Opinion
Docket No. 11–2475–cv.
2014-08-20
EUROPEAN COMMUNITY, acting on its own behalf and on behalf of the Member States it has power to represent, Kingdom of Belgium, Republic of Finland, French Republic, Hellenic Republic, Federal Republic of Germany, Italian Republic, Grand Duchy of Luxembourg, Kingdom of the Netherlands, Portuguese Republic, Kingdom of Spain, Individually, Kingdom of Denmark, Czech Republic, Republic of Lithuania, Republic of Slovenia, Republic of Malta, Republic of Hungary, Republic of Ireland, Republic of Estonia, Republic of Bulgaria, Republic of Latvia, Republic of Poland, Republic of Austria, Kingdom of Sweden, Republic of Cyprus, Slovak Republic, and Romania, Plaintiffs–Appellants, v. RJR NABISCO, INC., R.J. Reynolds Tobacco Company, R.J. Reynolds Tobacco International, Inc., RJR Acquisition Corp., f/k/a Nabisco Group Holdings Corp., RJR Nabisco Holdings Corp., R.J. Reynolds Tobacco Holdings, Inc., Nabisco Group Holdings Corp., R.J. Reynolds Global Products, Inc., Reynolds American Inc., R.J. Reynolds Tobacco Company, a North Carolina Corporation, Defendants–Appellees.
John J. Halloran, Jr., Speiser, Krause, Nolan & Granito, New York, N.Y. (Kevin A. Malone, Carlos A. Acevedo, Krupnick Campbell Malone Buser Slama Hancock Liberman & McKee, P.A., Fort Lauderdale, Fla., on the brief), for Plaintiffs–Appellants. Gregory G. Katsas, Jones Day, Washington, D.C. (David M. Cooper, Mark R. Seiden, Jones Day, New York, N.Y., on the brief), for Defendants–Appellees.
John J. Halloran, Jr., Speiser, Krause, Nolan & Granito, New York, N.Y. (Kevin A. Malone, Carlos A. Acevedo, Krupnick Campbell Malone Buser Slama Hancock Liberman & McKee, P.A., Fort Lauderdale, Fla., on the brief), for Plaintiffs–Appellants. Gregory G. Katsas, Jones Day, Washington, D.C. (David M. Cooper, Mark R. Seiden, Jones Day, New York, N.Y., on the brief), for Defendants–Appellees.
Lewis S. Yelin, Attorney, Appellate Staff, Civil Division, Department of Justice, Washington, D.C. (Harold Hongju Koh, Legal Advisor, Department of State, Washington, D.C.; Tony West, Assistant Attorney General, Civil Division, Department of Justice, Washington, D.C.; Loretta E. Lynch, United States Attorney for the Eastern District of New York, New York, N.Y.; Douglas N. Letter, Attorney, Appellate Staff, Civil Division, Department of Justice, Washington, D.C., on the brief), for Amicus Curiae United States of America in support of neither party.
Before: LEVAL, SACK, and HALL, Circuit Judges.
PER CURIAM:
In their petition for panel and en banc rehearing, the defendants-appellees (collectively, “RJR”) contend, among other things, that the Racketeer Influenced and Corrupt Organizations (RICO) statute, 18 U.S.C. § 1961 et seq., requires private plaintiffs to allege a domestic injury, and that this requirement offers an independent basis upon which to dismiss the complaints in this action to the extent that they fail to allege such injuries. We conclude that RICO imposes no such requirement. The petition for panel rehearing is therefore denied.
DISCUSSION
The RICO statute allows “[a]ny person injured in his business or property by reason of a violation of [18 U.S.C. § ] 1962” to sue for and recover treble damages and attorneys' fees. 18 U.S.C. § 1964(c). RJR argues that, regardless of whether the conduct giving rise to this injury may be extraterritorial, the injury itself must be domestic. See Pet. for Reh'g 2, 12. We are not persuaded.
RJR urges us to infer from a paragraph added on rehearing to this Court's decision in Norex Petroleum Ltd. v. Access Industries, Inc., 631 F.3d 29 (2d Cir.2010) ( per curiam ), a holding that § 1964(c), which forms the basis for the plaintiffs' claim here, requires allegation of a domestic injury. But that added language did no more than confirm that Norex dealt only with private causes of action, and that we had no occasion to decide whether RICO could reach extraterritorial conduct “when enforced by the government pursuant to Sections 1962, 1963 or 1964(a) and (b).” Id. at 33. Nowhere in Norex did we consider or decide whether § 1964(c) requires a domestic injury. We see no reason to construe RICO to include such a requirement.
To establish a compensable injury under § 1964(c), a private plaintiff must show that (1) the defendant “engage[d] in a pattern of racketeering activity in a manner forbidden by” § 1962, and (2) that these “racketeering activities” were the proximate cause of some injury to the plaintiff's business or property. Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 495, 105 S.Ct. 3275, 87 L.Ed.2d 346 (1985); Holmes v. Secs. Investor Prot. Corp., 503 U.S. 258, 268, 112 S.Ct. 1311, 117 L.Ed.2d 532 (1992).
The Supreme Court has stated unequivocally that “the compensable injury” addressed by § 1964(c) “necessarily is the harm caused by predicate acts sufficiently related to constitute a pattern.” Sedima, 473 U.S. at 497, 105 S.Ct. 3275; accord Anza v. Ideal Steel Supply Corp., 547 U.S. 451, 457, 126 S.Ct. 1991, 164 L.Ed.2d 720 (2006). “If the defendant engages in a pattern of racketeering activity in a manner forbidden by [§ 1962(a)-(c) ], and the racketeering activities injure the plaintiff in his business or property, the plaintiff has a claim under § 1964(c).” Sedima, 473 U.S. at 495, 105 S.Ct. 3275. Although we have distinguished Sedima when deciding that a plaintiff pursuing a cause of action for a violation of § 1962(a) must plead an “injury from the defendants' investment of racketeering income in an enterprise,” Ouaknine v. MacFarlane, 897 F.2d 75, 83 (2d Cir.1990), the Supreme Court's conclusion that RICO's remedial provisions are addressed to violations of RICO predicates still stands when applied to §§ 1962(b), (c) and conspiracies to commit violations of those sections charged under § 1962(d).
Simultaneously with the filing of this opinion, we have amended the original panel opinion in this case to reflect the fact that the plaintiffs have pled a domestic investment with respect to their claims under § 1962(a). As discussed in the panel opinion, the plaintiffs have also alleged that RJR engaged in conduct in the United States satisfying every essential element of each RICO predicate statute that does not apply extraterritorially. Under the circumstances, we see no reason why the plaintiffs should further be required to plead that the injury they suffered from the alleged domestic investment occurred in the United States.
The Sedima court's conclusion that § 1964(c)'s injury requirement focuses on RICO's predicates dovetails with the extraterritoriality analysis set forth in the panel opinion in this case. Just as “the extraterritorial application of RICO [is] coextensive with the extraterritorial application of the relevant predicate statutes,” Am. Slip Op. at 17: 3–4, we look to the relevant predicate statute to determine whether the injury caused by a violation thereof must be domestic. If an injury abroad was proximately caused by the violation of a statute which Congress intended should apply to injurious conduct performed abroad, we see no reason to import a domestic injury requirement simply because the victim sought redress through the RICO statute. This conclusion is consistent both with “Congress' self-consciously expansive language and overall approach,” as well as “its express admonition that RICO is to ‘be liberally construed to effectuate its remedial purposes.’ ” Sedima, 473 U.S. at 498, 105 S.Ct. 3275 (quoting Pub.L. No. 91–452, § 904(a), 84 Stat. 922, 947 (1970)). The presumption against extraterritoriality, which is primarily concerned with the question of what conduct falls within a statute's purview, does not require a different result. See, e.g., Morrison v. Nat'l Australia Bank Ltd., 561 U.S. 247, 254, 130 S.Ct. 2869, 177 L.Ed.2d 535 (2010) (referring to the question of a statute's extraterritorial application as a question of “what conduct [the statute] reaches”).
On the facts of this case, we conclude that the plaintiffs are not required to plead that their alleged injuries actually occurred in the United States.
The petition for panel rehearing is therefore DENIED.