Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca2-11-02475/USCOURTS-ca2-11-02475-9/pdf.json

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

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GERARD E. LYNCH, Circuit Judge, dissenting from the denial of rehearing en banc:

I join in Judge Jacobs’s dissent from denial of rehearing en banc, because I believe that

the tension between the panel’s holding in this case, European Community v. RJR Nabisco, Inc.,

764 F.3d 129 (2d Cir. 2014), and our prior decision in Norex Petroleum Ltd. v. Access Industries,

Inc., 631 F.3d 29 (2d Cir. 2010), should be resolved. But I do not join the other dissenters in

their criticisms of the panel’s resolution. Because en banc review has been denied, I do not need

to come to a definitive conclusion about the circumstances under which RICO reaches conduct

occurring outside the United States. Largely for the reasons explained by Judge Hall, however, I

am inclined to think that the better outcome would be to adopt the view of the panel in this case

and hold that RICO applies to patterns of predicate acts committed abroad where those predicate

acts violate federal statutes with express extraterritorial reach. 

As Judge Raggi’s dissent demonstrates, the very concept of “extraterritorial application”

of a complex statute such as RICO is a vexing one. See Raggi Dissent at 22-28. Such a question

is not easily resolved by sloganeering reference to the presumption against extraterritoriality

emphasized in Morrison v. National Australia Bank, Ltd., 561 U.S. 247, 255 (2010). The

primary prohibition in RICO, and the one at issue here, criminalizes “conduct[ing] . . . [an]

enterprise’s affairs . . . through a pattern of racketeering activity.” 18 U.S.C. § 1962(c). The two

key elements are the “enterprise” and the “pattern of racketeering.” Which, or what

combination, of these elements is critical in determining whether any given application of RICO

is “extraterritorial”?

Consider the following hypothetical. A leader of a revolutionary group based largely in a

Middle Eastern country, in an effort to intimidate the United States to stop supporting that

country’s government, plots and carries out two crimes: planting a bomb near a federal office

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building in an American city, resulting in the deaths of several people, and beheading an

abducted American journalist in the country where the group primarily operates. The terrorist

leader is captured by American forces, and is indicted in the United States for violating RICO. 

The revolutionary group likely qualifies as an “enterprise” under the definition of that term in 18

U.S.C. § 1961(4). Both terrorist strikes qualify as one or more racketeering acts: the bombing in

the United States involves arson and murder, chargeable as felonies under the law of the relevant

state, see 18 U.S.C. § 1961(1)(A), and the murder of an American abroad is indictable 

under 18 U.S.C. § 2332(a)(1) – a statute that by its very terms can only be violated by acts

outside the United States – which is listed as a RICO predicate under 18 U.S.C. §§ 1961(1)(G)

and 2332b(g)(5)(B). Together, these acts very likely form a “pattern of racketeering activity,”

since they are related to each other in goals, methods, and personnel, and they exhibit continuity

because the enterprise has a continuous existence that threatens to involve further such acts. See

18 U.S.C. § 1961(5); H.J. Inc. v. Northwestern Bell Telephone Co., 492 U.S. 229, 240-42 (1989).

Is this an “extraterritorial” application of RICO? Not an easy question. The enterprise in

question is primarily foreign, in its membership, goals, and usual sphere of operation. The

pattern of racketeering activity took place partially in the United States and partially abroad,

though the foreign portion of the pattern involved conduct that Congress has expressly chosen to

reach via the extraterritorial application of American law. Whether to characterize the

hypothetical indictment as an “extraterritorial application of RICO” is an interesting conceptual

question.

But the actual legal question posed by the hypothetical indictment is whether Congress

intended to reach such conduct by the RICO statute, and that, as Judge Hall demonstrates, is a

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rather easy question to answer. See Hall Concurrence at 1-2. Nothing in the definition of

“enterprise” excludes foreign-based associations, groups, or corporations, and it is difficult to

believe that Congress intended to exclude them. If members of a Mexican drug cartel, the

Sicilian Mafia, or a foreign-based terrorist organization commit a series of violent crimes on

U.S. soil that would clearly violate RICO if committed by a local drug distribution gang, a New

York-based Mafia family, or the Weather Underground, after all, it would be quite odd to

consider the prosecution of such acts in the United States an “extraterritorial” application of

RICO, and there is certainly no reason to believe that Congress did not intend to apply RICO to

such actions simply because the (entirely American) pattern of racketeering was carried out to

further the goals of a foreign enterprise.

Does the outcome change if one predicate crime that formed part of the charged pattern

of racketeering activity took place abroad, in violation of a statute that Congress (a) expressly

gave extraterritorial reach and (b) expressly made a RICO predicate? I can’t see how it does. 

How can Congress’s enactment of a law specifically designed to protect Americans abroad, and

its express incorporation of that law into RICO as a predicate crime, constitute anything other

than a clear expression of congressional intent to apply RICO to persons who commit that crime,

in furtherance of the affairs of an enterprise, as part of a pattern of racketeering? The plain

meaning of RICO demands that result. By including certain crimes with extraterritorial

application as RICO predicates – including some that can only be committed abroad – Congress

unequivocally expressed its intention that RICO apply to patterns of racketeering activity that

include such crimes. You may call this an “extraterritorial” application of RICO if you like, but,

whether or not the label is properly applied, there is no doubt that Congress intended to apply

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RICO in that situation. Nor should that conclusion change if all the predicate crimes alleged

were committed abroad – if, for example, the revolutionary group planted no bombs on U.S. soil

but carried out multiple beheadings of Americans in violation of 18 U.S.C. § 2332(a)(1). So

long as Congress expressly extended its criminal prohibitions to the foreign conduct in question

and incorporated those prohibitions into RICO, Congress has determined that such predicate

crimes can constitute a pattern within the definition of RICO. Presumably it has done so because

a pattern of such crimes strikes at American interests just as much as a pattern of terrorist acts

committed in the United States by the same foreign-based enterprise.

Of course, none of this suggests an intention to apply RICO, generally, to conduct

committed abroad. If members of a foreign enterprise engage in a pattern of entirely foreign

murders and drug distribution, nothing in RICO could make that activity a crime under U.S. law. 

Indeed, although applying RICO to such conduct would plainly be an “extraterritorial”

application of the statute, we need not even invoke the presumption against extraterritoriality to

know that the application is impermissible, because the definitional provisions of RICO make

clear that Congress did not define such conduct as a RICO violation. A pattern of murders of

Italian citizens committed by members of an Italian organized crime group in Italy cannot violate

RICO, because murder is a RICO predicate only when it is “chargeable under state law” or

indictable under specific federal statutes. See 18 U.S.C. §§ 1961(1)(A), 1961(1)(G). Entirely

foreign activity does not qualify, and nothing in RICO indicates any contrary intent to extend its

reach to foreign criminality of a similar nature to the domestic conduct covered by RICO. To the

extent that Norex holds that RICO does not, of its own force and in general, have

“extraterritorial” application in such circumstances, it is of course correct. 

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In that sense, indeed, RICO does not even implicate the extraterritorial ambiguities raised

by most statutes. Most congressional statutes prohibit conduct in general terms that, on their

face, could be taken to apply to anyone in the world. In Morrison, for example, the Supreme

Court interpreted a provision of the Securities Exchange Act that makes it “unlawful for any

person, directly or indirectly, by the use of any means or instrumentality of interstate commerce

or of the mails, or of any facility of any national securities exchange . . . [t]o use or employ, in

connection with the purchase or sale of any security . . . any manipulative or deceptive device.” 

See 15 U.S.C. § 78j(b). But we know that Congress generally does not intend, by using such

broad language as “any person” or “any national securities exchange,” to apply those generalized

prohibitions to actions that take place outside our borders, because Congress ordinarily legislates

to regulate conduct within its primary jurisdiction; that is what the presumption against

extraterritorial application means. Liu Meng-Lin v. Siemens AG, 763 F.3d 175, 178 (2d Cir.

2014). That presumption applies to RICO as it does to other statutes, but RICO is quite explicit

that its prohibitions apply only to patterns of racketeering acts that themselves violate state or

federal law. It does not, for example, say that “no person shall conduct the affairs of an

enterprise through a pattern of committing murder,” but confines itself to patterns of murder that

are chargeable under the law of a state, or that are indictable under specific federal law. Unlike

§ 10(b), RICO is thus not even susceptible to a literalist reading that its general terms might

apply to foreigners. 

At the same time, however, Congress was exquisitely clear that some acts that are

committed abroad are predicate acts under RICO, and thus can form a pattern of racketeering

activity. To the extent that a pattern consisting of such acts is charged as a violation of RICO, I

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see nothing in the presumption against extraterritoriality that exempts that pattern from

prosecution. It therefore seems to me that there is nothing novel or odd about the idea that RICO

does not, in general, “apply extraterritorially,” but that it may apply to acts committed abroad

where those acts violate statutes that were themselves expressly stated by Congress to have

extraterritorial application and that Congress has classified as RICO predicates.

In the present posture of the case, I need not address all of the issues that may arise in

working out these basic principles. Nor need I decide how the instant case should be resolved,

or whether Norex was correctly decided. I join the dissenters in believing that we would do well

to convene en banc to resolve those very questions, and I agree with them that the reasoning and

result in this case are deeply in tension with the reasoning and result in Norex, whether or not

those two holdings are ultimately irreconcilable. To the extent, however, that the other

dissenters see the panel’s approach to RICO and extraterritoriality as deeply disturbing,

unprecedented, and inconsistent with Morrison, I respectfully disagree. To the contrary, I

believe that any interpretation that suggests that operatives of a foreign enterprise cannot be held

accountable under RICO for a pattern of predicate crimes that violate federal statutes with

express extraterritorial reach would astonish the Congress that made such violations RICO

predicates in the first place. Should the Supreme Court take up my dissenting colleagues’

invitation to grant further review of this case, I hope and trust that it will not allow the context of

this case – a civil action that, like many civil RICO suits, might lead some to doubt the wisdom

of allowing a somewhat amorphous statute to be wielded by private interests in endlessly

creative ways – to blind it to the clear intention of Congress to apply RICO to foreign terrorist

groups who commit patterns of criminal acts that may occur abroad, but that violate American

laws with express extraterritorial reach.

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