## Facts

- The European Community and 26 member states sued RJR Nabisco and related entities, alleging participation in an international scheme involving organized crime groups.
- The complaint alleged that proceeds from narcotics sales in Europe were laundered through intermediaries and used to finance large shipments of RJR cigarettes into Europe.
- Plaintiffs alleged a pattern of racketeering activity including money laundering, material support for foreign terrorist organizations, mail and wire fraud, and Travel Act violations.
- Plaintiffs sought civil RICO remedies, including treble damages, largely for lost tax revenues and related economic harms allegedly suffered abroad.

## Issues

1. Whether RICO’s substantive prohibitions in 18 U.S.C. § 1962 apply to conduct occurring outside the United States when based on predicate offenses with extraterritorial reach.
2. Whether RICO’s private right of action, 18 U.S.C. § 1964(c), permits recovery for injuries to business or property suffered outside the United States.

## Decision

- The Supreme Court held that certain applications of RICO’s substantive provisions (§ 1962) can apply to foreign conduct to the extent the alleged pattern relies on predicate offenses that themselves apply extraterritorially.
- The Court held that § 1964(c) does not allow private plaintiffs to recover for foreign injuries; a private civil RICO plaintiff must plead and prove a domestic injury to business or property.
- Because the plaintiffs alleged purely foreign injuries, the private civil RICO claims were not cognizable and had to be dismissed.

## Legal Principles

- The presumption against extraterritoriality applies through a two-step inquiry: (1) whether Congress clearly indicated extraterritorial application; if not, (2) whether applying the statute in the case is domestic by reference to the statute’s focus.
- RICO § 1962 may reach foreign racketeering activity when each predicate offense alleged has extraterritorial application by its own terms.
- The presumption against extraterritoriality applies separately to remedial provisions; the scope of a private right of action is not assumed to match the scope of the substantive prohibitions.
- Section 1964(c) lacks a clear indication authorizing recovery for injuries suffered abroad; therefore, private civil RICO requires a domestic injury.
- Comity concerns and the risk of international friction support requiring clear congressional authorization before allowing private treble-damages actions for foreign injuries.

## Conclusion

RICO’s substantive prohibitions can apply to foreign conduct when grounded in extraterritorial predicate statutes, but private plaintiffs may obtain civil RICO damages only for domestic injuries, which barred recovery for the plaintiffs’ alleged foreign harms.


RJR Nabisco, Inc. v. European Cmty., 579 U.S. 325 (2016)