Hemi Group LLC v. City of New York (2009)
- Docket
- 08-969
- Decided
- 2009-01-01
Summary
Question: Does the City of New York meet the RICO "causation" requirements in its suit against out-of-state cigarette vendors that the plaintiff be directly injured in its "business or property" when the City merely alleges an injury from the nonpayment of taxes by non-litigant third-parties? Conclusion: No. The Supreme Court reversed the Second Circuit holding that because the City of New York cannot show that it lost revenue "by reason of" the alleged RICO violation, it cannot state a RICO claim. With Chief Justice John G. Roberts writing for the majority and joined by Justices Antonin G. Scalia, Clarence Thomas, and Samuel A. Alito, and Justice Ruth Bader Ginsburg in part, the Court reasoned that to establish that an injury came about "by reason of" a RICO violation, a plaintiff must show both, "but for" and "proximate" causation. Here, the Court concluded that the City's causal theory was even more remote than in cases where the Court had failed to find proximate cause. Justice Ruth Bader Ginsburg wrote a separate opinion, concurring in part and concurring in the judgment. She criticized the City for attempting to bring a claim for fraud that arose under violations of the Jenkins Act, but failed to actually bring a claim for violations under the Jenkins Act. Justice Stephen G. Breyer, joined by Justices John Paul Stevens and Anthony M. Kennedy, wrote a separate dissenting opinion. In contrast to the majority, he argued that Hemi Group's failure to provide New York State with the names and addresses of its New York City cigarette customers proximately caused New York City to lose tobacco tax revenue.