The pending case of European Community versus RJR Nabisco Inc. had a hearing at the U.S. Supreme Court to listen to RJR Nabisco's laundering case as it challenges the RICO statute.
The lawsuit was filed by the European Community and 26 of its member states against RJR Nabisco, a tobacco and foods giant. RJR Nabisco allegedly directed, managed, and controlled an international money laundering scheme that violated the Racketeer Influenced and Corrupt Organizations (RICO) statute and other New York state laws. The European Community accused RJR Nabisco for supervising the purchase of illegal drugs from Colombian and Russian syndicates, and allowing the importers to purchase cigarettes at a discounted rte. The facts of the case were presented by ITT Chicago-Kent College of Law.
The European Community filings said that the employees of RJR Nabisco that worked in the United States had regularly regularly travelled to Colombia, met with known money launderers and narcotics traffickers, exchanged large quantities of cigarettes for cash, and then transferred the cash into bank accounts in the United States.
The question now that the Supreme Court wanted to decide on is whether the RICO statute can still be applied extraterritorially or not, since the alleged crimes of RJR Nabisco occurd outside of American territory.
The RICO statute is a particularly attractive law for plaintiffs. If the case of the European Community succeeds, the Financial Times said that other multinational companies could be facing lawsuits as well.
The National Foreign Trade Council said that the application of RICO to outside countries would significantly increase litigation exposure for U.S. companies that do their business abroad. More than 300 companies under the NFTC like Google, Walmart, Ford and Chevron, and many other banking institutions would be affected with large number of filings and human rights violation, for example. Aside from that, RICO would eventually drive away foreign companies from making U.S. investments.
When the Supreme Court favors the decision to extend RICO, it could open the door for the EU to look to the U.S. to file their civil RICO claims. Law 360 added that RJR Nabisco said, "Allowing a plaintiff who suffered a RICO-related injury abroad to bring a private suit in the United States seeking treble damages has real potential to cause difficulties vis-a-vis the country where the injury took place, which may well seek to regulate the matter under its own legal framework."
None of the attorneys from both sides answered to a request for an interview.
