Source: https://www.legalcrystal.com/case/105869/sedima-s-p-r-l-vs-imrex-co-inc
Timestamp: 2018-02-21 15:00:27
Document Index: 708328966

Matched Legal Cases: ['§ 1961', '§ 1961', '§ 1964', '§ 1964', '§ 1962', '§ 1964', '§ 1962', '§ 1961', '§ 1964', '§ 1964', '§ 1961', '§ 1964', '§ 1963', '§ 1964', '§ 1962', '§ 1964', '§ 1964', '§ 1964', '§ 1961', '§ 1961', '§ 1962', '§ 1962', '§ 1964', '§ 1962', '§ 1962', '§ 1962', '§ 1962', '§ 904', '§ 1964', '§ 1964', '§ 1964', '§ 1964', '§ 904', '§ 1961', '§ 1962', '§ 1964', '§ 1964', '§ 1961', '§ 1961', '§ 3575', '§ 1964', '§ 1964', '§ 1962', '§ 1961', '§ 1964', '§ 1962', '§ 4', '§ 1964', '§ 904']

Sedima S P R L Vs Imrex Co Inc - Citation 105869 - Court Judgment | LegalCrystal
Sedima, S.P.R.L. Vs. Imrex Co., Inc. - Court Judgment
LegalCrystal Citation legalcrystal.com/105869
Case Number 473 U.S. 479
Appellant Sedima, S.P.R.L.
Respondent imrex Co., Inc.
sedima, s.p.r.l. v. imrex co., inc. - 473 u.s. 479 (1985) u.s. supreme court sedima, s.p.r.l. v. imrex co., inc., 473 u.s. 479 (1985) sedima, s.p.r.l. v. imrex co., inc. no. 84-648 argued april 17, 1985 decided july 1, 1985 473 u.s. 479 certiorari to the united states court of appeals for the second circuit syllabus the racketeer influenced and corrupt organizations act (rico), 18 u.s.c. §§ 1961-1968, which is directed at "racketeering activity" -- defined in § 1961(1) to encompass, inter alia, acts "indictable" under specific federal criminal provisions, including mail and wire fraud -- provides in § 1964(c) for a private civil action to recover treble damages by any person injured in his business or.....
Sedima, S.P.R.L. v. Imrex Co., Inc. - 473 U.S. 479 (1985)
U.S. Supreme Court Sedima, S.P.R.L. v. Imrex Co., Inc., 473 U.S. 479 (1985)
1. There is no requirement that a private action under § 1964(c) can proceed only against a defendant who has already been convicted of a predicate act or of a RICO violation. A prior conviction requirement is not supported by RICO's history, its language, or considerations of policy. To the contrary, every indication is that no such requirement exists. Accordingly, the fact that respondents have not been convicted under RICO or the federal mail and wire fraud statutes does not bar petitioner's action. Pp. 473 U. S. 488 -493.
forbidden by § 1962, and the racketeering activities injure the plaintiff in his business or property, the plaintiff has a claim under § 1964(c). There is no room in the statutory language for an additional, amorphous "racketeering injury" requirement. Where the plaintiff alleges each element of a violation of § 1962, the compensable injury necessarily is the harm caused by predicate acts sufficiently related to constitute a pattern, for the essence of the violation is the commission of those acts in connection with the conduct of an enterprise. Pp. 473 U. S. 493 -500.
WHITE, J., delivered the opinion of the Court, in which BURGER, C.J., and REHNQUIST, STEVENS, and O'CONNOR, JJ., joined. MARSHALL, J., filed a dissenting opinion, in which BRENNAN, BLACKMUN, and POWELL, JJ., joined, post, p. 473 U. S. 500 . POWELL, J., filed a dissenting opinion, post, p. 473 U. S. 523 .
The Racketeer Influenced and Corrupt Organizations Act (RICO), Pub.L. 91-452, Title IX, 84 Stat. 941, as amended, 18 U.S.C. §§ 1961-1968, provides a private civil action to recover treble damages for injury "by reason of a violation of" its substantive provisions. 18 U.S.C. § 1964(C). The initial dormancy of this provision and its recent greatly increased utilization [ Footnote 1 ] are now familiar history. [ Footnote 2 ] In response to what it perceived to be misuse of civil RICO by private plaintiffs, the court below construed § 1964(c) to permit private actions only against defendants who had been convicted on criminal charges, and only where there had occurred a "racketeering injury." While we understand the court's concern over the consequences of an unbridled reading of the statute, we reject both of its holdings.
fraud or drug-related activities that is "punishable" under federal law. § 1961(1). [ Footnote 3 ] Section 1962, entitled "Prohibited Activities," outlaws the use of income derived from a "pattern of racketeering activity" to acquire an interest in or establish an enterprise engaged in or affecting interstate commerce; the acquisition or maintenance of any interest in an enterprise "through" a pattern of racketeering activity;
conducting or participating in the conduct of an enterprise through a pattern of racketeering activity; and conspiring to violate any of these provisions. [ Footnote 4 ]
The decision below was one episode in a recent proliferation of civil RICO litigation within the Second Circuits [ Footnote 5 ] and
in other Courts of Appeals. [ Footnote 6 ] In light of the variety of approaches taken by the lower courts and the importance of the issues, we granted certiorari. 469 U.S. 1157 (1984). We now reverse.
(d). Previous versions of the legislation, however, had provided for a private treble damages action in exactly the terms ultimately adopted in § 1964(c). See S. 1623, 91st Cong., 1st Sess., Ë˜4(a) (1969); S. 2048 and S. 2049, 90th Cong., 1st Sess. (1967).
read to refer to a criminal conviction, it would require a conviction under RICO, not of the predicate offenses. That aside, the term "violation" does not imply a criminal conviction. See United States v. Ward, 448 U. S. 242 , 448 U. S. 249 -250 (1980). It refers only to a failure to adhere to legal requirements. This is its indisputable meaning elsewhere in the statute. Section 1962 renders certain conduct "unlawful"; § 1963 and § 1964 impose consequences, criminal and civil, for "violations" of § 1962. We should not lightly infer that Congress intended the term to have wholly different meanings in neighboring subsections. [ Footnote 7 ]
The legislative history also undercuts the reading of the court below. The clearest current in that history is the reliance on the Clayton Act model, under which private and governmental actions are entirely distinct. E.g., United States v. Borden Co., 347 U. S. 514 , 347 U. S. 518 -519 (1954). [ Footnote 8 ] The only
The Court of Appeals was of the view that its narrow construction of the statute was essential to avoid intolerable practical consequences. [ Footnote 9 ] First, without a prior conviction to rely on, the plaintiff would have to prove commission of the predicate acts beyond a reasonable doubt. This would require instructing the jury as to different standards of proof for different aspects of the case. To avoid this awkwardness,
We are not at all convinced that the predicate acts must be established beyond a reasonable doubt in a proceeding under § 1964(c). In a number of settings, conduct that can be punished as criminal only upon proof beyond a reasonable doubt will support civil sanctions under a preponderance standard. See, e.g., United States v. One Assortment of 89 Firearms, 465 U. S. 354 (1984); One Lot Emerald Cut Stones v. United States, 409 U. S. 232 , 409 U. S. 235 (1972); Helvering v. Mitchell, 303 U. S. 391 , 303 U. S. 397 (1938); United States v. Regan, 232 U. S. 37 , 232 U. S. 47 -49 (1914). There is no indication that Congress sought to depart from this general principle here. See Measures Relating to Organized Crime, Hearings on S. 30 et al. before the Subcommittee on Criminal Laws and Procedures of the Senate Committee on the Judiciary, 91st Cong., 1st Sess., 388 (1969) (statement of Assistant Attorney General Wilson); House Hearings, at 520 (statement of Rep. Steiger); id. at 664 (statement of Rep. Poff); 116 Cong.Rec. 35313 (1970) (statement of Rep. Minish). That the offending conduct is described by reference to criminal statutes does not mean that its occurrence must be established by criminal standards, or that the consequences of a finding of liability in a private civil action are identical to the consequences of a criminal conviction. Cf. United States v. Ward, supra, at 448 U. S. 248 -251. But we need not decide the standard of proof issue today. For even if the stricter standard is applicable to a portion of the plaintiff's proof, the resulting logistical difficulties, which are accepted in other contexts, would not be so great as to require invention of a requirement that cannot be found in the statute and that Congress, as even the Court of Appeals had to concede, 741 F.2d at 501, did not envision. [ Footnote 10 ]
action under § 1964(c) might be considered quasi-criminal, requiring protections normally applicable only to criminal proceedings, cf. One 1958 Plymouth Sedan v. Pennsylvania, 380 U. S. 693 (1965), the solution is to provide those protections, not to ensure that they were previously afforded by requiring prior convictions. [ Footnote 11 ]
Finally, we note that a prior conviction requirement would be inconsistent with Congress' underlying policy concerns. Such a rule would severely handicap potential plaintiffs. A guilty party may escape conviction for any number of reasons -- not least among them the possibility that the Government itself may choose to pursue only civil remedies. Private attorney general provisions such as § 1964(c) are in part designed to fill prosecutorial gaps. Cf. Reiter v. Sonotone Corp., 442 U. S. 330 , 442 U. S. 344 (1979). This purpose would be largely defeated, and the need for treble damages as an incentive to litigate unjustified, if private suits could be maintained only against those already brought to justice. See also n 9, supra.
The court's statement that the plaintiff must seek redress for an injury caused by conduct that RICO was designed to deter is unhelpfully tautological. Nor is clarity furnished by a negative statement of its rule: standing is not provided by the injury resulting from the predicate acts themselves. That statement is itself apparently inaccurate when applied to those predicate acts that unmistakably constitute the kind of conduct Congress sought to deter. See id. at 496, n. 41. The opinion does not explain how to distinguish such crimes from the other predicate acts Congress has lumped together in § 1961(1). The court below is not alone in struggling to define "racketeering injury," and the difficulty of that task itself cautions against imposing such a requirement. [ Footnote 12 ]
We need not pinpoint the Second Circuit's precise holding, for we perceive no distinct "racketeering injury" requirement. Given that "racketeering activity" consists of no more and no less than commission of a predicate act, § 1961(1), we are initially doubtful about a requirement of a "racketeering injury" separate from the harm from the predicate acts. A reading of the statute belies any such requirement. Section 1964(c) authorizes a private suit by "[a]ny person injured in his business or property by reason of a violation of § 1962." Section 1962 in turn makes it unlawful for "any person" -- not just mobsters -- to use money derived from a pattern of racketeering activity to invest in an enterprise, to acquire control of an enterprise through a pattern of racketeering activity, or to conduct an enterprise through a pattern of racketeering activity. §§ 1962(a)-(c). If the defendant engages in a pattern of racketeering activity in a manner forbidden by these provisions, and the racketeering activities injure the plaintiff in his business or property, the plaintiff has a claim under § 1964(c). There is no room in the statutory language for an additional, amorphous "racketeering injury" requirement. [ Footnote 13 ]
A violation of § 1962(c), the section on which Sedima relies, requires (1) conduct (2) of an enterprise (3) through a pattern [ Footnote 14 ] (4) of racketeering activity. The plaintiff must, of course, allege each of these elements to state a claim. Conducting an enterprise that affects interstate commerce is obviously not, in itself, a violation of § 1962, nor is mere commission of the predicate offenses. In addition, the plaintiff only has standing if, and can only recover to the extent that, he has been injured in his business or property by the conduct constituting the violation. As the Seventh Circuit has stated,
Haroco, Inc. v. American National Bank & Trust Co. of Chicago, 747 F.2d 384, 398 (1984), aff'd, post p. 473 U. S. 606 .
But the statute requires no more than this. Where the plaintiff alleges each element of the violation, the compensable injury necessarily is the harm caused by predicate acts sufficiently related to constitute a pattern, for the essence of the violation is the commission of those acts in connection with the conduct of an enterprise. Those acts are, when committed in the circumstances delineated in § 1962(c), "an activity which RICO was designed to deter." Any recoverable damages occurring by reason of a violation of § 1962(c) will flow from the commission of the predicate acts. [ Footnote 15 ]
of Congress' self-consciously expansive language and overall approach, see United States v. Turkette, 452 U. S. 576 , 452 U. S. 586 -587 (1981), but also of its express admonition that RICO is to "be liberally construed to effectuate its remedial purposes," Pub.L. 91-452, § 904(a), 84 Stat. 947. The statute's "remedial purposes" are nowhere more evident than in the provision of a private action for those injured by racketeering activity. See also n 10, supra. Far from effectuating these purposes, the narrow readings offered by the dissenters and the court below would in effect eliminate § 1964(c) from the statute.
RICO was an aggressive initiative to supplement old remedies and develop new methods for fighting crime. See generally Russello v. United States, 464 U. S. 16 , 464 U. S. 26 -29 (1983). While few of the legislative statements about novel remedies and attacking crime on all fronts, see ibid., were made with direct reference to § 1964(c), it is in this spirit that all of the Act's provisions should be read. The specific references to § 1964(c) are consistent with this overall approach. Those supporting § 1964(c) hoped it would "enhance the effectiveness of title IX's prohibitions," House Hearings, at 520, and provide "a major new tool," 116 Cong.Rec. 35227 (1970). See also id. at 25190; 115 Cong.Rec. 6993-6994 (1969). Its opponents, also recognizing the provision's scope, complained that it provided too easy a weapon against "innocent businessmen," H.R.Rep. No. 91-1549, p. 187 (1970), and would be prone to abuse, 116 Cong.Rec. 35342 (1970). It is also significant that a previous proposal to add RICO-like provisions to the Sherman Act had come to grief in part precisely because it
It is true that private civil actions under the statute are being brought almost solely against such defendants, rather than against the archetypal, intimidating mobster. [ Footnote 16 ] Yet this defect -- if defect it is -- is inherent in the statute as written, and its correction must lie with Congress. It is not for the judiciary to eliminate the private action in situations
Two months later, the Seventh Circuit decided Haroco, Inc. v. American National Bank & Trust Co. of Chicago, 747 F.2d 384 (1984), aff'd, post p. 473 U. S. 606 . Dismissing Sedima as the resurrection of the discredited requirement of an organized crime nexus, and Bankers Trust as an emasculation of the treble-damages remedy, the Seventh Circuit rejected "the elusive racketeering injury requirement." 747 F.2d at 394, 398-399. The Fifth Circuit had taken a similar position. Alcorn County v. U.S. Interstate Supplies, Inc., 731 F.2d 1160, 1169 (1984).
The Court of Appeals also observed that allowing civil suits without prior convictions "would make a hash" of the statute's liberal construction requirement. 741 F.2d at 502; see RICO § 904(a). Since criminal statutes must be strictly construed, the court reasoned, allowing liberal construction of RICO -- an approach often justified on the ground that the conduct for which liability is imposed is "already criminal" -- would only be permissible if there already existed criminal convictions. Again, we have doubts about the premise of this rather convoluted argument. The strict construction principle is merely a guide to statutory interpretation. Like its identical twin, the "rule of lenity," it "only serves as an aid for resolving an ambiguity; it is not to be used to beget one." Callanan v. United States, 364 U. S. 587 , 364 U. S. 596 (1961); see also United State v. Turkette, 452 U. S. 576 , 452 U. S. 587 -588 (1981). But even if that principle has some application, it does not support the court's holding. The strict and liberal construction principles are not mutually exclusive; § 1961 and § 1962 can be strictly construed without adopting that approach to § 1964(c). Cf. United States v. United States Gypsum Co., 438 U. S. 422 , 438 U. S. 443 , n.19 (1978). Indeed, if Congress' liberal construction mandate is to be applied anywhere, it is in § 1964, where RICO's remedial purposes are most evident.
United State v. Albertini, 472 U. S. 675 , 472 U. S. 680 (1985).
As many commentators have pointed out, the definition of a "pattern of racketeering activity" differs from the other provisions in § 1961 in that it states that a pattern " requires at least two acts of racketeering activity," § 1961(5) (emphasis added), not that it "means" two such acts. The implication is that, while two acts are necessary, they may not be sufficient. Indeed, in common parlance, two of anything do not generally form a "pattern." The legislative history supports the view that two isolated acts of racketeering activity do not constitute a pattern. As the Senate Report explained:
18 U.S.C. § 3575(e). This language may be useful in interpreting other sections of the Act. Cf. Iannelli v. United States, 420 U. S. 770 , 420 U. S. 789 (1975).
Such damages include, but are not limited to, the sort of competitive injury for which the dissenters would allow recovery. See post at 473 U. S. 521 -522. Under the dissent's reading of the statute, the harm proximately caused by the forbidden conduct is not compensable, but that ultimately and indirectly flowing therefrom is. We reject this topsy-turvy approach, finding no warrant in the language or the history of the statute for denying recovery thereunder to "the direct victims of the [racketeering] activity," post at 473 U. S. 522 , while preserving it for the indirect. Even the court below was not that grudging. It would apparently have allowed recovery for both the direct and the ultimate harm flowing from the defendant's conduct, requiring injury "not simply caused by the predicate acts, but also caused by an activity which RICO was designed to deter." 741 F.2d at 496 (emphasis added).
The dissent would also go further than did the Second Circuit in its requirement that the plaintiff have suffered a competitive injury. Again, as the court below stated, Congress "nowhere suggested that actual anticompetitive effect is required for suits under the statute." Ibid. The language it chose, allowing recovery to "[a]ny person injured in his business or property, " § 1964(c) (emphasis added), applied to this situation, suggests that the statute is not so limited.
the original conception of its enactors." Ante at 473 U. S. 500 . The Court, however, expressly validates this result, imputing it to the manner in which the statute was drafted. I fundamentally disagree both with the Court's reading of the statute and with its conclusion. I believe that the statutory language and history disclose a narrower interpretation of the statute that fully effectuates Congress' purposes, and that does not make compensable under civil RICO a host of claims that Congress never intended to bring within RICO's purview.
United States v. Weiss, 752 F.2d 777, 791 (CA2 1985) (Newman, J., dissenting). In bringing criminal actions under those statutes, prosecutors need not show either a substantial connection between the scheme to defraud and the mail and wire fraud statutes, see Pereira v. United States, 347 U. S. 1 , 347 U. S. 8 (1954), or that the fraud involved money or property. Courts have sanctioned prosecutions based on deprivations of such intangible rights as a shareholder's right to "material" information, United States v. Siegel, 717 F.2d 9, 14-16 (CA2 1983); a client's right to the "undivided loyalty" of his attorney, United States v. Bronston, 658 F.2d 920, 927 (CA2 1981), cert. denied, 456 U.S. 915 (1982); an employer's right to the honest and faithful service of his employees, United States v. Bohonus, 628 F.2d 1167, 1172 (CA9), cert. denied, 447 U.S. 928 (1980); and a citizen's right to know the nature of agreements entered into by the leaders of political parties, United States v. Margiotta, 688 F.2d 108, 123-125 (CA2 1982), cert. denied, 461 U.S. 913 (1983).
The dislocations caused by the Court's reading of the civil RICO provision are not just theoretical. In practice, this provision frequently has been invoked against legitimate businesses in ordinary commercial settings. As the Court recognizes, the ABA Task Force that studied civil RICO found that 40% of the reported cases involved securities fraud and 37% involved common law fraud in a commercial or business setting. See ante at 473 U. S. 499 , n. 16. Many a prudent defendant, facing ruinous exposure, will decide to settle even a case with no merit. It is thus not surprising that civil RICO has been used for extortive purposes, giving rise to the very evils that it was designed to combat. Report of the Ad Hoc Civil RICO Task Force of the ABA Section of Corporation, Banking and Business Law 69 (1985) (hereinafter cited as ABA Report).
Only 9% of all civil RICO cases have involved allegations of criminal activity normally associated with professional criminals. See ante at 473 U. S. 499 , n. 16. The central purpose that Congress sought to promote through civil RICO is now a mere footnote.
Id. at 430 U. S. 479 . Here, with striking nonchalance, the Court does what it declined to do in Santa Fe Industries -- and much more as well. Second, with respect to effects on the federal securities laws and other federal regulatory statutes, we should be reluctant to displace the well-entrenched federal remedial schemes absent clear direction from Congress. See, e.g., Train v. Colorado Public Interest Research Group, Inc., 426 U. S. 1 , 426 U. S. 23 - 24 (1976); Radzanower v. Touche Ross & Co., 426 U. S. 1 48, 426 U. S. 153 (1976).
Moreover, if Congress had intended to bring about dramatic changes in the nature of commercial litigation, it would at least have paid more than cursory attention to the civil RICO provision. This provision was added in the House of Representatives after the Senate already had passed its version of the RICO bill; the House itself adopted a civil remedy provision almost as an afterthought; and the Senate thereafter accepted the House's version of the bill without even requesting a Conference. See infra at 473 U. S. 518 -519. Congress simply does not act in this way when it intends to effect fundamental changes in the structure of federal law.
By its terms, § 1964(c) therefore grants a cause of action only to a person injured "by reason of a violation of § 1962. " The Court holds today that the only injury a plaintiff need allege is injury occurring by reason of a predicate, or racketeering, act -- i.e., one of the offenses listed in § 1961. But § 1964(c) does not, by its terms, provide a remedy for injury by
"While section 1962 prohibits the involvement of an 'enterprise' in 'racketeering activity,' racketeering itself is not a violation of § 1962. Thus, a construction of RICO permitting recovery for damages arising out of the racketeering acts simply does not comport with the statute as written by Congress. In effect, the broad construction replaces the rule that treble damages can be recovered only when they occur ' by reason of a violation of section 1962,' with a rule permitting recovery of treble damages whenever there has been a violation of section 1962. Such unwarranted judicial interference with the Act's plain meaning cannot be justified."
intent that justifies a deviation from what I have shown to be the plain meaning of the statute. However, even if the statutory language were ambiguous, see Haroco, Inc. v. American National Bank & Trust Co. of Chicago, 747 F.2d 384, 389 (CA7 1984), aff'd, post p. 473 U. S. 606 , the scope of the civil RICO provision would be no different, for this interpretation of the statute finds strong support in the legislative history of that provision.
In reviewing the legislative history of civil RICO, numerous federal courts have become mired in controversy about the extent to which Congress intended to adopt or reject the federal antitrust laws as a model for the RICO provisions. The basis for the dispute among the lower courts is the language of the treble damages provision, which tracks virtually word for word the treble damages provision of the antitrust laws, § 4 of the Clayton Act; [ Footnote 2/1 ] given this parallel, there can be little doubt that the latter served as a model for the former. Some courts have relied heavily on this congruity to read an antitrust-type "competitive injury" requirement into the civil RICO statute. See, e.g., North Barrington Development, Inc. v. Fanslow, 547 F.Supp. 207 (ND Ill.1980). Other courts have rejected a competitive injury requirement, or any antitrust analogy, relying in significant part on what
Congress subsequently decided not to pursue an addition to the antitrust laws, but instead to fashion a wholly separate criminal statute. If in fact that decision was made in response to the ABA's statement, and not to other political concerns, it may be interpreted, at most, as a rejection of antitrust standing requirements. Court-developed standing rules define the requisite proximity between the plaintiff's injury and the defendant's antitrust violation. See Blue Shield of Virginia v. McCready, 457 U. S. 465 , 457 U. S. 476 (1982) (discussing antitrust standing rules developed in the Federal Circuits). Thus, at most, we may read the early legislative history to eschew wholesale adoption of the particular nexus requirements that limit the class of potential antitrust plaintiffs. Courts that read this history to bar any analogy to the antitrust laws simply read too much into the scant evidence available to us. In particular, courts that read this history to bar an injury requirement akin to "antitrust" injury are in error. The requirement of antitrust injury, as articulated in Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U. S. 477 (1977), differs in kind from the standing requirement to
"[b]y limiting its application to intentionally unreported income, this proposal highlights the fact that the evil to be curbed is the unfair competitive advantage inherent in the large amount of illicit income available to organized crime. "
"[i]n each of these instances, large amounts of cash coupled with threats of violence, extortion, and similar techniques were utilized by mobsters to achieve their desired objectives: monopoly control of these enterprises. "
In 1969, Senator McClellan introduced the Organized Crime Control Act, which altered numerous criminal law areas such as grand juries, immunity, and sentencing, but which contained no provision like that now known as RICO. See S. 30, 91st Cong., 1st Sess.; 115 Cong.Rec. 769 (1969). Shortly thereafter, Senator Hruska introduced the Criminal Activities Profits Act. S. 1623, 91st Cong., 1st Sess.; 115 Cong.Rec. 6995-6996 (1969). He explained that S. 1623 was designed to synthesize the earlier two bills (S. 2048 and S. 2049) while placing the "unified whole" outside the Sherman Act in response to the ABA's concerns. According to the Senator, the bill was meant to attack " the economic power of organized crime and its exercise of unfair competition with honest businessmen, " and to address "[t]he power of organized crime to establish a monopoly within numerous business fields" and the impact on the free market and honest
"In addition to this criminal prohibition, the bill also creates civil remedies for the honest businessman who has been damaged by unfair competition from the racketeer businessman. Despite the willingness of the courts to apply the Sherman Anti-Trust Act to organized crime activities, as a practical matter the legitimate businessman does not have adequate civil remedies available under that act. This bill fills that gap. "
physical brutality, fear and corruption to intimidate competitors and customers to achieve increased sales and profits ")
The bill passed the Senate after a short debate by a vote of 73 to 1, without a treble damages provision, and it was then considered by the House. In hearings before the House Judiciary Committee, it was suggested that the bill should include "the additional civil remedy of authorizing private damage suits based upon the concept of Section 4 of the Clayton Act." House Hearings, at 543-544 (statement of Edward Wright, ABA president-elect); see also id. at 520 (statement of Rep. Steiger) (suggesting addition of a private civil damages remedy). Before reporting the bill favorably in September, 1970, the House Judiciary Committee made one change to the civil remedy provision -- it added a private treble damages provision to the civil remedies already available to the Government; the Committee accorded this change only a single statement in the Committee Report: "The title, as amended, also authorizes civil treble damage suits on the part of private parties who are injured." H.R.Rep. No. 91-1549, p. 35 (1970). Three Congressmen dissented from the Report. Their views are particularly telling because, with language that is narrow compared to the extraordinary scope the civil provision has acquired, these three challenged the possible breadth and abuse of the private civil remedy by plaintiff- competitors:
to smooth numerous rough edges. The examples are designed simply to illustrate the type of injury that civil RICO was, to my mind, designed to compensate. The construction I describe offers a powerful remedy to the honest businessmen with whom Congress was concerned, who might have had no recourse against a "racketeer" prior to enactment of the statute. At the same time, this construction avoids both the theoretical and practical problems outlined in Part I. Under this view, traditional state law claims are not federalized; federal remedial schemes are not inevitably displaced or superseded; and, consequently, ordinary commercial disputes are not misguidedly placed within the scope of civil RIC0. [ Footnote 2/2 ]
The analysis in my dissent would lead to the dismissal of the civil RICO claims at stake here. I thus do not need to decide whether a civil RICO action can proceed only after a criminal conviction. See ante at 473 U. S. 488 -493.
with the Court's conclusion that the statute must be applied to authorize the types of private civil actions now being brought frequently against respected businesses to redress ordinary fraud and breach-of-contract cases. [ Footnote 3/1 ]
In United States v. Turkette, 452 U. S. 576 (1981), the Court noted that, in construing the scope of a statute, its language, if unambiguous, must be regarded as conclusive " in the absence of a clearly expressed legislative intent to the contrary. '" Id. at 452 U. S. 580 (emphasis added) (quoting Consumer Product Safety Comm'n v. GTE Sylvania, Inc., 447 U. S. 102 , 447 U. S. 108 (1980)). Accord, Russello v. United States, 464 U. S. 16 , 464 U. S. 20 (1983). In both Turkette and Russello, we found that the "declared purpose" of Congress in enacting the RICO statute was "`to seek the eradication of organized crime in the United States.'" United States v. Turkette, supra, at 452 U. S. 589 (quoting the statement of findings prefacing the Organized Crime Control Act of 1970, Pub.L. 91-452, 84 Stat. 923); accord, Russello v. United States, supra, at 464 U. S. 26 -27. That organized crime was Congress' target is apparent from the Act's title, is made plain throughout the legislative history of the statute, see, e.g., S.Rep. No. 91-617, p. 76 (1969) (S.Rep.), and is acknowledged by all parties to these two cases. Accord, Report of the Ad Hoc Civil RICO Task Force of the ABA Section of Corporation, Banking and Business Law 70-92 (1985) (ABA Report). The legislative history cited by the Court today amply supports this conclusion, see ante at 473 U. S. 487 -488, and the Court concedes that,
Ante at 473 U. S. 500 . Yet the Court concludes that it is compelled by the statutory language to construe § 1964(c) to reach garden-variety fraud and breach of contract cases such as those before us today. Ibid.
As the Court of Appeals observed in this case, "[i]f Congress had intended to provide a federal forum for plaintiffs for so many common law wrongs, it would at least have discussed it." [ Footnote 3/2 ] 741 F.2d 482, 492 (1984). The Court today concludes that Congress was aware of the broad scope of the statute, relying on the fact that some Congressmen objected to the possibility of abuse of the RICO statute by arguing that it could be used "to harass innocent businessmen." H.R.Rep. No. 91-1549, p. 187 (1970) (dissenting views of Reps. Conyers, Mikva, and Ryan); 116 Cong.Rec. 35342 (1970) (remarks of Rep. Mikva).
It has turned out in this case that the naysayers' dire predictions have come true. As the Court notes, ante at 473 U. S. 499 , and n. 16, RICO has been interpreted so broadly that it has been used more often against respected businesses with no ties to organized crime than against the mobsters who were the clearly intended target of the statute. While I acknowledge that the language of the statute may be read as broadly as the Court interprets it today, I do not believe that it must
be so read. Nor do I believe that interpreting the statutory language more narrowly than the Court does will "eliminate the [civil RICO] private action," ante at 473 U. S. 499 , in cases of the kind clearly identified by the legislative history. The statute may and should be read narrowly to confine its reach to the type of conduct Congress had in mind. It is the duty of this Court to implement the unequivocal intention of Congress.
The Court concedes that "pattern" could be narrowly construed, ante at 473 U. S. 496 , n. 14, and notes that part of the reason civil RICO has been put to such extraordinary uses is because of the "failure of Congress and the courts to develop a meaningful concept of pattern,'" ante at 473 U. S. 500 . The Court declines to decide whether the defendants' acts constitute such a pattern in this case, however, because it concludes that that question is not before the Court. Ibid. I agree that the scope of the "pattern" requirement is not included in the questions on which we granted certiorari. I am concerned, however, that, in the course of rejecting the Court of Appeals' ruling that the statute requires proof of a "racketeering injury," the Court has read the entire statute so broadly that it will be difficult, if not impossible, for courts to adopt a reading of "pattern" that will conform to the intention of Congress.
The Court bases its rejection of the "racketeering injury" requirement on the general principles that the RICO statute is to be read "broadly," that it is to be " liberally construed to effectuate its remedial purposes,'" ante at 473 U. S. 498 (quoting Pub.L. 91-452, § 904(a), 84 Stat. 947), and that the statute was part of "an aggressive initiative to supplement old remedies and develop new methods for fighting crime." Ante at 473 U. S. 498 . Although the Court acknowledges that few of the legislative statements supporting these principles were made
Ibid. (emphasis added; footnote omitted). The reference in the Report to "predatory activities" was to organized crime. Only a small fraction of the scores of civil RICO cases now being brought implicate organized crime in any way. [ Footnote 3/3 ] Typically, these suits are being brought -- in the
The Court says these suits are not being brought against the "archetypal, intimidating mobster" because of a "defect" that is "inherent in the statute." Ante at 473 U. S. 499 . If RICO must be construed as the Court holds, this is indeed a defect that Congress never intended. I do not believe that the statute must be construed in what, in effect, is an irrational manner.
As noted in the ABA Report, of the 270 District Court RICO decisions prior to this year, only 3% (9 cases) were decided throughout the entire decade of the 1970's, whereas 43% (116 cases) were decided in 1984. ABA Report at 53a (Table). See ante at 473 U. S. 481 , n. 1.