    Harriette's

$10,000 monthly draw.              Instead, Tabas Enterprises began paying a

$15,000 monthly draw to the Estate.                     At the same time, Daniel's

monthly         draw    was    increased    to    $15,000.        Tabas     Enterprises

continued to pay Daniel management fees and to cover his personal

expenses.3

                Shortly       thereafter,   the    Estate      brought    suit   against

Daniel and others in the Montgomery County, Pennsylvania, Court

of Common Pleas.              The complaint alleged, inter alia, that the

Estate was not being allocated an equal share of the partnership

income, that Daniel used Tabas Enterprises funds for personal

purposes,         that    Daniel    misled       the    Estate    by     directing   the

preparation of false and misleading financial statements, and

that Daniel had breached his fiduciary duties to the Estate.

       3
     The parties dispute whether plaintiffs were aware that
Daniel   was  receiving   substantial  compensation   from  Tabas
Enterprises in addition to his monthly draw check.     Defendants
argue that, soon after Charles's death, plaintiffs knew of
Daniel's compensation and therefore could not have been deceived
by the monthly checks which served as the basis of the mail fraud
predicate acts. Plaintiffs acknowledge that they believed Daniel
was taking more than he was entitled to under the partnership
agreement; this was partly the basis for the 1986 state suit.
They contend, however, that they did not know the extent to which
they were being short-changed until Price Waterhouse was given
access to Tabas Enterprises' records.    Consequently, plaintiffs
assert that they initiated this suit as soon as they discovered
the extent of the alleged fraudulent activity.
             On November 20, 1987, the parties settled the state

suit and agreed that the assets of Tabas Enterprises would be

sold.     The settlement agreement established a schedule and method

for liquidating the majority of the jointly held properties.4               In

conjunction    with   the    liquidation   of     the    joint   assets,   the

settlement agreement provided that "the Estate shall be given

complete     access   to    all    properties,    books    and   records    in

connection therewith[.]"          App. at 67 (Settlement Agreement at ¶

4(a)(i)).       The   settlement      agreement    did    not    address   the

distribution of income earned after November 20, 1987, but did

provide that:

        To the extent that the Partnership Agreement dated
        March 12, 1964 is not inconsistent with the provisions
        of   this  [Settlement]   Agreement,  the   Partnership
        Agreement shall continue in full force and effect until
        the liquidation and auction [of Tabas Enterprises'
        assets] are completed.


App. at 70 (Settlement Agreement ¶ 13).           Another provision of the

settlement agreement provided that the parties would agree to

execute a mutual general release:

    4
     The settlement agreement also provided that Daniel would
purchase the Estate's interest in Acorn Iron and Supply Company
and $1.5 million in Royal Bank stock. In addition, the Estate's
interest in property on City Line Avenue was transferred to
Daniel, apparently in exchange for monies from Tabas Enterprises.
Defendants, pointing to the $16.9 million that the Estate has
received pursuant to the settlement agreement and liquidation of
Tabas Enterprises, assert that plaintiffs have been treated
equally.   While plaintiffs do not appear to dispute the amount
the Estate has received, they do assert that it has not received
an equal one-half of the income as required under the partnership
agreement.
        requiring the dismissal with prejudice of all parties
        in all litigation between or among Daniel, on the one
        hand, and the Estate or any of its executors, on the
        other hand, and excluding only the terms and conditions
        contained herein.


App. at 69 (Settlement Agreement ¶ 9).

             Lastly, the Honorable William H. Yohn, Jr.,5 was named

to act as the arbitrator of any future disputes arising from the

implementation of the settlement agreement that could not be

resolved by the parties' legal representatives.            The settlement

agreement specifically provided that Judge Yohn's decisions on

such matters "shall be final, binding, and non-appealable."              App.

at 70 (Settlement Agreement ¶ 12).

            On May 15, 1990, Daniel and the Estate executed the

mutual    general   release,   which   provided   that,   except   for    the

obligations of the parties under the settlement agreement, the

parties would release and forever discharge one another from:

        any and all actions, causes of action, demands,
        judgments, contracts, debts, dues, accounts, bonds,
        covenants, contracts, suits, claims, and demands of any
        nature whatsoever, whether in law, equity, arbitration
        or otherwise, whether know [sic] or unknown at the
        present time, which [either party] ever had, now has,
        hereinafter can, shall or may have, by reason of any
        matter, cause or thing whatsoever, from the beginning
        of the world to November 20, 1987.


App. at 293 (emphasis added).


    5
     At that time, Judge Yohn sat on the Pennsylvania Court of
Common Pleas. He is now a United States District Judge for the
Eastern District of Pennsylvania.
               Despite the settlement agreement, plaintiffs remained

dissatisfied          with    Daniel's      compliance      with    the     partnership

agreement.           On July 25, 1990, Judge Yohn held a hearing to

consider whether the settlement agreement barred the Estate from

asserting claims for breach of the partnership agreement stemming

from       Daniel's    management      of   Tabas     Enterprises       subsequent        to

November       20,    1987.      Finding       that    "[t]he      provision       of    the

partnership agreement of March 12, 1964 concerning distribution

of   income      is    not    inconsistent      with     the     provisions        of    the

settlement agreement . . . as the settlement agreement contains

no     provisions       concerning       the   distribution        of     income     after

November 20, 1987," Judge Yohn held that the Estate could "pursue

any claims" against Daniel arising from the distribution of Tabas

Enterprises'         income    after     November     20,   1987.       App.    at      1187

(Arbitration Award No. 8).6

               Following      this     decision,      Daniel's     counsel     requested

that Judge Yohn mediate the issues raised by plaintiffs' proposed

RICO complaint.          Judge Yohn held two conferences with counsel to

discuss, among other topics, the proposed RICO claims.                             During

oral argument on February 1, 1991, Daniel's counsel asserted

that, because plaintiffs' proposed RICO complaint sought damages


       6
     These rulings were premised upon Judge Yohn's finding that:
"By agreement of the parties and with the concurrence of the
arbitrator, the arbitrator has jurisdiction to rule upon the
issue of whether the Estate may make claims against Daniel M.
Tabas concerning his management of Tabas Enterprises subsequent
to November 20, 1987." App. at 1185.
against defendants not named in the settlement agreement, the

proposed RICO complaint was outside the scope of arbitration and

therefore could not be decided by Judge Yohn in his role as

arbitrator.            Nevertheless, Daniel's counsel expressed interest in

having Judge Yohn serve as a mediator in an attempt to resolve

the claims set forth in the proposed RICO complaint.

                 On     February    20,     1991,        Judge    Yohn    formally      denied

Daniel's request to mediate the dispute.                              Instead, Judge Yohn

ordered         that:      "By     agreement        of   the     parties,     and   with   the

concurrence of the undersigned, the proposed 'RICO Complaint' may

be filed in the United States District Court for the Eastern

District of Pennsylvania and the issues raised therein will not

be the subject of this procedure under the [Settlement] Agreement

of November 20, 1987."              App. at 1282 (Arbitration Award No. 10).

                 Soon thereafter, plaintiffs brought the instant action,

alleging violations of RICO §§ 1962(a), (b), (c), and (d), as

well       as    several    state     law      claims      stemming      from   defendants'

handling         and    distribution      of    Tabas      Enterprises        assets.      The

initial         complaint    was    filed      on    March       4,   1991.     The   amended

complaint was filed on May 20, 1991.7

       7
     On May 29, 1991, the district court entered a scheduling
order.   This schedule provided, inter alia, that discovery be
completed by December 2, 1991. The schedule also provided that
defendants' motion for summary judgment had to be filed on or
before October 21, 1991, and that plaintiffs' response was due by
November 4, 1991. Because this schedule required plaintiffs to
respond prior to the completion of discovery, and because the
parties had further disagreements about discovery, the factual
record is not fully developed.       Nonetheless, the record is
            Plaintiffs have appealed the district court's grant of

defendants'      motion     for   summary    judgment.          On   appeal,    we are

required to base our review of the district court's decision on

the evidence of record.               Accordingly, before we turn to the

merits of the parties' assertions, we will summarize the record

submitted to this court.

            Most significantly, the record contains two financial

reports     by     Price     Waterhouse,     analyzing          Tabas   Enterprises'

financial and operational records.              Plaintiffs' counsel retained

Price Waterhouse to determine whether these records reflected the

equal distribution of income to the Estate as required under ¶ 3

of the partnership agreement.

            The     first     Price    Waterhouse         report     analyzed    Tabas

Enterprises' financial records dating from Charles's death in

1983 through early 1990, focusing on the period after November

20, 1987.        Then, in late 1991, after the amended complaint was

filed,     Price     Waterhouse       completed       a    supplemental         report,

analyzing Tabas Enterprises' records from October 1989 through

July 1991.        In total, the Price Waterhouse reports documented

more than three and one-half years of activity subsequent to the

November    1987    settlement       agreement.       In    both     reports,    Price

Waterhouse       concluded    that    "the    books       and    records   of    Tabas




sufficient to support our conclusion that the requisites for RICO
continuity have been met.
Enterprises do not reflect the equal distribution of income," and

that "indications of fraud exist."8                    App. at 352, 460-61.

                The    Price    Waterhouse       reports     revealed      a    continuing

series of transactions to divert Tabas Enterprises' income for

the        personal    use    of    Daniel     and    his   family,    through      direct

monetary benefits as well as other types of benefits.                               In its

first        report,     for       instance,     Price      Waterhouse         itemized    a

substantial number of items, purchased with Tabas Enterprises'

income,        for    which     there    was     no     adequate    documentation         or

explanation          substantiating      an    ordinary     and    necessary      business

purpose for the expense.                The report noted that, to the extent

that        Daniel    purchased       these    items     using     Tabas   Enterprises'

income, such expenses "would inappropriately reduce the Estate's

interest in Tabas Enterprises by reducing income available for

distribution to the Estate."                   App. at 354.          According to the

Price        Waterhouse       report,    these        purchases    included       personal

apparel, homeowner's dues for Daniel's vacation home in Vermont,

meals and other purchases in cities where Daniel had vacation

homes,       meals     and    other     purchases      in   ten    foreign      countries,

       8
     Price Waterhouse noted that its formal "opinion" was subject
to scope limitations as discussed within each report. Our review
of these limitations indicates that most were caused by Tabas
Enterprises' failure to cooperate with the Price Waterhouse
auditors.     In addition, Price Waterhouse described Tabas
Enterprises' major records depository as in a "state of
disarray."    In considering these reports, we will weigh the
effect of the scope limitations in light of our conclusion that
most limitations to the analysis were a result of Tabas
Enterprises' efforts to hinder the Price Waterhouse audits.
prescription medicine, and a pool heater installed at Daniel's

home in Pennsylvania.               The total cost of these and other similar

expenses was approximated at $140,000.

               Other problem areas cited in the first report were

Tabas Enterprises' payment of $67,000 in compensation for the

provision of home services, such as maid, gardening, and handyman

services,       for    Daniel       and   his    family;      the    assignment       of    24

automobiles owned by Tabas Enterprises to Daniel and his family,

including       family        members     who     were      not     employed    by    Tabas

Enterprises;          Tabas     Enterprises'          payment       of   the   automobile

insurance, repairs and maintenance, gasoline,9 car phones, auto

club membership, registration fees, tags, and title fees for all

24    cars;    Tabas     Enterprises'         payment       of    telephone    bills       for

Daniel's primary and vacation residences; and Tabas Enterprises'

payment       of   insurance          coverage        for   non-partnership          assets,

including Daniel's six antique automobiles.

               Price Waterhouse's second report noted that, between

the       completion    of    the     first     and    second     reports,     Daniel      had

reimbursed Tabas Enterprises for only a small portion of these

expenses.10        The       second    report     also      noted    that   many     of    the

      9
     The report found these gasoline charges, in excess of
$18,000, especially problematic, since the relevant documents
revealed   routine   submissions   of   multiple requests for
reimbursement arising from a single receipt.
      10
     In his deposition, Daniel testified that all unreimbursed
expenses represented legitimate business expenses. For most of
these expenses, however, Daniel could not provide any specific
recollection of the business purpose involved.
questionable expenses detailed in the first report continued to

occur.     For instance, the second report identified an additional

$78,000    in     payments    for    personal   services    and     an    additional

$35,000 in phone bills for Daniel's private residences and mobile

telephones.        The second report also noted that Daniel and his

family continued to charge personal items to Tabas Enterprises,

including personal apparel, homeowner's dues for his vacation

home in Vermont, and meals.

            In addition to investigating nonmonetary benefits, the

Price    Waterhouse        reports    also   examined     the   direct      monetary

benefits        received     by     Daniel   and   his     family        from   Tabas

Enterprises.        The reports found that between November 1987 and

November 1989, Daniel received $1,502,000 in salary partnership

distributions, management fees and incentives, gratuities, and

bonuses from Tabas Enterprises, and that for the period between

November 1989 and June 1991, he received $1,166,000.                     The reports

also found that, during this period, in which Daniel was paid a

total      of     $2,668,000,        the     Estate      received        partnership

distributions totalling $660,000.11

            According to the Price Waterhouse reports, the monetary

payments to Daniel's family during this time also eclipsed those

    11
     Price Waterhouse also noted that, in addition to his Tabas
Enterprises income, Daniel received compensation as Chairman of
the Board of Royal Bank.    At his deposition, Daniel testified
that he worked 60-70 hours per week for Tabas Enterprises, app.
at 1683, and that his Royal Bank time commitment consisted of
Thursday morning executive staff meetings and a board meeting one
evening each month. App. at 614.
received by the Estate.                   The reports documented that between

November 1987 and June 1991, Daniel's family, including his six

children    and    one       son-in-law,         received      $1,363,000        from     Tabas

Enterprises       in     the      form    of      salaries,         management    fees     and

incentives,       gratuities,         bonuses,         and    consulting        fees.       The

amended complaint alleges that payments to Daniel's children and

son-in-law "do not constitute reasonable salaries for work which

they actually performed and that some of those children and/or

their spouses were 'phantom' or 'ghost' employees who performed

little or no work at all."                    App. at 21 (Amended Complaint ("AC")

¶ 25).

            The first Price Waterhouse report also noted that, in

addition    to     receiving          compensation           from     Tabas     Enterprises,

certain members of Daniel's family also worked for and received

compensation from Royal Bank.                   For instance, Lee Tabas served as

President of Royal Bank, Robert Tabas served as Vice President,

and Susan Tabas Tepper served as Director of Marketing.

            Finally, in addition to the above findings, both Price

Waterhouse reports noted that "the Estate may also have been

subjected     to       the     risk      of     additional      taxes,        interest,     and

penalties" due to apparent Internal Revenue Service reporting

violations by Tabas Enterprises.                     App. at 362, 467.

                                                B.

            Count       I    of   the     amended      complaint       alleges     that,     in

violation of 18 U.S.C. § 1962(a), (b), and (c), the defendants
conspired to defraud the Estate of its equal share of Tabas

Enterprises'        income,     to    which   it     was    entitled     under     the

partnership agreement, through a pattern of racketeering activity

including        mail   fraud   in    violation      of    18   U.S.C.   §   1341.12

Specifically,       plaintiffs       allege   that    defendants       conducted    a

scheme      to    defraud     the    Estate   of   its     equal   share     of   the

partnership's income by wrongfully diverting Tabas Enterprises

funds to pay for the personal expenses of Daniel and his family

and by understating the Estate's share of the income.                    Plaintiffs

assert that, from the time of Charles's death through the period

in which the amended complaint was filed, Daniel "continuously

made false representations to the Estate by mail and fraudulently

distributed millions of dollars of Tabas Enterprises' funds to

himself and to members of his family in a scheme to defraud the

Estate of income to which it was entitled."                     App. at 20 (AC ¶

24).

             Plaintiffs specifically allege that Daniel, Campbell,

and McSwiggan committed forty-one acts of mail fraud between

December 1987 and February 1991 for "the purpose of executing the
       12
     Count II of the amended complaint alleges that defendants
violated § 1962(d) by conspiring to violate subsections (a), (b),
and (c).
           Counts III-VI of the amended complaint allege state law
claims that are not central to this appeal, including breach of
fiduciary duty, breach of contract, fraud, and conversion. The
district court dismissed these state law claims without
prejudice.    Because we find that the district court erred in
dismissing Counts I and II, we will instruct the district court
to vacate the dismissal of plaintiffs' supplemental state law
claims.
scheme to defraud the Estate of its equal share of income."             App.

at     43   (AC   ¶   49).13    Thirty-nine   of   these    forty-one   acts

represented monthly disbursements of $15,000 from Tabas Brothers

(a holding of Tabas Enterprises) to the Estate.               The remaining

two acts involve the mailing of various IRS forms from Tabas

Enterprises to the Estate reflecting income earned and business

expenses      incurred     by   certain   Tabas    Enterprises    entities.

Plaintiffs contend that the mailing of the monthly checks by

defendants "constituted an intentional misrepresentation" that

one-half of the income of Tabas Enterprises was being paid to the

Estate pursuant to the partnership agreement.              App. at 46 (AC ¶

50).

             Finding that the dispute did not present a sufficient

threat to satisfy RICO's "continuity" requirement, the district

court granted defendants' summary judgment motion.             The district

court reasoned that:

          Plaintiffs' claims essentially allege one fraudulent
        scheme   perpetrated  against   one   victim  by   one
        perpetrator. The gist of plaintiffs' complaint is that
        Daniel Tabas has failed to abide by the partnership
        agreement made with his brother, Charles, and that
        Daniel has employed various methods of trickery to

       13
     Plaintiffs also allege as predicate acts defendants' use of
the United States mails to send checks to Daniel's children and
son-in-law for work not performed.     We do not rely on these
allegations, however, because plaintiffs have not produced any
evidence to counter McSwiggan's deposition testimony that these
checks were delivered by courier. See, e.g., Utz v. Correa, 631
F.Supp. 592, 596 (S.D.N.Y., 1986) (delivery of letter by
messenger did not violate the mail fraud statute since the United
States mails were not used).
     cheat Charles's heirs of their fifty percent share of
     the business that Charles and Daniel built. The sole
     victim of this scheme is Charles Tabas's estate. The
     sole perpetrator is Daniel Tabas or individuals under
     his control.   No one else is affected.   There is no
     threat to the community at large. This is not a case
     where the predicate acts are "part of an entity's
     regular way of doing business," such as would affect
     others doing business with the entity.

       The partnership between Charles and Daniel is
     currently in the process of liquidation.    All of the
     fraudulent activity alleged in this suit will cease
     once the liquidation process is complete.     Given the
     Court of Appeals' admonition that "[i]t remains an open
     question whether RICO liability is ever appropriate for
     a single-scheme, single-victim conduct threatening no
     future harm," we simply do not find that the
     defendants' alleged conduct in this case "pose[s] a
     societal threat worthy of the draconian penalties and
     remedies available under RICO."


District   Court   opinion   at    8-10;   App.   at    1376-78   (citations

omitted) (footnotes omitted).        Plaintiffs filed a timely notice

of appeal of the district court's grant of summary judgment to

defendants.     Defendants also filed an appeal, seeking review of

the district court's decision to dismiss the state claims without

prejudice.     Following the filing of the panel's decision, we
granted appellants' petition for rehearing in banc and vacated
the panel opinion.

                                    II.

           The district court had subject matter jurisdiction over

this civil action pursuant to 28 U.S.C. §§ 1331 and 1367.               The

district     court's   federal    question   jurisdiction      was   invoked

because Counts I and II of the amended complaint raise claims

under RICO, 18 U.S.C. §§ 1961 and 1962.                The district court's
supplemental jurisdiction was invoked because Counts III through

VI of the amended complaint raise claims that are so related to

the claims in Count I and II that they form part of the same case

or    controversy   under     Article      III   of   the    United      States

Constitution.    The district court's supplemental jurisdiction

was    invoked   because    Counts   III    through   VI    of   the    amended

complaint raise claims that are so related to the claims in Count

I and II that they form part of the same case or controversy

under Article III of the United States Constitution.                   Under 28

U.S.C. § 1291, this Court has appellate jurisdiction over the

final orders of the district court.14

           This Court has plenary review over the district court's

grant of summary judgment.           See Northern Ins. Co. v. Aardvark

Assocs., 942 F.2d 189, 194 n.5 (3d Cir. 1991).              On review of the

district court's order for summary judgment, "we 'apply the same

test the district court should have utilized initially.'"                  Erie

Telecommunications v. Erie, 853 F.2d 1084, 1093 (3d Cir. 1988)

(citation omitted).        "In reviewing a grant of summary judgment,

we must be convinced 'that the prevailing party has successfully

demonstrated that there is no genuine issue as to any material

fact and that the moving party is entitled to judgment as a


      14
     The district court's first order, dated May 26, 1993,
granted defendants' motion for summary judgment on Counts I and
II, and dismissed Counts III, IV, and V pursuant to 28 U.S.C. §
1367(c)(3).   The district court's second order, dated June 2,
1993, amended the first order to include dismissal of Count VI
pursuant to § 1367(c)(3).
matter of law.'"         Id. (citing Anderson v. Liberty Lobby, Inc.,

477 U.S. 242, 250 (1986); Celotex Corp. v. Catrett, 477 U.S. 317,

322 (1986)).

            In determining whether summary judgment is appropriate,

"[t]he evidence of the non-movant is to be believed, and all

justifiable inferences are to be drawn in his favor."                   Anderson,

477 U.S. at 255.      The inquiry is "whether the evidence presents a

sufficient disagreement to require submission to the jury or

whether it is so one-sided that one party must prevail as a

matter of law."      Id. at 251-52.

                                      III.

            The    first    issue    we     must     address    is     defendants'

contention that this lawsuit is precluded by the 1987 settlement

agreement   and    the     1990   mutual    release.        This     question   was

considered by the panel only.            We find defendants' argument to be

without merit.

            First,   binding      arbitration      by   Judge   Yohn    holds   the

present claims viable.            The settlement agreement provides for

final, binding arbitration of any dispute "as to the provisions

of this Agreement or as to the implementation or operation of the

provisions of this Agreement" between Daniel and the Estate.

App. at 70 (Settlement Agreement ¶ 12).                     The very issue of

whether   claims     such    as   this     lawsuit      could   be   brought    was

submitted to Judge Yohn, the arbitrator, who determined initially

that "the arbitrator has jurisdiction to rule upon the issue of
whether   the    Estate    may    make   claims    against     Daniel    M.   Tabas

concerning     his    management    of   Tabas    Enterprises    subsequent     to

November 20, 1987."        App. at 1185 (Arbitration Award No. 8).              On

the merits, Judge Yohn held that the Estate could pursue any

claims which it might have against Daniel "for an alleged breach

of his fiduciary duty [to the Estate] after November 20, 1987,"

and    "for    the    unequal    distribution     of   the    income    of    Tabas

Enterprises subsequent to November 20, 1987."                Id. at 1187.

              Under the settlement agreement, Judge Yohn's decision

is "final, binding, and non-appealable," app. at 70 (Settlement

Agreement ¶ 12), and we must adhere to it under federal and

Pennsylvania law.        See Apex Fountain Sales v. Kleinfeld, 818 F.2d

1089, 1094-95 & n.4 (3d Cir. 1987) (an arbitrator's decision is

binding under federal law unless "an arbitrator 'manifests an

infidelity'" to her obligation to interpret the agreement at

issue, or there is "corruption, fraud or partiality," or a party

was denied a "fundamentally fair hearing") (citations omitted);

International Brotherhood of Firemen & Oilers v. School Dist.,

350 A.2d 804, 808 (Pa. 1976) (an arbitrator's decision shall not

be set aside "unless it is alleged and proven by clear, precise

and convincing evidence that the parties were denied a hearing or

that   there    was    fraud,    misconduct,      corruption    or     some   other

irregularity of this nature on the part of the Arbitrator which

caused him to render an unjust, inequitable or unconscionable

finding").      Defendants have not alleged any action on the part of
Judge Yohn amounting to corruption, fraud, or partiality.                                    In

addition, defendants have presented no evidence that Judge Yohn

failed to provide a hearing to consider each party's views prior

to his decision.              In fact, the record clearly indicates that

Judge    Yohn    held    a     hearing     on    this     question       and    considered

numerous    exchanges         of    correspondence         before       ruling    on    this

matter.

            Second, even if we were to make our own evaluation of

whether    the    1987    settlement           agreement    and     the    1990    release

precluded    this      lawsuit,      we   would    conclude       that     it    does   not.

Defendants' reliance on Main Line Theatres, Inc. v. Paramount

Film Distrib. Corp., 298 F.2d 801 (3d Cir.), cert. denied, 370

U.S. 939 (1962), is misplaced.                  Defendants assert that Main Line

stands    for    the    proposition        that    where     "the       initial    lawsuit

contained    prayers      for       injunctive     relief,       the    execution       of   a

general release releases and extinguishes complaints for future

conduct."        Defendants-appellees'            Brief     at    21.      Consequently,

defendants contend, plaintiffs' suit is barred by the settlement

agreement and the mutual release signed by the Estate and Daniel.

            In Main Line, plaintiffs demanded injunctive relief and
treble     damages       in     a    civil      antitrust        suit     stemming      from

Paramount's distribution of motion pictures.                       The district court

dismissed the suit, holding that the case had been settled during

pre-trial       negotiations         by   an     "oral     agreement"       between      the

parties.     The oral agreement provided that Main Line would drop
its suit in exchange for $10,000.               Main Line refused to comply

with   the   oral       agreement,   however,   complaining    that    Paramount

attempted     to    add     language    to   the   agreement    when    it   was

memorialized       in    writing.      Specifically,   Main    Line     rejected

language that required it to acknowledge that the complained of

distribution procedures were reasonable.

             Main Line appealed the dismissal to this court.                  We

then considered whether the initial oral agreement included a

release to the effect that Paramount could continue to distribute

films in the same manner it had prior to Main Line's suit for

injunctive relief.         We noted:

       Had this been an action for damages only, without a
       prayer   that   the   defendants   be  restrained  from
       continuing or repeating the licensing practices of
       which the plaintiff complained, the essential feature
       of any understanding to settle the suit for a stated
       sum would have been the plaintiffs' promise to forego a
       money claim, the only matter in controversy. Here, the
       suit contained a demand for injunctive prohibition of
       future wrongful conduct as well as a claim for money
       damages for alleged past misconduct.           In such
       circumstances a reasonable person agreeing, without any
       expression of limitation, to accept a sum in settlement
       of   the   litigation   should   and  reasonably  would
       understand that both aspects of the suit were covered
       by the settlement.


298 F.2d at 803 (emphasis added).

             In Main Line, plaintiffs could point to no limitations,
expressed or implied, in their oral agreement with defendants.

Accordingly, their settlement agreement covered their prayers for

both injunctive relief and money damages.              In the present case,
however,     the   mutual    release      signed   by    plaintiffs    and     Daniel

expressly limits the applicability of the release to any claims

arising "from the beginning of the world to November 20, 1987."

App. at 294.       This express limitation distinguishes the instant

case from the facts presented in Main Line.

             Defendants     also    draw    the    Court's   attention         to   our

statement in Main Line that "[c]ertainly, a defendant offering a

sum in settlement of a suit asking, among other things, for an

injunction against similar conduct, would not understand that a

similar demand could be asserted the day after settlement."                         298

F.2d at 803 (emphasis added).                The Estate's state suit here,

however, although denominated a "Complaint in Equity," did not

seek broad injunctive relief.             The holding in Main Line relies on

the   fact    that   the    plaintiff       specifically     sought       to   enjoin

Paramount from distributing motion pictures using methods that

plaintiff alleged violated the civil antitrust laws.                           In the

instant case, the plaintiffs' state suit asked that Daniel be

removed    from    any   position    at    Tabas   Enterprises      and    that its

businesses and properties be liquidated.                Rather than controlling

future conduct, the state suit primarily sought a dissolution of

Tabas   Enterprises        and   redress     for   the    alleged     past     wrongs

committed against the Estate's interest in the partnership.                          It

follows, therefore, that the subsequent federal action did not

constitute an effort to enjoin conduct that the settlement of the

first suit had resolved.            This determination, together with our
earlier finding that the settlement agreement bars only claims

existing up to November 20, 1987, would lead us to conclude that

defendants' reliance upon Main Line is misplaced.

                                          IV.

             Having found that plaintiffs' lawsuit is not precluded

by the 1987 settlement agreement and the 1990 mutual release, we

now turn to the district court's decision that plaintiffs failed

to allege a course of conduct sufficient to establish a RICO

"pattern of racketeering conduct" because plaintiffs failed to

satisfy RICO's "continuity" requirement.

             The RICO statute provides for civil damages for "any

person    injured   in    his     business      or    property       by       reason    of    a

violation of [18 U.S.C. § 1962]."               18 U.S.C. § 1964(c).              A common

thread running throughout § 1962 is that an injured party must

demonstrate    that    the      defendant    was     engaged     in       a   "pattern       of

racketeering activity."             Section 1962(a) prohibits "any person

who has received any income derived . . . from a pattern of

racketeering      activity"      from     using      that    money    to       acquire       or

operate any enterprise engaged in interstate commerce.                             Section

1962(b)    prohibits      any    person     from     acquiring,       maintaining            an

interest    in,   or     controlling      any     such      enterprise         "through       a

pattern of racketeering activity."                Section 1962(c) prohibits any

person employed by or associated with an enterprise engaged in

interstate    commerce       from    conducting       or     participating         in    the

affairs of the enterprise through "a pattern of racketeering
activity."        Finally, section 1962(d) prohibits any person from

conspiring to violate subsections (a), (b), or (c).

           Central to the dispute in this case is the question

whether defendants participated in "a pattern of racketeering

activity."        The RICO statute defines a "pattern" of racketeering

activity     as     requiring   "at    least       two   acts    of     racketeering

activity" within a ten year period.                 18 U.S.C. § 1961(5).        The

statute      also     enumerates       the     offenses         which     constitute

"racketeering activity," including crimes that have traditionally

been associated with the transgressions of racketeers:                      murder,

kidnapping, gambling, arson, robbery, bribery, extortion, dealing

in obscene matter, and dealing in narcotic or other dangerous

drugs.     18 U.S.C. § 1961(1).              The statutory enumeration is,

however,   expansive      and   goes    on    to    include      specific    federal

offenses which, although they may often be committed by those

whom we would categorize as "racketeers," also fall into the

category of common law or "garden variety" fraud and which would,

in the past, have been the subject of commercial litigation under

state law.        Among these broadly delineated federal offenses are

mail fraud and wire fraud.15            These offenses are the ones that
    15
     Mail fraud, 18 U.S.C. § 1341, is the racketeering activity
involved in the case before us.        Section 1341 provides in
pertinent part:
          Whoever, having devised . . . any scheme or
          artifice to defraud, or for obtaining money
          or property by means of false or fraudulent
          pretenses, representations, or promises, . .
          . for the purpose of executing such scheme or
          artifice . . . places in any post office or
          authorized depository for mail matter, any
many consider to be the most troublesome as RICO predicate acts.

          The inclusion within the scope of civil RICO of these

types of fraud, more prevalent in the commercial world than in

the world of racketeers, has caused concern that RICO sweeps too

broad a swathe.   See, e.g., Note, Civil RICO:   The Temptation and

Impropriety of Judicial Restriction, 95 Harv. L. Rev. 1101, 1105

(1982) ("Given the prevalence of mail and wire use in commercial

transactions, RICO's provision for a private cause of action

predicated on violations of the mail and wire fraud statutes

virtually federalizes common law fraud").


          matter or thing whatever to be sent or
          delivered by the Postal Service, . . . shall
          be fined not more than $1,000 or imprisoned
          not more than five years, or both.

          The federal offense of mail fraud was originally
enacted by Congress in 1872 as a part of the recodification of
the postal laws.    The Supreme Court in its first review of the
mail fraud statute made clear that its scope was broad.       The
Court held that the statute reached beyond the common law
definition of "false pretences" to encompass "everything designed
to defraud by representations as to the past or present, or
suggestions and promises as to the future."     Durland v. United
States, 161 U.S. 306, 313 (1896).    Fraud, involving the use of
the postal system to carry it out, was made a federal offense by
Congress with the "purpose of protecting the public against all
such intentional efforts to despoil, and to prevent the post
office from being used to carry them into effect . . .." Id. at
314.
          Judge Greenberg, in his dissent, queries whether
Congress   intended   RICO   to  be   applied  to   a  defendant,
participating in a scheme to defraud, who mails substantial
payments but not to a similar defendant who delivers the payments
by hand.    See [typescript at 14].     The clear answer to this
question is "yes" because, first, the former example constitutes
mail fraud and the latter does not and, second, Congress has
chosen to include mail fraud as a RICO predicate act.
               If we examine the language of the statute itself, in an

attempt to discern the scope of civil RICO, we find ourselves

lost in a land with few signposts.                          Section 1961(5) defines

"pattern"       as       requiring    "at    least    two     acts    of    racketeering

activity."        The breadth of the predicate acts, described in §

1961(1), combined with § 1961(5)'s loose definition of pattern,

has led many courts to recoil from the inclusion within RICO of

offenses which were not considered to be the crimes of gangsters.

Such court-imposed limitations on the scope of civil RICO were

first reviewed by the Supreme Court in Sedima, S.P.R.L. v. Imrex

Co., 473 U.S. 479 (1985).               In Sedima, the Supreme Court set out

an expansive definition of the concept of "pattern" in civil

RICO.

               Sedima      arose     from    an    action    filed    in    the    Eastern

District of New York by a Belgian corporation, based on § 1964(c)

and (d) and predicate acts of mail fraud and wire fraud, charging

that Imrex, Sedima's partner in a joint venture, had presented

inflated bills and had cheated Sedima out of a portion of its

proceeds by collecting for nonexistent expenses.                            The district

court dismissed the RICO counts for failure to state a claim,

holding that a RICO-type injury must be based on allegations of

some    sort     of      distinct    "racketeering       injury"      or    "competitive

injury."        574       F.Supp.    963,    965    (1983).       The      dismissal      was

affirmed    by       a    divided    panel   of    the   Second      Circuit      Court    of

Appeals.       741 F.2d 482 (1984).               The court of appeals clarified
the type of injury which it required to be alleged, finding that

"it is better to identify the RICO standing requirement as a

'racketeering   injury'   requirement    rather     than   a   'competitive

injury' requirement . . .."     Id. at 496.         The court of appeals

further required that, before a private civil RICO action could

be brought, the plaintiff must show that the defendants had been

criminally convicted of the predicate acts.            Id. at 503.      The

Supreme Court rejected both of these holdings.

          Justice   White,   writing    for   the   majority    in   Sedima,

stated "we can find no support in the statute's history, its

language, or considerations of policy for a requirement that a

private treble-damages action under § 1964(c) can proceed only

against a defendant who has already been criminally convicted."

473 U.S. at 493.      Concerning the requirement of racketeering

injury, Justice White stated that
          [W]e   perceive   no  distinct  "racketeering
          injury"     requirement.        Given    that
          "racketeering activity" consists of no more
          and no less than commission of a predicate
          act, § 1961(1), we are initially doubtful
          about a requirement of a "racketeering
          injury" separate from the harm from the
          predicate acts.     A reading of the statute
          belies any such requirement. . . . If the
          defendant    engages    in   a   pattern   of
          racketeering activity in a manner forbidden
          by these provisions [§ 1962(a)-(c)], and the
          racketeering activities injure the plaintiff
          in his business or property, the plaintiff
          has a claim under § 1964(c).      There is no
          room in the statutory language for an
          additional, amorphous "racketeering injury"
          requirement.
Id. at 495.

               Justice White based this less restrictive reading of

the    statute       on    prior    case     law      and   the   general   principles

surrounding the statute:                 "RICO is to be read broadly.         This is

the    lesson    not      only     of    Congress'      self-consciously    expansive

language and overall approach, but also of its express admonition

that    RICO    is    to    'be     liberally      construed      to   effectuate   its

remedial purposes.'"             Id. at 497-98 (citations omitted).

               The Court recognized that this interpretation of the

statute   would       permit       its    use   not    only   against    mobsters   and

organized criminals but also against "respected and legitimate

'enterprises.'"           Id. at 499.       Nevertheless, the Court found that

Congress "wanted to reach both 'legitimate' and 'illegitimate'

enterprises.         "The former enjoy neither an inherent incapacity

for criminal activity nor immunity from its consequences."                          Id.

(citation omitted). The Court concluded:
               It is true that private civil actions
          under the statute are being brought almost
          solely against such defendants, rather than
          against the archetypal, intimidating mobster.
          Yet this defect--if defect it is--is inherent
          in the statute as written, and its correction
          must lie with Congress.    It is not for the
          judiciary to eliminate the private action in
          situations where Congress has provided it
          simply because plaintiffs are not taking
          advantage of it in its more difficult
          applications.


Id. at 499-500 (footnote omitted).
           Justice     White    then   suggested    that   Congress     and    the

courts develop a meaningful concept of "pattern" in order to

narrow the scope of civil RICO:
          The "extraordinary" uses to which civil RICO
          has been put appear to be primarily the
          result of the breadth of the predicate
          offenses, in particular the inclusion of
          wire, mail, and securities fraud, and the
          failure of Congress and the courts to develop
          a meaningful concept of "pattern."


Id. at 500.

           Despite this invitation from the Court, Congress to

date has not chosen to enact legislation which would narrow the

scope of civil RICO or to define more exactly what is "pattern."

Moreover, the efforts of the courts to do so have not been

entirely successful.      Our attempts to design a meaningful concept

of pattern have continued to collide with the broad language of

the   statute.    In    response,      however,    to   Sedima,   the   various

circuits began to structure guidelines for determining whether a

RICO pattern had been established.             In the Third Circuit, for

instance, in Barticheck v. Fidelity Union Bank/First Nat'l State,

832 F.2d 36 (3d Cir. 1987), we rejected the district court's

requirement in that case that there be two or more unlawful

schemes,   and   we    then    set   forth   six   factors   to   be    used   in

determining whether a pattern of racketeering activity has been

established in a given case.           These factors are:     (1) the number

of unlawful acts; (2) the length of time over which the acts were

committed; (3) the similarity of the acts; (4) the number of
victims; (5) the number of perpetrators; and (6) the character of

the unlawful activity.       Id. at 39.

            Other    circuits   established    other   criteria.    In   the

Eighth Circuit, the test for a pattern of racketeering activity

was much more restrictive:       proof of multiple illegal schemes was

required.    See, e.g., Superior Oil Co. v. Fulmer, 785 F.2d 252

(8th Cir. 1986).       Following this precedent, the Eighth Circuit

Court of Appeals affirmed the district's court's dismissal of

petitioners' complaint in H.J. Inc. v. Northwestern Bell Tel.

Co., 829 F.2d 648 (8th Cir. 1987).            The Supreme Court granted

certiorari to resolve the conflict between the circuits over

whether single or multiple schemes were required to demonstrate a

RICO pattern.

            In its opinion in H.J. Inc. v. Northwestern Bell Tel.

Co., 492 U.S. 229 (1989), the Court set out its second analysis

of the requirements of civil RICO.            First, as to single versus

multiple schemes, the Court noted that the word "scheme" is not

found in the RICO statute and indeed that what constitutes a

"scheme" is to be found "in the eye of the beholder, since

whether a scheme exists depends on the level of generality at

which criminal activity is viewed."            492 U.S. at 241 and n.3.

The Court then examined the statute and its legislative history

in   an   attempt     to   determine   the    elements   of   the   pattern

requirement.        From this review, the Court concluded that "to

prove a pattern of racketeering activity a plaintiff must show
that        the    racketeering     predicates      are   related,   and    that    they

amount to or pose a threat of continued criminal activity."                         Id.

at 239.

                   Under the first, or "relatedness," requirement of the

RICO statute, as interpreted in H.J. Inc., predicate acts are

related if they "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 (quoting the partially repealed

Title X of the Organized Crime Control Act of 1970, 18 U.S.C. §

3575, et seq.).16

                  As    for   the   second,    or   "continuity,"    prong     of   the

analysis, the                Court in H.J. Inc. attempted to promulgate a

somewhat flexible approach, based upon a "commonsense, everyday

understanding of RICO's language and Congress' gloss on it."                        Id.

at 241.           With this analytical approach in mind, the Court decided

that "[w]hat a plaintiff or prosecutor must prove is continuity

of racketeering activity, or its threat, simpliciter."                       Id.

                   In   explicating    how     a    plaintiff   could       make    this

continuity showing, the Court described continuity as "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."                        Id.    "It

       16
     The parties do not dispute that the relatedness prong has
been met in the present case.
is, in either case, centrally a temporal concept,"                          id. at 241-

42, so that a party may establish continuity as a closed-ended

concept by "proving a series of related predicates extending over

a substantial period of time."             Id. at 242 (emphasis added).

             Thus,     H.J.    Inc.     makes    clear      that      the    continuity

requirement can be met by establishing long-term criminal conduct

but   does    not      define       what    length    of       time     qualifies     as

"substantial" for this purpose.              The Court in H.J. Inc. also gave

examples of how the threat of continued racketeering activity

might be demonstrated.              One example is that of a hoodlum who

sells "insurance" to storekeepers to prevent the breaking of

their shop windows.           Id.     Another example is that of an ongoing

entity   which   commits        the    predicate     acts      or    offenses   as   its

regular way of doing business.             Id.   In giving this last example,

the Court noted that such a business may be either a criminal or

a legitimate enterprise and concluded:
          The   continuity   requirement   is    likewise
          satisfied   where   it  is   shown   that   the
          predicates are a regular way of conducting
          defendant's ongoing legitimate business (in
          the sense that it is not a business that
          exists   for   criminal   purposes),    or   of
          conducting or participating in an ongoing and
          legitimate RICO "enterprise."


Id. at 243 (footnote omitted).                The clear implication of this

language is that the ambit of RICO may encompass a "legitimate"

businessman      who     regularly         conducts      his        business    through

illegitimate means, that is, who repeatedly defrauds those with

whom he deals and in the process commits predicate acts, for
instance by using the postal service as a means of accomplishing

his scheme.

                 The    Court    went    on    in    H.J.   Inc.,     at    the   urging   of

various amici, to consider, and to reject, a requirement that "a

defendant's racketeering activities form a pattern only if they

are characteristic either of organized crime in the traditional

sense, or of an organized-crime-type perpetrator, that is, of an

association           dedicated    to    the    repeated      commission       of   criminal

offenses."            Id. at 243-44.          The Court found that there was no

textual support in the statute for such a requirement and that

the    statutory         language       did    not    support       the    limitation    that

racketeering acts be the work of an association or group rather

than of an individual.              Id. at 244.

                 These determinations in H.J. Inc., that the predicate

acts       may   be    the   regular     way    in    which     a    legitimate     business

operates and that the racketeering activities may form a pattern

even though they are the acts of an individual rather than of a

group or of an association, enforce the Court's holding in Sedima

that        RICO       reaches     both        "legitimate"         and     "illegitimate"

enterprises.           The Court in H.J. Inc. also rejected the employment
of     a    definitional         device,       such    as   "scheme,"        to     delineate

racketeering activity, when the device employed, like "scheme,"

may be manipulated to satisfy the necessary criterion.                               See id.

at 241 and n.3.
            Whatever view we may have of Congress's original intent

in enacting the RICO statute, we feel constrained, in applying

the statute today, to follow the directives given by the Court in

Sedima and H.J. Inc.

            Since H.J. Inc., this court has faced the question of

continued     racketeering    activity    in    several    cases,      each   time

finding that conduct lasting no more than twelve months did not

meet the standard for closed-ended continuity.                   See Hughes v.

Consol-Pennsylvania Coal Co., 945 F.2d 594, 610-11 (3d Cir. 1991)

(fraudulent    conduct     lasting   twelve     months    does   not   establish

closed-ended continuity); Hindes v. Castle, 937 F.2d 868, 875 (3d

Cir. 1991) (eight month period of predicate acts without a threat

of   future     criminal     conduct     does     not    satisfy       continuity

requirement); Kehr Packages v. Fidelcor, Inc., 926 F.2d 1406,

1413 (3d Cir. 1991) (same); Banks v. Wolk, 918 F.2d 418, 422-23

(3d Cir. 1990) (same); Marshall-Silver Constr. Co. v. Mendel, 894

F.2d 593 (3d Cir. 1990) (seven month single-victim, single-injury

scheme does not satisfy continuity requirement).17               In Hughes, we

     17
     In Marshall-Silver, we considered whether Congress intended
RICO to apply in the situation of an extended scheme which posed
no "significant societal threat" beyond its extended duration.
894 F.2d at 597.    Because the scheme there lasted only seven
months and posed no threat of recurrence, we stated that we would
not resolve the "societal threat" issue.    In view, however, of
the Court's refusal in Sedima and H.J. Inc. to require
racketeering injury, or prior conviction of the predicate acts,
or multiple schemes, or racketeering acts by an association or
group rather than by an individual, we cannot conclude that, in
order to satisfy the RICO continuity requirement, the Court would
require the existence of a "societal threat," whatever exactly
that may be, beyond the commission of the criminal predicate
distinguished   cases   in   other   circuits   in   which   closed-ended

continuity had been established, noting that those cases involved

conduct lasting "years, sometimes over a decade."            Hughes, 945

F.2d at 611.

          In evaluating the present case in accord with this

precedent, we will first consider whether closed-ended continuity

has been established.    At the outset, we note that in civil RICO

complaints based on predicate acts of mail fraud

     the continuity test requires us to look beyond the
     mailings and examine the underlying scheme or artifice.
     Although the mailing is the actual criminal act, the
     instances   of  deceit   constituting  the   underlying
     fraudulent scheme are more relevant to the continuity
     analysis.




acts.   To the extent that Marshall-Silver can be read to hold
otherwise, it is overruled.
Kehr Packages, 926 F.2d at 1414.18   Consequently, in determining


    18
     Defendants' assertion that the mailings involved must
themselves be relied upon by the victim of the fraud in order for
a RICO claim to be established is inaccurate.      As this Court
stated in Kehr Packages, "completely 'innocent' mailings can
satisfy the mailing element." 926 F.2d at 1415 (citing Schmuck
v. United States, 489 U.S. 705, 715 (1989)).     Indeed, mailings
"designed to lull [fraud] victims into a false sense of security,
postpone their ultimate complaint to the authorities, and
therefore make the apprehension of the defendants less likely
than if no mailings had taken place" have been found to
constitute actionable mail fraud.    Kehr Packages, 926 F.2d at
1416 n.3 (quoting United States v. Lebovitz, 669 F.2d 894, 896
(3d Cir.), cert. denied, 456 U.S. 929 (1982)).
          Additionally, the use of the mails need not be an
essential element of the fraudulent scheme. Rather, so long as
the mailings are "incident to an essential part of the scheme,"
Pereira v. United States, 347 U.S. 1, 8 (1954), the mailing
element is satisfied. This principle is elucidated by a review
of the facts in Schmuck v. United States, 489 U.S. 705 (1989).
In that case, Wayne Schmuck was engaged in a fraudulent scheme in
which he would purchase used cars, roll back their odometers, and
sell the cars to retailers for a price higher than their actual
worth. After purchasing an automobile from Schmuck and selling
it to a customer, the dealers, in order to complete the resale of
each automobile, would submit a title application form to the
Wisconsin Department of Transportation.    The mailing of these
forms constituted the mailing element of Schmuck's indictment on
12 counts of mail fraud.     The Supreme Court found that those
mailing were sufficient to sustain Schmuck's indictment on mail
fraud charges, reasoning that

     Schmuck's scheme would have come to an abrupt halt if
     the dealers either had lost faith in Schmuck or had not
     been able to resell the cars obtained from him. These
     resales and Schmuck's relationship with the retail
     dealers naturally depended on the successful passage of
     title among the various parties.    Thus, although the
     registration-form mailings may not have contributed
     directly to the duping of either the retail dealers or
     the customers, they were necessary to the passage of
     title, which in turn was essential to the perpetuation
     of Schmuck's scheme.

Id. at 712.
whether or not continuity has been established in the present

case, we must focus on the duration of the underlying scheme.

Just as the mailings are an element of the federal offense of

mail fraud, so too is the scheme or artifice to defraud.                   See 18

U.S.C.    §    1341,   set   out    in    footnote   15   supra.        Each   time

defendants misrepresented the business nature of an expense, made

a questionable charge, or received compensation to which they

were not entitled, they lessened the income available to the

Estate.       Plaintiffs have provided evidence that these activities,

which implemented defendants' purported scheme to defraud the

Estate, lasted more than three and a half years, from November

10, 1987, to July 1991.            We conclude that a scheme lasting over

three    years    extends    over   a    "substantial"    period   of    time and

therefore constitutes the type of "long-term criminal conduct"

that RICO was enacted to address.             See United States v. Pelullo,

964 F.2d 193, 209 (3d Cir. 1992) (holding that a jury could find

a nineteen month period of racketeering activity sufficient to



          In the instant case, it is clear that the mailings were
incident to an essential part of the scheme. Had the defendants
failed to mail disbursement checks to plaintiffs, plaintiffs
would have immediately been alerted to defendants' alleged
scheme. Consequently, by virtue of the disbursements mailed to
plaintiffs, defendants were allegedly able to delay discovery of
their scheme to misappropriate an excessive share of the
partnership's profits.    The scheme could not have continued
unless the checks were delivered by one means or another.      As
long as the method of delivery was through the United States
Postal Service, defendants' alleged scheme satisfied the elements
of the federal offense of mail fraud.
satisfy continuity requirement); Swistock v. Jones, 884 F.2d 755,

759 (3d Cir. 1989) (fourteen month period of conduct may be

sufficient to establish closed-ended continuity).                 Accordingly,

we find, from the strictly durational aspect of the scheme, that

plaintiffs in the present case have made a sufficient showing to

survive summary judgment on the "continuity" prong of the pattern

analysis.

              The Supreme Court cautions us, however, in H.J. Inc.,

that the existence of continuity may not always be apparent.                   492

U.S. at 243.        For example, the statutory definition of pattern is

"at least two acts of racketeering activity" within a ten year

period.       18 U.S.C. § 1961(5).        It is clear that ten years is a

period of long duration.             Yet, would two related predicate acts,

one committed in February 1982 and one committed in January 1992,

be    sufficient     to   form   a   pattern?      It   would   seem    unlikely.

Indeed, Justice White noted in a footnote that, while § 1961(5)

defines a pattern of racketeering activity as requiring at least

two    acts    of    racketeering      activity,    two   acts    may    not   be

sufficient.      Id. at 496 n.14.

              The question remains, then, what more is required in

order to evaluate whether continuity has been established when

predicate acts have occurred over a period of several years.                   One

helpful consideration can be found in the Court's requirements

for open-ended continuity.             In H.J. Inc. the Court states that
open-ended continuity is established when the commission of the
predicate   acts   is   "a   regular   way   of   conducting   defendant's

ongoing legitimate business."      492 U.S. at 243.      It would seem a

valid analogy that, if the predicate acts have been a regular way

of conducting defendant's legitimate business over a long period

in the past, the RICO pattern has been satisfied.19             In such a

case, the relatedness and the frequency of the predicate acts

would have created the pattern of racketeering activity.              From

our review of the record in the present case, we find that the

allegations made by plaintiffs concerning defendants' manner of

doing business over this period satisfy such a RICO continuity

requirement.20

    19
     In making this analogy, we in no way imply that the
predicate acts must constitute a "regular way" of a defendant's
doing business.   We merely give one example of the manner in
which "pattern" may be demonstrated.
    20
     The district court, in granting summary judgment to
defendants, found that "[t]his is not a case where the predicate
acts are 'part of an entity's regular way of doing business,'
such as would affect others doing business with the entity."
App. at 1377. (citing H.J. Inc., 492 U.S. at 242). See supra at
page     [typescript at 16].
          To the extent that the district court suggests that
effects upon others doing business with the entity are relevant
to a finding of "continuity," we are not certain if the district
court is requiring that those affected be outsiders doing
business with the entity, as opposed to investors or partners in
or beneficiaries of the entity.    If so, we find no support in
H.J. Inc. for such a requirement. The implication of the cited
passage in H.J. Inc. does not limit its holding to require that
the effect be on those who are doing business with the entity.
          If, on the other hand, the district court was making a
finding of fact on the scope of the defendants' regular way of
doing business, i.e., that the alleged scheme to defraud the
Estate and its beneficiaries, through the repeated actions
described by Price Waterhouse, did not constitute defendants'
regular way of doing business, then in view of the facts of
            Moreover,     even    if    we   were   not     to   have   found   that

conduct    lasting    three   and      one-half     years    was   sufficient      to

establish closed-ended continuity, we conclude that continuity

still would have been established for the purposes of summary

judgment in the present case under an "open-ended" continuity

analysis.    Under H.J. Inc., if a RICO action is brought before a

plaintiff    can      establish        long-term     criminal      conduct,      the

"continuity" prong may still be met if a plaintiff can prove a

threat of continued racketeering activity.                Whether the predicate

acts    constitute    a   threat    of    continued       racketeering    activity

depends on "the specific facts of each case," id. at 242, but

H.J. Inc. suggests that open-ended continuity may be satisfied

"where it is shown that the predicates are a regular way of

conducting defendant's ongoing legitimate business . . . or of

conducting or participating in an ongoing and legitimate RICO

'enterprise.'"       Id. at 243.

            Mindful that Kehr Packages instructs us, in determining

continuity, to focus on the mail fraud element of the underlying

fraudulent activity as well as on the element of the mailings, we

are persuaded that the evidence here meets the standard for open-

ended    continuity.       Plaintiffs        have   presented      evidence     that

defendants    continuously         took      questionable        expenses,      which

directly affected the partnership income available to the Estate.


record, we must conclude that such a finding of fact is clearly
erroneous.
Both    Price         Waterhouse       reports        are       replete     with    examples      of

expense      charges         taken     by    defendants          for   which       there    is   not

adequate documentation or explanation to substantiate an ordinary

and necessary business purpose.                          These included trips, meals,

home    services,            cars,     gasoline,          insurance        expenditures,         and

telephone bills.

                 At this stage of the litigation, we must view the facts

in the light most favorable to plaintiffs, the non-movants, i.e.,

that    as       a    regular        way    of    doing         business,    defendants          were

fraudulently misrepresenting expenditures to benefit themselves

and    to    deprive          the     Estate      and     its     beneficiaries        of     their

legitimate           share    of     the    profits       of     Tabas    Enterprises.            The

evidence in the record is clear that these practices, defendants'

regular way of doing business, continued even after plaintiffs'

complaint            was   filed.           As    a      consequence,        plaintiffs          have

established a threat of continuing fraudulent conduct as required

under an "open-ended" continuity analysis.

                 Because       we     have       found      a    pattern     of     racketeering

activity in both the duration of and the on-going threat implicit

in defendants' regular way of doing business, we will not go on

to analyze this case under the six Barticheck factors.                                     The fact

that we do not employ the Barticheck factors in our analysis here

does not, however, mean that they might not be relevant in a

different case in determining if continuity exists.                                 As the Court

noted       in   H.J.        Inc.,    in     those       cases     where     relatedness         and
continuity are in doubt, other factors should be examined to

discern if there is a "pattern of racketeering activity" under

RICO:
     The limits of the relationship and continuity concepts
     that combine to define a RICO pattern, and the precise
     methods by which relatedness and continuity or its
     threat may be proved, cannot be fixed in advance with
     such clarity that it will always be apparent whether in
     a particular case a "pattern of racketeering activity"
     exists.


492 U.S. at 243.    It is helpful, therefore, when determining

whether "relatedness" or "continuity" has been proven, to use a

fact-oriented, case-by-case approach to determine whether there

is a "pattern of racketeering activity."21


    21
     Although we decided Barticheck before H.J. Inc., we have
since noted that the six Barticheck factors are still relevant in
determining whether a pattern exists. See Hindes v. Castle, 937
F.2d 868, 873 n.3 (3d Cir. 1991) ("[T]he Barticheck factors, such
as the number of acts, victims, and perpetrators and the
character of the unlawful activity, may be relevant in some cases
in assessing the threat of continuing criminal conduct by
throwing light on whether the illegal activity was part of a
legitimate business' regular way of conducting business, or
whether the predicates were attributable to a 'long-term
association that exists for criminal purposes.'") (citation
omitted).
          It remains clear, however, that "duration is the sine
qua non of continuity."     Hindes, 937 F.2d at 873.    For this
reason, the Barticheck factors are best viewed as analytical
tools available to courts when the issue of continuity cannot be
clearly determined under either a closed- or open-ended analysis.
          It should also be noted that the H.J. Inc. decision
cites the Third Circuit's holding in Barticheck for two narrow
propositions only:   (1) that continuity is both a closed- and
open-ended concept, 492 U.S. at 238, and (2) that "scheme" is not
a self-defining term, 492 U.S. at 241 n.3. Nowhere in H.J. Inc.
does the Supreme Court expressly adopt the Barticheck factors as
being required elements in the "continuity" analysis.
             In     the    present       case,    we    find      that     plaintiffs        have

clearly presented evidence that is legally sufficient to survive

summary      judgment       on    the     issue        of    continuity         through        the

defendants' alleged commission of the predicate acts and of the

underlying      fraudulent        activity       as     an       ongoing    way      of     doing

business.       Accordingly, we do not need to concern ourselves with

the applicability of the Barticheck factors to the specific facts

of this case.

             We recognize that our ruling means that RICO, with its

severe    penalties,        may    be    applicable         to    many    "garden-variety"

fraud cases, see Marshall-Silver, 894 F.2d at 597, particularly

considering        the    judiciary's      broad       interpretation           of   the    mail

fraud statute.           See Kehr Packages, 926 F.2d at 1413-14.                          We are

bound, however, by the language of RICO itself and the Supreme

Court's instruction that "RICO is to be read broadly."                                    Sedima,

473 U.S. at 497.             Indeed, the Supreme Court has consistently

struck down efforts by the courts of appeals to narrow RICO's

scope.       See    NOW    v.     Scheidler,      114       S.    Ct.    798,     806     (1994)

(rejecting Seventh Circuit holding that RICO requires proof that

either    the      racketeering         enterprise      or       the   predicate        acts   of

racketeering were motivated by an economic purpose); H.J. Inc.,
492   U.S.    at    250    (rejecting       Eighth      Circuit         holding      that    RICO

requires proof of multiple "schemes"); Sedima, 473 U.S. at 495

(rejecting Second Circuit holding that RICO requires proof of
prior     conviction   on   predicate    act   and   that    plaintiff   must

demonstrate specific "racketeering injury").

             We share the Supreme Court's concern over the broad

application of the civil RICO statute.           We are nonetheless bound

by   the    language   of   the   statute      and   the    Supreme   Court's

interpretation of it.       Accordingly, it is for Congress to decide

whether to narrow the scope of RICO; we are not in a position to

do so by requiring that parties prove elements of a threat or of

an injury, presented by predicate racketeering activity, beyond

what is expressed in the language of the statute itself.22

                                    V.

            Defendants have raised a number of alternative grounds

for summary judgment claiming that insufficient causation and

injury have been pleaded and that some of the defendants are not


     22
     The dissent relies upon our recent holding in Jordan v.
Fox, Rothschild, O'Brien & Frankel, 20 F.3d 1250 (3d Cir. 1994)
for the proposition that civil RICO should not be applicable in
cases lacking a significant societal threat. But see footnote 17
in regard to our position that there is no requirement in civil
RICO that the predicate acts pose a "societal threat." We find
several significant differences, however, between Jordan and the
dispute here. First, the duration and continuing nature of the
underlying fraudulent activity alleged here is much greater. In
addition,   the  district   court   in   Jordan  questioned   the
"relatedness" of the predicate acts, see Jordan v. Berman, 792 F.
Supp. 380, 385-86 (E.D. Pa. 1992), and further held that
plaintiffs had failed to establish that they had sustained any
injury from the purported predicate acts. Id. at 388. Finally,
and perhaps most importantly, the district court in Jordan found
that there was no evidence presented that would lead a jury to
believe that mail fraud had been committed.     Id. at 387.    As
discussed above, we have come to a different conclusion in the
present dispute.
potentially liable under RICO.                 Because discovery has not been

completed, we find that it would be premature to address these

alternative grounds.           Plaintiffs have sought to take additional

depositions      that     could    have    substantial         bearing     upon      these

issues.    Additionally, the district court did not rule on any of

the   alternative       grounds,    and,    as    a    consequence,      it     would   be

inappropriate for us to consider them at this stage.23

                                          VI.

             For the foregoing reasons, we will reverse the district

court's decision granting summary judgment against plaintiffs on

their RICO claims, we will vacate the dismissal of plaintiffs'

supplemental state claim, and we will remand this case to the

district     court      for   further     proceedings         consistent      with   this

opinion.24



BECKER, Circuit Judge, Concurring.

                                           I

             I   join    in   almost    all     of    Judge    Roth's    lead     opinion

(including Parts I, II, V, and VI in their entirety), and I

      23
     We note that on remand the court should consider whether
the decision in Reves v. Ernst & Young, 113 S. Ct. 1163 (1993)
has any bearing on this case. In Reves, the Supreme Court held
that only defendants who participate in the operation or
management of an enterprise can be held liable for violating 18
U.S.C. § 1962(c).
      24
     In view of our vacatur of the dismissal of plaintiffs'
supplemental state claims, we do not need to rule on defendants'
cross-appeal.
concur in the judgment.         I write separately, however, because I

believe that the opinion has "stopped short," and not carried the

logic   of    its   argument    to    its    ultimate    conclusion.        More

specifically, while Judge Roth's opinion makes clear that the

"Barticheck factors" cannot be the sine qua non of the continuity

determination, and its opinion undoubtedly erodes Barticheck's

precedential value, the court's logic -- as Judge Greenberg's

dissent recognizes, see Dissenting Op. at page 7, especially

lines 6-10 -- compels the conclusion that Barticheck should be

abandoned.     Yet Judge Roth leaves it breathing and thereby will,

I fear, cause mischief by engendering confusion in the district

courts, in addition to a round of further appeals.

             I recognize that Judge Roth's opinion does not in terms

rest on application of the six Barticheck factors.              It is a fact,

however,     that   these   factors   have   been   at   the   heart   of   this

court's civil RICO jurisprudence for the past seven years, and

most district court opinions struggling with the existence vel

non of civil RICO continuity use Barticheck as their polestar.

In my view, now that we are in banc on a civil RICO case, it is

incumbent upon us to clarify the status of Barticheck, and the
lead opinion's avoidance of the issue is not grounds for putting

it off to another day.         I therefore write separately in order to

set forth my understanding of the implications of this court's

decision.
                                       II

             Perhaps the most serious example of the uncertainty

needlessly sown by the jurisprudential reticence of Judge Roth's

opinion concerns Barticheck factor #6, the "character of the

unlawful activity."       In my view, the opinion can be read as

leaving open the possibility that this factor, along with the

other Barticheck factors, survives today's decision.                      See Lead

Op. at page 40 ("The fact that we do not employ the Barticheck

factors in our analysis here does not, however, mean that they

might not be relevant in a different case in determining if

continuity exists.") (emphasis supplied); id. at 41 n.21 ("The

Barticheck    factors   . . .    may    be   relevant        in   some    cases   in

assessing    the threat   of    continuing        criminal    conduct . . . .")

(internal quotation marks omitted, emphases supplied).                     This is

apparently the conclusion drawn by Judge Greenberg, whose dissent

treats "character of the unlawful activity" as the most important

of the factors.     See Dissenting Op. at pages 12, 15.                   But Judge

Roth's opinion does not explain how to distinguish this factor

from   "societal   threat,"     which,      she    properly       holds   (if   less

emphatically than is warranted), cannot survive Sedima and H.J.,
Inc.   See Lead Op. at page 34 n.17.

             This reluctance to overrule Barticheck thus has the

unfortunate potential for contributing to doctrinal confusion,

for as Judge Greenberg argues in dissent, see Dissenting Op. at

page 7, a given factor either is or is not relevant to the
existence of a "pattern" of racketeering activity.                            The RICO

statute does not have one provision for cases where relatedness

and    continuity      (or their      absence)    are   clear     and      another   for

"those cases where relatedness and continuity are in doubt."

Lead Op. at page 40.           Accordingly, I believe that we should inter

Barticheck as a whole, and should forthrightly announce which, if

any,     Barticheck      factors      remain    relevant     to      the    continuity

analysis and which do not.

                                          A.

               As I read Judge Roth's opinion, it properly treats the

length    of    time    over    which   the    predicate   acts      were    committed

(Barticheck factor #2), the number of unlawful acts (factor #1),

and the routineness or customariness of the acts (which in my

view is, as I explain below, the only permissible interpretation

of factor #6, the character of the unlawful activity) as relevant

for the continuity inquiry.             Although Judge Roth does not discuss

Barticheck factors #3-#5 (similarity of acts, number of victims,

and number of perpetrators), I believe that its analysis shows

that these factors are irrelevant to the continuity inquiry.

               As   Judge      Roth   notes,    continuity      is      "centrally     a

temporal concept."          Lead Op. at page 31 (quoting H.J., Inc., 492
U.S. at 242).          It simply "refer[s] either to a closed period of

repeated conduct [closed-ended continuity], or to past conduct

that by its nature projects into the future with a threat of

repetition [open-ended continuity]."                Id. (quoting H.J., Inc.,
492 U.S. at 241) (alterations supplied here).                      Thus duration,

whether established duration or likely duration, is central to

the "continuity" aspect of a RICO "pattern."                   As a result, the

length of time over which the predicate acts occurred (Barticheck

factor #2) is of primary significance.

            I agree with Judge Roth's view that something more is

needed to make out a "pattern," and that two related predicate

acts almost ten years apart are unlikely to suffice.                        See Lead

Op. at page 37.         But the number of predicate acts (Barticheck

factor    #1),   on    which   her    opinion      properly   relies      in finding

continuity here, provides all that is needed for closed-ended

continuity.      In conjunction with duration, the number of acts

suffices to show frequency -- a concept that, as Judge Roth's

opinion     agrees,     see    Lead    Op.   at     6,   provides      an   adequate

interpretation of "pattern" where completed, related acts are

concerned.

            As the Supreme Court has explained, the definition of a

RICO "pattern" should accord with the plain meaning of that term.

In particular,
          [a] "pattern" is an "arrangement or order of things or
          activity," and the mere fact that there are a number of
          predicates is no guarantee that they fall into any
          arrangement or order.      It is not the number of
          predicates but the relationship that they bear to each
          other or to some external organizing principle that
          renders them "ordered" or "arranged."

H.J.,    Inc.,   492    U.S.   at     238,   109    S. Ct.    at   2900     (citation

omitted).
                 As I see it, the continuity prong of pattern analysis

should be explicitly directed toward ruling out RICO liability

premised on two or more predicate acts that are related but

nonetheless "isolated" or "sporadic."                     See H.J., Inc., 492 U.S.

at 239, 109 S. Ct. at 2900 (discussing legislative history of the

"pattern"         requirement).          Courts    then    would     be    in   a   better

position         to    engage     in   reasonably       meaningful       discussions     of

whether          --    in   the   concrete    circumstances         of    the     case   --

continuing racketeering activity had been adequately alleged.

                 But the Barticheck factors fail to provide the needed

guidance, and any attempt to use all six in continuity analysis,

in   my      view,     is   destined    for   failure,     in   part      because    these

factors were not originally intended to govern the continuity

inquiry.          Rather, they originated as an attempt to distill our

case law on the RICO pattern requirement, simpliciter, not as an

explication of separate relatedness and continuity requirements.

See Barticheck, 832 F.2d at 38-39 ("Those cases . . . recognized

that the existence of a RICO pattern . . . turn[s] on . . . " a

combination of specific factors . . . .") (emphasis supplied).

Some        of   the   Barticheck      factors    are    relevant    to    this     general

notion of pattern.25              Once "pattern" is analytically severed into

"relatedness" and "continuity," however, there is no reason to

       25
     I do not mean to suggest that the number of perpetrators or
victims, while irrelevant to continuity, is relevant to
relatedness, for it is not.      The identity or other defining
characteristics of the victims and perpetrators, however, may
help establish relatedness of predicate acts.
insist that all six of the factors will logically bear on both

continuity and relatedness.               Barticheck did not do so.             Rather,

it discussed the various factors and concluded simply that the

plaintiffs had adequately alleged a RICO pattern.                      See id. at 39.

              What Barticheck did do, however, was recognize that

continuity might be either open-ended or closed-ended, rejecting

the defendants' argument that RICO reached only conduct that was

potentially ongoing.            See id. at 39-40.           Furthermore -- and this

accords with my view that the factors should be analyzed as they

bear    on    screening     out    isolated         or   sporadic    activity   --    the

Barticheck      panel     said    that     the      "continuity"     language   in    the

legislative history cited in Sedima
          simply call[ed] for an inquiry into the extent of the
          racketeering   activity.     Although temporal  open-
          endedness may be one measure of extent, it is not the
          only one.    We decline to adopt a verbal formula for
          determining when unlawful activity is sufficiently
          extensive to be "continuous."

832    F.2d    at   40.     I     would    explicitly       hold,     therefore,     that

although the duration of the predicate acts does not without more

show continuity, if the acts occurred (as shown by the number of

acts)   or    establish     a     threat       of   occurring   (as    shown    by    also

considering whether they are repetitive in nature) with some

frequency, they satisfy the continuity requirement, and, provided

they are related, a pattern is shown.

              "A    party   alleging       a    RICO     violation    may   demonstrate

continuity over a closed period by proving a series of related

predicates extending over a substantial period of time."                             H.J.,
Inc., 492 U.S. at 242, 109 S. Ct. at 2902.             What constitutes a

"substantial" period of time for these purposes (as long as in

excess of "a few weeks or months," see infra) should vary with

the number of acts in "the series" of predicates.               As the number

of acts in a given period of time increases, the predicates begin

to look less sporadic and a pattern begins to emerge.                  The only

(relative)   absolute   here   should   be    that   the   predicates      must

stretch out at least for more than three or four months to

establish    closed-ended     continuity     in   light    of    the    Court's

instruction that "[p]redicate acts extending over a few weeks or

months and threatening no future criminal conduct do not satisfy"

the continuity requirement.      Id. at 242, 109 S. Ct. at 2902.

            For open-ended continuity, in contrast, we are looking

for "conduct that by its nature projects into the future with a

threat of repetition."      Thus, while I agree with Judge Roth that

the two types of continuity are cognate, I believe that to see

whether open-ended continuity is established, what we should ask

is simply whether the activity threatens to demonstrate close-

ended continuity at some future time.             This, I believe, is the

point of the three examples of open-ended continuity in the H.J.,
Inc.   opinion,   including    the   scenario      where   the    defendant's

commission of predicate acts is "a regular way of conducting

defendant's ongoing legitimate business."            492 U.S. at 242-43,

109 S. Ct. at 2902.
               To return to Barticheck factor #6, in my view, threat

of recurrence is also the only respect in which the "character"

of the predicate acts is relevant to the continuity inquiry.                 As

the Supreme Court and Judge Roth's opinion have explained, open-

ended    continuity     merely   refers   to   "past   conduct   that   by   its

nature projects into the future with a threat of repetition."

Majority Op. at page 31 (quoting H.J., Inc., 492 U.S. at 241, 109

S. Ct.    at    2902)   (emphasis   supplied    here).     For   example,     if

extortion is a defendant's regular way of conducting business,

then the nature or character of the conduct in the sense of its

routineness or literal open-endedness makes it likely to continue

into the future.        That is the sense in which the character of the

activity is relevant to continuity.26

               As Judge Roth's opinion correctly holds, "character of

the unlawful activity" may not refer to some notion of "societal

threat."       Lead Op. at page 34 n.17.       Because the opinion does not

clarify the extremely limited sense in which "character" of the


    26
     This interpretation of "character" of the unlawful activity
as "repetitive character" also makes sense of the admonition in
Kehr Packages to consider the underlying scheme in mail fraud
cases.   To the extent that the underlying scheme indicates a
likelihood of a defendant's continuing to commit predicate acts,
it may be relevant to open-ended continuity.    (Of course, the
underlying scheme also may supply an "organizing principle" that
establishes relatedness.   See supra at page 50 (quoting H.J.,
Inc. 492 U.S. at 238, 109 S. Ct. at 2900).)       In all cases,
however, we are looking for a pattern (and thus continuity and
relatedness) of the predicate acts of racketeering activity, see
H.J., Inc., 492 U.S. at 237-40, 109 S. Ct. at 2900-01; id. at
242, 109 S. Ct. at 2902.
predicate acts is relevant to the continuity inquiry, the dissent

unfortunately       devotes      great    energy     to    arguing    that   the

"character" of the predicate acts, meaning the species of act

involved, weighs against a finding of continuity.               See Dissenting

Op. at pages 12-18.       I believe that this effort is fundamentally

at   odds    with   the   RICO    statute     and   Supreme   Court   precedent

interpreting it.

                                         B.

             The "societal threat" requirement can be traced back to

this court's opinion in the first Marshall-Silver case, 835 F.2d

63 (3d Cir. 1987).        There, we reasoned that "the target of RICO

. . . is criminal activity that, because of its organization,

duration, and objectives poses, or during its existence posed, a

threat of a series of injuries over a significant period of

time."      Id. at 66-67 (emphases supplied).              The panel dismissed

the case in part because it involved "a single victim, a single

injury, and a single short-lived scheme with only two active

perpetrators," id. at 67, and thus did not pose the appropriate

sort of threat.       This was an eminently prudent attempt to make

sense of the RICO pattern requirement.                    It appears to be an

effort to get at the ongoing or potentially ongoing criminal

activity that concerned Congress.             It was essentially an extent

requirement.

             In the cases after H.J., Inc., however, the concern
over extent of injury was transmogrified to a focus on societal
injury.      Rather than worry about a "series of injuries," we have

come to focus on a normative evaluation of the injuries alleged

in   a   civil       RICO    case.      Such    focus     is     the      basis    for   Judge

Greenberg's dissent in this case, but with all due respect, given

what Congress and the Supreme Court have said about the RICO

statute, see Lead Op. at page 34 n.17, I believe that the focus

is inappropriate in this context.

               Congress in the RICO statute specified an extensive

laundry list of serious and arguably less serious acts that all

constitute       racketeering         activity,      and       so    it      strikes     me    as

improper to maintain that the statute's "pattern" requirement

builds    in     a    normative       evaluation     of    the       seriousness       of     the

predicate acts.             The concern about federalizing and attaching

drastic penalties to "garden variety fraud," see Dissenting Op.

at   pages     20-21,       is   a   legitimate     one,       but     one    that     must     be

addressed by Congress rather than the courts.                             And Congress has

told us what sorts of acts to worry about.                          Our concern with the

pattern requirement is simply to insure that RICO liability is

not attached to "isolated" or "sporadic" predicate acts.                                      That

task requires no inquiry into the seriousness of the acts.                                    The

"threat" for which we are looking is the threat of repeated

prohibited conduct, not the threat of grievous harm.

               With this in mind, I believe that this court should

plainly state that the number of victims (factor #4) and number

of   perpetrators           (factor    #5)     do   not    bear      on      the   continuity
inquiry.    Certainly, neither the number of victims nor the number

of perpetrators should affect the analysis of duration which, as

the    majority      explains,   the    Supreme   Court     has   rendered      the

centerpiece     of    the   continuity    jurisprudence.          Indeed,    these

factors seem to inform the notion of societal threat, and hence

are out of bounds.

            Nor does the number of victims or perpetrators go to

making    out   a    pattern.     For    example,     one   office-tower      bomb

triggered during business hours could result in a tragically

large number of victims, but just because the bombing happened

during the day instead of at night when few people were there

does not make it more likely that the bombing reflects non-

isolated or non-sporadic activity.             Similarly, three bombings by

several conspirators trying to eliminate one target would not (if

successful) reflect a greater threat of continuing racketeering

activity than would three bombings by the Unabomber, because it

is only the repetitive nature of the activity and not the number

of    victims   or   perpetrators      that   helps   establish    a   threat    of

continuity.

            The number of predicate acts could indicate an extent
of activity that would bear on whether the activity is sporadic

or frequent, and extent of the predicate activity is therefore

relevant to continuity, as Judge Roth seems to recognize.                       See

Lead Op. at page 38 ("[If] the predicate acts have been a regular

way of conducting defendant's legitimate business over a long
period in the past, the RICO pattern been satisfied.").                   But

number   of    victims   is   not   relevant,   for,    under    the   present

congressional scheme, we are looking for continuity in order to

show a pattern of racketeering acts, not harm from the acts.              See

supra page 54 n.26.

                                      C.

              We have previously held that "similarity" (factor #3)

does not bear on continuity, see, e.g., Marshall-Silver, 894 F.2d

at 595 n.1, and Judge Roth has already made length of time

(factor #2) and number of unlawful acts (factor #1) part of her

core analysis, irrespective of Barticheck.             In my view, the lead

opinion leaves virtually nothing of Barticheck and I believe --

along with Judge Greenberg in dissent, see Dissenting Op. at page

7, especially lines 6-10 -- that we should say so.              While I share

Judge Roth's uneasiness as to where this leaves the law, I can

only hope that its eloquent and clarion call will not be ignored

by Congress.

              Judges Stapleton and McKee join in this concurrence.



ALITO, Circuit Judge, concurring:
              I concur in the judgment, and I join parts I, II, V,

and VI of the opinion of the court         While the discussion of the

"continuity" requirement in part IV of Judge Roth's opinion is a

welcome step away from the approach taken in some of this court's

prior decisions, I do not agree with certain portions of that
discussion.           I   set     out     my   understanding           of   the    concept    of

"continuity" in Kehr Packages, Inc. v. Fidelcor, Inc., 926 F.2d

1406,     1419-26         (3d     Cir.    1991)        (Alito,        J.,   concurring       and

dissenting), and pursuant to that analysis, I think that closed-

ended    continuity         was    sufficiently           established       here    to   defeat

summary judgment.               My principal points of disagreement with the

discussion in part IV of Judge Roth's opinion are as follows.

               First, I do not agree with the intimation (Typescript

at 34) that closed-ended continuity requires activity lasting

years.     See Kehr Packages, Inc., 926 F.2d at 1421-22 (Alito, J.,

concurring and dissenting).

               Second, I do not agree with the suggestion (Typescript

at     36-37)     that      a     plaintiff         who     establishes       "closed-ended

continuity" may also be required to show that the predicate acts

were    part     of   the       defendant's         regular     way    of   conducting       its

business.       I see no support for this requirement in the language

of the RICO statute or relevant Supreme Court decisions.

               Third, I do not agree that, in a RICO case based on

mail     fraud    predicates,            we     must      "focus       on   the    underlying

fraudulent       activity,         rather       that      on    the    otherwise      innocent

mailings, in determining continuity."                       (Typescript at 38.)           In my

view, we must focus on the duration of the predicate violations.

See     Kehr    Packages,         Inc.,       926    F.2d      at   1422-23       (Alito,    J.,

concurring and dissenting).
            Finally, I do not think that the Barticheck factors

should be considered except to the extent that they have some

logical   bearing   on     "relatedness"    or   "continuity."   See    Kehr

Packages,    926    F.2d     at   1421     (Alito,   J.,   concurring    and

dissenting).
GREENBERG, Circuit Judge, dissenting.

                  In its amended complaint, the Estate of Charles L.

Tabas        seeks    to   transform        its    state-law     dispute      with   the

defendants over the proper allocation of a partnership's profits

into a federal RICO case simply by alleging that the defendants

used        the   United   States    mail    to     communicate       with   it   over   a

substantial          period   of    time.         While   we   have    not   considered

directly whether a plaintiff can bring a RICO action in such

circumstances, our precedents clearly forbid such alchemy.                           See

Hughes v. Consol-Pennsylvania Coal Co., 945 F.2d 594, 609-11 (3d

Cir. 1991), cert. denied, 501 U.S. 1222, 112 S.Ct. 2300 (1992);

Hindes v. Castle, 937 F.2d 868 (3d Cir. 1991); Kehr Packages,

Inc. v. Fidelcor, Inc., 926 F.2d 1406 (3d Cir.), cert. denied,

111 S.Ct. 2839 (1991); Banks v. Wolk, 918 F.2d 418 (3d Cir.

1990); Marshall-Silver Constr. Co. v. Mendel, 894 F.2d 593 (3d

Cir. 1990); Swistock v. Jones, 884 F.2d 755 (3d Cir. 1989).

Therefore, I would affirm the grant of summary judgment in favor

of the defendants, and I respectfully dissent.27

                  I agree with the majority that the central issue in

this appeal is whether the Estate has alleged that the defendants

engaged in a "pattern of racketeering activity" as defined in 18



       27
     The Estate may have valid claims under state law, but I
would hold that the district court did not abuse its discretion
in dismissing these claims pursuant to 28 U.S.C. § 1367.
U.S.C. § 1961(5).28               Majority typescript at 24.               As noted by the

majority, to establish a pattern of racketeering activity, a

plaintiff          "must       show    that      the     racketeering          predicates       are

related, and that they amount to or pose a threat of continued

criminal activity."               H.J. Inc. v. Northwestern Bell Tel. Co., 492

U.S.        229,       239,    109     S.Ct.     2893,    2900        (1989)     (emphasis      in

original).             Thus, a plaintiff seeking to bring a RICO claim must

allege, among other things, relatedness and continuity.

                As      the    majority      states,      the    predicate       acts     are   41

instances of alleged mail fraud.                        Of these, 39 were the mailing

of $15,000 checks to the Estate, totalling $585,000, representing

monthly distributions from Tabas Enterprises.                            The remaining two

were the mailing of yearly tax forms to the Estate.                                      Amended

Complaint          ¶    49,     App.    at     43-46.      According       to     the    amended

complaint,         the        checks   were     sent     from    December       22,     1987,   to

February 19, 1991, a period of over three years.29                                    The Estate

also        alleges      as    predicate       acts    that     the   defendants        used    the

United States mail to send checks to members of Daniel Tabas's

family for work not performed.                        Amended Complaint ¶ 51, App. at
       28
     I also agree with the majority that the 1987 settlement and
the subsequent mutual release do not preclude the Estate from
bringing this case.     I mention this point because, as the
majority notes, this issue was considered by the panel only and I
was a member of the panel.
       29
     The amended complaint recites that the last two checks were
sent on January 18, 1990, and February 19, 1990.          Amended
Complaint at 34. However, these dates appear to be typographical
errors because they are listed in an otherwise chronological
sequence in which the next preceding date was December 14, 1990.
46-47.30          The     majority,     however,     does    not    rely    on     these

allegations as the Estate did not provide evidence that these

checks were mailed, and the evidence on the motion for summary

judgment established that a courier delivered them.                       I agree with

this disposition and thus conclude that we are concerned only

with the mailing of the $15,000 checks and the tax forms.

                 I would hold that these mailings are related.31                    See

Kehr Packages, 926 F.2d at 1414 (noting that relatedness test

almost always will be satisfied "in cases alleging at least two

acts        of    mail     fraud      stemming     from     the    same     fraudulent

transaction").           However, in my view these mailings do not satisfy

the continuity requirement as defined by the Supreme Court's and

our precedents.            In H.J. Inc., the Supreme Court stated that

continuity "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."             492   U.S.    at   241,   109    S.Ct.    at   2902     (citing

Barticheck v. Fidelity Union Bank/First Nat'l State, 832 F.2d 36,

       30
     In   their  brief,   the  defendants   maintain  that   this
allegation does not satisfy the pleading requirements of Fed. R.
Civ. P. 9(b). Brief at 30 n.6; see Banks v. Wolk, 918 F.2d at
422 n.1 (noting that allegations of mail fraud must be plead with
specificity required by Fed. R. Civ. P. 9(b)). I do not address
this contention because even assuming that the pleading
requirement is met, the allegations were refuted and, in any
event, the Estate's allegations as a whole do not state a claim
under RICO.
       31
     While the majority does not hold explicitly that they are
related, it implicitly reaches this conclusion.
39 (3d Cir. 1987)).               If a plaintiff does not allege that the

predicate acts lasted over a "substantial period of time," then

it must allege a threat of continued criminal activity.                              Id. at

242,        109   S.Ct.     at   2902;   Marshall-Silver,        894    F.2d     at    596.

Conversely, if a plaintiff alleges that the predicate acts lasted

a substantial period of time, then it need not allege a threat of

future       criminal       conduct.      Therefore,      a   plaintiff       alleging    a

closed-ended scheme has both a lesser burden in that it does not

have to demonstrate a threat of future harm, and a greater burden

in that it must establish that the predicate acts continued over

a substantial period of time.

                  Although we do not have a bright-line rule establishing

how     long        the    predicate     acts   must      last    to        constitute    a

"substantial period of time," I will assume that the period of

over        three      years     in    this   case     would     satisfy       any     such

definition.32             Yet, simply by clearing this duration hurdle the

Estate does not establish continuity for we have stated clearly

and repeatedly that duration is a necessary but not sufficient

condition         to   proving    continuity.        In   Hindes       v.    Castle,     for

example, we stated:
          The post-H.J. Inc. cases decided by this
          court which have focused on pattern all make
          clear that duration is the sine qua non of
          continuity.     While it is not in itself
          sufficient   to    establish a  pattern,   a
          determination that must be made in light of


       32
     While I treat this case as a closed-ended case, obviously
if I considered it as open-ended my result would be the same.
            all of the Barticheck factors, no pattern can
            be shown without the required duration.


937 F.2d at 873 (emphasis added).          Likewise, in Marshall-Silver
we recognized:
          [I]f the Court in H.J. Inc. intended that the
          duration of the predicate acts or the threat
          arising therefrom should be determinative
          . . . we would not have expected the Court to
          eschew providing a specific standard in favor
          of a fact oriented, case-by-case development.


894 F.2d at 597 (emphasis in original) (dicta); see also Kehr
Packages, 926 F.2d at 1412 (noting that "the length of time over

which the criminal activity occurs or threatens to occur is an

important     factor,"   but   not   stating   that    it    is   dispositive).

Accordingly,     a   more   detailed    analysis      of    the   complaint   is

required.33

    33
     Our rule that duration is a necessary but not sufficient
condition to establish continuity is consistent with the Supreme
Court's statement in H.J. Inc.: "petitioners claim that the
racketeering predicates occurred with some frequency over at
least a 6-year period, which may be sufficient to satisfy the
continuity requirement."    492 U.S. at 250, 109 S.Ct. at 2906
(emphasis added). By using the word "may," the Court implicitly
rejected the notion that duration alone establishes continuity.

          Precedents in other circuits could be read to suggest
that duration alone can satisfy continuity.      See, e.g., Dana
Corp. v. Blue Cross & Blue Shield Mutual, 900 F.2d 882, 886-87
(6th Cir. 1990) (stating that in a single-scheme, single-victim
case "the allegations of fraud occurring for a period of
seventeen years, along with the specific mailings evidencing such
a scheme, are sufficient to state a claim of a pattern of
racketeering activity"); Fleet Credit Corp. v. Sion, 893 F.2d
441, 446-47 (1st Cir. 1990) (finding that 95 fraudulent mailings
sent over a four and one-half year period are sufficient to
establish continuity); Walk v. Baltimore & Ohio & R., 890 F.2d
688, 690 (4th Cir. 1989) (reversing dismissal where complaint
alleged 10-year scheme to defraud plaintiffs); Jacobson v.
              In Barticheck v. Fidelity Union Bank/First Nat'l State,

832 F.2d 36, we set forth six factors that a court should address

in considering whether the plaintiff has alleged a pattern of

racketeering:       (1) the number of unlawful acts; (2) the length of

time   over    which     the   acts   were    committed   (duration);    (3)   the

similarity of the acts; (4) the number of the victims; (5) the

number of perpetrators; and (6) the character of the unlawful

activity.      Id. at 39.       The majority nevertheless concludes that

having "found a pattern of racketeering activity in both the

duration      of   and   the   on-going      threat   implicit   in   defendants'

regular way of doing business [it] will not go on to analyze this

case under the six Barticheck factors."                 Majority typescript at

40.    The majority then indicates that its decision not to employ

the Barticheck factors does not mean that they are irrelevant in

determining where there is continuity, as a court may consider

the factors if relatedness and continuity are in doubt.




Cooper, 882 F.2d 717, 720 (2d Cir. 1989) (stating that continuity
existed because predicate acts alleged occurred over "a matter of
years"). However, it is not clear that in any of these cases,
the courts of appeals faced a factual situation analogous to the
one presented here, i.e., a dispute over the profits of a
partnership. This case most similar to this one is Jacobson. In
Jacobson, the plaintiff alleged that the two defendants, one of
which was his son, attempted to defraud him out of real estate
holdings that he owned.     While the nature of the dispute is
somewhat similar, the alleged predicate acts went beyond mail
fraud and included extortion, larceny, offering false instruments
for filing, and usury. 882 F.2d at 719. Thus, the character of
the unlawful activity in Jacobson is vastly different than that
alleged here. In any event, we are not bound by Jacobson.
               I    reject       the     majority's         approach.          To     start   with,

continuity         is     in    doubt        here.         But   quite        aside    from    that

consideration           it      seems    to     me    that       the    majority's       approach

inevitably leads to analytical looseness in determining whether

there has been a pattern of racketeering activity.                                     While I do

not    doubt       that    in    practice       the    Barticheck         factors       cannot   be

applied with mathematical precision, at least the factors are

guidelines in determining whether the plaintiff has demonstrated

continuity and relatedness.

               The majority opinion would be more justifiable if it

were    to     say      that     after       H.J.,    Inc.,       the     earlier      explicated

Bartichek       factors         are     no    longer       relevant       in    any    continuity

analysis.          While I would disagree with that holding, such a

result would have some analytical consistency.                                But by saying the

Bartichek factors are relevant in some cases but not in others,

see majority typescript at 40-41 & n.21, the majority winds up

saying that the Bartichek factors -- which are designed to answer

the broader question of whether particular facts fairly can be

characterized as a RICO case -- may shed light on whether a

three-month long scheme constitutes a pattern of racketeering

activity but not on whether a three-year long scheme constitutes

such a pattern.                 It seems to me self-evident that there are

three-month long schemes that clearly fall within RICO's purview

and    three-year         schemes        that    clearly         do    not.      Thus,    if     the

Bartichek      factors          are     relevant      at    all,       they    are    relevant   in
shedding light on all cases.              The majority's approach to the

complex statute does injustice to the Supreme Court's admonitions

to courts to take a "flexible approach" when interpreting the

"continuity" prong of the statute and to develop the concepts

behind    "pattern     of    racketeering    activity"    on    a     case   by   case

basis.     See H.J. Inc., 492 U.S. at 238, 243, 109 S.Ct. at 2900,

2902-03.      See also Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479,

500,    105   S.Ct.    3275,   3287    (1985)   (Congress      "and    the   courts"

should "develop a meaningful concept of 'pattern.'") (emphasis

added).

              Of course, as I have indicated, we decided Barticheck

before the Supreme Court's decision in H.J. Inc.                      Nevertheless,

we have noted in post-H.J. Inc. cases that the Barticheck factors

are still relevant and must be considered "'as they bear upon the

separate questions of continuity and relatedness.'"                     Hindes, 937

F.2d at 873 (quoting Banks, 918 F.2d at 423); accord Midwest

Grinding Co., Inc. v. Spitz, 976 F.2d 1016, 1023-25 (7th Cir.

1992)    (noting      that   factors   set   forth   in   Morgan       v.    Bank   of

Waukegan, 804 F.2d 970, 975 (7th Cir. 1986), which are similar to

Barticheck factors, apply even after H.J. Inc.).                       In Marshall-

Silver, we recognized that all of the Barticheck factors except

the third, the similarity of criminal acts, are relevant to the

question of continuity.           894 F.2d at 595 n.1; see also Hindes,

937 F.2d at 873 (reaffirming this view).              Thus, the question of

continuity is an "'inquiry into the extent of the [defendant's]
racketeering       activity,'"      Marshall-Silver,       894   F.2d     at    595

(quoting Barticheck, 822 F.2d at 40), and requires an examination

of the five Barticheck factors relevant to continuity.                  Moreover,

in applying these factors, we must take a "natural and common

sense approach" to continuity.              H.J. Inc., 492 U.S. at 237, 109

S.Ct. at 2899.       In view of these precedents in which so many of

the judges of this court have joined, I am perplexed at the

majority's subordination of Barticheck.

            Inasmuch as I would apply Barticheck in this case I

will now make an analysis of the factors it set forth.                  The first

factor, the number of unlawful acts, might appear to weigh in

favor of continuity as the Estate alleged that the defendants

engaged in over 40 predicate acts.            However, as we stated in Kehr

Packages, "the continuity question should not be affected by the

fact   that    a   particular    fraudulent       scheme    involved     numerous

otherwise 'innocent' mailings, rather than only a few."                  926 F.2d

at 1414.      Rather, what needs to be considered is the underlying

scheme:    "Although the mailing is the actual criminal act, the

instances of deceit constituting the underlying fraudulent scheme

are more relevant to the continuity analysis."                   Id.; see also
Midwest    Grinding    Co.,   976    F.2d    at   1024   ("Although     the    sheer

number of predicate acts might appear at first glance to prove

continuity, when it comes to a pattern premised on acts of mail

or wire fraud, the volume of mailings is not dispositive.").
            In this case, the alleged underlying scheme was an

attempt to defraud the Estate out of its rightful share of the

partnership income.        Thus, the allegations of fraud relate to a

discrete dispute, rather than to numerous distinct attempts to

defraud.     To     paraphrase   Kehr   Packages,   "[i]t    should    not   be

relevant . . . that [the defendants] sent [checks] on a monthly

basis, rather than quarterly or yearly."              926 F.2d at 1414.

Thus, "the sizable number of mailings does not show that the

defendants operated a long-term criminal operation."                   Midwest

Grinding Co., 976 F.2d at 1025.         Accordingly, this factor weighs

against a finding of continuity.

            The second factor is duration.          As I noted above, the

alleged fraudulent activity lasted for at least three years.

However, the significance of the length of the alleged scheme is

diminished by the nature of the scheme itself.             In this regard, I

reiterate    that    the   defendants    repeated    the    same   allegedly

fraudulent act over three years.           Thus, this is not a case in

which each mailing constituted a new fraudulent act.                  See Kehr

Packages, 926 F.2d at 1415 (distinguishing Fleet Credit Corp. v.
Sion, 893 F.2d 441 (lst Cir. 1990), because in Fleet Credit "each

mailing constituted a new fraudulent act").                 As we noted in

Marshall-Silver:
          Where such a fraudulent scheme inflicts or
          threatens only a single injury, we continue
          to doubt that Congress intended to make the
          availability of treble damages and augmented
          criminal   sanctions  dependent  solely   on
          whether the fraudulent scheme is well enough
              conceived to enjoy prompt success or requires
              pursuit for an extended period of time.


894 F.2d at 597.           Therefore, while the second factor, duration,

does weigh in favor of continuity, it is not a heavy weight on

the scale.         I will not discuss the third factor, the similarity

of    the     alleged      criminal      acts,         as    that      factor      concerns

relatedness, which I have found in this case.

                  The fourth factor, number of victims, weighs against a

finding      of    continuity     for,     as    the    district       court      correctly

indicated, this is a single-victim case.                        The Estate disputes

this conclusion, contending that all six of the beneficiaries of

the Estate are victims, including a charitable foundation that

ultimately benefits hundreds, if not thousands, of people.                            Brief

at 27 n.18.         Yet, this argument is supported neither by the case

law nor the amended complaint itself.                         In Kehr Packages, we
addressed an analogous situation and found that the only victim

of the defendants' alleged criminal activity was the company and

not    its    shareholders       or   its       guarantors.          We    reached     this

conclusion          because      "Kehr's        individual          shareholders        and

guarantors, and the holders of pledged collateral, were affected

only indirectly."          926 F.2d at 1418-19; see also Hughes, 945 F.2d

at    611    (noting    that     alleged    scheme          affected      single    victim,

"albeit      a     class    of    victims,"       in        rejecting      RICO    claim).

Similarly, here the scheme affected the beneficiaries of the

Estate only indirectly.
             Additionally,     throughout      its      amended    complaint,       the

Estate maintains that the fraudulent conduct deprived it, the

Estate, of its rightful share of the income.                    Indeed, according

to the 1964 Partnership Agreement, the deceased party's share of

the income is payable to his estate, not to his heirs.                         App. at

155.     While it is true that the presence of only one victim, like

the existence of only one scheme, does not necessarily preclude

the finding of a RICO pattern, this fact clearly weighs against

the finding of continuity.            See United States Textiles, Inc. v.

Anheuser-Busch      Cos.,    911    F.2d     1261,      1268    (7th    Cir.    1990).

Indeed, when there is only one victim and that victim is engaged

in   a   business   relationship       with    the      defendant,      the    dispute

between the parties may be nothing more than a civil controversy.

             The   fifth    factor,    the    number     of    perpetrators,        does

appear to weigh in the Estate's favor.               The district court stated

that there was only one perpetrator, "Daniel Tabas or individuals

under his control."           Opin. at 8-9.             But this conclusion is

inherently contradictory for even if the other perpetrators are

under    Daniel's    control,      they    still     existed.          In   fact,   the

district    court's    description        could    be    used     to    describe     an

organized crime family, yet clearly Congress meant RICO to cover

organized crime.      Nonetheless, this error is not significant, for

even if the number were as large as the Estate argues, the fact

that more than one person was involved in a scheme to defraud

that lasted a substantial period of time cannot without more
establish continuity.                 Indeed, in some ways this is the least

important factor.               Cf. Wade v. Hopper, 993 F.2d 1246, 1251 (7th

Cir.)       (per   curiam)       (listing         factors     relevant       for     continuity

determination            similar    to      those    listed     in    Barticheck       but    not

including number of perpetrators), cert. denied, 114 S.Ct. 193

(1993); Morgan v. Bank of Waukegan, 804 F.2d at 975 (listing same

factors in pre-H.J. Inc. case).                     Thus, this factor does not place

a heavy weight on the continuity side of the scale.

               The       final     factor,        the   character       of     the     unlawful

activity, is perhaps most important in assuring that RICO is

applied       in     a    manner       consistent       with     congressional          intent.

Congress aimed to prevent long-term criminal activity, but not to

federalize every garden-variety claim of fraud.                              "The concept of

'continuity'            plays    an        important    constraining           role    in    the

operation of the RICO statute" by requiring a court to examine

not    only    the       "period      of    time    over     which    the    predicate       acts

occurred or . . . during which any threatened criminal activity

would be likely to last," but also the character of the predicate

acts    and       the    extent       of    the     injury    generated       by     the    acts.

Marshall-Silver, 894 F.2d at 596-97.                         In this case the character

of the alleged acts of mail fraud and the confined extent of the

injury weigh heavily against the Estate.                         "Repeated mailings in

furtherance of a single scheme to inflict one fraudulent injury

may    be    no    indication         of    the     underlying       fraud's    continuity."
Shields Enters., Inc. v. First Chicago Corp., 975 F.2d 1290, 1295

(7th Cir. 1992).

          As I already have noted, this case evolves from an

ongoing   dispute     regarding    the    appropriate     split    of     a

partnership's profits.     The allegations of fraud do not pertain

to how Tabas Enterprises conducts its business, but only to its

internal functioning.     Moreover, unlike other conduct which can

constitute racketeering activity, such as extortion, robbery, or

murder, there is nothing inherently criminal in mailing a letter

containing a check or a tax form.           See 18 U.S.C. § 1961(1).

Indeed, the vast majority of mailings undoubtedly are lawful.

Thus, in this case the mailings could be regarded as racketeering

activity only by reference to matters beyond the letters and

their contents.



          The unreasonableness of regarding the mailing of the

thirty-nine $15,000 checks as RICO predicate acts in this case is

demonstrated   by   considering   what   would   have   happened   if   the

defendants had delivered the checks rather than mailed them.             In

that case, they could not have committed mail fraud and the

Estate could not have pleaded a RICO case, as there would have

been no predicate acts on which to base the complaint.             Rather

than seeking threefold damages under RICO, 18 U.S.C. § 1964(c),

the Estate would have been limited to a state law claim -- even

though at bottom the unlawful activity in both that hypothetical
case        and   this    case       involves    conduct        of   precisely     the   same

character.          I thus ask the following question: is it conceivable

that Congress intended that RICO could be applied to a defendant

who mails substantial payments to the plaintiff, but not to the

same        defendant     if    it    delivers      the    payments?34       The   question

answers itself.                Thus, the fact that this case involves mail

fraud        rather      than    some       other     type      of   fraud   is    entirely

fortuitous, and that fortuity should not result in a windfall to

the    plaintiffs.             But    by   ignoring       the   Bartichek    factors,     and

therefore failing to inquire into the character of the unlawful

activity,          the   majority          endorses    just      that    counterintuitive

result.

                  I recognize that the complaint is rife with contentions

that the defendants' activity defrauded the Estate out of its

fair share of the partnership's income.                         Yet the Estate does not

allege that the defendants' conduct has ramifications outside the

confines of the immediate dispute regarding the division of the

partnership's profits.                 Thus, the broader threat is minimal at

most.        See Meade v. Meade, 1991 WL 243539, *5 (E.D. Pa. Nov. 18,

1991) ("This is a dispute between a small number of parties, and


       34
     While the majority answers that Congress did intend to
distinguish between mailings and hand deliveries as the former
but not the latter could be mail fraud, this answer misses my
point.   My point is that in considering the character of the
unlawful acts in accordance with the sixth Barticheck factor, the
use of the mails was purely fortuitous in this particular case
and it was the alleged fraud and not how the checks were
delivered which injured the Estate.
neither directly affects nor has wider implications for a large

number   of    people.        Actual    and   threatened    societal      injury   is

little, if any.        Finally, each alleged act of mail and wire fraud

forms part of one, extended scheme, reinforcing the essentially

isolated      nature     of    the      alleged   racketeering          activity."),

reconsideration denied, 1992 WL 6929 (E.D. Pa. 1992), aff'd, 998

F.2d 1004 (3d Cir. 1993) (table); Rumbaugh v. Chandler, 1991 WL

169046, *4 (E.D. Pa. Aug. 27, 1991) (App. at 1893-900) ("This

action does not concern an extensive criminal enterprise whose

long-standing, repeated conduct has caused and will continue to

cause a severe injury to the community.              Rather, it is a private

dispute between two ex-partners that has continued over twelve

years in various forms.").

              I make one final but critical point with respect to the

character of the unlawful activity in this case.                   I focus on this

point because I regard the character of the activity as the most

significant Barticheck factor in this case.                       As the majority

points out, 39 of the predicate acts consist of the mailing of

$15,000 checks to the Estate and the other two concern mailing

tax   forms.      Reliance      on     such   predicate    acts    is   problematic

because the Estate is pleading in essence that the defendants

committed "mail fraud" by sending it money.                  I can conceive of

cases in which a defendant's act of sending money may constitute

fraud; perhaps, even, the defendants' activities (as alleged in

this case) theoretically could be prosecuted under the mail fraud
statute,35 although it must be remembered that "not every use of

the mails . . . in connection with a scheme is punishable" as

mail fraud.     United States v. Frey, 42 F.3d 795 (3d Cir. 1994),

slip op. at 3 (3d Cir. Dec. 13, 1994).                    But three undisputed

facts belie the conclusion that this is therefore a RICO case.

First, between March 1983 and September 1986, "Tabas Enterprises

paid for various personal expenses incurred by Harriette [as well

as] Daniel."      Majority typescript at 4.                Second, "[p]rior to

Charles's     death   .     .    .    the   brothers    appeared     to    have    an

arrangement under which Tabas Enterprises paid for many personal

and business expenses."              Majority typescript at 4 n.2 (emphasis

added).       Finally,      as       the    majority    indicates,        plaintiffs

acknowledge that as of the time of the state court lawsuit, "they

believed Daniel was taking more than he was entitled to under the

partnership agreement . . . They contend [only] that they did not

know the extent to which they were being short-changed . . . ."

Majority typescript at 5 n.3 (emphasis added).

             These facts make difficult to accept the majority's

conclusion    that    the   "mailings       [were]     'designed   to     lull    [the

Estate] into a false sense of security, postpone [its] ultimate

complaint to the authorities, and therefore make the apprehension

    35
     See Schmuck v. United States, 489 U.S. 705, 714-15, 109
S.Ct. 1443, 1450 (1989) ("To the extent that Schmuck would draw
from these previous cases a general rule that routine mailings
that are innocent in themselves cannot supply the mailing element
of the mail fraud offense, he misapprehends this Court's
precedents.").
of the defendants less likely than if no mailings had taken

place.'"    Majority typescript at 35 n.18 (citation omitted).                 In

any event, no matter how the Estate characterizes this case, and

even if there were some fraudulent acts, this suit is first and

last a dispute about how the partnership income should have been

distributed.      Seen in this context, the mailing of the checks was

so benign an act that it is a thin foundation on which to build

the continuity element.         At bottom, regardless of the pejorative

words    which   the   Estate    uses   to    characterize    the    defendants'

conduct, this case involves a commercial dispute over a discrete

issue, the amount due to the Estate in its monthly draws.                 Such a

dispute is simply not a RICO controversy.36

            I    recognize   that   the      majority   has   listed   numerous

questionable expenses charged against Tabas Enterprises and I

further    acknowledge    that    the   defendants      may   have    state   law

liability for some of these expenses.               But it is important in

considering this case to keep in mind that the incurring of these

expenses is not the predicate criminal conduct charged in this

case.     Rather, the predicate acts to establish RICO jurisdiction

are the use of the mails to disburse checks and to distribute

forms.     Overall, therefore, after consideration of the character


    36
     Keeping in mind that this case is really about who gets to
use the partnership income for what purpose, consider what would
have happened if the defendants had paid nothing to the Estate
over the three-year period in which they actually paid $585,000.
The Estate would have gotten nothing and there would not be a
RICO case.
of   the   unlawful     activity,     together      with    the   other    relevant

Barticheck      factors,    both   qualitatively      and    quantitatively,        I

conclude that the Estate has failed to establish a genuine issue

of   material    fact   over    continuity     and   that    this   case     is   yet

another attempt by a plaintiff "to fit a square peg in a round

hole by squeezing garden-variety business disputes into civil

RICO actions."      Midwest Grounding Co., 976 F.2d at 1025.

            In reaching my conclusions, I have taken particular

note of our opinion in Jordan v. Fox, Rothschild, O'Brien &

Frankel, 20 F.3d 1250 (3d Cir. 1994), which affirmed the district

court's    judgment     granting    certain    of    the    defendants     "summary

judgment on the RICO claim against them for failure to show

relatedness and continuity . . . essentially for the reasons

given by the district court."           Id. at 1254.         The district court

opinion is reported as Jordan v. Berman, 792 F. Supp. 380 (E.D.

Pa. 1992).       Jordan is a complex case involving a controversy

between tenants and a landlord, the details of which I need not

discuss.     Germane here is the district court's conclusion that

the plaintiffs had not adduced "evidence from which one could

reasonably      find    a   pattern    of     racketeering        activity    under

prevailing case law."          Id. at 388.     The district court explained

the basis for its decision as follows:
               Few relationships in our society seem to
          engender more conflict than that of landlord
          and tenant. The aggressive landlord and the
          disgruntled    tenant   have   almost  become
          stereotypical.    The instant case involves a
          typical landlord-tenant dispute about the
          construction of a lease and what sums or
               services the respective parties are entitled
               to.   Permitting trash to accumulate for a
               day, disrupting utility service for half a
               day and vigorously pursuing a plausible
               contract interpretation are generally not the
               kind of things from which RICO cases are
               made.   The actions of defendants and their
               agents, however characterized, do not pose
               the type of significant societal threat that
               RICO was designed to deter or penalize.


Id. (emphasis added).          By affirming "essentially for the reasons

given     by    the   district    court,"   we     approved   the   foregoing

statement, even though the case involved the use of the mails and

thus, in theory, could have been a RICO case.

               If we substituted the relationship between partners for

the landlord-tenant relationship, the underscored language in the

above     quotation    would     describe   this    case.     Certainly   the

partnership relationship, like the landlord-tenant relationship,

is a frequent source of disputes.           The dispute in this case, to

quote from and to paraphrase Jordan v. Berman:
          involves a typical [partnership] dispute
          about the construction of a [partnership
          agreement] and what sums . . . the respective
          parties are entitled to. . . . The actions
          of defendants and their agents, however
          characterized, do not pose the type of
          significant societal threat that RICO was
          designed to deter or penalize.


Thus, this case is no more a RICO case than was Jordan.

               In coming to my conclusions I also have found it useful

to consider United States v. Pelullo, 964 F.2d 193 (3d Cir.

1992), a case which the majority cites and on which the Estate

relies.     Pelullo is a post-H.J. Inc. case in which we found that
a RICO violation could be proved based on a closed-ended scheme

that lasted 19 months.           In Pelullo, the defendant was a chief

executive officer of The Royale Group, Ltd., a publicly held

corporation which through subsidiaries acquired six hotels in

Miami Beach.        In June 1984, the hotels obtained a $13.5 million

loan from a subsidiary of American Savings and Loan Association.

Under the terms of the loan, $6.2 million was to be used for

renovation, with American retaining this portion and disbursing

the   funds    as   renovation      costs   were   incurred.           To    obtain    a

disbursement, Royale was required to submit draw requests which

set forth a certified itemization of the costs.

              The indictment charged Pelullo with three fraudulent

schemes:          (1)   defrauding     American,        Royale,        and   Royale's

shareholders by submitting false documents in connection with

certain    draw     requests;   (2)   defrauding    Royale        of    $114,000      by

diverting cash from one of its subsidiaries to repay a debt

Pelullo owed; and (3) defrauding Royale of approximately $500,000

by diverting money for uses other than for the purposes of the

loans.    Accordingly, the alleged number of schemes in Pelullo was

larger than the one scheme alleged here.                And while the number of

victims in Pelullo could be characterized as small, the nature of
the unlawful activity had a different ring to it, because in

Pelullo    the    alleged    perpetrator     was   an    officer       in    a   public

company and the main victims (American and Royale) were public

entities.        Moreover,    the   alleged   fraud      was   not      confined      to
Royale's internal operations, but took place in the context of

its normal external business operations.                Thus, even though the

Estate relies on Pelullo, that case involved much more than a

dispute   between      partners      and   does   not   support   the   Estate's

position.      Pelullo nevertheless is instructive to illustrate the

contrast between a real RICO case and the Tabas's dispute.

            While I do not suggest that a plaintiff alleging a

single fraudulent scheme injuring a single victim in the context

of a private dispute never can maintain a RICO claim, it would be

unusual for such a case to be covered by RICO, especially where

the alleged predicate acts are mail fraud.                  In reaching this

conclusion, I am cognizant that "RICO's pattern requirement does

not require the existence of more than one 'scheme,'" Marshall-

Silver, 894 F.2d at 596, and that the Supreme Court has declared

that the RICO statute should be read broadly "to reach both

'legitimate' and 'illegitimate' enterprises,"                Sedima, S.P.R.L.

v. Imrex Co., 473 U.S. 479, 499, 105 S.Ct. 3275, 3286 (1985).

Furthermore, I recognize that the Court has noted that civil RICO

appears to be "evolving into something quite different from the

original conception of its enactors," and that this problem is

for Congress, not the courts, to correct.                Id. at 499-500, 105
S.Ct. at 3287.         See also NOW v. Scheidler, 114 S.Ct. 798, 806

(1994).

            Yet our precedents clearly establish that Congress did

not   intend    RICO    to   cover    every   garden-variety      fraud.    See
Marshall-Silver, 894 F.2d at 597; accord Midwest Grinding Co.,

976 F.2d at 1025 ("[I]t is equally evident that RICO has not

federalized every state common-law cause of action available to

remedy business deals gone sour.").               Rather, the Supreme Court,

"by refocusing the pattern requirement on the sort of long-term

criminal     activity       that    carries    some    quantum    of     threat    to

society," Midwest Grinding Co., 976 F.2d at 1025, has attempted

"to prevent RICO from becoming a surrogate for garden-variety

fraud actions properly brought under state law," id, at 1022; see

also Marshall-Silver, 894 F.2d at 596-97 (noting that continuity

plays an important role in constraining operation of RICO statute

to    only   those     activities      which     threaten     societal      injury).

Moreover, the Supreme Court has confined the scope of RICO by

limiting the persons who can be liable under 18 U.S.C. § 1962(c).

See Reves v. Ernst & Young, 113 S.Ct. 1163 (1993).

             In   my   view,   the    majority's      opinion    inexorably       will

result in federalizing numerous internal business disputes in a

way that Congress never could have intended.                     The opinion as

applied in this circuit will lead attorneys to repackage as RICO

actions ordinary commercial controversies in which the parties

have communicated by mail or wire.              Indeed, it seems obvious that

the   principles       of    this    case     could   be    applied    to   routine

commercial disputes in many situations in which the parties have

been in an ongoing relationship, e.g., partnerships, tenancies,
employer-employee, service contracts, supply contracts, equipment
rentals, brokerage accounts, and others as well.   A party in such

a relationship, dissatisfied with the other party's performance,

will be able to establish RICO jurisdiction by alleging fraud and

pointing to the other party's numerous mailings in furtherance of

its understanding of the terms of the relationship.       For the

foregoing reasons, I dissent.   Chief Judge Sloviter,37 and Judges

Hutchinson, Scirica, Cowen, and Nygaard38 join in this dissent.




    37
     Judge   Sloviter   joins  with   the  following   statement.
Although I do not agree with every detail of Judge Greenberg's
dissent, I join it because it comes closest to expressing my
frustration that the analytic litany that the courts must now
conduct in civil RICO cases leads to a result, the federalization
of garden variety fraud, that is directly contrary to Congress's
expressed intent.
    38
     Judge Nygaard joins in the dissent, believing that the
district court properly granted summary judgment in favor of the
defendants.   He bases his conclusion that summary judgment was
proper, however, upon plaintiffs' failure to show facts giving
rise to mail fraud under RICO rather than upon a failure to
establish a pattern of racketeering activity.        Under Judge
Nygaard's analysis, the mailings here were, as in United States
v. Maze, 414 U.S. 395, 94 S.Ct. 645 (1974), merely post-fraud
means of transmitting matter from one place to another.     Judge
Nygaard believes that inasmuch as the fraud "had reached
fruition," at the time of the mailing, it cannot be said that the
mailings in question were for the purpose of executing the
scheme, as required by the statute. Kann v. United States, 323
U.S. 88, 65 S.Ct. 148 (1944). Hence, it was not "an essential
step" in the success of the fraud. Schmuck v. United States, 489
U.S. 705, 714, 109 S.Ct. 1443, 1450 (1989).
