Opinion ID: 1368892
Heading Depth: 1
Heading Rank: 6

Heading: Did the trial court err in allowing the plaintiff recovery under the civil RICO statute?

Text: The defendants next argue the plaintiff has no cause of action under RICO because lost wages are not recoverable under the statute and argue the trial court erred in instructing the jury on this theory and in relying on RICO to treble the award of damages. To establish a civil action under RICO, plaintiffs must prove: (1) injury to their business or property, (2) by reason of, (3) a violation of 18 U.S.C. § 1962. 18 U.S.C. § 1964(c); Anderson v. Janovich, 543 F. Supp. 1124 (W.D. Wash. 1982). In Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 87 L.Ed.2d 346, 105 S.Ct. 3275 (1985), the United States Supreme Court specifically rejected the narrow interpretation of injury which had been adopted by the Court of Appeals for the Second Circuit. The Court of Appeals had held a civil plaintiff could recover under RICO only where the injury was a racketeering injury, an injury different in kind from the direct injury resulting from the predicate acts of racketeering activity. Sedima, at 485. In interpreting the intent of Congress in enacting civil RICO to be focused on remedying `certain specific kinds of organized criminality,' the Court of Appeals had concluded civil RICO cases must be limited to injuries not simply caused by the predicate acts, but also caused by an activity which RICO was designed to deter. Sedima, at 485; see generally Civil RICO and the Prior Criminal Conviction Requirement: Has the Second Circuit Drawn the Net Too Tightly?  Sedima, S.P.R.L. v. Imrex Co., 741 F.2d 482 (2d Cir.1984), cert. granted, 53 U.S.L.W. 3506 (U.S. Jan. 14, 1985) (No. 84-648), 60 Wash. L. Rev. 461 (1985). The Supreme Court reversed, finding a narrow interpretation to be contrary to both the language and intent of the act. The Court stated it found no warrant in the language or the history of the statute for denying recovery thereunder to `the direct victims of the [racketeering] activity,' ... while preserving it for the indirect. Sedima, at 497 n. 15. See also American Nat'l Bank & Trust Co. v. Haroco, Inc., 473 U.S. 606, 87 L.Ed.2d 437, 105 S.Ct. 3291 (1985) (companion case reaching same conclusion). The Court also stated: RICO is to be read broadly. This is the lesson not only of Congress' self-consciously expansive language and overall approach ... but also of its express admonition that RICO is to be liberally construed to effectuate its remedial purposes, ... The statute's remedial purposes are nowhere more evident than in the provision of a private action for those injured by racketeering activity. Sedima, at 497-98. The Supreme Court also rejected two other limiting interpretations of the civil RICO statute. First, the Court expressed disapproval of the argument that compensable injuries must be limited to competitive injuries: Again, ... Congress nowhere suggested that actual anti-competitive effect is required for suits under the statute. ... The language it chose, allowing recovery to [a]ny person injured in his business or property,  § 1964(c) (emphasis added), ... suggests that the statute is not so limited. Sedima, at 497 n. 15. The Court also rejected the argument that RICO plaintiffs should have to prove the same elements as antitrust plaintiffs, and be limited to only antitrust types of recovery: 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 could create inappropriate and unnecessary obstacles in the way of... a private litigant [who] would have to contend with a body of precedent  appropriate in a purely antitrust context  setting strict requirements on questions such as `standing to sue' and `proximate cause.' 115 Cong. Rec. 6995 (1969) (ABA comments on S. 2048); see also id., at 6993 (S. 1623 proposed as an amendment to Title 18 to avoid these problems). In borrowing its racketeering injury requirement from antitrust standing principles, the court below created exactly the problems Congress sought to avoid. Sedima, at 498-99. [4] The defendants' arguments that plaintiff's claim for lost wages should not be within the scope of injuries recoverable under RICO conflict with these conclusions in Sedima. Injuries resulting from the predicate offenses are compensable under the act. The scope of recoverable damages for injury in his business or property is to be broadly construed. The evidence presented in the trial court below could have supported a jury finding the plaintiff's loss of wages was an injury to his business. The narrow interpretation of business or property advocated by the defendants, based upon analogy to numerous cited cases of antitrust law, has been rejected by the Supreme Court. Federal cases since Sedima have specifically held lost wages may be recovered in civil RICO actions, and we follow that conclusion. Rodonich v. House Wreckers, Local 95, 627 F. Supp. 176 (S.D.N.Y. 1985); Hunt v. Weatherbee, 626 F. Supp. 1097 (D. Mass. 1986). The defendants' assertion the plaintiff's claims for lost wages are not within the scope of injuries compensable in a civil RICO action does not appear to be supported by the language of the statute or applicable case law. We find no error.