Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca2-11-02475/USCOURTS-ca2-11-02475-7/pdf.json

Nature of Suit Code: 470
Nature of Suit: Civil (Rico)
Cause of Action: 

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1 JOSÉ A. CABRANES, Circuit Judge, joined by DENNIS JACOBS, REENA RAGGI, and 

2 DEBRA ANN LIVINGSTON, Circuit Judges, dissenting from the order denying rehearing 

3 en banc: 

 The question presented in this civil case is whether the RICO statute1 4 applies 

5 extraterritorially. 

6 This is an important question, and it has been answered in a novel and artful way by a panel 

7 of our Court. Absent review by the Supreme Court, the panel’s interpretation will have a significant 

8 and long-term adverse impact on activities abroad that we have heretofore assumed were governed 

9 primarily by the laws of the territories where those activities occurred. 

10 After a close and considered vote, the en banc court has decided to forgo the possibility of 

reviewing the panel’s opinion.2 11 From that regrettable decision I respectfully dissent. 

12 If this decision remains undisturbed, the prevailing plaintiffs here, the European Community 

and its member states,3 13 will have achieved a pyrrhic victory, and one that the Community’s 

14 constituents will have cause to regret in the years ahead. Why? Because its citizens, natural and 

15 corporate, are among the likely targets of future RICO actions under the panel’s interpretation of 

16 the statute. 

17 The panel holds that RICO itself has an extraterritorial reach if and when one of RICO’s 

18 predicate statutes has an extraterritorial reach. This reasoning conflates the question of whether RICO 

19 applies extraterritorially with whether the statute’s definition of “racketeering activity” includes 

20 predicate offenses that can be charged abroad. If RICO were merely an additional criminal—or, as is 

21 often the case, civil—consequence for committing predicate offenses, this view might have some 

22 merit. But, as Judge Raggi’s compelling dissent makes clear, RICO is not simply designed to pile on 

 1 18 U.S.C. §§ 1961–1968. 

2 Note that “the decision not to convene the en banc court does not necessarily mean that a case 

either lacks significance or was correctly decided. Indeed, the contrary may be true.” United States v. Taylor, 752 

F.3d 254, 256 (2d Cir. 2014) (Cabranes, J., dissenting from the denial of rehearing en banc) (describing the 

special history of en bancs in the Second Circuit and highlighting the various factors that may explain why a 

judge would vote in favor or against the convening of an en banc court). 

3 The European Community was “a governmental body created through collaboration among the 

majority of the nations of Europe.” Appellant’s Br. at 6. Since this lawsuit was originally filed, the European 

Community has been incorporated into the European Union. See European Cmty. v. RJR Nabisco, Inc., 764 F.3d 

129, 148 (2d Cir. 2014).

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1 punishment. Rather, the statute prohibits distinct behavior: conducting, controlling, or funding an 

2 enterprise through a pattern of racketeering. 

3 The panel overlooks the statutory text, going straight to the definition of “racketeering 

4 activity,” determining that some predicate acts are punishable abroad, and then splitting plaintiffs’ 

5 RICO claim in two – one “domestic” RICO claim for those predicate acts that are not punishable 

6 abroad and that defendants allegedly committed in the United States, and one “extraterritorial” 

7 RICO claim for those predicate acts that are punishable abroad. This reasoning is flatly inconsistent 

8 with years of precedent from this Court, and the Supreme Court, that treats RICO as an offense 

9 distinct from its predicate acts. Although it is indisputable that Congress intended for certain RICO 

10 predicate statutes to apply to actions or events abroad, there is no clear basis for concluding that 

11 Congress intended for RICO itself to go along with them. For this reason, the panel’s opinion also 

may allow an end-run around the revivified presumption against extraterritoriality in Morrison4 12 and 

Kiobel.5 13 

14 Indeed, there are many important criminal statutes which expressly make extraterritorial 

15 activity indictable but say nothing about the availability of RICO in the circumstances they 

16 address—perhaps because legislators were focusing more on the prosecutions of crimes, including 

17 some involving acts of terrorism, and not on the treble damages and attorney’s fees available under 

18 civil actions for damages. It is thus a red herring at best to suggest that, by incorporating a number 

of mostly terrorism-related crimes within RICO,6 19 Congress also intended—without any clear 

expression of affirmative intent—to give global reach to a whole host of non-terrorism-related7 20 civil 

 4 Morrison v. Nat’l Aus. Bank Ltd., 561 U.S. 247 (2010). 

5 Kiobel v. Royal Dutch Petroleum Co., 133 S. Ct. 1659 (2013). 

6 The panel’s opinion, Judge Hall’s concurrence in support of the order denying rehearing en banc, 

and Judge Lynch’s dissent from the order denying rehearing en banc are all very keen to locate RICO’s 

extraterritoriality within its terrorism-focused predicates. See RJR Nabisco, 764 F.3d at 136 (listing a number of 

RICO’s predicate statutes focused on terrorism offenses); Hall Concurrence at 1 (“Many of the predicates 

that apply to foreign conduct relate to international terrorism.”); Lynch Dissent at 1-2 (posing a hypothetical 

scenario involving a “revolutionary group based largely in a Middle Eastern country” that “plant[s] a bomb 

near a federal office building” and “behead[s] an abducted American journalist”). 

7 Indeed, RICO incorporates many predicates that are quite removed from the dark world of 

international terrorism. See 18 U.S.C. § 1961(1) (incorporating statutes that outlaw trafficking in counterfeit 

copyrighted work (18 U.S.C. § 2319), embezzlement from pension and welfare funds (18 U.S.C. § 664), and 

other activities that have little connection to terrorism). 

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claims.8 1 This is a case of Congress giving an inch and the panel taking a mile. The dubiousness of the 

2 panel’s stretched reasoning—and its direct tension with Morrison and Kiobel—is only further 

3 reinforced by the fact that a plaintiff need not actually prove any of the extraterritorial predicates in 

4 order to sustain a civil claim for RICO activities alleged to have occurred entirely outside the United 

States.9 5 

6 To summarize: After more than four decades of experience with this complicated statute, a 

7 panel of our Court has discovered and announced a new, and potentially far-reaching, judicial 

8 interpretation of that statute—one that finds little support in the history of the statute, its 

9 implementation, or the precedents of the Supreme Court; that will encourage a new litigation 

industry exposing business activities abroad to civil claims of “racketeering”;10 10 and that will invite 

11 our courts to adjudicate civil RICO claims grounded on extraterritorial activities anywhere in the 

12 world. 

 8 For example, plaintiffs in this Circuit, and others, have sought to use civil RICO claims to challenge 

supposedly unlawful business practices conducted in foreign countries by alleging, as a predicate act, that one 

aspect of the scheme involved laundering money through the United States in violation of 18 U.S.C. § 1951. 

See, e.g., Hourani v. Mirtchev, 943 F. Supp. 2d 159, 168 (D.D.C. 2013) (dismissing RICO claim that arose out of 

“extortion in Kazakhstan by a Kazakh actor of Plaintiffs’ Kazakhstan-based assets”); Republic of Iraq v. ABB AG, 

920 F. Supp. 2d 517 (S.D.N.Y. 2013) (dismissing RICO claim that related to alleged mismanagement in Iraq 

of the United Nations Oil-for-Food program); Cedeno v. Intech Grp., Inc., 733 F. Supp. 2d 471 (S.D.N.Y. 2010) 

(dismissing RICO claim that alleged, inter alia, that Venezuelan officials and entities damaged a company 

incorporated in the British Virgin Islands). The panel in RJR Nabisco, which identifies money laundering as a 

predicate act that extends RICO extraterritorially, welcomes such claims into federal court. See 764 F.3d at 

139–40. 

9 It is also worth noting that the United States, in its amicus brief, does not adopt the predicate-centric 

view of the panel. Needless to say, they also do not invoke the panel’s view that RICO’s criminal predicates 

extend the extraterritorial jurisdiction of the statute for non-terrorism-related civil claims. See Brief of the 

United States 9–20. 

10 See Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 529-30 (1985) (Powell, J., dissenting) (lamenting the 

expansion of RICO to include civil racketeering charges “brought—in the unfettered discretion of private 

litigants—in federal court against legitimate businesses seeking treble damages in ordinary fraud and contract 

cases”). 

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