Document: 529 U.S. 494120 S.Ct. 1608146 L.Ed.2d 561 SyllabusNOTE: Where it is feasible, a syllabus (headnote) will be released, as being done in connection with this case, at the time opinion issued. The constitutes no part of Court but has been prepared by Reporter Decisions for convenience reader. See United States v. Detroit Timber & Lumber Co., 200 321, 337. SUPREME COURT OF THE UNITED STATES BECKv.PRUPIS et al. CERTIORARI TO APPEALSFOR ELEVENTH CIRCUIT No. 98-1480. Argued November 3, 1999 Decided April 26, 2000 Racketeer Influenced and Corrupt Organizations Act (RICO) creates civil cause action "[a]ny person injured his business or property reason violation section 1962." 18 U.S.C. § 1964(c). Subsection (d) §1962 forbids "any to conspire violate any provisions subsection (a), (b), (c) [§1962]." Petitioner former president, CEO, director, shareholder Southeastern Insurance Group (SIG). Respondents are senior officers directors SIG who allegedly conspired did engage acts racketeering. alleged that after he discovered respondents' unlawful conduct contacted regulators, respondents orchestrated scheme remove him from company. sued respondents, asserting, among other things, §1964(c) conspiracy §§1962(a), (c). injury was proximately caused an overt act-namely, termination employment-done furtherance conspiracy, therefore provided action. District dismissed RICO claim, agreeing employees terminated refusing participate activities, threaten report do not have standing sue under damages their loss employment. In affirming, Eleventh Circuit held that, because act causing petitioner's racketeering, could support Held: Injury racketeering otherwise wrongful does give rise §1962(d). To determine what means "injured _ of" "conspir[acy]," must look common law conspiracy. At law, widely accepted plaintiff bring suit only if had itself tortious. When Congress adopted RICO, incorporated principle. As cannot based on might injury. Rather, such allege analogous "ac[t] tortious character," see 4 Restatement (Second) Torts, §876, Comment b, meaning independently RICO. specific type character may depend underlying substantive defendant committed. Because provision statute, petitioner §1964(c). Pp. 6_13. 162 F.3d 1090, affirmed. Thomas, J., delivered Court, which Rehnquist, C. O'Connor, Scalia, Kennedy, Ginsburg, Breyer, JJ., joined. Stevens, filed dissenting opinion, Souter, Opinion NOTICE: This subject formal revision before publication preliminary print Reports. Readers requested notify Decisions, Supreme States, Washington, D. 20543, typographical errors, order corrections made goes press. Justice Thomas Court. 1 (RICO), 1961_1968 (1994 ed. Supp. IV), 1964(c) ed., IV). turn provides "[i]t shall question us whether §1964(c), even We conclude 2 * A 3 enacted Title IX Organized Crime Control 1970, Pub. L. 91_452, 84 Stat. 922, purpose "seek[ing] eradication organized crime States," id., 923. found "organized [had become] highly sophisticated, diversified, widespread activity annually drain[ed] billions dollars America's economy illegal use force, fraud, corruption." Id., 922. result "weaken stability Nation's economic system, harm innocent investors competing organizations, interfere free competition, seriously burden interstate foreign commerce, domestic security, undermine general welfare Nation its citizens." Finding existing "sanctions remedies available Government [to be] unnecessarily limited scope impact," resolved address problem "by strengthening legal tools evidence-gathering process, establishing new penal prohibitions, providing enhanced sanctions deal activities those engaged crime." Ibid. attempts accomplish these goals severe criminal penalties violations §1962, §1963, also 1962," IV).1 Section 1962, turn, consists four subsections: (a) makes "unlawful received income derived, directly indirectly, pattern through collection debt invest, income, proceeds acquisition interest in, establishment operation of, enterprise affect, commerce"; (b) acquire maintain, control employed associated participate, enterprise's affairs debt"; and, finally, "for section." B 5 Petitioner, Robert A. Beck II, (SIG).3 Respondents, Ronald M. Prupis, Leonard Bellezza, William Paulus, Jr., Ernest S. Sabato, Harry Olstein, Frederick Mezey, Joseph Littenberg, SIG. Until 1990, when declared bankruptcy, Florida insurance holding company three operating subsidiaries, each writing surety bonds construction contractors. 6 Beginning around 1987, certain SIG, including began engaging They created entity called Construction Performance Corporation, demanded fees contractors exchange qualifying them bonds. diverted corporate funds personal uses submitted false financial statements shareholders, creditors. During most unaware activities. early 1988, however, regulators concerning statements. then hired consultant write suggesting failed perform material duties. day presented board directors, fired petitioner, relying clause contract event "inability substantial failure [his] duties." App. 104. §1964(c).4 particular, claimed used invested derived establish operate enterprise, §1962(a); acquired maintained activity, §1962(b); §1962(c); importantly present purposes, commit aforementioned acts, With respect last theory motion summary judgment, arguing agreed claim. Appeals affirmed, §1962(d) unless 1098 (CA11 1998). Since §1961(1), court held, "RICO express target-racketeering activity-and injuries should actionable statute." Ibid.5 7 granted certiorari, 526 1158 (1999), resolve conflict Courts assert claim constitute "racketeering activity." majority Circuits consider answered negative. See, e.g., Bowman Western Auto Supply 985 F.2d 383, 388 (CA8), cert. denied, 508 957 (1993); Miranda Ponce Fed. Bank, 948 41, 48 (CA1 1991); Reddy Litton Indus., Inc., 912 291, 294_295 (CA9 1990), 502 921 (1991); Hecht Commerce Clearing House, 897 21, 25 (CA2 1990). Other allowed claims where wasas instant casemerely employment, not, therefore, activity. Khurana Innovative Health Care Systems, 130 143, 153_154 (CA5 1997), vacated sub nom. Teel Khurana, 525 979 (1998); Schiffels Kemper Financial Services, 978 344, 348_349 (CA7 1992); Shearin E. F. Hutton Group, 885 1162, 1168_1169 (CA3 1989). II 8 case turns combined effect two read conjunction, provide states anyone 1962(d) "to we well-established said, language settled 9 "presumably knows adopts cluster ideas were attached borrowed word body learning taken convey judicial mind instructed. absence contrary direction satisfaction definitions, departure them." Morissette 342 246, 263 (1952). 10 Molzof 301, 307 (1992) (quoting Morissette, supra, 263); NLRB Amax Coal 453 322, 329 (1981).6 11 By RICO's enactment Torts b (1977) ("The mere plan, design agreement enough liability itself, there carrying into execution"); W. Prosser, Law §46, p. 293 (4th 1971) ("It employed, purposes accomplished, themselves tortious, conspirators acted promoted liable" (footnotes omitted)); Satin Satin, 69 Div. 2d 761, 762, 414 N. Y. 570, (1979) (Memorandum Decision) ("There tort itself. There first pleaded independent tort"); Cohen Bowdoin, 288 106, 110 (Me. 1972) (" `[C]onspiracy' fails basis imposition absent actual commission some recognized tort; separate committed, tort, fact combination, foundation liability"); Earp Detroit, 16 Mich. 271, 275, 167 841, 845 (1969) ("Recovery parties concerted long elements properly proved"); Mills Hansell, 378 53, 1967) (per curiam) (affirming dismissal defraud committed tort); J. Ornamental Iron Co. Watkins, 114 Ga. 688, 691, 152 613, 615 (1966) ("[The plaintiff] all same would required allegation conspiracy"); Lesperance North American Aviation, 217 Cal. 336, 345 31 Rptr. 873, 878 (1963) ("[C]onspiracy something without right action" (internal quotation marks Middlesex Concrete Products Excavating Corp. Carteret Indus. Assn., 37 507, 516, 181 774, 779 (1962) ("[A] which, action"); Chapman Pollock, 148 769, 772 (WD Mo. 1957) (holding charged defendants "conspiring perpetrate purpose" recover act); Olmsted, Maryland Casualty 218 Iowa 997, 998, 253 804 (1934) pursuant Adler Fenton, 24 How. 407, 410 (1861) ("[T]he consequent damage"). 12 Consistent principle, sometimes said action, mechanism subjecting co-conspirators one member act. Royster Baker, 365 496, 499, 500 (Mo. 1963) ("[A]n between actionable. Some 's damage more defendants, merely bears various joint tort-feasors"). Halberstam Welch, 705 472, 479 (CADC 1983) ("Since depends performance act, actionable; rather, vicarious tort").7 13 principle so adoption understanding "civil conspiracy." Ballentine's Dictionary 252 (3d 1969) wrong resulting damage, Black's 383 1968) ("[W]here, out conspirators, (emphasis added)). presume, established " meant adopt common-law principles. 14 Stevens challenge our view incorporate principles Nor attempt make affirmative reading statute pointing agreement; nontortious recovery plaintiff. post, 2. Instead, argues courts, authoritative commentators, dictionaries repeatedly articulated rule application.8 find argument implausible accordingly, understand cited. Interpreting way consistent principles, n. 7, sufficient consistency requires committed.9 However, statute. §1964(c).10 15 challenges longstanding canon statutory terms construed render meaningless superfluous. He asserts necessarily §1962(a), assertions, interpretation surplusage. Under interpretation, could, §1962(d), violated §1962. III conclude, predicated 17 judgment It ordered. 19 whom Souter joins, dissenting. 20 For decision, I assume-as think does-that 1962(d). my plain clear listed §1961(1). cases relied upon prove nothing contrary. 21 "conspiracy" agreement. is, course, difference admittedly gives damages. 1962(d), conspiracies unlawful, addresses question;1 imposes liability, concerns latter. property" bringing And kind results form naturally via act.2 But either requiring defined §1961(1).3 22 Court's central premise notion imposed furthered harmed particular namely, character. cited point. First, actually parallels premise. That involved situation agreement, refusal impose 23 Of dozen ante, 7_9, half rejected they satisfy condition above, i.e., about made. 570 ("Here, against [one defendant] alone_ . event, doubtful here individual own corporation"); 54 ("[W]e feel able trial judge correctly concluded misconduct [the defendants]"); 346, ("[E]mployer (so far appears) terminate [plaintiff's] services committing wrong"); fatal defect plaintiff's lawful nature, plaintiff"); Inc. 1003, 804, 807 ("A record. direct evidence formed. inferred record, unlawful"); petition than agreed, term preferred, conspired, manner"). Three refused missing; suffer harm. 280_282, 847_848 (Plaintiff waived invade privacy disclosing private information); 691_692, ("Plaintiff way. [T]he contains allegations showing Thus state theory"); 411_413 (1861). remaining refuse ground. ("We decide complaint relief can granted"); 780 ("[S]o much defendants' sought insufficient fail," sustaining unrelated privilege defense); 489 1983). cited, short, simply work do.4 Furthermore, least speak generally exclusively acts.5 Indeed, sources recognize instances, conspiracy.6 nine opinions intermediate courts three-page Federal Court-hardly strong "widely accepted" relies. Ante, 7. Thus, place conclusion firm footing. 26 Nevertheless, concludes "a [must] `ac[t] character.' 12. Even assuming statement correct, though, me why "injure[s]" "in (as requires) "analogous character' "tortious act" "an RICO." added). 27 assumes further correct say RICO," analogy held. holds injuring §1961(1)-such murder, bribery, arson, extortion. Racketeering "independently are, federal Act. RICO" accepting analogy, predicate still Only constituted And, already covered provisions, hardly need §1962(d)'s 28 29 require recitation otherwise, indeed, contradicts holding. 30 reasons, respectfully dissent. Notes 1. authorizes actions "prevent restrain" 1964(a) (b). 32 1961(1) exhaustive list "racketeering," commonly referred "predicate acts." includes extortion, mail wire 50 petitioner. 1961(4) defines "enterprise" individual, partnership, corporation, association, entity, union group individuals although entity." 33 3. On review Appeals' affirmance accept true Anderson Liberty Lobby, 477 242, 255 (1986). 34 4. Petitioner's lawsuit originally brought cross-claim shareholders' derivative New Jersey. Jersey severed transferred Southern Florida. 35 5. Although (c), subsections treated alleging §1962(c). F.3d, 1095, 8. regarding §1962(c) affirmed granting claims. 1095_1098. §§1962(a)_(c). 36 6. suggests criminal, rather civil, interpret turned define Salinas 522 52, 63_65 (1997), necessary liability. violation. words, task §§1964(c) alone. obvious source quotes suggest 4, (dissenting opinion). quotations omit pertinent language. context, passages refer harm, Compare ibid, ("[I]t shown wrong, theirs [I]n tortious"); 499 ("Strictly speaking, distinct writ conspiracy; sounds nature alleged. gist conspiracy" (citations internal 345, `It well action' "); coupled damaged Recovery proved" (citation omitted); (stating causes injury_ tort"). 38 disagree, moreover, Stevens' grounds decision example, reads 53 curiam), 1957), deny entered opinions, denied regardless ibid. Likewise, (1966), suffered several torts trespass, malicious interference. While maliciously injury, "all Further, chides citing recovery. explicitly grounded identified based. ("[I]f claim] upheld stating granted, ground sufficiently alleges defamation plaintiffs stated tort). ample 39 9. appeals so-called investment rule, suing §1962(a) defendant's "use invest[ment]" §1962(a). Crowe Henry, 43 198, 205 1995); Vemco, Camardella, 129, 132 (CA6) (collecting cases), 513 1017 (1994). issue, arguably illicit proceeds. 40 10. argue merit different (albeit related) issue flowing Therefore, suggestion, 5_6, §§1962(a)_(c), complete 41 Those (1997). "[t]here requirement 63, mean alone 42 Holmes Securities Investor Protection 503 258, 268 (1992), proximate "[R]acketeering activity" §1961(1) include slew crimes 44 tort-and suggested, 10_11, best, demonstrates harmful hand, questions overlapping substance. extent true, point view. proves parse do. Moreover, outset, both assume case. If cites show contradict inapposite. 45 facts done' simple existence formed conspiracy_ Unless combination lies anyone"); 487 requires: manner; someone participating it; act"). 46 110, aware extraordinary circumstances self-sufficient `conspiracy,' Halberstam, F.2d, 477, 7; now seems types conduct, boycotts, element adds power coercion, undue influence restraint trade, man legitimately perhaps pointless debate becomes it. basis, determining factor liability"). Snipes West Flagler Kennel Club, 105 So. 164, 165_167, (Fla. 1958), precisely

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