Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca2-11-02475/USCOURTS-ca2-11-02475-8/pdf.json

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

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

DEBRA ANN LIVINGSTON, Circuit Judges, dissenting from the denial of rehearing

en banc:

Since Morrison v. National Australia Bank Ltd., 561 U.S. 247 (2010)

(“Morrison”), courts in this circuit and around the nation uniformly have held

that the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C.

§ 1961 et seq., does not apply extraterritorially.    These courts have sometimes

differed in how they determined whether a particular RICO application was

domestic or extraterritorial, but their underlying assumption has been consistent:

“RICO is silent as to any extraterritorial application” and, therefore, “it has

none.”  Norex Petroleum Ltd. v. Access Indus., Inc., 631 F.3d 29, 33 (2d Cir. 2010)

(“Norex”) (internal quotation marks omitted).1

                                                            

1 See United States v. Chao Fan Xu, 706 F.3d 965, 974–75 (9th Cir. 2013)

(recognizing presumption that RICO does not apply extraterritorially); Hourani

v. Mirtchev, 943 F. Supp. 2d 159 (D.D.C. 2013); In re LIBOR‐Based Fin.

Instruments Antitrust Litig., 935 F. Supp. 2d 666 (S.D.N.Y. 2013); Adhikari v.

Daoud & Partners, No. 09 Civ. 1237, 2013 WL 4511354 (S.D. Tex. Aug. 23, 2013);

Petroleos Mexicanos v. SK Eng’g & Const. Co., No. 12 Civ. 9070 (LLS), 2013 WL

3936191 (S.D.N.Y. July 30, 2013); Republic of Iraq v. ABB AG, 920 F. Supp. 2d 517

(S.D.N.Y. 2013); Tymoshenko v. Firtash, No. 11 Civ. 2794 (KMW), 2013 WL

1234821 (S.D.N.Y. Mar. 26, 2013); Mitsui O.S.K. Lines, Ltd. v. Seamaster Logistics,

Inc., 871 F. Supp. 2d 933 (N.D. Cal. 2012); Aluminum Bahrain B.S.C. v. Alcoa Inc.,

No. 8‐299, 2012 WL 2093997 (W.D. Pa. June 11, 2012); Chevron Corp. v. Donziger,

871 F. Supp. 2d 229 (S.D.N.Y. 2012); Sorota v. Sosa, 842 F. Supp. 2d 1345 (S.D. Fla.

2012); In re Toyota Motor Corp., 785 F. Supp. 2d 883 (C.D. Cal. 2011); United

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In this civil case, a panel of the court untethers RICO from its mooring on

United States shores and concludes, for the first time, that the statute reaches

overseas—even to a foreign enterprise conducted through an essentially foreign

pattern of racketeering—so long as one predicate act is alleged that references

conduct that could be prosecuted under a criminal statute that itself reaches

extraterritorially.  See European Cmty. v. RJR Nabisco, Inc., 764 F.3d 129, 136–37

(2d Cir. 2014) (“RJR Nabisco”).2  That same panel concludes that whether a RICO

claim is domestic or extraterritorial depends not on the locus of the enterprise or

                                                                                                                                                                                               

States v. Philip Morris USA, Inc., 783 F. Supp. 2d 23 (D.D.C. 2011); Cedeno v.

Intech Grp., Inc., 733 F. Supp. 2d 471 (S.D.N.Y. 2010).

2 As summarized by the RJR Nabisco panel, the racketeering scheme here at issue

involved a multi‐step process beginning with the smuggling of narcotics into

Europe by Colombian and Russian criminal organizations, which “laundered”

their euro proceeds through money brokers.  Those brokers then sold the euros

at a discount to cigarette importers who used the money to purchase RJR’s

cigarettes from wholesalers.    The complaint alleges that RJR directed and

controlled this money‐laundering scheme by, inter alia, concealing the identity of

cigarette purchasers, shipping cigarettes through Panama to shield the

transactions from scrutiny, and bribing Colombian border guards in order to

allow its employees to enter the country illegally to receive payments for

cigarettes and then to travel to Venezuela, from where funds were wired to RJR

Nabisco accounts in the United States.    See RJR Nabisco, 764 F.3d at 135.    In

addition to extraterritorially proscribed money laundering, see 18 U.S.C.

§ 1956(f), the complaint charges RJR Nabisco with the predicate extraterritorial

crime of providing material support for terrorism insofar as some cigarettes

acquired in the described scheme were sold in Iraq to or for the benefit of various

terrorist groups.  See Second Am. Compl. ¶¶ 75–83; 18 U.S.C. § 2339B(d)(2).

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the pattern of racketeering (or on some relationship between the two), but

instead on the location of particular predicate acts.    See id. at 140–41.    In so

holding, the panel rejects the district court’s determination that RICO’s focus is

the enterprise, that the locus of the enterprise determines whether RICO is being

applied domestically or extraterritorially, and that RICO has no extraterritorial

application to foreign enterprises.  See European Cmty. v. RJR Nabisco, Inc., No.

02 Civ. 5771 (NGG), 2011 WL 843957, at *4–7 (E.D.N.Y. Mar. 8, 2011).

RJR Nabisco has moved for this court to rehear the case en banc.  I vote to

grant that review because, like a number of my colleagues, I think the panel’s

treatment of RICO’s extraterritorial application conflicts with controlling

precedent, specifically, (1) the Supreme Court’s holding in Morrison, which

mandates a presumption against the extraterritorial application of United States

statutes unless Congress clearly expresses an affirmative intent to have a statute

reach abroad; and (2) our holding in Norex (relying on Morrison) that RICO does

not apply extraterritorially even though some of its predicate acts are crimes that

could be prosecuted extraterritorially.

My concern with the panel’s reliance on individual predicate acts to

support RICO’s extraterritorial reach extends also to its reliance on predicate acts

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to determine when RICO is being applied domestically and extraterritorially.  

Morrison used the “focus” of a statute to determine its application.  561 U.S. at

266.  Precedent emphasizes that RICO’s “focus” is not the alleged predicate acts,

but the relationship between a pattern of racketeering (demonstrated by

predicate acts) and an identified enterprise.  See, e.g., United States v. Basciano,

599 F.3d 184, 205–06 (2d Cir. 2010); see also United States v. Chao Fan Xu, 706

F.3d 965, 975 (9th Cir. 2013) (collecting cases identifying either “enterprise” or

“pattern of racketeering” as RICO’s focus).    Nor can the RJR Nabisco panel

suggest otherwise by characterizing RICO as an aggravating statute that simply

adds new consequences to the predicate offenses.  See RJR Nabisco, 764 F.3d at

135.  That premise, from which the rest of the panel’s analysis flows, is also at

odds with precedent.    Successive prosecutions for greater and lesser included

offenses implicate double jeopardy.    See Brown v. Ohio, 432 U.S. 161, 167–69

(1977).  But prosecutions for both RICO and predicate acts of racketeering do not.  

See United States v. Basciano, 599 F.3d at 205–06.   

In light of these concerns, this court needs to give further consideration to

two issues: (1) whether RICO applies extraterritorially, and (2) the criteria for

determining whether a RICO claim is domestic or extraterritorial.   Insofar as a

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majority of the active members of the court decline to convene en banc for this

purpose, I respectfully dissent.

1.    The Extraterritoriality Holdings in Morrison and Norex   

To explain how the panel decision conflicts with controlling

extraterritoriality precedent—both generally, as stated by the Supreme Court in

Morrison, and specifically, as applied to RICO by this court in Norex—it is

necessary briefly to discuss that precedent.

  In Morrison, the Supreme Court reaffirmed a strong presumption against

the extraterritorial application of any United States statute “unless there is the

affirmative intention of the Congress clearly expressed to give a statute

extraterritorial effect.” 561 U.S. at 255 (internal quotation marks omitted).  

Morrison found no such clear expression of affirmative intent in Section 10(b) of

the Securities Exchange Act of 1934, even though the statute’s prohibition of

fraud “in connection with the purchase or sale of any security” referenced means

or instrumentalities of interstate commerce, which by definition includes

commerce with foreign countries.  See 15 U.S.C. § 78j(b); id. § 78c(a)(17).  In so

holding, the Supreme Court specifically rejected the “conduct” and “effects” tests

developed by this court to “discern” when Congress would have wanted a

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statute, otherwise “silent as to . . . extraterritorial application,” to reach abroad.  

See Morrison, 561 U.S. at 255–61 (discussing and rejecting that approach in favor

of application of presumption against extraterritoriality “in all cases”).    To be

sure, Morrison noted that the presumption against extraterritoriality is not a

clear statement rule.   In short, it does not demand that a statute expressly say

“this law applies abroad”; “context can be consulted as well.”  Id. at 265.3  But

Morrison emphasized that, whatever the purported indicator of

extraterritoriality, it must clearly and affirmatively signal Congress’s intent for

the statute to reach outside this country’s borders.    See id.    Statutory

constructions that are merely “possible . . . do not override the presumption

against extraterritoriality.”  Id. at 264.4

                                                            

3 I understand this to mean statutory context, not legislative history, because if

Congress’s intent remains uncertain after all canons of construction are applied,

see generally Cohen v. JP Morgan Chase & Co., 498 F.3d 111, 116 (2d Cir. 2007)

(allowing consideration of legislative history only in those circumstances),

Congress can hardly be said to have clearly expressed its affirmative intent for a

statute to reach extraterritorially.

4 In fact, Congress is generally explicit in stating its intent for a statute to reach

extraterritorially.    The money laundering and material support predicates

alleged here are proscribed by criminal statutes that explicitly provide for

extraterritoriality.  As to money laundering, Congress has stated,

There is extraterritorial jurisdiction over the conduct prohibited by

this section if—(1) the conduct is by a United States citizen or, in the

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As this court has long recognized, the “RICO statute is silent as to any

extraterritorial application.”  North South Fin. Corp. v. Al‐Turki, 100 F.3d 1046,

                                                                                                                                                                                               

case of a non‐United States citizen, the conduct occurs in part in the

United States; and (2) the transaction or series of related transactions

involves funds or monetary instruments of a value exceeding

$10,000.

18 U.S.C. § 1956(f).   As to material support for terrorism, Congress has stated,

“There is extraterritorial Federal jurisdiction over an offense under this section.”  

Id. § 2339B(d)(2).   

Dozens of other statutes are similarly explicit.    See, e.g., id. § 1596

(authorizing “extra‐territorial jurisdiction” over any human trafficking offense

under specified statutory sections if offender is United States national,

permanent resident alien, or present in United States); 21 U.S.C. § 959 (stating

that prohibition on manufacture or distribution of controlled substances with

intent to import “is intended to reach acts of manufacture or distribution

committed outside the territorial jurisdiction of the United States”).   

The intended extraterritorial application of other statutes is made clear

from context: they proscribe only conduct occurring outside this country.  See 18

U.S.C. § 1119 (stating that United States national who “kills or attempts to kill a

national of the United States while such national is outside the United States but

within the jurisdiction of another country” is subject to criminal penalties as if act

had been committed within special maritime and territorial jurisdiction of United

States); id. § 1204 (prohibiting retention of “child (who has been in the United

States) outside the United States with intent to obstruct the lawful exercise of

parental rights”).   

In all these circumstances, courts need not engage in “divining what

Congress would have wanted if it had thought of the situation before the court,”

an exercise prohibited by Morrison, 561 U.S. at 261, because Congress has made

its extraterritorial intent clear.  The RICO statute, however, does not admit such a

conclusion.

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1051 (2d Cir. 1996) (emphasis added); see also United States v. Chao Fan Xu, 706

F.3d at 974 [9th Cir.] (same).  Nevertheless, before Morrison, we had borrowed

the conduct and effects tests from our securities and antitrust jurisprudence to

allow RICO to reach extraterritorially in some circumstances.  See North South

Fin. Corp. v. Al‐Turki, 100 F.3d at 1051–52.    In Norex, however, we

acknowledged that Morrison abrogated these tests, mandating both a generally

applicable presumption and “a bright‐line rule: absent a clear Congressional

expression of a statute’s extraterritorial application, a statute lacks extraterritorial

reach.”  Norex, 631 F.3d at 32.  Applying this rule to RICO, Norex identified no

clear expression of congressional intent for extraterritorial application.  Indeed,

Norex reiterated this court’s earlier categorical conclusion that the RICO statute

is “‘silent as to any extraterritorial application,’” id. (quoting North South Fin.

Corp. v. Al‐Turki, 100 F.3d at 1051, and declining to treat statement as dictum),

and concluded therefrom that “‘it has none,’” id. (quoting Morrison, 561 U.S. at

255).5

                                                            

5 Judge Hall, concurring in the denial of rehearing en banc, submits that this

description of Norex is misleading because “Norex never said that RICO has no

extraterritorial application.”  Hall, J., Op. Concurring in Denial of Reh’g En Banc,

ante at [3–4 n.2].  Perhaps not in haec verba.  But I respectfully submit that is the

conclusion fairly derived from Norex’s (1) quotation of Morrison’s rule that

“‘[w]hen a statute gives no clear indication of an extraterritorial application, it

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Norex then proceeded to hold that Morrison defeated the argument that,

just “because a number of RICO’s predicate acts possess an extraterritorial reach,

RICO itself possesses an extraterritorial reach.”   Id. at 33.   In so ruling, Norex

cited to Morrison’s discussion of Section 30(b) of the Exchange Act, see 15 U.S.C.

§ 78dd(b) (stating that Act and attending rules and regulations “shall not apply

to any person insofar as he transacts a business in securities without the

jurisdiction of the United States” unless he does so in violation of regulations

promulgated “to prevent . . . evasion” of Act (emphasis added)).  The Solicitor

General had argued that the exemption would have no function if the Act did

not apply in the first instance to securities transactions abroad.  See Morrison, 561

U.S. at 264.   While acknowledging that the urged construction was “possible,”

the Supreme Court concluded that such a possibility was insufficient to

overcome the presumption against extraterritoriality.   See id. (observing that it

would be “odd for Congress to indicate the extraterritorial application of the

whole Exchange Act by means of a provision imposing a condition precedent to

its application abroad” or by limiting “enabling regulations . . . to those

                                                                                                                                                                                               

has none,” Norex, 631 F.3d at 32 (quoting Morrison, 561 U.S. at 255), and (2) its

immediately following reiteration that RICO “‘is silent as to any extraterritorial

application,’” id. (quoting North South Fin. Corp. v. Al‐Turki, 100 F.3d at 1051).  

Silence is hardly a clear indicator.  

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preventing ‘evasion’ of the Act, rather than all those preventing ‘violation,’” and

concluding that provision was “directed at actions abroad that might conceal a

domestic violation or might cause what would otherwise be a domestic violation

to escape on a technicality”).  Indeed, the Supreme Court ruled that, even when a

statute clearly “provides for some extraterritorial application,” as in the case of

Section 30(a), 15 U.S.C. § 78dd(a), “the presumption against extraterritoriality

operates to limit that provision to its terms.”  Morrison, 561 U.S. at 265.6    

Norex’s specific reference to this last quoted excerpt from Morrison, see

631 F.3d at 32, together with its reiteration of RICO’s silence “as to any

extraterritorial application,” id. (internal quotation marks omitted), signal that

the extraterritorial reach of RICO’s predicate acts must also be limited “to [their]

terms.”    The terms of the extraterritorial crimes identified as RICO predicates

authorize extraterritorial jurisdiction for prosecutions under the referenced

proscribing criminal statutes, not for RICO claims alleging such predicates.

                                                            

6 By its terms, Section 30(a) expressly reaches certain extraterritorial securities

transactions, notably, when the issuer has prescribed ties to the United States and

the defendant broker or dealer acts in contravention of SEC rules and

regulations.  Thus, the Supreme Court’s treatment of Section 30(a)—limiting the

extraterritorial reach of that provision to its terms—should not be conflated with

its rejection of the argument that Section 30(b) only made sense if the Exchange

Act applied extraterritorially.  See Morrison, 561 U.S. at 263–65.

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To conclude otherwise, the RJR Nabisco panel must read Norex narrowly

to hold only that the inclusion of extraterritorial crimes in RICO’s list of predicate

acts does not clearly signal Congress’s intent for RICO to reach “extraterritorially

in all of its applications.”   RJR Nabisco, 764 F.3d at 136 (emphasis in original).  

The panel pronounces it error to interpret Norex to hold “that RICO can never

have extraterritorial reach in any of its applications.”  Id.  (emphasis in original).  

Thus freed from Norex’s categorical pronouncement that “RICO is silent as to

any extraterritorial application,” 631 F.3d at 32 (internal quotation marks

omitted; emphasis added), the panel concludes that Congress did indeed clearly

express its affirmative intent to have RICO reach extraterritorially when a

claim—including a civil claim—alleges a pattern of racketeering involving

predicate acts proscribed by criminal statutes with extraterritorial reach: “By

incorporating these [extraterritorially reaching criminal] statutes into RICO as

predicate racketeering acts, Congress has clearly communicated its intention that

RICO apply to extraterritorial conduct to the extent that extraterritorial violations

of those statutes serve as the basis for RICO liability.”  RJR Nabisco, 764 F.3d at

137.  I am not persuaded by this analysis and, thus, think we need to rehear this

case en banc.   

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First, the Norex decision is not so easily cabined as the RJR Nabisco panel

suggests.  The complaint in Norex alleged predicate acts of money laundering by

United States citizens in amounts exceeding $10,000.7    Such conduct, like the

money laundering at issue in RJR Nabisco, is specifically proscribed

extraterritorially.   See 18 U.S.C. § 1956(a), (f).   Thus, Norex’s rejection of RICO

extraterritoriality is not factually distinguishable from this case so as to signal

only a general rule not applicable when a plaintiff pleads extraterritorial crimes

as RICO predicates.

Second, and in any event, Norex and Morrison do not permit this court to

locate a clear expression of RICO’s extraterritoriality in pleaded predicates that

are themselves extraterritorial crimes.    The RJR Nabisco panel justifies that

conclusion by observing that certain RICO predicates reference crimes that apply

only to extraterritorial conduct.  See RJR Nabisco, 764 F.3d at 136 (citing 18 U.S.C.

§ 2332(a) (prohibiting killing United States national “while such national is

outside the United States”), and id. § 2423(c) (prohibiting “engaging in illicit

sexual conduct in foreign places”)).    The panel finds it “hard to imagine why

Congress would incorporate these statutes as RICO predicates if RICO could

                                                            

7 See First Am. Compl. ¶¶ 5–11, 168–70, 182–234, 304–16, J.A. 5579–81, 5556–57,

5559–68, 5579–81, Norex Petroleum Ltd. v. Access Indus., Inc., No. 07‐4553‐cv (2d

Cir. filed Jan. 9, 2008).

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never have extraterritorial application.”    Id. at 136 (emphasis in original).  

Morrison, however, effectively declined to recognize such speculative reasoning

as a substitute for Congress’s clear expression of affirmative intent when it

rejected the Solicitor General’s argument that an exception to extraterritoriality in

the Exchange Act made sense only if the statute applied extraterritorially.   See

561 U.S. at 263–65.   

In fact, it is not hard to imagine why Congress would have included

exclusively extraterritorial crimes in the list of RICO predicates without

necessarily intending to extend RICO’s own reach extraterritorially.    Domestic

enterprises can be conducted through patterns of racketeering manifested by

foreign as well as domestic acts.  For example, a domestic crime syndicate might

be conducted through a pattern of racketeering characterized mostly by domestic

drug trafficking and money laundering, but with its continuation enabled by the

murder of an American rival trafficker while the rival was outside the United

States.  Congress could well have determined that prosecutors should be allowed

to prove such an extraterritorial murder as a racketeering predicate in an

essentially domestic pattern of racketeering to demonstrate the intended

continuity of the pattern through which the domestic enterprise would be

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conducted.    See generally H.J. Inc. v. Nw. Bell Tel. Co., 492 U.S. 229, 239–41

(1989) (discussing relatedness and continuity requirements of racketeering

pattern).

Similarly, a foreign terrorist organization might engage in a pattern of

racketeering consisting primarily of attacks executed in the United States, but

financed with funds collected abroad.    See 18 U.S.C. § 2339C(a), (b)(2)(C)(ii).  

Congress could have determined that prosecutors seeking to prove the

relationship of the essentially domestic pattern to the foreign enterprise, as well

as the means for ensuring continuity, should be allowed to prove such criminal

extraterritorial financing.8

What is not clear from the inclusion of extraterritorially reaching crimes in

the list of RICO predicates, however, is Congress’s affirmative intent further to

extend RICO’s reach to foreign enterprises conducted through essentially foreign

patterns of racketeering whenever extraterritorial crimes are alleged predicate

acts.  The panel submits that such a construction best ensures that “a defendant

                                                            

8 This second hypothetical assumes that RICO can apply domestically to a

foreign enterprise engaged in a pattern of racketeering within the United States.  

The law on this point is not settled, as discussed infra at [21–27].    The point

warrants our consideration en banc particularly if, as I explain in that same

discussion, RICO’s domestic or extraterritorial application cannot be determined

by reference to individual predicate acts, which are not the statute’s focus.  See

Morrison, 561 U.S. at 267; United States v. Basciano, 599 F.3d at 205–06.

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associated with a foreign enterprise” is not permitted “to escape liability for

conduct that indisputably violates a RICO predicate,” citing as an example the

killing of a United States national abroad, conduct made criminal by 18 U.S.C.

§ 2332.  RJR Nabisco, 764 F.3d at 138.  The concern is unwarranted.  The United

States can always prosecute persons for such extraterritorial homicides directly

under § 2332.    Indeed, it has successfully done so.    See, e.g., In re Terrorist

Bombings of U.S. Embassies in E. Afr., 552 F.3d 93, 107 (2d Cir. 2008) (upholding,

inter alia, convictions for conspiracy to murder U.S. nationals in violation of

§ 2332).    Moreover, the maximum punishment a defendant would face under

§ 2332—death—is more, not less, severe than the maximum life sentence he

would face if convicted of violating RICO with a § 2332 predicate.  Compare 18

U.S.C. § 2232, with id. § 1963(a).

Thus, I respectfully submit that it raises a false alarm to suggest that

prosecutors will be thwarted in bringing terrorists to justice unless we recognize

RICO to extend extraterritorially to foreign enterprises conducted through

foreign patterns of racketeering upon the pleading of any extraterritorial‐crime

predicate.   Rather, it is civil litigants, such as plaintiffs here, who need such a

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ruling to pursue treble damages in United States courts for foreign racketeering

injuries.9

It is particularly difficult, however, to locate a clear expression of

affirmative congressional intent for civil RICO claims to reach extraterritorially in

the inclusion of extraterritorial crimes in RICO’s list of predicates.    By their

                                                            

9 In focusing on terrorism hypotheticals, some of my colleagues reference the

legislative objectives of the USA PATRIOT Act, which added certain

extraterritorial terrorism crimes to RICO’s list of predicates.    See Hall, J., Op.

Concurring in Denial of Reh’g En Banc, ante at [1–2]; Lynch, J., Op. Dissenting

from Denial of Reh’g En Banc, post at [1–3].    For reasons discussed supra at

[6 n.3], I do not think Morrison admits consideration of such extra‐textual

sources in applying the presumption against extraterritoriality.   

Furthermore, the cited references indicate only Congress’s intent to allow

RICO to be used against terrorists.    They say nothing about whether that

application can be extraterritorial as well as domestic.  Indeed, the 9/11 terrorist

attacks that prompted the USA PATRIOT Act involved murderous activity

within the United States by a domestic cell of terrorists affiliated with a foreign

organization.

In any event, RJR Nabisco’s predicate‐based analysis is not limited to

terrorism crimes but reaches the range of extraterritorial crimes listed as RICO

predicates.    For example, Congress included in that list 18 U.S.C. § 2423(c)

(prohibiting commercial sex abroad with persons younger than 18).   Does that

express its clear intent for RICO to apply extraterritorially to a bordello

enterprise in Thailand that secures underage prostitutes for American travelers

to that country?  The mere possibility that Congress’s intent could have reached

that far is not enough to override the presumption against extraterritoriality.  See

Morrison, 561 U.S. at 264.    Such caution is all the more warranted when RJR

Nabisco’s reasoning is applied to a civil RICO claim, for reasons I now discuss in

text.

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terms, the listed extraterritorial statutes authorize only criminal proceedings, not

private actions.  Victims of such crimes may be awarded restitution as part of a

defendant’s sentence or may be allowed to petition the government for shares of

forfeited proceeds.  See 18 U.S.C. §§ 3663, 3663A; 28 C.F.R. § 9.1 et seq.  But the

listed extraterritorial statutes—and specifically the money laundering and

material support statutes here at issue—themselves afford private persons no

civil causes of action.    Thus, while the RJR Nabisco panel purports to be

recognizing RICO extraterritoriality only to the extent “liability or guilt could

attach to extraterritorial conduct under the relevant RICO predicate,” RJR

Nabisco, 764 F.3d at 136, it in fact moves RICO well beyond the referenced

predicate in concluding that a plaintiff who pleads extraterritorial‐crime

predicates can pursue a civil RICO claim for treble damages, although Congress

provided no civil claim in the predicate criminal statute.       

Might Congress have approved such an extension of RICO if it had

considered such a circumstance?  Possibly.  But Morrison does not permit courts

to apply statutes extraterritorially by “divining what Congress would have

wanted if it had thought of the situation before the court.”  561 U.S. at 261.  No

more does it permit the possibility of such congressional intent to overcome the

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presumption against extraterritoriality.  See id. at 264.  Only a clear expression of

Congress’s affirmative intent that a statute reach extraterritorially can clear that

hurdle.  See id.; accord Norex, 631 F.3d at 32.   

For the reasons stated, I do not think Morrison and Norex permit our court

to identify such a clear expression of affirmative intent with respect to the civil

RICO claim here at issue.  Accordingly, the court should rehear this case en banc

to ensure a RICO extraterritoriality determination consistent with these

precedents.

2. The Panel Assigns RICO Predicates a Greater Role than Warranted Under

RICO Jurisprudence  

    

The panel’s decision to ground RICO’s extraterritorial reach in the

pleading of certain predicate acts also raises concerns under RICO jurisprudence.  

It has long been understood that the conduct proscribed by RICO is not the

individual predicate acts but, rather, the overall pattern of racketeering activity.  

See, e.g., United States v. Basciano, 599 F.3d at 205–06 (“[I]t is the pattern of

racketeering activity, not the predicates, that is punished by a racketeering

conviction.”); see generally Agency Holding Corp. v. Malley‐Duff & Assocs., 483

U.S. 143, 149 (1987) (observing that “RICO is designed to remedy injury caused

by a pattern of racketeering”).  More precisely, what RICO prohibits are specified

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interactions between an identified enterprise and a pattern of racketeering.  See,

e.g., United States v. Russotti, 717 F.2d 27, 33 (2d Cir. 1983) (“[I]t is neither the

enterprise standing alone nor the pattern of racketeering activity itself which

RICO criminalizes.  Rather, the combination of these two elements is the object of

punishment under RICO.” (emphasis in original)).  Thus, RICO’s focus is not on

any particular alleged predicate act but on (1) whether such predicate acts as are

proved demonstrate the requisite “pattern of racketeering,” a matter largely

dependent on their relatedness and continuity, see H.J. Inc. v. Nw. Bell Tel. Co.,

492 U.S. at 239–41; accord United States v. Daidone, 471 F.3d 371, 374–76 (2d Cir.

2006); and (2) whether that pattern or its proceeds are used to (a) “invest” in,

(b) “acquire or maintain . . . any interest in or control of,” or (c) “conduct or

participate . . . in the conduct of” the alleged enterprise, 18 U.S.C. § 1962(a)–(c).

I respectfully submit that this precedent does not permit RICO to be

construed as a statute that simply “adds new criminal and civil consequences to

the predicate offenses.”    RJR Nabisco, 764 F.3d at 135.    That construction is

further refuted by precedent permitting “a defendant to be prosecuted—either

simultaneously or at separate times—for both substantive racketeering and the

predicate crimes evidencing the pattern of racketeering.”    United States v.

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Basciano, 599 F.3d at 205; cf. Brown v. Ohio, 432 U.S. at 167–69 (holding that

double jeopardy bars successive prosecutions for greater and lesser included

offenses).

When the role assigned to predicate acts under our RICO jurisprudence is

thus understood—not as the object of the statute, but as a means for satisfying its

pattern element—it is difficult to identify a clear expression of affirmative intent

for civil RICO claims to reach extraterritorially simply from Congress’s inclusion

of some extraterritorially reaching crimes in the list of possible RICO predicates,

even when pleaded as part of the pattern of racketeering.   

That argument is defeated, in any event, by the fact that RICO does not

require proof of every alleged predicate act or of any particular predicate acts.  

See United States v. Basciano, 599 F.3d at 206.    The law demands only that a

RICO plaintiff prove sufficient predicate acts (but not fewer than two) to

demonstrate the required pattern of racketeering.    See id.   In short, a plaintiff

alleging a pattern of racketeering evidenced by various RICO predicates—some

applying extraterritorially, others applying domestically—might well carry his

pattern burden without proving any of the alleged extraterritorial predicates

that, under the panel’s formulation, are the singular basis for permitting a RICO

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claim to reach extraterritorially.    It would be curious for Congress to locate a

statute’s extraterritorial reach in an allegation that need not be proved.  If, on the

other hand, the panel intended to condition RICO’s extraterritorial reach on

proof of the alleged extraterritorial‐crime predicates—which is not apparent

from its opinion—it departs even further from our RICO jurisprudence in

requiring not simply proof of a pattern of racketeering, but proof of particular

predicates.

Thus, to ensure consistency in the role our jurisprudence assigns to RICO

predicate acts, the court should convene en banc to clarify that Congress’s

identification of some extraterritorial crimes as RICO predicates does not clearly

express an affirmative intent for civil RICO claims to reach extraterritorially

whenever a plaintiff alleges such crimes as predicate acts.   

3. Determining RICO’s Domestic and Extraterritorial Application

This case warrants rehearing for yet a third reason:  to clarify how courts

should distinguish RICO’s domestic and extraterritorial applications.  Before RJR

Nabisco, the understanding that RICO does not apply extraterritorially required

courts to determine whether a particular RICO claim was domestic or

extraterritorial.   That inquiry remains necessary after RJR Nabisco because the

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panel, in its effort to distinguish Norex, decides that RICO does not apply

extraterritorially when the alleged predicates are not extraterritorial crimes.  

Without regard to the locus of the enterprise or pattern of racketeering, the panel

rules that plaintiffs’ claim properly applied RICO extraterritorially to the extent it

alleged extraterritorial‐crime predicates, at the same time that the claim properly

applied RICO domestically to the extent it alleged domestic‐crime predicates

occurring in the United States.    This reliance on individual predicate acts to

determine whether a RICO claim is domestic or extraterritorial is at odds with

Morrison, Norex, and our RICO jurisprudence.

In Morrison, the Supreme Court concluded that a statute’s application is

properly determined by its “focus,” identified by looking to “the objects of the

statute’s solicitude.”  561 U.S. at 267.  Applying this standard to Section 10(b) of

the Exchange Act, which prohibits manipulative or deceptive practices in

connection with the purchase or sale of securities, Morrison concluded that the

statute’s focus was not on deceptive conduct, but on the purchase or sale of

securities in the United States.  See id. (“Section 10(b) does not punish deceptive

conduct, but only deceptive conduct ‘in connection with the purchase or sale of

any security registered on a national securities exchange or any security not so

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registered.’” (quoting 15 U.S.C. § 78j(b))).   Thus, the Exchange Act—which the

Court had already held did not apply extraterritorially—could not be applied

domestically to challenge foreign purchases or sales of securities based on

deceptive conduct in the United States.    Domestic application required the

purchase or sale of securities in this country.  See id.

In Norex, this court cited Morrison to reject a claim that alleged predicate

acts of racketeering committed within the United States—mail and wire fraud,

money laundering, Hobbs Act and Travel Act violations, and bribery—allowed

RICO to apply domestically to an international scheme to take over part of the

Russian oil industry.  See Norex, 631 F.3d at 31–32.       

The RJR Nabisco panel follows neither Morrison nor Norex in determining

whether plaintiffs’ claims here apply RICO extraterritorially or domestically.  

With no identification of RICO’s “focus,” as seemingly required by Morrison, the

RJR Nabisco panel looks to predicate acts alone to determine RICO’s application,

in seeming contravention of Norex.    Thus, the panel concludes that plaintiffs’

claim permissibly applies RICO extraterritorially for those predicate acts

occurring abroad (money laundering and support for terrorism), and permissibly

applies RICO domestically for those predicate acts occurring in this country

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(wire fraud, money fraud, and Travel Act violations).  See RJR Nabisco, 764 F.3d

at 140–43.    This novel approach—which makes individual predicates

determinative of RICO’s application without regard to the locus of the overall

pattern of racketeering or the enterprise—warrants en banc review for several

reasons.

First, this court needs to clarify whether Morrison does indeed require

courts to look to RICO’s “focus” to determine its domestic or extraterritorial

application.   

Second, the court needs either to identify RICO’s “focus” or to resolve the

tension between Norex and RJR Nabisco as to the role predicate acts can play in

determining RICO’s application.   

These matters raise significant challenges.  Following Morrison, and before

RJR Nabisco, courts had generally assumed that RICO’s domestic or

extraterritorial application should be determined by reference to “the ‘focus’ of

congressional concern” in enacting the statute.    Morrison, 561 U.S. at 266; see

United States v. Chao Fan Xu, 706 F.3d at 975 (collecting cases).  Norex’s citation

to Morrison in its rejection of plaintiff’s domestic application argument in that

case is consistent with this assumption.  See Norex, 631 F.3d at 32.  Thus, the RJR

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Nabisco panel’s failure to identify RICO’s focus, or to explain why it did not

need to do so to determine the statute’s application in this case, creates confusion

in this circuit as to Morrison’s controlling effect.  This court needs to clarify the

matter en banc.

Further, courts that have applied Morrison’s “focus” standard to RICO

have found the inquiry “far from clear‐cut.”  United States v. Chao Fan Xu, 706

F.3d at 975.    “[T]wo camps” have emerged: one locating RICO’s focus in the

“enterprise,” the other in the “pattern of racketeering.”    Id. (collecting cases).  

The district court in this case joined the first camp based on the fact that RICO

prohibits only racketeering activity connected in specified ways to an enterprise,

which it thought paralleled Morrison’s construction of the Exchange Act to

punish only frauds in connection with domestic securities transactions.    See

European Cmty. v. RJR Nabisco, Inc., 2011 WL 843957, at *5 (citing Morrison, 561

U.S. at 266–67).  By contrast, the Ninth Circuit joined the “pattern” camp, citing

Supreme Court decisions stating that “the heart of any RICO complaint is the

allegation of a pattern of racketeering,” Agency Holding Corp. v. Malley‐Duff &

Assocs., 483 U.S. at 154 (emphasis in original), and referencing “RICO’s key

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requirement of a pattern of racketeering,” H.J. Inc. v. Nw. Bell Tel. Co., 492 U.S.

at 236.  See United States v. Chao Fan Xu, 706 F.3d at 976–77.10

In Norex, this court did not choose between “enterprise” and “pattern”

but, rather, considered both in concluding that a few predicate acts in the United

States were insufficient to allow RICO to be applied domestically to a claim

involving a foreign enterprise and an essentially foreign pattern of racketeering.  

See 631 F.3d at 32.  But Norex’s treatment of the matter is so brief as to preclude a

                                                            

10 In United States v. Chao Fan Xu, the Ninth Circuit upheld the domestic

application of RICO to defendants’ prosecution for scheming “to steal large sums

of money from the Bank of China and to get away with it in the United States.”  

706 F.3d at 979 (observing that immigration and bank fraud parts of pattern were

inextricably linked so that without immigration fraud in United States, bank

fraud in China would have been “a dangerous failure”).  Thus, while defendants’

“pattern of racketeering activity may have been conceived and planned

overseas,” the court concluded that “it was executed and perpetuated in the

United States,” allowing for domestic prosecution.  Id.

Judge Lynch poses certain hypotheticals that might also support RICO’s

domestic application to foreign enterprises conducted through patterns of

racketeering occurring wholly (or at least mainly) in this country.  See Lynch, J.,

Op. Dissenting from Denial of Reh’g En Banc, post at [3].  But if pattern, rather

than enterprise (or enterprise in relation to pattern), is RICO’s focus and, thus,

determinative of its application, this court should say so en banc.  In any event, a

conclusion that RICO can apply domestically to a pattern of racketeering

occurring mostly in the United States does not ineluctably lead to a conclusion

that Congress intended for RICO to apply extraterritorially to a foreign

enterprise conducted through an entirely foreign pattern of racketeering

evidenced by predicates prohibited by extraterritorially reaching statutes—Judge

Lynch’s third hypothetical.    See id. at [3].    Certainly, that possibility warrants

further careful consideration en banc.

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confident conclusion on the focus point.   In any event, Norex does not specify

whether enterprise and pattern should be viewed independently, conjunctively,

or alternatively in determining RICO’s application.11   

Where Norex is not ambiguous, however, is in its rejection of predicate

acts as determinative of RICO’s application.  This is evident from its affirmance

of the dismissal of RICO claims despite allegations that domestic predicate acts

were part of the pattern of racketeering.  See 631 F.3d at 31.  It is RJR Nabisco that

confuses that point by relying exclusively on predicate acts to determine RICO’s

application.   That approach is not only at odds with Norex and Morrison, but

also with our RICO jurisprudence, which as already discussed holds that the

object of racketeering “is to conduct the affairs of a charged enterprise through a

pattern of racketeering, not to commit discrete predicate acts.”  United States v.

Pizzonia, 577 F.3d 455, 459 (2d Cir. 2009); accord United States v. Basciano, 599

F.3d at 205–06; see also United States v. Russotti, 717 F.2d at 33.

                                                            

11  In its amicus filing, the United States urges that RICO’s focus is on both the

enterprise and the pattern of racketeering, so that these elements can operate in

the alternative to allow RICO to apply domestically if either the enterprise or the

overall pattern of racketeering operates in the United States.  See Br. of United

States 7–20.  The United States does not argue in favor of the RJR Nabisco panel’s

use of individual predicate acts to determine RICO’s application.

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Thus, if Morrison does, indeed, require RICO application to be determined

by reference to the statute’s focus, and if discrete predicate acts are not RICO’s

focus, this court needs to clarify en banc how a court properly determines

whether a RICO application is domestic or extraterritorial.  

Accordingly, I respectfully dissent from the court’s decision not to rehear

this case en banc to provide needed clarity as to both (1) whether RICO applies

extraterritorially, and (2) the criteria for determining whether a RICO claim is

domestic or extraterritorial.

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