Monday, June 20, 2016
Yes, The Supreme Court's opinion here looks at whether RICO has extraterritorial application in the civil context. And in that regard it limits its extraterritorial application. But there is some important language in this opinion for both civil and criminal practitioners, especially since much of RICO is premised on a criminal statute, and all of RICO is located in Title 18, the Criminal Code.
- There has been much confusion as to whether one should look at the predicate acts or the enterprise in determining extraterritoriality and the Court provides significant guidance here.
- In deciding RICO's extraterritorial application, the Court divides it into two issues: a) "do RICO's substantive prohibitions, contained in sec. 1962, apply to conduct, that occurs in foreign countries;" b) "does RICO's private cause of action, contained in sec 1964(c) apply to injuries that are suffered in foreign countries?" It is this first issue that one needs to examine for criminal cases.
- The Court reaffirms in statutory construction the premise that there is "presumption against extraterritoriality."
- The Court describes the two-step process - "Morrison and Kiobel reflect a two-step framework for analyzing extraterritoriality issues. At the first step, we ask whether the presumption against extraterritoriality has been rebutted—that is, whether the statute gives a clear, affirmative indication that it applies extraterritorially. We must ask this question regardless of whether the statute in question regulates conduct, affords relief, or merely confers jurisdiction. If the statute is not extraterritorial, then at the second step we determine whether the case involves a domestic application of the statute, and we do this by looking to the statute’s 'focus.' If the conduct relevant to the statute’s focus occurred in the United States, then the case involves a permissible domestic application even if other conduct occurred abroad; but if the conduct relevant to the focus occurred in a foreign country, then the case involves an impermissible extraterritorial application regardless of any other conduct that occurred in U. S. territory."
- The Court says to look first at the predicate act, asking - is it one that applies extraterritorially ("Although a number of RICO predicates have extraterritorial effect, many do not.")
- With respect to 1962 (b) and (c) the Court states, "[w]e therefore conclude that RICO applies to some foreign racketeering activity. A violation of sec. 1962 may be based on a pattern of racketeering that includes predicate offenses committed abroad, provided that each of those offenses violates a predicate statute that is itself extraterritorial."
- With respect to 1962(a) the Court states, "arguably sec 1962(a) extends only to domestic uses of the income."
- In dicta, with respect to 1962(d), the conspiracy section, the Court states, "[w]e therefore decline to reach this issue, and assume without deciding that sec 1962(d)'s extraterritoriality tracks that of the provision underlying the alleged conspiracy."
- The Court is less focused on whether the enterprise element is domestically based. But it does note that "[e]nterprises whose activities lack that anchor to U.S. commerce cannot sustain a RICO conviction."
The language in this case provides important guidance for criminal practitioners on the extraterritoriality of RICO, and clearly it provides strong arguments that not all of RICO applies abroad.