Kara Sears
The Racketeer Influenced and Corrupt Organizations (RICO) Act, passed in 1970, allows any person to be held legally liable for damages caused by unlawful racketeering activity. While the law does not restrict any person to individuals, there are limits to who can be sued under RICO. As a general rule, civil RICO lawsuits cannot be filed against the government or a government agency as they are not persons under the statute and have sovereign immunity. However, in 2000, a federal district judge ruled that the RICO statute could be used to name the entire LAPD as a criminal enterprise in lawsuits over police brutality and misconduct. This ruling resulted in over 140 civil RICO lawsuits against the department, but the plaintiffs were ultimately denied standing as they were alleging personal injuries rather than economic or property damage.
| Characteristics | Values |
|---|---|
| Can a city be sued under RICO law? | Yes, in 2018, 80 towns and cities in Massachusetts sued several major drug companies under RICO. |
| Who can be sued under RICO law? | Any person, formal or informal entity, labor unions, government agencies (although government agencies are generally immune from lawsuits unless they give express permission to be sued). |
| What are some examples of RICO lawsuits? | In 2018, several major drug companies were sued under RICO by 80 towns and cities in Massachusetts seeking damages over the opioid crisis. Facebook was also sued under RICO for failing to notify its users that their profiles were compromised. |
| What is the advantage of using RICO law? | Unlike most criminal statutes, RICO contains a civil component that allows it to be used to turn ordinary business disputes that would be filed in state courts into federal cases. Proving a violation results in triple damages plus attorney's fees, giving plaintiffs an incentive to turn their grievances into a RICO suit. |
| What is the history of RICO law? | The Racketeer Influenced and Corrupt Organizations (RICO) law was passed in 1970 to target organized crime and give prosecutors the power to go after all individuals involved in an organization. |
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What You'll Learn
Cities cannot be sued under RICO law as they are government entities
Cities cannot be sued under the RICO Act as they are government entities. RICO, or the Racketeer Influenced and Corrupt Organizations Act, is a federal law that was passed in 1970 to target organized crime. While the law defines "any person" in a very broad manner, and entities—formal or informal—can potentially be sued for a civil RICO violation, there are limits to who can be sued. As a general rule, you cannot file a civil RICO lawsuit against the government or a government agency. This is because the government has sovereign immunity, which means it is immune from lawsuits unless it gives express permission to be sued. This permission has not been granted in relation to civil RICO claims.
The RICO Act has been used to prosecute individuals and organizations engaged in a wide range of criminal activities, including labor union officials, the Mafia, and drug companies. In one notable case, the Los Angeles Police Department (LAPD) was named as a criminal enterprise under the RICO Act by a federal district judge, however, this ruling was later overturned. While it is possible for the government to commit a "predicate act" that violates the RICO Act, the government and its agencies are not considered "persons" that can be sued under the statute.
The question of whether a specific government agency, such as the FBI or a local city council, can violate the RICO Act has not been addressed by the United States Supreme Court. However, the circuit courts of appeals that have considered the question generally agree that governmental entities cannot be named as defendant persons under the RICO Act. This means that cities, as government entities, cannot be sued under the RICO Act.
It is important to note that while cities cannot be sued under the federal RICO Act, they may be subject to state RICO laws. As of 2014, 33 states, Puerto Rico, and the United States Virgin Islands had adopted state RICO laws to cover state offenses. These laws may differ from the federal RICO Act and from each other, so it is important to consider the specific state's legislation when discussing potential liability under RICO.
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RICO law was passed in 1970 to target organised crime
The Racketeer Influenced and Corrupt Organizations (RICO) Act is a United States federal law enacted in 1970 to target organised crime. It was signed into law by US President Richard Nixon. The RICO Act provides for extended criminal penalties and a civil cause of action for acts performed as part of an ongoing criminal organisation.
Prior to the RICO Act, prosecutors could only try mob-related crimes individually. As different mobsters perpetrated each crime, the government could only prosecute individual criminals instead of taking down an entire criminal organisation. The RICO Act changed this by allowing the prosecution of all individuals involved in a corrupt organisation. This means that the government can go after the top leadership, as well as the hitmen and capos of criminal organisations.
The RICO Act defines "any person" in a very broad manner. It is not restricted to individuals, and formal or informal entities can potentially be sued for a civil RICO violation. This includes labour unions, corporations, political parties, and managed care companies. However, it is important to note that an enterprise, formal or informal, must have been created to carry out the racketeering activity alleged in the lawsuit.
To violate RICO, a person must engage in a pattern of racketeering activity connected to an enterprise. The law defines 35 offenses as constituting racketeering, including gambling, murder, kidnapping, arson, drug dealing, bribery, blackmail, extortion, and mail and wire fraud. To charge under RICO, at least two predicate crimes within a 10-year period must have been committed through the enterprise.
While RICO was originally aimed at the Mafia, prosecutors have since used it to target many other forms of organised crime, including street gangs, gang cartels, corrupt police departments, and politicians.
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RICO law covers 27 federal crimes and 8 state crimes
The Racketeer Influenced and Corrupt Organizations (RICO) Act is a federal statute that covers a broad range of criminal activities. Under RICO, a person who has committed at least two acts of racketeering activity from a list of 35 crimes, including 27 federal crimes and eight state crimes, within a 10-year period can be charged with racketeering if the acts are related. These crimes include traditional RICO predicate acts such as extortion, blackmail, and racketeering, as well as other offenses like gambling, murder, kidnapping, arson, robbery, bribery, counterfeiting, theft, embezzlement, fraud, dealing in obscene material, obstruction of justice, slavery, drug trafficking, and money laundering.
The RICO Act was passed in 1970 to target organized crime, particularly the Mafia, and allow for the prosecution of all individuals within a corrupt organization. While it was initially used to prosecute the Mafia and other forms of organized crime, in later years, prosecutors have applied the law more broadly to target street gangs, gang cartels, corrupt police departments, and politicians. The law's broad definition of "any person" allows for formal or informal entities to be sued for civil RICO violations, including labor unions and corporations.
However, there are limitations to who can be sued under RICO. As a general rule, civil RICO lawsuits cannot be filed against the government or government agencies due to sovereign immunity. While the government may engage in acts that constitute RICO violations, it has not given permission to be sued under civil RICO claims. Additionally, a successful civil RICO lawsuit must prove the existence of an enterprise, which is a discrete entity separate from an individual, that was created to carry out the alleged racketeering activity.
The RICO Act has been used in notable cases such as the prosecution of Louisiana Commissioner of Agriculture and Forestry Gil Dozier for extortion and racketeering, and the indictment of 11 organized crime figures by US Attorney Rudy Giuliani in 1985. The Act also allows for civil suits, where individuals can seek treble damages if they have been injured by a RICO violation. For example, in 2000, Federal District Judge William Rea ruled that the RICO statute could be used to name the LAPD as a criminal enterprise in civil suits alleging police brutality and misconduct.
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RICO law has been used to prosecute the Mafia
The Racketeer Influenced and Corrupt Organizations (RICO) Act was passed in 1970 to target mob-related crimes. Before the RICO Act, prosecutors could only try mob-related crimes individually. With the RICO Act, prosecutors could go after the top leadership, hitmen, and capos of criminal organizations. The Act defines "any person" in a very broad manner, allowing for individuals, formal or informal entities, and enterprises to be held liable for racketeering activity.
During the 1980s and 1990s, federal prosecutors used the law to bring charges against several Mafia figures. In 1985, United States Attorney Rudy Giuliani indicted 11 organized crime figures, including the heads of New York's "Five Families," using the RICO Act. In 2005, the US Department of Justice's Operation Family Secrets indicted 14 Chicago Outfit (also known as the Chicago Mafia) members and associates under RICO predicates.
In addition to prosecuting the Mafia, RICO law has also been used to target other forms of organized crime, such as street gangs, gang cartels, corrupt police departments, and politicians. While RICO was originally aimed at the Mafia, prosecutors have since used it to attack many other forms of organized crime.
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RICO law has been used to sue big pharma
RICO law, or the Racketeer Influenced and Corrupt Organizations Act, was initially aimed at dismantling organised crime. However, in recent years, it has been applied to corporate and business activities that are considered criminal in nature. RICO law has been used to sue Big Pharma, with the Massachusetts and New York state attorney generals suing Purdue Pharma and members of the Sackler family, who own the company. The government alleged that the company was involved in wire fraud, bribery, and illegal drug distribution, and the jury agreed.
In another case, Insys Therapeutics executives were convicted of bribing doctors to overprescribe dangerous fentanyl-based drugs and defrauding Medicare and private insurance companies. The founder and top executives of Insys were found guilty of conspiracy under the RICO Act and faced up to 20 years in prison and a fine of up to $250,000 each. This case set a precedent for applying RICO to pharmaceutical companies accused of similar business practices.
In July 2024, Allstate Insurance filed a lawsuit under the RICO Act against Marc Kassman and SMK Pharmacy in Rockaway Beach, Queens. The lawsuit alleged that Kassman orchestrated a $4 million fraud scheme by exploiting New York's no-fault insurance system. This case is part of a growing trend of healthcare-related fraud cases prosecuted under RICO, as insurers crack down on fraudulent practices that harm patients and insurers.
RICO law has also been used in other notable cases, such as the conviction of John Gotti and Frank Locascio in 1992 and the indictment of rapper Young Thug and his YSL Records label in 2022. The law's broad definition of "any person" means that formal or informal entities can be sued, including labor unions and government agencies, although there are some limitations.
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Frequently asked questions
While there is no explicit precedent of a city being sued under the RICO law, 80 towns and cities in Massachusetts sued several major drug companies under RICO, including AmerisourceBergen Drug Corporation, Purdue Pharma L.P., and Janssen Pharmaceuticals Inc.
The Racketeer Influenced and Corrupt Organizations (RICO) law was passed in 1970 to target organized crime. It allows prosecutors to target all individuals involved in an organization, from leaders to street members.
Under the RICO law, "any person" can be held legally liable for damages caused by unlawful racketeering activity. This includes formal or informal entities, and individuals.
RICO lawsuits have been filed against the LAPD, Facebook, Donald Trump, and Major drug companies, among others.
No, governmental agencies cannot be named as defendant persons under the RICO Act. This is because the government has sovereign immunity and is immune from lawsuits unless it gives express permission to sue.
