## Facts

- Sedima, a Belgian corporation, and Imrex, a U.S. exporter, formed a joint venture to supply electronic components to a Belgium-based NATO subcontractor.
- Sedima obtained orders totaling about $8.5 million; Imrex procured and shipped the parts.
- Sedima alleged Imrex and two officers prepared false purchase orders, invoices, and credit memoranda overstating prices and charges, and diverted joint-venture funds.
- Sedima asserted state-law claims and civil RICO claims under 18 U.S.C. §§ 1962(c) and 1964(c), alleging a pattern of racketeering activity primarily through mail and wire fraud.
- The district court dismissed the RICO counts for failure to state a claim; the Second Circuit affirmed, requiring (i) a prior criminal conviction and (ii) a special “racketeering injury.”

## Issues

1. Whether a private civil RICO action under 18 U.S.C. § 1964(c) requires a prior criminal conviction of the predicate acts or a RICO offense.
2. Whether § 1964(c) requires a plaintiff to plead and prove a distinct “racketeering injury” beyond injury caused by the predicate acts themselves.

## Decision

- The Supreme Court reversed and remanded.
- The Court held § 1964(c) does not require a prior criminal conviction of predicate acts or a RICO violation.
- The Court held § 1964(c) does not require proof of a distinct “racketeering injury”; injury to business or property by reason of a § 1962 violation is sufficient.
- The Court acknowledged concerns about civil RICO’s breadth but concluded any narrowing must come from Congress, not judicially imposed extra elements.

## Legal Principles

- A civil RICO plaintiff states a claim under § 1964(c) by alleging (i) a violation of § 1962 and (ii) injury to business or property “by reason of” that violation; no additional injury category is required.
- “Racketeering activity” defined as conduct “indictable” under listed statutes describes qualifying conduct and does not imply an indictment or conviction prerequisite to civil suit.
- Courts may not add unwritten limitations to § 1964(c) based on policy concerns about overuse; statutory text controls.

## Conclusion

Civil RICO liability under § 1964(c) does not depend on a defendant’s prior criminal conviction and does not require a special “racketeering injury” distinct from the harm caused by predicate acts; a plaintiff need only allege a § 1962 violation and resulting injury to business or property.


Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479 (1985)