Volume 65, Issue 6, 1691-1716
In 2010 the Supreme Court addressed the extraterritorial application of U.S. securities law in Morrison v. National Australia Bank Ltd., and held that U.S. laws could not be applied to stocks bought and sold on foreign markets. The holding also invalidated the “conduct and effects” test that lower courts had used to assess the extraterritoriality of securities laws, and mandated that courts look to a statute’s focus to determine if Congress intended the law to apply abroad. Prior to Morrison, courts had also used the conduct and effects test to assess the extraterritorial application of the Racketeering Influenced and Corrupt Organizations Act (“RICO”). Since the Supreme Court’s ruling, lower courts have struggled to identify RICO’s focus and formulate a new test for the extraterritorial application of RICO. Three approaches have emerged: the enterprise approach, the “predicate acts” approach, and the “pattern of activity” approach.
This Note argues that the enterprise approach is the best approach. This Note discusses the history of the conduct and effects test in RICO jurisprudence, the landmark Supreme Court decision in Morrison, and the resulting lower court confusion regarding extraterritorial applications of RICO. This Note then illuminates the flaws in the predicate acts and pattern of activity approaches, and argues that the enterprise approach is the clearest, most easily applicable approach and should thus be adopted by lower courts.