RICO – A Information to Civil RICO Disputes in Federal Courts – Litigation, Mediation, and Arbitration
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§ 1 scope
“RICO” is the acronym for the Racketeer Influenced and Corrupt Organizations Act, codified as Title IX of the Organized Crime Control Act of 1970.1. Appendix A contains the full text of the major sections of the RICO Statute.
With its charge of “extortion” and the threat of triple damages and legal fees, RICO may seem like the blunt instrument of civil litigation. RICO’s requirements for a culpable “person” leading the affairs of a particular “company” through a “pattern” of “extortion” in a manner that is immediately injurious can make RICO appear complex and mysterious. Contributing to the perception of complexity are some historical disagreements between the courts on how to interpret several key provisions of the broad RICO Statute. Our aim in this paper is to demystify RICO by discussing applicable law on the elements common to all RICO civil claims and also by addressing specific issues that have most confused courts and practitioners.
We have found this paper to be a valuable resource in representing RICO claimants and defendants. Section 86 below provides a checklist of essential allegations for all RICO civil claims. The attorney should review this list when deciding whether they have a RICO claim or for ideas on how a RICO claim could be attacked.
Section 88 contains bare allegations designed to help the lawyer prepare a RICO complaint. As with any civil lawsuit, a RICO complaint should tell a clear and compelling story. Lined. R.Civ. Page 8 requires that the complaint contain “a brief and clear statement of the claim”, but RICO claims based on postal or wire fraud must also satisfy the Fed. R.Civ. P. 9 (b) by specifying the circumstances giving rise to fraud, with particular accuracy2 by identifying the time, place and content of the fraudulent communications and the parties to the communications.3 The enhanced pleading standards under Bell Atlantic Corp. v. Twombly4 and Ashcroft v. Iqbal5 are particularly important in RICO cases to protect defendants from unfounded allegations of serious, harmful and expensive blackmail
Section 87 provides an example of a RICO case statement. Many federal courts or judges now require the plaintiff to file some form of a RICO case statement at the beginning of the proceedings. Consult your local rules and your judge’s personal rules or standing orders. Even if your case is in a court that does not require a RICO case statement, it is good practice to fill one out whether you are representing the plaintiff or the defendant. This way you can identify any gaps in your case.
Caution should be exercised in defending cases where RICO claims are combined with common law claims, such as fraud or breach of fiduciary duty. There is a temptation to focus one’s energies on defending against RICO claims while less attention is paid to common law claims. This can be a grave mistake, especially if the common law claims allow for punitive damages which most courts have agreed not to be available under RICO. Even if the compensation claim is tripled in the RICO lawsuit, it could very well be dwarfed by punitive damages in the common law actions.
Similarly, claimants should think carefully before playing the RICO card if the claimant has other common law claims resulting from the same behavior. A judgment against the common law claim could very well undermine the RICO claim.
Plaintiffs should also determine if state RICO law is available, and should be aware that state RICO claims can even be brought in state courts.7 Unlike antitrust claims, RICO claims do not have exclusive subject matter jurisdiction Federal. Although state RICO laws are not discussed in this paper, Appendix B lists the state RICO laws.
Finally, a word on the cases cited in this paper. Not only is RICO law constantly changing, but there is often disagreement between circuits, and even within circuits, about how to apply RICO. While we have tried to pull together the most important recent RICO decisions from across the board, we have certainly left out decisions that may be relevant to your case. This paper should be used as a starting point to identify the issues that deserve investigation before filing a RICO complaint or filing an attack on a RICO claim.
1 18 USC §§ 1961 to 1968.
2 Perlman v. Zell, 938 F. Supp. 1327, 1348 (ND Ill. 1996), aff’d, 185 F.3d 850, (7th Cir. 1999) (with reference to the fact that in RICO cases the Federal Civil Procedure Code 9 (b) prescribes that “the complaint, at least describe
[fraudbased] Predicate acts with a certain specificity and “state the time, place and content of the alleged communications that perpetuate the fraud” “). See Sabrina Roppo v Travelers Commercial Insurance Co., 2017 WL 3695205 (7th Cir. 2017) (insufficient fraud allegations); Northeast Revenue Services, LLC v. Maps Indeed, Inc., 685 Fed. Appx. 96 (3rd Cir. 2017) (again the requirement of the special feature for postal fraud presentations); American BioCare Inc. v Howard & Howard Attorneys Pllc, 2017 WL 3530888 (6th Cir. 2017) (same); Kostovetsky v. Ambit Energy Holdings, LLC, 2017 WL 2573273 (ND Fig. 2017) (the increase in customer tariffs did not constitute postal fraud).
3 For questions in connection with postal and transfer fraud, see § 6.
4 Bell Atlantic v Twombly, 550 US 544, 555 (2007).
5 Ashcroft v Iqbal, 556 US 662, 678 (2009).
6 limestone var. Corp. v. Vill. of Lemont, 520 F.3d 797, 803 (7th Cir. 2008) (confirms the dismissal of the RICO lawsuit and warns against allowing a plaintiff with a largely unfounded claim to simply claim the time of a number of other people Having the right to do so is more a terroremic increase in the benchmark than a reasonable hope that the [discovery] Process will uncover relevant evidence. “); LCrest Constr. II, Inc. v. Doe, 660 F.3d 346, 353 (8th Cir. 2011) (confirms the rejection of the RICO suit if” the appeal has alleged – but it has not “‘shown’ – ‘that the plaintiff is entitled to relief'” (quoted Iqbal, 556 US, 678).
7 See Tafflin v. Levitt, 493 US 455 (1990).
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The content of this article is intended to provide general guidance on the subject. Expert advice should be sought regarding your specific circumstances.