CrimProf Blog

Editor: Kevin Cole
Univ. of San Diego School of Law

Friday, April 1, 2016

Safran on RICO's Extraterritorial Reach

Victoria Safran has posted RICO's Extraterritorial Reach: The Impact of European Community v. RJR Nabisco (Stanford Journal of Complex Litigation Vol. 4:1 (2016)) on SSRN. Here is the abstract:

On October 1, 2015, the United States Supreme Court granted the petition filed for writ of certiorari in RJR Nabisco, Inc. v. European Community that came after the Second Circuit’s decision declining to rehear the case en banc. The RJR decision reached a novel conclusion in addressing the issue of whether RICO has extraterritorial reach. In the time period between the United States Supreme Court 2010 decision in Morrison v. Nat’l Australia Bank that became the focal point for determining RICO’s extraterritorial reach and the RJR decision, no other court had ever held that RICO has extraterritorial reach. RJR parted from the group by announcing its unprecedented conclusion that Congress had clearly stated its intention for RICO to apply extraterritorially when liability is based on a RICO predicate offense that itself applies extraterritorially.

This Article examines the development of the case law leading up to the RJR opinion, as well as the RJR case itself, with particular emphasis on the Second Circuit opinion denying a rehearing en banc. The Article considers the potential impact of the RJR decision. It examines the conflicting approaches taken by courts that have concluded that RICO has no extraterritorial reach, and guided by Morrison, set out to ascertain RICO’s focus. Dividing into two camps, these decisions determined that RICO’s focus was either on the enterprise or the pattern.

The Article concludes that the search for RICO’s focus under Morrison has resulted in a labyrinth of confusion and inconsistency. The Second Circuit RJR approach is logical and coherent. It offers a bright escape from the chaos created by courts’ efforts to apply the Morrison focus test to RICO. The Supreme Court’s review is poised to arrive at a critical time, with only the Second and the Ninth Circuit having weighed in with opinions as to RICO’s extraterritorial reach, and district court opinions across the nation demonstrating a crucial need for guidance and a new direction.

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