Commercial Litigation and Arbitration

No Injunctive Relief Available to Private Plaintiffs under RICO

From Minter v. Wells Fargo Bank, N.A., 2009 U.S. Dist. LEXIS 6230 (D. Md. Jan. 14, 2009):

Unlike most of the issues raised by Defendants in their motion for summary judgment, whether injunctive relief is available under … civil RICO, is a purely legal question…. The only two courts of appeals to have addressed this issue directly, the Ninth Circuit, Religious Tech. Ctr. v. Wollersheim, 796 F.2d 1076 (9th Cir. 1986), and the Seventh Circuit, Nat'l Org. For Women, Inc. v. Scheidler, 267 F.3d 687 (7th Cir. 2001), rev'd on other grounds, Scheidler v. Nat'l Org. For Women, Inc., 537 U.S. 393 (2003), are split. Additionally, the other courts of appeals that address the point in dicta are also split. Compare In re Fredeman Litig., 843 F.2d 821, 828-30 (5th Cir. 1988), and Trane Co. v. O'Connor Sec., 718 F.2d 26, 28-29 (2d Cir. 1983) (expressing doubt about availability of injunctive relief for private plaintiffs), with Bennett v. Berg, 710 F.2d 1361, 1366 (8th Cir. 1983) (McMillan, J., concurring) (suggesting injunctive relief available); see also Lincoln House, Inc. v. Dupre, 903 F.2d 845, 848 (1st Cir. 1990), Northeast Women's Ctr. v. McMonagle, 868 F.2d 1342, 1355 (3d Cir. 1989) (noting controversy but expressing no opinion on resolution). The Fourth Circuit has implied, in dicta, that injunctive relief is not available to a private civil RICO plaintiff, but reserved ultimate judgment on the matter. See Johnson v. Collins Entm’t, 199 F.3d 710, 726 (4th Cir. 1999) ("'[t]here is substantial doubt whether RICO grants private parties . . . a cause of action for equitable relief.'") (quoting Dan River, Inc. v. Icahn, 701 F.2d 278, 290 (4th Cir. 1983)).

Faced with such a split, this Court finds that the Ninth Circuit provides a more well-reasoned and convincing argument. In Wollersheim, the court analyzes the language of the RICO statute, as well as its legislative history. As explained by the Wollersheim court, part (a) of the RICO statute is a broad grant of equitable jurisdiction to the federal courts, part (b) permits "the government" to bring actions for equitable relief, and part (c) provides a private plaintiff with the right to recover treble damages, costs and attorney's fees. 796 F.2d at 1082 (emphasis in original). Although part (c) does not expressly limit private plaintiffs "only" to the enumerated remedies, explains the court, its "inclusion of a single statutory reference to private plaintiffs, and the identification of a damages and fees remedy for such plaintiffs . . . logically carries the negative implication that no other remedy was intended to be conferred on private plaintiffs." Id. at 1082-83 (emphasis in original) (internal citations omitted).

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