European Community v. RJR Nabisco, Inc.

NLRB, WPIX, v. Inс. Denmark, Republic, Republic Czech (2d Cir.1989) Lithuania, Republic (finding that factor five fa- of Slovenia, of Republic Malta, Republic of agency appli- vored the where retroactive of Hun- gary, Republic Ireland, Republic of of help cation would avoid “tremendous insta- Estonia, Republic Bulgaria, Repub- of v. relations”); Ewing bility in labor Cyprus, lic Republic, NLRB, Slovak Roma- (2d Cir.1988) nia, Plaintiffs-Appellants, (suggesting that factor five favors the agency if the new rule “stems from” the v. concerns”).

relevant statute’s “central NABISCO, INC., Reynolds RJR R.J. Company, Reynolds Tobacco R.J. To- receiving We value look forward to International, Inc., Acqui- bacco RJR precedential opin- the Board’s considered Corp., Group sition FKA Nabisco many questions ion on however these Holdings Corp., RJR Nabisco Hold- needs, wishes, deciding address ings Corp., Reynolds R.J. Tobacco this case. Holdings, Inc., Group Nabisco Hold- ings Corp., Reynolds R.J. Global Lugo’s Against C. Ms. Convention Products, Inc., Reynolds American Torture Claim Inc., Reynolds Compa- R.J. Tobacco Because we vacate the holding Board’s ny, Corporation, a North Carolina respect with Lugo’s Ms. claim for can- Defendants-Appellees. removal, cellation of we do not reach her No. 11-2475. claim. CAT Appeals, States Court of Second Circuit. III. CONCLUSION April We VACATE the Board’s decision and Halloran, Jr., REMAND the case for further proceed- Halloran, John J. John J. Jr., P.C., Plains, N.Y., ings opinion. consistent with this White Kevin A. Malone, Acevedo, A. Krupnick, Carlos judicial econоmy, any interests of further Malone, Slama, Hancock, Campbell, Buser appeals party, this case either will P.A., Lauderdale, FL, Liberman Fort panel. return to this Plaintiffs-Appellants. Katsas, Gore,

Gregory G. John M. Jones D.C., Seiden, Day, Washington, Mark R. York, N.Y., Day, Jones New for Defen- dants-Appellees.

PRESENT: ROBERTA. COMMUNITY, acting EUROPEAN on KATZMANN, Judge, Chief DENNIS its own behalf and on behalf of the JACOBS, CABRANES, JOSÉ A. power repre-

Member it has States POOLER, ROSEMARY S. REENA sent, Kingdom Belgium, Republic RAGGI, WESLEY, RICHARD C. Finland, Republic, French Hellenic HALL, PETER W. DEBRA ANN Republic, Republic Federal of Germa- LIVINGSTON, LYNCH, E. GERARD ny, Republic, Duchy Italian Grand CHIN, LOHIER, DENNY RAYMOND J. Luxembourg, Kingdom JR., CARNEY, of the Nether- SUSAN L.

lands, Portuguese Republic, Kingdom DRONEY, CHRISTOPHER F. Circuit Spain, Individually, Kingdom Judges. HALL, Judge, Congress expressly statutes which made Circuit

PETER W. applicable foreign to conduct. See Euro in the denial of by opinion concurs Nabisco, Inc., 764 F.3d pean Cmty. v. RJR rehearing en banc. (2d Cir.2014). Judges Leval and As JACOBS, Judge, Circuit DENNIS Sack, judges, have no vote on being senior CABRANES, REENA joined by A. JOSÉ banc, in I grant rehearing LIVINGSTON, RAGGI, DEBRA ANN independently support in of denial of write LYNCH, E. dissents and GERARD petition. rehearing en opinion from the denial considering petition panel for re- banc. our initial hearing, our reexamined CABRANES, Judge, JOSÉ A. Circuit view, with Mor- compatibility as well as its JACOBS, REENA joined by DENNIS Bank, Ltd., v. Natl Australia rison RAGGI, and DEBRA ANN 247, 2869, 177 L.Ed.2d 535 S.Ct. LIVINGSTON, Judges, dissents Circuit (2010), ruling in No- and with our court’s rehearing the denial of en by opinion from Industries, Petroleum Ltd. v. Access rex banc. Inc., Cir.2010), and reaf- 631 F.3d 29 RAGGI, joined Judge, Circuit REENA of our conclusion. firmed the soundness JACOBS, JOSÉ A. by DENNIS the evidence shows applies RICO when CABRANES, and DEBRA ANN “racketeering activity.” 18 a LIVINGSTON, Judges, Circuit dissents 1962, “Racketeering §§ 1964. ac- U.S.C. rehearing en by opinion from the denial “any ... tivity” is defined as act indictable banc. specified under” criminal statutes. Id. 1961(1). specified § criminal statutes LYNCH, Judge, E. Circuit GERARD colloquially “pred- are referred to as RICO from the denial of opinion dissents noted, panel opinion icates.” As the some rehearing en banc. specified predicate express- statutes ORDER ly provide that extraterritorial conduct is indictable. See RJR Following disposition appeal, of this judge requested poll active of the Court to rehear the case en banc. A

on whether Many predicates of the having been conducted and there be- poll foreign conduct relate to international ter- review, favoring en banc ing majority no rorism. A few weeks after the terrorist rehearing hereby en banc is DENIED. September attacks of PATRIOT Act of 2001 passed USA HALL, Judge, concurring Circuit (the Act”), “Patriot an anti-terrorism denying rehearing order banc: measure, which, provisions, among other chal- petition rehearing This for banc by adding amended to its list of lenges panel, the conclusion consist- predicates nearly 20 antiterrorism statutes Sack, Leval judges of senior expressly apply foreign conduct. me, Corrupt that the Racketeer Influenced § Pub.L. No. Stat. (“RICO”), Act Organizations by adding Act 382. The Patriot did seq., applies §§ 1961 et conduct those statutes to RICO’s definition liability “racketeering “racketeering activity” specified when is based on 1961(1) liability.1 a basis of RICO consisting acts” of violations of \ Act, only 1. Prior to the Patriot a few RICO tion. provisions specified applica- 1961(1). Report presumption against construing The House

U.S.C. states, provi- Act “[t]he the Patriot applying States statutes as extraterritori- sions in the bill.... enhance the civil and ally presumption but that the is overcome consequences of certain crimes criminal clearly when the statute manifests con- that have been deemed RICO gressional intent that it apply extraterrito- by Congress provide investiga- and better Morrison, rially. 561 U.S. at 130 prosecutorial identify tive and tools to justify S.Ct. 2869. Courts are not to ex- H.R.Rep. No. prove crimes.” application by traterritorial speculating (2001). 2001, Congress 70 Since has added that Congress would have wanted that had explicitly additional extraterritorial crimes it focused on the question. On the other RICO, nearly predicate to for a total of hand, Congress, acting when within its that to racketeering expressly apply acts powers, explicitly provided has for extra- conduct, foreign nearly relating all of them statute, territorial of a as it has to international terrorism directed by incorporating done statutes that apply See, e.g., United States interests. extraterritorially into as predicates, RICO (conduct 2332g involving §§ anti- U.S.C. interpreted the statute must be as Con- (terrorist systems); aircraft missile 2339D gress purpose has directed. The of Morri- military training). predi- Some of RICO’s attributing son was to bar courts from to apply only cate statutes indeed to conduct Congress an that apply intent its statutes See, outside the e.g., United Statеs. extraterritorially in the absence of a clear (killing, attempting U.S.C. thereof; expression prevent was kill, States, “a national of the United while giving Congress’s courts from effect to such national is outside the United ” clearly manifested intentions that certain added)); (emphasis States extraterritorially. apply statutes 2423(c) (engaging illicit sexual conduct by a foreign places per- U.S. citizen or Finally, panel’s holding point on this resident). manent with Norex. The disa- consistent panel opinion “[b]y The concluded that greed interpreta- with the district court’s incorporating these into statutes RICO as concluding tion of Norex as that RICO predicate acts, racketeering Congress has applica- could never have extraterritorial clearly communicated its intention that RICO, question tion. To the of whether apply to extraterritorial RICO conduct any applications, of its has extraterritorial the extent that extraterritorial violations of reach, sen- opinion the Norex devotes two those statutes serve as the basis for RICO tences, each of which could have two liability.” RJR 764 F.3d at 137. sentence, The derived from meanings. first That conclusion was sound. The RICO prior opinion our court’s in North South explicitly statute that states acts “indict- Al-Turki, Corp. v. Finance specified able under” the statutes consti- (2d Cir.1996), that states “the RICO “racketeering activity,” tute to which any statute is silent as to attaches, liability many of these application.” The second states that Mor- еxpressly provide statutes that plaintiffs] rison “forecloses Norex ar- [the foreign conduct is indictable. that a number of RICO’s gument because an extraterritorial predicates possess interpretation wholly This of RICO is reach, possesses RICO itself extraterri- consistent with Morrison. Norex, explained at 33.2 Court there is torial reach.” sentences, question any predi- noting these lent” on the The first cate can consist of applica- on extraterritorial silence RICO’s Furthermore, foreign conduct. the sen- tion, RICO statute could mean silence, if tence about construed to mean broadly it might -suggest does not contains no indication whether provisions to extraterri- all any of its acts of Alternatively, the words of torial conduct. conduct, can include would seem also mean that RICO is could

the sentence by the second sentence on the contradicted compo- of its as to whether “silent” issue, recognizes which that “a number of can ever extrater- provisions nent an extraterrito- possess interpretation The first ritorial conduct. Norex, rial reach.” 631 F.3d at 33. First, if the probable. far more seems meaning, former it ‍‌‌​​‌‌​‌‌‌‌‌​‌​‌‌​​​​​‌‌​​‌​‌​​‌‌‌​‌​‌‌‌​‌​​‌​‌​‍is carries the statement sentence, if taken out of second The RICO statute is indisputably correct. context, meanings: have either of two could general extraterritorial indeed silent as to (1) Morrison, reject In view of we the are no words in the application. There that, plaintiff’s argument by providing for discuss, or even the suggest, statute which application extraterritorial of some of possibility foreign might that conduct be predicates, Congress manifested a RICO, considered violative of without re- clear intention that have extraterri- RICO gard particular predicate the application provisions. torial all its foreign invoked conduct. On applies (2) Notwithstanding Congress’s express hand, given the other if the second mean- in- provision “racketeering activity” that flatly ing, the statement would be either clearly foreign specified clude some con- incorrect, misleading. or at least As ex- duct, requires that Morrison above, plained incorporates by ref- activity excluding be as all for- construed erence the terms other statutes. The eign conduct. Act that ac- explicitly states tivity, which serves as a basis of RICO clear, interpretation logical, The first liability, any includes act un- “indictable entirely with consistent Morrison. statutes, a incorporated predicate der” the Morrison, presumption against Under the expressly provide number which applicability requires extraterritorial foreign conduct is indictable. Whatever apply statutes be understood not to extra- draw, might ultimate conclusion one territorially provision a clear absent certainly fairly application.3 cannot be described as “si- extraterritorial ed). Judge Raggi quotes saying, 2. twice Norex as Norex never said that RICO has no ex- " application. because 'RICO is silent as to extrаterri- traterritorial therefore, application,' ... torial 'it has 127; Raggi none.''' Judge Raggi suggests See Dissent at see also id. that Morrison’s dis- reader, 30(b) although Exchange at 133. will This mislead the cussion of Act Section unintentionally. supports doubtless It is true that the her view that RICO can never have appear application. Raggi words "it has none” in the Norex See Dis- words, fact, uttering portion decision. But in those Norex sent at 133-34. In of Morri- speaking supports was not about the RICO statute. It son 's discussion the' inter- Morrison, simply quoting pretation parties was Morrison’s framework for of RICO. In deciding argued provision whether a statute because one small has extraterritorial (and application. Exchange potentially apply Act Morrison stated Norex could ex- quoted), gives traterritorially, a statute no the entire Act should be read "[W]hen clear indi- application, applying extraterritorially. cation of an extraterritorial it has Norex, (emphasis none." S.Ct. 631 F.3d at 32 add- 561 U.S. at 2869. The pro- fact- that made clear pie, proposition The noncontroversial expressed (1) above, the terms of RICO some of in version vision and not the puzzling predicates apply extraterritorially (2). does proposition expressed in version congressional manifest a clear intent short, potential recognizing am- also provisions that its other extra- biguity in Norex’s brief discussion of this territorially. respect With extraterrito- by far point, interpretation sounder application prоvisions, rial of these other ruling is that RICO’s clear manifes- RICO would flunk Morrison test. tation of intent provisions that some of its consequence This is so clear a of Morri- permits conduct extrater- rule that one sentence is en- son’s short ritorial of RICO in those situ- tirely point. sufficient to It state re- ations, justify but does not interpreting no quires explanation. further every provision being of RICO as extra- hand, On the other if the Norex territorial. panel’s ruling in this case (2) had mind version when it said that inwas full agreement with that proposi- ... plaintiffs] [the “Morrison forecloses tion. argument,” why one wonder would Some colleagues are -troubled panel came to that conclusion. Id. Where prospect applying RICO to extraterrito- Congress expressly provided that acts “in- conduct, they rial which deem unwise. dictable” under listed in statutes RICO are Whether this is wise or unwise is not the acts,” “racketeering justify which RICO Congress court’s business legis- when has liability, and Congress included in that list clearly lated Congress on the issue. pro- statutes that expressly provide for extra- in vided the RICO statute that acts “in- (indeed application territorial some that predicate dictable under” a list of acts -are only conduct), foreign Congress inquiry. acts. That ends our exactly did what requires Morrison I therefore concur with the court’s decision extraterritorial It application. manifested deny rehearing in banc. a clear intention that RICO extrater- ritorially limited extent. If the —to JACOBS, Judge, DENNIS Circuit opinion Norex meant notwithstanding CABRANES, joined by A. JOSÉ REENA this cleаr congressional manifestation of RAGGI, LIVINGSTON, DEBRA ANN intent, Morrison requires RICO be LYNCH, and GERARD E. Circuit Judges, interpreted as never applying foreign dissenting from rehearing the denial of conduct, one why would wonder the Norex banc: panel reached that conclusion and how it I justified. respectfully from could be dissent denial of re- The assertion would hearing out for cry panel opinion further if in banc. The explanation, indeed this any adequate explanation appeal could taut with our be found. tension earlier Notwithstanding opinion the facial Norex ambiguity of Petroleum Ltd. v. Access sentence, Industries, Inc., Cir.2010) brevity the the of the Norex 631 F.3d 29 curiam). panel’s subject treatment of the strongly (per resulting instability The will suggests that it convey likely meant to the sim- require in banc review to reconcile Nabisco, rejected argument,

Morrison court panel precisely hold- In RJR our followed provides that "when a reasoning, holding statute for some this line of that where application, presumption extraterritorial the prescribed appli- has extraterritorial operates extraterritoriality predicates, to limit cation for certain of RICO's provision applies “only to its terms.” extraterritorially 561 to [that] ex- 265, added). at (emphasis U.S. 130 S.Ct. 2869 tent.” 764 F.3d at 136. 128 Indus., Carpenter, Inc. v. one of Mohawk jettison precedents,

these 599, 111, 175 L.Ed.2d S.Ct. them. (2009). address Both cases Influenced Racketeer application CABRANES, Judge, (“RICO”), A. Circuit JOSÉ Act Organizations Corrupt JACOBS, REENA by DENNIS They joined reach disso- seq. § 1961 et (1) RAGGI, and DEBRA ANN whether as to:

nant conсlusions LIVINGSTON, dissenting compare Judges, No- extraterritorially, Circuit may apply Cmty. European rehearing en banc: rex, denying at with order 631 F.3d from the Nabisco, Inc., F.3d v. RJR case in this civil presented question The (2) Court (2d Cir.2014); Supreme applies ex- the RICO statute1 is whether argument that [the] “forecloses precedent \ traterritorially. number of RICO’s because reach, and it has important question, an extraterritorial This is possess way an extraterritorial and artful possesses itself in a novel been answered 33; Norex, compare at reach,” Absent review by a of our Court. Nabisco, 136; id., Court, interpreta- with RJR panel’s (3) an extraterri- very definition of long-term significant tion will have RICO, namely wheth- torial abroad that impact on activities adverse extraterritoriality turns on the er gov- assumed were have heretofore we foreign locus or the enterprise locus of the territo- by the laws of primarily erned acts, compare Norex activities occurred. ries where those 33, with RJR vote, the en After a close and considered 136, 142. F.3d at forgo possi- has decided to banc court in this litigation frequency of RICO opinion.2 reviewing bility of courts that district all ensures Circuit but respect- I regrettable decision From Liti- this. vexing questions about will face fully dissent. fault lines of Norex and RJR on the gation undisturbed, the remains If this decision controlling “a likely present to Nabisco is here, European the plaintiffs prevailing sub- to which there is of law as question states,3 will Community its member and opinion” of for difference ground stаntial victory, and one pyrrhic a have achieved materially ad- “may resolution and whose Community’s constituents will the the liti- termination of the ultimate vance years ahead. 1292(b). regret in the have cause Under such gation.” 28 U.S.C. citizens, natural and cor- Because its Why? conditions, should not hesi- “district courts likely targets of among are the porate, interlocutory appeal.” an certify tate convening an against the of in favor or vote §§ 1. 18 U.S.C. 1961-1968. court). en banc the decision not to convene 2. Note that “the necessarily mean en banc court does govern- Community "a European was 3.The significance was cor- a case either lacks through body created collaboration mental Indeed, may contrary be rectly the decided. Europe.” among majority the nations of Taylor, F.3d States v. true.” United lawsuit was Appellant’s at 6. Since this Br. /., Cir.2014) (Cabranes, dissenting filed, Community European has originally (de- banc) rehearing en from the denial European Union. incorporated into been history scribing special of en bancs in the Nabisco, Inc., 764 Cmty.v. RJR European highlighting the various Second Circuit (2d Cir.2014). why judge would may explain a factors that in- future RICO actions under the cate acts that punishable are abroad. This reasoning flatly years of the statute. is inconsistent terpretation with precedent Court, from this and the Su- panel The holds that an- has itself Court, preme that treats RICO as an of- reach if and when one fense distinct from predicate acts. Al- an predicate statutes has extrater- though it indisputable is that Congress reasoning ritorial reach. This conflates intended predicate for certain RICO stat- question applies of whether RICO ex- abroad, utes to actions or events traterritorially with whether the statute’s there is no concluding clear basis for “racketeering activity” definition of in- Congress intended for go RICO itself to predicate cludes offenses that can be along reason, with them. For this charged merely abroad. If RICO were an panel’s opinion may also allow an end-run or, additional as often the criminal— around presumption the revivified case, consequence committing civil— extraterritoriality in Morrison4 and Kio- offenses, might this view have bel.5 But, Judge Raggi’s some merit. com- Indeed, many there are important crimi- clear, pelling dissent makes RICO is not nal expressly statutes which make extra- simply designed pile punishment. on activity territorial say indictable but noth- Rather, prohibits the statute be- distinct ing about availability RICO the conducting, havior: controlling,' funding they circumstances perhaps be- address — enterprise through of racke- legislators cause focusing were more on teering. crimes, prosecutions including some text, statutory overlooks the terrorism, involving and not’on the going straight to the definition of “racke- treble damages attorney’s fees avail- teering activity,” determining that some able under civil damages. actions for It is abroad, punishable acts are herring suggest thus red at best to plaintiffs’ then splitting RICO claim by inсorporating a mostly number of ter- two—one “domestic” RICO claim for those RICO,6 rorism-related crimes within Con- predicate acts that punishable are not gress also intended —without clear ex- allegedly abroad and that defendants com- pression give of affirmative intent —to States, mitted the United and one “ex- global reach ato whole host of non-terror- claim traterritorial” predi- for those civil ism-related claims.8 This is case of Ltd., v. foreign Morrison Nat'l Aus. Bank 561 U.S. conduct relate to international terror- 247, 2869, (2010). ism.");' Lynch 130 S.Ct. 177 (posing L.Ed.2d 535 a Dissent 141-42 hypothetical involving scenario a "revolution- - ary group largely based in a Co., Middle Royal Eastern 5. Kiobel v. Dutch Petroleum country” -, "plantfs] a a 1659, bomb near federal 133 S.Ct. 185 L.Ed.2d 671 building" office (2013). ”behead[s] and an abducted ’). j American ournalist’ panel’s opinion, Judge 6. The Hall’s concur 7.Indeed, incorporates many predicates RICO support rence denying in of the order rehear banc, quite that are removed from the dark world of Judge Lynch’s en and dissent from international denying rehearing terrorism. See 18 U.S.C. the order en banc are.all 1961(1) (incorporating § very that outlaw extraterritoriality keen to locate statutes trafficking copyrighted predicates. within in counterfeit work its terrorism-focused (18 2319), pen- § (listing RJR 764 F.3d at U.S.C. embezzlement from 136 a num (18 664), § ber of RICO’s statutes focused on sion and welfare funds U.S.C. and offenses); terrorism Hall Concurrence other activities that have little connection to terrorism). ("Many predicates 124-25 of the 130 RAGGI, joined Judge, Circuit panel REENA an inch and the giving JACOBS, of the A. by a mile. The dubiousness DENNIS JOSÉ

taking reasoning its direct panel’s CABRANES, stretched and DEBRA ANN —and only- Morrison and Kiobel —is tension with LIVINGSTON, dissenting Judges, Circuit plain- that a by the fact reinforced further rehearing en banc: from the denial of any actually prove not tiff need v. National Australia Since Morrison in order to sus- Ltd., 2869, 247, 130 S.Ct. Bank 561 U.S. activities al- tain a civil claim for RICO (2010) (“Morrison”), 177 L.Ed.2d 535 entirely outside the occurred leged to have in circuit and around the nation courts this United States.9. held that the Racketeer uniformly have more than four After To summarize: Act Corrupt Organizations Influenced complicat- experience with decades of seq., 1961 et (“RICO”), does statute, our has discov- a Court ed extraterritorially. These courts new, potentially announced a ered and they in de- differed how have sometimes of that judicial interpretation far-reaching, appli- RICO particular termined whether in the support finds little statute —one extraterritorial, but cation was domestic statute, implementation, history of the assumption has been con- underlying their Court; precedents is silent as to extrater- sistent: “RICO litigation indus- encourage new that will and, therefore, “it has application” ritorial activities abroad to try exposing business Ltd. v. Access none.” Norex Petroleum “racketeering”;10 and that claims of civil Inc., (2d Cir.2010) Indus., 33 adjudicate civil our courts to will invite (“Norex ”) (internal quotation marks omit- on extraterritorial grounded claims ted).1 anywhere the world. activities Circuit, panel. plaintiffs predicatе-centric view of the Needless example, in this

8. For others, sought say, to use civil RICO claims not invoke have the Government also does challenge supposedly business predi- unlawful RICO’s criminal view that practices countries conducted jurisdiction of cates extend the extraterritorial act, alleging, aspect as a that one civil the statute for non-terrorism-related laundering money involved the scheme of the United States 9-20. claims. See Brief through in violation of 18 the United States See, Mirtchev, e.g., v. U.S.C. 1951. Hourani Co., Sedima, S.P.R.L. v. 473 U.S. 10. See Imrex (dis (D.D.C.2013) F.Supp.2d 479, 529-30, S.Ct. 87 L.Ed.2d 346 missing out "extor RICO claim that arose I., (1985) (Powell, dissenting) (lamenting the Plain tion in actor of Kazakh Kazakhstan expansion of RICO to include civil racketeer assets"); Republic tiffs’ Kazakhstan-based ing charges "brought the unfettered dis —in AG, (S.D.N.Y. Iraq F.Supp.2d v. ABB litigants private federal court cretion of —in 2013) (dismissing claim that related to seeking legitimate treble businesses alleged mismanagement Iraq of the United damages ordinary fraud and contract program); Cedenov. In- Nations Oil-for-Food cases”). Inc., (S.D.N.Y. F.Supp.2d Grp., tech 2010) (dismissing alleged, RICO claim that Xu, v. Fan 1. See United States Chao alia, inter officials and enti Venezuelan Cir.2013) (9th (recognizing pre 974-75 damaged company incorporated in the ties sumption apply extraterri that RICO does not Islands). panel Virgin British RJR Mirtchev, F.Supp.2d torially); v. 943 Hourani Nabisco, money laundering which identifies (D.D.C.2013); Fin. 159 In re LIBOR-Based predicate as a act that extends RICO extrater Litig., F.Supp.2d 935 Instruments Antitrust ritorially, claims into federal welcomes such (S.D.N.Y.2013); v. Daоud & 666 Adhikari 764 F.3d at 139-40. court. See Partners, Civ. 2013 WL 4511354 No. 09 (S.D.Tex. 2013); Aug. Petroleos Mexicanos noting United It is ‍‌‌​​‌‌​‌‌‌‌‌​‌​‌‌​​​​​‌‌​​‌​‌​​‌‌‌​‌​‌‌‌​‌​​‌​‌​‍also worth that the n Co., States, brief, Eng’g 12 Civ. adopt v. & Const. No. does not the SK in its amicus

131 case, panel In this civil of the court enterprises. See European Nabisco, Inc., Cmty. v. mooring untethers RICO from its on RJR No. 02 Civ. 5771(NGG), concludes, 2011 shores and for WL United States *4-7 (E.D.N.Y. 2011). 8,Mar. time, the first the statute reaches foreign enterprise to a overseas—even RJR Nabisco has moved for this court to through essentially foreign conducted rehear the case I en banc. vote to grant racketeering long as one because, —so that review my like a number of predicate alleged act is references colleagues, I think panel’s treatment of prosecuted conduct that could be under a RICO’s extraterritorial application con- criminal statute that itself extra- reaches flicts with controlling precedent, specifical- territorially. European Cmty. (1) See v. RJR ly, holding Court’s Nabisco, Inc., which mandates a presumption 136-37. Cir.2014) (“RJR ”).2 Nabisco That same application extraterritorial panel concludes that whether a States statutes unless clearly expresses an claim is affirmative intent to domestic extraterritorial de (2) abroad; have a statute reach our pends on enterprise 'not the locus of the Morrison) holding in Norex (or (relying on or the on some RICO does not extraterritorial- two), relationship between the but instead ly though even predicate some acts on the location particular predicate are crimes that could be prosecuted extra- holding, acts. See id. at 140-41. In so territorially. rejects the district court’s deter mination that RICO’s focus the enter My concern with the reliance on prise, that the locus of the enterprise de predicate individual support being applied termines whether RICO is RICO’s extraterritorial reach extends also domestically extraterritorially, to its reliance on acts to deter- RICO has no extraterritorial mine being when RICO is applied domes- 9070(LLS), (S.D.N.Y. July 2013 WL 3936191 cigarette sold the euros at a discount im- 30, 2013); AG, Republic Iraq v. ABB 920 porters money who purchase used the (S.D.N.Y.2013); F.Supp.2d Tymoshenko 517 cigarettes RJR's from wholesalers. The com- Firtash, 2794(KMW), v. No. 11 Civ. 2013 WL plaint alleges that RJR directed and con- (S.D.N.Y. 26, 2013); 1234821 Mar. Mitsui money-laundering by, trolled this scheme in- Lines, Inc., Logistics, O.S.K. Ltd. v. Seamaster alia, concealing identity cigarette ter (N.D.Cal.2012); F.Supp.2d 871 933 Alumi- purchasers, shipping cigarettes through Pana- Inc., num Bahrain B.S.C. v. Alcoa No. scrutiny, ma to shield the transactions from (W.D.Pa. 11, 2012); WL 2012 2093997 June bribing guards Colombian border in or- Corp. Donziger, F.Supp.2d Chevron v. 871 229 employees der to allow its to enter the coun- (S.D.N.Y.2012); Sosa, Sorota v. 842 try illegally payments cigarettes to receive (S.D.Fla.2012); F.Supp.2d Toyota In re Venezuela, and then to travel to from where (C.D.Cal. Corp., F.Supp.2d Motor funds were wired to RJR Nabisco accounts in 2011); USA, Philip United States v. Morris the United States. See RJR Inc., (D.D.C.2011); F.Supp.2d Cedeno extraterritorially pro- 135. In addition to Inc., Grp., F.Supp.2d v. Intech money laundering, scribed see 18 U.S.C. (S.D.N.Y.2010). 1956(f), complaint charges RJR Nabisco with the crime of panel, 2. As summarized the RJR Nabisco providing support material for terrorism inso- scheme here at issue in- cigarettes acquired far as some in the de- multi-step process beginning volved a with smuggling Iraq scribed scheme were sold in Europe by to or for the of narcotics into groups. organiza- Colombian and benefit of various terrorist Sec- Russian criminal tions, ¶¶ 75-83; proceeds Compl. which "laundered” ond their euro Am. through 233913(d)(2). money brokers. Those brokers then by extraterritorially. precedent generally, as stated Morrison and

tically —both Morrison, a to determine “focus” of statute Supreme spe- used the and Court 266, at 130 S.Ct. 561 U.S. application. cifically, applied to RICO this court that RICO’s emphasizes Precedent 2869. necessary briefly is to discuss Norex—it acts, alleged predicate “focus” is not that precedent. a relationship between but the Morrison, reaf- In Court (demonstrated by predicate strong presumption firmed See, acts) enterprise. and an identified Basciano, v. 599 F.3d e.g., United States

184, Cir.2010); statute “unless there is the affirma- see also United States 205-06 Xu, 965, Congress clearly v. Chao Fan ex- States tive intention of the Cir.2013) (9th identifying (collecting cases pressed give a statute extraterritorial “pattern of racke- “enterprise” either 255, effect.” 561 U.S. 130 S.Ct. 2869 focus). Nor can the teering” as RICO’s omitted). (internal quotation marks Mor- suggest otherwise panel RJR Nabisco expression rison found no such clear characterizing aggravating RICO as an 10(b) affirmative intent Section consequences simply statute that adds new Exchange Act of Securities even Nabis- to the offenses. See RJR though prohibition the statute’s of fraud co, premise, 764 F.3d at 135. That from “in connection with the or sale of purchase flows, analysis which the rest of the any security” referenced means or instru- precedent. is also at odds with Successive commerce, mentalities of interstate which greater and lesser includ- prosecutions by definition includes commerce with for- jeopardy. implicate ed offenses double eign 78j(b); countries. U.S.C. Ohio, 161, 167-69, See Brown v. 432 U.S. 78c(a)(17). holding, id. In so the Su- (1977). But 97 S.Ct. 53 L.Ed.2d 187 preme rejected specifically Court prosecutions for both RICO developed by “conduct” and “effects” tests do not. See United Congress to “discern” when this court Basciano, v. 599 F.3d at 205-06. States statute, would have wanted a otherwise concerns, light In of these this court applica- “silent as to ... extraterritorial give needs to further consideration two tion,” to reach abroad. See (1) applies issues: whether RICO extrater- (discussing 130 S.Ct. 2869 (2) ritorially, the criteria for determin- rejecting approach ap- in favor of a RICO claim is domestic or plication presumption against extrater- majority extraterritorial. Insofar as cases”). sure, ritoriality “in all To be active court decline to members presumption Morrison noted purpose, convene en banc for this I re- against extraterritoriality not a clear spectfully dissent. short,

statement rule. it does not de- Extraterritoriality Holdings 1. The expressly say mand that a “this statute Morrison and Norex abroad”; applies law “context can be con- sulted as well.” Id. at 130 S.Ct. explain To how the decision con- extraterritoriality controlling emphasized flicts with 2869.3 But Morrison context, (2d Cir.2007) (allowing legis- statutory consideration of I understand this to mean circumstances), legislative history, Congress's history only because if lative in those clearly hardly to have intent remains uncertain after all canons of can be said generally expressed applied, Cohen its affirmative intent for statute to construction are see Co., Morgan extraterritorially. v. JP Chase & reach 133 Al-Turki, Norex, indicator of extra- purported whatever 100 F.3d at 1051-52. In clearly territoriality, however, it must that Morrison acknowledged we affirma- tively signal Congress’s intent for tests, abrogated these mandating both a country’s to reach outside this statute bor- generally applicable presumption and “a See id. Statutory ders. constructions bright-line rule: absent a clear Congres merely “possible that are ... do not over- sional expression of a statute’s extraterri presumption against ride the extraterrito- torial application, a statute lacks extrater 264, riality.” Id. at 130 S.Ct. 2869.4 Norex, ritorial reach.” 631 at F.3d 32. RICO, Norex identi Applying this rule to As court long recognized, this has fied expression no clear of congressional any “RICO statute is silent as to extrater- intent application. for-extraterritorial In North South Fin. application.” ritorial deed, Norex reiterated this court’s earlier Al-Turki, Corp. v. 1051 categorical Cir.1996) conclusion that the RICO stat added); see also Unit- (emphasis ute is “‘silent to any Xu, extraterritorial ed v. Fan States Chao F.3d at 974 ” id. (9th application,’ North South Cir.2013) (same). (quoting Nevertheless, be- Al-Turki, Fin. Morrison, Corp. v. fore we had borrowed the con- statement as dic declining arid to treat duct and from effects tests our securities “ ), tum and concluded jurisprudence and antitrust to allow therefrom that ‘it none,’” id. extraterritorially to reach has (quoting some circum- Corp. stances. See North South Fin. v. 255, 130 2869).5 S.Ct. fact, Congress generally explicit

4. is distribution committed outside the territorial jurisdiction States”). stating its intent for a statute to reach extra- of the United The territorially. money laundering intended extraterritorial and ma-' other statutes is made clear from support predicates alleged context: pro- terial here are they proscribe only occurring conduct outside explicitly scribed criminal statutes that country. § (stating this See 18 U.S.C. provide extraterritoriality. money for As to that United States national who "kills or at- stated, laundering, Congress has tempts to kill a national of the United States jurisdiction There is over while such national is outside the. United prohibited by the conduct this section if—(cid:127) jurisdiction States but within the of another (1) the conduct is United States citizen country” subject penalties to criminal as if or, in the case aof non-United States citi- special ’act had been committed within mari- zen, part the conduct occurs in in the Unit- jurisdiction time territoriаl of United States; (2) ed States); transaction or series (prohibiting §id. retention of (who States) related transactions involves funds or "child has been in monetary exceeding instruments a value outside the United with States intent to ob- .of parental rights”). struct the lawful exercise of $10,000.- circumstances, 1956(f). In all § these courts need support As to not' material terrorism, stated, engage "divining Congress what Congress would has "There is thought have wanted if it had of the situation jurisdiction extraterritorial Federal over an court,” prohibited by before Morrison, exercise offense under section.” Id. 561 U.S. at 130 S.Ct. 2339B(d)(2). § because has made its extraterritorial similarly Dozens of other are statutes ex- statute, however, intent clear. The RICO See, plicit. e.g., (authorizing id. “ex- does not such a conclusion. admit jurisdiction” tra-territorial over human trafficking specified statutory offense under Hall, Judge concurring in the denial of re- national, sections if offender is United States banc, hearing description en that this submits alien, permanent present resident in Unit- misleading of Norex is because "Norex never States); (stating pro- ed 21 U.S.C. 959 applica- said that RICO has no extraterritorial Hall, J., hibition on manufacture or distribution of Op. Concurring tion.” in Denial of Banc, 2], import controlled substances with Reh’g Perhaps intent to En ante at [131-32 n. respectfully "is intended to reach acts of manufacture haec verba. But I submit a technical escape that violation to ‍‌‌​​‌‌​‌‌‌‌‌​‌​‌‌​​​​​‌‌​​‌​‌​​‌‌‌​‌​‌‌‌​‌​​‌​‌​‍on to hold Mor- domestic proceeded

Norex then that, just Indeed, “be- argumеnt Supreme the the Court ruled ity”). rison defeated predicate acts a number of RICO’s cause a clearly “provides even when statute reach, RICO possess an extraterritorial application,” extraterritorial as in for some an extraterritorial reach.” possesses itself 30(a), 15 U.S.C. the case Section ruling, Norex cited Id. at 33. so 78dd(a), presumption against § “the extra 30(b) of of Section Morrison’s discussion territoriality operates provi to limit that 78dd(b) Act, § see 15 U.S.C. Exchange the Morrison, at sion to its terms.” 561 U.S. attending rules and (stating that Act and 265, 130 S.Ct. 2869.6 any person not regulations “shall reference to this last specific Norex’s transacts a secu- insofar as he business Morrison, quoted excerpt from see 631 the Unit- jurisdiction rities without ” 32, together at with its reiteration of F.3d so in violation of ed unless he does States any “as to extraterritorial RICO’s silence ... prevent “to regulations promulgated (internal quotation marks application,” id. added)). The (emphasis evasion” of Act omitted), signal that the extraterritorial argued that the ex- General had Solicitor reach of acts must also if Act have no function emption would limited “to terms.” The terms [their] not in the first instance to secu- be did Morrison, See rities transactions abroad. of the extraterritorial crimes identified as 130 S.Ct. 2869. While 561 U.S. authorize extraterritorial urged construction acknowledging jurisdiction for under the prosecutions ref- Supreme Court con- “possible,” was statutes, proscribing erenced criminal possibility a was insuffi- cluded such alleging predicates. for RICO claims such presumption cient to overcome the otherwise, To conclude the RJR Nabisco extraterritoriality. (observing id. See panel narrowly must read Norex to hold it would be “odd for indicate only that the inclusion of extraterritorial of the whole the extraterritorial crimes RICO’s list of a Exchange provision Act means of clearly signal Congress’s does not intent appli- to its imposing precedent condition “extraterritorially to reach in all by limiting “enabling cation abroad” Nabisco, applications.” its RJR ‘eva- regulations preventing ... to those (emphasis original). F.3d at 136 The Act, pre- than all those sion’ rather ” panel pronounces interpret error to ‘violation,’ No- concluding that venting rex to hold “that RICO can never have abroad provision was “directed at actions in any applica- extraterritorial reach of its might conceal a violation or domestic (emphasis might original). cause what would otherwise be tions.” Id. Thus fairly notably, prescribed that is the conclusion derived from No when the issuer has ties to (1) quotation rule that rex’s of Morrison’s the United States and the defendant broker or " gives a statute no clear indication of '[w]hen dealer acts in contravention of SEC rules and " none,' application, an extraterritorial it has Thus, regulations. Court’s treat- Norex, (quoting at 32 30(a) limiting ment of Section the extraterri- — 2869), (2) 130 S.Ct. its imme provision torial reach of that to its terms— " diately following reiteration that RICO 'is rejection should not be conflated with its " application,' any silent as to 30(b) only argument that Section made (quoting Corp. id. North South Fin. v. Al- Exchange applied sense if the Act extraterrito- Turki, 1051). hardly 100 F.3d at Silence Monison, rially. 561 U.S. at clear indicator. S.Ct. 2869. terms, 30(a) By expressly its Section reaches transactions, certain extraterritorial securities pronounce- categorical freed from Norex’s territorial conduct. See RJR 2332(a) ment that “RICO is silent as to extra- F.3d at (citing (in- application,” territorial 631 F.3d at 32 (prohibiting killing United States national omitted; quotation emphasis ternal marks “while such national is outside the United added), panel Congress States”), 2423(c) concludes that and id. (prohibiting clearly express did indeed affirmative “engaging in illicit sexual conduct in for- intent to have RICO reach extraterritorial- eign places”)). finds it “hard to ly including when a a civil claim— imagine why Congress would incorporate claim— alleges pattern racketeering involving these statutes predicates as RICO if RICO proscribed by criminal stat- could never have applica- extraterritorial “By utes with extraterritorial reach: incor- tion.” (emphasis Id. at 136 in original). porating [extraterritorially these reaching Morrison, however, effectively declined to statutes into as criminal] recognize such speculative reasoning as a acts, Congress clearly has Congress’s substitute for expression clear ap- communicated its intention that RICO rejected of affirmative intent when it ply to extrаterritorial conduct to the extent argument Solicitor General’s that an ex- that extraterritorial violations of those ception to extraterritoriality in the Ex- statutes serve as basis for RICO liabil- change Act only made sense if the statute Nabisco, ity.” RJR 137. I am applied extraterritorially. See U.S. at and, thus, persuaded by analysis not 263-65, 130 S.Ct. 2869.

think we need to rehear this case en banc. fact, it imagine why is not hard to

First, the Norex decision is not easily so Congress would have exclusively included cabined panel sug- RJR Nabisco crimes the list of RICO gests. The complaint alleged Norex predicates necessarily intending without predicate acts of money laundering by extend RICO’s own reach extraterritorial- United States citizens in amounts exceed- ly. enterprises Domestic can be conduct- $10,000.7 conduct, Such like the mon- through patterns ed of racketeering mani- ey laundering at issue in RJR fested foreign as well as domestic acts. specifically proscribed extraterritorially. For example, syndicate a domestic crime (f). 1956(a), Thus, § See 18 U.S.C. No- might through pattern be conducted rejection rex’s extraterritoriality mostly by characterized do- is not factually distinguishable from this drug mestic trafficking money laun- signal only general case so as to rule not dering, but with its continuation enabled applicable plaintiff when a pleads extrater- by the murder of an American rival traf- ritorial predicates. crimes as RICO ficker while the rival was outside the n Second, event, Congress United States. and in could well have Norex and prosecutors determined that al- permit Morrison do not this court to should be locate prove a clear lowed to expression of such an extraterritorial RICO’s extraterritori- ality pleaded predicates murder as a racketeering predicate that are them- essentially selves extraterritorial crimes. The RJR domestic of racketeer- panel justifies Nabisco by ing continuity that conclusion to demonstrate the intended observing that certain RICO pattern through which the domestic apply only reference crimes that enterprise to extra- would gen- be conducted. See ¶¶5-11, 168-70, dus., Inc., (2d Compl. 7. See First Am. 182- No. 07-4553-cv Cir. filed Jan. 234, 304-16, 5579-81, 5556-57, 5559-68, 9, 2008). J.A. 5579-81, Norex Petroleum Ltd. v. Access In- abroad, Co., made national conduct Nw. Bell Tel. 492 States Inc. v. erally H.J. § S.Ct. criminal 2332. RJR Na- (1989) (discussing relatedness bisco, L.Ed.2d 195 The concern is of racketeer- continuity requirements can al- unwarranted. The United States ing pattern). extrater- ways prosecute persons for such § 2332. directly ritorial homicides under foreign organiza- terrorist

Similarly, a See, Indeed, successfully done so. in a of racke- has might engage tion consisting primarily of attacks exe- teering e.g., Bombings In re Terrorist U.S. Em- States, but financed in the United cuted Afr., in E. bassies collected abroad. Cir.2008) alia, with funds (upholding, inter convic- (b)(2)(C)(ii). 2339C(a), § U.S.C. conspiracy to nation- tions for murder U.S. prosecutors have determined could 2332). Moreover, als in violation of relationship seeking prove punishment maximum a defendant wоuld essentially pattern to the domestic more, face under 2332—death—is as well as the means for ensur- enterprise, less, than the maximum life sen- severe prove allowed to ing continuity, should be tence he would face if convicted of violat- financing.8 criminal extraterritorial such § with a predicate. Com- of 1963(a). not clear from the inclusion What is pare 18 U.S.C. with id. reaching crimes in the extraterritorially Thus, respectfully I that it raises submit however, predicates, is Con- list of RICO suggest prosecutors a false alarm to intent further to extend gress’s affirmative bringing to will be thwarted terrorists foreign enterprises con- reach to justice recognize unless we RICO to ex- through essentially foreign pat- ducted extraterritorially foreign enterpris- to tend extraterri- whenever terns through foreign patterns es conducted alleged predicate crimes are acts. torial racketeering upon pleading the ex- that such a construction submits Rather, predicate. traterritorial-crime that “a defendant associated best ensures here, litigants, plaintiffs civil as such permitted is not foreign enterprise” awith pursue a to treble ruling who need such that indis- escape liability “to for conduct damages United States courts for for- citing putably predicate,” violates a RICO eign racketeering injuries.9 example killing of United J., Concurring Reh'g hypothetical Op. in Denial of En 8. second assumes This J., Banc, [130-31]; foreign Lynch, Op. apply domestically en- ante at Dis- RICO can Banc, engaged senting Reh’g post terprise in a from Denial of En at supra the United States. The law on this at [130-31]. within For reasons discussed settled, 3], at point [138— is not as discussed I admits [132 n. do not think Morrison infra point our consideration en 41]. The warrants consideration of such extra-textual sources in if, explain particularly banc as I in that same applying presumption against extraterrito- discussion, RICO’s domestic extraterritori- riality. application cannot be determined refer- al Furthermore, the cited references indicate acts, which are ence to individual only Congress’s RICO to be intent allow focus. See not statute's They say nothing used terrorists. 2869; United States v. U.S. at 130 S.Ct. about whether that can be extra- Basciano, at 205-06. territorial, Indeed, as well as domestic. prompted focusing hypotheticals, attacks that the USA 9. on terrorism terrorist 9/11 activity my colleagues legisla- PATRIOT Act involved murderous some of reference n within Act, objectives the United States a domestic cell of tive of the USA PATRIOT organiza- terrorism terrorists affiliated with which added certain extraterritorial Hall, predicates. See tion. crimes to RICO's list difficult, however, particularly It is 561 U.S. 130 S.Ct. 2869. No more expression locate a clear affirmative permit does it the possibility of such con- intent for claims congressional civil RICO gressional intent pre- overcome the extraterritorially in the inclusion to reach sumption against extraterritoriality. list of of extraterritorial crimes RICO’s id. at 130 S.Ct. Only 2869. a clear terms, By their the listed ex- predicates. expression Congress’s affirmative intent only statutes authorize crim- traterritorial that a extraterritorially statute reach can private proceedings, inal actions. id.; Norex, clear that hurdle. See accord may of such crimes be awarded Victims part restitution as of a defendant’s sen- stated, For the I reasons do not think may petition tence or be allowed to permit Morrison and Norex our court to government pro- for shares of forfeited identify such a expression clear of affirma- 3663, 3663A; §§ ceeds. See 18 U.S.C. tive intent respect with to the civil RICO seq. § 9.1 et But the listed extra- C.F.R. claim Accordingly, here at issue. specifically territorial statutes —and court should rehear this case en banc to money laundering support and material ensure a RICO extraterritoriality determi- statutes here at issue—themselves afford nation precedents. consistent with these no private persons civil causes of action. Thus, panel pur- while the RJR Nabisco Assigns 2. The Panel RICO Predicates a ports recognizing to be RICO extraterrito- Greater Role than Warranted Under riality only “liability guilt to the extent Jurisprudence could attach to extraterritorial conduct un- predicate,” der the relevant panel’s ground RICO RJR The decision to 136, at it in fact moves pleading extraterritorial reach in the of beyond predi- RICO well the referenced predicate certain acts also raises concerns concluding cate in that a plaintiff who jurisprudenсe. under long RICO It has pleads predicates extraterritorial-crime been understood pro- conduct that. pursue can a civil RICO claim for treble by scribed is not the individual RJCO damages, although Congress provided no but, rather, predicate pat- the overall civil claim in the criminal stat- See, racketéering activity. tern of e.g., ute. Basciano, United States v. 599 F.3d at (“[I]t pattern racketeering 205-06 is

Might Congress approved have such an activity, predicates, pun- not the is if extension of RICO it had considered conviction.”); by ished a see Possibly. such a circumstance? But Mor- generally Agency Holding Corp. v. Mai- permit rison does not stat- courts Assocs., 149, ley-Duff 143, & 483 U.S. extraterritorially by “divining utes what (1987) (observ- Congress would have if it S.Ct. 97 L.Ed.2d 121 wanted had thought remedy of the situation before the court.” designed “RICO is event, any predicate- country? In RJR Nabisco’s American travelers to that analysis based is not limited to terrorism possibility Congress's mere intent could range but crimes reaches the of extraterritori- enough have reached that far is not to over- predicates. al crimes listed as RICO For ex- presumption against ride the extraterritoriali- ample, Congress included in that list 18 ty. See 561 U.S. at 130 S.Ct. 2423(c) (prohibiting U.S.C. commercial sex Such warrant- caution is all more 18). persons younger abroad with than Does reasoning applied ed when RJR Nabisco's is express its clear for intent claim, I to a civil RICO for reasons now extraterritorially enterprise to a bordello in in text. discuss underage prostitutes

Thailand that securеs for pattern a injury satisfying pattern caused racketeer- but as a means for ing”). precisely, prohib- More what RICO identify element—it is difficult to a clear specified its are interactions between expression of affirmative intent civil enterprise pattern of rack- identified extraterritorially RICO claims to reach See, e.g., v. eteering. United States Rus- simply Congress’s from inclusion of some (2d Cir.1983) (“[I]t sotti, 717 F.2d is extraterritorially reaching crimes enterprise standing neither the alone nor possible predicates, list of even pattern racketeering activity itself pleaded when part pattern of the Rather, which RICO criminalizes. racketeering. combination of these two elements is the defeated, event, argument any That (em- object punishment under RICO.” by the fact that require RICO does not Thus, phasis original)). RICO’s focus is proof every alleged predicate act or of any particular alleged predicate not on act any particular predicate acts. See United (1) but on whether such acts as Basciano, States v. 206. The proved requisite are demonstrate the “pat- only law plaintiff demands that a RICO racketeering,” largely tern of a matter de- (but prove sufficient predicate acts pendent on their relatedness and continui- two) fewer than to demonstrate the re- Co., ty, see H.J. Inc. v. Nw. Bell Tel. quired pattern racketeering. See id. 2893; 109 S.Ct. accord short, plaintiff alleging a pattern of Daidone, v. States evidenced various RICO (2) Cir.2006); 374-76 and whеther that predicates applying extraterritori- (a) —some proceeds or its are used to ally, applying others domestically might (b) in, “acquire

“invest” or maintain ... — carry well his burden without (c) of,” interest or control “con- proving any alleged duct participate ... in the conduct of’ under the formula- alleged enterprise, ‍‌‌​​‌‌​‌‌‌‌‌​‌​‌‌​​​​​‌‌​​‌​‌​​‌‌‌​‌​‌‌‌​‌​​‌​‌​‍tion, singular are the permitting basis for 1962(a)-(c). RICO claim to reach extraterritorially. It respectfully I precedent that this submit would be curious for to locate a permit does not RICO to be construed as a statute’s extraterritorial reach in allega- statute that simply “adds new criminal and If, tion that need proved. not be on the consequences civil to predicate the of- hand, other panel the intended to condition Nabisco, fenses.” RJR 764 F.3d at 135. RICO’s extraterritorial reach on proof of That construction is further refuted alleged predi- extraterritorial —crime precedent permitting “a defendant to be apparent cates—which is not from opin- its prosecuted simultaneously or at —either departs ion—it even further from our separate times—for both substantive rack- jurisprudence RICO requiring not sim- eteering predicate and the crimes evidenc- ply proof of a pattern racketeering, but of racketeering.” United proof of particular predicates. Basciano, 205; States v. 599 F.3d at cf. Ohio, Brown v. 432 U.S. at Thus, to consistency ensure in the role (holding S.Ct. 2221 jeopardy double our jurisprudence assigns predi- to RICO prosecutions bars successive greater for acts, cate the court should convene en banc offenses). and lesser included clarify that Congress’s identification of assigned When the role predicate acts some extraterritorial crimes as RICO under our jurisprudence RICO predicates is thus un- clearly express does not an af- statute, derstood —not the object firmative intent for civil RICO claims to extraterritorially plain- purchase any security whenever a or sale of regis- reach exchange tered on a national securities or alleges predicate tiff such crimes as acts. ” any security registered.’ (quoting not so Determining Thus, RICO’s Domestic and 78j(b))). the Exchange Application Extraterritorial already Act—which the Court had held did apply extraterritorially not be —could rehearing yet for This case warrants applied domestically challenge foreign clarify how courts should third reason: purchases or sales securities based on and extrater- distinguish RICO’s domestic deceptive conduct in the United States. Before applications. ritorial RJR application required pur- Domestic understanding ap- RICO does not chase or country. sale of securities ply extraterritorially required courts to de- See id. particular termine RICO claim whether Norex, In this court cited Morrison to or That in- was domestic extraterritorial. reject alleged predicate a claim that acts quiry necessary remains after RJR Nabis- rackеteering committed within the United panel, co because the in its effort to distin- fraud, money States —mail and wire laun- Norex, guish decides RICO does not dering, Hobbs Act and Travel Act viola- extraterritorially apply alleged when the tions, bribery RICO to predicates are not extraterritorial crimes. —allowed domestically to an international scheme to regard Without to the locus of the enter- part take industry. over of the Russian oil prise racketeering, panel Norex, 631 F.3d at 31-32. claim plaintiffs’ properly applied rules extraterritorially RICO to the extent panel RJR Nabisco follows neither alleged predicates, extraterritorial-crime in determining Morrison nor Norex properly at the same time that the claim plaintiffs’ claims here RICO applied domestically to the extent it extraterritorially domestically. With no alleged domestic-crime occur- “focus,” identification of RICO’s as seem- ring in the United States. This reliance Morrison, ingly required by the RJR Na- predicate on individual acts to determine panel bisco looks to acts alone to whether a RICO claim is domestic or ex- application, seeming determine RICO’s Morrison, traterritorial is at odds with Thus, contravention of Norex.

Norex, jurisprudence. and our RICO that plaintiffs’ permissibly concludes claim applies extraterritorially for those con- Court (money occurring abroad prop- cluded that statute’s terrorism), laundering support for “focus,” erly determined identified domestically permissibly applies RICO by looking objects to “the of the statute’s in occurring those acts this coun- 267, solicitude.” 561 U.S. at 130 S.Ct. (wire fraud, fraud, try money and Travel this standard to Applying 2869. Section violations). Nabisco, Act See RJR .10(b) Act, Exchange prohibits which approach— F.3d at 140-43. This novel manipulative deceptive practices or in con- deter- which makes individual purchase nection with the or sale of securi- application minative of RICO’s without re- ties, concluded that the statute’s Morrison gard pattern to the locus of the overall of conduct, deceptive focus was not on but on enterprise or the —warrants in purchase sale of securities en banc review for several reasons. (“Section 10(b) United States. See id. conduct, First, clarify punish deceptive does not but this court needs to only deceptive require conduct ‘in connection with Morrison does indeed courts to inquiry “focus” to determine its “far

look to RICO’s from clear-cut.” United Xu, States v. Chao Fan at application. or extraterritorial domestic camps” emerged: have locating “[T]wo one Second, the court needs either identi- “enterprise,” focus in the RICO’s the other fy “focus” or to resolve the tension RICO’s (col- “pattern in racketeering.” of Id. Norex and RJR Nabisco as to the between cases). lecting The district court in this play can in determining role joined camp case the first based on the application. RICO’s fact that prohibits only racketeering significant These matters raise chal- activity specified cоnnected in ways to an Morrison, lenges. Following and before enterprise, thought paralleled which generally courts had RJR as- Exchange Morrison’s construction of the sumed RICO’s domestic extraterri- punish only Act to in frauds connection application torial should be determined with domestic securities transactions. See congressional reference to “the ‘focus’ of Nabisco, Inc., European Cmty. v. RJR enacting concern” in the statute. Morri- 2011 WL at (citing *5 son, 2869; at 561 U.S. 130 S.Ct. see 2869). 561 U.S. at By 130 S.Ct. Xu, v. United States Chao Fan 706 F.3d at contrast, joined the Ninth “pat- Circuit cases). (collecting Norex’s citation to camp, citing Supreme tern” Court deci- rejection plaintiffs Morrison in its do- stating any sions that “the heart of application in that argument mestic case is complaint allegation pattern is the of a assumption. consistent with this See No- racketeering,” Agency Holding Corp. v. rex, Thus, 631 F.3d at 32. the RJR Nabis- Assocs., Malley-Duff & 483 U.S. at identify focus, co failure to in (emphasis original), S.Ct. 2759 explain why or to it did not need to do so referencing key requirement “RICO’s of a to determine the statute’s application pattern of racketeering,” H.J. Inc. v. Nw. case, creates confusion this circuit Co., Bell Tel. 109 S.Ct. controlling as to Morrison’s effect. This Xu, 2893. See United States v. Chao Fan clarify court needs to the matter en banc. 706 F.3d at 976-77.10 Further, Norex, courts that applied have Morri- In this court did not choose be- son’s “focus” standard to “enterprise” but, RICO have found tween and “pattern” Xu, through patterns 10. In United States v. Chao Fan occurring Ninth upheld (or Cirсuit .wholly domestic mainly) country. at least in this prosecution J., RICO to defendants’ for schem- Lynch, Op. Dissenting from Denial of large money "to steal sums of from the Banc, Reh’g post pattern, En But [131]. if get away Bank of China and to with it in the (or enterprise enterprise rather than rela- (observing United 706 F.3d at States.” and, thus, pattern), tion to is RICO's focus immigration parts and bank fraud application, determinative of its this court inextricably were linked so that with- event, say should so en banc. a con- States, immigration out fraud in United bank apply domestically clusion that RICO can to a dangerous fraud in China would have "a been racketeering occurring mostly Thus, failure”). "pattern while defendants' ineluctably States does not lead to racketeering activity may have been con- a conclusion that intended for RICO overseas,” planned ceived and the court con- apply extraterritorially to a enter- perpetuated cluded that "it was executed and prise through entirely foreign conducted States,” allowing in the United for domestic pattern by predi- of evidenced prosecution. Id. prohibited by extraterritorially reaching cates statutes-Judge Lynch’s hypothetical. Judge Lynch poses third hypothetical certain might Certainly, possibility support ap- also See id. at [131]. RICO’s domestic war- plication foreign enterprises to conducted rants further careful consideration en banc. rather, concluding application that RICO is domestic or extraterri- both considered in thе United States torial. predicate acts a few ap- allow to be insufficient to RICO

were I Accordingly, respectfully dissent from involving a claim domestically to plied the court’s decision not to rehear this case essentially for- enterprise and provide clarity en banc to needed as to F.3d racketeering. of See 631 eign pattern '(1) applies both extraterri- RICO mat- treatment of the at 32. But Norex’s (2) torially, and the criteria for determin- a confident preclude as to ter is so brief whether a claim is domestic or ing RICO point. on the focus conclusion extraterritorial. event, specify whether en- Norex does in- be viewed pattern should terprise LYNCH, E. Judge, GERARD Circuit alternatively conjunctively, or dependently, dissenting rehearing from the denial of en determining application.11 banc: ambiguous, is not howev- Where Norex join I in Judge Jacobs’s dissent from er, rejection predicate of acts as banc, en I rehearing denial because This application. of RICO’s determinative that the the pan believe tension between of the dis- from its affirmance is evident case, holding in European el’s Com despite allegations missal of RICO claims Nabisco, Inc., munity v. 764 F.3d 129 RJR part acts were predicate that domestic (2d Cir.2014), prior and our decision in racketeering. Industries, pattern Norex Petroleum Ltd. v. Access that confuses at 31. It is RJR Nabisco c., Cir.2010), In exclusively point by relying predi- on join But I should be resolved. do not application. cate acts to determine RICO’s in their criticisms of the other dissenters approach only That is not at odds with banc re panel’s resolution. Because en our Norex and but also with denied, I do not need to view has been already jurisprudence, which as dis- to a conclusion' about the come definitive object cussed holds that the of racketeer- reaches circumstances under which RICO charged to conduct the affairs of a “is outside the occurring conduct enterprise through pattern of racketeer- explained Largely States. reasons ing, predicate not to commit discrete acts.” Hall, however, I am by Judge inclined Pizzonia, United States v. think that the better outcome would be (2d Cir.2009); v. accord United States adopt in this case and view Basciano, 205-06; 599 F.3d at see also patterns applies hold that RICO Russotti, v. 717 F.2d at 33. United States predicate acts committed abroad where violate federal stat predicate those acts Thus, does, indeed, require if Morrison express extraterritorial reach. utes with by ref- to be determined demonstrates, focus, dissent Judge Raggi’s erence to the statute’s' and if dis- As focus, appli- very concept are not RICO’s of “extraterritorial crete as RICO clarify complex en banc how a cation” of a statute such this court needs n Raggi at 139- vexing is a one. See Dissent properly court determines whether teering See Br. filing, operates in the United States. 11. In its amicus the United States urges that RICO’s is on both the enter- focus 7-20. The United Statеs of United States racketeering, prise and the so argue RJR Nabisco does not in favor of the operate these elements can in the alternative acts to use individual domestically if either to allow RICO to application. determine RICO’s enterprise racke- or the overall methods, easily they resolved in and question goals, personnel, a is not and Such presump- continuity reference to the by sloganeering enterprise exhibit because the extraterritoriality emphasized tion has a continuous existence that threatens Bank, in v. National Australia Morrison to involve further such acts. See 18 U.S.C. 247, 255, Ltd., 130 S.Ct. 1961(5); 561 U.S. § H.J. Inc. v. Northwestern Bell (2010). primary prohibi- The L.Ed.2d 535 Co., 229, 240-42, Telephone 492 U.S. here, RICO, in and the one at issue tion (1989). 2893, 106 S.Ct. L.Ed.2d 195 “conduct[ing] ... enter- [an] criminalizes an application Is this “extraterritorial” through pattern ... of prise’s affairs easy question. of Not an RICO? The en- activity.” racketeering 18 U.S.C. terprise question primarily in in foreign, is 1962(c). key § The two elements are 'the membership, goals, sphere its and usual “pattern of racketeer- “enterprise” and operation. pattern racketeering The combination, Which, or what ing.” activity place partially took the United determining critical in these elements is abroad, partially though States and any given application of RICO is portion involved con- “extraterritorial”? Congress expressly duct that has chosen A following hypothetical. Consider the application to reach via the extraterritorial revolutionary group leader of a based of American law. Whether to characterize largely country, in a Eastern in an Middle hypothetical indictment as an “extra- effort to intimidate the United States application territorial of RICO” is an inter- country’s govern- stop supporting esting conceptual question. ment, plots and carries out two crimes: legal question But the actual posed by planting a office bomb near federal build- hypothetical indictment is whether city, resulting an American Congress intended to reach such conduct people, beheading deaths of several and statute, by the Judge as journalist in abducted American the coun- demonstrates, Hall easy ques- is a rather try group primarily where the operates. tion to answer. See Hall Concurrence at captured by The terrorist leader is Ameri- Nothing 124-25. in the definition of “en- forces, can and is indicted in the United terprise” excludes foreign-based associa- violating States for RICO. revolution- tions, groups, corporations, is ary group likely qualifies as an “enter- difficult to believe that intended prise” under of that term in the definition to exclude them. If of a members Mexi- 1961(4). § Both terrorist cartel, Mafia, can drug the Sicilian or a qualify racketeering strikes as one or more foreign-based organization terrorist com- acts: bombing the United States mit a series of violent crimes on U.S. soil murder, chargeable involves arson and clearly that would violate if RICO commit- felonies law of the relevant .under by ted a local state, drug gang, distribution 1961(1)(A), see 18 U.S.C. and the family, New York-based Mafia or the murder of an American abroad is indict all, 2332(a)(1)—a Underground, Weather after it would able under 18 U.S.C. tat s quite be odd to prosecution ute that consider the very only terms can be such acts in the violated United States an “extra- outside RICO, States —which territorial” predi is listed as a RICO and there 1961(1)(G) cate certainly §§ under 18 no reason to U.S.C. believe Con- 2332b(g)(5)(B). Together, very gress these acts did not intend to RICO to such likely “pattern form a simply (entirely ac actions because the Amer- ican) tivity,” since they are related to each other was carried in goals foreign by further the of a enter- committed the United out to States foreign-based same enterprise. prise. course, of suggests Of none an in- if change predi- the outcome one Does RICO, tention apply generally, to to con- part charged that formed cate crime duct committed abroad. If members of a racketeering activity place of took pattern foreign enterprise engage in a pattern of abroad, in violation of a statute that Con- entirely foreign drug murders and distri- (a) gress expressly gave extraterritorial bution, in nothing RICO could make that (b) expressly reach and made a RICO Indeed, activity a crime under law. predicate? I can’t see how it does. How although applying RICO to such conduct Congress’s specifi- can enactment of a law plainly would be an ap- “extraterritoriаl” cally designed protect to Americans statute, of plication we need not even abroad, express incorporation and its presumption against invoke the extraterri- crime, predicate that law into RICO as a toriality to know that application anything constitute other than a clear ex- impermissible, because the definitional pression congressional to apply intent provisions of RICO make clear that Con- crime, that persons who commit gress did not define such conduct as a in furtherance of the affairs of an enter- A pattern RICO violation. of murders of prise, part a pattern racketeering? as Italian by citizens committed members of plain meaning of RICO demands that organized an Italian group Italy crime in By including result. certain crimes with RICO, cannot violate because murder is a extraterritorial application predi- as RICO only predicate “charge- when it is including only some that can be cates— able under state law” or indictable under Congress unequivocal- committed abroad — specific federal statutes. See 18 U.S.C. ly expressed apply its intention that RICO 1961(1)(G). 1961(1)(A), §§ Entirely for- patterns racketeering activity eign activity qualify, nothing does may include such crimes. You call this an any contrary RICO indicates intent to if application “extraterritorial” of RICO foreign criminality extend its reach to of a like, but, you or not the label is similar nature to the domestic conduct cov- properly applied, is no there doubt by ered RICO. To the extent that Norex Congress intended to RICO in that not, holds that RICO does of its own force situation. Nor should that conclusion general, ap- and in have “extraterritorial” if change alleged all the crimes circumstances, plication in such it is of if,

were committed example, for abroad— course correct. revolutionary group planted no bombs sense, indeed, multiple on U.S. soil but carried out In be- RICO does not headings of implicate ambigu- Americans violation of 18 even the extraterritorial 2332(a)(1). long Congress U.S.C. So ities raised most statutes. Most con- expressly extended prohibi- gressional prohibit its criminal statutes conduct face, tions to the in question general conduct terms on their could be incorporated prohibitions those into anyone taken to the world. RICO, Congress example, has determined that such pattern interpreted provision crimes can constitute a Court of the Secu- Presumably Exchange within the definition of rities Act that makes it “unlaw- RICO. any person, directly indirectly, it has done so of such ful for because just any crimes strikes at American interests means or instrumentali- use mails, as much as a of terrorist acts of interstate commerce or of the ty facility any national securities have extraterritorial any or of has classified as RICO employ, use or in con- ... exchange [t]o predicates. or sale of purchase nection with manipulative deceptive or ... security case, I present posture In thе 78j(b). But we device.” See that may need not address all of the issues generally does not Congress know that in working principles. arise out these basic intend, language broad as by using such Nor need I decide how the instant case “any national “any or securities person” resolved, should be or whether Norex was generalized pro- those exchange,” apply to correctly join I in decided. the dissenters place that take outside hibitions to actions that we would do well to convene believing borders, Congress ordinarily our because very questions, en banc to resolve those regulate conduct within its legislates agree reasoning I with that the them pre- that is what primary jurisdiction; deeply are in and result this case ten- applica- extraterritorial sumption reasoning sion with the and result in No- Meng-Lin tion means. Liu v. Siemens rex, holdings those two are (2d Cir.2014). AG, That extent, ultimately irreconcilable. To the it presumption applies to RICO as does to however, that the other dissenters see the statutes, quite explicit other but RICO is panel’s approach to RICO and extraterri- prohibitions apply only patterns that its toriality deeply disturbing, unprece- acts that themselves vio- dented, and inconsistent with I not, late state or federal law. It does respectfully disagree. contrary, To the I example, say person that “no shall conduct any interpretation sug- believe that that enterprise through pat- the affairs of an gests operatives that of a enter- murder,” committing tern of but confines prise cannot be. held accountable under murder, patterns itself to that are a pattern RICO for crimes state, chargeable under the law of a that express violate federal statutes with specific that are indictable under federal reach would astonish the 10(b), law. Unlike RICO is thus not Congress that made such violations RICO susceptible reading even to literalist that place. in the first Should general might foreign- terms up my dissenting Court take col- ers. leagues’ grant invitation to further review case, of this I and trust that it hope will time, however,

At the same Congress not allow the context of this case—a civil exquisitely was clear some acts that suits, many action like civil RICO are committed abroad are might lead some to doubt the wisdom of RICO, under can and thus form a allowing amorphous somewhat statute to racketeering activity. To the extent endlessly private be wielded interests pattern consisting that a of such acts is ways creative it to the in- blind clear RICO, charged ‍‌‌​​‌‌​‌‌‌‌‌​‌​‌‌​​​​​‌‌​​‌​‌​​‌‌‌​‌​‌‌‌​‌​​‌​‌​‍as a violation of I see —to tention of to for- nothing presumption against extra- eign groups patterns terrorist who commit territoriality exempts abroad, may of criminal acts that occur but from It prosecution. therefore seems to express violate American laws with me that nothing there is novel or odd extraterritorial reach. not, about the idea that RICO does general, “apply extraterritorially,” but that may apply to acts committed abroad

where those acts violate statutes that were expressly by Congress

themselves stated

Case Details

Case Name: European Community v. RJR Nabisco, Inc.

Court Name: Court of Appeals for the Second Circuit

Date Published: Apr 13, 2015

Citation: 783 F.3d 123

Docket Number: 11-2475

Court Abbreviation: 2d Cir.