RICO Report: Recent Episodes
Troutman Pepper, Callan G. Stein
Join Troutman Pepper White Collar and Litigation Partner Cal Stein for a special podcast series, discussing the legal landscape surrounding the Racketeer Influenced and Corrupt Organizations Act (RICO). While often associated with organized crime or gang activity, RICO's reach actually covers much more than what many think of as traditional "racketeering." Criminal prosecutors and civil litigants commonly use RICO to bring cases against individuals and organizations engaging in more conventional business activity, often by claiming various types of fraud that violate broad federal statutes encompassing a myriad of conduct far more likely to be alleged against a businessperson than a mafia crime boss (e.g., mail fraud, wire fraud, computer fraud, bank fraud, among others).
During this series, Cal discusses the history and various elements of RICO, including examining its predicate acts, interviewing RICO newsmakers, and analyzing RICO cases with other RICO practitioners.
In this episode of the RICO Report, Troutman Pepper Locke attorney Cal Stein breaks down one of the most fundamental yet unresolved issues in civil RICO litigation: the statute of limitations. Cal walks through the Supreme Court's three landmark decisions — Agency Holding Corp. v. Malley-Duff, Klehr v. A.O. Smith Corp., and Rotella v. Wood — explaining how the Court established a four-year limitations period borrowed from the Clayton Act, but has repeatedly declined to define when that clock starts running. Cal examines the competing accrual rules adopted across the circuit courts, including the injury discovery rule, the injury and pattern discovery rule, the last predicate act rule, and the injury occurrence rule, and explores the separate accrual doctrine for new injuries. He also covers the critical role of equitable tolling and fraudulent concealment, including the pleading requirements under Rule 9(b) that both plaintiffs and defense counsel need to keep top of mind.
Key topics include:
- 2:08 - Civil RICO’s four-year statute of limitations.
- 5:16 - Circuit splits on when the four-year limitations period begins.
- 9:36 - The injury discovery rule.
- 13:55 - Separate accruals for new injuries.
- 16:10 - Equitable tolling.
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In this episode, host Cal Stein revisits the U.S. Supreme Court's decision in Medical Marijuana, Inc. v. Horn nearly one year later and examines how lower federal courts are applying it. He briefly recaps Horn's narrow holding that certain economic harms flowing from personal injuries can satisfy RICO's "business or property" requirement, then walks through early district court decisions. Cal explains how courts are resisting efforts to turn RICO into a personal-injury regime, pulling back from reliance on antitrust/Clayton Act precedent, and often avoiding broad new rulings on what counts as a RICO "injury" by resolving cases on causation grounds instead. He closes with practical guidance for defense counsel on framing motions to dismiss in this evolving landscape.
Key topics include:
- 1:57 – Recap of Medical Marijuana, Inc. v. Horn.
- 5:57 – Lesson #1: The personal injury civil RICO "floodgates" have not opened . . . yet.
- 10:49 – Lesson #2: The door to using antitrust precedent in RICO cases may be closing.
- 16:32 – Lesson #3: Courts remain hesitant to grapple with the definition of "injury."
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In this episode of the RICO Report, host Cal Stein examines the dramatic shift in civil RICO cases based on securities fraud following the enactment of the Private Securities Litigation Reform Act (PSLRA) of 1995. He explains how the PSLRA broadly prohibits using securities fraud as a predicate act in civil RICO claims, with a narrow exception for cases involving a criminal conviction. Stein discusses the legislative history, key court decisions interpreting the statute, and the limited circumstances under which plaintiffs can pursue such claims today. The episode highlights how these changes have significantly reduced the number of civil RICO securities fraud cases and provides practical guidance for defense counsel facing these claims.
Key topics include:
- History of civil securities fraud RICO cases (1:45)
- The Prive Securities Litigation Reform Act (PSLRA) exclusion (6:45)
- The criminal conviction exception to the PSLRA exclusion (9:34)
- Application of the PSLRA exclusion to other claims involving securities (13:23)
- Application of the PSLRA exclusion if plaintiff cannot bring the claim directly under securities laws (15:52).
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In this episode of the RICO Report, host Cal Stein explores the intricacies of Section 1962(b) of the RICO statute. Though used more sparingly than Section 1962(c), this important section of RICO addresses the acquisition or maintenance of control over legitimate enterprises through racketeering activity. The discussion covers the applicability of Section 1962(b) beyond traditional mafia scenarios, including in modern corporate and labor union contexts, as well as causation issues and reasons why a RICO plaintiff might opt for a Section 1962(b) claim. The episode provides valuable insights into the complexities of pursuing claims under Section 1962(b) and its relevance in today's business world.
Specific topics include:
- Overview of Section 1962(b) of RICO (2:12);
- Acquisition or maintenance of control over an enterprise (6:02);
- Causation under Section 1962(b): Damages must flow from the acquisition/maintenance of control (10:50);
- Reasons a plaintiff might use Section 1962(b) (14:17).
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In this installment, Cal discusses the recent U.S. Supreme Court case Medical Marijuana Inc. v. Horn that settled the longstanding Circuit Court split over whether personal injuries are ever compensable under the RICO statute. In its ruling, the Supreme Court broadened the scope of RICO by ruling RICO plaintiffs may, in some circumstances, recover damages that are derived from personal injuries. Cal explores the Supreme Court's reasoning in reaching this conclusion, the possible consequences of it (including a likely substantial increase in the number of RICO cases), and some strategies for how the defense bar may be able to use the Supreme Court's decision (which appears to be very plaintiff-friendly) to ward off what will almost certainly be a spate of personal injury-based RICO cases.
Specific topics include:
- 1:49 – Facts and procedural history: Medical Marijuana Inc. v. Horn;
- 8:44 – Personal injuries can satisfy RICO's civil standing requirement of injury to one's "business or property";
- 16:00 – Opening the floodgates: are we going to see an explosion of "personal injury RICO" cases?;
- 19:08 – Silver lining for the defense bar: SCOTUS broadens RICO damages but emphasizes the directness requirement;
- 23:20 – SCOTUS declines to specify what damages can "derive" from personal injuries.
Our Cannabis Practice provides advice on issues related to applicable federal and state law. Marijuana remains an illegal controlled substance under federal law.
Join Troutman Pepper Locke White Collar and Litigation Partner Cal Stein for a special podcast series, discussing the legal landscape surrounding the Racketeer Influenced and Corrupt Organizations Act (RICO).In this installment, Cal discusses the critical issue of the person/enterprise distinction that frequently arises in RICO litigation. RICO requires every plaintiff bringing a claim under Section 1962(c) to identify both a RICO person and RICO enterprise that are distinct from each other. Cal explores the specific contours of this distinction, how it has been shaped by opinions issued by the U.S. Supreme Court and multiple circuit courts, and how it is frequently litigated, including at the motion to dismiss stage.Specific topics include:What is the RICO person/enterprise distinction? (1:47);The Cedric Kushner case: when a RICO person and a RICO enterprise are distinct (8:18);Rejected RICO enterprises: corporations plus owners/employees/subsidiaries (16:02);Litigating the person/enterprise distinction at the motion to dismiss stage (23:18).
Join Troutman Pepper White Collar and Litigation Partner Cal Stein for a special podcast series, discussing the legal landscape surrounding the Racketeer Influenced and Corrupt Organizations Act (RICO).
In this installment, Cal discusses the issue of extraterritoriality in the context of RICO claims. Does the RICO statute reach conduct that occurred outside the U.S.? And how have federal courts addressed the extraterritorial application of RICO, particularly in the civil context?
Specific topics include:
- The presumption against federal statutes applying extraterritorially (4:28);
- Application of this "bright line" presumption to RICO (6:40);
- The RJR Nabisco Case: SCOTUS finds RICO can apply extraterritorially depending on the predicate acts (10:54);
- The "domestic injury" requirement of RICO (15:42).
Join Troutman Pepper White Collar and Litigation Partner Cal Stein for a special podcast series, discussing the legal landscape surrounding the Racketeer Influenced and Corrupt Organizations Act (RICO).
In this installment, Cal discusses RICO's civil standing requirement and explores how it can be used by the defense bar to defend RICO cases, particularly at the motion to dismiss stage.
Specific topics include:
- Overview of RICO's Civil Standing Requirements (1:30);
- Injury to "Business or Property" Requirement (4:44);
- RICO's "By Reason Of" Standing Causation Requirement (8:03);
- RICO Standing In Business Competitor Lawsuits (14:09).
Join Troutman Pepper White Collar and Litigation Partner Cal Stein for a special podcast series, discussing the legal landscape surrounding the Racketeer Influenced and Corrupt Organizations Act (RICO).
In this installment, Cal discusses an upcoming U.S. Supreme Court case that will resolve a long-standing circuit split by determining whether recoverable RICO damages include those stemming from economic harm arising from personal injuries. Specific topics include:
- The Horn case and the District and Circuit Courts' rulings on RICO standing (1:10);
- The "antecedent personal injury bar" and the Second Circuit's rejection of it (7:00);
- The distinction between bodily harm and economic harm flowing from personal injury (14:55);
- The Circuit split and how the Supreme Court will resolve it (17:30); and
- Impact of the Supreme Court's decision on tort and products liability cases (22:53).
Join Troutman Pepper White Collar and Litigation Partner Cal Stein for a special podcast series, discussing the legal landscape surrounding the Racketeer Influenced and Corrupt Organizations Act (RICO).
In this installment, Cal discusses RICO cases that are brought both against individuals involved in racketeering activity, as well as their employers, under a theory of vicarious liability or respondeat superior. Specific topics include:
- General criteria for vicarious liability (2:20);
- Policy arguments for vicarious liability in the RICO context (5:41);
- Vicarious liability for Section 1962(c) RICO claims (7:58);
- Vicarious liability for Section1962(a) and Section1962(b) claims (11:22);
- Vicarious liability for Section1962(d) claims (13:52);
- Congressional failure to clarify vicarious liability for RICO claims (14:29); and
- Using vicarious liability arguments to dismiss RICO claims (17:45).
Join Troutman Pepper White Collar and Litigation Partner Cal Stein for a special podcast series, discussing the legal landscape surrounding the Racketeer Influenced and Corrupt Organizations Act (RICO).
- In this installment, Cal discusses the ins and outs of the civil remedy provision of RICO and RICO damages. Specific topics include:
- Legal history and overview of RICO damages (2:10);
- Availability of out-of-pocket, restitution, and consequential damages to RICO plaintiffs (4:58);
- Lack of standing for RICO plaintiffs to assert derivative damages (7:38);
- Exclusion of personal injury damages under RICO (10:54);
- Possibility of punitive damages being duplicative and unavailable under RICO (13:26); and
- Treble damages and attorneys' fees under RICO (15:35).
Join Troutman Pepper White Collar and Litigation Partner Cal Stein for a special podcast series, discussing the legal landscape surrounding the Racketeer Influenced and Corrupt Organizations Act (RICO).
In this installment, Cal welcomes Troutman Pepper Intellectual Property Partner Austin Padgett to discuss the recent RICO lawsuit against fast-fashion giant, Shein, and what it means for the industry. Specific topics include:
- Background on the fast-fashion industry and the Shein companies (2:00);
- Plaintiffs' claims and factual allegations against Shein (5:12);
- The alleged Shein RICO "enterprise" (7:41);
- Shein's alleged "racketeering activity": criminal copyright infringement (14:38);
- "Pattern" allegations: Reliance on other lawsuits against Shein (23:30); and
- Key takeaway: RICO claim threatens the core of the fast-fashion industry (28:32).
Join Troutman Pepper White Collar and Litigation Partner Cal Stein for a special podcast series, discussing the legal landscape surrounding the Racketeer Influenced and Corrupt Organizations Act (RICO).
In this installment, Cal welcomes Associate Armeen Shroff to discuss how the RICO statute can be used to enforce and collect on a foreign arbitration award, as illustrated in the Supreme Court's recent ruling in Yegiazaryan v. Smagin. Specific topics include:
- Facts of Yegiazaryan v. Smagin (3:12);
- History of RICO's "domestic injury" requirement (5:30);
- The location test for "domestic injury" to tangible property (8:13);
- The bright line test for "domestic injury" to intangible property (10:40);
- The multifactor test for "domestic injury" to intangible property (12:44);
- Procedural posture of Yegiazaryan v. Smagin (16:04);
- Supreme Court majority finds RICO standing in Yegiazaryan v. Smagin (18:30);
- Dissenting opinion (22:12); and
- Practical takeaways from Yegiazaryan v. Smagin (24:30).
Join Troutman Pepper White Collar and Litigation Partner Cal Stein for a special podcast series discussing the legal landscape surrounding the Racketeer Influenced and Corrupt Organizations Act (RICO).
In this installment, Cal examines state RICO laws and how they compare with the federal RICO statute. In particular, Cal focuses on some the key areas where state RICO statutes can vary from federal RICO, and how those differences can practically impact the defense of a case. Specific topics include:
- History of state RICO statutes (4:45);
- Legislative intent underlying RICO statutes (7:29);
- State RICO statutes of limitations (11:38);
- Racketeering activity in state RICO statutes (13:43);
- State RICO definitions of pattern (16:22);
- Enterprise element under state RICO statutes (19:42);
- Variations in RICO conduct in state RICO statutes (21:23); and
- State RICO statutes' remedies (25:39).
Join Troutman Pepper White Collar and Litigation Partner Cal Stein for a special podcast series, examining the legal landscape surrounding the Racketeer Influenced and Corrupt Organizations Act (RICO).
In this installment, Cal welcomes Troutman Pepper Associate Timothy Bado to discuss how unlawful debt collection practices can serve as a basis for a RICO claim. Specific topics include:
- Unlawful debt collection as a prohibited RICO activity (2:15);
- Definition of "unlawful debt" (6:05);
- What is a "usurious" loan? (10:30);
- "The business of" illegal gambling or usurious loans (14:49);
- Pleading unlawful debt collection vs. fraud (17:30);
- RICO litigation trend: "Rent-a-bank" cases (20:15); and
- RICO litigation trend: Merchant cash advance cases (24:57).
Join Troutman Pepper White Collar and Litigation Partner Cal Stein for a special podcast series, discussing the legal landscape surrounding the Racketeer Influenced and Corrupt Organizations Act (RICO).
In this eighth installment, Cal welcomes Troutman Pepper Partner, former Assistant U.S. Attorney, and experienced RICO prosecutor Michael Lowe to discuss two of the most common predicate acts for racketeering claims: mail fraud under 18 U.S.C. §1341 and wire fraud under 18 U.S.C. §1343. Specific topics include:
- How mail and wire fraud fit into a RICO claim (2:34);
- Frequency of mail and wire fraud as predicate acts (4:04);
- First-party reliance not required (8:08);
- Element #1: Scheme to defraud (13:16);
- Element #2: Use of mails and wires (18:16);
- Element #3: Intent to defraud (25:24);
- Materiality as a limitation to mail and wire fraud (29:10); and
- Honest services fraud (32:26).
Join Troutman Pepper White Collar and Litigation Partner Cal Stein for a special podcast series, discussing the legal landscape surrounding the Racketeer Influenced and Corrupt Organizations Act (RICO).
In this seventh installment Cal discusses the element of RICO racketeering activity. Cal focuses the discussion on the first three subparts of Section 1961 Subsection One which covers state offenses, federal offenses found in Title 18, and racketeering offenses in Title 29 that involve labor unions. Specific topics include:
- Statutory definition of “racketeering activity” (3:00)
- State criminal offenses as “racketeering activity” (8:10)
- Federal offenses in Title 18 as “racketeering activity” (11:15)
- Labor offenses in Title 29 as “racketeering activity” (14:33)
- No conviction requirement for “racketeering activity” (16:30)
- Attempt offenses as “racketeering activity” (17:30)
Join Troutman Pepper White Collar and Litigation Partner Cal Stein for a special podcast series, discussing the legal landscape surrounding the Racketeer Influenced and Corrupt Organizations Act (RICO).
In this sixth installment, Cal welcomes Troutman Pepper Associates Chris Carlson and Mary Grace Metcalfe to discuss the RICO element requiring a pattern racketeering activity, including analyzing the definition of “pattern,” the history of Supreme Court guidance on the element, and practical tips on how practitioners can attack the pattern element to defend their clients. Specific topics include:
- RICO’s Statutory Definition of “Pattern” (2:42)
- Supreme Court’s Sedima Decision (5:10)
- Post-Sedima Pattern Tests (8:20)
- HJ, Inc.: The Relatedness + Continuity Test (16:22)
- RICO Relatedness (24:01)
- RICO Continuity (26:16)
Join Troutman Pepper White Collar and Litigation Partner Cal Stein for a special podcast series, discussing the legal landscape surrounding the Racketeer Influenced and Corrupt Organizations Act (RICO).
In this fifth installment, Cal welcomes Troutman Pepper Associate Sam Harrison to discuss the RICO “enterprise” element and how it applies to RICO cases, particularly those brought under Section 1962(c) for operating a RICO enterprise. Specific topics include:
- Purpose of the enterprise requirement (2:00);
- History of the association-in-fact enterprise (5:45);
- Establishing the association-in-fact enterprise (10:02);
- RICO person/enterprise distinction in Section 1962(c) cases (15:31);
- Corporations as RICO enterprises (18:42); and
- Conducting the affairs of a RICO enterprise (23:08).
Be on the lookout for our next episode of this podcast series.
Join Troutman Pepper White Collar and Litigation Partner Cal Stein for a special podcast series, discussing the legal landscape surrounding the Racketeer Influenced and Corrupt Organizations Act (RICO).
In this fourth installment, Cal welcomes Troutman Pepper Partner William Taylor and Associate Jaclyn Essinger to discuss the intersection between trade secrets law and RICO, with a particular focus on the Defend Trade Secrets Act (DTSA), including:
- Overview of DTSA (3:58);
- Ingredients of a Typical DTSA RICO Case (8:45);
- What DTSA Violations Are “Racketeering Activity” (14:35);
- DTSA RICO “Enterprises” (21:48); and
- The Future of DTSA RICO Litigation (28:06).
Be on the lookout for our next episode of this podcast series.
Join Troutman Pepper White Collar and Litigation Partner Cal Stein for a special podcast series, discussing the legal landscape surrounding the Racketeer Influenced and Corrupt Organizations Act (RICO).
In this third installment, Cal welcomes Troutman Pepper Partner Joanna Cline to discuss the four subsections of “prohibited activity” that comprise the RICO “conduct” element:
- Section 1962(a): Investing in an Enterprise (4:20);
- Section 1962(b): Acquiring or Maintaining an Interest in an Enterprise (7:05);
- Section 1962(c): Conducting the Affairs of an Enterprise (10:10); and
- Section 1962(d): RICO Conspiracy (17:27).
Be on the lookout for our next episode of this podcast series.
The Second Circuit Court of Appeals recently issued an opinion in Alix v. Mckinsey & Co. that may fundamentally broaden the proximate cause element of claims brought under the Racketeer Influenced and Corrupt Organizations Act (RICO). RICO's proximate cause element requires a plaintiff to allege facts plausibly establishing a "direct relationship" between the claimed injury and the defendant's conduct in violation of RICO. By expanding its interpretation of this element, the Second Circuit may have made it easier for future plaintiffs to bring and plead civil RICO claims, particularly against their business competitors.
Join Troutman Pepper Partners Cal Stein and Stephen Rinehart for this installment of the RICO Report as they discuss the case (1:18); RICO claims (4:02); McKinsey's successful motion to dismiss the RICO claims at the district court level (5:37); the Second Circuit's appellate decision, including its analysis of intervening events (8:25); Alix's market share causation argument (10:39); and key lessons practitioners can take away from the decision and possibly apply to future RICO cases (18:24).
Join Troutman Pepper White Collar and Litigation Partner Cal Stein for a special podcast series, discussing the legal landscape surrounding the Racketeer Influenced and Corrupt Organizations Act (RICO).
In this first installment, Cal provides a brief overview of the RICO statute and introduces many other topics he plans to explore in future installments. Cal answers basic questions — like what is RICO and how does RICO work — and provides a high-level summary of foundational substantive legal issues, such as a discussion of RICO's elements and its civil and criminal penalties. This session also provides a basic understanding of RICO's statutory framework and the underlying criminal offenses that constitute actionable racketeering activity.
Be on the lookout for our next episode of this podcast series.