Caseflicks

Supreme Court of the United States • 1981

United States v. Turkette

452 U.S. 576 | 101 S. Ct. 2524 | 69 L. Ed. 2d 246 | 1981 U.S. LEXIS 32 | 49 U.S.L.W. 4743

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Takeaway

In short, this case establishes that RICO applies to wholly criminal organizations as well as legitimate businesses infiltrated by racketeers, while requiring separate proof of both an enterprise and a pattern of racketeering activity.

Background

A nine-count federal indictment charged Turkette and others with operating a group associated for the illegal trafficking of narcotics, arson and insurance fraud, bribery of local police, and corruption of state-court proceedings. The RICO-conspiracy count alleged that the group was an enterprise whose affairs were conducted through a pattern of racketeering activity; the remaining counts charged substantive drug and insurance-fraud offenses.

After a six-week trial, the jury convicted Turkette on all counts. The First Circuit reversed the RICO conviction, concluding that RICO's definition of "enterprise" covers only legitimate businesses or organizations infiltrated by racketeers, not an association formed solely to commit crimes. The Supreme Court granted review to resolve a conflict among the circuits.

Issues

Issue #1

Whether RICO's definition of "enterprise" includes an organization that exists solely for criminal purposes.

Holding

Yes. RICO reaches both legitimate and wholly illegitimate enterprises, including groups associated in fact exclusively to commit crimes.

Reasoning

The statutory text controlled. Section 1961(4) defines an enterprise to include "any" union or group of individuals associated in fact, whether or not it is a legal entity. Nothing in that definition limits covered associations to legitimate ones. Congress could readily have inserted such a limitation, but did not.

The First Circuit improperly invoked ejusdem generis. Section 1961(4) identifies two distinct categories: legally recognized entities, such as partnerships and corporations, and groups associated in fact that are not legal entities. The latter category is not a general catchall limited by the former; it independently covers informal associations. Moreover, even legally recognized entities may operate for wholly illegal purposes, so legitimacy is not a shared characteristic that could be imported into the second category.

Reading RICO to cover criminal enterprises does not create inconsistency among the Act's substantive provisions. Sections 1962(a) and (b) plainly address organized crime's investment in and acquisition of legitimate businesses, but their language also reaches investment in or acquisition of unlawful businesses, such as gambling or loan-sharking operations. The available civil remedies likewise can help strip criminal organizations of illicit gains and do not narrow the criminal prohibitions merely because a particular remedy may be less useful in a particular case.

Congress understood that RICO would expand the federal role in addressing organized crime, including conduct that was also criminal under state law. The statute expressly incorporates numerous state-law crimes as racketeering predicates and preserves state criminal authority. Courts therefore could not restrict the statute simply because its application overlaps with traditional state-law enforcement.

RICO's stated purpose confirms the ordinary meaning of its text. Although Congress was deeply concerned with organized crime's infiltration of legitimate businesses, it also sought to eradicate organized crime by attacking its economic base and its sources of power. Excluding associations engaged solely in drug trafficking, loan sharking, theft, fencing, or similar crimes would leave beyond RICO's reach the very criminal activity that supplies the resources used to infiltrate legitimate enterprise.

Issue #2

Whether a pattern of racketeering activity is itself the RICO enterprise, such that treating a criminal group as an enterprise makes the enterprise element superfluous.

Holding

No. The enterprise and the pattern of racketeering activity are separate elements, even though the evidence proving them may overlap.

Reasoning

An enterprise is an entity: a group of people associated together for the common purpose of engaging in a course of conduct. It must be shown through evidence of an ongoing formal or informal organization and evidence that its associates function as a continuing unit.

A pattern of racketeering activity, by contrast, is a series of predicate criminal acts defined by the statute. The Government must prove both the continuing enterprise and the requisite racketeering acts; proof of one does not necessarily prove the other. Thus, a wholly criminal enterprise does not collapse into the pattern of crimes it commits.

Dissents

Justice Stewart

Reasoning

Justice Stewart would have affirmed the First Circuit. He agreed with that court's interpretation that RICO's use of the term "enterprise" was directed to legitimate organizations and did not extend to an association existing exclusively to commit crimes.