RJR Nabisco, Inc. v. European Community
579 U.S. 325
SCOTUS2016Background
- Respondents (the European Community and 26 member states) sued in RICO for alleged global money-laundering tied to drug trafficking and cigarette exports.
- District Court dismissed RICO claims as extraterritorial; Second Circuit reinstated some claims, allowing extraterritorial predicates to support liability.
- Complaint alleged a RICO enterprise (RJR Money-Laundering Enterprise) engaged in interstate/foreign commerce through a pattern of racketeering activity (money laundering, terrorism support, mail/wire fraud, Travel Act).
- Issue neutral: whether RICO applies extraterritorially to predicates and to private damages actions under §1964(c).
- Court applies a two-step extraterritoriality framework: Step 1 asks if presumption against extraterritoriality is rebutted by clear intent; Step 2 looks at the statute’s focus to determine domestic application.
- Court remanded to assess domestic injury requirements for private RICO damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether RICO’s substantive provisions apply extraterritorially | Respondents argue predicates extend extraterritorially. | RJR argues no extraterritorial reach absent clear text. | Partly: §§1962(b) and (c) apply extraterritorially to foreign predicates that themselves apply extraterritorially. |
| Whether RICO’s private right of action §1964(c) requires a domestic injury | Respondents contend private damages extend to foreign injuries if predicates apply extraterritorially. | RJR contends domestic injury requirement governs private action. | §1964(c) does not override presumption; private actions require domestic injury unless Congress clearly legislates otherwise. |
| Whether §1962(a) extends extraterritorially to uses of income derived from racketeering | Respondents assume domestic investment of proceeds in some respects; predicates may apply extraterritorially. | RJR notes §1962(a) may be domestically limited. | Assumed for purposes of this case; focus on §§1962(b) and (c) for extraterritorial reach. |
| Whether foreign enterprises can be victims of RICO under extraterritorial predicates | Respondents rely on predicates applying extraterritorially to reach foreign acts by foreign enterprises. | RJR argues enterprise location matters for extraterritorial reach. | RICO can apply to foreign racketeering with foreign predicates that are extraterritorial; enterprise location not an independent constraint. |
Key Cases Cited
- Morrison v. National Australia Bank Ltd., 561 U.S. 247 (2010) (two-step framework for extraterritoriality; focus on domestic application)
- Kiobel v. Royal Dutch Petroleum Co., 569 U.S. _ (2013) (presumption against extraterritoriality governs jurisdictional/causation claims (foreign conduct))
- Sedima, S. P. R. L. v. Imrex Co., 473 U.S. 479 (1985) (private RICO damages proximate causation; injury concept)
- Pfizer Inc. v. Government of India, 434 U.S. 308 (1978) (foreign injuries recoverable under Clayton Act; history guiding foreign-injury concerns)
- Continental Ore Co. v. Union Carbide & Carbon Corp., 370 U.S. 690 (1962) (foreign injuries may be compensable under Clayton Act framework)
- Empagran S. A. v. Hoffmann-La Roche Ltd., 542 U.S. 155 (2004) (foreign-injury considerations and limits on extraterritoriality in antitrust context)
- H.J. Inc. v. Northwestern Bell Telephone Co., 492 U.S. 229 (1989) (pattern of racketeering element standards)