RICO Act – History and Current Practice

Throughout the 1950s and 1960s, the U.S. Congress sought a way to curb organized crime in America, holding numerous hearings that discussed how mob bosses and Mafia-affiliated families manipulated the system to avoid punishment while leading vast syndicates. The legislation that grew out of these hearings, the Racketeer Influenced and Corrupt Organizations (RICO) Act, a part of the larger Organized Crime Control Act of 1970, enabled criminal and civil charges to be brought against the leaders of these organizations by establishing the existence of a criminal enterprise and a pattern of illegal behavior. However, while these racketeering charges were largely successful at defanging the Mafia, the current use of RICO in civil suits has become somewhat controversial.

In trials featuring names like Paul Castellano, “Fat Tony” Salerno, and Carmine “The Snake” Persico, RICO succeeded in taking down many of the country’s most infamous mob bosses. While the act has been instrumental in the fight against organized crime, the wide range of racketeering activities, which includes everything from murder or theft to copyright infringement or securities fraud, along with the broad definition of “enterprise,” has created an environment in which civil actions using RICO have become increasingly popular, creating debate among legal professionals and business leaders. Civil actions that involve RICO award treble damages, creating incentives for plaintiffs to uncover possible racketeering violations during discovery; and the pretrial asset and property seizure injunctions, originally designed to target Mafia shell corporations, place what some consider an undue burden on defendants.


St. Thomas More Law Honor Society: Celebrating Service and Scholarship

Since its founding at Loyola Law School, in Los Angeles, the St. Thomas More Law Honor Society has sought to recognize academic excellence, bring attention to important moral and ethical issues related to legal topics, and share the expertise of its student members and alumni with the school. The society invites students ranking in the top 15 percent of their class to become members between their second and fourth years at the school. It provides everything from forums devoted to the current state of legal affairs to tutoring services for first-year law students; it also proffers the Medallion Award, an honor recognizing exemplary contributions to the legal community.

Like other similarly named organizations throughout the country, the St. Thomas More Law Honor Society takes its title from the English lawyer and humanist Sir Thomas More, who was sainted in 1935. As a secular figure, he was called to the bar in 1502; he joined parliament only two years later and served as an advisor to King Henry VIII and as chancellor. However, his Roman Catholic faith created conflict with King Henry, and before the end of the Reformation, he had been martyred.

Companies Advised to Be Cautious in “Green” Product Descriptions

Winston & Strawn partner Neal Marder, an attorney with extensive experience defending groups against class action lawsuits, notes that “greenwashing” is an upcoming trend as more and more companies make false or misleading claims about their products’ environmental friendliness. As companies attempt to capitalize on consumers’ growing interest in earth-friendly products and services, Neal Marder advises businesses to be careful in choosing words and symbols to describe their products that will not mislead consumers and prompt a successful class-action lawsuit.

Two recent cases litigated in California illustrate the importance of properly representing a product’s “green” features. In Koh v. SC Johnson & Son, Inc., a judge concluded that a “seal of approval” label with a green background highlighting “Greenlist ingredients” on Windex products could lead a consumer to believe the cleaners were endorsed by a third party. The plaintiff has been certified for a class action lawsuit. In another case involving Fiji bottled water, a judge ruled that a plain “green drop” symbol on water bottles was not enough to suggest that an outside group approved the product’s environmentally friendly features.

Plaintiffs Denied Class Certification in Chinese Automotive Lawsuit

A team of attorneys, including Neal Marder of Winston & Strawn, successfully defended China Automotive Systems against a two-part lawsuit challenging its accounting practices. The efforts of Neal Marder and his team led to the judge denying shareholders’ class certification in their lawsuit, signaling a setback for a slew of similar lawsuits against Chinese reverse-merger companies. US District Court Judge Katherine Forrest stated that the plaintiffs, three purchasers of China Automotive securities, did not effectively show that they were entitled to a class-action lawsuit.

The case stemmed from a complaint that China Automotive Systems released false and misleading accounting statements that were later revealed to be the product of accounting fraud. When the company announced that it would restate its finances, its stock price dropped and the plaintiffs who sued wanted their lawsuit to represent all American investors who bought stock in China Automotive Systems during that time period. China Automotive was one of many Chinese companies that entered the US stock market through a reverse merger during this time, and its victory in this lawsuit was widely lauded as one of the first of its kind.

Class Action Lawsuits and Out-of-Court Settlements

An accomplished attorney with many years of experience in commercial litigation and class action lawsuits, Neal Marder currently works as a partner in the Los Angeles office of Winston & Strawn. In November 2011, Neal Marder and several associates at Winston & Strawn published an article titled “Out-of-Court Settlement Programs Can Avert a Class Action,” which discusses the potential value of settling in a timely fashion.

In the article, Marder argues that a quick settlement dissuades the court from completing a class certification that would enable plaintiffs to seek significant damages on behalf of a large group of individuals. Additionally, a quick settlement represents an equitable out-of-court solution and has the potential to counter negative publicity and restore goodwill with the company’s customers. Although settlements often require defendants to incur a large lump sum cost, they eliminate the need for extended litigation fees and prove themselves highly cost-effective in the long run.

Law Seminars International Hosts 2013 Conference on Class Actions

On May 13th, legal professionals from across the country joined Law Seminars International (LSI) in Seattle for the two-day Comprehensive Conference on Class Actions and Other Aggregate Litigation. Themed “Practice Tips for Keeping Up With a Rapidly Changing Landscape,” the meeting covered class action trends across the United States, highlighted new Supreme Court cases, and discussed the Consumer Financial Protection Bureau. Attorneys, business executives, government officials, and consultants alike benefited from analysis of some of 2012’s most important class action developments. The program, which featured talks by such leading attorneys as Charles B. Casper and Timothy G. Fielden, provided 13.25 Washington Continuing Legal Education credits.

Neal Marder, a partner at Winston & Strawn’s Los Angeles offices, spoke at LSI’s Seventh Annual Comprehensive Conference on Litigating Class Actions in 2011. During this presentation, he lectured on how increased regulation, specifically through the Dodd Frank Act, could lead to increased rates of class action lawsuits. Named one of the Best Lawyers in America for six consecutive years, Neal Marder regular speaks at national conferences and hosts webinars and other educational events related to class action litigation.

Averting Class Action Lawsuits with Good Faith Practices

An experienced attorney and current partner in Winston & Strawn’s Los Angeles office, Neal Marder has contributed to a number of articles about defending against class action lawsuits. In a 2011 article titled “Class Actions: Act Early, Stay a Step Ahead of the Plaintiff’s Bar,” Neal Marder and his co-authors discuss several ways to avoid class actions, including the implementation of good faith business practices.

In cases involving damage claims, defendants typically have time to resolve the case before the plaintiff can file for a class action. As such, companies can reduce the impact of a claim by adhering to high standards of conduct and being responsive to communications and complaints from customers and employees. Businesses that employ these practices can resolve small disputes in a timely and effective manner, which prevents them from gaining momentum with a large class of individuals. If a pending class shrinks to a small number, most plaintiff’s attorneys will not be incentivized to pursue a class action lawsuit.