Opinion ID: 33414
Heading Depth: 2
Heading Rank: 2

Heading: Richard's RICO Claim

Text: 36 Richard contends that the district court erred in dismissing his claim for equitable relief in the form of a disgorgement of the Appellees' past profits. He argues that equitable relief should be available for private civil RICO plaintiffs under 18 U.S.C. § 1964(a)-(c). This Court has not decided whether equitable relief is available to a private civil RICO plaintiff. Price v. Pinnacle Brands, 138 F.3d 602, 605 n. 5 (5th Cir.1998) (stating that this Court has specifically reserved ruling on whether all forms of injunctive relief and other equitable relief are foreclosed to private plaintiffs under RICO) (internal quotations omitted). The circumstances before us do not necessitate that we reach this question today. Even if equitable relief were available to a private party, disgorgement is not a proper remedy given the circumstances present in this case. Section 1964(a) provides: 37 The district courts of the United States shall have jurisdiction to prevent and restrain violations of section 1962 of this chapter by issuing appropriate orders, including, but not limited to: ordering any person to divest himself of any interest, direct or indirect, in any enterprise; imposing reasonable restriction on the future activities or investments of any person including, but not limited to, prohibiting any person from engaging in the same type of endeavor as the enterprise engaged in, the activities of which affect interstate or foreign commerce; or ordering dissolution or reorganization of any enterprise, making due provisions for the rights of innocent persons. 38 18 U.S.C. § 1964(a). The Second Circuit has considered the conditions for disgorgement under this statute in a RICO suit. United States v. Carson, 52 F.3d 1173, 1181 (2d Cir.1995). The Second Circuit interpreted § 1964(a) to mean that equitable remedies are only proper to prevent and restrain future conduct rather than to punish past conduct. Id. at 1182. The court reasoned that the three examples of permissible remedies in § 1964(a) were forward-looking, and focused on preventing future RICO violations. Id. at 1181. With respect to the disgorgement remedy sought, the Second Circuit noted that disgorgement is generally available under § 1964. Id. However, when disgorgement is sought for the purpose of compensating a party for past injuries, the court held that the plain language of § 1964 bars relief. Id. at 1182. 39 We agree with the Second Circuit's reasoning in Carson. Section 1964(a) establishes that equitable remedies are available only to prevent ongoing and future conduct. Here, Richard does not seek disgorgement to prevent and restrain the Appellees from producing PB plumbing systems. In fact, in his Second Amended Complaint, Richard concedes that the Appellees no longer market the plumbing systems. Furthermore, Richard fails to argue that such disgorgement would prevent manufacturers of similar products from committing similar injuries. Simply stated, he fails to argue that disgorgement would prevent and restrain similar RICO violations in the future. Absent this argument, Richard's disgorgement claim seems to do little more than compensate for the alleged loss. The disgorgement claim is therefore impermissible under § 1964(a). By failing to state a proper remedy, Richard's RICO claim is void.