Reddy v. Litton Industries, Inc.
Headline: RICO conspiracy standing question left unresolved as Court declines review, keeping appeals courts split and leaving individuals unsure whether non-listed criminal acts can support federal racketeering lawsuits.
Holding: The Court declined to review the case, leaving the Ninth Circuit’s ruling that the petitioner lacked standing intact and maintaining the split among appeals courts over non-predicate overt acts.
- Leaves federal appeals courts divided on when individuals can sue for RICO conspiracy.
- Some plaintiffs may be blocked from RICO suits if alleged acts aren’t listed predicate crimes.
- Defendants may face inconsistent exposure to RICO liability across different circuits.
Summary
Background
A person who sued under the federal racketeering law (RICO) asked courts to allow a conspiracy claim even though the alleged wrongful acts were not listed as RICO "predicate" crimes. The Ninth Circuit agreed with the Second Circuit and held the person lacked standing to bring the conspiracy claim because the claimed injuries did not come from the kinds of acts the RICO statute specifically lists. The Third Circuit had taken a different view and said such conspiracy claims can proceed even when the overt acts are not the listed predicate crimes.
Reasoning
The central question is whether someone can sue for a RICO conspiracy when the overt acts they point to are not defined as predicate crimes in the statute. The Ninth Circuit followed the Second Circuit’s rule requiring predicate acts for standing and rejected the Third Circuit’s contrary approach. The Supreme Court declined to review that ruling, so it did not resolve the disagreement among appeals courts.
Real world impact
Because the high court refused to take the case, the split among federal appeals courts remains. People who try to sue under the RICO conspiracy provision may succeed in some circuits but be blocked in others, depending on how those courts treat non-predicate overt acts. This decision is not a final ruling on the legal question itself and could change if the Court later agrees to hear a similar case.
Dissents or concurrances
Justice White dissented from the Court’s refusal to review. He explained that the disagreement among the appeals courts raises an important federal question and said the Court should grant review to resolve it.
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