Facts of the Case

Robert A. Beck, II, of Southeastern Insurance Group (SIG), alleged that after he discovered former senior officer and director Ronald M. Prupis' unlawful conduct and contacted regulators, Prupis enacted a scheme to remove him from SIG. Beck sued Prupis under the Racketeer Influenced and Corrupt Organizations Act (RICO). Beck alleged that his injury, the loss of his employment, served to further Prupis' conspiracy and therefore provided a cause of action under RICO. The District Court dismissed Beck's RICO conspiracy claim. The court agreed with Prupis that employees who are terminated for refusing to participate in RICO activities, or who threaten to report RICO activities, do not have standing to sue under RICO for damages from their loss of employment. In affirming, the Court of Appeals held that because the act causing Beck's injury was not an act of racketeering, it could not support a RICO cause of action.

Question

May a person injured by an action furthering a conspiracy sue under the Racketeer Influenced and Corrupt Organizations Act even if the action itself was not an act of racketeering?

Conclusion

No. In a 7-2 opinion delivered by Justice Clarence Thomas, the Court held that an injury caused by an overt act that is not an act of racketeering or otherwise wrongful under the Racketeer Influenced and Corrupt Organizations Act does not give rise to a cause of action under RICO. Thus, because Prupis' scheme to remove Beck from SIG was not an act of racketeering itself, Beck had no ground to sue him under RICO. Although Prupis did engage in acts of racketeering, Justice Thomas wrote for the Court that, "the alleged overt act (terminating) in the present case was not independently wrongful under any substantive provision of RICO."