Not a surprise, we are not fans of civil RICO. We do not like how it is misused by attorneys on the other side to transform ordinary pharmaceutical and medical gadget cases into class actions. We do not like that it brings the possibility of treble damages and lawyers’ charges. We do not like the flexibility of its terms. And we do not like its across the country individual jurisdiction and place arrangements, 18 U.S.C. 1965( a)-( d).
In other words, we believe it is insanity to utilize civil RICO beyond the racketeering context for which it was developed. Today’s conversation of RICO insanity visits method of Medical Cannabis, Inc. v. Horn, where a pending Supreme Court cert petition raises a problem with considerable implications for our customers and readers.
RICO allows complainants “hurt in [their] company or home by factor of” an accused’s racketeering activity to demand treble damages and lawyers’ charges. 18 U.S.C. § 1964( c).
The bright side is that the “company or home” requirement “exclud[es] … injuries.” RJR Nabisco, Inc. v. Eur. Cmty, 579 U.S. 325, 350 (2016 ).
The problem is that some federal circuits divided hairs to conclude, regardless of the Supreme Court’s clear holding in RJR Nabisco, that financial damages that circulation from injuries— believe medical expenditures and lost incomes that become part of every injury case– are “company or home” within the significance of the civil RICO statute.
Not all do. The Sixth, Seventh, and Eleventh Circuits have actually turned down the concept that financial damages streaming from injuries are an injury to “company or home.” See Jackson v. Sedgwick Claims Mgmt. Servs, 731 F. 3d 556 (sixth Cir. 2013) (en banc); Evans v. City of Chicago, 434 F. 3d 916, 926-27 (7th Cir. 2006), overthrown on other premises by Hill v. Tangherlini, 724 F. 3d 965, 967 n. 1 (7th Cir. 2013); and Grogan v. Platt, 835 F. 2d 844, 848 (11th Cir. 1988). These circuits, in our view, are on strong ground. A difference in between injuries and injuries to “company or home” is practically black letter law. See Black’s Law Dictionary 925 (Rev. fourth ed. 1968) (A “injury” is a “hurt or damage done to a guy’s individual … as identified from an injury to his home or credibility.”).
However the Ninth Circuit has actually been great with the property that injury damages like medical expenditures and lost incomes are “company or home” for rather a long time now. See Diaz v. Gates, 420 F. 3d 897, 900 (9th Cir. 2005) (en banc).
And After That, in August, the Second Circuit signed up with that view in Horn v. Medication. Cannabis, Inc, 80 F. fourth 130 (2d Cir. 2023), deepening the circuit split to 3-2 and possibly teeing up the problem for Supreme Court resolution.
Does it matter that much that the 2nd and Ninth Circuits have opened the RICO door to injury cases when financial damages are declared? Considered that civil RICO offers treble damages and lawyers’ charges, which New York City (Second Circuit) and California (Ninth Circuit) currently are populated magnets for both company and lawsuits, we believe so.
It likewise matters since the across the country jurisdiction and place arrangements of civil RICO make it reasonably simple (as compared to normal item liability claims) for civil RICO complainants to go online forum looking for beneficial courts. Location is correct for a civil RICO claim any district in which an accused “lives, is discovered, has a representative, or negotiates his affairs.” 18 U.S.C. § 1965( a). Civil RICO complainants can sign up with accuseds without any connection to the online forum if “completions of justice” so need. 18 U.S.C. § 1965( b). Offenders can be served “in any judicial district in which such individual lives, is discovered, has a representative, or negotiates his affairs.” 21 U.S.C. § 1965( d); see likewise Laurel Gardens, LLC v. McKenna, 948 F. 3d 105, 114, 118-19, 121-22 (3d Cir. 2020) (permitting across the country service of procedure for civil RICO cases where justice so needs). The lawsuits corollary of Gresham’s Law will use, with bad jurisdictions crowding out the excellent.
We will be seeing to see if the Supreme Court takes this case and if it does, hoping that it actions in to stop this one specific kind of RICO abuse.