RICO — First Amendment Defense to RICO Liability and Damages Allegations

Plaintiff Michael Savage in Savage v. Council on Am.-Islamic Relations, Inc., 2008 U.S. Dist. LEXIS 60545 (N.D. Cal. July 25, 2008), a talk show host, filed a RICO suit based on the defendant’s (i) having posted on its website a four minute clip from the plaintiff’s broadcast together with extensive criticism of what the plaintiff said, and (ii) sending pre-litigation letters threatening suit, filing lawsuits and filing amicus briefs. Judge Susan Ilston found the threats of suit, suits and briefs — and the website posting and the allegedly resulting damage — protected by the First Amendment, the former by the Noerr-Pennington doctrine, and the latter by the principles of New York Times v. Sullivan:

[Threats of Suit, Lawsuits and Briefs.] [T]he Supreme Court and the Ninth Circuit have made clear that the First Amendment may be used as a shield to protect those engaged in "petitioning" in the form of civil lawsuits and pre-litigation demand letters. See DIRECTV, 437 F.3d at 939. Here, much of plaintiff's RICO claim is based on defendants' involvement in the filing of lawsuits or the threat of lawsuits.... To the extent the actions complained of involve defendants' filing of lawsuits and amicus briefs, the Court finds that defendants are entitled to Noerr-Pennington protection. The Court further finds that plaintiff's complaint makes no suggestion that these lawsuits would fall under the "sham exception" to the Noerr-Pennington doctrine because there is no suggestion that defendants did not have genuine desire to seek judicial relief. Or. Natural Resources Council v. Mohla, 944 F.2d at 531, 534-35 (9th Cir. 1991) (explaining the application of the sham exception to the filing of lawsuits). Accordingly, plaintiff's RICO claim may not be sustained on the basis of lawsuits and pre-litigation demand letters. See DIRECTV, 437 F.3d at 942 ("[W]e hold that RICO and the predicate statutes at issue here do not permit the maintenance of a lawsuit for the sending of a prelitigation demand to settle legal claims that do not amount to a sham."); Marina Point Dev., 364 F. Supp. 2d at 1149 (Defendant's "motion to dismiss the [civil RICO] action with prejudice for failure to state a claim pursuant to [Rule] 12(b)(6) is granted because she is immune from liability under the First Amendment's Noerr-Pennington doctrine.").

[Damages.] Plaintiff's claimed injury also implicates the First Amendment. The only action by defendants which plaintiff contends confers standing on him to bring his RICO claim is defendants' decision to post a four-minute audio clip of plaintiff on their website in the context of criticizing plaintiff's views. Although the Supreme Court has not extended the Noerr-Pennington doctrine to speech-related activities other than petitioning, the doctrine demonstrates that defendants may use the First Amendment as a shield to defend against claims alleging antitrust and civil RICO violations, in addition to the usual cases involving state law claims for libel, defamation, false light, invasion of privacy, and the like. See, e.g., New York Times Co. v. Sullivan, 376 U.S. 254 (1964). Indeed, Justices Souter and Kennedy have warned of the danger presented by "harassing RICO suits" and the importance of the First Amendment in preventing such harassment. Nat'l Org. for Women, Inc. v. Scheidler, 510 U.S. 249, 264 (1994) (Souter, J., concurring). Those justices stated that it is "prudent to notice that RICO actions could deter protected advocacy and to caution courts applying RICO to bear in mind the First Amendment interests that could be at stake." Id. at 265. Justices Souter and Kennedy also explained that

legitimate free-speech claims may be raised and addressed in individual RICO cases as they arise. Accordingly, it is important to stress that nothing in the Court's opinion precludes a RICO defendant from raising the First Amendment in its defense in a particular case. Conduct alleged to amount to Hobbs Act extortion, for example, or one of the other, somewhat elastic RICO predicate acts may turn out to be fully protected First Amendment activity, entitling the defendant to dismissal on that basis.

Id. at 264. Other courts have agreed that there would be "grave concerns were . . . defendants held liable under civil RICO for engaging in the expression of dissenting political opinions in a manner protected under the First Amendment." Ne. Women's Center, Inc. v. McMonagle, 868 F.2d 1342, 1348 (3d Cir. 1989) (finding that forcible entry into abortion clinic and destruction of medical equipment "establishes that the jury found that Defendants' actions went beyond mere dissent and publication of their political views").

[Website Posting.] Plaintiff's complaint appears to raise precisely the First Amendment problems in the RICO context recognized by Justices Souter and Kennedy and the Third Circuit. Even assuming the truth of plaintiff's alarming allegations that defendants are engaged in a worldwide RICO conspiracy with terrorist organizations, plaintiff's only connection to this conspiracy, for purposes of Article III standing, is the injury he allegedly received when defendants made available a portion of his radio show on their website and criticized his views, thus causing plaintiff's advertising revenue to decrease when some of his advertisers decided they could no longer support his show. Plaintiff's injury is entirely founded upon defendants' speech-related activities. It appears beyond dispute that plaintiff is a public figure and that plaintiff was discussing matters of public concern when he discussed the role of Islam in the United States and whether those of Islamic faith should be permitted to emigrate here. See Philadelphia Newspapers, Inc. v. Hepps, 475 U.S. 767, 772-75 (1986) (discussing New York Times and other First Amendment cases). Thus, for defendants' speech to amount to "injury" against plaintiff, for purposes of RICO and Article III standing, plaintiff would have to show with "convincing clarity," New York Times, 276 U.S. at 285-86, that defendants' allegedly injurious false statement or portrayal of plaintiff's own speech was done "with actual malice — that is, with knowledge that it was false or with reckless disregard of whether it was false or not," id. at 280 (internal quotation marks omitted); see also Philadelphia Newspapers, 475 U.S. at 773. This plaintiff has not even attempted to do or allege.

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