Supreme Court of the United States

“ The parties advance competing approaches to the domestic injury inquiry. Petitioners urge the Court to adopt a bright-line rule, akin to the Seventh Circuit’s, that locates a plaintiff’s injury at the plaintiff’s residence. Petitioners advance two different versions of this rule.
As their primary position, petitioners argue that any injury cognizable under §1964 (c) is necessarily suffered at the plaintiff’s residence because “the private cause of action remedies only economic injuries, and a plaintiff necessarily suffers that injury at its residence” where the economic injury is felt. ”

“ Even with respect to the two factors it focuses on, the Court engenders confusion. It offers no hint which of the two might be more important (should they point in different directions) , whether either or both are necessary, or whether either is sufficient. And the Court acknowledges that there was also substantial foreign conduct in these cases, but writes that off because it was “ ‘initiated in and directed towards’ ” the United States. Ante, at 10. Once more, I am unsure of the origin or scope of this rule. If domestic conduct is “initiated in” a foreign nation, does that make it foreign? ”

“ Further, the injurious effects of the racketeering activity largely manifested in California. Smagin obtained a judgment in California because that is where Yegiazaryan lives, and where Smagin had thus hoped to collect. The rights that the California judgment provides to Smagin exist only in California, including the right to obtain postjudgment discovery, the right to seize assets in California, and the right to seek other appropriate relief from the California District Court. ”

“ Humphrey, 905 F. 3d, at 709, a look beneath the surface quickly reveals that the test is inconsistent with RJR Nabisco, the presumption against extraterritoriality, and the thrust of §1964 (c) itself. Concerns about a fact-intensive test cannot displace congressional policy choices, where a more nuanced test is true to the statute’s meaning. *⁠*⁠* A plaintiff has alleged a domestic injury for purposes of §1964 (c) when the circumstances surrounding the injury indicate it arose in the United States. ”

“ But in today’s decision, the Court countenances that the plaintiff’s residence may play no role at all in the civil RICO extraterritoriality inquiry. The Court justifies this result with the assertion that favoring U. S. plaintiffs’ access to American courts over that of foreign plaintiffs “runs its own risks of generating international discord,” ante, at 13, a concern that the Court directly rejected in RJR Nabisco, see 579 U. S., at 361 (Ginsburg, J., dissenting in relevant part) . ”

“ It makes the location of the plaintiff’s residence determinative, thus barring all foreign plaintiffs, exactly as RJR Nabisco said it was not doing.
A contextual approach to the domestic-injury requirement also better reflects the requirement’s origin in step two of the extraterritoriality framework, which assesses whether there is a domestic application of a statute by looking to the statute’s focus. RJR Nabisco implied that the focus of §1964 (c) is injuries in “business or property by reason of a violation of [RICO’s substantive provisions] .” ”

“ Zooming out, the circumstances surrounding Smagin’s injury make clear it arose in the United States.
Smagin alleges that he “has been injured in his inability to collect [his] massive judgment.” App. 38a. Much of the alleged racketeering activity that caused the injury occurred in the United States. Yegiazaryan took domestic actions to avoid collection, including allegedly creating U. S. shell companies to hide his U. S. assets, submitting a forged doctor’s note to a California District Court, and intimidating a U. S.-based witness. ”

“ In these cases, however, the relationship between the California judgment Smagin has obtained and the underlying arbitral award that that judgment confirmed is uncertain, so the precise property at issue is another aspect of this suit that is shrouded in confusion. ”

“ It holds only that ascertaining the site of intangible injuries for purposes of civil RICO requires a court to consult a variety of factors and that two factors it identifies show that respondent has suffered a domestic injury. ”

“ Accordingly, in reference to step two, the Court held that “ [a] private RICO plaintiff ... must allege and prove a domestic injury to its business or property.” Id., at 346.
In announcing this “domestic-injury” requirement, the Court did not have occasion to explain what constitutes a “domestic-injury,” because the plaintiffs in RJR Nabisco had stipulated that they were not seeking redress for domestic injuries. Id., at 354. The question now before the Court is whether Smagin has alleged a domestic injury. ”

“ Because of the contextual nature of the inquiry, no set of factors can capture the relevant considerations for all cases. RICO covers a wide range of predicate acts and is notoriously “expansive” in scope. ”