Yegiazaryan v. Smagin & CMB Monaco v. Smagin, consolidated

SCOTUS Audio

In RJR Nabisco, this Court, applying the presumption against extraterritoriality, held that a civil RICO plaintiff states a cognizable claim under RICO's private right of action only if it alleges a "domestic"-not foreign-injury. 579 U.S. 325, 354 (2016). The Court left unresolved, however, what legal test determines whether an injury is foreign or domestic. Id. ("[D]isputes may arise as to whether a particular alleged in- jury is 'foreign' or 'domestic.' But we need not concern ourselves with that question in this case."). Since RJR Nabisco, the Courts of Appeals have divided three ways as to the proper legal test for assessing whether a foreign plaintiff suffers a "domestic" injury to intangible property-such as court judgments, arbitration awards, contract rights, patents, and business reputation or goodwill. The question presented is: Does a foreign plaintiff state a cognizable civil RICO claim when it suffers an injury to intangible property, and if so, under what circumstances. In RJR Nabisco, Inc. v. European Community, 579 U.S. 325 (2016), this Court held that a plaintiff proceeding under the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961 et seq., must plead and prove a "domestic" injury to maintain a claim in U.S. court. Following RJR Nabisco, the courts of appeals have split on the issue of where a foreign plaintiff suffers its injury to its intangible property for purposes of the domestic-injury inquiry. On one hand, the Seventh Circuit correctly holds that the foreign plaintiff suffers its injury abroad. On the other, the court below and Third Circuit have adopted an open-ended balancing test to determine the location of the plaintiff’s injury. Incorrectly applying that standardless test in reference to defendants' conduct, the Ninth Circuit held below that the plaintiff had suffered a domestic injury, even though he is a foreign resident with no alleged connection to the U.S. The question presented therefore is: Whether a foreign plaintiff with no alleged connection to the United States may nevertheless allege a "domestic" injury under RJR Nabisco sufficient to maintain a RICO action based only on injury to intangible property.