Rjr Nabisco, Inc. v. European Community

136 S.Ct. 2090 (2016)

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Nature of the Case

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Facts

European (Ps) claims that RJR Nabisco and numerous related entities (Ds)-participated in a global money-laundering scheme in association with various organized crime groups. Ps sued Ds in the Eastern District of New York in 2000, alleging that Ds had violated RICO. Over the past 16 years, the resulting litigation (spread over at least three separate actions, with this case the lone survivor) has seen multiple complaints and multiple trips up and down the federal court system. Ps allege a scheme in which Colombian and Russian drug traffickers smuggled narcotics into Europe and sold the drugs for euros that-through a series of transactions involving black-market money brokers, cigarette importers, and wholesalers-were used to pay for large shipments of RJR cigarettes into Europe. Ds allegedly dealt directly with drug traffickers and money launderers in South America and sold cigarettes to Iraq in violation of international sanctions. Ds are also said to have acquired Brown & Williamson Tobacco Corporation for the purpose of expanding these illegal activities. Ps allege that Ds violated each of RICO’s prohibitions. Ds moved to dismiss the complaint, arguing that RICO does not apply to racketeering activity occurring outside U.S. territory or to foreign enterprises. The District Court agreed and dismissed the RICO claims as impermissibly extraterritorial. The Second Circuit reinstated the RICO claims. It concluded that “with respect to a number of offenses that constitute predicates for RICO liability and are alleged in the case, Congress has clearly manifested an intent that they apply extraterritorially.” The court concluded that the money laundering and material support of terrorism statutes expressly apply extraterritorially in the circumstances alleged in the complaint. The court held that the mail fraud, wire fraud, and Travel Act statutes do not apply extraterritorially. It concluded that the complaint states domestic violations of those predicates because it “alleges conduct in the United States that satisfies every essential element” of those offenses. The Supreme Court granted certiorari.