United States Court of Appeals For the Seventh Circuit
RICO — sufficiency of the complaint
RICO is not violated every time two or more individuals commit one of the predicate crimes listed in the statute.
“The Fund’s reliance on Insurance Brokerage is inapt. For one thing, it is far from obvious that Walgreens could not have accomplished the drug-switching scheme on its own by simply purchasing expensive dosage forms from Par and other manufacturers (of which there were apparently several) and filling prescriptions with these expensive dosage forms on its own initiative. Moreover, in Insurance Brokerage, the defendants could not have achieved their goals—namely, fixing a competitive bidding process in order to win insurance contracts at inflated prices—without cooperation that fell outside the bounds of the parties’ normal commercial relationships. Companies competing for business in a legitimate market that assigns business through bidding do not disclose their bids to one another in advance. By contrast, while it is true that Walgreens does not make drugs and Par does not fill prescriptions, and that the two companies must therefore ‘cooperate’ in order for drugs to reach consumers, such cooperation describes virtually every prescription pharmaceutical distribution chain. The allegations in the complaint do not indicate how the cooperation in this case exceeded that inherent in every commercial transaction between a drug manufacturer and pharmacy, and without such an indication, we cannot find a basis for inferring that Walgreens and Par were conducting the enterprise’s affairs.”
Appeal from the United States District Court for the Northern District of Illinois, Der-Yeghiayan, J., Wood, J.