Civil RICO is a powerful tool which provides the plaintiff, if successful, with treble (triple) damages and reasonable attorney fees if there is “injury to business or property.” See 18 U.S.C. § 1964(c). However, as a skilled Rockville MD civil RICO attorney will plaintiff must have suffered injuries “to business or property” that were proximately and directly caused by the defendants’ alleged RICO conduct.
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Courts have interpreted “injury to business or property” broadly, to include (1) direct financial loss; (2) loss of profits and future damages; (3) misuse of intellectual property; (4) legal costs; and (5) deprivation of intangible property interests, such as the right to conduct business free of extortion or other threats. All of these damages must be directly attributable to defendant’s wrongful conduct.
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With regard to loss of profits, courts generally look to whether the lost profit and future damages can be calculated. Courts do not find “business or property” to include “reputation” harm, but have found that interference with business relations is sufficient to allege injury to a business or property interest. Moreover, intangible property rights can be sought if calculable, usually by showing the loss to the business because of the deprivation of the right. Personal injuries, such as injuries to the person physically, are not allowed because they are not considered “business or property.”
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Legal fees may constitute RICO damages when they are proximately caused by a RICO violation as a direct result of defendants’ racketeering activities.
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Another hotly-disputed area is whether section 1964(c) allows for equitable relief, such as disgorgement and rescission. The courts are split on this issue with some districts, such as those in the Second Circuit allowing such relief, while others, such as those in the Ninth Circuit which do not allow such relief.
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Also, courts are split on whether injunctions to protect future damages can be allowed, and also certain circuits have not allowed punitive damages (because treble damages already exist).
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So, finding what is “injury” in civil RICO is not always immediately apparent, and will vary by court. Courts take a careful look at this criterion and do not provide the plaintiff with standing to bring the civil RICO case unless the plaintiff can show there was injury to business or property, proximately caused by the defendant.
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Thanks to our friend and contributor from the Law Office of David J. Stander LLC for their insight into civil RICO damages and injury.