On Oct. 1, 2015, the U.S. Supreme Court granted certiorari to the Second Circuit’s decision in European Community v. RJR Nabisco, 764 F.3d 129 (2d Cir. 2014), rehearing en banc denied, 783 F.3d 123 (2d Cir. 2015), which held that RICO applies extraterritorially, but only to the extent that a RICO claim is based on predicate acts that apply extraterritorially. In taking this case, the Supreme Court is poised to determine not only whether RICO has any extraterritorial reach, but also how courts should determine whether a given multinational fact pattern, with certain parties and events in the United States and other parties and events in foreign countries, is a domestic RICO claim, an improper extraterritorial RICO claim, or (if it agrees with the Second Circuit that RICO has some extraterritorial reach) a proper extraterritorial RICO claim. Because these issues have split the circuits, the Supreme Court’s intervention is welcome, and will hopefully bring clarity and predictability to practitioners.
Recent History
In Morrison v. National Austl. Bank, 561 U.S. 247 (2010) and in Kiobel v. Royal Dutch Petroleum Co., 133 S. Ct. 1659 (2013), the Supreme Court clarified and broadened the “presumption against extraterritoriality” under which “legislation of Congress, unless a contrary intent appears, is meant to apply only within the territorial jurisdiction of the United States.” Morrison, 561 U.S. at 255, quoting EEOC v. Arabian American Oil Co., 499 U.S. 244, 248 (1991). The Supreme Court held that this presumption was a canon of statutory construction, not a limit on congressional power. Simply put, under this presumption, “When a statute gives no clear indication of an extraterritorial application, it has none.” 561 U.S. at 255.
