Remember When RICO Was About The Mafia?

Insurance Reinsurance Managed Healthcare Review - Spring 2012

In 1970, Congress enacted the Organized Crime Control Act within which is the Racketeer Influenced and Corrupt Organizations Act better known as "RICO" (codified as amended at 18 U.S.C. §§ 1961-68 (2011)). The primary target of RICO was organized crime, but the statute was drafted without any such limitation to its applicability. Indeed, RICO has been compared to the Ku Klux Klan Act of 1871, which while aimed at the Klan in the south after the Civil War, could be applied to any person depriving another of his or her civil rights. (18 U.S.C. §§ 241-242 and 42 U.S.C. § 1981, et seq.).

Because RICO's civil sanctions include injunctions, treble damages, costs and attorneys' fees, it is a desirable vehicle to attack all types of business practices including those of insurers. In addition to the Federal RICO statute, 33 states have enacted their own racketeering legislation. Under the Federal RICO statute, plaintiffs must show both a criminal enterprise and a pattern of racketeering activities, though the term "enterprise" can be broadly defined and encompass almost anything. Indeed, the Eleventh Circuit held that a pick-up basketball game...