Commercial Litigation and Arbitration

RICO — Association-In-Fact Enterprise — Ascertainable Structure Requirement

For years, anyone who has litigated RICO claims in the Ninth Circuit has had to deal with a very amorphous definition of association-in-fact enterprise — one that could (but not necessarily would) be satisfied by almost any contractual relationship. Now, there is a strong argument that ‛could“ has now become ‛would.“ In an en banc decision, Odom v. Microsoft Corp., 486 F.3d 541 (9th Cir. 2007), after reviewing the varying views of the Circuits on the subject, the Ninth Circuit ‛join[ed] the circuits that hold that an associated-in-fact enterprise under RICO does not require any particular organizational structure, separate or otherwise.“ To plead an association-in-fact enterprise in the Ninth Circuit under Odom, a plaintiff need only satisfy in some undefined way the rather open-ended requirements set forth in United States v. Turkette , 452 U.S. 576, 583 (1981): "[E]vidence of an ongoing organization, formal or informal," and "evidence that the various associates function as a continuing unit.“ While the judgment was unanimous, it was not because of agreement on the contours of association-in-fact enterprise. In the wordsa of one of the six (of 15) judges who concurred only in the result: ‛It strikes me as outlandish that ... a ‘marketing contract’ between Microsoft and Best Buy could subject them to a private RICO action.“ Anyone doubt where the Supreme Court would come out on this?

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