RICO: Conduct
committed abroad: Subject matter jurisdiction: (Jurisdiction):
(Antitrust: foreign
injury, foreign entities).
(Goodwill: Property
interest).
Section 1964(c) of
the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. §§ 1961–1968,
creates a private right of action for a plaintiff that “is injured in his [or
her] business or property” as a result of conduct that is proscribed by the
statute. In RJR Nabisco, Inc. v. European Community, the Supreme
Court determined that, although a litigant may file a civil suit against
parties for racketeering activity committed abroad, § 1964(c)’s private right
of action is only available to a litigant that can “allege and prove a domestic
injury to its business or property.”
To establish liability
pursuant to § 1962(c), a plaintiff must establish the existence of an
enterprise that exists “separate and apart from the pattern of activity in
which [the enterprise] engages.” RICO defines “enterprise” as “any individual,
partnership, corporation, association, or other legal entity, and any union or
group of individuals associated in fact although not a legal entity.”
Plaintiffs can show the presence of an enterprise by pointing to a “group of
persons associated together for a common purpose of engaging in a course of conduct.”
The Court explained
that “absent clearly expressed congressional intent to the contrary, federal
laws will be construed to have only domestic application.” This presumption against
extraterritoriality “avoids the international discord that can result when U.S.
law is applied to conduct in foreign countries.” It also ensures that Congress—rather
than the judiciary—is responsible for navigating the “delicate field of
international relations.” Nevertheless, the Court concluded that RICO can reach
extraterritorial conduct. However, the Court held that 18 U.S.C. § 1964(c) does
not allow recovery for injuries suffered in foreign territories. The Court
explained that “nothing in § 1964(c) provides a clear indication that Congress intended
to create a private right of action for injuries suffered outside of the United
States.” Thus, although RICO creates a cause of action for misconduct committed
abroad, § 1964(c) requires a “domestic injury.”
(…) There is no
consensus on what specific factors must be considered when deciding whether an
injury is domestic or foreign.
(…) Because this case
does not involve Article III standing, but rather presents an issue of
statutory standing, subject matter jurisdiction is not implicated, and the
parties incorrectly relied on Rule 12(b)(1).
(…) (The decision not
to name GSK China as a defendant is likely an attempt to downplay ties to
China.)
(…) In Cevdet
Aksut Ogullari Koll. Sti. v. Cavusoglu, the district court found that a
plaintiff’s principal place of business and the location of its
operations were merely helpful considerations in determining whether the
effects of an alleged injury were domestic or foreign. There, a Turkish
corporation “asserted that its domestic business was injured because
it had . . . annual sales to customers in the United States prior to
transacting with the RICO enterprise.” The court held that, even if it were to assume that the plaintiff lost
earnings from customers located in the United States, it nonetheless
could ascertain no “domestic injury to the plaintiff’s business because
its business was entirely located in and operated out of Turkey.” The
“plaintiff’s injury was felt in the only place it had ever been located,
in Turkey.” (245 F. Supp. 3d 650 (D.N.J. 2017).
The court’s analysis
in Dandong Old N.-E. Agric. & Animal Husbandry Co. v. Hu is more
analogous to our inquiry. The plaintiff there was a Chinese company that
was one of the largest purchasers of soybeans produced in the United
States. It alleged, inter alia, that the defendant’s RICO
misconduct caused the plaintiff to lose contracts with soybean suppliers
in the United States. The plaintiff claimed the loss of much of its
market share and that its business operations slowed as a result of its
inability to receive soybeans from U.S. suppliers at the same volume as
before the defendant’s alleged misconduct. The plaintiff also alleged
that it was forced to terminate 90 of its China-based employees. The court
disregarded the location of the predicate acts that were alleged and
instead focused only on where the plaintiff felt the effects of the
alleged injury. That analysis caused the court to conclude that the
plaintiff failed to establish a domestic injury. The trial court found
that “any deprivation of the plaintiff’s money was felt in China. And,
in sharp contrast to Elsevier, the Plaintiff was not deprived of its
property in the United States because, indeed, the Plaintiff received
all of the soybeans for which it contracted with U.S. suppliers.” (Dandong
Old N.-E. Agric. & Animal Husbandry Co., 2017 WL 3328239 at *6).
The plaintiff’s principal place of business was in China, all the
terminated employees were fired in China, any expenses resulting from
the alleged misconduct were paid from China, and the plaintiff’s
business operated only out of China. The court found that the foreign
plaintiff’s allegation that it lost prospective business opportunities
from U.S. suppliers insufficient to establish that the plaintiff
experienced a domestic injury because such a claim, without more, “is
far too attenuated to suffice as a domestic injury under RICO.” For these
reasons, the Dandong court ultimately held that “regardless of
where the conspirators’ conduct took place, the plaintiff’s injury was
felt in China, the only place its business had ever been located.”
Although other courts have reached similar results, Dandong’s
approach to determining the location of the alleged injury is
particularly helpful because it is nuanced and the court considered the
totality of the circumstances without relying on any single
circumstance.
With this background
as our guide, we must determine if Plaintiffs here have alleged a plausible
domestic injury under § 1964(c). We begin with RJR Nabisco’s clear
command: the analysis of whether a plaintiff has alleged a domestic injury must
focus principally on where the plaintiff has suffered the alleged injury.
“Nothing in § 1964(c) provides a clear indication that Congress intended to
create a private right of action for injuries suffered outside of the United
States.”
(…) Given the
intangible nature of the alleged injuries here, our inquiry must focus
primarily upon where the effects of the predicate acts were experienced. This
will better allow for appropriate consideration of the nuanced nature of
intangible interests.
(…) Whether an
alleged injury to an intangible interest was suffered domestically is a
particularly fact-sensitive question requiring consideration of multiple
factors. These include, but are not limited to, where the injury itself arose;
the location of the plaintiff’s residence or principal place of business; where
any alleged services were provided; where the plaintiff received or expected to
receive the benefits associated with providing such services; where any
relevant business agreements were entered into and the laws binding such agreements;
and the location of the activities giving rise to the underlying dispute.
Applying these
principles to the allegations here, we have no difficulty concluding that
Plaintiffs have not alleged a domestic injury. Rather, it is clear that the
alleged injuries were suffered in China. As the District Court noted, at all relevant
times, Plaintiffs lived in China; had their principal place of business in
China; provided services in China (albeit to some American companies – but even
they were operating in China); entered the Consultancy Agreement in China and agreed
to have Chinese law govern it; met with Defendants’ representatives only in
China.
(…) It is unclear
whether an allegation of harm to goodwill constitutes a showing of “a
concrete financial loss and not mere injury to a valuable intangible property
interest.” Maio, 221 F.3d at 483 (fn. 101).
(…) RJR Nabisco observed
that “there is good reason not to interpret § 1964(c) to cover foreign
injuries just because the Clayton Act, a federal antitrust statute, does so.”
RJR Nabisco, 136 S.Ct. at 2109. First, the Clayton Act
explicitly authorizes foreign entities to bring suit under the statute. Id.
Further, and as the Court described in F. Hoffmann-La Roche Ltd. v.
Empagran S.A., 542 U.S. 155 (2004), the Foreign Trade Antitrust
Improvements Act of 1982 excludes from the reach of antitrust laws “most
conduct that ‘causes only foreign injury.’” RJR Nabisco, 136 S.Ct.
at 2109 (citing Empagran, 542 U.S. at 158). (Fn. 129)
(U.S. Court of
Appeals for the Third Circuit, Sept. 26, 2018, Humphrey v. GlaxoSmithKline PLC,
Docket No. 17-3285, Precedential)
Même si le comportement illicite au sens de RICO a été commis à
l’étranger, le lésé peut agir devant la cour de district fédérale. Dite cour
est donc a priori compétente et la présente affaire ne pose pas de question de
« jurisdiction ». Pour espérer l’emporter, le lésé doit alléguer et
prouver un dommage « domestique » causé à son activité économique ou
à ses biens. Si, comme en l’espèce, l’affaire présente des éléments
d’extranéité, il peut être difficile de juger si le dommage est ou non
« domestique ». Il le sera si, l’ensemble des circonstances ayant
été considérées, nombre de ces circonstances pointent en direction des
Etats-Unis et non en direction d’un état étranger. Est rappelé le principe de
la présomption contre l’application extraterritoriale du droit fédéral, ladite
présomption étant renversée en cas d’indication contraire du Congrès, exprimée
clairement. Les circonstances importantes à considérer sont le lieu d’où le
dommage est survenu, le lieu de résidence de la demanderesse, le lieu de ses
activités principales, le lieu où les services ont été fournis, le lieu où la
demanderesse a reçu ou devait recevoir le produit de ces services, le lieu de
la conclusion du contrat, le droit applicable, et le lieu des activités à
l’origine du litige.
Dans une affaire antérieure, la cour de district fédérale avait jugé que
le siège de l’entreprise lésée et le lieu d’exercice de ses opérations ne sont
pas dispositifs quant à déterminer si le dommage est « domestique »
ou non. Dans cette affaire, une entreprise turque, au siège en Turquie, soutenait
qu’une entreprise partenaire RICO avait porté préjudice à ses affaires
« domestiques » (soit celles sur sol U.S.), le dommage consistant en
une baisse de son chiffre d’affaires annuel aux Etats-Unis. La cour a jugé que
même si tel devait être le cas, aucun dommage « domestique » n’avait
été causé, du fait que les activités de l’entreprise turque étaient localisées
en Turquie, menées par des opérateurs économiques en Turquie, et que le dommage
avait été ressenti en Turquie uniquement.
Dans une autre affaire antérieure, la cour a considéré la totalité
des circonstances et a retenu que la demanderesse RICO, une entreprise
chinoise, était une des principales acheteuses de soja en provenance des U.S.
La demanderesse soutenait avoir perdu des parts de marché aux Etats-Unis du
fait du comportement de l’entreprise RICO, défenderesse. Elle alléguait en
outre avoir en conséquence été contrainte de licencier une partie de son
personnel en Chine. La cour a retenu le lieu où les effets découlant de
l’illicéité ont été ressenti, soit la Chine uniquement, en précisant par
ailleurs que la demanderesse avait reçu la contrepartie de tous les contrats
passés avec les vendeurs U.S. L’allégation de pertes d’opportunités futures est
insuffisante pour établir un dommage « domestique » au sens de RICO.
En l’espèce, la condition du dommage « domestique » n’est pas
établie. Tous les points de contact sont localisés en Chine (la demanderesse
est établie en Chine, lieu où elle déploie l’essentiel de ses activités
commerciales, le contrat en discussion a été conclu en Chine, la loi applicable
à ce contrat étant le droit chinois, et les contacts entre parties ont eu lieu
en Chine).
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