The World in U.S. Courts: Summer 2017 - Racketeer Influenced and Corrupt Organizations Act (RICO)
May.09.2017
In this opinion, the District Court in Chicago authorizes immediate appellate review of a prior decision dismissing Armada’s RICO claims as having failed to allege the requirement of a “US domestic injury,” as first announced by the US Supreme Court in the RJR Nabisco v. European Community case in 2016. (The Court’s prior decision was addressed in the Spring 2017 issue of The World in US Courts.) In the course of its ruling, however, the Court clarified its analysis of the extraterritoriality inquiry required by RJR Nabisco.
Armada’s RICO claim was based, among other things, on the defendants’ alleged interference with Armada’s ability to collect a debt owed by one of the defendant’s subsidiaries. The Court originally held that an economic injury is suffered at the plaintiff’s location, and since Armada is a non-US corporation, it could not allege a US domestic injury. The Court acknowledged that district courts had not consistently analyzed where an injury occurs for purposes of RICO since RJR Nabisco was decided, and noted a line of cases that focused on where conduct giving rise to the RICO violation occurred. Admitting that Armada’s interpretation of the “domestic injury” requirement was “not implausible,” the Court agreed that interlocutory review of the question by the Court of Appeals was appropriate.