Eurpoean Community v. RJR Nabisco , 783 F.3d 123 ( 2015 )

11-2475
Eurpoean Community v. RJR Nabisco
11-2475
European Community v. RJR Nabisco
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
At a stated term of the United States Court of Appeals
for the Second Circuit, held at the Thurgood Marshall United
States Courthouse, 40 Foley Square, in the City of New York,
on the 13th day of April, two thousand fifteen.
PRESENT: ROBERT A. KATZMANN,
Chief Judge,
DENNIS JACOBS,
JOSÉ A. CABRANES,
ROSEMARY S. POOLER,
REENA RAGGI,
RICHARD C. WESLEY,
PETER W. HALL,
DEBRA ANN LIVINGSTON,
GERARD E. LYNCH,
DENNY CHIN,
RAYMOND J. LOHIER, JR.,
SUSAN L. CARNEY,
CHRISTOPHER F. DRONEY,
Circuit Judges.
- - - - - - - - - - - - - - - - - - - - - -x
EUROPEAN COMMUNITY, acting on its own behalf
and on behalf of the Member States it has power to
represent, KINGDOM OF BELGIUM, REPUBLIC OF
FINLAND, FRENCH REPUBLIC, HELLENIC
REPUBLIC, FEDERAL REPUBLIC OF GERMANY,
ITALIAN REPUBLIC, GRAND DUCHY OF
LUXEMBOURG, KINGDOM OF THE
NETHERLANDS, PORTUGUESE REPUBLIC,
KINGDOM OF SPAIN, individually, KINGDOM OF
DENMARK, CZECH REPUBLIC, REPUBLIC OF
LITHUANIA, REPUBLIC OF SLOVENIA, REPUBLIC
OF MALTA, REPUBLIC OF HUNGARY, REPUBLIC
OF IRELAND, REPUBLIC OF ESTONIA, REPUBLIC
OF BULGARIA, REPUBLIC OF LATVIA, REPUBLIC
OF POLAND, REPUBLIC OF AUSTRIA, KINGDOM
OF SWEDEN, REPUBLIC OF CYPRUS, SLOVAK
REPUBLIC, ROMANIA,
Plaintiffs-Appellants,
- v.- 11-2475
RJR NABISCO, INC., R.J. REYNOLDS TOBACCO
COMPANY, R.J. REYNOLDS TOBACCO
INTERNATIONAL, INC., RJR ACQUISITION
CORP., FKA NABISCO GROUP HOLDINGS CORP.,
RJR NABISCO HOLDINGS CORP., R.J. REYNOLDS
TOBACCO HOLDINGS, INC., NABISCO GROUP
HOLDINGS CORP., R.J. REYNOLDS GLOBAL
PRODUCTS, INC., REYNOLDS AMERICAN INC.,
R.J. REYNOLDS TOBACCO COMPANY, a North
Carolina Corporation,
Defendants-Appellees.
- - - - - - - - - - - - - - - - - - - - -x
For Plaintiffs-
Appellants: John J. Halloran, Jr., John J.
Halloran, Jr., P.C., White Plains,
NY, Kevin A. Malone, Carlos A.
Acevedo, Krupnick, Campbell, Malone,
Buser Slama, Hancock, Liberman P.A.,
Fort Lauderdale, FL.
For Defendants-
Appellees: Gregory G. Katsas, John M. Gore,
Jones Day, Washington, D.C., Mark R.
Seiden, Jones Day, New York, NY.
ORDER
Following disposition of this appeal, an active judge
of the Court requested a poll on whether to rehear the case
en banc. A poll having been conducted and there being no
majority favoring en banc review, rehearing en banc is
hereby DENIED.
Peter W. Hall, Circuit Judge, concurs by opinion in the
denial of rehearing en banc.
Dennis Jacobs, Circuit Judge, joined by José A.
Cabranes, Reena Raggi, Debra Ann Livingston, and Gerard E.
Lynch, dissents by opinion from the denial of rehearing en
banc.
José A. Cabranes, Circuit Judge, joined by Dennis
Jacobs, Reena Raggi, and Debra Ann Livingston, Circuit
Judges, dissents by opinion from the denial of rehearing en
banc.
Reena Raggi, Circuit Judge, joined by Dennis Jacobs,
José A. Cabranes, and Debra Ann Livingston, Circuit Judges,
dissents by opinion from the denial of rehearing en banc.
Gerard E. Lynch, Circuit Judge, dissents by opinion
from the denial of rehearing en banc.
FOR THE COURT:
CATHERINE O’HAGAN WOLFE, CLERK
1 HALL, Circuit Judge:
2 This petition for rehearing in banc challenges the conclusion of the panel, consisting of
3 senior judges Leval and Sack, and me, that the Racketeer Influenced Corrupt Organizations Act
4 (“RICO”), 18 U.S.C. §§ 1961 et seq., applies to foreign conduct when liability is based on
5 “racketeering acts” consisting of violations of predicate statutes which Congress expressly made
6 applicable to foreign conduct. See European Cmty. v. RJR Nabisco, Inc., 764 F.3d 129 (2d Cir.
7 2014). As Judges Leval and Sack, being senior judges, have no vote on whether to grant
8 rehearing in banc, I write independently in support of denial of the petition.
9 In considering the petition for panel rehearing, our panel reexamined our initial view, as
10 well as its compatibility with Morrison v. Nat’l Australia Bank, Ltd., 561 U.S. 247 (2010), and
11 with our court’s ruling in Norex Petroleum Ltd. v. Access Industries, Inc., 631 F.3d 29 (2d Cir.
12 2010), and reaffirmed the soundness of our conclusion.
13 RICO applies when the evidence shows a pattern of “racketeering activity.” 18 U.S.C.
14 §§ 1962, 1964. “Racketeering activity” is defined as “any act . . . indictable under” specified
15 criminal statutes. Id. § 1961(1). The criminal statutes specified are colloquially referred to as
16 RICO “predicates.” As the panel opinion noted, some of the specified predicate statutes
17 expressly provide that extraterritorial conduct is indictable. See RJR Nabisco, 764 F.3d at 136.
18 Many of the predicates that apply to foreign conduct relate to international terrorism. A
19 few weeks after the terrorist attacks of September 11, 2001, Congress passed the USA PATRIOT
20 Act of 2001 (the “Patriot Act”), an anti-terrorism measure, which, among other provisions,
21 amended RICO by adding to its list of predicates nearly 20 antiterrorism statutes that expressly
22 apply to foreign conduct. Pub. L. No. 107-56, § 813, 115 Stat. 272, 382. The Patriot Act did this
1
1 by adding those statutes to RICO’s definition of “racketeering activity” specified in § 1961(1) as
2 a basis of RICO liability.1 18 U.S.C. § 1961(1). The House Report for the Patriot Act states,
3 “[t]he RICO provisions in the bill . . . . enhance the civil and criminal consequences of certain
4 crimes that have been deemed RICO predicates by Congress and provide better investigative and
5 prosecutorial tools to identify and prove crimes.” H.R. Rep. No. 107-236, at 70 (2001). Since
6 2001, Congress has added additional explicitly extraterritorial crimes to RICO, for a total of
7 nearly 30 predicate racketeering acts that expressly apply to foreign conduct, nearly all of them
8 relating to international terrorism directed against United States interests. See, e.g., 18 U.S.C. ''
9 2332g (conduct involving anti-aircraft missile systems); 2339D (terrorist military training).
10 Some of RICO’s predicate statutes indeed apply only to conduct outside the United States. See,
11 e.g., 18 U.S.C. ' 2332 (killing, and attempting to kill, “a national of the United States, while such
12 national is outside the United States” (emphasis added)); 18 U.S.C. § 2423(c) (engaging in illicit
13 sexual conduct in foreign places by a U.S. citizen or permanent resident).
14 The panel opinion concluded that “[b]y incorporating these statutes into RICO as
15 predicate racketeering acts, Congress has clearly communicated its intention that RICO apply to
16 extraterritorial conduct to the extent that extraterritorial violations of those statutes serve as the
17 basis for RICO liability.” RJR Nabisco, 764 F.3d at 137. That conclusion was sound. The
18 RICO statute explicitly states that acts “indictable under” the specified statutes constitute
19 “racketeering activity,” to which RICO liability attaches, and many of these predicate statutes
20 expressly provide that foreign conduct is indictable.
21 This interpretation of RICO is wholly consistent with Morrison. In Morrison, the
1
Prior to the Patriot Act, only a few RICO provisions specified extraterritorial application.
2
1 Supreme Court explained that there is a presumption against construing United States statutes as
2 applying extraterritorially but that the presumption is overcome when the statute clearly
3 manifests a congressional intent that it apply extraterritorially. See Morrison, 561 U.S. at 265.
4 Courts are not to justify extraterritorial application by speculating that Congress would have
5 wanted that had it focused on the question. On the other hand, when Congress, acting within its
6 powers, has explicitly provided for extraterritorial application of a statute, as it has done by
7 incorporating statutes that apply extraterritorially into RICO as predicates, the statute must be
8 interpreted as Congress has directed. The purpose of Morrsion was to bar courts from attributing
9 to Congress an intent that its statutes apply extraterritorially in the absence of a clear expression
10 thereof; it was not to prevent courts from giving effect to Congress’s clearly manifested
11 intentions that certain statutes apply extraterritorially.
12 Finally, the panel’s holding on this point is consistent with Norex. The panel disagreed
13 with the district court’s interpretation of Norex as concluding that RICO could never have
14 extraterritorial application. To the question of whether RICO, in any of its applications, has
15 extraterritorial reach, the Norex opinion devotes two sentences, each of which could have two
16 meanings. The first sentence, derived from our court’s prior opinion in North South Finance
17 Corp. v. Al-Turki, 100 F.3d 1046, 1051 (2d Cir. 1996), states that “the RICO statute is silent as to
18 any extraterritorial application.” The second states that Morrison “forecloses [the Norex
19 plaintiff=s] argument that because a number of RICO’s predicates possess an extraterritorial
20 reach, RICO itself possesses an extraterritorial reach.” Norex, 631 F.3d at 33.2
2
Judge Raggi twice quotes Norex as saying, because “‘RICO is silent as to any
extraterritorial application,’ . . . therefore, ‘it has none.’” See Raggi Dissent at 1; see also id. at
8. This will mislead the reader, although doubtless unintentionally. It is true that the words “it
3
1 The first of these sentences, noting RICO’s silence on extraterritorial application, could
2 mean that the RICO statute does not suggest that it might broadly apply in all of its provisions to
3 extraterritorial conduct. Alternatively, the words of the sentence could also mean that RICO is
4 “silent” as to whether any of its component provisions can ever apply to extraterritorial conduct.
5 The first interpretation seems far more probable. First, if the statement carries the former
6 meaning, it is indisputably correct. The RICO statute is indeed silent as to general
7 extraterritorial application. There are no words in the statute which suggest, or even discuss, the
8 possibility that foreign conduct might be considered violative of RICO, without regard to
9 whether the particular predicate invoked applies to foreign conduct. On the other hand, if given
10 the second meaning, the statement would be either flatly incorrect, or at least misleading. As
11 explained above, RICO incorporates by reference the terms of other statutes. The Act explicitly
12 states that racketeering activity, which serves as a basis of RICO liability, includes any act
13 “indictable under” the incorporated predicate statutes, a number of which expressly provide that
14 foreign conduct is indictable. Whatever ultimate conclusion one might draw, RICO certainly
15 cannot be fairly described as “silent” on the question whether any predicate acts of racketeering
16 can consist of foreign conduct. Furthermore, the sentence about silence, if construed to mean
17 that RICO contains no indication whether any of its predicate acts of racketeering can include
18 foreign conduct, would seem contradicted by the second sentence on the issue, which recognizes
19 that “a number of RICO’s predicates possess an extraterritorial reach.” Norex, 631 F.3d at 33.
has none” appear in the Norex decision. But in uttering those words, Norex was not speaking
about the RICO statute. It was simply quoting Morrison’s framework for deciding whether a
statute has extraterritorial application. Morrison stated (and Norex quoted), “[W]hen a statute
gives no clear indication of an extraterritorial application, it has none.” Norex, 631 F.3d at 32(emphasis added). Norex never said that RICO has no extraterritorial application.
4
1 The second sentence, if taken out of context, could have either of two meanings:
2 (1) In view of Morrison, we reject the plaintiff=s argument that, by providing for
3 extraterritorial application of some of RICO’s predicates, Congress manifested a clear intention
4 that RICO have extraterritorial application in all of its provisions.
5
6 (2) Notwithstanding Congress’s express provision that “racketeering activity” include
7 some clearly specified foreign conduct, Morrison requires that racketeering activity be construed
8 as excluding all foreign conduct.
9
10 The first interpretation is clear, logical, and entirely consistent with Morrison. Under
11 Morrison, the presumption against extraterritorial applicability requires that statutes be
12 understood not to apply extraterritorially absent a clear provision for extraterritorial application.3
13 The fact that Congress made clear provision in the terms of RICO that some of its
14 predicates apply extraterritorially does not manifest a clear congressional intent that its other
15 provisions also apply extraterritorially. With respect to extraterritorial application of these other
16 provisions, RICO would flunk the Morrison test. This is so clear a consequence of Morrison’s
17 rule that one short sentence is entirely sufficient to state the point. It requires no further
18 explanation.
19 On the other hand, if the Norex panel had in mind version (2) when it said that “Morrison
20 . . . forecloses [the plaintiff’s] argument,” one would wonder why the panel came to that
3
Judge Raggi suggests that Morrison’s discussion of Section 30(b) of the Exchange Act
supports her view that RICO can never have extraterritorial application. See Raggi Dissent at 8–
10. In fact, this portion of Morrison’s discussion supports the panel’s interpretation of RICO. In
Morrison, the parties argued that, because one small provision of the Exchange Act could
potentially apply extraterritorially, the entire Act should be read as applying extraterritorially.
See Morrison, 561 U.S. at 263–65. The Morrison court rejected this argument, holding that
“when a statute provides for some extraterritorial application, the presumption against
extraterritoriality operates to limit that provision to its terms.” Morrison, 561 U.S. at 265(emphasis added). In RJR Nabisco, our panel followed precisely this line of reasoning, holding
that where Congress has prescribed extraterritorial application for certain of RICO’s predicates,
it applies extraterritorially “only to [that] extent.” 764 F.3d at 136.
5
1 conclusion. Id. Where Congress expressly provided that acts “indictable” under statutes listed in
2 RICO are “racketeering acts,” which justify RICO liability, and Congress included in that list
3 statutes that expressly provide for extraterritorial application (indeed some that apply only to
4 foreign conduct), Congress did exactly what Morrison requires for extraterritorial application. It
5 manifested a clear intention that RICO apply extraterritorially—to that limited extent. If the
6 Norex opinion meant that, notwithstanding this clear manifestation of congressional intent,
7 Morrison requires that RICO be interpreted as never applying to foreign conduct, one would
8 wonder why the Norex panel reached that conclusion and how it could be justified. The
9 assertion would cry out for further explanation, if indeed any adequate explanation could be
10 found. Notwithstanding the facial ambiguity of the sentence, the brevity of the Norex panel’s
11 treatment of the subject strongly suggests that it meant to convey the simple, noncontroversial
12 proposition expressed in version (1) above, and not the puzzling proposition expressed in version
13 (2).
14 In short, recognizing the potential ambiguity in Norex’s brief discussion of this point, by
15 far the sounder interpretation of that ruling is that RICO’s clear manifestation of intent that some
16 of its provisions apply to foreign conduct permits extraterritorial application of RICO in those
17 situations, but does not justify interpreting every provision of RICO as being extraterritorial.
18 The panel’s ruling in this case was in full agreement with that proposition.
19 Some colleagues are troubled by the prospect of applying RICO to extraterritorial
20 conduct, which they deem unwise. Whether this is wise or unwise is not the court’s business
21 when Congress has legislated clearly on the issue. Congress provided in the RICO statute that
22 acts “indictable under” a list of predicate acts are racketeering acts. That ends our inquiry.
6
1 I therefore concur with the court’s decision to deny rehearing in banc.
7
DENNIS JACOBS, Circuit Judge, joined by JOSÉ A. CABRANES, REENA
RAGGI, DEBRA ANN LIVINGSTON, and GERARD E. LYNCH, Circuit Judges,
dissenting from the denial of rehearing in banc:
I respectfully dissent from denial of rehearing in banc.  The panel opinion
in this appeal is in taut tension with our earlier opinion in Norex Petroleum Ltd.
v. Access Industries, Inc., 631 F.3d 29 (2d Cir. 2010) (per curiam).  The resulting
instability will likely require in banc review to reconcile these precedents, or to
jettison one of them.
Both cases address the extraterritorial application of the Racketeer
Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1961 et seq.
They reach dissonant conclusions as to: (1) whether RICO may apply
extraterritorially, compare Norex, 631 F.3d at 31, with European Cmty. v. RJR
Nabisco, Inc., 764 F.3d 129, 136 (2d Cir. 2014); (2) whether Supreme Court
precedent “forecloses [the] argument that because a number of RICO’s predicate
acts possess an extraterritorial reach, RICO itself possesses an extraterritorial
reach,” Norex, 631 F.3d at 33; compare id., with RJR Nabisco, 764 F.3d at 136; and
(3) the very definition of an extraterritorial application of RICO, namely whether
extraterritoriality turns on the foreign locus of the enterprise or the foreign locus
of the predicate acts, compare Norex 631 F.3d at 31, 33, with RJR Nabisco, 764 F.3d
at 136, 142.
The frequency of RICO litigation in this Circuit all but ensures that district
courts will face vexing questions about this.  Litigation on the fault lines of Norex
and RJR Nabisco is likely to present “a controlling question of law as to which
there is substantial ground for difference of opinion” and whose resolution “may
materially advance the ultimate termination of the litigation.”  28 U.S.C.
§ 1292(b).  Under such conditions, “district courts should not hesitate to certify an
interlocutory appeal.”  Mohawk Indus., Inc. v. Carpenter, 558 U.S. 100, 111
(2009).
2
1 JOSÉ A. CABRANES, Circuit Judge, joined by DENNIS JACOBS, REENA RAGGI, and
2 DEBRA ANN LIVINGSTON, Circuit Judges, dissenting from the order denying rehearing
3 en banc:
4 The question presented in this civil case is whether the RICO statute1 applies
5 extraterritorially.
6 This is an important question, and it has been answered in a novel and artful way by a panel
7 of our Court. Absent review by the Supreme Court, the panel’s interpretation will have a significant
8 and long-term adverse impact on activities abroad that we have heretofore assumed were governed
9 primarily by the laws of the territories where those activities occurred.
10 After a close and considered vote, the en banc court has decided to forgo the possibility of
11 reviewing the panel’s opinion.2 From that regrettable decision I respectfully dissent.
12 If this decision remains undisturbed, the prevailing plaintiffs here, the European Community
13 and its member states,3 will have achieved a pyrrhic victory, and one that the Community’s
14 constituents will have cause to regret in the years ahead. Why? Because its citizens, natural and
15 corporate, are among the likely targets of future RICO actions under the panel’s interpretation of
16 the statute.
17 The panel holds that RICO itself has an extraterritorial reach if and when one of RICO’s
18 predicate statutes has an extraterritorial reach. This reasoning conflates the question of whether RICO
19 applies extraterritorially with whether the statute’s definition of “racketeering activity” includes
20 predicate offenses that can be charged abroad. If RICO were merely an additional criminal—or, as is
21 often the case, civil—consequence for committing predicate offenses, this view might have some
22 merit. But, as Judge Raggi’s compelling dissent makes clear, RICO is not simply designed to pile on
1 18 U.S.C. §§ 1961–1968.
2 Note that “the decision not to convene the en banc court does not necessarily mean that a case
either lacks significance or was correctly decided. Indeed, the contrary may be true.” United States v. Taylor, 752
F.3d 254, 256 (2d Cir. 2014) (Cabranes, J., dissenting from the denial of rehearing en banc) (describing the
special history of en bancs in the Second Circuit and highlighting the various factors that may explain why a
judge would vote in favor or against the convening of an en banc court).
3 The European Community was “a governmental body created through collaboration among the
majority of the nations of Europe.” Appellant’s Br. at 6. Since this lawsuit was originally filed, the European
Community has been incorporated into the European Union. See European Cmty. v. RJR Nabisco, Inc., 764 F.3d
129, 148 (2d Cir. 2014).
1
1 punishment. Rather, the statute prohibits distinct behavior: conducting, controlling, or funding an
2 enterprise through a pattern of racketeering.
3 The panel overlooks the statutory text, going straight to the definition of “racketeering
4 activity,” determining that some predicate acts are punishable abroad, and then splitting plaintiffs’
5 RICO claim in two – one “domestic” RICO claim for those predicate acts that are not punishable
6 abroad and that defendants allegedly committed in the United States, and one “extraterritorial”
7 RICO claim for those predicate acts that are punishable abroad. This reasoning is flatly inconsistent
8 with years of precedent from this Court, and the Supreme Court, that treats RICO as an offense
9 distinct from its predicate acts. Although it is indisputable that Congress intended for certain RICO
10 predicate statutes to apply to actions or events abroad, there is no clear basis for concluding that
11 Congress intended for RICO itself to go along with them. For this reason, the panel’s opinion also
12 may allow an end-run around the revivified presumption against extraterritoriality in Morrison4 and
13 Kiobel.5
14 Indeed, there are many important criminal statutes which expressly make extraterritorial
15 activity indictable but say nothing about the availability of RICO in the circumstances they
16 address—perhaps because legislators were focusing more on the prosecutions of crimes, including
17 some involving acts of terrorism, and not on the treble damages and attorney’s fees available under
18 civil actions for damages. It is thus a red herring at best to suggest that, by incorporating a number
19 of mostly terrorism-related crimes within RICO,6 Congress also intended—without any clear
20 expression of affirmative intent—to give global reach to a whole host of non-terrorism-related7 civil
4 Morrison v. Nat’l Aus. Bank Ltd., 561 U.S. 247 (2010).
5 Kiobel v. Royal Dutch Petroleum Co., 133 S. Ct. 1659 (2013).
The panel’s opinion, Judge Hall’s concurrence in support of the order denying rehearing en banc,
6
and Judge Lynch’s dissent from the order denying rehearing en banc are all very keen to locate RICO’s
extraterritoriality within its terrorism-focused predicates. See RJR Nabisco, 764 F.3d at 136 (listing a number of
RICO’s predicate statutes focused on terrorism offenses); Hall Concurrence at 1 (“Many of the predicates
that apply to foreign conduct relate to international terrorism.”); Lynch Dissent at 1-2 (posing a hypothetical
scenario involving a “revolutionary group based largely in a Middle Eastern country” that “plant[s] a bomb
near a federal office building” and “behead[s] an abducted American journalist”).
Indeed, RICO incorporates many predicates that are quite removed from the dark world of
7
international terrorism. See 18 U.S.C. § 1961(1) (incorporating statutes that outlaw trafficking in counterfeit
copyrighted work (18 U.S.C. § 2319), embezzlement from pension and welfare funds (18 U.S.C. § 664), and
other activities that have little connection to terrorism).
2
1 claims.8 This is a case of Congress giving an inch and the panel taking a mile. The dubiousness of the
2 panel’s stretched reasoning—and its direct tension with Morrison and Kiobel—is only further
3 reinforced by the fact that a plaintiff need not actually prove any of the extraterritorial predicates in
4 order to sustain a civil claim for RICO activities alleged to have occurred entirely outside the United
5 States.9
6 To summarize: After more than four decades of experience with this complicated statute, a
7 panel of our Court has discovered and announced a new, and potentially far-reaching, judicial
8 interpretation of that statute—one that finds little support in the history of the statute, its
9 implementation, or the precedents of the Supreme Court; that will encourage a new litigation
10 industry exposing business activities abroad to civil claims of “racketeering”;10 and that will invite
11 our courts to adjudicate civil RICO claims grounded on extraterritorial activities anywhere in the
12 world.
8For example, plaintiffs in this Circuit, and others, have sought to use civil RICO claims to challenge
supposedly unlawful business practices conducted in foreign countries by alleging, as a predicate act, that one
aspect of the scheme involved laundering money through the United States in violation of 18 U.S.C. § 1951.
See, e.g., Hourani v. Mirtchev, 943 F. Supp. 2d 159, 168 (D.D.C. 2013) (dismissing RICO claim that arose out of
“extortion in Kazakhstan by a Kazakh actor of Plaintiffs’ Kazakhstan-based assets”); Republic of Iraq v. ABB AG,
920 F. Supp. 2d 517 (S.D.N.Y. 2013) (dismissing RICO claim that related to alleged mismanagement in Iraq
of the United Nations Oil-for-Food program); Cedeno v. Intech Grp., Inc., 733 F. Supp. 2d 471 (S.D.N.Y. 2010)
(dismissing RICO claim that alleged, inter alia, that Venezuelan officials and entities damaged a company
incorporated in the British Virgin Islands). The panel in RJR Nabisco, which identifies money laundering as a
predicate act that extends RICO extraterritorially, welcomes such claims into federal court. See 764 F.3d at
139–40.
9 It is also worth noting that the United States, in its amicus brief, does not adopt the predicate-centric
view of the panel. Needless to say, they also do not invoke the panel’s view that RICO’s criminal predicates
extend the extraterritorial jurisdiction of the statute for non-terrorism-related civil claims. See Brief of the
United States 9–20.
See Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 529-30 (1985) (Powell, J., dissenting) (lamenting the
10
expansion of RICO to include civil racketeering charges “brought—in the unfettered discretion of private
litigants—in federal court against legitimate businesses seeking treble damages in ordinary fraud and contract
cases”).
3
REENA  RAGGI,  Circuit  Judge,  joined  by  DENNIS  JACOBS,  JOSÉ  A.  CABRANES,  and
DEBRA  ANN  LIVINGSTON, Circuit Judges, dissenting from the denial of rehearing
en banc:
Since  Morrison  v.  National  Australia  Bank  Ltd.,  561  U.S.  247  (2010)
(“Morrison”),  courts  in  this  circuit  and  around  the  nation  uniformly  have  held
that the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C.
§  1961  et  seq.,  does  not  apply  extraterritorially.    These  courts  have  sometimes
differed  in  how  they  determined  whether  a  particular  RICO  application  was
domestic or extraterritorial, but their underlying assumption has been consistent:
“RICO  is  silent  as  to  any  extraterritorial  application”  and,  therefore,  “it  has
none.”  Norex Petroleum Ltd. v. Access Indus., Inc., 631 F.3d 29, 33 (2d Cir. 2010)
(“Norex”) (internal quotation marks omitted).1
1  See  United  States  v.  Chao  Fan  Xu,  706  F.3d  965,  974–75  (9th  Cir.  2013)
(recognizing presumption that RICO does not apply extraterritorially); Hourani
v.  Mirtchev,  943  F.  Supp.  2d  159  (D.D.C.  2013);  In  re  LIBOR‐Based  Fin.
Instruments  Antitrust  Litig.,  935  F.  Supp.  2d  666  (S.D.N.Y.  2013);  Adhikari  v.
Daoud & Partners, No. 09 Civ. 1237, 2013 WL 4511354 (S.D. Tex. Aug. 23, 2013);
Petroleos Mexicanos v. SK Eng’g & Const. Co., No. 12 Civ. 9070 (LLS), 2013 WL
3936191 (S.D.N.Y. July 30, 2013); Republic of Iraq v. ABB AG, 920 F. Supp. 2d 517(S.D.N.Y.  2013);  Tymoshenko  v.  Firtash,  No.  11  Civ.  2794  (KMW),  2013  WL
1234821 (S.D.N.Y. Mar. 26, 2013); Mitsui O.S.K. Lines, Ltd. v. Seamaster Logistics,
Inc., 871 F. Supp. 2d 933 (N.D. Cal. 2012); Aluminum Bahrain B.S.C. v. Alcoa Inc.,
No. 8‐299, 2012 WL 2093997 (W.D. Pa. June 11, 2012); Chevron Corp. v. Donziger,
871 F. Supp. 2d 229 (S.D.N.Y. 2012); Sorota v. Sosa, 842 F. Supp. 2d 1345 (S.D. Fla.
2012);  In  re  Toyota  Motor  Corp.,  785  F.  Supp.  2d  883  (C.D.  Cal.  2011);  United
1
In this civil case, a panel of the court untethers RICO from its mooring on
United  States  shores  and  concludes,  for  the  first  time,  that  the  statute  reaches
overseas—even to a foreign enterprise conducted through an essentially foreign
pattern  of  racketeering—so  long  as  one  predicate  act  is  alleged  that  references
conduct  that  could  be  prosecuted  under  a  criminal  statute  that  itself  reaches
extraterritorially.  See European Cmty. v. RJR Nabisco, Inc., 764 F.3d 129, 136–37
(2d Cir. 2014) (“RJR Nabisco”).2  That same panel concludes that whether a RICO
claim is domestic or extraterritorial depends not on the locus of the enterprise or
States  v.  Philip  Morris  USA,  Inc.,  783  F.  Supp.  2d  23  (D.D.C.  2011);  Cedeno  v.
Intech Grp., Inc., 733 F. Supp. 2d 471 (S.D.N.Y. 2010).
2 As summarized by the RJR Nabisco panel, the racketeering scheme here at issue
involved  a  multi‐step  process  beginning  with  the  smuggling  of  narcotics  into
Europe  by  Colombian  and  Russian  criminal  organizations,  which  “laundered”
their euro proceeds through money brokers.  Those brokers then sold the euros
at  a  discount  to  cigarette  importers  who  used  the  money  to  purchase  RJR’s
cigarettes  from  wholesalers.    The  complaint  alleges  that  RJR  directed  and
controlled this money‐laundering scheme by, inter alia, concealing the identity of
cigarette  purchasers,  shipping  cigarettes  through  Panama  to  shield  the
transactions  from  scrutiny,  and  bribing  Colombian  border  guards  in  order  to
allow  its  employees  to  enter  the  country  illegally  to  receive  payments  for
cigarettes and then to travel to Venezuela, from where funds were wired to RJR
Nabisco  accounts  in  the  United  States.    See  RJR  Nabisco,  764  F.3d  at  135.    In
addition  to  extraterritorially  proscribed  money  laundering,  see  18  U.S.C.
§ 1956(f),  the  complaint  charges  RJR  Nabisco  with  the  predicate  extraterritorial
crime  of  providing  material  support  for  terrorism  insofar  as  some  cigarettes
acquired in the described scheme were sold in Iraq to or for the benefit of various
terrorist groups.  See Second Am. Compl. ¶¶ 75–83; 18 U.S.C. § 2339B(d)(2).
2
the  pattern  of  racketeering  (or  on  some  relationship  between  the  two),  but
instead  on  the  location  of  particular  predicate  acts.    See  id.  at  140–41.    In  so
holding,  the  panel  rejects  the district  court’s determination  that  RICO’s  focus  is
the enterprise, that the locus of the enterprise determines whether RICO is being
applied  domestically  or  extraterritorially,  and  that  RICO  has  no  extraterritorial
application to foreign enterprises.  See European Cmty. v. RJR Nabisco, Inc., No.
02 Civ. 5771 (NGG), 2011 WL 843957, at *4–7 (E.D.N.Y. Mar. 8, 2011).
RJR Nabisco has moved for this court to rehear the case en banc.  I vote to
grant  that  review  because,  like  a  number  of  my  colleagues,  I  think  the  panel’s
treatment  of  RICO’s  extraterritorial  application  conflicts  with  controlling
precedent,  specifically,  (1)  the  Supreme  Court’s  holding  in  Morrison,  which
mandates a presumption against the extraterritorial application of United States
statutes unless Congress clearly expresses an affirmative intent to have a statute
reach abroad; and (2) our holding in Norex (relying on Morrison) that RICO does
not apply extraterritorially even though some of its predicate acts are crimes that
could be prosecuted extraterritorially.
My  concern  with  the  panel’s  reliance  on  individual  predicate  acts  to
support RICO’s extraterritorial reach extends also to its reliance on predicate acts
3
to  determine  when  RICO  is  being  applied  domestically  and  extraterritorially.
Morrison used the “focus” of  a statute to determine its application.  561 U.S. at
266.  Precedent emphasizes that RICO’s “focus” is not the alleged predicate acts,
but  the  relationship  between  a  pattern  of  racketeering  (demonstrated  by
predicate acts) and an identified enterprise.  See, e.g., United States v. Basciano,
599  F.3d  184,  205–06  (2d  Cir.  2010);  see  also  United  States  v.  Chao  Fan  Xu,  706
F.3d  965,  975  (9th  Cir.  2013)  (collecting  cases  identifying  either  “enterprise”  or
“pattern  of  racketeering”  as  RICO’s  focus).    Nor  can  the  RJR  Nabisco  panel
suggest otherwise by characterizing RICO as an aggravating statute that simply
adds new consequences to the predicate offenses.  See RJR Nabisco, 764 F.3d at
135.    That  premise,  from  which  the  rest  of  the  panel’s  analysis  flows,  is  also  at
odds  with  precedent.    Successive  prosecutions  for  greater  and  lesser  included
offenses  implicate  double  jeopardy.    See  Brown  v.  Ohio,  432  U.S.  161,  167–69
(1977).  But prosecutions for both RICO and predicate acts of racketeering do not.
See United States v. Basciano, 599 F.3d at 205–06.
In light of these concerns, this court needs to give further consideration to
two  issues:  (1)  whether  RICO  applies  extraterritorially,  and  (2)  the  criteria  for
determining  whether  a  RICO  claim  is  domestic  or  extraterritorial.    Insofar  as  a
4
majority  of  the  active  members  of  the  court  decline  to  convene  en  banc  for  this
purpose, I respectfully dissent.
1.    The Extraterritoriality Holdings in Morrison and Norex
To  explain  how  the  panel  decision  conflicts  with  controlling
extraterritoriality precedent—both generally, as stated by the Supreme Court in
Morrison,  and  specifically,  as  applied  to  RICO  by  this  court  in  Norex—it  is
necessary briefly to discuss that precedent.
In Morrison, the Supreme Court reaffirmed a strong presumption against
the  extraterritorial  application  of  any  United  States  statute  “unless  there  is  the
affirmative  intention  of  the  Congress  clearly  expressed  to  give  a  statute
extraterritorial  effect.”  561  U.S.  at  255  (internal  quotation  marks  omitted).
Morrison found no such clear expression of affirmative intent in Section 10(b) of
the  Securities  Exchange  Act  of  1934,  even  though  the  statute’s  prohibition  of
fraud “in connection with the purchase or sale of any security” referenced means
or  instrumentalities  of  interstate  commerce,  which  by  definition  includes
commerce  with  foreign  countries.    See  15  U.S.C.  §  78j(b);  id.  §  78c(a)(17).    In  so
holding, the Supreme Court specifically rejected the “conduct” and “effects” tests
developed  by  this  court  to  “discern”  when  Congress  would  have  wanted  a
5
statute, otherwise “silent as to . .  . extraterritorial application,” to reach abroad.
See Morrison, 561 U.S. at 255–61 (discussing and rejecting that approach in favor
of  application  of  presumption  against  extraterritoriality  “in  all  cases”).    To  be
sure,  Morrison  noted  that  the  presumption  against  extraterritoriality  is  not  a
clear  statement  rule.    In  short,  it  does  not  demand  that  a  statute  expressly  say
“this  law  applies  abroad”;  “context  can  be  consulted  as  well.”    Id.  at  265.3    But
Morrison  emphasized  that,  whatever  the  purported  indicator  of
extraterritoriality,  it  must  clearly  and  affirmatively  signal  Congress’s  intent  for
the  statute  to  reach  outside  this  country’s  borders.    See  id.    Statutory
constructions  that  are  merely  “possible  .  .  .  do  not  override  the  presumption
against extraterritoriality.”  Id. at 264.4
3   I  understand  this  to  mean  statutory  context,  not  legislative  history,  because  if
Congress’s intent remains uncertain after all canons of construction are applied,
see generally Cohen v. JP Morgan Chase & Co., 498 F.3d 111, 116 (2d Cir. 2007)
(allowing  consideration  of  legislative  history  only  in  those  circumstances),
Congress can hardly be said to have clearly expressed its affirmative intent for a
statute to reach extraterritorially.
4 In fact, Congress is generally explicit in stating its intent for a statute to reach
extraterritorially.    The  money  laundering  and  material  support  predicates
alleged  here  are  proscribed  by  criminal  statutes  that  explicitly  provide  for
extraterritoriality.  As to money laundering, Congress has stated,
There  is  extraterritorial  jurisdiction  over  the  conduct  prohibited  by
this section if—(1) the conduct is by a United States citizen or, in the
6
As  this  court  has  long  recognized,  the  “RICO  statute  is  silent  as  to  any
extraterritorial application.”  North South Fin. Corp. v. Al‐Turki, 100 F.3d 1046,
case of a non‐United States citizen, the conduct occurs in part in the
United States; and (2) the transaction or series of related transactions
involves  funds  or  monetary  instruments  of  a  value  exceeding
$10,000.
18  U.S.C.  §  1956(f).    As  to  material  support  for  terrorism,  Congress  has  stated,
“There is extraterritorial Federal jurisdiction over an offense under this section.”
Id. § 2339B(d)(2).
Dozens  of  other  statutes  are  similarly  explicit.    See,  e.g.,  id.  §  1596
(authorizing  “extra‐territorial  jurisdiction”  over  any  human  trafficking  offense
under  specified  statutory  sections  if  offender  is  United  States  national,
permanent  resident  alien,  or  present  in  United  States);  21  U.S.C.  § 959  (stating
that  prohibition  on  manufacture  or  distribution  of  controlled  substances  with
intent  to  import  “is  intended  to  reach  acts  of  manufacture  or  distribution
committed outside the territorial jurisdiction of the United States”).
The  intended  extraterritorial  application  of  other  statutes  is  made  clear
from context: they proscribe only conduct occurring outside this country.  See 18
U.S.C. § 1119 (stating that United States national who “kills or attempts to kill a
national of the United States while such national is outside the United States but
within the jurisdiction of another country” is subject to criminal penalties as if act
had been committed within special maritime and territorial jurisdiction of United
States);  id.  §  1204  (prohibiting  retention  of  “child  (who  has  been  in  the  United
States)  outside  the  United  States  with  intent  to  obstruct  the  lawful  exercise  of
parental rights”).
In  all  these  circumstances,  courts  need  not  engage  in  “divining  what
Congress would have wanted if it had thought of the situation before the court,”
an exercise prohibited by Morrison, 561 U.S. at 261, because Congress has made
its extraterritorial intent clear.  The RICO statute, however, does not admit such a
conclusion.
7
1051 (2d Cir. 1996) (emphasis added); see also United States v. Chao Fan Xu, 706
F.3d  at  974  [9th  Cir.]  (same).    Nevertheless,  before  Morrison,  we  had  borrowed
the  conduct  and  effects  tests  from  our  securities  and  antitrust  jurisprudence  to
allow  RICO  to  reach  extraterritorially  in  some  circumstances.    See  North  South
Fin.  Corp.  v.  Al‐Turki,  100  F.3d  at  1051–52.    In  Norex,  however,  we
acknowledged  that  Morrison  abrogated  these  tests,  mandating  both  a  generally
applicable  presumption  and  “a  bright‐line  rule:  absent  a  clear  Congressional
expression of a statute’s extraterritorial application, a statute lacks extraterritorial
reach.”  Norex, 631 F.3d at 32.  Applying this rule to RICO, Norex identified no
clear  expression  of  congressional  intent  for  extraterritorial  application.    Indeed,
Norex reiterated this court’s earlier categorical conclusion that the RICO statute
is  “‘silent  as  to  any  extraterritorial  application,’”  id.  (quoting  North  South  Fin.
Corp. v. Al‐Turki, 100 F.3d at 1051, and declining to treat statement as dictum),
and concluded therefrom that “‘it has none,’” id. (quoting Morrison, 561 U.S. at
255).5
5  Judge  Hall,  concurring  in  the  denial  of  rehearing  en  banc,  submits  that  this
description of Norex is misleading because “Norex never said that RICO has no
extraterritorial application.”  Hall, J., Op. Concurring in Denial of Reh’g En Banc,
ante at [3–4 n.2].  Perhaps not in haec verba.  But I respectfully submit that is the
conclusion  fairly  derived  from  Norex’s  (1)  quotation  of  Morrison’s  rule  that
“‘[w]hen  a  statute  gives  no  clear  indication  of  an  extraterritorial  application,  it
8
Norex  then  proceeded  to  hold  that  Morrison  defeated  the  argument  that,
just “because a number of RICO’s predicate acts possess an extraterritorial reach,
RICO  itself  possesses  an  extraterritorial  reach.”    Id.  at  33.    In  so  ruling,  Norex
cited to Morrison’s discussion of Section 30(b) of the Exchange Act, see 15 U.S.C.
§ 78dd(b) (stating that Act and attending rules and regulations “shall not apply
to  any  person  insofar  as  he  transacts  a  business  in  securities  without  the
jurisdiction  of  the  United  States”  unless  he  does  so  in  violation  of  regulations
promulgated  “to  prevent  .  .  .  evasion”  of  Act  (emphasis  added)).    The  Solicitor
General  had  argued  that  the  exemption  would  have  no  function  if  the  Act  did
not apply in the first instance to securities transactions abroad.  See Morrison, 561
U.S.  at  264.    While  acknowledging  that  the  urged  construction  was  “possible,”
the  Supreme  Court  concluded  that  such  a  possibility  was  insufficient  to
overcome  the  presumption  against  extraterritoriality.    See  id.  (observing  that  it
would  be  “odd  for  Congress  to  indicate  the  extraterritorial  application  of  the
whole Exchange Act by means of a provision imposing a condition precedent to
its  application  abroad”  or  by  limiting  “enabling  regulations  .  .  .  to  those
has none,” Norex, 631 F.3d at 32 (quoting Morrison, 561 U.S. at 255), and (2) its
immediately  following  reiteration  that  RICO “‘is  silent  as  to  any  extraterritorial
application,’” id. (quoting North South Fin. Corp. v. Al‐Turki, 100 F.3d at 1051).
Silence is hardly a clear indicator.
9
preventing ‘evasion’ of the Act, rather than all those preventing ‘violation,’” and
concluding  that  provision  was  “directed  at  actions  abroad  that  might  conceal  a
domestic violation or might cause what would otherwise be a domestic violation
to escape on a technicality”).  Indeed, the Supreme Court ruled that, even when a
statute  clearly  “provides  for  some  extraterritorial  application,”  as  in  the  case  of
Section  30(a),  15  U.S.C.  §  78dd(a),  “the  presumption  against  extraterritoriality
operates to limit that provision to its terms.”  Morrison, 561 U.S. at 265.6
Norex’s  specific  reference  to  this  last  quoted  excerpt  from  Morrison,  see
631  F.3d  at  32,  together  with  its  reiteration  of  RICO’s  silence  “as  to  any
extraterritorial  application,”  id.  (internal  quotation  marks  omitted),  signal  that
the extraterritorial reach of RICO’s predicate acts must also be limited “to [their]
terms.”    The  terms  of  the  extraterritorial  crimes  identified  as  RICO  predicates
authorize  extraterritorial  jurisdiction  for  prosecutions  under  the  referenced
proscribing criminal statutes, not for RICO claims alleging such predicates.
6  By  its  terms,  Section  30(a)  expressly  reaches  certain  extraterritorial  securities
transactions, notably, when the issuer has prescribed ties to the United States and
the  defendant  broker  or  dealer  acts  in  contravention  of  SEC  rules  and
regulations.  Thus, the Supreme Court’s treatment of Section 30(a)—limiting the
extraterritorial reach of that provision to its terms—should not be conflated with
its rejection of the argument that Section 30(b) only made sense if the Exchange
Act applied extraterritorially.  See Morrison, 561 U.S. at 263–65.
10
To conclude otherwise, the RJR Nabisco panel must read Norex narrowly
to hold only that the inclusion of extraterritorial crimes in RICO’s list of predicate
acts does not clearly signal Congress’s intent for RICO to reach “extraterritorially
in  all  of  its  applications.”    RJR  Nabisco,  764  F.3d  at  136  (emphasis  in  original).
The  panel  pronounces  it  error  to  interpret  Norex  to  hold  “that  RICO  can  never
have extraterritorial reach in any of its applications.”  Id.  (emphasis in original).
Thus  freed  from  Norex’s  categorical  pronouncement  that  “RICO  is  silent  as  to
any  extraterritorial  application,”  631  F.3d  at  32  (internal  quotation  marks
omitted; emphasis added), the panel concludes that Congress did indeed clearly
express  its  affirmative  intent  to  have  RICO  reach  extraterritorially  when  a
claim—including  a  civil  claim—alleges  a  pattern  of  racketeering  involving
predicate  acts  proscribed  by  criminal  statutes  with  extraterritorial  reach:  “By
incorporating  these  [extraterritorially  reaching  criminal]  statutes  into  RICO  as
predicate racketeering acts, Congress has clearly communicated its intention that
RICO apply to extraterritorial conduct to the extent that extraterritorial violations
of those statutes serve as the basis for RICO liability.”  RJR Nabisco, 764 F.3d at
137.  I am not persuaded by this analysis and, thus, think we need to rehear this
case en banc.
11
First, the Norex decision is not so easily cabined as the RJR Nabisco panel
suggests.  The complaint in Norex alleged predicate acts of money laundering by
United  States  citizens  in  amounts  exceeding  $10,000.7    Such  conduct,  like  the
money  laundering  at  issue  in  RJR  Nabisco,  is  specifically  proscribed
extraterritorially.    See  18  U.S.C.  §  1956(a),  (f).    Thus,  Norex’s  rejection  of  RICO
extraterritoriality  is  not  factually  distinguishable  from  this  case  so  as  to  signal
only a general rule not applicable when a plaintiff pleads extraterritorial crimes
as RICO predicates.
Second, and in any event, Norex and Morrison do not permit this court to
locate  a  clear  expression  of  RICO’s  extraterritoriality  in  pleaded  predicates  that
are  themselves  extraterritorial  crimes.    The  RJR  Nabisco  panel  justifies  that
conclusion by observing that certain RICO predicates reference crimes that apply
only to extraterritorial conduct.  See RJR Nabisco, 764 F.3d at 136 (citing 18 U.S.C.
§  2332(a)  (prohibiting  killing  United  States  national  “while  such  national  is
outside  the  United  States”),  and  id.  §  2423(c)  (prohibiting  “engaging  in  illicit
sexual  conduct  in  foreign  places”)).    The  panel  finds  it  “hard  to  imagine  why
Congress  would  incorporate  these  statutes  as  RICO  predicates  if  RICO  could
7 See First Am. Compl. ¶¶ 5–11, 168–70, 182–234, 304–16, J.A. 5579–81, 5556–57,
5559–68, 5579–81, Norex Petroleum Ltd. v. Access Indus., Inc., No. 07‐4553‐cv (2d
Cir. filed Jan. 9, 2008).
12
never  have  extraterritorial  application.”    Id.  at  136  (emphasis  in  original).
Morrison, however, effectively declined to recognize such speculative reasoning
as  a  substitute  for  Congress’s  clear  expression  of  affirmative  intent  when  it
rejected the Solicitor General’s argument that an exception to extraterritoriality in
the  Exchange  Act  made  sense  only  if  the  statute  applied  extraterritorially.    See
561 U.S. at 263–65.
In  fact,  it  is  not  hard  to  imagine  why  Congress  would  have  included
exclusively  extraterritorial  crimes  in  the  list  of  RICO  predicates  without
necessarily  intending  to  extend  RICO’s  own  reach  extraterritorially.    Domestic
enterprises  can  be  conducted  through  patterns  of  racketeering  manifested  by
foreign as well as domestic acts.  For example, a domestic crime syndicate might
be conducted through a pattern of racketeering characterized mostly by domestic
drug trafficking and money laundering, but with its continuation enabled by the
murder  of  an  American  rival  trafficker  while  the  rival  was  outside  the  United
States.  Congress could well have determined that prosecutors should be allowed
to  prove  such  an  extraterritorial  murder  as  a  racketeering  predicate  in  an
essentially  domestic  pattern  of  racketeering  to  demonstrate  the  intended
continuity  of  the  pattern  through  which  the  domestic  enterprise  would  be
13
conducted.    See  generally  H.J.  Inc.  v.  Nw.  Bell  Tel.  Co.,  492  U.S.  229,  239–41
(1989)  (discussing  relatedness  and  continuity  requirements  of  racketeering
pattern).
Similarly,  a  foreign  terrorist  organization  might  engage  in  a  pattern  of
racketeering  consisting  primarily  of  attacks  executed  in  the  United  States,  but
financed  with  funds  collected  abroad.    See  18  U.S.C.  § 2339C(a),  (b)(2)(C)(ii).
Congress  could  have  determined  that  prosecutors  seeking  to  prove  the
relationship of the essentially domestic pattern to the foreign enterprise, as well
as the means for ensuring continuity, should be allowed to prove such criminal
extraterritorial financing.8
What is not clear from the inclusion of extraterritorially reaching crimes in
the  list  of  RICO  predicates,  however,  is  Congress’s  affirmative  intent  further  to
extend RICO’s reach to foreign enterprises conducted through essentially foreign
patterns  of  racketeering  whenever  extraterritorial  crimes  are  alleged  predicate
acts.  The panel submits that such a construction best ensures that “a defendant
8  This  second  hypothetical  assumes  that  RICO  can  apply  domestically  to  a
foreign enterprise engaged in a pattern of racketeering within the United States.
The  law  on  this  point  is  not  settled,  as  discussed  infra  at  [21–27].    The  point
warrants  our  consideration  en  banc  particularly  if,  as  I  explain  in  that  same
discussion, RICO’s domestic or extraterritorial application cannot be determined
by reference  to  individual  predicate acts,  which  are  not  the statute’s  focus.    See
Morrison, 561 U.S. at 267; United States v. Basciano, 599 F.3d at 205–06.
14
associated  with  a  foreign  enterprise”  is  not  permitted  “to  escape  liability  for
conduct  that  indisputably  violates  a  RICO  predicate,”  citing  as  an  example  the
killing  of  a  United  States  national  abroad,  conduct  made  criminal  by  18  U.S.C.
§ 2332.  RJR Nabisco, 764 F.3d at 138.  The concern is unwarranted.  The United
States  can  always  prosecute  persons  for  such  extraterritorial  homicides  directly
under  § 2332.    Indeed,  it  has  successfully  done  so.    See,  e.g.,  In  re  Terrorist
Bombings of U.S. Embassies in E. Afr., 552 F.3d 93, 107 (2d Cir. 2008) (upholding,
inter  alia,  convictions  for  conspiracy  to  murder  U.S.  nationals  in  violation  of
§ 2332).    Moreover,  the  maximum  punishment  a  defendant  would  face  under
§ 2332—death—is  more,  not  less,  severe  than  the  maximum  life  sentence  he
would face if convicted of violating RICO with a § 2332 predicate.  Compare 18
U.S.C. § 2232, with id. § 1963(a).
Thus,  I  respectfully  submit  that  it  raises  a  false  alarm  to  suggest  that
prosecutors will be thwarted in bringing terrorists to justice unless we recognize
RICO  to  extend  extraterritorially  to  foreign  enterprises  conducted  through
foreign  patterns  of  racketeering  upon  the  pleading  of  any  extraterritorial‐crime
predicate.    Rather,  it  is  civil  litigants,  such  as  plaintiffs  here,  who  need  such  a
15
ruling to pursue treble damages in United States courts for foreign racketeering
injuries.9
It  is  particularly  difficult,  however,  to  locate  a  clear  expression  of
affirmative congressional intent for civil RICO claims to reach extraterritorially in
the  inclusion  of  extraterritorial  crimes  in  RICO’s  list  of  predicates.    By  their
9   In  focusing  on  terrorism  hypotheticals,  some  of  my  colleagues  reference  the
legislative  objectives  of  the  USA  PATRIOT  Act,  which  added  certain
extraterritorial  terrorism  crimes  to  RICO’s  list  of  predicates.    See  Hall,  J.,  Op.
Concurring  in  Denial  of  Reh’g  En  Banc,  ante  at  [1–2];  Lynch,  J.,  Op.  Dissenting
from  Denial  of  Reh’g  En  Banc,  post  at  [1–3].    For  reasons  discussed  supra  at
[6 n.3],  I  do  not  think  Morrison  admits  consideration  of  such  extra‐textual
sources in applying the presumption against extraterritoriality.
Furthermore, the cited references indicate only Congress’s intent to allow
RICO  to  be  used  against  terrorists.    They  say  nothing  about  whether  that
application can be extraterritorial as well as domestic.  Indeed, the 9/11 terrorist
attacks  that  prompted  the  USA  PATRIOT  Act  involved  murderous  activity
within the United States by a domestic cell of terrorists affiliated with a foreign
organization.
In  any  event,  RJR  Nabisco’s  predicate‐based  analysis  is  not  limited  to
terrorism  crimes  but  reaches  the  range  of  extraterritorial  crimes  listed  as  RICO
predicates.    For  example,  Congress  included  in  that  list  18  U.S.C.  § 2423(c)
(prohibiting  commercial  sex  abroad  with  persons  younger  than  18).    Does  that
express  its  clear  intent  for  RICO  to  apply  extraterritorially  to  a  bordello
enterprise  in  Thailand  that  secures  underage  prostitutes  for  American  travelers
to that country?  The mere possibility that Congress’s intent could have reached
that far is not enough to override the presumption against extraterritoriality.  See
Morrison,  561  U.S.  at  264.    Such  caution  is  all  the  more  warranted  when  RJR
Nabisco’s reasoning is applied to a civil RICO claim, for reasons I now discuss in
text.
16
terms, the listed extraterritorial statutes authorize only criminal proceedings, not
private actions.  Victims of such crimes may be awarded restitution as part of a
defendant’s sentence or may be allowed to petition the government for shares of
forfeited proceeds.  See 18 U.S.C. §§ 3663, 3663A; 28 C.F.R. § 9.1 et seq.  But the
listed  extraterritorial  statutes—and  specifically  the  money  laundering  and
material  support  statutes  here  at  issue—themselves  afford  private  persons  no
civil  causes  of  action.    Thus,  while  the  RJR  Nabisco  panel  purports  to  be
recognizing  RICO  extraterritoriality  only  to  the  extent  “liability  or  guilt  could
attach  to  extraterritorial  conduct  under  the  relevant  RICO  predicate,”  RJR
Nabisco,  764  F.3d  at  136,  it  in  fact  moves  RICO  well  beyond  the  referenced
predicate  in  concluding  that  a  plaintiff  who  pleads  extraterritorial‐crime
predicates can pursue a civil RICO claim for treble damages, although Congress
provided no civil claim in the predicate criminal statute.
Might  Congress  have  approved  such  an  extension  of  RICO  if  it  had
considered such a circumstance?  Possibly.  But Morrison does not permit courts
to  apply  statutes  extraterritorially  by  “divining  what  Congress  would  have
wanted if it had thought of the situation before the court.”  561 U.S. at 261.  No
more does it permit the possibility of such congressional intent to overcome the
17
presumption against extraterritoriality.  See id. at 264.  Only a clear expression of
Congress’s affirmative intent that a statute reach extraterritorially can clear that
hurdle.  See id.; accord Norex, 631 F.3d at 32.
For the reasons stated, I do not think Morrison and Norex permit our court
to  identify  such  a  clear  expression  of  affirmative  intent  with  respect  to  the  civil
RICO claim here at issue.  Accordingly, the court should rehear this case en banc
to  ensure  a  RICO  extraterritoriality  determination  consistent  with  these
precedents.
2.  The Panel Assigns RICO Predicates a Greater Role than Warranted Under
RICO Jurisprudence
The  panel’s  decision  to  ground  RICO’s  extraterritorial  reach  in  the
pleading of certain predicate acts also raises concerns under RICO jurisprudence.
It  has  long  been  understood  that  the  conduct  proscribed  by  RICO  is  not  the
individual predicate acts but, rather, the overall pattern of racketeering activity.
See,  e.g.,  United  States  v.  Basciano,  599  F.3d  at  205–06  (“[I]t  is  the  pattern  of
racketeering  activity,  not  the  predicates,  that  is  punished  by  a  racketeering
conviction.”); see generally Agency Holding Corp. v. Malley‐Duff & Assocs., 483
U.S. 143, 149 (1987) (observing that “RICO is designed to remedy injury caused
by a pattern of racketeering”).  More precisely, what RICO prohibits are specified
18
interactions between an identified enterprise and a pattern of racketeering.  See,
e.g.,  United  States  v.  Russotti,  717  F.2d  27,  33  (2d  Cir.  1983)  (“[I]t  is  neither  the
enterprise  standing  alone  nor  the  pattern  of  racketeering  activity  itself  which
RICO criminalizes.  Rather, the combination of these two elements is the object of
punishment under RICO.” (emphasis in original)).  Thus, RICO’s focus is not on
any particular alleged predicate act but on (1) whether such predicate acts as are
proved  demonstrate  the  requisite  “pattern  of  racketeering,”  a  matter  largely
dependent on their relatedness and continuity, see H.J. Inc. v. Nw. Bell Tel. Co.,
492 U.S. at 239–41; accord United States v. Daidone, 471 F.3d 371, 374–76 (2d Cir.
2006);  and  (2)  whether  that  pattern  or  its  proceeds  are  used  to  (a)  “invest”  in,
(b) “acquire  or  maintain  .  .  .  any  interest  in  or  control  of,”  or  (c)  “conduct  or
participate . . . in the conduct of” the alleged enterprise, 18 U.S.C. § 1962(a)–(c).
I  respectfully  submit  that  this  precedent  does  not  permit  RICO  to  be
construed as a statute that simply “adds new criminal and civil consequences to
the  predicate  offenses.”    RJR  Nabisco,  764  F.3d  at  135.    That  construction  is
further  refuted  by  precedent  permitting  “a  defendant  to  be  prosecuted—either
simultaneously  or  at  separate  times—for  both  substantive  racketeering  and  the
predicate  crimes  evidencing  the  pattern  of  racketeering.”    United  States  v.
19
Basciano,  599  F.3d  at  205;  cf.  Brown  v.  Ohio,  432  U.S.  at  167–69  (holding  that
double  jeopardy  bars  successive  prosecutions  for  greater  and  lesser  included
offenses).
When the role assigned to predicate acts under our RICO jurisprudence is
thus understood—not as the object of the statute, but as a means for satisfying its
pattern element—it is difficult to identify a clear expression of affirmative intent
for civil RICO claims to reach extraterritorially simply from Congress’s inclusion
of some extraterritorially reaching crimes in the list of possible RICO predicates,
even when pleaded as part of the pattern of racketeering.
That  argument  is  defeated,  in  any  event,  by  the  fact  that  RICO  does  not
require  proof  of  every  alleged  predicate  act  or  of  any  particular  predicate  acts.
See  United  States  v.  Basciano,  599  F.3d  at  206.    The  law  demands  only  that  a
RICO  plaintiff  prove  sufficient  predicate  acts  (but  not  fewer  than  two)  to
demonstrate  the  required  pattern  of  racketeering.    See  id.    In  short,  a  plaintiff
alleging a pattern of racketeering evidenced by various RICO predicates—some
applying  extraterritorially,  others  applying  domestically—might  well  carry  his
pattern  burden  without  proving  any  of  the  alleged  extraterritorial  predicates
that, under the panel’s formulation, are the singular basis for permitting a RICO
20
claim  to  reach  extraterritorially.    It  would  be  curious  for  Congress  to  locate  a
statute’s extraterritorial reach in an allegation that need not be proved.  If, on the
other  hand,  the  panel  intended  to  condition  RICO’s  extraterritorial  reach  on
proof  of  the  alleged  extraterritorial‐crime  predicates—which  is  not  apparent
from  its  opinion—it  departs  even  further  from  our  RICO  jurisprudence  in
requiring  not  simply  proof  of  a  pattern  of  racketeering,  but  proof  of  particular
predicates.
Thus, to ensure consistency in the role our jurisprudence assigns to RICO
predicate  acts,  the  court  should  convene  en  banc  to  clarify  that  Congress’s
identification of some extraterritorial crimes as RICO predicates does not clearly
express  an  affirmative  intent  for  civil  RICO  claims  to  reach  extraterritorially
whenever a plaintiff alleges such crimes as predicate acts.
3.  Determining RICO’s Domestic and Extraterritorial Application
This case warrants rehearing for yet a third reason:  to clarify how courts
should distinguish RICO’s domestic and extraterritorial applications.  Before RJR
Nabisco, the understanding that RICO does not apply extraterritorially required
courts  to  determine  whether  a  particular  RICO  claim  was  domestic  or
extraterritorial.    That  inquiry  remains  necessary  after  RJR  Nabisco  because  the
21
panel,  in  its  effort  to  distinguish  Norex,  decides  that  RICO  does  not  apply
extraterritorially  when  the  alleged  predicates  are  not  extraterritorial  crimes.
Without regard to the locus of the enterprise or pattern of racketeering, the panel
rules that plaintiffs’ claim properly applied RICO extraterritorially to the extent it
alleged extraterritorial‐crime predicates, at the same time that the claim properly
applied  RICO  domestically  to  the  extent  it  alleged  domestic‐crime  predicates
occurring  in  the  United  States.    This  reliance  on  individual  predicate  acts  to
determine  whether  a  RICO  claim  is  domestic  or  extraterritorial  is  at  odds  with
Morrison, Norex, and our RICO jurisprudence.
In  Morrison,  the  Supreme  Court  concluded  that  a  statute’s  application  is
properly  determined  by  its  “focus,”  identified  by  looking  to  “the  objects  of  the
statute’s solicitude.”  561 U.S. at 267.  Applying this standard to Section 10(b) of
the  Exchange  Act,  which  prohibits  manipulative  or  deceptive  practices  in
connection  with  the  purchase  or  sale  of  securities,  Morrison  concluded  that  the
statute’s  focus  was  not  on  deceptive  conduct,  but  on  the  purchase  or  sale  of
securities in the United States.  See id. (“Section 10(b) does not punish deceptive
conduct, but only deceptive conduct ‘in connection with the purchase or sale of
any  security  registered  on  a  national  securities  exchange  or  any  security  not  so
22
registered.’”  (quoting  15  U.S.C.  §  78j(b))).    Thus,  the  Exchange  Act—which  the
Court  had  already  held  did  not  apply  extraterritorially—could  not  be  applied
domestically  to  challenge  foreign  purchases  or  sales  of  securities  based  on
deceptive  conduct  in  the  United  States.    Domestic  application  required  the
purchase or sale of securities in this country.  See id.
In Norex, this court cited Morrison to reject a claim that alleged predicate
acts  of  racketeering  committed  within  the  United  States—mail  and  wire  fraud,
money  laundering,  Hobbs  Act  and  Travel  Act  violations,  and  bribery—allowed
RICO  to  apply  domestically  to  an  international  scheme  to  take  over  part  of  the
Russian oil industry.  See Norex, 631 F.3d at 31–32.
The RJR Nabisco panel follows neither Morrison nor Norex in determining
whether  plaintiffs’  claims  here  apply  RICO  extraterritorially  or  domestically.
With no identification of RICO’s “focus,” as seemingly required by Morrison, the
RJR Nabisco panel looks to predicate acts alone to determine RICO’s application,
in  seeming  contravention  of  Norex.    Thus,  the  panel  concludes  that  plaintiffs’
claim  permissibly  applies  RICO  extraterritorially  for  those  predicate  acts
occurring abroad (money laundering and support for terrorism), and permissibly
applies  RICO  domestically  for  those  predicate  acts  occurring  in  this  country
23
(wire fraud, money fraud, and Travel Act violations).  See RJR Nabisco, 764 F.3d
at  140–43.    This  novel  approach—which  makes  individual  predicates
determinative  of  RICO’s  application  without  regard  to  the  locus  of  the  overall
pattern  of  racketeering  or  the  enterprise—warrants  en  banc  review  for  several
reasons.
First,  this  court  needs  to  clarify  whether  Morrison  does  indeed  require
courts  to  look  to  RICO’s  “focus”  to  determine  its  domestic  or  extraterritorial
application.
Second, the court needs either to identify RICO’s “focus” or to resolve the
tension between Norex and RJR Nabisco as to the role predicate acts can play in
determining RICO’s application.
These matters raise significant challenges.  Following Morrison, and before
RJR  Nabisco,  courts  had  generally  assumed  that  RICO’s  domestic  or
extraterritorial  application  should  be  determined  by  reference  to  “the  ‘focus’  of
congressional  concern”  in  enacting  the  statute.    Morrison,  561  U.S.  at  266;  see
United States v. Chao Fan Xu, 706 F.3d at 975 (collecting cases).  Norex’s citation
to  Morrison  in  its  rejection  of  plaintiff’s  domestic  application  argument  in  that
case is consistent with this assumption.  See Norex, 631 F.3d at 32.  Thus, the RJR
24
Nabisco  panel’s  failure  to  identify  RICO’s  focus,  or  to  explain  why  it  did  not
need to do so to determine the statute’s application in this case, creates confusion
in this circuit as to Morrison’s controlling effect.  This court needs to clarify the
matter en banc.
Further,  courts  that  have  applied  Morrison’s  “focus”  standard  to  RICO
have found the inquiry “far from clear‐cut.”  United States v. Chao Fan Xu, 706
F.3d  at  975.    “[T]wo  camps”  have  emerged:  one  locating  RICO’s  focus  in  the
“enterprise,”  the  other  in  the  “pattern  of  racketeering.”    Id.  (collecting  cases).
The  district  court  in  this  case  joined  the  first  camp  based  on  the  fact  that  RICO
prohibits only racketeering activity connected in specified ways to an enterprise,
which  it  thought  paralleled  Morrison’s  construction  of  the  Exchange  Act  to
punish  only  frauds  in  connection  with  domestic  securities  transactions.    See
European Cmty. v. RJR Nabisco, Inc., 2011 WL 843957, at *5 (citing Morrison, 561
U.S. at 266–67).  By contrast, the Ninth Circuit joined the “pattern” camp, citing
Supreme  Court  decisions  stating  that  “the  heart  of  any  RICO  complaint  is  the
allegation of a pattern of racketeering,” Agency Holding Corp. v. Malley‐Duff &
Assocs.,  483  U.S.  at  154  (emphasis  in  original),  and  referencing  “RICO’s  key
25
requirement of a pattern of racketeering,” H.J. Inc. v. Nw. Bell Tel. Co., 492 U.S.
at 236.  See United States v. Chao Fan Xu, 706 F.3d at 976–77.10
In  Norex,  this  court  did  not  choose  between  “enterprise”  and  “pattern”
but, rather, considered both in concluding that a few predicate acts in the United
States  were  insufficient  to  allow  RICO  to  be  applied  domestically  to  a  claim
involving a foreign enterprise and an essentially foreign pattern of racketeering.
See 631 F.3d at 32.  But Norex’s treatment of the matter is so brief as to preclude a
10  In  United  States  v.  Chao  Fan  Xu,  the  Ninth  Circuit  upheld  the  domestic
application of RICO to defendants’ prosecution for scheming “to steal large sums
of money from the Bank of China and to get away with it in the United States.”
706 F.3d at 979 (observing that immigration and bank fraud parts of pattern were
inextricably  linked  so  that  without  immigration  fraud  in  United  States,  bank
fraud in China would have been “a dangerous failure”).  Thus, while defendants’
“pattern  of  racketeering  activity  may  have  been  conceived  and  planned
overseas,”  the  court  concluded  that  “it  was  executed  and  perpetuated  in  the
United States,” allowing for domestic prosecution.  Id.
Judge  Lynch  poses  certain  hypotheticals  that  might  also  support  RICO’s
domestic  application  to  foreign  enterprises  conducted  through  patterns  of
racketeering occurring wholly (or at least mainly) in this country.  See Lynch, J.,
Op. Dissenting from Denial of Reh’g En Banc, post at [3].  But if pattern, rather
than  enterprise  (or  enterprise  in  relation  to  pattern),  is  RICO’s  focus  and,  thus,
determinative of its application, this court should say so en banc.  In any event, a
conclusion  that  RICO  can  apply  domestically  to  a  pattern  of  racketeering
occurring  mostly  in  the  United  States  does  not  ineluctably  lead  to  a  conclusion
that  Congress  intended  for  RICO  to  apply  extraterritorially  to  a  foreign
enterprise  conducted  through  an  entirely  foreign  pattern  of  racketeering
evidenced by predicates prohibited by extraterritorially reaching statutes—Judge
Lynch’s  third  hypothetical.    See  id.  at  [3].    Certainly,  that  possibility  warrants
further careful consideration en banc.
26
confident  conclusion  on  the  focus  point.    In  any  event,  Norex  does  not  specify
whether enterprise and pattern should be viewed independently, conjunctively,
or alternatively in determining RICO’s application.11
Where  Norex  is  not  ambiguous,  however,  is  in  its  rejection  of  predicate
acts as determinative of RICO’s application.  This is evident from its affirmance
of the dismissal of  RICO claims despite allegations that domestic predicate acts
were part of the pattern of racketeering.  See 631 F.3d at 31.  It is RJR Nabisco that
confuses that point by relying exclusively on predicate acts to determine RICO’s
application.    That  approach  is  not  only  at  odds  with  Norex  and  Morrison,  but
also  with  our  RICO  jurisprudence,  which  as  already  discussed  holds  that  the
object of racketeering “is to conduct the affairs of a charged enterprise through a
pattern of racketeering, not to commit discrete predicate acts.”  United States v.
Pizzonia, 577 F.3d 455, 459  (2d  Cir.  2009);  accord United  States  v. Basciano,  599
F.3d at 205–06; see also United States v. Russotti, 717 F.2d at 33.
11    In  its  amicus  filing,  the  United  States  urges  that  RICO’s  focus  is  on  both  the
enterprise and the pattern of racketeering, so that these elements can operate in
the alternative to allow RICO to apply domestically if either the enterprise or the
overall  pattern  of  racketeering  operates  in  the  United  States.    See  Br.  of  United
States 7–20.  The United States does not argue in favor of the RJR Nabisco panel’s
use of individual predicate acts to determine RICO’s application.
27
Thus, if Morrison does, indeed, require RICO application to be determined
by  reference  to  the  statute’s  focus,  and  if  discrete  predicate  acts  are  not  RICO’s
focus,  this  court  needs  to  clarify  en  banc  how  a  court  properly  determines
whether a RICO application is domestic or extraterritorial.
Accordingly, I respectfully dissent from the court’s decision not to rehear
this case en banc to provide needed clarity as to both (1) whether RICO applies
extraterritorially,  and  (2)  the  criteria  for  determining  whether  a  RICO  claim  is
domestic or extraterritorial.
28
GERARD E. LYNCH, Circuit Judge, dissenting from the denial of rehearing en banc:
I join in Judge Jacobs’s dissent from denial of rehearing en banc, because I believe that
the tension between the panel’s holding in this case, European Community v. RJR Nabisco, Inc.,
764 F.3d 129 (2d Cir. 2014), and our prior decision in Norex Petroleum Ltd. v. Access Industries,
Inc., 631 F.3d 29 (2d Cir. 2010), should be resolved. But I do not join the other dissenters in
their criticisms of the panel’s resolution. Because en banc review has been denied, I do not need
to come to a definitive conclusion about the circumstances under which RICO reaches conduct
occurring outside the United States. Largely for the reasons explained by Judge Hall, however, I
am inclined to think that the better outcome would be to adopt the view of the panel in this case
and hold that RICO applies to patterns of predicate acts committed abroad where those predicate
acts violate federal statutes with express extraterritorial reach.
As Judge Raggi’s dissent demonstrates, the very concept of “extraterritorial application”
of a complex statute such as RICO is a vexing one. See Raggi Dissent at 22-28. Such a question
is not easily resolved by sloganeering reference to the presumption against extraterritoriality
emphasized in Morrison v. National Australia Bank, Ltd., 561 U.S. 247, 255 (2010). The
primary prohibition in RICO, and the one at issue here, criminalizes “conduct[ing] . . . [an]
enterprise’s affairs . . . through a pattern of racketeering activity.” 18 U.S.C. § 1962(c). The two
key elements are the “enterprise” and the “pattern of racketeering.” Which, or what
combination, of these elements is critical in determining whether any given application of RICO
is “extraterritorial”?
Consider the following hypothetical. A leader of a revolutionary group based largely in a
Middle Eastern country, in an effort to intimidate the United States to stop supporting that
country’s government, plots and carries out two crimes: planting a bomb near a federal office
building in an American city, resulting in the deaths of several people, and beheading an
abducted American journalist in the country where the group primarily operates. The terrorist
leader is captured by American forces, and is indicted in the United States for violating RICO.
The revolutionary group likely qualifies as an “enterprise” under the definition of that term in 18
U.S.C. § 1961(4). Both terrorist strikes qualify as one or more racketeering acts: the bombing in
the United States involves arson and murder, chargeable as felonies under the law of the relevant
state, see 18 U.S.C. § 1961(1)(A), and the murder of an American abroad is indictable
under 18 U.S.C. § 2332(a)(1) – a statute that by its very terms can only be violated by acts
outside the United States – which is listed as a RICO predicate under 18 U.S.C. §§ 1961(1)(G)
and 2332b(g)(5)(B). Together, these acts very likely form a “pattern of racketeering activity,”
since they are related to each other in goals, methods, and personnel, and they exhibit continuity
because the enterprise has a continuous existence that threatens to involve further such acts. See
18 U.S.C. § 1961(5); H.J. Inc. v. Northwestern Bell Telephone Co., 492 U.S. 229, 240-42 (1989).
Is this an “extraterritorial” application of RICO? Not an easy question. The enterprise in
question is primarily foreign, in its membership, goals, and usual sphere of operation. The
pattern of racketeering activity took place partially in the United States and partially abroad,
though the foreign portion of the pattern involved conduct that Congress has expressly chosen to
reach via the extraterritorial application of American law. Whether to characterize the
hypothetical indictment as an “extraterritorial application of RICO” is an interesting conceptual
question.
But the actual legal question posed by the hypothetical indictment is whether Congress
intended to reach such conduct by the RICO statute, and that, as Judge Hall demonstrates, is a
2
rather easy question to answer. See Hall Concurrence at 1-2. Nothing in the definition of
“enterprise” excludes foreign-based associations, groups, or corporations, and it is difficult to
believe that Congress intended to exclude them. If members of a Mexican drug cartel, the
Sicilian Mafia, or a foreign-based terrorist organization commit a series of violent crimes on
U.S. soil that would clearly violate RICO if committed by a local drug distribution gang, a New
York-based Mafia family, or the Weather Underground, after all, it would be quite odd to
consider the prosecution of such acts in the United States an “extraterritorial” application of
RICO, and there is certainly no reason to believe that Congress did not intend to apply RICO to
such actions simply because the (entirely American) pattern of racketeering was carried out to
further the goals of a foreign enterprise.
Does the outcome change if one predicate crime that formed part of the charged pattern
of racketeering activity took place abroad, in violation of a statute that Congress (a) expressly
gave extraterritorial reach and (b) expressly made a RICO predicate? I can’t see how it does.
How can Congress’s enactment of a law specifically designed to protect Americans abroad, and
its express incorporation of that law into RICO as a predicate crime, constitute anything other
than a clear expression of congressional intent to apply RICO to persons who commit that crime,
in furtherance of the affairs of an enterprise, as part of a pattern of racketeering? The plain
meaning of RICO demands that result. By including certain crimes with extraterritorial
application as RICO predicates – including some that can only be committed abroad – Congress
unequivocally expressed its intention that RICO apply to patterns of racketeering activity that
include such crimes. You may call this an “extraterritorial” application of RICO if you like, but,
whether or not the label is properly applied, there is no doubt that Congress intended to apply
3
RICO in that situation. Nor should that conclusion change if all the predicate crimes alleged
were committed abroad – if, for example, the revolutionary group planted no bombs on U.S. soil
but carried out multiple beheadings of Americans in violation of 18 U.S.C. § 2332(a)(1). So
long as Congress expressly extended its criminal prohibitions to the foreign conduct in question
and incorporated those prohibitions into RICO, Congress has determined that such predicate
crimes can constitute a pattern within the definition of RICO. Presumably it has done so because
a pattern of such crimes strikes at American interests just as much as a pattern of terrorist acts
committed in the United States by the same foreign-based enterprise.
Of course, none of this suggests an intention to apply RICO, generally, to conduct
committed abroad. If members of a foreign enterprise engage in a pattern of entirely foreign
murders and drug distribution, nothing in RICO could make that activity a crime under U.S. law.
Indeed, although applying RICO to such conduct would plainly be an “extraterritorial”
application of the statute, we need not even invoke the presumption against extraterritoriality to
know that the application is impermissible, because the definitional provisions of RICO make
clear that Congress did not define such conduct as a RICO violation. A pattern of murders of
Italian citizens committed by members of an Italian organized crime group in Italy cannot violate
RICO, because murder is a RICO predicate only when it is “chargeable under state law” or
indictable under specific federal statutes. See 18 U.S.C. §§ 1961(1)(A), 1961(1)(G). Entirely
foreign activity does not qualify, and nothing in RICO indicates any contrary intent to extend its
reach to foreign criminality of a similar nature to the domestic conduct covered by RICO. To the
extent that Norex holds that RICO does not, of its own force and in general, have
“extraterritorial” application in such circumstances, it is of course correct.
4
In that sense, indeed, RICO does not even implicate the extraterritorial ambiguities raised
by most statutes. Most congressional statutes prohibit conduct in general terms that, on their
face, could be taken to apply to anyone in the world. In Morrison, for example, the Supreme
Court interpreted a provision of the Securities Exchange Act that makes it “unlawful for any
person, directly or indirectly, by the use of any means or instrumentality of interstate commerce
or of the mails, or of any facility of any national securities exchange . . . [t]o use or employ, in
connection with the purchase or sale of any security . . . any manipulative or deceptive device.”
See 15 U.S.C. § 78j(b). But we know that Congress generally does not intend, by using such
broad language as “any person” or “any national securities exchange,” to apply those generalized
prohibitions to actions that take place outside our borders, because Congress ordinarily legislates
to regulate conduct within its primary jurisdiction; that is what the presumption against
extraterritorial application means. Liu Meng-Lin v. Siemens AG, 763 F.3d 175, 178 (2d Cir.
2014). That presumption applies to RICO as it does to other statutes, but RICO is quite explicit
that its prohibitions apply only to patterns of racketeering acts that themselves violate state or
federal law. It does not, for example, say that “no person shall conduct the affairs of an
enterprise through a pattern of committing murder,” but confines itself to patterns of murder that
are chargeable under the law of a state, or that are indictable under specific federal law. Unlike
§ 10(b), RICO is thus not even susceptible to a literalist reading that its general terms might
apply to foreigners.
At the same time, however, Congress was exquisitely clear that some acts that are
committed abroad are predicate acts under RICO, and thus can form a pattern of racketeering
activity. To the extent that a pattern consisting of such acts is charged as a violation of RICO, I
5
see nothing in the presumption against extraterritoriality that exempts that pattern from
prosecution. It therefore seems to me that there is nothing novel or odd about the idea that RICO
does not, in general, “apply extraterritorially,” but that it may apply to acts committed abroad
where those acts violate statutes that were themselves expressly stated by Congress to have
extraterritorial application and that Congress has classified as RICO predicates.
In the present posture of the case, I need not address all of the issues that may arise in
working out these basic principles. Nor need I decide how the instant case should be resolved,
or whether Norex was correctly decided. I join the dissenters in believing that we would do well
to convene en banc to resolve those very questions, and I agree with them that the reasoning and
result in this case are deeply in tension with the reasoning and result in Norex, whether or not
those two holdings are ultimately irreconcilable. To the extent, however, that the other
dissenters see the panel’s approach to RICO and extraterritoriality as deeply disturbing,
unprecedented, and inconsistent with Morrison, I respectfully disagree. To the contrary, I
believe that any interpretation that suggests that operatives of a foreign enterprise cannot be held
accountable under RICO for a pattern of predicate crimes that violate federal statutes with
express extraterritorial reach would astonish the Congress that made such violations RICO
predicates in the first place. Should the Supreme Court take up my dissenting colleagues’
invitation to grant further review of this case, I hope and trust that it will not allow the context of
this case – a civil action that, like many civil RICO suits, might lead some to doubt the wisdom
of allowing a somewhat amorphous statute to be wielded by private interests in endlessly
creative ways – to blind it to the clear intention of Congress to apply RICO to foreign terrorist
groups who commit patterns of criminal acts that may occur abroad, but that violate American
laws with express extraterritorial reach.
6