U.S. Chamber of Commerce - September 6 - Chamber Urges Supreme Court to Review Abusive Interpretation of RICO

WASHINGTON, D.C.—In a friend-of-the-court brief, the National Chamber Litigation Center (NCLC) urged the Supreme Court to grant review to consider whether the Racketeer Influenced and Corrupt Organizations (RICO) Act can be applied to a garden variety marketing agreement.

“RICO was designed to deter organized crime, not to be used as a tool to force legitimate companies to pay treble damages.” said NCLC's Executive Vice President Robin Conrad. “Courts should prevent RICO from being turned into the litigation equivalent of a thermonuclear device.”

RICO was enacted to enable prosecutors to target criminal syndicates which had infiltrated and corrupted legitimate enterprises. At issue in Microsoft Corporation v. Odom is whether a joint marketing contract to offer and activate trial membership of Microsoft’s internet access service in Best Buy stores without the knowledge of Best Buy’s customers qualifies as an “enterprise” for the purposes of establishing a RICO violation, as incorrectly found by the U.S. Court of Appeals for the Ninth Circuit. In its brief, NCLC explained that this improper interpretation of RICO contradicted the plain terms of the statute and expanded RICO liability in a manner that would undermine business partnerships and adversely impact the economy.

“Microsoft’s marketing relationship with Best Buy cannot possibly satisfy the statutory definition of a RICO enterprise,” said Conrad. “This case threatens to dramatically expand RICO liability for corporations that must rely more than ever on joint ventures to remain competitive.”

NCLC, the public policy law firm of the U.S. Chamber of Commerce, is a membership organization that advocates fair treatment of business in the courts and before regulatory agencies. The U.S. Chamber is the world’s largest business federation representing more than 3 million businesses and organizations of every size, sector, and region.