Civil RICO: A First Look

The next several Blog entries will introduce causes of action or legal theories that allow for the recovery of attorney’s fees. Subsequent entries will fill in the details.

The first of these causes of action is the Racketeer Influenced and Corrupt Organizations Act (“RICO”). RICO was introduced as a federal law designed to combat organized crime. Although envisioned primarily as a criminal statute, RICO also provided private causes of action for victims of racketeering activity. As a result, plaintiffs have used RICO to address wrongs that might otherwise be difficult to remedy. The federal courts somewhat curtailed these private causes of action, noting that wide spread civil use was not the primary purpose of RICO. As a result, case law interpreting how and when individuals can employ RICO is relatively complex. That said, RICO is a well established and valuable litigation tool.

RICO makes it onto this Blog because it allows the winning plaintiff to recover of triple damages and attorneys fees.

In addition to the federal RICO statutes, many states have passed their own versions of RICO. Some are more limited than the federal version (e.g., Pennsylvania’s has no private cause of action), and some have advantages over the federal version (e.g., the N.J. RICO statute, which will be the topic of a future Blog entry).

Federal RICO is composed of six sections of the United States Code (18 U.S.C. 1961-1968). The two RICO sections this Blog will spend the most time with are 1962(c) and 1962(d). To bring a claim under 1962(c), a plaintiff must allege, among other things, that defendants conducted the affairs of an “enterprise,” through a “pattern of racketeering activity,” resulting in damage to the plaintiff. To bring a claim under 1962(d), a plaintiff must allege that defendants both agreed to commit RICO “predicate acts” and knew that those acts were part of a “pattern of racketeering activity.”

Key terms necessary to understand and apply RICO, such as “enterprise,” “racketeering activity” and “pattern of racketeering activity,” are defined, at least partially, in section 1961. To fully understand these terms, as well as critical terms not defined in the statute, and to effectively apply RICO to achieve the desired result, requires familiarity with the evolving case law in the court system where you bring the RICO claim

For purposes of this Blog entry, your take away point is this: If you have been cheated by something that looks like a legitimate business, but which really exists to separate its victims from their money through certain specific illegal schemes, you may have a RICO cause of action. If you have a RICO cause of action, you can get your attorney fees back plus three times damages.

The information contained in this blog is not legal advice and should not be relied on as such. For legal advice or for answers to specific questions, please contact the blog's author.