Friday, September 05, 2008

Municipalities may sue under RICO

Smoke 'em if you got 'em because in City of New York v., Inc., the 2d Circuit held that NYC could sue a cigarette retailer under RICO for helping customers avoid paying taxes. The court rejected dicta from Town of West Hartford v. Operation Rescue, 915 F.2d 92, 103-04 (2d Cir. 1990), which suggested that a municipality had to suffer injury to its "business or property" through a commercial transaction in order to have standing under RICO. Not so says the Smokes-Spirits court, which held that lost taxes constitutes for RICO purposes.

Municipalities should take a second look at potential RICO defendants.


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