Mitsui O.S.K. Lines, Ltd. v. Seamaster Logistics, Inc.
871 F. Supp. 2d 933
N.D. Cal.2012Background
- MOL sues as a VOCC alleging a scheme with Inland carriage charges, including inland shipments allegedly performed by third parties, resulting in paid but unseen inland carriage costs.
- MOL's SAC asserts fourth and fifth RICO claims (§ 1962(c) and § 1962(d)) based on wire and mail fraud predicates via postal mail, faxes, and the Internet.
- Moving Defendants Seamaster Logistics, Inc. (Seamaster), Summit Logistics International, Inc. (Summit, now Toll Global Forwarding (Americas) Inc.), and American Global Logistics LLC (AGL) move to partially dismiss the SAC’s RICO claims.
- The court applies Morrison’s extraterritoriality framework and adopts the ‘nerve center’ test to determine whether the RICO enterprise is domestic.
- The court finds the alleged association-in-fact enterprise among Seamaster, Summit, and AGL is domestic and DENIES the motions to dismiss.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Morrison prohibits extraterritoriality in RICO claims. | MOL argues the enterprise is domestic and affords relief despite foreign elements. | Moving Defendants contend Morrison bars extraterritorial RICO application. | Denied; Morrison does not foreclose domestic RICO here. |
| What territoriality test governs RICO enterprises post-Morrison. | MOL adopts the nerve center test to locate the enterprise. | Defendants urge alternative tests focusing on conduct or effects. | Nerve center test adopted; enterprise located domestically. |
| Whether the alleged enterprise is domestic or extraterritorial. | Enterprise has U.S. corporate members and US-led arrangements, with activities in the United States. | Defendants contend the scheme largely concerns inland China. | Enterprise deemed domestic; not purely extraterritorial. |
| Whether location of predicate acts controls enterprise territoriality. | Predicate acts occur via mail/fax/Internet tied to the enterprise's activities. | Location of acts is not dispositive for enterprise territoriality under Morrison. | Court focuses on the enterprise location, not predicate-act geography; enterprise is domestic. |
Key Cases Cited
- Cedeño v. Intech Group, Inc., 733 F. Supp. 2d 471 (S.D.N.Y. 2010) (enterprise focus central to RICO analysis; not predicate acts location)
- Norex Petroleum Ltd. v. Access Industries, Inc., 631 F.3d 29 (2d Cir. 2010) (extraterritoriality considerations in RICO context)
- In re Toyota Motor Corp., 785 F. Supp. 2d 883 (C.D. Cal. 2011) (post-Morrison RICO territoriality analyses; enterprise focus)
- CGC Holding Co., LLC v. Hutchens, 824 F. Supp. 2d 1193 (D. Colo. 2011) (RICO enterprise territoriality and intra-US focus)
- Philip Morris USA Inc., 783 F. Supp. 2d 23 (D.D.C. 2011) (RICO focus on enterprise effects and location)
- Odom v. Microsoft Corp., 486 F.3d 541 (9th Cir. 2007) (basic RICO enterprise requirement and association-in-fact standard)
- Boyle v. United States, 556 U.S. 938 (U.S. 2009) (definition of association-in-fact enterprise)
- United States v. Turkette, 452 U.S. 576 (U.S. 1981) (RICO enterprise concept)
- Hertz Corp. v. Friend, 559 U.S. 77 (U.S. 2010) (nerve center approach for corporate citizenship)
- Morrison v. National Australia Bank Ltd., 130 S. Ct. 2869 (S. Ct. 2010) (presumption against extraterritorial application of statutes)