TORRUELLA, Chief Judge.
Plaintiffs-appellants, H.P. Leasing, Inc., and Patrick J. Doyle ("Doyle"), H.P. Leasing's
The district court dismissed the RICO claim and Counts I through VI as to defendants Hassenfeld, Oliva, and Thibodeau. Doyle v. Hasbro, 884 F.Supp. 35, 42 (D.Mass. 1995). In an order dated May 4, 1995, the claims against Israel and Miriam Laudon were also dismissed. The RICO claim against Hasbro was dismissed from the bench on March 27, 1995, see id. at 38-39, and Counts I, V, and VI were also dismissed as to Hasbro.
Plaintiffs' amended complaint alleges the following facts. In August and September 1980, plaintiffs met with Laudon, who agreed, on Hasbro's behalf, to retain the plaintiffs' services for hauling and delivering freight. In October 1980, Laudon required that Doyle pay to Oliva a "commission" of ten percent of the traffic charges billed by H.P. Leasing. Doyle acceded to Laudon's request, viewing the payments as a business expense that would ensure a consistent volume of business. Doyle was instructed by Laudon that receipt of the commissions was necessary for the continuance of the contracts. Early in the relationship, Laudon informed plaintiffs that business would increase and that additional tractor-trailers would be required. In reliance on these representations, plaintiffs purchased 28 tractors. The increase in business that materialized, however, did not merit such expansion.
As time went on, Oliva and Laudon reduced the volume of business sent to H.P. Leasing. Between 1982 and 1985, H.P. Leasing paid Laudon and Oliva commissions averaging $440,000 per year, but from 1990 to 1992, these payments averaged only $45,000.
Over the twelve years from 1980 to 1992, Laudon also forced Doyle to pay for yearly Christmas parties for Hasbro employees, to give gift certificates to Hasbro employees, to pay for personal vacations for Laudon and his wife, and to pledge $30,000 to the Holocaust Memorial. Doyle and his wife were personally contacted, harassed and threatened during the period. For example, Thibodeau, Laudon, and their wives would demand to be taken out to dinner. These demands were accompanied by comments such as "I own you" and "I can put you out of business and you won't have a house to live in." Laudon, Thibodeau and Hassenfeld worked closely together and were aware of each other's conduct.
In 1992, Laudon informed plaintiffs that H.P. Leasing ought to file for bankruptcy under Chapter 11 of the Bankruptcy Code. He promised that Hasbro would support H.P. Leasing with a minimum of $50,000 a week in revenue. Doyle felt he had no
In June 1992, Doyle stopped making commission payments to Laudon. Doyle perceived Hasbro's failure to award contracts to plaintiffs as a breach of the prior representations made to him. In November 1992, Doyle met with Hassenfeld, who directed that plaintiffs receive twenty to thirty thousand dollars per week in business. In January 1993, plaintiffs received $28,000 in business from Hasbro. On January 27, 1993, H.P. Leasing was closed for business.
II. STANDARD OF REVIEW
We review the motion to dismiss de novo. Aulson v. Blanchard, 83 F.3d 1, 3 (1st Cir. 1996). We accept as true "all well-pleaded factual averments and indulg[e] all reasonable inferences in the plaintiff's favor." Id. Dismissal under Federal Rule of Civil Procedure 12(b)(6) is appropriate if the facts alleged, taken as true, do not justify recovery. Id. The pleading requirement, however, is "not entirely a toothless tiger." The Dartmouth Review v. Dartmouth College, 889 F.2d 13, 16 (1st Cir.1989). "The threshold [for stating a claim] may be low, but it is real." Gooley v. Mobil Oil Corp., 851 F.2d 513, 514 (1st Cir.1988). In order to survive a motion to dismiss, plaintiffs must set forth "factual allegations, either direct or inferential, regarding each material element necessary to sustain recovery." Id. at 515. Although all inferences must be made in the plaintiffs' favor, this court need not accept "bald assertions, unsupportable conclusions, periphrastic circumlocutions, and the like." Aulson, 83 F.3d at 3.
In conducting our review of the case, we are limited to those allegations contained in the amended complaint. This is true both as to facts, see Litton Indus., Inc. v. Colón, 587 F.2d 70, 74 (1st Cir.1978) ("[O]ur focus is limited to the allegations of the complaint. The question is whether a liberal reading of [the complaint] can reasonably admit of a claim." (internal quotations omitted)), and as to arguments, see McCoy v. Massachusetts Inst. of Technology, 950 F.2d 13, 22 (1st Cir.1991) ("It is hornbook law that theories not raised squarely in the district court cannot be surfaced for the first time on appeal."). We, therefore, do not consider factual allegations, arguments, and claims that were not included in the amended complaint.
III. THE RICO CLAIMS (COUNT VII)
We begin by considering plaintiffs-appellants' claims under 18 U.S.C. §§ 1962(c) and (d). Section 1962(c) reads:
18 U.S.C. § 1962(c). Section 1962(d) states that "[i]t shall be unlawful for any person to violate any of the provisions of subsections (a), (b), or (c) of this section." Id. § 1962(d).
For the section 1962(c) claim to survive a motion to dismiss, the amended complaint must allege: "(1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity." Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 496, 105 S.Ct. 3275, 87 L.Ed.2d 346 (1985); see also Arzuaga-Collazo v. Oriental Fed. Sav. Bank, 913 F.2d 5, 5-6 (1st Cir.1990). "In addition, the plaintiff only has standing if, and can only recover to the extent that, he has been injured in his business or property by the conduct constituting the violation." Sedima, 473 U.S. at 496, 105 S.Ct. at 3285.
This court has held that under section 1962(c), "the unlawful enterprise itself cannot also be the person the plaintiff charges with conducting it." Arzuaga-Collazo, 913 F.2d at 6; see also Odishelidze v. Aetna Life & Casualty Co., 853 F.2d 21, 23 (1st Cir.1988) (per curiam); Schofield v. First Commodity Corp. of Boston, 793 F.2d 28, 29-30 (1st Cir.1986) (collecting cases). In order to succeed, therefore, the complaint must allege the existence of a "person" distinct from the "enterprise."
We must, therefore, determine if the amended complaint is sufficient to identify a
The amended complaint fails to distinguish any subset of the defendants in its section 1962(c) claim. Indeed, plaintiffs-appellants do not mention any defendant by name in paragraphs 61-63, in which the violation of section 1962(c) is alleged. Thus, although appellants' brief would have us believe that only Hasbro is a "person" for RICO purposes, the amended complaint does not, even under a generous reading, support this claim.
Although the amended complaint alleges the existence of an enterprise, id. at ¶ 62, it never squarely identifies one. It may be that a sympathetic reader could infer from the complaint that Hasbro was the alleged RICO enterprise; this reading might take support, for example, from the complaint's allegation that "[d]efendant, Hasbro, Inc., is civilly liable under [§ 1962(d)] for an agreement of its officers to conduct the affairs of the corporation in a manner which violates Section 1962(c) of the RICO Act." Id. at ¶ 64. However, the possibility that the plaintiffs considered Hasbro the "enterprise" is undermined by the complaint's repeated contention that Hasbro is a RICO "person." A RICO person cannot also serve as the RICO enterprise that the person is allegedly conducting in violation of section 1962(c). See Miranda v. Ponce Fed. Bank, 948 F.2d 41, 44-45 (1st Cir.1991); Arzuaga-Collazo, 913 F.2d at 6.
More importantly, the plaintiffs do not argue on appeal that Hasbro is the enterprise. Instead, they contend that their own company, H.P. Leasing, is the enterprise. We decline to rewrite the complaint language in order to find that plaintiffs sufficiently identified Hasbro as a RICO enterprise when plaintiffs do not even suggest as much on appeal. Rather, holding plaintiffs to their present position, we look to the complaint to see whether it can fairly be taken to bear the meaning that plaintiffs now ascribe to it.
Unfortunately, no reasonable reading of the amended complaint supports plaintiffs' current position that H.P. Leasing is the enterprise. The complaint's only mention of H.P. Leasing in connection with the RICO count appears to distinguish plaintiff H.P. Leasing from the enterprise controlled by defendants that allegedly caused H.P. Leasing injury. Amended Complaint ¶ 63 ("The facts provided ... above, allege a nexus between the control of said enterprise, the racketeering activity, and ultimately the injury to plaintiffs H.P. Leasing and Pat Doyle."). We add that there is no indication that plaintiffs' present position was ever advanced in the district court. Cf. McCoy v. Massachusetts Inst. of Tech., 950 F.2d 13, 22-23 (1st Cir.1991), cert. denied, 504 U.S. 910, 112 S.Ct. 1939, 118 L.Ed.2d 545 (1992).
The complaint's failure to identify any enterprise, distinct from a named person defendant, is fatal under RICO. But we think it worth adding, although we do not formally decide the point, that the claim appears remarkably weak in a quite different respect. To prevail under section 1962(c), a complaint must "establish a causal relationship between the racketeering predicates and [the] asserted injury." Miranda, 948 F.2d at 46-47. Here, if there had been no bribes, we have no reason to think that plaintiffs would have gotten any Hasbro business at all.
We conclude, therefore, that plaintiffs-appellants fail to meet the bare requirements of a RICO claim under sections 1962(c) and (d). Because we find that the RICO count must be dismissed for failure to state a claim, we need not address the other issues raised in plaintiffs-appellants' brief regarding the
IV. THE STATE LAW CLAIMS
Negligence (Count VI)
Count VI alleges "negligent entrustment or negligent supervision" by Hasbro. We will deal with the two claims separately.
The tort of negligent entrustment is normally used in cases in which a defendant has entrusted a motor vehicle to an incompetent driver, resulting in injury. See, e.g., Mitchell v. Hastings & Koch Enters., Inc., 38 Mass.App.Ct. 271, 647 N.E.2d 78, 82-84 (1995); Kunkel v. Alger, 10 Mass.App.Ct. 76, 406 N.E.2d 402, 407 (1980). The tort has also been applied to suppliers. A "supplier may be liable for harm caused after the supplier has knowingly placed property in the hands of an incompetent person." Kyte v. Philip Morris, Inc., 408 Mass. 162, 556 N.E.2d 1025, 1029 (1990).
Plaintiffs-appellants would have us apply the doctrine to the instant case. They have not offered, and our own research has failed to uncover, any cases from Massachusetts or elsewhere in this circuit, applying the doctrine to facts that resemble those at bar.
The question for this court, therefore, is whether we should expand the present reach of the tort of negligent entrustment, as used in Massachusetts, to include this case. To do so would require a novel use of the doctrine which we decline to adopt. The relationship between a firm and its employees is very different from the relationships usually at issue in negligent entrustment cases. The latter normally involve a parent or other adult entrusting a minor or incompetent person with a motor vehicle or some other instrumentality. "An action for negligent entrustment involves a person's duty to keep a dangerous instrumentality out of a child's reach." Id. 556 N.E.2d at 1036. While it may be possible to point to similarities between the current application of the doctrine and the one advocated by plaintiffs-appellants, we believe that the differences are much more striking.
Furthermore, plaintiffs-appellants offer no convincing argument showing why the application of the doctrine in this context would be desirable. Indeed, their brief offers no reasons whatsoever why this court should extend the doctrine. Because the question before us is one of state law, we must exercise considerable caution when considering the adoption of a new application. "[A]s a federal court hearing this state law issue under our supplemental jurisdiction, we are reluctant to extend [state] law beyond its well-marked boundaries." Andrade v. Jamestown Housing Auth., 82 F.3d 1179, 1186-87 (1st Cir.1996) (citations omitted). Without a powerful argument for the extension of the doctrine, we are, therefore, unwilling to apply the doctrine of negligent entrustment in a novel fashion.
For the above reasons, we affirm the dismissal of plaintiffs-appellants' negligent entrustment claim.
We now turn to the negligent supervision claim. The district court found that plaintiffs-appellants failed to provide any case law suggesting that the doctrine of negligent supervision reaches the instant case. Doyle, 884 F.Supp. at 42. We need not decide that issue here, however, because the claim fails on other grounds. The plaintiffs-appellants' theory on appeal is that "had plaintiffs been dealing with competent, responsible and honest Hasbro employees, H.P. Leasing would have simply shipped goods, made a profit, and there would be no issues to litigate." Appellants' Brief at 36. This theory, however, is contradicted by the amended complaint, which alleges that the commissions, or kickbacks, were paid within a month or two of the start of the relationship between the parties and that plaintiff
For the foregoing reasons, we affirm the dismissal of Count VI.
Fraud, Deceit, and Misrepresentation (Count V)
Count V of the complaint alleges that the conduct of defendants Laudon, Thibodeau, Hassenfeld and Hasbro constituted "fraud, deceit and misrepresentations." Amended Complaint at ¶ 54. In order to state a claim for fraudulent misrepresentation, the plaintiff must allege:
With respect to Hassenfeld, plaintiffs allege that in November 1992, he "directed that plaintiffs receive $20,000.00 to $30,000.00 per week in business from the defendant, Hasbro, Inc." Amended Complaint ¶ 37. Hassenfeld also promised that Doyle's son, the owner of a contract carrier in the State of Washington, "would be taken care of and would continue to do business with Hasbro." Amended Complaint ¶ 41. In both cases, the complaint suggests that Hassenfeld's comments were "an effort to right the wrong done to plaintiffs," amended complaint ¶ 37, or to "make amends," amended complaint ¶ 41.
Several of the required elements of common law fraud are absent from these allegations. First, there is no allegation that Hassenfeld's statements were knowingly false. In fact, the complaint states that the promises were an "effort to right a wrong done to plaintiffs," suggesting that Hassenfeld intended to keep these promises. Second, there is no allegation that the statements were made with an intent to deceive. Finally, neither reliance nor injury is alleged.
The district court also dismissed the claims of fraud against Laudon and Thibodeau. Because plaintiffs-appellants have failed to argue for the reversal of these dismissals on their appeal, we do not review them here.
There remains the questions of whether plaintiffs have claimed that defendants Hassenfeld, Thibodeau, and Oliva were part of a larger conspiracy to defraud and whether a claim of fraud is made against Hasbro. The district court ruled that "the conclusory allegations throughout the amended complaint are insufficient under Fed.R.Civ.P. 9(b)'s strict requirement that fraud be pled with particularity." Doyle, 884 F.Supp. at 41. Appellants respond that notice is the principal purpose of any pleading, including fraud, and Rule 9(b) "does not require the claimant to set out in detail all of the facts upon which he bases his claim, nor does it require him to plead detailed evidentiary matters." Collins v. Rukin, 342 F.Supp. 1282, 1292 (D.Mass. 1972).
There is a well-developed body of case law surrounding the application of Rule 9(b) in this circuit.
Rule 9 imposes a heightened pleading requirement for allegations of fraud in order to give notice to defendants of the plaintiffs' claim, to protect defendants whose reputation may be harmed by meritless claims of fraud, to discourage "strike suits," and to prevent the filing of suits that simply hope to uncover relevant information during discovery. See McGinty v. Beranger Volkswagen, Inc., 633 F.2d 226, 228-29 & n. 2 (1st Cir.1980).
In McGinty, this court stated that "[t]he clear weight of authority is that Rule 9 requires specification of the time, place, and content of an alleged false representation, but not the circumstances or evidence from which fraudulent intent could be inferred." Id. at 228. "[M]ere allegations of fraud, corruption or conspiracy, averments to conditions of mind, or referrals to plans and schemes are too conclusional to satisfy the particularity requirement, no matter how many times such accusations are repeated." Hayduk v. Lanna, 775 F.2d 441, 444 (1st Cir.1985) (citations omitted).
We agree with the district court that the allegations of conspiracy included in the amended complaint are insufficient to satisfy the requirements of Rule 9(b). The complaint simply states that the defendants:
Amended Complaint ¶ 24. Elsewhere in the Amended Complaint, these conclusory allegations are repeated: "defendants worked together to shut down H.P. Leasing," Amended Complaint ¶ 28; "all defendants were suddenly acting to terminate H.P. Leasing," Amended Complaint ¶ 38. The amended complaint includes no specification of the time, place, and content of an alleged false representation as required by McGinty. In addition, no claim can survive as against Hasbro in light of the fact that no claim has been made against any of the other defendants through whom Hasbro could act.
Because the plaintiffs-appellants have failed to meet the requirements of Rule 9, we affirm the district court's dismissal of Count V as against Hassenfeld and Hasbro.
Breach of Contract (Count I)
In order to sustain Count I's breach of contract claim, plaintiffs must plead: (1) that the parties had an agreement supported by valid consideration; (2) that plaintiffs were ready, willing and able to perform; (3) that defendant's breach has prevented them from performing; and (4) that plaintiffs were damaged. See Singarella v. City of Boston, 342 Mass. 385, 173 N.E.2d 290, 291 (1961); Petricca v. Simpson, 862 F.Supp. 13, 17 (D.Mass.1994). Plaintiffs-appellants are mistaken in their belief that they "need no more than to allege that the facts [demonstrate a] breach of that contractual relationship." Appellants' Brief at 40. "[I]t is essential to state with `substantial certainty' the facts showing the existence of the contract and the legal effect thereof." Pollock v. New England Tel. & Tel. Co., 289 Mass. 255,
The amended complaint fails to state the nature of the alleged contract with any specificity. There is no presentation of the terms of a contract, its duration, or even when it was formed. Nor does the Amended Complaint explain what obligations were imposed on each of the parties by the alleged contract. It does not plead that plaintiffs were ready to perform under the contract or that the defendants' breach prevented them from performing, and it does not identify the damages attributable to the breach. Conclusory statements that "Hasbro and its executives failed to meet their contractual requirement," amended complaint ¶ 34, are insufficient to satisfy the pleading requirements.
Because appellants have failed to state a claim for breach, we need not address the argument made in their brief that the alleged contract was, in fact, an at-will employment contract and that it was breached in bad faith. Nor do we address the question of whether the individual defendants are shielded from liability on the ground that an agent for a disclosed principal cannot be personally liable for the principal's conduct. See Doyle, 884 F.Supp. at 39.
For the foregoing reasons, we affirm the dismissal of the breach of contract claim.
Intentional Infliction of Emotional Distress (Count IV)
Count IV of the amended complaint alleges a claim of intentional infliction of emotional distress against Laudon, Oliva, and Thibodeau.
We agree with the district court that "[a]ssuming the truth of all the allegations in the amended complaint, the conduct complained of does not as a matter of law amount to extreme and outrageous behavior beyond all possible bounds of decency and which are utterly intolerable in a civilized community." Doyle, 884 F.Supp. at 40 (citations omitted). "Nor has Doyle even attempted to plead severe distress of a nature that no reasonable [person] could be expected to endure it." Id. Accordingly, we affirm the dismissal of the claim of intentional infliction of emotional distress.
Interference with Advantageous Business Relationships (Count III)
Count III of the amended complaint alleges "intentional and malicious interference with the plaintiffs' advantageous business relationships" against Laudon, Oliva, and Thibodeau.
Implicit in the above requirements for intentional interference in a business relationship is that the relationship be lawful. See Chemawa Country Golf, Inc. v. Wnuk, 9 Mass.App.Ct. 506, 402 N.E.2d 1069, 1072 (1980) (requiring that the complained-of acts be "calculated to cause damage to the plaintiffs in their lawful business" (emphasis added)). Plaintiffs-appellants argue that defendants-appellees interfered with a business relationship that consisted of allegedly unlawful kickbacks in exchange for business. As such, the business relationship in question was not lawful, and plaintiffs cannot recover on their claim.
Accordingly, we affirm the district court's dismissal of Count III against Laudon and Thibodeau.
For the reasons discussed herein, we affirm the district court's dismissal on all claims appealed by plaintiffs-appellants: the RICO count against all defendants, Count I against all defendants, Counts III and IV against Laudon and Thibodeau, Count V against Hasbro and Hassenfeld (and noting that plaintiffs-appellants failed to raise the liability of Laudon and Thibodeau), and Count VI against Hasbro.
Finally, we note that plaintiffs-appellants have filed an overly long brief. Although the brief is less than the permissible fifty pages, it is not double spaced as required, Fed.R.App.Proc. 32(a), making the effective length of the brief considerably longer. Additionally, we are able to find no reason for the length of the brief. Despite the extra length, the brief failed to adequately present the claims of appellants or even to clearly identify the claims being appealed. See In re M.S.V., Inc., 892 F.2d 5, 6 (1st Cir.1989) ("[W]hether or not we grant permission to file an overly long brief, we may assess special costs if we subsequently conclude that the extra length was unnecessary and did not help."). "We believe it appropriate to discourage the filing of excessively long briefs in this court," id., and we believe it appropriate to discourage parties from attempting to flaunt the page limits by submitting briefs with improper line spacing. Accordingly, we assess double costs against appellants.