Is there a more misused statute than RICO? Or one that more convincingly shows the weakness of the textualist position, which wads up any evidence of legislative intent and tosses it into the trash bin? RICO was clearly intended to address organized crime, but its broad and vague language has been held to reach all sorts of commercial disputes and garden variety litigations where no hit-men, shake-down schemes, or cement shoes are in sight. It’s easy to see why plaintiff lawyers love to lob RICO claims into their complaints – getting treble damages for labeling your opponent a racketeer is a good business model. We’ve said all this before, of course.
The godfather of RICO was Notre Dame Law Professor G. Robert Blakey. While in law school, Blakey authored a law review note about the inability of prosecutors to affix criminal liability to the attendees of the notorious Apalachin organized crime meeting in 1957. Later, he worked on a bill that would take care of that problem. President Nixon signed RICO into law in 1970 and, like a lot of what Nixon did, it created more problems than it solved. Another law came into play – the law of unintended consequences. The malleability of RICO didn’t merely suit plaintiff lawyers down to the ground; Blakey also seemed to enjoy the surprising scope and relevance of his baby.
When we were a young litigator we attended an all-day CLE conference in NYC on business litigation. The moderator was a sharp litigator from the Mudge Rose firm named Jed Rakoff. He is now one of the two or three smartest and scariest judges in the country. The star speaker was Blakey, who held forth on how RICO was the cure for whatever ailed any wannabe plaintiff. He probably never envisioned that RICO would result in his occupation of a Waldorf Astoria podium in front of 300 white-shoed lawyers. But there he was. The audience peppered Blakey with questions about the reach of RICO. Would X fall within RICO’s grasp? Yup. Would Y? Of course. We went up to Blakey after the talk and poured into his ear a complex fact scenario we were defending. Is that a RICO violation? Sure.
Blakey must have been ecstatic about what happened in the District of Massachusetts Neurontin litigation, where allegations of off-label promotion and other marketing malfeasances supported RICO claims and, consequently, huge settlements. RICO had been stretched up to (we would say past) its breaking point on issues such as causation, injury, and damages. It was, in our judgment, one of this country’s enormous wrong turns in drug and device litigation. D. Mass. prosecutors showed up at CLE conferences, crowing about their success and ominously hinting at more to come. But their legal theories rang hollow and the showmanship looked cheesy. Having prosecuted federal cases ourselves, we have a knee jerk reflex to assume the good faith and validity of USAO actions and policies. Not so here. It smelled like overreaching. We think history will vindicate our position. It is not as if the history of Mass. litigation is a history of getting things right. Ever heard of the Salem Witch trials? Lizzy Borden? Roberts v. Boston (which invented the separate but equal doctrine later embraced in Plessy v. Ferguson)? Sacco and Vanzetti? A Civil Action? Reckis v. Johnson & Johnson (a Mass. Supreme Court decision that we listed as the single worst drug/device decision of 2015)? Anyway, maybe even the folks in Boston are starting to rethink the use of RICO to police the marketing of medicines.