RICO Claim Cannot Be Based on “Pattern of Racketeering Activity” Occurring in Ukraine

The World in U.S. Courts: Summer 2013 - RICO

Borich v. BP Products North America (U.S. District Court, N.D. Ill., May 28, 2013)

Lillian Borich claimed that she was fraudulently induced to move to Ukraine to work for an affiliate of the BP oil company to be responsible for “business to business” sales of the company’s products. The position allegedly reflected an effort to change the affiliate’s business model from one that utilized wholesalers who paid bribes to local government officials and perhaps others. Borich was ultimately terminated, and she filed a RICO claim against various BP entities, alleging that a statutory requirement of a “pattern of racketeering activity” was met by the affiliates alleged practices of obtaining business through bribes in Ukraine.

The court refused to apply RICO extraterritoriality to the alleged “pattern.” Stating that the “proper focus” of the inquiry was the location of the allegedly illegal acts “and their consequences,” the court concluded that bribes in Ukraine used to generate Ukrainian sales “failed to allege a domestic [U.S.] pattern of racketeering activity.” The court also observed that Borich’s claimed injury was not proximately caused by any of the allegedly illegal bribes, but by a termination of her employment that was not described as part of the “pattern of racketeering activity.”

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