RJR Nabisco, Inc. v. European Community

RJR NABISCO, INC., et al. v. EUROPEAN

COMMUNITY et al.

certiorari to the united states court of appeals for

the second circuit No. 15–138. Argued March 21, 2016—Decided June 20, 2016 The Racketeer Influenced and Corrupt Organizations Act (RICO) prohibits certain activities of organized crime groups in relation to an enterprise. RICO makes it a crime to invest income derived from a pattern of racketeering activity in an enterprise “which is engaged in, or the activities of which affect, interstate or foreign commerce,” 18 U. S. C. § 1962(a); to acquire or maintain an interest in an enterprise through a pattern of racketeering activity, § 1962(b); to conduct an enterprise's affairs through a pattern of racketeering activity, § 1962(c); and to conspire to violate any of the other three prohibitions, § 1962(d). RICO also provides a civil cause of action for “[a]ny person injured in his business or property by reason of a violation” of those prohibitions. § 1964(c). Respondents (the European Community and 26 of its member states) filed suit under RICO, alleging that petitioners (RJR Nabisco and related entities (collectively RJR)) participated in a global money-laundering scheme in association with various organized crime groups. Under the alleged scheme, drug traffickers smuggled narcotics into Europe and sold them for euros that—through transactions involving black-market money brokers, cigarette importers, and wholesalers—were used to pay for large shipments of RJR cigarettes into Europe. The complaint alleged that RJR violated §§ 1962(a)–(d) by engaging in a pattern of racketeering activity that included numerous predicate acts of money laundering, material support to foreign terrorist organizations, mail fraud, wire fraud, and violations of the Travel Act. The District Court granted RJR's motion to dismiss on the ground that RICO does not apply to racketeering activity occurring outside U. S. territory or to foreign enterprises. The Second Circuit reinstated the claims, however, concluding that RICO applies extraterritorially to the same extent as the predicate acts of racketeering that underlie the alleged RICO violation, and that certain predicates alleged in this case expressly apply extraterritorially. In denying rehearing, the court held further that RICO's civil action does not require a domestic injury, but permits recovery for a foreign injury caused by the violation of a predicate statute that applies extraterritorially. Held: 1. The law of extraterritoriality provides guidance in determining RICO's reach to events outside the United States. The Court applies

a canon of statutory construction known as the presumption against extraterritoriality: Absent clearly expressed congressional intent to the contrary, federal laws will be construed to have only domestic application. Morrison v. National Australia Bank Ltd., 561 U. S. 247, 255. Morrison and Kiobel v. Royal Dutch Petroleum Co., 569 U. S. 108, refect a two-step framework for analyzing extraterritoriality issues. First, the Court asks whether the presumption against extraterritoriality has been rebutted—i. e., whether the statute gives a clear, affrma-tive indication that it applies extraterritorially. This question is asked regardless of whether the particular statute regulates conduct, affords relief, or merely confers jurisdiction. If, and only if, the statute is not found extraterritorial at step one, the Court moves to step two, where it examines the statute's “focus” to determine whether the case involves a domestic application of the statute. If the conduct relevant to the statute's focus occurred in the United States, then the case involves a permissible domestic application even if other conduct occurred abroad; but if the relevant conduct occurred in a foreign country, then the case involves an impermissible extraterritorial application regardless of whether other conduct occurred in U. S. territory. In the event the statute is found to have clear extraterritorial effect at step one, then the statute's scope turns on the limits Congress has or has not imposed on the statute's foreign application, and not on the statute's “focus.” Pp. 335–338.

2. The presumption against extraterritoriality has been rebutted with respect to certain applications of RICO's substantive prohibitions in § 1962. Pp. 338–345.

(a) RICO defines racketeering activity to include a number of predicates that plainly apply to at least some foreign conduct, such as the prohibition against engaging in monetary transactions in criminally derived property, § 1957(d)(2), the prohibitions against the assassination of Government officials, §§ 351(i), 1751(k), and the prohibition against hostage taking, § 1203(b). Congress has thus given a clear, affirmative indication that § 1962 applies to foreign racketeering activity—but only to the extent that the predicates alleged in a particular case themselves apply extraterritorially. This fact is determinative as to §§ 1962(b) and (c), which both prohibit the employment of a pattern of racketeering. But § 1962(a), which targets certain uses of income derived from a pattern of racketeering, arguably extends only to domestic uses of that income. Because the parties have not focused on this issue, and because its resolution does not affect this case, it is assumed that respondents have pleaded a domestic investment of racketeering income in violation of § 1962(a). It is also assumed that the extraterritoriality of a violation of RICO's conspiracy provision, § 1962(d), tracks that of the RICO provision underlying the alleged conspiracy. Pp. 338–341.

(b) RJR contends that RICO's “focus” is its enterprise element, which gives no clear indication of extraterritorial effect. But focus is considered only when it is necessary to proceed to the inquiry's second step. See Morrison, supra, at 267, n. 9. Here, however, there is a clear indication at step one that at least §§ 1962(b) and (c) apply to all transnational patterns of racketeering, subject to the stated limitation. A domestic enterprise requirement would lead to difficult line-drawing problems and counterintuitive results, such as excluding from RICO's reach foreign enterprises that operate within the United States. Such troubling consequences reinforce the conclusion that Congress intended the §§ 1962(b) and (c) prohibitions to apply extraterritorially in tandem with the underlying predicates, without regard to the locus of the enterprise. Of course, foreign enterprises will qualify only if they engage in, or significantly affect, commerce directly involving the United States. Pp. 341–344. (c) Applying these principles here, respondents' allegations that RJR violated §§ 1962(b) and (c) do not involve an impermissibly extraterritorial application of RICO. The Court assumes that the alleged pattern of racketeering activity consists entirely of predicate offenses that were either committed in the United States or committed in a foreign country in violation of a predicate statute that applies extraterritorially. The alleged enterprise also has a sufficient tie to U. S. commerce, as its members include U. S. companies and its activities depend on sales of RJR's cigarettes conducted through “the U. S. mails and wires,” among other things. Pp. 344–345. 3. Irrespective of any extraterritoriality of § 1962's substantive provisions, § 1964(c)'s private right of action does not overcome the presumption against extraterritoriality, and thus a private RICO plaintiff must allege and prove a domestic injury. Pp. 346–355. (a) The Second Circuit reasoned that the presumption against extraterritoriality did not apply to § 1964(c) independently of its application to § 1962's substantive provisions because § 1964(c) does not regulate conduct. But this view was rejected in Kiobel, 569 U. S., at 116, and the logic of that decision requires that the presumption be applied separately to RICO's cause of action even though it has been overcome with respect to RICO's substantive prohibitions. As in other contexts, allowing recovery for foreign injuries in a civil RICO action creates a danger of international friction that militates against recognizing foreign-injury claims without clear direction from Congress. Respondents, in arguing that such concerns are inapplicable here because the plaintiffs are not foreign citizens seeking to bypass their home countries' less generous remedies but are foreign countries themselves, forget that this Court's interpretation of § 1964(c)'s injury requirement will necessarily govern suits by nongovernmental plaintiffs. The Court will not

forgo the presumption against extraterritoriality to permit extraterritorial suits based on a case-by-case inquiry that turns on or looks to the affected sovereign's consent. Nor will the Court adopt a double standard that would treat suits by foreign sovereigns more favorably than other suits. Pp. 346–349.

(b) Section 1964(c) does not provide a clear indication that Congress intended to provide a private right of action for injuries suffered outside of the United States. It provides a cause of action to “[a]ny person injured in his business or property” by a violation of § 1962, but neither the word “any” nor the reference to injury to “business or property” indicates extraterritorial application. Respondents' arguments to the contrary are unpersuasive. In particular, while they are correct that RICO's private right of action was modeled after § 4 of the Clayton Act, which allows recovery for injuries suffered abroad as a result of antitrust violations, see Pfzer Inc. v. Government of India, 434 U. S. 308, 314–315, this Court has declined to transplant features of the Clayton Act's cause of action into the RICO context where doing so would be inappropriate, cf. Sedima, S. P . R. L. v. Imrex Co., 473 U. S. 479, 485, 495. There is good reason not to do so here. Most importantly, RICO lacks the very language that the Court found critical to its decision in Pfzer, namely, the Clayton Act's definition of a “person” who may sue, which “explicitly includes `corporations and associations existing under or authorized by . . . the laws of any foreign country,' ” 434 U. S., at 313. Congress's more recent decision to exclude from the antitrust laws' reach most conduct that “causes only foreign injury,” F. Hoffmann- La Roche Ltd v. Empagran S. A., 542 U. S. 155, 158, also counsels against importing into RICO those Clayton Act principles that are at odds with the Court's current extraterritoriality doctrine. Pp. 349–354. (c) Section 1964(c) requires a civil RICO plaintiff to allege and prove a domestic injury to business or property and does not allow recovery for foreign injuries. Respondents waived their domestic-injury damages claims, so the District Court dismissed them with prejudice. Their remaining RICO damages claims therefore rest entirely on injury suffered abroad and must be dismissed. P. 354. 764 F. 3d 129, reversed and remanded. Alito, J., delivered the opinion of the Court, in which Roberts, C. J ., and Kennedy and Thomas, JJ., joined, and in which Ginsburg, Breyer, and Kagan, JJ., joined as to Parts I, II, and III. Ginsburg, J., filed an opinion concurring in part, dissenting in part, and dissenting from the judgment, in which Breyer and Kagan, JJ., joined, post, p. 355. Breyer, J., filed an opinion concurring in part, dissenting in part, and

dissenting from the judgment, post, p. 363. Sotomayor, J., took no part in the consideration or decision of the case.

Gregory G. Katsas argued the cause for petitioners. With him on the briefs were Hashim M. Mooppan, Anthony J. Dick, and Emily J. Kennedy.

Elaine J. Goldenberg argued the cause for the United States as amicus curiae urging vacatur. With her on the brief were Solicitor General Verrilli, Assistant Attorney General Caldwell, Principal Deputy Assistant Attorney General Mizer , Deputy Solicitor General Dreeben, Douglas N. Letter, and Lewis S. Yelin.

David C. Frederick argued the cause for respondents. With him on the brief were Geoffrey M. Klineberg , Matthew A. Seligman, John J. Halloran, Jr., Kevin A. Malone , Carlos A. Acevedo, and John K. Weston.*

Justice Alito delivered the opinion of the Court.

The Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U. S. C. §§ 1961–1968, created four new criminal offenses involving the activities of organized criminal groups in relation to an enterprise. §§ 1962(a)–(d). RICO also created a new civil cause of action for “[a]ny person injured in his business or property by reason of a violation” of those prohibitions. § 1964(c). We are asked to decide whether RICO applies extraterritorially—that is, to events occurring and injuries suffered outside the United States.

A

RICO is founded on the concept of racketeering activity. The statute defines “racketeering activity” to encompass

RICO's § 1962 sets forth four specific prohibitions aimed at different ways in which a pattern of racketeering activity may be used to infiltrate, control, or operate “a[n] enterprise which is engaged in, or the activities of which affect, interstate or foreign commerce.” These prohibitions can be summarized as follows. Section 1962(a) makes it unlawful to invest income derived from a pattern of racketeering activity in an enterprise. Section 1962(b) makes it unlawful to acquire or maintain an interest in an enterprise through a pattern of racketeering activity. Section 1962(c) makes it unlawful for a person employed by or associated with an enterprise to conduct the enterprise's affairs through a pattern of racketeering activity. Finally, § 1962(d) makes it unlawful to conspire to violate any of the other three prohibitions.1

securities on the open market for purposes of investment, and without the intention of controlling or participating in the control of the issuer, or of assisting another to do so, shall not be unlawful under this subsection if the securities of the issuer held by the purchaser, the members of his immediate family, and his or their accomplices in any pattern or racketeering activity or the collection of an unlawful debt after such purchase do not amount in the aggregate to one percent of the outstanding securities of any one class, and do not confer, either in law or in fact, the power to elect one or more directors of the issuer.

“(b) It shall be unlawful for any person through a pattern of racketeering activity or through collection of an unlawful debt to acquire or maintain, directly or indirectly, any interest in or control of any enterprise which is engaged in, or the activities of which affect, interstate or foreign commerce. “(c) It shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt. “(d) It shall be unlawful for any person to conspire to violate any of the provisions of subsection (a), (b), or (c) of this section.” The attentive reader will notice that these prohibitions concern not only patterns of racketeering activity but also the collection of unlawful debt. As is typical in our RICO cases, we have no occasion here to address this aspect of the statute.

B

This case arises from allegations that petitioners—RJR Nabisco and numerous related entities (collectively RJR)— participated in a global money-laundering scheme in association with various organized crime groups. Respondents— the European Community and 26 of its member states—first sued RJR in the Eastern District of New York in 2000, alleg-ing that RJR had violated RICO. Over the past 16 years, the resulting litigation (spread over at least three separate actions, with this case the lone survivor) has seen multiple complaints and multiple trips up and down the federal court system. See 2011 WL 843957, *1–*2 (EDNY, Mar. 8, 2011) (tracing the procedural history through the District Court's dismissal of the present complaint). In the interest of brevity, we confine our discussion to the operative complaint and its journey to this Court.

Greatly simplified, the complaint alleges a scheme in which Colombian and Russian drug traffickers smuggled narcotics into Europe and sold the drugs for euros that—through a series of transactions involving black-market money brokers, cigarette importers, and wholesalers—were used to pay for large shipments of RJR cigarettes into Europe. In other variations of this scheme, RJR allegedly dealt directly with drug traffickers and money launderers in South America and sold cigarettes to Iraq in violation of international sanctions. RJR is also said to have acquired Brown & Williamson Tobacco Corporation for the purpose of expanding these illegal activities.

The complaint alleges that RJR engaged in a pattern of racketeering activity consisting of numerous acts of money laundering, material support to foreign terrorist organizations, mail fraud, wire fraud, and violations of the Travel Act.

to an action against any person that is criminally convicted in connection with the fraud, in which case the statute of limitations shall start to run on the date on which the conviction becomes final.”

Putting these pieces together, the complaint alleges that RJR violated each of RICO's prohibitions. RJR allegedly used income derived from the pattern of racketeering to invest in, acquire an interest in, and operate the RJR Money- Laundering Enterprise in violation of § 1962(a); acquired and maintained control of the enterprise through the pattern of racketeering in violation of § 1962(b); operated the enterprise through the pattern of racketeering in violation of § 1962(c); and conspired with other participants in the scheme in violation of § 1962(d). 3 These violations allegedly harmed respondents in various ways, including through competitive harm to their state-owned cigarette businesses, lost tax revenue from black-market cigarette sales, harm to European financial institutions, currency instability, and increased law enforcement costs.4

RJR moved to dismiss the complaint, arguing that RICO does not apply to racketeering activity occurring outside U. S. territory or to foreign enterprises. The District Court

The Second Circuit reinstated the RICO claims. It concluded that, “with respect to a number of offenses that constitute predicates for RICO liability and are alleged in this case, Congress has clearly manifested an intent that they apply extraterritorially.” 764 F. 3d 129, 133 (2014). “By in-corporating these statutes into RICO as predicate racketeering acts,” the court reasoned, “Congress has clearly communicated its intention that RICO apply to extraterritorial conduct to the extent that extraterritorial violations of these statutes serve as the basis for RICO liability.” Id., at 137. Turning to the predicates alleged in the complaint, the Second Circuit found that they passed muster. The court concluded that the money laundering and material support of terrorism statutes expressly apply extraterritorially in the circumstances alleged in the complaint. Id., at 139–140. The court held that the mail fraud, wire fraud, and Travel Act statutes do not apply extraterritorially. Id., at 141. But it concluded that the complaint states domestic violations of those predicates because it “allege[s] conduct in the United States that satisfies every essential element” of those offenses. Id., at 142.

RJR sought rehearing, arguing (among other things) that RICO's civil cause of action requires a plaintiff to allege a domestic injury, even if a domestic pattern of racketeering or a domestic enterprise is not necessary to make out a violation of RICO's substantive prohibitions. The panel denied rehearing and issued a supplemental opinion holding that RICO does not require a domestic injury. 764 F. 3d 149 (CA2 2014) (per curiam ). If a foreign injury was caused by the violation of a predicate statute that applies extraterritorially, the court concluded, then the plaintiff may seek recovery for that injury under RICO. Id., at 151. The Second Circuit later denied rehearing en banc, with five judges dissenting. 783 F. 3d 123 (2015).

The question of RICO's extraterritorial application really involves two questions. First, do RICO's substantive prohibitions, contained in § 1962, apply to conduct that occurs in foreign countries? Second, does RICO's private right of action, contained in § 1964(c), apply to injuries that are suffered in foreign countries? We consider each of these questions in turn. To guide our inquiry, we begin by reviewing the law of extraterritoriality.

It is a basic premise of our legal system that, in general, “United States law governs domestically but does not rule the world.” Microsoft Corp. v. AT&T Corp., 550 U. S. 437, 454 (2007). This principle finds expression in a canon of statutory construction known as the presumption against extraterritoriality: Absent clearly expressed congressional intent to the contrary, federal laws will be construed to have only domestic application. Morrison v. National Australia Bank Ltd., 561 U. S. 247, 255 (2010). The question is not whether we think “Congress would have wanted” a statute to apply to foreign conduct “if it had thought of the situation before the court,” but whether Congress has affirmatively and unmistakably instructed that the statute will do so. Id., at 261. “When a statute gives no clear indication of an extraterritorial application, it has none.” Id., at 255.

There are several reasons for this presumption. Most notably, it serves to avoid the international discord that can result when U. S. law is applied to conduct in foreign countries. See, e. g., Kiobel v. Royal Dutch Petroleum Co., 569

Twice in the past six years we have considered whether a federal statute applies extraterritorially. In Morrison, we addressed the question whether § 10(b) of the Securities Exchange Act of 1934 applies to misrepresentations made in connection with the purchase or sale of securities traded only on foreign exchanges. We first examined whether § 10(b) gives any clear indication of extraterritorial effect, and found that it does not. 561 U. S., at 262–265. We then engaged in a separate inquiry to determine whether the complaint before us involved a permissible domestic application of § 10(b) because it alleged that some of the relevant misrepresentations were made in the United States. At this second step, we considered the “ `focus' of congressional concern,” asking whether § 10(b)'s focus is “the place where the deception originated” or rather “purchases and sale of securities in the United States.” Id., at 266. We concluded that the statute's focus is on domestic securities transactions, and we therefore held that the statute does not apply to frauds in connection with foreign securities transactions, even if those frauds involve domestic misrepresentations.

In Kiobel, we considered whether the Alien Tort Statute (ATS) confers federal-court jurisdiction over causes of action alleging international-law violations committed overseas. We acknowledged that the presumption against extraterritoriality is “typically” applied to statutes “regulating conduct,” but we concluded that the principles supporting the pre-

Morrison and Kiobel refect a two-step framework for ana-lyzing extraterritoriality issues. At the first step, we ask whether the presumption against extraterritoriality has been rebutted—that is, whether the statute gives a clear, affirmative indication that it applies extraterritorially. We must ask this question regardless of whether the statute in question regulates conduct, affords relief, or merely confers jurisdiction. If the statute is not extraterritorial, then at the second step we determine whether the case involves a domestic application of the statute, and we do this by looking to the statute's “focus.” If the conduct relevant to the statute's focus occurred in the United States, then the case involves a permissible domestic application even if other conduct occurred abroad; but if the conduct relevant to the focus occurred in a foreign country, then the case involves an impermissible extraterritorial application regardless of any other conduct that occurred in U. S. territory.

What if we find at step one that a statute clearly does have extraterritorial effect? Neither Morrison nor Kiobel involved such a finding. But we addressed this issue in Morrison, explaining that it was necessary to consider § 10(b)'s “focus” only because we found that the statute does not apply extraterritorially: “If § 10(b) did apply abroad, we would not need to determine which transnational frauds it applied to; it would apply to all of them (barring some other limitation).” 561 U. S., at 267, n. 9. The scope of an extraterritorial statute thus turns on the limits Congress has (or

With these guiding principles in mind, we first consider whether RICO's substantive prohibitions in § 1962 may apply to foreign conduct. Unlike in Morrison and Kiobel, we find that the presumption against extraterritoriality has been rebutted—but only with respect to certain applications of the statute.

The most obvious textual clue is that RICO defines racketeering activity to include a number of predicates that plainly apply to at least some foreign conduct. These predicates include the prohibition against engaging in monetary transactions in criminally derived property, which expressly applies, when “the defendant is a United States person,” to offenses that “tak[e] place outside the United States.” 18 U. S. C. § 1957(d)(2). Other examples include the prohibitions against the assassination of Government officials, § 351(i) (“There is extraterritorial jurisdiction over the conduct prohibited by this section”); § 1751(k) (same), and the prohibition against hostage taking, which applies to conduct that “occurred outside the United States” if either the hostage or the offender is a U. S. national, if the offender is found in the United States, or if the hostage taking is done to compel action by the U. S. Government, § 1203(b). At least one predicate—the prohibition against “kill[ing] a national of the United States, while such national is outside the United States”—applies only to conduct occurring outside the United States. § 2332(a).

We emphasize the important limitation that foreign conduct must violate “a predicate statute that manifests an unmistakable congressional intent to apply extraterritorially.” 764 F. 3d, at 136. Although a number of RICO predicates have extraterritorial effect, many do not. The inclusion of some extraterritorial predicates does not mean that all RICO predicates extend to foreign conduct. This is apparent for two reasons. First, “when a statute provides for some extraterritorial application, the presumption against extraterritoriality operates to limit that provision to its terms.” Morrison, 561 U. S., at 265. Second, RICO de-fines as racketeering activity only acts that are “indictable” (or, what amounts to the same thing, “chargeable” or “punishable”) under one of the statutes identified in § 1961(1). If a particular statute does not apply extraterritorially, then conduct committed abroad is not “indictable” under that statute and so cannot qualify as a predicate under RICO's plain terms.

The presumption against extraterritoriality does not require us to adopt such a constricted interpretation. While the presumption can be overcome only by a clear indication of extraterritorial effect, an express statement of extraterritoriality is not essential. “Assuredly context can be consulted as well.” Morrison, supra, at 265. Context is dispositive here. Congress has not expressly said that § 1962(c) applies to patterns of racketeering activity in foreign countries, but it has defined “racketeering activity”—and by extension a “pattern of racketeering activity”—to encompass violations of predicate statutes that do expressly apply extraterritorially. Short of an explicit declaration, it is hard to imagine how Congress could have more clearly indicated that it intended RICO to have (some) extraterritorial effect. This unique structure makes RICO the rare statute that clearly evidences extraterritorial effect despite lacking an express statement of extraterritoriality.

We therefore conclude that RICO applies to some foreign racketeering activity. A violation of § 1962 may be based on a pattern of racketeering that includes predicate offenses committed abroad, provided that each of those offenses violates a predicate statute that is itself extraterritorial. This fact is determinative as to §§ 1962(b) and (c), both of which prohibit the employment of a pattern of racketeering. Although they differ as to the end for which the pattern is employed—to acquire or maintain control of an enterprise under subsection (b), or to conduct an enterprise's affairs

Section 1962(a) presents a thornier question. Unlike subsections (b) and (c), subsection (a) targets certain uses of income derived from a pattern of racketeering, not the use of the pattern itself. Cf. Anza v. Ideal Steel Supply Corp., 547 U. S. 451, 461–462 (2006). While we have no difficulty concluding that this prohibition applies to income derived from foreign patterns of racketeering (within the limits we have discussed), arguably § 1962(a) extends only to domestic uses of the income. The Second Circuit did not decide this question because it found that respondents have alleged “a domestic investment of racketeering proceeds in the form of RJR's merger in the United States with Brown & William-son and investments in other U. S. operations.” 764 F. 3d, at 138, n. 5. RJR does not dispute the basic soundness of the Second Circuit's reasoning, but it does contest the court's reading of the complaint. See Brief for Petitioners 57–58. Because the parties have not focused on this issue, and because it makes no difference to our resolution of this case, see infra, at 355, we assume without deciding that respondents have pleaded a domestic investment of racketeering income in violation of § 1962(a).

Finally, although respondents' complaint alleges a violation of RICO's conspiracy provision, § 1962(d), the parties' briefs do not address whether this provision should be treated differently from the provision (§ 1962(a), (b), or (c)) that a defendant allegedly conspired to violate. We therefore decline to reach this issue, and assume without deciding that § 1962(d)'s extraterritoriality tracks that of the provision underlying the alleged conspiracy.

RJR contends that, even if RICO may apply to foreign patterns of racketeering, the statute does not apply to foreign enterprises. Invoking Morrison's discussion of the Exchange Act's “focus,” RJR says that the “focus” of RICO

This argument misunderstands Morrison. As explained above, supra, at 337, only at the second step of the inquiry do we consider a statute's “focus.” Here, however, there is a clear indication at step one that RICO applies extraterritorially. We therefore do not proceed to the “focus” step. The Morrison Court's discussion of the statutory “focus” made this clear, stating that “[i]f § 10(b) did apply abroad, we would not need to determine which transnational frauds it applied to; it would apply to all of them (barring some other limitation).” 561 U. S., at 267, n. 9. The same is true here. RICO—or at least §§ 1962(b) and (c)—applies abroad, and so we do not need to determine which transnational (or wholly foreign) patterns of racketeering it applies to; it applies to all of them, regardless whether they are connected to a “foreign” or “domestic” enterprise. This rule is, of course, subject to the important limitation that RICO covers foreign predicate offenses only to the extent that the underlying predicate statutes are extraterritorial. But within those bounds, the location of the affected enterprise does not impose an independent constraint.

It is easy to see why Congress did not limit RICO to domestic enterprises. A domestic enterprise requirement would lead to difficult line-drawing problems and counterin-tuitive results. It would exclude from RICO's reach foreign enterprises—whether corporations, crime rings, other associations, or individuals—that operate within the United States. Imagine, for example, that a foreign corporation has operations in the United States and that one of the corporation's managers in the United States conducts its U. S. affairs through a pattern of extortion and mail fraud. Such domestic conduct would seem to fall well within what Congress meant to capture in enacting RICO. Congress, after all, does not usually exempt foreigners acting in the United

Seeking to avoid this result, RJR offers that any “ `emissaries' ” a foreign enterprise sends to the United States— such as our hypothetical U. S.-based corporate manager— could be carved off and considered a “distinct domestic enterprise” under an association-in-fact theory. Brief for Petitioners 40. RJR's willingness to gerrymander the enterprise to get around its proposed domestic enterprise requirement is telling. It suggests that RJR is not really concerned about whether an enterprise is foreign or domestic, but whether the relevant conduct occurred here or abroad. And if that is the concern, then it is the pattern of racketeering activity that matters, not the enterprise. Even spotting RJR its “domestic emissary” theory, this approach would lead to strange gaps in RICO's coverage. If a foreign enterprise sent only a single “emissary” to engage in racketeering in the United States, there could be no RICO liability because a single person cannot be both the RICO enterprise and the RICO defendant. Cedric Kushner Promotions, Ltd. v. King , 533 U. S. 158, 162 (2001).

RJR also offers no satisfactory way of determining whether an enterprise is foreign or domestic. Like the District Court, RJR maintains that courts can apply the “nerve center” test that we use to determine a corporation's principal place of business for purposes of federal diversity jurisdiction. See Hertz Corp. v. Friend, 559 U. S. 77 (2010); 28 U. S. C. § 1332(c)(1); 2011 WL 843957, *5–*6. But this test quickly becomes meaningless if, as RJR suggests, a corporation with a foreign nerve center can, if necessary, be pruned into an association-in-fact enterprise with a domestic nerve

The practical problems we have identified with RJR's proposed domestic enterprise requirement are not, by themselves, cause to reject it. Our point in reciting these troubling consequences of RJR's theory is simply to reinforce our conclusion, based on RICO's text and context, that Congress intended the prohibitions in 18 U. S. C. §§ 1962(b) and (c) to apply extraterritorially in tandem with the underlying predicates, without regard to the locus of the enterprise.

Although we find that RICO imposes no domestic enterprise requirement, this does not mean that every foreign enterprise will qualify. Each of RICO's substantive prohibitions requires proof of an enterprise that is “engaged in, or the activities of which affect, interstate or foreign commerce.” §§ 1962(a), (b), (c). We do not take this reference to “foreign commerce” to mean literally all commerce occurring abroad. Rather, a RICO enterprise must engage in, or affect in some significant way, commerce directly involving the United States—e. g., commerce between the United States and a foreign country. Enterprises whose activities lack that anchor to U. S. commerce cannot sustain a RICO violation.

C

Applying these principles, we agree with the Second Circuit that the complaint does not allege impermissibly extraterritorial violations of §§ 1962(b) and (c). 7

RJR does not dispute these characterizations of the alleged predicates. We therefore assume without deciding that the alleged pattern of racketeering activity consists entirely of predicate offenses that were either committed in the United States or committed in a foreign country in violation of a predicate statute that applies extraterritorially. The alleged enterprise also has a sufficient tie to U. S. commerce, as its members include U. S. companies, and its activities depend on sales of RJR's cigarettes conducted through “the U. S. mails and wires,” among other things. App. to Pet. for Cert. 186a, Complaint ¶96. On these premises, respondents' allegations that RJR violated §§ 1962(b) and (c) do not involve an impermissibly extraterritorial application of RICO.8

The Second Circuit thought that the presumption against extraterritoriality did not apply to § 1964(c) independently of its application to § 1962, reasoning that the presumption “is primarily concerned with the question of what conduct falls within a statute's purview.” 764 F. 3d, at 151. We rejected that view in Kiobel, holding that the presumption “constrain[s] courts considering causes of action” under the ATS, a “ `strictly jurisdictional' ” statute that “does not directly regulate conduct or afford relief.” 569 U. S., at 116. We reached this conclusion even though the underlying substantive law consisted of well-established norms of international law, which by definition apply beyond this country's borders. See id., at 116–118.

The same logic requires that we separately apply the presumption against extraterritoriality to RICO's cause of action despite our conclusion that the presumption has been overcome with respect to RICO's substantive prohibitions. “The creation of a private right of action raises issues beyond the mere consideration whether underlying primary conduct should be allowed or not, entailing, for example, a decision to permit enforcement without the check imposed by prose-cutorial discretion.” Sosa v. Alvarez-Machain, 542 U. S. 692, 727 (2004). Thus, as we have observed in other contexts, providing a private civil remedy for foreign conduct

Consider antitrust. In that context, we have observed that “[t]he application . . . of American private treble-damages remedies to anticompetitive conduct taking place abroad has generated considerable controversy” in other nations, even when those nations agree with U. S. substantive law on such things as banning price fixing. F. Hoffmann- La Roche Ltd v. Empagran S. A., 542 U. S. 155, 167 (2004). Numerous foreign countries—including some respondents in this case—advised us in Empagran that “to apply [U. S.] remedies would unjustifiably permit their citizens to bypass their own less generous remedial schemes, thereby upsetting a balance of competing considerations that their own domes-

9

tic antitrust laws embody.” Ibid.

Allowing recovery for foreign injuries in a civil RICO action, including treble damages, presents the same danger of international friction. See Brief for United States as Ami-cus Curiae 31–34. This is not to say that friction would necessarily result in every case, or that Congress would violate international law by permitting such suits. It is to say only that there is a potential for international controversy that militates against recognizing foreign-injury claims without clear direction from Congress. Although “a risk of con-fict between the American statute and a foreign law” is not a prerequisite for applying the presumption against extraterritoriality, Morrison, 561 U. S., at 255, where such a risk is evident, the need to enforce the presumption is at its apex.

national policy decision by Canada that civil recovery by Canadian citizens for injuries resulting from anti-competitive behavior in Canada should be limited to actual damages”). Empagran concerned not the presumption against extraterritoriality per se , but the related rule that we construe statutes to avoid unreasonable interference with other nations' sovereign authority where possible. See F. Hoffmann-La Roche Ltd v. Empagran S. A., 542 U. S. 155, 164 (2004); see also Hartford Fire Ins. Co. v. California, 509 U. S. 764, 814–815 (1993) (Scalia, J., dissenting) (discussing the two canons). As the foregoing discussion makes clear, considerations relevant to one rule are often relevant to the other.

Nothing in § 1964(c) provides a clear indication that Congress intended to create a private right of action for injuries suffered outside of the United States. The statute provides a cause of action to “[a]ny person injured in his business or property” by a violation of § 1962. § 1964(c). The word “any” ordinarily connotes breadth, but it is insufficient to

The Second Circuit did not identify anything in § 1964(c) that shows that the statute reaches foreign injuries. Instead, the court reasoned that § 1964(c)'s extraterritorial effect flows directly from that of § 1962. Citing our holding in Sedima, S. P . R. L. v. Imrex Co., 473 U. S. 479 (1985), that the “compensable injury” addressed by § 1964(c) “necessarily is the harm caused by predicate acts sufficiently related to constitute a pattern,” id., at 497, the Court of Appeals held that a RICO plaintiff may sue for foreign injury that was caused by the violation of a predicate statute that applies extraterritorially, just as a substantive RICO violation may be based on extraterritorial predicates. 764 F. 3d, at 151. Justice Ginsburg advances the same theory. See post, at 358–359 (opinion concurring in part, dissenting in part, and dissenting from judgment). This reasoning has surface appeal, but it flails to appreciate that the presumption against extraterritoriality must be applied separately to both RICO's substantive prohibitions and its private right of action. See supra, at 346–349 and this page. It is not enough to say that a private right of action must reach abroad because the underlying law governs conduct in foreign countries. Something more is needed, and here it is absent. 10

Respondents and Justice Ginsburg point out that RICO's private right of action was modeled after § 4 of the Clayton Act, 15 U. S. C. § 15; see Holmes v. Securities Investor Protection Corporation, 503 U. S. 258, 267–268 (1992), which we have held allows recovery for injuries suffered abroad as a result of antitrust violations, see Pfzer Inc. v.

correctly do not contend that this fact is controlling here, as the Sedima Court did not address the foreign-injury issue.

There is good reason not to interpret § 1964(c) to cover foreign injuries just because the Clayton Act does so. When we held in Pfzer that the Clayton Act allows recovery for foreign injuries, we relied first and foremost on the fact that the Clayton Act's definition of “person”—which in turn de-fines who may sue under that Act—“explicitly includes `corporations and associations existing under or authorized by . . . the laws of any foreign country.' ” 434 U. S., at 313; see 15 U. S. C. § 12.11 RICO lacks the language that the Pfzer

Underscoring our reluctance to read § 1964(c) as broadly as we have read the Clayton Act is Congress's more recent

Section 1964(c) requires a civil RICO plaintiff to allege and prove a domestic injury to business or property and does not allow recovery for foreign injuries. The application of this rule in any given case will not always be self-evident, as disputes may arise as to whether a particular alleged injury is “foreign” or “domestic.” But we need not concern ourselves with that question in this case. As this case was being briefed before this Court, respondents filed a stipulation in the District Court waiving their damages claims for domestic injuries. The District Court accepted this waiver and dismissed those claims with prejudice. Respondents' remaining RICO damages claims therefore rest entirely on injury suffered abroad and must be dismissed.13

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The judgment of the United States Court of Appeals for the Second Circuit is reversed, and the case is remanded for further proceedings consistent with this opinion.

So ordered.

Justice Sotomayor took no part in the consideration or decision of this case.

Justice Ginsburg , with whom Justice Breyer and Justice Kagan join, concurring in Parts I, II, and III, and dissenting from Part IV and from the judgment.

In enacting the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U. S. C. § 1961 et seq., Congress sought to provide a new tool to combat “organized crime and its economic roots.” Russello v. United States, 464 U. S. 16, 26 (1983). RICO accordingly proscribes various ways in which an “enterprise,” § 1961(4), might be controlled, operated, or funded by a “pattern of racketeering activity,” § 1961(1), (5). See § 1962. 1 RICO builds on predicate statutes, many of them applicable extraterritorially. App. to

on the issue today. We note, however, that any claim for equitable relief under RICO based on foreign injuries is necessarily foreclosed by our holding that § 1964(c)'s cause of action requires a domestic injury to business or property. It is unclear whether respondents intend to seek equitable relief under RICO based on domestic injuries, and it may prove unnecessary to decide whether § 1964(c) (or respondents' stipulation) permits such relief in light of respondents' state-law claims. We leave it to the lower courts to determine, if necessary, the status and availability of any such claims. 1 The Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U. S. C. § 1961 et seq., makes it unlawful “to . . . invest” in an enterprise income derived from a pattern of racketeering activity, § 1962(a), “to acquire or maintain” an interest in an enterprise through a pattern of racketeering activity, § 1962(b), “to conduct or participate . . . in the conduct” of an enterprise through a pattern of racketeering activity, § 1962(c), or “to conspire” to violate any of those provisions, § 1962(d).

Invoking this right, respondents, the European Community and 26 member states, filed suit against petitioners, RJR Nabisco, Inc., and related entities. Alleging that petitioners orchestrated from their U. S. headquarters a complex money-laundering scheme in violation of RICO, respondents sought to recover for various injuries, including losses sustained by financial institutions and lost opportunities to collect duties. See ante, at 332–335. Denying respondents a remedy under RICO, the Court today reads into § 1964(c) a domestic-injury requirement for suits by private plaintiffs nowhere indicated in the statute's text. Correctly, the Court imposes no such restriction on the United States when it initiates a civil suit under § 1964(b). Unsupported by RICO's text, inconsistent with its purposes, and unnecessary to protect the comity interests the Court emphasizes, the domestic-injury requirement for private suits replaces Congress' prescription with one of the Court's own invention. Because the Court has no authority so to amend RICO, I dissent.

As the Court recounts, ante, at 335, “Congress ordinarily legislates with respect to domestic, not foreign, matters.” Morrison v. National Australia Bank Ltd., 561 U. S. 247, 255 (2010). So recognizing, the Court employs a presumption that “ `legislation . . . is meant to apply only within the territorial jurisdiction of the United States.' ” Ibid. (quoting EEOC v. Arabian American Oil Co., 499 U. S. 244, 248 (1991) ( Aramco)). But when a statute demonstrates Congress' “affirmative inten[t]” that the law should apply beyond

In this case, the Court properly holds that Congress signaled its “affirmative inten[t],” Morrison, 561 U. S., at 255, that RICO, in many instances, should apply extraterritorially. See ante, at 338–345; App. to Brief for United States as Amicus Curiae 27a–33a. As the Court relates, see ante, at 338–341, Congress deliberately included within RICO's compass predicate federal offenses that manifestly reach conduct occurring abroad. See, e. g., §§ 1956–1957 (money laundering); § 2339B (material support to foreign terrorist organizations). Accordingly, the Court concludes, when the predicate crimes underlying invocation of § 1962 thrust extraterritorially, so too does § 1962. I agree with that conclusion.

I disagree, however, that the private right of action authorized by § 1964(c) requires a domestic injury to a person's business or property and does not allow recovery for foreign injuries. One cannot extract such a limitation from the text of § 1964(c), which affords a right of action to “[a]ny person injured in his business or property by reason of a violation of section 1962.” Section 1962, at least subsections (b) and (c), all agree, encompasses foreign injuries. How can § 1964(c) exclude them when, by its express terms, § 1964(c) is triggered by “a violation of section 1962”? To the extent RICO reaches injury abroad when the Government is the suitor pursuant to § 1962 (specifying prohibited activities) and § 1963 (criminal penalties) or § 1964(b) (civil remedies), to that same extent, I would hold, RICO reaches extraterri-

I would not distinguish, as the Court does, between the extraterritorial compass of a private right of action and that of the underlying proscribed conduct. See ante, at 346–349, 350, 353. Instead, I would adhere to precedent addressing RICO, linking, not separating, prohibited activities and authorized remedies. See Sedima, S. P . R. L. v. Imrex Co., 473 U. S. 479, 495 (1985) (“If the defendant engages in a pattern of racketeering activity in a manner forbidden by [§ 1962], and the racketeering activities injure the plaintiff in his business or property, the plaintiff has a claim under § 1964(c).”); ibid. (refusing to require a “distinct `racketeering injury' ” for private RICO actions under § 1964(c) where § 1962 imposes no such requirement). 2

To reiterate, a § 1964(c) right of action may be maintained by “[a]ny person injured in his business or property by reason of a violation of section 1962.” (Emphasis added.) “[I]ncorporating one statute . . . into another,” the Court has long understood, “serves to bring into the latter all that is fairly covered by the reference.” Panama R. Co. v. John-son, 264 U. S. 375, 392 (1924). RICO's private right of action, it cannot be gainsaid, expressly incorporates § 1962,

What § 1964(c)'s text conveys is confirmed by its history. As this Court has repeatedly observed, Congress modeled § 1964(c) on § 4 of the Clayton Act, 15 U. S. C. § 15, the private civil-action provision of the federal antitrust laws, which employs nearly identical language: “[A]ny person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefor.” See Klehr v. A. O. Smith Corp., 521 U. S. 179, 189–190 (1997); Holmes v. Securities Investor Protection Corporation, 503 U. S. 258, 267–268 (1992); Sedima, 473 U. S., at 485, 489. Clayton Act § 4, the Court has held, provides a remedy for injuries both foreign and domestic. Pfzer Inc. v. Government of India, 434 U. S. 308, 313–314 (1978) (“Congress did not intend to make the [Clayton Act's] treble-damages remedy available only to consumers in our own country.”); Continental Ore Co. v. Union Carbide & Carbon Corp., 370 U. S. 690, 707–708 (1962) (allowing recovery in Clayton Act § 4 suit for injuries in Canada).

“The similarity of language in [the two statutes] is, of course, a strong indication that [they] should be interpreted pari passu,” Northcross v. Board of Ed. of Memphis City

This very case illustrates why pinning a domestic-injury requirement onto § 1964(c) makes little sense. All defendants are U. S. corporations, headquartered in the United States, charged with a pattern of racketeering activity directed and managed from the United States, involving con-

The Court nevertheless deems a domestic-injury requirement for private RICO plaintiffs necessary to avoid international friction. See ante, at 347–350. When the United States considers whether to initiate a prosecution or civil suit, the Court observes, it will take foreign-policy considerations into account, but private parties will not. It is far from clear, however, that the Court's blanket rule would ordinarily work to ward off international discord. Invoking the presumption against extraterritoriality as a bar to any private suit for injuries to business or property abroad, this case suggests, might spark, rather than quell, international strife. Making such litigation available to domestic but not foreign plaintiffs is hardly solicitous of international comity or respectful of foreign interests. Cf. Pfzer, 434 U. S., at 318–319 (“[A] foreign nation is generally entitled to prosecute any civil claim in the courts of the United States upon the same basis as a domestic corporation or individual might do. To deny him this privilege would manifest a want of comity and friendly feeling.” (internal quotation marks omitted)).

RICO's definitional provisions exclude “[e]ntirely foreign activity.” 783 F. 3d 123, 143 (Lynch, J., dissenting from de-

To the extent extraterritorial application of RICO could give rise to comity concerns not present in this case, those concerns can be met through doctrines that serve to block litigation in U. S. courts of cases more appropriately brought elsewhere. Where an alternative, more appropriate forum is available, the doctrine of forum non conveniens enables U. S. courts to refuse jurisdiction. See Piper Aircraft Co. v. Reyno , 454 U. S. 235 (1981) (dismissing wrongful-death action arising out of air crash in Scotland involving only Scottish victims); Restatement (Second) of Conflict of Laws § 84 (1969). Due process constraints on the exercise of general personal jurisdiction shelter foreign corporations from suit in the United States based on conduct abroad unless the corporation's “affiliations with the [forum] in which suit is brought are so constant and pervasive `as to render it essentially at home [there].' ” Daimler AG v. Bauman, 571 U. S. 117, 122 (2014) (quoting Goodyear Dunlop Tires Operations, S. A. v. Brown, 564 U. S. 915, 919 (2011); alterations omitted). These controls provide a check against civil RICO litigation with little or no connection to the United States.

* * *

The Court hems in RICO out of concern about establishing a “double standard.” Ante, at 349. But today's decision does exactly that. U. S. defendants commercially engaged here and abroad would be answerable civilly to U. S. victims of their criminal activities, but foreign parties similarly injured would have no RICO remedy. “ `Sauce for the goose' ” should indeed serve the gander as well. See ibid. (quoting

“To establish a compensable injury under § 1964(c), a private plaintiff must show that (1) the defendant `engage[d] in a pattern of racketeering activity in a manner forbidden by' § 1962, and (2) that these `racketeering activities' were the proximate cause of some injury to the plaintiff's business or property.” 764 F. 3d, at 151 (quoting Sedima, 473 U. S., at 495; Holmes, 503 U. S., at 268).

Because the Court overturns that judgment, I dissent from Part IV of the Court's opinion and from the judgment.

Justice Breyer , concurring in part, dissenting in part, and dissenting from the judgment.

I join Parts I through III of the Court's opinion. But I do not join Part IV . The Court there holds that the private right of action provision in the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U. S. C. § 1964(c), has no extraterritorial application. Like Justice Ginsburg , I believe that it does.

In saying this, I note that this case does not involve the kind of purely foreign facts that create what we have sometimes called “foreign-cubed” litigation (i. e., cases where the plaintiffs are foreign, the defendants are foreign, and all the relevant conduct occurred abroad). See, e. g., Morrison v. National Australia Bank Ltd., 561 U. S. 247, 283, n. 11 (2010) (Stevens, J., concurring in judgment). Rather, it has been argued that the statute at issue does not extend to such a case. See 18 U. S. C. § 1961(1) (limiting qualifying RICO predicates to those that are, e. g., “chargeable” under state law, or “indictable” or “punishable” under federal law); Tr. of Oral Arg. 32, 33–34 (respondents conceding that all of the

Unlike the Court, I cannot accept as controlling the Government's argument as amicus curiae that “[a]llowing recovery for foreign injuries in a civil RICO action . . . presents the . . . danger of international friction.” Ante, at 348. The Government does not provide examples, nor apparently has it consulted with foreign governments on the matter. See Tr. of Oral Arg. 26 (“[T]o my knowledge, [the Government] didn't have those consultations” with foreign states concerning this case). By way of contrast, the European Community and 26 of its member states tell us “that the complaint in this case, which alleges that American corporations engaged in a pattern of predominantly domestic racketeering activity that caused injury to respondents' businesses and property, comports with limitations on prescriptive jurisdiction under international law and respects the dignity of foreign sovereigns.” Brief for Respondents 52–53; see also Tr. of Oral Arg. 31 (calling the European Union's “vett[ing] exercise” concerning this case “comprehensiv[e]”). In these circumstances, and for the reasons given by Justice Gins-burg , see ante, at 361–362, I would not place controlling weight on the Government's contrary view.

Consequently, I join Justice Ginsburg 's opinion.