S. Scott Smith, Eula Compton, Plaintiffs-appellants, v. Carteret Savings Bank, Fa, Defendant-appellee, 946 F.2d 899 (9th Cir. 1991)

MEMORANDUM^** 

The district court dismissed Smith's and Compton's action under RICO, 18 U.S.C. § 1962(a) for failure to state a claim and to plead their allegations of fraud with the specificity required by Fed. R. Civ. P. 9(b). We do not disagree that the complaint insufficiently alleges a pattern of racketeering activity, since it is unclear what are the predicate acts of racketeering, whether they are related, and whether they have continued over time or threaten to do so. See H.J., Inc. v. Northwestern Bell Tel. Co., 492 U.S. 229, 109 S. Ct. 2893, 106 L. Ed. 2d 195 (1989) (discussing the parameters of RICO's "pattern" requirement). Leave to amend, however, should have been given, since no such opportunity has previously been afforded to plaintiffs, so that they might correct the deficiencies in the complaint. Schreiber Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d 1393, 1401 (9th Cir. 1986).

We need not resolve the final issue, whether Smith and Compton can state a claim for relief under section 1962(a) if they allege a pattern of racketeering in which the bank is both the "person" involved in the racketeering conduct and the "enterprise" into which the proceeds from the racketeering activity are invested. However, if the complaint is amended, the parties may find it helpful to consider what we have already said on the subject. See Schreiber, 806 F.2d at 1396-98.

AFFIRMED IN PART, REVERSED AND REMANDED IN PART.