Earlier this month, the U.S. Court of Appeals for the Ninth Circuit reversed summary judgment in favor of defendants who faced a RICO suit following resolution of arbitration with the plaintiffs. The case involved a dispute over whether the defendants tried to overtake a foreign subsidiary of the plaintiffs. A relevant agreement between the parties required the plaintiffs to submit to arbitration under Singapore law. The plaintiff brought suit in the Northern District of California, but that case was dismissed on forum non conveniens grounds. As part of that suit, the plaintiff included a RICO claim and sought treble damages. The Singapore arbitration took about two decades to reach completion, following which time the defendants paid the arbitral award to the plaintiff. Then, the defendants found that the plaintiff had re-initiated suit in California, continuing to seek treble damages under RICO.
The court balanced the treble damages provision of RICO with the “one satisfaction rule,” the principle that a plaintiff should not recover more than their actual losses. The “full measure” of the plaintiff’s claims were not satisfied by the arbitration’s award of actual losses, and, thereby, the RICO trebling claim was not extinguished. The court remanded the case for further proceedings, albeit with a limitation that the previous arbitral award would be offset against any liability on the RICO claim. Uthe Technology Corp. v. Aetrium, Inc., No. 3:L95-cv-02377 (9th Cir. Dec. 11, 2015).
This post written by Zach Ludens.
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