In business litigation, a plaintiff will sometimes assert a claim under the Racketeer Influenced and Corrupt Organizations Act (RICO), a federal statute at 18 U.S.C. §1961 et seq. RICO provides that it is “unlawful for any person through a pattern of racketeering activity … to acquire or maintain, directly or indirectly, any interest in or control of any enterprise which is engaged in, or the activities of which affect, interstate or foreign commerce” and forbids conspiracy to do the same.
RICO was famously used to allow criminal prosecutors to go after mafia-related crimes en masse rather than in individual one-off prosecutions. RICO also provides for civil remedies arising from a pattern of racketeering (i.e., criminal) activity, including treble (triple) damages.
While the elements of RICO are often difficult for a civil plaintiff to satisfy (especially the “pattern” element, which requires a showing of an ongoing threat of criminal activity), when provable, a RICO claim can be a “big gun” changing the leverage of a case.
Can a cannabis LLC assert a claim under RICO in light of slow-to-evolve federal law, which still declares cannabis to be an illegal substance?
In an opinion recently published by the federal Ninth Circuit Court of Appeal — Shulman v. Kaplan — the court addressed this issue.
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