11‐2475‐cv European Community v. RJR Nabisco

11‐2475‐cv European Community v. RJR Nabisco

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT August Term, 2011 (Petition for Rehearing Submitted: May 7, 2014 Petition for Rehearing Decided: August 20, 2014) Docket No. 11–2475–cv

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, and ROMANIA, Plaintiffs–Appellants, v. RJR NABISCO, INC., R.J. REYNOLDS TOBACCO COMPANY, R.J. REYNOLDS TOBACCO INTERNATIONAL, INC., RJR ACQUISITION CORP., f/k/a NABISCO GROUP HOLDINGS CORP., RJR NABISCO HOLDINGS CORP., R.J. REYNOLDS

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11‐2475‐cv European Community v. RJR Nabisco

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.

Before: LEVAL, SACK, and HALL, Circuit Judges. The defendants–appellees sought panel and en banc rehearing of this Courtʹs decision (Leval, Judge) vacating the judgment of the United States District Court for the Eastern District of New York (Garaufis, Judge) dismissing the complaint against them. The defendants–appellees urge us to affirm on the ground that the plaintiffs were required to allege domestic injuries for each of the statutory violations pled in their complaint. The panel concludes that this argument is without merit, and the petition for panel rehearing is therefore DENIED. JOHN J. HALLORAN, JR., Speiser, Krause, Nolan & Granito, New York, N.Y. (Kevin A. Malone, Carlos A. Acevedo, Krupnick Campbell Malone Buser Slama Hancock Liberman & McKee, P.A., Fort Lauderdale, Fla., on the brief), for Plaintiffs‐Appellants. GREGORY G. KATSAS, Jones Day, Washington, D.C. (David M. Cooper, Mark R. Seiden, Jones Day, New York, N.Y., on the brief), for Defendants‐Appellees. LEWIS S. YELIN, Attorney, Appellate Staff, Civil Division, Department of Justice, Washington, D.C. (Harold Hongju Koh, Legal Advisor, Department of State,

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11‐2475‐cv European Community v. RJR Nabisco

Washington, D.C.; Tony West, Assistant Attorney General, Civil Division, Department of Justice, Washington, D.C.; Loretta E. Lynch, United States Attorney for the Eastern District of New York, New York, N.Y.; Douglas N. Letter, Attorney, Appellate Staff, Civil Division, Department of Justice, Washington, D.C., on the brief), for Amicus Curiae United States of America in support of neither party. PER CURIAM: In their petition for panel and en banc rehearing, the defendants–appellees (collectively, ʺRJRʺ) contend, among other things, that the Racketeer Influenced and Corrupt Organizations (RICO) statute,

et seq., requires private plaintiffs to allege a domestic injury, and that this requirement offers an independent basis upon which to dismiss the complaints in this action to the extent that they fail to allege such injuries. We conclude that RICO imposes no such requirement. The petition for panel rehearing is therefore denied. DISCUSSION The RICO statute allows ʺ[a]ny person injured in his business or property by reason of a violation of [18 U.S.C. §] 1962ʺ to sue for and recover treble damages and attorneysʹ fees.

(c). RJR argues that, regardless of whether the conduct giving rise to this injury may be extraterritorial, the injury itself must be domestic. See Pet. for Rehʹg 2, 12. We are not persuaded. RJR urges us to infer from a paragraph added on rehearing to this Courtʹs decision in Norex Petroleum Ltd. v. Access Industries, Inc.,

(2d Cir. 2010) (per curiam), a holding that § 1964(c), which forms the basis for the plaintiffsʹ claim here, requires allegation of a

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11‐2475‐cv European Community v. RJR Nabisco

domestic injury. But that added language did no more than confirm that Norex dealt only with private causes of action, and that we had no occasion to decide whether RICO could reach extraterritorial conduct ʺwhen enforced by the government pursuant to Sections 1962, 1963 or 1964(a) and (b).ʺ Id. at 33. Nowhere in Norex did we consider or decide whether § 1964(c) requires a domestic injury. We see no reason to construe RICO to include such a requirement. To establish a compensable injury under § 1964(c), a private plaintiff must show that (1) the defendant ʺengage[d] in a pattern of racketeering activity in a manner forbidden byʺ § 1962, and (2) that these ʺracketeering activitiesʺ were the proximate cause of some injury to the plaintiffʹs business or property. Sedima, S.P.R.L. v. Imrex Co.,

(1985); Holmes v. Secs. Investor Prot. Corp.,

(1992). The Supreme Court has stated unequivocally that ʺthe compensable injuryʺ addressed by § 1964(c) ʺnecessarily is the harm caused by predicate acts sufficiently related to constitute a pattern.ʺ Sedima,

; accord Anza v. Ideal Steel Supply Corp.,

(2006). ʺIf the defendant engages in a pattern of racketeering activity in a manner forbidden by [§ 1962(a)–(c)], and the racketeering activities injure the plaintiff in his business or property, the plaintiff has a claim under § 1964(c).ʺ Sedima,

. Although we have distinguished Sedima when deciding that a plaintiff pursuing a cause of action for a violation of § 1962(a) must plead an ʺinjury from the defendantsʹ investment of racketeering income in an enterprise,ʺ Ouaknine v. MacFarlane,

(2d Cir. 1990), the Supreme Courtʹs conclusion that RICOʹs remedial provisions are addressed to violations of RICO predicates still stands when applied to §§ 1962(b), (c)

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11‐2475‐cv European Community v. RJR Nabisco

and conspiracies to commit violations of those sections charged under § 1962(d).1 The Sedima courtʹs conclusion that § 1964(c)ʹs injury requirement focuses on RICOʹs predicates dovetails with the extraterritoriality analysis set forth in the panel opinion in this case. Just as ʺthe extraterritorial application of RICO [is] coextensive with the extraterritorial application of the relevant predicate statutes,ʺ Am. Slip Op. at 16:18–19, we look to the relevant predicate statute to determine whether the injury caused by a violation thereof must be domestic. If an injury abroad was proximately caused by the violation of a statute which Congress intended should apply to injurious conduct performed abroad, we see no reason to import a domestic injury requirement simply because the victim sought redress through the RICO statute. This conclusion is consistent both with ʺCongressʹ self‐consciously expansive language and overall approach,ʺ as well as ʺits express admonition that RICO is to ʹbe liberally construed to effectuate its remedial purposes.ʹʺ Sedima,

(quoting Pub. L. No. 91–452, § 904(a),

, 947 (1970)). The presumption against extraterritoriality, which is primarily concerned with the question of what conduct

Simultaneously with the filing of this opinion, we have 1

amended the original panel opinion in this case to reflect the fact that the plaintiffs have pled a domestic investment with respect to their claims under § 1962(a). As discussed in the panel opinion, the plaintiffs have also alleged that RJR engaged in conduct in the United States satisfying every essential element of each RICO predicate statute that does not apply extraterritorially. Under the circumstances, we see no reason why the plaintiffs should further be required to plead that the injury they suffered from the alleged domestic investment occurred in the United States.

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11‐2475‐cv European Community v. RJR Nabisco

falls within a statuteʹs purview, does not require a different result. See, e.g., Morrison v. Natʹl Australia Bank Ltd.,

(2010) (referring to the question of a statuteʹs extraterritorial application as a question of ʺwhat conduct [the statute] reachesʺ). On the facts of this case, we conclude that the plaintiffs are not required to plead that their alleged injuries actually occurred in the United States. The petition for panel rehearing is therefore DENIED.

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