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Article Excerpt
I. INTRODUCTION
II. ELEMENTS OF THE OFFENSE A. Two or More Predicate Acts of Racketeering Activity B. Pattern C. Enterprise 1. Types of Enterprises 2. Proving the Enterprise 3. Person-Enterprise Rule D. Effect on Interstate Commerce E. Prohibited Acts 1. Investment of Racketeering Proceeds 2. Illegal Acquisition of Enterprise Interest 3. Conducting an Enterprise Through Racketeering Acts 4. Conspiracy III. DEFENSES A. Invalidity of One or More Predicate Acts B. Limitation of Actions C. Withdrawal From Conspiracy D. "Horizontal Preemption" or "Primary Jurisdiction " E. "Reverse Vertical Preemption" F. Constitutional Challenges IV. CRIMINAL PENALTIES A. Overview B. Forfeiture 1. "Seize and Freeze" Orders 2. Rights of Innocent Third Parties 3. Attorney's Fees C. Sentencing V. CIVIL RICO A. Civil Penalties B. Civil Cause of Action for Private Parties 1. Standing 2. The Person/Enterprise Distinction 3. Statute of Limitations VI. RECENT DEVELOPMENTS IN THE RICO STATUTE A. Protests B. Tobacco Litigation C. Health Care Fraud D. Divorce E. Police Misconduct
I. INTRODUCTION
Congress designed The Racketeer Influenced and Corrupt Organizations Act ("RICO"), (1) enacted as Title IX of the Organized Crime Control Act of 1970, (2) to combat organized crime. (3) RICO aims to eliminate organized crime by bringing "the highly diversified acts of a single organized crime enterprise under a RICO's umbrella," (4) and "to curb the infiltration of legitimate business organizations by racketeers." (5) However, RICO also has broad application beyond the organized crime context because Congress mandated that RICO "be liberally construed to effectuate its remedial purposes." (6) The Supreme Court has held that RICO may be applied to legitimate businesses (7) and to enterprises without a profit motive. (8) Although the Supreme Court has reaffirmed its reliance on the "liberal construction" clause of RICO, (9) the Court has acknowledged that this clause is not without limits. (10)
Prosecutors use RICO in a wide variety of criminal contexts (11) because it has been construed liberally, (12) it does not require mens rea beyond that necessary for the predicate acts, (13) and it provides for severe sanctions in addition to those a defendant may receive for the underlying offenses. (14)
In addition to criminal actions, RICO permits private plaintiffs and the government to seek redress in civil actions. (15) Under [section] 1964 of RICO, the Attorney General (16) or a private plaintiff (17) may bring a civil action in either state or federal court. (18) RICO provides equitable relief through divestiture of the defendant's interest in the enterprise, restrictions on future activities or investments, and dissolution or reorganization of the enterprise. (19) While this Article focuses primarily on the criminal aspects of RICO, the close relationship between criminal and civil RICO actions necessitates some discussion of civil cases.
This Article generally addresses RICO prosecutions for white collar crimes. Section II discusses the elements of a RICO offense. Section III addresses a variety of potential defenses to RICO prosecutions. Section IV addresses criminal penalties for RICO violations, including the now advisory United States Sentencing Guidelines ("Guidelines"). Section V provides a discussion of civil RICO, and Section VI describes several recent developments in this area of the law.
II. ELEMENTS OF THE OFFENSE
Section 1962 of RICO prohibits "any person" (20) from: (i) using income derived from a pattern of racketeering activity or from the collection of an unlawful debt to acquire an interest in an enterprise affecting interstate commerce; (21) (ii) acquiring or maintaining through a pattern of racketeering activity or through collection of an unlawful debt (22) an interest in an enterprise affecting interstate commerce; (23) (iii) conducting or participating in the conduct of the affairs of an enterprise affecting interstate commerce through a pattern of racketeering activity or through collection of an unlawful debt; (24) or (iv) conspiring to participate in any of these activities. (25)
To prosecute a defendant under RICO, the government must prove that the defendant: (i) through the commission of two or more acts constituting a pattern of racketeering activity; (ii) directly or indirectly invested in, maintained an interest in, or participated in, an enterprise; (iii) the activities of which affected interstate or foreign commerce. (26) Parts A through D of this Section examine the elements of a RICO offense. Part E addresses prohibited acts. Finally, Part F assesses the scope of outsider liability.
A. Two or More Predicate Acts of Racketeering Activity
First, a RICO offense requires two or more predicate acts of "racketeering activity." (27) RICO defendants need not be convicted of each underlying offense before a RICO offense is charged. (28) In fact, underlying offenses for which the defendant has been acquitted may serve as the basis of a RICO offense. (29)
Under [section] 1961(1), the term "racketeering activity" includes a broad assortment of state and federal crimes. These crimes include: (i) certain acts that are chargeable under state laws and punishable by imprisonment for more than one year; (30) (ii) acts that are indictable under specified provisions of Title 18; (31) (iii) acts that are indictable under specified provisions of Title 29; (32) (vi) federal offenses that involve bankruptcy, securities fraud, or controlled drugs; (33) (v) acts that are indictable under the Currency and Foreign Transactions Reporting Act; (34) (vi) acts indictable under [section][section] 274, 277, or 278 of the Immigration and Nationality Act, if such acts are done for profit, (35) and any act that is indictable under any provision listed in [section] 2332b(g)(5)(B). (36) In the Comprehensive Crime Control Act of 1984, (37) Congress extended the definition of "racketeering activities" under RICO to include dealing in obscene materials, (38) as well as the non-reporting of currency and foreign transactions. (39) The Antiterrorism and Effective Death Penalty Act of 1996 (40) further extended the RICO provisions to include various immigration crimes. (41) However, Congress has restricted the definition of "racketeering activities" in other areas, prohibiting the recognition of unconvicted securities fraud as a predicate act under RICO. (42)
B. Pattern
RICO applies only where the commission of two predicate acts constitutes a "pattern of racketeering activity." (43) While the statutory definition of "pattern of racketeering activity" requires at least two acts of racketeering occurring within ten years of each other, (44) simply proving two acts may not be sufficient to establish a RICO violation. (45) The Supreme Court has stated that a "pattern of racketeering" can only be established if the predicate acts are continuous and interrelated. (46) Thus, "two isolated acts of racketeering do not constitute a pattern." (47)
In H.J. Inc. v. Northwestern Bell Telephone Co., (48) the Court held that the government must establish both a relationship between the predicate acts and continuity of those acts to prove a "pattern of racketeering activity" for RICO purposes. (49) These requirements, referred to as the "continuity plus relationship" test, (50) must be proven independently, but the Court has recognized that evidence establishing the two elements will often overlap. (51)
In H.J. Inc., the Court looked to a provision of the Organized Crime Control Act of 1970 (52) for guidance in defining the relationship component of the pattern requirement of RICO: "[c]riminal conduct forms a pattern if it embraces criminal acts that have the same or similar purposes, results, participants, victims, or methods of commission, or otherwise are interrelated by distinguishing characteristics and are not isolated events." (53)
The "continuity" component is met by either closed-ended continuity, defined as "a series of related predicates extending over a substantial period of time," (54) or open-ended continuity, defined as conduct that poses a threat of extending into the future. (55) The Court suggested a case-by-case examination of this issue, noting that the existence of a "threat of continued racketeering activity" is a function of particular facts. (56) The Court offered a non-exhaustive list of situations that may constitute a pattern, (57) and stated "development of these concepts must await future cases." (58)
With this guidance, the circuits have reached varying conclusions regarding what conduct constitutes a pattern of racketeering. The primary reason for this difficulty is the potential tension between the two prongs of the pattern requirement: "relationship" and "continuity." (59) Nine federal circuit courts of appeal consistently apply some form of the "continuity plus relationship" test. (60) These circuits use a two-tiered analysis for the continuity prong, focusing on the length of time and number of acts required for continuity. (61) Either closed-ended or openended continuity satisfies the continuity test in these circuits. (62) These circuits also take a lenient approach to the relationship prong. (63) The remaining "continuity plus relationship" circuits have yet to clearly define the elements of the test. (64)
The Seventh and Tenth Circuits employ the H.J. Inc. test and consider duration and open-endedness of the racketeering activity, but cling to the multi-factor test applied prior to H.J. Inc. (65) The Fourth Circuit, using a hybrid approach, adopted the "continuity plus relationship" test to determine pattern, (66) but also reaffirmed its commitment to its prior multi-factor test as a means of determining the continuity prong of the pattern element. (67) The Fourth Circuit broadly interprets the continuity requirement because there is "no question but that a single scheme may be sufficient to establish a pattern." (68)
C. Enterprise
To violate RICO, a person must either, directly or indirectly, (69) acquire an interest in or administer an "enterprise." (70) An "enterprise" includes "any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity." (71) It is immaterial whether the defendant has a stake in the operation of the enterprise because individuals outside of a business may assist the business in attaining its illegal goals. (72)
For RICO purposes, an enterprise must exist independently from the racketeering activity in which it engages, its groups must have a common or shared purpose, and there must be at least some continuity of structure or personnel. To constitute an enterprise, a group must have an ongoing mechanism for directing the affairs of the group on an ongoing, rather than an ad hoc, basis. (73) Federal courts have a tremendous amount of discretion in developing the enterprise prong, and they have recognized a number of enterprise categories not mentioned in the statute. (74) As a result, circuit court approaches vary as to which types of enterprises are encompassed by the statute, how the existence of a RICO enterprise may be established, and whether the "person" charged with a RICO violation and the alleged "enterprise" must be separate and distinct entities.
1. Types of Enterprises
RICO is sufficiently broad to encompass illegal activities relating to any enterprise affecting interstate or foreign commerce. (75) Adhering to Congress's mandate that RICO be construed liberally, courts have held that the list of enumerated entities in [section] 1961(4) is not exhaustive, but illustrative. (76) A "shifting definition of 'enterprise'" has been held "necessary in view of the fluid nature of criminal associations." (77) A restrictive definition of enterprise excluding legal entities from its scope would:
lead to the bizarre result that only criminals who failed to form corporate shells to aid their illicit schemes could be reached by RICO. The interpretation hardly accords with Congress's remedial purposes: to design RICO as a weapon against the sophisticated racketeer as well as (and perhaps more than) the artless. (78)
Accordingly, courts have found that public entities and governmental agencies, as well as private entities, can constitute RICO enterprises. (79) For example, the term "enterprise" has been found to encompass private businesses, (80) sole proprietorships, (81) corporations, (82) labor organizations, (83) schools, (84) county prosecutors' offices, (85) marriages, (86) and other "associations in fact." (87)
A RICO enterprise need not be part of a formal relationship. (88) A combination of different entities can constitute an enterprise within the meaning of RICO. (89) Several circuits have found that unions of legal entities, including a group of corporations or partnerships, can constitute "associated-in-fact" enterprises. (90) In order to be an association-in-fact, the association must have a shared purpose, continuity, unity, an identifiable structure, (91) and some goals separate from the predicate acts themselves. (92)
Recognition as a RICO enterprise does not demand an economic motive (93) or legitimate business status. (94) In United States v. Rogers, (95) the Seventh Circuit observed that "[i]t would be ironic if the RICO statute, aimed primarily at criminal enterprises such as the Mafia and its many petty imitators, was more effective against legal enterprises because the latter have a more perspicuous, articulated structure." (96)
2. Proving the Enterprise
A recurring issue is the type and sufficiency of proof the government must offer to establish the existence of a RICO enterprise. The Supreme Court defines a RICO enterprise as "a group of persons associated together for a common purpose of engaging in a course of conduct" (97) that affects interstate or foreign commerce. (98) Although the circuits have yet to adopt a uniform definition of enterprise, they all require that the charged RICO enterprise have some sort of organizational structure. (99)
When the enterprise under consideration is a legal entity, the enterprise element is satisfied by the mere proof that the entity does in fact have a legal existence. (100) The existence of an association-in-fact requires the more difficult showing that "a group of persons associated together for a common purpose of engaging in a course of conduct." (101) According to the Supreme Court, any type of association can satisfy the enterprise element as long as it meets this definition. (102) As a result, courts have found a broad array of groups and organizations to constitute associations-in-fact. (103)
The existence of racketeering activity and enterprise are distinct elements of a RICO charge, (104) but the proof necessary to establish either can coincide. (105) When the Supreme Court articulated this principle in United States. v. Turkette, (106) it did not specify how much structure is needed for an association-in-fact enterprise; consequently, the circuits have taken differing positions on the degree of proof necessary to establish the existence of an enterprise that is sufficiently distinct and separate from the underlying pattern of racketeering. (107)
A majority of circuits have interpreted Turkette to require that a RICO enterprise have an ascertainable structure separate and distinct from the pattern of racketeering activities. (108) These circuits have expressed concern that allowing too much overlap between the two elements will make them interchangeable. (109) Although these circuits agree on the interpretation of Turkette, they apply the standard with varying degrees of rigidity. In contrast to the generally liberal approach of most circuits, the Eighth Circuit applies a rigid standard, requiring that the enterprise exist entirely separately and independently from the pattern of racketeering activity. (110) No other circuit takes this rigid approach; the First Circuit has expressly rejected the Eighth Circuit's standard. (111) On the liberal extreme, some circuits have allowed the existence of an enterprise to be inferred from the existence of the pattern of racketeering, while still maintaining that the two must be separate and distinct from one another. (112)
Two circuits have decided against the majority approach and have interpreted Turkette in such a way as to allow the organization constituting the enterprise to be no more than the sum of the predicate acts. (113) The Second Circuit has consistently recognized that the same evidence may be used to prove both the nature of the enterprise and the threat of continuity necessary to establish a RICO pattern (114) and allows the government to prove the existence of an enterprise by establishing commission of the racketeering acts. (115) The Eleventh Circuit takes a similar approach. (116)
3. Person-Enterprise Rule
The determination of whether the "person" charged with a RICO violation and the alleged "enterprise" must be separate and distinct turns on whether the action is brought under [section] 1962(a), (b), or (c). Most courts have held that actions brought under [section] 1962(a) (117) or (b) (118) do not require the RICO defendant to be separate from the enterprise. (119)
In contrast, in an action under [section] 1962(c), (120) the "person" must be distinct from the "enterprise" that conducts its affairs through a pattern of racketeering. (121) In June 2001, the Supreme Court resolved a circuit split over the issue of whether an employee of a corporation is a part of or distinct from that corporation by holding that an employee of a corporation, even when that employee is the corporation's sole shareholder, is a legally distinct "person" associated with the "enterprise" of the corporation. (122) Therefore, it is uniformly the law that the "person" and "enterprise" alleged under [section] 1962(c) must be only legally, and not necessarily actually, distinct. (123)
D. Effect on Interstate Commerce
For RICO to apply, the alleged racketeering activity must affect interstate commerce. (124) Courts initially held that the enterprise itself, and not the predicate acts, must affect interstate commerce. (125) However, many courts now exercise RICO jurisdiction if the predicate acts have a de minimis impact on interstate commerce, (126) demonstrated by "proof of a probable or potential impact." (127) This element may be satisfied if the enterprise's activities have an impact on interstate commerce, (128) which includes activities that "affect interstate commerce by impacting the victim." (129) Additionally, under a statute making it a federal crime to commit violent acts for the purpose of maintaining or increasing one's position within a racketeering enterprise engaged in interstate commerce, (130) it is not required that the violent acts themselves affected interstate commerce. (131)
E. Prohibited Acts
Activities expressly prohibited under [section] 1962 include: (i) investing income from a pattern of racketeering activity; (132) (ii) acquiring or maintaining an interest in an enterprise through a pattern of racketeering activity; (133) (iii) conducting the affairs of an enterprise through a pattern of racketeering activity; (134) and (iv) conspiring to do any of the above. (135)
1. Investment of Racketeering Proceeds
Section 1962(a) prohibits the establishment or operation of, or acquisition of interest in, any enterprise engaged in or affecting interstate or foreign commerce with income derived, either directly or indirectly, from a pattern of racketeering activity. (136) Subsection (a) is clearly aimed at the "classic Mafia investment case envisioned by Congress," (137) where "organized criminals gain control of an uncorrupted business by investing profits from gambling or other illegal activities." (138)
Relatively few criminal indictments allege a violation of [section] 1962(a). (139) Section 1962(a) requires the government to prove that the defendant both committed the alleged predicate activities and invested the income from those activities in the targeted manner. (140) The limited case law suggests that if such a tracing requirement exists, courts tend not to enforce it strictly. (141) The tracing of income, as well as the defendant's knowledge (142) of the income source, is almost always inferred by courts. (143) "In most contexts, direct proof of tracing is impossible due to the fungible nature of money and the failure of organized crime figures to maintain records that accurately reflect the source of illgotten gains." (144)
2. Illegal Acquisition of Enterprise Interest
Section 1962(b) prohibits "any person" from acquiring or maintaining, "through a pattern of racketeering activity," an interest in "any enterprise which is engaged in, or the activities of which affect, interstate or foreign commerce." (145) Thus, [section] 1962(b) is aimed at cases in which organized criminals commit racketeering acts to gain control of legitimate businesses, (146) Like [section] 1962(a), [section] 1962(b) rarely forms the basis of a RICO action. (147) Unlike [section] 1962(a), however, [section] 1962(b) does not require that the defendant receive proceeds from the pattern of activity. (148)
3. Conducting an Enterprise Through Racketeering Acts
Section 1962(c) prohibits persons employed by or associated with an enterprise from conducting or participating in the conduct or the affairs of that enterprise through a pattern of racketeering activity. (149) A relationship between the pattern of racketeering activity and the enterprise is required. (150)
In Reves v. Ernst & Young, (151) the Supreme Court held that the requisite nexus exists only when the defendant participates in the management or operation of the enterprise. (152) Actions involving a low degree of decision-making may not constitute participation in the affairs of the enterprise. (153) One must play some role in directing the affairs of the enterprise to "conduct or participate" in the affairs of the enterprise. (154)
Reves does not preclude professionals, such as lawyers and accountants, from being subject to RICO liability. (155) The enterprise may be "'operated' or 'managed' by others 'associated with' the enterprise who exert control over it as, for example, by bribery." (156) Generally, courts have found that the participation must exceed merely reporting to the enterprise. (157)
Reves, while acknowledging that "lower rung" employees could participate in the enterprise, (158) explicitly declined to decide how far the operation and management test extends down the corporate chain of command. (159) The Court therefore did not specify what degree of activity is required for such employees to satisfy the participation requirement. (160) Subsequent circuit court decisions have generally extended RICO liability to employees who carry out instructions. (161)
4. Conspiracy
Section 1962(d) prohibits "any person" from conspiring to violate any provision of [section] 1962. (162) This provision does not require any overt act by the defendant. (163) Instead, the Supreme Court held in Salinas v. United States that "partners in the criminal plan must agree to pursue the same criminal objective," even if each conspirator does not agree to commit or facilitate each and every part of the substantive offense. (164) Section 1962(d) therefore allows for prosecution of individuals who have not committed any of the predicate acts of racketeering as long as the government proves the defendant "intend[ed] to further an endeavor which, if completed, would satisfy all of the elements of a substantive criminal offense." (165) As a result, a defendant may be found not guilty of the substantive offense, but may still be convicted of conspiracy if there is proof of an agreement to commit the substantive crime. (166)
III. DEFENSES
This Section addresses a variety of potential defenses to RICO prosecutions. Part A assesses the results when one or more underlying predicate acts supporting a RICO offense is invalidated. Part B discusses the statute of limitations for criminal and civil RICO violations. Part C examines a defendant's withdrawal from a conspiracy as a defense under [section] 1962(d). Parts D and E both discuss preemption challenges to RICO. Specifically, Part D addresses challenges based on the "primary jurisdiction" or "horizontal preemption" defense, while Part E describes approaches using a "reverse vertical preemption" theory. Finally, Part F considers constitutional challenges to RICO.
A. Invalidity of One or More Predicate Acts
Most circuits agree that a RICO conviction may be sustained despite invalidation of multiple predicate acts so long as valid convictions remain to support the legal sufficiency of at least two predicate acts. (167)
Courts face a more difficult issue when the invalidation of predicate acts leaves no remaining substantive convictions to serve as the two predicate acts required for a RICO conviction. Without any indication as to which predicate acts served as the basis for the RICO conviction, there is a risk that the jury may have relied on legally insufficient acts. Courts may reverse a RICO conviction in two situations: (i) when it appears that the jury based the RICO conviction on the invalidated convictions; (168) or (ii) when the jury did not indicate which of the predicate acts formed the basis of the conviction. (169)
The Supreme Court has not ruled definitively on this issue with regard to RICO. In Griffin v. United States, (170) however, the Court held that a verdict in a multi-object conspiracy conviction should be sustained if the evidence is adequate to support conviction as to any one of the objects. (171) Four circuits have extended the Griffin reasoning to RICO convictions. (172)
B. Limitation of Actions
RICO contains no explicit statute of limitations period, however, in Agency HoMing Corp. v. Malley-Duff & Assoc., Inc., (173) the Supreme Court defined limitation periods for criminal and civil RICO actions. (174) For criminal RICO prosecutions, the Supreme Court applied a five-year statute of limitations period because Congress explicitly provided that term as the default statute of limitations for criminal actions. (175) For civil actions, the Court held that the statute of (176) limitations is four years.
The "last predicate act" accrual method is used for criminal RICO actions to determine when the five-year statute of limitations begins to run. (177) This method allows for punishment of all predicate acts, no matter when committed, if "the government ... demonstrate[s] that a defendant committed at least one predicate racketeering act within the limitations period." (178)
Courts have applied the "last predicate act" method differently depending on which subsection of [section] 1962 forms the basis of the criminal action. A [section] 1962(a) offense arises when a defendant invests income derived from racketeering activity. The Fourth Circuit has held the statute of limitations for this category of criminal RICO action begins to run upon the investment of the income, as opposed to the illegal activity from which the income was derived. (179) In contrast, the statute of limitations for actions arising under criminal RICO [section] 1962(b) and (c) begins to run when the last illegal predicate act necessary for the RICO conviction is committed. (180) For a criminal RICO conspiracy action arising under [section] 1962(d), "the statute of limitations for a RICO conspiracy does not begin to run until the objectives of the conspiracy have been either achieved or abandoned," (181) even if the actual illegal predicate acts occurred more than five years prior to the RICO action's initiatio. (182)
C. Withdrawal From Conspiracy
Withdrawal from the conspiracy is a permissible defense to an action brought under [section] 1962(d) when a defendant can prove she took affirmative steps, inconsistent with the objectives of the conspiracy, to disavow or to defeat the conspiratorial objectives. (183) Additionally, the defendant must have either made a reasonable effort to communicate those steps to her co-conspirators or disclosed their scheme to law enforcement authorities. (184)
Moreover, several circuits have held resignation from the enterprise does not constitute withdrawal as a matter of law. (185) A Third Circuit court found a defendant may withdraw from the conspiracy by completely severing ties with the enterprise, but may still be a party to the conspiracy if she continues to take actions that further the goals of the conspiracy and continues to receive benefits from the conspiracy. (186)
D. "Horizontal Preemption" or "Primary Jurisdiction"
Because many RICO actions involve conduct that is itself the subject of pervasive administrative regulation, some RICO defendants claim a "primary jurisdiction" defense, arguing that the RICO claims are preempted or otherwise are not within the court's jurisdiction because an administrative body has the duty of regulating the conduct in dispute. (187) The doctrine of primary jurisdiction applies to "claims properly cognizable in court that contain some issue within the special competence of an administrative agency. It requires the court to enable a 'referral' to the agency staying further proceedings so as to give the parties reasonable opportunity to seek an administrative ruling." (188) Defendants invoke the "primary jurisdiction" defense (189) most frequently in labor law cases, (190) claiming that the alleged racketeering activity is conduct that is an "unfair labor practice," (191) the regulation of which is left to the National Labor Relations Board ("NLRB") under the National Labor Relations Act ("NLRA"). (192) "If the existence of the predicate acts depends wholly upon a determination that a violation of federal labor law occurred, jurisdiction is preempted." (193) However, there are several exceptions to the "primary jurisdiction" defense.
RICO charges are not preempted by federal labor law when the underlying offenses fall within the labor related activities expressly included in the RICO statute at [section] 1961 (1)(c). (194) In addition, courts view the primary jurisdiction defense with skepticism in cases where labor disputes are only collaterally related to the RICO charge. (195) Finally, if the predicate acts are illegal independent of labor law, they are not preempted. (196)
In a different scenario, the Second Circuit held a district court could, under a consent decree arising from RICO litigation, issue orders normally within NLRB's exclusive province. (197) Horizontal preemption of the district court's jurisdiction was inappropriate in this situation because of the district court's need to assert comprehensive control over complex litigation and to provide for administrative convenience. (198)
RICO defendants in non-labor law cases have also attempted to invoke the primary jurisdiction preemption defense, but with less success. (199) While this defense has proved successful in actions against public utilities where the "filed rate" doctrine bars courts from setting rates different from those filed with the agency, (200) it has received much less favor in other non-labor contexts. A federal court may not defer to an administrative agency if the claim at issue is of a type such as fraud or deceit that is "'within the conventional competence of the courts' and [where] the judgment of ... the agency with concurrent jurisdiction [is] not likely to be helpful." (201) Also, a federal court usually will not invoke the primary jurisdiction doctrine to defer to a state administrative agency. (202)
E. "Reverse Vertical Preemption"
The Supreme Court has established abstention doctrines requiring that a federal court with proper jurisdiction over the subject matter of a dispute nevertheless "stay its hand" in order to promote an overriding policy, such as the maintenance of a particular relationship between the national government and the states. (203) Courts hearing RICO cases in particular have employed the "Pullman abstention" (204) and "Burford abstention." (205) The "Pullman abstention" counsels a federal court to refrain from deciding a case if there is a potentially dispositive question of serious, unsettled state law in the case on which a state decision may render a decision on the merits of the federal dispute unnecessary. (206) The "Burford abstention" counsels a federal court to refrain from deciding a case if the subject matter of the dispute is the subject of extensive state administrative regulation and a federal decision would risk serious disruption of a state administrative scheme. (207)
In DeMauro v. DeMauro, (208) the First Circuit confronted a RICO action that was intermingled with a divorce proceeding. (209) The court implemented a limited form of abstention because staying the federal proceedings would reduce the "risk of interfering with interim state allocations and permit the federal court to tailor any final federal judgment to avoid undermining the divorce court's allocation of property." (210) By contrast, the Second Circuit has held that abstention under Burford was inappropriate in a RICO case where the predicate acts were solely federal law violations and a treble damage award would not interfere with state administrative processes. (211)
F. Constitutional Challenges
RICO has faced several constitutional challenges, including those based on double jeopardy, the First Amendment, the Eighth Amendment, equal protection, due process,...
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