Source: https://ricolawyer.org/tag/sedima/
Timestamp: 2019-02-17 21:11:56
Document Index: 658417820

Matched Legal Cases: ['§ 1961', 'art, 18', '§ 1962', '§ 1964', 'art, 710', '§ 1964']

Tag: Sedima
[3] RICO defines “racketeering activity” to mean
“(A) any act or threat involving murder, kidnaping, gambling, arson, robbery, bribery, extortion, or dealing in narcotic or other dangerous drugs, which is chargeable under State law and punishable by imprisonment for more than one year; (B) any act which is indictable under any of the following provisions of title 18, United States Code: Section 201 (relating to bribery), section 224 (relating to sports bribery), sections 471, 472, and 473 (relating to counterfeiting), section 659 (relating to theft from interstate shipment) if the act indictable under section 659 is felonious, section 664 (relating to embezzlement from pension and welfare funds), sections 891-894 (relating to extortionate credit transactions), section 1084 (relating to the transmission of gambling information), section 1341 (relating to mail fraud), section 1343 (relating to wire fraud), section 1503 (relating to obstruction of justice), section 1510 (relating to obstruction of criminal investigations), section 1511 (relating to the obstruction of State or local law enforcement), section 1951 (relating to interference with commerce, robbery, or extortion), section 1952 (relating to racketeering), section 1953 (relating to interstate transportation of wagering paraphernalia), section 1954 (relating to unlawful welfare fund payments), section 1955 (relating to the prohibition of illegal gambling businesses), sections 2312 and 2313 (relating to interstate transportation of stolen motor vehicles), sections 2314 and 2315 (relating to interstate transportation of stolen property), section 2320 (relating to trafficking in certain motor vehicles or motor vehicle parts), sections 2341-2346 (relating to trafficking in contraband cigarettes), sections 2421-2424 (relating to white slave traffic), (C) any act which is indictable under title 29, United States Code, section 186 (dealing with restrictions on payments and loans to labor organizations) or section 501(c) (relating to embezzlement from union funds), (D) any offense involving fraud connected with a case under title 11, fraud in the sale of securities, or the felonious manufacture, importation, receiving, concealment, buying, selling, or otherwise dealing in narcotic or other dangerous drugs, punishable under any law of the United States, or (E) any act which is indictable under the Currency and Foreign Transactions Reporting Act.” 18 U. S. C. § 1961(1) (1982 ed., Supp. III).
[4] In relevant part, 18 U. S. C. § 1962 provides:
“(a) It shall be unlawful for any person who has received any income derived, directly or indirectly, from a pattern of racketeering activity or through collection of an unlawful debt . . . to use or invest, directly or indirectly, any part of such income, or the proceeds of such income, in acquisition of any interest in, or the establishment or operation of, any enterprise which is engaged in, or the activities of which affect, interstate or foreign commerce. . . .
[5] The day after the decision in this case, another divided panel of the Second Circuit reached a similar conclusion. Bankers Trust Co. v. Rhoades, 741 F. 2d 511 (1984), cert. pending, No. 84-657. It held that § 1964(c) allowed recovery only for injuries resulting not from the predicate acts, but from the fact that they were part of a pattern. “If a plaintiff’s injury is that caused by the predicate acts themselves, he is injured regardless of whether or not there is a pattern; hence he cannot be said to be injured by the pattern,” and cannot recover. Id., at 517 (emphasis in original).
[6] A month after the trio of Second Circuit opinions was released, the Eighth Circuit decided Alexander Grant & Co. v. Tiffany Industries, Inc., 742 F. 2d 408 (1984), cert. pending, Nos. 84-1084, 84-1222. Viewing its decision as contrary to Sedima but consistent with, though broader than, Bankers Trust, the court held that a RICO claim does require some unspecified element beyond the injury flowing directly from the predicate acts. At the same time, it stood by a prior decision that had rejected any requirement that the injury be solely commercial or competitive, or that the defendants be involved in organized crime. 742 F. 2d, at 413; see Bennett v. Berg, 685 F. 2d 1053, 1058-1059, 1063-1064 (CA8 1982), aff’d in part and rev’d in part, 710 F. 2d 1361 (en banc), cert. denied, 464 U. S. 1008 (1983).
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. 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).
[12] The decision below does not appear identical to Bankers Trust. It established a standing requirement, whereas Bankers Trust adopted a limitation on damages. The one focused on the mobster element, the other took a more conceptual approach, distinguishing injury caused by the individual acts from injury caused by their cumulative effect. Thus, the Eighth Circuit has indicated its agreement with Bankers Trust but not Sedima. Alexander Grant & Co. v. Tiffany Industries, Inc., 742 F. 2d, at 413. See also Haroco, Inc. v. American National Bank & Trust Co. of Chicago, 747 F. 2d, at 396. The two tests were described as “very different” by the ABA Task Force. See ABA Report, at 310.
Yet the Bankers Trust court itself did not seem to think it was departing from Sedima, see 741 F. 2d, at 516-517, and other Second Circuit panels have treated the two decisions as consistent, see Furman v. Cirrito, 741 F. 2d 524 (1984), cert. pending, No. 84-604; Durante Brothers & Sons, Inc. v. Flushing National Bank, 755 F. 2d 239, 246 (1985). The evident difficulty in discerning just what the racketeering injury requirement consists of would make it rather hard to apply in practice or explain to a jury.
[15] Such damages include, but are not limited to, the sort of competitive injury for which the dissenters would allow recovery. See post, at 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 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 anti-competitive 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.
“Any person injured in his business or property by reason of a violation of section 1962 of this chapter may sue therefor in any appropriate United States district court and shall recover threefold the damages he sustains and the cost of the suit, including a reasonable attorney’s fee.”
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