U.S. Supreme Court Concludes that Extraterritorial Application of RICO Depends on Extraterritorial Reach of Underlying Criminal Violations, but that Private Plaintiff Must Show U.S. Injury

The World in U.S. Courts: Summer and Fall 2016 - Racketeer Influenced and Corrupt Organizations Act (RICO) | June.29.2016

RJR Nabisco Inc. v. European Community, U.S. Supreme Court, June 20, 2016

In resolving a three-way split among the U.S. courts of appeals, the U.S. Supreme Court ruled that the extraterritorial application of the RICO statute should follow the extraterritorial application of the underlying violations of law that combine together to form a violation of the RICO statute.  The Court further decided that the statutory element of an “enterprise”—an entity that can serve different purposes in connection with violations of different sections of the statute—is not limited to U.S. domestic enterprises, so long as the enterprise engages in or affects U.S. commerce.  Notably, however, the Court also ruled that a private right of action under RICO (as opposed to a civil or criminal RICO case brought by the U.S. Government) must be based on U.S. domestic injuries to businesses or property.

[Editor’s Note:  For a more detailed discussion of the RJR Nabisco case, please see our article, which originally appeared in the Law360 publication.

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