Facts of the Case

Cedric Kushner Promotions, Ltd., a corporate promoter of boxing matches, sued Don King, the president and sole shareholder of a rival corporation, alleging that King had conducted his corporation's affairs in violation of the Racketeer Influenced and Corrupt Organizations Act (RICO). RICO makes it "unlawful for any person employed by or associated with any enterprise...to conduct or participate...in the conduct of such enterprise's affairs through a pattern of racketeering activity." The District Court dismissed the complaint. In affirming, the Court of Appeals held that RICO applies only where a plaintiff shows the existence of two separate entities, a "person" and a distinct "enterprise," the affairs of which that "person" improperly conducts. The court concluded that King was part of the corporation, not a "person," distinct from the "enterprise," who allegedly improperly conducted the "enterprise's affairs."

Question

Are Don King and his corporation a distinct "person" and "enterprise," such that RICO applies?

Conclusion

Yes. In a unanimous opinion delivered by Justice Stephen G. Breyer, the Court held that "the need for two distinct entities is satisfied; hence, the RICO provision...applies when a corporate employee unlawfully conducts the affairs of the corporation of which he is the sole owner -- whether he conducts those affairs within the scope, or beyond the scope, of corporate authority." "The corporate owner/employee, a natural person, is distinct from the corporation itself, a legally different entity," wrote Justice Breyer. "A corporate employee who conducts the corporation's affairs through an unlawful RICO 'pattern...of activity,' uses that corporation as a 'vehicle' whether he is, or is not, its sole owner."