US federal appeals court gives extraterritorial application to Racketeer Influence and Corrupt Organization Act (RICO)

In a milestone ruling last week, a Second Circuit panel has revived a massive civil RICO action brought a dozen years ago by the EU and twenty-six of its member states against R.J. Reynolds Tobacco and related entities for their role in an alleged global money-laundering enterprise involving claims of drug and cigarette smuggling: European Community v. RJR Nabisco, Inc., No. 11-2475-cv (2d Cir. Apr. 23, 2014). 

The ruling breaks new ground with its rejection of a categorical bar on the extraterritorial application of RICO, as a number of courts have held following the US Supreme Court's landmark extraterritoriality ruling in Morrison in 2010 (see post). You can read more about the Second Circuit's decision in our cross-border litigation e-bulletin.