Opinion ID: 1135256
Heading Depth: 2
Heading Rank: 1

Heading: Predicate act requirement

Text: It is well-settled that to have standing as a RICO plaintiff, one's injury must flow from the violation of a predicate RICO act. [4] Cf. Hale v. Burkhardt, 104 Nev. 632, 764 P.2d 866 (1988). Allum originally alleged that VMC violated NRS 207.360(26), which then provided that `Crime related to racketeering' means the commission of, attempt to commit or conspiracy to commit... [o]btaining possession of money or property valued at $100 or more ... by means of false pretenses. This crime, alleged Allum, was perpetrated against investors seeking FHA quality loans. Crucially, the crime was not committed against Allum. This issue has been addressed by numerous courts reviewing alleged violations of RICO. Indeed, the context of virtually every Court of Appeals decision cited in footnote 4, supra, was wrongful termination. Further, those cases arose following successful motions to dismiss. Because one of those cases, Reddy v. Litton Indus. Inc., 912 F.2d 291 (9th Cir.1990), is especially helpful in gaining an understanding of the issue at hand, a review of that case follows. Reddy was employed by Litton Industries, Inc. (Litton) which was engaged in selling military hardware to Saudi Arabia. Reddy discovered an unlawful payment scheme between Litton and certain Saudi officials. Reddy reported the scheme to his superiors, who thereafter terminated Reddy's employment. Reddy sued Litton, alleging that he was wrongfully terminated because he refused to cover-up the illegal activity. Litton moved to dismiss for failure to state a claim. The federal district court found that Reddy lacked standing and granted Litton's motion with prejudice. Reddy appealed. Reddy, 912 F.2d at 292-93. The United States Court of Appeals for the Ninth Circuit affirmed. After noting that only harm caused by a predicate RICO act was compensable, the court stated: All of the circuit courts that have considered this issue have held that an employee who is wrongfully discharged for refusing to participate in an alleged pattern of racketeering activity lacks standing to sue under § 1962(c).... Accordingly, we hold that Reddy lacks standing to sue under § 1962(c) because the injury he suffered was the result of his alleged wrongful termination and was not caused by predicate RICO acts. Reddy, 912 F.2d at 294. Like the plaintiff in Reddy, Allum's injury flowed from his wrongful termination. Wrongful termination, however, is not a predicate Nevada RICO act. Allum therefore lacks standing to sue under NRS 207.470(1).