RICO — Injury to Business or Property — Loss of a Cause of Action

It is well-settled that personal injuries are not injuries to "business or property" within 18 U.S.C. 1964(c). What about a chose in action for personal injuries? In an unpublished opinion (whatever vitality that distinction enjoys in the E-Age) rendered on November 6, 2007, Magnum v. Archdiocese of Philadelphia, 2007 U.S. App. LEXIS 25812 (3d Cir. Nov. 6, 2007), the Third Circuit held that the loss of a cause of action may constitute a cognizable injury to business or property within RICO only if the lost cause of action pertains to business or property rights, and is not a tort claim for injuries that are not directly cognizable under the statute. The civil RICO cause of action, 18 U.S.C. § 1964(c), is stated as follows: "Any person injured in his business or property by reason of a violation of section 1962 of this chapter [to] sue therefor in any appropriate United States district court." The plaintiffs in Magnum, sexual abuse victims of Catholic clergymen, alleged that the defendant Archdiocese ‛concealed the truth about sexual predators in its midst for so long that by the time Appellants learned of the Archdiocese's culpability, it was too late to pursue state law tort remedies.“ The Third Circuit concluded that this ‛allegation of a lost opportunity to bring state law personal injury claims against the Archdiocese is not cognizable as an injury to ‘business or property’ in a civil RICO action“ The Court distinguished its decision in Malley-Duff & Assoc. v. Crown Life Ins. Co., 792 F.2d 341 (3d Cir. 1986), as involving the loss of causes of action affecting business interests grounded in contract, not tort, and cited with approval the Tenth Circuit’s decision in Deck v. Engineered Laminates, 349 F.3d 1253 (10th Cir. 2003), which held that: "[f]raud ... that causes one to relinquish a cause of action arising out of his business is an injury to 'business or property'" under the RICO statute. Held, ‛any damages Appellants may have sustained from the lost opportunity to bring personal injury tort claims against the Archdiocese do not constitute "injury to business or property" within the meaning of 18 U.S.C. § 1964(c).“

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