Yegiazaryan v. Smagin, 599 U.S. 533

Background

Smagin (Russian resident) obtained a London arbitration award against Yegiazaryan (U.S. resident living in California) and filed in the Central District of California to confirm and enforce the award; the district court entered a judgment and postjudgment orders protecting enforcement in California.
Yegiazaryan received a separate $198 million arbitration settlement, funneled funds through offshore entities and CMB Monaco, and allegedly used U.S. shell companies and domestic acts (forged medical note, witness intimidation) to frustrate Smagin’s collection efforts.
Smagin sued under RICO §1964(c), alleging a pattern of wire fraud, witness tampering, and obstruction designed to prevent collection of the California judgment.
The district court dismissed for failure to plead a “domestic injury” under RJR Nabisco (relying heavily on Smagin’s Russian residence); the Ninth Circuit reversed, adopting a context-specific test and finding Smagin alleged a domestic injury.
The Supreme Court affirmed the Ninth Circuit: §1964(c) does not rebut the presumption against extraterritoriality at step one, and the domestic‑injury inquiry is context specific—courts must look to the circumstances surrounding the injury to decide whether it arose in the United States.

Issues

Issue	Plaintiff's Argument (Smagin)	Defendant's Argument (Yegiazaryan/CMB)	Held
What test determines a §1964(c) “domestic injury” for RICO extraterritoriality?	Use a context‑specific inquiry focused on where the injury arose and on the racketeering acts that produced it.	Adopt a bright‑line rule locating the injury at the plaintiff’s residence (or situs of intangible property).	Context‑specific test: examine the circumstances, nature of injury, predicate acts, and their aims/effects to determine whether the injury arose in the U.S.
Does §1964(c) rebut the presumption against extraterritoriality?	(Respondent) §1964(c) requires a domestic injury analysis under step two.	(Petitioners) argue various readings but rely on residency/situs rules to show foreign injury.	§1964(c) does not clearly indicate extraterritorial reach at step one; plaintiffs must allege a domestic injury at step two.
Are common‑law situs rules (Restatement (First) §377; mobilia sequuntur personam) controlling?	These rules are inapt or unnecessary for the RICO extraterritoriality inquiry.	Such common‑law fictions locate intangible injuries at the plaintiff’s domicile and thus make Smagin’s injury foreign.	Rejected as dispositive: those choice‑of‑law fictions weren’t settled in the way petitioners claim and do not govern the presumption‑against‑extraterritoriality analysis.
Did Smagin allege a domestic injury here?	Yes—his inability to execute a California judgment was caused by racketeering largely occurring in or directed at California, and the injurious effects manifested in California.	No—Smagin is a Russian resident who felt the economic loss in Russia, so the injury is foreign.	Smagin pleaded a domestic injury: the scheme’s domestic conduct, target (California judgment), and effects ground the injury in the United States.

Key Cases Cited

RJR Nabisco, Inc. v. European Community, 579 U.S. 325 (2016) (established two‑step presumption‑against‑extraterritoriality framework and domestic‑injury requirement for private RICO suits)
Morrison v. National Australia Bank Ltd., 561 U.S. 247 (2010) (explained the presumption against extraterritoriality and counseled stability/workability in tests)
Kiobel v. Royal Dutch Petroleum Co., 569 U.S. 108 (2013) (international‑comity concerns under presumption against extraterritoriality)
EEOC v. Arabian American Oil Co., 499 U.S. 244 (1991) (international‑comity rationale for presumption against extraterritoriality)
Sedima, S. P. R. L. v. Imrex Co., 473 U.S. 479 (1985) (RICO focus on pattern of predicate acts gives rise to compensable injury)
Holmes v. Securities Investor Protection Corp., 503 U.S. 258 (1992) (proximate causation requirement for RICO damages)
Anza v. Ideal Steel Supply Corp., 547 U.S. 451 (2006) (limitations on causation/standing under RICO)
F. Hoffmann‑La Roche Ltd. v. Empagran S.A., 542 U.S. 155 (2004) (foreign‑plaintiff access and international‑comity concerns)
Beck v. Prupis, 529 U.S. 494 (2000) (requires common‑law grounding for certain RICO principles)
Humphrey v. GlaxoSmithKline PLC, 905 F.3d 694 (3d Cir. 2018) (context‑specific approach to RICO domestic‑injury)
Bascuñán v. Elsaca, 874 F.3d 806 (2d Cir. 2017) (adopts contextual inquiry for domestic injury)
Armada (Sing.) PTE Ltd. v. Amcol Int’l Corp., 885 F.3d 1090 (7th Cir. 2018) (adopts bright‑line rule locating intangible injuries at plaintiff’s residence)