As I showed last time, the structural complexity and expansive language of the RICO statute, when coupled with the different (and often competing) policy aims behind criminal law enforcement and civil litigation, have forced courts to interpret the statute in ways that would make it effective, yet bounded. RICO thus presents two very different faces. Government prosecutions, on the one hand, look very much like what one would expect from an anti-racketeering, anti-Mafia statute: Typical indictments target drug distribution rings, interstate bank-robbery gangs, or the organized infiltration of a union or pension fund. Private RICO litigation, on the other hand, rarely turns on the sort of mobster activity that animated the OCCA (e.g., the organizations and crimes memorialized in films like “The Godfather” and “Goodfellas”): Typical complaints turn on allegations of fraud in insurance, franchise, or other commercial transactions. But there is at least one thing that courts, commentators, and RICO practitioners (both civil and criminal) can agree on: The concept of “enterprise” is the sine qua non of any RICO claim and the characteristic that distinguishes a RICO claim from an ordinary tort or criminal claim. Consequently, a failure sufficiently to allege an enterprise disables a claim under any substantive RICO theory.
But not only is the “enterprise” concept, which—via a specific definition— “includes any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity,” important to RICO jurisprudence, it has become paramount as other theories about RICO’s interpretation and application have advanced and then fallen away. Early on, in the criminal context, defendants had some luck in arguing that RICO “was intended to protect legitimate business enterprises from being preyed upon and taken over by racketeers.” Under this reading of the statute, RICO’s purpose is to criminalize the infiltration and corruption of legitimate businesses, so, for instance, operating a wholly criminal enterprise is not within RICO’s ambit. The Supreme Court disagreed, holding that “[t]here is no restriction upon the associations embraced by the definition: an enterprise includes any union or group of individuals associated in fact.” But, as Lawrence Solan astutely observes, “it is wrong to say that ‘enterprise’ could not be understood to include only legitimate businesses. Generally speaking, that is how the word is used, and the statute’s definition is not really very helpful.”
