court upheld the jury's award in response to the defendants'
post-trial motions for judgment as a matter of law under Fed R.
Civ. Proc. 50(a) or for a new trial under Fed. R. Civ. Proc. 59.
This appeal from the judgment and from the district court's order
denying the defendants' post-trial motions followed.
                               II.
          The defendants contend that Jaguar's RICO claims were
legally insufficient in that Jaguar failed to allege a violation
of  1962(c) by "persons" operating or managing a distinct
"enterprise."  Since this is a question of law, we exercise
plenary review.  See Lightning Lube, Inc. v. Witco Corp., 4 F.3d
1153, 1166 (3d Cir. 1993).  Section 1962(c) provides, in relevant
part:
          It shall be unlawful for any person employed
          by or associated with any enterprise engaged
          in, or the activities which affect, interstate
          or foreign commerce, to conduct or
          participate, directly or indirectly, in the
          conduct of such enterprise's affairs through a
          pattern of racketeering activity. . . .
18 U.S.C.A.  1962(c) (1984).
          It is uncontested, on appeal, that Royal Oaks conducted
"a pattern of racketeering activity" which affected interstate
commerce.  Given that  1962(c) requires conduct by a "person
employed by or associated with any enterprise," the issue is
whether Jaguar has alleged activity by both a person and an
enterprise.  "Person" includes "any individual or entity capable
of holding a legal or beneficial interest in property."  18
U.S.C.A.  1961(3) (1984).  "Enterprise" includes "any
individual, partnership, corporation, association, or other legal
entity, and any union or group of individuals associated in fact
although not a legal entity."  18 U.S.C.A.  1961(4) (1984).
                              A.
          This court first addressed  1962(c)'s requirement to
plead persons distinct from an enterprise in Hirsch v. Enright
Refining Co., 751 F.2d 628, 633 (3d Cir. 1984).  In Enright, a
jewelry manufacturer brought an action alleging fraudulent
misrepresentation and a corresponding violation of  1962(c)
against a lone defendant -- a corporation engaged in metal
refining.  In Enright we concluded that the defendant corporation
could not be liable under  1962(c) in that "the `person' subject
to liability cannot be the same entity as the `enterprise.'"  Id.
at 633.  Because the person charged with liability in Enright,
the corporate defendant, was "the same entity as the entity
fulfilling the enterprise requirement," we reversed the  1962(c)
RICO judgment in favor of the plaintiff.  Id. at 633.
          In Enright we articulated two grounds in support of our
holding.  The first was a literal reading of the statute: "the
language contemplates that the `person' must be associated with a
separate `enterprise' before there can be RICO liability on the
part of the `person.'"  Id.  The second ground was a belief that
Congress intended to limit RICO's application to preventing the
infiltration of legitimate organizations by criminal and corrupt
organizations: "[i]t is in keeping with that Congressional scheme
to orient section 1962(c) toward punishing the infiltrating
criminals rather than the legitimate corporation which might be
an innocent victim of the racketeering activity in some
circumstances."  Id.
          In Sedima v. Imrex Co., 473 U.S. 479, 105 S.Ct. 3275
(1985), the Supreme Court foreclosed Enright's second rationale.
          Instead of being used against mobsters and
          organized criminals, [RICO] has become a tool
          for everyday fraud cases brought against
          respected and legitimate enterprises.  Yet
          Congress wanted to reach both legitimate and
          illegitimate enterprises.  The former enjoy
          neither an inherent incapacity for criminal
          activity nor immunity from its consequences.
          The fact that [RICO] is used against respected
          businesses allegedly engaged in a pattern of
          specifically identified criminal conduct is
          hardly a sufficient reason for assuming that
          the provision is being misconstrued. . . . The
          fact that RICO has been applied in situations
          not expressly anticipated by Congress does not
          demonstrate ambiguity.  It demonstrates
          breadth.  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.
Id. at 499, 105 S.Ct. at 3286 (citation, internal quotation marks
and footnote omitted).  Thus, the Court's holding in Sedima
undermined the second basis of the Enright holding.
          This court, nonetheless, properly continued after
Sedima to apply a distinctiveness requirement, since Enright's
holding was also based on  1962(c)'s textual directive to allege
conduct by defendant "persons" operating an "enterprise."  Thus,
Enright's basic holding that "the `person' subject to liability
cannot be the same entity as the `enterprise,'" Enright, 751 F.2d
at 633, plainly survived Sedima.  See Glessner, 952 F.2d at 710
("The requirement of distinctiveness stems from the statute
itself, and has been applied following Sedima.");  Brittingham v.
Mobil Corp., 943 F.2d 297, 300 (3d Cir. 1991) ("[T]he plain
language of the statute provides that the person must be
`employed by or associated with' -- and therefore separate from -
- the enterprise . . . .");  Petro-Tech, Inc. v. Western Co., 824
F.2d 1349, 1359 (3d Cir. 1987) ("We explained in Enright that
 1962(c) was drafted in such a way that Congress must have
intended the `person' and the `enterprise' to be distinct
entities under that provision.").
          This court's post-Sedima jurisprudence, however, could
be described as following an oblique angle, which, with the
benefit of hindsight, appears unfortunate.  In defining the scope
of the distinctiveness requirement, our cases focused not on the
statutory rationale, but on a re-incarnation of the defunct
infiltrating racketeer rationale of Enright.  Since, under the
infiltrating racketeer rationale, legitimate corporations were
properly viewed as victims of the racketeering activity, we
reasoned that defendant persons needed to be associated with
another separate, illegitimate infiltrating enterprise.  In other
words, we concluded that a successful  1962(c) claim could not
allege conduct on the part of corporate officers and directors
acting through a legitimate corporate enterprise.  This
limitation on actions under  1962(c) was born of a pre-Sedima
"infiltrating racketeer" reading of RICO's legislative history,
which, as explained below, was clearly emasculated by the Supreme
Court in Reves and Scheidler.  Clear resolution of the issues
requires, however, that we briefly sketch our post-Sedima
jurisprudence.
          This jurisprudence began to diverge in Petro-Tech, Inc.
v. Western Co., 824 F.2d at 1359, where, relying on the
infiltrating racketeer legislative history cited in Enright, we
held that " 1962(c) was intended to govern only those instances
in which an `innocent' or `passive' corporation is victimized by
the RICO `persons,' and either drained of its own money or used
as a passive tool to extract money from third parties."  After
Petro-Tech, we continued to adhere to this limitation on
--- FMail/386 1.0g
(1:2629/124)
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