District Court finds no US Injury in Allegedly Unlawful Seizure of Mexican Property Development Venture

The World in U.S. Courts: Winter 2016 - Racketeer Influenced and Corrupt Organizations Act (RICO)

Garcia v. Lion Mexico Consolidated, L.P., US District Court for the Western District of Texas, October 21, 2016

Plaintiff Mexican corporations and citizens (some of whom reside in the US) allege that control of a business venture organized to develop property in Mexico was acquired by the defendants through a variety of crimes, in violation of the provisions of civil RICO. The complaint was filed before the US Supreme Court decided RJR Nabisco v. European Community, which established the requirement that a private plaintiff must plead a US domestic injury in connection with any RICO claim. Following the Supreme Court’s decision, the District Court concluded that the plaintiffs' alleged injuries to “business and property” all occurred in Mexico, and it dismissed these claims. In this opinion, the Court permitted the plaintiffs to amend their complaint to allege what might later be found to be suitable US injuries: the loss of ownership interests in various US businesses.

[Editor’s note: The “domestic injury” requirement for a private right of action under RICO was recently the subject of an article by editors of The World in US Courts, which may be found here.]

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