Thorough Preparation is the Key
I always emphasize the need for thorough preparation in any lawsuit, but extreme preparation by both the plaintiff and the defendant is the gold standard in a RICO case.
Sometimes it’s difficult to “get the goods” on a potential RICO defendant without the discovery tools available after the lawsuit is filed. So, in the words of Tony Soprano – “Whatta ya gonna do?” The answer: File the lawsuit as soon as you have enough evidence to bring a case for breach of contract, breach of statutory or fiduciary duties, minority shareholder oppression, or any other civil claim that does not require more than notice pleading. If you have enough evidence to plead fraud with particularity as required by F.R.C.P 9(b), or the state rule equivalent, then plead fraud too.
Once the case is filed implement your discovery plan designed to find the evidence you need to support a RICO claim. When you have the evidence, file a motion for leave to amend to add the RICO claim. In some cases, you may be able to amend to add punitive damages too. Although the court decisions are not consistent, the availability of punitive damages in a RICO case depends on whether the court views the purpose of treble damages as remedial or punitive. The U.S. Supreme Court has held that RICO is primarily remedial and only secondarily punitive. Nevertheless, some commentators have suggested that even where punitive damages are recoverable, they must be reduced by the amount that the actual damages were trebled. Talk about awesome leverage – nothing beats a case with the potential for treble damages, punitive damages and recovery of substantial costs and fees – none of which are dischargeable in bankruptcy.
