Respondent Vitaly Smagin has recently submitted its answering brief in response to Petitioners Ashot Yegiazaryan and CMB Monaco, formerly known as Compagnie Monégasque de Banque's appeal of a Ninth Circuit decision.
The heart of the issue in this appeal is what is an actionable injury under the Racketeer Influenced and Corrupt Organizations Act ("RICO"). In 2016, RJR Nabisco, Inc. v. European Community has clarified the limited application of RICO claims to situations involving a "domestic injury."
The Respondent in Yegiazaryan alleges that Petitioners violated RICO by interfering with his attempts to collect on an arbitration award rendered in London, concerning a Russian real-estate transaction between Russian individuals because the foreign arbitration award was unpaid and a U.S. court recognized that arbitration award and entered judgment against one of the petitioners/alleged members of the RICO scheme. The district court dismissed the case for lack of a domestic injury, but the Ninth Circuit held that his injuries were domestic. This led to a circuit split.
Petitioners argued that the Supreme Court should reverse the Ninth Circuit's decision. According to Petitioners, "RICO’s text and structure, as well as relevant decisions of this Court, all establish that the private cause of action remedies only economic injuries, and a plaintiff necessarily suffers that injury at its residence." (emphasis added). Petitioners further argue that "even if RICO permits consideration of whether there has been injury to property held by the plaintiff, a foreign domiciled plaintiff cannot make out the requisite 'domestic injury' based on a claim of injury to an award or judgment, because injuries to intangible property of this nature are felt at the plaintiff’s domicile."
Respondent oppose Petitioners' argument. He argues for the finding of a sufficient domestic nexus because "the application of RICO [in this case] to protect a foreign plaintiff who is the victim of domestic conduct relating to a domestic judgment issued against a domestic resident does not result in the international friction this Court sought to avoid in RJR Nabisco" as one of the Petitioners lives in Beverly Hills, is a judgment debtor under a California judgment, and has been held in contempt of a California court for numerous efforts devised, directed, and deployed from California to avoid paying that judgment. Respondent explains that "[t]his case centers on [that Petitioner's] collusion with numerous others in carrying out RICO schemes that include alleged conduct in or targeted at California causing injury to Respondent['s] California property, i.e., the California judgment."
Oral argument in this case is set for April 25, 2023.
Comments