author: DILLIN, District Judge.

text:
    ELI LILLY AND COMPANY, Plaintiff, v. ENVIRONMENTAL PROTECTION AGENCY, Lee M. Thomas, Administrator, Environmental Protection Agency, Aceto Chemical Company, Inc., Defendants.
    No. IP 83-1862-C.
    United States District Court, S.D. Indiana, Indianapolis Division.
    July 26, 1985.

      J.B. King, Indianapolis, Ind., for plaintiff.
    Robert McLaughlin, Office of Gen. Counsel, U.S. E.P.A., Lawrence R. Liebesman, U.S. Dept. of Justice, Washington, D.C., for defendants EPA and Thomas.
    Gary K. Harris, Washington, D.C., George A. Rubin, Indianapolis, Ind., for Aceto.

       The Court notes the departure of William D. Ruckelshaus as Administrator of the EPA, hence the change in caption. Rule 25(d), F.R.CÍV.P.

   ENTRY

DILLIN, District Judge.

This cause is before the Court upon the motions of the Environmental Protection Agency (EPA) and the Aceto Chemical Company, Inc. (Aceto) to dismiss for lack of subject matter jurisdiction and for failure to state a claim upon which relief can be granted. For the following reasons, those motions are granted in part and denied in part.

Memorandum of Law

Eli Lilly and Company (Lilly) filed this lawsuit against Aceto, the EPA, and the EPA’s administrator. Lilly has alleged that this action arises under the Constitution of the United States and the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), 7 U.S.C. § 136 et seq., as amended. Lilly further alleges that this Court has jurisdiction over the subject matter of this case pursuant to 28 U.S.C. § 1331 and 7 U.S.C. § 136n(c).

The EPA and Aceto have sought to have this action dismissed through motions filed on May 21, 1985, and June 5, 1985, respectively. This Court is required to dismiss an action whenever it appears by suggestion of the parties, or otherwise, that the Court lacks jurisdiction of the subject matter. Rule 12(h)(3), F.R.Civ.P.

COUNT I

Count I of Lilly’s complaint alleges that the EPA, in issuing and maintaining registrations of certain pesticide products of Aceto, considered health, safety, and efficacy data submitted earlier by Lilly, without Lilly’s permission and without requiring Aceto to offer to compensate Lilly for the use of its data. Lilly also contends that the EPA considered previously submitted Lilly trade secret data in support of the pertinent Aceto registrations, without Lilly’s permission. Finally, Lilly alleges that the EPA relied on Lilly research data to issue and maintain the pertinent Aceto registrations without determining that the relevant Lilly and Aceto products are analytically comparable (i.e., identical or substantially similar or different only in ways that would not significantly increase the risk of unreasonable adverse effects on the environment). Lilly makes no constitutional challenges to FIFRA in this count of its complaint, but rather contends that the above alleged EPA actions violate the statute itself.

Of course, on a motion to dismiss, the factual allegations of the complaint are to be taken as true, the complaint being construed in the light most favorable to the plaintiff. Mathers Fund, Inc. v. Colwell Co., 564 F.2d 780, 783 (7th Cir.1977).

Subject Matter Jurisdiction

It is not enough for Lilly to rely simply on § 1331 to establish subject matter jurisdiction against the EPA as to this count; when consent to sue the United States is granted, the precise terms, conditions, and qualifications of such consent must be scrupulously followed. Coleman v. United States Bureau of Indian Affairs, 715 F.2d 1156, 1161 (7th Cir.1983). Consequently, Lilly. brings this suit also pursuant to 7 U.S.C. § 136n(c). The defendants characterize Lilly’s action as a “citizen suit,” and maintain that, as such, it must be dismissed.

Defendants are correct that, despite the apparently clear language of § 136n(c), private citizens, acting as such, may not bring direct actions against the EPA in order to seek enforcement of FIFRA. This is because Congress considered and explicitly rejected amendments which would have provided for classic “citizen suits,” including suits by private citizens against the EPA Administrator for failure to perform nondiscretionary duties or for failure to investigate and prosecute violations. Fiedler v. Clark, 714 F.2d 77, 79 (9th Cir.1983) (holding there to be no private right of action under FIFRA); see also In Re Agent Orange Product Liability Litigation, 635 F.2d 987, 991 n. 9 (2nd Cir.1980) (affirming district court determination that there is no private right of action under FIFRA), cert. denied, 454 U.S. 1128, 102 S.Ct. 980, 71 L.Ed.2d 116 (1981).

If Lilly were bringing this action only in its capacity as a private citizen concerned, as generally all citizens are, with the potential adverse environmental impact of certain pesticide misuse, then the action would have to be dismissed as a congressionally prohibited citizen suit. Lilly, however, is not bringing this suit as simply a private citizen, but rather as a FIFRA registrant. Such distinctions are not unknown to the law under FIFRA. In Kelley v. Butz, 404 F.Supp. 925, 940-41 (W.D.Mich.1975), the court distinguished between a group of private citizens and a state Attorney General acting for all of the people of Michigan, in exercising jurisdiction over a suit brought by the latter against the EPA under FI-FRA, despite the bar it recognized to exist against private citizen suits.

Without necessarily accepting the distinction made in Kelley, supra, we believe that a very clear distinction can, and must, be made between a suit brought by a private citizen (or group of citizens), and a suit brought by a registrant under the Act which seeks to enforce certain FIFRA provisions which uniquely concern that registrant, as a registrant.

Count I constitutes such a “registrant suit.” The issue now to be decided is whether a registrant suit, as opposed to a citizen suit, is permitted by FIFRA, or more specifically by § 136n(c).

The Court begins with the well settled principle that “the starting point for interpreting a statute is the language of the statute itself. Absent a clearly expressed legislative intention to the contrary, that language must ordinarily be regarded as conclusive.” Consumer Product Safety Comm’n v. GTE Sylvania, 447 U.S. 102, 108, 100 S.Ct. 2051, 2056, 64 L.Ed.2d 766 (1980). Section 136n(c) provides that: “The district courts of the United States are vested with jurisdiction specifically to enforce, and to prevent and restrain violations of, this subchapter.”

Based upon the plain wording of this statute, it would seem clear that this Court is vested with jurisdiction over Lilly’s Count I claims. It is so clear, in fact, that other courts, without substantive analysis, have exercised subject matter jurisdiction over suits brought by registrants which statutorily challenge certain EPA actions or inactions as violative of FIFRA. Amchem Products, Inc. v. G.A.F. Corp., 594 F.2d 470 (5th Cir.1979); Rohm & Haas Co. v. E.P.A., 525 F.Supp. 921 (E.D.Pa.), aff’d 651 F.2d 176 (3d Cir.1981); Mobay Chemical Corp. v. Costle, 447 F.Supp. 811, 814 n. 2 (W.D.Mo.1978), appeal dismissed, 439 U.S. 320, 99 S.Ct. 644, 58 L.Ed.2d 549 (1979), modified, 517 F.Supp. 252 (W.D.Pa. 1981), aff’d sub nom. Mobay Chemical Corp. v. Gorsuch, 682 F.2d 419 (3d Cir.), cert. denied, 459 U.S. 988,103 S.Ct. 343, 74 L.Ed.2d 384 (1982); Dow Chemical Co. v. Train, 423 F.Supp. 1359, 1363 (E.D.Mich. 1976).

However, in well argued briefs in this case, defendants urge that this Court lacks jurisdiction pursuant to § 136n(c) over this action, despite that provision’s apparent straightforward grant of subject matter jurisdiction. We have been persuaded to look beyond the face of the statute to determine if Lilly is jurisdictionally barred from pursuing its Count I claims in this action.

The Supreme Court has identified four factors which are relevant in determining whether a private remedy is implicit in a statute which does not provide one. Cort v. Ash, 422 U.S. 66, 95 S.Ct. 2080, 45 L.Ed.2d 26 (1975).

is the plaintiff “one of the class for whose especial benefit the statute was enacted,” ... ? [2] is there any indication of legislative intent, explicit or implicit, either to create such a remedy or to deny one? ... [3] is it consistent with the underlying purposes of the legislative scheme to imply such a remedy for the plaintiff? ... [4] is the cause of action one traditionally relegated to state law, in an area basically the concern of the States, so that it would be inappropriate to infer a cause of action based solely on federal law?

Id. at 78, 95 S.Ct. at 2088 (emphasis in original, citations omitted).

Lilly, as a registrant, is one of a class for whose especial benefit FIFRA was enacted. See e.g., S.Rep. No. 838, 92d Cong., 2d Sess., reprinted in 1972 U.S.Code Cong. & Ad.News 3993, 3998 (“Giving applicants proprietary rights in their test data will encourage applicants to spend the money necessary to test their products fully and assure their safety.”). Of course, it cannot be said that FIFRA was not also especially enacted for the benefit of all private citizens in general, including nonregistrants. Id. (“All of these provisions are designed to provide for tighter control of pesticide registration and use to insure protection to man and the environment.”) Just because all of mankind meets the first Cort factor, does not mean that pesticide registrants do not also meet it. In fact, this first factor may even be more favorably applied to FIFRA registrants because they constitute a much more particularized class than does “man.” At any rate, suits by private citizens have been prohibited under FIFRA primarily by the operation of the second Cort factor, to which we now turn.

Our review of FIFRA and its legislative history discloses no indication, either explicit or implicit, of an intention on the part of Congress to deny registrants under that Act a private remedy such as that sought in Count I of this action. Congress did reject a “citizen suits” amendment due, in great part, to its concern that such an amendment may encourage suits by professional litigants. See S.Rep. No. 838 (Supplement), 92d Cong.2d Sess., reprinted in 1972 U.S.Code Cong. & Ad.News 3993, 4023, 4060. Lilly is not such a professional litigant. Registrants register their products so that they may sell them, not in order to bring lawsuits against the EPA. The Agency’s concern, that environmental groups will register products under FIFRA so that they may sue under the Act, is misplaced. Initially, the cost would be prohibitive. Moreover, even if the Sierra Club did develop and register a pesticide effective against Johnson grass, it could only bring claims under § 136n(c) concerning issues unique to it as a registrant regulated by the statute. It would still not be able to bring suit alleging a generalized environmental grievance.

On the other hand, the legislative history does give some indication of a Congressional intent to permit registrant suits. In considering the 1975 amendments to FI-FRA, Congress noted the litigation arising from the “mandatory licensing” and trade secret provisions of that Act. S.Rep. No. 452, 94th Cong. 1st Sess. p. 9, reprinted in 1975 U.S. Code Cong. & Ad.News 1359, 1367. Of course, such litigation would concern and be brought by registrants. Despite its express knowledge of the existence of registrant suits, Congress did not amend that statute to preclude them, nor even informally indicate that they were improper.

At least one case in which a court explicitly exercised subject matter jurisdiction under § 136n(c) in a registrant suit alleging violations of FIFRA, was decided before the 1978 amendments to that Act. Dow Chemical Co. v. Train, 423 F.Supp. 1359, 1363 (E.D.Mich.1976). When Congress extended and otherwise amended FI-FRA in 1978, it did not see fit to amend § 136n(c) so as to prevent it from being so used as a basis for subject matter jurisdiction over registrant suits. Congress is presumed to be aware of a judicial interpretation of a statutory provision, and it can be inferred that it adopts that interpretation when it re-enacts a statute without changing the wording of that provision. See Merrill Lynch, Pierce, Fenner & Smith v. Curran, 456 U.S. 353, 382 n. 66, 102 S.Ct. 1825, 1841 n. 66, 72 L.Ed.2d 182 (1982). Congress in 1978, as it had been in 1972, supra, was expressly aware of lawsuits, such as Dow, that had been generated by FIFRA’s data consideration provisions. Thomas v. Union Carbide Agricultural Prod. Inc., — U.S. —, —, 105 S.Ct. 3325, 3329, 87 L.Ed.2d 409 (1985) (“The 1978 amendments were a response to the ‘logjam of litigation that resulted from controversies over data compensation and trade secret protection.’ ”), quoting S.Rep. No. 334, 95th Cong., 2d Sess. 3 (1977).

The second Cort factor, as the first, favors the maintenance of a registrant suit.

Thirdly, an action by a registrant seeking to compel the EPA to comply with the compensation and arbitration requirements of FIFRA is consistent with the underlying legislative purpose of those provisions. Through the FIFRA compensation and arbitration scheme, Congress has sought to encourage registrants to conduct the enormously expensive pesticide health, safety, and efficacy tests by assuring them of some control over the use of the data generated by those tests.

These provisions reflect Congress’ desire to provide registrants with some control over and protection of their data, while avoiding the creation of a complete monopoly for the original developer of the data. This registrant suit simply asks the EPA to enforce allegedly violated FIFRA provisions, which Congress set in place to encourage pesticide registrations, and the research that requires, by protecting registrants from undue financial and competitive injury. The Supreme Court has stated that “when the particular statutory provision invoked does reflect a legislative purpose to protect a competitive interest, the injured competitor has standing to require compliance with that provision.” Hardin v. Kentucky Utilities Co., 390 U.S. 1, 6, 88 S.Ct. 651, 654, 19 L.Ed.2d 787 (1968).

This Court believes that the FIFRA provisions, which Lilly claims in Count I to have been violated, were enacted to give FIFRA registrants certain absolute minimum protection of their data. Therefore, the maintenance of a registrant suit alleging the lack of a compensation offer, the misappropriation of trade secret data, and failure to make a determination of “analytical comparability,” is consistent with the underlying purposes of FIFRA’s legislative scheme within the meaning of the third Cort factor.

As to the fourth Cort factor, a registrant suit under FIFRA is clearly not one traditionally relegated to state law. Jurisdiction to enforce, prevent, and restrain violations of the Act is specifically vested in the district courts of the United States.

Based on all of the foregoing, included the plain wording of the instant statutory provision and the application of the factors of Cort v. Ash, supra, the Court holds that it has jurisdiction over Count I of this cause of action filed by Lilly, as a FIFRA registrant, under § 136n(c) of that Act.

Exhaustion of Administrative Remedies

Title 7 U.S.C. § 136n(a) states that: “Except as is otherwise provided in this subchapter Agency refusals to cancel or suspend registrations or change classifications not following a hearing and other final Agency actions not committed to Agency discretion by law are judicially reviewable in the district courts.” Defendants contend that because it is “Agency refusals to cancel or suspend registrations ...” that are “judicially reviewable in the district courts” under this provision, Lilly is required to administratively request the EPA to cancel or suspend the Aceto registration before its refusal to do so is possible, and judicial review thereof is then permissible.

Although defendants present well reasoned and plausible arguments in support of their position that certain administrative remedies are a prerequisite to a lawsuit jurisdictionally based upon § 136n(a), we need not consider them because this suit’s jurisdictional foundation is § 136n(c). As discussed, supra, Lilly, acting as a FIFRA registrant, may bring suit directly under § 136n(c), which neither explicitly nor implicitly requires any exhaustion of administrative remedies.

The Court notes that private citizens (other than registrants acting as registrants) apparently may bring suit under § 136n(a) to try to obtain the suspension or cancellation of a registration, given that they have exhausted their administrative remedies, if in fact any are required under that provision. See S.Rep. No. 838, 92d Cong., 2d Sess., reprinted in 1972 U.S. Code Cong. & Ad.News 3993, 4003 (Senate Agriculture and Forestry Committee describing this provision as one which “would authorize third parties to petition for cancellation or suspension and obtain judicial review.”); see also S.Rep. No. 838 (Supplement), 92d Cong., 2d Sess., reprinted in 1972 U.S.Code Cong. & Ad.News 4023, 4060 (Senate Agriculture and Forestry Committee indicating that availability of participation by third-parties in administrative procedures and judicial review obviates need for a “citizen suit” provision).

Defendants urge that we must dismiss Count I of Lilly’s complaint for failure to exhaust administrative remedies in light of the recent case of Merrell v. Thomas, 608 F.Supp. 644 (D.Or.1985). Even if we were bound to follow Merrell as precedent, which of course we are not, that case in no way detracts from our holding that Lilly has no administrative remedies it need exhaust prior to its bringing suit as a registrant.

Merrell, a Lincoln County, Oregon resident, brought an action to set aside the right-of-way use registrations of certain pesticides which, apparently, were about to be sprayed in Lincoln County. Id. at 645, 647. Judge Burns, in finding that Mr. Merrell had failed to exhaust his administrative remedies under FIFRA prior to commencing his action for cancellation or suspension of the registrations, stated: “If plaintiff has reason to believe that these pesticides may cause unreasonable adverse effects on the environment, he may petition the Administrator to cancel or suspend their registrations.” Id. at 647.

Merrell was clearly suing in his capacity as a private citizen. As such, he was required by the Oregon federal district court, quite correctly we believe, to comply with certain administrative procedures under § 136n(a). Lilly, however, when suing as a FIFRA registrant, may bring suit directly under § 136n(c) without having to exhaust any administrative remedies, as discussed, supra.

COUNT II AND AMENDED COUNT IV

In Count II of its complaint, Lilly challenges the EPA’s issuance and maintenance of the Aceto registrations (in alleged reliance upon Lilly’s health, safety, and efficacy data and without its permission) as being unlawfully predicated upon a statutory compensation procedure which, Lilly contends, denies a forum for adjudication of Lilly’s rights as required by Article III of the Constitution of the United States.

Amended Count IV alleges that Lilly was compelled either to agree to participate with, and make its data available to, Aceto under the provision of 7 U.S.C. § 136a(c)(2)(B), or to permit the EPA to use Lilly’s data in support of the Aceto registrations without compensation to Lilly. Lilly contends that § 136a(c)(2)(B) is unconstitutional in that its binding arbitration provisions are an impermissible intrusion upon the powers of the judiciary in violation of Article III of the United States Constitution.

The proper disposition of these counts has been made clear by the Supreme Court’s recent decision of Thomas v. Union Carbide Agricultural Prod. Co., — U.S. —, 105 S.Ct. 3325, 87 L.Ed.2d 409 (1985).

Lilly has alleged that its data has been considered in support of other registrations and that it is as of yet uncompensated for that use. Numerous follow-on registrations have been issued under the FIFRA data consideration procedures which are now in place. Under these circumstances, Lilly’s claims under these two counts are ripe. See Union Carbide, — U.S. at —, 105 S.Ct. at 3333. More importantly, Union Carbide upheld the constitutionality of FIFRA’s compensation and arbitration scheme under Article III. Id. at —-—, 105 S.Ct. at 3337-39 (page 24 of the slip opinion of this ease, containing the Court’s holding, was omitted from the United States Law Week report).

Because it now appears that Lilly can prove no set of facts in support of its claims under Count II and Amended Count IV, challenging the constitutionality of FI-FRA under Article III, which would entitle it to relief, these counts will be dismissed for failure to state a claim. See Stern v. United States Gypsum, Inc., 547 F.2d 1329, 1332 (7th Cir.1977), cert. denied, 434 U.S. 975, 98 S.Ct. 533, 54 L.Ed.2d 467 (1978).

AMENDED COUNT III

Lilly alleges in Amended Count III that, at the time EPA issued its registrations of Aceto Tech and Aceto EC (January 11 and November 14, 1973, respectively), Lilly was statutorily entitled to certain protections and compensation rights which were denied it by the EPA’s consideration of Lilly research data in support of the issuance and maintenance of the Aceto registrations. Specifically, Lilly contends that such use of its data by the EPA, without Lilly’s permission and without providing notice to Lilly of the consideration of Lilly data or the opportunity for a determination of a claim for compensation, is unlawful and constitutes a deprivation of property rights without due process of law in violation of the Fifth Amendment to the Constitution of the United States.

Initially, we note that Lilly’s constitutional challenges to the EPA’s alleged actions and inactions, as set forth in Amended Count III, are ripe for our consideration. The Due Process Clause of the Fifth Amendment requires that due process be afforded before an individual is deprived of property. Muscare v. Quinn, 520 F.2d 1212, 1215 (7th Cir.1975) (quoting Goss v. Lopez, 419 U.S. 565, 579, 95 S.Ct. 729, 738, 42 L.Ed.2d 725 (1975)). This is not the case, with the Fifth Amendment Taking Clause which requires only that compensation be rendered, but not necessarily before the taking occurs. Ruckelshaus v. Monsanto Co., — U.S. —, 104 S.Ct. 2862, 2880, 81 L.Ed.2d 815 (1984). Thus, while an action brought under the Taking Clause would be premature until the plaintiff has exhausted all avenues available to it for compensation, Monsanto, 104 S.Ct. at 2878, constitutional challenges to actions or inactions of the EPA brought under the Due Process Clause are ripe when the factual allegations of the complaint make it appear that the plaintiff may have been deprived of a property right without being afforded due process of law.

No successful constitutional challenge can be made by Lilly to the EPA’s use of Lilly research data which was submitted to the EPA by Lilly either prior to the 1972 FIFRA amendments or after the 1978 FI-FRA amendments.

Prior to the 1972 amendments, neither FIFRA nor any other provision of law guaranteed confidentiality to submitters of pesticide research data, or, for that matter, authorized the EPA to disclose such data. See Monsanto, 104 S.Ct. at 2876. Property rights in a trade secret are extinguished when a company discloses its trade secret to persons not obligated to protect the confidentiality of such information. Thomas v. Union Carbide Agricultural Prod. Co., — U.S. —, —, 105 S.Ct. 3325, 3335, 87 L.Ed.2d 409 (1985). Because Lilly thus had no property interest in any data it submitted to the EPA under FIFRA before the effective date of the 1972 amendments, Lilly can make no successful due process challenge to the EPA’s use of its research data submitted to the EPA prior to October 22, 1972 (the effective date of the 1972 amendments, Monsanto, 104 S.Ct. at 2876 n. 12).

Likewise, Lilly cannot claim that its research data, submitted to the EPA after the effective date of the 1978 FIFRA amendments (October 1, 1978, Monsanto, 104 S.Ct. at 2875 n. 10), are property of which it has been unconstitutionally deprived through the EPA’s use of it in support of other pesticide registrations. Lilly knew the makeup of the data consideration and data disclosure provisions of the 1978 amendments when it submitted research data to the EPA under them. Thus, Lilly has no legitimate expectation of entitlement to confidentiality in its research data, submitted after October 1, 1978, beyond that provided by the 1978 FIFRA amendments. Registrants who submit data with notice of the provisions established by the 1978 amendments, and its qualified protection of trade secrets, can claim no property interest under state law in such data. Union Carbide, — U.S. at —, 105 S.Ct. at 3335. Lilly’s voluntary submission of data in exchange for the economic advantages of a FIFRA registration cannot be called an unconstitutional deprivation of property. See Monsanto, 104 S.Ct. at 2876 (same circumstances do not constitute a “taking” under Fifth Amendment).

A different situation is presented by the research data submitted by Lilly under FI-FRA’s 1972 amendments (effective from October 22, 1972, to September 30, 1978). Under this scheme, Lilly was explicitly assured that the EPA would not disclose publicly, or consider in connection with the application of another, any data submitted by Lilly, if both Lilly and the EPA determined the data to constitute trade secrets. Monsanto, 104 S.Ct. at 2877. A registrant had much more control over the disclosure and use of its data under the 1972 amendments than it does now under the 1978 amendments. Compare FIFRA § 10, reprinted in 1972 U.S.Code Cong. & Ad. News 1158-59 with 7 U.S.C. § 136h.

Thus, if the EPA, consistent with the authority granted it by the 1978 FIFRA amendments, were now to disclose pre-1978 trade secret data or consider that data in evaluating the application of an applicant in a manner not authorized under the 1972 amendments, Lilly would be deprived of its legitimate expectation of control over the use and dissemination of the data it had submitted under the 1972 provisions. See Monsanto, 104 S.Ct. at 2878. Such disclosure or consideration of research data, to the extent such data are cognizable as a trade secret property right under Indiana law, see Monsanto, 104 S.Ct. at 2874, would constitute a “deprivation” of property:

The right to exclude others is generally “one of the most essential sticks in the bundle of rights that are commonly characterized as property.” ... With respect to a trade secret, the right to exclude others is central to the very definition of the property interest. Once the data that constitutes a trade secret is disclosed to others, or others are allowed to use that data, the holder of the trade secret has lost his property interest in the data. That the data retain usefulness for Monsanto even after they are disclosed ... is irrelevant to the determination of the economic impact of the EPA action on Monsanto’s property right lies in the competitive advantage over others that Monsanto enjoys by virtue of its exclusive access to the data, and disclosure or use by others of the data would destroy that competitive edge.

Monsanto, 104 S.Ct. at 2878 (emphasis added and citation and footnote omitted).

Therefore, at trial, Lilly will have the opportunity to establish that the defendants should be barred under the 1972 FI-FRA amendments from appropriating any trade secret data submitted by Lilly between October 22, 1972, and September 30, 1978.

Also, Lilly may seek to prove the factual allegations of this count as violative of FIFRA itself. For example, Lilly has alleged that the EPA considered Lilly’s research data in support of the issuance and maintenance of the Aceto registrations without providing notice to Lilly of such consideration. Such notification is effectively required by the statute. 7 U.S.C. § 136a(c)(l)(D)(ii) (registrant’s data may only be considered in support of an application if, inter alia, “the applicant has made an offer to compensate the original data submitter____”).

STATUTE OF LIMITATIONS

The defendants contend that even if Lilly is able to state any claims over which this Court would otherwise have subject matter jurisdiction, those claims would be time barred. In light of this challenge, it becomes important to review briefly the factual allegations of Lilly’s complaint which, of course, are to be taken as true on a motion to dismiss. Mathers Fund, Inc. v. Colwell Co., 564 F.2d 780, 783 (7th Cir. 1977).

Lilly obtained its first trifluralin registration in 1963 and has subsequently obtained a total of nine registrations for various trifluralin products. During the period between 1961 and 1983, Lilly has allegedly conducted substantial research on the health, safety, and efficacy of trifluralin to satisfy the requirements of FIFRA, and has submitted the resulting research data to the EPA to support applications for new trifluralin registrations or to maintain existing trifluralin registrations.

Lilly alleges that the EPA used Lilly research data to register two Aceto products known as Aceto Tech and Aceto EC. Aceto Tech was registered by the EPA on January 11, 1973, and Aceto EC was registered on November 14, 1973. No notice of the issuance of these Aceto registrations was given by the EPA and, impliedly, Lilly had no notice that its data were being used in support of the Aceto registrations. Lilly did subsequently learn of the Aceto Tech registration sometime before November 6, 1974, on which date it filed a compensation claim with the EPA for the Lilly research data relied upon by the EPA in support of the Aceto Tech registration. However, Lilly still did not know of the Aceto EC registration at that time.

In 1976 and 1977, the EPA sought to review and reregister all registered trifluralin products, and requested certain data from trifluralin registrants. Lilly complied with these requirements. On August 4, 1982, the EPA announced its final determination concerning the trifluralin-nitrosamine review. It stated that a notice of intent to cancel would be issued to any trifluralin registrant who did not, among other things, conduct certain tests and submit the resulting data to the EPA. All trifluralin registrants were informed of the various tests required. Lilly has complied, or is complying with all such requirements.

In August, 1983, pursuant to a Freedom of Information Act request, Lilly obtained documents from the EPA including an application for reregistration, dated March 12, 1976, and an offer of compensation, filed May 26, 1976, both filed with the EPA by Aceto in response to the trifluralin reregistration notice issued by the EPA in March, 1976. EPA had not published the filing of the application for reregistration in the Federal Register and had not sent, or required Aceto to send, the compensation offer to Lilly.

Title 28 U.S.C. § 2401(a) provides, in pertinent part, that: “Every civil action commenced against the United States shall be barred unless the complaint is filed within six years after the right of action first accrues.” This statute applies to the case at bar, as it does to every action brought in a United States district court, other than a criminal or an admiralty proceeding. Werner v. United States, 188 F.2d 266, 268 (9th Cir. 1951); see also Christensen v. United States, 755 F.2d 705, 707 (9th Cir. 1985) (§ 2401(a) applies to equitable, as well as legal, claims); Walters v. Secretary of Defense, 725 F.2d 107, 113 (D.C.Cir.1983) (legal and equitable claims are to be treated identically under § 2401(a)).

The EPA contends that Lilly’s right of action first accrued when the pertinent Aceto products were initially registered in 1973, thereby causing the statutory period to expire in 1979. Because this lawsuit was not filed until 1983, the EPA claims that it is time barred.

However, if a plaintiff is blamelessly ignorant of the existence or cause of an injury, the statute of limitations does not begin to run until the plaintiff discovers, or in the exercise of reasonable diligence should discover, the injury and its cause. See Stoleson v. United States, 629 F.2d 1265, 1269 (7th Cir.1980) (applying § 2401(b)). As noted supra, Aceto sought to rely on Lilly research data in support of its trifluralin reregistration application by submitting a compensation offer to the EPA, in 1976, but Lilly did not discover that its data were to be so used until August, 1983 when it obtained copies of such documents. Moreover, although Lilly knew in 1974 of the EPA’s use of its research data in support of the Aceto Tech registration, there is no indication that Lilly discovered the alleged misappropriation of its data with regard to Aceto EC six years before the filing of this cause of action. Applying the Stoleson discovery rule to these circumstances, the six-year statute of limitations apparently did not begin to run until at least August, 1983, so that Lilly’s complaint is timely as to those claims.

More importantly, regardless of when an injury is discovered the statute of limitations does not always begin to run at the first moment when a wrongful invasion of a protected interest might give rise to a cause of action. Cooper v. United States, 442 F.2d 908, 911 (7th Cir. 1971). The continuing wrongful conduct of the defendant toward the claimant which establishes a status quo of continuing injury may give rise to a continuing cause of action. Id. at 912. Where the wrong is continuing, the statute of limitations does not begin to run until the wrong is “over and done with.” Taylor v. Meirick, 712 F.2d 1112, 1118 (7th Cir.1983).

The statutory and constitutional injuries of which Lilly complains, like the alleged EPA wrongs upon which they are based, are of a continuing nature, so as to toll the operation of the statute of limitations in this case. In both Count I and Amended Count III, Lilly complains of EPA actions (and inactions) relating, not only to the initial issuance of the pertinent Aceto registrations, but also to the maintenance of those registrations.

Finally, we note that the continuation of a special relationship, offering the possibility of correction of the injury, may also postpone the running of the statute of limitations. Cooper, 442 F.2d at 912. The EPA’s relationship with pesticide registrants under FIFRA does not terminate after the initial registration. See, e.g., 7 U.S.C. § 136a(c)(2)(B) (EPA may require additional data to support an existing registration); 7 U.S.C. § 136d(b) (under appropriate circumstances the EPA may cancel or change the classification of a pesticide’s registration); 7 U.S.C. § 136k (EPA may issue “stop sale, use, removal, and seizure” orders when it has reason to believe that a pesticide is in violation of a FIFRA provision); 7 U.S.C. § 136f (EPA may inspect books and records of registrants); 7 U.S.C. § 136g (EPA may inspect establishments where pesticides are distributed and sold); 7 U.S.C. § 136d(a) and 40 C.F.R. § 162.-6(c)(1). At the end of each five year period, starting from the date of the initial pesticide registration, the EPA must cancel such registration unless, inter alia, it is determined that the registration complies with all FIFRA requirements, including all data requirements necessary for a new registration.

This special relationship under FIFRA between Lilly (as a registrant) and the EPA, in which that agency has rather broad authority, and responsibility, to correct the injuries of which Lilly complains, might also require the tolling of the statute of limitations.

At any rate, because this Court believes that the wrongful conduct which Lilly alleges is of a continuing nature, the EPA’s limitation of actions challenge to the complaint is rejected. Cooper, Meirick, supra.


source: Caselaw Access Project

author: SHADUR, District Judge.

license: Public Domain

text:
    UNITED STATES of America, Plaintiff, v. Eliberto ANAYA, Defendant.
    No. 84 CR 934.
    United States District Court, N.D. Illinois, E.D.
    July 26, 1985.

      Steven Miller, Asst. U.S. Atty., Chicago, Ill., for plaintiff.
    William H. Theis, Chicago, Ill., for defendant.
   MEMORANDUM OPINION AND ORDER

SHADUR, District Judge.

Eliberto Anaya (“Anaya”) has been charged in a 30-count superseding indictment (the “Indictment”) with violations of federal firearms laws. Each of the odd-numbered counts, charging a violation of 18 U.S.C. § 922(a)(6) (“Section 922(a)(6)”), alleges Anaya knowingly furnished false identification (bearing the name “Jose Ceja”) on a specified date in connection with the acquisition of a firearm from federally licensed firearm dealer R.H. Tasso (“Tasso”). Each even-numbered court, charging a violation of 18 U.S.C. § 924(a) (“Section 924(a)”), alleges Anaya knowingly made a false statement or representation of information (Anaya's true name) Tasso was required to maintain in his records under federal law. Anaya has now moved to dismiss all 30 counts of the Indictment. For the reasons stated in this memorandum opinion and order Anaya’s motion is denied.

Odd-Numbered Counts

Section 922(a)(6) makes it unlawful:

for any person in connection with the acquisition or attempted acquisition of any firearm or ammunition from a licensed importer, licensed manufacturer, licensed dealer, or licensed collector, knowingly to make any false or fictitious oral or written statement or to furnish or exhibit any false, fictitious, or misrepresented identification, intended or likely to deceive such importer, manufacturer, dealer, or collector with respect to any fact material to the lawfulness of the sale or other disposition of such firearm or ammunition under the provisions of this chapter.

Each odd-numbered count recapitulates the statutory language in conjunction with the bare factual allegation that Anaya furnished identification bearing the name “Jose Ceja” on a specified occasion. Focusing on the phrase “material to the lawfulness of the sale,” Anaya Motion To Dismiss Odd-Numbered Counts (“Odd-Numbered Mem.”) 2 argues the Indictment is insufficient because it does not “allege in what manner the true identity of Eliberto Anaya was material to the lawfulness of the various sales of firearms.” Anaya claims true identity is not a material fact in itself. Instead identity becomes material only if and when its misrepresentation effectively conceals a prior felony conviction, nonresidency in the state or some other condition the firearms law seeks to regulate.

That argument is founded in part on the notion Section 922(a)(6) was designed only to regulate access to firearms by certain classes of people. As the Supreme Court said in Huddleston v. United States, 415 U.S. 814, 824-25, 94 S.Ct. 1262, 1268-69, 39 L.Ed.2d 782 (1974):

The principal purpose of the federal gun control legislation, therefore, was to curb crime by keeping “firearms out of the hands of those not legally entitled to possess them because of age, criminal background, or incompetency.” S.Rep. No. 1501, 90th Cong., 2d Sess., 22 (1968).
* * * * * * *
Information drawn from records kept by dealers was a prime guarantee of the Act’s effectiveness in keeping “these lethal weapons out of the hands of criminals, drug addicts, mentally disordered persons, juveniles, and other persons whose possession of them is too high a price in danger to us all to allow.” 114 Cong.Rec. 13219 (1968) (remarks of Sen. Tydings). Thus, any false statement with respect to the eligibility of a person to obtain a firearm from a licensed dealer was made subject to a criminal penalty.

But of course the “principal purpose” of a statute is not the same thing as its entire purpose. Section 922(a)(6) was first enacted as part of Title IV of the Omnibus Crime Control and Safe Streets Act of 1968 (“Title IV”). S.Rep. No. 1097 (the “Report”), 1968 U.S.Code Cong. & Ad.News 2112, 2114 (emphasis added) defined the problem addressed by the firearms provisions of Title IV:

The ready availability; that is, ease with which any person can anonymously acquire firearms (including criminals, juveniles without the knowledge or consent of their parents or guardians, narcotic addicts, mental defectives, armed groups who would supplant duly constituted public authorities, and others whose possession of firearms is similarly contrary to the public interest) is a matter of serious national concern.

That passage makes it plain Congress, while concerned with the easy access of certain classes of people to firearms, was worried as well about the unregulated distribution of firearms throughout the population as a whole. Each time any person (though not a felon, juvenile or member of any other specifically mentioned group) purchases a firearm under a false identity, one more weapon is loose in the nation, untraceable by law enforcement authorities and available to resurface in the context of a violent crime or some other public disruption.

Reflecting that concern, the Report’s section-by-seetion commentary on Title IV states as to Section 922(a)(6) (1968 U.S.Code Cong. & Ad.News at 2203) (emphasis added):

This paragraph prohibits the making of false statements or the use of any deceitful practice (both knowingly) by a person in connection with the acquisition or attempted acquisition of a firearm from a licensee. To invoke the prohibition, the false statement or deceitful practice must be material to the lawfulness of the sale of the firearm under the provisions of the title. The requirement that one who obtains a firearm from a licensee must properly identify himself is inherent in this prohibition. This is strengthened by the recordkeeping provisions of sections 922(b)(5) and 923(d) as contained in the title.

That language was repeated in H.R.Rep. No. 1577, 1968 U.S.Code Cong. & Ad.News 4410, 4419 (dealing with the Gun Control Act of 1968, which amended, in ways not relevant to the issues in this case, the firearm provisions of Title IV). Congress’ statement expressly shows (1) the statutory prohibition against false or fictitious oral or written statements was meant to be invoked only if “material to the lawfulness of the sale” but (2) the requirement of proper self-identification was material by definition. Congress meant to require every person acquiring a firearm to identify himself or herself, and it sought to assure as much by making the failure to do so by itself a violation of the statute. To put it another way, Congress made identity per se material within the terms of Section 922(a)(6). By that means Congress sought to assure the accuracy—and the efficacy— of the records required to be kept under other provisions of Title IV. See United States v. Buck, 548 F.2d 871, 876 (9th Cir.1977) and United States v. Crandall, 453 F.2d 1216, 1216-17 (1st Cir.1972), both holding the illegality of a firearm sale without the seller’s recording of the buyer’s name perforce renders the misstatement of that name a “fact material to the lawfulness of the sale.”

While Congress thus clearly intended any supplying of a false name to be a violation of Section 922(a)(6), the draftsman was not as artful as might have been desired in implementing that purpose. Furnishing false identification is specifically addressed in the statute, as is the broader category of “false or fictitious oral or written statements]. ” That treatment reflects the distinction made in the legislative history. But the proscription against furnishing false identification is placed in the sentence in a way that might be read at odds with Congress’ goal: It appears to be modified by the phrase “with respect to any fact material to the lawfulness of the sale.” As a matter of normal English usage, that makes little sense. It is odd indeed to speak of furnishing false identification “with respect to” a material fact, while it makes perfect sense to speak of making a false statement “with respect to” such a fact. Nevertheless the provision as drafted is arguably susceptible to a reading that would require a distinct materiality showing as to misrepresented identity. That reading could cast doubt on the tautological analysis employed in such cases as Buck and Crandall.

True enough, “ambiguity concerning the ambit of criminal statutes should be resolved in favor of lenity.” Rewis v. United States, 401 U.S. 808, 812, 91 S.Ct. 1056, 1059, 28 L.Ed.2d 493 (1971). On the other hand Huddleston, 415 U.S. at 831, 94 S.Ct. at 1272 teaches (quoting American Fur Co. v. United States, 27 U.S. (2 Pet.) 358, 367, 7 L.Ed. 450 (1829)):

Although penal laws are to be construed strictly, they “ought not to be construed so strictly as to defeat the obvious intention of the legislature.”

To dismiss the odd-numbered counts of the Indictment on Anaya’s grounds would render clear congressional intent the hostage of arguably careless draftsmanship. This Court, like others before it, declines to do so. See Buck, 548 F.2d at 876; Crandall, 453 F.2d at 1216-17; and United States v. Gudger, 472 F.2d 566, 568 (5th Cir.1972) (declining to follow United States v. Benton, 329 F.Supp. 331, 332 (D.N.H.1971), the one case to accept an argument of the variety Anaya sets out here).

There may be another way to read Section 922(a)(6) to avoid doing violence either to Congress’ goal or to the statutory language. “Identification” can be a term broader than listing of one’s name. In that light, non-name misidentification might be illegal only if independently “material to the lawfulness of the sale,” while a false name would be per se material. This Court need not decide whether such a reading is a tenable one. Whether on that or any other construction, Anaya’s motion to dismiss the odd-numbered counts of the Indictment is denied.

Even-Numbered Counts

Section 924(a) provides:

Whoever violates any provision of this chapter or knowingly makes any false statement or representation with respect to the information required by the provisions of this chapter to be kept in the records of a person licensed under this chapter, or in applying for any license or exemption or relief from disability under the provisions of this chapter, shall be fined not more than $5,000, or imprisoned not more than five years, or both, and shall become eligible for parole as the Board of Parole shall determine.

Each even-numbered count of the Indictment charges Anaya falsely stated his name as “Jose Cejas” on a United States Treasury Form 4473, Firearms Transaction Record prepared in connection with his purchases of firearms. Anaya offers three grounds for dismissing the even-numbered counts:

1. Section 924(a) is merely a penalty section and does not itself create offenses separate from those for which it sets penalties.
2. Each count fails to allege a false statement, because it does not allege Anaya misstated his identity with an intent to defraud.
3. Each count fails to articulate why Anaya’s true identity was material information.

Each of those arguments will be considered in turn.

Anaya’s claim that Section 924(a) does not state an offense independent of Section 922(a)(6) flouts the disjunctive statutory language, which specifically imposes penalties for those who violate other provisions of the chapter or who knowingly make false statements with respect to information required to be kept in the records of a licensed dealer. In this instance, a glance at the legislative history confirms the sense derived from the statute itself. Section 924(a), the section-by-section discussion of the Report, states:

Provides penalties for violation, including false statements, of any provision of the title, or regulations issued thereunder.

In the face of those express references to false statements in connection with Section 924(a), no basis exists for concluding it does not create a distinct offense. See Dickerson v. New Banner Institute, Inc., 460 NS. 103, 106, 103 S.Ct. 986, 988, 74 L.Ed.2d 845 (1983); Buck, 548 F.2d at 876-77.

That conclusion is reinforced by a comparison of Section 924(a) with Section 922(a)(6). While the latter proscribes knowing false statements intended or likely to deceive made in connection with the acquisition of a firearm, Section 924(a) flatly prohibits any knowing false statement with respect to information in records maintained by dealers. It contains no express requirement that the false statement be intended to deceive. Section 924(a) therefore reaches a potentially broader range of conduct than Section 922(a)(6)—a fact indicating that the sections create distinct offenses. See United States v. Mongiello, 442 F.Supp. 835, 838 (E.D.Pa.1977). And much the same analysis extends to the materiality requirement, also included in Section 922(a)(6) but not in Section 924(a). See United States v. Sullivan, 459 F.2d 993, 994 (8th Cir.1972); Mongiello, 442 F.Supp. at 837-38.

It is not true, as Anaya intimates, that all conduct violating Section 922(a)(6) will necessarily constitute a violation of Section 924(a). For example, oral misrepresentations or other misrepresentations made to a dealer that do not find their way into the dealer’s required records may violate the former section but not the latter. But even if Anaya’s suggestion were correct as to the conduct with which he is charged, that fact would not compel the conclusion Ana-ya urges. Just last Term, Ball v. United States, — U.S. —, 105 S.Ct. 1668, 1671, 84 L.Ed.2d 740 (1985) held a defendant could be prosecuted simultaneously for receiving and possessing the same firearm under 18 U.S.C. §§ 922(h)(1) and 1202(a)(1) even though “proof of illegal receipt of a firearm necessarily includes proof of illegal possession of that weapon” (Ball, 105 S.Ct. at 1672, emphasis in original). Ball went on to hold, however, a defendant could be punished under only one of those statutes. If the Ball reasoning applies to the present case, all that follows is that even if Anaya’s alleged conduct were punishable under only one of Section 922(a)(6) and Section 924(a)—a question this Court does not purport to decide now—that would not preclude his prosecution under both.

Anaya’s second and third arguments are really just the converse of his first. If Section 924(a) does create a false statement offense, he contends, then the offense it creates is identical to the offense created by Section 922(a)(6)—down to the elements of intent and materiality. But the easy answer to that contention again focuses on the statutory language: Section 922(a)(6) expressly mentions intent and materiality, while Section 924(a) does not. That contrast creates the plain inference that Congress meant to omit the added elements from the latter section. Indeed, given the overall purposes of Title IV discussed earlier in this opinion, it is not at all surprising Congress should have chosen to create something approaching a strict liability offense in an effort to assure the effectiveness of its mechanism for tracking the movement of firearms through the nation.

Anaya’s effort to read an intent component into Section 924(a) raises one other issue. Anaya notes the common law does not punish as a falsehood the use of an alias in the absence of an intent to defraud. From that he concludes the failure to allege such intent in the even-numbered counts is effectively a failure to allege that his use of the name Jose Cejas constituted a false statement.

But of course common-law principles do not necessarily inform statute law, and especially not when those principles would contravene a clear purpose of the statutory scheme. As this opinion has noted more than once, Title IV was designed to put in place a registration scheme that would afford law enforcement officials some control over the distribution of firearms. Maintaining accurate records of gun acquisition is a cornerstone of that system, as a means of both tracking firearms and regulating their acquisition.

Both the statutory scheme and the legislative history render unavailing Anaya’s invocation of case law in the passport area, which does import a specific intent-to-defraud requirement. United States v. Wasman, 641 F.2d 326 (5th Cir.1981); United States v. Cox, 593 F.2d 46 (6th Cir.1979). Though counsel’s argument may get high marks for sheer ingenuity, in terms of the merits it is wholly unpersuasive toward the proposition that the federal firearm registration system, intended to lay down a traceable chain of ownership, could tolerate the free (though innocent) use of aliases.

As with the odd-numbered counts, the gossamer web of Anaya’s motion to dismiss the even-numbered counts of the Indictment breaks at several points. That motion too is denied.

Conclusion

Anaya's motions to dismiss both the even-numbered and the odd-numbered counts of the Indictment are wanting in merit. Each is denied.

      . Though some counts share the same date, each involves acquisition of a different firearm.

      . To his credit, Anaya’s appointed counsel, William Theis, Esq., does not essay any specious distinction of Buck. Instead he urges (Odd-Numbered Mem. 3 n. *) it is simply wrong.

      . This is not a misprint. Apparently the identification referred to in the odd-numbered counts was an Illinois gun owner’s card in the name "Jose Ceja," while Anaya filled out the buyer’s portion of Tasso's registration records as “Jose Cejas."

      . This opinion need not pause on the possibility Anaya’s conduct charged in the odd-numbered counts is different from that in the even-numbered counts (because the misrepresentations are "different,” see n. 3).

      . One response the United States makes to this point (Mem. 5-6) is that Illinois statutory law (and Illinois case law involving regulated industries) has changed the common-law doctrine. That line of argument, challenged at Anaya R.Mem. 2, would unnecessarily broaden the areas of analysis called for to decide this case. No opinion is expressed on those topics.


text:
    NORTHERN TRUST BANK/O’HARE, N.A. as Trustee, etc., Plaintiff, v. INRYCO, INC., et al., Defendants.
    No. 84 C 2077.
    United States District Court, N.D. Illinois, E.D.
    July 29, 1985.

      Arthur T. Susman, Michael P. Myers, Joseph, Susman & Myers, Chicago, Ill., for plaintiff.
    Stanley J. Parzen, Jonathan C. Medow, Mayer, Brown & Platt, Chicago, Ill., for defendants.
   MEMORANDUM OPINION AND ORDER

SHADUR, District Judge.

Northern Trust Bank/O’Hare, N.A. as Trustee under Trust No. 74 L 214 (“Trustee”) charges Inryco, Inc. (“Inryco”) and others violated 18 U.S.C. §§ 1964(c) and (d) (part of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. §§ 1961-1968), as well as state law, when they participated in a construction contract kickback scheme. Inryco now moves under Fed.R.Civ.P. (“Rule”) 9(b), 12(b)(1) and 12(b)(6) to be dismissed from the Complaint. For the reasons stated in this memorandum opinion and order, the motion is granted.

Facts

On October 22, 1979 Trustee contracted with Inryco for construction of a warehouse addition (the “Project”) in Franklin Park, Illinois (Complaint ¶ 11(a)). Inryco designated its employee Jerry Ranke (“Ranke”) as Senior Project Manager in charge of construction (¶ 11(b)). Ranke’s duties included soliciting bids from subcontractors and awarding subcontracts (¶ 3(b)).

Ranke and Inryco hired Century Concrete Construction Company (“Century”) to act as concrete subcontractor for the Project (¶ 11(c)). Ranke then worked out a kickback scheme with Century and its President Nat D’Angelo (“D’Angelo”). That scheme was implemented through a number of payments:

1. On November 19, 1979 Ranke issued a phony work order to Century in the amount of $35,049 (II 14(a)). Inryco released funds in that amount to Century, but Century never performed the specified work. On December 20 Century issued a $35,049 check to Ranke under the alias Tom Mann. Ranke converted the funds to his own use through a bank account he had established under the Mann name at First Bank and Trust Company of Palatine (“Palatine Bank”) (IMF 12(a), 14(c)).
2. Century and D’Angelo later tunneled three more kickbacks to Ranke (IT 15):
(a) July 1,1980 — $190,000
(b) October 27, 1980 — 20,840
(c) October 27, 1980 — 18,939
Each of those payments also took the form of a Century check made out to Mann and deposited in the Palatine Bank account (id.).

Century did not perform its work in accordance with the Project specifications (¶ 19(b)). Much of the concrete work was performed in an unworkmanlike manner (id.). Trustee charges Ranke is responsible for the defects because he either failed adequately to supervise the work or knowingly permitted Century to perform it in an unsatisfactory manner. Trustee alleges no other injury.

Inryco’s Contentions

In support of its motion Inryco asserts a congeries of flaws in the Complaint:

1. It fails to allege sufficient facts to permit a determination whether Trustee is the “real party in interest” (Rule 17(a)) and is hence the proper party to prosecute this action.
2. It alleges injuries not proximately caused by the claimed racketeering activity.
3. It improperly names Inryco as a RICO defendant, because Inryco was a victim of the fraud.
4. It fails to allege a proper “enterprise.”
5. It fails properly to allege Inryco conspired to violate RICO.
6. It fails to set out the alleged fraudulent activity with the specificity required by Rule 9(b).

This opinion will not treat with the first of those issues, which is the subject of no more than a footnote in the current briefing (Inryco Mem. 3 n. *) and plainly requires more substantial treatment. On the other hand, the Complaint’s deficient allegations of a “pattern” of racketeering—which were not discussed at all in the parties’ briefs—are dispositive of Inryco’s motion and mandate Inryco’s dismissal from the Complaint. Inryco’s other grounds will also be discussed briefly, against the possibility Trustee may be able to cure the “pattern” defect in the Complaint.

Lack of a Pattern of Racketeering Activity

Section 1962(c) renders unlawful the conduct, “though a pattern of racketeering activity,” of the affairs of an enterprise engaged in, or whose activities affect, interstate commerce. Sections 1962(a) and (b) define other RICO-prohibited activities, each of which also shares the common thread of a “pattern of racketeering activity.” Section 1961(1) defines “racketeering activity” as any of a large number of specified illegal acts, including “any act which is indictable under ... [18 U.S.C.] section 1341 (relating to mail fraud).” Finally, Section 1961(5) is the only RICO provision that speaks at all to the concept of a “pattern”:

“[P]attern of racketeering” requires at least two acts of racketeering activity, one of which occurred after the effective date of this chapter and the last of which occurred within ten years (excluding any period of imprisonment) after the commission of a prior act of racketeering activity.

At least until recently, commentators and courts have differed in their readings of “pattern” for RICO purposes. Some courts have taken the position that any two acts of racketeering by the same enterprise, no matter how unrelated, establish the requisite pattern. United States v. Weisman, 624 F.2d 1118, 1122-23 (2d Cir.), cert. denied, 449 U.S. 871, 101 S.Ct. 209, 66 L.Ed.2d 91 (1980); United States v. Bright, 630 F.2d 804, 830 n. 47 (5th Cir.1980). By contrast other courts, including our own Court of Appeals, have applied some such requirement of relatedness as this (United States v. Stofsky, 409 F.Supp. 609, 614 (S.D.N.Y.1973), aff’d on other grounds, 527 F.2d 237 (2d Cir.1975), cert. denied, 429 U.S. 819, 97 S.Ct. 65, 50 L.Ed.2d 80 (1976)):

[Racketeering acts must have been connected with each other by some common scheme, plan or motive so as to constitute a pattern and not simply a series of disconnected acts.

See United States v. Starnes, 644 F.2d 673, 677-78 (7th Cir.1981), which held acts taken in furtherance of a single criminal end are sufficiently related to satisfy the “pattern” requirement. Starnes, 644 F.2d at 678, like the same court’s earlier decision in United States v. Weatherspoon, 581 F.2d 595, 601-02 (7th Cir.1978), rejected the contention that constituent acts do not form a pattern unless they are performed in the course of separate criminal events.

In logical terms, such cases as Starnes and Weatherspoon were only partly right in fleshing out the concept of “pattern.” True enough, “pattern” connotes similarity, hence the cases’ proper emphasis on relatedness of the constituent acts. But “pattern” also connotes a multiplicity of events: Surely the continuity inherent in the term presumes repeated criminal activity, not merely repeated acts to carry out the same criminal activity. It places a real strain on the language to speak of a single fraudulent effort, implemented by several fraudulent acts, as a “pattern of racketeering activity.”

United States v. Moeller, 402 F.Supp. 49, 57-58 (D.Conn.1975) (emphasis in original) made precisely that point in urging both logic and RICO’s legislative history require a showing of similar racketeering acts occurring in different criminal episodes:

Three issues arise in considering whether Count 8 states an offense. The first is whether the statutory requirement of a “pattern of racketeering activity” is adequately alleged by an allegation of two acts that occurred in the course of a single criminal episode.
Were the question open, I would have seriously doubted whether the word “pattern” as used in § 1962(c) should be construed to mean two acts occurring at the same place on the same day in the course of the same criminal episode. While the statutory definition makes clear that a pattern can consist of only two acts, I would have thought the common sense interpretation of the word “pattern” implies acts occurring in different criminal episodes, episodes that are at least somewhat separated in time and place yet still sufficiently related by purpose to demonstrate a continuity of activity. I would further have thought that the normal canon of narrowly construing penal statutes points toward such an interpretation. Finally, I would have thought the legislative history made such an interpretation clear. Thus, the Senate Report explains:
The concept of “pattern” is essential to the operation of the statute____ The target of Title IX is thus not sporadic activity. The infiltration of legitimate business normally requires more than one “racketeering activity” and the threat of continuing activity to be effective. It is this factor of continuity plus relationship which combines to produce a pattern. S.Rep. 91-617, 91st Cong., 1st Sess. 158. (Emphasis added).

It is difficult to see how the threat of continuing activity stressed in the Senate Report could be established by a single criminal episode.

Moeller’s analysis was mere dictum. District Judge Newman was foreclosed from applying the rule he advocated because the Court of Appeals for the Second Circuit, like our own Court of Appeals, had previously ruled a pattern could be shown by acts constituting a single criminal transaction. United States v. Parness, 503 F.2d 430, 441-42 (2d Cir.1974), cert. denied, 419 U.S. 1105, 95 S.Ct. 775, 42 L.Ed.2d 801 (1975). But Moeller has now been vindicated, and such cases as Starnes and Parness have been vitiated by the Supreme Court's opinion in Sedima, S.P.R.L. v. Imrex Co., — U.S. —, 105 S.Ct. 3275, 87 L.Ed.2d 346 (1985).

To be sure, Sedima, 105 S.Ct. at 3285 n. 14 and 3287 also spoke in dictum. But its message was both plain and deliberate: Lower courts concerned about RICO’s expansive potential would be best advised to focus on the hitherto largely ignored “pattern” concept. As Sedima, 105 S.Ct. at 3287 put it:

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.”

And the flaw in other courts’ prevalent approach to that subject was their mistaken assumption that any two acts automatically spell out a pattern. Note 14 of Sedima quoted the selfsame language from the Senate Report as had Moeller, also to stress that a “pattern” cannot be established without “continuity plus relationship.” And note 14 emphasized the “continuity” point by stating more than once RICO is not aimed at the isolated offense:

As many commentators have pointed out, the definition of a “pattern- of racketeering activity” differs from the other provisions in § 1961 in that it states that a pattern “requires at least two acts of racketeering activity,” § 1961(5) (emphasis added), not that it “means” two such acts. The implication is that while two acts are necessary, they may not be sufficient. Indeed, in common parlance two of anything do not genérally form a “pattern.” The legislative history supports the view that two isolated acts of racketeering activity do not constitute a pattern. As the Senate Report explained: “The target of [RICO] is thus not sporadic activity. The infiltration of legitimate business normally requires more than one ‘racketeering activity’ and the threat of continuing activity to be effective. It is this factor of continuity plus relationship which combines to produce a pattern.” S.Rep. No. 91-617, p. 158 (1969) (emphasis added). Similarly, the sponsor of the Senate bill, after quoting this portion of the Report, pointed out to his colleagues that “[t]he term ‘pattern’ itself requires the showing of a relationship ____ So, therefore, proof of two acts of racketeering activity, without more, does not establish a pattern____” 116 Cong.Rec. 18940 (1970) (statement of Sen. McClellan). See also id., at 35193 (statement of Rep. Poff) (RICO “not aimed at the isolated offender”); House Hearings, at 665. Significantly, in defining “pattern” in a later provision of the same bill, Congress was more enlightening: “criminal conduct forms a pattern if it embraces criminal acts that have the same or similar purposes, results, participants, victims, or methods of commission, or otherwise are interrelated by distinguishing characteristics and are not isolated events.” 18 U.S.C. § 3575(e). This language may be useful in interpreting other sections of the Act. Cf. Iannelli v. United States, 420 U.S. 770, 789, 95 S.Ct. 1284, 1295, 43 L.Ed.2d 616 (1975).

It is profitable to focus the analysis by a fresh look at Weatherspoon in light of Sedima. In the former case, our Court of Appeals properly rejected (581 F.2d at 601) defendant’s argument that “there was only one ‘act’ of racketeering activity because all of the mailings which formed the basis for the mail fraud counts were in furtherance of a single scheme to defraud.” Weatherspoon parsed the statute and authorities to hold (again properly) the five mailings in furtherance of that single scheme, comprising five separate acts of mail fraud, were also five acts of “racketeering activity” (id. at 601-02). But it jumped the tracks when it elided the separate statutory requirement of a “pattern” by simply equating multiple acts with that requirement (id.):

As a consequence, she engaged in a “pattern of racketeering activity” within the meaning of 18 U.S.C. §§ 1961(5), 1962(c) because she committed two or more acts of “racketeering activity.”

That non sequitur will no longer wash, in light of Sedima’s proper emphasis on “pattern” as an independent component of a RICO claim under the plain language of the statute.

Sedima thus clearly creates a whole new ballgame. With such an unmistakable signal from the Supreme Court, this Court is no longer obligated to follow contrary Court of Appeals opinions. Although Trustee’s “pattern” allegations satisfied the approach taken in Starnes and Weather-spoon, they clearly fail to satisfy Sedima ’s “continuity plus relationship” formulation. Complaint 1110 states simply:

The pattern of racketeering activity in which defendants engaged includes two or more acts enumerated in 18 U.S.C. § 1961, including two or more acts of mail fraud as hereinafter described.

Complaint ¶ 16 then specifies two mailings that were made in connection with the Inryco-Century subcontract and the kickbacks to Ranke. Both logic and Sedima compel the conclusion that the two specified acts— Inryco’s mailing the subcontract to Century and Century’s mailing a kickback check to Ranke—fail to establish a “pattern of racketeering activity.”

This Court is itself normally loath to indulge in dictum. But in this case the prospect of Trustee’s possible repleading invites that treatment—and after all, in light of Sedima this Court could scarcely find itself in more respectable company. It merits observing that even if the three added kickback payments alleged in Complaint ¶ 15 involved the use of the mails, they still implemented the same fraudulent scheme as the first two mailings—and the single scheme does not appear to represent the necessary “pattern of racketeering activity.”

That prospect however is for the future. For the present, Inryco is plainly entitled to dismissal from Count I. Despite that dismissal, this opinion continues to deal briefly with other issues for the reasons already explained.

Proximate Causation

Section 1964(c) requires that a RICO plaintiff be injured “by reason of” a violation of Section 1962. Haroco v. American National Bank and Trust Co. of Chicago, 747 F.2d 384, 398 (7th Cir.1984), aff’d per curiam, — U.S. —, 105 S.Ct. 3291, 87 L.Ed.2d 437 (1985) explained the proximate cause requirement that language denotes:

This holding by no means renders superfluous the requirement in section 1964(c) that the plaintiff be injured “by reason of” a violation of section 1962. As we read this “by reason of” language, it simply imposes a proximate cause requirement on plaintiffs. The criminal conduct in violation of section 1962 must, directly or indirectly, have injured the plaintiffs business or property. A defendant who violates section 1962 is not liable for treble damages to everyone he might have injured by other conduct, nor is the defendant liable to those who have not been injured. This causation requirement might not be subtle, elegant or imaginative, but we believe it is based on a straightforward reading of the statute as Congress intended it to be read.

That reading was confirmed by the Supreme Court in Sedima, 105 S.Ct. at 3286 n. 15, and in its Haroco affirmance, 105 S.Ct. at 3292.

Inryco argues the Complaint fails to indicate such a causal nexus between the kickbacks and Century’s faulty concrete work. But on the current motion reasonable inferences must be drawn from the Complaint in Trustee’s favor, despite the anomaly of ascribing to Inryco a scheme that by definition took dollars out of its pocket. And from a perspective most favorable to Trustee, the realities of construction subcontracting support an inference the fraud contributed to Century’s poor workmanship.

Inryco’s profit as a general contractor depended directly on its ability to obtain subcontracted work from competent subcontractors for the lowest possible price. It is certainly reasonable to assume—in the absence of unusual circumstances such as bid-rigging (see n. 7)—Century’s successful bid represented a fair price for performing the concrete work required by Trustee’s specifications. And if that is so, Century’s having kicked back over a quarter of a million dollars to Ranke—a large sum whatever the size of the project—might well have depleted Century’s funds to the point where Century was unable to perform the concrete work either completely or properly. If it is assumed Inryco knew of the fraud, it must also be assumed it knew of that potential impact on Trustee.

Inryco’s Culpability (or Lack of It)

But because Trustee must now decide whether to reinsert Inryco (perhaps the only deep pocket among the defendants) into this lawsuit, a further word is in order. Precisely the same construction-world realities that—taken most favorably to Trustee—support an inference of proximate causation also militate against the possibility Inryco itself participated in the fraud. After all, as n. 7 reflects:

1. Inryco’s knowing acceptance of a padded bid by Century would amount to its deliberately handing over its profits to Century and Ranke—surely a preposterous suggestion.
2. Inryco’s knowing approval of kickbacks that would render Century financially incapable of workmanlike performance is equally remote. It is Inryco, not the subcontractors, that is contractually answerable to Trustee for any deficiencies in the construction work.

In short, it is far more logical (as Inryco urges) that Inryco was the principal victim rather than the perpetrator of the fraud. If so, Inryco would hardly appear to be an appropriate RICO defendant. Haroco, 747 F.2d at 400-01, specifically approving this Court’s analysis in Pames v. Heinold Commodities, Inc., 548 F.Supp. 20, 23-24 (N.D.Ill.1982).

In light of the current disposition on “pattern” grounds, no opinion is expressed here as to the overall legal sufficiency of Trustee’s seeking to hold Inryco liable under RICO via agency principles for Ranke’s acts of fraud. Again, though, the prospect of Trustee’s repleading in an effort to reinstate a claim against Inryco justifies a comment or two:

1. Respondeat superior is clearly an insufficient basis for liability under RICO. Parnés, 548 F.Supp. at 24 n. 9 is one of a number of cases so holding; and see Haroco, 747 F.2d at 401. Indeed Trustee Mem. 4 specifically acknowledges that.
2. Trustee’s “ratification” allegations (¶ 18(d)) and “recklessness” allegations (Ml 12(b) and (c) and 18(a) and (b)) are far too vague to support either of the agency theories proposed by Trustee (in an effort to retreat from its no-respondeat-superior admission).

It would unduly (and unnecessarily) lengthen this opinion to engage in further analysis of Inryco’s posture. Although other matters could be adduced, enough has been said to indicate Trustee and its counsel will be well advised to bear in mind their obligations under Rule 11 before they opt to include Inryco in an amended RICO complaint.

Conclusion

Count I’s RICO allegations fail to state a cause of action against Inryco. Accordingly Inryco must be dismissed from Count I, and in the exercise of this Court’s discretion it dismisses Inryco from the pendent state law claims. By definition such dismissal is without prejudice, but Trustee is cautioned to consider the caveats in this opinion.

      . All further references to RICO provisions will simply take the form "Section—."

        . As always with respect to a motion to dismiss, the well-pleaded factual allegations of the Complaint are taken as true, with all reasonable factual inferences drawn in Trustee's favor. Wolf oik v. Rivera, 729 F.2d 1114, 1116 (7th Cir.1984). That approach of course involves no actual findings of fact. As the text discussion will reflect, the term "well-pleaded” deserves special attention here.

      . All further references' to the Complaint will simply take the form “¶ —

      . Trust No. 74 L 214 is obviously a conventional Illinois land trust (¶ 1(b) alleges Trustee sues “not individually but solely as trustee under certain trust agreement known as Trust No. 74L214," the telltale language found in land trust contracts). Trustee signed the Inryco contract (¶ 11(a)), though as in all land trust transactions the beneficial owners (those entitled to the trust property’s earnings, avails and proceeds) are truly the “real parties in interest.” That poses at least the question whether a land trust agreement is an "express trust” for Rule 17(a) purposes, so as to permit Trustee to sue in its own name. No answer to that question is essayed by this opinion.

      . This Court had, before the Supreme Court spoke to the issue in the Sedima case discussed a bit later in the text, often cautioned counsel that for RICO purposes two mailings do not a "pattern” make, just as "One swallow never makes a summer,” Cervantes, Don Quixote, pt. 1, bk. 2, ch. 4 (though the original version, from Aristotle, Nichomachean Ethics I, spoke of "spring” rather than "summer”). In light of the stress Sedima places on the “pattern" issue, this Court addresses it here sua sponte.

      . Dismissal of Inryco from the RICO count—the only federal claim in the Complaint—would make it purely a pendent party as to the state law claims against it and the other defendants. Though that does not entirely foreclose the possibility of keeping Inryco in the case, see Bernstein v. Lind-Waldock & Co., 738 F.2d 179, 187 (7th Cir.1984), it must be recognized that the proof problems against Inryco on those state claims (closely related to what Trustee would have to prove to support RICO jurisdiction) are substantially more expansive than this Court would have to confront against the co-defendants. This Court therefore dismisses Inryco from the Complaint in its entirety. See United Mine Workers v. Gibbs, 383 U.S. 715, 726, 86 S.Ct. 1130, 1139, 16 L.Ed.2d 218 (1966).

      . There is no hint in the Complaint the overall construction contract figure was somehow inflated to accommodate the kickback component of the concrete subcontract (nor does it indicate whether there had been competitive bidding or a negotiated contract, or anything else about the letting of the contract). But whether or not the aggregate amount was inflated, Inryco apparently had the contract at a fixed price (the clear implication of ¶ 14(a)’s reference to an "extra work order"). Every dollar paid to Century and used for purposes other than legitimate construction (except to the extent if any the cost was passed on to Trustee as an "extra” approved by it) was a direct added cost to Inryco, reducing its retained amount covering overhead and profit. And it is at least equally bizarre to accept the notion Inryco, obligated as it was to deliver the completed Project in accordance with the plans and specifications, would deliberately create the likelihood that an important subcontract such as concrete work would be defective because money was siphoned off (to its knowledge) from legitimate construction to illegitimate kickbacks. We need not subscribe to the proposition that all men universally act as rational economic beings to recognize the unlikelihood of such self-inflicted wounds, which would both impoverish a general contractor and expose it to large claims by the property owner.

      . It is obvious that every assumption in this area is capable of cutting both ways in terms of Trustee’s claim. For purposes of the current analysis, the inference in the text is most favorable to Trustee.

      . Nothing in the Complaint suggests either the total Project price or the dollar amount of Century’s concrete subcontract.

      . Inryco’s position as a victim of the fraud casts considerable doubt—to say the least—on Trustee’s allegations Inryco conspired with and formed an "enterprise” with the other defendants.

      . Because this action remains pending against the defendants who appear clearly culpable (Trustee Mem. 2 advises Ranke and D’Angelo were indicted for mail fraud, pleaded nolo contendere and were sentenced), Trustee may have ample opportunity through discovery to conduct the “reasonable inquiry” mandated by Rule 11.

      . No opinion is expressed as to whether the "pattern" problem also infects Trustee’s claim against the other defendants. This Court has no way of knowing, for example, whether the kickback scheme was a sport or a regular way for Century and D’Angelo to do "business.”


text:
    Burton MORGAN and Margaret Morgan, Plaintiffs, v. BANK OF WAUKEGAN, et al., Defendants.
    No. 84 C 6251.
    United States District Court, N.D. Illinois, E.D.
    Aug. 28, 1985.
    Ditkowsky & Contorer, Chicago, Ill., for plaintiffs.
    Michael L. Sherman, Chicago, III, for defendants.
   MEMORANDUM OPINION AND ORDER

SHADUR, District Judge.

Margaret and Burton Morgan (“Morgans”) have sued a diverse group of defendants, seeking to ground federal jurisdiction in the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. §§ 1961-1968, and adding several pendent state claims. Various of the defendants have moved to dismiss the Third Amended Complaint (the “Complaint”) under Fed.R.Civ.P. (“Rule”) 12(b)(6). Because the fourth time has not proved the charm, the motion is granted.

This Court’s opinions normally begin with a statement of the facts. On Rule 12(b)(6) motions, the “Facts” section is invariably footnoted with the following statement or one much like it:

As always with respect to a motion to dismiss, the well-pleaded factual allegations of the Complaint are taken as true, with all reasonable factual inferences drawn in plaintiff’s favor. Wolfolk v. Rivera, 729 F.2d 1114, 1116 (7th Cir. 1984). That approach of course involves no actual findings of fact.

That task is really impossible here, for whatever else may be said of the Complaint, it is not “well-pleaded.” Morgans’ counsel has followed three earlier sprawling and unintelligible efforts at pleading a civil RICO cause of action with a current version that is little improved and does not permit of ready analysis.

This Court is of course fully aware of its responsibilities in reading a complaint under Hishon v. King & Spalding, 467 U.S. 69, —, 104 S.Ct. 2229, 2233, 81 L.Ed.2d 59 (1984) (reconfirming the principles of Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-02, 2 L.Ed.2d 80 (1957)). But Rule 8(a) still requires of a complaint “a short and plain statement of the claim showing that the pleader is entitled to relief,” modified only (where as here the heart of the Complaint lies in fraud charges) that “the circumstances constituting fraud ... shall be stated with particularity” (Rule 8(b)). See, e.g., Tomera v. Galt, 511 F.2d 504, 508 (7th Cir.1975). And lawyering is after all the job of the lawyer, not the Court, in the first instance. If a lawyer seeking to invoke civil RICO has difficulties with its statutory roadmap (referred to by Judge Posner in Sutliff, Inc. v. Donovan Cos., 727 F.2d 648, 652 (7th Cir.1984) as “constructed on the model of a treasure hunt”), he or she need only refer to a solid law review treatment that provides a checklist as to what must be alleged.

In this case this Court issued a short August 6, 1984 memorandum opinion and order dismissing the initial complaint and attempting to steer counsel in the right direction. Thereafter, loath to expend further effort in writing unless and until counsel restructured the complaint in manageable form, it has ruled orally—most recently dismissing the Second Amended Complaint and referring counsel to the then-brand-new law review article cited in n. 2 of this opinion. Yet counsel has still not provided any meaningful designation of the “enterprise” involved, and hence just how the charged “persons” are connected to that enterprise, in the manner required to state a Section 1964(c) cause of action based on a violation of Section 1962(a) or 1962(c).

That failure, plus a recognition of the proper division of labors between counsel and court, would be enough to send Morgans back to the drawing board. But a critical intervening event, the definitive ruling on other aspects of civil RICO by the Supreme Court in Sedima, S.P.R.L. v. Imrex Co., — U.S. —, 105 S.Ct. 3275, 87 L.Ed.2d 346 (1985), occasions this expansion on what has already been said to Morgans’ counsel more than once.

There is no gainsaying much of the federal judiciary has had a feeling of unease about the broad sweep of civil RICO. No other explanation suggests itself, for example, for the extraordinary tour de force in which the Court of Appeals for the Second Circuit (albeit in a group of sharply-split decisions) constructed such imaginary requirements as the one demanding a defendant to have been criminally convicted of a RICO violation as a prerequisite to liability under civil RICO—an aberration it took the Supreme Court to correct in Sedima. And that was only one of the manifestations of discomfort of federal judges at the notion Congress had, somehow unwittingly, created federal question jurisdiction over what had traditionally been state court preserves —“garden-variety fraud” implemented (as it would almost invariably be) by mailings or by interstate-commerce-connected telephone usage.

As often happens, the sense of disquietude—the nagging sense that something is wrong, though it is difficult to put a finger on just what—was sound, even though the perceived ailment was mistaken. Sedima, 105 S.Ct. at 3285 n. 14 and 3287 (though in dictum) supplied the clue that the courts had been mistaken in viewing two mailings—a necessary ingredient under Section 1961(5) of a “pattern of racketeering activity” violating Section 1962—as a sufficient condition to establish such a “pattern.” This Court has recently responded to the Supreme Court’s invitation for “the courts to develop a meaningful concept of ‘pattern’ ” (Sedima, 105 S.Ct. at 3287) in Northern Trust Bank/O’Hare, N.A. v. Inryco, Inc., 615 F.Supp. 828 (N.D.Ill. 1985), and it will continue to do so here.

As already stated, it is hard to decipher precisely what Morgans’ cause of action is when sought to be placed in the RICO matrix. But as best this Court can determine, Morgans’ claim is that somehow the 1978 sale to them of a 20% interest in what they call the “venture”—certain drug stores—was part of a plot to divest Morgans of both their initial cash investment and their home (put up as security for the loans obtained to provide further capital for the “venture”). If this Court assumes (as it must in its efforts to read the Complaint) all the alleged conspirators engaged in a single plot, though spread over several years from its hatching in 1978 to its coming to fruition in 1982, Morgans have not satisfied the “pattern of racketeering activity” requirement as articulated in Inryco, 615 F.Supp. at 831-33.

There may be one other possibility that has occurred to this Court, though it is not even hinted at in Morgans’ four efforts to state their claim. If the complained-of acts were somehow said to represent “repeated criminal activity, not merely repeated acts to carry out the same criminal activity” {id. at 831), thus perhaps meeting the “pattern” requirement, it would appear highly likely much if not most of the earlier activity would be outlawed by limitations. In any event Morgans cannot really have it both ways, and there is at least a substantial likelihood—judging by their performance to date—they may not have it either way, at least in federal jurisdictional terms.

Morgans’ RICO claim as asserted in the Complaint is accordingly dismissed. Because they have shown no ability to state such a claim despite repeated efforts, and because their other claims are wholly pendent, lacking an independent basis for federal jurisdiction, the entire Complaint and this action are accordingly dismissed. By definition such dismissal is without prejudice to Morgans’ right to pursue their claims in a court of competent jurisdiction.

      . All further references to RICO provisions will simply take the form "Section—."

      . One good source (though antedating the Supreme Court's Sedima decision referred to later in this opinion) is Miller and Olson, Recent Developments in Civil RICO, 8 Corp.L.Rev. 35 (1985).

      . This Court should hasten to add it does not number itself as part of that body of judges. Both in its large number of opinions in the field and in its lecturing and panel participation at civil RICO seminars and workshops, it has consistently expressed the view it is for Congress— not for courts via judicial legislation—to curtail the application of RICO if it were found too broad. Unless and until Congress acts, a literal application of the statute—neither niggardly nor overexpansive—has been and continues to be the proper judicial response.

      . This hypothetical assumption should not be mistaken for a holding to that effect. First, it is difficult (and really inappropriate) for this Court to essay such radical surgery, reconstructing what Morgans appear to have claimed from the outset of this litigation. Second, without knowing just what form that reconstruction might take, it is certainly not for this Court to render an advisory opinion on the “pattern" issue.

      . Though this Court has not yet spoken to the civil RICO limitations question (and this footnote is not intended to do so), counsel’s attention is called to Judge Hart’s decision in Electronic Relays (India) Pvt. Ltd. v. Pascente, 610 F.Supp. 648 (N.D.III.1985).