Racketeer influenced and corrupt organizations.III. DEFENSES
This Section addresses potential defenses to RICO prosecutions. Part A describes how the invalidation of one or more underlying predicate acts can impact a RICO conviction. Part B discusses the statute of limitations for criminal and civil RICO violations. Part C examines a defendant's withdrawal from a conspiracy as a defense under [section] 1962(d). Parts D and E both discuss preemption challenges to RICO. Specifically, Part D addresses challenges based on the "primary jurisdiction" or "horizontal preemption" defense, while Part E describes approaches using the "reverse vertical preemption" theory. Finally, Part F considers constitutional challenges to RICO.
A. Invalidity of One or More Predicate Acts
Courts may reverse a RICO conviction in two situations: (i) when it appears that the jury based the RICO conviction on invalidated convictions; (183) or (ii) when the jury did not indicate which of the predicate acts formed the basis of the conviction. (184) Most circuits agree that a RICO conviction may be sustained despite invalidation of multiple predicate acts so long as valid convictions remain to support the legal sufficiency of at least two predicate acts. (185)
Courts face a more difficult issue when no substantive convictions remain to serve as the two predicate acts required for a RICO conviction. Without any indication as to which predicate acts served as the basis for the RICO conviction, there is a risk that the jury may have relied on legally insufficient acts. The Supreme Court has not ruled definitively on this issue with regard to RICO. In Griffin v. United States, (186) the Court held that a verdict in a multi-object conspiracy conviction should be sustained if the evidence is adequate to support conviction as to any one of the objects. (187) Four circuits have extended the Griffin reasoning to RICO convictions. (188)
B. Limitation of Actions
Although RICO contains no explicit statute of limitations period, in Agency Holding Corp. v. Malley-Duff & Associates, Inc., (189) the Supreme Court defined limitation periods for criminal and civil RICO actions. (190) For criminal RICO prosecutions, the Supreme Court applied a five-year statute of limitations period because Congress explicitly provided that term as the default statute of limitations for criminal actions. (191) For civil actions, the Court held that the statute of limitations is four years. (192)
The "last predicate act" accrual method is used for criminal RICO actions to determine when the five-year statute of limitations begins to run. (193) This method allows for punishment of all predicate acts, no matter when committed, if "the government ... demonstrate[s] that a defendant committed at least one predicate racketeering act within the limitations period." (194)
Courts have applied the "last predicate act" method differently depending on which subsection of [section] 1962 forms the basis of the criminal action. The Fourth Circuit has held that the statute of limitations for criminal RICO [section] 1962(a) offenses begins to run upon the investment of the income, as opposed to the illegal activity from which the income was derived. (195) In contrast, the statute of limitations for actions arising under criminal RICO [section] 1962(b) and (c) offenses begins to run when the last illegal predicate act necessary for the RICO conviction is committed. (196) For a criminal RICO conspiracy action arising under [section] 1962(d), "the statute of limitations ... does not begin to run until the objectives of the conspiracy have been either achieved or abandoned," (197) even if the actual illegal predicate acts occurred more than five years prior to the RICO action's initiation. (198)
C. Withdrawal From Conspiracy
A defendant can assert withdrawal from the conspiracy as a defense to an action brought under [section] 1962(d) through proof that he took affirmative steps, inconsistent with the objectives of the conspiracy, to disavow or to defeat the conspiratorial objectives. (199) Additionally, the defendant must have either made a reasonable effort to communicate those steps to his co-conspirators or disclosed their scheme to law enforcement authorities. (200)
Several circuits have held that resignation from the enterprise, without more, does not constitute withdrawal as a matter of law. (201) Other circuits have held that when a defendant makes a prima facie case of withdrawal, by demonstrating he took affirmative steps to withdraw from the enterprise and communicate that withdrawal, the government "cannot rest on its proof that he participated at one time in the illegal scheme." (202) The government must impeach the defendant's proof or bring forward some other evidence to rebut the defendant's proof of withdrawal. (203) The Third Circuit has held that mere silence by a defendant after affirmative withdrawal will not allow a presumption of continuation. (204) The Third Circuit also found that, while a defendant may withdraw from the conspiracy by completely severing ties with the enterprise, he may be deemed a party to the conspiracy if he continues to take actions that further the goals of the conspiracy and continues to receive benefits from the conspiracy. (205)
D. "Horizontal Preemption" or "Primary Jurisdiction"
RICO actions often involve conduct that is itself the subject of pervasive administrative regulation; therefore, some RICO defendants have asserted a "horizontal preemption" or "primary jurisdiction" (206) defense. This defense contends that the RICO claims are preempted or otherwise outside the court's jurisdiction because an administrative body has the duty of regulating the challenged conduct. (207) The doctrine of primary jurisdiction applies to "claims properly cognizable in court that contain some issue within the special competence of an administrative agency. It requires the court to enable a 'referral' to the [appropriate] agency, staying further proceedings so as to give the parties reasonable opportunity to seek an administrative ruling." (208)
Defendants invoke the "primary jurisdiction" defense most frequently in labor law cases. (209) Specifically, they claim that the alleged racketeering activity is conduct that is an "unfair labor practice," (210) which is regulated by the National Labor Relations Board ("NLRB") under the National Labor Relations Act ("NLRA"). (211) If a court finds that "the existence of the predicate acts depends wholly upon a determination that a violation of federal labor law occurred, jurisdiction is preempted." (212) However, there are several exceptions to the "primary jurisdiction" defense in labor law cases.
RICO charges are not preempted by federal labor law when the underlying offenses fall within the labor related activities expressly included in the RICO statute at [section] 1961(1)(c). (213) In addition, courts seem unwilling to apply the primary jurisdiction doctrine in cases where labor disputes are only collaterally related to the RICO charge. (214) Finally, if the predicate acts are illegal independent of labor law, they are not preempted. (215)
In a different scenario, the Second Circuit found horizontal preemption inappropriate in a situation where the district court needed to assert comprehensive control over complex litigation and to provide for administrative convenience. (216) The court held that a district court could, under a consent decree arising from RICO litigation, issue orders normally within the NLRB's exclusive province. (217)
RICO defendants in non-labor law cases also have attempted to invoke the primary jurisdiction defense, but with less success. (218) While this defense has proved successful in actions against public utilities where the "filed rate" doctrine bars courts from setting rates different from those filed with the agency, (219) it has received much less favor in other non-labor contexts. A federal court may not defer to an administrative agency if the claim at issue is of a type, such as fraud or deceit, that is "within the conventional competence of the courts and [where] the judgment of ... the agency with concurrent jurisdiction [is] not likely to be helpful." (220) Also, a federal court usually will not apply the primary jurisdiction doctrine to defer to a state administrative agency. (221)
E. "Reverse Vertical Preemption"
The Supreme Court has established a number of abstention doctrines that require a federal court with proper jurisdiction over the subject matter of a dispute to nonetheless "stay its hand" in order to promote an overriding policy, such as the maintenance of a particular relationship between the national government and the states. (222) Two such doctrines are the "Pullman abstention" doctrine. (223) and the "Burford abstention" doctrine. (224) The Pullman abstention doctrine requires a federal court to refrain from deciding a case that raises a potentially dispositive question of serious, unsettled state law on which a state decision may render unnecessary a decision on the merits of the federal dispute. (225) The Burford abstention doctrine allows a federal court to refrain from deciding a case if the subject matter of the dispute is the subject of extensive state administrative regulation and a federal decision would risk serious disruption of a state administrative scheme. (226)
In DeMauro v. DeMauro, (227) the First Circuit confronted a RICO action that was intermingled with a divorce proceeding. (228) The court implemented a limited form of the Burford abstention doctrine because staying the federal proceedings would reduce the "risk of interfering with interim state allocations and permit the federal court to tailor any final federal judgment to avoid undermining the divorce court's allocation of property." (229) By contrast, the Second Circuit has held that abstention under Burford was inappropriate in a RICO case where the predicate acts were solely federal law violations and a treble damage award would not interfere with state administrative processes. (230)
F. Constitutional Challenges
RICO has faced several constitutional challenges, including those based on double jeopardy, the First Amendment, the Eighth Amendment, equal protection, due process, vagueness, and the Tenth Amendment.
Courts traditionally hold that RICO does not violate the Fifth Amendment's protections against double jeopardy, (231) either for prosecutions of separate actions (232) or when consecutive sentences are imposed for separate RICO and predicate Offense convictions. (233) Challenges to the imposition of consecutive sentences under the Double Jeopardy Clause have been unsuccessful because RICO actions contain elements beyond the scope of the predicate acts and convictions based on the predicate offenses require proof of elements not contained in RICO. (234)
First Amendment challenges to the application of RICO also have been largely unsuccessful. Alleged RICO violators may not claim that RICO violates their First Amendment right of association because constitutional safeguards do not extend to an association that is part of a plan to commit a crime. (235) The Supreme Court has rejected a challenge based on the First Amendment fight of free expression, determining that no unconstitutional "chilling" effect results from the forfeiture of assets as punishment for past actions. (236) RICO forfeiture provisions have also survived challenges that they are unconstitutionally overbroad with respect to the First Amendment. (237)
The Eighth Amendment's Cruel and Unusual Punishment and Excessive Fines Clause (238) has a limited application to fines, forfeitures, or imprisonment imposed for RICO violations. The forfeiture provisions of RICO are analyzed under the Excessive Fines Clause. (239) The Eighth Amendment may limit RICO forfeitures when the amount of forfeiture is grossly disproportionate to the underlying offense. (240) Courts also have held that sentences under RICO do not violate the Eighth Amendment's prohibition against cruel and unusual punishment. (241)
Courts also have rejected a number of claims based on the Equal Protection Clause. The Seventh Circuit has held that prosecutorial discretion to determine the type of RICO offenses and predicate acts with which to charge a defendant does not violate principles of equal protection unless the prosecutor discriminates based on race, religion, or other arbitrary categories. (242) Moreover, it is not unconstitutionally discriminatory to apply RICO to defendants who are not engaged in organized crime if the defendants "strive[d] to emulate the achievements of their brothers in organized, crime." (243) The First Circuit rejected the argument that it violates principles of equal protection for two predicate acts to be required for conviction under RICO, but only one predicate act for conviction under "loan sharking." (244)
Courts also have considered the constitutionality of RICO under the Due Process Clause, (245) most often confronting one or both of two types of challenges. First, courts have considered whether a defendant's due process rights are violated when the trial court orders a pre-trial restraint of assets and does not exempt assets necessary for retention of defense counsel. At least one federal circuit has held that due process requires the trial court to conduct "a prompt hearing at which the property owner can contest the restraining order." (246) Second, courts have considered allegations that RICO is unconstitutionally vague. Although RICO is subject to conflicting interpretations, the statute has firmly withstood both facial and as applied challenges of constitutional vagueness with respect to the "pattern" and "enterprise" requirements. (247) Courts also have rejected vagueness challenges based on the underlying predicate offenses. (248) In particular, cases involving organized crime are least likely to succeed in a vagueness challenge. (249)
Courts have also rejected arguments that RICO unconstitutionally intrudes upon state sovereignty in violation of the Tenth Amendment. (250) Because the Commerce Clause (251) gives Congress the authority to enact RICO, it is well established that Congress may validly regulate racketeering activity affecting interstate commerce. (252) The defendant's association with an enterprise affecting interstate commerce provides the RICO jurisdiction. (253) The government is not required to prove that the predicate acts themselves affected interstate commerce, as long as the racketeering activity itself affects interstate commerce. (254)
IV. CRIMINAL PENALTIES
RICO violators can be fined, imprisoned for up to twenty years, or both, and are also subject to mandatory asset forfeiture. (255) These sanctions allow the government to attack the economic roots of racketeering activities. The forfeiture provisions empower the government to seek pre-indictment restraining orders (256) and forfeitures of property transferred to third parties. (257) In addition to felony criminal liability under [section] 1963, the RICO statute allows the government to bring a civil action to obtain equitable relief and recover damages against the racketeer under [section] 1964. (258) A private party who is injured in her business or property because of a RICO violation also can bring a civil action to recover damages. (259)
1. "Seize and Freeze" Orders
If a jury determines that a defendant violated RICO, the district court must order forfeiture of the defendant's interest in or property in, or deriving from, the RICO enterprise. (260) "All right, title, and interest" in forfeitable property vests in the government at the time of the [section] 1962 violation. (261) Section 1963(a) describes a broad array of interests that are subject to forfeiture. (262) Section 1963(b) defines forfeitable property as real property and tangible and intangible personal property. (263) Many circuits do not limit forfeiture to the proceeds that the defendant personally obtained but instead hold that a defendant is jointly and severally liable for all proceeds obtained by co-conspirators. (264)
Section 1963(d) authorizes courts to issue temporary restraining orders (265) or injunctions to preserve the forfeitable property until adjudication concludes. (266) Under [section] 1963(d), a district court may enter such an order prior to the filing of an indictment or information if: (i) the government gives notice to persons with an interest in the property; (ii) there is a substantial probability that the property will both be deemed forfeitable and become unavailable without the court's order; and (iii) the need to preserve the property outweighs any hardship the order may cause. (267) A ten-day ex parte order may be granted if the government has probable cause to believe that notice would jeopardize the availability of forfeitable property. (268) The court, upon request, must conduct a hearing on the ex parte order at the earliest possible time and prior to the expiration of the temporary order. (269) A district court's interlocutory denial of a motion to dissolve a pretrial conspiracy asset restraining order may be immediately appealed. (270) If the defendant is convicted and the court enters a judgment of forfeiture, the court will authorize the Attorney General to seize all forfeitable property. (271)
Section 1963(m) provides that, when otherwise forfeitable property cannot be seized, the defendant will be required to forfeit substitute assets up to the value of that property. (272) The Supreme Court has not resolved the question of whether and when courts may place pre-trial conviction restraints on substitute assets. The Third and Eighth Circuits have found that the statutory language of RICO prohibits pretrial restraints on substitute assets. (273) Similarly, the Fifth, Sixth, and Ninth Circuits have not permitted pretrial restraints on substitute assets in cases involving criminal forfeiture provisions of other statutes that are similar to the RICO forfeiture provision. (274) The Second Circuit also has found that the language of [section] 1963(d) does not include substitute assets under [section] 1963(m) but recognized a limited exception under circuit precedent for pretrial restraint of substitute assets when a restraint on directly forfeitable assets burdens unindicted third parties. (275) In contrast, the Fourth Circuit has held that Congress intended to allow pretrial restraints on substitute assets. (276)
2. Rights of Innocent Third Parties
Property transferred by the defendant to third persons after the alleged [section] 1962 violation is subject to forfeiture. (277) and pretrial restraint. (278) A third- party purchaser may seek relief from the court by establishing that she was a bona fide and innocent purchaser for value. (279) An innocent third-party property holder who is not deemed to be a bona fide and innocent purchaser under the meaning of [section] 1963(g) may petition the Attorney General for mitigation or remission of the forfeited property. (280) An innocent third-party who can establish a fight in the property that predated the defendant's crime is also free to seek relief from forfeiture. (281) The rationale behind these two implicit limitations on [section] 1963 is that forfeiture is an in personam criminal remedy, and should be targeted only at the defendant who actually committed the criminal offense. (282)
3. Attorney's Fees
Although RICO case law has found a defendant's funds for legal counsel forfeitable, (283) courts have primarily addressed whether assets that a defendant has used or plans to use to pay for legal counsel are forfeitable in the context of criminal forfeiture provisions of other statutes, such as the Continuing Criminal Enterprise Statute ("CCE") (284) and the Comprehensive Drug Abuse Prevention and Control Act of 1970 ("CDAPCA"), (285) which are nearly identical to the RICO forfeiture provisions. (286) Although the Supreme Court has not examined the issue with respect to RICO, it has rejected Sixth Amendment and statutory challenges to the forfeiture of attorney's fees under the CCE. (287) Absent a strong argument for drawing distinctions between the nearly identical statutes, the Court may follow its reasoning in the CCE cases in a future challenge to the RICO forfeiture of assets used to pay for legal counsel. Some courts, however, have found that the Due Process Clause requires some type of adversarial probable cause hearing before a pre-trial seizure of assets used to secure defendant's counsel takes place. (288)
Sentences for violations of federal RICO laws are determined with reference to the U.S. Sentencing Guidelines ("Guidelines"). (289) Section 2E1.1 of the Guidelines applies to defendants convicted under the RICO statute. (290) The base offense level set by sections 2E1.1(a)(1) and (a)(2) is the greater of level nineteen or the offense level applicable to the underlying racketeering activity. (291) To determine whether the base offense level is greater under subsection (a)(1) or (a)(2), the adjustments set forth in Chapter Three of the Guidelines are to be applied to both subsections. (292) Courts can adjust the base offense level upwards for specified conduct by the defendant, even if the conduct was an element of the underlying offense and would not otherwise lead to an adjustment under section 2E1.1(a)(2) of the Guidelines. (293) Conduct underlying prior sentences for RICO violations can be included in the calculation of the defendant's criminal history. (294)
If the underlying conduct is a state law offense, "the offense level corresponding to the most analogous federal offense is to be used." (295) When the defendant is convicted of multiple counts, either under one statute or a variety of statutes, the Guidelines relating to multiple count convictions are applied to determine a single offense level. (296)
The court determines the existence of relevant conduct at sentencing by a preponderance of the evidence. (297) Relevant conduct is not limited to the acts that the defendant personally participated in or conduct charged against the particular defendant: relevant conduct includes all conduct, including the acts and omissions of others in the enterprise that are reasonably foreseeable in connection with the jointly undertaken criminal activity and in furtherance of that activity. (298) To hold a defendant accountable for the acts of others, a court must find that the acts were: (i) within the scope of the defendant's agreement and (ii) foreseeable to the defendant. (299) A defendant's knowledge of another participant's criminal acts is not enough to hold the defendant responsible for those acts under the first prong. (300) To determine the scope of the criminal activity that the particular defendant agreed to jointly undertake, the court may consider any explicit agreement or implicit consent fairly inferred from the conduct of the defendant and others. (301)
V. CIVIL RICO
A. Civil Penalties
In addition to providing for felony criminal liability under [section] 1963, RICO establishes broad authority for the imposition of equitable remedies under [section] 1964. (302) The Attorney General may seek civil remedies under [section] 1964(a) including orders of divestiture, (303) restrictions on future activities, (304) and dissolution or reorganization of the enterprise. (305) These penalties are intended to provide "new weapons of unprecedented scope for an assault upon organized crime and its economic roots." (306) The Second Circuit has held that ordering a defendant to contribute to the cost of eliminating the vestiges of his racketeering activities in the enterprise he corrupted is a proper equitable remedy to prevent RICO violations. (307)
Congress's liberal-construction mandate (308) is most strongly applied to [section] 1964 (309) and courts have interpreted the statute as "grant[ing] courts broad discretion and latitude in enjoining violators [of RICO] from activities that might lead to future violations." (310) In fashioning penalties, the court must make due provision for the rights of innocent parties. (311) While the courts have recognized that certain injunctions may implicate a defendant's First Amendment rights of association, the government's significant interest in eradicating organized crime may override such concerns. (312)
B. Civil Cause of Action for Private Parties
The far-reaching civil enforcement scheme of RICO also provides for a private cause of action to recover damages for injury incurred due to a violation of the substantive provisions of the RICO statute. Any person or class of persons (313) injured in their business or property by reason of a violation of 18 U.S.C. [section] 1962 can sue for treble damages, costs of filing the lawsuit, and reasonable attorney's fees. (314)
The Supreme Court has repeatedly reinforced Congress's intent to construe civil RICO broadly by instructing the lower courts to heed the expansive language of the statute. In Sedima, S.P.R.C. v. Imrex Co., (315) the Supreme Court held that the Second Circuit's restrictions on standing were inconsistent both with RICO's statutory language and with congressional intent that the statute be broadly construed. (316) In National Organization for Women, Inc. v. Scheidler (NOW 1) (317) the Supreme Court rejected the Seventh Circuit's restrictions on private civil RICO claims (318) by holding that RICO does not require that the racketeering enterprise be accompanied by an underlying economic motive. (319) Lastly, circuits are currently split as to whether the intracorporate conspiracy doctrine bars [section] 1962(d) claims. (320)
Despite the expansive language of the statute and congressional intent that RICO be broadly construed, significant limitations remain on the availability of private civil RICO claims in areas such as standing, the person/enterprise distinction, and the statute of limitations.
To have standing for a civil cause of action under RICO, a plaintiff must show: (i) a violation of [section] 1962(a), (b), (c), or (d); (ii) injury to her business or property; and (iii) that the violation caused the injury. (321) To sue for a violation of [section] 1962(a), a plaintiff must show that someone both received income from a pattern of racketeering activity and then used or invested such income in an enterprise. (322) Most courts hold that a compensable injury must flow from the use or investment of the income and cannot just flow from the predicate acts. (323) In contrast, the Fourth Circuit only requires a plaintiff to establish that he suffered an injury because of a predicate act and not that the injury suffered was caused by an investment of income from a pattern of racketeering activity. (324)
For standing purposes, [section] 1962(b) functions the same as, and is subject to the same analysis as, [section] 1962(a). (325) To sue for a violation of [section] 1962(c), a plaintiff must have suffered an injury to business or property caused by one of the predicate acts of racketeering. (326) For example, a person wrongfully discharged for refusing to participate in a pattern of racketeering activity lacks standing to sue for a violation of [section] 1962(c) because the harm suffered is caused by the termination and not the predicate acts of racketeering. (327)
In Beck v. Prupis, (328) the Supreme Court considered the issue of standing where the underlying violation is an alleged RICO conspiracy prohibited by [section] 1962(d). The Court held that an injury caused by an overt act that is not an act of racketeering nor otherwise unlawful under RICO is not sufficient to bring a civil RICO suit. (329) Therefore, a plaintiff bringing a civil RICO claim for injuries sustained from a violation of [section] 1962(d) must demonstrate that the injuries arose from a predicate act that is itself wrongful under RICO. (330)
Moreover, a plaintiff must prove that the defendant's violation of [section] 1962 was the proximate cause of the plaintiff's injury to have standing for a civil RICO action. (331) In creating this proximate cause requirement, the Supreme Court reasoned that Congress modeled [section] 1964(c) on the civil action provisions in the Clayton Act, (332) which federal courts have long held to require a showing of proximate causation. (333) Recently, however, the Court has relaxed this requirement for plaintiffs bringing RICO claims predicated on mail and wire fraud. In Bridge v. Phoenix Bond & Indemnity Co., (334) the Supreme Court held that there is no requirement that plaintiffs in such actions show, either as an element of their claim or as a prerequisite to establishing proximate cause, that they relied on the defendant's alleged misrepresentations. (335)
In addition, civil RICO is not available to compensate the economic consequences of personal injuries sustained as a result of a RICO predicate act. (336)
2. The Person/Enterprise Distinction
To establish liability under [section] 1962(c), a plaintiff must prove the existence of two distinct entities: (i) a "person" and (ii) an "enterprise" that is separate and distinct from the "person." (337) The Supreme Court has elaborated on this distinction, holding that "[an] employee, a natural person, is distinct from the corporation itself, a legally different entity with different rights and responsibilities due to its different legal status." (338) In most circuits the doctrine of respondeat superior is not applicable to RICO claims under [section] 1962(c). (339) This is based on recognition that [section] 1962(c) governs instances where an innocent corporation was victimized by a RICO person employee, and imposing vicarious liability in such circumstances would be directly at odds with congressional intent. (340) In contrast, for cases brought under [section] 1962(a), a corporation-enterprise can be vicariously liable under RICO since the "person" and the "enterprise" are not required to be distinct entities. (341) When the corporation is the direct or indirect beneficiary of the racketeering activity it can be held liable under [section] 1962(a) both directly and vicariously via respondeat superior. (342) Unlike most circuits, the Eleventh Circuit has held that an employer's arrangements with recruiters and employment agencies, under which recruiters and agencies supplied illegal aliens to work for employer, qualified as an "enterprise" that was separate and distinct from the defendant employer's own affairs. (343) This case, a legal workers' action alleging that the purpose of these arrangements was to drive the legal workers' wages down, potentially expands RICO liability by modifying the "association-in-fact" requirement for civil RICO claims under [section] 1962(c). (344)
3. Statute of Limitations
Although no limitations period is explicitly stated in RICO for either civil or criminal actions, (345) the Supreme Court held in Agency Holding Corp. v. Malley Duff & Associates, Inc. (346) that the statute of limitations for a civil RICO action is four years. (347) The "injury discovery" rule is the prevailing rule for determining when the limitations period for a civil RICO claim begins to run. (348) Under the "injury discovery" rule, (349) the limitations period may begin to run before a plaintiff can satisfy RICO's pattern requirement (350) as long as its two components are satisfied. (351)
VI. NON-TRADITIONAL USES OF THE RICO STATUTE
RICO has been used in a non-traditional sense as the basis of claims in a variety of cases, including those involving protests, the tobacco industry, health care fraud, and police misconduct.
The legal community debated whether an expansive use of civil RICO against social and civil protest groups threatened First Amendment protections (352) following a ruling by the Supreme Court that permitted a civil RICO claim against anti-abortion groups allegedly seeking to close abortion clinics. (353) In ruling on the merits of the claim, the Supreme Court decided by an 8-1 vote that the defendants had not violated RICO because they never "obtained" property from the plaintiffs; thus, the defendants' actions did not violate the predicate acts of extortion underlying the RICO claim. (354) More recently in NOW II, (355) the Court rejected respondents' alternative theory that the jury's RICO verdict rested not only on extortion-related conduct, previously ruled to have fallen outside the meaning of extortion within the Hobbs Act in NOW I, but also on four instances (or threats) of physical violence unrelated to extortion. (356) RICO claims have subsequently been upheld against abortion protest groups (357) and environmental activists. (358)
Although Congress intended for use of RICO by the government to combat the infiltration of organized crime into labor unions, (359) civil RICO may be used by corporations as a weapon against the activities of labor unions. In Bayou Steel Corp. v. United Steel Workers of America, (360) the plaintiffs filed a civil RICO lawsuit against a group of unions for waging a "corporate campaign" of harassment and violence after failed labor negotiations. (361) Prior to the settlement agreement reached by the parties, a federal district court held that the plaintiff company alleged sufficient facts for a RICO claim and denied the union defendants' motion to dismiss the complaint. (362)
B. Tobacco Litigation
Relying on the expansive reach of RICO, union health funds, hospitals, and even foreign governments have attempted to recover costs of treating tobacco- related illnesses from the tobacco industry, but largely to no avail. The courts have found that union health and welfare funds have no standing to sue tobacco companies under RICO for costs of providing health care to beneficiaries with tobacco-related illnesses. (363) Health funds have not been able to demonstrate that their economic injury was proximately caused by the defendants' alleged conspiracy to mislead the public regarding the full health risks of smoking. (364) Likewise, hospitals seeking to recover non-reimbursed costs of health care provided to nonpaying patients suffering from tobacco-related illnesses have been denied standing to sue under RICO. (365)
Foreign governments have also been unsuccessful in using RICO against tobacco companies. A claim brought by the governments of Guatemala, Nicaragua, and Ukraine to recover costs of treating their citizens for tobacco-related illnesses was dismissed because the court deemed the loss too remote from the manufacture and sale of cigarettes. (366) Moreover, when Canada brought a RICO claim against R.J. Reynolds for alleged participation in a smuggling scheme to circumvent Canada's heavy taxation of cigarettes, the Second Circuit held the claim was barred by the revenue rule. (367)
The federal government brought a RICO claim against the tobacco industry, alleging that the tobacco companies engaged in racketeering by presenting the public with false information concerning the safety of smoking cigarettes. (368) The suit sought injunctive relief and disgorgement of profits from tobacco companies, rather than treble damages under [section] 1964(c). (369)
C. Health Care Fraud
Following the Supreme Court's ruling in 1999 that beneficiaries of a managed care organization ("MCO") can sue under civil RICO for the MCO's failure to pass on to its customers the substantial discounts it obtained from area hospitals, (370) insured parties who participated in a health maintenance organization ("HMO") brought a civil RICO action against the HMO for false advertising and marketing designed to encourage enrollment. (371) The Third Circuit explained that because the plaintiffs did not show that they received inadequate, inferior, or delayed care or were denied benefits, they failed to establish a RICO injury sufficient to sue under [section] 1964(C). (372)
The Seventh Circuit dismissed a civil RICO complaint alleging a mass conspiracy among health care providers to defraud health plan beneficiaries. (373) The claim was brought by an assignee to which employee health plan beneficiaries' claims were reassigned by the providers. (374) The plaintiff alleged that the defendants violated [section] 1962(a) by denying claims for mental health care benefits on fraudulent grounds and then investing the proceeds to develop a group of preferred medical providers who operated to eliminate outside providers. (375) The defendants also allegedly violated [section] 1962(c) and (d) by colluding to defraud health plan beneficiaries. (376) The court found that the plaintiff did not prove an injury to himself and thus, failed to plead a cognizable claim under [section] 1962(a). (377) The court also held that the plaintiff was unable to show that the health insurance companies had associated with an enterprise engaged in racketeering activity and thus, found no violation of [section] 1962(c) or (d). (378)
D. Police Misconduct
Another non-traditional use of RICO that has emerged is in actions against police. (379) A plaintiff who had been convicted of various narcotic offenses filed a RICO claim against police officers, alleging that the officers unlawfully detained and searched him, planted drugs on him, illegally arrested him, and used excessive force. (380) The suit was allowed to proceed under the RICO theory. (381) It has been argued that because there are barriers to prosecution of police corruption and inappropriate behavior, civil RICO can serve as an important and useful tool in the fight against police misconduct. (382)
(1.) 18 U.S.C. [section][section] 1961-1968 (2006 & Supp. 2009).
(2.) Pub. L. No. 91-452, 84 Stat. 922 (1970) (codified as amended at 18 U.S.C. [section][section] 1961-1968 (2006 & Supp. 2009)).
(3.) Id. According to the "Statement of Findings and Purpose" of RICO,
It is the purpose of [RICO] to seek the eradication of organized crime in the United States by strengthening the legal tools in the evidence-gathering process, by establishing new penal prohibitions, and by providing enhanced sanctions and new remedies to deal with the unlawful activities of those engaged in organized crime.
Id. at 928.
(4.) United States v. Irizarry, 341 F.3d 273, 293 n.7 (3d Cir. 2003).
(5.) Atlas Pile Driving Co. v. DiCon Fin. Co., 886 F.2d 986, 990 (8th Cir. 1989).
(6.) Organized Crime Control Act [section] 904(a), 84 Stat. at 947; see United States v. Turkette, 452 U.S. 576, 587 (1981) (finding Congress's enactment of intentionally broad RICO statute eliminates courts' authority to restrict its application). The breadth of RICO, however, is susceptible to a variety of criticisms. See generally Neil Feldman, Spiraling Out of Control: Ramifications of Reading RICO Broadly, 65 DEF. COUNS. J. 116 (1998) (outlining problems with overly broad RICO application); Douglas E. Abrams, Crime Legislation and the Public Interest: Lessons from Civil RICO, 50 SMU L. REV. 33, 56-57 (1996) (criticizing civil RICO's breadth).
(7.) Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 499 (1985) (stating legitimate enterprises are neither inherently incapable of criminal activity nor immune from its consequences). Likewise, RICO is applicable to criminal enterprises that are not associated with, or have not yet infiltrated, legitimate business. See United States v. Patrick, 248 F.3d 11, 19 (1st Cir. 2001) (upholding RICO conviction of gang members involved in drug trafficking enterprise that had not "infiltrated legitimate businesses").
(8.) See Nat'l Org. for Women v. Scheidler, 510 U.S. 249, 261 (1994) (holding abortion clinics could maintain action against anti-abortion groups although anti-abortion groups did not have a profit motive); United States v. Nascimento, 491 F.3d 25, 42 (1st Cir. 2007) (holding RICO charges were not defeated by a gang's lack of "economic motive" in committing criminal acts); United States v. Muyet, 994 F. Supp. 501, 511 (S.D.N.Y. 1998) (holding RICO does not require the government to prove a drug gang operated with financial purpose).
(9.) See Reves v. Ernst & Young, 507 U.S. 170, 183 (1993) (relying on Congress's intent to construe RICO broadly to resolve ambiguities); H.J., Inc. v. Nw. Bell Tel. Co., 492 U.S. 229, 248-49 (1989) (reiterating RICO was broadly written to encompass a wide range of criminal activity; thus, narrow construction of the pattern element would be contrary to congressional intent).
(10.) See Reves, 507 U.S. at 183 (noting liberal construction clause was "not an invitation to apply RICO to new purposes that Congress never intended" and holding accountants hired to perform audit did not participate in operation or management of cooperative's affairs as required to impose liability under RICO); see also Rogers v. McDorman 521 F.3d 381,391 (5th Cir. 2008) (finding civil RICO claims do not preclude the common law defense of in pari delicto); Att'y Gen. of Can. v. R.J. Reynolds Tobacco Holdings, Inc., 268 F.3d 103, 129 (2d Cir. 2001) (finding language of RICO and legislative history offer no hint Congress intended RICO to afford a civil remedy to a foreign nation for tax evasion by a U.S. company); Chappell v. Robbins, 73 F.3d 918, 921-23 (9th Cir. 1996) (declining to presume RICO abrogates common law legislative immunity protection absent clear legislative intent or statutory language).
(11.) See A. Laxmidas Sawkar, From the Mafia to Milking Cows: State RICO Act Expansion, 41 ARIZ. L. REV. 1133, 1135 (1999) (noting the expansive growth of state RICO statutes and the ever-increasing expansive use of those statutes). See generally G. Robert Blakey & John Robert Blakey, Civil and Criminal RICO: An Overview of the Statute and Its Operations, 64 DEF. Corms. J. 36, 43 (1997).
(12.) See supra note 9 (listing cases noting Supreme Court's liberal construction of RICO).
(13.) See Bruner Corp. v. R.A. Brunet Co., 133 F.3d 491,495 (7th Cir. 1998) (noting mens tea requirement is satisfied if defendant knew predicate was illegal); United States v. Baker, 63 F.3d 1478, 1493 (9th Cir. 1995) ("The mens rea element necessary for a substantive RICO conviction is the same as is required for the predicate crime.").
(14.) 18 U.S.C. [section] 1963 (2006 & Supp. 2009).
(15.) 18U.S.C. [section] 1964(2006).
(16.) Id. [section] 1964(b).
(17.) Id. [section] 1964(c).
(18.) See Tafflin v. Levitt, 493 U.S. 455, 458 (1990) (holding state and federal courts have concurrent jurisdiction over claims arising under [section] 1964(c)); see also Liquidation Comm'n of Banco Intercontinental, S.A.v. Renta, 530 F.3d 1339, 1351-52 (11th Cir. 2008) (concluding that a court has jurisdiction over a civil RICO claim involving extraterritorial conduct only when the conduct occurring in, or directed at, the United States is "central to consummation of the racketeering").
(19.) 18 U.S.C. [section] 1964(a).
(20.) Under RICO, the term "person" includes "any individual or entity capable of holding a legal or beneficial interest in property." 18 U.S.C. [section] 1961(3) (2006).
(21.) Unlawful debts include those incurred in illegal gambling activity or as a result of usury, ld. [section] 1961(6).
(22.) 18 U.S.C. [section] 1962(a) (2006).
(23.) Id. [section] 1962(b).
(24.) Id. [section] 1962(c).
(25.) Id. [section] 1962(d).
(26.) See id. [section] 1962. An individual may violate [section] 1962 not only by engaging in a "pattern of racketeering activity," but also through "collection of an unlawful debt." Id. [section] 1962(a)-(c). An unlawful debt is a debt incurred or contracted in gambling activity which was in violation of federal, state, or local law, or which is unenforceable under federal or state law because of laws relating to usury, and which was incurred in connection with the business of gambling in violation of federal, state, or local law or the business of lending money or a thing of value at a rate usurious under federal or state law where the rate is at least twice the enforceable rate. Id. [section] 1961(6). The government has alleged RICO violations involving the collection of an unlawful debt in a number of cases. See, e.g., United States v. Shifman, 124 F.3d 31, 36 (1st Cir. 1997) (noting participation in loan sharking activities can constitute RICO predicate act); United States v. Oreto, 37 F.3d 739, 751 (1st Cir. 1994) (holding a pattern of collection of unlawful debt alone is a predicate act for purposes of RICO liability); United States v. DiSalvo, 34 F.3d 1204, 1211 (3d Cir. 1994) (holding prosecution need only prove that defendant "used, or aided and abetted another person to use, implicit threats to collect a debt").
(27.) 18 U.S.C. [section] 1961(3) (2006).
(28.) Jund v. Town of Hempstead, 941 F.2d 1271, 1282 (2d Cir. 1991) (holding unincorporated political associations are "persons" under RICO).
(29.) Cnty. of Suffolk v. Long Island Lighting Co., 907 F.2d 1295, 1305 (2d Cir. 1990) (holding RICO's application to public utilities as "persons" proper).
(30.) See Fitzgerald v. Chrysler Corp., 116 F.3d 225, 226 (7th Cir. 1997) (holding that an automobile manufacturer is a "person" under RICO); State Farm Fire & Cas. Co. v. Estate of Caton, 540 F. Supp. 673,682 (N.D. Ind. 1982) (holding "person" encompasses the estate of an alleged wrongdoer), overruled on other grounds by Ashland Oil, Inc. v. Amett, 656 F. Supp. 950, 953 (N.D. Ind. 1987). But see Pieczenik v. Domantis, 120 F. App'x 317, 320 (Fed. Cir. 2005) (holding the government cannot be liable under RICO because the United States does not fall within the statute's definition of a "person" capable of violating RICO; because federal agencies are not subject to state or federal criminal prosecution, they cannot satisfy the "racketeering activity" prerequisite to bringing a RICO action); St. Paul Mercury Ins. Co. v. Williamson, 224 F.3d 425, 447 (5th Cir. 2000) (deciding where persons associate in fact for a criminal purpose, each participant is a "person" liable under RICO but the association itself is not). The Fifth Circuit requires, in addition, that "the RICO person must be one that either poses or has posed a continuous threat of engaging in the acts of racketeering." See Crowe v. Henry, 43 F.3d 198, 204 (5th Cir. 1995) (finding a partner in a joint farming venture to be a "person" for RICO purposes because he was capable of holding property and satisfied the continuity requirement).
(31.) See Cedric Kushner Promotions, Ltd. v. King, 533 U.S. 158, 163 (2001) (holding that an employee who conducted the affairs of a corporation through illegal acts, even if he was acting within the scope of his authority, comes within the terms of RICO provisions forbidding any "person" to unlawfully conduct an enterprise).
(32.) See Reves v. Ernst & Young, 507 U.S. 170, 184 (1993) (finding that RICO liability "is not limited to upper management").
(33.) 18 U.S.C. [section][section] 1961(5), 1962 (2006); BancOklahoma Mortg. Corp. v. Capital Title Co., 194 F.3d 1089, 1102 (10th Cir. 1999) ("The various acts of racketeering activity described in the statute are often referred to as 'predicate acts' because they form the basis for liability under RICO.").
(34.) "[A] person does not have to be formally convicted of any predicate act before liability under 18 U.S.C. [section] 1962(c) may attach." BancOklahoma Mortg. Corp., 194 F.3d at 1102; see also Sedima, S.P.R.L.v. Imrex Co., 473 U.S. 479, 488 (1985) (holding that the fact that defendants had not been convicted of predicate acts under mall or wire fraud statutes did not bar plaintiff's claim); United States v. Gotti, 451 F.3d 133, 136-37 (2d Cir. 2006) (holding that the jury's failure to reach unanimous decisions on whether government proved as predicate acts at least two racketeering acts charged against defendant did not compel his acquittal under RICO). The Court in Sedima explained: "As defined in the statute, racketeering activity consists not of acts for which the defendant has been convicted, but of acts for which he could be." Sedima, 473 U.S. at 488. Under [section] 1961(1), the predicate acts need only be "chargeable" or "indictable" under state or federal law. 18 U.S.C. [section] 1961 (1).
(35.) See United States v. Farmer, 924 F.2d 647, 649 (7th Cir. 1991) (holding that a murder for which the defendant had been acquitted could serve as a basis for a RICO violation).
(36.) Nat'l Org. for Women, Inc. v. Scheidler, 510 U.S. 249, 256-57 (1994) (quoting [section] 1961(1)); but see Bridge v. Phx. Bond & Indem. Co., 553 U.S. 639, 653-54 (2008) (requiring RICO plaintiffs to demonstrate that predicate acts were a proximate cause of their injury).
(37.) These acts include "murder, kidnapping, gambling, arson, robbery, bribery, extortion, dealing in obscene matter, [and] dealing in a controlled substance or listed chemical (as defined in section 102 of the Controlled Substances Act)." 18 U.S.C. [section] 1961(1)(A); see United States v. Warneke, 310 F.3d 542, 546--47 (7tb Cir. 2002) (holding that conspiracies to commit crimes were sufficient predicate acts for RICO purposes); United States v. Polanco, 145 F.3d 536, 541 (2d Cir. 1998) (holding participation in a murder may serve as RICO predicate act); Ideal Dairy Farms, Inc. v. John Labatt, Ltd., 90 F.3d 737, 746--47 (3d Cir. 1996) (dismissing federal and state RICO claims when plaintiff failed to prove elements under state law fraud statute).
(38.) These include acts relating to: bribery; sports bribery; counterfeiting; theft from an interstate shipment; embezzlement from pension and welfare funds; extortionate credit transactions; fraud and related activity in connection with identification documents; fraud and related activity in connection with access devices; transmission of gambling information" mall fraud; wire fraud; financial institution fraud; unlawful procurement of citizenship or nationalization; reproduction of naturalization or citizenship papers; sale of naturalization or citizenship papers; obscene matter; obstruction of justice; obstruction of criminal investigations; obstruction of state or local law enforcement; tampering with a witness, victim, or an informant; retaliating against a witness, victim, or an informant; false statements in the application for and use of a passport; forgery or false use of a passport; misuse of a passport; fraud and misuse of visas, permits, and other documents; peonage, slavery, and trafficking in persons; interference with commerce; robbery or extortion; racketeering; interstate transportation of wagering paraphernalia; unlawful welfare fund payments; illegal gambling businesses; laundering of monetary instruments; engaging in monetary transactions in property derived from specified unlawful activity; use of interstate commerce facilities in the commission of murder-for-hire; illegal money transmitters; sexual exploitation of children; interstate transportation of stolen motor vehicles and other stolen property; trafficking in counterfeit labels for phonorecords, computer programs or computer program documentation or packaging and copies of motion pictures or other audiovisual works; criminal infringement of a copyright; unauthorized fixation of and trafficking in sound recordings and music videos of live musical performances; trafficking in goods or services bearing counterfeit marks; trafficking in certain motor vehicles or motor vehicle parts; trafficking in contraband cigarettes; white slave traffic; biological weapons; chemical weapons; and nuclear materials. 18 U.S.C. [section] 1961(1)(B).
(39.) This includes "any act which is indictable under title 29, United States Code, section 186 (dealing with restrictions on payments and loans to labor organizations) or section 501(c) (relating to embezzlement from union funds)." 18 U.S.C. [section] 1961(l)(C) (2006).
(40.) This includes:
[A]ny offense involving fraud connected with a case under title 11 (except a case under section 157 of this title), fraud in the sale of securities, or the felonious manufacture, importation, receiving, concealment, buying, selling, or otherwise dealing in a controlled substance or listed chemical (as defined in section 102 of the Controlled Substances Act), punishable under any law of the United States.
Id. [section] 1961(1)(D).
(41.) Id. [section] 1961(1)(E).
(42.) Id. [section] 1961(1)(F).
(43.) Id. [section] 1961(1)(G). This refers to acts indictable as "federal crimes of terrorism." Id. [section] 2332b(g)(5).
(44.) Pub. L. No. 98-473, 98 Stat. 1837 (codified in scattered sections of 18, 31 U.S.C.).
(45.) Pub. L. No. 98-473, [section] 1020, 98 Stat. 1837 (1984) (codified at 18 U.S.C. [section] 1961(1)(A)-(B) (2006)); see also Fort Wayne Books, Inc. v. Indiana, 489 U.S. 46, 57 (1989) (applying state RICO statute to mailing of obscene video tapes from retail video store).
(46.) S. REP. No. 98-225, at 303 (1983), reprinted in 1984 U.S.C.C.A.N. 3182, 3483 ("[M]ajor currency transaction violations are inherently a part of all major drug racketeering schemes and organized crime money laundering activities."). Currency violations, which generally involve multiple violations of the mail and wire fraud statutes, often accompany the types of white collar crimes for which prosecution under RICO is appropriate. This latter provision, coupled with the concurrent amendment to 18 U.S.C. [section] 2516 (2006), amended by Pub. L. No. 107-68, [section] 201, 115 Stat. 560 (2001), that makes violations of the Currency and Foreign Transactions Reporting Act subject to electronic surveillance under Title HI of the Omnibus Crime Control and Safe Streets Act of 1968, significantly enhances the government's ability to identify and punish money laundering activity.
(47.) Pub. L. No. 104-132, Title IV [section] 433, 100 Stat. 1214, 1274 (amending 18 U.S.C. [section] 1961(1)). The RICO provisions were incorporated from the proposed Criminal Alien Deportation Improvements Act of 1995, H.R. 668, 104th Cong. (1995).
(48.) Congress included the forgery and false use of passports, visas, permits, and other documents and the alien smuggling crimes of the Immigration and Naturalization Act as predicate acts to "enable federal law enforcement officials to use the RICO law to combat alien smuggling operations." H.R. REP. NO. 104-22, at 9 (1995). The action was necessary because "[o]rganized crime rings in this country, with ties to others abroad, have developed to prey upon illegal immigrants who want to come to the United States." 141 CONG. REC. H1588 (dally ed. Feb. 10, 1995) (statement of Rep. McCollum).
(49.) 18 U.S.C. [section] 1964(c) (2006). Congress eliminated securities fraud as a RICO predicate act through the Private Securities Litigation Reform Act (PSLRA) in 1995. Pub. L. No. 104-67 [section] 107, 109 Stat. 737 (1995) (amending 18 U.S.C. [section] 1964(c)). Legislators intended section 107 of the PSLRA (known as the RICO amendment) "to address a significant number of frivolous actions based on alleged securities law violations." Mathews v. Kidder, Peabody & Co., 161 F.3d 156, 164 (3d Cir. 1998) (quoting 141 CONG. REC. H2771 (daily ed. Mar. 7, 1995) (statement of Rep. Cox)). The RICO amendment was enacted to prevent parties seeking the "treble damage blunderbuss of RICO" from bypassing securities fraud reforms. 141 CONG. REC. H2771 (daily ed. Mar. 7, 1995) (statement of Rep. Cox). The amendment further "prevent[s] a plaintiff from 'plead[ing] other specified offenses, such as mail or wire fraud, as predicate acts under civil RICO if such offenses are based on conduct that would have been actionable as securities fraud.'" Bald Eagle Area Sch. Dist. v. Keystone Fin., Inc., 189 F.3d 321, 327 (3d Cir. 1999) (quoting H.R. REP. No. No. 104-369, at 47 (1995), reprinted in 1995 U.S.C.C.A.N. 730, 746).
(50.) 18 U.S.C. [section] 1962(a) (2006).
(51.) Id. [section] 1961(5).
(52.) See H.J. Inc. v. Nw. Bell Tel. Co., 492 U.S. 229, 237-38 (1989) (holding two acts may not be sufficient to establish RICO violation); see also Tal v. Hogan, 453 F.3d 1244, 1267 (10th Cir. 2006) (noting RICO is not aimed at the isolated offender); Goren v. New Vision Int'l, Inc., 156 F.3d 721,729 (7th Cir. 1998) (finding concurrent sale of two items constituted only one fraudulent transaction and thus was insufficient to establish a pattern of racketeering); Thompson v. Paasche, 950 F.2d 306, 310-11 (6th Cir. 1991) (finding the fraudulent sale of nineteen lots of land was an inherently short-term affair and insufficient to establish a pattern of racketeering).
(53.) See Sedima, S.P.R.L.v. Imrex Co., Inc., 473 U.S. 479, 496 n.14 (1985) (citing S. REP. No. 91-617, at 158 (1969)); Duran v. Cards, 238 F.3d 1268, 1271 (10th Cir. 2001) (finding predicates must be part of a "common scheme" and "pose a threat of continuing criminal activity" to establish a RICO violation).
(54.) Sedima, 473 U.S. at 496 n. 14. In Sedima, the Court also noted the more detailed definition of "pattern" in a later provision of the statute, which states that "criminal conduct forms a pattern if it embraces criminal acts that have the same or similar purposes, results, participants, victims, or methods of commission, or otherwise are interrelated by distinguishing characteristics and are not isolated events." Id. (quoting 18 U.S.C. [section] 3575(e) (1982) (relating to increased sentences for dangerous special offenders), repealed by Sentencing Reform Act of 1984, Pub. L. No. 98-473, [section] 212(a)(1)-(2), 98 Stat. 1837, as amended by Sentencing Act of 1987, Pub. L. No. 100-182, [section] 2, 101 Stat. 1266). The Court suggested that the language in this provision may help to illuminate other sections of the statute. Sedima, 473 U.S. at 496 n. 14.
(55.) 492 U.S. 229 (1989).
(56.) Id. at 250 (finding allegations that a telephone company bribed members of Public Utilities Commission numerous times over a six-year period with the objective of causing the commissioners to approve unfair and unreasonable rates for the company were sufficient to plead a pattern of racketeering activity under RICO).
(57.( E.g., Abraham v. Singh, 480 F.3d 351,355 (5th Cir. 2007) (analyzing a RICO claim under the continuity plus relationship test).
(58.) See H.J. Inc., 492 U.S. at 239.
(59.) Pub. L. No. 91-452 84 Stat. 922 (1970). RICO formed Title IX of the Organized Crime Control Act of 1970 ("OCCA").
(60.) H.J. Inc., 492 U.S. at 240 (quoting Title X of OCCA, which provided for enhanced penalties where defendant, among other things, committed a prior felony as part of a pattern of criminal conduct or in furtherance of a conspiracy to engage in a pattern of criminal conduct).
(61.) H.J. Inc. v. Nw. Bell Tel. Co., 492 U.S. 229, 242 (1989) (defining close- ended continuity); see also Spool v. World Child Int'l Adoption Agency, 520 F.3d 178, 184 (2d Cir. 2008) ("Although we have not viewed two years as a bright-line requirement, it will be rare that conduct persisting for a shorter period of time establishes closed-ended continuity...."); Giuliano v. Fulton, 399 F.3d 381, 390 (1st Cir. 2005) (holding that the commission of sixteen predicate acts over a six-month period is inadequate to establish a close-ended pattern of racketeering); Cofacredit, S.A.v. Windsor Plumbing Supply Co., 187 F.3d 229, 243--44 (2d Cir. 1999) (holding supply company acts spanning less than one year are not sufficiently continuous to establish closed-ended continuity); Tabas v. Tabas, 47 F.3d 1280, 1294 (3d Cir. 1995) (holding defendant's allegedly fraudulent distribution of estate over three and one half years was "substantial" and satisfied closed-ended continuity requirement of RICO).
(62.) See H.J. Inc., 492 U.S. at 242 (suggesting open-ended continuity can be satisfied by showing likelihood of predicate acts continuing into the future or by showing that predicate acts occur in normal course of entity's business); see also U.S. Airline Pilots Ass'n v. Awappa, 615 F.3d 312, 319-20 (4th Cir. 2010) (finding that plaintiff cannot demonstrate open-ended continuity if racketeering activity has a built-in ending point, such as implementation of a particular union contract, and does not threaten indefinite extortion); Spool, 520 F.3d at 185 (finding that plaintiff did not prove an open-ended or closed-ended pattern of racketeering activity because fraudulent processing was contained within a period of a few months); United States v. Hively, 437 F.3d 752, 762 (8th Cir. 2006) (holding that despite cessation by former prosecutor of mail fraud scheme associated with grant program there was a sufficient threat of repetition of activity to show open ended continuity where defendant was still in office and still receiving grant money); First Capital Asset Mgmt., Inc. v. Satinwood, Inc., 385 F.3d 159, 180-81 (2d Cir. 2004) (finding that the plaintiff did not sufficiently plead an open-ended pattern of racketeering activity where the alleged scheme was "inherently terminable" because it essentially came to a conclusion with the fraudulent conveyance of assets); GE Inv. Private Placement Partners 1I v. Parker, 247 F.3d 543, 550 (4th Cir. 2001) (finding plaintiff did not show predicate acts of fraud constituted a regular way of conducting business).
(63.) H.J. Inc., 492 U.S. at 242.
(65.) Id. at 243.
(66.) See infra Section III.F (discussing vagueness challenges to RICO pattern requirement).
(67.) See United States v. Pizzonia, 577 F.3d 455, 465 (2d Cir. 2009) ("[l]n the end, it is not the number of predicates proved, but, rather, 'the relationship they bear ...' that indicates whether they manifest the continuity required to prove a pattern." (quoting H.J. Inc. v. Nw. Bell Tel. Co., 492 U.S. 229, 238 (1989))); St. Germain v. Howard, 556 F.3d 261,263 (5th Cir. 2009) (noting that a "pattern of racketeering activity" must include at least two predicate acts that are related and pose a threat of continued criminal activity); United States v. Lawson, 535 F.3d 434, 444 (6th Cir. 2008) (holding that it applies a "continuity plus relationship" test that does not require that the predicate acts are directly interrelated, but only that they are "connected to the affairs and operations of the criminal enterprise"); United States v. Browne, 505 F.3d 1229, 1257-58 (11th Cir. 2007) (finding that predicate acts must be both related by "distinguishing characteristics" such as purposes, results, participants, victims, or methods of commission, and must "actually form a pattern" by having continuity); Hively, 437 F.3d at 761-62 (holding that a pattern requires acts that are sufficiently related in terms of similarity of purpose, results, participants, victims, or methods of commission, and that have some form of continuity); United States v. Cianci, 378 F.3d 71, 88 (1st Cir. 2004) (stating that two or more predicate acts must be related in terms of "distinguishing characteristics" like purposes, results, participants, victims, or methods of commission, and must "amount to or pose a threat of continued criminal activity," bearing in mind that versatility, flexibility, and diversity are not inconsistent with pattern); Howard v. Am. Online Inc., 208 F.3d 741,746 (9th Cir. 2000) (requiring a relationship between the predicates and a threat of continuing activity); Callahan v. A.E.V., Inc., 182 F.3d 237, 246 (3d Cir. 1999) (finding a discontinued course of conduct extending over a period of less than twelve months insufficient to meet the requisite continuity standard); United States v. Richardson, 167 F.3d 621,626 (D.C. Cir. 1999) (applying a continuity plus relationship test, finding that even where predicate acts cover a short span of time, such as thirty-four days, the frequency and escalating seriousness of those acts can project a threat of indefinite repetition and thus meet the continuity requirement).
(68.) See, e.g., United States v. Shifman, 124 F.3d 31, 36 (1st Cir. 1997) (holding that pattern element is satisfied when defendant commits two related racketeering acts within ten years of one another that pose a threat of repetition); United States v. Blandford, 33 F.3d 685, 703-04 (6th Cir. 1994) ("[P]attern of racketeering activity is.... proved by evidence of the requisite number of acts of racketeering....").
(69.) See, e.g., Howard, 208 F.3d at 750 (explaining closed-ended activity extending over a significant amount of time is continuous but that a few months is not considered to be a significant amount of time); Wisdom v. First Midwest Bank, 167 F.3d 402, 406 (8th Cir. 1999) (holding relationship is determined by considering similarity of purpose, victims, methods, and results and that continuity can be either closed- ended or open-ended); Word of Faith World Outreach Ctr. Church, Inc. v. Sawyer, 90 F.3d 118, 122 (5th Cir. 1996) (holding that pattern can be shown by either a closed period of repeated conduct or an open period threatening future repetition).
The Second and Third Circuits have each adopted inconsistent approaches in determining whether closed-ended or open-ended continuity is established. Compare United States v. Aulicino, 44 F.3d 1102, 1113-14 (2d Cir. 1995) (holding open-ended continuity was established because the list of intended kidnapping victims had not been exhausted, even though the challenged acts spanned only three and a half months), with Cofacredit, S.A.v. Windsor Plumbing Supply Co., 187 F.3d 229, 244 (2d Cir. 1999) (holding predicate acts of mail fraud spanning less than one year did not satisfy closed-ended continuity). Compare Tabas v. Tabas, 47 F.3d 1280, 1294 (3d Cir. 1995) (holding a three and a half year scheme satisfied closed-ended continuity), with Tabas, 47 F.3d at 1295 (holding open-ended continuity was met because plaintiffs established a "threat of continuing fraudulent conduct").
(70.) See Blandford, 33 F.3d at 703 (opining that the Supreme Court in H.J. Inc. "meant to craft a broad test of relatedness" and holding that predicate acts were sufficiently related because they had similar purposes and results and were otherwise "interrelated by distinguishing characteristics"); United States v. Eufrasio, 935 F.2d 553,565 (3d Cir. 1991 ) (holding, where an organized crime entity is the relevant enterprise in a RICO case, the relationship prong of RICO's pattern requirement is satisfied by functionally unrelated predicate acts and offenses if the predicates are undertaken in association with, or in furtherance of, criminal purposes of the same organized crime enterprise). But cf. Tabas, 47 F.3d at 1295 (noting that it would be unlikely for two predicate acts just under ten years apart to be sufficient to establish a "pattern of racketeering activity"); Eufrasio, 935 F.2d at 565 (noting RICO may not be used to punish a "series of disconnected criminal acts").
To determine "relationship" the court considers factors such as purpose, victims, methods, and results. See Howard, 208 F.3d at 749 (holding relatedness prong was not satisfied because there were different victims, methods, purposes, and results); see also United States v. Dischner, 974 F.2d 1502, 1510 (9th Cir. 1992) (holding a number of bribes were sufficiently related because they had consistent methods, purposes, and results), overruled on other grounds by United States v. Morales, 108 F.3d 1031, 1035 n.1 (9th Cir. 1997) (en banc).
(71.) See, e.g., United States v. Starrett, 55 F.3d 1525, 1542 (11th Cir. 1995) (holding that, although the court has not defined the "exact contours" of the relationship prong, it does not require that predicate acts "affect the everyday operations of the enterprise").
(72.) For example, the Seventh Circuit has noted that it retains its earlier test for the requisite continuity--which considers factors such as the number, variety, and time span of the predicate acts, the number of victims, the presence of separate schemes, and the occurrence of distinct injuries--but in light of the Supreme Court's decision in H.J. Inc. now examines facts "with an eye toward not only [those] factors, but also toward the Court's suggestion that continuity encompass a lengthy period of racketeering activity or a threat of continued criminal activity." 420 E. Ohio Ltd. P'ship v. Cocose, 980 F.2d 1122, 1123-24 (7th Cir. 1992); see also Jennings v. Auto Meter Prods., Inc., 495 F.3d 466,473 (7th Cir. 2007) (analyzing the same continuity factors but focusing its search for continuity on Congress's concern with long-term criminal conduct).
The Tenth Circuit has posited a multi-factor approach in its relationship analysis but looks mainly at two factors: duration and extensiveness. See Resolution Trust Corp. v. Stone, 998 F.2d 1534, 1543 (10th Cir. 1993) (holding that duration is important because continuity is a temporal concept and that extensiveness is significant because multiple ongoing activities are more likely to satisfy continuity than sporadic related acts), superseded on other grounds by statute, Private Securities Litigation Reform Act of 1995, Pub. L. No. 104-67, 109 Stat. 737; see also Tal v. Hogan, 453 F.3d 1244, 1268 (10th Cir. 2006) ("To determine continuity we examine both the duration of the related predicate acts and the extensiveness of the RICO enterprise's scheme."). Extensiveness is determined by considering the number of victims, the number of acts, the variety of acts, the distinctiveness of the injuries, and the complexity of the scheme. See Resolution Trust, 998 F.2d at 1543.
(73.) See ePlus Tech., Inc. v. Aboud, 313 F.3d 166, 181-82 (4th Cir. 2002) ("In essence, the pattern requirement has been reduced to a 'continuity plus relationship' test." (quoting H.J. Inc. v. Nw. Bell Tel. Co., 492 U.S. 229, 239 (1989))).
Before H.J. Inc., the Fourth Circuit adopted a multi-factor test that considered the "number and variety of predicate acts and the length of time over which they were committed, the number of putative victims, the presence of separate schemes, and the potential for multiple distinct injuries." Parcoil Corp. v. NOWSCO Well Serv., Ltd., 887 F.2d 502, 504 (4th Cir. 1989) (describing multi-factor test used before H.J. Inc.).
(74.) See Anderson v. Found. for Advancement, Educ., & Emp't of Am. Indians, 155 F.3d 500, 505-06 (4th Cir. 1998) (requiring not just an H.J. Inc. showing of continuity based on predicate acts being part of an entity's regular way of doing business, but also evidence of "ongoing unlawful activity whose scope and persistence pose a special threat to social well-being" (quoting Menasco, Inc. v. Wasserman, 886 F.2d 681,681 (4th Cir. 1989)) (internal quotation marks omitted); Int'l Data Bank, Ltd. v. Zepkin, 812 F.2d 149, 155 (4th Cir. 1987) (stating no mechanical test can determine the existence of a RICO pattern, and what constitutes a RICO pattern is a matter of dimension and degree).
(75.) Parcoil, 887 F.2d at 503 (criticizing district court's grant of summary judgment on the sole ground that a single scheme to defraud could not constitute a pattern under RICO and stating, on the contrary, a single scheme could constitute a pattern under RICO); see also United States v. Grubb, 11 F.3d 426, 440 (4th Cir. 1993) (holding single scheme of campaign fraud sufficient to show pattern where multiple candidates were elected illegally); Walk v. Bait. & Ohio R.R., 890 F.2d 688, 690 (4th Cir. 1989) (holding alleged racketeering activity that continued over ten-year period constituted long-term conduct meeting RICO pattern requirement, notwithstanding "closed-ended" nature of conduct that was directed to accomplishment of single discreet objective of forcing out minority in single corporate structure).
(76.) 18 U.S.C. [section] 1962(c) (2006); e.g., Schacht v. Brown, 711 F.2d 1343, 1360 (7th Cir. 1983) (holding RICO was designed to catch even those only peripherally involved in the enterprise); United States v. Martino, 648 F.2d 367, 382 (5th Cir. June 1981) (holding definition of "conduct" under [section] 1962(c) extends to those who perform activities helpful or necessary to operation of enterprise and not just enterprise's top management).
(77.) 18 U.S.C. [section] 1962(a)-(c).
(78.) Id. [section] 1961(4).
(79.) See, e.g., United States v. Mokol, 957 F.2d 1410, 1417 (7th Cir. 1992) (holding, for purposes of RICO, former deputy sheriff was "associated with" amusement company which distributed illegal video poker machines because owner of company paid bribes to deputy to provide police protection to its poker machines and to drive other vendors out of business, even though deputy was not associated with legitimate business conducted by company); Blue Cross & Blue Shield of N.J., Inc. v. Philip Morris, Inc., 113 F. Supp. 2d 345,366 (E.D.N.Y. 2000) ("A defendant is considered to have 'associated with' a RICO enterprise if he engages in the predicate act violations with other members of the enterprise, even if he is not an actual 'insider' of the enterprise.").
(80.) Cedric Kushner Promotions, Ltd. v. King, 533 U.S. 158, 161 (2001).
(81.) Id. at 163.
(82.) See United States v. Olson, 450 F.3d 655,665-67 (7th Cir. 2006) (concluding evidence that gang existed as an enterprise sufficient to support RICO conviction where gang was part of a national organization which remained in existence during local gang's leadership dispute and that any break in leadership did not compel a finding that the enterprise ceased to exist), vacated on other grounds, 221 E App'x 463 (7th Cir. 2007); United States v. Kehoe, 310 F.3d 579, 586-87 (8th Cir. 2002) (holding white supremacist organization constituted enterprise where members shared common purpose of advancing interests of the organization, members worked in concert to advance those interests through participation in criminal activity, and where organization's structure differed from that inherent in each act engaged in by members); United States v. Chance, 306 F.3d 356, 373 (6th Cir. 2002) (concluding enterprise consisting of county sheriff, head of vice department, and members of organized crime family and having purpose of controlling criminal activity in county on behalf and for benefit of crime family was separate from pattern of racketeering activity through which enterprise's affairs were conducted, as required for conviction under RICO); United States v. Morales, 185 F.3d 74, 80- 81 (2d Cir. 1999) (holding evidence insufficient to prove enterprise continued to exist while its members were incarcerated); United States v. Richardson, 167 F.3d 621,625-26 (D.C. Cir. 1999) (holding D.C. Circuit test for establishing a RICO enterprise requires (i) a common purpose among participants, (ii) organization, and (iii) continuity--had been met upon showing defendants organized themselves hierarchically and planned their activities, had a consistent pattern in committing robberies, and had association independent of their individual crimes). For a more complete discussion of proof of the enterprise, see infra Section II.D.2.
(83.) See infra Section II.D.1 (giving examples of RICO enterprises).
(84.) See CRIMINAL DIV., U.S. DEP'T OF JUSTICE, RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS (RICO): A MANUAL FOR FEDERAL PROSECUTORS, [section] III(C)(3), at 127 (4th ed. 2000) [hereinafter U.S. ATTORNEY'S MANUAL].
(85.) See id. [section] II(D)(1), at 39; see also United States v. Turkette, 452 U.S. 576, 580 (1981) ("There is no restriction upon the associations embraced by the definition [of enterprise]."). But see Reves v. Ernst & Young, 507 U.S. 170, 182-83 (1993) (noting courts should not apply RICO to new purposes Congress never intended to reach).
(86.) United States v. Swiderski, 593 F.2d 1246, 1249 (D.C. Cir. 1978) (finding there is no greater problem of notice under RICO than under more conventional conspiracy statutes).
(87.) See U.S. ATI'ORNEY'S MANUAL, supra note 84, at 39-46; see also United States v. Urban, 404 F.3d 754, 770 (3d Cir. 2005) (noting that government entities have frequently been found to be enterprises for RICO purposes); DeFalco v. Bernas, 244 F.3d 286, 307-09 (2d Cir. 2001) (describing case in which Second Circuit had previously held that a governmental unit could be a RICO enterprise); United States v. Freeman, 6 F.3d 586, 597 (9th Cir. 1993) (holding government entity may constitute a RICO enterprise); Jennings v. Emry, 910 F.2d 1434, 1440 (7th Cir. 1990) (noting government offices can constitute RICO enterprises). But see Bonnet v. Henderson, 147 F.3d 457, 459 (5th Cir. 1998) (holding trust is not enterprise under RICO because it is neither legal entity nor association-in-fact).
(88.) See United States v. Starrett, 55 F.3d 1525, 1545 (11th Cir. 1995) (treating motorcycle club as enterprise); United States v. Console, 13 F.3d 641,650-51 (3d Cir. 1993) (treating association between law firm and medical practice as enterprise).
(89.) See Guidry v. Bank of LaPlace, 954 F.2d 278, 283 (5th Cir. 1992) (finding sole proprietorship qualifies as individual and thus, as RICO "enterprise"); McCullough v. Suter, 757 F.2d 142, 143--44 (7th Cir. 1985) (finding sole proprietorship employing several people an enterprise).
(90.) See Securitron Magnalock Corp. v. Schnabolk, 65 F.3d 256, 263 (2d Cir. 1995) (finding two corporations owned by same person was an enterprise); Console, 13 F.3d at 650-51 (finding an association between law firm and medical practice a RICO enterprise).
(91.) See United States v. Cervone, 907 F.2d 332, 336 (2d Cir. 1990) (treating union, trust fund, and construction industry corruption as an enterprise); Landry v. Air Line Pilots Ass'n Int'l, 901 F.2d 404, 434 (5th Cir. 1990) (finding pilot union an enterprise).
(92.) See United States v. Weatherspoon, 581 F.2d 595, 597-98 (7th Cir. 1978) (finding beauty college approved for veterans' vocational training by Veterans Administration an enterprise), abrogated on other grounds by Morgan v. Bank of Waukegan, 804 F.2d 970, 974 (7th Cir. 1986).
(93.) See United States v. Warner, 498 F.3d 666, 696 (7th Cir. 2007) (finding that the State of Illinois fits within the definition of "enterprise" for purposes of RICO).
(94.) See United States v. Goot, 894 F.2d 231,239 (7th Cir. 1990) (finding county prosecutor's office to be RICO enterprise according to United States v. Yonan, 800 F.2d 164, 167 (7th Cir. 1986)).
(95.) See Am. Mfrs. Mut. Ins. Co. v. Townson, 912 F. Supp. 291,295 (E.D. Tenn. 1995) (finding that marriage was an enterprise because it had a financial dimension for the purposes of RICO).
(96.) See Handeen v. Lemaire, 112 F.3d 1339, 1349-50 (8th Cir. 1997) (finding attorneys who directed a debtor to fraudulently state his expenses went beyond merely providing professional advice to participating in the alleged RICO enterprise); Crowe v. Smith, 848 F. Supp. 1258, 1263 (W.D. La. 1994) (finding law partners of attorney at time he performed his allegedly wrongful acts could be held vicariously liable under RICO if it was proven the partners derived benefit from the allegedly wrongful acts).
(97.) See United States v. Vaccaro, 115 F.3d 1211, 1220 (5th Cir. 1997) (finding cheating scheme in casino constitutes an enterprise); United States v. Rogers, 89 F.3d 1326, 1337 (7th Cir. 1996) (treating criminal gangs as enterprise).
(98.) See United States v. Tocco, 200 F.3d 401,425 (6th Cir. 2000) (holding Mafia family to be enterprise); United States v. Goldin Indus., Inc., 219 F.3d 1271, 1275 (11th Cir. 2000) (stating key factor in determining the existence of RICO enterprise is the association of individual entities, however loose or informal, furnishing a vehicle for the commission of the pattern of racketeering activity requisite to the RICO violation and finding three corporate defendants constituted association-in-fact enterprise under RICO).
(99.) See MCM Partners, Inc. v. Andrews-Bartlett & Assocs., Inc., 62 F.3d 967, 978-79 (7th Cir. 1995) (treating corporation and union as an enterprise); United States v. London, 66 F.3d 1227, 1243 (1st Cir. 1995) (holding bar and check-cashing business comprise association-in-fact enterprise under RICO); United States v. Stolfi, 889 F.2d 378, 380 (2d Cir. 1989) (finding local union and its welfare benefit fund a RICO enterprise).
(100.) See United States v. Cianci, 378 F.3d 71, 79 (1st Cir. 2004) ("[E]nterprise has been interpreted inter alia to include (1) legal entities such as legitimate business partnerships and corporations and (2) illegitimate associations-in-fact marked by an ongoing formal or informal organization of individual or legal-entity associates."); Emery v. Am. Gen. Fin., Inc., 134 F.3d 1321, 1325 (7th Cir. 1998) (stating that association-in-fact is "a polite name for a criminal gang or ring").
(101.) Burdett v. Miller, 957 F.2d 1375, 1379 (7th Cir. 1992).
(102.) See Richmond v. Nationwide Cassel L.P., 52 F.3d 640, 645 (7th Cir. 1995) ("An enterprise must be ... more than a group of associated businesses that 'are operated in concert' under the control of one family.").
(103.) See Odom v. Microsoft Corp., 486 F.3d 541,552-53 (9th Cir. 2007) (requiring a common purpose, ongoing organization, and continuing unit), cert. denied, 128 S. Ct. 464 (U.S. 2007); see also Richmond, 52 F.3d at 645 ("the enterprise must have some continuity and some differentiation of the roles within it").
(104.) See United States v. Gray, 137 F.3d 765, 772 (4th Cir. 1998) (identifying characteristics of association-in-fact as continuity, unity, shared purpose, and identifiable structure); Bonner v. Henderson, 147 F.3d 457, 460 (5th Cir. 1998) ("An association-in-fact consists of personnel who share a common purpose and collectively form a decision making structure."). But see, e.g., Limestone Dev. Corp. v. Vill. of Lemont, 520 F.3d 797, 804 (7th Cir. 2008) ("We grant that the view that every RICO enterprise must have a structure is not inevitable."); Odom, 486 F.3d at 551 (holding that an association-in-fact enterprise does not require any particular organizational structure).
(105.) See United States v. Tortes, 191 F.3d 799, 805 (7th Cir. 1999) (holding there must be a showing that the association-in-fact had goals separate from the predicate acts themselves). But see Odom, 486 F.3d at 551 (holding that no separate structure is required).
(106.) 129 S. Ct. 2237 (2009).
(107.) Id. at 2244--45 (holding that so long as a jury instruction adequately expresses the substance of the relevant point that existence of an enterprise is needed to support a RICO action such an instruction is proper without use of the term "structure"). The Court noted that an enterprise need only have the following structural features: "a purpose, relationships among those associated with the enterprise, and longevity sufficient to permit these associates to pursue the enterprise's purpose." Id. at 2244. Thus, structural features such as a hierarchy, fixed member roles, chain of command, roles and regulations, or sophisticated and diverse crimes are not necessary under RICO. Id. at 2245; see also United States v. Hutchinson, 573 F.3d 1011, 1022 (10th Cir. 2009) (holding that after Boyle, all that is necessary to substantiate the requisite structure is that members of the alleged enterprise shared a common purpose, interacted or associated in some way to advance that purpose, and functioned long enough to complete a pattern of racketeering activity; no "special formulaic instruction or particular incantation [is] required"); Rao v. BP Prods. of N. Am., Inc., 589 F.3d 389, 400 (7th Cir. 2009) ("Even though the Supreme Court has now made clear that the 'structure' requirement can be satisfied in ways other than by demonstrating a business-like entity and that enterprise participants can come and go, an association-in-fact enterprise still requires a showing of a 'group of persons associated together for a common purpose of engaging in a course of conduct.'" (quoting Boyle, 129 S. Ct. at 2243)).
(108.) See Nat'l Org. for Women, Inc. v. Scheidler, 510 U.S. 249, 261 (1994) (holding anti-abortion groups can constitute enterprises under RICO); see also United States v. Ellison, 793 F.2d 942, 950 (8th Cir. 1986) (holding that RICO conviction requires only that activity affect enterprise, and does not require that activity directly benefit defendant or his organization).
(109.) See United States v. Turkette, 452 U.S. 576, 580-81 (1981) (holding that "enterprise" encompasses both legitimate and illegitimate enterprises because, although its major purpose was to protect legitimate business enterprises from infiltration by racketeers, it also made criminal participation in an association which performs only illegal acts and which has not infiltrated or attempted to infiltrate legitimate enterprise).
(110.) 89 F.3d 1326 (7th Cir. 1996).
(111.) Id. at 1337 (concluding that requiring proof that the enterprise had an unlawful purpose other than committing the predicate acts of the RICO charge would be absurd (quoting United States v. Masters, 924 F.2d 1362, 1367 (7th Cir. 1991))).
(112.) 505 F.3d 1229 (11th Cir. 2007).
(113.) Id. at 1273 (noting that protection under RICO is not limited to the use of an enterprise to "swindle third parties").
(114.) Id. (quoting Bennett v. U.S. Trust Co. of N.Y., 770 F.2d 308, 315 (2d Cir. 1985)).
(115.) E.g., Webster v. Omnitrition Int'l, Inc., 79 F.3d 776, 786 (9th Cir. 1996) ("[C]orporate entities have a legal existence separate from their participation in the racketeering, and the very existence of a corporation meets the requirement for a separate structure." (citing United States v. Kirk, 844 F.2d 660, 664 (9th Cir. 1988))); Jaguar Cars, Inc. v. Royal Oaks Motor Car Co., 46 F.3d 258, 268 (3d Cir. 1995) ("A corporation is an entity legally distinct from its officers or employees, which satisfies the 'enterprise' definition...."); U.S. ATTORNEY'S MANUAL, supra note 84, at 47.
(116.) United States v. Turkette, 452 U.S. 576, 583 (1981); see Bonner v. Henderson, 147 F.3d 457, 460 (5th Cir. 1998) (defining association-in-fact as "personnel who share a common purpose and collectively form a decision-making structure"); U.S. ATTORNEY'S MANUAL, supra note 84, at 48-50.
(117.) Turkene, 452 U.S. at 580 (holding both legitimate and illegal criminal organizations can be enterprises for the purposes of racketeering).
(118.) See United States v. Tocco, 200 F.3d 401, 425 (6th Cir. 2000) (holding organized crime family was association-in-fact); United States v. Torres, 191 F.3d 799, 807 (7th Cir. 1999) (finding an informal unit responsible for collection of drug debts for a larger organization was association-in-fact); United States v. Richardson, 167 F.3d 621,625 (D.C. Cir. 1999) (holding association-in-fact could be made up of band of robbers with a leader and an organized structure); Handeen v. Lemaire, 112 F.3d 1339, 1353 (8th Cir. 1997) (determining that bankruptcy estate possessed necessary characteristics of association-in- fact); United States v. Qaoud, 777 F.2d 1105, 1116 (6th Cir. 1985) (holding a judge and several bagmen accepting bribes on his behalf were association-in-fact).
(119.) Turkette, 452 U.S. at 583 (finding "enterprise" is an entity, whereas "pattern of racketeering activity" is series of criminal acts); see also United States v. Urban, 404 F.3d 754, 770 (3d Cir. 2005) (noting that the enterprise must be separate and apart from the pattern of activity in which it engages).
(120.) Turkette, 452 U.S. at 583. The Turkette Court stated:
While the proof used to establish these separate elements may in particular cases coalesce, proof of one does not necessarily establish the other. The 'enterprise' is not the 'pattern of racketeering activity'; it is an entity separate and apart from the pattern of activity in which it engages. The existence of an enterprise at all times remains a separate element which must be proved by the Government.
(121.) 452 U.S. 576 (1981).
(122.) Id. at 583.
(123.) U.S. ATTORNEY'S MANUAL, supra note 84, at 51.
(124.) See Crichton v. Golden Rule Ins. Co., 576 F.3d 392, 398 (7th Cir. 2009) ("An association-in-fact enterprise theory requires that the association-in-fact 'enterprise' and the person sought to be held liable be sufficiently distinct."); Urban, 404 F.3d at 782 (holding that a distinct enterprise is necessary and that the "operative inquiry is whether the alleged 'enterprise' is distinct from the alleged 'pattern of activity in which it engages'"); United States v. Smith, 413 F.3d 1253, 1267 (10th Cir. 2005) (holding that evidence must be sufficient to establish existence of enterprise separate and apart from the racketeering activity), abrogated by United States v. Hutchinson, 573 F.3d 1011, 1020-21 (10th Cir. 2009); Asa-Brandt, Inc. v. ADM Investor Servs., Inc., 344 F.3d 738, 752 (8th Cir. 2003) (holding enterprise must be distinct and apart from racketeering activity); United States v. Chance, 306 F.3d 356, 372-73 (6th Cir. 2002) (finding the criminal enterprise sufficiently separate and distinct from the pattern of racketeering activity to uphold RICO convictions of members of Pittsburgh branch of La Cosa Nostra criminal society); United States v. Gray, 137 F.3d 765, 772 (4th Cir. 1998) (holding government must prove the enterprise separate and distinct from the racketeering act of murder).
(125.) See Limestone Dev. Corp. v. Vill. of Lemont, 520 F.3d 797, 805 (7th Cir. 2008) ("Without a requirement of structure, 'enterprise' collapses to 'conspiracy.'").
(126.) See Asa-Brandt, 344F.3d at 752 (holding enterprise must be distinct and apart from racketeering activity). The Eighth Circuit requires that "the person named as the defendant cannot also be the entity identified as the enterprise." Atlas Pile Driving Co. v. DiCon Fin. Co., 886 F.2d 986, 995 (8th Cir. 1989). This distinct structure is required
in order to avoid the danger of guilt by association that arises because RICO does not require a proof of a single agreement as in a conspiracy case, and in order to ensure that criminal enterprises ... are distinguished from individuals who associate for the commission of sporadic crime.
Id. at 996 (citations omitted).
(127.) See United States v. Irizarry, 341 F.3d 273, 285-86 (3d Cir. 2003) (noting that although proof of pattern or racketeering activity does not necessarily establish the existence of an enterprise, in some cases the enterprise can be inferred from proof of the pattern); United States v. White, 116 F.3d 903, 924 (D.C. Cir. 1997) ("[T]he existence of the enterprise may be inferred from proof of the pattern." (quoting United States v. Perholtz, 842 F.2d 343, 362 (D.C. Cir. 1988)); United States v. Pelullo, 964 F.2d 193, 212 (3d Cir. 1992) (noting "enterprise" must remain a separate element at all times but "in the appropriate case, the enterprise can be inferred from proof of the pattern").
(128.) See Odom v. Microsoft Corp., 486 F.3d 541,551 (9th Cir. 2007) ("RICO does not require any particular organizational structure, separate or otherwise."), cert. denied, 128 S. Ct. 464 (2007); United States v. Jones, 482 F.3d 60, 69-70 (2d Cir. 2006) (noting that the existence of an enterprise is often more provable by what it does rather than by an analysis of its structure); United States v. Patrick, 248 F.3d 11, 19 (1st Cir. 2001) (refusing to require an "ascertainable structure" requirement in jury instructions); United States v. Goldin Indus., Inc., 219 F.3d 1271, 1274-75 (11th Cir. 2000) ("[A] RICO enterprise need not possess an 'ascertainable structure' distinct from the associations necessary to conduct the pattern of racketeering activity."); United States v. Coonan, 938 F.2d 1553, 1559 (2d Cir. 1991) (holding proof of various racketeering acts can establish existence of an enterprise).
(129.) See United States v. Diaz, 176 F.3d 52, 93 (2d Cir. 1999) ("Regarding the continuity requirement, this Court has noted that '[t]he nature of an enterprise may ... serve to show the threat of continuing activity. Where the enterprise is an entity whose business is racketeering activity, an act performed in furtherance of that business automatically carries with it the threat of continued racketeering activity.'" (quoting United States v. Indelicato, 865 F.2d 1370, 1383-84 (2d Cir. 1989))).
(130.) See United States v. Daidone, 471 F.3d 371,376 (2d Cir. 2006) (noting that proof of the separate elements of enterprise and racketeering acts need not be distinct and independent as long as the proof offered is sufficient to satisfy both elements); United States v. Mazzei, 700 F.2d 85, 89 (2d Cir. 1983) (finding that proof used to establish pattern of racketeering activity element and enterprise element proved the functioning of "continuous unit" (citing United States v. Turkette, 452 U.S. 576, 583 (1981))); see also Coonan, 938 F.2d at 1559 ("Common sense suggests that the existence of an association-in-fact is oftentimes more readily proven by what it does, rather than by abstract analysis of its structure.") (internal quotation marks omitted). The Second Circuit bases its view on the fact that neither RICO's legislative history, nor the statute itself, indicates that Congress intended the two elements to be distinct. See Mazzei, 700 F.2d at 89. Therefore, the Second Circuit relaxes the emphasis on continuity as an element in proving the existence of an enterprise, concluding "relatedness and continuity are attributes of activity, not of a RICO enterprise.... "Indelicato, 865 F.2d at 1381. The Second Circuit, however, recognizes that "[e]vidence of relatedness and continuity or the threat of continuity may arise from ... the nature of the RICO enterprise itself." United States v. Minicone, 960 F.2d 1099, 1106 (2d Cir. 1992).
(131.) Odom, 486 F.3d at 551 (holding an association-in-fact enterprise must be found, but that there is no separate requirement that the enterprise have an "ascertainable structure"); see also Newcal Indus., Inc. v. Ikon Office Solution, 513 F.3d 1038, 1056 (9th Cir. 2008) (applying Odom).
(132.) See Goldin Indus., 219 F.3d at 1274-75.
(133.) 129 S. Ct. 2237 (2009).
(134.) See United States v. Hutchinson, 573 F.3d 1011, 1020-21 (10th Cir. 2009) (holding the Tenth Circuit's approach, requiring a RICO enterprise to exist "separate and apart from the pattern of racketeering activity" and under a control mechanism, to be too strict in light of Boyle, and noting the Second Circuit's approach eschewing such requirements as more appropriate.)
(135.) See Boyle v. United States, 129 S. Ct. 2237, 2245, 2247 (2009) (finding structural features such as a hierarchy, fixed member roles, chain of command, rules and regulations, or sophisticated and diverse crimes are not necessary and "proof of a pattern of racketeering activity may be sufficient in a particular case to permit a jury to infer the existence of an association-in-fact enterprise" under RICO).
(136.) 18 U.S.C. [section] 1962(a) (2006).
(137.) Id. [section] 1962(b).
(138.) See Crowe v. Henry, 43 F.3d 198, 205 (5th Cir. 1995) (upholding plaintiff's [section] 1962(a) and [section] 1962(b) claims but striking [section] 1962(c) claim because RICO person and enterprise were not distinct); Riverwoods Chappaqua Corp. v. Marine Midland Bank, 30 F.3d 339, 345 (2d Cir. 1994) (holding under [section] 1962(a), RICO person and enterprise do not have to be distinct but they must be separate under [section] 1962(c); outcome under [section] 1962(b) not decided); New Beckley Mining Corp. v. Int'l Union, United Mine Workers of Am., 18 F.3d 1161, 1163 (4th Cir. 1994) (holding under [section] 1962(a), RICO person and enterprise do not have to be distinct hut must be distinct under [section] 1962(c)); Genty v. Resolution Trust Corp., 937 F.2d 899, 907 (3d Cir. 1991) (same); Busby v. Crown Supply, 896 F.2d 833, 841 (4th Cir. 1990) (overruling earlier case with respect to requirement that RICO person and enterprise be distinct under [section] 1962(a) but maintaining distinctness requirement under [section] 1962(c)); Reynolds v. E. Dyer Dev. Co., 882 F.2d 1249, 1251 (7th Cir. 1989) (holding [section] 1962(a) does not require that person and enterprise be distinct); Schreiber Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d 1393, 1396-98 (9th Cir. 1986) (holding under [section] 1962(a) and 1962(b), RICO person and enterprise do not have to be distinct but must be distinct under [section] 1962(c)).
(139.) 18 U.S.C. [section] 1962(c).
(140.) See Cedric Kushner Promotions, Ltd. v. King, 533 U.S. 158, 161 (2001) ("We do not quarrel with the basic principle that to establish liability under [section] 1962(c) one must allege and prove the existence of two distinct entities: (1) a 'person'; and (2) an 'enterprise' that is not simply the same 'person' referred to by a different name."); First Capital Asset Mgmt., Inc. v. Satinwood, Inc., 385 F.3d 159, 173 (2d Cir. 2004) (noting that the enterprise must be distinct from the person conducting the affairs of the enterprise).
(141.) Cedric Kushner Promotions, 533 U.S. at 160, 163 ("The corporate owner/employee, a natural person, is distinct from the corporation itself, a legally different entity with different tights and responsibilities due to its different legal status."); see also City of N.Y. v. Smokes-Spirits.com, Inc., 541 F.3d 425, 448 (2d Cir. 2008) (finding that the "distinctness" requirement was satisfied where the "enterprise" was an innocent corporation and the RICO "persons" were employees of the company directing the enterprise's racketeering activities), rev'd on other grounds sub nom., Hemi Grp., LLC v. City of N.Y., 130 S. Ct. 983 (2010).
(142.) The Court expressly did not decide whether other attempts to circumvent the distinctness requirement are prohibited. Cedric Kusnher Promotions, 553 U.S. at 162. The circuits, however, have rejected a number of such attempts. See, e.g., Bachman v. Bear, Stearns & Co., 178 F.3d 930, 932 (7th Cir. 1999) (affirming dismissal of RICO claims because "a firm and its employees, or a parent and its subsidiaries," do not constitute an enterprise separate from the firm for purposes of [section] 1962(c)); Brannon v. Boatmen's First Nat'l Bank of Okla., 153 F.3d 1144, 1147-48 (10th Cir. 1998) (holding allegation that subsidiary is the RICO "person" and a parent is the enterprise not sufficient to support a RICO claim); Fitzgerald v. Chrysler Corp., 116 F.3d 225, 226 (7th Cir. 1997) (holding employer and employees did not constitute RICO enterprise); Riverwoods Chappaqua, 30 F.3d at 344 (holding distinctness requirement may not be avoided by alleging the enterprise as the corporate defendant associated with its employees).
(143.) See 18 U.S.C. [section] 1962(a)--(c) (2006) (prohibiting participation in illegal enterprises "engaged in, or the activities of which affect, interstate or foreign commerce").
(144.) See United States v. Nerone, 563 F.2d 836, 854 (7th Cir. 1977) (requiring government to introduce evidence that the enterprise affects interstate commerce in order to successfully prosecute a RICO claim).
(145.) See United States v. Johnson, 440 F.3d 832, 841 (6th Cir. 2006) (holding that "[o]nly a minimal impact upon interstate commerce is necessary to support a RICO conviction" and that "the interstate nature of the predicate acts themselves can establish the required connection between the enterprise and the interstate commerce"); United States v. Delgado, 401 F.3d 290, 297 (5th Cir. 2005) (finding that evidence of use of interstate instrumentalities is sufficient to show the minimal nexus with interstate commerce necessary for RICO); United States v. Riddle, 249 F.3d 529, 537 (6th Cir. 2001) ("We hold that a de minimis connection suffices for a RICO enterprise that 'affects' interstate commerce."); United States v. Feliciano, 223 F.3d 102, 117 (2d Cir. 2000) ("[The] effect on interstate or foreign commerce could have occurred in any way, and it need only have been minimal"); United States v. Frega, 179 F.3d 793, 800 (9th Cir. 1999) (requiring individual predicate acts of racketeering only have a de minimis impact on interstate commerce); United States v. Owens, 167 F.3d 739, 755 (1st Cir. 1999) (holding only a minimal effect on interstate commerce is necessary), rev'd in part on other grounds, 483 F.3d 48 (1st Cir. 2007); United States v. Beasley, 72 F.3d 1518, 1526 (11th Cir. 1996) (holding religious cult's efforts to spread its influence to other states and countries more than satisfied requirement that predicate acts have "slight" effect on interstate commerce).
(146.) United States v. Juvenile Male, 118 F.3d 1344, 1349 (9th Cir. 1997) (holding armed robbery of a Subway sandwich franchise by gang members and subsequent murder of an employee had a probable or potential impact on interstate commerce based on a number of theories: defendants robbed a franchise which sends some of its profits to its out-of-state headquarters; in addition to taking money, defendants allegedly stole sandwiches and chips, which contained ingredients purchased from out-of-state suppliers; gun used during robbery had moved in interstate commerce; and defendants hoped to use cash from robbery to obtain additional firearms, which could potentially have a further impact on interstate commerce).
(147.) 18 U.S.C. [section] 1962(c) ("It shall be unlawful for any person ... associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to ... participate ... in the conduct of such enterprise's affairs through a pattern of racketeering activity....") (emphasis added).
(148.) Juvenile Male, 118 F.3d at 1349 (holding that a district court may examine both the enterprise's activities and its impact on the victim to determine whether the interstate commerce element is met).
(149.) By statute, it is a federal crime to commit violent acts for the purpose of maintaining or increasing one's position within a racketeering enterprise engaged in interstate commerce. See 18 U.S.C. [section] 1959 (2006); United States v. Crenshaw, 359 F.3d 977, 992 (8th Cir. 2004) (concluding that [section] 1959 does not require that the violent acts bear any connection to interstate commerce).
(150.) 18 U.S.C. [section] 1962(a) (2006).
(151.) Id. [section] 1962(b).
(152.) Id. [section] 1962(c).
(153.) Id. [section] 1962(d).
(154.) DAVID B. SMITH & TERRANCE G. REED, CIVIL RICO [section] 5.02 n.4 (1987 & Supp. 1997).
(155.) Id. at [section] 5.02.
(156.) Although criminal prosecutions are infrequent, civil suits are more common. See infra Section V (discussing Civil RICO).
(157.) See Blakey & Blakey, supra note 11, at 38 (discussing elements of [section] 1962(a)); see also United States v. Vogt, 910 F.2d 1184, 1193-94 (4th Cir. 1990) (finding violation of [section] 1962(a) because defendant used part of bribery money from drug smuggler to establish multi-corporation laundering enterprise); United States v. Porcelli, 865 F.2d 1352, 1364 (2d Cir. 1989) (affirming defendant's RICO conviction under [section] 1962(a) because racketeering proceeds were funneled through defendant's realty companies). But see United States v. Robertson, 73 F.3d 249, 253 (9th Cir. 1996) (affirming dismissal of [section] 1962(a) charge where government failed to tie deposit of illegal drug sale proceeds to investment or operation of RICO enterprise).
(158.) See Vogt, 910 F.2d at 1194 ("Section 1962(a) does not exact rigorous proof of the exact course of income derived from a pattern of racketeering activity into its ultimate 'use or investment.'"). There is no requirement, under a broad reading of [section] 1962(a), that "the tainted income must be specifically and directly traced in proof from its original illegal receipt to its ultimately proscribed 'use or investment' by the defendant." Id.
(159.) Conspicuously absent from the text of [section] 1962(a) is an explicit mens rea requirement. "Nevertheless, the statute has been properly construed to require a showing of knowledge that the invested money is derived from racketeering activity. This standard protects a defendant whose funds are so commingled that he cannot distinguish his dirty money from his legitimate income." SMITH & REED, supra note 154, at [section] 5.02 (citation omitted).
(160.) See Vogt, 910 F.2d at 1197 ("[T]he offense defined in subsection (a) is only complete upon the use or investment of income, or its proceeds, derived from such a pattern. A prosecution under subsection (a) therefore could not proceed until such use or investment bad occurred, without regard to when the pattern of racketeering activity which produced the tainted income may have come to an end."); United States v. McNary, 620 F.2d 621, 628 (7th Cir. 1980) ("[T]he statute on its face does not require immediate or even direct use of illicit income to establish a violation of its terms.").
(161.) Louis C. Long, Treble Damages for Violations of the Federal Securities Laws: A Suggested Analysis and Application of the RICO Civil Cause of Action, 85 DICK. L. REV. 201,229 (1981). Smith and Reed, however, argue "the typical racketeer" likely does not take the simple precautions necessary to hide the racketeering proceeds, so that a "reasonably thorough financial investigation ought to be able to trace the invested money back to its illegitimate source in the usual case." SMITH & REED, supra note 154, [section] 5.02 (citing McNary, 620 F.2d at 628-29, which found that liberating other funds by receipt of racketeering proceeds was sufficient to meet requirements of [section] 1962(a)); see also United States v. Cauble, 706 F.2d 1322, 1342 (5th Cir. 1983) (holding government need only show that some racketeering proceeds were invested in enterprise, not that any specific proceeds were traceable to any specific act).
(162.) 18 U.S.C. [section] 1962(b) (2006).
(163.) See Barry Tarlow, RICO Revisited, 17 GA. L. REV. 291,323 (1983) ("In practice, [[section] 1962(b)] prosecutions involve relatively simple fact patterns in which the defendant is charged with 'muscling' into businesses through loansharking, bribery, extortion, or fraud."); see also Advocacy Org. for Patients & Providers v. Auto Club Ins., 176 F.3d 315, 328 (6th Cir. 1999) ("A violation of [section] 1962(b) requires that the RICO defendant acquire or maintain an interest in, or control of, an enterprise through (or by way of) the pattern of racketeering activity."); Lightning Lube, Inc. v. Witco Corp., 4 F.3d 1153, 1190-91 (3d Cir. 1993) (holding that plaintiff failed to assert a claim under 18 U.S.C. [section] 1962(b) by falling "to allege a specific nexus between control of any enterprise and the alleged racketeering activity").
(164.) See SMITH & REED, supra note 154, at [section] 5.03 ("[Section 1962(b)] is the least used of the four subsections.").
(165.) Compare 18 U.S.C. [section] 1962(a) (prohibiting persons from acquiring, through investment of proceeds from pattern of racketeering activity, interest in enterprise affecting interstate commerce) (emphasis added), with 18 U.S.C. [section] 1962(b) (prohibiting persons from acquiring, through pattern of racketeering activity, interest in enterprise affecting interstate commerce).
(166.) 18 U.S.C. [section] 1962(c) (2006).
(167.) United States v. Indelicato, 865 F.2d 1370, 1384 (2d Cir. 1989) (holding there must be a relationship between the enterprise and the predicate acts for a RICO violation to occur). RICO prosecutions under [section] 1962(a) and (b) also require this nexus, as well as that the nexus be explicit: "investment" in or "acquiring or maintaining" an "interest" in an enterprise, respectively. Compare 18 U.S.C. [section] 1962(c) (making it unlawful for person "employed by or associated with" enterprise to participate in enterprise's conduct through a pattern of racketeering activity), with 18 U.S.C. [section] 1962(a) (making it unlawful for person who has received income derived from pattern of racketeering to obtain interest in enterprise), and 18 U.S.C. [section] 1962(b) (making it unlawful for person to acquire or maintain interest in enterprise through pattern of racketeering activity).
(168.) 507 U.S. 170 (1993).
(169.) Id. at 185 ("One must participate in the operation or management of the enterprise itself [in order to be subject to [section] 1962(c) liability].").
(170.) Id. (holding that an accountant who performed audits and prepared financial statements for enterprise did not rise to the requisite level of participation to be held liable under 18 U.S.C. [section] 1962(c)).
(171.) See Williams v. Mohawk Indus., Inc., 465 F.3d 1277, 1285-86 (11th Cir. 2006) (finding the allegation that a company had "some direction" over recruiters, who hired illegal workers, sufficient under the operation or management test), cert. denied, 127 S. Ct. 1381 (2007); G. Robert Blakey & Kevin P. Roddy, Reflections on Reves v. Ernst & Young: Its Meaning and Impact on Substantive, Accessory, Aiding Abetting and Conspiracy Liability Under RICO, 33 AM. CRIM. L. REV. 1345, 1366 (1996) (analyzing majority opinion in Reves and noting that the word "conduct" in [section] 1962(c) implies a degree of direction).
(172.) Blakey & Roddy, supra note 171, at 1460; see Reves, 507 U.S. at 178-79 (holding the "operation or management" test is not met when accounting firm conducts two audits of agricultural cooperative client without consulting with cooperative's board); United States v. Stites, 56 F.3d 1020, 1022 (9th Cir. 1995) (stating fraud by professional accountants is more "heinous" than fraud by non-professionals).
(173.) Reves, 507 U.S. at 184; see also Tal v. Hogan, 453 F.3d 1244, 1269 (10th Cir. 2006) (noting that, although it is not necessary for a defendant to have had significant control, for RICO liability to be imposed defendants must have participated in the operation or management of RICO enterprise); United States v. Parise, 159 F.3d 790, 796 (3d Cir. 1998) (affirming RICO conviction of defendant who bribed union employees because, even though defendant did not hold a formal position in the enterprise, he knew of the general nature of the enterprise and knew it extended beyond his individual role).
(174.) See Univ. of Md. at Bait. v. Peat, Marwick, Main & Co., 996 F.2d 1534, 1538-39 (3d Cir. 1993) (granting immunity to professionals because "not even action involving some degree of decisionmaking constitutes participation in the affairs of an enterprise").
(175.) Reves v. Ernst & Young, 507 U.S. 170, 184 (1993) (noting an enterprise is "'operated' not just by upper management but also by lower rung participants in the enterprise who are under the direction of upper management" but holding accountants hired to perform audit of cooperative's records did not participate in operation or management of cooperative's affairs).
(176.) Id. at 184 n.9.
(177.) See United States v. Fowler, 535 F.3d 408, 418 (6th Cir. 2008) (concluding that knowingly carrying out the decisions of superiors within the criminal enterprise qualifies as "operation or management" under Reves); United States v. Urban, 404 F.3d 754, 770 (3d Cir. 2005) (holding that the government sufficiently established the necessary existence of a nexus between the person and the conduct in the affairs of the enterprise under [section] 1962(c) simply by demonstrating that the city employed the defendants to perform plumbing inspections and related work and the defendants did in fact perform that work); United States v. Cummings, 395 F.3d 392, 397-98 (7th Cir. 2005) (noting that participation is not only operation or management of the enterprise but can include personally facilitating the activities of those who do); United States v. Thompson, No. 99- 41007, 2001 WL 498430, at *8 (5th Cir. Apr. 9, 2001) (considering drug distributors to be operational participants in deciding how much cocaine to buy and what prices to charge upon redistribution); United States v. Diaz, 176 F.3d 52, 92-93 (2d Cir. 1999) (affirming RICO conviction of defendants who had discretionary authority in carrying out instructions but stating that simply taking directions alone, even if necessary for operation of the enterprise, does not sufficiently allege a RICO violation); United States v. Darden, 70 F.3d 1507, 1543 (8th Cir. 1995) (holding defendants could be held liable as operators and managers under [section] 1962(c), although they acted under the control of another individual); MCM Partners, Inc. v. Andrews-Bartlett & Assocs., Inc., 62 F.3d 967, 974 (7th Cir. 1995) (holding defendants participated in control of enterprise by knowingly implementing management's decisions and could be held liable, even though their participation was somewhat reluctant); United States v. Oreto, 37 F.3d 739, 750 (1st Cir. 1994) (holding defendant may participate in the conduct of an enterprise "by knowingly implementing decisions, as well as by making them").
(178.) 18 U.S.C. [section] 1962(d) (2006). The penalty for a RICO conspiracy usually parallels the penalty for the offense that was the object of the conspiracy. In addition, consecutive sentences are often permitted when the substantive violation and the conspiracy are both proved. See United States v. Felix, 503 U.S. 378, 389-90 (1992) (holding substantive crime and conspiracy to commit crime are separate and distinct offenses and therefore, not the same offense for double jeopardy purposes). For a discussion of double jeopardy defenses to consecutive sentences under RICO, see infra Section III.F. The Guidelines treat the underlying offense as if it was a separate count of conviction. U.S. SENTENCING GUIDELINES MANUAL [section] 2E1.1 (2011) [hereinafter U.S.S.G. MANUAL].
(179.) See Salinas v. United States, 522 U.S. 52, 61-66 (1997) (upholding conspiracy conviction where defendant did not accept or agree to accept two bribes but still knew about and agreed to facilitate a racketeering scheme involving bribery); see also United States v. Zichettello, 208 F.3d 72, 100 (2d Cir. 2000) ("To be convicted as a conspirator, one must be shown to have possessed knowledge of only the general contours of the conspiracy.").
(180.) Salinas, 522 U.S. at 63.
(181.) Id. at 65.
(182.) Id. ("[A] conspiracy may ... be punished whether or not the substantive crime ensues, for the conspiracy is ... punishable in itself."); see, e.g., Smith v. Berg, 247 F.3d 532, 534 (3d Cir. 2001) (holding defendant could be convicted of conspiracy to violate RICO even though he could not be charged with committing a substantive predicate act); see also United States v. Lawson, 535 F.3d 434, 444 (6th Cir. 2008) (holding that the conspiracy to commit a substantive crime and the substantive offense itself may qualify as separate predicate acts).
(183.) See United States v. Delano, 55 F.3d 720, 725-29 (2d Cir. 1995) (reversing RICO conviction based on belief that jury might not have convicted defendant if predicate acts of extortion had been properly removed from jury's consideration); see also United States v. Paccione, 949 F.2d 1183, 1197- 98 (2d Cir. 1991) (noting that use of a special verdict allows a determination of the sufficiency of each predicate act toward a RICO conviction).
(184.) See United States v. Marcello, 876 F.2d 1147, 1153 (5th Cir. 1989) (reversing RICO conviction because jury returned general verdict of guilty on RICO count without any indication that the conviction rested on two legally sufficient predicate acts).
(185.) See, e.g., United States v. Shenberg, 89 F.3d 1461, 1471 (11th Cir. 1996) (holding adequate evidence still supported RICO conviction of defendant on at least two counts even though defendant was acquitted on other counts); United States v. Crockett, 979 F.2d 1204, 1209 (7th Cir. 1992) (upholding RICO conviction even though identification of specific predicate acts in indictment was impossible); United States v. Carpenter, 961 F.2d 824, 829 (9th Cir. 1992) (upholding RICO conviction, despite invalidation of one of original predicates, because "RICO conviction may be sustained if only two of the predicate acts are proved beyond a reasonable doubt").
(186.) 502 U.S. 46 (1991).
(187.) Id. at 50-51.
(188.) See United States v. Edwards, 303 F.3d 606, 641 (5th Cir. 2002) (applying the Griffin precedent to the instant RICO appeal); United States v. Vastola, 989 F.2d 1318, 1329-31 (3d Cir. 1993) (citing Griffin in analogizing conspiracy conviction to RICO conviction and upholding a RICO conviction where evidence was sufficient to support two predicate acts); United States v. Eisen, 974 F.2d 246, 258 (2d Cir. 1992) (citing Griffin in stating that RICO convictions will be upheld if evidence is sufficient to support one basis for conviction); United States v. Gray, 292 F. Supp. 2d 71, 89 (D.D.C. 2003) (citing Griffin in upholding a RICO jury's guilty verdict).
(189.) 483 U.S. 143 (1987).
(190.) See id. at 146--49 (reasoning that given the lack of uniformity among state statutes of limitations, the Court was to "borrow" the rule from federal statutes and apply a uniform standard).
(191.) Id. at 155-56; 18 U.S.C. [section] 3282 (2006) (stating five-year statute of limitations period for federal criminal actions is appropriate where no other period is specified).
(192.) Agency Holding Corp., 483 U.S. at 150-54 (applying the statute of limitations period of the Clayton Act because the Court found civil RICO actions analogous to private antitrust actions under the Clayton Act and because the language of the Clayton Act influenced the language of [section] 1964); 15 U.S.C. [section] 15(b) (2006) (imposing four-year limitation period for civil action under Clayton Act).
(193.) See United States v. Vogt, 910 F.2d 1184, 1196 (4th Cir. 1990) (holding that triggering act varies depending on what subsection of [section] 1962 the charges were based on).
(194.) United States v. Wong, 40 F.3d 1347, 1367 (2d Cir. 1994) (holding that jurisdiction over a single RICO act can make defendant liable under substantive RICO for other predicate acts, some of which could not be prosecuted separately); see also United States v. Maloney, 71 F.3d 645, 662 (7th Cir. 1995) (holding one of the predicate acts must have occurred within the five years preceding the date of indictment).
(195.) Vogt, 910 F.2d at 1196-97 (commencing statute of limitations from date of use or investment of proceeds derived from pattern of racketeering activity charged in prosecutions under 18 U.S.C. [section] 1962(a), not from the date upon which the pattern of racketeering activity had come to an end).
(196.) Id. at 1196 (applying last predicate act of racketeering rule to [section] 1962(c) action); see also Bingham v. Zolt, 66 F.3d 553, 559 (2d Cir. 1995) (recognizing "separate accrual rule" in civil case where new claim, with its own limitations period, develops each time plaintiff finds, or should have found, new injury).
(197.) United States v. Eisen, 974 F.2d 246, 264 (2d Cir. 1992); see also United States v. Tocco, 200 F.3d 401, 425 n.9 (6th Cir. 2000) ("RICO conspiracy offense is complete, thus commencing the running of the five-year statute of limitations, only when the purposes of the conspiracy have either been accomplished or abandoned.").
(198.) See United States v. Arnold, 117 F.3d 1308, 1313 (11th Cir. 1997) (stating that the "government satisfies the requirements of the statute of limitations for a non-overt act conspiracy if it alleges and proves that the conspiracy continued into the limitations period," thus obviating requirement of proof of an overt act).
(199.) See United States v. Flaharty, 295 F.3d 182, 192 (2d Cir. 2002) (noting continued participation in the conspiracy is presumed unless defendant takes affirmative steps inconsistent with the conspiracy). For a more detailed discussion about criminal conspiracies, see the Federal Criminal Conspiracy article in this issue.
(200.) See Flaharty, 295 F.3d at 192; see also United States v. Starrett, 55 F.3d 1525, 1550 (11th Cir. 1995) (upholding rejection of defendant's withdrawal defense because he had not communicated his withdrawal to his co-conspirators or disclosed the scheme to law enforcement officials).
(201.) See, e.g., United States v. Berger, 224 F.3d 107, 119 (2d Cir. 2000) (finding that resignation alone from a criminal enterprise is not sufficient for withdrawal).
(202.) United States v. Steele, 685 F.2d 793,803-04 (3d Cir. 1982).
(204.) See id. (rejecting government's argument that silence following defendant's resignation was evidence of continued participation).
(205.) See United States v. Antar, 53 F.3d 568, 583-84 (3d Cir. 1995) (holding that co-defendant brother's abandonment of the company was not sufficient when he still held stock in the enterprise and still may profit therefrom), abrogated on other grounds by Smith v. Berg, 247 F.3d 532, 534 (3d Cir. 2001) (finding Antar court's limited reading of conspiracy liability under 18 U.S.C. [section] 1962(c) inconsistent with the broad application of general conspiracy law set forth by Supreme Court).
(206.) See generally United States v. W. Pac. R.R. Co., 352 U.S. 59 (1956) (discussing the concept of "primary jurisdiction").
(207.) See Boyes v. Shell Oil Prods. Co., 199 F.3d 1260, 1265-66 (11th Cir. 2000) (explaining that primary jurisdiction is generally justified by agency expertise and the need for uniform interpretation of statutes or regulations).
(208.) Reiter v. Cooper, 507 U.S. 258, 268 (1993).
(209.) See, e.g., Trollinger v. Tyson Foods, Inc., 370 F.3d 602, 608-12 (6th Cir. 2004) (rejecting defendant's claim that National Labor Relations Board ("NLRB"), not federal district court, had primary jurisdiction to hear RICO claim); Moon v. Harrison Piping Supply, 375 F. Supp. 2d 577,585-88 (E.D. Mich. 2005) (recommending that RICO dispute be deferred to the Workers' Disability Compensation Bureau to determine plaintiff's entitlement to workers' compensation benefits), rev'd on other grounds, 465 F.3d 719 (6th Cir. 2006). See generally Howard S. Simonoff & Theodore M. Lieverman, The R1CO-ization of Federal Labor Law: An Argument for Broad Preemption, 8 LAB. LAW. 335, 352-53 (1992) (noting the National Labor Relations Act ("NLRA") will supersede any actions that conflict with its national scope but will not preempt state tort actions based upon violence or threats of violence, defamation, trespass, and intentional infliction of emotional distress).
(210.) The specific practices prohibited as "unfair labor practices" are described primarily in 29 U.S.C. [section] 158(a) (unfair labor practices of employers) and [section] 158(b) (unfair labor practices of labor organizations). These sections deem several practices "unfair." See 29 U.S.C. [section] 158(a)(1) (2006) (prohibiting any conduct that interferes with, restrains, or coerces any employee in the exercise of the employee's right to self-organization, to form, join, or assist labor organizations, and to engage in concerted activity, or to refrain from any such activity); id. [section] 158(a)(3), (b)(2) (prohibiting discrimination against any employee on basis of membership or non- membership in any labor organization); id. [section] 158(b)(4) (prohibiting "secondary boycotts"); id. [section] 158(b)(7) (prohibiting recognitional or pre-hiring picketing).
(211.) National Labor Relations Act, ch. 372, 49 Stat. 449 (codified as amended at 29 U.S.C. [section][section] 151-169).
(212.) Tamburello v. Comm-Tract Corp., 67 F.3d 973,978 (1st Cir. 1995) (holding intimidating and harassing an employee into quitting his job in retaliation for union activities constitutes a violation of NLRA, making employee's RICO claims subject to primary jurisdiction of NLRB (quoting MHC v. Int'l Union, United Mine Workers of Am., 685 F. Supp. 1370, 1376-77 (E.D. Ky. 1988))).
(213.) "'[R]acketeering activity' means ... any act which is indictable under title 29, U.S. Code, section 186 (dealing with restrictions on payments and loans to labor organizations) or section 501(c) (relating to embezzlement from union funds)." 18 U.S.C. [section] 1961(1)(c) (2006).
(214.) See United States v. Palumbo Bros., 145 F.3d 850, 862-63 (7th Cir. 1998) (holding RICO charges were not preempted by NLRA when predicate acts consisted of wire and mail fraud, including the mailing of false employee time sheets).
(215.) See Palumbo Bros., 145 F.3d at 868-70 (stating if behavior falls independently under another statute, then preemption may not apply); Tamburello, 67 F.3d at 978 ("RICO should be read as limited by the exclusive jurisdiction of the NLRA only when the Court would be forced to determine whether some portion of the defendant's conduct violated labor law before a RICO predicate act would be established." (quoting MHC, Inc. v. Int'l Union, United Mine Workers of Am., 685 F. Supp. 1370, 1376 (E.D. Ky. 1988))).
(216.) United States v. Int'l Bhd. of Teamsters, 948 F.2d 98, 105-06 (2d Cir. 1991), vacated as moot sub nom. Yellow Freight Sys., Inc. v. United States, 506 U.S. 802 (1992).
(217.) Int'l Bhd. of Teamsters, 948 F.2d at 106 (allowing district court to order employer to allow non-employee union members access to property to campaign in union elections).
(218.) See Dana Corp. v. Blue Cross & Blue Shield Mut. of N. Ohio, 900 F.2d 882, 889 (6th Cir. 1990) (rejecting argument that state insurance agency had exclusive jurisdiction over claims of insurance fraud because agency did not have special competence over fraudulent misrepresentations).
(219.) See Sun City Taxpayers' Ass'n v. Citizens Utils. Co., 45 F.3d 58, 61--62 (2d Cir. 1995) (holding "filed rate doctrine" bars RICO claims by individual ratepayers against public utility); Taffet v. S. Co., 967 F.2d 1483, 1488-90 (11th Cir. 1992) (holding fraudulent misstatements by utility company to regulatory commission to obtain a higher rate did not create a cognizable injury under RICO); H.J. Inc. v. Nw. Bell Tel. Co., 954 F.2d 485, 493 (8th Cir. 1992) (finding "filed rate doctrine" precludes RICO action based upon fraud claims where relief sought under RICO would disturb uniform rates and agency's ratemaking decisions).
(220.) Dana Corp., 900 F.2d at 889 (quoting Nader v. Allegheny Airlines, Inc., 426 U.S. 290, 305-06 (1976)).
(221.) See Cnty. of Suffolk v. Long Island Lighting Co., 907 F.2d 1295, 1310 (2d Cir. 1990) (finding primary jurisdiction doctrine may not be applied in favor of state agency where claim is under federal law and there is no competing federal forum), superseded by statute on other grounds, Pub. L. No. 104-67, 109 Stat. 737 (1995) (codified at 18 U.S.C. [section] 1964(c) (2006)).
(222.) One example is the "Younger abstention" or "equitable restraint" doctrine, which requires federal courts to refrain from enjoining state criminal proceedings except in extraordinary situations. See Younger v. Harris, 401 U.S. 37, 45 (1971). Another example is the "Colorado River abstention," which, on rare occasions where countervailing state interests are at stake, allows federal courts to refrain from entertaining an action when a parallel action is in progress in state court. See Colo. River Water Conservation Dist. v. United States (Colorado River), 424 U.S. 800, 813 (1976). For a general discussion of these doctrines and the principal cases associated with them, see HART & WECHSLER'S THE FEDERAL COURTS AND THE FEDERAL SYSTEM 1213- 58 (Richard H. Fallon, Jr. et al. eds., 6th ed. 2009).
(223.) R.R. Comm'n of Tex. v. Pullman Co., 312 U.S. 496, 501 (1941).
(224.) Burford v. Sun Oil Co., 319 U.S. 315, 327 (1943).
(225.) See Pullman, 312 U.S. at 500-01 ("The resources of equity are equal to an adjustment that will avoid the waste of a tentative decision as well as the friction of a premature constitutional adjudication.").
(226.) See Burford, 319 U.S. at 327. In New Orleans Public Service, Inc. v. Council of New Orleans, 491 U.S. 350 (1989), the Court limited the Burford doctrine by explaining that where adequate state court review is available, a federal court sitting in equity should abstain from interfering with proceedings of state administrative agencies if (i) there are "difficult questions of state law bearing on policy problems of substantial public import whose importance transcends the result in the case then at bar"; or (ii) "exercise of federal review of the question in a case and in similar cases would be disruptive of state efforts to establish a coherent policy with respect to a matter of substantial public concern." New Orleans Pub. Serv., 491 U.S. at 361 (quoting Colorado River, 424 U.S. at 814).
(227.) 115 F.3d 94 (1st Cir. 1997).
(228.) Id. at 95-96.
(229.) Id. at 99 (ordering a stay of the proceedings because the RICO action was directed against concealment or transfer of the property subject to the adjudication of the divorce proceedings). But see Tucker v. First Md. Sav. & Loan, Inc., 942 F.2d 1401, 1405 (9th Cir. 1991) (holding that where a Burford abstention is appropriate, dismissal, rather than a stay, is the appropriate action). In Johnson v. Collins Entertainment Co., 199 F.3d 710 (4th Cir. 1999), the Fourth Circuit considered a district court injunction against the controversial and highly regulated South Carolina video poker industry on behalf of recovering gamblers bringing federal RICO and state law claims. Id. at 719-20. The Fourth Circuit applied the Burford abstention, holding that the injunction "supplanted the legislative, administrative, and judicial processes of South Carolina." Id.
(230.) See Cnty. of Suffolk v. Long Island Lighting Co., 907 F.2d 1295, 1308-09 (2d Cir. 1990) (holding Burford abstention not warranted in suit by county and rate taxpayers alleging utility fraud in rate proceedings before State Public Service Commission, where action was tried solely on federal claims); see also Humana, Inc. v. Forsyth, 525 U.S. 299, 313 (1999) (holding private suit under federal RICO against medical insurer does not frustrate state policies and, therefore, is not blocked by the McCarran-Ferguson Act, ch. 20, 59 Stat 33 (1945) (codified as amended at 15 U.S.C. [section][section] 1011-1015), which provides for, and prohibits federal interference with, state regulation of insurance).
(231.) U.S. CONST. amend. V ("No person shall ... be subject for the same offence to be twice put in jeopardy of life or limb.").
(232.) See United States v. Diaz, 176 F.3d 52, 116 (2d Cir. 1999) (holding double jeopardy challenges fail when the predicate acts upon which defendant's substantive RICO conviction rests are also conspiracies); United States v. Baker, 63 F.3d 1478, 1494 (9th Cir. 1995) (holding defendants may be convicted and punished both for conspiracy to violate RICO and conspiracy to violate Contraband Cigarette Trafficking Act ("CCTA"), even though violation of CCTA is predicate offense for RICO conspiracy and even though both conspiracies stem from same act); United States v. Bennett, 44 F.3d 1364, 1373 (8th Cir. 1995) (holding RICO charge may be combined with charge for a continuing criminal enterprise ("CCE") and drug conspiracy without implicating the Double Jeopardy clause).
(233.) See United States v. White, 116 F.3d 903, 931-32 (D.C. Cir. 1997) (upholding defendant's drug conspiracy sentence and RICO violation sentence, even though conspiracy was lesser included offense of RICO charge, because Congress so intended); Baker, 63 F.3d at 1494 (upholding convictions for conspiracy under both RICO and CCTA).
(234.) See United States v. Morgano, 39 F.3d 1358, 1368 (7th Cir. 1994) (holding there is no double jeopardy violation for consecutive punishment on both RICO offense and predicate crimes by relying on predicate acts in calculating RICO sentence). See generally Anne Bowen Poulin, Double Jeopardy Protection Against Successive Prosecutions in Complex Criminal Cases: A Model, 25 CONN. L. REV. 95, 132-40 (1992) (advocating a "totality of the circumstances" review of predicate acts in RICO convictions in order to provide appropriate double jeopardy protection).
(235.) See United States v. Beasley, 72 F.3d 1518, 1527 (11th Cir. 1996) (holding that naming religious organization as racketeering enterprise does not violate First Amendment when religious teachings were used to "justify, rationalize, and promote crime").
(236.) See Alexander v. United States, 509 U.S. 544, 553-56 (1993) (arguing that the First Amendment provides much greater protection from prior restraints than subsequent punishments for past speech). Alexander involved the application of RICO forfeiture provisions to the assets of an owner of an adult entertainment business who violated federal obscenity laws. Id.
(237.) See Arcara v. Cloud Books, Inc., 478 U.S. 697, 706-07 (1986) (holding criminal and civil sanctions are not subject to "least restrictive means" scrutiny simply because a particular remedy will have some effect on First Amendment activities of those subject to sanction).
(238.) U.S. CONST. amend. VIII ("Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted.").
(239.) See Alexander, 509 U.S. at 558 (holding that criminal forfeiture authorized by the RICO forfeiture statute "is clearly a form of monetary punishment no different, for Eighth Amendment purposes, from a traditional 'fine'").
(240.) See id. at 559 (instructing district court to consider extent of criminal activities and length of time in which petitioner was engaged to determine whether or not forfeiture was "excessive"); United States v. Bieri, 21 F.3d 819, 824 (8th Cir. 1994) ("[C]ourts must consider the proportionality of the forfeiture, which requires a fact-specific evaluation of all the circumstances of the illegal activity."); United States v. Sarbello, 985 F.2d 716, 724 (3d Cir. 1993) (holding that the court may reduce statute's 100% forfeiture penalty to conform with Eighth Amendment when forfeiture is grossly disproportionate to criminal activity); see also United States v. Gilbert, 244 F.3d 888, 921 (11th Cir. 2001) (holding that a forfeiture of the interests in a racketeering-tainted enterprise should be limited to the degree the racketeering tainted those interests and the degree to which those interests belong to the defendant); William W. Taylor, The Problem of Proportionality in RICO Forfeitures, 65 NOTRE DAME L. REV. 885, 892-93 (1990) (arguing the correct limitation upon forfeiture penalties, and the only workable one, is whether property was obtained by or directly used in criminal conduct).
(241.) See United States v. Flores, 572 F.3d 1254, 1268 (11th Cir. 2009) (holding a life sentence for a RICO offense with a special finding of murder does not constitute an Eighth Amendment violation).
(242.) See United States v. Aleman, 609 F.2d 298, 306 (7th Cir. 1979) (holding in a RICO action, prosecutorial discretion does not constitute a violation of the Equal Protection Clause unless abused for reasons of race, religion, or other improper classifications), superseded by statute on other grounds, Sentencing Reform Act of 1984, Pub. L. No. 98-473, [section] 212(a)(2), 98 Stat. 2000 (codified at 18 U.S.C. [section] 3584 (2006)), as recognized in Jake v. Herschberger, 173 F.3d 1059, 1065-66 & n.6 (7th Cir. 1999). See generally 2 WAYNE R. LAFAVE & JEROLD H. ISRAEL, CRIMINAL PROCEDURE [section] 13.4 (1984) (discussing equal protection challenges to decision to prosecute criminal activity).
(243.) Aleman, 609 F.2d at 306.
(244.) See United States v. Oreto, 37 F.3d 739, 751-52 (1st Cir. 1994) (explaining that the disparity was rationally related to the reasonable governmental objective of making guilt easier to prove for unlawful debt cases than cases involving other racketeering activities).
(245.) U.S. CONST. amend. V ("No person shall be ... deprived of life, liberty, or property without due process of law."); U.S. CONST. amend. XIV ("No State shall ... deprive any person of life, liberty, or property without the due process of law.").
(246.) See United States v. Melrose E. Subdivision, 357 F.3d 493,499 (5th Cir. 2004) ("[D]ue process requires the district court to hold a prompt hearing at which the property owner can contest the restraining order--without waiting until trial to do so--at least when the restrained assets are needed to pay for an attorney to defend him on associated criminal charges."); infra Section IV.B.3 (discussing seizure of assets needed by defendant for attorney fees). But see United States v. Register, 182 F.3d 820, 835 (11th Cir. 1999) (finding that trial satisfies the due process requirement implicated by a pre-trial restraint and that the Eleventh Circuit is the only Circuit that holds so). See generally Bruce A. Baird & Carolyn P. Vinson, RICO Pretrial Restraints and Due Process: The Lessons of Princeton/Newport, 65 NOTRE DAME L. REV. 1009, 1011 (1990) (proposing that, for due process concerns, a hearing on reasonableness of restraint is required for narrow group of cases).
(247.) In H.J. Inc. v. Northwestern Bell Telephone Co., 492 U.S. 229, 255 (1989), Justice Scalia, in his concurring opinion, stated, "[t]oday's opinion ... increases rather than removes the vagueness" of Supreme Court guidance with respect to RICO. H.J. Inc., 492 U.S. at 255 (Scalia, J., concurring). Most circuits, however, have not followed Justice Scalia's analysis and have rejected vagueness challenges to RICO. See United States v. Keltner, 147 F.3d 662, 667 (8th Cir. 1998) (adopting other circuits' interpretations in dismissing defendant's void-for-vagueness challenge); Bingham v. Zolt, 66 F.3d 553, 566 (2d Cir. 1995) (rejecting explicitly Justice Scalia's argument and holding that the pattern and enterprise requirements are not unconstitutionally vague); Columbia Nat. Res., Inc. v. Tatum, 58 F.3d 1101, 1108 (6th Cir. 1995) (striking defendant's "as applied" challenge to the pattern of racketeering activity element and holding that "[t]he statute need not define with mathematical precision the conduct forbidden"); Oreto, 37 F.3d at 752 (rejecting due process claim to "continuity plus relationship" test and holding appellants failed to show that the meaning and scope of RICO's pattern element was unclear and vague as applied to their conduct); United States v. Freeman, 6 F.3d 586, 597 (9th Cir. 1993) (holding the term "enterprise" is not unconstitutionally vague because the RICO statute adequately warns putative defendants that their associations may constitute enterprises under RICO). See generally David W. Gartenstein & Joseph F. Warganz, Note, RICO's "Pattern" Requirement: Void For Vagueness?, 90 COLUM. L. REV. 489, 527 (1990) (arguing RICO's pattern requirement is not unconstitutionally vague).
(248.) See Fort Wayne Books, Inc. v. Indiana, 489 U.S. 46, 58 (1989) (holding that, because the Indiana RICO statute totally encompasses the obscenity law, if the obscenity law is not unconstitutionally vague, then RICO cannot be vague either); United States v. Korando, 29 F.3d 1114, 1119 (7th Cir. 1994) ("RICO is a remedial statute only. It does not make criminal activity that is otherwise legal; it only increases the sanction for engaging in activity that is already forbidden.").
(249.) See United States v. Angiulo, 897 F.2d 1169, 1178-80 (1st Cir. 1990) (suggesting that "organized crime" groups could not succeed in vagueness challenges); see also United States v. Masters, 924 F.2d 1362, 1367 (7th Cir. 1991) ("Provided the statutes criminalizing the predicate acts are not unconstitutionally vague ... the defendants are on adequate notice that they are committing crimes.").
(250.) See United States v. Thompson, 685 F.2d 993, 1001 (6th Cir. 1982) (finding that naming "Office of the Governor" a RICO enterprise did not violate Tenth Amendment); United States v. Martino, 648 F.2d 367, 381 (5th Cir. 1981) ("We ... reject the proposition that RICO violates the ... Tenth [Amendment].").
(251.) U.S. CONST. art. I, [section] 8, cl. 3 ("The Congress shall have power ... [t]o regulate commerce ... among the several states.").
(252.) See United States v. Thomas, 114 F.3d 228, 253 (D.C. Cir. 1997) (holding that RICO is within Congress's Commerce Clause power given the statute's requirement that "the RICO enterprise must be 'engaged in' or have activities which 'affect ... interstate commerce,'" and since the statute was "'directed specifically at a particular type of commercial activity'" (quoting United States v. Hawkins, 104 F.3d 437, 439-40 (D.C. Cir. 1997))); see also Gonzales v. Raich, 545 U.S. 1, 18 (2005) ("Congress's power to regulate purely local activities that ... have a substantial effect on interstate commerce [is firmly established]"); United States v. Rodia, 194 F.3d 465,474 (3d Cir. 1999) (holding that Congress had the power to regulate the possession of child pornography even though it had not traveled in interstate commerce because Congress could reasonably believe that intrastate possession could still affect interstate commerce); United States v. Genao, 79 F.3d 1333, 1335 (2d Cir. 1996) (holding that Congress's regulation of intrastate drug activity was a valid exercise of the Commerce Clause).
(253.) See United States v. Fernandez, 388 F.3d 1199, 1218 (9th Cir. 2004) (stating that RICO prosecutions require a "showing of only a de minimis effect on interstate commerce" to meet the jurisdiction requirements); United States v. Chance, 306 F.3d 356, 373 (6th Cir. 2002) ("For purposes of [RICO] the government need only prove that the enterprise's racketeering activities had a de minimis connection with interstate commerce.").
(254.) See United States v. Mapp, 170 F.3d 328, 336 (2d Cir. 1999) (requiring that the predicate act "bear a strong relationship to racketeering activity that affects interstate commerce"); see also United States v. Johnson, 440 F.3d 832, 841 (6th Cir. 2006) ("The government [is] required to prove that the enterprise itself was in some way connected to interstate commerce, not just that the individual acts of racketeering activity had such a connection. But the interstate nature of the predicate acts themselves can establish the required connection between the enterprise and interstate commerce.").
(255.) 18 U.S.C. [section] 1963(a) (2006 & Supp. 2009). This section also provides for life imprisonment if the RICO violation is based on a racketeering charge that carries a life sentence. Id.
(256.) Id. [section] 1963(d)(1)(B).
(257.) Id. [section] 1963(c). This provision makes an exception for bona fide purchasers who at the time of the purchase reasonably had cause to believe that the property was not subject to forfeiture. Id.
(258.) 18 U.S.C. [section] 1964(a) (2006).
(259.) Id. [section] 1964(c).
(260.) 18 U.S.C. [section] 1963(a) (2006 & Supp. 2009); see United States v. Corrado, 227 F.3d 543,552 (6th Cir. 2000) (establishing forfeiture is mandatory according to the language of 18 U.S.C. [section] 1963(a) and is not left to jury's discretion once statutory elements are established).
(261.) 18 U.S.C. [section] 1963(c). Section 1963(c) codifies the "relation-back" doctrine, under which title to forfeitable property vests in the government immediately upon commission of the proscribed acts, even though the defendant maintains physical possession of the property until a forfeiture order is issued. See United States v. BCCI Holdings, 46 F.3d 1185, 1191 (D.C. Cir. 1995) (indicating Congress designed [section] 1963(c) as "a statutory remedial scheme that reaches back to the time of criminal acts to forfeit the property to the United States"); United States v. Ginsbnrg, 773 F.2d 798, 801 (7th Cir. 1985) (explaining that though the government's interest does not attach at time of RICO violation, it does vest, and thus, it can require forfeiture of the entire amount acquired in violation of RICO, not just the amount remaining at time of conviction).
(262.) The plain language of [section] 1963(a) makes clear its breadth:
Whoever violates any provision of section 1962 ... shall forfeit to the United States ... (1) any interest the person has acquired or maintained in violation of section 1962; (2) any (A) interest in; (B) security of; (C) claim against; or (D) property or contractual right of any kind affording a source of influence over; any enterprise which the person has established, operated, controlled, conducted, or participated in the conduct of, in violation of section 1962; and (3) any property constituting, or derived from, any proceeds which the person obtained, directly or indirectly, from racketeering activity or unlawful debt collection in violation of section 1962.
18 U.S.C. [section] 1963(a). Most circuits interpret proceeds of racketeering activity or unlawful debt collection that are forfeitable under [section] 1963(a)(3) to include all revenue tainted by the RICO violation, that is, gross receipts, and do not require the government to prove net profits. See United States v. Hively, 437 F.3d 752, 763 (8th Cir. 2006) ("RICO proceeds are defined as the 'gross receipts of the illegal activity'" (quoting United States v. Simmons, 154 F.3d 765, 769-70 (8th Cir. 1998))); United States v. McHan, 101 F.3d 1027, 1042 (4th Cir. 1996) (holding proceeds are constituted by all receipts, rather than net profits); United States v. Hurley, 63 F.3d 1, 21 (1st Cir. 1995) (emphasizing Congress used the term "proceeds" to alleviate unreasonable burden on government to prove profits). But see United States v. Segal, 495 F.3d 826, 839 (7th Cir. 2007) (confirming that "proceeds" refers to net profits, not gross receipts).
(263.) 18 U.S.C. [section] 1963(b) (2006 & Supp. 2009).
(264.) See United States v. Browne, 505 F.3d 1229, 1278 (11th Cir. 2007) (finding the imposition of joint and several liability upon RICO co-conspirators to be necessary to effectuate the purpose of 18 U.S.C. [section] 1963(a)); Corrado, 227 F.3d at 553 (holding co-conspirators of RICO enterprise jointly and severally liable for entire amount collected in "street tax" extortions, profits from sale of enterprise's interests in hotel, and for amount extorted by one defendant in exchange for assistance in maintaining labor peace); Simmons, 154 F.3d at 769-70 (holding defendant liable for actions of codefendant that were "reasonably foreseeable" to him and stating, "It]he government is not required to prove the specific portion of proceeds for which each defendant is responsible"); Hurley, 63 F.3d at 22 ("[A] member of a conspiracy is responsible for the foreseeable acts of other members of the conspiracy taken in furtherance of the conspiracy."); United States v. Masters, 924 F.2d 1361, 1369 (7th Cir. 1991) (upholding jury order finding each defendant jointly and severally liable for entire amount obtained from racketeering activities).
(265.) 18 U.S.C. [section] 1963(d)(1)(B) (2006 & Supp. 2009) (indicating temporary restraining orders are effective for no more than ninety days but court may grant extension for good cause or if indictment has been filed).
(266.) Id. [section] 1963(d)(1)(A), (B).
(267.) Id. [section] 1963(d)(1)(B).
(268.) Id. [section] 1963(d)(2).
(270.) See United States v. Pantelidis, 335 F.3d 226, 232 (3d Cir. 2003) ("It is undisputed that asset restraint orders are to be treated like injunctions which are immediately appealable under [28 U.S.C.] [section] 1292(a)(1)."); HBE Leasing Corp. v. Frank, 48 F.3d 623,632 (2d Cir. 1995) (ruling that one may immediately appeal an interlocutory order granting injunction under 28 U.S.C. [section] 1292(a)(1)); see also United States v. Jenkins, 974 F.2d 32, 34 (5th Cir. 1992) (holding denial of a motion to dissolve an order preserving forfeitable property to be immediately appealable).
(271.) 18 U.S.C. [section] 1963(e) (2006 & Supp. 2009).
(272.) Id. [section] 1963(m).
(273.) See Pantelidis, 335 F.3d at 234 ("[S]ubstitute assets are not subject to pretrial restraint" under RICO forfeiture provisions.); United States v. Riley, 78 F.3d 367, 371 (8th Cir. 1996) (stating that 18 U.S.C. [section] 1963 does not authorize the placement of preconviction restraints on substitute assets).
(274.) See United States v. Parrett, 530 F.3d 422, 431 (6th Cir. 2008) (holding that the plain language of the substantially similar federal criminal forfeiture statute, 21 U.S.C. [section] 853 (2006 & Supp. 2009), does not authorize restraint of substitute assets prior to trial); United States v. Ripinsky, 20 F.3d 359, 363 (9th Cir. 1994) (deciding that substitute assets cannot be placed under pretrial restraint under 21 U.S.C. [section] 853 or 18 U.S.C. [section] 982 (2006 & Supp. 2010)); United States v. Floyd, 992 F.2d 498, 500 (5th Cir. 1993) (holding that [section] 853 does not permit preconviction restraint of substitute assets).
(275.) See United States v. Gotti, 155 F.3d 144, 148-49 (2d Cir. 1998) (recognizing that [section] 1963(d) is not a blanket authorization for pretrial restraint of substitute assets).
(276.) See In re Billman, 915 F.2d 916, 921 (4th Cir. 1990) (arguing Congress intended forfeiture provisions to be liberally construed and [section] 1963(d) must be read in conjunction with [section] 1963(m)). The Fourth Circuit is the only circuit court that has addressed this issue and found that RICO permits pre-trial restraint on substitute assets; see also United States v. Jarvis, 499 F.3d 1196, 1204 n.8 (10th Cir. 2007).
(277.) 18 U.S.C. [section] 1963(c) (2006 & Supp. 2009).
(278.) Id. [section] 1963(d).
(279.) Id. [section] 1963(c); see United States v. BCCI Holdings, 46 F.3d 1185, 1191-92 (D.C. Cir. 1995) (holding depositors to banks, as general creditors, can never have interest in specific forfeited property and thus are not "bona fide purchasers" entitled to recover assets from court).
(280.) 18 U.S.C. [section] 1963(g) (authorizing the Attorney General to grant petitions for action necessary to protect interests of innocent parties); see BCCI Holdings, 46 F.3d at 1192 (establishing general creditors must seek relief from Attorney General instead of the court adjudicating forfeiture).
(281.) See United States v. Saccoccia, 354 F.3d 9, 15 (1st Cir. 2003) (citing United States v. Lester, 85 F.3d 1409, 1414 (9th Cir.1996)).
(283.) See United States v. Borromeo, 954 F.2d 245,449 (4th Cir. 1992) (holding that forfeiture of funds derived from defendant's narcotics activities did not unconstitutionally deprive him of the services of a paid attorney).
(284.) 21 U.S.C. [section] 848 (2006); 21 U.S.C. [section] 853 (2006 & Supp. 2009) (codifying forfeiture provision associated with CCE statute). In 1984, Congress amended both the RICO forfeiture provision (18 U.S.C. [section] 1963) and the CCE forfeiture provision (21 U.S.C. [section] 853) to make them almost identical. Comprehensive Crime Control Act of 1984, Pub. L. No. 98-473, [section][section] 302, 2301, 98 Stat. 1837; see also FTC v. Assail., Inc., 410 F.3d 256, 265 (5th Cir. 2005) (noting that, similar to a third-party transferee, an attorney paid with tainted funds must show that he performed an inquiry that left him without cause to reasonably believe that the funds were subject to forfeiture).
(285.) 21 U.S.C. [section] 801 (2006); 21 U.S.C. [section] 853 (2006 & Supp. 2009); see United States v. Bissell, 866 F.2d 1343, 1351-54 (11th Cir. 1989) (finding CDAPCA forfeiture amendment authorizing pretrial restraint of assets used to pay for attorneys did not violate Sixth Amendment right to counsel as long as defendants received competent representation from appointed counsel); United States v. Nichols, 84l F.2d 1485, 1493, 1502, 1506-08 (10th Cir. 1988) (holding attorney's fees are not exempt from criminal forfeiture under CDAPCA and such forfeiture does not violate defendant's Fifth Amendment fight to a fair trial or Sixth Amendment right to counsel).
(286.) See Margaret Cotter & Michael Gilbert, Attorney Fee Forfeiture, 29 AM. CRIM. L. REV. 639 (1992), for a more detailed discussion of the issues surrounding the forfeiture of funds intended to be used to pay for counsel.
(287.) In Caplin & Drysdale, Chartered v. United States, 491 U.S. 617, 626-28 (1989), the Court held that forfeiture of assets does not violate the Sixth Amendment right to counsel, as a defendant has no right to spend money belonging to another, even if utilization of such funds constitutes the sole means by which to obtain counsel of choice. The Court relied on the principle that the defendant's forfeited property vests in the government upon commission of the crime charged. Id.
(288.) See United States v. E-Gold, Ltd., 521 F.3d 411, 415 (D.C. Cir. 2008) (holding that the Fifth Amendment Due Process Clause entitles defendants to an adversary hearing upon seizure of their assets after the issuance of an indictment at least when they have shown their inability to retain their chosen counsel without the seized assets); United States v. Michelle's Lounge, 39 F.3d 684, 700-01 (7th Cir. 1994) ("[D]ue process requires the government to participate in a post-seizure adversary hearing on probable cause when ... the government has seized through civil forfeiture all of the assets a criminal defendant needs to obtain counsel."); United States v. Monsanto, 924 F.2d 1186, 1203 (2d Cir. 1991) (holding the Fifth and Sixth Amendments, considered together, require a post-restraint, pretrial heating to establish probable cause for such forfeiture).
(289.) See 18 U.S.C. [section] 3553(a)(4) (2006 & Supp. 2010). In 2005, the Supreme Court severed the provision that made the Guidelines mandatory, rendering them "effectively advisory." See United States v. Booker, 543 U.S. 220, 245 (2005); see also Kimbrough v. United States, 552 U.S. 85, 101 (2007) ("[W]hile [the federal sentencing statute] still requires a court to give respectful consideration to the Guidelines, Booker 'permits the court to tailor the sentence in light of other statutory concerns as well.'"). District court sentences are reviewed for reasonableness, and a sentence within the applicable Guidelines range is presumptively reasonable. See Rita v. United States, 551 U.S. 338, 347-50 (2007).
(290.) See U.S.S.G. MANUAL app. A (indexing the guidelines applicable to each statutory violation).
(291.) Id. [section] 2E1.1(a)(1), (2); see United States v. Tocco, 200 F.3d 401,430-31 (6th Cir. 2000) (instructing district court to select offense level attributable to underlying racketeering activity if it exceeds nineteen); United States v. Olson, 22 F.3d 783, 786 (8th Cir. 1994) (ruling district court misapplied [section] 2E1.1(a) in calculating defendant's base offense level at seventeen because the base offense level for a RICO offense is nineteen, unless the offense level applicable to underlying racketeering activity is greater); United States v. Butler, 954 F.2d 114, 121-22 (2d Cir. 1992) (finding error in applying base offense level of less than nineteen for RICO conviction when the offense level applicable to underlying racketeering activity was less than nineteen).
(292.) U.S.S.G. MANUAL [section] 2E 1.1, cmt. n. 1. The Seventh and Eleventh Circuits held that a defendant's leadership role in the overall RICO conspiracy, rather than the leadership role in the underlying offenses, can be the basis for increasing the offense level. See United States v. Ivezaj, 568 F.3d 88, 99 (2d Cir. 2009) (agreeing with the district court's conclusion that courts should make a defendant's role adjustment based on the defendant's role in the overall RICO enterprise); United States v. Yeager, 210 F.3d 1315, 1317 (11th Cir. 2000) (approving four-level enhancement for defendant's role in overall RICO conspiracy, rather than finding defendant played a leadership role in underlying drug conspiracy); United States v. Damico, 99 F.3d 1431, 1436-38 (7th Cir. 1996) (holding that the district court properly examined the defendant's role in an overall racketeering conspiracy in deciding the offense level adjustment for his role in a particular offense instead of considering his role in the particular offense).
(293.) See United States v. Bustamante, 45 F.3d 933,947 (5th Cir. 1995) (holding district court did not abuse its discretion by determining defendant's base offense level to be nineteen and then increasing by two for abuse of position of public trust, even though his congressional office position had already been used to satisfy RICO enterprise element); United States v. Ford, 21 F.3d 759, 764--67 (7th Cir. 1994) (rejecting defendant's argument that enhancement for abuse of position of public trust should not apply when offense itself entails an abuse of public trust).
(294.) The application notes explain:
Certain conduct may be charged in the count of conviction as part of a "pattern of racketeering activity" even though the defendant has previously been sentenced for that conduct. Where such previously imposed sentence resulted from a conviction prior to the last overt act of the instant offense, treat as a prior sentence under [section] 4A1.2(a)(1) and not as part of the instant offense. This treatment is designed to produce a result consistent with the distinction between the instant offense and criminal history found throughout the guidelines. If this treatment produces an anomalous result in a particular case, a guideline departure may be warranted.
U.S.S.G. MANUAL [section] 2E1.1, cmt. n.4; see United States v. Marrone, 48 F.3d 735, 737 (3d Cir. 1995) (stating predicate offenses are valid bases for criminal history points in sentencing for RICO conviction when defendant is convicted of predicate offense before last overt RICO offense); United States v. Minicone, 960 F.2d 1099, 1111 (2d Cir. 1992) (finding district court reasonably construed Comment 4 to mean conduct underlying previously imposed sentence should be used in calculating criminal history but not base level for instant offense); see also United States v. Crosby, 913 F.2d 313, 314-15 (6th Cir. 1990) (stating state court conviction could be included in calculating defendant's criminal history score for federal sentencing for participation in Continuing Criminal Enterprise, even though activities were part of enterprise).
(295.) U.S.S.G. MANUAL [section] 2E1.1, cmt. n.2.
(296.) Id. ch. 3, pt. D (explaining how to calculate single offense level for multiple count convictions).
(297.) United States v. Marino, 277 F.3d 1l, 25 (1st Cir. 2002) (requiting that a district court need only find relevant conduct to have occurred by a preponderance of evidence); see also United States v. Massino, 546 F.3d 123, 135-36 (2d Cir. 2008) (holding that relevant conduct may include "underlying predicate acts" as long as they were proven by a preponderance of evidence).
(298.) U.S.S.G. MANUAL [section] 1B1.3(a)(1); see United States v. Tocco, 306 F.3d 279, 288 (6th Cir. 2002) (finding co-conspirators' racketeering activity involving a hotel was relevant conduct in determining base offense level); United States v. Wing, 135 F.3d 467, 470 (7th Cir. 1998) (holding that knowing about but not directly overseeing, collection of illegal "street tax" is relevant conduct in furtherance of conspiracy): United States v. Miranda-Santiago, 96 F.3d 517, 524 (1st Cir. 1996) (holding defendants in drug conspiracy responsible not only for quantities of drugs they handled but also for amounts defendants reasonably foresaw would be involved in conspiracy).
(299.) See United States v. Campbell, 279 F.3d 392, 399-400 (6th Cir. 2002) (holding that the defendant's awareness of an overall criminal operation was not enough to satisfy that the operation was within the scope of his agreement and that, therefore, he could not be accountable for activities of whole operation). Compare United States v. Studley, 47 F.3d 569, 574 (2d Cir. 1995) (remanding for a determination of whether defendant sales representative's agreement to participate in a fraudulent telemarketing scheme was limited to his own activity or encompassed fraudulent activity of other representatives within company), with United States v. Duliga, 204 F.3d 97, 101 (3d Cir. 2000) (finding defendant was a key player in inception of telemarketing scheme and finding that district court properly included the entire amount of loss generated by the scheme in determining defendant's offense level).
(300.) See Studley, 47 F.3d at 575 ("[T]he fact that defendant is aware of the scope of the overall operation is not enough to hold him accountable for the activities of the whole operation.").
(301.) See Tocco, 200 F.3d at 430-31 (remanding for findings as to what criminal activities by defendant were in furtherance of the conspiracy).
(302.) See 18 U.S.C. [section] 1964 (2006). It provides in relevant part:
(a) The district courts of the United States shall have jurisdiction to prevent and restrain violations of section 1962 of this chapter by issuing appropriate orders, including, but not limited to: ordering any person to divest himself of any interest, direct or indirect, in any enterprise; imposing reasonable restrictions on the future activities or investments of any person, including, but not limited to, prohibiting any person from engaging in the same type of endeavor as the enterprise engaged in, the activities of which affect interstate or foreign commerce; or ordering dissolution or reorganization of any enterprise, making due provision for the rights of innocent persons. (b) The Attorney General may institute proceedings under this section. Pending final determination thereof, the court may at any time enter such restraining orders or prohibitions, or take such other actions, including the acceptance of satisfactory performance bonds, as it shall deem proper.... (d) A final judgment or decree rendered in favor of the United States in any criminal proceeding brought by the United States under this chapter shall estop the defendant from denying the essential allegations of the criminal offense in any subsequent civil proceeding brought by the United States.
(303.) Id. [section] 1964(a); see United States v. Philip Morris USA Inc., 396 F.3d 1190, 1198-1201 (D.C. Cir. 2005) (holding that, unlike divestiture, which is a forward-looking remedy, disgorgement of profits from past unlawful conduct is a backward-looking remedy not contemplated by RICO); Richard v. Hoechst Celanese Chem. Grp., Inc., 355 F.3d 345, 354-55 (5th Cir. 2003) (holding that equitable remedies such as disgorgement are available under [section] 1964(a), but only "to prevent and restrain future conduct rather than punish past conduct" (quoting United States v. Carson, 52 F.3d 1173, 1182 (2d Cir. 1995))). See generally United States v. Rx Depot, Inc., 438 F.3d 1052, 1059 (10th Cir. 2006) (holding that in contrast to RICO, disgorgement is acceptable under the FDCA).
(304.) 18 U.S.C. [section] 1964(a); see, e.g., United States v. Private Sanitation Indus. Ass'n, 995 F.2d 375,377 (2d Cir. 1993) (enjoining defendants from associating with co-defendants or known members of organized crime for commercial purposes); United States v. Local 560, 974 F.2d 315, 342, 344 (3d Cir. 1992) (banning defendants from holding union office, participating in union rallies, or influencing union affairs in any way, and prohibiting association between corrupt union officials and union members).
(305.) 18 U.S.C. [section] 1964(a).
(306.) Russello v. United States, 464 U.S. 16, 26 (1983) (affirming judgment of forfeiture against defendant for his involvement in arson ring that resulted in his fraudulent receipt of insurance proceeds for fire loss of building he owned).
(307.) See United States v. Sasso, 215 F.3d 283, 289-93 (2d Cir. 2000) (holding, "[i]n light of [section] 1964(a)'s expansive language, its legislative history, and the traditional power of the district courts to fashion equitable remedies," the district court was authorized to order former union officer to contribute toward cost of monitoring union that was tainted by his racketeering activities).
(308.) See supra notes 6-9 and accompanying text (discussing liberal construction of RICO).
(309.) See Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 491 n.10 (1985) ("[I]f Congress' liberal-construction mandate is to be applied anywhere, it is in [section] 1964, where RICO's remedial purposes are most evident.").
(310.) United States v. Private Sanitation Indus. Ass'n, 995 F.2d 375, 377 (2d Cir. 1993) (upholding injunctive relief against company convicted of using force and threatening to use force against others engaged in collection of solid waste).
(311.) 18 U.S.C. [section] 1964(a) (2006); see United States v. Local 30, 871 F.2d 401, 407 (3d Cir. 1989) (finding courts can restrain and prevent future violations so long as due provision is made for rights of innocent parties).
(312.) See Private Sanitation, 995 F.2d at 377-78 (permitting curtailment of associational rights in furtherance of significant governmental interests); United States v. Local 560, 974 F.2d 315, 345 (3d Cir. 1992) (concluding governmental interest in eliminating organized crime from unions justifies curtailment of associational rights).
(313.) See Klay v. Humana, Inc., 382 F.3d 1241, 1250 (11th Cir. 2004) (noting that any class of persons, including a class of persons asserting a RICO claim, may be certified only after meeting the certification requirements of Rule 23 of the Federal Rules of Civil Procedure).
(314.) 18 U.S.C. [section] 1964(c) (2006); see also 18 U.S.C. [section] 1965 (2006) (dealing with venue and process in civil RICO actions); cf. Sys. Mgmt., Inc. v. Loiselle, 154 F. Supp. 2d 195,207 (D. Mass. 2001) (awarding fees and costs totaling $184,232 to the plaintiff in a civil RICO case, despite fact that treble RICO damages awarded to plaintiff amounted to only $1,018). See generally Michael J. Kump, The Rule of Proportionality in Civil RICO Suits; Attorney's Fees and Costs can Greatly Increase the Financial Risk for Defendants, L.A. LAW., Dec. 2002, at 12, 13 (discussing failed attempts at using rule of proportionality in civil RICO cases to reduce awards of attorneys' fees and costs that were not proportional to amount of compensatory damages awarded by juries).
(315.) 473 U.S. 479 (1985).
(316.) Id. at 500. First, the Court struck down the Second Circuit's requirements that a plaintiff may file a civil suit under [section] 1964(c) only after showing a criminal RICO conviction and proving a "racketeering injury" distinct from harm caused by predicate acts. Id. at 488-95. Second, the Court established that plaintiff has a claim under [section] 1964(c) if defendant engaged in a pattern of racketeering activity in a manner forbidden by [section] 1962 and such activity injured plaintiff in his business or property. Id. at 495. Third, the Court clarified that for a civil claim based on a violation of [section] 1962(c), "[the] [c]ompensable injury necessarily is the harm caused by [the] predicate acts" of a RICO violation. Id. at 497. Finally, the Court recognized that Congress may not have anticipated the use of civil RICO against legitimate businesses but noted that Congress intended to target both legitimate and illegitimate enterprises engaged in criminal conduct prohibited by substantive provisions of the statute. Id. at 499.
(317.) 510 U.S. 249 (1994).
(318.) The Seventh Circuit ruled that civil RICO was limited by the requirement that either the enterprise or the racketeering activity be economically motivated. Nat'l Org. for Women, Inc. v. Scheidler, 968 F.2d 612, 629 (7th Cir. 1992) ("[N]on-economic crimes committed in furtherance of non-economic motives are not within the ambit of RICO."), rev'd, 510 U.S. 249 (1994).
(319.) NOW 1, 510 U.S. at 259 (granting standing to abortion clinics that brought civil RICO action against antiabortion groups alleged to have conspired to use force against clinic employees and patients). The Court explained that:
[T]he "enterprise" in [[section] 1962(c)] connotes generally the vehicle through which the unlawful pattern of racketeering activity is committed, rather than the victim of that activity. Subsection (c) makes it unlawful for "any person employed by or associated with any enterprise ... to conduct or participate ... in the conduct of such enterprise's affairs through a pattern of racketeering activity".... Consequently, since the enterprise in subsection (c) is not being acquired, it need not have a property interest that can be acquired nor an economic motive for engaging in illegal activity; it need only be an association-in-fact that engages in a pattern of racketeering activity.
(320.) The intracorporate conspiracy doctrine requires that courts attribute acts of corporate agents to a corporation itself, negating the multiplicity of actors necessary for conspiracy formation; thus, a corporation cannot conspire with its employees, and its employees, when acting in the scope of their employment, cannot conspire among themselves. See Kirwin v. Price Commc'ns Corp., 391 F.3d 1323, 1326 (11th Cir. 2004) (holding that the intracorporate conspiracy doctrine does not bar [section] 1962(d) claims); Webster v. Omnitrition Int'l, Inc., 79 F.3d 776, 787 (9th Cir. 1996) (holding that intracorporate conspiracies do threaten RICO's goals of preventing the infiltration of legitimate businesses by racketeers and separating racketeers from their profits); Ashland Oil, Inc. v. Arnett, 875 F.2d 1271, 1281 n.l0 (7th Cir. 1989) (same). But see Fogie v. THORN Americas, Inc., 190 F.3d 889, 899 (8th Cir. 1999) (holding that that the intracorporate conspiracy doctrine does bar [section] 1962(d) claims); Detrick v. Panalpina, Inc., 108 F.3d 529, 544 (4th Cir. 1997) (same).
(321.) See 18 U.S.C. [section] 1964(c) (2006).
(322.) Id. [section] 1962(a).
(323.) See Nolen v. Nucentrix Broadband Networks Inc., 293 F.3d 926, 929 (5th Cir. 2002) (holding "'any [compensable] injury must flow from the use or investment of racketeering income'" (quoting St. Paul Mercury Ins. Co. v. Williamson, 224 F.3d 425, 441-45 (5th Cir. 2000) (holding plaintiff could bring suit for injuries resulting from deposit of funds into RICO enterprise but not for injuries resulting just from predicate acts))); Simon v. Value Behavioral Health, Inc., 208 F.3d 1073, 1082 (9th Cir. 2000) (dismissing claim alleging fraudulent denial of health benefits and subsequent investment of proceeds in groups of preferred medical providers because plaintiff failed to demonstrate that he was injured by investment of racketeering income), overruled on other grounds by Odom v. Microsoft Corp., 486 F.3d 541,551 (9th Cir. 2007); Fogie v. THORN Americas, Inc., 190 F.3d 889, 895-96 (8th Cir. 1999) (holding reinvestment of income obtained from unlawful debt collection did not result in compensable injury because injury was not separate and distinct from injuries caused by predicate acts); Vemco, Inc. v. Camardella, 23 F.3d 129, 132-33 (6th Cir. 1994) (requiring plaintiff to plead specific injury caused by investment of income into racketeering enterprise, distinct from any injuries caused by predicate acts of racketeering); Danielsen v. Burnside-Ott Aviation Training Ctr., 941 F.2d 1220, 1230 (D.C. Cir. 1991) (finding that employees' allegations that contractors intentionally underpaid legally required minimum wages failed to allege injury arising from use or investment of racketeering income and thus, did not sufficiently plead RICO claim); Ouaknine v. MacFarlane, 897 F.2d 75, 82-83 (2d Cir. 1990) (dismissing claim for violation of [section] 1962(a) because plaintiff did not allege any facts asserting injury by reason of defendant's investment of racketeering income).
(324.) See Potomac Elec. Power Co. v. Elec. Motor & Supply, Inc., 262 F.3d 260, 264 (4th Cir. 2001) (holding plaintiff need not show damages flowed from use or investment of racketeering income but only that damages flowed from racketeering activity itself).
(325.) See Discon, Inc. v. NYNEX Corp., 93 F.3d 1055, 1063 (2d Cir. 1996) ("[l]n order to state a cause of action under subsection 1962(b), plaintiffs must allege 'acquisition' injury, analogous to the 'use or investment injury' required under [section] 1962(a)." (quoting Danielsen, 941 F.2d at 1231)), vacated on other grounds, 525 U.S. 128 (1998); Crowe v. Henry, 43 F.3d 198,205 (5th Cir. 1995) (concluding both subsections 1962(a) and (b) require "a nexus between the claimed RICO violations and the injury suffered by the plaintiff').
(326.) See Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 497 (1985) ("Any recoverable damages occurring by reason of a violation of [section] 1962(c) will flow from commission of the predicate acts."); see also Hemi Grp., LLC v. City of N.Y., 130 S. Ct. 983,990 (2010) (concluding that because the City cannot show that it lost tax revenue "by reason of" the alleged RICO violation, it cannot state a RICO claim); Abrahams v. Young & Rubicam, Inc., 79 F.3d 234, 238 (2d Cir. 1996) (holding plaintiff who suffered damage to reputation from public links to defendant's bribery scandal lacked standing to sue for violation of [section] 1962(c) because his injuries did not flow from harms that predicate acts were intended to cause (citing Am. Express Co. v. Robinson, 39 F.3d 395, 399-400 (2d Cir. 1994))).
(327.) See Rehkop v. Berwick Healthcare Corp., 95 F.3d 285,289 (3d Cir. 1996) (explaining employee who lost his job because of refusal to conceal conspiracy to defraud Medicare and Medicaid was not direct victim of racketeering activity and thus could not sue for violation of [section] 1962(c)); Bowman v. W. Auto Supply Co., 985 F.2d 383, 385 (8th Cir. 1993) (holding that employee terminated for refusing to participate in employer's alleged fraudulent activities lacked standing to sue for violation of [section] 1962(c)); Reddy v. Litton Indus., Inc., 912 F.2d 291, 293-94 (9th Cir. 1990) (ruling employee terminated for refusing to participate in cover-up of illegal bribes to foreign officials lacked standing to sue for violation of [section] 1962(c)).
(328.) 529 U.S. 494 (2000) (involving civil RICO claim based on alleged violation of [section] 1962(d) brought by plaintiff who was terminated from his employment for refusing to participate in racketeering activities).
(329.) See id. at 505-07 (finding plaintiff did not have standing because his termination was an overt act in furtherance of the defendants' conspiracy, and was not an act of racketeering or otherwise unlawful under the statute). The Court rejected the plaintiff's argument that such an interpretation of [section] 1962(d) would render it meaningless by requiring plaintiffs to also show a violation of [section] 1962(a), (b), or (c), stating that a plaintiff could rely on [section] 1962(d) to "sue co-conspirators who might not themselves have violated one of the substantive provisions of [section] 1962." Id. at 507.
(330.) See RWB Servs., LLC v. Hartford Computer Grp., 539 F.3d 681,686 (7th Cir. 2008) ("If a predicate act was sufficient to cause the plaintiff's injury and that predicate act was part of the entire 'violation of section 1962,' the plaintiff has plead causation."); Baisch v. Gallina, 346 F.3d 366, 372 (2d Cir. 2003) (holding that the plaintiff's injury must have been proximately caused either by a pattern of racketeering activity or an individual predicate act violating the RICO statute); see also Wilkie v. Robbins, 551 U.S. 537, 563-64 (2007) (holding that government violations of the Hobbs Act and the Wyoming blackmail statute, which it committed in effort to obtain an easement over a landowner's property for the exclusive benefit of the government, did not qualify as a predicate offense under RICO because the alleged conduct did not fit the traditional definition of extortion).
(331.) See Holmes v. Sec. Investor Prot. Corp., 503 U.S. 258, 268 (1992) (holding link between stock manipulation, which caused the injury, and losses to nonpurchasing customers was too contingent on the broker dealer's inability to pay the claims, making it too remote to satisfy the proximate cause requirement). As plaintiffs continue to bring more creative civil RICO claims, proximate causation has proven to be a major obstacle to damage awards. In DeFalco v. Bernas, 244 F.3d 286, 329 (2d Cir. 2001), the Second Circuit held that plaintiffs had successfully demonstrated that the Town of Delaware, NY, was being operated as a RICO enterprise; however, the plaintiffs' damages award was vacated because they failed to prove proximate causation. DeFalco, 244 F.3d at 329; see also Anza v. Ideal Steel Supply Corp., 547 U.S. 451, 460-61 (2006) (holding that competitor's use of proceeds from alleged tax fraud to lower prices was not the proximate cause of entrepreneur's lost sales because the state, rather than the entrepreneur, was the direct victim of the competitor's alleged gain); Abrahams v. Young & Rubicam Inc., 79 F.3d 234, 237 (2d Cir. 1996) (holding that in the RICO context proximate cause differs from common law proximate cause because when plaintiff brings suit under RICO he "must show both that he is within the class the statute sought to protect and that the harm done was one that the statute was meant to prevent"). In Anza, the Court noted that "[w]hen a court evaluates a RICO claim for proximate causation, the central question it must ask is whether the alleged violation led directly to the plaintiff's injuries." Anza, 547 U.S. at 461. The Court also declined to consider an entrepreneur's illegal investment claim against a competitor under RICO because the Court of Appeals had not addressed whether the competitor's alleged illegal investment proximately caused entrepreneur's lost sales, ld. at 461-62.
(332.) 15 U.S.C. [section] 15(a) (2006) ("[A]ny person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefor.., and shall recover threefold the damages by him sustained, and the cost of suit, including a reasonable attorney's fee.").
(333.) See Holmes, 503 U.S. at 268. Because the 91st Congress used the same language in drafting [section] 1964(c) of RICO that had been used in the Clayton Act, the Court concluded that Congress intended the language to have the same meaning. Id. The comparable part of [section] 1964(c) states, "Any person injured in his business or property by reason of a violation of section 1962 of this chapter may sue therefor in any appropriate United States District Court and shall recover threefold the damages he sustains and the cost of his suit, including a reasonable attorney's fee." 18 U.S.C. [section] 1964(c) (2006).
The Court went on to describe three reasons why proximate cause is a central requirement in causation. First, "the less direct an injury is, the more difficult it becomes to ascertain the amount of a plaintiff's damages attributable to the violation, as distinct from other, independent, factors." Holmes, 503 U.S. at 269. Second, without proximate cause, the courts would have to implement rules apportioning damages among plaintiffs, so as to "obviate the risk of multiple recoveries." ld. Third, because directly injured plaintiffs will enforce the law as private attorneys general, there is little need to deal with indirect injury problems. Id. at 269-70.
(334.) 553 U.S. 639 (2008).
(335.) ld. at 648-49 (holding that bidders in a tax lien public auction were not required to establish reliance in their suit against defendant for allegedly obtaining a disproportionate share of the liens by filing false compliance attestations).
(336.) See Evans v. City of Chi., 434 F.3d 916, 925-26 (7th Cir. 2006) (holding that personal injuries and pecuniary losses resulting from those injuries do not provide standing for a civil RICO action).
(337.) See Cedric Kushner Promotions, Ltd. v. King, 533 U.S. 158, 163 (2001) (holding president and sole shareholder of corporation was a "person" distinct from the enterprise subject to liability under RICO).
(338.) Id. at 163; see supra Section II.D.3 (discussing the person-enterprise rule).
(339.) See D&S Auto Parts, Inc. v. Schwartz, 838 F.2d 964, 967-68 (7th Cir. 1988) (asserting that the statute should be read to "impose liability upon a corporation which is a perpetrator of illegal activity but not upon an unwitting conduit of its employees' RICO violations"); Schofield v. First Commodity Corp., 793 F.2d 28, 32-34 (1st Cir. 1986) (noting that majority of courts reject vicarious corporate liability under [section] 1962(c)).
(340.) See Schofield, 793 F.2d at 32 ("[C]oncept of vicarious liability is directly at odds with the Congressional intent behind section 1962(c)").
(341.) See Petro Tech, Inc. v. W. Co. of N. Am., 824 F.2d 1349, 1360 (noting that language of subsection (a) contains no language suggesting the two must be distinct, unlike subsection (c)).
(342.) See id.
(343.) Williams v. Mohawk Indus., Inc., 465 F.3d 1277, 1284 (11th Cir. 2006) ('"[T]he definitive factor in determining the existence of a RICO enterprise is the existence of an association of individual entities, however loose or informal, that furnishes a vehicle for the commission of two or more predicate crimes.'" (quoting United States v. Goldin Indus., Inc., 219 F.3d 1271, 1275 (11th Cir. 2000))).
(345.) Cf. United States v. Landau, 155 F.3d 93, 107 (2d Cir. 1998) ("'A claim that a statute of limitations bars a suit is an affirmative defense, and, as such, it is waived if not raised in the answer to the complaint.'" (quoting Litton Indus. v. Lehman Bros., 967 F.2d 742, 751-52 (2d Cir. 1992))).
(346.) 483 U.S. 143 (1987).
(347.) Id. at 156 (adopting four-year statute of limitations based on Clayton Act); see Klehr v. A.O. Smith Corp., 521 U.S. 179, 183 (1997) (reaffirming the four year statute of limitations); see also 15 U.S.C. [section] 15(b) (2006) (imposing a four-year limitation period for civil action under the Clayton Act). The Court used the limitation period of the Clayton Act because it found that civil RICO actions are analogous to private antitrust actions under the Clayton Act and because the language of the Clayton Act influenced the language of [section] 1964 of RICO.
(348.) Historically, lower courts used three different rules to determine when the statute of limitations begins to run: (i) the injury discovery rule (also known as discovery accrual rule); (ii) the "injury and pattern discovery" rule; and (iii) the "last predicate act" rule. The Court rejected the "last predicate act" rule in Klehr, 521 U.S. at 186-87. The Court found that the rule was unlawful for two reasons. First, the rule could create a longer limitations period than Congress contemplated because a series of predicate acts can continue indefinitely. Id. at 180. Second, the Court determined, "the rule is inconsistent with [section] 4B of the Clayton Act, under which a cause of action accrues ... when a defendant commits an act that injures a plaintiff's business." Id.
In Rotella v. Wood, the Court dismissed the "injury and pattern discovery" rule, concluding the rule would potentially result in an excessively long limitations period, which contradicted Congress's intention to reject a long limitations period for civil claims brought under the Clayton Act and RICO. 528 U.S. 549, 555-58 (2000). The Court also noted that the considerable effort that may be required before a RICO plaintiff can tell whether a pattern of racketeering is demonstrable does not warrant a longer limitations period, Id.
Although the injury discovery rule has not been rejected by the Court, the Court has not explicitly embraced this as the final rule on determining when a civil RICO claim begins to accrue, Id. at 554 (stating the Court was not establishing a final rule, despite its rejection of injury plus pattern discovery test). In Rotella, the Court noted its willingness to consider the "straight injury occurrence rule" in the future but declined to establish it as the definitive test for determining when the limitations period begins running because the parties did not focus on this rule. Id. Under this rule, the discovery of the injury is irrelevant and the limitations period begins accruing at the time that the plaintiff is injured. Id. Noting how the similarities in "the purpose, structure, and aims" of RICO and the Clayton Act warrant the adoption of the "Clayton Act injury rule" for civil RICO actions, Justice Scalia espoused the injury occurrence rule in his concurrence in Klehr, 521 U.S. at 198-201 (Scalia, J., concurring).
(349.) The "injury discovery" rule provides that the statute of limitations runs when the plaintiff knew or should have known of the injury underlying her cause of action. Rotella v. Wood, 147 F.3d 438, 440 (5th Cir. 1998), aff'd, 528 U.S. 549 (2000) (holding statute of limitations runs from the time of the discovery of the injury); see also Prudential Ins. Co. of Am. v. U.S. Gypsum Co., 359 F.3d 226, 233 (3d Cir. 2004) (same); Pac. Harbor Capital, Inc. v. Barnett Bank, N.A., 252 F.3d 1246, 1251 (11th Cir. 2001) (same); In re Merrill Lynch Ltd. P'ships Litig., 154 F.3d 56, 58-59 (2d Cir. 1998) (same); Detrick v. Panalpina, Inc., 108 F.3d 529, 537-40 (4th Cir. 1997) (same); Grimmett v. Brown, 75 F.3d 506, 511 (9th Cir. 1996) (same).
(350.) See Paul B. O'Neill, Note, "Mother of Mercy, Is This the Beginning of RICO?": The Proper Point of Accrual of a Private Civil RICO Action, 65 N.Y.U.L. REV. 172, 205-06 (1990) (arguing discovery rule does not serve broad remedial purpose of RICO because it reduces "the potential amount of a private plaintiff's recovery before she has a chance to bring suit"). See generally Grimmett, 75 F.3d at 512 (discussing relationship between limitations period and civil pattern requirement in civil RICO action).
(351.) First, the civil RICO limitations period begins to run when a plaintiff knew or should have known of the injury that underlies his cause of action. See Detrick, 108 F.3d at 537 (stating RICO claim "begins to accrue and the statute of limitations runs where a plaintiff knows or should know of the injury that underlies his cause of action" (quoting Pocahontas Supreme Coal Co. v. Bethlehem Steel Corp., 828 F.2d 211, 220 (4th Cir. 1987))); see also Grimmett, 75 F.3d at 510 (adopting "injury discovery rule"). The plaintiff is not required to have actual knowledge that the injury is part of a pattern of racketeering for this period to begin to run. E.g., Grimmen, 75 F.3d at 510 (stating limitations period begins to run, regardless of whether the plaintiffs knew or should have known of the injury).
The second component is the "separate accrual rule," which states that a new claim, and consequently a new four-year limitations period, accrues each time a "new and independent injury" is incurred from the same RICO violation. See Bingham v. Zolt, 66 F.3d 553, 561 (2d Cir. 1995) (holding plaintiff's RICO claims were not time barred under the separate accrual rule). But see Love v. Nat'l Med. Enters., 230 F.3d 765, 773-74 (5th Cir. 2000) (stating that the Fifth Circuit has neither adopted nor rejected the Second Circuit's separate accrual rule). The lower courts are split in their interpretation of Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321 (1971), in which the Supreme Court examined the effect of the "separate accrual rule" on future damages. Id. at 339.
Specifically, in Zenith, the Supreme Court stated that future damages can be awarded in most cases but that future damages that might arise from the conduct sued on are "unrecoverable if the fact of their accrual is speculative or their amount and nature unprovable." Id. The circuits are split concerning how this rule affects future damages in civil RICO cases where the amount of recovery is uncertain merely because of the pendency of other actions concerning the same damages. Compare First Nationwide Bank v. Gelt Funding Corp., 27 F.3d 763, 768 (2d Cir. 1994) (holding "cause of action does not accrue under RICO until the amount of damages becomes clear and definite"), with Grimmen, 75 F.3d at 516-17 (rejecting "clear and definite" damage rule distinguishing "uncertain damage, which prevented recovery, from an uncertain extent of damage, which did not prevent recovery").
(352.) See David E. Rovella, NOW Abortion Victory Assailed, NAT'L L. J., May 4, 1998, at A6. For in-depth discussion of First Amendment implications of the Supreme Court's decision, compare Brian J. Murray, Note, Protesters, Extortion, and Coercion: Preventing RICO from Chilling First Amendment Freedoms, 75 NOTRE DAME L. REV. 691 (1999) (arguing that risk of costly litigation or award of treble damages will have chilling effect on rigorous protest by advocacy groups), with Fay Clayton & Sara N. Love, NOW v. Scheidler: Protecting Women's Access to Reproductive Health Services, 62 ALB. L. REV. 967, 993-94 (1999) (explaining that plaintiffs' civil suit was based only on use of violence and threats of violence and thus, does not curtail First Amendment protections).
The Supreme Court declined to address the First Amendment issue raised by some of the respondents and the amici because the only question presented for review was whether RICO requires proof that either the racketeering enterprise or the predicate acts of racketeering arose from an economic motive. See Nat'l Org. for Women v. Scheidler (NOW I), 510 U.S. 249, 262 n.6 (1994). In his concurring opinion, Justice Souter stated that the "[c]onduct alleged to amount to Hobbs Act extortion, for example, or one or the other somewhat elastic RICO predicate acts may turn out to be fully protected First Amendment activity, entitling the defendant to dismissal on that basis." Id. at 264.
(353.) See NOW I, 510 U.S. at 262 (ruling on the availability of the RICO claim but not on the merits of the case).
(354.) See Scheidler v. Nat'l Org. for Women, Inc., 537 U.S. 393, 404-05 (2003). The relevant definition of extortion within the Hobbs Act is "the obtaining of property from another, with his consent, induced by wrongful use of actual or threatened force, violence, or fear, or under color of official right." 18 U.S.C. [section] 1951 (b)(2) (2006). Chief Justice Rehnquist went on to say that the "[p]etitioners may have deprived or sought to deprive respondents of their alleged property right of exclusive control of their business assets, but they did not acquire any such property. Petitioners neither pursued nor received 'something of value from' respondents that they could exercise, transfer, or sell" and therefore, petitioners did not commit extortion as defined by the Hobbs Act. Nat'l Org. for Women, 537 U.S. at 405 (citing United States v. Nardello, 393 U.S. 286, 290 (1969)).
(355.) Scheidler v. Nat'l Org. for Women, Inc. (NOW II), 547 U.S. 9 (2006).
(356.) Id. at 16 ("[P]hysical violence unrelated to robbery or extortion falls outside the scope of the Hobbs Act."). The court noted that Congress did not intend to create a freestanding physical violence offense in the Hobbs Act; instead Congress intended "to forbid acts or threats of physical violence in furtherance of a plan or purpose to engage in what the statute refers to as robbery or extortion, (and related attempts or conspiracies)." Id. at 23.
(357.) See Tompkins v. Cyr, 202 F.3d 770, 787 (5th Cir. 2000) (holding physician and his wife had valid grounds for a RICO complaint against anti-abortion protestors who tried to stop doctors from performing abortions by harassing and threatening them and their families with violence). Before the jury reached a verdict on the civil RICO claim itself, the Court of Appeals denied a motion by the defendants on appeal to sanction the plaintiffs for filing a frivolous RICO claim. Id.
(358.) See Huntingdon Life Scis., Inc. v. Rokke, 986 F. Supp. 982, 992 (E.D. Va. 1997) (upholding RICO claim against the People for the Ethical Treatment of Animals ("PETA")). In Huntingdon, the defendant was allegedly an undercover PETA operative who falsely represented herself to gain employment in the plaintiff's laboratory to investigate its animal testing practices. Id. at 984. With the information collected by the defendant, PETA launched a public relations campaign against the plaintiff. Id. at 985.
(359.) See Raymond E Green, The Application of RICO to Labor-Management and Employment Disputes, 7 ST. THOMAS L. REV. 309, 312-26 (1995) (describing RICO prosecutions of labor officials and unions); see also United States v. Sasso, 215 F.3d 283, 285 (2d Cir. 2000) (finding district court had authority to order contribution to costs of monitoring union from union officials who committed RICO violations by using threats to obtain cash payments from representatives of companies whose employees were union members); United States v. Carson, 52 F.3d 1173, 1181-84 (2d Cir. 1995) (holding order of disgorgement of "ill-gotten gains" from union officer prosecuted for committing racketeering acts benefiting organized crime should be limited to sums intended solely to prevent and restrain future RICO violations); United States v. Int'l Bhd. of Teamsters, 19 F.3d 816, 818, 822 (2d Cir. 1994) (upholding disciplinary actions against union official for associating with organized crime figure pursuant to consent decree reforming electoral and disciplinary processes of union infiltrated by organized crime).
(360.) No. Civ. A. 95-496-RRM, 1996 WL 76344, at *1 (D. Del. Jan. 11, 1996); see also Herbert R. Northrup & Charles H. Steen, Union 'Corporate Campaigns' as Blackmail: the RICO Battle at Bayou Steel, 22 HARV. J.L. & PUB. POL'Y 771, 773 (1999) (illustrating why union corporate campaigns constitute actionable racketeering).
(361.) Bayou Steel Corp., 1996 WL 76344, at *2; see also Northrup & Steen, supra note 360.
(362.) Bayou Steel Corp., 1996 WL 76344, at *2.
(363.) See Laborers Local 17 Health & Benefit Fund v. Philip Morris, Inc., 191 F.3d 229, 239-41 (2d Cir. 1999) (finding plaintiffs did not have standing to bring RICO claim because (i) injury was derivative of harm suffered by beneficiaries from smoking, (ii) there was a risk of double recovery by smokers who may file individual RICO suits or seek recovery under state law, and (iii) extreme difficulty of calculating damages); Int'l Bhd. of Teamsters, Local 734 v. Philip Morris, Inc., 196 F.3d 818, 825-26 (7th Cir. 1999) (same); Or. Laborers-Emp'rs Health & Welfare Trust Fund v. Philip Morris, Inc., 185 F.3d 957, 963-67 (9th Cir. 1999) (same); Steamfitters Local Union No. 420 Welfare Fund v. Philip Morris, Inc., 171 F.3d 912, 921, 933-34 (3d Cir. 1999) (concluding plaintiffs did not have standing because their injury was too remote from the defendants' conspiracy to conceal health risks of smoking and because of difficulty of apportioning damages between smokers and health funds).
(364.) See Laborers Local 17, 191 F.3d at 236-40 (explaining a showing of proximate cause is required as an element of standing in all RICO cases); Int'l Bhd. of Teamsters, Local 734, 196 F.3d at 825-26 (same); Or. Laborers-Emp'rs, 185 F.3d at 967 (same); Steamfitters Local Union No. 420, 171 F.3d at 921, 933 (same).
(365.) See Allegheny Gen. Hosp. v. Philip Morris, Inc., 228 F.3d 429, 444-45 (3d Cir. 2000) (arguing against standing for hospitals because "[w]hen an injury is indirect, remote, and many steps away from the alleged cause, it is unadvisable to allow a case to proceed"); see also Ass'n of Wash. Pub. Hosp. Dists. v. Phillip Morris, Inc., 241 F.3d 696, 701-02 (9th Cir. 2001) (holding public hospital districts lacked standing on the grounds that the injury alleged was too remote because (i) there are more direct victims who can be counted on to vindicate the law as private attorneys general, (ii) it is difficult to ascertain the amount of damages attributable to defendant's wrongful conduct, and (iii) the courts will have to adopt complicated rules apportioning damages to obviate risk of multiple recoveries); Tex. Carpenters Health Benefit Fund v. Philip Morris, Inc., 199 F.3d 788, 789-90 (5th Cir. 2000) (holding health benefit fund lacked standing for RICO claim because the fund suffered indirect injury); Lyons v. Philip Morris Inc., 225 F.3d 909, 914-15 (8th Cir. 2000) (finding trustees of multi-employer health plans seeking to recover costs incurred in paying claims for tobacco-related illnesses lacked standing because injury was too remote).
(366.) Serv. Emps. Int'l Union Health & Welfare Fund v. Philip Morris, Inc., 249 F.3d 1068, 1072-73 (D.C. Cir. 2001) (holding that the harms alleged by the nations were too remote from the defendants' alleged wrongdoing to provide standing for a RICO claim).
(367.) See Att'y Gen. of Can. v. R.J. Reynolds Tobacco Holdings, Inc., 268 F.3d 103, 106-07 (2d Cir. 2001). The revenue rule is a common law doctrine holding that the courts of one sovereign will not enforce tax judgments or claims of another sovereign. Id. at 106; see also European Cmty. v. RIR Nabisco, Inc., 424 F.3d 175, 179-82 (2d Cir. 2005) (affirming district court's ruling that revenue rule barred RICO claim based on smuggling). But see Elizabeth J. Farnam, Racketeering, RICO and the Revenue Rule in Attorney General of Canada v. R.J. Reynolds: Civil RICO Claims for Foreign Tax Law Violations, 77 WASH. L. REV. 843, 843 (2002) (arguing majority opinion in R.J. Reynolds impermissibly expanded the revenue rule to restrict the scope of RICO because the rule had previously only applied to claims based on foreign tax laws).
(368.) United States v. Philip Morris, Inc., 116 F. Supp. 2d 116, 121 (D.D.C. 2000) (basing its claim on [section] 1964(a) of RICO, which authorizes the government to obtain equitable remedies from defendants allegedly engaged in racketeering activity).
(369.) Because the relief the government sought was equitable in nature, the district court denied the defendants' request for a jury trial. See United States v. Philip Morris, Inc., 273 F. Supp. 2d 3, 11 (D.D.C. 2002). Although, at the time, the district court had yet to rule on the merits of the case, the D.C. Circuit foreclosed the possibility of disgorgement as a remedy. See United States v. Philip Morris USA Inc., 396 F.3d 1190, 1197 (D.C. Cir. 2005). The D.C. Circuit, however, dismissed the government's action against one of the defendants--a British tobacco company--for lack of personal jurisdiction in Philip Morris, 116 F. Supp. 2d at 120. See generally, Elizabeth Vella Moeller, DOJ Tobacco Suit Threatens Commercial Speech Rights, ANDREWS TOBACCO INDUS. LING. REP., May 3, 2002, at 10 (stating government's suit is unlikely to survive a constitutional challenge because the "Department of Justice is seeking advertising-related injunctive relief that would censor constitutionally protected commercial speech").
(370.) See Humana, Inc. v. Forsyth, 525 U.S. 299, 306-09 (1999) (holding federal and state laws governing insurance fraud and the McCarran-Ferguson Act did not bar plaintiffs from bringing a civil RICO claim).
(371.) See Maio v. Aetna, Inc., 221 F.3d 472, 475 (3d Cir. 2000) (claiming that the HMO falsely represented that its members would receive high quality health care when in reality the HMO's policies restrict a physician's ability to provide high quality health care).
(372.) Id. at 490-93 (rejecting appellants' argument that standing was based on their financial losses in obtaining a health care product with diminished economic value). But see Mathews v. Kidder, Peabody, & Co., 260 F.3d 239, 256 (3d Cir. 2001) (holding investors did have standing under RICO when they purchased overpriced equity investments based upon fraudulent misrepresentation); In re Managed Care Litig., 150 F. Supp. 2d 1330, 1339 (S.D. Fla. 2001) (holding plaintiffs did have standing under RICO based upon fraudulent inducement). In Mathews, the Third Circuit distinguished the injury in Maio because the plaintiffs in Maio were not injured until the HMO failed to deliver benefits promised under the plan. Mathews, 260 F.3d at 248. The plaintiffs in Mathews, however, were immediately injured because they purchased a legitimate property interest, Id.
(373.) See Simon v. Value Behavior Health, Inc., 208 F.3d 1073, 1080 (7th Cir. 2000), overruled on other grounds by Odom v. Microsoft Corp., 486 F.3d 541, 551 (7th Cir. 2007).
(375.) Id. at 1083 (alleging fraudulent denial of claims for mental health care benefits to develop a group of preferred medical providers violated [section] 1962(a)).
(376.) Id. at 1083-84 (alleging defendants violated [section] 1962(c) and (d) by colluding to defraud health plan beneficiaries).
(377.) Id. at 1083 (holding plaintiff must prove injury to himself to have cognizable claim).
(378.) Id. at 1083-84 (holding plaintiff must show that health insurance companies engaged in racketeering activity to violate [section] 1962(c) or (d)).
(379.) See generally Steven P. Ragland, Using the Master's Tools: Fighting Persistent Police Misconduct with Civil RICO, 51 AM. U. L. REV. 139 (2001). Ragland argues that civil RICO is "both an appropriate and sustainable avenue to address a long-standing pattern of police corruption and misconduct." Id. at 164. Ragland contends that civil RICO is a good method for injured parties seeking redress against the police because of other barriers to prosecution of police misconduct, Id. at 166.
(380.) Guerrero v. Gates, 110 F. Supp. 2d 1287, 1291-92 (C.D. Cal. 2000).
(381.) See id. at 1293 (denying defendant's motion to dismiss and holding that plaintiff has standing to plead RICO claim). But see Walker v. Gates, No. CV 01-10904GAF(PJWX), 2002 WL 1065618, at *7 (C.D. Cal. May 28, 2002) (holding plaintiff did not have standing to sue because false arrest was not an injury to business or property); Moreno v. Baca, No. CV 00-7149 ABC (CWX), 2002 WL 338366, at *19 (C.D. Cal. Feb. 25, 2002) (distinguishing Guerrero because the plaintiff could not show any evidence from which a persistent pattern of police misconduct could be inferred). For a discussion on Walker and Guerrero, see Michael Rowan, Leaving No Stone Unturned: Using RICO as a Remedy for Police Misconduct, 31 FLA. ST. U. L. REV. 231 (2003).
(382.) Ragland, supra note 379, at 147.