Appeal from the United States District Court for the Central District of California. D.C. No. CV-85-7197-JMI. James M. Ideman, District Judge, Presiding.
Before: James R. Browning, Arthur L. Alarcon and Thomas G. Nelson, Circuit Judges.
Plaintiffs Religious Technology Center and Church of Scientology International (CSI) [hereinafter collectively RTC] brought two suits against numerous defendants alleging violations of the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § 1962; the Copyright Act, 17 U.S.C. § 501(b); and state tort law. The cases were consolidated and referred to a Special Master who recommended dismissal of the so-called "Greene defendants." The district Judge issued an order adopting the Report and Recommendations of the Special Master. RTC appeals. We affirm.
The facts are briefly set out below. Additional background can be found in the opinion in an earlier appeal, Religious Technology Center v. Wollersheim, 796 F.2d 1076, 1077-79 (9th Cir. 1986).
Defendant Wollersheim was the plaintiff in a state tort action against the Church of Scientology California (CSC), an entity not a party to this appeal, for intentional infliction of emotional distress. The suit was ultimately successful. Defendant law firm of Greene, O'Reilly, Broilet, Paul, Simon, McMillian, Wheeler and Rosenberg, p.c., and individual defendants Leta Schlosser and Charles B. O'Reilly, were Wollersheim's attorneys. Defendants Richard Ofshe and Margaret Singer were expert witnesses who testified on Wollersheim's behalf. These are the "Greene defendants."
RTC, a Scientology affiliate, and CSI then filed this suit alleging that, during the prosecution of the state court action, Wollersheim's attorneys obtained copies of stolen religious scriptures from former members of the Scientology Church and gave them to Wollersheim's expert witnesses. RTC also alleged the defendants planned to reveal the contents of these scriptures, which are kept highly confidential by the Church of Scientology, to blackmail CSC into settling the Wollersheim state case. In addition, RTC alleged defendant O'Reilly sent an extortionate letter to CSC, a related corporation, threatening to disclose the contents of the scriptures unless he was paid $10 million.
This case was consolidated with an earlier suit filed against the persons who allegedly stole the religious scriptures. In due course, the district court issued an Order to Show Cause why the RICO and pendant state claims should not be dismissed and referred the case to a Special Master. Based upon the allegations of the complaint supplemented with RTC's detailed statement of the facts they relied upon in response to the order to show cause, the Special Master recommended, inter alia, that the Greene defendants be dismissed. The court adopted the Special Master's recommendation and entered final judgment in favor of the Greene defendants pursuant to Rule 54(b).*fn1
The Special Master recommended judgment for the Greene defendants on RTC's RICO claim*fn2 because RTC failed to allege: (1)an "enterprise"; (2) two predicate acts; or (3) a "pattern of racketeering activity." We do not reach the first two grounds of dismissal. We agree with the Special Master that appellants failed as a matter of law to allege a "pattern of racketeering activity" by the Greene defendants.*fn3
In H.J., Inc. v. Northwestern Bell Telephone Co., 492 U.S. 229, 106 L. Ed. 2d 195, 109 S. Ct. 2893 (1989), the Supreme Court held that to establish a "pattern of racketeering activity," plaintiff's allegations must show both that "the racketeering predicates are related, and that they amount to or pose ...