Monthly Archives: March 2015

RICO Claims in Business Lawsuits

By | March 4, 2015

rico-lawsuit-diagramThe RICO Act (Racketeer Influenced and Corrupt Organizations) is used in private civil litigation though its original construction and enactment was under the federal criminal code (Title IX of the Organized Crime Act of 1970). The statue provides a private right of action including recovery of treble damages (3 times damages) and attorney’s fees to any person or business injured by reason of a violation of RICO.  Its use in business litigation is often complex—sometimes overly complex—and typically avoided in favor of common law claims of fraud, breach of conduct or other business torts such as breach of fiduciary duty.

Lawyers are often attracted to adding RICO claims to commercial litigation because the ability to collect, or at least threaten, the recovery of attorney fees and treble damages (typically not available in a standard fraud or breach of fiduciary duty case) . The statute’s express ability to be utilized by a person injured in their “business or property” precipitated its use in business litigation.  Personal injury claims are expressly excluded by the statute.

State and Federal courts have concurrent jurisdiction over private (civil) RICO claims, meaning one can bring a federal RICO claim in state court. However, Colorado maintains its own organized crime act under the acronym COCCA (Colorado Organized Crime Control Act), which like its federal counterpart RICO, also contains a private civil right of action. Where RICO is used in Colorado lawsuits, it is typical that violations of COCCA are also raised in the same case.

Section 1962 of RICO identifies four types of conduct that give rise to a civil RICO claim, the most common in the case of business or commercial litigation are found in subsections (c) and (d).  Subsection (a) of 1962 makes it unlawful for any person who has derived income from a “pattern of racketeering activity” to use or invest the income in an “enterprise.”  Subsection (b) makes it unlawful to acquire or maintain an interest in an “enterprise” through a “pattern of racketeering activity.”  Subsection (c) makes it unlawful for a person employed or associated with an “enterprise” to participate in the conduct of the enterprises affairs.  And Subsection (d), a catch all of sorts, makes it illegal for any person to conspire to violate any of subsections (a) through (c).

A common element of all types of RICO claims is the racketeering conduct must be part of a “pattern” defined by statute as two or more “acts of racketeering activity.”  These underling illegal acts are called the “predicate acts” and generally consist of separate crimes, such as violations of the criminal code, controlled substances, fraud, obstruction of justice, bribery, etc.

COCCA and RICO claims in business lawsuits can be a potent tool or additional claim added to a case in addition to claims of fraud or other wrongful conduct. Proving a RICO claim in business litigation involves proving the individual “predicate acts” as well as the elements of RICO including meeting the definitions of proving an “enterprise” and “racketeering activity.” As with any litigation tool, its use should be well thought out and strategically deployed. Defense of these claims typically focus on defeating one or more of the individual elements, but only rarely and for specific purposes are civil RICO claims brought in isolation.

What is a Deposition in Your Lawsuit?

By | March 3, 2015
Not me taking a deposition.

Not me taking a deposition.

The general definition of a deposition is:  a witness’s sworn out-of-court testimony. It used to gather information as part of the discovery process and, in limited circumstances, may be used at trial. The witness being deposed is called the “deponent.”

The Deposition Notice:

The deposition is scheduled in good faith between the attorneys in the case at a time and place that is agreed upon. Once the date is chosen, a formal deposition “notice” is issued by the attorney that is taking the deposition. An important and sometimes overlooked aspect of the notice is the manner in which the deposition will be recorded. A deposition where a video is being taken in addition to a court reporter’s transcript involves a different type of preparation for the witness.

Witness Examination:

The oath is given to the witness. Questions are asked. Answers are given. The testimony is transcribed. It is a formal process of interviewing a witness or a party to the case to understand what they know, the basis of their knowledge, and their positions in this case. The central purpose of a deposition as part of the discovery process in litigation is to get at the facts and circumstances underlying the case. Of equal importance in the deposition is the ability of the examining attorney to gauge the credibility and demeanor of a witness in evaluating how the witness will present at trial.

The deposition transcript can be used in court for a variety of purposes, most commonly to call into question the credibility of a witness (impeachment) such as when their story changes between the deposition and trial. Portions of the transcript can also be used as attachments to court pleadings as evidence when seeking the judge’s ruling on a question or claim by one of the parties prior to trial.

The duration of the deposition is limited to “one day of seven hours” which can be expanded or reduced by an order of the court or agreement by the parties.

Deposition Objections: 

The attorney for the witness and attorneys for other parties in a multi-party case can make “objections” on the record during the depositions. These objections are noted by the court reporter and appear in the transcript, but the testimony continues. There is no judge that can rule on the objections. If the transcript is used in court the judge can later decide whether the objections are founded and rule accordingly.