Anti-Racketeering Civil Suits Jump in 2018

The latest available data from the federal courts show that civil filings under the Racketeer Influenced and Corrupt Organizations Act (RICO) jumped significantly during FY 2018. As of the end of fiscal year 2018, the government reported a total of 1,405 civil lawsuits filed in federal courts under RICO. In fiscal year 2017, just 693 suits were filed.

FY 2018 also saw substantially more of these types of suits compared with any previous year over the past decade. See Figure 1.

Figure 1. Racketeer Influenced and Corrupt Organizations Act
Civil Filings by Fiscal Year 2008 -2018

Passed in 1970, RICO is a federal law designed to combat organized crime in the United States, as well as provides civil remedies to private parties claiming to be victims of "racketeering activity." Racketeering activity under the criminal statute typically means acts involving murder, gambling, robbery, bribery, extortion or dealing in a controlled substance. However, the statute's definition of racketeering activities, and how people may apply the statute, go far beyond the listed examples above[1].

In FY 2018, as commentators have noted, some of the rise in civil suits under RICO has been driven by increased use of the statute by consumers alleging corporate fraud[2]. Although better known by its criminal provisions, the civil component of RICO is playing an increasing role in RICO's legal application in federal courts. Over the past decade, the number of civil filings brought under RICO on average have been three times the number of prosecutions under RICO's criminal provisions according to TRAC's analyses of internal case-by-case Justice Department records tracking criminal prosecutions. In FY 2018, for example, a total of 213 criminal defendants were prosecuted under RICO, as compared to the 1,405 civil suits filed.

The increase in litigation during this past year resulted from civil disputes with a variety of corporations, from Purdue Pharma L.P. to Facebook. Litigation was brought not only by private parties, but by a significant number of local government bodies.

Although FY 2018 holds the record in the past ten years for highest annual number of civil suits filed under RICO, a large number of suits filed in the Southern District of Florida seeking to recover damages from two Canadian businessmen who set up a real estate scam in the Dominican Republic drove up counts during FY 2010 to the second highest total during the last decade[3].

The top ten districts with the most filings last year are shown in Figure 2. Massachusetts led the pack with 115 civil suits filed under RICO. In Massachusetts, 80 towns and cities sued several major drug companies under RICO, including AmerisourceBergen Drug Corporation, Purdue Pharma L.P., and Janssen Pharmaceuticals Inc., among others, seeking damages over the opioid crisis[4].

Figure 2. Top Ten Judicial Districts for FY 2018

While the Massachusetts civil suits against drug companies certainly contributed to the increase nationally in RICO civil filings, they were not the only factor. Review of cases filed in other judicial districts reveal a variety of applications for RICO, not just suing drug companies over the opioid crisis. However, in Massachusetts, the numbers can certainly be attributed to anger over the opioid crisis, and use of RICO to seek damages from pharmaceutical companies.

Footnotes

Each month, TRAC offers a free report focused on one area of civil litigation in the U.S. district courts. In addition, subscribers to the TRACFed data service can generate custom reports by district, office, nature of suit or federal jurisdiction via the TRAC Data Interpreter.