Second Circuit Introduces New Test For Determining Standing Under RICO

Recently, in Bascuñan v. Elsaca, the Second Circuit adopted a new test for domestic injuries alleged under the Racketeer Influenced and Corrupt Organizations Act (RICO) when the plaintiff is a foreign litigant. The Second Circuit reversed the district court's dismissal, thereby reviving the civil RICO suit by a Chilean national alleging theft of specifically identifiable property valued at $64 million that was located in the United States when stolen.

This case is the first to tackle the question of how to determine whether an injury under RICO is "domestic" after the Supreme Court's ruling in RJR Nabisco v. European Community. In RJR Nabisco, the Court held that a private right of action under RICO does not apply extraterritorially, but did not specifically set forth a test for determining whether an injury is domestic. Shortly after the RJR Nabisco decision, the district court in Bascuñan dismissed the plaintiff's complaint, applying a residency-based test.