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Civil RICO Claims - Part I

It’s the classic American story, someone develops a great idea, starts a business that takes off, and hires a number of employees to help with further growth and development.  Everything is running smoothly until an employee decides to steal the company’s trade secrets and use them to their advantage in a new position with a new employer.

What can that business do?

It may be surprising to some that a number of businesses are beginning to rely on the civil RICO statute to recover for a variety of business torts, including the misappropriation of trade secrets.  For those in the know, RICO stands for the Racketeer Influenced and Corrupt Organizations Act.  Though case law is still developing, successful claims can access significant damages, including treble (triple) damages and attorney fees.  So what’s the catch?  Civil RICO claims in the business context are complicated and often dismissed by the courts.

In this four-part blog, we will examine the elements of a federal RICO claim in an effort to clarify when pursuing a claim for a business tort is viable.  These elements include: (1) the conduct of an enterprise, (2) through a pattern, (3) of racketeering activity.  18 U.S.C. § 1962(c).

Even though this blog series will focus on the federal act, Washington and Oregon’s RICO statutes are both derived from the federal standard and courts in both states have looked at federal case law to interpret their respective acts.  In fact, those state’s statutes are often times referred to as “Little Rico” acts.

In our next post, we will look at what constitutes an enterprise. 

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