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Second Circuit — RICO: European Community v. RJR Nabisco

By: Daily Record Staff//May 1, 2014

Second Circuit — RICO: European Community v. RJR Nabisco

By: Daily Record Staff//May 1, 2014//

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U.S. Court of Appeals for the Second Circuit

RICO

Extraterritorial Conduct — Foreign Agency — Diversity Jurisdiction

European Community v. RJR Nabisco
11-2475-cv
Judges Leval, Sack and Hall

Background: The plaintiffs appealed from the dismissal of their RICO claims against the defendant. The plaintiffs alleged that defendant directed, managed and controlled a global money-laundering scheme with organized crime groups. The court held that RICO did not apply to enterprises outside the United States. Further, the district court dismissed the plaintiffs’ state law claims on the ground that they were not within the diversity jurisdiction of the federal court.

Ruling: The Second Circuit vacated and remanded. The court held that Congress had clearly indicated that the statute applies to extraterritorial conduct. Given the conduct alleged, the complaint sufficient alleged important domestic activity to come with RICO’s coverage. Further, the European Community is an agency or instrumentality of a foreign state and qualifies for diversity jurisdiction.

John J. Halloran Jr. of Speiser, Krause, Nolan & Granito for the plaintiff-appellants; Gregory G. Katsas of Jones Day for the defendant-appellees

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