Opinion ID: 771740
Heading Depth: 3
Heading Rank: 2

Heading: The Alleged Copyright Infringement

Text: 13 As a second predicate act, Lexmark also claims that Mr. Snowden participated in criminal copyright infringement. Mr. Snowden operated a bulletin board service called Transylvania 286 and was a member of another board called the Assassin's Guild. The latter was known for distributing software in violation of copyright laws. Lexmark does not claim a proprietary interest in the copyrights, however. The only connection between Lexmark and the alleged infringement is its assertion that it is logical to infer that at least some of the stolen SIMMS were utilized as components of the illegal BBSs [bulletin board services] which Snowden operated or participated in. Appellant Br. at 14-15. Lexmark further maintains it is also likely that the stolen SIMMS were sold through Snowden's BBS. Id. at 15. 14 Even assuming that Mr. Snowden participated in computer piracy--and the facts are by no means clear concerning his involvement--this conduct does not bring him within reach of RICO. Copyright infringement became a RICO predicate act as of July 2, 1996. See the Anticounterfeiting Consumer Protection Act of 1996, Pub. L. No. 104-153, § 3, 110 Stat. 1386 (adding criminal copyright infringement, 18 U.S.C. §2319, to the list of RICO predicate offenses found at 18 U.S.C. § 1961(1)(B)). Lexmark acknowledges that Mr. Snowden's alleged infringement took place before RICO was amended to include copyright violations. Appellant Br. at 17. According to Lexmark, though, the amendment should have retroactive effect, reaching back to subject Mr. Snowden's computing activities to RICO penalties. It cites a case from New York for the proposition that because copyright infringement was unlawful before 1996, its inclusion under RICO does not introduce a new crime. Wiener v. Napoli, 772 F. Supp. 109, 116 (S.D.N.Y. 1991) (penalizing bank fraud retroactively as a RICO predicate offense). 15 Significantly, Wiener was decided before Landgraf v. USI Film Products, 511 U.S. 244 (1994). In Landgraf, the Supreme Court considered the scope of the 1991 Civil Rights Act, concluding that the petitioner was not entitled to a jury trial on a sexual harassment action commenced in 1989. Examining the antiretroactivity principle embedded in the Constitution, the Court observed: 16 When a case implicates a federal statute enacted after the events in suit, the court's first task is to determine whether Congress has expressly prescribed the statute's proper reach. If Congress has done so, of course, there is no need to resort to judicial default rules. When, however, the statute contains no such express command, the court must determine whether the new statute would have retroactive effect, i.e., whether it would impair rights a party possessed when he acted, increase a party's liability for past conduct, or impose new duties with respect to transactions already completed. If the statute would operate retroactively, our traditional presumption teaches that it does not govern absent clear congressional intent favoring such a result. 17 Id. at 280. 18 In this case, the District Court found that Congress had not indicated the reach of the Anticounterfeiting Consumer Protection Act. Lexmark counters this legislative silence by suggesting that Congress intended a broad retroactive design for RICO as enacted in 1970. Appellants arguethat the definition of pattern of racketeering activity is backwards-looking by negative implication. See 18 U.S.C. § 1961(5). The Senate Judiciary Committee commented on this provision in 1969, noting: 19 One act in the pattern must be engaged in after the effective date of the legislation. This avoids the prohibition against ex post facto laws, and bills of attainder. Anyone who has engaged in the prohibited activities before the effective date of the legislation is on prior notice that only one further act may trigger the increased penalties and new remedies of this chapter. 20 S. Rep. No. 91-617, at 158 (1969). 21 Lexmark interprets this language as also authorizing retroactive application of amendments to RICO. It is true that Congress swept in acts committed before RICO's effective date of October 15, 1970, as predicate offenses. Appellants would extrapolate from the 1970 legislation to the 1996 amendment. But Lexmark fails to complete the analogy between the first passage of RICO and its subsequent revision. A RICO action could incorporate acts before October 15, 1970, only if the defendant also engaged in prohibited activities after that date. If the amendments are to reach back in the same manner as the original legislation, then they too must have the safeguard of prior notice. In this case, Mr. Snowden's infringing activity before July 2, 1996--the effective date of the Anticounterfeiting Consumer Protection Act--cannot serve as a predicate act unless he also infringed after July 2, 1996. This he did not do. The Anticounterfeiting Act simply put him on notice that future copyright violations could trigger RICO and provide a basis for incorporating prior acts of infringement. Because Lexmark does not claim that Mr. Snowden committed any act of racketeering after July 2, 1996, the alleged infringement before that date cannot be included as a predicate act under RICO. 22 We agree with the District Court that Congress did not prescribe the reach of the Anticounterfeiting Act. Furthermore, we are unpersuaded that RICO's legislative history from 1970 now dictates retroactive application of the 1996 amendment when Mr. Snowden has not engaged in any racketeering after its effective date. Moreover, the Due Process and Ex Post Facto Clauses do not permit criminal penalties to be imposed retroactively. See generally Norman J. Singer, Sutherland Statutory Construction § 41.03, at 344 (5th ed. 1993). Since RICO is first a criminal statute that only piggy-backs civil remedies, it should be interpreted, for retroactivity purposes, as a criminal statute. See, e.g., Michael S. Rafford, The Private Securities Litigation Reform Act of 1995: Retroactive Application of the RICO Amendment, 23 J. Legis. 283, 288 (1997) (New burdens on past transactions are still unjust whether they be in the form of criminal or civil sanctions . . . . Statutes such as RICO, that contain both criminal and civil causes of action, illustrate the problems of only prohibiting retroactive criminal laws. The prohibition against ex post facto laws protects a RICO defendant charged with predicate acts of fraud, extortion and gambling when the suit is brought by the government. Nevertheless, when that same suit is brought by a private party, only a presumption against retroactivity exists. Moreover, the only difference may be the plaintiff since the government can seek injunctive as well as monetary relief against RICO defendants. The focus in both situations should be the conduct in question.). Though infringement was a criminal offense before 1996, its inclusion in the RICO scheme adds new layers of criminal sanctions and civil penalties not previously present. See, e.g., 18 U.S.C. §1964(c) (authorizing the recovery of treble damages under RICO). Thus, the amendment adding copyright infringement to RICO would clearly increase a party's liability for past conduct under Landgraf. Absent clear congressional intent, the judicial default rules outlined inLandgraf raise a presumption against retroactivity. Lexmark has not overcome this presumption. Cf. Scott v. Boos, 215 F.3d 940 (9th Cir. 2000) (refusing to apply the Private Securities Litigation Reform Act of 1995 retroactively, which amended RICO to remove securities fraud as a predicate act). Accord Mathews v. Kidder, Peabody & Co., Inc., 161 F.3d 156 (3d Cir. 1998).