11-2475
Eurpoean Community v. RJR Nabisco

      11-2475
      European Community v. RJR Nabisco



                           UNITED STATES COURT OF APPEALS

                                    FOR THE SECOND CIRCUIT


          At a stated term of the United States Court of Appeals
      for the Second Circuit, held at the Thurgood Marshall United
      States Courthouse, 40 Foley Square, in the City of New York,
      on the 13th day of April, two thousand fifteen.

      PRESENT: ROBERT A. KATZMANN,
                             Chief Judge,
               DENNIS JACOBS,
               JOSÉ A. CABRANES,
               ROSEMARY S. POOLER,
               REENA RAGGI,
               RICHARD C. WESLEY,
               PETER W. HALL,
               DEBRA ANN LIVINGSTON,
               GERARD E. LYNCH,
               DENNY CHIN,
               RAYMOND J. LOHIER, JR.,
               SUSAN L. CARNEY,
               CHRISTOPHER F. DRONEY,
                             Circuit Judges.

      - - - - - - - - - - - - - - - - - - - - - -x

      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, ROMANIA,

    Plaintiffs-Appellants,

         - v.-                              11-2475

RJR NABISCO, INC., R.J. REYNOLDS TOBACCO
COMPANY, R.J. REYNOLDS TOBACCO
INTERNATIONAL, INC., RJR ACQUISITION
CORP., FKA NABISCO GROUP HOLDINGS CORP.,
RJR NABISCO HOLDINGS CORP., R.J. REYNOLDS
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.

- - - - - - - - - - - - - - - - - - - - -x

For Plaintiffs-
Appellants:            John J. Halloran, Jr., John J.
                       Halloran, Jr., P.C., White Plains,
                       NY, Kevin A. Malone, Carlos A.
                       Acevedo, Krupnick, Campbell, Malone,
                       Buser Slama, Hancock, Liberman P.A.,
                       Fort Lauderdale, FL.

For Defendants-
Appellees:             Gregory G. Katsas, John M. Gore,
                       Jones Day, Washington, D.C., Mark R.
                       Seiden, Jones Day, New York, NY.
                           ORDER

     Following disposition of this appeal, an active judge
of the Court requested a poll on whether to rehear the case
en banc. A poll having been conducted and there being no
majority favoring en banc review, rehearing en banc is
hereby DENIED.

     Peter W. Hall, Circuit Judge, concurs by opinion in the
denial of rehearing en banc.

     Dennis Jacobs, Circuit Judge, joined by José A.
Cabranes, Reena Raggi, Debra Ann Livingston, and Gerard E.
Lynch, dissents by opinion from the denial of rehearing en
banc.

     José A. Cabranes, Circuit Judge, joined by Dennis
Jacobs, Reena Raggi, and Debra Ann Livingston, Circuit
Judges, dissents by opinion from the denial of rehearing en
banc.

     Reena Raggi, Circuit Judge, joined by Dennis Jacobs,
José A. Cabranes, and Debra Ann Livingston, Circuit Judges,
dissents by opinion from the denial of rehearing en banc.

     Gerard E. Lynch, Circuit Judge, dissents by opinion
from the denial of rehearing en banc.


                           FOR THE COURT:
                           CATHERINE O’HAGAN WOLFE, CLERK
1    HALL, Circuit Judge:

2           This petition for rehearing in banc challenges the conclusion of the panel, consisting of

3    senior judges Leval and Sack, and me, that the Racketeer Influenced Corrupt Organizations Act

4    (“RICO”), 18 U.S.C. §§ 1961 et seq., applies to foreign conduct when liability is based on

5    “racketeering acts” consisting of violations of predicate statutes which Congress expressly made

6    applicable to foreign conduct. See European Cmty. v. RJR Nabisco, Inc., 764 F.3d 129 (2d Cir.

7    2014). As Judges Leval and Sack, being senior judges, have no vote on whether to grant

8    rehearing in banc, I write independently in support of denial of the petition.

9           In considering the petition for panel rehearing, our panel reexamined our initial view, as

10   well as its compatibility with Morrison v. Nat’l Australia Bank, Ltd., 561 U.S. 247 (2010), and

11   with our court’s ruling in Norex Petroleum Ltd. v. Access Industries, Inc., 631 F.3d 29 (2d Cir.

12   2010), and reaffirmed the soundness of our conclusion.

13          RICO applies when the evidence shows a pattern of “racketeering activity.” 18 U.S.C.

14   §§ 1962, 1964. “Racketeering activity” is defined as “any act . . . indictable under” specified

15   criminal statutes. Id. § 1961(1). The criminal statutes specified are colloquially referred to as

16   RICO “predicates.” As the panel opinion noted, some of the specified predicate statutes

17   expressly provide that extraterritorial conduct is indictable. See RJR Nabisco, 764 F.3d at 136.

18          Many of the predicates that apply to foreign conduct relate to international terrorism. A

19   few weeks after the terrorist attacks of September 11, 2001, Congress passed the USA PATRIOT

20   Act of 2001 (the “Patriot Act”), an anti-terrorism measure, which, among other provisions,

21   amended RICO by adding to its list of predicates nearly 20 antiterrorism statutes that expressly

22   apply to foreign conduct. Pub. L. No. 107-56, § 813, 115 Stat. 272, 382. The Patriot Act did this


                                                      1
 1   by adding those statutes to RICO’s definition of “racketeering activity” specified in § 1961(1) as

 2   a basis of RICO liability.1 18 U.S.C. § 1961(1). The House Report for the Patriot Act states,

 3   “[t]he RICO provisions in the bill . . . . enhance the civil and criminal consequences of certain

 4   crimes that have been deemed RICO predicates by Congress and provide better investigative and

 5   prosecutorial tools to identify and prove crimes.” H.R. Rep. No. 107-236, at 70 (2001). Since

 6   2001, Congress has added additional explicitly extraterritorial crimes to RICO, for a total of

 7   nearly 30 predicate racketeering acts that expressly apply to foreign conduct, nearly all of them

 8   relating to international terrorism directed against United States interests. See, e.g., 18 U.S.C. ''

 9   2332g (conduct involving anti-aircraft missile systems); 2339D (terrorist military training).

10   Some of RICO’s predicate statutes indeed apply only to conduct outside the United States. See,

11   e.g., 18 U.S.C. ' 2332 (killing, and attempting to kill, “a national of the United States, while such

12   national is outside the United States” (emphasis added)); 18 U.S.C. § 2423(c) (engaging in illicit

13   sexual conduct in foreign places by a U.S. citizen or permanent resident).

14           The panel opinion concluded that “[b]y incorporating these statutes into RICO as

15   predicate racketeering acts, Congress has clearly communicated its intention that RICO apply to

16   extraterritorial conduct to the extent that extraterritorial violations of those statutes serve as the

17   basis for RICO liability.” RJR Nabisco, 764 F.3d at 137. That conclusion was sound. The

18   RICO statute explicitly states that acts “indictable under” the specified statutes constitute

19   “racketeering activity,” to which RICO liability attaches, and many of these predicate statutes

20   expressly provide that foreign conduct is indictable.

21           This interpretation of RICO is wholly consistent with Morrison. In Morrison, the


     1
             Prior to the Patriot Act, only a few RICO provisions specified extraterritorial application.

                                                        2
 1   Supreme Court explained that there is a presumption against construing United States statutes as

 2   applying extraterritorially but that the presumption is overcome when the statute clearly

 3   manifests a congressional intent that it apply extraterritorially. See Morrison, 561 U.S. at 265.

 4   Courts are not to justify extraterritorial application by speculating that Congress would have

 5   wanted that had it focused on the question. On the other hand, when Congress, acting within its

 6   powers, has explicitly provided for extraterritorial application of a statute, as it has done by

 7   incorporating statutes that apply extraterritorially into RICO as predicates, the statute must be

 8   interpreted as Congress has directed. The purpose of Morrsion was to bar courts from attributing

 9   to Congress an intent that its statutes apply extraterritorially in the absence of a clear expression

10   thereof; it was not to prevent courts from giving effect to Congress’s clearly manifested

11   intentions that certain statutes apply extraterritorially.

12           Finally, the panel’s holding on this point is consistent with Norex. The panel disagreed

13   with the district court’s interpretation of Norex as concluding that RICO could never have

14   extraterritorial application. To the question of whether RICO, in any of its applications, has

15   extraterritorial reach, the Norex opinion devotes two sentences, each of which could have two

16   meanings. The first sentence, derived from our court’s prior opinion in North South Finance

17   Corp. v. Al-Turki, 100 F.3d 1046, 1051 (2d Cir. 1996), states that “the RICO statute is silent as to

18   any extraterritorial application.” The second states that Morrison “forecloses [the Norex

19   plaintiff=s] argument that because a number of RICO’s predicates possess an extraterritorial

20   reach, RICO itself possesses an extraterritorial reach.” Norex, 631 F.3d at 33.2


     2
             Judge Raggi twice quotes Norex as saying, because “‘RICO is silent as to any
     extraterritorial application,’ . . . therefore, ‘it has none.’” See Raggi Dissent at 1; see also id. at
     8. This will mislead the reader, although doubtless unintentionally. It is true that the words “it

                                                         3
1           The first of these sentences, noting RICO’s silence on extraterritorial application, could

2    mean that the RICO statute does not suggest that it might broadly apply in all of its provisions to

3    extraterritorial conduct. Alternatively, the words of the sentence could also mean that RICO is

 4   “silent” as to whether any of its component provisions can ever apply to extraterritorial conduct.

 5   The first interpretation seems far more probable. First, if the statement carries the former

 6   meaning, it is indisputably correct. The RICO statute is indeed silent as to general

 7   extraterritorial application. There are no words in the statute which suggest, or even discuss, the

 8   possibility that foreign conduct might be considered violative of RICO, without regard to

 9   whether the particular predicate invoked applies to foreign conduct. On the other hand, if given

10   the second meaning, the statement would be either flatly incorrect, or at least misleading. As

11   explained above, RICO incorporates by reference the terms of other statutes. The Act explicitly

12   states that racketeering activity, which serves as a basis of RICO liability, includes any act

13   “indictable under” the incorporated predicate statutes, a number of which expressly provide that

14   foreign conduct is indictable. Whatever ultimate conclusion one might draw, RICO certainly

15   cannot be fairly described as “silent” on the question whether any predicate acts of racketeering

16   can consist of foreign conduct. Furthermore, the sentence about silence, if construed to mean

17   that RICO contains no indication whether any of its predicate acts of racketeering can include

18   foreign conduct, would seem contradicted by the second sentence on the issue, which recognizes

19   that “a number of RICO’s predicates possess an extraterritorial reach.” Norex, 631 F.3d at 33.


     has none” appear in the Norex decision. But in uttering those words, Norex was not speaking
     about the RICO statute. It was simply quoting Morrison’s framework for deciding whether a
     statute has extraterritorial application. Morrison stated (and Norex quoted), “[W]hen a statute
     gives no clear indication of an extraterritorial application, it has none.” Norex, 631 F.3d at 32
     (emphasis added). Norex never said that RICO has no extraterritorial application.

                                                       4
 1           The second sentence, if taken out of context, could have either of two meanings:

 2           (1) In view of Morrison, we reject the plaintiff=s argument that, by providing for
 3   extraterritorial application of some of RICO’s predicates, Congress manifested a clear intention
 4   that RICO have extraterritorial application in all of its provisions.
 5
 6           (2) Notwithstanding Congress’s express provision that “racketeering activity” include
 7   some clearly specified foreign conduct, Morrison requires that racketeering activity be construed
 8   as excluding all foreign conduct.
 9
10           The first interpretation is clear, logical, and entirely consistent with Morrison. Under

11   Morrison, the presumption against extraterritorial applicability requires that statutes be

12   understood not to apply extraterritorially absent a clear provision for extraterritorial application.3

13           The fact that Congress made clear provision in the terms of RICO that some of its

14   predicates apply extraterritorially does not manifest a clear congressional intent that its other

15   provisions also apply extraterritorially. With respect to extraterritorial application of these other

16   provisions, RICO would flunk the Morrison test. This is so clear a consequence of Morrison’s

17   rule that one short sentence is entirely sufficient to state the point. It requires no further

18   explanation.

19           On the other hand, if the Norex panel had in mind version (2) when it said that “Morrison

20   . . . forecloses [the plaintiff’s] argument,” one would wonder why the panel came to that

     3
             Judge Raggi suggests that Morrison’s discussion of Section 30(b) of the Exchange Act
     supports her view that RICO can never have extraterritorial application. See Raggi Dissent at 8–
     10. In fact, this portion of Morrison’s discussion supports the panel’s interpretation of RICO. In
     Morrison, the parties argued that, because one small provision of the Exchange Act could
     potentially apply extraterritorially, the entire Act should be read as applying extraterritorially.
     See Morrison, 561 U.S. at 263–65. The Morrison court rejected this argument, holding that
     “when a statute provides for some extraterritorial application, the presumption against
     extraterritoriality operates to limit that provision to its terms.” Morrison, 561 U.S. at 265
     (emphasis added). In RJR Nabisco, our panel followed precisely this line of reasoning, holding
     that where Congress has prescribed extraterritorial application for certain of RICO’s predicates,
     it applies extraterritorially “only to [that] extent.” 764 F.3d at 136.


                                                        5
 1   conclusion. Id. Where Congress expressly provided that acts “indictable” under statutes listed in

 2   RICO are “racketeering acts,” which justify RICO liability, and Congress included in that list

 3   statutes that expressly provide for extraterritorial application (indeed some that apply only to

 4   foreign conduct), Congress did exactly what Morrison requires for extraterritorial application. It

 5   manifested a clear intention that RICO apply extraterritorially—to that limited extent. If the

 6   Norex opinion meant that, notwithstanding this clear manifestation of congressional intent,

 7   Morrison requires that RICO be interpreted as never applying to foreign conduct, one would

 8   wonder why the Norex panel reached that conclusion and how it could be justified. The

 9   assertion would cry out for further explanation, if indeed any adequate explanation could be

10   found. Notwithstanding the facial ambiguity of the sentence, the brevity of the Norex panel’s

11   treatment of the subject strongly suggests that it meant to convey the simple, noncontroversial

12   proposition expressed in version (1) above, and not the puzzling proposition expressed in version

13   (2).

14          In short, recognizing the potential ambiguity in Norex’s brief discussion of this point, by

15   far the sounder interpretation of that ruling is that RICO’s clear manifestation of intent that some

16   of its provisions apply to foreign conduct permits extraterritorial application of RICO in those

17   situations, but does not justify interpreting every provision of RICO as being extraterritorial.

18   The panel’s ruling in this case was in full agreement with that proposition.

19          Some colleagues are troubled by the prospect of applying RICO to extraterritorial

20   conduct, which they deem unwise. Whether this is wise or unwise is not the court’s business

21   when Congress has legislated clearly on the issue. Congress provided in the RICO statute that

22   acts “indictable under” a list of predicate acts are racketeering acts. That ends our inquiry.


                                                      6
1   I therefore concur with the court’s decision to deny rehearing in banc.




                                             7
DENNIS JACOBS, Circuit Judge, joined by JOSÉ A. CABRANES, REENA
RAGGI, DEBRA ANN LIVINGSTON, and GERARD E. LYNCH, Circuit Judges,
dissenting from the denial of rehearing in banc:

      I respectfully dissent from denial of rehearing in banc.  The panel opinion

in this appeal is in taut tension with our earlier opinion in Norex Petroleum Ltd.

v. Access Industries, Inc., 631 F.3d 29 (2d Cir. 2010) (per curiam).  The resulting

instability will likely require in banc review to reconcile these precedents, or to

jettison one of them.

      Both cases address the extraterritorial application of the Racketeer

Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1961 et seq. 

They reach dissonant conclusions as to: (1) whether RICO may apply

extraterritorially, compare Norex, 631 F.3d at 31, with European Cmty. v. RJR

Nabisco, Inc., 764 F.3d 129, 136 (2d Cir. 2014); (2) whether Supreme Court

precedent “forecloses [the] argument that because a number of RICO’s predicate

acts possess an extraterritorial reach, RICO itself possesses an extraterritorial

reach,” Norex, 631 F.3d at 33; compare id., with RJR Nabisco, 764 F.3d at 136; and

(3) the very definition of an extraterritorial application of RICO, namely whether

extraterritoriality turns on the foreign locus of the enterprise or the foreign locus

of the predicate acts, compare Norex 631 F.3d at 31, 33, with RJR Nabisco, 764 F.3d

at 136, 142.
      The frequency of RICO litigation in this Circuit all but ensures that district

courts will face vexing questions about this.  Litigation on the fault lines of Norex

and RJR Nabisco is likely to present “a controlling question of law as to which

there is substantial ground for difference of opinion” and whose resolution “may

materially advance the ultimate termination of the litigation.”  28 U.S.C.

§ 1292(b).  Under such conditions, “district courts should not hesitate to certify an

interlocutory appeal.”  Mohawk Indus., Inc. v. Carpenter, 558 U.S. 100, 111

(2009).




                                          2
 1   JOSÉ A. CABRANES, Circuit Judge, joined by DENNIS JACOBS, REENA RAGGI, and
 2   DEBRA ANN LIVINGSTON, Circuit Judges, dissenting from the order denying rehearing
 3   en banc:
 4           The question presented in this civil case is whether the RICO statute1 applies
 5   extraterritorially.
 6           This is an important question, and it has been answered in a novel and artful way by a panel
 7   of our Court. Absent review by the Supreme Court, the panel’s interpretation will have a significant
 8   and long-term adverse impact on activities abroad that we have heretofore assumed were governed
 9   primarily by the laws of the territories where those activities occurred.
10           After a close and considered vote, the en banc court has decided to forgo the possibility of
11   reviewing the panel’s opinion.2 From that regrettable decision I respectfully dissent.
12           If this decision remains undisturbed, the prevailing plaintiffs here, the European Community
13   and its member states,3 will have achieved a pyrrhic victory, and one that the Community’s
14   constituents will have cause to regret in the years ahead. Why? Because its citizens, natural and
15   corporate, are among the likely targets of future RICO actions under the panel’s interpretation of
16   the statute.
17           The panel holds that RICO itself has an extraterritorial reach if and when one of RICO’s
18   predicate statutes has an extraterritorial reach. This reasoning conflates the question of whether RICO
19   applies extraterritorially with whether the statute’s definition of “racketeering activity” includes
20   predicate offenses that can be charged abroad. If RICO were merely an additional criminal—or, as is
21   often the case, civil—consequence for committing predicate offenses, this view might have some
22   merit. But, as Judge Raggi’s compelling dissent makes clear, RICO is not simply designed to pile on



             1   18 U.S.C. §§ 1961–1968.
              2 Note that “the decision not to convene the en banc court does not necessarily mean that a case

     either lacks significance or was correctly decided. Indeed, the contrary may be true.” United States v. Taylor, 752
     F.3d 254, 256 (2d Cir. 2014) (Cabranes, J., dissenting from the denial of rehearing en banc) (describing the
     special history of en bancs in the Second Circuit and highlighting the various factors that may explain why a
     judge would vote in favor or against the convening of an en banc court).
             3 The European Community was “a governmental body created through collaboration among the
     majority of the nations of Europe.” Appellant’s Br. at 6. Since this lawsuit was originally filed, the European
     Community has been incorporated into the European Union. See European Cmty. v. RJR Nabisco, Inc., 764 F.3d
     129, 148 (2d Cir. 2014).

                                                             1
 1   punishment. Rather, the statute prohibits distinct behavior: conducting, controlling, or funding an
 2   enterprise through a pattern of racketeering.
 3              The panel overlooks the statutory text, going straight to the definition of “racketeering
 4   activity,” determining that some predicate acts are punishable abroad, and then splitting plaintiffs’
 5   RICO claim in two – one “domestic” RICO claim for those predicate acts that are not punishable
 6   abroad and that defendants allegedly committed in the United States, and one “extraterritorial”
 7   RICO claim for those predicate acts that are punishable abroad. This reasoning is flatly inconsistent
 8   with years of precedent from this Court, and the Supreme Court, that treats RICO as an offense
 9   distinct from its predicate acts. Although it is indisputable that Congress intended for certain RICO
10   predicate statutes to apply to actions or events abroad, there is no clear basis for concluding that
11   Congress intended for RICO itself to go along with them. For this reason, the panel’s opinion also
12   may allow an end-run around the revivified presumption against extraterritoriality in Morrison4 and
13   Kiobel.5
14              Indeed, there are many important criminal statutes which expressly make extraterritorial
15   activity indictable but say nothing about the availability of RICO in the circumstances they
16   address—perhaps because legislators were focusing more on the prosecutions of crimes, including
17   some involving acts of terrorism, and not on the treble damages and attorney’s fees available under
18   civil actions for damages. It is thus a red herring at best to suggest that, by incorporating a number
19   of mostly terrorism-related crimes within RICO,6 Congress also intended—without any clear
20   expression of affirmative intent—to give global reach to a whole host of non-terrorism-related7 civil



                4   Morrison v. Nat’l Aus. Bank Ltd., 561 U.S. 247 (2010).
                5   Kiobel v. Royal Dutch Petroleum Co., 133 S. Ct. 1659 (2013).
                The panel’s opinion, Judge Hall’s concurrence in support of the order denying rehearing en banc,
                6

     and Judge Lynch’s dissent from the order denying rehearing en banc are all very keen to locate RICO’s
     extraterritoriality within its terrorism-focused predicates. See RJR Nabisco, 764 F.3d at 136 (listing a number of
     RICO’s predicate statutes focused on terrorism offenses); Hall Concurrence at 1 (“Many of the predicates
     that apply to foreign conduct relate to international terrorism.”); Lynch Dissent at 1-2 (posing a hypothetical
     scenario involving a “revolutionary group based largely in a Middle Eastern country” that “plant[s] a bomb
     near a federal office building” and “behead[s] an abducted American journalist”).
               Indeed, RICO incorporates many predicates that are quite removed from the dark world of
                7

     international terrorism. See 18 U.S.C. § 1961(1) (incorporating statutes that outlaw trafficking in counterfeit
     copyrighted work (18 U.S.C. § 2319), embezzlement from pension and welfare funds (18 U.S.C. § 664), and
     other activities that have little connection to terrorism).

                                                                   2
 1   claims.8 This is a case of Congress giving an inch and the panel taking a mile. The dubiousness of the
 2   panel’s stretched reasoning—and its direct tension with Morrison and Kiobel—is only further
 3   reinforced by the fact that a plaintiff need not actually prove any of the extraterritorial predicates in
 4   order to sustain a civil claim for RICO activities alleged to have occurred entirely outside the United
 5   States.9
 6              To summarize: After more than four decades of experience with this complicated statute, a
 7   panel of our Court has discovered and announced a new, and potentially far-reaching, judicial
 8   interpretation of that statute—one that finds little support in the history of the statute, its
 9   implementation, or the precedents of the Supreme Court; that will encourage a new litigation
10   industry exposing business activities abroad to civil claims of “racketeering”;10 and that will invite
11   our courts to adjudicate civil RICO claims grounded on extraterritorial activities anywhere in the
12   world.




                8For example, plaintiffs in this Circuit, and others, have sought to use civil RICO claims to challenge
     supposedly unlawful business practices conducted in foreign countries by alleging, as a predicate act, that one
     aspect of the scheme involved laundering money through the United States in violation of 18 U.S.C. § 1951.
     See, e.g., Hourani v. Mirtchev, 943 F. Supp. 2d 159, 168 (D.D.C. 2013) (dismissing RICO claim that arose out of
     “extortion in Kazakhstan by a Kazakh actor of Plaintiffs’ Kazakhstan-based assets”); Republic of Iraq v. ABB AG,
     920 F. Supp. 2d 517 (S.D.N.Y. 2013) (dismissing RICO claim that related to alleged mismanagement in Iraq
     of the United Nations Oil-for-Food program); Cedeno v. Intech Grp., Inc., 733 F. Supp. 2d 471 (S.D.N.Y. 2010)
     (dismissing RICO claim that alleged, inter alia, that Venezuelan officials and entities damaged a company
     incorporated in the British Virgin Islands). The panel in RJR Nabisco, which identifies money laundering as a
     predicate act that extends RICO extraterritorially, welcomes such claims into federal court. See 764 F.3d at
     139–40.
              9 It is also worth noting that the United States, in its amicus brief, does not adopt the predicate-centric

     view of the panel. Needless to say, they also do not invoke the panel’s view that RICO’s criminal predicates
     extend the extraterritorial jurisdiction of the statute for non-terrorism-related civil claims. See Brief of the
     United States 9–20.
                See Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 529-30 (1985) (Powell, J., dissenting) (lamenting the
                10

     expansion of RICO to include civil racketeering charges “brought—in the unfettered discretion of private
     litigants—in federal court against legitimate businesses seeking treble damages in ordinary fraud and contract
     cases”).

                                                              3
 


REENA  RAGGI,  Circuit  Judge,  joined  by  DENNIS  JACOBS,  JOSÉ  A.  CABRANES,  and 
DEBRA  ANN  LIVINGSTON, Circuit Judges, dissenting from the denial of rehearing 
en banc: 
 
      Since  Morrison  v.  National  Australia  Bank  Ltd.,  561  U.S.  247  (2010) 

(“Morrison”),  courts  in  this  circuit  and  around  the  nation  uniformly  have  held 

that the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. 

§  1961  et  seq.,  does  not  apply  extraterritorially.    These  courts  have  sometimes 

differed  in  how  they  determined  whether  a  particular  RICO  application  was 

domestic or extraterritorial, but their underlying assumption has been consistent: 

“RICO  is  silent  as  to  any  extraterritorial  application”  and,  therefore,  “it  has 

none.”  Norex Petroleum Ltd. v. Access Indus., Inc., 631 F.3d 29, 33 (2d Cir. 2010) 

(“Norex”) (internal quotation marks omitted).1 



                                                            
1  See  United  States  v.  Chao  Fan  Xu,  706  F.3d  965,  974–75  (9th  Cir.  2013) 
(recognizing presumption that RICO does not apply extraterritorially); Hourani 
v.  Mirtchev,  943  F.  Supp.  2d  159  (D.D.C.  2013);  In  re  LIBOR‐Based  Fin. 
Instruments  Antitrust  Litig.,  935  F.  Supp.  2d  666  (S.D.N.Y.  2013);  Adhikari  v. 
Daoud & Partners, No. 09 Civ. 1237, 2013 WL 4511354 (S.D. Tex. Aug. 23, 2013); 
Petroleos Mexicanos v. SK Eng’g & Const. Co., No. 12 Civ. 9070 (LLS), 2013 WL 
3936191 (S.D.N.Y. July 30, 2013); Republic of Iraq v. ABB AG, 920 F. Supp. 2d 517 
(S.D.N.Y.  2013);  Tymoshenko  v.  Firtash,  No.  11  Civ.  2794  (KMW),  2013  WL 
1234821 (S.D.N.Y. Mar. 26, 2013); Mitsui O.S.K. Lines, Ltd. v. Seamaster Logistics, 
Inc., 871 F. Supp. 2d 933 (N.D. Cal. 2012); Aluminum Bahrain B.S.C. v. Alcoa Inc., 
No. 8‐299, 2012 WL 2093997 (W.D. Pa. June 11, 2012); Chevron Corp. v. Donziger, 
871 F. Supp. 2d 229 (S.D.N.Y. 2012); Sorota v. Sosa, 842 F. Supp. 2d 1345 (S.D. Fla. 
2012);  In  re  Toyota  Motor  Corp.,  785  F.  Supp.  2d  883  (C.D.  Cal.  2011);  United 

                                                               1 
 


              In this civil case, a panel of the court untethers RICO from its mooring on 

United  States  shores  and  concludes,  for  the  first  time,  that  the  statute  reaches 

overseas—even to a foreign enterprise conducted through an essentially foreign 

pattern  of  racketeering—so  long  as  one  predicate  act  is  alleged  that  references 

conduct  that  could  be  prosecuted  under  a  criminal  statute  that  itself  reaches 

extraterritorially.  See European Cmty. v. RJR Nabisco, Inc., 764 F.3d 129, 136–37 

(2d Cir. 2014) (“RJR Nabisco”).2  That same panel concludes that whether a RICO 

claim is domestic or extraterritorial depends not on the locus of the enterprise or 

                                                                                                                                                                                                
States  v.  Philip  Morris  USA,  Inc.,  783  F.  Supp.  2d  23  (D.D.C.  2011);  Cedeno  v. 
Intech Grp., Inc., 733 F. Supp. 2d 471 (S.D.N.Y. 2010). 
 
2 As summarized by the RJR Nabisco panel, the racketeering scheme here at issue 

involved  a  multi‐step  process  beginning  with  the  smuggling  of  narcotics  into 
Europe  by  Colombian  and  Russian  criminal  organizations,  which  “laundered” 
their euro proceeds through money brokers.  Those brokers then sold the euros 
at  a  discount  to  cigarette  importers  who  used  the  money  to  purchase  RJR’s 
cigarettes  from  wholesalers.    The  complaint  alleges  that  RJR  directed  and 
controlled this money‐laundering scheme by, inter alia, concealing the identity of 
cigarette  purchasers,  shipping  cigarettes  through  Panama  to  shield  the 
transactions  from  scrutiny,  and  bribing  Colombian  border  guards  in  order  to 
allow  its  employees  to  enter  the  country  illegally  to  receive  payments  for 
cigarettes and then to travel to Venezuela, from where funds were wired to RJR 
Nabisco  accounts  in  the  United  States.    See  RJR  Nabisco,  764  F.3d  at  135.    In 
addition  to  extraterritorially  proscribed  money  laundering,  see  18  U.S.C. 
§ 1956(f),  the  complaint  charges  RJR  Nabisco  with  the  predicate  extraterritorial 
crime  of  providing  material  support  for  terrorism  insofar  as  some  cigarettes 
acquired in the described scheme were sold in Iraq to or for the benefit of various 
terrorist groups.  See Second Am. Compl. ¶¶ 75–83; 18 U.S.C. § 2339B(d)(2). 

                                                                                              2 
 


the  pattern  of  racketeering  (or  on  some  relationship  between  the  two),  but 

instead  on  the  location  of  particular  predicate  acts.    See  id.  at  140–41.    In  so 

holding,  the  panel  rejects  the district  court’s determination  that  RICO’s  focus  is 

the enterprise, that the locus of the enterprise determines whether RICO is being 

applied  domestically  or  extraterritorially,  and  that  RICO  has  no  extraterritorial 

application to foreign enterprises.  See European Cmty. v. RJR Nabisco, Inc., No. 

02 Civ. 5771 (NGG), 2011 WL 843957, at *4–7 (E.D.N.Y. Mar. 8, 2011). 

       RJR Nabisco has moved for this court to rehear the case en banc.  I vote to 

grant  that  review  because,  like  a  number  of  my  colleagues,  I  think  the  panel’s 

treatment  of  RICO’s  extraterritorial  application  conflicts  with  controlling 

precedent,  specifically,  (1)  the  Supreme  Court’s  holding  in  Morrison,  which 

mandates a presumption against the extraterritorial application of United States 

statutes unless Congress clearly expresses an affirmative intent to have a statute 

reach abroad; and (2) our holding in Norex (relying on Morrison) that RICO does 

not apply extraterritorially even though some of its predicate acts are crimes that 

could be prosecuted extraterritorially. 

       My  concern  with  the  panel’s  reliance  on  individual  predicate  acts  to 

support RICO’s extraterritorial reach extends also to its reliance on predicate acts 




                                               3 
 


to  determine  when  RICO  is  being  applied  domestically  and  extraterritorially.  

Morrison used the “focus” of  a statute to determine its application.  561 U.S. at 

266.  Precedent emphasizes that RICO’s “focus” is not the alleged predicate acts, 

but  the  relationship  between  a  pattern  of  racketeering  (demonstrated  by 

predicate acts) and an identified enterprise.  See, e.g., United States v. Basciano, 

599  F.3d  184,  205–06  (2d  Cir.  2010);  see  also  United  States  v.  Chao  Fan  Xu,  706 

F.3d  965,  975  (9th  Cir.  2013)  (collecting  cases  identifying  either  “enterprise”  or 

“pattern  of  racketeering”  as  RICO’s  focus).    Nor  can  the  RJR  Nabisco  panel 

suggest otherwise by characterizing RICO as an aggravating statute that simply 

adds new consequences to the predicate offenses.  See RJR Nabisco, 764 F.3d at 

135.    That  premise,  from  which  the  rest  of  the  panel’s  analysis  flows,  is  also  at 

odds  with  precedent.    Successive  prosecutions  for  greater  and  lesser  included 

offenses  implicate  double  jeopardy.    See  Brown  v.  Ohio,  432  U.S.  161,  167–69 

(1977).  But prosecutions for both RICO and predicate acts of racketeering do not.  

See United States v. Basciano, 599 F.3d at 205–06.   

       In light of these concerns, this court needs to give further consideration to 

two  issues:  (1)  whether  RICO  applies  extraterritorially,  and  (2)  the  criteria  for 

determining  whether  a  RICO  claim  is  domestic  or  extraterritorial.    Insofar  as  a 




                                               4 
 


majority  of  the  active  members  of  the  court  decline  to  convene  en  banc  for  this 

purpose, I respectfully dissent. 

1.    The Extraterritoriality Holdings in Morrison and Norex   

       To  explain  how  the  panel  decision  conflicts  with  controlling 

extraterritoriality precedent—both generally, as stated by the Supreme Court in 

Morrison,  and  specifically,  as  applied  to  RICO  by  this  court  in  Norex—it  is 

necessary briefly to discuss that precedent. 

         In Morrison, the Supreme Court reaffirmed a strong presumption against 

the  extraterritorial  application  of  any  United  States  statute  “unless  there  is  the 

affirmative  intention  of  the  Congress  clearly  expressed  to  give  a  statute 

extraterritorial  effect.”  561  U.S.  at  255  (internal  quotation  marks  omitted).  

Morrison found no such clear expression of affirmative intent in Section 10(b) of 

the  Securities  Exchange  Act  of  1934,  even  though  the  statute’s  prohibition  of 

fraud “in connection with the purchase or sale of any security” referenced means 

or  instrumentalities  of  interstate  commerce,  which  by  definition  includes 

commerce  with  foreign  countries.    See  15  U.S.C.  §  78j(b);  id.  §  78c(a)(17).    In  so 

holding, the Supreme Court specifically rejected the “conduct” and “effects” tests 

developed  by  this  court  to  “discern”  when  Congress  would  have  wanted  a 




                                               5 
 


statute, otherwise “silent as to . .  . extraterritorial application,” to reach abroad.  

See Morrison, 561 U.S. at 255–61 (discussing and rejecting that approach in favor 

of  application  of  presumption  against  extraterritoriality  “in  all  cases”).    To  be 

sure,  Morrison  noted  that  the  presumption  against  extraterritoriality  is  not  a 

clear  statement  rule.    In  short,  it  does  not  demand  that  a  statute  expressly  say 

“this  law  applies  abroad”;  “context  can  be  consulted  as  well.”    Id.  at  265.3    But 

Morrison                     emphasized                        that,    whatever    the    purported    indicator    of 

extraterritoriality,  it  must  clearly  and  affirmatively  signal  Congress’s  intent  for 

the  statute  to  reach  outside  this  country’s  borders.    See  id.    Statutory 

constructions  that  are  merely  “possible  .  .  .  do  not  override  the  presumption 

against extraterritoriality.”  Id. at 264.4 

                                                            
3   I  understand  this  to  mean  statutory  context,  not  legislative  history,  because  if 
Congress’s intent remains uncertain after all canons of construction are applied, 
see generally Cohen v. JP Morgan Chase & Co., 498 F.3d 111, 116 (2d Cir. 2007) 
(allowing  consideration  of  legislative  history  only  in  those  circumstances), 
Congress can hardly be said to have clearly expressed its affirmative intent for a 
statute to reach extraterritorially. 
 
4 In fact, Congress is generally explicit in stating its intent for a statute to reach 

extraterritorially.    The  money  laundering  and  material  support  predicates 
alleged  here  are  proscribed  by  criminal  statutes  that  explicitly  provide  for 
extraterritoriality.  As to money laundering, Congress has stated, 
 
         There  is  extraterritorial  jurisdiction  over  the  conduct  prohibited  by 
         this section if—(1) the conduct is by a United States citizen or, in the 

                                                                            6 
 


              As  this  court  has  long  recognized,  the  “RICO  statute  is  silent  as  to  any 

extraterritorial application.”  North South Fin. Corp. v. Al‐Turki, 100 F.3d 1046, 

                                                                                                                                                                                                
       case of a non‐United States citizen, the conduct occurs in part in the 
       United States; and (2) the transaction or series of related transactions 
       involves  funds  or  monetary  instruments  of  a  value  exceeding 
       $10,000. 
        
18  U.S.C.  §  1956(f).    As  to  material  support  for  terrorism,  Congress  has  stated, 
“There is extraterritorial Federal jurisdiction over an offense under this section.”  
Id. § 2339B(d)(2).   
 
       Dozens  of  other  statutes  are  similarly  explicit.    See,  e.g.,  id.  §  1596 
(authorizing  “extra‐territorial  jurisdiction”  over  any  human  trafficking  offense 
under  specified  statutory  sections  if  offender  is  United  States  national, 
permanent  resident  alien,  or  present  in  United  States);  21  U.S.C.  § 959  (stating 
that  prohibition  on  manufacture  or  distribution  of  controlled  substances  with 
intent  to  import  “is  intended  to  reach  acts  of  manufacture  or  distribution 
committed outside the territorial jurisdiction of the United States”).   
 
       The  intended  extraterritorial  application  of  other  statutes  is  made  clear 
from context: they proscribe only conduct occurring outside this country.  See 18 
U.S.C. § 1119 (stating that United States national who “kills or attempts to kill a 
national of the United States while such national is outside the United States but 
within the jurisdiction of another country” is subject to criminal penalties as if act 
had been committed within special maritime and territorial jurisdiction of United 
States);  id.  §  1204  (prohibiting  retention  of  “child  (who  has  been  in  the  United 
States)  outside  the  United  States  with  intent  to  obstruct  the  lawful  exercise  of 
parental rights”).   
        
       In  all  these  circumstances,  courts  need  not  engage  in  “divining  what 
Congress would have wanted if it had thought of the situation before the court,” 
an exercise prohibited by Morrison, 561 U.S. at 261, because Congress has made 
its extraterritorial intent clear.  The RICO statute, however, does not admit such a 
conclusion. 

                                                                                              7 
 


1051 (2d Cir. 1996) (emphasis added); see also United States v. Chao Fan Xu, 706 

F.3d  at  974  [9th  Cir.]  (same).    Nevertheless,  before  Morrison,  we  had  borrowed 

the  conduct  and  effects  tests  from  our  securities  and  antitrust  jurisprudence  to 

allow  RICO  to  reach  extraterritorially  in  some  circumstances.    See  North  South 

Fin.  Corp.  v.  Al‐Turki,  100  F.3d  at  1051–52.    In  Norex,  however,  we 

acknowledged  that  Morrison  abrogated  these  tests,  mandating  both  a  generally 

applicable  presumption  and  “a  bright‐line  rule:  absent  a  clear  Congressional 

expression of a statute’s extraterritorial application, a statute lacks extraterritorial 

reach.”  Norex, 631 F.3d at 32.  Applying this rule to RICO, Norex identified no 

clear  expression  of  congressional  intent  for  extraterritorial  application.    Indeed, 

Norex reiterated this court’s earlier categorical conclusion that the RICO statute 

is  “‘silent  as  to  any  extraterritorial  application,’”  id.  (quoting  North  South  Fin. 

Corp. v. Al‐Turki, 100 F.3d at 1051, and declining to treat statement as dictum), 

and concluded therefrom that “‘it has none,’” id. (quoting Morrison, 561 U.S. at 

255).5 

                                                            
5  Judge  Hall,  concurring  in  the  denial  of  rehearing  en  banc,  submits  that  this 
description of Norex is misleading because “Norex never said that RICO has no 
extraterritorial application.”  Hall, J., Op. Concurring in Denial of Reh’g En Banc, 
ante at [3–4 n.2].  Perhaps not in haec verba.  But I respectfully submit that is the 
conclusion  fairly  derived  from  Norex’s  (1)  quotation  of  Morrison’s  rule  that 
“‘[w]hen  a  statute  gives  no  clear  indication  of  an  extraterritorial  application,  it 

                                                               8 
 


              Norex  then  proceeded  to  hold  that  Morrison  defeated  the  argument  that, 

just “because a number of RICO’s predicate acts possess an extraterritorial reach, 

RICO  itself  possesses  an  extraterritorial  reach.”    Id.  at  33.    In  so  ruling,  Norex 

cited to Morrison’s discussion of Section 30(b) of the Exchange Act, see 15 U.S.C. 

§ 78dd(b) (stating that Act and attending rules and regulations “shall not apply 

to  any  person  insofar  as  he  transacts  a  business  in  securities  without  the 

jurisdiction  of  the  United  States”  unless  he  does  so  in  violation  of  regulations 

promulgated  “to  prevent  .  .  .  evasion”  of  Act  (emphasis  added)).    The  Solicitor 

General  had  argued  that  the  exemption  would  have  no  function  if  the  Act  did 

not apply in the first instance to securities transactions abroad.  See Morrison, 561 

U.S.  at  264.    While  acknowledging  that  the  urged  construction  was  “possible,” 

the  Supreme  Court  concluded  that  such  a  possibility  was  insufficient  to 

overcome  the  presumption  against  extraterritoriality.    See  id.  (observing  that  it 

would  be  “odd  for  Congress  to  indicate  the  extraterritorial  application  of  the 

whole Exchange Act by means of a provision imposing a condition precedent to 

its  application  abroad”  or  by  limiting  “enabling  regulations  .  .  .  to  those 

                                                                                                                                                                                                
has none,” Norex, 631 F.3d at 32 (quoting Morrison, 561 U.S. at 255), and (2) its 
immediately  following  reiteration  that  RICO “‘is  silent  as  to  any  extraterritorial 
application,’” id. (quoting North South Fin. Corp. v. Al‐Turki, 100 F.3d at 1051).  
Silence is hardly a clear indicator.  

                                                                                              9 
 


preventing ‘evasion’ of the Act, rather than all those preventing ‘violation,’” and 

concluding  that  provision  was  “directed  at  actions  abroad  that  might  conceal  a 

domestic violation or might cause what would otherwise be a domestic violation 

to escape on a technicality”).  Indeed, the Supreme Court ruled that, even when a 

statute  clearly  “provides  for  some  extraterritorial  application,”  as  in  the  case  of 

Section  30(a),  15  U.S.C.  §  78dd(a),  “the  presumption  against  extraterritoriality 

operates to limit that provision to its terms.”  Morrison, 561 U.S. at 265.6    

              Norex’s  specific  reference  to  this  last  quoted  excerpt  from  Morrison,  see 

631  F.3d  at  32,  together  with  its  reiteration  of  RICO’s  silence  “as  to  any 

extraterritorial  application,”  id.  (internal  quotation  marks  omitted),  signal  that 

the extraterritorial reach of RICO’s predicate acts must also be limited “to [their] 

terms.”    The  terms  of  the  extraterritorial  crimes  identified  as  RICO  predicates 

authorize  extraterritorial  jurisdiction  for  prosecutions  under  the  referenced 

proscribing criminal statutes, not for RICO claims alleging such predicates. 



                                                            
6  By  its  terms,  Section  30(a)  expressly  reaches  certain  extraterritorial  securities 
transactions, notably, when the issuer has prescribed ties to the United States and 
the  defendant  broker  or  dealer  acts  in  contravention  of  SEC  rules  and 
regulations.  Thus, the Supreme Court’s treatment of Section 30(a)—limiting the 
extraterritorial reach of that provision to its terms—should not be conflated with 
its rejection of the argument that Section 30(b) only made sense if the Exchange 
Act applied extraterritorially.  See Morrison, 561 U.S. at 263–65. 

                                                               10 
 


       To conclude otherwise, the RJR Nabisco panel must read Norex narrowly 

to hold only that the inclusion of extraterritorial crimes in RICO’s list of predicate 

acts does not clearly signal Congress’s intent for RICO to reach “extraterritorially 

in  all  of  its  applications.”    RJR  Nabisco,  764  F.3d  at  136  (emphasis  in  original).  

The  panel  pronounces  it  error  to  interpret  Norex  to  hold  “that  RICO  can  never 

have extraterritorial reach in any of its applications.”  Id.  (emphasis in original).  

Thus  freed  from  Norex’s  categorical  pronouncement  that  “RICO  is  silent  as  to 

any  extraterritorial  application,”  631  F.3d  at  32  (internal  quotation  marks 

omitted; emphasis added), the panel concludes that Congress did indeed clearly 

express  its  affirmative  intent  to  have  RICO  reach  extraterritorially  when  a 

claim—including  a  civil  claim—alleges  a  pattern  of  racketeering  involving 

predicate  acts  proscribed  by  criminal  statutes  with  extraterritorial  reach:  “By 

incorporating  these  [extraterritorially  reaching  criminal]  statutes  into  RICO  as 

predicate racketeering acts, Congress has clearly communicated its intention that 

RICO apply to extraterritorial conduct to the extent that extraterritorial violations 

of those statutes serve as the basis for RICO liability.”  RJR Nabisco, 764 F.3d at 

137.  I am not persuaded by this analysis and, thus, think we need to rehear this 

case en banc.   




                                              11 
 


              First, the Norex decision is not so easily cabined as the RJR Nabisco panel 

suggests.  The complaint in Norex alleged predicate acts of money laundering by 

United  States  citizens  in  amounts  exceeding  $10,000.7    Such  conduct,  like  the 

money  laundering  at  issue  in  RJR  Nabisco,  is  specifically  proscribed 

extraterritorially.    See  18  U.S.C.  §  1956(a),  (f).    Thus,  Norex’s  rejection  of  RICO 

extraterritoriality  is  not  factually  distinguishable  from  this  case  so  as  to  signal 

only a general rule not applicable when a plaintiff pleads extraterritorial crimes 

as RICO predicates. 

              Second, and in any event, Norex and Morrison do not permit this court to 

locate  a  clear  expression  of  RICO’s  extraterritoriality  in  pleaded  predicates  that 

are  themselves  extraterritorial  crimes.    The  RJR  Nabisco  panel  justifies  that 

conclusion by observing that certain RICO predicates reference crimes that apply 

only to extraterritorial conduct.  See RJR Nabisco, 764 F.3d at 136 (citing 18 U.S.C. 

§  2332(a)  (prohibiting  killing  United  States  national  “while  such  national  is 

outside  the  United  States”),  and  id.  §  2423(c)  (prohibiting  “engaging  in  illicit 

sexual  conduct  in  foreign  places”)).    The  panel  finds  it  “hard  to  imagine  why 

Congress  would  incorporate  these  statutes  as  RICO  predicates  if  RICO  could 
                                                            
7 See First Am. Compl. ¶¶ 5–11, 168–70, 182–234, 304–16, J.A. 5579–81, 5556–57, 
5559–68, 5579–81, Norex Petroleum Ltd. v. Access Indus., Inc., No. 07‐4553‐cv (2d 
Cir. filed Jan. 9, 2008). 

                                                               12 
 


never  have  extraterritorial  application.”    Id.  at  136  (emphasis  in  original).  

Morrison, however, effectively declined to recognize such speculative reasoning 

as  a  substitute  for  Congress’s  clear  expression  of  affirmative  intent  when  it 

rejected the Solicitor General’s argument that an exception to extraterritoriality in 

the  Exchange  Act  made  sense  only  if  the  statute  applied  extraterritorially.    See 

561 U.S. at 263–65.   

       In  fact,  it  is  not  hard  to  imagine  why  Congress  would  have  included 

exclusively  extraterritorial  crimes  in  the  list  of  RICO  predicates  without 

necessarily  intending  to  extend  RICO’s  own  reach  extraterritorially.    Domestic 

enterprises  can  be  conducted  through  patterns  of  racketeering  manifested  by 

foreign as well as domestic acts.  For example, a domestic crime syndicate might 

be conducted through a pattern of racketeering characterized mostly by domestic 

drug trafficking and money laundering, but with its continuation enabled by the 

murder  of  an  American  rival  trafficker  while  the  rival  was  outside  the  United 

States.  Congress could well have determined that prosecutors should be allowed 

to  prove  such  an  extraterritorial  murder  as  a  racketeering  predicate  in  an 

essentially  domestic  pattern  of  racketeering  to  demonstrate  the  intended 

continuity  of  the  pattern  through  which  the  domestic  enterprise  would  be 




                                            13 
 


conducted.    See  generally  H.J.  Inc.  v.  Nw.  Bell  Tel.  Co.,  492  U.S.  229,  239–41 

(1989)  (discussing  relatedness  and  continuity  requirements  of  racketeering 

pattern). 

              Similarly,  a  foreign  terrorist  organization  might  engage  in  a  pattern  of 

racketeering  consisting  primarily  of  attacks  executed  in  the  United  States,  but 

financed  with  funds  collected  abroad.    See  18  U.S.C.  § 2339C(a),  (b)(2)(C)(ii).  

Congress  could  have  determined  that  prosecutors  seeking  to  prove  the 

relationship of the essentially domestic pattern to the foreign enterprise, as well 

as the means for ensuring continuity, should be allowed to prove such criminal 

extraterritorial financing.8 

              What is not clear from the inclusion of extraterritorially reaching crimes in 

the  list  of  RICO  predicates,  however,  is  Congress’s  affirmative  intent  further  to 

extend RICO’s reach to foreign enterprises conducted through essentially foreign 

patterns  of  racketeering  whenever  extraterritorial  crimes  are  alleged  predicate 

acts.  The panel submits that such a construction best ensures that “a defendant 
                                                            
8  This  second  hypothetical  assumes  that  RICO  can  apply  domestically  to  a 
foreign enterprise engaged in a pattern of racketeering within the United States.  
The  law  on  this  point  is  not  settled,  as  discussed  infra  at  [21–27].    The  point 
warrants  our  consideration  en  banc  particularly  if,  as  I  explain  in  that  same 
discussion, RICO’s domestic or extraterritorial application cannot be determined 
by reference  to  individual  predicate acts,  which  are  not  the statute’s  focus.    See 
Morrison, 561 U.S. at 267; United States v. Basciano, 599 F.3d at 205–06. 

                                                               14 
 


associated  with  a  foreign  enterprise”  is  not  permitted  “to  escape  liability  for 

conduct  that  indisputably  violates  a  RICO  predicate,”  citing  as  an  example  the 

killing  of  a  United  States  national  abroad,  conduct  made  criminal  by  18  U.S.C. 

§ 2332.  RJR Nabisco, 764 F.3d at 138.  The concern is unwarranted.  The United 

States  can  always  prosecute  persons  for  such  extraterritorial  homicides  directly 

under  § 2332.    Indeed,  it  has  successfully  done  so.    See,  e.g.,  In  re  Terrorist 

Bombings of U.S. Embassies in E. Afr., 552 F.3d 93, 107 (2d Cir. 2008) (upholding, 

inter  alia,  convictions  for  conspiracy  to  murder  U.S.  nationals  in  violation  of 

§ 2332).    Moreover,  the  maximum  punishment  a  defendant  would  face  under 

§ 2332—death—is  more,  not  less,  severe  than  the  maximum  life  sentence  he 

would face if convicted of violating RICO with a § 2332 predicate.  Compare 18 

U.S.C. § 2232, with id. § 1963(a). 

       Thus,  I  respectfully  submit  that  it  raises  a  false  alarm  to  suggest  that 

prosecutors will be thwarted in bringing terrorists to justice unless we recognize 

RICO  to  extend  extraterritorially  to  foreign  enterprises  conducted  through 

foreign  patterns  of  racketeering  upon  the  pleading  of  any  extraterritorial‐crime 

predicate.    Rather,  it  is  civil  litigants,  such  as  plaintiffs  here,  who  need  such  a 




                                               15 
 


ruling to pursue treble damages in United States courts for foreign racketeering 

injuries.9 

              It  is  particularly  difficult,  however,  to  locate  a  clear  expression  of 

affirmative congressional intent for civil RICO claims to reach extraterritorially in 

the  inclusion  of  extraterritorial  crimes  in  RICO’s  list  of  predicates.    By  their 

                                                            
9   In  focusing  on  terrorism  hypotheticals,  some  of  my  colleagues  reference  the 
legislative  objectives  of  the  USA  PATRIOT  Act,  which  added  certain 
extraterritorial  terrorism  crimes  to  RICO’s  list  of  predicates.    See  Hall,  J.,  Op. 
Concurring  in  Denial  of  Reh’g  En  Banc,  ante  at  [1–2];  Lynch,  J.,  Op.  Dissenting 
from  Denial  of  Reh’g  En  Banc,  post  at  [1–3].    For  reasons  discussed  supra  at 
[6 n.3],  I  do  not  think  Morrison  admits  consideration  of  such  extra‐textual 
sources in applying the presumption against extraterritoriality.   
 
          Furthermore, the cited references indicate only Congress’s intent to allow 
RICO  to  be  used  against  terrorists.    They  say  nothing  about  whether  that 
application can be extraterritorial as well as domestic.  Indeed, the 9/11 terrorist 
attacks  that  prompted  the  USA  PATRIOT  Act  involved  murderous  activity 
within the United States by a domestic cell of terrorists affiliated with a foreign 
organization. 
 
          In  any  event,  RJR  Nabisco’s  predicate‐based  analysis  is  not  limited  to 
terrorism  crimes  but  reaches  the  range  of  extraterritorial  crimes  listed  as  RICO 
predicates.    For  example,  Congress  included  in  that  list  18  U.S.C.  § 2423(c) 
(prohibiting  commercial  sex  abroad  with  persons  younger  than  18).    Does  that 
express  its  clear  intent  for  RICO  to  apply  extraterritorially  to  a  bordello 
enterprise  in  Thailand  that  secures  underage  prostitutes  for  American  travelers 
to that country?  The mere possibility that Congress’s intent could have reached 
that far is not enough to override the presumption against extraterritoriality.  See 
Morrison,  561  U.S.  at  264.    Such  caution  is  all  the  more  warranted  when  RJR 
Nabisco’s reasoning is applied to a civil RICO claim, for reasons I now discuss in 
text. 

                                                               16 
 


terms, the listed extraterritorial statutes authorize only criminal proceedings, not 

private actions.  Victims of such crimes may be awarded restitution as part of a 

defendant’s sentence or may be allowed to petition the government for shares of 

forfeited proceeds.  See 18 U.S.C. §§ 3663, 3663A; 28 C.F.R. § 9.1 et seq.  But the 

listed  extraterritorial  statutes—and  specifically  the  money  laundering  and 

material  support  statutes  here  at  issue—themselves  afford  private  persons  no 

civil  causes  of  action.    Thus,  while  the  RJR  Nabisco  panel  purports  to  be 

recognizing  RICO  extraterritoriality  only  to  the  extent  “liability  or  guilt  could 

attach  to  extraterritorial  conduct  under  the  relevant  RICO  predicate,”  RJR 

Nabisco,  764  F.3d  at  136,  it  in  fact  moves  RICO  well  beyond  the  referenced 

predicate  in  concluding  that  a  plaintiff  who  pleads  extraterritorial‐crime 

predicates can pursue a civil RICO claim for treble damages, although Congress 

provided no civil claim in the predicate criminal statute.       

       Might  Congress  have  approved  such  an  extension  of  RICO  if  it  had 

considered such a circumstance?  Possibly.  But Morrison does not permit courts 

to  apply  statutes  extraterritorially  by  “divining  what  Congress  would  have 

wanted if it had thought of the situation before the court.”  561 U.S. at 261.  No 

more does it permit the possibility of such congressional intent to overcome the 




                                            17 
 


presumption against extraterritoriality.  See id. at 264.  Only a clear expression of 

Congress’s affirmative intent that a statute reach extraterritorially can clear that 

hurdle.  See id.; accord Norex, 631 F.3d at 32.   

       For the reasons stated, I do not think Morrison and Norex permit our court 

to  identify  such  a  clear  expression  of  affirmative  intent  with  respect  to  the  civil 

RICO claim here at issue.  Accordingly, the court should rehear this case en banc 

to  ensure  a  RICO  extraterritoriality  determination  consistent  with  these 

precedents. 

2.     The Panel Assigns RICO Predicates a Greater Role than Warranted Under 
       RICO Jurisprudence  
    
       The  panel’s  decision  to  ground  RICO’s  extraterritorial  reach  in  the 

pleading of certain predicate acts also raises concerns under RICO jurisprudence.  

It  has  long  been  understood  that  the  conduct  proscribed  by  RICO  is  not  the 

individual predicate acts but, rather, the overall pattern of racketeering activity.  

See,  e.g.,  United  States  v.  Basciano,  599  F.3d  at  205–06  (“[I]t  is  the  pattern  of 

racketeering  activity,  not  the  predicates,  that  is  punished  by  a  racketeering 

conviction.”); see generally Agency Holding Corp. v. Malley‐Duff & Assocs., 483 

U.S. 143, 149 (1987) (observing that “RICO is designed to remedy injury caused 

by a pattern of racketeering”).  More precisely, what RICO prohibits are specified 



                                              18 
 


interactions between an identified enterprise and a pattern of racketeering.  See, 

e.g.,  United  States  v.  Russotti,  717  F.2d  27,  33  (2d  Cir.  1983)  (“[I]t  is  neither  the 

enterprise  standing  alone  nor  the  pattern  of  racketeering  activity  itself  which 

RICO criminalizes.  Rather, the combination of these two elements is the object of 

punishment under RICO.” (emphasis in original)).  Thus, RICO’s focus is not on 

any particular alleged predicate act but on (1) whether such predicate acts as are 

proved  demonstrate  the  requisite  “pattern  of  racketeering,”  a  matter  largely 

dependent on their relatedness and continuity, see H.J. Inc. v. Nw. Bell Tel. Co., 

492 U.S. at 239–41; accord United States v. Daidone, 471 F.3d 371, 374–76 (2d Cir. 

2006);  and  (2)  whether  that  pattern  or  its  proceeds  are  used  to  (a)  “invest”  in, 

(b) “acquire  or  maintain  .  .  .  any  interest  in  or  control  of,”  or  (c)  “conduct  or 

participate . . . in the conduct of” the alleged enterprise, 18 U.S.C. § 1962(a)–(c). 

       I  respectfully  submit  that  this  precedent  does  not  permit  RICO  to  be 

construed as a statute that simply “adds new criminal and civil consequences to 

the  predicate  offenses.”    RJR  Nabisco,  764  F.3d  at  135.    That  construction  is 

further  refuted  by  precedent  permitting  “a  defendant  to  be  prosecuted—either 

simultaneously  or  at  separate  times—for  both  substantive  racketeering  and  the 

predicate  crimes  evidencing  the  pattern  of  racketeering.”    United  States  v. 




                                                19 
 


Basciano,  599  F.3d  at  205;  cf.  Brown  v.  Ohio,  432  U.S.  at  167–69  (holding  that 

double  jeopardy  bars  successive  prosecutions  for  greater  and  lesser  included 

offenses). 

       When the role assigned to predicate acts under our RICO jurisprudence is 

thus understood—not as the object of the statute, but as a means for satisfying its 

pattern element—it is difficult to identify a clear expression of affirmative intent 

for civil RICO claims to reach extraterritorially simply from Congress’s inclusion 

of some extraterritorially reaching crimes in the list of possible RICO predicates, 

even when pleaded as part of the pattern of racketeering.   

       That  argument  is  defeated,  in  any  event,  by  the  fact  that  RICO  does  not 

require  proof  of  every  alleged  predicate  act  or  of  any  particular  predicate  acts.  

See  United  States  v.  Basciano,  599  F.3d  at  206.    The  law  demands  only  that  a 

RICO  plaintiff  prove  sufficient  predicate  acts  (but  not  fewer  than  two)  to 

demonstrate  the  required  pattern  of  racketeering.    See  id.    In  short,  a  plaintiff 

alleging a pattern of racketeering evidenced by various RICO predicates—some 

applying  extraterritorially,  others  applying  domestically—might  well  carry  his 

pattern  burden  without  proving  any  of  the  alleged  extraterritorial  predicates 

that, under the panel’s formulation, are the singular basis for permitting a RICO 




                                             20 
 


claim  to  reach  extraterritorially.    It  would  be  curious  for  Congress  to  locate  a 

statute’s extraterritorial reach in an allegation that need not be proved.  If, on the 

other  hand,  the  panel  intended  to  condition  RICO’s  extraterritorial  reach  on 

proof  of  the  alleged  extraterritorial‐crime  predicates—which  is  not  apparent 

from  its  opinion—it  departs  even  further  from  our  RICO  jurisprudence  in 

requiring  not  simply  proof  of  a  pattern  of  racketeering,  but  proof  of  particular 

predicates. 

       Thus, to ensure consistency in the role our jurisprudence assigns to RICO 

predicate  acts,  the  court  should  convene  en  banc  to  clarify  that  Congress’s 

identification of some extraterritorial crimes as RICO predicates does not clearly 

express  an  affirmative  intent  for  civil  RICO  claims  to  reach  extraterritorially 

whenever a plaintiff alleges such crimes as predicate acts.   

3.     Determining RICO’s Domestic and Extraterritorial Application 
 
       This case warrants rehearing for yet a third reason:  to clarify how courts 

should distinguish RICO’s domestic and extraterritorial applications.  Before RJR 

Nabisco, the understanding that RICO does not apply extraterritorially required 

courts  to  determine  whether  a  particular  RICO  claim  was  domestic  or 

extraterritorial.    That  inquiry  remains  necessary  after  RJR  Nabisco  because  the 




                                             21 
 


panel,  in  its  effort  to  distinguish  Norex,  decides  that  RICO  does  not  apply 

extraterritorially  when  the  alleged  predicates  are  not  extraterritorial  crimes.  

Without regard to the locus of the enterprise or pattern of racketeering, the panel 

rules that plaintiffs’ claim properly applied RICO extraterritorially to the extent it 

alleged extraterritorial‐crime predicates, at the same time that the claim properly 

applied  RICO  domestically  to  the  extent  it  alleged  domestic‐crime  predicates 

occurring  in  the  United  States.    This  reliance  on  individual  predicate  acts  to 

determine  whether  a  RICO  claim  is  domestic  or  extraterritorial  is  at  odds  with 

Morrison, Norex, and our RICO jurisprudence. 

       In  Morrison,  the  Supreme  Court  concluded  that  a  statute’s  application  is 

properly  determined  by  its  “focus,”  identified  by  looking  to  “the  objects  of  the 

statute’s solicitude.”  561 U.S. at 267.  Applying this standard to Section 10(b) of 

the  Exchange  Act,  which  prohibits  manipulative  or  deceptive  practices  in 

connection  with  the  purchase  or  sale  of  securities,  Morrison  concluded  that  the 

statute’s  focus  was  not  on  deceptive  conduct,  but  on  the  purchase  or  sale  of 

securities in the United States.  See id. (“Section 10(b) does not punish deceptive 

conduct, but only deceptive conduct ‘in connection with the purchase or sale of 

any  security  registered  on  a  national  securities  exchange  or  any  security  not  so 




                                            22 
 


registered.’”  (quoting  15  U.S.C.  §  78j(b))).    Thus,  the  Exchange  Act—which  the 

Court  had  already  held  did  not  apply  extraterritorially—could  not  be  applied 

domestically  to  challenge  foreign  purchases  or  sales  of  securities  based  on 

deceptive  conduct  in  the  United  States.    Domestic  application  required  the 

purchase or sale of securities in this country.  See id. 

       In Norex, this court cited Morrison to reject a claim that alleged predicate 

acts  of  racketeering  committed  within  the  United  States—mail  and  wire  fraud, 

money  laundering,  Hobbs  Act  and  Travel  Act  violations,  and  bribery—allowed 

RICO  to  apply  domestically  to  an  international  scheme  to  take  over  part  of  the 

Russian oil industry.  See Norex, 631 F.3d at 31–32.       

       The RJR Nabisco panel follows neither Morrison nor Norex in determining 

whether  plaintiffs’  claims  here  apply  RICO  extraterritorially  or  domestically.  

With no identification of RICO’s “focus,” as seemingly required by Morrison, the 

RJR Nabisco panel looks to predicate acts alone to determine RICO’s application, 

in  seeming  contravention  of  Norex.    Thus,  the  panel  concludes  that  plaintiffs’ 

claim  permissibly  applies  RICO  extraterritorially  for  those  predicate  acts 

occurring abroad (money laundering and support for terrorism), and permissibly 

applies  RICO  domestically  for  those  predicate  acts  occurring  in  this  country 




                                            23 
 


(wire fraud, money fraud, and Travel Act violations).  See RJR Nabisco, 764 F.3d 

at  140–43.    This  novel  approach—which  makes  individual  predicates 

determinative  of  RICO’s  application  without  regard  to  the  locus  of  the  overall 

pattern  of  racketeering  or  the  enterprise—warrants  en  banc  review  for  several 

reasons. 

       First,  this  court  needs  to  clarify  whether  Morrison  does  indeed  require 

courts  to  look  to  RICO’s  “focus”  to  determine  its  domestic  or  extraterritorial 

application.   

       Second, the court needs either to identify RICO’s “focus” or to resolve the 

tension between Norex and RJR Nabisco as to the role predicate acts can play in 

determining RICO’s application.   

       These matters raise significant challenges.  Following Morrison, and before 

RJR  Nabisco,  courts  had  generally  assumed  that  RICO’s  domestic  or 

extraterritorial  application  should  be  determined  by  reference  to  “the  ‘focus’  of 

congressional  concern”  in  enacting  the  statute.    Morrison,  561  U.S.  at  266;  see 

United States v. Chao Fan Xu, 706 F.3d at 975 (collecting cases).  Norex’s citation 

to  Morrison  in  its  rejection  of  plaintiff’s  domestic  application  argument  in  that 

case is consistent with this assumption.  See Norex, 631 F.3d at 32.  Thus, the RJR 




                                            24 
 


Nabisco  panel’s  failure  to  identify  RICO’s  focus,  or  to  explain  why  it  did  not 

need to do so to determine the statute’s application in this case, creates confusion 

in this circuit as to Morrison’s controlling effect.  This court needs to clarify the 

matter en banc. 

       Further,  courts  that  have  applied  Morrison’s  “focus”  standard  to  RICO 

have found the inquiry “far from clear‐cut.”  United States v. Chao Fan Xu, 706 

F.3d  at  975.    “[T]wo  camps”  have  emerged:  one  locating  RICO’s  focus  in  the 

“enterprise,”  the  other  in  the  “pattern  of  racketeering.”    Id.  (collecting  cases).  

The  district  court  in  this  case  joined  the  first  camp  based  on  the  fact  that  RICO 

prohibits only racketeering activity connected in specified ways to an enterprise, 

which  it  thought  paralleled  Morrison’s  construction  of  the  Exchange  Act  to 

punish  only  frauds  in  connection  with  domestic  securities  transactions.    See 

European Cmty. v. RJR Nabisco, Inc., 2011 WL 843957, at *5 (citing Morrison, 561 

U.S. at 266–67).  By contrast, the Ninth Circuit joined the “pattern” camp, citing 

Supreme  Court  decisions  stating  that  “the  heart  of  any  RICO  complaint  is  the 

allegation of a pattern of racketeering,” Agency Holding Corp. v. Malley‐Duff & 

Assocs.,  483  U.S.  at  154  (emphasis  in  original),  and  referencing  “RICO’s  key 




                                              25 
 


requirement of a pattern of racketeering,” H.J. Inc. v. Nw. Bell Tel. Co., 492 U.S. 

at 236.  See United States v. Chao Fan Xu, 706 F.3d at 976–77.10 

              In  Norex,  this  court  did  not  choose  between  “enterprise”  and  “pattern” 

but, rather, considered both in concluding that a few predicate acts in the United 

States  were  insufficient  to  allow  RICO  to  be  applied  domestically  to  a  claim 

involving a foreign enterprise and an essentially foreign pattern of racketeering.  

See 631 F.3d at 32.  But Norex’s treatment of the matter is so brief as to preclude a 
                                                            
10  In  United  States  v.  Chao  Fan  Xu,  the  Ninth  Circuit  upheld  the  domestic 
application of RICO to defendants’ prosecution for scheming “to steal large sums 
of money from the Bank of China and to get away with it in the United States.”  
706 F.3d at 979 (observing that immigration and bank fraud parts of pattern were 
inextricably  linked  so  that  without  immigration  fraud  in  United  States,  bank 
fraud in China would have been “a dangerous failure”).  Thus, while defendants’ 
“pattern  of  racketeering  activity  may  have  been  conceived  and  planned 
overseas,”  the  court  concluded  that  “it  was  executed  and  perpetuated  in  the 
United States,” allowing for domestic prosecution.  Id. 
 
        Judge  Lynch  poses  certain  hypotheticals  that  might  also  support  RICO’s 
domestic  application  to  foreign  enterprises  conducted  through  patterns  of 
racketeering occurring wholly (or at least mainly) in this country.  See Lynch, J., 
Op. Dissenting from Denial of Reh’g En Banc, post at [3].  But if pattern, rather 
than  enterprise  (or  enterprise  in  relation  to  pattern),  is  RICO’s  focus  and,  thus, 
determinative of its application, this court should say so en banc.  In any event, a 
conclusion  that  RICO  can  apply  domestically  to  a  pattern  of  racketeering 
occurring  mostly  in  the  United  States  does  not  ineluctably  lead  to  a  conclusion 
that  Congress  intended  for  RICO  to  apply  extraterritorially  to  a  foreign 
enterprise  conducted  through  an  entirely  foreign  pattern  of  racketeering 
evidenced by predicates prohibited by extraterritorially reaching statutes—Judge 
Lynch’s  third  hypothetical.    See  id.  at  [3].    Certainly,  that  possibility  warrants 
further careful consideration en banc. 

                                                               26 
 


confident  conclusion  on  the  focus  point.    In  any  event,  Norex  does  not  specify 

whether enterprise and pattern should be viewed independently, conjunctively, 

or alternatively in determining RICO’s application.11   

              Where  Norex  is  not  ambiguous,  however,  is  in  its  rejection  of  predicate 

acts as determinative of RICO’s application.  This is evident from its affirmance 

of the dismissal of  RICO claims despite allegations that domestic predicate acts 

were part of the pattern of racketeering.  See 631 F.3d at 31.  It is RJR Nabisco that 

confuses that point by relying exclusively on predicate acts to determine RICO’s 

application.    That  approach  is  not  only  at  odds  with  Norex  and  Morrison,  but 

also  with  our  RICO  jurisprudence,  which  as  already  discussed  holds  that  the 

object of racketeering “is to conduct the affairs of a charged enterprise through a 

pattern of racketeering, not to commit discrete predicate acts.”  United States v. 

Pizzonia, 577 F.3d 455, 459  (2d  Cir.  2009);  accord United  States  v. Basciano,  599 

F.3d at 205–06; see also United States v. Russotti, 717 F.2d at 33. 




                                                            
11    In  its  amicus  filing,  the  United  States  urges  that  RICO’s  focus  is  on  both  the 
enterprise and the pattern of racketeering, so that these elements can operate in 
the alternative to allow RICO to apply domestically if either the enterprise or the 
overall  pattern  of  racketeering  operates  in  the  United  States.    See  Br.  of  United 
States 7–20.  The United States does not argue in favor of the RJR Nabisco panel’s 
use of individual predicate acts to determine RICO’s application. 

                                                               27 
 


       Thus, if Morrison does, indeed, require RICO application to be determined 

by  reference  to  the  statute’s  focus,  and  if  discrete  predicate  acts  are  not  RICO’s 

focus,  this  court  needs  to  clarify  en  banc  how  a  court  properly  determines 

whether a RICO application is domestic or extraterritorial.  

       Accordingly, I respectfully dissent from the court’s decision not to rehear 

this case en banc to provide needed clarity as to both (1) whether RICO applies 

extraterritorially,  and  (2)  the  criteria  for  determining  whether  a  RICO  claim  is 

domestic or extraterritorial. 




                                              28 
GERARD E. LYNCH, Circuit Judge, dissenting from the denial of rehearing en banc:

        I join in Judge Jacobs’s dissent from denial of rehearing en banc, because I believe that

the tension between the panel’s holding in this case, European Community v. RJR Nabisco, Inc.,

764 F.3d 129 (2d Cir. 2014), and our prior decision in Norex Petroleum Ltd. v. Access Industries,

Inc., 631 F.3d 29 (2d Cir. 2010), should be resolved. But I do not join the other dissenters in

their criticisms of the panel’s resolution. Because en banc review has been denied, I do not need

to come to a definitive conclusion about the circumstances under which RICO reaches conduct

occurring outside the United States. Largely for the reasons explained by Judge Hall, however, I

am inclined to think that the better outcome would be to adopt the view of the panel in this case

and hold that RICO applies to patterns of predicate acts committed abroad where those predicate

acts violate federal statutes with express extraterritorial reach.

        As Judge Raggi’s dissent demonstrates, the very concept of “extraterritorial application”

of a complex statute such as RICO is a vexing one. See Raggi Dissent at 22-28. Such a question

is not easily resolved by sloganeering reference to the presumption against extraterritoriality

emphasized in Morrison v. National Australia Bank, Ltd., 561 U.S. 247, 255 (2010). The

primary prohibition in RICO, and the one at issue here, criminalizes “conduct[ing] . . . [an]

enterprise’s affairs . . . through a pattern of racketeering activity.” 18 U.S.C. § 1962(c). The two

key elements are the “enterprise” and the “pattern of racketeering.” Which, or what

combination, of these elements is critical in determining whether any given application of RICO

is “extraterritorial”?

        Consider the following hypothetical. A leader of a revolutionary group based largely in a

Middle Eastern country, in an effort to intimidate the United States to stop supporting that

country’s government, plots and carries out two crimes: planting a bomb near a federal office
building in an American city, resulting in the deaths of several people, and beheading an

abducted American journalist in the country where the group primarily operates. The terrorist

leader is captured by American forces, and is indicted in the United States for violating RICO.

The revolutionary group likely qualifies as an “enterprise” under the definition of that term in 18

U.S.C. § 1961(4). Both terrorist strikes qualify as one or more racketeering acts: the bombing in

the United States involves arson and murder, chargeable as felonies under the law of the relevant

state, see 18 U.S.C. § 1961(1)(A), and the murder of an American abroad is indictable

under 18 U.S.C. § 2332(a)(1) – a statute that by its very terms can only be violated by acts

outside the United States – which is listed as a RICO predicate under 18 U.S.C. §§ 1961(1)(G)

and 2332b(g)(5)(B). Together, these acts very likely form a “pattern of racketeering activity,”

since they are related to each other in goals, methods, and personnel, and they exhibit continuity

because the enterprise has a continuous existence that threatens to involve further such acts. See

18 U.S.C. § 1961(5); H.J. Inc. v. Northwestern Bell Telephone Co., 492 U.S. 229, 240-42 (1989).

       Is this an “extraterritorial” application of RICO? Not an easy question. The enterprise in

question is primarily foreign, in its membership, goals, and usual sphere of operation. The

pattern of racketeering activity took place partially in the United States and partially abroad,

though the foreign portion of the pattern involved conduct that Congress has expressly chosen to

reach via the extraterritorial application of American law. Whether to characterize the

hypothetical indictment as an “extraterritorial application of RICO” is an interesting conceptual

question.

       But the actual legal question posed by the hypothetical indictment is whether Congress

intended to reach such conduct by the RICO statute, and that, as Judge Hall demonstrates, is a


                                                  2
rather easy question to answer. See Hall Concurrence at 1-2. Nothing in the definition of

“enterprise” excludes foreign-based associations, groups, or corporations, and it is difficult to

believe that Congress intended to exclude them. If members of a Mexican drug cartel, the

Sicilian Mafia, or a foreign-based terrorist organization commit a series of violent crimes on

U.S. soil that would clearly violate RICO if committed by a local drug distribution gang, a New

York-based Mafia family, or the Weather Underground, after all, it would be quite odd to

consider the prosecution of such acts in the United States an “extraterritorial” application of

RICO, and there is certainly no reason to believe that Congress did not intend to apply RICO to

such actions simply because the (entirely American) pattern of racketeering was carried out to

further the goals of a foreign enterprise.

       Does the outcome change if one predicate crime that formed part of the charged pattern

of racketeering activity took place abroad, in violation of a statute that Congress (a) expressly

gave extraterritorial reach and (b) expressly made a RICO predicate? I can’t see how it does.

How can Congress’s enactment of a law specifically designed to protect Americans abroad, and

its express incorporation of that law into RICO as a predicate crime, constitute anything other

than a clear expression of congressional intent to apply RICO to persons who commit that crime,

in furtherance of the affairs of an enterprise, as part of a pattern of racketeering? The plain

meaning of RICO demands that result. By including certain crimes with extraterritorial

application as RICO predicates – including some that can only be committed abroad – Congress

unequivocally expressed its intention that RICO apply to patterns of racketeering activity that

include such crimes. You may call this an “extraterritorial” application of RICO if you like, but,

whether or not the label is properly applied, there is no doubt that Congress intended to apply


                                                  3
RICO in that situation. Nor should that conclusion change if all the predicate crimes alleged

were committed abroad – if, for example, the revolutionary group planted no bombs on U.S. soil

but carried out multiple beheadings of Americans in violation of 18 U.S.C. § 2332(a)(1). So

long as Congress expressly extended its criminal prohibitions to the foreign conduct in question

and incorporated those prohibitions into RICO, Congress has determined that such predicate

crimes can constitute a pattern within the definition of RICO. Presumably it has done so because

a pattern of such crimes strikes at American interests just as much as a pattern of terrorist acts

committed in the United States by the same foreign-based enterprise.

       Of course, none of this suggests an intention to apply RICO, generally, to conduct

committed abroad. If members of a foreign enterprise engage in a pattern of entirely foreign

murders and drug distribution, nothing in RICO could make that activity a crime under U.S. law.

Indeed, although applying RICO to such conduct would plainly be an “extraterritorial”

application of the statute, we need not even invoke the presumption against extraterritoriality to

know that the application is impermissible, because the definitional provisions of RICO make

clear that Congress did not define such conduct as a RICO violation. A pattern of murders of

Italian citizens committed by members of an Italian organized crime group in Italy cannot violate

RICO, because murder is a RICO predicate only when it is “chargeable under state law” or

indictable under specific federal statutes. See 18 U.S.C. §§ 1961(1)(A), 1961(1)(G). Entirely

foreign activity does not qualify, and nothing in RICO indicates any contrary intent to extend its

reach to foreign criminality of a similar nature to the domestic conduct covered by RICO. To the

extent that Norex holds that RICO does not, of its own force and in general, have

“extraterritorial” application in such circumstances, it is of course correct.


                                                  4
       In that sense, indeed, RICO does not even implicate the extraterritorial ambiguities raised

by most statutes. Most congressional statutes prohibit conduct in general terms that, on their

face, could be taken to apply to anyone in the world. In Morrison, for example, the Supreme

Court interpreted a provision of the Securities Exchange Act that makes it “unlawful for any

person, directly or indirectly, by the use of any means or instrumentality of interstate commerce

or of the mails, or of any facility of any national securities exchange . . . [t]o use or employ, in

connection with the purchase or sale of any security . . . any manipulative or deceptive device.”

See 15 U.S.C. § 78j(b). But we know that Congress generally does not intend, by using such

broad language as “any person” or “any national securities exchange,” to apply those generalized

prohibitions to actions that take place outside our borders, because Congress ordinarily legislates

to regulate conduct within its primary jurisdiction; that is what the presumption against

extraterritorial application means. Liu Meng-Lin v. Siemens AG, 763 F.3d 175, 178 (2d Cir.

2014). That presumption applies to RICO as it does to other statutes, but RICO is quite explicit

that its prohibitions apply only to patterns of racketeering acts that themselves violate state or

federal law. It does not, for example, say that “no person shall conduct the affairs of an

enterprise through a pattern of committing murder,” but confines itself to patterns of murder that

are chargeable under the law of a state, or that are indictable under specific federal law. Unlike

§ 10(b), RICO is thus not even susceptible to a literalist reading that its general terms might

apply to foreigners.

       At the same time, however, Congress was exquisitely clear that some acts that are

committed abroad are predicate acts under RICO, and thus can form a pattern of racketeering

activity. To the extent that a pattern consisting of such acts is charged as a violation of RICO, I


                                                   5
see nothing in the presumption against extraterritoriality that exempts that pattern from

prosecution. It therefore seems to me that there is nothing novel or odd about the idea that RICO

does not, in general, “apply extraterritorially,” but that it may apply to acts committed abroad

where those acts violate statutes that were themselves expressly stated by Congress to have

extraterritorial application and that Congress has classified as RICO predicates.

       In the present posture of the case, I need not address all of the issues that may arise in

working out these basic principles. Nor need I decide how the instant case should be resolved,

or whether Norex was correctly decided. I join the dissenters in believing that we would do well

to convene en banc to resolve those very questions, and I agree with them that the reasoning and

result in this case are deeply in tension with the reasoning and result in Norex, whether or not

those two holdings are ultimately irreconcilable. To the extent, however, that the other

dissenters see the panel’s approach to RICO and extraterritoriality as deeply disturbing,

unprecedented, and inconsistent with Morrison, I respectfully disagree. To the contrary, I

believe that any interpretation that suggests that operatives of a foreign enterprise cannot be held

accountable under RICO for a pattern of predicate crimes that violate federal statutes with

express extraterritorial reach would astonish the Congress that made such violations RICO

predicates in the first place. Should the Supreme Court take up my dissenting colleagues’

invitation to grant further review of this case, I hope and trust that it will not allow the context of

this case – a civil action that, like many civil RICO suits, might lead some to doubt the wisdom

of allowing a somewhat amorphous statute to be wielded by private interests in endlessly

creative ways – to blind it to the clear intention of Congress to apply RICO to foreign terrorist

groups who commit patterns of criminal acts that may occur abroad, but that violate American

laws with express extraterritorial reach.

                                                   6
