Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca2-11-02475/USCOURTS-ca2-11-02475-3/pdf.json

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

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11‐2475‐cv

European Community v. RJR Nabisco

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

August Term, 2011

(Petition for Rehearing Submitted: May 7, 2014

Petition for Rehearing Decided: August 20, 2014)

Docket No. 11–2475–cv

EUROPEAN COMMUNITY, acting on its own behalf

and on behalf of the Member States it has power to

represent, KINGDOM OF BELGIUM, REPUBLIC OF

FINLAND, FRENCH REPUBLIC, HELLENIC

REPUBLIC, FEDERAL REPUBLIC OF GERMANY,

ITALIAN REPUBLIC, GRAND DUCHY OF

LUXEMBOURG, KINGDOM OF THE

NETHERLANDS, PORTUGUESE REPUBLIC,

KINGDOM OF SPAIN, individually, KINGDOM OF

DENMARK, CZECH REPUBLIC, REPUBLIC OF

LITHUANIA, REPUBLIC OF SLOVENIA, REPUBLIC

OF MALTA, REPUBLIC OF HUNGARY, REPUBLIC

OF IRELAND, REPUBLIC OF ESTONIA, REPUBLIC

OF BULGARIA, REPUBLIC OF LATVIA, REPUBLIC

OF POLAND, REPUBLIC OF AUSTRIA, KINGDOM

OF SWEDEN, REPUBLIC OF CYPRUS, SLOVAK

REPUBLIC, and ROMANIA,

Plaintiffs–Appellants,

v.

RJR NABISCO, INC., R.J. REYNOLDS TOBACCO

COMPANY, R.J. REYNOLDS TOBACCO

INTERNATIONAL, INC., RJR ACQUISITION CORP.,

f/k/a NABISCO GROUP HOLDINGS CORP., RJR

NABISCO HOLDINGS CORP., R.J. REYNOLDS

Case 11-2475, Document 159, 08/20/2014, 1299415, Page1 of 6
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TOBACCO HOLDINGS, INC., NABISCO GROUP

HOLDINGS CORP., R.J. REYNOLDS GLOBAL

PRODUCTS, INC., REYNOLDS AMERICAN INC., R.J.

REYNOLDS TOBACCO COMPANY, a North Carolina

Corporation,

Defendants–Appellees.

Before: LEVAL, SACK, and HALL, Circuit Judges.

The defendants–appellees sought panel and en

banc rehearing of this Courtʹs decision (Leval, Judge)

vacating the judgment of the United States District

Court for the Eastern District of New York (Garaufis,

Judge) dismissing the complaint against them.  The

defendants–appellees urge us to affirm on the ground

that the plaintiffs were required to allege domestic

injuries for each of the statutory violations pled in their

complaint.  The panel concludes that this argument is

without merit, and the petition for panel rehearing is

therefore

DENIED.

JOHN J. HALLORAN, JR., Speiser, Krause,

Nolan & Granito, New York, N.Y. (Kevin

A. Malone, Carlos A. Acevedo, Krupnick

Campbell Malone Buser Slama Hancock

Liberman & McKee, P.A., Fort Lauderdale,

Fla., on the brief), for Plaintiffs‐Appellants.

GREGORY G. KATSAS, Jones Day,

Washington, D.C. (David M. Cooper, Mark

R. Seiden, Jones Day, New York, N.Y., on

the brief), for Defendants‐Appellees.  

LEWIS S. YELIN, Attorney, Appellate Staff,

Civil Division, Department of Justice,

Washington, D.C. (Harold Hongju Koh,

Legal Advisor, Department of State,

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Washington, D.C.; Tony West, Assistant

Attorney General, Civil Division,

Department of Justice, Washington, D.C.;

Loretta E. Lynch, United States Attorney

for the Eastern District of New York, New

York, N.Y.; Douglas N. Letter, Attorney,

Appellate Staff, Civil Division, Department

of Justice, Washington, D.C., on the brief), for

Amicus Curiae United States of America in

support of neither party.

PER CURIAM:

In their petition for panel and en banc rehearing,

the defendants–appellees (collectively, ʺRJRʺ) contend,

among other things, that the Racketeer Influenced and

Corrupt Organizations (RICO) statute, 18 U.S.C. § 1961

et seq., requires private plaintiffs to allege a domestic

injury, and that this requirement offers an independent

basis upon which to dismiss the complaints in this

action to the extent that they fail to allege such injuries.  

We conclude that RICO imposes no such requirement.  

The petition for panel rehearing is therefore denied.

DISCUSSION

The RICO statute allows ʺ[a]ny person injured in

his business or property by reason of a violation of [18

U.S.C. §] 1962ʺ to sue for and recover treble damages

and attorneysʹ fees.  18 U.S.C. § 1964(c).  RJR argues

that, regardless of whether the conduct giving rise to

this injury may be extraterritorial, the injury itself must

be domestic.  See Pet. for Rehʹg 2, 12.  We are not

persuaded.   

RJR urges us to infer from a paragraph added on

rehearing to this Courtʹs decision in Norex Petroleum Ltd.

v. Access Industries, Inc., 631 F.3d 29 (2d Cir. 2010) (per

curiam), a holding that § 1964(c), which forms the basis

for the plaintiffsʹ claim here, requires allegation of a

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domestic injury.  But that added language did no more

than confirm that Norex dealt only with private causes

of action, and that we had no occasion to decide

whether RICO could reach extraterritorial conduct

ʺwhen enforced by the government pursuant to Sections

1962, 1963 or 1964(a) and (b).ʺ  Id. at 33.  Nowhere in

Norex did we consider or decide whether § 1964(c)

requires a domestic injury.  We see no reason to

construe RICO to include such a requirement.

To establish a compensable injury under

§ 1964(c), a private plaintiff must show that (1) the

defendant ʺengage[d] in a pattern of racketeering

activity in a manner forbidden byʺ § 1962, and (2) that

these ʺracketeering activitiesʺ were the proximate cause

of some injury to the plaintiffʹs business or property.  

Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 495 (1985);

Holmes v. Secs. Investor Prot. Corp., 503 U.S. 258, 268

(1992).  

The Supreme Court has stated unequivocally that

ʺthe compensable injuryʺ addressed by § 1964(c)

ʺnecessarily is the harm caused by predicate acts

sufficiently related to constitute a pattern.ʺ  Sedima, 473

U.S. at 497; accord Anza v. Ideal Steel Supply Corp., 547

U.S. 451, 457 (2006).  ʺIf the defendant engages in a

pattern of racketeering activity in a manner forbidden

by [§ 1962(a)–(c)], and the racketeering activities injure

the plaintiff in his business or property, the plaintiff has

a claim under § 1964(c).ʺ  Sedima, 473 U.S. at 495.  

Although we have distinguished Sedima when deciding

that a plaintiff pursuing a cause of action for a violation

of § 1962(a) must plead an ʺinjury from the defendantsʹ 

investment of racketeering income in an enterprise,ʺ 

Ouaknine v. MacFarlane, 897 F.2d 75, 83 (2d Cir. 1990),

the Supreme Courtʹs conclusion that RICOʹs remedial

provisions are addressed to violations of RICO

predicates still stands when applied to §§ 1962(b), (c)

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and conspiracies to commit violations of those sections

charged under § 1962(d).1  

The Sedima courtʹs conclusion that § 1964(c)ʹs

injury requirement focuses on RICOʹs predicates

dovetails with the extraterritoriality analysis set forth in

the panel opinion in this case.  Just as ʺthe

extraterritorial application of RICO [is] coextensive with

the extraterritorial application of the relevant predicate

statutes,ʺ Am. Slip Op. at 16:18–19, we look to the

relevant predicate statute to determine whether the

injury caused by a violation thereof must be domestic.  

If an injury abroad was proximately caused by the

violation of a statute which Congress intended should

apply to injurious conduct performed abroad, we see no

reason to import a domestic injury requirement simply

because the victim sought redress through the RICO

statute.  This conclusion is consistent both with

ʺCongressʹ self‐consciously expansive language and

overall approach,ʺ as well as ʺits express admonition

that RICO is to ʹbe liberally construed to effectuate its

remedial purposes.ʹʺ  Sedima, 473 U.S. at 498 (quoting

Pub. L. No. 91–452, § 904(a), 84 Stat. 922, 947 (1970)).  

The presumption against extraterritoriality, which is

primarily concerned with the question of what conduct

                                                            

1  Simultaneously with the filing of this opinion, we have

amended the original panel opinion in this case to reflect the

fact that the plaintiffs have pled a domestic investment with

respect to their claims under § 1962(a).  As discussed in the

panel opinion, the plaintiffs have also alleged that RJR

engaged in conduct in the United States satisfying every

essential element of each RICO predicate statute that does

not apply extraterritorially.  Under the circumstances, we see

no reason why the plaintiffs should further be required to

plead that the injury they suffered from the alleged domestic

investment occurred in the United States.

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falls within a statuteʹs purview, does not require a

different result.  See, e.g., Morrison v. Natʹl Australia Bank

Ltd., 561 U.S. 247, 254 (2010) (referring to the question of

a statuteʹs extraterritorial application as a question of

ʺwhat conduct [the statute] reachesʺ).

On the facts of this case, we conclude that the

plaintiffs are not required to plead that their alleged

injuries actually occurred in the United States.

The petition for panel rehearing is therefore

DENIED.

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