Human rights and labor advocates often raise the possibility of using the Racketeer Influenced and Corrupt Organizations Act (18 USC § 1962) (“RICO”) to sue companies who violate human rights overseas. At first glance, this seems like a great fit. The Act provides both civil and criminal liability for individuals and organizations, including corporations, engaging in a pattern of certain criminal acts (including murder, extortion, bribery and other crimes) that are often involved in human rights abuse cases. So why can’t foreign victims of torture, murder or crimes against humanity at the hands of U.S. companies operating abroad bring RICO suits for damages?
In short, RICO’s reach is limited in many cases, including almost all civil cases, to the territorial United States. RICO’s criminal provisions are applicable to corporations having committed human rights abuses overseas, but only in particular circumstances. In RJR Nabisco, Inc. v. The European Community (2016), the U.S. Supreme Court held that a RICO violation may be based on a “pattern of racketeering that includes predicate offenses committed abroad, provided that each of those offenses violates a predicate statute that is itself extraterritorial.” Prior to RJR Nabisco, RICO claims were periodically included in international human rights cases against companies (such as Wiwa v. Royal Dutch Shell, settled for $15.5 million in 2009).
RJR Nabisco follows a trend starting in 2010 to limit the extraterritorial reach of U.S. statutes, which has greatly diminished the ability of foreign plaintiffs to bring human rights claims in U.S. courts. In Morrison v. National Australia Bank (2010) and then Kiobel v. Royal Dutch Petroleum (2013), the Supreme Court found that unless it is clear from the statute or its legislative history that Congress intended it to apply outside of U.S. territory, it doesn’t. So the number of statutes that do have extraterritorial reach is shrinking.
Still, this leaves room for hope that prosecutors will bring criminal charges against U.S. companies in relation to serious overseas human rights abuses in their operations. Torture may be a candidate, as (1) courts have not ruled that application of the Torture Victim Protection Act doesn’t extend outside of the U.S., (2) the prohibition on torture is considered part of customary international law, and (3) the TVPA itself domesticates U.S. obligations under the Convention Against Torture. But to address harms like workers becoming disabled due to poor workplace safety, workers dying in factory fires and collapses, and people dying of diseases related to corporate environmental destruction, even under the criminal provisions of RICO there is probably no recourse.
But on the civil side, RJR Nabisco made clear that RICO, like the Alien Tort Statute, does not apply extraterritorially. Foreign victims of U.S. companies who seek reparations for the harms they or their family members have suffered, even if those harms are a violation of customary international law and otherwise constitute a clear RICO violation, will almost never present a winning theory. Amy Howe explains this part of the RJR Nabisco ruling this way:
Even if RICO itself applies to conduct that occurs outside the United States, the Court ruled, the part of RICO that allows private plaintiffs like the EC [European Community] to file civil suits in U.S. courts (including for treble damages) does not apply to injuries outside the United States. Instead, to maintain its lawsuit against RJR, the EC would have to show that it was injured in the United States. Imposing this requirement for private lawsuits makes sense, the Court reasoned, even when RICO itself applies to the foreign conduct, because allowing lawsuits in U.S. courts for foreign conduct creates the very real possibility of international conflict. Moreover, nothing in the text of RICO clearly indicates that Congress meant to allow private lawsuits to recover for injuries outside the United States. Because the European Community had agreed earlier in the proceedings to drop its claims to recover for injuries that occurred within the United States, the Court concluded, all of its remaining claims for damages are based on injuries that occurred overseas and therefore cannot go forward.
A civil suit then would require a victim of human rights abuse outside of the U.S. to also suffer a harm inside of the U.S. This is just another example of domestic law failing to keep up with the globalization of the economy, making supply chains an unregulated wild west, and allowing for extraordinary levels of harm with no compensation. But that’s a bigger topic for another post.
A successful human rights or environmental RICO civil suit is hard to imagine, so help me out. Do you have a hypothetical fact pattern for a RICO suit on behalf of a victim of human rights abuses overseas that could work? Or maybe I’m viewing this statute too narrowly and you have another perspective on how RICO can be leveraged for corporate accountability in global supply chains?
Charity Ryerson is a co-founder and legal designer for Corporate Accountability Lab.