District Court Concludes that Taiwanese Corporation Suffered US Domestic Injury in Connection With its US Operations

The World in U.S. Courts: Winter 2016 - Racketeer Influenced and Corrupt Organizations Act (RICO) | November.14.2016

Tatung Company, Ltd. v. Shu Tze Hsu, US District Court for the Central District of California, November 14, 2016

Tatung, a Taiwanese corporation, alleged that the defendants violated RICO in the course of stripping the assets of a California company against which Tatung had won an arbitration award.  Observing that RICO claims could only be brought by private plaintiffs that had suffered a US “domestic injury,” the District Court in Los Angeles found that such an injury had been alleged, even though the plaintiff was a non-US corporation.  The Court argued that a contrary rule would afford “immunity for U.S. corporations who, acting entirely in the United States, violate civil RICO at the expense of foreign corporations doing business in this country.”  In finding that Tatung had been injured in the US, the Court noted that an arbitration judgment is “property,” but also focused on the defendants’ conduct and the fact that they had “specifically targeted their conduct at California with the aim of thwarting Tatung’s rights in California.”

The District Court’s decision specifically addresses and disagrees with the Bascuñan decision (discussed in the Summer/Fall 2016 issue of The World in US Courts), which broadly concluded that non-US plaintiffs cannot be deemed to have suffered a US “domestic injury.”

[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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