Racketeering, RICO and the Revenue Rule in Attorney General of Canada v. R.J. Reynolds: Civil RICO Claims for Foreign Tax Law Violations

Authors

Elizabeth J. Farnam

Abstract

When Congress passed the Racketeer Influenced Corrupt Organizations Act (RICO), it created a civil cause of action for any entity, including a foreign government, to recover for injury caused by a defendant's pattern of racketeering activity. However, Congress did not expressly indicate how the revenue rule, a conflict of laws doctrine that allows a court to decline to enforce a foreign government's tax claim or judgment, would relate to civil RICO claims. In Attorney General of Canada v. R.J. Reynolds Tobacco Holdings, Inc., the United States Court of Appeals for the Second Circuit held that the revenue rule barred Canada's civil RICO suit for lost tax revenues caused by R.J. Reynolds' extensive tobacco smuggling scheme. This Note argues that the revenue rule should not block Canada's civil RICO suit. The rationale for the revenue rule, the constitutional separation of powers principle, would not be implicated if the court were to hear the case. In addition, the majority opinion impermissibly expanded the revenue rule to restrict the scope of RICO because the rule had previously only applied to claims based on foreign tax laws.

First Page

843

Recommended Citation

Elizabeth J. Farnam, Notes and Comments, Racketeering, RICO and the Revenue Rule in Attorney General of Canada v. R.J. Reynolds: Civil RICO Claims for Foreign Tax Law Violations, 77 Wash. L. Rev. 843 (2002).
Available at: https://digitalcommons.law.uw.edu/wlr/vol77/iss3/7