## Facts

- Telephone ratepayers sued Northwestern Bell Telephone Co. and others, including members and former members of the Minnesota Public Utilities Commission (MPUC), under the civil provisions of RICO.
- The MPUC was responsible for setting Northwestern Bell’s telephone rates in Minnesota.
- The complaint alleged that, from about 1980 to 1986, Northwestern Bell made repeated cash and in-kind payments to MPUC officials to influence rate approvals and obtain inflated rates.
- Plaintiffs alleged predicate acts including mail fraud and wire fraud, asserting these acts constituted a “pattern of racketeering activity” under RICO, 18 U.S.C. §§ 1961–1968.
- Plaintiffs sought injunctive relief and treble damages under 18 U.S.C. § 1962(a)–(d).

## Issues

1. What constitutes a “pattern of racketeering activity” under 18 U.S.C. § 1961(5), and does it require more than a single scheme?
2. Whether allegations of repeated predicate acts in furtherance of one scheme can satisfy RICO’s pattern requirement at the pleading stage.

## Decision

- The Supreme Court reversed the Eighth Circuit’s affirmance of dismissal and remanded.
- The Court rejected a categorical rule that a single scheme can never establish a RICO pattern.
- The Court held that a RICO pattern requires at least two predicate acts that are related and that amount to, or threaten, continued criminal activity.
- The Court directed the lower courts to assess the complaint under the clarified “relatedness plus continuity” standard rather than a “multiple schemes” test.

## Legal Principles

- Section 1961(5) sets a minimum of two predicate acts within ten years; it suggests that two acts may be necessary but not always sufficient to establish a “pattern.”
- A “pattern of racketeering activity” requires “continuity plus relationship.”
- Relatedness is shown when predicate acts share similar purposes, results, participants, victims, or methods of commission, or are otherwise interrelated and not isolated events.
- Continuity may be “closed-ended” (a closed period of repeated conduct over a substantial time) or “open-ended” (past conduct that, by its nature, projects into the future with a threat of repetition).
- Neither relatedness nor continuity requires proof that predicates furthered multiple distinct criminal schemes.

## Conclusion

The Court clarified that RICO’s pattern element turns on related predicate acts and continuity, not on whether the misconduct can be characterized as multiple schemes, and it remanded for application of that standard to the pleaded bribery-and-fraud allegations connected to utility rate-setting.


H.J. Inc. v. Nw. Bell Tel. Co., 492 U.S. 229 (1989)