Opinion · Supreme Court of the United States
American Nat. Bank & Trust Co. of Chicago v. Haroco, Inc.
87 L. Ed. 2d 437
- Type
- Opinion
- Court
- Supreme Court of the United States
- Jurisdiction
- Federal
- Date
- 1985-07-01
- Topic
- general
holding that Rule 9(b) Fed.R.Civ.P., requiring allegations of fraud to be pled with specificity, applies to fraud allegations in civil RICO complaints | noting that a defendant who violates RICO is not liable to those who have not been injured, nor to those defendant might have injured by other conduct | noting that Rule 9(b) applies to fraud allegations in civil RICO complaints | question whether complaint adequately alleges conduct of racketeering enterprise is not fairly included in question whether statute requires that plaintiff suffer damages through defendant's conduct of such an enterprise | question whether complaint adequately alleges conduct of racketeering enterprise is not fairly included in question whether statute requires that plaintiff suffer damages through defendant’s conduct of such an enterprise | RICO claim stated where bank alleged to have charged interest rates in excess of loan agreement | “Subsection (a) does not contain any of the language in subsection (c) which suggests that the liable. person and the enterprise must be separate” | “The subsection requires only some separate and distinct existence for the person and the enterprise, and a subsidiary corporation is certainly a legal entity distinct from its parent” | "by reason of" language of § 1964(c) "simply imposes a proximate cause requirement on plaintiffs" | “There can be little doubt that Fed.R.Civ.P. 9(b), which requires that allegations of fraud specify ‘with particularity’ the circumstances of the alleged fraud, applies to fraud allegations in civil RICO complaints.” | “ ‘A defendant who violates section 1962 is not liable for treble damages to everyone he might have injured by other conduct,’ but only to anyone whose injuries were caused ‘by reason of a violation of section 1962.’ ” | the person and the enterprise must be distinct entities | “In the association in fact situation, each participant in the enterprise may be a ‘person’ liable under RICO, but the association itself cannot be. By contrast, a corporation obviously qualifies as a ‘person’ under RICO and may be subject to RICO liability.” | charging of excessive interest rate constitutes federal RICO offense | companion case reaching same conclusion | the distinction does not apply
Citator
- Cited by
- 182 opinions
This is a private civil action brought under the Racketeer Influenced and Corrupt Organizations Act (RICO), Pub. L. 91-452, Title IX, 84 Stat. 941, as amended, 18 U. S. C. §§ 1961-1968. Respondents’ complaint alleged that petitioner bank and several of its officers had fraudulently charged excessive interest rates on loans. The gist of the claim was that the bank had lied with regard to its prime rate and that the rate charged to respondents, which was pegged to the prime, was therefore too high. The complaint alleged that this scheme to defraud, which was carried on through the mails, violated 18 U. S. C. § 1962(c), in that the mailings constituted a pattern of racketeering activity by means of which petitioners conducted, or participated in the conduct *608 of, the bank. The only injuries alleged were the excessive interest charges themselves.
The District Court dismissed on the ground that the complaint did not state a claim. 577.F. Supp. Ill (ND Ill. 1983). In its view, “to be cognizable under RICO [the injury] must be caused by a RICO violation and not simply by the commission of predicate offenses, such as acts of mail fraud. ” Id., at 114. The Court of Appeals for the Seventh Circuit reversed in relevant part, 747 F. 2d 384 (1984), rejecting various formulations of a requirement of a distinct RICO injury. We granted. certiorari, 469 U. S. 1157 (1984), to consider the question whether a claim under § 1964(c) requires that the plaintiff have suffered damages by reason of the defendant’s violation of § 1962 through the prescribed predicate offenses, or whether injury from those offenses alone is sufficient. *
In their brief, and at oral argument, petitioners have argued primarily that respondents’ complaint does not adequately allege a violation of § 1962(c). In particular, they assert that respondents have not shown that the enterprise was “conducted” through a pattern of racketeering activity. Petitioners do not appear to have made this precise argument below, it was not addressed by the Court of Appeals, and it quite clearly is not included in the question presented by their petition for certiorari. Although we have the authority to waive it, this Court’s Rule 21.1(a) provides that only the question set forth in the petition for certiorari or fairly included therein will be considered, and we therefore do not consider petitioners’ late-blooming argument that the complaint failed to allege a violation of § 1962(c).
*609 To the extent petitioners’ argument is a variation on the racketeering injury concept at issue in Sedima, S. P. R. L. v. Imrex Co., ante, p. 479, it is inconsistent with that decision. ' The submission that the injury must flow not from the predicate acts themselves but from the fact that they were performed as part of the conduct of an enterprise suffers from the same defects as the amorphous and unfounded restrictions on the RICO private action we rejected in that case.
With regard to the question presented, we view the decision of the court below as consistent with today’s opinion in Sedima, and it is accordingly
Affirmed.
[For dissenting opinion of Justice Marshall, see ante, p. 500.]The question presented was:
“Whether a civil claim for treble damages under the Racketeer Influenced And Corrupt Organizations Act (‘RICO’) requires that the plaintiff suffer damages by reason of the defendant acquiring, maintaining control or an interest in, or conducting the affairs of an ‘enterprise’ through the commission of statutorily prescribed offenses as opposed to being damaged solely by reason of the defendant’s commission of such offenses.” Pet. for Cert. i.