Opinion ID: 486371
Heading Depth: 3
Heading Rank: 1

Heading: Scope of the Arbitration Clauses as to RICO

Text: 26 In Count III, Genesco alleges that defendants Kakiuchis Japan and America conspired with others to defraud and injure Genesco in its business through a pattern of racketeering activity in violation of the civil RICO statute, 18 U.S.C. Sec. 1962(a), (c), and (d). Genesco asserts wire fraud, 18 U.S.C. Sec. 1343, mail fraud, Sec. 1341, and illegal interstate and foreign transportation as the predicate acts for this claim. More specifically, Count II states that the defendants caused to be delivered confirmations, invoices and other documents relating to transactions necessary to defraud, or unlawfully obtain money and property, from Genesco and caused to be sent in interstate and foreign commerce telexed messages, telephone calls, and wire transfers of funds from Genesco in furtherance of the conspiracy. The complaint also explains that the mailed invoices were fraudulent because they were at prices substantially in excess of the fair market value of the piece goods, for piece goods unsuitable for use [by Genesco] in its tailored clothing operations, and for obsolete, out-of-season, defective or damaged piece goods. Because the specific language of the two arbitration provisions differ, we consider the arbitrability of the claims against Kakiuchis Japan and America separately. 27 We find that the parties' arbitration clause encompasses Genesco's RICO claim against Kakiuchi-Japan. The wire, mail, and transportation fraud allegations which form the predicate acts of Genesco's RICO claim all derive from the parties' transactions under the sales agreements. Genesco's theory is, in essence, that Kakiuchi-Japan, through the improper use of the mails, telephone, and other modes of communication, fraudulently sold it piece goods which did not meet the standards and prices of the parties' sales agreements. Examining the complaint and bearing in mind that ambiguities in scope should be resolved in favor of coverage, Moses H. Cone, 460 U.S. at 24-25, 103 S.Ct. at 941, particularly in the international context, Mitsubishi, 105 S.Ct. at 3357, we conclude that Genesco's RICO claim against Kakiuchi-Japan arises under the parties' sales agreements. Because Kakiuchi-America's arbitration clause is even broader than Kakiuchi-Japan's clause, Genesco's RICO claim against Kakiuchi-America a fortiori is one arising out of or relating to the parties' sales agreements.